Document:

June 3, 2014

 

	To:	JAKKS Pacific, Inc.
	 	22619 Pacific Coast Highway
	 	Malibu, California  90265
	 	Telephone: (310) 456-7799
	 	Facsimile:  (310) 317-8527
	 	Attention:  Stephen G. Berman
	 	 
	From:	Merrill Lynch International,
	 	Acting through its agent, Merrill Lynch, Pierce, Fenner & Smith Incorporated
	 	BofA Merrill Lynch Financial Centre
	 	2 King Edward Street
	 	London ECIA 1HQ

 

	Re:	Issuer Forward Repurchase Transaction
	 	(BofAML Reference Number:  148354498)

 

Ladies and Gentlemen:

 

The purpose of this
communication (this “Confirmation”) is to set forth the terms and conditions of the Transaction entered
into between Merrill Lynch International (“Dealer”), acting through its agent Merrill Lynch, Pierce,
Fenner & Smith Incorporated (“Agent”), and JAKKS Pacific, Inc. (“Counterparty”)
on the Trade Date specified below (the “Transaction”). This Confirmation constitutes a “Confirmation”
as referred to in the ISDA Master Agreement specified below.

 

1.           This Confirmation
is subject to, and incorporates, the definitions and provisions of the 2006 ISDA Definitions (including the Annex thereto) (the
“2006 Definitions”) and the definitions and provisions of the 2002 ISDA Equity Derivatives Definitions
(the “Equity Definitions”, and together with the 2006 Definitions, the “Definitions”),
in each case as published by the International Swaps and Derivatives Association, Inc. (“ISDA”). In the
event of any inconsistency between the 2006 Definitions and the Equity Definitions, the Equity Definitions will govern. The Transaction
is a Share Forward Transaction.

 

Certain defined terms
used herein have the meanings assigned to them in the Indenture to be dated as of June 9, 2014, between Counterparty and Wells
Fargo Bank, N.A., as trustee (the “Indenture”) relating to the $100,000,000 aggregate principal amount
of 4.875% convertible notes due June 1, 2020 (the “Convertible Notes”). In the event of any inconsistency
between the terms defined in the Indenture and this Confirmation, this Confirmation shall govern. References herein to sections
of the Indenture are based on the draft of the Indenture most recently reviewed by the parties at the time of execution of this
Confirmation. If any relevant sections of the Indenture are changed, added or renumbered between the execution of this Confirmation
and the execution of the Indenture, the parties will amend this Confirmation in good faith to preserve the economic intent of the
parties based on the draft of the Indenture so reviewed. The parties further acknowledge that references to the Indenture herein
are references to the Indenture as in effect on the date of its execution and if the Indenture is amended following its execution,
any such amendment will be disregarded for purposes of this Confirmation unless the parties agree otherwise in writing. The Transaction
is subject to early unwind if the closing of the Convertible Notes is not consummated for any reason, as set forth below in Section
8(b).

 

This Confirmation evidences
a complete and binding agreement between Dealer and Counterparty as to the terms of the Transaction to which this Confirmation
relates. This Confirmation shall be subject to an agreement (the “Agreement”) in the form of the 2002
ISDA Master Agreement as if Dealer and Counterparty had executed an agreement in such form (without any Schedule but with the elections
set forth in this Confirmation). The Transaction shall be the only transaction under the Agreement.

 

    	 

    	 

    

 

All provisions contained
in, or incorporated by reference to, the Agreement will govern this Confirmation except as expressly modified herein. In the event
of any inconsistency between this Confirmation and either the Definitions or the Agreement, this Confirmation shall govern.

 

2.           The terms of the
particular Transaction to which this Confirmation relates are as follows:

 

	General Terms:	 	 
	 	 	 
	Trade Date:	 	June 3, 2014
	 	 	 
	Effective Date:	 	June 9, 2014, subject to cancellation of the Transaction as provided in Section 8(b) “Early Unwind,” below.
	 	 	 
	Seller:	 	Dealer
	 	 	 
	Buyer:	 	Counterparty
	 	 	 
	Shares:	 	The shares of common stock, $.001 par value, of Counterparty (Ticker Symbol: “JAKK”).
	 	 	 
	Number of Shares:	 	Initially 3,112,840, as reduced on each Valuation Date by the Daily Number of Shares for such Valuation Date.
	 	 	 
	Daily Number of Shares:	 	(a) For any Valuation Date occurring prior to the first day of the Final Valuation Period, the number of Shares specified by Dealer in the related Settlement Notice (as defined below under “Valuation Dates”) and (b) for each Valuation Date occurring on or after the Final Valuation Period Start Date, the lesser of (i) the Final Period Daily Number and (ii) the Number of Shares on such Valuation Date; provided that (i) if a Market Disruption Event occurs on any Valuation Date in the Final Valuation Period, the Calculation Agent may determine that such Valuation Date is a Disrupted Day only in part, in which case the Calculation Agent will reduce the Daily Number of Shares for such Valuation Date and shall designate one or more additional Valuation Dates at the end of the Final Valuation Period as the Valuation Date(s) for the remaining Daily Number of Shares, (ii) Dealer may increase the Daily Number of Shares on any Valuation Date during the Final Valuation Period by delivery of a Settlement Notice specifying the additional Daily Number of Shares for such Valuation Date to Counterparty.  For the avoidance of doubt, the aggregate of the Daily Number of Shares for all Valuation Dates shall equal the initial Number of Shares; and provided further that, if the final Settlement Date has not occurred pursuant to the preceding proviso as of the Final Disruption Date, then Dealer shall have the right to elect that the Final Disruption Date shall be considered the final Settlement Date.  “Final Disruption Date” means (x) with respect to any Valuation Date occurring on or after the Final Valuation Period Start Date, the eighth Scheduled Trading Day immediately following the Final Valuation Period Start Date and (y) with respect to any other Valuation Date, the eighth Scheduled Trading Day immediately following such Valuation Date.

 

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	Final Period Daily Number:	 	25,940 Shares
	 	 	 
	Forward Price:	 	$7.71
	 	 	 
	Prepayment:	 	Applicable
	 	 	 
	Prepayment Amount:	 	The Forward Price multiplied by the initial Number of Shares.
	 	 	 
	Prepayment Date:	 	The Effective Date; provided that no cancellation of the Transaction has occurred as provided in Section 8(b) hereof.
	 	 	 
	Variable Obligation:	 	Not Applicable
	 	 	 
	Exchange:	 	NASDAQ GS
	 	 	 
	Related Exchange(s):	 	All Exchanges
	 	 	 
	Calculation Agent:	 	Dealer
	 	 	 
	Settlement Terms:	 	 
	 	 	 
	Physical Settlement:	 	Applicable.  In lieu of Section 9.2(a)(iii) of the Equity Definitions, Dealer will deliver to Counterparty the Daily Number of Shares for each Valuation Date on the related Settlement Date.  Section 9.11 of the Equity Definitions shall be amended by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws arising as a result of the fact that Counterparty is the Issuer of the Shares.
	 	 	 
	Restricted Certificated Shares:	 	Notwithstanding anything to the contrary in the Equity Definitions, Dealer may, in whole or in part, deliver Shares in certificated form (and/or by delivery of a Share transfer form to Counterparty or its transfer agent, as applicable) representing the Number of Shares to be Delivered to Counterparty in lieu of delivery through the Clearance System.
	 	 	 
	Valuation Dates:	 	(a) Any Exchange Business Day following the Effective Date designated by Dealer as a Valuation Date in a written notice (a “Settlement Notice”) to Counterparty, which notice shall specify the Daily Number of Shares for such Valuation Date and (b) each Exchange Business Day in the Final Valuation Period that is not a Disrupted Day in full.
	 	 	 
	Final Valuation Period:	 	The period of consecutive Exchange Business Days equal in number to (i) the Number of Shares as of the Final Valuation Period Start Date divided by (ii) the Final Period Daily Number, beginning with, and including, the Final Valuation Period Start Date (or, if such date is not an Exchange Business Day, the next following Exchange Business Day).
	 	 	 
	Final Valuation Period Start Date:	 	December 1, 2020

 

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	Market Disruption Event:	 	Section 6.3(a) of the Equity Definitions is hereby amended (A) by deleting the words “during the one hour period that ends at the relevant Valuation Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case may be” in clause (ii) thereof, and (B) by replacing the words “or (iii) an Early Closure.” therein with “(iii) an Early Closure, or (iv) a Regulatory Disruption.”
	 	 	 
	 	 	Section 6.3(d) of the Equity Definitions is hereby amended by deleting the remainder of the provision following the term “Scheduled Closing Time” in the fourth line thereof.
	 	 	 
	Regulatory Disruption:	 	Any event that Dealer, in its discretion, determines makes it appropriate with regard to any legal, regulatory or self-regulatory requirements or related policies and procedures for Dealer to refrain from or decrease any market activity in connection with the Transaction. Dealer shall notify Counterparty as soon as reasonably practicable that a Regulatory Disruption has occurred and the Valuation Date(s) affected by it.
	 	 	 
	Dividends:	 	 
	 	 	 
	Dividend Payment:	 	In lieu of Section 9.2(a)(iii) of the Equity Definitions, Dealer will pay to Counterparty the relevant Dividend Amount on each Dividend Payment Date.
	 	 	 
	Dividend Amount:	 	(a) 100% of any cash dividend or distribution per Share declared by Counterparty to holders of record of Shares the ex-dividend date for which occurs during the period from, and including, the Effective Date to, but excluding, the final Valuation Date, multiplied by (b) the Number of Shares on such ex-dividend date (after giving effect to any reduction on such ex-dividend date, if such ex-dividend date is a Valuation Date). 
	 	 	 
	Dividend Payment Date:	 	Each date that is five Exchange Business Days after the date on which the relevant Dividend Amount is paid or distributed by Counterparty to holders of record of Shares.
	 	 	 
	Share Adjustments:	 	 
	 	 	 
	Method of Adjustment:	 	Calculation Agent Adjustment. For the avoidance of doubt, in the event of any dividend or distribution of the type described in Sections 11.2(e)(i) or 11.2(e)(ii)(A) of the Equity Definitions, the Calculation Agent shall make a proportional adjustment to the Number of Shares to reflect such dividend or distribution.
	 	 	 
	Extraordinary Events:	 	 
	 	 	 
	Consequences of Merger Events:	 	In addition to, and without limitation of, Section 12.2 of the Equity Definitions, if, in connection with any Merger Event, (i) the consideration for the Shares includes (or, at the option of a holder of the Shares, may include) shares of an entity or person that is not a corporation or is not organized under the laws of the United States, any State thereof or the District of Columbia or (ii) the counterparty to the Transaction following such Merger Event will not be a corporation or will not be the Issuer of the relevant Shares following such Merger Event (after giving effect to the provisions of this Confirmation in respect thereof, as determined by the Calculation Agent), then Cancellation and Payment may apply at Dealer’s sole election.

 

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	Share-for-Share:	 	Modified Calculation Agent Adjustment
	 	 	 
	Share-for-Other:	 	Modified Calculation Agent Adjustment or Cancellation and Payment (Calculation Agent Determination), as determined by Dealer in its sole discretion
	 	 	 
	Share-for-Combined:	 	Component Adjustment or Cancellation and Payment (Calculation Agent Determination), as determined by Dealer in its sole discretion
	 	 	 
	Notice of Merger Consideration:	 	Upon the occurrence of a Merger Event that causes the Shares to be converted into the right to receive more than a single type of consideration (determined based in part upon any form of stockholder election), Counterparty shall promptly (but in any event prior to the relevant merger date) notify the Calculation Agent of (i) the weighted average of the types and amounts of consideration received by the holders of Shares entitled to receive cash, securities or other property or assets with respect to or in exchange for such Shares in any Merger Event who affirmatively make such an election and (ii) the details of the adjustment made under the Indenture in respect of such Merger Event.
	 	 	 
	Tender Offer:	 	Applicable
	 	 	 
	Share-for-Share:	 	Modified Calculation Agent Adjustment
	 	 	 
	Share-for-Other:	 	Modified Calculation Agent Adjustment
	 	 	 
	Share-for-Combined:	 	Modified Calculation Agent Adjustment
	 	 	 
	Nationalization, Insolvency or Delisting:	 	Cancellation and Payment (Calculation Agent Determination); provided that in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it shall also constitute a Delisting if the Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, the NASDAQ Global Market or the NASDAQ Global Select Market (or their respective successors); if the Shares are immediately re-listed, re-traded or re-quoted on any such exchange or quotation system, such exchange or quotation system shall be deemed to be the Exchange.
	 	 	 
	Insolvency Filing:	 	Applicable
	 	 	 
	Additional Disruption Events:	 	 
	 	 	 
	Change in Law:	 	Applicable; provided that Section 12.9(a)(ii) is hereby amended by (i) adding the words “(including, for the avoidance of doubt and without limitation, any tax law or the adoption or promulgation of new regulations authorized or mandated by existing statute)” after the word “regulation” in the second line thereof, (ii) replacing the phrase “the interpretation” in the third line thereof with the phrase “, or public announcement of, the formal or informal interpretation”, (iii) adding the words “or any Hedge Positions” after the word “Shares” in the clause (X) thereof, (iv) by immediately following the word “Transaction” in clause (X) thereof, adding the phrase “in the manner contemplated by the Hedging Party on the Trade Date” and (v) adding the words “, or holding, acquiring or disposing of Shares or any Hedge Positions relating,” after the word “obligations” in clause (Y) thereof.

 

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	Failure to Deliver:	 	Applicable; provided that Section 12.9(a)(iii) of the Equity Definitions is hereby amended by adding the words “, if such failure is not remedied on or before the 30th (thirtieth) Clearance System Business Day following the Settlement Date” at the end thereof.
	 	 	 
	Hedging Disruption:	 	Not Applicable; provided that the provisions of Section 8(c) hereof relating to a Hedging Disruption shall apply.
	 	 	 
	Increased Cost of Hedging:	 	Applicable
	 	 	 
	Determining Party:	 	For all Additional Disruption Events, Dealer
	 	 	 
	Non-Reliance:	 	Applicable
	 	 	 
	Agreements and Acknowledgments Regarding Hedging Activities:	 	

Applicable
	 	 	 
	Additional Acknowledgments:	 	Applicable

 

3.           Account
Details:

 

		(a)	Account for payments to Counterparty: To be provided by Counterparty.

 

Account for delivery of Shares
to Counterparty: To be provided by Counterparty.

 

		(b)	Account for payments to Dealer:

 

	 	Beneficiary Bank:	Bank of America
	 	ABA:	026-009-593
	 	SWIFT:	BOFAUS3N
	 	Acct #:	65504-60511
	 	Acct Name:	Merrill Lynch International

 

4.           Offices:

 

The Office of Counterparty for the Transaction
is: Inapplicable, Counterparty is not a Multibranch Party.

 

The Office of Dealer for the Transaction
is: London

 

5.            Notices: For purposes of this Confirmation:

 

		(a)	Address for notices or communications to Counterparty:

 

JAKKS Pacific, Inc.

22619 Pacific Coast Highway

Malibu, California 90265

Facsimile: (310) 317-8527

Attention: Stephen G. Berman

 

    	6

    	 

    

 

With a copy to:

Feder Kaszovitz LLP

845 Third Avenue

New York, New York 10022

Facsimile: (212) 888-7776

Attention: Geoffrey A. Bass, Esq.

 

		(b)	Address for notices or communications to Dealer:

 

Merrill Lynch International

Merrill Lynch Financial Centre

2 King Edward Street

London EC1A 1HQ

 

With a copy to its Agent:

			Merrill Lynch, Pierce, Fenner & Smith Incorporated

			One Bryant Park

			New York, NY 10036

Attn: Peter Tucker, Assistant
General Counsel & Vice President

Telephone: 646-855-5821

Facsimile: 646-822-5633

 

6.           Representations,
Warranties and Agreements.

 

(a)           In addition
to the representations and warranties in the Agreement and those contained elsewhere herein, Counterparty represents and warrants
to and for the benefit of, and agrees with, Dealer as follows:

 

(i)           On
the Trade Date (A) none of Counterparty and its officers and directors is aware of any material nonpublic information regarding
Counterparty or the Shares and (B) all reports and other documents filed by Counterparty with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), when considered as
a whole (with the more recent such reports and documents deemed to amend inconsistent statements contained in any earlier such
reports and documents), do not contain any untrue statement of a material fact or any omission of a material fact required to be
stated therein or necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading.

 

(ii)           Without
limiting the generality of Section 13.1 of the Equity Definitions, Counterparty acknowledges that Dealer is not making any representations
or warranties or taking any position or expressing any view with respect to the treatment of the Transaction under any accounting
standards including ASC Topic 260, Earnings Per Share, ASC Topic 815, Derivatives and Hedging, or ASC Topic 480,
Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity
(or any successor issue statements) or under FASB’s Liabilities & Equity Project.

 

(iii)           Prior
to the Trade Date, Counterparty shall deliver to Dealer a resolution of Counterparty’s board of directors authorizing the
Transaction and such other certificate or certificates as Dealer shall reasonably request.

 

(iv)           Counterparty
is not entering into this Confirmation to create actual or apparent trading activity in the Shares (or any security convertible
into or exchangeable for Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible
into or exchangeable for Shares) or otherwise in violation of the Exchange Act.

 

(v)           Counterparty
is not, and after giving effect to the transactions contemplated hereby will not be, required to register as an “investment
company” as such term is defined in the Investment Company Act of 1940, as amended.

 

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(vi)           On
the Trade Date, (A) the assets of Counterparty at their fair valuation exceed the liabilities of Counterparty, including contingent
liabilities, (B) the capital of Counterparty is adequate to conduct the business of Counterparty and (C) Counterparty has the ability
to pay its debts and obligations as such debts mature and does not intend to, or does not believe that it will, incur debt beyond
its ability to pay as such debts mature, (D) Counterparty is not “insolvent” (as such term is defined under Section
101(32) of the Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”) and (E) Counterparty
would be able to purchase the initial Number of Shares for the Prepayment Amount in compliance with the laws of Counterparty’s
jurisdiction of incorporation.

 

(vii)           Counterparty
understands no obligations of Dealer to it hereunder will be entitled to the benefit of deposit insurance and that such obligations
will not be guaranteed by any Affiliate of Dealer or any governmental agency.

 

(viii)           (A)
On the Trade Date, (B) on each Valuation Date and (C) in the event an Early Termination Date is designated with respect to the
Transaction or a portion thereof or the Transaction or a portion thereof is cancelled pursuant to Article 12 of the Equity Definitions,
in either case, on each day during a period starting on or about such Early Termination Date as reasonably determined by Dealer
and notified to Counterparty (an “Early Termination Period”) (each such date, a “Restricted
Date”), (I) the Shares or securities that are convertible into, or exchangeable or exercisable for, Shares are not
and will not be subject to a “restricted period,” as such term is defined in Regulation M under the Exchange Act (“Regulation
M”) and (II) Counterparty shall not engage in any “distribution,” as such term is defined in Regulation
M, other than a distribution meeting the requirements of the exceptions set forth in sections 101(b)(10) and 102(b)(7) of Regulation
M, on any Restricted Date or either of the two Exchange Business Days immediately following any Restricted Date.

 

(ix)           On
each Restricted Date, neither Counterparty nor any “affiliate” or “affiliated purchaser” (each as defined
in Rule 10b-18 under the Exchange Act (“Rule 10b-18”)) shall directly or indirectly (including, without
limitation, by means of any cash-settled or other derivative instrument) purchase, offer to purchase, place any bid or limit order
that would effect a purchase of, or commence any tender offer relating to, any Shares (or an equivalent interest, including a unit
of beneficial interest in a trust or limited partnership or a depository share) or any security convertible into or exchangeable
or exercisable for Shares, except through Dealer.

 

(x)           No
state or local (including non-U.S. jurisdictions) law, rule, regulation or regulatory order applicable to the Shares would give
rise to any reporting, consent, registration or other requirement (including without limitation a requirement to obtain prior approval
from any person or entity) as a result of Dealer or its affiliates owning or holding (however defined) Shares.

 

(xii)           Counterparty
(A) is capable of evaluating investment risks independently, both in general and with regard to all transactions and investment
strategies involving a security or securities; (B) will exercise independent judgment in evaluating the recommendations of any
broker-dealer or its associated persons, unless it has otherwise notified the broker-dealer in writing; and (C) has total assets
of at least $50 million.

 

(xiii)           Without
limiting the generality of Section 3(a) of the Agreement, neither the execution and delivery of this Confirmation nor the incurrence
or performance of obligations of Counterparty hereunder will conflict with or result in a breach of the certificate of incorporation
or by-laws (or any equivalent documents) of Counterparty, or any applicable law or regulation, or any order, writ, injunction or
decree of any court or governmental authority or agency, or any agreement or instrument filed as an exhibit to Counterparty’s
Annual Report on Form 10-K for the year ended December 31, 2013, as updated by any subsequent filings, to which Counterparty or
any of its subsidiaries is a party or by which Counterparty or any of its subsidiaries is bound or to which Counterparty or any
of its subsidiaries is subject, or constitute a default under, or result in the creation of any lien under, any such agreement
or instrument.

 

(b)           Each of Dealer
and Counterparty agrees and represents that it is an “eligible contract participant” as defined in Section 1a (18)
of the U.S. Commodity Exchange Act, as amended.

 

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(c)           Counterparty
acknowledges that the offer and sale of the Transaction to it is intended to be exempt from registration under the Securities Act
of 1933, as amended (the “Securities Act”), by virtue of Section 4(2) thereof. Accordingly, Counterparty
represents and warrants to Dealer that (i) it has the financial ability to bear the economic risk of its investment in the Transaction
and is able to bear a total loss of its investment, (ii) it is an “accredited investor” as that term is defined in
Regulation D as promulgated under the Securities Act, (iii) it is entering into the Transaction for its own account without a view
to the distribution or resale thereof and (iv) the assignment, transfer or other disposition of the Transaction has not been and
will not be registered under the Securities Act and is restricted under this Confirmation, the Securities Act and state securities
laws.

 

(d)           Counterparty
agrees and acknowledges that Dealer is a “financial institution” and a “financial participant” within the
meaning of Sections 101(22), 101(53C) and 101(22A) of Title 11 of the United States Code (the “Bankruptcy Code”).
The parties hereto further agree and acknowledge that it is the intent of the parties that (A) this Confirmation is a “securities
contract,” as such term is defined in Section 741(7) of the Bankruptcy Code, with respect to which each payment and delivery
hereunder or in connection herewith is a “termination value,” “payment amount” or “other transfer
obligation” within the meaning of Section 362 of the Bankruptcy Code and a “settlement payment,” within the meaning
of Section 546 of the Bankruptcy Code, and (B) Dealer is entitled to the protections afforded by, among other sections, Sections
362(b)(6), 362(o), 546(e), 548(d)(2), 555 and 561 of the Bankruptcy Code.

 

(e)           Counterparty
shall deliver to Dealer an opinion of counsel, dated as of the Effective Date and reasonably acceptable to Dealer in form and substance,
with respect to the matters set forth in Section 3(a) of the Agreement and Sections 6(a)(v) and 6(a)(xiii) of this Confirmation
(replacing, solely for these purposes and solely with respect to Section 6(a)(xiii), the words “On the Trade Date and at
all times until termination or earlier expiration of the Transaction” with the words “On the Trade Date”).

 

7.           Matters Relating to Agent.

 

In connection with
the Transaction confirmed hereby, the Agent, a broker-dealer registered under the Exchange Act, will be responsible for: (a) effecting
the Transaction (though the Agent shall not be responsible for negotiating the terms of the Transaction), (b) issuing all required
confirmations and statements to Counterparty relating to the Transaction, (c) as between Dealer and the Agent, extending or arranging
for the extension of any credit to Counterparty in connection with the Transaction, (d) maintaining required books and records
relating to the Transaction, (e) complying, to the extent applicable, with Rule 15c3-1 under the Exchange Act and (f) unless otherwise
permitted under applicable law or applicable interpretations thereof, receiving, delivering and safeguarding funds and securities
in compliance with Rule 15c3-3 under the Exchange Act.

 

The Agent is acting
hereunder solely in its capacity as agent (and not as principal or guarantor) in connection with the Transaction entered into between
Counterparty and Dealer, pursuant to instructions received from Counterparty and Dealer, and shall have no responsibility or liability
to Counterparty or Dealer arising from any failure by either of them to pay or perform any obligation hereunder. Each of Counterparty
and Dealer acknowledges the foregoing and agrees that it will proceed solely against the other to collect or recover any funds
or securities owing to it in connection with or arising from the Transaction. The Agent shall not be deemed to have endorsed or
guaranteed the Transaction confirmed hereby and shall have no responsibility or liability to either Counterparty or Dealer except
for gross negligence or willful misconduct in the performance of its duties as agent.

 

Dealer is authorized
by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority
and is a member of the London Stock Exchange. Dealer has entered into the Transaction as principal. The time of the Transaction
shall be notified to Counterparty upon request.

 

    	9

    	 

    

 

8.           Other Provisions.

 

(a)     Repurchase
Notices. Counterparty shall, at least 10 Scheduled Trading Days prior to effecting any repurchase of Shares or consummating
or otherwise executing or engaging in any transaction or event, other than a stock split or stock dividend, that would lead to
an increase in the Number of Shares, give Dealer a written notice of such repurchase or such transaction or event, as the case
may be (a “Repurchase Notice”), if, following such repurchase or such transaction or event, as the case
may be, the Notice Percentage as determined on the date of such Repurchase Notice is (i) greater than 4.5% and (ii) in the case
of any Repurchase Notice other than the first Repurchase Notice, greater by 0.5% or more than the Notice Percentage included in
the immediately preceding Repurchase Notice. The “Notice Percentage” as of any day is the fraction, expressed
as a percentage, the numerator of which is the Number of Shares for the Transaction and the denominator of which is the number
of Shares outstanding on such day. In the event that Counterparty fails to provide Dealer with a Repurchase Notice on the day and
in the manner specified in this Section 8(a) then Counterparty agrees to indemnify and hold harmless Dealer, its affiliates and
their respective directors, officers, employees, agents and controlling persons (Dealer and each such person being an “Indemnified
Party”) from and against any and all losses, claims, damages and liabilities (or actions in respect thereof), joint
or several, to which such Indemnified Party may become subject under applicable securities laws, including without limitation,
Section 16 of the Exchange Act, relating to or arising out of such failure. If for any reason the foregoing indemnification is
unavailable to any Indemnified Party or insufficient to hold harmless any Indemnified Party, then Counterparty shall contribute,
to the maximum extent permitted by law, to the amount paid or payable by the Indemnified Party as a result of such loss, claim,
damage or liability. In addition, Counterparty will reimburse any Indemnified Party for all expenses (including reasonable counsel
fees and expenses) as they are incurred (after notice to Counterparty) in connection with the investigation of, preparation for
or defense or settlement of any pending or threatened claim or any action, suit or proceeding arising therefrom, whether or not
such Indemnified Party is a party thereto and whether or not such claim, action, suit or proceeding is initiated or brought by
or on behalf of Counterparty. This indemnity shall survive the completion of the Transaction contemplated by this Confirmation
and any assignment and delegation of the Transaction made pursuant to this Confirmation or the Agreement shall inure to the benefit
of any permitted assignee of Dealer.

 

(b)     Early
Unwind. If the offering and sale by Counterparty of the Convertible Notes is not consummated on or prior to the scheduled
Effective Date (or such later date as Counterparty and Dealer shall have agreed, which in no event shall be later than June 23,
2014, in which case the Effective Date will be such later closing date for such offering) (such date being the “Early
Unwind Date”), then the Transaction shall automatically terminate (the “Early Unwind”)
on the Early Unwind Date and (i) the Transaction and all of the respective rights and obligations of Dealer and Counterparty thereunder
shall be cancelled and terminated and (ii) following the payment or delivery, as applicable, referred to below, each party shall
be released and discharged by the other party from and agrees not to make any claim against the other party with respect to any
obligations or liabilities of the other party arising out of, and to be performed in connection, with the Transaction either prior
to or after the Early Unwind Date (other than under the indemnity under Section 8(a) above); provided that, notwithstanding
the foregoing, Counterparty shall pay to Dealer an amount in cash equal to the aggregate amount of costs and expenses relating
to the unwinding of Dealer’s hedging activities in respect of the Transaction (including market losses incurred in reselling
any Shares purchased by Dealer or its affiliates in connection with such hedging activities).

 

(c)     Transfer
or Assignment. Dealer may transfer any of its rights or obligations under the Transaction with the prior written consent
of Counterparty, such consent not to be unreasonably withheld or delayed. Notwithstanding the foregoing, Dealer may transfer or
assign without any consent of the Counterparty its rights and obligations hereunder and under the Agreement, in whole or in part,
to any of its affiliates. Any such transfer or assignment shall be fully effective upon notice to Counterparty of such assignment,
together with notice of such affiliate’s agreement to perform the Transaction and be bound by its terms in every way as if
such affiliate had been an original party to the Transaction in place of Dealer, and upon such transfer or assignment Dealer shall
be released from its obligations hereunder. At any time at which any Excess Ownership Position or a Hedging Disruption exists,
if Dealer, in its discretion, is unable to effect a transfer or assignment to an affiliate in accordance with the requirements
set forth above after using its commercially reasonable efforts on pricing terms and within a time period reasonably acceptable
to Dealer such that an Excess Ownership Position or a Hedging Disruption, as the case may be, no longer exists, Dealer may designate
any Scheduled Trading Day as an Early Termination Date with respect to a portion (the “Terminated Portion”)
of the Transaction, such that such Excess Ownership Position or Hedging Disruption, as the case may be, no longer exists. In the
event that Dealer so designates an Early Termination Date with respect to a portion of the Transaction, a payment or delivery shall
be made pursuant to Section 6 of the Agreement and Section 8(b) of this Confirmation as if (i) an Early Termination Date had been
designated in respect of an Additional Termination Event under a Transaction having terms identical to the Terminated Portion of
the Transaction, (ii) Counterparty shall be the sole Affected Party with respect to such Additional Termination Event and (iii)
the Terminated Portion of the Transaction shall be the only Terminated Transaction. “Excess Ownership Position”
means any of the following: (i) the Equity Percentage exceeds 8.0%, (ii) Dealer or any “affiliate” or “associate”
of Dealer would own in excess of 13% of the outstanding Shares for purposes of Section 203 of the Delaware General Corporation
Law or (iii) Dealer, Dealer Group (as defined below) or any person whose ownership position would be aggregated with that of Dealer
or Dealer Group (Dealer, Dealer Group or any such person, a “Dealer Person”) under any federal, state
or local laws, regulations, regulatory orders or organizational documents or contracts of Counterparty that are, in each case,
applicable to ownership of Shares (“Applicable Restrictions”), owns, beneficially owns, constructively
owns, controls, holds the power to vote or otherwise meets a relevant definition of ownership in excess of a number of Shares equal
to (x) the number of Shares that would give rise to reporting or registration obligations or other requirements (including obtaining
prior approval by a state or federal regulator) of a Dealer Person, or could result in an adverse effect on a Dealer Person, under
Applicable Restrictions, as determined by Dealer in its reasonable discretion, and with respect to which such requirements have
not been met or the relevant approval has not been received or that would give rise to any consequences under the constitutive
documents of Counterparty or any contract or agreement to which Counterparty is a party, in each case minus (y) 1% of the
number of Shares outstanding on the date of determination. The “Equity Percentage” as of any day is the
fraction, expressed as a percentage, (A) the numerator of which is the number of Shares that Dealer and any of its affiliates or
any other person subject to aggregation with Dealer, for purposes of the “beneficial ownership” test under Section
13 of the Exchange Act, or any “group” (within the meaning of Section 13) of which Dealer is or may be deemed to be
a part (Dealer and any such affiliates, persons and groups, collectively, “Dealer Group”) beneficially
owns (within the meaning of Section 13 of the Exchange Act), without duplication, on such day (or, to the extent that, as a result
of a change in law, regulation or interpretation after the date hereof, the equivalent calculation under Section 16 of the Exchange
Act and the rules and regulations thereunder results in a higher number, such number) and (B) the denominator of which is the number
of Shares outstanding on such day.

 

    	10

    	 

    

 

(d)     Right
to Extend. Dealer may postpone or add, in whole or in part, any Valuation Date or Settlement Date or any other date of
valuation or delivery by Dealer, in which event the Calculation Agent shall make appropriate adjustments to the Number of Shares
and the Daily Number of Shares with respect to any affected Valuation Date, if Dealer determines, in its reasonable discretion,
that such postponement or addition is reasonably necessary or appropriate to preserve Dealer’s hedging or hedge unwind activity
hereunder in light of existing liquidity conditions or to enable Dealer to effect purchases of Shares in connection with its hedging,
hedge unwind or settlement activity hereunder, in each case in a manner that would, if Dealer were Counterparty or an affiliated
purchaser of Counterparty (as defined in Rule 10b-18 under the Exchange Act), be in compliance with applicable legal, regulatory
or self-regulatory requirements, or with related policies and procedures applicable to Dealer.

 

(e)    Alternative
Calculations and Payment on Early Termination and on Certain Extraordinary Events. If Dealer shall owe Counterparty
any amount pursuant to Article 12 of the Equity Definitions or pursuant to Section 6 of the Agreement (a “Payment Obligation”),
Counterparty shall have the right, in its sole discretion, to require Dealer to satisfy any such Payment Obligation by the Share
Termination Alternative (as defined below) by giving irrevocable telephonic notice to Dealer, confirmed in writing within one Scheduled
Trading Day, no later than 9:30 A.M. New York City time on the relevant Early Termination Date or date of cancellation or termination
in respect of an Extraordinary Event, as applicable (“Notice of Share Termination”); provided
that if Counterparty does not elect to require Dealer to satisfy its Payment Obligation by the Share Termination Alternative, Dealer
shall have the right, in its sole discretion, to elect to satisfy its Payment Obligation by the Share Termination Alternative,
notwithstanding Counterparty’s failure to elect or election to the contrary; and provided further that Counterparty
shall not have the right to so elect (but, for the avoidance of doubt, Dealer shall have the right to so elect) in the event of
(i) an Insolvency or a Nationalization, in each case, in which the consideration or proceeds to be paid to holders of Shares consists
solely of cash or (ii) an Event of Default in which Counterparty is the Defaulting Party or a Termination Event in which Counterparty
is the Affected Party, which Event of Default or Termination Event resulted from an event or events within Counterparty’s
control. Upon such Notice of Share Termination, the following provisions shall apply on the Scheduled Trading Day immediately following
the relevant merger date, Announcement Date, Early Termination Date or date of cancellation or termination in respect of an Extraordinary
Event, as applicable:

 

	Share Termination Alternative:	Applicable and means that Dealer shall deliver to Counterparty the Share Termination Delivery Property on the date on which the Payment Obligation would otherwise be due pursuant Article 12 of the Equity Definitions or Section 6 of the Agreement, as applicable, or such later date as the Calculation Agent may reasonably determine (the “Share Termination Payment Date”), in satisfaction of the Payment Obligation.

 

    	11

    	 

    

 

	
        Share Termination Delivery

        Property:
	A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the Payment Obligation divided by the Share Termination Unit Price.  The Calculation Agent shall adjust the Share Termination Delivery Property by replacing any fractional portion of the aggregate amount of a security therein with an amount of cash equal to the value of such fractional security based on the values used to calculate the Share Termination Unit Price.
	 	 
	Share Termination Unit Price:	The value of property contained in one Share Termination Delivery Unit on the date such Share Termination Delivery Units are to be delivered as Share Termination Delivery Property, as determined by the Calculation Agent in its discretion by commercially reasonable means and notified by the Calculation Agent to Dealer at the time of notification of the Payment Obligation.
	 	 
	Share Termination Delivery Unit:	In the case of a Termination Event, Event of Default, Delisting or Additional Disruption Event, one Share or, in the case of an Insolvency or Nationalization, one Share or a unit consisting of the number or amount of each type of property received by a holder of one Share (without consideration of any requirement to pay cash or other consideration in lieu of fractional amounts of any securities) in such Insolvency or Nationalization, as applicable.  If such Insolvency or Nationalization involves a choice of consideration to be received by holders, such holder shall be deemed to have elected to receive the maximum possible amount of cash.
	 	 
	Other applicable provisions:	If Share Termination Alternative is applicable, the provisions of Sections 9.8, 9.9, 9.10 and 9.11 (except that the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws arising as a result of the fact that Counterparty is the issuer of the Shares or any portion of the Share Termination Delivery Units) of the Equity Definitions will be applicable as if “Physical Settlement” applied to the Transaction, except that all references to “Shares” shall be read as references to “Share Termination Delivery Units.”

 

(f)     No Netting
and Set-off. Each party waives any and all rights it may have to set off obligations arising under the Agreement and the
Transaction against other obligations between the parties, whether arising under any other agreement, applicable law or otherwise.

 

(g)     Equity
Rights. Dealer acknowledges and agrees that this Confirmation is not intended to convey to it rights with respect to the
Transaction that are senior to the claims of common stockholders in the event of Counterparty’s bankruptcy.  For
the avoidance of doubt, the parties agree that the preceding sentence shall not apply at any time other than during Counterparty’s
bankruptcy to any claim arising as a result of a breach by Counterparty of any of its obligations under this Confirmation or the
Agreement.  For the avoidance of doubt, the parties acknowledge that this Confirmation is not secured by any collateral
that would otherwise secure the obligations of Counterparty herein under or pursuant to any other agreement.

 

    	12

    	 

    

 

(h)     Payment
by Counterparty. In the event that an Early Termination Date occurs or is designated with respect to the Transaction as
a result of a Termination Event or an Event of Default (other than an Event of Default arising under Section 5(a)(ii) or 5(a)(iv)
of the Agreement) and, as a result, Counterparty owes to Dealer an amount calculated under Section 6(e) of the Agreement, such
amount shall be deemed to be zero.

 

(i)     Amendment
to Equity Definitions. The following amendment shall be made to the Equity Definitions:

 

Section 12.6(a)(ii)
of the Equity Definitions is hereby amended by (1) deleting from the fourth line thereof the word “or” after the word
“official” and inserting a comma therefor, and (2) deleting the semi-colon at the end of subsection (B) thereof and
inserting the following words therefor “or (C) at Dealer’s option, the occurrence of any of the events specified in
Section 5(a)(vii) (1) through (9) of the ISDA Master Agreement with respect to that Issuer.”

 

(j)     Staggered
Settlement. Dealer may, by notice to Counterparty on or prior to any Settlement Date (a “Nominal Settlement
Date”), elect to deliver the Shares on two or more dates (each, a “Staggered Settlement Date”)
or at two or more times on the Nominal Settlement Date as follows:

 

(i)          in such notice, Dealer
will specify to Counterparty the related Staggered Settlement Dates (each of which will be on or prior to such Nominal Settlement
Date) or delivery times and how it will allocate the Shares it is required to deliver among the Staggered Settlement Dates or delivery
times; and

 

(ii)          the aggregate number
of Shares that Dealer will deliver to Counterparty hereunder on all such Staggered Settlement Dates and delivery times will equal
the number of Shares that Dealer would otherwise be required to deliver on such Nominal Settlement Date.

 

(k)   Disclosure.
Effective from the date of commencement of discussions concerning the Transaction, Counterparty and each of its employees, representatives,
or other agents may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the
Transaction and all materials of any kind (including opinions or other tax analyses) that are provided to Counterparty relating
to such tax treatment and tax structure.

 

(l)   Additional
Termination Events. The occurrence of (x) an event of default with respect to Counterparty under the terms of the Convertible
Notes as set forth in Section 7.01 of the Indenture that results in the Convertible Notes becoming or being declared immediately
due and payable under the terms of Section 7.02 of the Indenture, or (y) an Amendment Event shall be an Additional Termination
Event with respect to which the Transaction is the sole Affected Transaction and Counterparty is the sole Affected Party, and Dealer
shall be the party entitled to designate an Early Termination Date pursuant to Section 5(b) of the Agreement.

 

(m)  “Amendment
Event” means that Counterparty amends, modifies, supplements or obtains a waiver in respect of any term of the Indenture
or the Convertible Notes governing the principal amount, coupon, maturity, repurchase obligation of Counterparty, redemption right
of Counterparty, any term relating to conversion of the Convertible Notes (including changes to the conversion price, conversion
settlement dates or conversion conditions), or any term that would require consent of the holders of not less than 100% of the
principal amount of the Convertible Notes to amend, in each case without the prior consent of Dealer.

 

(n)   Governing
Law; Jurisdiction. THIS CONFIRMATION SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. THE PARTIES HERETO IRREVOCABLY
SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK IN CONNECTION WITH ALL MATTERS RELATING HERETO AND WAIVE ANY OBJECTION TO THE LAYING OF VENUE IN, AND ANY
CLAIM OF INCONVENIENT FORUM WITH RESPECT TO, THESE COURTS.

 

(o)   Waiver
of Jury Trial. Each party waives, to the fullest extent permitted by applicable
law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to this Transaction. Each party
(i) certifies that no representative, agent or attorney of either party has represented, expressly or otherwise, that such other
party would not, in the event of such a suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges
that it and the other party have been induced to enter into THE Transaction, as applicable, by, among other things, the mutual
waivers and certifications provided herein.

 

    	13

    	 

    

 

(p)  Wall
Street Transparency and Accountability Act of 2010.  The parties hereby agree that none of (v) Section 739 of the
Wall Street Transparency and Accountability Act of 2010 (“WSTAA”), (w) any similar legal certainty provision
in any legislation enacted, or rule or regulation promulgated, on or after the Trade Date, (x) the enactment of WSTAA or any regulation
under the WSTAA, (y) any requirement under WSTAA nor (z) an amendment made by WSTAA, shall limit or otherwise impair either party’s
rights to terminate, renegotiate, modify, amend or supplement this Confirmation or the Agreement, as applicable, arising from a
termination event, force majeure, illegality, increased costs, regulatory change or similar event under this Confirmation, the
Equity Definitions incorporated herein, or the Agreement (including, but not limited to, rights arising from Change in Law, Hedging
Disruption, Increased Cost of Hedging, Loss of Stock Borrow, Increased Cost of Stock Borrow, an Excess Ownership Position or Illegality
(as defined in the Agreement)).

 

(q)  Tax Matters

 

		(i)	Tax Representations of Counterparty. Counterparty is a corporation for U.S. federal income
tax purposes and is organized under the laws of the State of Delaware. Counterparty is a “U.S. person” (as that term
is used in section 1.1441-4(a)(3)(ii) of United States Treasury Regulations) for U.S. federal income tax purposes [and an exempt
recipient under Treasury Regulation Section 1.6049-4(c)(1)(ii)].

 

		(ii)	Tax Representations of Dealer. Dealer is a company organized under the laws of England and
Wales. Dealer is a hybrid entity that is treated as a pass-thru entity for U.S. federal income tax purposes and each partner or
owner of Dealer is a “non-U.S. branch of a foreign person” for purposes of section 1.1441-4(a)(3)(ii) of the United
States Treasury Regulations and a “foreign person” for purposes of section 1.6041-4(a)(4) of the United States Treasury
Regulations.

 

		(iii)	Withholding Tax imposed on payments to non-US counterparties under the United States Foreign
Account Tax Compliance Act. “Tax” and “Indemnifiable Tax”, each as defined in Section 14 of the Agreement,
shall not include any U.S. federal withholding tax imposed or collected pursuant to Sections 1471 through 1474 of the U.S. Internal
Revenue Code of 1986, as amended (the “Code”), any current or future regulations or official interpretations
thereof, any agreement entered into pursuant to Section 1471(b) of the Code, or any fiscal or regulatory legislation, rules or
practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such Sections
of the Code (a “FATCA Withholding Tax”). For the avoidance of doubt, a FATCA Withholding Tax is a Tax
the deduction or withholding of which is required by applicable law for the purposes of Section 2(d) of the Agreement. 

 

		(iv)	HIRE Act.  “Tax” and “Indemnifiable Tax”, each as defined in
Section 14 of the Agreement, shall not include any tax imposed on payments treated as dividends from sources within the United
States under Section 871(m) of the Code or any regulations issued thereunder.

 

		(v)	Tax documentation.

 

		(a)	Counterparty shall provide to Dealer a valid U.S. Internal Revenue Service Form W-9, or any successor
thereto, (i) upon execution and delivery of this Confirmation, (ii) promptly upon reasonable demand by Dealer, and (iii) promptly
upon learning that any such tax Form previously provided by Counterparty has become obsolete or incorrect.

 

		(b)	Dealer shall provide to Counterparty a correct and complete U.S. Internal Revenue Service Form
W-8BEN, or any successor thereto, claiming the benefit of the U.S.-U.K. income tax treaty, (i) upon execution and delivery of this
Confirmation, (ii) promptly upon reasonable demand by Dealer, and (iii) promptly upon learning that any such tax Form previously
provided by Counterparty has become obsolete or incorrect.

 

[Signatures to follow on separate page]

 

    	14

    	 

    

 

Please confirm that the foregoing correctly
sets forth the terms of our agreement by executing the copy of this Confirmation enclosed for that purpose and returning it to
us.

 

	 	Yours sincerely,
	 	 
	 	MERRILL LYNCH INTERNATIONAL
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:
	 	 
	 	MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, solely in its capacity as Agent hereunder
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

Confirmed as of the date first above written:

 

	JAKKS PACIFIC, INC.	 
	 	 
	By:	 	 
	 	Name:	 
	 	Title:	 

 

[SIGNATURE PAGE]

 

Issuer Prepaid Forward Confirmation

 

    	15exh_1035d.htm

Exhibit 10.35(d)

FOURTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

THIS FOURTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT dated as of June 3, 2014 (this “Amendment”) is by and among STEINER U.S. HOLDINGS, INC., a Florida corporation (the “Borrower”), the several banks and other financial institutions and lenders signatory hereto (each a “Lender” and collectively, the “Lenders”) and SUNTRUST BANK, as administrative agent for the Lenders (in such capacity, together with its successors in such capacity, the “Administrative Agent”).

 

W I T N E S S E T H:

 

WHEREAS, the Borrower, the Lenders and the Administrative Agent, are parties to that certain Amended and Restated Credit Agreement dated as of November 1, 2011 (as amended prior to the date hereof and as the same may be further amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”);

 

WHEREAS, the Borrower has requested that the Lenders and the Administrative Agent amend Section 7.5 of the Credit Agreement on the terms and conditions set forth herein; and

 

WHEREAS, the Lenders and the Administrative Agent are willing to amend the Credit Agreement on the terms and conditions set forth herein.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties, the parties hereto agree as follows:

 

Section 1.  Definitions.  Except as otherwise defined herein, capitalized terms used herein shall have the meanings ascribed thereto in the Credit Agreement.

 

Section 2.  Specific Amendment to Credit Agreement.

 

(a) The reference to “the Third Amendment Effective Date” in Section 7.5 of the Credit Agreement, Restricted Payments,  is hereby amended to read “the date of effectiveness of that certain Fourth Amendment to Amended and Restated Credit Agreement dated as of June 3, 2014, among the Borrower, the Administrative Agent and the Lenders party thereto” and clause (c) thereof is hereby amended and restated in its entirety to read as follows:

 

“(c) after January 1, 2013, repurchases and redemptions of the Parent’s and its Subsidiaries’ Capital Stock and cash dividends payable by the Parent on its Capital Stock; provided, that (x) the aggregate amount of such Restricted Payments in the form of Capital Stock repurchases made by the Parent and/or its Subsidiaries and cash dividends payable by the Parent on its Capital Stock does not exceed (i) $35,000,000 for any Fiscal Year other than Fiscal Year 2014 and (ii) $75,000,000 for Fiscal Year 2014, and (y) the Parent and its Subsidiaries are in pro forma compliance (after giving effect to such Restricted Payments) with the financial covenants set forth in ARTICLE VI;”

 

  

  

  

Section 3.  Representations and Warranties.  The Borrower hereby represents and warrants as follows:

 

(a)           at the time of and immediately after giving effect to this Amendment, (i) all representations and warranties of each Loan Party set forth in the Loan Documents are true and correct in all material respects on and as of the date of this Amendment, in each case before and after giving effect thereto, except to the extent made as of a specific date (in which case such representations and warranties shall be true and correct in all material respects as of such date); provided that, to the extent that any of the representations and warranties of a Loan Party set forth in the Loan Documents is already qualified by materiality or “Material Adverse Effect”, then the qualifier “in all material respects” in this clause (a) shall not apply and (ii) no Default or Event of Default exists or will exist;

 

(b)           the execution, delivery and performance by each Loan Party of this Amendment, and the performance by the Borrower of the Credit Agreement, as amended by this Amendment, are within the Borrower’s and such Loan Party’s organizational powers and have been duly authorized by all necessary organizational, and if required, shareholder, partner or member, action and (i) do not require any consent or approval of, registration or filing with, or any action by, any Governmental Authority or any other Person, except those as have been obtained or made and are in full force and effect; (ii) will not violate any Requirements of Law applicable to the Parent or any of its Subsidiaries or any judgment, order or ruling of any Governmental Authority; (iii) will not violate or result in a default under any indenture, Material Contract or other material instrument binding on the Parent or any of its Subsidiaries or any of its assets or give rise to a right thereunder to require any payment to be made by the Parent or any of its Subsidiaries; and (iv) will not result in the creation or imposition of any Lien on any asset of the Parent or any of its Subsidiaries, except Liens (if any) created under the Loan Documents;

 

(c)           this Amendment has been duly executed and delivered by each of the Loan Parties, and constitutes the valid and binding obligations of such Loan Party, enforceable against it in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity;

 

(d)           the execution, delivery, performance and effectiveness of this Amendment will not: (i) impair the validity, effectiveness or priority of the Liens granted pursuant to any Loan Document, and such Liens continue unimpaired with the same priority to secure repayment of all of the applicable Obligations, whether heretofore or hereafter incurred, and (ii) require that any new filings be made or other action taken to perfect or to maintain the perfection of such Liens; and

 

(e)           each Subsidiary that is required to be a Subsidiary Loan Party pursuant to the terms of the Credit Agreement is listed on the signature pages hereto.

 

Section 4.  Conditions Precedent.  This Amendment shall be effective upon the satisfaction of each the following conditions precedent in a manner acceptable to the Administrative Agent:

 

  

-2-

  

(a)           the Administrative Agent shall have received this Amendment, duly executed and delivered by the Parent, the Borrower, the Subsidiary Loan Parties, the Required Lenders and the Administrative Agent; and

 

(b)           the Administrative Agent shall have received such other information, documents, instruments or approvals as the Administrative Agent or its counsel may reasonably request.

 

Section 5.  Reference to and Effect on the Loan Documents.

 

(a)  Upon the effectiveness of this Amendment, on and after the date hereof, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to “the Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement, shall in each case mean and be a reference to the Credit Agreement as amended hereby.

 

(b)  Except as specifically amended above, the Credit Agreement and all other Loan Documents are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed.  No Loan Party has any knowledge of any challenge to the Administrative Agent’s or any Lender’s claims arising under the Loan Documents or the effectiveness of the Loan Documents.

 

(c)  The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of the Administrative Agent or any Lender under the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents.

 

(d)  Nothing contained herein shall be deemed to constitute a waiver of compliance with any term or condition contained in the Credit Agreement or any of the other Loan Documents, or constitute a course of conduct or dealing among the parties.  The Administrative Agent and the Lenders reserve all rights, privileges and remedies under the Loan Documents and require strict compliance with the terms of the Credit Agreement and the other Loan Documents.

 

(e)  Nothing in this Amendment is intended, or shall be construed, to constitute a novation or an accord and satisfaction of any of the Obligations or to modify, affect or impair the perfection, priority or continuation of the security interests in, security titles to or other Liens on any collateral (including the Collateral) securing the Obligations.

 

Section 6.  Release.  In consideration of the amendments contained herein, each of the Loan Parties hereby waives and releases the Lenders, the Administrative Agent, the Swing Line Lender and the Issuing Bank from any and all claims and defenses, known or unknown, existing on the date hereof with respect to the Credit Agreement and the other Loan Documents and the transactions contemplated thereby.

 

Section 7.  Further Assurances.  The Borrower agrees to take all further actions and execute such other documents and instruments as the Administrative Agent may from time to time reasonably request to carry out the transactions contemplated by this Amendment, the Loan Documents and all other agreements executed and delivered in connection herewith.

 

  

-3-

  

Section 8.  Costs and Expenses.  The Borrower agrees to pay on demand all reasonable, out-of-pocket costs and expenses in connection with the preparation, execution and delivery of this Amendment and the other instruments and documents to be delivered hereunder, including, without limitation, the reasonable fees, charges and disbursements of counsel for the Administrative Agent with respect thereto and with respect to advising the Administrative Agent as to its rights and responsibilities hereunder and thereunder.

 

Section 9.  Governing Law.  This Amendment shall be governed by and construed in accordance with the laws (without giving effect to the conflict of law principles thereof) of the State of New York.

 

Section 10.  Loan Document.  This Amendment shall be deemed to be a Loan Document for all purposes.

 

Section 11.  Affirmation of Guaranty.  By executing this Amendment, each of the Parent and the Subsidiary Loan Parties hereby acknowledges, consents and agrees that all of its obligations and liabilities under the Guaranty and Security Agreement remain in full force and effect, and that the execution and delivery of this Amendment and any and all documents executed in connection herewith shall not alter, amend, reduce or modify its obligations and liability under the Guaranty and Security Agreement or any of the other Loan Documents to which it is a party.

 

Section 12.  Counterparts.  This Amendment may be executed in any number of counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument.  Delivery of an executed counterpart to this Amendment by facsimile or other electronic method of transmission shall be as effective as delivery of a manually executed counterpart hereof.

 

Section 13.  Authority of Administrative Agent.  Each Lender authorizes the Administrative Agent to accept delivery of this Amendment and any of the other Loan Documents on such Lender's behalf.

 

[Signature Pages Follow]

  

-4-

  

IN WITNESS WHEREOF, the parties hereto have caused this Fourth Amendment to Amended and Restated Credit Agreement to be duly executed as of the date first above written.

 

	
BORROWER:

	
STEINER U.S. HOLDINGS, INC.

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus
	 	 	Name:	
Stephen Lazarus

	 	 	Title:	
Senior Vice President and

	 	 	 	
Chief Financial Officer

 

 

 

 

 

  

  

  

	PARENT: 	STEINER LEISURE LIMITED
	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus
	 	 	Name:	
Stephen Lazarus

	 	 	Title:	
Executive Vice President and

	 	 	 	
Chief Financial Officer

	 	 	 	 
	 	 	 	 
	
SUBSIDIARY LOAN

	 	 	 
	PARTIES:	STEINER TRANSOCEAN LIMITED
	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus
	 	 	Name:	
Stephen Lazarus

	 	 	Title:	
Executive Vice President and

	 	 	 	
Chief Financial Officer

	 	 	 	 
	 	 	 	 
	 	
MANDARA SPA (CRUISE II), L.L.C.

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus
	 	 	Name:	
Stephen Lazarus

	 	 	Title:	

Senior Vice President and

	 	 	 	
Chief Financial Officer

 

 

  

  

  

	 	
MANDARA SPA (BAHAMAS) LTD.

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus
	 	 	Name:	
Stephen Lazarus

	 	 	Title:	
Executive Vice President and

	 	 	 	
Chief Financial Officer

	 	 	 	 
	 	 	 	 
	 	
STEINER SPA LIMITED

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus
	 	 	Name:	
Stephen Lazarus

	 	 	Title:	
Executive Vice President and

	 	 	 	
Chief Financial Officer

	 	 	 	 
	 	 	 	 
	 	
MANDARA SPA LLC

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus
	 	 	Name:	
Stephen Lazarus

	 	 	Title:	
Senior Vice President and

	 	 	 	
Chief Financial Officer

	 	 	 	 
	 	 	 	 
	 	
COSMETICS LIMITED

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Youlanda Deveaux
	 	 	Name:	
Youlanda Deveaux

	 	 	Title:	
Vice President

 

 

  

  

  

	 	
STEINER SPA ASIA LIMITED

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus
	 	 	Name:	
Stephen Lazarus

	 	 	Title:	
Executive Vice President and

	 	 	 	
Chief Financial Officer

	 	 	 	 
	 	 	 	 
	 	
STEINER EDUCATION GROUP, INC.

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus
	 	 	Name:	
Stephen Lazarus

	 	 	Title:	Senior Vice President and
	 	 	 	
Chief Financial Officer

	 	 	 	 
	 	 	 	 
	 	
MID-ATLANTIC MASSAGE THERAPY, INC.

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus
	 	 	Name:	
Stephen Lazarus

	 	 	Title:	Chief Operating Officer and
	 	 	 	
Chief Financial Officer

	 	 	 	 
	 	 	 	 
	 	
FCNH, INC.

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus
	 	 	Name:	
Stephen Lazarus

	 	 	Title:	Chief Operating Officer and
	 	 	 	
Chief Financial Officer

 

 

  

  

  

	 	
STEINER BEAUTY PRODUCTS, INC.

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus
	 	 	Name:	/s/ Stephen Lazarus
	 	 	Title:	Senior Vice President and
	 	 	 	
Chief Financial Officer

	 	 	 	 
	 	 	 	 
	 	
STEINER MANAGEMENT SERVICES, LLC

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus
	 	 	Name:	Stephen Lazarus
	 	 	Title:	Senior Vice President and
	 	 	 	
Chief Financial Officer

	 	 	 	 
	 	 	 	 
	 	
ELEMIS LIMITED

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Leonard Fluxman
	 	 	Name:	Leonard Fluxman
	 	 	Title:	Managing Director
	 	 	 	 
	 	 	 	 
	 	
STEINER TRAINING LIMITED

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Leonard Fluxman
	 	 	Name:	Leonard Fluxman
	 	 	Title:	Managing Director

 

 

  

  

  

	 	
BLISS WORLD HOLDINGS, INC.

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus 
	 	 	Name:	Stephen Lazarus
	 	 	Title:	Executive Vice President and
	 	 	 	
Chief Financial Officer

	 	 	 	 
	 	 	 	 
	 	
BLISS WORLD LLC

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus
	 	 	Name:	Stephen Lazarus
	 	 	Title:	Executive Vice President and
	 	 	 	
Chief Financial Officer

	 	 	 	 
	 	 	 	 
	 	
IDEAL IMAGE DEVELOPMENT, INC.

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus
	 	 	Name:	Stephen Lazarus
	 	 	Title:	Senior Vice President and
	 	 	 	Chief Financial Officer
	 	 	 	 
	 	 	 	 
	 	
IDEAL IMAGE OF NEVADA, LLC

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus
	 	 	Name:	Stephen Lazarus
	 	 	Title:	Senior Vice President and
	 	 	 	Chief Financial Officer

 

 

  

  

  

	 	

IDEAL IMAGE OF IDAHO, LLC

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus 
	 	 	Name:	Stephen Lazarus
	 	 	Title:	Senior Vice President and
	 	 	 	
Chief Financial Officer

	 	 	 	 
	 	 	 	 
	 	

IDEAL IMAGE OF UTAH, LLC

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus
	 	 	Name:	Stephen Lazarus
	 	 	Title:	Senior Vice President and
	 	 	 	
Chief Financial Officer

	 	 	 	 
	 	 	 	 
	 	

IDEAL IMAGE DEVELOPMENT CORPORATION

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus
	 	 	Name:	Stephen Lazarus
	 	 	Title:	Senior Vice President and
	 	 	 	Chief Financial Officer
	 	 	 	 
	 	 	 	 
	 	

IDEAL IMAGE OF TENNESSEE, LLC

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus
	 	 	Name:	Stephen Lazarus
	 	 	Title:	Senior Vice President and
	 	 	 	Chief Financial Officer

 

  

  

  

	 	

IDEAL IMAGE OF OKLAHOMA, LLC

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus 
	 	 	Name:	Stephen Lazarus
	 	 	Title:	Senior Vice President and
	 	 	 	
Chief Financial Officer

	 	 	 	 
	 	 	 	 
	 	

IDEAL IMAGE OF WISCONSIN, LLC

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus
	 	 	Name:	Stephen Lazarus
	 	 	Title:	Senior Vice President and
	 	 	 	
Chief Financial Officer

	 	 	 	 
	 	 	 	 
	 	

IDEAL IMAGE OF TEXAS, LLC

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus
	 	 	Name:	Stephen Lazarus
	 	 	Title:	Senior Vice President and
	 	 	 	Chief Financial Officer
	 	 	 	 
	 	 	 	 
	 	

I.I. COSMETIC INSTITUTE, INC.

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus
	 	 	Name:	Stephen Lazarus
	 	 	Title:	Senior Vice President and
	 	 	 	Chief Financial Officer

 

 

  

  

  

	 	

IDEAL IMAGE OF FLORIDA, LLC

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus 
	 	 	Name:	Stephen Lazarus
	 	 	Title:	Senior Vice President and
	 	 	 	
Chief Financial Officer

	 	 	 	 
	 	 	 	 
	 	

IDEAL OF NORTH CAROLINA, LLC

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus
	 	 	Name:	Stephen Lazarus
	 	 	Title:	Senior Vice President and
	 	 	 	
Chief Financial Officer

	 	 	 	 
	 	 	 	 
	 	

IDEAL IMAGE OF GEORGIA (JV2), LLC

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus
	 	 	Name:	Stephen Lazarus
	 	 	Title:	Senior Vice President and
	 	 	 	Chief Financial Officer
	 	 	 	 
	 	 	 	 
	 	

IDEAL IMAGE OF ARIZONA, LLC

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus
	 	 	Name:	Stephen Lazarus
	 	 	Title:	Senior Vice President and
	 	 	 	Chief Financial Officer

 

 

  

  

  

	 	

IDEAL IMAGE OF MISSOURI, LLC

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus 
	 	 	Name:	Stephen Lazarus
	 	 	Title:	Senior Vice President and
	 	 	 	
Chief Financial Officer

	 	 	 	 
	 	 	 	 
	 	

IDEAL IMAGE OF MARYLAND, LLC

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus
	 	 	Name:	Stephen Lazarus
	 	 	Title:	Senior Vice President and
	 	 	 	
Chief Financial Officer

	 	 	 	 
	 	 	 	 
	 	

IDEAL IMAGE OF NEW MEXICO, LLC

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus
	 	 	Name:	Stephen Lazarus
	 	 	Title:	Senior Vice President and
	 	 	 	Chief Financial Officer
	 	 	 	 
	 	 	 	 
	 	

IDEAL IMAGE OF INDIANA, LLC

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus
	 	 	Name:	Stephen Lazarus
	 	 	Title:	Senior Vice President and
	 	 	 	Chief Financial Officer

 

 

  

  

  

	 	

IDEAL IMAGE OF MINNESOTA, LLC

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus 
	 	 	Name:	Stephen Lazarus
	 	 	Title:	Senior Vice President and
	 	 	 	
Chief Financial Officer

	 	 	 	 
	 	 	 	 
	 	

IDEAL IMAGE OF OREGON, LLC

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus
	 	 	Name:	Stephen Lazarus
	 	 	Title:	Senior Vice President and
	 	 	 	
Chief Financial Officer

	 	 	 	 
	 	 	 	 
	 	

IDEAL IMAGE OF WASHINGTON, LLC

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus
	 	 	Name:	Stephen Lazarus
	 	 	Title:	Senior Vice President and
	 	 	 	Chief Financial Officer
	 	 	 	 
	 	 	 	 
	 	

IDEAL IMAGE OF VIRGINIA, LLC

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus
	 	 	Name:	Stephen Lazarus
	 	 	Title:	Senior Vice President and
	 	 	 	Chief Financial Officer

  

  

  

	 	

IDEAL IMAGE OF KENTUCKY, LLC

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus 
	 	 	Name:	Stephen Lazarus
	 	 	Title:	Senior Vice President and
	 	 	 	
Chief Financial Officer

	 	 	 	 
	 	 	 	 
	 	

IDEAL VENTURES, INC.

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus
	 	 	Name:	Stephen Lazarus
	 	 	Title:	Senior Vice President and
	 	 	 	
Chief Financial Officer

	 	 	 	 
	 	 	 	 
	 	

IDEAL VENTURES OF ARIZONA, INC.

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus
	 	 	Name:	Stephen Lazarus
	 	 	Title:	Senior Vice President and
	 	 	 	Chief Financial Officer
	 	 	 	 
	 	 	 	 
	 	

SEG CORT LLC

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Lazarus
	 	 	Name:	Stephen Lazarus
	 	 	Title:	Senior Vice President and
	 	 	 	Chief Financial Officer

 

  

  

  

	 	 
	

ADMINISTRATIVE AGENT AND

LENDERS:

	
SUNTRUST BANK, as Administrative Agent, as Issuing Bank, as Swingline Lender and as a Lender

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Martin E. Sapp
	 	 	Name:	
Martin E. Sapp

	 	 	Title:	
First Vice President

 

 

 

 

  

  

  

	

 

	

BANK OF AMERICA, N.A., as a Lender

	 	 	 	 
	 	 	 	 
	 	By:	/s/ David Gutierrez
	 	 	Name:	
David Gutierrez

	 	 	Title:	
Senior Vice President

 

 

 

 

 

  

  

  

	 	

WELLS FARGO BANK, NATIONAL ASSOCIATION, as a Lender

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Gregory Roll
	 	 	Name:	
Gregory Roll

	 	 	Title:	
Senior Vice President

 

 

 

 

 

  

  

  

	 	

REGIONS BANK, as a Lender

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen Hanas
	 	 	Name:	
Stephen Hanas

	 	 	Title:	
Senior Vice President

 

 

 

 

  

  

  

	 	

CITY NATIONAL BANK OF FLORIDA, as a Lender

	 	 	 	 
	 	 	 	 
	 	By:	/s/ John Costa
	 	 	Name:	
John Costa

	 	 	Title:	
Senior Vice President

 

 

 

 

  

  

  

	 	

JPMORGAN CHASE BANK, N.A., as a Lender

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Antje Focke
	 	 	Name:	
Antje Focke

	 	 	Title:	
Senior Underwriter

 

 

[End of Signatures]

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