Document:

Exhibit 10.2

Exhibit 10.2

FIRST AMENDMENT TO FORBEARANCE AGREEMENT

This First Amendment to Forbearance Agreement (this “Amendment”), dated as of _____________, 2013, is entered into by and among Interactive Network, Inc., a Nevada corporation (“Interactive”) and FriendFinder Networks Inc., a Nevada corporation (“FFN” and, collectively with Interactive, the “Issuers”), each of the undersigned entities listed as guarantors (collectively, the “Guarantors”) and each of the undersigned holders of the Notes (collectively, together with any other holder of Notes who agrees to be bound by the Agreement, the “Forbearing Holders”). 

WHEREAS, the Issuers, the Guarantors and U.S. Bank National Association, as Trustee (the “Trustee”), have entered into that certain Indenture (as amended, modified or supplemented prior to the date hereof, the “Indenture”), dated as of October 27, 2010, in respect of the Issuers’ Cash Pay Secured Notes due 2013 (the “Notes”); 

WHEREAS, on November 5, 2012, the Issuers, based upon Excess Cash Flow of the Issuers and their Subsidiaries for the quarterly period ending September 30, 2012, were obligated to prepay a portion of the Notes, plus any accrued and unpaid interest thereon, pursuant to the Indenture and the Notes (the payment of the amount of such prepayment with interest on such date, the “Third Quarter 2012 Excess Cash Flow Prepayment”), and the failure to make the Third Quarter 2012 Excess Cash Flow Prepayment within 10 calendar days of the date when due constituted an Event of Default under the Indenture (the “Third Quarter 2012 Excess Cash Flow Prepayment Default”); 

WHEREAS, the Forbearing Holders granted the Issuers and the Guarantors’ request to forbear from exercising certain of their rights and remedies under the Indenture and from directing the Trustee to exercise such rights and remedies on the Forbearing Holders’ behalf resulting from the Third Quarter 2012 Excess Cash Flow Prepayment Default by entering into that certain Forbearance Agreement (the “Agreement”) on or about November 5, 2012;

WHEREAS, on February 4, 2013, the Issuers, based upon Excess Cash Flow of the Issuers and their Subsidiaries for the quarterly period ending December 31, 2012, are obligated to prepay a portion of the Notes, plus any accrued and unpaid interest thereon, pursuant to the Indenture and the Notes (the payment of the amount of such prepayment with interest on such date, the “Fourth Quarter 2012 Excess Cash Flow Prepayment”), and the failure to make the Fourth Quarter 2012 Excess Cash Flow Prepayment within 10 calendar days of the date when due would constitute an Event of Default under the Indenture (the “Fourth Quarter Excess Cash Flow Prepayment Default”); 

WHEREAS, the Issuers and the Guarantors have requested that the Forbearing Holders amend the Agreement in order to forbear from exercising certain of their rights and remedies under the Indenture and from directing the Trustee to exercise such rights and remedies on the Forbearing Holders’ behalf resulting from the Fourth Quarter 2012 Excess Cash Flow Prepayment Default; and 

WHEREAS, the Forbearing Holders are willing to grant the Issuers and the Guarantors’ request to amend the Agreement in order to forbear as described herein on the terms and subject to the conditions contained herein. 

NOW, THEREFORE, in consideration of the mutual covenants set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 

1.

Definitions.  Capitalized terms used but not defined in this Amendment, have the meanings ascribed to such terms in the Agreement.

2.

Amendments to the Agreement.  

(a)

The definition of “Excess Cash Flow Prepayment” contained in the Recitals to the Agreement is hereby amended and restated to mean “collectively, the Third Quarter 2012 Excess Cash Flow Prepayment and the Fourth Quarter 2012 Excess Cash Flow Prepayment”.

(b)

The definition of “Excess Cash Flow Prepayment Default” contained in the Recitals to the Agreement is hereby amended and restated to mean  “collectively, the Third Quarter 2012 Excess Cash Flow Prepayment Default and the Fourth Quarter 2012 Excess Cash Flow Prepayment Default”.

(c)

The definition of “Forbearance Termination Event” contained in Section 1 of the Agreement is hereby amended to delete the reference to “February 4, 2013” and replace it with “May 6, 2013”.

(d)

Section 1 of the Agreement is hereby amended to add the following definitions:

“First Amendment” means the First Amendment to Forbearance Agreement, dated as of ___________, 2013, by and among the Issuers, the Guarantors and the Forbearing Holders.

“Fourth Quarter 2012 Excess Cash Flow Prepayment” has the meaning assigned to such term in the First Amendment.

“Fourth Quarter 2012 Excess Cash Flow Prepayment Default” has the meaning assigned to such term in the First Amendment.

“Third Quarter 2012 Excess Cash Flow Prepayment” has the meaning assigned to such term in the First Amendment.

“Third Quarter 2012 Excess Cash Flow Prepayment Default” has the meaning assigned to such term in the First Amendment.

3.

Conditions to Effectiveness.  

This Amendment shall become effective on the date on which the following conditions precedent shall have been satisfied by the applicable parties or waived by the Forbearing Holders (the “Effective Date”):

(a)

each Forbearing Holder shall have executed and delivered to the Issuers a counterpart of this Amendment and shall have received a list of all the Forbearing Holders;

(b)

each Forbearing Holder shall have received a duly executed counterpart of this Amendment from the Issuers and each Guarantor listed on the signature pages hereto; and

(c)

on the Effective Date and upon giving effect to this Amendment, no Default or Event of Default has occurred and is continuing, subject to the Third Quarter 2012 Excess Cash Flow Prepayment Default and the anticipated Fourth Quarter 2012 Excess Cash Flow Prepayment Default.

4.

Representations and Warranties of Issuers and Guarantors.

(a)

This Amendment has been duly executed and delivered by each Issuer and each Guarantor, and each of this Amendment and the Agreement constitute its legal, valid and binding obligations, enforceable in accordance with its terms except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and principles of equity.

(b)

After giving effect to this Amendment, the representations and warranties of the Issuers and the Guarantors contained in Section 4(a) of the Agreement are true and correct in all material respects on and as of the date hereof.

(c)

After giving effect to this Amendment, each Issuer and each Guarantor reaffirms all covenants and agreements contained in Section 4 of the Agreement.

(d)

After giving effect to this Amendment, no Default or Event of Default (other than the Third Quarter 2012 Excess Cash Flow Prepayment Default and the anticipated Fourth Quarter 2012 Excess Cash Flow Prepayment Default) shall have occurred and be continuing.

5.

Counterparts.  This Amendment may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. Photocopies, facsimiles, and electronic scans of original signatures shall have the same force and effect as the original signatures.

6.

Full Force and Effect.  Except as expressly provided in this Amendment, the Agreement is not otherwise modified and the Agreement, the Notes, the Security Documents and each of the other agreements related thereto remain unchanged, in full force and effect and are hereby ratified and confirmed.  Upon the effectiveness of this Amendment, on and after the date hereof, each reference in the Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or words of like import shall mean and be a reference to the Agreement giving effect hereto.  Except as expressly provided above, the execution, delivery and effectiveness of this Amendment shall neither operate as a waiver of any right, power or remedy of any Forbearing Holder or the Trustee, nor constitute an amendment or waiver of any provision of the Agreement, the Notes, the Security Documents or any of the other agreements related thereto.

7.

Headings.  Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.

8.

Governing Law.  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

[signature pages to follow]

IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to be executed, sealed and delivered, as applicable, on the day and year first above written.

				
	 
	ISSUERS:

	 
	 
	 

	 
	INTERACTIVE NETWORK, INC., a Nevada corporation

	 
	 
	 

	 
	By:

	 

	 
	Name:

	Ezra Shashoua

	 
	Title:

	Chief Financial Officer

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	FRIENDFINDER NETWORKS INC., a Nevada corporation

	 
	 
	 

	 
	By:

	 

	 
	Name:

	Ezra Shashoua

	 
	Title:

	Chief Financial Officer

			
	 
	GUARANTORS:

	 
	 

	 
	GENERAL MEDIA ART HOLDING, INC.

GENERAL MEDIA COMMUNICATIONS, INC.

GENERAL MEDIA ENTERTAINMENT, INC.

GMCI INTERNET OPERATIONS, INC.

GMI ON-LINE VENTURES, LTD.

PENTHOUSE IMAGES ACQUISITIONS, LTD.

WEST COAST FACILITIES INC.

PMGI HOLDINGS INC.

PURE ENTERTAINMENT TELECOMMUNICATIONS, INC.

PENTHOUSE DIGITAL MEDIA PRODUCTIONS INC.

VIDEO BLISS, INC.

DANNI ASHE, INC.

SNAPSHOT PRODUCTIONS, LLC

VARIOUS, INC. 

	 
	 
	 

	 
	 
	 

	 
	By:

	 

	 
	Name:

	Ezra Shashoua

	 
	Title:

	Chief Financial Officer

	 
	 
	 

	 
	 
	 

	 
	TAN DOOR MEDIA INC. 

FIERCE WOMBAT GAMES INC. (F/K/A BIG EGO GAMES INC.)

NAFT NEWS CORPORATION

PLAYTIME GAMING INC.

	 
	 
	 

	 
	 
	 

	 
	By:

	 

	 
	Name:

	Ezra Shashoua

	 
	Title:

	Treasurer

			
	 
	ARGUS PAYMENTS INC.

BLUE HEN GROUP INC.

FRIENDFINDER VENTURES INC.

XVHUB GROUP INC. (F/K/A GIANT SWALLOWTAIL INC.)

PERFECTMATCH INC. (F/K/A GOLDENROD SPEAR INC.)

MAGNOLIA BLOSSOM INC.

GLOBAL ALPHABET, INC. 

SHARKFISH, INC. 

TRAFFIC CAT, INC. 

BIG ISLAND TECHNOLOGY GROUP, INC. 

FASTCUPID, INC. 

MEDLEY.COM INCORPORATED 

PPM TECHNOLOGY GROUP, INC. 

FRIENDFINDER CALIFORNIA INC.

STREAMRAY INC.

CONFIRM ID, INC. 

FRNK TECHNOLOGY GROUP 

TRANSBLOOM, INC. 

STREAMRAY STUDIOS INC.

	 
	 
	 

	 
	 
	 

	 
	By:

	 

	 
	Name:

	Ezra Shashoua

	 
	Title:

	Chief Financial Officer

				
	 
	FORBEARING HOLDERS:

	 
	 
	 

	 
	 
	 

	 
	STATON FAMILY INVESTMENT LTD.

	 
	 
	 

	 
	 
	 

	 
	By:

	 

	 
	Name:

	Daniel C. Staton

	 
	Title:

	Member

				
	 
	FORBEARING HOLDERS:

	 
	 
	 

	 
	 
	 

	 
	MARC H. BELL

	 
	 
	 

	 
	 
	 

	 
	By:

	 

	 
	Name:

	Marc H. BellOESX-2012.12.31-EX10.1

EXHIBIT 10.1
THIRD AMENDMENT TO CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT, dated as of February 5, 2013 (this "Amendment") is by and among JPMORGAN CHASE BANK, N.A., a national banking association (the "Bank"), ORION ENERGY SYSTEMS, INC., a Wisconsin corporation (the "Borrower"), ORION ASSET MANAGEMENT, LLC, a Wisconsin limited liability company ("OAM"), CLEAN ENERGY SOLUTIONS, LLC, a Wisconsin limited liability company ("CES"), and GREAT LAKES ENERGY TECHNOLOGIES, LLC, a Wisconsin limited liability company ("GLET" and together with the Borrower, OAM and CES, each individually, a "Loan Party" and collectively, the "Loan Parties"), and amends and supplements that certain Credit Agreement dated as of June 30, 2010, as amended to date (as so amended, the "Credit Agreement"), by and among the Bank and the Loan Parties.
RECITALS
A.    Events of Default have occurred under (i) section 7.1(c) of the Credit Agreement because the Loan Parties have violated (1) section 6.12 of the Credit Agreement (Funded Debt to EBITDA Ratio) as of September 30, 2012, (2) section 6.13 of the Credit Agreement (Debt Service Coverage Ratio) as of September 30, 2012 and (3) section 5.9(a) of the Credit Agreement; (ii) section 7.1(e) of the Credit Agreement (because of the same violations described in (i) above); and (iii) section 7.1(m) of the Credit Agreement (because of the same violations described in (i) above) (collectively, the "Existing Defaults").
B.    The Loan Parties have requested that the Bank waive the Existing Defaults.
C.    The Bank has agreed to waive the Existing Defaults on the terms and conditions set forth herein.
D.    The parties desire to amend and supplement the Credit Agreement as provided below.
AGREEMENTS
In consideration of the recitals, the promises and agreements set forth in the Credit Agreement, as amended hereby, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:
1.Definitions and References.  Capitalized terms not otherwise defined herein have the meanings assigned in the Credit Agreement.  All references to the Credit Agreement contained in the Collateral Documents and the other Loan Documents shall, upon fulfillment of the conditions specified in section 3 below, mean the Credit Agreement as amended by this Amendment.
2.    Amendments.  
(a)    Section 1.1 of the Credit Agreement is amended by inserting the following defined term to appear in proper alphabetical order therein:

"Unencumbered Liquidity" means, at any determination date, an amount equal to (a) the amount available to be borrowed as Revolving Loans under section 2.1 on such determination date plus (b) the aggregate amount of the Loan Parties' funds on deposit with the Bank on such determination date.
(b)    Section 1.1 of the Credit Agreement is amended by deleting the following defined terms therefrom:
"Funded Debt"    
"Funded Debt to EBITDA Ratio"
(c)    Section 2.12(b) of the Credit Agreement is amended and restated in its entirety to read as follows:
(b)    Applications.  At any time prior to the Revolving Note Maturity Date, the Bank shall, at the request of the Borrower, issue one or more Letters of Credit in Dollars, in a form satisfactory to the Bank, in an aggregate face amount as set forth above, upon the receipt of a letter of credit application duly executed by the Borrower.  The Letters of Credit shall have expiration dates no later than the earlier of (y) 12 months from the date of issuance (or which are cancelable not later than 12 months from the date of issuance and each renewal) or (z) 5 days prior to the Revolving Note Maturity Date; provided that Letters of Credit may provide for an expiration date that is up to one (1) year following the Revolving Note Maturity Date if the Borrower deposits in an account with the Bank, in its name, an amount in cash equal to 105% of the face amount of all such Letters of Credit.  Notwithstanding anything contained in any letter of credit application to the contrary:  (i) the Borrower shall pay fees in connection with each Letter of Credit as set forth in section 2.12(d) hereof and (ii) if the Bank is not timely reimbursed for the amount of any drawing under a Letter of Credit on the date such drawing is paid, the Borrower's obligation to reimburse the Bank for the amount of such drawing shall bear interest (which the Borrower hereby promises to pay) from and after the date such drawing is paid at a rate per annum equal to the sum of the Applicable Margin plus the Daily Borrowing LIBOR Rate from time to time in effect.
(d)    Section 6.7 of the Credit Agreement is amended by inserting the word "and" after subsection (j) thereof, deleting the word "and" after subsection (k) thereof and deleting subsection (l) therefrom in its entirety.
(e)    Section 6.12 of the Credit Agreement is amended and restated in its entirety to read as follows:
6.12    Financial Covenants.
(a)    Unencumbered Liquidity.  Permit, the average daily Unencumbered Liquidity to be less than $20,000,000 during any period of three consecutive Business Days.

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(b)    Minimum EBITDA.  Permit, EBITDA to be less than $1,000,000 as of the last day of any fiscal quarter for the 3-month period ending on such date.
(f)    Section 6.13 of the Credit Agreement is amended and restated in its entirety to read as follows:
6.13    Transactions with Affiliates.  Enter into or be a party to any transaction with any of its Affiliates that is not a Loan Party except as otherwise provided herein (including to consummate a Permitted Financing) or in the ordinary course of business and upon fair and reasonable terms which are no less favorable in any material respect than a comparable arm's length transaction with an entity which is not an Affiliate, except for (a) any employment or severance agreement and any amendment thereto entered into in the ordinary course of business; (b) the payment of reasonable directors' fees and benefits; (c) the provision of officers' and directors' indemnification and insurance in the ordinary course of business; (d) non-interest bearing intercompany loans or other advances in the ordinary course of business and consistent with past practice permitted by section 6.7; (e) the payment of employee salaries, bonuses and employee benefits in the ordinary course of business; and (f) capital contributions made by the Borrower to, and loans constituting Subordinated Debt made by the Borrower to, any of the  Loan Parties as set forth in sections 6.2 and 6.7.
3.    Effectiveness of the Amendment.  This Amendment shall become effective upon execution and delivery hereof by the parties and receipt by the Bank of 
(a)    a certificate of each Loan Party, dated the date hereof and executed by an officer or manager of such Loan Party, which shall certify (i) the resolutions of its Board of Directors, members, managers or other body authorizing the execution, delivery and performance of this Amendment, and the transactions contemplated hereby and thereby, (ii) that the organizational documents of such Loan Party previously delivered to the Bank remain in full force and effect, unamended as of the date hereof, (iii) the name, title and true signatures of the officers, managers or members of such Loan Party, authorized by the resolutions to execute, deliver and perform its obligations under this Amendment, and the transactions contemplated hereby and (iv) a certificate of status for such Loan Party from its jurisdiction of organization; and
(b)    such other amendments, forms, certificates, agreements, documents and instruments as the Bank may reasonably request.
4.    Limited Waiver.  The Bank waives the Existing Defaults.  Other than the waiver of the Existing Defaults, nothing contained herein nor the making of future Loans under the Credit Agreement shall be construed by any Loan Party as a waiver by the Bank of: [a] any of its right and remedies under the Credit Agreement, the Loan Documents, at law or in equity or [b] such Loan Party's continued compliance with each representation, warranty, covenant and provision of the Credit Agreement and the other Loan Documents.  Each Loan Party acknowledges and agrees that other than with respect to the waiver of the Existing Defaults, no waiver of any provision of the Credit Agreement or the other Loan Documents by the Bank has occurred (or will occur by the making of future Loans under the Credit Agreement) and that nothing contained herein shall impair 

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the right of the Bank to require strict performance by each Loan Party of the Credit Agreement and the other Loan Documents.  Further, as provided in section 9.9 of the Credit Agreement, each Loan Party acknowledges and agrees that no delay by the Bank in exercising any right, power or privilege under the Credit Agreement or any other Loan Document shall operate as a waiver thereof, and no single or partial exercise of any right, power or privilege thereunder shall preclude other or further exercise thereof or the exercise of any other right, power or privilege.
5.    Representations and Warranties.  Each of the Loan Parties represents and warrants to the Bank that:
(a)    The execution and delivery of this Amendment and the other agreements, documents and instruments referred to in section 3, is within its power and authority, has been duly authorized by all proper action on the part of such Loan Party, is not in violation of any existing law, rule or regulation of any governmental agency or authority, any order or decision of any court, the organizational documents of such Loan Party or the terms of any agreement, restriction or undertaking to which such Loan Party is a party or by which it is bound, and do not require the approval or consent of the holders of Equity Interests of any of the Loan Parties, any governmental body, agency or authority or any other person or entity other than those consents and approvals in full force and effect.
(b)    This Amendment has been duly executed and delivered by each Loan Party and constitutes a legal, valid and binding obligation of each Loan Party, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.
(c)    After giving effect to the waiver of the Existing Defaults, the representations and warranties contained in the Credit Agreement are correct and complete as of the date of this Amendment (except to the extent such representation or warranty relates to a stated earlier date in which case it shall continue to be true and correct as of such date), and no condition or event exists or act has occurred that, with or without the giving of notice or the passage of time, would constitute a Default or an Event of Default under the Credit Agreement.
6.    Miscellaneous.
(a)    Expenses and Fees. The Loan Parties, jointly and severally, agree to pay on demand all reasonable out-of-pocket costs and expenses paid or incurred by the Bank in connection with the negotiation, preparation, execution and delivery of this Amendment, and all amendments, forms, certificates agreements, documents and instruments related hereto and thereto, including the reasonable fees and expenses of the Bank's outside counsel.
(b)    Amendments and Waivers.  This Amendment may not be changed or amended orally, and no waiver hereunder may be oral, but any change or amendment hereto or any waiver hereunder must be in writing and signed by the party or parties against whom such change, amendment or waiver is sought to be enforced.

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(c)    Headings.  The headings in this Amendment are intended solely for convenience of reference and shall be given no effect in the construction or interpretation of this Amendment.
(d)    Affirmation.  Each party hereto affirms and acknowledges that the Credit Agreement as amended by this Amendment remains in full force and effect in accordance with its terms, as amended hereby.
(e)    Counterparts.  This Amendment may be executed in one or more counterparts, each of which shall constitute an original, but all of which when taken together shall constitute but one and the same instrument.  Delivery of an executed counterpart hereto by facsimile or by electronic transmission of a portable document file (PDF or similar file) shall be as effective as delivery of a manually executed counterpart signature page hereto.
7.    Acknowledgment, Consent and Reaffirmation of Guaranty.  Each of the Loan Guarantors hereby acknowledges that pursuant to the Credit Agreement, it has absolutely and unconditionally guaranteed to the Bank the prompt payment when due, whether at stated maturity, upon acceleration or otherwise, and at all times thereafter, of the Guaranteed Obligations, as affected hereby; acknowledges, consents and agrees to the Bank and the Borrowers entering into this Amendment; and reaffirms that its obligations under the Credit Agreement, as amended hereby, remain in full force and effect.
[remainder of page intentionally left blank; signature page follows]

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IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to Credit Agreement to be duly executed by their respective authorized officers as of the day and year first above written.
	
		
	BANK:

	 
	 

	JPMORGAN CHASE BANK, N.A.

	 
	 

	By:
	/s/ Richard B. Bennett

	 
	Richard B. Bennett, Authorized Signor

	
		
	BORROWER:

	 
	 

	ORION ENERGY SYSTEMS, INC.

	 
	 

	By:
	/s/ Scott R. Jensen

	 
	Scott R. Jensen, Chief Financial Officer

	
		
	LOAN PARTIES:

	 
	 

	ORION ASSET MANAGEMENT, LLC

	 
	 

	By:
	/s/ Scott R. Jensen

	 
	Scott R. Jensen, Manager

	
		
	CLEAN ENERGY SOLUTIONS, LLC

	 
	 

	By:
	/s/ Scott R. Jensen

	 
	Scott R. Jensen, Manager

	
		
	GREAT LAKES ENERGY

	TECHNOLOGIES, LLC

	 
	 

	By:
	/s/ Scott R. Jensen

	 
	Scott R. Jensen, Manager

Signature Page to Third Amendment to Credit Agreement

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