Document:

Exhibit 10.3

 

Execution Version

 

AMENDED AND RESTATED SERVICES AGREEMENT 

AMENDED AND RESTATED SERVICES AGREEMENT

This AMENDED AND RESTATED SERVICES AGREEMENT (this “Services Agreement”) is made as of March 14, 2018 (the “Execution Date”) by and among, IONIS PHARMACEUTICALS, INC., a Delaware corporation, with its principal place of business at 2855 Gazelle Court, Carlsbad, CA 92010 (“Ionis”) and AKCEA THERAPEUTICS, INC., a Delaware corporation, with its principal place of business at 55 Cambridge Parkway, Suite 100, Cambridge, MA 02142 (“Akcea”). As of the Effective Date, this Services Agreement, amends, updates and replaces in its entirety the December 18, 2015 Services Agreement between Ionis and Akcea (the “2015 Services Agreement”). All capitalized terms not defined herein will have the meanings set forth in the Development Commercialization and License Agreement, dated December 18, 2015 (the “2015 License Agreement”), and the Development, Commercialization, Collaboration, and License Agreement, dated as of the Execution Date, by and between Ionis and Akcea (as it may be amended from time to time, the “2018 License Agreement” and together with the 2015 License Agreement, the “License Agreements”). Ionis and Akcea each may be referred to herein individually as a “Party,” or collectively as the “Parties.”

RECITALS

WHEREAS, on December 18, 2015, (i) Ionis Pharmaceuticals, Inc. formed Akcea, a Delaware corporation, as a wholly-owned subsidiary for the initial purpose of serving as the development and commercialization entity for the following lipid-modulating antisense drugs: IONIS-APOCIIIRx (IONIS304801), IONIS-APOCIII-LRx (IONIS678354), IONIS-APO(a)Rx (IONIS494372), IONIS-APO(a)-LRx (IONIS681257), IONIS-ANGPTL3Rx(IONIS563580) and IONIS-ANGPTL3-LRx (IONIS703802) (the “Lipid Drugs”); (ii) entered into the 2015 License Agreement to develop, manufacture and commercialize the Lipid Drugs; and (iii) entered into the 2015 Services Agreement to provide certain general and administrative services in support of Akcea’s business;

WHEREAS, on the Execution Date, Ionis and Akcea entered into the 2018 License Agreement to develop, commercialize, collaborate on and manufacture the following antisense drugs: inotersen and IONIS-TTR-LRx (the “TTR Drugs”);

WHEREAS, Akcea continues to need certain services related to general and administrative services in support of its business; and 

WHEREAS, Ionis wishes to provide such Services;

WHEREAS, through this Services Agreement, the Parties now wish to amend and restate the 2015 Services Agreement to expand the Services to include both the Lipid Drugs and the TTR Drugs (collectively the “Supported Drugs”).

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Ionis and Akcea each agree as follows:

		1.	Services. On an annual basis as part of the Parties’ annual budgeting process the Parties will agree on which of the following services set forth in this Article 1 Ionis will provide to Akcea during the upcoming year; provided that if Ionis desires to cease providing or Akcea desires to cease receiving one or more services previously provided to Akcea by Ionis, then such Party will notify the other Party of such cessation in advance of the applicable annual budgeting process as necessary to allow Akcea to transition in an orderly and rational manner to performing such services internally or obtaining replacement services. 

		1.1	General and Administrative Services. The general and administrative support services provided to Akcea under this Services Agreement of the type described below will be referred to herein as the “G&A Services.”

		1.1.1	Investor Relations Services. Ionis will provide to Akcea investor relations services regarding matters of fair and accurate disclosure and compliance with Ionis’ disclosure policy and applicable Law, including, without limitation, compliance with the Sarbanes-Oxley Act of 2002. Such services will include drafting; processing for review and issuing press releases; conference call scripts and presentations; managing conference and medical meeting attendance; managing media and public relations activities; and facilitating interactions with investors and analysts. 

C-1

		1.1.2	Pre-Commercial and Competitive Intelligence Services. Ionis will provide to Akcea services related to pre-commercial activities and related to competitive intelligence services for all of the Supported Drugs as appropriate.

		1.1.3	Accounting and Payroll Services. Ionis will provide to Akcea bookkeeping and accounting services, including maintaining the books and records of Akcea’s financial operations, preparing financial statements (including quarterly and annual financial statements), billings, accounts payable, stock option accounting services, internal audit support services, financial budgeting and forecasting as needed, review of compliance with financial and accounting procedures and government accounting functions (e.g., preparing budgets and setting rates), in each case, in accordance with GAAP, and government regulations as applicable. In addition, Ionis will administer Akcea’s employee payroll, including withholding and remitting employee and employer payroll taxes.

		1.1.4	Personnel Services. Ionis will provide personnel services to Akcea, including maintaining general employee insurance obligations, establishing and managing of an employee benefits program, advising on employee relations and related issues, and managing of Akcea’s retirement plans, including the Ionis Pharmaceuticals, Inc. 401(k) Retirement Plan. However, the Parties expect Akcea to develop its own stock administration capabilities in the near future. 

		1.1.5	Legal Services. Ionis will provide Akcea with legal services, including legal services from Ionis’ General Counsel and other legal counsel with respect to: labor and personnel matters; management of Akcea’s employee equity incentive plans and programs; compliance with applicable securities laws and regulations; compliance with other applicable laws and regulations; litigation management; contract negotiation and preparation; commercial sales agreements; mergers and acquisitions; tax issues; preventive counseling; and all matters relating to corporate governance of Akcea. Notwithstanding the foregoing, if, with the advice of counsel, Akcea reasonably believes an actual or potential conflict of interest is likely to arise between the interests of Ionis’ stockholders and Akcea’s stockholders, then Akcea may retain its own counsel at its own expense for such matters.

		1.1.6	Risk Management; Insurance. Ionis will provide Akcea centralized insurance purchasing for liability, property, casualty and other normal business insurance and the handling of claims.

		1.1.7	Tax Related Services. Ionis will assist Akcea in the preparation of ex-U.S. and U.S. federal, state and local income tax returns, tax research and planning and assistance on tax audits or other tax-related matters.

		1.1.8	Corporate Record Keeping Services. Ionis will maintain, on behalf of Akcea, corporate records, including minutes of meetings of the board of directors and stockholders of Akcea, supervision of transfer agent and registration functions, maintenance of stock records, including the tracking of stock issuances and stock reservations.

		1.1.9	Financial Services. Ionis will provide to Akcea the following financial services: (i) banking services administration, including bank account administration, loan administration, covenant compliance administration, maintenance of cash collection and disbursement systems and arrangement of letters of credit, foreign currency exchanges or conversion calculations and cash transfers; (ii) financial management and information services, including centralized cash management, leasing, customer financing, financial analysis on foreign currency issues, risk assessment and hedging strategies; (iii) investment banking services, including managing Ionis’ and Akcea’s relationships with debt rating agencies. In connection with such services, Ionis is authorized to invest the funds deposited by Akcea with Ionis in taxable, tax-exempt or tax-preferred instruments of short or longer term duration based upon Ionis’ assessment of Akcea’s tax considerations and Akcea’s cash needs and consistent with Akcea’s investment policy and guidelines. Ionis will advise Akcea on a quarterly basis as to the earnings that Akcea may expect on its cash deposits during the following quarter.

C-2

		1.1.10	Credit Services. Ionis will assist Akcea in identifying and obtaining cost-effective sources of financing consistent with the needs of Ionis and its affiliated companies.

		1.1.11	COO, CFO and CBO Oversight Services. The Parties acknowledge and agree that Ionis’ COO, CFO and CBO do and will supervise the employees performing the Services hereunder, and in consideration for such supervisory services, a portion of the COO’s, CFO’s and CBO’s salary will be allocated to and paid by Akcea using the allocation methodology set forth in APPENDIX A (Allocation Methodologies). 

		1.2	R&D Support Services. The research and development support services provided to Akcea under this Services Agreement of the type described below will be referred to herein as the “R&D Support Services.”

		1.2.1	Information Technology Services. Ionis will provide information technology and telephone services to Akcea, including but not limited to: intercompany network services and database management services between Ionis and Akcea; information technology planning services; centralized procurement of hardware and software; support for initial set up or relocation of Akcea facilities; email services; phone services; and mobile device services. Ionis may provide additional information technology services that are mutually agreed between Ionis and Akcea. In addition, Ionis will allow Akcea to access, display and use software systems and programs owned by or licensed to Ionis, except to the extent that Ionis is precluded by its licenses from providing such access, display or use. 

		1.2.2	Purchasing Services. Ionis will provide services to Akcea related to purchasing, including purchase order management, vendor selection, payment terms, negotiating preferred pricing and negotiating supplier agreements.

		1.2.3	Facilities and Office Services. To the extent necessary, Ionis will provide Akcea office and facility services, primarily the appropriate personnel to support Akcea’s office and facility infrastructure. 

		1.2.4	Intellectual Property Support Services. Ionis will provide intellectual property support services to Akcea, including but not limited to filing, prosecuting, maintaining, enforcing, and defending the Ionis Product-Specific Patents licensed to Akcea, trademarks and copyrights, patent due diligence to support partnership transactions and advice regarding intellectual property strategy (collectively, the “IP Support Services”). In the event that a Third Party challenges one of the Ionis Core Technology Patents licensed to Akcea under a License Agreement, then the Parties will discuss and agree to a percentage of the expense to defend such challenge for which Akcea will reimburse Ionis. 

		1.3	Specialty Services. If, from time to time, Akcea wishes Ionis to perform specific projects that go beyond the services already specified in Section 1.1 or Section 1.2 to perform specific projects, Akcea and Ionis will execute a work order that will be governed by the terms of this Services Agreement and will specify the projects Ionis will perform for Akcea and the payment Akcea will make to Ionis for such project. The Parties will execute a work order prior to initiating such work (collectively, the “Specialty Services”). An email from Akcea’s Chief Executive Officer, President, Chief Operating Officer, or Chief Financial Officer referencing this Services Agreement and authorizing Ionis to perform specific Specialty Services will be considered a work order for purposes of this Section 1.3. Ionis will not be reimbursed for performing work that goes beyond the scope of any Specialty Services without an agreed and executed work order. Examples of a Specialty Service under this Section 1.3 are business development services relating to corporate partnering transactions and other services related to a corporate partnership or financing.

		1.4	Development, Regulatory and Manufacturing Services. Ionis will provide services related to Development (including regulatory affairs) and Manufacturing in support of the Lipid Drugs pursuant to the terms of the 2015 License Agreement. Ionis will provide services related to Development (including regulatory affairs) and Manufacturing in support of the TTR Drugs pursuant to the terms of the 2018 License Agreement. Ionis will be reimbursed by Akcea for such services for each of the Lipid Drugs and TTR Drugs using the same methodology the Parties use under the 2015 License Agreement.

C-3

		2.	Performance of Services.

		2.1	Performance. All services described in Article 1 of this Services Agreement are collectively referred to as the “Services.” Ionis will provide all Services (i) on an ongoing basis during the Term, as reasonably required or requested by Akcea, (ii) promptly, (iii) in accordance with the terms of this Services Agreement, (iv) in accordance with the standards and practices for the performance of similar services by Ionis in the conduct of its own business and (v) in a manner consistent with Law applicable to Ionis and Akcea. 

		2.2	Authority. Consistent with Ionis’ signature policy and established procedures and, to the extent of the scope of the Services such Ionis employee is performing for Akcea, Ionis personnel have the authority to act on Akcea’s behalf. 

		3.	Compensation.

		3.1	Charge for Services. Akcea will pay Ionis fees for the Services as specified in APPENDIX A (Allocation Methodologies) attached hereto, which provides details regarding how to calculate such fees (except Specialty Service fees). These Allocation Methodologies will generally be determined from a good faith estimate by Ionis of a percentage of each Ionis functional area detailed in Section 1 of this Agreement dedicated to providing the Services hereunder. From time to time, the Parties may mutually agree to update APPENDIX A (Allocation Methodologies) as needed, including in the event of a change of circumstances of one or more of the Parties. At a minimum, on an annual basis as part of Ionis’ annual budgeting process, the Parties will review APPENDIX A (Allocation Methodologies) in good faith to ensure the allocations set forth therein are fair and commercially reasonable. 

		3.2	Specialty Services Fee. Akcea will pay Ionis for Specialty Services rendered based upon a good faith estimate of the time burden required of Ionis personnel to perform the Specialty Services based upon the statement of work provided by Akcea. If there is a material change in the statement of work, in scope or budget, Ionis will prepare a revised estimate for Akcea’s approval.

		3.3	Direct Out-of-Pocket Expenses. Akcea will be responsible for paying and will bear the cost of all out-of-pocket expenses for which Akcea is the primary beneficiary, including but not limited to (i) legal services provided to Akcea by outside counsel; (ii) insurance policies and claims that relate specifically to Akcea; (iii) accounting, auditing and tax related services provided to Akcea by external accountants and tax advisors; (iv) filing fees and other costs (e.g., translation costs) charged by Third Parties in connection with filing, prosecuting and maintaining Akcea’s patents, trademarks and copyrights; and (v) travel costs associated with providing any of the Services contemplated by this Services Agreement (collectively the “Direct Expenses”). Akcea and Ionis will use commercially reasonable efforts to have the applicable Third Parties bill Akcea directly for any Direct Expenses. For any out-of-pocket expenses that benefit both Ionis and Akcea but are not Direct Expenses, such expenses will be allocated to Akcea in the same manner as the fees above and depending on whether such expense is in connection with G&A Services, R&D Support Services, IP Support Services, or Specialty Services.

		3.4	Payment Terms. Ionis will invoice Akcea within fifteen (15) days following the end of each Quarter for all amounts due related to the provision of Services under this Services Agreement. Invoices will contain such detail as Akcea may reasonably require and will be payable in U.S. Dollars. All undisputed amounts will be paid by Akcea within 30 days of its receipt of an invoice. Ionis will provide Akcea with W-9s or other forms as may be reasonably requested by Akcea in order to process such payments.

		4.	Personnel. Ionis will assign employees (“Ionis Personnel”) in sufficient numbers, and with the proper skill, training and experience, to provide the Services. Ionis will be solely responsible for paying its Ionis Personnel and providing any employee benefits that they are owed. Before providing Services, all Ionis Personnel must have agreed in writing to (i) confidentiality obligations consistent with the terms of this Services Agreement and (ii) assign all right, title and interest in any intellectual property created by such Ionis Personnel, in performance of the Services to Ionis. The Parties intend for there to be additional Ionis Personnel who are not 100% dedicated to the provision of Services who will instead provide Services as needed.

C-4

		5.	Covenants of Akcea.

		5.1	Cooperation. Akcea will fully cooperate with Ionis to permit Ionis to perform Ionis’ duties and obligations under this Services Agreement in a timely manner. Akcea will direct its officers, directors, employees and agents (“Representatives”) to (i) properly and timely respond to requests by Ionis for information and (ii) if requested by Ionis, meet with or consult with the service provider and its professional advisors regarding any matter related to the Services. Akcea will also promptly provide Ionis with copies of any agreements, instruments or documents in possession of Akcea as are reasonably requested by Ionis, and promptly provide Ionis with any notices or other communications that Akcea may receive that may have any effect on Ionis’ performance of the Services.

		5.2	Accuracy of Information. Akcea will be responsible for the completeness and accuracy of all information furnished to Ionis by Akcea and Representatives of Akcea in connection with Ionis’ performance of the Services. Ionis may rely upon such information in its performance of Services under this Agreement. 

		5.3	Policies and Procedures.

		5.3.1	During any period in which Ionis is required to consolidate the results of Akcea for purposes of reporting its results under U.S. GAAP, Akcea and its employees will comply with the policies and procedures of Ionis that Ionis, in Ionis’ good faith reasonable judgment, determines that Akcea should comply with to ensure that Ionis can satisfy its reporting obligations as a public company with a class of securities registered under the Securities Exchange Act. These policies include, but are not limited to (i) Ionis’ Code of Ethics, (ii) Ionis’ Disclosure Policies and Procedures, (iii) Ionis’ Signature Policy, (iv) Ionis’ Publication Clearance Policy, (v) Ionis’ Policies and Procedures Manual and (vi) Ionis’ Internal Control Procedures as set forth in the Amended and Restated Investor Rights Agreement entered into between Ionis and Akcea on the Execution Date (the “2018 Investor Rights Agreement”); provided, on a policy by policy basis, Akcea may replace a policy with a reasonably comparable policy that has been expressly approved by Ionis’ Chief Financial Officer and General Counsel and Akcea’s governance committee of its Board of Directors. 

		5.3.2	During any period in which Ionis is no longer required to consolidate the results of Akcea for purposes of reporting its results under U.S. GAAP but is required to record its share of Akcea’s income or losses pursuant to U.S. GAAP, Akcea will provide Ionis with a reconciliation between Akcea’s accounting policies as applied and Ionis’ accounting policies as applied. Akcea will provide this reconciliation in a timely manner. In order to execute the reconciliation in an accurate fashion, Ionis and Akcea will be required to provide each other with their accounting policies in sufficient detail to facilitate such reconciliation and verify that all differences that been identified. Akcea will perform the reconciliation to a level of detail that ensures that Ionis has the ability to assert its financial statements are materially correct. Neither Party will be required to provide the other with information to a lower level of detail, but either Party may do so upon the other Party’s request. In addition, Akcea will permit Ionis’ auditors to have access to Akcea results as necessary to perform procedures on Akcea’s financial information solely for the purposes of preparing Ionis’ publicly filed financial statements.

		6.	Financial Records; Audit Right. Ionis will maintain accurate financial records relating to its provision of the Services hereunder for a period of three (3) years, or longer as required by applicable Law. The terms set forth in APPENDIX B will govern each Party’s rights and obligations with respect to the auditing of such financial records.

C-5

		7.	Confidential Information. The terms regarding confidentiality and non-use set forth in the 2018 Investor Rights Agreement and ARTICLE 8 of the 2018 License Agreement will govern each Party’s rights and obligations concerning disclosure, non-use, and/or publication of the terms of this Services Agreement and/or any information exchanged or arising under this Services Agreement.

		8.	Indemnification; Insurance. The terms of ARTICLE 11 of the 2015 License Agreement will govern each Party’s indemnification and insurance obligations, respectively, with respect to this Services Agreement in relation to the Lipid Drugs and the terms of ARTICLE 11 of the 2018 License Agreement will govern each Party’s indemnification and insurance obligations, respectively, with respect to this Services Agreement in relation to the TTR Drugs.

		9.	Taxes. Notwithstanding anything to the contrary in this Services Agreement, for so long as Ionis and Akcea file consolidated federal and/or state tax returns, Ionis will retain all Akcea-generated tax attributes generated by Akcea’s activities for the relevant federal and/or state tax return. Following deconsolidation of federal and/or state tax returns, Akcea will file its own federal and/or state taxes as a separate entity and Akcea will retain such Akcea-generated tax attributes for the relevant federal and/or state tax return.

		10.	Disclaimer; Limitation of Liability.

		10.1	Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN SECTION 2 ABOVE, NO PARTY MAKES ANY REPRESENTATIONS OR EXTENDS ANY WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY, QUALITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT, OR VALIDITY OF PATENT CLAIMS, WHETHER ISSUED OR PENDING. 

		10.2	Limitation of Liability. 

		10.2.1	Akcea acknowledges that Ionis is not in the business of providing Services and that Services are being provided pursuant to this Agreement as an accommodation to Akcea. Akcea’s sole and exclusive remedy and Ionis’ sole and exclusive liability for any breach of Section 1 or Section 2, and for any damages of Akcea suffered or incurred directly or indirectly in connection with the provision of Services (whether any claim related to such damages arises in contract, in tort, by statute or otherwise), will be the re-performance by Ionis of Services at such Ionis’ expense.

		10.2.2	OTHER THAN (A) A PARTY’S INDEMNIFICATION OBLIGATIONS SET FORTH UNDER SECTION 8, (B) AS A RESULT OF A PARTY’S WILLFUL MISCONDUCT OR A PARTY’S BREACH OF SECTION 7, NO PARTY WILL BE LIABLE TO THE OTHER PARTY OR ITS AFFILIATES FOR SPECIAL, INCIDENTAL, CONSEQUENTIAL, EXEMPLARY, PUNITIVE, MULTIPLE OR OTHER INDIRECT DAMAGES ARISING OUT OF THIS SERVICES AGREEMENT OR THE EXERCISE OF RIGHTS HEREUNDER, OR FOR LOSS OF PROFITS, LOSS OF DATA, LOSS OF REVENUE, OR LOSS OF USE DAMAGES ARISING FROM OR RELATING TO ANY BREACH OF THIS SERVICES AGREEMENT, WHETHER BASED UPON WARRANTY, CONTRACT, TORT, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE, REGARDLESS OF ANY NOTICE OF SUCH DAMAGES. 

		11.	Effectiveness; Term. This Agreement will take effect automatically without further action of either Party upon the date on which the closing of the Stock Purchase Agreement dated as of the Execution Date by and between the Parties occurs (the “Effective Date”). The initial term of this Services Agreement will commence on the Effective Date and will expire on December 31, 2020 (the “Initial Term”). Following such Initial Term, this Services Agreement will automatically renew on an annual basis for periods of 12 months each (each, an “Additional Term”) unless one Party provides the other Party written notice that it does not wish to renew this Services Agreement at least 180 days in advance of the date of the expiration of the Initial Term or the then-current Additional Term, as applicable (the period commencing on the Effective Date and ending on latest to expire of the Initial Term or any Additional Term, the “Term”).

C-6

		12.	Term and Termination.

		12.1	Termination Prior to the Effective Date. Notwithstanding anything to the contrary set forth in this Agreement, this Services Agreement may be terminated and the transactions contemplated herein be abandoned at any time prior to the Effective Date (in which case the 2015 Services Agreement will continue in full force and effect in accordance with its terms):

		(a)	by mutual written consent of Akcea and Ionis;

		(b)	by either Akcea or Ionis:

		(i)	if the Effective Date shall not have occurred on or prior to June 30, 2018; or

		(ii)	if any governmental authority having jurisdiction over Akcea or Ionis shall have enacted, issued, promulgated, enforced, or entered any Applicable Law or taken any other material action that has the effect of making the transactions contemplated by the Transaction Documents illegal or otherwise restraining or prohibiting the consummation of such transactions.

		12.2	Termination of License Agreements. This Services Agreement will automatically terminate upon the termination or expiration of both the License Agreements.

		12.3	Termination by Akcea for Breach by Ionis. At any time following the Effective Date, if Ionis breaches any material term of this Services Agreement, and such material breach is not cured by Ionis within sixty (60) days of notice therefor (or cannot be cured), then Akcea may terminate this Services Agreement. 

		12.4	Termination by Ionis for Breach by Akcea. At any time following the Effective Date, if Akcea breaches any material term of this Services Agreement, and such material breach is not cured by Akcea within sixty (60) days of notice therefor (or cannot be cured), then Ionis may stop performing Services hereunder until such breach is cured. 

		12.5	Effect of Termination or Expiration. Upon termination or expiration of this Services Agreement after the Effective Date, neither Ionis nor Akcea will have any further obligations under this Services Agreement, except that (unless otherwise agreed by the Parties or as set forth in the 2018 Investor Rights Agreement or the applicable License Agreement):

		12.5.1	Ionis will terminate all its Services in progress in an orderly manner as soon as practical and in accordance with a schedule agreed to by the Parties; 

		12.5.2	Ionis will deliver to Akcea or, at Akcea’s option, dispose of any Akcea Confidential Information developed through termination or expiration;

		12.5.3	Akcea will pay Ionis any undisputed monies due and owing, up to the time of termination or expiration, for Services properly performed and all expenses actually incurred; 

		12.5.4	Ionis will promptly return to Akcea all Confidential Information and copies thereof provided to Ionis under this Services Agreement, except for one (1) copy which Ionis may retain solely to monitor Ionis’ surviving obligations; and

		12.5.5	the provisions set forth in Section 5.3, Sections 6 through 10, this 12.5 and 13 will survive any such termination or expiration in accordance with its terms. 

		13.	Miscellaneous.

		13.1	Assignment. Neither this Services Agreement nor any of the rights or obligations hereunder may be assigned by a Party without the prior written consent of the other Party, except that each Party may assign this Services Agreement and the rights, obligations and interests of such Party, in whole or in part, without the other Party’s consent, to any of its Affiliates, to any purchaser of all or substantially all of its business or assets to which this Services Agreement relates or to any successor corporation resulting from any merger, consolidation, share exchange or other similar transaction; provided, if Akcea or any of its Affiliates or Sublicensees transfers or assigns this 

C-7

Services Agreement or a Sublicense to one of its Affiliates that is incorporated in a jurisdiction that does not have a Bilateral Income Tax Treaty with the United States or in a jurisdiction where a Bilateral Income Tax Treaty requires withholding taxes on any payment described in this Services Agreement, then Akcea (or such Affiliate or Sublicensee), will increase (i.e., “gross up”) any payment due Ionis under Article 6 of the 2015 License Agreement or the 2018 License Agreement, as applicable, for the Incremental Tax Cost such that Ionis receives the amount Ionis would have otherwise received under Article 6 of the 2015 License Agreement or the 2018 License Agreement, as applicable, but for such transfer or assignment. In addition, Ionis may assign or transfer its rights to receive payments under this Agreement (but, subject to any right that Akcea may have under applicable Law), without Akcea’s consent, to an Affiliate or to a Third Party in connection with a payment factoring transaction. Any assignment not in accordance with the foregoing will be void. This Services Agreement will be binding upon, and will inure to the benefit of, all permitted successors and assigns. 

		13.2	Force Majeure. No Party will be held liable or responsible to any other Party nor be deemed to have defaulted under or breached this Services Agreement for failure or reasonable delay in fulfilling or performing any term of this Services Agreement (except any payment obligation) when such failure or delay is caused by or results from causes beyond the reasonable control of the affected Party, which may include, without limitation, embargoes, acts of war (whether war be declared or not), insurrections, riots, civil commotions, acts of terrorism, strikes, lockouts or other labor disturbances, or acts of God. The affected Party will notify the other Parties of such force majeure circumstances as soon as reasonably practical and will make every reasonable effort to mitigate the effects of such force majeure circumstances.

		13.3	Notices. Except where otherwise specifically provided in this Services Agreement, all notices, requests, consents, approvals and statements will be in writing and will be deemed to have been properly given by (i) personal delivery, (ii) electronic facsimile transmission, (iii) electronic mail or by (iv) nationally recognized overnight courier service, addressed in each case, to the intended recipient as set forth below:

	
To Akcea:

	
Akcea Therapeutics Inc.

55 Cambridge Parkway, Suite 100

Cambridge, MA 02142

Attention: Chief Executive Officer

	
   

	
 

	
With a copy to:

	
Akcea Therapeutics Inc.

55 Cambridge Parkway, Suite 100

Cambridge, MA 02142

Attention: Vice President, Legal

 Email: legalnotices@akceatx.com

	
   

	
 

	
To Ionis:

	
Ionis Pharmaceuticals, Inc.

2855 Gazelle Court

Carlsbad, California 92010

 Attention: Chief Financial Officer

	
   

	
 

	
With a copy to:

	
Ionis Pharmaceuticals, Inc.

2855 Gazelle Court

Carlsbad, California 92010

Attn: General Counsel

 Email: legalnotices@ionisph.com

Such notice, request, demand, claim or other communication will be deemed to have been duly given on (a) the date of personal delivery, (b) the date actually received if by facsimile or electronic mail or (c) on the next Business Day after delivery to a nationally recognized overnight courier service, as the case may be. Any Party may change the address to which notices, requests, demands, claims and other communications hereunder are to be delivered by giving the other Party notice in the manner herein set forth.

C-8

		13.4	Relationship of the Parties. It is expressly agreed that the Parties will be independent contractors hereunder and that the relationship among the Parties under this Services Agreement will not constitute a partnership, joint venture or agency. No Party will have the authority under this Services Agreement to make any statements, representations or commitments of any kind or to take any action that will be binding on any other Party, without the prior consent of such other Party. 

		13.5	Governing Law. This Services Agreement will in all respects be governed by and construed in accordance with the substantive laws of the State of New York, without regard to its choice of law rules. 

		13.6	Dispute Resolution. Any dispute arising under this Services Agreement will be resolved in accordance with the terms of Section 13.4 of the 2018 License Agreement.

		13.7	Severability. If one or more provisions of this Services Agreement are held by a proper court or arbitral tribunal to be unenforceable under applicable law, the unenforceable portions of such provisions, or such provisions in their entirety, to the extent necessary and permitted by law, will be severed herefrom, and the balance of this Services Agreement will be enforceable in accordance with its terms. 

		13.8	Entire Agreement. Except as otherwise expressly set forth in this Services Agreement, this Services Agreement, the 2018 Investor Rights Agreement and the License Agreements constitute the entire agreement among the Parties with respect to the subject matter herein and supersede all previous agreements whether written or oral, with respect to such subject matter. Unless otherwise expressly indicated, references herein to sections, subsections, paragraphs and the like are to such items within this Services Agreement. The Parties acknowledge that this Services Agreement is being executed and delivered concurrently with the execution and delivery by the Parties and/or their Affiliates of the 2018 Investor Rights Agreement and the 2018 License Agreement. In the event of any conflict, discrepancy or inconsistency between this Services Agreement and either the applicable License Agreement or the 2018 Investor Rights Agreement, the terms of the License Agreement or the 2018 Investor Rights Agreement, as the case may be, will control.

		13.9	Amendment and Waiver. This Services Agreement may not be amended, nor any rights hereunder waived, except in a writing signed by the properly authorized representatives of each Party.

		13.10	No Implied Waivers. The waiver by a Party of a breach or default of any provision of this Services Agreement by any other Party will not be construed as a waiver of any succeeding breach of the same or any other provision, nor will any delay or omission on the part of a Party to exercise or avail itself of any right, power or privilege that it has or may have hereunder operate as a waiver of any right, power or privilege by such Party.

		13.11	Counterparts. This Services Agreement may be executed in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument, and will become effective when there exist copies hereof which, when taken together, bear the authorized signatures of each of the Parties hereto. Only one such counterpart signed by the Party against whom enforceability is sought needs to be produced to evidence the existence of this Services Agreement.

C-9

IN WITNESS WHEREOF, the Parties hereby execute this Services Agreement as of the Effective Date.

	
 

	
AKCEA THERAPEUTICS INC.

	
   

	
 

	
 

	
By: 

	
/s/ Paula Soteropoulos

	
 

	
Print Name: 

	
Paula Soteropoulos

	
 

	
Title: 

	
Chief Executive Officer

	
 

	
IONIS PHARMACEUTICALS, INC.

	
 

	
 

	
 

	
 

	
By: 

	
/s/ Stanley T. Crooke

	
 

	
Print Name: 

	
Stanley T. Crooke

	
 

	
Title: 

	
Chief Executive Officer

C-10

APPENDIX A

ALLOCATION METHODOLOGY

Akcea Support Services Assumptions

		1.	G&A

		a.	CEO 

		i.	Assumes no costs allocated to Akcea

		b.	COO 

		i.	% of effort – 5%

		ii.	Akcea pre-commercialization expenses and Goldman Sachs consulting excluded from allocations

		c.	CBO

		i.	% of effort – 6%

		1.	% of effort calculated using weighted average of salaries of individuals within this department based on time spent on Akcea activities

		2.	CBO – 3%

		3.	Patient Advocacy – 5%

		4.	Alex (25%) & Alissa (5%) – 20% - Competitive and Market Analysis

		d.	Corporate Communications

		i.	% of effort – 10%

		ii.	Costs associated with press releases, presentation development, website maintenance and update included within allocation cost base

		iii.	Initial website design is not included

		iv.	Cost associated with the Isis annual report, annual meeting, IR conference calls & webcasts, Thomson Reuters service and media consulting and investor targeting, Peter Steinerman, excluded from the allocation cost base ($613k)

		e.	Finance

		i.	% of effort – 10%

		1.	% of effort based on estimated number of FTE’s across all finance functions

		2.	Payroll – 0.2 FTE

		3.	General accounting 0.3 FTE

		4.	Tax, insurance and stock based comp – 0.1 FTE

		5.	Treasury services and other misc – 0.1 FTE

		6.	Controller – 0.15 FTE

		7.	FP&A – 0.5 FTE

		8.	CFO – 0.1 FTE

		9.	Costs associated with PCAOB, filing fees for 10K & Q’s, convertible debt, tax studies and tax returns excluded from the allocation cost base ($162k)

		f.	Human Resources

		i.	% of effort – 3%

C-A-1

		ii.	Based on overall headcount – assumed average 10 Akcea headcount for 2015

		iii.	10 / 415 = 2.4% X 7 employees = 0.17 FTE 

		iv.	Rounded to 0.2 FTE as will require slightly more effort as Akcea headcount are all new hires rather than just ongoing support

		v.	Costs associated with Isis board and executive compensation (Barney & Barney), employee events and certain office supplies excluded from allocation cost base ($390k)

		g.	Legal

		i.	% of effort – 10%

		ii.	Work includes clinical trial support & initial forming of company

		iii.	Costs associated with proxy advisors and proxy printing excluded from allocation cost base ($27k)

		h.	Occupancy costs

		i.	% of effort – 8%

		ii.	Based of FTE’s to support Akcea vs overall G&A headcount

		iii.	Cost base based on Gazelle Ct costs, including property taxes and insurance, with allocation to G&A based on square footage occupied

		iv.	Added 30% to office/cube space to allow for allocation of common space

		v.	Costs specifically related to Labs excluded from occupancy cost base (Nitrogen supplies, lab equipment service contracts, specialized lab janitorial services)

R&D Support

		a.	R&D Allocations

		i.	% of effort – 5%

		ii.	Based on FTE’s to support Akcea vs overall R&D Support headcount 

		iii.	Cost base includes D&O insurance

		iv.	Costs excluded relate to equity adjustments and promotions becuase they pertain to 2014, amortization of non-Akcea related license fees, property taxes and property insurance (allocated as part of occupancy cost) ($4.2M) 

		b.	Information technology 

		i.	% of effort - 2% 

		ii.	Includes support services and help desk support only 

		iii.	Costs excluded from allocation cost base relate to Carlsbad phone and internet services ($165k)

		c.	Alliane Management

		i.	Assumes no costs allocated to Akcea

		d.	Business Development

		i.	% of effort – 3%

		ii.	% of effort includes work on initial partner discussions, term sheets, agreement negotiations, due diligence, presentations, CDA’s

		iii.	Costs for data rooms, consulting and in-licensing excluded from allocation cost base ($137k)

C-A-2

		e.	Graphics

		i.	Assumes no costs allocated to Akcea

		f.	Purchasing

		i.	% of effort – 5%

		ii.	Work performed includes contract negotiations, set up purchasing contracts, clinical ops purchasing involvement

		iii.	All shipping and receiving costs excluded from allocation cost base ($239k)

		g.	Facilities

		i.	Assumes no costs allocated to Akcea

		h.	Patents

		i.	% of effort – 10%

		ii.	Excluded costs include patent write-off’s and patent amortization for non-lipid drugs ($1.9M)

		i.	Health & Safety

		i.	Assumes no cost allocation to Akcea

		j.	MBO Accrual – Other R&D

		i.	Costs excluded as relate to other departments

		k.	Occupancy Costs

		i.	% of effort – 4%

		ii.	Based on FTE’s to support Akcea vs overall R&D Support headcount

		iii.	Cost base based on Gazelle Ct costs, including property taxes and insurances, with allocation to R&D Support based on square footage occupied

		iv.	Added 30% to office/cube space to allow for allocation of common space

		v.	Costs specifically related to Labs excluded from occupancy cost base (Nitrogen supplies, lab equipment service contracts, specialized lab janitorial services)

C-A-3

APPENDIX B

AUDIT RIGHTS AND PROCEDURES

During the Agreement Term and for a period of 36 months thereafter, at the request and expense of Akcea, Ionis will permit an independent certified public accountant of nationally recognized standing appointed by Ionis and agreed to by Akcea (such agreement not to be unreasonably withheld), at reasonable times and upon reasonable notice, but not more than once per Calendar Year, to examine such records as are necessary to verify the calculation and reporting of out-of-pocket expenses and the correctness of any invoice submitted to Akcea for payment for Services under this Agreement. As a condition to examining any records of Ionis, such auditor will sign a nondisclosure agreement reasonably acceptable to Ionis. Any records of Ionis examined by such accountant will be deemed Ionis’ Confidential Information. Upon completion of the audit, the accounting firm will provide both Parties with a written report disclosing whether the amounts invoiced by Ionis for payment by Akcea are correct or incorrect and the specific details concerning any discrepancies (“Audit Report”). If the Audit Report shows that Ionis’ invoices under this Agreement were more than the amount that should have been invoiced, then Ionis will reimburse Akcea the difference between such amounts to eliminate any discrepancy revealed by said inspection within 30 days of receiving the Audit Report, with interest calculated under Section 6. If the Audit Report shows that Ionis’ invoiced amounts under this Agreement were less than the amount that should have been invoiced, then Akcea will reimburse Ionis equal to the difference between the amounts which should have been invoiced and the actual invoiced amount. Akcea will pay for such audit, except that if Ionis is found to have incorrectly invoiced Akcea by more than 5% of the amount that should have been invoiced, Ionis will reimburse Akcea’s reasonable costs of the audit.

C-B-1Exhibit

FIFTH AMENDMENT
THIS FIFTH AMENDMENT (this “Amendment”) is entered into as of May 4, 2018 (the “Fifth Amendment Effective Date”), by and among TIPTREE OPERATING COMPANY, LLC (the “Borrower”), the Specified Subsidiaries party hereto, FORTRESS CREDIT CORP. (“Fortress”), as Administrative Agent, Collateral Agent and Lead Arranger, and the Lenders signatory hereto.
W I T N E S S E T H:
WHEREAS, the Borrower, Fortress and the other Lenders, the Agents and the Lead Arranger are parties to that certain Credit Agreement dated as of September 18, 2013 (as amended, supplemented or otherwise modified from time to time as of immediately prior to the effectiveness of this Amendment, the “Existing Credit Agreement”; the Existing Credit Agreement, as amended by this Amendment, and as otherwise amended, supplemented or otherwise modified from time to time, the “Credit Agreement”);
WHEREAS, the Borrower has informed Fortress that it wishes to (a) pursuant to Section 2.23 of the Existing Credit Agreement, obtain Incremental Term Loan Commitments in an aggregate principal amount equal to $47,000,000 under the Credit Agreement and (b) amend the Existing Credit Agreement to provide for the Fifth Amendment Incremental Term Loans, extend the Term Loan Maturity Date to September 18, 2020 and to effect the other amendments to the Existing Credit Agreement set forth in Section 2 hereto; 
WHEREAS, the Borrower has requested that certain of the Lenders party hereto (the “Fifth Amendment Incremental Term Lenders”) make such Incremental Term Loans to the Borrower on the Fifth Amendment Effective Date, subject to the terms and conditions set forth herein; and
WHEREAS, the Fifth Amendment Incremental Term Lenders party hereto are willing to agree to this Amendment and to make such Incremental Term Loans, in each case, on the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein, the parties hereto agree as follows:
1.    Defined Terms.  Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Credit Agreement.

2.    Amendments to Existing Credit Agreement. 

(a)    The Existing Credit Agreement is, effective as of the Fifth Amendment Effective Date, hereby amended to delete the bold, stricken text (indicated textually in the same manner as the following example: stricken text) and to add the bold, double-underlined text (indicated textually in the same manner as the following example: double-underlined text) as set forth in the pages of the Credit Agreement attached as Exhibit A hereto.

	
	
	 

1

(b)    It is understood and agreed that the Lenders signatory hereto hereby consent to the changes to the Existing Credit Agreement set forth in this Amendment, which shall become effective as of the Fifth Amendment Effective Date. 

3.    Fifth Amendment Effective Date Transactions.  

(a)    Subject to Section 3(b) hereof and the terms and conditions set forth herein and in the Credit Agreement, each Fifth Amendment Incremental Term Lender agrees, severally and not jointly, to make an Incremental Term Loan to the Borrower in a single drawing on the Fifth Amendment Effective Date in the principal amount set forth opposite such Fifth Amendment Incremental Term Lender’s name on Schedule I hereto (the “Fifth Amendment Incremental Term Loan”; the commitment of each Fifth Amendment Incremental Term Lender to make such Fifth Amendment Incremental Term Loan being called its “Fifth Amendment Incremental Term Commitment”).  Amounts repaid in respect of Fifth Amendment Incremental Term Loans may not be reborrowed.

(b)    In consideration for the making of the Fifth Amendment Incremental Term Loans by the Fifth Amendment Incremental Term Lenders to Borrower, Borrower agrees that, notwithstanding anything contained herein to the contrary, the Fifth Amendment Incremental Term Loans to be made pursuant to this Amendment shall be made at a discount of 1.00%.  The funding by the Fifth Amendment Incremental Term Lenders to the Borrower of $46,530,000 on the Fifth Amendment Effective Date shall be deemed to satisfy the Fifth Amendment Incremental Term Commitments of the Fifth Amendment Incremental Term Lenders hereunder.  Notwithstanding the foregoing, the Borrowers shall repay to the Lenders the full principal amount of the Fifth Amendment Incremental Term Loans in accordance with the terms of the Credit Agreement.

(c)    Except as provided herein, the terms of the Fifth Amendment Incremental Term Loans shall be identical to those of the Term Loans outstanding immediately prior to the effectiveness of this Amendment (the “Existing Term Loans”).  

(d)    Subject to the terms and conditions set forth herein, pursuant to Section 2.23 of the Credit Agreement, and effective as of the Fifth Amendment Effective Date, for all purposes of the Credit Documents, (i) the Fifth Amendment Incremental Term Commitments shall constitute Incremental Term Loan Commitments established, and the Fifth Amendment Incremental Term Loans made hereunder shall constitute an increase in the aggregate amount of the Existing Term Loans incurred, in accordance with Section 2.23 of the Credit Agreement, (ii) the Fifth Amendment Incremental Term Commitments shall be “Commitments” under the Credit Agreement, (iii) the Fifth Amendment Incremental Term Loans made pursuant to the Fifth Amendment Incremental Term Commitments shall be “Term Loans” under the Credit Agreement, and (iv) each Fifth Amendment Incremental Term Lender shall be a “Lender” under the Credit Agreement, shall be a party to the Credit Agreement as a Lender, shall have all the rights and obligations of, and benefits accruing to, a Lender under the Credit Agreement and shall be bound by all agreements, acknowledgements and other obligations of Lenders.  

	
	
	 

2

Without limiting the foregoing, the Fifth Amendment Incremental Term Loans made hereunder shall mature on the Term Loan Maturity Date, shall participate in any mandatory or voluntary prepayments in accordance with Section 2.14(b) of the Credit Agreement, and shall bear interest at the rate specified in the Credit Agreement. 

(e)    The funding of the Fifth Amendment Incremental Term Loans to be made hereunder shall be made in the manner contemplated by Section 2.1 of the Credit Agreement.  Unless previously terminated, the Fifth Amendment Incremental Term Commitments shall terminate at 5:00 p.m., New York City time, on the Fifth Amendment Effective Date.

4.    Specified Subsidiaries.  The Specified Subsidiaries party hereto hereby agree to Section 6.3 of the Credit Agreement.

5.    Representations and Warranties.  

(a)    The Borrower hereby represents and warrants that (x) the representations and warranties made by the Borrower contained in the Credit Documents are true and correct in all material respects (without duplication of any materiality qualifier contained therein) as of the date hereof, except to the extent such representation or warranty expressly relates to an earlier date, in which case such representation and warranty is true and correct in all material respects (without duplication of any materiality qualifier contained therein) as of such earlier date and (y) after giving effect to this Amendment, no Event of Default exists;

(b)    The Borrower and each of the Specified Subsidiaries party hereto hereby represents and warrants that it is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization;
The Borrower and each of the Specified Subsidiaries party hereto hereby represents and warrants that it has the power and authority to execute, deliver and perform its obligations under this Amendment;

(c)    The Borrower and each of the Specified Subsidiaries party hereto hereby represents and warrants that the execution, delivery and performance by it of this Amendment have been duly authorized by all necessary company action;

(d)    The Borrower and each of the Specified Subsidiaries party hereto hereby represents and warrants that this Amendment constitutes the legal, valid and binding obligation of Borrower or such Specified Subsidiary, enforceable against it in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles relating to enforceability.

6.    Effectiveness.  The effectiveness of this Amendment on the Fifth Amendment Effective Date is subject to the satisfaction of the following conditions precedent:

	
	
	 

3

(a)    The Administrative Agent (or its counsel) shall have received counterparts of this Amendment that, when taken together, bear the signatures of (A) the Borrower, (B) each Specified Subsidiary party hereto, (C) each Lender, (D) each Fifth Amendment Incremental Term Lender and (E) the Administrative Agent.

(b)    The Administrative Agent (or its counsel) shall have received an executed Note to evidence each Fifth Amendment Incremental Term Lender’s Fifth Amendment Incremental Term Loan, to the extent requested by such Fifth Amendment Incremental Term Lender, at least two Business Days before the Fifth Amendment Effective Date.

(c)    The Administrative Agent shall have received an executed copy of the favorable written opinion letter of Ropes & Gray LLP, counsel for Borrower and the Specified Subsidiaries party hereto and as to such matters as Administrative Agent may reasonably request, dated as of the Fifth Amendment Effective Date and otherwise in form and substance reasonably satisfactory to Administrative Agent (and Borrower hereby instructs such counsel to deliver such opinion letter to Agents and Lenders).

(d)    The Administrative Agent shall have received such documents and certificates as the Administrative Agent or its counsel shall reasonably have requested relating to the organization, existence and good standing of the Borrower and the Specified Subsidiaries party hereto, the authorization of this Amendment and the transactions contemplated hereby and any other legal matters relating to the Borrower, the Specified Subsidiaries party hereto, the Credit Documents or the transactions contemplated hereby, all in form and substance reasonably satisfactory to the Administrative Agent and its counsel (and substantially consistent with the equivalent documents and certificates delivered by the Borrower on the Closing Date).

(e)    The Administrative Agent shall have received a certificate, dated the Fifth Amendment Effective Date and signed by the Borrower and the Specified Subsidiaries party hereto confirming compliance with the applicable representations set forth in Section 5 hereof.

(f)    The Administrative Agent shall have received a certificate, dated the Fifth Amendment Effective Date and signed on behalf of the Borrower, certifying that the conditions in Section 3.2(a)(iii) and (iv) of the Existing Credit Agreement are satisfied as of the Fifth Amendment Effective Date.

(g)    The Administrative Agent shall have received all other fees and other amounts due and payable on or prior to the Fifth Amendment Effective Date, including reimbursement or payment of all reasonable and documented out-of-pocket expenses (including reasonable fees, charges and disbursements of counsel) required to be reimbursed or paid by the Borrower under the Existing Credit Agreement or any other Credit Document.

	
	
	 

4

(h)    The Administrative Agent shall have received a written Funding Notice from the Borrower in respect of the Fifth Amendment Incremental Term Loans complying with the requirements Section 2.1(b) of the Existing Credit Agreement not later than 12:00 pm , New York City time, three Business Days before the Fifth Amendment Effective Date (or such later date as the Administrative Agent may agree).

7.    Indemnification. The terms of Section 10.3 of the Existing Credit Agreement are incorporated herein by reference, mutatis mutandis, and the parties hereto agree to such terms.  

8.    No Modification.  Except as expressly set forth herein, nothing contained herein shall be deemed to constitute a waiver of compliance with any term or condition contained in the Credit Documents or constitute a course of conduct or dealing among the parties.  Fortress reserves all rights, privileges and remedies under the Credit Documents.  Except as amended or otherwise modified hereby, the Credit Documents remain unmodified and in full force and effect.  All references in the Credit Documents to the Credit Agreement shall be deemed to be references to the Credit Agreement as amended hereby.

9.    Counterparts.  This Amendment may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.  Signature pages may be detached from multiple separate counterparts and attached to a single counterpart.  Delivery of an executed signature page of this Amendment by facsimile transmission or other electronic transmission (including email) shall be as effective as delivery of a manually executed counterpart hereof.

10.    Successors and Assigns.  The provisions of this Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

11.    Further Assurances. The terms of Section 5.13 of the Existing Credit Agreement are incorporated herein by reference, mutatis mutandis, and the parties hereto agree to such terms.  

12.    Governing Law, Submission to Jurisdiction, Waiver of Jury Trial.  The terms of Sections 10.14, 10.15 and 10.16 of the Existing Credit Agreement are incorporated herein by reference, mutatis mutandis, and the parties hereto agree to such terms.

13.    Severability.  The illegality or unenforceability of any provision of this Amendment or any instrument or agreement required hereunder shall not in any way affect or impair the legality or enforceability of the remaining provisions of this Amendment or any instrument or agreement required hereunder.
14.    Release. The Borrower, on behalf of itself and each of its heirs, successors, predecessors, agents, assigns, beneficiaries, trustees and other representatives, and any person claiming by, through, under or in concert with it, does hereby knowingly, voluntarily, unconditionally and irrevocably release, remise, acquit, satisfy, waive and forever discharge and covenant not to sue or initiate any claim or proceeding against Fortress and the Lenders of and 

	
	
	 

5

from any and all claims, demands, damages, judgments, causes of action and liabilities of any nature whatsoever (collectively, “Claims”), against Fortress and the Lenders, whether or not known, suspected or claimed, arising directly or indirectly from any act, omission, event or transaction occurring on or prior to the date hereof, including, without limitation, any Claims with respect to any modifications to the Credit Agreement made by this Amendment.

15.    Reaffirmation. The Borrower as debtor, grantor, pledgor, guarantor, assignor, or in any other similar capacity in which it has granted liens or security interests in its property or otherwise acts as accommodation party or guarantor, as the case may be, hereby (i) ratifies and reaffirms all of its payment and performance obligations, contingent or otherwise, under the Credit Documents to which it is a party (after giving effect hereto), (ii) ratifies and reaffirms that the aggregate principal amount of the Term Loans outstanding (immediately prior to the making of any Fifth Amendment Incremental Term Loan on the Fifth Amendment Effective Date) is $28,000,000 and (iii) ratifies and reaffirms the grant of security interests and liens and confirms and agrees that such security interests and liens hereafter secure all of the Obligations as amended hereby.  The execution of this Amendment shall not operate as a waiver of any right, power or remedy of Fortress or the Lenders, constitute a waiver of any provision of any of the Loan Documents or serve to effect a novation of the Obligations.

16.    Tax Reporting. All of the parties hereto agree to treat, for U.S. federal, state and local income tax purposes, (a) the Obligations as undergoing a “significant modification” (within the meaning of Treasury Regulations Section 1.1001-3(e)) as a result of this Amendment and (b) the Obligations as not qualifying as “grandfathered obligations” within the meaning of Treasury Regulations Section 1.1471-2(b)(2)(i).

[Remainder of Page Intentionally Left Blank; Signature Pages Follow]

	
	
	 

6

IN WITNESS WHEREOF, each of the undersigned has executed this Amendment as of the date set forth above.
BORROWER:

TIPTREE OPERATING COMPANY, LLC
By: /s/ Sandra Bell
Name: Sandra Bell 
Title: Chief Financial Officer
SPECIFIED SUBSIDIARIES:

CAROLINE HOLDINGS LLC
By: /s/ Sandra Bell
Name: Sandra Bell 
Title: Chief Financial Officer
TIPTREE DIRECT HOLDINGS LLC
By: /s/ Sandra Bell
Name: Sandra Bell 
Title: Chief Financial Officer
ADMINISTRATIVE AGENT:
FORTRESS CREDIT CORP.

By: /s/ Jason Meyer
Name: Jason Meyer
Title: Authorized Signatory
LENDERS:
DBDB FUNDING LLC

By: /s/ Jason Meyer
Name: Jason Meyer
Title: Chief Administrative Officer

	
			
	 
	 
	 

FORTRESS CREDIT OPPORTUNITIES VII CLO LIMITED

By: FCO VII CLO CM LLC, its collateral manager

By: /s/ Jason Meyer
Name: Jason Meyer
Title: Chief Administrative Officer
FORTRESS CREDIT OPPORTUNITIES IX CLO LIMITED

By: FCOD CLO Management LLC, its collateral manager

By: /s/ Jason Meyer
Name: Jason Meyer
Title: Authorized Signatory
FORTRESS CREDIT OPPORTUNITIES XI CLO LIMITED
By: FCOD CLO Management LLC, its collateral manager

By: /s/ Jason Meyer
Name: Jason Meyer
Title: Authorized Signatory

SCHEDULE I
Fifth Amendment Incremental Term Commitments

	
		
	Fifth Amendment Incremental Term Lender
	Fifth Amendment Incremental Term Commitment

	DBDB Funding LLC
	$4,000,000

	Fortress Credit Opportunities VII CLO Limited
	$8,162,570.37

	Fortress Credit Opportunities IX CLO Limited
	$27,023,249.95

	Fortress Credit Opportunities XI CLO Limited
	$7,814,079.68

	Total
	$47,000,000

	
			
	 
	 
	 

Signature Page to Fifth Amendment

EXHIBIT A

 “Agreement” means this Credit Agreement, dated as of September 18, 2013, as it may be amended, restated, amended and restated, supplemented or otherwise modified from time to time.
“Alternative Rate” means a rate of interest equal to the sum of (a) the per annum rate of interest announced, from time to time, within Wells Fargo Bank, N.A. at its principal office in San Francisco as its “prime rate,” with the understanding that the “prime rate” is one of Wells Fargo Bank N. A.’s base rates (not necessarily the lowest of such rates) and serves as the basis upon which effective rates of interest are calculated for those loans making reference thereto and is evidenced by the recording thereof after its announcement in such internal publications as Wells Fargo Bank, N.A. may designate; provided, however, that Administrative Agent may, upon prior written notice to Borrower, choose a reasonably comparable index or source to use as the basis for the Alternative Rate, plus (b) five and one-half percent (5.50%) per annum.  
“Applicable Margin” means (i) prior to the Fifth Amendment Effective Date, a percentage, per annum, equal to 6.50% and (ii) on and after the Fifth Amendment Effective Date, a percentage, per annum. equal to 5.50%.
“Asset Sale” means a sale, lease or sublease (as lessor or sublessor), sale and leaseback, assignment, conveyance, transfer, exclusive license or other disposition to, or any exchange of property with, any Person, in one transaction or a series of transactions, of all or any part of Borrower’s business, assets or properties of any kind (including the disposition of any equity interests directly or indirectly held by the Borrower in another Person or Subsidiary), whether real, personal, or mixed and whether tangible or intangible, whether now owned or hereafter acquired (excluding, without limitation, any sale, issuance or other disposition of Capital Stock of Borrower), other than:
(a)    dispositions of inventory, equipment or other assets in the ordinary course of business (including pursuant to bulk sales);
(b)    dispositions of used, worn-out, obsolete or surplus property and property no longer used or useful in the businesses of Borrower;
(c)    dispositions of assets that are made subject to a Capital Lease or purchase money Indebtedness within 365 days after the acquisition, construction, lease or improvement of the asset financed;
(d)    dispositions of property that constitutes a casualty event;
(e)    dispositions of cash or Cash Equivalents (or Investments that were cash or Cash Equivalents when made);
(g)    dispositions or discounts by Borrower or any of its Subsidiaries of receivables or notes receivable arising in the ordinary course of business;

ordinary course of business, issuance of Capital Stock, incurrence or amendment or other modification of any Indebtedness and non-speculative hedging transactions, in each case whether or not consummated, plus (x) any other expenses or loss from extraordinary, unusual or non-recurring items and any other non-recurring loss not to exceed 5.0% of Cash Flow for Debt Service Coverage (or such greater amount as approved by Administrative Agent) for the twelve month period most recently ended for which financial statements are available, plus (xi) consultant, advisor and director fees and expenses accrued or paid during the period to the extent permitted to be paid under the Credit Documents in an aggregate amount not to exceed $750,000 in any Fiscal Year, plus (xii) purchase accounting adjustments, plus (xiii) any contingent or deferred payments (including, without limitation, severance, retention, earn-out payments, non-compete payments and consulting payments but excluding ongoing royalty payments) in connection with any Permitted Acquisition and paid or accrued during such period, plus (xiv) payments received by Borrower or any of its Consolidated Subsidiaries from business interruption insurance, to the extent not otherwise included in Consolidated Net Income, plus (xv) losses, costs or expenses to the extent covered by insurance and actually reimbursed or with respect to which Borrower has made a determination that there exists reasonable evidence that such amount will in fact be reimbursed by the insurer and is not subject to dispute, but only to the extent that such amount is in fact reimbursed within 180 days of the date of such determination (with a deduction in the applicable future period for any amount so added back to the extent not so reimbursed within such 180 days); provided that, for the avoidance of doubt, amounts actually received in respect of such insurance shall not be included or added back in calculating Cash Flow for Debt Service Coverage nor shall any projected future losses be added back in calculating Cash Flow for Debt Service Coverage as a result of any such event (except to the extent such projected future losses exceed amounts reimbursable), plus (xvi) other non-Cash charges and non-Cash losses for such period, excluding any such non-Cash charges that constitute an accrual of or a reserve for cash charges for any future period, plus (xvii) extraordinary or non-recurring costs and expenses incurred in connection with facility consolidations, integration, closing and related costs for such period in connection with Permitted Acquisitions (including, without limitation, relocation, integration and facility opening and closings, signing, retention or completion bonuses, transactions and restructuring charges or reserves) not to exceed 5.0% of Cash Flow for Debt Service Coverage (or such greater amount as approved by Administrative Agent) for the twelve month period most recently ended for which financial statements are available, plus (xviii) charges, costs and expenses associated with the relocation or closure of facilities and costs associated with the transfer or relocation of employees in connection with a Permitted Acquisition not to exceed 5.0% of Cash Flow for Debt Service Coverage (or such greater amount as approved by Administrative Agent) for the twelve month period most recently ended for which financial statements are available, plus (xix) the amount of ordinary course dividends or other distributions actually received in Cash during such period from Excluded Subsidiaries, minus
(ii) the sum, without duplication of, (a) to the extent added back in determining such Consolidated Net Income for such period the sum, without duplication, of the amounts for such period of (i) any non-Cash items increasing Consolidated Net Income (other than the accrual of revenue or recording of receivables in the ordinary course of business or any reversal of an accrual or reserve for a potential cash item that reduced Cash Flow for Debt Service Coverage in any prior period), plus (ii) any extraordinary, unusual or non-recurring income or gains for such period, plus (b) 4125% of Taxable Income for such period.

 “CLO” means any collateralized debt obligation fund.
“Closing Date” means the date on which the iInitial Term Loans are made.
“Closing Date Certificate” means a Closing Date Certificate substantially in the form of Exhibit G‐1.
“Collateral” as defined in the Pledge and Security Agreement.  Notwithstanding anything herein to the contrary, at no time shall (i) more than 65% of the total outstanding voting Capital Stock of a CFC, and (ii) an asset of a CFC, in each case, serve as Collateral for any obligation hereunder.
“Collateral Agent” as defined in the preamble hereto.
“Collateral Documents” means the Pledge and Security Agreement, the Mortgages, if any, the Landlord Personal Property Collateral Access Agreements, if any, each Deposit Account Control Agreement, each Securities Account Control Agreement, if any, and all other instruments, documents and agreements delivered by Borrower pursuant to this Agreement or any of the other Credit Documents in order to grant to Collateral Agent, for the benefit of Secured Parties, a Lien on any real, personal or mixed property of Borrower as security for the Obligations. 
“Collateral Questionnaire” means a certificate in form reasonably satisfactory to Collateral Agent that provides information with respect to the real, personal or mixed property of Borrower and its Subsidiaries.
“Commitment” means any Term Loan Commitment or Incremental Term Loan Commitment.
“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.
“Compliance Certificate” means a Compliance Certificate substantially in the form of Exhibit C.
“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.
“Consolidated Amortization Expense” means, for any Person for any period, the amortization expense of such Person and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP (excluding any Consolidated Amortization Expense attributable to (a) Excluded Subsidiaries, (b) Variable Interest Entities and (c) Non-Wholly Owned Subsidiaries).
“Consolidated Capital Expenditures” means, for any Person for any period, the aggregate of all expenditures of such Person and its Subsidiaries during such period determined on a consolidated basis that, in accordance with GAAP, are or should be included in “purchase of 

such Lender or Administrative Agent being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by Borrower under Section 2.22) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.19, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Lender’s or Administrative Agent’s failure to comply with Section 2.19(c) and (d) any U.S. federal withholding Taxes imposed under FATCA.
“Executive Officer” means, as applied to any Person, the chief executive officer, chief financial officer or chief legal officer of such Person.
“Facility” means any real property (including all buildings, fixtures or other improvements located thereon) now, hereafter or heretofore owned, leased, operated or used by Borrower or any of its Subsidiaries or any of their respective predecessors or Affiliates.
“Fair Share Contribution Amount” as defined in Section 7.2.
“Fair Share” as defined in Section 7.2.
“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), and any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code.
“Fee Letter” means the letter agreement dated as of the Closing Date between Borrower and Administrative Agent.
“Fifth Amendment” means the Fifth Amendment to this Agreement dated as of May 4, 2018, among the Borrower, Fortress, the Lenders party thereto and the Administrative Agent.
“Fifth Amendment Effective Date” as defined in the Fifth Amendment.
 “Fifth Amendment Incremental Term Lender” as defined in the Fifth Amendment”.
“Fifth Amendment Incremental Term Loan” as defined in the Fifth Amendment. 
“Fifth Amendment Incremental Term Loan Commitment” as defined in the Fifth Amendment. 

 “Internally Generated Cash” means funds not constituting Net Asset Sale Proceeds or Net Insurance/Condemnation Proceeds.
“Investment” means (i) any direct or indirect purchase or other acquisition by Borrower or any of its Subsidiaries of, or of a beneficial interest in, any of the Securities of any other Person; (ii) any direct or indirect redemption, retirement, purchase or other acquisition for value, by Borrower or any of its Subsidiaries from any Person of any Capital Stock of such Person; and (iii) any direct or indirect loan, advance (other than advances to employees for moving, entertainment and travel expenses, drawing accounts and similar expenditures in the ordinary course of business) or capital contributions by Borrower to any other Person, including all indebtedness and accounts receivable from that other Person that are not current assets or did not arise from sales to that other Person in the ordinary course of business.  The amount of any Investment shall be the original cost of such Investment plus the cost of all additions thereto, without any adjustments for increases or decreases in value, or write‐ups, write‐downs or write‐offs with respect to such Investment, but giving effect to any Returns with respect thereto.
“Invesque Capital Stock” means Capital Stock of Invesque Inc.
“Joint Venture” means a joint venture, partnership or other similar arrangement, whether in corporate, partnership or other legal form; provided, that in no event shall any corporate Subsidiary of any Person be considered to be a Joint Venture to which such Person is a party.
“Landlord Personal Property Collateral Access Agreement” means a Landlord Personal Property Collateral Access Agreement in form and substance reasonably satisfactory to Collateral Agent.
“Lead Arranger” as defined in the preamble hereto.
“Leasehold Property” means any leasehold interest of Borrower as lessee under any lease of real property, other than any such leasehold interest designated from time to time by Collateral Agent in its sole discretion as not being required to be included in the Collateral.
“Lender” means each financial institution listed on the signature pages hereto as a Lender, each Fifth Amendment Incremental Term Lender and any other Person that becomes a party hereto pursuant to an Assignment Agreement.
“Lender Counterparty” means each Lender or any Affiliate of a Lender counterparty to an Interest Rate Agreement (including any Person who is a Lender (and any Affiliate thereof) as of the time of entering into an Interest Rate Agreement but subsequently, ceases to be a Lender) including, without limitation, each such Affiliate that enters into a joinder agreement with Collateral Agent.
“Leverage Ratio” means, for any period, the percentage obtained by dividing (i) the aggregate principal amount of the Term Loan outstanding as of the last day of such period by (ii) the sum of (a) the aggregate principal amount of the Term Loan outstanding as of the last day of such period plus (b) Borrower’s Adjusted Economic Partnership Capital, in each case as shown on 

Borrower’s unconsolidated financial statements most recently delivered pursuant to Section 5.1, expressed as a percentage.
 “NAIC” means The National Association of Insurance Commissioners, and any successor thereto.
“Narrative Report” means, with respect to the financial statements for which such narrative report is required, a narrative report describing the operations of TFI and its Subsidiaries in the form prepared for presentation to senior management thereof for the applicable Fiscal Quarter or Fiscal Year and for the period from the beginning of the then current Fiscal Year to the end of such period to which such financial statements relate with comparison to and variances from the corresponding period of the prior Fiscal Year.
“Net Asset Sale Proceeds” means, with respect to (x) any Asset Sale by the Borrower or (y) an Asset Sale of Invesque Capital Stock by a Specified Subsidiary, an amount equal to:  (i) Cash or Cash Equivalents received by Borrower from such Asset Sale (including any Cash or Cash Equivalents received by way of monetization of Designated Non-Cash Consideration, but only as and when received), minus (ii) the sum of (a) any bona fide reasonable direct costs and expenses incurred in connection with such Asset Sale (including sales commissions, brokerage, consultant, advisor, legal, accounting and investment banking fees and other professional fees, costs and expenses, survey costs, title insurance premiums, related search and recording charges, sales, transfer or other similar taxes, deed or mortgage recording taxes); provided, that any such fees, costs and expenses payable to any Affiliate of Borrower may not exceed the amount of fees, cost and expenses that might reasonably be payable at the time to a Person who is not an Affiliate, (b) taxes on the Cash or Cash Equivalents payments received by Borrower from such Asset Sale, determined by applying the highest combined income Tax rate (including all applicable Federal, state and local income Tax rates) applicable to an individual living in New York City subject to the highest federal, state and local income taxes; provided, that such taxes on the Cash or Cash Equivalents payments received by Borrower from such Asset Sale shall not exceed the Permitted Tax Distributions permitted under Section 6.5(e) and payable in Cash with respect to the applicable Tax period in which such Cash or Cash Equivalents payments are included in income for income Tax purposes, (c) payment of the outstanding principal amount of, premium or penalty, if any, and interest on any Indebtedness (other than the Loans) that is secured by a Lien on the Capital Stock or assets in question and that is required to be repaid under the terms thereof as a result of such Asset Sale, and (d) a reasonable reserve for any indemnification payments (fixed or contingent) attributable to seller’s indemnities and representations and warranties to purchaser in respect of such Asset Sale undertaken by Borrower in connection with such Asset Sale; provided that upon release of any such reserve, the amount released shall be considered Net Asset Sale Proceeds.
“Net Insurance/Condemnation Proceeds” means an amount equal to:  (i) any Cash or Cash Equivalents received by Borrower (a) under any casualty insurance policy in respect of any covered loss thereunder, or (b) as a result of the taking of any assets of Borrower by any Person pursuant to the power of eminent domain, condemnation or otherwise, or pursuant to a sale of any such assets to a purchaser with such power under threat of such a taking, minus (ii) the sum of (a) any actual and reasonable costs incurred by Borrower in connection with the adjustment or settlement 

of any claims of Borrower in respect thereof, (b) any bona fide direct costs incurred in connection with collecting such claim as referred to in clause (i)(a) of this definition or any taking of such assets as referred to in clause (i)(b) of this definition, including in each case consultant, advisor, legal, accounting and other professional fees, costs and expenses, sales, transfer or other 
“Permitted Tax Distributions” means, so long as Borrower is treated as a partnership for U.S. federal income Tax purposes, distributions in an aggregate amount equal to (i) the aggregate income Taxes, determined by applying the highest combined income Tax rate (including all applicable Federal, state and local income Tax rates, and taking into account the deductibility (including applicable limitations on deductibility) of state and local income Taxes for federal income Tax purposes) applicable to an individual living in New York City subject to the highest federal, state and local income taxes in respect of the taxable income of Borrower (and its Subsidiaries) on a quarterly basis as any such income Taxes would be required to be paid for any taxable period (and, without duplication, after the end of such taxable year after a final determination of the amount of income Taxes for such year determined pursuant to this clause (i) based on the same assumptions above), plus (ii) the sum of all amounts that Borrower was permitted to distribute in prior tax periods pursuant to clause (i) of this definition that were not in fact distributed in any prior tax period as a result of applicable law prohibiting or restricting such distribution.
“Person” means and includes natural persons, corporations, limited partnerships, general partnerships, limited liability companies, limited liability partnerships, joint stock companies, Joint Ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other organizations, whether or not legal entities, and Governmental Authorities.
“Phase I Report” means, with respect to any Facility, a report that conforms to the ASTM Standard Practice for Environmental Site Assessments:  Phase I Environmental Site Assessment Process, E 1527.
“Pledge and Security Agreement” means the Pledge and Security Agreement to be executed by Borrower substantially in the form of Exhibit H, as it may be amended, restated, amended and restated, supplemented or otherwise modified from time to time.
“Prepayment Premium” shall mean, in connection with (a) any Repricing Transaction or (b) any mandatory prepayment of Term Loans pursuant to Section 2.13(d), a premium (expressed as a percentage of the principal amount of such Loans to be prepaid or Commitments terminated) equal to the amount set forth below: 

		
	(i) 
	on or before the first anniversary of the Closing Date, three percent (3.00%); 

		
	(ii)
	after the first anniversary of the Closing Date but on or before the second anniversary of the Closing Date, two percent (2.00%); and 

  (iii)    thereafter, zero percent (0.00%).

“Principal Office” means, for Administrative Agent, Administrative Agent’s “Principal Office” as set forth on Appendix B, or such other office as such Person may from time to time designate in writing to Borrower and each Lender; provided, however, that for the purpose of making any payment on the Obligations or any other amount due hereunder or any other Credit Document, the Principal Office of Administrative Agent shall be 1345 Avenue of the Americas, 46th Floor, New York, New York 10105 (or such other location within the City and State of New 
options, warrants, bonds, debentures, notes, or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as “securities” or any certificates of interest, shares or participations in temporary or interim certificates for the purchase or acquisition of, or any right to subscribe to, purchase or acquire, any of the foregoing. 
“Securities Account” has the meaning given to such term by Section 8‐501 of the UCC. 
“Securities Account Control Agreement” means any securities account control agreement delivered pursuant to Section 4.4.4(c) of the Pledge and Security Agreement, duly executed by the parties named therein and in form and substance reasonably satisfactory to Administrative Agent. 
“Securities Act” means the Securities Act of 1933, as amended from time to time, and any successor statute.
“Solvency Certificate” means a Solvency Certificate of the chief financial officer of Borrower substantially in the form of Exhibit G‐2.
“Solvent” means, with respect to Person, that as of the date of determination, both (i)(a) the sum of such Person’s debt (including contingent liabilities) does not exceed the present fair saleable value of such Person’s present assets; (b) such Person’s capital is not unreasonably small in relation to its business as contemplated on the Closing Date and reflected in the Projections or with respect to any transaction contemplated or undertaken after the Closing Date; and (c) such Person has not incurred and does not intend to incur, or believe (nor should it reasonably believe) that it will incur, debts beyond its ability to pay such debts as they become due (whether at maturity or otherwise); and (ii) such Person is “solvent” within the meaning given that term and similar terms under applicable laws relating to fraudulent transfers and conveyances.  For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability (irrespective of whether such contingent liabilities meet the criteria for accrual under Financial Accounting Standards Board Accounting Standards Codification Topic 450 (Contingencies)).
“Specified Investment” means any investment by Borrower or any Subsidiary to the extent financed with net cash proceeds received from the issuance of Capital Stock by, or capital contributions made to, TFI after the Closing Date, provided that (i) Administrative Agent receives written notice describing such Investment concurrently with or promptly following the issuance of 

such Capital Stock or the making of such capital contributions and (ii) such Investment is made within 90 days of receipt by TFI of such net cash proceeds.
“Specified Subsidiaries” means Tiptree Direct Holdings LLC, Caroline Holdings LLC and any other Subsidiary of the Borrower that owns Invesque Capital Stock, other than Fortegra Financial Corporation (or any of its Subsidiaries). 
“Subordinated Indebtedness” means any Indebtedness of Borrower acceptable to Administrative Agent (in its sole discretion) that is expressly subordinated to the Obligations as to right and time of payment pursuant to a subordination agreement in form and substance reasonably satisfactory to Administrative Agent.
“Subsidiary” means, with respect to any Person, any corporation, partnership, limited liability company, association, Joint Venture or other business entity of which more than fifty percent (50%) of the total voting power of shares of stock or other ownership interests entitled (without regard to the occurrence of any contingency) to vote in the election of the Person or Persons (whether directors, managers, trustees or other Persons performing similar functions) having the power to direct or cause the direction of the management and policies thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof; provided that, in determining the percentage of ownership interests of any Person controlled by another Person, no ownership interest in the nature of a “qualifying share” of the former Person shall be deemed to be outstanding.
“Swap Obligation” means, with respect to any Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.
“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Tax Return” as defined in Section 4.12.
“Taxable Income” means for any period, an amount determined for Borrower and its Subsidiaries on a consolidated basis equal to:
(i)    the sum, without duplication, of the amounts for such period of (a) Consolidated Net Income, plus (b) the current portion of current and deferred taxes based on income of Borrower and its Subsidiaries and payable in Cash with respect to such period and plus (c) Consolidated Amortization Expense of TAMCO Manager, Inc. and its Subsidiaries for such period, minus
(ii) the sum, without duplication, of the amounts for such period of (a) Consolidated Net Income attributable to Philadelphia Financial Group, Inc., plus (b) Consolidated Net Income attributable to any tax-exempt Subsidiary of Borrower or any tax-exempt Investment of Borrower 

and its Subsidiaries, plus (c) income from previously charged and unrealized Consolidated Depreciation Expense and Consolidated Amortization Expense recognized in such period.
“Term Loan” means an Initial Term Loan and an, a Fifth Amendment Incremental Term Loan and any other Incremental Term Loan and “Term Loans” means the Initial Term Loans, the Fifth Amendment Incremental Term Loans and the other Incremental Term Loans, collectively.
“Term Loan Commitment” means an Initial Term Loan Commitment and an, a Fifth Amendment Incremental Term Loan Commitment and any other Incremental Term Loan Commitment, and “Term Loan Commitments” means the Initial Term Loan Commitment  and any, the Fifth Amendment Incremental Term Loan Commitments and any other Incremental Term Loan Commitments, collectively.
“Term Loan Exposure” means, with respect to any Lender, as of any date of determination, the sum of (i) the outstanding principal amount of the Term Loans of such Lender and (ii) the unused Term Loan Commitment of such Lender.
“Term Loan Maturity Date” means the earlier of (i) September 18, 201820, and (ii) the date that all Term Loans shall become due and payable in full hereunder, whether by acceleration or otherwise.
“Term Loan Note” means a promissory note in the form of Exhibit B, as it may be amended, restated, supplemented or otherwise modified from time to time.
“Terminated Lender” as defined in Section 2.22.
“TFI” means Tiptree Financial Inc., a Delaware corporation.
“TFP” means Tiptree Financial Partners, L.P., a Delaware limited partnership.
“Transaction Costs” means the fees, costs and expenses payable by Borrower on or before the Closing Date in connection with the transactions contemplated by the Credit Documents.
“UCC” means the Uniform Commercial Code (or any similar or equivalent legislation) as in effect in any applicable jurisdiction.
“Unrestricted Cash” means, with respect to any Person(s) as of any date of determination (i) Cash or Cash Equivalents on hand of such Person(s), minus, (ii) the sum of any amounts held by the issuer of a bond or letter of credit to cash collateralize the obligations of Borrower with respect to such bond or letter of credit and (d) any other Cash or Cash Equivalents of such Person(s) that have been pledged to a third party (other than pursuant to the Credit Documents). 
“U.S. Tax Compliance Certificate” has the meaning given to such term in Section 2.19(c), the substantial form of which is attached as Exhibit F.

“Variable Interest Entities” means any corporation, partnership, limited partnership, limited liability company, limited liability partnership or other entity the accounts of which would be required to be consolidated with those of Borrower in Borrower’s consolidated financial statements if such financial statements were prepared in accordance with GAAP solely because of the application of ASC 810.
“Wholly Owned Subsidiary” means a Subsidiary of Borrower, all of the Capital Stock of which (other than directors’ qualifying shares) is owned directly or indirectly by Borrower.
the proceeds of all such Term Loans received by Administrative Agent from Lenders to be credited to the account of Borrower at Administrative Agent’s Principal Office or such other account as may be designated in writing to Administrative Agent by Borrower.
2.2.    [Intentionally Reserved.]
2.3.    [Intentionally Reserved.]
2.4.    Pro Rata Shares; Availability of Funds.  
(a)    Pro Rata Shares.  All Loans shall be made by Lenders simultaneously and proportionately to their respective Pro Rata Shares, it being understood that no Lender shall be responsible for any default by any other Lender in such other Lender’s obligation to make a Loan requested hereunder or purchase a participation required hereby nor shall any Commitment of any Lender be increased or decreased as a result of a default by any other Lender in such other Lender’s obligation to make a Loan requested hereunder or purchase a participation required hereby.
(b)    Availability of Funds.  Unless Administrative Agent shall have been notified by any Lender prior to the applicable Credit Date that such Lender does not intend to make available to Administrative Agent the amount of such Lender’s Loan requested on such Credit Date, Administrative Agent may assume that such Lender has made such amount available to Administrative Agent on such Credit Date and Administrative Agent may, in its sole discretion, but shall not be obligated to, make available to Borrower a corresponding amount on such Credit Date.  If such corresponding amount is not in fact made available to Administrative Agent by such Lender, Administrative Agent shall be entitled to recover such corresponding amount on demand from such Lender together with interest thereon, for each day from such Credit Date until the date such amount is paid to Administrative Agent, at the customary rate set by Administrative Agent for the correction of errors among banks for three (3) Business Days and thereafter at the Alternative Rate.  If such Lender does not pay such corresponding amount forthwith upon Administrative Agent’s demand therefor, Administrative Agent shall promptly notify Borrower and Borrower shall immediately pay such corresponding amount to Administrative Agent together with interest thereon, for each day from such Credit Date until the date such amount is paid to Administrative Agent, at the Alternative Rate.  Nothing in this Section 2.4(b) shall be deemed to relieve any Lender from its obligation to fulfill its Commitments hereunder or to prejudice any rights that Borrower may have against any Lender as a result of any default by such Lender hereunder.

2.5.    Use of Proceeds.  The proceeds of the Term Loans made on the Closing Date shall be used by Borrower (i) for general corporate purposes of Borrower (including, without limitation, working capital, Permitted Acquisitions and other Investments not prohibited by this Agreement) and (ii) to pay Transaction Costs. The proceeds of the Term Loans made after the Closing Date (including the Fifth Amendment Incremental Term Loans made on the Fifth Amendment Effective Date) shall be applied by Borrower for general corporate purposes of Borrower (including, without limitation, working capital, Permitted Acquisitions and other Investments not prohibited by this Agreement); provided that the proceeds of any Term Loans shall not be used to fund any extraordinary dividends or distributions to holders of any Capital Stock of Borrower.  No portion of the proceeds of any Credit Extension shall be used in any manner that causes such Credit to the Loans for which an interest rate is then being determined for the applicable Interest Period and shall promptly give notice thereof (in writing or by telephone confirmed in writing) to Borrower and each Lender.
(d)    Interest payable pursuant to Section 2.7(a) shall be computed (i) in the case of Alternative Rate Loans, on the basis of a 365-day or 366-day year, as the case may be, and (ii) in the case of LIBO Rate Loans, on the basis of a 360‐day year, in each case for the actual number of days elapsed in the period during which it accrues.  In computing interest on any Loan, the date of the making of such Loan or the first day of an Interest Period applicable to such Loan shall be included, and the date of payment of such Loan or the expiration date of an Interest Period applicable to such Loan shall be excluded; provided, if a Loan is repaid on the same day on which it is made, one day’s interest shall be paid on that Loan.
(e)    Except as otherwise set forth herein, interest on each Loan shall be payable in arrears (i) on each Interest Payment Date applicable to that Loan; (ii) upon any prepayment of that Loan, whether voluntary or mandatory, to the extent accrued on the amount being prepaid; and (iii) at maturity, including final maturity.  
2.8.    [Intentionally Reserved.]
2.9.    Default Interest.  Automatically upon the occurrence and during the continuance of an Event of Default under Section 8.1(a), 8.1(f) or 8.1(g) or upon the occurrence and during the continuance of any Event of Default other than under Section 8.1(a), 8.1(f) or 8.1(g), at the written request of the Requisite Lenders, the principal amount of all Loans outstanding and, to the extent permitted by applicable law, any interest payments on the Loans or any fees or other amounts owed hereunder, shall thereafter bear interest (including post‐petition interest in any proceeding under the Bankruptcy Code or other applicable bankruptcy laws) payable on demand at a rate that is three percent (3.00%) per annum in excess of the interest rate otherwise payable hereunder with respect to the applicable Loans (or, in the case of any such fees and other amounts, at a rate which is three percent (3.00%) per annum in excess of the interest rate otherwise payable hereunder).  Payment or acceptance of the increased rates of interest provided for in this Section 2.9 is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of Administrative Agent or any Lender.
2.10.    Fees.  Borrower agrees to pay to Agents such other fees in the amounts and at the times separately agreed upon in the Fee Letter and all such fees described in the Fee Letter constitute 

part of the Obligations.  All fees described in the Fee Letter shall be deemed earned in full on the date when the same are due and payable thereunder and shall not be subject to rebate or proration upon termination of this Agreement for any reason.
2.11.    Scheduled Payments.  The principal amounts of the Initial Term Loans shall be repaid in consecutive quarterly installments (each, an “Installment”) on the last day of each Fiscal Quarter (each, an “Installment Date”), commencing December 31, 2013.  For the Fiscal Quarter ending December 31, 2013, the installment amount shall be one percent (1.00%) of the original principal amount of the aggregate Initial Term Loan Commitments.  Thereafter, such installments shall be in the respective amounts set forth below:
	
			
	Fiscal Quarter Ending
	Installment Amount if Net Leverage Ratio was less than or equal to 35% as of end of immediately preceding Fiscal Quarter
	Installment Amount if Net Leverage Ratio was greater than 35% as of end of immediately preceding Fiscal Quarter

	December 31, 2013, March 31, 2014 and June 30, 2014
	1.00% of the principal amount of the original aggregate Initial Term Loan Commitments
	1.00% of the principal amount of the original aggregate Initial Term Loan Commitments

	September 30, 2014
	1.00% of the principal amount of the original aggregate Initial Term Loan Commitments
	1.50% of the principal amount of the original aggregate Initial Term Loan Commitments

	December 31, 2014
	1.00% of the principal amount of the original aggregate Initial Term Loan Commitments
	2.00% of the principal amount of the original aggregate Initial Term Loan Commitments

	March 31, 2016 and each Fiscal Quarter ending thereafter
	1.00% of the principal amount of the original aggregate Initial Term Loan Commitments
	2.50% of the principal amount of the original aggregate Initial Term Loan Commitments

	Term Loan Maturity Date
	All remaining principal, interest and charges with respect to the Term Loans

The principal amount of the Fourth Amendment Incremental Term Loans shall be repaid in consecutive quarterly Installments on each Installment Date, commencing June 30, 2016 in an amount equal to 1.00% of the principal amount of the aggregate Fourth Amendment Incremental Term Loan Commitments (or, if the Net Leverage Ratio was greater than 35% as of end of immediately preceding Fiscal Quarter, 2.50% of the principal amount of the aggregate Fourth Amendment Incremental Term Loan Commitments).
The principal amount of the Fifth Amendment Incremental Term Loans shall be repaid in consecutive quarterly Installments on each Installment Date, commencing June 30, 2018 in an amount equal to 1.00% of the principal amount of the aggregate Fifth Amendment Incremental Term Loan Commitments (or, if the Net Leverage Ratio was greater than 35% 

as of end of immediately preceding Fiscal Quarter, 2.50% of the principal amount of the aggregate Fifth Amendment Incremental Term Loan Commitments).
Notwithstanding the foregoing, (x) such Installments shall be reduced in connection with any voluntary or mandatory prepayments of the Term Loans in accordance with Sections 2.12 and 2.13, as applicable; and (y) the Term Loans, together with all other amounts owed hereunder with respect thereto, shall, in any event, be paid in full no later than the Term Loan Maturity Date.
2.12.    Voluntary Prepayments/Commitment Reductions.  
(a)    Voluntary Prepayments.  
(i)    Any time and from time to time, Borrower may prepay any such Loans on any Business Day in whole or in part (together with any amounts due pursuant to Sections 2.12(a)(iii) and 2.17(c)) in an aggregate minimum amount of $500,000 and integral multiples of $250,000 in excess of that amount (or, in each case if less, the entire amount of such Loan).
(ii)    All such prepayments shall be made upon not less than three (3) Business Days’ prior written or telephonic notice, given to Administrative Agent by 12:00 p.m. on the date required and, if given by telephone, promptly confirmed in writing to Administrative Agent (and Administrative Agent will promptly transmit such telephonic or original notice by telefacsimile or telephone to each Lender).  Upon the giving of any such notice, the principal amount of the Loans specified in such notice shall become due and payable on the prepayment date specified therein, provided that a notice of prepayment may be conditioned upon the closing of a replacement credit facility, other financing facility, merger or acquisition and may be revoked or delayed by Borrower if such replacement credit facility, other financing facility, merger or acquisition does not close and fund.  Any such voluntary prepayment shall be applied as specified in Section 2.14(b).
(iii)     Prepayment Premium. Borrower shall pay the applicable Prepayment Premium in In connection with (1) any voluntary prepayments of Term Loans made pursuant to this Section 2.12 or mandatory prepayments of Term Loans required to be made pursuant to Section 2.13(d) or (2) any Repricing Transaction (it being understood that in ), in each case prior to the six month anniversary of the event that Borrower (x) makes any prepayment of Term Loans in connection with any Repricing Transaction,Fifth Amendment Effective Date (whether before or (y) effects any amendment of this Agreement resulting in a Repricing Transaction,after acceleration of the Obligations or the commencement of any bankruptcy or insolvency proceeding), Borrower shall pay to the Administrative Agent, for the account of each of the applicable Term Lenders, (I) in the case of clause (x),a premium (expressed as a Prepayment Premiumpercentage of the principal amount of such Term Loans to be prepaid) equal to 1.00% with respect to the amount of the Term Loans being so prepaid and (II) in the case of clause (y), a payment equal to the Prepayment Premium with respect to the aggregate amount of the applicable Term Loans outstanding immediately prior to such amendment) and held by Lenders who 

did not consent to such amendment (such Lenders, “Non-Participating Lenders”) for distribution on a pro rata basis to such Non-Participating Lenders; provided, that no Prepayment Premium shall be payable in connection with any Repricing Transaction that occurs within six months of the date that Borrower receives notice from Administrative Agent that the Loans shall bear interest at the Alternative Rate.

(b)     [Intentionally Reserved.]  
2.13.    Mandatory Prepayments/Commitment Reductions.
(a)    Asset Sales.  
(i)  No later than five Business Days following the date of receipt (x) by Borrower of any Net Asset Sale Proceeds or (y) by the Borrower or any Subsidiary of any Net Asset Sale Proceeds from the sale of any Invesque Capital Stock, other than Net Asset Sale Proceeds that do not exceed $250,000 in the aggregate for all Asset Sales during the prior Fiscal Year, Borrower shall prepay the Loans and/or the Commitments shall be permanently reduced as set forth in Section 2.14(b) in an aggregate amount equal to such Net Asset Sale Proceeds; provided that no such prepayment shall be required pursuant to this Section 2.13(a) with respect to such portion of any Net Asset Sale Proceeds that Borrower shall have given written notice to the Administrative Agent on or prior the fifth Business Day following its receipt of such Net Asset Sale Proceeds of its intention to reinvest or cause to be reinvested all or a portion of such Net Asset Sale Proceeds in accordance with Section 2.13(a)(ii) (which election may only be made if no Event of Default has occurred and is then continuing); provided, further that any Net Asset Sale Proceeds that are received by way of monetization of Designated Non-Cash Consideration shall be deemed received by Borrower for purposes of the notification about reinvesment when such Designated Non-Cash Consideration was received.
(ii)  With respect to any Net Asset Sale Proceeds realized or received with respect to any Asset Sale (other than any Net Asset Sale Proceeds specifically excluded from the application of Section 2.13(a)(i)), at the option of Borrower, Borrower may, directly or through one or more of its Subsidiaries, reinvest or cause to be reinvested all or any portion of such Net Asset Sale Proceeds in assets useful for such Person’s business within (x) twelve (12) months following receipt of such Net Asset Sale Proceeds or (y) if Borrower enters into a legally binding commitment to reinvest such Net Asset Sale Proceeds within twelve (12) months following receipt thereof, within one hundred eighty (180) days of the date of such legally binding commitment (provided that this clause (y) shall not operate to reduce the timeframe for reinvestment from a minimum of twelve (12) months and provided, further, that any Net Asset Sale Proceeds shall be held in an account subject to a Deposit Account Control Agreement pending such application) and (ii) if any Net Asset Sale Proceeds are not so reinvested within such reinvestment period or are no longer intended to be or cannot be so reinvested at any time after delivery of a notice of reinvestment election, an amount equal to any such Net Asset Sale Proceeds shall be promptly applied to the prepayment of the Loans as set forth in this Section 2.13. 

(b)    Insurance/Condemnation Proceeds.  
(i)    No later than five Business Days following the date of receipt by Borrower, or Administrative Agent as loss payee, of any Net Insurance/Condemnation Proceeds in excess of $500,000, Borrower shall prepay the Loans and/or the Commitments shall be permanently reduced as set forth in Section 2.14(b) in an aggregate amount equal to such Net Insurance/Condemnation Proceeds; provided that no such prepayment shall be 
under this Section 2.21 are in addition to other rights and remedies which Borrower may have against such Defaulting Lender with respect to any Funding Default and which Administrative Agent or any Lender may have against such Defaulting Lender with respect to any Funding Default or violation of Section 9.5(c).
2.22.  Removal or Replacement of a Lender.  Anything contained herein to the contrary notwithstanding, in the event that:  (c) (i) any Lender (an “Increased-Cost Lender”) shall give notice to Borrower that such Lender is an Affected Lender or that such Lender is entitled to receive payments under Section 2.17(b), 2.18, 2.19 or 2.20, (ii) the circumstances which have caused such Lender to be an Affected Lender or which entitle such Lender to receive such payments shall remain in effect, and (iii) such Lender shall fail to withdraw such notice within five (5) Business Days after Borrower’s request for such withdrawal; or (d) (i) any Lender shall become a Defaulting Lender, (ii) the Default Period for such Defaulting Lender shall remain in effect, and (iii) such Defaulting Lender shall fail to cure the default as a result of which it has become a Defaulting Lender within five Business Days after Borrower’s request that it cure such default; or (e) in connection with any proposed amendment, modification, termination, waiver or consent with respect to any of the provisions hereof as contemplated by Section 10.5(b), the consent of Requisite Lenders shall have been obtained but the consent of one or more of such other Lenders (each a “Non‐Consenting Lender”) whose consent is required shall not have been obtained; then, with respect to each such Increased-Cost Lender, Defaulting Lender or Non‐Consenting Lender (the “Terminated Lender”), Borrower may, by giving written notice to Administrative Agent and any Terminated Lender of its election to do so, elect to cause such Terminated Lender (and such Terminated Lender hereby irrevocably agrees) to assign its outstanding Loans and its Commitments, if any, in full to one or more Eligible Assignees (each a “Replacement Lender”) in accordance with the provisions of Section 10.6 and Terminated Lender shall pay any fees payable thereunder in connection with such assignment; provided, (1) on the date of such assignment, the Replacement Lender shall pay to Terminated Lender an amount equal to the sum of (A) an amount equal to the principal of, and all accrued interest on, (including any amount due pursuant to Section 2.12(a)(iii)), all outstanding Loans of the Terminated Lender (except in the case of a Defaulting Lender, such Defaulting Lender shall not receive its share of fees payable hereunder with respect to the Default Period), and (B) an amount equal to all accrued but theretofore unpaid fees owing to such Terminated Lender pursuant to Section 2.10 (except in the case of a Defaulting Lender, such Defaulting Lender shall not receive its share of fees payable hereunder with respect to the Default Period); (2) on the date of such assignment, Borrower shall pay any amounts payable to such Terminated Lender pursuant to Section 2.18 or 2.19; (3) in the case of any such assignment resulting from a claim for compensation under Section 2.18 or payments required to be made pursuant to Section 2.19, such assignment will result in a reduction in such compensation or payments thereafter, and (4) in the event such 

Terminated Lender is a Non‐Consenting Lender, each Replacement Lender shall consent, at the time of such assignment, to each matter in respect of which such Terminated Lender was a Non‐Consenting Lender.  Upon the prepayment of all amounts owing to any Terminated Lender and the termination of such Terminated Lender’s Commitments, if any, such Terminated Lender shall no longer constitute a “Lender” for purposes hereof; provided, any rights of such Terminated Lender to indemnification hereunder shall survive as to such Terminated Lender.
2.23.    Incremental Credit Extensions. 
(a)  Borrower Request.  Borrower may at any time after the ClosingFifth Amendment Effective Date, by written notice to the Administrative Agent elect to request the establishment of one or more new Term Loan Commitments (each, an “Incremental Term Loan Commitment”) in a minimum amount of at least $10,000,000 and in integral multiples of $5,000,000 in excess thereof, and up to a maximum aggregate principal amount of $125,000,0000.  Each such notice shall specify (i) the date (each, an “Increase Effective Date”) on which Borrower proposes that such Incremental Term Loan Commitment shall be effective, which shall be a date not less than 10 Business Days after the date on which such notice is delivered to the Administrative Agent and (ii) the identity of each person to whom Borrower proposes any portion of such Commitment Increase be allocated and the amounts of such allocations; provided, that (1) Borrower shall first seek Incremental Term Loan Commitments from the existing Lenders (provided, further that none of the existing Lenders will be required to provide any Incremental Term Loan Commitments, and any decision whether or not to do so by any such Lender shall be made at the sole discretion of such Lender) and (2) if such existing Lenders decline to provide within a reasonable period of time (in any event, not to exceed ten Business Days) following such request all or a portion of such Commitment Increases on terms acceptable to Borrower, then Borrower may seek commitments therefor from other Eligible Assignees (an “Additional Lender”); provided, that the Administrative Agent shall have consented (not to be unreasonably withheld, delayed or conditioned) to such Additional Lender’s making such Incremental Term Loans if such consent would be required under Section 10.6 for an assignment of Loans, as applicable, to such Additional Lender. 
(b)  Conditions.  Each Incremental Term Loan Commitment shall become effective as of such Increase Effective Date; provided, that:
(i)    each of the conditions set forth in Section 3.2 shall be satisfied; and
(ii)    Borrower shall deliver or cause to be delivered any legal opinions or other documents reasonably requested by the Lenders providing such Commitment Increases in connection with any such transaction.
(c)  Terms of Incremental Term Loan Commitments.  The terms and provisions of each Incremental Term Loan Commitment shall be as follows:
(i)  terms and provisions of Loans made pursuant to Incremental Term Loan Commitments (“Incremental Term Loans”) shall be, except as otherwise set forth herein, 

identical to the Term Loans (it being understood that Incremental Term Loans may be part of an existing tranche of Term Loans);
(ii)  the weighted average life to maturity of all Incremental Term Loans shall be no shorter than the weighted average life to maturity of the existing Term Loans;
(iii)  the maturity date of Incremental Term Loans shall not be earlier than the Term Loan Maturity Date; and
6.3.  [Intentionally Reserved].
6.3.    Invesque Shares. 
(a)    Borrower and the Specified Subsidiaries shall not: (x) create, incur, assume or permit to exist any consensual Lien on the Invesque Capital Stock or (y) sell, assign, convey or otherwise transfer the Invesque Capital Stock to (i) any Subsidiary that has outstanding Indebtedness (other than intercompany Indebtedness of Caroline Holdings LLC to Reliance First Capital LLC in an aggregate principal amount not to exceed $10,000,000), (ii) to any Subsidiary that is a Non-Wholly Owned Subsidiary or (iii) to Fortegra Financial Corporation or any of its Subsidiaries.
(b)    Borrower shall cause the Specified Subsidiaries not to, and the Specified Subsidiaries agree not to, create, incur, assume or guaranty, or otherwise become or remain liable with respect to any Indebtedness (other than intercompany Indebtedness of Caroline Holdings LLC to Reliance First Capital LLC in an aggregate principal amount not to exceed $10,000,000).
(c)    Borrower shall cause the Specified Subsidiaries not to, and the Specified Subsidiaries agree not to, amend or permit any amendments to their respective Organizational Documents, if such amendment would be adverse to the Administrative Agent or the Lenders in any material respect.
(d) Borrower shall cause any of its Subsidiaries that become Specified Subsidiaries after the Fifth Amendment Effective Date to become parties to this Agreement for purposes of this Section 6.3.
6.5 6.4.   No Further Negative Pledges.  Except with respect to (a) specific property encumbered by a Lien permitted by Section 6.2 to secure payment of particular Indebtedness or to be sold pursuant to an executed agreement with respect to a permitted Asset Sale, (b) restrictions by reason of customary provisions restricting assignments, subletting or other transfers contained in leases, licenses, joint venture agreements, asset sale agreements, stock sale agreements and similar agreements entered into to the extent permitted hereunder; provided, that such restrictions are limited to the property or assets secured by such Liens or the property or assets subject to such leases, licenses, joint venture agreements, asset sale agreements, stock sale agreements or similar agreements, as the case may be, (c) restrictions in other Indebtedness incurred in compliance with Section 6.1 in respect of Liens in favor of parties other than the Secured Parties, (d) restrictions 

contained in the Credit Documents or any related documents, (e) any other agreement that does not restrict in any manner Liens created pursuant to the Credit Documents on any Collateral securing the Obligations and does not require the granting of any Lien securing any Indebtedness or other obligation by virtue of the granting of Liens on or pledge of property of any Loan Party to secure the Obligations, or (f) any prohibition or limitation that exists pursuant to applicable laws; provided, that such restrictions, taken as a whole, are, in the good faith judgment of Borrower, no more materially restrictive with respect to such encumbrances and restrictions than those contained in this Agreement, Borrower shall not enter into any agreement prohibiting the creation or assumption of any Lien upon any of its properties or assets, whether now owned or hereafter acquired.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00283-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00283-of-00352.parquet"}]]