Document:

Exhibit

Execution Version

LOAN AGREEMENT
dated as of May 6, 2019
by and between
3032 WILSHIRE INVESTORS LLC, 
a Colorado limited liability company
 (as Borrower)
and
READYCAP COMMERCIAL, LLC,
a Delaware limited liability company, d/b/a 
Ready Capital Structured Finance
(as Lender)

Premises:
3032 Wilshire Boulevard
Santa Monica, California

TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS; PRINCIPLES OF CONSTRUCTION    1
		
	Section 1.1.
	Definitions    11

		
	Section 1.2.
	Location of Additional Defined Terms    11

		
	Section 1.3.
	Principles of Construction    13

ARTICLE 2 THE LOAN    13
		
	Section 2.1.
	The Loan    13

		
	Section 2.2.
	Interest Rate; Payments; Prepayment.    14

		
	Section 2.3.
	Extension Option    14

		
	Section 2.4.
	Origination Fee; Exit Fee.    14

ARTICLE 3 RESERVE ACCOUNTS; RESTRICTED ACCOUNT; CASH COLLATERAL ACCOUNT    14
		
	Section 3.1.
	Reserve Accounts Generally.    14

		
	Section 3.2.
	Interest Reserve Funds.    15

		
	Section 3.3.
	Operating Expense Reserve Funds; Tax and Insurance Monthly Installment.    

		
	Section 3.4.
	Capital Expenditures Reserve Funds.    17

		
	Section 3.5.
	Tenant Improvements/Leasing Commissions Reserve Funds.    18

		
	Section 3.6.
	Replacement Costs Reserve Account.    19

		
	Section 3.7.
	Deposit Account; Excess Cash Flow Account.    19

		
	Section 3.8.
	Minimum Disbursement Amount; Waiver of Minor Non-Compliance; Reallocations Among Reserves    22

		
	Section 3.9.
	Interest on Reserve Accounts; Use of Remaining Reserve Funds; Refund of Remaining Funds    

		
	Section 3.10.
	Sole Dominion and Control    

		
	Section 3.11.
	Security Interest    

		
	Section 3.12.
	Rights on Default    

		
	Section 3.13.
	Financing Statement; Further Assurances    

		
	Section 3.14.
	Borrower’s Obligation Not Affected    

		
	Section 3.15.
	Property Inspections; Draw Requests    

		
	Section 3.16.
	Interest Rate Protection Agreement    

ARTICLE 4 REPRESENTATIONS AND WARRANTIES    25
		
	Section 4.1.
	Organization    25

		
	Section 4.2.
	Authorization    25

		
	Section 4.3.
	Enforceability    25

		
	Section 4.4.
	Litigation    25

		
	Section 4.5.
	Full and Accurate Disclosure    25

		
	Section 4.6.
	Compliance    26

		
	Section 4.7.
	ERISA    26

		
	Section 4.8.
	Not Foreign Person    26

Loan Agreement
Loan Number 201916813
#63074348_v17

		
	Section 4.9.
	Investment Company Act; Public Utility Holding Company Act    26

		
	Section 4.10.
	Title to the Property; Liens    26

		
	Section 4.11.
	Condemnation    27

		
	Section 4.12.
	Utilities and Public Access    27

		
	Section 4.13.
	Separate Lots    27

		
	Section 4.14.
	Assessments; Use Fees    27

		
	Section 4.15.
	Flood Zone    27

		
	Section 4.16.
	Physical Condition    27

		
	Section 4.17.
	Title Insurance    27

		
	Section 4.18.
	Leases and Rents    28

		
	Section 4.19.
	Compliance with Anti-Terrorism, Embargo, Sanctions and Anti-Money Laundering Laws    28

		
	Section 4.20.
	Organizational Chart    28

		
	Section 4.21.
	Property    28

		
	Section 4.22.
	Intentionally Deleted.    28

		
	Section 4.23.
	Insurance    29

		
	Section 4.24.
	Federal Reserve Regulations    29

		
	Section 4.25.
	Taxes    29

		
	Section 4.26.
	Employer Identification Number    29

		
	Section 4.27.
	Solvency    29

		
	Section 4.28.
	Business Purposes    30

		
	Section 4.29.
	Forfeiture    30

		
	Section 4.30.
	No Defaults    30

		
	Section 4.31.
	Survival of Representations    30

ARTICLE 5 COVENANTS    30
		
	Section 5.1.
	Compliance with Legal Requirements; Impositions and Other Claims; Contests.    30

		
	Section 5.2.
	Maintenance; Waste; Alterations    31

		
	Section 5.3.
	Access to Property and Records    31

		
	Section 5.4.
	Management of Property    31

		
	Section 5.5.
	Financial and Other Reporting.    32

		
	Section 5.6.
	Leases.    34

		
	Section 5.7.
	Place of Business; State of Organization; Operations    35

		
	Section 5.8.
	Zoning; Joint Assessment    35

		
	Section 5.9.
	Equity Requirements    35

		
	Section 5.10.
	Notice of Default    35

		
	Section 5.11.
	Litigation    35

		
	Section 5.12.
	Performance by Borrower    35

		
	Section 5.13.
	Guarantor Financial Covenants    36

		
	Section 5.14
	Performance Threshold    

		
	Section 5.15.
	Bringdown of Certain Representations and Warranties    36

ARTICLE 6 TRANSFERS AND CHANGE OF BUSINESS    36
		
	Section 6.1.
	Transfers    36

		
	Section 6.2.
	Other Indebtedness    38

		
	Section 6.3.
	Single-Purpose Entity; Change In Business    38

ARTICLE 7 INSURANCE, CASUALTY, CONDEMNATION AND RESTORATION    38
		
	Section 7.1.
	Types of Insurance    38

		
	Section 7.2.
	Insurer Ratings    42

		
	Section 7.3.
	General Insurance Requirements.    42

		
	Section 7.4.
	Certificates of Insurance and Delivery of Policies    43

		
	Section 7.5.
	Restoration Proceeds.    43

		
	Section 7.6.
	Restoration    44

		
	Section 7.7.
	Disbursement.    46

		
	Section 7.8.
	Qualified Amount    46

ARTICLE 8 DEFAULTS    47
		
	Section 8.1.
	Event of Default    47

		
	Section 8.2.
	Remedies    48

		
	Section 8.3.
	Remedies Cumulative    48

		
	Section 8.4.
	Lender Appointed Attorney-In-Fact    49

		
	Section 8.5.
	Lender’s Right to Perform    49

ARTICLE 9 ENVIRONMENTAL PROVISIONS    49
		
	Section 9.1.
	Environmental Representations and Warranties    49

		
	Section 9.2.
	Environmental Covenants    50

		
	Section 9.3.
	Environmental Cooperation and Access    50

		
	Section 9.4.
	Environmental Indemnity    50

		
	Section 9.5.
	Duty to Defend    51

ARTICLE 10 SPECIAL PROVISIONS    51
		
	Section 10.1.
	Transfer of Loan    51

		
	Section 10.2.
	Cooperation    52

		
	Section 10.3.
	Servicer    52

		
	Section 10.4.
	Restructuring of Loan.    53

		
	Section 10.5.
	Lender Register    54

		
	Section 10.6.
	Participant Register    54

ARTICLE 11 MISCELLANEOUS    55
		
	Section 11.1.
	Survival    55

		
	Section 11.2.
	Lender’s Discretion    55

		
	Section 11.3.
	Governing Law; Submission to Jurisdiction.    55

		
	Section 11.4.
	Modification, Waiver in Writing    56

		
	Section 11.5.
	Delay Not a Waiver    56

		
	Section 11.6.
	Notices    56

		
	Section 11.7.
	Trial By Jury    57

		
	Section 11.8.
	Headings    58

		
	Section 11.9.
	Severability    58

		
	Section 11.10.
	Preferences    58

		
	Section 11.11.
	Waiver of Notice    58

		
	Section 11.12.
	Remedies of Borrower    58

		
	Section 11.13.
	Exhibits Incorporated    58

		
	Section 11.14.
	Offsets, Counterclaims and Defenses    58

		
	Section 11.15.
	No Joint Venture or Partnership    59

		
	Section 11.16.
	Waiver of Marshalling of Assets Defense    59

		
	Section 11.17.
	Waiver of Counterclaim    59

		
	Section 11.18.
	Construction of Documents    59

		
	Section 11.19.
	Brokers and Financial Advisors    59

		
	Section 11.20.
	Counterparts    59

		
	Section 11.21.
	Estoppel Certificates    59

		
	Section 11.22.
	Bankruptcy Waiver    60

		
	Section 11.23.
	Entire Agreement    60

		
	Section 11.24.
	Liability and Indemnification.    60

		
	Section 11.25.
	Publicity    61

		
	Section 11.26.
	Time of the Essence    61

		
	Section 11.27.
	Taxes    61

		
	Section 11.28.
	Further Assurances    62

		
	Section 11.29.
	Permanent Financing    62

SCHEDULES AND EXHIBITS

Schedule 1 - Leasing Guidelines
Schedule 2 - Loan Documents
Schedule 3 - Approved Annual Budget
Schedule 4 - Approved Capital Expenditures Budget
Schedule 5 – Rent Roll
Schedule 6 - List of Environmental Reports

Exhibit A-1 – Borrower Compliance Certificate
Exhibit A-2 -  SRT Guarantor Compliance Certificate
Exhibit B - Deposit Account Information
Exhibit C – Disbursement Conditions
Exhibit D - Excess Cash Flow Account Information
Exhibit E - Definition of Single-Purpose Entity
Exhibit F – Tenant Direction Letter
Exhibit G – Disbursement Certification
Exhibit H – Organizational Chart of Borrower

LOAN AGREEMENT
THIS LOAN AGREEMENT (as the same may from time to time hereafter be modified, supplemented or amended, this “Agreement”), dated as of May 6, 2019 (the “Closing Date”), is made by and among READYCAP COMMERCIAL, LLC, a Delaware limited liability company, d/b/a Ready Capital Structured Finance (together with its successors and assigns, “Lender”), having an address of 1320 Greenway Drive, Suite 560, Irving, Texas 75038, and CP 3032 WILSHIRE INVESTORS LLC, a Colorado limited liability company, having an address c/o Cadence Capital Investments LLC, 6400 S. Fiddlers Green Circle, Suite 1820, Greenwood Village, Colorado  80111 (“Borrower”).
RECITALS
Borrower desires to obtain a loan (the “Loan”) from Lender in the maximum principal amount of THIRTEEN MILLION NINE HUNDRED FORTY-FOUR THOUSAND AND 00/100 DOLLARS ($13,944,000.00) (the “Loan Amount”), and Lender is willing to make the Loan on the terms and conditions set forth in this Agreement and the other Loan Documents.
NOW, THEREFORE, in consideration of the making of the Loan by Lender, the parties hereby agree as follows:
ARTICLE 1 
DEFINITIONS; PRINCIPLES OF CONSTRUCTION
Section 1.1 Definitions. For all purposes of this Agreement and the other Loan Documents, the following terms shall have the following respective meanings.  The location of additional defined terms is set forth in Section 1.2 below:
“Account Bank” means Key Bank, National Association, or any such other bank selected by Borrower (to execute and deliver the Deposit Account Control Agreement) and acceptable to Lender.
“Affiliate” of any specified Person means any other Person Controlling, Controlled by or under common Control with such specified Person.
“Approved Accounting Method” means generally accepted accounting principles or such other method of accounting approved by Lender from time to time, consistently applied.
“Approved Lease” means any Lease or proposed Lease that complies with the Leasing Guidelines (i.e., is not a Material Lease).
“Approved Lease Form” means the form of tenant lease agreement used by Borrower to lease all or any part of the Property, which Lender has approved in writing prior to its usage.
“Approved Leasing Expenses” shall mean actual out-of-pocket expenses incurred by Borrower in leasing space at the Property pursuant to Leases entered into in accordance with the Loan Documents, including brokerage commissions and tenant improvements and tenant 

allowances, which expenses (a) are (i) specifically approved by Lender in connection with approving the applicable Lease in connection with Leases that require Lender’s approval under the Loan Documents, (ii) incurred in the ordinary course of business and on market terms and conditions in connection with Leases which do not require Lender’s approval under the Loan Documents (and, if requested by Lender in connection with leases for which the landlord is performing the tenant improvements, Lender shall have received and approved a budget for such tenant improvement costs and a schedule of leasing commissions payments payable in connection therewith), or (iii) otherwise approved by Lender, which approval shall not be unreasonably withheld or delayed, and (b) are substantiated by executed Lease documents and brokerage agreements.
“Borrower Compliance Certificate” means a compliance certificate substantially in the form of Exhibit A-1 annexed hereto, signed by a Responsible Officer of a Borrower.
“Business Day” means any day other than a Saturday, a Sunday or any other day on which any of the following institutions is not open for business: (a) banks and savings and loan institutions in New York, New York, (b) the trustee under a Securitization (or, if no Securitization has occurred, Lender), (c) any Servicer, (d) the financial institution that maintains any collection account for or on behalf of any Servicer or any Reserve Account, (e) the New York Stock Exchange, or (f) the Federal Reserve Bank of New York. 
“Capital Expenditures” means, individually or collectively, as the case may be and the context so requires, the Hard Cost Capital Expenditures and/or the Soft Cost Capital Expenditures.
“Capital Expenditures Reserve Account” means the Reserve Account into which any of the Capital Expenditures Reserve Funds are deposited.
“Capital Expenditures Reserve Funds” means, individually or collectively, as the case may be and the context so requires, the Hard Cost Reserve Funds and/or the Soft Cost Reserve Funds.
“Code” means the Internal Revenue Code of 1986, as amended, and any successor statutes thereto.
“Control” (and terms correlative thereto) when used with respect to any specified Person means the power to direct the management and policies of such Person, whether through the ownership of voting securities or other beneficial interests, by contract or otherwise.
“Currying Flavors Lease” means that certain Retail Lease between Borrower, as landlord, and Hasan Group, LLC a California limited liability company (d/b/a Currying Flavors), comprising approximately 857 total square feet at the Property as more specifically set forth therein.
“Debt Service” means, with respect to any particular period of time, Interest and, if applicable, principal payments due and payable under the Note and this Agreement.
“Debt Yield Ratio” means, as of any date of calculation, a ratio conveyed as a percentage in which: (a) the numerator is the Net Operating Income (which shall be calculated on the basis of the Operating Expenses and the Operating Income for a trailing period of six (6) months each (annualized and normalized)); and (b) the denominator is the Loan Amount. Lender’s calculation 

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of the Debt Yield Ratio, and all component calculations, shall be conclusive and binding on Borrower absent manifest error. 
“Deposit Account” shall mean the account established or to be established with the Account Bank pursuant to the terms of the Deposit Account Control Agreement, including all replacements or substitutions therefor, for the deposit of the Operating Income pursuant to and in accordance with Section 3.7 hereof, as identified on Exhibit B annexed hereto. 
“Deposit Account Control Agreement” means that certain Deposit Account Control Agreement by and among Borrower, Lender and Account Bank to be entered into prior to or on the Closing Date, in form, scope and substance acceptable to Lender, as the same may thereafter be amended, restated, replaced, supplemented or otherwise modified from time to time.
“Disbursement Conditions” means the specific conditions to be satisfied with respect to the disbursement of any Reserve Funds pursuant to a Draw Request, which conditions are specified on Exhibit C annexed hereto.
“Disclosure Document” means, individually or collectively and as applicable, any offering circular, prospectus, prospectus supplement, private placement memorandum or other offering document, in each case, in connection with a Securitization.
“Draw Request” means the written request to be furnished by Borrower to Lender in connection with the disbursement of any of the Reserve Funds, which written request shall be in form, scope and substance acceptable to Lender, acting reasonably.
“Eligible Account” means (a) an account maintained with a federal or state chartered depository institution or trust company whose (x) commercial paper, short-term debt obligations or other short-term deposits are rated at least “A-1” by S&P and the equivalent rating by each other Rating Agency if the deposits in such account are to be held in such account for thirty (30) days or less or (y) long-term unsecured debt obligations are rated at least “A” by S&P and the equivalent rating by each other Rating Agency if the deposits in such account are to be held in such account for more than thirty (30) days; or (b) a segregated trust account maintained with the trust department of a federal or state chartered depository institution or trust company acting in its fiduciary capacity which institution or trust company is subject to regulations regarding fiduciary funds on deposit substantially similar to 12 C.F.R. § 9.10(b); or (c) an account otherwise acceptable to each Rating Agency, as evidenced by a Rating Agency confirmation relating to such account.
“Environmental Law” means any present and future applicable federal, state and local laws, statutes, ordinances, rules, regulations and the like, as well as common law, relating to Hazardous Substances or related to liability for or costs of violations of any of the foregoing, including the following statutes, as amended, any successor thereto, and any regulations promulgated pursuant thereto, and any state or local statutes, ordinances, rules, regulations and the like addressing similar issues:  the Comprehensive Environmental Response, Compensation and Liability Act; the Emergency Planning and Community Right-to-Know Act; the Hazardous Substances Transportation Act; the Resource Conservation and Recovery Act (including Subtitle I relating to underground storage tanks); the Solid Waste Disposal Act; the Clean Water Act; the Clean Air Act; 

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the Toxic Substances Control Act; the Safe Drinking Water Act; the Occupational Safety and Health Act; the Federal Water Pollution Control Act; the Federal Insecticide, Fungicide and Rodenticide Act; the Endangered Species Act; the National Environmental Policy Act; and the River and Harbors Appropriation Act.
“Equity Requirements” means an amount equal to Eight Million Eight Hundred Five Thousand Three Hundred Thirty Five and 00/100 Dollars ($8,805,335.00). 
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended or re-codified from time to time, and the regulations promulgated thereunder.
“Exchange Act” means the Securities Exchange Act of 1934, as the same may be amended, modified or replaced from time to time.
“Excess Cash Flow Account” means the custodial account established with Lender for the deposit of the Net Operating Income (or the required portion thereof) pursuant to and in accordance with Section 3.7(d) hereof, as identified on Exhibit D annexed hereto.
“Exit Fee” means an amount equal to One Hundred Four Thousand Five Hundred Eighty and 00/100 Dollars ($104,580.00)(i.e., three-quarters of one per cent (0.75%) of the Loan Amount).
“First Extension Fee” means an amount equal to Thirty-Four Thousand Eight Hundred Sixty and 00/100 Dollars ($34,860.00)(i.e., one-quarter of one per cent (0.25%) of the Loan Amount).
“Fiscal Year” means the 12-month period ending on December 31 of each year or such other fiscal year of Borrower as Borrower may select from time to time with the prior written consent of Lender, such consent not to be unreasonably withheld or delayed.
“Fitch” means Fitch, Inc.
“Governmental Authority” means any national, federal, state, regional or local government, or any other political subdivision of any of the foregoing, in each case with jurisdiction over Borrower, the Property, or any Person with jurisdiction over Borrower or the Property exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.
“Guarantor” means, collectively, the Rothacker Guarantor and the SRT Guarantor.
“Hard Cost Capital Expenditures” means the “hard costs” incurred by Borrower in connection with capital improvements to the Property as set forth in the Approved Capital Expenditures Budget.
 “Hard Cost Reserve Funds” means a portion of the Loan Amount equal to the sum of Four Million Seven Hundred Ninety-Six Thousand and 00/100 Dollars ($4,796,000.00), which shall be made available to Borrower only for the payment of Hard Cost Capital Expenditures pursuant to Section 3.4 hereof.

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“Hazardous Substance” means, without limitation, any and all substances (whether solid, liquid or gas) defined, listed, or otherwise classified as pollutants, toxic or hazardous wastes, toxic or hazardous substances, toxic or hazardous materials, extremely hazardous wastes, or words of similar meaning or regulatory effect under any present or future Environmental Laws or that have a documented negative impact on human health or the environment, including petroleum and petroleum products, mold or fungus, asbestos and asbestos-containing materials, polychlorinated biphenyls, lead, radon, radioactive materials, flammables and explosives.
“Impositions” means all ground rents, if any, all taxes (including, without limitation, ad valorem or value added, sales (including those imposed on lease rentals), use, single business, gross receipts, intangible transaction privilege, privilege, license or similar taxes), and all assessments water rates or sewer rents, if any, (including, without limitation, to the extent not discharged prior to the Closing Date, all assessments for public improvements or benefits, whether or not commenced or completed within the term of the Loan), now or hereafter levied or assessed or imposed against any and all of the Property or any part thereof.
“Indebtedness” means, at any given time, the Principal Indebtedness, together with all accrued and unpaid interest thereon and all other obligations and liabilities due or to become due to Lender pursuant hereto or any of the other Loan Documents.
“Indemnified Parties” means each of Lender each of its Affiliates and their respective successors and assigns, any Person who is or will have been involved with the servicing of the Loan, Persons who may hold or acquire or will have held a full or partial interest in the Loan (including Investors, as well as custodians, trustees and other fiduciaries who hold or have held a full or partial interest in the Loan for the benefit of third parties) (including any other Person who holds or acquires or will have held a participation or other full or partial interest in the Loan or the collateral therefor) and any Affiliate or designee of Lender that has filed any registration statement relating to the Securitization or has acted as the sponsor or depositor in connection with the Securitization, any Affiliate of Lender that acts as an underwriter, placement agent or initial purchaser of Securities issued in the Securitization, any other co-underwriters, co-placement agents or co initial purchasers of Securities issued in the Securitization, and each of their respective officers, directors, partners, employees, representatives, agents and Affiliates and each Person or entity who Controls any such Person within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, any Person who is or will have been involved in the origination of the Loan, any Person who is or will have been involved in the servicing of the Loan secured hereby, any Person in whose name the encumbrance created by the Security Instrument is or will have been recorded, and the respective officers, directors, and employees, agents, Affiliates, successors and assigns of any and all of the foregoing.
“Initial Advance” means a portion of the Loan Amount equal to the sum of Seven Million One Hundred Eleven Thousand and 00/100 Dollars ($7,111,000.00), the net proceeds of which will be used to fund: (a) the refinancing of the existing loan securing the Property; (b) certain closing costs incurred by Borrower in connection with the closing of the Loan, including but not limited to the payment of the Origination Fee and any broker’s fee; (c) the Interest Reserve Funds; (d) the Operating Expense Reserve Funds; and (e) the Soft Cost Reserve Funds.

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“Interest” means any and all scheduled interest payments due and payable under the Note and this Agreement.
“Interest Rate Protection Agreement” means that certain interest rate cap agreement, dated on or before the Closing Date, between Borrower and [_____________], in form, scope and substance acceptable to Lender, and with a “strike price” of three and three-quarters of one percent (3.75%) or less, covering the Loan Amount and the period from and including the Closing Date through and including the Initial Maturity Date.
“Interest Reserve Account” means the Reserve Account into which the Interest Reserve Funds are deposited.
“Interest Reserve Funds” means a portion of the Loan Amount equal to the sum of Three Hundred Thousand and 00/100 Dollars ($300,000.00), which shall be made available to Borrower only for the payment of Interest pursuant to Section 3.2 hereof. 
“Leases” means all leases, assignments, sub-leases and other agreements or arrangements  affecting the use or occupancy of all or any portion of the Property now in effect or hereafter entered into (including all lettings, subleases, licenses, concessions, tenancies and other occupancy agreements covering or encumbering all or any portion of the Property), together with any guarantees, supplements, amendments, modifications, extensions and renewals of the same.
“Leasing Guidelines” means the leasing guidelines applicable to the Property attached hereto as Schedule 1.
“Legal Requirements” means (a) all statutes, laws, rules, orders, regulations, ordinances, judgments, orders, decrees and injunctions of Governmental Authorities affecting Borrower, the Loan Documents, the Property or any part thereof, and all Permits and regulations relating thereto, (b) all covenants, agreements, restrictions and encumbrances contained in any instruments, either of record or known to Borrower, at any time in force affecting the Property or any part thereof, (c) terms of any insurance policy maintained by or on behalf of Borrower, and (d) the organizational documents of Borrower.
“Lien” means any mortgage, deed of trust, deed to secure debt, lien pledge, easement, restrictive covenant, hypothecation, assignment, security interest, conditional sale or other title retention agreement, financing lease having substantially the same economic effect as any of the foregoing, or financing statement or similar instrument.
“LIT Lease” means that certain Retail Lease, dated September 15, 2017, between Borrower, as landlord, and Lit Fitness Group, LLC, a California limited liability company, comprising approximately 2,990 total square feet of floor area at the Property as more specifically set forth therein.
“Loan Documents” means, collectively, this Agreement and all other documents, agreements, instruments and certificates now or hereafter evidencing, securing or delivered to Lender in connection with the Loan, including the documents listed on Schedule 2 attached hereto, 

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as each may be (and each of the defined terms shall refer to such documents as they may be) amended, restated, or otherwise modified from time to time.
“Loan to Value Ratio” means the percentage, calculated by taking a fraction, the numerator of which is the outstanding Principal Indebtedness and the denominator of which is the “as is” fair market value of the Property, as determined on the basis of an updated and current appraisal of the Property (obtained at the sole cost and expense of Borrower), which appraisal shall be acceptable to Lender (in its sole and absolute discretion). Lender’s calculation of the Loan to Value Ratio, and all component calculations, shall be conclusive and binding on Borrower absent manifest error.
“Losses” means any actual losses, actual damages, costs, fees, expenses, claims, suits, judgments, awards, liabilities (including strict liabilities), obligations, diminutions in value, fines, penalties, charges, costs of Remediation (whether or not performed voluntarily), amounts paid in settlement, foreseeable and unforeseeable consequential damages, litigation costs, reasonable attorneys’ fees, engineers’ fees, environmental consultants’ fees, and investigation costs (including costs for sampling, testing and analysis of soil, water, air, building materials, and other materials and substances whether solid, liquid or gas), of whatever kind or nature, and whether or not incurred in connection with any judicial or administrative proceedings, actions, claims, suits, judgments or awards (but specifically excluding punitive damages).
“Management Agreement” means any agreement entered into between Manager and Borrower pertaining to the management of the Property, as the same may be amended or otherwise modified from time to time in accordance with Section 5.4.
“Manager” means the Person designated as manager of the Property in the Management Agreement (if applicable), or any successor or assignee appointed in accordance with this Agreement. 
“Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect on, the operations, business, assets, properties, liabilities (actual or contingent), condition (financial or otherwise) or prospects of the Borrower, (b) a material impairment of the rights and remedies of the Lender under any of the Loan Documents, or of the ability of the Borrower to perform its obligations under any of the Loan Documents to which it is a party; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against the Borrower or the Guarantor of any of the Loan Documents to which it is a party.
“Material Lease” means any Lease not complying with the Leasing Guidelines, excluding immaterial deviations from the Leasing Guidelines (i.e., that is not an Approved Lease).
“Maturity Date” means the Initial Maturity Date, as the same may be extended pursuant to and in accordance with Section 2.3 hereof.
“Minimum Disbursement Amount” means an amount equal to Ten Thousand and 00/100 Dollars ($10,000.00).

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“Minimum Interest Reserve Account Amount” means an amount equal to One  Hundred Thousand and 00/100 Dollars ($100,000.00).
“Moody’s” means Moody’s Investors Service, Inc.
“Morningstar” means Morningstar Credit Ratings, LLC, a Pennsylvania limited liability company.
“Net Effective Rent” means, for any particular Lease, the total amount of rent payable during the term thereof, less the costs incurred by Borrower in connection with the entering into of such Lease (including, but not limited to, free rent, Tenant Improvements and Leasing Commissions), discounted to a “net present value” based upon a market discount rate, with each component of such calculation as determined by Lender, in its sole and absolute discretion.
“Net Operating Income” means the difference between the Operating Income and the Operating Expenses.
“Operating Expense Reserve Account” means the Reserve Account into which the Operating Expense Reserve Funds are deposited.
“Operating Expense Reserve Funds” means a portion of the Loan Amount equal to the sum of Ninety-Five Thousand and 00/100 Dollars ($95,000.00), which shall be made available to Borrower only for the payment of Operating Expenses pursuant to Section 3.3 hereof.
“Operating Expenses” means all cash expenses actually incurred by or charged to Borrower (appropriately pro-rated for any expenses that, although actually incurred in a particular period, also relate to other periods), with respect to the ownership, operation, leasing and management of the Property in the ordinary course of business, determined in accordance with the Approved Accounting Method, including, without limitation: (a) Impositions; (b) Premiums; (c) personal property taxes and other real estate taxes; (d) sales taxes or any tax on rents; (e) wages, salaries, payroll taxes and employee benefits; (f) costs of utility services; (g) maintenance, repair and custodial costs; (h) office supplies, other administrative expenses and professional fees; (i) costs of advertising and marketing for the Property; (j) costs of telephone service; (k) costs of garbage removal; (l) an allowance for income items that are determined to be uncollectible; (m) any compensation, fees or reimbursements paid to the property or asset manager of the Property pursuant to and in accordance with the Management Agreement; and (n) Two Thousand and 00/100 Dollars ($2,000.00) per month paid to Cadence Capital Investments LLC for accounting and administrative purposes. Notwithstanding the foregoing, Operating Expenses specifically exclude (1) costs of tenant improvements, (2) capital expenditures, (3) depreciation, (4) income taxes, (5) payments made towards Debt Service and all costs and expenses incurred in connection with the making and ongoing servicing of the Loan, (6) costs of Restoration following a Casualty or a Taking, (7) funds disbursed from any Reserve Account, and (8) any other non-cash items.
“Operating Income” means all gross cash income, revenues and consideration received or paid to or for the account or benefit of any Borrower resulting from or attributable to the operation or leasing of the Property determined in accordance with the Approved Accounting Method, 

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including, without limitation: (a) the Rents (from tenants, assignees, subtenants, or parties to walkway agreements); (b) amounts (to the extent included in Operating Expenses) payable by tenants to any Borrower on account of maintenance or service charges, taxes, assessments, utilities and maintenance of the Property; (c) rents and receipts from health clubs, restaurants, licenses, concessions, vending machines, laundry machines and similar items located at or operated from the Property (d) interest income; (e) proceeds of business interruption insurance; and (f) security deposits applied to the payment of rent.
“Origination Fee” means an amount equal to One Hundred Thirty-Nine Thousand Four Hundred Forty and 00/100 Dollars ($139,440.00)(i.e., one per cent (1.00%) of the Loan Amount).
“Performance Deadline” means the date that is sixty (60) days from the Closing Date.
“Performance Threshold” shall mean both: (a) the extension (subsequent to the Closing Date) of each of the Outside Delivery Dates (as such terms are respectively defined in each of the LIT Lease and the Currying Flavors Lease), under both the LIT Lease and the Currying Flavors Lease, to a date that is not later than fourteen (14) months from the Closing Date (i.e., a maximum period of sixty (60) days from the Closing Date plus twelve (12) months); and (b) the delivery to Lender of satisfactory tenant estoppels from each of the tenants under both the LIT Lease and the Currying Flavors Lease confirming, among other things, the aforementioned extension of the Outside Delivery Dates. 
“Permitted Encumbrances” means, with respect to the Property, collectively, (a) the Lien created by the Loan Documents, (b) all Liens and other matters disclosed in the title insurance policy insuring the Security Instrument, or any part thereof which have been approved by Lender, (c) Liens, if any, for Impositions imposed by any Governmental Authority not yet due or delinquent, (d) such governmental, public utility and private restrictions, covenants, reservations, easements, licenses or other agreements that are of public record and that may be granted by Borrower after the Closing Date and which do not have a Material Adverse Effect, or which are approved by Lender in writing, (e) intentionally deleted, and (f) any workers’, mechanics or similar Liens on the Property provided any such Lien is discharged or bonded in accordance with the Loan Documents. 
“Person” means any individual, corporation, limited liability company, partnership, joint venture, estate, trust, unincorporated association, or any other entity, any Governmental Authority, and any fiduciary acting in such capacity on behalf of any of the foregoing.
“Premiums” means insurance premiums payable for insurance carried on or with respect to the Property.
“Principal Indebtedness” means the principal amount of the entire Loan outstanding as the same may be increased or decreased, as a result of prepayment or otherwise, from time to time.
“Rating Agencies” means each of S&P, Moody’s, Fitch and Morningstar or any other nationally recognized statistical rating agency which has assigned a rating to the Securities.

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“Release” with respect to any Hazardous Substance includes but is not limited to any presence, release, deposit, discharge, emission, leaking, leaching, spilling, seeping, migrating, injecting, pumping, pouring, emptying, escaping, dumping, disposing or other movement of Hazardous Substances.
“REMIC” means a “real estate mortgage investment conduit”, within the meaning of Section 860D of the Code (or any successor statute) or any substantially similar vehicle for the holding of real estate indebtedness without the incurrence of taxation.
“Remediation” includes but is not limited to any activity to (a) clean up, detoxify, decontaminate, disinfect, contain, treat, remove, respond to, correct, dispose of, transport, or otherwise remediate, prevent, cure or mitigate any Release of any Hazardous Substance; any action to comply with any Environmental Laws or with any permits issued pursuant thereto; or (b) inspect, investigate, study, monitor, assess, audit, sample, test, or evaluate any actual, potential or threatened Release of Hazardous Substances.
“Replacement Costs” means the cost for any and all replacement site and building components, including, but not limited to, the roof and heating, ventilation, and air condition (HVAC) systems at the Property.
“Replacement Costs Reserve Account” means the account held by Lender into which the Replacements Costs Reserve Funds shall be deposited pursuant to this Agreement.
“Replacement Costs Reserve Funds” means an amount equal to the greater of $0.10 per gross square foot annually, but prorated monthly, which Borrower shall deposit in the Replacement Costs Reserve Account on a monthly basis commencing on the occurrence of Property Stabilization and continuing each month subsequent thereto, which shall be applied toward payment of Replacement Costs in accordance with the provisions of Section 3.6 hereof.
“Reserve Account Funds” means any or all of the funds deposited in the Reserve Accounts.
“Reserve Funds” means, collectively, the  Capital Expenditures Reserve Funds, the Interest Reserve Funds, the Operating Expense Reserve Funds, the Tenant Improvements/Leasing Commissions Reserve Funds  and the Replacement Costs Reserve Funds.
“Responsible Officer” means with respect to any Person, the chairman of the board, president, chief operating officer, chief financial officer, treasurer, vice president-finance, member or manager of such Person, on behalf of such Person and not individually.
“Restricted Account” shall mean the account established or to be established pursuant to the terms of the Deposit Account Control Agreement, including all replacements or substitutions therefor.
“Rothacker Guarantor” means William R. Rothacker, an individual. 
“S&P” means Standard & Poor’s Ratings Group, a division of the McGraw-Hill Companies.

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“Second Extension Fee” means an amount equal to Sixty-Nine Thousand Seven Hundred Twenty and 00/100 Dollars ($69,720.00)(i.e., one-half of one per cent (0.50%) of the Loan Amount).
“Securities Act” means the Securities Act of 1933, as the same shall be amended from time to time.
“Soft Cost Capital Expenditures” means the “soft costs” incurred by Borrower in connection with capital improvements to the Property as set forth in the Approved Capital Expenditures Budget.
 “Soft Cost Reserve Funds” means a portion of the Loan Amount equal to the sum of Six Hundred Thirty-Six Thousand and 00/100 Dollars ($636,000.00), which shall be made available to Borrower only for the payment of Soft Cost Capital Expenditures pursuant to Section 3.4 hereof.
“SRT Guarantor” means Strategic Realty Trust, Inc., a Maryland corporation.

“SRT Guarantor Compliance Certificate” means a compliance certificate substantially in the form of Exhibit A-2 annexed hereto, signed by a Responsible Officer of the SRT Guarantor.
“Stabilization Threshold” means (a) the Property achieving a Debt Yield Ratio of not less than  eight and one-half per cent (8.5%) for a trailing period of two (2) consecutive calendar quarters, and (b) not less than ninety per cent (90%) of the Property being leased on the basis of the most recent rent roll for the Property and executed Leases (approved by Lender if and as required hereunder) with the tenants in possession and having commenced paying rent, in each case as determined by Lender in its sole, but reasonable discretion, upon the written request of Borrower or as and when otherwise required to be determined pursuant to and in accordance with the terms, provisions, covenants and conditions of this Agreement.
“State” shall mean the state where the Property is located.

“Tenant Improvements” means alterations to the Improvements undertaken by Borrower with respect to a Lease in order to demise or improve the space demised thereunder (including, but not limited to, changes into the walls, floors, ceilings and lighting of such space).
“Tenant Improvements/Leasing Commissions Reserve Account” means the Reserve Account into which all or any portion of the Tenant Improvements/Leasing Commission Reserves Funds are deposited.
“Tenant Improvements/Leasing Commissions Reserve Funds” means a portion of the Loan Amount equal to the sum of Two Million Thirty-Seven Thousand and 00/100 Dollars ($2,037,000.00), and which shall be made available to Borrower only for the payment of Tenant Improvements and Approved Leasing Expenses pursuant to Section 3.5 hereof.
“Title Company” means First American Title Insurance Company.
“Title Policy” means the title insurance policy issued on the Closing Date by the Title Company in favor of Lender insuring the Lien of the Security Instrument.

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“Transfer” means (a) any conveyance, transfer, sale, assignment, equity pledge or Lien, whether by operation of law or otherwise, of, on or affecting (i) all or any portion of the Property, or (ii) any direct or indirect legal ownership interest in Borrower, and (b) any change in Control of the day to day operations of Borrower and the Property (including, but not limited to, any transfer of any direct or indirect legal economic and/or ownership interest in Borrower that results in: (i) the Rothacker Guarantor owning less than a fifty percent (50%) direct or indirect profits interest in Borrower and/or not having management Control of the day to day operations of Borrower and the Property); or (ii) the SRT Guarantor owning less than a 97.9% direct or indirect ownership interest in the Borrower.
“Trust” means the REMIC (or other transferee pursuant to a Securitization, as to which interests are conveyed to one or more Investors) that holds the Loan.
Section 1.1.    Location of Additional Defined Terms.
Defined Term    Location
“Additional Equity Funds”    Section 5.14(b)
“Agreement”    First Paragraph
“Approved Annual Budget”    Section 5.5(a)(iii)
“Approved Capital Expenditures Budget”    Section 5.5(a)(iii)
“Assignee”    Section 10.2
“Assignment of Leases”    Schedule 2
“Borrower”    First Paragraph
“Cash Collateral Account”    Section 3.7(c)
“Cash Management Protocols”    Section 3.7(d)
“Casualty Retainage”    Section 7.8(b)
“Casualty”    Section 7.5(a)
“Closing Date”    First Paragraph
“Condemnation Proceeds”    Section 7.5(a)
“Contracts”    The Security Instrument
“Default Rate”    The Note
“Disbursement Certification”     Section 3.8(b)
“Environmental Lien”    Section 9.2
“Equipment”    The Security Instrument
“ERISA Affiliate”    Section 4.7
“Event of Default”    Section 8.1
“Guaranty of Recourse Obligations”    Schedule 2
“Holdback Reserve Funds”    Section 5.14(b)
“Improvements”    The Security Instrument
“Initial Maturity Date”    The Note
“Insolvency Action”    Section 8.1(h)
“Insurance Proceeds”    Section 7.5(a)
“Interest Rate”    The Note
“Interest Reserve Replenishment Funds”    Section 3.2(c)

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“Interest Reserve Replenishment Guaranty”    Schedule 2
“Inventory”    The Security Instrument
“Investor”    Section 10.1
“Land”    The Security Instrument
“Lender”    First Paragraph
“Liabilities”    Section 10.2
“Loan”    Recitals
“Loan Amount”    Recitals
“Material Alterations”    Section 5.2
“Material Lease”    Section 5.6(a)
“Net Restoration Proceeds”    Section 7.5(a)
“Net Worth and Liquidity Requirements”    Section 5.13
“Note”    Schedule 2
“Participant Register”    Section 10.6
“Permits”    The Security Instrument
“Permitted Indebtedness”     Exhibit E
“Permitted Transfer”    Section 6.1(a)
“Property”    The Security Instrument
“Register”    Section 10.5
“Registered Lender”    Section 10.5
“Registrar”    Section 10.5
“Rents”    The Security Instrument
“Reserve Account” and “Reserve Accounts”    Section 3.1(a)
“Restoration Proceeds Threshold”    Section 7.5(a)
“Restoration Proceeds”    Section 7.5(a)
“Restoration”    Section 7.6
“Restricted Account”    Section 3.7(c)
“Rothacker Guaranty of Recourse Obligations”    Schedule 2
“Securities”    Section 10.1
“Securitization”    Section 10.1
“Security Instrument”    Schedule 2
“Servicer”    Section 10.3
“Servicing Agreement”    Section 10.3
“Single-Purpose Entity”    Exhibit E
“SRT Guaranty of Recourse Obligations”    Schedule 2
“Successor Borrower”    Section 12.1(e)
 “Taking”    Section 7.5(a)
“Tax and Insurance Monthly Installment”    Section 3.3(d)
“Tax And Insurance Reserve Account”    Section 3.3(d)
“UCC”    The Security Instrument
Section 1.2.    Principles of Construction.  All references to sections and schedules are to sections and schedules in or to this Agreement unless otherwise specified.  All uses of the word “including” shall mean “including, without limitation” unless the context shall indicate otherwise.  Unless otherwise specified, the words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular 

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provision of this Agreement. Unless otherwise specified, all meanings attributed to defined terms herein shall be equally applicable to both the singular and plural forms of the terms so defined.
ARTICLE 2     
THE LOAN
Section 2.1.    The Loan.  
(a)    Initial Advance.  On the Closing Date, Borrower shall receive an initial advance of the Loan Amount in an amount equal to the Initial Advance. The remaining (unfunded) portion of the Loan Amount shall be made available to Borrower pursuant to the terms, provisions, covenants and conditions of Section 2.1(b) and/or Article 3, as applicable. No amounts borrowed under this Section 2.1(a) and and/or Article 3 and repaid may be re-borrowed. 
(b)    Mandatory Advance. On November 1, 2020, provided an Event of Default does not exist (unless waived by Lender, in its sole and absolute discretion), the then unfunded portion of the Hard Cost Reserve Funds and the Tenant Improvements/Leasing Commissions Reserve Funds shall be deposited in the Capital Expenditures Reserve Account and/or the Tenant Improvements/Leasing Commissions Reserve Account, as the case may be, and thereafter applied and disbursed toward the payment of Hard Cost Capital Expenditures and/or Approved Leasing Expenses, pursuant to and in accordance with the terms, provisions, covenants and conditions of Section 3.4(b) hereof and Section 3.5(b) hereof, as the case may be. All amounts so advanced under this Section 2.1(b) shall earn interest from and after the date so advanced and deposited into the applicable Reserve Account, and no amounts borrowed under this Section 2.1(b) and/or Article 3 and repaid may be re-borrowed.
(c)    Borrower’s obligation to pay the Indebtedness is evidenced by this Agreement and by the Note and secured by the Security Instrument and the other Loan Documents to the extent provided therein.
Section 2.2.    Interest Rate; Payments; Prepayment.
(a)    Interest Rate; Payments. The Indebtedness shall accrue interest at the rates and in the manner set forth in the Note.  Borrower shall make payments of principal and interest at the times and in the manner set forth in the Note. 
(b)    Prepayment. Borrower shall not be permitted at any time to prepay all or any part of the Loan except as expressly provided in the Note.
Section 2.3.    Extension Option. The Borrower may request that Lender extend the Initial Maturity Date pursuant to and in accordance with the terms, provisions covenants and conditions of (and in the manner set forth in) Section 2(c) of the Note.
Section 2.4.    Origination Fee; Exit Fee.
(a)    On the Closing Date, Borrower shall pay the Origination Fee to Lender.

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(b)    On the Maturity Date (or sooner repayment or acceleration of the Loan), Borrower shall pay the Exit Fee to Lender.
ARTICLE 3     
RESERVE ACCOUNTS;
RESTRICTED ACCOUNT; CASH COLLATERAL ACCOUNT

Section 3.1.    Reserve Accounts Generally.
(a)    Establishment. On the Closing Date, the Interest Reserve Funds, the Operating Expense Reserve Funds and the Soft Cost Reserve Funds shall be deposited with Lender into the Interest Reserve Account, the Operating Expense Reserve Account and the Capital Expenditures Reserve Account, as the case may be. On the date specified in Section 2.1(b) hereof, provided an Event of Default does not exist (unless waived by Lender, in its sole and absolute discretion), the then unfunded portion of the Hard Cost Reserve Funds and the Tenant Improvements/Leasing Commissions Reserve Funds shall be deposited in the Capital Expenditures Reserve Account and/or the Tenant Improvements/Leasing Commissions Reserve Account, as the case may be. Each of the reserve accounts referred to in this Article 3 (including the Tax And Insurance Reserve Account, the Replacement Costs Reserve Account and the Excess Cash Flow Account referred to below) is established with or for the benefit of Lender for the purpose of holding the funds deposited therein pursuant to the terms, provisions, covenants and conditions of this Agreement and is individually referred to herein as a “Reserve Account” and collectively as the “Reserve Accounts.” Each Reserve Account shall be a custodial account established by and with Lender and shall not constitute a trust fund.  At Lender’s option, funds deposited into a Reserve Account may be commingled with other money held by Lender or its servicer. Borrower acknowledges and agrees that funds in the Reserve Accounts are subject to the sole dominion, control and discretion of Lender, its authorized agents or designees, subject to the terms hereof and that the funds therein shall not earn interest.  Borrower shall not have the right to make any withdrawals from any Reserve Account except pursuant to and in accordance with the terms, provisions, covenants and conditions of this Agreement.
(b)    Disbursements of Reserve Account Funds. Any unfunded Reserve Funds and/or any Reserve Account Funds then on deposit in the Reserve Accounts shall be disbursed to Borrower for the respective purposes set forth in, and otherwise pursuant to and in accordance with the terms, provisions, covenants and conditions of, this Article 3.
(c)    Processing Fee. Lender shall be entitled to a processing fee not to exceed Five Hundred and 00/100 Dollars ($500.00) per request for each disbursement of Capital Expenditures Reserve Funds, which Lender may deduct from the Capital Expenditures Reserve Account at the time of the applicable disbursement. 
(d)    Application upon Event of Default.  Notwithstanding anything to the contrary contained herein, upon the occurrence and during the continuance of an Event of Default, (i) any amounts deposited into and/or remaining in any Reserve Account may be withdrawn by Lender and thereafter applied by Lender in any manner towards the Indebtedness (and/or the Operating 

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Expenses) as Lender may elect in Lender’s discretion, and (ii) Borrower shall thereafter have no further right in respect of the Reserve Accounts so utilized.
Section 3.2.    Interest Reserve Funds.
(a)    The Interest Reserve Funds shall be used for the payment, pursuant to Section 3.2(b) below, of the monthly installments of Interest due on a Payment Date.
(b)     On each Payment Date, the Interest Reserve Funds shall, if Borrower has furnished Lender with a Draw Request no less than five (5) Business Days prior to such Payment Date, be used by Lender to pay all or a portion of the monthly installment of Interest due on such Payment Date, provided that at such time the applicable Disbursement Conditions have been satisfied, and provided further, that if Borrower has not furnished Lender with a Draw Request, as aforesaid, the Interest Reserve Funds may, at Lender’s sole option, nonetheless still be used by Lender to pay all or a portion of the monthly installment of Interest due on such Payment Date. In addition, if there are no Interest Reserve Funds then available therefor, at Lender’s sole option, Lender may then make such disbursement from the then available Operating Expense Reserve Funds, if any.
(c)    If and when (from time-to-time and each time) the funds in the Interest Reserve Account fall below the Minimum Interest Reserve Account Amount: (i) Borrower shall replenish the funds in the Interest Reserve Account by promptly depositing with Lender an amount equal to the sum necessary to cause the funds in the Interest Reserve Account to equal Three Hundred Thousand and 00/100 Dollars ($300,000.00) (the “Interest Reserve Replenishment Funds”); and (ii) the Interest Reserve Funds shall not be made available to Borrower unless and until the Interest Reserve Replenishment Funds have been so deposited with Lender, as aforesaid.
Section 3.3.    Operating Expense Reserve Funds; Tax and Insurance Monthly Installment.
(a)    The Operating Expense Reserve Funds shall be used for the payment, pursuant to Section 3.3(b) below, of the Operating Expenses.
(b)    Within ten (10) Business Days after each Payment Date, the Operating Expense Reserve Funds shall, if Borrower has furnished Lender with a Draw Request no less than five (5) Business Days prior to such Payment Date, be used by Lender (subject to Section 3.3(c) below) to pay to Borrower all or a portion of the estimated Operating Expenses for the month following such Payment Date, provided that at such time the applicable Disbursement Conditions have been satisfied.
(c)    Borrower shall deliver to Lender, within thirty (30) days of the end of each quarter, a Reconciliation Statement for the prior quarter. After review of the Reconciliation Statement by Lender, Borrower shall, if requested by Lender, also deliver to Lender copies of the applicable invoices and bills for any such Operating Expenses for which disbursements have been made for the prior three (3) month period. In the event that the Reconciliation Statement shows that actual Operating Expenses incurred for the prior three (3) month period were less than the amount of the 

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Lender’s disbursement to Borrower of the Operating Expense Reserve Funds for such prior three (3) month period (i.e., the amount disbursed by Lender to Borrower for such prior three (3) month period was more than what was actually required), such excess shall be deducted from the amount to be disbursed from the Operating Expense Reserve Funds for the calendar month following such three (3) month period (and furthermore, in the event that the Reconciliation Statement also shows that Interest actually accrued on the Loan for the prior three (3) month period was more than the amount of the Lender’s disbursement of the Interest Reserve Funds for such prior three (3) month period (i.e., the amount disbursed by Lender for such prior to three (3) month period was less than what was actually required), either (1) such deficiency shall be deducted by Lender from the then available Interest Reserve Funds; or (2) if Interest Reserve Funds are not then available, Borrower shall pay the same on the next Payment Date).
(d)    On each Payment Date, one-twelfth (1/12th) of the annual amount of (A) Impositions, and (B) Premiums (collectively, the “Tax and Insurance Monthly Installment”) shall be deposited by Borrower into a custodial account established with Lender (the “Tax And Insurance Reserve Account”). The initial amount of the Tax and Insurance Monthly Installment as of the Closing Date is equal to Fifteen Thousand Three Hundred Ten and 61/100 Dollars ($15,310.61), and the initial amount of the total funds on deposit in the Tax and Insurance Reserve Account as of the Closing Date is equal to Forty Four Thousand Nine Hundred Ninety Nine and 36/100 Dollars ($44,999.36). Lender may re-calculate the foregoing initial amount of the Tax and Insurance Monthly Installment from time to time in order to assure that funds are reserved in sufficient amounts to enable the payment of Impositions and Premiums thirty (30) days prior to their respective due dates, and if such amounts for the then current Fiscal Year or payment period are not ascertainable by Lender at the time a Tax and Insurance Monthly Installment is required to be made, the amount of the Tax and Insurance Monthly Installment shall be Lender’s reasonable estimate based on one-twelfth (1/12th) of the aggregate Impositions and Premiums for the prior Fiscal Year or payment period, with adjustments reasonably determined by Lender. Provided an Event of Default does not then exist, Lender shall make payments of Impositions and Premiums out of the Tax and Insurance Reserve Account before the same shall be due and payable or otherwise delinquent to the extent that there are funds then available in the Tax and Insurance Reserve Account and Lender has received appropriate documentation from Borrower in order to establish the amount(s) due and the due date(s) for the payment of the same at least thirty (30) days prior to the respective due date(s).
(e)    Notwithstanding Section 3.3(d) above, the Tax and Insurance Monthly Installment due on each Payment Date shall, provided the Operating Income is insufficient for Borrower to pay the same, be paid out of the Operating Expense Reserve Funds (rather than by Borrower), but only to the extent such funds are available.
Section 3.4.    Capital Expenditures Reserve Funds.
(a)    The Soft Cost Reserve Funds shall be used for the payment of Soft Cost Capital Expenditures, and the Hard Cost Reserve Funds shall be used for the payment of Hard Cost Capital Expenditures, in each case pursuant to Section 3.4(b) below. 
(b)    Borrower shall be entitled to receive disbursements from Lender from time to time during the term of the Loan of the Soft Cost Reserve Funds to pay for Soft Cost Capital 

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Expenditures, and the Hard Cost Reserve Funds to pay for Hard Cost Capital Expenditures, provided that at such time the applicable Disbursement Conditions have been satisfied, and provided, further, that in each case, Borrower's Draw Request for such disbursement must be received by Lender at least ten (10) Business Days prior to the requested disbursement date for the payment thereof. 
(c)    In furtherance of the foregoing, it is the intention of Borrower and Lender that: (i) disbursements for Capital Expenditures shall be made either to Borrower as reimbursements for the prior payment of the same, or as a direct payment to the contractor or vendor performing the Capital Expenditures for which such disbursements are being made; (ii) neither the Capital Expenditures Reserve Funds (nor any funds in any other Reserve Account) shall be made available or otherwise disbursed hereunder for payment of any construction management or similar fees payable to the Manager under the Management Agreement; and (iii) Borrower shall submit no more than one (1) request for disbursement of Capital Expenditures Reserve Funds every thirty (30) calendar days (it being the intention of the parties that at no point shall such requests occur more than once during each calendar month).
(d)    Borrower shall complete any and all of the Capital Expenditures in a timely manner and free and clear of any mechanic’s liens, materialmen’s liens and equitable liens or any other Liens, and otherwise in accordance with applicable Legal Requirements. In connection therewith, if required by Lender at the time of any disbursement (but also on no less than a semi-annual basis until the Capital Expenditures contemplated by the Approved Capital Expenditures Budget have been completed), Lender shall have received, at the cost and expense of Borrower, a “date-down” endorsement to Lender’s title insurance policy showing no new exceptions (other than those approved by Lender) and reciting the increased policy coverage amount based upon the latest disbursement of the Capital Expenditures Reserve Funds.
Section 3.5.    Tenant Improvements/Leasing Commissions Reserve Funds.
(a)    The Tenant Improvements/Leasing Commissions Reserve Funds shall be used for the payment, pursuant to Section 3.5(b) below, of the Approved Leasing Expenses.
(b)    Borrower shall be entitled to receive disbursement of the Tenant Improvements/Leasing Commissions Reserve Funds from Lender from time to time during the term of the Loan to pay for Approved Leasing Expenses, provided that at such time the applicable Disbursement Conditions have been satisfied, and provided, further, that in each case, Borrower's Draw Request for such disbursement must be received by Lender at least ten (10) Business Days prior to the requested disbursement date for the payment of any such Approved Leasing Expenses. 
(c)    In furtherance of the foregoing, it is the intention of Borrower and Lender that: (i) disbursements for Approved Leasing Expenses shall be made either to Borrower for the prior or future payment of the same, or as a direct payment to the vendor or contractor performing the Tenant Improvements or otherwise entitled to payment of the Approved Leasing Expenses for which such disbursements are being made; (ii) neither the Tenant Improvements/Leasing Commissions Reserve Funds (nor any funds in any other Reserve Account) shall be made available or otherwise disbursed hereunder for payment of any construction management or similar fees payable to the Manager under the Management Agreement; and (iii) Borrower shall submit no more 

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than one (1) request for disbursement of Tenant Improvements/Leasing Commissions Reserve Funds every thirty (30) calendar days (it being the intention of the parties that at no point shall such requests occur more than once during each calendar month).
(d)    Borrower shall complete any and all of the Tenant Improvements in a timely manner and free and clear of any mechanic’s liens, materialmen’s liens and equitable liens or any other Liens, and otherwise in accordance with the applicable legal requirements. In connection therewith, if required by Lender at the time of any disbursement (but also on no less than a semi-annual basis until the Tenant Improvements have been completed), Lender shall have received, at the cost and expense of Borrower, a “date-down” endorsement to Lender’s title insurance policy showing no new exceptions (other than those approved by Lender) and reciting the increased policy coverage amount based upon the latest disbursement of the Tenant Improvements/Leasing Commissions Reserve Funds.
Section 3.6.    Replacement Costs Reserve Account.
(a)    Upon the occurrence of Stabilization Threshold, Borrower shall establish the Replacement Costs Reserve Account with Lender into which Borrower shall thereafter deposit the Replacement Costs Reserve Funds on a monthly basis, which Replacement Costs Reserve Funds shall be used for the payment, pursuant to Section 3.6(b) below, of future Replacement Costs at the Property.
(b)    Borrower shall be entitled to receive disbursement of the Replacement Costs Reserve Funds from Lender (which Lender agrees to disburse in accordance with this Agreement) from time to time during the term of the Loan to pay for Replacement Costs at the Property, provided that at such time the applicable Disbursement Conditions have been satisfied, and provided, further, that in each case, Borrower's Draw Request for such disbursement must be received by Lender at least ten (10) Business Days prior to the requested disbursement date for the payment of any such Replacement Costs. 
(c)    In furtherance of the foregoing, it is the intention of Borrower and Lender that Borrower shall submit no more than one (1) request for disbursement of funds from the Replacement Costs Reserve Account every thirty (30) calendar days (it being the intention of the parties that at no point shall such requests occur more than once during each calendar month). 
Section 3.7.    Deposit Account; Excess Cash Flow Account. 
(a)    On or before the Closing Date, Borrower shall establish the Deposit Account with the Account Bank pursuant to the Deposit Account Control Agreement, whereby Borrower agrees to cause the Operating Income to be paid to and deposited into the Deposit Account.
(b)    The Deposit Account shall be in the name of Borrower for the sole and exclusive benefit of Lender.  Borrower acknowledges and agrees that: (i) the Deposit Account is subject to the sole and absolute dominion, control and discretion of Lender; (ii) Borrower shall not have any right of withdrawal or control with respect to the Deposit Account or disbursements therefrom (except pursuant to and in accordance with the terms, provisions, covenants and conditions 

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of this Agreement and the Deposit Account Control Agreement); and (iii) any Rents or other Operating Income from the Property received by Borrower or Manager prior to deposit in the Deposit Account shall: (1) be deemed to be Property and shall be held in trust for the benefit, and as the property, of Lender, (2) not be commingled with any other funds or property of Borrower or Manager, and (3) be deposited in the Deposit Account within three (3) Business Days of receipt.
(c)    Borrower shall simultaneously with the establishment of the Deposit Account Control Agreement (and from time-to-time thereafter) send an irrevocable instruction letter signed by Borrower (and/or Manager, if any), in the form annexed as Exhibit F (a “Tenant Direction Letter”), to each tenant then or thereafter at the Property, simultaneously with the execution and delivery of the Lease for each tenant at the Property, the purpose of which Tenant Direction Letter is to instruct each tenant at the Property to send all Rents directly to the Deposit Account or, if paying by check, to the lockbox address specified in the Deposit Account Control Agreement. Without the prior written consent of Lender, neither Borrower nor Manager shall (i) terminate, amend, revoke or modify any Tenant Direction Letter in any manner whatsoever, or (ii) direct or cause any tenant to pay any amount in any manner other than as provided in the related Tenant Direction Letter.
(d)    On each day of each calendar month following the establishment of the Deposit Account, as aforesaid and until the occurrence of the Stabilization Threshold, the Account Bank shall (as long as no Event of Default shall have occurred and be continuing), from and to the extent of the Operating Income deposited in the Deposit Account, transfer all amounts then on deposit in the Deposit Account (in excess of the minimum balance) to an account designated by Borrower (the “Operating Account”) as set forth in the Deposit Account Control Agreement.  Borrower shall use such funds deposited by the Account Bank into the Operating Account, as aforesaid, to: (i) pay the Debt Service then due and payable; (ii) pay the Operating Expenses (including any Tax and Insurance Monthly Installment, as well as Replacement Costs, if applicable) then due and payable; (iii) on or before the twentieth (20th) day of each calendar month, remit the remaining Net Operating Income for the immediately preceding calendar month, if any,  to Lender by wire transfer of immediately available Federal funds, which shall be held by Lender in the Excess Cash Flow Account as additional collateral for the Indebtedness; and (iv) furnish Lender, if and as required by Lender, a quarterly reconciliation statement (the “Reconciliation Statement”), in form, scope and substance acceptable to Lender, acting reasonably, showing the Operating Income, the Operating Expenses, the Debt Service paid and the Replacement Costs deposited into the Replacement Costs Reserve Account, as well as the Net Operating Income, for such immediately preceding calendar quarter (the aforementioned obligations of Borrower as set forth in the immediately preceding sub-paragraphs (i), (ii), (iii) and (iv), inclusive, together with the obligations of Borrower regarding the Tenant Direction Letters as set forth in Section 3.7(c) hereof, collectively, the “Cash Management Protocols”).   
(e)    Upon the initial occurrence (or any subsequent occurrence following any reimplementation of the Cash Management Protocols pursuant to and in accordance with Section 3.7(f) hereof) of the Stabilization Threshold: (i) the Account Bank shall (as long as no Event of Default shall have occurred and is continuing), from and to the extent of the Operating Income deposited in the Deposit Account, transfer all amounts then on deposit in the Deposit Account (in excess of the minimum balance) to the Operating Account as set forth in the Deposit Account Control 

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Agreement; and (ii) Borrower shall use such funds deposited by the Account Bank into the Operating Account, as aforesaid, to: (A) pay the Debt Service then due and payable; and (B) pay the Operating Expenses (including any Replacement Costs, if applicable) then due and payable, provided, however, the Borrower shall no longer be required to remit the remaining Net Operating Income to the Excess Cash Flow Account pursuant to and in accordance with Section 3.7(d) hereof, and any and all funds in the Excess Cash Flow Account at such time shall (provided an Event of Default has not previously occurred, and provided, further, that each of the applicable Reserve Accounts shall have sufficient funds therein at such time (as determined by Lender) in order to pay the items and expenses for which each such Reserve Account has been established) be refunded to Borrower.
(f)    In furtherance of the foregoing provisions of Section 3.7(e) hereof, in the event that, at any time subsequent to the initial (or any subsequent) occurrence of the Stabilization Threshold, the Stabilization Threshold shall not be satisfied on the applicable date of measurement, the Cash Management Protocols shall be re-implemented and continue thereafter until the next occurrence of the Stabilization Threshold.
(g)    Upon the occurrence and during the continuance of an Event of Default (i) the Account Bank shall no longer transfer all amounts then on deposit in the Deposit Account (in excess of the minimum balance) to the Operating Account; (ii) any and all funds then or thereafter on deposit in the Deposit Account shall be disbursed by the Account Bank to a separate Lender-controlled Reserve Account in accordance with Lender’s instructions; and (iii) such funds may be thereafter applied by Lender to amounts owing in connection with the Loan and for the payment of Operating Expenses, in such order of priority as Lender shall determine in Lender’s sole and absolute discretion.
(h)    Borrower hereby grants to the Lender (and shall at all times maintain in favor of Lender) a continuing, perfected, first-priority Lien and security interest in and to the Deposit Account, the Excess Cash Flow Account, the separate Lender-controlled Reserve Account referred to in Section 3.7(g) hereof and any and all funds now or hereafter deposited therein at any time, the proceeds thereof and any interest and/or accruals thereon, to further secure the Indebtedness and all obligations now or hereafter owing by Borrower to Lender under the Loan Documents.
Section 3.8.    Minimum Disbursement Amount; Waiver of Minor Non-Compliance; Reallocations Among Reserves. 
(a)    Each disbursement request by Borrower of any of the Capital Expenditures Reserve Funds (except for the final disbursement thereof), shall, if required by Lender, be in amounts of not less than the Minimum Disbursement Amount. 
(b)    In connection with the funding of a particular Draw Request by Borrower from time-to-time of any of the of the Capital Expenditure Reserve Funds, Tenant Improvements/Leasing Commissions Reserve Funds and/or the Replacement Costs Reserve Funds: (i) Borrower shall submit, for Capital Expenditures, Tenant Improvements/Leasing Commissions Reserve Funds and/or Replacement Costs, a completed disbursement certification (the “Disbursement Certification”) in the form attached hereto as Exhibit G (which shall also include the normal and customary “Reserve Withdrawal Request Summary” and “Full Draw Package”), and (x) Lender shall disburse (unless 

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a manifest error exists) the amount requested in the Disbursement Certification, provided that: (1) the amount requested in the Disbursement Certification is also otherwise in accordance with terms, provisions, covenants and conditions of this Agreement; and (2) Lender has not advised Borrower in writing that a previously submitted Disbursement Certification was in error or incomplete; it being the intention of Borrower and Lender that in such case, Borrower shall first furnish Lender with such additional information as is reasonably necessary in order to correct such error or supply such missing information or materials before any further disbursements are made by Lender in connection with the submission by Borrower of any pending, new or additional Disbursement Certifications; (ii) Lender may, at Lender's option, waive non-compliance by Borrower with one or more of the terms, provisions, covenants and conditions in this Article 3 applicable thereto, or non-compliance of other non-monetary terms, provisions, covenants and conditions in this Agreement, in each case for a period of up to ninety (90) days; and (iii) the existence of a non-monetary Event of Default (including, but not limited to, the failure of Borrower or Guarantor to comply with any of the reporting requirements set forth in Section 5.5 hereof), beyond any applicable notice and cure periods and for which Lender has not previously furnished Borrower with written notice, shall not prohibit the funding of such Draw Request (it being the intention of the Parties that a Draw Request shall be funded in such case as long as all of the other applicable disbursement conditions with respect thereto have been satisfied).
(c)    If, at any time, Borrower shall request that the Reserve Funds for any category of cost or expense shown in the Approved Capital Expenditures Budget be reallocated to another category of cost or expense, Lender shall consider such request on a case-by-case basis for such reallocation in its sole, but reasonable discretion, provided, however, that under no circumstances shall Lender be obligated to consider such a request unless Borrower has first demonstrated to Lender’s satisfaction, in Lender’s sole, but reasonable discretion, that the Loan continues to remain In Balance (as defined below) following any such reallocation; and provided, further, that neither the Interest Reserve Funds nor the Operating Expense Reserve Funds categories are reduced (unless Lender agrees to such reduction, acting reasonably under the circumstances at such time). For purposes hereof, the term “In Balance” means that the total of the available funds (as determined by Lender, in its sole, but reasonable discretion) for the Capital Expenditures and/or the Approved Leasing Expenses equals or exceeds the costs therefor, as set forth on the Approved Capital Expenditures Budget and/or the Approved Annual Budget, as the case may be, including any contingency reserves shown thereon.  
(d)    In connection with the funding of a particular Draw Request by Borrower from time-to-time of any of the Reserve Funds, Lender may, at Lender's option, make such disbursement directly to either the particular vendor/contractor or to Borrower (with proof of payment to thereafter be submitted to Lender prior to the funding of the next subsequent Draw Request to Borrower).
(e)    For avoidance of doubt with respect to certain disbursements to be made hereunder, Borrower acknowledges and agrees that disbursements of Interest Reserve Funds (and other escrow amounts) are based on the actual amounts due and payable, and that disbursements of Operating Expense Reserve Funds are based on the Approved Annual Budget, in each case subject to a periodic reconciliation and adjustment as set forth further in this Agreement.

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Section 3.9.    Interest on Reserve Accounts; Use of Remaining Reserve Funds; Refund of Remaining Funds.  
(a)    Borrower shall not be entitled to any earnings or interest on funds deposited into the Reserve Accounts (nor shall any of the Remaining Reserve Funds or any funds in any of the Reserve Accounts be made available or disbursed to Borrower under any circumstances for any legal expenses incurred in connection with the closing of the Loan). 
(b)    At such time as the Capital Expenditures contemplated by the Approved Capital Expenditures Budget have been completed, or if subsequent to the occurrence of the Stabilization Threshold, the Reserve Account Funds then remaining in the Reserve Accounts will no longer need to be utilized by Borrower for their intended purposes, upon the prior written request of Borrower, Lender shall, in either case in response to Borrower’s request, either (i) apply such Reserve Account Funds towards the reduction of the Principal Indebtedness; or (ii) disburse such Reserve Account Funds to Borrower.
(c)    Upon full repayment of the Indebtedness, Lender shall also promptly thereafter refund to Borrower the Reserve Account Funds (if any) remaining in the Reserve Accounts.
Section 3.10.    Sole Dominion and Control.  Borrower acknowledges and agrees that the Reserve Accounts are subject to the sole dominion, control and discretion of Lender, its authorized agents or designees, subject to the terms hereof, and, except as set forth otherwise in the Loan Documents, Borrower shall have no right of withdrawal or distributions with respect to the funds in any of the Reserve Accounts.
Section 3.11.    Security Interest.  Borrower hereby grants to Lender a first priority security interest in each of the Reserve Accounts and the funds deposited therein as additional security for the Indebtedness.
Section 3.12.    Rights on Default.  Notwithstanding anything to the contrary in this Article 3, upon the occurrence of an Event of Default, and for so long as such Event of Default continues: (a) Lender shall have the right to liquidate and transfer any amounts then invested in any of the Reserve Accounts (and utilize any ACH form or forms provided by Borrower to Lender in connection therewith and also apply any and all such amounts towards the payment of the Indebtedness in such order and priority as Lender shall determine, in its sole discretion), or reinvest such amounts in other investments as Lender may reasonably determine is necessary to perfect or protect any security interest granted or purported to be granted hereby or pursuant to the other Loan Documents or to enable Lender to exercise and enforce Lender’s rights and remedies hereunder or under any other Loan Document with respect to any of the Reserve Accounts or any funds deposited therein, and (b) Lender shall have all rights and remedies with respect to the Reserve Accounts, and the funds on deposit therein, as described in this Agreement and in the Security Instrument, in addition to all of the rights and remedies available to a secured party under the UCC, and, notwithstanding anything to the contrary contained in this Agreement or in the Security Instrument, Lender may apply the amounts in any or all of such Reserve Accounts,  as Lender determines in its sole discretion including, but not limited to, payment of the Indebtedness.

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Section 3.13.    Financing Statement; Further Assurances.  Borrower hereby authorizes Lender to file, and upon Lender’s request shall execute and deliver to Lender for filing a financing statement or statements under the UCC in connection with any of the Reserve Accounts, and the funds on deposit with respect thereto in the form required to properly perfect Lender’s security interest therein, if and to the extent that under applicable law a security interest in any and all of such Reserve Accounts, and any and all such funds on deposit therein, may be properly perfected by the filing of one or more financing statements.  Borrower agrees that at any time and from time to time, at the expense of Borrower, Borrower will promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary or desirable, or that Lender may request, in order to perfect and protect any security interest granted or purported to be granted hereby, if and to the extent that under applicable law a security interest in any and all of such Reserve Accounts, and any such funds on deposit therein, may be properly perfected by the filing of one or more financing statements, or to enable Lender to exercise and enforce its rights and remedies hereunder with respect to any and all of the Reserve Accounts, or any funds on deposit therein.
Section 3.14.    Borrower’s Obligation Not Affected.  The insufficiency of funds on deposit in the Reserve Accounts shall not absolve Borrower of the obligation to make any payments, as and when due pursuant to this Agreement and the other Loan Documents, and such obligations shall be separate and independent, and not conditioned on any event or circumstance whatsoever.
Section 3.15.    Property Inspections; Draw Requests. 
(a)    Lender shall also have the right to inspect the Property up to two (2) times each Fiscal Year, at reasonable times and upon reasonable prior notice to Borrower, in order to, among other things, evaluate the condition of the Property and the progress of any construction or other tenant improvement work being performed at the Property pursuant to and in accordance with the Approved Capital Expenditures Budget, the Approved Annual Budget or otherwise (and Borrower will pay all of Lender's actual, out-of-pocket costs, fees and expenses associated with such inspections, which may include fees and costs of an independent, third-party inspector).
(b)    For avoidance of doubt with respect the submission of a Draw Request or other requests for the disbursement of Reserve Funds, Borrower acknowledges and agrees that: (i) each such request shall also include a certificate (along with a summary page), email or letter, in form, scope and substance acceptable to Lender, from the Borrower specifically outlining, among other things, the amount(s) requested; (ii) site inspections for such requests (for the disbursement of Reserve Funds other than Interest Reserve Funds) shall occur for all disbursements of One Hundred Thousand and 00/100 Dollars ($100,000.00) or more, but in all cases not less frequently than for every other such request (regardless of the amount of the disbursements); and (iii) the submission of invoices with such requests (for the disbursement of Reserve Funds other than Interest Reserve Funds) are not required for amounts of less than Ten Thousand and 00/100 Dollars ($10,000.00). 
Section 3.16.    Interest Rate Protection Agreement.  
(a)    Borrower shall enter into the Interest Rate Protection Agreement on or before the Closing Date, covering the period from the Closing Date through and including Initial Maturity 

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Date. Borrower shall also collaterally assign to Lender all of Borrower’s right, title and interest in any and all payments under the Interest Rate Protection Agreement and shall deliver to Lender an executed counterpart of the same and obtain the consent of the counterparty thereto (as evidenced by such counterparty’s execution of a separate acknowledgment), all on forms acceptable to Lender.
(b)    Upon the occurrence and during the continuance of an Event of Default, Counterparty shall make all payments under the Interest Rate Protection Agreement to such address as Lender shall at such time notify Counterparty, to be applied by Lender towards the Indebtedness, in such order of priority as Lender shall determine.
ARTICLE 4     
REPRESENTATIONS AND WARRANTIES
Borrower represents, warrants and covenants to Lender as of the Closing Date as follows:
Section 4.1.    Organization.  Borrower (a) is duly organized and validly existing in good standing under the laws of the State of its formation, (b) is duly qualified to do business in each jurisdiction in which the nature of its business or any of the Property makes such qualification necessary, (c) has the requisite power and authority to carry on its business as now being conducted, and (d) has the requisite power to execute and deliver, and perform its obligations under, the Loan Documents.  
Section 4.2.    Authorization.  The execution and delivery by Borrower of the Loan Documents, Borrower’s performance of its obligations thereunder and the creation of the Liens provided for in the Loan Documents (a) have been duly authorized by all requisite action on the part of Borrower, (b) will not violate any provision of any applicable Legal Requirements, and (c) will not be in conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under, or result in the creation or imposition of any Lien of any nature whatsoever upon any of the property or assets of Borrower pursuant to, any indenture or agreement or instrument.  Except for those obtained or filed on or prior to the Closing Date, Borrower is not required to obtain any consent, approval or authorization from, or to file any declaration or statement with, any Governmental Authority in connection with or as a condition to the execution, delivery or performance of the Loan Documents.  The Loan Documents to which Borrower is a party have been duly executed and delivered by such parties.
Section 4.3.    Enforceability.  The Loan Documents executed by Borrower and Guarantor in connection with the Loan are the legal, valid and binding obligations of Borrower and Guarantor, as the case may be, enforceable against Borrower and Guarantor, as the case may be, in accordance with their terms, subject only to bankruptcy, insolvency and other limitations on creditors’ rights generally and to equitable principles.  Such Loan Documents are, as of the Closing Date, not subject to any right of rescission, set-off, counterclaim or defense by Borrower and/or Guarantor, as the case may be, including the defense of usury.
Section 4.4.    Litigation.  There are no actions, suits or proceedings at law or in equity by or before any Governmental Authority now pending and served or, to Borrower’s knowledge, 

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threatened, involving or concerning Borrower, Guarantor, or the Property, which would have a Material Adverse Effect on the Loan if adjudicated adversely to such party.
Section 4.5.    Full and Accurate Disclosure.  No statement of fact made by or on behalf of Borrower in the Loan Documents or in any other document or certificate delivered to Lender by Borrower contains any untrue statement of a material fact or omits to state any material fact necessary to make statements contained herein or therein not misleading.  There is no event or circumstance, either individually or in the aggregate, that has had or could reasonably be expected to have a Material Adverse Effect. Except as otherwise disclosed in writing to Lender, there has been no material adverse change in the financial position of Borrower or the Property, or in the results of operations of Borrower.  Borrower has not incurred any obligation or liability, contingent or otherwise, not reflected in such financial data which might materially adversely affect its business operations or the Property.
Section 4.6.    Compliance.  To Borrower’s knowledge, Borrower, the Property and Borrower’s use thereof and operations thereat comply in all material respects with all applicable Legal Requirements (other than final construction-related permits). Borrower has obtained (in its own name) all Permits necessary to use and operate the Property, and all such Permits are in full force and effect.
Section 4.7.    ERISA.  Neither Borrower nor any ERISA Affiliate (as defined below) maintains, contributes to, has any obligation to contribute to, or has any direct or indirect liability with respect to any “employee benefit plan,” “multiemployer plan,” or any other “plan” (each as defined in ERISA).  Borrower is not an “employee benefit plan,” as defined in Section 3(3) of ERISA, subject to Title I of ERISA, a “plan,” as defined in Section 4975(e)(1) of the Code, subject to Code Section 4975, or a “governmental plan” within the meaning of Section 3(32) of ERISA.  None of the assets of Borrower constitutes “plan assets” of one or more of any such plans under 29 C.F.R. Section 2510.3-101 or otherwise.  Transactions by or with Borrower do not violate state statutes regulating investment of, and fiduciary obligations with respect to, governmental plans and such state statutes do not in any manner affect the ability of the Borrower to perform its obligations under the Loan Documents or the ability of Lender to enforce any and all of its rights under the Loan Agreement.  If an investor or direct or indirect equity owner in Borrower is a plan that is not subject to Title I of ERISA or Section 4975 of the Code, but is subject to the provisions of any federal, state, local, non-U.S. or other laws or regulations that are similar to those portions of ERISA or the Code, the assets of the Borrower do not constitute the assets of such plan under such other laws.  “ERISA Affiliate” means any corporation or trade or business that is a member of any group of organizations (a) described in Section 414(b) or (c) of the Code, of which Borrower is a member, and (b) solely for purposes of potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of the Code and the lien created under Section 302(f) of ERISA and Section 412(n) of the Code, described in Section 414(m) or (o) of the Code, of which Borrower is a member.  Borrower shall take or refrain from taking, as the case may be, such actions as may be necessary to cause the representations and warranties in this Section 4.7 to remain true and accurate throughout the term of the Loan.

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Section 4.8.    Not Foreign Person.  Borrower is not a “foreign person” within the meaning of § 1445(f)(3) of the Code.
Section 4.9.    Investment Company Act; Public Utility Holding Company Act.  Borrower is not (a) an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended, (b) a “holding company” or a “subsidiary company” of a “holding company” or an “affiliate” of either a “holding company” or a “subsidiary company” within the meaning of the Public Utility Holding Company Act of 1935, as amended, or (c) subject to any other federal or state law or regulation which purports to restrict or regulate its ability to borrow money.
Section 4.10.    Title to the Property; Liens.  Borrower owns good, indefeasible, marketable and insurable title to the Property, free and clear of all Liens, other than the Permitted Encumbrances. The Permitted Encumbrances do not and will not materially and adversely affect (a) the ability of Borrower to pay in full all sums due under the Note or any of its other obligations under the Loan Documents in a timely manner, or (b) the use of the Property for the use currently being made thereof, the operation of the Property as currently being operated or the value of the Property.  The Security Instrument creates a valid and enforceable first Lien on the Property and a valid and enforceable first priority security interest in the personal property constituting part of the Property, subject to no Liens other than the Permitted Encumbrances.  The Assignment of Leases creates a valid and enforceable first Lien on and a valid and enforceable first priority security interest in all of Borrower’s interest in all Leases, subject to no Liens other than the Permitted Encumbrances.
Section 4.11.    Condemnation.  No Taking has been commenced or, to Borrower’s knowledge, is contemplated with respect to all or any portion of the Property or for the relocation of roadways providing access to the Property.
Section 4.12.    Utilities and Public Access.  The Property has adequate rights of access to public ways and is served by all utilities required for the current use thereof.
Section 4.13.    Separate Lots.  The Property is comprised of one or more parcels, which constitute a separate tax lot and none of which constitutes a portion of any other tax lot outside the Property.
Section 4.14.    Assessments; Use Fees.  Except as disclosed in the Lender’s title insurance policy (or in the title commitment provided to Lender and forming the basis thereof), there are no pending or, to the knowledge of Borrower, proposed special assessments, use fees or any other special or other assessments for public improvements or otherwise affecting the Property, nor, to the knowledge of Borrower, are there any contemplated improvements to the Property that may result in any such special assessments, use fees or any other special or other assessments (other than the Capital Expenditures and Approved Leasing Expenses).
Section 4.15.    Flood Zone  The Property is not located in a flood hazard area as designated by the Federal Emergency Management Agency.

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Section 4.16.    Physical Condition.  Except as disclosed in the engineering report(s) delivered to Lender in connection with the Loan, to Borrower’s knowledge, the Property is free of material structural defects and all building systems contained therein are in good working order in all material respects (or will be in good working order upon completion of the Capital Expenditures) subject to ordinary wear and tear.
Section 4.17.    Title Insurance.  To Borrower’s knowledge, the Property is covered by an American Land Title Association mortgagee’s title insurance policy insuring a valid first lien on the Property, which (a) is in full force and effect, (b) is freely assignable to and will inure to the benefit of Lender and any successor or assignee of Lender, (c) has been paid in full, (d) is issued by a title company licensed in the State where the Property is located, (e) has had no claims made against it, (f) except for the Permitted Encumbrances, contains no exclusions for (i) access or (ii) survey, and (g) lists only the Permitted Encumbrances as exceptions.
Section 4.18.    Leases and Rents.  (a) Borrower is the sole owner of the entire lessor’s interest in the Leases, and neither the Leases nor any Rents have been Transferred by Borrower except to Lender pursuant to the Loan Documents (except in connection with prior loans that have been repaid); (b) no Person has any possessory interest in, or right to occupy, the Property except pursuant to Leases and Permitted Encumbrances, and (c) there are no pending contracts of sale in place with respect to a sale of all or any portion of the Property, (d) Leases entered into by Borrower subsequent to the Closing Date will either comply with the Leasing Guidelines or have been otherwise approved by Lender as required under the Loan Documents, and (e) the rent roll for the Property annexed hereto as Schedule 5 is, as of the Closing Date, true, accurate and correct in all material respects.
Section 4.19.    Compliance with Anti-Terrorism, Embargo, Sanctions and Anti-Money Laundering Laws.  Borrower, the Rothacker Guarantor, and to the best of Borrower’s knowledge, after having made reasonable inquiry, the SRT Guarantor and each Person owning a direct or indirect interest in Borrower and the SRT Guarantor: (a) is not currently identified on the list of specially designated nationals and blocked persons subject to financial sanctions that is maintained by the U.S. Treasury Department, Office of Foreign Assets Control (currently is accessible through the internet website at www.treas.gov/ofac/t11sdn.pdf.) or any other similar list maintained by the U.S. Treasury Department, Office of Foreign Assets Control pursuant to any Legal Requirements (or if such list does not exist, the similar list then being maintained by the United States), including trade embargo, economic sanctions, or other prohibitions imposed by Executive Order of the President of the United States; (b) is not a Person subject to any trade restriction, trade embargo, economic sanction, or other prohibition under federal law, including the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701 et seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any executive orders or regulations promulgated thereunder; and (c) is not in violation of Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, and relating to Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism and the Uniting and Strengthening America by Providing Appropriate Tools Required in Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56), with the result that (A) the investment in Borrower or Guarantor, as applicable (whether directly or indirectly), is prohibited by law, or (B) the Loan is in violation of law.

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Section 4.20.    Organizational Chart.  The organizational chart annexed hereto as Exhibit H identifies subsidiaries and equity interests of Borrower and is true, complete and correct in all material respects on and as of the date hereof. The Rothacker Guarantor owns not less than a fifty percent (50%) direct or indirect profits interest in, and has management control of the day to day operations of Borrower and the Property, the SRT Guarantor owns not less than a 97.9% direct or indirect ownership interest in the Borrower, and no Person other than those Persons shown on Exhibit H has any ownership interest in, or right of control, directly or indirectly, in Borrower.
Section 4.21.    Property.  The Property is comprised of approximately 11,803 rentable square feet retail shopping center located at 3032 Wilshire Boulevard in Santa Monica, California.
Section 4.22.    Intentionally Deleted.
Section 4.23.    Insurance.  Borrower has obtained and has delivered to Lender certificates evidencing all insurance policies described in Article 7, which certificates reflect the insurance coverages, amounts and other requirements set forth in this Agreement. No insurance claims have been made that are currently pending, outstanding or otherwise remain unsatisfied under any such insurance policies and would have a Material Adverse Effect with respect to the Property.  No Person, including Borrower, has done, by act or omission, anything which would impair the coverage of any of the insurance policies.
Section 4.24.    Federal Reserve Regulations.  No part of the proceeds of the Loan will be used for the purpose of purchasing or acquiring any “margin stock” within the meaning of Regulation U of the Board of Governors of the Federal Reserve System or for any other purpose which would be inconsistent with such Regulation U or any other Regulations of such Board of Governors, or for any purposes prohibited by Legal Requirements or by the terms and conditions of this Agreement or the other Loan Documents.
Section 4.25.    Taxes.  Borrower has filed all federal, state, county, municipal, and city income and other tax returns required to have been filed by it and has paid all taxes and related liabilities which have become due pursuant to such returns or pursuant to any assessments received by it. Borrower does not have knowledge of any basis for any material additional assessment in respect of any such taxes and related liabilities for prior years.
Section 4.26.    Employer Identification Number.  The Borrower’s United States employer identification number is 81-1586820.
Section 4.27.    Solvency.  Borrower (a) has not entered into the transaction or executed the Note, this Agreement or any other Loan Documents with the actual intent to hinder, delay or defraud any creditor and (b) has received reasonably equivalent value in exchange for its obligations under the Loan Documents.  In Borrower’s opinion, after giving effect to the Loan, the fair saleable value of Borrower’s assets exceeds and will, immediately following the making of the Loan, exceed Borrower’s total liabilities, including, without limitation, subordinated, unliquidated, disputed and contingent liabilities.  In Borrower’s opinion Borrower’s assets do not and, immediately following the making of the Loan will not, constitute an insufficient amount of capital to carry out its business as conducted or as proposed to be conducted.  Borrower does not intend to incur debt and liabilities 

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(including contingent liabilities and other commitments) beyond its ability to pay such debt and liabilities as they mature (taking into account the timing and amounts of cash to be received by Borrower and the amounts to be payable on or in respect of obligations of Borrower).  Except as expressly disclosed to Lender in writing, no petition under the Bankruptcy Code or similar state bankruptcy or insolvency law has been filed against Borrower, Guarantor, or any of the members of Borrower (or against Strategic Realty Operating Partnership, LP, a Delaware limited partnership), if any, in the last seven (7) years, and neither Borrower, the Rothacker Guarantor, nor the SRT Guarantor in the last seven (7) years has ever made an assignment for the benefit of creditors or taken advantage of any insolvency act for the benefit of debtors.  Neither Borrower, the Rothacker Guarantor, nor the SRT Guarantor is contemplating either the filing of a petition by it under the Bankruptcy Code or similar state bankruptcy or insolvency law or the liquidation of all or a major portion of Borrower’s assets or property, and Borrower has no knowledge of any Person contemplating the filing of any such petition against Borrower, the Rothacker Guarantor, or the SRT Guarantor.
Section 4.28.    Business Purposes.  The Loan is solely for the business purpose of Borrower, and is not for personal, family, household, or agricultural purposes.
Section 4.29.    Forfeiture.  Neither Borrower nor any Affiliate of Borrower in occupancy of or involved with the operation or use of the Property has committed any act or omission affording the federal government or any State or local government the right of forfeiture as against the Property or any material part thereof or any monies paid in performance of Borrower’s obligations under the Note, this Agreement or the other Loan Documents.  Borrower hereby covenants and agrees not to commit, permit or suffer to exist any act or omission affording such right of forfeiture.
Section 4.30.    No Defaults.  Borrower is not in default under this Agreement or any of the other Loan Documents.
Section 4.31.    Survival of Representations.  Borrower agrees that all of the representations and warranties of Borrower set forth in Article 4 and elsewhere in this Agreement and in the other Loan Documents shall survive for so long as any amount remains owing to Lender under this Agreement or any of the other Loan Documents by Borrower.  All representations, warranties, covenants and agreements made in this Agreement or in the other Loan Documents by Borrower shall be deemed to have been relied upon by Lender notwithstanding any investigation heretofore or hereafter made by Lender or on its behalf.
ARTICLE 5     
COVENANTS
Borrower covenants and agrees that, from the Closing Date and until payment in full of the Indebtedness:

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Section 5.1.    Compliance with Legal Requirements; Impositions and Other Claims; Contests.
(a)    Borrower shall do or cause to be done all things necessary to preserve, renew and keep in full force and effect its existence, rights, licenses, Permits and franchises necessary for the conduct of its business and shall comply in all respects with all applicable Legal Requirements, Contracts, Permits, and private covenants, conditions and restrictions that at any time apply to Borrower or the Property.  Borrower shall notify Lender promptly of any written notice or order that Borrower receives from any Governmental Authority relating to Borrower’s failure to comply with such applicable Legal Requirements.
(b)    Except to the extent that Lender is obligated to pay Impositions and Premiums from the Tax And Insurance Reserve Account pursuant to the terms of Section 3.3(d) hereof, Borrower shall pay all Impositions and Premiums with respect to itself and the Property in accordance with the terms hereof.  Borrower may, at its expense, after prior notice to Lender, contest by appropriate proceedings conducted in good faith and with due diligence, the validity or application of any Legal Requirements, Imposition, or any claims of mechanics, materialmen, suppliers or vendors, and may withhold payment of the same pending such proceedings if permitted by law, as long as (i) in the case of any Impositions or claims of mechanics, materialmen, suppliers or vendors, such proceedings shall suspend the collection thereof from the Property and  neither the Property nor any part thereof or interest therein will be sold, forfeited or lost if Borrower pays the amount or satisfies the condition being contested, and Borrower would have the opportunity to do so, in the event of Borrower’s failure to prevail in such contest, (ii) Lender would not, by virtue of such permitted contest, be exposed to any risk of civil or criminal liability, (iii)  neither the Property nor any part thereof or any interest therein would be subject to the imposition of any Lien for which Borrower has not furnished additional security as provided in clause (iv) below, as a result of the failure to comply with any Legal Requirement of such proceeding which would not be released if Borrower pays the amount or satisfies the condition being contested, and Borrower would have the opportunity to do so, in the event of Borrower’s failure to prevail in the contest, and (iv) Borrower shall have furnished to Lender reasonable additional security (or other assurances reasonably acceptable to Lender) in respect of the claim being contested or the loss or damage that may result from Borrower’s failure to prevail in such contest in such amount as may be requested by Lender, but in no event  less than 125% of the amount of such claim.
Section 5.2.    Maintenance; Waste; Alterations.  Borrower shall at all times keep the Property in good repair, working order and condition, except for reasonable wear and use.  Borrower shall not permit the Improvements, Equipment or Inventory to be removed or demolished (provided, however, that Borrower may remove, demolish or alter worn out or obsolete Improvements, Equipment and Inventory that are promptly replaced with Improvements, Equipment or Inventory, as applicable, of equivalent value and functionality, unless Borrower reasonably determines that such replacement is not necessary for the operation of the Property and would not have a Material Adverse Effect).  In addition, Borrower may not, without Lender’s approval, perform alterations to the Improvements and Equipment which (a) exceed $100,000 per each separate alteration (not including (i) alterations performed in connection with a Restoration, and (ii) work performed pursuant to Section 5.6), or (b) are not in the ordinary course of Borrower’s business (such alterations, 

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“Material Alterations”).  Borrower shall not perform any Material Alteration (other than the Material Alterations contemplated by the Approved Capital Expenditures Budget) unless approved in writing by Lender in Lender’s reasonable discretion.  Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender, including the fees charged by any professional engaged by Lender in connection with any such Material Alteration.
Section 5.3.    Access to Property and Records.  Borrower shall permit agents, representatives and employees of Lender (at Lender’s cost and expense if no Event of Default has occurred), to inspect (a) the Property or any part thereof, and (b) such books, records and accounts of Borrower and to make such copies or extracts thereof as Lender shall desire, in each case at such reasonable times as may be requested by Lender upon reasonable advance notice, subject to the rights of tenants under Leases.
Section 5.4.    Management of Property.  
(a)    Following substantial completion of the Capital Expenditures, the Property will be managed at all times by the Manager pursuant to the Management Agreement unless terminated as provided in the Loan Documents.  Borrower shall diligently perform all terms and covenants of the Management Agreement.  Borrower shall not (i) surrender, terminate, cancel, or materially modify the Management Agreement, (ii) enter into any other agreement relating to the management or operation of the Property with Manager or any other Person, (iii) consent to the assignment by Manager of its interest under the Management Agreement, or (iv) waive or release any of its material rights and remedies under the Management Agreement, in each case, without the consent of Lender, which consent shall not be unreasonably withheld or delayed.  If at any time Lender consents to the appointment of a new manager, such new manager and Borrower shall, as a condition to Lender’s consent, execute a subordination of management agreement in form and substance reasonably satisfactory to Lender.
(b)    Notwithstanding the foregoing, Borrower shall have the right to enter into an agreement subsequent to the Closing Date relating to the management or operation of the Property with the SRT Guarantor, or with a wholly-owned Affiliate of the SRT Guarantor that is also operated by the SRT Guarantor (or any entity or related party acting as an external advisor to the SRT Guarantor), as the replacement manager of the Property (i.e., the SRT Guarantor or such wholly-owned and operated Affiliate of the SRT Guarantor (or any entity or related party acting as an external advisor to the SRT Guarantor) is pre-approved by Lender as a replacement Manager of the Property).
Section 5.5.    Financial and Other Reporting.
(a)    Delivery of Financial Statements.  Borrower shall keep adequate books and records of account with respect to its financial condition and the operation of the Property using the Approved Accounting Method, and shall furnish the following to Lender within the time periods specified (unless any of such items are waived or any of such time periods are extended by Lender), each prepared in such detail as reasonably required by Lender and certified by a Responsible Officer to be true, complete and correct in all material respects:

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(i)    as soon as available, but in any event within thirty (30) days after the end of each calendar quarter, (A) a rent roll for the Property (but only if the Property is occupied); (B) intentionally deleted; (C) a pre-leasing and leasing status report for the Property (in the event that such reports are being provided by a party other than the Borrower, then no Responsible Officer shall be required to certify as to the truth, completeness, correctness or accuracy of such reports), (D) a Reconciliation Statement for the Property detailing, among other things, the Operating Income received, the Operating Expenses incurred and the Interest paid, as of the end of such calendar quarter, as compared to the Approved Annual Budget, (E) a Borrower Compliance Certificate; and (F) an SRT Guarantor Compliance Certificate;
(ii)    as soon as available, but in any event within ninety (90) days after the close of each Fiscal Year, (A) an annual operating statement for the Property presented on an annual and/or twelve (12) month basis consistent with the monthly operating statements described above, certified by Borrower to be complete and accurate in all material respects; (B) an annual balance sheet and profit and loss statement for Borrower, certified by Borrower to be complete and accurate in all material respects; and (C) a statement of change of financial position of Borrower, setting forth in comparative form the figures for the previous Fiscal Year;
(iii)    on or before the Closing Date, and thereafter as soon as available, but in any event at least thirty (30) days prior to the close of each Fiscal Year, an annual operating budget, capital expenditures budget and forecast for the Property for the up-coming Fiscal Year presented on a monthly basis (consistent with the information required in the monthly operating statements described above and which shall also contain detailed information for the anticipated Operating Expenses and Capital Expenditures for such up-coming Fiscal Year), which budgets shall be subject to Lender’s prior written approval, which approval shall not be unreasonably withheld, conditioned or delayed (the annual operating budget, including revisions thereto, once each so approved by Lender, as aforesaid, the “Approved Annual Budget,” and the capital expenditures budget, including periodic revisions that may be made thereto, once so approved by Lender, as aforesaid, the “Approved Capital Expenditures Budget”). The Approved Annual Budget for 2019 (showing anticipated Operating Expenses for the Property) is attached hereto as Schedule 3 and the Approved Capital Expenditures Budget (showing anticipated Capital Expenditures as of the Closing Date for the Property) is attached hereto as Schedule 4;
(iv)    such other financial information regarding Borrower or the Property or property management or leasing information (including, without limitation, copies of Borrowers’ state and federal tax returns, information on tenants under Leases to the extent such information is available to Borrower, and an accounting of security deposits) as may reasonably be required by Lender from time to time.
(b)    Lender Examination Rights.  Lender and its agents have the right, upon prior written notice to Borrower (notice to be given unless an Event of Default exists) and at reasonable times, to examine the records, books and other papers which reflect upon Borrower’s financial condition or pertain to the income, expense and management of the Property and to make copies and abstracts from such materials.
(c)    Financial Reports from Guarantor.  

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(i)    Borrower shall cause the Rothacker Guarantor to provide the following to Lender within the time periods specified (unless any of such items are waived or any of such time periods are extended by Lender): (x) an annual personal balance sheet to be delivered within ninety (90) days after the end of each annual period during each calendar year or such party’s fiscal year, as applicable; (y) copies of state and Federal income tax returns for each Fiscal Year of the Rothacker Guarantor to be delivered as soon as available, but in any event on or before the later of:  (1) July 15th of each Fiscal Year, or (2) within ninety (90) days of any extended period of time for the filing of the same, provided a copy of such extension is furnished to Lender on or before July 15th; and (z) such additional financial information supporting the Rothacker Guarantor’s net worth and liquidity in accordance with Section 5.13 hereof; a detailed REO schedule, and (C) a list of contingent liabilities as of the date of the annual personal balance sheet. Each financial report provided by the Rothacker Guarantor shall be certified by such Rothacker Guarantor to be complete and accurate in all material respects.
(ii)    Borrower shall also cause the SRT Guarantor to provide the following to Lender within the time periods specified (unless any of such items are waived or any of such time periods are extended by Lender): (i) an annual “10-K” financial statement to be delivered within ninety (90) days after the end of each annual period during each calendar year or such party’s fiscal year, as applicable; provided, however, that Lender may also request delivery of a “10-Q” on a semi-annual basis, and provided, further, that if there have been no material adverse changes in the financial condition of the SRT Guarantor, the SRT Guarantor may furnish on a semi-annual basis a “certificate of no change” instead of the foregoing 10-K financial statement required to be so furnished by the SRT Guarantor; (y) intentionally deleted; and (z) such additional financial information as Lender may reasonably require from time to time (but no more frequently than annually unless an Event of Default exists). Each financial report provided by the SRT Guarantor shall be certified by such SRT Guarantor to be complete and accurate in all material respects.
(d)    Failure to Provide Financial Reports.  Borrower's failure to comply with any or all of the terms of this Section 5.5 relating to the furnishing of financial and other reporting information shall (a) not be deemed an Event of Default or incur an administrative charge unless and until Lender provides Borrower with written notice of the same and Borrower fails to so comply for a period of ten (10) Business Days thereafter; and (b) result, at the sole option of Lender, in an administrative charge of Five Hundred and 00/100 Dollars ($500.00) being paid by Borrower for each reporting period for which Borrower has failed to comply with any or all of the material terms of this Section 5.5 relating to the furnishing of material financial and other reporting information.
Section 5.6.    Leases.  
(a)    Borrower shall (i) observe and perform all of the material obligations imposed upon the lessor under the Leases; (ii) promptly send copies to Lender of all notices of default that Borrower shall send or receive under any Material Lease; (iii) promptly notify Lender of any tenant under a Material Lease at the Property which has vacated, or has given Borrower written notice of its intention to vacate, the premises (or any portion thereof) leased or sub-leased to such tenant pursuant to the applicable Material Lease; and (iv) enforce the terms, covenants and conditions in 

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the Leases to be observed by tenants in accordance with commercially reasonable practices for properties similar to the Property.
(b)    Borrower may not enter into any Material Lease after the date hereof without the prior written consent of Lender, not to be unreasonably withheld, conditioned or delayed.
(c)    Borrower may enter into an Approved Lease after the date hereof without the prior written consent of Lender provided such Approved Lease satisfies the Leasing Guidelines and Lender has not given notices to Borrower that an Event of Default exists, provided, however, that if a Lease does not satisfy the Leasing Guidelines, Lender shall nonetheless consider approval of such Lease, in its sole and absolute discretion, based upon an analysis by Lender of the Net Effective Rent for such Lease.
(d)    Borrower shall not (i) make any assignment or pledge of any Lease or Rents to anyone other than Lender until the Indebtedness is paid in full, (ii) collect any Rents under the Leases more than one (1) month in advance (except that Borrower may collect in advance such security deposits as are permitted pursuant to applicable Legal Requirements and are commercially reasonable in the prevailing market); (iii)  amend in any material respect or terminate any  Material Lease (provided, however, that Borrower may terminate any such Lease if the lessee thereunder is in material monetary default of such Lease); or (iv) grant any modification of any Material Lease which in the aggregate might have a Material Adverse Effect.
(e)    Intentionally Deleted.
Section 5.7.    Place of Business; State of Organization; Operations.  Borrower shall not change its (a) chief executive office or its principal place of business or place where its books and records are kept, or (b) the jurisdiction in which it is organized, in each case without giving Lender at least thirty (30) days’ prior written notice thereof and promptly providing Lender such information as Lender may reasonably request in connection therewith. Borrower will continue to engage in the businesses presently conducted by it as and to the extent the same are necessary for the ownership, maintenance, management and operation of the Property. Borrower will remain in good standing under the laws of the State to the extent required for the ownership, maintenance, management and operation of the Property.  Borrower shall also not enter into any line of business, or make any material change in the scope or nature of its business objectives, purposes or operations or undertake or participate in activities other than the continuance of its present business.
Section 5.8.    Zoning; Joint Assessment.  Borrower shall not materially change the Property’s use or initiate, join in or consent to any (a) change in any private restrictive covenant, zoning ordinance or other public or private restrictions limiting or defining the Property’s uses or any part thereof (including filing a declaration of condominium, map or any other document having the effect of subjecting the Property to the condominium or cooperative form of ownership), except those necessary in connection with the uses permitted pursuant to this Agreement and Leases permitted hereunder, or (b) joint assessment of the Property with any other real or personal property.

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Section 5.9.    Equity Requirements.  Borrower has equity in the Property as represented by the Equity Requirements, and evidence of the Equity Requirements, as aforesaid, has been be furnished by Borrower to the satisfaction of Lender prior to the Closing Date.
Section 5.10.    Notice of Default.  Borrower shall promptly advise Lender of any material adverse change in Borrower’s condition, financial or otherwise, or of the occurrence of any Default or Event of Default.
Section 5.11.    Litigation.  Borrower shall give prompt written notice to Lender of any litigation or governmental proceedings pending or threatened against Borrower which would, if determined adversely to Borrower, materially adversely affect Borrower’s condition (financial or otherwise) or business or the Property.
Section 5.12.    Performance by Borrower.  Borrower shall in a timely manner observe, perform and fulfill each and every covenant, term and provision of each Loan Document executed and delivered by, or applicable to, Borrower, and shall not enter into or otherwise suffer or permit any amendment, waiver, supplement, termination or other modification of any Loan Document executed and delivered by, or applicable to, Borrower without the prior written consent of Lender.  Borrower shall not make any distributions to any direct or indirect members of Borrower prior to the occurrence of Stabilization Threshold (except for the payment of Two Thousand and 00/100 Dollars ($2,000.00) per month to Cadence Capital Investments LLC for accounting and administrative purposes).
Section 5.13.    Guarantor Financial Covenants.  The Rothacker Guarantor shall, at all times while the Indebtedness remains unsatisfied, maintain a net worth of not less $10,000,000.00 and a liquidity of not less than $1,400,000.00, and the SRT Guarantor shall also, at all times while the Indebtedness remains unsatisfied, maintain a net worth of not less $10,000,000.00 and a liquidity of not less than $1,400,000.00 (the foregoing, as it relates to each respective Guarantor, the “Net Worth and Liquidity Requirements”). For the purposes hereof, each of the Guarantor’s net worth shall exclude any equity attributable to the Property.
Section 5.14.    Performance Threshold.  
(a)    Prior to the occurrence of the Performance Threshold, there shall be a cap, in the amount of One Million and 00/100 Dollars ($1,000,000.00), on the total amount of the Reserve Funds to be made available to Borrower pursuant to and in accordance with Section 3.4 hereof.

(b)    In the event that the Performance Threshold is not achieved on or before the Performance Deadline, then the following additional protocols shall be implemented: (i) no Capital Expenditures Reserve Funds shall be made available to Borrower unless and until Borrower has first paid for additional Capital Expenditures, in an aggregate amount of One Million Five Hundred Thousand and 00/100 Dollars ($1,500,000.00) (the “Additional Equity Funds”), from equity funds contributed by the members of Borrower; (ii) the Additional Equity Funds shall have been so contributed and used to pay for additional Capital Expenditures, as aforesaid, within nine (9) months of the Performance Deadline; and (iii) once the Additional Equity Funds have been contributed and used to pay for additional Capital Expenditures, as aforesaid, and satisfactory evidence thereof has 

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been furnished to Lender, the Capital Expenditures Reserves Funds shall then once again continue to be made available to Borrower pursuant to and in accordance with Section 3.4 hereof, provided, however, that in such event, a portion of the Capital Expenditures Reserve Funds, in an amount equal to the Additional Equity Funds (the “Holdback Reserve Funds”), shall not be made available to Borrower unless and until either: (x) the Performance Threshold is achieved, or (y) replacement tenants are procured for both the LIT Lease and the Currying Flavors Lease at rents at or above the original rents specified in the LIT Lease and the Currying Flavors Lease and on otherwise similar economic terms, and provided further, that in such event, Lender shall then make the Holdback Reserve Funds available to Borrower, pursuant to and in accordance with Section 3.4 hereof,  as a refund to Borrower of the Additional Equity Funds. 
Section 5.15.    Bringdown of Certain Representations and Warranties.  Borrower shall not create or suffer to exist any Lien against the Property other than Permitted Liens.  Borrower shall cause the representations and warranties contained in Sections 4.7 (ERISA), 4.8 (Not Foreign Person), 4.9 (Investment Company Act, Public Company Act), 4.10 (Title to Property; Liens), 4.12 (Utilities and Public Access), 4.13 (Separate Lots), 4.17 (Title Insurance), 4.18 (Leases and Rents), 4.19 (Compliance with Anti-Terrorism) and 4.25 (Taxes) to be continuously accurate, true and correct at all times until payment in full of the Indebtedness, as if made with respect to current facts presently and continuously throughout the term of the Loan.
ARTICLE 6     
TRANSFERS AND CHANGE OF BUSINESS
Borrower covenants and agrees that, from the Closing Date and until payment in full of the Indebtedness:
Section 6.1.    Transfers.
(a)    Borrower will not allow any Transfer to occur without the Lender’s prior express written approval (which approval may be given or withheld in the Lender’s sole and absolute discretion). Notwithstanding anything to the contrary contained herein, the following Transfers (each a “Permitted Transfer”) shall be permitted without the prior written consent of Lender:
(i)    Any Transfer of a direct or indirect legal or beneficial ownership interest in Borrower that occurs by devise or bequest or by operation of law upon the death or legal incapacity of a natural person that was the holder of such interest to a member of the immediate family of such interest holder or a trust or family conservatorship established for estate-planning purposes for the benefit of such immediate family member, except in connection with the death or legal incapacity of the Rothacker Guarantor, in which case it shall be a Permitted Transfer if: (x) the Rothacker Guarantor is replaced by either the SRT Guarantor, or another Person reasonably acceptable to the Lender, as a replacement guarantor; and (y) the day-to-day operations of Borrower and the Property are managed by either the SRT Guarantor, or another Manager reasonably acceptable to Lender, in each case prior to it becoming an Event of Default under Section 8.1(j) below;
(ii)    Transfers between current direct and indirect owners of Borrower of their direct or indirect legal or beneficial ownership interests in Borrower, including, without 

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limitation, any Transfers that result in a change in the manager of Borrower to the SRT Guarantor, provided, that, in such event, the day-to-day operations of Borrower and the Property are managed by either the Rothacker Guarantor, the SRT Guarantor or another manager reasonably acceptable to Lender;
(iii)    Any Transfers of the stock of the SRT Guarantor, provided that, in such event, the day-to-day operations of Borrower and the Property continue to be managed by the Rothacker Guarantor (provided, however, that if the Rothacker Guarantor has been previously replaced as a result of, or in connection with, a prior Permitted Transfer, the day-to-day operations of Borrower and the Property shall in such event continue to be managed by the SRT Guarantor or a manager reasonably acceptable to Lender); 
(iv)    Any Transfers of direct or indirect interests in the limited partnership interests in Strategic Realty Operating Partnership, L.P., provided that, in such event, the day-to-day operations of Borrower and the Property continue to be managed by the Rothacker Guarantor (provided, however, that if the Rothacker Guarantor has been previously replaced as a result of, or in connection with, a prior Permitted Transfer, the day-to-day operations of Borrower and the Property shall in such event continue to be managed by the SRT Guarantor or a manager reasonably acceptable to Lender);
(v)    Any Transfers to Affiliates of Borrower, provided that, in such event, (x) the Equity Requirements have not changed, and (y) the day-to-day operations of Borrower and the Property continue to be managed by the Rothacker Guarantor (provided, however, that if the Rothacker Guarantor has been previously replaced as a result of, or in connection with, a prior Permitted Transfer, the day-to-day operations of Borrower and the Property shall in such event continue to be managed by the SRT Guarantor or a manager reasonably acceptable to Lender);
(vi)    Any Transfers of up to forty-nine percent (49%) of the membership interests in Borrower to any Person that does not currently directly or indirectly have an interest in Borrower, provided that (x) the Rothacker Guarantor continues to own not less than a fifty percent (50%) direct or indirect profits interest in Borrower and retains management Control of the day to day operations of Borrower and the Property (provided, however, that if the Rothacker Guarantor has been previously replaced as a result of, or in connection with, a prior Permitted Transfer, the day-to-day operations of Borrower and the Property shall in such event continue to be managed by the SRT Guarantor or a manager reasonably acceptable to Lender); or (y) the SRT Guarantor continues to own not less than a 51% direct or indirect ownership interest in the Borrower, and provided further, that for any Transfer of over twenty percent (20%) of the direct or indirect interests in Borrower under this subsection, Lender must be given notice and given the right to obtain KYC searches against any person or entity which, as a result of a Transfer under this subsection, will own at least twenty percent (20%) direct or indirect interest in Borrower, that do not reveal any negative information about such person or entity;
(vii)    Leases entered into in accordance with this Agreement; and
(viii)    Permitted Encumbrances;

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(b)    With respect to each Permitted Transfer:
(i)    Borrower shall (A) give Lender notice of such Transfer, together with copies of all instruments effecting such Transfer prior to such Transfer, if possible, relative to a Transfer by the Rothacker Guarantor (i.e., it is not possible to provide prior notice of the death or legal incapacity of the Rothacker Guarantor prior thereto); and (B) for all other applicable Transfers, other than those under Section 6.1(a)(iii) hereof and Section 6.1(a)(iv) hereof, give Lender notice of such Transfers, together with copies of all instruments effecting such Transfer, not less than twenty (20) Business Days after the date of such the Transfer;
(ii)    With respect to any Transfer under Section 6.1(a)(iii) hereof, the SRT Guarantor shall have complied with all material and necessary “know your customer” or other similar checks under all Legal Requirements applicable to the SRT Guarantor; and 
(iii)    With respect to all other applicable Transfers, Borrower and any transferee shall also reasonably cooperate and comply (at Borrower’s or such transferee’s expense) with all material and necessary “know your customer” or other similar checks under all Legal Requirements applicable to Lender.
Section 6.2.    Other Indebtedness.  Borrower shall not incur, create, assume, allow to exist, become or be liable in any manner with respect to any other indebtedness or monetary obligations, except for the Indebtedness and Permitted Indebtedness.
Section 6.3.    Single-Purpose Entity; Change In Business.  Borrower shall not cease to be a Single-Purpose Entity. Borrower shall also not modify, amend, restate or replace its organizational documents in any material manner without the prior written consent of Lender, which consent shall not be unreasonably withheld. Until the Indebtedness is repaid in full, Borrower shall not amend its organizational documents in any material respect, including with respect to the matters set forth in this Section 6.3, without Lender’s prior written consent, such consent not to be unreasonably withheld.  
ARTICLE 7     
INSURANCE, CASUALTY, CONDEMNATION AND RESTORATION
Section 7.1.    Types of Insurance.  At all times during the term of the Loan, Borrower shall maintain, at its sole cost and expense, for the mutual benefit of Borrower and Lender, the following policies of insurance:
(a)    Insurance against Casualty to the Property under a policy or policies covering such risks as are presently included in “special form” (also known as “all risk”) coverage, including such risks as are ordinarily insured against by similar businesses, but in any event including fire, lightning, windstorm, hail, explosion, riot, riot attending a strike, civil commotion, damage from aircraft, smoke, vandalism, malicious mischief and acts of terrorism, both foreign and domestic. Unless otherwise agreed in writing by Lender, such insurance shall be for the full insurable value of the Property, with a deductible amount, no greater than Twenty-Five Thousand and 00/100 Dollars ($25,000.00) per occurrence.  No policy of insurance shall be written such that the proceeds thereof 

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will produce less than the minimum coverage required by this subsection by reason of co-insurance provisions or otherwise (i.e., all such policies shall have either no coinsurance or, if coinsurance, then such policy shall have an “Agreed Amount” endorsement acceptable to Lender).  The term “full insurable value” as used herein shall mean one hundred percent (100%) of the actual replacement cost of the Property (including a “Replacement Cost” endorsement, excluding foundation and excavation costs and costs of underground flues, pipes, drains and other uninsurable items) without any deduction for physical depreciation. The foregoing insurance is, as of the Closing Date, provided under a “Master Policy,” provided, however, that (x) once any construction commences at the Property, such coverage will be provided through the “Builder’s Risk Policy,” with the Property being deleted from the aforementioned “Master Policy;” and (y) upon completion of any such construction, the Property shall be added back to the coverage of the “Master Policy.”
(b)    Public liability insurance, to be written on an occurrence basis, including (i) “Commercial General Liability Insurance”, with no deductible or self-insured retention greater than Five Thousand and 00/100 Dollars ($5,000) per occurrence; (ii) “Owned”, “Hired” and “Non Owned Auto Liability” if applicable; and (iii) umbrella liability coverage for personal injury, bodily injury, death, accident and property damage, such insurance providing in combination no less than Five Million and 00/100 Dollars ($5,000,000.00) per occurrence, unless otherwise approved in writing by Lender. Coverage shall include acts of Terrorism, both Foreign and Domestic. The policies described in this subsection shall also include coverage for elevators, escalators, independent contractors, “Contractual Liability” (covering, to the maximum extent permitted by law, Borrower’s obligations to indemnify Lender as required under this Agreement and the other Loan Documents), “Products” and “Completed Operations Liability” coverage. Liquor Liability, Automotive Liability and Garage Keepers Liability, or any other liability coverage deemed appropriate given the Property type and exposure, may be required at the discretion of the Lender.
(c)    Workers’ compensation insurance for all employees of Borrower in such amount as is required by law and including employer’s liability insurance, if required by Lender.
(d)    During any period of any Restoration or any other construction upon the Property, Borrower shall maintain, or cause others to maintain, builder’s risk insurance on a completed value basis (non-reporting form) of the type customarily carried in the case of similar construction for one hundred percent (100%) of the full, completed replacement cost of work in place and materials stored at or upon the Property, and such insurance shall cover against such risks (including the risks set forth in Section 7.1(a) hereof, and extended coverage and collapse of the Improvements to agreed limits) as Lender may request, in form and substance acceptable to Lender, with a deductible amount no greater than Twenty-Five Thousand and 00/100 Dollars ($25,000.00), and with such additional coverages to include, without limitation:  (i)  soft costs, including delayed opening coverage, (ii) coverage insuring all materials (installed and uninstalled, whether stored on or off-site); (iii) coverage naming Borrower as a named insured if the policy is provided by a  general contractor; and (iv) professional engineers and architects liability (including errors and omissions) coverage at minimum limits of One Million and 00/100 Dollars ($1,000,000.00) per occurrence and of Two Million and 00/100 Dollars ($2,000,000.00) in the aggregate.

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(e)    If at any time any portion of any structure on the Property is insurable against Casualty by flood and is located in a Special Flood Hazard Area under the Flood Disaster Protection Act of 1973, as amended, a flood insurance policy in form and amount, with deductibles acceptable to Lender, but in no event less than the amount sufficient to meet applicable Legal Requirements, as such Legal Requirements may from time to time be in effect.
(f)    Rental loss and/or business interruption insurance (i) with Lender being named as “Lender Loss Payee”, (ii) in an amount equal to one hundred percent (100%) of the projected Rents from such Property during the period of restoration; and (iii) containing an extended period of indemnity endorsement which provides that after the physical loss to the Property has been repaired, the continued loss of income will be insured until such income either returns to the same level it was at prior to the loss, or the expiration of six (6) months from the date that such Property is repaired or replaced and operations are resumed, whichever first occurs, and notwithstanding that the policy may expire prior to the end of such period. Coverage shall include acts of Terrorism, both Foreign and Domestic. Lender shall be named Lenders Loss Payee on a Standard Mortgagee Endorsement. During times when rents are not being collected, Borrower shall maintain Business Interruption coverage in an amount equal to eighteen (18) months continuing expenses with at least a twelve (12) month period of indemnity and a six (6) month extended period of indemnity. 
(g)    During any periods of vacancy at the Property, policies shall permit vacancy as long as necessary, and policies shall provide full coverage and protection without restriction or limitation due to vacant premises.
(h)    Comprehensive boiler and machinery insurance is required if the property contains centralized equipment, steam boilers or other pressure-fired vessels are in operation at the Property. Minimum liability amount per accident must equal the replacement (insurable) value of Improvements housing such equipment, boiler or pressure-fired machinery or such lesser amount as approved by Lender in their discretion.  The deductible with respect to such insurance shall not exceed Ten Thousand and 00/100 Dollars ($10,000.00) per claim.
(i)    In the event the Land or the Improvements constitute a legal non-conforming use under applicable building, zoning, or land use laws or ordinances, coverage shall include Ordinance or Law coverage for loss of value of the undamaged portion of the Improvements up to the full limits of the policy, demolition and increased cost of construction (insurance for demolition and increased cost of construction may contain a sub limit satisfactory to Lender but no less than fifteen per cent (15%) of total insurable value).
(j)    Such other and further insurance and such higher limits as may be required from time to time by Lender in order to comply with regular requirements and practices of Lender in similar transactions including, if required by Lender, environmental liability insurance and earthquake insurance if the “Probable Maximum Loss” is equal to or greater than twenty percent (20%) and in such event, such earthquake insurance shall be (A) with minimum coverage equivalent to the greater of  1.0x SUL (scenario upper loss) and 1.5x SEL (scenario expected loss) multiplied by the full replacement cost of the Improvements plus business income, (B) having a deductible approved by Lender (but in any event not  in excess of 5% of the total insurable value of the Property), 

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and (C) if the Property is legally nonconforming under applicable zoning ordinances and codes, containing ordinance of law coverage in amounts as required by Lender.
(k)    All insurance provided for in this Section 7.1 shall be obtained under valid and enforceable policies, and shall be subject to the approval of Lender as to insurance companies, amounts, deductibles, loss payees and insureds, and all such policies provided for or contemplated by this Section 7.1, except for the insurance policy referenced in Section 7.1(c) hereof, shall name Borrower as the insured and Lender and its successors and/or assigns as their interests may appear as mortgagee and Lender’s Loss Payee (in the case of property insurance and business interruption/loss of rents coverage) and the additional insured (in the case of liability insurance), and in the case of any and all property damage, boiler and machinery, flood and earthquake insurance, shall also contain a so-called New York standard non-contributing mortgagee clause in favor of Lender providing that the loss thereunder shall be payable to Lender as Mortgagee/Lender’s Loss Payee.
(l)    Unless Lender is obligated to pay the Premiums from the Tax And Insurance Account pursuant to the terms of Section 3.3(d) hereof, Borrower shall promptly pay all Premiums when due on such insurance and, in all events, not less than thirty (30) days prior to the expiration dates of each such policy, Borrower will deliver to Lender acceptable evidence of insurance, such as a renewal policy or policies marked “premium paid” or other evidence satisfactory to Lender reflecting that such Insurance Premiums have been paid current and that all required insurance is current and in force.  Borrower will immediately give Notice to Lender of any cancellation of, or modification or reduction in, any insurance policy. Lender shall not, because of accepting, rejecting, approving or obtaining insurance, incur any liability for (A) the existence, nonexistence, form or legal sufficiency thereof, (B) the solvency of any insurer, or (C) the payment of losses.
(m)    Borrower may provide any required insurance under a blanket policy or policies covering the Property and Improvements and other property and assets not part of the Property, provided that Lender is provided a full schedule of locations and values for all properties on such blanket policy and such blanket policy otherwise complies with the requirements set forth above. Any allocated coverage shall equal or exceed the coverage amounts required and must properly identify and fully protect the Property as if a separate policy were issued for one hundred per cent (100%) of the replacement cost, with sub limits as permitted herein, at the time of loss.
(n)    Borrower shall not carry separate insurance, concurrent in kind or form or contributing in the event of loss, with any of the insurance policies required by this Section 7.1.  Borrower may, however, carry insurance for the Improvements, in addition to such policies, but only if such additional insurance: (a) does not violate or entitle the carrier to assert any defense or disclaim any primary coverage under any of such policies; (b) mutually benefits Borrower and Lender, as their interests may appear; and (c) otherwise complies with the terms of this Agreement.
Section 7.2.    Insurer Ratings.  Unless otherwise approved by Lender in writing in advance of placement, Borrower will maintain the insurance coverage described in Section 7.1 with companies acceptable to Lender and with a claims paying ability rating of not less than “A-” by S&P and a financial and performance rating of “A-VIII” or its equivalent by A.M. Best. All insurers providing insurance required by this Agreement shall be authorized to issue insurance in the State.

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Section 7.3.    General Insurance Requirements.
(a)    Borrower agrees that all insurance policies shall:
(i)    be in such form and with such endorsements and in such amounts as required by this Agreement and as are satisfactory to Lender;
(ii)    name Lender as an additional insured/loss payee/mortgagee and provide that all Insurance Proceeds be payable to Lender;
(iii)    contain, where applicable, a “Non Contributory Standard Lender Clause” and a Lender’s Loss Payable Endorsement or their equivalents naming Lender as the person to whom all payments shall be paid and a provision that payment of Insurance Proceeds in excess of the Restoration Proceeds Threshold shall be made by a check payable only to Lender;
(iv)    contain a waiver of subrogation endorsement as to Lender and its successors and assigns, providing that no policy shall be impaired or invalidated by virtue of any act, failure to act, negligence of, or violation of declarations, warranties or conditions contained in such policy by Borrower, Lender or any other named insured, additional insured or loss payee (which might, absent such agreement, result in a forfeiture of all or a part of such insurance payment);
(v)    contain an endorsement indicating that neither Lender nor Borrower shall be or be deemed to be a co-insurer with respect to any risk insured by such policies and shall provide for an aggregate deductible per loss for all policies not in excess of $25,000.00 for Property policies and no deductible or retention for General Liability policies (unless otherwise permitted under this Article VII), unless otherwise approved by Lender in advance and in writing;
(vi)    contain a provision that any such Property policies shall not be canceled without at least thirty (30) days’ prior written notice to Lender in each instance (at least ten (10) days’ prior written notice to Lender due to nonpayment of premium). Such notice shall also be provided for Liability policies (except, when not available, Borrower shall provide required notice to Lender); and
(vii)    with respect to commercial general liability and Excess/Umbrella Liability, provide for claims to be made on an occurrence basis.
(b)    In the event of foreclosure of the lien of the Security Instrument or other transfer of title or assignment of the Property in extinguishment, in whole or in part, of the Indebtedness, all right, title and interest of Borrower in and to all policies of casualty insurance covering all or any part of the Property shall inure to the benefit of and pass to the successors in interest to Lender or the purchaser or grantee of the Property or any part thereof.
Section 7.4.    Certificates of Insurance and Delivery of Policies.  Upon Lender’s request, certified copies of all insurance policies required pursuant to this Article 7 shall be promptly delivered to Lender. Certificates of insurance with respect to all renewal and replacement policies shall be delivered to Lender not less than ten (10) days prior to the expiration date of any of the 

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insurance policies required to be maintained hereunder which certificates shall bear notations evidencing payment of applicable premiums and copies of such insurance policies shall be delivered to Lender promptly after Borrower’s receipt thereof.  If Borrower fails to maintain and deliver to Lender the certificates of insurance required by this Agreement, Lender may, at its option, after notice to Borrower, procure such insurance, and Borrower shall reimburse Lender for the amount of all premiums paid by Lender thereon promptly, after demand by Lender, with interest thereon at the Default Rate from the date paid by Lender to the date of repayment, and such sum shall be a part of the Indebtedness secured by the Loan Documents.  Lender shall not by the fact of approving, disapproving, accepting, preventing, obtaining or failing to obtain any insurance, incur any liability for or with respect to the amount of insurance carried, the form or legal sufficiency of insurance contracts, solvency of insurance companies, or the carriers’ or Borrower’s payment or defense of lawsuits, and Borrower hereby expressly assumes full responsibility therefor and all liability, if any, with respect thereto.  Borrower represents that no material claims have been made under any of such insurance policies, and no party, including Borrower, has done, by act or omission, anything which would impair the coverage of any of such insurance policies.
Section 7.5.    Restoration Proceeds.
(a)    Any and all awards, compensation, reimbursement, damages, proceeds, settlements, and other payments or relief paid or to be paid, together with all rights and causes of action relating to or arising from, (i) any insurance policy maintained by or on behalf of Borrower following any damage, destruction, casualty or loss to all or any portion of the Property (a “Casualty”, and such proceeds, “Insurance Proceeds”) or (ii) any temporary or permanent taking or voluntary conveyance of all or part of the Property, or any interest therein or right accruing thereto or use thereof, as the result of, or in settlement of, any condemnation or other eminent domain proceeding by any Governmental Authority whether or not the same shall have actually been commenced (a “Taking”, and such proceeds, “Condemnation Proceeds”, and together with Insurance Proceeds, collectively, “Restoration Proceeds”) are hereby assigned to Lender as additional collateral security hereunder subject to the Lien of the Security Instrument, to be applied in accordance with this Article 7.  Lender shall be entitled to receive and collect all Restoration Proceeds, and Borrower shall instruct and cause the issuer of each policy of insurance described herein and any applicable Governmental Authority to deliver to Lender all Restoration Proceeds.  Borrower shall execute such further assignments of the Restoration Proceeds as Lender may from time to time reasonably require.  Notwithstanding the foregoing, if the Restoration Proceeds, less the amount of Lender’s actual out-of-pocket costs and expenses (including reasonable attorneys’ fees and costs) incurred in collecting the same (the “Net Restoration Proceeds”), are One Hundred Thousand and 00/100 Dollars ($100,000.00) or less (the “Restoration Proceeds Threshold”), provided no Event of Default then exists, Lender shall make such Net Restoration Proceeds available to Borrower. All Insurance Proceeds received by Borrower or Lender in respect of business interruption coverage, and all Condemnation Proceeds received with respect to a temporary Taking available to Borrower, shall be deposited in a segregated escrow account with Lender or its servicer, as applicable, and Lender shall estimate the number of months required for Borrower to restore the damage caused such Casualty or replace cash flow interrupted by such temporary Taking, as applicable, and shall divide the aggregate proceeds by such number of months, and, provided no Event of Default then exists, shall disburse a monthly installment thereof to Borrower each such month.  Subject to Lender’s 

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rights under Section 7.6, provided no Event of Default has occurred and is continuing and the Restoration has been completed in accordance with this Agreement, any Net Restoration Proceeds available to Borrower for Restoration, to the extent not used by Borrower in connection with, or to the extent they exceed the cost of such Restoration and any costs incurred by Lender, shall be paid to Borrower.
(b)    Lender shall be entitled at its option to participate in any compromise, adjustment or settlement in connection with (i) any insurance policy claims relating to any Casualty, and (ii) any Taking in an amount in controversy, in either case, in excess of the Restoration Proceeds Threshold, and Borrower shall within ten (10) Business Days after request therefor reimburse Lender for all reasonable out‐of‐pocket expenses (including reasonable attorneys’ fees and disbursements) incurred by Lender in connection with such participation.  Borrower shall not make any compromise, adjustment or settlement in connection with any such claim in excess of the Restoration Proceeds Threshold or if an Event of Default then exists without the prior written approval of Lender.  Borrower shall not make any compromise, adjustment or settlement in connection with any claim unless same is commercially reasonable.
(c)    If and to the extent Restoration Proceeds are not required to be made available to Borrower to be used for the Restoration of the Improvements, Equipment and Inventory affected by the Casualty or Taking, as applicable, pursuant to this Agreement, Lender shall be entitled, without Borrower’s consent, to apply such Restoration Proceeds or the balance thereof, at Lender’s option either (i) to the full or partial payment or prepayment of the Indebtedness in accordance with the Note; or (ii) to the Restoration of all or any part of such Improvements, Equipment and Inventory affected by the Casualty or Taking, as applicable.
Section 7.6.    Restoration.  Borrower shall apply all Insurance Proceeds first, to complete restoration or repair of the Improvements and Equipment before applying, disbursing or distributing any such Insurance Proceeds for any other purpose. Borrower shall restore and repair the Improvements and Equipment or any part thereof now or hereafter damaged or destroyed by any Casualty or affected by any Taking; provided, however, that if the Casualty is not insured against or insurable, Borrower shall so restore and repair even though no Insurance Proceeds are received, or even if the available Insurance Proceeds are less than the cost of restoration and repair.  Notwithstanding anything to the contrary set forth in Section 7.5, Lender agrees that Lender shall make the Net Restoration Proceeds (other than business interruption insurance proceeds, which shall be held and disbursed as provided in Section 7.5) available to Borrower for Borrower’s restoration and repair of the Improvements, Equipment and Inventory affected by the Casualty or Taking (a “Restoration”), as applicable, on the following terms and subject to Borrower’s satisfaction of the following conditions; provided, that Lender shall have the right to waive any of the following conditions in its discretion:
(a)    At the time of such Casualty or Taking, as applicable, and at all times thereafter there shall exist no Event of Default which remains uncured;
(b)    The Improvements, Equipment and Inventory affected by the Casualty or Taking, as applicable, shall be capable of being restored (including replacements) to substantially the same condition, utility, quality and character, as existed immediately prior to such Casualty or 

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Taking, as applicable, in all material respects with a fair market value and projected cash flow of the Property equal to or greater than prior to such Casualty or Taking, as applicable;
(c)    Borrower shall demonstrate to Lender’s reasonable satisfaction Borrower’s ability to pay the Indebtedness coming due during such repair or restoration period (after taking into account proceeds from business interruption insurance carried by Borrower);
(d)    (i) in the event of a Casualty, the Casualty resulted in an actual or constructive loss of less than fifty percent (50%) of the fair market value of the Property, or (ii) in the event of a Taking, the Taking resulted in an actual or constructive loss of less than fifteen percent (15%) of the fair market value of the Property, less than fifteen percent (15%) of the land constituting the Property is taken, such land is located along the perimeter or periphery of the Property, and no portion of the Improvements on the Property is the subject of such Taking;
(e)    Borrower shall have provided to Lender all of the following, and collaterally assigned the same to Lender pursuant to assignment documents acceptable to Lender:  (i) an architect’s contract with an architect reasonably acceptable to Lender and complete plans and specifications for the Restoration of the Improvements, Equipment and Inventory lost or damaged to the condition, utility and value required by Section 7.6(b); (ii) fixed-price or guaranteed maximum cost construction contracts with contractors reasonably acceptable to Lender for completion of the Restoration work in accordance with the aforementioned plans and specifications; (iii) such additional funds (if any) as are necessary from time to time, in Lender’s reasonable opinion, to complete the Restoration (which funds shall be held by Lender as additional collateral securing the Indebtedness and shall be disbursed, if at all, pursuant to this Article 7); and (iv) copies of all Permits and licenses necessary to complete the Restoration in accordance with the plans and specifications and all Legal Requirements;
(f)    Borrower shall use commercially reasonable efforts to commence such work within one hundred twenty (120) days after such Casualty or Taking, as applicable, and shall diligently pursue such work to completion;
(g)    Lender shall be satisfied that the Restoration will be completed on or before the earliest to occur of (A) the date six (6) months prior to the Maturity Date, (B) such time as may be required under applicable Legal Requirements in order to repair and restore the Property to the condition it was in immediately prior to such Casualty or such Taking, as applicable, or (C) the expiration of the business interruption insurance coverage referred to in Section 7.1(d); and
(h)    the Property and the use thereof after the Restoration will be in compliance with all applicable Legal Requirements.
Section 7.7.    Disbursement.
(a)    Each disbursement by Lender of such Restoration Proceeds shall be funded subject to conditions and in accordance with disbursement procedures which a commercial construction lender would typically establish in the exercise of sound banking practices, including 

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requiring lien waivers and any other documents, instruments or items which may be reasonably required by Lender.
(b)    In no event shall Lender be obligated to make disbursements of Restoration Proceeds in excess of an amount equal to the costs actually incurred from time to time for work in place as part of the Restoration, as determined by Lender, less, as to each contractor, subcontractor or materialman engaged in a Restoration, an amount equal to the greater of (i) ten percent (10%) of the costs actually incurred for work in place as part of such Restoration, as reasonably determined by Lender, and (ii) the amount actually withheld by Borrower (the “Casualty Retainage”).  The Casualty Retainage shall not be released until Lender reasonably determines that the Restoration has been completed in accordance with the provisions of this Agreement and that all approvals necessary for the re-occupancy and use of the Property have been obtained from all appropriate Governmental Authorities, and Lender receives evidence satisfactory to Lender that the costs of the Restoration have been paid in full or will be paid in full out of the Casualty Retainage.
Section 7.8.    Qualified Amount. Notwithstanding anything herein to the contrary, in the event of a taking of any portion of a Property by a state or any political subdivision or authority thereof, whether by legal proceeding or by agreement, or Casualty or Taking, if the ratio of the unpaid principal balance of the Loan to the value of the remaining Properties (as determined by the Lender in its sole discretion using any commercially reasonable method permitted to a REMIC Trust; and which shall exclude the value of any personal property or going concern value, if any) exceeds or would exceed 125% immediately after giving effect to the condemnation/casualty, then an amount that is a “qualified amount” as that term is defined in IRS Revenue Procedure 2010-30, as the same may be amended, replaced, supplemented or modified from time to time, must be applied to the principal amount of the Loan (rather than to any other portion of the Loan), unless Lender receives an opinion of counsel that, if this clause is applicable but not followed or is no longer applicable at the time of such taking, condemnation, eminent domain or similar proceeding, Casualty or Taking, the Loan (i) will not be subject to a “significant modification” within the meaning of Treasury Regulations Section 1.860G-2(b)(2) and (ii) will not fail to be a “qualified mortgage” within the meaning of Section 860G(a)(3)(A) of the Code.
ARTICLE 8     
DEFAULTS
Section 8.1.    Event of Default.  The occurrence of one or more of the following events shall be an “Event of Default” hereunder:
(a)    if Borrower fails to make any scheduled payment of principal, interest, or amounts due under Article 3 on any Payment Date, or fails to pay any other amount due and payable pursuant to the Loan Documents within three (3) days of the due date;
(b)    if Borrower fails to pay the outstanding Indebtedness on the Maturity Date;
(c)    the occurrence of the events identified elsewhere in this Agreement or the other Loan Documents as constituting an “Event of Default” hereunder or thereunder;

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(d)    the occurrence of a Transfer, other than a Permitted Transfer;
(e)    the occurrence of a material adverse change in the condition, financial or otherwise, of the Borrower, or of all or any portion of the Loan which has a Material Adverse Effect and/or the Guarantor’s failure to comply with the Net Worth and Liquidity Requirements;
(f)    the occurrence of any material litigation or administrative investigation or proceeding (pending or threatened) against the Borrower or Guarantor, whether or not covered by insurance, which would, if determined adversely to Borrower or Guarantor, materially adversely affect the Property or such parties’ condition (financial or otherwise);
(g)    if any representation or warranty made herein or in any other Loan Document, or in any report, certificate, financial statement or other instrument, agreement or document furnished by Borrower in connection with this Agreement or any other Loan Document shall be false in any material respect as of the date such representation or warranty was made or remade, provided, however, that Borrower shall have, with respect to unintentional misrepresentations that can be cured, a cure period of twenty (20) days after written notice from Lender within which to effectuate such a cure of the same;
(h)    if Borrower or Guarantor (i) makes an assignment for the benefit of creditors, (ii) has a receiver, liquidator or trustee appointed for it (other than as a result of an action by Lender or a third party acting on behalf of Lender, a “Lender Action”), (iii) is adjudicated as bankrupt or insolvent, or if any petition for bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law or any similar federal or state law shall be filed by or against, consented to, solicited by, or acquiesced in by it excluding Lender Actions, or (iv) has any proceeding for its insolvency, dissolution or liquidation instituted against it excluding Lender Actions (any of the foregoing in clauses (i) through (iv), an “Insolvency Action”); provided, however, that if such Insolvency Action was involuntary and not consented to by Borrower or Guarantor, as applicable, such Insolvency Action shall not be an Event of Default unless the same is not discharged, stayed or dismissed within ninety (90) days after the filing or commencement thereof;
(i)    the failure of Borrower to maintain the insurance required pursuant to Article 7;
(j)    if any guaranty given in connection with the Loan shall cease to be in full force and effect or any guarantor shall deny or disaffirm its obligations thereunder, or the death or legal incapacity of the Rothacker Guarantor (provided, however, the death or legal incapacity of the Rothacker Guarantor shall not constitute an Event of Default or change in Control of Borrower provided that Lender shall have received guarantees, substantially similar to the guarantees provided on the Closing Date by the Rothacker Guarantor), from either the SRT Guarantor, or other replacement guarantor satisfactory to Lender in its sole discretion, within sixty (60) days following the death or legal incapacity of such Rothacker Guarantor); or; 
(k)    a default shall be continuing under any of the other obligations, agreements, undertakings, terms, covenants, provisions or conditions of this Agreement not otherwise referred to in this Section 8.1, or under any other Loan Document, for ten (10) days after notice to Borrower 

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(and Guarantor, if applicable) in the case of any default which can be cured by the payment of a sum of money, or for thirty (30) days after written notice in the case of any other default (unless otherwise provided herein or in such other Loan Document); provided, however, that if such non-monetary default under this clause (i) is susceptible of cure but cannot reasonably be cured within such thirty (30) day period and provided further that Borrower (or Guarantor, if applicable) shall have commenced to cure such default within such thirty (30) day period and thereafter diligently and expeditiously proceeds to cure the same, such thirty (30) day period shall be extended for such time as is reasonably necessary for Borrower (or Guarantor, if applicable) in the exercise of due diligence to cure such default, but in no event shall such period exceed sixty (60) days after the original notice.
Section 8.2.    Remedies.  Upon the occurrence and during the continuance of an Event of Default, all or any one or more of the rights, powers and other remedies available to Lender against Borrower under any Loan Document, or at law or in equity may be exercised by Lender at any time and from time to time (including the right to accelerate and declare the outstanding Indebtedness to be immediately due and payable), without notice or demand, whether or not all or any portion of the Indebtedness shall be declared due and payable, and whether or not Lender shall have commenced any foreclosure proceeding or other action for the enforcement of its rights and remedies under any of the Loan Documents with respect to all or any portion of the Property. Notwithstanding anything contained to the contrary herein, the outstanding Indebtedness shall be accelerated and immediately due and payable, without any election by Lender upon the occurrence of an Insolvency Action.
Section 8.3.    Remedies Cumulative.  The rights, powers and remedies of Lender under this Agreement shall be cumulative and not exclusive of any other right, power or remedy which Lender may have against Borrower pursuant to this Agreement or the other Loan Documents executed by or with respect to Borrower, or existing at law or in equity or otherwise.  Lender’s rights, powers and remedies may be pursued singly, concurrently or otherwise, at such time and in such order as Lender may determine in Lender’s discretion.  No delay or omission to exercise any remedy, right or power accruing upon an Event of Default shall impair any such remedy, right or power or shall be construed as a waiver thereof, but any such remedy, right or power may be exercised from time to time and as often as may be deemed expedient.  A waiver of any Event of Default shall not be construed to be a waiver of any subsequent Event of Default or to impair any remedy, right or power consequent thereon.  Any and all of Lender’s rights with respect to the Property shall continue unimpaired, and Borrower shall be and remain obligated in accordance with the terms hereof, notwithstanding (i) the release or substitution of Property at any time, or of any rights or interest therein or (ii) any delay, extension of time, renewal, compromise or other indulgence granted by Lender in the event of any Event of Default with respect to the Property or otherwise hereunder.  Notwithstanding any other provision of this Agreement, Lender reserves the right to seek a deficiency judgment or preserve a deficiency claim, in connection with the foreclosure of the Security Instrument on the Property, to the extent necessary to foreclose on other parts of the Property.
Section 8.4.    Lender Appointed Attorney-In-Fact.  Borrower hereby irrevocably and unconditionally constitutes and appoints Lender as Borrower’s true and lawful attorney-in-fact, with full power of substitution, at any time after the occurrence and during the continuance of an 

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Event of Default to execute, acknowledge and deliver any documents, agreements or instruments and to exercise and enforce every right, power, remedy, option and privilege of Borrower under all Loan Documents, and do in the name, place and stead of Borrower, all such acts, things and deeds for and on behalf of and in the name of Borrower under any Loan Document, which Borrower could or might do or which Lender may deem necessary or desirable to more fully vest in Lender the rights and remedies provided for under the Loan Documents and to accomplish the purposes thereof.  The foregoing powers of attorney are irrevocable and coupled with an interest.
Section 8.5.    Lender’s Right to Perform.  If Borrower fails to perform any covenant or obligation contained herein for a period of five (5) Business Days after Borrower’s receipt of notice thereof from Lender, without in any way limiting Section 8.1, Lender may, but shall have no obligation to, perform, or cause performance of, such covenant or obligation, and the expenses of Lender incurred in connection therewith shall be payable by Borrower to Lender upon demand, together with interest thereon at the Default Rate.  Notwithstanding the foregoing, Lender shall have no obligation to send notice to Borrower of any such failure.
ARTICLE 9     
ENVIRONMENTAL PROVISIONS
Section 9.1.    Environmental Representations and Warranties.  Borrower represents, warrants and covenants, as to itself and the Property, other than as disclosed to Lender in the environmental report(s) delivered to Lender in connection with the Loan (and listed on the attached Schedule 6): (a) to Borrower’s knowledge, there are no Hazardous Substances or underground storage tanks in, on, or under the Property, except those that are both (i) in compliance with all Environmental Laws and with permits issued pursuant thereto and (ii) which do not require Remediation; (b) to Borrower’s knowledge, there are no past, present or threatened Releases of Hazardous Substances in, on, under, from or affecting the Property which have not been fully Remediated in accordance with Environmental Law; (c) to Borrower’s knowledge, there is no Release or threat of any Release of Hazardous Substances in violation of Environmental Laws which has migrated or is migrating to the Property; (d) to Borrower’s knowledge, there is no past or present non-compliance with Environmental Laws, or with permits issued pursuant thereto, in connection with the Property which has not been fully Remediated in accordance with Environmental Law; (e) Borrower does not know of, and has not received, any written or oral notice or other communication from any Person (including a Governmental Authority) relating to Hazardous Substances or the Remediation thereof, of possible liability of any Person pursuant to any Environmental Law, other environmental conditions in connection with the Property, or any actual or potential administrative or judicial proceedings in connection with any of the foregoing; and (f) Borrower has truthfully and fully provided to Lender, in writing, any and all information relating to conditions in, on, under or from the Property that is known to Borrower and that is contained in files and records of Borrower, including any reports relating to Hazardous Substances in, on, under or from the Property and/or to the environmental condition of the Property.
Section 9.2.    Environmental Covenants.  Borrower covenants and agrees that:  (a) all uses and operations on or of the Property, whether by Borrower or any other Person, shall be in compliance with all Environmental Laws and permits issued pursuant thereto; (b) there shall be no 

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Hazardous Substances used, present or Released in, on, under or from the Property, except those that are (i) in compliance with all Environmental Laws and with permits issued pursuant thereto; and (ii) which do not require Remediation; (c) Borrower shall, at its sole cost and expense, (i) fully and expeditiously cooperate in all activities pursuant to Section 9.3, including providing all relevant information and making knowledgeable Persons available for interviews, and (ii) effectuate Remediation of any condition (including a Release of a Hazardous Substance or violation of Environmental Laws) in, on, under or from the Property for which Remediation is legally required; and (d) Borrower shall immediately upon Borrower becoming aware notify Lender in writing of (A) any unlawful Releases or threatened Releases of Hazardous Substances in, on, under, from or migrating towards the Property in violation of Environmental Laws; (B) any non-compliance with any Environmental Laws related in any way to the Property; (C) any actual or potential Lien imposed on Borrower or the Property pursuant to any Environmental Law, whether due to any act or omission of Borrower or any other person (an “Environmental Lien”); (D) any required Remediation of environmental conditions relating to the Property; and (E) any written notice or other communication of which any Borrower becomes aware from any source whatsoever relating in any way to an actual or threatened Release of Hazardous Substances in violation of Environmental Laws or the Remediation thereof.
Section 9.3.    Environmental Cooperation and Access.  In the event any Indemnified Party has a reasonable basis for believing that an environmental condition exists on the Property in violation of Environmental Laws, upon reasonable notice from Lender, Borrower shall, at Borrower’s sole cost and expense, promptly cause an engineer or consultant reasonably satisfactory to Lender to conduct any environmental assessment or audit (the scope of which shall be determined in the sole and absolute discretion of Lender) and take any samples of soil, groundwater or other water, air, or building materials or any other invasive testing reasonably requested by Lender and promptly deliver the results of any such assessment, audit, sampling or other testing; and provided, further, that the Indemnified Parties and any other Person designated by the Indemnified Parties, may at its option, enter upon the Property at all reasonable times upon reasonable prior notice to assess any and all aspects of the environmental condition of the Property and its use.
Section 9.4.    Environmental Indemnity.  
(a)    Borrower covenants and agrees, at its sole cost and expense, to protect, defend, indemnify, release and hold Indemnified Parties harmless from and against any and all Losses actually imposed upon or incurred by or asserted against any Indemnified Parties and directly or indirectly arising out of or in any way relating to any one or more of the following:  (i) any past, present or threatened Release of Hazardous Substances in, on, above, under, from or affecting the Property, or any Remediation thereof; (ii) the imposition, recording or filing or the threatened imposition, recording or filing of any Environmental Lien encumbering the Property; (iii) any misrepresentation or inaccuracy in any representation or warranty concerning Hazardous Substances; and (iv) any breach of Section 9.1 or Section 9.2 of this Agreement.
(b)    Notwithstanding anything to the contrary contained in Section 9.4(a) hereof, Borrower shall have no obligations under Section 9.4(a) hereof following the repayment in full of the Indebtedness (and provided that no claims have previously been made by Indemnitee hereunder) 

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after all of the following conditions have been satisfied:  (a) there has been no change in any Environmental Law or other Legal Requirement prior to the date on which the Indebtedness is paid in full the effect of which would be to make a lender/mortgagee liable with respect to any condition or matter for which the Indemnified Parties are entitled to be indemnified notwithstanding the fact that the Indebtedness was repaid in full; (b) Lender shall have received, at Borrower’s sole cost and expense, an environmental inspection report for the Property in scope satisfactory to Lender, and prepared by an independent consulting firm/environmental engineer acceptable to Lender, dated no more than thirty (30) days prior to the date the same is delivered to Lender, showing that there exists no condition or matter with respect to the Property for which the Indemnified Parties are entitled to be indemnified; and (c) three (3) years have elapsed since the date on which the Indebtedness was repaid in full.
Section 9.5.    Duty to Defend.  Upon request by any Indemnified Party, Borrower shall defend same (if requested by any Indemnified Party, in the name of the Indemnified Party) by attorneys and other professionals reasonably approved by the Indemnified Parties.
ARTICLE 10     
SPECIAL PROVISIONS
Section 10.1.    Transfer of Loan.  Lender may, at any time, sell, transfer or assign, in whole or in part, this Agreement, the Note, and the other Loan Documents, and any or all servicing rights with respect thereto, or grant participations therein or issue mortgage pass-through certificates or other securities (the “Securities”) evidencing a beneficial interest in a rated or unrated public offering or private placement (such sales, participation, offering and/or placement, collectively, a “Securitization”).  Lender may forward to each purchaser, transferee, assignee, servicer, participant or investor in such participations or Securities (collectively, the “Investor”) or any Rating Agency rating such Securities, each prospective Investor, and any organization maintaining databases on the underwriting and performance of commercial mortgage loans, all documents and information which Lender now has or may hereafter acquire relating to the Loan or to Borrower, any Guarantor or the Property, whether furnished by Borrower, any Guarantor or otherwise, as Lender determines necessary or desirable, including, without limitation, financial statements relating to Borrower, Guarantor, the Property and any tenant at the Property.  Borrower irrevocably waives any and all rights it may have under law or in equity to prohibit such disclosure, including but not limited to any right of privacy.
Section 10.2.    Cooperation.  Borrower and Guarantor agree to cooperate with Lender (and agree to cause their respective officers and representatives to cooperate) in connection with any transfer made or any Securities created pursuant to this Article 10, including, without limitation, the taking, or refraining from taking, of such action as may be reasonably necessary to satisfy all of the conditions of any Investor, the delivery any reasonable documents as may be reasonably requested by Lender (provided, however, that Guarantor is not obligated to provide any documents other than what has been provided to Lender with respect to Guarantor in connection with the Loan and any ongoing financial reporting requirements set forth in Section 5.3 hereof), and the execution of reasonable amendments to this Agreement, the Note and the other Loan Documents and Borrower’s organizational documents as reasonably requested by Lender; provided that the 

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reasonable costs incurred for such cooperation shall be paid by Lender and no changes to the Loan Documents shall be required which will have a material adverse economic impact on Borrower or Guarantor.  Borrower shall also furnish and Borrower and Guarantor consent to Lender furnishing to such Investors or prospective Investors or any Rating Agency any and all information concerning the Property, the Leases, the financial condition of Borrower and Guarantor (but only to the extent of the information regarding Guarantor as required hereunder) as may be requested by Lender, any Investor, any prospective Investor or any Rating Agency in connection with any sale, transfer or participations or Securities and shall indemnify the Indemnified Parties against, and hold the Indemnified Parties harmless from, any losses, claims, damages or liabilities (collectively, the “Liabilities”) to which any such Indemnified Parties may become subject insofar as the Liabilities arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in a Disclosure Document or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated in the Disclosure Document or necessary in order to make the statements in the Disclosure Document, in light of the circumstances under which they were made, not misleading and agreeing to reimburse the Indemnified Parties for any legal or other expenses reasonably incurred by each of them in connection with investigating or defending the Liabilities; provided, however, that Borrower will be liable in any such case under this Section 10.2 only to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or omission made therein in reliance upon and in conformity with information furnished to Lender by or on behalf of Borrower in connection with the preparation of the Disclosure Document or in connection with the underwriting or closing of the Loan, including, without limitation, financial statements of Borrower, operating statements and rent rolls with respect to the Property.  This indemnity agreement will be in addition to any liability which Borrower may otherwise have and shall survive the termination of the Loan Documents.
Section 10.3.    Servicer.  At the option of Lender, the Loan may be serviced by a master servicer, primary servicer, special servicer and/or trustee (any such master servicer, primary servicer, special servicer, and trustee, together with its agents, nominees or designees, are collectively referred to as “Servicer”) selected by Lender and Lender may delegate all or any portion of its responsibilities under this Agreement and the other Loan Documents to Servicer pursuant to a pooling and servicing agreement, servicing agreement, special servicing agreement or other agreement providing for the servicing of one or more mortgage loans (collectively, the “Servicing Agreement”) between Lender and Servicer.  Borrower shall be responsible for any reasonable set up fees or any other reasonable initial costs relating to or arising under the Servicing Agreement, but Borrower shall not be responsible for payment of the regular monthly master servicing fee or trustee fee due to Servicer under the Servicing Agreement or any fees or expenses required to be borne by, and not reimbursable to, Servicer.  Notwithstanding the foregoing, Borrower shall promptly reimburse Lender on demand for (a) interest payable on advances made by Servicer with respect to delinquent debt service payments (to the extent interest at the Default Rate actually paid by Borrower in respect of such payments are insufficient to pay the same) or expenses paid by Servicer or trustee in respect of the protection and preservation of the Property, (b) all costs and expenses, liquidation fees, workout fees, special servicing fees, operating advisor fees or any other similar fees payable by Lender to Servicer which may be due and payable under the Servicing Agreement (whether on a periodic or a continuing basis) as a result of an Event of Default under the Loan, the Loan becoming specially serviced, the commencement or continuance of any enforcement action of any kind with respect to 

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the Loan or any of the Loan Documents, a refinancing or a restructuring of the credit arrangements provided under this Agreement in the nature of a “work-out” of the Loan Documents, or any bankruptcy, insolvency or liquidation action involving Borrower, Guarantor or any of their respective principals or Affiliates excluding Lender Actions unless arising because of an Event of Default, (c) all costs and expenses of any Property inspections and/or appraisals (or any updates to any existing inspection or appraisal) that Servicer or the trustee may be required to obtain (other than the cost of regular annual inspections required to be borne by Servicer under the Servicing Agreement) as a result of an Event of Default unless arising because of an Event of Default, and (d) all reasonable costs and expenses relating to or arising from any special requests made by Borrower or Guarantor during the term of the Loan including, without limitation, in connection with a prepayment, assumption or modification of the Loan.
Section 10.4.    Restructuring of Loan.
(a)    Lender, without in any way limiting Lender’s other rights hereunder, in its sole and absolute discretion, shall have the right at any time to require Borrower to restructure the Loan into additional multiple notes (which may include component notes and/or senior and junior notes), to re-allocate principal among component notes and/or senior and junior notes and/or to create participation interests in the Loan, or the establishment of different interest rates and debt service payments for the Loan, in such order of priority as may be designated by Lender; provided that (i) the total principal amounts of the Loan (including any component notes), shall equal the total principal amount of the Loan immediately prior to the restructuring, (ii) except in the case of the occurrence of an Event of Default or a default beyond all notice and cure periods, or of a Casualty or Condemnation that results in the payment of principal under the Loan, the weighted average interest rate of the restructured Loan shall, in the aggregate, equal the Interest Rate, and (iii) except in the case of the occurrence of an Event of Default and/or a default beyond all notice and cure periods, or of a Casualty or Taking that results in the payment of principal under the Loan, the aggregate debt service payments on the restructured Loan shall equal the aggregate debt service payments which would have been payable under the Loan had the restructuring not occurred.
(b)    Borrower shall cooperate, at no cost to Borrower, with all reasonable requests of Lender in order to restructure the Note and the Loan and shall, upon seven (7) Business Days written notice from Lender, which notice shall include the forms of documents for which Lender is requesting execution and delivery, execute and deliver such documents in form reasonably acceptable to Borrower and Guarantor, as shall be reasonably required by Lender and required by any Rating Agency in connection therewith, all in form and substance reasonably satisfactory to Lender and Borrower and Guarantor, including, without limitation, the severance of this Agreement and the other Loan Documents if requested; provided, however, that any such amendments required by Lender shall not result in any economic or other material adverse change in the transaction contemplated by this Agreement or the other Loan Documents.
(c)    Except as may be required in connection with a Securitization pursuant to Section 10.1, Borrower shall not be obligated to pay any costs or expenses incurred in connection with any such restructuring as set forth in this Section 10.4.  All reasonable costs incurred by Borrower shall be paid by Lender.

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(d)    In the event Borrower fails to execute and deliver such documents described in this Section 10.4 to Lender within fifteen (15) Business Days following such written notice by Lender, and Lender sends a second notice to Borrower with respect to the delivery of such documents containing a legend clearly marked in not less than fourteen (14) point bold face type, underlined, in all capital letters “POWER OF ATTORNEY IN FAVOR OF LENDER DEEMED EFFECTIVE FOR EXECUTION AND DELIVERY OF DOCUMENTS IF NO RESPONSE WITHIN 10 BUSINESS DAYS”, Borrower hereby absolutely and irrevocably appoints Lender as its true and lawful attorney, coupled with an interest, in its name and stead to make and execute all documents necessary or desirable to effect such transactions, Borrower ratifying all that such attorney shall do by virtue thereof, if Borrower fails to execute and deliver such documents within ten (10) Business Days of receipt of such second notice.
Section 10.5.    Lender Register.  Borrower hereby designates Lender or its designee (the “Registrar”) to serve as Borrower’s agent, solely for purposes of this Section 10.5, to maintain, at one of Registrar’s offices, a register for the recordation of the names and addresses of Lender, and the principal amount and stated interest thereon of the Loan (or portions thereof) owing to Lender pursuant to the terms hereof from time to time (the “Register”).  Borrower shall at all times treat the Person or Persons in whose name the Loan and the Note is registered (the “Registered Lender”) as the owner thereof for the purpose of receiving all payments thereon and for all other purposes.  As of the date hereof, READYCAP COMMERCIAL, LLC is the Registered Lender.  The Registrar shall, upon delivery of a notice executed by the then Registered Lender that the Loan and Note (or portion thereof) has been transferred to a transferee, promptly provide Borrower with a copy of such notice and record such transferee in the Register as a Registered Lender.  Failure to make any such recordation, or any error in such recordation, shall not affect Borrower’s obligations in respect of the Loan.  Such Register shall be available for inspection by Borrower, at any reasonable time and from time to time upon Borrower’s reasonable prior notice.  Nothing set forth in this Section 10.5 shall decrease Borrower’s rights or increase Borrower’s liabilities under this Agreement, the Note or any other Loan Documents.  The Registrar shall not be entitled to any fee from Borrower or Lender or any other lender in respect of transfers of the Note and other Loan Documents.  The rights evidenced by the Note to receive principal and interest may only be transferred if the transfer is registered on the Register pursuant to this Section 10.5.
Section 10.6.    Participant Register.  If Lender sells a participation, Lender shall, acting solely for this purpose as an agent of Borrower, maintain a register on which it enters the name and address of each participant and the principal amounts (and stated interest) of each participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that Lender shall have no 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, or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, 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. 

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ARTICLE 11     
MISCELLANEOUS
Section 11.1.    Survival.  This Agreement and all covenants, agreements, representations and warranties made herein and in the certificates delivered pursuant hereto shall survive the execution and delivery of this Agreement and the execution and delivery by Borrower to Lender of the Note, and shall continue in full force and effect so long as any portion of the Indebtedness is outstanding and unpaid; provided, however, that the representations, warranties and covenants set forth in Sections 4.19 and 9.1 shall survive in perpetuity.  Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the successors and assigns of such party.  All covenants, promises and agreements in this Agreement contained, by or on behalf of Borrower, shall inure to the benefit of the respective successors and assigns of Lender.  Nothing in this Agreement or in any other Loan Document, express or implied, shall give to any Person other than the parties and the holder(s) of the Note, the Security Instrument and the other Loan Documents, and their legal representatives, successors and assigns, any benefit or any legal or equitable right, remedy or claim hereunder.
Section 11.2.    Lender’s Discretion.  Whenever pursuant to this Agreement or any other Loan Document, Lender exercises any right, option or election given to Lender to approve or disapprove, or consent or withhold consent, or any arrangement or term is to be satisfactory to Lender or is to be in Lender’s discretion, the decision of Lender to approve or disapprove, consent or withhold consent, or to decide whether arrangements or terms are satisfactory or not satisfactory or acceptable or not acceptable to Lender in Lender’s discretion, shall (except as is otherwise specifically herein provided) be in the sole and absolute discretion of Lender.
Section 11.3.    Governing Law; Submission to Jurisdiction.
(a)    This Agreement shall be interpreted and enforced according to the laws of the State where the Property is located (without giving effect to rules regarding conflict of laws).
(b)    Borrower hereby consents and submits to the exclusive jurisdiction and venue of any state or federal court sitting in the county and state where the Property is located with respect to any legal action or proceeding arising with respect to this Agreement and waives all objections which it may have to such jurisdiction and venue.  
Section 11.4.    Modification, Waiver in Writing.  No modification, amendment, extension, discharge, termination or waiver of any provision of this Agreement, the Note or any other Loan Document, or consent to any departure by Borrower therefrom, shall in any event be effective unless the same shall be in a writing signed by the party against whom enforcement is sought, and then such waiver or consent shall be effective only in the specific instance, and for the purpose, for which given, provided, however, that from time-to-time only with respect to: (a) any such waivers and/or approvals of proposed re-allocations of the Reserve Funds as set forth in Section 3.8(c) hereof, or (b) notices of the existence of an Event of Default in connection with any of the disbursement conditions for the disbursement of any of the Reserve Funds pursuant to Article 3 hereof, can be provided by Lender via e-mail (i.e., no modifications, amendments, extensions, discharges or terminations of any provision of this Agreement, the Note or any other Loan Document shall be 

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provided by Lender via e-mail). Except as otherwise expressly provided herein, no notice to or demand on Borrower shall entitle Borrower to any other or future notice or demand in the same, similar or other circumstances. In addition, Lender shall be entitled (but not be obligated) to extend the time periods within which any post-closing obligations set forth in any side-letters executed and delivered by Borrower in favor of Lender on the Closing Date, are required to be completed for such additional period or periods of times as Lender may reasonably determine.
Section 11.5.    Delay Not a Waiver.  Neither any failure nor any delay on the part of Lender in insisting upon strict performance of any term, condition, covenant or agreement, or exercising any right, power, remedy or privilege under any Loan Document, or any other instrument given as security therefor, shall operate as or constitute a waiver thereof, nor shall a single or partial exercise thereof preclude any other future exercise, or the exercise of any other right, power, remedy or privilege.  In particular, and not by way of limitation, by accepting payment after the due date of any amount payable under any Loan Document, Lender shall not be deemed to have waived any right either to require prompt payment when due of all other amounts due under any Loan Document, or to declare a default for failure to effect prompt payment of any such other amount.
Section 11.6.    Notices.  All notices, consents, approvals and requests required or permitted hereunder or under any other Loan Document shall be given in writing and shall be effective for all purposes if hand delivered or sent by (a) hand delivery, with proof of attempted delivery, (b) certified or registered United States mail, postage prepaid, or (c) expedited prepaid delivery service, either commercial or United States Postal Service, with proof of attempted delivery, addressed to the parties as follows:

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If to Lender:    Ready Capital Structured Finance
1320 Greenway Drive, Suite 560
Irving, Texas 75038
Attention: Dawnyel Dishman 
    
with a copy to:    Holland & Knight LLP
31 West 52nd Street, 12th Floor
New York, New York 10019
Attention: Paul W. Cicchetti, Esq. 
    
If to Borrower:    3032 Wilshire Investors LLC
c/o Cadence Capital Investments LLC
6400 S. Fiddlers Green Circle, Suite 1820
Greenwood Village, Colorado  80111
Attention: David B. Runberg
    
with a copy to:    3032 Wilshire Investors LLC
c/o Cadence Capital Investments LLC
6400 S. Fiddlers Green Circle, Suite 1820
Greenwood Village, Colorado  80111
Attention:  Drew Willock, Esq.

		
	with a copy to:
	Brownstein Hyatt Farber Schreck, LLP

410 Seventeenth Street, Suite 2200
Denver, Colorado 80202
Attention:  Jennifer Eiteljorg, Esq.

		
	with a further copy to:
	Strategic Realty Trust, Inc.

c/o Glenborough, LLC
66 Bovet Road, Suite 100
San Mateo, California 94402
Attention:    Chip Burns     

A party receiving a notice which does not comply with the technical requirements for notice under this Section 11.6 may elect to waive any deficiencies and treat the notice as having been properly given.  A notice shall be deemed to have been given:  (a) in the case of hand delivery, at the time of delivery; (b) in the case of registered or certified mail, when delivered or the first attempted delivery on a Business Day; or (c) in the case of expedited prepaid delivery upon the first attempted delivery on a Business Day.
Section 11.7.    Trial By Jury.  BORROWER AND LENDER, TO THE FULLEST EXTENT THAT THEY MAY LAWFULLY DO SO, HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY TORT ACTION, BROUGHT BY ANY PARTY HERETO WITH RESPECT TO THIS AGREEMENT, THE NOTE OR THE OTHER LOAN DOCUMENTS.

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Section 11.8.    Headings.  The Article and Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.
Section 11.9.    Severability.  Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.
Section 11.10.    Preferences.  Lender shall have the continuing and exclusive right to apply or reverse and reapply any and all payments by Borrower to any portion of the obligations of Borrower hereunder.  To the extent Borrower makes a payment or payments to Lender for Borrower’s benefit, which payment or proceeds or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, state or federal law, common law or equitable cause, then, to the extent of such payment or proceeds received, the obligations hereunder or part thereof intended to be satisfied shall be revived and continue in full force and effect, as if such payment or proceeds had not been received by Lender.
Section 11.11.    Waiver of Notice.  Borrower shall not be entitled to any notices of any nature whatsoever from Lender except with respect to matters for which this Agreement or the other Loan Documents specifically and expressly provide for the giving of notice by Lender to Borrower and except with respect to matters for which Borrower is not, pursuant to applicable Legal Requirements, permitted to waive the giving of notice.  Borrower hereby expressly waives the right to receive any notice from Lender with respect to any matter for which this Agreement or the other Loan Documents does not specifically and expressly provide for the giving of notice by Lender to Borrower.
Section 11.12.    Remedies of Borrower.  In the event that a claim or adjudication is made that Lender or its agents, has acted unreasonably or unreasonably delayed acting in any case where by law or under any Loan Document, Lender or such agent, as the case may be, has an obligation to act reasonably or promptly, Borrower agrees that neither Lender nor its agents, shall be liable for any monetary damages, and Borrower’s sole remedies shall be limited to commencing an action seeking injunctive relief or declaratory judgment.  The parties hereto agree that any action or proceeding to determine whether Lender has acted reasonably shall be determined by an action seeking declaratory judgment.
Section 11.13.    Exhibits Incorporated.  The information set forth on the cover, heading and recitals hereof, and the Exhibits attached hereto, are hereby incorporated herein as a part of this Agreement with the same effect as if set forth in the body hereof.
Section 11.14.    Offsets, Counterclaims and Defenses.  Any assignee of Lender’s interest in and to the Loan Documents shall take the same free and clear of all offsets, counterclaims or defenses which are unrelated to the Loan, and the Loan Documents which Borrower may otherwise have against any assignor, and no such unrelated counterclaim or defense shall be interposed or asserted by Borrower in any action or proceeding brought by any such assignee upon, the Loan 

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Documents and any such right to interpose or assert any such unrelated offset, counterclaim or defense in any such action or proceeding is hereby expressly waived by Borrower.
Section 11.15.    No Joint Venture or Partnership.  Borrower and Lender intend that the relationship created hereunder be solely that of borrower and lender.  Nothing herein is intended to create a joint venture, partnership, tenancy-in-common, or joint tenancy relationship between any of Borrower, Manager, any contractor or Governmental Authority and Lender nor to grant Lender any interest in the Property other than that of mortgagee or lender.
Section 11.16.    Waiver of Marshalling of Assets Defense.  To the fullest extent that Borrower may legally do so, Borrower waives all rights to a marshalling of the assets of Borrower, and of the Property, or to a sale in inverse order of alienation in the event of foreclosure of the interests hereby created, and agrees not to assert any right under any laws pertaining to the marshalling of assets, the sale in inverse order of alienation, homestead exemption, the administration of estates of decedents, or any other matters whatsoever to defeat, reduce or affect the right of Lender under the Loan Documents to a sale of the Property for the collection of the Indebtedness without any prior or different resort for collection, or the right of Lender or any trustee under the Security Instrument to the payment of the Indebtedness in preference to every other claimant whatsoever.
Section 11.17.    Waiver of Counterclaim.  Borrower hereby waives the right to assert a counterclaim, other than compulsory counterclaim, in any action or proceeding brought against Borrower by Lender or Lender’s agents.
Section 11.18.    Construction of Documents.  The parties hereto acknowledge that they were represented by counsel in connection with the negotiation and drafting of the Loan Documents and that the Loan Documents shall not be subject to the principle of construing their meaning against the party which drafted same.
Section 11.19.    Brokers and Financial Advisors.  Borrower and Lender hereby represent that they have dealt with no financial advisors, brokers, underwriters, placement agents, agents or finders in connection with the transactions contemplated by this Agreement except as disclosed to Lender.  Borrower hereby agrees to indemnify and hold Lender harmless from and against any and all Losses relating to or arising from a claim by any Person that such Person acted on behalf of Borrower in connection with the transactions contemplated herein.  If Borrower has dealt with one or more of foregoing described Persons, Borrower acknowledges and agrees that such Persons may receive additional compensation and/or fees from Lender.  The provisions of this Section 11.19 shall survive the expiration and termination of this Agreement and the repayment of the Indebtedness.
Section 11.20.    Counterparts.  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 together constitute one and the same instrument.
Section 11.21.    Estoppel Certificates.  Borrower and Lender each hereby agree at any time and from time to time, but in no event more than one time per calendar quarter, upon not less than 

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fifteen (15) days prior written notice by Borrower or Lender to execute, acknowledge and deliver to the party specified in such notice, a statement, in writing, certifying that this Agreement is unmodified and in full force and effect (or if there have been modifications, that the same, as modified, is in full force and effect and stating the modifications hereto), and stating whether or not, to the knowledge of such certifying party, any Event of Default has occurred, and, if so, specifying each such Event of Default.
Section 11.22.    Bankruptcy Waiver.  Borrower hereby agrees that, in consideration of the recitals and mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, if Borrower (a) files with any bankruptcy court of competent jurisdiction or be the subject of any petition under Title 11 of the U.S. Code, as amended, (b) is the subject of any order for relief issued under Title 11 of the U.S. Code, as amended, unless related to Lender Action not filed in connection with an Event of Default by Borrower, (c) files or is the subject of any petition seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or law relating to bankruptcy, insolvency or other relief of debtors, unless related to Lender Action not filed in connection with an Event of Default by Borrower, (d) has sought or consents to or acquiesces in the appointment of any trustee, receiver, conservator or liquidator, unless related to Lender Action not filed in connection with an Event of Default by Borrower, or (e) is the subject of any order, judgment or decree entered by any court of competent jurisdiction approving a petition filed against such party for any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future federal or state act or law relating to bankruptcy, insolvency or other relief for debtors, unless related to Lender Action not filed in connection with an Event of Default by Borrower, the automatic stay provided by the U.S. Bankruptcy Code shall be modified and annulled as to Lender, so as to permit Lender to exercise any and all of its rights and remedies, upon request of Lender made on notice to Borrower and any other party in interest but without the need of further proof or hearing.  Neither Borrower nor any Affiliate of Borrower shall contest the enforceability of this Section 11.22.
Section 11.23.    Entire Agreement.  THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS EVIDENCING, SECURING OR PERTAINING TO ALL OR ANY PORTION OF THE LOAN REPRESENT THE FINAL AGREEMENT BETWEEN BORROWER AND LENDER AS TO THE SUBJECT MATTER THEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF SUCH PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN SUCH PARTIES.
Section 11.24.    Liability and Indemnification.
(a)    Lender shall not be liable for any loss sustained by Borrower resulting from any act or omission of any Indemnified Party unless it is finally judicially determined that such loss was solely caused by the fraud, gross negligence or willful misconduct of Lender or any Indemnified Party. Lender shall not be obligated to perform or discharge any obligation, duty or liability with respect to the ownership, operation and/or maintenance of the Property (including under any Lease, Contract or Permit) or under or by reason of any Loan Document.  Unless and until Lender becomes 

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the fee owner of the Property following an Event of Default, the Loan Documents shall not place responsibility for the control, care, management or repair of the Property upon Lender, nor for complying with any Lease, Contract or Permit; nor shall it make Lender responsible or liable for any waste committed on the Property, or for any dangerous or defective condition of the Property, or for any negligence in the management, upkeep, repair or control of the Property resulting in loss or injury or death to any tenant, licensee, guest, employee or stranger.
(b)    Borrower shall indemnify and hold the Indemnified Parties harmless against any and all Losses, and reimburse them for any costs and expenses actually incurred, in connection with, arising out of or as a result of (i) the negotiation, preparation, execution and delivery of the Loan Documents and the documents and instruments referred to therein, (ii) the creation, perfection or protection of Lender’s Liens in the Property (including fees and expenses for title and lien searches and filing and recording fees, intangibles taxes, personal property taxes, mortgage recording taxes, due diligence expenses, travel expenses, accounting firm fees, costs of the appraisal, environmental report(s) (and an environmental consultant), surveys and the engineering report(s) obtained by or delivered to Lender in connection with the Loan, (iii) the negotiation, preparation, execution and delivery of any amendment, waiver or consent relating to any of the Loan Documents, (iv) the exercise of any of Lender’s or the Indemnified Parties’ remedies under any Loan Document, or (v) any alleged obligations or undertakings to perform or discharge any obligation, duty or liability with respect to the ownership, operation and/or maintenance of the Property (including under any Lease, Contract or Permit), except to the extent that it is finally judicially determined that any such Loss resulted directly and solely from the fraud, gross negligence or willful misconduct of such Indemnified Party.  If any Indemnified Party becomes involved in any action, proceeding or investigation in connection with any matter described in clauses (i) through (v) above, Borrower shall periodically reimburse any Indemnified Party upon demand therefor in an amount equal to its reasonable legal and other expenses (including the costs of any investigation and preparation) incurred in connection therewith to the extent such legal or other expenses are the subject of indemnification hereunder.
Section 11.25.    Publicity.  Lender shall have the right to issue press releases, advertisements and other promotional materials describing the Loan (including the amount and purpose of the Loan) and Lender’s participation in the origination of the Loan. All news releases, publicity or advertising by Borrower or their Affiliates through any media intended to reach the general public which refers to the Loan Documents or the financing evidenced by the Loan Documents, to Lender or any of its Affiliates shall be subject to the prior approval of Lender, except for disclosures required by law which shall not require Lender approval but which shall require prior notice to Lender.
Section 11.26.    Time of the Essence.  Time shall be of the essence in the performance of all obligations of Borrower hereunder and under each of the other Loan Documents.
Section 11.27.    Taxes.  All payments made under the Loan Documents shall be made free and clear of, and without deduction or withholding for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, and all liabilities with respect thereto, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority.  If Borrower is required by law to deduct any of the foregoing from 

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any sum payable under the Loan Document, such sum shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 11.27), Lender receives an amount equal to the sum Lender would have received had no such deductions been made.  In the event of the passage of any Legal Requirement subsequent to the date hereof in any manner changing or modifying Legal Requirements now in force governing the taxation of mortgages or security agreements or debts secured thereby or the manner of collecting such taxes so as to adversely affect Lender or the Lien of the Loan Documents, Borrower will pay any such tax on or before the due date thereof.  In the event Borrower is prohibited by Legal Requirements from assuming liability for payment of any such taxes (or if any Legal Requirement would penalize Lender if Borrower makes such payment or if, in the reasonable opinion of Lender, the making of such payment might result in the imposition of interest beyond the Maximum Amount) or from paying any other Imposition, the outstanding Indebtedness shall, at the option of Lender, become due and payable on the date that is one hundred twenty (120) days after Lender provides notice to Borrower of such change in law and its election to accelerate the Maturity Date; and failure to pay such amounts on the date due shall be an Event of Default.
Section 11.28.    Further Assurances; Loan Servicing.  
(a)    Borrower shall execute and deliver to Lender such documents, instruments, certificates, assignments and other writings, and do such other acts necessary, to (i) evidence, preserve and/or protect the Property at any time securing or intended to secure the Indebtedness, and/or (ii) enable Lender to perfect, exercise and enforce Lender’s rights and remedies under any Loan Document, as Lender shall require from time to time in its discretion.
(b)    Borrower shall also, in connection with any loan servicing matters arising as a result of Borrower’s request hereunder subsequent to the Closing Date, reimburse Lender for any reasonable out‐of‐pocket expenses (including reasonable attorneys’ fees and disbursements) incurred by Lender in connection therewith.
Section 11.29.    Permanent Financing. In the event that Lender (or an Affiliate of Lender) in its sole and absolute discretion provides permanent mortgage financing for the Loan on or before the Maturity Date, the Exit Fee shall be waived by Lender. 

[Signatures on the following pages]

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IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to be duly executed by their duly authorized representatives, all as of the day and year first above written.
LENDER:
READYCAP COMMERCIAL, LLC,
a Delaware limited liability company

By:    
Name: Dominick Scali
Title:  Authorized Signatory
[Signatures continued on following page]

                                                            BORROWER:
3032 WILSHIRE INVESTORS LLC, 
a Colorado limited liability company

By:          3032 Wilshire SM LLC,
                a Colorado limited liability company,
                its Manager

                By:                                                                          
                Name:  William R. Rothacker
                Title:    Manager

Schedule 1
Leasing Guidelines
For purposes of Section 5.6 of the Loan Agreement and the defined term “Approved Lease,” any Lease that complies with all of the following conditions shall be deemed to be an “Approved Lease:”
		
	(i)
	the Lease is on the Approved Lease Form, without material modification;

		
	(ii)
	the Lease contains terms which fall within the guidelines listed below:

	
							
	Space Category
	Min. Lease Term (excluding options to extend or renew)
	Maximum Demised Premises under Lease
	Minimum Rent
	Maximum Free Rent
	Maximum Tenant Improvements
	Maximum Leasing Commissions

	Retail Wilshire Frontage
	7-Years
	NAP
	$113.50/SF NNN
	6-Months
	$55/SF
	6%

	Retail Berkeley Frontage
	7-Years
	NAP
	$98/SF NNN
	6-Months
	$55/SF
	6%

	Second Floor Retail
	7-Years
	NAP
	$80/SF NNN
	6-Months
	$55/SF
	6%

		
	(iii)
	the initial Lease term is no more than ten (10) years;

		
	(iv)
	the other terms of the Lease (including any other concessions) are consistent with market conditions and with the Approved Annual Budget; and

		
	(v)
	the Lease is a bona fide, arm's-length transaction with a person or entity not affiliated with Borrower.

For avoidance of doubt, any Lease that was entered into prior to the Closing Date shall also be deemed an Approved Lease.

SCHEDULE 1

Schedule 2
Loan Documents
		
	(a)
	Promissory Note made by Borrower in favor of Lender in the maximum principal amount of the Loan Amount (the “Note”);

		
	(b)
	Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing by Borrower, as grantor, for the benefit of Lender, as beneficiary (the “Security Instrument”);

		
	(c)
	Assignment of Leases and Rents from Borrower to Lender (the “Assignment of Leases”);

		
	(d)
	Environmental Indemnity Agreement made by Borrower and the Rothacker Guarantor in favor of Lender;

		
	(e)
	Guaranty of Recourse Obligations made by the Rothacker Guarantor in favor of Lender (the “Rothacker Guaranty of Recourse Obligations”);

		
	(f)
	Guaranty of Recourse Obligations made by the SRT Guarantor in favor of Lender (the “SRT Guaranty of Recourse Obligations;” and together with the “Rothacker Guaranty of Recourse Obligations,” collectively, the “Guaranty of Recourse Obligations);

		
	(g)
	Completion Guaranty made by the Rothacker Guarantor in favor of Lender;

		
	(h)
	Interest Reserve Replenishment Guaranty made by the SRT Guarantor in favor of Lender (the “Interest Reserve Replenishment Guaranty”);

		
	(i)
	Deposit Account Control Agreement among Borrower, the Account Bank and Lender; 

		
	(j)
	Assignment And Subordination of Property Management Agreement from Borrower and Manager in favor of Lender;

		
	(k)
	Borrower’s Certification with respect to Borrower made by Borrower to Lender; 

		
	(l)
	Guarantor’s Certification with respect to the Rothacker Guarantor made by the Rothacker Guarantor to Lender;

		
	(m)
	Guarantor’s Certification with respect to the SRT Guarantor made by the SRT Guarantor to Lender;

		
	(n)
	Borrower’s Recycled Entity Certification; and

		
	(o)
	Side Letter Regarding Post Closing Obligations

SCHEDULE 2

Schedule 3
Approved Annual Budget
[see attached]

SCHEDULE 3

Schedule 4
Approved Capital Expenditures Budget
[see attached]

SCHEDULE 4

Schedule 5
Rent Roll
[see attached]

SCHEDULE 5

Schedule 6
List of Environmental Reports

		
	1.
	Phase I Environmental Assessment Report, dated February 19, 2019, prepared by EBI Consulting, Inc., as EBI Project No. 1119000638.

SCHEDULE 6

EXHIBIT A-1
Borrower Compliance Certificate
This Compliance Certificate is prepared pursuant to that certain Loan Agreement  (the “Agreement”), dated as of ________, by 3032 WILSHIRE INVESTORS LLC, a Colorado_ limited liability company (the “Borrower”) in favor of ReadyCap Commercial, LLC, for the month ended ____________________ (the “Period”).
The undersigned, [the chief financial officer] of Borrower, pursuant to the Agreement, does hereby certify to Lender, on behalf of Borrower and not in an individual capacity, as follows: (All capitalized terms used herein shall, unless otherwise specified, have the meanings ascribed in the Agreement.)
1.NO DEFAULTS.    No event of default has occurred and is continuing under the Agreement. The financial statements delivered in connection with this Certificate for the Period, a copy of which are annexed hereto, are accurate and complete in all material respects and fairly represent the financial conditions of  Borrower as of the above date (if not, explain).
2.    COMPLIANCE.    
(a)    Borrower has complied, and is in compliance, with all of the terms, covenants and provisions of the Agreement (if not, explain).
(b)    The Rothacker Guarantor has complied, and is in compliance, with the Net Worth and Liquidity Requirements (if not, explain).

            
SIGNATURE:        DATE:
TITLE:

EXHIBIT A-1

EXHIBIT A-2
SRT Guarantor Compliance Certificate
This Compliance Certificate is prepared pursuant to that certain Loan Agreement  (the “Agreement”), dated as of ________, by 3032 WILSHIRE INVESTORS LLC, a Colorado_ limited liability company (the “Borrower”) in favor of ReadyCap Commercial, LLC, for the month ended ____________________ (the “Period”).
The undersigned, [the chief financial officer] of the SRT Guarantor, pursuant to the Agreement, does hereby certify to Lender, on behalf of the SRT Guarantor and not in an individual capacity, as follows: (All capitalized terms used herein shall, unless otherwise specified, have the meanings ascribed in the Agreement.)
3.    NO DEFAULTS.    No event of default has occurred and is continuing under the SRT Guaranty of Recourse Obligations and the Interest Replenishment Guaranty. The financial statements delivered in connection with this Certificate for the Period, a copy of which are annexed hereto, are accurate and complete in all material respects and fairly represent the financial conditions of  Borrower as of the above date (if not, explain).
4.    COMPLIANCE.    
(a)    The SRT Guarantor has complied, and is in compliance, with all of the terms, covenants and provisions of the SRT Guaranty of Recourse Obligations and the Interest Replenishment Guaranty (if not, explain).
(b)    The SRT Guarantor has complied, and is in compliance, with the Net Worth and Liquidity Requirements (if not, explain).

            
SIGNATURE:        DATE:
TITLE:

EXHIBIT A-2

EXHIBIT B
Deposit Account Information
Account Information:
Beneficiary:  3032 Wilshire Investors LLC LB FBO ReadyCap Commercial LLC
Its successors and assigns as Lender
Account Number:  329681305424
Routing Number: 021300077

Lockbox Mailing Address
3032 Wilshire Investors LLC
PO BOX 714993
CINCINNATI, OH 45271-4993
 
Lockbox Overnight Address (Only)
Attn: Wholesale Lockbox # (714993)
3032 Wilshire Investors LLC
895 Central Ave, Suite 600
Cincinnati, OH 45202    

EXHIBIT B

EXHIBIT C
Disbursement Conditions

The following are the applicable disbursement conditions that must be satisfied in connection with the disbursements of each of the Reserve Funds specified below:

For Interest Reserve Funds

1.    The Stabilization Threshold has not occurred.

2.    Net Operating Income is insufficient to pay Interest (as determined by Lender on a quarterly basis). 

3.    No Event of Default exists, other than a non-monetary Event of Default (including, but not limited to, the failure of Borrower or either Guarantor to comply with any of the reporting requirements set forth in Section 5.5 hereof) beyond any applicable notice and cure periods and for which Lender has not previously furnished Borrower with written notice (it being the intention of the Parties that such a non-monetary Event of Default, as aforesaid, shall not prohibit the funding of a Draw Request as long as all of the other applicable Disbursement Conditions have been satisfied).
For Operating Expense Reserve Funds

1.    The Stabilization Threshold has not occurred.

2.    Operating Income is insufficient to pay the same (as determined by Lender on a quarterly basis).
3.    No Event of Default exists, other than a non-monetary Event of Default (including, but not limited to, the failure of Borrower or either Guarantor to comply with any of the reporting requirements set forth in Section 5.5 hereof) beyond any applicable notice and cure periods and for which Lender has not previously furnished Borrower with written notice (it being the intention of the Parties that such a non-monetary Event of Default, as aforesaid, shall not prohibit the funding of a Draw Request as long as all of the other applicable Disbursement Conditions have been satisfied).
4.    The disbursement shall be in accordance with the Approved Annual Budget or otherwise approved by Lender.
For Capital Expenditures Reserve Funds

1.    No Event of Default exists, other than a non-monetary Event of Default (including, but not limited to, the failure of Borrower or either Guarantor to comply with any of the reporting requirements set forth in Section 5.5 hereof) beyond any applicable notice and cure periods and for which Lender has not previously furnished Borrower with written notice (it being the intention of 

EXHIBIT C

the Parties that such a non-monetary Event of Default, as aforesaid, shall not prohibit the funding of a Draw Request as long as all of the other applicable Disbursement Conditions have been satisfied).
2.    The disbursement shall be in accordance with the Approved Capital Expenditures Budget, or otherwise approved by Lender.
3.    For the initial disbursement of Hard Costs Reserve Funds (but only if and as required by Lender), Borrower shall have also provided Lender with a copy of the executed general construction contract (and a W-9 for such general contractor), as and if applicable, for such Capital Expenditures, which general construction contract (and the general contractor thereunder) shall be reasonably acceptable to Lender. Notwithstanding the foregoing, Lender may request copies of a contract from a subcontractor in connection with a Draw Request if there are change orders that Lender would need to confirm, there is a Lien on the Property from a subcontractor and/or if there is particular or specific issue that Lender has at such time with respect to a particular subcontractor.   
4.    For the initial disbursement of Hard Cost Reserve Funds (but only if and as required by Lender) for Capital Expenditures involving “demolition costs,” Borrower shall have also provided Lender with a copy of the executed demolition contract (and W-9’s for the demolition contractor) for such Capital Expenditures, which demolition contract, if not a part of the general construction contract (and the demolition contractor thereunder) shall be reasonably acceptable to Lender.
4.    Borrower shall have delivered copies of the applicable bills, invoices (for amount in excess of $10,000.00) and other documentation reasonably required by Lender (including with respect to any cost for labor or materials furnished to the Property in excess of $50,000 for contracts entered into by Borrower, or otherwise for which the payment of the proceeds of the Draw Request are intended to be used, sworn lien waivers from any Person providing such labor or materials, as well as proof of payment for prior Draw Requests or prior reimbursements, budget trackers and change orders (in order to establish that the costs have been incurred, that the work relating thereto has been completed, and that such amounts are then due.
5.     Borrower shall have delivered copies of receipts, marked “paid,” or cancelled checks or wire confirmations, for the Capital Expenditures covered by the Capital Expenditures Reserve Funds disbursed to Borrower pursuant to the immediately preceding Draw Request therefor.
6.    Lender shall have, at Lender’s option, inspected the Property in order to confirm that the Capital Expenditures have been completed and installed (and Borrower will pay all of Lender's actual, out-of-pocket costs, fees and expenses associated with such inspections, which may include fees and costs of an independent, third-party inspector).
For Tenant Improvements/Leasing Commissions Reserve Funds

1.    No Event of Default exists, other than a non-monetary Event of Default (including, but not limited to, the failure of Borrower or Guarantor to comply with any of the reporting requirements set forth in Section 5.5 hereof) beyond any applicable notice and cure periods and for which Lender has not previously furnished Borrower with written notice (it being the intention of the Parties that 

EXHIBIT C

such a non-monetary Event of Default, as aforesaid, shall not prohibit the funding of a Draw Request as long as all of the other applicable Disbursement Conditions have been satisfied).
2.    The disbursement shall be for an Approved Leasing Expense, or otherwise approved by Lender.
3.    If the requested disbursement is for the payment or reimbursement of Approved Leasing Expenses associated with a Material Lease, Lender shall, if required by Lender, have also previously reviewed and approved such Material Lease.
4.    For the disbursement of Tenant Improvements/Leasing Commissions Reserve Funds (but only if and as required by Lender) for Tenant Improvements, Borrower shall have also provided Lender with a copy of the executed construction contract if entered into by Borrower (and W-9’s for the contractor) for such Tenant Improvements, which construction contract (and the contractor thereunder) shall be reasonably acceptable to Lender.
5.    For the disbursement of Tenant Improvements/Leasing Commissions Reserve Funds (but only if and as required by Lender) for leasing commissions comprising Approved Leasing Expenses, Borrower shall have also provided Lender with W-9’s for the broker, and if requested by Lender, acting reasonably, with a copy of the executed leasing/brokerage contract for such leasing commissions (which leasing/brokerage contract shall in such case also be reasonably acceptable to Lender).
6.    Borrower shall have delivered copies of the applicable bills, invoices (for amounts in excess of $10,000.00) and other documentation reasonably required by Lender (including with respect to any cost for labor or materials furnished to the Property in excess of $50,000 for contracts entered into by Borrower, or otherwise for which the payment of the proceeds of the Draw Request are intended to be used, sworn lien waivers from any Person providing such labor or materials, as well as proof of payment for prior Draw Requests or prior reimbursements, budget trackers and change orders) in order to establish that the costs have been incurred, that the work relating thereto has been completed, and that such amounts are then due. For avoidance of doubt and purposes of clarification, Lender will not require Borrower to deliver copies of any construction contracts entered into by a tenant and a contractor for any Tenant Improvements covered by a Draw Request.
7.     Borrower shall have delivered copies of receipts, marked “paid,” or cancelled checks or wire confirmations, for the Approved Leasing Expenses covered by the Tenant Improvements/Leasing Commissions Reserve Funds disbursed to Borrower pursuant to the immediately preceding Draw Request therefor.
8.    Lender shall have, at Lender’s option, inspected the Property in order to confirm that the Tenant Improvements have been completed and installed (and Borrower will pay all of Lender's actual, out-of-pocket costs, fees and expenses associated with such inspections, which may include fees and costs of an independent, third-party inspector).
For Replacement Costs Reserve Funds

EXHIBIT C

1.    No Event of Default exists, other than a non-monetary Event of Default (including, but not limited to, the failure of Borrower or Guarantor to comply with any of the reporting requirements set forth in Section 5.5 hereof) beyond any applicable notice and cure periods and for which Lender has not previously furnished Borrower with written notice (it being the intention of the Parties that such a non-monetary Event of Default, as aforesaid, shall not prohibit the funding of a Draw Request as long as all of the other applicable Disbursement Conditions have been satisfied).
2.    Lender shall have reviewed and approved of the Draw Request (which shall set forth the details concerning the Replacement Costs).

3.    Lender shall have, at Lender’s option, inspected the Property in order to confirm that the Replacements Costs at the Property have been completed and installed (and Borrower will pay all of Lender's actual, out-of-pocket costs, fees and expenses associated with such inspections, which may include fees and costs of an independent, third-party inspector).

EXHIBIT C

EXHIBIT D
Excess Cash Flow Account Information
Bank:           KeyBank N.A.
Location:          127 Public Square, Cleveland, OH. 44114
ABA:           041001039
Account Name:     KCM Payment Clearings
Account No.:         359951013036
Contact:          Account Manager
Reference:         Loan Number 201916813

EXHIBIT D

EXHIBIT E
Definition of Single-Purpose Entity
A "Single Purpose Entity" is an entity that has not and will not and has organizational documents that provide that it has not and will not:
(1)    engage in any business or activity other than the ownership, leasing, sale, refinancing operation and maintenance of the Property, and activities incidental thereto;
(2)    acquire or own any assets other than (i) the Property, and (ii) such incidental personal property as may be necessary for the ownership, leasing, maintenance and operation of the Property;
(3)    merge into or consolidate with any Person, or dissolve, terminate, liquidate in whole or in part, except as otherwise permitted under the Loan Documents transfer, or otherwise dispose of all or substantially all of its assets or change its legal structure;
(4)    fail to observe all organizational formalities, or fail to preserve its existence as an entity duly organized, validly existing and in good standing (if applicable) under applicable Legal Requirements of the jurisdiction of its organization or formation, or except as permitted under the Loan Documents, amend, modify, terminate or fail to comply with the provisions of its organizational documents without Lender's prior written consent;
(5)    own any subsidiary, or make any investment in, any Person (other than cash and investment-grade securities, issued by an entity that is not an affiliate of or subject to common ownership with such entity);
(6)    except as contemplated by the Loan Documents, commingle its funds or assets with the funds or assets of any other Person;
(7)    incur any indebtedness (including guaranteeing any obligation) other than (i) the Indebtedness, and the indebtedness evidenced and secured by the Loan Documents, (ii) trade and operational indebtedness incurred in the ordinary course of business with trade creditors, provided such indebtedness is (A) unsecured, (B) not evidenced by a note, (C) on commercially reasonable terms and conditions, and (D) due not more than sixty (60) days past the date incurred and paid not more than sixty (60) days following the date due unless being contested in good faith by Borrower, (iii) permitted equipment leases, (iv) Impositions, (v) Premiums, (vi) costs and expenses related to the construction of improvements evidenced by the Approved Capital Expenditures Budget, and (vii) Tenant Improvement costs and leasing commissions ((i) through (vii) collectively “Permitted Indebtedness”); provided however, the aggregate amount of the indebtedness described in (ii) and (iii) shall not exceed at any time two percent (2%) of the aggregate outstanding principal amount of the Indebtedness and the indebtedness evidenced and secured by the Loan Documents.  No indebtedness other than the Indebtedness and the indebtedness evidenced and secured by the Loan Documents may be secured by the Property;

EXHIBIT E

(8)    fail to maintain all of its books, records, financial statements and bank accounts separate from those of any other Person.  Borrower's assets have not and will not be listed as assets on the financial statement of any other Person; provided, however, that Borrower's assets may be included in a consolidated financial statement of its affiliates provided that (i) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of Borrower and such affiliates and to indicate that Borrower's assets and credit are not available to satisfy the debts and other obligations of such affiliates or any other Person and (ii) such assets shall be listed on Borrower's own separate balance sheet;
(9)    enter into any contract or agreement with any partner, member, shareholder, principal or affiliate, except, in each case, upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arm's-length basis with unaffiliated third parties;
(10)    maintain its assets in such a manner that it will be costly or difficult to segregate, ascertain or identify its individual assets from those of any other Person;
(11)    assume or guaranty the debts of any other Person, hold itself out to be responsible for the debts of any other Person, or otherwise pledge its assets for the benefit of any other Person or hold out its credit as being available to satisfy the obligations of any other Person;
(12)    make any loans or advances to any Person;
(13)    fail to file its own tax returns (unless prohibited by applicable Legal Requirements from doing so);
(14)    fail to (i) hold itself out to the public and identify itself, in each case, as a legal entity separate and distinct from any other Person and not as a division or part of any other Person, (ii) conduct its business solely in its own name, (iii) hold its assets in its own name or (iv) correct any known misunderstanding regarding its separate identity;
(15)    fail to endeavor to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations (to the extent there exists sufficient cash flow from the Property to do so provided, however, that the foregoing shall not be interpreted so as to require any capital contributions from any Person to such Person);
(16)    without the prior unanimous written consent of all of its partners, shareholders or members, as applicable, the prior unanimous written consent of its board of directors or managers, as applicable, (i) file or consent to the filing of any petition, either voluntary or involuntary except in connection with a Lender Action, (ii) seek or consent to the appointment of a receiver, liquidator or any similar official except in connection with a Lender Action, (iii) intentionally omitted, (iv) make an assignment for the benefit of creditors except in connection with a Lender Action or (v) take any action to consolidate or merge Borrower with or into any Person, or sell all or substantially all of the assets of Borrower, or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of Borrower or a substantial part of its property except in connection with a Lender Action, or admit in writing Borrower's inability to pay 

EXHIBIT E

its debts generally as they become due, or take action in furtherance of any such action, or, to the fullest extent permitted by law except in connection with a Lender Action, dissolve or liquidate Borrower; 
(17)    fail to allocate shared expenses (including, without limitation, shared office space) or fail to use separate stationery, invoices and checks;
(18)    fail to pay its own liabilities (including, without limitation, salaries of its own employees) from its own funds or fail to maintain a sufficient number of employees in light of its contemplated business operations (in each case to the extent there exists sufficient cash flow from the Property to do so provided, however, that the foregoing shall be interpreted so as to require any capital contributions from any Person to such Person);
(19)    acquire obligations or securities of its partners, members, shareholders or other affiliates, as applicable; or
(20)    identify its partners, members, shareholders or other affiliates, as applicable, as a division or part of it.

EXHIBIT E

EXHIBIT F
Tenant Direction Letter
[see attached]

EXHIBIT F

EXHIBIT G
Disbursement Certification

FORM OF DISBURSEMENT CERTIFICATION AND SCHEDULE
Loan No. [            ]
The undersigned (“Affiant”) does hereby certify and affirm (on behalf of the applicable entity and not in an individual capacity), the following to [_________________________] (“Lender”) to induce Lender to disburse (the “Disbursement”) the aggregate sum of $[______________________] from the [___________________________________________]  pursuant to the terms of that certain Loan Agreement (“Loan Agreement”) originally entered into between [____________________________] (“Borrower”) and ReadyCap Commercial, LLC, a Delaware limited liability company, d/b/a Ready Capital Structured Finance,  dated ____________________.   Any capitalized terms used herein and not otherwise defined herein shall have the meaning set forth in the Loan Agreement.
1.    Affiant is the ______________ of Borrower, has actual knowledge as to the matters herein set forth and makes this Certification pursuant to Section _____ of the Loan Agreement.
2.    To Affiant’s knowledge, no Default or Event of Default by Borrower or Guarantor exists under any of the Loan Documents.
3.    To Affiant’s knowledge, all of the statements, information, costs and amounts set forth herein or on Exhibit A attached hereto are true and correct in all material respects as of the date hereof. All of the Disbursement funds shall be used solely for the purposes of paying the costs of the [______________________________________] specified herein, or for reimbursing Borrower for such costs previously paid by Borrower.
4.    All [___________________________________________] to be funded by the requested Disbursement have been completed in a good and workmanlike manner and in accordance with all applicable Legal Requirements, have not been the subject of a previous Disbursement, and that all outstanding payables with respect thereto (other than those to be paid from the requested Disbursement) have been paid in full.
5.    Attached hereto as Exhibit A is a schedule of each contractor, subcontractor, materialman and/or person (each, a “Payee”) to be paid (or for which Borrower is to be reimbursed for amounts previously paid by it to such Payee) from the proceeds of the Disbursement, the aggregate amount then payable to each such Payee, and related invoice numbers to be paid from the Disbursement.
6.    Each Payee has been paid, or will be paid with the proceeds of the Disbursement, the amounts then due and payable to such Payee in connection with the goods, work or services specified on Exhibit A provided by each such Payee, and Borrower has obtained lien waivers (as and to the extent required under the Loan Documents) from each such Payee with respect to such specified goods, work or services. 
7.    Each previous disbursement of [________________________________] was used to pay the costs of the [__________________________________]  identified in the Disbursement Certification and Schedule provided in connection with such previous disbursement.
Date: ________________________

EXHIBIT G

[TO BE EXECUTED BY AN AUTHORIZED OFFICER, GENERAL PARTNER, MANAGING MEMBER OR SOLE MEMBER OF BORROWER (ON BEHALF OF THE APPLICABLE ENTITY AND NOT IN AN INDIVIDUAL CAPACITY), AS APPLICABLE]

EXHIBIT G

EXHIBIT H
Organizational Chart
[see attached]

EXHIBIT Hsqbg_Ex10_1

		

			Exhibit 10.1

		

		

			 

		

		

			EXECUTION VERSION

		

		

			 

		

		
			 
		

		
			 
		

		
			EQUITY PURCHASE AGREEMENT
		

		
			by and between
		

		
			SEQUENTIAL BRANDS GROUP, INC.,
		

		
			as the Seller,
		

		
			and
		

		
			MARQUEE BRANDS LLC,
		

		
			as the Buyer
		

		
			Dated as of April 16, 2019
		

		
			 
		

		
			 
		

		
			 
		

		
			

		 

		

			 

		

		

		
			TABLE OF CONTENTS
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						Page

				
	
					
						 

					
					
						 

				
	
					
						ARTICLE I DEFINITIONS

					
2
				
	
					
						 

					
					
						 

				
	
					
						Section 1.1

					
					
						Certain Defined Terms

					
2
				
	
					
						Section 1.2

					
					
						Table of Definitions

					
12
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE II PURCHASE AND SALE

					
15
				
	
					
						 

					
					
						 

				
	
					
						Section 2.1

					
					
						Pre-Closing Reorganization

					
15
				
	
					
						Section 2.2

					
					
						Purchase and Sale of the Interests

					
15
				
	
					
						Section 2.3

					
					
						Payment of Purchase Price

					
15
				
	
					
						Section 2.4

					
					
						Closing

					
16
				
	
					
						Section 2.5

					
					
						Closing Estimates

					
16
				
	
					
						Section 2.6

					
					
						Purchase Price Adjustments

					
17
				
	
					
						Section 2.7

					
					
						Earn-Out

					
20
				
	
					
						Section 2.8

					
					
						Seller Receivables Reconciliation and Final True-Up

					
24
				
	
					
						Section 2.9

					
					
						Tax Treatment; Allocation of Purchase Price

					
25
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLER

					
25
				
	
					
						 

					
					
						 

				
	
					
						Section 3.1

					
					
						Organization

					
26
				
	
					
						Section 3.2

					
					
						Authority

					
26
				
	
					
						Section 3.3

					
					
						No Conflict; Required Filings and Consents

					
27
				
	
					
						Section 3.4

					
					
						Interests

					
28
				
	
					
						Section 3.5

					
					
						Capitalization

					
28
				
	
					
						Section 3.6

					
					
						Equity Interests

					
28
				
	
					
						Section 3.7

					
					
						Financial Statements; No Undisclosed Liabilities

					
29
				
	
					
						Section 3.8

					
					
						Absence of Certain Changes or Events

					
30
				
	
					
						Section 3.9

					
					
						Compliance with Law; Permits

					
30
				
	
					
						Section 3.10

					
					
						Litigation

					
31
				
	
					
						Section 3.11

					
					
						Employee Benefit Plans

					
31
				
	
					
						Section 3.12

					
					
						Labor and Employment Matters

					
33
				
	
					
						Section 3.13

					
					
						Insurance

					
34
				
	
					
						Section 3.14

					
					
						Real Property

					
34
				
	
					
						Section 3.15

					
					
						Intellectual Property

					
34
				
	
					
						Section 3.16

					
					
						Sufficiency of Assets; Tangible Assets

					
36
				
	
					
						Section 3.17

					
					
						Taxes

					
37
				
	
					
						Section 3.18

					
					
						Environmental Matters

					
38
				
	
					
						Section 3.19

					
					
						Material Contracts; Licensees

					
38
				
	
					
						Section 3.20

					
					
						Brokers

					
41
				
	
					
						Section 3.21

					
					
						Certain Payments

					
41
				
	
					
						Section 3.22

					
					
						Bank Accounts; Powers of Attorney

					
41
				
	
					
						Section 3.23

					
					
						Related Party Transactions

					
41
				
	
					
						Section 3.24

					
					
						The Seller’s Reliance

					
42
				

		
			
		

		
			

		 

		

			i

		

		

			 

		

		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER

					
42
				
	
					
						 

					
					
						 

				
	
					
						Section 4.1

					
					
						Organization

					
42
				
	
					
						Section 4.2

					
					
						Authority

					
42
				
	
					
						Section 4.3

					
					
						No Conflict; Required Filings and Consents

					
42
				
	
					
						Section 4.4

					
					
						Financing

					
43
				
	
					
						Section 4.5

					
					
						Solvency

					
43
				
	
					
						Section 4.6

					
					
						Brokers

					
43
				
	
					
						Section 4.7

					
					
						Investment Intent

					
43
				
	
					
						Section 4.8

					
					
						The Buyer’s Investigation and Reliance

					
44
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE V COVENANTS

					
44
				
	
					
						 

					
					
						 

				
	
					
						Section 5.1

					
					
						Subsidiary Conversions

					
44
				
	
					
						Section 5.2

					
					
						Conduct of Business Prior to the Closing

					
45
				
	
					
						Section 5.3

					
					
						No Solicitation; Exclusivity

					
47
				
	
					
						Section 5.4

					
					
						Covenants Regarding Information

					
48
				
	
					
						Section 5.5

					
					
						Notification of Certain Matters

					
49
				
	
					
						Section 5.6

					
					
						Intercompany Arrangements; Misdirected Mail and Payments

					
50
				
	
					
						Section 5.7

					
					
						Confidentiality

					
50
				
	
					
						Section 5.8

					
					
						Consents and Filings

					
51
				
	
					
						Section 5.9

					
					
						Public Announcements

					
52
				
	
					
						Section 5.10

					
					
						Use of Names and Marks

					
53
				
	
					
						Section 5.11

					
					
						Employee Matters

					
53
				
	
					
						Section 5.12

					
					
						Tax Matters

					
55
				
	
					
						Section 5.13

					
					
						Release of Guarantees

					
56
				
	
					
						Section 5.14

					
					
						Seller’s Insurance

					
56
				
	
					
						Section 5.15

					
					
						Further Assurances; Wrong Pockets

					
57
				
	
					
						Section 5.16

					
					
						Release

					
57
				
	
					
						Section 5.17

					
					
						Restrictive Covenants

					
57
				
	
					
						Section 5.18

					
					
						Emeril Termination Election

					
58
				
	
					
						Section 5.19

					
					
						Consulting Agreements

					
59
				
	
					
						Section 5.20

					
					
						Pre-Closing Accounts Payable

					
59
				
	
					
						Section 5.21

					
					
						Meredith Sublease

					
59
				
	
					
						Section 5.22

					
					
						Social Media Accounts

					
59
				
	
					
						Section 5.23

					
					
						Information Technology Transition

					
59
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE VI CONDITIONS TO CLOSING

					
60
				
	
					
						 

					
					
						 

				
	
					
						Section 6.1

					
					
						General Conditions

					
60
				
	
					
						Section 6.2

					
					
						Conditions to Obligations of the Seller

					
60
				
	
					
						Section 6.3

					
					
						Conditions to Obligations of the Buyer

					
61
				

		
			 
		

		
			
		

		
			

		 

		

			ii

		

		

			 

		

		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE VII TERMINATION

					
62
				
	
					
						 

					
					
						 

				
	
					
						Section 7.1

					
					
						Termination

					
62
				
	
					
						Section 7.2

					
					
						Effect of Termination

					
62
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE VIII INDEMNIFICATION

					
63
				
	
					
						 

					
					
						 

				
	
					
						Section 8.1

					
					
						Indemnification Obligations of the Seller

					
63
				
	
					
						Section 8.2

					
					
						Indemnification Obligations of the Buyer

					
64
				
	
					
						Section 8.3

					
					
						Indemnification Procedure

					
64
				
	
					
						Section 8.4

					
					
						Claims Period

					
66
				
	
					
						Section 8.5

					
					
						Liability Limits

					
67
				
	
					
						Section 8.6

					
					
						Exclusive Remedy

					
68
				
	
					
						Section 8.7

					
					
						Adjustment to Purchase Price

					
68
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE IX GENERAL PROVISIONS

					
68
				
	
					
						 

					
					
						 

				
	
					
						Section 9.1

					
					
						Fees and Expenses

					
68
				
	
					
						Section 9.2

					
					
						Amendment and Modification

					
69
				
	
					
						Section 9.3

					
					
						Waiver; Extension

					
69
				
	
					
						Section 9.4

					
					
						Notices

					
69
				
	
					
						Section 9.5

					
					
						Interpretation

					
70
				
	
					
						Section 9.6

					
					
						Entire Agreement

					
70
				
	
					
						Section 9.7

					
					
						Third-Party Beneficiaries

					
70
				
	
					
						Section 9.8

					
					
						Governing Law

					
71
				
	
					
						Section 9.9

					
					
						Submission to Jurisdiction

					
71
				
	
					
						Section 9.10

					
					
						Disclosure Generally

					
71
				
	
					
						Section 9.11

					
					
						Personal Liability

					
72
				
	
					
						Section 9.12

					
					
						Assignment; Successors

					
72
				
	
					
						Section 9.13

					
					
						Enforcement

					
72
				
	
					
						Section 9.14

					
					
						Currency

					
72
				
	
					
						Section 9.15

					
					
						Severability

					
72
				
	
					
						Section 9.16

					
					
						Waiver of Jury Trial

					
72
				
	
					
						Section 9.17

					
					
						Counterparts

					
72
				
	
					
						Section 9.18

					
					
						Facsimile or .pdf Signature

					
73
				
	
					
						Section 9.19

					
					
						Legal Representation

					
73
				
	
					
						Section 9.20

					
					
						No Presumption Against Drafting Party

					
74
				

		
			 
		

		
			 
		

			
					
						 

					
					
						 

				
	
					
						Schedule 1.1

					
					
						Ancillary Definitions

				
	
					
						Exhibit A

					
					
						Subsidiary Conversions

				
	
					
						Exhibit B

					
					
						Signing Deliverables

				

		
			 
		

		
			 
		

		
			 
		

		
			

		 

		

			iii

		

		

			 

		

		

		
			EQUITY PURCHASE AGREEMENT
		

		
			EQUITY PURCHASE AGREEMENT, dated as of April 16, 2019 (this “Agreement”), by and between Sequential Brands Group, Inc., a Delaware corporation (the “Seller”), and Marquee Brands LLC, a Delaware limited liability company (the “Buyer”).
		

		
			RECITALS
		

		
			WHEREAS, as of the date hereof, the Seller owns directly 100% of the issued and outstanding equity interests (the “Shares”) of the Company;
		

		
			WHEREAS, the Company and its Subsidiaries are engaged in the business of promoting, marketing and licensing the Martha Stewart brand and the Emeril Lagasse brand through various distribution channels, including to retailers, wholesalers and distributors in the United States and in certain international territories, as well as the personality rights of Martha Stewart and Emeril Lagasse, respectively, together with all related content, archives and publishing businesses (the “Business”);
		

		
			WHEREAS, prior to the Closing Date, the Seller shall (a) form a Delaware corporation, which shall be a wholly-owned subsidiary of the Seller (“Holdco”), (b) form a Delaware limited liability company (the “GP Holdco”), which shall be a wholly-owned subsidiary of Holdco, and (c) contribute the Shares (the “Contribution”) to Holdco;
		

		
			WHEREAS, following the Contribution and prior to the Closing Date, the Company shall (a) convert into a Delaware limited partnership (the “Conversion” and, together with the Contribution, the “Reorganization”) and (b) cause each of the Subsidiaries of the Company set forth on Exhibit A to convert into a Delaware limited partnership (the “Subsidiary Conversions”);
		

		
			WHEREAS, contemporaneously with the Conversion and the Subsidiary Conversions, GP Holdco shall be issued 100% of the issued and outstanding general partnership interests of the Company and each Subsidiary of the Company;
		

		
			WHEREAS, following the Conversion, (a) Holdco shall directly own 100% of the issued and outstanding membership interests of GP Holdco (the “Membership Interests”) and 100% of the issued and outstanding limited partnership interests of the Company (collectively, the “Company LP Interests” and, together with the Membership Interests, the “Interests”), (b) GP Holdco shall directly own 100% of the issued and outstanding general partnership interests of each of the Company (the “Company GP Interests”) and each Subsidiary of the Company (collectively, the “Subsidiary GP Interests” and, together with the Company GP Interests, the “GP Interests”), and (c) the Company shall directly own 100% of the issued and outstanding limited partnership interests of each of the Subsidiaries of the Company;
		

		
			WHEREAS, prior to or concurrently with the execution and delivery of this Agreement and as a condition and inducement to the Buyer’s willingness to enter into this Agreement, the Company delivered duly executed copies of the Signing Deliverables, each of which is in full force and effect as of the date hereof; and
		

		
			 
		

		
			 
		

		
			 
		

		
			

		 

		

			 

		

		

			 

		

		

		
			WHEREAS, the Seller and Holdco desire Holdco to directly sell the Interests to the Buyer, and the Buyer wishes to purchase the Interests from Holdco, on the terms and subject to the conditions set forth herein.
		

		
			AGREEMENT
		

		
			NOW THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, the receipt and sufficiency of which are hereby acknowledged and agreed, and intending to be legally bound hereby, the parties agree as follows:
		

		
			ARTICLE I
		

		
			DEFINITIONS
		

		
			Section 1.1      Certain Defined Terms.  For purposes of this Agreement:
		

		
			“Act” means the Delaware Revised Uniform Limited Partnership Act.
		

		
			“Action” means any action, cause of action, dispute, controversy, claim, demand, complaint, suit, litigation, appeal, arbitration, mediation, hearing, inquiry, audit, notice of violation, citation, summons, subpoena, proceeding or investigation of any nature, whether civil, criminal, administrative, regulatory or otherwise and whether at Law or in equity, commenced, brought, conducted or heard by or before any Governmental Authority.
		

		
			“Affiliate” means, with respect to any Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such first Person.
		

		
			“Aggregate Deferred Revenue” means the aggregate amount of all Deferred Revenue.
		

		
			“Aggregate Proceeds” means, in connection with an Acceleration Event, the aggregate gross proceeds received by the Buyer and its Affiliates in connection with such Acceleration Event, including any proceeds payable to the Buyer or its Affiliates, the amount of any indebtedness or transaction expenses paid or assumed by the acquirer, the value of any securities retained or rolled over by the Buyer or its Affiliates (based on the implied enterprise value in the transaction) and any special dividends or distributions made in connection with an Acceleration Event;  provided, that for the avoidance of doubt, in connection with an Acceleration Event contemplated by Section 2.7(e)(ii)(y), “Aggregate Proceeds” shall refer to the portion of such aggregate gross proceeds that is attributable to that portion of the Business engaged in promoting, marketing and licensing the Martha Stewart brand, as determined by the Independent Accountant (or such other third party accounting firm that is reasonably acceptable to the Buyer and the Seller) engaged and paid for by the Buyer.
		

		
			“Ancillary Agreements” means: (a) each of the Signing Deliverables; and (b) each of the other agreements, instruments, certificates and documents expressly required to be delivered pursuant to Section 1.1(b).
		

		
			
		

		
			

		 

		

			2

		

		

			 

		

		

		
			“Antitrust Laws” means the Sherman Act, as amended, the Clayton Act, as amended, the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder (the “HSR Act”), the Federal Trade Commission Act, as amended, all applicable foreign antitrust Laws and all other applicable Laws issued by a Governmental Authority that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade or lessening of competition through merger or acquisition.
		

		
			“Applicable Accounting Principles” means GAAP applied on a basis consistent with the preparation of the audited consolidated financial statements set forth after Part IV, Item 15 of the Annual Report on Form 10-K of the Seller filed with the United States Securities and Exchange Commission on March 14, 2019.
		

		
			“Bank Products” means any services of facilities provided to the Company or any of its Subsidiaries on account of: (a) Swap Contracts, (b) purchase cards; (c) leasing, (d) factoring, (e) supply chain finance services (including, without limitation, trade payable services and supplier accounts receivable purchases), and (f) any other “Bank Product” under and as defined in the Credit Agreements, as applicable, but excluding Cash Management Services, in each case, to the extent solely related to the Business.
		

		
			“Business Day” means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by Law to be closed in The City of New York.
		

		
			“Buyer Fundamental Representations” means the representations and warranties of the Buyer contained in Section 4.1 (Organization), Section 4.2 (Authority), Section 4.3(a)(i) (No Conflicts) and Section 4.6 (Brokers).
		

		
			“Buyer Indemnified Parties” means the Buyer and its Affiliates, each of their respective officers, directors, employees, agents and representatives and each of the heirs, executors, successors and assigns of any of the foregoing.
		

		
			“Cash” means the cash, cash equivalents and marketable securities of the Company and its Subsidiaries as of 12:01 a.m. Eastern time on the Closing Date, including all outstanding security, customer or other deposits (but without taking into account any outstanding checks issued by the Company or any of its Subsidiaries), excluding Restricted Cash.
		

		
			“Cash Management Services” means any cash management services provided to the Company or any of its Subsidiaries with respect to (a) automated clearinghouse transfer transactions, (b) controlled disbursement services, treasury depository, overdraft, and electronic funds transfer services, (c) credit card processing services, (d) credit or debit cards and (e) any other “Cash Management Services” under and as defined in the Credit Agreements, as applicable, in each case, to the extent solely  related to the Business.
		

		
			“Certificates of Conversion” means the certificate of conversion prepared to effectuate the Conversion, together with the Subsidiary Certificates of Conversion.
		

		
			“Change of Control Payments” means the aggregate amount payable (including “success fees” or bonuses, severance payments and any amounts payable to offset any excise Taxes
		

		
			
		

		
			

		 

		

			3

		

		

			 

		

		

		
			imposed under Section 4999 of the Code and any related income Taxes) by the Company or any of its Subsidiaries to any director, officer, employee or other service provider directly as a result of the transactions contemplated by this Agreement (including without limitation Taxes due or payable as a result of the transactions contemplated by this Agreement, whether or not arising prior to, at or after the Closing, but excluding any arrangements entered into by or at the direction of the Buyer following the Closing or any payments triggered by any action of Buyer following the Closing), in each case (a) inclusive of the employer portion of any related employment, payroll, unemployment, withholding or similar Taxes, and (b) solely to the extent the Buyer, the Company or any of its Subsidiaries would be liable for such amounts following the Closing.
		

		
			“Credit Agreements” means, collectively: (a) that certain Third Amended and Restated First Lien Credit Agreement, dated as of July 1, 2016, by and among Bank of America, N.A., in its capacities as administrative agent and collateral agent, the “Lenders” (as defined therein), the Seller and the guarantors party thereto; and (b) that certain Third Amended and Restated First Lien Credit Agreement, dated as of July 1, 2016, by and among Wilmington Trust, National Association, in its capacities as administrative agent and collateral agent, the “Lenders” (as defined therein), the Seller and the guarantors party thereto, in each case, as amended, supplemented or otherwise modified from time to time.
		

		
			“Claims Period” means the period during which a claim for indemnification may be asserted hereunder by an Indemnified Party.
		

		
			“Code” means the U.S. Internal Revenue Code of 1986, as amended.
		

		
			“Company” means until the consummation of the Conversion, Martha Stewart Living Omnimedia, Inc., and after the consummation of the Conversion, the “Company” shall mean the Delaware limited partnership into which Martha Stewart Living Omnimedia, Inc. is converted.
		

		
			“Contract” means any legally binding contract, agreement, subcontract, license, sublicense, lease, sublease, sales order, purchase order, indenture, mortgage, note, bond, letter of credit, warrant, instrument, obligation, commitment, arrangement or understanding (including all amendments, supplements and modifications thereto), whether written or oral and whether express or implied.
		

		
			“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, as trustee or executor, as general partner or managing member, by contract or otherwise.
		

		
			“Copyrights” means copyrights and works of authorship, including without limitation, those for website content, software and computer algorithms, and registrations and applications therefor.
		

		
			“Deferred Revenue” means, with respect to any Pre-Closing Payment, the portion of such Pre-Closing Payment that relates to the period on or after the Closing Date.  The amount of any Deferred Revenue shall be, with respect to any Pre-Closing Payment, equal to the product of (i) the total amount of such Pre-Closing Payment, multiplied by (ii) the quotient of (A) the
		

		
			
		

		
			

		 

		

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			number of calendar days on or after the Closing Date that are covered by such Pre-Closing Payment, divided by (B) the total number of calendar days, whether before, on or after the Closing Date, that are covered by such Pre-Closing Payment.  Solely as an illustrative example, if the Company has received a Pre-Closing Payment of $1,000 and such Pre-Closing Payment relates to calendar year 2019, the amount of Deferred Revenue with respect to such Pre-Closing Payment (using April 15, 2019 as the “Closing Date” solely for purposes of this illustrative example) would be $715.07.
		

		
			“DGCL” means the Delaware General Corporation Law.
		

		
			“Disability” shall mean, with respect to any Person, that such Person, because of accident, disability or physical or mental illness, is incapable of substantially performing his or her duties to the Company and its Subsidiaries; provided, that, for the avoidance of doubt, a Person shall be deemed to have a Disability if such Person is or would reasonably be expected to be incapable of performing his or her duties to the Company and its Subsidiaries for (x) a continuous period of ninety (90) days or (y) periods amounting in the aggregate to 180 or more days within any one year.
		

		
			“Earn-Out Acceleration Amount” means an amount equal to the difference of (a) Aggregate Proceeds minus (b) $334,000,000; provided, that in no event shall the Earn-Out Acceleration Amount be an amount greater than the difference of (i) the Earn-Out Payment Cap minus (ii) the aggregate amount of all Earn-Out Payments made prior to the time of the consummation of an Acceleration Event.
		

		
			“Earn-Out Payment Cap” means an amount equal to $40,000,000.
		

		
			“Emeril Lagasse Consulting Agreement” means that certain Business Product Support and Promotion Agreement, dated as of November 14, 2018, by and between Emeril’s Homebase, LLC and We Love Food, LLC, on the one hand, and the Company, on the other hand.
		

		
			“Emeril Lagasse Material Adverse Effect”  has the meaning set forth on Schedule 1.1.
		

		
			“Encumbrance” means any charge, claim, mortgage, lien, easement, option, pledge, security interest, hypothecation, right of way, encroachment, servitude, title retention Contract, ownership interest of another Person, right of first refusal, license, covenant, encumbrance or other restriction or limitation of any kind (other than those created under applicable securities Laws), including restrictions on transferability, use or voting and security interests issued against any Intellectual Property.
		

		
			“Enterprise Valuation” means $167,000,000,  or, in the event of an Emeril Termination Election, $157,000,000.
		

		
			“ERISA Affiliate” means each Person, trade or business (whether or not incorporated) that together with the Seller is treated as or deemed a “single employer” pursuant to Sections 414(b), (c), (m) or (o) of the Code or Section 4001(b) of ERISA.
		

		
			
		

		
			

		 

		

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			“Estimated Purchase Price” means: (i) Enterprise Valuation plus (ii) Estimated Cash (which amount shall not exceed $500,000), minus (iii) Estimated Indebtedness, minus (iv) Estimated Transaction Expenses,  minus (v) Estimated Aggregate Deferred Revenue, plus (vi) Estimated Prepaid Expenses.
		

		
			“Final Invoice” means, with respect to each Transaction Expenses Payee, an invoice setting forth (a) the aggregate outstanding amount to be paid to such Transaction Expenses Payee as of the Closing Date and (b) written wire instructions pursuant to which such aggregate amount is to be paid.
		

		
			“GAAP” means United States generally accepted accounting principles as in effect on the date hereof.
		

		
			“Governmental Authority” means any United States or non-United States, national, federal, state or local governmental, regulatory or administrative authority, agency or commission or any judicial or arbitral body.
		

		
			“Indemnified Party” means a Buyer Indemnified Party or a Seller Indemnified Party, as the case may be.
		

		
			“Indebtedness” means, as at a specified date, without duplication, the principal amount, plus any related accrued and unpaid interest, fees and prepayment premiums or penalties, of (i) all liabilities created, issued or incurred for borrowed money of the Company or any of its Subsidiaries, including for the avoidance of doubt, the current portion thereof, (ii) all obligations of the Company or any of its Subsidiaries to pay the deferred purchase price or acquisition price of property or services, or similar payment, to the extent constituting a liability, including any “earnout” or similar payments or any non-compete payments, (iii) indebtedness of the Company or any of its Subsidiaries evidenced by any note, bond, debenture or other debt security (including a purchase money obligation); (iv) the then-drawn stated amount of and, without duplication, all reimbursement obligations of the Company or any of its Subsidiaries under letters of credit, bankers’ acceptance, note purchase facility, or similar instruments issued or accepted by banks and other financial institutions; (v) all accumulated and unpaid dividends or distributions of the Company or any of its Subsidiaries, whether or not declared; (vi) all deferred compensation obligations that are not Change of Control Payments, including but not limited to (A) any underfunded pension or post-retirement liabilities, and (B) all payment obligations under any retiree medical or deferred or contingent compensation plans or arrangements; (vii) the principal amount of all liabilities under or in respect of leases required to be capitalized under GAAP; (viii) all liabilities of the Company or any of its Subsidiaries due as of such specified date under any Swap Contracts, hedging agreements or similar agreements; (ix) all liabilities in respect of any off-balance sheet transactions; (x) any intercompany obligations between or among the Company and any of its Affiliates; (xi) all liabilities of the Company or any of its Subsidiaries with respect to any past or pending legal settlements to the extent unpaid as of the Closing Date; and (xii) all obligations of another Person of the types listed in clauses (i) through (xi) above, payment of which is guaranteed by, or secured by Encumbrances on the property of (with respect to liens, to the extent of the value of property pledged pursuant to such Encumbrances if less than the amount of such obligations), the Company or any of its Subsidiaries.  “Indebtedness” includes any and all accrued interest, success fees, prepayment premiums, make-whole premiums or penalties, and fees
		

		
			
		

		
			

		 

		

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			or expenses; provided, that notwithstanding the foregoing, “Indebtedness” does not include the portion of any obligation of the type listed in clauses (i) through (xii) above to the extent included in the calculation of the Transaction Expenses.
		

		
			“Intellectual Property” means all intellectual property rights arising under the Laws of the United States or any other jurisdiction throughout the world, whether registered or unregistered, with respect to the following:  (i) Marks; (ii) Patents; (iii) Copyrights; (iv) domain names, websites, URLs and web pages, and all content and data thereon or relating thereto, whether or not copyrights; (v) social media platforms, sites and pages, and all content and data thereon or relating thereto, whether or not copyrights; (vi) computer programs, operating systems, applications, firmware and other code, including all source code, object code, application programming interfaces, data files, databases, protocols, specifications, and other documentation thereof; (vii) rights of publicity; (viii) trade secrets, know-how, inventions (whether or not patentable), discoveries, improvements, methods, processes, technical data, specifications, research and development information, technology, data bases, data compilations and collections, tooling; (ix) all registrations, applications, renewals, extensions, recordings, common-law and statutory rights relating to any of the foregoing; and (x) other proprietary or confidential information, including customer lists, processes and techniques, in each case that derives economic value from not being generally known to other Persons who can obtain economic value from its disclosure.
		

		
			“IRS” means the Internal Revenue Service of the United States.
		

		
			“Knowledge of the Seller” means the actual knowledge of the Persons listed in Section 1.1(a) of the Disclosure Schedules, and the knowledge that any such Person would have had if such Person had made due inquiry in the Business with respect to the matters at hand, as of the date of this Agreement (or, with respect to a certificate delivered pursuant to this Agreement, as of the date of delivery of such certificate).
		

		
			“Law” means any statute, law, ordinance, regulation, rule, code, injunction, judgment, decree or order of any Governmental Authority.
		

		
			“Leased Real Property” means the real property leased, subleased or licensed by the Company or any of its Subsidiaries or used by the Business, together with all buildings and other structures, facilities or improvements currently or as of the Closing Date located thereon and all easements, licenses, rights and appurtenances relating to the foregoing.
		

		
			“Look-Back Date” means December 4, 2015.
		

		
			“Marks” means any registered or unregistered trade names, trademarks, logos, service marks, brands, certification marks, trade dress, and similar rights and other source indicators; applications to register any of the foregoing, and the goodwill connected with the use of, and symbolized by, any of the foregoing.
		

		
			“Martha Stewart Employment Agreement” means that certain Employment Agreement between the Seller and Martha Stewart, dated as of June 22, 2015.
		

		
			
		

		
			

		 

		

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			“Martha Stewart Employment Agreement Assignment” means that certain Assignment and Assumption Agreement, dated as of April 16, 2019, by and among the Seller, the Buyer, Martha Stewart and MS Real Estate Management Company.
		

		
			“Material Adverse Effect” means any event, change, state of facts, occurrence, development or effect that would or would reasonably be expected to, individually or in the aggregate, (i) prevent, materially delay or materially impede the performance by the Seller of its obligations under this Agreement or the consummation of the transactions contemplated hereby; or (ii) have a material adverse effect on the business, financial condition, assets, liabilities or results of operations of the Company and its Subsidiaries, taken as a whole, other than any event, change, state of facts, occurrence, development or effect arising out of or resulting from (A) general changes or developments in any of the industries in which the Business operates, (B) changes in global, national or regional political conditions (including any outbreak or escalation of hostilities or any acts of war or terrorism) or in general economic, business, regulatory, political or market conditions or in national or global financial markets, (C) natural disasters or calamities, (D) changes in any applicable Law or GAAP, or principles or interpretations thereof, (E) the mere failure by the Business to meet its internal or published projections, budgets, plans or forecasts of its revenues, earnings or other financial performance or results of operations (it being agreed that the facts or circumstances giving rise to such failure that are not otherwise excluded from the definition of Material Adverse Effect may be taken into account in determining whether a Material Adverse Effect has occurred), (F) the announcement of this Agreement and the transactions contemplated hereby, (G) any action taken by the Seller or the Company, or which the Seller causes to be taken by the Company or any of its Subsidiaries, in each case that is expressly required by this Agreement or the Ancillary Agreements, or (H) any actions taken (or omitted to be taken) at the request, or with the consent, of the Buyer; provided,  however, that any effects resulting from the matters referred to in clauses (A) through (E) shall be excluded from the definition of “Material Adverse Effect” only to the extent that such matters occur after the date hereof and only to the extent that such matters do not disproportionately impact the Business or the Company or any of its Subsidiaries as compared to other companies operating in the same industry.
		

		
			“Order” means any order, writ, judgment, injunction, decree, stipulation, determination or award, whether preliminary or final, entered by or with any Governmental Authority.
		

		
			“Patents” means patents and patent applications and rights in respect of utility models or industrial designs filed in or with any Governmental Authority.
		

		
			“Payoff Letter” means, with respect to any Debt Payee, a payoff letter in form and substance satisfactory to the Buyer in the Buyer’s reasonable discretion (a) stating the amount (including any outstanding interest thereunder and any prepayment penalties, fees, make-whole or similar amounts related to such payment) necessary to satisfy and terminate in full as of the Closing the Closing Indebtedness with respect to such Debt Payee, (b) authorizing the Buyer to file all UCC termination statements and other releases necessary to evidence such satisfaction and termination of the Closing Indebtedness and to enable the release of any Encumbrances relating thereto upon payment of such Closing Indebtedness and (c) releasing the GP Holdco, the Company and each of its Subsidiaries as a party to, and from all obligations under, the Credit Agreements and all documents, agreements, filings and instruments contemplated thereby.
		

		
			
		

		
			

		 

		

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			“Permitted Encumbrance” means (i) statutory liens for current Taxes not yet due or delinquent (or which may be paid without interest or penalties) or the validity or amount of which is being contested in good faith by appropriate proceedings and for which reserves have been made in the Financial Statements in accordance with GAAP, (ii) mechanics’, carriers’, workers’, repairers’ and other similar liens arising or incurred in the ordinary course of business relating to obligations as to which there is no default on the part of the Business, or the validity or amount of which is being contested in good faith by appropriate proceedings and for which reserves have been made in the Financial Statements in accordance with GAAP, or pledges, deposits or other liens securing the performance of bids, trade Contracts, leases or statutory obligations (including workers’ compensation, unemployment insurance or other social security legislation), (iii) zoning, entitlement, conservation restriction and other land use and environmental regulations promulgated by Governmental Authorities, (iv) liens granted to any lender at the Closing in connection with any financing by the Buyer of the transactions contemplated hereby or otherwise created by the Buyer or its Affiliates, (v) any right, interest, lien, title or other Encumbrance of a lessor or sublessor under any lease or other similar agreement or in the property being leased, (vi) all other Encumbrances that do not materially interfere with the use or value of the applicable asset, and (vii) all Encumbrances listed on Section 1.1(b) of the Disclosure Schedules.
		

		
			“Person” means an individual, corporation, partnership, limited liability company, limited liability partnership, syndicate, person, trust, association, organization or other entity, including any Governmental Authority, and including any successor or predecessor, by merger or otherwise, of any of the foregoing.
		

		
			“Personnel Event”  has the meaning set forth in  Schedule 1.1.
		

		
			“Pre-Closing Tax Period” means any taxable period ending on or before the Closing Date.
		

		
			“Pre-Closing Payment” means any royalty revenue payment or payments made prior to the Closing Date to the Company or any of its Affiliates to the extent relating to the Business that relates, in whole or in part, to any period on or after the Closing Date.
		

		
			“Prepaid Expenses” means any amounts that were prepaid prior to the Closing Date to the extent related to expenses of the Business on or following the Closing Date or which would otherwise have been incurred on or after the Closing Date.  An illustrative calculation of Prepaid Expenses is provided in Section 2.5 of the Disclosure Schedules.
		

		
			“Purchase Price” means the Estimated Purchase Price, as finally adjusted pursuant to Section 2.6,  plus any amounts paid pursuant to Section 2.8 and the Earn-Out Payments, if any.
		

		
			“Related Person” means (a) Martha Stewart, (b) Emeril Lagasse, (c) any Affiliate, director or officer of the Seller, the Company or any of their respective Affiliates or (d) any record owner of greater than five percent (5%) of any class of securities of the Seller or any controlling or controlled Affiliate of such record holder.
		

		
			“Representatives” means, with respect to any Person, the officers, directors, principals, employees, agents, auditors, advisors, bankers and other representatives of such Person.
		

		
			
		

		
			

		 

		

			9

		

		

			 

		

		

		
			“Restricted Cash” means cash deposits, cash in reserve or escrow accounts, custodial cash and cash subject to a lockbox, dominion, control or similar agreements.
		

		
			“Return” means any return, declaration, report, statement, information statement, estimate, claim for refund or other document filed or required to be filed with a Governmental Authority with respect to Taxes, including any related or supporting information, schedule or attachment thereto, and including any amendment thereof.
		

		
			“Seller Bonus Responsibility Amount” means an amount equal to the product of (a) the total amount of bonuses paid to Affected Employees by the Buyer or the Company or any of its Subsidiaries with respect to the year ended December 31, 2019 that is paid by April 15, 2020, multiplied by (b) the quotient of (i) the number of calendar days on or before the Closing Date in the year ended December 31, 2019, divided by (ii) 365 (such quotient, the “Pre-Closing Period Fraction”);  provided, that in no event shall the Seller Bonus Responsibility Amount with respect to any Affected Employee exceed an amount equal to the product of (1) seventy five percent (75%) of the target bonus amount for the year ended December 31, 2018 for such Affected Employee (in his, her or their capacity as an employee of the Seller or one of its Subsidiaries) who receive a bonus from the Buyer, the Company or any of its Subsidiaries with respect to the year ended December 31, 2019 multiplied by (2) the Pre-Closing Period Fraction.
		

		
			“Seller Fundamental Representations” means the representations and warranties of the Seller contained in Section 3.1 (Organization), Section 3.2 (Authority), Section 3.3(a)(i) (No Conflict), Section 3.4 (Interests), Section 3.5 (Capitalization), Section 3.6 (Equity Interests) and Section 3.20 (Brokers).
		

		
			“Seller Indemnified Parties” means the Seller and its Affiliates, each of their respective officers, directors, employees, agents and representatives and each of the heirs, executors, successors and assigns of any of the foregoing.
		

		
			“Seller Severance Responsibility Amount” means an amount equal to the product of (a) the total amount of severance paid to Affected Employees (other than the employees set forth on Section 1.1(c) of the Disclosure Schedules) by the Buyer, the Company or any or its Subsidiaries in connection with the termination of any Affected Employee from the period following the Closing until December 31, 2019 (the “Buyer Severance Payment”),  multiplied by (b) the quotient of (i) the amount of severance to which such Affected Employees would have been entitled under the Seller’s or any of its Subsidiaries’ severance policies if their employment would have been terminated as of the Closing Date divided by (ii) the Buyer Severance Payment;  provided that Buyer has obtained a release of claims in favor of Seller and its Affiliates in connection with any such termination of employment.
		

		
			“Signing Deliverables” means the agreements, instruments, certificates and documents set forth on Exhibit B.
		

		
			“Straddle Period” means a taxable period that includes, but does not end on, the Closing Date.
		

		
			“Studio Subsidization Fee” has the meaning set forth on Schedule O to that certain Amended and Restated Magazine, Content Creation and Licensing Agreement, dated as of
		

		
			
		

		
			

		 

		

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			December 21, 2015, as amended by the First Amendment, dated as of May 31, 2016, Second Amendment, dated as of July 1, 2016, Third Amendment, dated as of December 18, 2017 and Fourth Amendment, dated as of February 1, 2019, thereto.
		

		
			“Subsidiary” means, with respect to any Person, any other Person of which more than 50% of the outstanding voting securities or other voting equity interests are owned, directly or indirectly, by such first Person as of the applicable measurement time.
		

		
			“Subsidiary Certificates of Conversion” means the certificates of conversion prepared to effectuate the Subsidiary Conversions.
		

		
			“Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement, in each case, to the extent solely related to the Business.
		

		
			“Taxes” means any and all federal, state, local, foreign and other income, gross receipts, corporate, capital, net worth, sales, use, production, ad valorem, transfer, franchise, registration, profits, license, lease, service, service use, withholding, payroll, social security (or similar, including FICA), employer health, employment, unemployment, disability, estimated, excise, abandoned or unclaimed property, escheat, environmental, stamp, occupation, premium, property (real or personal), real property gains, windfall profits, capital stock, value added, customs, duties, alternative or add-on minimum taxes, or other taxes of any kind, or other Governmental Authority charges, fees, levies, or other like assessments of the same or similar nature, together with any interest, additions or penalties with respect thereto, whether disputed or not, and including any obligation to pay Taxes of others, whether as a transferee, successor, by Contract or otherwise.
		

		
			“Transaction Expenses” means, to the extent not paid prior to the Closing Date, the aggregate amount of: (i) any and all fees and expenses, incurred by or on behalf of, or to be paid directly by, the Company or any of its Subsidiaries in connection with the negotiation, preparation or execution of this Agreement or the Ancillary Agreements or the performance or consummation of the transactions contemplated hereby or thereby, including (A) all fees and expenses of counsel, advisors, consultants, investment bankers, accountants, auditors and any other experts in connection with the transactions contemplated hereby and (B) all brokers’, finders’ or similar fees in connection with the transactions contemplated hereby; and (ii) Change of Control Payments, in
		

		
			
		

		
			

		 

		

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			each case solely to the extent the Buyer, the Company or any of its Subsidiaries would be liable for such amounts following the Closing.  For the avoidance of doubt, Transaction Expenses shall not include any expenses incurred in connection with the formation of GP Holdco and the related expenses of converting to limited partnerships  (other than legal fees, which shall constitute Transaction Expenses,  and Taxes), which expenses shall be borne solely by the Buyer.
		

		
			“WARN Act” means the federal Worker Adjustment and Retraining Notification Act of 1988, and substantially similar state and local laws (including the New York State Worker Adjustment and Retraining Notification Act of 2009) requiring notice of certain plant closings or mass layoffs that result in employment losses.
		

		
			Section 1.2      Table of Definitions.  The following terms have the meanings set forth in the Sections referenced below:
		

		
			 
		

			
					
						 

					
					
						 

				
	
					
						Definition

					
					
						Location

				
	
					
						 

					
					
						 

				
	
					
						Acceleration Event

					
					
						2.7(e)(ii)

				
	
					
						Acquisition Engagement

					
					
						9.19(a)

				
	
					
						Acquisition Proposal

					
					
						5.3(c)

				
	
					
						Actual Cash Royalty Revenue

					
					
						2.7(a)(v)

				
	
					
						Actual Cash Royalty Revenue Calculation

					
					
						2.7(c)(i)

				
	
					
						Affected Employees

					
					
						5.11(a)

				
	
					
						Agreement

					
					
						Preamble

				
	
					
						Alternative Recovery

					
					
						8.5(b)

				
	
					
						Assigned Consulting Agreements

					
					
						5.19(c)

				
	
					
						Business

					
					
						Recitals

				
	
					
						Business Registered IP

					
					
						3.15(a)

				
	
					
						Buyer

					
					
						Preamble

				
	
					
						Buyer Basket

					
					
						8.5(a)(ii)

				
	
					
						Buyer Basket Tipping Point

					
					
						8.5(a)(ii)

				
	
					
						Buyer Cap

					
					
						8.5(a)(iii)

				
	
					
						Buyer Losses

					
					
						8.1

				
	
					
						Buyer Mini Basket

					
					
						8.5(a)(i)

				
	
					
						Buyer Severance Payment

					
					
						1.1

				
	
					
						Calculation Period

					
					
						2.7(a)(i)

				
	
					
						Calculation Period 1

					
					
						2.7(a)(ii)

				
	
					
						Calculation Period 2

					
					
						2.7(a)(iii)

				
	
					
						Calculation Period 3

					
					
						2.7(a)(iv)

				
	
					
						Closing

					
					
						2.4(a)

				
	
					
						Closing Aggregate Deferred Revenue

					
					
						2.6(a)

				
	
					
						Closing Cash

					
					
						2.6(a)

				

		
			 
		

		
			
		

		
			

		 

		

			12

		

		

			 

		

		

		
			 
		

			
					
						Closing Date

					
					
						2.4(a)

				
	
					
						Closing Indebtedness

					
					
						2.6(a)

				
	
					
						Closing Prepaid Expenses

					
					
						2.6(a)

				
	
					
						Closing Transaction Expenses

					
					
						2.6(a)

				
	
					
						Company GP Interests

					
					
						Recitals

				
	
					
						Company LP Interests

					
					
						Recitals

				
	
					
						Confidentiality Agreement

					
					
						5.7(a)

				
	
					
						Contribution

					
					
						Recitals

				
	
					
						Conversion

					
					
						Recitals

				
	
					
						Data Handling

					
					
						3.15(j)

				
	
					
						Debt Payee

					
					
						2.3(b)

				
	
					
						Disclosure Schedules

					
					
						Article III

				
	
					
						Earn-Out Payment

					
					
						2.7(b)(i)

				
	
					
						Earn-Out Payments

					
					
						2.7(b)(i)

				
	
					
						Emeril Termination Election

					
					
						5.18

				
	
					
						Employee Plans

					
					
						3.11(a)

				
	
					
						Environmental Laws

					
					
						3.18(d)(i)

				
	
					
						Environmental Permits

					
					
						3.18(d)(ii)

				
	
					
						ERISA

					
					
						3.11(a)

				
	
					
						Estimated Aggregate Deferred Revenue

					
					
						2.5

				
	
					
						Estimated Cash

					
					
						2.5

				
	
					
						Estimated Indebtedness

					
					
						2.5

				
	
					
						Estimated Prepaid Expenses

					
					
						2.5

				
	
					
						Estimated Transaction Expenses

					
					
						2.5

				
	
					
						Final Closing Statement

					
					
						2.6(a)

				
	
					
						Final True-Up Amount

					
					
						2.8(c)

				
	
					
						Final True-Up Date

					
					
						2.8(c)

				
	
					
						Financial Statements

					
					
						3.7(a)

				
	
					
						Gibson Dunn

					
					
						9.19(a)

				
	
					
						GP Holdco

					
					
						Recitals

				
	
					
						GP Interests

					
					
						Recitals

				
	
					
						Holdco

					
					
						Recitals

				
	
					
						HSR Act

					
					
						1.1

				
	
					
						Indemnifying Party

					
					
						8.3(a)

				
	
					
						Independent Accounting Firm

					
					
						2.6(c)

				
	
					
						Initial Post-Period 3 True-Up Payment

					
					
						2.7(d)

				
	
					
						Insurance Policies

					
					
						3.13

				
	
					
						Interests

					
					
						Recitals

				
	
					
						IT Transition

					
					
						5.23

				
	
					
						Leases

					
					
						3.14(b)

				
	
					
						Licensee Contracts

					
					
						3.19(b)

				
	
					
						Losses

					
					
						8.2

				
	
					
						Master Agreement

					
					
						1.1

				
	
					
						Material Contracts

					
					
						3.19(a)

				
	
					
						Membership Interests

					
					
						Recitals

				

		
			 
		

		
			
		

		
			

		 

		

			13

		

		

			 

		

		

		
			 
		

			
					
						Net Adjustment Amount

					
					
						2.6(f)(i)

				
	
					
						Notice of Disagreement

					
					
						2.6(b)

				
	
					
						Permits

					
					
						3.9(b)

				
	
					
						Post-Period 3 Actual Cash Royalty Revenue

					
					
						2.7(d)

				
	
					
						Post-Period 3 Actual Cash Royalty Revenue Calculation

					
					
						2.7(d)

				
	
					
						Pre-Closing Period Fraction

					
					
						1.1

				
	
					
						Preliminary Closing Statement

					
					
						2.5

				
	
					
						Proprietary Information

					
					
						5.7(b)

				
	
					
						Received Payments

					
					
						2.7(a)(v)

				
	
					
						Reorganization

					
					
						Recitals

				
	
					
						Reverse IT Transition

					
					
						5.23

				
	
					
						Second Post-Period 3 True-Up Payment

					
					
						2.7(d)

				
	
					
						Seller

					
					
						Preamble

				
	
					
						Seller Guarantees

					
					
						5.13

				
	
					
						Seller Losses

					
					
						8.2

				
	
					
						Seller Receivables

					
					
						2.8(a)

				
	
					
						Seller Retained Employees

					
					
						5.11(b)

				
	
					
						Shares

					
					
						Recitals

				
	
					
						Solvent

					
					
						4.5

				
	
					
						Subsidiary Conversions

					
					
						Recitals

				
	
					
						Subsidiary GP Interests

					
					
						Recitals

				
	
					
						Supplement

					
					
						5.5(b)

				
	
					
						Termination Date

					
					
						7.1(c)

				
	
					
						Transaction Expense Payee

					
					
						2.3(c)

				
	
					
						Transferred Systems

					
					
						5.23

				

		
			 
		

		
			 
		

		
			
		

		
			

		 

		

			14

		

		

			 

		

		

		
			ARTICLE II
		

		
			PURCHASE AND SALE
		

		
			Section 2.1      Pre-Closing Reorganization.
		

		
			(a)        No later than one Business Day prior to the Conversion and the Subsidiary Conversions, the Seller shall make the Contribution.  Upon the terms and subject to the conditions set forth in this Agreement and in accordance with the DGCL and the Act, following the Contribution and at least one Business Day prior to the Closing Date, the Seller and Holdco shall effect the Conversion and the Subsidiary Conversions by filing the Certificates of Conversion with the Secretary of State of Delaware in accordance with this Agreement and the Act.  Each of the Contribution, the Conversion and the Subsidiary Conversions shall be effected pursuant to documentation reasonably satisfactory to both the Buyer and the Seller.
		

		
			(b)        The Company, as a limited partnership following the Conversion, shall be considered for all purposes hereunder the same entity that it was prior to the Conversion, but taking into account any changes in its tax classification or tax treatment provided under applicable tax Law.  For the avoidance of doubt, following the Conversion, the newly-formed limited partnership formed by the Conversion shall be a successor in interest to Martha Stewart Living Omnimedia, Inc.
		

		
			(c)        Each Subsidiary of the Company set forth on Exhibit A, as a limited partnership following the applicable Subsidiary Conversion, shall be considered for all purposes hereunder the same entity that it was prior to the applicable Subsidiary Conversion, but taking into account any changes in its tax classification or tax treatment provided under applicable tax Law.
		

		
			Section 2.2      Purchase and Sale of the Interests.  Upon the terms and subject to the conditions of this Agreement, at the Closing, the Seller shall cause Holdco to, and Holdco shall, sell, assign, transfer, convey and deliver the Interests to the Buyer, and the Buyer shall purchase the Interests from Holdco, in consideration for the Purchase Price.
		

		
			Section 2.3     Payment of Purchase Price.  In full consideration for the sale, assignment, transfer, conveyance and delivery of the Interests to the Buyer, at the Closing, the Buyer shall:
		

		
			(a)        pay an amount equal to the Estimated Purchase Price by wire transfer of immediately available funds in dollars to the account designated in writing by the Seller at least two Business Days prior to the Closing Date;
		

		
			(b)        repay, or cause to be repaid, on behalf of the Seller or the Company and its Subsidiaries, as applicable, the amounts payable to each counterparty or holder of Indebtedness identified on Section 2.3(b) of the Disclosure Schedules (each, a “Debt Payee”) in order to fully discharge and terminate all applicable obligations and liabilities of the Company and any of its Subsidiaries related thereto; and
		

		
			(c)        pay, or cause to be paid, on behalf of the Seller or the Company and its Subsidiaries, as applicable, and to the extent unpaid as of immediately prior to the Closing, an
		

		
			
		

		
			

		 

		

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			amount equal to the Estimated Transaction Expenses, to each Person who is owed a portion thereof identified on Section 2.3(c) of the Disclosure Schedules (each, a “Transaction Expense Payee”).
		

		
			Section 2.4      Closing.
		

		
			(a)        The sale and purchase of the Interests, shall take place at a closing (the “Closing”) to be held at the offices of Gibson, Dunn & Crutcher LLP, 200 Park Avenue, New York, New York, at 10:00 a.m., local time, on the second Business Day following the satisfaction or, to the extent permitted by applicable Law, waiver of all conditions to the obligations of the parties set forth in Article VI (other than such conditions as may, by their nature, only be satisfied at the Closing or on the Closing Date), or at such other place, time and/or date as the Seller and the Buyer may mutually agree in writing.  The day on which the Closing takes place is referred to as the “Closing Date.”
		

		
			(b)        At the Closing, the Seller shall deliver to the Buyer each of the following documents and instruments:
		

		
			(i)         written resignations in customary form effective as of the Closing from each officer and director of the GP Holdco, the Company and each of its Subsidiaries resigning from his or her position as a director or officer;
		

		
			(ii)       (A) a duly executed Payoff Letter from each Debt Payee, along with wire transfer instructions and (B) Final Invoices from each Transaction Expenses Payee, along with wire transfer instructions;
		

		
			(iii)      a certificate of good standing (or applicable equivalent) from the Secretary of State (or other applicable Governmental Authority) of the GP Holdco’s and the Company’s jurisdiction of organization dated no more than two days before the Closing Date and certifying as to the good standing of the GP Holdco or the Company, as the case may be, in such jurisdiction;
		

		
			(iv)       an affidavit duly executed by Holdco under penalty of perjury and dated as of the Closing Date certifying that Holdco is not a “foreign person” within the meaning of Section 1445 of the Code, substantially in the form of the applicable sample certificate set forth in U.S. Treasury Regulations Section 1.1445-2(b)(2)(iv);
		

		
			(v)        a certificate dated as of the Closing Date and executed by an authorized officer of the Seller, certifying that the board of directors of the Seller has authorized the execution and delivery of this Agreement and the consummation of the transactions contemplated hereunder; and
		

		
			(vi)       evidence of the assignment of Lincoln Financial Key Man Policy Number T40047601 to the Company effective as of the Closing.
		

		
			Section 2.5      Closing Estimates.  No later than five (5) Business Days prior to the anticipated Closing Date, the Seller shall prepare, or cause to be prepared, and deliver to the Buyer a written statement (the “Preliminary Closing Statement”) including and setting forth (i) a good-faith estimate of (A) Indebtedness (“Estimated Indebtedness”), (B) Cash (“Estimated Cash”), (C)
		

		
			
		

		
			

		 

		

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			unpaid Transaction Expenses (“Estimated Transaction Expenses”),  (D) Aggregate Deferred Revenue (“Estimated Aggregate Deferred Revenue”) and (E) any Prepaid Expenses (such payments, “Estimated Prepaid Expenses”) (with each of Estimated Indebtedness, Estimated Cash,  Estimated Aggregate Deferred Revenue and Estimated Prepaid Expenses determined as of 12:01 a.m. Eastern time on the Closing Date and, except for Estimated Transaction Expenses, without giving effect to the transactions contemplated herein) and (ii) on the basis of the foregoing, a calculation of the Estimated Purchase Price.  The Estimated Indebtedness, Estimated Cash, Estimated Transaction Expenses,  Estimated Aggregate Deferred Revenue and Estimated Prepaid Expenses shall be calculated in accordance with the Applicable Accounting Principles.
		

		
			Section 2.6      Purchase Price Adjustments.
		

		
			(a)        Within 105 days after the Closing Date, the Buyer shall prepare, or cause to be prepared, and deliver to the Seller a written statement (the “Final Closing Statement”) that shall include and set forth a calculation in reasonable detail of the actual (A) Indebtedness (“Closing Indebtedness”), (B) Cash (“Closing Cash”), (C) Transaction Expenses (“Closing Transaction Expenses”),  (D) Aggregate Deferred Revenue (“Closing Aggregate Deferred Revenue”)  and (E) any Prepaid Expenses (such payments, “Closing Prepaid Expenses”) (with each of Closing Indebtedness, Closing Cash,  Closing Aggregate Deferred Revenue and Closing Prepaid Expenses determined as of 12:01 a.m. Eastern time on the Closing Date and, except for Closing Transaction Expenses, without giving effect to the transactions contemplated herein).  The Final Closing Statement (i) shall be prepared on a basis consistent with the Applicable Accounting Principles and (ii) shall be based exclusively on the facts and circumstances as they exist prior to the Closing and shall exclude the effects of any event, act, change in circumstances or similar development arising or occurring on (except with respect to Transaction Expenses) or after the Closing Date.  To the extent any actions following the Closing with respect to the accounting books and records of the Company on which the Final Closing Statement and the foregoing calculations are to be based are not consistent with the Applicable Accounting Principles, such changes shall not be taken into account in preparing the Final Closing Statement or calculating amounts reflected thereon.
		

		
			(b)        The Final Closing Statement shall become final and binding on the 45th day following delivery thereof, unless prior to the end of such period, the Seller delivers to the Buyer written notice of its disagreement (a “Notice of Disagreement”) specifying the nature and amount of any dispute as to the Closing Indebtedness, Closing Cash, Closing Transaction Expenses,  Closing Aggregate Deferred Revenue and/or Closing Prepaid Expenses, as set forth in the Final Closing Statement.  The Seller shall be deemed to have agreed with all items and amounts of Closing Indebtedness, Closing Cash, Closing Transaction Expenses,  Closing Aggregate Deferred Revenue and/or Closing Prepaid Expenses not specifically referenced in the Notice of Disagreement, and such items and amounts shall not be subject to review in accordance with Section 1.1(c).
		

		
			(c)        During the thirty (30) day period following delivery of a Notice of Disagreement by the Seller to the Buyer, the parties in good faith shall seek to resolve in writing any differences that they may have with respect to the calculation of the Closing Indebtedness, Closing Cash, Closing Transaction Expenses,  Closing Aggregate Deferred Revenue and/or Closing Prepaid Expenses as specified therein.  Any disputed items resolved in writing between
		

		
			
		

		
			

		 

		

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			the Buyer and the Seller within such 30-day period shall be final and binding with respect to such items, and if the Seller and the Buyer agree in writing on the resolution of each disputed item specified by the Seller in the Notice of Disagreement and the amount of the Closing Indebtedness, Closing Cash,  Closing Transaction Expenses,  Closing Aggregate Deferred Revenue and Closing Prepaid Expenses, the amounts so determined shall be final and binding on the parties for purposes of this Section 2.6.  If the Buyer and the Seller have not resolved all such differences by the end of such 30-day period, the Buyer and the Seller shall submit, in writing, to PricewaterhouseCoopers LLP or, if such firm is unable or unwilling to act, such other independent public accounting firm as shall be agreed in writing by the Seller and the Buyer (the “Independent Accounting Firm”), their briefs detailing their views as to the correct nature and amount of each item remaining in dispute and the amounts of the Closing Indebtedness, Closing Cash, Closing Transaction Expenses,  Closing Aggregate Deferred Revenue and/or Closing Prepaid Expenses, and the Independent Accounting Firm shall make a written determination as to each such disputed item and the amount of the Closing Indebtedness, Closing Cash,  Closing Transaction Expenses,  Closing Aggregate Deferred Revenue and/or Closing Prepaid Expenses.  The Buyer and the Seller shall use their commercially reasonable efforts to cause the Independent Accounting Firm to render a written decision resolving the matters submitted to it within thirty (30) days following the submission thereof.  The Independent Accounting Firm shall consider only those items and amounts in the Buyer’s and the Seller’s respective calculations of the Closing Indebtedness, Closing Cash,  Closing Transaction Expenses,  Closing Aggregate Deferred Revenue and/or Closing Prepaid Expenses that are identified as being items and amounts to which the Buyer and the Seller have been unable to agree.  The scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to correcting mathematical errors and determining whether the items and amounts in dispute were determined in accordance with the Applicable Accounting Principles and the Independent Accounting Firm is not to make any other determination, including any determination as to whether any estimates on the Preliminary Closing Statement are correct, adequate or sufficient.  In resolving any disputed item, the Independent Accounting 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 Independent Accounting Firm’s determination of the Closing Indebtedness, Closing Cash, Closing Transaction Expenses,  Closing Aggregate Deferred Revenue and Closing Prepaid Expenses shall be based solely on written materials submitted by the Buyer and the Seller (i.e., not on independent review).  The determination of the Independent Accounting Firm shall be conclusive and binding upon the parties hereto and shall not be subject to appeal or further review, absent manifest error.
		

		
			(d)        The fees and expenses of the Independent Accounting Firm shall be borne by the Seller and the Buyer in inverse proportion as they may prevail on the matters resolved by the Independent Accounting Firm.  The fees and disbursements of the Representatives of each party incurred in connection with the preparation or review of the Final Closing Statement and preparation or review of any Notice of Disagreement, as applicable, shall be borne by such party.
		

		
			(e)        Upon reasonable notice, the Buyer shall cause the Company and its Subsidiaries to afford the Seller and its Representatives reasonable access, during normal business hours and upon reasonable prior notice, to the properties, books and records of the Business and to any other information reasonably requested for purposes of preparing and reviewing the calculations contemplated by this Section 2.6;  provided,  however, that any such access or furnishing of information shall be conducted at the Seller’s expense, during normal business hours,
		

		
			
		

		
			

		 

		

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			under the supervision of the Buyer’s personnel and in such a manner as not unreasonably to interfere with the normal operations of the Business.  Notwithstanding anything to the contrary in this Agreement, none of the Buyer, the Company or any of its Subsidiaries shall be required to disclose any information to the Seller or its Representatives if (i) such disclosure would jeopardize any attorney-client or other legal privilege, (ii) such disclosure would contravene any applicable Laws or (iii) such information is pertinent to any litigation in which the Buyer or any of its Affiliates, on the one hand, and the Seller or any of its Affiliates, on the other hand, are adverse parties; provided,  however, that, in each case, the Buyer, the Company or any of its Subsidiaries, as the case may be, uses commercially reasonable efforts to minimize the effects of such restriction or to provide a reasonable alternative to such access.  The Buyer shall authorize its accountants to disclose work papers generated by its accountants in connection with preparing and reviewing the calculations specified in this Section 2.6;  provided, that such accountants shall not be obligated to make any work papers available except in accordance with such accountants’ disclosure procedures and then only after the non-client party has signed an agreement relating to access to such work papers in form and substance acceptable to such accountants.
		

		
			(f)        The Purchase Price shall be adjusted, upwards or downwards, as follows:
		

		
			(i)         For the purposes of this Agreement, the “Net Adjustment Amount” means an amount, which may be positive or negative, equal to (A) Estimated Indebtedness minus Closing Indebtedness as finally determined pursuant to this Section 2.6,  plus (B) Closing Cash as finally determined pursuant to this Section 2.6 minus Estimated Cash, plus (C) Estimated Transaction Expenses minus Closing Transaction Expenses as finally determined pursuant to this Section 2.6,  plus (D) Estimated Aggregate Deferred Revenue minus Closing Aggregate Deferred Revenue as finally determined pursuant to this Section 2.6 plus (E) Closing Prepaid Expenses as finally determined pursuant to this Section 2.6 minus Estimated Prepaid Expenses;
		

		
			(ii)       If the Net Adjustment Amount is positive, the Purchase Price shall be adjusted upwards in an amount equal to the Net Adjustment Amount, and the Buyer shall pay the Net Adjustment Amount to the Seller; and
		

		
			(iii)      If the Net Adjustment Amount is negative (in which case the “Net Adjustment Amount” for purposes of this clause (iii) shall be deemed to be equal to the absolute value of such amount), the Purchase Price shall be adjusted downwards in an amount equal to the Net Adjustment Amount, and the Seller shall pay the Net Adjustment Amount to the Buyer.
		

		
			(g)        Payments in respect of Section 1.1(f) shall be made within three (3) Business Days of final determination of the Net Adjustment Amount pursuant to the provisions of this Section 2.6 by wire transfer of immediately available funds to such account as may be designated in writing by the party entitled to such payment at least two Business Days prior to such payment date.
		

		
			(h)        For the avoidance of doubt, this Section 2.6 is not intended to be used to permit the introduction of different judgments, accounting methodologies (including with respect to accruals and reserves), policies, principals, practices, procedures or classifications for purposes of calculating amounts referred to in this Section 2.6, or to adjust for any inconsistencies between the Applicable Accounting Principles, on the one hand, and GAAP, on the other.
		

		
			
		

		
			

		 

		

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			Section 2.7      Earn-Out.
		

		
			(a)        The following terms shall have the following meanings as used in this Section 2.7:
		

		
			(i)         “Calculation Period” means each of Calculation Period 1, Calculation Period 2 and Calculation Period 3, as applicable.
		

		
			(ii)       “Calculation Period 1” means the period beginning on January 1, 2020 and ending on December 31, 2020.
		

		
			(iii)      “Calculation Period 2” means the period beginning on January 1, 2021 and ending on December 31, 2021.
		

		
			(iv)       “Calculation Period 3” means the period beginning on January 1, 2022 and ending on December 31, 2022.
		

		
			(v)        “Actual Cash Royalty Revenue”  means cash actually received by the Company or any of its Subsidiaries from licensees, customers or other counterparties of the Company or any of its Subsidiaries with respect to royalties or other payments relating to the portion of the Business engaged in promoting, marketing and licensing the Martha Stewart brand that relate to any specified period (including any Calculation Period) (such royalties or other payments, “Received Payments”); provided, that:
		

		
			(A)       for purposes of calculating Actual Cash Royalty Revenue with respect to any one-time Received Payments (i.e., with respect to advances, one-time “key” money or otherwise) in excess of $1,500,000 under product and merchandising license agreements, the amount thereof shall be amortized over a three (3) year period and only the amortized portion of such amount relating to a Calculation Period will be included in the calculation of Actual Cash Royalty Revenue for such Calculation Period (and any such amounts equal to or less than $1,500,000 shall not be amortized and shall be included in the calculation of Actual Cash Royalty Revenue as otherwise provided herein); and
		

		
			(B)       for purposes of calculating Actual Cash Royalty Revenue with respect to any one-time Received Payment in excess of $750,000 pursuant to media or other agreements, (x) if such payment is paid over multiple periods (including Calculation Periods) it shall be treated as any other Actual Cash Royalty Payment relating to such period (including any applicable Calculation Period) and (y) if such payment is paid in one Calculation Period, it shall be amortized over a five (5)  year period and only the amortized portion of such amount relating to a Calculation Period will be included in the calculation of Actual Cash Royalty Revenue for such Calculation Period (and any such amounts equal to or less than $750,000 shall not be amortized and shall be included in the calculation of Actual Cash Royalty Revenue as otherwise provided herein).
		

		
			In the event any amount is due from licensees of the Company or any of its Subsidiaries with respect to royalties that relate to multiple Calculation Periods (or one or more periods that are not Calculation Periods), the amount of Actual Cash Royalty Revenue deemed to relate to a given Calculation Period shall be a pro-rated portion of such amount based on the number of days in
		

		
			
		

		
			

		 

		

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			such Calculation Period as compared to the total number of days to which such royalty payment relates.  Received Payments with respect to any agreement containing payment terms calling for all payments under such agreement to be made in a single Calculation Period shall be deemed “one-time” Received Payments under this Section 2.7.  If any Received Payment relates to an agreement containing a talent fee, revenue share or other built-in payment to an entity other than the Buyer or the Company or any of its Subsidiaries, the amount of such Received Payment shall be calculated net of any such fee, revenue share or other built-in payment for the purposes of calculating Actual Cash Royalty Revenue (provided such amounts shall not include ordinary course advertising expenses or other amounts that may be paid to third parties retained by the Buyer, the Company or its Subsidiaries in respect of production costs, branding or other services).
		

		
			(b)        Earn-Out Payments.
		

		
			(i)         For each of Calculation Period 1, Calculation Period 2 and Calculation Period 3, regardless of the Actual Cash Royalty Revenue in any other specified period, the Seller will be entitled to receive a payment (each an “Earn-Out Payment” and collectively, the “Earn-Out Payments”) in an amount equal to (A) the amount by which the Actual Cash Royalty Revenue with respect to such Calculation Period exceeds $39,000,000, if any, multiplied by (B) five (5), which amount shall be paid by the Buyer by wire transfer of immediately available funds to the Seller within thirty (30) days following the final determination of the Actual Cash Royalty Revenue in such applicable Calculation Period; provided, that, for purposes of calculating any Earn-Out Payment for Calculation Period 2 or Calculation Period 3, the amount of the Actual Cash Royalty Revenue with respect to such Calculation Period shall be deemed to include any portion of the Actual Cash Royalty Revenue with respect to the Calculation Period immediately preceding such Calculation Period that (x) was not included in the calculation of the Actual Cash Royalty Revenue with respect to such immediately preceding Calculation Period and (y) was actually received by the Company or any of its Subsidiaries during Calculation Period 2 or Calculation Period 3 (as applicable).  For the avoidance of doubt, the Seller will not be entitled to receive an Earn-Out Payment in the event that the Actual Cash Royalty Revenue for the applicable Calculation Period does not exceed $39,000,000.
		

		
			(ii)       Notwithstanding anything to the contrary herein, the maximum aggregate amount payable by the Buyer to the Seller under this Section 2.7 shall be the Earn-Out Payment Cap.
		

		
			(c)        Review and Dispute Procedures.
		

		
			(i)         On or before February 15 of the year following the applicable Calculation Period, the Buyer shall submit to the Seller in writing the proposed calculation of the Actual Cash Royalty Revenue for such Calculation Period (the “Actual Cash Royalty Revenue Calculation”), together with supporting documentation reasonably necessary for the Seller review of such proposed Actual Cash Royalty Revenue Calculation.
		

		
			(ii)       The Seller shall have thirty (30) days following delivery by the Buyer of the proposed Actual Cash Royalty Revenue Calculation during which to notify the Buyer of any dispute of such proposed Actual Cash Royalty Revenue Calculation, which notice shall set forth in reasonable detail the basis for such dispute.  If the Seller does not notify the Buyer of any
		

		
			
		

		
			

		 

		

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			dispute within such thirty (30) day period, the Actual Cash Royalty Revenue Calculation provided by the Buyer pursuant to Section 2.7(c)(i) above shall be deemed to be final and binding on the Buyer and the Seller.  If the Seller does notify the Buyer of any dispute within such thirty (30) day period, the Buyer and the Seller shall cooperate in good faith to resolve such dispute as promptly as practicable, and upon such resolution, Actual Cash Royalty Revenue shall be determined in accordance with the mutual written agreement of the Buyer and the Seller.  If the Buyer and the Seller are unable to resolve any dispute regarding such Actual Cash Royalty Revenue Calculation within fifteen (15) days (or such longer period as the Buyer and the Seller shall mutually agree in writing) of notice of a dispute, the dispute shall be resolved by the Independent Accounting Firm.  Such resolution shall be final and binding on the Buyer and the Seller.  The Independent Accounting Firm shall use commercially reasonable efforts to complete its work within thirty (30) days of its engagement.  The fees, costs and expenses of the Independent Accounting Firm (A) shall be borne by the Buyer in the proportion that the aggregate dollar amount of all such disputed items so submitted that are unsuccessfully disputed by the Buyer (as finally determined by the Independent Accounting Firm) bears to the aggregate dollar amount of such items so submitted and (B) shall be borne by the Seller in the proportion that the aggregate dollar amount of such disputed items so submitted that are successfully disputed by the Buyer (as finally determined by the Independent Accounting Firm) bears to the aggregate dollar amount of all such items so submitted.  Within ten (10) Business Days after the final determination of Actual Cash Royalty Revenue for a given Calculation Period pursuant to this Section 2.7(c)(ii), the Buyer shall pay to the Seller, by wire transfer or delivery of immediately available funds, the amount of the Earn-Out Payment (if any) based on Actual Cash Royalty Revenue as so finally determined.  Any Earn-Out Payment earned by and payable to the Seller under this Section 2.7 may be paid by the Company on behalf of the Buyer.  Upon any such payment to the Seller the Buyer shall be fully released and discharged of any obligation with respect to the payment of such Earn-Out Payment.
		

		
			(d)        Calculation Period 3 True-Up.  On or before each of July 31, 2023 and February 15, 2024, the Buyer shall submit to the Seller in writing a proposed calculation (the “Post-Period 3 Actual Cash Royalty Revenue Calculation”) of the amount, if any, of Actual Cash Royalty Revenue with respect to Calculation Period 3 that (i) was not included in the final determination pursuant to Section 2.7(c) of the Actual Cash Royalty Revenue for Calculation Period 3 and (ii) was actually received by the Company or any of its Subsidiaries after December 31, 2022 in the case of the Initial Post-Period 3 True-Up Payment and after July 31, 2023 in the case of the Second Post-Period 3 True-Up Payment, together with supporting documentation reasonably necessary for the Seller’s review of such proposed Post-Period 3 Actual Cash Royalty Revenue Calculation (such amount, the “Post-Period 3 Actual Cash Royalty Revenue”).  The Post-Period 3 Actual Cash Royalty Revenue Calculation delivered by the Buyer pursuant to this Section 2.7(d) shall be subject to the review and dispute procedures set forth in Section 2.7(c)(ii) (other than the last two sentences thereof), which procedures shall apply thereto mutatis mutandis.  Within ten (10) Business Days after the final determination of the Post-Period 3 Actual Cash Royalty Revenue, the Buyer shall pay to the Seller, by wire transfer of immediately available funds, an amount equal to (x) the amount of the Earn-Out Payment (if any) that would have been payable with respect to Calculation Period 3 had the Post-Period 3 Actual Cash Royalty Revenue as so finally determined been included in the calculation of Actual Cash Royalty Revenue with respect to Calculation Period 3 pursuant to Section 2.7(b)(i), minus (y) the Earn-Out Payment (plus, in the case of the Second Post-Period 3 True-Up Payment, any Initial Post-Period 3 True-Up Payment), if any, previously paid to the Seller with respect to Calculation Period 3.  For the avoidance of
		

		
			
		

		
			

		 

		

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			doubt, any payment pursuant to this Section 2.7(d) shall be deemed to constitute an Earn-Out Payment for purposes of this Agreement and may be paid by the Company on behalf of the Buyer.  For purposes of this Section 2.7(d), any payment made pursuant to this Section 2.7(d) in respect of the Post-Period 3 Actual Cash Royalty Revenue Calculation delivered on or before July 31, 2023 shall be referred to herein as the “Initial Post-Period 3 True-Up Payment” and any payment made pursuant to this Section 2.7(d) in respect of the Post-Period 3 Actual Cash Royalty Revenue Calculation delivered after July 31, 2023 but on or before February 15, 2024 shall be referred to herein as the “Second Post-Period 3 True-Up Payment”.
		

		
			(e)        Operating and Accounting Procedures of the Company.
		

		
			(i)         Nothing contained in this Agreement shall be construed to restrict in any way the Buyer and its Affiliates from operating the Company or any of its Subsidiaries in the manner which the Buyer’s management and board of managers reasonably deems most beneficial for the Buyer and the Buyer’s equity holders, subject to the implied covenant of good faith and fair dealing; provided, that (x) in no event shall the Buyer take any action with the intent or purpose of avoiding the obligation to make any Earn-Out Payment, (y) the Buyer shall cause the Company and its Subsidiaries, as applicable, to maintain books and records during the Calculation Periods that are adequate in all material respects to permit the calculation and independent verification of the Actual Cash Royalty Revenue for each Calculation Period on a standalone basis, and (z) the Buyer shall cause the Company and its Subsidiaries to, subject to applicable Law and Contract, use commercially reasonable efforts to collect any Actual Cash Royalty Revenue hereunder to substantially the same extent as the Buyer would in the ordinary course of its business if the Earn-Out Payment were not payable, and shall not, except to the extent in the ordinary course of business consistent with past practices, offset any Actual Cash Royalty Revenue against amounts owed by the Buyer, the Company or any of their respective Subsidiaries or Affiliates or offer discounts that have the effect of reducing Actual Cash Royalty Revenue (provided, that, for the avoidance of doubt, this clause (z) shall not be deemed to require that the Buyer, the Company or any of its Subsidiaries commence, defend or participate in litigation to collect any Actual Cash Royalty Revenue).
		

		
			(ii)       At any time prior to the end of Calculation Period 3, in the event that (A) there is any (x) divestiture, dissolution or spin-off of a business that comprises all or substantially all of the assets of the portion of the Business engaged in promoting, marketing and licensing the Martha Stewart brand (taken as a whole), or (y) transaction or series of related transactions which result in a Person and its Affiliates (other than the Buyer or any of its Affiliates) holding, directly or indirectly, more than fifty percent (50%) of the outstanding equity voting securities of the Company or any of its Affiliates that succeed to that portion of the Business engaged in promoting, marketing and licensing the Martha Stewart brand (any such divestiture, dissolution, spin-off, transaction or series of related transactions described in the foregoing clauses (x) and (y), an “Acceleration Event”), and (B) the Aggregate Proceeds equals or exceeds the sum of $334,000,000,  then the Buyer shall pay to the Seller, by wire transfer of immediately available funds to an account designated in writing by the Seller, an amount equal to the Earn-Out Acceleration Amount;  provided, that upon any such payment to the Seller the Buyer shall be fully released and discharged of any obligation with respect to any Earn-Out Payment, including without limitation the payment in connection with the consummation of an Acceleration Event contemplated by this Section 2.7(e)(ii);  provided,  further, that, in connection with the
		

		
			
		

		
			

		 

		

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			consummation of any Acceleration Event in respect of which the Earn-Out Acceleration Amount is not paid pursuant to this Section 2.7(e)(ii), the Buyer shall cause the applicable acquirer or its Affiliates to assume in writing the obligations of the Buyer set forth in this Section 2.7.
		

		
			(iii)      All matters related to the calculation of Actual Cash Royalty Revenue shall be calculated in accordance with the definition set forth in Section 2.7(a)(v).
		

		
			Section 2.8      Seller Receivables Reconciliation and Final True-Up.
		

		
			(a)        On July 31, 2019, the Buyer shall pay or cause to be paid to the Seller any royalty revenue payment or other payments made to the Company or any of its Subsidiaries with respect to the Business to the extent such amounts relate to any period prior to the Closing Date (including made with respect to any accounts receivable of the Business outstanding as of the Closing Date)  (such payments, “Seller Receivables”), an illustrative schedule of which is provided in Section 2.8(a) of the Disclosure Schedules, and are received during the period beginning on the Closing Date and ending on June 30, 2019 and shall, concurrently with such payment, deliver to the Seller a statement setting forth a calculation of such payment in such reasonable detail to identify the royalty revenue accounts with respect to which such payments relate.
		

		
			(b)        On March 31, 2020, the Buyer shall pay or cause to be paid to the Seller any Seller Receivables received during the period beginning on July 1, 2019 and ending on March 15, 2020 and shall, concurrently with such payment, deliver to the Seller a statement setting forth a calculation of such payment in such reasonable detail to identify the royalty revenue accounts with respect to which such payment relates.
		

		
			(c)        On or before the 15th day after the Final True-Up Date, the Buyer shall pay or cause to be paid to the Seller an amount equal to (i) the amount of any Seller Receivables received during the period beginning on March 16, 2020 and ending on the date that is 12 months after the Closing Date (the “Final True-Up Date”),  minus (ii) the Seller Severance Responsibility Amount, minus (iii) the Seller Bonus Responsibility Amount (such difference, the “Final True-Up Amount”) (provided, that if the Final True-Up Amount is a negative number, the Seller shall pay or cause to be paid to the Buyer an amount equal to the absolute value of the Final True-Up Amount), and shall, concurrently with such payment (or with a demand for the Seller to make such payment to the Buyer if Buyer is so entitled pursuant to the foregoing proviso), deliver to the Seller a statement setting forth a calculation of the Final True-Up Amount in such reasonable detail to identify the royalty revenue accounts, severance payments and bonus payments with respect to which such Final True-Up Amount payment relates.
		

		
			(d)        In the event of a dispute with respect to any of the payments contemplated by this Section 2.8, the Buyer and the Seller shall submit, in writing, to the Independent Accounting Firm, their briefs detailing their views as to the correct nature and amount of each item in dispute, and the Independent Accounting Firm shall make a written determination as to each such disputed item.  The Buyer and the Seller shall use their commercially reasonable efforts to cause the Independent Accounting Firm to render a written decision resolving the matters submitted to it within thirty (30) days following the submission thereof.  The Independent Accounting Firm shall consider only those items and amounts in the Buyer’s and the Seller’s respective briefs that are identified as being items and amounts to which the Buyer and the Seller have been unable to agree.
		

		
			
		

		
			

		 

		

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			The scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to correcting mathematical errors and determining whether the items and amounts in dispute were determined in accordance with the Applicable Accounting Principles and the Independent Accounting Firm is not to make any other determination.  In resolving any disputed item, the Independent Accounting 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 Independent Accounting Firm’s determination of each item in dispute shall be based solely on written materials submitted by the Buyer and the Seller (i.e., not on independent review).  The determination of the Independent Accounting Firm shall be conclusive and binding upon the parties hereto and shall not be subject to appeal or further review, absent manifest error.
		

		
			Section 2.9      Tax Treatment; Allocation of Purchase Price.
		

		
			(a)        The Buyer, the Seller and Holdco, hereto acknowledge and agree that, for federal income tax purposes, the purchase of the Interests shall be treated as a purchase by the Buyer of all the assets of the Company (including all the assets of the Company’s Subsidiaries), subject to the liabilities of the Company and its Subsidiaries, from Holdco, for cash, in a fully taxable transaction.
		

		
			(b)        No later than 120 days after the Closing Date, the Buyer shall deliver to the Seller a proposed allocation of the Purchase Price and the liabilities of the Company treated as assumed by the Buyer for U.S. federal income tax purposes, among the assets of the Company in a manner consistent with Section 1060 of the Code and the regulations promulgated thereunder, and the principles set forth on Section 2.9(b) of the Disclosure Schedules, which shall be subject to the reasonable approval of the Seller, not to be unreasonably withheld, conditioned or delayed.  If the Seller has approved or not objected to the proposed allocation within fifteen (15) days after the delivery of the proposed allocation to the Seller, the proposed allocation shall become final and binding on the parties.  If within such fifteen (15) day period, the Seller provides to the Buyer a notice of objection to the proposed allocation, the parties shall negotiate in good faith to resolve such dispute.  If the parties are unable to resolve such dispute within thirty (30) days after the Seller’s delivery of a notice of objection to the Buyer, each of the Buyer and the Seller shall be entitled to adopt its own position regarding the allocation.
		

		
			ARTICLE III
		

		
			REPRESENTATIONS AND WARRANTIES OF THE SELLER
		

		
			Except as set forth in the Disclosure Schedules attached hereto (collectively, the “Disclosure Schedules”), the Seller hereby represents and warrants to the Buyer as follows (provided, that unless otherwise expressly provided for in any such representation or warranty, (x) each of the representations and warranties of the Seller set forth herein shall be deemed to be made as if the Reorganization has been consummated as of the date such representations and warranties are made hereunder and (y) for the avoidance of doubt, (1) the representations and warranties herein relate solely to the Company, each of its Subsidiaries and the Business and (2) in the event of an Emeril Termination Election, the representations and warranties herein relate solely to the Company, each of its Subsidiaries being acquired after taking into account the amendments hereto contemplated by Section 5.18, and that portion of the Business engaged in promoting, marketing and licensing the Martha Stewart brand):
		

		
			
		

		
			

		 

		

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			Section 3.1      Organization.
		

		
			(a)        The Seller is a corporation duly organized, validly existing and in good standing under the Laws of Delaware and has all necessary corporate power and authority to own, lease and operate its properties and to carry on its business as it is now being conducted.
		

		
			(b)        As of the Closing, Holdco will be a corporation duly organized, validly existing and in good standing under the Laws of Delaware and will have all necessary corporate power and authority to own, lease and operate its properties and to carry on its business as it will then be conducting.  Holdco will be a holding company formed for the purpose of consummating the Reorganization and will have no operations, assets or liabilities other than its ownership of the Interests.  Holdco will have no employees.
		

		
			(c)        As of the Closing, GP Holdco will be a limited liability company duly organized, validly existing and in good standing under the Laws of Delaware and will have all necessary limited liability company power and authority to own, lease and operate its properties and to carry on its business as it will then be conducting.  GP Holdco will be a holding company formed for the purpose of consummating the Reorganization and will have no operations, assets or liabilities other than its ownership of the GP Interests.  GP Holdco will have no employees.
		

		
			(d)        Each of the Company and its Subsidiaries is (a) duly organized, validly existing and in good standing under the Laws of its jurisdiction of organization, and has all necessary power and authority to own, lease and operate its properties and to carry on the Business as it is now being conducted and (b) duly qualified to do business, and is in good standing, in each jurisdiction set forth on Section 3.1(d) of the Disclosure Schedules, which jurisdictions are the only jurisdictions where the character of the properties owned, leased or operated by it or the nature of the Business makes such qualification necessary (except for any failures to be so qualified or in such good standing as would not, individually or in the aggregate, reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole).
		

		
			(e)        True and complete copies of the certificate of incorporation of the Company, as amended through, and as in effect as of, the date of this Agreement and the bylaws, as in effect as of, the date of this Agreement and the certificate of incorporation and bylaws (or comparable organizational documents of each of its Subsidiaries, in each case as amended to the date of this Agreement) have previously been made available to the Buyer.
		

		
			Section 3.2      Authority.
		

		
			(a)        The board of directors of the Seller has approved this Agreement and the Seller’s entry into this Agreement in accordance with the Seller’s certificate of incorporation, bylaws, other corporate governing documents and applicable Law.  Each of the Seller, the Company and its Subsidiaries has the corporate or other equivalent power and authority to execute and deliver this Agreement and each of the Signing Deliverables and Ancillary Agreements to which it is or will be a party, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby.  The execution, delivery and performance by the Seller of this Agreement and the execution, delivery and performance by each of the Seller, the Company and its Subsidiaries of each of the Signing Deliverables and Ancillary
		

		
			
		

		
			

		 

		

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			Agreements to which it is or will be a party and the consummation by such Person of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary corporate or other equivalent action.  This Agreement has been duly executed and delivered by the Seller, and each of the Signing Deliverables to which the Seller, the Company or any of its Subsidiaries are a party have been, and upon their execution each of the Ancillary Agreements to which the Seller, the Company or any of its Subsidiaries will be a party will have been, duly executed and delivered by such Person, and, assuming due execution and delivery by each of the other parties hereto and thereto, this Agreement constitutes the legal, valid and binding obligations of the Seller and each of the Signing Deliverables to which the Seller, the Company or any of its Subsidiaries is a party constitute, and upon their execution each of the Ancillary Agreements to which the Seller, the Company or any of its Subsidiaries will be a party will constitute, the legal, valid and binding obligations of such Person, in each case enforceable against such Person in accordance with their respective terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether considered in a proceeding in equity or at law).
		

		
			(b)        The transactions contemplated by this Agreement and the Ancillary Agreements do not constitute a sale of all or substantially all of the assets of the Seller under applicable Law and there is no required approval of the stockholders of the Seller with respect to such transactions.
		

		
			Section 3.3      No Conflict; Required Filings and Consents.
		

		
			(a)        Except as set forth in Section 3.3(a) of the Disclosure Schedules, the execution, delivery and performance of this Agreement by the Seller and each of the Signing Deliverables and Ancillary Agreements by the Seller, the Company or any of its Subsidiaries (as the case may be), and the consummation of the transactions contemplated hereby and thereby, do not and will not (i) conflict with or violate the certificate of formation, operating agreement or equivalent organizational documents of the Seller, the Company or any of its Subsidiaries; (ii) conflict with or violate any Law applicable to the Seller, the Company, any of its Subsidiaries, the Business or by which any property or asset of the Seller, the Company or any of its Subsidiaries is bound or affected; (iii) conflict with, result in any breach of, constitute a default (or an event that, with notice or lapse of time or both, would become a default) under, or cause the termination, cancellation, acceleration or other change of any right or obligation or the loss of any benefit to which the Seller, the Company, any of its Subsidiaries or the Business is entitled under, or require any consent of or notice to any Person pursuant to, any material loan or credit agreement, note, mortgage, indenture, lease or other material Contract to which the Seller, the Company, any of its Subsidiaries or the Business is a party or otherwise bound; or (iv) result in the creation or imposition of any Encumbrance (other than Permitted Encumbrances) on any asset of the Seller, the Company, any of its Subsidiaries or the Business, except, in the case of (iii), for any such conflicts, violations, breaches, defaults or other occurrences that would not, individually or in the aggregate, reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole, or prevent or materially delay the consummation of the transactions contemplated by this Agreement.
		

		
			
		

		
			

		 

		

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			(b)        Neither the Seller, the Company nor any of its Subsidiaries is required to file, seek or obtain any notice, authorization, approval, order, permit or consent of or with any Governmental Authority in connection with the execution, delivery and performance of this Agreement and each of the Signing Deliverables and Ancillary Agreements or the consummation of the transactions contemplated hereby or thereby, except (i) for any filings required to be made under the HSR Act, (ii) for such filings as may be required by any applicable federal or state securities or “blue sky” Laws, or (iii) where failure to obtain such consent, approval, authorization or action, or to make such filing or notification, would not, individually or in the aggregate, reasonably be expected to be material to the Business.
		

		
			Section 3.4      Interests.  As of the date hereof, the Seller is the record and beneficial owner of the Shares, free and clear of any Encumbrances (other than those under generally applicable securities Laws).  As of the Closing, Holdco shall be the record and beneficial owner of the Interests and GP Holdco shall be the record and beneficial owner of the Company GP Interests, in each case free and clear of any Encumbrances (other than those under generally applicable securities Laws).  Holdco shall have the right, authority and power to sell, assign and transfer the Interests to the Buyer.  Upon the Buyer’s payment of the Estimated Purchase Price, the Buyer shall acquire good and valid title to the Interests, free and clear of any Encumbrances, other than Encumbrances under generally applicable securities Laws and as created by the Buyer.  No shares of capital stock or other equity or ownership interests of the Company or any of the Subsidiaries of the Company are subject to or have been issued in violation of any rights, agreements, arrangements or commitments under any provision of applicable Law, the certificate of incorporation or bylaws or equivalent organizational documents of the Company or any of the Subsidiaries of the Company or any Contract to which the Company or any of the Subsidiaries of the Company is a party or by which the Company or any of the Subsidiaries of the Company is bound.  As of the date of this Agreement, there are no declared or accrued but unpaid dividends with respect to the Shares and as of the Closing there shall be no declared or accrued but unpaid dividends with respect to the Interests.
		

		
			Section 3.5      Capitalization.  Section 3.5 of the Disclosure Schedules sets forth a true and complete list of all issued and outstanding equity interests in the Company.  All of the Company’s issued and outstanding equity interests are validly issued, fully paid and nonassessable.  As of the date hereof, the Shares constitute all of the issued and outstanding equity interests of the Company.  As of the Closing, the Company LP Interests and the Company GP Interests will constitute all of the issued and outstanding equity interests of the Company.  There are no outstanding obligations, options, warrants, convertible securities or other rights, agreements, arrangements or commitments of any kind relating to the interests of the Company or obligating the Company to issue or sell any interest in the Company.  There are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any interest in the Company or to provide funds to, or make any investment in, any other Person.  There are no agreements or understandings in effect with respect to the voting or transfer of any interests of the Company.
		

		
			Section 3.6      Equity Interests.  Section 3.6 of the Disclosure Schedules sets forth a true and complete list of each Subsidiary of the Company, including its jurisdiction of organization and authorized and outstanding equity securities.  All of the issued and outstanding shares of capital stock or other equity ownership interests of each Subsidiary of the Company are owned by the Company (or, with respect to the Subsidiary GP Interests as of the Closing, GP Holdco) free and
		

		
			
		

		
			

		 

		

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			clear of any Encumbrances (other than those under generally applicable securities Laws), and free of any restriction on the right to vote, sell or otherwise dispose of such capital stock or other equity ownership interest (other than restrictions under generally applicable securities Laws), and all of such shares or equity ownership interests are duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights.  Except for the capital stock or other ownership interests of the Subsidiaries of the Company owned by the Company or as set forth on Section 3.6 of the Disclosure Schedules, neither the Company nor any of its Subsidiaries directly or indirectly owns any equity, partnership, membership or similar interest in, or any interest convertible into, exercisable for the purchase of or exchangeable for any such equity, partnership, membership or similar interest in, any Person.  There are no outstanding contractual obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any interest in any Person or to provide funds to, or make any investment in, any other Person.  There are no agreements or understandings in effect with respect to the voting or transfer of any interests of or any of the Company’s Subsidiaries.
		

		
			Section 3.7      Financial Statements; No Undisclosed Liabilities.
		

		
			(a)        Section 3.7(a) of the Disclosure Schedules sets forth true and complete copies of the unaudited consolidated income statement of the Company for the fiscal years ended December 31, 2018 and December 31, 2017 used in connection with preparing the corresponding audited financial statements of the Seller (collectively, the “Financial Statements”).
		

		
			(b)        The Financial Statements (including the notes thereto): (i) are consistent with, and were prepared from, the books and records of the Company and its Subsidiaries; (ii) fairly present in all material respects the results of operations of the Company and its Subsidiaries as of the dates and for the periods indicated therein; and (iii) were prepared in accordance with GAAP, consistently applied, except as set forth on Section 3.7(b) of the Disclosure Schedules.
		

		
			(c)        The Seller has established and maintains and, since the Look-Back Date, has maintained in all material respects, disclosure controls sufficient to reasonably ensure that material information relating to the Company, its Subsidiaries and the Business (including any deficiencies or weaknesses in the design or operation of the Company’s or any of its Subsidiaries’ internal controls and any fraud that involves management or other employees or agents of the Business) is made known to the Company’s management by others within the Business and disclosed to the Company’s board of directors.
		

		
			(d)        Set forth on Section 3.7(d) of the Disclosure Schedules is an aging of accounts receivable of the Business as of February 28, 2019.  All of the accounts receivable of the Business arose in the ordinary course of business and are carried on the accounting records of the Company and its Subsidiaries at values determined in accordance with GAAP, consistently applied.  To the Knowledge of the Seller, there is no Encumbrance on any such accounts receivable, and no request or agreement for deduction or discount has been made with respect to any such accounts receivable.  None of the accounts receivable of the Business have been assigned or pledged to any other Person, and no further goods are required to be provided and no further services are required to be rendered in order to complete the sales and fully render the services so as to entitle the Company or its Subsidiary, as applicable, to collect the accounts receivable in full.
		

		
			
		

		
			

		 

		

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			(e)        There is no liability of the Company or any of its Subsidiaries of a type required to be reflected or reserved for on a consolidated balance sheet of the Company or in the notes thereto prepared in accordance with GAAP, except for (i) liabilities reflected or reserved for in the Financial Statements as of and for the twelve (12) month period ended December 31, 2018, (ii) liabilities that have arisen since January 31, 2019 in the ordinary course of the operation of the Business, (iii) liabilities arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby, or (iv) liabilities that would not be or would not reasonably be expected to be, individually or in the aggregate, material to the Company and its Subsidiaries, taken as a whole.
		

		
			Section 3.8      Absence of Certain Changes or Events.  Except as set forth in Section 3.8 of the Disclosure Schedules, from February 28, 2019 through the date of this Agreement, (a) the Business has been conducted, in all material respects, in the ordinary course of business consistent with past practice, (b) no physical damage, physical destruction or physical loss in an amount exceeding $100,000 in the aggregate (whether or not covered by insurance) has affected the Company or any of its Subsidiaries, any properties or assets of the Company or any of its Subsidiaries or the Business, (c) none of the Company, any of its Subsidiaries or any of their respective Affiliates has taken, or caused or permitted to be taken, or agreed or committed to take, any action that, were it taken between the date of this Agreement and the Closing Date, would constitute a breach of any subsection of Section 5.2; and (d) there has been no Material Adverse Effect or Emeril Lagasse Material Adverse Effect.
		

		
			Section 3.9      Compliance with Law; Permits.
		

		
			(a)        Each of the Company, its Subsidiaries and the Business is and, since the Look-Back Date has been, in compliance in all material respects with all Laws applicable to it.  None of the Company nor any of its Subsidiaries nor to the Knowledge of the Seller, any other Person, has received any notice or other communication since the Look-Back Date regarding any actual, alleged or potential failure of the Company or any of its Subsidiaries (or the Business or any assets or properties of Company or any of its Subsidiaries) to comply with any applicable Law.
		

		
			(b)        Section 3.9(b) of the Disclosure Schedules sets forth a true, complete and accurate list of all permits, licenses, franchises, approvals, certificates, consents, waivers, concessions, exemptions, orders, registrations and other authorizations of any Governmental Authority that are material to the Company, any of its Subsidiaries, any assets or properties of the Company or any of its Subsidiaries, or the Business and held by the Company or any of its Subsidiaries as of the date of this Agreement (the “Permits”).  The Permits constitute all material permits, licenses, franchises, approvals, certificates, consents, waivers, concessions, exemptions, orders, registrations and other authorizations of any Governmental Authority required for the operation of the Business as currently conducted and for the use of the assets and properties of the Company and any of its Subsidiaries as currently used.  Seller has made available to the Buyer a true, complete and accurate copy of all such Permits.  All such Permits are, and immediately following the Closing will be, valid and in full force and effect on terms identical in all material respects to those under which, immediately before the Closing (and as of the date of this Agreement), the Company or any of its Subsidiaries holds such Permits, in each case without breaching the terms thereof or resulting in the forfeiture or impairment of any rights thereunder and, except as set forth on Section 3.9(b) of the Disclosure Schedules, without the consent or act
		

		
			
		

		
			

		 

		

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			of, or the making of any filing with, any other Person.  The Company and its Subsidiaries comply, and since the Look-Back Date have at all times complied, in all material respects with the terms of the Permits listed on Section 3.9(b) of the Disclosure Schedules.  Neither the Company nor any of its Subsidiaries nor, to the Knowledge of the Seller, any other Person, has received any written or, to the Knowledge of the Seller, oral notice or other communication since the Look-Back Date regarding any actual or possible material failure to comply with any such Permit or any actual or possible revocation, withdrawal, suspension, cancellation, termination or material modification of any such Permit.
		

		
			(c)        No representation or warranty is made under this Section 3.9 with respect to Employee Plans, Taxes or environmental matters, which are covered exclusively by Section 3.11,  Section 3.17  (and Section 3.11),  and Section 3.18, respectively.
		

		
			Section 3.10    Litigation.  Except as set forth in Section 3.10 of the Disclosure Schedules, since the Look-Back Date, there has not been, and as of the date hereof there is not currently, pending, or, to the Knowledge of the Seller, threatened, any Action by or against or relating to the Company, any of its Subsidiaries, any assets or properties of the Company or any of its Subsidiaries, or the Business that would, or would reasonably be expected to, (a) result in any liability of the Company, any of its Subsidiaries or the Business, individually or in the aggregate, in excess of $100,000 or (b) that would affect the legality, validity or enforceability of this Agreement, any Signing Deliverable or any Ancillary Agreement or the consummation of the transactions contemplated hereby or thereby.  There are no material outstanding Orders and no unsatisfied judgments, penalties or awards against or affecting the Company, any of its Subsidiaries, any asset or property of the Company or any of its Subsidiaries, or the Business.  Since the Look-Back Date, the Company has complied in all material respects with each Order to which Company, any of its Subsidiaries, the Business, or any assets or properties owned or used by Company or any of its Subsidiaries, have been subject.  Neither the Company nor any of its Subsidiaries nor, to the Knowledge of the Seller, any other Person has received any written or, to the Knowledge of the Seller, oral notice or other communication since the Look-Back Date regarding: (i) any Order against or affecting the Company, any of its Subsidiaries, any asset or property of the Company or any of its Subsidiaries, or the Business; or (ii) any actual, alleged or potential failure to comply with any Order to which the Company, any of its Subsidiaries, the Business, or any assets or properties owned or used by the Company or any of its Subsidiaries, have at any time been subject.
		

		
			Section 3.11    Employee Benefit Plans.
		

		
			(a)        Section 3.11(a) of the Disclosure Schedules sets forth (i) a list of all material U.S. employee benefit plans (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)) and all material bonus, option, equity purchase, restricted equity, incentive, deferred compensation, retiree medical or life insurance, supplemental retirement, severance or other benefit plans, programs or arrangements, that are maintained, contributed to or sponsored by the Seller or the Company or any of its Subsidiaries for the benefit of any current or former employee of the Business or of the Company or any of its Subsidiaries and (ii) a list of all material employment, termination, severance or other Contracts, agreements or arrangements, pursuant to which the Company, any of its Subsidiaries or the Business currently has any obligation in excess of $100,000 with respect to any current or former employee of the
		

		
			
		

		
			

		 

		

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			Business or of the Company or any of its Subsidiaries (collectively, the “Employee Plans”).  The Seller has made available to the Buyer a true and complete copy of each Employee Plan and all current summary plan descriptions, as applicable, and the most recent determination or opinion letter from the IRS with respect to any Employee Plan.
		

		
			(b)        Each Employee Plan has been maintained in all material respects in accordance with its terms and the requirements of ERISA and the Code.  Each of the Seller, the Company and each of its Subsidiaries have performed all material obligations required to be performed by it under any Employee Plan and is not in any material respect in default under or in violation of any Employee Plan.  No Action (other than claims for benefits in the ordinary course) is pending or, to the Knowledge of the Seller, threatened with respect to any Employee Plan by any current or former employee, officer or director of the Business or of the Company or any of its Subsidiaries.
		

		
			(c)        Each Employee Plan that is intended to be qualified under Section 401(a) of the Code has received a determination or opinion letter from the IRS that it is so qualified and each related trust that is intended to be exempt from federal income taxation under Section 501(a) of the Code has received a determination or opinion letter from the IRS that it is so exempt and, to the Knowledge of the Seller, no fact or event has occurred since the date of such letter or letters from the IRS that would reasonably be expected adversely to affect the qualified status of any such Employee Plan or the exempt status of any such trust.
		

		
			(d)        Except as set forth in Section 3.11(d) of the Disclosure Schedules, neither the Company nor any of its ERISA Affiliates has any direct or contingent liability with respect to any “employee pension benefit plan” (as defined in Section 3(2) of ERISA) that is subject to Title IV of ERISA or Section 412 or 430 of the Code.
		

		
			(e)        Neither the Seller nor the Company nor any of its Subsidiaries is a party to any contract, agreement or arrangement that could result, separately or in the aggregate, in the payment, acceleration or enhancement of any benefit to a current or former employee of the Business or of the Company or any of its Subsidiaries as a result of the transactions contemplated by this Agreement, including, without limitation, the payment of any “excess parachute payments” within the meaning of Section 280G of the Code.
		

		
			(f)        Each Employee Plan available to employees of the Business or of the Company or any of its Subsidiaries residing outside of the United States (i) that is required to be registered has been so registered, (ii) has been maintained in good standing with applicable regulatory authorities and (iii) has been maintained in all material respects in accordance with its terms.
		

		
			(g)        Section 3.11(g) of the Disclosure Schedules sets forth true and complete copies of (i) the Martha Stewart Employment Agreement, and (ii) the Emeril Lagasse Consulting Agreement.  Each of the Martha Stewart Employment Agreement and the Emeril Lagasse Consulting Agreement is in full force and effect and, except as set forth in the Signing Deliverables, has not been amended, restated or otherwise modified.  Neither the Company nor, to the Knowledge of the Seller, any other party to the Martha Stewart Employment Agreement or the Emeril Lagasse Consulting Agreement is in material breach thereof or default thereunder.
		

		
			
		

		
			

		 

		

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			(h)        The representations and warranties contained in this Section 3.11 are the only representations and warranties being made with respect to Employee Plans, ERISA and employee benefits matters.
		

		
			Section 3.12    Labor and Employment Matters.
		

		
			(a)        Neither the Company nor any of its Subsidiaries is a party to any labor or collective bargaining Contract that pertains to employees of the Business.  To the Knowledge of the Seller, (a) there are, and in the past two years there have been, no organizing activities or collective bargaining arrangements that would affect the Business pending or under discussion with any labor organization or group of employees of the Business and (b) there are, and in the past two years there have been, no material lockouts, strikes, slowdowns or work stoppages pending or threatened by or with respect to any employees of the Company or any of its Subsidiaries.
		

		
			(b)        The Seller, the Company and each of their respective Subsidiaries are, and, since the Look-Back Date have been, in compliance in all material respects with all applicable Laws respecting labor, employment, fair employment practices, terms and conditions of employment, classification of employees, workers’ compensation, occupational safety and health, immigration, affirmative action, employee and data privacy, and wages and hours, in each case in respect of current and former employees of the Business or of the Company or any of its Subsidiaries.  There is no pending or, to the Knowledge of the Seller, threatened, charge, complaint, arbitration, audit or investigation involving any current of former employee of the Business or of the Company or any of its Subsidiaries that involves labor or employment relations or practices that could reasonably be expected to result, individually or in the aggregate, in any material liability to the Company or any of its Subsidiaries.  No officer or other key employee of the Business or of the Company or any of its Subsidiaries has provided a written notice of his or her intention to terminate employment with any of the Business, the Seller or any of its Subsidiaries.
		

		
			(c)        Neither the Seller nor any of its Subsidiaries has taken any action that could constitute a “mass layoff”, “mass termination” or “plant closing” within the meaning of the WARN Act, any action that would reasonably be expected to cause the Buyer to incur any material liability or obligation following the Closing under the WARN Act, or otherwise trigger notice requirements, liabilities or obligations under any plant closing notice, redundancy or collective dismissal Law.
		

		
			(d)        Section 3.12(d)(1) of the Disclosure Schedules sets forth a true, complete and accurate list of all Affected Employees as of the date of this Agreement, specifying, to the Knowledge of the Seller, with respect to each such Affected Employee, such Affected Employee’s (i) name, (ii) date of hire, (iii) job title, (iv) hourly rate of compensation or base salary (as applicable), (v) actual incentive compensation (commission and bonus, as applicable) with respect to 2018,  (vi) target incentive compensation (commission and bonus, as applicable) with respect to 2019,  (vii) any other compensation or allowance to which such Affected Employee is entitled or receives in the ordinary course of business, if any, (viii) any change of control, retention, severance or similar payments to which such Affected Employee will be entitled as a result of the transactions contemplated by this Agreement, (ix) annual vacation entitlement, (x) amount of accrued but
		

		
			
		

		
			

		 

		

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			unused vacation, (xi) exempt or nonexempt status under applicable Law and (xii) hours of work per week (for non-exempt and part-time employees).  Except as set forth on Section 3.12(d)(2) of the Disclosure Schedules, all Affected Employees are “at will employees”.
		

		
			Section 3.13    Insurance.   Section 3.13 of the Disclosure Schedules sets forth a true and complete list of all material insurance policies in force that insure the Business and are maintained by the Company or any of its Subsidiaries (the “Insurance Policies”).  The Seller has provided the Buyer with a true and complete copy of each of the Insurance Policies.  All premiums due and payable under the Insurance Policies have been timely paid, and the Seller, the Company and their respective Subsidiaries are otherwise in compliance in all material respects with the terms of the Insurance Policies.  There is no material claim pending under any Insurance Policy as to which coverage has been questioned, denied or disputed in writing by the underwriters of such Insurance Policy.  All the Insurance Policies remain in full force and effect, and, to the Knowledge of the Seller, there is no threatened termination of, or material premium increase with respect to, any of the Insurance Policies.
		

		
			Section 3.14    Real Property.
		

		
			(a)        Neither the Seller nor any of its Affiliates (including the Company and its Subsidiaries) own any real property used or held for use exclusively in relation to the Business.
		

		
			(b)        Section 3.14(b) of the Disclosure Schedules lists the street address of each parcel of Leased Real Property that is used by the Company, any of its Subsidiaries or the Business, together with a true and complete description of each lease, sublease or license and all amendments, extensions, renewals, guarantees, modifications, supplements or other agreements with respect to the Leased Real Property (the “Leases”).  The Seller has made available to the Buyer a true, correct and complete copy of all of the Leases.  The Company and its Subsidiaries have valid leasehold interests in all Leased Real Property pursuant to the Leases, free and clear of all Encumbrances, other than Permitted Encumbrances.  All Leases in respect of the Leased Real Property are in full force and effect, neither the Seller nor any of its Subsidiaries has received any written or, to the Knowledge of the Seller, oral notice of a breach or default thereunder, and to the Knowledge of the Seller, no event has occurred that, with notice or lapse of time or both, would constitute a breach or default thereunder.
		

		
			(c)        Section 3.14(c) of the Disclosure Schedules lists those parcels of Leased Real Property at which employees and/or other resources of both the Business and the Seller (or an Affiliate of the Seller other than the Company or any of its Subsidiaries) are co-located.
		

		
			Section 3.15    Intellectual Property.
		

		
			(a)        Section 3.15(a) of the Disclosure Schedules sets forth an accurate and complete list of all registered Marks, Copyrights and Patents; all applications for registration of Marks, Copyrights and Patents; all material domain names and material social media accounts; and all material proprietary software owned by the Company or any of its Subsidiaries or used or held for use in the Business as of the date hereof (collectively, the “Business Registered IP”).
		

		
			(b)        Except as set forth in Section 3.15(b) of the Disclosure Schedules, no Business Registered IP is involved in any interference, reissue, reexamination, opposition or
		

		
			
		

		
			

		 

		

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			cancellation proceeding or Action, and has not been involved in any of the foregoing since the Look-Back Date, and, to the Knowledge of the Seller, no such proceeding has been threatened.  Except as set forth in Section 3.15(b) of the Disclosure Schedules, there are no Actions pending or, to the Knowledge of the Seller, threatened challenging the Company’s or any of its Subsidiaries’ inventorship, ownership, or right to use Intellectual Property or asserting that any of the Company’s or any of its Subsidiaries’ Intellectual Property is invalid or unenforceable.
		

		
			(c)        The Business Registered IP has been properly maintained and all applicable filing, examination, issuance, post registration and maintenance fees, annuities and the like associated with or required with respect to any of the Business Registered IP have been paid.
		

		
			(d)        The Company or one of its Subsidiaries exclusively owns or has a valid and enforceable right to access and use, free and clear of all Encumbrances (except the Permitted Encumbrances), all right, title and interest in and to all material Intellectual Property necessary to the operation of the Business.
		

		
			(e)        Except as set forth in Section 3.15(e) of the Disclosure Schedules, the Business Registered IP is valid, subsisting, in full force and effect and, to the Knowledge of the Seller, enforceable.
		

		
			(f)        All tangible materials embodying Intellectual Property that are necessary to the conduct of the Business as currently conducted are owned by the Company or one of its Subsidiaries, or the Company and its Subsidiaries have a valid license or other right to use and access such materials in the Business.
		

		
			(g)        Except as set forth in Section 3.15(g) of the Disclosure Schedules, none of the products or services distributed, sold or offered by the Company, any of its Subsidiaries or the Business, nor any technology or materials used in connection therewith infringes upon, misappropriates or otherwise violates any Intellectual Property of any third party, and neither the Seller nor the Company nor any of their respective Subsidiaries has, since the Look-Back Date, received any written, or, to the Knowledge of the Seller, oral notice asserting that any such infringement, misappropriation or violation has occurred or otherwise challenging the Company’s or any of its Subsidiaries’ inventorship, ownership or right to use Intellectual Property.  To the Knowledge of the Seller, no third party is misappropriating, infringing or otherwise violating any Intellectual Property owned by the Company or any of its Subsidiaries or used in the Business and has not done so since the Look-Back Date.
		

		
			(h)        Except as would not reasonably be expected to be material, (i) the Company and its Subsidiaries: (A) have taken reasonable steps in accordance with standard industry practices to protect their rights in the Business Registered IP; and (B) have maintained the confidentiality, secrecy and value of all confidential information and trade secrets used in the operation of the Business, and (ii) to the Knowledge of the Seller, no unauthorized disclosure of such confidential information or trade secrets has occurred.
		

		
			(i)         The Company or one of its Subsidiaries has the exclusive right to sell, license or otherwise transfer the Business Registered IP.  All assignments and other instruments necessary to establish, record and perfect the Company’s and its Subsidiaries’ ownership interest
		

		
			
		

		
			

		 

		

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			in the Business Registered IP have been validly executed and filed with the applicable Governmental Authority.
		

		
			(j)         The Company, each of its Subsidiaries and the Business are in compliance in all material respects with all applicable Laws, including the General Data Protection Regulations, contracts, and terms of use and privacy policies governing the collection, processing, storage, use, transmission, disclosure, securing and destruction of data (“Data Handling”).  The Company, each of its Subsidiaries and the Business have policies and procedures governing sensitive data and Data Handling that comply in all material respects with all applicable Laws and contracts of the Company, its Subsidiaries and the Business and no sensitive data handled by the Company, any of its Subsidiaries or the Business has been inappropriately accessed, acquired or compromised in any material respect.
		

		
			(k)        The Company, each of its Subsidiaries and the Business have materially complied with all applicable terms of use, terms of services, and other contracts and associated policies and guidelines concerning the use of any social media platforms, site or services in the conduct of the Business and there are no pending or, to the Knowledge of the Seller, threatened legal actions or claims concerning any of the Company’s, any of its Subsidiaries’ or the Business’s social media platforms.
		

		
			(l)         To the Knowledge of the Seller, promptly following the Closing, the Business Registered IP will be owned or available for use by the Company and its Subsidiaries on the same terms as were owned or available for use immediately prior to the Closing.
		

		
			Section 3.16    Sufficiency of Assets; Tangible Assets.
		

		
			(a)        Except as set forth in Section 3.16(a) of the Disclosure Schedules, the assets of the Company and its Subsidiaries comprise the assets required to operate the Business in all material respects as currently conducted.
		

		
			(b)        Section 3.16(b) of the Disclosure Schedules sets forth a true, correct and complete list of certain equipment (including certain cameras, lighting and other photography, videography and production equipment), kitchen appliances (including any refrigerators, freezers, ovens and stoves), kitchenware, dishware, silverware, furniture, computers, servers, printers, media and multimedia archives (including any archived videos, books, magazines and similar media and multimedia), prototypes, templates, samples and other material tangible personal property owned by the Company or one of its Subsidiaries or used or held for use in the Business as of the date of this Agreement.  The Company or one of its Subsidiaries has good, valid and exclusive title to all such tangible personal property and all assets reflected on the Financial Statements as of and for the twelve (12) month period ended December 31, 2018 or acquired after the date thereof, in each case free and clear of all Encumbrances (other than Permitted Encumbrances).  All tangible personal property used or held for use by the Company or any of its Subsidiaries is in all material respects in good operating condition and repair, ordinary wear and tear excepted.
		

		
			
		

		
			

		 

		

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			Section 3.17    Taxes.
		

		
			(a)        All material Returns required to have been filed by or with respect to the Company and any of its Subsidiaries (and all material income Returns required to have been filed by the Seller for each taxable period during which the Company or any of its Subsidiaries was a member of the Seller’s affiliated group) have been timely filed (taking into account any extension of time to file).  All such Returns are true, correct and complete in all material respects.  All material Taxes due and owing (whether or not shown to be payable on such Returns) have been timely paid in full.
		

		
			(b)        All material Taxes which were required to be withheld and remitted by or with respect to, the Company or any of its Subsidiaries under applicable Law in connection with any amounts paid or owing to any employee, independent contractor, creditor, shareholder, member or other Person have been duly withheld and timely remitted to the proper Governmental Authority and all reporting and recordkeeping requirements relating to the Taxes described in this Section 3.17(b) have been complied with in all material respects.
		

		
			(c)        Except as set forth on Section 3.17(c) of the Disclosure Schedules, none of the Company or any of its Subsidiaries is currently the beneficiary of any extension of time within which to file any Return.
		

		
			(d)        There are no Tax liens on the assets or equity interests of the Company or any of its Subsidiaries (other than for Taxes not yet due and payable).
		

		
			(e)        (i) No federal, state, local or foreign audits, examinations, investigations or other administrative proceedings or court proceedings are presently pending with regard to any Return of the Company or any of its Subsidiaries, and no written notice of any such audit or examination has been received and (ii) no material audit adjustments have been proposed by any taxing authority for the Company or any of its Subsidiaries.
		

		
			(f)        There are no outstanding requests, agreements, consents or waivers to extend the statutory period of limitations applicable to the assessment of any Taxes or deficiencies against the Company or any of its Subsidiaries.
		

		
			(g)        No written claim has been made by a Governmental Authority in a jurisdiction where a Return has not been filed with respect to the Company or any of its Subsidiaries that a Tax is due in that jurisdiction.
		

		
			(h)        Except as set forth on Section 3.17(h) of the Disclosure Schedules, none of the Company or any of its Subsidiaries is a party to any agreement relating to the sharing, allocation or indemnification of Taxes, or any similar agreement, Contract or arrangement (other than agreements or arrangements entered into in the ordinary course of business the primary purpose of which is not related to Tax), or has any material liability for Taxes of any Person (other than any member of the group the common parent of which is the Seller) under Treasury Regulation Section 1.1502-6 or any similar provision of state, local or non-U.S. Law, or as a transferee or successor, or otherwise.
		

		
			
		

		
			

		 

		

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			(i)         None of the Buyer, the Company or any of its Subsidiaries will be required to include any material item of income in, or exclude any material item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any installment sale or open transaction consummated prior to Closing, Contract entered into on or prior to the Closing Date (other than any Contract entered into in the ordinary course of business the principal purpose of which is unrelated to Taxes), prepaid amount received, or method of accounting or Tax election changed or revoked, on or prior to the Closing.
		

		
			(j)         Except as set forth on Section 3.17(j) of the Disclosure Schedules, none of the Company or any of its Subsidiaries own shares of any “controlled foreign corporation” (as defined in Section 957 of the Code) or shares of any “passive foreign investment company” (as defined in Section 1297 of the Code), or has a permanent establishment or otherwise has an office or fixed place of business in a country other than the country in which it is organized.
		

		
			(k)        From the Conversion and thereafter, the Company and any of its Subsidiaries converted to limited partnerships in connection with the Conversion will at all times have been treated as “disregarded entities” for U.S. federal income tax purposes.
		

		
			(l)         The representations and warranties contained in Section 3.11 and this Section 3.17 are the only representations and warranties being made with respect to Taxes.
		

		
			Section 3.18    Environmental Matters.
		

		
			(a)        Except as set forth in Section 3.18(a) of the Disclosure Schedules and except as would not, individually or in the aggregate, reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole, (i) the Business is in compliance with all applicable Environmental Laws and has obtained and is in compliance with all Environmental Permits, and (ii) there are no outstanding written claims alleging violation of or liability pursuant to any Environmental Law pending or threatened against the Business.
		

		
			(b)        There is no pending or, to the Knowledge of the Seller, threatened investigation by any Governmental Authority, nor any pending or, to the Knowledge of the Seller, threatened Action with respect to the Business under any Environmental Laws.
		

		
			(c)        The representations and warranties contained in this Section 3.18 are the only representations and warranties being made with respect to compliance with or liability under Environmental Laws or with respect to any environmental, health or safety matter, including natural resources, related to the Company, any of its Subsidiaries and the Business.
		

		
			(d)        For purposes of this Agreement:
		

		
			(i)         “Environmental Laws” means any Laws of any Governmental Authority in effect as of the date hereof relating to protection of the environment; and
		

		
			(ii)       “Environmental Permits” means all Permits under any Environmental Law.
		

		
			Section 3.19    Material Contracts; Licensees.
		

		
			
		

		
			

		 

		

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			(a)        Section 3.19(a) of the Disclosure Schedules contains a list, as of the date hereof, of the following Contracts and agreements to which the Company, any of its Subsidiaries or the Business are party or otherwise bound (such Contracts, the “Material Contracts”):
		

		
			(i)         all Contracts or agreements, including joint venture, partnership or similar agreements or arrangements, that (A) provide for the anticipated receipt by the Company and its Subsidiaries or the Business of more than $150,000 in the aggregate, based on contractual guaranteed minimums or based on actual payments received year-to-date, or (B) provide for payment by the Company and its Subsidiaries or the Business of more than $100,000 in the aggregate, in each case, in the year ended December 31, 2019;
		

		
			(ii)       all Contracts and agreements (other than intercompany agreements to be terminated at or prior to the Closing) relating to Indebtedness, imposing an Encumbrance (other than Permitted Encumbrances) on any of the assets of the Company, any of its Subsidiaries or the Business, or, to the extent solely related to the Business, in respect of Bank Products and Cash Management Services;
		

		
			(iii)      all Contracts and agreements that limit the ability of the Company, any of its Subsidiaries or the Business to compete in any line of business or with any Person or in any geographic area or during any period of time or that grant the other party or any third Person “most favored nation” status;
		

		
			(iv)       all Contracts and agreements containing any requirements, output, minimum purchase volume or material “take-or-pay” provision;
		

		
			(v)        all Contracts and agreements under which the Company, any of its Subsidiaries or the Business grants any exclusive rights (including exclusive licenses to Intellectual Property), rights of refusal or rights of first negotiation with respect to any material assets of the Business to any Person;
		

		
			(vi)       all Contracts or agreements governing the settlement of any material administrative or judicial proceedings since the Look-Back Date which contain material ongoing obligations of the Company or any of its Subsidiaries;
		

		
			(vii)     all Contracts or agreements providing for a license by or to the Company, any of its Subsidiaries or the Business of Intellectual Property containing any guaranteed minimum royalty payable to the Company, any of its Subsidiaries or the Business in excess of $150,000 in the year ended December 31, 2019;
		

		
			(viii)    all Contracts and agreements with any Related Person;
		

		
			(ix)       all shareholder agreements, joint venture agreements, partnership agreements, registration rights agreements, voting agreements and other Contracts and agreements relating to the acquisition or ownership of equity interests in any Person;
		

		
			(x)        all Contracts and agreements that (A) provide for the creation or development by the Company, any of its Subsidiaries or the Business for any other Person, or for the Company, any of its Subsidiaries or the Business by any other Person, of any material
		

		
			
		

		
			

		 

		

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			Intellectual Property (including any joint development) or (B) provide for the assignment or other transfer to the Company, any of its Subsidiaries or the Business from any other Person, or by the Company, any of its Subsidiaries or the Business to any other Person, of any ownership interest in any material Intellectual Property;
		

		
			(xi)       all Contracts and agreements pursuant to which the Company, any of its Subsidiaries or the Business have acquired a business or entity, or substantially all of the assets of a business or entity, whether by way of merger, consolidation, purchase of stock, purchase of assets or otherwise for which material obligations remain;
		

		
			(xii)     all Contracts and agreements that contain an earn-out or similar contingent payment or obligation;
		

		
			(xiii)    all employment, collective bargaining, consulting, deferred compensation, independent contractor, non-competition Contract or other agreement with any current officer, director or employee of the Company, any of its Subsidiaries or the Business providing for annual compensation in excess of $100,000 or one-time or contingent compensation in excess of $200,000;
		

		
			(xiv)     all Contracts and agreements providing for severance, retention, change in control or similar payments for which the Buyer, the Company or any of its Subsidiaries would be liable following the Closing;
		

		
			(xv)      all broker, distributor, sales promotion, market research, marketing, advertising and public relations Contracts and agreements that provide for annual payment by the Company and its Subsidiaries or the Business of more than $200,000 in the aggregate; and
		

		
			(xvi)     all Contracts and agreements used in the conduct of the Business, on the one hand, and any other business of the Seller or any of its Subsidiaries (other than the Company or any of its Subsidiaries), on the other hand, that provide for annual payment of more than $300,000 in the aggregate.
		

		
			(b)        Section 3.19(b)(1) of the Disclosure Schedules sets forth the fifteen (15) largest licensees of the Business (by royalties or revenues paid) for the twelve (12) month period ending December 31, 2018 (the Contracts relating to such licensees, the “Licensee Contracts”), including media partners that pay royalties to the Company, any of its Subsidiaries or the Business.  All of the Licensee Contracts are listed on Section 3.19(b)(2) of the Disclosure Schedules.  To the Knowledge of the Seller, the relationships of the Business with such licensees are good commercial working relationships and no such licensee has canceled or otherwise terminated its relationship with the Business nor indicated any intention to do so.
		

		
			(c)        Except as would not, individually or in the aggregate, reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole, each Material Contract and Licensee Contract is valid and binding on the Seller, the Company or the Company’s Subsidiary party thereto, as the case may be, and, to the Knowledge of the Seller, the counterparties thereto, and is in full force and effect.  Neither the Seller, the Company nor any of its Subsidiaries is in breach of, or default under, any Material Contract or Licensee Contract to which it is a party, nor, to the Knowledge of the Seller, is any other party to any Material Contract or Licensee
		

		
			
		

		
			

		 

		

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			Contract in breach of or default thereunder, and, to the Knowledge of the Seller, no event has occurred that, with the lapse of time, giving of notice or both, would constitute such a breach or default or give any third party the right to claim any material rebate, chargeback, refund, credit or penalty under any Material Contract or Licensee Contract, accelerate the maturity or performance of any right or obligation under any Material Contract or Licensee Contract, or cancel, terminate, or modify in any material respect any Material Contract or Licensee Contract, in each case, except for such breaches, defaults or events that would not, individually or in the aggregate, reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole.  No party to any Material Contract or Licensee Contract has exercised any termination rights with respect thereto, and no party has given written or, to the Knowledge of the Seller, oral notice of any dispute with respect to any Material Contract or Licensee Contract.  The Seller has delivered to the Buyer true, correct and complete copies of all of the Material Contracts and Licensee Contract, together with all material amendments, modifications and supplements thereto.
		

		
			Section 3.20    Brokers.  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, the Signing Deliverables and the Ancillary Agreements based upon arrangements made by or on behalf of the Seller, the Company or any of their respective Subsidiaries.
		

		
			Section 3.21    Certain Payments.  Neither the Company nor any of its Subsidiaries nor the Business (nor, to the Knowledge of the Seller, any of the respective directors, executives, Representatives, agents or employees of the Seller, the Company or any of their respective Subsidiaries acting on behalf of the Business, the Company or any of its Subsidiaries) (a) has used or is using any corporate funds for any illegal contributions, gifts, entertainment or other unlawful expenses relating to political activity, (b) has used or is using any corporate funds for any direct or indirect unlawful payments to any foreign or domestic governmental officials or employees or any employees of a foreign or domestic government-owned entity, (c) has violated or is violating any provision of the Foreign Corrupt Practices Act of 1977 or any other anticorruption Law applicable to the Business, (d) has made, offered, authorized or promised any payment, rebate, payoff, influence payment, contribution, gift, bribe, rebate, kickback, or any other thing of value to any government official or employee, political party or official, or candidate, regardless of form, to obtain favorable treatment in obtaining or retaining business or to pay for favorable treatment already secured, (e) has established or maintained, or is maintaining, any fund of corporate monies or other properties for the purpose of supplying funds for any of the purposes described in the foregoing clause (d), or (f) has made any bribe, unlawful rebate, payoff, influence payment, kickback or other similar payment of any nature.
		

		
			Section 3.22    Bank Accounts; Powers of Attorney.  As of the Closing, neither the Company nor any of its Subsidiaries will have any bank accounts in any jurisdiction or, except as may be related to the prosecution or enforcement rights of the Company or any of its Subsidiaries with respect to any Business Registered IP, have granted powers of attorney  in connection with the Business that remain in effect.
		

		
			Section 3.23    Related Party Transactions.  No Related Person (a) has any interest in any material asset used or held for use in the Business; (b) is indebted to the Company or any of its Subsidiaries; (c) is party to, or has any financial interest in, any Contract, transaction or business
		

		
			
		

		
			

		 

		

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			dealing involving the Company, any of its Subsidiaries or the Business; (d) to the Knowledge of the Seller, is competing, or has at any time competed, with the Company, any of its Subsidiaries or the Business; or (e) has, or has had, any claim or right against the Company, any of its Subsidiaries or the Business (other than rights under the Employee Plans or rights to receive compensation for services performed as an employee of the Business).
		

		
			Section 3.24    The Seller’s Reliance.  Except for the express representations and warranties made by the Buyer in Article IV, any Signing Deliverable or any Ancillary Agreement, the Seller acknowledges that neither the Buyer nor any other Person on behalf of the Buyer makes any other express or implied representation or warranty, and the Seller has not relied and is not relying on any other statement, representation or warranty, oral or written, express or implied, made by the Buyer or any of its Affiliates or Representatives.
		

		
			ARTICLE IV
		

		
			REPRESENTATIONS AND WARRANTIES OF BUYER
		

		
			The Buyer hereby represents and warrants to the Seller as follows:
		

		
			Section 4.1      Organization.  The Buyer is a Delaware limited liability company duly organized, validly existing and in good standing under the Laws of Delaware and has all necessary limited liability company power and authority to own, lease and operate its properties and to carry on its as it is now being conducted.
		

		
			Section 4.2      Authority.  The Buyer has the limited liability company power and authority to execute and deliver this Agreement and each of the Signing Deliverables and Ancillary Agreements to which it is or will be a party, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby.  The execution, delivery and performance by the Buyer of this Agreement and each of the Signing Deliverables and Ancillary Agreements to which it is or will be a party and the consummation by the Buyer of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary limited liability company action.  This Agreement and each of the Signing Deliverables to which the Buyer is a party have been, and upon their execution each of the Ancillary Agreements to which the Buyer will be a party will have been, duly executed and delivered by the Buyer and, assuming due execution and delivery by each of the other parties hereto and thereto, this Agreement and each of the Signing Deliverables to which the Buyer is a party constitute, and upon their execution each of the Ancillary Agreements to which the Buyer will be a party will constitute, the legal, valid and binding obligations of the Buyer, enforceable against the Buyer in accordance with their respective terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether considered in a proceeding in equity or at Law).
		

		
			Section 4.3      No Conflict; Required Filings and Consents.
		

		
			(a)        The execution, delivery and performance by the Buyer of this Agreement and each of the Signing Deliverables and Ancillary Agreements to which the Buyer is or will be a party, and the consummation of the transactions contemplated hereby and thereby, do not and will
		

		
			
		

		
			

		 

		

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			not, (i) conflict with or violate the certificate of formation or limited liability company agreement of the Buyer, (ii) conflict with or violate any Law applicable to the Buyer or by which any property or asset of the Buyer is bound or affected, or (iii) conflict with, result in any breach of, constitute a default (or an event that, with notice or lapse of time or both, would become a default) under, or require any consent of or notice to any Person pursuant to, any Contract to which the Buyer is a party, except, in each case, for any such conflicts, violations, breaches, defaults or other occurrences that would not, individually or in the aggregate, reasonably be expected to materially impair the ability of the Buyer to consummate, or prevent or materially delay, any of the transactions contemplated by this Agreement or the Ancillary Agreements.
		

		
			(b)        The Buyer is not required to file, seek or obtain any notice, authorization, approval, order, permit or consent of or with any Governmental Authority in connection with the execution, delivery and performance of this Agreement and each of the Signing Deliverables and Ancillary Agreements or the consummation of the transactions contemplated hereby or thereby, except (i) for any filings required to be made under the HSR Act or (ii) for such filings as may be required by any applicable federal or state securities or “blue sky” Laws.
		

		
			Section 4.4      Financing.  As of the date hereof the Buyer has, and at the Closing the Buyer will have, sufficient funds to permit the Buyer to consummate the Closing, and, as and when due, the Buyer will have sufficient funds to permit the Buyer to pay all related fees, expenses and Earn-Out Payments, if any.  Notwithstanding anything to the contrary contained herein, the Buyer acknowledges and agrees that its obligations to consummate the transactions contemplated hereby are not contingent upon its ability to obtain any third-party financing.
		

		
			Section 4.5      Solvency.  Assuming (a) the representations and warranties set forth in Article III are true and correct in all material respects, and (b) the satisfaction of the conditions contained in Section 6.1 and Section 6.3, immediately after giving effect to the transactions contemplated by this Agreement (including the purchase of the Interests, the refinancing of any Indebtedness contemplated to be repaid or refinanced by the Buyer, and the payment of all related fees and expenses), the Company will be Solvent.  “Solvent” means that, as of any date of determination: (x) the amount of the “fair saleable value” of the assets of the Company and its Subsidiaries, taken as a whole, exceeds, as of such date, the sum of all “debts” of the Company and its Subsidiaries, taken as a whole, as such quoted terms are generally understood in accordance with applicable federal Law governing the insolvency of debtors; (y) the Company will not have, as of such date, an unreasonably small amount of capital for the operation of the Business; and (z) the Business will be able to pay its debts as they mature.
		

		
			Section 4.6      Brokers.  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 and the Ancillary Agreements based upon arrangements made by or on behalf of the Buyer.
		

		
			Section 4.7      Investment Intent.  The Buyer is acquiring the Interests for its own account for investment purposes only and not with a view to any public distribution thereof or with any intention of selling, distributing or otherwise disposing of the Interests in a manner that would violate the registration requirements of the Securities Act.  The Buyer agrees that the Interests may not be sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed of without
		

		
			
		

		
			

		 

		

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			registration under the Securities Act and any applicable state securities Laws, except pursuant to an exemption from such registration under the Securities Act and such Laws.  The Buyer is able to bear the economic risk of holding the Interests for an indefinite period (including total loss of its investment), and has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risk of its investment.
		

		
			Section 4.8      The Buyer’s Investigation and Reliance.  The Buyer is a sophisticated purchaser and has made its own independent investigation, review and analysis regarding the Company, its Subsidiaries and the Business and the transactions contemplated by this Agreement and the Ancillary Agreements, which investigation, review and analysis were conducted by the Buyer together with expert advisors, including legal counsel, that it has engaged for such purpose.  The Buyer and its Representatives have been provided with full and complete access to the Representatives, properties, offices, plants and other facilities, books and records of the Business and other information that they have requested in connection with their investigation of the Business and the transactions contemplated hereby.  Neither the Seller nor any of its Affiliates or Representatives has made any representation or warranty, express or implied, as to the accuracy or completeness of any information concerning the Business contained herein or made available in connection with the Buyer’s investigation of the Business, except as expressly set forth in this Agreement (as qualified by the Disclosure Schedules) or any Ancillary Agreement, and except with respect to any of the aforesaid express representations and warranties, the Seller and its Affiliates and Representatives expressly disclaim any and all liability that may be based on such information or errors therein or omissions therefrom.  The Buyer has not relied and is not relying on any statement, representation or warranty, oral or written, express or implied, made by the Seller or any of its Affiliates or Representatives, except as expressly set forth in this Agreement (as qualified by the Disclosure Schedules) or any Ancillary Agreement.  None of the Seller, its Affiliates or Representatives is making, directly or indirectly, any representation or warranty with respect to any estimates, projections or forecasts involving the Company, its Subsidiaries or the Business.  The Buyer acknowledges that, should the Closing occur, the Buyer shall acquire the Company and its Subsidiaries on an “as is” and “where is” basis, except as otherwise expressly set forth in Article III, the Disclosure Schedules, any Signing Deliverable or any Ancillary Agreement.  Except for the representations and warranties contained in Article III, the Disclosure Schedules, any Signing Deliverable or any Ancillary Agreement, the Buyer acknowledges that neither the Seller nor any other Person on behalf of the Seller makes any other express or implied representation or warranty with respect to the Business or with respect to any other information provided to the Buyer.
		

		
			ARTICLE V
		

		
			COVENANTS
		

		
			Section 5.1      Subsidiary Conversions.  No later than one (1) Business Day prior to the Closing Date, upon the terms and subject to the conditions set forth in this Agreement and in accordance with the applicable state corporate Law governing the Subsidiaries of the Company set forth on Exhibit A and the Act, the Seller, Holdco and GP Holdco shall effect the Subsidiary Conversions by filing the Subsidiary Certificates of Conversion with the Secretary of State of Delaware in accordance with this Agreement and the Act.
		

		
			
		

		
			

		 

		

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			Section 5.2      Conduct of Business Prior to the Closing.  Except as otherwise contemplated by this Agreement (including in connection with the Reorganization), the Ancillary Agreements or as set forth in Section 5.2 of the Disclosure Schedules, between the date of this Agreement and the Closing Date, unless the Buyer shall otherwise provide its prior written consent (which consent shall not be unreasonably withheld, conditioned or delayed), (a) the Business shall be conducted only in the ordinary course of business consistent with past practice in all material respects, (b) the Seller shall use its reasonable best efforts to maintain and preserve intact its business organization, advantageous business relationships and retain the services of its officers and key employees and (c) neither the Seller nor the Buyer shall take any action that would prohibit or materially impair or delay the ability of either the Seller or the Buyer to obtain any necessary approvals of any regulatory agency or other Governmental Authority required for the transactions contemplated hereby or to consummate the transactions contemplated hereby.  Except as otherwise contemplated by this Agreement (including in connection with the Reorganization), the Ancillary Agreements or as set forth in Section 5.2 of the Disclosure Schedules, between the date of this Agreement and the Closing Date, without the prior written consent of the Buyer (which consent shall not be unreasonably withheld, conditioned or delayed), the Seller shall not, to the extent related primarily to the Business, and shall not permit the Company or any of its Subsidiaries to:
		

		
			(a)        amend the certificate of incorporation or bylaws or equivalent organizational documents of the Company or any of its Subsidiaries (whether by merger, consolidation or otherwise);
		

		
			(b)        (i) split, combine or reclassify any equity interests, or propose to split, combine or reclassify, any equity interests, or issue or authorize or propose the issuance or authorization of any other securities in respect of, or in lieu of or in substitution for, any equity interests of its share capital, (ii) declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of any equity interests, except dividends paid by a direct or indirect wholly owned Subsidiary of the Company to the Company or to any of the Company’s other direct or indirect wholly owned Subsidiaries or (iii) redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any equity interests of the Company (or any of its Subsidiaries) or any securities convertible into or exercisable for any equity interests of the Company (or any of its Subsidiaries), other than repurchases, redemptions or acquisitions by the Company or any wholly owned Subsidiary of the Company of equity interests or such other securities, as the case may be, of any other wholly owned Subsidiary of the Company;
		

		
			(c)        (i) issue, deliver, pledge or sell, or authorize the issuance, delivery or sale of, any shares of equity interests or equity equivalents of the Company or any of its Subsidiaries, or any options, warrants, convertible securities or other rights of any kind to acquire any such shares, equity interests or equity equivalents or (ii) amend any term of any shares of equity interests or equity equivalents (in each case, whether by merger, consolidation or otherwise) in any fashion that may have a materially adverse impact on the Buyer;
		

		
			(d)        acquire, directly or indirectly, (i) any corporation, partnership, limited liability company, other business organization or division thereof or (ii) any assets that are material, individually or in the aggregate, to the Business, taken as a whole;
		

		
			
		

		
			

		 

		

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			(e)        adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring or recapitalization of the Company or any of its Subsidiaries;
		

		
			(f)        (i) create, incur, assume, suffer to exist or otherwise be liable with respect to any indebtedness for borrowed money or issue any debt securities (other than borrowings in the ordinary course under existing credit facilities in respect of which the Buyer, the Company and each of its Subsidiaries will have no liability following the Closing) or, except to the extent in the ordinary course of business consistent with past practice, create, incur, assume, suffer to exist or otherwise be liable with respect to any other Indebtedness, (ii) forgive any indebtedness of any other Person other than in the ordinary course of business consistent with past practice, or waive any claims or rights of substantial value, or (iii) impose or suffer to be imposed any Encumbrance (other than Permitted Encumbrances) on any equity interests, assets or properties of the Company or any of its Subsidiaries;
		

		
			(g)        authorize, or make any commitment with respect to, any single capital expenditure that is in excess of $100,000 or capital expenditures that are, in the aggregate, in excess of $1,000,000 that will bind the Company or any of its Subsidiaries;
		

		
			(h)        enter into, amend, renegotiate or modify in any material respect or terminate (excluding terminations upon expiration of the term thereof in accordance with their terms) any Material Contract or Licensee Contract, or waive, release or assign any material rights, claims or benefits of the Company or any of its Subsidiaries under any Material Contract or Licensee Contract, or enter into any Contract which if entered into prior to the date hereof would be a Material Contract or Licensee Contract or which grants any third party the right to receive payments with respect to any Intellectual Property exclusively used or held for use by the Business, including any royalty payments or similar payments;
		

		
			(i)         except to the extent required by applicable law (including Section 409A of the Code) or any arrangement in effect as of the date hereof, (i) grant or increase any severance or termination pay to (or amend any existing severance pay or termination agreement) or, other than in the ordinary course of business with employees with base compensation of less than $100,000 per year, enter into any employment, deferred compensation or other similar agreement (or amend any such existing agreement) with respect to any employee, officer or director, (ii) increase benefits payable under any existing severance or termination pay policies, (iii) increase the compensation or benefits of any senior officer of the Business other than ordinary course changes to generally applicable benefit plans; (iv) establish, amend or adopt any collective bargaining, compensation or benefit plan, including any pension, retirement, profit-sharing, bonus, stock option, restricted stock or other employee benefit or welfare benefit plan (other than any such adoption or amendment that does not materially increase the cost to the Business of maintaining the applicable compensation or benefit plan) with or for the benefit of its employees; (v) accelerate the vesting of, or the lapsing of restrictions with respect to, any stock options or other stock-based compensation; or (vi) hire or fire any senior officer of the Business;
		

		
			(j)         make any change in any method of accounting or accounting practice or policy applicable to the Business, except as required by applicable Law or GAAP (which requirements shall include those principles relating to the preparation of the Financial Statement);
		

		
			
		

		
			

		 

		

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			(k)        except in the ordinary course of business consistent with past practice, (i) accelerate the collection of any accounts receivable in advance of their regular due dates or the dates when the same would have been collected, or (ii) delay the payment of any accounts payable (including commissions payable pursuant to the consulting agreements set forth on Section 5.19(a) of the Disclosure Schedules) beyond their regular due dates or the dates when the same would have been paid;
		

		
			(l)         settle, or offer or propose to settle, any material litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any of its Subsidiaries;
		

		
			(m)       (i) make or change any material Tax election, (ii) change any annual tax accounting period, (iii) adopt or change any elective method of tax accounting, (iv) materially amend any Tax Returns, (v) enter into any material closing agreement, (vi) settle any material Tax claim, audit or assessment or (vii) surrender any right to claim a material Tax refund, offset or other reduction in Tax liability;
		

		
			(n)        sell, lease, sublease, exchange or otherwise transfer, or create or incur any Encumbrance, other than a Permitted Encumbrance, on, any of the Company’s or any of its Subsidiaries’ assets, securities, properties, interests or businesses, or grant any option with respect to any of the foregoing;
		

		
			(o)        make any loans, advances or capital contributions to, or investments in, any other Person, or loans, advances or capital contributions to, or investments in, wholly owned Subsidiaries of the Company;
		

		
			(p)        agree to amend, modify or terminate any Signing Deliverable, or waive, release or assign any right, claim or benefit of the Seller, the Company or any of their Affiliates under any Signing Deliverable (it being understood and agreed that any breach of this Section 5.2(p) shall be deemed to give rise to the failure of the condition set forth in Section 6.3(b));  or
		

		
			(q)        agree, resolve or commit to do any of the foregoing.
		

		
			Section 5.3      No Solicitation; Exclusivity.
		

		
			(a)        From and after the date of this Agreement and continuing until the Closing or, if earlier, the valid termination of this Agreement in accordance with Article VII, the Seller shall not, and shall not permit or authorize any of its Subsidiaries or any Representative of the Seller or any of its Subsidiaries, directly or indirectly, to (i) solicit, initiate, endorse, knowingly encourage or knowingly facilitate any inquiry, proposal or offer with respect to, or the making or completion of, any Acquisition Proposal, or any inquiry, proposal or offer that is reasonably likely to lead to any Acquisition Proposal, (ii) enter into, continue or otherwise participate in any discussions or negotiations regarding, or furnish to any Person any information or data with respect to, or otherwise cooperate in any way with, any Acquisition Proposal or (iii) resolve, agree or propose to do any of the foregoing.  As of the date of this Agreement, the Seller shall, and shall cause each of its Subsidiaries and the Representatives of the Seller and each of its Subsidiaries to, (A) immediately cease and cause to be terminated all existing discussions and negotiations with any Person conducted theretofore with respect to any Acquisition Proposal or potential Acquisition
		

		
			
		

		
			

		 

		

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			Proposal and (B) request the prompt return or destruction of all confidential information previously furnished with respect to any Acquisition Proposal or potential Acquisition Proposal.
		

		
			(b)        Following the date of this Agreement, the Seller promptly (and in any event within 24 hours of receipt) shall advise the Buyer, orally or in writing, in the event the Seller or any of its Subsidiaries or Representatives receives (i) any indication by any Person that it is considering making an Acquisition Proposal (including any request by any Person to waive any standstill or similar provision applicable to such Person), (ii) any inquiry or request for information, discussion or negotiation that is reasonably likely to lead to or that contemplates an Acquisition Proposal, or (iii) any proposal or offer that is or is reasonably likely to lead to an Acquisition Proposal, in each case together with a description of the material terms and conditions of and facts surrounding any such indication, inquiry, request, proposal or offer, the identity of the Person making any such indication, inquiry, request, proposal or offer, and a copy of any written proposal, offer or draft agreement provided by such Person; provided, that the Seller’s obligations in Section 5.3(a) shall not be diminished or otherwise affected by the receipt of any indication, inquiry, request, proposal or offer contemplated in clauses (i), (ii), or (iii) hereof and/or the Seller’s providing the Buyer with notice thereof.
		

		
			(c)        For purposes of this Agreement, “Acquisition Proposal” means any proposal or offer with respect to any direct or indirect acquisition or purchase, in one transaction or a series of transactions, and whether through any merger, reorganization, consolidation, tender offer, self-tender, exchange offer, stock acquisition, asset acquisition, binding share exchange, business combination, recapitalization, liquidation, dissolution, joint venture or otherwise, of (i) assets or businesses of the Company and its Subsidiaries that generate 20% or more of the net revenues or net income or that represent 20% or more of the total assets (based on fair market value) of the Company and its Subsidiaries, taken as a whole, immediately prior to such transaction, or (ii) 20% or more of the combined voting power of the outstanding Company equity interests, including any tender offer or exchange offer that if consummated would result in any Person beneficially owning 20% or more of the combined voting power of the outstanding Company equity interests, other than the transactions contemplated by this Agreement.
		

		
			Section 5.4      Covenants Regarding Information.
		

		
			(a)        From the date hereof until the Closing Date, upon reasonable notice, the Seller shall cause the GP Holdco, the Company and its Subsidiaries to, afford the Buyer and its Representatives reasonable access to the properties, offices, plants and other facilities, books and records of the Business, and furnish the Buyer with such financial, operating and other data and information as the Buyer may reasonably request; provided,  however, that any such access or furnishing of information shall be conducted at the Buyer’s expense, during normal business hours, under the supervision of the Seller’s personnel and in such a manner as not unreasonably to interfere with the normal operations of the Business.  Notwithstanding anything to the contrary in this Agreement, none of the Seller, the GP Holdco, the Company or any of its Subsidiaries shall be required to disclose any information to the Buyer or its Representatives if (i) such disclosure would jeopardize any attorney-client or other legal privilege, (ii) such disclosure would contravene any applicable Laws, (iii) such information is pertinent to any litigation in which the Seller or any of its Affiliates, on the one hand, and the Buyer or any of its Affiliates, on the other hand, are adverse parties, (iv) such information relates to any consolidated, combined or unitary Return filed
		

		
			
		

		
			

		 

		

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			by the Seller, the Company or any of their Affiliates or any of their respective predecessor entities; provided,  however, that, in each case, the Seller, the GP Holdco, the Company or any of its Subsidiaries, as the case may be, uses commercially reasonable efforts to minimize the effects of such restriction or to provide a reasonable alternative to such access.
		

		
			(b)        In order to facilitate the resolution of any claims made against or incurred by the Seller (as such claims relate to the Business), for a period of seven years after the Closing, the Buyer shall (i) retain the books and records relating to the Business relating to periods prior to the Closing and (ii) afford the Representatives of the Seller reasonable access (including the right to make, at the Seller’s expense, photocopies), during normal business hours, to such books and records; provided,  however, that the Buyer shall notify the Seller in writing at least 30 days in advance of destroying any such books and records prior to the seventh anniversary of the Closing Date in order to provide the Seller the opportunity to copy such books and records in accordance with this Section 5.4(b).
		

		
			(c)        In order to facilitate the resolution of any claims made against or incurred by the Buyer, the Company or any of its Subsidiaries, for a period of seven (7) years after the Closing, the Seller shall (i) retain the books and records relating to the Business relating to periods prior to the Closing that shall not otherwise have been delivered to the Buyer and (ii) upon reasonable notice, afford the Representatives of the Buyer reasonable access (including the right to make, at the Buyer’s expense, photocopies), during normal business hours, to such books and records; provided,  however, that the Seller shall notify the Buyer in writing at least thirty (30) days in advance of destroying any such books and records prior to the seventh anniversary of the Closing Date in order to provide the Buyer the opportunity to copy such books and records in accordance with this Section 5.4(c).
		

		
			Section 5.5      Notification of Certain Matters.
		

		
			(a)        Between the date of this Agreement and the Closing, each party hereto shall promptly notify the other party in writing of any: (a) breach of any covenant or obligation of such party under this Agreement; (b) fact, circumstance, condition, event, change, development or nonoccurrence of any event that (i) has caused or is reasonably likely to cause any representation or warranty of the notifying party contained herein to become misleading, inaccurate or false in any material respect or that would have caused or constituted a breach if such fact, circumstance, condition, event, change or development had occurred, arisen or existed on or before the date of this Agreement, or (ii) is reasonably likely to make the timely satisfaction of any Closing condition set forth in Article VI impossible or unlikely; (c) Action threatened, commenced or asserted that seeks to enjoin, restrain, make illegal or otherwise prohibit the consummation of the transactions contemplated by this Agreement; (d) material default under any Material Contract or Licensee Contract or event which, with notice or lapse of time or both, would become such a default on or before the Closing Date; and (e) fact, circumstance, condition, event, change or development that constitutes, or could reasonably be expected to constitute, a Material Adverse Effect.
		

		
			(b)        Without limiting the generality of the foregoing clause (a), the Seller shall have the right to supplement or update the Disclosure Schedules prior to the Closing in the event that the Seller discovers any fact, circumstance, condition, event, change, development or nonoccurrence of any event that first occurred after the date of this Agreement and that, had it
		

		
			
		

		
			

		 

		

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			arisen at or prior to the date of this Agreement, would have been required to be set forth on or described in the Disclosure Schedules pursuant to any representation or warranty set forth in Article III (any such supplement or update, a “Supplement”);  provided, that, subject to Section 8.5(a)(ii), no Supplement shall be deemed to cure any breach, inaccuracy or default under any representation, warranty, covenant or agreement set forth in this Agreement, including, for the avoidance of doubt, for purposes of determining whether the conditions to the Closing set forth in Article VI have been satisfied or determining the availability of any right or remedy pursuant to Article VIII.
		

		
			Section 5.6      Intercompany Arrangements; Misdirected Mail and Payments.
		

		
			(a)        Except as set forth in Section 5.6(a) of the Disclosure Schedules and except for this Agreement and the Ancillary Agreements, all intercompany and intracompany accounts, indebtedness, transactions or Contracts between the Company and its respective Subsidiaries, on the one hand, and the Seller and its Affiliates (other than the Company and its respective Subsidiaries), on the other hand, shall be canceled, settled, offset, capitalized or otherwise eliminated prior to the determination of Indebtedness for purposes of calculating the Purchase Price, without any consideration or further liability to any party and without the need for any further documentation, prior to the Closing.
		

		
			(b)        In the event that the Seller or any of its Affiliates receives any mail, communications or payments on behalf of the Business, the Company or any of its Subsidiaries after the Closing, such mail, communications or payments shall be the property of, and shall be forwarded and remitted to, the Buyer or its designee as promptly as practicable, but no later than thirty (30) days, after receipt thereof (or, if later, after notice or determination of receipt of any such improper mail, communication or payment).  In the event that any of the Company, its Subsidiaries or their respective Affiliates receives any mail, communications or payments on behalf of any business of the Seller or any of its Affiliates (other than the Business, the Company or any of its Subsidiaries) after the Closing, such mail, communications or payments shall be the property of, and shall be forwarded and remitted to, the Seller as promptly as practicable, but no later than thirty (30) days, after receipt thereof (or, if later, after notice or determination of receipt of any such improper mail, communication or payment).
		

		
			Section 5.7      Confidentiality.
		

		
			(a)        Each of the parties shall hold, and shall cause its Representatives to hold, in confidence all documents and information furnished to it by or on behalf of the other party in connection with the transactions contemplated by this Agreement or by the Ancillary Agreements pursuant to the terms of the Confidentiality and Nondisclosure Agreement dated January 25, 2018, between the Buyer and the Seller (the “Confidentiality Agreement”), which shall continue in full force and effect; provided, however, that the confidentiality obligations of the Buyer with respect to Confidential Information (as defined in the Confidentiality Agreement) under the Confidentiality Agreement and the obligations of the parties under this Section 5.7(a) shall terminate as of the Closing Date, but only in respect of that portion of the Confidential Information to the extent relating to the Business, the Company or any of its Subsidiaries.  If for any reason this Agreement is terminated prior to the Closing Date, the Confidentiality Agreement shall nonetheless continue in full force and effect in accordance with its terms.
		

		
			
		

		
			

		 

		

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			(b)        For a period of five years following the Closing Date, the Seller shall not, and shall cause its Affiliates and Representatives not to, use for its or their own benefit or divulge or convey to any third party any Proprietary Information; provided,  however, that the Seller or its Affiliates may furnish such portion (and only such portion) of the Proprietary Information as the Seller or such Affiliate reasonably determines it is obligated to disclose if:  (i) it receives a request to disclose all or any part of the Proprietary Information under the terms of an order or demand issued by a Governmental Authority or it is otherwise required in connection with determining the Tax liability of Seller or its Affiliates; (ii) to the extent not inconsistent with such request, it notifies the Buyer of the existence, terms and circumstances surrounding such request; (iii) it exercises its commercially reasonable efforts to obtain an order or other reliable assurance that confidential treatment will be accorded to the disclosed Proprietary Information; and (iv) disclosure of such Proprietary Information is required to prevent the Seller or such Affiliate from being held in contempt or becoming subject to any other penalty under applicable Law.  For purposes of this Section 5.7(b), “Proprietary Information” shall mean all information and materials concerning the Company, any of its Subsidiaries or the Business not generally known to the public, including trade secrets and other confidential and proprietary information.
		

		
			Section 5.8      Consents and Filings.
		

		
			(a)        Each of the parties shall use reasonable best efforts to take, or cause to be taken, all appropriate action to do, or cause to be done, all things necessary, proper or advisable under applicable Law or otherwise to consummate and make effective the transactions contemplated by this Agreement and the Ancillary Agreements as promptly as practicable, including to (i) prepare and file all forms, registrations and notices required to be filed to consummate the transactions contemplated by this Agreement and the Ancillary Agreements, (ii) use commercially reasonable efforts to obtain the third-party consents, authorizations, ratifications, waivers or other approvals listed on Section 5.8(a) of the Disclosure Schedules  (provided that the Seller and its Affiliates shall not be required to pay any consent or other fees in order to obtain any such consents), (iii) obtain from Governmental Authorities and other Persons all consents, approvals, authorizations, qualifications and orders as are necessary for the consummation of the transactions contemplated by this Agreement and the Ancillary Agreements and (iv) promptly (and, with respect to the HSR Act, in no event later than 10 Business Days after the date hereof) make all necessary filings, and thereafter make any other required submissions, with respect to this Agreement required under any applicable Antitrust Laws; provided that no party shall be required to pay (and the Company and any of its Subsidiaries shall not pay or agree to pay without the prior written consent of the Buyer, which consent shall not be unreasonably withheld, conditioned or delayed) any fee, penalty or other consideration to any third party for any consent or approval required for the consummation of the transactions contemplated by this Agreement under any Contract.  The Buyer shall pay seventy-five percent (75%), and the Seller shall pay twenty-five percent (25%) of all filing fees and other charges for the filing under any applicable Antitrust Law by the parties hereto.  The Buyer, the Seller and any of its Subsidiaries shall not take any action after the date hereof that would reasonably be expected to materially delay the obtaining of, or result in not obtaining, any permission, approval or consent required to be obtained prior to the Closing.
		

		
			(b)        Without limiting the generality of the parties’ undertakings pursuant to Section 5.8(a), each of the parties agrees to use commercially reasonable efforts to avoid or
		

		
			
		

		
			

		 

		

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			promptly eliminate impediments under any Antitrust Law that may be asserted by any Governmental Authority or any other party so as to enable the parties hereto to expeditiously close the transactions contemplated by this Agreement and the Ancillary Agreements no later than the Termination Date.  Notwithstanding anything to the contrary set forth herein, nothing in this Section 5.8 shall be deemed to require any of the parties or their respective Affiliates or Representatives to commence, defend or participate in any litigation or similar proceeding, divest or dispose of any of its assets, properties or businesses (or any of the assets, properties or businesses to be acquired hereunder), or waive or surrender any material right or otherwise suffer any material detriment.
		

		
			(c)        Each of the parties shall promptly notify the other party of any communication it or any of its Affiliates receives from any Governmental Authority relating to the matters that are the subject of this Agreement and permit the other party to review in advance any proposed communication by such party to any Governmental Authority and allow reasonable time for comment on such communication to the extent practicable.  No party to this Agreement shall agree to participate in any meeting with any Governmental Authority in respect of any filings, investigation or other inquiry unless it gives notice of such meeting to the other party in advance.  Subject to the Confidentiality Agreement, the parties will coordinate and cooperate with each other in exchanging such information and providing such assistance as the other party may reasonably request in connection with the foregoing.  Subject to the Confidentiality Agreement, the parties will provide each other with copies of all correspondence, filings or communications between them or any of their Representatives, on the one hand, and any Governmental Authority or members of its staff, on the other hand, with respect to this Agreement and the transactions contemplated hereby; provided that such materials may be redacted to comply with contractual obligations or as necessary to address reasonable attorney-client or other privilege, work product protection or confidentiality concerns, to the extent that such concerns are not adequately addressed by a common interest privilege or doctrine.  In connection with the foregoing, any party or its Affiliates may, as they or it deem(s) advisable and necessary, reasonably designate any competitively sensitive material provided to the other parties under this Section 5.8(c) as “outside counsel only.” Such materials and the information contained therein will be given only to the outside legal counsel of the recipient and will not be disclosed by such outside counsel to the counter party hereto or its Affiliates or Representatives, unless express written permission is obtained in advance from the disclosing party.
		

		
			(d)        Certain consents and waivers with respect to the transactions contemplated by this Agreement may be required from parties to Contracts to which the Seller, the Company or any of the Company’s Subsidiaries is a party that have not been and may not be obtained.  The Seller shall not have any liability to the Buyer arising out of or relating to the failure to obtain any consents or waivers that may be required in connection with the transactions contemplated by this Agreement or because of the termination of any Contract as a result thereof, and no such failure or termination shall result in the failure of any condition set forth in Article VI;  provided, that such consents or waivers are listed on Section 3.3(a) of the Disclosure Schedules to the extent required by the terms of Section 3.3.
		

		
			Section 5.9      Public Announcements.  On and after the date hereof and through the Closing Date, the Seller and the Buyer shall consult with each other before issuing, and provide each other the opportunity to review and comment upon, any press release or other public statement
		

		
			
		

		
			

		 

		

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			with respect to this Agreement or the Ancillary Agreements or the transactions contemplated thereby, and shall not issue any such press release or make any such public statement prior to obtaining the other party’s prior written approval, which approval shall not be unreasonably withheld, except that no such approval shall be necessary to the extent disclosure may be required by applicable Law or any listing requirement or agreement of any party hereto.
		

		
			Section 5.10    Use of Names and Marks.  Except as otherwise expressly provided herein and in the Ancillary Agreements, the Seller is not conveying ownership rights or granting the Buyer, any Affiliate of the Buyer or the Company or any of its Subsidiaries a right or license to use any of the Marks of the Seller or any Affiliate of the Seller and, after the Closing, the Buyer shall not permit the Company or any Affiliate of the Company to use in any manner the names or Marks of the Seller or any Affiliate of the Seller or any word that is confusingly similar in sound or appearance to such names or Marks.  Notwithstanding the foregoing, the Seller hereby consents to the use of the name “Sequential” or any trade name, trademark, service mark, logo or domain name incorporating the name “Sequential” by the Company and its Subsidiaries in connection with copies of the Business’s existing marketing and promotional materials, letterhead and business cards; provided, that the Company and its Subsidiaries shall only use such materials during the first ninety (90) days following the Closing.  As promptly as practicable, and in any event no later than ninety (90) days after the Closing, the Buyer shall take all necessary corporate action to cause the corporate names of the Company and its applicable Subsidiaries to be changed to a name that does not include the word “Sequential” or any word or element confusingly similar thereto.  Notwithstanding the foregoing, the Buyer, the Company and its Subsidiaries shall be entitled to identify Seller by name in legal and financial documents and public communications to the extent necessary to identify the transaction herein or the relationship of the parties so long as such use is in compliance with the Confidentiality Agreement and other provisions of this Agreement.  In the event the Buyer or any Affiliate of the Buyer violates any of its obligations under this Section 5.10, the Seller may proceed against it in law or in equity for such damages or other relief as a court may deem appropriate.  The Buyer acknowledges that a violation of this Section 5.10 may cause the Seller and its Affiliates irreparable harm, which may not be adequately compensated for by money damages.  The Buyer therefore agrees that in the event of any actual or threatened violation of this Section 5.10, the Seller shall be entitled, in addition to other remedies that it may have, and after giving the Buyer ten (10) days’ notice and an opportunity to cure, to a temporary restraining order and to preliminary and final injunctive relief against the Buyer or such Affiliate of the Buyer to prevent any violations of this Section 5.10.
		

		
			Section 5.11    Employee Matters.
		

		
			(a)        The Buyer shall provide, or cause to be provided, to each employee listed on Section 5.11 of the Disclosure Schedules (collectively the “Affected Employees”): (i) offers of “at-will” employment, (ii) base salaries no less than those in effect for such Affected Employee immediately prior to the Closing and (iii) bonus opportunities and employee benefits that are substantially comparable in the aggregate to those provided by the Buyer to its similarly-situated employees that are working in a capacity similar to the Affected Employees.
		

		
			(b)        Effective as of the Closing, (i) the Company and its Subsidiaries shall withdraw from and cease to be a participating employer under the Employee Plans, (ii) the Affected Employees and their eligible dependents shall cease participation in the Employee Plans,
		

		
			
		

		
			

		 

		

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			and (iii) the Seller shall cause the Affected Employees to be fully vested in their “Employer Contribution Accounts” and frozen “Matching Contribution Accounts” under the Sequential Licensing, Inc. 401(k) Plan.  Except as specifically provided otherwise herein, the Seller hereby retains all liabilities with respect to the Employee Plans and all assets thereof.  Further, the Seller shall be solely responsible for all employment-related liabilities (including liability for compensation and benefits earned) in respect of (x) employees who do not become employees of the Buyer, the Company or any of its Subsidiaries (“Seller Retained Employees”), and (y) Affected Employees to the extent that such liabilities arise before the date such Affected Employees become employees of the Buyer, the Company or any of its Subsidiaries, including all liabilities and obligations arising out of or in connection with any claims relating to (A) labor relations or discriminatory, harassing or illegal employment practices of the Seller or any of its Subsidiaries, (B) compensation, expense reimbursement, Employee Plans, unemployment compensation, workers’ compensation, vacation, paid time off, sick leave, severance pay, change-in-control payments, retention or transaction bonuses, and all other compensation and benefits earned or claims for benefits arising before the date such Affected Employees become employees of the Buyer, the Company or any of its Subsidiaries, and (C) the Seller’s and its Subsidiaries (other than the Company and its Subsidiaries) obligations under the WARN Act.
		

		
			(c)        The Buyer shall honor all unused vacation, holiday and choice-time sickness days accrued by an Affected Employee under the plans, policies and practices of the Seller or its Affiliates as of the Closing Date, which (as of the date of this Agreement) are set forth on Section 3.12(d)(1) of the Disclosure Schedules.  In the event of any change in the welfare benefits provided to any Affected Employee under any plan, the Buyer shall, or shall cause the Company and its Subsidiaries to, use commercially reasonable efforts to waive all limitations as to preexisting conditions, exclusions and waiting periods with respect to participation and coverage requirements applicable to the Affected Employees and their respective covered dependents under such plan (except to the extent that such conditions, exclusions or waiting periods would apply under the then-existing plans in which such Affected Employees were participating immediately prior to the Closing).  The Buyer shall provide each Affected Employee with credit for all service with the Seller and its Affiliates, or any former entity for which the Seller and its Affiliates have previously credited each Affected Employee, under the severance policies of the Buyer in which such Affected Employee is eligible to participate, except to the extent that it would result in a duplication of benefits with respect to the same period of service.  With respect to the year ended December 31, 2019, the Seller shall use commercially reasonable efforts to cause each group health plan covering Affected Employees to provide each such Affected Employee and his or her covered dependents with credit for copayments, deductibles and other out-of-pocket amounts paid by such Persons under the corresponding Employee Plan in the plan year in which the Closing occurs.
		

		
			(d)        The Seller shall bear any and all obligations and liability that arise under the WARN Act resulting from any employment losses of Seller Retained Employees.  The Buyer shall bear any and all liability under the WARN Act to the extent resulting from any employment losses that are incurred at or following the Closing with respect to any Affected Employee that becomes an employee of the Buyer, the Company or any of its Subsidiaries.
		

		
			(e)        Nothing in this Section 5.11 or elsewhere in this Agreement shall create any third-party beneficiary rights or shall otherwise confer upon any employee or other service provider to the Seller or the Buyer or any of their Subsidiaries, or any person representing the
		

		
			
		

		
			

		 

		

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			interest of such employees, or any spouse, dependent or beneficiary of any such employee, nor shall anything herein constitute the establishment, adoption, modification, amendment or termination of any Employee Plan or any other employee benefit plan, program, policy, arrangement or agreement.
		

		
			Section 5.12    Tax Matters.
		

		
			(a)        The Buyer and the Seller shall share equally and each be responsible for the timely payment of, and to such extent shall indemnify and hold harmless the other against, all sales, use, value added, transfer, stamp, registration, documentary, excise, real property transfer, mortgage, recordation or similar Taxes (including all interest and penalties and additions imposed with respect to such amounts) incurred as a result of the transactions contemplated by this Agreement (other than the Reorganization and Subsidiary Conversions, for which Seller shall be solely responsible for any Taxes).  The Seller and the Buyer shall cooperate in timely filing all necessary Returns and other documentation required with respect to all such Taxes, if any, and if required by applicable Law, Buyer shall join in the execution of any such Returns and other documentation.
		

		
			(b)        Following the Closing, the Seller and the Buyer shall reasonably cooperate, and shall cause their respective Affiliates, officers, employees, agents, auditors and Representatives to reasonably cooperate, in preparing and filing all Returns with respect to the Company and its Subsidiaries, including maintaining and making available to each other all records necessary in connection with Taxes.
		

		
			(c)        The Buyer shall not make any Tax election under Section 338(g) of the Code (or any comparable applicable provision of state, local, or non-U.S. Tax law) with respect to the stock or other ownership interest of any Subsidiary of the Company that is classified as a corporation under the Code (or any comparable applicable provision of state, local, or non-U.S. Tax law).
		

		
			(d)        The Seller shall prepare or cause to be prepared, and file or cause to be filed, all Returns with respect to the Company and its Subsidiaries for any Pre-Closing Tax Period required to be filed on or after the Closing Date (and shall be entitled to conduct all communications and any resulting negotiations with any Tax authority with respect to such Returns), shall include the income of the Company and its Subsidiaries and the Business (including any deferred items triggered into income by Treasury Regulations Section 1.1502-13 and any excess loss account taken into income under Treasury Regulation Section 1.1502-19) on Seller’s consolidated federal income Tax Returns and any applicable state income Tax Returns for all periods through the Closing Date, and shall pay or cause to be paid all Taxes due with respect to such Returns except for any Taxes reflected on the Final Closing Statement.
		

		
			(e)        For any Straddle Period, the Buyer shall timely prepare or cause to be prepared, and file or cause to be filed, all Returns required to be filed by or with respect to the Company and its Subsidiaries and shall pay or cause to be paid all Taxes due with respect to such Returns; provided, that the Seller shall reimburse the Buyer for the amount of any such Taxes that are attributable to the portion of the Straddle Period ending on the Closing Date (determined in accordance with Section 5.12(f))  except for any such Taxes reflected on the Final Closing
		

		
			
		

		
			

		 

		

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			Statement not later than five (5) Business Days after the Buyer delivers notice to the Seller that such Taxes are due and payable.  The Buyer shall permit the Seller to review and comment on each such Return described in the preceding sentence prior to the filing thereof.
		

		
			(f)        If the Company or any of its Subsidiaries is required to file a Return for a Straddle Period, the parties hereto agree to use the following conventions for determining the amount of Taxes for such Straddle Period that are attributable to the portion of the Straddle Period ending on the Closing Date:  (i) in the case of property Taxes and other similar Taxes imposed on a periodic basis, the amount attributable to the portion of the Straddle Period ending on the Closing Date shall be determined by multiplying the Taxes for the entire Straddle Period by a fraction, the numerator of which is the number of calendar days in the portion of the period ending on the Closing Date and the denominator of which is the number of calendar days in the entire Straddle Period; and (ii) in the case of all other Taxes (including employment Taxes, and sales and use Taxes) the amount attributable to the portion of the Straddle Period ending on the Closing Date shall be determined as if the Company filed a separate Return with respect to such Taxes for the portion of the Straddle Period ending on the Closing Date using a “closing of the books methodology.”
		

		
			Section 5.13    Release of Guarantees.  The parties hereto agree to cooperate and use their reasonable best efforts to obtain the release of the Seller or its Affiliates that are a party to or otherwise have liability with respect to any guarantees, performance bonds, bid bonds and other similar agreements set forth in Section 5.13 of the Disclosure Schedules (the “Seller Guarantees”) on or prior to the Closing Date, in each case solely to the extent related to the Business.  In the event any of the Seller Guarantees are not released prior to or at the Closing, the Buyer will indemnify and hold the Seller and its Affiliates that are a party to or otherwise have liability with respect to each such Seller Guarantee harmless for any and all payments required to be made under, and the costs and expenses incurred in connection with, such Seller Guarantee by the Seller or its Affiliates that are a party to or otherwise have liability with respect to such Seller Guarantee until such Seller Guarantee is released, including to the extent such payments, costs or expenses arise out of the Buyer’s conduct of the Business following the Closing and the facts or circumstances giving rise thereto do not give rise to any indemnification obligation of the Seller hereunder.
		

		
			Section 5.14    Seller’s Insurance.  Except as set forth in Section 5.14 of the Disclosure Schedules, from and after the Closing Date, the Company and its Subsidiaries shall cease to be insured by the Seller’s or any of its Affiliates’ insurance policies or by any of their self-insurance programs.  For the avoidance of doubt, the Seller shall retain all rights to control its insurance policies and self-insurance programs, including the right to exhaust, settle, release, commute, buy back or otherwise resolve disputes under any of its insurance policies and self-insurance programs and the Seller shall retain any premiums or other retentions paid by the Seller, the Company or any of its Affiliates prior to the Closing Date in respect of any insurance coverage (provided that after the Closing, none of the Buyer, the Company or any of its Subsidiaries shall be required to return to Seller any premiums or refunds thereof that constituted Prepaid Expenses or any retentions related to insurance policies held by the Company or any of its Subsidiaries);  provided, that this Section 5.14 shall in no event be deemed to limit, impede or otherwise restrict any right to control the defense, compromise or settlement of any audit, investigation, action or proceeding to the extent available to the Buyer, the Company or any of their respective Affiliates pursuant to Section 8.3 or otherwise.
		

		
			
		

		
			

		 

		

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			Section 5.15    Further Assurances; Wrong Pockets.
		

		
			(a)        The Seller shall, and shall cause its Affiliates to, execute and deliver such further instruments of conveyance and transfer and take such additional action as the Buyer may reasonably request to effect, consummate, confirm or evidence the sale and transfer to the Buyer of the Interests and the Business.  The Buyer shall, and shall cause its Affiliates to, execute and deliver such further instruments of assumption and take such additional action as the Seller may reasonably request to effect, consummate, confirm or evidence the transactions contemplated hereby.
		

		
			(b)        Without limiting the generality of the foregoing, if at any time following the Closing it becomes apparent that any asset (including any Contract) that should have been transferred to the Buyer, either directly or indirectly (through the acquisition of the Interests) pursuant to this Agreement was not so transferred, or any asset (including any Contract) unrelated to the Business or primarily related to the business of the Seller and its Affiliates (other than the Company and its Subsidiaries) was inadvertently transferred to the Buyer or the Company or any of its Subsidiaries (it being understood that any asset listed on the Disclosure Schedules that is expressly contemplated to be transferred or be owned by the Company or any of its Subsidiaries shall not be deemed to be inadvertently transferred to the Buyer), the Seller shall, and shall cause its applicable Affiliates to, or the Buyer shall, and shall cause its Subsidiaries to, as applicable, in each case as promptly as practicable: (i) transfer all rights, title and interest in such asset to the Buyer, the Company, their respective Subsidiaries or as the Buyer may direct, or to the Seller or as the Seller may direct, as applicable, in each case for no additional consideration; and (ii) hold its right, title and interest in and to such asset in trust for the applicable transferee until such time as such transfer is completed.
		

		
			Section 5.16    Release.  In consideration for the agreement and covenants of the Buyer set forth in this Agreement, the Seller and each of its Affiliates hereby knowingly, voluntarily and unconditionally releases and forever discharges and covenants not to sue the Buyer, the Company or any of its Subsidiaries, or their respective predecessors, successors, parents, Subsidiaries or Affiliates, or any of their respective current and former officers, directors, employees, agents or representatives for or with respect to, any and all claims, causes of action, demands, suits, debts, obligations, liabilities, damages, losses, costs, and expenses (including attorneys’ fees) of every kind or nature whatsoever, known or unknown, actual or potential, suspected or unsuspected, fixed or contingent, that the releasing party has or may have, now or in the future, arising out of, relating to, or resulting from any act of commission or omission, errors, negligence, strict liability, breach of contract, tort, violations of Law, matter or cause whatsoever from the beginning of time to the Closing Date; provided,  however, that such release shall not cover: (a) any claims against the Buyer or any of its Affiliates (other than the Company or any of its Subsidiaries) unrelated in any way to the Company or any of its Subsidiaries or (b) any claims arising under this Agreement or any Ancillary Agreement.
		

		
			Section 5.17    Restrictive Covenants.  For a period of three (3) years following the Closing Date, the Seller shall not, and shall cause its Affiliates not to, directly or indirectly:
		

		
			(a)        (i) solicit or encourage any Person who has been a distributor, vendor, supplier, independent contractor, licensor or other material business relation of the Company or
		

		
			
		

		
			

		 

		

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			any of its Subsidiaries at any time within the twelve (12) month period immediately preceding the Closing Date to terminate or diminish its, his or her relationship with the Business, the Buyer or any of its Affiliates; provided that entering into any agreement with any of the Persons described in this Section 5.17(a)(i) in the ordinary course of the Seller’s business shall not, solely by reason thereof, constitute a violation of this Section 5.17(a)(i), or (ii) hire or engage, or solicit for hiring or engagement, any Person who was an employee of the Company or any of its Subsidiaries at any time within the six (6) month period immediately preceding the Closing Date, or seek to persuade any such Person to discontinue employment with the Business, the Buyer or any of its Affiliates; provided that a general solicitation by the Seller or any of its Affiliates by blanket mailing or published advertisement that is not directed at any of the Persons described in this Section 5.17(a)(ii) shall not, solely by reason thereof, constitute a violation of this Section 5.17(a); or
		

		
			(b)        except in order to comply with applicable Law or to enforce (or defend) any rights (or pursue any remedies) hereunder, make any disparaging or false statement about the Business, the Company or any of its Subsidiaries, the Buyer or any of their respective Affiliates or Representatives (including with respect to the products, services, equipment, Intellectual Property owned by the Business, vendors, policies, practices, operations, employees or directors of any such Person).
		

		
			(c)        The Seller agrees that its agreement to the covenants contained in this Section 5.17 is a material condition of the Buyer’s willingness to enter into and consummate the transactions contemplated by this Agreement, and that such covenants are necessary to protect the goodwill, confidential information, trade secrets and other legitimate interests of the Business.  In the event that any provision of this Section 5.17 is determined by any court of competent jurisdiction to be unenforceable by reason of its being extended over too great a time, too large a geographic area or too great a range of activities, that provision shall be deemed to be modified to permit its enforcement to the maximum extent permitted by law.  The Seller acknowledges and agrees that the Buyer would be irreparably harmed by any breach or threatened breach of this Section 5.17 and that there would be no adequate remedy at law or in damages to compensate such party for any such breach or threatened breach.  The Seller therefore agrees that, in addition to any other remedies available to it, the Buyer shall be entitled to preliminary and permanent injunctive relief in the event of any breach or threatened breach by the Seller or any of its Affiliates of this Section 5.17, without the need to post a bond or any undertaking or to prove actual damages.
		

		
			Section 5.18    Emeril Termination Election.  In the event of an Emeril Lagasse Material Adverse Effect, the Buyer shall have the right, within five (5) Business Days thereof, to elect not to acquire that portion of the Business engaged in promoting, marketing and licensing the Emeril Lagasse brand (the “Emeril Termination Election”).  In the event that the Buyer validly makes an Emeril Termination Election pursuant to this Section 5.18,  this Agreement shall be amended and the parties shall take such actions as to provide that (a) the Enterprise Valuation shall be reduced as provided in the definition thereof, (b) all references in this Agreement to the “Business” shall refer only to that portion of the Business engaged in promoting, marketing and licensing the Martha Stewart brand, and (c) the Seller shall undertake such reorganization steps as may be necessary to transfer the assets and liabilities to the extent related to the Emeril Lagasse brand and not used or held for use in the Business relating to the Martha Stewart brand out of the Company and its Subsidiaries.
		

		
			
		

		
			

		 

		

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			Section 5.19    Consulting Agreements.
		

		
			(a)        The Buyer shall assume and pay, or cause the Company and its Subsidiaries to assume and pay, any commissions owed by the Business pursuant to the consulting agreements set forth on Section 5.19(a) of the Disclosure Schedules to the extent such commissions are owed following the Closing by the Company or any of its Affiliates (other than commissions related to Seller Receivables) for services performed at or prior to the Closing for licensee accounts set forth on Section 5.19(a) of the Disclosure Schedules, which payments shall be made in accordance with the terms of such agreements.
		

		
			(b)        At or prior to the Closing, the Seller shall use commercially reasonable efforts to terminate the consulting agreements set forth on Section 5.19(b) of the Disclosure Schedules, with no further liability or obligation of the Company or any of its Subsidiaries thereunder other than any commissions assumed by the Buyer, the Company and its Subsidiaries pursuant to Section 5.19(a).
		

		
			(c)        At or prior to the Closing, the Seller shall use commercially reasonable efforts to assign the consulting agreements set forth on Section 5.19(c) of the Disclosure Schedules to the Company (the “Assigned Consulting Agreements”).  In the event any Assigned Consulting Agreement is not assigned to the Company prior to the Closing, the Seller and the Buyer shall thereafter cooperate in a mutually agreeable arrangement to provide the Company (or one or more of its Affiliates) with the benefits of such Assigned Consulting Agreements until the Assigned Consulting Agreement is assigned to the Company.
		

		
			Section 5.20    Pre-Closing Accounts Payable.  Following the Closing, the Seller shall pay, or cause to be paid, for the Buyer’s, the Company’s or any of the Company’s Subsidiaries’ respective account, when due, but following 30 days of receipt from the Buyer of notice and reasonable evidence thereof, any accounts payable of the Company or any of its Subsidiaries relating to the period prior to the Closing Date that were not paid on or prior to the Closing.
		

		
			Section 5.21    Meredith Sublease.  Following the Closing, the Buyer shall pay, or cause the Company to pay, to the Seller any Studio Subsidization Fee (net of any fees, expenses or Taxes incurred in connection therewith) received from Meredith Corporation in connection with its use of the Company’s photography studio located at 601 West 26th Street, 9th Floor, New York, New York 10001.  Payments in respect of this Section 5.21 shall be made within five (5) Business Days of receipt of such payment or payments by wire transfer of immediately available funds to the Seller.
		

		
			Section 5.22    Social Media Accounts.  Prior to the Closing, the Seller shall use commercially reasonable efforts to deliver a schedule of the user names of, and passwords for, the social media accounts owned by the Company or any of its Subsidiaries or used or held for use in the Business that, in each case, are controlled by the Seller or any of its Affiliates.
		

		
			Section 5.23    Information Technology Transition.  In order to facilitate (a) the orderly transition of certain information technology systems and hardware (the “Transferred Systems”) to the Buyer (the “IT Transition”) and (b) the orderly transition of Seller’s or the Company’s and its Subsidiaries’, as applicable, business activities and data from the Transferred Systems to other
		

		
			
		

		
			

		 

		

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			information technology systems and hardware of the Seller (the “Reverse IT Transition”), the parties hereto will cooperate and work together in good faith between the date of this Agreement and the Closing Date to agree on a plan to accomplish the IT Transition and the Reverse IT Transition.  The parties hereto acknowledge and agree that the Reverse IT Transition will not be completed until December 31, 2019 or thereafter, and the parties hereto further agree that, until such time as the Reverse IT Transition is complete, the Seller will retain control over the Transferred Systems, including control of all related access and use rights; provided, that the Seller shall provide the Buyer with reasonable access to the Transferred Systems until the end of the IT Transition or the Reverse IT Transition, whichever is later; provided,  further, that the Seller shall indemnify and hold the Buyer harmless from any and all claims and Losses arising out of the breach of the security of the Transferred Systems occurring during the transition period.
		

		
			ARTICLE VI
		

		
			CONDITIONS TO CLOSING
		

		
			Section 6.1       General Conditions.  The respective obligations of the Buyer and the Seller to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment, at or prior to the Closing, of each of the following conditions, any of which may, to the extent permitted by applicable Law, be waived in writing by any party in its sole discretion (provided, that such waiver shall only be effective as to the obligations of such party):
		

		
			(a)        No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Law or Order (whether temporary, preliminary or permanent) that is then in effect and that enjoins, restrains, makes illegal or otherwise prohibits the consummation of the transactions contemplated by this Agreement.
		

		
			(b)        (i) Any waiting period (and any extension thereof) under the HSR Act applicable to the transactions contemplated by this Agreement shall have expired or shall have been terminated and (ii) all applicable consents and approvals of the Governmental Authorities set forth in Section 6.1(b) of the Disclosure Schedules shall have been obtained.
		

		
			(c)        The Reorganization and Subsidiary Conversions shall have been completed.
		

		
			Section 6.2      Conditions to Obligations of the Seller.  The obligations of the Seller to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment, at or prior to the Closing, of each of the following conditions, any of which may be waived in writing by the Seller in its sole discretion:
		

		
			(a)        (i) The Buyer Fundamental Representations shall be true and correct in all respects as of the date of this Agreement and as of the Closing Date, or in the case of Buyer Fundamental Representations that are made as of a specified date, such Buyer Fundamental Representations shall be true and correct in all respects as of such specified date and (ii) the other representations and warranties of the Buyer set forth in this Agreement shall be true and correct in all respects as of the date of this Agreement and as of the Closing Date, or in the case of such representations and warranties that are made as of a specified date, such representations and warranties shall be true and correct in all respects as of such specified date, except, in the case of this clause (ii), where the failure to be so true and correct would not and would not reasonably be
		

		
			
		

		
			

		 

		

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			expected to, individually or in the aggregate, prevent, materially delay or materially impede the performance by the Buyer of its obligations under this Agreement or the consummation of the transactions contemplated hereby (for purposes of this Section 6.2(a)(ii), such representations and warranties shall be read without reference to materiality, Material Adverse Effect or similar monetary and non-monetary qualifications).
		

		
			(b)        The Buyer shall have performed in all material respects all obligations and agreements and complied with all covenants and conditions required by this Agreement to be performed or complied with by it prior to or at the Closing.
		

		
			(c)        The Seller shall have received from the Buyer a certificate to the effect set forth in Section 6.2(a) and Section 6.2(b), signed by a duly authorized officer thereof.
		

		
			(d)        The Seller shall have received each of the Ancillary Agreements required to be delivered by the Buyer.
		

		
			Section 6.3      Conditions to Obligations of the Buyer.  The obligations of the Buyer to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment, at or prior to the Closing, of each of the following conditions, any of which may be waived in writing by the Buyer in its sole discretion:
		

		
			(a)        (i) The Seller Fundamental Representations shall be true and correct in all respects as of the date of this Agreement and as of the Closing Date, or in the case of Seller Fundamental Representations that are made as of a specified date, such Seller Fundamental Representations shall be true and correct in all respects as of such specified date, (ii) the representations and warranties of the Seller set forth in Section 3.15(a),  Section 3.15(d) and Section 3.15(e) shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date, or in the case of such representations and warranties that are made as of a specified date, such representations and warranties shall be true and correct in all material respects as of such specified date,  and (iii) the other representations and warranties of the Seller set forth in this Agreement shall be true and correct in all respects as of the date of this Agreement and as of the Closing Date, or in the case of such representations and warranties that are made as of a specified date, such representations and warranties shall be true and correct in all respects as of such specified date, except, in the case of this clause (iii), where the failure to be so true and correct would not have a Material Adverse Effect  (provided, that, for purposes of this Section 6.3(a)(iii), such representations and warranties shall be read without reference to materiality, Material Adverse Effect or similar monetary and non-monetary qualifications).
		

		
			(b)        The Seller shall have performed in all material respects all obligations and agreements and complied with all covenants and conditions required by this Agreement to be performed or complied with by the Seller prior to or at the Closing.
		

		
			(c)        Since the date of this Agreement, there shall not have occurred a Material Adverse Effect.
		

		
			(d)        The Buyer shall have received from the Seller a certificate to the effect set forth in Section 6.3(a),  Section 6.3(b) and Section 6.3(c), signed by a duly authorized officer thereof.
		

		
			
		

		
			

		 

		

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			(e)        The Buyer shall have received each of the Ancillary Agreements required to be delivered by the Seller.
		

		
			ARTICLE VII
		

		
			TERMINATION
		

		
			Section 7.1      Termination.  This Agreement may be terminated at any time prior to the Closing:
		

		
			(a)        by mutual written consent of the Buyer and the Seller;
		

		
			(b)        (i) by the Seller, if the Seller is not in material breach of its obligations under this Agreement and the Buyer breaches or fails to perform in any respect any of its representations, warranties or covenants contained in this Agreement and such breach or failure to perform (A) would give rise to the failure of a condition set forth in Section 6.2, and (1) cannot be cured by the Buyer before the Termination Date or (2) if capable of being cured, has not been cured by the earlier of (x) 20 days following receipt of written notice from the Buyer of such breach or (y) the Termination Date and (B) has not been waived in writing by the Seller; or (ii) by the Buyer, if the Buyer is not in material breach of its obligations under this Agreement and the Seller breaches or fails to perform in any respect any of its representations, warranties or covenants contained in this Agreement and such breach or failure to perform (A) would give rise to the failure of a condition set forth in Section 6.3, and (1) cannot be cured by the Seller before the Termination Date or (2) if capable of being cured, has not been cured by the earlier of (x) 20 days following receipt of written notice from the Seller of such breach or (y) the Termination Date and (B) has not been waived in writing by the Buyer;
		

		
			(c)        by either the Seller or the Buyer if the Closing shall not have occurred by December 31, 2019 (the “Termination Date”); provided, that the right to terminate this Agreement under this Section 7.1(c) shall not be available if the failure of the party so requesting termination to fulfill any obligation under this Agreement shall have been the cause of the failure of the Closing to occur on or prior to such date;
		

		
			(d)        by either the Seller or the Buyer in the event that any Governmental Authority of competent jurisdiction shall have issued an order, decree or ruling or taken any other action permanently restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated by this Agreement; provided, that no party may terminate this Agreement pursuant to this Section 7.1(d) if such party’s breach of its obligations under this Agreement caused the occurrence of such order, decree, ruling or other action; or
		

		
			(e)        by either the Seller or the Buyer, within ten (10) Business Days following the occurrence of a Personnel Event.
		

		
			The party seeking to terminate this Agreement pursuant to this Section 7.1 (other than Section 7.1(a)) shall give written notice of such termination to the other party.
		

		
			Section 7.2       Effect of Termination.  In the event of termination of this Agreement as provided in Section 7.1, this Agreement shall forthwith become void and there shall be no liability on the part of any party except (i) for the provisions of Section 3.20 and Section 4.6 relating to
		

		
			
		

		
			

		 

		

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			broker’s fees and finder’s fees, Section 5.7 relating to confidentiality, Section 5.9 relating to public announcements, Article IX relating to general provisions and this Section 7.2 and (ii) that nothing in this Section 7.2 shall relieve any party from liability for any intentional breach of this Agreement prior to such termination or for any actual fraud in this Agreement, and in each case the aggrieved party will be entitled to all rights and remedies available at law or in equity.  For purposes of this Agreement, “intentional breach” means a material breach of this Agreement that is a consequence of an act (or failure to act) undertaken by the breaching party with the knowledge (actual or constructive) that the taking of (or the failure to take) such act would, or would reasonably be expected to, cause a breach of this Agreement; provided, that it is understood and agreed that any breach of Section 5.3(a) shall constitute an intentional breach.  No termination of this Agreement shall affect the obligations of the parties contained in the Confidentiality Agreement, all of which obligations shall survive termination of this Agreement in accordance with their terms.
		

		
			ARTICLE VIII
		

		
			INDEMNIFICATION
		

		
			Section 8.1      Indemnification Obligations of the Seller.  The Seller shall indemnify, defend and hold harmless the Buyer Indemnified Parties from, against, and in respect of, any and all claims, liabilities, obligations, damages, losses, costs, expenses, penalties, fines and judgments (at equity or at law, including statutory and common) (including amounts paid in settlement and reasonable attorneys’ fees and expenses) arising out of or relating to:
		

		
			(a)        any breach of any representation or warranty made by the Seller in this Agreement as of the date hereof or as of the Closing as if made on and as of the Closing (except if such representations and warranties are made as of an earlier date, in which case, as of such earlier date) (for purposes of determining a breach or inaccuracy and/or the amount of Buyer Losses resulting from such breach pursuant to this Section 8.1(a), such representations and warranties shall be read without reference to materiality, Material Adverse Effect or similar monetary and non-monetary qualifications);
		

		
			(b)        any breach of any covenant, agreement or undertaking made by the Seller in this Agreement;
		

		
			(c)        (i) claims made in or losses resulting from pending or future suits, actions, investigations or other legal, governmental or administrative proceedings (including, for the avoidance of doubt, claims arising out of or relating to data security or privacy breaches, GDPR violations or violations of similar U.S. or state Laws), or (ii) claims or losses based on violations of Law as in effect on or prior to the Closing, breach of contract, employment practices, health and safety matters or the operation of the Business, in each case solely to the extent arising out of or relating to the operations of the Company, any of its Subsidiaries or the Business prior to the Closing;
		

		
			(d)        (i) any Taxes of or imposed on the Company, any of its Subsidiaries or otherwise with respect to the Business or the assets of the Company or any of its Subsidiaries with respect to any taxable period (or portion thereof) ending on or before the Closing Date, except to the extent such Taxes were reflected on the Final Closing Statement, (ii) any and all Taxes of the Seller, Holdco or any Affiliates of the Seller for any taxable period, (iii) any Taxes of any Person
		

		
			
		

		
			

		 

		

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			(other than the Company or any of its Subsidiaries) for any taxable period imposed on the Company or any of its Subsidiaries under Treasury Regulations Section 1.1502-6 (or any similar provision of state, local or foreign Law) or as a transferee or successor, by Contract, or otherwise, except to the extent such Taxes were reflected on the Final Closing Statement; and (iv) any Taxes for which Seller is responsible pursuant to Section 5.12(a),  Section 5.12(d) or Section 5.12(e);
		

		
			(e)        any actual fraud committed by the Seller in this Agreement;
		

		
			(f)        the Indebtedness or Transaction Expenses to the extent not paid on or prior to the Closing Date or reflected as a current liability on the Final Closing Statement; or
		

		
			(g)        the matter set forth on Schedule 8.1(g).
		

		
			The claims, liabilities, obligations, losses, damages, costs, expenses, penalties, fines and judgments of the Buyer Indemnified Parties described in this Section 8.1 as to which the Buyer Indemnified Parties are entitled to indemnification are collectively referred to as “Buyer Losses.”
		

		
			Section 8.2      Indemnification Obligations of the Buyer.  The Buyer shall indemnify and hold harmless the Seller Indemnified Parties from, against and in respect of any and all claims, liabilities, obligations, losses, damages, costs, expenses, penalties, fines and judgments (at equity or at law, including statutory and common) (including amounts paid in settlement and reasonable attorneys’ fees and expenses) arising out of or relating to:
		

		
			(a)        any breach of any representation or warranty made by the Buyer in this Agreement as of the date hereof or as of the Closing as if made on and as of the Closing (except if such representations and warranties are made as of an earlier date, in which case, as of such earlier date) (for purposes of determining a breach or inaccuracy and/or the amount of Seller Losses resulting from such breach pursuant to this Section 8.2Section 8.1(a), such representations and warranties shall be read without reference to materiality, Material Adverse Effect or similar monetary and non-monetary qualifications);
		

		
			(b)        any breach of any covenant, agreement or undertaking made by the Buyer in this Agreement;
		

		
			(c)        any claim or losses arising out of the Buyer’s conduct of the Business following the Closing, except to the extent indemnified or otherwise borne by the Seller hereunder; and
		

		
			(d)        any Taxes for which the Buyer is responsible pursuant to Section 5.12(a) and Section 5.12(e).
		

		
			The claims, liabilities, obligations, losses, damages, costs, expenses, penalties, fines and judgments of the Seller Indemnified Parties described in this Section 8.2 as to which the Seller Indemnified Parties are entitled to indemnification are collectively referred to as “Seller Losses” and, together with the Buyer Losses, “Losses”.
		

		
			Section 8.3      Indemnification Procedure.
		

		
			
		

		
			

		 

		

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			(a)        Promptly following receipt by an Indemnified Party of notice by a third party (including any Governmental Authority) of any complaint or the commencement of any audit, investigation, action or proceeding with respect to which such Indemnified Party may be entitled to receive payment from the other party hereto for any Buyer Loss or any Seller Loss (as the case may be), such Indemnified Party shall notify the Buyer or the Seller, as the case may be (the “Indemnifying Party”), promptly following the Indemnified Party’s receipt of such complaint or notice of the commencement of such audit, investigation, action or proceeding; provided,  however, that the failure to so notify the Indemnifying Party shall relieve the Indemnifying Party from liability hereunder with respect to such claim only if, and only to the extent that, the Indemnifying Party is prejudiced by such failure.  The Indemnifying Party shall have the right, upon written notice delivered to the Indemnified Party within thirty (30) days of receipt of notice from the Indemnified Party of the commencement of such audit, investigation, action or proceeding, to assume, at its sole cost and expense, the defense of such audit, investigation, action or proceeding to the extent such audit, investigation, action or proceeding involves solely monetary damages, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of the fees and disbursements of such counsel; provided,  however, that an Indemnifying Party will not be entitled to assume the defense of any audit, investigation, action or proceeding if (i) such claim could result in criminal liability of, or equitable remedies against, the Indemnified Party, (ii) based on the written advice of counsel for the Indemnified Party, the interests of the Indemnifying Party and the Indemnified Party with respect to such claim are in conflict with one another, and as a result, the Indemnifying Party could not adequately represent the interests of the Indemnified Party in such claim, or (iii) such claim would be reasonably likely to be detrimental to or injure the Indemnified Party’s customer, licensing or vendor relations in existence at the time of such claim in any material respect.  In the event, however, that the Indemnifying Party declines or fails to assume, or is not permitted to assume, the defense of the audit, investigation, action or proceeding on the terms provided above or to employ counsel reasonably satisfactory to the Indemnified Party, in either case within such thirty (30) day period, or if the Indemnifying Party is not entitled to assume the defense of the audit, investigation, action or proceeding in accordance with the preceding sentence, then such Indemnified Party may employ counsel to represent or defend it in any such audit, investigation, action or proceeding and the Indemnifying Party shall pay the reasonable fees and disbursements of such counsel for the Indemnified Party to the extent indemnifiable hereunder; provided,  however, that the Indemnifying Party shall not be required to pay the fees and disbursements of more than one counsel for all Indemnified Parties in any jurisdiction in any single audit, investigation, action or proceeding.  In any audit, investigation, action or proceeding for which indemnification is being sought hereunder the Indemnified Party or the Indemnifying Party, whichever is not assuming the defense of such action, shall have the right to participate in such matter and to retain its own counsel at such party’s own expense.  The Indemnifying Party or the Indemnified Party (as the case may be) shall at all times use reasonable efforts to keep the Indemnifying Party or the Indemnified Party (as the case may be) reasonably apprised of the status of the defense of any matter the defense of which it is maintaining and to cooperate in good faith with each other with respect to the defense of any such matter.
		

		
			(b)        Whether or not the Indemnifying Party assumes defense of an audit, investigation, action or proceeding, neither the Indemnifying Party nor the Indemnified Party may settle, compromise or discharge, or offer to settle, compromise or discharge, any audit, investigation, action or proceeding or consent to the entry of any judgment with respect to which
		

		
			
		

		
			

		 

		

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			indemnification is being sought hereunder without the prior written consent of the other (not to be unreasonably withheld, conditioned or delayed), unless (i) such settlement, compromise or consent includes an unconditional release of the other party and its officers, directors, managers, employees and Affiliates from all liability arising out of such claim and no amounts are payable by the other party with respect thereto;  and (ii) the party entering into such settlement, compromise or consent waives any right to indemnity from the other party in connection with such claim hereunder.
		

		
			(c)        In the event an Indemnified Party claims a right to payment pursuant to this Article VIII, such Indemnified Party shall promptly send written notice of such claim to the appropriate Indemnifying Party.  Such notice shall specify the basis for such claim and the amount sought (if then known).  The failure by any Indemnified Party to so notify the Indemnifying Party shall not relieve the Indemnifying Party from any liability that it may have to such Indemnified Party with respect to any claim made pursuant to this Section 8.3(c) except to the extent that the Indemnifying Party is prejudiced by such failure.  In the event the Indemnified Party delivers written notice of a claim (and receives written confirmation of receipt thereof), the Indemnifying Party shall respond to such notice within sixty (60) days following receipt of such notice, provided, that, any failure by any Indemnifying Party to so respond shall not result in any liability to the Indemnifying Party except to the extent that the Indemnified Party is prejudiced by such failure.  The Indemnified Party and Indemnifying Party shall reasonably cooperate and assist each other in determining the validity of any claim for indemnity and in otherwise resolving such matters.
		

		
			(d)        Subject to Section 8.5, any indemnification obligation of the Seller pursuant to this Article VIII shall be (i) first, satisfied by offsetting all or any portion of any amounts owing from the Seller against any earned but unpaid portion of the Earn-Out Payments and (ii) second, if the amount that can be offset against the earned but unpaid portion of the Earn-Out Payments is insufficient, by the Seller directly by wire transfer of immediately available funds.
		

		
			Section 8.4      Claims Period.  The Claims Period hereunder shall begin on the date hereof and terminate as follows:
		

		
			(a)        (i) with respect to Buyer Losses arising under Section 8.1(a), (A) with respect to any breach of any Seller Fundamental Representations, the Claims Period shall continue until the fifth anniversary of the Closing Date, (B) with respect to any breach of the representations and warranties made in Section 3.15(a),  Section 3.15(d) and Section 3.15(e), the Claims Period shall terminate on the date that is thirty-six months (36) months following the Closing Date, (C)  with respect to any breach of the representations and warranties made in Section 3.17, the Claims Period shall terminate on the date that is thirty (30) days following the expiration of the applicable statutory period of limitation for assessment of Taxes, and (D) with respect to any other Buyer Losses arising under Section 8.1(a), the Claims Period shall terminate on the date that is twelve (12) months following the Closing Date, and (ii) with respect to Buyer Losses arising under (A) Section 8.1(d), the Claims Period shall terminate on the date that is thirty (30) days following the expiration of the applicable statutory period of limitation for assessment of Taxes, and (B) Section 8.1(b),  Section 8.1(c),  Section 8.1(e),  Section 8.1(f) and Section 8.1(g), the Claims Period shall terminate on the date that is thirty (30) days following the expiration of the applicable statutory period of limitation; and
		

		
			
		

		
			

		 

		

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			(b)        (i) with respect to Seller Losses arising under Section 8.2(a), (A) with respect to any breach or inaccuracy of any Buyer Fundamental Representations, the Claims Period shall continue until the fifth anniversary of the Closing Date, and (B) with respect to any breach or inaccuracy of any representations and warranties that are not Buyer Fundamental Representations, the Claims Period shall terminate on the date that is twelve (12) months following the Closing Date; and (ii) with respect to all other Seller Losses arising under Section 8.2,  the Claims Period shall terminate on the date that is thirty (30) days following the expiration of the applicable statutory period of limitation.
		

		
			Notwithstanding the foregoing, if, prior to the close of business on the last day of the applicable Claims Period, an Indemnifying Party shall have been properly notified of a claim for indemnity hereunder and such claim shall not have been finally resolved or disposed of at such date, such claim shall continue to survive and shall remain a basis for indemnity hereunder until such claim is finally resolved or disposed of in accordance with the terms hereof.
		

		
			Section 8.5      Liability Limits.
		

		
			(a)        Notwithstanding anything to the contrary set forth herein:
		

		
			(i)         the Seller shall have no liability pursuant to Section 8.1(a) for any individual claim (or group of related claims arising out of the same series of facts, conditions or events) unless the Buyer Losses in respect of such claim or group of related claims exceeds $37,500  (such amount, the “Buyer Mini-Basket”) (after which, subject to the terms, conditions and limitations otherwise set forth in this Article VIII, the Seller shall be liable for the full amount of such Buyer Losses);
		

		
			(ii)       the Buyer Indemnified Parties shall not make a claim against the Seller for indemnification under Section 8.1(a) for Buyer Losses unless and until the aggregate amount of such Buyer Losses exceeds $1,670,000 (the “Buyer Basket”), in which case the Seller shall be liable only for such Buyer Losses in excess of $835,000 (the “Buyer Basket Tipping Point”); provided, that solely with respect to any such claim for a breach of any representation or warranty for which the Seller delivers a Supplement pursuant to Section 5.5(b), the Buyer Basket shall be deemed to equal $4,125,000 and the Buyer Basket Tipping Point shall be deemed to equal $2,062,500; and
		

		
			(iii)      the total aggregate amount of the liability of the Seller for Buyer Losses pursuant to Section 8.1(a) shall be limited to $16,700,000 (the “Buyer Cap”).
		

		
			Notwithstanding anything to the contrary set forth herein, the Seller Fundamental Representations and the representations and warranties set forth in Section 3.15(d),  Section 3.15(e), and Section 3.17 shall not be subject to the Buyer Mini-Basket, the  Buyer Basket or the Buyer Cap; provided, that the total aggregate amount of the liability of the Seller for Buyer Losses arising under Section 3.15(d),  Section 3.15(e), and Section 3.17 shall be limited to $167,000,000; provided, further, that in no event shall the Seller be responsible for any liability under this Agreement in an amount in excess of the proceeds received by it hereunder.
		

		
			(b)        The amount of any and all Losses under this Article VIII shall be determined net of any amounts actually recovered pursuant to any insurance, indemnity, reimbursement
		

		
			
		

		
			

		 

		

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			arrangement, or similar contract or other recovery available to the Indemnified Party or its Affiliates in connection with the facts giving rise to the right of indemnification (in each case, net of any fees, expenses or Taxes incurred in connection therewith, including increased premiums) (each, an “Alternative Recovery”).  The Indemnified Party will, subject applicable Law and Contract, use commercially reasonable efforts to seek recovery under all such Alternative Recoveries with respect to any Loss to substantially the same extent as such Indemnified Party would if such Loss were not subject to indemnification hereunder;  provided, that the foregoing clause shall not be deemed to require that any Indemnified Party commence, defend or participate in litigation.  In the event that the Indemnified Party receives recovery of any amount pursuant to an Alternative Recovery for which it has already been indemnified by the Indemnifying Party hereunder, the Indemnified Party will promptly refund an equal amount to the Indemnifying Party.
		

		
			(c)        All Losses shall be determined without duplication of recovery by reason of the state of facts giving rise to such Loss constituting a breach of more than one representation, warranty, covenant or agreement.  No Losses may be recovered under this Article VIII to the extent such Losses were taken into account as Closing Indebtedness, Closing Transaction Expenses or Closing Aggregate Deferred Revenue in the adjustment of the Purchase Price pursuant to Section 2.6.  No Indemnified Party will have any right to make a claim for any Loss under this Article VIII except to the extent such Indemnified Party believes in good faith that it is reasonably likely to, in fact, incur such Loss, and in no event can any Indemnified Party recover under this Article VIII unless and until a Loss is actually incurred.
		

		
			(d)        In no event shall any party hereto have any liability under any provision of this Agreement or any Ancillary Agreement for any (i) punitive or exemplary damages, (ii) unforeseeable consequential or unforeseeable special damages or (iii) any damages based on a multiple of earnings, in each case except to the extent paid or required to be paid by an Indemnified Party to a third party.
		

		
			Section 8.6      Exclusive Remedy.  The parties hereto agree that, excluding (a) any claim for injunctive or other equitable relief pursuant to the terms and conditions hereof (including based on a breach of Section 5.17) or (b) any claim related to actual fraud by the Seller or the Buyer in this Agreement, the indemnification provisions of this Article VIII are intended to provide the sole and exclusive remedy as to all claims either the Seller, on the one hand, or the Buyer, on the other hand, may incur arising from or relating to this Agreement or the transactions contemplated hereby (other than the Ancillary Agreements).
		

		
			Section 8.7       Adjustment to Purchase Price.  Any indemnification payment made pursuant to this Article VIII shall be treated as an adjustment to the Purchase Price for Tax purposes to the extent permitted by applicable Law.
		

		
			ARTICLE IX
		

		
			GENERAL PROVISIONS
		

		
			Section 9.1      Fees and Expenses.  Except as otherwise provided herein, all fees and expenses incurred in connection with or related to this Agreement and the Ancillary Agreements and the transactions contemplated hereby and thereby shall be paid by the party incurring such fees or expenses.
		

		
			
		

		
			

		 

		

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			Section 9.2     Amendment and Modification.  This Agreement may not be amended, modified or supplemented in any manner, whether by course of conduct or otherwise, except by an instrument in writing specifically designated as an amendment hereto, signed on behalf of each party.
		

		
			Section 9.3      Waiver; Extension.  At any time prior to the Closing, the Seller, on the one hand, and the Buyer, on the other hand, may (a) extend the time for performance of any of the obligations or other acts of the other party contained herein, (b) waive any inaccuracies in the representations and warranties of the other party contained herein or in any document, certificate or writing delivered by such party pursuant hereto, or (c) waive compliance by the other party with any of the agreements or conditions contained herein.  Any agreement on the part of any party to any such extension or waiver shall be valid only if set forth in a written agreement signed on behalf of such party.  No failure or delay of any party in exercising any right or remedy hereunder 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 right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power.  Any agreement on the part of any party to any such waiver shall be valid only if set forth in a written instrument executed and delivered by a duly authorized officer on behalf of such party.
		

		
			Section 9.4      Notices.  All notices and other communications hereunder shall be in writing and shall be deemed duly given (a) on the date of delivery if delivered personally, or if by e‐mail, upon written confirmation of receipt by e‐mail or otherwise, (b) on the first Business Day following the date of dispatch if delivered utilizing a next-day service by a recognized next-day courier or (c) on the earlier of confirmed receipt or the fifth Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid.  All notices hereunder shall be delivered to the addresses set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice:
		

		
			(i)         if to the Seller, to:
		

		
			Sequential Brands Group, Inc.
601 West 26th Street, 9th Floor
New York, New York 10001
Attention:  General Counsel
E-mail:  Eric Gul
		

		
			with a copy (which shall not constitute notice) to:
		

		
			 
		

		
			Gibson, Dunn & Crutcher LLP
200 Park Avenue
New York, NY 10166-0193
Attention:  Barbara Becker
		

		
			Saee Muzumdar
		

		
			E-mail:  bbecker@gibsondunn.com
		

		
			smuzumdar@gibsondunn.com
		

		
			(ii)       if to the Buyer, to:
		

		
			
		

		
			

		 

		

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			Marquee Brands LLC
		

		
			50 West 57th Street
		

		
			New York, NY 10019
		

		
			Attention: Michael Neuman
		

		
			Email: mneuman@marqueebrands.com
		

		
			 
		

		
			with a copy (which shall not constitute notice) to:
		

		
			 
		

		
			Moore & Van Allen PLLC
		

		
			100 North Tryon Street, Suite 4700
		

		
			Charlotte, NC 28202
		

		
			Attention: Michael R. Miller
		

		
			James R. Langdon
		

		
			Email: mikemiller@mvalaw.com
		

		
			jimlangdon@mvalaw.com
		

		
			Section 9.5      Interpretation.  When a reference is made in this Agreement to a Section, Article, Exhibit or Schedule such reference shall be to a Section, Article, Exhibit or Schedule of this Agreement unless otherwise indicated.  The table of contents and headings contained in this Agreement or in any Exhibit or Schedule are for convenience of reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.  All words used in this Agreement will be construed to be of such gender or number as the circumstances require.  Any capitalized terms used in any Exhibit or Schedule but not otherwise defined therein shall have the meaning as defined in this Agreement.  All Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth herein.  The word “including” and words of similar import when used in this Agreement will mean “including, without limitation,” unless otherwise specified.  The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to the Agreement as a whole and not to any particular provision in this Agreement.  The term “or” is not exclusive.  The word “will” shall be construed to have the same meaning and effect as the word “shall.”  Reference to any legislation or Law or to any provision thereof shall include references to any such legislation or Law as it may, after the date of this Agreement, from time to time, be amended, supplemented or re-enacted, and any reference to a statutory provision shall include any subordinate legislation made from time to time under that provision.  Time is of the essence in the performance of the parties’ respective obligations under this Agreement; and if any time period specified herein is extended, such extended time shall also be of the essence.  References to days mean calendar days unless otherwise specified.
		

		
			Section 9.6      Entire Agreement.  This Agreement (including the Exhibits and Schedules hereto), the Ancillary Agreements and the Confidentiality Agreement constitute the entire agreement, and supersede all prior written agreements, arrangements, communications and understandings and all prior and contemporaneous oral agreements, arrangements, communications and understandings between the parties to this Agreement with respect to the subject matter hereof and thereof.
		

		
			Section 9.7      Third-Party Beneficiaries.  This Agreement shall be binding upon and inure solely to the benefit of each party hereto, and nothing in this Agreement, express or implied, is
		

		
			
		

		
			

		 

		

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			intended to or shall confer upon any Person other than the parties and their respective successors and permitted assigns any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.
		

		
			Section 9.8       Governing Law.  This Agreement and all disputes or controversies arising out of or relating to this Agreement or the transactions contemplated hereby shall be governed by, and construed in accordance with, the internal Laws of the State of Delaware, without regard to the Laws of any other jurisdiction that might be applied because of the conflicts of Laws principles of the State of Delaware.
		

		
			Section 9.9      Submission to Jurisdiction.  Each of the parties irrevocably agrees that any legal action or proceeding arising out of or relating to this Agreement brought by any party or its successors or assigns against the other party shall be brought and determined in the Court of Chancery of the State of Delaware, provided, that if jurisdiction is not then available in the Court of Chancery of the State of Delaware, then any such legal action or proceeding may be brought in any federal court located in the State of Delaware or any other Delaware state court, and each of the parties hereby irrevocably submits to the exclusive jurisdiction of the aforesaid courts for itself and with respect to its property, generally and unconditionally, with regard to any such action or proceeding arising out of or relating to this Agreement and the transactions contemplated hereby.  Each of the parties agrees not to commence any action, suit or proceeding relating thereto except in the courts described above in Delaware, other than actions in any court of competent jurisdiction to enforce any judgment, decree or award rendered by any such court in Delaware as described herein.  Each of the parties further agrees that notice as provided herein shall constitute sufficient service of process and the parties further waive any argument that such service is insufficient.  Each of the parties hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, (a) any claim that it is not personally subject to the jurisdiction of the courts in Delaware as described herein for any reason, (b) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) that (i) the suit, action or proceeding in any such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper or (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.
		

		
			Section 9.10    Disclosure Generally.  Notwithstanding anything to the contrary contained in the Disclosure Schedules or in this Agreement, the information and disclosures contained in any Disclosure Schedule shall be deemed to be disclosed and incorporated by reference in any other Disclosure Schedule as though fully set forth in such Disclosure Schedule for which applicability of such information and disclosure is reasonably apparent on its face.  Such information and the
		

		
			
		

		
			

		 

		

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			dollar thresholds set forth herein shall not be used as a basis for interpreting the terms “material” or “Material Adverse Effect” or other similar terms in this Agreement.
		

		
			Section 9.11    Personal Liability.  This Agreement shall not create or be deemed to create or permit any personal liability or obligation on the part of any direct or indirect equityholder of the Seller or the Buyer or any officer, director, employee, Representative or investor of any party.
		

		
			Section 9.12   Assignment; Successors.  Neither this Agreement nor any of the rights, interests or obligations under this Agreement may be assigned or delegated, in whole or in part, by operation of law or otherwise, by any party without the prior written consent of the other party, and any such assignment without such prior written consent shall be null and void.  Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns.
		

		
			Section 9.13    Enforcement.  The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached.  Accordingly, each of the parties shall be entitled to specific performance of the terms hereof, including an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in the Court of Chancery of the State of Delaware, provided, that if jurisdiction is not then available in the Court of Chancery of the State of Delaware, then in any state or federal court located in the State of Delaware, this being in addition to any other remedy to which such party is entitled at law or in equity.  Each of the parties hereby further waives (a) any defense in any action for specific performance that a remedy at law would be adequate and (b) any requirement under any Law to post security as a prerequisite to obtaining equitable relief.
		

		
			Section 9.14    Currency.  All references to “dollars” or “$” or “US$” in this Agreement or any Ancillary Agreement refer to United States dollars, which is the currency used for all purposes in this Agreement and any Ancillary Agreement.
		

		
			Section 9.15   Severability.  Whenever possible, each provision or portion of any provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable Law, but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable Law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or portion of any provision in such jurisdiction, and this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained herein.
		

		
			Section 9.16    Waiver of Jury Trial.  EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
		

		
			Section 9.17    Counterparts.  This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same instrument and shall become
		

		
			
		

		
			

		 

		

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			effective when one or more counterparts have been signed by each of the parties and delivered to the other party.
		

		
			Section 9.18    Facsimile or .pdf Signature.  This Agreement may be executed by facsimile or .pdf signature and a facsimile or .pdf signature shall constitute an original for all purposes.
		

		
			Section 9.19    Legal Representation.
		

		
			(a)        The Buyer, on behalf of itself and its Affiliates (including, after the Closing, the Company) acknowledges and agrees that Gibson, Dunn & Crutcher LLP (“Gibson Dunn”) has acted as counsel for the Seller in connection with this Agreement and the transactions contemplated hereby (the “Acquisition Engagement”), and in connection with this Agreement and the transactions contemplated hereby, Gibson Dunn has not acted as counsel for any other Person, including the Buyer.
		

		
			(b)        Only the Seller, the Company and their respective Affiliates shall be considered clients of Gibson Dunn in the Acquisition Engagement.  The Buyer, on behalf of itself and its Affiliates (including, after the Closing, the Company) acknowledges and agrees that all confidential communications between the Seller, the Company and their respective Affiliates, on the one hand, and Gibson Dunn, on the other hand, in the course of the Acquisition Engagement, and any attendant attorney-client privilege, attorney work product protection, and expectation of client confidentiality applicable thereto, shall be deemed to belong solely to the Seller and its Affiliates (other than the Company), and not the Company, and shall not pass to or be claimed, held, or used by the Buyer or the Company upon or after the Closing.  Accordingly, the Buyer shall not have access to any such communications, or to the files of Gibson Dunn relating to the Acquisition Engagement, whether or not the Closing occurs.  Without limiting the generality of the foregoing, upon and after the Closing, (i) to the extent that files of Gibson Dunn in respect of the Acquisition Engagement constitute property of the client, only the Seller and its Affiliates shall hold such property rights and (ii) Gibson Dunn shall have no duty whatsoever to reveal or disclose any such attorney-client communications or files to the Company or the Buyer by reason of any attorney-client relationship between Gibson Dunn and the Company or otherwise; provided,  however, that notwithstanding the foregoing, Gibson Dunn shall not disclose any such attorney-client communications or files to any third parties (other than Representatives, accountants and advisors of the Seller and its Affiliates; provided, that such Representatives, accountants and advisors are instructed to maintain the confidence of such attorney-client communications).  The Buyer, on behalf of itself and its Affiliates (including, after the Closing, the Company) irrevocably waives any right it may have to discover or obtain information or documentation relating to the Acquisition Engagement, to the extent that such information or documentation was subject to an attorney-client privilege, work product protection or other expectation of confidentiality owed to the Seller and/or its Affiliates.  If and to the extent that, at any time subsequent to Closing, the Buyer or any of its Affiliates (including, after the Closing, the Company) shall have the right to assert or waive any attorney-client privilege with respect to any communication between the Company or its Affiliates and any Person representing them that occurred at any time prior to the Closing, the Buyer, on behalf of itself and its Affiliates (including, after the Closing, the Company) shall be entitled to waive such privilege only with the prior written consent of the Seller.
		

		
			
		

		
			

		 

		

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			(c)        The Buyer, on behalf of itself and its Affiliates (including after the Closing, the Company) acknowledges and agrees that Gibson Dunn has acted as counsel for the Seller and its Affiliates for several years and that the Seller reasonably anticipates that Gibson Dunn will continue to represent it and/or its Affiliates in future matters.  Accordingly, the Buyer, on behalf of itself and its Affiliates (including, after the Closing, the Company) expressly (i) consents to Gibson Dunn’s representation of the Seller and/or its Affiliates and/or any of their respective agents (if any of the foregoing Persons so desire) in any matter, including, without limitation, any post-Closing matter in which the interests of the Buyer and the Company, on the one hand, and the Seller or any of its Affiliates, on the other hand, are adverse, including any matter relating to the transactions contemplated by this Agreement or the Ancillary Agreements, and whether or not such matter is one in which Gibson Dunn may have previously advised the Seller, the Company or their respective Affiliates and (ii) consents to the disclosure by Gibson Dunn to the Seller or its Affiliates of any information learned by Gibson Dunn in the course of its representation of the Seller, the Company or their respective Affiliates, whether or not such information is subject to attorney-client privilege, attorney work product protection, or Gibson Dunn’s duty of confidentiality.
		

		
			(d)        From and after the Closing, the Company shall cease to have any attorney-client relationship with Gibson Dunn, unless and to the extent Gibson Dunn is expressly engaged in writing by the Company to represent the Company after the Closing and either (i) such engagement involves no conflict of interest with respect to the Seller and/or any of its Affiliates or (ii) the Seller and/or any such Affiliate, as applicable, consent in writing to such engagement.  Any such representation of the Company by Gibson Dunn after the Closing shall not affect the foregoing provisions hereof.  Furthermore, Gibson Dunn, in its sole discretion, shall be permitted to withdraw from representing the Company in order to represent or continue so representing the Seller.
		

		
			(e)        The Seller and the Buyer consent to the arrangements in this Section 9.19 and waive any actual or potential conflict of interest that may be involved in connection with any representation by Gibson Dunn permitted hereunder.
		

		
			Section 9.20    No Presumption Against Drafting Party.  Each of the Buyer and the Seller acknowledges that each party to this Agreement has been represented by legal counsel in connection with this Agreement and the transactions contemplated by this Agreement.  Accordingly, any rule of law or any legal decision that would require interpretation of any claimed ambiguities in this Agreement against the drafting party has no application and is expressly waived.
		

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

		
			 
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						SEQUENTIAL BRANDS GROUP, INC.

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						By:

					
					
						/s/ Karen Murray

				
	
					
						 

					
					
						 

					
					
						 

					
					
						Name: Karen Murray

				
	
					
						 

					
					
						 

					
					
						 

					
					
						Title: Chief Executive Officer

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						MARQUEE BRANDS LLC

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						By:

					
					
						/s/ Zachary P. Sigel

				
	
					
						 

					
					
						 

					
					
						 

					
					
						Name: Zachary P. Sigel

				
	
					
						 

					
					
						 

					
					
						 

					
					
						Title: Managing Director

				

		
			 
		

		
			 
		

		
			 
		

		
			

		 

		

			[Signature Page to Equity Purchase Agreement]

		

		

			 

		

		

		
			Schedule 1.1
		

		
			Ancillary Definitions
		

		
			“Emeril Lagasse Material Adverse Effect” means (a) the death or Disability of Emeril Lagasse, (b) the indictment or charging of Emeril Lagasse with any felony or other crime involving moral turpitude, dishonesty or fraud, or (c) the termination of the Emeril Lagasse Consulting Agreement; provided, that the termination of the Emeril Lagasse Consulting Agreement shall not constitute an Emeril Lagasse Material Adverse Effect pursuant to the foregoing clause (c) if such termination results from (x) any amendment to the Emeril Lagasse Consulting Agreement sought by the Buyer from Emeril Lagasse, or (y) any other action by the Buyer following the date of the Agreement that, at the time of such action, could reasonably be expected to result in the termination of the Emeril Lagasse Consulting Agreement (excluding, for the avoidance of doubt, a termination by Emeril Lagasse primarily in response to a refusal by the Buyer to agree, in response to a request by Emeril Lagasse or an entity controlled by him, to amend or otherwise modify the terms and conditions of a written Contract between such entity and the Company or any of its Subsidiaries).
		

		
			 
		

		
			“Personnel Event” means any of (i) the death or Disability of Martha Stewart, (ii) the indictment or charging of Martha Stewart with any felony or other crime involving moral turpitude, dishonesty or fraud, or (iii) the termination of the Martha Stewart Employment Agreement or the Martha Stewart Employment Agreement Assignment; provided, that the termination of the Martha Stewart Employment Agreement or the Martha Stewart Employment Agreement Assignment shall not constitute a basis for termination of this Agreement by the Buyer pursuant to the foregoing clause (iii) if such termination results from (x) any amendment to the Martha Stewart Employment Agreement or the Martha Stewart Employment Agreement Assignment sought by the Buyer from Martha Stewart (excluding, for the avoidance of doubt, any amendment expressly set forth in any Signing Deliverable), or (y) any other action by the Buyer following the date of the Agreement that, at the time of such action, could reasonably be expected to result in the termination of the Martha Stewart Employment Agreement (excluding, for the avoidance of doubt, a termination by Martha Stewart primarily in response to a refusal by the Buyer to agree, in response to a request by Martha Stewart or an entity controlled by her, to amend or otherwise modify the terms and conditions of a written Contract between such entity and the Company or any of its Subsidiaries).
		

		
			 
		

		
			 
		

		
			

		 

		

			Schedule 1.1

		

		

			 

		

		

		
			EXHIBIT A
		

		
			 
		

		
			SUBSIDIARIES
		

		
			 
		

		
			1.   Martha Stewart, Inc.
		

		
			2.   Body & Soul Omnimedia, Inc.
		

		
			3.   MSO IP Holdings, Inc.
		

		
			4.   MSLO Productions, Inc.
		

		
			5.   MSLO Productions – Home, Inc.
		

		
			6.   MSLO Productions – EDF, Inc.
		

		
			7.   Flour Productions, Inc.
		

		
			8.   MSLO Shared IP Sub, LLC
		

		
			9.   MSLO Emeril Acquisition Sub, LLC
		

		
			10. Emeril Primetime Music, Inc.
		

		
			11. Emeril Primetime Productions, Inc.
		

		
			12. Good Thing Productions, Inc.
		

		
			 
		

		
			 
		

		
			

		 

		

			Exhibit A

		

		

			 

		

		

		
			EXHIBIT B
		

		
			 
		

		
			SIGNING DELIVERABLES
		

		
			 
		

		
			1.   Sublease Agreement, dated as of April 12, 2019, by and between the Seller and the Company for 601 West 26th Street, 9th Floor, New York, NY 10001 (“Sublease Agreement”).
		

		
			2.   Consent to Sublease Agreement, dated as of April 12, 2019, by and among RXR SL Owner LLC, the Seller and the Company.
		

		
			3.   Assignment and Assumption Agreement, dated as of April 16, 2019, by and among the Seller, the Buyer, Martha Stewart and MS Real Estate Management Company.
		

		
			4.   Assignment, Assumption and Amendment Agreement, dated as of April  15, 2019, by and among the Seller, the Buyer and Carolyn D’Angelo.
		

		
			5.   Assignment Agreement, dated as of April 12, 2019, by and among the Seller, Sequential Licensing, Inc. and the Company.
		

		
			6.   Consent to the transactions contemplated by the Agreement, dated as of April 1, 2019, from MSC Cruises (USA), Inc.
		

		
			7.   Assignment and Assumption Agreement, dated as of April 11, 2019, by and among the Seller, Meredith Corporation, and the Company.
		

		
			 
		

		 

		

			Exhibit B

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