CREDIT AND SECURITY AGREEMENT by and among RG PARENT LLC, as the Administrative Borrower and a Borrower, the other Borrowers party hereto, the Guarantors party hereto, and WELLS FARGO BANK, NATIONAL ASSOCIATION, as Lender Dated as of January 28, 2016

Exhibit 10.2

[Execution]

CREDIT AND SECURITY AGREEMENT

by and among

RG PARENT LLC,

as the Administrative Borrower and a Borrower,

the other Borrowers party hereto,

the Guarantors party hereto,

and

▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,

as Lender

Dated as of January 28, 2016

TABLE OF CONTENTS

EXHIBITS AND SCHEDULES

CREDIT AND SECURITY AGREEMENT

THIS CREDIT AND SECURITY AGREEMENT (this “Agreement”), is entered into as of January 28, 2016, by and among ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION (“Lender”), DIFFERENTIAL BRANDS GROUP INC., a Delaware corporation formerly known as Joe’s Jeans Inc. (“Parent”), DBG SUBSIDIARY INC., a Delaware corporation formerly known as Joe’s Jeans Subsidiary, Inc. (“DBG”), ▇▇▇▇▇▇ CLOTHING, LLC, a California limited liability company (“▇▇▇▇▇▇”), RG PARENT LLC, a Delaware limited liability company (“RG Parent”), ▇▇▇▇▇▇ ▇▇▇▇▇▇ HOLDINGS, LLC, a New York limited liability company (“RG Holding”), ▇▇▇▇▇▇ ▇▇▇▇▇▇ DESIGNS, LLC, a New York limited liability company (“RG Designs”), ▇▇▇▇▇▇ ▇▇▇▇▇▇ RETAIL LLC, a Delaware limited liability company (“RG Retail” and together with Parent, DBG, ▇▇▇▇▇▇, ▇▇ Parent, RG Holding, RG Designs and each other Subsidiary of Parent that becomes a borrower hereunder, collectively, the “Borrowers”, and each a  “Borrower”), and the Guarantors from time to time party hereto.

The parties agree as follows:

1.            DEFINITIONS AND CONSTRUCTION.

1.1              Definitions, Code Terms, Accounting Terms and Construction.  Capitalized terms used in this Agreement shall have the meanings specified therefor on Schedule 1.1.  Additionally, matters of (i) interpretation of terms defined in the Code, (ii) interpretation of accounting terms and (iii) construction are set forth in Schedule 1.1.

2.            LOANS AND TERMS OF PAYMENT.

2.1              Revolving Loan Advances.

(a)       Subject to the terms and conditions of this Agreement, and during the period from and including the Effective Date to but excluding the Termination Date, Lender agrees to make revolving loans (“Advances”) to Borrowers in an amount at any one time outstanding not to exceed the lesser of:

(i)               the Maximum Revolver Amount less the Letter of Credit Usage at such time, and

(ii)           the Borrowing Base at such time less the Letter of Credit Usage at such time.

(b)      Amounts borrowed pursuant to this Section 2.1 may be repaid and, subject to the terms and conditions of this Agreement, reborrowed at any time during the term of this Agreement.  The outstanding principal amount of the Advances, together with interest accrued and unpaid thereon, shall be due and payable on the Termination Date.

2.2                            Increase in Maximum Revolver Amount.

(a)                               Administrative Borrower may, at any time, deliver a written request to Lender to increase the Maximum Revolver Amount (each such increase in the Maximum Revolver Amount, an “Incremental Increase”).  Any such written request for an Incremental Increase shall specify the amount of such Incremental Increase that Administrative Borrower is requesting, provided, that, (i) in no event shall the aggregate amount of any such Incremental Increases cause the Maximum Revolver Amount to exceed $50,000,000, (ii) any such request shall be for an Incremental Increase of not less than $5,000,000, (iii) any such request shall be irrevocable, and (iv) in no event shall more than one such written request be delivered to Lender in any calendar quarter.

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(b)                              Upon the receipt by Lender of any such written request, Lender shall have the option (but not the obligation) to increase the amount of the Maximum Revolver Amount requested by Administrative Borrower as set forth in the notice to Lender.

(c)                               The Maximum Revolver Amount shall be increased by the amount of the Incremental Increase that Lender confirms in writing to Administrative Borrower so long as:

(i)                                  Lender and Loan Parties shall enter into such amendments to this Agreement and the other Loan Documents to evidence the Incremental Increase, which amendments shall be in form and content satisfactory to Lender and the Loan Parties and may include commitment, upfront, or similar fees to be agreed upon between Lender and Loan Parties;

(ii)                              the conditions precedent to the making of Advances set forth in Section 4.2 shall be satisfied as of the date of the Incremental Increase, both immediately before and immediately after giving effect to such Incremental Increase;

(iii)                          the Loan Parties deliver to Lender any legal opinion of counsel to Loan Parties reasonably requested by Lender, in form and substance and from counsel reasonably satisfactory to Lender, addressing such matters relating to the Incremental Increase as Lender may reasonably request;

(iv)                          to the extent invoiced, there shall have been paid to Lender, for the account of the Lender all fees and reasonable and documented expenses (including reasonable and documented fees and expenses of counsel) due and payable pursuant to any of the Loan Documents on or before the effectiveness of such Incremental Increase; and

(v)                              as of the effective date of any such Incremental Increase, each reference to the term Maximum Revolver Amount herein, and in any of the other Loan Documents shall be deemed amended to mean the amount of the Maximum Revolver Amount specified in the most recent written notice from Lender to Borrowers of such Incremental Increase.

2.3                            Borrowing Procedures.

(a)       Procedure for Borrowing.  Subject to Section 2.3(b) below, each Borrowing shall be made by a written request by an Authorized Person delivered to Lender.  Such written request must be received by Lender no later than 11:00 a.m. (Eastern time) on the Business Day that is the requested Funding Date (or three (3) Business Days prior to the requested Funding Date in the event of a LIBOR Loan) specifying (i) the amount of such Borrowing, (ii) the requested Funding Date, which shall be a Business Day, (iii) if such Borrowing will be by way of Base Rate Loan or LIBOR Loan, and (iv) if such Borrowing will be by way LIBOR Loan, the applicable Interest Period; provided that Lender may, in its sole discretion, elect to accept as timely requests that are received later than 11:00 a.m. (Eastern time) on the applicable Business Day.

At Lender’s election, in lieu of delivering the above-described written request, any Authorized Person may give Lender telephonic notice of such request by the required time.  Lender is authorized to make the Advances, and to issue the Letters of Credit, under this Agreement based upon telephonic or other instructions received from anyone purporting to be an Authorized Person.

(b)      LIBOR Loans.  To the extent permitted hereunder, Administrative Borrower may, from time to time prior to the Termination Date, request LIBOR Loans or may request that Base Rate Loans be converted to LIBOR Loans or that any existing LIBOR Loans continue for an additional Interest Period.  Such request from Administrative Borrower shall specify the applicable Borrower, the amount of the

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LIBOR Loans to be made, the amount of Base Rate Loans to be converted to LIBOR Loans or the amount of the LIBOR Loans to be continued and the Interest Period to be applicable to such LIBOR Loans.  Three (3) Business Days after receipt by Lender of a written notice making such request from or on behalf of a Borrower, such LIBOR Loans shall be made or the Base Rate Loans shall be converted to LIBOR Loans or such LIBOR Loans shall continue, as the case may be.  The making or continuing of LIBOR Loans or the conversion of Base Rate Loans to LIBOR Loans is subject to each of the following conditions (which may be waived or altered by Lender, in its sole discretion):

(i)                                  no Event of Default shall exist or have occurred and be continuing,

(ii)                              no party hereto shall have sent any notice of termination of this Agreement,

(iii)                          no more than 7 Interest Periods (for all outstanding LIBOR Loans) may be in effect at any one time,

(iv)                          the aggregate amount of the LIBOR Loans must be an amount not less than $1,000,000 or an integral multiple of $500,000 in excess thereof, and

(v)                              Lender shall have determined that the Interest Period and LIBOR is available to Lender and can be readily determined as of the date of the request for such LIBOR Loan by Borrowers.

Unless otherwise agreed by Lender, any requests by or on behalf of a Borrower for LIBOR Loans or to convert Base Rate Loans to LIBOR Loans or to continue any existing LIBOR Loans shall be irrevocable.  Notwithstanding anything to the contrary contained herein, Lender shall not be required to purchase US Dollar deposits in the London interbank market to fund or otherwise match fund any LIBOR Loans, but the provisions hereof shall be deemed to apply as if the Lender had purchased such deposits to fund or match fund the LIBOR Loans.

(c)       Automatic Conversion.

(i)                                  Unless otherwise agreed by Lender, any LIBOR Loans shall automatically convert to Base Rate Loans upon the last day of the applicable Interest Period, unless Lender has received a written request under Section 2.3(b) from Administrative Borrower to continue such LIBOR Loan, at least 3 Business Days prior to such last day in accordance with the terms hereof.

(ii)                              Any LIBOR Loans shall, at Lender’s option, upon notice by Lender to Administrative Borrower, be converted to Base Rate Loans, if any Default or Event of Default has occurred and is continuing and otherwise upon the Termination Date (if not repaid in accordance with the terms of this Agreement).

(d)      In connection with each LIBOR Loan, each Borrower shall indemnify, defend, and hold Lender harmless against any loss, cost, or expense actually incurred by Lender as a result of (A) the payment of any principal other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (B) the conversion of any Loan other than on the last day of the Interest Period applicable thereto, or (C) the failure to borrow, convert, continue or prepay any Loan on the date specified in any notice delivered pursuant hereto. A certificate of Lender delivered to Administrative Borrower setting forth in reasonable detail any amount or amounts that Lender is entitled to receive pursuant to this Section shall be conclusive absent manifest error. Borrowers shall pay such amount to Lender within 30 days of the date of its receipt of such certificate.

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(e)       Making of Loans.  Promptly after receipt of a request for a Borrowing pursuant to Section 2.3(a) and subject to Section 2.3(b), Lender shall make the proceeds thereof available to the applicable Borrower on the applicable Funding Date by transferring immediately available funds equal to such amount to the Designated Account or such other accounts or accounts specified by Administrative Borrower; provided, however, that, Lender shall not have the obligation to make any Advance if (i) 1 or more of the applicable conditions precedent set forth in Section 4 will not be satisfied on the requested Funding Date for the applicable Borrowing unless such condition has been waived by Lender, or (ii) the requested Borrowing would exceed the Availability on such Funding Date.

(f)        [Reserved].

(g)       Protective Advances.  Lender may make an Advance for any reason at any time in its Permitted Discretion, without Borrowers’ compliance with any of the conditions of this Agreement, and disburse the proceeds directly to third Persons in order to protect Lender’s interest in the Collateral or to perform any obligation of Borrowers under this Agreement or otherwise to enhance the likelihood of repayment of the Obligations (such Advance, a “Protective Advance”).

2.4              Payments; Prepayments.

(a)       Payments by Borrowers.  Except as otherwise expressly provided herein, all payments by Borrowers to Lender under the Loan Documents shall be made to Lender’s Account unless otherwise directed by Lender or as otherwise specified in the applicable Cash Management Documents.

(b)      Payments by Account Debtors. Subject to Factor’s rights under the Factoring Agreements and subject to the exceptions set forth in Section 6.12, Borrowers shall instruct all Account Debtors and Factor to make payments either directly to a Loan Party for deposit by such Loan Party directly to a Collection Account, or instruct them to deliver such payments directly to a Collection Account. If any Loan Party receives a payment of the Proceeds of Collateral directly, such Loan Party will promptly (but in no event later than the third Business Day after the date of receipt thereof, or such longer period as Lender agrees) deposit the payment or Proceeds into a Collection Account; provided, that the foregoing shall not be applicable to (i) ▇▇▇▇▇ cash not in excess of $250,000 in the aggregate held at retail stores of Parent or any of its Subsidiaries, (ii) cash or Cash Equivalents (or amounts on deposit in any Deposit Account or Securities Account) reasonably expected by the Borrowers to be used to pay any taxes required to be paid or incurred in connection with any transaction consummated pursuant to the Asset Purchase Agreements, (iii) Term Priority Collateral, (iv) aggregate amounts of not more than $250,000 with respect to any single Deposit Account of any Loan Party or $500,000 with respect to all Deposit Accounts of the Loan Parties, (v) amounts deposited into any Excluded Account, (vi) any amounts in the Treasury Shares Account and (vii) proceeds of an Advance or Term Loan. Until so deposited, such Borrower will hold all such payments and Proceeds in trust for Lender without commingling with other funds or property.

(c)       Optional Prepayments.  The Borrowers shall have the right at any time and from time to time to prepay any outstanding Advances in whole or in part and without premium or penalty, subject to Lender’s receipt of prior written notice of such prepayment from Administrative Borrower at least one Business Day prior to such prepayment, and subject to Section 2.3(d) in the case of LIBOR Loans.

(d)      Crediting Payments. For purposes of calculating Availability and the accrual of interest on outstanding Obligations, unless otherwise provided in the applicable Cash Management Documents or as otherwise agreed between Administrative Borrower and Lender, each payment shall be applied to the applicable Obligations (i) if received during a Cash Dominion Trigger Period, as of the Business Day of deposit to the Collection Account of immediately available funds during regular business hours or (ii) at

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all other times, upon the receipt of immediately available funds by Lender. Any payment received by Lender that is not a transfer of immediately available funds shall be considered provisional until the item or items representing such payment have been finally paid under applicable law. Should any payment item not be honored when presented for payment, then Borrowers shall be deemed not to have made such payment, and that portion of Borrowers’ outstanding Obligations corresponding to the amount of such dishonored payment item shall be deemed to bear interest as if the dishonored payment item had never been received by Lender.

(e)       Application of Payments.  Any proceeds of Collateral received by Lender (i) not constituting either (A) a specific payment of principal, interest, fees or other sum payable under the Loan Documents (which, if no Event of Default exists and if otherwise permitted under this Agreement, shall be applied as specified by the Administrative Borrower) or (B) a mandatory prepayment (which shall be applied in accordance with Section 2.4(g)) or (ii) while an Event of Default exists if Lender so elects at its sole discretion, shall be applied first, to pay any fees, indemnities, or expense reimbursements, including amounts then due to Lender from any Borrower under this Agreement, second, to pay interest due in respect of any Overadvance Amount or Protective Advances, third, to pay the principal of any Overadvance Amount or Protective Advances, fourth, to pay interest then due and payable on the outstanding Advances (other than the Overadvance Amount and Protective Advances), fifth, to prepay principal on the outstanding Advances (other than the Overadvance Amount and Protective Advances) and unreimbursed Letter of Credit Disbursements ratably, sixth, to pay an amount to Lender equal to one hundred five percent (105%) of the aggregate Letter of Credit Usage, to be held as cash collateral for such Obligations, seventh, to payment of any amounts owing with respect to Cash Management Services and Hedge Obligations, and eighth, to the payment of any other Obligations due to Lender by any Loan Party.  Notwithstanding the foregoing, proceeds of Collateral received by Lender from any Loan Party shall not be applied to any Excluded Hedge Obligation of such Loan Party.

(f)        [Reserved].

(g)       Mandatory Prepayments.  If, at any time, the Revolver Usage exceeds (A) the Borrowing Base or (B) the Maximum Revolver Amount at such time (such excess amount being referred to as the “Overadvance Amount”), then Borrowers shall promptly upon demand by Lender prepay the Advances in an aggregate amount equal to the Overadvance Amount.  If payment in full of the outstanding Advances is insufficient to eliminate the Overadvance Amount and Letter of Credit Usage continues to exceed the Borrowing Base, Borrowers shall maintain Letter of Credit Collateralization of the outstanding Letter of Credit Usage in an amount equal to 105% of such excess until no Overadvance Amount exists. Lender shall not be obligated to provide any Advances during any period that an Overadvance Amount is outstanding.

2.5              Reserves.

(a)       The initial Reserves as of the Closing Date are those set forth in the Borrowing Base Certificate delivered to Lender on the Closing Date pursuant to Section 4.1.

(b)      Lender may hereafter establish additional Reserves or change any of the Reserves in effect on the Closing Date in the exercise of its Permitted Discretion; provided, that, such Reserves shall not be established or changed except upon not less than three (3) Business Days’ prior written notice to the Administrative Borrower (during which period Lender shall be available to discuss such proposed additions or changes with the Administrative Borrower); provided, further, that no such prior notice shall be required (1) if an Event of Default has occurred and is continuing, (2) for changes to any Reserves resulting solely from mathematical calculations of the amount of the Reserve in accordance with the methodology of calculation previously utilized (including, but not limited to, as the result of new

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appraisals or examinations of Collateral or changes in rent amounts) or (3) if any event or circumstance occurs that Lender in good faith believes may impair the Borrowers’ prospect of payment of all or part of the Obligations were such additions or changes to the Reserves not made prior to the expiration of such notice period. Upon delivery of a notice described above, the Loan Parties may take such action as may be required so that the event, condition, circumstance or new fact that is the basis for such Reserve or increase no longer exists, in a manner and to the extent satisfactory to Lender in its Permitted Discretion.

(c)       The amount of any Reserve established by Lender shall have a reasonable relationship as determined by Lender in its Permitted Discretion to the event, condition or other matter that is the basis for such Reserve. Notwithstanding anything herein to the contrary, (i) a Reserve shall not be established to the extent it is duplicative of any specific item excluded as ineligible in the definitions of Eligible Credit Card Receivables, Eligible Inventory, Eligible Wholesale Inventory, Eligible Retail Inventory and Eligible Accounts, and (ii) circumstances, conditions, events or contingencies existing or arising prior to the Closing Date of which Lender had knowledge as of the Closing Date shall not be the basis for the establishment of Reserves unless Lender establishes such Reserves on or prior to the Closing Date or such circumstances, conditions, events or contingencies shall have changed since the Closing Date.

2.6              Interest Rates: Rates, Payments, and Calculations.

(a)       Interest Rates.  Except as provided in Section 2.6(b), the principal amount of all outstanding Advances shall bear interest on the Daily Balance thereof at a per annum rate equal to the Interest Rate plus the Applicable Margin.

(b)      Default Rate.  Upon the occurrence and during the continuation of an Event of Default and at any time following the Termination Date, in each case at the discretion of Lender by notice to the Administrative Borrower (which notice may be revoked by Lender at its option),

(i)               the principal amount of all outstanding Advances or other amounts outstanding hereunder shall bear interest at a per annum rate equal to two (2) percentage points above the per annum rate otherwise applicable thereto hereunder, and

(ii)           the Letter of Credit fee provided for in Section 2.12 shall be increased by two (2) percentage points above the per annum rate otherwise applicable hereunder.

For avoidance of doubt, Lender may assess such default rate commencing on the date of the occurrence of an Event of Default irrespective of the date of reporting or declaration of such Event of Default.

(c)       Payment.  Except to the extent provided to the contrary in Section 2.12 or otherwise herein, all interest, all Letter of Credit fees and all other fees and reimbursements (to the extent invoiced) payable hereunder or under any of the other Loan Documents shall be due and payable, in arrears, on the first Business Day of each month. Each Borrower hereby authorizes Lender, from time to time with notice to Borrowers, to charge (i) all interest, Letter of Credit fees and all Unused Fees payable hereunder (in each case, as and when due and payable), and (ii) to the extent not paid by a Borrower when due and payable following notice by Lender, all costs and expenses payable hereunder or under any of the other Loan Documents (in each case, as and when due and payable), all Lender Expenses (as and when due and payable), and all other fees and costs provided for in Section 2.12 (as and when accrued or incurred), and all other payment obligations as and when due and payable under any Loan Document or any Bank Product Agreement (including any amounts due and payable to any Bank Product Provider in respect of Bank Products that the Borrowers have not otherwise made payment of or provided for), in each case to the Loan Account, which amounts shall thereupon constitute Advances hereunder and, shall accrue interest at the rate then applicable to Advances that are Base Rate Loans. Any interest, fees, costs,

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expenses, Lender Expenses, or other amounts payable hereunder or under any other Loan Document or under any Bank Product Agreement that are charged to the Loan Account as provided in this paragraph shall thereafter constitute Advances hereunder and shall accrue interest at the rate then applicable to Advances that are Base Rate Loans.

(d)      Computation.  All interest and fees chargeable under the Loan Documents shall be computed on the basis of a 360 day year, in each case, for the actual number of days elapsed in the period during which the interest or fees accrue.  In the event the Interest Rate is changed from time to time hereafter, the rates of interest hereunder based upon the Interest Rate automatically and immediately shall be increased or decreased by an amount equal to such change in the Interest Rate.

(e)       Intent to Limit Charges to Maximum Lawful Rate.  In no event shall the interest  rate or rates payable under this Agreement, plus any other amounts paid in connection herewith, exceed the highest rate permissible under any law that a court of competent jurisdiction shall, in a final determination, deem applicable.  Borrowers and Lender, in executing and delivering this Agreement, intend legally to agree upon the rate or rates of interest and manner of payment stated within it; provided, however, that, anything contained herein to the contrary notwithstanding, if said rate or rates of interest or manner of payment exceeds the maximum allowable under applicable law, then, as of the date of this Agreement, Borrowers are and shall be liable only for the payment of such maximum amount as is allowed by law, and payment received from Borrowers in excess of such legal maximum, whenever received, shall be applied to reduce the principal balance of the Obligations to the extent of such excess.

2.7              Designated Account.  Each Borrower receiving proceeds of Advances agrees to establish and maintain one or more Designated Accounts, each in the name of such Borrower, for the purpose of receiving the proceeds of the Advances requested by such Borrower and made by Lender hereunder.  Unless otherwise specified by Administrative Borrower, any Advance requested by or on behalf of a Borrower and made by Lender hereunder shall be made to the applicable Designated Account.

2.8              Maintenance of Loan Account; Statements of Obligations.  Lender shall maintain an account on its books in the name of Borrowers (the “Loan Account”) in which will be recorded all Advances made by Lender to Borrowers or for Borrowers’ account, the Letters of Credit issued or arranged by Lender for Borrowers’ account, and all other payment Obligations hereunder or under the other Loan Documents and to the extent payment is charged to the Loan Account, for payments under Bank Product Agreements, including accrued interest, fees and expenses, and Lender Expenses. In accordance with Section 2.4 and Section 2.6, the Loan Account will be credited with all payments received by Lender from Borrowers or for Borrowers’ account.  Lender shall deliver to Administrative Borrower, or make available to Administrative Borrower electronically, monthly statements regarding the Loan Account, including with respect to principal, interest, fees, and including an itemization of all charges and expenses constituting Lender Expenses owing, and such monthly statements shall be subject to subsequent adjustment by Lender as provided in this Agreement upon notice to Borrowers but shall, absent manifest error, be conclusively presumed to be correct and accurate and constitute an account stated between Borrowers and Lender unless, within 30 days after receipt thereof by Borrowers, Borrowers shall deliver to Lender written objection thereto describing the error or errors contained in any such statements.

2.9              Termination Date; Optional Reduction and Termination of Commitments.

(a)       Lender’s obligations under this Agreement shall continue in full force and effect for a term ending on the earliest of (i) the Maturity Date or (ii) the date Borrowers terminate the Revolving Credit Facility pursuant to Section 2.9(b) or (iii) the date the Revolving Credit Facility terminates pursuant to Sections 10.1 or 10.2 following an Event of Default (the earliest of these dates, the

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“Termination Date”).  The foregoing notwithstanding, Lender shall have the right to terminate its obligations under this Agreement immediately and without notice upon the occurrence and during the continuation of an Event of Default.  Each Borrower jointly and severally promises to pay the Obligations (including principal, interest, fees, costs, and expenses, including Lender Expenses) in full on the Termination Date (other than the Hedge Obligations, which shall be paid in accordance with the applicable Hedge Agreement).

(b)      The Administrative Borrower shall have the right to permanently reduce the Maximum Revolver Amount hereunder (each such decrease of the Maximum Revolver Amount, an “Incremental Decrease”) or terminate the Revolving Credit Facility and Lender’s commitment to make Advances hereunder (a “Borrower Termination”), in each case, without premium or penalty, upon Administrative Borrower’s written notice to Lender at least three (3) Business Days prior to the effective date of such Incremental Decrease or Borrower Termination, specifying such election and the effective date thereof; provided, that (i) in no event shall the aggregate amount of any Incremental Decreases cause the Maximum Revolver Amount to fall below $10,000,000, except in the case of a Borrower Termination, (ii) no individual Incremental Decrease shall be in an amount less than $5,000,000, (iii) each Incremental Decrease shall be in increments of $1,000,000, (iv) in no event shall more than two (2) notices of Incremental Decrease be delivered to Lender during the term of this Agreement, and (v) except as expressly provided in the following sentence, each notice delivered pursuant to this Section 2.9(b) shall be irrevocable. Any written notice of Incremental Decrease or Borrower Termination delivered by the Administrative Borrower to Lender may state that such reduction or termination is conditioned upon the effectiveness of other credit facilities or another transaction, in which case such notice may be revoked by the Administrative Borrower without premium or penalty by written notice to Lender on or prior to the specified effective date if such condition is not satisfied.

2.10      Effect of Maturity; Releases.

(a)       On the Termination Date, all obligations of Lender to provide additional credit hereunder shall automatically be terminated and all of the Obligations (other than Bank Product Obligations which shall be terminated in accordance with the applicable Bank Product Agreement) shall immediately become due and payable without notice or demand and Borrowers shall immediately repay all of such Obligations in full.  No termination of the obligations of Lender (other than cash payment in full of the Obligations (other than (x) obligations under Bank Product Obligations and (y) contingent indemnification obligations not yet accrued and payable) and termination of the obligations of Lender to provide additional credit hereunder) shall relieve or discharge any Loan Party of its duties, obligations, or covenants hereunder or under any other Loan Document and Lender’s Liens in the Collateral shall continue to secure the Obligations and shall remain in effect until all Obligations (other than (x) obligations under Bank Product Obligations and (y) contingent indemnification obligations not yet accrued and payable) have been paid in full in cash and Lender’s obligations to provide additional credit hereunder shall have been terminated.  Lender shall, at Borrowers’ expense, release or terminate any filings or other agreements that perfect the Lender’s Liens in the Collateral, upon Lender’s receipt of each of the following, in form and content reasonably satisfactory to Lender: (i) cash payment in full of all Obligations in good and available funds (including Hedge Obligations subject, however, to the next sentence and including Letter of Credit Collateralization with respect to all outstanding Letter of Credit Usage), (ii) evidence that any obligation of Lender to make Advances to any Borrower or provide any further credit to any Borrower hereunder has been terminated, and (iii) an agreement by each Borrower and each Guarantor to indemnify Lender and its Affiliates for any payments received by Lender or its Affiliates that are applied to the Obligations as a final payoff that may subsequently be returned or otherwise not paid for any reason.  With respect to any outstanding Hedge Obligations which are not so paid in full, the Bank Product Provider may require Borrowers to cash collateralize the then existing Hedge Obligations in an amount acceptable to Lender (provided that a cash collateralization in an amount

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equal to 105% of the then existing Hedge Obligations shall be deemed acceptable to Lender) prior to releasing or terminating any filings or other agreements that perfect the Lender’s Liens in the Collateral.

(b)      If any of the Collateral shall be sold, transferred or otherwise disposed of by any Loan Party to a Person that is not a Loan Party in a transaction expressly permitted by this Agreement, then such Collateral shall be automatically released from the Liens created by the Loan Documents without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to such Loan Party or its transferee, as the case may be, and Lender, at the request of Administrative Borrower and the sole expense of such Loan Party, shall execute and deliver to such Loan Party all releases or other documents reasonably necessary to evidence the release of the Liens created by the Loan Documents on such Collateral.  In the event that all of the Stock of a Loan Party shall be sold, transferred or otherwise disposed of to a Person that is not a Loan Party in a transaction that is expressly permitted by this Agreement, then at the request of Administrative Borrower and the sole expense of Borrowers, Lender shall release such Loan Party from its obligations under the Loan Documents and shall execute and deliver to such Loan Party all releases or other documentation reasonably necessary to evidence such release.

2.11      [Reserved].

2.12      Fees.  Borrowers shall pay to Lender the fees set forth on Schedule 2.12 attached hereto at the times set forth therein.

2.13      Letters of Credit.

(a)       Subject to the terms and conditions of this Agreement, upon the request of a Borrower made in accordance herewith, Lender agrees to issue a requested Letter of Credit for the account of such Borrower.  By submitting a request to Lender for the issuance of a Letter of Credit, such Borrower shall be deemed to have requested that Lender issue the requested Letter of Credit.  Each request for the issuance of a Letter of Credit, or the amendment, renewal, or extension of any outstanding Letter of Credit, shall be irrevocable and shall be made in writing by an Authorized Person and delivered to Lender via telefacsimile, or other electronic method of transmission reasonably acceptable to Lender and reasonably in advance of the requested date of issuance, amendment, renewal, or extension.  Each such request shall be in form reasonably satisfactory to Lender, and (i) shall specify (A) the amount of such Letter of Credit, (B) the date of issuance, amendment, renewal, or extension of such Letter of Credit, (C) the proposed expiration date of such Letter of Credit, (D) the name and address of the beneficiary of the Letter of Credit, and (E) such other information (including, the conditions to drawing, and, in the case of an amendment, renewal, or extension, identification of the Letter of Credit to be so amended, renewed, or extended) as shall be necessary to prepare, amend, renew, or extend such Letter of Credit, and (ii) shall be accompanied by such Letter of Credit Agreements as Lender may request or require, to the extent that such requests or requirements are consistent with the Letter of Credit Agreements that Lender generally requests for Letters of Credit in similar circumstances. Lender’s records of the content of any such request will be conclusive.

(b)      Lender shall have no obligation to issue, amend or extend a Letter of Credit if after giving effect to the requested issuance, amendment, renewal or extension the Letter of Credit Usage would exceed:

(i)                                  the lesser of (x) the Borrowing Base less the outstanding amount of Advances and (y) the Maximum Revolver Amount less the outstanding amount of Advances, or

(ii)                              $7,500,000.

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(c)       Lender shall have no obligation to issue a Letter of Credit if (i) any order, judgment, or decree of any Governmental Authority or arbitrator shall, by its terms, purport to enjoin or restrain Lender from issuing such Letter of Credit or any law applicable to Lender or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over Lender shall prohibit or request that Lender refrain from the issuance of letters of credit generally or such Letter of Credit in particular, or (ii) the issuance of such Letter of Credit would violate one or more policies of Lender applicable to letters of credit generally.

(d)      Each Letter of Credit shall be in form reasonably acceptable to Lender, including the requirement that the amounts payable thereunder must be payable in Dollars, and, unless otherwise agreed by Lender, shall expire on a date no more than 12 months after the date of issuance or last renewal of such Letter of Credit, which date shall be no later than the Maturity Date. If Lender makes a payment under a Letter of Credit, Borrowers shall pay the Lender an amount equal to the applicable Letter of Credit Disbursement on the Business Day such Letter of Credit Disbursement is made and, in the absence of such payment, the amount of the Letter of Credit Disbursement immediately and automatically shall be deemed to be an Advance hereunder (notwithstanding any failure to satisfy any condition precedent set forth in Section 4 or this Section 2.13) and, initially, shall bear interest at the rate then applicable to Advances.  If a Letter of Credit Disbursement is deemed to be an Advance hereunder, Borrowers’ obligation to pay the amount of such Letter of Credit Disbursement to Lender shall be automatically converted into an obligation to pay Lender such resulting Advance.

(e)       Each Borrower agrees to indemnify, defend and hold harmless Lender (including its branches and Affiliates) and each such Person’s respective directors, officers, employees, attorneys and agents (each, a “Letter of Credit Related Person”) (to the fullest extent permitted by law) from and against any and all claims, demands, suits, actions, investigations, proceedings, liabilities, fines, costs, penalties, and damages, and all reasonable fees and disbursements of attorneys, experts, or consultants and all other costs and expenses actually incurred in connection therewith or in connection with the enforcement of this indemnification (as and when they are incurred and irrespective of whether suit is brought), which may be incurred by or awarded against any such Letter of Credit Related Person (other than Taxes, which shall be governed by Section 16) (the “Letter of Credit Indemnified Costs”), and which arise out of or in connection with, or as a result of: (i) any Letter of Credit or any pre-advice of its issuance; (ii) any transfer, sale, delivery, surrender or endorsement of any Drawing Document at any time(s) held by any such Letter of Credit Related Person in connection with any Letter of Credit; (iii) any action or proceeding arising out of, or in connection with, any Letter of Credit (whether administrative, judicial or in connection with arbitration), including any action or proceeding to compel or restrain any presentation or payment under any Letter of Credit, or for the wrongful dishonor of, or honoring a presentation under, any Letter of Credit; (iv) any independent undertakings issued by the beneficiary of any Letter of Credit; (v) any unauthorized instruction or request made to Lender in connection with any Letter of Credit or requested Letter of Credit or error in computer or electronic transmission; (vi) an adviser, confirmer or other nominated person seeking to be reimbursed, indemnified or compensated; (vii) any third party seeking to enforce the rights of an applicant, beneficiary, nominated person, transferee, assignee of Letter of Credit proceeds or holder of an instrument or document; (viii) the fraud, forgery or illegal action of parties other than the Letter of Credit Related Person; (ix) Lender’s performance of the obligations of a confirming institution or entity that wrongfully dishonors a confirmation; or (x) the acts or omissions, whether rightful or wrongful, of any present or future de jure or de facto governmental or regulatory authority or cause or event beyond the control of the Letter of Credit Related Person; in each case, including that resulting from the Letter of Credit Related Person’s own negligence; provided, however,  that such indemnity shall not be available to any Letter of Credit Related Person claiming indemnification under clauses (i) through (x) above to the extent that such Letter of Credit Indemnified Costs may be finally determined in a final, non-appealable judgment of a court of competent jurisdiction to have resulted directly from the bad faith, gross negligence or willful misconduct of the Letter of Credit Related

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Person claiming indemnity.  Borrowers hereby agree to pay the Letter of Credit Related Person claiming indemnity on demand from time to time all amounts owing under this Section 2.13(e).  If and to the extent that the obligations of Borrowers under this Section 2.13(e) are unenforceable for any reason, Borrowers agree to make the maximum contribution to the Letter of Credit Indemnified Costs permissible under applicable law.  This indemnification provision shall survive termination of this Agreement and all Letters of Credit.

(f)        The liability of Lender (or any other Letter of Credit Related Person) under, in connection with or arising out of any Letter of Credit (or pre-advice), regardless of the form or legal grounds of the action or proceeding, shall be limited to direct damages suffered by Borrowers that are caused directly by Lender’s bad faith, gross negligence or willful misconduct in (i) honoring a presentation under a Letter of Credit that on its face does not at least substantially comply with the terms and conditions of such Letter of Credit, (ii) failing to honor a presentation under a Letter of Credit that strictly complies with the terms and conditions of such Letter of Credit or (iii) retaining Drawing Documents presented under a Letter of Credit. Lender shall be deemed to have acted with due diligence and reasonable care if Lender’s conduct is in accordance with Standard Letter of Credit Practice or in accordance with this Agreement.  Borrowers’ aggregate remedies against Lender and any Letter of Credit Related Person for wrongfully honoring a presentation under any Letter of Credit or wrongfully retaining honored Drawing Documents shall in no event exceed the aggregate amount paid by Borrowers to Lender in respect of the honored presentation in connection with such Letter of Credit under Section 2.13(d), plus interest at the rate then applicable to Advances hereunder.  Borrowers shall take action to avoid and mitigate the amount of any damages claimed against Lender or any other Letter of Credit Related Person, including by enforcing its rights against the beneficiaries of the Letters of Credit.  Any claim by Borrowers under or in connection with any Letter of Credit shall be reduced by an amount equal to the sum of (x) the amount (if any) saved by Borrowers as a result of the breach or alleged wrongful conduct complained of; and (y) the amount (if any) of the loss that would have been avoided had Borrowers taken all reasonable steps to mitigate any loss, and in case of a claim of wrongful dishonor, by specifically and timely authorizing Lender to effect a cure.

(g)       Borrowers are responsible for preparing or approving the final text of the Letter of Credit as issued by Lender, irrespective of any assistance Lender may provide such as drafting or recommending text or by Lender’s use or refusal to use text submitted by Borrowers.  Borrowers are solely responsible for the suitability of the Letter of Credit for Borrowers’ purposes.  With respect to any Letter of Credit containing an “automatic amendment” to extend the expiration date of such Letter of Credit, Lender, in its sole and absolute discretion, may give notice of nonrenewal of such Letter of Credit and, if Borrowers do not at any time want such Letter of Credit to be renewed, Borrowers will so notify Lender at least 15 calendar days before Lender is required to notify the beneficiary of such Letter of Credit or any advising bank of such nonrenewal pursuant to the terms of such Letter of Credit.

(h)      Borrowers’ reimbursement and payment obligations under this Section 2.13 are absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever, including: (i) any lack of validity, enforceability or legal effect of any Letter of Credit or this Agreement or any term or provision therein or herein; (ii) payment against presentation of any draft, demand or claim for payment under any Drawing Document that does not comply in whole or in part with the terms of the applicable Letter of Credit or which proves to be fraudulent, forged or invalid in any respect or any statement therein being untrue or inaccurate in any respect, or which is signed, issued or presented by a Person or a transferee of such Person purporting to be a successor or transferee of the beneficiary of such Letter of Credit; (iii) Lender or any of its branches or Affiliates being the beneficiary of any Letter of Credit; (iv) Lender or any correspondent honoring a drawing against a Drawing Document up to the amount available under any Letter of Credit even if such Drawing Document claims an amount in excess of the amount available under the Letter of

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Credit; (v) the existence of any claim, set-off, defense or other right that any Borrower or any of its Subsidiaries may have at any time against any beneficiary, any assignee of proceeds, Lender or any other Person; (vi) any other event, circumstance or conduct whatsoever, whether or not similar to any of the foregoing that might, but for this Section 2.13(h), constitute a legal or equitable defense to or discharge of, or provide a right of set-off against, any Borrower’s or any of its Subsidiaries’ reimbursement and other payment obligations and liabilities, arising under, or in connection with, any Letter of Credit, whether against Lender, the beneficiary or any other Person; or (vii) the fact that any Default or Event of Default shall have occurred and be continuing; provided, however, that subject to Section 2.13(f) above, the foregoing shall not release Lender from such liability to Borrowers as may be finally determined in a final, non-appealable judgment of a court of competent jurisdiction against Lender following reimbursement or payment of the obligations and liabilities, including reimbursement and other payment obligations, of Borrowers to Lender arising under, or in connection with, this Section 2.13 or any Letter of Credit.

(i)          Without limiting any other provision of this Agreement, Lender and each other Letter of Credit Related Person (if applicable) shall not be responsible to Borrowers for, and Lender’s rights and remedies against Borrowers and the obligation of Borrowers to reimburse Lender for each drawing under each Letter of Credit shall not be impaired by: (i) honor of a presentation under any Letter of Credit that on its face substantially complies with the terms and conditions of such Letter of Credit, even if the Letter of Credit requires strict compliance by the beneficiary; (ii) honor of a presentation of any Drawing Document that appears on its face to have been signed, presented or issued (A) by any purported successor or transferee of any beneficiary or other Person required to sign, present or issue such Drawing Document or (B) under a new name of the beneficiary; (iii) acceptance as a draft of any written or electronic demand or request for payment under a Letter of Credit, even if nonnegotiable or not in the form of a draft or notwithstanding any requirement that such draft, demand or request bear any or adequate reference to the Letter of Credit; (iv) the identity or authority of any presenter or signer of any Drawing Document or the form, accuracy, genuineness or legal effect of any Drawing Document (other than Lender’s determination that such Drawing Document appears on its face substantially to comply with the terms and conditions of the Letter of Credit); (v) acting upon any instruction or request relative to a Letter of Credit or requested Letter of Credit that Lender in good faith believes to have been given by a Person authorized to give such instruction or request; (vi) any errors, omissions, interruptions or delays in transmission or delivery of any message, advice or document (regardless of how sent or transmitted) or for errors in interpretation of technical terms or in translation or any delay in giving or failing to give notice to Borrowers; (vii) any acts, omissions or fraud by, or the insolvency of, any beneficiary, any nominated person or entity or any other Person or any breach of contract between any beneficiary and any Borrower or any of the parties to the underlying transaction to which the Letter of Credit relates; (viii) assertion or waiver of any provision of the ISP or UCP 600 that primarily benefits an issuer of a letter of credit, including any requirement that any Drawing Document be presented to it at a particular hour or place; (ix) payment to any paying or negotiating bank (designated or permitted by the terms of the applicable Letter of Credit) claiming that it rightfully honored or is entitled to reimbursement or indemnity under Standard Letter of Credit Practice applicable to it; (x) acting or failing to act as required or permitted under Standard Letter of Credit Practice applicable to where Lender has issued, confirmed, advised or negotiated such Letter of Credit, as the case may be; (xi) honor of a presentation after the expiration date of any Letter of Credit notwithstanding that a presentation was made prior to such expiration date and dishonored by Lender if subsequently Lender or any court or other finder of fact determines such presentation should have been honored; (xii) dishonor of any presentation that does not strictly comply or that is fraudulent, forged or otherwise not entitled to honor; or (xiii) honor of a presentation that is subsequently determined by Lender to have been made in violation of international, federal, state or local restrictions on the transaction of business with certain prohibited Persons.

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(j)          Each Borrower acknowledges and agrees that any and all documented and reasonable fees, charges, costs or commissions in effect from time to time imposed by, and any and all documented and reasonable out-of-pocket expenses incurred by, Lender, or by any adviser, confirming institution or entity or other nominated Person relating to Letters of Credit, at the time of issuance of any Letter of Credit and upon the occurrence of any other activity with respect to any Letter of Credit (including transfers, assignment of proceeds, amendments, drawings, renewals or cancellations), shall be non-refundable Lender Expenses for purposes of this Agreement and shall be reimbursable promptly by Borrowers to Lender.

(k)      If by reason of (i) any change after the Closing Date in any applicable law, treaty, rule, or regulation or any change in the interpretation or application thereof by any Governmental Authority, or (ii) compliance by Lender with any direction, request, or requirement (irrespective of whether having the force of law) of any Governmental Authority or monetary authority including, Regulation D of the Board of Governors as from time to time in effect (and any successor thereto): (i) any reserve, deposit, or similar requirement is or shall be imposed or modified in respect of any Letter of Credit issued or caused to be issued hereunder or hereby, or (ii) there shall be imposed on Lender any other condition regarding any Letter of Credit,  and the result of the foregoing is to increase, directly or indirectly, the cost to Lender of issuing, making, participating in, or maintaining any Letter of Credit or to reduce the amount receivable in respect thereof, then, and in any such case, Lender may, at any time within a reasonable period after the additional cost is incurred or the amount received is reduced, notify Borrowers, and Borrowers shall pay within 30 days after demand therefor, such amounts as Lender may specify to be necessary to compensate Lender for such additional cost or reduced receipt, together with interest on such amount from the date of such demand until payment in full thereof at the rate then applicable to Advances hereunder; provided, that (A) Borrowers shall not be required to provide any compensation pursuant to this Section 2.13(k) for any such amounts incurred more than 180 days prior to the date on which the demand for payment of such amounts is first made to Borrowers, and (B) if an event or circumstance giving rise to such amounts is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.  The determination by Lender of any amount due pursuant to this Section 2.13(k), as set forth in a certificate setting forth the calculation thereof in reasonable detail, shall, in the absence of manifest or demonstrable error, be final and conclusive and binding on all of the parties hereto.

(l)          Unless otherwise expressly agreed by Lender and Borrowers, when a Letter of Credit is issued, (i) the rules of the ISP and UCP 600 shall apply to each standby Letter of Credit, and (ii) the rules of UCP 600 shall apply to each commercial Letter of Credit.

(m)  In the event of a direct conflict between the provisions of this Section 2.13 and any provision contained in any Letter of Credit Agreement, it is the intention of the parties hereto that such provisions be read together and construed, to the fullest extent possible, to be in concert with each other.  In the event of any actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms and provisions of this Section 2.13 shall control and govern.

2.14      Special Provisions Applicable to LIBOR and Daily Three Month LIBOR Interest Rates.

(a)       Increased Costs.   If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, 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 the LIBOR and Daily Three Month LIBOR Interest Rates);

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(ii) subject any recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or

(iii) impose on Lender or the London interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or Loans made by Lender or any Letter of Credit;

and the result of any of the foregoing shall be to increase the cost to Lender of making, converting to, continuing or maintaining any Loan or of maintaining its obligation to make any such Loan, or to increase the cost to Lender of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by Lender (whether of principal, interest or any other amount) then, upon request of Lender to Administrative Borrower (accompanied by reasonable back-up documentation therefor), the Borrowers will pay to Lender such additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered.

(b)      Illegality; Impracticability.  In the event that (i) any change in market conditions or any law, regulation, treaty, or directive, or any change therein or in the interpretation or application thereof shall at any time after the date hereof make it unlawful or impractical for Lender to fund or maintain extensions of credit with interest based upon LIBOR or Daily Three Month LIBOR or to continue such funding or maintaining, or to determine or charge interest rates based upon LIBOR or Daily Three Month LIBOR, (ii) Lender determines that by reasons affecting the London Interbank Eurodollar market, adequate and reasonable means do not exist for ascertaining LIBOR or Daily Three Month LIBOR, or (iii) Lender determines that the interest rate based on LIBOR or Daily Three Month LIBOR will not adequately and fairly reflect the cost to Lender of maintaining or funding Advances at the interest rate based upon LIBOR or Daily Three Month LIBOR, Lender shall give notice of such changed circumstances to Administrative Borrower and (i) interest on the principal amount of such extensions of credit thereafter shall accrue interest at a rate equal to the Prime Rate plus the Applicable Margin, and (ii) Borrowers shall not be entitled to elect LIBOR or Daily Three Month LIBOR until Lender determines that it would no longer be unlawful or impractical to do so or that such increased costs would no longer be applicable.

(c)       No Requirement of Matched Funding.  Anything to the contrary contained herein notwithstanding, Lender is not required actually to acquire eurodollar deposits to fund or otherwise match fund any Obligation as to which interest accrues at LIBOR or Daily Three Month LIBOR.

2.15      Capital Requirements.  If, after the date hereof, Lender determines that (i) the adoption of or change in any law, rule, regulation or guideline regarding capital or reserve requirements for lenders, banks or bank holding companies, or any change in the interpretation, implementation, or application thereof by any Governmental Authority charged with the administration thereof, including those changes resulting from the enactment of the ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇ Street Reform and Consumer Protection Act and Basel III, regardless of the date enacted, adopted or issued, or (ii) compliance by Lender or its parent bank holding company with any guideline, request or directive of any such entity regarding capital adequacy (whether or not having the force of law), has the effect of reducing the return on Lender’s or such holding company’s capital as a consequence of Lender’s loan commitments hereunder to a level below that which such Lender or such holding company could have achieved but for such adoption, change, or compliance (taking into consideration such Lender’s or such holding company’s then existing policies with respect to capital adequacy and assuming the full utilization of such entity’s capital) by any amount deemed by Lender to be material, then Lender may notify Administrative Borrower thereof.  Following receipt of such notice, Borrowers agree to pay Lender on demand the amount of such reduction on return of capital

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as and when such reduction is determined, payable within 30 days after presentation by Lender of a statement of the amount and setting forth in reasonable detail Lender’s calculation thereof and the assumptions upon which such calculation was based (which statement shall be deemed true and correct absent manifest error).  In determining such amount, Lender may use any reasonable averaging and attribution methods.  Failure or delay on the part of Lender to demand compensation pursuant to this Section shall not constitute a waiver of Lender’s right to demand such compensation; provided that Borrowers shall not be required to compensate Lender pursuant to this Section for any reductions in return incurred more than 180 days prior to the date that Lender notifies Administrative Borrower of such law, rule, regulation or guideline giving rise to such reductions and of Lender’s intention to claim compensation therefor; provided further that if such claim arises by reason of the adoption of or change in any law, rule, regulation or guideline that is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.

2.16      Extent of Each Borrower’s Liability, Contribution.

(a)       Joint and Several Liability.  Each Borrower agrees that it is jointly and severally liable for, and absolutely and unconditionally guarantees to Lender the prompt payment and performance of, all Obligations under this Agreement and all agreements under the Loan Documents.  Each Borrower agrees that its guaranty obligations hereunder constitute a continuing guaranty of payment and not of collection, that such obligations shall not be discharged until cash payment in full of the Obligations, and that such obligations are absolute and unconditional, irrespective of (i) 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 Borrower is or may become a party or be bound; (ii) 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 Lender with respect thereto; (iii) the existence, value or condition of, or failure to perfect any of Lender’s Liens or to preserve rights against, any security or guaranty for the Obligations or any action, or the absence of any action, by Lender in respect thereof (including the release of any security or guaranty); (iv) the insolvency of any Borrower; (v) any election by Lender in an Insolvency Proceeding for the application of Section 1111(b)(2) of the Bankruptcy Code; (vi) any borrowing or grant of a Lien by any other Borrower, as debtor-in-possession under Section 364 of the Bankruptcy Code or otherwise; (vii) the disallowance of any claims of Lender against any Borrower for the repayment of any Obligations under Section 502 of the Bankruptcy Code or otherwise; or (viii) any other action or circumstances that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, except cash payment in full of all Obligations.

(b)      Keepwell.  Each Qualified ECP Guarantor hereby jointly and severally absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each other Loan Party to honor all of its obligations under this Agreement in respect of a Hedge Obligation (provided, however, that each Qualified ECP Guarantor shall only be liable under this Section for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section or otherwise under this Agreement voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). Except as otherwise provided herein, the obligations of each Qualified ECP Guarantor under this Section shall remain in full force and effect until the termination of all Hedge Obligations. Each Qualified ECP Guarantor intends that this Section constitute, and this Section shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each other Loan Party for all purposes of Section la(18)(A)(v)(II) of the Commodity Exchange Act.

(c)       Contribution. Each Borrower hereby agrees that it will not enforce any of its rights of contribution or subrogation against any other Borrower with respect to any liability incurred by it

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hereunder or under any of the other Loan Documents, any payments made by it to Lender with respect to any of the Obligations or any collateral security therefor until such time as all of the Obligations have been paid in full in cash.  Any claim which any Borrower may have against any other Borrower with respect to any payments to Lender on behalf of another Borrower hereunder or under any of the Bank Product Agreements are hereby expressly made subordinate and junior in right of payment, without limitation as to any increases in the Obligations arising hereunder or thereunder, to the prior payment in full in cash of the Obligations and, in the event of any insolvency, bankruptcy, receivership, liquidation, reorganization or other similar proceeding under the laws of any jurisdiction relating to any Borrower, its debts or its assets, whether voluntary or involuntary, all such Obligations shall be paid in full in cash before any payment or distribution of any character, whether in cash, securities or other property, shall be made to any other Borrower therefor.

(d)      No Limitation on Liability. Nothing contained in this Section 2.16 shall limit the liability of any Borrower to pay extensions of credit made directly or indirectly to that Borrower (including revolving loans advanced to any other Borrower and then re-loaned or otherwise transferred to, or for the benefit of, such Borrower), Obligations relating to Letters of Credit issued to support such Borrower’s 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.

2.17      RG Parent LLC as Agent for Borrowers. Each Borrower hereby irrevocably appoints RG Parent as the Administrative Borrower and attorney-in-fact for all Borrowers (the “Administrative Borrower”) which appointment shall remain in full force and effect unless and until Lender shall have received prior written notice signed by each Borrower that such appointment has been revoked and that another Borrower has been appointed Administrative Borrower.  Each Borrower hereby irrevocably appoints and authorizes the Administrative Borrower (a) to provide Lender with all notices with respect to Advances, Letters of Credit and other extensions of credit obtained for the benefit of any Borrower and all other notices and instructions under this Agreement, and (b) to take such action as the Administrative Borrower deems appropriate on its behalf to obtain Advances, Letters of Credit and other extensions of credit and to exercise such other powers as are reasonably incidental thereto to carry out the purposes of this Agreement.  It is understood that the handling of the Loan Account and Collateral in a combined fashion, as more fully set forth herein, is done solely as an accommodation to Borrowers in order to utilize the collective borrowing powers of Borrowers in the most efficient and economical manner and at their request, and that Lender shall not incur liability to any Borrower as a result hereof.  Each Borrower expects to derive benefit, directly or indirectly, from the handling of the Loan Account and the Collateral in a combined fashion since the successful operation of each Borrower is dependent on the continued successful performance of the integrated group.  To induce Lender to do so, and in consideration thereof, each Borrower hereby jointly and severally agrees to indemnify Lender and hold Lender harmless against any and all liability, expense, loss or claim of damage or injury, made against Lender by any Borrower or by any third party whosoever, arising from or incurred by reason of (a) the handling of the Loan Account and Collateral of Borrowers as herein provided, or (b) Lender’s relying on any instructions of the Administrative Borrower, except that Borrowers will have no liability to Lender under this Section 2.17 with respect to any liability that has been finally determined by a court of competent jurisdiction to have resulted solely from the gross negligence or willful misconduct of Lender.

3.            SECURITY INTEREST.

3.1              Grant of Security Interest.  Each Loan Party hereby grants, assigns, and pledges to Lender, to secure payment and performance of the Obligations, a continuing Lien and security interest (hereinafter referred to as the “Security Interest”) in all of such Loan Party’s right, title, and interest in and to the Collateral, as security for the payment and performance of all Obligations. Following request by Lender, each Loan Party shall grant Lender a Lien and Security Interest in all Commercial Tort Claims

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that it may have against any Person. The Security Interest created hereby secures the payment and performance of the Obligations, whether now existing or arising hereafter.  Without limiting the generality of the foregoing, this Agreement secures the payment of all amounts which constitute part of the Obligations and would be owed by any Loan Party to Lender or any other Bank Product Provider, but for the fact that they are unenforceable or not allowable (in whole or in part) as a claim in an Insolvency Proceeding involving any Borrower due to the existence of such Insolvency Proceeding.  Notwithstanding anything contained in this Agreement to the contrary, the term “Collateral” shall not include, and no Security Interest is granted in, any Excluded Property. This Agreement grants only the Security Interests herein described and is not intended to and does not effect the transfer of title of any trademark registration or application.

3.2              Loan Parties Remain Liable.  Anything herein to the contrary notwithstanding, (a) Borrowers and each other Loan Party shall remain liable under the contracts and agreements included in the Collateral to perform all of the duties and obligations thereunder to the same extent as if this Agreement had not been executed, (b) the exercise by Lender of any of the rights hereunder shall not release any Borrower or any other Loan Party from any of its duties or obligations under such contracts and agreements included in the Collateral, and (c) Lender shall not have any obligation or liability under such contracts and agreements included in the Collateral by reason of the Security Interest, nor shall Lender be obligated to perform any of the obligations or duties of any Borrower or any other Loan Party thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.

3.3              Assignment of Insurance.  As additional security for the Obligations, each Loan Party hereby grants and pledges to Lender a lien and security interest in all rights of such Borrower and such Loan Party under (a) the Key Man Life Insurance Policy and (b) every policy of insurance covering the Collateral and all other assets and property of each Borrower and each other Loan Party (including, without limitation business interruption insurance and proceeds thereof) and all business records and other documents relating to it, and all monies (including proceeds and refunds) that may be payable under any such policy, and no later than 3 Business Days following receipt thereof, the Borrowers hereby agree to prepay the Advances in an aggregate amount equal to the cash proceeds and refunds paid under any such policy (other than Term Priority Collateral) (net of expenses incurred in connection therewith) in excess of $250,000 in any calendar year (provided that the Borrowers shall prepay the Advances in an amount equal to all such cash proceeds and refunds paid under any such policy (other than Term Priority Collateral), regardless of the foregoing threshold, during the existence of an Event of Default or if an Overadvance exists).  After the occurrence and during the continuation of an Event of Default, subject to the terms of the Intercreditor Agreement, Lender may (but need not), in Lender’s or any Borrower’s or any other Loan Party’s name, and upon notice to Administrative Borrower, execute and deliver proofs of claim, receive payment of proceeds and endorse checks and other instruments representing payment of the policy of insurance, and adjust, litigate, compromise or release claims against the issuer of any policy.  Any monies (other than Term Priority Collateral) received under any insurance policy assigned to Lender in excess of $250,000 in any calendar year (and all such monies (other than Term Priority Collateral), regardless of the foregoing threshold, during the existence of an Event of Default), other than liability insurance policies, or received as payment of any award or compensation for condemnation or taking by eminent domain, shall be paid to Lender and, as determined by Lender in its sole discretion, either be applied to prepayment of the Obligations or disbursed to Borrowers under payment terms reasonably satisfactory to Lender for application to the cost of repairs, replacements, or restorations of the affected Collateral which shall be effected with reasonable promptness and shall be of a value at least equal to the value of the items or property destroyed.

3.4              Financing Statements.  Each Borrower and each other Loan Party authorizes Lender to file financing statements describing the Collateral to perfect Lender’s Security Interest in the Collateral, and Lender may describe or indicate the Collateral as “all assets of debtor, whether now owned or hereafter

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acquired or arising and wheresoever located” or words of similar meaning, or describe or indicate specific items of Collateral.

3.5              Intercreditor Agreement.  Notwithstanding anything herein to the contrary, (i) the priority of the Liens and security interests granted to Lender pursuant to this Agreement or any other Loan Document and the exercise of any right or remedy by Lender hereunder or thereunder are subject to the provisions of the Intercreditor Agreement and (ii) so long as the Term Obligations remain outstanding, any provision hereof that requires any Loan Party to (a) deliver any Collateral  to Lender or (b) provide that Lender have control over such Collateral, may, if required by the terms of the Intercreditor Agreement, be satisfied by (x) the delivery of such Collateral by such Loan Party to the Term Agent, and (y) providing that the Term Agent be provided with control with respect to such Collateral (for the benefit of Lender to the extent provided for in the Intercreditor Agreement).  Any reference in this Agreement to a “first priority lien” or words of similar effect in describing the security interests created hereunder shall be understood to refer to such priority subject, in the case of Term Priority Collateral, to the claims of Term Lenders as set forth in the Intercreditor Agreement. All representations, warranties and covenants in this Agreement shall be subject to the provisions and qualifications set forth in this Section 3.5. In the event of any direct conflict between the terms of the Intercreditor Agreement and the terms of this Agreement or any other Loan Documents with respect to the priority of the Liens and security interests granted herein or therein and/or the exercise of any right or remedy hereunder, the terms of the Intercreditor Agreement shall govern and control.

3.6              Perfection.  Notwithstanding anything to the contrary herein or in any other Loan Document, the Loan Parties shall not be obligated to perfect the Security Interests granted by such Loan Parties hereunder in any Collateral in any jurisdiction other than the United States or any state or municipality within the United States; provided, however, that the limitation of this Section 3.6 shall not apply to the extent any Loan Party shall have its jurisdiction of organization outside of the United States.

4.            CONDITIONS.

4.1              Conditions Precedent to the Initial Extension of Credit.  The obligation of Lender to make the initial extension of credit provided for hereunder is subject to the fulfillment, to the satisfaction of Lender, of each of the conditions precedent set forth on Exhibit B.

4.2              Conditions Precedent to all Extensions of Credit.  The obligation of Lender to make any Advances hereunder (or to extend any other credit hereunder) at any time shall be subject to the following conditions precedent:

(a)       the representations and warranties of each Borrower and each other Loan Party contained in this Agreement or in the other Loan Documents shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the date of such extension of credit, as though made on and as of such date (except to the extent that such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects as of such earlier date); and

(b)      no Default or Event of Default shall have occurred and be continuing on the date of such extension of credit, nor shall either result from the making thereof.

Any request for an extension of credit shall be deemed to be a representation by each Borrower and each other Loan Party that the statements set forth in this Section 4.2 are correct as of the time of such request

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and if such extension of credit is a request for an Advance or a Letter of Credit, sufficient Availability exists for such Advance or Letter of Credit pursuant to Section 2.1(a) and Section 2.13.

4.3              [Reserved]4.4.

5.            REPRESENTATIONS AND WARRANTIES.

In order to induce Lender to enter into this Agreement, each Borrower and each other Loan Party makes the representations and warranties to Lender set forth on Exhibit D.  Each of such representations and warranties shall be true, correct, and complete, in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof), as of the Closing Date, and shall be true, correct, and complete, in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof), as of the date of the making of each Advance or other extension of credit made hereunder thereafter, as though made on and as of the date of such Advance or other extension of credit (except to the extent that such representations and warranties relate solely to an earlier date in which case such representations and warranties shall have been true and correct in all material respects as of such earlier date) and such representations and warranties shall survive the execution and delivery of this Agreement.

6.            AFFIRMATIVE COVENANTS.

Each Borrower and each other Loan Party covenants and agrees that, until termination of all of the commitments of Lender hereunder to provide any further extensions of credit and payment in full of the Obligations (other than (x) obligations under Bank Product Obligations and (y) contingent indemnification obligations not yet accrued and payable), each Borrower and each other Loan Party shall and shall cause their respective Subsidiaries to comply with each of the following:

6.1              Financial Statements, Reports, Certificates.  Deliver to Lender copies of each of the financial statements, reports, and other items set forth on Schedule 6.1 no later than the times specified therein.  In addition, each Borrower agrees that no Subsidiary of a Borrower will have a fiscal year different from that of Borrowers.  Each Borrower agrees to maintain a system of accounting that enables such Borrower to produce financial statements in accordance with GAAP.  Each Loan Party shall also (a) keep a reporting system that shows all additions, sales, claims, returns, and allowances with respect to the sales of such Loan Party and its Subsidiaries, and (b) maintain its billing systems/practices substantially as in effect as of the Closing Date or otherwise consistent with past practices and shall only make material modifications thereto following prior notice to Lender.

6.2              Collateral Reporting.  Provide Lender with each of the reports set forth on Schedule 6.2 at the times specified therein. In addition, each Borrower agrees to use commercially reasonable efforts in cooperation with Lender to facilitate and implement a system of electronic collateral reporting in order to provide electronic reporting of each of the items set forth on such Schedule.

6.3              Existence.  Except as otherwise permitted under Section 7.3 or Section 7.4, at all times maintain and preserve in full force and effect (a) its existence (including being in good standing, to the extent such concept exists, in its jurisdiction of organization) and (b) all rights and franchises, licenses and permits material to its business; provided, however, that no Loan Party nor any of its Subsidiaries shall be required to preserve any such right or franchise, licenses or permits if (i) such Person shall determine that the preservation thereof is no longer desirable in the conduct of the business of such Person, and that the loss thereof is not disadvantageous in any material respect to such Person or to the

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Lender and (ii) the failure to do so would not reasonably be expected to result in a Material Adverse Change.

6.4              Maintenance of Properties.  Maintain and preserve all of its tangible assets that are necessary or useful in the proper conduct of its business in good working order and condition, ordinary wear, tear and casualty excepted and Permitted Dispositions excepted (and except where the failure to so maintain and preserve such assets could not reasonably be expected to result in a Material Adverse Change), and comply with the provisions of all leases to which it is a party as lessee, so as to prevent the loss or forfeiture thereof, unless such provisions are the subject of a Permitted Protest or failure to do so would not reasonably be expected to result in a Material Adverse Change.

6.5              Taxes.

(a)       Cause all material assessments and taxes imposed, levied, or assessed against any Loan Party or its Subsidiaries, or any of their respective assets or in respect of any of its income, businesses, or franchises to be paid in full, before delinquency or before the expiration of any extension period, except (x) to the extent that the validity of such assessment or tax shall be the subject of a Permitted Protest and so long as, in the case of an assessment or tax that has or may become a Lien against any of the Collateral, (i) such contest proceedings conclusively operate to stay the sale of any portion of the Collateral to satisfy such assessment or tax, and (ii) any such other Lien is at all times subordinate to Lender’s Liens or (y) for taxes in an aggregate amount not in excess of $50,000.

(b)      Make timely payment or deposit of all material tax payments and withholding taxes required of it and them by applicable laws, including those applicable laws concerning F.I.C.A., F.U.T.A., state disability, and local, state, and federal income taxes, and will, upon request, furnish Lender with proof indicating that such Loan Party and its Subsidiaries have made such payments or deposits except to the extent subject to a Permitted Protest.

6.6              Insurance.  At Borrowers’ expense, maintain insurance with respect to the assets of each Loan Party and each of its Subsidiaries wherever located, covering liabilities, losses or damages as are customarily insured against by other Persons engaged in the same or similar businesses. Borrowers also shall maintain, with respect to each Loan Party and each of its Subsidiaries, business interruption insurance, general liability insurance, flood insurance for Real Property Collateral located in a flood plain, product liability insurance, director’s and officer’s liability insurance, fiduciary liability insurance and employment practices liability insurance, as well as insurance against larceny, embezzlement, and criminal misappropriation. All such policies of insurance shall be with financially sound and reputable insurance companies having a financial strength rating of at least A- by A.M. Best Company or that are otherwise reasonably acceptable to Lender and in such amounts as is carried generally in accordance with sound business practice by companies in similar businesses similarly situated and located and in any event in amount, adequacy and scope reasonably satisfactory to Lender. No later than 30 days after the Closing Date (or such longer period of time as Lender shall expressly agree), (i) all property insurance policies covering the Collateral are to be made payable to Lender, as its interests may appear, in case of loss, pursuant to a lender loss payable endorsement reasonably acceptable to Lender and containing such other provisions as Lender may reasonably require to fully protect Lender’s interest in the Collateral and to any payments to be made under such policies and (ii) such evidence of property and general liability insurance shall be delivered to Lender, with the lender loss payable endorsements (but only in respect of Collateral) and additional insured endorsements (with respect to general liability coverage) in favor of Lender and Borrowers shall use commercially reasonable best efforts to have such policies provide for not less than 30 days (10 days in the case of non-payment) prior written notice to Lender of the exercise of any right of cancellation.  If Borrowers fail to maintain such insurance, Lender may arrange for such insurance, but at Borrowers’ expense and without any responsibility on Lender’s part for obtaining the

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insurance, the solvency of the insurance companies, the adequacy of the coverage, or the collection of claims.  Administrative Borrower shall give Lender prompt notice of any loss exceeding $1,000,000 covered by Borrowers’ casualty or business interruption insurance.  Upon the occurrence of an Event of Default, subject to the terms of the Intercreditor Agreement, Lender shall have the sole right to file claims under any property and general liability insurance policies in respect of the Collateral, to receive and give acquittance for any payments that may be payable thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect the collection, compromise or settlement of any claims under any such insurance policies.

6.7              Inspections, Exams, Collateral Exams and Appraisals.  Subject to the limitations in Schedule 2.12, permit Lender and each of Lender’s duly authorized representatives to visit any of its properties and inspect any of its assets or books and records, to conduct inspections, exams and appraisals of the Collateral, to examine and make copies of its books and records, and to discuss its affairs, finances, and accounts with, and to be advised as to the same by, its officers and employees at such reasonable times and intervals as Lender may designate and, so long as no Default or Event of Default exists, with reasonable prior written notice to Borrowers. Notwithstanding anything to the contrary in this Section 6.7, no Loan Party or any of its Subsidiaries will be required to disclose, permit the visit, inspection, examination, or discussion of, any document, information or other matter that (x) constitutes non-financial trade secrets or non-financial proprietary information of such Loan Party, (y) in respect of which disclosure to Lender (or its representatives) is prohibited by law or any binding legal agreement or (z) is subject to attorney-client or similar privilege or constitutes attorney work product. Lender shall give Administrative Borrower the opportunity to participate in any discussions with Borrowers’ independent public accountants.

6.8              Account Verification.  Permit Lender, in Lender’s name or in the name of a nominee of Lender, to verify the validity, amount or any other matter relating to any Account, by mail, telephone, facsimile transmission or otherwise.  Further, at the request of Lender, Borrowers shall send requests for verification of Accounts or send notices of assignment of Accounts to Account Debtors and other obligors.

6.9              Compliance with Laws.  Comply with the requirements of all applicable laws, rules, regulations, and orders of any Governmental Authority, other than laws, rules, regulations, and orders the non-compliance with which, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Change.

6.10      Environmental.

(a)       Keep any property either owned or operated by any Borrower or any other Loan Party or its Subsidiaries free of any Environmental Liens securing obligations or liabilities in excess of $250,000 or post bonds or other financial assurances reasonably satisfactory to Lender and in an amount sufficient to satisfy the obligations or liability evidenced by such Environmental Liens;

(b)      Comply with Environmental Laws, except to the extent that failure to do so would not reasonably be expected to result in a Material Adverse Change, and provide to Lender documentation of such compliance which Lender reasonably requests;

(c)       Promptly notify Lender of any release of which any Borrower or any other Loan Party has knowledge of a Hazardous Material that would reasonably be expected to result in a Material Adverse Change from or onto property owned or operated by any Loan Party or any of its Subsidiaries and take any Remedial Actions required to ▇▇▇▇▇ said release or otherwise to come into compliance with applicable

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Environmental Law, except to the extent that such non-compliance would not reasonably be expected to result in a Material Adverse Change; and

(d)      Promptly, but in any event within 5 Business Days of its receipt thereof, provide Lender with written notice of any of the following:  (i) notice that an Environmental Lien has been filed against any of the real or personal property of any Loan Party or its Subsidiaries, (ii) commencement of any Environmental Action or written notice that an Environmental Action will be filed against any Loan Party or any of its Subsidiaries, and (iii) written notice of a violation by Parent or any of its Subsidiaries, a citation of Parent or any of its Subsidiaries, or any other administrative order from a Governmental Authority in respect of an Environmental Action or violation of Environmental Law by Parent or any of its Subsidiaries.

6.11      Disclosure Updates.

(a)       Promptly, and in no event later than 5 Business Days after obtaining knowledge thereof, notify Lender:

(i)               if any written information, exhibit, or report furnished to Lender contained, at the time it was furnished, any untrue statement of a material fact or omitted to state any material fact necessary to make the statements contained therein not materially misleading in light of the circumstances in which made.  Any notification pursuant to the foregoing provision will not cure or remedy the effect of the prior untrue statement of a material fact or omission of any material fact nor shall any such notification have the effect of amending or modifying this Agreement or any of the Schedules hereto;

(ii)           of all actions, suits, or proceedings brought by or against any Loan Party or any of its Subsidiaries before any court or Governmental Authority which reasonably could be expected to result in a Material Adverse Change;

(iii)       of any material disputes or similar material claims by any Borrower’s customers with respect to an Account in an amount in excess of $250,000;

(iv)       of any material loss or damage to any Collateral; or

(v)           of a violation by any Loan Party or Subsidiary thereof of any law, rule or regulation, the non-compliance with which reasonably could be expected to result in a Material Adverse Change.

(b)      Promptly upon obtaining knowledge thereof after the occurrence thereof, notify Lender of any event or condition which constitutes a Default or an Event of Default and, upon Lender’s written request, provide a statement of the action that such Borrower proposes to take with respect to such Default or Event of Default.

(c)       Prior to consigning or selling on conditional terms of sale (including ▇▇▇▇ and hold, sale or return, sale on approval, or other similar conditional terms of sale) any Inventory with an aggregate value in excess of $250,000 pursuant to a new arrangement after the Closing Date with a customer not previously involved in any such arrangement with such Loan Party, provide Lender with written notice of such arrangement, including the details thereof.

(d)      Upon the reasonable request of Lender, each Loan Party shall deliver to Lender any other materials, reports, records or information reasonably requested relating to the operations, business affairs, financial condition of any Loan Party or its Subsidiaries or the Collateral.

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6.12      Collateral Covenants.

(a)       Possession of Collateral.  In each case subject to the terms of the Intercreditor Agreement and Section 3.5, in the event that any Collateral (other than any Term Priority Collateral), including Proceeds, is evidenced by or consists of Negotiable Collateral, Investment Related Property, or Chattel Paper, in each case having an individual value of $250,000 or more or an aggregate value of $500,000 or more, the Loan Parties shall promptly (and in any event within 5 Business Days after receipt thereof or such longer period as Lender agrees), notify Lender thereof, and if and to the extent that perfection or priority of Lender’s Liens is dependent on or enhanced by possession, the applicable Loan Party, promptly (and in any event within  5 Business Days) after request by Lender, shall execute such other documents and instruments as shall be requested by Lender or, if applicable, endorse and deliver physical possession of such Negotiable Collateral, Investment Related Property, or Chattel Paper to Lender (or, pursuant to the Intercreditor Agreement, the Term Loan Agent), together with such undated powers (or other relevant document of assignment or transfer acceptable to Lender) endorsed in blank as shall be requested by Lender, and shall do such other acts or things reasonably requested by Lender and deemed necessary or desirable by Lender to perfect and protect Lender’s Liens therein.

(b)      Chattel Paper.

(i)               In each case subject to the terms of the Intercreditor Agreement and Section 3.5, promptly (and in any event within  5 Business Days or such longer period as Lender agrees) after request by Lender, each Loan Party shall take all steps reasonably requested by Lender and necessary to grant Lender control of all electronic Chattel Paper of any Loan Party  (other than any Term Priority Collateral) in accordance with the Code and all “transferable records” as that term is defined in Section 16 of the Uniform Electronic Transaction Act and Section 201 of the federal Electronic Signatures in Global and National Commerce Act as in effect in any relevant jurisdiction, to the extent that the individual value of such electronic Chattel Paper equals or exceeds $250,000 individually or $500,000 in the aggregate; and

(ii)           Subject to the terms of the Intercreditor Agreement and Section 3.5, if any Loan Party retains possession of any Chattel Paper or instruments (which retention of possession shall be subject to the extent permitted hereby), promptly upon the request of Lender, such Chattel Paper and instruments shall be marked with a legend in form and substance satisfactory to Lender with a reference to the fact that such Chattel Paper or instruments are subject to the Security Interest of Lender.

(c)       Control Agreements.

(i)               In each case subject to the terms of the Intercreditor Agreement and Section 3.5, except to the extent otherwise provided by Section 7.11 and other than with respect to Excluded Accounts, each Loan Party shall obtain a Control Agreement, from each bank (other than Lender) maintaining a Deposit Account for such Loan Party (in the case of Deposit Accounts maintained as of the Closing Date, no later than 90 days (or such longer period as Lender may expressly agree) after the Closing Date);

(ii)           In each case subject to the terms of the Intercreditor Agreement and Section 3.5 and except to the extent otherwise provided by Section 7.11, each Loan Party shall obtain a Control Agreement from each securities intermediary or commodities intermediary issuing or holding any financial assets or commodities to or for any Loan Party (other than, for the avoidance of doubt, with respect to any Treasury Shares Account) (in the case of financial assets or commodities of the Loan Parties as of the Closing Date, no later than 90 days (or such longer period as Lender may expressly agree) after the Closing Date); and

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(iii)       In each case subject to the terms of the Intercreditor Agreement and except to the extent otherwise provided by Section 7.11, each Loan Party shall cause Lender to obtain “control”, as such term is defined in the Code, with respect to all of such Loan Party’s investment property (other than, for the avoidance of doubt, with respect to any Treasury Shares Account).

(d)      Letter-of-Credit Rights.  In each case subject to the terms of the Intercreditor Agreement and Section 3.5, if the Loan Parties (or any of them) are or become the beneficiary of any letter of credit (other than any Term Priority Collateral) having an individual value of $250,000 or more or aggregate value of $500,000 or more, then the applicable Loan Party or Loan Parties shall promptly (and in any event within 5 Business Days after becoming a beneficiary or such longer period as Lender agrees), notify Lender thereof and, promptly (and in any event within 5 Business Days or such longer period as Lender agrees) after request by Lender, use commercially reasonable efforts to enter into an agreement with Lender, Term Loan Agent and the issuer or confirming bank with respect to letter-of-credit rights assigning such letter-of-credit rights to Lender.

(e)       Commercial Tort Claims.  On each date on which a Compliance Certificate is required to be delivered pursuant to this Agreement, each Loan Party shall notify Lender in writing of any commercial tort claim acquired by such Loan Party and known by such Loan Party to be in existence as of such date and not previously identified to Lender in an amount reasonably estimated by such Loan Party to be in excess of $250,000 individually or $500,000 in the aggregate and provide reasonably specific descriptions of each such commercial tort claim;

(f)        Government Contracts.  Other than Accounts and Chattel Paper the aggregate value of which does not at any one time exceed $250,000, if any Account or Chattel Paper of any Loan Party  arises out of a contract or contracts with the United States of America or any State or any department, agency, or instrumentality thereof, Loan Parties shall promptly (and in any event within 5 Business Days of the creation thereof) notify Lender thereof and, promptly (and in any event within 5 Business Days) after request by Lender, execute any instruments or take any steps reasonably required by Lender in order that all moneys due or to become due under such contract or contracts shall be assigned to Lender, for the benefit of Lender and each Bank Product Provider, and shall provide written notice thereof under the Assignment of Claims Act or other applicable law.

(g)       Intellectual Property.

(i)               Upon the request of Lender, in order to facilitate filings with the PTO and the United States Copyright Office, each Loan Party shall execute and deliver to Lender one or more Copyright Security Agreements or Patent and Trademark Security Agreements to further evidence Lender’s Lien on such Loan Party’s U.S. issued, registered or applied-for Patents, Trademarks, or Copyrights;

(ii)           Each Loan Party shall have the duty, with respect to Intellectual Property that is necessary in the conduct of such Loan Party’s business, to protect and diligently enforce and defend at such Loan Party’s expense its Intellectual Property in the exercise of such Loan Party’s reasonable business judgment, including (A) to diligently enforce and defend, including, where determined to be appropriate in the exercise of such Loan Party’s reasonable business judgment suing for infringement, misappropriation, or dilution and to recover any and all damages for such infringement, misappropriation, or dilution, and filing for opposition, interference, and cancellation against conflicting Intellectual Property rights of any Person, (B) to prosecute diligently any trademark application or service ▇▇▇▇ application that is part of the Trademarks pending as of the date hereof or hereafter, (C) to prosecute diligently any patent application that is part of the Patents pending as of the date hereof or hereafter, and (D) to take all reasonable and necessary action to preserve and maintain all of such Loan Party’s Trademarks, Patents, Copyrights, and its rights therein, including paying all required maintenance fees

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and filing of required applications for renewal, affidavits of use, and affidavits of noncontestability, in each case, except to the extent that the failure to do any of the foregoing would not reasonably be expected to result in a Material Adverse Change.  No Loan Party shall abandon any Intellectual Property, except to the extent that such abandonment would not reasonably be expected to result in a Material Adverse Change or otherwise constitute a Permitted Disposition.  Each Loan Party shall take the steps described in this Section 6.12(g)(ii) with respect to all new or acquired Intellectual Property to which it or any of its Subsidiaries is now or later becomes entitled that is necessary in the conduct of such Loan Party’s or Subsidiary’s business;

(iii)       Each Loan Party acknowledges and agrees that Lender shall have no duties with respect to any Intellectual Property or Intellectual Property Licenses of any Loan Party.  Without limiting the generality of this Section 6.12(g)(iii), each Loan Party acknowledges and agrees that Lender shall not be under any obligation to take any steps necessary to preserve rights in the Collateral consisting of Intellectual Property or Intellectual Property Licenses against any other Person, but Lender may do so at its option from and after the occurrence and during the continuance of an Event of Default, and all expenses incurred in connection therewith (including reasonable fees and expenses of attorneys and other professionals) shall be for the sole account of Loan Party and shall be chargeable to the Loan Account;

(iv)       Each Loan Party shall promptly file an application with the United States Copyright Office for any Copyright owned by such Loan Party that has not been registered with the United States Copyright Office, except to the extent that such failure to register would not reasonably be expected to result in a Material Adverse Change.  Any expenses incurred in connection with the foregoing shall be borne by the Loan Parties; and

(v)           If any Loan Party shall enter into any material Intellectual Property License to receive any license or rights in any Intellectual Property of any other Person, such Loan Party shall promptly thereafter use commercially reasonable efforts to deliver a licensor’s consent, in form and substance reasonably satisfactory to Lender, with respect to such license or rights in such Intellectual Property.

(h)      Investment Related Property.

(i)               Upon the occurrence and during the continuance of an Event of Default and subject to the terms of the Intercreditor Agreement, following the written request of Lender, all sums of money and property paid or distributed in respect of the Investment Related Property that are received by any Loan Party (excluding Term Priority Collateral) shall be held by such Loan Party in trust for the benefit of Lender, and such Loan Party shall deliver it promptly to Lender in the exact form received; and

(ii)           Subject to the terms of the Intercreditor Agreement and any limitations and exceptions in any Loan Document, each Loan Party shall, upon the written request of Lender, cooperate with Lender in obtaining necessary approvals and making necessary filings under federal, state or local law to effect the perfection of the Security Interest on the Investment Related Property; provided that the Loan Parties shall not have any obligation to obtain approvals or make filings in any jurisdiction outside the United States, except as provided in Section 3.6 hereof.

(i)          Real Property; Fixtures.  Subject to the terms of the Intercreditor Agreement, upon the acquisition by any Loan Party of any fee interest in Real Property located in the United States with a fair market value of $500,000 as estimated by such Loan Party in good faith, such Loan Party will promptly (and in any event within 30 Business Days of acquisition or such longer period as Lender agrees) notify Lender of the acquisition of such Real Property and will grant to Lender a mortgage on each fee interest in such Real Property now or hereafter owned by such Loan Party, which Real Property shall not be

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subject to any other Liens except Permitted Liens, and shall deliver such other customary documentation and opinions, in form and substance reasonably satisfactory to Lender, in connection with the grant of such mortgage as Lender shall request in its Permitted Discretion, including appraisals, title insurance policies and endorsements, surveys, financing statements, fixture filings, flood insurance, flood insurance certifications and environmental audits and such Loan Party shall pay all recording costs, mortgage registration taxes, intangible taxes and other fees and costs (including reasonable and documented out of pocket attorney’s fees and expenses) incurred in connection therewith.  All such appraisals, title insurance policies and endorsements, environmental audits and surveys shall be prepared or issued by parties reasonably acceptable to Lender. To the extent permitted by applicable law, all of the Collateral shall remain personal property regardless of the manner of its attachment or affixation to real property.

(j)          Controlled Accounts.

(i)               Within 90 days following the Closing Date (or such longer period as Lender expressly agrees) (the “Cash Management Transition Period”), each Loan Party shall establish and maintain at Lender or an Affiliate thereof all Cash Management Services, including all deposit accounts and lockbox services. Subject to the terms of the Intercreditor Agreement, while a Cash Dominion Trigger Period is in effect, Lender shall have the sole and exclusive right to direct the disposition of funds in all such deposit accounts (excluding any Term Priority Collateral).

(ii)           Until such time as the Loan Parties have established all of their Cash Management Services with Lender, during the Cash Management Transition Period each Loan Party may maintain Cash Management Services with one or more of the banks set forth on Schedule 6.12(j) to the Information Certificate (each a “Controlled Account Bank”), and shall (A) take reasonable steps to ensure that all of the Account Debtors of each Loan Party forward payment of the amounts owed by them to such Loan Party (excluding any Term Priority Collateral) directly to a Collection Account maintained at a Controlled Account Bank, and (B) deposit or cause to be deposited promptly, and in any event no later than the third Business Day after the date of receipt thereof (or such longer period as Lender agrees), all of their cash Collections (including those sent directly by their Account Debtors to a Loan Party) into a Collection Account of such Loan Party maintained at one of the Controlled Account Banks; provided, that the foregoing clauses (A) and (B) shall not be applicable to (x) ▇▇▇▇▇ cash not in excess of $250,000 in the aggregate held at retail stores of Parent or any of its Subsidiaries and (y) cash or Cash Equivalents (or amounts on deposit in any Deposit Account or Securities Account) reasonably expected by the Borrowers to be used to pay any taxes required to be paid or incurred in connection with any transaction consummated pursuant to the Asset Purchase Agreements.

(iii)       Commencing on the date that is (a) 7 days after the Closing Date (or such later date as Lender expressly agrees) with respect to ▇▇▇▇▇ Fargo Bank, National Association and (b) 90 days after the Closing Date (or such later date as Lender expressly agrees) with respect to each other Controlled Account Bank, each Loan Party shall maintain Control Agreements with the applicable Controlled Account Bank (other than any Controlled Account Bank where no Loan Party maintains a Deposit Account or Securities Account), in form and substance reasonably acceptable to Lender. While a Cash Dominion Trigger Period is in effect, subject to the terms of the Intercreditor Agreement, Lender shall have the sole and exclusive right to direct, and is hereby authorized to give instructions pursuant to such Control Agreement directing, the disposition of funds in the Controlled Accounts (excluding any Term Priority Collateral) (any such instructions, an “Activation Notice”) to Lender on a daily basis, either to any account maintained by Lender at said Controlled Account Bank or by wire transfer to appropriate account(s) at Lender and, in each case, such amounts shall be applied on a daily basis to the Obligations in the manner set forth in Section 2.4(e).  While no Cash Dominion Trigger Period is in effect, the Loan Parties shall retain the right to direct the disposition of funds in the Controlled Accounts.  To the extent Lender issues an Activation Notice, Lender agrees to rescind such Activation Notice at such time as no

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Cash Dominion Trigger Period shall exist (it being understood that, notwithstanding any such rescission, Lender shall have the right and is authorized to issue an additional Activation Notice if a Cash Dominion Trigger Period shall exist at any time thereafter).

For the avoidance of doubt, all notices required under this Section 6.12 shall be in writing.

6.13      Credit Card Notifications.  Within 60 days following the Closing Date (or such longer period as Lender agrees), each Loan Party shall deliver to the Lender copies of credit card notifications (each, a “Credit Card Notification”) in form and substance reasonably satisfactory to Lender which have been executed on behalf of such Loan Party and delivered to such Loan Party’s Credit Card Issuers and Credit Card Processors listed on Schedule 5.15(b) of the Information Certificate.

6.14      Material Contracts.  Borrowers shall maintain all Material Contracts in full force and effect and shall not default in the payment or performance of any obligations thereunder, except as would not reasonably be expected to result in a Material Adverse Change.  At the request of Lender, (a) Borrowers shall promptly, but in any event within 5 Business Days following such written request therefor, provide Lender with copies of (i) each Material Contract entered into since the delivery of the previous Compliance Certificate, and (ii) each material amendment or modification of any Material Contract entered into since the delivery of the previous Compliance Certificate, and (b) Borrowers shall use commercially reasonable efforts to obtain a “no-offset” letter in form and substance reasonably acceptable to Lender from each customer of a Borrower which is a party to any Material Contract.

6.15      Location of Inventory and Equipment.  Keep the Inventory and Equipment (other than Inventory in transit, vehicles and Equipment out for repair) of each Loan Party with an aggregate value in excess of $250,000 only at the locations identified on Schedule 5.29 to the Information Certificate and keep the chief executive office of each Loan Party only at the locations identified on Schedule 5.6(b) to the Information Certificate unless Borrowers amend Schedules 5.6(b) or 5.29 to the Information Certificate (as applicable) by written notice to Lender (a) with respect to Schedule 5.29 to the Information Certificate, not less than 10 days prior (or such shorter period as Lender agrees) to the date on which such Inventory or Equipment is moved to a location not identified on Schedule 5.29 to the Information Certificate and (b) with respect to Schedule 5.6(b) to the Information Certificate, not less than 10 days prior (or such shorter period as Lender agrees) to the date on which the chief executive office is moved to a location not identified on Schedule 5.6(b) to the Information Certificate.

6.16      Further Assurances.

(a)       Subject to the terms of the Intercreditor Agreement and any limitations and exceptions in any Loan Document, at any time upon the reasonable request of Lender, each Loan Party shall execute or deliver to Lender any and all financing statements, fixture filings, security agreements, pledges, assignments, endorsements of certificates of title, mortgages, deeds of trust, opinions of counsel, and all other documents (the “Additional Documents”) that Lender may reasonably request and in form and substance reasonably satisfactory to Lender, to create, perfect, and continue perfection or to better perfect Lender’s Liens in all of the assets of each Loan Party (whether now owned or hereafter arising or acquired, tangible or intangible, real or personal), and in order to fully consummate all of the transactions contemplated hereby and under the other Loan Documents.  To the maximum extent permitted by applicable law, if a Borrower or any other Loan Party refuses or fails to execute or deliver any reasonably requested Additional Documents, such Borrower and such other Loan Party hereby authorizes Lender to execute any such Additional Documents in the applicable Borrower’s or other Loan Party’s name, as applicable, and authorizes Lender to file such executed Additional Documents in any appropriate filing office.  In furtherance and not in limitation of the foregoing, each Borrower and each other Loan Party shall take such actions as Lender may reasonably request from time to time to ensure that the Obligations

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are guaranteed by the Guarantors and are secured by substantially all of the assets of each Borrower and each other Loan Party to the extent required by the Loan Documents.

(b)      Each Borrower and each other Loan Party authorizes the filing by Lender of financing or continuation statements, or amendments thereto, and, subject to the limitations and exceptions set forth in the Loan Documents, such Loan Party will execute and deliver to Lender such other instruments or notices, as Lender may reasonably request, in order to perfect and preserve the Security Interest granted or purported to be granted hereby.

(c)       Each Borrower and each other Loan Party authorizes Lender at any time and from time to time to file, transmit, or communicate, as applicable, financing statements and amendments (i) describing the Collateral as “all assets of debtor, whether now owned or hereafter acquired or arising and wheresoever located” or words of similar meaning, (ii) describing the Collateral as being of equal or lesser scope or with greater detail, or (iii) that contain any information required by Part 5 of Article 9 of the Code for the sufficiency or filing office acceptance of such financing statement.

(d)      Each Borrower and each other Loan Party acknowledges that no Loan Party is authorized to file any financing statement or amendment or termination statement with respect to any financing statement filed in connection with this Agreement without the prior written consent of Lender, subject to such Loan Party’s rights under Section 9-509(d)(2) of the Code.

6.17      Formation of Subsidiaries.  At the time that any Loan Party forms any direct or indirect Subsidiary or acquires any direct or indirect Subsidiary after the Closing Date, such Loan Party shall (a) within 15 days of such formation or acquisition (or such later date as permitted by Lender in its sole discretion) cause any such new Subsidiary to provide to Lender with a Joinder Agreement and (in the case of a Subsidiary becoming a Guarantor) a joinder to the Guaranty, together with such other security documents, as well as appropriate financing statements (and with respect to all property subject to a mortgage, fixture filings), all in form and substance reasonably requested by Lender and reasonably satisfactory to Lender (including being sufficient to grant Lender a first priority Lien (subject to Permitted Liens) in and to the assets of such newly formed or acquired Subsidiary, subject to the terms of the Intercreditor Agreement and any limitations and exceptions in any Loan Document) to the extent required by the Loan Documents; provided that the foregoing shall not be required to be provided to Lender with respect to any (i) Domestic Foreign Holding Company or (ii) Subsidiary that is a CFC if providing any of the foregoing would result in adverse tax consequences or the costs to the Loan Parties of providing such Guaranty, executing any security documents or perfecting the security interests created thereby are unreasonably excessive (as determined by Lender in consultation with Borrowers) in relation to the benefits of Lender of the security or guarantee afforded thereby, (b) within 15 days of such formation or acquisition (or such later date as permitted by Lender in its sole discretion) provide to Lender a pledge agreement and, subject to the terms of the Intercreditor Agreement and any limitations and exceptions in any Loan Document, appropriate certificates and powers or financing statements, pledging all of the direct or beneficial ownership interest in such new Subsidiary owned by a Loan Party; provided that only 65% of the total outstanding voting Stock of any (i) Domestic Foreign Holding Company owned by a Loan Party and (ii) first tier Subsidiary that is a CFC owned by a Loan Party (and none of the Stock of any Subsidiary of such CFC or Domestic Foreign Holding Company) shall be required to be pledged if pledging a greater amount would result in adverse tax consequences or the costs to the Loan Parties of providing such pledge or perfecting the security interests created thereby are unreasonably excessive (as determined by Lender in consultation with Borrowers) in relation to the benefits of Lender of the security afforded thereby (which pledge shall not be required to be governed by the laws of the jurisdiction of such Subsidiary), and (c) within 15 days of such request by Lender (or such later date as permitted by Lender in its sole discretion) provide to Lender, upon its reasonable request, all other documentation which in its opinion is appropriate with respect to the execution and delivery of the applicable documentation referred

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to above (including policies of title insurance or other documentation with respect to all Real Property owned in fee by a Loan Party and required hereunder to be subject to a mortgage).  Any document, agreement, or instrument executed or issued pursuant to this Section 6.17 shall be a Loan Document.

6.18      Post-Closing Obligations.  The Loan Parties shall comply with each requirement set forth on Exhibit C on or before the date referred to in Exhibit C (or such later date as Lender shall agree).

7.            NEGATIVE COVENANTS.

Each Loan Party covenants and agrees that, until termination of all of the commitments of Lender hereunder to provide any further extensions of credit and payment in full of the Obligations (other than (x) obligations under Bank Product Obligations and (y) contingent indemnification obligations not yet accrued and payable), no Borrower and no other Loan Party will do, nor will any Borrower or any other Loan Party permit any of its Subsidiaries (as applicable) to do any of the following:

7.1              Indebtedness.  Create, incur, assume, suffer to exist, guarantee, or otherwise become or remain, directly or indirectly, liable with respect to any Indebtedness, except for Permitted Indebtedness.

7.2              Liens.  Create, incur, assume, or suffer to exist, directly or indirectly, any Lien on or with respect to any of its assets, of any kind, whether now owned or hereafter acquired, or any income or profits therefrom, except for Permitted Liens.

7.3              Restrictions on Fundamental Changes.

(a)       Merge or consolidate with or into any other Person, except for (i) any merger or consolidation between Loan Parties, provided that a Borrower must be the surviving entity of any such merger to which a Borrower is a party and Parent must be the surviving entity of any such merger to which Parent is a party, (ii) any merger or consolidation between Subsidiaries that are not Loan Parties, (iii) any Guarantor may merge or consolidate with or into any other Guarantor, (iv) any merger or consolidation to effect a transaction permitted by Section 7.4 or a Permitted Investment, and (v) the transactions occurring on the Closing Date.

(b)      Liquidate, wind up, or dissolve itself (or suffer any liquidation or dissolution), except for (i) the liquidation or dissolution of Subsidiaries of any Borrower with nominal assets and nominal liabilities, provided, that, Administrative Borrower shall provide Lender with at least 10 days’ prior written notice (or such shorter period as Lender expressly agrees) of any such liquidation or dissolution, (ii) the liquidation or dissolution of a Loan Party (other than a Borrower) or any of its Subsidiaries so long as all of the assets (including any interest in any Stock) of such liquidating or dissolving Loan Party or Subsidiary are transferred to a Loan Party that is not liquidating or dissolving (unless otherwise permitted by Section 7.4), or (iii) the liquidation or dissolution of a Subsidiary of a Borrower that is not a Loan Party (other than any such Subsidiary the Stock of which (or any portion thereof) is subject to a Lien in favor of Lender) so long as all of the assets of such liquidating or dissolving Subsidiary are transferred to a Subsidiary of a Borrower that is not liquidating or dissolving (unless otherwise permitted by Section 7.4).

(c)       Suspend or cease operation of a substantial portion of its or their business, except as permitted pursuant to Sections 7.3(a) or (b) above or in connection with the transactions permitted pursuant to Section 7.4.

(d)      No Loan Party may form or acquire any direct or indirect Subsidiary; except, that, upon ten (10) days prior written notice (or such shorter period as Lender agrees) by a Loan Party to Lender, a

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Loan Party may form a Subsidiary so long as such Subsidiary becomes a Loan Party hereunder, to the extent required by Section 6.17, subject to the terms and conditions of this Agreement and the other Loan Documents.

(e)       Enter into any merger, migration, re-incorporation, consolidation or conversion, or series of such actions, the result of which is that the jurisdiction of incorporation or organization of any Borrower or Guarantor is no longer within the United States.

7.4              Disposal of Assets.  Other than Permitted Dispositions or transactions expressly permitted by Sections 7.3 or 7.12, sell, assign (by operation of law or otherwise) or otherwise dispose of any of the Collateral or any of its other assets except as expressly permitted by this Agreement. Lender shall not be deemed to have consented to any sale or other disposition of any of the Collateral or any other asset except as expressly permitted in this Agreement or the other Loan Documents.

7.5              Change Name.  Without at least thirty (30) days’ prior written notice by Administrative Borrower to Lender (or such shorter period as Lender agrees), change the legal name, organizational identification number, state of organization, type of organization or “location” for purposes of Section 9-307 of the Code, in each case of any Loan Party.

7.6              Nature of Business.  Make any material change in the nature of its or their business as conducted on the date of this Agreement; provided, however, that the foregoing shall not prevent any Borrower or any other Loan Party or any of its Subsidiaries from (i) engaging in any business that is reasonably related, complementary or ancillary to the business of Parent and its Subsidiaries or (ii) consummating any transaction expressly provided for under the Asset Purchase Agreements.

7.7              Prepayments and Amendments.

(a)       Except in connection with Refinancing Indebtedness permitted by Section 7.1,

(i)               optionally prepay, redeem, defease, purchase, or otherwise acquire any Indebtedness of any Loan Party or any of its Subsidiaries, other than (A) the Obligations in accordance with this Agreement or a Bank Product Agreement, (B) Permitted Intercompany Advances, (C) Indebtedness owing under the Term Loan Agreement, (D) Indebtedness owing under the Convertible Notes, subject at all times to the subordination provisions set forth in the Convertible Notes, (E) the conversion of any Indebtedness to Stock (other than Prohibited Preferred Stock) of Parent or any prepayment, redemption, defeasance, purchase or other acquisition of Indebtedness with the proceeds of issuance of Stock of Parent, (F) any AHYDO “catch-up” payments (including payment of any interest and principal amounts intended to prevent the applicable Indebtedness from being treated as an “Applicable High Yield Discount Obligation” within the meaning of Section 163(i)(1) of the IRC) and payments of regularly scheduled principal and interest (including default interest) and indemnity and expense reimbursement payments, in each case pursuant to the terms governing any Indebtedness, and (G) any other prepayment, redemption, defeasance, purchase or other acquisition of Indebtedness so long as immediately before and immediately after giving effect to any such prepayment (i) no Event of Default exists, and (ii) the Payment Conditions are satisfied.

(ii)           make any payment on account of Indebtedness that has been contractually subordinated in right of payment to the Obligations if such payment is not permitted at such time under the subordination terms and conditions, or

(b)      Directly or indirectly, amend, modify, or change any of the terms or provisions of,

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(i)               any agreement, instrument, document, indenture or other writing evidencing Permitted Indebtedness for borrowed money in an aggregate outstanding principal amount in excess of $250,000, in each case in a manner that is materially adverse to Lender’s interests under the Loan Documents, other than (A) the Obligations in accordance with this Agreement or a Bank Product Agreement, (B) Permitted Intercompany Advances, (C) any Term Loan Document if such amendment, modification or change is permitted under the Intercreditor Agreement and (D) Indebtedness permitted under clauses (c), (e) and (f) of the definition of Permitted Indebtedness;

(ii)           any Material Contract except to the extent that such amendment, modification, or change could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Change; or

(iii)       the Governing Documents of any Loan Party or any of its Subsidiaries if the effect thereof, either individually or in the aggregate, could reasonably be expected to be materially adverse to the interests of  Lender.

7.8              Change of Control.  Cause, permit, or suffer, directly or indirectly, any Change of Control.

7.9              Restricted Junior Payments.  Make any Restricted Junior Payment; provided, however, that, (a) so long as it is permitted by law, and so long as no Default or Event of Default shall have occurred and be continuing or would result therefrom and so long as such Loan Party or Subsidiary is a “pass-through” tax entity for United States federal income tax purposes such Loan Party or Subsidiary may declare and pay Pass-Through Tax Liabilities, (b) Parent may declare and pay dividends with respect to its common Stock payable solely in additional shares of its common Stock, and, with respect to its preferred Stock, payable solely in additional shares of such preferred Stock or in shares of its common Stock, (c) each Loan Party and each Subsidiary may make Restricted Junior Payments to Parent and to other Subsidiaries of Parent (and, in the case of a Restricted Junior Payment by a non-wholly owned Subsidiary, to any Loan Party and any other Subsidiary and to each other owner of Stock of such Subsidiary based on their relative ownership interests of the relevant class of Stock); provided that, except as otherwise expressly permitted under this Agreement, no Loan Party shall make a Restricted Junior Payment to a Subsidiary of Parent that is not a Loan Party, (d) Parent and its Subsidiaries may make Restricted Junior Payments pursuant to and in accordance with equity incentive plans, employment agreements or other benefit plans for management or employees of the Parent or any of its Subsidiaries in the ordinary course of such Person’s business in an amount not to exceed $1,000,000 in any fiscal year, (e) Parent or any of its Subsidiaries may make any other Restricted Junior Payment so long as immediately before and immediately after giving effect to any such Restricted Junior Payment (i) no Event of Default exists, and (ii) the Payment Conditions are satisfied and (f) Parent or any of its Subsidiaries may make any Restricted Junior Payment on the Closing Date in connection with the transactions contemplated under the Merger Agreement, Stock Purchase Agreement, Rollover Agreement and Asset Purchase Agreements, to the extent provided in such agreements.

7.10      Accounting Methods.  Modify or change its fiscal year or its method of accounting (other than as may be required to conform to GAAP).

7.11      Investments; Controlled Investments.

(a)       Except for Permitted Investments, directly or indirectly, make or acquire any Investment or incur any liabilities (including contingent obligations) for or in connection with any Investment (except for liabilities or obligations otherwise permitted under this Agreement).

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(b)      Commencing on the date that is no later than 90 days (or such longer period as Lender may expressly agree) after the Closing Date, subject to the Intercreditor Agreement, other than (i) an aggregate amount of not more than $250,000 with respect to any single Deposit Account of any Loan Party or $500,000 with respect to all Deposit Accounts of the Loan Parties, (ii) amounts deposited into any Excluded Account, (iii) ▇▇▇▇▇ cash of not more than $250,000 in the aggregate held at retail stores of Parent or any of its Subsidiaries and (iv) cash and Cash Equivalents held for no longer than three Business Days, no Loan Party shall make, acquire, or permit to exist Permitted Investments consisting of cash, Cash Equivalents, or amounts credited to Deposit Accounts or Securities Accounts (other than Deposit Accounts and Securities Accounts maintained with Lender) unless such Loan Party and the applicable bank or securities intermediary, as applicable, have entered into Control Agreements with Lender governing such Permitted Investments in order to perfect (and further establish) Lender’s Liens in such Permitted Investments. Except as provided in Section 6.12(j) and Sections 7.11(b)(i) and (ii), Borrowers and such Loan Parties shall not, and shall cause their Domestic Subsidiaries to not, establish or maintain any Deposit Account or Securities Account with a banking institution other than Lender; provided that in no event shall any Loan Party be required to pledge or provide a Control Agreement with respect to its account with Apex Clearing Corporation (or any other Person in a similar capacity) holding treasury shares of Parent (the “Treasury Shares Account”).

7.12      Transactions with Affiliates.  Directly or indirectly enter into or permit to exist any transaction with any Affiliate of any Borrower, any other Loan Party or any of their Subsidiaries except for:

(a)       transactions contemplated by the Loan Documents or transactions (other than the payment of management, consulting, monitoring, or advisory fees) with any Affiliates of any Borrower or any Loan Party in the ordinary course of business of such Borrower or Loan Party or Subsidiary, undertaken in good faith, upon fair and reasonable terms fully disclosed to Lender and no less favorable than would be obtained in a comparable arm’s length transaction with a non-Affiliate;

(b)      any customary fees and reasonable out-of-pocket costs to, and indemnities provided for the benefit of directors (or comparable managers) of such Loan Party or Subsidiary;

(c)       the payment of reasonable compensation, severance, or employee benefit arrangements to employees, officers, and outside directors of a Loan Party and its Subsidiaries in the ordinary course of business;

(d)      any issuances of securities or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment agreements, phantom equity, stock options and stock ownership plans approved by a Loan Party’s Board of Directors in the ordinary course of business and consistent with industry practice or such Loan Party’s past practice;

(e)       (i) any transaction consummated on the Closing Date that is contemplated under the Merger Agreement, the Stock Purchase Agreement or the Rollover Agreement and (ii) escrow and indemnity arrangements contemplated in the Asset Purchase Agreements;

(f)        any Loan Party or Subsidiary may pay management and consulting fees to Equity Sponsor or its Affiliates so long as (i) no Event of Default shall have occurred and be continuing or would result therefrom, and (ii) the aggregate amount of such fees paid during any fiscal year does not exceed $500,000 and related indemnities (such related indemnities may be paid irrespective of whether an Event of Default has occurred and is continuing);

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(g)       so long as no Event of Default shall have occurred and be continuing or would result therefrom, customary payments by Parent or any of its Subsidiaries in an amount not to exceed $1,000,000 in any fiscal year to the Equity Sponsor or any of its Affiliates made for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities (including in connection with acquisitions or divestitures), which payments are approved by the majority of the members of the Board of Directors and a majority of the disinterested members of the Board of Directors of Parent, in good faith;

(h)      transactions among Parent and its Subsidiaries or between Subsidiaries to the extent otherwise permitted under Section 7; and

(i)          transactions permitted by Section 7.3 or Section 7.9 or Section 7.11 or clause (h) or (i) of the definition of “Permitted Indebtedness”, or any Permitted Intercompany Advance.

7.13      [Reserved].

7.14      [Reserved].

7.15      [Reserved].

7.16      Inventory and Equipment with Bailees.  Store the Inventory or Equipment with an aggregate value in excess of $250,000 of any Loan Party at any time now or hereafter with a bailee, warehouseman, or similar party, except as set forth on Schedule 7.16 to the Information Certificate without at least 10 days’ prior written notice to Lender.

7.17      Capital Expenditures.  Make Capital Expenditures in excess of $5,000,000 in any fiscal year (“Annual CapEx Basket”); provided, however, a portion of the Annual CapEx Basket of up to $1,000,000, if not expended in the fiscal year for which it is permitted above, may be carried over for expenditure in the next following fiscal years.

8.            FINANCIAL COVENANT.

Each Borrower and Guarantor covenants and agrees that, until termination of all obligations of Lender to provide extensions of credit hereunder and indefeasible payment in full of the Obligations (other than (x) obligations under Bank Product Obligations and (y) contingent indemnification obligations not yet accrued and payable), Borrowers will comply with the following financial covenant:

(a)       Fixed Charge Coverage Ratio.  While a Covenant Testing Trigger Period is in effect, Borrowers shall maintain a Fixed Charge Coverage Ratio, measured monthly on a trailing twelve-month basis at the end of each month of not less than 1.0:1.0; provided, however, that prior to January 31, 2017, the Fixed Charge Coverage Ratio shall be measured as follows:

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9.            EVENTS OF DEFAULT.

Any one or more of the following events shall constitute an event of default (each, an “Event of Default”) under this Agreement:

9.1                            If any Borrower fails to pay when due and payable, or when declared due and payable, all or any portion of the Obligations consisting of principal of any Loan or any reimbursement obligation in respect of any Letter of Credit Disbursement when and as the same shall become due and payable;

9.2                            If any Borrower fails to pay when due and payable, or when declared due and payable, all or any portion of the Obligations payable under this Agreement consisting of interest, fees, charges or other amounts due Lender or any Bank Product Provider, reimbursement of Lender Expenses, or other amounts (except as covered in Section 9.1) constituting Obligations payable under this Agreement (including any portion thereof that accrues after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding) and such failure continues for a period of 3 Business Days;

9.3                            If any Loan Party or any of its Subsidiaries:

(a)       fails to perform or observe any covenant or other agreement contained in any of (i) Sections 6.1, 6.2, 6.3 (solely if any Loan Party is not in good standing in its jurisdiction of organization), 6.5(a) (solely with respect to F.I.C.A., F.U.T.A., federal income taxes and any other taxes or assessments the non-payment of which may result in a Lien having priority over Lender’s Liens), 6.5(b), 6.6 (solely with respect to the Loan Parties’ maintenance of insurance), 6.7 (solely if any Loan Party or any of its Subsidiaries refuses to allow Lender or its representatives or agents to visit its properties, inspect its assets or books or records, examine and make copies of its books and records, or discuss its affairs, finances, and accounts with its officers and employees in the manner required by such Section), 6.12, 6.14 or 6.18, (ii) Section 7  or (iii) Section 8;

(b)      fails to perform or observe any covenant or other agreement contained in: (A) any of Sections 6.3 (other than if a Loan Party is not in good standing in its jurisdiction of organization), 6.7 (other than if any Loan Party or any of its Subsidiaries refuses to allow Lender or its representatives or agents to visit its properties, inspect its assets or books or records, examine and make copies of its books

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or records or disclose it affairs, finances and accounts with its officers and employees), 6.8, 6.9, 6.11, 6.13 or 6.15, and such failure continues for a period of 15 days after the earlier of (i) the date on which such failure shall first become known to any officer of any Loan Party or (ii) the date on which written notice thereof is given to any Loan Party by Lender; or (B) Section 6.6 (other than with respect to the Loan Parties’ maintenance of insurance) and such failure continues for a period of 5 days after the earlier of (i) the date on which such failure shall first become known to any officer of any Loan Party or (ii) the date on which written notice thereof is given to any Loan Party by Lender; or

(c)       fails to perform or observe any covenant or other agreement contained in this Agreement or in any of the other Loan Documents, in each case, other than any such covenant or agreement that is unable to be cured (in which case an Event of Default shall occur immediately) or is the subject of another provision of this Section 9 (in which event such other provision of this Section 9 shall govern), and such failure continues for a period of 30 days after the earlier of (i) the date on which such failure shall first become known to any officer of any Loan Party or (ii) the date on which written notice thereof is given to any Loan Party by Lender;

9.4                            If one or more final judgments, orders, or awards for the payment of money involving an aggregate amount of $2,500,000 or more (except to the extent paid or covered (other than to the extent of customary deductibles) by insurance pursuant to which the insurer has not denied coverage) is entered or filed against a Loan Party or any of its Subsidiaries, or with respect to any of their respective assets, and either (a) there is a period of 30 consecutive days at any time after the entry of any such judgment, order, or award during which (1) the same is not discharged, satisfied, vacated, or bonded pending appeal, or (2) a stay of enforcement thereof is not in effect, or (b) enforcement proceedings are commenced upon such judgment, order, or award;

9.5                            a Loan Party or any of its Subsidiaries shall voluntarily commence an Insolvency Proceeding;

9.6                            If an Insolvency Proceeding is commenced against a Loan Party or any of its Subsidiaries and any of the following events occur: (a) such Loan Party or such Subsidiary  consents to the institution of such Insolvency Proceeding against it, (b) the petition commencing the Insolvency Proceeding is not timely controverted, (c) the petition commencing the Insolvency Proceeding is not dismissed within 60 calendar days of the date of the filing thereof, (d) an interim trustee is appointed to take possession of all or any substantial portion of the properties or assets of, or to operate all or any substantial portion of the business of, such Loan Party or its Subsidiary, or (e) an order for relief shall have been issued or entered therein; provided that Lender shall have no obligation to provide any extension of credit to Borrowers during such 60 calendar day period specified in subsection (c);

9.7                            If any Loan Party or any of its Subsidiaries is enjoined, restrained, or in any way prevented by court order from continuing to conduct all or substantially all of the business affairs of Parent and its Subsidiaries, taken as a whole;

9.8                            If there is (a) a default in one or more agreements to which a Loan Party or any of its Subsidiaries is a party with one or more third Persons governing the Indebtedness of such Loan Party or such Subsidiary (other than any Term Loan Document) involving an aggregate amount of $2,500,000 or more, and such default (i) occurs at the final maturity of the obligations thereunder, or (ii) results in a right by such third Person, irrespective of whether exercised, to accelerate the maturity of such Loan Party’s or its Subsidiary’s obligations thereunder, or (b) a default by any Loan Party or any of its Subsidiaries under, or an involuntary early termination of, one or more Hedge Agreements to which a Loan Party or any of its Subsidiaries is a party resulting in a liability of any Loan Party or any of its Subsidiaries in an aggregate amount of $2,500,000 or more;

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9.9                            If any warranty, representation, certificate, statement, or record made by any Loan Party or any of its Subsidiaries herein or in any other Loan Document or delivered in writing to Lender in connection with this Agreement or any other Loan Document proves to be untrue in any material respect as of the date of issuance or making or deemed making thereof;

9.10                    If the obligation of any Guarantor under its Guaranty or any other Loan Document to which any Guarantor is a party is terminated by operation of law or by such Guarantor (other than in accordance with the terms of this Agreement), or if any Guarantor fails to perform any obligation under its Guaranty or under any such Loan Document, or repudiates or revokes or purports to repudiate or revoke any obligation under its Guaranty, or under any such Loan Document, or any individual Guarantor dies or becomes incapacitated, or any other Guarantor ceases to exist for any reason (except as otherwise permitted hereunder);

9.11                    If this Agreement or any other Loan Document that purports to create a Lien, shall, for any reason (except as expressly permitted by this Agreement), fail or cease to create a valid and perfected and, except to the extent of Permitted Liens which are permitted purchase money Liens, the interests of lessors under Capital Leases, or Liens under the Term Loan Agreement (subject to the terms and provisions of the Intercreditor Agreement), first priority Lien on the Collateral covered thereby (other than with respect to an aggregate amount of Collateral with a value of less than $250,000);

9.12                    [Reserved];

9.13                    [Reserved];

9.14                    Any executive officer of a Loan Party is convicted of or pleads guilty to a felony offense under state or federal law, or a Loan Party hires an executive officer who has been convicted of or has plead guilty to any such felony offense;

9.15                    [Reserved];

9.16                    [Reserved];

9.17                    The validity or enforceability of any Loan Document against any Loan Party shall at any time for any reason be declared to be null and void, or a proceeding shall be commenced by a Loan Party or any of its Subsidiaries, or by any Governmental Authority having jurisdiction over a Loan Party or any of its Subsidiaries, seeking to establish the invalidity or unenforceability thereof, or a Loan Party or any of its Subsidiaries shall deny that such Loan Party or such Subsidiary has any liability or obligation purported to be created under any Loan Document;

9.18                    An “Event of Default” under, and as defined in, the Term Loan Agreement shall have occurred;

9.19                    An “Event of Default” under, and as defined in, any Factoring Agreement shall have occurred; or

9.20                    An “Event of Default” under, and as defined in the Convertible Notes Documents shall have occurred.

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10.    RIGHTS AND REMEDIES.

10.1      Rights and Remedies.  Upon the occurrence and during the continuation of an Event of Default, Lender may, in addition to any other rights or remedies provided for hereunder or under any other Loan Document or by applicable law, do any one or more of the following:

(a)       by notice to the Administrative Borrower (except, that, no such notice shall be required for an Event of Default arising under Section 9.5 or Section 9.6 herein), declare the Obligations (other than the Hedge Obligations, which may be accelerated in accordance with the terms of the applicable Hedge Agreement), whether evidenced by this Agreement or by any of the other Loan Documents immediately due and payable, whereupon the same shall become and be immediately due and payable and Borrowers shall be obligated to repay all of such Obligations in full, without presentment, demand, protest, or further notice or other requirements of any kind, all of which are hereby expressly waived by each Borrower and each other Loan Party;

(b)      by notice to the Administrative Borrower (except, that, no such notice shall be required for an Event of Default arising under Section 9.5 or Section 9.6 herein), declare the funding obligations of Lender under this Agreement terminated, whereupon such funding obligations shall immediately be terminated together with any obligation of Lender hereunder to make Advances, extend any other credit hereunder or issue Letters of Credit;

(c)       subject to the terms of the Intercreditor Agreement, give notice to an Account Debtor or other Person obligated to pay an Account, a General Intangible, Negotiable Collateral, or other amount due, notice that the Account, General Intangible, Negotiable Collateral or other amount due has been assigned to Lender for security and must be paid directly to Lender and Lender may collect the Accounts, General Intangible and Negotiable Collateral of each Borrower and each other Loan Party directly, and any collection costs and expenses shall constitute part of the  Obligations under the Loan Documents;

(d)      without notice to or consent from any Loan Party or any of its Subsidiaries, and without any obligation to pay rent or other compensation, take exclusive possession of all locations where any Loan Party or any of its Subsidiaries conduct its business or has any rights of possession and use the locations to store, process, manufacture, sell, use, and liquidate or otherwise dispose of items that are Collateral, and for any other incidental purposes deemed appropriate by Lender in good faith; and

(e)       exercise in respect of the Collateral, in addition to other rights and remedies provided for herein, in the other Loan Documents, or otherwise available to it, all the rights and remedies of a secured party on default under the Code or any other applicable law.

10.2      Additional Rights and Remedies.  Without limiting the generality of the foregoing, each Loan Party expressly agrees that upon the occurrence and during the continuation of an Event of Default:

(a)       Lender, without demand of performance or other demand, advertisement or notice of any kind (except a notice specified below of time and place of public or private sale) to or upon any Borrower, any other Loan Party or any other Person (all and each of which demands, advertisements and notices are hereby expressly waived to the maximum extent permitted by the Code or any other applicable law), may take immediate possession of all or any portion of the Collateral and (i) require Loan Parties to, and each Borrower and each other Loan Party hereby agrees that it will at its own expense and upon request of Lender forthwith, assemble all or part of the Collateral as directed by Lender and make it available to Lender at one or more locations designated by Lender where such Borrower or other Loan Party conducts business, and (ii) without notice except as specified below, sell the Collateral or any part thereof in one or more parcels at public or private sale, at any of Lender’s or Loan Party’s offices or elsewhere, for cash, on

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credit, and upon such other terms as Lender may deem commercially reasonable.  Each Borrower and each other Loan Party agrees that, to the extent notice of sale shall be required by law, at least 10 days’ notice to such Borrower or such other Loan Party of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification and such notice shall constitute a reasonable “authenticated notification of disposition” within the meaning of Section 9-611 of the Code.  Lender shall not be obligated to make any sale of Collateral regardless of notice of sale having been given.  Lender may adjourn any public or private sale from time to time, and such sale may be made at the time and place to which it was so adjourned.  Each Borrower and each other Loan Party agrees that the internet shall constitute a “place” for purposes of Section 9-610(b) of the Code.  Each Borrower and each other Loan Party agrees that any sale of Collateral to a licensor pursuant to the terms of a license agreement between such licensor and such Borrower or such other Loan Party is sufficient to constitute a commercially reasonable sale (including as to method, terms, manner, and time) within the meaning of Section 9-610 of the Code;

(b)      Lender may, in addition to other rights and remedies provided for herein, in the other Loan Documents, or otherwise available to it under applicable law and without the requirement of notice to or upon any Loan Party or any other Person (which notice is hereby expressly waived to the maximum extent permitted by the Code or any other applicable law), (i) with respect to any Loan Party’s Deposit Accounts in which Lender’s Liens are perfected by control under Section 9-104 of the Code, instruct the bank maintaining such Deposit Account for the applicable Loan Party to pay the balance of such Deposit Account to or for the benefit of Lender, and (ii) with respect to any Loan Party’s Securities Accounts in which Lender’s Liens are perfected by control under Section 9-106 of the Code, instruct the securities intermediary maintaining such Securities Account for the applicable Loan Party to (A) transfer any cash in such Securities Account to or for the benefit of Lender, or (B) liquidate any financial assets in such Securities Account that are customarily sold on a recognized market and transfer the cash proceeds thereof to or for the benefit of Lender;

(c)       any cash held by Lender as Collateral and all cash proceeds received by Lender in respect of any sale of, collection from, or other realization upon all or any part of the Collateral shall be applied against the Obligations in the order set forth in Section 10.5.  In the event the proceeds of Collateral are insufficient to satisfy all of the Obligations in full, each Borrower and each other Loan Party shall remain jointly and severally liable for any such deficiency; and

(d)      the Obligations arise out of a commercial transaction, and that if an Event of Default shall occur Lender shall have the right to an immediate writ of possession without notice of a hearing.  Lender shall have the right to the appointment of a receiver for each Loan Party or for the properties and assets of each Loan Party, and each Borrower and each other Loan Party hereby consents to such rights and such appointment and hereby waives any objection such Borrower or such Loan Party may have thereto or the right to have a bond or other security posted by Lender.

Notwithstanding the foregoing or anything to the contrary contained in Section 10.1, upon the occurrence of any Default or Event of Default described in Section 9.5 or Section 9.6, in addition to the remedies set forth above, without any notice to any Borrower or any other Person or any act by Lender, all obligations of Lender to provide any further extensions of credit hereunder shall automatically terminate and the Obligations (other than the Hedge Obligations), shall automatically and immediately become due and payable and each Borrower shall be obligated to repay all of such Obligations in full, without presentment, demand, protest, or notice of any kind, all of which are expressly waived by each Borrower.

10.3      Lender Appointed Attorney in Fact.  Each Borrower and each other Loan Party hereby irrevocably appoints Lender its attorney-in-fact, with full authority in the place and stead of such Borrower and such Loan Party and in the name of such Borrower or such Loan Party or otherwise, at such

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time as an Event of Default has occurred and is continuing, to take any action and to execute any instrument which Lender may reasonably deem necessary or advisable to accomplish the purposes of this Agreement, including:

(a)       to ask, demand, collect, ▇▇▇ for, recover, compromise, receive and give acquittance and receipts for moneys due and to become due under or in connection with the Accounts or any other Collateral of such Borrower or such other Loan Party;

(b)      to receive, indorse, and collect any drafts or other instruments, documents, Negotiable Collateral or Chattel Paper;

(c)       to file any claims or take any action or institute any proceedings which Lender may deem necessary or desirable for the collection of any of the Collateral of such Borrower or such other Loan Party or otherwise to enforce the rights of Lender with respect to any of the Collateral;

(d)      to repair, alter, or supply Goods, if any, necessary to fulfill in whole or in part the purchase order of any Person obligated to Borrower or such other Loan Party in respect of any Account of such Borrower or such other Loan Party;

(e)       to use any Intellectual Property or Intellectual Property Licenses of such Borrower or such other Loan Party including but not limited to any labels, Patents, Trademarks, trade names, URLs, domain names, industrial designs, Copyrights, or advertising matter, in preparing for sale, advertising for sale, or selling Inventory or other Collateral and to collect any amounts due under Accounts, contracts or Negotiable Collateral of such Borrower or such other Loan Party;

(f)        to take exclusive possession of all locations where each Borrower or other Loan Party conducts its business or has rights of possession, without notice to or consent of any Borrower or any Loan Party and to use such locations to store, process, manufacture, sell, use, and liquidate or otherwise dispose of items that are Collateral, without obligation to pay rent or other compensation for the possession or use of any location;

(g)       Lender shall have the right, but shall not be obligated, to bring suit in its own name or in the applicable Loan Party’s name, to enforce the Intellectual Property and Intellectual Property Licenses and, if Lender shall commence any such suit, the appropriate Borrower or such other Loan Party shall, at the request of Lender, do any and all lawful acts and execute any and all proper documents reasonably required by Lender in aid of such enforcement; and

(h)      to the extent permitted by law, such Borrower and each other Loan Party hereby ratifies all that such attorney-in-fact shall lawfully do or cause to be done by virtue hereof.  This power of attorney is coupled with an interest and shall be irrevocable until all commitments of Lender under this Agreement to provide extensions of credit are terminated and all Obligations have been paid in full in cash.

10.4      Remedies Cumulative.  The rights and remedies of Lender under this Agreement, the other Loan Documents, and all other agreements shall be cumulative.  Lender shall have all other rights and remedies not inconsistent herewith as provided under the Code, by law, or in equity.  No exercise by Lender of one right or remedy shall be deemed an election, and no waiver by Lender of any Default or Event of Default shall be deemed a continuing waiver.  No delay by Lender shall constitute a waiver, election, or acquiescence by it.

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10.5      Crediting of Payments and Proceeds.  In the event that the Obligations have been accelerated pursuant to Section 10.1 or during an Event of Default the Lender has exercised any remedy set forth in this Agreement or any other Loan Document, all payments received by Lender upon the Obligations and all net proceeds from the enforcement of the Obligations shall be applied, subject to the Intercreditor Agreement, to the Obligations in such manner as Lender shall determine in its discretion and, thereafter, to Borrowers (to be wired to the Designated Account) or such other Person entitled thereto under applicable law.  For greater certainty, the acceleration of the Obligations under this Agreement shall in no way affect, terminate or accelerate the Hedge Obligations (which are governed by the terms of the applicable Hedge Agreement).

10.6      Marshaling.  Lender  shall not be required to marshal any present or future collateral security (including but not limited to the Collateral) for, or other assurances of payment of, the Obligations or any of them or to resort to such collateral security or other assurances of payment in any particular order, and all of its rights and remedies under this Agreement and under the other Loan Documents and in respect of such collateral security and other assurances of payment shall be cumulative and in addition to all other rights and remedies, however existing or arising.  To the extent that it lawfully may, each Borrower and each other Loan Party hereby agrees that it will not invoke any law relating to the marshaling of collateral which might cause delay in or impede the enforcement of Lender’s rights and remedies under this Agreement or under any other Loan Document or instrument creating or evidencing any of the Obligations or under which any of the Obligations is outstanding or by which any of the Obligations is secured or payment thereof is otherwise assured, and, to the extent that it lawfully may, each Borrower hereby irrevocably waives the benefits of all such laws.

10.7      License.  Solely for the purpose of enabling Lender to exercise its rights and remedies hereunder, at such time as Lender is lawfully entitled to exercise such rights and remedies, each Borrower and each other Loan Party hereby grants to Lender a non-exclusive, worldwide license (without the payment of royalties to any Debtor) to use or otherwise exploit all Intellectual Property rights of such Borrower or such Loan Party for the purpose of: (a) completing the manufacture of any in-process materials while any Event of Default exists so that such materials become saleable Inventory, all in accordance with the same quality standards previously adopted by such Borrower or such other Loan Party for its own manufacturing; and (b) selling, leasing or otherwise disposing of any or all Collateral while any Event of Default exists; provided that such license shall be subject to the exclusive rights of any licensee under a license granted prior to such Event of Default, and (ii) the quality of any products or services in connection with which any Trademarks licensed hereunder are used will not be materially inferior to the quality of such services or products provided by such Borrower or such Loan Party under such Trademarks immediately prior to such Event of Default and such Borrower or such Loan Party shall have the right to inspect any such products and services to monitor compliance with such standard.

11.    WAIVERS; INDEMNIFICATION.

11.1      Demand; Protest; etc.  Each Borrower and each other Loan Party waives demand, protest, notice of protest, notice of default or dishonor, notice of payment and nonpayment, nonpayment at maturity, release, compromise, settlement, extension, or renewal of documents, instruments, chattel paper, and guarantees at any time held by Lender on which such Borrower or such other Loan Party may in any way be liable.

11.2      The Lender’s Liability for Collateral.  Each Borrower and each other Loan Party hereby agrees that:  (a) so long as Lender complies with its obligations, if any, under the Code, Lender shall not in any way or manner be liable or responsible for:  (i) the safekeeping of the Collateral, (ii) any loss or damage thereto occurring or arising in any manner or fashion from any cause, (iii) any diminution in the value thereof, or (iv) any act or default of any carrier, warehouseman, bailee, forwarding agency, or other

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Person, and (b) all risk of loss, damage, or destruction of the Collateral shall be borne by each Borrower and such other Loan Parties.

11.3      Indemnification.  Each Borrower and each other Loan Party shall pay, indemnify, defend, and hold the Lender-Related Persons (each, an “Indemnified Person”) harmless (to the fullest extent permitted by applicable law) from and against any and all claims, demands, suits, actions, investigations, proceedings, liabilities, fines, costs, penalties, and damages, and all reasonable fees and disbursements of attorneys, experts, or consultants and all other costs and expenses actually incurred and documented in connection therewith or in connection with the enforcement of this indemnification (as and when they are incurred and irrespective of whether suit is brought), at any time asserted against, imposed upon, or incurred by any of them (a) in connection with or as a result of or related to the execution and delivery, enforcement, performance, or administration (including any restructuring, forbearance or workout with respect hereto) of this Agreement, any of the other Loan Documents, any Bank Product Agreement or the transactions contemplated hereby or thereby or the monitoring of compliance by each Borrower and each other Loan Party and each of its Subsidiaries with the terms of the Loan Documents, (b) with respect to any investigation, litigation, or proceeding related to this Agreement, any other Loan Document, or the use of the proceeds of the credit provided hereunder (irrespective of whether any Indemnified Person is a party thereto), or any act, omission, event, or circumstance in any manner related thereto, (c) in connection with the custody, preservation, use or operation of, or, while an Event of Default exists, the sale of, collection from, or other realization upon, any of the Collateral in accordance with this Agreement and the other Loan Documents, (d) with respect to the failure by any Borrower or any other Loan Party to perform or observe any of the provisions hereof or any other Loan Document, (e) in connection with the exercise or enforcement of any of the rights of Lender hereunder or under any other Loan Document, and (f) in connection with or arising out of any presence or release of Hazardous Materials at, on, under, to or from any assets or properties owned, leased or operated by any Borrower or any other Loan Party or any Subsidiary of a Borrower or any other Loan Party or any Environmental Actions, Environmental Liabilities or Remedial Actions related in any way to any such assets or properties of such Loan Party or any of its Subsidiaries (each and all of the foregoing, the “Indemnified Liabilities”).  The foregoing to the contrary notwithstanding, no Borrower or any other Loan Party shall have any obligation to any Indemnified Person under this Section 11.3 with respect to any Indemnified Liability that a court of competent jurisdiction finally determines to have resulted from the bad faith, gross negligence or willful misconduct of such Indemnified Person or its officers, directors, employees, or attorneys.  This provision shall survive the termination of this Agreement and the repayment of the Obligations.  If any Indemnified Person makes any payment to any other Indemnified Person with respect to an Indemnified Liability as to which a Borrower or any other Loan Party was required to indemnify the Indemnified Person receiving such payment, the Indemnified Person making such payment is entitled to be indemnified and reimbursed by such Borrower or such other Loan Party with respect thereto.  WITHOUT LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY OTHER PERSON.

12.    NOTICES.

Unless otherwise provided in this Agreement, all notices or demands relating to this Agreement or any other Loan Document shall be in writing and (except for financial statements and other informational documents which may be sent by first-class mail, postage prepaid) shall be personally delivered or sent by certified mail (postage prepaid, return receipt requested), overnight courier, electronic mail (at such email addresses as a party may designate in accordance herewith), or telefacsimile.  In the case of notices or demands to Borrowers, any other Loan Party or Lender, as the case may be, they shall be sent to the respective address set forth below:

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Any party hereto may change the address at which it is to receive notices hereunder, by notice in writing in the foregoing manner given to the other parties.  All notices or demands sent in accordance with this Section 12 shall be deemed received on the earlier of the date of actual receipt or 3 Business Days after the deposit thereof in the mail; provided, that (a) notices sent by overnight courier service shall be deemed to have been given when received, (b) notices by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient) and (c) notices by electronic mail shall be deemed received upon the sender’s receipt of an acknowledgment from the intended recipient (such as by the “return receipt requested” function, as available, return email or other written acknowledgment).  Any notice given by Lender to any Borrower as provided in this Section 12 shall be deemed sufficient notice as to all Loan Parties, regardless of whether each Loan Party is sent a separate copy of such notice or whether each Loan Party is specifically identified in such notice.

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13.    CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

(a)       THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO AS WELL AS ALL CLAIMS, CONTROVERSIES OR DISPUTES ARISING UNDER OR RELATED TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

(b)      THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY BE TRIED AND LITIGATED IN THE STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE CITY OF NEW YORK AND THE COUNTY OF NEW YORK, STATE OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT LENDER’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE LENDER ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.  EACH BORROWER EACH OTHER LOAN PARTY AND LENDER WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 13(b).

(c)       TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH BORROWER, EACH OTHER LOAN PARTY AND LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHTS, IF ANY, TO A JURY TRIAL OF ANY CLAIM, CONTROVERSY, DISPUTE OR CAUSE OF ACTION DIRECTLY OR INDIRECTLY BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS (EACH, A “CLAIM”).  EACH BORROWER EACH OTHER LOAN PARTY AND LENDER REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

(d)      NO CLAIM MAY BE MADE BY ANY PARTY HERETO AGAINST ANY OTHER PARTY, OR ANY AFFILIATE OF SUCH OTHER PARTY OR ANY  DIRECTOR, OFFICER, EMPLOYEE, COUNSEL, REPRESENTATIVE, AGENT, OR ATTORNEY-IN-FACT OF ANY OF THEM FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, OR PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER THEORY OF LIABILITY ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION THEREWITH, AND EACH PARTY HERETO HEREBY WAIVES, RELEASES, AND AGREES NOT TO ▇▇▇ UPON ANY CLAIM FOR SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.

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14.    ASSIGNMENTS; SUCCESSORS.  This Agreement shall bind and inure to the benefit of the respective successors and assigns of each of the parties; provided, however, that (a) no Borrower or any other Loan Party may assign this Agreement or any other Loan Document in whole or in part, or any rights or duties hereunder or thereunder, without Lender’s prior written consent (unless otherwise expressly permitted pursuant to this Agreement) and any such prohibited assignment shall be absolutely void ab initio, and (b) Lender may not assign this Agreement or the other Loan Documents in whole or in part, or its rights and duties hereunder and thereunder, without the prior written consent of the Administrative Borrower, except (A) during the existence of an Event of Default under Section 9.1, 9.2, 9.5 or 9.6, (B) any assignment to another lender that has previously become a Lender in accordance with the terms hereof, (C) any assignment to an Affiliate or related fund of any Lender, (D) any assignment in connection with the merger, consolidation, sale, transfer or other disposition of all or any substantial portion of Lender’s business, loan portfolio or other assets and (E) Lender may, after notice to Administrative Borrower, sell participations in, all or any part of the Advances, the Letters of Credit, the commitments to make Advances or any other interest herein to another financial institution or other Person on terms and conditions acceptable to Lender; provided, that, (i) Lender’s obligations under this Agreement and the other Loan Documents shall remain unchanged, (ii)  Lender shall remain responsible for the performance of such obligations, and the Loan Parties shall continue to deal solely and directly with Lender in connection with Lender’s rights and obligations under this Agreement and the other Loan Documents, (iii) the participant shall not have any rights under this Agreement or any of the other Loan Documents (the participant’s rights against Lender in respect of such participation to be those set forth in the agreement executed by such Lender in favor of the Participant relating thereto) and all amounts payable by any Loan Party hereunder shall be determined as if Lender had not sold such participation, and (iv) no consent or approval by Parent or any Loan Party shall be required in connection with any such participation. No consent to assignment by the Lender shall release any Borrower from its Obligations. Nothing in this Agreement shall prevent or prohibit Lender from pledging its rights under and interest in this Agreement to a Federal Reserve Bank in support of borrowings made by Lender from such Federal Reserve Bank.

15.    AMENDMENTS; WAIVERS.  No amendment or modification of this Agreement or any other Loan Document or any other document or agreement described in or related to this Agreement shall be effective unless it has been agreed to by Lender in a writing and the Loan Parties party thereto (other than any supplements or modifications to the Information Certificate or any joinder to the Guaranty required hereunder, which shall require only the signature of the applicable Loan Party).  No failure by Lender to exercise any right, remedy, or option under this Agreement or any other Loan Document, or delay by Lender in exercising the same, will operate as a waiver thereof.  No waiver by Lender will be effective unless it is in writing, and then only to the extent specifically stated.  No waiver by Lender on any occasion shall affect or diminish Lender’s rights thereafter to require strict performance by Borrowers or any other Loan Party of any provision of this Agreement.  Lender’s rights under this Agreement and the other Loan Documents will be cumulative and not exclusive of any other right or remedy that Lender may have.

16.    TAXES.

(a)       Payments Free of Taxes.  All payments made by any Loan Party hereunder or under any other Loan Document shall be made free and clear of, and without deduction or withholding for, any Taxes, except as required by applicable law.  If any applicable law (as determined in the good faith discretion of the applicable Loan Party) requires the deduction or withholding of any Tax from any such payment by a Loan Party, then the applicable Loan Party shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable by the applicable Loan Party shall be increased as necessary so that after such deduction or withholding

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has been made (including such deductions and withholdings applicable to additional sums payable under this Section 16(a)) Lender receives an amount equal to the sum it would have received had no such deduction or withholding been made; provided, however, that the Loan Parties shall not be required to increase any such amounts if the increase in such amount payable results from Lender’s willful misconduct or gross negligence (as finally determined by a court of competent jurisdiction).  Each Loan Party will furnish to Lender as promptly as practicable after any payment of Taxes by such Loan Party to a Governmental Authority pursuant to this Section 16, certified copies of tax receipts evidencing such payment by such Loan Party, a copy of the return reporting such payment, or other evidence of such payment reasonably satisfactory to Lender.

(b)      Payment of Other Taxes by the Loan Parties.  The Loan Parties shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of Lender timely reimburse it for the payment of, any Other Taxes.

(c)       Indemnification by the Loan Parties.  The Loan Parties shall jointly and severally indemnify Lender, within 10 days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 16) payable or paid by Lender or required to be withheld or deducted from a payment to Lender 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. A certificate as to the amount of such payment or liability delivered to Administrative Borrower by Lender shall be conclusive absent manifest error.

(d)      Tax Status of Lender.  If Lender is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document, Lender shall deliver to Administrative Borrower, at the time or times reasonably requested by Administrative Borrower, such properly completed and executed documentation reasonably requested by Administrative Borrower as will permit such payments to be made without withholding or at a reduced rate of withholding.  In addition, if reasonably requested by Administrative Borrower, Lender shall deliver such other documentation prescribed by applicable law or reasonably requested by Administrative Borrower as will enable Administrative Borrower to determine whether or not Lender is subject to backup withholding or information reporting requirements.  Without limiting the generality of the foregoing:

(i)               Lender shall deliver to Administrative Borrower on or prior to the date on which Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Administrative Borrower), executed copies of IRS Form W-9 certifying that Lender is exempt from U.S. federal backup withholding tax; and

(ii)           if a payment made to Lender under any Loan Document 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 IRC, as applicable), Lender shall deliver to Administrative Borrower at the time or times prescribed by law and at such time or times reasonably requested by Administrative Borrower such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the IRC) and such additional documentation reasonably requested by Administrative Borrower as may be necessary for the Loan Parties to comply with their obligations under FATCA and to determine that Lender has complied with Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for purposes of this clause (ii), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

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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 Administrative Borrower in writing of its legal inability to do so.

(e)       Treatment of Certain Refunds.  If Lender determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 16 (including by the payment of additional amounts pursuant to this Section 16), it shall pay to the indemnifying Loan Party an amount equal to such refund (but only to the extent of indemnity payments made under this Section 16 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund).  Such indemnifying Loan Party, upon the request of Lender, shall repay to Lender the amount paid over pursuant to this paragraph (e) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that Lender is required to repay such refund to such Governmental Authority.  Notwithstanding anything to the contrary in this paragraph (e), in no event will Lender be required to pay any amount to an indemnifying Loan Party pursuant to this paragraph (e) the payment of which would place Lender in a less favorable net after-Tax position than Lender 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.  This paragraph (e) shall not be construed to require any party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to any Person.

(f)        Survival.  Each party’s obligations under this Section 16 shall survive any assignment of rights by Lender, the termination of the commitments hereunder and the repayment, satisfaction or discharge of all obligations under any Loan Document.

17.    GENERAL PROVISIONS.

17.1      Effectiveness.  This Agreement shall be binding and deemed effective when executed by each Borrower, each other Loan Party and Lender.

17.2      Section Headings.  Headings and numbers have been set forth herein for convenience only.  Unless the contrary is compelled by the context, everything contained in each Section applies equally to this entire Agreement.

17.3      Interpretation.  Neither this Agreement nor any uncertainty or ambiguity herein shall be construed against the Lender or any Loan Party, whether under any rule of construction or otherwise.  On the contrary, this Agreement has been reviewed by all parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to accomplish fairly the purposes and intentions of all parties hereto.

17.4      Severability of Provisions.  Each provision of this Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision.

17.5      Debtor-Creditor Relationship.  The relationship between the Lender, on the one hand, and the Loan Parties, on the other hand, is solely that of creditor and debtor.  Lender shall not have (and shall not be deemed to have) any fiduciary relationship or duty to any Loan Party arising out of or in connection with the Loan Documents or the transactions contemplated thereby, and there is no agency or joint venture relationship between Lender, on the one hand, and the Loan Parties, on the other hand, by virtue of any Loan Document or any transaction contemplated therein.

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17.6      Counterparts; Electronic Execution.  This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement.  Delivery of an executed counterpart of this Agreement by telefacsimile or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Agreement.  Any party delivering an executed counterpart of this Agreement by telefacsimile or other electronic method of transmission also shall deliver an original executed counterpart of this Agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement.

17.7      Revival and Reinstatement of Obligations.  If the incurrence or payment of the Obligations by any Borrower or any other Loan Party or the transfer to Lender of any property should for any reason subsequently be asserted, or declared, to be void or voidable under any state or federal law relating to creditors’ rights, including provisions of the Bankruptcy Code relating to fraudulent conveyances, preferences, or other voidable or recoverable payments of money or transfers of property (each, a “Voidable Transfer”), and if Lender is required to repay or restore, in whole or in part, any such Voidable Transfer, or elects to do so upon the reasonable advice of its counsel, then, as to any such Voidable Transfer, or the amount thereof that Lender is required or elects to repay or restore, and as to all reasonable costs, expenses, and attorneys fees of Lender related thereto, the liability of such Borrower and such other Loan Party automatically shall be revived, reinstated, and restored and shall exist as though such Voidable Transfer had never been made and all of Lender’s Liens in the Collateral shall be automatically reinstated without further action.

17.8      Confidentiality.

(a)       Lender agrees that information regarding the Loan Parties and their Subsidiaries, their operations, assets, and existing and contemplated business plans (“Confidential Information”) shall be treated by Lender in a confidential manner, and shall not be disclosed by Lender to Persons who are not parties to this Agreement, except:  (i) to attorneys for and other advisors, accountants, auditors, and consultants to Lender and to employees, directors and officers of Lender (the Persons in this clause (i), “Lender Representatives”) on a “need to know” basis in connection with this Agreement and the transactions contemplated hereby and on a confidential basis, (ii) to Subsidiaries and Affiliates of Lender, provided that any such Subsidiary or Affiliate shall have agreed to receive such information hereunder subject to the terms of this Section 17.8, (iii) as may be required by regulatory authorities, (iv) as may be required by statute, decision, or judicial or administrative order, rule, or regulation; provided that (x) prior to any disclosure under this clause (iv), the disclosing party agrees to provide Borrowers with prior notice thereof, to the extent that it is practicable to do so and to the extent that the disclosing party is permitted to provide such prior notice to Borrowers pursuant to the terms of the applicable statute, decision, or judicial or administrative order, rule, or regulation and (y) any disclosure under this clause (iv) shall be limited to the portion of the Confidential Information as may be required by such statute, decision, or judicial or administrative order, rule, or regulation, (v) as may be agreed to in advance in writing by Borrowers, (vi) as requested or required by any Governmental Authority pursuant to any subpoena or other legal process, provided, that, (x) prior to any disclosure under this clause (vi) the disclosing party agrees to provide Borrowers with prior written notice thereof, to the extent that it is practicable to do so and to the extent that the disclosing party is permitted to provide such prior written notice to Borrowers pursuant to the terms of the subpoena or other legal process and (y) any disclosure under this clause (vi) shall be limited to the portion of the Confidential Information as may be required by such Governmental Authority pursuant to such subpoena or other legal process, (vii) as to any such information that is or becomes generally available to the public (other than as a result of prohibited disclosure by Lender or Lender Representatives), (viii) in connection with any assignment, participation  or pledge of any Lender’s interest under this Agreement, provided that prior to receipt of Confidential Information any such

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assignee, participant, or pledgee shall have agreed in writing to receive such Confidential Information hereunder subject to the terms of this Section 17.8, (ix) in connection with any litigation or other adversary proceeding involving parties hereto which such litigation or adversary proceeding involves claims related to the rights or duties of such parties under this Agreement or the other Loan Documents; (x) to equity owners of each Loan Party and (xi) in connection with, and to the extent reasonably necessary for, the exercise of any secured creditor remedy under this Agreement or under any other Loan Document.

(b)      Anything in this Agreement to the contrary notwithstanding, Lender may use the name, logos, and other insignia of the Loan Parties and the Maximum Revolver Amount provided hereunder in any “tombstone” or comparable advertising, on its website or in other marketing materials of Lender; provided that Lender shall provide a draft reasonably in advance of any advertising material to the Borrowers prior to the publication thereof.

17.9      Lender Expenses.  Each Borrower and each other Loan Party agrees to pay the Lender Expenses on the earlier of (i) the date invoiced to Administrative Borrower after they are accrued or incurred pursuant to and in accordance with Section 2.6(c) or (ii) after the occurrence and during the continuance of an Event of Default, the date on which written demand therefor is made by Lender.  Borrower agrees that its obligations contained in this Section 17.9 shall survive payment or satisfaction in full of all other Obligations.

17.10            Setoff.  If an Event of Default has occurred and is continuing, Lender may, in its sole discretion at any time and from time to time, to the fullest extent permitted by law, set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time owing by Lender to or for the credit or the account of the Borrowers or any Guarantor against any of and all the Obligations held by Lender, irrespective of whether or not Lender shall have made any demand under the Loan Documents and although such obligations may be unmatured. The Lender shall notify the Administrative Borrower of such set-off or application, provided that any failure to give or any delay in giving such notice shall not affect the validity of any such set-off or application under this Section.

17.11            Survival.  All representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that Lender may have had notice or knowledge of any Default or Event of Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as any of the Obligations is outstanding and unpaid or any Letter of Credit is outstanding and so long as the obligation of Lender to provide extensions of credit hereunder has not expired or been terminated.

17.12            Patriot Act.  Lender hereby notifies the Loan Parties that pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record information that identifies each Loan Party, which information includes the name and address of each Loan Party and other information that will allow such Lender to identify each Loan Party in accordance with the Patriot Act. In addition, if Lender is required by law or regulation or internal policies to do so, it shall have the right to periodically conduct (a) Patriot Act searches, OFAC/PEP searches, and customary individual background checks for the Loan Parties, and (b) OFAC/PEP searches and customary individual  background checks of the Loan Parties’ senior management and key principals, and each Borrower and each other Loan Party agrees to cooperate in respect of the conduct of such searches invoiced to Administrative Borrower and further agrees that the

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reasonable costs and charges for such searches shall constitute Lender Expenses hereunder and be for the account of Borrowers.

17.13            Integration.  This Agreement, together with the other Loan Documents, reflects the entire understanding of the parties with respect to the transactions contemplated hereby and shall not be contradicted or qualified by any other agreement, oral or written, before the date hereof.  The foregoing to the contrary notwithstanding, all Bank Product Agreements, if any, are independent agreements governed by the written provisions of such Bank Product Agreements, which will remain in full force and effect, unaffected by any repayment, prepayments, acceleration, reduction, increase, or change in the terms of any credit extended hereunder, except as otherwise expressly provided in such Bank Product Agreement.

17.14            Bank Product Providers.  Each Bank Product Provider shall be deemed a third party beneficiary hereof and of the provisions of the other Loan Documents for purposes of any reference in a Loan Document to the parties for whom Lender is acting.  Lender hereby agrees to act as agent for such Bank Product Providers and, by virtue of entering into a Bank Product Agreement, the applicable Bank Product Provider shall be automatically deemed to have appointed Lender as its agent and to have accepted the benefits of the Loan Documents; it being understood and agreed that the rights and benefits of each Bank Product Provider under the Loan Documents consist exclusively of such Bank Product Provider’s being a beneficiary of the Liens and security interests (and, if applicable, guarantees) granted to Lender and the right to share in and receive payments and collections of the Collateral and payments from Lender from amounts charged to the Loan Account or that are otherwise collected from the Loan Parties for the account of a Bank Product Provider as more fully set forth herein and in the other Loan Documents. In addition, each Bank Product Provider, by virtue of entering into a Bank Product Agreement, shall be automatically deemed to have agreed that Lender shall have the right, but shall have no obligation, to establish, maintain, relax, or release Reserves in respect of the Bank Product Obligations and that if Reserves are established there is no obligation on the part of Lender to determine or ensure whether the amount of any such Reserve is appropriate or not.  Notwithstanding anything to the contrary in this Agreement or any other Loan Document, no Bank Product Provider (other than Lender in its capacity as lender hereunder) shall have any voting or approval rights hereunder solely by virtue of its status as the provider or holder of such agreements or products or the Obligations owing thereunder, nor shall the consent of any such provider or holder be required for any matter hereunder or under any of the other Loan Documents, including as to any matter relating to the Collateral or the release of Collateral or any other Loan Party.

[Signature pages to follow]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered as of the date first above written.

Signature Page to Credit and Security Agreement

Signature Page to Credit and Security Agreement

Signature Page to Credit and Security Agreement

Signature Page to Credit and Security Agreement

Signature Page to Credit and Security Agreement

SCHEDULE 1.1

TO CREDIT AND SECURITY AGREEMENT

a.             Definitions.  As used in this Agreement, the following terms shall have the following definitions:

“Account” means an account (as that term is defined in Article 9 of the Code).

“Account Debtor” means an account debtor (as that term is defined in the Code).

“Activation Notice” has the meaning specified therefor in Section 6.12(j).

“Additional Documents” has the meaning specified therefor in Section 6.16.

“Administrative Borrower” shall have the meaning specified therefor in Section 2.17.

“Advances” has the meaning specified therefor in Section 2.1(a).

“Affiliate” means, as applied to any Person, any other Person who controls, is controlled by, or is under common control with, such Person.  For purposes of this definition, “control” means the possession, directly or indirectly through one or more intermediaries, of the power to direct the management and policies of a Person, whether through the ownership of Stock, by contract, or otherwise; provided, however, that, for purposes of the definition of Eligible Accounts and Section 7.12: (a) any Person which owns directly or indirectly 10% or more of the Stock having ordinary voting power for the election of the board of directors or equivalent governing body of a Person or 10% or more of the partnership or other ownership interests of a Person (other than as a limited partner of such Person) shall be deemed an Affiliate of such Person, (b) each director (or comparable manager) of a Person shall be deemed to be an Affiliate of such Person, and (c) each partnership in which a Person is a general partner shall be deemed an Affiliate of such Person.

“Agreement” means the Credit and Security Agreement to which this Schedule 1.1 is attached.

“Applicable Margin” means:

(a)       0.50 percentage points with respect to Base Rate Loans; and

(b)      1.75 percentage points with respect to LIBOR Loans.

“Asset Purchase Agreements” means that certain (i) Asset Purchase Agreement, dated as of September 8, 2015, by and among Parent, Joe’s Holdings LLC and Sequential Brands Group, Inc. and/or (ii) Asset Purchase Agreement, dated as of September 8, 2015, by and between Parent and GBG USA Inc., in each case, as amended, extended, restated, modified and/or supplemented prior to or on the Closing Date.

“Assignment of Factoring Proceeds” shall mean the Assignment and Intercreditor Agreement, dated as of January 28, 2016, by and among Factor, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Designs, LLC, ▇▇▇▇▇▇ Clothing, LLC, Term Loan Agent and Lender.

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“Authorized Person” means any one of the individuals identified on Schedule A-2, as such schedule is updated from time to time by written notice from the Administrative Borrower to Lender.

“Availability” means, as of any date of determination, the amount that Borrowers are entitled to borrow as Advances under Section 2.1 (after giving effect to all then outstanding Obligations).

“Bank Product” means any one or more of the following financial products or accommodations extended to a Borrower or a Loan Party or any of its/their Subsidiaries by a Bank Product Provider:  (a) commercial credit cards, (b) commercial credit card processing services, (c) debit cards, (d) stored value cards, (e) purchase cards (including so-called “procurement cards” or “P-cards”), (f) Cash Management Services, or (g) transactions under Hedge Agreements.

“Bank Product Agreements” means those agreements entered into from time to time by a Borrowers  or a Loan Party or any of its/their Subsidiaries with a Bank Product Provider in connection with the obtaining of any of the Bank Products, including all Cash Management Documents.

“Bank Product Collateralization” means providing cash collateral (pursuant to documentation reasonably satisfactory to Lender) to be held by Lender for the benefit of the Bank Product Provider in an amount determined by Lender as sufficient to satisfy the reasonably estimated credit exposure with respect to the then existing Bank Product Obligations (other than Hedge Obligations).

“Bank Product Obligations” means (a) all obligations, indebtedness, liabilities, reimbursement obligations, fees, or expenses owing by a Borrower or a Loan Party or any of its/their Subsidiaries to Lender or another Bank Product Provider pursuant to or evidenced by a Bank Product Agreement and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, liquidated or unliquidated, determined or undetermined, voluntary or involuntary, due, not due or to become due,  incurred in the past or  now existing or hereafter arising, however arising and (b) all Hedge Obligations.

“Bank Product Provider” means Lender or any of its Affiliates that provide Bank Products to a Borrower or a Loan Party or any of its/ their Subsidiaries.

“Bank Product Reserve Amount” means, as of any date of determination, the Dollar amount of reserves that Lender has determined in its Permitted Discretion it is necessary or appropriate to establish (based upon Lender’s reasonable determination of the credit and operating risk exposure to Borrowers and the other Loan Parties and its/their Subsidiaries in respect of Bank Product Obligations) in respect of Bank Product Obligations then outstanding.

“Bankruptcy Code” means title 11 of the United States Code, as in effect from time to time.

“Base Rate” means a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus ½ of 1% and (c) LIBOR for a one month Interest Period on such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1%, (without any rounding).  Any change in the Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the LIBOR shall be effective as of the opening of business on the effective day of such change in the Prime Rate, the Federal Funds Effective Rate or the LIBOR Rate, as the case may be.

“Base Rate Loan” means a Loan or portion thereof which bears interest at a rate determined by reference to Base Rate.

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“Benefit Plan” means a “defined benefit plan” (as defined in Section 3(35) of ERISA) for which any Borrower or any of its Subsidiaries or ERISA Affiliates has been an “employer” (as defined in Section 3(5) of ERISA) within the past six years.

“Board of Directors” means the board of directors (or comparable managers) of a Borrower or any other Loan Party or any committee thereof duly authorized to act on behalf of the board of directors (or comparable managers).

“Books” means books and records (including a Borrower’s or any other Loan Party’s Records indicating, summarizing, or evidencing such Borrower’s or such other Loan Party’s assets (including the Collateral) or liabilities, such Borrower’s or such other Loan Party’s Records relating to such Borrower’s or such other Loan Party’s business operations or financial condition, or such Borrower’s or such other Loan Party’s Goods or General Intangibles related to such information).

“Borrowers” shall have the meaning ascribed to such term in the introductory paragraph to this Agreement.

“Borrowing” means a borrowing consisting of Advances (i) requested by Borrowers, (ii) made automatically pursuant to Section 2.3(c) without the request of Borrowers, (iii) made by Lender pursuant to Section 2.6(c), or (iv) a Protective Advance.

“Borrowing Base” means, as of any date of determination, the result of:

(a)       90% of the amount of Eligible Accounts, plus

(b)      90% of the amount of Eligible Credit Card Receivables, plus

(c)       the lower of (i) $25,500,000 or (ii) the Inventory Formula Amount, minus

(d)      the aggregate amount of Reserves, if any, established by Lender in accordance with Section 2.5.

“Borrowing Base Certificate” means a borrowing base certificate in form consistent with Exhibit F to this Agreement or otherwise acceptable to Lender.

“Brand” means each of the Loan Parties’ major business lines, as grouped in the most recent inventory appraisal reasonably acceptable to Lender. As of the Closing Date, the Loan Parties have following two Brands: ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇.

“Business Day” means any day that is not a Saturday, Sunday, or other day on which banks in New York City are authorized or required to close pursuant to the rules and regulations of the Federal Reserve System; provided that, when used in connection with a LIBOR Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.

“Capital Expenditures” means, with respect to any Person for any period, the aggregate of all expenditures by such Person and its Subsidiaries during such period that are capital expenditures as determined in accordance with GAAP, whether such expenditures are paid in cash or financed, but excluding (a) normal replacements and maintenance which are properly charged to current operations; (b) expenditures financed with the net cash proceeds from any disposition or any casualty, condemnation or

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similar event; and (c) expenditures made with cash proceeds from any issuances of Stock of Parent or contributions of capital made to Parent.

“Capitalized Lease Obligation” means that portion of the obligations under a Capital Lease that is required to be capitalized in accordance with GAAP.

“Capital Lease” means a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP.

“Cash Dominion Trigger Period” means (a) the period commencing on the date that Excess Availability is less than 12.5% of the Maximum Credit for five (5) consecutive Business Days and continuing until, during the preceding 30 consecutive days, Excess Availability has been equal to or greater than 12.5% of the Maximum Credit at all times or (b) upon the occurrence of a Specified Event of Default, the period that such Specified Event of Default shall be continuing.

“Cash Equivalents” means (a) marketable direct obligations issued by, or unconditionally guaranteed by, the United States or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within 1 year from the date of acquisition thereof, (b) marketable direct obligations issued or fully guaranteed by any state of the United States or any political subdivision of any such state or any public instrumentality thereof maturing within 1 year from the date of acquisition thereof and having one of the two highest ratings obtainable from either Standard & Poor’s Rating Group (“S&P”) or ▇▇▇▇▇’▇ Investors Service, Inc. (“Moody’s”), (c) commercial paper maturing no more than 270 days from the date of creation thereof and, at the time of acquisition, having a rating of at least A-1 from S&P or at least P-1 from Moody’s, (d) certificates of deposit, time deposits, overnight bank deposits or bankers’ acceptances maturing within 1 year from the date of acquisition thereof issued by any bank organized under the laws of the United States or any state thereof or the District of Columbia or any United States branch of a foreign bank having combined capital and surplus of not less than $250,000,000, (e) Deposit Accounts maintained with (i) any bank that satisfies the criteria described in clause (d) above, or (ii) any other bank organized under the laws of the United States or any state thereof so long as the full amount maintained with any such other bank is insured by the Federal Deposit Insurance Corporation, (f) repurchase obligations of any commercial bank satisfying the requirements of clause (d) of this definition or recognized securities dealer having combined capital and surplus of not less than $250,000,000, having a term of not more than seven days, with respect to securities satisfying the criteria in clauses (a) or (d) above, (g) debt securities with maturities of six months or less from the date of acquisition backed by standby letters of credit issued by any commercial bank satisfying the criteria described in clause (d) above, and (h) Investments in money market funds substantially all of whose assets are invested in the types of assets described in clauses (a) through (g) above.

“Cash Management Documents” means the agreements governing each of the Cash Management Services of Lender utilized by a Borrower or any Loan Party, which agreements have been provided to the Borrowers and  shall currently include the Master Agreement for Treasury Management Services or other applicable treasury management services agreement, the “Acceptance of Services”, the “Service Description” governing each such treasury management service used by a Borrower or any Loan Party, and all replacement or successor agreements which govern such Cash Management Services of Lender.

“Cash Management Services” means any cash management or related services including treasury, depository, return items, overdraft, controlled disbursement, merchant stored value cards, e-payables services, electronic funds transfer, interstate depository network, automatic clearing house transfer (including the Automated Clearing House processing of electronic funds transfers through the direct Federal Reserve Fedline system) and other cash management arrangements; provided that in no event shall “Cash Management Services” include maintaining any Treasury Shares Account.

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“Cash Management Transition Period” has the meaning specified in Section 6.12(j)(i).

“CFC” means a controlled foreign corporation (as that term is defined in the IRC).

“Change in Law” means 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; 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, however, 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 ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇ 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 that (a) Equity Sponsor shall cease to possess in the aggregate (together with any Permitted Holders) an amount of shares of Series A Preferred at least equal to 50% of the aggregate amount of shares of Series A Preferred held by Equity Sponsor on the Closing Date (after giving effect to all transactions occurring on the Closing Date), (b) any “person” or “group” (within the meaning of Sections 13(d) and 14(d) of the Exchange Act), other than Permitted Holders, becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 40%, or more, of the Stock of Parent having the right to vote for the election of members of the Board of Directors of Parent, (c) Parent fails to own and control, directly or indirectly, 100% of the Stock of each other Loan Party, or (d) a “Change of Control” shall occur under the Term Loan Agreement.

“Chattel Paper” means chattel paper (as that term is defined in the Code), and includes tangible chattel paper and electronic chattel paper.

“Closing Date” means the date of the making of the initial Advance (or other extension of credit) under this Agreement.

“Code” means the New York Uniform Commercial Code, as in effect from time to time; provided, however, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, priority, or remedies with respect to Lender’s Lien on any Collateral is governed by the Uniform Commercial Code as enacted and in effect in a jurisdiction other than the State of New York, the term “Code” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority, or remedies.  To the extent that defined terms set forth herein shall have different meanings under different Articles under the Uniform Commercial Code, the meaning assigned to such defined term under Article 9 of the Uniform Commercial Code shall control.

“Collateral” means all of each Loan Party’s now owned or hereafter acquired:

(a)       Accounts;

(b)      Books;

(c)       Chattel Paper;

(d)      Deposit Accounts;

(e)       Goods, including Equipment and Fixtures;

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(f)        General Intangibles, including, without limitation, Intellectual Property and Intellectual Property Licenses;

(g)       Inventory;

(h)      Investment Related Property;

(i)          Negotiable Collateral;

(j)          Supporting Obligations;

(k)      Commercial Tort Claims;

(l)          money, Cash Equivalents, or other assets of such Loan Party that now or hereafter come into the possession, custody, or control of Lender (or its agent or designee);

(m)  the Key Man Life Insurance Policy; and

(n)      all of the proceeds (as such term is defined in the Code) and products, whether tangible or intangible, of any of the foregoing, including proceeds of insurance or Commercial Tort Claims covering or relating to any or all of the foregoing, and any and all Accounts, Books, Chattel Paper, Deposit Accounts, Equipment, Fixtures, General Intangibles (including, without limitation, Intellectual Property and Intellectual Property Licenses), Inventory, Investment Related Property, Negotiable Collateral, Supporting Obligations, money, or other tangible or intangible property resulting from the sale, lease, license, exchange, collection, or other disposition of any of the foregoing, the proceeds of any award in condemnation with respect to any of the foregoing, any rebates or refunds, whether for taxes or otherwise, and all proceeds of any such proceeds, or any portion thereof or interest therein, and the proceeds thereof, and all proceeds of any loss of, damage to, or destruction of the above, whether insured or not insured, and, to the extent not otherwise included, any indemnity, warranty, or guaranty payable by reason of loss or damage to, or otherwise with respect to any of the foregoing (collectively, the “Proceeds”).  Without limiting the generality of the foregoing, the term “Proceeds” includes whatever is receivable or received when Investment Related Property or proceeds are sold, exchanged, collected, or otherwise disposed of, whether such disposition is voluntary or involuntary, and includes proceeds of any indemnity or guaranty payable to such Loan Party or Lender from time to time with respect to any of the Investment Related Property.

Notwithstanding anything herein to the contrary, the Security Interest created by this Agreement shall not extend to, and the term “Collateral” shall not include, any Excluded Property.

“Collateral Access Agreement” means a landlord waiver, bailee letter, or acknowledgement agreement of any lessor, warehouseman, processor, consignee, or other Person in possession of, having a Lien upon, or having rights or interests in the  Books, Equipment, Accounts or Inventory of any Loan Party, in each case, in favor of Lender with respect to the Collateral at such premises or otherwise in the custody, control or possession of such lessor, warehouseman, processor, consignee or other Person and in form and substance reasonably satisfactory to Lender.

“Collection Account” means any Controlled Account identified on Schedule A-1 to the Information Certificate, as such Schedule may be updated from time to time to reflect changes permitted under this Agreement upon Administrative Borrower providing prior written notice thereof to Lender in accordance with Section 12.

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“Collections” means all cash, checks, notes, instruments, and other items of payment (including insurance Proceeds, cash Proceeds of asset sales, rental Proceeds, and tax refunds); provided, that in no event shall “Collections” include proceeds of an Advance or Term Loan.

“Commercial Tort Claims” means commercial tort claims (as that term is defined in the Code), and includes those commercial tort claims listed on Schedule 5.6(d) to the Information Certificate.

“Compliance Certificate” means a certificate substantially in the form of Exhibit A delivered by the chief financial officer (or other individual performing similar functions) of Parent or Administrative Borrower to Lender.

“Confidential Information” has the meaning specified therefor in Section 17.8.

“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

“Control Agreement” means a control agreement, in form and substance reasonably satisfactory to Lender, executed and delivered by a Loan Party, Lender, and the applicable securities intermediary (with respect to a Securities Account) or bank (with respect to a Deposit Account) or issuer (with respect to uncertificated securities).

“Controlled Account” means a bank account maintained at a Controlled Account Bank in accordance with Section 6.12 and Section 7.11, as applicable.

“Controlled Account Bank” has the meaning specified therefor in Section 6.12 (j).

“Convertible Notes” means each Subordinated Convertible Note made by Parent pursuant to the terms of the Rollover Agreement, as such notes may be amended, restated, modified or supplemented from time to time.

“Convertible Notes Documents” means the Rollover Agreement and each other document, instrument and agreement related to or executed in connection with the Convertible Notes.

“Copyrights” means any and all rights in any copyrightable works of authorship, including (i) copyrights and moral rights, (ii) copyright registrations and all applications in connection therewith including those listed on Schedule 5.26(b) to the Information Certificate, (iii) income, license fees, royalties, damages, and payments now and hereafter due or payable under and with respect thereto, including payments under all licenses entered into in connection therewith and damages and payments for past, present, or future infringements thereof, and (iv) the right to ▇▇▇ for past, present, and future infringements thereof.

“Copyright Security Agreement” means each Copyright Security Agreement executed and delivered by a Borrower or another Loan Party and Lender, in form and substance reasonably acceptable to Lender.

“Covenant Testing Trigger Period” means (a) the period commencing on the date that Excess Availability is less than 10% of the Maximum Credit at any time and continuing until, during the preceding 60 consecutive days, Excess Availability has been equal to or greater than 10% of the Maximum Credit at all times or (b) upon the occurrence of a Specified Event of Default, the period that such Specified Event of Default shall be continuing.

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“Credit Card Issuer” shall mean any person (other than a Borrower or other Loan Party) who issues or whose members issue credit cards, including, without limitation, MasterCard or VISA bank credit or debit cards or other bank credit or debit cards issued through MasterCard International, Inc., Visa, U.S.A., Inc. or Visa International and American Express, Discover, Diners Club, ▇▇▇▇▇ ▇▇▇▇▇▇▇ and other non-bank credit or debit cards, including, without limitation, credit or debit cards issued by or through American Express Travel Related Services Company, Inc., and Novus Services, Inc. and other issuers approved by the Lender.

“Credit Card Notification” has the meaning provided in Section 6.13.

“Credit Card Processor” shall mean any servicing or processing agent or any factor or financial intermediary who facilitates, services, processes or manages the credit authorization, billing transfer and/or payment procedures with respect to any Borrower’s sales transactions involving credit card or debit card purchases by customers using credit cards or debit cards issued by any Credit Card Issuer.

“Credit Card Receivables” means each right to payment, whether or not it constitutes a “payment intangible” or an “Account” (as defined in the Code) together with all income, payments and proceeds thereof, owed by a Credit Card Issuer or Credit Card Processor to a Loan Party resulting from charges by a customer of a Loan Party on credit or debit cards issued by such Credit Card Issuer in connection with the sale of goods by a Loan Party, or services performed by a Loan Party, in each case in the ordinary course of its business.

“Credit Risk” has the meaning specified therefor in each of the Factoring Agreements.

“Daily Balance” means, as of any date of determination and with respect to any Obligation, the amount of such Obligation owed at the end of such day.

“Daily Three Month LIBOR” means, for any day the rate per annum for United States dollar deposits determined by Lender for the purpose of calculating the effective Interest Rate for loans that reference Daily Three Month LIBOR as the Inter-Bank Market Offered Rate in effect from time to time for the 3 month delivery of funds in amounts approximately equal to the principal amount of such loans.  Borrowers understand and agree that Lender may base its determination of the Inter-Bank Market Offered Rate upon such offers or other market indicators of the Inter-Bank Market as Lender in its discretion deems appropriate, including but not limited to the rate offered for U.S. dollar deposits on the London Inter-Bank Market.  When interest is determined in relation to Daily Three Month LIBOR, each change in the interest rate shall become effective each Business Day that Lender determines that Daily Three Month LIBOR has changed. For purposes of this definition, if at any time the foregoing rate is less than 0.00%, then Daily Three Month LIBOR shall be deemed to be 0.00%.

“Default” means an event, condition, or default that, with the giving of notice, the passage of time, or both, would be an Event of Default.

“Deposit Account” means any deposit account (as that term is defined in the Code).

“Designated Account” means any operating Deposit Account of a Borrower at Lender identified on Schedule D-1 to the Information Certificate, as such Schedule may be updated from time to time to reflect changes permitted under this Agreement upon Administrative Borrower providing prior written notice thereof to Lender in accordance with Section 12.

“Dilution” means, as of any date of determination, a percentage that is the result of dividing the Dollar amount of (a) bad debt write-downs, discounts, advertising allowances, credits, deductions, or

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other dilutive items as determined by Lender in its Permitted Discretion with respect to Borrowers’ Accounts, by (b) Borrowers’ ▇▇▇▇▇▇▇▇ with respect to Accounts.

“Dilution Reserve” means, as of any date of determination and calculated separately for each Brand, an amount sufficient to reduce the advance rate against Eligible Accounts relating to such Brand by (i) 1 percentage point for each percentage point by which Dilution relating to such Brand is in excess of 5% but equal to or below 15% plus (ii) 2 percentage points for each percentage point by which Dilution relating to such Brand is in excess of 15%.

“Document” shall have the meaning set forth in Article 9 of the Code.

“Dollars” or “$” means United States dollars.

“Domestic Foreign Holding Company” means any Domestic Subsidiary with no material assets other than 65% or more of the voting Equity Interests (including, for this purpose, any debt or other instrument treated as equity for U.S. federal income tax purposes) in one or more Foreign Subsidiaries that are “controlled foreign corporations” (as defined in Section 957 of the Code) and cash and Cash Equivalents incidental thereto and held on a temporary basis.

“Domestic Subsidiary” means any Subsidiary organized under the laws of the United States of America, any state thereof or the District of Columbia.

“Drawing Document” means any Letter of Credit or other document presented for purposes of drawing under any Letter of Credit.

“EBITDA” means, with respect to any fiscal period, the consolidated net income (or loss) of Parent and its Subsidiaries, plus (a) without duplication and to the extent deducted in determining net income for such period, the sum of (i) interest expense for such period, (ii) any provision for taxes based on income or profits or capital (including federal, state and local taxes, franchise taxes, excise taxes and similar taxes, including any penalties or interest with respect thereto) for such period, (iii) all amounts attributable to depreciation and amortization expense for such period, (iv) any extraordinary charges for such period, (v) any other non-cash charges for such period (but excluding any non-cash charge in respect of an item that was included in net income in a prior period), (vi) management fees paid in cash during such period to the extent permitted to be paid under the Loan Documents, (vii) expenses incurred during such period related to discontinued operations (which shall in any event include any expenses, charges and costs arising out of or related to the wind-down of retail stores of Parent or any of its Subsidiaries), (viii) noncash foreign exchange translation losses with respect to currency ▇▇▇▇▇▇ and currency remeasurements of indebtedness, (ix) any fees, expenses, commissions, costs or other charges related to any issuance of Stock or any investment, acquisition, disposition, recapitalization or the incurrence or repayment of Indebtedness (including with respect to indebtedness, a refinancing thereof), in each case whether or not consummated, and any amendment or modification to the terms of any such transactions, (x) without duplication of fees, expenses and charges incurred pursuant to clause (xi) below, reasonable and documented out of pocket fees, costs and expenses incurred in connection with the administration of the Loans after the Closing Date, (xi) fees, expenses or charges related to the execution, delivery and performance by the Loan Parties of this Agreement, other Loan Documents, Term Loan Documents, the Merger Agreement, the Stock Purchase Agreements, the Rollover Agreement and the Asset Purchase Agreements, the borrowing of Loans and Term Loans and other credit extensions, the use of the proceeds thereof and the issuance of Letters of Credit hereunder (collectively, the “Transaction”) and incurred before, on or after (but not later than 90 days after) the Closing Date in aggregate amount not to exceed $7,000,000, (xii) fees, expenses or charges related to any litigation or other adverse proceeding arising directly out of the Transaction, (xiii) solely to be added for any computation period ending on or before

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December 31, 2016, the amount of severance expenses and cost savings in an amount not to exceed $5,600,000 attributable to (A) wage expense (and associated benefits and taxes) and (B) product sourcing costs as a result of diversifying the vendor base, projected by the Borrowers in good faith to result from actions taken or expected to be taken in connection with the Transaction after the Closing Date (in each case calculated on a pro forma basis as though such cost savings had been realized on the first day of such period and as if such cost savings were realized during the entirety of such period), net of the amount of actual benefits realized during such period from such actions; provided that such cost savings are (x) reasonably supportable and quantifiable in the good faith judgment of the Borrowers, and (y) reasonably anticipated to be realized within 12 months after the Closing Date, (xiv) the amount of any restructuring charges and related charges, restructuring costs, integration costs, transition costs, consolidation and closing costs for stores and other facilities, project start-up costs, relocation costs, signing, retention and completion bonuses and other restructuring charges, accruals or reserves, (xv) severance expenses and pro forma adjustments, reflecting any synergies (other than revenue synergies), operating expense reductions and other operating improvements expected to be taken in connection with any acquisition and reasonably anticipated to be realized within 12 months after the consummation of the acquisition (in each case calculated on a pro forma basis as though such cost savings had been realized on the first day of such period and as if such cost savings were realized during the entirety of such period), net of the amount of actual benefits realized during such period from such actions; provided that such cost savings are reasonably supportable and quantifiable in the good faith judgment of the Borrowers; provided, further, that, for purposes of calculating EBITDA for any period, written consent of the Lender shall be required to the extent the sum of all add-backs pursuant clauses (iv), (ix), (xii), (xiv) and this clause (xv) exceeds 10% of EBITDA (before giving effect to any increases pursuant to this clause (xv)), (xvi) non-cash income reduction adjustments derived from realigning ▇▇▇▇▇▇ Clothing Holdings, Inc.’s accounting policies to mirror accounting policies used by Parent, (xvii) expenses incurred in connection with store pre-opening and opening costs to the extent consistent with past practice, (xviii) fees, expenses or charges incurred during such period related to the Key Man Life Insurance Policy in an aggregate amount not to exceed $100,000 in any fiscal year, and (xix) non-cash income reduction adjustments derived from purchase accounting, minus (b) without duplication and to the extent included in net income, (x) any credit for taxes (including federal, state and local taxes, franchise taxes, excise taxes and similar taxes) based on net income tax and (y) any extraordinary gains and any non-cash items of income for such period on a consolidated basis in accordance with GAAP.

“ECP” means an “eligible contract participant” as defined in Section 1(a)(18) of the Commodity Exchange Act or any regulations promulgated thereunder and the applicable rules issued by the Commodity Futures Trading Commission and/or the SEC.

“Effective Date” the later of (a) the date of this Agreement and (b) the date on which all of the conditions precedent set forth in Section 4.1 shall have been fulfilled or waived by the Lender.

“Eligible Accounts” means those Accounts created by each Borrower in the ordinary course of its business, that arise out of such Borrower’s sale of Goods or rendition of services, that comply with each of the representations and warranties respecting Eligible Accounts made in the Loan Documents, that are not excluded as ineligible by virtue of one or more of the excluding criteria set forth below, and which Lender, in its Permitted Discretion, shall otherwise deem to be an Eligible Account; provided, however, that such criteria (except as provided in clause (l) and the exclusion of Nordstrom and Macy’s and their Affiliates from clause (k) of this definition) may be revised from time to time by Lender in Lender’s Permitted Discretion.  In determining the amount to be included, Eligible Accounts shall be calculated net of customer deposits, credits and unapplied cash.  Eligible Accounts shall not include the following: