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EXHIBIT 10.23

CERTAIN INFORMATION CONTAINED IN THIS EXHIBIT, MARKED BY [***], HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE THE REGISTRANT HAS DETERMINED THAT IT IS BOTH NOT MATERIAL AND IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

CONFIDENTIAL        EXECUTION VERSION

SUPPLY AGREEMENT
dated as of November 4, 2019
between
ARLO TECHNOLOGIES, INC.
and
VERISURE SÀRL

        

TABLE OF CONTENTS
Page
						
	Article I DEFINITIONS
	8

	Section 1.01    Certain Defined Terms
	8

	Article II SUPPLY
	19

	Section 2.01    Arlo Catalog Products to be Provided
	19

	Section 2.02    Volume Forecasts
	20

	Section 2.03    Supply of Products
	20

	Section 2.04    Purchase Orders
	21

	Section 2.05    Acceptance
	21

	Section 2.06    Purchase Order Cancellation
	21

	Section 2.07    Purchase Order Product Fulfilment
	22

	Section 2.08    Packaging and Handling
	22

	Section 2.09    Surplus
	22

	Section 2.10    Transfer of Title and Risk of Loss
	22

	Section 2.11    Price List
	23

	Section 2.12    Meeting Delivery Date
	23

	Section 2.13    Delayed Delivery
	23

	Section 2.14    Quality Standards; Inspections and Acceptance Testing
	24

	Section 2.15    Products which are not Acceptable
	24

	Section 2.16    Tooling; Refurbished Products
	25

	Section 2.17    Product Requirements
	25

	Section 2.18    Security and Data Privacy
	25

	Section 2.19    Production and Technical Manufacturing Information Records
	26

	Section 2.20    End Of Life Arlo Catalog Products
	26

	Section 2.21    Product Recalls
	27

	Section 2.22    Other Supply Chain Terms
	27

	Section 2.23    Epidemic Product Defects
	28

	Section 2.24    Consequences of Epidemic Products
	29

	Section 2.25    Notification and Recovery Plan
	29

	Section 2.26    Pass-Through Rights
	30

	Section 2.27    Provision of Information
	30

	Section 2.28    New Product Launches
	30

	Article III EXCLUSIVITY
	30

	Section 3.01    Exclusivity in respect of Arlo Catalog Products
	30

	Section 3.02    Exclusivity in respect of Verisure Developed Products
	30

	Section 3.03    Exclusivity in respect of all Products
	31

	Section 3.04    Supply Exclusivity
	31

	Article IV DEVELOPMENT SERVICES
	31

	Section 4.01    Development Services
	31

    2

        

						
	Section 4.02    Entering into Statements of Work
	32

	Section 4.03    Replacement of Project Leaders
	33

	Section 4.04    Subcontracting
	33

	Section 4.05    Development Services Pricing
	33

	Section 4.06    Dedicated Team
	33

	Section 4.07    Key Personnel
	34

	Section 4.08    EOL of Verisure Developed Products
	34

	Section 4.09    Feedback
	34

	Article V ASSOCIATED SERVICES
	34

	Section 5.01    Associated Services
	34

	Section 5.02    Associated Services Pricing
	36

	Section 5.03    Arlo Smart Services Invoicing
	36

	Section 5.04    Key Personnel
	36

	Section 5.05    Arlo Smart
	36

	Section 5.06    Access; Training
	36

	Article VI RECORD KEEPING AND AUDIT
	37

	Section 6.01    Record Keeping
	37

	Section 6.02    Audit
	37

	Article VII ROADMAP; GOVERNANCE
	38

	Section 7.01    Joint Roadmap
	38

	Section 7.02    Relationship Managers
	38

	Section 7.03    Development and Quality Control Committee
	39

	Section 7.04    Governance Committee
	40

	Section 7.05    Replacements
	40

	Article VIII PAYMENTS
	40

	Section 8.01    Prepayments
	40

	Section 8.02    Product Payments
	41

	Section 8.03    Minimum Annual Commitment
	41

	Section 8.04    Cure Right
	41

	Section 8.05    Base Margin
	42

	Section 8.06    Invoicing
	42

	Section 8.07    General
	42

	Section 8.08    Taxes
	43

	Article IX INTELLECTUAL PROPERTY
	43

	Section 9.01    Background IP
	43

	Section 9.02    Customer IP
	43

	Section 9.03    Customer License to Supplier
	44

	Section 9.04    VDP License
	44

	Section 9.05    Backstop License
	45

	Section 9.06    Additional Arlo Licenses
	45

	Section 9.07    Registration of License
	45

    3

        

						
	Section 9.08    Prosecution
	46

	Section 9.09    Enforcement
	46

	Section 9.10    Branding
	46

	Section 9.11    Arlo Brand License Outside the Territory
	46

	Section 9.12    Covenants
	47

	Section 9.13    Escrow
	47

	Section 9.14    Third Party IP
	48

	Section 9.15    Brexit
	48

	Section 9.16    Reservation of Rights
	48

	Article X ADDITIONAL AGREEMENTS
	48

	Section 10.01    End User Relationship
	48

	Section 10.02    Other Reporting Obligations
	48

	Section 10.03    User Experience Updates
	49

	Section 10.04    Compliance with Law
	49

	Article XI TERM; TERMINATION
	49

	Section 11.01    Initial Term
	49

	Section 11.02    Renewal
	49

	Section 11.03    Termination
	49

	Section 11.04    Survival
	51

	Article XII BUSINESS CONTINUITY
	51

	Section 12.01    Triggering Events
	51

	Section 12.02    Step-In Rights
	53

	Section 12.03    Backstop Services
	54

	Section 12.04    Backstop Arrangements
	57

	Section 12.05    Insolvency Event
	57

	Article XIII REPRESENTATIONS AND WARRANTIeS
	58

	Section 13.01    Representations of Both Parties
	58

	Section 13.02    Supplier Representations
	58

	Section 13.03    Warranty Disclaimer
	58

	Article XIV CONFIDENTIALITY
	59

	Section 14.01    Definition of Confidential Information
	59

	Section 14.02    Exclusions
	59

	Section 14.03    Use and Disclosure Restrictions
	59

	Article XV INDEMNITY
	60

	Section 15.01    Indemnification by Supplier
	60

	Section 15.02    Indemnification by Customer
	60

	Section 15.03    Indemnification Procedure
	60

	Section 15.04    Limitations of Liability
	62

	Section 15.05    Indemnity Survival.  The provisions of this Article XV shall survive any termination of this Agreement.
	63

	Article XVI GENERAL PROVISIONS
	63

    4

        

						
	Section 16.01    Dispute Resolution
	63

	Section 16.02    Specific Performance
	64

	Section 16.03    No Joint Venture
	65

	Section 16.04    Force Majeure
	65

	Section 16.05    Further Assurances
	65

	Section 16.06    Notices
	65

	Section 16.07    Entire Agreement
	66

	Section 16.08    No Third-Party Beneficiaries
	66

	Section 16.09    Amendment; Waiver
	66

	Section 16.10    Governing Law
	66

	Section 16.11    Counterparts
	66

	Section 16.12    Assignment
	66

	Section 16.13    Rules of Construction
	67

	Section 16.14    Non-Recourse
	67

	Section 16.15    Export Law Compliance
	67

	Section 16.16    No Conflict
	67

    5

        

SCHEDULES
SCHEDULE 2.01    Product Addendum – List of Arlo Catalog Products
SCHEDULE 2.05    Customer Entities
SCHEDULE 2.18    Data Privacy and Security
SCHEDULE 2.20    Supplier End of Life Policy
SCHEDULE 4.01(a)    Statement of Work for [***]1
SCHEDULE 4.02(a)    Form of Statement of Work 
SCHEDULE 5.01    Service Level Agreement
SCHEDULE 5.01(a)    Integration Services 
SCHEDULE 5.01(c)    Arlo Smart Services 
SCHEDULE 5.02    Cost Categories for Arlo Smart Services
SCHEDULE 5.06    Details on Training and Access
SCHEDULE 8.02    Production Costs of the Products
SCHEDULE 9.10    Branding Guidelines
SCHEDULE 9.13    Source Code Escrow Agreement 

1 [***] = Certain Confidential Information Omitted
    6

SUPPLY AGREEMENT
This Supply Agreement (this “Agreement”) is entered into by and between Arlo Technologies, Inc., a Delaware corporation having its place of business at 3030 Orchard Parkway, San Jose, California (“Supplier”) and Verisure Sàrl, a Swiss limited liability company having its principal place of business at Chemin Jean-Baptiste Vandelle 3, 1290 Versoix, Switzerland (“Customer”), on this November 4, 2019 (the “Effective Date”).   Provisions designated to be effective as of the Effective Date will be in full force and effect as of the Effective Date; provisions that have a specific date of effectiveness shall be effective as of such specific date; all other provisions will be effective as of the Closing Date.
RECITALS
WHEREAS, pursuant to that certain Asset Purchase Agreement (the “APA”), dated as of the date hereof, among Supplier and Customer, Customer has agreed to purchase Supplier’s distribution and marketing business in the Territory (as defined below);
WHEREAS, the Parties desire to establish a partnership on which Supplier shall make available for supply to Customer and/or its designee all of Supplier’s products made available from time to time in the United States or elsewhere where, in Supplier’s reasonable determination with advice of counsel, such products may legally be offered by Customer (the “Arlo Catalog Products”) and Associated Services (as defined below);
WHEREAS, the Parties also intend for Customer to (a) become the exclusive distributor of Arlo Catalog Products in the Territory for all channels; and (b) distribute Arlo Catalog Products through and in connection with the sale of products and services of the Customer’s security business, including Customer’s partners and alliances sales channels for such security business, in each case excluding any retail, retail distribution, and retail e-commerce channels (the “Verisure Security Business”) anywhere legally in the world;
WHEREAS, the Parties wish for Supplier to develop, manufacture and supply products in accordance with mutually-agreed specifications that will be set forth in one or more Statements of Work (the “Verisure Developed Products”, and together with the Arlo Catalog Products, the “Products”); 
WHEREAS, the Parties desire for Supplier to provide to Customer certain rights in the event of certain business continuity failures of Supplier  including the continuation of the commercial arrangements contemplated herein notwithstanding the occurrence of any such business continuity failure and the agreement to provide all support necessary for Customer to negotiate backstop arrangements (the “Backstop Arrangements”) with Supplier’s original design manufacturers and certain of its other suppliers, it being understood that these arrangements are part and parcel to the agreement by Customer to enter into this Agreement; 
WHEREAS, Customer’s intent is to enter into a strategic partnership with Supplier to jointly grow and develop their respective businesses through the supply of cameras and camera-related products.  The intent of Customer and Supplier is to build a highly successful future and portfolio together for the long-term, targeting explosive growth.  Customer’s intent is to use Supplier to ensure Customer is able to meet its customers’ demand for cameras and camera-related products; 
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements contained herein, the Parties hereby agree as follows:
    7

Article I

DEFINITIONS
Section 1.01Certain Defined Terms.
(a)Unless otherwise defined herein, all capitalized terms used herein shall have the same meaning as in the APA.
(b)The following capitalized terms used in this Agreement shall have the meanings set forth below:
“Adverse Event” shall have the meaning set forth in Section 12.01(d).
“Adverse Liquidity Position” means (1) either (i) the ratio of Supplier’s Net Debt to Supplier’s LTM EBITDA is greater than or equal to [***]2 or (ii) the ratio of Net Debt to LTM Gross Margin is greater than or equal to [***]; provided, that, if Supplier’s LTM Gross Margin is less than [***] percent ([***]%) of Supplier’s consolidated revenue as of the most recent financial statements, then clause (i) shall not apply and the foregoing ratio in this clause (ii) shall be [***]; or (2) the Liquidity Ratio is less than [***] and Supplier’s Unrestricted Cash and Short Term Investments plus undrawn available lines of credit are below $[***].
“Adverse Notification” shall have the meaning set forth in Section 12.01(d). 
“Affiliate” of a Person means a Person that directly or indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common Control with, the first mentioned Person; provided, that in no event shall Customer or any of its Subsidiaries be considered an Affiliate of any “portfolio company” (as such term is customarily understood among institutional private equity investors) of any investment fund or investment holding company sponsored by or affiliated with Hellman & Friedman LLC, GIC Private Limited or Corporación Financiera Alba, S.A. (or of any other direct or indirect shareholder of Customer from time to time which is a professional financial investor), nor shall any portfolio company of any investment fund or investment holding company sponsored by or affiliated with Hellman & Friedman LLC, GIC Private Limited or Corporación Financiera Alba, S.A. (or of any other direct or indirect shareholder of Customer from time to time, which is a professional financial investor) be considered to be an Affiliate of Customer or any of its Subsidiaries. 
“Agreement” shall have the meaning set forth in the Preamble.
 “APA” shall have the meaning set forth in the Recitals. 
“Applicable Term” shall have the meaning set forth in Section 11.02. 

2 [***] = Certain Confidential Information Omitted
    8

“Arlo Brand” shall have the meaning set forth in Section 9.10. 
“Arlo Catalog Products” shall have the meaning set forth in the Recitals.
“Arlo Catalog Products Markup” means, for Arlo Catalog Products (i) if Customer’s Hardware Contribution Margin is equal to or less than [***]3 percent ([***]%) calculated with respect to the retail part of the European Business, a markup of [***] percent ([***]%); (ii) if Customer’s Hardware Contribution Margin is greater than [***] percent ([***]%) but equal to or less than [***] percent ([***]%) calculated with respect to the retail part of the European Business, a markup of [***] percent ([***]%); and if Customer’s Hardware Contribution Margin is greater than [***] percent ([***]%) calculated with respect to the retail part of the European Business, a markup of [***] percent ([***]%).   
“Arlo Change of Control” shall have the meaning set forth in Section 11.03(a).
“Arlo IP” means any Intellectual Property owned, controlled, or developed by or on behalf of Supplier or its Affiliates as of the Effective Date and through the termination of the Termination Backstop Services (provided that, following an Arlo Change of Control, Arlo IP will not be deemed to include any Intellectual Property of the acquirer or any affiliate of such acquirer (outside of the Intellectual Property of the acquired group of companies)).
“Arlo Smart Services” shall have the meaning set forth in Section 5.01(c). 
“Associated Services” shall have the meaning set forth in Section 5.01.
“Associated Services Personnel List” shall have the meaning set forth in Section 5.04.
“Audit Scope” shall have the meaning set forth in Section 6.02. 
“Auditor” shall have the meaning set forth in Section 6.02.
“Background IP” means all Intellectual Property owned by a Party as of the Effective Date, any modifications thereto made by such Party that are separate from those created under the Development Services and all other Intellectual Property made by a Party that is separate from that created under the Development Services. 
“Backstop Arrangements” shall have the meaning set forth in the Recitals.
“Backstop License” shall have the meaning set forth in Section 9.05. 
“Backstop Services” means, collectively, the Termination Backstop Services, the Early Stability Backstop Services and the Late Stability Backstop Services.
“Bankruptcy Code” means title 11 of the United States Code, as now in effect or hereafter amended. 

3 [***] = Certain Confidential Information Omitted
    9

“Batch” means a specific quantity of the Products that is intended to have uniform character and quality, within specified limits, and is produced according to a single Purchase Order during the same cycle of manufacture/production run.
 “Business Day” means any day other than a Saturday, a Sunday or a day on which banks in New York City or banks in Geneva, Switzerland and/or other parts of Switzerland are permitted or required by Law to close.
 “Change of Control” means, with respect to Supplier: (a) any transaction or series of transactions (including by merger, consolidation, exchange or contribution of equity, or other form of entity reorganization of Supplier in one transaction or in a series of related transactions with or into another entity) pursuant to which any Person becomes the record owner or beneficial owner, directly or indirectly, of equity securities of Supplier representing fifty percent (50%) or more of the total voting power represented by Supplier’s then issued and outstanding voting securities; (b) the direct or indirect sale, transfer or other disposition (in one transaction or in a series of related transactions) of all or substantially all of the consolidated assets or business of Supplier; (c) any transaction or series of transactions pursuant to which any Person acquires all or substantially all of the consolidated assets or business of Supplier or (d) the occupation of a majority of the seats (other than vacant seats) on the board of directors of Supplier by Persons who were not (x) directors of Supplier as of the date of this Agreement (the directors of Supplier as of the date of this Agreement, the “Incumbent Directors”), (y) directors who were appointed to vacant seats by the Incumbent Directors, or (z) directors who were nominated for election by the stockholders of Supplier by the Incumbent Directors; provided that any director so appointed or nominated and then elected will become an Incumbent Director after such appointment or nomination and any Incumbent Director who resigns, fails to stand for re-election or fails to be re-elected shall be removed from the definition of Incumbent Director; provided, further, that, in no event shall an Incumbent Director include any member of the board of directors of Supplier originally proposed for election in opposition to the Incumbent Directors then in office in an actual or threatened election contest relating to the election of the directors and whose initial assumption of office resulted from such contest or the settlement thereof.
“Claim” shall have the meaning set forth in Section 15.01.  
“Closing Date” shall have the meaning set forth in the APA.
“Collateral” shall have the meaning set forth in Section 8.01. 
“Commitment Period” shall have the meaning set forth in Section 8.03.
“Confidential Information” shall have the meaning set forth in Section 14.01. 
“Control” means, with respect to a Person, the power to direct or cause the direction of the management of policies of such Person, directly or indirectly, whether through ownership of voting securities or by contract or otherwise and the terms “controlling” and “controlled by” have meanings correlative to the foregoing.
[***]4

4 [***] = Certain Confidential Information Omitted
    10

“Customer” shall have the meaning set forth in the Preamble. 
“Customer Entities” means, collectively, Customer and its Affiliates.
“Customer Feedback IP” shall have the meaning set forth in Section 4.09. 
“Customer Services Manager” shall have the meaning set forth in Section 7.02(b).
“Customer Specific Features” shall have the meaning set forth in Section 4.02(a)(ix).
“Debt Default” shall have the meaning set forth in Section 12.01(a)(ii).
“Defective Product” means any Product which does not meet the requirements set forth in Section 2.22(d) herein.
“Deliverable” means any work product and/or other results of Development Services in each case of the foregoing to be delivered by Supplier or its Subsidiaries to Customer, as specified in a Statement of Work.
“Delivery Date(s)” means the date(s) on which Products are to be delivered to, or made available for collection from, the Delivery Location, as set out in Supplier’s acceptance of the applicable Purchase Order.
“Delivery Location” means the location to which Products are to be delivered to, or made available for collection from in accordance with Section 2.07 as set out in the Purchase Order.  For clarity, there will be only one Delivery Location per Purchase Order.
“Development and Quality Control Committee” shall have the meaning set forth in Section 7.03. 
“Development Service” shall have the meaning set forth in Section 4.01.
“Development Services Personnel List” shall have the meaning set forth in Section 4.07. 
“Dispute” shall have the meaning set forth in Section 16.01(a).
“Early Stability Backstop Services” shall have the meaning set forth in Section 12.03(b). 
“Early Stability Step-In Right” shall have the meaning set forth in Section 12.02(b).
“Early Stability Triggering Event” shall have the meaning set forth in Section 12.01(a).
“Effective Date” shall have the meaning set forth in the Preamble.
“EOL Policy” shall have the meaning set forth in Section 2.20.
“EOL Product” shall have the meaning set forth in 0.
“EOL Support Period” shall have the meaning set forth in Section 2.20(a).
    11

“Epidemic Defect” shall have the meaning set forth in Section 2.23.
“Epidemic Defect Notice” shall have the meaning set forth in Section 2.25. 
“Escrow” shall have the meaning set forth in Section 9.13.
“Escrow Costs” shall have the meaning set forth in Section 9.13.
“Escrow Materials” shall have the meaning set forth in Section 9.13.
“European Business” shall mean the distribution, marketing and sales of Products and Associated Services in the Territory.  
“Existing Territory” means the countries in which Supplier currently supplies the Arlo Catalog Products as at the Effective Date, as follows: the United States of America, Canada, Mexico, Australia, Hong Kong, Japan, Korea, New Zealand, Singapore, Taiwan, the United Kingdom (including, for clarity, its constituent parts), Ireland, Germany, Austria, France, Switzerland, Spain, Italy, Norway, Denmark, Finland, Netherlands, and Belgium.
“Expiration Date” shall have the meaning set forth in Section 11.02. 
“Feedback” shall have the meaning set forth in Section 4.09.
 “Fees” means the Product Payments, the Total Commitment, the Annual Commitment, the fees for Development Services set forth in Section 4.05 and the fees for Associated Services set forth in Section 5.02, together with any other payments required to be paid by Customer to Supplier under this Agreement.
“Force Majeure” means, with respect to a Party, an event beyond the control of such Party (or any Person acting on its behalf) and which by the exercise of reasonable diligence and prudence the Party affected was unable to prevent, including acts of God, storms, floods, riots, fires, sabotage, civil commotion or civil unrest, interference by civil or military authorities, acts of war (declared or undeclared) or armed hostilities or other national or international calamity or one or more acts of terrorism or failure of energy sources.  For the avoidance of doubt, the following shall not be deemed Force Majeure events:  general adverse changes or fluctuations in the markets in which Supplier operates; financial distress or insufficient financial capability of Supplier to perform the Purchase Order or Statement of Work; storms, floods and failures of energy sources the effects or extent of which would have been mitigated by reasonable diligence and prudence; or events involving a previous or existing condition known by the Party affected by the event at or before the acceptance of a Purchase Order or Statement of Work date.
“GDPR” shall have the meaning set forth in Section 2.18.
“Good Industry Practice” means the exercise of the degree of skill, care and diligence expected from an expert and experienced supplier of products and services the same as or similar to the Products, the Development Services and the Associated Services.
“Governance Committee” shall have the meaning set forth in Section 7.04. 
“Governmental Authority” means any United States, supranational or foreign, federal, state, provincial, municipal or local government agency, court of competent jurisdiction, administrative agency or commission or other governmental or regulatory authority or instrumentality.
    12

“Grace Period” shall have the meaning set forth in Section 2.13.
“Hardware Contribution Margin” means (i) Customer’s gross shipments less returns, multiplied by Customer’s standard margin, minus (ii) marketing expenses and minus (iii) sales and marketing operating expenses (in each case, calculated with respect to the European Business). 
“Indebtedness” means: (a) any indebtedness for borrowed money; (b) any obligations evidenced by notes, bonds, debentures or similar contracts to any Person other than Supplier or any of its Subsidiaries; (c) any obligations in respect of letters of credit or bankers acceptances; and (d) any guaranty of any such obligations described in clauses “(a)” through “(c)” of any Person other than Supplier or any of its Subsidiaries (other than in any case, accounts payable to trade creditors, accrued liabilities, deferred revenue and operating leases incurred in the ordinary course of business and non-current liabilities).  
“Indemnified Party” shall have the meaning set forth in Section 15.03.
“Indemnifying Party” shall have the meaning set forth in Section 15.03.
“Initial Term” shall have the meaning set forth in Section 11.01. 
“Insolvency Event” means the occurrence of any of the following: (i) Supplier or any of its Material Subsidiaries (A) voluntarily commences any case or files any petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief under any federal, state or foreign bankruptcy, insolvency, administrative receivership or similar law nor or hereafter in effect, (B) consents to the institution of, or fails to contest in a timely and appropriate manner, any involuntary proceeding or petition described in clause (ii) below, (C) files an answer admitting the material allegations of a petition filed against it in any such proceeding, (D) applies for or consents to the appointment of a receiver, administrator, administrative receiver, trustee, custodian, sequestrator, conservator or similar official for Supplier or any of its Material Subsidiaries for a substantial part of its assets, (E) makes a general assignment or arrangement for the benefit of creditors or (F) takes any corporate action for the purpose of authorizing any of the foregoing; or (ii) upon the commencement of an involuntary case against Supplier or any of its Material Subsidiaries or the filing of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of Supplier or any of its Material Subsidiaries or its or their debts, or of a substantial part of its or their assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar Law now or hereafter in effect, provided, that such involuntary proceeding in this clause (ii) is not dismissed within a period of thirty (30) days after the filing thereof, or if any court order grants the relief sought in such involuntary proceeding.
“Integration Services” shall have the meaning set forth in Section 5.01(a).
“Intellectual Property” means all rights associated with the following:  (a) patents and applications therefor, utility models and applications therefor and statutory invention registrations (including any continuations, continuations-in-part, divisionals, reissues, renewals, foreign counterparts or modifications for any of the foregoing); (b) trade secret rights, rights in know-how and all other rights in or to confidential business or technical information; (c) copyrights in works of authorship of any type (including copyrights in Software), mask work rights and design rights, whether or not registered, and registrations and applications for registration thereof, and all rights therein provided by applicable international treaties or conventions, all moral and common law rights thereto; and (d) any similar, corresponding or 
    13

equivalent rights to any of the foregoing anywhere in the world.  For clarity, “Intellectual Property” does not include any rights in Trademarks.
“Joint Roadmap” shall have the meaning set forth in Section 7.01. 
“Late Stability Backstop Services” shall have the meaning set forth in Section 12.03(e). 
 “Late Stability Ramp Down Period” shall have the meaning set forth in Section 12.03(e)(ii).
“Late Stability Step-In Right” shall have the meaning set forth in Section 12.02(c). 
“Late Stability Triggering Event” shall have the meaning set forth in Section 12.01(b).
“Law” means any law, treaty, statute, ordinance, rule, code or regulation of a Governmental Authority.
“Licensed Feedback” shall have the meaning set forth in Section 4.09.
“Liquidity Ratio” means the ratio of (i)(a) Unrestricted Cash and Short Term Investments plus (b) undrawn revolving credit facilities or lines of credit of Supplier, to (ii) (a) the sum of (1) the aggregate amount of projected capital expenditures and working capital requirements of Supplier for the next rolling twelve (12) month period, plus (2) the aggregate principal amount of cash payments with respect to interest and other required payments, in the form of amortization or otherwise, on all Indebtedness of Supplier for the next rolling twelve (12) month period, and without duplication, the aggregate principal amount of all Indebtedness of Supplier outstanding on the applicable date having a remaining term to maturity of one year or less, plus (3) the aggregate amount of actual and projected cash tax payments of Supplier for the next rolling twelve (12) month period minus (b) Supplier’s LTM EBITDA, in each case (other than with respect to LTM EBITDA) with such calculation of capital expenditure projections, working capital projections, debt service, tax payment and/or similar cashflow forecasts in this definition as prepared in good faith and consistent with similar capital expenditure projections, working capital projections, debt service, tax payment and similar cashflow forecasts presented to the board of directors or senior management of Supplier in the ordinary course of business.
“Losses” means any and all losses, damages, liabilities, costs (including reasonable out-of-pocket costs of investigation) and expenses, including interest, penalties, settlement costs, judgments, awards, fines, costs of mitigation, court costs and fees (including reasonable attorneys’ fees and expenses). 
“LTM EBITDA” means, as of any date of determination, with respect to the four fiscal quarters most recently ended for which financial statements are available, the sum (for purposes of such calculation, not to be less than zero) for such four fiscal quarters of (1) net income as reflected on a statement of operations prepared on a consolidated basis in accordance with generally accepted accounting principles as ordinarily applied by Supplier plus (2) (i) provisions for taxes based on income, profits, losses or capital of Supplier and its Subsidiaries for such quarter, (ii) interest expense and (iii) depreciation and amortization (including, without limitation, amortization of intangibles), (iv) stock-based compensation, in each case (x) without duplication, (y) solely to the extent such amount was deducted in calculating such net income and (z) solely with respect to the applicable quarter. Solely for purposes of calculating EBITDA for periods containing fiscal quarters ended prior to the date hereof, EBITDA for the fiscal 
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quarters ended December 31, 2018, March 31, 2019 and June 30, 2019 shall be $[***]5, $[***] and $[***], respectively.
“LTM Gross Margin” means, as of any date of determination, with respect to the four fiscal quarters most recently ended for which financial statements are available, the sum (for purposes of such calculation, not to be less than zero) for such four fiscal quarters of (1) consolidated revenue less (2) cost of goods sold, in each case as reflected on the statement of operations prepared on a consolidated basis in accordance with generally accepted accounting principles as ordinarily applied by Supplier. Solely for purposes of calculating gross margin for periods containing fiscal quarters ended prior to the date hereof, gross margin for the fiscal quarters ended December 31, 2018, March 31, 2019 and June 30, 2019 shall be $[***], $[***] and $[***], respectively.
“Markup” means either the Verisure Developed Products Markup or the Arlo Catalog Products Markup. 
“Material Adverse Effect” means (x) any effect, event, change, development, occurrence, circumstance or state of facts that, individually or in the aggregate, has had or would reasonably be expected to have, a material adverse effect on (i) the assets, business  or financial condition of Supplier and its Subsidiaries, individually or taken as a whole, and/or (ii) the ability of Supplier or any of its Subsidiaries, as applicable, to perform their respective obligations under this Agreement in a timely manner or (y) the Liquidity Ratio is less than [***] and Supplier’s 

5 [***] = Certain Confidential Information Omitted
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Unrestricted Cash and Short Term Investments plus undrawn available lines of credit are below $[***]6.  
“Material Subsidiary” means any Subsidiary of Supplier that (a) has any Indebtedness that is material in relation to Supplier and its Subsidiaries, taken as a whole, (b) guarantees any material Indebtedness of Supplier or any other Material Subsidiary, (c) is party to any contract, lease or license that is material in relation to Supplier and its Subsidiaries, taken as a whole, (d) is the employer to a material number of employees of Supplier and its Subsidiaries, taken as a whole, (e) is otherwise material in relation to the business, operations, affairs, financial condition, assets, properties, or prospects of Supplier and its Subsidiaries, taken as a whole, or (f) any Subsidiary which meets any of the following conditions:  (A) the Supplier and its other Subsidiaries’ investments in and advances to the Subsidiary exceed ten percent (10%) of the total assets of the Supplier and its Subsidiaries consolidated as of the end of the most recently completed fiscal year (for a proposed combination between entities under common control, this condition is also met when the number of common shares exchanged or to be exchanged by the Supplier exceeds 10 percent of its total common shares outstanding at the date the combination is initiated); (B) the Supplier and its other Subsidiaries’ proportionate share of the total assets (after intercompany eliminations) of the Subsidiary exceeds ten percent (10%) of the total assets of the Supplier and its Subsidiaries consolidated as of the end of the most recently completed fiscal year; or (C) the Supplier’s and its other Subsidiaries’ equity in the income from continuing operations before income taxes of the Subsidiary exclusive of amounts attributable to any non-controlling interests ten percent (10%) of such income of the Supplier and its Subsidiaries consolidated for the most recently completed fiscal year. 
“Minimum Annual Commitment” shall have the meaning set forth in Section 8.03.
“Net Debt” means, as of any date of determination, the aggregate principal amount of Indebtedness as reflected on a balance sheet prepared on a consolidated basis in accordance with generally accepted accounting principles as ordinarily applied by Supplier less the aggregate amount of Unrestricted Cash and Short Term Investments; provided that, for purposes of this definition, total liabilities will be calculated without giving effect to any election under FASB ASC Topic 825 (or any other Financial Accounting Standard or similar principle or guidance having a similar result or effect) to value any indebtedness or other liabilities at “fair value”.
“New Product” shall have the meaning set forth in Section 2.28.
“Non-Defective Product” shall have the meaning set forth in Section 2.22(e).
“ODMs and Original Suppliers” means all original design manufacturers of Supplier from time to time (including, without limitation, Foxconn and Pegatron).
“Open Source Software” means Software for which the Source Code is generally made publicly available, and that is licensed under the terms of various published open source Software license agreements or copyright notices accompanying such Software.
“Party” means Supplier and Customer individually, and “Parties” means Supplier and Customer collectively, and, in each case, their permitted successors and assigns. 
“Person” means an individual, corporation, partnership, limited liability company, association, trust, incorporated organization or other single entity.

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“Personnel Lists” shall have the meaning set forth in Section 5.04. 
“Prepayments” shall have the meaning set forth in Section 8.01.
“Product Addendum” shall have the meaning set forth in Section 2.01.
“Product Information” shall have the meaning set forth in Section 2.19(a).
“Product Invoice” shall have the meaning set forth in Section 8.06. 
“Products” shall have the meaning set forth in the Recitals.
“Product Payments” shall have the meaning set forth in Section 8.02. 
“Project Leader” shall have the meaning set forth in Section 4.02(a)(iv).
“Purchase Order” means a request for Products that has been made by a Customer Entity.
“Records” shall have the meaning set forth in Section 6.01. 
“Relationship Manager” shall have the meaning set forth in Section 7.02(a). 
“Representative” of a Person means any director, officer, employee, agent, consultant, accountant, auditor, attorney or other representative of such person.
“Services Invoice” shall have the meaning set forth in Section 5.03.
“Software” shall mean any firmware, end user software, driver software, interface (including graphical user interface) software, operating software or other software program.
“Source Code” shall mean the human-readable source code for the applicable Software, as appropriate, in the appropriate programming language, and which shall contain sufficient narrative so as to reasonably enable a Software programmer having average skill and ability in computer application programming to understand, maintain and modify the source code.
“Specification” means a Product and/or Development Services specification set out in the relevant Statement of Work and any other specifications and amendments agreed in writing between the Supplier and the Customer from time to time.
“Statement of Work” or “SOW” shall have the meaning set forth in Section 4.02.
“Step-In Rights” shall have the meaning set forth in Section 12.02(c). 
“Subsidiary” or “Subsidiaries” of Customer, Supplier or any other Person means any corporation, partnership or other legal entity of which Customer, Supplier or such other Person, as the case may be (either alone or through or together with any other Subsidiary), owns, directly or indirectly, more than 50% of the stock or other equity interests the holder of which is generally entitled to vote for the election of the board of directors or other governing body of such corporation or other legal entity. 
“Supplier” shall have the meaning set forth in the Preamble. 
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“Supplier Personnel” means the employees, agents, subcontractors, suppliers and invitees of the Supplier engaged, or due to be engaged, in carrying out, or required to carry out, the Supplier’s obligations under the Agreement.
“Supplier Services Manager” shall have the meaning set forth in Section 7.02(b). 
“Supplier SOW Technology” shall have the meaning set forth in Section 4.02(a)(ix).
“Supply Ramp Down Period” shall have the meaning set forth in Section 12.03(a)(ii).
“Supply Triggering Event” means the termination of, or Supplier’s notification of its intent to terminate, the supply of the Verisure Developed Products by Supplier to Customer for any reason, unless (i) in accordance with the terms hereof or (ii) Customer has provided its prior written consent for such termination.
“Support Agreement” shall have the meaning set forth in Section 12.01(b)(iii).
“Technical Manufacturing Information” means the manufacturing information, process and technology used by Supplier or its sub-contractors to design,  develop, test or manufacture the Product including, but not limited to:  (i) specifications, Software, schematics, designs, patterns, drawings or other materials pertinent to the most current revision level of manufacturing and assembly of the Product, including any mask work and topography information and product release notes; (ii) detailed component information; (iii) copies of all inspection, manufacturing, test and quality control procedures and any other work processes; (iv) jig, fixture and tooling designs; (v) Supplier history files; (vi) support documentation; and (vii) any additional technical information or materials  specified in a Product Addendum.
“Termination Backstop Services” shall have the meaning set forth in Section 12.03(a).
“Termination Event” shall have the meaning set forth in Section 11.03(a). 
“Territory” shall mean all the countries and jurisdictions in the European continent, including, without limitation, Albania, Andorra, Armenia, Austria, Azerbaijan, Belarus, Belgium, Bosnia and Herzegovina, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Georgia, Germany, Greece, Hungary, Iceland, Ireland, Italy, Kazakhstan, Kosovo, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Moldova, Monaco, Montenegro, The Netherlands, North Macedonia, Norway, Poland, Portugal, Romania, San Marino, Serbia, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, Ukraine, the United Kingdom (including, for clarity, its constituent parts) and Vatican City.
“Testing Materials” shall have the meaning set forth in Section 2.22(e).
“Total Commitment” shall have the meaning set forth in Section 8.03. 
“Trademarks” means trademarks, trade names, service marks, service names, trade dress rights, domain names, social media identifiers, URLs, IP addresses, IP address ranges and websites and similar designation of origin, in each case whether registered or unregistered, and all goodwill symbolized thereby and associated therewith.
“Triggering Events” shall have the meaning set forth in Section 12.01(b).
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“Unavailability” shall have the meaning set forth in Section 2.03.
“Unrestricted Cash and Short Term Investments” means cash, cash equivalents and short term investments, in each case as reflected on a balance sheet prepared as of such date on a consolidated basis in accordance with generally accepted accounting principles as ordinarily applied by Supplier.
“VDP License” shall have the meaning set forth in Section 9.04. 
“Verisure Developed IP” shall have the meaning set forth in Section 9.02. 
“Verisure Developed Products” shall have the meaning set forth in the Recitals.
“Verisure Developed Products Markup” means, for Verisure Developed Products, a markup of [***]7 percent ([***]%). 
“Verisure Security Business” shall have the meaning set forth in the Recitals.
“Volume Forecast” shall have the meaning set forth in Section 2.02.
“Warranty Period” shall have the meaning set forth in Section 2.22(d). 
Article II

SUPPLY 
Section 1.01Arlo Catalog Products to be Provided.  Subject to the terms and conditions of this Agreement, including that Supplier has reasonably determined that such products may be made available outside of the Existing Territory in accordance with Section 2.19, the Arlo Catalog Products supplied to the Customer Entities during the term of this Agreement shall include all products that Supplier provides to its partners, resellers, distributors, 

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Section 1.01retailers and other channels, but at a minimum, Supplier shall supply the products and services set forth in Schedule 2.01 herein (the “Product Addendum”). 
Section 1.02Volume Forecasts.  Customer shall provide to Supplier, within the first [***]8 of the month, in an agreed format, a rolling forecast of the quantity of the Products it requires, by [***], for the following [***] and the approximate dates on which it will require the Products to be supplied (the “Volume Forecast”).  
(a)The Volume Forecast will only be binding in respect of those components that require more than [***] to be delivered at the manufacturing facility, as certified by Supplier on a [***] basis (the “Long Lead Time Components”);
(b)Supplier shall not allocate any Long Lead Time Components to any customer other than Customer until Customer places the relevant Purchase Order;
(c)In the event Customer places a Purchase Order that is below the Volume Forecast, Customer will be liable for the Long Lead Time Components applicable to such Purchase Order; provided that Supplier takes all commercially reasonable steps to mitigate the effects of such long lead times, including, without limitation (i) using the components that were purchased by Supplier for, but are no longer required by, Customer, in products for other customers of Supplier; (ii) reselling the Long Lead Time Components to its own suppliers and (iii) allocating such Long Lead Time Components to future orders by Customer;
(d)Provided that Supplier has taken the mitigating steps set forth above and such Long Lead Time Components remain unused or unsold, Customer will pay such unused or unsold Long Lead Time Components at cost within [***] of receiving the invoice from Supplier; and
(e)Customer will be able to order up to [***] percent ([***]%) more of the Volume Forecast (“Increased Forecast”) and Supplier shall use commercially reasonable efforts to accommodate such increase.
Supplier will provide all information related to manufacturing component lead times promptly after it becomes available and the Parties will work together in good faith to optimize lead times.  
Section 1.03Supply of Products.  Subject to the terms and conditions of the Agreement, the Supplier shall supply, for the benefit of the Customer and the Customer Entities, such quantities of the Products as set out in the Purchase Order.  Supplier shall ensure that it maintains sufficient quantities of the Products to meet the Volume Forecasts provided by the Customer and will use commercially reasonable efforts to fulfil any Increased Forecasts.  If at any time during the term of this Agreement the Supplier determines that it will not be able to meet purchase orders received from Customer or any of its other customers for a specific period of time (the “Unavailability”), Supplier shall immediately notify Customer thereof. In connection with the Unavailability, Supplier shall (i) through the third anniversary of the Initial Term, with respect to the fulfillment of products among all of its customers, give Customer the same priority

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Section 1.03as it gives to its top two customers; and (ii) for the remainder of the term of this Agreement, give Customer a pro rata share of the available Products equivalent to the percentage of Customer’s Product sales as a proportion of Supplier’s total sales in the most recent calendar year.
For clarity, subject to Section 4.04, Supplier may subcontract to an Affiliate the performance of its obligations under this Article 2, including the acceptance, fulfilment and receipt of payment for each Purchase Order.  
Section 1.04Purchase Orders.  Customer may, from time to time on its own behalf or on behalf of any Customer Entity, and any Customer Entity may from time to time on its own behalf, order Products from the Supplier by completing and issuing a Purchase Order and submitting it to the Supplier in accordance with the procedure detailed in this Section 2.04.  Each Purchase Order shall:
(a)be given in writing (whether air mail or electronic form); 
(b)where relevant specify: 
(i)the type, price, currency and quantity of any Products ordered; and 
(ii)the requested Delivery Date(s) and Delivery Location for such Products;
(c)contain an order number; and
(d)specify the registered name, tax identification number and address of the Customer Entity to be invoiced by the Supplier for the Fees.
Section 1.05Acceptance.  The Supplier shall notify the relevant Customer Entity promptly, and in any event within five Business Days of receiving a Purchase Order, whether or not it accepts the Purchase Order and, if it accepts the Purchase Order, the Delivery Date. Supplier will not reject a Purchase Order that: (i) is consistent with the Volume Forecast; and (ii) has a delivery date that is at least [***]9 (for sea freight to the Delivery Locations set forth on Section 2.07 herein) or [***] (for air freight) from the date of the Purchase Order; provided that Supplier may reject Purchase Orders with a delivery date that cannot be met entirely because of exceptional or unforeseen circumstances, in each case, that are outside of Supplier’s control.  Failure to issue a written Purchase Order rejection within such period shall be deemed an acceptance of the Purchase Order on the terms set out therein.  Supplier will use commercially reasonable efforts to accept Purchase Orders for Increased Forecasts.  Upon acceptance or deemed acceptance of a Purchase Order in accordance with this Section 2.05, Supplier shall be bound to supply and perform, and the Customer (or, without limiting Section 8.07(c), the relevant Customer Entity) shall be bound to purchase, the relevant Products.  Attached as Schedule 2.05 is a list, as of the Effective Date, of all Customer Entities that may be issuing Purchase Orders.  Customer may amend Schedule 2.05 from time to time by written notice to Supplier.
Section 1.06Purchase Order Cancellation.  A Customer Entity which has placed a Purchase Order for Products which has been accepted by Supplier may not cancel such Purchase Order.   

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Section 1.07Purchase Order Product Fulfilment.  Supplier shall deliver the Products to or make the Products available for collection from, the Delivery Location by or on the Delivery Date(s). The Delivery Locations as of the Effective Date are:
(a)for all Products to be marketed and sold via the retail channel: Moerdijk, The Netherlands; and
(b)for all Products to be marketed and sold via the Verisure Security Business: Guadalajara (Madrid area), Spain.
The Delivery Locations may change at Customer’s sole discretion, provided: (i) the Delivery Location remains in the Territory; (ii) Customer has given Supplier advance written notice of such change; and (iii) for Purchase Orders accepted after such notice, Supplier has a ninety (90) day period to shift all deliveries to the new location.  In the event a Party wants to add an additional Delivery Location, the Parties will discuss in good faith the possibility of the same.
Section 1.08Packaging and Handling.  Supplier shall properly pack, mark and ship Products as instructed by Customer and otherwise in accordance with applicable Law and industry standards, and shall provide Customer with shipment documentation showing the purchase order number, the quantity of pieces in shipment, the number of cartons or containers in shipment, the bill of lading number and the country of origin.  Further, Supplier shall: 
(a)where reasonably required by the relevant Customer Entity, remove all packaging and leave the Delivery Location clear of waste; 
(b)label the Products, packaging, master boxes and pallets in accordance with the reasonable instructions of the relevant Customer Entity and any applicable regulations or requirements of any applicable carrier, and properly packed and secured so as to protect them from loss or damage in accordance with Good Industry Practice and to ensure they reach their destination in an undamaged condition.  Supplier shall ensure that a packing note quoting the Purchase Order number accompanies each delivery or consignment of the Products and is displayed prominently on all packages; and
(c)Supplier will promptly provide to the relevant Customer Entity all reasonable assistance to help facilitate the importation of the Products and take all reasonably necessary action to assist Customer in ensuring the Products are granted prompt customs clearance. 
Section 1.09Surplus.  Unless otherwise agreed between the Parties in writing, no Customer Entity will have any liability to pay for, and any Customer Entity may refuse, any surplus Products delivered by the Supplier. Any surplus Products shall be collected by the Supplier at the Supplier’s cost promptly following a request by the Customer Entity. 
Section 1.10Transfer of Title and Risk of Loss.  Supplier shall be responsible for arranging and paying all shipping, insurance and export costs related to the freight of the Products under DDU (Incoterms 2010) to the Delivery Location, unless otherwise agreed upon by both Parties on a shipment by shipment basis.  For the avoidance of doubt, Customer shall be responsible for performing customs clearance and paying all relevant customs and import duties and inspection costs associated with the delivery of the Products to the Delivery Location.  Title to the Products will pass on to the Customer at the Delivery Location.  Risk in any Products rejected by the Customer pursuant to Section 2.15 hereof shall pass back to the Supplier once the Supplier has collected the rejected Products pursuant to Section 2.15, and risk in any surplus Products shall pass back to the Supplier on the earlier of 
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(i) at the point of Supplier’s collection of the same at the Delivery Location; and (ii) [***] from the date Supplier receives Customer’s notice to collect the Products from the Delivery Location. 
Section 1.11Price List.  Supplier’s price list will include DDU pricing, assuming sea freight and associated lead times; provided that Customer may request air shipments in the Purchase Order provided that Customer promptly pays any incremental cost as a result of the change from sea to air freight.  Supplier shall, on a quarterly basis, request quotes from third party vendors on freight pricing and, where there has been a change in price, provide Customer with such quotes.  The Parties will compare such quotes and discuss freight pricing on each meeting of the Governance Committee, and the Parties may revisit the use of DDU depending on the results of such discussion. 
Section 1.12Meeting Delivery Date.  Supplier shall notify the relevant Customer Entity promptly after receipt of a Purchase Order if the requested Delivery Date(s) for the Products will not be met and shall propose an alternative Delivery Date.  Further:
(a)Supplier shall use commercially reasonable efforts to meet the Delivery Date(s);
(b)Unless otherwise specified in the Purchase Order or otherwise agreed in writing by the Parties, no Customer Entity shall be required to accept delivery in instalments, outside its respective normal business hours as notified to the Supplier from time to time, or from or at a location different from the Delivery Location.  The Customer Entity shall have no liability to the Supplier in respect of any Products delivered to or made available for collection at any location different from the Delivery Location and any such Products shall be collected by the Supplier at the Supplier’s cost promptly following a request by the Customer Entity.
Section 1.13Delayed Delivery.  If the Supplier is unable for any reason to deliver the Products by the Delivery Date, the Customer Entity may, after the passage of [***] after the Delivery Date (“Grace Period”), deduct from the Fees the following rate for each week of delay after the Grace Period until the actual delivery of all such Products:
			
	Amount payable per week of delay after the Grace Period

	[***]% of the value of order.

Customer’s ability to deduct from the Fees under this Section 2.13 shall be capped in relation to each order of Products at [***]% of the value of that order, unless otherwise agreed by the Parties.  The Fee reduction set out in this Section 2.13 is Customer’s sole and exclusive remedy in the event of a delivery of the Products after the Delivery Date.
 [***] = Certain Confidential Information Omitted
Section 1.14
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Section 1.15Quality Standards; Inspections and Acceptance Testing.  Supplier shall meet or exceed (i) Supplier’s current quality standards for the Arlo Catalog Products, and (ii) the quality standards for the Verisure Developed Products to the extent set out in the relevant Statement of Work or as otherwise mutually agreed in writing.  Supplier, or its designee, shall perform quality inspections of the Products before shipment and will certify inspection results in the manner reasonably requested by Customer or otherwise in accordance with industry standards.  Further:
(a)subject to the provisions of Section 2.14(b), the Customer Entity may reject any Product which it reasonably considers does not conform to the Specifications or this Section 2.14.
(b)The Customer shall have the right to inspect the Products upon arrival at the Delivery Location.  
(c)Any inspection, testing, checking, rejection or approval made, carried out or given by or on behalf of the Customer shall not relieve the Supplier from any obligation under this Agreement nor prejudice any of the powers or remedies of any Customer Entity.
(d)Without prejudice to the foregoing, if a Statement of Work specifies any additional acceptance tests and/or other acceptance procedures applicable to the Products, the Supplier shall comply with its obligations relating to such acceptance testing and/or other acceptance procedures as stated in the relevant Statement of Work. 
(e)If, as a result of such inspection and/or review of samples under Section 2.14(a) and/or as a result of any additional acceptance testing and/or other acceptance procedures pursuant to Section 2.14(d), the Customer is not satisfied (acting reasonably) that the Products will conform in all respects with this Agreement and the Customer so informs the Supplier, the Supplier shall promptly take all steps necessary to ensure conformance. 
(f)Supplier shall supply Customer in good time with any instructions or other information necessary for acceptance of Products.  
Section 1.15Products which are not Acceptable.  Customer may at any time within [***]10 following the point of inspection reject any Products which, in the reasonable opinion of the Customer, do not conform to this Agreement.  A failure by Customer to reject the Products within the [***] shall be deemed an acceptance of such Products.  Subject at all times to Supplier’s right to dispute Customer’s rejection in accordance with Section 2.15(e) below:
(a)the Customer Entity shall notify the Supplier in writing of any defect by reason of which the Customer Entity alleges that the Products delivered are not in accordance with the relevant Specification;
(b)if the Customer Entity rejects any Products which are “dead on arrival” or otherwise damaged or not in accordance with the relevant Specification, the Supplier shall at its sole cost and risk and if requested by the Customer Entity:

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(i)collect the rejected Products from the Customer Entity promptly (and in any event within [***]11 of receiving notice from the Customer or any other Customer Entity requiring it to do so); and
(ii)promptly, and in any event within [***] of receiving a notice of rejection from the Customer Entity, supply replacement Products which are in accordance with the relevant Specification; 
(c)If the Supplier fails to collect rejected Products in accordance with Section 2.15(b)(i) above, the Customer Entity shall be entitled to dispose of such Products or return them to the Supplier (and where Products are returned, the Supplier shall accept the return of such Products), and the Supplier shall promptly reimburse the Customer Entity’s reasonable costs of doing so;
(d)If the Supplier fails to supply replacement Products in accordance with Section 2.15(b)(ii), the Supplier shall, at the Customer Entity’s request, refund to the Customer that part of the Fees attributable to the Products concerned; and 
(e)If there is any difference of opinion between the Parties as to whether any Products supplied by the Supplier are in accordance with the relevant Specification, the matter shall, at the request of either the Supplier or the Customer, be determined in accordance with Section 16.01.
Section 1.16Tooling; Refurbished Products.  Customer will have the right to purchase from Supplier relevant tooling and test equipment for Products to support reverse logistics processes and for Customer to perform testing within its own logistics centers.  Customer will have the right to purchase plastics and packaging from Supplier at cost for purposes of refurbishing Products.
Section 1.17Product Requirements.  Supplier shall ensure that the Products (other than any Background IP provided by Customer) comply with applicable Law, including regulatory requirements, and with any standards, certification and marking requirements set out in the relevant Product Addendum or Statement of Work.  Supplier shall have procedures in place as required to demonstrate that it takes all necessary precautions and exercises all due diligence to satisfy all standards and certifications relating to safety, legality and quality; and applicable Laws.  To the extent it is within Supplier’s control after commercially reasonable efforts, Supplier shall ensure that its own suppliers are subject to equivalent obligations to take all necessary precautions and exercise all due diligence to those set out in this Section 2.17.
Section 1.18Security and Data Privacy.  
(a)The Parties will establish collaborative processes to ensure compliance with applicable licenses and regulation, including in relation to the EU General Data Protection Regulation or (as the context permits) the General Data Protection Regulation as adopted in the United Kingdom pursuant to the European Union (Withdrawal Act) 2018 (collectively, “GDPR”) and other data privacy regulation.  This collaborative process will adhere to GDPR rules and other data privacy rules and be mutually agreed upon by the Parties to maximize data 

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(a)protections, end user privacy, and data security while enabling the fulfilment of the end user features across the companies’ infrastructure and products.  This may include updates to end user licenses, privacy statements, and other agreements.  The Parties will also collaborate on processes for data requests, “right to be forgotten” requests, and other related procedures. Moreover, the provisions of Schedule 2.18 shall apply and Supplier agrees to abide by the same.
(b)In furtherance of Supplier’s obligation to comply with applicable Law, Supplier shall ensure that, in designing the Products, it takes into consideration the impact of privacy Laws and regulatory standards on the use of the Products within the Territory. Customer may submit to Supplier any privacy enhancing features for the Products, and Supplier agrees to consider such features in good faith.
Section 1.19Production and Technical Manufacturing Information Records.  Supplier shall provide Customer with all technical documentation on the Products and related testing required for Customer to comply with its own regulatory requirements where Supplier has agreed in its reasonable discretion to distribute a Product outside of the Existing Territory; provided that in each case requirements that are specific to the Verisure Developed Products shall be the Parties’ joint responsibility.  Customer shall provide advance notice of any new countries for which Supplier needs to obtain product certification, Supplier agrees to take commercially reasonable efforts to achieve such certifications, and any out-of-pocket costs required for such new certifications shall be assumed by Customer. Further, only to the extent necessary for Customer to comply with regulatory requirements:
(a)On or before each Delivery Date for any Product, the Supplier shall provide the Customer with all required Technical Manufacturing Information and other information relating to the Product (“Product Information”), as applicable, in English.   
(b)On or before each Delivery Date for a new or modified Product, the Supplier shall provide the Customer with updates to the Technical Manufacturing Information and Product Information and all other information reasonably required, in English (or if required by Customer, in other languages), to the extent required for the preparation of user and technical materials to make available with the relevant Product.
(c)The Supplier shall keep the Technical Manufacturing Information and Product Information referred to in this Section 2.19 for a minimum period of ten years from the time it is first provided to the Customer.  During this period the Supplier shall, at the request of the Customer, provide the Customer with further copies of such Technical Manufacturing Information and Product Information on request. 
Section 1.20End Of Life Arlo Catalog Products.  Supplier is permitted to discontinue the supply of any Arlo Catalog Product during the term of this Agreement in accordance with its end-of-life policy (as updated by Supplier from time to time) (“EOL Policy”).  Schedule 2.20 sets forth Supplier’s EOL Policy as of the Effective Date.  Supplier shall provide Customer with any updates to its EOL Policy throughout the term of this Agreement.  

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One-Time Buy.  Supplier shall give Customer the opportunity to place an order for the remainder of its stock of any Arlo Catalog Product that Supplier has discontinued pursuant to its end-of-life policy for distribution in the Territory only (“EOL Product”) upon terms and timing to be agreed. 
(a)Support Period.  Supplier shall continue to support any EOL Product until the later of (i) the end of the Warranty Period for the last such EOL product sold and (ii) the longest period for which Supplier supports any other EOL Product (the “EOL Support Period”).
(b)Quality of Support.  During the EOL Support Period, Supplier shall provide support for any EOL Product at a level of service and in a manner consistent with how Supplier provides or conducts such services (or similar services) as of the date of sale of the last such EOL Product.
(c)Security Patch.  If a security issue arises with respect to any EOL Product, Supplier shall provide a security patch to Customer at Customer’s reasonable request during the term of this Agreement or, if outside of the term of this Agreement, under the Backstop TSA.  
Section 1.21Product Recalls.  In the event that the Supplier issues a Product withdrawal or recall, the Supplier acknowledges that Customer may have to re-inspect batches of the same Product previously supplied which may give rise to rejection notes in respect of Products in the distribution centers of the Customer Entities.  Supplier shall provide all necessary assistance required by the Customer Entities for the purposes of identifying Products potentially affected by the withdrawal or recall notice, and the Supplier shall, subject to the liability cap set out in Section 15.04,  reimburse Customer for (i) the costs incurred in respect of any visits to sites where the Products are installed; (ii) the costs of removing the Products from the installed sites; (iii) the costs of procuring and installing replacement products; (iv) transportation costs; and (v) costs of testing, shipment and any additional required inspections, provided that Customer can demonstrate it could not reasonably have avoided such costs by acting in accordance with established market practice or by taking all reasonable steps to monitor and mitigate such costs.
Section 1.22Other Supply Chain Terms.  
(a)Open Book Arrangement.  With respect to the supply of Products and the provision of Associated Services to Customer, Supplier shall provide an open book arrangement, providing Customer with full transparency on costs to the same level of detail as managed internally within Supplier. 
(b)Cost Reduction.  Without limiting the Total Commitment and the Minimum Annual Commitment or Supplier’s guaranteed margins, the Parties will use their reasonable best efforts to achieve a [***]12 percent ([***]%) year-over-year landed cost reduction for each Product, taking into account total combined cost implications for both Parties.
(c)Working Capital Forecasts.  Supplier shall provide [***] rolling working capital forecasts to Customer.
(d)Warranty/Returns.  Supplier’s product warranty shall include that, for a period of [***] (unless a longer time period is requested by Customer for specific 
models and/or channels in which case Customer will assume such additional costs) from the date that the Products arrive to the Delivery Location (the “Warranty Period”), the Products shall: (i) be free from defects in materials and workmanship; and (ii) conform to the relevant Product Addendum and the relevant Specification.  

12 [***] = Certain Confidential Information Omitted
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(e)Testing Materials.  Supplier will, promptly after the Effective Date, and as required during the term of this Agreement, deliver to Customer all tools, materials, supplies and documentation necessary or reasonably required for the inspection and testing of Products (“Testing Materials”), in each case to be sold to Customer at cost.  Supplier shall also provide maintenance services in respect of the Testing Materials where reasonably required, at Supplier’s then-current standard services rates.  Customer shall bear the responsibility to test and inspect Products to determine whether such Products fail to comply with the warranties in this Section.  If Customer reasonably determines that any one or more of these warranties is not met during the Warranty Period, the Supplier or its agents shall have the right to inspect such allegedly Defective Product to verify that it is defective and/or to examine the root cause of any defect and, unless the Supplier has reasonably determined that the Product is not a Defective Product (the “Non-Defective Product”) (including providing evidence of such findings) within a reasonable time after receiving the Product, the Supplier shall, at the Customer’s option having regard to the applicable circumstances, either repair, replace or refund (for the sums paid by the Customer Entity for the relevant Product(s)) the Defective Products. The parties shall agree on a Return Merchandise Authorization (RMA) process which shall include, among others, the period of time within which the Supplier shall repair or replace the Defective Products.  Supplier agrees to return to Customer any Non-Defective Products, at Customer’s cost, and the Parties will cooperate on the process for such return.
(f)User Relationship.  Customer will be the primary contact for end users and all Parties for whom Customer assumes a direct contractual relationship worldwide in respect of all Level 1 and Level 2 technical support, warranty claims and returns on Products bought from Supplier, including without limitation, retail customers within the Territory.  Supplier will be responsible for all support for Arlo Smart Services for incidents that are Level 3 or above as described in the Service Level Agreement.
(g)Marketing and Advertising Materials.  From time to time, at its discretion, Customer may purchase from Supplier, at cost, available advertising, marketing, communication, merchandising and/or display materials, samples and testers related to the Products.
Section 1.23Epidemic Product Defects.  For purposes of this Agreement an “Epidemic Defect” shall be deemed to have occurred if during the relevant Warranty Period:
(a)more than [***]13% of the Products in any one Batch on a rolling [***] basis are Defective Products due to the same or substantially the same defect, in which case all Products in that Batch shall be regarded as being Defective Products; or
(b)more than [***]% of the Products in any one or more Batches on a rolling [***] basis are Defective Products due to the same or substantially the same defect, 
in which case all Products in that product revision shall be regarded as being Defective Products; or
(c)more than [***]14% of the Products on a rolling [***] basis are Defective Products for any reason, in which case all Products in that product revision shall be regarded as being Defective Products.
Section 1.24Consequences of Epidemic Products.  In the event that an Epidemic Defect has occurred, the Supplier shall, subject at all times to the liability cap set out 

13 [***] = Certain Confidential Information Omitted
14 [***] = Certain Confidential Information Omitted
    28

in Section 15.04, reimburse the Customer for all reasonable documented costs and expenses incurred by the Customer or any member of the Customer Entities:
(a)the costs incurred in respect of any visits by any Customer Entity to sites where the Defective Products are installed;
(b)the costs of removing the Defective Products from the installed sites and returning them to the Supplier for repair or replacement;
(c)the costs of reinstalling the repaired or replaced Defective Products at their original locations;
(d)transportation costs; and
(e)costs of testing, shipment and any additional required inspections,
provided that Customer can demonstrate it could not reasonably have avoided such costs by acting in accordance with established market practice or by taking all reasonable steps to monitor and mitigate such costs.
Section 1.25Notification and Recovery Plan. In the event that an Epidemic Defect has occurred, the Parties shall implement the following procedure:
(a)within [***] following the Customer delivering a notice of a suspected Epidemic Defect to the Supplier (an “Epidemic Defect Notice”), the Supplier shall give the Customer an initial response indicating its preliminary plan for diagnosing the Epidemic Defect; and
(b)within [***] following receipt of an Epidemic Defect Notice the Supplier and the Customer shall diagnose the Epidemic Defect and the Supplier shall propose a recovery plan to:
(i)correct any possible Epidemic Defects expected to materialize in other Products;
(ii)eliminate the Epidemic Defect in all continuing manufacture of Products; and
(iii)put in place an appropriate work-around, as an interim solution, if required to minimize the impact of the Epidemic Defect on the Customer Entities.
The Supplier’s proposed recovery plan shall be subject to the Customer’s prior written approval, which shall not be unreasonably withheld or delayed.  If the Customer does not approve the Supplier’s proposed recovery plan the Customer shall propose the required changes, and the Parties shall work together in good faith in order to reach an agreed recovery plan as soon as is practical.  Once agreed, the Supplier shall promptly implement the agreed recovery plan.
Section 1.26Pass-Through Rights.  To the extent Supplier or its Affiliates have, or during the term of this Agreement obtain, rights or benefits from any ODMs and Original Suppliers that are more favorable than those provided for in this Agreement, Supplier or the applicable Affiliate will pass on such rights to Customer.
Section 1.27Provision of Information.  The Supplier shall promptly provide the Customer with all information reasonably requested by the Customer relating to 
    29

the Products, relevant Batches and/or product revisions in order for the Customer to assess whether or not an Epidemic Defect has occurred.
Section 1.28New Product Launches.  In respect of any new Product that Supplier intends to market and sell outside the Territory (“New Product”): 
(a)Supplier shall inform Customer as early as reasonably possible of the plan to launch the New Product as part of the Joint Roadmap sessions, so that Customer can plan and prepare for its launch in the Territory; and
(b)the Parties will work together to target a release date for the New Product within the Territory, and Supplier shall use commercially reasonable efforts to achieve a target release date within the Territory of [***]15 after the launch of the New Product in the United States, subject to Supplier determining whether the New Product may be legally made available in each relevant country in the Territory, the applicable certification processes and other factors outside the reasonable control of Supplier.
Article III

EXCLUSIVITY
Section 1.01Exclusivity in respect of Arlo Catalog Products.  During the term of this Agreement and subject to the terms and conditions hereunder, Customer will have the exclusive (even as to Supplier) right to commercialize and distribute the Arlo Catalog Products in the Territory, for all channels.  
Section 1.02Exclusivity in respect of Verisure Developed Products.  Supplier shall not supply (i) Verisure Developed Products or (ii) any products that incorporate any Verisure Developed IP not licensed to Supplier under a Statement of Work to any Person 

15 [***] = Certain Confidential Information Omitted
    30

(including end users) anywhere in the world, during or after the term of this Agreement, and this provision shall expressly survive any termination of this Agreement without time limitation.  
Section 1.03Exclusivity in respect of all Products.  Subject to the following sentence, Supplier shall not make, have made, supply or otherwise distribute, whether directly or indirectly, any camera-related products or accessories for sale within the Territory, other than through Customer.  Customer acknowledges and agrees that the distribution or supply of Supplier’s camera-related products or accessories by unauthorized third parties (including unauthorized sales or unauthorized resales of Supplier’s camera-related products or accessories on e-commerce platforms) will not be a breach by Supplier of this Section, provided that (i) Supplier refrains from selling the camera-related products or accessories to Persons who Supplier knows or has reason to know are unauthorized; (ii) Supplier does not endorse, support or otherwise facilitate such unauthorized sales and (iii) Supplier takes commercially reasonable efforts to prevent such unauthorized sales; provided that nothing in this Section 3.03 shall require that Supplier insert a prohibition on grey goods sales in its contracts with its own customers if such customers do not accept such provision.
Section 1.04Supply Exclusivity.  During the term of this Agreement and subject to the terms and conditions hereunder, and subject to Supplier meeting its development, supply and material Escrow obligations, Customer will exclusively source Products from Supplier.  Customer shall have the right to commercialize camera products, camera accessories and related services sourced from other suppliers, including Customer’s own developed devices and services, anywhere in the world. Solely in respect of the Verisure Security Business, if Customer is planning on sourcing camera products, camera accessories or related services from a third party, Customer will, if reasonable under the circumstances, offer such sourcing opportunity to Supplier prior to offering it to a third party.  Notwithstanding the foregoing, Customer shall have discretion on whether to choose Supplier as the vendor for such sourcing and provided, further, that Supplier will not be required to provide Associated Services (as defined below) in respect of any products sourced from a third party. 
Article IV

DEVELOPMENT SERVICES 
Section 1.01Development Services.  Effective as of the Effective Date, subject to the terms and conditions of this Agreement, Supplier shall provide to the Customer Entity the following development services (each, a “Development Service” and, collectively, the “Development Services”):
(a)develop Verisure Developed Products in accordance with specifications agreed in a Statement of Work.  [***]16; 

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(b)provide commercially reasonable ongoing development services and provide all levels of support to Customer for the ongoing maintenance and support of the Verisure Developed Products, including bug fixes, patches, updates, upgrades and similar items; and 
(c)
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(d)provide quarterly updates on plans and key technical resources for Verisure Developed Products and for support of the same.
Section 1.02Entering into Statements of Work. 
(a)Any Customer Entity may from time to time submit requests for Development Services to be provided by Supplier to such Customer Entity in accordance with the terms and conditions of this Agreement and such other terms as agreed upon by the Parties and set forth in a statement of work (each, a “Statement of Work” or “SOW”).  All Statements of Work must be in writing and signed by a duly authorized Representative of each of Supplier and the applicable Customer Entity prior to the commencement of any Development Services under such Statement of Work.  Each Statement of Work shall be: (A) deemed to incorporate by reference the terms and conditions of this Agreement, and (B) numbered and dated.  Statements of Work will be in the form set forth in Schedule 4.02(a), and will contain the following elements:
(i)a statement of the scope and objective of the project;
(ii)a detailed description of the Development Services to be performed;
(iii)identification of the Deliverables and schedule for delivery;
(iv)the name of the Person designated by each Party (each, a “Project Leader”) to serve on such Party’s behalf as the primary contact between the Parties for such Development Services;
(v)the term of such Statement of Work, including any renewal options;
(vi)the personnel, material or other resources that the Supplier shall provide to enable or support the services and any other of its obligations;
(vii)the obligations of Customer and its necessary actions required for the development of the Deliverables;
(viii)a statement of key project assumptions and dependencies;
(ix)[***]17;
(x)provisions regarding Intellectual Property ownership, if different from Section 9.02 herein;
(xi)identification of applicable export control and government security classifications for the Development Services;
(xii)description of the features being specifically developed for Customer (the “Customer Specific Features”) under the Statement of Work, if applicable;
(xiii)the technical specifications for any products resulting from the SOW, as well as standards and certifications applicable to the same, any notice or marking requirements and any other relevant technical information.

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(xiv)such other special provisions as are unique to a specific SOW.
Section 1.03Replacement of Project Leaders.  Except as otherwise mutually agreed to in writing in the applicable Statement of Work, each Party to a Statement of Work may, in its sole discretion, appoint an adequately and similarly qualified new or alternate Project Leader for each Statement of Work to manage its obligations hereunder; provided that any new Project Leader appointed by Supplier requires Customer’s prior written consent, which shall not be unreasonably withheld or delayed.  Subject to the foregoing, each Party to a Statement of Work agrees to provide the other Party with written notification if and when such Party appoints a new or alternate Project Leader.
Section 1.04Subcontracting.  Supplier may hire or engage one or more subcontractors to perform any or all of its obligations under this Agreement; provided that (a) any agreements with such subcontractors conform to the provisions set forth in this Agreement, including in connection with quality, confidentiality and intellectual property; (b) any subcontractor engaged to perform all or part of the manufacturing of the Products that is not currently engaged by Supplier or its Affiliates as of the Effective Date requires Customer’s prior written approval, which shall not be unreasonably withheld or delayed; (c) Supplier shall use the same degree of care in selecting any such subcontractor as it would if such subcontractor was being retained to provide similar services to Supplier, and no less than a reasonable degree of care and diligence; and (d) Supplier shall in all cases remain primarily responsible for and liable for the performance of all of its obligations hereunder and the actions or omissions of its subcontractors.  
Section 1.05Development Services Pricing. The pricing for the Development Services is as follows:
(a)Customer will pay Supplier USD 10,000,000 as consideration for the Development Services set forth in [***]18.  These payments will be made as set forth in Schedule 4.01(a).  When the relevant milestone has been achieved, an installment payment is fully vested and non-refundable.
(b)For Development Services other than set forth in Section 4.01(a) above, Customer will pay [***].  
Section 1.06Dedicated Team.  Supplier shall, during the process in which the Parties are agreeing on a Statement of Work, provide Customer with a dedicated core team at Supplier’s premises. Effective as of the Effective Date, Supplier also shall, during the period in which Supplier is providing Development Services under a Statement of Work, provide Customer with a co-located team at Customer’s premises to support integration work with the Customer base station where agreed by the parties in such Statement of Work.
Section 1.07Key Personnel.  Effective as of the Effective Date, Supplier shall maintain a list of key personnel in relation to the Development Services (the “Development Services Personnel List”) and provide such list to Customer on the last Business Day of each quarter.  
Section 1.08EOL of Verisure Developed Products. Supplier shall not discontinue the manufacture of any Verisure Developed Product without Customer’s prior written consent, except that, when the forecasted volumes of any Verisure Developed Product are no longer commercially feasible for Supplier based on Supplier’s supply chain, the parties will discuss in good faith the appropriate resolution through the Governance Committee.

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    34

Section 1.09Feedback.  Customer, in connection with the discussion of the Joint Roadmap or as part of its participation in the Development and Quality Control Committee, the Governance Committee or the performance of a Statement of Work, may provide to Supplier suggestions, improvements, feedback or comments regarding the functions, features, performance and other characteristics of the Arlo Catalog Products (collectively, the “Feedback”).  [***]19 Unless the Feedback is designated in advance and in writing as “Customer Feedback IP”, it will be deemed “Licensed Feedback”.  [***].  All Feedback is provided AS-IS, without warranties of any kind, and Supplier expressly disclaims all warranties regarding Feedback.  For clarity, no license is being granted herein in respect of the Customer Feedback IP.
Article V

ASSOCIATED SERVICES 
Section 1.01Associated Services.  Supplier shall provide the following associated services in connection with the Products (together, the “Associated Services”), for as long as those Products remain installed and operational (whether during the term of this Agreement or thereafter, and this Section 5.01 shall survive any termination of this Agreement) in accordance with the Service Level Agreement set forth on Schedule 5.01 hereto: 
(a)for Verisure Developed Products, work with Customer to integrate the camera experience within the Customer application, including installation and configuration (the 

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    35

“Integration Services”).  Schedule 5.01(a) sets forth more detail on the Parties’ requirements in connection with the Integration Services.   
(b)for Arlo Catalog Products, (i) enable certain functionality (to be agreed with Customer) within the Customer’s application and advanced functionality through the Supplier’s application (e.g., through direct linking between the two applications), and (ii) set up a partnership process to maintain integration going forward; 
(c)[***]20; 
(d)for all Products, develop and tailor functionalities that are consistent with the Joint Roadmap, as reasonably requested by Customer; 
(e)for all relevant Products, work with Customer to enable the viewing of images obtained from Products by the Customer monitoring centers at the triggering of alarm events; 
(f)for all Products, provide other app, cloud, backend (including data management, R&D and other relevant support services) and related services at Customer’s reasonable request and in accordance with agreed quality and service performance management processes, including enhancing the backend services, in each case consistent with the Joint Roadmap, to better meet Customer’s business requirements;  
(g)provide Customer with access and training on the functionalities and features of Supplier’s Software platform; and 
(h)provide access to and deliver any marketing and sales expertise of Supplier and know-how, training, and merchandising materials developed by Supplier to support the Products, as well as other information, training and materials required for the integration of the Products into the Customer ecosystem.
For the avoidance of doubt, the Associated Services do not include providing technical support directly to Customer’s end users and does not include any services associated with the marketing and promotion of the Arlo IP or Products in the Territory.  The Associated Services will generally incorporate Supplier’s global support policies for its own deployed Arlo Catalogue Products.  Promptly after the Effective Date, but in any event within ninety (90) days thereof, the Parties will agree on an exhibit to this Agreement that sets forth specific requirements and standards for the Associated Services.  The Supplier shall at all times in the performance of the Associated Services have regard to the Parties respective obligations under applicable data protection and privacy Laws and the requirements set forth in Section 2.18 herein.
The Parties agree that the obligations set forth in Sections 5.01(a), 5.01(g) and 5.01(h) will become effective as of the Effective Date
Section 1.02

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    36

Section 1.02Associated Services Pricing.  Effective as of the Closing Date, Customer will pay a fee for the Arlo Smart Services equal to an amount of the aggregate costs with respect to the cost categories listed in Schedule 5.02 hereof, [***].  However, if such Legacy Customers become a subscriber to Arlo Smart Services after the Closing Date, the markups above will apply to such Legacy Customers from the date their subscription commences.  For the avoidance of doubt, Customer will have no obligation to pay for any Associated Service other than those set forth in Section 5.01(c) above. 
Section 1.03Arlo Smart Services Invoicing. Supplier will issue services invoices (each a “Services Invoice”) in arrears to Customer on a monthly basis for any Arlo Smart Services caused during the prior month.  Unless the subject of a genuine dispute, correctly issued Services Invoices will be payable by Customer within [***] of receipt of the Services Invoice by Customer. All Service Invoices shall include the VAT registration number of the relevant Parties and the details of the bank account in which payment is to be made and must be sent to the address specified in the relevant Purchase Order, marked for the attention of the accounts department.  Unless otherwise agreed in writing between the Parties, the Supplier shall issue all Services Invoices in USD.  Any genuine dispute in relation to Services Invoices will be dealt with in accordance with the dispute resolution procedure set forth herein and if a genuine dispute exists in relation to only part of a Services Invoice, Customer shall pay the undisputed amount and the disputed element will be dealt with in accordance with such dispute resolution procedure.
Section 1.04Key Personnel.  Effective as of the Effective Date, Supplier will maintain a list of key personnel in relation to the Associated Services (the “Associated Services Personnel List” and, together with the Development Services Personnel List, the “Personnel Lists”) and provide such list to Customer on the last business day of each quarter.
Section 1.05Arlo Smart.  Customer shall include Arlo Smart Services within the relevant Arlo Catalog Products and, unless specified otherwise in the relevant Statement of Work, Verisure Developed Products.  Both Parties will work together on developing and tailoring functionalities as agreed from time to time for the Arlo Smart Services.
Section 1.06Access; Training.  As of the Effective Date, Supplier shall provide Customer with training on the Products and Associated Services, including any business process or material to develop, make available and service the Products, and will share material information and expertise on the same, as more fully set forth in Schedule 5.06 herein, such schedule to be updated by the Parties within [***] from the Effective Date.
Article VI
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Article VI

RECORD KEEPING AND AUDIT
Section 1.01Record Keeping.  Supplier shall, and shall procure that its subcontractors shall, at all times operate a system of accounting and maintain in accordance with Good Industry Practice complete and accurate records of all actions taken in connection with, and all supporting documentation in relation to, this Agreement and the open book arrangement detailed in Section 2.22(a) (the “Records”).  The provisions of this Section 6.01 shall survive any termination of this Agreement for a period of [***]21, except that, if requested by the Customer in writing, but at all times subject to applicable Law and the internal document retention policies of Supplier, the Supplier shall (a) delete the Records (and any version and copy of any Record) from all computer systems under its control as soon as reasonably practicable; and (b) ensure that Supplier Personnel delete the Records and such items from computers under their control as soon as reasonably practicable. All such destruction and disposal of Records under this Section 6.01 shall be carried out in a controlled and secure manner.  Supplier will promptly respond to Customer’s reasonable requests and questionnaires that Customer routinely requests from all of its other suppliers.
Section 1.02Audit.  The Customer and its authorized Representatives may procure an independent and reputable third party auditing firm (“Auditor”) to audit the Supplier’s compliance with the terms of this Agreement in respect of (i) the calculation and charging of the Fees and (ii) any repeated failures of the Supplier to materially comply with the Specifications (“Audit Scope”).  The Auditor must maintain confidentiality at all times in connection with the audit consistent with the provisions of Article XIV.  The Supplier may not be audited (whether by the Customer or its authorized Representatives) more than once in any [***] period.  
(a)Supplier shall provide the Auditor, on request, during the term of this Agreement and for [***] thereafter, subject to the Customer giving Supplier at least [***] notice and subject to Customer’s reasonable security guidelines with (i) reasonable access to, and copies of, the Records held by it and its approved subcontractors that relate to the Audit Scope; (ii) to the extent it is in Supplier’s reasonable control, reasonable access to all relevant information and premises from which obligations of the Supplier and its approved subcontractors are being or have been or should have been carried out and are necessary to conduct the audit within the Audit Scope.
(b)At the Customer’s request, if the audit demonstrates a material failure or default from Supplier in complying with the Specifications, the Supplier shall make all reasonable changes required by, and take any other action necessitated by, any audit as soon as reasonably practicable.  If the action comprises the correction of a defect in the manufacturing of the Products, the Supplier shall implement the change at no additional charge to the Customer.
(c)If any audit under this Section 6.02 reveals that the Customer has been materially overcharged, the Supplier shall reimburse to the Customer the amount of the overcharge, plus interest (at a rate of the lesser of [***] percent ([***]%) per month or

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    38

the highest rate allowed by applicable Law) within [***] of notification by the Customer of the overcharge. 
(d)If and to the extent that any audit reveals that the Supplier has overcharged the Customer and/or any Customer Entity by [***] percent ([***]%) or more of the relevant Fees, the Supplier shall be liable for the costs incurred by the Customer in procuring the Auditor to carry out the audit. 
(e)Any audit, or failure to audit, shall not in any way relieve the Supplier from its obligations under the Agreement.
Article VII

ROADMAP; GOVERNANCE
Section 1.01Joint Roadmap.  Upon or promptly after the Effective Date, but in any event no later than [***] thereafter, the Parties shall jointly establish a [***] product and technology roadmap (the “Joint Roadmap”), which shall be updated quarterly for new releases.  The Joint Roadmap shall consider both new product introductions (both Verisure Developed Products and new Arlo Catalog Products), as well as changes to, or adaptions of, features of existing Products. The Parties will determine the Joint Roadmap taking into account priorities of Customer and the feedback of other stakeholders in the Territory (e.g., retail partners and others), as well as estimated timelines, projections of commercial viability and availability for future products and services.  [***] reviews of the Joint Roadmap shall be conducted via the governance process set forth herein, to ensure that the Parties continue to track to their highest priorities.  For the avoidance of doubt, Supplier shall not be obligated to deviate from its standard release plans, as communicated in advance to Customer in writing, other than as specifically agreed at its discretion (a) through the Development and Quality Control Committee or (b) through a Statement of Work.
Section 1.02Relationship Managers.  Promptly after the Effective Date:
(a)Each Party shall appoint a relationship manager who shall act as the primary liaison between Supplier and Customer for all matters related to this Agreement and shall have overall responsibility for ensuring each Party’s performance of its responsibilities and obligations as set forth in this Agreement (each, a “Relationship Manager”). The Relationship Managers shall serve as co-chairs of the Governance Committee (as defined below), including being responsible for (i) calling and presiding over each Governance Committee meeting; (ii) preparing and circulating the agenda for each such meeting; and (iii) preparing minutes of each such meeting and providing a copy of the minutes to each Governance Committee member within a reasonable period of time after each such meeting.
(b)Supplier will, promptly after the Effective Date, appoint and designates the service manager, or managers as the case may be (the “Supplier Services Manager”).  Customer will, promptly after the Effective Date, appoint and designate the service manager, or managers as the case may be (the “Customer Services Manager”).
(c)Each Party agrees to notify the other Party of the appointment of a different Supplier Services Manager or Customer Services Manager, as applicable, if necessary, in accordance with the governance procedure set forth in Section 7.04. 
Section 1.03Development and Quality Control Committee.  Within thirty (30) days after the Effective Date, Supplier and Customer will establish a development and quality control committee (the “Development and Quality Control Committee”) that shall 
    39

be comprised of each of the Relationship Managers and three (3) executives or managers of each Party designated by that Party who have relevant experience in the following matters (i) product management; (ii) development and cloud operations; (iii) Software architecture; (iv) Development Services, implementation and delivery; (v) customer support and success; and (vi) partner management.  The Development and Quality Control Committee will establish and monitor a development plan, the Joint Roadmap and developmental milestones.  The Development and Quality Control Committee will meet at least monthly, either by telephone or in person, during the term of this Agreement and provide monthly reports to the management teams of each Party. The Development and Quality Control Committee shall also:
(a)ensure open and frequent exchange of information between the Parties regarding the activities under the Joint Roadmap; 
(b)discuss any material technical issues that arise under the Joint Roadmap; 
(c)discuss inventory liabilities and improve customer service;
(d)review current forecast numbers;
(e)monitor forecast versus order fill;
(f)review the development of the Products, agree on upgrades and updates to the Products, review the performance of the Products in the field and agree on maintenance and bug fixes (including prioritization);
(g)[***]22;
(h)[***];
(i)discuss initiatives to be implemented in application of Error! Reference source not found.(iii) herein.
(j)review key performance indicators and service levels; and 
(k)discuss an operational action improvement plan.

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    40

Prior to each meeting of the Development and Quality Control Committee, the Supplier shall provide the Customer with all reasonable information the Customer requests in relation to the Supplier and the Supplier’s performance of the Agreement.
Section 1.04Governance Committee. Within [***] after the Effective Date, Supplier and Customer shall establish a management team for the relationship (the “Governance Committee”) that shall be comprised of each of the Relationship Managers and [***] of each Party. The Governance Committee will oversee the commercial relationship between the Parties and resolve issues and mediate disputes that arise between the Parties during the course of the relationship.  If the Governance Committee is unable to resolve an issue or dispute, it will escalate such issue or dispute to the Chief Executive Officer of each Party.  The Governance Committee will meet at least quarterly during the term of this Agreement and provide quarterly reports to each Party’s management teams. 
Section 1.05Replacements.  Upon [***]23 prior written notice to the other Party, a Party may replace any of its respective members of the Development and Quality Control Committee or the Governance Committee with another individual of similar experience and seniority if it determines in its sole discretion that business reasons or ordinary employee turnover require such replacement. Furthermore, each Party may designate a substitute to attend and perform the functions of one of its members at any Development and Quality Control Committee or Governance Committee meeting, in which case such Party shall endeavor to notify the other Party thereof reasonably in advance of that meeting to the extent reasonably practicable. Each Party shall endeavor to minimize turnover with regard to its Development and Quality Control Committee or Governance Committee members to the extent reasonably practicable.
Article VIII

PAYMENTS
Section 1.01Prepayments.  Customer will pay Supplier USD 20,000,000 on the Closing Date and USD 40,000,000 on the first anniversary of the Closing Date (together, the “Prepayments”).  The Prepayments will be secured by (i) a right of offset (or setoff, counterclaim, recoupment or similar right) by Customer accounts payables to Supplier (in the first instance), and (ii) all work-in-progress associated with Products intended for Customer and in transit to the Delivery Location (in the second instance), in each case now owned or at any time hereafter acquired by Customer or in which Customer now has or at any time in the future may acquire any right, title or interest (collectively, the “Collateral”). Supplier hereby grants a security interest in all Collateral as collateral security for the delivery of the Products corresponding in value to the Prepayments. At such time as the Products corresponding in value to the Prepayments are delivered in full, the Collateral shall be automatically released from the security granted in connection herewith, without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to Supplier.  At the request of Supplier following such release, Customer shall deliver to Supplier any Collateral held by Customer, and execute and deliver to Supplier such documents as Supplier shall reasonably request to evidence such release, if any.  
Section 1.02

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    41

Section 1.03Product Payments.  Effective as of the Closing Date, Customer will pay Supplier on the basis of the direct relevant production costs of the Products (the current production costs are as set forth in Schedule 8.02 hereof), plus the appropriate Markup (the “Product Payments”). For each year in respect of which Prepayments are made, Customer will pay [***] percent ([***]%) of the full value of each Product Invoice in 2020 and [***] percent ([***]%) of the full value of each Product Invoice in 2021, in each case until an amount equal to the amount of the relevant Prepayment has been reached.  
Section 1.04Minimum Annual Commitment.  During the five (5) years commencing on January 1, 2020 (the “Commitment Period”), Customer commits to purchase in total up to USD 500,000,000 (the “Total Commitment”) of Products, with the expectation that such commitment is divided between the two businesses as follows: (i) USD [***]24 of Products for sale through the Verisure Security Business and (ii) USD [***] of Arlo Catalog Products for sale through other channels in the Territory.  By year, Customer commits to the following minimum annual commitment covering both businesses (the “Minimum Annual Commitment”):  
Year                                Minimum Annual Commitment 
2020                                USD [***]
2021                                USD [***]
2022                                USD [***]
2023                                USD [***]
2024                                USD [***]
The Prepayments, the Total Commitment and the Minimum Annual Commitment are each subject to Supplier (i) not undergoing any Late Stability Triggering Event (as defined below) and (ii) continuing to meet its development and supply obligations, provided that Customer’s obligations with respect to the Prepayments, the Total Commitment and the Minimum Annual Commitment will only be suspended for so long as Supplier fails to meet its development and supply obligations.  For clarity, the Minimum Annual Commitments are a subset of, and not in addition to, the Total Commitment.
Section 1.05Cure Right.  
(a)In the event that Customer does not meet a requirement in relation to the Total Commitment or the Minimum Annual Commitment, it will have a cure right whereby it will pay Supplier [***]. 
(b)

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(c)Within the first [***] of each calendar year (starting on January 2021), Customer will: (i) calculate the number of Products that should have been acquired to reach the prior year’s Minimum Annual Commitment but were not acquired; (ii) calculate the relevant Markup in respect of such Products; (iii) calculate the relevant payment that Customer should make pursuant to Section 8.04(a) above; and (iv) make such payment to Supplier in one payment by the end of February of such calendar year.  
Section 1.05Base Margin.  Supplier shall be paid a base mark-up of [***] percent ([***]%) during the course of the financial year.  To the extent that there is additional mark-up owed to Supplier under the terms of Section 8.02, then any such difference shall be paid to Customer within [***]25 of the end-of-year audited accounts being published for Customer.
Section 1.06Invoicing.  Supplier will issue product invoices (each a “Product Invoice”) upon delivery of the Products to the Delivery Location (DDU (Incoterms 2010)).  Unless the subject of a genuine dispute, correctly issued Product Invoices will be payable by Customer within [***] of receipt of the Product Invoice by Customer. All Product Invoices submitted in relation to Purchase Orders must bear the relevant Purchase Order number and contain any other information required to be provided as set out in the relevant Product Addendum.  All Product Invoices shall include the VAT registration number of the relevant Parties and the details of the bank account in which payment is to be made and must be sent to the address specified in the relevant Purchase Order, marked for the attention of the accounts department.  Unless otherwise agreed in writing between the Parties, the Supplier shall issue all Product Invoices in USD.  Any genuine dispute in relation to Product Invoices will be dealt with in accordance with the dispute resolution procedure set forth herein and if a genuine dispute exists in relation to only part of a Product Invoice, Customer shall pay the undisputed amount and the disputed element will be dealt with in accordance with such dispute resolution procedure.
Section 1.07General.  Unless otherwise specified in this Agreement or agreed by the Parties from time to time in writing: 
(a)[***]; 
(b)the Customer Entities shall only be obliged to make Product Payments which are supported by accurate Product Invoices including details of the Products and any other information required to be provided as set out in the relevant Statement of Work and Customer shall, or shall procure that the relevant Customer Entity shall, notify Supplier as soon as practicable in the event a Product Invoice is issued which does not comply with this Section; and
(c)Supplier hereby acknowledges and agrees that any payment made by any Customer Entity to the Supplier of any Fees, in whole or in part, from time to time in fulfilment of Customer’s obligation to pay those Fees shall be deemed to be payment by the Customer to the Supplier and shall satisfy and discharge in full the Customer’s obligations to pay the relevant Fees and the Supplier shall accept, or be deemed to have accepted, payment by the relevant Customer Entity on behalf of Customer. Customer hereby acknowledges and agrees that it 

25 [***] = Certain Confidential Information Omitted
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(d)remains liable to pay the Fees in the event a Customer Entity fails to pay such Fees when due and payable to Supplier. 
Section 1.08Taxes.
(a)Sales Tax or Other Transfer Taxes.  Fees are exclusive of, and Customer shall bear and timely pay, any and all sales, use, value-added, transaction and transfer taxes (and any related interest and penalties) imposed on, or payable with respect to, any Fees payable by Customer pursuant to this Agreement; provided that to the extent such taxes are required to be collected and remitted by Supplier and its Affiliates, Customer shall pay such taxes to Supplier or the applicable Affiliate within a reasonable time following receipt of an invoice from Supplier or such Affiliate.  The Parties will cooperate with each other in good faith to obtain all available exemptions from and reductions to such taxes.
(b)Withholding Tax and Other Similar Taxes.  If Customer determines in good faith that any amount is required under applicable Law to be withheld or deducted in respect of any tax from any payment by Customer under this Agreement, the Parties will take reasonable steps to cooperate with each other in good faith to obtain all available exemptions from and reductions to such taxes.  In all cases where payments will be made to Supplier, Customer shall (i) make any such required withholding or deduction from the amount payable to Supplier, (ii) timely pay the withheld or deduct amount to the relevant Governmental Authority in accordance with applicable Law and (iii) if requested by Supplier, promptly forward to Supplier a withholding tax certificate evidencing such payment by Customer to the Governmental Authority.
Article IX

INTELLECTUAL PROPERTY
Section 1.01Background IP.  Each Party will retain all right, title and interest in any of its Background IP, subject to any licenses granted in this Agreement.  
Section 1.02Customer IP.  
(a)Verisure Developed IP and Supplier SOW Technology.  Customer will own all Intellectual Property rights created under a Statement of Work in relation to Customer Specific Features (“Verisure Developed IP”).  Supplier will own all Intellectual Property rights in the Supplier SOW Technology.  Supplier shall take all actions necessary to effect Customer’s ownership of the Verisure Developed IP, including by executing such papers and performing such lawful acts as Customer deems to be necessary to allow Customer to perfect all right, title, and interest in all Verisure Developed IP, including executing, acknowledging, and delivering to Customer, upon request, applications for registration and assignments of Verisure Developed IP (and any Intellectual Property and Trademark rights therein). To the extent any Verisure Developed IP is not deemed to be the sole and exclusive property and Intellectual Property of Customer (whether as a “work made for hire” or by virtue of the foregoing agreement), Supplier hereby irrevocably transfers and assigns (and agrees to so transfer and assign) to Customer all rights to Verisure Developed IP.  Customer shall have sole discretion to control worldwide
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(a)prosecution and enforcement of the Verisure Developed IP.  This Section 9.02(a) will become effective as of the Effective Date.
(b)Trademark Grant-Back License.  Effective as of the Closing Date, and during the term of this Agreement, [***]26.  
Section 1.03Customer License to Supplier.  [***]27. This Section 9.03 will become effective as of the Effective Date.
Section 1.04VDP License.  [***].  The VDP License in this Section 9.04 is deemed granted on the Effective Date, but Customer covenants not to exercise its rights until (i) the termination of this Agreement (other than a termination under Section 11.03(d)), (ii) the occurrence of a Late Stability Triggering Event or (iii) the occurrence of a Supply Triggering Event.  Customer’s license to any Arlo IP in the Arlo Smart Services contained within the VDP License applies only in respect of the occurrence of a Late Stability Triggering Event.  Customer will retain its rights under the license in this Section 9.04 in the event of bankruptcy or other insolvency of Supplier.  The license in this Section 9.04 to Arlo IP will be subject to a royalty payment to Supplier equaling [***] percent ([***]%) of the finished good invoice price and be paid upon, and for so long as, Customer exercising its right to manufacture and have manufactured the Verisure Developed Products.  From and after the initial exercise of such license, Supplier shall provide a quarterly royalty report, together with all relevant documentation demonstrating the royalty calculation, within 30 days of the end of each quarter showing the royalty payable by Customer for the VDP License; and Customer shall pay the associated royalty along with such report.  
Section 1.05

26 
27 [***] = Certain Confidential Information Omitted
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Section 1.06Backstop License.  [***]28.  The Backstop License in this Section 9.05 is deemed granted on the Effective Date, but Customer covenants not to exercise its rights until the occurrence of a Late Stability Triggering Event (or Supplier providing an Adverse Notification with respect thereto).  In case of a cure (where possible) of a Late Stability Triggering Event, either Party may request the other Party to enter into non-binding discussions in relation to the Backstop License as part of the non-binding discussions described in Section 12.03(d).  Customer will retain its rights under the license in this Section 9.05 in the event of bankruptcy or other insolvency of Supplier.  The above license to Arlo IP will be subject to a royalty payment to Supplier equaling [***] percent ([***]%) of the finished good invoice price and be paid upon the exercise, and for so long as the exercise continues, of the Backstop License.  From and after the initial exercise of such license, Supplier shall provide a quarterly royalty report, together with all relevant documentation demonstrating the royalty calculation, within 30 days of the end of each quarter showing the royalty payable by Customer for the Arlo IP; and Customer shall pay the associated royalty along with such report.
Section 1.07Additional Arlo Licenses.  [***].  To the extent any licenses are required for the support, refurbishment and maintenance of the Products in the ordinary course or Customer’s exercise of its rights in the Development Services or the Associated Services, the Parties will cooperate in good faith to grant and establish the same.  This Section 9.06 will become effective as of the Closing Date.
Section 1.08Registration of License.  Customer may register a short form version of any of the licenses set forth in this Article IX at the relevant Intellectual Property and Trademark registry, and Supplier shall provide all reasonable assistance (at its own cost) in respect of the same.  
Section 1.09

28 [***] = Certain Confidential Information Omitted
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Section 1.010Prosecution.  Supplier shall file for patent and registered design protection in the Territory for its material patentable innovations and industrial designs of Products, and shall otherwise extend the patent and industrial design protection it has in the United States to the Territory. Supplier shall maintain any registrations (including by way of payment of renewal fees) in the Territory and shall use reasonable endeavors to prosecute any applications for the Arlo IP (including extending existing US patent applications, design applications and where possible design registrations to the Territory) in each case where deemed appropriate by Supplier in light of its global patent strategy and without limiting Supplier’s rights to enter into patent-related cross-licenses, settlement agreements and substantially similar agreements, subject to the next sentence.  To the extent Supplier decides in its reasonable business judgment to abandon a patent or design application in the Territory, Supplier will give Customer an opportunity to continue such application in Supplier’s name at Customer’s cost; provided that Supplier will still be able to abandon a patent application if (i) it is required to do so under a settlement agreement, or (ii) if Supplier concludes that a negative decision will be issued by the Intellectual Property office in response to Customer’s proposed course of action and such negative decision is very likely to have an adverse effect in a corresponding United States patent application that is pending at the time. Supplier shall, promptly after the Effective Date and from time to time, share its global patent strategy with Customer, provide Customer an opportunity to provide feedback and input on such strategy in respect of the Territory and the overall geographical coverage of Supplier’s patent and design filings, and consider such feedback and input in good faith.  Supplier shall provide to Customer any reasonable assistance that Customer may require in order to file, prosecute and defend applications for Intellectual Property protection regarding Verisure Developed IP. This Section 9.08 will become effective as of the Effective Date.
Section 1.011Enforcement.  Supplier will control enforcement of its Intellectual Property rights in the Territory provided that the Parties will cooperate in good faith in connection with the same. Supplier agrees to send cease and desist letters and contact retailers, as appropriate, in the event that the Arlo IP is being misused or infringed by third parties. Supplier shall provide Customer with all reasonable cooperation and assistance as requested by Customer in order for Customer to enforce or defend its rights in the Verisure Developed IP.  This Section 9.09 will become effective as of the Closing Date.
Section 1.10Branding.  Supplier acknowledges that, pursuant to the APA, Customer is acquiring all right title and interest in all of Supplier’s trademarks and logos, whether registered or unregistered (and derivatives thereof) (“Arlo Brand”) in the Territory, and Customer will have the sole right to use, protect and enforce the Arlo Brand in the Territory in its sole discretion.  Customer and Supplier will cooperate on co-branding and in respect of the commercialization and marketing of the Products by Customer, including in respect of use on websites, domain names, social media identifiers and other online media.  The guidelines for use of the Arlo Brand are set forth on Schedule 9.10 hereof, as such schedule is amended from time to time.  The Parties agree that the Arlo Catalog Products will be branded with an Arlo Brand.  Customer will have sole discretion on the branding for the Verisure Developed Products.  
Section 1.11Arlo Brand License Outside the Territory.  [***]29
[***].
Section 1.12Covenants.  Effective as of the Effective Date, Supplier hereby covenants to Customer that:

29 [***] = Certain Confidential Information Omitted
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(a)Supplier shall provide assurances to Customer that the Arlo IP has not been and will not be licensed to any third parties in contravention of the licenses set forth in Sections 9.04, 9.05 and 9.06.
(b)Supplier shall not enter into any agreement that contradicts, modifies, terminates or supersedes any of its obligations under this Agreement.  
(c)Other than to commercial lenders on arms-length terms, Supplier shall not grant any kind of encumbrance or lien on any of the Arlo IP or the Arlo Brand to a third party, unless such third party acknowledges the existence of this Agreement in writing and agrees not to restrict or challenge Supplier’s ability to abide by the relevant terms.
(d)Other than the remedies granted to commercial lenders in the event of default of a commercial loan, Supplier shall not sell, transfer or dispose of any Arlo IP or Arlo Brand to any third party; unless such third party acknowledges the existence of this Agreement in writing and agrees to abide by the relevant terms.  
Any lien, encumbrance or transfer in violation of the foregoing is null and void at the outset and of no effect.
Section 1.13Escrow.  Supplier shall, promptly after the Effective Date, deposit into escrow (the “Escrow”) the Source Code for any Software embedded in, or used in connection with the development of, the Products (including the back-end), in each case owned by Supplier or its Subsidiaries, along with any related documentation and materials (including Technical Manufacturing Information and Product Information) and any Software comprised in the Arlo IP (collectively, the “Escrow Materials”).  Supplier will, from time to time, provide Customer with a list of all third-party Software embedded in the Escrow Materials and required to use the Escrow Materials.  Supplier agrees, during the term of this Agreement, to deposit into such Escrows (on a quarterly basis and for every major new release or similar item, in each case within ten (10) days thereof) any updates to the Escrow Materials.  The agreed escrow agreement for any Escrow Materials in the Arlo Catalog Products is set forth on Schedule 9.13 hereof. The Parties agree that the Escrow agreement for any Escrow Materials in the Verisure Developed Products will be entered into upon the completion of the first SOW entered into by the Parties and will have terms substantially similar to the agreement on Schedule 9.13.  The Escrow agreements will be deemed “supplementary to” this Agreement for purposes of bankruptcy law.  The conditions for release of Escrow shall be limited to the occurrence of a Late Stability Triggering Event or, in respect of Verisure Developed Products, the occurrence of a Supply 
[***] = Certain Confidential Information Omitted

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Triggering Event or the termination of this Agreement (other than a termination under Section 11.03(d); and provided, further, that Customer’s access to any Arlo IP in the Arlo Smart Services applies only in respect of a Late Stability Triggering Event).  Customer will pay for the reasonable and documented fees of the Escrow agent (reasonably acceptable to Customer) and for the expense of one employee solely dedicated to fulfilling Customer’s obligations under this Section 9.13 (provided, Supplier shall have received Customer’s prior written consent for any such fees and or expenses) (collectively, the “Escrow Costs”).  During the period in which Supplier is in material breach of its obligations under this Section 9.13 or the separate escrow agreement, Supplier shall be liable for any Escrow Costs.
Section 1.14Third Party IP.  Supplier shall not incorporate any Open Source Software in the Verisure Developed Products without Customer’s prior written consent. Supplier shall not incorporate any other third-party Intellectual Property in the Verisure Developed Products without Customer’s consent if such incorporation requires consent from the third party. This Section 9.14 will become effective as of the Effective Date.
Section 1.15Brexit.  In the event that the effect of Brexit reduces the Arlo IP, Supplier shall use its reasonable endeavors to mitigate the impact (for example, by seeking UK applications and registrations for rights only registered at an EU level).  In the event that, as an effect of Brexit, the UK does not adopt an international exhaustion doctrine, the Parties will consider what other licenses are required for Customer to exercise its rights under this Agreement in the UK.
Section 1.16Reservation of Rights.  All of the rights granted hereunder are explicitly stated herein and nothing in this Agreement shall be construed to transfer any proprietary ownership interest whatsoever in or to any Intellectual Property rights of Supplier or Customer, or to grant any implied rights whatsoever or any right, title or interest in or to any of the Intellectual Property rights of Customer or Supplier, except the rights explicitly granted pursuant to this Agreement.  
Article X

ADDITIONAL AGREEMENTS
Section 1.01End User Relationship. Customer will control the relationship with the end users of the Arlo Catalog Products sold in the Territory and with the end users of the Products sold through the Verisure Security Business worldwide.  Customer has sole and exclusive responsibility to perform any and all Level 1 and Level 2 technical support for end users of its Products worldwide.  Supplier is responsible for all support for Arlo Smart Services for incidents that are Level 3 or above as described in the Service Level Agreement.
Section 1.02Other Reporting Obligations.  Upon Customer’s request, to be made no more than twice per calendar year, Supplier shall deliver to Customer a report, certified by a Supplier employee ranking manager or senior, setting forth for such calendar quarter a description of Supplier’s finances and financial stability for such calendar quarter; provided that this obligation shall be deemed satisfied, and no separate report is required to be 
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Section 1.03given to Customer, to the extent Supplier is reporting the same on the Securities Exchange Commission’s EDGAR systems.  
Section 1.04User Experience Updates.  For relevant Arlo Catalog Products, Supplier shall (A) update the Supplier application and other Supplier platform user experience to include information on Customer service options, benefits and features as allowed by Apple and Google policies and (B) work with Customer to advertise and promote the Verisure Security Business where operated; in each of clause (A) and (B), (i) in the Territory and (ii) outside the Territory, in respect of the unique part numbers sold through the Verisure Security Business.
Section 1.05Compliance with Law.  Effective as of the Effective Date, each Party will be responsible for complying with all applicable Laws and regulations, including, but not limited to export control laws, in performing its obligations under this Agreement and each Party shall reasonably cooperate with the other and provide any information reasonably requested by the other Party in connection with such compliance obligations.  Neither Supplier nor its Affiliates shall be obligated to provide any Products which, if provided, would (in Supplier’s determination, with advice of counsel) violate any Law.  
Article XI

TERM; TERMINATION
Section 1.01Initial Term.  The initial term of this Agreement will be five (5) years (the “Initial Term”) starting on the Effective Date. 
Section 1.02Renewal.  This Agreement will automatically renew for additional five (5) year terms on the expiration date of the applicable term (the “Expiration Date”) with its currently applicable terms, excluding any prepayments or volume commitment terms (including the Prepayments, Minimum Annual Commitment and Total Commitment) (the “Applicable Terms”), unless either party provides written notice to the other of its intent to renegotiate this Agreement at least twelve (12) months prior to the Expiration Date.  If a Party provides written notice of its intent to renegotiate, the Parties will negotiate any revised terms in good faith.  If the Parties fail to reach an agreement on new terms by the date which is six (6) months prior to the Expiration Date, Customer will have the right to terminate this Agreement or elect to renew this Agreement for a five (5) year term with its Applicable Terms by providing written notice at least six (6) months prior to the Expiration Date.  If no action is taken by Customer, this Agreement will automatically renew for additional five (5) year terms.
Section 1.03Termination.  
(a)Customer will have the right to terminate this Agreement at any time after the Effective Date and immediately by providing written notice if Supplier (i) experiences a Change of Control without Customer’s prior written consent (an “Arlo Change of Control”), subject to the next sentences; (ii) assigns this Agreement to a third party other than an Affiliate without Customer’s prior written consent; (iii) materially breaches this Agreement and fails to 
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(a)cure such breach within forty five (45) days’ notice; or (iv) ceases to operate in the ordinary course or undergoes an Insolvency Event; (each a “Termination Event”).
(i)Supplier shall provide notice to Customer as soon as reasonably practicable and in any event within ten (10) business days of the execution of the definitive agreement with respect to such Arlo Change of Control, and Customer must provide notice of termination on such basis within sixty (60) days of the consummation of the Arlo Change of Control.  
(ii)In the event of a termination pursuant to an Arlo Change of Control, if such termination occurs: (A) between the Effective Date and the Closing Date, Customer shall not be liable for any termination fee, (B) in the first year following the Closing Date, Customer shall not be liable for any termination fee, (C) in the second year following the Closing Date, Customer shall pay a termination fee equal to [***]30 percent ([***]%) of the Markup on the Minimum Annual Commitment for 2021, (D) in the third year following the Closing Date, Customer shall pay a termination fee equal to [***] percent ([***]%) of the Markup on the Minimum Annual Commitment for 2022, (E) in the fourth year following the Closing Date, Customer shall pay a termination fee equal to [***] percent ([***]%) of the Markup on the Minimum Annual Commitment for 2023 and (F) in the fifth year following the Closing Date, Customer shall pay a termination fee equal to [***] percent ([***]%) of the Markup on the Minimum Annual Commitment for 2024.  
(iii)In the event that Customer waives its right to terminate upon an Arlo Change of Control or does not exercise such right within the sixty (60) day period set forth above, this Agreement will continue in full force and effect and any licenses set forth herein may be exercised at the time set forth herein.
(b)Supplier will have a right to terminate this Agreement at any time after the Effective Date (i) for Customer’s material breach which has not been cured within forty-five (45) days or (ii) if Customer ceases to operate in the ordinary course or undergoes an Insolvency Event.
(c)If at any time after the Effective Date, Supplier is in material breach of the delivery or development obligations under this Agreement and fails to cure such breach within forty-five (45) days, or otherwise fails to meet certain milestones set by the Development and Quality Control Committee, Customer will no longer be obligated to pay the Minimum Annual Commitment, the Total Commitment or the remaining Prepayment until such breach is cured or such milestone is reached.
(d)If the APA terminates prior to Closing (as defined in the APA), then this Agreement will be suspended and (i) Supplier will assign, transfer, deliver and convey to Customer, in a mutually agreed format, all deliverables, information and materials developed for Customer during the term of this Agreement; (ii) Supplier will not be required to refund to Customer any payments made prior to such termination (including under any Statement of Work entered prior to such date); and (iii) the Parties will, for a seven (7) week period, enter into good faith discussions on the terms of a supply agreement for the Arlo Catalog Products and the 

30 [***] = Certain Confidential Information Omitted
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(e)Verisure Developed Products. Upon the expiration of the above seven week period without the Parties entering into a new supply agreement, this Agreement will automatically terminate.
Section 1.04Survival. The following provisions will survive the termination or expiration of this Agreement:
(i) Section 3.02, 
(ii) Section 5.01, (except that notwithstanding any contrary provisions in Section 5.01, Section 5.01 will not survive a termination of this Agreement that occurs pursuant to Section 11.03(d));
(iii) Section 6.01, 
(iv) Section 9.10, (provided that Section 9.10 will not survive a termination of this Agreement that occurs pursuant to Section 11.03(d));
(v) Sections 12.01(b), 12.02(a), 12.02(c), 12.03(a) (other than where termination occurs for Customer breach pursuant to Section 11.02(b)), 12.03(d), 12.03(e), 12.04 (other than where termination occurs for Customer breach pursuant to Section 11.02(b)), and 12.05, in each case provided that (I) the right to exercise the VDP License or the Backstop License will survive only if the relevant triggering event has occurred prior to termination of the Agreement and (II) the foregoing rights under Article XII will not survive a termination of this Agreement that occurs pursuant to Section 11.03(d));
(vi) Article XIV, 
(vii) Article XV, 
(viii) Article XVI, and 
(ix) any other provision of this Agreement that by its nature is meant to survive (provided that, the survival rights of the provisions specifically addressed in this Section 11.03 will survive as and to the extent set forth in this Section 11.03).
Article XII
BUSINESS CONTINUITY
Section 1.01Triggering Events.
(a)Early Stability Triggering Event.  Any of the following from and after the Effective Date shall constitute an early stability triggering event (an “Early Stability Triggering Event”) unless Supplier provides prior notice to Customer and Customer provides prior written consent (not to be unreasonably withheld (in Customer’s reasonable discretion)) provided that, clauses (i), (iii), (iv) and (vi) below shall only be applicable to the extent Supplier is, at the time of such event or at any time thereafter while such events are continuing, in an Adverse Liquidity Position:
(i)
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(i)Supplier or any of its Material Subsidiaries fails to pay within seven (7) Business Days after the same becomes due (without giving effect to any cure period contemplated thereunder or thereby) (x) any of its material payment obligations, that is not in connection with an outstanding bona fide dispute, to third parties in any material respect or (y) any payment obligations owed to Customer hereunder or to any lenders under or to any holders of any material Indebtedness of Supplier or any of its Subsidiaries;
(ii)Supplier or any of its Material Subsidiaries fails to perform or observe any covenant, agreement or condition contained in any of the documentation in respect of any material Indebtedness of Supplier or any of its Subsidiaries on its part to be performed or observed, or any other event occurs, the effect of which default or other event is to cause, or to permit the lender(s) or holder(s) of such Indebtedness (or a trustee or agent on behalf of such lender(s) or holder(s) or beneficiary or beneficiaries) to cause such Indebtedness to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Indebtedness to be made, prior to its stated maturity (each, a “Debt Default”), and such Debt Default continues uncured for thirty (30) days (without giving effect to any cure period contemplated thereunder or thereby);
(iii)Supplier or any of its Material Subsidiaries fails to perform or observe any covenant or agreement or condition contained in any of its material contracts, leases or licenses or any documentation in connection therewith to which Supplier or such Subsidiary is a party on its part to be performed or observed, and such failure continues for [***]31 (without giving effect to any cure period contemplated thereunder or thereby);
(iv)Supplier or any of its Material Subsidiaries fails to pay within [***] after the same becomes due (without giving effect to any cure period contemplated thereunder or thereby) the salary of a material number of its employees;
(v)The occurrence of a Material Adverse Effect;
(vi)Supplier fails to timely file its quarterly or annual reports with the Securities Exchange Commission (provided that filings pursuant to Form 12b-25 shall be considered timely filings for purposes of the foregoing) or the de-listing or suspension of trading for more than one trading day of Supplier’s common stock from the New York Stock Exchange (other than in connection with a going-private transaction);
(vii)Supplier or any of its Material Subsidiaries enters into any discussions to restructure a material portion of its Indebtedness or the creation by Supplier of any restructuring committee or similar committee; or
(viii)Supplier or any of its Material Subsidiaries admits in writing to any of the foregoing, as applicable.
(b)

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(b)Late Stability Triggering Event.  Any of the following from and after the Effective Date shall constitute a late stability triggering event (a “Late Stability Triggering Event” and, collectively with an Early Stability Triggering Event, the “Triggering Events”):
(i)(A) if a Debt Default continues for [***] (without giving effect to any cure period contemplated under or by such debt document) or (B) if an Early Stability Triggering Event arising under Section 12.01(a)(v) continues for thirty (30) days;
(ii)The occurrence of an Insolvency Event;
(iii)Supplier or any of its Material Subsidiaries enters into a restructuring support agreement, plan support agreement or any other similar agreement (a “Support Agreement”) with holders of debt of Supplier or any of its Material Subsidiaries or Supplier or any of its Material Subsidiaries takes any corporate action authorizing the execution of such agreement; provided that the foregoing shall not constitute a Late Stability Triggering Event if (A) Supplier is not in breach of any of its obligations hereunder and (B) the effectiveness of such Support Agreement is conditioned (which condition may not be waived by any party to such Support Agreement without the prior written consent of Customer) on the agreement by the Parties thereto that (1) this Agreement shall not be terminated, canceled, rejected, amended, supplemented or otherwise modified pursuant to the transactions contemplated by such Support Agreement without Customer’s prior written consent, (2) Supplier, or any successor in interest, shall continue to perform hereunder after giving effect both to such Support Agreement and to the transactions contemplated thereby, and (3) any modifications, amendments, supplements to and any waiver of any of the conditions and covenants in respect of clauses (1) and (2) above, shall be satisfactory to Customer; or
(iv)Supplier or any of its Material Subsidiaries admits in writing to any of the foregoing, as applicable.
(c)Officer’s Certificate.  On the last Business Day of each quarter starting on the Effective Date, Supplier will deliver a certificate to Customer, signed on behalf of Supplier by an executive officer of Supplier, stating that no Triggering Event has occurred and that there is no reasonable expectation that any such event might occur.
(d)Prompt Reporting.  If, at any time after the Effective Date, Supplier becomes aware of any event, change, circumstance, occurrence, effect or state of facts (each an “Adverse Event”) that, individually, or in the aggregate, has resulted in, or would reasonably be expected to result in, a Triggering Event, Supplier will provide Customer with prompt written notice of such Adverse Event (any such notice or any failure to provide the officer’s certificate referenced above, an “Adverse Notification”) and any additional information related to such Adverse Event reasonably requested by Customer.
Section 1.02Step-In Rights.  
(a)Supply Step-In Right. Notwithstanding any termination of this Agreement, upon, and following, the occurrence of a Supply Triggering Event:
 [***] = Certain Confidential Information Omitted
(i)
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(i)Customer may exercise the VDP License and, for the avoidance of doubt, Customer will pay the associated royalties; 
(ii)Customer may access the Escrow for the Verisure Developed Products and release the Escrow Materials for the Verisure Developed Products (but not any Escrow Materials for Arlo IP in the Arlo Smart Services); and 
(iii)Supplier will respond promptly to Customer’s reasonable requests for information and facilitate the transition of manufacturing, supply, distribution, and logistics related to the Verisure Developed Products.
(b)Early Stability Step-In Right. Upon, and following, the occurrence of an Early Stability Triggering Event, Customer in its sole discretion may, immediately upon providing written notice by Customer to Supplier, cause the Early Stability Backstop Services to become effective (the “Early Stability Step-In Right”).  For the avoidance of doubt, Customer may not exercise its Early Stability Step-In Right if Supplier has cured any Adverse Event that would have been an Early Stability Triggering Event within the requisite time periods.
(c)Late Stability Step-In Right. Upon, and following, the occurrence of a Late Stability Triggering Event, Customer (1) will exercise the VDP License and the Backstop License and, for the avoidance of doubt, Customer will pay the associated royalties and (2) may, in its sole discretion, take one or more of the following enforcement actions (each of the enforcement actions set forth in clauses (1) and (2), a “Late Stability Step-In Right” and, together with the Early Stability Step-In Rights, the “Step-In Rights”) immediately upon providing written notice by Customer to Supplier:
(i)cause the Late Stability Backstop Services (as defined below) to become effective;
(ii)access the Escrow and release the Escrow Materials for the Arlo Catalog Products and the Verisure Developed Products; and
(iii)access all other information, technology, and Supplier Personnel necessary to allow Customer to continue to (i) support end-users to which it has sold Products; and (ii) commercialize, support, develop, manufacture, have made and otherwise use the Products.
Section 1.03Backstop Services.  
(a)Termination Backstop Services.  Upon the termination of this Agreement, Customer may exercise the VDP License and Supplier shall provide the following services (the “Termination Backstop Services”) for up to a [***]32 term after termination, (a) at a level of service and in a manner, quantity and quality that Supplier provides or conducts such services (or similar services) as of the date of such termination (but in any event, in a professional and competent manner) and (b) on such other terms to be mutually agreed: 
(i)respond promptly to Customer’s reasonable requests for information; 
(ii)

32 [***] = Certain Confidential Information Omitted
    55

(iii)continue, pursuant to the terms of this Agreement, to provide Customer with (a) Products and (b) Development Services for a period of [***] (the “Supply Ramp Down Period”); 
(iv)facilitate the transition of the Associated Services to Customer or its designee (excluding Arlo Smart Services and its associated Intellectual Property owned by Supplier) on a direct incurred cost basis;
(v)facilitate the transition of manufacturing, supply, distribution, and logistics related to the Verisure Developed Products on a direct incurred cost basis and, for the avoidance of doubt, Customer shall pay the associated royalties;
(vi)provide Associated Services with respect to the Products; and
(vii)other services to be mutually agreed.
(b)Early Stability Backstop Services.  If Customer exercises its Early Stability Step-In Right, Supplier shall provide the following services (the “Early Stability Backstop Services”) for up to a [***]33 term after the exercise of an Early Stability Step-In Right (x) at a level of service and in a manner, quantity and quality that Supplier provides or conducts such services (or similar services) as of the date of Customer’s exercise of the Early Stability Step-In Right (but in any event, in a professional and competent manner) and (y) on such other terms to be mutually agreed: 
(i)respond promptly to Customer’s reasonable requests for information; 
(ii)make available Supplier’s key personnel related to the Associated Services and Development Services including those identified on the Personnel Lists on a direct incurred cost basis;
(iii)provide training to Customer personnel in order to enable Customer to continue to manufacture, maintain, service, develop and make use of (a) the Products, (b) Associated Services and (c) Development Services independently of Supplier on a direct incurred cost basis;
(iv)provide Associated Services with respect to the Products; and
(v)other services to be mutually agreed.
(c)Suspension of the Early Stability Backstop Services.  The Early Stability Backstop Services will be suspended after Supplier provides written evidence, to the reasonable satisfaction of Customer, that Supplier has cured the Early Stability Step-In Right, provided that such suspension will not take effect within [***] of the Early Stability Triggering Event.
(d)Discussions following a Late Stability Triggering Event.  When a Late Stability Triggering Event that is capable of being cured, is in fact cured, then the Parties will 

33 [***] = Certain Confidential Information Omitted
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(e)enter into non-binding discussions regarding the potential cessation of any applicable Late Stability Step-In Rights on terms to be agreed between the Parties at such time.
(f)Late Stability Backstop Services.  If Customer exercises its Late Stability Step-In Right, Supplier shall provide the following services (the “Late Stability Backstop Services”) for a period of up to [***] after the exercise of such Late Stability Step-In Right (a) at a level of service and in a manner, quantity and quality that Supplier provides or conducts such services (or similar services) as of the date of Customer’s exercise of a Late Stability Step-In Right (but in any event, in a professional and competent manner) and (b) on such other terms to be mutually agreed: 
(i)respond promptly to Customer’s reasonable requests for information; 
(ii)continue, pursuant to the terms of this Agreement applicable on the date of Customer’s exercise of the Late Stability Step-In Right, to provide Customer with (a) Products and (b) Development Services for a period of two years after the exercise of such Late Stability Step-In Right (the “Late Stability Ramp Down Period”);
(iii)grant Customer any necessary additional licenses required to manufacture, maintain, service, develop and make use of (a) the Products, (b) Associated Services and (c) Development Services; 
(iv)facilitate the transition of the Associated Services and Development Services to Customer to enable Customer’s continued manufacturing, maintenance, servicing, development and use of the Products with Associated Services or Development Services on a direct incurred cost basis; 
(v)facilitate the transition of manufacturing, supply, distribution, and logistics related to the Products (in the case of Customer’s exercise of the Stability Step-In Right) on a direct incurred cost basis; 
(vi)make available Supplier’s key personnel related to the Associated Services and Development Services including those identified on the Personnel Lists on a direct incurred cost basis;
(vii)provide training to Customer personnel in order to enable Customer to continue to manufacture, maintain, service, develop and make use of (a) the Products, (b) Associated Services and (c) Development Services independently of Supplier on a direct incurred cost basis; and 
(viii)provide Associated Services with respect to the Products, provided that Customer pays a reasonable royalty fee with respect thereto after migration; and
(ix)other services to be mutually agreed.
(f)Termination of the Backstop Services.  Customer may terminate any or all of the Backstop Services at any time in its sole discretion.
 [***] = Certain Confidential Information Omitted

Section 1.04
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Section 1.04Backstop Arrangements.  Supplier shall provide all support necessary or desirable for Customer to negotiate the Backstop Arrangements with ODMs and Original Suppliers through step-in contracts, pass-through rights or otherwise with the aim of having all Backstop Arrangements executed no later than [***]34 after the Effective Date.  Such Backstop Arrangements must, at a minimum, permit Customer to continue to manufacture (i) the Products independently of Supplier in the event of a Late Stability Triggering Event or (ii) the Verisure Developed Products independently of Supplier in the event of a Supply Triggering Event or Late Stability Triggering Event.  As part of the negotiation of the Backstop Arrangements, Customer shall be entitled, including through its Representatives, to have such reasonable access to the properties, businesses, operations, personnel and books and records, in each case, pertaining to the ODMs and Original Suppliers (and Supplier’s relationships therewith) as it reasonably requests in connection with Customer’s efforts to negotiate the Backstop Arrangements to the extent that Supplier is permitted to share such information.  Any such access and examination shall be conducted on reasonable advance written notice, during regular business hours and under reasonable circumstances and shall be subject to restrictions under applicable Law.  Supplier shall use its commercially reasonable efforts to cause the Representatives of Supplier and its Subsidiaries to reasonably cooperate with Customer and its Representatives in connection with such access and examination, and Customer and its Representatives shall reasonably cooperate with Supplier and its Subsidiaries and their respective Representatives and shall use their commercially reasonable efforts to minimize any disruption to Supplier’s businesses and operations.  
Section 1.05Insolvency Event.   
(a)Contract Assumption and Assignment.  In the event of an Insolvency Event that is not dismissed within thirty (30) days of commencement, Supplier shall (a) file within thirty (30) days of the commencement of such Insolvency Event a motion in form and substance satisfactory to Customer seeking to assume each of the contracts with the relevant manufacturers and suppliers in relation to the Products in accordance with section 365 of the Bankruptcy Code or corresponding applicable bankruptcy Law, (b) seek to have an order with respect to such assumption reasonably satisfactory to Customer entered into promptly and no later than sixty (60) days after the commencement of such Insolvency Event and (c) assume and assign such contracts to Customer promptly upon entry of an order approving such assumptions.  It is each Party’s intent that each such contract shall remain in full force and effect for the benefit of Customer in accordance with its terms notwithstanding any provision in such contract to the contrary and be fully enforceable by Customer in accordance with its terms, except as modified by any order of a court authorizing and providing for its assumption, or applicable Law.  Any monetary defaults under each such contract to be assumed will be satisfied, pursuant to section 365(b)(1) of the Bankruptcy Code, by payment by Supplier on or prior to such assumption of such amounts necessary to cure all defaults under such contract. If the assumption or assumption and assignment of any such contract for any reason is held to be invalid, illegal or unenforceable in any respect, that contract shall not affect the obligations of Supplier to assume and assign to Customer each of the other contracts contemplated under and in accordance with this Section 12.05. 
(b)

34 [***] = Certain Confidential Information Omitted
    58

(c)Exclusivity Preservation.  In the event of an Insolvency Event that is not dismissed within thirty (30) days of commencement, Supplier shall seek to preserve the exclusivity arrangements described in Article III of this Agreement. 
(d)It is understood and agreed by each of the Parties that any failure to comply with this Section 12.05 would give rise to irreparable harm for which money damages would not be an adequate remedy and accordingly each of the Parties agrees that, in addition to any other remedies, Customer shall be entitled to seek specific performance and injunctive or other equitable relief for any such failure to comply with this Section 12.05.
Article XIII

REPRESENTATIONS AND WARRANTIES
Section 1.01Representations of Both Parties.  Each Party represents and warrants, effective as of the Effective Date and as of the Closing Date, that it has the power and authority to enter into and perform this Agreement, which constitutes valid and binding obligations on it in accordance with its terms.  Supplier represents and warrants, effective as of the Effective Date and as of the Closing Date, that the execution and delivery of this Agreement and the performance by Supplier of its respective obligations hereunder do not and will not (i) violate or conflict with any provision of the respective certificate of incorporation or by-laws or similar organizational documents of Supplier, (ii) result in any violation or breach of, or constitute any default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or a loss of a benefit under, any Transferred Business Contract (as defined in the APA), (iii) result in the creation of any Lien (as defined in the APA)(except for Permitted Liens) upon, or (iv) violate, conflict with or result in any breach under any provision of any Law applicable to Supplier, except, in the case of clauses (ii), (iii) and (iv), to the extent that any such breach, default, termination, cancellation, acceleration, loss, Lien, violation, conflict, breach or loss would not be material to the Supplier, taken as a whole. 
Section 1.02Supplier Representations.  The Supplier represents and warrants, effective as of the Effective Date, that: (i) the Products shall be supplied with full title guarantee; (ii) the Products shall comply with all applicable Laws in those jurisdictions in which Supplier has obtained certification or has determined the Products may be sold in accordance with Section 2.19: (iii) the Development Services and Associated Services shall comply with all applicable Laws; (iv) all information and materials included with the Products under a Purchase Order will be accurate in all material respects and (v) it shall perform the Development Services and the Associated Services and its other obligations under the Agreement with all reasonable skill and care using Supplier Personnel of appropriate expertise and experience.
Section 1.03Warranty Disclaimer. THE EXPRESS WARRANTIES IN THIS SECTION 13 OR IN THE PRODUCT WARRANTY DESCRIBED IN SECTION 2.22(D) ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS, IMPLIED, OR STATUTORY, REGARDING THE PRODUCTS, THE DEVELOPMENT SERVICES, THE ASSOCIATED SERVICES OR THE BACKSTOP SERVICES, INCLUDING ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
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Section 1.04TITLE, AND NON-INFRINGEMENT OF THIRD PARTY RIGHTS.  CUSTOMER ACKNOWLEDGES THAT IT HAS RELIED ON NO WARRANTIES OTHER THAN THE EXPRESS WARRANTIES PROVIDED HEREIN OR IN THE PRODUCT WARRANTY IN SECTION 2.22(D) AND THAT NO WARRANTIES ARE MADE HEREIN BY ANY OF SUPPLIER’S AFFILIATES, ODM AND ORIGINAL SUPPLIERS. 
Article XIV

CONFIDENTIALITY
Section 1.01Definition of Confidential Information. “Confidential Information” means any business or technical information of Supplier or Customer including, without limitation, any information relating to product plans, designs, costs, product prices and names, finances, marketing plans, business opportunities, personnel, research, development or know-how that is designated in writing by the disclosing party as “confidential” or “proprietary” at the time of disclosure or, if orally disclosed, is reduced to writing by the disclosing party within thirty (30) days of such disclosure, or that a reasonable person under the circumstances would understand to be confidential.
Section 1.02Exclusions.  Confidential Information does not include information that: (a) is or becomes generally known to the public through no fault of or breach of this Agreement by the receiving Party; (b) is rightfully known by the receiving Party at the time of disclosure without an obligation of confidentiality; (c) is independently developed by the receiving Party without use of the disclosing party’s Confidential Information; or (d) the receiving Party rightfully obtains from a third party without restriction on use or disclosure.  This Section does not limit or intend to limit either Party’s rights to exploit the Arlo Catalog Products and Verisure Developed Products as permitted by this Agreement (even though such products embody Confidential Information of both Parties) or either Party’s rights of assignment under Section 16.12. 
Section 1.03Use and Disclosure Restrictions.  Neither Party will (i) use the other Party’s Confidential Information except as necessary for the performance of this Agreement or (ii) disclose such Confidential Information to any Person except to those of its and its Affiliates’ Representatives that need to know such Confidential Information for the purpose of performing this Agreement, provided that each such Representative is subject to a written agreement that includes binding use and disclosure restrictions that are at least as protective as those set forth herein.  Each Party will use all reasonable efforts to maintain the confidentiality of all such Confidential Information in its possession or control, but in no event less than the efforts that such Party ordinarily uses with respect to its own proprietary information of similar nature and importance.  The foregoing obligations will not restrict either Party from disclosing Confidential Information of the other Party: (a) pursuant to the law, order or requirement of a court, administrative agency, or other governmental or administrative body, provided that the Party required to make such disclosure gives reasonable notice to the other party to contest such order or requirement; (b) on a confidential basis to its and its Affiliates’ accountants, lawyers and other similar professional advisors, (c) on a confidential basis to actual and potential acquirers, lenders, investors and other similar transaction counterparties (and their counsel and similar  professional advisors) as part of customary due diligence; and (d) other parties with the
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Section 1.04disclosing party’s prior written consent. Notwithstanding the foregoing sentence, the receiving Party and its Affiliates shall not disclose Source Code of the other Party to any Person other than its employees and contractors who have a need to know. Prior to any disclosure by a recipient under this Section 14.03, such recipient must have an appropriate agreement with any such person sufficient to require such Person to treat such information as confidential and abide by the terms herein.  In addition, each Party may disclose the terms and conditions of this Agreement as required under applicable securities laws or regulations; provided that the Parties will mutually agree on any necessary redactions. This Section 14.03 will become effective as of the Effective Date.
Article XV

INDEMNITY
Section 1.01Indemnification by Supplier.  Effective as of the Effective Date, Supplier shall indemnify, defend and hold harmless the Customer and its Affiliates and each of its and their respective Representatives, from and against amounts paid to third parties as a result of any and all claims, demands, causes of action, actions, suits or proceedings whatsoever (“Claim(s)”), and any and all Losses, arising out of or relating to any such Claim, in all cases to the extent arising out of or related to (a) any Product Recall or any Epidemic Defect in the manufacturing, design or operation of any Product manufactured, modified, altered or sold by Supplier; (b) any breach of its privacy and data security obligations under Section 2.18 (including Schedule 2.18); and (c) any Arlo Catalog Product or a Verisure Developed Product infringing any third party’s Intellectual Property or Trademark rights (except to the extent covered by Customer’s indemnity below). 
Section 1.02Indemnification by Customer. Customer shall indemnify, defend and hold harmless Supplier and its Affiliates and each of its and their respective Representatives, from and against amounts paid to third parties as a result of any and all Claims and any and all Losses, arising out of or relating to any such Claim, in all cases to the extent arising out of or related to (a) an infringement of any third party’s Intellectual Property or Trademark rights caused solely and directly by Supplier’s compliance with Customer’s requirements and instructions on the Customer Specific Features as defined in a Statement of Work; and (b) a data breach or failure of Supplier to comply with its privacy and data security obligations under this Agreement or applicable Law that is caused solely and directly by Customer. 
Section 1.03Indemnification Procedure. 
(a)General Procedure.  Each Party indemnified hereunder (an “Indemnified Party”) must notify the other Party (the “Indemnifying Party”) promptly of the applicable Claim in writing, tender to the Indemnifying Party sole control and authority over the defense or settlement of such Claim, and reasonably cooperate with the Indemnifying Party, at the Indemnifying Party’s expense, and provide the Indemnifying Party with available information in the investigation and defense of such Claim.  The Parties shall, reasonably promptly after receiving the Claim, enter into a joint defense agreement or a community of interest agreement whereby each participant agrees to cooperate and provide reasonable assistance in the defense
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(a)and any settlement of any indemnified Claim.  Any effort by the Indemnified Party to settle a Claim without the Indemnifying Party’s involvement and written approval shall void any indemnification obligation hereunder. 
(b)IP Indemnity Procedure.  Supplier shall, in the event of a Claim under Section 15.01(c): (i) procure for the Customer such licenses to cover Customer’s use of the alleged infringing Product; or (ii) replace or modify the Product to make it non-infringing with a replacement or modified Product that is substantially equivalent to the original Product; or (iii) if Supplier has been unable to procure on commercially reasonable terms a license that enables the Customer and its Affiliates to use the enjoined Products pursuant to the terms of this Agreement and Supplier is unable, using commercially reasonable efforts, to modify the affected Product to make it non-infringing; then, Supplier, shall:
(A)discuss any potential remedies with Customer, including the option of having Customer contribute to a portion of any license fee or accepting reduced functionality;
(B)If the Parties cannot agree on a remedy, Supplier shall use commercially efforts to provide Customer within a commercially reasonable time, acting expeditiously, with a version of the relevant Product, where the infringing feature or functionality is removed; 
(C)To the extent such remedy is not technically feasible, Supplier may terminate further sales of the infringing Product and allow cancellation of such Products then under open Purchase Orders, but only in respect of those jurisdictions (the “Enjoined Jurisdictions”), and only during the term, in which a Governmental Authority has prohibited the sale of such Product.  In such event under this Section 15.03(b)(C), Supplier will notify Customer of such termination and cancellation, and Customer will use reasonable efforts to cease such sales as soon as reasonably practicable. For clarity, Supplier will continue to supply Products to Customer in any jurisdiction that is not an Enjoined Jurisdiction;
(D)In respect of jurisdictions in which a Claim has been made but it is not an Enjoined Jurisdiction: (i) the Parties will discuss in good faith and with the advice of counsel on the risks involved in marketing and selling the Products, including taking into account whether a patent of the same scope has been granted to the same claimant in the Enjoined Jurisdiction; and (ii) Supplier will have right to terminate further sales of the Product in such jurisdiction only if, under the circumstances, outside counsel has recommended that is a normal and reasonable commercial course of action.  Supplier will notify Customer of such termination and cancellation, and Customer will remain fully liable for any sales of Products that Customer makes after such notice.
The indemnification processes set out in this Article XV are the Indemnifying Party’s sole obligation and the Indemnified Party’s sole remedy in the event of a Claim covered by such indemnification obligation.

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This Section 15.03 will become effective as of the Effective Date.
Section 1.04Limitations of Liability.  NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, TO THE EXTENT PERMITTED BY APPLICABLE LAW: (I) EXCEPT FOR CLAIMS ARISING FROM (A) BREACH OF CONFIDENTIALITY, (B) AMOUNTS PAID TO THIRD PARTIES UNDER AN INDEMNIFICATION OBLIGATION, (C) FRAUD OR WILLFUL MISCONDUCT, OR (D) BREACH OF LICENSES GRANTED HEREIN, NEITHER PARTY, INCLUDING ITS AFFILIATES AND LICENSORS, SHALL BE LIABLE HEREUNDER FOR ANY INDIRECT, INCIDENTAL, PUNITIVE, EXEMPLARY, SPECIAL, OR CONSEQUENTIAL DAMAGES, OR FOR ANY LOSS OF PROFITS OR REVENUE, USE, GOODWILL, OR COSTS OF SUBSTITUTE GOODS OR SERVICES, REGARDLESS OF THE THEORY OF LIABILITY (INCLUDING NEGLIGENCE); AND (II) EXCLUDING THE OBLIGATION TO PAY FEES AND ROYALTIES, BREACH OF CONFIDENTIALITY, FRAUD, WILLFUL MISCONDUCT OR BREACH OF LICENSES GRANTED HEREIN, EACH PARTY’S LIABILITY ARISING UNDER THIS AGREEMENT:
 (A) FOR SUPPLIER’S INDEMNIFICATION OBLIGATIONS UNDER SECTION 15.01(A), SHALL NOT EXCEED ONE AND ONE HALF TIMES THE TOTAL FEES PAID WITH RESPECT TO THE RELEVANT PRODUCT OR SERVICE     UNIT(S) THAT ARE THE SUBJECT OF THE PRODUCT RECALL OR EPIDEMIC FAILURE; 
(B) FOR SUPPLIER’S INDEMNIFICATION OBLIGATIONS UNDER SECTION 15.01(B), AND CUSTOMER’S INDEMNIFICATION OBLIGATIONS UNDER SECTION 15.02(B), THE GREATER OF (I) ONE AND ONE HALF TIMES THE TOTAL FEES PAID WITH RESPECT TO THE RELEVANT PRODUCT IN THE ONE YEAR PERIOD PRECEDING THE EVENT GIVING RISE TO THE CLAIM OR (II) [***]35;
(C) FOR SUPPLIER’S INDEMNIFICATION OBLIGATIONS UNDER SECTION 15.01(C) AND CUSTOMER’S INDEMNIFICATION OBLIGATIONS UNDER SECTION 15.02(A):
(i)  IF ANY VERISURE DEVELOPED PRODUCTS ARE THE SUBJECT OF THE CLAIM, SUCH INDEMNITY HEREUNDER SHALL BE (X) DURING THE FIRST TWO YEARS AFTER THE APPLICABLE VERISURE DEVELOPED PRODUCT WAS FIRST SOLD IN THE TERRITORY, UNCAPPED AND (Y) DURING THE REMAINDER OF THE TERM OF THIS AGREEMENT, NOT EXCEEDING ONE AND ONE HALF TIMES THE TOTAL FEES PAID WITH RESPECT TO THE RELEVANT PRODUCT IN THE ONE YEAR PERIOD PRECEDING THE EVENT GIVING RISE TO THE CLAIM;
(ii) IF ANY ARLO CATALOG PRODUCTS ARE THE SUBJECT OF THE CLAIM, SUPPLIER’S INDEMNITY HEREUNDER SHALL BE (X) FOR ARLO CATALOG PRODUCTS THAT HAVE BEEN SOLD IN THE TERRITORY FOR LESS THAN TWO YEARS PRIOR TO THE DATE OF THE CLAIM, UNCAPPED AND (Y) FOR ARLO CATALOG PRODUCTS THAT HAVE BEEN SOLD IN THE

35 [***] = Certain Confidential Information Omitted
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TERRITORY FOR MORE THAN TWO YEARS PRIOR TO THE DATE OF THE CLAIM, NOT EXCEEDING ONE AND ONE HALF TIMES THE TOTAL FEES PAID WITH RESPECT TO THE RELEVANT PRODUCT IN THE ONE YEAR PERIOD PRECEDING THE EVENT GIVING RISE TO THE CLAIM.
(iii) IF ANY ARLO SMART SERVICES ARE THE SUBJECT OF THE CLAIM, SUPPLIER’S INDEMNITY HEREUNDER SHALL NOT EXCEED ONE AND ONE HALF TIMES THE TOTAL FEES PAID WITH RESPECT TO THE RELEVANT SERVICE.
(D) IN ALL OTHER CASES, THE AGGREGATE FEES PAID BY CUSTOMER TO SUPPLIER FOR ANY PRODUCTS OR SERVICES IN THE ONE YEAR PERIOD PRECEDING THE EVENT GIVING RISE TO THE CLAIM. 
THESE LIMITATIONS APPLY WHETHER THE LIABILITY IS BASED ON CONTRACT, TORT, STRICT LIABILITY OR ANY OTHER THEORY.
FOR CLARITY, WHERE THE LIABILITY CAP IS EXPRESSED AS BASED ON THE TOTAL FEES PAID IN THE ONE YEAR PRECEDING THE EVENT GIVING RISE TO THE CLAIM, SUCH ONE YEAR IS ON A ROLLING ONE YEAR BASIS. WHERE THERE IS MORE THAN ONE CLAIM IN A ROLLING ONE YEAR PERIOD WITH RESPECT TO A PARTICULAR PRODUCT OR SERVICE, THE EARLIER CLAIM WILL REDUCE THE LIABILITY CAP FOR THE SUBSEQUENT CLAIM(S) ONLY TO THE EXTENT THAT THERE IS OVERLAP IN THE PRODUCT OR SERVICE DURING THE ONE YEAR PERIOD OF THE EARLIER CLAIM AND THE SUBSEQUENT CLAIM(S).  
Section 1.05Indemnity Survival.  The provisions of this Article XV shall survive any termination of this Agreement.
Article XVI

GENERAL PROVISIONS
All of the provisions of this Article XVI will become effective on the Effective Date.
Section 1.01Dispute Resolution. 
(a)    Any dispute arising out of or in connection with this Agreement (“Dispute”) shall be resolved as rapidly as possible by discussion between the Relationship Managers.  If a Dispute cannot be resolved between the Relationship Manager of the Supplier and the Relationship Manager of the Customer within [***]36 of the Dispute arising, the Relationship Managers shall escalate the dispute to the Chief Executive Officer of Supplier and the Chief Executive Officer of Customer to negotiate in good faith for an additional [***] (or such longer period as the Parties may agree).  If at the end of such time such Persons are unable to resolve such Dispute amicably, then such Dispute shall be resolved in accordance with the dispute resolution process referred to in Section 16.01(b), provided that such dispute resolution process shall not modify or add to the remedies available to the Parties under this Agreement.
(b)

36 [***] = Certain Confidential Information Omitted
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(b)If the Parties are unable to resolve a Dispute in accordance with Section 16.01(a), the Dispute shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by three arbitrators.  The claimant(s) shall nominate one arbitrator in the Request for Arbitration.  The respondent(s) shall nominate one arbitrator in the Answer to the Request.  The two party-nominated arbitrators will then attempt to agree for a period of thirty (30) days, in consultation with the parties to the arbitration, upon the nomination of a third arbitrator to act as president of the tribunal, barring which the ICC Court shall select the third arbitrator (or any arbitrator that claimant(s) or respondent(s) shall fail to nominate in accordance with the foregoing).  The place of arbitration shall be New York, New York.  The language of the arbitration shall be English and the decision of the arbitrators shall be binding on the Parties.  
Section 1.02Specific Performance. 
(a)The Parties acknowledge and agree that irreparable damage would occur and that the Parties would not have any adequate remedy at Law in the event that Article XIV, Section 12.05 and Section 2.18 were not performed in accordance with their specific terms or were otherwise breached, and that money damages or other legal remedies would not be an adequate remedy for any such failure to perform or any such breach.  Accordingly, the Parties hereto acknowledge and hereby agree that in the event of any breach or threatened breach by Supplier or Customer of any of their respective covenants or obligations set forth in Article XIV, Section 12.05 and Section 2.18, each of Customer and Supplier, respectively, shall be entitled to make an application for an injunction or injunctions to prevent or restrain breaches or threatened breaches of this Agreement by such other Party (as applicable), and to specifically enforce the terms and provisions of Article XIV, Section 12.05 and Section 2.18 to prevent breaches or threatened breaches of, or to enforce compliance with, the covenants and obligations of the other (as applicable) under Article XIV, Section 12.05 and Section 2.18, without proof of actual damages or inadequacy of legal remedy and without bond or other security being required.  The pursuit of specific enforcement or other equitable remedies by any Party will not be deemed an election of remedies or waiver of the right to pursue any other right or remedy (whether at Law or in equity) to which such Party may be entitled at any time.
(b)Any and all remedies herein expressly conferred upon a Party will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by Law or equity upon such Party, and the exercise by a Party of any one remedy will not preclude the exercise at any time of any other remedy.
(c)Each of Supplier and Customer hereby agrees not to raise any objections to the availability of the equitable remedy of specific performance to prevent or restrain breaches or threatened breaches of Article XIV, Section 12.05 and Section 2.18 by Supplier or Customer, as applicable, and to specifically enforce the terms and provisions of Article XIV, Section 12.05 and Section 2.18 to prevent breaches or threatened breaches of, or to enforce compliance with, the covenants and obligations of Supplier or Customer, as applicable, under such provisions. The Parties hereto further acknowledge and agree that (i) by seeking the remedies provided for in this Section 16.02, a Party shall not in any respect waive its right to seek at any time any other form or amount of relief that may be available to a Party under this Agreement (including monetary damages) and (ii) nothing set forth in this Section 16.02 shall require any Party to institute any proceeding for (or limit any Party’s right to institute any proceeding for) specific performance 
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(d)under this Section 16.02 prior or as a condition to exercising any termination right under Section 11.03 (and pursuing damages after such termination (subject to the terms of this Agreement)), nor shall the commencement of any proceeding pursuant to this Section 16.02 or anything set forth in this Section 16.02 restrict or limit any Party’s right to terminate this Agreement in accordance with the terms of Section 11.03 or pursue any other remedies under this Agreement or otherwise that may be available then or thereafter.
Section 1.03No Joint Venture.  Nothing in this Agreement creates a joint venture or partnership between the Parties.  This Agreement does not authorize any Party (i) to bind or commit, or to act as an agent, employee or legal Representative of, another Party, except as may be specifically set forth in other provisions of this Agreement or (ii) to have the power to control the activities and operations of another Party.  The Parties are independent contractors with respect to each other under this Agreement.  Each Party agrees not to hold itself out as having any authority or relationship contrary to this Section 16.03.  
Section 1.04Force Majeure.  No Party hereto (or any Person acting on its behalf) shall have any liability or responsibility for failure to fulfill any obligation (other than a payment obligation) under this Agreement so long as and to the extent to which the fulfillment of such obligation is prevented, frustrated, hindered or delayed as a consequence of circumstances of Force Majeure.  Each Party (or such Person) shall exercise its reasonable efforts in good faith to minimize the effect of Force Majeure on its obligations. 
Section 1.05Further Assurances.  Subject to the terms and conditions hereof, each of the Parties agrees to use commercially reasonable efforts to execute and deliver, or cause to be executed and delivered, all documents and to take, or cause to be taken, all actions that may be reasonably necessary or appropriate, in the reasonable opinion of counsel for Supplier and Customer, to effectuate the provisions of this Agreement, provided that all such actions are in accordance with applicable Law.
Section 1.06Notices.  All notices and other communications under this Agreement shall be in writing and shall be deemed given (a) when delivered personally by hand (with written confirmation of receipt, by other than automatic means, whether electronic or otherwise), (b) when sent by e-mail (with written confirmation of transmission) or (c) one (1) Business Day following the day sent by an internationally recognized overnight courier (with written confirmation of receipt), in each case, at the following addresses (or to such other address as a Party may have specified by notice given to the other Party pursuant to this provision).
(a)If to Supplier:    3030 Orchard Parkway, San Jose, California

Attention:    General Counsel

(b)If to Customer: [***]37

Attention:      [***]

Copy to:     [***]

37 [***] = Certain Confidential Information Omitted
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Section 1.07Entire Agreement.  This Agreement and the Schedules hereto set forth the entire understanding of the Parties with respect to the subject matter hereof and there are no agreements, understandings, representations or warranties between the Parties or their respective Subsidiaries other than those set forth or referred to herein or therein.
Section 1.08No Third-Party Beneficiaries.  This Agreement is for the sole benefit of the Parties and their permitted successors and assigns and nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person, including any union or any employee or former employee of Supplier or Customer, or entity any legal or equitable right, benefit or remedy of any nature whatsoever, including any rights of employment for any specified period, under or by reason of this Agreement.  
Section 1.09Amendment; Waiver.  No provision of this Agreement, including any Exhibits, Annexes or Schedules thereto, may be amended, supplemented, waived or modified except by a written instrument making specific reference hereto or thereto signed by all the Parties.  No waiver of any breach of or non-compliance with this Agreement shall be deemed to be a waiver of any other or subsequent breach or non-compliance.  
Section 1.10Governing Law.  This Agreement, and all claims or causes of action (whether in contract, tort or otherwise) that may be based upon, arise out of or relate to this Agreement or the negotiation, execution or performance of this Agreement (including any claim or cause of action based upon, arising out of or related to any representation or warranty made in or in connection with this Agreement) shall be governed by and construed in accordance with the law of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws. 
Section 1.11Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.  Copies of executed counterparts transmitted by telecopy, telefax or other electronic transmission service (including by means of e-mail in .pdf format) shall be considered original executed counterparts for purposes of this Section 16.11.
Section 1.12Assignment.  This Agreement and all of the provisions hereto shall be binding upon and inure to the benefit of, and be enforceable by, the Parties hereto and their respective successors and permitted assigns, but neither this Agreement nor any of the rights, interests or obligations set forth herein shall be assigned by a Party hereto without the prior written consent of the other Party and any purported assignment without such consent shall be void and null at the outset; provided, however, that (i) Supplier may assign its rights to an Affiliate, provided that any assignee of this Agreement must be the owner of the Arlo IP, such that the Customer Entities must always receive the licenses herein directly from the owner of the Arlo IP, and not from an Affiliate or intermediate licensor; and (ii) Customer may assign its rights and obligations under this Agreement in the following circumstances (provided that, in each case, Customer remains liable for the performance of Customer’s obligations in this 
 [***] = Certain Confidential Information Omitted

    67

Agreement by such assignee): (x) in whole or in part, to an Affiliate; or (y) in whole, in connection with a reorganization or a sale or disposition of any assets or lines of business of Customer.  
Section 1.13Rules of Construction.  Interpretation of this Agreement shall be governed by the following rules of construction: (a) words in the singular shall be held to include the plural and vice versa, and words of one gender shall be held to include the other gender as the context requires; (b) references to the terms Article, Section, paragraph, Exhibit and Schedule are references to the Articles, Sections, paragraphs, Exhibits, Annexes and Schedules of this Agreement unless otherwise specified; (c) the terms “hereof”, “herein”, “hereby”, “hereto”, and derivative or similar words refer to this entire Agreement, including the Schedules, Annexes and Exhibits hereto; (d) references to “$” means U.S. dollars; (e) the word “including” and words of similar import when used in this Agreement means “including without limitation,” unless otherwise specified; (f) the word “or” shall not be exclusive; (g) references to “written” or “in writing” include in electronic form; (h) provisions shall apply, when appropriate, to successive events and transactions; (i) the headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement; (j) Supplier and Customer have each participated in the negotiation and drafting of this Agreement and if an ambiguity or question of interpretation should arise, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or burdening either Party by virtue of the authorship of any of the provisions in any of this Agreement; (k) a reference to any Person includes such Person’s successors and permitted assigns; (l) any reference to “days” means calendar days unless Business Days are expressly specified; and (m) when calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded, if the last day of such period is not a Business Day, the period shall end on the next succeeding Business Day.
Section 1.14Non-Recourse.  No past, present or future director, officer, employee, incorporator, member, partner, stockholder, Affiliate, agent, attorney or Representative of Supplier or Customer shall have any liability for any obligations or liabilities of such Party under this Agreement of or for any claim based on, in respect of, or by reason of, the transactions contemplated hereby.
Section 1.15Export Law Compliance.  Each Party shall be responsible for their compliance with applicable export laws, rules and regulations as related to their performance under this Agreement.
Section 1.16No Conflict.  In the event of any conflict or inconsistency between the terms and conditions of this Agreement and the terms and conditions of a Statement of Work or a Purchase Order, the terms and conditions of this Agreement shall prevail, unless with respect to a Statement of Work only, such Statement of Work specifically references the provisions of this Agreement that are inconsistent therewith (or it is reasonably apparent from the face of the Statement of Work that such provisions were meant to be specifically referenced and were inadvertently not so referenced), in which case the terms and conditions of such Statement of Work shall prevail.  The Parties shall modify any provisions of this Agreement to the extent 
    68

Section 1.17necessary to comply with the local Laws of the jurisdiction in which such Statement of Work is executed.
[Signature page follows.]

    69

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed on the date first written above by their respective duly authorized officers.
ARLO TECHNOLOGIES, INC.
By:        /s/ Matthew McRae
Name: Matthew McRae
Title: Chief Executive Officer
VERISURE SÀRL
By:    /s/ Austin Lally
Name: Austin Lally
Title: Chief Executive Officer
By:        /s/ Marta Panzano Barbero
Name: Marta Panzano Barbero
Title: Chief Human Resources Officer
    70

ADDENDUM 1 TO SCHEDULE 4.01(a) OF SUPPLY AGREEMENT
This Addendum 1 is entered into June 23, 2020 and amends Schedule 4.01(a) of the Supply Agreement dated November 4, 2019 (“Agreement”) by and between Arlo Technologies, Inc., a Delaware corporation having its place of business at 3030 Orchard Parkway, San Jose, California (“Supplier”) and Verisure Sàrl, a Swiss limited liability company having its principal place of business at Chemin Jean-Baptiste Vandelle 3, 1290 Versoix, Switzerland (“Customer”).   
RECITALS

WHEREAS, Supplier and Customer previously entered into that certain Supply Agreement dated November 4, 2019 (“Agreement”); and
WHEREAS, the parties now desire to modify and amend the terms of Schedule 4.01(a) of the Agreement as more particularly set forth below.   
NOW THEREFORE, in consideration of the mutual covenants set out herein, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree for themselves, their successors and permitted assigns as follows: 
[***]

 

 [***] = Certain Confidential Information Omitted

 

IN WITNESS WHEREOF, the Parties have caused this Addendum 1 to be executed on the date first written above by their respective duly authorized officers.
ARLO TECHNOLOGIES, INC.
By:        /s/ Brian Busse    
Name: Brian Busse
Title: General Counsel
VERISURE SÀRL
By:        /s/ Vincent Litrico    
Name: Vincent Litrico
Title: CFO 
By:        /s/ Mariano Andreu    
Name: Mariano Andreu
Title: Procurement & Supply Chain 

 

AMENDMENT 2
TO

SUPPLY AGREEMENT
This Amendment to Supply Agreement (this “Amendment”) is entered into by and between Arlo Technologies, Inc., a Delaware corporation having its place of business at 3030 Orchard Parkway, San Jose, California (“Supplier”) and Verisure Sàrl, a Swiss limited liability company having its principal place of business at Chemin Jean-Baptiste Vandelle 3, 1290 Versoix, Switzerland (“Customer”), on this 1st day of November, 2021 (the “Amendment Effective Date”) and amends that certain Supply Agreement dated November 4, 2019 between Supplier and Customer (the “Agreement”).  Numeric Section references used herein, and defined terms used herein shall be deemed to refer to those used in the Agreement, unless defined in this Amendment.
RECITALS
WHEREAS, Supplier and Customer wish to change the delivery terms applicable to Product sales under the Agreement, and to make certain conforming changes to the Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements contained herein, the Parties hereby agree as follows:
1.  The definitions of “Delivery Date” and “Delivery Location” are hereby deleted in their entirety and are replaced with:
““Delivery Date(s)” means the date(s) on which Products are delivered pursuant to the applicable Incoterm listed in Section 2.10, which shall be “Delivery” for all purposes of this Agreement.”
““Delivery Location” means the location(s) to which Customer intends for its carrier to ship Products under a Purchase Order.  For clarity, there will be only one Delivery Location per Purchase Order.”
2.  Clause (ii) of the second sentence of Section 2.05 is hereby deleted in its entirety and is replaced with: 

“(ii) has a Delivery Date that is at least [***] from the date of the Purchase Order for Purchase Orders delivered according to CIP or FCA Incoterms and at least [***] (for sea freight to the Delivery Locations set forth on Section 2.07 herein) or [***] (for air freight) from the date of the Purchase Order for Purchase Orders delivered according to DDU Incoterm”.  

3.  In Schedule 2.05 of the Agreement, [***].
4.  The first sentence of Section 2.07 is hereby deleted in its entirety, and is replaced with the following (such amendment shall not apply to Purchase Orders accepted prior to the Amendment Effective Date): 
“2.07.  Purchase Order Product Fulfilment.  For each Purchase Order, Supplier shall package the Products for shipment to the Delivery Location and deliver them (i) onto trucks at the facility of Supplier’s 
 [***] = Certain Confidential Information Omitted

 

ODMs by or on the Delivery Date for the Products shipped according to FCA or CIP Incoterm and (ii) to the Delivery Location in Moerdijk, The Netherlands for Products shipped according to DDU Incoterm.”  
4.  Section 2.08(a) is hereby deleted in its entirety, and the Agreement is renumbered accordingly.

5. Section 2.10 is hereby deleted in its entirety and is replaced with the following:
“2.10 Transfer of Title and Risk of Loss.  
2.10.1    For all Products to the exclusion of the Products to be purchased by Verisure Arlo Europe DAC: Up to December 31, 2021 at the soonest or any other later date resulting from the section below, transfer of risks, shipping, insurance and export costs related to the freight of the Products shall be regulated between the Parties according to CIP (Incoterms 2020) to the first carrier in the EU, unless otherwise agreed upon in writing by both Parties on a shipment by shipment basis.
Verisure reserves the right, at its entire discretion, to extend the arrangement above from January 1, 2022 (i.e. CIP Incoterms 2020) on a quarterly basis, by a written notification to the Supplier no later than ten (10) Business Days before the end of the quarter.
From January 1, 2022 onwards or any later date resulting from the section above, transfer of risks, shipping, insurance and export costs related to the freight of the Products shall be regulated between the Parties according to FCA (Incoterms 2020) onto trucks at the facility of Supplier’s ODM, unless otherwise agreed upon in writing by both Parties on a shipment by shipment basis.
2.10.2     For the Products to be purchased by Verisure Arlo Europe DAC: Until a date to be notified by Verisure as per the paragraph immediately below, Supplier shall be responsible for arranging and paying all shipping, insurance and export costs related to the freight of the Products under DDU (Incoterms 2010) to the Delivery Location, unless otherwise agreed upon by both Parties on a shipment by shipment basis.  For the avoidance of doubt, Customer shall be responsible for performing customs clearance and paying all relevant customs and import duties and inspection costs associated with the delivery of the Products to the Delivery Location.  Title to the Products will pass on to the Customer at the Delivery Location.  Risk in any Products rejected by the Customer pursuant to Section 2.15 hereof shall pass back to the Supplier once the Supplier has collected the rejected Products pursuant to Section 2.15, and risk in any surplus Products shall pass back to the Supplier on the earlier of (i) at the point of Supplier’s collection of the same at the Delivery Location; and (ii) five (5) Business Days from the date Supplier receives Customer’s notice to collect the Products from the Delivery Location.
Verisure reserves the right, at its entire discretion, to request by a written notification to the Supplier no later than three (3) Business Days the change of the Incoterm to FCA or CIP. The Parties shall make reasonable efforts to work internally and get prepared for such a change of Incoterm as soon as possible.
From the change of Incoterm according to the above, transfer of risks, shipping, insurance and export costs related to the freight of the Products shall be regulated between the Parties according to CIP or FCA (Incoterms 2020) onto trucks at the facility of Supplier’s ODM, unless otherwise agreed upon in writing by both Parties on a shipment by shipment basis.
 

10.2.3     For Purchase Orders shipped according to CIP or FCA Incoterms, title to the Products will pass to the Customer upon the loading of such Products onto trucks at the facility of Supplier’s ODM and for Purchase Orders shipped according to DDU Incoterm, title to the Products will pass on to the Customer at the Delivery Location. 
10.2.4    Risk in any Products rejected by the Customer pursuant to Section 2.15 hereof shall pass back to the Supplier once the Supplier has collected the rejected Products pursuant to Section 2.15, and risk in any surplus Products shall pass back to the Supplier on the earlier of (i) at the point of Supplier’s collection of the same at the Delivery Location; and (ii) [***] from the date Supplier receives Customer’s written notice to collect the Products from the Delivery Location.” 
6.  Section 2.11 is hereby deleted in its entirety and is replaced with the following:
“2.11 Price List.  Supplier’s price list will include prices based on the applicable Incoterm according to Section 2.10.”
7.  The first sentence of the Section 2.12 (b) is hereby deleted in its entirety and replaced with the following:
“(b) Unless otherwise specified in the Purchase Order or otherwise agreed in writing by the Parties, no Customer Entity shall be required to accept Delivery in instalments.” 

8.  The first two sentences of Section 8.06 are hereby deleted in their entirety and are replaced with the following:

“Supplier will issue product invoices (each a “Product Invoice”) upon Delivery.  Unless the subject of a genuine dispute, correctly issued Product Invoices will be payable by Customer or the Customer Entity which issued the relevant Purchase Order within [***] of date of the Product Invoice related to Purchase Orders referring to CIP or FCA Incoterms and [***] of date of the Product Invoice related to Purchase Orders referring to DDU Incoterm.” 

IN WITNESS WHEREOF, the Parties have caused this Amendment to be executed by their respective duly authorized officers, effective as of the Amendment Effective Date.
ARLO TECHNOLOGIES, INC.
By:        /s/ Brian Busse    
Name: Brian Busse
Title: General Counsel
VERISURE SÀRL
By:        /s/ Vincent Litrico    
Name: Vincent Litrico
Title: CFO
By:        /s/ Austin Lally    
Name: Austin Lally
Title: CEO

 [***] = Certain Confidential Information Omitted

 

ADDENDUM 3
AMENDMENT OF SCHEDULE 4.01(a) OF SUPPLY AGREEMENT

This Addendum 3 is entered into December 1, 2021 and amends Schedule 4.01(a) of the Supply Agreement dated November 4, 2019 (“Agreement”) by and between Arlo Technologies, Inc., a Delaware corporation having its place of business at 2200 Faraday Ave STE 150, Carlsbad, California  (“Supplier”) and Verisure Sàrl, a Swiss limited liability company having its principal place of business at Chemin Jean-Baptiste Vandelle 3, 1290 Versoix, Switzerland (“Customer”). 

RECITALS

WHEREAS, Supplier and Customer previously entered into that certain Supply Agreement dated November 4, 2019 as further amended from time to time (“Agreement”); and 

WHEREAS, the parties now desire to modify and amend the terms of Schedule 4.01(a) of the Agreement as more particularly set forth below. 

NOW THEREFORE, in consideration of the mutual covenants set out herein, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree for themselves, their successors and permitted assigns as follows:

This Addendum 3 supplements the Statement of Work for Custom Camera (Schedule 4.01(a)) and Agreement. In the event of a conflict between the terms and conditions of this Addendum 3 and the terms and conditions of Schedule 4.01(a) of the Agreement, this Addendum 3 will govern and control. 

The Agreement shall continue in full force and effect in accordance with the provisions thereof, and no change or modification in any of the terms thereof except as specifically set forth herein has been affected. In particular, this Addendum 1 does not intend to introduce and change or modification with regard to the Custom Camera named “Certified Security” or “CS”. 

Any further amendment to the Schedule 4.01(a) of the Agreement, as amended and supplemented by the Addenda 1 and 3, shall be agreed in writing between the parties.

[***]

 [***] = Certain Confidential Information Omitted

 

[***]

No other change to Schedule 4.01(a) shall be given effect by this Addendum and, in particular, no change in Supplier’s obligations to complete the development activities within Schedule 4.01(a) are intended. 

IN WITNESS WHEREOF, the Parties have caused this Addendum 3 to be executed on the date first written above by their respective duly authorized officers.

ARLO TECHNOLOGIES, INC.
By:        /s/ Brian Busse    
Name: Brian Busse
Title: General Counsel
VERISURE SÀRL
By:        /s/ Mariano Andreu    
Name: Mariano Andreu
Title: Procurement Director

By:        /s/ Nina Cronstedt    
Name: Nina Cronstedt
Title: CLO

 [***] = Certain Confidential Information OmittedDocument

EXECUTION VERSION

EXHIBIT10.31

LOAN AND SECURITY AGREEMENT

Dated as of October 27, 2021

ARLO TECHNOLOGIES, INC.,
and
CERTAIN OF ITS SUBSIDIARIES PARTY HERETO FROM TIME TO TIME,
as Borrowers

BANK OF AMERICA, N.A.,
as Lender

			
	

Section 1.    DEFINITIONS; RULES OF CONSTRUCTION    1
1.1.    Definitions    1
1.2.    Accounting Terms    24
1.3.    Uniform Commercial Code    25
1.4.    Certain Matters of Construction    25
1.5.    Division    25
Section 2.    CREDIT FACILITIES    25
2.1.    Loan Commitment    25
2.2.    Letter of Credit Facility    26
Section 3.    INTEREST, FEES AND CHARGES    28
3.1.    Interest    28
3.2.    Fees    29
3.3.    Computation of Interest, Fees, Yield Protection    29
3.4.    Reimbursement Obligations    29
3.5.    Illegality    29
3.6.    Inability to Determine Rates    30
3.7.    Increased Costs; Capital Adequacy    32
3.8.    Mitigation    32
3.9.    Funding Losses    33
3.10.    Maximum Interest    33
Section 4.    LOAN ADMINISTRATION    33
4.1.    Manner of Borrowing and Funding Loans    33
4.2.    Number and Amount of BSBY Loans; Determination of Rate    34
4.3.    Borrower Agent    34
4.4.    One Obligation    34
4.5.    Effect of Termination    34
Section 5.    PAYMENTS    34
5.1.    General Payment Provisions    34
5.2.    Repayment of Loans    34
5.3.    Payment of Other Obligations    35
5.4.    Marshaling; Payments Set Aside    35
5.5.    Dominion Account    35
5.6.    Account Stated    35
5.7.    Taxes    35
5.8.    Nature and Extent of Each Borrower’s Liability    37
Section 6.    CONDITIONS PRECEDENT    39
6.1.    Conditions Precedent to Initial Loans    39
6.2.    Conditions Precedent to All Credit Extensions    41
6.3.    Post-Closing Date Conditions    41
Section 7.    COLLATERAL    41
7.1.    Grant of Security Interest    42
7.2.    Lien on Deposit Accounts; Cash Collateral    42
7.3.    Reserved    43
7.4.    Other Collateral    43
7.5.    Limitations    43
7.6.    Further Assurances; Extent of Liens    43
Section 8.    COLLATERAL ADMINISTRATION    43
8.1.    Borrowing Base Reports    43
8.2.    Accounts    43
8.3.    Inventory    45
i
			
	

8.4.    Equipment    45
8.5.    Deposit Accounts    45
8.6.    General Provisions    45
8.7.    Power of Attorney    46
Section 9.    REPRESENTATIONS AND WARRANTIES    47
9.1.    General Representations and Warranties    47
9.2.    Complete Disclosure    51
Section 10.    COVENANTS AND CONTINUING AGREEMENTS    51
10.1.    Affirmative Covenants    51
10.2.    Negative Covenants    55
10.3.    Financial Covenants    58
Section 11.    EVENTS OF DEFAULT; REMEDIES ON DEFAULT    58
11.1.    Events of Default    58
11.2.    Remedies upon Default    60
11.3.    License    60
11.4.    Setoff    61
11.5.    Remedies Cumulative; No Waiver    61
Section 12.    MISCELLANEOUS    61
12.1.    Amendments and Waivers    61
12.2.    Indemnity    62
12.3.    Notices and Communications    62
12.4.    Performance of Borrowers’ Obligations    63
12.5.    Credit Inquiries    63
12.6.    Severability    64
12.7.    Cumulative Effect; Conflict of Terms    64
12.8.    Execution; Electronic Records    64
12.9.    Entire Agreement    64
12.10.    No Control; No Advisory or Fiduciary Responsibility    64
12.11.    Confidentiality    65
12.12.    Reserved    65
12.13.    GOVERNING LAW    65
12.14.    Consent to Forum    65
12.15.    Waivers by Borrowers    66
12.16.    Acknowledgement Regarding Supported QFCs    67
12.17.    Patriot Act Notice; Beneficial Ownership Regulation    67
12.18.    NO ORAL AGREEMENT    67

ii
			
	

LOAN AND SECURITY AGREEMENT

THIS LOAN AND SECURITY AGREEMENT is dated as of October 27, 2021, by and among ARLO TECHNOLOGIES, INC., a Delaware corporation (“Arlo”; together with any other entity joined hereto as a borrower hereunder, each, a “Borrower” and collectively, the “Borrowers”) and BANK OF AMERICA, N.A., a national banking association (including any Lending Office, “Lender”).
R E C I T A L S:

WHEREAS, Borrowers have requested that Lender provide a credit facility to Borrowers to finance their mutual and collective business enterprise.  
WHEREAS, Lender is willing to provide the credit facility on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, for valuable consideration hereby acknowledged, the parties agree as follows:
Section 1.DEFINITIONS; RULES OF CONSTRUCTION
1.1.Definitions.  As used herein, the following terms have the meanings set forth below:
Accounts Formula Amount: the sum of:
(a) the Investment Grade Accounts Formula Amount; plus
(b) the Non-Investment Grade Accounts Formula Amount. 
Acquisition: a transaction or series of transactions resulting in (a) acquisition of a business, division or substantially all assets of a Person; (b) record or beneficial ownership of 50% or more of the Equity Interests of a Person; or (c) merger, consolidation or combination of a Borrower or Subsidiary with another Person.
Affiliate: with respect to a specified Person, any other Person that directly, or indirectly through intermediaries, Controls, is Controlled by or is under common Control with the specified Person.
Allocable Amount: as defined in Section 5.8.3.
Anti-Corruption Law: any law relating to bribery or corruption, including the U.S. Foreign Corrupt Practices Act of 1977, UK Bribery Act 2010 and Patriot Act.
Anti-Terrorism Law: any law relating to terrorism or money laundering, including the Patriot Act.
Applicable Law: all laws, rules, regulations and governmental guidelines applicable to the Person or matter in question, including statutory law, common law and equitable principles, as well as provisions of constitutions, treaties, statutes, rules, regulations, orders and decrees of Governmental Authorities.
Applicable Margin: the margin set forth below, as determined by the average daily Availability for the last Fiscal Quarter:
-1-

			
	

												
	Level	Average Daily Availability
(as a percentage of the Borrowing Base)
	Base Rate Loans	BSBY Loans
	I	> 50% 
	1.00%	2.00%
	II	> 25% < 50%
	1.25%	2.25%
	III	< 25%	1.50%	2.50%

Until April 30, 2022, margins shall be determined as if Level II were applicable. Thereafter, margins shall be subject to increase or decrease by Lender on the first day of the calendar month following each Fiscal Quarter end.  If Lender is unable to calculate average daily Availability for a Fiscal Quarter due to Borrowers’ failure to deliver any Borrowing Base Report when required hereunder, then, at the option of Lender, margins shall be determined as if Level III were applicable until the first day of the calendar month following its receipt.
Availability: the Borrowing Base minus Revolver Usage.
Availability Reserve: the sum (without duplication) of (a) [reserved]; (b) the Rent and Charges Reserve; (c) the Bank Product Reserve; (d) liabilities secured by Liens (other than Permitted Liens) upon Collateral that are or may be senior to Lender’s Liens (but imposition of any such reserve shall not waive an Event of Default arising therefrom); (e) the Dilution Reserve; and (f) additional reserves, in such amounts and with respect to such matters, as Lender in its Permitted Discretion may elect to impose from time to time.
Bank Product: any of the following products or services extended to an Obligor or Affiliate of an Obligor by Lender or any of its Affiliates: (a) Cash Management Services; (b) Swaps; (c) commercial credit card and merchant card services; and (d) supply chain finance, credit insurance, leases and other banking products or services, other than Letters of Credit.
Bank Product Debt: Debt, obligations and other liabilities of an Obligor or Affiliate of an Obligor with respect to Bank Products.
Bank Product Reserve: the aggregate amount of reserves established by Lender from time to time in its Permitted Discretion with respect to Bank Product Debt.
Bankruptcy Code: Title 11 of the United States Code.
Base Rate: for any day, a per annum rate equal to the greater of (a) the Prime Rate for such day; (b) the Federal Funds Rate for such day, plus 0.50%; or (c) the BSBY Rate for a one month interest period as of such day, plus 1.00%; provided, that in no event shall the Base Rate be less than zero (0).
Base Rate Loan: any Loan that bears interest based on the Base Rate.
Beneficial Ownership Certification: a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation, in form and substance satisfactory to Lender.
Beneficial Ownership Regulation: 31 C.F.R. §1010.230.
Benefit Plan: any (a) employee benefit plan (as defined in ERISA) subject to Title I of ERISA, (b) plan (as defined in and subject to Section 4975 of the Code), or (c) Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such employee benefit plan or plan.
Bloomberg: Bloomberg Index Services Limited.
-2-

			
	

Borrowed Money: with respect to any Obligor, without duplication, its (a) Debt that (i) arises from the lending of money by any Person to such Obligor, (ii) is evidenced by notes, drafts, bonds, debentures, credit documents or similar instruments, (iii) accrues interest or is a type upon which interest charges are customarily paid (excluding trade payables owing in the Ordinary Course of Business), or (iv) was issued or assumed as full or partial payment for Property; (b) Capital Leases; (c) letter of credit reimbursement obligations; and (d) guaranties of any of the foregoing owing by another Person.
Borrower Agent: as defined in Section 4.3.
Borrower Materials: Borrowing Base Reports, Compliance Certificates, Notices of Borrowing, Notices of Conversion/Continuation, and other information, reports, financial statements and materials delivered by Obligors under the Loan Documents.
Borrowing: Loans made or converted together on the same day, with the same interest option and, if applicable, Interest Period.
Borrowing Base: on any date of determination, an amount equal to the lesser of (a) the Commitment; or (b) the Accounts Formula Amount minus the Availability Reserve.
Borrowing Base Report: a report of the Borrowing Base, in form and substance satisfactory to Lender.
BSBY Rate: (a) for any Interest Period for a BSBY Loan, a per annum rate equal to the BSBY Screen Rate two Business Days prior to such Interest Period, with a term equivalent to such period (or if such rate is not published on such determination date, the applicable BSBY Screen Rate on the Business Day immediately preceding such date); and (b) for any interest calculation relating to a Base Rate Loan on any day, a per annum rate equal to the BSBY Screen Rate with a term of one month commencing that day; provided, that in no event shall the BSBY Rate be less than zero (0).
BSBY Loan: a Loan that bears interest based on BSBY Rate.
BSBY Screen Rate: the Bloomberg Short-Term Bank Yield Index rate administered by Bloomberg and published on the applicable Reuters screen page (or such other commercially available source providing such quotations as may be designated by Lender from time to time).
Business Day: any day except a Saturday, Sunday or other day on which commercial banks are authorized to close under the laws of, or are in fact closed in, North Carolina or New York City.
Capital Expenditures: all liabilities incurred or expenditures made by a Borrower or Subsidiary for the acquisition of fixed assets, or any improvements, replacements, substitutions or additions thereto with a useful life of more than one year.
Capital Lease: any lease required to be capitalized for financial reporting purposes in accordance with GAAP, provided that any obligations of a Person that are or would have been treated as operating leases for purposes of GAAP prior to the issuance by the Financial Accounting Standards Board on February 25, 2016, of an Accounting Standards Updated (the “ASU”) shall continue to be accounted for as operating leases for all purposes relevant to this Agreement (whether or not such operating lease obligations were in effect on such date).
Cash Collateral: cash delivered to Lender to Cash Collateralize any Obligations, and all interest, dividends, earnings and other proceeds relating thereto.
Cash Collateralize: the delivery of cash to Lender, as security for the payment of Obligations, in an amount equal to (a) 105% of LC Obligations, and (b) with respect to any inchoate, contingent or other Obligations (including fees, expenses, indemnification obligations and Obligations under 
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Bank Products), Lender’s good faith estimate of the amount due or to become due.  “Cash Collateralization” has a correlative meaning.
Cash Dominion Trigger Period: the period (a) commencing on any day that (i) an Event of Default occurs or (ii) Availability is less than the greater of (x) 15% of the Borrowing Base or (y) $6,000,000; and (b) continuing until, during each of the preceding 30 consecutive days, (i) no Event of Default has existed and (ii) Availability has been equal to or greater than the greater of (x) 15% of the Borrowing Base and (y) $6,000,000.
Cash Equivalents: (a) marketable obligations issued or unconditionally guaranteed by, and backed by the full faith and credit of, the U.S. government, maturing within 12 months of the date of acquisition; (b) certificates of deposit, time deposits and bankers’ acceptances maturing within 12 months of the date of acquisition, and overnight bank deposits, in each case which are issued by Lender or a commercial bank organized under the laws of the United States or any state or district thereof, rated A-1 (or better) by S&P or P-1 (or better) by Moody’s at the time of acquisition, and (unless issued by Lender) not subject to offset rights; (c) repurchase obligations with a term of not more than 30 days for underlying investments of the types described in clauses (a) and (b) entered into with any bank described in clause (b); (d) commercial paper issued by Lender or rated A-1 (or better) by S&P or P-1 (or better) by Moody’s, and maturing within nine months of the date of acquisition; and (e) shares of any money market fund that has substantially all of its assets invested continuously in the types of investments referred to above, has net assets of at least $500,000,000 and has the highest rating obtainable from either Moody’s or S&P.
Cash Management Services: services relating to operating, collections, payroll, trust, or other depository or disbursement accounts, including automated clearinghouse, e-payable, electronic funds transfer, wire transfer, controlled disbursement, overdraft, depository, information reporting, blocked account, lockbox and stop payment services.
CERCLA: the Comprehensive Environmental Response Compensation and Liability Act (42 U.S.C. §9601 et seq.).
Change in Law: the occurrence, after the date hereof, of (a) the adoption, taking effect or phasing in of any law, rule, regulation or treaty; (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority; or (c) the making, issuance or application of any request, guideline, requirement or directive (whether or not having the force of law) by any Governmental Authority; provided, that “Change in Law” shall include, regardless of the date enacted, adopted or issued, all requests, rules, guidelines, requirements or directives (i) under or relating to the Dodd-Frank Wall Street Reform and Consumer Protection Act, or (ii) promulgated pursuant to Basel III by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any similar authority) or any other Governmental Authority.
Change of Control: means at any time, any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), shall become, or obtain rights (whether by means of warrants, options or otherwise) to become, the “beneficial owner” (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of fifty percent (50%) or more of the ordinary voting power for the election of directors of Arlo represented by the issued and outstanding Equity Interests of Arlo (determined on a fully diluted basis).
Claims: all claims, liabilities, obligations, losses, damages, penalties, judgments, proceedings, interest, costs and expenses of any kind (including remedial response costs, reasonable attorneys’ fees and Extraordinary Expenses) at any time (including after Full Payment of the Obligations) incurred by any Indemnitee or asserted against any Indemnitee by any Obligor or other Person, in any way relating to any (a) Loans, Letters of Credit, Loan Documents, or the use thereof or transactions relating thereto, (b) action taken or omitted in connection with any Loan Documents, (c) existence or perfection of any Liens, or realization on any Collateral, (d) exercise of any rights or remedies under any Loan Documents or Applicable Law, (e) failure by any Obligor to perform or observe any terms of any Loan Document, or (f) Lender’s reliance on any Communication executed 
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using an Electronic Signature or in the form of an Electronic Record, in each case including all costs and expenses relating to any investigation, litigation, arbitration or other proceeding (including an Insolvency Proceeding or appellate proceedings), whether or not the applicable Indemnitee is a party thereto.
Closing Date: as defined in Section 6.1.
Code: the United States Internal Revenue Code of 1986, as amended.
Collateral: as defined in Section 7.1.
Commitment: Lender’s obligation to make Loans and to issue Letters of Credit in an aggregate amount up to $40,000,000.
Commodity Exchange Act: the Commodity Exchange Act (7 U.S.C. §1 et seq.).
Compliance Certificate: a certificate, in form and substance satisfactory to Lender, by which Borrowers certify compliance with Section 10.3, regardless of the existence of a Financial Covenant Trigger Period.
Communication: any notice, request, election, representation, certificate, report, disclosure, statement, authorization, approval, consent, waiver, document, amendment or transmittal of information of any kind in connection with a Loan Document, including any Borrower Materials or Modification of a Loan Document.
Conforming Changes: with respect to use, administration of or conventions associated with BSBY Rate or any proposed Successor Rate, as applicable, any conforming changes to the definition of Base Rate, BSBY Rate, Interest Period, timing and frequency of determining rates and making payments of interest and other technical, administrative or operational matters (including, for the avoidance of doubt, the definition of Business Day, timing of borrowing requests or prepayment, conversion or continuation notices, and length of lookback periods) as may be appropriate, in Lender’s discretion, to reflect the adoption and implementation of such applicable rate, and to permit the administration thereof by Lender in a manner substantially consistent with market practice (or, if Lender determines that adoption of any portion of such market practice is not administratively feasible or that no market practice for the administration of such rate exists, in such other manner of administration as Lender determines is reasonably necessary in connection with the administration of any Loan Document).
Connection Income Taxes: Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.
Contingent Obligation: any obligation of a Person arising from a guaranty, indemnity or other assurance of payment or performance of any Debt, lease, dividend or other obligation (“primary obligation”) of another obligor (“primary obligor”) in any manner, whether directly or indirectly, including any obligation of such Person under any (a) guaranty, endorsement, co-making or sale with recourse of an obligation of a primary obligor; (b) obligation to make take-or-pay or similar payments regardless of nonperformance by any other party to an agreement; or (c) arrangement (i) to purchase any primary obligation or security therefor, (ii) to supply funds for the purchase or payment of any primary obligation, (iii) to maintain or assure working capital, equity capital, net worth or solvency of the primary obligor, (iv) to purchase Property or services for the purpose of assuring the ability of the primary obligor to perform a primary obligation, or (v) otherwise to assure or hold harmless the holder of any primary obligation against loss in respect thereof.  The amount of any Contingent Obligation shall be deemed to be the stated or determinable amount of the primary obligation (or, if less, the maximum amount for which such Person may be liable under the instrument evidencing the Contingent Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability with respect thereto.
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Control: possession, directly or indirectly, of the power to direct or cause direction of a Person’s management or policies, whether through the ability to exercise voting power, by contract or otherwise.
Covered Entity: (a) a “covered entity,” as defined and interpreted in accordance with 12 C.F.R. §252.82(b); (b) a “covered bank,” as defined in and interpreted in accordance with 12 C.F.R. §47.3(b); or (c) a “covered FSI,” as defined in and interpreted in accordance with 12 C.F.R. §382.2(b).
Daily Simple SOFR: with respect to any applicable determination date, the secured overnight financing rate published on such date by FRBNY, as administrator of the benchmark (or a successor administrator), on FRBNY’s website (or any successor source satisfactory to Lender).
Debt: as applied to any Person, without duplication, (a) all items that would be included as liabilities on a balance sheet in accordance with GAAP, excluding trade payables, accrued liabilities and non-trade accounts payable, in each case, incurred and being paid in the Ordinary Course of Business, but including Capital Leases; (b) all Contingent Obligations; (c) all reimbursement obligations in connection with letters of credit issued for the account of such Person; and (d) in the case of a Borrower, the Obligations.  The Debt of a Person shall include any recourse Debt of any partnership in which such Person is a general partner or joint venturer.
Default: an event or condition that, with the lapse of time or giving of notice, would constitute an Event of Default.
Default Rate: for any Obligation (including, to the extent permitted by law, interest not paid when due), 2.00% plus the interest rate or fee otherwise applicable thereto.
Deposit Account Control Agreement: control agreement satisfactory to Lender executed by an institution maintaining a Deposit Account for an Obligor, to perfect Lender’s Lien on such account.
Dilution Percent: the percent, determined for Borrowers’ most recent Fiscal Quarter, equal to (a) bad debt write-downs or write-offs, discounts, returns, promotions, credits, credit memos and other dilutive items with respect to Accounts, divided by (b) gross sales.
Dilution Reserve: a reserve equal to 1.00% of the Value of Eligible Accounts for each percentage point (or portion thereof) that the Dilution Percent exceeds 5.00%.
Disclosure Letter: that certain Disclosure Letter of even date herewith, that was delivered to and accepted by Lender as of the Closing Date, to which each of the Schedules to such Disclosure Letter referenced herein is attached. Each reference to a Schedule of the Disclosure Letter shall refer to the applicable Schedule attached to the Disclosure Letter.
Disposition: the sale, transfer, license, lease, consignment, transfer or other disposition (in one transaction, a series of transactions or otherwise) of property of a Person, including a sale-leaseback transaction, synthetic lease, issuance of Equity Interests by a subsidiary, Division, or sale, assignment, transfer or other disposal, with or without recourse, of any notes, accounts receivable or related rights.
Distribution: any declaration or payment of a distribution, interest or dividend on any Equity Interest (other than payment-in-kind); distribution, advance or repayment of Debt to a holder of Equity Interests; or purchase, redemption, or other acquisition or retirement for value of any Equity Interest.
Division: the division of assets, liabilities and/or obligations of a Person among two or more Persons (whether pursuant to a “plan of division” or similar arrangement), which may or may not 
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include the original dividing Person and pursuant to which the original dividing Person may or may not survive.
Dollars: lawful money of the United States.
Dominion Account: a special account established by Borrowers at Lender or a bank acceptable to Lender, over which Lender has exclusive control for withdrawal purposes.
Due Diligence Trigger Period: the period (a) commencing on any day that Availability is less than the greater of (i) $7,000,000 for a period of three (3) consecutive days or (ii) 17.5% of the Borrowing Base for a period of three (3) consecutive days; and (b) continuing until, during each of the preceding 30 consecutive days, (i) no Event of Default has existed and (ii) Availability has been equal to or greater than the greater of (x) $7,000,000 and (y) 17.5% of the Borrowing Base.
EBITDA: determined on a consolidated basis for Borrowers and Subsidiaries, net income calculated before interest expense, plus, without duplication, the following amounts, in each case, to the extent included in determining net income: (i) income taxes; (ii) total depreciation and amortization expense (including, without limitation, amortization of intangibles from purchase price accounting); (iii) gains or losses arising from the sale of capital assets; (iv) gains arising from the write-up of assets and any extraordinary gains, noncash stock based compensation expense, noncash exchange, transaction or performance losses relating to any foreign currency hedging transactions or currency fluctuations; (v) costs, fees and expenses in connection with the execution and delivery of this Agreement and the other Loan Documents and any amendments or other modifications hereto or thereto; (vi) one-time costs, fees, and expenses in connection with Permitted Acquisitions or Investments, Dispositions, issuances or repurchases of Equity Interests, or the incurrence, amendment or waiver of Indebtedness (in each case not prohibited hereunder), in each case, whether or not consummated; (vii) noncash purchase accounting adjustments (including, but not limited to deferred revenue write down) and any adjustments as required or permitted by the application of ASC 805 – Business Combinations (requiring the use of acquisition method of accounting for business combination), ASC 350 – Intangibles – Goodwill and Other (relating to subsequent accounting of goodwill and certain identifiable intangibles) and ASC 360 – Property Plant and Equipment (relating to impairment of long-lived assets), in each case, in connection with Permitted Acquisitions, (viii) noncash charges for goodwill and other intangible impairments in connection with Permitted Acquisitions or otherwise; (ix) the amount of any restructuring charge, accrual or reserve, integration cost or other business optimization expense, including any restructuring costs incurred in connection with acquisitions, mergers or consolidations after the Closing Date and any other restructuring expenses, severance expenses, one-time compensation charges, post-retirement employee benefits plans, any expenses relating to reconstruction, decommissioning or recommissioning fixed assets for alternate use, expenses or charges relating to facility closing costs, acquisition integration costs and signing, retention or completion bonuses or expenses, any extraordinary, unusual or non-recurring non-cash charges; (x) other noncash items reducing consolidated net income (excluding any such non cash item to the extent that it represents an accrual or reserve for potential cash items in any future period or amortization of a prepaid cash item that was paid in a prior period) approved by the Lender in writing as an ‘add-back’ to EBITDA; (xi) expenses and payments that are covered by indemnification or purchase price adjustment provisions in any agreement entered into by a Loan Party in connection with any proposed or actual Permitted Acquisition and for which (A) the indemnitor or counterparty has assumed coverage and (B) the Borrower reasonably expects to receive such expenses and payments within one year from the date of calculation; (xii) any expense deducted in calculating consolidated net income and reimbursed by third parties; (xiii) the amount of earn-out obligations incurred in connection with any Permitted Acquisition, to the extent such earn-outs are permitted under this Agreement and expensed under GAAP standards; and (xiv) write-downs of capitalized software development costs.  Notwithstanding the foregoing, for any period of measurement, the aggregate amounts calculated under clauses (vi), (ix), and (xiv) and actually paid in cash by Borrower shall not exceed 30% of EBITDA, calculated without taking into account this limitation. 
Electronic Copy: as defined in Section 12.8.
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Electronic Record and Electronic Signature: as defined in 15 U.S.C. §7006.
Eligible Account: an Account owing to a Borrower that arises in the Ordinary Course of Business from the sale of goods, is payable in Dollars and is deemed by Lender, in its Permitted Discretion, to be an Eligible Account.  Without limiting the foregoing, no Account shall be an Eligible Account if:
(a) it is unpaid for more than 60 days after the original due date, or more than 150 days after the original invoice date; 
(b) 50% or more of the Accounts owing by the Account Debtor are not Eligible Accounts under the foregoing clause; 
(c) with respect to: 
(i) Accounts owed by Best Buy Co., Inc. and its Affiliates, when aggregated with other Accounts owing by such Account Debtor and its Affiliates, it exceeds 65% of the aggregate Eligible Accounts (or such other percentage as Lender may establish for the Account Debtor from time to time); 
(ii) Accounts owed by Costco Wholesale Corporation and its Affiliates, when aggregated with other Accounts owing by such Account Debtor and its Affiliates, it exceeds 50% of the aggregate Eligible Accounts (or such other percentage as Lender may establish for the Account Debtor from time to time); 
(iii) Accounts owed by Walmart Inc. and its Affiliates, when aggregated with other Accounts owing by such Account Debtor and its Affiliates, it exceeds 50% of the aggregate Eligible Accounts (or such other percentage as Lender may establish for the Account Debtor from time to time); 
(iv) Accounts owed by Amazon.Com, Inc. and its Affiliates, when aggregated with other Accounts owing by such Account Debtor and its Affiliates, it exceeds 50% of the aggregate Eligible Accounts (or such other percentage as Lender may establish for the Account Debtor from time to time); and 
(v) Accounts owed by all other Account Debtors and their Affiliates, when aggregated with other Accounts owing by the Account Debtor, it exceeds 15% of the aggregate Eligible Accounts (or such higher percentage as Lender may establish for the Account Debtor from time to time); 
(d) it does not conform with a covenant or representation herein; 
(e) it is owing by a creditor or supplier, or is otherwise subject to a potential offset, counterclaim, dispute, deduction, discount, recoupment, reserve, defense, chargeback, credit or allowance (but ineligibility shall be limited to the amount thereof); 
(f) an Insolvency Proceeding has been commenced by or against the Account Debtor; or the Account Debtor has failed, has suspended or ceased doing business, is liquidating, dissolving or winding up its affairs, is not Solvent, or is the target of any Sanction or on any specially designated nationals list maintained by OFAC; or the Borrower is not able to bring suit or enforce remedies against the Account Debtor through judicial process; 
(g) the Account Debtor is organized or has its principal offices or assets outside the United States or Canada, unless the Account is supported by a letter of credit (delivered to and directly drawable by Lender) or credit insurance satisfactory in all respects to Lender; 
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(h) it is owing by a Governmental Authority, unless the Account Debtor is the United States or any department, agency or instrumentality thereof and the Account has been assigned to Lender in compliance with the federal Assignment of Claims Act; 
(i) it is not subject to a duly perfected, first priority Lien in favor of Lender, or is subject to any other Lien; 
(j) the goods giving rise to it have not been delivered to the Account Debtor, the services giving rise to it have not been accepted by the Account Debtor, or it otherwise does not represent a final sale; 
(k) it is evidenced by Chattel Paper or an Instrument of any kind, or has been reduced to judgment; 
(l) its payment has been extended past 150 days after the original invoice date or the Account Debtor has made a partial payment, which partial payment is the result of the Account Debtor’s financial condition or inability to pay; 
(m) it arises from a sale to an Affiliate, from a sale on a cash-on-delivery, bill-and-hold, sale or return, sale on approval, consignment, or other repurchase or return basis, or from a sale for personal, family or household purposes; 
(n) it represents a progress billing or retainage, or relates to services for which a performance, surety or completion bond or similar assurance has been issued; or 
(o) it includes a billing for interest, fees or late charges, but ineligibility shall be limited to the extent thereof.  
In calculating delinquent portions of Accounts under clauses (a) and (b), credit balances more than 60 days after the original due date and more than 150 days after the original invoice date will be excluded.
Enforcement Action: any action to enforce any Obligations or Loan Documents or to realize upon any Collateral, whether by judicial action, self-help, notification of Account Debtors, setoff or recoupment, credit bid, deed in lieu of foreclosure, action in an Insolvency Proceeding or otherwise.
Environmental Laws: Applicable Laws (including programs, permits and guidance promulgated by regulators) relating to public health (other than occupational safety and health regulated by OSHA) or the protection or pollution of the environment, including the Resource Conservation and Recovery Act (42 U.S.C. §§6991-6991i), Clean Water Act (33 U.S.C. §1251 et seq.) and CERCLA.
Environmental Notice: a notice (whether written or oral) from any Governmental Authority or other Person of any possible noncompliance with, investigation of a possible violation of, litigation relating to, or potential fine or liability under any Environmental Law, or with respect to any Environmental Release, environmental pollution or hazardous materials, including any complaint, summons, citation, order, claim, demand or request for correction, remediation or otherwise.
Environmental Release: a release as defined in CERCLA or under any other Environmental Law.
Equity Interest: the interest of any (a) shareholder in a corporation; (b) partner in a partnership (whether general, limited, limited liability or joint venture); (c) member in a limited liability company; or (d) other Person having any other form of equity security or ownership interest.
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ERISA: the Employee Retirement Income Security Act of 1974.
ERISA Affiliate: any trade or business (whether or not incorporated) under common control with an Obligor within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).
ERISA Event: (a) a Reportable Event with respect to a Pension Plan; (b) withdrawal of an Obligor or ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) complete or partial withdrawal of an Obligor or ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) filing of a notice of intent to terminate, treatment of a Pension Plan amendment as a termination under Section 4041 or 4041A of ERISA, or institution of proceedings by the PBGC to terminate a Pension Plan; (e) determination that a Pension Plan is considered an at-risk plan or a plan in critical or endangered status under the Code or ERISA; (f) an event or condition that constitutes grounds under Section 4042 of ERISA for termination of, or appointment of a trustee to administer, any Pension Plan; (g) imposition of any liability on an Obligor or ERISA Affiliate under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA; or (h) failure by an Obligor or ERISA Affiliate to meet all applicable requirements under the Pension Funding Rules in respect of a Pension Plan, whether or not waived, or to make a required contribution to a Multiemployer Plan.
Event of Default: as defined in Section 11.
Excluded Accounts: (a) deposit accounts exclusively used for payroll, payroll taxes or employee benefits, (b) escrow accounts and trust accounts where Borrower or any Subsidiary holds the funds exclusively for the benefit of one or more unaffiliated third parties, (c) any deposit account the pledge of which is prohibited by applicable law, (d) deposit accounts exclusively used for securing Permitted Liens securing Borrowers’ obligations under letters of credit, (e) accounts containing not more than $500,000 in the aggregate at any time, (f) restricted cash accounts related to foreign tax duties, (g) merchant accounts (other than any assets held therein), (h) Deposit Accounts located in Canada containing not more than $5,000,000 in the aggregate at any time, (i) a segregated Deposit Account exclusively used to hold the proceeds of the sale of Equity Interests pursuant to clause (c)(i) of the definition of “Excluded Assets”, and (j) other accounts acceptable to Lender.
Excluded Assets: 
(a)Excluded Accounts; 
(b)Intellectual Property;
(c)any cash received as proceeds of the sale of Equity Interests of Borrower Agent; provided, that such cash is held in a segregated Deposit Account and, within 90 days of receipt thereof, such cash is either (i) used by Borrowers for any purpose not prohibited herein or (ii) transferred to a Deposit Account subject to a Deposit Account Control Agreement; 
(d)the Equity Interests of all Subsidiaries; 
(e)any Inventory located in Mexico and remaining therein; 
(f)any Inventory in-transit to and from a foreign location; and
(g)any property to the extent that such grant of a security interest is prohibited by any binding contract or any requirement of law of a governmental authority or constitutes a breach or default under or results in the termination of or requires any consent not obtained 
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under, any contract, license, agreement, instrument or other document evidencing or giving rise to such property; provided that no asset or property shall be excluded from the Collateral to the extent the restriction described in this clause (g) would be rendered ineffective pursuant to Section 9-406, 9-407, 9-408 or 9-409 of the UCC or any other applicable law or principles of equity, or to the extent that any necessary consents or waivers have been obtained to allow the security interest in such asset or property notwithstanding such restriction.
Excluded Swap Obligation: with respect to an Obligor, each Swap Obligation as to which, and only to the extent that, such Obligor’s guaranty of or grant of a Lien as security for such Swap Obligation is or becomes illegal under the Commodity Exchange Act because the Obligor does not constitute an “eligible contract participant” as defined in the act (determined after giving effect to any keepwell, support or other agreement for the benefit of such Obligor and all guarantees of Swap Obligations by other Obligors) when such guaranty or grant of Lien becomes effective with respect to the Swap Obligation.  If a hedge agreement governs more than one Swap Obligation, only the Swap Obligation(s) or portions thereof described in the foregoing sentence shall be Excluded Swap Obligation(s) for the applicable Obligor.
Excluded Taxes: any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or 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 the Borrower Agent under Section 3.8) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 5.7, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before it changed its lending office, (c) Taxes attributable to such Recipient’s failure to comply with Section 5.7.6 and (d) any withholding Taxes imposed pursuant to FATCA.  
Extraordinary Expenses: all costs, expenses or advances incurred by any Indemnitee during an Event of Default that has occurred and is continuing or Obligor’s Insolvency Proceeding, including those relating to any (a) audit, inspection, repossession, storage, repair, appraisal, insurance, processing, preparation or advertising for sale, sale, collection, or other preservation of or realization upon Collateral; (b) action, arbitration or other proceeding (whether instituted by or against Lender, any Obligor, any creditor(s) of an Obligor or any other Person) in any way relating to any Collateral, Lender’s Lien, Loan Documents, Letters of Credit or Obligations, including any lender liability or other Claims; (c) Enforcement Action or exercise of any rights or remedies in, or the monitoring of, any Insolvency Proceeding; (d) settlement or satisfaction of taxes, charges or Liens with respect to any Collateral; (e) negotiation and documentation of any Modification, workout, restructuring, forbearance, liquidation or collection with respect to any Loan Document, Collateral or Obligations.  Such costs, expenses and advances include transfer fees, Other Taxes, storage and insurance costs, permit fees, utility expenses, legal and accounting fees and expenses, appraisal costs, brokers’ and auctioneers’ commissions, environmental study costs, wages and salaries paid to employees of any Obligor or independent contractors in liquidating Collateral, and travel expenses.
FATCA: Sections 1471 through 1474 of the Code (including any amended or successor version if substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing such Sections of the Code.
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Federal Funds Rate: for any day, the per annum rate calculated by FRBNY based on such day’s federal funds transactions by depository institutions (as determined in such manner as FRBNY shall set forth on its public website from time to time) and published on the next Business Day by FRBNY as the federal funds effective rate; provided, that in no event shall the Federal Funds Rate be less than zero.
Financial Covenant Changeover Date:  the first day of the Fiscal Quarter after Borrowers have achieved a Fixed Charge Coverage Ratio of at least 1.00 to 1.00 for two (2) consecutive Fiscal Quarters. 
Financial Covenant Trigger Period: the period (a) commencing on any day that (i) an Event of Default occurs or (ii) Availability is less than the greater of (x) 15% of the Borrowing Base or (y) $6,000,000; and (b) continuing until, during each of the preceding 30 consecutive days, (i) no Event of Default has existed and (ii) Availability has been equal to or greater than the greater of (x) 15% of the Borrowing Base and (y) $6,000,000.
Financial Reporting Trigger Period: the period (a) commencing on any day that (i) an Event of Default occurs or (ii) Availability is less than the greater of (x) 15% of the Borrowing Base for a period of three (3) consecutive days or (y) $6,000,000 for a period of three (3) consecutive days; and (b) continuing until, during each of the preceding 30 consecutive days, (i) no Event of Default has existed and (ii) Availability has been equal to or greater than the greater of (x) 15% of the Borrowing Base and (y) $6,000,000.
Fiscal Quarter: a fiscal quarter of Borrowers and Subsidiaries for accounting and tax purposes.
Fiscal Year: the fiscal year of Borrowers and Subsidiaries for accounting and tax purposes, ending on December 31 of each year.
Fixed Charge Coverage Ratio: the ratio, determined on a consolidated basis for Borrowers and Subsidiaries for the most recent 12 months as of the last day of any Fiscal Quarter, of (a) EBITDA minus Capital Expenditures (except those financed with Borrowed Money other than Loans) and cash taxes paid (including Permitted Tax Distributions), to (b) Fixed Charges.
Fixed Charges: the sum of interest expense (other than payment-in-kind), principal payments made on Borrowed Money, and Distributions made in cash (other than Permitted Tax Distributions) and loans or advances made pursuant to clause (l) in the definition of “Restricted Investments”.
Flood Laws: the National Flood Insurance Act of 1968, Flood Disaster Protection Act of 1973 and related laws.
FLSA: the Fair Labor Standards Act of 1938.
Foreign Lender: (a) if a Borrower is a U.S. Person, a Lender (or if the Lender is a disregarded entity for U.S. federal income tax purposes, the Person treated as the owner of the assets of such Lender for U.S. federal income tax purposes), with respect to such Borrower, that is not a U.S. Person, and (b) if a Borrower is not a U.S. Person, a Lender or if the Lender is a disregarded entity for U.S. federal income tax purposes, the Person treated as the owner of the assets of such Lender for U.S. federal income tax purposes), with respect to such Borrower, that is resident or organized under the laws of a jurisdiction other than that in which such Borrower is resident for tax purposes.
Foreign Plan: any employee benefit plan or arrangement (a) maintained or contributed to by any Obligor or Subsidiary that is not subject to the laws of the United States; or (b) mandated by a government other than the United States for employees of any Obligor or Subsidiary.
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Foreign Subsidiary: any direct or indirect Subsidiary of a Borrower (a) that is not a U.S. Person, (b) that is a direct or indirect Subsidiary of a Subsidiary described in clause (a), or (c) substantially all of the assets of which are Equity Interests in one or more “controlled foreign corporations” as defined in Section 957 of the Code.
FRBNY: the Federal Reserve Bank of New York.
Full Payment: with respect to any Obligations, (a) the full and indefeasible cash payment thereof, including any interest, fees and other charges accruing in an Insolvency Proceeding (whether or not allowed in the proceeding); and (b) if such Obligations are LC Obligations or inchoate or contingent in nature, Cash Collateralization thereof (or delivery of standby letter(s) of credit acceptable to Lender in its discretion, in the amount of required Cash Collateral).  The Loans shall not be deemed to have been paid in full unless the Commitment is terminated.
GAAP: generally accepted accounting principles in effect in the United States from time to time.
Governmental Approvals: all authorizations, consents, approvals, licenses and exemptions of, registrations and filings with, and required reports to, all Governmental Authorities.
Governmental Authority: any federal, state, local, foreign or other agency, authority, body, commission, court, instrumentality, political subdivision, central bank, or other entity or officer exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions for any governmental, judicial, investigative, regulatory or self-regulatory authority (including the Financial Conduct Authority, the Prudential Regulation Authority and any supra-national bodies such as the European Union or European Central Bank).
Guarantor Payment: as defined in Section 5.8.3.
Guarantors: each Person that guarantees payment or performance of Obligations. Notwithstanding anything to the contrary, no Foreign Subsidiary nor any Non-Material Subsidiary shall be a Guarantor.
Guaranty: each guaranty agreement executed by a Guarantor in favor of Lender.
Indemnified Taxes: (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of an Obligation; and (b) to the extent not otherwise described in clause (a), Other Taxes.
Indemnitees: Lender, other Secured Parties, and their officers, directors, employees, Affiliates and Lender Professionals.
Insolvency Proceeding: any case or proceeding commenced by or against a Person under any state, federal or foreign law for, or any agreement of such Person to, (a) the entry of an order for relief under the Bankruptcy Code, or any other insolvency, debtor relief or debt adjustment law; (b) the appointment of a receiver, trustee, liquidator, administrator, conservator or other custodian for such Person or any part of its Property; or (c) an assignment or trust mortgage for the benefit of creditors.
Intellectual Property: all intellectual and similar Property of a Person, including inventions, designs, patents, copyrights, trademarks, service marks, trade names, trade secrets, confidential or proprietary information, customer lists, know-how, software and databases; all embodiments or fixations thereof and all related documentation, applications, registrations and franchises; all licenses or other rights to use any of the foregoing; and all books and records relating to the foregoing.
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Intellectual Property Claim: any claim or assertion (whether in writing, by suit or otherwise) that a Borrower’s or Subsidiary’s ownership, use, marketing, sale or distribution of any Inventory, Equipment, Intellectual Property or other Property violates another Person’s Intellectual Property.
Interest Payment Date: (a) for each BSBY Loan, the last day of the applicable Interest Period and, if the Interest Period is more than three months, each three month anniversary of the beginning of the Interest Period; and (b) for all other Loans, the first day of each calendar month.
Interest Period: as defined in Section 3.1.3.
Investment: an Acquisition, an acquisition of record or beneficial ownership of any Equity Interests of a Person, or an advance or capital contribution to or other investment in a Person. 
Investment Grade Accounts Formula Amount: 90% of the Value of Investment Grade Eligible Accounts.
Investment Grade Eligible Accounts: Eligible Accounts owing from any Account Debtor (a) whose securities are rated BBB- or higher by S&P or Baa3 or higher by Moody’s at such time or (b) is a wholly-owned subsidiary of a Person whose securities are rated BBB- or higher by S&P or Baa3 or higher by Moody’s at such time.
IRS: the United States Internal Revenue Service.
LC Application: an application by Borrower Agent to Lender for issuance of a Letter of Credit, in form and substance satisfactory to Lender.
LC Conditions: upon giving effect to issuance of a Letter of Credit, (a) the conditions in Section 6 are satisfied; (b) total LC Obligations do not exceed the Letter of Credit Subline and Revolver Usage does not exceed the Borrowing Base; (c) the Letter of Credit and payments thereunder are denominated in Dollars or other currency satisfactory to Lender; and (d) the purpose and form of the Letter of Credit are satisfactory to Lender in its discretion.
LC Documents: all documents, instruments and agreements (including requests and applications) delivered by any Borrower or other Person to Lender in connection with a Letter of Credit.
LC Obligations: the sum of (a) all amounts owing by Borrowers for draws under Letters of Credit; and (b) the Stated Amount of all outstanding Letters of Credit.
LC Request: a request by Borrower Agent for issuance of a Letter of Credit, in form satisfactory to Lender.
Lender Professionals: attorneys, accountants, appraisers, auditors, advisors, consultants, agents, service providers, business valuation experts, environmental engineers or consultants, turnaround consultants, and other professionals, experts and representatives retained or used by Lender.
Lending Office: any office (including a domestic or foreign Affiliate or branch) used by Lender to fulfill any of its obligations hereunder.
Letter of Credit: any standby or documentary letter of credit, foreign guaranty, documentary bankers acceptance, indemnity, reimbursement agreement or similar instrument issued by Lender for the account or benefit of a Borrower or Affiliate of a Borrower.
Letter of Credit Subline: $5,000,000.
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License: any license or agreement under which an Obligor is authorized to use Intellectual Property in connection with any manufacture, marketing, distribution or disposition of Collateral, any use of Property or any other conduct of its business.
Licensor: any Person from whom an Obligor obtains the right to use any Intellectual Property.
Lien: an interest in Property securing an obligation or claim, including any lien, security interest, pledge, hypothecation, assignment, trust, reservation, assessment right, encroachment, easement, right-of-way, covenant, condition, restriction, lease, or other title exception or encumbrance.
Lien Waiver: an agreement, in form and substance satisfactory to Lender, by which (a) for any material Collateral with a book value in excess of $5,000,000 located on leased premises, the lessor waives or subordinates any Lien it may have on the Collateral, and allows Lender to enter the premises and remove, store and dispose of Collateral; (b) for any material Collateral with a book value in excess of $5,000,000 held by a warehouseman, processor, shipper, customs broker or freight forwarder, such Person waives or subordinates any Lien it may have on the Collateral, agrees to hold any Documents in its possession relating to the Collateral as agent for Lender, and agrees to deliver Collateral to Lender upon request; (c) for any material Collateral with a book value in excess of $5,000,000 held by a repairman, mechanic or bailee, such Person acknowledges Lender’s Lien, waives or subordinates any Lien it may have on the Collateral, and agrees to deliver Collateral to Lender upon request; (d) for any material Collateral with a book value in excess of $5,000,000 subject to a Licensor’s Intellectual Property rights, the Licensor grants to Lender the right, vis-à-vis such Licensor, to enforce Lender’s Liens with respect to the Collateral, including the right to dispose of it with the benefit of the Intellectual Property, whether or not a default exists under any applicable License and (e) any Person who stores and maintains the electronic books and records of an Obligor, agrees to provide access to Lender for such books and records.  
Liquidity: means, as of any date of determination, the sum of (a) Availability plus (b) the aggregate amount of domestic unrestricted cash (including certificates of deposits and time deposits) and Cash Equivalents on hand (in each case, free and clear of all Liens other than, the Liens of Lender), held in Deposit Accounts or Securities Accounts (excluding the Cash Collateral Account) specified by Borrower and held at Bank of America (or any of its Affiliates) and subject to a Deposit Account Control Agreement, or a Security Account Control Agreement, as applicable, in favor of Lender. 
Loan: a loan made by Lender under the credit facility established by this Agreement.
Loan Documents: this Agreement, Other Agreements and Security Documents.
Loan Year: each 12 month period commencing on the Closing Date or an anniversary thereof. 
Margin Stock: as defined in Regulation U of the Federal Reserve Board of Governors.
Material Adverse Effect: the effect of any event or circumstance that, (a) has a material adverse effect on the business, operations, Properties or condition (financial or otherwise) of any Obligor, the value of any material portion of the Collateral, the enforceability of any Loan Document, or the validity or priority of Lender’s Lien on any Collateral; (b) impairs the ability of the Obligors to repay the Obligations; or (c) otherwise impairs Lender’s ability to enforce or collect any Obligations or to realize upon any Collateral.
Material Contract: any agreement or arrangement to which an Obligor is a party (other than the Loan Documents), for which breach, termination, nonperformance or failure to renew could reasonably be expected to have a Material Adverse Effect. 
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Modification: any amendment, supplement, extension, approval, consent, waiver, change or other modification of or under a Loan Document, including any waiver of a Default or Event of Default.
Moody’s: Moody’s Investors Service, Inc. or any successor acceptable to Lender.
Multiemployer Plan: any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which an Obligor or ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.
Multiple Employer Plan: a Plan with two or more contributing sponsors, including an Obligor or ERISA Affiliate, at least two of whom are not under common control, as described in Section 4064 of ERISA.
Non-Investment Grade Formula Amount: 85% of the Value of Non-Investment Grade Eligible Accounts.
Non-Investment Grade Eligible Accounts: Eligible Accounts other than Investment Grade Eligible Accounts.
Non-Material Subsidiary: as of the last day of each Fiscal Quarter and at any other date of determination, any one ore more domestic Subsidiaries which as of such date, in the aggregate (a) hold assets representing 5% or less of the Borrower’s consolidated total assets as of such date (determined in accordance with GAAP), and (b) have generated 5% or less of the Borrower’s consolidated total revenues determined in accordance with GAAP for the four fiscal quarter period ending on the last day of the most recent period for which financial statements have been delivered after the Closing Date.  
Notice of Borrowing: notice by Borrower Agent of a Borrowing, in form satisfactory to Lender.
Notice of Conversion/Continuation: notice by Borrower Agent of conversion or continuation of a Loan as a BSBY Loan, in form satisfactory to Lender.
Notice of Prepayment: notice by Borrower Agent of prepayment of a Loan, in form satisfactory to Lender.
Obligations: all (a) principal of and premium, if any, on the Loans, (b) LC Obligations and other obligations of Obligors with respect to Letters of Credit, (c) interest, expenses, fees, indemnification obligations, Claims and other amounts payable by Obligors under Loan Documents, (d) Bank Product Debt, and (e) other Debts, obligations and liabilities of any kind owing by any Obligor to Lender, in each case whether now existing or hereafter arising, whether evidenced by a note or other writing, whether allowed in any Insolvency Proceeding, whether arising from an extension of credit, issuance of a letter of credit, acceptance, loan, guaranty, indemnification or otherwise, and whether direct or indirect, absolute or contingent, due or to become due, primary or secondary, or joint or several; provided, that Obligations of an Obligor shall not include its Excluded Swap Obligations.
Obligor: each Borrower and each Guarantor.
OFAC: Office of Foreign Assets Control of the U.S. Treasury Department.
Ordinary Course of Business: the ordinary course of business of any Borrower or Subsidiary, undertaken in good faith and consistent with Applicable Law.
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Organic Documents: with respect to any Person, its charter, certificate or articles of incorporation, bylaws, articles of organization, limited liability agreement, operating agreement, members agreement, shareholders agreement, partnership agreement, certificate of partnership, certificate of formation, voting trust agreement, or similar agreement or instrument governing the formation or operation of such Person.
OSHA: the Occupational Safety and Hazard Act of 1970.
Other Agreement: each LC Document, Lien Waiver, Borrower Material, Communication, subordination agreement, intercreditor agreement, or other document, instrument or agreement (other than this Agreement or a Security Document) now or hereafter delivered by an Obligor or other Person to Lender in connection with any transactions relating hereto.
Other Connection Taxes: with respect to a Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the taxing jurisdiction imposing such Tax (other than connections arising solely from the Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a Lien under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).
Other Taxes: all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a Lien under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 3.8).
Overadvance: the amount by which Revolver Usage exceeds the Borrowing Base at any time.
Patriot Act: the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107-56, 115 Stat. 272 (2001).
Payment Conditions: as to any relevant action contemplated in this Agreement, the satisfaction of each of the following:
(a) as of the date of any such action and immediately after giving effect thereto, no Event of Default has occurred and is continuing;
(b) either one of the following:
(i) (x) average Availability (after giving pro forma effect to such action) during the thirty (30) consecutive day period ending on and including the date of such action, is not less than the greater of (1) 17.5% of the Borrowing Base or (2) $7,000,000; and (y) the Fixed Charge Coverage Ratio measured on a trailing twelve month period as of the end of the most recently ended Fiscal Quarter prior to such action, determined on a pro forma basis after giving effect to such action, shall be equal to or greater than 1.00:1.00; or
(ii) average Availability (after giving pro forma effect to such action) during the thirty (30) consecutive day period ending on and including the date of such action, is not less than the greater of (1) 20% of the Borrowing Base or (2) $8,000,000; and
(c) the Lender has received a certificate from a Senior Officer of Borrower Agent certifying as to compliance with the preceding clauses and demonstrating (in reasonable detail) the calculations required thereunder.
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Payment Item: each check, draft or other item of payment payable to a Borrower, including those constituting proceeds of any Collateral.
PBGC: the Pension Benefit Guaranty Corporation.
Pension Funding Rules: Code and ERISA rules regarding minimum required contributions (including installment payments) to Pension Plans set forth in Sections 412, 430, 431, 432 and 436 of the Code and Sections 302, 303, 304 and 305 of ERISA.
Pension Plan: any employee pension benefit plan (as defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by an Obligor or ERISA Affiliate or to which the Obligor or ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the preceding five plan years.
Permitted Acquisition: any Acquisition as long as (a) the assets, business or Person being acquired is useful or engaged in the business of Borrowers and Subsidiaries; (b) no Debt or Liens are assumed or incurred, except Debt permitted by Sections 10.2.1 and Permitted Liens; (c) the Payment Conditions are satisfied with respect to each such Acquisition; and (d) the Borrowers deliver to Lender, at least 5 Business Days prior to the Acquisition, copies of all material agreements relating thereto and a certificate, in form and substance satisfactory to Lender, stating that the Acquisition is a “Permitted Acquisition” and demonstrating compliance with the foregoing requirements.
Permitted Contingent Obligations: Contingent Obligations (a) arising from endorsements of Payment Items for collection or deposit in the Ordinary Course of Business; (b) relating to Swaps permitted hereunder; (c) existing on the Closing Date, and any extension or renewal thereof that does not increase the amount of such Contingent Obligation when extended or renewed; (d) incurred in the Ordinary Course of Business with respect to surety, appeal or performance bonds, or other similar obligations; (e) arising from customary indemnification obligations in favor of purchasers in connection with dispositions of Equipment not prohibited hereunder; (f) arising under the Loan Documents; or (g) in an aggregate amount of $5,000,000 or less at any time. 
Permitted Discretion: a determination made in good faith, using reasonable business judgment (from the perspective of a secured, asset-based lender).
Permitted Disposition: as long as no Event of Default has occurred and is continuing, a Disposition constituting (a) any Disposition of Property or assets no longer used or useful to the business of Borrower or any worn out, obsolete or surplus Property, assets or Equipment; (b) any Disposition of Inventory in the Ordinary Course of Business; (c) any Lien or Investment not prohibited hereunder; (d) Borrower’s use or transfer of money or cash equivalents in a manner that is not prohibited by the terms of this Agreement; (e) non-exclusive licenses for the use of the property of Borrower or its Subsidiaries in the Ordinary Course of Business and Permitted Exclusive Licenses; (f) Dispositions of other non-material assets of Borrower or its Subsidiaries (other than Accounts and Inventory) that do not in the aggregate exceed $5,000,000 in book value in any 12 month period; (g) early payment discounts given in the Ordinary Course of Business; (h) settlement of Accounts which are not Eligible Accounts in the Ordinary Course of Business; and (i) any Disposition approved by Lender.
Permitted Distributions: (a) Permitted Tax Distributions, (b) conversion or exchange of convertible securities into or for other securities pursuant to the terms of such convertible securities or otherwise in exchange thereof, (c) payment of dividends solely in Equity Interests, (d) repurchase of stock, partnership, membership, or  other ownership interest or other Equity Interests held by current or former employees, officers, directors or consultants pursuant to employee stock purchase plans, stockholder plans, director or consultant stock option plans, employee stock option agreements, restricted stock agreements, equity incentive plans or other similar agreement or plans so long as no Event of Default has occurred and is continuing at the time of any such repurchase and would not exist after giving effect to any such repurchase, (e) de minimis payments in lieu of 
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fractional shares, (f) purchases of Equity Interests or options, warrants or other agreements to acquire such Equity Interests or convertible securities, (g) purchases of Equity Interests pledged as collateral for loans to employees, (h) purchases for value of any rights distributed in connection with any stockholder rights plan, (i) purchases of Equity Interests in connection with the exercise of stock options, warrants or other equity awards by way of cashless exercise or in connection with the satisfaction of withholding tax obligations, and (j) other Distributions made in cash so long as the Payment Conditions are satisfied with respect to each such Distribution made under this clause (j).  Notwithstanding the foregoing, Distributions permitted under clauses (d), (g) and (h) shall not exceed $2,500,000 in the aggregate during any Fiscal Year unless, giving effect to any such Distribution, the Payment Conditions are satisfied. 
Permitted Exclusive License: an exclusive license pertaining to a customized product for a specific customer, and licenses that could not result in a legal transfer of title of the licensed property but that may be exclusive in respects other than territory and that may be exclusive as to territory only as to discrete geographical areas outside of the United States.
Permitted Lien: as defined in Section 10.2.2.
Permitted Purchase Money Debt: Purchase Money Debt of Borrowers and Subsidiaries that is unsecured or secured only by a Purchase Money Lien, as long as the aggregate amount does not exceed $10,000,000 at any time.
Permitted Tax Distributions: so long as no Event of Default has then occurred and is continuing or would result therefrom, Distributions paid from time to time (which may be estimated and paid no more frequently than quarterly by the Borrowers to the holders of its Equity Interests not to exceed in the aggregate in any Fiscal Year an amount equal to the federal and state income taxes of the holders of Borrowers’ Equity Interests which are attributable to the taxable income of Borrowers and their Subsidiaries calculated based on statutory rates.
Person: any individual, corporation, limited liability company, partnership, joint venture, association, trust, unincorporated organization, Governmental Authority or other entity of any kind.
Plan: any Benefit Plan maintained for employees of an Obligor or ERISA Affiliate, or to which an Obligor or ERISA Affiliate is required to contribute on behalf of its employees.
Platform: as defined in Section 12.3.3.
Prime Rate: the rate of interest announced by Lender from time to time as its prime rate.  Such rate is set by Lender on the basis of various factors, including its costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above or below such rate.  Any change in such rate publicly announced by Lender shall take effect at the opening of business on the day specified in the announcement.
Properly Contested: with respect to any obligation of an Obligor, (a) the obligation is subject to a bona fide dispute regarding amount or the Obligor’s liability to pay; (b) the obligation is being properly contested in good faith by appropriate proceedings promptly instituted and diligently pursued; (c) appropriate reserves have been established in accordance with GAAP; (d) non-payment could not reasonably be expected to have a Material Adverse Effect, nor result in forfeiture or sale of any assets of the Obligor; (e) no Lien is imposed on assets of the Obligor, unless bonded and stayed to the satisfaction of Lender; and (f) if the obligation results from entry of a judgment or other order, such judgment or order is stayed pending appeal or other judicial review.
Property: any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.
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PTE: a prohibited transaction class exemption issued by the U.S. Department of Labor, as amended from time to time.
Purchase Money Debt: (a) Debt (other than the Obligations) for payment of any of the purchase price of fixed assets, Equipment, software or other Property and (b) any renewals, extensions or refinancings (but not increases) thereof.
Purchase Money Lien: a Lien that secures Purchase Money Debt, encumbering only the fixed assets acquired with such Debt and constituting a Capital Lease or a purchase money security interest under the UCC.
Qualified ECP: an Obligor with total assets exceeding $10,000,000, or that constitutes an “eligible contract participant” under the Commodity Exchange Act and can cause another Person to qualify as an “eligible contract participant” under Section 1a(18)(A)(v)(II) of such act.
Real Estate: all right, title and interest (whether as owner, lessor or lessee) in any real Property or any buildings, structures, parking areas or other improvements thereon.
Recipient: Lender or any other recipient of a payment to be made by an Obligor under a Loan Document or on account of an Obligation.
Refinancing Conditions: no Event of Default exists upon giving effect to the Refinancing Debt and such Debt, when compared to the Debt being extended, renewed or refinanced, (a) does not have a greater principal amount or interest rate, earlier final maturity or shorter weighted average life, (b) is subordinated to the Obligations to at least the same extent as the Debt being refinanced, (c) has representations, covenants, defaults and other terms no less favorable to Borrowers and Lender, and (d) has no additional obligor, guarantor, Lien, or other recourse to any Person or Property.
Refinancing Debt: Borrowed Money that is the result of an extension, renewal or refinancing of Debt permitted under Section 10.2.1(b), (d) or (f).
Reimbursement Date: as defined in Section 2.2.2.
Relevant Governmental Body: the Federal Reserve Board and/or FRBNY, or a committee officially endorsed or convened by the Federal Reserve Board and/or FRBNY.
Rent and Charges Reserve: the aggregate of (a) all past due rent and other past due amounts owing by an Obligor to (i) any landlord, warehouseman, processor, repairman, mechanic, shipper, freight forwarder, broker or other Person who possesses any Collateral or could assert a Lien on any Collateral or (ii) any Person who maintains and stores electronic books and records of an Obligor’s; and (b) a reserve equal to two months’ rent and other charges payable to the landlord at Borrower Agent’s headquarters or any other location where books and records are located, unless the applicable landlord has executed a Lien Waiver.
Reportable Event: an event set forth in Section 4043(c) of ERISA, other than an event for which the 30 day notice period has been waived.
Reporting Date: (a) at any time Revolver Usage is $0, by no later than 20 days after the end of each calendar quarter, (b) at any time Revolver Usage is greater than $0, by no later than 20 days after the end of each calendar month, and (c) at any time a Reporting Trigger Period is in effect and Revolver Usage is greater than $0, by no later than the second Business Day of each week.
Reporting Trigger Period: the period (a) commencing on any day that (i) an Event of Default occurs, or (ii) Availability is less than the greater of (x) $6,000,000 for a period of three (3) consecutive days or (y) 15% of the Borrowing Base for a period of three (3) consecutive days; and (b) continuing until, during each of the preceding 30 consecutive days, (i) no Event of Default has 
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existed and (ii) Availability has been greater than or equal to the greater of (x) $6,000,000 and (y) 15% of the Borrowing Base.
Restricted Investment: any Investment by a Borrower or Subsidiary, other than (a) Investments in Subsidiaries (i) which Investments are in existence on the Closing Date, and (ii) that are Borrowers or Guarantors; (b) Cash Equivalents that are subject to Lender’s Lien and control, pursuant to documentation in form and substance satisfactory to Lender; (c) Reserved; (d) Permitted Acquisitions; (e) Investments consisting of the endorsement of negotiable instruments for deposit or collection or similar transactions in the Ordinary Course of Business; (f) Investments consisting of deposit and investment accounts; (g) Investments accepted in connection with a Disposition not prohibited by Section 10.2.6; (h) Investments (including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the Ordinary Course of Business; (i) Investments consisting of hedging arrangements not otherwise prohibited hereunder; (j) Investments in an aggregate amount not to exceed $2,500,000 per Fiscal Year, consisting of (x) travel advances and employee relocation loans and other employee loans and advances in the Ordinary Course of Business, and (y) loans to employees, officers or directors relating to the purchase of Equity Interests of Borrower or its Subsidiaries pursuant to employee stock purchase plans or agreements approved by Borrower’s board of directors; (k) to the extent constituting an Investment, Investments consisting of “transfer pricing,” “cost plus” arrangements in the Ordinary Course of Business by Borrower in its wholly owned Foreign Subsidiaries (other than directors’ qualifying shares or other similar shares as required by applicable law), for operating expenses, provided that the amount charged to Borrower and the other terms of such arrangements are upon fair and reasonable terms that are no less favorable to Borrower than would be obtained in an arm’s length transaction with a nonaffiliated Person; (l) Investments consisting of loans and advances to Borrower’s wholly owned Foreign Subsidiaries in an aggregate amount not to exceed $500,000 in any Fiscal Year; and (m) any other Investment made in cash so long as the Payment Conditions are satisfied with respect to each such Investment.
Restrictive Agreement: an agreement (other than a Loan Document) that conditions or restricts the right of any Borrower, Subsidiary or other Obligor to incur or repay Borrowed Money, to grant Liens on any assets, to declare or make Distributions, to modify, extend or renew any agreement evidencing Borrowed Money, or to repay any intercompany Debt.
Revolver Usage: the aggregate amount of outstanding Loans plus the Stated Amount of outstanding Letters of Credit.
S&P: Standard & Poor’s Financial Services LLC, a subsidiary of S&P Global Inc., or any successor acceptable to Lender.
Sanction: a sanction administered or enforced by the U.S. government (including OFAC), United Nations Security Council, European Union, U.K. government or other applicable sanctions authority.
Scheduled Unavailability Date: as defined in Section 3.6.2.
Secured Parties: Lender and providers of Bank Products.
Security Documents: the Guaranties, Deposit Account Control Agreements, and all other documents, instruments and agreements now or hereafter securing (or given with the intent to secure) any Obligations.
Senior Officer: the chairman of the board, president, chief executive officer or chief financial officer of the applicable Obligor.
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SOFR: the secured overnight financing rate published by FRBNY, as administrator of the benchmark (or a successor administrator), on its website (or any successor source satisfactory to Lender).
SOFR Adjustment: (a) with respect to Daily Simple SOFR, 0.11448%, and (b) with respect to Term SOFR, 0.11448% for a one month interest period, 0.26161% for a three month interest period and 0.42826% for a six month interest period.
Solvent: as to any Person, such Person (a) owns Property whose fair salable value is greater than the amount required to pay all of its debts (including contingent, subordinated, unmatured and unliquidated liabilities); (b) owns Property whose present fair salable value (as defined below) is greater than the probable total liabilities (including contingent, subordinated, unmatured and unliquidated liabilities) of such Person as they become absolute and matured; (c) is able to pay all of its debts as they mature; (d) has capital that is not unreasonably small for its business and is sufficient to carry on its business and transactions and all business and transactions in which it is about to engage; (e) is not “insolvent” within the meaning of Section 101(32) of the Bankruptcy Code; and (f) has not incurred (by way of assumption or otherwise) any obligations or liabilities (contingent or otherwise) under any Loan Documents, or made any conveyance in connection therewith, with actual intent to hinder, delay or defraud either present or future creditors of such Person or any of its Affiliates.  “Fair salable value” means the amount that could be obtained for assets within a reasonable time, either through collection or through sale under ordinary selling conditions by a capable and diligent seller to an interested buyer who is willing (but under no compulsion) to purchase.
Specified Obligor: an Obligor that is not then an “eligible contract participant” under the Commodity Exchange Act (determined prior to giving effect to Section 5.8.3).
Stated Amount: the outstanding amount of a Letter of Credit, including any automatic increase or tolerance (whether or not then in effect) provided by the Letter of Credit or related LC Documents.
Subordinated Debt: Debt incurred by a Borrower that is expressly subordinate and junior in right of payment to Full Payment of all Obligations and the terms of such subordination are satisfactory to Lender.
Subsidiary: any entity at least 50% of whose voting securities or Equity Interests is owned by an Obligor or combination of Obligors (including indirect ownership through other entities in which an Obligor directly or indirectly owns 50% of the voting securities or Equity Interests).
Successor Rate: as defined in Section 3.6.2.
Swap: as defined in Section 1a(47) of the Commodity Exchange Act.
Swap Obligations: obligations under an agreement relating to a Swap.
Taxes: all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
Term SOFR: for the applicable corresponding Interest Period of BSBY (or if any Interest Period does not correspond to an interest period applicable to SOFR, the closest corresponding interest period of SOFR, but if such interest period of SOFR corresponds equally to two Interest Periods of BSBY, the corresponding interest period of shorter duration shall be applied), the forward-looking term rate based on SOFR that has been selected or recommended by the Relevant Governmental Body.
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Termination Date: October 27, 2024, or such earlier date on which the Commitment terminates hereunder.
UCC: the Uniform Commercial Code as in effect in the State of New York or, when the laws of any other jurisdiction govern the perfection or enforcement of any Lien, the Uniform Commercial Code of such jurisdiction.
Unrestricted Cash: cash and Cash Equivalents not subject to Lender’s Lien and control under documents satisfactory to Lender.
Unfunded Pension Liability: the excess of a Pension Plan’s benefit liabilities under Section 4001(a)(16) of ERISA, over the current value of that Pension Plan’s assets, determined in accordance with the assumptions used for funding the Pension Plan pursuant to the Code, ERISA or the Pension Protection Act of 2006 for the applicable plan year.
Unused Line Fee Rate: a per annum rate equal to 0.20%.
Upstream Payment: a Distribution by a Subsidiary of an Obligor to an Obligor or another direct or indirect Subsidiary of an Obligor.
U.S. Person: any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.
Value: for an Account, its face amount, net of any (a) rebates, discounts (calculated on the shortest terms), credits, allowances or Taxes (including sales, excise or other taxes) that have been or could be claimed by the Account Debtor or any other Person and (b) returns that have been claimed by the Account Debtor.
Withholding Agent: means each Obligor making payments hereunder.
1.2.Accounting Terms.  Under the Loan Documents (except as otherwise specified therein), all accounting terms shall be interpreted, all accounting determinations shall be made, and all financial statements shall be prepared, in accordance with GAAP applied on a basis consistent with the most recent audited financial statements of Borrowers delivered to Lender before the Closing Date and using the same and lease accounting treatment as used in such financial statements; provided, that Borrowers may adopt a change required or permitted by GAAP after the Closing Date as long as Borrowers’ certified public accountants concur in such change, it is disclosed to Lender and the Loan Documents are amended in a manner satisfactory to Lender to address the change.  Upon request by Lender, Borrowers’ financial statements and Borrower Materials shall set forth a reconciliation between calculations made before and after giving effect to any change in GAAP.
1.3.Uniform Commercial Code.  As used herein, the following terms are defined in accordance with the UCC in effect in the State of New York:  “Account,” “Account Debtor,” “Chattel Paper,” “Commercial Tort Claim,” “Deposit Account,” “Document,” “Equipment,” “General Intangibles,” “Goods,” “Instrument,” “Inventory,” “Investment Property,” “Letter-of-Credit Right”, “Security Account,” and “Supporting Obligation.”
1.4.Certain Matters of Construction.  The rules of construction and interpretation included in this Section apply to all Loan Documents.  The terms “herein,” “hereof,” “hereunder” and other words of similar import refer to the applicable document as a whole and not to any particular section, paragraph or subdivision.  Any pronoun used shall be deemed to cover all genders.  In the computation of periods of time from a specified date to a later date, “from” means “from and including,” and “to” and “until” each mean “to but excluding.”  The terms “including” and “include” mean “including, without limitation,” “or” includes “and/or”, and the rule of ejusdem generis does not apply.  Section titles appear as a matter of convenience only and will not affect the interpretation of a Loan Document.  Reference to any (a) law includes all related regulations, interpretations, supplements, amendments and successor provisions; (b) document, instrument or agreement includes 
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any amendment, extension, supplement, waiver, replacement and other modification thereto (to the extent permitted by the Loan Documents); (c) section means, unless the context otherwise requires, a section of the applicable document; (d) exhibit or schedule means, unless the context otherwise requires, an exhibit or schedule to the applicable document, which is thereby incorporated by reference; (e) Person includes its permitted successors and assigns; (f) time of day means the time of day in the Pacific time zone; or (g) discretion of Lender means its sole and absolute discretion exercised at any time.  All references to Value, Borrowing Base components, Loans, Letters of Credit, Obligations and other amounts herein shall be denominated in Dollars, unless expressly provided otherwise, and all determinations (including calculations of Borrowing Base and financial covenants) made from time to time by an Obligor under the Loan Documents shall be made in light of the circumstances existing at such time.  Borrowing Base calculations shall be consistent with historical methods of valuation and calculation, and otherwise satisfactory to Lender (and not necessarily calculated in accordance with GAAP).  Obligors have the burden of establishing any alleged negligence, misconduct or lack of good faith by any Indemnitee under a Loan Document.  No provision of a Loan Document shall be construed against a party by reason of it having, or being deemed to have, drafted the provision.  Reference to an Obligor’s “knowledge” or similar concept means actual knowledge of a Senior Officer, or knowledge that a Senior Officer would have obtained if he or she had engaged in good faith and diligent performance of his or her duties, including reasonably specific inquiries of employees or agents and a good faith attempt to ascertain the matter.
1.5.Division.  Any reference herein to a merger, transfer, consolidation, amalgamation, assignment, sale, disposition or transfer, or similar term, shall be deemed to apply to a Division of or by a limited liability company or limited partnership, or an allocation of assets to a series of any such entity (or the unwinding of a Division or allocation) as if it were a merger, transfer, consolidation, amalgamation, assignment, sale, disposition or transfer or similar term, as applicable, to, of or with a separate Person.  Any Division of a Person shall constitute a separate Person hereunder.
Section 2.CREDIT FACILITIES
1.1.Loan Commitment
1.1.1.  Commitment.  Lender agrees, on the terms set forth herein, to make Loans to Borrowers in an aggregate amount up to the Commitment, from time to time through the Termination Date.  The Loans may be repaid and reborrowed as provided herein.  In no event shall Lender have any obligation to honor a request for a Loan if Revolver Usage at such time plus the requested Loan would exceed the Borrowing Base.  Lender may fulfill its obligations under the Loan Documents through one or more Lending Offices, and this shall not affect any obligations of Obligors under the Loan Documents or with respect to any Obligations.
1.1.2.  Use of Proceeds.  The proceeds of Loans shall be used by Borrowers solely (a) to satisfy existing Debt; (b) to pay fees and transaction expenses associated with the closing of this credit facility; (c) to pay Obligations in accordance with this Agreement; and (d) for other lawful corporate purposes of Borrowers, including working capital.  Borrowers shall not, directly or indirectly, use any Letter of Credit or Loan proceeds, nor use, lend, contribute or otherwise make available any Letter of Credit or Loan proceeds to any Subsidiary, joint venture partner or other Person, (i) to fund any activities of or business with any Person, or in any country, territory or jurisdiction, that, at the time of issuance of the Letter of Credit or funding of the Loan, is the target of any Sanction; or (ii) in any manner that would result in a violation of a Sanction, Anti-Corruption Law or other Applicable Law by any Person (including any Secured Party or other individual or entity participating in any transaction).
1.1.3.  Voluntary Reduction or Termination.  Upon at least 10 days prior written notice to Lender at any time after the first anniversary of this Agreement, Borrowers may terminate or reduce the Commitment.  Each reduction shall be in an increment of $1,000,000, but not less than $5,000,000 and shall be specified in the notice.  Borrowers shall not reduce the Commitment to an aggregate amount less than $20,000,000; provided that Borrower may at its option reduce the 
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Commitment to $0 and terminate this Agreement pursuant to this Section 2.1.3. Any notice of termination or reduction by Borrowers shall be irrevocable. 
1.1.4.  Overadvances.  Any Overadvance shall be repaid by Borrowers on the earlier of demand by Lender or the first Business Day after any Borrower has knowledge thereof, and shall constitute an Obligation secured by the Collateral, entitled to all benefits of the Loan Documents.  No funding or sufferance of an Overadvance shall constitute a waiver by Lender of the Event of Default caused thereby.
1.1.5.Increase in Commitments. Borrowers may request an increase in Commitments from time to time upon not less than 30 days’ notice to Lender, as long as (a) the requested increase is in a minimum amount of $5,000,000 and is offered on the same terms as existing Commitments, and (b) total increases under this Section do not exceed $25,000,000 and no more than 5 increases are made. Total Commitments shall be increased by the requested amount (or such lesser amount committed by Lender) on a date agreed upon by Lender and Borrower Agent, provided (i) the conditions set forth in Section 6.2 are satisfied at such time; and (ii) to the extent Collateral includes any Real Estate, flood insurance diligence and documentation have been completed as required by all Flood Laws or otherwise in a manner satisfactory to all Lender. Lender and Obligors shall execute and deliver such documents and agreements as Lender deems appropriate to evidence the increase in and allocations of Commitments.
1.2.Letter of Credit Facility
1.1.1.  Issuance of Letters of Credit.  Lender agrees to issue Letters of Credit from time to time until 30 days prior to the Termination Date, on the terms set forth herein, including the following:
(a)Each Borrower acknowledges that Lender’s willingness to issue any Letter of Credit is conditioned upon its receipt of a LC Application with respect to the requested Letter of Credit, as well as such other instruments and agreements as Lender may customarily require for issuance of a letter of credit of similar type and amount.  Lender shall have no obligation to issue any Letter of Credit unless (i) it receives a LC Request and LC Application at least three Business Days prior to the requested date of issuance; and (ii) each LC Condition is satisfied.
(b)Letters of Credit may be requested by a Borrower to support obligations incurred in the Ordinary Course of Business or as otherwise approved by Lender.  Increase, renewal or extension of a Letter of Credit shall be treated as issuance of a new Letter of Credit, but Lender may require a new LC Application in its discretion.
(c)Borrowers assume all risks of beneficiaries’ acts, omissions or misuses of Letters of Credit.  Lender shall not be responsible for the existence, character, quality, quantity, condition, packing, value or delivery of any goods purported to be represented by any Documents; differences or variation in the character, quality, quantity, condition, packing, value or delivery of any goods from that expressed in any Documents; the form, validity, sufficiency, accuracy, genuineness or legal effect of any Documents or any endorsements thereon; the time, place, manner or order in which shipment of goods is made; partial, incomplete or failed shipment of any goods referred to in a Letter of Credit or Documents; deviation from instructions, delay, default or fraud by any shipper or other Person in connection with any goods, shipment or delivery; breach of contract between a shipper or vendor and a Borrower; errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex, telecopy, e-mail, telephone or otherwise; errors in translation or interpretation of technical terms; misapplication by a beneficiary of a Letter of Credit or proceeds thereof; or consequences arising from causes beyond the control of Lender, including any act or omission of a Governmental Authority.  No Indemnitee shall be liable to any Obligor or other Person for any action taken or omitted to be taken in connection with any Letter of Credit or LC Documents except as a result of the Indemnitee’s gross negligence or willful misconduct.  Borrowers shall take all action (including enforcement of available rights against a beneficiary) to avoid and mitigate damages relating to Letters of Credit or claimed against Lender.  
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Lender shall be fully subrogated to all rights and remedies of a beneficiary whose claims are discharged through a Letter of Credit.
(d)In connection with its administration of and enforcement of rights or remedies under any Letters of Credit or LC Documents, Lender shall be entitled to act, and shall be fully protected in acting, upon any certification, documentation or other Communication in whatever form believed by Lender, in good faith, to be genuine and correct and to have been signed, sent or made by a proper Person.  Lender may use legal counsel, accountants and other experts to advise it concerning its obligations, rights and remedies, and shall be entitled to act (and shall be fully protected in any action taken in good faith reliance) upon any advice given by such experts.  Lender may employ agents and attorneys-in-fact in connection with any matter relating to Letters of Credit or LC Documents, and shall not be liable for the negligence or misconduct of agents and attorneys-in-fact selected with reasonable care.
1.1.2.  Reimbursement.  If Lender honors any request for payment under a Letter of Credit, Borrowers shall pay to Lender, on the same day (“Reimbursement Date”), the amount paid under such Letter of Credit, together with interest at the interest rate for Base Rate Loans from the Reimbursement Date until payment by Borrowers.  The obligation of Borrowers to reimburse Lender for any payment made under a Letter of Credit shall be absolute, unconditional, irrevocable, and joint and several, and shall be paid without regard to any lack of validity or enforceability of any Letter of Credit or the existence of any claim, setoff, defense or other right that Borrowers may have at any time against the beneficiary.  Whether or not Borrower Agent submits a Notice of Borrowing, Borrowers shall be deemed to have requested a Borrowing of Base Rate Loans in an amount necessary to pay all amounts due on any Reimbursement Date.
1.1.3.  Cash Collateral.  At Lender’s request, Borrowers shall Cash Collateralize outstanding Letters of Credit if an Event of Default has occurred or is continuing, the Termination Date is scheduled to occur within 5 Business Days or the Termination Date occurs.
Section 3.INTEREST, FEES AND CHARGES
1.1.Interest
1.1.1.  Rates and Payment of Interest.
(a)The Obligations shall bear interest (i) if a Base Rate Loan, at the Base Rate in effect from time to time, plus the Applicable Margin; (ii) if a BSBY Loan, at the BSBY Rate for the applicable Interest Period, plus the Applicable Margin; and (iii) if any other Obligation (including, to the extent permitted by law, interest not paid when due), at the Base Rate in effect from time to time, plus the Applicable Margin for Base Rate Loans.
(b)During an Insolvency Proceeding with respect to any Obligor, or during the continuance of any other Event of Default if Lender in its discretion so elects, Obligations shall bear interest at the Default Rate (whether before or after any judgment), payable on demand.
(c)Interest shall accrue from the date a Loan is advanced or Obligation is incurred or payable, as applicable, until paid in full by Borrowers, and shall in no event be less than zero at any time.  Interest accrued on the Loans is due and payable in arrears (i) on each Interest Payment Date; (ii) concurrently with prepayment of any BSBY Loan, with respect to the principal amount being prepaid; and (iii) on the Termination Date.  Interest accrued on any other Obligations shall be due and payable as provided in the applicable agreements or, if no payment date is specified, on demand.
1.1.2.  Application of BSBY to Outstanding Loans.  Borrowers may elect to convert any portion of Base Rate Loans to, or to continue any BSBY Loan at the end of its Interest Period as, a BSBY Loan.  Borrower Agent shall give Lender a Notice of Conversion/Continuation no later than 1:00 p.m at least two Business Days before the requested conversion or continuation date.  
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Each Notice of Conversion/Continuation shall be irrevocable, and shall specify the amount of Loans to be converted or continued, the conversion or continuation date (which shall be a Business Day), and the duration of the Interest Period (which shall be deemed to be one month if not specified).  If, at expiration of an Interest Period for a BSBY Loan, Borrowers have failed to deliver a Notice of Conversion/Continuation, the Loan shall convert to a Base Rate Loan.  Lender does not warrant or accept responsibility for, nor shall it have any liability with respect to, administration, submission or any other matter related to any rate used in determining BSBY Rate or with respect to any rate (including, for the avoidance of doubt, the selection of such rate and any related spread or other adjustment) that is an alternate or replacement for or successor to any such rate (including any Successor Rate), or the effect of any of the foregoing or of any Conforming Changes.  At any time an Event of Default has occurred and is continuing, Lender may elect not to make, convert or continue a Loan as a BSBY Loan.
1.1.3.  Interest Periods.  Borrowers shall select an interest period (“Interest Period”) of one, three or six months (in each case, subject to availability) to apply to each BSBY Loan; provided, that (a) the Interest Period shall begin on the date the Loan is made or continued as, or converted into, a BSBY Loan, and shall expire on the numerically corresponding day in the calendar month at its end; (b) if any Interest Period begins on a day for which there is no corresponding day in the calendar month at its end or if such corresponding day falls after the last Business Day of the end month, then the Interest Period shall expire on such month’s last Business Day; and if any Interest Period would otherwise expire on a day that is not a Business Day, the period shall expire on the next Business Day; and (c) no Interest Period shall extend beyond the Termination Date.
1.2.Fees
1.1.1.  Unused Line Fee.  Borrowers shall pay to Lender a fee equal to the Unused Line Fee Rate times the amount by which the Commitment exceeds the average daily Revolver Usage during any month.  Such fee shall be payable in arrears, on the first day of each month and on the Termination Date.
1.1.2. LC Facility Fees.  Borrowers shall pay to Lender (a) a fee equal to the Applicable Margin in effect for BSBY Loans times the average daily Stated Amount of Letters of Credit, payable in arrears on the first day of each month; (b) a fronting fee equal to 0.125% per annum on the Stated Amount of each Letter of Credit, payable in arrears on the first day of each month; and (c) all customary charges associated with the issuance, amending, negotiating, payment, processing, transfer and administration of Letters of Credit, which charges shall be paid as and when incurred.  At any time an Event of Default has occurred and is continuing, the fee payable under clause (a) shall be increased by 2% per annum.
1.3.Computation of Interest, Fees, Yield Protection.  All interest, as well as fees and other charges calculated on a per annum basis, shall be computed for the actual days elapsed, based on a year of 360 days.  Each determination by Lender of any interest, fee, interest rate or amounts payable hereunder shall be final, conclusive and binding for all purposes, absent manifest error.  All fees shall be fully earned when due and shall not be subject to rebate, refund or proration.  All fees payable under Section 3.2 are compensation for services and are not, and shall not be deemed to be, interest or any other charge for the use, forbearance or detention of money.  A certificate as to amounts payable by Borrowers under Section 3.4, 3.6, 3.7, 3.9 or 5.7 that is submitted to Borrower Agent by Lender shall be final, conclusive and binding for all purposes, absent manifest error, and Borrowers shall pay such amounts to the appropriate party within 10 days following receipt of the certificate.
1.4.Reimbursement Obligations.  Borrowers shall pay all Claims promptly upon request.  Borrowers shall also reimburse Lender for all legal, accounting, appraisal, consulting, and other fees and expenses incurred by it in connection with (a) negotiation and preparation of Loan Documents, including any modification thereof; (b) administration of and actions relating to any Collateral, Loan Documents and transactions contemplated thereby, including any actions taken to perfect or maintain priority of Lender’s Liens on any Collateral, to maintain any insurance required hereunder or to verify Collateral; and (c) subject to Section 10.1.1(b), any examination or appraisal 
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with respect to any Obligor or Collateral by Lender’s personnel or a third party.  All legal, accounting and consulting fees shall be charged to Borrowers by Lender’s professionals at their full hourly rates, regardless of any alternative fee arrangements that Lender or any of its Affiliates may have with such professionals that otherwise might apply to this or any other transaction.  Borrowers acknowledge that counsel may provide Lender with a benefit (such as a discount, credit or accommodation for other matters) based on counsel’s overall relationship with Lender, including fees paid hereunder.  If, for any reason (including inaccurate information in Borrower Materials), it is determined that a higher Applicable Margin should have applied to a period than was actually applied, then the proper margin shall be applied retroactively and Borrowers shall immediately pay to Lender an amount equal to the difference between the amount of interest and fees that would have accrued using the proper margin and the amount actually paid.  All amounts payable by Borrowers under this Section shall be due on demand.
1.5.Illegality.  If Lender determines that any Applicable Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for Lender or its applicable Lending Office to perform any of its obligations hereunder, to make, maintain, issue, fund, commit to or charge applicable interest or fees with respect to any Loan or Letter of Credit, or to determine or charge interest based on BSBY Rate, then, on notice thereof by Lender to Borrower Agent, (a) any obligation of Lender to perform such obligations, to make, maintain, issue, fund or commit to the Loan or Letter of Credit (or to charge interest or fees otherwise applicable thereto), or to continue or convert Loans as BSBY Loans, shall be suspended, and (b) if Lender cannot lawfully make or maintain Base Rate Loans whose interest rate is determined by reference to BSBY Rate, the interest rate applicable to Lender’s Base Rate Loans shall, as necessary to avoid illegality, be determined without reference to the BSBY Rate component of Base Rate, in each case until Lender notifies Borrower Agent that the circumstances giving rise to such determination no longer exist.  Upon delivery of such notice, Borrowers shall prepay or convert BSBY Loans to Base Rate Loans, either on the last day of the Interest Period therefor, if Lender may lawfully continue to maintain the Loan and charge applicable interest to such day, or immediately, if Lender cannot so maintain the Loan.  Upon any such prepayment or conversion of a Loan pursuant to this Section, Borrowers shall also pay accrued interest on the amount so prepaid or converted.
1.6.Inability to Determine Rates
1.1.1.  Inability to Determine Rate.  If in connection with any request for a BSBY Loan or a conversion to or continuation thereof, as applicable, (a) Lender determines (which determination shall be conclusive absent manifest error) that (i) no Successor Rate has been determined in accordance with Section 3.6.2, and the circumstances under Section 3.6.2(a) or the Scheduled Unavailability Date has occurred (as applicable), or (ii) adequate and reasonable means do not otherwise exist for determining BSBY Rate for any requested Interest Period with respect to a proposed BSBY Loan or in connection with an existing or proposed Base Rate Loan, or (b) Lender determines that for any reason that BSBY Rate for any requested Interest Period with respect to a proposed BSBY Loan does not adequately and fairly reflect the cost to such Lender of funding such Loan, Lender will promptly so notify Borrower Agent.  Thereafter, (x) the obligation of Lender to make, maintain, or convert Base Rate Loans to, BSBY Loans shall be suspended (to the extent of the affected BSBY Loans or Interest Periods), and (y) in the event of a determination described in the preceding sentence with respect to the BSBY Rate component of Base Rate, the utilization of such component in determining Base Rate shall be suspended, in each case until Lender revokes such notice.  Upon receipt of such notice, (i) Borrowers may revoke any pending request for a Borrowing, conversion or continuation of BSBY Loans (to the extent of the affected BSBY Loans or Interest Periods) or, failing that, will be deemed to have converted such request into a request for Base Rate Loans, and (ii) any outstanding BSBY Loans shall convert to Base Rate Loans at the end of their respective Interest Periods.
1.1.2.  Replacement of BSBY.  Notwithstanding anything to the contrary in this Agreement or any other Loan Document, if Lender determines that:
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(a)adequate and reasonable means do not exist for ascertaining one month, three month and six month interest periods of BSBY Rate, including because the BSBY Screen Rate is not available or published on a current basis, and such circumstances are unlikely to be temporary; or
(b)Bloomberg or any successor administrator of the BSBY Screen Rate or a Governmental Authority having jurisdiction over Lender, Bloomberg or such administrator has made a public statement identifying a specific date after which one month, three month and six month interest periods of BSBY Rate or the BSBY Screen Rate shall or will no longer be representative or made available, or used for determining the interest rate of loans, or shall or will otherwise cease, or that such interest periods or BSBY Screen Rate have failed to comply with the International Organization of Securities Commissions (IOSCO) Principles for financial Benchmarks, provided that, at the time of such statement, there is no successor administrator satisfactory to Lender that will continue to provide such representative interest periods of BSBY Rate after such specific date (the latest date on which one month, three month and six month interest periods of BSBY Rate or the BSBY Screen Rate are no longer representative or available permanently or indefinitely, “Scheduled Unavailability Date”);
then, on a date and time determined by Lender (any such date, “BSBY Replacement Date”), which date shall be at the end of an Interest Period or on the relevant interest payment date, as applicable for interest calculated and, solely with respect to clause (b) above, no later than the Scheduled Unavailability Date, BSBY Rate will be replaced hereunder and under any other applicable Loan Document with, subject to the proviso below, the first available alternative set forth in the order below for any interest period for interest calculated that can be determined by Lender, in each case, without any amendment to, or further action or consent of any other party to any Loan Document (“Successor Rate”):

(i)Term SOFR plus the SOFR Adjustment; and
(ii)Daily Simple SOFR plus the SOFR Adjustment;
provided, that if initially BSBY is replaced with Daily Simple SOFR plus the SOFR Adjustment and, subsequent to such replacement, Lender determines that Term SOFR has become available and is administratively feasible for Lender in its discretion, and Lender notifies Borrower Agent of such availability, then from and after the beginning of the Interest Period, relevant interest payment date or payment period for interest calculated, in each case, commencing no less than 30 days after the date of such notice, the Successor Rate shall be Term SOFR plus the SOFR Adjustment.  If the Successor Rate is Daily Simple SOFR plus the SOFR Adjustment, all interest will be payable on a monthly basis.
Notwithstanding anything to the contrary herein, (i) if Lender determines that neither of the alternatives in clauses (i) and (ii) is available on or prior to the BSBY Replacement Date or (ii) if the events or circumstances of the type described in clauses (a) or (b) above have occurred with respect to the Successor Rate then in effect, then in each case, Lender and Borrowers may amend this Agreement solely for the purpose of replacing BSBY Rate or any then current Successor Rate in accordance with this Section at the end of any Interest Period, relevant interest payment date or payment period for interest calculated, as applicable, with another alternate benchmark rate giving due consideration to any evolving or then existing convention for similar U.S. dollar denominated syndicated credit facilities for such alternative benchmarks and, in each case, including any mathematical or other adjustments to such benchmark giving due consideration to any evolving or then existing convention for similar U.S. dollar denominated syndicated credit facilities for such benchmarks, which adjustment or method for calculating such adjustment shall be published on an information service selected by Lender from time to time in its discretion and may be periodically updated. For the avoidance of doubt, any such proposed rate and adjustments shall constitute a Successor Rate.

Lender will promptly (in one or more notices) notify Borrowers of implementation of any Successor Rate.  A Successor Rate shall be applied in a manner consistent with market practice; provided, that to the extent market practice is not administratively feasible for Lender, the Successor 
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Rate shall be applied in a manner as determined by Lender in its discretion.  Notwithstanding anything else herein, if at any time any Successor Rate as so determined would otherwise be less than zero (0), the Successor Rate will be deemed to be zero (0) for all purposes of the Loan Documents.

In connection with implementation of a Successor Rate, Lender may make Conforming Changes from time to time and, notwithstanding anything to the contrary in any Loan Document, any amendments implementing such Conforming Changes will become effective without any further action or consent of any other party to this Agreement; provided, that with respect to any such amendment effected, Lender shall post each amendment implementing Conforming Changes to Borrowers promptly after such amendment becomes effective.

1.7.Increased Costs; Capital Adequacy
1.1.1.  Increased Costs Generally.  If any Change in Law shall:
(a)impose modify or deem applicable any reserve, liquidity, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, Lender (except any reserve requirement reflected in calculating BSBY Rate);
(b)subject any Recipient to Taxes (other than (i) Indemnified Taxes, (ii) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes, and (iii) Connection Income Taxes) with respect to any Loan, Letter of Credit, Commitment or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or
(c)impose on Lender or any interbank market any other condition, cost or expense (other than Taxes) affecting any Loan, Letter of Credit, Commitment or Loan Document;
and the result thereof shall be to increase the cost to Lender of making or maintaining any Loan or the Commitment, or converting to or continuing any interest option for a Loan, or to increase the cost to Lender of issuing or maintaining any Letter of Credit (or of maintaining its obligation to issue a Letter of Credit), or to reduce the amount of any sum received or receivable by Lender hereunder (whether of principal, interest or any other amount) then, upon request by Lender, Borrowers will pay to Lender such additional amount(s) as will compensate it for the additional costs incurred or reduction suffered.
1.1.2.  Capital Requirements.  If Lender determines that a Change in Law affecting it or its holding company regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on Lender’s or such holding company’s capital as a consequence of this Agreement, Commitment, Loans or Letters of Credit to a level below that which Lender or such holding company could have achieved but for such Change in Law (taking into consideration its policies with respect to capital adequacy), then from time to time Borrowers will pay to Lender such additional amounts as will compensate it or its holding company for the reduction suffered.
1.1.3.  Compensation.  Failure or delay on the part of Lender to demand compensation pursuant to this Section shall not constitute a waiver of its right to demand such compensation, but Borrowers shall not be required to compensate Lender for any increased costs or reductions suffered more than nine months (plus any period of retroactivity of the Change in Law giving rise to the demand) prior to the date that Lender notifies Borrower Agent of the applicable Change in Law and of Lender’s intention to claim compensation therefor.
1.8.Mitigation.  If Lender gives a notice under Section 3.5 or requests compensation under Section 3.7, or if Borrowers are required to pay any Indemnified Taxes or additional amounts under Section 5.7, then at the request of Borrower Agent, Lender shall use reasonable efforts to designate or assign its obligations hereunder to a different Lending Office, if, in the judgment of Lender, such designation or assignment would eliminate the need for such notice or reduce amounts payable or to be withheld in the future, and would not subject Lender to any unreimbursed cost or expense, and would not otherwise be disadvantageous to it or unlawful.  Borrowers shall pay all 
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reasonable costs and expenses incurred by Lender in connection with any such designation or assignment.
1.9.Funding Losses.  If for any reason (a) any Borrowing, conversion or continuation of a BSBY Loan does not occur on the date specified therefor in a Notice of Borrowing or Notice of Conversion/Continuation (whether or not withdrawn), (b) any repayment or conversion of a BSBY Loan occurs on a day other than the end of its Interest Period, or (c) Borrowers fail to repay a BSBY Loan when required, then Borrowers shall pay to Lender all losses, expenses and fees arising from redeployment of funds or termination of match funding.
1.10.Maximum Interest.  Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by Applicable Law (“maximum rate”).  If Lender shall receive interest in an amount that exceeds the maximum rate, the excess interest shall be applied to the principal of the Obligations or, if it exceeds such unpaid principal, refunded to Borrowers.  In determining whether the interest contracted for, charged or received by Lender exceeds the maximum rate, Lender may, to the extent permitted by Applicable Law, (a) characterize any payment that is not principal as an expense, fee or premium rather than interest; (b) exclude voluntary prepayments and the effects thereof; and (c) amortize, prorate, allocate and spread (in equal or unequal parts) the total amount of interest throughout the contemplated term of the Obligations hereunder.
Section 4.LOAN ADMINISTRATION
1.1.Manner of Borrowing and Funding Loans
1.1.1.  Notice of Borrowing.
(a)To request a Loan, Borrower Agent shall give Lender a Notice of Borrowing by 1:00 p.m. (i) on the requested funding date for a Base Rate Loan, and (ii) at least two Business Days prior to the requested funding date for a BSBY Loan.  Notices received by Lender after such time shall be deemed received on the next Business Day.  Each Notice of Borrowing shall be irrevocable and shall specify (A) the Borrowing amount, (B) the requested funding date (which must be a Business Day), (C) whether the Borrowing is to be made as a Base Rate Loan or BSBY Loan, and (D) in the case of a BSBY Loan, the applicable Interest Period (which shall be deemed to be one month if not specified).
(b)Unless payment is otherwise made by Borrowers, the becoming due of any Obligation (whether principal, interest, fees or other charges, including Extraordinary Expenses, LC Obligations, Cash Collateral and Bank Product Debt) shall be deemed to be a request for a Base Rate Loan on the due date in the amount due and the Loan proceeds shall be disbursed as direct payment of such Obligation.  In addition, Lender may, at its option, charge such amount against any operating, investment or other account of a Borrower maintained with Lender or any of its Affiliates.
(c)If a Borrower maintains a disbursement account with Lender or any of its Affiliates, then presentation for payment in the account of a Payment Item when there are insufficient funds to cover it shall be deemed to be a request for a Base Rate Loan on the presentation date, in the amount of the Payment Item.  Proceeds of the Loan may be disbursed directly to the account.
1.1.2.  Notices.  If Borrowers request, convert or continue Loans, select interest rates, or transfer funds based on telephonic or electronic instructions to Lender, Borrowers shall confirm the request by prompt delivery to Lender of a Notice of Borrowing or Notice of Conversion/Continuation, as applicable.  Lender is not liable for any loss suffered by a Borrower as a result of Lender acting on its understanding of telephonic or electronic instructions from a person believed in good faith to be authorized to give instructions on a Borrower’s behalf.
1.2.Number and Amount of BSBY Loans; Determination of Rate.  Each Borrowing of BSBY Loans when made shall be in a minimum amount of $1,000,000, plus an increment of 
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$100,000 in excess thereof.  No more than 5 Borrowings of BSBY Loans may be outstanding at any time, and all BSBY Loans having the same length and beginning date of their Interest Periods shall be aggregated together and considered one Borrowing for this purpose. Upon determining BSBY Rate for any Interest Period requested by Borrowers, Lender shall promptly notify Borrowers thereof by telephone or electronically and, if requested by Borrowers, shall confirm any telephonic notice in writing.
1.3.Borrower Agent.  Each Borrower hereby designates Arlo (“Borrower Agent”) as its representative and agent for all purposes under the Loan Documents, including requests for and receipt of Loans and Letters of Credit, designation of interest rates, delivery or receipt of Communications, delivery of Borrowing Base and financial information and reports, payment of Obligations, requests for waivers, amendments or other accommodations, actions under the Loan Documents (including in respect of compliance with covenants), and all other dealings with Lender.  Borrower Agent hereby accepts such appointment.  Lender shall be entitled to rely upon any Communication (including any notice of borrowing) delivered by or to Borrower Agent on behalf of any Borrower and shall have the right, in its discretion, to deal exclusively with Borrower Agent for all purposes under the Loan Documents.  Each Borrower agrees that any Communication, delivery, action, omission or undertaking by Borrower Agent hereunder shall be binding upon and enforceable against such Borrower.
1.4.One Obligation.  The Loans, LC Obligations and other Obligations shall constitute one general obligation of Borrowers and are secured by Lender’s Lien on all Collateral; provided, that Lender shall be deemed to be a creditor of, and the holder of a separate claim against, each Borrower to the extent of any Obligations jointly or severally owed by such Borrower.
1.5.Effect of Termination.  On the effective date of the termination of the Commitment, the Obligations shall be immediately due and payable, and each Secured Party may terminate its Bank Products.  Until Full Payment of the Obligations, all undertakings of Borrowers contained in the Loan Documents shall continue, and Lender shall retain its Liens in the Collateral and all rights and remedies under the Loan Documents.  Lender shall not be required to terminate its Liens unless it receives Cash Collateral or a written agreement, in each case satisfactory to it, protecting it from dishonor or return of any Payment Item previously applied to the Obligations.  Sections 2.2, 3.4, 3.6, 3.7, 3.9, 5.4, 5.7, 12.2, this Section, and each indemnity or waiver given by an Obligor in any Loan Document, shall survive any assignment by Lender of rights or obligations hereunder, termination of the Commitment, and any repayment, satisfaction, discharge or Full Payment of any Obligations.
Section 5.PAYMENTS
1.1.General Payment Provisions.  All payments of Obligations shall be made in Dollars, without offset, counterclaim or defense of any kind, free and clear of (and without deduction for) any Taxes, and in immediately available funds, not later than 12:00 noon on the due date.  Any payment after such time shall be deemed made on the next Business Day.  Any payment of a BSBY Loan prior to the end of its Interest Period shall be accompanied by all amounts due under Sections 3.1.1(c) and 3.9.  Lender shall have the continuing, exclusive right to apply and reapply payments and proceeds of Collateral against Obligations, at Lender’s discretion, but whenever possible (provided no Event of Default has occurred and is continuing) any prepayment shall be applied to Base Rate Loans before BSBY Loans.
1.2.Repayment of Loans.  Loans may be prepaid from time to time, without penalty or premium, pursuant to a Notice of Prepayment to Lender, delivered concurrently with prepayment of a Swingline Loan and at least three Business Days prior to prepayment of other Loans; provided, that no such notice shall be required for payments applied pursuant to Section 5.5.  Loans shall be due and payable in full on the Termination Date, unless payment is sooner required hereunder, and any Overadvance shall be due and payable as provided in Section 2.1.4.
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1.3.Payment of Other Obligations.  Obligations other than Loans, including LC Obligations and Claims, shall be paid by Borrowers as provided in the Loan Documents or, if no payment date is specified, on demand.
1.4.Marshaling; Payments Set Aside.  Lender shall have no obligation to marshal any assets in favor of any Obligor or against any Obligations.  If any payment by or on behalf of Borrowers is made to Lender or if Lender exercises a right of setoff, and any of such payment or setoff is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by Lender in its discretion) to be repaid to a trustee, receiver or any other Person, then the Obligation originally intended to be satisfied, and all Liens, rights and remedies relating thereto, shall be revived and continued in full force and effect as if such payment or setoff had not occurred.
1.5.Dominion Account.  The ledger balance in the main Dominion Account as of the end of a Business Day shall be applied to the Obligations at the beginning of the next Business Day, during any Cash Dominion Trigger Period.  Any resulting credit balance shall not accrue interest in favor of Borrowers and shall be made available to Borrowers as long as no Event of Default has occurred and is continuing.  In no event shall monies and collateral proceeds obtained from an Obligor be applied to pay its Excluded Swap Obligations.
1.6.Account Stated.  Lender shall maintain, in accordance with its customary practices, loan account(s) evidencing the Debt of Borrowers hereunder.  Any failure of Lender to record anything in a loan account, or any error in doing so, shall not limit or otherwise affect the obligation of Borrowers to pay any amount owing hereunder.  Entries in a loan account shall be presumptive evidence of the information contained therein.  If information in a loan account is provided to or inspected by or on behalf of a Borrower, the information shall be conclusive and binding on Borrowers for all purposes absent manifest error, except to the extent Borrower Agent notifies Lender in writing within 30 days of specific information subject to dispute.
1.7.Taxes.
1.1.1.  Payments Free of Taxes; Obligation to Withhold; Tax Payment.
(a)For purposes of this Section, the term “Applicable Law” includes FATCA. 
(b)All payments by or on account of any Obligations by Obligors under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by Applicable Law.  If Applicable Law (as determined in the good faith discretion of the Withholding Agent) requires the deduction or withholding of any Tax from any such payment by a Withholding Agent, then the applicable Withholding Agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority and, if such Tax is an Indemnified Tax, then the sum payable by the applicable Obligor shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.
(c)Without limiting the foregoing, Borrowers shall timely pay to the relevant Governmental Authority in accordance with Applicable Law or at Lender’s option, timely reimburse Lender for payment of, any Other Taxes.
1.1.2.  Indemnification by the Borrowers.  Borrowers shall indemnify and hold harmless, on a joint and several basis, each Recipient against any Indemnified Taxes (including those imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  Borrowers 
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shall make payment within 10 days after demand for any amount or liability payable under this Section.  A certificate delivered to Borrower Agent by Lender (for itself or on behalf of a Recipient) as to the amount of such payment or liability, shall be conclusive absent manifest error.
1.1.3.  Evidence of Payments.  As soon as practicable after payment by an Obligor of any Taxes to a Governmental Authority pursuant to this Section, Borrower Agent shall deliver to Lender the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of any return required by Applicable Law to report the payment or other evidence of such payment reasonably satisfactory to Lender.
1.1.4.  Treatment of Certain Refunds.  If Lender determines in its sole discretion exercised in good faith, that it or another Recipient has received a refund of Taxes that were indemnified by Borrowers or with respect to which a Borrower paid additional amounts pursuant to this Section, the Recipient shall pay the amount of such refund to Borrowers (but only to the extent of indemnity payments or additional amounts actually paid by Borrowers with respect to the Taxes giving rise to the refund), net of all out-of-pocket expenses (including Taxes) incurred by the Recipient and without interest (other than interest paid by the relevant Governmental Authority with respect to such refund).  Borrowers shall, upon request by Lender, repay to the Recipient such amount paid over to Borrowers (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) if the Recipient is required to repay such refund to the Governmental Authority.  Notwithstanding anything herein to the contrary, no Recipient shall be required to pay any amount to Borrowers if such payment would place it in a less favorable net after-Tax position than it would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid.  In no event shall any Recipient be required to make its tax returns (or any other information relating to its taxes that it deems confidential) available to any Obligor or other Person.
1.1.5.  Status of Lender.  If Lender is entitled to an exemption from or reduction of withholding Tax with respect to payments of Obligations, it shall deliver to Borrowers properly completed and executed documentation reasonably requested by Borrowers as will permit such payments to be made without or at a reduced rate of withholding.  In addition, Lender, if reasonably requested by Borrowers, shall deliver such other documentation prescribed by Applicable Law or reasonably requested by the Borrowers as will enable Borrowers to determine whether or not such Lender is subject to backup withholding or information reporting requirements.  Notwithstanding the foregoing, such documentation shall not be required if in the Lender’s reasonable judgment such delivery of the documentation would subject it to any material unreimbursed cost or expense or would materially prejudice its legal or commercial position.
1.1.6.  Documentation.  Without limiting the foregoing, Lender shall deliver to Borrowers, from time to time upon reasonable request, executed copies of IRS Form W-9, certifying that Lender is exempt from U.S. federal backup withholding Tax.  If payment of any Obligation to  Lender would be subject to U.S. federal withholding Tax imposed by FATCA if Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), Lender shall deliver to Borrower Agent at the time or times prescribed by law and otherwise upon reasonable request such documentation prescribed by Applicable Law (including Section 1471(b)(3)(C)(i) of the Code) and such additional documentation may be appropriate for Borrowers to comply with their obligations under FATCA and to determine that Lender has complied with its obligations under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for purposes of this Section 5.7.6, “FATCA” shall include any amendments made to FATCA after the date of this Agreement.  Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify Borrower in writing of its legal inability to do so.
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1.1.7. Survival. Each party’s obligations under this Section 5.7 shall survive any assignment of rights by Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document.
1.8.Nature and Extent of Each Borrower’s Liability
1.1.1.  Joint and Several Liability.  Each Borrower agrees that it is jointly and severally liable for, and absolutely and unconditionally guarantees to Lender and any other Secured Party the prompt payment and performance of, all Obligations, except its Excluded Swap Obligations.  Each Borrower agrees that its guaranty obligations hereunder constitute a continuing guaranty of payment and performance and not of collection, that such obligations shall not be discharged until Full Payment of the Obligations, and that such obligations are absolute and unconditional, irrespective of (a) the genuineness, validity, regularity, enforceability, subordination or any future modification of, or change in, any Obligations or Loan Document, or any other document, instrument or agreement to which any Obligor is or may become a party or be bound; (b) the absence of any action to enforce this Agreement (including this Section) or any other Loan Document, or any waiver, consent or indulgence of any kind by any Secured Party with respect thereto; (c) the existence, value or condition of, or failure to perfect a Lien or to preserve rights against, any security or guaranty for any Obligations or any action or inaction of any Secured Party in respect thereof (including the release of any security or guaranty); (d) insolvency of any Obligor; (e) election by any Secured Party in an Insolvency Proceeding for the application of Section 1111(b)(2) of the Bankruptcy Code; (f) any borrowing or grant of a Lien by any other Borrower as debtor-in-possession under Section 364 of the Bankruptcy Code or otherwise; (g) disallowance of any claims of a Secured Party against any Obligor for the repayment of any Obligations under Section 502 of the Bankruptcy Code or otherwise; or (h) any other action or circumstances that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, other than Full Payment of the Obligations.
1.1.2.  Waivers.
(a)Each Borrower expressly waives all rights that it may have now or in the future under any statute, at common law, in equity or otherwise, to compel Lender to marshal assets or to proceed against any Obligor, other Person or security for the payment or performance of any Obligations before, or as a condition to, proceeding against such Borrower.  Each Borrower waives all defenses available to a surety, guarantor or accommodation co-obligor other than Full Payment of Obligations and waives, to the maximum extent permitted by law, any right to revoke any guaranty of Obligations as long as it is a Borrower.  It is agreed among each Borrower and Secured Party that the provisions of this Section are of the essence of the transaction contemplated by the Loan Documents and that, but for such provisions, Lender would decline to make Loans and issue Letters of Credit.  Each Borrower acknowledges that its guaranty pursuant to this Section is necessary to the conduct and promotion of its business, and can be expected to benefit such business.
(b)Secured Parties may, in their discretion, pursue such rights and remedies as it deems appropriate, including realization upon Collateral or any Real Estate by judicial foreclosure or nonjudicial sale or enforcement, without affecting any rights and remedies under this Section.  If, in taking any action in connection with the exercise of any rights or remedies, a Secured Party shall forfeit any other rights or remedies, including the right to enter a deficiency judgment against any Borrower or other Person, whether because of any Applicable Laws pertaining to “election of remedies” or otherwise, each Borrower consents to such action and waives any claim based upon it, even if the action may result in loss of any rights of subrogation that any Borrower might otherwise have had.  Any election of remedies that results in denial or impairment of the right of a Secured Party to seek a deficiency judgment against any Borrower shall not impair any other Borrower’s obligation to pay the full amount of the Obligations.  Each Borrower waives all rights and defenses arising out of an election of remedies, such as nonjudicial foreclosure with respect to any security for Obligations, even though that election of remedies destroys such Borrower’s rights of subrogation against any other Person.  Lender may bid Obligations, in whole or part, at any foreclosure, trustee or other sale, including any private sale, and the amount of such bid need not be paid by Lender but may 
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be credited against the Obligations.  The amount of the successful bid at any such sale, whether Lender or any other Person is the successful bidder, shall be conclusively deemed to be the fair market value of the Collateral, and the difference between such bid amount and the remaining balance of the Obligations shall be conclusively deemed to be the amount of the Obligations guaranteed under this Section, notwithstanding that any present or future law or court decision may have the effect of reducing the amount of any deficiency claim to which a Secured Party might otherwise be entitled but for such bidding at any such sale.
1.1.3.  Extent of Liability; Contribution.
(a)Notwithstanding anything herein to the contrary, each Borrower’s liability under this Section shall not exceed the greater of (i) all amounts for which such Borrower is primarily liable, as described in clause (c) below, or (ii) such Borrower’s Allocable Amount.
(b)If any Borrower makes a payment under this Section of any Obligations (other than amounts for which such Borrower is primarily liable) (a “Guarantor Payment”) that, taking into account all other Guarantor Payments previously or concurrently made by any other Borrower, exceeds the amount that such Borrower would otherwise have paid if each Borrower had paid the aggregate Obligations satisfied by such Guarantor Payments in the same proportion that such Borrower’s Allocable Amount bore to the total Allocable Amounts of all Borrowers, then such Borrower shall be entitled to receive contribution and indemnification payments from, and to be reimbursed by, each other Borrower for the amount of such excess, ratably based on their respective Allocable Amounts in effect immediately prior to such Guarantor Payment.  The “Allocable Amount” for any Borrower shall be the maximum amount that could then be recovered from such Borrower under this Section without rendering such payment voidable under Section 548 of the Bankruptcy Code or under any applicable state fraudulent transfer or conveyance act, or similar statute or common law.
(c)This Section shall not limit the liability of any Borrower to pay or guarantee Loans made directly or indirectly to it (including Loans advanced hereunder to any other Person and then re-loaned or otherwise transferred to, or for the benefit of, such Borrower), LC Obligations relating to Letters of Credit issued to support its business, Bank Products incurred to support its business, and all accrued interest, fees, expenses and other related Obligations with respect thereto, for which such Borrower shall be primarily liable for all purposes hereunder.  Lender shall have the right, at any time in its discretion, to condition Loans and Letters of Credit upon a separate calculation of borrowing availability for each Borrower and to restrict the disbursement and use of Loans and Letters of Credit to a Borrower based on that calculation.
(d)Each Obligor that is a Qualified ECP when its guaranty of or grant of Lien as security for a Swap Obligation becomes effective hereby jointly and severally, absolutely, unconditionally and irrevocably undertakes to provide funds or other support to each Specified Obligor with respect to such Swap Obligation as may be needed by such Specified Obligor from time to time to honor all of its obligations under the Loan Documents in respect of such Swap Obligation (but, in each case, only up to the maximum amount of such liability that can be hereby incurred without rendering such Qualified ECP’s obligations and undertakings under this Section voidable under any applicable fraudulent transfer or conveyance act).  The obligations and undertakings of each Qualified ECP under this Section shall remain in full force and effect until Full Payment of all Obligations.  Each Obligor intends this Section to constitute, and this Section shall be deemed to constitute, a guarantee of the obligations of, and a “keepwell, support or other agreement” for the benefit of, each Obligor for all purposes of the Commodity Exchange Act.
1.1.4.  Joint Enterprise.  Each Borrower has requested that Lender make this credit facility available to Borrowers on a combined basis, in order to finance Borrowers’ business most efficiently and economically.  Borrowers’ business is a mutual and collective enterprise, and the successful operation of each Borrower is dependent upon the successful performance of the integrated group.  Borrowers believe that consolidation of their credit facility will enhance the borrowing power of each Borrower and ease administration of the facility, all to their mutual 
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advantage.  Borrowers acknowledge that Lender’s willingness to extend credit and to administer the Collateral on a combined basis hereunder is done solely as an accommodation to Borrowers and at Borrowers’ request.
1.1.5.  Subordination.  Each Borrower hereby subordinates any claims, including any rights at law or in equity to payment, subrogation, reimbursement, exoneration, contribution, indemnification or set off, that it may have at any time against any other Obligor, howsoever arising, to the Full Payment of its Obligations.
Section 6.CONDITIONS PRECEDENT
1.1.Conditions Precedent to Initial Loans.  In addition to the conditions set forth in Section 6.2, Lender shall not be required to fund any requested Loan, issue any Letter of Credit or otherwise extend credit to Borrowers hereunder, until the date (“Closing Date”) that each of the following conditions has been satisfied:
(a)Subject to Section 6.3, each Loan Document shall have been duly executed and delivered to Lender by each of the signatories thereto, and each Obligor shall be in compliance with all terms thereof.
(b)Lender shall have received acknowledgments of all filings or recordations necessary to perfect its Liens in the Collateral, as well as UCC and Lien searches and other evidence satisfactory to Lender that such Liens are the only Liens upon the Collateral, except Permitted Liens.
(c)Lender shall have received certificates, in form and substance satisfactory to it, from a knowledgeable Senior Officer of each Borrower certifying that, after giving effect to the initial Loans and transactions hereunder, (i) such Borrower is Solvent; (ii) no Event of Default has occurred and is continuing; (iii) the representations and warranties set forth in Section 9 are true and correct; and (iv) such Borrower has complied with all agreements and conditions to be satisfied by it under the Loan Documents.
(d)Lender shall have received a certificate of a duly authorized officer of each Obligor, certifying (i) that attached copies of such Obligor’s Organic Documents are true and complete, and in full force and effect, without amendment except as shown; (ii) that an attached copy of resolutions authorizing execution and delivery of the Loan Documents is true and complete, and that such resolutions are in full force and effect, were duly adopted, have not been amended, modified or revoked, and constitute all resolutions adopted with respect to this credit facility; and (iii) to the name, title and signature of each Person authorized to sign the Loan Documents.  Lender may conclusively rely on this certificate until it is otherwise notified by the applicable Obligor in writing.
(e)Lender shall have received a written opinion of Cooley LLP, as well as any local counsel to Borrowers or Lender, in form and substance satisfactory to Lender.
(f)Lender shall have received copies of the charter documents of each Obligor, certified by the Secretary of State or other appropriate official of such Obligor’s jurisdiction of organization.  Lender shall have received good standing certificates for each Obligor, issued by the Secretary of State or other appropriate official of such Obligor’s jurisdiction of organization and each jurisdiction where such Obligor’s conduct of business or ownership of Property necessitates qualification.
(g)Lender shall have received copies of policies or certificates of insurance for the insurance policies carried by Borrowers, all in compliance with the Loan Documents.
(h)Each Borrower shall have provided, in form and substance satisfactory to Lender, all documentation and other information as Lender deems appropriate in connection with applicable “know your customer” and anti-money-laundering rules and regulations, including the Patriot Act and Beneficial Ownership Regulation.  If any Borrower qualifies as a “legal entity 
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customer” under the Beneficial Ownership Regulation, it shall have provided a Beneficial Ownership Certification to Lender in relation to such Borrower.
(i)Lender shall have completed its business, financial and legal due diligence of Obligors, including a roll-forward of its previous field examination, with results satisfactory to Lender.  No material adverse change in the financial condition of any Obligor or in the quality, quantity or value of any Collateral shall have occurred since December 31, 2020.
(j)Borrowers shall have paid all fees and expenses to be paid to Lender on the Closing Date.
(k)Lender shall have received a Borrowing Base Report prepared as of 
October 3, 2021.  Upon giving effect to the initial funding of Loans and issuance of Letters of Credit, and the payment by Borrowers of all fees and expenses incurred in connection herewith as well as any payables stretched beyond their customary payment practices (other than stretched payables owed by  any Borrower to its Affiliates), Availability shall be at least $6,000,000.
Notwithstanding the foregoing, Lender shall not be required to make any credit extension hereunder (including funding any Loan, issuing any Letter of Credit, or granting any other accommodation to or for the benefit of any Borrower) until Lender has confirmed Obligors’ satisfaction of the requirements Section 6.3.1 and Section 10.1.10. 
1.2.Conditions Precedent to All Credit Extensions.  Lender shall not be required to make any credit extension hereunder (including funding any Loan, issuing any Letter of Credit, or granting any other accommodation to or for the benefit of any Borrower), if the following conditions are not satisfied on such date and upon giving effect thereto:
(a)No Default or Event of Default has occurred and is continuing;
(b)The representations and warranties of each Obligor in the Loan Documents are true and correct in all material respects (or, in the case of any representation and warranty qualified by materiality, in all respects) except for representations and warranties that expressly apply only on an earlier date);
(c)All conditions precedent in any Loan Document are satisfied;
(d)No event has occurred or circumstance exists that has or could reasonably be expected to have a Material Adverse Effect; 
(e)With respect to a Letter of Credit issuance, all LC Conditions are satisfied; and 
(f)Borrower Agent has delivered to Lender, a Borrowing Base Report within 10 Business Days prior to the date of requested funding of the Loan or issuance of Letter of Credit, if, at the time of such request for an extension of a Loan or issuance of a Letter of Credit, no Loans or Letters of Credit are outstanding, which Borrowing Base Certificate shall be prepared as of the last day of the most recently ended month. 
Each request (or deemed request) by a Borrower for any credit extension shall constitute a representation by Borrowers that the foregoing conditions are satisfied on the date of such request and on the date of the credit extension.  As an additional condition to a credit extension, Lender may request any other information, certification, document, instrument or agreement as it deems appropriate. 
1.3.Post-Closing Date Conditions.  
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1.1.1. Within no later than 60 days of the Closing Date (or such longer period in Lender’s sole discretion), Borrower shall deliver to Lender duly executed agreements establishing each Dominion Account and related lockbox, in form and substance, and with financial institutions, satisfactory to Lender.
1.1.2. Within no later than 60 days of the Closing Date (or such longer period in Lender’s sole discretion), Borrower shall use commercially reasonable efforts to deliver to Lender duly executed Lien Waivers with respect to the locations located at 2200 Faraday Ave., Suite #150, Carlsbad, California and 408 Brea Canyon Road, City of Industry, CA 91789.
1.1.3.  Within no later than 30 days of the Closing Date (or such longer period in Lender’s sole discretion), Lender shall have received insurance endorsements for the property insurance policy carried by Borrowers, in compliance with the Loan Documents.
Section 7.COLLATERAL
1.1.Grant of Security Interest.  To secure the prompt payment and performance of its Obligations, each Borrower hereby grants to Lender a continuing Lien on the following, whether now owned or hereafter acquired, and wherever located (the “Collateral”):
(a)all Accounts;
(b)all Deposit Accounts and Security Accounts;
(c)all Goods consisting of Inventory;
(d)all monies, whether or not in the possession or under the control of Lender, including any Cash Collateral;
(e)to the extent related to the above, 
(i)all Chattel Paper, including electronic chattel paper;
(ii)all Commercial Tort Claims, including those shown on Schedule 9.1.16;
(iii)all Documents;
(iv)all General Intangibles;
(v)all Instruments;
(vi)all Investment Property;
(vii)all Letter-of-Credit Rights;
(viii)all Supporting Obligations;
(f)all accessions to, substitutions for, and all replacements, products, and cash and non-cash proceeds of the foregoing, including proceeds of and unearned premiums with respect to insurance policies, and claims against any Person for loss, damage or destruction of any Collateral; and
(g)all books and records (including customer lists, files, correspondence, tapes, computer programs, print-outs and computer records) pertaining to the foregoing.
Notwithstanding anything to the contrary herein, the Collateral shall not include any Excluded Assets.
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1.2.Lien on Deposit Accounts; Cash Collateral
1.1.1.  Deposit Accounts.  Lender’s Lien encumbers all amounts credited to any Deposit Account located in the United States of a Borrower, including sums in any blocked, lockbox, sweep or collection account.  Subject to Sections 8.2.4 and 8.2.5, each Borrower hereby authorizes and directs each bank or other depository to deliver to Lender, upon request while an Event of Default has occurred and is continuing, all balances in any Deposit Account maintained for such Borrower, without inquiry into the authority or right of Lender to make such request.  Obligors shall, at no time, maintain balances in Deposit Accounts located outside of the United States in an aggregate amount exceeding $5,000,000. 
1.1.2.  Cash Collateral.  Cash Collateral may be invested, at Lender’s discretion (with the consent of Borrowers, provided no Event of Default exists), but Lender shall have no duty to do so, regardless of any agreement or course of dealing with any Borrower, and shall have no responsibility for any investment or loss.  As security for its Obligations, each Borrower hereby grants to Lender a security interest in and Lien upon all Cash Collateral delivered hereunder from time to time, whether held in a segregated cash collateral account or otherwise.  Lender may apply Cash Collateral to the payment of such Obligations as they become due, in such order as Lender may elect.  All Cash Collateral and related deposit accounts shall be under the sole dominion and control of Lender, and no Borrower or other Person shall have any right to any Cash Collateral until Full Payment of the Obligations.
1.3.Reserved.
1.4.Other Collateral
1.1.1.  Certain After-Acquired Collateral.  Borrowers shall (a) promptly notify Lender if a Borrower obtains an interest in any Deposit Account or Securities Account and to the extent constituting Collateral, any Chattel Paper, Document, Instrument, Investment Property or Letter-of-Credit Right, and (b) upon request, take such actions as Lender, acting reasonably, deems appropriate to effect its perfected, first priority Lien on the Collateral, including using commercially reasonable efforts to obtain any possession, control agreement or Lien Waiver.  If Collateral with a book value in excess of $5,000,000 in the aggregate is in the possession of a third party, at the request of Agent, Borrowers shall use commercially reasonable efforts to obtain an acknowledgment (in form and substance satisfactory to Lender) from such party that it holds the Collateral for the benefit of Lender.
1.5.Limitations.  The Lien on Collateral granted hereunder is given as security only and shall not subject Lender to, or in any way modify, any obligation or liability of Borrowers relating to any Collateral.  In no event shall any Obligor’s grant of a Lien under any Loan Document secure its Excluded Swap Obligations.
1.6.Further Assurances; Extent of Liens.  All Liens granted to Lender under the Loan Documents are for the benefit of Secured Parties.  Promptly upon request, Borrowers shall deliver such instruments and agreements, and shall take such actions, as Lender deems appropriate under Applicable Law to evidence or perfect its Lien on any Collateral, or otherwise to give effect to the intent of this Agreement.  Each Borrower authorizes Lender to file any financing statement that describes the Collateral of such Borrower, and ratifies any action taken by Lender before the Closing Date to effect or perfect its Lien on any Collateral.
Section 8.COLLATERAL ADMINISTRATION
1.1.Borrowing Base Reports.  By no later than the Reporting Date and as set forth in Section 6.2(f), Borrowers shall deliver to Lender a Borrowing Base Report as of the close of business of the previous applicable quarter, month, or week, and, in each case, at such other times as Lender may request. All information (including calculation of Availability) in a Borrowing Base Report shall be certified by Borrowers.  Lender may from time to time adjust such report (i) to reflect Lender’s reasonable estimate of declines in value of Collateral, due to collections received in the Dominion 
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Account or otherwise; (ii) to adjust advance rates to reflect changes in dilution, quality, mix and other factors affecting Collateral; and (iii) to the extent any information or calculation does not comply with this Agreement.
1.2.Accounts
1.1.1.  Records and Schedules of Accounts.  Each Borrower shall keep accurate and complete records of its Accounts, including all payments and collections thereon, and shall submit to Lender sales, collection, reconciliation and other reports in form satisfactory to Lender, on such periodic basis as Lender may request.  Each Borrower shall also provide to Lender, together with delivery of each Borrowing Base Report, a detailed aged trial balance of all Accounts as of the end of the preceding month, specifying each Account’s Account Debtor name and address, amount, invoice date and due date, showing any discount, allowance, credit, authorized return or dispute, and including such proof of delivery, copies of invoices and invoice registers, copies of related documents, repayment histories, status reports and other information as Lender may reasonably request.  If Accounts in an aggregate face amount of $1,000,000 or more cease to be Eligible Accounts, Borrowers shall notify Lender of such occurrence promptly (and in any event within one Business Day) after any Borrower has knowledge thereof.
1.1.2.  Taxes.  If an Account of any Borrower includes a charge for any Taxes, Lender is authorized, in its discretion, to pay the amount thereof to the proper taxing authority for the account of such Borrower and to charge Borrowers therefor; provided, that Lender shall not be liable for any Taxes that may be due from Borrowers or relate to any Collateral.
1.1.3.  Account Verification.  Whether or not an Event of Default has occurred and is continuing, Lender shall have the right at any time, in the name of Lender, any designee of Lender or any Borrower, to verify the validity, amount or any other matter relating to any Accounts of Borrowers by mail, telephone or otherwise.  Borrowers shall cooperate fully with Lender in an effort to facilitate and promptly conclude any such verification process.
1.1.4.  Maintenance of Dominion Account.  Subject to Section 6.3, Borrowers shall maintain Dominion Accounts pursuant to lockbox or other arrangements acceptable to Lender.  Borrowers shall obtain an agreement (in form and substance satisfactory to Lender) from each lockbox servicer and Dominion Account bank, establishing Lender’s control over and Lien in the lockbox or Dominion Account (which may be exercised by Lender only during a Cash Dominion Trigger Period) requiring immediate deposit of all remittances received in the lockbox to a Dominion Account, and waiving offset rights of such servicer or bank, except for customary administrative charges.  If a Dominion Account is not maintained with Lender, Lender shall, during any Cash Dominion Trigger Period, require immediate transfer of all funds in such account to a Dominion Account maintained with Lender.  Lender assumes no responsibility to Borrowers for any lockbox arrangement or Dominion Account, including any claim of accord and satisfaction or release with respect to any Payment Items accepted by any bank.
1.1.5.  Proceeds of Collateral.  Borrowers shall request in writing and otherwise take all necessary steps to ensure that all payments on Accounts or otherwise relating to Collateral are made directly to a Dominion Account (or a lockbox relating to a Dominion Account), excluding payments on account of Borrowers’ paid subscription services, payments made to Borrowers’ merchant accounts and any payments in respect of direct to consumer online store collections; provided, that (a) any payments made to a Borrower with respect to Borrowers’ paid subscription services, (b) any payments made to a merchant account and (c) any payments received by or for the benefit of a Borrower with respect of direct-to-consumer online store collections shall be deposited into a Deposit Account subject to a Deposit Account Control Agreement on a weekly basis; provided, further that if any merchant or other account holding any such payment has a balance greater than $100,000, such account shall be deposited into a Deposit Account subject to a Deposit Account Control Agreement within one (1) Business Day.  If any Borrower or Subsidiary receives cash or Payment Items with respect to any Collateral, it shall hold same in trust for Lender and promptly (not later than the next Business Day) deposit same into a Dominion Account. 
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1.3.Inventory.  Each Borrower shall keep accurate and complete records of its Inventory.  Borrower shall take all steps to assure that all Inventory is produced in accordance with Applicable Law, including the FLSA.
1.4.Equipment. Each Borrower shall keep accurate and complete records of its Equipment. The Equipment is in good operating condition and repair, and all necessary replacements and repairs have been made so that its value and operating efficiency are preserved at all times, reasonable wear and tear excepted.  Each Borrower shall ensure that the Equipment is mechanically and structurally sound, and capable of performing the functions for which it was designed, in accordance with manufacturer specifications. 
1.5.Deposit Accounts.  Schedule 8.5 to the Disclosure Letter lists all Deposit Accounts maintained by Borrowers as of the Closing Date.  Each Borrower shall take all actions necessary to establish Lender’s first priority Lien on each Deposit Account (other than any Excluded Accounts).  Borrowers shall be the sole account holder(s) of each Deposit Account and shall not allow any Person (other than Lender) to have control over their Deposit Accounts or any Property deposited therein.  Borrowers shall promptly notify Lender of any opening or closing of a Deposit Account.
1.6.General Provisions
1.1.1.  Location of Collateral.  All tangible items of Collateral shall at all times be kept by Borrowers at the business locations set forth in Schedule 8.6.1 to the Disclosure Letter, except that Borrowers may (a) make sales or other dispositions of Collateral in accordance with Section 10.2.6; and (b) move Collateral to another location in the United States, upon prior written notice to Lender.
1.1.2.  Insurance of Collateral; Condemnation Proceeds.
(a)Each Borrower shall maintain insurance with respect to the Collateral, covering casualty, hazard, theft, malicious mischief and flood, in amounts, with endorsements and with insurers (with a Best rating of at least A+, unless otherwise approved by Lender in its discretion) satisfactory to Lender.  All flood hazard diligence, documentation and insurance for any Real Estate constituting Collateral shall comply with all Flood Laws and be satisfactory to Lender.  All proceeds under each policy shall be payable to Lender.  From time to time upon request, Borrowers shall deliver to Lender the originals or certified copies of its insurance certificates and updated flood plain searches.  Each policy shall include the following endorsements reasonably satisfactory to Lender (i) showing Lender as lender’s loss payee; (ii) requiring 30 days prior written notice to Lender of cancellation of the policy for any reason whatsoever; and (iii) specifying that the interest of Lender shall not be impaired or invalidated by any act or neglect of any Borrower or the owner of the Property, nor by the occupation of the premises for purposes more hazardous than are permitted by the policy.  If any Borrower fails to provide and pay for any insurance, Lender may, in its discretion, procure the insurance and charge Borrowers therefor.  Each Borrower agrees to deliver to Lender, promptly as rendered, copies of all reports made to insurance companies.  While no Event of Default has occurred and is continuing, Borrowers may settle, adjust or compromise any insurance claim, provided the proceeds are delivered to Lender.  If an Event of Default has occurred and is continuing, only Lender may settle, adjust and compromise such claims.
(b)Any proceeds of insurance (other than workers’ compensation) and awards from condemnation of Collateral shall be paid directly to Lender for application to the Obligations.
(c)If requested by Borrowers in writing within 15 days after Lender’s receipt of any insurance proceeds or condemnation awards relating to any loss or destruction of Equipment or Real Estate, Borrowers may use such proceeds or awards to repair or replace such Equipment or Real Estate (and until so used, the proceeds shall be held by Lender as Cash Collateral) as long as (i) no Event of Default has occurred and is continuing; (ii) such repair or replacement is promptly undertaken and concluded, in accordance with plans satisfactory to Lender; (iii) replacement buildings are constructed on the sites of the original casualties and are of comparable size, quality 
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and utility to the destroyed buildings; (iv) the repaired or replaced Property is free of Liens, other than Permitted Liens that are not Purchase Money Liens; (v) Borrowers comply with disbursement procedures for such repair or replacement as Lender may reasonably require; and (vi) the aggregate amount of such proceeds or awards from any single casualty or condemnation does not exceed $1,000,000.
1.1.3.  Protection of Collateral.  All expenses of protecting, storing, warehousing, insuring, handling, maintaining and shipping any Collateral, all Taxes payable with respect to any Collateral (including any sale thereof), and all other payments required to be made by Lender to any Person to realize upon any Collateral, shall be borne and paid by Borrowers.  Lender shall not be liable or responsible in any way for the safekeeping of any Collateral, for any loss or damage thereto (except for reasonable care in its custody while Collateral is in Lender’s actual possession), for any diminution in the value thereof, or for any act or default of any warehouseman, carrier, forwarding agency or other Person whatsoever, but the same shall be at Borrowers’ sole risk.
1.1.4.  Defense of Title.  Each Borrower shall defend its title to Collateral and Lender’s Liens therein against all Persons, claims and demands, except Permitted Liens.
1.7.Power of Attorney.  Each Borrower hereby irrevocably constitutes and appoints Lender (and all Persons designated by Lender) as such Borrower’s true and lawful attorney (and agent-in-fact) for the purposes provided in this Section.  Lender, or Lender’s designee, may (in its discretion), without notice and in either its or a Borrower’s name, but at the cost and expense of Borrowers:
(a)Endorse a Borrower’s name on any Payment Item or other proceeds of Collateral (including proceeds of insurance) that come into Lender’s possession or control; and
(b)Following the occurrence and during the continuance of any Event of Default, (i) notify any Account Debtors of the assignment of their Accounts, demand and enforce payment of Accounts, by legal proceedings or otherwise, and generally exercise any rights and remedies with respect to Accounts; (ii) settle, adjust, modify, compromise, discharge or release any Accounts or other Collateral, or any legal proceedings brought to collect Accounts or Collateral; (iii) sell or assign any Accounts and other Collateral upon such terms, for such amounts and at such times as Lender deems advisable; (iv) collect, liquidate and receive balances in Deposit Accounts or investment accounts, and take control, in any manner, of proceeds of Collateral; (v) prepare, file and sign a Borrower’s name to a proof of claim or other document in a bankruptcy of an Account Debtor, or to any notice, assignment or satisfaction of Lien or similar document; (vi) receive, open and dispose of mail addressed to a Borrower, and notify postal authorities to deliver any such mail to an address designated by Lender; (vii) endorse any Chattel Paper, Document, Instrument, bill of lading, or other document or agreement relating to any Accounts, Inventory or other Collateral; (viii) use a Borrower’s stationery and sign its name to verifications of Accounts and notices to Account Debtors; (ix) use information contained in any data processing, electronic or information systems relating to Collateral; (x) make and adjust claims under insurance policies; (xi) take any action as may be necessary or appropriate to obtain payment under any letter of credit, banker’s acceptance or other instrument for which a Borrower is a beneficiary; (xii) exercise any voting or other rights relating to Investment Property; and (xiii) take all other actions as Lender deems appropriate to fulfill any Borrower’s obligations under the Loan Documents.
Section 9.REPRESENTATIONS AND WARRANTIES
1.1.General Representations and Warranties.  To induce Lender to enter into this Agreement and to make available the Commitment, Loans and Letters of Credit, each Borrower represents and warrants that:
1.1.1.  Organization and Qualification.  Each Borrower and Subsidiary is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization.  Each Borrower and Subsidiary is duly qualified, authorized to do business and in good standing as a 
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foreign corporation in each jurisdiction where failure to be so qualified could reasonably be expected to have a Material Adverse Effect.  No Obligor is, or is a subsidiary of, a credit institution, investment firm, or parent company of a credit institution or investment firm, in each case that is established in a member state of the European Union, Iceland, Liechtenstein or Norway, and no Obligor is a Covered Entity.  The information included in the most recently provided Beneficial Ownership Certification is true and complete in all respects.
1.1.2.  Power and Authority.  Each Obligor is duly authorized to execute, deliver and perform its Loan Documents.  The execution, delivery and performance of the Loan Documents (including through electronic means) have been duly authorized by all necessary action, and do not (a) require any consent or approval of any holders of Equity Interests of any Obligor, except those already obtained; (b) contravene the Organic Documents of any Obligor; (c) violate any Applicable Law; or (d) result in or require imposition of a Lien (other than a Permitted Lien) on any Obligor’s Property.
1.1.3.  Enforceability.  Each Loan Document is a legal, valid and binding obligation of each Obligor party thereto, enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally.
1.1.4.  Capital Structure.  As of the Closing Date, Schedule 9.1.4 to the Disclosure Letter shows, for each Subsidiary of Borrower Agent, its name, jurisdiction of organization, authorized and issued Equity Interests, holders of its Equity Interests, and agreements binding on such holders with respect to such Equity Interests.  Except as disclosed on Schedule 9.1.4 to the Disclosure Letter, in the five years preceding the Closing Date, no Borrower or Subsidiary has changed its name or state of incorporation or organization, acquired any substantial assets from any other Person nor been the surviving entity in a merger or combination.  Each Borrower has good title to its Equity Interests in its Subsidiaries, subject only to Lender’s Lien, and all such Equity Interests are duly issued, fully paid and non-assessable.  As of the Closing Date, except as disclosed on Schedule 9.1.4 to the Disclosure Letter and except for option and similar interest in favor of officers, directors and employees, there are no outstanding purchase options, warrants, subscription rights, agreements to issue or sell, convertible interests, phantom rights or powers of attorney relating to Equity Interests of any Borrower or Subsidiary.
1.1.5.  Title to Properties; Priority of Liens.  Each Borrower and Subsidiary has good and marketable title to (or valid leasehold interests in) all of its Real Estate, and good title to all of its personal Property, including all Property reflected in any financial statements delivered to Lender, in each case free of Liens except Permitted Liens.  Each Borrower and Subsidiary has paid and discharged all lawful claims that, if unpaid, could become a Lien on its Properties, other than Permitted Liens or as could not reasonably be expected to have a Material Adverse Effect.  All Liens of Lender in the Collateral are duly perfected, first priority Liens, subject only to Permitted Liens that are expressly allowed to have priority over Lender’s Liens.
1.1.6.  Accounts.  Lender may rely, in determining which Accounts are Eligible Accounts, on all statements and representations made by Borrowers with respect thereto.  Borrowers warrant, with respect to each Account at the time it is shown as an Eligible Account in a Borrowing Base Report, that:
(a)it is genuine and in all respects what it purports to be;
(b)it arises out of a completed, bona fide sale and delivery of goods in the Ordinary Course of Business, and substantially in accordance with any purchase order, contract or other document relating thereto;
(c)it is for a sum certain, maturing as stated in the applicable invoice, a copy of which has been furnished or is available upon request to Lender;
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(d)it is not subject to any offset, Lien (other than Lender’s Lien), deduction, defense, dispute, counterclaim or other adverse condition except as arising in the Ordinary Course of Business and disclosed to Lender; and it is absolutely owing by the Account Debtor, without contingency of any kind;
(e)no purchase order, agreement, document or Applicable Law restricts assignment of the Account to Lender (regardless of whether, under the UCC, the restriction is ineffective), and the applicable Borrower is the sole payee or remittance party shown on the invoice;
(f)no extension, compromise, settlement, modification, credit, deduction or return has been authorized or is in process with respect to the Account, except discounts or allowances granted in the Ordinary Course of Business for prompt payment that are reflected on the face of the invoice related thereto and in the reports submitted to Lender hereunder; and
(g)to the best of Borrowers’ knowledge, (i) there are no facts or circumstances that are reasonably likely to impair the enforceability or collectability of such Account; (ii) the Account Debtor had the capacity to contract when the Account arose, continues to meet the applicable Borrower’s customary credit standards, is Solvent, is not contemplating or subject to an Insolvency Proceeding, and has not failed, or suspended or ceased doing business; and (iii) there are no proceedings or actions threatened or pending against any Account Debtor that could reasonably be expected to have a material adverse effect on the Account Debtor’s financial condition.
1.1.7.  Financial Statements.  The consolidated balance sheets, and related statements of income, cash flow and shareholders equity, of Borrowers and Subsidiaries that have been and are hereafter delivered to Lender, are prepared in accordance with GAAP, and fairly present the financial positions and results of operations of Borrowers and Subsidiaries at the dates and for the periods indicated.  All projections delivered from time to time to Lender have been prepared in good faith, based on reasonable assumptions in light of the circumstances at such time.  Since December 31, 2021, there has been no change in the condition, financial or otherwise, of any Borrower or Subsidiary that could reasonably be expected to have a Material Adverse Effect.  No financial statement delivered to Lender at any time contains any untrue statement of a material fact, nor fails to disclose any material fact necessary to make such statement not materially misleading.  Each Borrower and Subsidiary is Solvent.
1.1.8.  Surety Obligations.  No Borrower or Subsidiary is obligated as surety or indemnitor under any bond or other contract that assures payment or performance of any obligation of any Person, except as permitted hereunder.
1.1.9.  Taxes.  Each Borrower and Subsidiary has filed all material federal, state and local tax returns and other reports that it is required by law to file, and has paid, or made provision for the payment of, all Taxes upon it, its income and its Properties that are due and payable, except to the extent being Properly Contested.  The provision for Taxes on the books of each Borrower and Subsidiary is adequate for all years not closed by applicable statutes and for its current Fiscal Year.
1.1.10.  Brokers.  There are no brokerage commissions, finder’s fees or investment banking fees payable in connection with any transactions contemplated by the Loan Documents.
1.1.11.  Intellectual Property. Each Borrower and Subsidiary owns or has the lawful right to use all Intellectual Property necessary for the conduct of its business, without conflict with any rights of others.  There is no pending or, to any Borrower’s knowledge, threatened Intellectual Property Claim with respect to any Borrower, any Subsidiary or any of their Property (including any Intellectual Property).
1.1.12.  Governmental Approvals. Each Borrower and Subsidiary has, is in compliance with, and is in good standing with respect to, all Governmental Approvals necessary to conduct its business and to own, lease and operate its Properties.  All necessary import, export or 
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other licenses, permits or certificates for the import or handling of any goods or other Collateral have been procured and are in effect, and Borrowers and Subsidiaries have complied with all foreign and domestic laws with respect to the shipment and importation of any goods or Collateral, except where noncompliance could not reasonably be expected to have a Material Adverse Effect.
1.1.13.  Compliance with Laws.  Each Borrower and Subsidiary has duly complied, and its Properties and business operations are in compliance, in all material respects with all Applicable Law, except where noncompliance could not reasonably be expected to have a Material Adverse Effect.  There have been no citations, notices or orders of material noncompliance issued to any Borrower or Subsidiary under any Applicable Law.  
1.1.14.  Compliance with Environmental Laws.  Except as disclosed on Schedule 9.1.14 to the Disclosure Letter, no Borrower’s or Subsidiary’s past or present operations, Real Estate or other Properties are subject to any federal, state or local investigation to determine whether any remedial action is needed to address any environmental pollution, hazardous material or environmental clean-up.  No Borrower or Subsidiary has received any Environmental Notice.  No Borrower or Subsidiary has any contingent liability with respect to any Environmental Release, environmental pollution or hazardous material on any Real Estate now or previously owned, leased or operated by it.
1.1.15.  Burdensome Contracts.  No Borrower or Subsidiary is party or subject to any Restrictive Agreement, except as shown on Schedule 9.1.15 to the Disclosure Letter.  No such Restrictive Agreement prohibits the execution, delivery or performance of any Loan Document by an Obligor or would otherwise reasonably be expected to have a Material Adverse Effect.
1.1.16.  Litigation.  Except as shown on Schedule 9.1.16 to the Disclosure Letter or described in any SEC filings, there are no proceedings or investigations pending or, to any Borrower’s knowledge, threatened against any Borrower or Subsidiary, or any of their businesses, operations, Properties, prospects or conditions, that (a) relate to any Loan Documents or transactions contemplated thereby; or (b) could reasonably be expected to have a Material Adverse Effect if determined adversely to any Borrower or Subsidiary.  No Borrower or Subsidiary is in default with respect to any order, injunction or judgment of any Governmental Authority.
1.1.17.  No Defaults.  No event or circumstance has occurred or exists that constitutes a Default or Event of Default.  No Borrower or Subsidiary is in default, and no event or circumstance has occurred or exists that with the passage of time or giving of notice would constitute a default, in the payment of any Borrowed Money.  
1.1.18.  ERISA.  Except as disclosed on Schedule 9.1.18 to the Disclosure Letter:
(a)Each Plan is in compliance in all material respects with the applicable provisions of ERISA, the Code, and other federal and state laws.  Each Plan that is intended to qualify under Section 401(a) of the Code has received a favorable determination letter from the IRS or an application for such a letter is currently being processed by the IRS with respect thereto and, to the knowledge of Borrowers, nothing has occurred which would prevent, or cause the loss of, such qualification.  Each Obligor and ERISA Affiliate has met all applicable requirements under the Code, ERISA and the Pension Protection Act of 2006, and no application for a waiver of the minimum funding standards or an extension of any amortization period has been made with respect to any Plan.
(b)There are no pending or, to the knowledge of Borrowers, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan that could reasonably be expected to have a Material Adverse Effect.  There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan that has resulted in or could reasonably be expected to have a Material Adverse Effect.  No Borrower is or will be using “plan assets” (within the meaning of 29 C.F.R. §2510.3-101, as modified by ERISA Section 3(42) or otherwise) of one or more Benefit Plans with respect to its entrance into, participation in, 
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administration of and performance of the Loans, Letter of Credits, Commitments or Loan Documents.
(c)No ERISA Event has occurred or is reasonably expected to occur.  As of the most recent valuation date for any Pension Plan, the funding target attainment percentage (as defined in Section 430(d)(2) of the Code) is at least 60%, and no Obligor or ERISA Affiliate knows of any reason that such percentage could reasonably be expected to drop below 60%.  No Obligor or ERISA Affiliate has incurred any liability to the PBGC except for the payment of premiums, and no premium payments are due and unpaid.  No Obligor or ERISA Affiliate has engaged in a transaction that could be subject to Section 4069 or 4212(c) of ERISA.  No Pension Plan has been terminated by its plan administrator or the PBGC, and no fact or circumstance exists that could reasonably be expected to cause the PBGC to institute proceedings to terminate a Pension Plan.
(d)With respect to any Foreign Plan, (i) all employer and employee contributions required by law or by the terms of the Foreign Plan have been made, or, if applicable, accrued, in accordance with normal accounting practices; (ii) the fair market value of the assets of each funded Foreign Plan, the liability of each insurer for any Foreign Plan funded through insurance, or the book reserve established for any Foreign Plan, together with any accrued contributions, is sufficient to procure or provide for the accrued benefit obligations with respect to all current and former participants in such Foreign Plan according to the actuarial assumptions and valuations most recently used to account for such obligations in accordance with applicable generally accepted accounting principles; and (iii) it has been registered as required and has been maintained in good standing with applicable regulatory authorities.
1.1.19.  Trade Relations.  There exists no actual or threatened termination, limitation or modification of any business relationship between any Borrower or Subsidiary and any customer or supplier, or any group of customers or suppliers, who individually or in the aggregate are material to the business of such Borrower or Subsidiary.  There exists no condition or circumstance that could reasonably be expected to impair the ability of any Borrower or Subsidiary to conduct its business at any time hereafter in substantially the same manner as conducted on the Closing Date.
1.1.20.  Labor Relations.  No Borrower or Subsidiary is party to or bound by any collective bargaining agreement, management agreement or consulting agreement.  There are no material grievances, disputes or controversies with any union or other organization of any Borrower’s or Subsidiary’s employees, or, to any Borrower’s knowledge, any asserted or threatened strikes, work stoppages or demands for collective bargaining.
1.1.21.  Affiliate Payable Practices.  No Obligor has made any material change in its historical accounts payable practices with respect to accounts payable owed to its Affiliates, from those in effect on the Closing Date.
1.1.22.  Not a Regulated Entity.  No Obligor is (a) an “investment company” or “person directly or indirectly controlled by or acting on behalf of an investment company” within the meaning of the Investment Company Act of 1940; or (b) subject to regulation under the Federal Power Act, Interstate Commerce Act, any public utilities code or other Applicable Law regarding its authority to incur Debt.
1.1.23.  Margin Stock.  No Borrower or Subsidiary is engaged, principally or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any Margin Stock.  No Loan proceeds or Letters of Credit will be used by Borrowers to purchase or carry, or to reduce or refinance any Debt incurred to purchase or carry, any Margin Stock or for any related purpose governed by Regulations T, U or X of the Federal Reserve Board of Governors.
1.1.24.  OFAC; Anti-Corruption Laws.  No Borrower, Subsidiary, or director, officer, employee, agent, affiliate or representative thereof, is or is owned or controlled by an individual or entity that is currently the target of any Sanction or is located, organized or resident in a 
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country, territory or jurisdiction that is the subject of a Sanction.  Each Borrower and Subsidiary has conducted its business in compliance with all applicable Anti-Corruption Laws.
1.2.Complete Disclosure.  No Loan Document contains any untrue statement of a material fact, nor fails to disclose any material fact necessary to make the statements contained therein not materially misleading.  There is no fact or circumstance that any Obligor has failed to disclose to Lender in writing that could reasonably be expected to have a Material Adverse Effect.
Section 10.COVENANTS AND CONTINUING AGREEMENTS
1.1.Affirmative Covenants.  As long as the Commitment or any Obligations are outstanding, each Borrower shall, and shall cause each Subsidiary to:
1.1.1.  Inspections; Appraisals.
(a)Permit Lender from time to time, not more than three (3) times during any Fiscal Year (which amount shall not be capped following the occurrence and during the continuance of an Event of Default), subject (unless an Event of Default has occurred and is continuing) to reasonable notice and during normal business hours of the Borrower, to visit and inspect the Properties of any Borrower or Subsidiary, inspect, audit and make extracts from any Borrower’s or Subsidiary’s books and records, and discuss with its officers, employees, agents, advisors and independent accountants such Borrower’s or Subsidiary’s business, financial condition, assets, prospects and results of operations.  Lender shall have no duty to any Obligor to make any inspection, nor to share any results of any inspection, appraisal or report with any Obligor.  Borrowers acknowledge that all inspections, appraisals and reports are prepared by Lender for its purposes, and Borrowers shall not be entitled to rely upon them.
(b)Reimburse Lender for all its charges, costs and expenses in connection with examinations and inspections conducted pursuant to Section 10.1.1 up to one (1) time per Fiscal Year (which amount shall increase to two (2) times per Fiscal Year if a Due Diligence Trigger Period has occurred and is continuing at the time such examination or inspection is requested); provided, that if any examination or inspection is requested after the occurrence and during the continuance of an Event of Default, all charges, costs and expenses relating thereto shall be reimbursed by Borrowers without regard to such limits.  Borrowers shall pay Lender’s then standard charges for examination activities, including charges for its internal examination groups, as well as the charges of any third party used for such purposes.  No Borrowing Base calculation shall include Collateral acquired in a Permitted Acquisition or otherwise outside the Ordinary Course of Business until completion of applicable field examinations (which shall not be included in the limits provided above) satisfactory to Lender.
1.1.2.  Financial and Other Information.  Keep adequate records and books of account with respect to its business activities, in which proper entries are made in accordance with GAAP reflecting all financial transactions; and furnish to Lender:
(a)as soon as available, and in any event within 90 days after the close of each Fiscal Year, balance sheets as of the end of such Fiscal Year and the related statements of income, cash flow and shareholders equity for such Fiscal Year, on consolidated basis for Borrowers and Subsidiaries, which consolidated statements shall be audited and certified (without a “going concern” qualification or similar notation other than as a result of debt maturity within one year) by a firm of independent certified public accountants of recognized standing selected by Borrowers and reasonably acceptable to Lender, and shall set forth in comparative form corresponding figures for the preceding Fiscal Year and other information acceptable to Lender;
(b)as soon as available, and 
(i) if a Financial Reporting Trigger Period is not in effect during the applicable Fiscal Quarter, in any event within 45 days after the end of each 
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Fiscal Quarter, unaudited balance sheets as of the end of such Fiscal Quarter and the related statements of income and cash flow for such month and for the portion of the Fiscal Year then elapsed, on consolidated basis for Borrowers and Subsidiaries, setting forth in comparative form corresponding figures for the preceding Fiscal Year and certified by the chief financial officer of Borrower Agent as prepared in accordance with GAAP and fairly presenting the financial position and results of operations for such month and period, subject to normal year-end adjustments and the absence of footnotes; and
(ii) if a Financial Reporting Trigger Period is in effect at any time during the applicable month, in any event within 30 days after the end of each month, unaudited balance sheets as of the end of such month and for the portion of the Fiscal Year then elapsed, on consolidated basis for Borrowers and Subsidiaries, setting forth in comparative form corresponding figures for the preceding Fiscal Year and certified by the chief financial officer of Borrower Agent as prepared in accordance with GAAP and fairly presenting the financial position and results of operations for such month and period, subject to normal year-end adjustments and the absence of footnotes;
(c)concurrently with delivery of financial statements under clauses (a) and (b) above, or more frequently if requested by Lender at any time an Event of Default has occurred and is continuing and Loans are outstanding, a Compliance Certificate executed by the chief financial officer of Borrower Agent;
(d)concurrently with delivery of financial statements under clause (a) above, copies of all management letters and other material reports, in each case which demonstrate an issue with Borrowers’ internal controls, submitted to Borrowers by their accountants in connection with such financial statements;
(e)not later than 60 days after the end of each Fiscal Year, projections of Borrowers’ consolidated balance sheets, results of operations, cash flow and Availability for the next Fiscal Year, Fiscal Quarter by Fiscal Quarter;
(f)together with delivery of each Borrowing Base Report provided on a monthly or quarterly basis,  listing of each Borrower’s trade payables, specifying the trade creditor and balance due, and a detailed trade payable aging, all in form reasonably satisfactory to Lender;
(g)promptly after the sending or filing thereof, copies of any proxy statements, financial statements or reports that any Borrower has made generally available to its shareholders; copies of any regular, periodic and special reports or registration statements or prospectuses that any Borrower files with the Securities and Exchange Commission or any other Governmental Authority, or any securities exchange; and copies of any press releases or other statements made available by a Borrower to the public concerning material changes to or developments in the business of such Borrower;
(h)promptly after the sending or filing thereof, copies of any annual report to be filed in connection with each Plan or Foreign Plan; and
(i)such other reports and information (financial or otherwise) as Lender may request from time to time in connection with any Collateral or any Borrower’s, Subsidiary’s or other Obligor’s financial condition, ownership or business.
Documents required to be delivered pursuant to Section 10.1.2(a) and Section 10.1.2(b) may be delivered electronically and if so delivered, shall be deemed to have been delivered to, and received by, Lender on the date (x) on which Borrower posts such documents, or provides a link thereto, on Borrower’s website on the Internet, (y) on which such documents are posted on Borrower’s behalf on Intralinks or another website, if any, to 
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which Lender has access (whether a commercial or governmental third-party website or whether sponsored by Lender) or (z) on which Borrower has filed such reports with the SEC via the EDGAR filing system.
1.1.3.  Notices.  Notify Lender in writing, promptly after a Borrower’s knowledge thereof, of any of the following affecting an Obligor: (a) threat or commencement of any proceeding or investigation, whether or not covered by insurance, if an adverse determination could reasonably be expected to have a Material Adverse Effect; (b) pending or threatened labor dispute, strike, walkout or expiration of a material labor contract; (c) default or dispute under a Material Contract which may negatively impact the collectability of any Account in excess of $1,000,000 in the aggregate; (d) existence of a Default or Event of Default; (e) judgment against an Obligor, which is not covered by insurance and for which the applicable insurer has not denied coverage in writing, in an amount exceeding $2,500,000; (f) assertion of any Intellectual Property Claim, if an adverse resolution could reasonably be expected to have a Material Adverse Effect; (g) violation or asserted violation of any Applicable Law (including ERISA, OSHA, FLSA or any Environmental Law), if an adverse resolution could have a Material Adverse Effect; (h) an Environmental Release by an Obligor or on any Property owned, leased or occupied by an Obligor; or receipt of an Environmental Notice; (i) occurrence of an ERISA Event; (j) material change in any accounting or financial reporting practice that affects calculation of the Borrowing Base, any Reserve or any covenant hereunder; (k) change in any information contained in a Beneficial Ownership Certificate delivered to Lender; (l) discharge of or withdrawal or resignation by Borrowers’ independent accountants; or (m) opening or move of Borrower’s headquarters or any location where books and records are maintained.
1.1.4.  Landlord and Storage Agreements.  Upon request, provide Lender with copies of all existing agreements, and promptly after execution thereof provide Lender with copies of all future agreements, between an Obligor and any landlord, warehouseman, processor, shipper, bailee or other Person that owns any premises at which any Collateral which has a book value in excess of $5,000,000 may be kept in the United States.
1.1.5.  Compliance with Laws.  Comply with all Applicable Laws, including ERISA, Environmental Laws, FLSA, OSHA, Anti-Terrorism Laws, and laws regarding collection and payment of Taxes, and maintain all Governmental Approvals necessary to the ownership of its Properties or conduct of its business, unless failure to comply (other than failure to comply with Anti-Terrorism Laws) or maintain could not reasonably be expected to have a Material Adverse Effect.  Each Borrower and Subsidiary shall maintain policies and procedures designed to promote and achieve compliance with applicable Anti-Corruption Laws and Sanctions.  Without limiting the generality of the foregoing, if any Environmental Release occurs at or on any Properties of any Borrower or Subsidiary, it shall act promptly and diligently to investigate and report to Lender and all appropriate Governmental Authorities the extent of, and to make appropriate remedial action to eliminate, such Environmental Release, whether or not directed to do so by any Governmental Authority.
1.1.6.  Taxes.  Pay and discharge all federal and material state and local Taxes prior to the date on which they become delinquent or penalties attach, unless such Taxes are being Properly Contested.
1.1.7.  Insurance.  In addition to the insurance required hereunder with respect to Collateral, maintain insurance in form and substance and with insurers (with a Best rating of at least A+, unless otherwise approved by Lender in its discretion) satisfactory to Lender, (a) with respect to the Properties and business of Borrowers and Subsidiaries of such type (including product liability, workers’ compensation, larceny, embezzlement, or other criminal misappropriation insurance), in such amounts, and with such coverages and deductibles as are customary for companies similarly situated; and (b) business interruption insurance in an amount not less than $5,000,000, in each case with deductibles, endorsements and assignments satisfactory to Lender.
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1.1.8.  Licenses.  Keep each material License affecting any Collateral of Borrowers and Subsidiaries in full force and effect, except as could not reasonably be expected to have a Material Adverse Effect.
1.1.9.  Future Subsidiaries.  Promptly notify Lender upon any Person becoming a Subsidiary (which is not a Non-Material Subsidiary) and deliver any know-your-customer or other background diligence information requested by Lender with respect to such Subsidiary; and (provided it is not a Foreign Subsidiary) cause it to guaranty the Obligations in a manner satisfactory to Lender, and to execute and deliver such documents, instruments and agreements and to take such other actions as Lender shall require to evidence and perfect a Lien in favor of Lender on all assets of such Person, including delivery of legal opinions, in form and substance satisfactory to Lender.
1.1.10.  Depository Bank.  Commencing on January 17, 2022, and at all times thereafter, so long as Borrowers’ domestic unrestricted cash and Cash Equivalents are in excess of $50,000,000, maintain a balance of at least $20,000,000 in deposit accounts or securities accounts held at Bank of America, N.A. (or any of its Affiliates) and subject to Section 6.3, a Deposit Account Control Agreement, or a Security Account Control Agreement, as applicable, in favor of Lender. 
1.2.Negative Covenants.  As long as the Commitment or any Obligations are outstanding, each Borrower shall not, and shall cause each Subsidiary not to:
1.1.1.  Permitted Debt.  Create, incur, guarantee or suffer to exist any Debt, except:
(a)the Obligations;
(b)Subordinated Debt;
(c)Permitted Purchase Money Debt;
(d)existing Borrowed Money not satisfied with the initial Loan proceeds;
(e)Bank Product Debt incurred in the Ordinary Course of Business;
(f)Debt that is in existence when a Person becomes a Subsidiary or that is secured by an asset when acquired by a Borrower or Subsidiary, as long as such Debt was not incurred in contemplation of such Person becoming a Subsidiary or such acquisition, and does not exceed $5,000,000 in the aggregate at any time;
(g)Permitted Contingent Obligations;
(h)Refinancing Debt as long as each Refinancing Condition is satisfied; 
(i)earnouts, purchase price adjustments, profit sharing arrangements, deferred purchase money amounts and similar payment obligations or continuing obligations of any nature of such Person arising out of Permitted Acquisitions; 
(j)Debt with respect to performance bonds, appeal bonds, customs and duty bonds, and other similar obligations;
(k)hedging obligations incurred in the Ordinary Course of Business and not for speculative purposes, credit card indebtedness, letters of credit, and other Debt in respect of bank services provided by financial institutions other than Lender;
(l)unsecured indebtedness to trade creditors incurred in the Ordinary Course of Business;
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(m)Debt incurred as a result of endorsing negotiable instruments received in the Ordinary Course of Business; and
(n)other unsecured Debt up to $5,000,000 in the aggregate at any time.
1.1.2.  Permitted Liens.  Create or suffer to exist any Lien upon any of its Property, except the following (collectively, “Permitted Liens”):
(a)Liens in favor of Lender and Secured Parties;
(b)Purchase Money Liens securing Permitted Purchase Money Debt;
(c)Liens for Taxes not yet delinquent or being Properly Contested;
(d)statutory Liens (other than Liens for Taxes or imposed under ERISA) arising in the Ordinary Course of Business, but only if (i) payment of the obligations secured thereby is not yet delinquent or is being Properly Contested, and (ii) such Liens do not materially impair the value or use of the Property or materially impair operation of the business of any Borrower or Subsidiary;
(e)Liens incurred or deposits made in the Ordinary Course of Business to secure the performance of government tenders, bids, contracts, statutory obligations and other similar obligations, as long as such Liens are at all times junior to Lender’s Liens and are required or provided by law;
(f)Liens arising in the Ordinary Course of Business and subject to Lien Waivers;
(g)Liens arising by virtue of a judgment or judicial order against any Borrower or Subsidiary, or any Property of a Borrower or Subsidiary, as long as such Liens are (i) in existence for less than 20 consecutive days or being Properly Contested, and (ii) at all times junior to Lender’s Liens;
(h)easements, rights-of-way, restrictions, covenants or other agreements of record, and other similar charges or encumbrances on Real Estate, that do not secure any monetary obligation and do not interfere with the Ordinary Course of Business;
(i)normal and customary rights of setoff upon deposits in favor of depository institutions, and Liens of a collecting bank on Payment Items in the course of collection;
(j)Liens on assets (other than Accounts) acquired in a Permitted Acquisition, securing Debt permitted by Section 10.2.1(f); 
(k)Liens in cash, Cash Equivalents and other investment securities securing obligations described in Section 10.2.1(k);
(l)Deposits to secure customs duties and the performance of bids, tenders, trade contracts, government contracts, statutory obligations, surety, stay, customs and appeal bonds, performance and other similar obligations, in each case provided in the Ordinary Course of Business and not in connection with indebtedness for money borrowed;
(m)non-exclusive licenses of Intellectual Property granted to third parties in the Ordinary Course of Business and Permitted Exclusive Licenses;
(n)deposits with landlords as security in connection with real property leases;
(o)precautionary UCC filings in connection with operating leases;
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(p)escrows and licenses contemplated in or related to Permitted Acquisitions; 
(q)Liens securing Subordinated Debt so long as such Lien is subject to a subordination agreement in form and substance satisfactory to Lender; and
(r)existing Liens shown on Schedule 10.2.2 to the Disclosure Letter.
1.1.3.  Reserved.  
1.1.4.  Distributions; Upstream Payments.  Declare or make any Distributions, except Upstream Payments and Permitted Distributions; or create or suffer to exist any encumbrance or restriction on the ability of a Subsidiary to make an Upstream Payment, except for restrictions under the Loan Documents, under Applicable Law or in effect on the Closing Date as shown on Schedule 9.1.15 to the Disclosure Letter.
1.1.5.  Investments.  Make any Restricted Investment.
1.1.6.  Disposition of Assets.  Make any Disposition, except a Permitted Disposition or transfer of Collateral to any Loan Party.
1.1.7.  Restrictions on Payment of Certain Debt.  At any time the Payment Conditions are not satisfied, make any payments (whether voluntary or mandatory, or a prepayment, redemption, retirement, defeasance or acquisition) with respect to any (a) Subordinated Debt, except regularly scheduled payments of principal, interest and fees, but only to the extent permitted under any subordination agreement relating to such Debt; (b) Borrowed Money (other than the Obligations) prior to its due date under the agreements evidencing such Debt as in effect on the Closing Date (or as amended thereafter with the consent of Lender); or (c) earnouts, purchase price adjustments, profit sharing arrangements, deferred purchase money amounts and similar payment obligations or continuing obligations of any nature of such Person arising out of Permitted Acquisitions.  The restrictions on prepayment of Debt set forth in clause (b) of this Section 10.2.7 shall not apply to the prepayment by Obligors and their Subsidiaries of outstanding balances on credit cards issued to the Obligors or their Subsidiaries. 
1.1.8.  Fundamental Changes.  Change its name or conduct business under any fictitious name; change its tax, charter or other organizational identification number; change its form or state of organization; liquidate, wind up its affairs or dissolve itself; consummate (or unwind) a Division; effect a Disposition of substantially all its assets; or merge, combine or consolidate with any Person; in each case, whether in a single transaction or series of related transactions, except for (a) mergers or consolidations of a wholly-owned Subsidiary with another wholly-owned Subsidiary when no Event of Default has occurred and is continuing, or into a Borrower; or (b) Permitted Acquisitions.
1.1.9.  Organic Documents.  Amend, modify or otherwise change any of its Organic Documents, except in any respect not materially adverse to Lender’s interests.
1.1.10.  Tax Consolidation.  File or consent to the filing of any consolidated income tax return with any Person other than Borrowers and Subsidiaries.
1.1.11.  Accounting Changes.  Make any material change in accounting treatment or reporting practices, except in accordance with Section 1.2 or as required by GAAP; or change its Fiscal Year.
1.1.12.  Restrictive Agreements.  Become a party to any Restrictive Agreement, except a Restrictive Agreement (a) in effect on the Closing Date; (b) relating to secured Debt permitted hereunder or any Liens permitted pursuant to Section 10.2.2, as long as the restrictions 
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apply only to collateral for such Debt or the property encumbered by such Liens, as applicable; or (c) constituting customary restrictions on assignment in leases and other contracts.
1.1.13.  Swaps.  Enter into any Swap, except to hedge risks arising in the Ordinary Course of Business and not for speculative purposes.
1.1.14.  Conduct of Business.  Engage in any business, other than its business as conducted on the Closing Date and any activities complimentary or incidental thereto.
1.1.15.  Affiliate Transactions.  Enter into or be party to any transaction with an Affiliate, except (a) transactions expressly permitted by the Loan Documents; (b) payment of reasonable compensation to officers and employees for services actually rendered, and payment of customary directors’ fees and indemnities; (c) transactions solely among Borrowers; (d) transactions with Affiliates consummated prior to the Closing Date, as shown on Schedule 10.2.17 to the Disclosure Letter; and (e) transactions with Affiliates in the Ordinary Course of Business, upon fair and reasonable terms no less favorable than would be obtained in a comparable arm’s-length transaction with a non-Affiliate.
1.1.16.  Plans.  Become party to any Multiemployer Plan or Foreign Plan, other than any in existence on the Closing Date.
1.1.17.  Amendments to Subordinated Debt.  Amend, supplement or otherwise modify any document, instrument or agreement relating to any Subordinated Debt, except as permitted under the applicable subordination agreement.
1.3.Financial Covenants.  As long as the Commitment or any Obligations are outstanding, Borrowers shall:
1.1.1.  Minimum Liquidity.  Commencing on the Closing Date and continuing until the last day of the Fiscal Quarter immediately preceding the Financial Covenant Changeover Date, maintain Liquidity at all times, of at least $20,000,000.  
1.1.2. Fixed Charge Coverage Ratio.  For the period commencing on the Financial Covenant Changeover Date, and each Fiscal Quarter thereafter, maintain a Fixed Charge Coverage Ratio for each 12 month period of at least 1.00 to 1.00 while a Financial Covenant Trigger Period is in effect, measured quarterly as of the last day of each Fiscal Quarter for the most recent period for which financial statements were delivered hereunder prior to the Financial Covenant Trigger Period and each period ending thereafter until the Financial Covenant Trigger Period is no longer in effect.  
Section 11.EVENTS OF DEFAULT; REMEDIES ON DEFAULT
1.1.Events of Default.  Each of the following shall be an “Event of Default” if it occurs for any reason whatsoever, whether voluntary or involuntary, by operation of law or otherwise:
(a)Any Borrower fails to pay its Obligations when due (whether at stated maturity, on demand, upon acceleration or otherwise);
(b)Any representation, warranty or other written statement of an Obligor made in connection with any Loan Documents or transactions contemplated thereby is incorrect or misleading in any material respect when given;
(c)A Borrower breaches or fail to perform any covenant contained in Section 7.2, 7.4, 7.6, 8.1, 8.2.4, 8.2.5, 8.6.2, 10.1.1, 10.1.2, 10.2 or 10.3;
(d)An Obligor breaches or fails to perform any other covenant contained in any Loan Documents, and such breach or failure is not cured within 30 days after a Senior Officer of 
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such Obligor has knowledge thereof or receives notice thereof from Lender, whichever is sooner; provided, however, that, if such breach or failure cannot by its nature be cured within thirty (30) day period or cannot after diligent attempts by Borrower be cured within such thirty (30) day period, and such default is to be cured within a reasonable time, then Borrower shall have an additional period (which shall not in any case exceed thirty (30) days) to attempt to cure such breach or failure, and within such reasonable time period the failure to cure such default shall not be deemed an Event of Default;
(e)A Guarantor repudiates, revokes or attempts to revoke its Guaranty or an Obligor or third party denies or contests the validity or enforceability of any Loan Documents or Obligations, or the perfection or priority of any Lien granted to Lender; it is unlawful for an Obligor to perform any of its obligations under a Loan Document; or any Loan Document ceases to be in full force or effect for any reason (other than a waiver or release by Lender);
(f)Any breach or default of an Obligor occurs under (i) any Swap; or (ii) any instrument or agreement to which it is a party or by which it or any of its Properties is bound, relating to any Debt (other than the Obligations) in excess of $4,000,000 if the maturity of or any payment with respect to such Debt could be accelerated or demanded due to such breach (whether or not any applicable grace period or notice has been satisfied);
(g)Any final, nonappealable judgment or order for the payment of money is entered against an Obligor in an amount that exceeds, individually or cumulatively with all unsatisfied judgments or orders against all Obligors, $4,000,000 (net of insurance coverage therefor that has not been denied by the insurer);
(h)A loss, theft, damage or destruction occurs with respect to any Collateral if the amount not covered by insurance exceeds $5,000,000;
(i)An Obligor is enjoined, restrained or in any way prevented by any Governmental Authority from conducting any material part of its business; an Obligor suffers the loss, revocation or termination of any material license, permit, lease or agreement necessary to its business; there is a cessation of any material part of an Obligor’s business for a material period of time; any material Collateral or Property of an Obligor is taken or impaired through condemnation; an Obligor agrees to or commences any liquidation, dissolution or winding up of its affairs; or an Obligor is not Solvent;
(j)An Insolvency Proceeding is commenced by an Obligor; an Obligor makes an offer of settlement, extension or composition to its unsecured creditors generally; a trustee is appointed to take possession of any substantial Property of or to operate any of the business of an Obligor; or an Insolvency Proceeding is commenced against an Obligor and:  the Obligor consents to institution of the proceeding, the petition commencing the proceeding is not timely contested by the Obligor, the petition is not dismissed within 30 days after filing, or an order for relief is entered in the proceeding;
(k)An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan that has resulted or could reasonably be expected to result in liability of an Obligor to a Pension Plan, Multiemployer Plan or PBGC, or that constitutes grounds for appointment of a trustee for or termination by the PBGC of any Pension Plan or Multiemployer Plan; an Obligor or ERISA Affiliate fails to pay when due any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan; or any event similar to the foregoing occurs or exists with respect to a Foreign Plan;
(l)An Obligor or any of its Senior Officers is criminally indicted or convicted for (i) a felony committed in the conduct of the Obligor’s business, or (ii) violating any state or federal law (including the Controlled Substances Act, Money Laundering Control Act of 1986 and Illegal Exportation of War Materials Act) that could lead to forfeiture of any material Property or any Collateral; or
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(m)A Change of Control occurs.
1.2.Remedies upon Default.  If an Event of Default described in Section 11.1(j) has occurred and is continuing with respect to any Borrower, then to the extent permitted by Applicable Law, all Obligations shall become automatically due and payable and the Commitment shall terminate, without any action by Lender or notice of any kind.  In addition, or if any other Event of Default has occurred and is continuing, Lender may in its discretion do any one or more of the following from time to time:
(a)declare any Obligations immediately due and payable, whereupon they shall be due and payable without diligence, presentment, demand, protest or notice of any kind, all of which are hereby waived by Borrowers to the fullest extent permitted by law;
(b)terminate, reduce or condition the Commitment or adjust the Borrowing Base;
(c)require Obligors to Cash Collateralize LC Obligations, Bank Product Debt and other Obligations that are contingent or not yet due and payable; and
(d)exercise any other rights or remedies afforded under any agreement, by law, at equity or otherwise, including the rights and remedies of a secured party under the UCC.  Such rights and remedies include the rights to (i) take possession of any Collateral; (ii) require Borrowers to assemble Collateral, at Borrowers’ expense, and make it available to Lender at a place designated by Lender; (iii) enter any premises where Collateral is located and store Collateral on such premises until sold (and if the premises are owned or leased by a Borrower, Borrowers agree not to charge for such storage); and (iv) sell or otherwise dispose of any Collateral in its then condition, or after any further manufacturing or processing thereof, at public or private sale, with such notice as may be required by Applicable Law, in lots or in bulk, at such locations, all as Lender, in its discretion, deems advisable.  Each Borrower agrees that 10 days’ notice of any proposed sale or other disposition of Collateral by Lender shall be reasonable, and that any sale conducted on the internet or to a licensor of Intellectual Property shall be commercially reasonable.  Lender may conduct sales on any Obligor’s premises, without charge, and any sales may be adjourned from time to time in accordance with Applicable Law.  Lender shall have the right to sell, lease or otherwise dispose of any Collateral for cash, credit or any combination thereof, and Lender may purchase any Collateral at public or, if permitted by law, private sale and, in lieu of actual payment of the purchase price, may set off the amount of such price against the Obligations.
1.3.License.  Lender is hereby granted an irrevocable, non-exclusive license or other right to use, license or sub-license (without payment of royalty or other compensation to any Person) any or all Intellectual Property of Borrowers, computer hardware and software, trade secrets, brochures, customer lists, promotional and advertising materials, labels, packaging materials and other Property, in advertising for sale, marketing, selling, collecting, completing manufacture of, or otherwise exercising any rights or remedies with respect to, any Collateral.  Each Borrower’s rights and interests under Intellectual Property shall inure to Lender’s benefit.
1.4.Setoff.  At any time an Event of Default has occurred and is continuing, Lender and its Affiliates are authorized, to the fullest extent permitted by Applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by Lender or such Affiliate to or for the credit or the account of an Obligor against its Obligations, whether or not Lender or such Affiliate shall have made any demand under this Agreement or any other Loan Document and although such Obligations may be contingent or unmatured or are owed to a branch or office of Lender or such Affiliate different from the branch or office holding such deposit or obligated on such indebtedness.  The rights of Lender and each such Affiliate under this Section are in addition to other rights and remedies (including other rights of setoff) that such Person may have.
1.5.Remedies Cumulative; No Waiver
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1.1.1.  Cumulative Rights.  All agreements, warranties, guaranties, indemnities and other undertakings of Obligors under the Loan Documents are cumulative and not in derogation of each other.  The rights and remedies of Lender under the Loan Documents are cumulative, may be exercised at any time and from time to time, concurrently or in any order, and are not exclusive of any other rights or remedies available by agreement, by law, at equity or otherwise.  All such rights and remedies shall continue in full force and effect until Full Payment of all Obligations.
1.1.2.  Waivers.  No waiver or course of dealing shall be established by (a) the failure or delay of Lender to require strict performance by any Obligor under any Loan Document, or to exercise any rights or remedies with respect to Collateral or otherwise; (b) the making of any Loan or issuance of any Letter of Credit when an Event of Default has occurred and is continuing or other failure to satisfy any conditions precedent; or (c) acceptance by Lender of any payment or performance by an Obligor under any Loan Documents in a manner other than that specified therein.  Any failure to satisfy a financial covenant on a measurement date shall not be cured or remedied by satisfaction of such covenant on a subsequent date.
Section 12.MISCELLANEOUS
1.1.Amendments and Waivers
1.1.1.  Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of Borrowers, Lender, and their respective successors and assigns, except that no Obligor may assign or delegate its rights or obligations under any Loan Documents. So long as no Event of Default has occurred and is continuing, Lender may not assign its interests, rights or obligations under any Loan Document to any Person who is (a) a direct competitor of Borrower, whether as an operating company or direct or indirect parent with voting control over such operating company, (b) an investor specializing in distressed debt, or (c) a Foreign Lender.
1.1.2.  Amendments and Other Modifications.  No Modification of a Loan Document shall be effective without the prior written agreement of Lender and each Obligor party to such Loan Document; provided, that if Real Estate secures any Obligations, no Modification of a Loan Document shall add, increase, renew or extend any credit line hereunder until completion of flood diligence and documentation as required by Flood Laws and satisfactory to Lender; and provided further, that only the consent of the parties to a Bank Product agreement shall be required for any modification of such agreement.  Notwithstanding anything in any Loan Document to the contrary, Lender may make or adopt Conforming Changes from time to time and any amendment implementing such changes will become effective without further action or consent of any other party; provided, that Lender shall post or otherwise provide each such amendment to Borrowers reasonably promptly after it becomes effective.  Any waiver or consent granted by Lender shall be effective only if in writing, and only for the matter specified.
1.2.Indemnity.  EACH BORROWER SHALL INDEMNIFY AND HOLD HARMLESS THE INDEMNITEES AGAINST ANY CLAIMS THAT MAY BE INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE, INCLUDING CLAIMS ASSERTED BY ANY OBLIGOR OR OTHER PERSON OR ARISING FROM THE NEGLIGENCE OF AN INDEMNITEE.  In no event shall any party to a Loan Document have any obligation thereunder to indemnify or hold harmless an Indemnitee with respect to a Claim that is determined in a final, non-appealable judgment by a court of competent jurisdiction to result from the gross negligence or willful misconduct of such Indemnitee. This Section 12.2 shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim. Without limiting the provisions of Section 5.7.1, this Section 12.2 shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.
1.3.Notices and Communications
1.1.1.  Notice Address.  Subject to Section 12.3.2, all Communications by or to a party hereto shall be in writing and shall be given to any Borrower, at Borrower Agent’s address 
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shown on the signature pages hereof, and to any other Person at its address shown on the signature pages hereof, or at such other address as a party may hereafter specify by notice in accordance with this Section 12.3.  In addition, a Communication from Lender to Borrowers may, to the extent permitted by law, be delivered electronically (i) by transmitting the Communication to the electronic address specified by Borrower Agent to Lender in writing from time to time, or (ii) by posting the Communication on a website and sending Borrower Agent notice (electronically or otherwise) that the Communication has been posted and providing instructions (at such time or prior to delivery of such Communication) for viewing it.  Each Communication shall be effective only (a) if given by facsimile transmission, when transmitted to the applicable facsimile number, if confirmation of receipt is received; (b) if given by mail, three Business Days after deposit in the U.S. mail, with first-class postage pre-paid, addressed to the applicable address; (c) if given by personal delivery, when duly delivered to the notice address with receipt acknowledged; or (d) if provided electronically by Lender to Borrowers, when the Communication (or notice advising of its posting to a website) is sent to Borrower Agent’s electronic address.  Notwithstanding the foregoing, no notice to Lender pursuant to Section 2.1.3, 2.2, 3.1.2 or 4.1.1 shall be effective until actually received by the individual to whose attention at Lender such notice is required to be sent.  Any written Communication not sent in conformity with the foregoing provisions shall nevertheless be effective on the date actually received by the noticed party.  Any notice received by Borrower Agent shall be deemed received by all Borrowers.
1.1.2.  Communications.  Electronic and telephonic Communications (including e-mail, messaging, voice mail and websites) may be used only in a manner acceptable to Lender.  Lender makes no assurance as to the privacy or security of electronic or telephonic Communications.  E-mail and voice mail shall not be effective notices under the Loan Documents.
1.1.3.  Platform.  Borrower Materials shall be delivered by Borrowers pursuant to procedures approved by Lender, including electronic delivery (if requested by Lender) to an electronic system maintained by it (“Platform”).  Borrowers shall notify Lender of each posting of Borrower Materials on the Platform and the materials shall be deemed received by Lender only upon its receipt of such notice.  The Platform is provided “as is” and “as available.”  Lender does not warrant the adequacy or functioning of the Platform, and expressly disclaims liability for any issues involving the Platform.  NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS, OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY LENDER WITH RESPECT TO THE PLATFORM.  No Indemnitee shall have any liability to Obligors or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) relating to use by any Person of the Platform, including any unintended recipient, nor for delivery of any information via the Platform, internet, e-mail, or any other electronic platform or messaging system.
1.1.4.  Non-Conforming Communications.  Lender may rely on any Communication purportedly given by or on behalf of an Obligor even if it was not made in a manner specified herein, incomplete or not confirmed, or if the terms thereof, as understood by the recipient, varied from an earlier Communication or later confirmation.  Each Borrower shall indemnify and hold harmless each Indemnitee from any liabilities, losses, costs and expenses arising from any electronic or telephonic Communication purportedly given by or on behalf of any Obligor.
1.1.5.  Reliance on Communications.  No Secured Party shall be responsible for or have any duty to ascertain or inquire into the sufficiency, validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document (including, for the avoidance of doubt, in connection with an Electronic Signature transmitted by telecopy, emailed .pdf or other electronic means).  Secured Parties may rely on, and shall incur no liability under or in respect of any Loan Document by acting on, any Communication (which may be a fax, electronic message, internet or intranet website posting, or other distribution, or signed by an Electronic Signature) or any statement made to it orally or by telephone and believed by it to be genuine and signed or sent or otherwise authenticated (whether or not such Person in fact meets the requirements set forth in the Loan Documents for being the maker thereof).  Lender shall be entitled 
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to rely on the e-mail addresses and telephone numbers provided by Obligors and their authorized representatives.  Each Obligor hereby waives (a) any argument, defense or right to contest the legal effect, validity or enforceability of any Loan Document or other Communication based solely on the lack of a paper original copy thereof, and (b) waives any claim against any Indemnitee for liabilities arising from its reliance on or use of Electronic Signatures, including liabilities relating to an Obligor’s failure to use a security measure in connection with execution, delivery or transmission of an Electronic Signature.
1.4.Performance of Borrowers’ Obligations.  Lender may, in its discretion at any time and from time to time, at Borrowers’ expense, pay any amount or do any act required of a Borrower under any Loan Documents or otherwise lawfully requested by Lender to (a) enforce any Loan Documents or collect any Obligations; (b) protect, insure, maintain or realize upon any Collateral; or (c) defend or maintain the validity or priority of Lender’s Liens in any Collateral, including any payment of a judgment, insurance premium, warehouse charge, finishing or processing charge, or landlord claim, or any discharge of a Lien.  All payments, costs and expenses (including Extraordinary Expenses) of Lender under this Section shall be reimbursed by Borrowers, on demand, with interest from the date incurred until paid in full, at the Default Rate applicable to Base Rate Loans.  Any payment made or action taken by Lender under this Section shall be without prejudice to any right to assert an Event of Default or to exercise any other rights or remedies under the Loan Documents.
1.5.Credit Inquiries.  Lender may (but shall have no obligation) to respond to usual and customary credit inquiries from third parties concerning any Obligor or Subsidiary.
1.6.Severability.  Wherever possible, each provision of the Loan Documents shall be interpreted in such manner as to be valid under Applicable Law.  If any provision is found to be invalid under Applicable Law, it shall be ineffective only to the extent of such invalidity and the remaining provisions of the Loan Documents shall remain in full force and effect.
1.7.Cumulative Effect; Conflict of Terms.  The provisions of the Loan Documents are cumulative.  The parties acknowledge that the Loan Documents may use several limitations or measurements to regulate similar matters, and they agree that these are cumulative and that each must be performed as provided.  Except as otherwise provided in another Loan Document (by specific reference to the applicable provision of this Agreement), if any provision contained herein is in direct conflict with any provision in another Loan Document, the provision herein shall govern and control.
1.8.Execution; Electronic Records.  Any Loan Document, including any required to be in writing, may (if agreed by Lender) be in the form of an Electronic Record and may be executed using Electronic Signatures.  An Electronic Signature on or associated with any Communication shall be valid and binding on each Obligor and other party thereto to the same extent as a manual, original signature, and any Communication entered into by Electronic Signature shall constitute the legal, valid and binding obligation of each party, enforceable to the same extent as if a manually executed original signature were delivered.  A Communication may be executed in as many counterparts as necessary or convenient, including both paper and electronic counterparts, but all such counterparts are one and the same Communication.  The parties may use or accept manually signed paper Communications converted into electronic form (such as scanned into pdf), or electronically signed Communications converted into other formats, for transmission, delivery and/or retention. Lender may, at its option, create one or more copies of a Communication in the form of an imaged Electronic Record (“Electronic Copy”), which shall be deemed created in the ordinary course of Lender’s business, and may destroy the original paper document.  Any Communication in the form of an Electronic Record, including an Electronic Copy, shall be considered an original for all purposes, and shall have the same legal effect, validity and enforceability as a paper record.  Notwithstanding anything herein, (a) Lender is under no obligation to accept an Electronic Signature in any form or format unless expressly agreed by it pursuant to procedures approved by it; (b) Lender is entitled to rely on any Electronic Signature purportedly given by or on behalf of an Obligor without further verification and regardless of the appearance or form of such Electronic Signature; and (c) upon 
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request by Lender, any Loan Document using an Electronic Signature shall be promptly followed by a manually executed, original counterpart.
1.9.Entire Agreement.  This Agreement shall be effective when executed by Lender and when Lender has received counterparts hereof that, taken together, bear the signature of each other party hereto.  Time is of the essence with respect to all Loan Documents and Obligations.  The Loan Documents constitute the entire agreement, and supersede all prior understandings and agreements, among the parties relating to the subject matter thereof.
1.10.No Control; No Advisory or Fiduciary Responsibility.  Nothing in any Loan Document and no action of Lender pursuant to any Loan Document shall be deemed to constitute control of any Obligor by Lender.  In connection with all aspects of each transaction contemplated by any Loan Document, Borrowers acknowledge and agree that (a)(i) this credit facility and all related services by Lender or its Affiliates are arm’s-length commercial transactions between Borrowers and such Person; (ii) Borrowers have consulted their own legal, accounting, regulatory, tax and other advisors to the extent they have deemed appropriate; and (iii) Borrowers are capable of evaluating, and understand and accept, the terms, risks and conditions of the transactions contemplated by the Loan Documents; (b) each of Lender and its Affiliates is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for Borrowers, their Affiliates or any other Person, and has no obligation with respect to the transactions contemplated by the Loan Documents except as expressly set forth therein; and (c) Lender and its Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of Borrowers and their Affiliates, and have no obligation to disclose any of such interests to Borrowers or their Affiliates.  To the fullest extent permitted by Applicable Law, each Borrower hereby waives and releases any claims that it may have against Lender and its Affiliates with respect to any breach of agency or fiduciary duty in connection with any transaction contemplated by a Loan Document.
1.11.Confidentiality.  Lender agrees to maintain the confidentiality of all Information (as defined below), except that Information may be disclosed (a) to its Affiliates, and its and their partners, directors, officers, employees and Lender Professionals (provided they are informed of the confidential nature of the Information and instructed to keep it confidential); (b) to the extent requested by any governmental, regulatory or self-regulatory authority purporting to have jurisdiction over it or its Affiliates; (c) to the extent required by Applicable Law or by any subpoena or other legal process; (d) to any other party hereto; (e) in connection with any action or proceeding relating to any Loan Documents or Obligations; (f) subject to an agreement containing provisions substantially the same as this Section, to any potential or actual transferee of any interest in a Loan Document or any actual or prospective party (or its advisors) to any Bank Product or to any swap, derivative or other transaction under which payments are to be made by reference to an Obligor or Obligor’s obligations; (g) to the extent such Information is (i) publicly available other than as a result of a breach of this Section, (ii) available to Lender or its Affiliates on a nonconfidential basis from a source other than Borrowers, or (iii) independently discovered or developed by a party hereto without utilizing any Information or violating this Section; (h) on a confidential basis to a provider of a Platform; or (i) with the consent of Borrower Agent.  Borrowers consent to the publication by Lender of customary advertising material relating to transactions contemplated hereby, using the names, product photographs, logos or trademarks of Borrowers and Subsidiaries.  Lender may disclose information regarding this Agreement and the credit facility hereunder to market data collectors, similar service providers to the lending industry, and Lender’s service providers in connection with the Loan Documents and Commitment.  As used herein, “Information” means information received from an Obligor or Subsidiary relating to it or its business, that is identified as confidential when delivered.  A Person required to maintain confidentiality of Information pursuant to this Section shall be deemed to have complied if it exercises a degree of care similar to that accorded its own confidential information.  Lender acknowledges that (i) Information may include material non-public information; (ii) it has developed compliance procedures regarding the use of such information; and (iii) it will handle the material non-public information in accordance with Applicable Law.
1.12.Reserved.  
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1.13.GOVERNING LAW.  UNLESS EXPRESSLY PROVIDED IN ANY LOAN DOCUMENT, THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND ALL CLAIMS SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES EXCEPT FEDERAL LAWS RELATING TO NATIONAL BANKS.
1.14.Consent to Forum
1.1.1.  Forum.  EACH BORROWER HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE COURT SITTING IN NEW YORK COUNTY, NEW YORK, OR THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, IN ANY DISPUTE, ACTION, LITIGATION OR OTHER PROCEEDING RELATING IN ANY WAY TO ANY LOAN DOCUMENTS, AND AGREES THAT ANY DISPUTE, ACTION, LITIGATION OR OTHER PROCEEDING SHALL BE BROUGHT BY IT SOLELY IN ANY SUCH COURT.  EACH BORROWER IRREVOCABLY AND UNCONDITIONALLY WAIVES ALL CLAIMS, OBJECTIONS AND DEFENSES THAT IT MAY HAVE REGARDING ANY SUCH COURT’S PERSONAL OR SUBJECT MATTER JURISDICTION, VENUE OR INCONVENIENT FORUM.  EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH COURTS AND CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 12.3.1.  A final judgment in any proceeding of any such court shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or any other manner provided by Applicable Law.
1.1.2.  Other Jurisdictions.  Nothing herein shall limit the right of Lender to bring proceedings against any Obligor in any other court, nor limit the right of any party to serve process in any other manner permitted by Applicable Law.  Nothing in this Agreement shall be deemed to preclude enforcement by Lender of any judgment or order obtained in any forum or jurisdiction.
1.1.3.  Judicial Reference.  If any action or proceeding relating to any Obligations, Loan Documents or related transaction is filed in a court sitting in or applying the laws of California, the court shall, and is hereby directed to, make a general reference pursuant to Cal. Civ. Proc. Code §638 to a referee (who shall be a single active or retired judge) to hear and determine all issues in the case (whether fact or law) and to report a statement of decision; provided, that (a) at the option of any party to such action or proceeding, any issues pertaining to a “provisional remedy” as defined in Cal. Civ. Proc. Code §1281.8 shall be heard and determined by the court, and (b) Borrowers shall be solely responsible to pay all fees and expenses of the referee.  Nothing in this Section shall limit the right of Lender to exercise self-help remedies, such as setoff, foreclosure or sale of Collateral or to obtain provisional or ancillary remedies from a court of competent jurisdiction before, during or after any judicial reference.  The exercise of a remedy does not waive the right of any party to require judicial reference.  At Lender’s option, foreclosure under a mortgage or deed of trust may be accomplished either by exercise of power of sale thereunder or by judicial foreclosure.
1.15.Waivers by Borrowers.  To the fullest extent permitted by Applicable Law, each Borrower waives (a) the right to trial by jury (which each Secured Party hereby also waives) in any proceeding or dispute of any kind relating in any way to any Loan Documents, Obligations or Collateral; (b) presentment, demand, protest, notice of presentment, default, non-payment, maturity, release, compromise, settlement, extension or renewal of any commercial paper, accounts, documents, instruments, chattel paper and guaranties at any time held by Lender on which a Borrower may in any way be liable, and hereby ratifies anything Lender may do in this regard; (c) notice prior to taking possession or control of any Collateral; (d) any bond or security that might be required by a court prior to allowing Lender to exercise any rights or remedies; (e) the benefit of all valuation, appraisement and exemption laws; (f) any claim against an Indemnitee on any theory of liability, for special, indirect, consequential, exemplary or punitive damages (as opposed to direct or actual damages) in any way relating to any Enforcement Action, Obligations, Loan Documents or transactions relating thereto; and (g) notice of acceptance hereof.  Each Borrower acknowledges that the foregoing waivers are a material 
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inducement to Lender entering into this Agreement and that Lender is relying upon the foregoing in its dealings with Borrowers.  Each Borrower has reviewed the foregoing waivers with its legal counsel and has knowingly and voluntarily waived its jury trial and other rights following consultation with legal counsel.  In the event of litigation, this Agreement may be filed as a written consent to a trial by the court.
1.16.Acknowledgement Regarding Supported QFCs.  To the extent that the Loan Documents provide support, through a guarantee or otherwise, for any Swap or any other agreement or instrument that is a QFC (such support, “QFC Credit Support”, and each such QFC, a “Supported QFC”), the parties acknowledge and agree as follows with respect to the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Loan Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States):
1.1.1.  Covered Party.  If a Covered Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime, transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regimes if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States.  If a Covered Party or BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Loan Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regimes if the Supported QFC and Loan Documents were governed by the laws of the United States or a state of the United States.  Without limitation of the foregoing, it is understood and agreed that rights and remedies of the parties with respect to a defaulting lender shall in no event affect the rights of any Covered Party with respect to a Supported QFC or any QFC Credit Support.
1.1.2.  Definitions.  As used in this Section, (a) “BHC Act Affiliate” means an “affiliate,” as defined in and interpreted in accordance with 12 U.S.C. §1841(k); (b) “Default Right” has the meaning assigned in and interpreted in accordance with 12 C.F.R. §§252.81, 47.2 or 382.1, as applicable; and (c) “QFC” means a “qualified financial contract,” as defined in and interpreted in accordance with 12 U.S.C. §5390(c)(8)(D).
1.17.Patriot Act Notice; Beneficial Ownership Regulation.  Lender hereby notifies Borrowers that pursuant to the Patriot Act, Lender is required to obtain, verify and record information that identifies each Borrower, including its legal name, address, tax ID number and other information that will allow Lender to identify it in accordance with the Patriot Act.  Lender will also require information regarding any personal guarantor and may require information regarding Borrowers’ management and owners, such as legal name, address, social security number and date of birth.  Borrowers shall, promptly upon request, provide all documentation and information as Lender may request from time to time for purposes of complying with any “know your customer,” anti-money laundering or other requirements of Applicable Law, including the Patriot Act and Beneficial Ownership Regulation.
1.18.NO ORAL AGREEMENT.  THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES.  THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE PARTIES.
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[Remainder of page intentionally left blank; signatures begin on following page]
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IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the date set forth above.
						
		LENDER:

BANK OF AMERICA, N.A.

By:  /s/ Susan Freed            
Name: Susan Freed
Title: Senior Vice President
Address:  333 S. Hope Street, 19th Floor
                 Los Angeles, CA 90071
Attention: Asset Based Portfolio Specialist 
                  -Arlo Technologies, Inc.

		

LOAN AND SECURITY AGREEMNENT
(ARLO TECHNOLOGIES, INC.)
SIGNATURE PAGE

						
		BORROWERS:

ARLO TECHNOLOGIES, INC.,
a Delaware corporation

By:  /s/ Gordon Mattingly             
Name:  Gordon Mattingly 
Title:  Chief Financial Officer
Address:    2200 Faraday Avenue Avenue, Suite 150
                  Carlsbad, CA 92008
Attention:  Brian Busse, General Counsel

		

LOAN AND SECURITY AGREEMNENT
(ARLO TECHNOLOGIES, INC.)
SIGNATURE PAGE

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