CREDIT AGREEMENT dated as of August 31, 2016 among 5.11, INC. as Borrower, 5.11 TA, INC., As Co-Borrower, and COMPASS GROUP DIVERSIFIED HOLDINGS LLC, as Lender

Exhibit 4.5(a)

CREDIT AGREEMENT

dated as of August 31, 2016

among

5.11, INC.

as Borrower,

5.11 TA, INC.,

As Co-Borrower,

and

COMPASS GROUP DIVERSIFIED HOLDINGS LLC,

as Lender

TABLE OF CONTENTS


		Page
SECTION 1.	DEFINITIONS; INTERPRETATION		1

1.1	Definitions		1

1.2	Interpretation		19

SECTION 2.	CREDIT FACILITIES		19

2.1	Commitments		19

2.2	Loan Procedures		20

2.3	Letters of Credit		21

2.4	Certain Conditions		23

2.5	Loan Accounting		23

2.6	Interest		23

2.7	Fees		24

2.8	Commitment Reduction		25

2.9	Prepayment		25

2.10	Repayment		27

2.11	Payment		27

SECTION 3.	YIELD PROTECTION		30

3.1	Taxes		30

3.2	Increased Cost		31

3.3	Inadequate or Unfair Basis		32

3.4	Change in Law		32

3.5	Funding Losses		32

3.6	Conclusiveness of Statements; Survival		33

SECTION 4.	CONDITIONS PRECEDENT		33

4.1	Initial Credit Extension		33

4.2	All Credit Extensions		35

SECTION 5.	REPRESENTATIONS AND WARRANTIES		35

5.1	Organization		35

5.2	Authorization; No Conflict		36

5.3	Validity; Binding Nature		36

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TABLE OF CONTENTS

(continued)


		Page
5.4	Financial Condition		36

5.5	No Material Adverse Change		37

5.6	Litigation		37

5.7	Ownership of Properties; Liens		37

5.8	Capitalization		37

5.9	Pension Plans		38

5.10	Investment Company Act		38

5.11	Public Utility Holding Company Act		38

5.12	Margin Stock		38

5.13	Taxes		39

5.14	Solvency		39

5.15	Environmental Matters		39

5.16	Insurance		40

5.17	Information		40

5.18	Intellectual Property		40

5.19	Restrictive Provisions		41

5.20	Labor Matters		41

5.21	No Default		41

5.22	Compliance with Law		41

5.23	Permits, etc.		42

5.24	Customers and Suppliers		42

SECTION 6.	AFFIRMATIVE COVENANTS		42

6.1	Information		42

6.2	Books; Records; Inspections		45

6.3	Maintenance of Property; Insurance		46

6.4	Compliance with Laws; Payment of Taxes and Liabilities		47

6.5	Maintenance of Existence		47

6.6	Employee Benefit Plans		47

6.7	Environmental Matters		48

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TABLE OF CONTENTS

(continued)


		Page
6.8	Obtaining of Permits, Etc		48

6.9	Collateral Access Agreements		48

6.10	Blocked Accounts		48

6.11	Further Assurances; Post-Closing Items		50

SECTION 7.	NEGATIVE COVENANTS		50

7.1	Debt		50

7.2	Liens		51

7.3	Operating Leases		52

7.4	Restricted Payments		52

7.5	Mergers; Consolidations; Asset Sales		52

7.6	Modification of Organizational Documents		53

7.7	Use of Proceeds		53

7.8	Transactions with Affiliates		53

7.9	Inconsistent Agreements		53

7.10	Business Activities		54

7.11	Investments		54

7.12	Restriction of Amendments to Certain Documents		55

7.13	Fiscal Year		55

7.14	Financial Covenants		55

7.15	Bank Accounts		57

7.16	Subsidiaries		57

SECTION 8.	EVENTS OF DEFAULT; REMEDIES		57

8.1	Events of Default		57

8.2	Remedies		60

SECTION 9.	MISCELLANEOUS		60

9.1	Waiver; Amendments		60

9.2	Notices		61

9.3	Computations		61

9.4	Costs; Expenses		61

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TABLE OF CONTENTS

(continued)


		Page
9.5	Indemnification by Borrower		62

9.6	Marshaling; Payments Set Aside		62

9.7	Nonliability of Lender		63

9.8	Assignments; Participations		63

9.9	Confidentiality		64

9.10	Captions		65

9.11	Nature of Remedies		66

9.12	Counterparts		66

9.13	Severability		66

9.14	Entire Agreement		66

9.15	Successors; Assigns		66

9.16	Governing Law		67

9.17	Forum Selection; Consent to Jurisdiction		67

9.18	Waiver of Jury Trial		67

EXHIBIT A FORM OF ASSIGNMENT AGREEMENT			A-1

EXHIBIT B FORM OF COMPLIANCE CERTIFICATE			B-1

EXHIBIT C FORM OF NOTE			C-1

EXHIBIT D FORM OF NOTICE OF BORROWING			D-1

EXHIBIT E FORM OF NOTICE OF CONVERSION/CONTINUATION			E-1

-iv-

CREDIT AGREEMENT

This Credit Agreement, dated as of August 31, 2016 (as amended, restated or otherwise modified from time to time, this “Agreement”), is made and entered into by and among 5.11, Inc. a company incorporated in California, as borrower (“Borrower”), 5.11 TA, Inc., a company incorporated in Delaware, as co-borrower (“Co-Borrower”) and Compass Group Diversified Holdings LLC, a Delaware limited liability company (together with its successors and assigns, “Lender”), as lender.

In consideration of the mutual agreements herein contained, the parties hereto agree as follows:

Section 1. Definitions; Interpretation.

1.1 Definitions.

When used herein the following terms shall have the following meanings:

Acceleration Event means the occurrence of any of the following: (i) an Event of Default under Section 8.1.3; (ii) an Event of Default under Section 8.1.1 and the termination of the Commitments; or (iii) any other Event of Default under Section 8.1 and the election by Lender to declare the Obligations to be due and payable or to terminate the Revolving Loan Commitment.

Account has the meaning set forth in the Guarantee and Collateral Agreement.

Account Debtor means any Person who is obligated to any Loan Party with respect to any Account, Chattel Paper or General Intangible.

Acquisition means, with respect to any Person, any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or a substantial portion of the assets of another Person, or of all or a substantial portion of any business or division of another Person, (b) the acquisition of in excess of 50% of the capital stock, partnership interests, membership interests or equity of any other Person, or otherwise causing any other Person to become a Subsidiary, or (c) a merger or consolidation or any other combination with another Person (other than a Person that is already a Subsidiary).

Affiliate of any Person means (a) any other Person which, directly or indirectly, controls or is controlled by or is under common control with such Person, (b) any officer or director of such Person and (c) with respect to Lender, any entity administered or managed by Lender or an Affiliate or investment advisor thereof which is engaged in making, purchasing, holding or otherwise investing in commercial loans. A Person shall be deemed to be “controlled by” any other Person if such Person possesses, directly or indirectly, power to vote 10% or more of the securities (on a fully diluted basis) having ordinary voting power for the election of directors or managers or power to direct or cause the direction of the management and policies of such Person whether by contract or otherwise. Unless expressly stated otherwise herein, Lender shall not be deemed an Affiliate of any Loan Party.

Agreement has the meaning set forth in the Preamble.

Applicable Margin means the applicable rate per annum as set forth in the following table:


		Revolving Loans						Term A Loans
Level	Total Debt to EBITDA Ratio	Base Rate			LIBOR			Base Rate			LIBOR
1	Less than 2.0: 1.0		4.00	%		4.00	%		4.00	%		4.50	%

2	Greater than 2.0: 1.0 but less than 3.0: 1.0		4.25	%		4.25	%		4.25	%		4.75	%

3	Greater than 3.0: 1.0 but less than 4.0: 1.0		4.50	%		4.50	%		4.50	%		5.00	%

4	Greater than 4.0: 1.0 but less than 5.0:1.0		4.75	%		4.75	%		4.75	%		5.25	%

5	Greater than 5.0:1.0		5.00	%		5.00	%		5.00	%		5.50	%

The Applicable Margin in respect of the applicable Loan shall be adjusted quarterly, to the extent applicable, on the date financial statements are required to be delivered pursuant to Section 6.1.2 with respect to the last fiscal month of a Fiscal Quarter (or, in the case of the last Fiscal Quarter of each Fiscal Year, Section 6.1.1) after the end of each related Fiscal Quarter (each, an “Interest Determination Date”) based on the Total Debt to EBITDA Ratio as of the last day of such Fiscal Quarter. Such Applicable Margin shall be effective from such Interest Determination Date until the next Interest Determination Date. Initially, each Applicable Margin shall be that percentage set forth above for Level 4 in the table above. From and after the Interest Determination Date next succeeding the date of this Agreement, each Applicable Margin shall be equal to the applicable rate per annum set forth in the table above opposite the applicable Total Debt to EBITDA Ratio.

Assignee has the meaning set forth in Section 9.8.1.

Assignment Agreement means an agreement substantially in the form of Exhibit A.

Attributable Indebtedness means, with respect to any Person on any date, (a) in respect of any Capital Lease, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a Capital Lease, and (c) in respect of any Securitization Transaction, the outstanding principal amount of such financing, after taking into account reserve accounts and making appropriate adjustments.

Balance Sheet Date has the meaning set forth in Section 5.4.

Bankruptcy Code means the United States Bankruptcy Code (11 U.S.C. 101 et. seq.), as amended, and any successor statute.

Base Rate means, for any day, the rate per annum equal to the greater of (a) the rate of interest which is identified as the “Prime Rate” and normally published in the Money Rates Section of The Wall Street Journal (or, if such rate ceases to be so published, as quoted from such other generally available and recognizable source as Lender may select) and (b) the sum of the Federal Funds Rate plus 0.5%. Any change in the Base Rate due to a change in such Prime Rate or the Federal Funds Rate shall be effective on the effective date of such change in such Prime Rate or the Federal Funds Rate, respectively.

Base Rate Loan means any Loan which bears interest at or by reference to the Base Rate.

Blocked Account has the meaning set forth in Section 6.10.

Blocked Account Bank has the meaning set forth in Section 6.10.

Borrower has the meaning set forth in the Preamble.

Borrowing Notice means a notice in substantially the form of Exhibit D.

Business Day means any day other than any Saturday and Sunday on which commercial banks are open for commercial banking business in New York, New York, and, in the case of a Business Day which relates to a LIBOR Loan, any day on which dealings are carried out in the London interbank Eurodollar market.

Capital Expenditures means, for any period, the sum of the aggregate of all expenditures (whether paid in cash or other consideration or accrued as a liability and including that portion of Capital Leases which is capitalized on the consolidated balance sheet of the Loan Parties) by the Loan Parties during that period that, in conformity with GAAP, are included in “additions to property, plant or equipment” or comparable items reflected in the consolidated statement of cash flows of the Loan Parties, but excluding expenditures made in connection with

the improvement, replacement, substitution or restoration of assets (or any addition thereto) to the extent financed (a) from insurance proceeds (or other similar recoveries) paid on account of the loss of or damage to the assets being replaced or restored, (b) with cash awards of compensation arising from the taking by eminent domain or condemnation of the assets being replaced or (c) with cash proceeds from the sale or other transfer of the assets being replaced that are timely reinvested and, thereby, not subject to mandatory prepayment in accordance with Section 2.9.2(a)(i).

Capital Lease means, with respect to any Person, any lease of (or other agreement conveying the right to use) any real or personal property by such Person that, (i) in conformity with GAAP, is accounted for as a capital lease on the balance sheet of such Person, or (ii) is a transaction of a type commonly known as a “synthetic lease” (i.e. a lease transaction that is treated as an operating lease for accounting purposes but with respect to which payments of rent are intended to be treated as payments of principal and interest on a loan for Federal income tax purposes).

Cash Equivalent Investment means, at any time, (a) any evidence of Debt, maturing not more than one year after such time, issued or guaranteed by the United States Government or any agency thereof, (b) commercial paper, or corporate demand notes, in each case (unless issued by a Lender or its holding company) rated at least A-l by Standard & Poor’s Ratings Group or P-l by Xxxxx’x Investors Service, Inc., (c) any certificate of deposit (or time deposit represented by a certificate of deposit) or banker’s acceptance maturing not more than one year after such time, or any overnight Federal Funds transaction that is issued or sold by a commercial banking institution that is a member of the Federal Reserve System and has a combined capital and surplus and undivided profits of not less than $500,000,000, (d) any repurchase agreement entered into with commercial banking institution of the nature referred to in clause (c) above which (i) is secured by a fully perfected security interest in any obligation of the type described in any of clauses (a) through (c) above and (ii) has a market value at the time such repurchase agreement is entered into of not less than 100% of the repurchase obligation of such commercial banking institution thereunder, (e) money market accounts or mutual funds which invest exclusively in assets satisfying the foregoing requirements and (f) other short term liquid investments, if any, approved in writing by Lender.

Cash Taxes means the amount of cash income taxes paid (or due to be paid) by the Loan Parties (without duplication), including dividends and distributions paid by Borrower to Parent in accordance with Section 7.4, in an amount necessary to permit Parent to pay taxes as and when due with respect to income of Borrower, Co-Borrower or the Subsidiaries.

Chattel Paper has the meaning set forth in the Guarantee and Collateral Agreement.

Closing Date means the date on which all conditions precedent set forth in Section 4.1 have been satisfied or waived in writing by Lender.

Co-Borrower has the meaning set forth in the Preamble.

Collateral has the meaning set forth in the Guarantee and Collateral Agreement.

Collateral Access Agreement means an agreement in form and substance reasonably satisfactory to Lender pursuant to which a mortgagee or lessor of real property on which Collateral is stored or otherwise located, or a warehouseman, processor or other bailee of property owned by Borrower or any other Loan Party, acknowledges the Liens of Lender and waives (or, if approved by Lender, subordinates) any Liens held by such Person on such property, and, in the case of any such agreement with a mortgagee or lessor, permits Lender reasonable access to and use of such real property during the continuance of an Event of Default to assemble, complete and sell any Collateral stored or otherwise located thereon.

Collateral Documents means, collectively, the Guarantee and Collateral Agreement, each Mortgage, each Collateral Access Agreement, each financing statement and each other agreement or instrument pursuant to or in connection with which any Loan Party or any other Person grants a security interest in any Collateral to Lender in order to secure the Obligations, each as amended, restated or otherwise modified from time to time.

Commitments means the Revolving Loan Commitment, the Term A Loan Commitment and the Term B Loan Commitment.

Commitment Fee means the fee payable by Borrower and Co-Borrower to Lender pursuant to Section 2.7.1.

Compliance Certificate means a certificate substantially in the form of Exhibit B.

Computation Period means each period of four consecutive Fiscal Quarters ending on the last day of a Fiscal Quarter.

Consolidated Net Income means, for any period, the consolidated net income (or loss) of the Loan Parties for such period, excluding any gains or non-cash losses from Dispositions, any extraordinary or non-recurring gains or extraordinary or non-recurring non-cash losses and any gains or non-cash losses from discontinued operations.

Contingent Obligation means any agreement, undertaking or arrangement by which any Person guarantees, endorses or otherwise becomes or is contingently liable upon (by direct or indirect agreement, contingent or otherwise, to provide funds for payment, to supply funds to or otherwise to invest in a debtor, or otherwise to assure a creditor against loss) any indebtedness, obligation or other liability of any other Person (other than by endorsements of instruments in the course of collection), or guarantees the payment of dividends or other distributions upon the shares of any other Person. The amount of any Person’s obligation in respect of any Contingent Obligation shall (subject to any limitation set forth therein) be deemed to be the principal amount of the debt, obligation or other liability supported thereby.

Controlled Group means all members of a controlled group of corporations and all members of a controlled group of trades or businesses (whether or not incorporated) under common control which, together with Borrower, are treated as a single employer under Section 414 of the IRC or Section 4001 of ERISA.

Conversion/Continuation Notice means a notice in substantially the form of Exhibit E.

Debt of any Person means, without duplication, (a) all indebtedness of such Person, whether current or long-term, for borrowed money, whether or not evidenced by bonds, debentures, notes or similar instruments, (b) all purchase money indebtedness, (c) all obligations of such Person to pay the deferred purchase price of property or services (excluding trade accounts payable in the ordinary course of business and not outstanding for more than 90 days after the date such trade account payable was created or for more than 60 days after the due date thereof), including any obligations of any Loan Party to make earn out or other contingency payments (including purchase price adjustments, non-competition and consulting agreements, or other indemnity obligations) pursuant to the documentation relating to such acquisition, (d) all Attributable Indebtedness, (e) all indebtedness (excluding prepaid interest thereon) secured by a Lien on the property of such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse, (f) all obligations, contingent or otherwise, with respect to the face amount of all letters of credit (whether or not drawn) and banker’s acceptances issued for the account of such Person, (g) all Hedging Obligations of such Person, (h) all indebtedness of any partnership of which such Person is a general partner, (i) all Contingent Obligations of such Person, (j) all surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business, and (k) all indebtedness of the types referred to in clauses (a) through (j) above of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) of which such Person is a general partner or a joint venture, except to the extent that such indebtedness is expressly made non-recourse to such Person.

Debt to be Repaid means the Debt listed on Schedule 4.1.3.

Default means any event that, if it continues uncured, will, with the lapse of time or the giving of notice or both, constitute an Event of Default.

Disposition means, as to any asset or right of any Loan Party, (a) any sale, lease, assignment or other transfer (other than to Borrower, Co-Borrower or any Wholly-Owned Subsidiary), (b) any loss, destruction or damage thereof or (c) any actual or threatened condemnation, confiscation, requisition, seizure or taking thereof, in each case excluding assets subject to a Disposition which are replaced within 180 days with assets performing the same or a similar function.

Dollar and $ mean lawful money of the United States of America.

Domestic Subsidiary means any Subsidiary that is incorporated or organized under the laws of a State within the United States of America or the District of Columbia. Unless the context otherwise requires, each reference to Domestic Subsidiary or Domestic Subsidiaries herein shall be a reference to Subsidiary or Subsidiaries of Borrower.

EBITDA means, for any period, Consolidated Net Income for such period plus, to the extent deducted in determining such Consolidated Net Income and without duplication, (i) Interest Expense, income tax expense, depreciation and amortization for such period, (ii) Permitted Integration Services Fees and all other management fees paid to or accrued for the benefit of Manager in such period to the extent permitted pursuant to Section 7.4, (iii) any extraordinary, unusual or non-recurring gains or losses or charges or credits, including cash closing fees and expenses in connection with closing of the transactions contemplated by this Agreement (including any expenses relating to the granting of stock options); (iv) amounts accrued or paid during any Fiscal Year to consultants to Borrower or Co-Borrower, provided the projects for which and terms on which such consultants were engaged were pre-approved by Lender in writing, (v) any gain or loss associated with the sale or write-down of assets not in the ordinary course of business, and (vi) all non-recurring, acquisition and other expenses, other than management fees paid to Manager; provided, that, notwithstanding anything to the contrary contained herein, for each Fiscal Quarter, listed below, EBITDA shall be deemed to be the amount set forth below opposite such quarter:


Fiscal Quarter Ending:	EBITDA
September 30, 2015	$	14,471,000
December 31, 2015	$	8,534,000
March 31, 2016	$	6,188,000
June 30, 2016	$	7,272,000

ECF Percentage means, for any Fiscal Year, 90%.

Eligible Institution means (a) any Person that (i) is organized for the purpose of making equity or debt investments in one or more other Persons and (ii) is an Affiliate of Lender or Manager, (b) any Person that invests in, or extends credit pursuant to, commercial loans in the ordinary course of business, or (c) any finance company, insurance company or other financial institution which temporarily warehouses Loans for Lender or any Person described in clauses (a) or (b) above.

Environmental Claims means all claims, however asserted, by any governmental, regulatory or judicial authority or other Person alleging potential liability or responsibility for violation of any Environmental Law, or for release or injury to the environment or any Person or property.

Environmental, Health, and Safety Requirements has the meaning assigned to it in the Purchase Agreement.

Environmental Laws means all present or future federal, state or local laws, statutes, common law duties, rules, regulations, ordinances and codes, together with all administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case relating to any matter arising out of or relating to health and safety, or pollution or protection of the environment or workplace, including any of the foregoing relating to the presence, use, production, generation, handling, transport, treatment, storage, disposal, distribution, discharge, release, control or cleanup of any Hazardous Material.

ERISA means the Employee Retirement Income Security Act of 1974, as amended.

Event of Default means any of the events described in Section 8.1.

Excess Cash means, with respect to Borrower, Co-Borrower and its Subsidiaries, the excess of (i) the combined cash and Cash Equivalent Investments of Borrower, Co-Borrower and such Subsidiaries (exclusive of cash required to cover then outstanding checks) over (ii) $7,000,000.

Excess Cash Flow means, with respect to each Fiscal Year (subject, in the case of the Fiscal Year that includes the Closing Date, to the last sentence of this definition), the EBITDA for such Fiscal Year, minus the sum, in each case without duplication and to the extent not deducted from Consolidated Net Income in determining such EBITDA, of (i) scheduled repayments of principal of Term Loans and other Debt (other than Revolving Loans) of Borrower, Co-Borrower and the Subsidiaries (in respect of Debt permitted in accordance with Section 7.1) made during such Fiscal Year, (ii) voluntary prepayments of the Term Loans pursuant to Section 2.9.1 during such Fiscal Year, (iii) cash payments (not financed with the proceeds of Debt other than Revolving Loans) made in such Fiscal Year with respect to Capital Expenditures permitted under Section 7.14.4, (iv) all federal, state, local and foreign income taxes paid in cash by Borrower, Co-Borrower and the Subsidiaries during such Fiscal Year or payable with respect to such Fiscal Year by any of them within 75 days after the last day of such Fiscal Year, (v) all Interest Expense in respect of Debt permitted in accordance with Section 7.1 paid in cash by Borrower, Co-Borrower and the Subsidiaries during such Fiscal Year or payable with respect to such Fiscal Year by any of them within 30 days after the last day of such Fiscal Year, (vi) to the extent permitted under Section 7.4, Permitted Integration Services Fees and all other management fees paid in cash to Manager during such Fiscal Year or payable to Manager with respect to such Fiscal Year within 30 days of the last day of such Fiscal Year, (vii) any

extraordinary, unusual or non-recurring gains or losses or charges or credits, including cash closing expenses in connection with closing of the transactions contemplated by this Agreement, (viii) any gain or loss associated with the sale or write-down of assets not in the ordinary course of business; and (ix) any cash payments (not financed with the proceeds of Debt other than Revolving Loans) to be made in connection with Acquisitions, if any, approved in advance by Lender in writing. Notwithstanding the foregoing, for purposes of the Fiscal Year that includes the Closing Date, Excess Cash Flow (and each of the elements comprising Excess Cash Flow) shall be determined for the period from and including the Closing Date through December 31 of such Fiscal Year.

Extraordinary Receipts means all net cash amounts received by any Loan Party not in the ordinary course of business (and not consisting of proceeds of Dispositions or Indebtedness), including (i) pension plan reversions, (ii) proceeds of insurance, (iii) judgments, proceeds of settlements or other consideration of any kind in connection with any cause of action, (iv) condemnation awards (and payments in lieu thereof), (v) indemnity payments and (vi) any purchase price adjustment received in connection with any purchase agreement and any amounts received from escrow arrangements in connection with any purchase agreement.

Federal Funds Rate means, for any day, a rate per annum (rounded upward to the nearest 1/100th of 1%) equal to the rate published by the Federal Reserve Bank of New York on the preceding Business Day or, if no such rate is so published, the average rate per annum, as determined by Lender, quoted for overnight Federal Funds transactions last arranged prior to such day.

Fiscal Quarter means a fiscal quarter of a Fiscal Year.

Fiscal Year means the fiscal year of each Loan Party, which period shall be the 12-month period ending on December 31 of each year (or, for the fiscal year that includes the Closing Date, the period beginning on the date of this Agreement and ending on December 31 of such fiscal year.

Fixed Charge Coverage Ratio means for any period, the ratio of (a) the total for such period of EBITDA minus the sum for such period of (i) all income taxes paid during the period by (reduced by all income taxes, if any, refunded or credited during the period to) the Loan Parties and income taxes paid within 75 days of the end of such period, for such period, (ii) all Capital Expenditures and (iii) management fees paid in cash to Manager pursuant to the Management Agreement during such period or within 30 days of the end of such period to (b) the sum for such period of (i) Interest charges accrued for such period and paid or payable in cash at any time plus (ii) required payments of principal of Debt (including the Term Loans but excluding the Revolving Loans).

Foreign Subsidiary means any Subsidiary that is not incorporated or organized under the laws of a State within the United States of America or the District of Columbia.

FRB means the Board of Governors of the Federal Reserve System or any successor thereto.

GAAP means generally accepted accounting principles in effect in the United States of America set forth from time to time in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the U.S. accounting profession), which are applicable to the circumstances as of the date of determination.

General Intangible has the meaning set forth in the Guarantee and Collateral Agreement.

Governmental Authority means any nation or government, any Federal, state, city, town, municipality, county, local or other political subdivision thereof or thereto and any department, commission, board, bureau, instrumentality, agency or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

Guarantee and Collateral Agreement means that certain Guarantee and Collateral Agreement, dated as of the Closing Date, by each Loan Party in favor of Lender, as amended, restated or otherwise modified from time to time.

Hazardous Material means any hazardous wastes, or other wastes, chemical substances or mixtures, pesticides, pollutants, contaminants, toxic chemicals, petroleum products or byproducts, asbestos, polychlorinated biphenyls, or radiation regulated under, including any material, substance or waste defined as a “hazardous waste,” “hazardous material,” “hazardous substance,” “toxic waste,” “hazardous pollutant” or “toxic substance” in, the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended (42 U.S.C. Section 9601, et. seq.), the Occupational Health and Safety Act (29 U.S.C. Section 651, et. seq.), the Hazardous Materials Transportation Act, as amended (49 U.S.C. Section 1801, et. seq.), the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act, as amended (42 U.S.C. Section 6901, et. seq.), the Toxic Substances Control Act, as amended (15 U.S.C. Section 2601, et. seq.), the Federal Water Pollution Control Act, as amended by the Clean Water Act, 33 U.S.C. Section 1251 et seq.; the Clean Air Act (42 U.S.C. Section 7401 et seq.), the Atomic Energy Act (42 U.S.C. Section 2014, et seq.), and Energy Reorganization Act (42 U.S.C. Section 5801 et seq.), each and all as amended, and each state counterpart, or any other Environmental, Health, and Safety Requirements, provided that the term “Hazardous Materials” shall not include any soil, cuttings, liquids, or other material accepted, processed, generated, handled, recycled, treated, placed, deposited and/or disposed as part of the ordinary course operations and business of the Loan Parties.

Hedging Obligation means, with respect to any Person, any liability of such Person under any interest rate, currency or commodity swap agreement, cap agreement or collar agreement, and any other agreement or arrangement designed to protect a Person against fluctuations in interest rates, currency exchange rates or commodity prices. The amount of any Person’s obligation in respect of any Hedging Obligation shall be deemed to be the incremental obligation that would be reflected in the financial statements of such Person in accordance with GAAP.

Integration Services Agreement means that certain Integration Services Agreement, dated as of August 31, 2016, by and between Co-Borrower and Manager.

Integration Services Fee means the fee payable to Manager pursuant to the Integration Services Agreement in an amount not to exceed $3,500,000.

Interest Determination Date has the meaning set forth within the defined term Applicable Margin.

Interest Expense means for any period the consolidated interest expense of the Loan Parties for such period (including all imputed interest on Capital Leases).

Interest Period means, as to any LIBOR Loan, the period commencing on the date such Loan is borrowed or continued as, or converted into, a LIBOR Loan and ending on the date one, two or three months thereafter, as selected by Borrower pursuant to Section 2.2.2 or 2.2.3, as the case may be; provided, that: (a) if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the following Business Day unless the result of such extension would be to carry such Interest Period into another calendar month, in which event such Interest Period shall end on the preceding Business Day; (b) any Interest Period that begins on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period shall end on the last Business Day of the calendar month at the end of such Interest Period; (c) Borrower may not select any Interest Period for a Revolving Loan which would extend beyond the scheduled Termination Date; and (d) Borrower may not select any Interest Period for a Term Loan if, after giving effect to such selection, the aggregate principal amount of all Term Loans having Interest Periods ending after any date on which an installment of the Term Loans is scheduled to be repaid would exceed the aggregate principal amount of the Term Loans scheduled to be outstanding after giving effect to such repayment.

Investment means, with respect to any Person, (a) the purchase of any debt or equity security of any other Person, (b) the making of any loan or advance to any other Person, (c) becoming obligated with respect to a Contingent Obligation in respect of obligations of any other Person (other than travel and similar advances to employees in the ordinary course of business) or (d) the making of an Acquisition.

Investment Affiliate means, with respect to Manager, any fund or investment vehicle that (a) is organized by Manager for the purpose of making equity or debt investments in one or more companies and (b) is controlled by Manager. For purposes of this definition “control” means the power to direct or cause the direction of management and policies of a Person, whether by contract or otherwise.

IRC means the Internal Revenue Code of 1986, as amended.

Legal Costs means, with respect to any Person, (a) all reasonable fees and charges of any counsel (including counsel employed by such Person), accountants, auditors, appraisers, consultants and other professionals to such Person, and (b) all court costs and similar legal expenses.

Lender has the meaning set forth in the Preamble.

Letter of Credit has the meaning set forth in Section 2.3.1.

LIBOR Loan means any Loan which bears interest at a rate determined by reference to the LIBOR Rate.

LIBOR Rate means, with respect to any LIBOR Loan for any Interest Period, a rate per annum (rounded upwards, if necessary, to the nearest 1/10,000 of 1%) equal to the greater of (a) 1.0% and (b) (i) the offered rate for deposits in Dollars for the applicable Interest Period and for the amount of the applicable LIBOR Loan that appears on Telerate Page 3750 at 11:00 a.m. London time (or, if not so appearing, as published in the “Money Rates” section of The Wall Street Journal or another national publication selected by Lender) two Business Days prior to the first day of such Interest Period, divided by (ii) the sum of one minus the daily average during such Interest Period of the aggregate maximum reserve requirement (expressed as a decimal) then imposed under Regulation D of the FRB for “Eurocurrency Liabilities” (as defined therein).

Lien means, with respect to any Person, any interest granted by such Person in any real or personal property, asset or other right owned or being purchased or acquired by such Person which secures payment or performance of any obligation and shall include any mortgage, lien, pledge, encumbrance, charge or other security interest of any kind, whether arising by contract, as a matter of law, by judicial process or otherwise.

Loan Documents means this Agreement, the Notes, the Collateral Documents and all documents, instruments and agreements delivered in connection with the foregoing, all as amended, restated or otherwise modified from time to time.

Loan Party means each of Parent, Borrower, Co-Borrower and each Subsidiary; collectively, the Loan Parties.

Loans mean Revolving Loans and Term Loans.

Management Agreement means the Management Agreement, dated as of the date of this Agreement, by and between the Manager and Borrower.

Manager means Compass Group Management LLC, a Delaware limited liability company.

Margin Stock means any “margin stock” as defined in Regulation T, U or X of the FRB.

Material Adverse Effect means a material adverse change in, or a material adverse effect upon, (a) the financial condition, operations, assets, business, properties or prospects of the Loan Parties taken as a whole, (b) the ability of any Loan Party to perform any of its Obligations under any Loan Document, or (c) the rights and remedies of Lender under any Loan Document, the validity, perfection or priority of any Lien in favor of Lender on any substantial portion of the Collateral under the Collateral Documents or upon the legality, validity, binding effect or enforceability against any Loan Party of any Loan Document, in each case taken as a whole; provided, however, that the following events, changes, conditions or effects shall not be deemed to have a “Material Adverse Effect”: (i) any event change, condition or effect occurring generally in the industry in which Borrower, Co-Borrower or any of the Subsidiaries operates; (ii) changes in events, conditions or effects in connection with general economic or political conditions; (iii) any adverse change in the financial condition, operations, assets, business, properties or prospects of the Loan Parties taken as a whole that does not impact the long term economic prospects and performance of the Loan Parties taken as a whole; or (iv) a failure to meet internal projections or forecasts.

Mortgage means a mortgage, deed of trust, leasehold mortgage or similar instrument granting Lender a Lien on a real property interest of any Loan Party, each as amended, restated or otherwise modified from time to time.

Multiemployer Pension Plan means a multiemployer plan, as defined in Section 4001(a)(3) of ERISA, to which Borrower or any member of the Controlled Group may have any liability.

Net Cash Proceeds means:

(a) with respect to any Disposition, the aggregate cash proceeds (including cash proceeds received pursuant to policies of insurance and by way of deferred payment of principal pursuant to a note, installment receivable or otherwise, but only as and when received) received by any Loan Party pursuant to such Disposition net of (i) the reasonable direct costs relating to such Disposition (including sales commissions and legal, accounting and investment banking fees, commissions and expenses and, in the case of a Disposition of any asset, costs of

preparing such asset for sale), (ii) any portion of such proceeds deposited in an escrow account pursuant to the documentation relating to such Disposition (provided that such amounts shall be treated as Net Cash Proceeds upon their release from such escrow account to the applicable Loan Party), (iii) taxes paid or reasonably estimated by Borrower to be payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements), (iv) amounts required to be applied to the repayment of any Debt secured by a Lien prior to the Lien of Lender on the asset subject to such Disposition, and (v) with respect to any Disposition, all money actually applied within 180 days to repair, replace or reconstruct damaged property or property affected by loss, destruction, damage, condemnation, confiscation, requisition, seizure or taking, all of the costs and expenses reasonably incurred in connection with the collection of such proceeds, award or other payments, and any amounts retained by or paid to parties having superior rights to such proceeds, awards or other payments; and

(b) with respect to any issuance of equity securities, the aggregate cash proceeds received by any Loan Party pursuant to such issuance, net of the reasonable direct costs relating to such issuance (including reasonable sales and underwriter’s commission).

Non-Senior Debt means the Term B Loans plus any unsecured Debt of any Loan Party which has subordination terms, covenants, pricing and other terms which have been approved in writing by Lender.

Note means a promissory note substantially in the form of Exhibit C, as the same may be amended, restated or otherwise modified from time to time.

Obligations means all liabilities, indebtedness and obligations (whether monetary or otherwise and including post-petition interest, whether or not allowed) of any Loan Party under this Agreement, any other Loan Document, any Collateral Document or any other document or instrument executed in connection herewith or therewith and all Hedging Obligations permitted hereunder which are owed to Lender or its Affiliates, in each case howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, liquidated or unliquidated, disputed or undisputed, legal or equitable, secured or unsecured, now or hereafter existing, or due or to become due, and whether or not a claim for any of the foregoing is allowed in whole or in part in any proceeding under the Bankruptcy Code with respect to any Loan Party.

Operating Lease means any lease of (or other agreement conveying the right to use) any real or personal property by Borrower, Co-Borrower or any Subsidiary, as lessee, other than any Capital Lease.

Paid in Full means, with respect to any Obligations, (a) the payment in full in cash and performance of all such Obligations, and (b) the termination of all Commitments relating to such Obligations.

Parent means 5.11 ABR Corp., a Delaware corporation.

PBGC means the Pension Benefit Guaranty Corporation and any entity succeeding to any or all of its functions under ERISA.

Pension Plan means a “pension plan”, as such term is defined in Section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a Multiemployer Pension Plan), and to which Borrower or any member of the Controlled Group may have any liability, including any liability by reason of having been a substantial employer within the meaning of Section 4063 of ERISA at any time during the preceding five years, or by reason of being deemed to be a contributing sponsor under Section 4069 of ERISA.

Permitted Integration Services Fees means the Integration Services Fee and all other management or consulting fees payable to the Manager by any Loan Party in connection with the acquisitions of target businesses by any Loan Party or dispositions of the property or assets of any Loan Party to the extent that such fees are paid within 13 months of the applicable acquisition or disposition, provided such fees have been approved by the board of directors of Borrower and by Lender.

Permitted Management Fees means management or consulting fees payable pursuant to the terms of the Management Agreement in an aggregate amount not to exceed $1,000,000 in any Fiscal Year.

Person means any natural person, corporation, partnership, trust, limited liability company, association, Governmental Authority or unit, or any other entity, whether acting in an individual, fiduciary or other capacity.

Pro Rata Revolving Share means, with respect to Lender or any Assignee, the applicable percentage (as adjusted from time to time in accordance with the terms hereof) specified opposite such Person’s name on Annex I which corresponds to the Revolving Loan Commitment, which percentage shall be with respect to Revolving Loans outstanding if the Revolving Loan Commitment has terminated.

Pro Rata Share means, with respect to Lender or any Assignee, the applicable percentage (as adjusted from time to time in accordance with the terms hereof) obtained by dividing (a) the sum of such Person’s (i) Pro Rata Revolving Share of the Revolving Loan Commitment (or if the Revolving Loan Commitment has terminated, such Person’s Pro Rata Revolving Share of the Revolving Loans outstanding), (ii) Pro Rata Term A Loan Share of the Term A Loans) and (iii) Pro Rata Term B Loan Share of the Term B Loans, by (b) the Total Loan Commitment.

Pro Rata Term A Loan Share means, with respect to Lender or any Assignee, the applicable percentage (as adjusted from time to time in accordance with the terms hereof) specified opposite such Person’s name on Annex I which corresponds to the Term A Loans.

Pro Rata Term B Loan Share means, with respect to Lender or any Assignee, the applicable percentage (as adjusted from time to time in accordance with the terms hereof) specified opposite such Person’s name on Annex I which corresponds to the Term B Loans.

Purchase Agreement means that certain Agreement and Plan of Merger, by and among Parent, 5.11 ABR Merger Corp., a Delaware corporation, Borrower and TA Associates Management, L.P., as the Securityholders’ Agent, dated as of July 29, 2016.

Related Transactions means the transactions contemplated by the Purchase Agreement.

Revolving Loan Commitment means $25,000,000 (as reduced from time to time pursuant to the terms hereof), plus such additional amounts, if any, that Lender may, in its sole discretion, from time to time commit to advance as Revolving Loans in connection with one or more Acquisitions; provided, however, that no advance in respect of any such additional Revolving Loan Commitment shall exceed that amount that would result in: (i) the Senior Debt to EBITDA Ratio exceeding 4.5 to 1.0; or (ii) the Total Debt to EBITDA Ratio exceeding 6.5 to 1.0, with both such ratios calculated as of the last day of the Fiscal Quarter immediately preceding the Fiscal Quarter in which such additional amount is to be advanced and on a pro forma basis based on EBITDA for the Computation Period as if the applicable Acquisition had been consummated on the calculation date, with such adjustments thereto as may be determined necessary or appropriate by Lender.

Revolving Loans has the meaning set forth in Section 2.1.1.

Securitization Transaction means, with respect to any Person, any financing transaction or series of financing transactions (including factoring arrangements) pursuant to which such Person or any Subsidiary of such Person may sell, convey or otherwise transfer, or grant a security interest in, accounts, payments, receivables, rights to future lease payments or residuals or similar rights to payment to a special purpose Subsidiary or other Affiliate of such Person.

Senior Debt means, as of any day, the Revolving Loans, to the extent outstanding at the end of such day, plus the aggregate principal amount of the Term A Loans outstanding at the end of such day, plus all obligations, contingent or otherwise, with respect to the face amount of all letters of credit (whether or not drawn) and banker’s acceptances, if any, issued for the account of a Loan Party and outstanding at the end of such day.

Senior Debt to EBITDA Ratio means, as of the last day of any Fiscal Quarter, the ratio of (i) Senior Debt as of such day to (ii) EBITDA for the Computation Period ending on such day.

Stated Amount means, with respect to any Letter of Credit at any date of determination, (a) the maximum aggregate amount available for drawing thereunder under any and all circumstances, plus (b) the aggregate amount of all unreimbursed payments and disbursements under such Letter of Credit.

Subsidiary means, with respect to any Person, a corporation, partnership, limited liability company or other entity of which such Person owns, directly or indirectly, such number of outstanding shares or other equity interests as to have more than 50% of the ordinary voting power for the election of directors or other managers of such corporation, partnership, limited liability company or other entity. Unless the context otherwise requires, each reference to Subsidiary or Subsidiaries herein shall be a reference to Subsidiary or Subsidiaries of Borrower.

Synthetic Lease Obligation means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).

Taxes has the meaning set forth in Section 3.1(a).

Term A Loan Commitment means $125,000,000 plus, after the Closing Date, such additional amounts, if any, that Lender may, in its sole discretion, from time to time advance as Term A Loans in connection with one or more Acquisitions; provided, however, that no such additional Term A Loan Commitment shall exceed that amount which would result in Borrower’s: (i) Senior Debt to EBITDA Ratio exceeding 4.5 to 1.0; or (ii) Total Debt to EBITDA Ratio exceeding 6.5 to 1.0, with both such ratios calculated as of the last day of the Fiscal Quarter immediately preceding the Fiscal Quarter in which such additional amount is to be advanced and on a pro forma basis based on EBITDA for the Computation Period as if the applicable Acquisition had been consummated on the calculation date, with such adjustments thereto as may be determined necessary or appropriate by Lender.

Term A Loan Maturity Date means August 31, 2022 or such earlier date on which the Commitments terminate pursuant to Section 8.

Term A Loans means a loan from Lender to Borrower and Co-Borrower in the principal amount of the Term A Loan Commitment on the Closing Date, together with such other loans, if any, pursuant to the Term A Loan Commitment.

Term B Loan Commitment means $50,000,000 plus, after the Closing Date, such additional amounts, if any, that Lender may, in its sole discretion, from time to time advance as Term B Loans in connection with one or more Acquisitions; provided, however, that no such additional Term B Loan Commitment shall exceed that amount which would result in Borrower’s Total Debt to EBITDA Ratio exceeding 6.5 to 1.0, with such ratio to be calculated as of the last day of the Fiscal Quarter immediately preceding the Fiscal Quarter in which such additional amount is to be advanced and on a pro forma basis based on EBITDA for the Computation Period as if the applicable Acquisition had been consummated on the calculation date, with such adjustments thereto as may be determined necessary or appropriate by Lender.

Term B Loan Maturity Date means August 31, 2023 or such earlier date on which the Commitments terminate pursuant to Section 8.

Term B Loans means a loan from Lender to Borrower and Co-Borrower in the principal amount of the Term B Loan Commitment on the Closing Date, together with such other loans, if any, pursuant to the Term B Loan Commitment.

Term Loan Commitments means the Term A Loan Commitment and the Term B Loan Commitment, collectively.

Term Loans means the Term A Loans and the Term B Loans, collectively.

Termination Date means August 31, 2022 or such earlier date on which the Revolving Loan Commitment terminates pursuant to Section 2.9 or Section 8.

Total Debt means, as of any day, all Debt (other than Debt described in clause (g) of the definition thereof and Debt of any Loan Party to another Loan Party) of the Loan Parties at the end of such day, determined on a consolidated basis.

Total Debt to EBITDA Ratio means, as of the last day of any Fiscal Quarter, the ratio of: (a) Total Debt as of such day to (b) EBITDA for the Computation Period ending on such day.

Total Loan Commitment means at any date of determination, the sum of (i) the Revolving Loan Commitment (or if the Revolving Loan Commitment has terminated, the Revolving Loans then outstanding) at the end of such date plus (ii) the outstanding principal balance of the Term Loans at the end of such date plus (iii) to the extent, if any, that the Term Loan Commitments remain unused and in effect, the amount of such remaining Term Loan Commitments.

Unused Availability Fee means the fee payable by Borrower and Co-Borrower to Lender pursuant to Section 2.7.2.

Wholly-Owned Subsidiary means, as to any Person, another Person all of the equity interests of which (except directors’ qualifying shares) are at the time directly or indirectly owned by such Person and/or another Wholly-Owned Subsidiary of such Person. Unless the context otherwise requires, each reference to Wholly-Owned Subsidiary or Wholly-Owned Subsidiaries herein shall be a reference to Wholly-Owned Subsidiary or Wholly-Owned Subsidiaries of Borrower.

1.2 Interpretation.

In the case of this Agreement and each other Loan Document, (a) the meanings of defined terms are equally applicable to the singular and plural forms of the defined terms; (b) Annex, Exhibit, Schedule and Section references are to such Loan Document unless otherwise specified; (c) the term “including” is not limiting and means “including but not limited to”; (d) in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including”; the words “to” and “until” each mean “to but excluding”, and the word “through” means “to and including”; (e) unless otherwise expressly provided in such Loan Document, (i) references to agreements and other contractual instruments shall be deemed to include all subsequent amendments and other modifications thereto, but only to the extent such amendments and other modifications are not prohibited by the terms of any Loan Document, and (ii) references to any statute or regulation shall be construed as including all statutory and regulatory provisions amending, replacing, supplementing or interpreting such statute or regulation; (f) this Agreement and the other Loan Documents may use several different limitations, tests or measurements to regulate the same or similar matters, all of which are cumulative and each shall be performed in accordance with its terms; (g) this Agreement and the other Loan Documents are the result of negotiations among and have been reviewed by counsel to Lender, Borrower and the other parties thereto and are the products of all parties; accordingly, they shall not be construed against Lender merely because of Lender’s involvement in their preparation; and (h) the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or.”

Section 2. Credit Facilities.

2.1 Commitments.

On and subject to the terms and conditions of this Agreement, Lender agrees as follows:

2.1.1 Revolving Loan Commitments.

Lender will make loans to Borrower and Co-Borrower on a revolving basis (“Revolving Loans”) from time to time (which Revolving Loans may be repaid by Borrower and Co-Borrower in whole or in part from time to time) until the Termination Date in such amounts as Borrower or Co-Borrower may request from Lender; provided, that after giving effect to such Revolving Loans, the Revolving Loans outstanding will not at any time exceed the Revolving Loan Commitment minus the aggregate Stated Amount of all outstanding Letters of Credit.

2.1.2 Term Loan Commitments.

Lender agrees to make (a) a Term A Loan to Borrower and Co-Borrower on the Closing Date in an amount equal to the Term A Loan Commitment as of the Closing Date, and (b) a Term B Loan to Borrower and Co-Borrower on the Closing Date in an amount equal to the Term B Loan Commitment as of the Closing Date. Lender shall have no obligation to make Term Loans after the Closing Date. Term Loans which are repaid or prepaid by Borrower or Co-Borrower, in whole or in part, may not be re-borrowed.

2.2 Loan Procedures.

2.2.1 Loan Types.

Each Loan shall be either a Base Rate Loan or a LIBOR Loan, as Borrower shall specify in the related notice of borrowing or conversion pursuant to Section 2.2.2 or 2.2.3. Base Rate Loans and LIBOR Loans may be outstanding at the same time, provided that not more than three different Interest Periods shall exist among outstanding LIBOR Loans at any one time. All borrowings, conversions and repayments of Revolving Loans shall be effected so that Lender and each Assignee will have a ratable share (according to its Pro Rata Revolving Share) of all Revolving Loans and all Interest Periods of LIBOR Loans. Notwithstanding the foregoing or any other provision of this Agreement, Borrower may not make, and Lender shall not be obligated to fund, more than one (1) Revolving Loan borrowing during any single calendar week; provided, however, Borrower may from time to time request additional Revolving Loan borrowings for emergency funding purposes and Lender shall use its best efforts to fund such emergency Revolving Loan borrowings.

2.2.2 Borrowing.

Borrower shall give written (including via email) notice or telephonic notice (followed immediately by written confirmation thereof) to Lender of each proposed borrowing of a Revolving Loan not later than (a) in the case of a Base Rate borrowing, 11:00 a.m. New York City time at least one (1) Business Day prior to the proposed date of such borrowing, and (b) in the case of a LIBOR borrowing, 11:00 a.m. New York City time at least three (3) Business Days prior to the proposed date of such borrowing. Each such notice shall be effective upon receipt by Lender, shall be irrevocable, and shall specify, in the form of a Borrowing Notice, the date, amount and type of borrowing and, in the case of LIBOR borrowing, the initial Interest Period therefor. So long as Borrower’s request is timely made and the conditions precedent set forth in Section 4 with respect to such borrowing have been satisfied, Lender shall pay over the proceeds of such borrowing request to Borrower on the requested borrowing date. Each borrowing shall be on a Business Day. Each Base Rate borrowing shall be in an aggregate amount of $250,000 or of any integral multiple of $50,000 in excess thereof, and each LIBOR borrowing shall be in an aggregate amount of $250,000 or of any integral multiple of $50,000 in excess thereof.

2.2.3 Conversion; Continuation.

(a) Subject to Section 2.2.1, Borrower may, upon irrevocable written (including via email) notice to Lender in accordance with clause (b) below, elect (i) as of any Business Day, to convert any Loans (or any part thereof in an aggregate amount of not less than $250,000 or a higher integral multiple of $50,000) into Loans of the other type or (ii) as of the last day of the applicable Interest Period, to continue any LIBOR Loans having Interest Periods expiring on such day (or any part thereof in an aggregate amount not less than $250,000 or a higher integral multiple of $50,000) for a new Interest Period; provided, that any conversion of a LIBOR Loan on a day other than the last day of an Interest Period therefor shall be subject to Section 3.

(b) Borrower shall give written (including via email) or telephonic notice (followed immediately by written confirmation thereof) to Lender of each proposed conversion or continuation not later than (i) in the case of conversion into Base Rate Loans, 11:00 a.m. New York City time at least one Business Day prior to the proposed date of such conversion and (ii) in the case of conversion into or continuation of LIBOR Loans, 11:00 a.m. New York City time at least four Business Days prior to the proposed date of such conversion or continuation, specifying in each case in the form of a Conversion/Continuation Notice: (1) the proposed date of conversion or continuation; (2) the aggregate amount of Loans to be converted or continued; (3) the type of Loans resulting from the proposed conversion or continuation; and (4) in the case of conversion into, or continuation of, LIBOR Loans, the duration of the requested Interest Period therefor.

(c) If upon the expiration of any Interest Period applicable to LIBOR Loans, Borrower has failed to select timely a new Interest Period to be applicable to such LIBOR Loans, Borrower shall be deemed to have elected to convert such LIBOR Loans into Base Rate Loans effective on the last day of such Interest Period.

2.3 Letters of Credit.

2.3.1 At the request of Borrower, Lender may issue, or cause to be issued, from time to time before the date which is 30 days prior to the Termination Date standby letters of credit, or participation agreements confirming payment to issuers (reasonably acceptable to Lender) of standby letters of credit, in each case for the account of any Loan Party and containing terms and conditions which are consistent with this Agreement and reasonably satisfactory to Lender (each such standby letter of credit and participation agreement, a “Letter of Credit”). With respect to the outstanding face amount drawn on each such Letter of Credit, Borrower and Co-Borrower shall pay to Lender a fee equal to the Applicable Margin per annum for LIBOR Rate Revolving Loans, calculated based upon a year of 365 days for actual days outstanding and payable on the

last day of each calendar quarter in arrears. In addition, with respect to each Letter of Credit, Borrower and Co-Borrower shall pay to or as directed by Lender such additional customary fees as Borrower and Lender may from time to time agree. After giving effect to each such issuance, the aggregate Stated Amount of all Letters of Credit shall not at any time exceed the least of (a) $3,000,000 and the Revolving Loan Commitment minus the aggregate amount of all then outstanding Revolving Loans. Borrower shall give notice to Lender of the proposed issuance of each Letter of Credit on a Business Day which is at least ten (10) Business Days (or such lesser number of days as Lender shall agree) prior to the proposed date of issuance of such Letter of Credit. Each such notice shall be accompanied by a Letter of Credit application in form reasonably acceptable to Lender, duly executed by Borrower, together with such other documentation as Lender may request in support thereof, it being understood that each Letter of Credit application shall specify, among other things, the date on which the proposed Letter of Credit is to be issued, and the expiration date of such Letter of Credit (which shall not be later than the earlier to occur of (a) one year after the date of issuance thereof and (b) 30 days prior to the scheduled Termination Date).

2.3.2 Borrower and Co-Borrower hereby unconditionally and irrevocably agree to reimburse Lender for each payment or disbursement made by Lender under any Letter of Credit honoring any demand for payment made thereunder, in each case on the date that such payment or disbursement is made. Lender shall promptly notify Borrower whenever any demand for payment is made under any Letter of Credit; provided, that the failure of Lender to so notify Borrower shall not affect the rights of Lender in any manner whatsoever. Any amount not reimbursed on the date of such payment or disbursement shall bear interest from the date of such payment or disbursement to the date that Lender is reimbursed therefor, payable on demand, at the interest rate per annum from time to time in effect for Revolving Loans which are Base Rate Loans.

2.3.3 Borrower’s and Co-Borrower’s reimbursement obligations hereunder shall be irrevocable and unconditional under all circumstances, including (i) any lack of validity or enforceability of any Letter of Credit, this Agreement or any other Loan Document, (ii) the existence of any claim, set-off, defense or other right which any Loan Party may have at any time against a beneficiary named in a Letter of Credit, any transferee of any Letter of Credit (or any Person for whom any such transferee may be acting), Lender or any other Person, whether in connection with any Letter of Credit, this Agreement, any other Loan Document, the transactions contemplated herein or any unrelated transactions (including any underlying transaction between any Loan Party and the beneficiary named in any Letter of Credit), (iii) the validity, sufficiency or genuineness of any document which Lender (or, as applicable, the issuer of any underlying letter of credit) has determined complies on its face with the terms of the applicable Letter of Credit (or, if applicable, underlying letter of credit), even if such document should later prove to have been forged, fraudulent, invalid or insufficient in any respect or any statement therein shall have been untrue or inaccurate in any respect, or (iv) the surrender or impairment of any security for the performance or observance of any of the terms hereof.

2.4 Certain Conditions.

Notwithstanding any other provision of this Agreement, Lender shall not have an obligation to make any Loan, or to permit the continuation of any expiring LIBOR Loan as a LIBOR Loan, or to permit any conversion into any LIBOR Loan, if an Event of Default or Default exists.

2.5 Loan Accounting.

2.5.1 Recordkeeping.

Lender shall record in its records the date and amount of each Loan made and each repayment or conversion thereof and, in the case of each LIBOR Loan, the dates on which each Interest Period for such Loan shall begin and end. The aggregate unpaid principal amount so recorded shall be rebuttably presumptive evidence of the principal amount of the Loans owing and unpaid. The failure to so record any such amount or any error in so recording any such amount shall not, however, limit or otherwise affect the Obligations of Borrower hereunder or under any Note to repay the principal amount of the Loans hereunder, together with all interest accruing thereon.

2.6 Interest.

2.6.1 Interest Rates.

Borrower and Co-Borrower promise to pay interest on the unpaid principal amount of each Loan for the period commencing on the date of such Loan until such Loan is Paid in Full as follows: (a) for each Revolving Loan and Term A Loan, at all times while such Revolving Loan or Term A Loan is a Base Rate Loan, at a rate per annum equal to the sum of the Base Rate from time to time in effect plus the Applicable Margin; (b) for each Revolving Loan and Term A Loan at all times while such Revolving Loan or Term A Loan is a LIBOR Loan, at a rate per annum equal to the sum of the LIBOR Rate applicable to each Interest Period for such Loan plus the Applicable Margin, and (c) for each Term B Loan, at a rate per annum equal to 12%, comprised entirely of cash interest; provided, that (i) at any time an Event of Default exists, if requested by Lender, the interest rate otherwise corresponding to each Loan shall be increased by two (2.0) percentage points per annum, (ii) any such increase may thereafter be rescinded by Lender, and (iii) upon the occurrence of an Event of Default under Section 8.1.1 or 8.1.3, any such increase described in the foregoing clause (i) shall occur automatically. In no event shall interest payable by Borrower and Co-Borrower to Lender hereunder exceed the maximum rate permitted under applicable law, and if any such provision of this Agreement is in contravention of any such law, such provision shall be deemed modified to limit such interest to the maximum rate permitted under such law.

2.6.2 Interest Payment Dates.

Accrued interest on each Base Rate Loan and on the Term B Loan shall be payable in arrears on the first day of each calendar month and at maturity in cash. Accrued interest on each LIBOR Loan shall be payable (a) on the last day of each Interest Period relating to such Loan, (b) upon a prepayment of such Loan in accordance with Section 2.9 and (c) at maturity in cash. After maturity and at any time an Event of Default exists, all accrued interest on all Loans shall be payable in cash on demand at the rates specified in Section 2.6.1.

2.6.3 Setting and Notice of LIBOR Rates.

The applicable LIBOR Rate for each Interest Period shall be determined by Lender, and notice thereof shall be given by Lender promptly to Borrower. Each determination of the applicable LIBOR Rate by Lender shall be conclusive and binding upon the parties hereto, in the absence of demonstrable error. Lender shall, upon written request of Borrower, deliver to Borrower a statement showing the computations used by Lender in determining any applicable LIBOR Rate hereunder.

2.6.4 Computation of Interest.

Interest shall be computed by Lender for the actual number of days elapsed on the basis of a year of (a) 365/366 days for interest calculated at the Base Rate and (b) 360 days for interest calculated at the LIBOR Rate. The applicable interest rate for each Base Rate Loan shall change simultaneously with each change in the Base Rate. Lender shall determine each interest rate applicable to the Loans and its determination thereof, and its computation of interest thereon, shall be conclusive in the absence of manifest error.

2.7 Fees.

2.7.1 Commitment Fee.

Borrower and Co-Borrower jointly and severally agree to pay to Lender on the Closing Date a commitment fee (the “Commitment Fee”) equal to the sum of (i) 1.00% of the aggregate Revolving Loan commitment and Term A Loan amounts plus (ii) 2.00% of the Term B Loan amount.

2.7.2 Unused Availability Fee.

For the period from the Closing Date to the Termination Date, Borrower and Co-Borrower jointly and severally agree to pay to Lender a fee (the “Unused Availability Fee”) equal to 0.5% multiplied by the amount by which the Revolving Loan Commitment exceeds the average daily Revolving Loans outstanding plus the aggregate Stated Amount of all outstanding Letters of Credit. The Unused Availability Fee shall be payable in arrears on the first day of each calendar quarter and on the Termination Date for any period then ending for which the Unused Availability Fee shall not have previously been paid. The Unused Availability Fee shall be computed by Lender for the actual number of days elapsed on the basis of a year of 360 days.

2.7.3 Additional Commitment Fees.

Borrower and Co-Borrower jointly and severally agree to pay to Lender on each date, if any, on which (i) additional Term A Loan commitments are made (or additional Term A Loans advanced) or additional Revolving Loan commitments are made, in each case after the Closing Date, an amount equal to 1.00% multiplied by the amount of each such post-Closing Date advance or commitment, and (ii) additional Term B Loan commitments are made (or additional Term B Loans advanced), in each case, after the Closing Date an amount equal to 2% multiplied by the amount of each such post-Closing Date advance or commitment.

2.8 Commitment Reduction.

2.8.1 Voluntary Reduction or Termination of Revolving Loan Commitment.

Borrower may from time to time on at least five Business Days’ prior written notice received by Lender permanently reduce the Revolving Loan Commitment to an amount not less than the sum of (i) Revolving Loans outstanding plus (ii) the aggregate Stated Value of all outstanding Letters of Credit. Any such reduction shall be in an amount not less than $500,000 or a higher integral multiple of $100,000. Concurrently with any reduction of the Revolving Loan Commitment to zero, Borrower shall pay all interest on the Revolving Loans and all accrued and unpaid fees owing in respect thereof, including any Unused Availability Fee.

2.9 Prepayment.

2.9.1 Voluntary Prepayment.

Borrower and Co-Borrower may from time to time, on at least one Business Day’s written (including via email) notice or telephonic notice (if a telephonic notice, followed immediately by written confirmation thereof) to Lender not later than 11:00 a.m. New York City time on such day, prepay the Loans in whole or in part; provided that Borrower may not prepay all or any portion of the Term B Loans if, either immediately prior to or after giving effect to any such prepayment, any portion of the Revolving Loans or Term A Loans are outstanding. Such notice to Lender shall specify the Loans to be prepaid and the date and amount of prepayment.

Any such partial prepayment shall be in an amount equal to $500,000 or a higher integral multiple of $100,000. All prepayments of Term Loans pursuant to this Section 2.9.1 shall be applied pursuant to Section 2.9.3.

2.9.2 Mandatory Prepayment.

(a) Subject to Section 2.9.2(c), Borrower and Co-Borrower shall prepay, first, the Term A Loans until Paid in Full, second, the Term B Loans until Paid in Full (in each case in the inverse order of maturity to the remaining installments thereof), and third, the Revolving Loans until Paid in Full, at the following times and in the following amounts, in each case except as otherwise expressly provided in this Agreement:

(i) concurrently with receipt by any Loan Party of any Net Cash Proceeds from any Disposition, in an amount equal to such Net Cash Proceeds;

(ii) concurrently with receipt by any Loan Party of any Net Cash Proceeds from any issuance of its equity securities (other than equity securities that are issued pursuant to Section 7.11(a)) or the issuance of Debt (other than Debt permitted by Section 7.1, in an amount equal to such Net Cash Proceeds;

(iii) within 90 days after the end of each Fiscal Year (commencing with Fiscal Year 2017), in an amount equal to the ECF Percentage of Excess Cash Flow for such Fiscal Year; and

(iv) concurrently with the receipt by any Loan Party of any Extraordinary Receipts, in an amount equal to such Extraordinary Receipts.

(b) If on any day the sum of (i) the Revolving Loans then outstanding plus (ii) the Stated Amount of the outstanding Letters of Credit exceeds the Revolving Loan Commitment, whether pursuant to a reduction of the Revolving Loan Commitment pursuant to Section 2.8.1 or otherwise, Borrower and Co-Borrower shall immediately prepay Revolving Loans in an amount sufficient to eliminate such excess.

(c) Notwithstanding Section 2.9.2(a), on each Monday during the term of the Revolving Loan Commitment and for so long as there are Revolving Loans outstanding, Borrower and Co-Borrower shall prepay the Revolving Loans until Paid in Full in an amount equal to the Excess Cash at the time of such payment. Payments pursuant to this Section 2.9.2(c) shall not result in a reduction in the Revolving Loan Commitment.

2.9.3 All Prepayments.

(a) Any prepayment of a LIBOR Loan on a day other than the last day of an Interest Period therefor shall include interest on the principal amount being repaid and shall be subject to Section 3. All prepayments of a Loan shall be applied first to that portion of such Loan comprised of Base Rate Loans and then to that portion of such Loan comprised of LIBOR Loans, in direct order of Interest Period maturities. All prepayments of Term Loans shall be applied first to Term A Loans until Paid in Full and then to Term B Loans and, in each case, in the inverse order of maturity to the remaining installments thereof.

(b) Borrower shall give written (including via email) notice or telephonic notice (followed immediately by written confirmation thereof) to Lender not later than 11:00 a.m. New York City time at least one Business Day prior to each mandatory prepayment pursuant to clause (a) of Section 2.9.2.

2.10 Repayment.

2.10.1 Revolving Loans.

The Revolving Loans then outstanding shall be paid, for the account of Lender and any Assignee according to its respective Pro Rata Revolving Share, in full on the Termination Date.

2.10.2 Term A Loans.

The Term A Loans shall be subject to annual amortization in the principal amount of $6,250,000, with each such annualized amount being due and payable in equal quarterly installments of $1,562,500 on the last day of each Fiscal Quarter, commencing December 31, 2016 and continuing to the Term A Loan Maturity Date, on which date the then outstanding Term A Loans shall be Paid in Full.

2.10.3 Term B Loans.

The Term B Loans shall be Paid in Full on the Term B Loan Maturity Date.

2.11 Payment.

2.11.1 Making Payments.

All payments of principal of or interest on the Notes, and of all fees, shall be made to Lender without setoff, recoupment or counterclaim and in immediately available funds by wire transfer initiated by Borrower by not later than 11:00 a.m. New York City time on the date due. Any such wire of funds not received by Lender prior to 2:00 p.m. New York City time shall be deemed to have been received by Lender on the following Business Day.

2.11.2 Application of Payments and Proceeds.

(a) Except as set forth in Section 2.9.2 and Section 2.9.3, and subject to the provisions of Sections 2.11.2(b) and 2.11.2(c) below, each payment of principal shall be applied to such Loans as Borrower shall direct by notice to be received by Lender on or before the date of such payment or, in the absence of such notice, as Lender shall determine in its discretion.

(b) If an Acceleration Event shall have occurred and be continuing, notwithstanding anything herein or in any other Loan Document to the contrary, Lender shall apply all or any part of payments in respect of the Obligations and proceeds of Collateral, in each case as received by Lender, to the payment of the Obligations in the following order:

(i) FIRST, to the payment of all fees, costs, expenses and indemnities due and owing to Lender under this Agreement or any other Loan Document, and any other Obligations owing to Lender in respect of sums advanced by Lender to preserve or protect the Collateral or to preserve or protect its security interest in the Collateral (whether or not such Obligations are then due and owing to Lender), until Paid in Full;

(ii) SECOND, to the payment of all other fees, costs, expenses and indemnities due and owing to Lender, other than in respect of Term B Loans, until Paid in Full;

(iii) THIRD, to the payment of all accrued and unpaid interest due and owing to Lender, other than in respect of Term B Loans, until Paid in Full;

(iv) FOURTH, to the payment of all principal of the Loans, other than Term B Loans, due and owing until Paid in Full;

(v) FIFTH, to the payment of all other Obligations owing to Lender, other than Obligations owing in respect of Term B Loans, until Paid in Full;

(vi) SIXTH, to the payment of all fees, costs, expenses and indemnities due and owing to Lender in respect of Term B Loans until Paid in Full;

(vii) SEVENTH, to the payment of all accrued and unpaid interest due and owing to Lender in respect of Term B Loans until Paid in Full;

(viii) EIGHTH, to the payment of all principal of Term B Loans due and owing until Paid in Full; and

(ix) NINTH, to the payment of all other Obligations owing to Lender in respect of Term B Loans until Paid in Full.

(c) If an Event of Default shall have occurred and be continuing but an Acceleration Event shall not exist, notwithstanding anything herein or in any other Loan Document to the contrary, Lender shall apply all or any part of payments in respect of the obligations and proceeds of Collateral, in each case as received by Lender, to the payment of the Obligations in such order as Lender may elect. In the absence of a specific determination by Lender, payments in respect of the Obligations and proceeds of Collateral received by Lender shall be applied in the following order:

(ii) SECOND, to the payment of all other fees, costs, expenses and indemnities due and owing to Lender, other than in respect of Term B Loans, until Paid in Full;

(iii) THIRD, to the payment of all accrued and unpaid interest due and owing to Lender, other than in respect of Term B Loans, until Paid in Full;

(iv) FOURTH, to the payment of all principal of the Loans, other than Term B Loans, then due and owing until Paid in Full;

(v) FIFTH, to the payment of all other Obligations owing to Lender, other than Obligations owing in respect of Term B Loans, until Paid in Full;

(vi) SIXTH, to the payment of all fees, costs, expenses and indemnities due and owing to Lender in respect of Term Loans B until Paid in Full;

(vii) SEVENTH, to the payment of all accrued and unpaid interest due and owing to Lender in respect of Term B Loans until Paid in Full;

(viii) EIGHTH, to cash collateralize Obligations consisting of Term B Loans not yet due and owing until Paid in Full; and

(ix) NINTH, to the payment of all other Obligations owing to Lender in respect of Term B Loans until Paid in Full.

2.11.3 Payment Dates.

If any payment of principal or interest with respect to any of the Loans, or of any fees, falls due on a day which is not a Business Day, then such due date shall be extended to the immediately following Business Day (unless, in the case of a LIBOR Loan, such immediately following Business Day is the first Business Day of a calendar month, in which case such due date shall be the immediately preceding Business Day) and, in the case of principal, additional interest shall accrue and be payable for the period of any such extension.

2.11.4 Set-off.

Borrower and Co-Borrower agree that Lender and its Affiliates have all rights of set-off and bankers’ lien provided by applicable law, and in addition thereto, Borrower and Co-Borrower agree that at any time an Event of Default has occurred and is continuing, Lender may apply to the payment of any Obligations hereunder, whether or not then due, any and all balances, credits, deposits, accounts or moneys of Borrower and Co-Borrower then or thereafter with Lender.

Section 3. Yield Protection.

3.1 Taxes.

(a) All payments of principal and interest on the Loans and all other amounts payable hereunder shall be made free and clear of and without deduction for any present or future income, excise, stamp, documentary, property or franchise taxes and other taxes, fees, duties, levies, withholdings or other charges of any nature whatsoever imposed by any taxing authority, excluding taxes imposed on or measured by Lender’s net income by the jurisdiction under which Lender is organized or conducts business (all non-excluded items being called “Taxes”). If any withholding or deduction from any payment to be made by Borrower or Co-Borrower hereunder is required in respect of any Taxes pursuant to any applicable law, rule or regulation, then Borrower and Co-Borrower will: (i) pay directly to the relevant authority the full amount required to be so withheld or deducted; (ii) promptly forward to Lender an official receipt or other documentation satisfactory to Lender evidencing such payment to such authority; and (iii) pay to Lender such additional amount or amounts as is necessary to ensure that the net amount actually received by Lender will equal the full amount Lender would have received had no such withholding or deduction been required. If any Taxes are directly asserted against Lender with respect to any payment received by Lender hereunder, Lender may pay such Taxes and Borrower and Co-Borrower will promptly pay such additional amounts (including any penalty, interest or expense) as is necessary in order that the net amount received by such Person after the payment of such Taxes (including any Taxes on such additional amount) shall equal the amount such Person would have received had such Taxes not been asserted so long as such amounts have accrued on or after the day which is 180 days prior to the date on which Lender first made demand therefor; provided, that if the event giving rise to such costs or reductions has retroactive effect, such 180 day period shall be extended to include the period of retroactive effect.

(b) If Borrower or Co-Borrower fail to pay any Taxes when due to the appropriate taxing authority or fails to remit to Lender the required receipts or other required documentary evidence, Borrower and Co-Borrower shall indemnify Lender for any incremental Taxes, interest or penalties that may become payable by Lender as a result of any such failure.

(c) Each Assignee that (i) is organized under the laws of a jurisdiction other than the United States of America and (ii) becomes an assignee of an interest under this Agreement under Section 9.8.1 after the Closing Date (unless such Person was already a Lender hereunder immediately prior to such assignment) shall execute and deliver to Borrower and Lender one or more (as Borrower or Lender may reasonably request) Forms W-8ECI, W-8BEN, W-8IMY (as applicable) or other applicable form, certificate or document prescribed by the United States Internal Revenue Service certifying as to such Person’s entitlement to exemption from withholding or deduction of Taxes. Borrower shall not be required to pay additional amounts to any Person pursuant to this Section 3.1 to the extent that the obligation to pay such additional amounts would not have arisen but for the failure of such Person or Lender to comply with this paragraph.

3.2 Increased Cost.

(a) If, after the Closing Date, the adoption of, or any change in, any applicable law, rule or regulation, or any change in the interpretation or administration of any applicable law, rule or regulation by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by Lender with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency shall impose on Lender any other condition affecting its LIBOR Loans, its Note or its obligation to make LIBOR Loans; and the result of anything described above is to increase the cost to (or to impose a cost on) Lender of making or maintaining any LIBOR Loan, or to reduce the amount of any sum received or receivable by Lender under this Agreement or under its Note with respect thereto, then upon demand by Lender (which demand shall be accompanied by a statement setting forth the basis for such demand and a calculation of the amount thereof in reasonable detail), Borrower and Co-Borrower shall pay directly to Lender such additional amount as will compensate Lender for such increased cost or such reduction, so long as such amounts have accrued on or after the day which is 180 days prior to the date on which Lender first made demand therefor; provided, that if the event giving rise to such costs or reductions has retroactive effect, such 180 day period shall be extended to include the period of retroactive effect.

(b) If Lender shall reasonably determine that any change in, or the adoption or phase-in of, any applicable law, rule or regulation regarding capital adequacy, or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or the compliance by Lender or any Person controlling Lender with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on Lender’s or such controlling Person’s capital as a consequence of Lender’s obligations hereunder to a level below that which Lender or such controlling Person could have achieved but for such change, adoption, phase-in or compliance (taking into consideration Lender’s or such controlling Person’s policies with respect to capital adequacy) by an amount deemed by Lender or such controlling Person to be material, then from time to time, upon demand by Lender (which demand shall be accompanied by a statement setting forth the basis for such demand and a calculation of the amount thereof in reasonable detail), Borrower shall pay to Lender such

additional amount as will compensate Lender or such controlling Person for such reduction, so long as such amounts have accrued on or after the day which is 180 days prior to the date on which Lender first made demand therefor; provided, that if the event giving rise to such costs or reductions has retroactive effect, such 180 day period shall be extended to include the period of retroactive effect.

3.3 Inadequate or Unfair Basis.

If Lender reasonably determines (which determination shall be binding and conclusive on Borrower and Co-Borrower) that, by reason of circumstances affecting the interbank Eurodollar market, adequate and reasonable means do not exist for ascertaining the applicable LIBOR Rate, then Lender shall promptly notify Borrower thereof and, so long as such circumstances shall continue, (a) Lender shall be under no obligation to make or convert any Base Rate Loans into LIBOR Loans and (b) on the last day of the current Interest Period for each LIBOR Loan, such Loan shall, unless then repaid in full, automatically convert to a Base Rate Loan.

3.4 Change in Law.

If any change in, or the adoption of any new, law or regulation, or any change in the interpretation of any applicable law or regulation by any governmental or other regulatory body charged with the administration thereof, would make it (or in the good faith judgment of Lender cause a substantial question as to whether it is) unlawful for Lender to make, maintain or fund LIBOR Loans, then Lender shall promptly notify each of the other parties hereto and, so long as such circumstances shall continue, (a) Lender shall have no obligation to make or convert any Base Rate Loan into a LIBOR Loan (but shall make Base Rate Loans in each case in an amount equal to the amount of LIBOR Loans which would be made or converted into by Lender at such time in the absence of such circumstances) and (b) on the last day of the current Interest Period for each LIBOR Loan of Lender (or, in any event, on such earlier date as may be required by the relevant law, regulation or interpretation), such LIBOR Loan shall, unless then repaid in full, automatically convert to a Base Rate Loan. Each Base Rate Loan made by Lender which, but for the circumstances described in the foregoing sentence, would be a LIBOR Loan shall remain outstanding for the period corresponding to the Interest Period originally applicable to such LIBOR Loan absent such circumstances.

3.5 Funding Losses.

Borrower and Co-Borrower hereby agree that upon demand by Lender (which demand shall be accompanied by a statement setting forth the basis for the amount being claimed), Borrower and Co-Borrower will indemnify Lender against any net loss or expense which Lender may sustain or incur (including any net loss or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by Lender to fund or maintain any LIBOR Loan), as reasonably determined by Lender, as a result of (a) any payment,

prepayment or conversion of any LIBOR Loan of Lender on a date other than the last day of an Interest Period for such Loan (including any conversion pursuant to Section 3.3 or 3.4) or (b) any failure of Borrower to borrow, convert or continue any Loan on a date specified therefor in a notice of borrowing, conversion or continuation pursuant to this Agreement. For the purposes of this Section 3.5, all determinations shall be made as if Lender had actually funded and maintained each LIBOR Loan during each Interest Period for such Loan through the purchase of deposits having a maturity corresponding to such Interest Period and bearing an interest rate equal to the LIBOR Rate for such Interest Period.

3.6 Conclusiveness of Statements; Survival.

Determinations and statements of Lender pursuant to this Section 3 shall be conclusive absent demonstrable error. Lender may use reasonable averaging and attribution methods in determining compensation under this Section 3 and the provisions of such Sections shall survive repayment of the Loans, cancellation of the Notes and termination of this Agreement.

Section 4. Conditions Precedent.

The obligation of Lender to make the Loans and to cause the issuance of Letters of Credit is subject to the following conditions precedent:

4.1 Initial Credit Extension.

The obligation of Lender to make the initial Loans hereunder on or after the Closing Date is, in addition to the conditions precedent specified in Section 4.2, subject to the following conditions precedent, each of which shall be satisfactory in all respects to Lender:

4.1.1 EBITDA.

EBITDA, as adjusted by adjustments satisfactory to Lender, for the 12 month period ending on the last day of the calendar month immediately preceding the Closing Date shall not be less than $25,000,000.

4.1.2 Initial Loans; Availability.

Not more than $7,690,000 in Revolving Loans shall be advanced or issued (as applicable) on the Closing Date.

4.1.3 Debt to be Repaid.

The Debt to be Repaid has been (or concurrently with the initial borrowing will be) Paid in Full.

4.1.4 Fees.

Borrower and Co-Borrower shall have paid all fees, costs and expenses due and payable under this Agreement and the other Loan Documents on the Closing Date.

4.1.5 Delivery of Loan Documents.

Borrower and Co-Borrower shall have delivered the following documents in form and substance satisfactory to Lender, each, as applicable, duly executed by each Loan Party a party thereto and dated the Closing Date or an earlier date satisfactory to Lender:

(a) Agreement. This Agreement.

(b) Notes. The Notes.

(c) Collateral Documents. The Guarantee and Collateral Agreement, all other Collateral Documents, and all instruments, documents, certificates and agreements executed or delivered pursuant thereto (including intellectual property assignments and pledged Collateral, with undated irrevocable transfer powers executed in blank).

(d) Financing Statements. Properly completed Uniform Commercial Code financing statements and other filings and documents required by law or the Loan Documents to provide Lender perfected Liens (subject only to Liens permitted pursuant to Section 7.2) in the Collateral.

(e) Lien Searches. Copies of Uniform Commercial Code search reports listing all effective financing statements filed against any Loan Party, with copies of such financing statements, which reports shall not evidence any filings with respect to Liens that are not permitted by Section 7.2.

(f) Payoff; Release. Payoff letters and other documents reasonably satisfactory to Lender evidencing repayment in full of all Debt to be Repaid, termination of all agreements relating thereto and the release of all Liens granted in connection therewith.

(g) Letter of Direction. A letter of direction containing funds flow information, with respect to the proceeds of the Loans on the Closing Date.

(h) Authorization Documents. For each Loan Party, such Person’s (i) charter (or similar formation document), certified by the appropriate Governmental Authority, (ii) good standing certificates in its state of organization (or formation) and in each other state requested by Lender, (iii) bylaws (or similar governing document), (iv) resolutions of its board of directors (or similar governing body) approving and authorizing such Person’s execution, delivery and performance of the Loan Documents to which it is party and the transactions contemplated thereby, and (v) signature and incumbency certificates of its officers executing any of the Loan Documents, all certified by its secretary or an assistant secretary (or similar officer) as being in full force and effect without modification.

(i) Insurance. Certificates or other evidence of insurance in effect as required by Section 6.3(b), with endorsements naming Lender as loss payee and/or additional insured, as applicable, unless prohibited by law or the relevant insurance policy.

(j) Financials. The financial statements, projections and pro forma balance sheet described in Section 5.4.

(k) Consents. Evidence that all necessary consents, permits and approvals (governmental or otherwise) required for the execution, delivery and performance by each Loan Party of the Loan Documents and the Related Transactions have been duly obtained and are in full force and effect.

(l) Other Documents. Such other certificates, documents and agreements as Lender may reasonably request.

4.2 All Credit Extensions.

The obligation of Lender to make each Loan is subject to the additional conditions precedent that (unless such conditions are waived by Lender), both before and after giving effect to any borrowing, (a) the representations and warranties of Borrower and each other Loan Party set forth in this Agreement and the other Loan Documents shall be true and correct in all material respects with the same effect as if then made (except to the extent stated to relate to a specific earlier date, in which case such representations and warranties shall be true and correct as of such earlier date) and (b) no Event of Default or Default shall have then occurred and be continuing. Each request by Borrower for the making of a Loan shall be deemed to constitute a representation and warranty by Borrower that the conditions precedent set forth in Section 4.2 will be satisfied at the time of the making of such Loan.

Section 5. Representations and Warranties.

To induce Lender to enter into this Agreement and to induce Lender to make Loans hereunder, Borrower and Co-Borrower each represents and warrants to Lender that, both before and after giving effect to the Related Transactions:

5.1 Organization.

Borrower is a corporation validly existing and in good standing under the laws of the State of California; Co-Borrower is a corporation validly existing and in good standing under the laws of the State of Delaware; each Subsidiary is validly existing and in good standing under the laws of the jurisdiction of its organization; and Borrower, Co-Borrower and each Subsidiary is duly qualified to do business in each jurisdiction where, because of the nature of its activities or properties, such qualification is required, except for such jurisdictions where the failure to so qualify could not reasonably be expected to have a Material Adverse Effect.

5.2 Authorization; No Conflict.

Borrower, Co-Borrower and each Subsidiary is duly authorized to execute and deliver each Loan Document and each agreement memorializing the Related Transactions to which it is a party; Borrower and Co-Borrower are duly authorized to borrow monies hereunder; and Borrower, Co-Borrower and each Subsidiary is duly authorized to perform its Obligations under each Loan Document to which it is a party. The execution, delivery and performance by Borrower and Co-Borrower of this Agreement and by Borrower, Co-Borrower and each Subsidiary of each Loan Document to which it is a party, and the borrowings by Borrower and Co-Borrower hereunder, do not and will not (a) require any consent or approval of any Governmental Authority (other than any consent or approval which has been obtained and is in full force and effect), (b) conflict with (i) any provision of applicable law, (ii) the charter, bylaws certificate of formation, articles of organization, limited liability company agreement or other organizational documents of any Loan Party or (iii) any agreement, indenture, instrument or other document, or any judgment, order or decree, which is binding upon any Loan Party or any of their respective properties, or (c) require, or result in, the creation or imposition of any Lien on any asset of any Loan Party (other than Liens in favor of Lender created pursuant to the Collateral Documents).

5.3 Validity; Binding Nature.

Each of this Agreement and each other Loan Document which Borrower, Co-Borrower or any Subsidiary is a party is the legal, valid and binding obligation of such Person, enforceable against such Person in accordance with its terms, subject to bankruptcy, insolvency and similar laws affecting the enforceability of creditors’ rights generally and to general principles of equity.

5.4 Financial Condition.

(a) The audited consolidated financial statements of the Loan Parties, excluding Parent, as of the Fiscal Year of Borrower ending December 31, 2015 (the “Balance Sheet Date”), and the unaudited consolidated financial statements of the Loan Parties, excluding Parent, as of June 30, 2016, copies of each of which have been delivered pursuant hereto, were prepared in accordance with GAAP (subject, in the case of such unaudited statements, to the absence of footnotes and to normal year-end adjustments) and present fairly the consolidated financial condition of such Persons as at such dates and the results of their operations for the periods then ended.

(b) The consolidated financial projections (including an operating budget and a cash flow budget) of the Loan Parties for the five (5) year period commencing January 1, 2017 delivered to Lender on or prior to the Closing Date (i) were prepared by Borrower in good faith and (ii) were prepared in accordance with assumptions for which Borrower has a reasonable basis, and the accompanying consolidated pro forma balance sheet of the Loan Parties as at the Closing Date, adjusted to give effect to the consummation of the Related Transactions and the financings contemplated hereby as if such transactions had occurred on such date, is consistent in all material respects with such projections.

5.5 No Material Adverse Change.

Since the Balance Sheet Date, no event has occurred that could reasonably be expected to result in a Material Adverse Effect.

5.6 Litigation.

No litigation (including derivative actions), arbitration proceeding or governmental investigation or proceeding is pending or, to Borrower’s or Co-Borrower’s knowledge, threatened against any Loan Party, that, if adversely determined, could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. As of the Closing Date, other than any liability incident to such litigation or proceedings, none of Borrower, Co-Borrower or any Subsidiary has any material Contingent Obligations not listed on Schedule 7.1.

5.7 Ownership of Properties; Liens.

Borrower, Co-Borrower and each Subsidiary owns good and, in the case of real property, marketable title to all of its properties and assets, real and personal, tangible and intangible, of any nature whatsoever (including patents, trademarks, trade names, service marks and copyrights), free and clear of all Liens, charges and claims (including infringement claims with respect to patents, trademarks, service marks, copyrights and the like), except as permitted by Section 7.2.

5.8 Capitalization.

All issued and outstanding equity securities of each Loan Party are duly authorized and validly issued, fully paid, non-assessable, and free and clear of all Liens other than those in favor of Lender, and such securities were issued in compliance with all applicable state and federal laws concerning the issuance of securities. Schedule 5.8 sets forth the authorized equity securities of each Loan Party as of the Closing Date. As of the Closing Date, all of the issued and outstanding equity of Borrower is owned by Parent, except as set forth on Schedule 5.8, all of the issued and outstanding equity of each Subsidiary is, directly or indirectly, owned by Borrower. As of the Closing Date, except as set forth on Schedule 5.8, there are no pre-emptive or other outstanding rights, options, warrants, conversion rights or other similar agreements or understandings for the purchase or acquisition of any equity interests of Borrower or any Subsidiary. As of the Closing Date, Parent has no directly owned Subsidiaries other than Borrower and Borrower has no directly or indirectly owned Subsidiaries except as set forth on Schedule 5.8, each of which Subsidiaries is Wholly-Owned directly or indirectly by Borrower.

5.9 Pension Plans.

During the twenty-four consecutive month period prior to the Closing Date or the making of any Loan, (i) no steps have been taken to terminate any Pension Plan and (ii) no contribution failure has occurred with respect to any Pension Plan sufficient to give rise to a Lien under Section 302(f) of ERISA. No condition exists or event or transaction has occurred with respect to any Pension Plan which could result in the incurrence by Borrower, Co-Borrower or any Subsidiary of any material liability, fine or penalty. All contributions (if any) have been made to any Multiemployer Pension Plan that are required to be made by Borrower, Co-Borrower or any Subsidiary or any other member of the Controlled Group under the terms of the plan or of any collective bargaining agreement or by applicable law; neither Borrower, Co-Borrower nor any Subsidiary nor any member of the Controlled Group has withdrawn or partially withdrawn from any Multiemployer Pension Plan, incurred any withdrawal liability with respect to any such plan or received notice of any claim or demand for withdrawal liability or partial withdrawal liability from any such plan, and no condition has occurred which, if continued, could result in a withdrawal or partial withdrawal from any such plan, and neither Borrower, Co-Borrower nor any Subsidiary nor any member of the Controlled Group has received any notice that any Multiemployer Pension Plan is in reorganization, that increased contributions may be required to avoid a reduction in plan benefits or the imposition of any excise tax, that any such plan is or has been funded at a rate less than that required under Section 412 of the IRC, that any such plan is or may be terminated, or that any such plan is or may become insolvent.

5.10 Investment Company Act.

None of Borrower, Co-Borrower or any Subsidiary is an “investment company” within the meaning of the Investment Company Act of 1940.

5.11 Public Utility Holding Company Act.

None of Borrower, Co-Borrower or any Subsidiary is a “holding company”, or a “subsidiary company” of a “holding company”, or an “affiliate” of a “holding company” or of a “subsidiary company” of a “holding company”, within the meaning of the Public Utility Holding Company Act of 1935.

5.12 Margin Stock.

None of Borrower, Co-Borrower or any Subsidiary is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying Margin Stock. No portion of the Obligations is secured directly or indirectly by Margin Stock.

5.13 Taxes.

Borrower, Co-Borrower and each Subsidiary has filed all tax returns and reports required by law to have been filed by it and has paid all taxes and governmental charges thereby shown to be owing, except any such taxes or charges which are being diligently contested in good faith by appropriate proceedings which stay the imposition of any penalty, fine or Lien resulting from the non-payment thereof and for which adequate reserves in accordance with GAAP shall have been set aside on its books.

5.14 Solvency.

On the Closing Date, and immediately prior to and after giving effect to each borrowing hereunder and the use of the proceeds thereof, with respect to Borrower, Co-Borrower and each Subsidiary, individually, (a) the fair value of its assets is greater than the amount of its liabilities (including disputed, contingent and unliquidated liabilities) as such value is established and liabilities evaluated, (b) the present fair saleable value of its assets is not less than the amount that will be required to pay the probable liability on its debts as they become absolute and matured, (c) it is able to realize upon its assets and pay its debts and other liabilities (including disputed, contingent and unliquidated liabilities) as they mature in the normal course of business, (d) it does not intend to, and does not believe that it will, incur debts or liabilities beyond its ability to pay as such debts and liabilities mature and (e) it is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which its property would constitute unreasonably small capital.

5.15 Environmental Matters.

Except as set forth in Schedule 5.15:

(a) The on-going operations of Borrower, Co-Borrower and each Subsidiary comply in all respects with all Environmental Laws, except such non-compliance which could not (if enforced in accordance therewith) reasonably be expected to result in a Material Adverse Effect.

(b) Borrower, Co-Borrower and each of the Subsidiaries have obtained, and maintained in good standing, all licenses, permits, authorizations and registrations required under any Environmental Law and necessary for their respective ordinary course operations, and Borrower, Co-Borrower and each of the Subsidiaries are in compliance with all material terms and conditions thereof, except where the failure to do so could not reasonably be expected to result in material liability to Borrower, Co-Borrower and each of the Subsidiaries and could not reasonably be expected to result in a Material Adverse Effect.

(c) None of Borrower, Co-Borrower or any Subsidiary, or any of their respective properties or operations, is subject to any outstanding written order from or agreement with any Federal, state or local Governmental Authority, nor subject to any judicial or docketed administrative proceeding, respecting any Environmental Law, Environmental Claim or Hazardous Material.

(d) There are no Hazardous Materials or other conditions or circumstances existing with respect to any property, or arising from operations prior to the Closing Date, of Borrower, Co-Borrower or any Subsidiary that could reasonably be expected to result in a Material Adverse Effect. None of Borrower, Co-Borrower or any Subsidiary has any underground storage tanks that are not properly registered or permitted under applicable Environmental Laws or that are leaking or disposing of Hazardous Materials.

5.16 Insurance.

Borrower, Co-Borrower and each Subsidiary and their respective properties are insured with financially sound and reputable insurance companies which are not Affiliates of Borrower, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where any of them operates. A true and complete listing of such insurance as of the Closing Date, including issuers, coverages and deductibles, is set forth on Schedule 5.16.

5.17 Information.

Borrower and Co-Borrower have disclosed to Lender all agreements, instruments and corporate or other restrictions to which Borrower, Co-Borrower or any Subsidiary is subject, and all other matters known to Borrower or Co-Borrower, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. All information heretofore or contemporaneously herewith furnished in writing by Borrower, Co-Borrower or any Subsidiary to Lender for purposes of or in connection with this Agreement and the transactions contemplated hereby is, and all written information hereafter furnished by or on behalf of Borrower, Co-Borrower or any Subsidiary to Lender pursuant hereto or in connection herewith will be, true and accurate in every material respect on the date as of which such information is dated or certified, and none of such information is or will be incomplete by omitting to state any material fact necessary to make such information not misleading in light of the circumstances under which made (it being recognized by Lender that any projections and forecasts provided by Borrower are based on good faith estimates and assumptions believed by Borrower to be reasonable as of the date of the applicable projections or assumptions and that actual results during the period or periods covered by any such projections and forecasts may differ from projected or forecasted results).

5.18 Intellectual Property.

Borrower, Co-Borrower and each Subsidiary owns and possesses or has a license or other right to use all patents, patent rights, trademarks, trademark rights, trade names, trade name rights, service marks, service xxxx rights and copyrights as are necessary for the conduct of business, without any infringement upon rights of others which could reasonably be expected to have a Material Adverse Effect. Set forth on Schedule 5.18 is a complete and accurate list as of the Closing Date of all such material licenses, permits, patents, patent applications, trademarks, trademark applications, service marks, trade names, copyrights, copyright applications, franchises, authorizations, non-governmental licenses and permits and other intellectual property rights of Borrower, Co-Borrower and each Subsidiary. No slogan or other advertising device, product, process, method, substance, part or other material now employed, or now contemplated to be employed, by Borrower, Co-Borrower or any Subsidiary infringes upon or conflicts with any rights owned by any other Person, and no claim or litigation regarding any of the foregoing is pending or threatened, except for such infringements and conflicts which could not reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect. To the knowledge of Borrower, no patent, invention, device, application, principle or any statute, law, rule, regulation, standard or code is pending or proposed, which, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.

5.19 Restrictive Provisions.

None of Borrower, Co-Borrower or any Subsidiary is a party to any agreement or contract or subject to any restriction contained in its operative documents which could reasonably be expected to have a Material Adverse Effect.

5.20 Labor Matters.

Except as set forth on Schedule 5.20, none of Borrower, Co-Borrower or any Subsidiary is subject to any labor or collective bargaining agreement. There are no existing or threatened strikes, lockouts or other labor disputes involving Borrower or any Subsidiary that singly or in the aggregate could reasonably be expected to have a Material Adverse Effect. Hours worked by and payment made to employees of Borrower, Co-Borrower or any Subsidiary are not in any material respect in violation of the Fair Labor Standards Act or any other applicable law, rule or regulation dealing with such matters.

5.21 No Default.

No Event of Default or Default exists or would result from the incurrence by Borrower, Co-Borrower or any Subsidiary of any Debt hereunder or under any other Loan Document.

5.22 Compliance with Law.

None of Borrower, Co-Borrower or any Subsidiary is in violation of its organizational documents, any law, rule, regulation, judgment or order of any Governmental Authority applicable to it or any of its property or assets, or any term of any material agreement or instrument binding on or otherwise affecting it or any of its properties, which violation could reasonably be expected to have a Material Adverse Effect.

5.23 Permits, etc.

Borrower, Co-Borrower and each Subsidiary has, and is in compliance with, all material permits, licenses, authorizations, approvals, entitlements and accreditations required for such Person lawfully to own, lease, manage or operate, or to acquire, each business currently owned, leased, managed or operated, or to be acquired, by such Person. No condition exists or event has occurred which, in itself or with the giving of notice or lapse of time or both, would result in the suspension, revocation, impairment, forfeiture or non-renewal of any such material permit, license, authorization, approval, entitlement or accreditation, and there is no claim that any thereof is not in full force and effect.

5.24 Customers and Suppliers.

There exists no actual or, to Borrower’s or Co-Borrower’s knowledge, threatened termination, cancellation or limitation of, or modification to or change in, the business relationship between (i) Borrower, Co-Borrower or any Subsidiary, on the one hand, and any customer or any group thereof, on the other hand, whose agreements with Borrower, Co-Borrower or any Subsidiary are individually or in the aggregate material to the business or operations of such Borrower, Co-Borrower and Subsidiaries, or (ii) Borrower, Co-Borrower or any Subsidiary, on the one hand, and any material supplier thereof, on the other hand.

Section 6. Affirmative Covenants.

Until the expiration or termination of the Commitments and thereafter until all Obligations (other than contingent indemnification obligations to the extent no claim giving rise thereto has been asserted) are Paid in Full, Borrower and Co-Borrower agree that, unless at any time Lender shall otherwise expressly consent in writing, it will:

6.1 Information.

Furnish to Lender:

6.1.1 Annual Report.

As soon as available and in any event within ninety (90) days after the end of each Fiscal Year of Borrower beginning with the first full fiscal year after the Closing Date, consolidated balance sheets of the Loan Parties as of the end of such Fiscal Year and the related consolidated statements of income, retained earnings and cash flows for such Fiscal Year, setting

forth in each case, in comparative form, the figures for the previous Fiscal Year, all such financial statements to be prepared in accordance with GAAP consistently applied and audited by and accompanied by the unqualified opinion of an independent certified public accountants selected by Borrower and reasonably acceptable to Lender (which opinion shall be without (a) a “going concern” or like qualification or exception, (b) any qualification or exception as to the scope of such audit, or (c) any qualification which relates to the treatment or classification of any item and which, as a condition to the removal of such qualification, would require an adjustment to such item, the effect of which would be to cause any noncompliance with the provisions of Section 7.14) together with (A) a certificate from such accountants to the effect that, in making the examination necessary for the signing of such annual audit report, such accountants have not become aware of any Default or Event of Default that has occurred and is continuing, or, if such accountants have become aware of any such event, describing it and the steps, if any, being taken to cure it and (B) the computations of such accountants evidencing Borrower’s compliance with the financial covenants contained in Section 7.14 of this Agreement.

6.1.2 Interim Reports.

As soon as available and in any event within twenty (20) days after the end of each month of each Fiscal Year of Borrower, the consolidated balance sheet of the Loan Parties as of the end of such fiscal month and the related consolidated statements of income, retained earnings and cash flows for the portion of Borrower’s Fiscal Year ended at the end of such fiscal month (and the consolidating statements of income, retained earnings and cash flows of the Loan Parties for such fiscal month and for the portion of Borrower’s Fiscal Year ended at the end of such fiscal month), setting forth in each case in comparative form, (A) the figures for the corresponding fiscal month and the corresponding portion of Borrower’s previous Fiscal Year and (b) Borrower’s budgeted projections for such fiscal month and for the portion of Borrower’s Fiscal Year ended at the end of such fiscal month, all in reasonable detail and satisfactory in form to Lender and certified, except as to projections (subject to normal year-end adjustments and footnote disclosures) as to fairness of presentation, GAAP and consistency by the President or the chief financial officer or controller of Borrower.

6.1.3 Compliance Certificate.

Simultaneously with the delivery of each set of financial statements referred to in Section 6.1.1 above and simultaneously with the delivery of each set of financial statements referred to in Section 6.1.2 above with respect to the last fiscal month of a Fiscal Quarter of Borrower, a certificate of the President or the chief financial officer or controller of Borrower in the form attached hereto as Exhibit B and incorporated herein by reference, accompanied by supporting financial work sheets where appropriate, (A) evidencing compliance with the financial covenants contained in Section 7.14 of this Agreement, (B) stating whether there exists on the date of such certificate any Default or Event of Default and, if any Default or Event of Default then exists, setting forth the details thereof and the action which Borrower is taking or proposes to take with respect thereto and (C) certifying that all of the representations and warranties of each Loan Party contained in this Agreement and/or in any of the other Loan Documents are true and correct in all material respects on and as of the date of such certificate as if made on and as of the date of such certificate.

6.1.4 Notice of Default; Litigation; ERISA Matters.

Promptly upon becoming aware of any of the following, written notice describing the same and the steps being taken by Borrower or the applicable Loan Party affected thereby with respect thereto:

(a) the occurrence of an Event of Default or a Default;

(b) any litigation, arbitration or governmental investigation or proceeding not previously disclosed by Borrower to Lender which has been instituted or, to the knowledge of Borrower, is threatened against Borrower or any other Loan Party or to which any of the properties of any thereof is subject which could reasonably be expected to have a Material Adverse Effect;

(c) the institution of any steps by any member of the Controlled Group or any other Person to terminate any Pension Plan, or the failure of any member of the Controlled Group to make a required contribution to any Pension Plan (if such failure is sufficient to give rise to a Lien under Section 302(f) of ERISA) or to any Multiemployer Pension Plan, or the taking of any action with respect to a Pension Plan which could result in the requirement that Borrower, Co-Borrower or any Subsidiary furnish a bond or other security to the PBGC or such Pension Plan, or the occurrence of any event with respect to any Pension Plan or Multiemployer Pension Plan which could result in the incurrence by any member of the Controlled Group of any material liability, fine or penalty (including any claim or demand for withdrawal liability or partial withdrawal from any Multiemployer Pension Plan), or any material increase in the contingent liability of Borrower, Co-Borrower or any Subsidiary with respect to any post-retirement welfare plan benefit, or any notice that any Multiemployer Pension Plan is in reorganization, that increased contributions may be required to avoid a reduction in plan benefits or the imposition of an excise tax, that any such plan is or has been funded at a rate less than that required under Section 412 of the IRC, that any such plan is or may be terminated, or that any such plan is or may become insolvent;

(d) any cancellation or material change in any insurance maintained by Borrower, Co-Borrower or any Subsidiary; or

(e) any other event (including (i) any violation of any Environmental Law or the assertion of any Environmental Claim or (ii) the enactment or effectiveness of any law, rule or regulation) which could reasonably be expected to have a Material Adverse Effect.

6.1.5 Management Report.

Promptly upon receipt thereof, any reports (including, without limitation, any management letters) submitted by Borrower, Co-Borrower or any Subsidiary (other than reports previously delivered pursuant to Sections 6.1.1 and 6.1.2 above) by independent accountants in connection with any annual, interim or special audit made by them of the books of Borrower, Co-Borrower or any Subsidiary.

6.1.6 Budgets.

As soon as available and in any event within thirty (30) days after to the beginning of each Fiscal Year of Borrower, consolidated balance sheet, budgeted income statement and cash flow projections for Borrower, Co-Borrower and each Subsidiary for such Fiscal Year on a month-by-month basis, all in form and detail reasonably acceptable to Lender.

6.1.7 Non-Senior Debt Notices.

Promptly following receipt, copies of any notices (including notices of default or acceleration) received from any holder or trustee of, under or with respect to any Non-Senior Debt.

6.1.8 Other Information.

Promptly from time to time, such other information concerning Borrower, Co-Borrower or any Subsidiary as Lender may reasonably request.

6.2 Books; Records; Inspections.

Keep, and cause each other Loan Party to keep, its books and records in accordance with sound business practices sufficient to allow the preparation of financial statements in accordance with GAAP; permit, and cause each other Loan Party to permit, Lender or any representative thereof to inspect the properties and operations of Borrower or such other Loan Party; and permit, and cause each other Loan Party to permit, at any reasonable time and with reasonable notice (or at any time without notice if an Event of Default exists), Lender or any representative thereof to visit any or all of its offices, to discuss its financial matters with its officers and its independent auditors (and Borrower hereby authorizes such independent auditors to discuss such financial matters with Lender or any representative thereof), and to examine (and, at the expense of Borrower or the applicable Loan Party, photocopy extracts from) any of its books or other records; and permit, and cause each other Loan Party to permit, Lender and its representatives to inspect the Collateral and other tangible assets of Borrower or such Loan Party, to perform appraisals of the assets of Borrower or such Loan Party, Phase I Environmental Site Assessments (and if requested by Lender, Phase II Environmental Site Assessments) and to inspect, audit, check and make copies of and extracts from the books, records, computer data, computer programs, journals, orders, receipts, correspondence and other data relating to any Collateral. All such inspections or audits by Lender shall be at Borrower’s expense; provided, however, that if an Event of Default or Default has not occurred and is not then continuing, Borrower shall not be required to reimburse Lender for more than one such audit(s) during any Fiscal Year.

6.3 Maintenance of Property; Insurance.

(a) Keep, and cause each Subsidiary to keep, all property useful and necessary in the business of Borrower, Co-Borrower and each Subsidiary in good working order and condition, ordinary wear and tear excepted, and comply, and cause each of the Subsidiaries to comply, at all times with the material provisions of all leases to which it is a party as lessee or under which it occupies property.

(b) Maintain, and cause each Subsidiary to maintain, with responsible insurance companies, such insurance coverage as shall be required by all laws, governmental regulations and court decrees and orders applicable to it and such other insurance, to such extent and against such hazards and liabilities, as is customarily maintained by companies similarly situated; provided that in any event, such insurance shall insure against all risks and liabilities of the type insured against as of the Closing Date and shall have insured amounts no less than, and deductibles no higher than, those amounts provided for as of the Closing Date. Upon request of Lender, Borrower shall furnish to Lender a certificate setting forth in reasonable detail the nature and extent of all insurance maintained by Borrower, Co-Borrower and each Subsidiary. Borrower and Co-Borrower shall cause each issuer of an insurance policy to provide Lender with an endorsement (i) showing Lender as a loss payee with respect to each policy of property or casualty insurance and naming Lender as an additional insured with respect to each policy of liability insurance, (ii) providing that 30 days’ notice will be given to Lender prior to any cancellation of, or reduction or change in coverage provided by or other material modification to such policy and (iii) reasonably acceptable in all other respects to Lender. Borrower shall execute and deliver to Lender a collateral assignment, in form and substance reasonably satisfactory to Lender, of each business interruption insurance policy maintained by Borrower, Co-Borrower and any Subsidiary.

(c) Unless Borrower provides Lender with evidence of the continuing insurance coverage required by this Agreement, Lender may purchase insurance at Borrower’s expense to protect Lender’s interests in the Collateral. This insurance may, but need not, protect Borrower’s, Co-Borrower’s and each Subsidiary’s interests. The coverage that Lender purchases may, but need not, pay any claim that is made against Borrower, Co-Borrower or any Subsidiary in connection with the Collateral. Borrower may later cancel any insurance purchased by Lender, but only after providing Lender with evidence that Borrower has obtained the insurance coverage required by this Agreement. If Lender purchases insurance for the Collateral, as set forth above, Borrower will be responsible for the costs of that insurance, including interest and any other charges that may be imposed with the placement of the insurance, until the effective date of the cancellation or expiration of the insurance and the costs of the insurance may be added to the principal amount of the Loans owing hereunder.

6.4 Compliance with Laws; Payment of Taxes and Liabilities.

(a) Comply, and cause each Subsidiary to comply, in all material respects with all applicable laws, rules, regulations, decrees, orders, judgments, licenses and permits, except where failure to comply could not reasonably be expected to have a Material Adverse Effect; (b) without limiting clause (a) above, ensure, and cause each Subsidiary to ensure, that no person who owns a controlling interest in or otherwise controls a Loan Party is or shall be (i) listed on the Specially Designated Nationals and Blocked Person List maintained by the Office of Foreign Assets Control (“OFAC”), Department of the Treasury, and/or any other similar lists maintained by OFAC pursuant to any authorizing statute, Executive Order or regulation or (ii) a person designated under Section 1(b), (c) or (d) or Executive Order No. 13224 (September 23, 2001), any related enabling legislation or any other similar Executive Orders; (c) without limiting clause (a) above, comply and cause each Subsidiary to comply, with all applicable Bank Secrecy Act and anti-money laundering laws and regulations and (d) pay, and cause each Subsidiary to pay, prior to delinquency, all taxes and other governmental charges against it or any of its property, as well as claims of any kind which, if unpaid, could become a Lien on any of its property; provided that the foregoing shall not require Borrower, Co-Borrower or any Subsidiary to pay any such tax or charge so long as it shall contest the validity thereof in good faith by appropriate proceedings which stay the imposition of any penalty, fine or Lien resulting from the non-payment thereof and shall set aside on its books adequate reserves with respect thereto in accordance with GAAP.

6.5 Maintenance of Existence.

Maintain and preserve, and (subject to Section 7.5) cause each Subsidiary to maintain and preserve, (a) its existence and good standing in the jurisdiction of its organization and (b) its qualification to do business and good standing in each jurisdiction where the nature of its business makes such qualification necessary, other than any such jurisdiction where the failure to be qualified or in good standing could not reasonably be expected to have a Material Adverse Effect.

6.6 Employee Benefit Plans.

Maintain, and cause each Subsidiary to maintain, each Pension Plan in substantial compliance with all applicable requirements of law and regulations.

6.7 Environmental Matters.

If any release or disposal of Hazardous Materials shall occur or shall have occurred on any real property or any other assets of Borrower, Co-Borrower or any Subsidiary, cause, or direct the applicable Subsidiary to cause, the prompt containment and removal of such Hazardous Materials and the remediation of such real property or other assets as is necessary to comply with all Environmental Laws and to preserve the value of such real property or other assets. Without limiting the generality of the foregoing, Borrower shall, and shall cause Co-Borrower and each Subsidiary to, comply with each valid Federal or state judicial or administrative order requiring the performance at any real property by Borrower, Co-Borrower or any Subsidiary of activities in response to the release or threatened release of a Hazardous Material and shall keep any property either owned or operated by it or any of the Subsidiaries free of any Liens which secure Environmental Claims.

6.8 Obtaining of Permits, Etc.

Obtain, maintain and preserve, and cause each of the Subsidiaries to obtain, maintain and preserve, and take all necessary action to timely renew, all permits, licenses, authorizations, approvals, entitlements and accreditations which are necessary in the proper conduct of its business.

6.9 Collateral Access Agreements.

Promptly notify Lender any time any Collateral with a net book value in excess of $500,000 is located and remains on any real property which is not owned or leased by Borrower, Co-Borrower or any Subsidiary for more than seven (7) consecutive days and, if requested by Lender, use commercially reasonable efforts to promptly obtain written subordinations or waivers, in form and substance reasonably satisfactory to Lender, of all present and future Liens to which the owner or lessor of such premises may be entitled to assert against the Collateral.

6.10 Blocked Accounts.

(a) From an after the date that is 30 days after the Closing Date and thereafter during the term of this Agreement, maintain blocked accounts (the “Blocked Accounts”), and cause each of the Subsidiaries to so establish and maintain, with respect to all their principal deposit or other concentration accounts (including each such account identified as a deposit or concentration account on Schedule 7.15) with the financial institutions at which those accounts are maintained (each a “Blocked Account Bank”), and enter into a control agreement relating to the Blocked Accounts with Lender and the applicable Blocked Account Bank.

(b) After the occurrence and during the continuance of an Event of Default, Lender may send a notice of assignment or notice of security interest to any and all of the Account Debtors and, thereafter, Lender shall have the sole right to collect the Accounts and Payment Intangibles (as those terms are defined in the UCC, as defined in the Guarantee and Collateral Agreement) of the applicable Loan Parties or take possession of the Collateral and the books and records relating thereto. After the occurrence and during the continuation of an Event of Default, Borrower, Co-Borrower and the Subsidiaries shall not, without prior written consent

of Lender, grant any extension of time of payment of any Account or Payment Intangible, compromise or settle any Account or Payment Intangible for less than the full amount thereof, release, in whole or in part, any Person or property liable for the payment thereof, or allow any credit or discount whatsoever thereon.

(c) Borrower and Co-Borrower hereby appoints Lender as attorney-in-fact with power exercisable during the continuance of an Event of Default to (i) endorse its name upon any notes, acceptances, checks, drafts, money orders or other evidences of payment relating to the Accounts or Payment Intangibles, (ii) sign its name on any invoice or xxxx of lading relating to any of its Accounts or Payment Intangibles, drafts against Account Debtors with respect to its Accounts or Payment Intangibles, assignments and verifications of Accounts or Payment Intangibles and notices to Account Debtors with respect to its Accounts or Payment Intangibles, (iii) send verification of its Accounts, and (iv) notify the U.S. Postal Service authorities to change the address for delivery of mail addressed to it to such address as Lender may designate and to do all other acts and things necessary to carry out this Agreement. All acts of said attorney or designee are hereby ratified and approved, and said attorney or designee shall not be liable for any acts of omission or commission (other than acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction), or for any error of judgment or mistake of fact or law; this power being coupled with an interest is irrevocable until all of the Obligations are Paid in Full and all of the Commitments are terminated.

(d) Nothing herein contained shall be construed to constitute Lender as agent of Borrower or Co-Borrower for any purpose whatsoever, and Lender shall not be responsible or liable for any shortage, discrepancy, damage, loss or destruction of any part of the Collateral wherever the same may be located and regardless of the cause thereof (other than from acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction). Lender shall not, under any circumstance or in any event whatsoever, have any liability for any error or omission or delay of any kind occurring in the settlement, collection or payment of any of the Accounts of the Loan Parties or any instrument received in payment thereof or for any damage resulting therefrom (other than as a result of acts of omission or commission by Lender constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction). Lender, by anything herein or in any assignment or otherwise, does not assume any of the obligations under any contract or agreement assigned to Lender and shall not be responsible in any way for the performance by any Loan Party of any of the terms and conditions thereof.

(e) If any Account or Payment Intangible of any Loan Party includes a charge for any tax payable to any Governmental Authority, Lender is hereby authorized (but in no event obligated) in its discretion to pay the amount thereof to the proper taxing authority for Borrower’s account and to charge Borrower therefor. Borrower shall notify Lender if any Account or Payment Intangible of any Loan Party includes any taxes due to any such Governmental Authority and, in the absence of such notice, Lender shall have the right to retain the full proceeds of such Account or Payment Intangible and shall not be liable for any taxes that may be due by reason of such Account or Payment Intangible.

6.11 Further Assurances; Post-Closing Items.

(a) Take, and cause each other Loan Party to take, such actions as are necessary or as Lender may reasonably request from time to time to ensure that the Obligations of Borrower and each other Loan Party under the Loan Documents are secured by substantially all of the assets of Borrower and each Loan Party (as well as all equity interests of each Loan Party) and guaranteed by each Loan Party (including, promptly upon the acquisition or creation thereof, any Subsidiary acquired or created after the Closing Date), in each case including (i) the execution and delivery of guaranties, security agreements, pledge agreements, mortgages, deeds of trust, collateral access agreements, deposit account control agreements, landlord lease waivers, financing statements and other documents, and the filing or recording of any of the foregoing, and (ii) the delivery of certificated securities and other Collateral with respect to which perfection is obtained by possession.

(b) Execute and/or deliver, and/or cause to be executed and/or delivered, as applicable, to the Lender each of the items, if any, listed on Schedule 6.11(b) attached hereto (collectively, the “Post-Closing Items”) on or before the applicable due date listed after each such Post-Closing Item, each of which Post-Closing Items must be in form, substance and content reasonably satisfactory to the Lender.

Section 7. Negative Covenants.

Until the expiration or termination of the Commitments and thereafter until all Obligations (other than contingent indemnification obligations to the extent no claim giving rise thereto has been asserted) are Paid in Full, Borrower and Co-Borrower agrees that, unless at any time Lender shall otherwise expressly consent in writing, it will:

7.1 Debt.

Not, and not permit any Subsidiary to, create, incur, assume or suffer to exist any Debt, except:

(a) the Obligations;

(b) Debt the aggregate outstanding amount of which on any Business Day, when aggregated with all Debt of the Loan Parties (other than the Obligations) outstanding on such Business Day, shall not exceed the lesser of (i) $3,000,000 or (ii) 25% of EBITDA for the twelve month period ending on the last day of the immediately preceding month period;

(c) Hedging Obligations, provided that (i) such obligations are (or were) entered into by such Person in the ordinary course of business for the purpose of directly mitigating risks associated with liabilities, commitments, investments, assets, or property held or reasonably anticipated by such Person, or changes in the value of securities issued by such Person, and not for purposes of speculation or taking a “market view;” and (ii) such Hedging Obligation does not contain any provision exonerating the non defaulting party from its obligation to make payments on outstanding transactions to the defaulting party.

7.2 Liens.

Not, and not permit any other Loan Party to, create or permit to exist any Lien on any of its real or personal properties, assets or rights of whatsoever nature (whether now owned or hereafter acquired), except:

(a) Liens for taxes or other governmental charges not at the time delinquent or thereafter payable without penalty or being diligently contested in good faith by appropriate proceedings and, in each case, for which it maintains adequate reserves in accordance with GAAP and the execution or other enforcement of which is effectively stayed;

(b) Liens arising in the ordinary course of business (such as (i) Liens of carriers, warehousemen, mechanics, landlords and materialmen and other similar Liens imposed by law and (ii) Liens incurred in connection with worker’s compensation, unemployment compensation and other types of social security (excluding Liens arising under ERISA) or in connection with surety bonds, bids, performance bonds and similar obligations) for sums not overdue or being diligently contested in good faith by appropriate proceedings and not involving any deposits or advances or borrowed money or the deferred purchase price of property or services and, in each case, for which it maintains adequate reserves in accordance with GAAP and the execution or other enforcement of which is effectively stayed;

(d) subject to the limitation set forth in Section 7.1(b), (i) Liens arising in connection with Capital Leases (and attaching only to the property being leased), (ii) Liens existing on property at the time of the acquisition thereof by Borrower, Co-Borrower or any Subsidiary (and not created in contemplation of such acquisition) and (iii) Liens that constitute purchase money security interests on any property securing debt incurred for the purpose of financing all or any part of the cost of acquiring such property, provided that any such Lien attaches to such property within 60 days of the acquisition thereof and attaches solely to the property so acquired;

(e) attachments, appeal bonds, judgments and other similar Liens, for sums not exceeding $100,000 arising in connection with court proceedings; provided that the execution or other enforcement of such Liens is effectively stayed and the claims secured thereby are being actively contested in good faith and by appropriate proceedings;

(f) easements, rights of way, restrictions, minor defects or irregularities in title and other similar Liens that do not (i) secure obligations for the payment of money or (ii) interfere in any material respect with the ordinary conduct of the business of Borrower, Co-Borrower or any Subsidiary;

(g) Liens arising under the Loan Documents; and

(h) the replacement, extension or renewal of any Lien permitted by clause (c) above upon or in the same property subject thereto arising out of the extension, renewal or replacement of the Debt secured thereby (without increase in the amount thereof).

7.3 Operating Leases.

Not permit the aggregate amount of all rental payments under Operating Leases made (or scheduled to be made) by the Loan Parties (on a consolidated basis) to exceed $10,000,000 in any Fiscal Year.

7.4 Restricted Payments.

Not, and not permit any other Loan Party to, (a) make any dividend or other distribution to any of its equity holders, (b) purchase or redeem any of its equity interests or any warrants, options or other rights in respect thereof, (c) except for Permitted Management Fees and Permitted Integration Services Fees, pay any management fees or similar fees to any of its equity holders or any Affiliate thereof, (d) make any redemption, prepayment (whether mandatory or optional), defeasance, repurchase or any other payment in respect of any Non-Senior Debt or (e) set aside funds for any of the foregoing. Notwithstanding the foregoing, (i) any Subsidiary may pay dividends or make other distributions to Borrower, Co-Borrower or to a domestic Wholly-Owned Subsidiary; (ii) in each case to the extent due and payable on a non-accelerated basis and permitted under any applicable subordination provisions thereof, Borrower may make regularly scheduled payments of interest in respect of Non-Senior Debt; (iii) any Loan Party may make repurchases of capital stock deemed to occur upon the exercise of options or warrants (i.e., a cashless exercise); (iv) Borrower may make distributions to Parent of Cash Taxes; and (v) all Term B Loans shall be paid in accordance with the terms of this Agreement and any restriction imposed on Non-Senior Debt by this Section 7.4 shall not apply to the Term B Loans.

7.5 Mergers; Consolidations; Asset Sales.

(a) Not, and not permit any other Loan Party to, be a party to any merger or consolidation, except for any such merger or consolidation of (i) any Subsidiary into Borrower or any domestic Wholly-Owned Subsidiary; (ii) Borrower and Co-Borrower into one other, with Borrower surviving; or (iii) Co-Borrower and Parent into one other.

(b) Not, and not permit any other Loan Party to, sell, transfer, dispose of, convey or lease any of its assets or equity interests, or sell or assign with or without recourse any receivables, except for sales and dispositions of assets (excluding any equity interests of Borrower, Co-Borrower or any Subsidiary) for at least fair market value so long as the net book value of all assets sold or otherwise disposed of in any Fiscal Year does not exceed 10% of the net book value of the consolidated assets of Borrower, Co-Borrower and the Subsidiaries as of the last day of the preceding Fiscal Year.

7.6 Modification of Organizational Documents.

Not permit the charter, by-laws or other organizational documents of Borrower or any other Loan Party to be amended or modified in any way which could reasonably be expected to materially adversely affect the interests of Lender.

7.7 Use of Proceeds.

Use the proceeds of the Loans solely to consummate the transactions contemplated by the Purchase Agreement, for working capital, for Capital Expenditures and for other general business purposes of Borrower, Co-Borrower and the Subsidiaries; and not use or permit any proceeds of any Loan to be used, either directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of “purchasing or carrying” any Margin Stock.

7.8 Transactions with Affiliates.

Not, and not permit any other Loan Party to, enter into, or cause, suffer or permit to exist any transaction, arrangement or contract with any of its other Affiliates, which is on terms which are less favorable than are obtainable from any Person which is not one of its Affiliates.

7.9 Inconsistent Agreements.

Not, and not permit any other Loan Party to, enter into any agreement containing any provision which would (a) be violated or breached by any borrowing by Borrower hereunder or by the performance by Borrower or any other Loan Party of any of its Obligations hereunder or under any other Loan Document, (b) prohibit Borrower or any other Loan Party from granting to Lender a Lien on any of its assets or (c) create or permit to exist or become effective any encumbrance or restriction on the ability of any other Loan Party to (i) pay dividends or make other distributions to Borrower or any other Subsidiary, or pay any Debt owed to Borrower or any other Subsidiary, (ii) make loans or advances to Borrower or any other Loan Party or (iii) transfer any of its assets or properties to Borrower or any other Loan Party other than (A) customary restrictions and conditions contained in agreements relating to the sale of all or a substantial part of the capital stock or assets of any Subsidiary pending such sale, provided such restrictions and conditions apply only to the Subsidiary to be sold and such sale is permitted

hereunder (B) restrictions or conditions imposed by any agreement relating to purchase money Debt, Capital Leases and other secured Debt permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Debt and (C) customary provisions in leases and other contracts restricting the assignment thereof.

7.10 Business Activities.

Not, and not permit any other Loan Party to, engage in any line of business other than the businesses engaged in on the Closing Date and businesses reasonably related thereto or acquire any properties or assets that are not reasonably related to the conduct of such business activities. Not, and not permit any other Loan Party to, issue any equity interest other than (a) any issuance of shares of Borrower’s common equity securities pursuant to any employee or director option or stock purchase program, benefit plan or compensation program, or (b) any issuance by a Subsidiary to Borrower or another Subsidiary in accordance with Section 7.4.

7.11 Investments.

Not, and not permit any other Loan Party to, make or permit to exist any Investment in any other Person or create or establish any Subsidiary (other than any Subsidiary formed in compliance with Section 7.16), except the following:

(a) contributions by Co-Borrower to Borrower or Borrower to the capital of any Wholly-Owned Subsidiary that is also a Domestic Subsidiary, or by any Subsidiary to the capital of any other Wholly-Owned Subsidiary that is also a Domestic Subsidiary, so long as the recipient of any such capital contribution has guaranteed the Obligations and such guaranty is secured by a pledge of all of its equity interests and substantially all of its real and personal property, in each case in accordance with Section 6.11(a);

(b) Investments constituting Debt permitted by permitted by Section 7.1;

(d) Cash Equivalent Investments;

(e) bank deposits in the ordinary course of business;

(f) Investments in securities of Account Debtors received pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such Account Debtors;

(g) Investments listed on Schedule 7.11 as of the Closing Date; and

(h) any purchase or other acquisition by Borrower or any Wholly-Owned Subsidiary that is also a Domestic Subsidiary of the assets or equity interests of any Domestic Subsidiary.

7.12 Restriction of Amendments to Certain Documents.

Not amend or otherwise modify, or waive any rights under (a) the Purchase Agreement, other than immaterial amendments, modifications and waivers not adverse to the interests of Lender, (b) any provisions of any Non-Senior Debt (other than Term B Loans, which amendment, modification or waiver of rights shall be governed by this Agreement) or (c) the Management Agreement.

7.13 Fiscal Year.

Not change its Fiscal Year.

7.14 Financial Covenants.

7.14.1 Fixed Charge Coverage Ratio.

Not permit the Fixed Charge Coverage Ratio for the periods set forth below to be less than the applicable ratio set forth opposite such period:


Period		Fixed Charge Coverage Ratio
From the date of this Agreement through December 31, 2016		1.00:1.00
From the date of this Agreement through March 31, 2017		1.00:1.00
From the date of this Agreement through June 30, 2017		1.10:1.00
For the Computation Period ending September 30, 2017		1.15:1.00
For the Computation Period ending December 31, 2017		1.20:1.00
For the Computation Period ending March 31, 2018		1.25:1.00
For each Computation Period thereafter		1.30:1.00

7.14.2 Senior Debt to EBITDA Ratio.

Not permit the Senior Debt to EBITDA Ratio as of the last day of any Computation Period ending on or after December 31, 2016 to exceed the applicable ratio set forth opposite such date:


Date		Senior Debt to EBITDA Ratio
For the Computation Period ending December 31, 2016		4.50:1.00
For each Computation Period thereafter through and including the Computation Period ending December 31, 2017		4.50:1.00
For each Computation Period thereafter through and including the Computation Period ending December 31, 2018		4.25:1.00
For each Computation Period thereafter through and including the Computation Period ending December 31, 2019		4.00:1.00
For each Computation Period thereafter through		3.75:1.00

7.14.3 Total Debt to EBITDA Ratio.

Not permit the Total Debt to EBITDA Ratio as of the last day of any Computation Period ending on or after December 31, 2016 to exceed the applicable ratio set forth opposite such date:


Date		Total Debt to EBITDA Ratio
For the Computation Period ending December 31, 2016		6.50:1.00
For each Computation Period thereafter through and including the Computation Period ending December 31, 2017		6.50:1.00
For each Computation Period thereafter through and including the Computation Period ending December 31, 2018		6.25:1.00
For each Computation Period thereafter through and including the Computation Period ending December 31, 2019		6.00:1.00
For each Computation Period thereafter		5.75:1.00

7.14.4 Capital Expenditures.

Not permit the aggregate amount of all Capital Expenditures (i) for the period from and including the Closing Date and continuing up to and including the last day of the Fiscal Year that includes the Closing Date to exceed $4,500,000 for such period, or (ii) for any Fiscal Year thereafter to exceed $4,000,000 for such Fiscal Year.

If Borrower, Co-Borrower and the Subsidiaries do not utilize the entire amount of Capital Expenditures permitted in any Fiscal Year, so long as no Default or Event of Default exists or would be caused thereby, Borrower may carry forward to the immediately succeeding Fiscal Year only, 50% of such unutilized amount (with Capital Expenditures in such succeeding Fiscal Year applied last to such carried forward unutilized amount).

7.15 Bank Accounts.

Not, and not permit any other Loan Party, to maintain or establish any new bank accounts other than the bank accounts set forth on Schedule 7.15 without prior written notice to Lender and unless Lender, Borrower or such other Loan Party and the bank at which the account is to be opened enter into a tri-party agreement regarding such bank account pursuant to which such bank acknowledges the security interest and control of Lender in such bank account and agrees to limit its set-off rights on terms satisfactory to Lender and otherwise acceptable to Lender.

7.16 Subsidiaries.

Not, and not permit any other Loan Party, to establish or acquire any Subsidiary, except that Borrower may establish or acquire Subsidiaries, provided that the Loan Parties shall have caused each such new Subsidiary to take all actions pursuant to Section 6.11(a) hereof with respect to such Subsidiary and such other actions as reasonably requested by Lender, including (a) execution by such Subsidiary of a joinder to the Guarantee and Collateral Agreement or a mortgage or deed of trust, (b) a pledge to Lender of the capital securities of such Subsidiary, (c) such amendments to this Agreement and the other Loan Documents related to the addition of such Subsidiary as may be requested by Lender, and (d) such opinions, certificates, resolutions, instruments, copies of filings and notices, and other materials relating to such Subsidiary as Lender may reasonably request.

Section 8. Events of Default; Remedies.

8.1 Events of Default.

Each of the following shall constitute an Event of Default under this Agreement:

8.1.1 Non-Payment of Credit.

Default in the payment when due of the principal of any Loan; or default in the payment when due of any interest, fee or other amount payable by any Loan Party hereunder or under any other Loan Document.

8.1.2 Default Under Other Debt.

Any default shall occur and continue until the termination of any applicable cure period under the terms applicable to any other Debt of any Loan Party in an aggregate amount (for all such Debt so affected and including un-drawn committed or available amounts and amounts owing to all creditors under any combined or syndicated credit arrangement) exceeding $100,000 and such default shall (a) consist of the failure to pay such Debt when due, whether by acceleration or otherwise, or (b) accelerate the maturity of such Debt or permit the holder or holders thereof, or any trustee or agent for such holder or holders, to cause such Debt to become due and payable (or require Borrower or any other Loan Party to purchase or redeem such Debt or post cash collateral in respect thereof) prior to its expressed maturity.

8.1.3 Bankruptcy; Insolvency.

Any Loan Party becomes insolvent or generally fails to pay, or admits in writing its inability or refusal to pay, debts as they become due; or any Loan Party applies for, consents to, or acquiesces in the appointment of a trustee, receiver or other custodian for such Loan Party or any property thereof, or makes a general assignment for the benefit of creditors; or, in the absence of such application, consent or acquiescence, a trustee, receiver or other custodian is appointed for any Loan Party or for a substantial part of the property of any thereof and is not discharged within 60 days; or any bankruptcy, reorganization, debt arrangement, or other case or proceeding under any bankruptcy or insolvency law, or any dissolution or liquidation proceeding, is commenced in respect of any Loan Party, and if such case or proceeding is not commenced by such Loan Party, it is consented to or acquiesced in by such Loan Party, or remains for 60 days un-dismissed; or any Loan Party takes any action to authorize, or in furtherance of, any of the foregoing.

8.1.4 Non-Compliance with Loan Documents.

(a) Failure by any Loan Party to comply with or to perform any covenant set forth in Sections 6.1.1, 6.1.2, 6.1.3, 6.1.4, 6.1.6, 6.1.7, 6.1.8, 6.2, 6.3(b), 6.3(c), 6.4(d), 6.5, 6.7, 6.9, 6.10, 6.11 and Section 7 applicable to it; or (b) failure by any Loan Party to comply with or to perform any other provision of this Agreement or any other Loan Document applicable to it (and not constituting an Event of Default under any other provision of this Section 8) and continuance of such failure described in this clause (b) for 30 days.

8.1.5 Representations; Warranties.

Any representation or warranty made by any Loan Party herein or any other Loan Document is breached or is false or misleading in any material respect, or any schedule, certificate, financial statement, report, notice or other writing furnished by any Loan Party to Lender in connection herewith is false or misleading in any material respect on the date as of which the facts therein set forth are stated or certified.

8.1.6 Pension Plans.

Institution of any steps by any Person to terminate a Pension Plan if as a result of such termination any Loan Party or any member of the Controlled Group could be required to make a contribution to such Pension Plan, or could incur a liability or obligation to such Pension Plan, in excess of $100,000; (b) a contribution failure occurs with respect to any Pension Plan sufficient to give rise to a Lien under Section 302(f) of ERISA; or (c) there shall occur any withdrawal or partial withdrawal from a Multiemployer Pension Plan and the withdrawal liability (without unaccrued interest) to Multiemployer Pension Plans as a result of such withdrawal (including any outstanding withdrawal liability that Borrower or any other Loan Party or any member of the Controlled Group have incurred on the date of such withdrawal) exceeds $100,000.

8.1.7 Judgments.

Final judgments, awards, or orders (or any settlement of any claim that, if breached, could reasonably be expected to result in a judgment, order or award), other than in respect of any matter set forth in Schedule 5.15 as of the Closing Date, which exceed an aggregate of $500,000 shall be rendered against any Loan Party and remain unsatisfied, and shall not have been vacated or had execution thereof stayed pending appeal within 60 days after entry or filing of such judgments; provided, however, that any such judgment, order, award or settlement shall not give rise to an Event of Default under this subsection if and for so long as (A) the amount of such judgment, order, award or settlement is covered by a valid and binding policy of insurance between the defendant and the insurer covering full payment thereof and (B) such insurer has been notified, and has not disputed the claim made for payment, of the amount of such judgment, order, award or settlement.

8.1.8 Invalidity of Collateral Documents.

Any Collateral Document shall cease to be in full force and effect; or any Loan Party (or any Person by, through or on behalf of any Loan Party) shall contest in any manner the validity, binding nature or enforceability of any Collateral Document.

8.1.9 Invalidity of Subordination Provisions.

Any subordination provision in any document or instrument governing Non-Senior Debt, or any subordination provision in any subordination agreement that relates to any Non-Senior Debt or any subordination provision in any guaranty by any Loan Party of any Non-Senior Debt, shall cease to be in full force and effect, or any Person (including the holder of any applicable Non-Senior Debt) shall contest in any manner the validity, binding nature or enforceability of any such provision.

8.1.10 Change of Control.

(a) Manager and its Investment Affiliates shall collectively cease to, directly or indirectly, (i) own and control at least 51% of the outstanding equity interests of Borrower or Co-Borrower owned by them on the Closing Date (after giving effect to the Related Transactions) or (ii) possess the right to elect, directly or indirectly (through contract, ownership of voting securities or otherwise), at all times a majority of the board of directors (or similar governing body) of Borrower and to direct the management policies and decisions of Borrower, or (b) a “Change of Control” or other similar event shall occur, as defined in, or under, any documentation evidencing or otherwise relating to any Non-Senior Debt.

8.2 Remedies.

If any Event of Default described in Section 8.1.3 shall occur, the Commitments shall immediately terminate and the Loans and all other Obligations shall become immediately due and payable and Borrower shall become immediately obligated to cash collateralize all Letters of Credit in a manner acceptable to Lender, all without presentment, demand, protest or notice of any kind; and, if any other Event of Default shall occur and be continuing, Lender may, in Lender’s sole discretion, declare the Commitments to be terminated in whole or in part and/or declare all or any part of the Loans and other Obligations to be due and payable, whereupon the Commitments shall immediately terminate (or be reduced, as applicable) and/or the Loans and other Obligations shall become immediately due and payable (in whole or in part, as applicable), and/or Borrower shall immediately become obligated to cash collateralize the Letters of Credit (all or any, as applicable) in a manner acceptable to Lender, all without presentment, demand, protest or notice of any kind. Lender shall promptly advise Borrower of any such declaration, but failure to do so shall not impair the effect of such declaration. Notwithstanding the foregoing, the effect as an Event of Default of any event described in Section 8.1.1 may only be waived by the written concurrence of Lender, and the effect as an Event of Default of any other event described in this Section 8 may be waived by the written concurrence of Lender. Any cash collateral delivered hereunder shall be held by Lender (without liability for interest thereon) and applied to the Obligations arising in connection with any drawing under a Letter of Credit. After the expiration or termination of all Letters of Credit, such cash collateral shall be applied by Lender to any remaining Obligations and any excess shall be delivered to Borrower or as a court of competent jurisdiction may elect.

Section 9. Miscellaneous.

9.1 Waiver; Amendments.

No delay on the part of Lender in the exercise of any right, power or remedy shall operate as a waiver thereof, nor shall any single or partial exercise by it any right, power or remedy preclude other or further exercise thereof, or the exercise of any other right, power or remedy. No amendment, modification or waiver of, or consent with respect to, any provision of this Agreement, the Notes or any of the other Loan Documents (or any subordination and intercreditor agreement or other subordination provisions relating to any Non-Senior Debt) shall in any event be effective unless the same shall be in writing and approved by Lender, and then any such amendment, modification, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

9.2 Notices.

Except as otherwise provided in Sections 2.2.2 and 2.2.3, all notices hereunder shall be in writing (including facsimile transmission or electronic mail) and shall be sent to the applicable party at its address shown on Annex II or at such other address as such party may, by written notice received by the other parties, have designated as its address for such purpose. Notices sent by facsimile transmission or electronic mail shall be deemed to have been given when sent; notices sent by mail shall be deemed to have been given three Business Days after the date when sent by registered or certified mail, postage prepaid; and notices sent by hand delivery or overnight courier service shall be deemed to have been given when received. For purposes of Sections 2.2.2 and 2.2.3, Lender shall be entitled to rely on telephonic instructions from any person that Lender in good faith believes is an authorized officer or employee of Borrower, and Borrower shall hold Lender harmless from any loss, cost or expense resulting from any such reliance. Each of Borrower, Co-Borrower and Lender hereby agree that Lender may, in its discretion, deliver information and notices to such financial institutions as may be a party hereto from time to time using the internet service “Intralinks.”

9.3 Computations.

Unless otherwise specifically provided herein, any accounting term used in this Agreement shall have the meaning customarily given such term in accordance with GAAP, and all financial computations hereunder shall be computed in accordance with GAAP consistently applied. The explicit qualification of terms or computations by the phrase “in accordance with GAAP” shall in no way be construed to limit the foregoing.

9.4 Costs; Expenses.

Borrower and Co-Borrower agree to pay on demand all reasonable out-of-pocket costs and expenses of Lender (including Legal Costs) incurred after (but not prior to or on) the Closing Date in connection with the administration (including protection of Collateral) of this Agreement, the other Loan Documents and all other documents provided for herein or delivered or to be delivered hereunder or in connection herewith (including any proposed or actual amendment, supplement or waiver to any Loan Document), and all reasonable out-of-pocket costs and expenses (including Legal Costs) incurred by Lender after an Event of Default in connection with the collection of the Obligations and enforcement of this Agreement, the other Loan Documents or any such other documents. In addition, Borrower and Co-Borrower agree to pay, and to save Lender harmless from all liability for, any fees of Borrower’s auditors in connection with any reasonable exercise by Lender of their rights pursuant to Section 6.4. All Obligations provided for in this Section 9.4 shall survive repayment of the Loans, cancellation of the Notes and termination of this Agreement).

9.5 Indemnification by Borrower.

In consideration of the execution and delivery of this Agreement by Lender and the agreement to extend the Commitments provided hereunder, each of Borrower and Co-Borrower hereby agree to indemnify, exonerate and hold Lender, and each of the officers, directors, employees, Affiliates and agents of Lender (each a “Lender Party”) free and harmless from and against any and all actions, causes of action, suits, losses, liabilities, damages and expenses, including Legal Costs (collectively, the “Indemnified Liabilities”), incurred by Lender Parties or any of them as a result of, or arising out of, or relating to (a) any tender offer, merger, purchase of equity interests, purchase of assets (including the Related Transactions) or other similar transaction financed or proposed to be financed in whole or in part, directly or indirectly, with the proceeds of any of the Loans, (b) the use, handling, release, emission, discharge, transportation, storage, treatment or disposal of any Hazardous Material at any property owned or leased by Borrower or any other Loan Party, (c) any violation of any Environmental Laws with respect to conditions at any property owned or leased by any Loan Party or the operations conducted thereon, (d) the investigation, cleanup or remediation of offsite locations at which any Loan Party or their respective predecessors are alleged to have directly or indirectly disposed of Hazardous Materials or (e) the execution, delivery, performance or enforcement of this Agreement or any other Loan Document by Lender, except to the extent any such Indemnified Liabilities result from the applicable Lender Party’s own gross negligence or willful misconduct as determined by a court of competent jurisdiction. If and to the extent that the foregoing undertaking may be unenforceable for any reason, Borrower hereby agrees to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. All Obligations provided for in this Section 9.5 shall survive repayment of the Loans, cancellation of the Notes, any foreclosure under, or any modification, release or discharge of, any or all of the Collateral Documents and termination of this Agreement.

9.6 Marshaling; Payments Set Aside.

Lender shall be under no obligation to marshal any assets in favor of Borrower or any other Person or against or in payment of any or all of the Obligations. To the extent that Borrower makes a payment or payments to Lender, or Lender enforces its Liens or exercises its rights of set-off, and such payment or payments or the proceeds of such enforcement or set-off or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by Lender in its discretion) to be repaid to a trustee, receiver or any other party in connection with any bankruptcy, insolvency or similar proceeding, or otherwise, then to the extent of such recovery, the obligation hereunder or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

9.7 Nonliability of Lender.

The relationship between Borrower and Co-Borrower on the one hand and Lender on the other hand shall be solely that of borrower and lender. Lender shall have no fiduciary responsibility to Borrower or Co-Borrower. Lender undertakes no responsibility to Borrower or Co-Borrower to review or inform either of them of any matter in connection with any phase of Borrower’s business or operations. Execution of this Agreement by Borrower and Co-Borrower constitutes a full, complete and irrevocable release of any and all claims which either of them may have at law or in equity in respect of all prior discussions and understandings, oral or written, relating to the subject matter of this Agreement and the other Loan Documents. Lender shall not have any liability with respect to, and Borrower and Co-Borrower hereby waive, release and agree not to xxx for, any special, indirect, punitive or consequential damages or liabilities.

9.8 Assignments; Participations.

9.8.1 Assignments.

(a) Lender may at any time assign to one or more Persons (any such Person, an “Assignee”) all or any portion of Lender’s Loans and Commitments. Borrower and Co-Borrower shall be entitled to continue to deal solely and directly with Lender in connection with the interests so assigned to an Assignee until Lender shall have received and accepted an effective Assignment Agreement executed, delivered and fully completed by the applicable parties thereto.

(b) From and after the date on which the conditions described above have been met, (i) such Assignee shall be deemed automatically to have become a party hereto and, to the extent that rights and obligations hereunder have been assigned to such Assignee pursuant to such Assignment Agreement, shall have the rights and obligations of a “Lender” hereunder and (ii) the assigning Lender, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment Agreement, shall be released from its rights (other than its indemnification rights) and obligations hereunder. For the avoidance of doubt, upon Lender’s assignment of any or all of its Loans and/or Commitments to an Assignee, such Assignee shall have all of the rights and obligations of Lender in respect of such assigned Loans and/or Commitments, and shall be deemed to be “Lender” hereunder, as if such Person were an original party hereto. Upon the request of the Assignee (and, as applicable, the assigning Lender) pursuant to an effective Assignment Agreement, Borrower and Co-Borrower shall execute and deliver to Lender for delivery to the Assignee (and, as applicable, the assigning Lender) a Note in the principal amount of the Assignee’s Pro Rata Share of the Revolving Loan Commitment plus the principal amount of the Assignee’s Term Loans (and, as applicable, a Note in the principal amount of the Pro Rata Share of the Revolving Loan Commitment retained by the assigning Lender plus the principal amount of the Term Loans retained by the assigning Lender). Each such Note shall be dated the effective date of such assignment. Upon receipt by the assigning Lender of such Note, the assigning Lender shall return to Borrower any prior Note held by it.

(c) Notwithstanding the provisions of Section 9.8.1(a), Borrower and Co-Borrower hereby authorize and direct Lender, for and on behalf of Borrower and Co-Borrower, to maintain a record of ownership of the Notes and any interest therein, which record, or “book-entry system”, shall identify the owner or owners of the Notes and any such interests therein. The right to the principal of, and stated interest on, the Notes may be transferred only through such book-entry system.

(d) Notwithstanding the foregoing provisions of this Section 9.8.1 or any other provision of this Agreement, Lender may at any time assign all or any portion of its Loans and its Notes (i) as collateral security to a Federal Reserve Bank, to Lender’s trustee for the benefit of its investors or to any other Person (but no such assignment shall release Lender from any of its obligations hereunder) and (ii) to (x) an Affiliate of Lender or (y) an Eligible Institution.

9.8.2 Participations.

Lender may at any time sell to one or more Persons participating interests in its Loans, Commitments or other interests hereunder (any such Person, a “Participant”). In the event of a sale by Lender of a participating interest to a Participant, (a) Lender’s obligations hereunder shall remain unchanged for all purposes, (b) Borrower and Co-Borrower shall continue to deal solely and directly with Lender in connection with Lender’s rights and obligations hereunder and (c) all amounts payable by Borrower and Co-Borrower shall be determined as if Lender had not sold such participation and shall be paid directly to Lender. No Participant shall have any direct or indirect voting rights hereunder. Borrower and Co-Borrower agree that if amounts outstanding under this Agreement are due and payable (as a result of acceleration or otherwise), each Participant shall be deemed to have the right of set-off in respect of its participating interest in such amounts to the same extent as if the amount of its participating interest were owing directly to it as Lender under this Agreement; provided that such right of set-off shall be subject to the obligation of each Participant to share with Lender, and Lender agrees to share with each Participant, as provided in Section 2.11.4. Borrower and Co-Borrower also agree that each Participant shall be entitled to the benefits of Section 3 as if it were a Lender (provided that no Participant shall receive any greater compensation pursuant to Section 3 than would have been paid to Lender if no participation had been sold).

9.9 Confidentiality.

Lender agrees to use commercially reasonable efforts (equivalent to the efforts Lender applies to maintain the confidentiality of its own confidential information) to maintain as confidential all information provided to it by any Loan Party and designated as confidential, except that Lender may disclose such information (a) to Persons employed or engaged by Lender

or any of its Affiliates (including collateral managers of Lender) in evaluating, approving, structuring or administering the Loans and the Commitments; (b) to any assignee or participant or potential assignee or participant that has agreed to comply with the covenant contained in this Section 9.9 (and any such assignee or participant or potential assignee or participant may disclose such information to Persons employed or engaged by them as described in clause (a) above); (c) as required or requested by any federal or state regulatory authority or examiner, or any insurance industry association, or as reasonably believed by Lender to be compelled by any court decree, subpoena or legal or administrative order or process; (d) as, on the advice of Lender’s counsel, is required by law; (e) in connection with the exercise of any right or remedy under the Loan Documents or in connection with any litigation to which Lender is a party; (f) to any nationally recognized rating agency or investor of Lender that requires access to information about Lender’s investment portfolio in connection with ratings issued or investment decisions with respect to Lender; (g) that ceases to be confidential through no fault of Lender; (h) to a Person that is an investor or prospective investor in a Securitization (as defined below) that agrees that its access to information regarding Borrower, Co-Borrower and the Subsidiaries and the Loans and Commitments is solely for purposes of evaluating an investment in such Securitization and who agrees to treat such information as confidential; or (i) to a Person that is a trustee, collateral manager, servicer, noteholder or secured party in a Securitization in connection with the administration, servicing and reporting on the assets serving as collateral for such Securitization. For purposes of this Section, “Securitization” means a public or private offering by Lender or any of its Affiliates or their respective successors and assigns, of securities which represent an interest in, or which are collateralized, in whole or in part, by the Loans or the Commitments. Notwithstanding the foregoing, Borrower and Co-Borrower consent to the publication by Lender of a tombstone or similar advertising material relating to the financing transactions contemplated by this Agreement, and Lender reserves the right to provide to industry trade organizations information necessary and customary for inclusion in league table measurements.

9.10 Captions.

Captions used in this Agreement are for convenience only and shall not affect the construction of this Agreement.

9.11 Nature of Remedies.

All Obligations of Borrower and Co-Borrower and rights of Lender expressed herein or in any other Loan Document shall be in addition to and not in limitation of those provided by applicable law. No failure to exercise and no delay in exercising, on the part of Lender, any right, remedy, power or privilege hereunder, shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

9.12 Counterparts.

This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts and each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute but one and the same Agreement. Receipt by telecopy of any executed signature page to this Agreement or any other Loan Document shall constitute effective delivery of such signature page.

9.13 Severability.

The illegality or unenforceability of any provision of this Agreement or any instrument or agreement required hereunder shall not in any way affect or impair the legality or enforceability of the remaining provisions of this Agreement or any instrument or agreement required hereunder.

9.14 Entire Agreement.

This Agreement, together with the other Loan Documents, embodies the entire agreement and understanding among the parties hereto and supersedes all prior or contemporaneous agreements and understandings of such Persons, verbal or written, relating to the subject matter hereof and thereof and any prior arrangements made with respect to the payment by Borrower or Co-Borrower of (or any indemnification for) any fees, costs or expenses payable to or incurred (or to be incurred) by or on behalf of Lender.

9.15 Successors; Assigns.

This Agreement shall be binding upon Borrower, Co-Borrower and Lender and their respective successors and assigns, and shall inure to the benefit of Borrower, Co-Borrower and Lender and the successors and assigns of Lender. No other Person shall be a direct or indirect legal beneficiary of, or have any direct or indirect cause of action or claim in connection with, this Agreement or any of the other Loan Documents. None of Borrower, Co-Borrower or any Subsidiary may assign or transfer any of its rights or Obligations under this Agreement without the prior written consent of Lender.

9.16 Governing Law.

THIS AGREEMENT AND EACH NOTE SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES TO THE EXTENT THAT SUCH PRINCIPLES WOULD REQUIRE THE APPLICATION OF LAWS OF ANOTHER JURISDICTION.

9.17 Forum Selection; Consent to Jurisdiction.

ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK (IN EACH CASE, SITTING IN THE BOROUGH OF MANHATTAN); PROVIDED 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 SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. BORROWER AND CO-BORROWER HEREBY EXPRESSLY AND IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. BORROWER AND CO-BORROWER FURTHER IRREVOCABLY CONSENT TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. BORROWER AND CO-BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

9.18 Waiver of Jury Trial.

EACH OF BORROWER, CO-BORROWER AND LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY NOTE, ANY OTHER LOAN DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY LENDING RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

[SIGNATURE PAGES FOLLOW]

The parties hereto have caused this Agreement to be duly executed and delivered by their duly authorized officers as of the date first set forth above.


5.11, INC., as Borrower



By:		/s/ Xxxxxxx X. Xxxxxxxxxxx


Name:		Xxxxxxx X. Xxxxxxxxxxx


Title:		Assistant Secretary

5.11 TA, INC., as Co-Borrower



By:		/s/ Xxxxxxx X. Xxxxxxxxxxx


Name:		Xxxxxxx X. Xxxxxxxxxxx


Title:		President

COMPASS GROUP DIVERSIFIED HOLDINGS LLC, as Lender



By:		/s/ Xxxx X. Xxxxxxxxxxx


Name:		Xxxx X. Xxxxxxxxxxx


Title:		Chief Financial Officer

[Signature Page to Credit Agreement]

ANNEX I

Commitments and Pro Rata Shares

Lender

Revolving
Loan
Commitment

Term A Loan

Term B Loan

Compass Group Diversified Holdings LLC

100

Annex I

Annex II

Addresses

5.11, as Borrower

5.11 TA, Inc., as Co-Borrower

Address for Notices:

0000 Xxxxxxxx Xxx.

Xxxxxx, XX

00000

Attn: Xxxxx Unter

Telephone: 000-000-0000

Compass Group Diversified Holdings LLC,

as Lender

Address for Notices:

00 Xxxxxx Xxxx, Xxxxxx Xxxxx

Xxxxxxxx, XX 00000

Attention: Chief Financial Officer

Telephone: (000) 000-0000

Telecopy: (000) 000-0000

Address for Payments:

Bank: Bank of America

[***]

Annex II

Exhibit A

Form of Assignment Agreement

This Assignment Agreement (this “Assignment Agreement”) is entered into as of [______ __, 20__]by and between the Assignor named on the signature page hereto (“Assignor”) and the Assignee named on the signature page hereto (“Assignee”). Reference is made to the Credit Agreement dated as of August [__], 2016 (as amended or otherwise modified from time to time, the “Credit Agreement”) by and among 5.11, Inc. (“Borrower”), 5.11 TA, Inc. (“Co-Borrower”) and Compass Group Diversified Holdings LLC, as lender (together with any successors or assigns, “Lender”), and the other parties thereto. Capitalized terms used herein and not otherwise defined shall have the meanings assigned to them in the Credit Agreement.

Assignor and Assignee agree as follows:

1. Assignor hereby sells and assigns to Assignee, and Assignee hereby purchases and assumes from Assignor the interests set forth on the schedule attached hereto, in and to Assignor’s rights and obligations under the Credit Agreement and the other Loan Documents as of the Effective Date (as defined below). Such purchase and sale is made without recourse, representation or warranty except as expressly set forth herein.

2. Assignor (i) represents that, as of the Effective Date, it is the legal and beneficial owner of the interests assigned hereunder free and clear of any adverse claim; (ii) makes no other representation or warranty and assumes no responsibility with respect to any statement, warranties or representations made in or in connection with the Credit Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Agreement, any Loan Documents or any other instrument or document furnished pursuant thereto; and (iii) makes no representation or warranty and assumes no responsibility with respect to the financial condition of Borrower, Co-Borrower or any Subsidiary or any other Person or the performance or observance by Borrower, Co-Borrower or any Subsidiary of its Obligations under the Credit Agreement or the Loan Documents or any other instrument or document furnished pursuant thereto.

3. Assignee (i) represents and warrants that it is legally authorized to enter into this Assignment Agreement; (ii) confirms that it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant thereto and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment Agreement; (iii) agrees that it will, independently and without reliance upon Assignor or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement; (iv) agrees that it will perform in accordance with their terms all obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender; (vi) represents that on the date of this Assignment Agreement it is not presently aware of any facts that would cause it to make a claim under the Credit Agreement; and (vii) if organized under the laws of a jurisdiction outside the United States, attaches the forms prescribed by the Internal Revenue Service of the United States, which have been duly executed, certifying as to Assignee’s exemption from United States withholding taxes with respect to all payments to be made to Assignee under the Agreement or such other documents as are necessary to indicate that all such payments are subject to such tax at a rate reduced by an applicable tax treaty.

A-1

4. The effective date for this Assignment Agreement shall be as set forth on the schedule attached hereto (the “Effective Date”).

5. Upon such acceptance, from and after the Effective Date, (i) Assignee shall be a party to the Credit Agreement and, to the extent provided in this Assignment Agreement, have the rights and obligations of a Lender thereunder and (ii) Assignor shall, to the extent provided in this Assignment Agreement, relinquish its rights (other than indemnification rights) and be released from its obligations under the Credit Agreement.

6. Upon such acceptance, from and after the Effective Date, Borrower shall make all payments in respect of the interest assigned hereby (including payments of principal, interest, fees and other amounts) to Assignee. Assignor and Assignee shall make all appropriate adjustments in payments for periods prior to the Effective Date with respect to the making of this assignment directly between themselves.

7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

8. This Assignment may be executed in any number of counterparts and by the different parties hereto on separate counterparts and each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute but one and the same Assignment. Receipt by telecopy of any executed signature page to this Assignment shall constitute effective delivery of such signature page.

A-2

The parties hereto have caused this Agreement to be executed and delivered as of the date first written above.


ASSIGNOR:



By:


Title:



ASSIGNEE:



By:


Title:

A-3

Schedule to Assignment Agreement


Assignor:
Assignee:
Effective Date:

Credit Agreement dated as of August 31 , 2016 (as amended or otherwise modified from time to time, the “Credit Agreement”) among 5.11, Inc. (“Borrower”), Compass Group Diversified Holdings LLC, as lender (together with any successors or assigns, “Lender”), and the other parties thereto.

Interests Assigned:

Commitment/Loan

Revolving Loan
Commitment

Term A Loan
Commitment

Term B Loan
Commitment

Assignor Amounts

Amounts Assigned

Assignee Amounts (post-assignment)

Assignee Information:


Address for Notices:						Address for Payments:

						Bank:
Attention:						ABA#:
Telephone:						Account#:
Telecopy:						Reference:

A-4

Exhibit B

Form of Compliance Certificate

Please refer to the Credit Agreement dated as of August 31 , 2016 (as amended or otherwise modified from time to time, the “Credit Agreement”) among 5.11, Inc.(“Borrower”), Compass Group Diversified Holdings LLC, as lender (together with any successors or assigns, “Lender”), and the other parties thereto. This certificate (this “Certificate”), together with supporting calculations attached hereto, is delivered to Lender pursuant to the terms of the Credit Agreement. Terms used but not otherwise defined herein are used herein as defined in the Credit Agreement.

Enclosed herewith is a copy of the [annual audited/quarterly] report of Borrower, Co-Borrower and the Subsidiaries as at [______, 20__] (the “Computation Date”), which report fairly presents in all material respects the financial condition and results of operations [(subject to the absence of footnotes and to normal year-end adjustments)] of Borrower, Co-Borrower and the Subsidiaries as of the Computation Date and has been prepared in accordance with GAAP consistently applied.

Borrower hereby certifies and warrants that the computations set forth on the schedule attached hereto correspond to the ratios and/or financial restrictions contained in the Credit Agreement and such computations are true and correct as at the Computation Date.

Borrower further certifies that no Event of Default or Default has occurred and is continuing.

Borrower has caused this Certificate to be executed and delivered by its respective officer thereunto duly authorized on [______, 20__].


5.11, INC.



By:


Title:

B-1

Schedule to Compliance Certificate

Dated as of [______, 20__]


A.	Minimum Fixed Charge Coverage Ratio
	1.	Consolidated Net Income	$
	2.	Plus: Interest Expense	$
		income tax expense	$
		depreciation	$
		amortization	$
		other	$
		management fees paid or accrued	$
	3.	EBITDA	$
	4.	Income taxes paid	$
	5.	Management fees paid in cash	$
	6.	Capital Expenditures	$
	7.	Sum of (4), (5) and (6)	$
	8.	Remainder of (3) minus (7)	$
	9.	Interest Expense paid in cash	$
	10.	Required payments of principal of Debt (including Term Loans but excluding Revolving Loans)	$
	12.	Sum of (9) and (10)	$
	13.	Ratio of (8) to (11)		to 1
	14.	Minimum Required		to 1
B.	Maximum Senior Debt to EBITDA Ratio
	1.	Senior Debt	$
	2.	EBITDA	$
	3.	Ration of (1) to (2)		to 1
	4.	Maximum Allowed		to 1
C.	Maximum Total Debt to EBITDA Ratio
	1.	Total Debt	$
	2.	EBITDA	$
		(from Item A(3) above)
	3.	Ratio of (1) to (2)		to 1
	4.	Maximum allowed		to 1
D.	Capital Expenditures
	1.	Capital Expenditures for the Fiscal Year	$
	2.	Maximum Permitted Capital Expenditures	$

B-2

Exhibit C

Form of Note

$200,000,000

August 31, 2016

Westport, Connecticut

The undersigned, for value received, promise to pay, jointly and severally, to the order of Compass Group Diversified Holdings LLC (“Lender”) at its principal office of 00 Xxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxx 00000, the aggregate unpaid amount of all Loans made to the undersigned by Lender pursuant to the Credit Agreement referred to below, such principal amount to be payable on the dates set forth in the Credit Agreement.

The undersigned further promise to pay, jointly and severally, interest on the unpaid principal amount of each Loan from the date of such Loan until such Loan is Paid in Full, payable at the rate(s) and at the time(s) set forth in the Credit Agreement. Payments of both principal and interest are to be made in lawful money of the United States of America.

This promissory note (“Note”) evidences indebtedness incurred under, and is subject to the terms and provisions of, the Credit Agreement, dated as of August 31, 2016 (as amended or otherwise modified from time to time, the “Credit Agreement”; terms not otherwise defined herein are used herein as defined in the Credit Agreement), among the undersigned and Lender, to which Credit Agreement reference is hereby made for a statement of the terms and provisions under which this Note may or must be paid prior to its due date or its due date accelerated.

[Remainder of page intentionally left blank; signature page follows]

C-1

This Note is made under and governed by the laws of the State of New York applicable to contracts made and to be performed entirely within such State.


5.11, INC.



By:


Name:		Xxxxxxx X. Xxxxxxxxxxx
Title:		Assistant Secretary

5.11 TA, INC.



By:


Name:		Xxxxxxx X. Xxxxxxxxxxx
Title:		President

C-2

Exhibit D

Form of Notice of Borrowing

Please refer to the Credit Agreement dated as of August 31 , 2016 (as amended or otherwise modified from time to time, the “Credit Agreement”) among 5.11, Inc. (“Borrower”), 5.11 TA, Inc. (“Co-Borrower”) and Compass Group Diversified Holdings LLC, as lender (together with any successors or assigns, “Lender”), and the other parties thereto. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed thereto in the Credit Agreement. This notice is given pursuant to Section 2.2.2 of the Credit Agreement. Borrower hereby requests a borrowing under the Credit Agreement as follows:

The aggregate amount of the proposed borrowing is [$__________]. The requested borrowing date for the proposed borrowing (which is a Business Day) is [________, 20__]. The Revolving Loans comprising the proposed borrowing are [Base Rate][LIBOR] Loans. The duration of the Interest Period for each LIBOR Loan made as part of the proposed borrowing, if applicable, is [_____] months (which shall be 1, 2 or 3 months).

Borrower and Co-Borrower have caused this Notice to be executed and delivered by its respective officer or designee thereunto duly authorized on [______, 20__].


5.11, INC.

By:

Title:

5.11 TA, INC.

By:

Title:

D-1

Exhibit E

Form of Notice of Conversion/Continuation

Please refer to the Credit Agreement dated as of August 31 , 2016 (as amended or otherwise modified from time to time, the “Credit Agreement”) among 5.11, Inc. (“Borrower”), Compass Group Diversified Holdings LLC, as lender (together with any successors or assigns, “Lender”), and the other parties thereto. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed thereto in the Credit Agreement. This notice is given pursuant to Section 2.2.3 of the Credit Agreement. Borrower hereby requests a [conversion][continuation] of [Term A Loans][Term B Loans][Revolving Loans] as follows:

The date of the proposed [conversion] [continuation] is [______, 20__] (which shall be a Business Day). The aggregate amount of the [Term [A][B] Loans] [Revolving Loans] proposed to be [converted] [continued] is $______________. [Specify which part is to be converted and which part is to be continued, if appropriate.] The Loans to be [continued] [converted] are [Base Rate Loans] [LIBOR Loans] and the Loans resulting from the proposed [conversion] [continuation] will be [Base Rate Loans] [LIBOR Loans]. The duration of the requested Interest Period for each LIBOR Loan made as part of the proposed [conversion] [continuation] is [____] months (which shall be 1, 2 or 3 months).

Borrower and Co-Borrower have caused this Notice to be executed and delivered by its officer thereunto duly authorized on [______, 20__].


5.11, INC.

By:

Title:

5.11 TA, INC.

By:

Title:

E-1

Document Metadata

Table of Contents

CREDIT AGREEMENT dated as of August 31, 2016 among 5.11, INC. as Borrower, 5.11 TA, INC., As Co-Borrower, and COMPASS GROUP DIVERSIFIED HOLDINGS LLC, as Lender

Document Metadata