UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

	

 
  
FORM 8-K

  CURRENT REPORT 
 PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): June 27, 2017

	

MALIBU BOATS, INC.
(Exact Name of Registrant as specified in its charter)
Commission file number: 001-36290

					
Delaware	 	5075 Kimberly Way
Loudon, Tennessee 37774	 	46-4024640	
(State or other jurisdiction of
incorporation or organization)	 	(Address of principal executive offices,
including zip code)	 	(I.R.S. Employer
Identification No.)	
 	 	(865) 458-5478	 	 	
 	 	(Registrant’s telephone number,
including area code)	 	 	

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

	
		
o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
 	 	
o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
 	 	
o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
 	 	
o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2 of this chapter).
Emerging growth company       þ

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. þ

Item 1.01. Entry Into a Material Definitive Agreement.
Agreement to Acquire Cobalt Boats, LLC
On June 28, 2017, Malibu Boats, LLC, a Delaware limited liability company (the “Purchaser”) and wholly owned indirect subsidiary of Malibu Boats, Inc., a Delaware corporation (the “Company”) entered into an agreement to acquire all of the outstanding units of Cobalt Boats, LLC (“Cobalt”) from its existing members (the “Sellers”) pursuant to a unit purchase agreement, dated as of June 28, 2017 (the “Unit Purchase Agreement”), by and among the Purchaser, Cobalt, and the other parties named therein (the “Acquisition”) for an aggregate purchase price of $130 million, subject to customary adjustments for the amount of working capital in the business at the closing date and subject to adjustment for any judgment or settlement in connection with a pending litigation matter between Cobalt and Sea Ray Boats, Inc. and Brunswick Corporation. A portion of the purchase price will be deposited into escrow accounts to secure certain post-closing obligations of the Sellers. The Purchaser will pay $1 million of the purchase price in newly issued shares of the Company’s Class A common stock to William Paxson St. Clair, Jr. based on the closing price of the shares of Class A common stock of the Company on June 27, 2017 and pay the balance of the purchase price for the Acquisition in cash with borrowings under its Second Amended and Restated Credit Agreement (the “Credit Agreement”).
The Unit Purchase Agreement contains customary representations and warranties regarding the Purchaser, Cobalt and its subsidiaries and the Sellers, customary covenants, including a covenant regarding the conduct of Cobalt’s business between signing and closing of the Acquisition and post-closing restrictive covenants from the Sellers and certain other parties in favor of the Purchaser, indemnification provisions and other provisions customary for transactions of this nature. The closing of the Acquisition will occur on the second business day following the satisfaction or waiver of all closing conditions set forth in the Unit Purchase Agreement (other than closing conditions that by their nature are to be satisfied at the closing, but subject to the satisfaction or waiver thereof at the closing) or as the Purchaser and the Sellers may otherwise mutually agree in writing; but the closing cannot occur before July 3, 2017 without the prior written consent of the Purchaser.
The foregoing description of the Unit Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the Unit Purchase Agreement, which is filed as Exhibit 2.1 hereto and is incorporated herein by reference. Certain schedules and annexures to the Unit Purchase Agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally to the Securities and Exchange Commission a copy of any omitted schedule or annexure upon request.
The Unit Purchase Agreement has been provided solely to inform investors of its terms. The representations, warranties and covenants contained in the Unit Purchase Agreement were made only for the purposes of such agreement and as of specific dates, were made solely for the benefit of the parties to the Unit Purchase Agreement and may be intended not as statements of fact, but rather as a way of allocating risk to one of the parties if those statements prove to be inaccurate. In addition, such representations, warranties and covenants may have been qualified by certain disclosures not reflected in the text of the Unit Purchase Agreement and may apply standards of materiality in a way that is different from what may be viewed as material by stockholders of, or other investors in, the Company. The Company’s shareholders and other investors are not third-party beneficiaries under the Unit Purchase Agreement and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or conditions of the Company or Cobalt Boats, LLC or any of their respective subsidiaries or affiliates.
Second Amended and Restated Credit Agreement
On June 28, 2017, Malibu Boats, LLC as the borrower (the “Borrower”), a wholly owned indirect subsidiary of the Company, entered into a Second Amended and Restated Credit Agreement to its existing amended and restated credit agreement dated as of April 2, 2015 (as amended, the “Existing Credit Agreement”), by and among the Borrower, Malibu Boats Holdings, LLC, parent of the Borrower and a wholly owned subsidiary of the Company (the “LLC”), and certain subsidiaries of the Borrower parties thereto, as guarantors, the lenders parties thereto, and SunTrust Bank, as administrative agent, swingline lender and issuing bank. The Credit Agreement provides the Borrower a term loan facility in an aggregate principal amount of $160.0 million ($55.0 million of which was drawn on June 28, 2017 to refinance the loans under the Existing Credit Agreement and $105.0 million of which will be a delayed draw term loan which will be used to fund the payment of the purchase price for the Acquisition, as well as to pay certain fees and expenses related to entering into the Credit Agreement) and a revolving credit facility of up to $35.0 million, each, with a maturity date of July 1, 2022. The Borrower has the option to request lenders to increase the amount available under the revolving credit facility by, or obtain incremental term loans of, up to $50.0 million, subject to the terms of the Existing Credit Agreement and only if existing or new lenders choose to provide additional term or revolving commitments.

Borrowings under the Credit Agreement bear interest at a rate equal to either, at the Borrower’s option, (i) the highest of the prime rate, the Federal Funds Rate plus 0.5%, or one-month LIBOR plus 1% (the “Base Rate”) or (ii) LIBOR, in each case plus an applicable margin ranging from 1.75% to 3.00% with respect to LIBOR borrowings and 0.75% to 2.00% with respect to Base Rate borrowings. The applicable margin will be based upon the consolidated leverage ratio of the LLC and its subsidiaries calculated on a consolidated basis. The Borrower will also be required to pay a commitment fee for the unused portion of the revolving credit facility and on the daily amount of the unused delayed draw term loan during the availability period, which will range from 0.25% to 0.50% per annum, depending on the LLC’s and its subsidiaries’ consolidated leverage ratio. The Company is not a party to the Existing Credit Agreement or the Credit Agreement. As with the Existing Credit Agreement, the obligations of the Borrower under the Credit Agreement are guaranteed by its parent, the LLC, and, subject to certain exceptions, the present and future domestic subsidiaries of the Borrower, including Cobalt, and all such obligations are secured by substantially all of the assets of the LLC, the Borrower and such subsidiary guarantors pursuant to the Second Amended and Restated Security Agreement, by and among the Borrower, the LLC, the subsidiary guarantors, and SunTrust Bank, as administrative agent, dated as of June 28, 2017, and other collateral documents.
The Credit Agreement permits prepayment of the new term loan facility and delayed draw term loan without any penalties. The term loan facility under the Credit Agreement is subject to quarterly installments of approximately $0.7 million per quarter until March 31, 2019, then approximately $1.0 million per quarter until June 30, 2021, and approximately $1.4 million per quarter through March 31, 2021. Assuming a $105 million delayed draw term loan is made, the delayed draw term loan under the Credit Agreement is subject to quarterly installments of approximately $1.3 million per quarter until March 31, 2019, then approximately $2.0 million per quarter until June 30, 2021, and approximately $2.6 million per quarter through March 31, 2022. The balance of the term loan facility and delay draw term loan is due on the maturity date of July 1, 2022. The Credit Agreement is also subject to prepayments from the net cash proceeds received by the Borrower or any guarantors from certain asset sales and recovery events, subject to certain reinvestment rights, and from excess cash flow, subject to the terms and conditions of the Credit Agreement.    
The Credit Agreement contains certain customary representations and warranties, and notice requirements for the occurrence of specific events such as the occurrence of any event of default, or pending or threatened litigation. The Credit Agreement also requires compliance with certain customary financial covenants, including a minimum ratio of EBITDA to fixed charges and a maximum ratio of total debt to EBITDA. The Credit Agreement contains certain restrictive covenants, which, among other things, place limits on certain activities of the loan parties under the Credit Agreement, such as the incurrence of additional indebtedness and additional liens on property and limit the future payment of dividends or distributions. For example, the Credit Agreement generally prohibits the LLC, the Borrower and the subsidiary guarantors from paying dividends or making distributions, including to the Company. The Credit Agreement permits, however, distributions based on a member’s allocated taxable income and also includes carve-outs to permit certain other distributions.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth above under Item 1.01 is hereby incorporated by reference into this Item 2.03.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On June 27, 2017, the Board of Directors of the Company (the “Board”), subject to and effective upon completion of the Acquisition, increased the size of the Board from nine to ten directors and appointed Mr. William Paxson St. Clair, Jr., current Chief Executive Officer of Cobalt to the Board, with his term to begin on the closing date of the Acquisition. In addition, subject to and effective upon the completion of the Acquisition, Mr. St. Clair will be appointed as President of Cobalt, which will be an indirect wholly owned subsidiary of the Company upon completion of the Acquisition.
Mr. St. Clair, 52, has been Chief Executive Officer of Cobalt since 2006. Prior to that he served in various roles at Cobalt including as President and Chief Operating Officer from 2000 until 2006, Vice President and General Manager from 1998 until 2000, Vice President of Sales and Marketing from 1993 until 1998 and as National Sales Manager from 1990 until 1993. He currently serves as a director of HydroHoist Boat Lift, a private company that manufactures boat lifts, pedestal parts and other boat accessories, the Kansas Chamber of Commerce and Industry and the National Marine Manufacturers Association. Mr. St. Clair graduated with a B.A. in Liberal Arts and Sciences from the University of Kansas.
In connection with Mr. St. Clair’s appointment as President of Cobalt, Cobalt entered into an employment agreement with Mr. St. Clair dated June 28, 2017, which will become effective on the closing date of the Acquisition, subject to completion of the Acquisition. The employment agreement has a term of two years, commencing on the closing date of the Acquisition and

ending on the two year anniversary of such date (the “Period of Employment”). The material terms of the employment agreement are summarized below.
Base Salary . Mr. St. Clair will receive an annual base salary of $400,000.
Bonus. Mr. St. Clair will be entitled to earn an annual bonus each year. The target and actual bonus amount will be determined by the Company’s Compensation Committee each year based on the bonus program in effect for that model year, with the payment of any bonus subject to the achievement of the applicable performance criteria and Mr. St. Clair’s continuous employment.
Severance Terms . If the Company terminates Mr. St. Clair’s employment without “Cause” (as defined in the employment agreement), he will continue to receive his base salary through the end of the remaining term of the Period of Employment. Mr. St. Clair’s receipt of these severance benefits is subject to his execution and non-revocation of a release of claims in favor of the Company, and to his compliance with the restrictive covenants described below.
Other Benefits . Mr. St. Clair will be eligible to participate in all of Cobalt’s employee benefit programs for which employees of Cobalt are generally eligible. In addition, Mr. St. Clair will be entitled to the use of a boat and automobile benefits.
Restrictive Covenants. During the term of his employment and for a period of three years following his termination of employment, Mr. St. Clair will not solicit the employees of Company or any of its affiliates, and will be subject to a non-disparagement provision. In addition, Mr. St. Clair has agreed not to disclose any confidential information of the Company or any of its affiliates at any time during or after his employment.
The foregoing description of Mr. St. Clair’s employment agreement does not purport to be complete and is qualified in its entirety by reference to the employment agreement, which is filed as Exhibit 10.3 hereto and is incorporated herein by reference.
Mr. St. Clair will also enter into a customary indemnification agreement with the Company, the form of which is filed as Exhibit 10.19 to the Company’s registration statement on Form S-1 filed on December 13, 2013.
Item 7.01. Regulation FD Disclosure.
The Company issued a press release on June 28, 2017, announcing execution of the Unit Purchase Agreement. The Company also prepared an investor presentation regarding the Acquisition, dated June 29, 2017.  A copy of the press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and a copy of the investor presentation is attached to this Current Report on Form 8-K as Exhibit 99.2.
The information in this Item 7.01 and in Exhibits 99.1 and 99.2 is furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and such information shall not be deemed to be incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, or the Exchange Act.
Forward Looking Statements
This Current Report on Form 8-K includes forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Forward-looking statements can be identified by such words and phrases as “believes,” “anticipates,” “expects,” “intends,” “estimates,” “may,” “will,” “should,” “continue” and similar expressions, comparable terminology or the negative thereof, and includes the statements in this Form 8-K concerning the timing of the closing of the Acquisition, the anticipated issuance of shares of Class A common stock and borrowings under the Credit Agreement to fund the Acquisition and the appointment of Mr. St. Clair to the Board and effectiveness of his employment agreement subject to completion of the Acquisition.
Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, including, but not limited to: the satisfaction of the closing conditions set forth in the Unit Purchase Agreement, the ability to meet the conditions under the Credit Agreement to borrow the anticipated amount, and other factors affecting the Company detailed from time to time in the Company’s filings with the Securities and Exchange Commission. Many of these risks and uncertainties are outside the Company’s control, and there may be other risks and uncertainties which the Company does not currently anticipate because they relate to events and depend on

circumstances that may or may not occur in the future. Although the Company believes that the expectations reflected in any forward-looking statements are based on reasonable assumptions at the time made, the Company can give no assurance that the Company’s expectations will be achieved. Undue reliance should not be placed on these forward-looking statements, which speak only as of the date hereof.  The Company undertakes no obligation (and the Company expressly disclaims any obligation) to update or supplement any forward-looking statements that may become untrue because of subsequent events, whether because of new information, future events, changes in assumptions or otherwise.
Item 9.01 Financial Statements and Exhibits.
(d)    Exhibits
The following exhibits are being furnished as part of this report:

	
			
Exhibit No.	 	Description	
 	 	 	
2.1+	 	Unit Purchase Agreement, dated June 28, 2017 among Malibu Boats, LLC, Cobalt Boats, LLC and the other parties named therein	
10.1	 	Second Amended and Restated Credit Agreement, dated June 28, 2017, by and among Malibu Boats, LLC, Malibu Boats Holdings, LLC, the other guarantors party thereto, the lenders party thereto, and SunTrust Bank, as administrative agent, as issuing bank and as swingline lender	
10.2	 	Second Amended and Restated Security Agreement, dated June 28, 2017, by and among Malibu Boats, LLC, Malibu Boats Holdings, LLC, the other debtors party thereto, and SunTrust Bank, as administrative agent	
10.3	 	Employment Agreement, dated June 28, 2017, between William Paxson St. Clair, Jr. and Cobalt Boats, LLC	
99.1	 	Press Release dated June 28, 2017	
99.2	 	Investor presentation on acquisition of Cobalt Boats, LLC dated June 29, 2017	
+ Portions of this exhibit have been omitted pursuant to a confidential treatment request. Omitted information has been filed separately with the SEC.

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

							
 	 	Malibu Boats, Inc.	 	
 	 	 	 	
Date: June 29, 2017	By:	/s/ Jack Springer	 	
 	 	 	 	 	Jack Springer	 	
 	 	Chief Executive Officer	 	

EXHIBIT INDEX

	

Exhibit No.	 	Description	 	
 	 	
2.1+	 	Unit Purchase Agreement, dated June 28, 2017 among Malibu Boats, LLC, Cobalt Boats, LLC and the other parties named therein	 	
10.1	 	Second Amended and Restated Credit Agreement, dated June 28, 2017, by and among Malibu Boats, LLC, Malibu Boats Holdings, LLC, the other guarantors party thereto, the lenders party thereto, and SunTrust Bank, as administrative agent, as issuing bank and as swingline lender	 	
10.2	 	Second Amended and Restated Security Agreement, dated June 28, 2017, by and among Malibu Boats, LLC, Malibu Boats Holdings, LLC, the other debtors party thereto, and SunTrust Bank, as administrative agent	 	
10.3	 	Employment Agreement, dated June 28, 2017, between William Paxson St. Clair, Jr. and Cobalt Boats, LLC	 	
99.1	 	Press Release dated June 28, 2017	 	
99.2	 	Investor presentation on acquisition of Cobalt Boats, LLC dated June 29, 2017	 	

+ Portions of this exhibit have been omitted pursuant to a confidential treatment request. Omitted information has been filed separately with the SEC.

Exhibit 2.1

EXECUTION VERSION

UNIT PURCHASE AGREEMENT
dated as of
June 28, 2017
by and among
MALIBU BOATS, LLC,
COBALT BOATS, LLC,
and
THE OTHER PARTIES HERETO

Table of Contents

						
Page	 	
1.	Purchase and Sale	1		
 	1.1	 	Purchase and Sale of Units	1		
 	1.2	 	Purchase Price	1		
 	1.3	 	Reference Balance Sheet; Working Capital; Debt Payoff Letters	2		
 	1.4	 	Payment of Purchase Price; Escrow Release	3		
 	1.5	 	Post-Closing Adjustments	4		
 	1.6	 	Withholding	6		
2.	Closing	6		
 	2.1	 	The Closing; Closing Date	6		
 	2.2	 	Deliverables at the Closing	7		
3.	Company’s Representations and Warranties	9		
 	3.1	 	Organization and Corporate Power	9		
 	3.2	 	Authorization of Transactions	10		
 	3.3	 	Non-Contravention	10		
 	3.4	 	Insider Interests	11		
 	3.5	 	Brokers’ Fees	11		
 	3.6	 	Capitalization; Subsidiaries	11		
 	3.7	 	Financial Statements; Indebtedness	12		
 	3.8	 	Events Subsequent	13		
 	3.9	 	Absence of Undisclosed Liabilities	15		
 	3.10	 	Legal Compliance; Permits	15		
 	3.11	 	Title to Assets	15		
 	3.12	 	Properties	16		
 	3.13	 	Tax Matters	18		
 	3.14	 	Contracts and Commitments	20		
 	3.15	 	Insurance	22		
 	3.16	 	Product Liabilities and Warranties	22		
 	3.17	 	Intellectual Property	24		
 	3.18	 	Litigation	26		
 	3.19	 	Employees	27		
 	3.20	 	Employee Benefits	28		
 	3.21	 	Environmental, Health, and Safety Matters	30		
 	3.22	 	Accounts Receivable	32		
 	3.23	 	Inventory	32		
 	3.24	 	Top Dealers, Distributors, Sales Representatives and Suppliers	32		
 	3.25	 	Business Practices	33		
4.	Unitholders’ Representations and Warranties	33		
 	4.1	 	Organization of FE II, Inc	33		
 	4.2	 	Authorization of Transaction	34		
 	4.3	 	Non-Contravention	34		
 	4.4	 	Brokers’ Fees	34		
 	4.5	 	Title to the Units	34		
 	4.6	 	Status of Unitholder	35		

	
						
5.	Buyer’s Representations and Warranties	36		
 	5.1	 	Organization of Buyer	36		
 	5.2	 	Authorization of Transaction	36		
 	5.3	 	Non-Contravention	36		
 	5.4	 	Brokers’ Fees	37		
 	5.5	 	Available Funds	37		
 	5.6	 	Investment Intent	37		
6.	Covenants	37		
 	6.1	 	Conduct of Business	37		
 	6.2	 	Reasonable Access	40		
 	6.3	 	Directors’ and Officers’ Insurance	40		
 	6.4	 	Press Releases	40		
 	6.5	 	Business; Employees; Employee Plans	40		
 	6.6	 	Restrictive Covenants	42		
 	6.7	 	Release	44		
 	6.8	 	R&W Insurance Policy	45		
 	6.9	 	Efforts	45		
 	6.10	 	Notice of Developments	45		
 	6.11	 	Exclusivity	45		
 	6.12	 	Financing	46		
 	6.13	 	Termination of Redemption Agreements; Amendment to Real Estate Rental Agreement	47		
 	6.14	 	Representations and Warranties of Other Parties	47		
 	6.15	 	Airosol Property	47		
 	6.16	 	Inventory	47		
 	6.17	 	Cobalt Wine	47		
 	6.18	 	Real Property Matters	48		
7.	Conditions to Closing	48		
 	7.1	 	Conditions to Obligations of Buyer	48		
 	7.2	 	Conditions to Obligations of the Company Parties	49		
8.	Termination	50		
 	8.1	 	Termination	50		
 	8.2	 	Effect of Termination	50		
9.	Survival; Indemnification	51		
 	9.1	 	Survival	51		
 	9.2	 	Indemnification by Sellers	51		
 	9.3	 	Indemnification by Buyer	57		
 	9.4	 	Third-Party Claims	58		
 	9.5	 	Objections to Claims for Indemnification	59		
 	9.6	 	Other Indemnification Matters	59		
 	9.7	 	FE II, Inc. Obligations	60		
10.	Additional Agreements	60		
 	10.1	 	Transaction Expenses	60		
 	10.2	 	Transfer and Other Taxes	60		
 	10.3	 	Further Assurances	61		
 	10.4	 	Transition Assistance	61		
 	10.5	 	Certain Tax Matters	61		

	
						
 	10.6	 	Confidentiality	64		
 	10.7	 	Transfer of Life Insurance Policies	66		
 	10.8	 	Post-Closing Access	66		
 	10.9	 	Buyer Obligation for Company Performance	66		
 	10.10	 	Pending Litigation	66		
11.	Definitions	67		
12.	Miscellaneous	78		
 	12.1	 	No Third Party Beneficiaries	78		
 	12.2	 	Entire Agreement	78		
 	12.3	 	Assignment	79		
 	12.4	 	Counterparts	79		
 	12.5	 	Headings	79		
 	12.6	 	Notices	79		
 	12.7	 	Governing Law	81		
 	12.8	 	Dispute Resolution	81		
 	12.9	 	Amendments and Waivers	83		
 	12.10	 	Legal Representations	83		
 	12.11	 	Interpretation	83		
 	12.12	 	Financing Source Arrangements	84		

 

 
THIS UNIT PURCHASE AGREEMENT (this “ Agreement ”) is made as of June 28, 2017 (the “ Agreement Date ”), by and among Malibu Boats, LLC, a Delaware limited liability company (“ Buyer ”); Cobalt Boats, LLC, a Delaware limited liability company (“ Company ”); each of William Paxson St. Clair, Jr.; Mary Whitney Callan; and FE II, Inc., a Kansas corporation (collectively, the “ Unitholders ” or “ Sellers ”); and, with respect to those provisions set forth above their respective signatures below, each of William Paxson (Pack) St. Clair, Jill St. Clair, Sean Callan, William Paxson St. Clair Trust (the “ Pack Trust ”), Jill Petrie St. Clair Trust (the “ Jill Trust ”), St. Clair Cellars, LLC, a Kansas limited liability company, and Malibu Boats, Inc., a Delaware corporation. Each of the foregoing is referred to as a “ Party ” and collectively as the “ Parties. ”
Background
A.      The Company has a total of 63,053 units issued and outstanding, 972 of which are Series A Preferred Units, of which 695 are owned by William Paxson St. Clair, Jr. and 277 are owned by Mary Whitney Callan (collectively, the “ Preferred Units ”), and 62,081 of which are common units owned by FE II, Inc., a Kansas corporation (“ Common Units ,” and collectively with the Preferred Units, the “ Units ”); and
B.      Buyer desires to purchase from Sellers, and Sellers desire to sell to Buyer, all of the Units of the Company in exchange for the consideration as set forth in this Agreement.
Agreement
In consideration of the mutual promises in this Agreement, and in consideration of the representations, warranties and covenants set forth below, the Parties hereby agree as follows:
1.      Purchase and Sale
1.1      Purchase and Sale of Units . Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, Sellers will sell, assign, transfer, and deliver to Buyer, and Buyer will purchase and acquire from Sellers, the Units and all of their right, title and interest therein, free and clear of all Liens.
1.2      Purchase Price . Subject to the other provisions of Article 1 , the aggregate consideration for all of the Units payable at the Closing, which is referred to as the “ Purchase Price, ” will equal the result of the following, determined using the calculations of the Purchase Price Components pursuant to Section 1.3 :
(a)      The Base Purchase Price, plus
(b)      the Closing Cash, plus
(c)      the Working Capital Surplus (if any), minus
(d)      the Working Capital Shortfall (if any), minus
(e)      the Earnout Payments, minus

1

(f)      the Closing Indebtedness, minus
(g)      the FAR Payments, minus
(h)      the Company Transaction Cost, minus
(i)      the Pontoon Adjustment.
1.3      Reference Balance Sheet; Working Capital; Debt Payoff Letters .
(a)      Reference Balance Sheet . At least 3 business days prior to the Closing Date, the Company will prepare and deliver to Buyer (i) a preliminary unaudited consolidated balance sheet of the Company and its Subsidiaries as of the open of business on the Closing Date (the “ Reference Balance Sheet ”), (ii) a good faith estimate of the amount and calculation of the Closing Working Capital, each of the Purchase Price Components and the Purchase Price and accompanied by a certificate of the chief financial officer of the Company to that effect (the items in clauses (i) and (ii), collectively, the “ Estimated Closing Statement ”), and (iii) the Allocation Schedule. The Company will prepare the Reference Balance Sheet in accordance with the Accounting Standards. Buyer shall have the right to review the Estimated Closing Statement and such supporting documentation or data as Buyer may reasonably request and to discuss them with the Company; provided that the failure to include in the Estimated Closing Statement any changes proposed by Buyer, or the acceptance by Buyer of the Estimated Closing Statement, or the consummation of the Closing, shall not limit or otherwise affect Buyer’s rights under this Agreement, including to include such changes or other changes in the Closing Statement (in accordance with this Agreement), or constitute an acknowledgment by Buyer of the accuracy of the Estimated Closing Statement.
(b)      Working Capital . If the Closing Working Capital is less than $4,622,250 (the “ Working Capital Target ”), the amount by which the Closing Working Capital is less than the Working Capital Target is referred to as the “ Working Capital Shortfall ”. If the Closing Working Capital is greater than the Working Capital Target, the amount by which the Closing Working Capital is greater than the Working Capital Target is referred to as the “ Working Capital Surplus ”.
(c)      Debt Payoff Letters . At least three business days prior to the Closing, the Company shall provide to Buyer customary, fully-executed payoff letters in form and substance reasonably satisfactory to Buyer (“ Debt Payoff Letters ”) with respect to all Indebtedness under the Debt Arrangements, setting forth the amounts required to repay all such Indebtedness owing as of the Closing (including principal, premiums, interest, fees and other charges) (“ Debt Payoff Amounts ”).

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1.4      Payment of Purchase Price; Escrow Release .
(a)      Payment of Purchase Price . At the Closing, Buyer will pay or cause to be paid to Sellers, apportioned among them as specified in a schedule that sets forth (x) such apportionment, (y) the calculations thereof, and (z) each Seller’s Pro Rata Interest (the “ Allocation Schedule ”), an aggregate amount in cash equal to the Purchase Price (for clarity, determined using the calculations of the Purchase Price Components pursuant to Section 1.3 ) less (i) $1,000,000 (the “ Purchase Price Escrow Amount ”), (ii) 1.0% of the Base Purchase Price (the “ Indemnity Escrow Amount ” and together with the Purchase Price Escrow Amount, the “ Escrow Amounts ”) and (iii) $1,000,000 (the “ MBUU Share Amount ”), and will deposit or cause to be deposited with BNY Mellon, National Association (the “ Escrow Agent ”), pursuant to the Escrow Agreement attached to this Agreement as Exhibit 1.4(a) (the “ Escrow Agreement ”), the Escrow Amounts, which the Escrow Agent will hold in separate escrow accounts (the “ Purchase Price Escrow Account ” and the “ Indemnity Escrow Account ”, respectively) and disburse in accordance with the terms of the Escrow Agreement and this Agreement. Buyer will make all payments by wire transfer of immediately available funds to such bank accounts as Sellers or the Escrow Agent designate in writing, as applicable, at least three business days prior to the Closing Date. Sellers agree that Buyer shall be entitled to rely on the Allocation Schedule, Buyer has no obligation to investigate, verify or confirm any item set forth in the Allocation Schedule, and Buyer shall have no liability to any Person for following or relying on the matters set forth on the Allocation Schedule.
(b)      Escrow Accounts . The interest, earnings and income that accrues upon the Escrow Amounts, if any, during the period of time during which they are held in the Escrow Accounts shall be deemed to become part of the applicable Escrow Amount. The release of funds from each Escrow Account shall be governed by the Escrow Agreement and the terms of this Agreement. For Tax reporting purposes, all such interest, earnings and income, if any, shall be reported for tax purposes as belonging to Buyer, and Buyer and Sellers shall (promptly after Buyer’s request) direct the Escrow Agent to distribute to Buyer a corresponding Tax distribution from the applicable Escrow Account sufficient to pay the applicable Taxes owing in respect of a corporation resident in Tennessee.
(c)      Escrow Release .

(1)	Purchase Price Escrow Release . As soon as reasonably practicable (but in any event within three business days) after the Closing Working Capital and each of the Purchase Price Components have become final and binding in accordance with Section 1.5 , Buyer and Sellers shall direct the Escrow Agent to release to Sellers in accordance with their relative Pro Rata Interests all of the remaining Purchase Price Escrow Amount, if any, in excess of any portion of the Purchase Price Escrow Amount that is to be released by the Escrow Agent to Buyer to settle the payment of any Overstatement pursuant to Section 1.5(d)(ii) .	

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(2)	Indemnity Escrow Release . As soon as reasonably practicable (but in any event within three business days) following the date that is 12 months after the Closing Date (the “ Indemnity Escrow Period ”), Buyer and Sellers shall direct the Escrow Agent to distribute the balance of the Indemnity Escrow Amount, if any, to Sellers in accordance with their relative Pro Rata Interests in excess of any portion of the Indemnity Escrow Amount (the “ Retained Amount ”) calculated pursuant to the following sentence with respect to all unresolved claims by Buyer Parties for Losses specified in any indemnity notice delivered to Sellers before the expiration of the Indemnity Escrow Period (the “ Unresolved Claims ”). If there are any Unresolved Claims as of the expiration of the Indemnity Escrow Period, then all or a portion (as applicable) of the Indemnity Escrow Amount that equals the total amount of Losses then being claimed by Buyer Parties in all such Unresolved Claims shall be retained in the Indemnity Escrow Account, and as soon as reasonably practicable (but in any event within three business days) following resolution of each such Unresolved Claim and the payment of all Losses required to be paid in connection with the resolution of each such Unresolved Claim from the Indemnity Escrow Amount, Buyer and Sellers shall direct the Escrow Agent to distribute to Sellers in accordance with their relative Pro Rata Interests any portion of the remaining amount in the Indemnity Escrow Account, if any, in excess of the Retained Amount for all of the remaining Unresolved Claims.	
1.5      Post-Closing Adjustments .
(a)      Closing Date Balance Sheet . As soon as practicable and in any event no later than 60 days after the Closing Date, Buyer will cause to be prepared and delivered to Sellers (i) the final unaudited consolidated balance sheet of the Company and its Subsidiaries as of the open of business on the Closing Date (the “ Closing Date Balance Sheet ”) and (ii) the amount and calculation of the Closing Working Capital, each of the Purchase Price Components and the Purchase Price (but, for clarity, determined using Buyer’s calculations of the Purchase Price Components pursuant to this Section 1.5(a) in lieu of the estimates of the Purchase Price Components determined pursuant to Section 1.3 ) and accompanied by a certificate of an authorized officer of Buyer to that effect (the items in clauses (i) and (ii), collectively, the “ Closing Statement ”). Buyer will prepare or cause to be prepared the Closing Date Balance Sheet in accordance with the Accounting Standards.
(b)      Statement of Objection . Unless within 30 calendar days after receipt of the Closing Statement Sellers deliver to Buyer a statement describing their objections to the Closing Statement (a “ Statement of Objection ”), the amount of the Closing Working Capital and each of the Purchase Price Components and the Purchase Price as reflected on the Closing Statement will be deemed final and binding on the Parties.

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(c)      Dispute Resolution .

(1)	If Sellers deliver to Buyer a timely Statement of Objection, Buyer and Sellers and their respective independent accountants and financial or legal advisors will attempt in good faith to resolve such dispute within 15 calendar days after receipt by Buyer of such Statement of Objection. If Buyer and Sellers are unable to resolve the dispute within 15 days, a nationally recognized accounting firm mutually agreed to by such Parties (or if they cannot agree within 10 days thereafter, an independent nationally recognized accounting firm selected by the mutual agreement of the accounting firm designated by Buyer and the accounting firm designated by FE II, Inc., or if they cannot agree, an independent nationally recognized accounting firm selected by the arbitrator pursuant to Section 12.8 ) (the “ Arbitrator ”) will be retained to resolve the matters remaining in dispute (the “ Disputed Items ”) in a written decision as soon as reasonably practicable but in no event later than 30 days after its retention. It is the intent of Buyer and Sellers that in connection with the process set forth in this Section 1.5(c) and the activities of the Arbitrator in connection therewith, no formal arbitration rules shall be followed (including rules with respect to procedures and discovery). Notwithstanding anything to the contrary in this Agreement, the scope of the Arbitrator’s engagement shall be limited to resolving the Disputed Items in accordance with, and by application of, the terms (including the applicable definitions) of this Agreement, and the Arbitrator shall have no authority over any other disagreement (including questions of law, interpretation of contract and fraud). Under no circumstances shall the Arbitrator award a greater amount in respect of any Disputed Item than the amount in dispute. The fees and expenses of the Arbitrator will be shared equally by Sellers and Buyer.	

(2)	Buyer and Sellers will furnish to the Arbitrator such available documents and information relating to the Disputed Items (including the books and records of the Cobalt Companies) as the Arbitrator may reasonably request to verify the accuracy of the Closing Date Balance Sheet and the determination of the Closing Working Capital and each of the Purchase Price Components. The determination of the Arbitrator as to the Closing Working Capital and each of the Purchase Price Components will constitute an arbitral award that is final and binding upon the Parties and the Escrow Agent and may be entered as a judgment in any court of competent jurisdiction.	

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(d)      Adjustment Payments . After the determination of the final Closing Working Capital and Purchase Price Components in accordance with this Section 1.5 , the Purchase Price will be recomputed using such final Closing Working Capital and Purchase Price Components in lieu of the estimates of the Purchase Price Components determined pursuant to Section 1.3 , and:

(1)	If the calculation of the Purchase Price using such final Closing Working Capital and Purchase Price Components exceeds the Purchase Price determined at Closing (the amount of such excess is referred to as the “ Understatement ”), then Buyer will pay the amount of the Understatement to Sellers in accordance with their relative Pro Rata Interests within 10 days after the Closing Working Capital and Purchase Price Components are finally determined.	

(2)	If the calculation of the Purchase Price using such final Closing Working Capital and Purchase Price Components is less than the Purchase Price determined at Closing (the amount of such difference is referred to as the “ Overstatement ”), then the Parties will direct the Escrow Agent to disburse to Buyer the amount of the Overstatement from the Purchase Price Escrow Account, and, to the extent the amount in the Purchase Price Escrow Account is less than the amount of the Overstatement, then Sellers will pay such shortfall to Buyer, in each case, within 10 days after the Closing Working Capital and Purchase Price Components are finally determined.	
1.6      Withholding . Notwithstanding anything in this Agreement to the contrary, Buyer (or its designees) shall be entitled to withhold and deduct, or cause to be withheld and deducted, from the consideration otherwise payable pursuant to this Agreement, such amounts as are required to be deducted and withheld with respect to the making of such payment under applicable Law. To the extent that amounts are so deducted or withheld and remitted to the appropriate taxing authority, such amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction and withholding was made.
2.      Closing.
2.1      The Closing; Closing Date . The closing of the purchase and sale of the Units contemplated by this Agreement (the “ Closing ”) will take place by remote communication at 9:00 a.m. Central Daylight Time on the second business day following the satisfaction or waiver of all conditions to the obligations of the Parties to consummate the transactions contemplated by this Agreement set forth in Article 6 (other than conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver thereof at the Closing) or such other time, place, and date as Buyer and Sellers may mutually determine in writing; provided that the Closing shall in no event occur before July 3, 2017 without the prior written consent of Buyer. The date on which the Closing occurs is referred to herein as the “ Closing Date ”.

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2.2      Deliverables at the Closing . Subject to the terms and conditions set forth in this Agreement, at the Closing:
(a)      Buyer will:

(1)	pay or cause to be paid the Purchase Price, less the Escrow Amounts and less the MBUU Share Amount, in accordance with Section 1.4(a) ;	

(2)	deposit or cause to be deposited the Escrow Amounts with the Escrow Agent in accordance with Section 1.4(a) ;	

(3)	pay or cause to be paid the Earnout Payments to the Persons specified in Schedule 2.2(a)(3) ;	

(4)	pay or cause to be paid the FAR Payments and Company Bonus Payments to the Company, and the Company shall then pay the FAR Payments to the Persons specified in Schedule 3.6(c) and pay the portion of the Company Bonus Payments specified in Schedule 2.2(a)(4) to the Persons specified therein who are employees of the Cobalt Companies as of Closing, in each case, through its payroll system no later than 10 days following the Closing Date, subject to deduction for all amounts required or permitted to be withheld under any applicable Law and, for clarity, such payments to the Persons specified on such Schedules will not include (and the Company will instead pay to the applicable Governmental Authority) the employer portion of any payroll, social security, unemployment or similar Tax in respect of such payments;	

(5)	pay or cause to be paid the Debt Payoff Amounts, in accordance with the instructions provided in the applicable Debt Payoff Letters;	

(6)	pay or cause to be paid the specified portions of the Company Transaction Cost (other than the Company Bonus Payments) to the Persons specified in the Estimated Closing Statement; provided that any Company Transaction Cost that is compensatory in nature with respect to a Cobalt Company employee shall be paid to the Company, and the Company shall then pay such Company Transaction Cost through its payroll system to such Persons no later than 10 days following the Closing Date, subject to deduction for all amounts required to be withheld under applicable Tax law;	

(7)	pay the full remaining premium payable to bind the R&W Insurance Policy, including any underwriting costs, brokerage commissions, and other fees and expenses to bind such policy, and deliver to Sellers the conditional binder with respect to the R&W Insurance Policy; and	

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(8)	deliver to Sellers the Escrow Agreement, duly executed by Buyer.	
(b)      Sellers will deliver to Buyer:

(1)	duly executed instruments of assignment with respect to each Seller’s Units in form attached to this Agreement as Exhibit 2.2(b)(1) , together with the original certificates representing such Units;	

(2)	(A) a copy of the Charter Documents of each of the Cobalt Companies certified as of a recent date by an authorized officer of each such Cobalt Company, (B) certificates of good standing with respect to the Cobalt Companies issued by the responsible Governmental Authority of the jurisdictions of their respective formation or incorporation, dated as of a date not more than 10 business days prior to the Closing Date and (C) copies of all of the manager or board and member or stockholder resolutions of the Cobalt Companies adopted in connection with the transactions contemplated by this Agreement certified by an authorized officer of each such Cobalt Company;	

(3)	a resignation letter (or other evidence of removal) in form and substance reasonably satisfactory to Buyer, effective as of the Closing, of each officer, manager and director of the Cobalt Companies and the employees of the Company specified in Schedule 2.2(b)(3) ;	

(4)	all books and records of the Cobalt Companies to the extent not already in the possession of the Cobalt Companies;	

(5)	a certificate from each Seller under Section 1445(b)(2) of the Code in form and substance reasonably satisfactory to Buyer providing that such Seller is not a foreign person;	

(6)	the Escrow Agreement, duly executed by Sellers and the Escrow Agent;	

(7)	evidence in form and substance reasonably satisfactory to Buyer of the termination of all Contracts between any Cobalt Company, on the one hand, and any Insider, on the other hand, or otherwise relating to an Insider, in each case, set forth on Schedule 2.2(b)(7) ;	

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(8)	evidence of the receipt of all consents, the giving of all notices, and the making of all filings set forth on Schedule 2.2(b)(8) , in each case, in form and substance reasonably satisfactory to Buyer;	

(9)	copies of fully-executed releases, terminations and discharges of any Liens under the Debt Arrangements, in each case, in form and substance reasonably satisfactory to Buyer, to be held in escrow until satisfaction of its obligation to pay or cause to be paid the Debt Payoff Amount;	

(10)	evidence of valid releases of the Liens listed on Schedule 2.2(b)(10) , in each case, in form and substance reasonably satisfactory to Buyer; and	

(11)	the License Agreement attached to this Agreement as Exhibit 2.2(b)(11) , duly executed by the Company and the other parties thereto.	
(c)      The Company will deliver evidence in form and substance reasonably satisfactory to Buyer of the transfer to Seller(s) of those assets listed on Schedule 2.2(c) .
(d)      Malibu Boats, Inc. will issue to William Paxson St. Clair, Jr. a number of shares of its common stock (the “ MBUU Common Stock ”) equal to the quotient obtained by dividing (i) the MBUU Share Amount by (ii) the closing price of the shares of MBUU Common Stock on the NASDAQ on the trading day immediately preceding the day of the press release that is issued in connection with the execution of this Agreement pursuant to Section 6.4 .
3.      Company’s Representations and Warranties . The Disclosure Schedule is arranged in sections corresponding to the lettered and numbered sections contained in this Article 3 ; provided , however , that a matter disclosed in reference to any particular section or subsection will be deemed to be disclosed for purposes of any other section or subsections of this Article 3 , if the matter is disclosed in such a way to make its relevance to such other sections or subsections reasonably apparent from a plain text reading of such matter, but the mere inclusion or listing of a document shall not be adequate to disclose an exception to a representation or warranty, unless the representation or warranty has to do with the existence of the document itself. Except as otherwise provided in the Disclosure Schedule, the Company represents and warrants to Buyer as follows:
3.1      Organization and Corporate Power . Each Cobalt Company is duly organized, validly existing, and in good standing under the laws of its jurisdiction of organization and is qualified to do business in every jurisdiction in which the nature of its business or its ownership of property requires it to be qualified, except where the failure to be so qualified would not be material. Schedule 3.1 lists all of the jurisdictions in which the Cobalt Companies are qualified to do business as a foreign entity. Each Cobalt Company has full power and authority and all licenses, permits, and authorizations necessary to own, lease, and operate its properties and business and to conduct its business as currently conducted. True, complete and correct copies of the Charter Documents of each Cobalt Company have been made available to Buyer. No Cobalt Company is in default or violation of its Charter Documents.

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3.2      Authorization of Transactions . The Company has full power and authority to execute and deliver this Agreement and each Ancillary Agreement to which it is party, to perform its obligations under this Agreement and each such Ancillary Agreement and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and each such Ancillary Agreement, and the consummation of the transactions contemplated by this Agreement and each such Ancillary Agreement, have been duly authorized by all requisite action on the part of the Company, and no other proceedings on the part of the Company are necessary to approve or authorize the execution and delivery of this Agreement and each such Ancillary Agreement or the consummation of the transactions contemplated by this Agreement and each such Ancillary Agreement, and this Agreement and each such Ancillary Agreement constitute the valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms and conditions, subject only to the effect of bankruptcy, insolvency, reorganization or other similar laws affecting creditors’ rights generally and to general principles of equity (whether considered in proceedings at law or in equity) (collectively, “ Bankruptcy Exceptions ”).
3.3      Non-Contravention .
(a)      No Breach . Except as set forth in Schedule 3.3 , neither the execution and the delivery of this Agreement or each Ancillary Agreement to which the Company is party, nor the consummation of the transactions contemplated by this Agreement or each such Ancillary Agreement will:

(1)	violate any Law or Order to which any Cobalt Company is subject or is otherwise bound;	

(2)	violate any provision of any Cobalt Company’s Charter Documents;	

(3)	in any material respect, result in a breach of or constitute a default under (with or without the giving of notice or lapse of time or both) any material agreement, contract, lease, license, instrument, or other arrangement (each, a “ Contract ”) to which any Cobalt Company is a party or by which any Cobalt Company is bound; or	

(4)	result in the imposition of any Lien upon any assets or properties of any Cobalt Company (other than Permitted Liens), or result in any material respect in the acceleration, modification, loss or impairment of any rights or obligations of any Cobalt Company (with or without the giving of notice or lapse of time or both).	
(b)      No Consent or Notice . Except as set forth in Schedule 3.3 , no Cobalt Company is required to give any notice to, make any filing with, or obtain any authorization, consent or approval (or any waiver of any of the foregoing) of any Governmental Authority or any other Person for the Parties to enter into this Agreement or any of the Ancillary Agreements or to consummate the transactions contemplated hereby or thereby, except for any notice, filing, authorization, consent, or approval the absence of which could not, individually or in the aggregate, reasonably be expected to be material.

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3.4      Insider Interests . Except as set forth in Schedule 3.4 , no Restricted Party and no officer, manager, director, or Affiliate of any Cobalt Company (other than another Cobalt Company), and, to the Company’s knowledge, no Affiliate or relative of any of the foregoing (each Restricted Party, each officer, manager, director, and Affiliate of any Cobalt Company, and each Affiliate and relative of any of the foregoing, an “ Insider ”), (a) has any agreement with any Cobalt Company or any interest in any asset or property (real, personal or mixed, tangible or intangible) used by or pertaining to any Cobalt Company or any interest in any customer, supplier, lessor, lessee, or other business partner of any Cobalt Company or other Person affiliated with any Cobalt Company or in any competitor of any Cobalt Company, (b) is owed amounts by any Cobalt Company (other than compensation to employees for the current pay period) or (c) is indebted to any Cobalt Company.
3.5      Brokers’ Fees . No Cobalt Company has any liability or obligation to pay any fees or commissions or other amounts to any broker, finder, or agent with respect to the transactions contemplated by this Agreement, except with respect to Raymond James & Associates, Inc., all of which will be borne by Sellers as a Company Transaction Cost.
3.6      Capitalization; Subsidiaries .
(a)      Capitalization . The Unitholders are the sole legal and beneficial owner of the Units set forth opposite their names on Schedule 3.6(a) , free and clear of all Liens, except for restrictions on transfer (i) arising under applicable securities Laws or (ii) set forth in the Limited Liability Company Agreement. All of the Units are duly authorized, validly issued, fully-paid and non-assessable and were issued in compliance with applicable Laws and not in violation or breach of any preemptive or similar rights. Other than the Units set forth on Schedule 3.6(a) and the FARs set forth on Schedule 3.6(c) , no other units or other Equity Interests in the Company are issued, outstanding or reserved.
(b)      Subsidiaries . Except as stated in Schedule 3.6(b) , the Company has no Subsidiaries. All outstanding Equity Interests of each Subsidiary of the Company are owned of record and beneficially by one or more of the Cobalt Companies as set forth on Schedule 3.6(b) , free and clear of all Liens, other than Permitted Liens. All of the outstanding Equity Interests of each Subsidiary of the Company are duly authorized, validly issued, fully-paid and non-assessable and were issued in compliance with applicable Laws and not in violation or breach of any preemptive or similar rights. Except for Equity Interests owned by a Cobalt Company, no other Equity Interests in any Subsidiary of the Company have been authorized, have been issued, or are outstanding or reserved. Except as stated in Schedule 3.6(b) , no Cobalt Company is a partner in any partnership, a member of any joint venture, or the holder of any Equity Interests in any Person (other than another Cobalt Company).

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(c)      FARs . Schedule 3.6(c) sets forth a true, complete and correct list, as of the date hereof, of the outstanding FARs and any FARs that have been exercised or deemed exercised prior to the date hereof for which there remain Liabilities, including for each such award of FARs: (i) the name of the holder of such award, (ii) the grant date of such award, (iii) the number of FARs covered or previously covered by such award, (iv) the number of FARs covered by such award or previously covered by such award that are vested, (v) the vesting schedule for any outstanding unvested FARs covered by such award, (vi) the payment schedule (including the estimated amount of each remaining installment) for any FARs that have already been exercised or deemed exercised prior to the date hereof, (vii) the threshold amount of each award and (viii) the FAR Payment payable in respect of each such award.
(d)      Subscription and Other Obligations . Except for the FARs set forth on Schedule 3.6(c) and the obligations that will be discharged by payment of the Earnout Payments pursuant to Section 2.2(a)(3) , there are no options, warrants, subscription rights or other agreements or commitments to which any Cobalt Company is party or which are binding upon any Cobalt Company providing for the issuance, disposition, or acquisition of any Equity Interest in any Cobalt Company (other than this Agreement). There are no voting trusts, proxies, or other agreements or understandings with respect to the voting, transfer or registration of any Equity Interests in any Cobalt Company. Except for obligations that will be discharged by payment of the FAR Payments pursuant to Section 2.2(a)(4) and by payment of the Earnout Payments pursuant to Section 2.2(a)(3) , and except as provided in the Limited Liability Company Agreement with respect to the Preferred Units, no Cobalt Company is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire or make any payment in respect of any Equity Interests in any Cobalt Company. Schedule 3.6(d) sets forth all Equity Interests of any Cobalt Company that have been terminated, repurchased, redeemed, cancelled, or otherwise ceased to be outstanding during the five years prior to the Agreement Date as well as the then holders thereof, and following the Closing (subject to payment of the FAR Payments pursuant to Section 2.2(a)(4) and payment of the Earnout Payments pursuant to Section 2.2(a)(3) ), no Cobalt Company will have any Liability in respect of any such Equity Interests or the FAR Plan. There is no Liability for distributions accrued and unpaid by any Cobalt Company. All distributions and redemptions by the Cobalt Companies have been made in accordance with applicable Law.
3.7      Financial Statements; Indebtedness .
(a)      Schedule 3.7(a) sets forth the following financial statements (collectively the “ Financial Statements ”): (A) audited consolidated balance sheets and statements of income, members’ deficit and cash flows of the Company and its Subsidiaries as of and for the fiscal years ended September 30, 2016, September 30, 2015 and September 30, 2014 for the Cobalt Companies, in each case, together with the independent auditor’s unqualified report thereon; and (B) unaudited balance sheets and statements of income and cash flows of each of the Cobalt Companies (the “ Interim Financial Statements ”) as of and for the month of April ended April 30, 2017 and the month of May ended May 28, 2017. The Financial Statements have been prepared in accordance with GAAP throughout the periods covered, are derived from and are in accordance with the books and records of the Cobalt Companies, and present fairly the financial condition of the Cobalt Companies as of such dates and the results of operations and cash flows of the Cobalt Companies for such periods; provided that the Interim Financial Statements do not contain footnotes and do not include normal year-end and audit adjustments

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that are not material. The unaudited balance sheet of the Cobalt Companies as of May 28, 2017 is referred to as the “ Latest Balance Sheet ”.
(b)      Schedule 3.7(b) sets forth, as of the date hereof, all Indebtedness.
3.8      Events Subsequent . Since September 30, 2016, the Cobalt Companies have at all times operated in all material respects in the ordinary course of business consistent with past practice and there has not been any change, event, circumstance or effect that has had, or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on the business, assets, properties, condition (financial or otherwise) or operating results of the Cobalt Companies, taken as a whole. Without limiting the foregoing, except as disclosed on Schedule 3.8 or as expressly provided in this Agreement, since September 30, 2016:
(a)      the Cobalt Companies have not effected any amendment or change to their respective Charter Documents or adopted a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of or involving any Cobalt Company;
(b)      the Cobalt Companies have not acquired, sold, licensed, leased, transferred, assigned or otherwise disposed of any of their assets, tangible or intangible, other than in the ordinary course of business or as contemplated in Section 2.2(c) ;
(c)      the Cobalt Companies have not entered into any transaction with any Insider or, other than in the ordinary course of business, any other third party, other than transactions involving amounts that do not exceed $50,000 in the aggregate per annum;
(d)      the Cobalt Companies have not (i) redeemed or purchased, directly or indirectly, any of their Equity Interests, (ii) issued, sold, or transferred any of their Equity Interests, (iii) subdivided, split, reclassified, combined or reversed split any of their Equity Interests or (iv) effected any recapitalization or restructuring;
(e)      the Cobalt Companies have not (i) borrowed any amount or issued or exchanged any notes or other evidences of any Indebtedness or incurred or become subject to Indebtedness, except under the Debt Arrangements and current liabilities incurred in the ordinary course of business consistent with past practice, (ii) directly or indirectly guaranteed the Indebtedness of any third party or (iii) incurred any Lien (other than a Permitted Lien);

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(f)      the Cobalt Companies have not made (i) any capital expenditure outside the ordinary course of business or (ii) any loan, advance or capital contributions to, or investments in any other Person (other than investments in, and capital contributions to, other Cobalt Companies or immaterial loans or advances to non-executive employees in the ordinary course of business);
(g)      except in the ordinary course of business or as required by applicable Law, the Cobalt Companies have not made or granted any bonus or any wage or salary increase to any employee or group of employees (except as required by pre-existing Material Contracts described on Schedule 3.14 ), or made or granted any increase in compensation under any Benefit Plan, or amended or terminated any existing Benefit Plan or adopted any new Benefit Plan;
(h)      the Cobalt Companies have not (i) made, changed or revoked any election in respect of Taxes, (ii) adopted or changed any method of Tax accounting or annual reporting, (iii) settled or compromised any federal, state, local or non U.S. Tax Liability, claim or assessment, (iv) filed any amended Tax Return, (v) entered into any closing agreement relating to any Tax, (vi) agreed to an extension or waiver of a statute of limitations period applicable to any Tax claim or assessment, (vii) failed to pay any Tax when due and payable, (viii) surrendered any right to claim a Tax refund or (ix) changed any material method of accounting or accounting practice, other than such changes required by applicable Law or GAAP;
(i)      the Cobalt Companies have not entered into any Contract of a type described in the definition of Material Contract (other than in the ordinary course of business), and there has not been any material change to, or extension or termination of, or waiver of any material rights under, any such Contract (other than in the ordinary course of business);
(j)      the Cobalt Companies have not acquired (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof or collection of assets constituting all or substantially all of a business or business unit;
(k)      the Cobalt Companies have not waived, settled or compromised any material right or Proceeding or initiated any material Proceeding, excluding warranty claims by retail customers with respect to a particular boat so long as the aggregate of all paid claims with respect to such boat are less than (in the aggregate) $10,000; and

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(l)      the Cobalt Companies have not authorized or committed to do any of the foregoing.
3.9      Absence of Undisclosed Liabilities . The Cobalt Companies have no material Liabilities, except for:
(a)      Liabilities reflected on the Latest Balance Sheet;
(b)      Liabilities incurred in the ordinary course of business since the date of the Latest Balance Sheet, none of which are material, individually or in the aggregate; and
(c)      executory obligations under any Contracts of a Cobalt Company, which obligations are not required under GAAP to be reflected on a consolidated balance sheet of the Company (including in the notes thereto).
3.10      Legal Compliance; Permits .
(a)      Except as set forth on Schedule 3.10(a) , the Cobalt Companies have complied and are in compliance in all material respects with all applicable Laws, and no Proceeding has been filed or is pending or, to the Company’s knowledge, has been threatened, against the Cobalt Companies alleging any failure to so comply. The Company has made available to Buyer true, correct and complete copies of all of the policies of the Cobalt Companies related to legal compliance, employee training programs, ethical business practices and codes of conduct, and the Cobalt Companies and their operations are, and at all times in the past five years have been, in compliance in all material respects with all such policies. There is no, and during the past three years there has not been any, internal investigation pending by any Cobalt Company regarding any potential non-compliance with such policies or any Law or Order.
(b)      The Cobalt Companies have all material Permits necessary to own, lease and operate their assets and properties and to conduct their businesses, a true, correct and complete list of which is set forth on Schedule 3.10(b) . All applications for, or renewals of, all such Permits have been timely filed and made and no such Permit will expire or be terminated as a result of the consummation of the transactions contemplated by this Agreement. All such Permits are in full force and effect and will remain in full force and effect immediately following the Closing, and the Cobalt Companies are in compliance in all material respects with all such Permits. There is no Proceeding pending, or to the knowledge of the Company, threatened, nor has any Cobalt Company received any written notice in the past three years from any Governmental Authority, to revoke, cancel, refuse to renew or adversely modify any such Permit or alleging any failure to comply with any such Permit.
3.11      Title to Assets . The Cobalt Companies own good and marketable title, free and clear of all Liens, other than Permitted Liens, to all of the properties and assets reflected on the Latest Balance Sheet as owned, except for inventory and personal property which have been disposed of since the date of the Latest Balance Sheet in the ordinary course of business and except as set forth on Schedule 3.11 and Schedule 2.2(c) . Except as set forth on Schedule 3.11 , the facilities, machinery, equipment, and other tangible assets of the Cobalt Companies are in good operating condition and repair (except ordinary wear and tear), are located on Company Properties (except goods in transit or located elsewhere in the ordinary course of business), and are not in need in any material respect of renewal, renovation or replacement. The Cobalt Companies own good and marketable title, have a valid leasehold interest, or otherwise have the valid right to use all of the assets, properties and rights used by them, free and clear of all Liens other than

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Permitted Liens, and such assets, properties and rights are sufficient to allow the Cobalt Companies to continue to conduct their respective businesses after the Closing as they are currently conducted. Except as set forth on Schedule 3.11 , there are no facilities, services, employees, assets or properties which are used by any Cobalt Company that are shared with any other Person (other than another Cobalt Company).
3.12      Properties .
(a)      Lease and Subleases . Schedule 3.12(a) sets forth a true, correct and complete list of all real estate leases and subleases (collectively, the “ Leases ”) and each leased and subleased parcel of real property in which any Cobalt Company has a leasehold and/or subleasehold interest (collectively, the “ Leased Real Property ” and with the Real Property, the “ Company Property ”). Each of the Leases is in full force and effect and the Cobalt Companies hold a valid and existing leasehold or subleasehold interest under each of the Leases. Subject to Bankruptcy Exceptions, each Lease is legal, valid, binding, enforceable and in full force and effect, and neither the Cobalt Companies nor, to the Company’s knowledge, any other party to any Lease, is in breach or default thereof. To the Company’s knowledge, no event has occurred that, with notice or lapse of time or both, would constitute a material breach or default under any Lease or would lead to the termination, modification or acceleration of any Lease.
(b)      Real Property . Schedule 3.12(b)(i) sets forth a true, correct and complete list of the addresses for each parcel of Real Property. With respect to each parcel of Real Property, the Cobalt Companies own good and marketable fee simple title thereto, free and clear of all Liens, other than Permitted Liens. Schedule 3.12(b)(ii) sets forth a true, correct and complete list of any lease, sublease, license or similar agreement (any such lease, sublease, license or similar agreement, a “ Real Property Occupancy Agreement ”) that grants to any other Person any right to acquire, lease, use or occupy any Real Property or any portion thereof, other than those described in clause (vi) of the definition of Permitted Liens. Each of the Real Property Occupancy Agreements is in full force and effect and, subject to Bankruptcy Exceptions, is legal, valid, binding and enforceable, and neither the Cobalt Companies nor, to the Company’s knowledge, any other party thereto, is in material breach or default thereof. To the Company’s knowledge, no event has occurred that, with notice or lapse of time or both, would constitute a material breach or default under any Real Property Occupancy Agreement or would lead to the termination, modification or acceleration of any Real Property Occupancy Agreement.

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(c)      With respect to each Company Property: (i) the current use of such Company Property and the operation of the businesses of the Cobalt Companies thereon does not violate in any material respect any instrument of record or Contract affecting such Company Property, as applicable, or any applicable Law; (ii) except (A) for the Real Property Occupancy Agreements, (B) for the Leases, (C) as stated in Schedule 3.12(b)(i) and (D) for those described in clause (vi) of the definition of Permitted Liens, there are no leases, subleases, licenses, concessions or other Contracts, written or oral, granting to any Person the right to use or occupy any portion of such Company Property except in favor of the Cobalt Companies; and (iii) except pursuant to a Real Property Occupancy Agreement, there are no Persons in possession of such Company Property except the Cobalt Companies.
(d)      No part of any Company Property is subject to any building or use restrictions that would restrict or prevent the current use and operation of such Company Property, and each Company Property is properly and duly zoned for its current use, and such current use is a conforming use. No Governmental Authority having jurisdiction over any Company Property has issued or, to the knowledge of the Company, threatened to issue any notice or Order that adversely affects the use or operation of any Company Property, or requires, as of the date hereof or a specified date in the future, any repairs or alterations or additions or improvements thereto, or the payment or deduction of any money, fee, exaction or property.
(e)      There does not exist any actual or, to the knowledge of the Company, threatened or contemplated, condemnation or eminent domain proceedings that affect any Company Property or any part thereof, and no Cobalt Company has received any notice, oral or written, of the intention of any Governmental Authority or other Person to take or use any Company Property or any part thereof.
(f)      To the knowledge of the Company, there is not any actual or pending imposition of any assessments for public improvements with respect to any Company Property, and, to the knowledge of the Company, no such improvements have been constructed or planned that would be paid for by means of assessments upon any Company Property.
(g)      There exists no structural or other material defects or damages in or to any Company Property, whether latent or otherwise, and no Cobalt Company has received any written notice from any insurance company or bonding company of any defects or inadequacies in any Company Property, or any part thereof, which would adversely affect the insurability thereof or cause the imposition of extraordinary premiums or charges thereon or of any termination or threatened termination of any policy of insurance or bond. Except as stated in Schedule 3.12(g) , all water, gas, electrical, steam, compressed air, telecommunication, utility, sanitary and storm sewage lines and systems and other similar systems serving the Company Properties are fully operational and in working order and are sufficient to enable the Company Properties to continue to be used, occupied and operated in the manner currently being used, occupied and operated, and are supplied directly to the Company Properties by facilities of public utilities and are benefited by customary utility easements providing for the continued use and maintenance of such systems.

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(h)      Within the past three years, no Company Property or part thereof has suffered any damage by fire or other casualty that has not heretofore been restored in all material respects to its original condition. No portion of any Company Property is located in a special flood hazard area as designated by any Governmental Authority.
(i)      No Cobalt Company has received any notice from any insurance company that has issued a policy with respect to any Company Property requesting performance of any structural or other repairs or alterations to such Company Property that have not been heretofore completed by the Cobalt Companies.
(j)      No Company Property is dependent for its access, operation or utility on any land, building or other improvement not part of such Company Property.
(k)      Except as stated in Schedule 3.12(b)(i) , no Cobalt Company owns or holds, or is obligated under or party to, any option, right of first refusal or other contractual right to purchase, acquire, sell, assign or dispose of any real estate or any portion thereof or interest therein.
3.13      Tax Matters .
(a)      Tax Returns . Except as stated in Schedule 3.13(a) , within the past six years, the Cobalt Companies have timely filed (taking into account valid extensions) all Tax Returns which are required to be filed. Such Tax Returns are complete and accurate in all material respects and were prepared in compliance in all material respects with all applicable Laws. The Cobalt Companies have paid all Taxes due and payable by them (whether or not shown on any Tax Return). None of the Cobalt Companies currently is the beneficiary of any extension of time within which to file any Tax Return. Except as stated in Schedule 3.13(a)(i) , within the past five years no written claim has ever been made by any authority in a jurisdiction where the Cobalt Companies do not file Tax Returns that any Cobalt Company is or may be subject to taxation by that jurisdiction. Schedule 3.13(a)(ii) sets forth a list of all jurisdictions in which the Cobalt Companies file Tax Returns.
(b)      Tax Withholdings . The Cobalt Companies have withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor or other third party, and all forms required with respect thereto, including without limitation Forms W-2 and 1099 and corresponding or equivalent non-U.S. forms, have been properly completed and timely filed.

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(c)      The Company (i) has been treated as a partnership for U.S. federal Income Tax purposes since its formation and no election is pending to treat the Company as a corporation for any U.S. federal Income Tax purposes and (ii) has made a valid Code Section 754 election that is still in effect. Each of the other Cobalt Companies has the Tax classification set forth on Schedule 3.13(c) .
(d)      The Financial Statements contain adequate accruals in accordance with GAAP for all unpaid Taxes of the Cobalt Companies through the dates thereof, and none of the Cobalt Companies has incurred any Liability for Taxes subsequent to the date of the Latest Balance Sheet except in the ordinary course of business.
(e)      The Company has made available to Buyer true, correct and complete copies of all federal and state Income Tax Returns of the Cobalt Companies for all periods ending on or after December 31, 2013 and all other Tax Returns of the Cobalt Companies requested by Buyer in writing.
(f)      The assets of the Cobalt Companies are not subject to any Liens for unpaid Taxes, other than Permitted Liens.
(g)      No claim for any Taxes has been asserted against any of the Cobalt Companies that has not been resolved and/or paid in full, and there is no Tax audit or similar Proceeding now in progress, pending or, to the knowledge of the Company, threatened against or with respect to any of the Cobalt Companies. None of the Cobalt Companies has waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency, which waiver or extension is currently in effect.
(h)      None of the Cobalt Companies has engaged in a “ reportable transaction ”, as defined in Treasury Regulation Section 1.6011-4(b)(1).
(i)      Each of the Cobalt Companies is, and at all times in the last six years has been, in compliance in all material respects with all applicable escheat, abandoned property and other similar Laws, and none of the Cobalt Companies has any Liability under any escheat, abandoned property or any other similar Law (including, for the avoidance of doubt, any interest or penalties imposed with respect thereto).
(j)      All related party transactions involving the Cobalt Companies have been at arms’ length in compliance with Section 482 of the Code and the Treasury Regulations promulgated thereunder (or any similar provisions of state, local or foreign Law), and each of the Cobalt Companies has maintained documentation (including any applicable transfer pricing studies) in connection with such related party transactions in accordance with Sections 482 and 6662 of the Code and the Treasury Regulations thereunder (or any similar provision of state, local or foreign Law).

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(k)      The Company is not obligated to make any Tax distributions to its members following the Closing.
3.14      Contracts and Commitments .
(a)      Excluding this Agreement, Schedule 3.14(a) sets forth a list of all of the following Contracts to which a Cobalt Company is a party or is otherwise bound (collectively, “ Material Contracts ”):

(1)	Contracts for the employment of any officer, individual employee, or other Person or entity on a full-time, part-time, consulting or other basis, other than on an at-will basis with no severance or notice requirements, any Contracts providing severance or other termination benefits for any such Person, or any Contract relating to loans to or from executive officers, directors or Affiliates other than immaterial advances to such Persons made by a Cobalt Company in the ordinary course of business;	

(2)	Contracts requiring payment, or being reasonably likely to result in payment, by any party to the Contract of more than $150,000 annually or with a term of more than three years, other than (for purposes of this subclause (2)) any such Contract for the sale of inventory by a Cobalt Company to a dealer or distributor or for the purchase of inventory by a Cobalt Company from a supplier, in each case, in the ordinary course of business ( provided that, notwithstanding the foregoing, any such Contract with a supplier shall nonetheless be deemed a Material Contract);	

(3)	Contracts relating to (A) Indebtedness of the Cobalt Companies (including the borrowing of money) or (B) the mortgaging, pledging, or otherwise placing a Lien on any asset or group of assets of any Cobalt Company, other than Permitted Liens;	

(4)	Contracts relating to the lending or investing of funds other than immaterial advances to directors, managers, or employees made by a Cobalt Company in the ordinary course of business;	

(5)	Leases or other Contracts under which it is lessee of or holds or operates any property, real or personal, owned by any other party;	

(6)	Leases or other Contracts under which it is lessor of or permits any third party to hold or operate any property, real or personal, owned or controlled by it;	

(7)	Contracts involving Intellectual Property Rights that are material to any Cobalt Company (including, for clarity, Contracts that include an assignment, license, indemnification or agreement with respect to any such Intellectual Property Rights), excluding (A) non-disclosure agreements entered into the ordinary course of business that provided only limited rights to use and evaluate the confidential information disclosed thereunder; (B) Contracts for a non-exclusive license to commercially available off-the-shelf software or firmware (including software provided as a service) licensed under standard terms and not exceeding $25,000 in cost in the aggregate; (C) non-exclusive licenses to	

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vendors and service providers terminable at will by the Cobalt Company; and (D) contracts with employees covering Intellectual Property Rights created within the scope of their employment;

(8)	Contracts containing any covenant that in any way purports to restrict the right or freedom of any Cobalt Company to (A) engage in any business activity, (B) engage in any line of business or compete with any Person, (C) conduct any activity in any geographic area or (D) solicit any Person to enter into a business or employment relationship, or enter into such a relationship with any Person;	

(9)	Contracts with any dealer, distributor, sales representative or supplier required to be listed on Schedule 3.24 ;	

(10)	Contracts that involve a repurchase obligation with respect to products of the Cobalt Companies;	

(11)	Contracts that relate to the development or joint development of any products of the Cobalt Companies, other than employment agreements with employees of the Cobalt Companies;	

(12)	Contracts with any Insider;	

(13)	Contracts involving the waiver, compromise, or settlement of any material right or Proceeding within the past three years or for which a Cobalt Company has not fully performed as of the date hereof; or	

(14)	Contracts (A) that provide for any exclusivity arrangements, that provides for unexpired rights of first or last offer or that includes a provision of the type commonly referred to as a “most-favored nations”, “of the essence”, or “key man” provision, (B) that provide for a collective bargaining agreement or similar Contract with any labor union, works council or other labor organization, (C) that require payments upon a “change of control” of any Cobalt Company, (D) that are with a Governmental Authority, (E) that provide for material indemnification obligations by the Company of any Person (other than in the ordinary course with respect to the sale of products or services of the Cobalt Companies), (F) involving the establishment of, contribution to, or operation of a joint venture, partnership or other similar arrangement or otherwise relating to any investment made in any other Person or other acquisition, (G) involving a merger, consolidation or business combination or (H) appointing any agent to act on behalf of any Cobalt Company or granting any power of attorney by any Cobalt Company other than such appointments for international boat transfers in the ordinary course of business.	

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(b)      Effect of Each Material Contract . True, correct and complete copies of all Material Contracts (or written summaries of any oral Contracts), other than those described in the parenthetical at the end of Section 3.14(a)(2) , have been made available to Buyer. Except as stated in Schedule 3.14(b) , each Material Contract is (i) a legally valid, binding obligation of the Cobalt Company party thereto and, to the Company’s knowledge, each other party thereto, (ii) in full force and effect and (iii) enforceable in accordance with its terms against the Cobalt Company party thereto and, to the Company’s knowledge, each other party thereto, subject to the Bankruptcy Exceptions. The Cobalt Companies, and to the Company’s knowledge, each other party to each Material Contract, have performed all obligations required to be performed thereunder in all material respects and are not in default under or in breach of, or in receipt of any claim of default under or breach of, any Material Contract, in any material respect, and, to the Company’s knowledge, no event has occurred which with the passage of time or the giving of notice or both would result in a default, breach, or event of noncompliance under any such Material Contract, in any material respect, or that would allow any party to such Material Contract to terminate, modify, or accelerate any rights under any such Contract. There are no material disputes pending with respect to any Material Contract. To the knowledge of the Company, no Person intends to terminate or materially modify any Material Contract.
3.15      Insurance . Schedule 3.15 lists each insurance policy maintained by the Cobalt Companies with respect to its properties, assets, and businesses and any bonds related thereto. True, correct and complete copies of all such policies have been made available to Buyer. All of such insurance policies are in full force and effect, the Cobalt Companies have paid all premiums due through the Agreement Date, and the Cobalt Companies are not in default in any material respect with respect to their obligations under any of such insurance policies and have not received any notification of cancellation, non-renewal, or default of any of such insurance policies. In the past three years, (a) no Cobalt Company has been refused any insurance or had its coverage limited by any insurance carrier to which it has applied for insurance or suffered an involuntary cancellation of any insurance policy, (b) the Cobalt Companies have had in place insurance policies sufficient for compliance with all requirements of applicable Law and all Contracts to which any Cobalt Company was then a party or otherwise bound and (c) no Cobalt Company has received any notice that any insurer under any such policy is denying, questioning or disputing liability or coverage with respect to a claim thereunder.
3.16      Product Liabilities and Warranties .

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(a)      Each product designed, manufactured, sold, leased, provided or delivered by a Cobalt Company, and each service provided by a Cobalt Company, has been designed, manufactured, sold, leased, provided or delivered, as applicable, in conformity in all material respects with the specifications for such product or service, as applicable, and applicable contractual commitments, Laws and warranties. There are no material defects in any such product or service, and in the past six years (i) there have been no product recalls, post-sale notices or warnings or similar matters, or obligations thereof, with respect to any such product or service, and to the knowledge of the Company there is no reasonable basis for any of the foregoing, and (ii) no Cobalt Company has been required to file, or has filed, any notification or other report with or provide information to any Governmental Authority or product safety standards group concerning actual or potential defects or other hazards with respect to any such product or service, and, to the knowledge of the Company, there is no reasonable basis for any of the foregoing.
(b)      Schedule 3.16(b) sets forth a true, correct and complete list of (i) all boats sold by the Company for which the aggregate of all paid warranty claims in the past three years exceeded $10,000, as well as the aggregate of all such claims per boat, and (ii) all boats repurchased by the Company in the past three years due to warranty issues or other claims or disputes as well as the customer, issue, cost incurred to date, and status. Except as set forth on Schedule 3.16(b) , there are and within the past three years were no other warranty claims or disputes against or involving a Cobalt Company or any other material claims or disputes against or involving a Cobalt Company, in any case, with respect to any product or service designed, manufactured, sold, leased or delivered by a Cobalt Company (excluding warranty claims by retail customers with respect to a particular boat so long as the aggregate of all paid warranty claims with respect to such boat are less than (in the aggregate) $10,000 (such excluded claims, “ Excluded Warranty Claims ”)).
(c)      Within the past five years, no Governmental Authority has alleged that any product designed, manufactured, sold, or leased by any Cobalt Company is defective or unsafe or fails to meet any product warranty or any standards promulgated by any Governmental Authority that has not been adequately remedied.
(d)      Schedule 3.16(d) sets forth the standard forms of warranties used by the Cobalt Companies. Except as set forth in Schedule 3.16(d) or required by applicable Law (including warranties implied by Law if, and only to the extent that, applicable Law prohibits the waiver thereof), no Cobalt Company has given to any Person any guaranty or warranty, right of return, or other indemnity or remedy relating to the products designed, manufactured, sold, leased, provided or delivered by any Cobalt Company or the services provided by any Cobalt Company. No Cobalt Company has any Liability with respect to products or services of the Cobalt Companies except as set forth in such standard forms of warranties or required by applicable Law (including warranties implied by Law if, and only to the extent that, applicable Law prohibits the waiver thereof).

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3.17      Intellectual Property .
(a)      Schedule 3.17(a) sets forth a true, correct and complete list of all (i) Intellectual Property Rights owned (in whole or in part) by or filed in the name of a Cobalt Company that are the subject of any registration or application with any Governmental Authority, including, for each item, the name of the owner(s) of record, the applicable jurisdiction, status, application or registration number and date of application, registration or issuance, as applicable (all items required to be listed, “ Registered Intellectual Property Assets ”), (ii) all material unregistered Trademarks that are owned (in whole or in part) by a Cobalt Company and (iii) any pending or, to the knowledge of the Company, threatened Proceedings (including interference, opposition, or re-examination Proceedings) before any Governmental Authority (including the U.S. Patent and Trademark Office or equivalent authority anywhere in the world) in which any of the Registered Intellectual Property Assets are involved, but excluding office actions or administrative actions that do not materially restrict the use, transfer, or licensing thereof by the Cobalt Companies, or which reasonably could not be expected to materially and adversely affect the validity, use, or enforceability.
(b)      No Registered Intellectual Property Asset is subject to any Proceeding or outstanding Order materially restricting the use, transfer, or licensing thereof by the Cobalt Companies, or which reasonably could be expected to materially and adversely affect the validity, use, or enforceability of such Registered Intellectual Property Asset.
(c)      The Cobalt Companies exclusively own and possess, all right, title and interest in and to the Company Owned Intellectual Property Rights, free and clear of all Liens (other than Permitted Liens). No Cobalt Company has: (i) granted to any Person any exclusive licenses to Company Owned Intellectual Property Rights, (ii) transferred or assigned to any Person (other than the Cobalt Companies) any Company Owned Intellectual Property Rights that were, at the time of transfer or assignment, material to such Cobalt Company or (iii) permitted its rights in any Company Owned Intellectual Property Rights material to the Cobalt Companies to lapse or enter the public domain, other than by operation of Law and not because of the act or omission of the Cobalt Companies. No Company Owned Intellectual Property Rights material to the Cobalt Companies are subject to any Proceeding or outstanding Order materially restricting the use, transfer, exploitation, or licensing thereof by the Cobalt Companies, or which reasonably could be expected to materially and adversely affect the validity, use, or enforceability of such Company Owned Intellectual Property Rights. Immediately following the Closing, all Company Owned Intellectual Property Rights material to the Cobalt Companies will be fully transferable, alienable, or licensable by the Cobalt Companies without restriction and without payment of any kind to any Person.

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(d)      Each Registered Intellectual Property Asset is subsisting, valid and, excluding pending applications, enforceable. All necessary registration, maintenance and renewal fees currently due in connection with any Registered Intellectual Property Asset has been paid, and all documents, recordations and certificates necessary to be filed by an Cobalt Company to maintain the effectiveness of such Registered Intellectual Property Assets have been filed with the relevant Governmental Authority. The applicable Cobalt Company has recorded each assignment of rights in Registered Intellectual Property Assets to such Cobalt Company by a Person with the applicable Governmental Authority. Except as stated in Schedule 3.17(a) , there are no actions that must be taken by a Cobalt Company within 120 days after the Agreement Date, including the payment of any registration, maintenance or renewal fees or the filing of any documents, applications or certificates, for the purposes of maintaining, perfecting or preserving or renewing any Registered Intellectual Property Assets.
(e)      The consummation of the transactions contemplated by this Agreement will not result in, or give any other Person the right or option to cause, pursuant to any Contract to which a Cobalt Company is party: (i) a loss of, or imposition of any Lien on any Company Owned Intellectual Property Rights material to the Cobalt Companies or, to the knowledge of the Company, any Intellectual Property Rights owned by Buyer or its Affiliates; (ii) the license, delivery, or assignment of any Company Owned Intellectual Property Rights material to the Cobalt Companies or, to the knowledge of the Company, any Intellectual Property Rights owned by Buyer or its Affiliates; (iii) the termination or material alteration of a Cobalt Company’s rights in and to any Company Owned Intellectual Property Rights material to the Cobalt Companies or, to the knowledge of the Company, Buyer’s or its Affiliates’ rights in and to any Intellectual Property Rights owned by Buyer or its Affiliates; or (iv) a Cobalt Company or, to the knowledge of the Company, Buyer or Buyer’s Affiliates, being obligated to pay any material amounts to any Person materially in excess of those payable by such Cobalt Company prior to the Closing (except for increased fees due to an increase in usage or sales).
(f)      Except as stated in Schedule 3.17(f) , no computer software licensed or used by the Cobalt Companies is custom software.
(g)      Except as stated in Schedule 3.17(g) , neither the operation of the businesses of the Cobalt Companies as currently conducted nor the use, exploitation, development, marketing, license, sale, furnishing or use of any product or service currently licensed, sold or provided by the Cobalt Companies has infringed, violated, misappropriated, or diluted or infringes, violates, misappropriates, or dilutes the Intellectual Property Right of any Person or has constituted or does constitute unfair competition or trade practices under the Laws of any applicable jurisdiction. Except as stated in Schedule 3.17(g) , there are no, and have been no, Proceedings or written inquiries alleging any of the foregoing.

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(h)      The Cobalt Companies have not received written notice from any Person alleging that the operation of the businesses of the Cobalt Companies or the exploitation of any product or service of the Cobalt Companies has infringed, violated, misappropriated, or diluted, or does infringe, violate, misappropriate, or dilute the Intellectual Property Rights of any Person or has constituted or does constitute unfair competition or trade practices under the Laws of any jurisdiction. The Cobalt Companies have not received any written request from any Person for indemnification with respect to infringement, violation, misappropriation, or dilution of Intellectual Property Rights.
(i)      Except as set forth in Schedule 3.17(i) , to the knowledge of the Company, no Person has or is infringing, violating, misappropriating, or diluting any material Company Owned Intellectual Property Rights and no Cobalt Company has instituted any Proceedings or inquiries alleging the foregoing or provided written notice to any Person alleging the foregoing that has not been resolved.
(j)      The Cobalt Companies take, and have taken at all times, reasonable steps to protect, preserve, and maintain the Cobalt Companies’ rights in the material Trade Secrets owned by, licensed to, or in the possession of the Cobalt Companies. No confidential information or technology that is material to the Cobalt Companies and that the Cobalt Companies currently protect or attempt to protect as a Trade Secret has entered the public domain. To the knowledge of the Company, no current or former employee, consultant, contractor or agent of the Cobalt Companies has misappropriated or disclosed without authorization the Trade Secrets owned by, licensed to, or in the possession of the Cobalt Companies.
(k)      All current and former employees, consultants, contractors and agents of the Cobalt Companies who are or were involved in, or who have participated in or contributed to, the conception, development, authoring, creation or reduction to practice of any material Intellectual Property Rights for or on the behalf of the Cobalt Companies have executed valid and enforceable Contracts in the applicable forms set forth on Schedule 3.17(k) or are subject to obligations under applicable Law that would qualify such Intellectual Property Rights as a work made for hire or an invention for hire and, to the knowledge of the Company, none of such employees, consultants, contractors or agents are, or have been in, breach of such Contracts. To the knowledge of the Company, no current or former employee, consultant, contractor, or agent of the Cobalt Companies is bound by any Contract restricting such employee, consultant, contractor, or agent from performing such employee’s, consultant, contractor’s or agent’s duties for the Cobalt Companies or in breach of any Contract with any former employer or other Person concerning Intellectual Property Rights or confidentiality due to such employee’s, consultant’s contractor’s or agent’s activities as an employee, consultant, contractor or agent of the Cobalt Companies.
3.18      Litigation . Except as listed on Schedule 3.18 and other than (x) Excluded Warranty Claims and (y) routine workers compensation claims covered by insurance:

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(a)      There are no, and in the past three years there have not been any, material Proceedings pending or, to the Company’s knowledge, threatened against any Cobalt Company, any Cobalt Company’s assets or properties, the Equity Interests of any Cobalt Company or any officer, manager, director or employee of any Cobalt Company in their capacity as such.
(b)      There are no material Proceedings by any Cobalt Company currently pending or that any Cobalt Company intends to initiate.
(c)      No Cobalt Companies are subject to or otherwise bound by (i) any Orders or (ii) any settlement agreements entered into within the past three years or for which a Cobalt Company has not fully performed its obligations thereunder as of the date hereof. The Cobalt Companies are and have been in compliance in all material respects with all of their obligations under any Orders or settlement agreements to which any Cobalt Company is subject or is otherwise bound.
3.19      Employees .
(a)      Schedule 3.19(a) sets forth a true, correct and complete list of all current employees of the Cobalt Companies, and for each such employee, his or her: (i) classification as exempt or non-exempt under applicable state, federal or foreign overtime regulations, (ii) hourly rate of compensation or base salary (as applicable), (iii) total 2016 compensation, (iv) vacation accrual rate, (v) accrued but unused vacation and (vi) commencement date of employment. Schedule 3.19(a) also lists all current independent contractors of the Cobalt Companies who perform services for the Cobalt Companies on a full-time basis, and for each such independent contractor, his or her: (x) terms of compensation, (y) total 2016 compensation and (z) commencement date.
(b)      None of the Cobalt Companies is party to any collective bargaining agreements and there are no labor unions or other organizations representing any employee of the Cobalt Companies. There are no labor unions or other organizations which have filed a petition with the National Labor Relations Board or any other Governmental Authority seeking certification as the collective bargaining representative of any employee of the Cobalt Companies, and to the knowledge of the Company, no labor union or organization is engaged in any organizing activity with respect to any employee of the Cobalt Companies. In the three years prior to the date hereof, there has not been, and there is not now pending or, to the knowledge of the Company, threatened, (i) any strike, lockout, slowdown, picketing, or work stoppage with respect to the employees of the Cobalt Companies or (ii) any unfair labor practice charge against the Cobalt Companies.
(c)      In the three years prior to the date hereof, none of the Cobalt Companies has effectuated (i) a “plant closing” as defined in the Worker Adjustment and Retraining Notification Act, 29 U.S.C. §§ 2101 et seq. (the “ WARN Act ”) (or any similar state, local or foreign Law) affecting any site of employment or one or more facilities or operating units within any site of employment or facility of the Cobalt Companies or (ii) a “mass layoff” as defined in the WARN Act (or any similar state, local or foreign Law) affecting any site of employment or facility of the Cobalt Companies.

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(d)      The Cobalt Companies have complied and are in compliance in all material respects with all Laws relating to employees and employee wages, hours, classification of employees (as exempt or non-exempt, as independent contractors or employees, or otherwise), termination, equal opportunity, collective bargaining and the payment of social security and other Taxes applicable to the Cobalt Companies.
(e)      To the Company’s knowledge no current or former employee of any Cobalt Company has any claim against any Cobalt Company for overtime pay, wages, salary, or bonus, excluding current payroll periods, or any violation of any statute, ordinance or regulation relating to wages, maximum hours or other terms or conditions of employment of such employee.
3.20      Employee Benefits .
(a)      Schedule 3.20(a) lists each Benefit Plan.
(b)      The Cobalt Companies have delivered true, correct and complete copies of the following documents to Buyer with respect to each Benefit Plan: (i) all documents embodying such Benefit Plan, including all amendments thereto, and all related trust documents, (ii) a written description of any Benefit Plan that is not set forth in a written document, (iii) the most recent summary plan description together with the summary or summaries of material modifications thereto, if any, (iv) the three most recent annual actuarial valuations, if any, (v) all Internal Revenue Service (“ IRS ”) or Department of Labor (“ DOL ”) determination, opinion, notification and advisory letters, (vi) the three most recent annual reports (Form Series 5500 and all schedules and financial statements attached thereto), if any, (vii) all material correspondence to or from any Governmental Authority received in the last three years, (viii) all discrimination tests for the most recent three plan years and (ix) all material written Contracts currently in effect, including administrative service agreements, group annuity contracts, and group insurance Contracts.
(c)      Each Benefit Plan has been maintained and administered in all material respects in compliance with its terms and with the requirements prescribed by any and all Laws and Orders (foreign and domestic), including ERISA and the Code, which are applicable to such Benefit Plans.
(d)      Each Benefit Plan intended to be qualified under Section 401(a) of the Code and each trust intended to qualify under Section 501(a) of the Code is so qualified and has obtained a currently effective favorable determination notification, advisory and/or opinion letter, as applicable, as to its qualified status (or the qualified status of the master or prototype form on which it is established) from the IRS covering the amendments to the Code effected by the Tax Reform Act of 1986 and all subsequent legislation for which the IRS will currently issue such a letter, and no amendment to such Benefit Plan has been adopted since the date of such letter covering such Benefit Plan that would adversely affect such favorable determination.

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(e)      No plan currently or ever in the past maintained, sponsored, contributed to or required to be contributed to by the Cobalt Companies or any of their respective current or former ERISA Affiliates is or ever in the past was (i) a Multiemployer Plan, (ii) a plan described in Section 413 of the Code, (iii) a plan subject to Title IV of ERISA, (iv) a plan subject to the minimum funding standards of Section 412 of the Code or Section 302 of ERISA or (v) a plan maintained in connection with any trust described in Section 501(c)(9) of the Code.
(f)      None of the Cobalt Companies is subject to any Liability or penalty under Sections 4971 through 4980H of the Code or Title I of ERISA.
(g)      The Cobalt Companies have complied with all applicable health care continuation requirements in Section 4980B of the Code and in ERISA, and the provisions of the Patient Protection and Affordable Care Act. None of the Cobalt Companies is subject to any Liability or penalty under Section 4980H of the Code.
(h)      No “Prohibited Transaction” within the meaning of Section 4975 of the Code or Sections 406 or 407 of ERISA and not otherwise exempt under Section 408 of ERISA has occurred with respect to any Benefit Plan.
(i)      All contributions, reserves or premium payments required to have been made or accrued, or that are due, as of the date hereof to or with respect to the Benefit Plans, have been timely made or accrued.
(j)      No Proceeding (excluding claims for benefits incurred in the ordinary course) has been brought or is pending or, to the Company’s knowledge, threatened, against or with respect to any Benefit Plan or the assets or any fiduciary thereof (in that Person’s capacity as a fiduciary of such Benefit Plan). There are no audits, inquiries or Proceedings pending or, to the Company’s knowledge, threatened by the IRS, DOL or any other Governmental Authority with respect to any Benefit Plan.
(k)      No Benefit Plan provides, or reflects or represents any Liability to provide, benefits (including death or medical benefits), whether or not insured, with respect to any former or current employee, or any spouse or dependent of any such employee, beyond the employee’s retirement or other termination of employment, other than (i) coverage mandated by Part 6 of Title I of ERISA or Section 4980B of the Code or (ii) retirement or death benefits under any plan intended to be qualified under Section 401(a) of the Code.

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(l)      Except as set forth on Schedule 3.20(l) , the execution of this Agreement and the consummation of the transactions contemplated by this Agreement (alone or together with any other event which, standing alone, would not by itself trigger such entitlement or acceleration) will not (i) entitle any Person to any payment, forgiveness of indebtedness, vesting, distribution or increase in benefits under or with respect to any Benefit Plan, (ii) otherwise trigger any acceleration (of vesting or payment of benefits or otherwise) under or with respect to any Benefit Plan or (iii) trigger any obligation to fund any Benefit Plan.
(m)      There is no Contract, plan or arrangement covering any current or former employee, director or consultant of the Cobalt Companies that, individually or collectively, could give rise to the payment as a result of the transactions contemplated by this Agreement of any amount that would not be deductible by the Cobalt Companies by reason of Section 280G of the Code.
(n)      Except as set forth on Schedule 3.20(n) , with respect to each Benefit Plan that is a “nonqualified deferred compensation plan” (as defined for purposes of Section 409A(d)(1) of the Code), (i) such plan has been operated since January 1, 2005 in compliance with Section 409A of the Code and all applicable IRS guidance promulgated thereunder to the extent such plan is subject to Section 409A of the Code and so as to avoid any Tax, interest or penalty thereunder, (ii) the document or documents that evidence each such plan have conformed to the provisions of Section 409A of the Code and the final regulations under Section 409A of the Code since December 31, 2008; and (iii) as to any such plan in existence prior to January 1, 2005 and not subject to Section 409A of the Code, has not been “materially modified” (within the meaning of IRS Notice 2005-1) at any time after October 3, 2004.
(o)      None of the Cobalt Companies has any Liability to pay or reimburse any Taxes, or related penalties or interest, that may be incurred pursuant to Code Section 4999 or Code Section 409A.
(p)      No Benefit Plan is maintained outside the jurisdiction of the U.S. or covers any employee residing or working outside the U.S.
3.21      Environmental, Health, and Safety Matters . Except as disclosed on Schedule 3.21 :
(a)      The Cobalt Companies have complied and are in compliance, in all material respects, with all Environmental and Safety Requirements.
(b)      Without limiting the generality of the foregoing, the Cobalt Companies have, in all material respects, obtained and complied with, are in compliance with, and have timely applied for any required renewals, of all Permits, licenses, and other authorizations required pursuant to Environmental and Safety Requirements, and no condition exists that would reasonably be expected to result in the revocation or non-renewal thereof by any Governmental Authority.

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(c)      The Cobalt Companies have not received any claim, written notice, report, notice of investigation or other information regarding any actual or alleged violation of Environmental and Safety Requirements or any Liabilities or potential Liabilities (whether accrued, absolute, contingent, unliquidated or otherwise), including any investigatory, remedial or corrective obligations, relating to the Cobalt Companies or their facilities and arising under Environmental and Safety Requirements.
(d)      The Cobalt Companies have not incurred any material Liabilities under any Environmental and Safety Requirements.
(e)      None of the property owned, leased, occupied, or operated by the Cobalt Companies is affected by any condition, and there has been no activity or failure to take any action by the Cobalt Companies, that could reasonably be expected to result in any material Liability or obligation under any Environmental and Safety Requirements.
(f)      There is no Hazardous Substance present in quantities greater than those allowed by applicable Environmental and Safety Requirements on or in the environment at any Company Property. There has been no disposal, treatment or Release of a Hazardous Substance, material or waste to the environment at any facility now operated by the Cobalt Companies (or any predecessor for which they may be responsible) or at any facility formerly owned or operated by the Cobalt Companies (or any predecessor for which it may be responsible) that, in each case, that could give rise to material Liability under any Environmental and Safety Requirements. No employee of the Cobalt Companies or other Person has been injured as a result of Release of a Hazardous Substance at any facility currently or formerly operated by the Cobalt Companies.
(g)      No waste has been disposed of by the Cobalt Companies at any site or location that could give rise to material Liability under any Environmental and Safety Requirements.
(h)      True, correct and complete copies of all Phase One, Phase Two, and other environmental assessments or reports, and all environmental compliance audits of facilities now or, within the last 5 years, formerly owned, leased, controlled or operated by the Cobalt Companies within the possession of the Cobalt Companies have been made available to Buyer.
(i)      The Cobalt Companies have not assumed by contract (including any administrative order, consent agreement, lease or sale lease-back) or operation of law, or otherwise agreed, to: (i) indemnify or hold harmless any other Person for any material violation of any Environmental and Safety Requirement or any material obligation or Liability thereunder; (ii) assume any material Liability for any Release of any Hazardous Substance, conduct any response, removal or remedial action with regard to any Release of any Hazardous Substance, or implement any institutional controls (including any deed restrictions) regarding any existing Hazardous Substance; or (iii) release or waive any Liability that would impair any claim, demand or other Proceeding related to any material Release of any Hazardous Substance in, on, under, to or from any real property against a previous owner or operator of any real property or against any other Person who may be potentially responsible for such Release.

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(j)      No underground storage tanks, friable asbestos, lead-based paint or polychlorinated biphenyls are located at any property currently owned, leased or operated by the Cobalt Companies.
3.22      Accounts Receivable . The notes and accounts receivable reflected in the Latest Balance Sheet, and all notes and accounts receivable of the Cobalt Companies arising since the Latest Balance Sheet, represent bona fide obligations arising from sales actually made or services actually performed in the ordinary course of business. Such notes and accounts receivable are subject to no valid defenses, counterclaims or rights of setoff or any claims or disputes and, to the knowledge of the Company, are collectible in the ordinary course of business, except in the case of notes and accounts receivable shown on the Latest Balance Sheet, to the extent of the reserves set forth on the face of the Latest Balance Sheet, and, in the case of accounts receivable arising since the Latest Balance Sheet, to a reasonable allowance for bad debts which does not reflect a rate of bad debts more than that reflected by the reserve for bad debts on the Latest Balance Sheet.
3.23      Inventory . The values at which inventories of the Cobalt Companies are shown on the Latest Balance Sheet are true and correct in all material respects as of the date of the Latest Balance Sheet and have been determined in accordance with the historical valuation policy of the Cobalt Companies, consistently applied and in accordance with GAAP. Such inventories (and items of inventory of the Cobalt Companies acquired or manufactured subsequent to the Latest Balance Sheet) consist only of items of quality and quantity commercially usable and, with respect to finished goods, salable, in the ordinary course of business consistent with past practice and are not obsolete, damaged or defective, except to the extent of any reserve therefor on the Latest Balance Sheet. The present quantities of the inventories of the Cobalt Companies are reasonable in the present circumstances of the businesses of the Cobalt Companies. Except as stated in Schedule 3.23 , all inventories (other than goods in transit or goods located off-site, in any case, in the ordinary course of business) of the Cobalt Companies are located on the premises of a Cobalt Company.
3.24      Top Dealers, Distributors, Sales Representatives and Suppliers . Schedule 3.24 sets forth a true, correct and complete list of the top 30 dealers, distributors and sales representatives and top 20 suppliers of the Cobalt Companies as measured by revenue, in the case of dealers, distributors and sales representatives, and expenditure, in the case of suppliers, for the 12-month period ended March 31, 2017 (including a break-down of revenue or expenditures attributable to each such Person), with related or affiliated Persons aggregated and treated as a single Persons for purposes hereof but with each such Person nevertheless separately listed on such Schedule. Since January 1, 2016, no such Person has materially changed the terms of its relationship with the Cobalt Companies or indicated to a Cobalt Company that such Person intends to terminate its relationship with the Cobalt Companies or materially change the terms of its relationship with the Cobalt Companies (including to materially reduce its purchases from, or sales to the Cobalt Companies’ businesses, as the case may be, or to materially increase the amount charged for the supply of certain materials, products or services) nor has there been any material dispute with any such Person.

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3.25      Business Practices .
(a)      None of the Cobalt Companies or any of their respective directors, managers, officers, employees, agents or other Persons acting on behalf of the Cobalt Companies has directly or indirectly: (a) offered, authorized, or given anything of value (including payments, contributions, gifts or otherwise) to any employee, agent or official of a Governmental Authority, any political party or official, agent or employee thereof, or any candidate for political office with the intent of obtaining any improper advantage, improperly affecting or influencing any act or decision of any such Person, assisting any Cobalt Company in obtaining or retaining business for, or with, or directing business to, any Person, or constituting a bribe, kickback or illegal or improper payment; or (b) taken any other action in violation of (i) the U.S. Foreign Corrupt Practices Act of 1977, (ii) any other applicable anti-corruption, anti-bribery, recordkeeping or internal controls Laws, (iii) any applicable export control Laws, trade or economic sanctions Laws, or anti-boycott Laws or (iv) any other Law of similar purpose and scope. The Company has disclosed to Buyer any alleged or actual fraud, whether or not material, known to the Company and occurring any time during the past three years with respect to any Cobalt Company.
(b)      None of the Cobalt Companies have directly or indirectly engaged in any transactions with: (i) any Person then-listed on any sanctions list maintained by the U.S. Department of Treasury’s Office of Foreign Assets Control (“ OFAC ”); (ii) any Person that is 50% or more owned, directly or indirectly by any Person then-listed on any sanctions list maintained by OFAC; or (iii) any Person located, organized or resident in a country or territory that is the subject of U.S. comprehensive economic sanctions (as of the date hereof, comprising the Crimea region of Ukraine, Cuba, Iran, North Korea,  and Syria). The Cobalt Companies have not engaged in any transactions in violation of applicable anti-money laundering Laws or, to the knowledge of the Company, engaged in any transactions involving funds derived from any criminal activity.
4.      Unitholders’ Representations and Warranties . Each Unitholder separately (and not jointly) represents and warrants to Buyer as follows:
4.1      Organization of FE II, Inc.
If such Unitholder is FE II, Inc., (a) such Unitholder is a corporation validly existing and in good standing under the Laws of the State of Kansas, (b) the Pack Trust owns 33.15% of the shares of such Unitholder, the Jill Trust owns 33.15% of the shares of such Unitholder, William Paxson St. Clair, Jr. owns 17.80% of the shares of such Unitholder, Mary Whitney Callan owns 15.90% of the shares of such Unitholder, and there are no Equity Interests in such Unitholder issued, outstanding or reserved, and (c) such Unitholder is a holding company that has no material Liabilities.

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4.2      Authorization of Transaction . Such Unitholder has full right, capacity (if such Unitholder is an individual), power and authority to execute and deliver this Agreement and each Ancillary Agreement to which such Unitholder is party, to perform its obligations under this Agreement and each such Ancillary Agreement and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and each such Ancillary Agreement and the consummation of the transactions contemplated by this Agreement and each such Ancillary Agreement have been duly authorized by all requisite action on the part of such Unitholder for which authorization is necessary. This Agreement and each such Ancillary Agreement constitute the valid and legally binding obligation of such Unitholder, enforceable against such Unitholder in accordance with its terms, subject only to the Bankruptcy Exceptions.
4.3      Non-Contravention .
(a)      No Breach . The execution and the delivery of this Agreement and each Ancillary Agreement to which such Unitholder is party and the consummation of the transactions contemplated by this Agreement and each such Ancillary Agreement will not:

(1)	violate any Law or Order to which such Unitholder is subject or is otherwise bound;	

(2)	violate any provision of such Unitholder’s Charter Documents, if such Unitholder is a legal entity; or	

(3)	conflict with, result in a breach of, or constitute a default under any Contract to which the Unitholder is party or by which such Unitholder’s Units are bound or subject.	
(b)      No Consent or Notice . Such Unitholder is not required to give any notice to, make any filing with, or obtain any authorization, consent or approval (or any waiver of any of the foregoing) of any Governmental Authority or any other Person for the Parties to enter into this Agreement or any of the Ancillary Agreements or to consummate the transactions contemplated hereby or thereby.
4.4      Brokers’ Fees . Such Unitholder has not incurred any liability or obligation on behalf of any Cobalt Company or otherwise to pay any fees or commissions or other amounts to any broker, finder, or agent with respect to the transactions contemplated by this Agreement, except with respect to Raymond James & Associates, Inc., all of which will be borne by Sellers as a Company Transaction Cost.
4.5      Title to the Units . Such Unitholder has good and marketable title to his, her or its Units set forth opposite their name on Schedule 3.6(a) , free and clear of all Liens, except for restrictions on transfer (a) arising under applicable securities Laws or (b) set forth in the Limited Liability Company Agreement, and such Units constitute all of the Equity Interests of any Cobalt Company owned or held by such Unitholder. Immediately after Closing, Buyer will own such Units free and clear of all Liens, except for such restrictions on transfer. Other than pursuant to the Limited Liability Company Agreement, such Unitholder is not party to any Contract that would require such Unitholder to sell, transfer or otherwise dispose of any Units (other than this Agreement) and such Unitholder is not party to any voting trust, proxy or other Contract with respect to the voting of any Units.

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4.6      Status of Unitholder . If such Unitholder is William Paxson St. Clair, Jr.:
(a)      Such Unitholder is an “accredited investor” as that term is defined in Rule 501 of Regulation D under the U.S. Securities Act of 1933, as amended (the “ Securities Act ”). Such Unitholder is able to bear the economic risks of holding the shares of MBUU Common Stock to be issued to such Unitholder under this Agreement for an indefinite period, and has knowledge and experience in financial and business matters such that he is capable of evaluating the risks and merits of the investment in and of protecting his own interests in connection with such shares. Such Unitholder has had an opportunity to receive all information related to Malibu Boats, Inc. requested by such Unitholder and to discuss, ask questions of and receive answers from Malibu Boats, Inc. regarding Malibu Boats, Inc.’s proposed business, management, financial affairs and the terms and conditions of the offering of the MBUU Common Stock with Malibu Boats, Inc.’s management. Such Unitholder is not a person identified in clause (1) of Rule 506(d) under the Securities Act that is subject to a disqualification event listed in Rule 506(d)(1)(i) through (viii) under the Securities Act, except for any such event subject to the exceptions set forth in Rule 506(d)(2) or (d)(3) under the Securities Act.
(b)      Such Unitholder did not make the decision to invest in the MBUU Common Stock as a result of, and such Unitholder is not aware of, any form of general solicitation or advertising with respect to the offering of the MBUU Common Stock. Such Unitholder is acquiring such shares for his own account for investment only and not with a view towards, or for resale in connection with, the public sale or distribution thereof. Such Unitholder does not have any contract, undertaking, agreement or arrangement with any Person to sell, transfer or grant participations to the person or to any third person with respect to any of the shares of MBUU Common Stock.
(c)      Such Unitholder agrees that such shares are characterized as “restricted securities” under U.S. securities Laws and may be resold without registration under the Securities Act only in certain limited circumstances, that the Company has no obligation to register or qualify such shares for resale, that any exemption may be conditioned on various requirements (such as time and manner of sale, holding period, and on requirements relating to the Company which are outside of such Unitholder’s control, and which the Company is under no obligation and may not be able to satisfy), and that such shares may not be sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed of without registration under applicable securities Laws or an exemption from such registration under such Laws and applicable trading blackout periods.

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(d)      Such Unitholder understands that the certificates evidencing such shares may bear the following legend and any other legend required by applicable Law:
“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER ANY APPLICABLE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OF THE ACT.”
5.      Buyer’s Representations and Warranties . Buyer represents and warrants to Sellers as follows:
5.1      Organization of Buyer . Buyer is a limited liability company duly organized, validly existing and in good standing under the Laws of the State of Delaware.
5.2      Authorization of Transaction . Buyer has full power and authority to execute and deliver this Agreement and the Ancillary Agreements to which it is party, to perform its obligations under this Agreement and each such Ancillary Agreement and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and each Ancillary Agreement to which Buyer is party and the consummation of the transactions contemplated by this Agreement and each such Ancillary Agreement have been duly authorized by all requisite action on the part of Buyer. This Agreement and each such Ancillary Agreement constitute the valid and legally binding obligation of Buyer, enforceable against Buyer in accordance with its terms, subject only to the Bankruptcy Exceptions.
5.3      Non-Contravention .
(a)      No Breach . The execution and the delivery of this Agreement and the Ancillary Agreements to which Buyer is party and the consummation of the transactions contemplated by this Agreement and each such Ancillary Agreement will not:

(1)	violate any Law or Order to which Buyer is subject or is otherwise bound;	

(2)	violate any provision of Buyer’s Charter Documents; or	

(3)	conflict with, result in a breach of, or constitute a default under any material Contract to which Buyer is party or by which it is bound or to which any of its assets is subject.	

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(b)      No Consent or Notice . Buyer is not required to give any notice to, make any filing with, or obtain any authorization, consent or approval (or any waiver of any of the foregoing) of any Governmental Authority or any other Person for the Parties to enter into this Agreement or any of the Ancillary Agreements or to consummate the transactions contemplated hereby or thereby.
5.4      Brokers’ Fees . Buyer has no liability or obligation to pay any fees or commissions or other amounts to any broker, finder, or agent with respect to the transactions contemplated by this Agreement, except with respect to Moelis & Company, all of which will be borne by Buyer.
5.5      Available Funds . Buyer is creditworthy and has sufficient cash or other readily available financial resources (including amounts available under any existing credit facility of Buyer or its Affiliates) to fund the Purchase Price in full and to pay all other amounts required to be paid by Buyer under this Agreement and transactions contemplated under this Agreement.
5.6      Investment Intent . Buyer is not acquiring the Units with a view to or for sale in connection with any distribution of the Units within the meaning of the Securities Act.
6.      Covenants.
6.1      Conduct of Business .
(a)      During the period commencing with the Agreement Date and terminating upon the earlier to occur of the Closing and the termination of this Agreement pursuant to and in accordance with Section 8.1 , the Company will do or cause to be done the following, except for those transactions or actions expressly contemplated by this Agreement or with Buyer’s prior written consent (which consent will not be unreasonably withheld or delayed):

(1)	conduct its business (and will cause its Subsidiaries to conduct their respective businesses) in the ordinary course of business;	

(2)	use its commercially reasonable efforts to (A) preserve intact the Cobalt Companies’ business organization, Contracts and Permits and (B) keep available the services of the Cobalt Companies’ managers, directors, officers and key employees (other than terminations for cause) and maintain relationships with all dealers, distributors, sales representatives, suppliers and other Persons, in each case having material business relationships with the Cobalt Companies;	

(3)	maintain the Cobalt Companies’ cash management practices, maintain the Cobalt Companies’ policies, practices and procedures with respect to collection of receivables, and pay vendors in accordance with their normal payment terms consistent with past practice, and in each case, in the ordinary course of business;	

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(4)	comply in all material respects with all Laws and Contracts applicable to or binding upon the Cobalt Companies or relating to the Cobalt Companies’ businesses, assets or properties; and	

(5)	use commercially reasonable efforts to satisfy each of the conditions to Closing expressly set forth in Section 7.1 as soon as practicable.	
(b)      In furtherance and not in limitation of Section 6.1(a) , except as otherwise expressly provided by this Agreement or as may be required by Law, during the period commencing on the Agreement Date and terminating upon the earlier to occur of the Closing and the termination of this Agreement pursuant to and in accordance with Section 8.1 , the Company shall not, and shall not cause or permit any of its Subsidiaries to, do or cause to be done any of the following without the prior written consent of Buyer (which consent shall not be unreasonably withheld or delayed):

(1)	amend any Charter Document;	

(2)	(A) issue, sell, create, authorize, redeem, purchase or otherwise acquire any Equity Interests; (B) sell, transfer, pledge or otherwise dispose of any Equity Interests in any Subsidiary of the Company; (C) subdivide, split, reclassify, combine or reverse split any Equity Interests; (D) effect any liquidation, dissolution, winding up, recapitalization or restructuring; (E) file a petition in bankruptcy under any provisions of federal or state bankruptcy Law or consent to the filing of any bankruptcy petition against it under any similar Law; (F) declare, set aside or pay any dividend or other distribution in respect of any Equity Interests (other than as contemplated by Section 2.2(c) and other than distributions of cash); or (G) merge or consolidate with, acquire, or enter into any other business combination with any Person other than pursuant to this Agreement;	

(3)	purchase, acquire, sell, assign, transfer, lease, license or otherwise dispose of any assets that are individually or in the aggregate material to the businesses of the Cobalt Companies, other than the sale or purchase of inventory in the ordinary course of business or as contemplated by Section 2.2(c) ;	

(4)	change any material method of accounting or accounting practice, other than such changes required by applicable Law or GAAP;	

(5)	except as required by any Benefit Plan in effect as of the Agreement Date: (A) increase the compensation payable or that could become payable to managers, directors, officers or employees; (B) enter into any new, or amend any existing, employment, severance, retention or change in control agreement, other than entering new at-will employment agreements with no severance or notice requirements; (C) establish, adopt, enter into, amend, terminate, exercise any discretion under, or take any action to accelerate rights under, any material Benefit Plan; or (D) terminate any management, supervisory or other key personnel (other than for cause) or any group of employees (other than for cause) of the Cobalt Companies;	

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(6)	(A) create, incur, or assume any Indebtedness (other than draws under existing credit facilities or transactions under the Foreign Master Factoring Agreements in the ordinary course of business); (B) make any loan, advance, investment or capital contribution to, or other investment in any Person, other than loans, advances, investments and capital contributions by or solely among the Cobalt Companies made in the ordinary course of business and other than advances of expenses to employees and consultants in the ordinary course of business; or (C) create or incur any Lien (other than Permitted Liens) on any of the assets or properties of the Cobalt Companies;	

(7)	implement any facility closing or layoff of employees that would require notification under the WARN Act;	

(8)	modify, extend (other than automatically in accordance with its terms) or terminate (other than pursuant to an expiration in accordance with its terms) or waive any material rights under any Material Contract (or Contract that would be a Material Contract if it had been entered into prior to the date hereof) or enter into any Material Contract;	

(9)	forgive, cancel, waive, settle or compromise any material right;	

(10)	terminate, settle or initiate any material Proceeding, including (for clarity) the Pending Litigation;	

(11)	in any material respect, delay the making of capital expenditures or the payment of payables, accelerate the receipt of receivables or the making of sales, or engage in any promotional, sales or discount or other similar activity outside of the ordinary course of business;	

(12)	(A) make, change or revoke any election in respect of Taxes; (B) adopt or change any method of Tax accounting or annual reporting; (C) settle or compromise any federal, state, local or non‑U.S. Tax Liability, claim or assessment; (D) file any amended Tax Return; (E) enter into any closing agreement relating to any Tax; (F) agree to an extension or waiver of a statute of limitations period applicable to any Tax claim or assessment; (G) fail to pay any Tax when due and payable; or (H) surrender any right to claim a Tax refund; or	

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(13)	authorize or agree to do any of the foregoing.	
6.2      Reasonable Access . During the period commencing with the Agreement Date and terminating upon the earlier to occur of the Closing and the termination of this Agreement pursuant to and in accordance with Section 8.1 , the Company will (a) permit Buyer, Buyer’s Affiliates, and their respective employees, accountants, legal counsel, and other representatives to have reasonable access (at reasonable times, upon reasonable notice, through coordination with a representative of the Company and in a manner so as not to materially interfere with the normal business operations of the Cobalt Companies) to the premises, properties, personnel, books, records, Contracts, Tax records and documents of or pertaining to the Cobalt Companies and their businesses, and (b) furnish to them such other information pertaining to the Cobalt Companies and their businesses, in each case, as may be reasonably requested by them in connection with the transactions contemplated by this Agreement. No information provided or obtained pursuant to this Section 6.2 shall affect any representation or warranty in this Agreement.
6.3      Directors’ and Officers’ Insurance . Prior to Closing, the Company will obtain at its expense a tail insurance coverage policy, relating to the policies of directors’ and officers’ liability insurance currently maintained by the Cobalt Companies and in effect as of the date hereof with respect to claims arising from facts or events that occurred on or prior to the Closing covering each Person currently covered by such policies.
6.4      Press Releases . Upon execution and delivery of this Agreement by all of the Parties, Buyer and the Company will issue a joint press release announcing the transaction contemplated by this Agreement, and, upon the Closing, Buyer and the Company will issue a joint press release, approved by Sellers (such approval not to be unreasonably withheld or delayed), announcing the closing thereof. Other than the foregoing, neither Sellers nor any other Restricted Parties will make any public announcement or issue any press release relating to the transactions contemplated hereby without the prior consent of Buyer, except as required by Law. For clarity, except as set forth in this Section 6.4 , Buyer shall not be restricted in making any public announcements or press releases.
6.5      Business; Employees; Employee Plans .
(a)      Except for employees who have been offered by Buyer written employment agreements with the Company effective as of the Closing, during the period commencing on the Closing Date and ending on the date which is 12 months after the Closing Date (or, if earlier, the date of the employee’s termination of employment with any Cobalt Company), Company and Buyer will, or will cause an Affiliate, to provide each employee of any Cobalt Company who remains employed immediately after the Closing (a “ Continuing Employee ”) with base salary or hourly wages which are no less than the base salary or hourly wages provided by any Cobalt Company immediately prior to the Closing; provided that the foregoing will not apply with respect to employees whose job titles or job responsibilities are materially changed after Closing.

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(b)      With respect to any employee benefit plan maintained by Buyer (a “ Buyer Employee Plan ”) in which any Continuing Employee will participate effective as of the Closing, Buyer will, or will cause an Affiliate to, recognize all service of Continuing Employees with any Cobalt Company as if such service were with Buyer and its Affiliates, for vesting and eligibility purposes in any Buyer Employee Plan in which such Continuing Employees may be eligible to participate after the Closing Date; provided , however , such service will not be recognized to the extent (i) such recognition would result in a duplication of benefits, (ii) such service was not recognized under the corresponding employee plan of any Cobalt Company as it existed prior to the Closing Date or (iii) and for any reason under any defined benefit pension plan, retiree medical benefit plan or any equity incentive award granted after the Closing.
(c)      If requested by Buyer no later than 10 days prior to the Closing Date, the Cobalt Companies will adopt, or will cause to be adopted, all necessary corporate resolutions (which shall be subject to Buyer’s reasonable review and approval) to terminate each 401(k) Plan sponsored or maintained by the Cobalt Companies, effective as of no later than one day prior to Closing (but such termination may be contingent upon the Closing). Immediately prior to such termination, the Cobalt Companies will have made all necessary payments to fund the contributions: (i) necessary or required to maintain the Tax-qualified status of the 401(k) Plan; (ii) for elective deferrals made pursuant to the 401(k) Plan for the period prior to termination; and (iii) for any employer contributions (including any matching contributions) for the period prior to termination. For this purpose, the term “ 401(k) Plan ” means any plan intended to be qualified under Code Section 401(a) which includes a cash or deferred arrangement intended to qualify under Code Section 401(k). The Cobalt Companies shall provide Buyer with a copy of resolutions duly adopted so terminating any such 401(k) Plan. If any Cobalt Companies’ 401(k) Plan is terminated, Buyer shall cause a 401(k) Plan sponsored by Buyer or one of its Affiliates to accept as soon as practicable rollover distributions from any current or former employees of the Cobalt Companies with respect to such individual’s account balances under such terminated plan (including loans that are not then in default), if elected by such individuals.
This Section 6.5 will be binding upon and inure solely to the benefit of each of the Parties, and nothing in this Section, express or implied, will confer upon any other Person any rights or remedies of any nature whatsoever under or by reason of this Section. Nothing contained herein, express or implied, will be construed to establish, amend, or modify any benefit plan, program, agreement, or arrangement. The Parties acknowledge and agree that the terms set forth in this Section 6.5 will not create any right in any employee or any other Person to any employment or continued employment with the Cobalt Companies, Buyer or any of their respective Affiliates or compensation or benefits of any nature or kind whatsoever.

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6.6      Restrictive Covenants . As a material inducement to Buyer to enter into this Agreement, each Restricted Party (other than Sean Callan) covenants and agrees to the following:
(a)      For the Restriction Period, such Restricted Party shall not, and shall not permit any of the Affiliates of such Restricted Party to, directly or indirectly, either alone or in association or in connection with or on behalf of any Person now existing or hereafter created (except on behalf of Buyer or any of its Affiliates): (i) be or become engaged in, or participate in, the business of designing, developing, assembling, manufacturing, producing, testing, marketing, selling, delivering or servicing boats or components thereof (whether recreational, sports, or otherwise) (“ Restricted Business ”) anywhere in the world (the “ Restricted Area ”), including being or becoming, directly or indirectly, an organizer, owner, operator, investor, lender, lessor, partner, joint venturer, equityholder, officer, director, employee, manager, representative, associate, advisor, consultant or agent of, in, to or from any Restricted Business (including by virtue of holding any beneficial interest, or serving as a trustee or in a similar capacity, in any Person that is, directly or indirectly, any of the foregoing or otherwise engaged in any Restricted Business), (ii) use or authorize the use of such Restricted Party’s name or any part thereof in connection with any Restricted Business or (iii) take any other action that is intended or designed, or would reasonably be expected, to frustrate, circumvent or evade the provisions of this Section 6.6(a) . Nothing in this Section 6.6(a) will prevent such Restricted Party from beneficially holding a passive investment of up to 3% of any publicly-listed class of securities of a Restricted Business.
(b)      Without limiting Section 6.6(a) , such Restricted Party shall not, and shall not permit any of the Affiliates of such Restricted Party to, directly or indirectly, either alone or in association or in connection with or on behalf of any Person now existing or hereafter created, during the Restriction Period, (i) divert or attempt to divert or solicit any business of, or interfere with the relationship between (in each case, only to the extent related to the Restricted Business), any Cobalt Company or its Affiliates, on the one hand, and any Person who at any time during the 18 months preceding the Closing Date was a customer, sales representative, supplier, dealer, distributor, vendor, licensor, licensee, lessor, lessee, or other business partner of any Cobalt Company, on the other hand or (ii) solicit or recruit the employment or consulting services of or hire or engage any employee, independent contractor or consultant of any Cobalt Company (including any such employee, independent contractor or consultant who has voluntarily resigned from employment with such Cobalt Company within six months of such solicitation, recruitment, hiring or engagement), provided that this clause (ii) shall not prohibit a general solicitation to the public of general advertising not specifically directed at any such employee, independent contractor or consultant so long as no such employee, independent contractor or consultant is hired or engaged as a result of such general solicitation.

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(c)      Such Restricted Party represents, warrants, acknowledges and agrees that: (i) such Restricted Party is directly deriving substantial value and proceeds from the transactions contemplated hereby (including, in the case of William Paxson (Pack) St. Clair and Jill St. Clair, as owners of FE II, Inc.), (ii) the restrictions applicable to such Restricted Party in this Section 6.6 are necessary, fair, reasonable, fundamental and required for the protection of the business, Trade Secrets and goodwill of the Cobalt Companies after the Closing, (iii) such restrictions relate to matters that are of a special, unique and extraordinary value, (iv) Buyer has required that such Restricted Party agree to such restrictions, and such Restricted Party has voluntarily agreed to such restrictions (v) Buyer would not consummate the transactions contemplated hereby if such Restricted Party did not enter into such restrictions, (vi) the obligations against such Restricted Party in this Section 6.6 constitute the valid and legally binding obligation of such Restricted Party and are enforceable against such Restricted Party in accordance with their terms, and (vii) the obligations against such Restricted Party in this Section 6.6 are cumulative with, and not in lieu of, any other similar restrictions set forth in any agreement between a Cobalt Company or any Affiliate thereof and such Restricted Party (including any employment, consulting, confidentiality, inventions assignment, or similar agreement).
(d)      Such Restricted Party agrees that a breach by such Restricted Party or any Affiliate thereof of any covenant set forth in this Section 6.6 would cause irreparable harm to Buyer, that Buyer’s remedies at law upon any such breach would be inadequate, and that, accordingly, upon any such breach, Buyer may seek a restraining order or injunction or both to be issued against such Restricted Party or such Affiliate, in addition to any other rights and remedies which are available to Buyer at law or in equity. Such Restricted Parties specifically agree that the restrictions set forth in this Section 6.6 are reasonable, appropriate and narrowly-tailored but that if a court of competent jurisdiction finds this Section 6.6 more restrictive than permitted by the Laws of any jurisdiction in which Buyer seeks enforcement hereof, this Section 6.6 will be limited to the extent required to permit maximum enforcement thereof under such Laws. In particular, such Restricted Parties intend that the covenants contained in the preceding portions of this Section 6.6 will be construed as a series of separate covenants, including one for each country in the Restricted Area, one for each state, province or other first-level political subdivision within each country in the Restricted Area and one for each county or other second-level political subdivision in each state, province, or other first-level political subdivision in the Restricted Area. Except for geographic coverage, each such separate covenant will be deemed identical in terms. If, in any Proceeding, a court of competent jurisdiction or arbitrator refuses to enforce any of the separate covenants deemed included in this Section 6.6 , then only such unenforceable covenant will be deemed eliminated from these provisions for the purpose of such Proceeding to the extent necessary to permit the remaining separate covenants to be enforced. In addition, if a court of competent jurisdiction or arbitrator refuses to enforce any of the covenants throughout the full length of the Restriction Period, such Restricted Parties agree that the Restriction Period will be deemed amended to the longest period that is permissible. In addition, and without limiting any other remedies, the Restriction Period with respect to a Restricted Party subject to this Section 6.6 shall be extended for the period equal to the time period (if any) that such Restricted Party is in breach of this Section 6.6 .

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(e)      The “ Restriction Period ” means the period of five years beginning with the Closing Date.
6.7      Release . Effective as of the Closing, each Restricted Party, on behalf of itself, its Affiliates and their respective executors, representatives, successors and assigns, if any, irrevocably releases and discharges Buyer, the Cobalt Companies and their respective officers, managers, directors, equityholders, affiliates, employees, advisors and agents (collectively, “ Released Parties ”) from and against any and all claims, demands, damages, Liabilities, agreements, costs, expenses (including attorneys’ and accountants’ fees and expenses), Proceedings, actions and causes of action of any nature whatsoever, whether now known or unknown, suspected or unsuspected, that such Restricted Party or its Affiliates or their respective executors, representatives, successor or assigns now has, or at any time previously had, or shall or may have in the future, or that were owed, are owed, or shall or may in the future be owed to such Person, whether accrued, absolute, contingent, unliquidated or otherwise, and whether known or unknown, in any case, arising out of or relating to any act, omission, event or circumstance occurring prior to or existing as of the Closing relating to or arising out of or in connection with any Cobalt Company or any action or inaction of any Cobalt Company or such Person’s relationship (whether related to employment, ownership, or otherwise) with any Cobalt Company, including, for clarity, all rights of such Person (if any) under the Limited Liability Company Agreement (collectively, “ Released Claims ”), and irrevocably agrees to refrain from directly or indirectly asserting or commencing any claim or demand of any kind against any Released Party based upon any Released Claim. Each Restricted Party confirms that it has not transferred or assigned any interest in any Released Claim. Notwithstanding the foregoing, “Released Claims” does not include: (a) any rights of the Restricted Parties in this Agreement or any Ancillary Agreement; (b) with respect to any Restricted Party that is a current or former officer, director or manager of a Cobalt Company, any right of such Restricted Party in their capacity as such to indemnification and advancement of expenses under the Charter Documents of the Cobalt Companies or under applicable Law; (c) any rights with respect to tail insurance coverage policy obtained pursuant to Section 6.3 ; or (d) in the case of a Restricted Party that is an employee, officer, director, or manager of a Cobalt Company, any claim for accrued benefits under any Benefit Plan to which such Restricted Party is entitled or unpaid salary for the current period. Each Restricted Party acknowledges that it may hereafter discover facts in addition to, or different from, those that such Restricted Party now knows or believes to be true with respect to the subject matter of the foregoing release, and each Restricted Party intends that such release shall be and remain in effect as a full and complete release notwithstanding the discovery or existence of any such additional or different facts. In furtherance of the foregoing intention, each Restricted Party hereby waives and relinquishes any rights and benefits that it may have as a Person granting a release under any applicable Law of any jurisdiction to the full extent that it may lawfully waive all such rights and benefits pertaining to the subject matter of the such release.

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6.8      R&W Insurance Policy . Promptly following issuance of the R&W Insurance Policy, Buyer shall provide a complete copy thereof to Sellers. The R&W Insurance Policy obtained by Buyer shall contain an irrevocable waiver of subrogation by the insurer against Sellers and, in the case of FE II, Inc., its stockholders, and, unless prohibited by the R&W Insurance Policy, the other Restricted Parties and all of their respective directors, officers, affiliates, stockholders and unit holders (except in instances of fraud). Buyer covenants and agrees that following Closing, Buyer will not amend or modify the R&W Insurance Policy in any manner whatsoever that would adversely affect Sellers with respect to such subrogation. Buyer covenants and agrees that with respect to any claim for indemnification pursuant to Section 9.2(a)(1) or Section 9.2(a)(3) for which coverage may reasonably be available under the R&W Insurance Policy, Buyer shall (a) give timely notice of that claim for indemnification as required under the R&W Insurance Policy, (b) comply in all material respects with all of the applicable terms and conditions of the R&W Insurance Policy for which the failure to comply would adversely affect Sellers and (c) use its commercially reasonable efforts to pursue coverage for such claim under the R&W Insurance Policy.
6.9      Efforts . Without limiting any obligations provided elsewhere in this Agreement, the Company and Buyer shall, as promptly as practicable, use their commercially reasonable efforts to satisfy the other’s conditions to Closing set forth in Article 7 and cause the Closing to occur, including using commercially reasonable efforts to (a) file any notices and applications with Governmental Authorities required to be made by it, (b) obtain any third-party consents, approvals or other instruments required to be obtained by it (including, in the case of the Company, those described in Section 2.2(b)(8) and Section 7.1(f) ), (c) in the case of the Company, seek a payoff letter in form and substance reasonably satisfactory to Buyer from all counterparties to the Redemption Agreements who are not parties to this Agreement and (d) oppose and have lifted or rescinded any injunction or restraining order or other order adversely affecting the ability of such Party to cause the Closing to occur, and they shall reasonably cooperate with each other in respect of the foregoing; provided that, for clarity, no such Party shall be required to waive or otherwise compromise any condition to its obligations to consummate the Closing. The Company and Buyer shall furnish to each other such information (other than attorney-client or similarly privileged information) and assistance as the other may reasonably request in connection with the foregoing. Without Buyer’s consent, the Company will not (and will not permit any other Cobalt Company to), prior to the Closing, make any agreement to pay any consideration after the Closing or post any security to a third party in exchange for any such consent, approval, or instrument.
6.10      Notice of Developments . From the Agreement Date until the earlier to occur of the Closing and the termination of this Agreement pursuant to and in accordance with Section 8.1 , if any Party becomes aware of any fact, action, circumstance, breach or event that would reasonably be likely to (a) result in the failure of any other Party’s condition to Closing set forth in Article 7 to be satisfied or (b) restrict or delay in any material respect the performance of its obligations under this Agreement, such Party shall give the other Parties prompt written notice thereof. No information provided or obtained pursuant to this Section 6.10 shall affect any representation or warranty in this Agreement.
6.11      Exclusivity . From the Agreement Date until the earlier to occur of the Closing and the termination of this Agreement pursuant to and in accordance with Section 8.1 , except as set forth in Section 2.2(c) , the Company and each Restricted Party agree that they will not, and will cause their respective directors, officers, managers, members, employees, agents, financing sources, advisors or other representatives not to, directly or indirectly (a) solicit, initiate or encourage any inquiry, proposal, offer or agreement from any Person (other than Buyer and its Affiliates and representatives) relating to any transaction involving (i) the sale, transfer or issuance of any Equity Interest of any Cobalt Company or FE II, Inc., or the sale or transfer of any assets of the Cobalt Companies that are collectively material (other than the sale of inventory in the ordinary course of business), (ii) any acquisition, divestiture, merger, share

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or unit exchange, consolidation, redemption, financing, refinancing, or similar transaction involving a Cobalt Company or FE II, Inc. or (iii) any other business combination involving a Cobalt Company or FE II, Inc. (in each case, an “ Acquisition Proposal ”) or (b) participate in any discussion or negotiation regarding, or furnish any information with respect to, or assist or facilitate in any manner, any Acquisition Proposal or any attempt to make an Acquisition Proposal. Each Restricted Party and the Company shall immediately cease, and cause to be terminated, any and all contacts, discussions and negotiations between them or any Cobalt Company and any third parties regarding any of the foregoing, and the Company will notify Buyer promptly if any Person makes any proposal, offer, inquiry or contact related to an Acquisition Proposal to any of them (or its directors, officers, managers, members, employees, and agents) from the Agreement Date until the earlier to occur of the Closing and the termination of this Agreement pursuant to and in accordance with Section 8.1 .
6.12      Financing . From the Agreement Date until the earlier to occur of the Closing and the termination of this Agreement pursuant to and in accordance with Section 8.1 , the Company shall, and shall cause the other Cobalt Companies to, provide, and use their commercially reasonable efforts to cause their respective Affiliates, officers, directors, employees, stockholders, agents and other representatives (including legal, financial and accounting advisors) to provide, all cooperation reasonably requested by Buyer and its financing sources, agents and arrangers under the Debt Financing (as defined below) and their respective former, current and future Affiliates, equity holders, controlling persons, officers, directors, employees, agents, advisors and representatives involved in the Debt Financing (collectively, the “ Financing Sources ”) in connection with the arrangement of a debt financing relating to the transactions contemplated by this Agreement (the “ Debt Financing ”), including: (a) promptly furnishing to Buyer and the Financing Sources financial and other non-privileged information regarding the Cobalt Companies as may be reasonably requested by Buyer or the Financing Sources, including, without limitation, financial statements of the Cobalt Companies for the mostly recently completed fiscal quarter ended at least 45 days prior to the Closing Date using the same Accounting Standards as the Interim Financial Statements; (b) prior to the Closing Date, furnishing to Financing Sources all documentation and other non-privileged information about the Cobalt Companies required by any Governmental Authority under applicable “know your customer” and anti-money laundering rules and regulations, as shall have been requested by Buyer prior to the Closing; (c) facilitating the providing of guarantees by, and the granting of security interests (and perfection thereof) in the assets of, the Cobalt Companies requested by Buyer ( provided that the effectiveness of any such guarantees or grants of security interests shall be subject to the occurrence of the Closing); (d) to the extent reasonably requested by Buyer, assisting in Buyer’s preparation of any schedules thereto to the extent reflecting the Cobalt Companies and each of their respective assets for the Debt Financing; and (e) facilitating the consummation of the Debt Financing, including cooperating with Buyer so as to facilitate Buyer being able to satisfy the conditions precedent to the Debt Financing to the extent reasonably requested by Buyer and within the control of the Cobalt Companies, and taking any reasonable corporate action, subject to the occurrence of the Closing, reasonably requested by Buyer to permit the execution and delivery of any definitive financing documents.

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6.13      Termination of Redemption Agreements; Amendment to Real Estate Rental Agreement . Each of William Paxson St. Clair, Jr. and Mary Whitney Callan acknowledge and agree that, subject only to receipt of the payment described in Schedule 2.2(a)(3) , the Redemption Agreement between the Company and such Seller is terminated as of the Closing, and the Cobalt Companies are released from any and all obligations and liabilities under or in connection therewith. Effective as of the Closing, the Real Estate Rental Agreement, dated as of December 1, 2014, by and between the Company and William Paxson St. Clair, Jr. shall be deemed amended such that (a) the monthly rental payment thereunder shall be $2,000 and (b) such agreement shall terminate on December 31, 2017.
6.14      Representations and Warranties of Other Parties . Each Party that is not a Seller, the Company or Buyer represents and warrants to the other Parties that (a) such Party has full right, capacity, power and authority to execute, deliver and perform this Agreement and each Ancillary Agreement to which such Party is party, (b) this Agreement and each such Ancillary Agreement constitute the valid and legally binding obligation of such Party, enforceable against such Party in accordance with its terms, subject only to the Bankruptcy Exceptions, and (c) such execution, delivery and performance will not breach or violate any Law, Order or Contract to which such Party is bound or subject or require that such Party give any notice, make any filing, or obtain any authorization, consent or approval.
6.15      Airosol Property . In the event that Airosol Company, Inc. exercises its option to sell the property located at 509 Klaydor Dr., Neodesha, Kansas to the Company pursuant to the terms of the Contract of Sale, dated as of February 10, 2017, by and between the Company and Airosol Company, Inc., Sellers will, or will cause an Affiliate of one or more Sellers to, if so elected by Buyer, purchase such property in lieu of the Company.
6.16      Inventory . The Company shall commence on June 29, 2017 and substantially complete by July 2, 2017 a full physical inventory (“ Inventory Count ”) of the Cobalt Companies and shall permit Buyer and a representative of Buyer’s external auditor to be present to observe the Inventory Count.
6.17      Cobalt Wine . Effective as of the Closing, the Restricted Parties and St. Clair Cellars, LLC hereby sell, assign and transfer to the Company any and all right, title and interest they or any of their Affiliates (other than the Cobalt Companies) have (if any) in and to the marks set forth on Schedule 3.17(a) for use in connection with wine and the goodwill of the wine business associated with the marks set forth on such Schedule, together with the right to sue and recover for profits or damages or other recovery arising out of, or in connection with, any and all past, present or future claims, demands and causes of action resulting from infringement or dilution of, or damage or injury to, any such marks. For clarity, the Restricted Parties and St. Clair Cellars, LLC represent and warrant that none of them (or any of their Affiliates or family members) use or own any interest in any such marks for use in connection with any other business or purpose.

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6.18      Real Property Matters .
(a)      After the Closing, the Company shall use commercially reasonable efforts to obtain one or more owner’s policies of title insurance acceptable to Buyer from a title company selected by Buyer (the “ Title Company ”) listing the Company as the insured, and insuring good and marketable fee simple title to the Real Property to the Company, in an amount reasonably determined by Buyer, subject only to the Permitted Liens, and containing an ALTA Endorsement 25-06 (Same as Survey) and such other endorsements as Buyer shall reasonably require (collectively, the “ Title Policies ”). The costs and expenses of such Title Policies, and the costs of any related surveys and endorsements, shall be borne 50% by the Company, on the one hand, and 50% by Sellers, on the other hand.
(b)      From and after the Closing, Sellers shall cooperate with and assist the Company with respect to the matters described in Section 6.18(a) and, furthermore, to ensure that all of the Real Property parcels are properly recorded in the name of the Company.
7.      Conditions to Closing.
7.1      Conditions to Obligations of Buyer . The obligation of Buyer to consummate the Closing and the transactions to be performed by Buyer in connection with the Closing is subject to the satisfaction, fulfillment, or waiver by Buyer, at or prior to the Closing, of each of the following conditions:
(a)      Representations and Warranties . (i) The representations and warranties of the Company Parties contained herein (other than the Fundamental Representations) that are not qualified by materiality or similar phrases shall be true and correct in all material respects and that are qualified by materiality or similar phrases shall be true and correct in all respects, in each case, on and as of the Closing Date as if made on the Closing Date (except to the extent such representations and warranties address matters as of particular dates, in which case, on and as of such dates); and (ii) the Fundamental Representations shall be true and correct in all respects on and as of the Closing Date as if made on the Closing Date (except to the extent such representations and warranties address matters as of particular dates, in which case, on and as of such dates).
(b)      Covenants . The Company Parties shall have performed and complied in all material respects with all of their covenants and agreements required to be performed by them pursuant to this Agreement on or prior to the Closing Date.
(c)      No Orders or Proceedings . There shall not be in effect any Order issued by any Governmental Authority that makes the transactions contemplated by this Agreement illegal or otherwise restrains or prohibits the consummation of the transactions contemplated by this Agreement, and there shall not be pending any Proceeding (except proceedings initiated by Buyer or its Affiliates) by or before any Governmental Authority challenging this Agreement or seeking to delay, restrain or prohibit the transactions contemplated hereby or that, if adversely determined, would materially and adversely affect the Cobalt Companies.

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(d)      No Material Adverse Effect . Since the Agreement Date, there shall have been no change, event, occurrence or circumstance that has had or would reasonably be expected to have a Material Adverse Effect.
(e)      Closing Certificate . Buyer shall have received a certificate dated as of the Closing Date executed by an authorized officer of the Company and by each of Sellers certifying that the conditions set forth in Sections 7.1(a) , 7.1(b) , and 7.1(d) are satisfied in all respects.
(f)      Auditor Consent . Buyer shall have received a signed consent, in form and substance reasonably satisfactory to Buyer and dated as of the Closing Date, of Allen, Gibbs & Houlik, L.C., for the filing with the Securities and Exchange Commission of the audited consolidated balance sheets and statements of income, members’ deficit and cash flows of the Company and its Subsidiaries as of and for the fiscal years ended September 30, 2016, September 30, 2015 and September 30, 2014 for the Cobalt Companies, in each case, together with the independent auditor’s unqualified report thereon.
(g)      Other Closing Deliverables . Buyer shall have received all of the documents, instruments and certificates required to be delivered to Buyer pursuant to Sections 2.2(b) and 2.2(c) .
7.2      Conditions to Obligations of the Company Parties . The obligation of the Company Parties to consummate the Closing and the transactions to be performed by the Company Parties in connection with the Closing is subject to the satisfaction, fulfillment, or waiver by the Company and Sellers, at or prior to the Closing, of each of the following conditions:
(a)      Representations and Warranties . The representations and warranties of Buyer contained herein that are not qualified by materiality or similar phrases shall be true and correct in all material respects and that are qualified by materiality or similar phrases shall be true and correct in all respects, in each case, on and as of the Closing Date as if made on the Closing Date (except to the extent such representations and warranties address matters as of particular dates, in which case, on and as of such dates).
(b)      Covenants . Buyer shall have performed and complied in all material respects with all of its covenants and agreements required to be performed by it pursuant to this Agreement on or prior to the Closing Date.
(c)      No Orders or Proceedings . There shall not be in effect any Order issued by any Governmental Authority that makes the transactions contemplated by this Agreement illegal or otherwise restrains or prohibits the consummation of the transactions contemplated by this Agreement, and there shall not be pending any Proceeding (except proceedings initiated by any of the Company Parties or their Affiliates) by or before any Governmental Authority challenging this Agreement or seeking to delay, restrain or prohibit the transactions contemplated hereby.

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(d)      Closing Certificate . The Company shall have received a certificate dated as of the Closing Date executed by an authorized officer of Buyer certifying that the conditions set forth in Sections 7.2(a) and 7.2(b)  are satisfied in all respects.
(e)      Escrow Agreement . Sellers shall have received the Escrow Agreement, duly executed by Buyer.
8.      Termination.
8.1      Termination . This Agreement may be terminated and the transactions contemplated hereby may be abandoned at any time prior to the Closing:
(a)      by the mutual written consent of Buyer and the Company;
(b)      by Buyer, by written notice to the Company if any Company Party is in breach of any representation, warranty, covenant or agreement contained in this Agreement, and such breach, individually or in combination with any other such breach, (i) would cause any of the conditions set forth in Section 7.1 not to be satisfied and (ii) if curable, is not cured within 10 days after Buyer has given the Company written notice of such breach; provided , however , that the termination right in this Section 8.1(b) shall not be available to Buyer if Buyer is at that time in material breach of this Agreement;
(c)      by the Company, by written notice to Buyer if Buyer is in breach of any representation, warranty, covenant or agreement contained in this Agreement, and such breach, individually or in combination with any other such breach, (i) would cause any of the conditions set forth in Section 7.2 not to be satisfied and (ii) if curable, is not cured within 10 days after the Company has given Buyer written notice of such breach; provided , however , that the termination right in this Section 8.1(c) shall not be available to the Company if any Company Party is at that time in material breach of this Agreement; or
(d)      by either Buyer, on the one hand, or the Company, on the other hand, by written notice to the other Party if the Closing shall not have occurred on or before the 30 th day after the Agreement Date; provided , however , that the termination right in this Section 8.1(d) shall not be available to any Party (with the Company Parties treated as a single Party for purposes thereof) whose breach of a representation, warranty, covenant or agreement made in this Agreement has prevented the consummation of the Closing on or prior to such date.
8.2      Effect of Termination . In the event of the valid termination of this Agreement and abandonment of the transactions contemplated hereby pursuant to and in accordance with Section 8.1 , this Agreement shall forthwith become void and of no further force or effect whatsoever and there shall be no liability on the part of any Party to this Agreement; provided , however , that notwithstanding the foregoing, (a) nothing contained in this Section 8.2 shall relieve any Party from any liability resulting from or arising out of any material breach of this Agreement prior to such termination and (b) the terms of this Section 8.2 and Article 12 shall survive any termination of this Agreement.

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9.      Survival; Indemnification.
9.1      Survival . All representations, warranties, covenants, and agreements set forth in this Agreement or in any certificate delivered in connection with this Agreement will survive the Closing and the consummation of the transactions contemplated by this Agreement, but, if the Closing occurs, (a) all representations and warranties contained in Article 3 , Article 4 (other than the Excluded Representations, the Environmental Representations and the Fundamental Representations) and Article 5 (other than the representations and warranties contained in Section 5.2 and Section 5.4 ) will terminate at midnight, central standard time, 12 months following the Closing Date, (b) the Excluded Representations (other than any Environmental Representations or Fundamental Representations) will terminate at midnight, central standard time, 15 months following the Closing Date, (c) the Environmental Representations (for clarity, including Environmental Representations that are Excluded Representations) will terminate at midnight, central standard time, 48 months following the Closing Date and (d) the Fundamental Representations and the representations and warranties contained in Section 5.2 and Section 5.4 will terminate at midnight, central standard time, 6 years following the Closing Date. Notwithstanding the foregoing, (i) if any claim(s) for indemnification has been made on or prior to the applicable survival expiration date set forth in this Section 9.1 , then such claim(s) shall survive until their final resolution and (ii) the limitations set forth in this Section 9.1 shall not apply in the case of a claim involving fraud.
9.2      Indemnification by Sellers . From and after the Closing:
(a)      Indemnifiable Losses . Sellers severally, and not jointly, in accordance with their relative Pro Rata Interests (except, with respect to clause (1) and (2) below, in the case of the breach, inaccuracy, non-compliance or non-performance of any of the representations, warranties, covenants or agreements made by a particular Seller (and not the Company), in which case only such Seller) will indemnify Buyer and its Affiliates (including the Cobalt Companies) and their respective officers, directors, employees, equityholders, agents, representatives, successors and permitted assigns (collectively, the “ Buyer Parties ”) and will hold each of them harmless from and against and pay on behalf of or reimburse such Buyer Parties in respect of any loss, Liability, demand, claim, action, cause of action, cost, damage, deficiency, Tax, penalty, fine, or expense, whether or not arising out of third party claims (including, without limitation, interest, penalties, reasonable attorneys’ fees and expenses, court costs, and all amounts paid in investigation, defense, or settlement of any of the foregoing) (collectively, “ Losses ”) which any such Buyer Party may suffer, sustain or become subject to, as a result of, in connection with, relating or incidental to or by virtue of:

(1)	the breach of or inaccuracy in any representation or warranty of such Seller or the Company contained in this Agreement (or any Schedule hereto) as of the Agreement Date, or as of the Closing Date as though such representation or warranty were made on and as of the Closing Date (except to the extent such representations and warranties address matters as of particular dates, in which case, on and as of such dates), or in any certificate delivered hereunder;	

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(2)	the breach, non-compliance or non-performance of any covenant or agreement of such Seller or the Company contained in this Agreement;	

(3)	any Taxes of the Cobalt Companies for Pre-Closing Tax Periods, except to the extent such Taxes are taken into account in determining final Closing Working Capital;	

(4)	(i) any Company Transaction Cost not paid prior to the Closing, (ii) any outstanding Closing Indebtedness, (iii) (A) any FAR Payments (including, for clarity, any Losses relating to any claim by any holder of any FAR that the payment received by such holder in respect of such FAR was incorrect) or (B) the matters set forth on Schedule 9.2(a)(4) or (iv) any claim after the Closing arising under or relating to any Redemption Agreement, in each case, that were not taken into account as a reduction to the final Purchase Price;	

(5)	any obligation of a Cobalt Company after the Closing to indemnify or hold harmless or provide any related rights to any current or former director, manager or officer of a Cobalt Company (for clarity, other than in their capacity as a Seller Party) for claims that relate to periods prior to the Closing to the extent not paid by the tail insurance coverage policy obtained pursuant to Section 6.3 ;	

(6)	the assets described in Schedule 2.2(c) or the transfer thereof to Sellers;	

(7)	Environmental Damages to the extent resulting from Known Environmental Conditions, other than any such Losses to the extent resulting from (i) any change of use of the Facility from industrial, or any shutdown of operations at the Facility, after the Closing Date, (ii) any investigation, remediation, or other environmental response actions by the Buyer Parties conducted to investigate, monitor, eliminate or control any environmental risk other than risks to the extent resulting from the presence or Release of Known Environmental Conditions consistent with the least stringent applicable remediation or other standard acceptable to the relevant Governmental Authority or (iii) any change in Environmental and Safety Requirements after the Closing Date. In connection with any site remediation, the least stringent applicable remediation standard is the least costly, protective standard acceptable to the relevant Governmental Authority, which may include, without limitation, the use of reasonable deed restrictions, environmental use controls, and engineering controls to limit exposure to contaminants that are allowed to remain in place, to the extent such restrictions or controls would not interfere with site operations of the type currently conducted;	

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(8)	the failure of the Company to own, as of the Closing, good and marketable fee simple title to all of the Real Property free and clear of all Liens other than Permitted Liens; or	

(9)	any third-party claims relating to, arising out of or resulting from the Pending Litigation.	
(b)      Indemnification Limitations . Notwithstanding the foregoing, the obligation of Sellers to provide indemnification pursuant to this Section 9.2 will be subject to the following limitations ( provided that the following limitations shall not apply to any claim involving fraud):

(1)	With respect to claims for indemnification by Buyer Parties under Section 9.2(a)(1) (other than in respect of Fundamental Representations), Sellers will have no obligation to provide indemnification unless and until the aggregate amount of Losses by the Buyer Parties under Section 9.2(a)(1) (other than in respect of Fundamental Representations) exceeds 0.5% of the Base Purchase Price (the “ Threshold ”), and then only for Losses in excess of the Threshold.	

(2)	To the extent that Sellers have any obligation or liability to a Buyer Party pursuant to Section 9.2(a)(1) (other than in respect of Fundamental Representations and Excluded Representations), Sellers’ total obligation or liability therefor will not exceed 1.0% of the Base Purchase Price.	

(3)	(A) Sellers’ total liability pursuant to (i) Section 9.2(a)(1) for Losses in respect of Excluded Representations, (ii) Section 9.2(a)(7) , and (iii) Section 9.2(a)(9) will not exceed 7.5% of the Base Purchase Price in the aggregate. (B) Sellers’ total liability with respect to claims made pursuant to Section 9.2(a)(7) on or before the fourth anniversary of the Closing (“ First Period Claims ”) will not exceed 6.0% of the Base Purchase Price in the aggregate. (C) Sellers’ total liability with respect to claims made pursuant to Section 9.2(a)(7) after the fourth anniversary of the Closing and on or before the seventh anniversary of the Closing will not exceed 3.5% of the Base Purchase Price in the aggregate (the “ Second Period Cap ”); provided that any final liability of Sellers in respect of First Period Claims will reduce the Second Period Cap dollar-for-dollar. (D) Sellers’ total liability with respect to claims made pursuant to Section 9.2(a)(8) will not exceed $25 million in the aggregate. (E) Once (x) a Title Policy is issued to the Company pursuant to Section 6.18(a) in respect of the Main Facility and (y) Sellers have been liable for at least $10 million with respect to claims made pursuant to Section 9.2(a)(8) relating to the Main Facility, Sellers shall thereafter only be liable for 50% of the amount of any Losses subject to indemnity pursuant to Section 9.2(a)(8) relating to the Main Facility. (F) With respect to each Real Property other than the Main Facility, once a Title Policy is issued to the Company pursuant to Section 6.18(a) in respect of such Real Property, Sellers shall thereafter only be liable for 50% of the amount of any Losses subject to indemnity pursuant to Section 9.2(a)(8) relating to such Real Property, except that Sellers shall instead be liable for 100% of the amount of such Losses to the extent such Losses result from or relate to any action by or on behalf of any Cobalt Company or any of their	

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owners prior to the Closing (including, for example, but without limitation, any breach of Contract or violation of Law by any of them prior to Closing).

(4)	Without limiting the other limitations of this Section 9.2(b) , each Seller’s total liability pursuant to Section 9.2(a)(1) , Section 9.2(a)(3) , Section 9.2(a)(4) , and Section 9.2(a)(5) will not exceed in the aggregate the final Purchase Price actually received by such Seller.	

(5)	Without limiting the other limitations of this Section 9.2(b) , to the extent that coverage is available under the R&W Insurance Policy, no Seller will have any liability pursuant to Section 9.2(a)(1) (other than in respect of Excluded Representations) or pursuant to Section 9.2(a)(3) , in any case, other than for the then remaining portion of the Retention (as such term is defined in the R&W Insurance Policy), unless and until the Limit of Liability (as such term is defined in the R&W Insurance Policy) is met or exceeded.	

(6)	The amount of Losses for which indemnification is provided under this Section 9.2 will be offset by (a) amounts that are reimbursable by and actually recovered from insurance (net of any deductible or co-payment and all out of pocket costs related to such recovery) and (b) any Tax benefits actually realized by the Indemnified Party by reason of such Losses in the year in which the corresponding indemnity payment is made or any prior year.	
(c)      Sole Remedy . After the Closing, except for a Party’s right to specific performance or injunctive relief or for claims involving fraud, the indemnity provisions contained in this Section 9.2 will be the Buyer Parties’ sole and exclusive remedy for any claim relating to breaches of this Agreement, other than claims pursuant to Section 1.5 and other than claims against a Restricted Party in respect of such Restricted Party’s representations, warranties, or covenants (other than pre-Closing covenants) in Section 6 , Section 9.7 or Section 10 of this Agreement. If any insurance proceeds or other amounts are actually received by any Buyer Party of any amount previously paid by an Indemnifying Party to such Buyer Party in respect of an indemnification claim pursuant to this Section 9.2 , such Buyer Party will repay to such Indemnifying Party, promptly after receipt of such insurance proceeds or other amounts, the amount that such Indemnifying Party would not have had to pay pursuant to this Section 9.2 had such insurance proceeds or other amounts been received by such Buyer Party prior to such Indemnifying Party’s payment under this Section 9.2 (net of any deductible or co-payment and all out of pocket costs related to such recovery). Notwithstanding the foregoing, nothing in this Agreement shall limit the right of the Buyer Parties to make claims against the R&W Insurance Policy.

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(d)      Satisfaction from Escrow . In all instances in which Sellers have any obligation or liability to a Buyer Party pursuant to Section 9.2(a) at any time during the Indemnity Escrow Period that there that there is any amount then-remaining in the Indemnity Escrow Account, Buyer shall use any amount then-remaining in the Indemnity Escrow Account as recourse to satisfy any and all such amounts owed to a Buyer Party before proceeding directly against the applicable Party for such amounts, subject to the other limitations of this Article 9 .
(e)      Additional Environmental Indemnity Matters . Notwithstanding anything to the contrary in this Agreement:

(1)	The indemnity in Section 9.2(a)(7) will survive the Closing and continue in full force and effect until the date that is seven years from the Closing Date; provided that (i) if any claim for indemnification has been made thereunder on or prior to such date then such claim shall survive until its final resolution (and, for clarity, all Losses accruing in respect of such claim prior to the resolution of such claim, whenever resolved, and regardless of the expiration of the indemnity, shall be subject to such indemnity) and (ii) the limitations set forth in this clause (1) shall not apply in the case of a claim involving fraud.	

(2)	The Buyer Parties shall have the full right to control the defense and settlement of any Third Party Claim (including any claim or directive by a Governmental Authority seeking or relating to Environmental Damages, including any remediation or action of any type regarding Known Environmental Conditions) subject to indemnity pursuant to Section 9.2(a)(7) , and assumption by the Buyer Parties thereof shall not be deemed a waiver by them of their right to indemnification hereunder. However, the Buyer Parties will observe all of the obligations and Sellers will have all of the rights under the first and third sentences of Section 9.4(a) and under Section 9.4(b) (but for clarity not the other sentences of Section 9.4 ), subject in each case to Section 9.4(c) , with respect to any such Third Party Claim.	

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(3)	For purposes of this Section 9.2 :	
“ Environmental Damages ” means any investigation, delineation, sampling, testing, cleanup, monitoring, reporting, or mitigation of, or any Losses arising from or relating to, Known Environmental Conditions, including potable well replacement and vapor mitigation, and including fines and penalties assessed for failure to report the presence of Known Environmental Conditions at the Facility (to the extent such fines and penalties are predicated on pre-Closing obligations or requirements), and including attorneys’, engineering, and consultants’ fees and expenses, and fees and other amounts assessed by any Governmental Authority, or any other action or activity of any kind related to Known Environmental Conditions, including any contamination of surface or groundwater, potable water, sediment, soil, indoor or outdoor air or any other media, and any nuisance, trespass, vapor intrusion, damage or alleged damage to any real property, personal property or natural resource or harm or alleged harm to human health or safety, or any other condition relating to the Release, use, treatment, storage, introduction, handling, processing, transportation or transfer of Known Environmental Conditions at, on, in, under, from or to the Facility regardless of (i) whether or not such Release was caused by Sellers or their predecessors or any other Person (except to the extent of any actual recovery of Environmental Damages by a Buyer Party from any such predecessor or other Person), (ii) whether or not at the time the facts and circumstances resulting in the contamination or Release occurred were a violation of or created liability under any Environmental and Safety Requirements and (iii) when, prior to the Closing Date, such Release occurred (but, for clarity, including the post-Closing migration or degradation of Known Environmental Conditions that existed at, on, in, under or about the Facility as of or prior to the Closing Date).
“ Facility ” means that Real Property located at 1715 North 8th Street, Neodesha, Kansas.
“ Known Environmental Conditions ” means the Release or existence of Total Petroleum Hydrocarbon (defined as any mixture of hydrocarbons that are originally found in or derived from crude oil) in soil, soil vapor, ambient air or groundwater at the Facility as of or prior to the Closing Date.

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(f)      Additional Real Property Indemnity Matters . Notwithstanding anything to the contrary in this Agreement:

(1)	The indemnity in Section 9.2(a)(8) will survive the Closing and continue in full force and effect until the date that is 15 years from the Closing Date; provided that (i) if any claim for indemnification has been made thereunder on or prior to such date, then such claim shall survive until its final resolution (and, for clarity, all Losses accruing in respect of such claim prior to the resolution of such claim, whenever resolved, and regardless of the expiration of the indemnity, shall be subject to such indemnity) and (ii) the limitations set forth in this clause (1) shall not apply in the case of a claim involving fraud.	

(2)	The Buyer Parties shall have the full right to control the defense and settlement of any Third Party Claim (including any claim or directive by a Governmental Authority) subject to indemnity pursuant to Section 9.2(a)(8) , and assumption by the Buyer Parties thereof shall not be deemed a waiver by them of their right to indemnification hereunder. However, the Buyer Parties will observe all of the obligations and Sellers will have all of the rights under the first and third sentences of Section 9.4(a) and under Section 9.4(b) (but for clarity not the other sentences of Section 9.4 ), subject in each case to Section 9.4(c) , with respect to any such Third Party Claim.	
9.3      Indemnification by Buyer . From and after the Closing, Buyer will indemnify Sellers, the Restricted Parties, and their Affiliates and their respective officers, directors, members, employees, agents, representatives, successors, and permitted assigns (collectively, the “ Seller Parties ”) from and against and pay on behalf of or reimburse such Seller Parties in respect of any Loss which any Seller Party may suffer, sustain, or become subject to, as a result of, in connection with, relating or incidental to, or by virtue of:
(a)      the breach of or inaccuracy in any representation or warranty of Buyer contained in this Agreement or any Schedule hereto or certificate delivered hereunder; or
(b)      the breach, non-compliance or non-performance of any covenant or agreement of Buyer contained in this Agreement.
Notwithstanding the foregoing, the obligation of Buyer to provide indemnification pursuant to this Section 9.2(f) will be subject to the following limitation ( provided that the following limitations shall not apply to any claim involving fraud): (i) with respect to claims for indemnification by Seller Parties under Section 9.3(a) (other than in respect of the representations and warranties contained in Section 5.2 and Section 5.4 ), Buyer will have no obligation to provide indemnification unless and until the aggregate amount of Losses by the Seller Parties under Section 9.3(a) (other than in respect of the representations and warranties contained in Section 5.2 and Section 5.4 ) exceeds the Threshold, and then only for Losses in excess of the Threshold; and (ii) Buyer’s total liability pursuant to Section 9.3(a) will not exceed in the aggregate the final Purchase Price. The amount of Losses for which indemnification is provided under this Section 9.2(f) will be offset by amounts that are reimbursable by and actually recovered by the Seller Parties from insurance (net of any deductible or co-payment and all out of pocket costs related to such recovery) and any Tax benefits actually realized by the Indemnified Party by reason of such Losses in the year in which the corresponding indemnity payment is made or any prior year. After the Closing, except for a Party’s right to specific performance or injunctive relief or for claims involving fraud, the indemnity provisions contained in this Section 9.2(f) will be the Restricted Parties’ sole and exclusive remedy for any claim relating to breaches of

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this Agreement, other than claims pursuant to Section 1.5 and other than claims against Buyer in respect of Buyer’s post-Closing covenants in Section 6 or Section 10 of this Agreement.
9.4      Third-Party Claims .
(a)      Procedures . If any demands or claims are asserted against a Person entitled to indemnification under Section 9.2 or Section 9.2(f) (an “ Indemnified Party ”) or any actions, suits, or proceedings are commenced against an Indemnified Party by a Person not a Party or an Affiliate of a Party for which a Party (the “ Indemnifying Party ”) is obligated to indemnify such Indemnified Party (a “ Third Party Claim ”), the Indemnified Party will give prompt notice to the Indemnifying Party in order to permit Indemnifying Party the necessary time to evaluate the merits of such Third Party Claim, but the failure of an Indemnified Party to give prompt notice to the Indemnifying Party shall not affect the rights of the Indemnified Party to indemnification hereunder, except to the extent any such failure materially prejudices the rights of the Indemnifying Party. The Indemnifying Party will have the right, but not the obligation, to assume the defense of any such claim at its own expense with counsel reasonably satisfactory to the Indemnified Party so long as the Indemnifying Party acknowledges in writing that the Indemnified Party is entitled to indemnification hereunder in respect of the Losses subject to such Third Party Claim and so long as the Indemnifying Party notifies the Indemnified Party in writing that it is assuming the defense of such claim within 20 days after receipt of notice of the claim from Indemnified Party, the Indemnified Party shall have the right to be informed and consulted with respect to the negotiation, settlement or defense of such Third Party Claim and to retain counsel to act on its behalf, but the fees and disbursements of such counsel shall be paid by the Indemnified Party; provided that if the Indemnifying Party assumes control of such defense and (i) the Indemnified Party reasonably concludes that the Indemnifying Party and the Indemnified Party may have a conflict of interest or different defenses available with respect to such Proceeding that would make it inappropriate for the same counsel to represent both parties or (ii) the Indemnifying Party has not in fact employed counsel to assume control of such defense, the reasonable fees and expenses of counsel to the Indemnified Party (limited to one law firm in each applicable jurisdiction) shall be paid for by the Indemnifying Party. The party controlling such defense shall keep the other party advised of the status of such Proceeding and the defense thereof. Notwithstanding anything to the contrary herein, Buyer as Indemnified Party shall have the full right to control the defense and settlement of any Third Party Claim if: (1) the claim seeks anything other than monetary damages, including an injunction or other equitable relief; (2) the claim involves a claim by any Governmental Authority or a significant customer, supplier, dealer, distributor, sales representative or other business partner of the Cobalt Companies, or involves a criminal claim; (3) the amount reasonably necessary to conclude the defense of such Third Party Claim is in excess of (or reasonably likely to exceed) the remaining portion of the liability cap under Section 9.2(b) applicable to such claim after reduction of all Losses previously recovered by (or then being claimed pursuant to unresolved claims) by the Buyer Parties that count (or would count) towards such cap (if a cap is applicable to such claim); or (4) the Indemnifying Party assumes the defense but fails to promptly defend the Third Party Claim. Assumption by Buyer of control of any such defense or settlement shall not be deemed a waiver by it of its right to indemnification hereunder.

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(b)      Settlement and Compromise . An Indemnified Party may not settle or compromise any Third Party Claim without the Indemnifying Party’s prior written consent (such consent not to be unreasonably withheld or delayed). An Indemnifying Party may not settle or compromise any Third Party Claim without the Indemnified Party’s prior written consent (such consent not to be unreasonably withheld or delayed).
(c)      R&W Insurance Policy . Notwithstanding anything to the contrary set forth herein, the provisions hereof dealing with Third Party Claims shall be subject to the terms and conditions of the R&W Insurance Policy.
9.5      Objections to Claims for Indemnification .
(a)      Indemnification Objection . An Indemnifying Party may make a written objection (“ Indemnification Objection ”) to any claim for indemnification by an Indemnified Party. The applicable Party will deliver any Indemnification Objection to the other Party within 20 days after written notice is given to such Party stating that the Indemnified Party has incurred Losses.
(b)      Resolution by the Parties . Any Indemnification Objection will be resolved pursuant to Section 12.8 .
9.6      Other Indemnification Matters .
(a)      For purposes of this Article 9 , in determining whether there has been any misrepresentation or breach of, or inaccuracy in, a representation or warranty, and in determining the amount of Losses resulting therefrom, all qualifications or exceptions in any representation or warranty relating to or referring to the terms “material”, “materiality”, “in all material respects”, “material adverse effect” or any similar term or phrase shall be disregarded, it being understood and agreed that for purposes of determining liability under this Article 9 , the representations and warranties contained in this Agreement shall be read as if such terms and phrases were not included in them.

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(b)      The right of any Buyer Party to indemnification will not be affected by any investigation conducted with respect to, or any knowledge acquired (or capable of being acquired) at any time, whether before or after the execution and delivery of this Agreement or the Closing Date, with respect to the accuracy or inaccuracy of or compliance with, any representation, warranty, covenant or agreement set forth in this Agreement.
(c)      Each Seller Party, in their capacity as such, hereby agrees that it will not make any claim for indemnification for any Losses subject to indemnity pursuant to Section 9.2(a) . Furthermore, the obligations of the applicable Restricted Parties pursuant to Section 9.2(a) or Section 9.7 shall not be reduced, offset, eliminated or subject to contribution by reason of any action or inaction by any Cobalt Company prior to the Closing that contributed to any inaccuracy or breach giving rise to such obligation, it being understood and agreed that such Restricted Parties, and not the Cobalt Companies, shall have the sole obligation for the indemnity obligations under Section 9.2(a) .
9.7      FE II, Inc. Obligations . Each of the Pack Trust, the Jill Trust, William Paxson St. Clair, Jr. and Mary Whitney Callan agrees to be severally (and not jointly) liable in accordance with their relative Pro Rata FE Interest on an irrevocable, absolute, unconditional, continuing and primary basis with FE II, Inc. for all obligations and undertakings of every nature of FE II, Inc. under or arising from this Agreement (including under Section 1.5 , Article 4 and this Article 9 ), it being understood that any claim or Proceeding may be brought against any such Person regardless of whether any such claim or Proceeding is brought against any other Person and that each such Person waives promptness, diligence, notice of acceptance, presentment, demand for payment, notice of non-performance, default, dishonor and protest and all other notices of any kind and all suretyship defenses of every nature that may otherwise be available, except for defenses available to FE II, Inc. under this Agreement (other than any such defenses arising as a result of the bankruptcy or insolvency of FE II, Inc.).
10.      Additional Agreements.
10.1      Transaction Expenses . Except as provided in Article 9 or as otherwise expressly provided in this Agreement, each Party will pay all expenses incurred by such Party in connection with the transactions contemplated by this Agreement (whether consummated or not); provided that, for clarity, Sellers shall bear the Company Transaction Costs if the Closing occurs.
10.2      Transfer and Other Taxes . Sellers will pay 50% and Buyer will pay 50% when due, of all transfer, documentary, sales, use, stamp, registration, and other such similar Taxes and fees (including any penalties and interest) incurred in connection with this Agreement, except that Sellers will be responsible for all such Taxes and fees related to the transactions contemplated by Section 2.2(c), and Buyer and Sellers will, at its own expense, file all necessary Tax Returns and other documentation with respect to all such transfer, documentary, sales, use, stamp, registration, and other Taxes and fees.

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10.3      Further Assurances . The Company, Sellers and the other Restricted Parties will execute and deliver such further documents and instruments of conveyance and transfer and take such additional action as Buyer may reasonably request to effect, consummate, confirm or evidence the transactions contemplated by this Agreement.
10.4      Transition Assistance . Sellers and the other Restricted Parties will cooperate in all commercially reasonable respects with Buyer to enable Buyer and the Cobalt Companies to comply with all legal disclosure obligations in respect of periods prior to the Closing (including, without limitation, in connection with Tax filings, securities transactions, and the like), and will provide such information or testimony as may be reasonably requested by Buyer and the Cobalt Companies in connection with any Proceeding to the extent related to periods prior to the Closing.
10.5      Certain Tax Matters .
(a)      Pre-Closing Tax Returns . Sellers will prepare or cause to be prepared and file or cause to be filed all Income Tax Returns of the Cobalt Companies or relating to the operation of the Cobalt Companies’ businesses or the ownership of the Cobalt Companies’ assets for all periods ending on or prior to the Closing Date (collectively, the “ Pre-Closing Tax Returns ”) even if the Tax Returns are to be filed after the Closing Date. Such Tax Returns will be prepared and filed in accordance with applicable Law and in a manner consistent with past practices. In connection therewith, the Company and each other Cobalt Company that is taxable as a partnership will make (or have in effect) a valid election under Section 754 of the Internal Revenue Code for the taxable period ending on the Closing Date. Sellers will furnish such Income Tax Returns to Buyer for its review and comment (any such comments will be accepted by Sellers to the extent such comments are reasonable and relate to positions that could reasonably be expected to have an adverse effect on Buyer or its Affiliates in a taxable period or portion thereof beginning after the Closing Date) at least 30 days before such Income Tax Returns are to be filed (taking into account any valid extensions to file such Tax Returns). Sellers will pay any entity level Taxes due with respect to such Income Tax Returns in excess of the amount thereof that was taken into account in determining final Closing Working Capital. For the avoidance of doubt, any income or loss allocated to the Company from Condesa Aviation, LLC will be allocated to the taxable period of the Company ending on the Closing Date.
(b)      Other Tax Returns . Buyer will prepare or cause to be prepared and file or cause to be filed all other Tax Returns of the Cobalt Companies or relating to the operation of the Cobalt Companies’ businesses or the ownership of the Cobalt Companies’ assets for all periods ending after the Closing Date, other than the Pre-Closing Tax Returns prepared by Sellers pursuant to Section 10.5(a) , and including without limitation Tax Returns with respect to and any Straddle Period. Such Tax Returns will be prepared and filed in accordance with past practices except as otherwise required by applicable Law. The Company will furnish such Tax Returns to Sellers for their review and comment (any such comments will be accepted by the Company to the extent such comments are reasonable and relate to positions that could reasonably be expected to have an adverse effect on Sellers or that are not adequately supported by the relevant facts or applicable Tax Law) at least 30 days (in the case of Income Tax Returns) or 15 days (in the case of all other Tax Returns) before such Tax Returns are to be filed (taking into account any valid extensions to file such Tax Returns).

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(c)      Disputes, Filings . Buyer and Sellers will endeavor in good faith to resolve any differences with respect to any Tax Returns filed pursuant to Section 10.5(a) or (b) . Any unresolved disputes will be resolved by the Arbitrator in accordance with the terms and procedures in Section 1.5(c) ; provided , however , that in the event that the Arbitrator has not yet resolved any such Tax dispute prior to the deadline for filing of the Pre-Closing Tax Return or Straddle Period Tax Return (including any applicable extensions), the preparing Party shall be entitled to file such Tax Return (or amendment) as prepared as adjusted to incorporate the other Party’s reasonable written comments subject to later amendment of such Tax Return to reflect the resolution when rendered by the Arbitrator. Sellers shall pay all unpaid Taxes finally shown to be due on any Tax Return described in Section 10.5(b) that pertains to a Pre-Closing Tax Period, except to the extent such Taxes have been taken into account in determining final Closing Working Capital.
(d)      Straddle Period Taxes . For purposes of this Agreement, in the case of a Straddle Period, Taxes of a Cobalt Company shall be allocated to the portion of the period ending on Closing Date as follows: (i) all Income Taxes, sales Taxes, employment Taxes and other Taxes that are readily apportionable based on an actual or deemed closing of the books shall be allocated based on the amount that would be payable if the taxable year ended on the Closing Date and (ii) all property and other Taxes that are imposed on a periodic basis and not described in clause (i) shall be allocated based on the amount of such Tax for the entire period multiplied by a fraction, the numerator of which is the number of days in the portion of a period ending on the Closing Date and the denominator of which is the number of days in the entire period.
(e)      Tax Refunds . Any Tax refund of a Cobalt Company that relates to Taxes paid prior to the Closing Date for any Pre-Closing Tax Period or that are taken into account in determining final Closing Working Capital that are actually received by Buyer or its Affiliates after the Closing Date (a “ Pre-Closing Tax Refund ”) shall be for the account of Sellers, except (i) to the extent any such refund was taken into account in determining final Closing Working Capital or (ii) for refunds arising from the carryback of a loss arising after the Closing Date to a Pre-Closing Tax Period. Buyer shall pay to Sellers the amount of any such Pre-Closing Tax Refund (less any Taxes imposed on the receipt thereof and all out-of-pocket expenses incurred in obtaining such amounts) within 10 business days after receipt of any such Pre-Closing Tax Refund.

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(f)      Further Tax Assurances . From and after the Closing Date, Buyer and Sellers will each:

(1)	provide the other with such assistance as may reasonably be requested by the other Party in connection with the preparation of any Tax Return (including amended returns and claims for refund), or the conduct of any audit or other examination by any Governmental Authority or Proceedings relating to liability of the Cobalt Companies for Taxes;	

(2)	retain and provide the other with any record or other information that reasonably may be relevant to such Tax Return;	

(3)	provide the other with adequate information, including but not limited to any final determination of any such audit or examination, Proceeding or determination that reasonably may be expected to affect any amount required to be shown on any Tax Return of the other Party for any period; and	

(4)	none of Sellers, Buyer, the Cobalt Companies or any of their Affiliates shall dispose of any Tax Returns, Tax schedules, material Tax work-papers or any material books or records with respect to the Cobalt Companies relating to a Pre-Closing Tax Period or Straddle Period unless it first offers in writing to the party the right to take possession of such materials at such other party’s sole expense and the other party fails to accept such offer within fifteen (15) calendar days of the offer being made. Any information obtained under this Section 10.5(f) shall be kept confidential, except as may be otherwise necessary in connection with the filing of Tax Returns or claims with respect to any Tax.	
(g)      Tax Treatment of Transaction . For federal Income Tax purposes, the sale of the Units pursuant to this Agreement will be treated, pursuant to Revenue Ruling 99-6, (i) by the Buyer, as a purchase of Company assets and, (ii) by Sellers, as a sale of Units. Except as required by Law, Buyers and Sellers will not take any Tax position contrary to this treatment on any Tax Return, internal accounting record, external report, or any other document in which the Tax treatment of these transactions may be disclosed
(h)      Purchase Price Allocation . Sellers and Buyer agree that the Purchase Price shall be allocated among the Company’s assets (or group of assets) in accordance with the applicable provisions of Section 1060 of the Code and the purchase price allocation methodology set forth on Schedule 10.5(h) (the “ Purchase Price Allocation ”). A draft of the Purchase Price Allocation (“ Purchase Price Allocation Schedule ”) shall be prepared by Sellers and delivered to Buyer within sixty (60) days following the Closing Date. If Buyer notifies Seller in writing that Buyer objects to one or more items reflected in the Purchase Price Allocation Schedule, Sellers and Buyer shall negotiate in good faith to resolve such dispute; provided, however, that if Sellers and Buyer are unable to resolve any dispute with respect to the Purchase Price Allocation Schedule within ninety (90) days following the Closing Date, such dispute shall be considered a Disputed Item to be resolved by the Arbitrator. Sellers and Buyer each agree to report, and to cause their respective Affiliates to report, the federal, state, and local income and other Tax consequences of the transactions contemplated herein, and in particular to report the information required by Section 1060(b) of the Tax Code and to jointly prepare Form 8594 (the Asset Acquisition Statement under Section 1060 of the Tax Code) as promptly as possible following the Closing Date in a manner consistent with the Purchase Price Allocation Schedule, as may be revised to take into account subsequent adjustments to the Purchase

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Price, including any adjustments pursuant to the Agreement to determine the Purchase Price. Unless there has been a Final Determination (as defined in Section 1313(a) of the Code) to the contrary, Sellers and Buyer, severally and not jointly, covenant and agree, for all Tax purposes, including all Tax Returns and any Tax controversies, not to take (and to cause any Affiliate or successors to their assets or businesses not to take) any position inconsistent with the Purchase Price Allocation Schedule (including any revised schedules from and after the date of revision) prepared pursuant to this Section 10.5(h) or any other provision of this Agreement; provided , however , that nothing contained herein shall prevent Buyer or Sellers from settling any proposed deficiency or adjustment by any Governmental Authority based upon or arising out of the allocation set forth in the Purchase Price Allocation Schedule, and neither Buyer nor Sellers shall be required to litigate before any court any proposed deficiency or adjustment by any Governmental Authority challenging the allocation set forth in the Purchase Price Allocation Schedule.
10.6      Confidentiality .
(a)      Definition . As used in this Section 10.6 , “ Confidential Information ” means any of the following information held or used by or relating to the Cobalt Companies: (1) Trade Secrets; (2) information concerning product specifications, data, know-how, formulae, compositions, processes, designs, sketches, photographs, graphs, drawings, samples, inventions and ideas, past, current, and planned research and development, current and planned manufacturing or distribution methods and processes, computer hardware, software, database technologies, systems, structures and architectures; (3) information concerning the business and affairs of the Cobalt Companies, including historical and current financial statements, financial projections and budgets, Tax Returns and accountants’ materials, historical, current, and projected sales, capital spending budgets and plans, business plans, strategic plans, marketing and advertising plans, publications, client and customer and prospect lists and files, current and anticipated customer requirements, price lists, market studies, contracts, the names and backgrounds of key personnel and personnel training techniques and materials; and (4) any and all other confidential information held or used by or relating to the Cobalt Companies.

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(b)      Obligation . Each Restricted Party acknowledges the confidential and proprietary nature of the Confidential Information and agrees that such Restricted Party will and will cause its Affiliates and their respective executors, representatives, successors and assigns to (except solely on behalf of Buyer to the extent employed or engaged by Buyer), from and after the Closing Date: (1) keep the Confidential Information confidential and deliver promptly to Buyer, or immediately destroy at Buyer’s option, all embodiments and copies of the Confidential Information that are in such Restricted Party’s possession; (2) not use the Confidential Information for any reason or purpose (except that such Restricted Party can use Confidential Information that was in the possession of such Restricted Party prior to the Closing or was or is furnished by Buyer or the Company in accordance with this Agreement, to the extent necessary in connection with the filing of such Restricted Party’s Tax Returns); and (3) without limiting the foregoing except as provided above, not disclose the Confidential Information to any Person, except with Buyer’s prior written consent.
(c)      Exceptions . With respect to a particular Restricted Party, Section 10.6 does not apply to that part of the Confidential Information (1) that becomes generally available to the public other than as a result of a breach of this Section 10.6 ; (2) that becomes was available to such Restricted Party on a non-confidential basis from a source that is not and was not prohibited from disclosing such information to such Restricted Party by a contractual, legal or fiduciary obligation; or (3) was independently developed by or on behalf of such Restricted Party without use or reference to the Confidential Information. Confidential Information will not be deemed “ generally available to the public ” merely because it is included or incorporated in more general information that is publicly available or because it combines features which individually may be publicly available.
(d)      Obligated Disclosure . If any Restricted Party (or any of its Affiliates or their respective executors, representatives, successors and assigns) becomes compelled by deposition, interrogatory, request for documents, subpoena, civil investigative demand, governmental investigation or similar process to make any disclosure that is prohibited by this Section 10.6 , such Restricted Party will, to the extent legally permissible, provide Buyer with prompt notice of such compulsion so that Buyer may seek an appropriate protective order or other appropriate remedy or waive compliance with the provisions of this Section 10.6 . In the absence of a protective order or other remedy, such Restricted Party, Affiliate, executor, representative, successor or assign may disclose that portion (and only that portion) of the Confidential Information that, based upon the opinion of such Restricted Party’s outside counsel, it is legally compelled to disclose; provided , however , that such Restricted Party will use commercially reasonable efforts to obtain written assurance that any Person to whom any Confidential Information is so disclosed will accord confidential treatment to such Confidential Information.

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10.7      Transfer of Life Insurance Policies . Within 30 days after the Closing, the Cobalt Companies will transfer their respective policy holder interests in term life insurance policies on the lives of Gary Schultz, Garry Lambert, Sean Callan, Terry Clark and Bill Wallisch to the applicable insured Person (if such transfer is permitted by such policies).
10.8      Post-Closing Access . For a period of six years after the Closing Date, Sellers and their authorized representatives shall have reasonable access to (for the purpose of examining and copying at Sellers’ expense) the books and records of the Cobalt Companies relating to periods prior to the Closing Date, to the extent that such access may reasonably be required in connection with the preparation of Tax Returns, Tax audits or the defense or prosecution of third party Proceedings. Such access shall be afforded by Buyer upon receipt of reasonable advance notice and during normal business hours and shall be contingent on execution and delivery to the Company of a reasonable and customary confidentiality agreement. Notwithstanding the foregoing, the Cobalt Companies shall not be obligated to provide Sellers’ with any information or access pursuant to this Section 10.8 where it would result in disclosure of information or materials protected by attorney client or similar privileges or contravene any applicable Law or if it is in relation to an indemnification claim pursuant to Article 9 hereof or any other dispute between the parties.
10.9      Buyer Obligation for Company Performance . After the Closing, Buyer will cause the Company to perform all of its obligations under this Agreement, in any case that are to be performed after the Closing.
10.10      Pending Litigation
******    

___________________________________
****** CONFIDENTIAL TREATMENT: MALIBU BOATS, INC. HAS REQUESTED THAT THE OMITTED PORTIONS OF THIS DOCUMENT, WHICH ARE INDICATED BY ******, BE AFFORDED CONFIDENTIAL TREATMENT. MALIBU BOATS, INC. HAS SEPARATELY FILED THE OMITTED PORTIONS OF THE DOCUMENT WITH THE SECURITIES AND EXCHANGE COMMISSION.

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11.      Definitions . In addition to the other definitions contained in this Agreement, the following definitions will apply for purposes of this Agreement:
“ 401(k) Plan ” has the meaning set forth in Section 6.5(c) .
“ AAA ” has the meaning set forth in Section 12.8(a) .
“ Accounting Standards ” means GAAP consistently applied and including the same accounting principles, policies, practices, methodologies, and classifications applied in the preparation of the consolidated balance sheet of the Company and its Subsidiaries as of September 30, 2016, in each case, to the extent consistent with GAAP, except that, in calculating inventory and receivables, there will be no “bill and hold” receivables recognized at Closing, and except that the Reference Balance Sheet and Closing Date Balance Sheet need not include footnotes.
“ Acquisition Proposal ” has the meaning set forth in Section 6.11 .
“ Affiliate ” has the meaning set forth in Rule 12b-2 of the regulations promulgated under the Securities Exchange Act of 1934, as amended.
“ Agreement ” has the meaning set forth in the Preamble.
“ Agreement Date ” has the meaning set forth in the Preamble.
“ Allocation Schedule ” has the meaning set forth in Section 1.4(a) .
“ Ancillary Agreements ” means the Escrow Agreement and all other agreements executed in connection with the transactions contemplated by this Agreement.
“ Arbitrator ” has the meaning set forth in Section 1.5(c) .
“ Bankruptcy Exceptions ” has the meaning set forth in Section 3.2 .
“ Base Purchase Price ” means $130,000,000.
“ Benefit Plan ” means each “employee benefit plan,” as defined in Section 3(3) of ERISA, and each and every other written, unwritten, formal or informal plan, Contract, program, policy or other arrangement involving direct or indirect compensation (other than workers’ compensation, unemployment compensation and other government programs), employment, severance, consulting, disability benefits, supplemental unemployment benefits, vacation benefits, retirement benefits, deferred compensation, profit-sharing, bonuses, stock options, stock appreciation rights, other forms of incentive compensation, post-retirement insurance benefits, or other benefits, entered into, maintained or contributed to by the Cobalt Companies or with respect to which the Cobalt Companies have or may in the future have any Liability (contingent or otherwise).
“ business day ” means a day other than Saturday, Sunday or any day on which banks located in Tennessee or Kansas are authorized or obligated to close.

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“ Buyer ” has the meaning set forth in the Preamble.
“ Buyer Credit Agreement ” has the meaning set forth in Section 12.12 .
“ Buyer Employee Plan ” has the meaning set forth in Section 6.5(b) .
“ Buyer Parties ” has the meaning set forth in Section 9.2(a) .
“ Cash ” means cash and cash equivalents (including certificates of deposit, marketable securities, short term investments, and outstanding checks that have been deposited but not yet cleared if such deposits clear after Closing and if such deposits relate to assets that have not already been counted in Closing Working Capital, but excluding restricted cash and landlord deposits, and reduced for issued but uncleared checks if liabilities related to such checks have not already been counted in Closing Working Capital).
“ Charter Documents ” means, as to a Person, such Person’s certificate of incorporation, formation or registration (including, if relevant, certificates of change of name and certificates of designation, if any), memorandum of association, articles of association or incorporation, charter, by-laws, trust deed, trust instrument, partnership, operating agreement, limited liability company, joint venture or shareholders’ agreement or equivalent documents, in each case, as amended.
“ Closing ” has the meaning set forth in Section 2.1 .
“ Closing Cash ” means the Cash on hand of the Cobalt Companies as of immediately prior to the Closing (and without giving effect to the Closing), calculated in accordance with the Accounting Standards.
“ Closing Date ” has the meaning set forth in Section 2.1 .
“ Closing Date Balance Sheet ” has the meaning set forth in Section 1.5(a) .
“ Closing Indebtedness ” means the Indebtedness of the Cobalt Companies as of immediately prior to the Closing (and without giving effect to the Closing), calculated in accordance with the Accounting Standards, but excluding any Indebtedness included as part of the Closing Working Capital, Earnout Payments, or Company Transaction Cost.
“ Closing Statement ” has the meaning set forth in Section 1.5(a) .
“ Closing Working Capital ” means the Working Capital of the Cobalt Companies as of the open of business on the Closing Date.
“ Cobalt Companies ” means the Company and its Subsidiaries, collectively, and “ Cobalt Company ” means any one of the Cobalt Companies.
“ Common Units ” has the meaning set forth in the Recitals.

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“ Company ” has the meaning set forth in the Preamble.
“ Company Bonus Payments ” means (i) the bonus payments adopted by the Company prior to the Closing payable to then-active employees of the Cobalt Companies as of immediately prior to the Closing, in the amounts specified in Schedule 2.2(a)(4) , but excluding any such person and corresponding amount specified in such Schedule if such person is not an employee of the Cobalt Companies as of immediately prior to the Closing, together with (ii) the employer portion of any payroll, social security, unemployment or similar Tax and any applicable associated costs (including workers compensation and 401k match) in respect of such payments.
“ Company Owned Intellectual Property Rights ” means all Intellectual Property Rights owned or purported to be owned by the Cobalt Companies, including all Registered Intellectual Property Assets.
“ Company Parties ” means the Parties (other than Buyer and Malibu Boats, Inc.).
“ Company Property ” has the meaning set forth in Section 3.12(b) .
“ Company Transaction Cost ” means (i) all fees, costs and expenses payable to third parties (including the Company’s attorneys’, accountants’, other professional fees, broker’s fees, costs and expenses) incurred by or on behalf of any Cobalt Company on or prior to the Closing in connection with the transactions contemplated this Agreement, the preparation and negotiation of this Agreement and the other documents contemplated by this Agreement and the performance of this Agreement and the consummation of the transactions contemplated by this Agreement, whether or not invoiced or billed prior to Closing, that remain unpaid as of the Closing (but without giving effect to the Closing) other than costs or expenses of the Cobalt Companies incurred in performance of Section 6.12 , (ii) all bonuses, change-of-control payments, retention, severance or other payments or forms of compensation that are created, accelerated, accrued or become payable by any Cobalt Company as a result of the Closing or the transactions contemplated by this Agreement (together with the employer portion of all payroll Taxes incurred (or expected to be incurred) by any Cobalt Company and any applicable associated costs (including workers compensation and 401k match) in connection with such payments), including the Company Bonus Payments, but excluding the Earnout Payments and the FAR Payments, and (iii) all Liabilities with respect to the matters set forth on Schedule 9.2(a)(4) .
“ Company’s knowledge ” or “ knowledge of the Company ” means, with respect to any matter, the actual knowledge of any of William Paxson St. Clair, Jr., Bill Wallisch, Terry Clark or Gary Schultz or the knowledge that any such individuals would have after making (i) reasonable review of the written and electronic documents in such Person’s possession and (ii) reasonable inquiry of the individuals employed by the Cobalt Companies charged with managerial, administrative or operational responsibility for such matters.
“ Confidential Information ” has the meaning set forth in Section 10.6(a) .
“ Continuing Employee ” has the meaning set forth in Section 6.5(a) .

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“ Contract ” has the meaning set forth in Section 3.3(a)(3) .
“ Debt Arrangements ” means (i) that certain Credit Agreement, dated as of September 8, 2014, by and between JPMorgan Chase Bank, N.A. and the Company, and (ii) that certain ISDA 2002 Master Agreement, dated as of December 23, 2014, by and between JPMorgan Chase Bank, N.A. and the Company.
“ Debt Financing ” has the meaning set forth in Section 6.12 .
“ Debt Payoff Amounts ” has the meaning set forth in Section 1.3(c) .
“ Debt Payoff Letters ” has the meaning set forth in Section 1.3(c) .
“ Disclosure Schedule ” means the Disclosure Schedule delivered by the Company and Sellers to Buyer concurrently with the execution and delivery of this Agreement.
“ Dispute ” has the meaning set forth in Section 12.8(a) .
“ Disputed Items ” has the meaning set forth in Section 1.5(c) .
“ DOL ” has the meaning set forth Section 3.20(b) .
“ Earnout Payments ” means the amounts owed by the Company as of the Closing Date to certain current and former holders of Units of the Company under the Redemption Agreements, in each case, which amounts are set forth on Schedule 2.2(a)(3) .
“ Environmental and Safety Requirements ” means all applicable foreign, federal, state, and local statutes, regulations, ordinances, or similar provisions having the force or effect of Law, all judicial and administrative orders and determinations, all contractual obligations, and all common law concerning public health and safety, worker health and safety, and pollution or protection of the environment, including without limitation all those relating to the presence, use, production, generation, handling, transportation, treatment, storage, disposal, distribution, labeling, testing, processing, discharge, Release, threatened release, control, or cleanup of any Hazardous Substance, hazardous materials or wastes, chemical substances or mixtures, pesticides, pollutants, contaminants, toxic chemicals, petroleum products or byproducts, asbestos, polychlorinated biphenyls, noise, or radiation.
“ Environmental Damages ” has the meaning set forth in Section 9.2(e)(3) .
“ Environmental Representations ” means the representations and warranties set forth in Section 3.21 .
“ Equity Interests ” means, with respect to any Person that is a legal entity, any and all shares of capital stock, limited liability company interests, membership interests, profits interests, ownership interests, equity interests, stock or limited liability company units, “phantom” stock (or limited liability company units) or rights, equity appreciation rights, or other securities, or any options, warrants, calls, rights, commitments, conversion privileges or preemptive or other rights or Contracts to purchase or otherwise acquire any of the foregoing.
“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended.

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“ ERISA Affiliate ” means any Person that, together with the Cobalt Companies, would be deemed a “single employer” within the meaning of Section 414(b), (c), (m) or (o) of the Code.
“ Escrow Agent ” has the meaning set forth in Section 1.4(a) .
“ Escrow Agreement ” has the meaning set forth in Section 1.4(a) .
“ Escrow Amounts ” has the meaning set forth in Section 1.4(a) .
“ Estimated Closing Statement ” has the meaning set forth in Section 1.3(a) .
“ Excluded Representations ” means those representations and warranties in Article 3 or Article 4 to the extent that a Loss resulting from, in connection with, or relating to their breach or inaccuracy is excluded under Section 5(e), (f), (g), (i), or (j) of the R&W Insurance Policy.
“ Excluded Warranty Claims ” has the meaning set forth in Section 3.16(b) .
“ Facility ” has the meaning set forth in Section 9.2(e)(3) .
“ FAR ” means any future appreciation rights unit or other award under the FAR Plan.
“ FAR Payments ” means the amount of any payments due in connection with the Closing or after the date hereof under the FAR Plan in respect of FARs or otherwise (including the employer portion of any payroll, social security, unemployment or similar Tax in respect of such payments).
“ FAR Plan ” means the Company’s Future Appreciation Rights Plan, as amended.
“ Financial Statements ” has the meaning set forth in Section 3.7 .
“ Financing Sources ” has the meaning set forth in Section 6.12 .
“ First Period Claims ” has the meaning set forth in Section 9.2(b)(3) .
“ Foreign Master Factoring Agreements ” means the factoring agreements by and between the Company and Wells Fargo Bank, National Association or one or more of its Affiliates and any of their respective successors or assigns, and all financing schedules, credit requests, deeds and other letters, agreements or documents entered into in connection therewith, as amended, restated, modified or supplemented from time to time or any successor agreement.
“ Fundamental Representations ” means the representations and warranties set forth in Section 3.2 , Section 3.5 , Section 3.6 , Section 3.13 , Section 4.2 , Section 4.3(b) and Section 4.5 .
“ GAAP ” means United States generally accepted accounting principles, consistently applied.
“ Governmental Authority ” means any national, federal, territorial, state or local governmental authority, quasi-governmental authority, court, commission, board, bureau, agency or instrumentality, or any regulatory, administrative or other department, agency, or any political or other subdivision, department or branch of any of the foregoing whether foreign or domestic.

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“ Hazardous Substance ” means any hazardous substance as defined in 42 U.S.C. § 9601(14), any hazardous waste as defined by 42 U.S.C. §6903(5), any pollutant or contaminant as defined by 42 U.S.C. §9601(33) or any toxic substance, contaminant, oil or fraction thereof, hazardous material or other chemical or substance (including asbestos in any form, urea formaldehyde, lead-based paint, perchlorate or polychlorinated biphenyls) regulated by or forming the basis of Liability under any Environmental and Safety Requirements.
“ Income Tax ” or “ Income Taxes ” means any and all U.S. or non-U.S. federal, national, state or local Tax calculated with respect to, or measured by net income or any franchise or business profits Tax incurred in lieu of such a Tax, including any interest, penalties or other additions thereto.
“ Income Tax Return ” means any Tax Return with respect to Income Taxes.
“ Indebtedness ” means the Cobalt Companies’ liabilities and obligations (i) required to be capitalized in accordance with GAAP, (ii) for borrowed money, (iii) evidenced by notes, bonds or debentures, or similar instruments, (iv) under banker’s acceptance, letters of credit or similar facilities in each case that has been drawn or claimed against, (v) in respect of the purchase, redemption, retirement, or acquisition of any Equity Interests of any Cobalt Company (other than the Earnout Payments and FAR Payments to the extent counted as a reduction to the Purchase Price at Closing), (vi) with respect to hedging, commodity or interest rate swap, or similar financial arrangements, (vii) for any interest, premium or penalty required with respect to repayment of any of the foregoing or following, (viii) under any vendor financing arrangements or factoring arrangements (including the Foreign Master Factoring Agreements) in respect of pending claims or demands pursuant to repurchase obligations of the Cobalt Companies thereunder, (ix) for the deferred purchase price of equity, assets or other property or services, (x) for all other financial obligations that would be considered debt in accordance with GAAP (other than, subject to clause (viii), the Foreign Master Factoring Agreements) and (xi) for any of the foregoing of any third party that is guaranteed, directly or indirectly, by any Cobalt Company or for which any Lien is imposed on any asset of any Cobalt Company; but excluding trade payables incurred in the ordinary course of business to the extent included as a current liability in Closing Working Capital.
“ Indemnification Objection ” has the meaning set forth in Section 9.5(a) .
“ Indemnified Party ” has the meaning set forth in Section 9.4 .
“ Indemnifying Party ” has the meaning set forth in Section 9.4 .
“ Indemnity Escrow Account ” has the meaning set forth in Section 1.4(a) .
“ Indemnity Escrow Amount ” has the meaning set forth in Section 1.4(a) .
“ Indemnity Escrow Period ” has the meaning set forth in Section 1.4(c)(2) .

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“ Insider ” has the meaning set forth in Section 3.4 .
“ Intellectual Property Rights ” means all common law and statutory rights throughout the world arising out of, or associated with, the following: (i) all registered and unregistered trademarks, service marks, trade names, corporate names, brand names, trade dress, logos, and other identifiers of source or goodwill, together with all registrations and applications for registration thereof, all goodwill associated therewith (“ Trademarks ”), (ii) domain names and websites, and registrations therefor, (iii) rights in trade secrets and confidential information under applicable Law, including all rights in know-how, developments, inventions, processes, ideas, data, or other confidential information that provide any Person with advantages over competitors (“ Trade Secrets ”), (iv) all U.S. and foreign patents and applications therefor, and all reissues, divisions, re-examinations, revisions, renewals, extensions, provisionals, continuations, and continuations-in-part thereof, and equivalent or similar rights anywhere in the world in inventions and discoveries and any improvements thereto, (v) all registered or unregistered copyrights, mask work rights, all copyright registrations, applications for registration and renewals, and all rights corresponding the foregoing throughout the world, including rights to prepare, reproduce, perform, display, and distribute copyrighted works and copies, compilations and derivative works thereof, (vi) industrial designs, (vii) databases and data collections, (viii) moral and economic rights of authors and inventors, however denominated, and (ix) any rights equivalent or similar to any of the foregoing anywhere in the world, whether registered or unregistered.
“ Interim Financial Statements ” has the meaning set forth in Section 3.7(a) .
“ Inventory Count ” has the meaning set forth Section 6.16 .
“ IRS ” has the meaning set forth Section 3.20(b) .
“ Jill Trust ” has the meaning set forth in the Preamble.
“ Known Environmental Conditions ” has the meaning set forth in Section 9.2(e)(3) .
“ Law ” means any federal, state, local, municipal, foreign or other law, statute, legislation, constitution, rule of common law or equity, resolution, ordinance, code, order, edict, decree, proclamation, treaty, convention, rule, regulation, permit, ruling, directive, pronouncement, requirement, specification, determination, decision, opinion or interpretation that is, has been issued, enacted, adopted, passed, approved, promulgated, made, implemented or otherwise put into effect by or under the authority of any Governmental Authority.
“ Leased Real Property ” has the meaning set forth in Section 3.12 .
“ Leases ” has the meaning set forth in Section 3.12 .
“ Liabilities ” means liabilities, obligations or commitments of any nature whatsoever, asserted or unasserted, known or unknown, absolute or contingent, accrued or unaccrued, matured or unmatured or otherwise, whether properly reflected under GAAP as a liability or a charge or reserve against an asset or equity account or not, and whether the amount thereof is readily ascertainable or not.

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“ Lien ” means any security interest, pledge, bailment (in the nature of a pledge or for purposes of security), mortgage, deed of trust, the grant of a power to confess judgment, conditional sales and title retention agreement (including any lease in the nature thereof), charge, encumbrance, or other similar arrangement or interest in real or personal property.
“ Limited Liability Company Agreement ” means the Amended and Restated Limited Liability Company Agreement of Cobalt Boats, LLC dated March 1, 2009, as amended (including by the First Amendment to Amended and Restated Limited Liability Company Agreement of Cobalt Boats, LLC dated September 5, 2014) and currently in effect.
“ Losses ” has the meaning set forth in Section 9.2(a) .
“ Main Facility ” means the Real Property commonly known as 1715 N. 8 th Street, Neodesha, Kansas.
“ Material Adverse Effect ” means any change, event, circumstance or effect that has had, or would reasonably be expected to have, individually or in the aggregate, (a) a material adverse effect on the business, assets, properties, condition (financial or otherwise) or operating results of the Cobalt Companies, taken as a whole or (b) a material impairment on the ability of any Party (other than Buyer) to perform or consummate the transactions contemplated by this Agreement; provided , however , that clause (a) of Material Adverse Effect will not include any change, event, circumstance or effect arising after the date hereof resulting from: (i) entering into this Agreement or the announcement of the transactions contemplated by this Agreement; (ii) changes in general market, economic, financial or political conditions (including changes in commodity prices, fuel supply or transportation markets, interest or rates) in the United States or worldwide; (iii) changes in conditions or developments generally applicable to the boat manufacturing industry; (iv) acts of God, including hurricanes, tornados, earthquakes, storms or other naturally occurring events; (v) civil unrest, any outbreak of disease or hostilities, terrorist activities, war or any similar disorder; and (vi) a change in GAAP or Laws applicable to the Cobalt Companies ( provided that, in the case of each of clauses (ii) through (vi), such change, event, circumstance or effect does not affect the Cobalt Companies in a disproportionate manner relative to other businesses in the industry in which they operate).
“ Material Contract ” has the meaning set forth in Section 3.14(a) .
“ MBUU Common Stock ” has the meaning set forth in Section 2.2(d) .
“ MBUU Share Amount ” has the meaning set forth in Section 1.4(a) .
“ Multiemployer Plan ” has the meaning set forth in Section 3(37) of ERISA.
“ OFAC ” has the meaning set forth in Section 3.25(b) .
“ Order ” means any judgment, order, injunction, writ, subpoena, stipulation, award or decree of any Governmental Authority and any ruling or award in any arbitration Proceeding, and shall include any Contract with any Governmental Authority in connection with any Proceeding.

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“ Overstatement ” has the meaning set forth in Section 1.5(d)(2) .
“ Pack Trust ” has the meaning set forth in the Preamble.
“ Party ” and “ Parties ” have the meaning set forth in the Preamble.
“ Pending Litigation ” means Cobalt Boats, LLC v. Sea Ray Boats, Inc. and Brunswick Corporation, United States District Court, Eastern District of Virginia, Norfolk Division, Case No.:2:15-CV-00021-HCM-LRL , and any appeals, remands or collateral Proceedings directly related to or derived from such lawsuit.
“ Permit ” means any authorization, license, permit, franchise, certificate, approval, exemption, registration, filing or clearance, or any waiver of any of the foregoing, required to be issued or granted by or submitted to any Governmental Authority.
“ Permitted Liens ” means (i) Liens for Taxes and other governmental charges and assessments that are not yet due and payable, (ii) statutory Liens of carriers, warehousemen, mechanics, and materialmen and other like Liens arising in the ordinary course of business in respect of obligations that are not yet due and payable ( provided that lien statements have not been filed or such Lien otherwise perfected), (iii) statutory Liens in favor of lessors arising in connection with any property leased to the Cobalt Companies for sums not yet due, (iv) non-exclusive licenses of Company Owned Intellectual Property Rights, (v) any Lien terminated at or prior to the Closing that secured any of the Debt Arrangements and (vi) any Liens set forth on Schedule 11(a) .
“ Person ” means an individual, a partnership, a corporation, an association, a joint stock corporation, a limited liability company, a trust, a joint venture, an unincorporated organization, a legal entity or a Governmental Authority.
“ Pontoon Adjustment ” means an amount equal to the product of (a) $5,000, multiplied by (b) the number of new Company pontoon boats held in inventory by the Company or any of its dealers or distributors as of immediately prior to the Closing, where, for this purpose, a “new” Company pontoon boat means any Marker One or Company-built pontoon boat that has not been registered by a retail customer with a state and for a Company warranty, regardless of model year.
“ Pre-Closing Tax Period ” means (i) any taxable period ending on or before the Closing Date and (ii) the portion of any Straddle Period ending on the Closing Date.
“ Pre-Closing Tax Refund ” has the meaning set forth in Section 10.5(e) .
“ Pre-Closing Tax Return ” has the meaning set forth in Section 10.5(a) .
“ Preferred Units ” has the meaning set forth in the Recitals.
“ Pro Rata FE Interest ” means (a) with respect to the Pack Trust, 33.15%, (b) with respect to the Jill Trust, 33.15%, (c) with respect to William Paxson St. Clair, Jr., 17.80%, and (d) with respect to Mary Whitney Callan, 15.90%.

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“ Pro Rata Interest ” means, with respect to any Unitholder, the number of Units held by such Unitholder immediately prior to the Closing, divided by the aggregate number of Units outstanding immediately prior to the Closing.
“ Proceeding ” means any claim, allegation, complaint, audit, action, mediation, investigation, lawsuit, hearing, proceeding, litigation, or arbitration, whether or not by or before any Governmental Authority.
“ Purchase Price ” has the meaning set forth in Section 1.2 .
“ Purchase Price Allocation ” has the meaning set forth in Section 10.5(h) .
“ Purchase Price Allocation Schedule ” has the meaning set forth in Section 10.5(h) .
“ Purchase Price Components ” means the Closing Cash, Working Capital Surplus (if any), Working Capital Shortfall (if any), Earnout Payments, Closing Indebtedness, FAR Payments, Company Transaction Cost and Pontoon Adjustment components of the Purchase Price.
“ Purchase Price Escrow Account ” has the meaning set forth in Section 1.4(a) .
“ Purchase Price Escrow Amount ” has the meaning set forth in Section 1.4(a) .
“ R&W Insurance Policy ” means an insurance policy obtained by Buyer in connection with this Agreement with respect to the representations and warranties of the Company and Sellers in this Agreement and the other matters covered by such policy, issued pursuant to that certain binder agreement dated the Agreement Date, by and between Buyer and Great American E&S Insurance Company.
“ Real Property ” means all of the parcels of real property (other than the Leased Real Property) in Neodesha, Kansas upon which the Company’s business operations are conducted, and specifically including, but not limited to, those parcels of real property whose addresses are set forth on Schedule 3.12(b)(i).
“ Real Property Occupancy Agreement ” has the meaning set forth in Section 3.12(b) .
“ Redemption Agreement ” means each Redemption Agreement of the Company dated September 9, 2014.
“ Reference Balance Sheet ” has the meaning set forth in Section 1.3(a) .
“ Registered Intellectual Property Assets ” has the meaning set forth in Section 3.17 .
“ Release ” means any spilling, leaking, pumping, pouring, emitting, discharging, depositing, escaping, leaching, dumping or other releasing into the indoor or outdoor environment, whether intentional or unintentional.
“ Released Claims ” has the meaning set forth in Section 6.7 .
“ Released Parties ” has the meaning set forth in Section 6.7 .

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“ Restricted Area ” has the meaning set forth in Section 6.6(a) .
“ Restricted Business ” has the meaning set forth in Section 6.6(a) .
“ Restricted Party ” means each Unitholder and each of William Paxson (Pack) St. Clair, Jill St. Clair and Sean Callan.
“ Restriction Period ” has the meaning set forth in Section 6.6(e) .
“ Retained Amount ” has the meaning set forth in Section 1.4(c)(2) .
“ Schedule ” means that portion of the Disclosure Schedule related to the specified section or subsection of this Agreement.
“ Second Period Cap ” has the meaning set forth in Section 9.2(b)(3) .
“ Securities Act ” has the meaning set forth in Section 4.6(a) .
“ Sellers ” has the meaning set forth in the Preamble.
“ Seller Parties ” has the meaning set forth in Section 9.3 .
“ Straddle Period ” means a taxable year or period beginning before and ending after, the Closing Date.
“ Subsidiary ” or “ Subsidiaries ” means, with respect to any Person, (i) any other Person of which such first Person, either alone or together with any other Subsidiary of it, owns, directly or indirectly, equity interests representing more than 50% of the voting power of the outstanding voting securities or more than 50% of the outstanding economic interests or (ii) any partnership or other Person of which such first Person serves as a general partner, managing member, or trustee.
“ Tax ” means (i) any and all federal, state, local, or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, natural resources, customs, duties, capital stock, franchise, profits, withholding, social security, unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition to the tax, whether disputed or not, and including any express or implied obligation of any Cobalt Company to indemnify or otherwise assume or succeed to the tax Liability of any other Person, (ii) any and all Liability for amounts described in clause (i) of any member of an affiliated, consolidated, combined or unitary group of which any of the Cobalt Companies (or any predecessor of the foregoing) is or was a member on or prior to the Closing Date and (iii) any and all Liability for amounts described in clause (i) of any Person imposed on any of the Cobalt Companies as a transferee or successor, by contract, pursuant to any Law.
“ Tax Return ” means any return, declaration, report, claim for refund, information return, or other document, including any related or supporting schedule, statement, information, or attachment, and including any amendment(s) filed or required to be filed in connection with the determination, assessment, or collection of Taxes of any party or the administration of any Laws or administrative requirements relating to any Taxes.

77

“ Third Party Claim ” has the meaning set forth in Section 9.4 .
“ Threshold ” has the meaning set forth in Section 9.2(b)(1) .
“ Title Company ” has the meaning set forth in Section 6.18(a) .
“ Title Policies ” has the meaning set forth in Section 6.18(a) .
“ Understatement ” has the meaning set forth in Section 1.5(d)(1) .
“ Unitholders ” has the meaning set forth in the Preamble.
“ Units ” has the meaning set forth in the Recitals.
“ Unresolved Claims ” has the meaning set forth in Section 1.4(c)(2) .
“ Waiving Parties ” has the meaning set forth in Section 12.10(a) .
“ WARN Act ” has the meaning set forth in Section 3.19(c) .
“ Working Capital ” means the amount of the Cobalt Companies’ total current assets set forth on Schedule 11(b) less the amount of the Cobalt Companies’ total current liabilities set forth on Schedule 11(c) , calculated in accordance with the Accounting Standards.
“ Working Capital Shortfall ” has the meaning set forth in Section 1.3(b) .
“ Working Capital Surplus ” has the meaning set forth in Section 1.3(b) .
“ Working Capital Target ” has the meaning set forth in Section 1.3(b) .
12.      Miscellaneous.
12.1      No Third Party Beneficiaries . Except as expressly stated in this Agreement (including the rights conferred upon the Buyer Parties and Seller Parties pursuant to Article 9 ), this Agreement does not confer any rights or remedies upon any Person other than the Parties and their respective successors and permitted assigns and the Financing Sources as set forth in Section 12.12 .
12.2      Entire Agreement . This Agreement (including all attached Exhibits and Schedules) and the Ancillary Agreements constitute the entire agreement between the Parties regarding the subject matter of this Agreement and supersedes any prior or contemporaneous understandings, agreements, or representations by or between the Parties, written or oral, that may have related in any way to the subject matter of this Agreement.

78

12.3      Assignment . No Party may assign its rights or delegate its duties or obligations under this Agreement without the prior written approval of all other Parties to the Agreement; provided , however , that each of Buyer and, after the Closing, the Cobalt Companies may assign their rights and interests under this Agreement to any lender under Buyer’s or its Affiliates’ financing arrangements. Any attempted assignment or delegation in violation of this Section 12.3 will be null and void and without legal effect.
12.4      Counterparts . The Parties may execute this Agreement in multiple counterparts, each of which will be deemed an original, and all of which together will constitute one and the same instrument.
12.5      Headings . The section or article headings contained in this Agreement are for convenience only and do not affect in any way the meaning or interpretation of this Agreement.
12.6      Notices .
(a)      Notice Addresses . Any notice required or permitted by this Agreement will be in writing, will be sent to Buyer, Sellers, or the other Restricted Parties (as applicable) at the address or electronic mail address indicated below, and will be deemed to have been given (1) when delivered personally to the recipient, (2) one or two business days after being deposited with a reputable overnight courier for next day or second day delivery (charges prepaid), respectively, or (3) when received via electronic mail, when directed to the relevant electronic mail address and receipt is confirmed by non-automated response:
Notices to Buyer or Malibu Boats, Inc. :
Malibu Boats, LLC
5075 Kimberly Way
Loudon, TN 37774
Attn: Wayne Wilson
Email: waynew@malibuboats.com
With a copy (which will not constitute notice) to:
O’Melveny & Myers LLP
1999 Avenue of the Stars, Suite 700
Los Angeles, CA 90067
Attn: Eric Zabinski
Email: ezabinski@omm.com

79

Notices to Sellers :
William Paxson St. Clair, Jr.
2625 Verona Road
Mission Hills, KS 66208
Email: paxsonstclair@icloud.com

Mary Whitney Callan
19735 East Woodhaven Road
Owasso, OK 74055
Email: whitneycallan@gmail.com

FE II, Inc.
451000 Bill Hardesty Lane
Afton, OK 74431
Attn: Pack St. Clair
Email: pack@cobaltboats.com

With a copy (which will not constitute notice) to:
Foulston Siefkin LLP
1551 N. Waterfront Pkwy, Suite 100
Wichita, Kansas 67206
Attn: William R. Wood II
Email: bwood@foulston.com

Notices to other Restricted Parties :
William Paxson (Pack) St. Clair
451000 Bill Hardesty Lane
Afton, OK 74431
Email: pack@cobaltboats.com

Jill St. Clair
451000 Bill Hardesty Lane
Afton, OK 74431
Email: poohof7@gmail.com

Sean Callan
19735 East Woodhaven Road
Owasso, OK 74055
Email: spcallan@gmail.com

With a copy (which will not constitute notice) to:
Foulston Siefkin LLP
1551 N. Waterfront Pkwy, Suite 100
Wichita, Kansas 67206

80

Attn: William R. Wood II
Email: bwood@foulston.com

Notices to other Parties :
William Paxson St. Clair Trust
905 NW Cedar Creek Lane
Lee’s Summit, MO 64081
Attn: Wayne Davidson
Email: dav3237@kc.rr.com

Jill Petrie St. Clair Trust
905 NW Cedar Creek Lane
Lee’s Summit, MO 64081
Attn: Wayne Davidson
Email: dav3237@kc.rr.com

St. Clair Cellars, LLC
451000 Bill Hardesty Lane
Afton, OK 74431
Attn: Pack St. Clair
Email: pack@cobaltboats.com

With a copy (which will not constitute notice) to:
Foulston Siefkin LLP
1551 N. Waterfront Pkwy, Suite 100
Wichita, Kansas 67206
Attn: William R. Wood II
Email: bwood@foulston.com

(b)      Change of Notice Address . Any Party may change the address or electronic mail address by giving the other Party notice in the manner set forth in Section 12.6(a) .
12.7      Governing Law . Except as provided in Section 12.12 , this Agreement will be governed by and construed it accordance with the laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.
12.8      Dispute Resolution .
(a)      Arbitration . Except as provided in Section 1.5 and Section 12.12 , any dispute or claim among any Parties arising out of or relating to this Agreement, including its negotiation, enforcement, validity or interpretation or an alleged breach, default or misrepresentation hereunder and the determination of the scope or applicability of this agreement to arbitrate (each, a “ Dispute ”) shall be finally resolved by arbitration in accordance with this Section. Such arbitration will be held in St. Louis, Missouri and will be conducted before a single arbitrator in accordance with the Commercial Arbitration Rules of the American Arbitration Association (the “ AAA ”).  Within 15 days after a Party’s delivery to the other Party of a demand for arbitration, the Parties will attempt to select the arbitrator by agreement, and if

81

successful, the arbitrator will administer the proceeding without the involvement of the AAA. If the Parties are unable to agree upon an arbitrator, the Party asserting the claim must file a demand for arbitration with the AAA, the arbitrator will be selected under the AAA process, and the AAA will administer the arbitration. The arbitrator will rule in accordance with applicable legal standards upon motions to compel or limit discovery and will have the authority to impose sanctions, including attorneys’ fees and costs, to the same extent as a court of law or equity, should the arbitrator determine that discovery was sought without substantial justification or that discovery was refused or objected to without substantial justification. The decision of the arbitrator will be written, will be in accordance with the laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule and this Agreement, will be binding and conclusive, and may be entered as a judgment in any court of competent jurisdiction. If any Party refuses to perform any or all of its obligations under the final arbitration award (following appeal, if applicable) within 15 days of such award being rendered, then any other Party may enforce the final award in any court of competent jurisdiction. The Party seeking enforcement of the arbitration award shall be entitled to recover from the other Party all costs, fees and expenses, including reasonable attorneys’ fees, incurred in obtaining and enforcing a judgment on the award. The Parties shall maintain the confidential nature of the arbitration proceeding and the award, including the arbitration hearing, except as may be necessary (i) to prepare for or conduct the arbitration hearing on the merits, (ii) in connection with a court application for a preliminary remedy or to confirm or challenge an award or its enforcement, or (iii) as required by applicable Law.
(b)      Notwithstanding anything to the contrary in Section 12.8(a) or Section 12.8(b) , the Parties further agree that irreparable damage, for which monetary damages (even if available) would not be an adequate remedy, could occur in the event that the Parties do not perform their obligations under the provisions of this Agreement in accordance with its specified terms or otherwise breach such provisions. The Parties acknowledge and agree that (i) each Party shall be entitled to seek an injunction, specific performance or other equitable relief in a court of competent jurisdiction, to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, in each case, without the need to post any bond or other security, this being in addition to any other remedy to which the Parties are entitled under this Agreement and (ii) the right of specific enforcement in favor of the Parties is an integral part of the transactions contemplated by this Agreement and without that right, none of the Parties would have entered into this Agreement.

82

(c)      Any Dispute or portion thereof that may not be arbitrated pursuant to applicable state or federal law may be heard only in a court of competent jurisdiction.
12.9      Amendments and Waivers . Except as provided in Section 12.12 , no amendment of any provision of this Agreement will be valid unless it is in writing and signed by Buyer and Sellers. No waiver by any Party of any default, misrepresentation, or breach of warranty or covenant under this Agreement, whether intentional or not, will apply to any prior or subsequent default, misrepresentation, or breach of warranty or covenant under this Agreement or affect in any other way any rights arising by virtue of any default, misrepresentation, or breach of warranty or covenant under this Agreement.
12.10      Legal Representations .
(a)      Each of the Parties to this Agreement hereby agrees, on its own behalf and on behalf of its directors, officers, employees and Affiliates, and each of their successors and assigns (all such parties, the “ Waiving Parties ”), that following the Closing, Foulston Siefkin LLP may serve as counsel to any directors or officers of a Cobalt Company or any Unitholders, other Restricted Parties, or their Affiliates in connection with any dispute, litigation, claim or proceeding arising out of or relating to this Agreement, notwithstanding representation of the Cobalt Companies before the Closing Date. Each of the Parties hereby does, and will cause each of the Waiving Parties to, expressly consent to the foregoing arrangements, and irrevocably waives (and will not assert) any actual or potential conflict of interest or any objection that may arise from any representation by Foulston Siefkin LLP expressly permitted by this Section. The Waiving Parties acknowledge that the foregoing provision applies whether or not Foulston Siefkin LLP provides legal services to the Cobalt Companies after the Closing Date.
(b)      Each of the Waiving Parties hereby irrevocably acknowledges and agrees that all communications and attorney work-product documentation between the Cobalt Companies, on the one hand, and their counsel, on the other hand, made in connection with the negotiation, preparation, execution and delivery of, and performance under, this Agreement by the Cobalt Companies (including the schedules and exhibits hereto), to the extent they are privileged communications and documentation between the Cobalt Companies and such counsel, the ownership of such privilege will not pass to Buyer following the Closing Date.
12.11      Interpretation . When a reference is made in this Agreement to Articles, Sections, exhibits, or schedules, such reference will be to an Article or Section of or exhibit or schedule to this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for reference purposes only and will not affect in any way the meaning or interpretation of this Agreement. Whenever the words “include,” “includes” or “including” are used in this Agreement, they will be deemed to be followed by the words “without limitation.” Whenever the words “hereof,” “hereby,” “herein,” “hereunder” and similar terms are used in this Agreement, they shall refer to this Agreement as a whole and not any particular Section or Article in which such words appear, any reference to a law shall include any amendment thereof or any successor thereto, and any rules and regulations promulgated thereunder and any references to any agreement, document or instrument means such agreement, document or instrument as amended or modified and in effect from time to time in accordance with the terms hereof and thereof and shall be deemed to refer to all addenda, exhibits and schedules thereto. Unless the context otherwise requires (a) “or” is disjunctive but not necessarily exclusive, (b) words in the singular include the plural and vice versa, (c) the use in this Agreement of a pronoun in reference to a party hereto includes the masculine, feminine or neuter, as the context may require, (d) terms used herein that are defined in GAAP have the meanings ascribed to them therein and (e) currency amounts referenced herein are in U.S. Dollars. With respect to

83

any determination of any period of time, “from” means “from and including” and “to” means “to but excluding.” Any reference to the “ordinary course of business” of any Person means the ordinary course of business of such Person consistent with past practice unless otherwise specified. References in Article 3 to documents or other materials “provided” or “made available” to Buyer or similar phrases mean that such documents or other materials were present (and available for viewing by the Company and its representatives) in the online data room hosted by Foulston Siefkin LLP at foulston.firmex.com on behalf of the Company for purposes of the transactions contemplated by this Agreement at least three business days prior to the date hereof. No provision of this Agreement will be interpreted in favor of, or against, any of the Parties to this Agreement by reason of the extent to which any such Party or its counsel participated in the drafting thereof or by reason of the extent to which any such provision is inconsistent with any prior draft hereof, and no rule of strict construction will be applied against any Party hereto. The Disclosure Schedule, as well as all other schedules and exhibits hereto, will be deemed part of this Agreement and included in any reference to this Agreement.
12.12      Financing Source Arrangements . Notwithstanding anything to the contrary contained in this Agreement, each of the Parties: (a) agrees that it will not bring or support any Person, or permit any of its Affiliates to bring or support any Person, in any Proceeding of any kind or description, whether in law or in equity, whether in contract or in tort or otherwise, against any Financing Source in any way relating to this Agreement or any of the transactions contemplated hereby, including any dispute arising out of or relating in any way to that certain Second Amended and Restated Credit Agreement dated the Agreement Date among Buyer, as borrower, the guarantors party thereto and the Financing Sources party thereto (the “ Buyer Credit Agreement ”) or the performance thereof or the financings contemplated thereby, in any forum other than the federal and New York State courts located in the Borough of Manhattan within the City of New York, except as required by applicable Law; (b) agrees that, except as specifically set forth in the Buyer Credit Agreement, all Proceedings (whether at law, in equity, in contract, in tort or otherwise) brought by or on behalf of a Party against any of the Financing Sources in any way relating to the Buyer Credit Agreement or the performance thereof or the financings contemplated thereby, shall be exclusively governed by, and construed in accordance with, the internal laws of the State of New York, without giving effect to principles or rules of conflict of laws to the extent such principles or rules would require or permit the application of Laws of another jurisdiction; and (c) hereby irrevocably and unconditionally waives any right such Party may have to a trial by jury in respect of any Proceeding (whether at law or in equity, in contract, in tort or otherwise) directly or indirectly arising out of or relating in any way to the Buyer Credit Agreement or the performance thereof or the financing contemplated thereby. Notwithstanding anything to the contrary contained in this Agreement, (i) the Company Parties and their respective subsidiaries, Affiliates, directors, officers, employees, agents, partners, managers, members or stockholders shall not have any rights or claims against any Financing Source in any way relating to this Agreement or any of the transactions contemplated hereby, or in respect of any oral representations made or alleged to have been made in connection herewith or therewith, including any dispute arising out of or relating in any way to the Buyer Credit Agreement or the performance thereof or the financings contemplated thereby, whether at law or in equity, in contract, in tort or otherwise and (ii) no Financing Source shall have any liability (whether in contract, in tort or otherwise) to any Company Party, or any of their respective subsidiaries, Affiliates, directors, officers, employees, agents, partners, managers, members or stockholders for any obligations or liabilities of any Party under this Agreement or for any Proceeding based on, in respect of, or by reason of, the transactions contemplated hereby or in respect of any oral representations made or alleged to have been made in connection herewith, including any dispute arising out of or relating in any way to the Buyer Credit Agreement or the performance thereof or the financings contemplated thereby, whether at law or in equity, in contract, in tort or otherwise. Notwithstanding anything to the contrary contained in this Agreement, the Financing Sources are intended third-party beneficiaries of, and shall be entitled to the protections of this Section 12.12 to the same extent as if the Financing Sources were parties

84

to this Agreement. This Section 12.12 , and Sections 12.1 , 12.7 , 12.8 , and 12.9 (to the extent of the cross-references to this Section 12.12 ) may not be amended, modified or supplemented, or any of its provisions waived, without the written consent of the Financing Sources, which consent may be granted or withheld in the sole discretion of the Financing Sources.
[ Signature page follows ]

85

The Parties have executed this Agreement as of the date first above written.

	
Company :	
 	
COBALT BOATS, LLC	
 	
By: /s/ William Paxson St. Clair, Jr.	
Name: William Paxson St. Clair, Jr.	
Title: Chief Executive Officer	

[SIGNATURE PAGE - UNIT PURCHASE AGREEMENT]

The Parties have executed this Agreement as of the date first above written.

	
Unitholders :	
 	
/s/ William Paxson St. Clair, Jr.	
William Paxson St. Clair, Jr.	
 	
/s/ Mary Whitney Callan	
Mary Whitney Callan	
 	
FE II, INC.	
 	
By: /s/ William Paxson St. Clair, Jr.	
Name: William Paxson St. Clair, Jr.	
Title: Chief Executive Officer	

[SIGNATURE PAGE - UNIT PURCHASE AGREEMENT]

The Parties have executed this Agreement as of the date first above written.

	
Other Restricted Parties :	
With respect to Sections 6.4 , 6.6 , 6.7 , 6.10 , 6.11 , 6.14 , 6.17 , 10.1 , 10.3 , 10.4  and 10.6  and Section 9.2(f)  and Article   12  only :	
 	
/s/ William Paxson (Pack) St. Clair	
William Paxson (Pack) St. Clair	
 	
/s/ Jill St. Clair	
Jill St. Clair	
 	
With respect to Sections 6.4 , 6.7 , 6.10 , 6.11 , 6.14 , 6.17 , 10.1 , 10.3 , 10.4  and 10.6  and Section 9.2(f)  and Article   12  only :	
 	
/s/ Sean Callan	
Sean Callan	

[SIGNATURE PAGE - UNIT PURCHASE AGREEMENT]

The Parties have executed this Agreement as of the date first above written.
Pack Trust :
With respect to Sections 6.14 and 9.7 only :

William Paxson St. Clair Trust,
under Trust Agreement, dated December 13, 2002

By: /s/ M. Wayne Davidson     
Name: M. Wayne Davidson
Title: Sole Trustee

Jill Trust :
With respect to Sections 6.14 and 9.7 only :

Jill Petrie St. Clair Trust,
under Trust Agreement, dated September 19, 2003

By: /s/ M. Wayne Davidson     
Name: M. Wayne Davidson
Title: Sole Trustee

[SIGNATURE PAGE - UNIT PURCHASE AGREEMENT]

The Parties have executed this Agreement as of the date first above written.
With respect to Sections 6.14 and 6.17 only :

	
ST. CLAIR CELLARS, LLC	
 	
By: /s/ William P. St. Clair	
Name: William P. St. Clair	
Title: Manager	

 

[SIGNATURE PAGE - UNIT PURCHASE AGREEMENT]

The Parties have executed this Agreement as of the date first above written.

	
Buyer :	
 	
MALIBU BOATS, LLC	
 	
By: /s/ Jack Springer	
Name: Jack Springer	
Title: Authorized Signatory	

With respect to Sections 2.2(d) and 6.14 only :

	
		
MALIBU BOATS, INC.	 	
 	 	
By: /s/ Jack Springer	 	
Name: Jack Springer	 	
Title: Chief Executive Officer	 	

[SIGNATURE PAGE - UNIT PURCHASE AGREEMENT]

Exhibit 10.1

EXECUTION VERSION

 SECOND AMENDED AND RESTATED
CREDIT AGREEMENT
dated as of June 28, 2017
among
MALIBU BOATS, LLC,
as the Borrower
MALIBU BOATS HOLDINGS, LLC,
as the Parent and a Guarantor

THE SUBSIDIARIES OF THE BORROWER IDENTIFIED HEREIN,
as the other Guarantors

THE LENDERS FROM TIME TO TIME PARTY HERETO,

JPMORGAN CHASE BANK, N.A.
as Syndication Agent

FIRST TENNESSEE BANK NATIONAL ASSOCIATION
and
REGIONS BANK,
as Co-Documentation Agents

and

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

====================================================================
SUNTRUST ROBINSON HUMPHREY, INC.
and
JPMORGAN CHASE BANK, N.A.,
as Joint Lead Arrangers and Joint Bookrunners

	
				
 	 	Page		
 	 	 	
ARTICLE I DEFINITIONS; CONSTRUCTION	1		
 	 	 	
Section 1.1.	Definitions.	1		
Section 1.2.	Classifications of Loans and Borrowings.	33		
Section 1.3.	Accounting Terms and Determination.	33		
Section 1.4.	Terms Generally.	34		
Section 1.5.	Letter of Credit Amounts.	34		
Section 1.6.	Times of Day.	34		
 	 	 	
ARTICLE II AMOUNT AND TERMS OF THE COMMITMENTS	34		
 	 	 	
Section 2.1.	General Description of Facilities.	34		
Section 2.2.	Revolving Loans.	35		
Section 2.3.	Procedure for Revolving Borrowings.	35		
Section 2.4.	Swingline Commitment.	35		
Section 2.5.	Term Loan Commitments.	37		
Section 2.6.	Funding of Borrowings.	38		
Section 2.7.	Interest Elections.	38		
Section 2.8.	Optional Reduction and Termination of Commitments.	39		
Section 2.9.	Repayment of Loans.	40		
Section 2.10.	Evidence of Indebtedness.	42		
Section 2.11.	Optional Prepayments.	42		
Section 2.12.	Mandatory Prepayments.	43		
Section 2.13.	Interest on Loans.	44		
Section 2.14.	Fees.	45		
Section 2.15.	Computation of Interest and Fees.	46		
Section 2.16.	Inability to Determine Interest Rates.	46		
Section 2.17.	Illegality.	47		
Section 2.18.	Increased Costs.	47		
Section 2.19.	Funding Indemnity.	48		
Section 2.20.	Taxes.	49		
Section 2.21.	Payments Generally; Pro Rata Treatment; Sharing of Set-offs.	52		
Section 2.22.	Letters of Credit.	54		
Section 2.23.	Increase of Commitments; Additional Lenders.	58		
Section 2.24.	Mitigation of Obligations.	60		
Section 2.25.	Replacement of Lenders.	60		
Section 2.26.	Reallocation and Cash Collateralization of Defaulting Lender Commitment.	61		
 	 	 	
ARTICLE III CONDITIONS PRECEDENT TO LOANS AND LETTERS OF CREDIT	62		
 	 	 	
Section 3.1.	Conditions To Effectiveness.	62		
Section 3.2.	Borrowing of Delayed Draw Term Loan.	65		
Section 3.3.	Each Credit Event.	67		
Section 3.4.	Delivery of Documents	68		
Section 3.5.	Termination of Existing Credit Facility	68		

i

	

ARTICLE IV REPRESENTATIONS AND WARRANTIES	69		
 	 	 	
Section 4.1.	Existence; Power.	69		
Section 4.2.	Organizational Power; Authorization.	69		
Section 4.3.	Governmental Approvals; No Conflicts.	69		
Section 4.4.	Financial Statements.	69		
Section 4.5.	Litigation and Environmental Matters.	70		
Section 4.6.	Compliance with Laws and Agreements.	70		
Section 4.7.	Investment Company Act, Etc.	70		
Section 4.8.	Taxes.	70		
Section 4.9.	Margin Regulations.	70		
Section 4.10.	ERISA.	71		
Section 4.11.	Ownership of Property; Insurance.	71		
Section 4.12.	Disclosure.	72		
Section 4.13.	Labor Relations.	72		
Section 4.14.	Subsidiaries.	73		
Section 4.15.	Solvency.	73		
Section 4.16.	Deposit and Disbursement Accounts.	73		
Section 4.17.	Collateral Documents.	73		
Section 4.18.	Material Agreements.	73		
Section 4.19.	Anti-Corruption Laws and Sanctions.	73		
Section 4.20.	Patriot Act.	73		
Section 4.21.	Fiscal Year.	74		
Section 4.22.	No EEA Financial Institutions	74		
 	 	 	
ARTICLE V AFFIRMATIVE COVENANTS	74		
 	 	 	
Section 5.1.	Financial Statements and Other Information.	74		
Section 5.2.	Notices of Material Events.	75		
Section 5.3.	Additional Deliverables.	76		
Section 5.4.	Existence; Conduct of Business.	77		
Section 5.5.	Compliance with Laws, Etc.	77		
Section 5.6.	Payment of Obligations.	77		
Section 5.7.	Books and Records.	77		
Section 5.8.	Visitation, Inspection, Etc.	77		
Section 5.9.	Maintenance of Properties; Insurance.	77		
Section 5.10.	Use of Proceeds and Letters of Credit.	78		
Section 5.11.	Casualty and Condemnation.	78		
Section 5.12.	Cash Management.	78		
Section 5.13.	Additional Subsidiaries and Collateral.	79		
Section 5.14.	Additional Real Estate; Leased Locations.	80		
Section 5.15.	Further Assurances.	80		
Section 5.16.	[Reserved].	80		
Section 5.17.	Post-Closing Obligations.	80		

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ARTICLE VI FINANCIAL COVENANTS	81		
 	 	 	
Section 6.1.	Consolidated Fixed Charge Coverage Ratio.	81		
Section 6.2.	Consolidated Leverage Ratio.	81		
 	 	 	
ARTICLE VII NEGATIVE COVENANTS	82		
 	 	 	
Section 7.1.	Indebtedness.	82		
Section 7.2.	Liens.	84		
Section 7.3.	Fundamental Changes.	86		
Section 7.4.	Investments, Loans, Etc.	86		
Section 7.5.	Restricted Payments.	88		
Section 7.6.	Sale of Assets.	88		
Section 7.7.	Transactions with Affiliates.	90		
Section 7.8.	Restrictive Agreements.	90		
Section 7.9.	[Reserved].	91		
Section 7.10.	Hedging Transactions.	91		
Section 7.11.	Permitted Subordinated Indebtedness.	91		
Section 7.12.	Amendment to Material Documents.	91		
Section 7.13.	Accounting Changes.	92		
Section 7.14.	Government Regulation.	92		
Section 7.15.	[Reserved].	92		
Section 7.16.	Sales and Discounts of Accounts Receivable.	92		
 	 	 	
ARTICLE VIII EVENTS OF DEFAULT	92		
 	 	 	
Section 8.1.	Events of Default.	92		
Section 8.2.	Application of Funds.	95		
 	 	 	
ARTICLE IX THE ADMINISTRATIVE AGENT	96		
 	 	 	
Section 9.1.	Appointment of Administrative Agent.	96		
Section 9.2.	Nature of Duties of Administrative Agent.	97		
Section 9.3.	Lack of Reliance on the Administrative Agent.	98		
Section 9.4.	Certain Rights of the Administrative Agent.	98		
Section 9.5.	Reliance by Administrative Agent.	98		
Section 9.6.	The Administrative Agent in its Individual Capacity.	98		
Section 9.7.	Successor Administrative Agent.	99		
Section 9.8.	Benefits of Article IX.	99		
Section 9.9.	Administrative Agent May File Proofs of Claim.	100		
Section 9.10.	Titled Agents	100		
Section 9.11.	Authorization to Execute other Loan Documents.	100		
Section 9.12.	Collateral and Guaranty Matters.	101		
Section 9.13.	Hedging Obligations and Bank Product Obligations.	101		
Section 9.14.	Withholding Tax.	101		
Section 9.15.	Right to Realize on Collateral and Enforce Guarantee.	102		

iii

	

ARTICLE X THE GUARANTY	102		
 	 	 	
Section 10.1.	The Guaranty.	102		
Section 10.2.	Obligations Unconditional.	103		
Section 10.3.	Reinstatement.	103		
Section 10.4.	Certain Additional Waivers.	104		
Section 10.5.	Remedies.	104		
Section 10.6.	Rights of Contribution.	104		
Section 10.7.	Guarantee of Payment; Continuing Guarantee.	104		
Section 10.8.	Keepwell.	104		
 	 	 	
ARTICLE XI MISCELLANEOUS	105		
 	 	 	
Section 11.1.	Notices.	105		
Section 11.2.	Waiver; Amendments.	107		
Section 11.3.	Expenses; Indemnification.	109		
Section 11.4.	Successors and Assigns.	111		
Section 11.5.	Governing Law; Jurisdiction; Consent to Service of Process.	116		
Section 11.6.	WAIVER OF JURY TRIAL.	117		
Section 11.7.	Right of Setoff.	117		
Section 11.8.	Counterparts; Integration.	117		
Section 11.9.	Survival.	118		
Section 11.10.	Severability.	118		
Section 11.11.	Confidentiality.	118		
Section 11.12.	Interest Rate Limitation.	119		
Section 11.13.	Waiver of Effect of Corporate Seal.	119		
Section 11.14.	Patriot Act.	119		
Section 11.15.	No Advisory or Fiduciary Responsibility.	119		
Section 11.16.	Electronic Execution of Assignments and Certain Other Documents.	120		

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Schedules

Schedule I	-    Commitment Amounts	
		
Schedule 1.01	-    Ineligible Assignees	
		
Schedule 4.5	-    Environmental Matters	
		
Schedule 4.11(d)	-    Real Estate	
		
Schedule 4.18	-    Material Agreements	
		
Schedule 7.1	-    Existing Indebtedness	
		
Schedule 7.2	-    Existing Liens	
		
Schedule 7.4	-    Existing Investments	
Exhibits

Exhibit 2.3	-    Form of Notice of Revolving Borrowing	
		
Exhibit 2.4	-    Form of Notice of Swingline Borrowing	
		
Exhibit 2.5	-    Form of Notice of Delayed Draw Term Loan Borrowing	
		
Exhibit 2.7	-    Form of Notice of Continuation/Conversion	
		
Exhibit 2.10	-    Form of Note	
		
Exhibits 2.20 (1-4)	-    Forms of U.S. Tax Compliance Certificates	
		
Exhibit 5.1	-    Form of Compliance Certificate	
		
Exhibit 5.13	-    Form of Joinder Agreement	
		
Exhibit 11.4	-    Form of Assignment and Acceptance	

v

SECOND AMENDED AND RESTATED CREDIT AGREEMENT
THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this “ Agreement ”) is made and entered into as of June 28, 2017, by and among MALIBU BOATS, LLC, a Delaware limited liability company (the “ Borrower ”), MALIBU BOATS HOLDINGS, LLC, a Delaware limited liability company (the “ Parent ”), the other Guarantors (defined herein), the Lenders (defined herein), and SUNTRUST BANK, in its capacity as administrative agent for the Lenders (the “ Administrative Agent ”), as issuing bank (the “ Issuing Bank ”) and as swingline lender (the “ Swingline Lender ”).
W I T N E S S E T H:
WHEREAS, the Borrower, the Parent, the lenders from time to time party thereto and SunTrust Bank, as administrative agent are party to that certain Amended and Restated Credit Agreement dated as of April 2, 2015 (as amended by the First Amendment to Credit Agreement dated as of February 3, 2016, the Second Amendment to Credit Agreement dated as of August 15, 2016 and the Third Amendment to Credit Agreement dated as of December 28, 2016, the “ Existing Credit Agreement ”), which amended and restated that certain Credit Agreement dated as of July 16, 2013 (as amended by the First Amendment to Credit Agreement and Consent, dated as of January 3, 2014, the Second Amendment to Credit Agreement, dated as of May 8, 2014, and the Third Amendment to Credit Agreement, dated as of October 1, 2014) and the Borrower, the Parent, the Administrative Agent and the Lenders have agreed to amend and restate the Existing Credit Agreement in its entirety upon and subject to the terms and conditions set forth herein;
WHEREAS, in connection with the amendment and restatement of the Existing Credit Agreement, the Borrower has requested that the Lenders (a) establish a $35,000,000 revolving credit facility in favor of, and (b) make a term loan (advanced on the Closing Date) in an aggregate principal amount equal to $55,000,000 and a $105,000,000 delayed draw term loan to, the Borrower;
WHEREAS, subject to the terms and conditions of this Agreement, the Lenders, the Issuing Bank and the Swingline Lender to the extent of their respective Commitments as defined herein, are willing severally to establish the requested revolving credit facility, letter of credit subfacility and the swingline subfacility in favor of and severally to make the term loans to the Borrower;
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Borrower, the Lenders, the Administrative Agent, the Issuing Bank and the Swingline Lender agree as follows:
ARTICLE I
DEFINITIONS; CONSTRUCTION
Section 1.1.     Definitions . In addition to the other terms defined herein, the following terms used herein shall have the meanings herein specified (to be equally applicable to both the singular and plural forms of the terms defined):
“ Acquisition ” shall mean (a) any Investment by the Borrower or any of its Subsidiaries in any other Person pursuant to which such Person shall become a Subsidiary or shall be merged with the Borrower or any of its Subsidiaries or (b) any acquisition by the Borrower or any of its Subsidiaries of the assets of any Person (other than a Subsidiary) that constitute all or substantially all of the assets of such Person or a division or business unit of such Person.
“ Additional Commitment Amount ” shall have the meaning given to such term in Section 2.23 .

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“ Additional Lender ” shall have the meaning given to such term in Section 2.23 .
“ Adjusted LIBO Rate ” shall mean, with respect to each Interest Period for a Eurodollar Borrowing, the rate per annum obtained by dividing (i) LIBOR for such Interest Period by (ii) a percentage equal to 1.00 minus the Eurodollar Reserve Percentage.
“ Administrative Agent ” shall mean SunTrust Bank in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.
“ Administrative Questionnaire ” shall mean, with respect to each Lender, an administrative questionnaire in the form provided by the Administrative Agent and submitted to the Administrative Agent duly completed by such Lender.
“ Affiliate ” shall mean, as to any Person, any other Person that directly, or indirectly through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such Person. For the purposes of this definition, “Control” shall mean the power, directly or indirectly, either to (i) vote 10% or more of the securities having ordinary voting power for the election of directors (or persons performing similar functions) of a Person or (ii) direct or cause the direction of the management and policies of a Person, whether through the ability to exercise voting power, by control or otherwise. The terms “Controlling”, “Controlled by”, and “under common Control with” have the meanings correlative thereto.
“ Aggregate Revolving Commitments ” shall mean the Revolving Commitments of all the Lenders at any time outstanding. On the Closing Date, the aggregate amount of the Aggregate Revolving Commitments is $35,000,000.
“ Agreement ” shall mean this Credit Agreement.
“ Anti-Corruption Laws ” means the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010 and other similar anti-corruption legislation in other jurisdictions applicable to the Borrower or its Subsidiaries.
“ Applicable Lending Office ” shall mean, for each Lender and for each Type of Loan, the “Lending Office” of such Lender (or an Affiliate of such Lender) designated for such Type of Loan in the Administrative Questionnaire submitted by such Lender or such other office of such Lender (or an Affiliate of such Lender) as such Lender may from time to time specify to the Administrative Agent and the Borrower as the office by which its Loans of such Type are to be made and maintained.
“ Applicable Margin ” shall mean, as of any date, with respect to all interest on Term Loans outstanding on any date, interest on all Revolving Loans outstanding on any date or the letter of credit fee, as the case may be, a percentage per annum determined by reference to the applicable Consolidated Leverage Ratio in effect on such date as set forth in the table below; provided , that a change in the Applicable Margin resulting from a change in the Consolidated Leverage Ratio shall be effective on the second Business Day after which the Borrower delivers each of the financial statements required by Section 5.1(a ) or ( b ), as applicable, and the Compliance Certificate required by Section 5.1(c ); provided further , that if at any time the Borrower shall have failed to deliver such financial statements and such Compliance Certificate when so required, the Applicable Margin shall be at Level VI as set forth in the table below until the second Business Day after which such financial statements and Compliance Certificate are delivered, at which time the Applicable Margin shall be determined as provided above. Notwithstanding the foregoing, the Applicable Margin from the Closing Date until the second Business Day after which the financial statements and Compliance Certificate for the Fiscal Quarter ending September 30, 2017 are required to be delivered shall be at Level

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IV as set forth in the table below; provided , that, the Compliance Certificate for the Fiscal Quarter ending September 30, 2017 shall evidence the calculation of the Consolidated Leverage Ratio after giving pro forma effect to the debt incurred on the Closing Date and the Delayed Draw Term Loan Funding Date and the determination of the Applicable Margin for such period shall be based upon such calculations. In the event that any financial statement or Compliance Certificate delivered hereunder is shown to be inaccurate (regardless of whether this Agreement or the Commitments are in effect when such inaccuracy is discovered), and such inaccuracy, if corrected, would have led to the application of a higher Applicable Margin based upon the pricing grid set forth in the table below (the “ Accurate Applicable Margin ”) for any period that such financial statement or Compliance Certificate covered, then (i) the Borrower shall immediately deliver to the Administrative Agent a correct financial statement or Compliance Certificate, as the case may be, for such period, (ii) the Applicable Margin shall be adjusted such that after giving effect to the corrected financial statements or Compliance Certificate, as the case may be, the Applicable Margin shall be reset to the Accurate Applicable Margin based upon the pricing grid set forth in the table below for such period and (iii) the Borrower shall immediately pay to the Administrative Agent, for the account of the Lenders, the accrued additional interest owing as a result of such Accurate Applicable Margin for such period.  The provisions of this definition shall not limit the rights of the Administrative Agent and the Lenders with respect to Section 2.13(c) or Article VIII .

					
Level	Consolidated Leverage Ratio	Eurodollar Loans and Letter of Credit Fee	Base Rate
Loans	Commitment
Fee and Delayed Draw Term Loan Commitment Fee	
I	<1.00:1.00	1.75%	0.75%	0.25%	
II	≥ 1.00:1.00 but < 1.50:1.00	2.00%	1.00%	0.30%	
III	≥ 1.50:1.00 but < 2.00:1.00	2.25%	1.25%	0.35%	
IV	≥ 2.00:1.00 but ˂ 2.50:1.00	2.50%	1.50%	0.40%	
V	≥ 2.50:1.00 but ˂ 3.00:1.00	2.75%	1.75%	0.45%	
VI	≥ 3.00:1.00	3.00%	2.00%	0.50%	
“ Approved Fund ” shall mean any Person (other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (i) a Lender, (ii) an Affiliate of a Lender or (iii) an entity or an Affiliate of an entity that administers or manages a Lender.
“ Arrangers ” shall mean SunTrust Robinson Humphrey, Inc. and JPMorgan Chase Bank, N.A., each in their capacities as joint lead arrangers and joint bookrunners.
“ Asset Sale ” shall mean the sale, transfer, license, lease or other disposition of any property by the Borrower or any Subsidiary, including any sale and leaseback transaction and any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith, but excluding (a) the sale of inventory in the ordinary course of business; (b) the sale or disposition for fair market value of obsolete or worn out property or other property not necessary for operations of the Borrower and its Subsidiaries disposed of in the ordinary course of business; (c) the disposition of property (including the cancellation of Indebtedness permitted by Section 7.4 ) to the Borrower or any Subsidiary; provided , that if the transferor of such property is a Loan Party then the transferee thereof must be a Loan Party, except to the extent permitted by Section 7.4 ; (d) the disposition of accounts receivable in connection with the collection or compromise thereof; (e) licenses, sublicenses, leases or subleases granted

3

to others in the ordinary course of business or not interfering in any material respect with the business of the Borrower or any Subsidiary; (f) the sale or disposition of cash or Permitted Investments for fair market value in the ordinary course of business, (g) the disposition of shares of Capital Stock of any Subsidiary in order to qualify members of the governing body of such Subsidiary if required by applicable Law and (h) dispositions of receivables, inventory and other property in the ordinary course of business in connection with a Foreign Customer Finance Program Transaction.
“ Assignment and Acceptance ” shall mean an assignment and acceptance entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 11.4(b) ) and accepted by the Administrative Agent, substantially in the form of Exhibit 11.4 attached hereto or any other form approved by the Administrative Agent (with the consent of any party whose consent is required by Section 11.4(b) ).
“ Audited Financial Statements ” shall mean the audited consolidated balance sheet of PubCo and its Subsidiaries for the fiscal year ended June 30, 2016, and the related consolidated statements of income or operations, shareholders’ equity and cash flows of the PubCo and its Subsidiaries for such fiscal year, including the notes thereto.
“ Availability Period ” shall mean the period from the Closing Date to but excluding the Revolving Commitment Termination Date.
“ Bail-In Action ” shall mean the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.
“ Bail-In Legislation ” shall mean, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.
“ Bank Product Amount ” shall have the meaning set forth in the definition of “ Bank Product Provider ”.
“ Bank Product Obligations ” shall mean, collectively, all obligations and other liabilities of any Loan Party to any Bank Product Provider arising with respect to any Bank Products.
“ Bank Product Provider ” shall mean any Person that, at the time it provides any Bank Products to any Loan Party, (a) (i) is a Lender or an Affiliate of a Lender or (ii) has provided any Bank Products to any Loan Party that exist on the Closing Date, and such Person is a Lender or an Affiliate of a Lender on the Closing Date and (b) except when the Bank Product Provider is SunTrust Bank and its Affiliates, has provided prior written notice to the Administrative Agent which has been acknowledged by the Borrower of (x) the existence of such Bank Product, (y) the maximum dollar amount of obligations arising thereunder (the “ Bank Product Amount ”) and (z) the methodology to be used by such parties in determining the obligations under such Bank Product from time to time. In no event shall any Bank Product Provider acting in such capacity be deemed a Lender for purposes hereof to the extent of and as to Bank Products except that each reference to the term “Lender” in Article IX and Section 11.4 shall be deemed to include such Bank Product Provider and in no event shall the approval of any such person in its capacity as Bank Product Provider be required in connection with the release or termination of any security interest or Lien of the Administrative Agent. The Bank Product Amount may be changed from time to time upon written notice to the Administrative Agent by the applicable Bank Product Provider. The Bank Product Amount may not be increased, and no new agreements for Bank Products may be established at any time that a Default or Event of Default exists.

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“ Bank Products ” shall mean any of the following services provided to any Loan Party by any Bank Product Provider: (a) any treasury or other cash management services, including deposit accounts, automated clearing house (ACH) origination and other funds transfer, depository (including cash vault and check deposit), zero balance accounts and sweeps, return items processing, controlled disbursement accounts, positive pay, lockboxes and lockbox accounts, account reconciliation and information reporting, payables outsourcing, payroll processing, trade finance services, investment accounts and securities accounts, and (b) card services, including credit cards (including purchasing cards and commercial cards), prepaid cards, including payroll, stored value and gift cards, merchant services processing, and debit card services.
“ Base Rate ” shall mean the highest of (a) the rate which the Administrative Agent announces from time to time as its prime lending rate, as in effect from time to time, (b) the Federal Funds rate, as in effect from time to time, plus one-half of one percent (½%) per annum and (c) the Adjusted LIBO Rate determined on a daily basis for an Interest Period of one (1) month, plus one percent (1.00%) per annum (any changes in such rates to be effective as of the date of any change in such rate). The Administrative Agent’s prime lending rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to any customer. The Administrative Agent may make commercial loans or other loans at rates of interest at, above, or below the Administrative Agent’s prime lending rate. Notwithstanding anything to the contrary in the foregoing, if the Base Rate is less than zero, such rate shall be deemed to be zero for purposes of this Agreement.
“ Base Rate Borrowing ” and “ Base Rate Loan ” when used in reference to any Borrowing refers to whether such Loans or the loan comprising such Borrowing bears interest at a rate determined by reference to the Base Rate.
“ Borrower ” shall have the meaning given in the introductory paragraph hereof.
“ Borrowing ” shall mean a borrowing consisting of (a) Loans of the same Class and Type, made, converted or continued on the same date and in the case of Eurodollar Loans, as to which a single Interest Period is in effect, or (b) a Swingline Loan.
“ Business Day ” shall mean any day other than (a) a Saturday, Sunday or other day on which commercial banks in Atlanta, Georgia are authorized or required by Law to close and (b) if such day relates to a Borrowing of, a payment or prepayment of principal or interest on, a conversion of or into, or an Interest Period for, a Eurodollar Loan or a notice with respect to any of the foregoing, any day on which banks are not open for dealings in Dollar deposits in the London interbank market.
“ Capital Expenditures ” shall mean, for any period, without duplication, (i) the additions to property, plant and equipment and other capital expenditures of the Parent and its Subsidiaries that are (or would be) set forth on a consolidated statement of cash flows of the Parent and its Subsidiaries for such period prepared in accordance with GAAP, and (ii) Capital Lease Obligations incurred by the Loan Parties on a consolidated basis during such period; provided, that the following shall be excluded from the foregoing: (i) expenditures incurred in connection with Permitted Acquisitions or incurred by the Person acquired in a Permitted Acquisition prior to the closing of such Permitted Acquisition; (ii) capital expenditures in respect of the reinvestment of any proceeds in accordance with Section 2.12(a) ; (iii) expenditures made with cash proceeds from any issuances of Capital Stock of any Loan Party or contributions of capital made to the Borrower; or (iv) expenditures made with tenant improvement allowances provided by landlords under leases. For purposes of this definition, the purchase price of equipment that is purchased substantially simultaneously with the trade-in of existing equipment or with insurance proceeds shall be included in Capital Expenditures only to the extent of the gross amount of such purchase price less the credit granted by the seller of such equipment for the equipment being traded in at such time or the amount of such proceeds, as the case may be.

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“ Capital Lease Obligations ” of any Person shall mean all obligations of such Person to pay rent or other amounts under any lease (or other arrangement conveying the right to use) of real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.
“ Capital Stock ” shall mean all shares, options, warrants, general or limited partnership interests, membership interests or other equivalents (regardless of how designated) of or in a corporation, partnership, limited liability company or equivalent entity whether voting or nonvoting, including common stock, preferred stock or any other “equity security” (as such term is defined in Rule 3a11‑1 of the General Rules and Regulations promulgated by the SEC under the Securities Exchange Act of 1934).
“ Cash Collateralize ” shall mean, in respect of any obligations, to provide and pledge (as a first priority perfected security interest) cash collateral for such obligations in Dollars, to the Administrative Agent pursuant to documentation in form and substance, reasonably satisfactory to the Administrative Agent (and “ Cash Collateralization ” and “ Cash Collateral ” have a corresponding meaning).
“ Certain Funds Provisions ” shall have the meaning assigned to such term in Section 3.2 .
“ CFC ” shall mean a “controlled foreign corporation” within the meaning of Section 957 of the Code.
“ CFC Holdco ” shall mean any Domestic Subsidiary that is a disregarded entity for U.S. federal income tax purposes and has no material assets other than Capital Stock of one or more Foreign Subsidiaries that are CFCs.
“ Change in Control ” shall mean the occurrence of any of the following events: (a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding the Sponsors and PubCo and any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire (such right, an “option right”), whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of 35% or more of the Capital Stock of the Parent entitled to vote for members of the board of directors or equivalent governing body of the Parent on a fully diluted basis (and taking into account all such securities that such person or group has the right to acquire pursuant to any option right), (b) the Parent shall cease to own legally and beneficially, directly or indirectly, 100% of the voting Capital Stock of the Borrower or (c) 100% of the voting Capital Stock of any Loan Party (excluding the Parent) ceases to be owned legally and beneficially, directly or indirectly, by another Loan Party, except for any Investment in a Loan Party pursuant to Section 7.4(s) hereof.
“ Change in Law ” shall mean (a) the adoption of any applicable Law after the date of this Agreement, (b) any change in any applicable Law after the date of this Agreement, or (c) compliance by any Lender (or its Applicable Lending Office) or the Issuing Bank (or for purposes of Section 2.18(b ), by the Parent Company of such Lender or the Issuing Bank, if applicable) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement. Notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act, and all requests, rules, guidelines and directives promulgated thereunder, and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States regulatory authorities,

6

in each case pursuant to Basel III, in each case, are deemed to have been introduced or adopted after the date hereof, regardless of the date enacted or adopted.
“ Class ”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans, Swingline Loans or Term Loans and when used in reference to any Commitment, refers to whether such Commitment is a Revolving Commitment, a Swingline Commitment or a Term Loan Commitment.
“ Closing Certificate ” shall have the meaning set forth in Section 3.1(d) .
“ Closing Date ” shall mean the date hereof.
“ Code ” shall mean the Internal Revenue Code of 1986, as amended and in effect from time to time.
“ Collateral ” shall mean a collective reference to all real and personal property with respect to which Liens in favor of the Administrative Agent, for the benefit of itself and the holders of the Obligations, are purported to be granted pursuant to and in accordance with the terms of the Collateral Documents, and which shall include the Capital Stock of the Borrower and its Subsidiaries and all IP Rights of the Loan Parties; provided that, for the avoidance of doubt, “Excluded Collateral” as such term is defined in any Collateral Document, shall not constitute Collateral.
“ Collateral Access Agreement ” shall mean each landlord waiver or bailee agreement granted to, and in form and substance reasonably acceptable to, the Administrative Agent.
“ Collateral Documents ” shall mean a collective reference to the Security Agreement, any Mortgage and any other security documents executed and delivered by any Loan Party pursuant to Section 5.11 .
“ Commitment ” shall mean a Revolving Commitment, a Swingline Commitment or a Term Loan Commitment or any combination thereof (as the context shall permit or require).
“ Commitment Fee ” shall have the meaning set forth in Section 2.14(b) .
“ Commodity Exchange Act ” shall mean the Commodity Exchange Act (7 U.S.C. § 1 et seq .), as amended from time to time, and any successor statute.
“ Compliance Certificate ” shall mean a certificate from the principal executive officer or the principal financial officer of the Borrower in the form of, and containing the certifications set forth in, the certificate attached hereto as Exhibit 5.1 .
“ Consolidated EBITDA ” shall mean, for the Parent and its Subsidiaries for any period, an amount equal to the sum of (i) Consolidated Net Income for such period plus (ii) to the extent deducted in determining Consolidated Net Income for such period, and without duplication, (A) Consolidated Interest Expense, (B) income and withholding tax expense determined on a consolidated basis in accordance with GAAP, (C) depreciation and amortization determined on a consolidated basis in accordance with GAAP, (D) fees and expenses paid in connection with the execution, delivery and the performance by the Loan Parties of the Loan Documents, and fees and expenses incurred in connection with the issuance, payment, amendment or refinancing of Indebtedness permitted under the Loan Documents, (E) fees and expenses incurred in connection with the Existing Credit Agreement, (F) management fees and board expenses and other payments made to PubCo in accordance with Section 7.7(e) , (G) expenses and charges related to the Master Craft or Marine Power litigation and the Brunswick litigation, in an aggregate amount not to exceed $7,500,000 for periods after the Closing Date (it being understood that all such expenses and charges incurred prior to the

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Closing Date shall be permitted to be added back), (H) fees and expenses associated with (i) the Project Sapphire Acquisition, in an aggregate amount not to exceed $3,500,000, (ii) other Investments (including Acquisitions) whether or not such Investment is consummated, in an aggregate amount not to exceed $2,000,000 in any Fiscal Year, and (iii) startup costs associated with the Borrower’s engine manufacturing initiative in an aggregate amount not to exceed $4,500,000 in any Fiscal Year, (I) fees and expenses related to public offerings of PubCo in an aggregate amount not to exceed $1,500,000 in any Fiscal Year, (J) all nonrecurring cash expenses and charges up to $1,500,000 in any Fiscal Year, (K) effects of adjustments in any line item in the consolidated financial statements of the Parent and its Subsidiaries resulting from the application of purchase accounting (including any step-ups with respect to re-valuing assets and liabilities) in relation to any Investments (including Acquisitions) and any investment, acquisition, merger or consolidation or the depreciation, amortization or write-off of any amounts thereof, including the Project Sapphire Acquisition, and (L) other non-cash charges (including non-cash equity compensation charges), it being understood that the Consolidated EBITDA (adjusted as provided herein) of a Person that is acquired in a Permitted Acquisition shall be calculated on a Pro Forma Basis; provided further that, in calculating the pro forma credit to be given for the Consolidated EBITDA of Target pursuant to the Project Sapphire Acquisition, Consolidated EBITDA for Target and its subsidiaries shall be deemed to be $5,822,000 for the Fiscal Quarter ended June 30, 2017, $5,518,000 for the Fiscal Quarter ended March 31, 2017, $2,164,000 for the Fiscal Quarter ended December 31, 2016, $4,283,000 for the Fiscal Quarter ended on September 30, 2016 and $5,342,000 for the Fiscal Quarter ended on June 30, 2016.
“ Consolidated Excess Cash Flow ” shall mean for the Parent and its Subsidiaries for any period, determined on a consolidated basis, an amount equal to the sum of (a) Consolidated EBITDA for such period minus (b) Unfinanced Cash Capital Expenditures made during such period minus (c) Consolidated Interest Expense paid in cash during such period minus (d) Permitted Tax Distributions and cash taxes paid during such period minus (e) scheduled principal payments made on Consolidated Total Debt during such period minus (f) voluntary prepayments during such period made on Consolidated Total Debt permitted under Section 7.1(g) or Section 7.1(o) minus (g) Restricted Payments permitted under Section 7.5(d) during such period minus (h) to the extent elected by the Borrower, cash consideration paid in connection with Permitted Acquisitions during such period minus (i) amounts added to Consolidated EBITDA pursuant to clauses (D), (E), (F), (G), (H), (I), (J) and (K) of the definition thereof paid in cash during such period minus (j) an amount equal to any increase in Working Capital of the Parent and its Subsidiaries during such period plus (k) an amount equal to any decrease in Working Capital of the Parent and its Subsidiaries during such period.
“ Consolidated Fixed Charge Coverage Ratio ” shall mean, for the Parent and its Subsidiaries on a consolidated basis, as of any date, the ratio of (a) Consolidated EBITDA minus (i) Unfinanced Cash Capital Expenditures minus (ii) cash income Taxes (to the extent added back to Consolidated EBITDA), minus (iii) cash dividends and distributions by Parent (other than (x) the Share Repurchase Payments and (y) the tax distributions, dividends and other payments paid to the members of the Parent in connection with the Existing Credit Agreement) minus (iv) payments made to PubCo in accordance with Section 7.7(e) during such period (to the extent included in the calculation of Consolidated EBITDA) to (b) Consolidated Fixed Charges, in each case measured for the four consecutive Fiscal Quarters ending on or immediately prior to such date for which financial statements are required to have been delivered under this Agreement.
“ Consolidated Fixed Charges ” shall mean, for the Parent and its Subsidiaries for any period, the sum, without duplication, of (a) Consolidated Interest Expense paid in cash for such period and (b) scheduled principal payments made on Consolidated Total Debt during such period; provided , however , that Consolidated Fixed Charges shall not include any fees and expenses payable by the Loan Parties in connection with the execution and delivery of the Loan Documents or the repayment of any amounts due or outstanding under or in respect of, and the termination of, the Existing Credit Agreement.

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“ Consolidated Interest Expense ” shall mean, for the Parent and its Subsidiaries for any period determined on a consolidated basis in accordance with GAAP, the sum of (a) total interest expense, including without limitation the interest component of any payments in respect of Capital Lease Obligations capitalized or expensed during such period (whether or not actually paid during such period) plus (b) the net amount payable (or minus the net amount receivable) with respect to Hedging Transactions during such period (whether or not actually paid or received during such period).
“ Consolidated Leverage Ratio ” shall mean, for the Parent and its Subsidiaries on a consolidated basis, the ratio of (a) Consolidated Total Debt as of such date minus unrestricted cash and Permitted Investments of the Parent and its Subsidiaries in an aggregate amount up to $20,000,000 to (b) Consolidated EBITDA, in each case measured as of the last day of the most recently ended four consecutive Fiscal Quarters for which financial statements are required to have been delivered under this Agreement.
“ Consolidated Net Income ” shall mean, for the Parent and its Subsidiaries for any period determined on a consolidated basis in accordance with GAAP, the net income (or loss) of the Parent and its Subsidiaries for such period but excluding therefrom (to the extent otherwise included therein) (a) any extraordinary gains or losses, (b) any gains attributable to write-ups of assets or losses attributable to write-downs of assets (other than the sale of inventory in the ordinary course of business), (c) any equity interest of the Borrower or any Subsidiary in the unremitted earnings of any Person that is not a Subsidiary and (d) any income (or loss) of any Person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with the Borrower, the Parent or any Subsidiary on the date that such Person’s assets are acquired by the Borrower, the Parent or any Subsidiary.
“ Consolidated Total Debt ” shall mean, as of any date, all Indebtedness of the Parent and its Subsidiaries measured on a consolidated basis as of such date, but excluding (i) Indebtedness of the type described in subsection (vi) of the definition thereof, except to the extent of any unreimbursed drawings thereunder, and (ii) Indebtedness of the type described in subsection (xi) of the definition thereof.
“ Contractual Obligation ” of any Person shall mean any provision of any security issued by such Person or of any agreement, instrument or undertaking under which such Person is obligated or by which it or any of the property in which it has an interest is bound.
“ Current Assets ” shall mean, with respect to the Parent and its Subsidiaries on a consolidated basis at any date of determination, the sum of all assets (other than cash and Permitted Investments or other cash equivalents) that would, in accordance with GAAP, be classified on a consolidated balance sheet of the Parent and its Subsidiaries as current assets at such date of determination, other than amounts related to current or deferred Taxes based on income or profits.
“ Current Liabilities ” shall mean, with respect to the Parent and its Subsidiaries on a consolidated basis at any date of determination, all liabilities that would, in accordance with GAAP, be classified on a consolidated balance sheet of the Parent and its Subsidiaries as current liabilities at such date of determination, other than (a) the current portion of any Indebtedness, (b) accruals of Consolidated Interest Expense (excluding Consolidated Interest Expense that is due and unpaid) and (c) accruals for current or deferred Taxes based on income or profits.
“ Debtor Relief Laws ” shall mean the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect.

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“ Default ” shall mean any condition or event that, with the giving of notice or the lapse of time or both, would constitute an Event of Default.
“ Default Interest ” shall have the meaning set forth in Section 2.13 ( c ).
“ Defaulting Lender ” shall mean, at any time, any Lender as to which the Administrative Agent has notified the Borrower that (a) such Lender has failed for three (3) or more Business Days to comply with its obligations under this Agreement to make a Loan and/or to make a payment to the Issuing Bank in respect of a Letter of Credit or to the Swingline Lender in respect of a Swingline Loan (each a “ funding obligation ”), (b) such Lender has notified the Administrative Agent or the Borrower, or has stated publicly, that it will not comply with any such funding obligation hereunder, or has defaulted on, its obligation to fund generally under any other loan agreement, credit agreement or other financing agreement, (c) such Lender has, for three (3) or more Business Days, failed to confirm in writing to the Administrative Agent, in response to a written request of the Administrative Agent, that it will comply with its funding obligations hereunder, (d) a Lender Insolvency Event has occurred and is continuing with respect to such Lender, or (e) such Lender or its Parent Company has become the subject of a Bail-In Action. The Administrative Agent will promptly send to all parties hereto a copy of any notice to the Borrower provided for in this definition.
“ Delayed Draw Term Loan ” shall have the meaning set forth in Section 2.5(b)(i) .
“ Delayed Draw Term Loan Availability Period ” shall mean the period from the Closing Date to the earliest of (a) July 28, 2017, (b) the date on which all Delayed Draw Term Loan Commitments have been funded as Delayed Draw Term Loans, (c) the date on which the Delayed Draw Term Loan Commitments are terminated pursuant to Section 2.8 and (d) the date on which all amounts outstanding under this Agreement have been declared or have automatically become due and payable (whether by acceleration or otherwise).
“ Delayed Draw Term Loan Commitment Fee ” shall have the meaning set forth in Section 2.14(b) .
“ Delayed Draw Term Loan Commitments ” shall mean, with respect to each Lender, the commitment of such Lender to make Delayed Draw Term Loans to the Borrowers in an aggregate principal amount not exceeding the amount set forth with respect to such Lender on Schedule I , or in the case of a Person becoming a Lender after the Closing Date, the amount of the assigned “Delayed Draw Term Loan Commitment” as provided in the Assignment and Acceptance executed by such Person as an assignee, or the joinder executed by such Person, in each case as such commitment may subsequently be decreased pursuant to terms hereof. The aggregate principal amount of all Lenders’ Delayed Draw Term Loan Commitments as of the Closing Date is One Hundred and Five Million Dollars ($105,000,000).
“ Delayed Draw Term Loan Funding Date ” shall have the meaning set forth in Section 2.5(b)(i) .
“ Depository Account ” shall have the meaning set forth in Section 5.12 .
“ Dollar(s) ” and the sign “$” shall mean lawful money of the United States of America.
“ Domestic Subsidiary ” shall mean any Subsidiary that is organized under the laws of any political subdivision of the United States.
“ EEA Financial Institution ” shall mean (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of

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an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
“ EEA Member Country ” shall mean any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
“ EEA Resolution Authority ” shall mean any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“ Environmental Laws ” shall mean all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by or with any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, Release or threatened Release of any Hazardous Material or to health and safety matters.
“ Environmental Liability ” shall mean any liability, contingent or otherwise (including any liability for damages, costs of environmental investigation and remediation, costs of administrative oversight, fines, natural resource damages, penalties or indemnities), of the Borrower or any Loan Party directly or indirectly resulting from or based upon (a) any actual or alleged violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) any actual or alleged exposure to any Hazardous Materials, (d) the Release or threatened Release of any Hazardous Materials or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.
“ ERISA ” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor statute and the regulations promulgated and rulings issued thereunder.
“ ERISA Affiliate ” shall mean any trade or business (whether or not incorporated) that for purposes of Title I or Title IV of ERISA or Section 412 of the Code would be deemed at any relevant time to be a “single employer” or otherwise aggregated with the Borrower or any of the Loan Parties under Section 414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA.
“ ERISA Event ” shall mean (i) any “reportable event” as defined in Section 4043 of ERISA with respect to a Plan (other than an event as to which the PBGC has waived the requirement of Section 4043(a) of ERISA that it be notified of such event); (ii) any failure to make a required contribution to any Plan that would result in the imposition of a lien or other encumbrance or the provision of security under Section 430 of the Code or Section 303 or 4068 of ERISA, or the arising of such a lien or encumbrance, there being or arising any “unpaid minimum required contribution” or “accumulated funding deficiency” (as defined or otherwise set forth in Section 4971 of the Code or Part 3 of Subtitle B of Title 1 of ERISA), whether or not waived, or any filing of any request for or receipt of a minimum funding waiver under Section 412 of the Code or Section 302 of ERISA with respect to any Plan or Multiemployer Plan, or any determination that any Plan is in at‑risk status under Title IV of ERISA; (iii) any incurrence by the Borrower, any of the Loan Parties or any of their respective ERISA Affiliates of any liability under Title IV of ERISA with respect to any Plan or Multiemployer Plan (other than for premiums due and not delinquent under Section 4007 of ERISA); (iv) any institution of proceedings, or the occurrence of an event or condition which would reasonably be expected to constitute grounds for the institution of proceedings by the PBGC, under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan; (v) any incurrence by the Borrower, any of the Loan Parties or any of their respective ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan, or the receipt by the Borrower,

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any of the Loan Parties or any of their respective ERISA Affiliates of any notice that a Multiemployer Plan is in endangered or critical status under Section 305 of ERISA; (vi) any receipt by the Borrower, any of the Loan Parties or any of their respective ERISA Affiliates of any notice, or any receipt by any Multiemployer Plan from the Borrower, any of the Loan Parties or any of their respective ERISA Affiliates of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is insolvent or in reorganization, within the meaning of Title IV of ERISA; (vii) engaging in a non‑exempt prohibited transaction within the meaning of Section 4975 of the Code or Section 406 of ERISA with respect to a Plan; or (viii) any filing of a notice of intent to terminate any Plan if such termination would require material additional contributions in order to be considered a standard termination within the meaning of Section 4041(b) of ERISA, any filing under Section 4041(c) of ERISA of a notice of intent to terminate any Plan, or the termination of any Plan under Section 4041(c) of ERISA.
“ EU Bail-In Legislation Schedule ” shall mean the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.
“ Eurodollar ” when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, bears interest at a rate determined by reference to the Adjusted LIBO Rate.
“ Eurodollar Reserve Percentage ” shall mean the aggregate of the maximum reserve percentages (including, without limitation, any emergency, supplemental, special or other marginal reserves) expressed as a decimal (rounded upwards to the next 1/100 th of 1%) in effect on any day to which the Administrative Agent is subject with respect to the Adjusted LIBO Rate pursuant to regulations issued by the Board of Governors of the Federal Reserve System (or any Governmental Authority succeeding to any of its principal functions) with respect to eurocurrency funding (currently referred to as “eurocurrency liabilities” under Regulation D). Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under Regulation D. The Eurodollar Reserve Percentage shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.
“ Event of Default ” shall have the meaning provided in Article VIII .
“ Excluded Account ” shall mean (i) any zero‑balance account that sweeps into another Excluded Account, (ii) any payroll account, (iii) any withholding or other fiduciary account, (iv) any account that only includes deposits that are pledged as permitted under Sections 7.2(f), (h) or (u) hereof, (v) any other account or accounts that collectively do not have more than $150,000 on deposit therein, (vi) any other account or accounts of the Target held by JPMorgan Chase Bank, N.A. or an Affiliate of JPMorgan Chase Bank, N.A. on the Delayed Draw Term Loan Funding Date and (vii) any other accounts that the Administrative Agent, with the consent of the Required Lenders, agrees to be designated as an Excluded Account.
“ Excluded Subsidiary ” shall mean (i) Cobalt Exports, Inc., a Nevada corporation, so long as such Subsidiary shall not own any material assets or have any material liabilities and shall be dissolved or merged into another Loan Party or Excluded Subsidiary on or prior to December 31, 2017 (or such later date as agreed to by the Administrative Agent in its sole discretion) and (ii) Cobalt Sportswear, LLC, a Kansas limited liability company, so long as such Subsidiary shall not (A) conduct any business other than the sale of sportswear or other related products or (B) have more than $150,000 of Consolidated EBITDA allocable to its operations.
“ Excluded Swap Obligation ” means, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the Guaranty of such Guarantor of, or the grant by such Guarantor of a

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security interest to secure, such Swap Obligation (or any Guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the Guaranty of such Guarantor, or the grant by such Guarantor of a security interest, becomes effective with respect to such Swap Obligation; provided that, for the avoidance of doubt, in determining whether any Guarantor is an “eligible contract participant” under the Commodity Exchange Act, the keepwell agreement set forth in Section 10.8 shall be taken into account. If a Swap Obligation arises under a Master Agreement governing more than one Hedging Transaction, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to Hedging Transactions for which such Guaranty or security interest is or becomes excluded in accordance with the first sentence of this definition.
“ Excluded Taxes ” shall mean any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the Laws of, or having its principal office or, in the case of any Lender, its Applicable Lending Office in the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a Law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by the Borrower under Section 2.25 ) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.20 , amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Recipient’s failure to comply with Section 2.20(e) and (d) any U.S. federal withholding Taxes imposed under FATCA.
“ Existing Credit Agreement ” shall have the meaning given in the recitals to this Agreement.
“ Existing Master Lease ” means that certain Master Lease Agreement, dated March 31, 2008, by and between Spirit Master Funding IV, LLC and the Borrower, as amended from time to time.
“ FATCA ” shall mean Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code and any intergovernmental agreement between the United States and one or more other governmental authorities that is entered into in order to facilitate compliance with the foregoing.
“ Federal Funds Rate ” shall mean, for any day, the rate per annum (expressed, as a decimal, rounded upwards, if necessary, to the next higher one one-hundredth of one percent (1/100 of 1%)) equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided , (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate charged to SunTrust Bank or any other Lender selected by the Administrative Agent on such day on such transactions as determined by the Administrative Agent.

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“ Fee Letter ” shall mean that certain administrative agent fee letter, dated as of June 16, 2017, executed by SunTrust Robinson Humphrey, Inc. and SunTrust Bank and accepted and agreed to by the Borrower.
“ Fiscal Quarter ” shall mean any fiscal quarter of the Borrower.
“ Fiscal Year ” shall mean any fiscal year of the Borrower.
“ Floor Plan Liabilities ” shall mean liabilities of the Borrower and its Subsidiaries arising under floor plan repurchase arrangements entered into in the ordinary course of business.
“ Foreign Customer Finance Program Obligations ” shall mean inventory repurchase and customer finance program recourse and other obligations, including any obligation of any Loan Party or any Subsidiary to repurchase products of the Loan Parties and such Subsidiaries or to purchase receivables created in connection with the sale of products or related services of any Loan Party and its Subsidiaries to dealers and other customers located outside the United States under any customer finance program, in each case incurred in the ordinary course of business, it being understood that the transactions contemplated by any Foreign Master Financing Agreement shall constitute Foreign Customer Finance Program Obligations.
“ Foreign Customer Finance Program Transaction ” shall mean the customer finance program contemplated by any Foreign Master Financing Agreement.
“ Foreign Lender ” shall mean (a) if the Borrower is a U.S. Person, a Lender that is not a U.S. Person, and (b) if the Borrower is not a U.S. Person, a Lender that is resident or organized under the laws of a jurisdiction other than that in which the Borrower is resident for tax purposes.
“ Foreign Master Financing Agreement ” shall mean an agreement or agreements entered into from time to time by Borrower and/or one or more of its Subsidiaries for the purpose of financing inventory sold to its foreign dealers, including, without limitation, the Master Financing Umbrella Agreement (Pan-European) contemplated to be entered into by and between Borrower and Wells Fargo Bank International Unlimited Company or one or more of its Affiliates and any of their respective successors or assigns, factoring agreements by and between Target and Wells Fargo Bank, National Association or one or more of its Affiliates and any of their respective successors or assigns, and all financing schedules, credit requests, deeds and other letters, agreements or documents entered into in connection therewith, as amended, restated, modified or supplemented from time to time or any successor agreement.
“ Foreign Subsidiary ” shall mean any Subsidiary that is not a Domestic Subsidiary.
“ GAAP ” shall mean generally accepted accounting principles in the United States applied on a consistent basis and subject to the terms of Section 1.3 .
“ Governmental Authority ” shall mean the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).
“ Guarantee ” of or by any Person (the “ guarantor ”) shall mean any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “ primary obligor ”) in any manner, whether directly or indirectly and including any obligation, direct or indirect, of the guarantor (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance

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or supply funds for the purchase of) any security for the payment thereof, (ii) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (iv) as an account party in respect of any letter of credit or letter of guaranty issued in support of such Indebtedness or obligation; provided , that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business or Floor Plan Liabilities or Foreign Customer Finance Program Obligations. The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee is made or, if not so stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith. The term “Guarantee” used as a verb has a corresponding meaning.
“ Guarantors ” shall mean, collectively, (a) the Parent, (b) each Subsidiary identified as a “Guarantor” on the signature pages hereto, (c) each Person that joins as a Guarantor pursuant to Section 5.13 or otherwise, (d) with respect to (i) any Hedging Obligations between any Loan Party (other than the Borrower) and any Lender-Related Hedge Provider that are permitted to be incurred pursuant to Section 7.10 and any Bank Products Obligations owing by any Loan Party (other than the Borrower), the Borrower and (ii) the payment and performance by each Specified Loan Party of its obligations under its Guaranty with respect to all Swap Obligations, the Borrower, and (e) the successors and permitted assigns of the foregoing; provided , however , that no Excluded Subsidiary shall be a Guarantor.
“ Guaranty ” shall mean the Guaranty made by the Guarantors in favor of the Administrative Agent, for the benefit of the holders of the Obligations, pursuant to Article X .
“ Hazardous Materials ” shall mean all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.
“ Hedging Obligations ” of any Person shall mean any and all obligations of such Person, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired under (a) any and all Hedging Transactions, (b) any and all cancellations, buy backs, reversals, terminations or assignments of any Hedging Transactions and (c) any and all renewals, extensions and modifications of any Hedging Transactions and any and all substitutions for any Hedging Transactions.
“ Hedging Transaction ” of any Person shall mean (a) any transaction (including an agreement with respect to any such transaction) now existing or hereafter entered into by such Person that is a rate swap transaction, swap option, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap or option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option, spot transaction, credit protection transaction, credit swap, credit default swap, credit default option, total return swap, credit spread transaction, repurchase transaction, reverse repurchase transaction, buy/sell-back transaction, securities lending transaction, or any other similar transaction (including any option with respect to any of these transactions) or any combination thereof, whether or not any such transaction is governed by or subject to any master agreement and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

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“ Incremental Term Loan ” shall have the meaning provided in Section 2.23 .
“ Incremental Term Loan Commitment ” means, with respect to Persons identified as an “Incremental Term Loan Lender” in the applicable supplement or joinder in form and substance reasonably satisfactory to the Administrative Agent, together with their respective successors and assigns, the commitment of such Person to make the Incremental Term Loan hereunder pursuant to such supplement or joinder; provided that, at any time after the funding of the Incremental Term Loan, determination of “Required Lenders” shall include the outstanding principal amount of the Incremental Term Loan.
“ Indebtedness ” of any Person shall mean, without duplication, (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person in respect of the deferred purchase price of property or services (other than (x) trade payables incurred in the ordinary course of such Person’s business; provided that , for purposes of Section 8.1(g ), trade payables overdue by more than one hundred twenty (120) days shall be included in this definition except to the extent that any of such trade payables are being disputed in good faith and by appropriate measures, and (y) any earn‑outs, purchase price adjustments for working capital and similar adjustments in respect of any Acquisitions permitted under this Agreement), (iv) all obligations of such Person under any conditional sale or other title retention agreement(s) relating to property acquired by such Person, (v) the amount of Capital Lease Obligations of such Person, (vi) all obligations, contingent or otherwise, of such Person in respect of letters of credit, acceptances or similar extensions of credit, (vii) all Guarantees of such Person of the type of Indebtedness described in clauses (i) through (vi) above, (viii) all Indebtedness of a third party secured by any Lien on property owned by such Person, whether or not such Indebtedness has been assumed by such Person, (ix) all obligations of such Person, contingent or otherwise, to purchase, redeem, retire or otherwise acquire for value any Capital Stock of such Person at another’s option or upon the occurrence of a condition not solely within the control of such Person, in each case, on or prior to one year after the Maturity Date (other than payments permitted pursuant to Section 7.5) , (x) all Off‑Balance Sheet Liabilities and (xi) all Hedging Obligations. The Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture in which such Person is a general partner or a joint venturer, except to the extent that the terms of such Indebtedness provide that such Person is not liable therefor. The term “Indebtedness” shall not include Floor Plan Liabilities or Foreign Customer Finance Program Obligations.
“ Indemnified Taxes ” shall mean (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in (a), Other Taxes.
“ Ineligible Assignee ” means (a) any competitor of the Borrower identified on Schedule 1.01 , (b) any Person that, together with its Affiliates, directly or indirectly owns more than 5% of any competitor of the Borrower and is identified on Schedule 1.01 and (c) any Affiliates or Subsidiary thereof to the extent clearly identifiable as such on the basis that such Affiliate’s or Subsidiary’s names include the name of the specified Ineligible Assignee).  Schedule 1.01 may be updated by the Borrower from time to time pursuant to written notice to the Administrative Agent, provided, that no Default or Event of Default has occurred and is continuing at the time of such update; provided that any Person that is a Lender and subsequently becomes an Ineligible Assignee (but was not an Ineligible Assignee at the time it became a Lender) shall be deemed to not be an Ineligible Assignee hereunder with respect to any Loans or Commitments held by such Lender at the time such Lender became an Ineligible Assignee.
“ Information Memorandum ” shall mean the Confidential Information Memorandum dated May 2017 relating to the Borrower and the transactions contemplated by this Agreement and the other Loan Documents.

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“ Interest Period ” shall mean with respect to any Eurodollar Borrowing, a period of one, two, three or six months (in each case, subject to availability); provided, that:
(a)    the initial Interest Period for such Borrowing shall commence on the date of such Borrowing (including the date of any conversion from a Borrowing of another Type), and each Interest Period occurring thereafter in respect of such Borrowing shall commence on the day on which the next preceding Interest Period expires;
(b)    if any Interest Period would otherwise end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day, unless such Business Day falls in another calendar month, in which case such Interest Period would end on the next preceding Business Day;
(c)    any Interest Period which begins on the last Business Day of a calendar month or 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 such calendar month;
(d)    each principal installment of the Term Loans shall have an Interest Period ending on each installment payment date and the remaining principal balance (if any) of the Term Loans shall have an Interest Period determined as set forth above; and
(e)    no Interest Period may extend beyond the Revolving Commitment Termination Date, unless on the Revolving Commitment Termination Date the aggregate outstanding principal amount of Term Loans is equal to or greater than the aggregate principal amount of Eurodollar Loans with Interest Periods expiring after such date, and no Interest Period may extend beyond the Maturity Date.
“ Interim Financial Statements ” shall mean the unaudited consolidated financial statements of the Parent and its Subsidiaries for the fiscal quarter ending March 31, 2017, including balance sheets and statements of income or operations and cash flows.
“ Investments ” shall have the meaning set forth in Section 7.4 .
“ IP Rights ” shall mean all of the trademarks, service marks, trade names, copyrights, patents, patent rights, franchises, licenses and other intellectual property rights that are reasonably necessary for the operation of their respective businesses that the Borrower or any of the Loan Parties owns, or possesses the legal right to use.
“ IRS ” means the United States Internal Revenue Service.
“ Issuing Bank ” shall mean SunTrust Bank in its capacity as the issuer of Letters of Credit hereunder, or any successor issuer of Letters of Credit.
“ Joinder Agreement ” shall mean a joinder agreement substantially in the form of Exhibit 5.10 executed and delivered by a Subsidiary in accordance with the provisions of Section 5.13 or any other documents as the Administrative Agent shall reasonably deem appropriate for such purpose.
“ Laws ” or “ Law ” shall mean, collectively, all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders,

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directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.
“ LC Commitment ” shall mean that portion of the Aggregate Revolving Commitments that may be used by the Borrower for the issuance of Letters of Credit in an aggregate face amount not to exceed $5,000,000.
“ LC Disbursement ” shall mean a payment made by the Issuing Bank pursuant to a Letter of Credit.
“ LC Documents ” shall mean all applications, agreements and instruments relating to the Letters of Credit but excluding the Letters of Credit.
“ LC Exposure ” shall mean, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time, plus (b) the aggregate amount of all LC Disbursements that have not been reimbursed by or on behalf of the Borrower at such time. The LC Exposure of any Lender shall be its Pro Rata Share of the total LC Exposure at such time. For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the International Standby Practices 1998, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.
“ Lender Insolvency Event ” shall mean that (a) a Lender or its Parent Company is insolvent, or is generally unable to pay its debts as they become due, or admits in writing its inability to pay its debts as they become due, or makes a general assignment for the benefit of its creditors, (b) a Lender or its Parent Company is the subject of a bankruptcy, insolvency, reorganization, liquidation or similar proceeding, or a receiver, trustee, conservator, custodian or the like has been appointed for such Lender or its Parent Company, or such Lender or its Parent Company has taken any action in furtherance of or indicating its consent to or acquiescence in any such proceeding or appointment, or (c) a Lender or its Parent Company has been adjudicated as, or determined by any Governmental Authority having regulatory authority over such Person or its assets to be, insolvent; provided that, for the avoidance of doubt, a Lender Insolvency Event  shall not be deemed to have occurred  solely by virtue of the ownership or acquisition of any equity interest in or control of a Lender or a Parent Company thereof by a Governmental Authority or an instrumentality thereof.
“ Lender-Related Hedge Provider ” shall mean any Person that, (a)(i) at the time it enters into a Hedging Transaction with any Loan Party, is a Lender or an Affiliate of a Lender or (ii) has entered into a Hedging Transaction with any Loan Party that exists on the Closing Date, and such Person is a Lender or an Affiliate of a Lender on the Closing Date and (b) except when the Lender-Related Hedge Provider is SunTrust Bank and its Affiliates, has provided prior written notice to the Administrative Agent which has been acknowledged by the Borrower of (x) the existence of such Hedging Transaction, and (y) the methodology to be used by such parties in determining the obligations under such Hedging Transaction from time to time. In no event shall any Lender-Related Hedge Provider acting in such capacity be deemed a Lender for purposes hereof to the extent of and as to Hedging Obligations except that each reference to the term “ Lender ” in Article IX and Section 11.4 shall be deemed to include such Lender-Related Hedge Provider. In no event shall the approval of any such Person in its capacity as Lender-Related Hedge Provider be required in connection with the release or termination of any security interest or Lien of the Administrative Agent. No new Hedging Transactions may be established at any time that a Default or Event of Default exists.
“ Lenders ” shall mean each of the Persons identified as a “Lender” on the signature pages hereto and each Additional Lender that joins this Agreement pursuant to Section 2.23 and their successors and assigns and shall include, where appropriate, the Swingline Lender.

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“ Letter of Credit ” shall mean any stand-by letter of credit issued pursuant to Section 2.22 by the Issuing Bank for the account of the Borrower or any Subsidiary pursuant to the LC Commitment.
“ Letter of Credit Fee ” shall have the meaning set forth in Section 2.14(c) .
“ LIBOR ” shall mean, the rate per annum equal to the London interbank offered rate for deposits in Dollars appearing on Reuters screen page LIBOR 01 (or, if such service is not available, on any successor or substitute page of such service or any successor to such service, or such other commercially available source providing such quotations as may be designated by the Administrative Agent from time to time) at approximately11:00 a.m. (London time) two (2) Business Days prior to the first day of the applicable Interest Period, with a maturity comparable to such Interest Period; provided , that if the rate referred to above is not available at any such time for any reason, then LIBOR shall instead be the interest rate per annum , as determined by the Administrative Agent, to be the arithmetic average of the rates per annum at which deposits in Dollars in an amount equal to the amount of such Eurodollar Loan are offered by major banks in the London interbank market to the Administrative Agent at approximately 11:00 a.m. (London time), two (2) Business Days prior to the first day of such Interest Period. Notwithstanding anything to the contrary in the foregoing, if LIBOR is less than zero, such rate shall be deemed to be zero for purposes of this Agreement.
“ Lien ” shall mean any mortgage, pledge, security interest, lien (statutory or otherwise), charge, encumbrance, hypothecation, assignment, deposit arrangement, or other arrangement having the practical effect of any of the foregoing or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement and any capital lease having the same economic effect as any of the foregoing).
“ Loan Documents ” shall mean, collectively, this Agreement, the Collateral Documents, the LC Documents, the Fee Letter, all Notices of Borrowing, all Notices of Conversion/Continuation, all Compliance Certificates, all UCC Financing Statements, all stock powers and similar instruments of transfer, any promissory notes issued hereunder and any and all other instruments, agreements, documents and writings executed in connection with any of the foregoing.
“ Loan Parties ” shall mean, collectively, the Borrower and each Guarantor.
“ Loans ” shall mean all Revolving Loans, Swingline Loans and Term Loans in the aggregate or any of them, as the context shall require.
“ Management Agreement ” means that certain Management Agreement dated as of August 7, 2006 between the Borrower and Malibu Investor, LLC, as such agreement may be amended from time to time.
“ Management Investors ” shall mean each of the individuals affiliated or employed with the Borrower, together with their heirs and executors, in each case.
“ Master Agreement ” shall have the meaning set forth in the definition of “Hedging Transaction.”
“ Material Acquisition ” means the Project Sapphire Acquisition and any other acquisition of property or series of related acquisitions of property that (1) constitutes assets comprising all or substantially all of an operating unit of a business or constitutes all or substantially all of the equity interests of a Person and (2) involves the payment of consideration by the Parent and its Subsidiaries in excess of $5,000,000.
“ Material Adverse Effect ” shall mean, with respect to any event, act, condition or occurrence of whatever nature (including any adverse determination in any litigation, arbitration, or governmental investigation or proceeding), whether singularly or in conjunction with any other event or events, act or acts,

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condition or conditions, occurrence or occurrences whether or not related, resulting in a material adverse change in, or a material adverse effect on, (a) the business, results of operations, financial condition, assets or liabilities of the Borrower and the Loan Parties taken as a whole, (b) the ability of the Loan Parties to perform any of their respective obligations under the Loan Documents, (c) the rights and remedies of the Administrative Agent, the Issuing Bank, Swingline Lender, and the Lenders under any of the Loan Documents or (d) the legality, validity or enforceability of any of the Loan Documents.
“ Material Agreements ” shall mean (i) all agreements, indentures or notes governing the terms of any Material Indebtedness, (ii) the employment agreements of Jack Springer, Wayne Wilson and Ritchie Anderson, (iii) any repurchase agreement as amended between Borrower and GE Commercial Distribution Finance Corporation, (iv) any material supply agreement with an engine supplier and (v) the Existing Master Lease.
“ Material Disposition ” means any Recovery Event or Asset Sale (or series of related dispositions of property) that yields gross proceeds to the Parent or any of its Subsidiaries in excess of $5,000,000.
“ Material Indebtedness ” shall mean any Indebtedness (other than the Loans and Letters of Credit) and Hedging Obligations of the Borrower or any of its Subsidiaries, individually or in an aggregate committed or outstanding principal amount exceeding $7,500,000. For purposes of determining the amount of attributed Indebtedness from Hedging Obligations, the “principal amount” of any Hedging Obligations at any time shall be the Net Mark-to-Market Exposure of such Hedging Obligations.
“ Maturity Date ” shall mean the earlier of (i) July 1, 2022 or (ii) with respect to the Term Loans, the date on which the principal amount of all outstanding Term Loans have been declared or automatically have become due and payable pursuant to Section 8.1 (whether by acceleration or otherwise).
“ Moody’s ” shall mean Moody’s Investors Service, Inc.
“ Mortgages ” shall mean the mortgages, deeds of trust or deeds to secure debt that purport to grant to the Administrative Agent, for the benefit of the holders of the Obligations, a security interest in the fee interests and/or leasehold interests of any Loan Party in any real property.
“ Multiemployer Plan ” shall mean any “multiemployer plan” as defined in Section 4001(a)(3) of ERISA, which is contributed to by (or to which there is or may be an obligation to contribute of) the Borrower, any of the Loan Parties or an ERISA Affiliate, and each such plan for the five‑year period immediately following the latest date on which the Borrower, any of the Loan Parties or an ERISA Affiliate contributed to or had an obligation to contribute to such plan.
“ Net Cash Proceeds ” shall mean the aggregate cash or Permitted Investments proceeds received by the Borrower or any Subsidiary in respect of any Asset Sale, Recovery Event or any issuance of Indebtedness net of (a) direct costs incurred in connection therewith (including legal, accounting and investment banking fees, and sales commissions) and other reasonable and customary transaction costs, fees and expenses attributable to such transaction and payable by the Borrower or such Subsidiary, (b) taxes paid or payable as a result thereof and (c) in the case of any Asset Sale or any Recovery Event, the amount necessary to retire any Indebtedness secured by a Lien permitted by Section 7.2 (ranking senior to any Lien of the Administrative Agent) on the related property.
“ Net Mark-to-Market Exposure ” of any Person shall mean, as of any date of determination with respect to any Hedging Obligation, the excess (if any) of all unrealized losses over all unrealized profits of such Person arising from such Hedging Obligation. “Unrealized losses” shall mean the fair market value of

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the cost to such Person of replacing the Hedging Transaction giving rise to such Hedging Obligation as of the date of determination (assuming the Hedging Transaction were to be terminated as of that date), and “unrealized profits” means the fair market value of the gain to such Person of replacing such Hedging Transaction as of the date of determination (assuming such Hedging Transaction were to be terminated as of that date).
“ Non-Defaulting Lender ” shall mean, at any time, a Lender that is not a Defaulting Lender.
“ Non‑U.S. Plan ” shall mean any plan, fund (including, without limitation, any superannuation fund) or other similar program established, contributed to (regardless of whether through direct contributions or through employee withholding) or maintained outside the United States by the Borrower or one or more of the Loan Parties primarily for the benefit of employees of the Borrower or such of the Loan Parties residing outside the United States, which plan, fund or other similar program provides, or results in, defined‑benefit retirement benefits, or defined‑benefit payments to be made upon termination of employment, and which plan is not subject to ERISA or the Code.
“ Note ” shall have the meaning set forth in Section 2.10(b) .
“ Notices of Borrowing ” shall mean, collectively, the Notices of Revolving Borrowing and the Notices of Swingline Borrowing.
“ Notice of Conversion/Continuation ” shall mean the notice given by the Borrower to the Administrative Agent in respect of the conversion or continuation of an outstanding Borrowing as provided in Section 2.7 ( b ).
“ Notice of Delayed Draw Term Loan Borrowing ” shall have the meaning set forth in Section 2.5(b)(ii) .
“ Notice of Revolving Borrowing ” shall have the meaning set forth in Section 2.3 .
“ Notice of Swingline Borrowing ” shall have the meaning set forth in Section 2.4 .
“ Notices of Borrowing ” shall mean, collectively, the Notices of Revolving Borrowing, Notice of Delayed Draw Term Loan Borrowing and the Notices of Swingline Borrowing.
“ Obligations ” shall mean, collectively, (a) all amounts owing by the Loan Parties to the Administrative Agent, the Issuing Bank, any Lender (including the Swingline Lender) or the Arrangers pursuant to or in connection with this Agreement or any other Loan Document or otherwise with respect to any Loan or Letter of Credit including without limitation, all principal, interest (including any interest accruing after the filing of any petition in bankruptcy or the commencement of any insolvency, reorganization or like proceeding relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), all reimbursement obligations, fees, expenses, indemnification and reimbursement payments, costs and expenses (including all fees and expenses of counsel to the Administrative Agent, the Issuing Bank and any Lender (including the Swingline Lender) incurred pursuant to this Agreement or any other Loan Document), whether direct or indirect, absolute or contingent, liquidated or unliquidated, now existing or hereafter arising hereunder or thereunder, (b) all Hedging Obligations owed by any Loan Party to any Lender-Related Hedge Provider permitted by Section 7.10 , and (c) all Bank Product Obligations, together with all renewals, extensions, modifications or refinancings of any of the foregoing; provided , that “Obligations” of a Guarantor shall exclude any Excluded Swap Obligations of such Guarantor.
“ OFAC ” shall mean the U.S. Department of the Treasury’s Office of Foreign Assets Control.

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“ Off-Balance Sheet Liabilities ” of any Person shall mean (i) any liability of such Person under any sale and leaseback transactions that do not create a liability on the balance sheet of such Person, excluding the Existing Master Lease and any sale and leaseback transactions permitted hereunder, (ii) any Synthetic Lease Obligation or (iii) any obligation arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the balance sheet of such Person; provided that the term “Off-Balance Sheet Liabilities” shall not include Floor Plan Liabilities, Foreign Customer Finance Program Obligations or any obligations expressly excluded under clause (ii) above.
“ Organizational Documents ” shall mean, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement or limited liability company agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.
“ OSHA ” shall mean the Occupational Safety and Health Act of 1970, as amended from time to time, and any successor statute.
“ Other Connection Taxes ” shall mean, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).
“ Other Taxes ” shall mean all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 2.25 ).
“ Parent ” shall have the meaning given in the introductory paragraph hereof.
“ Parent Company ” shall mean, with respect to a Lender, the bank holding company (as defined in Federal Reserve Board Regulation Y), if any, of such Lender, and/or any Person owning, beneficially or of record, directly or indirectly, a majority of the shares of such Lender.
“ Parent Operating Agreement ” means the Amended and Restated Operating Agreement of the Parent dated as of February 5, 2014, as amended.
“ Participant ” shall have the meaning set forth in Section 11.4(d ).
“ Participant Register ” shall have the meaning set forth in Section 11.4(e) .
“ Patriot Act ” shall mean the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001).

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“ Payment Office ” shall mean the office of the Administrative Agent located at 303 Peachtree Street, N.E., Atlanta, Georgia 30308, or such other location as to which the Administrative Agent shall have given written notice to the Borrower and the other Lenders.
“ PBGC ” shall mean the Pension Benefit Guaranty Corporation referred to and defined in ERISA, and any successor entity performing similar functions.
“ Permitted Acquisition ” shall mean an Investment consisting of an Acquisition by the Borrower or any Subsidiary, provided that (a) no Default or Event of Default shall have occurred and be continuing or would result from such Acquisition, (b) the property acquired (or the property of the Person acquired) in such Acquisition is used or useful in the same or a similar line of business as the Borrower and its Subsidiaries were engaged in on the Closing Date (or a business reasonably related, supplemental or ancillary thereto), (c) in the case of an Acquisition of the Capital Stock of another Person, the board of directors (or other comparable governing body) of such other Person shall have duly approved such Acquisition, (d) the Borrower shall have delivered to the Administrative Agent a Pro Forma Compliance Certificate demonstrating that after giving effect to such Acquisition on a Pro Forma Basis, (x) the Loan Parties would be in compliance with the financial covenants set forth in Article VI recomputed as of the end of the period of the four Fiscal Quarters most recently ended for which the Borrower has delivered financial statements under this Agreement; provided that, for purposes of calculating the Consolidated Leverage Ratio for purposes of this clause (x), Consolidated Total Debt of the Borrower shall be deemed to include the aggregate amount of any earn-out obligations, as reasonably estimated by the Borrower in good faith, scheduled to be incurred pursuant to such Permitted Acquisition, and (y) the Consolidated Leverage Ratio of the Loan Parties is at least 0.25 less than the maximum Consolidated Leverage Ratio permitted to be maintained under Section 6.2 at such time, (e) the representations and warranties made by the Loan Parties in each Loan Document shall be true and correct in all material respects at and as if made as of the date of such Acquisition (after giving effect thereto), except to the extent such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date, and (f) immediately after giving effect to such Acquisition, the Borrower shall have at least $5,000,000 of the sum of cash on hand plus availability existing under the Aggregate Revolving Commitments.
“ Permitted Encumbrances ” shall have the meaning assigned to such term in Section 7.2 .
“ Permitted Investments ” shall mean:
(a)    direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States (or by any agency or instrumentality thereof to the extent such obligations are backed by the full faith and credit of the United States), in each case maturing within one year from the date of acquisition thereof;
(b)    commercial paper having the highest rating, at the time of acquisition thereof, of S&P or Moody’s and in either case maturing within six (6) months from the date of acquisition thereof;
(c)    certificates of deposit, bankers’ acceptances and time deposits maturing within one year of the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States or any state thereof which has a combined capital and surplus and undivided profits of not less than $500,000,000;

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(d)    fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (c) above;
(e)    mutual funds investing solely in any one or more of the Permitted Investments described in clauses (a) through (d) above; and
(f)    other marketable debt instruments approved by the Administrative Agent in its reasonable discretion.
“ Permitted Subordinated Debt ” shall mean Subordinated Debt which contains terms and conditions reasonably acceptable to the Administrative Agent (including as to subordination to the Obligations) and does not exceed in the aggregate for all Loan Parties an amount equal to $3,000,000; provided that the Loan Parties shall be permitted to incur additional Subordinated Debt in an aggregate amount not to exceed $2,000,000 solely in connection with the consummation of Permitted Acquisitions.
“ Permitted Tax Distributions ” shall mean (a) tax distributions by a Loan Party (so long as such Loan Party is treated as a pass through or disregarded entity) to its members (“Tax Distributions”) paid quarterly in arrears based on such Loan Party’s good faith estimate of a member’s cumulative, allocated taxable income for a taxable year and the Presumed Tax Rate. Such Tax Distributions from any Loan Party for any taxable year shall not exceed the product of (1) the sum of all Loan Parties gross income or gain for such taxable year less all items of deduction, loss and the loss equivalent of tax credits for such taxable year, an amount that shall be equal to the Parent’s aggregate “taxable income” (within the meaning of Section 63 of the Code) and (2) the Presumed Tax Rate for such taxable year; provided that (x) for each taxable year subsequent to the Closing Date the Loan Parties shall make a final accounting for Tax Distributions for each taxable year after actual taxable income allocable from the Loan Parties for such taxable year has been determined, and (i) any shortfall in the amount of Tax Distributions the members received for such taxable year based on such final determination may be distributed to such members, and (ii) any excess in the amount of Tax Distributions made for such taxable year shall be applied to reduce the amount of Tax Distributions to be made for the subsequent taxable year (and, to the extent not covered thereby, for taxable years thereafter) to the full extent thereof and (y) the calculations shall take into account, for the avoidance of doubt, the effect of any tax basis adjustment under Sections 734 or 743 of the Code and any other tax benefit accruing to PubCo as a result of payments made pursuant to the Tax Receivables Agreement for such taxable year, (b) additional distributions by Borrower to Parent and by Parent to PubCo sufficient for PubCo to satisfy its obligation to make tax benefit payments pursuant to the Tax Receivables Agreement and (c) any tax distributions or tax benefit payments permitted to be made by the Parent to its respective shareholders pursuant to the Parent Operating Agreement.
“ Person ” shall mean any individual, partnership, firm, corporation, association, joint venture, limited liability company, trust or other entity, or any Governmental Authority.
“ Plan ” shall mean any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.
“ Plan of Reorganization ” shall have the meaning set forth in Section 11.4(b)(vii)(C) .
“ Platform ” shall have the meaning set forth in Section 11.1(b)(iii) .

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“ Presumed Tax Rate ” for any taxable year means the highest effective marginal combined U.S. federal, state and local income, earnings (or similar tax) and self-employment tax rate prescribed during such taxable year for an individual or corporation residing in California or in the city of New York (after giving effect to the deductibility of state and local income taxes for federal tax purposes and taking into account the character (e.g., long-term or short-term capital gain or ordinary or tax-exempt) of the applicable income).
“ Pro Forma Basis ” shall mean, for purposes of calculating compliance with respect to any test or covenant hereunder (excluding, for the avoidance of doubt, Consolidated Excess Cash Flow), compliance with any test or covenant shall be determined after giving effect to (i) any Material Acquisition, (ii) any incurrence or repayment of Indebtedness or Delayed Draw Term Loan Borrowing, and (iii) any Material Disposition (including (a) pro forma adjustments arising out of events which are directly attributable to any proposed Material Acquisition, any incurrence or repayment of Indebtedness or any Material Disposition, are factually supportable and are expected to have a continuing impact, in each case as determined on a basis consistent with Article 11 of Regulation S-X of the Securities Act of 1933, as amended, as interpreted by the staff of the SEC, (b) pro forma adjustments determined in good faith by the Borrower arising out of operating and other expense reductions attributable to such transaction being given pro forma effect that (y) have been realized or (z) will be implemented following such transaction and are supportable and quantifiable and are expected to be realized within eighteen (18) months following the date of such event and, in each case, including, but not limited to, (1) reduction in personnel expenses, (2) reduction of costs related to administrative functions, (3) reduction of costs related to leased or owned properties and (4) reductions from the consolidation of operations and streamlining of corporate overhead, and (c) such other adjustments as determined in good faith by the Borrower; provided that (A) the aggregate adjustment under clauses (a), (b) and (c) shall not exceed 10% of Consolidated EBITDA during any applicable calculation period, and using, for purposes of determining such compliance, the historical financial statements of all entities or assets so acquired and the consolidated financial statements of the Parent and its Subsidiaries and assuming that (i) all acquisitions that have been consummated during the period, and any Asset Sale and any Indebtedness or other liabilities repaid in connection therewith had been consummated and incurred or repaid as of the first day of the period of four Fiscal Quarters most recently ended for which the Borrower has delivered financial statements under this Agreement, (ii) any Indebtedness incurred or assumed in connection with such transaction that is not retired in connection with such transaction (x) shall be deemed to have been incurred as of the first day of the applicable period and (y) if such Indebtedness has a floating or formula rate, shall have an implied rate of interest for the applicable period for purposes of this definition determined by utilizing the rate which is or would be in effect with respect to such Indebtedness as at the relevant date of determination and (iii) income statement items (whether positive or negative) and Capital Expenditures attributable to the Person or property acquired shall be included beginning as of the first day of the applicable period and (B) the Borrower shall provide the Administrative Agent with written calculations of the proposed adjustments set forth in clauses (b) and (c) above prior to the inclusion of such adjustments in the calculation of any financial covenant under the Loan Documents.
“ Pro Forma Compliance Certificate ” shall mean a certificate of a Responsible Officer of the Borrower containing reasonably detailed calculations of the financial covenants set forth in Article VI recomputed as of the end of the period of the four fiscal quarters most recently ended for which the Borrower has delivered financial statements under this Agreement after giving effect to the applicable transaction on a Pro Forma Basis.
“ Project Sapphire Acquisition ” means the Acquisition by the Borrower on the Delayed Draw Term Loan Funding Date of one hundred percent (100%) of the Equity Interests of the Target.

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“ Project Sapphire Acquisition Documents ” means the Project Sapphire Purchase Agreement, the Escrow Agreement (as defined in the Project Sapphire Purchase Agreement) and each other “Ancillary Agreement” as defined in the Project Sapphire Purchase Agreement.
“ Project Sapphire Purchase Agreement ” means that certain the Unit Purchase Agreement, dated as of June 28, 2017, by and among the Borrower, the Target, the unitholders of the Target party thereto and other Persons party thereto.
“ Pro Rata Share ” shall mean (a) with respect to any Commitment of any Lender at any time, a percentage, the numerator of which shall be such Lender’s Commitment (or if such Commitments have been terminated or expired or the Loans have been declared to be due and payable, such Lender’s Revolving Credit Exposure, Delayed Draw Term Loan or Term Loan A, as applicable), and the denominator of which shall be the sum of such Commitments of all Lenders (or if such Commitments have been terminated or expired or the Loans have been declared to be due and payable, all Revolving Credit Exposure, Delayed Draw Term Loans or the Term Loan A, as applicable, of all Lenders) and (b) with respect to all Commitments of any Lender at any time, the numerator of which shall be the sum of such Lender’s Revolving Commitment (or if such Revolving Commitments have been terminated or expired or the Loans have been declared to be due and payable, such Lender’s Revolving Credit Exposure) plus such Lender’s Delayed Draw Term Loan Commitment (or if such Delayed Draw Term Loan Commitments have been terminated or expired or the Loans have been declared to be due and payable, such Lender’s Delayed Draw Term Loans) plus such Lender’s Term Loan A, and the denominator of which shall be the sum of all Lenders’ Revolving Commitments (or if such Revolving Commitments have been terminated or expired or the Loans have been declared to be due and payable, all Revolving Credit Exposure of all Lenders funded under such Commitments) plus all Lenders’ Delayed Draw Term Loan Commitments (or if such Delayed Draw Term Loan Commitments have been terminated or expired or the Loans have been declared to be due and payable, all Delayed Draw Term Loans of all Lenders funded under such Commitments) and all of the Term Loan A.
“ PubCo ” means Malibu Boats, Inc.
“ Qualified Acquisition ” means any Permitted Acquisition that occurs after the Closing Date (excluding, for the avoidance of doubt, the Project Sapphire Acquisition) that involves the payment of consideration by the Parent and its Subsidiaries in excess of $25,000,000.
“ Qualified ECP Guarantor ” shall mean, in respect of any Swap Obligation, each Loan Party that has total assets exceeding $10,000,000 at the time the relevant Guaranty or grant of the relevant security interest becomes effective with respect to such Swap Obligation or such other Loan Party as constitutes an “eligible contract participant” under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another Person to qualify as an “eligible contract participant” at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
“ Real Estate ” shall mean all real property owned or leased by the Borrower and any of the Loan Parties.
“ Real Estate Documents ” shall mean,
(I) with respect to any fee owned interest in real property of a Loan Party with a value in excess of $7,500,000:
(a)    a fully executed and notarized Mortgage encumbering the fee interest of such Loan Party in such real property;

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(b)    ALTA mortgagee title insurance policies issued by a title insurance company reasonably acceptable to the Administrative Agent with respect to such real property, assuring the Administrative Agent that the Mortgage covering such real property creates a valid and enforceable first priority mortgage lien on such real property, free and clear of all defects and encumbrances except Permitted Encumbrances, which title insurance policies shall otherwise be in form and substance reasonably satisfactory to the Administrative Agent and shall include such endorsements as are reasonably requested by the Administrative Agent;
(c)    (i) a life of loan flood zone determination indicating whether such real property is in an area designated by the Federal Emergency Management Agency as having special flood or mud slide hazards (a “ Flood Hazard Property ”) and (ii) indicating if such real property is a Flood Hazard Property, (A) whether the community in which such real property is located is participating in the National Flood Insurance Program, (B) the applicable Loan Party’s written acknowledgment of receipt of written notification from the Administrative Agent (1) as to the fact that such real property is a Flood Hazard Property and (2) as to whether the community in which each such Flood Hazard Property is located is participating in the National Flood Insurance Program and (C) copies of flood insurance policies under the National Flood Insurance Program (or private insurance endorsed to cause such private insurance to be fully compliant with the federal law as regards private placement insurance applicable to the National Flood Insurance Program, with commercially reputable insurance companies not Affiliates of the Borrower and reasonably acceptable to the Administrative Agent) or certificates of insurance of the Borrower and its Subsidiaries evidencing such flood insurance coverage in such amounts and with such deductibles as the Administrative Agent may reasonably request (and, without limiting the foregoing, in compliance with applicable Flood Insurance Laws) and naming the Administrative Agent and its successors and/or assigns as sole loss payee on behalf of the Lenders;
(d)    if requested by the Administrative Agent, an environmental assessment report, as to such real property, in form and substance reasonably satisfactory to and from professional firms reasonably acceptable to the Administrative Agent;
(e)    if requested by the Administrative Agent, evidence reasonably satisfactory to the Administrative Agent that such real property, and the uses of such real property, are in compliance in all material respects with all applicable zoning Laws (the evidence submitted as to which should include the zoning designation made for such real property, the permitted uses of such real property under such zoning designation and, if available, zoning requirements as to parking, lot size, ingress, egress and building setbacks); and
(f)    an opinion of legal counsel to the Loan Party granting the Mortgage on such real property, addressed to the Administrative Agent and each Lender, in form and substance reasonably acceptable to the Administrative Agent.
and (II) with respect to any leasehold interest in real property of a Loan Party with a value in excess of $7,500,000, such estoppel letters, consents and waivers from the landlords on such real property as may be reasonably requested by the Administrative Agent, which estoppel letters shall be in the form and substance reasonably satisfactory to the Administrative Agent.
“ Recipient ” shall mean (a) the Administrative Agent, (b) any Lender and (c) any Issuing Bank as applicable.
“ Recovery Event ” shall mean any loss of, damage to or destruction of, or any condemnation or other taking for public use of, any property of the Borrower or any Subsidiary.

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“ Register ” shall have the meaning assigned to such term in Section 11.4(c) .
“ Regulation D ” shall mean Regulation D of the Board of Governors of the Federal Reserve System, as the same may be in effect from time to time, and any successor regulations.
“ Regulation T ” shall mean Regulation T of the Board of Governors of the Federal Reserve System, as the same may be in effect from time to time, and any successor regulations.
“ Regulation U ” shall mean Regulation U of the Board of Governors of the Federal Reserve System, as the same may be in effect from time to time, and any successor regulations.
“ Regulation X ” shall mean Regulation X of the Board of Governors of the Federal Reserve System, as the same may be in effect from time to time, and any successor regulations.
“ Regulation Y ” shall mean Regulation Y of the Board of Governors of the Federal Reserve System, as the same may be in effect from time to time, and any successor regulations.
“ Related Parties ” shall mean, with respect to any specified Person, such Person’s Affiliates and the respective managers, administrators, trustees, partners, directors, officers, employees, agents, advisors or other representatives of such Person and such Person’s Affiliates.
“ Release ” shall mean any release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into the environment (including ambient air, surface water, groundwater, land surface or subsurface strata) or within any building, structure, facility or fixture.
“ Required Lenders ” shall mean, at any time, Lenders holding more than 50% of the aggregate outstanding Revolving Commitments, Delayed Draw Term Loan Commitments (or if such Delayed Draw Term Loan Commitments have terminated or expired, the Delayed Draw Term Loans) and the Term Loan A at such time or if the Lenders have no Commitments outstanding, then Lenders holding more than 50% of the Revolving Credit Exposure and the Term Loans; provided that, to the extent that any Lender is a Defaulting Lender, such Defaulting Lender and all of its Revolving Commitments, Delayed Draw Term Loan Commitments, Revolving Credit Exposure and Term Loans shall be excluded for purposes of determining Required Lenders.
“ Requirement of Law ” for any Person shall mean the articles or certificate of incorporation, bylaws, partnership certificate and agreement, or limited liability company certificate of organization and agreement, as the case may be, and other organizational and governing documents of such Person, and any Law, treaty, rule or regulation, or determination of a Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
“ Responsible Officer ” shall mean, with respect to any Person, any of the president, the chief executive officer, the chief operating officer, the chief financial officer, the treasurer or a vice president of such Person or such other representative of such Person as may be designated in writing by any one of the foregoing with the consent of the Administrative Agent; and, with respect to the financial covenants only, the chief financial officer or the treasurer of such Person.
“ Restricted Payment ” shall mean, for any Person, any dividend or distribution on any class of its Capital Stock, or any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, retirement, defeasance or other acquisition of, any shares of its Capital Stock, any Indebtedness subordinated to the Obligations or any Guarantee thereof or any options, warrants, or other rights to purchase such Capital Stock or such Indebtedness, whether now or hereafter outstanding.

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“ Revolving Commitment ” shall mean, with respect to each Lender, the commitment of such Lender to make Revolving Loans to the Borrower and to acquire participations in Letters of Credit and Swingline Loans in an aggregate principal amount not exceeding the amount set forth with respect to such Lender on Schedule I , as such schedule may be amended pursuant to Section 2.23 , or in the case of a Person becoming a Lender after the Closing Date, the amount of the assigned “Revolving Commitment” as provided in the Assignment and Acceptance executed by such Person as an assignee, or the joinder executed by such Person, in each case as such commitment may subsequently be increased or decreased pursuant to terms hereof.
“ Revolving Commitment Termination Date ” shall mean the earliest of (i) the Maturity Date and (ii) the date on which the Revolving Commitments are terminated pursuant to Section 2.8 or 8.1 .
“ Revolving Credit Exposure ” shall mean, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender’s Revolving Loans, LC Exposure and Swingline Exposure.
“ Revolving Loan ” shall mean a loan made by a Lender (other than the Swingline Lender) to the Borrower under its Revolving Commitment, which may either be a Base Rate Loan or a Eurodollar Loan.
“ S&P ” shall mean McGraw Hill Financial, Inc. and any successor thereto.
“ Sanctioned Country ” shall mean, at any time, a country or territory that is, or whose government is, the subject or target of any Sanctions (at the time of this Agreement, Cuba, Iran, North Korea, Sudan and the Crimea Region of the Ukraine).
“ Sanctioned Person ” shall mean, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by OFAC, the U.S. Department of State, the United Nations Security Council, the European Union or Her Majesty’s Treasury of the United Kingdom, (b) any Person located, organized or resident in a Sanctioned Country or (c) any Person controlled by any such Person.
“ Sanctions ” shall mean economic or financial sanctions or trade embargoes administered or enforced from time to time by (a) the U.S. government, including those administered by OFAC or the U.S. Department of State or (b) the European Union or Her Majesty’s Treasury of the United Kingdom.
“ SEC ” shall mean the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.
“ Security Agreement ” shall mean the amended and restated security agreement dated as of the Closing Date executed in favor of the Administrative Agent, for the benefit of the holders of the Obligations, by each of the Loan Parties.
“ Share Repurchases ” shall mean the share repurchases by PubCo of a portion of its outstanding Capital Stock and a portion of the Capital Stock of the Parent and the related purchases of the Capital Stock of the Parent.
“ Share Repurchase Payments ” shall mean all of the payments made by PubCo under the Share Repurchases, and payments of all related dividends, distributions and other Restricted Payments by the Parent and Borrower in connection therewith, in an aggregate principal amount not to exceed $20,000,000 in any Fiscal Year; provided that, if less than $20,000,000 in Share Repurchase Payments are made in a given Fiscal Year, the Borrower shall be permitted to make additional Share Repurchase Payments in the immediately succeeding Fiscal Year in an amount equal to one hundred percent (100%) of the difference between (i) the amount of Share Repurchase Payments permitted to be made pursuant to Section 7.5(i) for such Fiscal Year and (ii) the amount of Share Repurchase Payments actually made by the Loan Parties during such fiscal year;

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provided , further , that (A) any amount so carried forward into any subsequent Fiscal Year shall not be considered in calculating the amount available to be carried forward into any future Fiscal Year and (B) Share Repurchase Payments in any Fiscal Year shall be deemed applied as follows: first, toward the amount of Share Repurchase Payments permitted to be made pursuant to Section 7.5(i) for such Fiscal Year and, second, toward the carry-forward from the previous Fiscal Year.
“ Solvent ” shall mean, with respect to any Person on a particular date, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including subordinated and contingent liabilities, of such Person; (b) the present fair saleable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts and liabilities, including subordinated and contingent liabilities as they become absolute and matured; (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature; (d) such Person is not engaged in a business or transaction, and is not about to engage in a business or transaction, for which such Person’s property would constitute an unreasonably small capital; (e) such Person is able to pay its debts and other liabilities, contingent obligations and other commitments as they mature in the ordinary course of business and (f) such Person does not intend, in any transaction, to hinder, delay or defraud either present or future creditors or any other person to which such Person is or will become, through such transaction, indebted. The amount of contingent liabilities (such as litigation, guaranties and pension plan liabilities) at any time shall be computed as the amount that, in light of all the facts and circumstances existing at the time, represents the amount that would reasonably be expected to become an actual or matured liability.
“ Specified Loan Party ” shall mean each Loan Party that is, at the time on which the relevant Guarantee or grant of the relevant security interest under the Loan Documents by such Loan Party becomes effective with respect to a Swap Obligation, a corporation, partnership, proprietorship, organization, trust or other entity that would not be an “eligible contract participant” under the Commodity Exchange Act at such time but for the effect of Section 10.8 .
“ Specified Representations ” shall mean the representations of the Loan Parties contained in Section 4.1 , 4.2 , 4.3 , 4.6 , 4.7 , 4.9 , 4.15 , 4.17 (subject to the Certain Funds Provision), 4.19 and 4.20 .
“ Sponsors ” shall mean Black Canyon Capital LLC and Horizon Holdings LLC, together with their Affiliates and funds in respect of whose investments they or their Affiliates manage.
“ Subordinated Debt ” shall mean Indebtedness of any Person subordinated to the repayment of the Obligations pursuant to a written agreement in form and substance reasonably satisfactory to the Administrative Agent.
“ Subordinated Debt Documents ” shall mean all indentures, agreements, notes, guaranties and other material agreements governing or evidencing any Permitted Subordinated Debt and all other material documents relating thereto.
“ Subsidiary ” shall mean, with respect to any Person (the “ parent ”), any corporation, partnership, joint venture, limited liability company, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power, or in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise controlled, by the parent or one or more subsidiaries of the

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parent or by the parent and one or more subsidiaries of the parent. Unless otherwise indicated, all references to “Subsidiary” hereunder shall mean a Subsidiary of the Borrower.
“ SunTrust Bank ” shall mean SunTrust Bank and its successors.
“ Swap Obligations ” shall mean with respect to any Guarantor any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.
“ Swingline Commitment ” shall mean the commitment of the Swingline Lender to make Swingline Loans in an aggregate principal amount at any time outstanding not to exceed $5,000,000.
“ Swingline Exposure ” shall mean, with respect to each Lender, the principal amount of the Swingline Loans in which such Lender is legally obligated either to make a Base Rate Loan or to purchase a participation in accordance with Section 2.4 , which shall equal such Lender’s Pro Rata Share of all outstanding Swingline Loans.
“ Swingline Lender ” shall mean SunTrust Bank in its capacity as provider of Swingline Loans, or any successor swingline lender hereunder.
“ Swingline Loan ” shall mean a loan made to the Borrower by the Swingline Lender under the Swingline Commitment.
“ Synthetic Lease ” shall mean a lease transaction under which the parties intend that (i) the lease will be treated as an “operating lease” by the lessee pursuant to Accounting Standards Codification Sections 840-10 and 840-20, as amended and (ii) the lessee will be entitled to various tax and other benefits ordinarily available to owners (as opposed to lessees) of like property.
“ Synthetic Lease Obligations ” shall mean, with respect to any Person, the sum of (i) all remaining rental obligations of such Person as lessee under Synthetic Leases which are attributable to principal and, without duplication, (ii) all rental and purchase price payment obligations of such Person under such Synthetic Leases assuming such Person exercises the option to purchase the lease property at the end of the lease term.
“ Target ” shall mean Cobalt Boats, LLC.
“ Taxes ” shall mean all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax, or penalties applicable thereto.
“ Tax Receivables Agreement ” shall mean that certain Tax Receivables Agreement dated as of February 5, 2014, among PubCo, the Parent and the members party thereto.
“ Term Loan A ” shall have the meaning set forth in Section 2.5(a) .
“ Term Loan A Commitment ” shall mean, with respect to each Lender, the obligation of such Lender to make its portion of the Term Loan A hereunder on the Closing Date, in a principal amount not exceeding the amount set forth with respect to such Lender on Schedule I . The aggregate principal amount of all Lenders’ Term Loan A Commitments as of the Closing Date is $55,000,000.
“ Term Loan Commitments ” shall mean the Term Loan A Commitments and the Delayed Draw Term Loan Commitments.

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“ Term Loans ” shall mean the Term Loan A and the Delayed Draw Term Loan.
“ Trade Date ” shall have the meaning set forth in Section 11.4(b)(vii)(A) .
“ Trading with the Enemy Act ” shall mean the Trading with the Enemy Act of the United States of America (50 U.S.C. App. §§ 1 et seq.), as amended and in effect from time to time.
“ Type ”, when used in reference to a Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate or the Base Rate.
“ Unfinanced Cash Capital Expenditures ” shall mean, for any period, the amount of Capital Expenditures made by the Parent and its Subsidiaries during such period in cash, but excluding any such Capital Expenditures financed with Indebtedness permitted under Section 7.1 (for the purposes of such calculation, not to exceed $3 million in any applicable twelve-month period) and excluding any such Capital Expenditures that constitute reinvestment of proceeds as permitted under Section 2.12(a) .
“ Unfunded Pension Liability ” of any Plan shall mean the amount, if any, by which the value of the accumulated plan benefits under the Plan, determined on a plan termination basis in accordance with actuarial assumptions at such time consistent with those prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds the fair market value of all Plan assets allocable to such liabilities under Title IV of ERISA (excluding any accrued but unpaid contributions).
“ Uniform Commercial Code ” or “ UCC ” shall mean the Uniform Commercial Code as in effect from time to time in the respective State of the State of organization of the Borrower and each Loan Party.
“ United States ” or “ U.S. ” shall mean the United States of America.
“ U.S. Person ” shall mean any Person that is a “United States person” as defined in Section 7701(a)(30) of the Code.
“ U.S. Tax Compliance Certificate ” shall have the meaning set forth in Section 2.20(g).
“ Withdrawal Liability ” shall mean liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
“ Withholding Agent ” shall mean any Loan Party and the Administrative Agent.
“ Working Capital ” shall mean, with respect to the Parent and its Subsidiaries on a consolidated basis at any date of determination, Current Assets at such date of determination minus Current Liabilities at such date of determination; provided, that, increases or decreases in Working Capital shall be calculated without regard to any changes in Current Assets or Current Liabilities as a result of (a) any reclassification in accordance with GAAP of assets or liabilities, as applicable, between current and noncurrent or (b) the effects of purchase accounting.
“ Write-Down and Conversion Powers ” shall mean, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

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Section 1.2.     Classifications of Loans and Borrowings . For purposes of this Agreement, Loans may be classified and referred to by Class (e.g. a “Revolving Loan” or “Term Loan”) or by Type (e.g. a “Eurodollar Loan” or “Base Rate Loan”) or by Class and Type (e.g. “Revolving Eurodollar Loan”). Borrowings also may be classified and referred to by Class (e.g. “Revolving Borrowing”) or by Type (e.g. “Eurodollar Borrowing”) or by Class and Type (e.g. “Revolving Eurodollar Borrowing”).
Section 1.3.     Accounting Terms and Determination .
(a)    Unless otherwise defined or specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared, in accordance with GAAP as in effect from time to time, applied on a basis consistent with the most recent audited consolidated financial statement of the Borrower delivered pursuant to Section 5.1(a ); provided , that if the Borrower notifies the Administrative Agent that the Borrower wishes to amend any covenant to eliminate the effect of any change in GAAP on the operation of such covenant (or if the Administrative Agent notifies the Borrower that the Required Lenders wish to amend Article VI or any covenant for such purpose), then the Borrower’s compliance with such covenant shall be determined on the basis of GAAP in effect immediately before the relevant change in GAAP became effective, until either such notice is withdrawn or such covenant is amended in a manner satisfactory to the Borrower and the Required Lenders.
(b)    Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to any election under Accounting Standards Codification Section 825-10 (or any other Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of any Loan Party or any Subsidiary of any Loan Party at “fair value”, as defined therein. Without limiting the foregoing, leases shall continue to be classified and accounted for on a basis consistent with that reflected in the Audited Financial Statements for all purposes of this Agreement, notwithstanding any change in GAAP relating thereto, unless the parties hereto shall enter into a mutually acceptable amendment addressing such changes, as provided for above.
(c)    Notwithstanding the above, the parties hereto acknowledge and agree that all calculations of the financial covenants in Article VI (including for purposes of determining the Applicable Rate and any transaction that by the terms of this Agreement requires that any financial covenant contained in Article VI be calculated on a Pro Forma Basis) shall be made on a Pro Forma Basis with respect to any Material Disposition or Material Acquisition occurring during such period.
(d)    Notwithstanding any changes in GAAP after the Closing Date, any lease of the Loan Parties and their Subsidiaries that would not be characterized as a Capital Lease Obligation or Indebtedness under GAAP in effect on the Closing Date (whether such lease is entered into before or after the Closing Date) shall not constitute Indebtedness, or a Capital Lease Obligation under this Agreement or any other Loan Document as a result of such changes in GAAP.
Section 1.4.     Terms Generally . The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including” and the word “to” means “to but

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excluding”. Unless the context requires otherwise (i) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as it was originally executed or as it may from time to time be amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (ii) any reference herein to any Person shall be construed to include such Person’s successors and permitted assigns, (iii) the words “hereof”, “herein” and “hereunder” and words of similar import shall be construed to refer to this Agreement as a whole and not to any particular provision hereof, (iv) all references to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles, Sections, Exhibits and Schedules to this Agreement and (v) all references to a specific time shall be construed to refer to the time in Atlanta, Georgia, unless otherwise indicated.
Section 1.5.     Letter of Credit Amounts . Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the stated amount of such Letter of Credit in effect at such time; provided, however, that with respect to any Letter of Credit that, by its terms or the terms of any Issuer Document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.
Section 1.6.     Times of Day . Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).

ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENTS
Section 2.1.     General Description of Facilities . Subject to and upon the terms and conditions herein set forth, (i) the Lenders hereby establish in favor of the Borrower a revolving credit facility pursuant to which each Lender severally agrees (to the extent of such Lender’s Revolving Commitment) to make Revolving Loans to the Borrower in accordance with Section 2.2 , (ii) the Issuing Bank may issue Letters of Credit in accordance with Section 2.22 , (iii) the Swingline Lender may make Swingline Loans in accordance with Section 2.4 , (iv) each Lender agrees to purchase a participation interest in the Letters of Credit and the Swingline Loans pursuant to the terms and conditions hereof; provided , that in no event shall the aggregate principal amount of all outstanding Revolving Loans, Swingline Loans and outstanding LC Exposure exceed the Aggregate Revolving Commitments in effect from time to time; (v) each Lender severally agrees to make its portion of the Term Loan A to the Borrower on the Closing Date in a principal amount not exceeding such Lender’s Term Loan A Commitment; and (vi) the Lenders hereby establish in favor of the Borrower a delayed draw term loan facility pursuant to which each Lender severally agrees (to the extent of such Lender’s Delayed Draw Term Loan Commitment) to make its portion of the Delayed Draw Term Loan to the Borrower in accordance with Section 2.5(b) .
Section 2.2.     Revolving Loans . Subject to the terms and conditions set forth herein, each Lender severally agrees to make Revolving Loans, ratably in proportion to its Pro Rata Share of the Revolving Commitments, to the Borrower, from time to time during the Availability Period, in an aggregate principal amount outstanding at any time that will not result in (a) such Lender’s Revolving Credit Exposure exceeding such Lender’s Revolving Commitment or (b) the aggregate Revolving Credit Exposures of all Lenders exceeding the Aggregate Revolving Commitments. During the Availability Period, the Borrower shall be entitled to borrow, prepay and reborrow Revolving Loans in accordance with the terms and conditions of this Agreement; provided , that the Borrower may not borrow or reborrow if a Default or Event of Default has occurred and is continuing.

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Section 2.3.     Procedure for Revolving Borrowings . The Borrower shall give the Administrative Agent written notice (or telephonic notice promptly confirmed in writing) of each Revolving Borrowing substantially in the form of Exhibit 2.3 (a “Notice of Revolving Borrowing”) (x) prior to 11:00 a.m. on the requested date of each Base Rate Borrowing and (y) prior to 11:00 a.m. three (3) Business Days prior to the requested date of each Eurodollar Borrowing. Each Notice of Revolving Borrowing shall be irrevocable and shall specify: (i) the aggregate principal amount of such Borrowing, (ii) the date of such Borrowing (which shall be a Business Day), (iii) the Type of such Revolving Loan comprising such Borrowing and (iv) in the case of a Eurodollar Borrowing, the duration of the initial Interest Period applicable thereto (subject to the provisions of the definition of Interest Period). Each Revolving Borrowing shall consist of Base Rate Loans or Eurodollar Loans or a combination thereof, as the Borrower may request. The aggregate principal amount of each Eurodollar Borrowing shall be not less than $500,000 or a larger multiple of $100,000, and the aggregate principal amount of each Base Rate Borrowing shall not be less than $100,000 or a larger multiple of $100,000; provided, that Base Rate Loans made pursuant to Section 2.4 or Section 2.22(d) may be made in lesser amounts as provided therein. At no time shall the total number of Eurodollar Borrowings outstanding at any time exceed eight. Promptly following the receipt of a Notice of Revolving Borrowing in accordance herewith, the Administrative Agent shall advise each Lender of the details thereof and the amount of such Lender’s Revolving Loan to be made as part of the requested Revolving Borrowing.
Section 2.4.     Swingline Commitment .
(a)    Subject to the terms and conditions set forth herein, the Swingline Lender may, in its reasonable discretion, make Swingline Loans to the Borrower, from time to time during the Availability Period, in an aggregate principal amount outstanding at any time not to exceed the lesser of (i) the Swingline Commitment then in effect and (ii) the difference between the Aggregate Revolving Commitments and the aggregate Revolving Credit Exposures of all Lenders; provided , that the Swingline Lender shall not be required to make a Swingline Loan to refinance an outstanding Swingline Loan. The Borrower shall be entitled to borrow, repay and reborrow Swingline Loans in accordance with the terms and conditions of this Agreement.
(b)    The Borrower shall give the Administrative Agent written notice (or telephonic notice promptly confirmed in writing) of each Swingline Borrowing substantially in the form of Exhibit 2.4 attached hereto (“ Notice of Swingline Borrowing ”) prior to 11:00 a.m. on the requested date of each Swingline Borrowing. Each Notice of Swingline Borrowing shall be irrevocable and shall specify: (i) the principal amount of such Swingline Loan, (ii) the date of such Swingline Loan (which shall be a Business Day) and (iii) the account of the Borrower to which the proceeds of such Swingline Loan should be credited. The Administrative Agent will promptly advise the Swingline Lender of each Notice of Swingline Borrowing. Each Swingline Loan shall accrue interest at the Base Rate plus the Applicable Margin. The aggregate principal amount of each Swingline Loan shall not be less than $100,000 or a larger multiple of $50,000, or such other minimum amounts agreed to by the Swingline Lender and the Borrower. The Swingline Lender will make the proceeds of each Swingline Loan available to the Borrower in Dollars in immediately available funds at the account specified by the Borrower in the applicable Notice of Swingline Borrowing not later than 1:00 p.m. on the requested date of such Swingline Loan.
(c)    The Swingline Lender, at any time and from time to time in its sole discretion, may, but in no event no less frequently than once each calendar week shall, on behalf of the Borrower (which hereby irrevocably authorizes and directs the Swingline Lender to act on its behalf), give a Notice of Revolving Borrowing to the Administrative Agent requesting the Lenders (including the Swingline Lender) to make Base Rate Loans in an amount equal to the unpaid principal amount

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of any Swingline Loan. Each Lender will make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Swingline Lender in accordance with Section 2.6 , and such proceeds will be used solely for the repayment of such Swingline Loan.
(d)    If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Swingline Lender) shall purchase an undivided participating interest in such Swingline Loan in an amount equal to its Pro Rata Share thereof on the date that such Base Rate Borrowing should have occurred. On the date of such required purchase, each Lender shall promptly transfer, in immediately available funds, the amount of its participating interest to the Administrative Agent for the account of the Swingline Lender.
(e)    Each Lender’s obligation to make a Base Rate Loan pursuant to Section 2.4 ( c ) or to purchase the participating interests pursuant to Section 2.4 ( d ) shall be absolute and unconditional and shall not be affected by any circumstance, including without limitation (i) any setoff, counterclaim, recoupment, defense or other right that such Lender or any other Person may have or claim against the Swingline Lender, the Borrower or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of any Lender’s Revolving Commitment, (iii) the existence (or alleged existence) of any event or condition which has had or could reasonably be expected to have a Material Adverse Effect, (iv) any breach of this Agreement or any other Loan Document by any Loan Party, the Administrative Agent or any Lender or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. If such amount is not in fact made available to the Swingline Lender by any Lender, the Swingline Lender shall be entitled to recover such amount on demand from such Lender, together with accrued interest thereon for each day from the date of demand thereof (i) at the Federal Funds Rate until the second Business Day after such demand and (ii) at the Base Rate at all times thereafter. Until such time as such Lender makes its required payment, the Swingline Lender shall be deemed to continue to have outstanding Swingline Loans in the amount of the unpaid participation for all purposes of the Loan Documents. In addition, such Lender shall be deemed to have assigned any and all payments made of principal and interest on its Loans and any other amounts due to it hereunder, to the Swingline Lender to fund the amount of such Lender’s participation interest in such Swingline Loans that such Lender failed to fund pursuant to this Section 2.4 , until such amount has been purchased in full.
Section 2.5.     Term Loan Commitments .
(a)     Term Loan A . Subject to the terms and conditions set forth herein, each Lender severally agrees to make its portion of a single loan (each, a “ Term Loan A ”) to the Borrower on the Closing Date in a principal amount equal to the Term Loan A Commitment of such Lender. The Term Loan A may be, from time to time, Base Rate Loans or Eurodollar Loans or a combination thereof; provided , that on the Closing Date the Term Loan A shall be a Base Rate Loan. The execution and delivery of this Agreement by the Borrower and the satisfaction of all conditions precedent pursuant to Section 3.1 shall be deemed to constitute the Borrower’s request to borrow the Term Loan A on the Closing Date.
(b)     Delayed Draw Term Loans .
(i)    Subject to the terms and conditions set forth herein, including the conditions set forth in Section 3.2 , each Lender severally agrees to make its portion of a term loan denominated in Dollars (the “ Delayed Draw Term Loan ”), ratably in proportion to its Pro

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Rata Share of the Delayed Draw Term Loan Commitments, to the Borrower, on a date specified by the Borrower during the Delayed Draw Term Loan Availability Period (the “ Delayed Draw Term Loan Funding Date ”), in an aggregate principal amount outstanding at any time that will not result in (a) the outstanding amount of such Lender’s Delayed Draw Term Loan exceeding such Lender’s Delayed Draw Term Commitment or (b) the aggregate outstanding amount of all Lenders’ Delayed Draw Term Loan exceeding the aggregate Delayed Draw Term Loan Commitments. Amounts repaid on the Delayed Draw Term Loan may not be reborrowed.
(ii)    The Borrower shall give the Administrative Agent written notice (or telephonic notice promptly confirmed in writing) of the Delayed Draw Term Loan Borrowing substantially in the form of Exhibit 2.5 (a “ Notice of Delayed Draw Term Loan Borrowing ”) (x) prior to 11:00 a.m. on the requested date of each Base Rate Borrowing and (y) prior to 11:00 a.m. three (3) Business Days prior to the requested date of each Eurodollar Borrowing. The Notice of Delayed Draw Term Loan Borrowing shall be irrevocable, shall specify (i) the aggregate principal amount of such Borrowing, (ii) the date of such Borrowing (which shall be a Business Day), (iii) the Type of such Loan comprising such Borrowing and (iv) in the case of a Eurodollar Borrowing, the duration of the initial Interest Period applicable thereto (subject to the provisions of the definition of Interest Period); provided , however , that such notice may be contingent on the closing of the Project Sapphire Acquisition and may be revoked if the closing of the Project Sapphire Acquisition does not occur or is delayed subject to the payment of all amounts required pursuant to Section 2.19 . The Delayed Draw Term Loan Borrowing shall consist of Base Rate Loans or Eurodollar Loans or a combination thereof, as the Borrower may request. The aggregate principal amount of each Borrowing shall be not less than $1,000,000 or a larger multiple of $500,000. Promptly following the receipt of a Notice of Delayed Draw Term Loan Borrowing in accordance herewith, the Administrative Agent shall advise each Lender of the details thereof and the amount of such Lender’s Delayed Draw Term Loan to be made as part of the requested Delayed Draw Term Loan Borrowing.
Section 2.6.     Funding of Borrowings .
(a)    Each Lender will make available each Loan to be made by it hereunder on the proposed date thereof by wire transfer in immediately available funds by 11:00 a.m. to the Administrative Agent at the Payment Office; provided , that the Swingline Loans will be made as set forth in Section 2.4 . The Administrative Agent will make such Loans available to the Borrower by promptly crediting the amounts that it receives, in like funds by the close of business on such proposed date, to an account maintained by the Borrower with the Administrative Agent or at the Borrower’s option, by effecting a wire transfer of such amounts to an account designated by the Borrower to the Administrative Agent.
(b)    Unless the Administrative Agent shall have been notified by any Lender prior to 5:00 p.m. one (1) Business Day prior to the date of a Borrowing in which such Lender is to participate that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such amount available to the Administrative Agent on such date, and the Administrative Agent, in reliance on such assumption, may make available to the Borrower on such date a corresponding amount. If such corresponding amount is not in fact made available to the Administrative Agent by such Lender on the date of such Borrowing, the Administrative Agent shall be entitled to recover such corresponding amount on demand from such Lender together with interest at the Federal

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Funds Rate until the second Business Day after such demand and thereafter at the Base Rate. If such Lender does not pay such corresponding amount forthwith upon the Administrative Agent’s demand therefor, the Administrative Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Administrative Agent together with interest at the rate specified for such Borrowing. Nothing in this subsection shall be deemed to relieve any Lender from its obligation to fund its Pro Rata Share of any Borrowing hereunder or to prejudice any rights which the Borrower may have against any Lender as a result of any default by such Lender hereunder.
(c)    All Revolving Borrowings shall be made by the Lenders on the basis of their respective Pro Rata Shares. No Lender shall be responsible for any default by any other Lender in its obligations hereunder, and each Lender shall be obligated to make its Loans provided to be made by it hereunder, regardless of the failure of any other Lender to make its Loans hereunder.
Section 2.7.     Interest Elections .
(a)    Each Borrowing initially shall be of the Type specified in the applicable Notice of Borrowing. Thereafter, the Borrower may elect to convert such Borrowing into a different Type or to continue such Borrowing, all as provided in this Section 2.7 . The Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing.
(b)    To make an election pursuant to this Section 2.7 , the Borrower shall give the Administrative Agent prior written notice (or telephonic notice promptly confirmed in writing) of each Borrowing that is to be converted or continued, as the case may be, substantially in the form of Exhibit 2.7 attached hereto (a “ Notice of Conversion/Continuation ”) (x) prior to 11:00 a.m. one (1) Business Day prior to the requested date of a conversion into a Base Rate Borrowing and (y) prior to 11:00 a.m. three (3) Business Days prior to a continuation of or conversion into a Eurodollar Borrowing. Each such Notice of Conversion/Continuation shall be irrevocable and shall specify (i) the Borrowing to which such Notice of Conversion/Continuation applies and if different options are being elected with respect to different portions thereof, the portions thereof that are to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) shall be specified for each resulting Borrowing); (ii) the effective date of the election made pursuant to such Notice of Conversion/Continuation, which shall be a Business Day; (iii) whether the resulting Borrowing is to be a Base Rate Borrowing or a Eurodollar Borrowing; and (iv) if the resulting Borrowing is to be a Eurodollar Borrowing, the Interest Period applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of “Interest Period”. If any such Notice of Conversion/Continuation requests a Eurodollar Borrowing but does not specify an Interest Period, the Borrower shall be deemed to have selected an Interest Period of one month. The principal amount of any resulting Borrowing shall satisfy the minimum borrowing amount for Eurodollar Borrowings and Base Rate Borrowings set forth in Section 2.3 .
(c)    If, on the expiration of any Interest Period in respect of any Eurodollar Borrowing, the Borrower shall have failed to deliver a Notice of Conversion/ Continuation, then, unless such Borrowing is repaid as provided herein, the Borrower shall be deemed to have elected to convert such Borrowing to a Base Rate Borrowing. No Borrowing may be converted into, or continued as, a Eurodollar Borrowing if an Event of Default has occurred and is continuing and the Administrative Agent and the Required Lenders have determined in their sole discretion not to

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permit such conversion or continuation. No conversion of any Eurodollar Loans shall be permitted except on the last day of the Interest Period in respect thereof.
(d)    Upon receipt of any Notice of Conversion/Continuation, the Administrative Agent shall promptly notify each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.
Section 2.8.     Optional Reduction and Termination of Commitments .
(a)    Unless previously terminated, all Revolving Commitments, Swingline Commitments and LC Commitments shall terminate on the Revolving Commitment Termination Date. The Term Loan A Commitments shall terminate on the Closing Date upon the making of the Term Loan A pursuant to Section 2.5 . Unless previously terminated, the Delayed Draw Term Loan Commitments (including any portion of the Delayed Draw Term Loan Commitments not funded on the Delayed Draw Term Loan Funding Date) shall terminate on the Delayed Draw Term Loan Funding Date.
(b)    Upon at least three (3) Business Days’ prior written notice (or telephonic notice promptly confirmed in writing) to the Administrative Agent (which notice shall be irrevocable, except to the extent conditioned on a refinancing of all or any portion of the Aggregate Revolving Commitments), the Borrower may reduce the Aggregate Revolving Commitments or the Delayed Draw Term Loan Commitments in part or terminate the Aggregate Revolving Commitments or Delayed Draw Term Loan Commitments in whole; provided , that (i) any partial reduction shall apply to reduce proportionately and permanently the Revolving Commitment or Delayed Draw Term Loan Commitment, as applicable, of each Lender, (ii) any partial reduction pursuant to this Section 2.8 shall be in an amount of at least $500,000 and any larger multiple of $100,000 and (iii) no such reduction shall be permitted which would reduce the Aggregate Revolving Commitments to an amount less than the aggregate outstanding Revolving Credit Exposure of all Lenders. Any such reduction in the Aggregate Revolving Commitments below the principal amount of the Swingline Commitment and the LC Commitment shall result in a dollar-for-dollar reduction in the Swingline Commitment and the LC Commitment.
(c)    With the written approval of the Administrative Agent, the Borrower may terminate (on a non-ratable basis) the unused amount of the Revolving Commitment of a Defaulting Lender, and in such event the provisions of Section 2.26 will apply to all amounts thereafter paid by the Borrower for the account of any such Defaulting Lender under this Agreement (whether on account of principal, interest, fees, indemnity or other amounts), provided that such termination will not be deemed to be a waiver or release of any claim the Borrower, the Administrative Agent, the Issuing Bank, the Swingline Lender or any Lender may have against such Defaulting Lender.
Section 2.9.     Repayment of Loans .
(a)    The outstanding principal amount of all Revolving Loans and Swingline Loans shall be due and payable (together with accrued and unpaid interest thereon) on the Revolving Commitment Termination Date.
(b)    The Borrower unconditionally promises to pay to the Administrative Agent for the account of each Lender the then unpaid principal amount of the Term Loan A of such Lender in installments payable on the dates set forth below, with each such installment being in the aggregate principal amount for all Lenders set forth opposite such date below (and on such other date(s) and in such other amounts as may be required from time to time pursuant to this Agreement), as such

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amounts shall be reduced from time to time by optional prepayments pursuant to Section 2.11 and mandatory prepayments pursuant to Section 2.12 :

		
Installment Date	Aggregate Principal Amount	
September 30, 2017	$687,500	
December 31, 2017	$687,500	
March 31, 2018	$687,500	
June 30, 2018	$687,500	
September 30, 2018	$687,500	
December 31, 2018	$687,500	
March 31, 2019	$687,500	
June 30, 2019	$1,031,250	
September 30, 2019	$1,031,250	
December 31, 2019	$1,031,250	
March 31, 2020	$1,031,250	
June 30, 2020	$1,031,250	
September 30, 2020	$1,031,250	
December 31, 2020	$1,031,250	
March 31, 2021	$1,031,250	
June 30, 2021	$1,031,250	
September 30, 2021	$1,375,000	
December 31, 2021	$1,375,000	
March 31, 2022	$1,375,000	
Maturity Date	Remaining outstanding principal amount of Term Loan A	
provided , that, to the extent not previously paid, the aggregate unpaid principal balance of the Term Loan A shall be due and payable on the Maturity Date.
(c)    The Borrower unconditionally promises to pay to the Administrative Agent for the account of each Lender the then unpaid principal amount of the Delayed Draw Term Loan of such Lender in installments payable on the dates set forth below, with each such installment being in the aggregate principal amount for all Lenders set forth opposite such date below (and on such other date(s) and in such other amounts as may be required from time to time pursuant to this Agreement), as such amounts shall be reduced from time to time by optional prepayments pursuant to Section 2.11 and mandatory prepayments pursuant to Section 2.12 :

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Installment Date	Aggregate Principal Amount (expressed as a percentage of the aggregate original principal amount of the Delayed Draw Term Loan)	
September 30, 2017	1.25%	
December 31, 2017	1.25%	
March 31, 2018	1.25%	
June 30, 2018	1.25%	
September 30, 2018	1.25%	
December 31, 2018	1.25%	
March 31, 2019	1.25%	
June 30, 2019	1.875%	
September 30, 2019	1.875%	
December 31, 2019	1.875%	
March 31, 2020	1.875%	
June 30, 2020	1.875%	
September 30, 2020	1.875%	
December 31, 2020	1.875%	
March 31, 2021	1.875%	
June 30, 2021	1.875%	
September 30, 2021	2.50%	
December 31, 2021	2.50%	
March 31, 2022	2.50%	
Maturity Date	Remaining outstanding principal amount of Delayed Draw Term Loan	
provided , that, to the extent not previously paid, the aggregate unpaid principal balance of the Delayed Draw Term Loan shall be due and payable on the Maturity Date.
Section 2.10.     Evidence of Indebtedness . (a) Each Lender shall maintain in accordance with its usual practice appropriate records evidencing the Indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender from time to time, including the amounts of principal and interest payable thereon and paid to such Lender from time to time under this Agreement. The Administrative Agent shall maintain appropriate records in which shall be recorded (i) the Revolving Commitment, the Delayed Draw Term Loan Commitment and Term Loan A Commitment of each Lender, (ii) the amount of each Loan made hereunder by each Lender, the Class and Type thereof and, in the case of a Eurodollar Loan, the Interest Period applicable thereto, (iii) the date of each continuation thereof pursuant to Section 2.7 , (iv) the date of each conversion of all or a portion thereof to another Type pursuant to Section 2.7 , (v) the date and amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder in respect of such Loans and (vi) both the date and amount of any sum received by the Administrative Agent hereunder from the Borrower in respect of the Loans and each Lender’s Pro Rata Share thereof. The entries made in such records shall be prima facie evidence of the existence and amounts of the obligations of the Borrower therein recorded; provided , that the failure or delay of any Lender or the Administrative Agent in maintaining or making entries into any such record or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans (both principal and unpaid accrued interest) of such Lender in accordance with the terms of this Agreement.
(a)    This Agreement evidences the obligation of the Borrower to repay the Loans and is being executed as a “noteless” credit agreement. However, at the request of any Lender (including the Swingline Lender) at any time, the Borrower agrees that it will prepare, execute and deliver to such Lender a promissory note payable to the order of such Lender substantially in the form of Exhibit 2.10 (a “ Note ”). Thereafter, the Loans evidenced by such promissory note and interest

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thereon shall at all times (including after assignment permitted hereunder) be represented by one or more promissory notes in such form payable to the order of the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns).
Section 2.11.     Optional Prepayments . The Borrower shall have the right at any time and from time to time to prepay any Borrowing, in whole or in part, without premium or penalty, by giving irrevocable (except to the extent conditioned on a refinancing of all or any portion of the Loans) written notice (or telephonic notice promptly confirmed in writing) to the Administrative Agent no later than (i) in the case of prepayment of any Eurodollar Borrowing, 11:00 a.m. not less than three (3) Business Days prior to any such prepayment, (ii) in the case of any prepayment of any Base Rate Borrowing, 11:00 a.m. not less than one Business Day prior to the date of such prepayment, and (iii) in the case of Swingline Borrowings, 11:00 a.m. on the date of such prepayment. Each such notice shall be irrevocable (except to the extent conditioned on a refinancing of all or any portion of the Loans) and shall specify the proposed date of such prepayment and the principal amount of each Borrowing or portion thereof to be prepaid, which shall be in minimum amounts of $100,000 and integral multiples of $100,000 (or in the aggregate principal amount of the Type of Loans that are prepaid). Upon receipt of any such notice, the Administrative Agent shall promptly notify each affected Lender of the contents thereof and of such Lender’s Pro Rata Share of any such prepayment. If such notice is given, the aggregate amount specified in such notice shall be due and payable on the date designated in such notice, together with accrued interest to such date on the amount so prepaid in accordance with Section 2.13(d ); provided , that if a Eurodollar Borrowing is prepaid on a date other than the last day of an Interest Period applicable thereto, the Borrower shall also pay all amounts required pursuant to Section 2.19 . Each partial prepayment of any Loan (other than a Swingline Loan) shall be in an amount that would be permitted in the case of an advance of a Revolving Borrowing of the same Type pursuant to Section 2.2 or in the case of a Swingline Loan pursuant to Section 2.4 . Each prepayment of a Borrowing shall be applied to the aggregate principal outstanding amount of Revolving Borrowings at the discretion of the Borrower, and in the case of a prepayment of the Term Loan A or Delayed Draw Term Loan, to principal installments in the order determined by the Borrower in its sole discretion.
Section 2.12.     Mandatory Prepayments .
(a)    Subject to the proviso contained in this subsection (a), promptly (and in any event, within three (3) Business Days ) after receipt by the Borrower or any Loan Party of Net Cash Proceeds of any Asset Sale or Recovery Event, the Borrower shall prepay the Obligations in accordance with Section 2.12(e) in an amount equal to such Net Cash Proceeds; provided that the Borrower shall not be required to prepay the Obligations with respect to (i) proceeds from the Asset Sales in the ordinary course of business, (ii) proceeds from other Asset Sales permitted under Section 7.6 (other than Sections 7.6(i) and (j) ) and (iii) proceeds of any sale or disposition by the Borrower or any Loan Party of any of its assets, or proceeds from casualty insurance policies or eminent domain, condemnation or similar proceedings that in the case of this clause (iii) are reinvested in assets then used or usable in the business of the Borrower and the Loan Parties within one hundred eighty (180) days following receipt thereof or in which the Borrower or such Loan Party has entered into a commitment to reinvest such proceeds within two hundred seventy (270) days following receipt thereof and such proceeds are reinvested in assets or used or usable in the business of the Borrower and the Loan Parties within three hundred sixty (360) days following receipt thereof; provided , further , that if such 270‑day period or 360‑day period, as applicable, expires without the Borrower or such Loan Party reinvesting all or any portion of such proceeds, promptly (and in any event within three (3) Business Days) thereof, the Borrower or such Loan Party shall prepay the Obligations in an amount equal the amount not used or all such Net Cash Proceeds. Notwithstanding anything herein to the contrary, any proceeds from any casualty

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insurance policies or eminent domain, condemnation or similar proceedings that are required to be turned over to “Lessor” (as such term is defined in the Existing Master Lease) or otherwise applied pursuant to Article XI of the Existing Master Lease shall not be subject to this Section 2.12 .
(b)    No later than the Business Day following the date of receipt by the Borrower or any Loan Party of Net Cash Proceeds of any issuance of Indebtedness (other than Indebtedness permitted under Section 7.1 ), the Borrower shall prepay the Obligations in accordance with Section 2.12(e) in an amount equal to such Net Cash Proceeds.
(c)    Within one hundred and twenty (120) days after the end of each Fiscal Year commencing with the Fiscal Year ending June 30, 2018, the Borrower shall prepay the Obligations in an aggregate amount equal to (x) 50% of Consolidated Excess Cash Flow for such Fiscal Year if the Consolidated Leverage Ratio is greater than or equal to 2.50:1.0 as of the end of such Fiscal Year, (y) 25% of Consolidated Excess Cash Flow for such Fiscal Year if the Consolidated Leverage Ratio is less than 2.50:1.0 but greater than or equal to 1.50:1.0 as of the end of such Fiscal Year and (z) 0% of Consolidated Excess Cash Flow for such Fiscal Year if the Consolidated Leverage Ratio is less than 1.50:1.0 as of the end of such Fiscal Year, in each case minus the aggregate amount of any voluntary prepayments of the Term Loans during such Fiscal Year.
(d)    [Reserved].
(e)    Any prepayments made by the Borrower pursuant to Sections 2.12(a) , (b) or (c) above shall be applied as follows: first , to Administrative Agent’s fees and reimbursable expenses then due and payable pursuant to any of the Loan Documents; second , to all reimbursable expenses of the Lenders and all fees and reimbursable expenses of the Issuing Bank then due and payable pursuant to any of the Loan Documents, pro rata to the Lenders and the Issuing Bank based on their respective Pro Rata Shares of such fees and expenses; third , to interest and fees then due and payable hereunder, pro rata to the Lenders based on their respective Pro Rata Shares of such interest and fees; fourth , on a pro rata basis to the principal balance of the Term Loan A and Delayed Draw Term Loan, until the same shall have been paid in full, pro rata to the Lenders based on their Pro Rata Shares of such Term Loans, and applied, in the case of a prepayment under Section 2.12(a) , first to the next four scheduled installments of principal (in forward order of maturity) and then pro rata to the remaining principal installments of the Term Loans, and in the case of Sections 2.12(b) and (c) , pro rata to the principal installments of the Term Loans; fifth , to the principal balance of the Swing Line Loans, until the same shall have been paid in full, to the Swingline Lender, sixth , to the principal balance of the Revolving Loans, until the same shall have been paid in full, pro rata to the Lenders based on their respective Revolving Commitments and seventh , to Cash Collateralize the Letters of Credit in an amount in cash equal to the LC Exposure as of such date plus any accrued and unpaid fees thereon. The Revolving Commitments of the Lenders shall not be permanently reduced by the amount of any prepayments made pursuant to clauses fifth through seventh above, unless a Default or an Event of Default has occurred and is continuing and the Required Revolving Lenders so request.
(f)    If at any time the Revolving Credit Exposure of all Lenders exceeds the Aggregate Revolving Commitments, as reduced pursuant to Section 2.8 or otherwise, the Borrower shall immediately repay Swingline Loans and Revolving Loans in an amount equal to such excess, together with all accrued and unpaid interest on such excess amount and any amounts due under Section 2.19 . Each prepayment shall be applied first to the Swingline Loans to the full extent thereof, second to the Base Rate Loans to the full extent thereof, and finally to Eurodollar Loans to the full extent thereof. If after giving effect to prepayment of all Swingline Loans and Revolving Loans, the Revolving Credit Exposure of all Lenders exceeds the Aggregate Revolving

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Commitments, the Borrower shall Cash Collateralize its reimbursement obligations with respect to all Letters of Credit in an amount equal to such excess plus any accrued and unpaid fees thereon.
Section 2.13.     Interest on Loans .
(a)    The Borrower shall pay interest on (i) each Base Rate Loan at the Base Rate plus the Applicable Margin in effect from time to time and (ii) each Eurodollar Loan at the Adjusted LIBO Rate for the applicable Interest Period in effect for such Loan plus the Applicable Margin in effect from time to time.
(b)    The Borrower shall pay interest on each Swingline Loan at the Base Rate plus the Applicable Margin in effect from time to time.
(c)    Notwithstanding clauses (a) and (b) above, if an Event of Default has occurred and is continuing, at the option of the Required Lenders, and after acceleration the Borrower shall pay interest (“ Default Interest ”) with respect to any past due amount of all Eurodollar Loans (consisting of principal and, after passage of the applicable cure period, interest) at the rate per annum equal to 200 basis points above the otherwise applicable interest rate for such past due principal (and interest, as applicable) of such Eurodollar Loans for the then-current Interest Period until the last day of such Interest Period, and thereafter, and with respect to any past due amount of all Base Rate Loans (consisting of principal and, after passage of the applicable cure period, interest) and all other past due amount of the Obligations hereunder (other than Loans), at the rate per annum equal to 200 basis points above the otherwise applicable interest rate for Base Rate Loans.
(d)    Interest on the principal amount of all Loans shall accrue from and including the date such Loans are made to but excluding the date of any repayment thereof. Interest on all outstanding Base Rate Loans and Swingline Loans shall be payable quarterly in arrears on the last day of each March, June, September and December and on the Revolving Commitment Termination Date or the Maturity Date, as the case may be. Interest on all outstanding Eurodollar Loans shall be payable on the last day of each Interest Period applicable thereto, and, in the case of any Eurodollar Loans having an Interest Period in excess of three months, on each day which occurs every three months after the initial date of such Interest Period, and on the Revolving Commitment Termination Date or the Maturity Date, as the case may be. Interest on any Loan which is converted into a Loan of another Type or which is repaid or prepaid shall be payable on the date of such conversion or on the date of any such repayment or prepayment (on the amount repaid or prepaid) thereof. All Default Interest shall be payable on demand.
(e)    The Administrative Agent shall determine each interest rate applicable to the Loans hereunder and shall promptly notify the Borrower and the Lenders of such rate in writing (or by telephone, promptly confirmed in writing). Any such determination shall be conclusive and binding for all purposes, absent manifest error.
Section 2.14.     Fees .
(a)    The Borrower shall pay to the Administrative Agent for its own account fees in the amounts and at the times previously agreed upon in writing by the Borrower and the Administrative Agent.
(b)    The Borrower agrees to pay to the Administrative Agent for the account of each Lender (i) a commitment fee (the “ Commitment Fee ”), which shall accrue at the Applicable Margin with respect to Commitment Fees on the daily amount of the unused Revolving Commitment of such Lender during the Availability Period and (ii) a commitment fee (the “ Delayed Draw Term

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Loan Commitment Fee ”), which shall accrue at the Applicable Margin with respect to Delayed Draw Term Loan Commitment Fees on the daily amount of the unused Delayed Draw Term Loan Commitment of such Lender during the Delayed Draw Term Loan Availability Period. For purposes of computing the Commitment Fee with respect to the Revolving Commitments, the Revolving Commitment of each Lender shall be deemed used to the extent of the outstanding Revolving Loans and LC Exposure, but not Swingline Exposure, of such Lender.
(c)    The Borrower agrees to pay (i) to the Administrative Agent, for the account of each Lender, a letter of credit fee with respect to its participation in each Letter of Credit (the “ Letter of Credit Fee ”), which shall accrue at a rate per annum equal to the Applicable Margin for Eurodollar Loans then in effect on the average daily amount of such Lender’s LC Exposure attributable to such Letter of Credit during the period from and including the date of issuance of such Letter of Credit to but excluding the date on which such Letter of Credit expires or is drawn in full (such Letter of Credit Fee shall continue to accrue on any LC Exposure that remains outstanding after the Revolving Commitment Termination Date) and (ii) to the Issuing Bank for its own account a facing fee, which shall accrue at a rate equal to 0.25% on the average daily amount of the LC Exposure during the Availability Period (or until the date that such Letter of Credit is irrevocably cancelled, whichever is later), as well as the Issuing Bank’s standard fees with respect to issuance, amendment, renewal or extension of any Letter of Credit or processing of drawings thereunder. Notwithstanding the foregoing, if the Required Lenders elect to increase the interest rate on the Loans to the Default Interest pursuant to Section 2.13(c) , the rate per annum used to calculate the letter of credit fee pursuant to clause (i) above shall automatically be increased by 200 basis points.
(d)    The Borrower shall pay on the Closing Date to the Administrative Agent and its affiliates all fees in the Fee Letter that are due and payable on the Closing Date. The Borrower shall pay on the Closing Date to the Lenders all upfront fees previously agreed in writing.
(e)    Accrued fees under paragraphs (b) and (c) above shall be payable quarterly in arrears on the last day of each March, June, September and December, commencing on the first such date to occur after the Closing Date and on the Revolving Commitment Termination Date (and if later, the date the Loans and LC Exposure shall be repaid in their entirety); provided further , that any such fees accruing after the Revolving Commitment Termination Date shall be payable on demand.
(f)    Anything herein to the contrary notwithstanding, during such period as a Lender is a Defaulting Lender, such Defaulting Lender will not be entitled to Commitment Fees or Delayed Draw Term Loan Commitment Fees during such period pursuant to Section 2.14(b) or Letter of Credit Fees accruing during such period pursuant to Section 2.14(c)  (without prejudice to the rights of the Lenders other than Defaulting Lenders in respect of such fees), provided that (a) to the extent that a portion of the LC Exposure of such Defaulting Lender is reallocated to the Non-Defaulting Lenders pursuant to Section 2.26 , such fees that would have accrued for the benefit of such Defaulting Lender will instead accrue for the benefit of and be payable to such Non-Defaulting Lenders, pro rata in accordance with their respective Revolving Commitments and (b) to the extent any portion of such LC Exposure cannot be so reallocated, such fees will instead accrue for the benefit of and be payable to the Issuing Bank. The pro rata payment provisions of Section 2.21 shall automatically be deemed adjusted to reflect the provisions of this subsection (f).
Section 2.15.     Computation of Interest and Fees .
Interest hereunder based on the Administrative Agent’s prime lending rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year) and paid for the actual number of days elapsed (including the first day but excluding the last day). All other interest and all fees shall be computed on

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the basis of a year of 360 days and paid for the actual number of days elapsed (including the first day but excluding the last day). Each determination by the Administrative Agent of an interest rate or fee hereunder shall be made in good faith and, except for manifest error, shall be final, conclusive and binding for all purposes.
Section 2.16.     Inability to Determine Interest Rates . If prior to the commencement of any Interest Period for any Eurodollar Borrowing,
(a)    the Administrative Agent shall have determined (which determination shall be conclusive and binding upon the Borrower absent manifest error) that, by reason of circumstances affecting the relevant interbank market, adequate means do not exist for ascertaining LIBOR for such Interest Period, or
(b)    the Administrative Agent shall have received notice from the Required Lenders that the Adjusted LIBO Rate does not adequately and fairly reflect the cost to such Lenders (or Lender, as the case may be) of making, funding or maintaining their (or its, as the case may be) Eurodollar Loans for such Interest Period,
the Administrative Agent shall give written notice (or telephonic notice, promptly confirmed in writing) to the Borrower and to the Lenders as soon as practicable thereafter. Until the Administrative Agent shall notify the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) the obligations of the Lenders to make Eurodollar Revolving Loans or to continue or convert outstanding Loans as or into Eurodollar Loans shall be suspended and (ii) all such affected Loans shall be converted into Base Rate Loans on the last day of the then current Interest Period applicable thereto unless the Borrower prepays such Loans in accordance with this Agreement. Unless the Borrower notifies the Administrative Agent at least one (1) Business Day before the date of any Eurodollar Borrowing for which a Notice of Revolving Borrowing or Notice of Conversion/Continuation has previously been given that it elects not to borrow, continue or convert to a Eurodollar Borrowing on such date, then such Revolving Borrowing shall be made as, continued as or converted into a Base Rate Borrowing.
Section 2.17.     Illegality . If any Change in Law shall make it unlawful or impossible for any Lender to make, maintain or fund any Eurodollar Loan and such Lender shall so notify the Administrative Agent, the Administrative Agent shall promptly give notice thereof to the Borrower and the other Lenders, whereupon until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such suspension no longer exist, the obligation of such Lender to make Eurodollar Revolving Loans, or to continue or convert outstanding Loans as or into Eurodollar Loans, shall be suspended. In the case of the making of a Eurodollar Borrowing, such Lender’s Revolving Loan shall be made as a Base Rate Loan as part of the same Revolving Borrowing for the same Interest Period and if the affected Eurodollar Loan is then outstanding, such Loan shall be converted to a Base Rate Loan either (i) on the last day of the then current Interest Period applicable to such Eurodollar Loan if such Lender may lawfully continue to maintain such Loan to such date or (ii) immediately if such Lender shall determine that it may not lawfully continue to maintain such Eurodollar Loan to such date. Notwithstanding the foregoing, the affected Lender shall, prior to giving such notice to the Administrative Agent, designate a different Applicable Lending Office if such designation would avoid the need for giving such notice and if such designation would not otherwise be disadvantageous to such Lender in the good faith exercise of its discretion.
Section 2.18.     Increased Costs.
If any Change in Law shall:

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(a)    impose, modify or deem applicable any reserve, special deposit or similar requirement that is not otherwise included in the determination of the Adjusted LIBO Rate hereunder against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate) or the Issuing Bank;
(b)    subject any Recipient to any Taxes (other than (A) Indemnified Taxes and (B) Excluded Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or
(c)    impose on any Lender or on the Issuing Bank or the eurodollar interbank market any other condition affecting this Agreement or any Eurodollar Loans made by such Lender or any Letter of Credit or any participation therein;
and the result of either of the foregoing is to increase the cost to such Lender of making, converting into, continuing or maintaining a Eurodollar Loan or to increase the cost to such Lender or the Issuing Bank of participating in or issuing any Letter of Credit or to reduce the amount received or receivable by such Lender or the Issuing Bank hereunder (whether of principal, interest or any other amount), then the Borrower shall promptly pay, upon written notice from and demand by such Lender on the Borrower (with a copy of such notice and demand to the Administrative Agent), to the Administrative Agent for the account of such Lender, within ten (10) Business Days after the date of such notice and demand, additional amount or amounts sufficient to compensate such Lender or the Issuing Bank, as the case may be, for such additional costs incurred or reduction suffered.
(d)    If any Lender or the Issuing Bank shall have determined that on or after the date of this Agreement any Change in Law regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s or the Issuing Bank’s capital (or on the capital of the Parent Company of such Lender or Issuing Bank) as a consequence of its obligations hereunder or under or in respect of any Letter of Credit to a level below that which such Lender, the Issuing Bank or the Parent Company of such Lender or Issuing Bank could have achieved but for such Change in Law (taking into consideration such Lender’s or the Issuing Bank’s policies or the policies of the Parent Company of such Lender or Issuing Bank with respect to capital adequacy and liquidity) then, from time to time, within five (5) Business Days after receipt by the Borrower of written demand by such Lender (with a copy thereof to the Administrative Agent), the Borrower shall pay to such Lender such additional amounts as will compensate such Lender, the Issuing Bank or the Parent Company of such Lender or the Issuing Bank for any such reduction suffered.
(e)    A certificate of a Lender or the Issuing Bank setting forth the amount or amounts necessary to compensate such Lender, the Issuing Bank or the Parent Company of such Lender or the Issuing Bank, as the case may be, specified in paragraph (a) or (b) of this Section 2.18 shall be delivered to the Borrower (with a copy to the Administrative Agent) and shall be conclusive, absent manifest error. The Borrower shall pay any such Lender or the Issuing Bank, as the case may be, such amount or amounts within five (5) Business Days after receipt thereof.
(f)    Failure or delay on the part of any Lender or the Issuing Bank to demand compensation pursuant to this Section 2.18 shall not constitute a waiver of such Lender’s or the Issuing Bank’s right to demand such compensation; provided that the Borrower shall not be required to compensate any Lender pursuant to this Section for any increased costs incurred or reductions suffered more than nine months prior to the date that such Lender notifies the Borrower of the Change in Law giving rise or such increased costs or reductions and the Lender’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or

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reductions is retroactive, then the nine-month period referred to shall be extended to include the period of retroactive effect thereof).
Section 2.19.     Funding Indemnity . In the event of (a) the payment of any principal of a Eurodollar Loan other than on the last day of the Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion or continuation of a Eurodollar Loan other than on the last day of the Interest Period applicable thereto, or (c) the failure by the Borrower to borrow, prepay, convert or continue any Eurodollar Loan on the date specified in any applicable notice (regardless of whether such notice is withdrawn or revoked), then, in any such event, the Borrower shall compensate each Lender, within ten (10) days after written demand from such Lender, for any loss, cost or expense attributable to such event. In the case of a Eurodollar Loan, such loss, cost or expense shall be deemed to include an amount determined by such Lender to be the excess, if any, of (A) the amount of interest that would have accrued on the principal amount of such Eurodollar Loan if such event had not occurred at the Adjusted LIBO Rate applicable to such Eurodollar Loan for the period from the date of such event to the last day of the then current Interest Period therefor (or in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Eurodollar Loan) over (B) the amount of interest that would accrue on the principal amount of such Eurodollar Loan for the same period if the Adjusted LIBO Rate were set on the date such Eurodollar Loan was prepaid or converted or the date on which the Borrower failed to borrow, convert or continue such Eurodollar Loan. A certificate as to any additional amount payable under this Section 2.19 submitted to the Borrower by any Lender (with a copy to the Administrative Agent) shall be conclusive, absent manifest error.
Section 2.20.     Taxes .
(a)    For purposes of this Section 2.20 , the term “Lender” includes any Issuing Bank and the term “applicable Law” includes FATCA. For purposes of subsection (g) of this Section 2.20 , the term “Lender” also includes any successor Administrative Agent.
(b)    Any and all payments by or on account of any obligation of any Loan Party under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable Law. If any applicable Law (as determined in the good faith discretion of an applicable Withholding Agent) requires the deduction or withholding of any Tax from any such payment by a Withholding Agent, then the applicable Withholding Agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable Law and, if such Tax is an Indemnified Tax, then the sum payable by the applicable Loan Party shall be increased as necessary so that after making such deduction or withholding (including such deductions and withholdings applicable to additional sums payable under this Section 2.20 ) the applicable Recipient shall receive an amount equal to the sum it would have received had no such deduction or withholding been made.
(c)    In addition, the Loan Parties shall timely pay to the relevant Governmental Authority in accordance with applicable Law, or at the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes.
(d)    The Loan Parties shall jointly and severally indemnify each Recipient, within ten (10) Business Days after demand therefor, for the full amount of any Indemnified Taxes(including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 2.20 ) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant

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Governmental Authority. A certificate as to the amount of such payment or liability and the calculation thereof delivered to the Borrower by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.
(e)    Each Lender shall severally indemnify the Administrative Agent, within ten (10) Business Days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that any Loan Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Loan Parties to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 11.4(e) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate setting forth in reasonable detail the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this clause (e).
(f)    As soon as practicable after any payment of Taxes by any Loan Party to a Governmental Authority pursuant to this Section 2.20(e) , such Loan Party shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.
(g)    (i) Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable Law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 2.20(g)(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.
(i)    Without limiting the generality of the foregoing, in the event that the Borrower is a U.S. Person,
(A)    any Lender that is a U.S. Person shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), properly completed and duly

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executed originals of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax;
(B)    any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable:
(1) in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, properly completed and duly executed originals of IRS Form W-8BEN or W-8BEN-E, as applicable, establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, properly completed and duly executed originals of IRS Form W-8BEN or W-8BEN-E, as applicable, establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits”, “other income” or other applicable article of such tax treaty;
(2)    properly completed and duly executed originals of IRS Form W-8ECI,
(3)    in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit 2.20-1 to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “ U.S. Tax Compliance Certificate ”) and (y) executed originals of IRS Form W-8BEN or W-8BEN-E, as applicable; or
(4)    to the extent a Foreign Lender is not the beneficial owner, properly completed and duly executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN or W-8BEN-E, as applicable, a U.S. Tax Compliance Certificate substantially in the form of Exhibit 2.20-2 or Exhibit 2.20-3 , IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership for U.S. federal income tax purposes and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit 2.20-4 on behalf of each such direct and indirect partner;
(C)    any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter

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upon the reasonable request of the Borrower or the Administrative Agent), executed originals of any other form prescribed by applicable Law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable Law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made; and
(D)    if a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.
(h)    If any Recipient determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 2.20 (including by the payment of additional amounts pursuant to this Section 2.20 ), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party incurred in connection with such refund and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (h) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (h), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (h) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This paragraph shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.
Section 2.21.     Payments Generally; Pro Rata Treatment; Sharing of Set-offs .

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(a)    The Borrower shall make each payment required to be made by it hereunder (whether of principal, interest, fees or reimbursement of LC Disbursements, or of amounts payable under Sections 2.18 , 2.19 or 2.20 , or otherwise) prior to 12:00 noon on the date when due, in immediately available funds, free and clear of any defenses, rights of set-off, counterclaim, or withholding or deduction of taxes. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent at the Payment Office, except payments to be made directly to the Issuing Bank or Swingline Lender as expressly provided herein and except that payments pursuant to Sections 2.18 , 2.19 and 2.20 and 11.3 shall be made directly to the Persons entitled thereto. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be made payable for the period of such extension. All payments hereunder shall be made in Dollars.
(b)    If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, unreimbursed LC Disbursements, interest and fees then due hereunder, such funds shall be applied: first , to Administrative Agent’s fees and reimbursable expenses then due and payable pursuant to any of the Loan Documents; second , to all reimbursable expenses of the Lenders and all fees and reimbursable expenses of the Issuing Bank then due and payable pursuant to any of the Loan Documents, pro rata to the Lenders and the Issuing Bank based on their respective pro rata shares of such fees and expenses; third , to interest and fees then due and payable hereunder, pro rata to the Lenders based on their respective pro rata shares of such interest and fees; and fourth , to the payment of principal of the Loans and unreimbursed LC Disbursements then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal and unreimbursed LC Disbursements then due to such parties.
(c)    If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or participations in LC Disbursements or Swingline Loans that would result in such Lender receiving payment of a greater proportion of the aggregate amount of its Revolving Credit Exposure, Term Loans and accrued interest and fees thereon than the proportion received by any other Lender with respect to its Revolving Credit Exposure or Term Loans, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Revolving Credit Exposure and Term Loans of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Revolving Credit Exposure and Term Loans; provided , that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Revolving Credit Exposure and Term Loans to any assignee or participant, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply). The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable Law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of set-off and

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counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.
(d)    Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or the Issuing Bank hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Bank, as the case may be, the amount or amounts due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders or the Issuing Bank, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or Issuing Bank with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.
(e)    Notwithstanding anything herein to the contrary, any amount paid by the Borrower for the account of a Defaulting Lender under this Agreement (whether on account of principal, interest, fees, reimbursement of LC Disbursements, indemnity payments or other amounts) will be retained by the Administrative Agent in a segregated non-interest bearing account until the Revolving Commitment Termination Date at which time the funds in such account will be applied by the Administrative Agent, to the fullest extent permitted by Law, in the following order of priority: first to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent under this Agreement, second to the payment of any amounts owing by such Defaulting Lender to the Issuing Bank and the Swingline Lender under this Agreement, third to the payment of interest due and payable to the Lenders hereunder that are not Defaulting Lenders, ratably among them in accordance with the amounts of such interest then due and payable to them, fourth to the payment of fees then due and payable to the Lenders hereunder that are not Defaulting Lenders, ratably among them in accordance with the amounts of such fees then due and payable to them, fifth to pay principal and unreimbursed LC Disbursements then due and payable to the Lenders hereunder that are not Defaulting Lenders, ratably in accordance with the amounts thereof then due and payable to them, sixth to the ratable payment of other amounts then due and payable to the Lenders hereunder that are not Defaulting Lenders, and seventh to pay amounts owing under this Agreement to such Defaulting Lender or as a court of competent jurisdiction may otherwise direct.
Section 2.22.     Letters of Credit .
(a)    During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to Section 2.22(d ) and 2.22(e) , may, in its sole discretion, issue, at the request of the Borrower, Letters of Credit for the account of the Borrower or any Subsidiary on the terms and conditions hereinafter set forth; provided , that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (or in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the Revolving Commitment Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii) the Borrower may not request any Letter of Credit, if, after giving effect to such issuance (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Revolving Credit Exposure of all Lenders would exceed the Aggregate Revolving Commitments. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a

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participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance with respect to all other Letters of Credit. Each issuance of a Letter of Credit shall be deemed to utilize the Revolving Commitment of each Lender by an amount equal to the amount of such participation.
(b)    To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, extended or renewed, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III , the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided , that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control.
(c)    At least two Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice and if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent on or before 5:00 p.m. the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit (1) directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in Section 2.22(a ) or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices.
(d)    The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided , that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 2:00 p.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Revolving Loans, the Borrower shall be deemed to have timely given a Notice of Revolving Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided , that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.3 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3 ,

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and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.6 . The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement .
(e)    If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including without limitation (i) any setoff, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Revolving Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided , that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it.
(f)    To the extent that any Lender shall fail to pay any amount required to be paid pursuant to paragraphs (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided , that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.13(d) .
(g)    If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this paragraph, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to the LC Exposure as of such date plus any accrued and unpaid fees thereon; provided , that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence and during the continuation of any Event of Default with respect to the Borrower described in clause (h) or (i) of Section 8.1 . Such deposit shall be held by the Administrative Agent as Cash Collateral for the payment and performance of the obligations of the Borrower under this

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Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this paragraph. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and to the extent so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence and continuance of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived.
(h)    Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding.
(i)    The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances:
(i)    any lack of validity or enforceability of any Letter of Credit or this Agreement;
(ii)    the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction;
(iii)    any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect;
(iv)    payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit;
(v)    any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section 2.22 , constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrower’s obligations hereunder; or
(vi)    the existence of a Default or an Event of Default.

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Neither the Administrative Agent, the Issuing Bank, the Lenders nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided , that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable Law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree, that in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.
(j)    Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable Laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.
Section 2.23.     Increase of Commitments; Additional Lenders .
(a)    So long as no Default or Event of Default has occurred and is continuing and the Borrower would be in pro forma compliance with the financial covenants set forth in Article VI after giving effect thereto, from time to time after the earlier of the Delayed Draw Term Loan Funding Date or the expiration date of the Delayed Draw Term Loan Availability Period, Borrower may, upon at least 30 days’ written notice to the Administrative Agent (who shall promptly provide a copy of such notice to each Lender), propose to increase the Aggregate Revolving Commitments or to establish one or more new additional term loans (each, an “ Incremental Term Loan ”) by an amount not to exceed $50,000,000 (the amount of any such increase or the principal amount of any such Incremental Term Loan, the “ Additional Commitment Amount ”) and in a minimum amount of at least $3,000,000 or a larger multiple of $1,000,000. With respect to any increase in the Aggregate Revolving Commitments or any Incremental Term Loans, each Lender shall have the right for a period of 15 days following receipt of such notice, to elect by written notice to the Borrower and the Administrative Agent to increase its Revolving Commitment or provide Incremental Term Loans by a principal amount equal to its Pro Rata Share of the Additional Commitment Amount. With respect to any Incremental Term Loan, (x) the final maturity date shall be no earlier than the latest Maturity Date for any then existing Term Loan, (y) the weighted

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average life to maturity of such Incremental Term Loan shall not be shorter than the weighted average life to maturity of any then existing Term Loan and (z) the Applicable Margin for the Incremental Term Loan shall not be more than 75 basis points (0.75%) more than the Applicable Margin with respect to any then existing Term Loan, unless the Applicable Margin for any then existing Term Loan is increased to the Applicable Margin for the Incremental Term Loan minus 75 basis points (0.75%). No Lender (or any successor thereto) shall have any obligation to increase its Revolving Commitment or its other obligations under this Agreement and the other Loan Documents or provide any Incremental Term Loan Commitment, and any decision by a Lender to increase its Revolving Commitment or provide any Incremental Term Loan Commitment shall be made in its sole discretion independently from any other Lender. If any Lender shall fail to notify the Borrower and the Administrative Agent in writing about whether it will increase its Revolving Commitment or provide any Incremental Term Loan Commitment within fifteen (15) days after receipt of such notice, such Lender shall be deemed to have declined to increase its Revolving Commitment or provide any Incremental Term Loan Commitment.
(b)    If any Lender shall not elect to increase its Revolving Commitment or to provide any Incremental Term Loan Commitment pursuant to subsection (a) of this Section 2.23 , the Borrower may designate another bank or other financial institution (which may be, but need not be, one or more of the existing Lenders) which at the time agrees to, in the case of any such Person that is an existing Lender, increase its Revolving Commitment and/or provide an Incremental Term Loan Commitment, as applicable, and in the case of any other such Person (an “ Additional Lender ”), become a party to this Agreement; provided , however , that any new bank or financial institution must be reasonably acceptable to the Administrative Agent, which acceptance will not be unreasonably withheld or delayed. The sum of the increases in the Revolving Commitments and/or the principal amount of Incremental Term Loans of the existing Lenders pursuant to this subsection (b) plus the Revolving Commitments and/or the principal amount of Incremental Term Loans of the Additional Lenders shall not in the aggregate exceed the unsubscribed amount of the Additional Commitment Amount.
(c)    An increase in the aggregate amount of the Revolving Commitments or the establishment of any Incremental Term Loan pursuant to this Section 2.23 shall become effective upon the receipt by the Administrative Agent of a supplement or joinder in form and substance reasonably satisfactory to the Administrative Agent executed by the Borrower, by each Additional Lender and by each other Lender providing an increased Revolving Commitment or Incremental Term Loan Commitment, setting forth the new Commitments of such Lenders and setting forth the agreement of each Additional Lender to become a party to this Agreement and to be bound by all the terms and provisions hereof and such evidence of appropriate corporate authorization on the part of the Borrower with respect to the increase in the Revolving Commitments and/or Incremental Term Loan and such opinions of counsel for the Borrower with respect thereto as the Administrative Agent may reasonably request, it being understood that such supplement or joinder may provide for customary “certain funds provisions” as agreed to by the Borrower and the Lenders providing an Incremental Term Loan Commitment to the extent the proceeds of such Incremental Term Loan are being used to fund any Permitted Acquisition or permitted Investment.
(d)    Upon the acceptance of any such supplement or joinder by the Administrative Agent, the Commitments shall automatically be increased by the amount of the Commitments added through such supplement or joinder and Schedule I shall automatically be deemed amended to reflect the Commitments of all Lenders after giving effect to the addition of such Commitments.

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(e)    Upon any increase in the aggregate amount of the Revolving Commitments pursuant to this Section 2.23 that is not pro rata among all Lenders, (x) within five (5) Business Days, in the case of any Base Rate Loans then outstanding, and at the end of the then current Interest Period with respect thereto, in the case of any Eurodollar Loans then outstanding, the Borrower shall prepay such Loans in their entirety and, to the extent the Borrower elects to do so and subject to the conditions specified in Article III , the Borrower shall reborrow Loans from the Lenders in proportion to their respective Revolving Commitments after giving effect to such increase, until such time as all outstanding Loans are held by the Lenders in proportion to their respective Commitments after giving effect to such increase and (y) effective upon such increase, the amount of the participations held by each Lender in each Letter of Credit then outstanding shall be adjusted automatically such that, after giving effect to such adjustments, the Lenders shall hold participations in each such Letter of Credit in proportion to their respective Revolving Commitments.
Section 2.24.     Mitigation of Obligations.  If any Lender requests compensation under Section 2.18 , or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.20 , then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the sole judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable under Section 2.18 or Section 2.20 , as the case may be, in the future and (ii) would not subject such Lender to any material unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with such designation or assignment.
Section 2.25.     Replacement of Lenders . If (a) any Lender requests compensation under Section 2.18 , (b) the Borrower is required to pay any additional amount to any Lender or any Governmental Authority of the account of any Lender pursuant to Section 2.20 , (c) any Lender notifies the Borrower and Administrative Agent that it is unable to fund Eurodollar Loans pursuant to Sections 2.16 or 2.17 , (d) a Lender (a “ Non-Consenting Lender ”) does not consent to a proposed change, waiver, discharge or termination with respect to any Loan Document that has been approved by the Required Lenders as provided in Section 11.2(b) but requires unanimous consent of all the Lenders or all the Lenders directly affected thereby (as applicable) or (e) if any Lender is a Defaulting Lender, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions set forth in Section 11.4(b ) all its interests, rights and obligations under this Agreement and the related Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender); provided , that (i) the Borrower shall have received the prior written consent of the Administrative Agent, which consent shall not be unreasonably withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal amount of all Loans owed to it, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (in the case of such outstanding principal and accrued interest) and from the Borrower (in the case of all other amounts), (iii) in the case of a claim for compensation under Section 2.18 or payments required to be made pursuant to Section 2.20 , such assignment will result in a reduction in such compensation or payments, (iv) such assignment does not conflict with applicable Law and (v) in the case of any such assignment resulting from a Non-Consenting Lender’s failure to consent to a proposed change, waiver, discharge or termination with respect to any Loan Document, the applicable assignee consents to the proposed change, waiver, discharge or termination; provided that the failure by such Non-Consenting Lender to execute and deliver an Assignment and Acceptance shall not impair the validity of the removal of such Non-Consenting Lender and the mandatory assignment of such Non-Consenting Lender’s Commitments and outstanding Loans pursuant to this Section 2.25 shall nevertheless be effective without the execution by such Non-Consenting Lender of an

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Assignment and Acceptance. A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.
Section 2.26.     Reallocation and Cash Collateralization of Defaulting Lender Commitment .
(a)    If a Revolving Lender becomes, and during the period it remains, a Defaulting Lender, the following provisions shall apply, notwithstanding anything to the contrary in this Agreement:
(i)    the LC Exposure and Swingline Exposure of such Defaulting Lender will, subject to the limitation in the first proviso below, automatically be reallocated (effective on the day such Revolving Lender becomes a Defaulting Lender) among the Non-Defaulting Lenders pro rata in accordance with their respective Revolving Commitments (calculated as if the Defaulting Lender’s Revolving Commitment was reduced to zero and each Non-Defaulting Lender’s Revolving Commitment had been increased proportionately); provided that (a) the sum of each Non-Defaulting Lender’s total Revolving Credit Exposure may not in any event exceed the Revolving Commitment of such Non-Defaulting Lender as in effect at the time of such reallocation and (b) neither such reallocation nor any payment by a Non-Defaulting Lender pursuant thereto will constitute a waiver or release of any claim the Borrower, the Administrative Agent, the Issuing Bank, the Swingline Lender or any other Lender may have against such Defaulting Lender or cause such Defaulting Lender to be a Non-Defaulting Lender; and
(ii)    to the extent that any portion (the “ unreallocated portion ”) of the LC Exposure and Swingline Exposure of any Defaulting Lender cannot be reallocated pursuant to clause (i) for any reason the Borrower will, not later than two (2) Business Days after demand by the Administrative Agent (at the direction of the Issuing Bank and/or the Swingline Lender), (A) Cash Collateralize the obligations of the Defaulting Lender to the Issuing Bank or Swingline Lender in respect of such LC Exposure or Swingline Exposure, as the case may be, in an amount at least equal to the aggregate amount of the unreallocated portion of the LC Exposure and Swingline Exposure of such Defaulting Lender, (B) in the case of such Swingline Exposure, prepay and/or Cash Collateralize in full the unreallocated portion thereof, or (C) make other arrangements reasonably satisfactory to the Administrative Agent, the Issuing Bank and the Swingline Lender in their sole discretion to protect them against the risk of non-payment by such Defaulting Lender.
(b)    If the Borrower, the Administrative Agent, the Issuing Bank and the Swingline Lender agree in writing in their discretion that any Defaulting Lender has ceased to be a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein, the LC Exposure and the Swingline Exposure of the other Lenders shall be readjusted to reflect the inclusion of such Lender’s Commitment, and such Lender will purchase at par such portion of outstanding Revolving Loans of the other Lenders and/or make such other adjustments as the Administrative Agent may determine to be necessary to cause the Revolving Credit Exposure of the Lenders to be on a pro rata basis in accordance with their respective Revolving Commitments, whereupon such Lender will cease to be a Defaulting Lender and will be a Non-Defaulting Lender (and such Revolving Credit Exposure of each Lender will automatically be adjusted on a prospective basis to reflect the foregoing). If any cash collateral has been posted with respect to the LC Exposure or Swingline Exposure of such Defaulting Lender, the Administrative Agent will promptly return such cash collateral to the Borrower; provided that no adjustments will be made retroactively with respect

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to fees accrued or payments made by or on behalf of the Borrower while such Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Non-Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from such Lender’s having been a Defaulting Lender.

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ARTICLE III
CONDITIONS PRECEDENT TO LOANS AND LETTERS OF CREDIT
Section 3.1.     Conditions To Effectiveness . This Agreement and the obligations of the Lenders (including the Swingline Lender) to make Loans and the obligation of the Issuing Bank to issue any Letter of Credit hereunder shall be effective upon satisfaction or waiver of the following conditions precedent in each case in form and substance reasonably satisfactory to the Administrative Agent and each Lender:
(a)     Loan Documents . Receipt by the Administrative Agent of a counterpart of this Agreement and the other Loan Documents signed by or on behalf of each party hereto or thereto or written evidence reasonably satisfactory to the Administrative Agent (which may include telecopy transmission of such signed signature page) that such party has signed a counterpart of this Agreement and the other Loan Documents to which such party is a party.
(b)     Organizational Documents; Resolutions and Certificates . Receipt by the Administrative Agent of:
(i)    a certificate of the Secretary or Assistant Secretary of each Loan Party, attaching and certifying copies of such Loan Party’s Organizational Documents and resolutions of its board of directors (or equivalent governing body), authorizing the execution, delivery and performance of the Loan Documents to which it is a party and certifying the name, title and true signature of each officer of such Loan Party executing the Loan Documents to which it is a party; and
(ii)    certified copies of the articles or certificate of incorporation, certificate of organization or limited partnership, or other registered organizational documents of each Loan Party, together with certificates of good standing or existence, as may be available from the Secretary of State of the jurisdiction of organization of such Loan Party and California and Tennessee.
(c)     Opinions of Counsel . Favorable written opinions of counsel to the Loan Parties addressed to the Administrative Agent, the Issuing Bank and each of the Lenders, and covering such matters relating to the Loan Parties, the Loan Documents and the transactions contemplated therein in form and substance reasonably satisfactory to the Administrative Agent.
(d)     Officer’s Closing Certificate . A certificate, dated the Closing Date and signed by a Responsible Officer (the “ Closing Certificate ”) certifying on behalf of the Loan Parties that (i) after giving effect to the funding of the Term Loan A on the Closing Date (x) the conditions specified in Sections 3.3(a) , (b) and (c) are satisfied as of the Closing Date and (y) the Consolidated Leverage Ratio does not exceed 2.30 to 1.00 and (ii) the conditions specified in Sections 3.1(f) and (n) have been satisfied.
(e)     Sources and Uses . A duly executed funds disbursement agreement, together with a report setting forth the sources and uses of the proceeds hereof.
(f)     Required Consents and Approvals . The Loan Parties shall have received all consents, approvals, authorizations, registrations and filings and orders required or advisable to be made or obtained under any applicable Law, the Organizational Documents of any Loan Party or by any Contractual Obligation of any Loan Party, in connection with the execution, delivery, performance, validity and enforceability of the Loan Documents or any of the transactions contemplated thereby, and such consents, approvals, authorizations, registrations, filings and orders shall be in full force and effect in all material respects and all applicable waiting periods shall have expired, and no

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investigation or inquiry by any governmental authority regarding the Loan Documents or any other transaction being financed with the proceeds thereof shall be ongoing.
(g)     Solvency . A certificate, dated the Closing Date and signed by the chief financial officer or treasurer of each Loan Party, confirming on behalf of the Loan Parties that each Loan Party is Solvent before and after giving effect to the funding of the Term Loan A and any Revolving Loans on the Closing Date and the consummation of the other transactions contemplated herein.
(h)     Insurance . Certificates of insurance issued on behalf of insurers of the Loan Parties, describing in reasonable detail the types and amounts of insurance (property and liability) maintained by the Loan Parties, naming the Administrative Agent as loss payee on all casualty and property insurance policies of the Borrower and the Loan Parties.
(i)     Collateral Access Agreements . Subject to Section 5.14(b), to the extent not previously received, receipt by the Administrative Agent of Collateral Access Agreements with respect to (i) the Master Lease Agreement and (ii) the lease agreement for that certain property located at 155 Natalie Boulevard, Loudon, Tennessee, 37774; provided that, it is understood and agreed that if such Collateral Access Agreements are not delivered on the Closing Date, the Borrower shall have ninety (90) days after the Closing Date to deliver such agreements.
(j)     Personal Property Collateral .
(i)    Searches of Uniform Commercial Code filings in the jurisdiction of formation of each Loan Party and each other jurisdiction where each Loan Party owns real property;
(ii)    Uniform Commercial Code financing statements for each appropriate jurisdiction as is necessary, in the Administrative Agent’s reasonable discretion, to perfect the Administrative Agent’s security interest in the Collateral;
(iii)    To the extent not previously delivered, all certificates evidencing any certificated Capital Stock pledged to the Administrative Agent pursuant to any pledge agreement, together with duly executed in blank, undated stock powers attached thereto (unless, with respect to the pledged Capital Stock of any Foreign Subsidiary, such stock powers are deemed unnecessary by the Administrative Agent in its reasonable discretion under the Law of the jurisdiction of organization of such Person);
(iv)    Searches of ownership of, and Liens on, United States registered intellectual property owned by each Loan Party in the appropriate governmental offices; and
(v)    Duly executed notices of grant of security interest in the form required by any security agreement as are necessary, in the Administrative Agent’s reasonable discretion, to perfect the Administrative Agent’s security interest in the United States registered intellectual property owned by the Loan Parties (if and to the extent perfection may be achieved in the United States Patent and Trademark Office or the United States Copyright Office by such filings).
(k)     Patriot Act; Anti-Money Laundering Laws . Provide all documentation and other information that the Administrative Agent or such Lender requests in order to comply with its ongoing obligations under applicable “ know your customer ” and anti-money laundering rules and regulations, including the Patriot Act.
(l)     Financial Statements . The Administrative Agent shall have received (i) the Audited Financial Statements, (ii) the Interim Financial Statements, (iii) the audited consolidated balance

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sheet of PubCo and its Subsidiaries for the Fiscal Years ended June 30, 2015 and June 30, 2014, and the related consolidated statements of income or operations, shareholders’ equity and cash flows of the PubCo and its Subsidiaries for such Fiscal Year, including the notes thereto, (iv) internally prepared financial statements for the Fiscal Years ending June 30, 2016, June 30, 2015 and June 30, 2014 for the Parent and its Subsidiaries, containing a consolidated balance sheet of the Parent and its Subsidiaries as of the end of such Fiscal Year and the related consolidated statements of income, stockholders’ equity and cash flows and (v) the consolidated financial statements of the Parent and its Subsidiaries for the fiscal quarter ending March 31, 2017.
(m)     Material Indebtedness . To the extent not previously delivered, copies of all agreements, indentures or notes governing the terms of any Material Indebtedness.
(n)     Project Sapphire Acquisition . The Administrative Agent shall have received copies of the Project Sapphire Purchase Agreement and each other Project Sapphire Acquisition Document, together with all exhibits and schedules thereto, and such agreements shall be in form and substance satisfactory to the Administrative Agent in all respects.
(o)     Fees and Expenses . The Administrative Agent shall have received payment of all fees, expenses and other amounts due and payable on or prior to the Closing Date, including without limitation reimbursement or payment of all reasonable and documented out-of-pocket expenses of the Administrative Agent and the Arrangers (including reasonable and documented fees, charges and disbursements of counsel to the Administrative Agent) required to be reimbursed or paid by the Borrower hereunder, under any other Loan Document and under any agreement with the Administrative Agent or the Arranger.
Without limiting the generality of the provisions of Section 3.1 , for purposes of determining compliance with the conditions specified in this Section 3.1 , each Lender that has signed this Credit Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the Closing Date specifying its objection thereto.
Section 3.2.     Borrowing of Delayed Draw Term Loan.  Notwithstanding anything to the contrary contained herein or in any other Loan Document, the obligation of each Lender to make the Delayed Draw Term Loan on the Delayed Draw Term Loan Funding Date is subject to the satisfaction of the following conditions and no other conditions:
(a)     Joinder Agreement and other items with respect to the Target . Delivery of a reasonably satisfactory Joinder Agreement for the Target, together with copies of the items referenced in Sections 3.1(b) , (c) , (h) , (i) and (j) with respect to the Target, subject, in each case, to the Certain Funds Provision; provided that, in the case of Section 3.1(i) , it is understood and agreed that if such Collateral Access Agreements are not delivered on the Delayed Draw Term Loan Funding Date, the Borrower shall have ninety (90) days after the Delayed Draw Term Loan Funding Date to deliver such agreements.
(b)     Delayed Draw Term Loan Funding Date Certificate . A certificate, dated the Delayed Draw Term Loan Funding Date and signed by a Responsible Officer certifying on behalf of the Loan Parties that (i) after giving effect to the funding of the Delayed Draw Term Loan on the Delayed Draw Term Loan Funding Date (w) no Event of Default shall have occurred and be continuing under Section 9.01(a) , 9.01(b) , 9.01(h) or 9.01(i) , (x) the conditions specified in Sections 3.2(h) and (i) are satisfied as of the Delayed Draw Term Loan Funding Date, (y) the Consolidated Leverage Ratio does not exceed 2.40 to 1.00 (calculated on a Pro Forma Basis after giving effect to the Project Sapphire

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Acquisition based on the financial statements of the Parent and its Subsidiaries and Target for the most recently completed four fiscal quarter period ended at least 45 days prior to the Delayed Draw Term Loan Funding Date (or 120 days if such four fiscal quarter period is the end of the Parent’s fiscal year)) and (z) there has been no event or circumstance since June 28, 2017 which has or could be reasonably expected to have a Material Adverse Effect (as defined in the Project Sapphire Purchase Agreement) that results in a failure of a condition precedent to the Borrower’s obligation to consummate the Project Sapphire Acquisition or that gives the Borrower the right (taking into account any applicable cure provisions) to terminate its obligations under the Project Sapphire Purchase Agreement (ii) the conditions specified in Sections 3.2(c) and (g) have been satisfied and (iii) confirming on behalf of the Loan Parties that each Loan Party is Solvent before and after giving effect to the funding of the Delayed Draw Term Loan and any Revolving Loans on the Delayed Draw Term Loan Funding Date and the consummation of the other transactions contemplated in connection with the Project Sapphire Acquisition.
(c)     Required Consents and Approvals . The Loan Parties (including, for the avoidance of doubt, the Target) shall have received all governmental consents (including Hart-Scott-Rodino clearance and other necessary governmental consents, if applicable), approvals, authorizations, registrations and filings and orders required to be made or obtained under the Project Sapphire Purchase Agreement for the closing of the Project Sapphire Acquisition, and such consents, approvals, authorizations, registrations, filings and orders shall be in full force and effect in all material respects and all applicable waiting periods shall have expired.
(d)     Refinancing of Existing Indebtedness . Receipt by the Administrative Agent of copies of duly executed payoff letters in form and substance reasonably satisfactory to Administrative Agent, executed by each of the Target’s existing lenders or the agent thereof (other than the Indebtedness permitted under Section 7.1 ), which payoff letters shall provide for the payment in full of such existing Indebtedness and the release of all liens (other than the Permitted Liens) thereunder concurrently with the funding of the Delayed Draw Term Loan and the filing of UCC‑3 or other appropriate termination statements, in form and substance reasonably satisfactory to Administrative Agent, and other cancellations and releases to evidence the release of such liens, in form and substance reasonably satisfactory to the Administrative Agent, promptly thereafter; in addition, subject to the Certain Funds Provisions, any other releases, terminations or other documents reasonably required by the Administrative Agent to evidence the payoff of existing Indebtedness of the Target required to be paid pursuant to the Project Sapphire Purchase Agreement (other than Indebtedness permitted under Section 7.1 ).
(e)     Sources and Uses . A duly executed (i) Notice of Delayed Draw Term Loan Borrowing and (ii) funds disbursement agreement, together with a report setting forth the sources and uses of the proceeds of the Delayed Draw Term Loan.
(f)     Financial Statements . The Administrative Agent shall have received (i) the audited consolidated balance sheet of the Target and its Subsidiaries for the fiscal years ended September 30, 2016, September 30, 2015 and September 30, 2014, and the related consolidated statements of income or operations, shareholders’ equity and cash flows of the Target and its Subsidiaries for such fiscal year, including the notes thereto and (ii) the consolidated financial statements of the Target and its Subsidiaries for the fiscal quarter ending March 31, 2017. The Administrative Agent acknowledges receipt of the financial statements described in the foregoing clause (i).
(g)     Project Sapphire Acquisition . The Administrative Agent shall have received evidence that the Project Sapphire Acquisition shall have been or shall concurrently be consummated in accordance with applicable law and substantially in accordance with the Project Sapphire Purchase

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Agreement submitted to the Administrative Agent on the Closing Date, and no provision of the Project Sapphire Purchase Agreement or the other Project Sapphire Acquisition Documents shall have been waived, amended, supplemented or otherwise modified in any manner materially adverse to the interests of the Lenders without the approval of the Administrative Agent.
(h)     Specified Representations . The Administrative Agent shall have received a certificate signed by a Responsible Officer of the Borrower certifying that the Specified Representations are true and correct in all material respects (other than those representations and warranties that are expressly qualified by a Material Adverse Effect or other materiality, in which case such representations and warranties shall be true and correct in all respects, on and as of the Delayed Draw Funding Date, in each case before and after giving effect the funding of the Delayed Draw Term Loan).
(i)     Purchase Agreement Representations . The Administrative Agent shall have received a certificate signed by a Responsible Officer of the Borrower certifying that the Purchase Agreement Representations are true and correct in all material respects (other than those representations and warranties that are expressly qualified by a Material Adverse Effect or other materiality, in which case such representations and warranties shall be true and correct in all respects, on and as of the Delayed Draw Funding Date, in each case before and after giving effect the funding of the Delayed Draw Term Loan) except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date (other than those representations and warranties that are expressly qualified by a Material Adverse Effect or other materiality, in which case such representations and warranties shall be true and correct in all respects, on and as of such earlier date).
The Notice of Delayed Draw Term Loan Borrowing shall be deemed to be a representation and warranty that the representations and warranties of the Borrower contained in Article IV are true and correct in all material respects (other than those representations and warranties that are expressly qualified by a Material Adverse Effect or other materiality, in which case such representations and warranties shall be true and correct in all respects) on and as of the Delayed Draw Funding Date except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date (other than those representations and warranties that are expressly qualified by a Material Adverse Effect or other materiality, in which case such representations and warranties shall be true and correct in all respects, on and as of such earlier date); provided , however , notwithstanding anything in this Agreement, any other Loan Document, any Project Sapphire Acquisition Document or any other letter agreement or other undertaking concerning the transactions contemplated hereby to the contrary, the only representations and warranties related to the Target in the Loan Documents the accuracy of which shall be a condition to the availability of the Delayed Draw Term Loan on the Delayed Draw Term Loan Funding Date shall be (a) such of the representations made by or on behalf of Target and its subsidiaries or their respective businesses in the Project Sapphire Purchase Agreement a breach of which would be materially adverse to the interests of the Lenders, but only to the extent that (x) such failure or breach results in a failure of a condition precedent to the Borrower’s (in its capacity as “Buyer” under the Project Sapphire Purchase Agreement) (or its affiliates) obligations to effect the Project Sapphire Acquisition under the Project Sapphire Purchase Agreement or (y) Borrower (in its capacity as “Buyer” under the Project Sapphire Purchase Agreement) or its applicable affiliate have the right (after giving effect to any notice and cure provisions) to terminate its obligations under the Project Sapphire Purchase Agreement, or otherwise have the right to decline to consummate the Project Sapphire Acquisition, as a result of a breach of such representations in the Project Sapphire Purchase Agreement (the “ Purchase Agreement Representations ”), and (b) the Specified Representations. In addition, the terms of the Loan Documents shall not impair the availability of the Delayed Draw Term Loan on the Delayed Draw Term Loan Funding Date if the conditions expressly set forth in this

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Section 3.2 are satisfied (or waived by the Lenders), it being understood that, with respect to the grant and perfection of a security interest in any Collateral to secure the Obligations, to the extent a security interest in such Collateral (the security interest in respect of which cannot be perfected by means of (1) the filing of a UCC financing statement (with respect to which the Borrower’s sole obligation shall be to deliver, or cause to be delivered, to the Administrative Agent such information as is necessary to complete such UCC financing statements and to authorize the Administrative Agent to file such UCC financing statements upon the initial funding of the Delayed Draw Term Loan) or (2) the delivery or possession of capital stock or other certificated securities (to the extent that such capital stock or other securities are certificated on or prior to the Delayed Draw Term Loan Funding Date and in, or required pursuant to the Project Sapphire Purchase Agreement to be in, the Borrower’s actual possession on the Delayed Draw Term Loan Funding Date (in which case, the Borrower’s sole obligation shall be to deliver, or cause to be delivered, to the Administrative Agent such certificates, together with undated powers thereto executed in blank))) is not able to be perfected on the Delayed Draw Term Loan Funding Date after the Borrower’s use of commercially reasonable efforts to do so, the perfection of such security interest in such Collateral shall not constitute a condition precedent to the availability of the Delayed Draw Term Loan on the Delayed Draw Term Loan Funding Date, but a security interest in such Collateral will be required to be perfected within ninety (90) days after the Delayed Draw Term Loan Funding Date (or such longer time as may be agreed by the Administrative Agent in its reasonable discretion) pursuant to arrangements to be mutually agreed between the Borrower and the Administrative Agent. This paragraph, and the provisions herein, shall be referred to as the “ Certain Funds Provision ”.
Section 3.3.     Each Credit Event .  The obligation of each Lender to make a Loan on the occasion of any Borrowing and of the Issuing Bank to issue, amend, renew or extend any Letter of Credit is subject to the satisfaction of the following conditions:
(a)    at the time of and immediately after giving effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no Default or Event of Default shall have occurred and be continuing;
(b)    at the time of and immediately after giving effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, all representations and warranties of each Loan Party set forth in the Loan Documents shall be true and correct in all material respects (other than those representations and warranties that are expressly qualified by a Material Adverse Effect or other materiality, in which case such representations and warranties shall be true and correct in all respects, on and as of the date of such Borrowing or the date of issuance, amendment, extension or renewal of such Letter of Credit, in each case before and after giving effect thereto) except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date;
(c)    since June 30, 2016, there shall have been no change which has had or could reasonably be expected to have a Material Adverse Effect;
(d)    the Borrower shall have delivered the required Notice of Borrowing;
(e)    if a request is made by the Borrower for the issuance of a Letter of Credit, the Administrative Agent shall have received such other documents, certificates or information as the Administrative Agent or the Required Lenders may reasonably request, all in form and substance reasonably satisfactory to the Administrative Agent or Required Lenders; provided that any such additional documents, certificates or information may be required only if the circumstances reasonably support such request by the Administrative Agent or Required Lenders, as applicable; and

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(f)    if any Revolving Lender is a Defaulting Lender at the time of any request by the Borrower of a Borrowing of a Swingline Loan or the issuance, amendment, renewal or extension of a Letter of Credit, as applicable, set forth in this Section 3.3 , the Issuing Bank will not be required to issue, amend or increase any Letter of Credit and the Swingline Lender will not be required to make any Swingline Loans, unless they are satisfied that 100% of the related LC Exposure and Swingline Exposure is fully covered or eliminated pursuant to Section 2.26 .
Each Borrowing and each issuance, amendment, extension or renewal of any Letter of Credit shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the matters specified in paragraphs (a) and (b) of this Section 3.3 .
Section 3.4.     Delivery of Documents .  All of the Loan Documents, certificates, legal opinions and other documents and papers referred to in this Article III , unless otherwise specified, shall be delivered to the Administrative Agent for the account of each of the Lenders and in sufficient counterparts or copies for each of the Lenders and shall be in form and substance reasonably satisfactory in all respects to the Administrative Agent.
Section 3.5.     Termination of Existing Credit Facility .  Upon this Agreement becoming effective, the Existing Credit Agreement shall automatically terminate (other than those provisions that by their terms survive termination of the Existing Credit Agreement), all commitments of the lenders thereunder to fund additional advances shall terminate automatically, and all amounts outstanding thereunder, together with all accrued and unpaid interest, fees and other amounts shall be automatically paid in full by the initial Borrowing hereunder.

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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Administrative Agent and each Lender as follows:
Section 4.1.     Existence; Power . The Borrower and each of the Loan Parties (i) are duly organized, validly existing and in good standing as a corporation, partnership or limited liability company under the laws of the jurisdiction of its organization, (ii) have all requisite corporate, partnership or limited liability company power and authority to carry on their respective business as now conducted, and (iii) are duly qualified to do business, and is in good standing, in each jurisdiction where such qualification is required, except where a failure to be so qualified could not reasonably be expected to result in a Material Adverse Effect.
Section 4.2.     Organizational Power; Authorization . The execution, delivery and performance by each Loan Party of the Loan Documents to which it is a party are within such Loan Party’s organizational powers and have been duly authorized by all necessary organizational and, if required, shareholder, partner or member action. This Agreement has been duly executed and delivered by the Borrower and constitutes, and each other Loan Document to which any Loan Party is a party, when executed and delivered by such Loan Party, will constitute, valid and binding obligations of the Borrower or such Loan Party (as the case may be), enforceable against it in accordance with their respective terms.
Section 4.3.     Governmental Approvals; No Conflicts . The execution, delivery and performance by each Loan Party of the Loan Documents to which it is a party (a) do not require any consent or approval of, registration or filing with, or any action by, any Governmental Authority, except those as have been obtained or made and are in full force and effect and except for filings necessary to perfect or maintain perfection of the Liens created under the Loan Documents, (b) will not violate any Requirement of Law applicable to the Borrower or any of the Loan Parties or any judgment, order or ruling of any Governmental Authority, (c) will not violate or result in a default under any Contractual Obligation of the Borrower or any of the Loan Parties or any of their respective assets, and (d) will not result in the creation or imposition of any Lien on any asset of the Borrower or any of the Loan Parties, except Liens (if any) created under the Loan Documents.
Section 4.4.     Financial Statements . The Borrower has furnished to the Administrative Agent and each Lender (a) the Audited Financial Statements and (b) the Interim Financial Statements. Such financial statements fairly present in all material respects the consolidated financial condition of the Borrower and the Loan Parties as of such dates and the consolidated results of operations for such periods in conformity with GAAP consistently applied, subject to year‑end audit adjustments and the absence of footnotes in the case of the statements referred to in clause (ii). Since June 30, 2016, there have been no changes with respect to the Borrower and the Loan Parties which have had or could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.
Section 4.5.     Litigation and Environmental Matters .
(a)    No litigation, investigation or proceeding of or before any arbitrators or Governmental Authorities is pending against or, to the knowledge of the Borrower, threatened against or affecting the Borrower or any of the Loan Parties (i) that could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect, or (ii) which in any manner draws into question the validity or enforceability of this Agreement or any other Loan Document.
(b)    Except for the matters set forth on Schedule 4.5 , neither the Borrower nor any of the Loan Parties (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become

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subject to any Environmental Liability, (iii) has received notice of any claim with respect to any Environmental Liability, or (iv) knows of any basis for any Environmental Liability, except, in the case of clauses (i) through (iv) that could not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.
Section 4.6.     Compliance with Laws and Agreements . The Borrower and each of the Loan Parties is in compliance with (a) all Requirements of Law and all judgments, decrees and orders of any Governmental Authority and (b) all indentures, agreements or other instruments binding upon it or its properties, except where non‑compliance, either individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.
Section 4.7.     Investment Company Act, Etc.  Neither the Borrower nor any of the Loan Parties is (a) an “investment company” or is “controlled” by an “investment company”, as such terms are defined in, or subject to regulation under, the Investment Company Act of 1940, as amended and in effect from time to time, or (b) otherwise subject to any other regulatory scheme limiting its ability to incur debt or requiring any approval or consent from, or registration or filing with, any Governmental Authority in connection therewith.
Section 4.8.     Taxes . The Borrower and the Loan Parties and each other Affiliate for whose taxes the Borrower or any of the Loan Parties could reasonably become liable have timely filed or caused to be filed all Federal income tax returns and all other material tax returns that are required to be filed by them, and have paid all federal and other material taxes shown to be due and payable on such returns or on any assessments made against it or its property and all other taxes, fees or other charges imposed on it or any of its property by any Governmental Authority, except where the same are currently being contested in good faith by appropriate proceedings and for which the Borrower or such Loan Party, as the case may be, has set aside on its books adequate reserves in accordance with GAAP. The charges, accruals and reserves on the books of the Borrower and the Loan Parties in respect of such taxes are adequate, and no tax liabilities that could be materially in excess of the amount so provided are anticipated.
Section 4.9.     Margin Regulations . None of the proceeds of any of the Loans or Letters of Credit will be used, directly or indirectly, for “purchasing ‑ or “carrying” any ‑ margin stock” within the respective meanings of each of such terms under Regulation U or for any purpose that violates the provisions of Regulation T, Regulation U or Regulation X. Neither the Borrower nor any of the Loan Parties 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”.
Section 4.10.     ERISA . Except as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (i) each Plan is in compliance in form and operation with its terms and with ERISA and the Code (including, without limitation, the Code provisions compliance with which is necessary for any intended favorable tax treatment) and all other applicable laws and regulations, (ii) each Plan (and each related trust, if any) which is intended to be qualified under Section 401(a) of the Code either has a remaining period of time to apply for or has received a favorable determination letter from the Internal Revenue Service to the effect that it meets the requirements of Sections 401(a) and 501(a) of the Code or is comprised of a master or prototype plan that has received a favorable opinion letter from the Internal Revenue Service, and nothing has occurred since the date of such determination that would adversely affect such determination (or, in the case of a Plan with no determination, nothing has occurred that would adversely affect the issuance of a favorable determination letter or otherwise adversely affect such qualification), (iii) no ERISA Event has occurred or is reasonably expected to occur, (iv) there exists no Unfunded Pension Liability with respect to any Plan, (v) as of the date hereof, none of the Borrower, any of the Loan Parties or any ERISA Affiliate is making or accruing an obligation to make contributions to any Multiemployer Plan, (vi) there are no actions, suits or claims pending against or involving a Plan (other than routine claims for

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benefits) or, to the knowledge of the Borrower or any of the Loan Parties, threatened, which would reasonably be expected to be asserted successfully against any Plan, (vii) the Borrower, each of the Loan Parties and each ERISA Affiliate have made all contributions to or under each Plan and Multiemployer Plan required by law within the applicable time limits prescribed thereby, by the terms of such Plan or Multiemployer Plan, respectively, or by any contract or agreement requiring contributions to a Plan or Multiemployer Plan, (viii) no Plan which is subject to Section 412 of the Code or Section 302 of ERISA has applied for or received an extension of any amortization period within the meaning of Section 412 of the Code or Section 303 of ERISA, (ix) none of the Borrower, any of the Loan Parties or any ERISA Affiliate have ceased operations at a facility so as to become subject to the provisions of Section 4068(a) of ERISA, withdrawn as a substantial employer so as to become subject to the provisions of Section 4063 of ERISA or ceased making contributions to any Plan subject to Section 4064(a) of ERISA to which it made contributions, (x) each Non‑U.S. Plan has been maintained in compliance with its terms and with the requirements of any and all applicable laws, statutes, rules, regulations and orders and has been maintained, where required, in good standing with applicable regulatory authorities, (xi) all contributions required to be made with respect to a Non‑U.S. Plan have been timely made and (xii) the present value of the accrued benefit liabilities (whether or not vested) under each Non‑U.S. Plan that is required to be funded, determined as of the end of the Borrower’s most recently ended fiscal year on the basis of reasonable actuarial assumptions, did not exceed the current value of the assets of such Non‑U.S. Plan allocable to such benefit liabilities.
Section 4.11.     Ownership of Property; Insurance .
(a)    Each of the Borrower and the Loan Parties has good title to, or valid leasehold interests in, all of its real and personal property material to the operation of its business, including all such properties reflected in the most recent audited consolidated balance sheet of the Borrower referred to in Section 4.4 or purported to have been acquired by the Borrower or any of the Loan Parties after said date (except as sold or otherwise disposed of in the ordinary course of business), in each case free and clear of Liens prohibited by this Agreement. All leases that individually or in the aggregate are material to the business or operations of the Borrower and the Loan Parties are valid and subsisting and are in full force.
(b)    Each of the Borrower and the Loan Parties owns, or is licensed or otherwise has the right to use, all of its or such Loan Parties patents, trademarks, service marks, trade names, copyrights and other intellectual property, and the use thereof by the Borrower and the Loan Parties does not infringe on the rights of any other Person, except to the extent that could not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.
(c)    The properties of the Borrower and the Loan Parties are insured with financially sound and reputable insurance companies which are not Affiliates of the 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 the Borrower or any applicable Loan Party operates.
(d)    As of the Closing Date, (i) all Real Estate owned in fee by the Borrower and the Loan Parties and (ii) Real Estate leased by the Borrower and the Loan Parties, in each case, is depicted on Schedule 4.11(d) .
Section 4.12.     Disclosure . The Borrower has disclosed to the Administrative Agent and the Lenders as of the Closing Date all agreements, instruments, and corporate or other restrictions to which the Borrower or any of the Loan Parties is subject, and all other matters known to any of them, that, in any such case, either individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. Neither the Information Memorandum nor any of the reports (including, without limitation, all reports that the

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Borrower is required to file with the Securities and Exchange Commission), financial statements, certificates or other information furnished by or on behalf of the Borrower to the Administrative Agent and the Lenders in connection with the negotiation or syndication of this Agreement or any other Loan Document or delivered hereunder or thereunder (as modified or supplemented by any other information so furnished), taken as a whole, as of the Closing Date contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, taken as a whole, in light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.
Section 4.13.     Labor Relations . There are no strikes, lockouts or other material labor disputes or grievances against the Borrower or any of the Loan Parties, or, to the Borrower’s knowledge, threatened against or affecting the Borrower or any of the Loan Parties, and no significant unfair labor practice charges or grievances are pending against the Borrower or any of the Loan Parties, or, to the Borrower’s knowledge, threatened against any of them before any Governmental Authority, except in any such case, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. All payments due from the Borrower or any of the Loan Parties pursuant to the provisions of any collective bargaining agreement have been paid or accrued as a liability on the books of the Borrower or any of the Loan Parties, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.
Section 4.14.     Subsidiaries . The Closing Certificate sets forth the name of, the ownership interest of the applicable Loan Party in, the jurisdiction of incorporation or organization of, and the type of each Subsidiary of the Borrower and the other Loan Parties and identifies each Subsidiary that is a Subsidiary Loan Party, in each case as of the Closing Date.
Section 4.15.     Solvency . After giving effect to the execution and delivery of the Loan Documents and the making of the Loans under this Agreement, each Loan Party is Solvent.
Section 4.16.     Deposit and Disbursement Accounts . The Closing Certificate lists, as of the Closing Date, all banks and other financial institutions at which any Loan Party maintains deposit accounts, lockbox accounts, disbursement accounts, investment accounts or other similar accounts, and correctly identifies the name, address and telephone number of each financial institution, the name in which the account is held, the type of the account, and the complete account number therefor.
Section 4.17.     Collateral Documents . The Collateral Documents are effective to create in favor of the Administrative Agent, for the benefit of the Lenders, a legal, valid and enforceable security interest in the Collateral (as defined therein), and when UCC financing statements are filed in the appropriate offices, such shall constitute a fully perfected Lien (to the extent that such Lien may be perfected by the filing of a UCC financing statement) on, and security interest in, all right, title and interest of the grantors thereunder in such Collateral, in each case prior and superior in right to any other Person, other than with respect to Liens expressly permitted by Section 7.2 . When the certificates evidencing all Capital Stock pledged pursuant to the applicable Collateral Documents are delivered to the Administrative Agent, for the benefit of the Lenders, together with appropriate stock powers or other similar instruments of transfer duly executed in blank, the Liens in such Capital Stock shall be fully perfected first priority security interests, perfected by “control” as defined in the UCC.
Section 4.18.     Material Agreements . As of the Closing Date, all Material Agreements of the Borrower and the Loan Parties are described on Schedule 4.18 , and each such Material Agreement is in full force and effect in all material respects. As of the Closing Date, the Borrower does not have any knowledge of any pending amendments or threatened termination of any of the Material Agreements. As of the Closing Date, the Borrower has delivered to Administrative Agent a true, complete and correct copy of each Material

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Agreement (including all schedules, exhibits, amendments, supplements, modifications, assignments and all other documents delivered pursuant thereto or in connection therewith).
Section 4.19.     Anti-Corruption Laws and Sanctions . Each Loan Party has implemented and maintains in effect policies and procedures designed to ensure compliance in all material respects by the Parent, the Borrower, their Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions, and the Parent, the Borrower, their Subsidiaries and their respective directors, officers and employees and to the knowledge of the Borrower its agents, are in compliance with Anti-Corruption Laws and applicable Sanctions. None of (a) the Parent, the Borrower, any Subsidiary or any of their respective directors, officers or employees, or (b) to the knowledge of the Borrower, any agent of the Parent, the Borrower or any Subsidiary that will act in any capacity in connection with or benefit from the credit facilities established hereby, is a Sanctioned Person. No Borrowing or Letter of Credit, use of proceeds or other transactions will violate Anti-Corruption Laws or applicable Sanctions.
Section 4.20.     Patriot Act . Each Loan Party is in compliance, in all material respects, with (a) the Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, and (b) the Uniting And Strengthening America By Providing Appropriate Tools Required To Intercept And Obstruct Terrorism (USA Patriot Act of 2001). No part of the proceeds of the Loans will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.
Section 4.21.     Fiscal Year . The Loan Parties have the same Fiscal Year.
Section 4.22.     No EEA Financial Institutions  No Loan Party is an EEA Financial Institution .

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ARTICLE V
AFFIRMATIVE COVENANTS
Each Loan Party covenants and agrees that so long as any Lender has a Commitment hereunder, any Obligation remains unpaid or outstanding (other than contingent indemnification obligations or expense reimbursement obligations to the extent no claim giving rise thereto has been asserted), or any Letter of Credit shall remain outstanding:
Section 5.1.      Financial Statements and Other Information . The Borrower will deliver to the Administrative Agent (and the Administrative Agent will deliver to each Lender:
(a)      within one hundred twenty (120) days after the end of each Fiscal Year of the Loan Parties, (i) internally prepared financial statements for such Fiscal Year for the Parent and its Subsidiaries, containing a consolidated balance sheet of the Parent and its Subsidiaries as of the end of such Fiscal Year and the related consolidated statements of income, stockholders’ equity and cash flows (together with all footnotes thereto) of the Parent and its Subsidiaries for such Fiscal Year, setting forth in each case in comparative form the figures for the previous Fiscal Year, (ii) a copy of the annual audited report for such Fiscal Year for PubCo and its Subsidiaries, containing a consolidated balance sheet of PubCo and its Subsidiaries as of the end of such Fiscal Year and the related consolidated statements of income, stockholders’ equity and cash flows (together with all footnotes thereto) of PubCo and its Subsidiaries for such Fiscal Year, setting forth in each case in comparative form the figures for the previous Fiscal Year, all in reasonable detail and reported on by KPMG LLP or other independent public accountants of nationally recognized standing (without a “going concern” or like qualification, exception or explanation and without any qualification or exception as to the scope of such audit) to the effect that such financial statements present fairly in all material respects the financial condition and the results of operations of PubCo and its Subsidiaries for such Fiscal Year on a consolidated basis in accordance with GAAP and that the examination by such accountants in connection with such consolidated financial statements has been made in accordance with generally accepted auditing standards, and (iii) a reconciliation of the financial statements referred to in clause (i) above to the financial statements referred to in clause (ii) above;
(b)      within forty‑five (45) days after the end of each Fiscal Quarter of the Loan Parties, an unaudited consolidated balance sheet of the Parent and its Subsidiaries as of the end of such Fiscal Quarter and the related unaudited consolidated statements of income and cash flows of the Parent and its Subsidiaries for such Fiscal Quarter and the then elapsed portion of such Fiscal Year, setting forth, in each case, in comparative form the figures for the corresponding Fiscal Quarter of the previous Fiscal Year and the corresponding portion of the previous Fiscal Year;
(c)      concurrently with the delivery of the financial statements referred to in subsections (a) and (b) of this Section, (other than the financial statements for the fourth Fiscal Quarter of each Fiscal Year delivered pursuant to subsection (b) of this Section), a Compliance Certificate signed by the principal executive officer or the principal financial officer of the Borrower (i) certifying as to whether there exists a Default or Event of Default on the date of such certificate and, if a Default or an Event of Default then exists, specifying the details thereof and the action which the Borrower has taken or proposes to take with respect thereto, (ii) setting forth in reasonable detail calculations demonstrating compliance with the financial covenants set forth in Article VI , and (iii) specifying any change in the identity of the Loan Parties as of the end of such Fiscal Year or Fiscal Quarter from the Loan Parties identified to the Administrative Agent and the Lenders on the Closing Date or as of the most recent Fiscal Year or Fiscal Quarter, as the case may be, and (iv) stating whether any change in GAAP or the application thereof has occurred since the date of the mostly recently delivered audited

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consolidated financial statements of the Borrower and the Loan Parties to the extent that such change has an effect on the financial statements accompanying such Compliance Certificate;
(d)      concurrently with the delivery of the financial statements referred to in subsection (a) above, a certificate of the accounting firm that reported on such financial statements stating whether they obtained any knowledge during the course of their examination of such financial statements of any Default or Event of Default under Article VI hereof (which certificate may be limited to the extent required by accounting rules or guidelines);
(e)      within thirty (30) days after the end of each Fiscal Year, forecasts and a pro forma budget for the succeeding Fiscal Year, containing an income statement, balance sheet and statement of cash flow;
(f)      promptly following any request therefor, such other information regarding the results of operations, business affairs and financial condition of the Borrower or any of the Loan Parties as the Administrative Agent and the Lenders, through the Administrative Agent, may reasonably request.
Documents required to be delivered pursuant to Section 5.1(a)(ii) (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date on which such documents are posted on a publicly available website maintained by or on behalf of the SEC for access to documents filed in the EDGAR database (the “ EDGAR Website ”).
Section 5.2.      Notices of Material Events . The Borrower will furnish to the Administrative Agent (and the Administrative Agent will furnish to each Lender) prompt written notice of the following:
(a)      the occurrence of any Default or Event of Default;
(b)      the filing or commencement of, or any material development in, any action, suit or proceeding by or before any arbitrator or Governmental Authority against or, to the knowledge of the Borrower, affecting the Borrower or any of the Loan Parties which could reasonably be expected to result in a Material Adverse Effect;
(c)      the occurrence of any event or any other development by which the Borrower or any of the Loan Parties (i) fails to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) becomes subject to any Environmental Liability, (iii) receives notice of any claim with respect to any Environmental Liability, or (iv) becomes aware of any basis for any Environmental Liability, in each case which, either individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect;
(d)      promptly and in any event within fifteen (15) days after the Borrower or any of the Loan Parties knows or has reason to know that any ERISA Event has occurred that could result in liability to the Borrower or any of the Loan Parties, a certificate of the chief financial officer of the Borrower describing such ERISA Event and the action, if any, proposed to be taken with respect to such ERISA Event and a copy of any notice filed with the PBGC or the IRS pertaining to any ERISA Event and any notices received by the Borrower, such Loan Party or such ERISA Affiliate from the PBGC or any other governmental agency with respect thereto;
(e)      the occurrence of any event of default, or the receipt by the Borrower or any of the Loan Parties of any written notice of an alleged default or event of default, with respect to any Material Indebtedness of the Borrower or any of the Loan Parties;

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(f)      any material amendment or modification to any Material Agreement (together with a copy thereof), and prompt notice of any termination, expiration or loss of any Material Agreement that, in each case, individually or in the aggregate, could reasonably be expected to result in a reduction in revenue or Consolidated EBITDA of ten percent (10%) or more on a consolidated basis from the prior Fiscal Year; and
(g)      any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect.
Section 5.3.      Additional Deliverables . The Borrower will furnish to the Administrative Agent (and the Administrative Agent will furnish to each Lender) the following:
(a)      promptly and in any event at least twenty (20) days prior thereto (or such shorter period of time acceptable to the Administrative Agent), notice of any change (i) in any Loan Party’s legal name, (ii) in any Loan Party’s chief executive office, its principal place of business, any office in which it maintains books or records or any office or facility at which Collateral with a value in excess of $1,000,000 owned by it is located (including the establishment of any such new office or facility), (iii) in any Loan Party’s identity or legal structure, (iv) in any Loan Party’s federal taxpayer identification number or organizational number, or (v) in any Loan Party’s jurisdiction of organization; and
(b)      as soon as available and in any event within thirty (30) days after receipt thereof, a copy of any environmental report or site assessment obtained by or for the Borrower or any of the Loan Parties after the Closing Date on any Real Estate subsequently owned by the Loan Parties.
Each notice or other document delivered under this Section shall be accompanied by a written statement of a Responsible Officer setting forth the details of the event or development requiring such notice or other document and any action taken or proposed to be taken with respect thereto.
Section 5.4.      Existence; Conduct of Business . The Borrower will, and will cause each of the Loan Parties to, do or cause to be done all things necessary to preserve, renew and maintain in full force and effect its legal existence and its respective rights, licenses, permits, privileges, franchises, patents, copyrights, trademarks and trade names material to the conduct of its business; provided that nothing in this Section shall prohibit any merger, consolidation, liquidation or dissolution permitted under Section 7.3 or the sale or other disposition of assets permitted under Section 7.6 .
Section 5.5.      Compliance with Laws, Etc . The Borrower will, and will cause each of the Loan Parties to, comply with all laws, rules, regulations and requirements of any Governmental Authority applicable to its business and properties, including, without limitation, all Environmental Laws, ERISA and OSHA, except where the failure to do so, either individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.
Section 5.6.      Payment of Obligations.  The Borrower will, and will cause each of the Loan Parties to, pay and discharge at or before maturity all of its material obligations and liabilities (including, without limitation, all federal and other material taxes, assessments and other governmental charges, levies and all other claims that could result in a statutory Lien) before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings and (b) the Borrower or such Loan Party has set aside on its books adequate reserves with respect thereto in accordance with GAAP, or (c) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect.

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Section 5.7.      Books and Records . The Borrower will, and will cause each of the Loan Parties to, keep proper books of record and account in which full, true and correct entries shall be made of all dealings and transactions in relation to its business and activities to the extent necessary to prepare the consolidated financial statements of the Borrower in conformity with GAAP in all material respects.
Section 5.8.      Visitation, Inspection, Etc.  The Borrower will, and will cause each of the Loan Parties to, permit any representative of the Administrative Agent or any Lender, upon reasonable request, to visit and inspect its properties, to examine its books and records and to make copies and take extracts therefrom, and to discuss its affairs, finances and accounts with any of its officers and with its independent certified public accountants, during normal business hours and as often as Administrative Agent or such Lender may reasonably request after reasonable prior notice to the Borrower; provided that if an Event of Default has occurred and is continuing, no prior notice shall be required; provided , further , if no Event of Default has occurred and is continuing, the Borrower shall only be responsible for reimbursing costs and expenses incurred pursuant to this Section 5.8 no more than (1) time per Fiscal Year.
Section 5.9.      Maintenance of Properties; Insurance . The Borrower will, and will cause each the Loan Parties to, (a) keep and maintain all property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted, (b) maintain with financially sound and reputable insurance companies which are not Affiliates of the Borrower (i) insurance with respect to its properties and business, and the properties and business of the Loan Parties, against loss or damage of the kinds customarily insured against by companies in the same or similar businesses operating in the same or similar locations and (ii) all insurance required to be maintained pursuant to the Collateral Documents, and will, upon request of the Administrative Agent at reasonable intervals provide a certificate of a Responsible Officer setting forth the nature and extent of all insurance maintained by the Borrower and the Loan Parties in accordance with this Section, (c) at all times shall name the Administrative Agent as additional insured on all liability policies of the Borrower and the Loan Parties and as loss payee (pursuant to a loss payee endorsement reasonably approved by the Administrative Agent) on all casualty and property insurance policies of the Borrower and the Loan Parties and (d) cause all Mortgaged Property that constitutes Flood Hazard Property to be covered by flood insurance provided under the National Flood Insurance Program (or with private insurance endorsed to cause such private insurance to be fully compliant with the federal law as regards private placement insurance applicable to the National Flood Insurance Program, with commercially reputable insurance companies not Affiliates of the Borrower and reasonably acceptable to the Administrative Agent), in such amounts and with such deductibles as the Administrative Agent may reasonably request (and without limiting the foregoing, in compliance with applicable Flood Insurance Laws).
Section 5.10.      Use of Proceeds and Letters of Credit . The Borrower will use the proceeds of the Term Loan A to cause all indebtedness owed under the Existing Credit Agreement to be repaid in full and to cause all existing Liens (other than Permitted Liens) to be released. The Borrower will use the proceeds of the Delayed Draw Term Loan to finance the Project Sapphire Acquisition and to pay fees and expenses in connection therewith. The Borrower will use the proceeds of the Revolving Loans to finance Capital Expenditures, Permitted Acquisitions, working capital needs, and for other general corporate purposes of the Borrower and the Loan Parties. No part of the proceeds of any Loan will be used, whether directly or indirectly, for any purpose that would violate any rule or regulation of the Board of Governors of the Federal Reserve System, including Regulation T, Regulation U or Regulation X. All Letters of Credit will be used for general corporate purposes.
No portion of the proceeds of any Borrowing or Letter of Credit will be used, directly or, to the knowledge of a Responsible Officer of the Borrower, indirectly, (i) for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or any other Person acting in an official capacity in violation of Anti-Corruption Laws in any material respect, or (ii)(A)

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for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, or (B) in any other manner that would result in the violation of any Sanctions applicable to any party hereto.
Section 5.11.      Casualty and Condemnation . The Borrower (a) will furnish to the Administrative Agent prompt written notice of any casualty or other insured damage to any material portion of any Collateral or the commencement of any action or preceding for the taking of any material portion of any Collateral under power of eminent domain or by condemnation or similar proceeding and (b) will ensure that the net cash proceeds of any such event (whether in the form of insurance proceeds, condemnation awards or otherwise) are collected and applied in accordance with the applicable provisions of this Agreement and the Collateral Documents.
Section 5.12.      Cash Management . The Borrower shall, and shall cause the Loan Parties to:
(a)      except for Excluded Accounts, maintain all cash management and treasury business with the Administrative Agent, including, without limitation, all deposit accounts, disbursement accounts, investment accounts and lockbox accounts (each such deposit account, disbursement account, investment account and lockbox account, a “ Depository Account ”); each Depository Account shall be a cash collateral account, with all cash, checks and other similar items of payment in such account securing payment of the Obligations, and, except for the Excluded Accounts, in which the Borrower and any Loan Party shall have granted a first priority Lien to the Administrative Agent, for the benefit of the holders of the Obligations, subject to Liens permitted under Section 7.2 hereof, perfected either automatically or under the UCC;
(b)      deposit promptly, and in any event no later than ten (10) Business Days after the date of receipt thereof, all cash, checks, drafts or other similar items of payment relating to or constituting payments made in respect of any and all accounts and other Collateral into a Depository Account; and
(c)      at any time after the occurrence and during the continuance of an Event of Default, at the request of the Administrative Agent, the Borrower will, and will cause each other Loan Party to, cause all payments constituting proceeds of accounts or other Collateral to be directed into lockbox accounts under agreements in form and substance reasonably satisfactory to the Administrative Agent.
Section 5.13.      Additional Subsidiaries and Collateral .
(a)      In the event that, subsequent to the Closing Date, any Person becomes a Domestic Subsidiary, whether pursuant to formation, acquisition or otherwise, (i) the Borrower shall promptly notify the Administrative Agent thereof and (ii) within thirty (30) days after such Person becomes a Domestic Subsidiary, the Borrower shall cause such Domestic Subsidiary to become a new Guarantor and to grant Liens in favor of the Administrative Agent in all of its personal property by executing and delivering to the Administrative Agent a Joinder Agreement substantially in the form of Exhibit 5.13 or otherwise in form and substance reasonably satisfactory to the Administrative Agent, and authorizing and delivering, at the request of the Administrative Agent, such UCC financing statements or similar instruments required by the Administrative Agent to perfect the Liens in favor of the Administrative Agent, for the benefit of the holders of the Obligations, and granted under any of the Loan Documents, provided that no Domestic Subsidiary that is a CFC Holdco shall be required to become a Guarantor hereunder or grant Liens or otherwise pledge any of its assets as Collateral hereunder or under any other Loan Document.
(b)      to grant Liens in favor of the Administrative Agent, for the benefit of the holders of the Obligations, in all fee ownership interests in Real Estate with a value in excess of $7,500,000 per

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individual property by executing and delivering to the Administrative Agent such Real Estate Documents as the Administrative Agent shall reasonably require, and (iii) to deliver all such other documentation (including, without limitation, certified organizational documents, resolutions, lien searches, title insurance policies, surveys, environmental reports and legal opinions) and to take all such other actions as such Subsidiary would have been required to deliver and take pursuant to Section 3.1 if such Subsidiary had been a Loan Party on the Closing Date or that such Subsidiary would be required to deliver pursuant to Section 5.13 with respect to any Real Estate with a value in excess of $7,500,000 per individual property. In addition, within thirty (30) days after the date any Person becomes a Domestic Subsidiary, the Borrower shall, or shall cause the applicable Loan Party to (i) pledge all of the Capital Stock of such Domestic Subsidiary to the Administrative Agent, for the benefit of the holders of the Obligations, as security for the Obligations by executing and delivering such documentation as reasonably required by Administrative Agent in form and substance reasonably satisfactory to the Administrative Agent, provided that the pledge of the Capital Stock of a Domestic Subsidiary that is a CFC Holdco shall be limited to 65% of the issued and outstanding voting Capital Stock and 100% of the issued and outstanding non-voting Capital Stock of such Domestic Subsidiary, and (ii) to the extent certificated, deliver the original certificates evidencing such pledged Capital Stock to the Administrative Agent, for the benefit of the holders of the Obligations, together with appropriate powers executed in blank.
(c)      In the event that, subsequent to the Closing Date, any Person becomes a Foreign Subsidiary, whether pursuant to formation, acquisition or otherwise, (x) the Borrower shall promptly notify the Administrative Agent thereof, and (y) to the extent such Foreign Subsidiary is owned directly by any Loan Party, within sixty (60) days after such Person becomes a Foreign Subsidiary or, if the Administrative Agent determines in its sole discretion that the Borrower is working in good faith, such longer period as the Administrative Agent shall permit, the Borrower shall, or shall cause the applicable Loan Party to (i) pledge all of the Capital Stock of such Foreign Subsidiary (provided that, the pledge of the voting Capital Stock of any such Foreign Subsidiary that is a CFC shall be limited to 65% of the issued and outstanding voting Capital Stock of such Foreign Subsidiary) to the Administrative Agent, for the benefit of the holders of the Obligations, as security for the Obligations pursuant to a pledge agreement in form and substance reasonably satisfactory to the Administrative Agent, (ii) to the extent certificated, deliver the original certificates evidencing such pledged Capital Stock to the Administrative Agent, together with appropriate powers executed in blank and (iii) deliver all such other documentation (including, without limitation, certified organizational documents, resolutions, lien searches and legal opinions) and to take all such other actions as the Administrative Agent may reasonably request.
(d)      No Foreign Subsidiary shall be required to become a Guarantor or grant any Lien or otherwise pledge any of its assets as Collateral pursuant to Section 5.13(a) or under any other Loan Document.
(e)      The Borrower agrees that, following the delivery of any Collateral Documents required to be executed and delivered by this Section, the Administrative Agent shall have a valid and enforceable, first priority perfected Lien on the property required to be pledged pursuant to subsections (a) and (b) of this Section (to the extent that such Lien can be perfected by execution, delivery and/or recording of the Collateral Documents or UCC financing statements, or possession of such Collateral), free and clear of all Liens other than Liens expressly permitted by Section 7.2 . All actions to be taken pursuant to this Section shall be at the expense of the Borrower or the applicable Loan Party, and shall be taken to the reasonable satisfaction of the Administrative Agent.
Section 5.14.      Additional Real Estate; Leased Locations .

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(a)      To the extent otherwise permitted hereunder, if any Loan Party proposes to acquire a fee ownership interest in Real Estate after the Closing with a value in excess of $7,500,000 per individual property, it shall at the time of such acquisition provide to the Administrative Agent all Real Estate Documents reasonably requested by the Administrative Agent granting the Administrative Agent, for the benefit of the holders of the Obligations, a first priority Lien on such Real Estate (subject to Permitted Encumbrances), together with all Real Estate Documents and other documents, instruments and agreements reasonably requested by the Administrative Agent, in each case in form and substance reasonably satisfactory to the Administrative Agent.
(b)      To the extent otherwise permitted hereunder, if any Loan Party proposes to lease any Real Estate and maintain Collateral thereon in excess of $5,000,000 per individual property, it shall provide to the Administrative Agent a copy of such lease and a Collateral Access Agreement from the landlord of such leased property or the bailee with respect to any warehouse or other location where such books, records or Collateral will be stored or located, which agreement or letter shall be reasonably satisfactory in form and substance to the Administrative Agent; provided that if such Loan Party is unable to deliver any such Collateral Access Agreement after using its commercially reasonable efforts to do so, the Administrative Agent may waive the foregoing requirement in its reasonable discretion.
Section 5.15.      Further Assurances . The Borrower will, and will cause each other Loan Party to, execute any and all further documents, financing statements, agreements and instruments, and take all such further actions (including the filing and recording of financing statements, fixture filings, Mortgages and other documents), which may be required under any applicable law, or which the Administrative Agent may reasonably request, to effectuate the transactions contemplated by the Loan Documents or to grant, preserve, protect or perfect the Liens created by the Collateral Documents or the validity or priority of any such Lien, all at the expense of the Loan Parties. The Borrower also agrees to provide to the Administrative Agent, from time to time upon request, evidence reasonably satisfactory to the Administrative Agent as to the perfection and priority of the Liens created or intended to be created by the Collateral Documents.
Section 5.16.      [Reserved] .
Section 5.17.      Post-Closing Obligations. Within 45 days of the Closing Date, or such later date as agreed by the Administrative Agent in its reasonable discretion, the Administrative Agent shall have received an endorsement naming the Administrative Agent as loss payee on all casualty and property insurance policies of the Borrower and the Loan Parties.

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ARTICLE VI
FINANCIAL COVENANTS
Each Loan Party covenants and agrees that so long as any Lender has a Commitment hereunder, any Obligation remains unpaid or outstanding (other than contingent indemnification obligations or expense reimbursement obligations to the extent no claim giving rise thereto has been asserted), or any Letter of Credit shall remain outstanding:
Section 6.1.     Consolidated Fixed Charge Coverage Ratio . The Parent and its Subsidiaries on a consolidated basis will maintain, as of the end of each Fiscal Quarter, commencing with the Fiscal Quarter ending on September 30, 2017, a Consolidated Fixed Charge Coverage Ratio of not less than 1.25:1.00.
Section 6.2.     Consolidated Leverage Ratio . The Parent and its Subsidiaries on a consolidated basis will maintain, as of the end of each Fiscal Quarter, commencing with the Fiscal Quarter ending on September 30, 2017, a Consolidated Leverage Ratio of not greater than:

		
Fiscal Quarter	Consolidated Leverage Ratio	
Each Fiscal Quarter ending
prior to September 30, 2018	3.25:1.0	
Fiscal Quarter ending September 30, 2018 and each Fiscal Quarter ending prior to September 30, 2019	3.00:1.0	
Fiscal Quarter ending September 30, 2019 and each Fiscal Quarter ending prior to September 30, 2020	2.75:1.00	
Fiscal Quarter ending September 30, 2020 and each Fiscal Quarter ending thereafter	2.50:1.00	
; provided that, the maximum Consolidated Leverage Ratio permitted to be maintained pursuant to this Section 6.2 shall increase by 0.25 for the Fiscal Quarter in which a Qualified Acquisition has occurred, and for the three subsequent Fiscal Quarters; provided further, that, in no event shall the maximum Consolidated Leverage Ratio permitted under this Section 6.2 exceed 3.25:1.00 as the result of any such “step-up” provided for herein.

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ARTICLE VII
NEGATIVE COVENANTS
Each Loan Party covenants and agrees that so long as any Lender has a Commitment hereunder, any Obligation remains unpaid or outstanding (other than contingent indemnification obligations or expense reimbursement obligations to the extent no claim giving rise thereto has been asserted), or any Letter of Credit shall remain outstanding:
Section 7.1.     Indebtedness . The Borrower will not, and will not permit any of the Loan Parties to, create, incur, assume or suffer to exist any Indebtedness, except:
(a)    Indebtedness created pursuant to the Loan Documents;
(b)    Indebtedness of the Borrower and the Loan Parties existing on the date hereof and set forth on Schedule 7.1 and extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof (immediately prior to giving effect to such extension, renewal or replacement) or shorten the maturity or the weighted average life thereof;
(c)    Indebtedness of the Borrower owing to any Loan Party and of any Loan Party owing to the Borrower or any other Loan Party;
(d)    Guarantees by the Borrower of Indebtedness of any Loan Party and by any Loan Party of Indebtedness of the Borrower or any other Loan Party;
(e)    Permitted Subordinated Debt;
(f)    Hedging Obligations permitted by Section 7.10 ;
(g)    Purchase money indebtedness or Capital Lease Obligations of the Borrower and the Loan Parties (including any Person that becomes a Loan Party after the date of this Agreement) in an aggregate principal amount not to exceed $4,000,000 of new Indebtedness in any one Fiscal Year, and not to exceed $12,500,000 in an aggregate principal amount at any time outstanding;
(h)    Earn‑outs, indemnification obligations, purchase price adjustments, non‑compete obligations and similar adjustments in respect of Permitted Acquisitions or other asset sales permitted hereunder;
(i)    Indebtedness of the Loan Parties with respect to surety, appeal, indemnity, performance or other similar bonds in the ordinary course of business (including surety or similar bonds issued in connection with the stay of a proceeding of the type described in Section 8.1 (1)) ;
(j)    Indebtedness owed to any Person (including obligations in respect of letters of credit for the benefit of such Person) providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance, pursuant to reimbursement or indemnification obligations to such Person, in each case incurred in the ordinary course of business;
(k)    Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is promptly extinguished;
(l)    Indebtedness arising in connection with endorsement of instruments or other payment items for deposit in the ordinary course of business;

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(m)    unsecured Indebtedness incurred in respect of netting services, overdraft protection, and other like services, in each case, incurred in the ordinary course of business; provided that such Indebtedness does not remain outstanding for more than five (5) consecutive Business Days;
(n)    Indebtedness owed to any Person providing property, casualty, liability or other insurance to Parent or any of its Subsidiaries, so long as the amount of such Indebtedness is not in excess of the amount of the unpaid cost of, and shall be incurred only to defer the cost of, such insurance for the period in which such Indebtedness is incurred and such Indebtedness is outstanding only during the period covered by the insurance (not to exceed one year of premiums for any single insurance policy);
(o)    Indebtedness of a Subsidiary acquired after the Closing Date or an entity merged into or consolidated or amalgamated with the Borrower or any Subsidiary after the Closing Date and Indebtedness assumed in connection with the acquisition of assets, which Indebtedness in each case exists at the time of such acquisition, merger or consolidation or amalgamation and is not created in contemplation of such event and where such acquisition, merger, consolidation or amalgamation is permitted by this Agreement; provided the aggregate principal amount of Indebtedness incurred pursuant to this clause (o) does not exceed $5,000,000 at any time outstanding;
(p)    Indebtedness permitted under Section 7.4 ;
(q)    Indebtedness incurred by the Parent or any of its Subsidiaries in respect of bank guarantees, warehouse receipts, letters of credit, or similar instruments issued or created in the ordinary course of business;
(r)    Indebtedness of the Borrower and the Loan Parties owed to General Motors LLC or one or more of its Affiliates pursuant to the transactions contemplated by that certain Supply Agreement, dated as of November 14, 2016 between Malibu Boats, LLC and General Motors LLC, as amended, restated, supplemented or otherwise modified from time to time, not to exceed $3,000,000 in an aggregate principal amount at any time outstanding;
(s)    Bank Product Obligations; and
(t)    other Indebtedness in an aggregate principal amount not to exceed $7,500,000 at any time outstanding.
Section 7.2.     Liens . The Borrower will not, and will not permit any of the Loan Parties to, create, incur, assume or suffer to exist any Lien on any of its assets or property now owned or hereafter acquired, except any of the foregoing (each a “ Permitted Encumbrance ”):
(a)    Liens securing the Obligations;
(b)    Liens listed in Schedule 7.2 and existing on the date of this Agreement and any replacement Liens (covering the same or a lesser scope of Collateral) in respect of replacement Indebtedness permitted under Section 7.1 ;
(c)    purchase money Liens and Liens in respect of Capital Lease Obligations or on acquired Indebtedness permitted by Section 7.1(g) ;
(d)    Liens for taxes, assessments or other governmental charges or levies not yet due or which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves are being maintained in accordance with GAAP;

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(e)    statutory Liens of landlords, carriers, warehousemen, mechanics, materialmen and other Liens imposed by law in the ordinary course of business for amounts not more than sixty (60) days past due or which are being contested in good faith by appropriate proceedings and provided that, if delinquent for more than sixty (60) days, adequate reserves have been set aside with respect thereto in accordance with GAAP;
(f)    pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations or letters of credit or guaranties issued in respect thereof;
(g)    Liens granted in the ordinary course of business on the unearned portion of insurance premiums securing the financing of insurance premiums;
(h)    deposits or pledges to secure the performance of bids, tenders, trade contracts, governmental contracts, leases, statutory obligations, surety, stay, customs and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;
(i)    judgment and attachment liens not giving rise to an Event of Default or Liens created by or existing from any litigation or legal proceeding that are currently being contested in good faith by appropriate proceedings and with respect to which adequate reserves are being maintained in accordance with GAAP;
(j)    customary rights of set‑off, revocation, refund or chargeback under deposit agreements or under the Uniform Commercial Code or common law of banks or other financial institutions where the Borrower or any of the Loan Parties maintains deposits in the ordinary course of business and Liens of a collection bank arising under Section 4-210 of the UCC on items in the course of collection (or comparable foreign liens);;
(k)    leases, subleases or licenses granted to others or to the Borrower or any other Loan Party (in the ordinary course of business consistent with past practices) and associated negative pledges not interfering in any material respect with the ordinary conduct of the business or operations of any Loan Party;
(l)    Liens representing any interest or title of a licensor, lessor or sublicensor or sublessor under any lease or license permitted by this Agreement;
(m)    easements, zoning restrictions, rights‑of‑way, restrictions and similar encumbrances imposed by law or arising in the ordinary course of business that do not materially detract from the value of the affected property or materially interfere with the ordinary conduct of business of the Borrower and the Loan Parties taken as a whole; and
(n)    Liens on the Real Estate subject to any of the Real Estate Documents identified in any applicable ALTA title policy received by the Administrative Agent (in form and substance reasonably satisfactory to the Administrative Agent) relating to such Real Estate;
(o)    Liens arising out of conditional sale, title retention, consignment or similar arrangements for sale of goods entered into by the Borrower or any Loan Party in the ordinary course of business, including Liens arising out of a Foreign Customer Finance Program Transaction on the receivables, inventory and other assets or interests subject thereby;
(p)    Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;

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(q)    Liens that are contractual rights of set‑off relating to purchase orders and other agreements entered into with customers of the Borrower and its Subsidiaries in the ordinary course of business;
(r)    Liens arising from precautionary Uniform Commercial Code financing statements;
(s)    Liens on any property or asset of the Borrower or any Subsidiary securing Indebtedness permitted by Section 7.1(o) ;
(t)    Liens securing the Indebtedness permitted by Section 7.1(r) ;
(u)    other Liens not specifically listed above in a principal amount not to exceed $5,000,000 in the aggregate at any time outstanding; and
(v)    extensions, renewals, or replacements of any Lien referred to in subsections (a) through (s) of this Section; provided that the principal amount of the Indebtedness secured thereby is not increased (other than by any amount of any outstanding or capitalized interest and reasonable fees and expenses incurred in connection therewith) and that any such extension, renewal or replacement is limited to the assets permitted to be encumbered thereby.
Section 7.3.    Fundamental Changes .
(a)    Excluding Permitted Acquisitions, the Borrower will not, and will not permit any of the Loan Parties to, make any Acquisitions, merge into or consolidate into any other Person, or permit any other Person to merge into or consolidate with it, or sell, lease, transfer or otherwise dispose of (in a single transaction or a series of transactions) all or substantially all of its assets (in each case, whether now owned or hereafter acquired) or all or substantially all of the stock of any of the Loan Parties (in each case, whether now owned or hereafter acquired) or liquidate or dissolve; provided that if, at the time thereof and immediately after giving effect thereto, no Default or Event of Default shall have occurred and be continuing, (i) the Borrower or any Loan Party may merge with a Person if the Borrower (or such Loan Party if the Borrower is not a party to such merger) is the surviving Person, (ii) any Loan Party may merge into another Loan Party, so long as the Borrower and Parent are at all times surviving entities, (iii) any Subsidiary may sell, transfer, lease or otherwise dispose of all or substantially all of its assets to the Borrower or to the Parent or any other Loan Party, (iv) any Loan Party (other than the Borrower or the Parent) may liquidate or dissolve if the Borrower determines in good faith that such liquidation or dissolution is in the best interests of the Borrower and is not materially disadvantageous to the Lenders and (v) any Excluded Subsidiary may liquidate or dissolve or be merged into a Loan Party or another Excluded Subsidiary; provided , further , that any such merger involving a Person that is not a wholly owned Subsidiary of Borrower or Parent immediately prior to such merger shall not be permitted unless also permitted by Section 7.4 .
(b)    The Borrower will not, and will not permit any of the Loan Parties to, engage in any business other than businesses of the type conducted by the Borrower and the Loan Parties on the date hereof and businesses or lines of business incidental or reasonably related thereto.
Section 7.4.     Investments, Loans, Etc.  The Borrower will not, and will not permit any of the Loan Parties to, purchase, hold or acquire (including pursuant to any merger with any Person that was not a wholly owned Subsidiary of Borrower or Parent prior to such merger) any Capital Stock, evidence of Indebtedness or other securities (including any option, warrant, or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to Guarantee any obligations of, or make or permit to exist any investment or any other interest in, any other Person (all of the foregoing being collectively called “ Investments ”), or

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purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person that constitute a business unit, except:
(a)    Investments (other than Permitted Investments) existing on the date hereof and set forth on Schedule 7.4 (including Investments in the Loan Parties);
(b)    Permitted Investments;
(c)    Guarantees by the Borrower and the Loan Parties constituting Indebtedness permitted by Section 7.1 and Liens permitted by Section 7.2 or other Guarantees by the Borrower and the Loan Parties of other obligations not constituting Indebtedness incurred in the ordinary course of business;
(d)    Investments made by the Borrower in or to the Loan Parties and by any Loan Party to the Borrower or in or to another Loan Party;
(e)    Investments made by the Borrower or any Loan Party in Foreign Subsidiaries in an aggregate amount invested from the date hereof not to exceed $3,500,000;
(f)    payroll, travel and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses of the Loan Parties for accounting purposes and that are made in the ordinary course of business;
(g)    loans or advances to employees, officers or directors of the Borrower or any of the Loan Parties in the ordinary course of business; provided that the aggregate amount of all such loans and advances does not exceed $400,000 at any time outstanding;
(h)    Investments received in connection with the disposition of any asset permitted under Section 7.6 ;
(i)    Hedging Transactions permitted by Section 7.10 ;
(j)    Investments permitted under Section 7.3 , including Permitted Acquisitions and Investments of any Person existing at the time such Person becomes a Loan Party or consolidates or merges with a Loan Party (including in connection with a Permitted Acquisition) in connection with a transaction permitted hereby so long as such Investments were not made in contemplation of such Person becoming a Loan Party or of such consolidation of merger;
(k)    extensions of trade credit in the ordinary course of business to customers of the Loan Parties and advances made in connection with the purchase of goods or services in the ordinary course of business;
(l)    Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with, customers and suppliers, in each case in the ordinary course of business;
(m)    Receivables, security deposits or other trade payables owing to any Loan Party if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms;
(n)    deposit accounts;
(o)    Investments in the ordinary course of business consisting of endorsements for collection or deposit or lease, utility and other similar deposits and deposits with suppliers in the ordinary course of business;

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(p)    Investments received as consideration in connection with dispositions permitted under Section 7.6;
(q)    Investments acquired as a result of a Foreign Customer Finance Program Transaction and other Investments arising in connection with the compromise, settlement or collection of such Investments in the ordinary course of business;
(r)    the Project Sapphire Acquisition; and
(s)    other Investments which in the aggregate do not exceed $8,000,000.
Section 7.5.     Restricted Payments . The Borrower will not, and will not permit any of the Loan Parties to, declare or make, directly or indirectly, any Restricted Payment, except:
(a)    [reserved];
(b)    dividends payable by the Borrower or Parent or another Loan Party solely in interests of any class of its Capital Stock (other than Capital Stock constituting Indebtedness);
(c)    the Parent may purchase fractional shares of its capital stock arising out of stock dividends, splits or combinations or mergers, consolidations or other acquisitions and pay cash in lieu of fractional shares upon the exercise of warrants, options or other securities convertible into or exercisable for capital stock of Parent;
(d)    the Parent may (x) purchase stock or stock options of the Parent from present or former officers, directors or employees of any Loan Party or (y) make payments pursuant to and in accordance with stock option plans or other benefit plans approved by the Parent’s board of directors for directors, officers or employees of the Loan Parties, in each case, in an aggregate amount not to exceed $2,000,000 in any Fiscal Year;
(e)    payments of Permitted Subordinated Debt permitted under Section 7.11 ;
(f)    payments to PubCo permitted under Section 7.7(e) ;
(g)    Permitted Tax Distributions;
(h)    Restricted Payments by any Subsidiary to any Loan Party;
(i)    the Share Repurchase Payments; provided that, no such dividends, distributions or other Restricted Payments may be made unless, after giving effect thereto, (x) the Borrower is in compliance with the financial covenant set forth in Section 6.1 at such time and (y) the Consolidated Leverage Ratio is 0.50 less than the maximum Consolidated Leverage Ratio permitted to be maintained under Section 6.2 at such time; and
(j)    other Restricted Payments by Parent not to exceed $6,000,000 in the aggregate in any Fiscal Year, provided : no such dividends may be made unless after giving effect thereto, (x) the Borrower is in compliance with the financial covenant set forth in Section 6.1 at such time and (y) the Consolidated Leverage Ratio is 0.50 less than the maximum Consolidated Leverage Ratio permitted to be maintained under Section 6.2 at such time.
Section 7.6.     Sale of Assets. The Borrower will not, and will not permit any of the Loan Parties to, convey, sell, lease, assign, transfer or otherwise dispose of any of its assets, business or property or, in the case of any Loan Party (other than the Parent), any shares of such Loan Party’s (other than the Parent’s)

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Capital Stock, in each case whether now owned or hereafter acquired, to any Person other than the Borrower, the Parent or any other Loan Party (or to qualify directors if required by applicable law), except:
(a)    the sale or other disposition of obsolete or worn out property or other property not necessary for operations disposed of in the ordinary course of business (including the lapse of registered patents, trademarks and other intellectual property of the Loan Parties to the extent not economically desirable in the conduct of their businesses);
(b)    the sale of inventory and Permitted Investments in the ordinary course of business or as otherwise permitted under Section 7.2 , Section 7.3 , Section 7.4 or Section 7.5 ;
(c)    sales, assignments, transfers and other dispositions of accounts receivable in connection with the compromise, settlement or collection thereof consistent in the ordinary course of business and not for purposes of financing;
(d)    leases or subleases entered into in the ordinary course of business and the dispositions thereof, to the extent that they do not materially interfere with the business of the Loan Parties, taken as a whole;
(e)    licenses or sublicenses of intellectual property or software in the ordinary course of business, to the extent that they do not materially interfere with the business of the Loan Parties;
(f)    dispositions resulting from any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any property or asset of any Loan Party;
(g)    in order to resolve disputes that occur in the ordinary course of business, any Loan Party may discount or otherwise compromise for less than the face value thereof, notes or accounts receivable;
(h)    sales or other dispositions of assets and property by the Borrower to any other Loan Party or by any Loan Party to the Borrower or any other Loan Party;
(i)    the sale or other disposition of Real Estate, so long as such Real Estate is not included in the Collateral; provided that, notwithstanding the foregoing, the Borrower shall be permitted to sell the facility of the Target located at 1715 N. 8 th Street, Neodesha, Kansas, regardless of whether such facility is currently part of the Collateral;
(j)    dispositions or exchanges of equipment or real property to the extent that (i) such property is exchanged for credit against the purchase price of similar replacement property or (ii) the proceeds of such disposition are applied to the purchase price of such replacement property in accordance with Section 2.12(a) ;
(k)    the issuance or sale of shares of any Subsidiary’s Capital Stock to qualified directors if required by applicable law;
(l)    Dispositions permitted by Section 7.3 ;
(m)    Dispositions of receivables, inventory and other property in the ordinary course of business in connection with a Foreign Customer Finance Program Transaction; and
(n)    the sale or other disposition of such assets in an aggregate amount not to exceed $5,000,000 in any twelve (12) month period ending on the date of determination thereof.

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Section 7.7.     Transactions with Affiliates . The Borrower will not, and will not permit any of the Loan Parties to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except:
(a)    in the ordinary course of business at prices and on terms and conditions not less favorable to the Borrower or such Loan Party than could be obtained on an arm’s length basis from unrelated third parties;
(b)    transactions between or among the Borrower, the Parent and any Subsidiary not involving any other Affiliates;
(c)    equity contributions to, and the issuance of Capital Stock by, Parent;
(d)    loans or advances to employees permitted under Section 7.1 ;
(e)    the payment of reasonable fees to directors of the Borrower or any Subsidiary who are not employees of the Borrower or any Subsidiary, and compensation, employment, termination and other employee benefit arrangements paid to, and indemnities provided for the benefit of, directors, officers or employees of the Borrower or any Subsidiary, each in the ordinary course of business;
(f)    (i) any issuance of securities or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment agreements, stock options and stock ownership plans approved by the Borrower’s board of directors in the ordinary course of business and (ii) any repurchases of any issuances, awards or grants issued pursuant to clause (i), in each case, to the extent permitted by Section 7.5;
(g)    employment arrangements entered into in the ordinary course of business between the Borrower or any Subsidiary and any employee thereof;
(h)    any Restricted Payment permitted by Section 7.5 ; and
(i)    the Loan Parties may pay the expenses of PubCo, as set forth in the Parent Operating Agreement.
Section 7.8.     Restrictive Agreements . The Borrower will not, and will not permit any of the Loan Parties to, directly or indirectly, enter into, incur or permit to exist any agreement that prohibits, restricts or imposes any condition upon (a) the ability of the Borrower or any of the Loan Parties to create, incur or permit any Lien upon any of its assets or properties, whether now owned or hereafter acquired, or (b) the ability of any of the Loan Parties (other than the Parent) to pay dividends or other distributions with respect to its Capital Stock, to make or repay loans or advances to the Borrower or any other Loan Party, to Guarantee Indebtedness of the Borrower or any other Loan Party or to transfer all or substantially all of its property or assets to the Borrower or any other Loan Party thereof; provided that (i) the foregoing shall not apply to restrictions or conditions imposed by law or by this Agreement or any other Loan Document, (ii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the permitted sale of a Subsidiary or any asset pending such sale, provided such restrictions and conditions apply only to the Subsidiary or asset that is sold and such sale is, or will be prior to the consummation thereof, permitted hereunder, (iii) the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions and conditions apply only to the property or assets securing such Indebtedness, (iv) the foregoing shall not apply to customary provisions in leases, licenses or other agreements restricting the assignment thereof, (v) customary restrictions in joint venture agreements and other similar agreements applicable to joint ventures permitted hereunder and

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applicable solely to such joint venture, (vi) any agreement or arrangement already binding on a Subsidiary when it is acquired so long as such agreement or arrangement was not created in anticipation of such acquisition and (vii) the foregoing shall not apply to any Foreign Customer Finance Program Transaction; provided such restrictions apply solely to the receivables, inventory and other assets or interests subject thereto.
Section 7.9.     [Reserved] .
Section 7.10.     Hedging Transactions . The Borrower will not, and will not permit any of the Loan Parties to, enter into any Hedging Transaction, other than Hedging Transactions entered into in the ordinary course of business to hedge or mitigate risks to which the Borrower or any of the Loan Parties is exposed in the conduct of its business or the management of its liabilities. Solely for the avoidance of doubt, the Borrower acknowledges that a Hedging Transaction entered into for speculative purposes or of a speculative nature (which shall be deemed to include any Hedging Transaction under which the Borrower or any of the Loan Parties is or may become obliged to make any payment (i) in connection with the purchase by any third party of any Capital Stock or any Indebtedness, or (ii) as a result of changes in the market value of any Capital Stock) is not a Hedging Transaction entered into in the ordinary course of business to hedge or mitigate risks.
Section 7.11.     Permitted Subordinated Indebtedness .
(a)    The Borrower will not, and will not permit any Loan Parties to (i) prepay, redeem, repurchase or otherwise acquire for value any Permitted Subordinated Debt, or (ii) make any principal, interest or other payments on any Permitted Subordinated Debt that, in the case of clause (i) or (ii), is not expressly permitted by the subordination provisions of the Subordinated Debt Documents.
(b)    The Borrower will not, and will not permit any Loan Parties to, agree to or permit any amendment, modification or waiver of any provision of any Subordinated Debt Document if the effect of such amendment, modification or waiver is to (i) increase the yield on such Permitted Subordinated Debt or change (to earlier dates) the dates upon which principal and interest are due thereon; (ii) alter the redemption, prepayment or subordination provisions thereof; (iii) alter the covenants and events of default in a manner that would make such provisions more onerous or restrictive to the Borrower or any such Loan Party; or (iv) otherwise increase the obligations of the Borrower or any Loan Party in respect of such Permitted Subordinated Debt or confer additional rights upon the holders thereof which individually or in the aggregate would be adverse in any material respect to the Borrower or any of the Loan Parties or to the Lenders.
Section 7.12.     Amendment to Material Documents . The Borrower will not, and will not permit any of the Loan Parties to, amend, modify or waive any of its rights under its certificate of incorporation, bylaws or other organizational documents, the Existing Master Lease or any agreement governing Material Indebtedness, except in any manner that could not reasonably be expected to have a Material Adverse Effect.
Section 7.13.     Accounting Changes . The Borrower will not, and will not permit any of the Loan Parties to, make any significant change in accounting treatment or reporting practices, except as required by GAAP, or change the fiscal year of the Borrower or of any of the Loan Parties.
Section 7.14.     Government Regulation . The Borrower will not, and will not permit any of the Loan Parties to, (a) be or become subject at any time to any law, regulation or list of any Governmental Authority of the United States (including, without limitation, the OFAC list) that prohibits or limits the Lenders from making any advance or extension of credit to the Borrower or from otherwise conducting business with the Loan Parties, or (b) fail to provide documentary and other evidence of the identity of the Loan Parties as may be requested by any Lender at any time to enable such Lender to verify the identity of the Loan Parties

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or to comply with any applicable law or regulation, including, without limitation, Section 326 of the Patriot Act at 31 U.S.C. Section 5318.
Section 7.15.     [Reserved] .
Section 7.16.     Sales and Discounts of Accounts Receivable . Except for any Foreign Customer Finance Program Transactions, the Borrower shall not and shall not permit any Loan Party to sell or discount any Accounts Receivable outside the ordinary course of business.

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ARTICLE VIII
EVENTS OF DEFAULT
Section 8.1.     Events of Default . If any of the following events (each an “ Event of Default ”) shall occur:
(a)    any Loan Party shall fail to pay any principal of any Loan or of any reimbursement obligation in respect of any LC Disbursement or make any payment under Section 2.22(a) or shall fail to make when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment or otherwise; or
(b)    any Loan Party shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount payable under clause (a) of this Section 8.1 or an amount related to a Bank Product Obligation) payable under this Agreement or any other Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of five (5) Business Days; or
(c)    any representation or warranty made or deemed made by or on behalf of the Borrower or any of the Loan Parties in or in connection with this Agreement or any other Loan Document (including the Schedules attached hereto and thereto), or in any amendments or modifications hereof or waivers hereunder, or in any certificate, report, financial statement or other document submitted to Administrative Agent or the Lenders by any Loan Party or any representative of any Loan Party pursuant to or in connection with this Agreement or any other Loan Document shall prove to be incorrect in any material respect (other than any representation or warranty that is expressly qualified by a Material Adverse Effect or other materiality, in which case such representation or warranty shall prove to be incorrect in any respect) when made or deemed made or submitted; or
(d)    any Loan Party shall fail to observe or perform any covenant or agreement contained in Section 5.1 , 5.2(a) , or 5.4 (with respect to the Borrower’s legal existence) or Article VI or VII ; or
(e)    any Loan Party shall fail to observe or perform any covenant or agreement contained in this Agreement (other than those referred to in clauses (a), (b) and (d) above) or any other Loan Document or related to any Bank Product Obligation, and such failure shall remain unremedied for 30 days after the earlier of (i) any officer of any Loan Party becomes aware of such failure, or (ii) notice thereof shall have been given to any Loan Party by the Administrative Agent or any Lender; or
(f)    subject to any applicable notice or grace periods, any default or event of default shall have occurred and be continuing under the Subordinated Debt Documents or any Subordinated Debt Document shall cease to be in full force and effect or the validity or enforceability thereof is disaffirmed by or on behalf of any subordinated lender party thereto, or any Obligations fail to constitute “Senior Indebtedness” for purposes of the applicable Subordinated Debt Document, or all or any part of the Permitted Subordinated Debt is accelerated, is declared to be due and payable, or is required to be prepaid or redeemed, in each case prior to the stated maturity thereof (other than by a regularly scheduled required prepayment or redemption); or
(g)    the Borrower or any of the Loan Parties (whether as primary obligor or as guarantor or other surety) shall fail to pay any principal of, or premium or interest on, any Material Indebtedness that is outstanding, when and as the same shall become due and payable (whether at scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument evidencing or

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governing such Indebtedness; or any other default or event of default of any Loan Party shall occur or condition shall exist under any agreement or instrument relating to any Material Indebtedness and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to accelerate, or permit the acceleration of, the maturity of such Indebtedness; or any Material Indebtedness shall be declared to be due and payable, or required to be prepaid or redeemed (other than by a regularly scheduled required prepayment or redemption); or
(h)    the Borrower or any of the Loan Parties shall (i) commence a voluntary case or other proceeding or file any petition seeking liquidation, reorganization or other relief under any federal, state or foreign bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a custodian, trustee, receiver, liquidator or other similar official of it or any substantial part of its property, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in subsection (i) of this Section, (iii) apply for or consent to the appointment of a custodian, trustee, receiver, liquidator or other similar official for the Borrower or any such Loan Party or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors, or (vi) take any action for the purpose of effecting any of the foregoing; or
(i)    an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Borrower or any of the Loan Parties or their respective debts, or any substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency or other similar law now or hereafter in effect, or (ii) the appointment of a custodian, trustee, receiver, liquidator or other similar official for the Borrower or any of the Loan Parties or for a substantial part of its assets, and in any such case, such proceeding or petition shall remain undismissed for a period of sixty (60) days or an order or decree approving or ordering any of the foregoing shall be entered; or
(j)    the Borrower or any of the Loan Parties shall become unable to pay, or shall admit in writing its inability to pay, its debts as they become due; or
(k)    an ERISA Event shall have occurred that, when taken together with other ERISA Events that have occurred, could reasonably be expected to result in liability to the Borrower and the Loan Parties in an aggregate amount exceeding $7,500,000; or
(l)    any judgment or order for the payment of money in excess of $7,500,000 in the aggregate shall be rendered against the Borrower or any of the Loan Parties, and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgment or order, or (ii) there shall be a period of thirty (30) consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or
(m)    any non‑monetary judgment or order shall be rendered against the Borrower or any of the Loan Parties that could reasonably be expected, either individually or in the aggregate, to have a Material Adverse Effect, and there shall be a period of thirty (30) consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or
(n)    a Change in Control shall occur or exist; or
(o)    any provision of the Guaranty or any Collateral Document shall for any reason cease to be valid and binding on, or enforceable against, any Loan Party, or any Loan Party shall so state

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in writing, or any Loan Party shall seek to terminate its obligation under the Guaranty or any Collateral Document in any manner not otherwise permitted hereunder or under the Collateral Documents; or
(p)    any Lien purported to be created under any Collateral Document shall fail or cease to be, or shall be asserted by any Loan Party not to be, a valid and perfected Lien on any Collateral, with the priority required by the applicable Collateral Documents; or
(q)    a default by a Loan Party exists under the Existing Master Lease which default causes the landlord thereunder to seek termination of the Existing Master Lease or to remove the Borrower from possession of the leased premises; provided, however, no Event of Default shall be deemed to exist: (i) so long as the Borrower is contesting or defending the claim made by such landlord in good faith and pursuant to reasonable efforts diligently pursued, or (ii) as a result of the termination of the Existing Master Lease due to “Partial Condemnation”, “Casualty” or “Total Condemnation”, in each case, as such terms are defined in the Existing Master Lease.
then, and in every such event (other than an event with respect to the Borrower described in clause (h) or (i) of this Section 8.1 ) and at any time thereafter during the continuance of such event, the Administrative Agent may, and upon the written request of the Required Lenders shall, by notice to the Borrower, take any or all of the following actions, at the same or different times: (i) terminate the Commitments, whereupon the Commitment of each Lender shall terminate immediately, (ii) declare the principal of and any accrued interest on the Loans, and all other Obligations owing hereunder, to be, whereupon the same shall become, due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower, (iii) exercise all remedies contained in any other Loan Document, and (iv) exercise any other remedies available at Law or in equity; and that, if an Event of Default specified in either clause (h) or (i) shall occur, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon, and all fees, and all other Obligations shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.
Section 8.2.     Application of Funds .
After the exercise of remedies provided for in Section 8.1 (or immediately after an Event of Default specified in either clause (h) or (i) of Section 8.1 ), any amounts received on account of the Obligations shall be applied by the Administrative Agent in the following order:
(a)     first , to the reimbursable expenses of the Administrative Agent incurred in connection with such sale or other realization upon the Collateral, until the same shall have been paid in full;
(b)     second , to the fees and other reimbursable expenses of the Administrative Agent and the Issuing Bank then due and payable pursuant to any of the Loan Documents, until the same shall have been paid in full;
(c)     third , to all reimbursable expenses, if any, of the Lenders then due and payable pursuant to any of the Loan Documents, until the same shall have been paid in full;
(d)     fourth , to the fees due and payable under Sections 2.14(b) and (c) of this Agreement and interest then due and payable under the terms of this Agreement, until the same shall have been paid in full;
(e)     fifth , on a pro rata basis to the aggregate outstanding principal amount of the Term Loans (allocated pro rata among the Lenders in respect of their Pro Rata Shares), to the aggregate outstanding principal amount of the Revolving Loans, the LC Exposure, the Net Mark-to-Market Exposure (to the extent secured by Liens) and the Bank Product Obligations of the Borrower and its

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Subsidiaries, until the same shall have been paid in full, allocated pro rata among any Lender, any Lender-Related Hedge Provider and any Bank Product Provider, based on their respective Pro Rata Shares of the aggregate amount of such Revolving Loans, LC Exposure, Net Mark-to-Market Exposure (to the extent secured by Liens) and Bank Product Obligations;
(f)     sixth , to additional cash collateral for the aggregate amount of all outstanding Letters of Credit until the aggregate amount of all cash collateral held by the Administrative Agent pursuant to this Agreement is equal to 102% of the LC Exposure after giving effect to the foregoing clause fifth; and
(g)    to the extent any proceeds remain, to the Borrower or other parties lawfully entitled thereto.
All amounts allocated pursuant to the foregoing clauses third through sixth to the Lenders as a result of amounts owed to the Lenders under the Loan Documents shall be allocated among, and distributed to, the Lenders pro rata based on their respective Pro Rata Shares; provided , that all amounts allocated to that portion of the LC Exposure comprised of the aggregate undrawn amount of all outstanding Letters of Credit pursuant to clause fifth and sixth shall be distributed to the Administrative Agent, rather than to the Lenders, and held by the Administrative Agent in an account in the name of the Administrative Agent for the benefit of the Issuing Bank and the Revolving Loan Lenders as cash collateral for the LC Exposure, such account to be administered in accordance with Section 2.22(g) .
Excluded Swap Obligations with respect to any Guarantor shall not be paid with amounts received from such Guarantor or its assets, but appropriate adjustments shall be made with respect to payments from other Loan Parties to preserve the allocation to Obligations otherwise set forth above in this Section.
Notwithstanding the foregoing, Hedging Obligations and Bank Product Obligations may be excluded from the application described above without any liability to the Administrative Agent, if the Administrative Agent has not received written notice, together with such supporting documentation as the Administrative Agent may request, from the applicable Lender-Related Hedge Provider or Bank Product Provider.  Each Lender-Related Hedge Provider and Bank Product Provider not a party to this Credit Agreement that has given the notice contemplated by the preceding sentence shall, by such notice, be deemed to have acknowledged and accepted the appointment of the Administrative Agent pursuant to the terms of Article IX for itself and its Affiliates as if a “Lender” party hereto.

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ARTICLE IX
THE ADMINISTRATIVE AGENT
Section 9.1.     Appointment of Administrative Agent .
(a)    Each Lender and each Issuing Bank irrevocably appoints SunTrust Bank as the Administrative Agent and authorizes it to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent under this Agreement and the other Loan Documents, together with all such actions and powers that are reasonably incidental thereto. The Administrative Agent may perform any of its duties hereunder or under the other Loan Documents by or through any one or more sub-agents or attorneys-in-fact appointed by the Administrative Agent. The Administrative Agent and any such sub-agent or attorney-in-fact may perform any and all of its duties and exercise its rights and powers through their respective Related Parties. The exculpatory provisions set forth in this Article shall apply to any such sub-agent or attorney-in-fact and the Related Parties of the Administrative Agent, any such sub-agent and any such attorney-in-fact and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent and all provisions of this Article IX and Article XI (including Section 11.3(c) , as though such co-agents, sub-agents and attorneys-in-fact were the “administrative agent” under the Loan Documents) as if set forth in full herein with respect thereto.
(b)    The Issuing Bank shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith and the Issuing Bank shall have all the benefits and immunities (i) provided to the Administrative Agent in this Article with respect to any acts taken or omissions suffered by the Issuing Bank in connection with Letters of Credit issued by it or proposed to be issued by it and the application and agreements for letters of credit pertaining to the Letters of Credit as fully as if the term “Administrative Agent” as used in this Article included the Issuing Bank with respect to such acts or omissions and (ii) as additionally provided in this Agreement with respect to the Issuing Bank.
Section 9.2.     Nature of Duties of Administrative Agent . The Administrative Agent shall not have any duties or obligations except those expressly set forth in this Agreement and the other Loan Documents. Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default or an Event of Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except those discretionary rights and powers expressly contemplated by the Loan Documents that the Administrative Agent is required to exercise in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 11.2 ), provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable Law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any Debtor Relief Law, and (c) except as expressly set forth in the Loan Documents, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Subsidiaries that is communicated to or obtained by the Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or not taken by it, its sub-agents or attorneys-in-fact with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 11.2 ) or in the absence of its own gross negligence or willful misconduct as determined by a final, non-appealable judgment by a court of competent jurisdiction. The Administrative Agent shall not be responsible for the negligence or misconduct

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of any sub-agents or attorneys-in-fact selected by it with reasonable care. The Administrative Agent shall not be deemed to have knowledge of any Default or Event of Default unless and until written notice thereof (which notice shall include an express reference to such event being a “Default” or “Event of Default” hereunder) is given to the Administrative Agent by the Borrower or any Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements, or other terms and conditions set forth in any Loan Document or the occurrence of any Default or Event of Default, (iv) the validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document, or the creation, perfection or priority of any Lien purported to be created by the Collateral Documents, (v) the value or the sufficiency of any Collateral, or (vi) the satisfaction of any condition set forth in Article III or elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent. The Administrative Agent may consult with legal counsel (including counsel for the Borrower) concerning all matters pertaining to such duties. Neither the Administrative Agent nor any of its Related Parties shall be responsible or have any liability for, or have any duty to ascertain, inquire into, monitor or enforce, compliance with the provisions hereof relating to Ineligible Assignees. Without limiting the generality of the foregoing, the Administrative Agent shall not ý(x) be obligated to ascertain, monitor or inquire as to whether any Lender or Participant or prospective Lender or Participant is an Ineligible Assignee or (y) have any liability with respect to or arising out of (i) any assignment or participation of Loans, or disclosure of confidential information, to any Ineligible Assignee or (ii) the failure of the Administrative Agent to post a notice of the designation of a Person as an Ineligible Assignee or an updated Schedule 1.01 to the Platform.
Section 9.3.     Lack of Reliance on the Administrative Agent . Each of the Lenders, the Swingline Lender and the Issuing Bank acknowledges that it has, independently and without reliance upon the Administrative Agent, any Issuing Bank or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each of the Lenders, the Swingline Lender and the Issuing Bank also acknowledges that it will, independently and without reliance upon the Administrative Agent, any Issuing Bank or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, continue to make its own decisions in taking or not taking of any action under or based on this Agreement, any related agreement or any document furnished hereunder or thereunder.
Section 9.4.     Certain Rights of the Administrative Agent . If the Administrative Agent shall request instructions from the Required Lenders with respect to any action or actions (including the failure to act) in connection with this Agreement, the Administrative Agent shall be entitled to refrain from such act or taking such act, unless and until it shall have received instructions from such Lenders; and the Administrative Agent shall not incur liability to any Person by reason of so refraining. Without limiting the foregoing, no Lender shall have any right of action whatsoever against the Administrative Agent as a result of the Administrative Agent acting or refraining from acting hereunder in accordance with the instructions of the Required Lenders where required by the terms of this Agreement.
Section 9.5.     Reliance by Administrative Agent . The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, posting or other distribution) believed by it to be genuine and to have been signed, sent or made by the proper Person. The Administrative Agent may also rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, or the issuance of a Letter of Credit, that by its terms must be

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fulfilled to the satisfaction of a Lender or the Issuing Bank, the Administrative Agent may presume that such condition is satisfactory to such Lender or the Issuing Bank unless the Administrative Agent shall have received notice to the contrary from such Lender or the Issuing Bank prior to the making of such Loan or the issuance of such Letter of Credit. The Administrative Agent may consult with legal counsel (including counsel for the Borrower), independent public accountants and other experts selected by it and shall not be liable for any action taken or not taken by it in accordance with the advice of such counsel, accountants or experts.
Section 9.6.     The Administrative Agent in its Individual Capacity . The bank serving as the Administrative Agent shall have the same rights and powers under this Agreement and any other Loan Document in its capacity as a Lender as any other Lender and may exercise or refrain from exercising the same as though it were not the Administrative Agent; and the terms “Lenders”, “Required Lenders”, “holders of Notes”, or any similar terms shall, unless the context clearly otherwise indicates, include the bank serving as the Administrative Agent in its individual capacity. The bank acting as the Administrative Agent and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrower or any Subsidiary or Affiliate of the Borrower as if it were not the Administrative Agent hereunder and without any duty to account therefore to the Lenders.
Section 9.7.     Successor Administrative Agent .
(a)    The Administrative Agent may resign at any time by giving notice thereof to the Lenders and the Borrower. Upon any such resignation, the Required Lenders shall have the right to appoint a successor Administrative Agent, subject to the approval by the Borrower provided that no Default or Event of Default shall exist at such time. If no successor Administrative Agent shall have been so appointed, and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of resignation, then the retiring Administrative Agent may, on behalf of the Lenders and the Issuing Bank, appoint a successor Administrative Agent, which shall be a commercial bank organized under the Laws of the United States or any state thereof or a bank which maintains an office in the United States, having a combined capital and surplus of at least $500,000,000.
(b)    Upon the acceptance of its appointment as the Administrative Agent hereunder by a successor, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations under this Agreement and the other Loan Documents. If within 45 days after written notice is given of the retiring Administrative Agent’s resignation under this Section 9.7 no successor Administrative Agent shall have been appointed and shall have accepted such appointment, then on such 45 th day (i) the retiring Administrative Agent’s resignation shall become effective, (ii) the retiring Administrative Agent shall thereupon be discharged from its duties and obligations under the Loan Documents (except that in the case of any Collateral held by the Administrative Agent on behalf of the Lenders or the Issuing Bank under any of the Loan Documents, the retiring Administrative Agent shall continue to hold such Collateral until such time as a successor Administrative Agent is appointed) and (iii) the Required Lenders shall thereafter perform all duties of the retiring Administrative Agent under the Loan Documents until such time as the Required Lenders appoint a successor Administrative Agent as provided above. After any retiring Administrative Agent’s resignation hereunder, the provisions of this Article IX and Section 11.3 shall continue in effect for the benefit of such retiring Administrative Agent, its representatives and agents and their respective Related Parties in respect of any actions taken or not taken by any of them while it was serving as the Administrative Agent.

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(c)    In addition to the foregoing, if a Lender becomes, and during the period it remains, a Defaulting Lender, and if any Default or Event of Default has arisen from a failure of the Borrower to comply with Section 2.26(a) , then the Issuing Bank and the Swingline Lender may, upon prior written notice to the Borrower and the Administrative Agent, resign as Issuing Bank or as Swingline Lender, as the case may be, effective at the close of business Atlanta, Georgia time on a date specified in such notice (which date may not be less than five (5) Business Days after the date of such notice); provided that such resignation by the Issuing Bank will have no effect on the validity or enforceability of any Letter of Credit then outstanding or on the obligations of the Borrower or any Lender under this Agreement with respect to any such outstanding Letter of Credit or otherwise to the Issuing Bank; and provided , further , that such resignation of the Swingline Lender will have no effect on its rights in respect of any outstanding Swingline Loans or on the obligations of the Borrower or any Lender under this Agreement with respect to any such outstanding Swingline Loan.
Section 9.8.     Benefits of Article IX . None of the provisions of this Article IX shall inure to the benefit of the Borrower (other than the second sentence of Section 9.7(a) and Section 9.7(c) ) or of any Person other than Administrative Agent and each of the Lenders and their respective successors and permitted assigns. Accordingly, neither the Borrower (other than the second sentence of Section 9.7(a) and Section 9.7(c) ) nor any Person other than Administrative Agent and the Lenders (and their respective successors and permitted assigns) shall be entitled to rely upon, or to raise as a defense, the failure of the Administrative Agent or any Lenders to comply with the provisions of this Article IX .
Section 9.9.     Administrative Agent May File Proofs of Claim .
(a)    In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or like proceeding or other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan or any Revolving Credit Exposure shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise:
(i)    to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans or Revolving Credit Exposure and all other Obligations arising under the Loan Documents that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the Issuing Bank and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the Issuing Bank and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders, the Issuing Bank and the Administrative Agent under Section 11.3 ) allowed in such judicial proceeding; and
(ii)    to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;
(b)    any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and the Issuing Bank to make such payments to the Administrative Agent and, if that the Administrative Agent shall consent to the making of such payments directly to the Lenders and the Issuing Bank, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Section 11.3 .

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Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or the Issuing Bank any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or the Issuing Bank or to authorize the Administrative Agent to vote in respect of the claim of any Lender or the Issuing Bank in any such proceeding.
Section 9.10.     Titled Agents .  Each Lender and each Loan Party hereby agrees that any Documentation Agent or Syndication Agent designated hereunder shall have no duties or obligations under any Loan Documents to any Lender or any Loan Party.
Section 9.11.     Authorization to Execute other Loan Documents . Each Lender hereby authorizes the Administrative Agent to execute on behalf of all Lenders all Loan Documents other than this Agreement.
Section 9.12.     Collateral and Guaranty Matters . The Lenders and the Issuing Bank irrevocably authorize the Administrative Agent, at its option and in its reasonable discretion,
(a)    to release any Lien on any property granted to or held by the Administrative Agent under any Loan Document (i) upon termination or expiration of the Aggregate Revolving Commitments and payment in full of the Obligations (other than (x) contingent indemnification obligations for which no claim has been asserted, (y) all Hedging Obligations or Bank Product Obligations that are not then due and payable and (z) the expiration or termination of all Letters of Credit (other than Letters of Credit as to which other arrangements satisfactory to the Administrative Agent and the Issuing Bank shall have been made)), (ii) that is transferred or to be transferred as part of or in connection with any disposition permitted hereunder or under any other Loan Document, or (iii) as approved in accordance with Section 11.2 ;
(b)    to subordinate any Lien on any property granted to or held by the Administrative Agent under any Loan Document to the holder of any Lien on such property that is permitted by Sections 7.2(c) or 7.2(t) ; and
(c)    to release any guarantor from its obligations under the Guaranty and Security Agreement if such Person ceases to be a Subsidiary as a result of a transaction permitted hereunder.
Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release or subordinate its interest in particular types or items of property, or to release any guarantor from its obligations under this Agreement, pursuant to this Section 9.12 .
Section 9.13.     Hedging Obligations and Bank Product Obligations . No Lender or any Affiliate of a Lender that holds any Hedging Obligation or any Bank Product Obligation that obtains the benefits of Section 8.2 or any Collateral by virtue of the provisions hereof or of any Collateral Document shall have any right to notice of any action or to consent to, direct or object to any action hereunder or under any other Loan Document or otherwise in respect of the Collateral (including the release or impairment of any Collateral) other than in its capacity as a Lender and, in such case, only to the extent expressly provided in the Loan Documents. Notwithstanding any other provision of this Article IX to the contrary, the Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Hedging Obligations and Bank Product Obligations unless the Administrative Agent has received written notice of such Obligations, together with such supporting documentation as the Administrative Agent may request, from the applicable Lender or Affiliate of a Lender that holds such Hedging Obligation or such Bank Product Obligation, as the case may be. The Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Hedging Obligations or Bank Product Obligations in the case of a Maturity Date.

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Section 9.14.    Withholding Tax. To the extent required by any applicable law, the Administrative Agent may withhold from any interest payment to any Lender an amount equivalent to any applicable withholding tax. If the Internal Revenue Service or any authority of the United States or any other jurisdiction asserts a claim that the Administrative Agent did not properly withhold tax from amounts paid to or for the account of any Lender (because the appropriate form was not delivered or was not properly executed, or because such Lender failed to notify the Administrative Agent of a change in circumstances that rendered the exemption from, or reduction of, withholding tax ineffective, or for any other reason), such Lender shall indemnify the Administrative Agent (to the extent that the Administrative Agent has not already been reimbursed by the Borrower and without limiting the obligation of the Borrower to do so) fully for all amounts paid, directly or indirectly, by the Administrative Agent as tax or otherwise, including penalties and interest, together with all expenses incurred, including legal expenses, allocated staff costs and any out of pocket expenses.
Section 9.15.    Right to Realize on Collateral and Enforce Guarantee. Anything contained in any of the Loan Documents to the contrary notwithstanding, the Borrower, the Administrative Agent and each Lender hereby agree that (i) no Lender shall have any right individually to realize upon any of the Collateral or enforce the Collateral Documents, it being understood and agreed that all powers, rights and remedies hereunder and under the Collateral Documents may be exercised solely by the Administrative Agent, and (ii) in the event of a foreclosure by the Administrative Agent on any of the Collateral pursuant a public or private sale or other disposition, the Administrative Agent or any Lender may be the purchaser or licensor of any or all of such Collateral at any such sale or other disposition and the Administrative Agent, as agent for and representative of the Lenders (but not any Lender or Lenders in its or their respective individual capacities unless the Required Lenders shall otherwise agree in writing), shall be entitled, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Collateral sold at any such public sale, use and apply any of the Obligations as a credit on account of the purchase price for any collateral payable by the Administrative Agent at such sale or other disposition.

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ARTICLE X
THE GUARANTY
Section 10.1.     The Guaranty . Each of the Guarantors hereby jointly and severally guarantees to the Administrative Agent, each Lender, each Affiliate of a Lender that enters into Bank Products or a Hedging Transaction with the Borrower or any Subsidiary, and each other holder of the Obligations as hereinafter provided, as primary obligor and not as surety, the prompt payment of the Obligations in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise) strictly in accordance with the terms thereof. The Guarantors hereby further agree that if any of the Obligations is not paid in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise), the Guarantors will, jointly and severally, promptly pay the same, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Obligations, the same will be promptly paid in full when due (whether at extended maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise) in accordance with the terms of such extension or renewal.
Notwithstanding any provision to the contrary contained herein or in any other of the Loan Documents or the other documents relating to the Obligations, the obligations of each Guarantor under this Agreement and the other Loan Documents shall not exceed an aggregate amount equal to the largest amount that would not render such obligations subject to avoidance under applicable Debtor Relief Laws.
Section 10.2.     Obligations Unconditional . The obligations of the Guarantors under Section 10.1 are joint and several, absolute and unconditional, irrespective of the value, genuineness, validity, regularity or enforceability of any of the Loan Documents or other documents relating to the Obligations, or any substitution, release, impairment or exchange of any other guarantee of or security for any of the Obligations, and, to the fullest extent permitted by applicable Law, irrespective of any other circumstance whatsoever which might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, it being the intent of this Section 10.2 that the obligations of the Guarantors hereunder shall be absolute and unconditional under any and all circumstances. Each Guarantor agrees that such Guarantor shall have no right of subrogation, indemnity, reimbursement or contribution against the Borrower or any other Guarantor for amounts paid under this Article X until such time as the Obligations have been paid in full and the Commitments have expired or terminated. Without limiting the generality of the foregoing, it is agreed that, to the fullest extent permitted by Law, the occurrence of any one or more of the following shall not alter or impair the liability of any Guarantor hereunder, which shall remain absolute and unconditional as described above:
(a)    at any time or from time to time, without notice to any Guarantor, the time for any performance of or compliance with any of the Obligations shall be extended, or such performance or compliance shall be waived;
(b)    any of the acts mentioned in any of the provisions of any of the Loan Documents or any other document relating to the Obligations shall be done or omitted;
(c)    the maturity of any of the Obligations shall be accelerated, or any of the Obligations shall be modified, supplemented or amended in any respect, or any right under any of the Loan Documents or any other document relating to the Obligations shall be waived or any other guarantee of any of the Obligations or any security therefor shall be released, impaired or exchanged in whole or in part or otherwise dealt with;
(d)    any Lien granted to, or in favor of, the Administrative Agent or any other holder of the Obligations as security for any of the Obligations shall fail to attach or be perfected; or

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(e)    any of the Obligations shall be determined to be void or voidable (including for the benefit of any creditor of any Guarantor) or shall be subordinated to the claims of any Person (including any creditor of any Guarantor).
With respect to its obligations hereunder, each Guarantor hereby expressly waives diligence, presentment, demand of payment, protest and all notices whatsoever and any requirement that the Administrative Agent or any other holder of the Obligations exhaust any right, power or remedy or proceed against any Person under any of the Loan Documents or any other document relating to the Obligations or against any other Person under any other guarantee of, or security for, any of the Obligations.
Section 10.3.     Reinstatement . The obligations of each Guarantor under this Article X shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of any Person in respect of the Obligations is rescinded or must be otherwise restored by any holder of any of the Obligations, whether as a result of any Debtor Relief Law or otherwise, and each Guarantor agrees that it will indemnify the Administrative Agent and each other holder of the Obligations on demand for all reasonable costs and expenses (including the fees, charges and disbursements of counsel) incurred by the Administrative Agent or such holder of the Obligations in connection with such rescission or restoration, including any such costs and expenses incurred in defending against any claim alleging that such payment constituted a preference, fraudulent transfer or similar payment under any Debtor Relief Law.
Section 10.4.    Certain Additional Waivers . Each Guarantor agrees that such Guarantor shall have no right of recourse to security for the Obligations, except through the exercise of rights of subrogation pursuant to Section 10.2 and through the exercise of rights of contribution pursuant to Section 10.6 .
Section 10.5.     Remedies . The Guarantors agree that, to the fullest extent permitted by Law, as between the Guarantors, on the one hand, and the Administrative Agent and the other holders of the Obligations, on the other hand, the Obligations may be declared to be forthwith due and payable as specified in Section 8.1 (and shall be deemed to have become automatically due and payable in the circumstances specified in Section 8.1 ) for purposes of Section 10.1 notwithstanding any stay, injunction or other prohibition preventing such declaration (or preventing the Obligations from becoming automatically due and payable) as against any other Person and that, in the event of such declaration (or the Obligations being deemed to have become automatically due and payable), the Obligations (whether or not due and payable by any other Person) shall forthwith become due and payable by the Guarantors for purposes of Section 10.1 . The Guarantors acknowledge and agree that their obligations hereunder are secured in accordance with the terms of the Collateral Documents and that the holders of the Obligations may exercise their remedies thereunder in accordance with the terms thereof.
Section 10.6.     Rights of Contribution . The Guarantors agree among themselves that, in connection with payments made hereunder, each Guarantor shall have contribution rights against the other Guarantors as permitted under applicable Law. Such contribution rights shall be subordinate and subject in right of payment to the obligations of such Guarantors under the Loan Documents and no Guarantor shall exercise such rights of contribution until the Obligations have been paid in full (other than contingent indemnification obligations or expense reimbursement obligations to the extent no claim giving rise thereto has been asserted) and the Commitments have terminated.
Section 10.7.     Guarantee of Payment; Continuing Guarantee . The guarantee in this Article X is a guaranty of payment and not of collection, is a continuing guarantee, and shall apply to the Obligations whenever arising.
Section 10.8.     Keepwell . Each Qualified ECP Guarantor hereby jointly and severally absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from

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time to time by each Specified Loan Party to honor all of such Specified Loan Party’s obligations under this Agreement and the other Loan Documents in respect of Swap Obligations (provided, however, that each Qualified ECP Guarantor shall only be liable under this Section 10.8 for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section 10.8 or otherwise under this Agreement voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The obligations of each Qualified ECP Guarantor under this Section 10.8 shall remain in full force and effect until the Obligations have been indefeasibly paid and performed in full. Each Qualified ECP Guarantor intends that this Section 10.8 constitute, and this Section 10.8 shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each Specified Loan Party for all purposes of Section la(18)(A)(v)(II) of the Commodity Exchange Act.

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ARTICLE XI
MISCELLANEOUS
Section 11.1.     Notices .
(a)     Written Notices . Except in the case of notices and other communications expressly permitted to be given by telephone, all notices and other communications to any party herein to be effective shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows:

To any Loan Party:        Malibu Boats, LLC
5075 Kimberly Way
Loudon, TN 37774
Attn: Wayne Wilson
Telecopy Number: (865) 458-5478

With a copy to:        O’Melveny & Myers LLP
400 S. Hope Street, 18 th Floor
Los Angeles, CA 90071
Attention: Thomas W. Baxter

To the Administrative Agent:	SunTrust Bank	
3333 Peachtree Rd., 7 th Floor
Mail Code - GA-ATL-0244
Atlanta, Georgia 30326
Attention: Henry Spark
Facsimile: (404) 439-7390

With a copy to:	SunTrust Bank	
303 Peachtree Street, N.E./25 th Floor
Atlanta, Georgia 30308
Attention: Mr. Doug Weltz
Facsimile: (404) 221-2001

To the Issuing Bank:        SunTrust Bank
25 Park Place, N.E./Mail Code 3706
16 th Floor
Atlanta, Georgia 30303
Attention: Standby Letter of Credit Dept.
Facsimile: (404) 588-8129

To the Swingline Lender:	SunTrust Bank	
303 Peachtree Street, N.E./25 th Floor
Atlanta, Georgia 30308
Attention: Mr. Doug Weltz

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Facsimile: (404) 221-2001

To any other Lender:	To the address or facsimile number, set forth in the Administrative Questionnaire or the Assignment and Acceptance executed by such Lender.	
Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. All such notices and other communications shall, when transmitted by overnight delivery, or faxed, be effective when delivered for overnight (next-day) delivery, or transmitted in legible form by facsimile machine, respectively, or if mailed, upon the third Business Day after the date deposited into the mail or if delivered, upon delivery; provided, that notices delivered to the Administrative Agent, the Issuing Bank or the Swingline Lender shall not be effective until actually received by such Person at its address specified in this Section 11.1 .
Any agreement of the Administrative Agent, the Issuing Bank and the Lenders herein to receive certain notices by telephone or facsimile is solely for the convenience and at the request of the Borrower. The Administrative Agent, the Issuing Bank and the Lenders shall be entitled to rely on the authority of any Person purporting to be a Person authorized by the Borrower to give such notice and the Administrative Agent, the Issuing Bank and the Lenders shall not have any liability to the Borrower or other Person on account of any action taken or not taken by the Administrative Agent, the Issuing Bank and the Lenders in reliance upon such telephonic or facsimile notice. The obligation of the Borrower to repay the Loans and all other Obligations hereunder shall not be affected in any way or to any extent by any failure of the Administrative Agent, the Issuing Bank and the Lenders to receive written confirmation of any telephonic or facsimile notice or the receipt by the Administrative Agent, the Issuing Bank and the Lenders of a confirmation which is at variance with the terms understood by the Administrative Agent, the Issuing Bank and the Lenders to be contained in any such telephonic or facsimile notice.
(b)     Electronic Communications .
(i)    Notices and other communications to the Administrative Agent, the Lenders and the Issuing Bank hereunder may be delivered or furnished by electronic communication (including e‑mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender or the Issuing Bank pursuant to Article II unless such Lender, the Issuing Bank, as applicable, and Administrative Agent have agreed to receive notices under such Section by electronic communication and have agreed to the procedures governing such communications. The Administrative Agent or Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.
(ii)    Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement); provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended

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recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.
(iii)    The Borrower agrees that the Administrative Agent may, but shall not be obligated to, make Communications (as defined below) available to the Issuing Bank and the other Lenders by posting the Communications on Debt Domain, Intralinks, Syndtrak, ClearPar or a substantially similar Electronic System (the “ Platform ”).
(iv)    Any Electronic System used by the Administrative Agent is provided “as is” and “as available.” The Agent Parties (as defined below) do not warrant the adequacy of such Electronic Systems and expressly disclaim liability for errors or omissions in the Communications. No warranty of any kind, express, implied or statutory, including, without limitation, any warranty of merchantability, fitness for a particular purpose, non-infringement of third-party rights or freedom from viruses or other code defects, is made by any Agent Party in connection with the Communications or any Electronic System. In no event shall the Administrative Agent or any of its Related Parties (collectively, the “ Agent Parties ”) have any liability to any Loan Party, any Lender, the Issuing Bank or any other Person or entity for damages of any kind, including, without limitation, direct or indirect, special, incidental or consequential damages, losses or expenses (whether in tort, contract or otherwise) arising out of any Loan Party’s or the Administrative Agent’s transmission of Communications through an Electronic System. “ Communications ” means, collectively, any notice, demand, communication, information, document or other material provided by or on behalf of any Loan Party pursuant to any Loan Document or the transactions contemplated therein which is distributed by the Administrative Agent, any Lender or the Issuing Bank by means of electronic communications pursuant to this Section, including through an Electronic System.
Section 11.2.     Waiver; Amendments .
(a)    No failure or delay by the Administrative Agent, the Issuing Bank or any Lender in exercising any right or power hereunder or any other Loan Document, and no course of dealing between any Loan Party and the Administrative Agent or any Lender , shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power or any abandonment or discontinuance of steps to enforce such right or power, preclude any other or further exercise thereof or the exercise of any other right or power hereunder or thereunder. The rights and remedies of the Administrative Agent, the Issuing Bank and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies provided by Law. No waiver of any provision of this Agreement or any other Loan Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section 11.2 , and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan or the issuance of a Letter of Credit shall not be construed as a waiver of any Default or Event of Default, regardless of whether the Administrative Agent, any Lender or the Issuing Bank may have had notice or knowledge of such Default or Event of Default at the time.
(b)    No amendment or waiver of any provision of this Agreement or the other Loan Documents (other than the Fee Letter), nor consent to any departure by the Borrower therefrom, shall in any event be effective unless the same shall be in writing and signed by the Borrower and the Required Lenders or the Borrower and the Administrative Agent with the consent of the Required Lenders and then such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided , that

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(i)    no amendment or waiver shall:
(A)    increase the Commitment of any Lender without the written consent of such Lender;
(B)    reduce the principal amount of any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce any fees payable hereunder, without the written consent of each Lender affected thereby (except (x) in connection with the waiver of applicability of any post-default increase in interest rates (which waiver shall be effective with the consent of the Required Lenders) and (y) that any amendment or modification of defined terms used in the financial covenants in this Agreement shall not constitute a reduction in the rate of interest or fees for purposes of this clause (B))
(C)    postpone the date fixed for any payment (excluding any mandatory prepayments) of any principal of, or interest on, any Loan or LC Disbursement or interest thereon or any fees hereunder or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date for the termination or reduction of any Commitment, without the written consent of each Lender directly and adversely affected thereby;
(D)    change Section 2.21(b) or (c) in a manner that would alter the pro rata sharing of payments required thereby or change the provisions of Section 8.2 , without the written consent of each Lender;
(E)    change any of the provisions of this Section 11.2 or the definition of “ Required Lenders ” or any other provision hereof specifying the number or percentage of Lenders which are required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the consent of each Lender;
(F)    release the Borrower without the consent of each Lender, or, release all or substantially all of the Guarantors or limit the liability of all or substantially all of the Guarantors under any Guaranty, without the written consent of each Lender, except to the extent such release is expressly permitted under the terms of this Agreement; or
(G)    release all or substantially all Collateral (if any) securing any of the Obligations, without the written consent of each Lender, except to the extent such release is expressly permitted under the terms of this Agreement, or agree to subordinate any Lien in such Collateral to any other creditor of the Borrower or any Subsidiary;
provided further, that no such agreement shall amend, modify or otherwise affect the rights, duties or obligations of the Administrative Agent, the Swingline Lender or the Issuing Bank without the prior written consent of such Person. Notwithstanding anything to the contrary herein, (i) no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Commitment of such Lender may not be increased or extended, and amounts payable to such Lender hereunder may not be permanently reduced without the consent of such Lender (other than reductions in fees and interest in which such reduction does not disproportionately affect such Lender); (ii) this Agreement may be amended and restated without the consent of any Lender (but with the consent of the Borrower and the Administrative Agent) if, upon giving effect to such amendment and restatement, such Lender shall no longer be a party to this Agreement (as so amended and restated), the Commitments of such Lender shall have terminated (but

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such Lender shall continue to be entitled to the benefits of Sections 2.18 , 2.19 , 2.20 and 11.3 ), such Lender shall have no other commitment or other obligation hereunder and shall have been paid in full all principal, interest and other amounts owing to it or accrued for its account under this Agreement; (iii) each Lender is entitled to vote as such Lender sees fit on any bankruptcy reorganization plan that affects the Loans, and each Lender acknowledges that the provisions of Section 1126(c) of the Bankruptcy Code of the United States supersedes the unanimous consent provisions set forth herein; and (iv) the Required Lenders shall determine whether or not to allow a Loan Party to use cash collateral in the context of a bankruptcy or insolvency proceeding and such determination shall be binding on all of the Lenders.
Notwithstanding anything to the contrary herein, each Lender hereby irrevocably authorizes the Administrative Agent, on its behalf, and without further consent, to enter into amendments or modifications to this Agreement (including, without limitation, amendments to this Section 11.2 and/or Section 2.21 ) or any of the Loan Documents or to enter into additional Loan Documents as the Administrative Agent reasonably deems appropriate in order to effectuate the terms of any amendment which extends the Maturity Date of any Loans with respect to fewer than all of the Lenders (including any terms therein which provide for higher interest rate and/or fees to be each Lender agreeing to extend its maturity date); provided that such amendment has been approved by the Required Lenders and each Lender required to approve such amendment pursuant to Section 11.2(b)(i)(C) .
Notwithstanding anything to the contrary herein, this Agreement and the other Loan Documents may be amended (or amended and restated), modified or supplemented with the written consent of the Administrative Agent and the Borrower (a) to cure any ambiguity, omission, defect or inconsistency, so long as such amendment, modification or supplement does not adversely affect the rights of any Lender or the Issuing Bank, (b) to add one or more additional credit facilities with respect to Incremental Term Loans to this Agreement and to permit the extensions of credit from time to time outstanding thereunder and the accrued interest and fees in respect thereof to share ratably in the benefits of this Agreement and the other Loan Documents with the Term Loans, as applicable, and the accrued interest and fees in respect thereof and (c) to include appropriately the Lenders holding such credit facilities in any determination of the Required Lenders; provided, that the conditions set forth in Section 2.23 are satisfied.
Section 11.3.     Expenses; Indemnification .
(a)    The Borrower shall pay (i) all reasonable, documented out-of-pocket costs and expenses of the Administrative Agent, the Arrangers and their Affiliates , including the reasonable and documented fees, charges and disbursements of one outside counsel for the Administrative Agent, the Arrangers and their Affiliates, in connection with the syndication of the credit facilities provided for herein, the preparation and administration of the Loan Documents and any amendments, modifications or waivers thereof (whether or not the transactions contemplated in this Agreement or any other Loan Document shall be consummated), including the reasonable and documented fees, charges and disbursements of one outside counsel for the Administrative Agent, the Arrangers and their Affiliates, (ii) all reasonable, documented out-of-pocket expenses incurred by the Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all documented out-of-pocket costs and expenses (including, without limitation, the reasonable and documented fees, charges and disbursements of one outside counsel, the allocated cost of inside counsel and one local counsel in each relevant jurisdiction, and, in the event of any actual or perceived conflict of interest, one additional counsel for each similarly situated group of affected lenders purporting to have a conflict of interest) incurred by the Administrative Agent, the Issuing Bank or any Lender in connection with the enforcement or protection of its rights in connection with this Agreement and the other Loan Documents, including its rights under this Section 11.3 , or in connection with the Loans made or any Letters of Credit issued

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hereunder, including all such documented out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.
(b)    The Borrower shall indemnify the Administrative Agent (and any sub-agent thereof), each Lender and the Issuing Bank, and each Related Party of any of the foregoing Persons (each such Person being called an “ Indemnitee ”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities, penalties and related expenses (including the reasonable and documented fees, charges and disbursements of any counsel for any Indemnitee; provided that, legal counsel for all Indemnitees shall be limited to one primary legal counsel and one local counsel in each relevant jurisdiction, and, in the event of any actual or perceived conflict of interest, one additional counsel for each group of similarly situated Indemnitees purporting to have a conflict of interest), and shall indemnify and hold harmless each Indemnitee from all reasonable and documented fees and time charges and disbursements for attorneys who may be employees of any Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee by any third party or by the Borrower or any other Loan Party arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by the Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or Release of Hazardous Materials on or from any property owned or operated by the Borrower or any of its Subsidiaries, or any actual or alleged Environmental Liability related in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower or any other Loan Party, and regardless of whether any Indemnitee is a party thereto, provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities, penalties or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from (x) the gross negligence or willful misconduct of such Indemnitee, (y) result from a claim brought by the Borrower or any other Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document or (z) disputes solely between or among Indemnitees, other than claims against the Administrative Agent or an Arranger in its capacity or in fulfilling its role as agent or arranger or similar role under the Loan Documents. No Indemnitee shall be liable for any damages arising from the use by others of any information or other materials obtained through Syndtrak or any other Internet or intranet website, except as a result of such Indemnitee’s gross negligence or willful misconduct as determined by a court of competent jurisdiction in a final and nonappealable judgment. This Section 11.3(b) shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.
(c)    To the extent that the Borrower fails to pay any amount required to be paid to the Administrative Agent, the Issuing Bank or the Swingline Lender under clauses (a) or (b) hereof, each Lender severally agrees to pay to the Administrative Agent, the Issuing Bank or the Swingline Lender, as the case may be, such Lender’s Pro Rata Share (determined as of the time that the unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided , that the unreimbursed expense or indemnified payment, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent, the Issuing Bank or the Swingline Lender in its capacity as such.

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(d)    To the extent permitted by applicable Law, and without derogating the Indemnitee’s rights to indemnity under this Section, the Borrower, on the one hand, and the Indemnitees on the other hand, shall not assert, and hereby waives, any claim against any of the others, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to actual or direct damages) arising out of, in connection with or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated therein, any Loan or any Letter of Credit or the use of proceeds thereof.
(e)    All amounts due under this Section 11.3 shall be payable promptly after written demand therefor.
Section 11.4.     Successors and Assigns .
(a)    The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender, and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of paragraph (b) of this Section, (ii) by way of participation in accordance with the provisions of paragraph (d) of this Section or (iii) by way of pledge or assignment of a security interest subject to the restrictions of paragraph (g) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in paragraph (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.
(b)    Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitments, Loans, and other Revolving Credit Exposure at the time owing to it); provided that any such assignment shall be subject to the following conditions:
(i)     Minimum Amounts .
(A)    in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitments, Loans and other Revolving Credit Exposure at the time owing to it or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and
(B)    in any case not described in paragraph (b)(i)(A) of this Section, the aggregate amount of the Commitment (which for this purpose includes Loans and Revolving Credit Exposure outstanding thereunder) or, if the applicable Commitment is not then in effect, the principal outstanding balance of the Loans and Revolving Credit Exposure of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Acceptance, as of the Trade Date) shall not be less than $2,500,000 and in minimum increments of $1,000,000, unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed).

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(ii)     Proportionate Amounts . Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loans, other Revolving Credit Exposure or the Commitments assigned.
(iii)     Required Consents . No consent shall be required for any assignment except to the extent required by paragraph (b)(i)(B) of this Section and, in addition:
(A)    the consent of the Borrower (such consent not to be unreasonably withheld or delayed) shall be required unless (x) an Event of Default has occurred and is continuing at the time of such assignment or (y) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; provided , that, the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within ten (10) Business Days after having received notice thereof;
(B)    the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for (x) assignments to a Person that is not a Lender with a Commitment or an Affiliate of a Lender or an Approved Fund and (y) assignments by Defaulting Lenders; and
(C)    the consent of the Issuing Bank (such consent not to be unreasonably withheld or delayed) shall be required for any assignment that increases the obligation of the assignee to participate in exposure under one or more Letters of Credit (whether or not then outstanding), and the consent of the Swingline Lender (such consent not to be unreasonably withheld or delayed) shall be required for any assignment in respect of the Revolving Commitments.
(iv)     Assignment and Acceptance . The parties to each assignment shall deliver to the Administrative Agent (A) a duly executed Assignment and Acceptance, (B) a processing and recordation fee of $3,500 , (C) an Administrative Questionnaire unless the assignee is already a Lender and (D) the documents required under Section 2.20 if such assignee is a Foreign Lender.
(v)     No Assignment to Certain Persons . No such assignment shall be made to (A) the Borrower or any of the Borrower’s Affiliates or Subsidiaries, (B) any Ineligible Assignee or (C) to any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (C) .
(vi)     No Assignment to Natural Persons . No such assignment shall be made to a natural person.
(vii)     Ineligible Assignees .
(A)    No assignment or participation shall be made to any Person that was an Ineligible Assignee as of the date (the “ Trade Date ”) on which the assigning Lender entered into a binding agreement to sell and assign or participate all or a portion of its rights and obligations under this Agreement to such Person (unless (x) the Borrower has consented to such assignment as contemplated by this Section 11.4 , in which case such Person will not be considered an Ineligible Assignee for the purpose of such assignment or participation). For the avoidance of doubt, with respect to any assignee

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or participant that becomes an Ineligible Assignee after the applicable Trade Date (including as a result of the delivery of a notice pursuant to, and/or the expiration of the notice period referred to in, the definition of “Ineligible Assignee”), such assignee shall not retroactively be considered an Ineligible Assignee. Any assignment in violation of this clause (vii)(A) shall not be void, but the other provisions of this clause (vii) shall apply.
(B)    If any assignment is made to any Ineligible Assignee in violation of clause (A) above, or if any Person becomes an Ineligible Assignee after the applicable Trade Date, the Borrower may, at its sole expense and effort, upon notice to the applicable Ineligible Assignee and the Administrative Agent, (A) terminate any Revolving Commitment of such Ineligible Assignee and repay all obligations of the Borrower owing to such Ineligible Assignee in connection with such Revolving Commitment, (B) in the case of any portion of outstanding Term Loan held by Ineligible Assignees, prepay such portion of the Term Loan by paying the lesser of (x) the principal amount thereof and (y) the amount that such Ineligible Assignee paid to acquire such portion of the Term Loan in each case plus accrued interest, accrued fees and all other amounts (other than principal amounts) payable to it hereunder and under the other Loan Documents and/or (C) require such Ineligible Assignee to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in this Section 11.4 ), all of its interest, rights and obligations under this Agreement and related Loan Documents to an Eligible Assignee that shall assume such obligations at the lesser of (x) the principal amount thereof and (y) the amount that such Ineligible Assignee paid to acquire such interests, rights and obligations, in each case plus accrued interest, accrued fees and all other amounts (other than principal amounts) payable to it hereunder and under the other Loan Documents; provided that (i)  the Borrower shall have paid to the Administrative Agent the assignment fee (if any) specified in Section 11.4(b) , (ii) such assignment does not conflict with applicable Laws and (iii)  in the case of clause (B), the Borrower shall not use the proceeds from any Loans to prepay the portion of the Term Loan held by Ineligible Assignees.
(C)    Notwithstanding anything to the contrary contained in this Agreement, Ineligible Assignees (a) will not (x) have the right to receive information, reports or other materials provided to Lenders by the Borrower, the Administrative Agent or any other Lender, (y) attend or participate in meetings attended by the Lenders and the Administrative Agent, or (z) access any electronic site established for the Lenders or confidential communications from counsel to or financial advisors of the Administrative Agent or the Lenders and (b) (x) for purposes of any consent to any amendment, waiver or modification of, or any action under, and for the purpose of any direction to the Administrative Agent or any Lender to undertake any action (or refrain from taking any action) under this Agreement or any other Loan Document, will be deemed to have consented in the same proportion as the Lenders that are not Ineligible Assignees consented to such matter, and (y) for purposes of voting on any plan of reorganization or plan of liquidation pursuant to any Debtor Relief Laws (“ Plan of Reorganization ”), each Ineligible Assignee party hereto hereby agrees (1) not to vote on such Plan of Reorganization, (2) if such Ineligible Assignee does vote on such Plan of Reorganization notwithstanding the restriction in the foregoing clause (1), such vote will be deemed not to be in good faith and shall be “designated” pursuant to Section 1126(e) of the Bankruptcy Code (or any similar provision in any other Debtor Relief Laws), and such vote shall not be counted in determining whether the

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applicable class has accepted or rejected such Plan of Reorganization in accordance with Section 1126(c) of the Bankruptcy Code (or any similar provision in any other Debtor Relief Laws) and (3) not to contest any request by any party for a determination by the Bankruptcy Court (or other applicable court of competent jurisdiction) effectuating the foregoing clause (2).
(D)    The Administrative Agent shall have the right, and the Borrower hereby expressly authorizes the Administrative Agent, to (a) post Schedule 1.01 and any updates thereto from time to time on the Platform, including that portion of the Platform that is designated for “public side” Lenders and/or (b) provide Schedule 1.01 to each Lender requesting the same.
Subject to acceptance and recording thereof by the Administrative Agent pursuant to paragraph (c) of this Section 11.4 , from and after the effective date specified in each Assignment and Acceptance, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections  2.18 , 2.19 , 2.20 and 11.3 with respect to facts and circumstances occurring prior to the effective date of such assignment. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (d) of this Section 11.4 . If the consent of the Borrower to an assignment is required hereunder (including a consent to an assignment which does not meet the minimum assignment thresholds specified above), the Borrower shall be deemed to have given its consent ten (10) Business Days after the date notice thereof has actually been delivered by the assigning Lender (through the Administrative Agent) to the Borrower, unless such consent is expressly refused by the Borrower prior to such tenth Business Day.
(c)    The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at one of its offices in Atlanta, Georgia a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of (and stated interest on) the Loans and Revolving Credit Exposure owing to, each Lender pursuant to the terms hereof from time to time (the “ Register ”). The entries in the Register shall be conclusive absent manifest error, and the Borrower, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrower and any Lender at any reasonable time and from time to time upon reasonable prior notice.
(d)    Any Lender may at any time, without the consent of, or notice to, the Borrower, the Administrative Agent, the Swingline Lender or the Issuing Bank sell participations to any Person (other than a natural person, the Borrower or any of the Borrower’s Affiliates or Subsidiaries or a Defaulting Lender) (each, a “ Participant ”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent, the Lenders, the Issuing Bank and the

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Swingline Lender shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.
(e)    Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver with respect to the following to the extent affecting such Participant: (i) increase the Commitment of any Lender without the written consent of such Lender, (ii) reduce the principal amount of any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce any fees payable hereunder, without the written consent of each Lender affected thereby, (iii) postpone the date fixed for any payment of any principal of, or interest on, any Loan or LC Disbursement or interest thereon or any fees hereunder or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date for the termination or reduction of any Commitment, without the written consent of each Lender affected thereby, (iv) change Section 2.21(b) or (c) in a manner that would alter the pro rata sharing of payments required thereby, without the written consent of each Lender, (v) change any of the provisions of this Section 11.4 or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders which are required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the consent of each Lender; (vi) release all or substantially all of the Guarantors or limit the liability of all or substantially all of the Guarantors under any Guaranty without the written consent of each Lender except to the extent such release is expressly provided under the terms of this Agreement; or (vii) release all or substantially all Collateral (if any) securing any of the Obligations. The Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.18 , 2.19 , and 2.20 (subject to the requirements and limitations therein, including the requirements under Section 2.20(g) (it being understood that the documentation required under Section 2.20(g) shall be delivered to the participating Lender)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section 11.4 ; provided that such Participant (A) agrees to be subject to the provisions of Sections 2.24 and 2.25 as if it were an assignee under paragraph (b) of this Section 11.4 ; and (B) shall not be entitled to receive any greater payment under Sections 2.18 or 2.20 , with respect to any participation, than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation. Each Lender that sells a participation agrees, at the Borrower’s request and expense, to use reasonable efforts to cooperate with Borrower to effectuate the provision of Section 2.25 with respect to any Participant. To the extent permitted by Law, each Participant also shall be entitled to the benefits of Section 11.7 as though it were a Lender, provided such Participant agrees to be subject to Section 2.21 as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts of (and stated interest on) each Participant’s interest in the Loans or other obligations under the Loan Documents (the “ Participant Register ”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the

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contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.
(f)    Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.
Section 11.5.     Governing Law; Jurisdiction; Consent to Service of Process .
(a)    This Agreement and the other Loan Documents shall be construed in accordance with and be governed by the Law (without giving effect to the conflict of law principles thereof except for Sections 5-1401 and 5-1402 of the New York General Obligations Law) of the State of New York.
(b)    The Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the United States District Court of the Southern District of New York, and of Supreme Court of the State of New York sitting in New York county and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any other Loan Document or the transactions contemplated hereby or thereby, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such District Court or New York state court or, to the extent permitted by applicable Law, such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law. Nothing in this Agreement or any other Loan Document shall affect any right that the Administrative Agent, the Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against the Borrower or its properties in the courts of any jurisdiction.
(c)    Each party to this Agreement irrevocably and unconditionally waives any objection which it may now or hereafter have to the laying of venue of any such suit, action or proceeding described in paragraph (b) of this Section 11.5 and brought in any court referred to in paragraph (b) of this Section 11.5 . Each of the parties hereto irrevocably waives, to the fullest extent permitted by applicable Law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.
(d)    Each party to this Agreement irrevocably consents to the service of process in the manner provided for notices in Section 11.1 . Nothing in this Agreement or in any other Loan Document will affect the right of any party hereto to serve process in any other manner permitted by Law.
Section 11.6.     WAIVER OF JURY TRIAL . EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN

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DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section 11.7.     Right of Setoff . In addition to any rights now or hereafter granted under applicable Law and not by way of limitation of any such rights, each Lender and the Issuing Bank shall have the right, at any time or from time to time upon the occurrence and during the continuance of an Event of Default, without prior notice to the Borrower, any such notice being expressly waived by the Borrower to the extent permitted by applicable Law, to set off and apply against all deposits (general or special, time or demand, provisional or final) of the Borrower at any time held or other obligations at any time owing by such Lender and the Issuing Bank to or for the credit or the account of the Borrower against any and all Obligations held by such Lender or the Issuing Bank, as the case may be, irrespective of whether such Lender or the Issuing Bank shall have made demand hereunder and although such Obligations may be unmatured. Each Lender and the Issuing Bank agree promptly to notify the Administrative Agent and the Borrower after any such set-off and any application made by such Lender and the Issuing Bank, as the case may be; provided , that the failure to give such notice shall not affect the validity of such set-off and application. Each Lender and the Issuing Bank agrees to apply all amounts collected from any such set-off to the Obligations before applying such amounts to any other Indebtedness or other obligations owed by the Borrower and any of its Subsidiaries to such Lender or Issuing Bank. Notwithstanding the provisions of this Section 11.7 , if at any time any Lender, the Issuing Bank or any of their respective Affiliates maintains one or more deposit accounts for the Borrower or any other Loan Party into which Medicare and/or Medicaid receivables are deposited, such Person shall waive the right of setoff set forth herein.
Section 11.8.     Counterparts; Integration . This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by telecopy), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. This Agreement, the Fee Letter, the other Loan Documents, and any separate letter agreement(s) relating to any fees payable to the Administrative Agent and its Affiliates constitute the entire agreement among the parties hereto and thereto and their affiliates regarding the subject matters hereof and thereof and supersede all prior agreements and understandings, oral or written, regarding such subject matters. Delivery of an executed counterpart of a signature page of this Agreement and any other Loan Document by facsimile transmission or by any other electronic imaging means (including .pdf), shall be effective as delivery of a manually executed counterpart of this Agreement or such other Loan Document.
Section 11.9.     Survival . All covenants, agreements, representations and warranties made by any Loan Party herein, in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent, the Issuing Bank or any Lender may have had notice or knowledge of any Default or Event of Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or terminated. The provisions of Sections 2.18 , 2.19 , 2.20 , and 10.3 and Article IX shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any provision hereof. All representations and warranties made herein, in the Loan Documents, in the certificates, reports, notices, and other documents delivered pursuant to this Agreement shall survive the execution and delivery of this Agreement and the other Loan Documents, and the making of the Loans and the issuance of the Letters of Credit.

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Section 11.10.     Severability . Any provision of this Agreement or any other Loan Document held to be illegal, invalid or unenforceable in any jurisdiction, shall, as to such jurisdiction, be ineffective to the extent of such illegality, invalidity or unenforceability without affecting the legality, validity or enforceability of the remaining provisions hereof or thereof; and the illegality, invalidity or unenforceability of a particular provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
Section 11.11.     Confidentiality . Each of the Administrative Agent, the Issuing Bank and the Lenders agrees to take normal and reasonable precautions to maintain the confidentiality of any information relating to the Borrower or any of its Subsidiaries or any of their respective businesses, to the extent designated in writing as confidential and provided to it by the Borrower or any Subsidiary, other than any such information that is available to the Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis prior to disclosure by the Borrower or any of its Subsidiaries, except that such information may be disclosed (i) to any Related Party of the Administrative Agent, the Issuing Bank or any such Lender including without limitation accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such information and instructed to keep such information confidential on substantially the same terms as provided herein), (ii) to the extent required by applicable Laws or regulations or by any subpoena or similar legal process, (iii) to the extent requested by any regulatory agency or authority purporting to have jurisdiction over it (including any self-regulatory authority such as the National Association of Insurance Commissioners), (iv) to the extent that such information becomes publicly available other than as a result of a breach of this Section 11.11 , or which becomes available to the Administrative Agent, the Issuing Bank, any Lender or any Related Party of any of the foregoing on a non-confidential basis from a source other than the Borrower, (v) in connection with the exercise of any remedy hereunder or under any other Loan Documents or any suit, action or proceeding relating to this Agreement or any other Loan Documents or the enforcement of rights hereunder or thereunder, (vii) subject to an agreement containing provisions substantially the same as those of this Section 11.11 , to (A) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement, or (B) any actual or prospective party (or its Related Parties) to any swap or derivative or similar transaction under which payments are to be made by reference to the Borrower and its obligations, this Agreement or payments hereunder, (viii) any rating agency, (ix) the CUSIP Service Bureau or any similar organization, or (x) with the consent of the Borrower. Any Person required to maintain the confidentiality of any information as provided for in this Section 11.11 shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such information as such Person would accord its own confidential information. In the event of any conflict between the terms of this Section and those of any other Contractual Obligation entered into with any Loan Party (whether or not a Loan Document), the terms of this Section shall govern.
Section 11.12.     Interest Rate Limitation . Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which may be treated as interest on such Loan under applicable Law (collectively, the “ Charges ”), shall exceed the maximum lawful rate of interest (the “ Maximum Rate ”) which may be contracted for, charged, taken, received or reserved by a Lender holding such Loan in accordance with applicable Law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section 11.12 shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Rate to the date of repayment (to the extent permitted by applicable Law), shall have been received by such Lender.

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Section 11.13.     Waiver of Effect of Corporate Seal.  Each Loan Party represents and warrants to the Administrative Agent and the Lenders that neither it nor any other Loan Party is required to affix its corporate seal to this Agreement or any other Loan Document pursuant to any Requirement of Law, agrees that this Agreement is delivered by Borrower under seal and waives any shortening of the statute of limitations that may result from not affixing the corporate seal to this Agreement or such other Loan Documents.
Section 11.14.     Patriot Act . Each of the Administrative Agent and each Lender hereby notifies the Loan Parties that pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record information that identifies each Loan Party, which information includes the name and address of such Loan Party and other information that will allow such Lender or the Administrative Agent, as applicable, to identify such Loan Party in accordance with the Patriot Act. Each Loan Party shall, and shall cause each of its Subsidiaries to, provide to the extent commercially reasonable, such information and take such other actions as are reasonably requested by the Administrative Agent or any Lender in order to assist the Administrative Agent and the Lenders in maintaining compliance with the Patriot Act.
Section 11.15.     No Advisory or Fiduciary Responsibility . In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), Borrower and each other Loan Party acknowledges and agrees and acknowledges its Affiliates’ understanding that that:  (i) (A) the services regarding this Agreement  provided by the Administrative Agent, the Arrangers and/or the Lenders are arm’s-length commercial transactions between  Borrower, each other Loan Party and their respective Affiliates, on the one hand, and the Administrative Agent, the Arrangers and the Lenders, on the other hand, (B) each of Borrower and the other Loan Parties have consulted their own legal, accounting, regulatory and tax advisors to the extent they have deemed appropriate, and (C) Borrower and each other Loan Party is capable of evaluating and understanding, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and  by the other Loan Documents; (ii) (A) each of the Administrative Agent, the Arrangers and the Lenders  is and has been acting solely as a principal and,  except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary, for Borrower, any other Loan Party, or any of their respective Affiliates, or any other Person and (B) none of the Administrative Agent, the Arrangers nor any Lender has any obligation to Borrower, any other Loan Party or any of their Affiliates  with respect to the transaction contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (iii)  the Administrative Agent, the Arrangers the Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of Borrower, the other Loan Parties and their respective Affiliates, and each of the Administrative Agent, the Arrangers and the Lenders has no obligation to disclose any of such interests to  Borrower , any other Loan Party of any of their respective Affiliates.  To the fullest extent permitted by Law, each of Borrower and the other Loan Parties hereby waive and release, any claims that it may have against the Administrative Agent, the Arrangers and each Lender with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.
Section 11.16.     Electronic Execution of Assignments and Certain Other Documents . The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Acceptance or in any amendment or other modification hereof (including waivers and consents) shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable Law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

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Section 11.17.     Acknowledgement and Consent to Bail-In of EEA Financial Institutions . Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Lender that is an EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by (a) the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any Lender that is an EEA Financial Institution; and (b) the effects of any Bail-In Action on any such liability, including, if applicable: (i) a reduction in full or in part or cancellation of any such liability; (ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or (iii) the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority.
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IN WITNESS WHEREOF , the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

BORROWER:	MALIBU BOATS, LLC,	
as the Borrower

By:     /s/ Wayne Wilson
Name: Wayne Wilson
Title: Chief Financial Officer

PARENT:	MALIBU BOATS HOLDINGS, LLC,	
as the Parent and a Guarantor

By:     /s/ Wayne Wilson     
Name: Wayne Wilson
Title: Chief Financial Officer

GUARANTORS:	MALIBU AUSTRALIAN ACQUISITION CORP.	
By:     /s/ Wayne Wilson     
Name: Wayne Wilson
Title: Secretary and Treasurer

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ADMINISTRATIVE AGENT:        SUNTRUST BANK, as Administrative Agent, as Issuing Bank and as Swingline Lender
By:     /s/ Tesha Winslow     
Name: Tesha Winslow
Title: Director

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LENDERS:                    SUNTRUST BANK
By:     /s/ Tesha Winslow     
Name: Tesha Winslow
Title: Director
FIRST TENNESSEE BANK NATIONAL ASSOCIATION
By:     /s/ R. Andrew Beam     
Name: R. Andrew Beam
Title: Senior Vice President
REGIONS BANK
By:     /s/ Amanda N. Hankins     
Name: Amanda N. Hankins
Title: Vice President
JPMORGAN CHASE BANK
By:     /s/ Jerry C. Greene     
Name: Jerry C. Greene
Title: Executive Director
MUFG UNION BANK, N.A.
By:     /s/ Maria Iarriccio     
Name: Maria Iarriccio
Title: Director
UNITED COMMUNITY BANK
By:     /s/ James A. Boccardo     
Name: James A. Boccardo
Title: Vice President
WELLS FARGO BANK, NATIONAL ASSOCIATION

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By:     /s/ Bryan Hulker     
Name: Bryan Hulker
Title: SVP

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SCHEDULE I
COMMITMENT AMOUNTS

							
Lender	Revolving Commitment	Pro Rata Share of Aggregate Revolving Commitments	Term Loan A Commitment	Pro Rata Share of Aggregate Term Loan A Commitments	Delayed Draw Term Loan Commitment	Pro Rate Share of Aggregate Delayed Draw Term Loan Commitments	
SunTrust Bank	$7,179,487.19	20.512820543%	$11,282,051.28	20.512820509%	$21,538,461.53	20.512820505%	
JP Morgan Chase Bank	$6,282,051.28	17.948717943%	$9,871,794.87	17.948717946%	$18,846,153.85	17.948717952%	
First Tennessee Bank National Association	$5,384,615.38	15.384615371%	$8,461,538.47	15.384615400%	$16,153,846.15	15.384615381%	
Regions Bank	$5,384,615.38	15.384615371%	$8,461,538.47	15.384615400%	$16,153,846.15	15.384615381%	
MUFG Union Bank, N.A.	$4,038,461.54	11.538461543%	$6,346,153.84	11.538461527%	$12,115,384.62	11.538461543%	
Wells Fargo Bank, National Association	$4,038,461.54	11.538461543%	$6,346,153.84	11.538461527%	$12,115,384.62	11.538461543%	
United Community Bank	$2,692,307.69	7.692307686%	$4,230,769.23	7.692307691%	$8,076,923.08	7.692307695%	
TOTAL:	$35,000,000.00	100.000000000%	$55,000,000.00	100.000000000%	$105,000,000.00	100.000000000%	

SCHEDULE 1.01
INELIGIBLE ASSIGNEES

1.	Ambassador Enterprises	
		
2.	Platinum Equity	
		
3.	Wayzata Investment Partners	
		
4.	Brunswick Corporation (NYSE: BC)	
		
5.	Attwood Corporation     (DE)	
		
6.	Boston Whaler, Inc.    (DE)	
		
7.	Brunswick Companias de Mexico, S.A. de C.V. (Mexico)	
		
8.	Brunswick Family Boat Co. Inc. (DE)	
		
9.	Brunswick Financial Services Corporation (DE)	
		
10.	Brunswick Fitness GmbH (Germany)	
		
11.	Brunswick Hungary Limited Liability Company (Hungary)	
		
12.	Brunswick Industria de Embarcacoes do Brasil Ltda. (Brazil)	
		
13.	Brunswick International Group S.a.r.l. (Luxembourg)	
		
14.	Brunswick International Limited (DE)	
		
15.	Brunswick Leisure Boat Company, LLC (IN)	
		
16.	Brunswick Luxembourg Finance S.a.r.l. (Luxembourg)	
		
17.	Brunswick Marine in EMEA, Inc. (DE)	
		
18.	Brunswick Marine in Finland and the Baltic States Oy (Finland)	
		
19.	Brunswick Marine in France S.A. (France)	
		
20.	Brunswick Marine in Italia S.p.A. (Italy)	
		
21.	Brunswick Marine in Poland Sp. z o.o (Poland)	
		
22.	Brunswick Singapore Holdings Pte. Ltd. (Singapore)	
		
23.	Brunswick Trading (Suzhou) Co., Ltd. (China)	
		
24.	Cybex International, Inc. (NY)	
		
25.	Indoor Cycling Group GmbH (Germany)	
		
26.	Land 'N' Sea Corporation (DE)	
		
27.	Land 'N' Sea Distributing, Inc. d/b/a Kellogg Marine Supply, Bell Recreational Products Group (DE)	
		
28.	Life Fitness Asia Pacific Limited (Hong Kong)	
		
29.	Life Fitness (Atlantic) B.V. (Netherlands)	

Schedule 1.01

		
30.	Life Fitness Europe GmbH (Germany)	
		
31.	Life Fitness, Inc. (DE)	
		
32.	Life Fitness International Sales, Inc. (DE)	
		
33.	Life Fitness (U.K.) Limited (England and Wales)	
		
34.	Lund Boat Company     (DE)	
		
35.	Marine Power International Limited (DE)	
		
36.	Mercury Marine do Brasil Industria e Comercio Ltda (Brazil)	
		
37.	Mercury Marine Limited / Mercury Marine Limitee     (Canada)	
		
38.	Mercury Marine Singapore Pte Ltd (Singapore)	
		
39.	Mercury Marine Technology Suzhou Company Ltd. (China)	
		
40.	Munster Simms Engineering Limited (Northern Ireland)	
		
41.	Normalduns B.V. (Netherlands)	
		
42.	Princecraft Boats Inc. / Bateaux Princecraft Inc. (Canada)	
		
43.	Protokon Manufacturing Developing and Trading (Hungary) Limited Liability Company	
		
44.	PSW (NI) Limited (Northern Ireland)	
		
45.	Sea Ray Boats, Inc. d/b/a Meridian Yachts, Sea Ray Boats (FL)	
		
46.	MCBC Holdings, Inc (Nasdaq: MCFT, MasterCraft)	
		
47.	MasterCraft Boat Company, LLC (DE)	
		
48.	MasterCraft Services, Inc. (TN)	
		
49.	MCBC Hydra Boats, LLC (TN)	
		
50.	MasterCraft Parts Limited (UK)	
		
51.	MasterCraft International Sales Administration, Inc. (DE)	
		
52.	Correct Craft, Inc (Nautique, Centurion and Ski Supreme)	
		
53.	Correct Craft Holding Company	
		
54.	Nautique Boat Company	
		
55.	Skiers Choice (Supra and Moomba)	
		
56.	Boat Holdings, LLC (Bennington)	

Schedule 1.01

SCHEDULE 4.5
Environmental Matters
None.

Schedule 4.5

SCHEDULE 4.11(d)
REAL ESTATE
Malibu Boats, LLC owns approximately 16 acres of land located at the southeast corner of Natalie Blvd. and Jaime Drive in Loudon, Tennessee.
Malibu Boats, LLC owns approximately 5.4 acres of land located at the northeast corner of Natalie Blvd. and Kimberly Way in Loudon, Tennessee.
Malibu Boats, LLC leases real estate at the following locations:

•	One Malibu Court, Merced, California 95340	
		
•	5075 Kimberly Way, Loudon, Tennessee 37774	
		
•	155 Natalie Boulevard, Loudon, Tennessee 37774	

Schedule 4.11(d)

SCHEDULE 4.18
MATERIAL AGREEMENTS

1.	The Existing Master Lease	
		
2.	Employment Agreement, entered into February 5, 2014, by and between the Pubco and Jack Springer	
		
3.	Employment Agreement, entered into February 5, 2014, by and between the Pubco and Wayne Wilson	
		
4.	Employment Agreement, entered into February 5, 2014, by and between the Pubco and Ritchie Anderson	
		
5.	Amended and Restated Vendor Agreement, dated August 4, 2006, by and between GE Commercial Distribution Finance Corporation and the Borrower, as amended to the date hereof	
		
6.	Special Supply Agreement, dated as of February 5, 2016, by and between the Borrower and Pleasurecraft Marine Engine Co.	
		
7.	Special Supply Agreement, dated as of August 29, 2016, by and between the Borrower and Indmar Products Co., Inc.	

Schedule 4.18

SCHEDULE 7.1
Existing Indebtedness

1.	Indebtedness under the Existing Credit Agreement which will be repaid in full on the Closing Date.	

Schedule 7.1

SCHEDULE 7.2
Existing Liens

1.	Uniform commercial code financing statement No. 20152544418, filed on June 15, 2015, naming Malibu Boats, LLC as Debtor and BASF Corporation as Secured Party, as amended by the UCC-3 amendment filed on May 31, 2017.	

Schedule 7.2

SCHEDULE 7.4
EXISTING INVESTMENTS

1.	Certificate No. 36 representing 1,000 shares of voting common stock of Independent Boat Builders, Inc. issued in favor of Malibu Boats, LLC.	
		
2.	Certificate Nos. 4, 5 and 6 representing, collectively, 100 shares of voting common stock of Malibu Boats Pty Limited. issued in favor of Malibu Australia Acquisition Corporation.	

Schedule 7.4

  Exhibit 2.3

[FORM OF] NOTICE OF REVOLVING BORROWING
[Date]
SunTrust Bank
3333 Peachtree Rd., 7 th Floor
Mail Code - GA-ATL-0244
Atlanta, Georgia 30326
Attention: Henry Spark
Facsimile: (404) 439-7390

To Whom It May Concern:
Reference is made to the Second Amended and Restated Credit Agreement dated as of June 28, 2017 (as amended, modified, supplemented, increased and extended from time to time, the “ Credit Agreement ”), among Malibu Boats, LLC, as Borrower, Malibu Boats Holdings, LLC, as Parent, the other Guarantors identified therein, the Lenders identified therein, and SunTrust Bank, as Administrative Agent, Issuing Bank and Swingline Lender. Capitalized terms used herein but not otherwise defined herein shall have the meanings provided in the Credit Agreement. This notice constitutes a Notice of Revolving Borrowing. The Borrower hereby requests a Revolving Borrowing under the Credit Agreement, and in connection therewith such Borrower specifies the following information with respect to the Revolving Borrowing requested hereby:
(A)    Aggregate principal amount of Revolving Borrowing Not less than $500,000 or a larger multiple of $100,000 for Eurodollar Borrowings, and not less than $100,000 or a larger multiple of $100,000 for Base Rate Borrowings.:
(B)    Date of Revolving Borrowing (which is a Business Day):
(C)    Type of Revolving Loans comprising such Borrowing Base Rate Borrowing, Eurodollar Borrowing or a combination thereof.:
(D)    [For Eurodollar Borrowings only] Interest Period Which must comply with the definition of “Interest Period” and end not later than the Revolving Commitment Termination Date.:
(E)    Location and number of such Borrower’s account to which proceeds of such Revolving Borrowing are to be disbursed:

[SIGNATURE ON FOLLOWING PAGE]

134

The Borrower hereby represents and warrants that the conditions specified in Section 3.2(a) and (b) of the Credit Agreement are satisfied.
Very truly yours,    
Malibu Boats, LLC,
a Delaware limited liability company

By:     
Name:                            
Title:    

 

135

Exhibit 2.4
[FORM OF] NOTICE OF SWINGLINE BORROWING
[Date]
SunTrust Bank
3333 Peachtree Rd., 7 th Floor
Mail Code - GA-ATL-0244
Atlanta, Georgia 30326
Attention: Henry Spark
Facsimile: (404) 439-7390

To Whom It May Concern:
Reference is made to the Second Amended and Restated Credit Agreement dated as of June 28, 2017 (as amended, modified, supplemented, increased and extended from time to time, the “ Credit Agreement ”), among Malibu Boats, LLC, as Borrower, Malibu Boats Holdings, LLC, as Parent, the other Guarantors identified therein, the Lenders identified therein, and SunTrust Bank, as Administrative Agent, Issuing Bank and Swingline Lender. Capitalized terms used herein but not otherwise defined herein shall have the meanings provided in the Credit Agreement. This notice constitutes a Notice of Swingline Borrowing. The Borrower hereby requests a Swingline Borrowing under the Credit Agreement, and in connection therewith the Borrower specifies the following information with respect to the Swingline Borrowing requested hereby:
(A)    Aggregate principal amount of Swingline Loan Not less than $100,000 or a larger multiple of $50,000.:
(B)    Date of Swingline Loan (which is a Business Day):
(C)    Account of the Borrower to which the proceeds of such Swingline Loan should be credited:    

[SIGNATURE ON FOLLOWING PAGE]

136

The Borrower hereby represents and warrants that the conditions specified in Section 3.2(a) and (b) of the Credit Agreement are satisfied.
Very truly yours,
Malibu Boats, LLC,
a Delaware limited liability company

By:     
Name:                            
Title:    

137

Exhibit 2.5
[FORM OF] NOTICE OF DELAYED DRAW TERM LOAN BORROWING
[Date]
SunTrust Bank
3333 Peachtree Rd., 7 th Floor
Mail Code - GA-ATL-0244
Atlanta, Georgia 30326
Attention: Henry Spark
Facsimile: (404) 439-7390

To Whom It May Concern:
Reference is made to the Second Amended and Restated Credit Agreement dated as of June 28, 2017 (as amended, modified, supplemented, increased and extended from time to time, the “ Credit Agreement ”), among Malibu Boats, LLC, as Borrower, Malibu Boats Holdings, LLC, as Parent, the other Guarantors identified therein, the Lenders identified therein, and SunTrust Bank, as Administrative Agent, Issuing Bank and Swingline Lender. Capitalized terms used herein but not otherwise defined herein shall have the meanings provided in the Credit Agreement. This notice constitutes a Notice of Delayed Draw Term Loan Borrowing. The Borrower hereby requests a Delayed Draw Term Loan Borrowing under the Credit Agreement, and in connection therewith the Borrower specifies the following information with respect to the Delayed Draw Term Loan Borrowing requested hereby:
(A)    Aggregate principal amount of Delayed Draw Term Loan Not less than $1,000,000 or a larger multiple of $500,000.:
(B)    Date of Delayed Draw Term Loan (which is a Business Day):
(C)    Type of Delayed Draw Term Loan comprising such Borrowing Base Rate Borrowing, Eurodollar Borrowing or a combination thereof.:
(D)    [For Eurodollar Borrowings only] Interest Period:
(E)    Account of the Borrower to which the proceeds of such Delayed Draw Term Loan should be credited:    

[SIGNATURE ON FOLLOWING PAGE]

138

The Borrower hereby represents and warrants that the conditions specified in Section 3.2(a) and (b) of the Credit Agreement are satisfied.
Very truly yours,
Malibu Boats, LLC,
a Delaware limited liability company

By:     
Name:    
Title:    

139

Exhibit 2.7

[Form of] Notice of Continuation/Conversion

[Date]
SunTrust Bank
3333 Peachtree Rd., 7 th Floor
Mail Code - GA-ATL-0244
Atlanta, Georgia 30326
Attention: Henry Spark
Facsimile: (404) 439-7390

To Whom It May Concern:
Reference is made to the Second Amended and Restated Credit Agreement dated as of June 28, 2017 (as amended, modified, supplemented, increased and extended from time to time, the “ Credit Agreement ”), among Malibu Boats, LLC, as Borrower, Malibu Boats Holdings, LLC, as Parent, the other Guarantors identified therein, the Lenders identified therein, and SunTrust Bank, as Administrative Agent, Issuing Bank and Swingline Lender. Capitalized terms used herein but not otherwise defined herein shall have the meanings provided in the Credit Agreement. This notice constitutes a Notice of Continuation/Conversion. The Borrower hereby requests a continuation or conversion under the Credit Agreement, and in connection therewith such Borrower specifies the following information with respect to the continuation or conversion requested hereby:
(A)    Aggregate principal amount of the Borrowing to be continued or converted Not less than $500,000 or a larger multiple of $100,000 for Eurodollar Borrowings, and not less than $100,000 or a larger multiple of $100,000 for Base Rate Borrowings.:
(B)    Date of continuation or conversion (which is a Business Day):
(C)    Type of Loans comprising such Borrowing Base Rate Borrowing or Eurodollar Borrowing.:
(D)    [For Eurodollar Borrowings only] Interest Period Which must comply with the definition of “Interest Period” and, in the case of a Revolving Borrowing, end not later than the Revolving Commitment Termination Date.:
    
[SIGNATURE ON FOLLOWING PAGE]

140

The Borrower has executed and delivered this notice as of the date first written above.
Very truly yours,
Malibu Boats, LLC,
a Delaware limited liability company

By:     
Name:    
Title:    

141

Exhibit 2.10

[FORM OF] NOTE

__________, ____

FOR VALUE RECEIVED, Malibu Boats, LLC, a Delaware limited liability company (the “ Borrower ”), hereby promises to pay to _____________________ or registered assigns (the “ Lender ”), in accordance with the provisions of the Credit Agreement (as hereinafter defined), the principal amount of each Loan from time to time made by the Lender to the Borrower under the Second Amended and Restated Credit Agreement (as amended, modified, supplemented, increased and extended from time to time, the “ Credit Agreement ”) dated as of June 28, 2017 among the Borrower, the Parent, the other Guarantors identified therein, the Lenders identified therein and SunTrust Bank, as Administrative Agent. Capitalized terms used herein and not defined herein shall have the meanings assigned to such terms in the Credit Agreement.

The Borrower promises to pay interest on the unpaid principal amount of each Loan from the date of such Loan until such principal amount is paid in full, at such interest rates and at such times as provided in the Credit Agreement. All payments of principal and interest shall be made to the Administrative Agent for the account of the Lender in Dollars in immediately available funds at the Payment Office. If any amount is not paid in full when due hereunder, such unpaid amount shall bear interest, to be paid upon demand, from the due date thereof until the date of actual payment (and before as well as after judgment) computed at the per annum rate set forth in the Credit Agreement.

This Note is one of the Notes referred to in the Credit Agreement, is entitled to the benefits thereof and may be prepaid in whole or in part subject to the terms and conditions provided therein. Upon the occurrence and continuation of one or more of the Events of Default, all amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable all as provided in the Credit Agreement. Loans made by the Lender shall be evidenced by one or more loan accounts or records maintained by the Lender in the ordinary course of business. The Lender may also attach schedules to this Note and endorse thereon the date, amount and maturity of its Loans and payments with respect thereto.

The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice of protest, demand, dishonor and non-payment of this Note.

[This Note amends and restates the existing Note dated as of April 2, 2015 by the Borrower in favor of Lender (the “ Original Note ”). This Note renews and continues the Original Note without any novation, discharge or satisfaction of the underlying indebtedness or any collateral security therefor, all of which indebtedness and collateral security remain outstanding under the Credit Agreement and this Note. Notwithstanding anything herein to the contrary, interest and other obligations under the Original Note accrued and payable prior to the date of amendment and restatement hereof, and interest and other obligations under this Note accrued and payable on or after the date of amendment and restatement hereof shall be due and payable in accordance with the terms of the Credit Agreement.] Include for any Lender that received a Note in connection with the Existing Credit Agreement.

THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF) OF THE STATE OF NEW YORK.

[SIGNATURE ON FOLLOWING PAGE]

142

IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed by its duly authorized officer as of the day and year first above written.

Malibu Boats, LLC,
a Delaware limited liability company

By:     
Name:    
Title:    

143

EXHIBIT 2.20-1

[Form of]
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Second Amended and Restated Credit Agreement (as amended, modified, supplemented, increased and extended from time to time, the “ Credit Agreement ”) dated as of June 28, 2017 among the Borrower, the Parent, the other Guarantors identified therein, the Lenders identified therein and SunTrust Bank, as Administrative Agent.
Pursuant to the provisions of Section 2.20(g) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.
The undersigned has furnished the Administrative Agent and the Borrower with a certificate of its non-U.S. Person status on IRS Form W-8BEN, or W-8BEN-E, as applicable. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

		
[NAME OF LENDER]	
By: _______________________	
 	Name: ________________________	
 	Title: ________________________	

Date: ________ __, 20[ ]

144

EXHIBIT 2.20-2

[Form of]
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Second Amended and Restated Credit Agreement (as amended, modified, supplemented, increased and extended from time to time, the “ Credit Agreement ”) dated as of June 28, 2017 among the Borrower, the Parent, the other Guarantors identified therein, the Lenders identified therein and SunTrust Bank, as Administrative Agent.
Pursuant to the provisions of Section 2.20(g) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.
The undersigned has furnished its participating Lender with a certificate of its non-U.S. Person status on IRS Form W-8BEN or W-8BEN-E, as applicable. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender in writing, and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

		
[NAME OF PARTICIPANT]	
By: _______________________	
 	Name: ________________________	
 	Title: ________________________	

Date: ________ __, 20[ ]

145

EXHIBIT 2.20-3

[Form of]
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Second Amended and Restated Credit Agreement (as amended, modified, supplemented, increased and extended from time to time, the “ Credit Agreement ”) dated as of June 28, 2017 among the Borrower, the Parent, the other Guarantors identified therein, the Lenders identified therein and SunTrust Bank, as Administrative Agent.
Pursuant to the provisions of Section 2.20(g) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such participation, (iii) with respect such participation, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.
The undersigned has furnished its participating Lender with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or W-8BEN-E, as applicable, or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or W-8BEN-E, as applicable, from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

		
[NAME OF PARTICIPANT]	
By: _______________________	
 	Name: ________________________	
 	Title: ________________________	

Date: ________ __, 20[ ]

146

EXHIBIT 2.20-4

[Form of]
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Second Amended and Restated Credit Agreement (as amended, modified, supplemented, increased and extended from time to time, the “ Credit Agreement ”) dated as of June 28, 2017 among the Borrower, the Parent, the other Guarantors identified therein, the Lenders identified therein and SunTrust Bank, as Administrative Agent.
Pursuant to the provisions of Section 2.20(g) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit Agreement or any other Loan Document, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.
The undersigned has furnished the Administrative Agent and the Borrower with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or W-8BEN-E, as applicable, or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or W-8BEN-E, as applicable, from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

		
[NAME OF LENDER]	
By: _______________________	
 	Name: ________________________	
 	Title: ________________________	

Date: ________ __, 20[ ]

147

Exhibit 5.1

[FORM OF] COMPLIANCE CERTIFICATE

In connection with the terms of that certain Second Amended and Restated Credit Agreement, dated as of June 28, 2017 (as amended, modified, supplemented, increased and extended from time to time, the “ Credit Agreement ”), among Malibu Boats, LLC, a Delaware limited liability company (the “ Borrower ”), Malibu Boats Holdings, LLC, a Delaware limited liability company (the “ Parent ”), the other Guarantors identified therein, the Lenders identified therein and SunTrust Bank, as Administrative Agent, Issuing Bank and Swingline Lender, the undersigned certifies that the following information is true and correct, in all material respects, as of the date of this Compliance Certificate for the Fiscal [Quarter][Year] ended ____________, 20__:
Capitalized terms used in this Compliance Certificate but not otherwise defined herein shall have the same meanings provided in the Credit Agreement.
[ Use the following paragraph 1 for fiscal year-end financial statements. ]
1.     Attached hereto as Schedule 1 are (i) internally prepared financial statements for the Parent and its Subsidiaries required by Section 5.1(a) of the Credit Agreement for the Fiscal Year ending [_______] , (ii) the audited annual financial statements of PubCo and its Subsidiaries required by Section 5.1(a) of the Credit Agreement for the Fiscal Year ending [_______] together with the audit report of an independent public accountant of nationally recognized standing required by such section and (iii) a reconciliation of the financial statements referred to in clause (i) above to the financial statements referred to in clause (ii) above.
[ Use the following paragraph 1 for fiscal quarter-end financial statements. ]
1.    Attached hereto as Schedule 1 are the unaudited financial statements required by Section 5.1(b) of the Credit Agreement for the Fiscal Quarter ending [___________, ___] .
[ Use the following paragraphs as applicable. ]
2.    [No][A] Default or Event of Default has occurred and is continuing. [ If a Default or Event of Default, then specify the details thereof and the action which the Borrower has taken or proposes to take. ]
3.    Set forth on Schedule 2 are detailed calculations demonstrating compliance with the financial covenants set forth in Article VI of the Credit Agreement.
4.    There has been [no][a] change in the identity of the Loan Parties since [_________, ___] For the first Compliance Certificate delivered under the Credit Agreement, insert the Closing Date. For all subsequent Compliance Certificates delivered under the Credit Agreement, insert the date of the most recent Fiscal Year or Fiscal Quarter, as the case may be.. [ If any change in the identity of the Loan Parties has occurred, please specify such change. ]
5.    There has been [no][a] change in GAAP or the application thereof since [___________, ___] 8 . [ If any change in GAAP has occurred, please specify the effect of such change on the financial statements accompanying this certificate. ]
[SIGNATURE ON FOLLOWING PAGE]

148

The foregoing is true and correct, in all material respects, as of the date hereof.
Dated as of _____________, ____.

Malibu Boats, LLC,
a Delaware limited liability company

By:     
Name:    
Title:    

149

Schedule 2

1.	Consolidated Leverage Ratio	
(a)    Consolidated Total Debt of the Parent
and its Subsidiaries minus unrestricted
cash and Permitted Investments in an
aggregate amount up to $20,000,000:             $        

(b)    Consolidated EBITDA of the Parent
and its Subsidiaries:            
        
(i)    Consolidated Net Income:            $____________
To the extent deducted in determining Consolidated Net
Income for such period, and without duplication:
(ii)    Consolidated Interest Expense:            $____________

(iii)    income and withholding tax expense
determined on a consolidated basis in
accordance with GAAP:                $____________
        
(iv)    depreciation and amortization
determined on a consolidated basis in
accordance with GAAP:                $        

(v)    fees and expenses paid in connection
with the execution, delivery and the
performance by the Loan Parties of the
Loan Documents and fees and expenses
incurred in connection with the issuance,
payment, amendment or refinancing
of Indebtedness permitted under
the Loan Documents:                $        
                
(vi)    fees and expenses incurred in connection
with the Existing Credit Agreement:        $        

(vii)    management fees and board expenses
and other payments made to PubCo in
accordance with Section 7.7(e) of the
Credit Agreement:                $____________

(viii)    expenses and charges related to the
Master Craft or Marine Power litigation
and the Brunswick litigation, in an
aggregate amount not to exceed
$7,500,000 for periods after the
Closing Date:                    $        

(ix)    fees and expenses associated with (i)

150

the Project Sapphire Acquisition,
in an aggregate amount not to exceed
$3,500,000, (ii) other Investments (including
Acquisitions), whether or not such Investment
is consummated, in an aggregate amount not
to exceed $2,000,000 in any Fiscal Year, and
(iii) startup costs associated with the
Borrower’s engine manufacturing initiative in
an aggregate amount not to exceed $4,500,000
in any Fiscal Year:                $        

(x)    fees and expenses related to public offerings
of PubCo in an aggregate amount not to
exceed $1,500,000 in any Fiscal Year        $        

(xi)    all nonrecurring cash expenses and charges
up to $1,500,000 in any Fiscal Year        $        

(xii)    effects of adjustments in any line item in
the consolidated financial statements of the
Parent and its Subsidiaries resulting from the
application of purchase accounting (including
any step-ups with respect to re-valuing assets
and liabilities) in relation to any Investments
(including Acquisitions) and any investment,
acquisition, merger or consolidation or the
depreciation, amortization or write-off of
any amounts thereof, including the Project
Sapphire Acquisition:                $        

(xiii)    other non‑cash charges (including non-cash
Equity compensation charges):            $        

(xiv)    Consolidated EBITDA:
[sum of (i) + (ii) + (iii) + (iv) + (v) +
(vi) + (vii) + (viii) + (ix) + (x) + (xi) +
(xii) + (xiii) above] Pro forma credit shall be given for the Consolidated EBITDA (adjusted as provided in the Credit Agreement) of a Person that is acquired in a Permitted Acquisition as if owned on the first day of the applicable period, taking into account, to the extent approved by the Administrative Agent in the exercise of its reasonable discretion, factually supportable and identifiable cost savings, expenses and other customary adjustments directly attributable to such acquisitions.:                $        

(c)    Consolidated Leverage Ratio        
[(a)/(b)(xiv)]                        __________:1.0

2.	Consolidated Fixed Charge Coverage Ratio	
(a)    (i)    Consolidated EBITDA

151

(1(b)(xiv) above):                $___________

(ii)    Unfinanced Cash Capital Expenditures:        $___________

(iii)    cash income Taxes (to the extent added
back to Consolidated EBITDA):            $___________

(iv)    cash dividends and distributions by
Parent (other than (x) the Share Repurchase
Payments and (y) the tax distributions,
dividends and other payments paid to
the members of the Parent in connection
with the Existing Credit Agreement):        $___________

(v)    payments made to PubCo in accordance
with Section 7.7(e) during such period (to
the extent included in the calculation of
Consolidated EBITDA):                $___________

(vi)    Sum of (i) - (ii) - (iii) - (iv) - (v):        $____________

(b)    Consolidated Fixed Charges Consolidated Fixed Charges shall not include any fees and expenses payable by the Loan Parties in connection with the execution and delivery of the Loan Documents or the repayment of any amounts due or outstanding under or in respect of, and the termination of, the Existing Credit Agreement.                

(i)    Consolidated Interest Expense paid in cash
for such period:                    $____________

(ii)    scheduled principal payments made on
Consolidated Total Debt for such period:    $____________

(iii)    Consolidated Fixed Charges
[sum of (i) + (ii) above]    :            $        

(c)    Consolidated Fixed Charge Coverage Ratio        
[(a)(vi)/(b)(iii)]:                        __________:1.0

152

Exhibit 5.13
[FORM OF] JOINDER AGREEMENT
THIS JOINDER AGREEMENT (this “ Agreement ”) dated as of __________, ____, is by and between __________, a __________ (the “ New Subsidiary ”), and SunTrust Bank, in its capacity as Administrative Agent under the Second Amended and Restated Credit Agreement dated as of June 28, 2017 (as amended, modified, supplemented, increased and extended from time to time, the “ Credit Agreement ”) by and among Malibu Boats, LLC, a Delaware limited liability company (the “ Borrower ”), Malibu Boats Holdings, LLC, a Delaware limited liability company (the “ Parent ”), the other Guarantors identified therein, the Lenders identified therein and SunTrust Bank, as Administrative Agent. Capitalized terms used herein and not defined herein shall have the meanings assigned to such terms in the Credit Agreement.

The Loan Parties are required by Section 5.13(a) of the Credit Agreement to cause the New Subsidiary to become a “Guarantor”. Accordingly, the New Subsidiary hereby agrees with the Administrative Agent as follows:

1.    The New Subsidiary hereby acknowledges, agrees and confirms that, by its execution of this Agreement, the New Subsidiary will be deemed to be a party to the Credit Agreement and a “Guarantor” for all purposes of the Credit Agreement and shall have all of the obligations of a Guarantor thereunder as if it had executed the Credit Agreement. The New Subsidiary hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions applicable to the Guarantors contained in the Credit Agreement. Without limiting the generality of the foregoing terms of this paragraph 1 , the New Subsidiary hereby, jointly and severally together with the other Guarantors, guarantees to the Administrative Agent, each Lender, each Affiliate of a Lender that enters into Bank Products or Hedging Transactions with a Borrower or any Subsidiary, and each other holder of the Obligations, as provided in Article X of the Credit Agreement, as primary obligor and not as surety, the prompt payment of the Obligations in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration or otherwise) strictly in accordance with the terms thereof.

2.    The New Subsidiary hereby acknowledges, agrees and confirms that, by its execution of this Agreement, such New Subsidiary will be deemed to be a party to the Security Agreement and a “Debtor” for all purposes of the Security Agreement, and shall have all the obligations of a Debtor thereunder as if it had executed the Security Agreement.  The New Subsidiary hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions contained in the Security Agreement.  Without limiting the generality of the foregoing terms of this paragraph 2 , to secure the prompt payment and performance in full when due, whether at stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise, of the Indebtedness (as defined in Section 2 of the Security Agreement), the New Subsidiary hereby grants to the Administrative Agent, for the benefit of the holders of the Secured Obligations, a continuing security interest in, and a right of set off against any and all right, title and interest of the Subsidiary in and to the Collateral (as such term is defined in Section 1 of the Security Agreement) of such New Subsidiary.

3.    The New Subsidiary hereby represents and warrants to the Administrative Agent that:

(i)    Set forth on Schedule 1 is a list of all real property located in the United States that is owned or leased by the New Subsidiary as of the date hereof.

(ii)    Set forth on Schedule 2 is the chief executive office, U.S. tax payer identification number and organizational identification number of the New Subsidiary as of the date hereof.

(iii)    The exact legal name and state of organization of the New Subsidiary is as set forth on the signature pages hereto.

153

(iv)    Except as set forth on Schedule 3 , the New Subsidiary has not during the five years preceding the date hereof (A) changed its legal name, (B) changed its state of formation, or (C) been party to a merger, consolidation or other change in structure.

4.    The address of the New Subsidiary for purposes of all notices and other communications is the address set forth for the Borrower in Section 11.1 of the Credit Agreement.

5.    The New Subsidiary hereby waives acceptance by the Administrative Agent and the Lenders of the guaranty by the New Subsidiary under Article X of the Credit Agreement.

6.    This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by telecopy), and all of said counterparts taken together shall be deemed to constitute one and the same instrument.

7.    This Agreement shall be construed in accordance with and be governed by the law (without giving effect to the conflict of law principles thereof) of the state of New York.

IN WITNESS WHEREOF, the New Subsidiary has caused this Agreement to be duly executed by its authorized officers, and the Administrative Agent, for the benefit of the Lenders, has caused the same to be accepted by its authorized officer, as of the day and year first above written.
    
[NEW SUBSIDIARY]

By:                    
Name:
Title:

Acknowledged and accepted:        
    
SUNTRUST BANK, as Administrative Agent

By:                                                
Name:
Title:

154

Exhibit 11.4

[FORM OF] ASSIGNMENT AND ACCEPTANCE

This Assignment and Acceptance (the “ Assignment and Acceptance ”) is dated as of the Effective Date set forth below and is entered into by and between [ Insert name of Assignor ] (the “ Assignor ”) and [ Insert name of Assignee ] (the “ Assignee ”). Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, modified, supplemented, increased and extended from time, the “ Credit Agreement ”), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Acceptance as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s rights and obligations in its capacity as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below (including any letters of credit, guarantees, and swingline loans included in such facilities) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including but not limited to contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as the “ Assigned Interest ”). Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Acceptance, without representation or warranty by the Assignor.

				
1.	Assignor:	 	 	
 	 	 	 	
2.	Assignee:	 	 	
 	 	[and is an Affiliate/Approved Fund of [ identify Lender ] 1  Select if applicable.]	
 	 	 	
3.	Borrower:	Malibu Boats, LLC	
 	 	 	
4.	Administrative Agent:	SunTrust Bank, in its capacity as the administrative agent under the Credit Agreement	
 	 	 	
5.	Credit Agreement:	Second Amended and Restated Credit Agreement dated as of June 28, 2017 among the Borrower, the Parent, the other Guarantors party thereto, the Lenders party thereto and SunTrust Bank, as Administrative Agent, Issuing Bank and Swingline Lender.	
		
6.	Assigned Interest:	

				
Aggregate Amount of Commitment/Loans for all Lenders	Amount of Commitment/
Loans Assigned	Percentage Assigned of Commitment/Loans Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder.	
$	$	%	 	
$	$	%	 	
$	$	%	 	

155

Effective Date: _____________ ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]
The terms set forth in this Assignment and Acceptance are hereby agreed to:

				
 	ASSIGNOR	
 	 	
 	[NAME OF ASSIGNOR]	
 	 	
 	By:	 	
 	 	Title:	
 	 	
 	ASSIGNEE	
 	 	
 	[NAME OF ASSIGNEE]	
 	 	
 	By:	 	
 	 	Title:	

				
[Consented to and] To be added only if the consent of the Administrative Agent is required by the terms of the Credit Agreement. Accepted:	
 	
SUNTRUST BANK,	
as Administrative Agent	

By:	 	 	
Title:	 	 	
 	
[Consented to:] To be added only if the consent of the Borrower is required by the terms of the Credit Agreement.	
 	
Malibu Boats, LLC,	
as Borrower	

156

	
				
By:	 	 	 	
Title:	 	 	 	
[Consented to:] To be added only if the consent of the Issuing Bank or Swingline Lender is required by the terms of the Credit Agreement.	 	 	
 	 	 	 	
SUNTRUST BANK,	 	 	
as [Issuing Bank][Swingline Lender]	 	 	
 	 	 	 	
By:	 	 	 	
Title:	 	 	 	

157

ANNEX 1

STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ACCEPTANCE

1. Representations and Warranties .
1.1 Assignor . The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Acceptance and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by the Borrower, any of its Domestic Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.
1.2. Assignee . The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Acceptance and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the requirements, if any, specified in the Credit Agreement that are required to be satisfied by it in order to acquire the Assigned Interest and become a Lender, (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by the Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire the Assigned Interest, is experienced in acquiring assets of such type, (iv) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 5.1(a) and (b) thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent, the Assignor or any other Lender, (v) if it is a Foreign Lender, attached to the Assignment and Acceptance is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee, and (vi) it is not an Ineligible Assignee and it does not own more than 5% of any competitor of the Borrower; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the 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 Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.
2. Payments . From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date.
3. General Provisions . This Assignment and Acceptance shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Acceptance may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Acceptance by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Acceptance. This Assignment and Acceptance shall be

158

construed in accordance with and be governed by the law (without giving effect to the conflict of law principles thereof) of the state of New York.

159

Exhibit 10.2
SECOND AMENDED AND RESTATED
SECURITY AGREEMENT

THIS SECOND AMENDED AND RESTATED SECURITY AGREEMENT (the “ Security Agreement ”) dated as of June 28, 2017 among MALIBU BOATS, LLC , a Delaware limited liability company (the “ Borrower ”), the other Debtors listed on the signature pages hereto (collectively, the “ Debtors ”), and SUNTRUST BANK , a Georgia state banking corporation, in its capacity as Administrative Agent for the holders of the Indebtedness (defined below) (“ Secured Party ”).
W I T N E S S E T H
WHEREAS , the Debtors, the Lenders party thereto and the Secured Party are party to that certain Amended and Restated Credit Agreement dated as of April 2, 2015 (as amended by the First Amendment to Credit Agreement, dated as of February 3, 2016, the Second Amendment to Credit Agreement, dated as of August 15, 2016, and the Third Amendment to Credit Agreement, dated as of December 28, 2016, the “ Existing Credit Agreement ”),
WHEREAS , the Debtors and the Secured Party are party to that certain Amended and Restated Security Agreement dated as of April 2, 2015 (as amended, supplemented, amended and restated or otherwise modified from time to time, the “ Existing Security Agreement ”);
WHEREAS , the Debtors, the Secured Party and the Lenders party thereto have agreed to amend and restate the Existing Credit Agreement in its entirety upon and subject to the terms and conditions set forth in that certain Second Amended and Restated Credit Agreement among the Debtors, the Secured Party and the Lenders party thereto, dated as of the date hereof (as may be amended, supplemented, amended and restated or otherwise modified from time to time, the “ Credit Agreement ”; capitalized terms used herein and not otherwise defined herein shall have the meaning set forth in the Credit Agreement);
WHEREAS , as a condition precedent to the agreement of the Lenders to extend credit under the Credit Agreement, the Debtors are required to amend and restate the Existing Security Agreement pursuant to the terms hereof; and
WHEREAS , the Debtors have duly authorized the execution, delivery and performance of this Security Agreement and will receive direct and indirect benefits by reason of the credit extended under the Credit Agreement.
NOW, THEREFORE , in order to induce the Lenders to extend credit to the Borrower under the Credit Agreement, and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Debtors and the Secured Party, hereby agree as follows:
Security Interest . As security for the repayment of the Indebtedness (as defined in Section 2), each Debtor hereby assigns and grants to Secured Party, a security interest in and to all of the Debtor’s presently existing and hereafter acquired rights in and to the property described on Exhibit A attached hereto and incorporated herein by this reference, including, without limitation all such property or type of property presently existing and hereafter acquired or arising and all proceeds (including insurance proceeds) or products attributable to or arising from any of such property (collectively, the “ Collateral ”).
1. Indebtedness . The security interest granted herein by the Debtors secures and shall secure (a) all Obligations and (b) all documented and reasonable costs and expenses incurred in connection with enforcement and collection of the Obligations, including the documented and reasonable fees, charges and

disbursements of counsel. For purposes of this Security Agreement, all such obligations secured by the Collateral shall be referred to as “ Indebtedness. ”
2. Debtor’s Representations and Warranties to Secured Party . Each Debtor hereby represents and warrants to Secured Party, for the benefit of the holders of the Indebtedness, that the following facts are true and correct in all material respects as of the date hereof:
(a) each Debtor is the true and lawful owner of its Collateral in all material respects;
(b) each Debtor has a legal right to grant a security interest in its Collateral;
(c) Except for liens in favor of Secured Party, for the benefit of the holders of the Indebtedness and Permitted Encumbrances, there are no Liens against the Collateral; and
(d) each Debtor has obtained all necessary consents required to execute and deliver this Security Agreement and to accomplish the transactions evidenced hereby, including, without limitation, any requirements contained in any partnership agreement, bylaws, or operating agreement that governs any partnership interests, stock, membership interests, or other ownership interests owned by such Debtor and pledged to secure the Indebtedness pursuant to this Security Agreement (collectively, “ Organizational Documentation for Pledged Interests ”).
3. Debtor’s Covenants to Secured Party .  Each Debtor hereby covenants and agrees that until the Indebtedness shall have been paid in full (other than contingent indemnification obligations or expense reimbursement obligations to the extent no claim giving rise thereto has been asserted) or unless such Debtor shall have received the prior written consent of Secured Party:
(a) Protection and Use of Collateral . (i) each Debtor will keep the Collateral free from any adverse lien, security interest, or encumbrance (other than the security interest granted herein and Permitted Encumbrances); and (ii) each Debtor will not waste or destroy the Collateral or any part thereof and such Debtor will not use the Collateral in violation of any regulations, statute or ordinance or of any judgments, citations, decrees or orders of any judicial or administrative authority, except to the extent that could not reasonably be expected to have a Material Adverse Effect.
(b) Sale, Assignment or Impairment of Collateral . Except for Permitted Encumbrances and otherwise as permitted under the Loan Documents, no Debtor will sell, assign or otherwise transfer, dispose of or encumber the Collateral, or any interest therein outside the ordinary course of business.
(c) Maintain Insurance . Each Debtor will maintain insurance, in form, amounts, and with companies reasonably satisfactory to Secured Party, insuring all material Collateral against loss from fire, theft, and the kinds customarily insured against by companies in the same or similar businesses operating in the same or similar locations. Secured Party, as Administrative Agent for the holders of the Indebtedness, shall be designated as an additional insured under the terms of the policies evidencing such insurance and shall receive a minimum of thirty (30) days’ written cancellation notice from the company or insurer issuing such policy or policies. If the Debtors fail to furnish said insurance or fails to pay the premiums therefor, Secured Party may do so or may obtain insurance of its interest only, adding the amount of any such premium thereof to the other amounts secured hereby; provided , however, Secured Party is under no obligation or duty to pay such premiums or obtain or maintain such insurance. Each Debtor hereby grants to Secured Party a security interest in any return or unearned premiums which may be due upon cancellation of any of said policies for any reason whatsoever. After the occurrence and during the continuation of an Event of Default, at the request of Secured Party, each Debtor shall direct all insurors to pay Secured Party the amount of any insurance proceeds or payments arising out of or in connection with the insurance policies referenced herein and any balance of insurance proceeds remaining after payment in full of all amounts owing to Secured

Party shall be paid to such Debtor. After the occurrence and during the continuation of an Event of Default, the Secured Party acting through any officer, agent or employee is hereby appointed as each Debtor’s attorney-in-fact to endorse any draft or check which may be payable to such Debtor and, without obligation, to make claim with any insurer for payment under any insurance policy.
(d) Indemnification.  Each Debtor will and does hereby agree to indemnify and hold Secured Party harmless against all claims arising out of or in connection with such Debtor’s ownership or use of the Collateral.
(e) Removal of Collateral . Each Debtor warrants and represents to and covenants with Secured Party that: (a) after the filing of certain uniform commercial code financing statements, the delivery of possessory Collateral to Secured Party and the entry into Control Agreements, as contemplated by the Loan Documents, Secured Party’s security interest in the Collateral is now and at all times hereafter shall be perfected and have a first priority to the extent that such security interests can be perfected by the filing of uniform commercial code financing statements, delivery of Collateral or entry into Control Agreements, subject to Permitted Encumbrances; (b) as of the date hereof, the offices and/or locations where each Debtor keeps the Collateral in excess of $1,000,000 and such Debtor’s books and records concerning the Collateral are at the locations set forth beside the signature of such Debtor or as otherwise disclosed by such Debtor to Secured Party in writing, and such Debtor shall not remove such books and records therefrom and shall not keep any of such books and records and/or the Collateral in excess of $1,000,000 at any other office or location unless such Debtor gives Secured Party written notice thereof at least ten (10) days prior thereto (or such later date acceptable to Secured Party) and the same is within either the continental United States of America, Canada or Australia; provided, that no such notice should be required as a result of sales and other dispositions of property in the ordinary course of business that are permitted under the Credit Agreement; and (c) as of the date hereof, such addresses include and designate each Debtor’s chief executive office, chief place of business and other offices and places of business and are each Debtor’s sole offices and places of business. Promptly thereafter, the Borrower, by written notice delivered to Secured Party, shall advise Secured Party of each Debtor’s opening of any material new office or place of business or its closing of any material existing office or place of business.
(f) Inspect Collateral.  Secured Party shall have the right, at any time or times during any Debtor’s usual business hours without material disruption to normal business activities, to inspect the Collateral and all related records (and the premises upon which it is located) and all financial records and to verify the amount and condition of the Collateral. After an Event of Default has occurred and is continuing, all reasonable costs, fees and expenses incurred by Secured Party, or for which Secured Party has become obligated, in connection with such inspection and/or verification shall be payable by the Debtors to Secured Party.
(g) Discharge Liens.  Secured Party, for the benefit of the holders of the Indebtedness, in its sole and absolute discretion, without waiving or releasing any obligation, liability or duty of any Debtor under this Security Agreement or otherwise, may at any time or times hereafter after the occurrence and during the continuation of an Event of Default, but shall be under no obligation to pay, acquire and/or accept an assignment of any security interest, lien, encumbrance or claim asserted by a person against the Collateral. All sums paid by Secured Party in respect thereof and all reasonable costs, fees and expenses, including reasonable attorneys’ fees, court costs, expenses and other charges relating thereto incurred by Secured Party on account thereof shall be payable by the Debtors to Secured Party.
(h) Execute Additional Documents.  Each Debtor will sign and execute alone or with Secured Party any financing statement or other document and pay all necessary costs to reasonably protect the security interest under this Security Agreement against the interest of third persons (other than Permitted Encumbrances). After the occurrence and during the continuation of an Event of Default, Secured Party is

hereby appointed the attorney-in-fact of each Debtor to do all acts and things which Secured Party may deem reasonably necessary to perfect and/or continue the perfection of the security interest created by this Security Agreement and to protect the Collateral. The Debtors agree to pay all documented costs and fees for filing any termination statements. Each Debtor authorizes and empowers the Secured Party to file any UCC financing statement or UCC amendments without the necessity of such Debtor’s signature in order to perfect the security interest of Secured Party, for the benefit of the holders of the Indebtedness, against the Collateral, as such term is defined in this Security Agreement.
(i) Obligations Under Organizational Documentation for Pledged Interests.  Each Debtor will perform all of its duties and obligations under the Organizational Documentation for Pledged Interests, and such Debtor shall take all actions necessary (including the payment of all amounts due and owing and/or arising under the Organizational Documentation for Pledged Interests) to preserve its ownership interest(s) in such entity unless otherwise permitted by the terms of the Credit Agreement.
4. Special Representations, Warranties and Agreements with respect to Accounts . With respect to Accounts, each Debtor represents, warrants and agrees with Secured Party, for the benefit of the holders of the Indebtedness, as follows:
(a) As of the time any Account becomes subject to Secured Party’s security interest hereunder, including, without limitation, as of each time any specific assignment or transfer or identification is made to Secured Party of any Account, each Debtor shall be deemed to have warranted that the Accounts are in all material respects genuine and in all material respects what they purport to be; that each Account is valid and subsisting and arises out of a bona fide sale of goods sold and delivered, or in the process of being delivered, or out of and for services theretofore actually rendered, to the account debtor named in the Account (each an “ Account Debtor ”); that the amount of the Account represented as owing is the correct amount owing except for normal cash discounts and except for any setoffs, credits, deductions or counter-charges in the ordinary course of business, including, without limitation, warranty claims and subject to any non-intentional discrepancies that are not material.
(b) Each Debtor will hold in such Debtor’s principal place of business, or other location within the fifty (50) states comprising the United States of America or the District of Columbia disclosed to Secured Party, and make available to Secured Party as reasonably requested, so long as any Indebtedness remains unpaid (other than contingent indemnification obligations or expense reimbursement obligations to the extent no claim giving rise thereto has been asserted), all of such Debtor’s records containing any entries as to Accounts, including details of sale, shipment, delivery, payment and other material information; and, at Secured Party’s reasonable request, such records will be segregated and marked by such Debtor in a manner reasonably satisfactory to Secured Party; and Secured Party shall at any time or times during such Debtor’s usual business hours without material disruption to normal business activities, have full access to and the right to examine and audit such Debtor’s books and records, and to make copies of pertinent portions thereof; provided, if no Event of Default has occurred and is continuing, such Debtor shall only be responsible for reimbursing costs and expenses incurred pursuant to this Section 5(b) no more than (1) time per Fiscal Year.
(c) Following the occurrence and during the continuation of an Event of Default, at the request of the Secured Party, all checks and other forms of remittances received by each Debtor on Accounts shall not be commingled with such Debtor’s other property but shall be segregated, held by such Debtor in trust for Secured Party, for the benefit of the holders of the Indebtedness, and immediately delivered by Debtor to Secured Party in the form as that in which received with proper endorsements. Each Debtor will accompany each such transmission of proceeds to Secured Party with a report in such form as Secured Party may reasonably require to identify the Accounts to which such proceeds apply. In the event any Account Debtor shall also be indebted to any such Debtor in any other respect and such Account Debtor shall make payment without designating the particular indebtedness against which it is to apply, such payment shall be presumed

to be payment on the Account of such Account Debtor unless the Account Debtor subsequently provides evidence that the payment was not intended to be applied to the payment on the account of such Account Debtor. In administering the collection of proceeds as herein provided, Secured Party or the bank designated by it may accept checks or drafts in any amount and bearing any notation without incurring liability to Debtor for so doing.
(d) Returned or repossessed goods arising from or relating to any Accounts, will be subject to the security interest of Secured Party, for the benefit of the holders of the Indebtedness, hereunder.
5. Special Representations, Warranties and Agreements with Respect to Inventory . With respect to Inventory, Debtor represents, warrants and agrees with Secured Party, for the benefit of the holders of the Indebtedness, as follows:
(a) Each Debtor will continue to maintain books and records pertaining to the Inventory in the detail, form and scope as such Debtor is maintaining such books and records at the execution of this Security Agreement in all material respects and agrees that Secured Party or its agents may enter upon such Debtor’s premises at any time or times during such Debtor’s usual business hours without material disruption to normal business activities, for the purpose of inspecting Inventory and any and all records pertaining thereto; provided, if no Event of Default has occurred and is continuing, Debtors shall only be responsible for reimbursing costs and expenses incurred pursuant to this Section 6 no more than (1) time per Fiscal Year; and each Debtor will notify Secured Party promptly of: (x) any change in such Debtor’s name, mailing address or principal place of business, or (y) any new location of Inventory in excess of $1,000,000; and each Debtor will promptly advise Secured Party in sufficient detail of any event that could reasonably be expected to have a material adverse effect on the value of the Inventory or on the lien and security interest granted to Secured Party, for the benefit of the holders of the Indebtedness, herein.
(b) Secured Party may require each Debtor from time to time to deliver to Secured Party such lists, descriptions and designations of Inventory as Secured Party may reasonably request to identify the quantities, nature, extent, location and value of the Inventory, subject to the security interest of Secured Party, for the benefit of the holders of the Indebtedness. Each Debtor warrants that all Inventory at any time and from time to time included in any such lists, descriptions or designations will be in fact existing and in the condition and amount represented to Secured Party in all material respects.
(c) After the occurrence and during the continuation of an Event of Default, at the request of Secured Party, each Debtor shall not make further dispositions of its Inventory without Secured Party’s prior written approval.
(d) Upon the sale, exchange or other disposition of the Inventory, the security interest and lien created and provided for herein shall, without break in continuity and without further formality or act, continue in and attach to the instruments for the payment of money, accounts receivable, documents of title, shipping documents, chattel paper and all other cash and non-cash proceeds of such sale, exchange or disposition, including Inventory returned or rejected by customers or repossessed by a Debtor or Secured Party. To the extent permitted by applicable law, as to any such sale, exchange or disposition, Secured Party shall have all of the rights of an unpaid seller, including stoppage in transit, replevin and reclamation.
(e) All invoices covering sales of Inventory are hereby assigned to Secured Party as security and after the occurrence and during the continuation of an Event of Default, at the request of Secured Party, the proceeds thereof, if collected by a Debtor, are to be turned over to Secured Party, for the benefit of the holders of the Indebtedness. After the occurrence and during the continuation of an Event of Default, at the request of Secured Party, cash sales of Inventory or sales in which a lien upon or security interest in the Inventory is retained shall only be made by any Debtor with Secured Party’s prior written approval and the proceeds

of such sales, whether cash, documents or instruments, shall not be commingled with such Debtor’s other property, but shall be segregated, held by such Debtor in trust for Secured Party as Secured Party’s exclusive property, for the benefit of the holders of the Indebtedness, and shall be delivered immediately by such Debtor to Secured Party in the identical form as that in which received.
6. Debtors’ Use of the Collateral .  Each Debtor may use the Collateral in the ordinary course of such Debtor’s business and as permitted by the Loan Documents; provided, that, upon the occurrence and during the continuation of an Event of Default, such Debtor’s right to so use the Collateral shall terminate until further written notice from Secured Party, at the Secured Party’s request.
7. Events of Default .  The term “Event of Default”, whenever used in this Security Agreement, shall mean an “Event of Default” as defined in the Credit Agreement.
8. Remedies .
(a) Upon the happening of any Event of Default, and at any time thereafter when such Event of Default is continuing, at the option of Secured Party, any and all Indebtedness shall become immediately due and payable without presentment or demand or any notice to Debtors or any other person obligated thereon, and Secured Party shall have and may exercise any or all of the rights and remedies of a Secured Party under the Uniform Commercial Code as adopted in the State of New York or any other applicable jurisdiction in which any Debtor maintains its principal place of business (the “Code”), and as otherwise contractually granted herein or under any other applicable law or under any other agreement executed by any Debtor in favor of Secured Party, including, without limitation, the right and power to sell, at public or private sale or sales, or otherwise dispose of or utilize such portion of the Collateral and any part or parts thereof in any manner authorized or permitted under the Code after the occurrence and during the continuation of an Event of Default, and to apply the proceeds thereof in accordance with Section 8.2 of the Credit Agreement. Additionally, and as an essential part of the bargained-for consideration running to Secured Party and to the extent allowed by law, each Debtor hereby expressly grants to Secured Party the contractual right to purchase any or all of the Collateral at public or private sale any time after ten (10) days’ notice of such sale shall have been sent to such Debtor by Secured Party.
(b) Additionally, upon the occurrence and during the continuation of an Event of Default, the Secured Party may give written notice to the entities in which any Debtor owns an interest and/or such entities’ members, partners, officers, shareholders, or stockholders requiring such parties to pay over and deliver to Secured Party from time to time any and all payments and distributions otherwise to be delivered to such Debtor arising under, out of, or in respect of such Debtor’s interest in said entity. Each Debtor hereby irrevocably authorizes the entities in which it holds a membership interest, partnership interest, stockholder interest, or shareholder interest and/or its members, partners, officers, shareholders, or stockholders to comply (without further inquiry or notice) with such notice given by Secured Party and to deliver all such payments and distributions described herein to Secured Party.
(c) Each Debtor agrees, to the extent permitted by applicable law, that if such notice of the occurrence and continuation of an Event of Default is mailed, postage prepaid, or sent by overnight mail, charges prepaid, to such Debtor at the address shown in Section 11.1(a) of the Credit Agreement at least ten (10) days before the time of the proposed sale or disposition, such notice shall be deemed reasonable and shall fully satisfy any requirement of giving of notice, and the proposed sale may take place any time after such ten (10) day period without the necessity of sending another notice to such Debtor. To the extent permitted by applicable law, Secured Party may postpone and reschedule any proposed sale at its option without the necessity of giving Debtors further notice of such fact as long as the rescheduled sale occurs within sixty (60) days of the originally scheduled sale.

(d) To the extent permitted by applicable law, all recitals in any instrument of assignment or any other document or paper executed by Secured Party incident to sale, transfer, assignment or other disposition or utilization of the Collateral or any part thereof hereunder shall be sufficient to establish full legal propriety of the sale or other action taken by Secured Party or of any fact, condition or thing incident thereto, and all prerequisites of such sale or other action shall be presumed conclusively to have been performed or to have occurred.
(e) In addition to the foregoing provisions, following the occurrence and during the continuation of an Event of Default, and upon Secured Party’s demand, each Debtor agrees to assemble the Collateral at its usual place of business and promptly make the same available to Secured Party.
9. Secured Party’s Powers and Duties with Respect to the Collateral .
(a) Secured Party shall be under no duty to collect any amount that may be or become due on any of the Collateral now or hereafter pledged hereunder, to realize on Collateral, to collect principal, interest or dividends, to keep the same insured, to make any presentments, demands or notices of protest, in connection with any of the Collateral, or to do anything for the enforcement and collection of Collateral or the protection thereof.
(b) Not limiting the generality of any of the foregoing but in amplification of the same, Secured Party shall be in no way liable to or responsible for any diminution in the value of the Collateral from any cause whatsoever, except to the extent required by applicable law.
(c) The Debtors agree to pay all material taxes, charges, transfer fees and assessments against the Collateral, and on the failure of the Debtors to so do that has resulted in an Event of Default, Secured Party may, after giving the Debtors written notice of its intention to do so, make such payments and advance such sums on account thereof as Secured Party, in Secured Party’s discretion, deems desirable. Each Debtor agrees to reimburse Secured Party promptly upon demand for all such payments and advances plus interest thereon at the maximum rate allowed by applicable law, repayment of all of which is secured by this Security Agreement and the Collateral.
10. General Authority .  Effective immediately but exercisable by Secured Party (or by any person designated by Secured Party) only upon the occurrence and during the continuation of an Event of Default, each Debtor hereby IRREVOCABLY appoints Secured Party (or any person designated by Secured Party) as such Debtor’s true and lawful attorney-in-fact, which appointment is hereby coupled with an interest, with full power of substitution, in Secured Party’s name or such Debtor’s name or otherwise, for Secured Party’s sole use and benefit, but at such Debtor’s cost and expense, to exercise at any time and from time to time all or any of the following powers with respect to all or any of the Collateral:
(a) To receive, take, endorse, assign and/or deliver in Secured Party’s name or such Debtor’s name any and all checks, notes, drafts and other instruments relating to the Collateral;
(b) To transmit to Account Debtors, entities in which such Debtor owns an interest, and such entities’ members, partners, officers, shareholders, or stockholders, notice of Secured Party’s interest in the Collateral and to request from Account Debtors, entities in which such Debtor owns an interest, and such entities’ members, partners, officers, shareholders, or stockholders, at any time, in such Debtor’s name or in Secured Party’s name or the name of Secured Party’s designee, information concerning the Collateral and the amounts owing thereon;
(c) To receive and open all mail addressed to such Debtor and to retain all mail pertaining to the Collateral;

(d) To notify Account Debtors, entities in which such Debtor owns an interest, and such entities’ members, partners, officers, shareholders, or stockholders to make payment directly to Secured Party or to any bank designated by Secured Party;
(e) To take or bring, in such Debtor’s name or Secured Party’s name, all steps, actions, suits or proceedings deemed by Secured Party necessary or desirable to effect collection of the Accounts, to compromise with any Account Debtor and give acquittance for any and all Accounts;
(f) To sign such Debtor’s name on any invoice or bill of lading relating to any Collateral, drafts against such Debtor’s customers, notices of assignment, financing statements, other public records and notices to such Debtor’s customers; and
(g) In general, to do all things necessary to perform the terms of this Security Agreement, including, without limitation, to take any action or proceedings that Secured Party deems necessary or appropriate to protect and preserve the security interest of Secured Party, for the benefit of the holders of the Indebtedness, in the Collateral; provided, however, the exercise by Secured Party of or failure to so exercise any such authority shall in no manner affect any Debtor’s liability to Secured Party hereunder or in connection with the Indebtedness; and provided further, that Secured Party shall be under no obligation or duty to exercise any of the powers hereby conferred upon Secured Party and Secured Party shall have no liability for any act or failure to act in connection with any of the Collateral. Secured Party shall not be bound to take any steps necessary to preserve rights in any instrument, contract or lease against third parties. Not limiting the generality of any of the foregoing but in amplification of the same, Secured Party shall be in no way liable to or responsible for any diminution in the value of, or reduction in the proceeds realized from, the Collateral from any cause whatsoever as required by applicable law.
11. Power to Execute .  The board of directors, board of managers, or other appropriate governing body of each Debtor has authorized the transactions contemplated by and referred to in this Security Agreement and the consummation of such transactions. Each Debtor represents and warrants that it has full corporate, partnership or limited liability company power in accordance with applicable law to execute this Security Agreement and perform any obligations described in, contemplated by or referred to in this Security Agreement and such execution and performance by it will not conflict with its charter or bylaws, or any other document or instrument to which it is a party or to which it is subject, bound or affected.
12. Execution of Security Agreement .  Each Debtor stipulates that it has read this Security Agreement, fully understands the content and consequences of entering into this Security Agreement, intends to be bound by the terms of this Security Agreement and is not under any duress, economic or otherwise, to execute this Security Agreement.
13. Invalid Provisions .  If any one or more of the provisions of this Security Agreement, or the applicability of any such provision to a specific situation, shall be held invalid, illegal or unenforceable in any respect, such provision shall be modified to the minimum extent necessary to make it or its application valid and enforceable, and the validity and enforceability of all other provisions of this Security Agreement and all other applications of any such provision shall not be affected thereby.
14. Dealings With Debtor .  It is expressly understood and agreed that, notwithstanding anything else contained in this Security Agreement, Secured Party may, for all purposes hereof deal solely with Debtors in connection therewith, and nothing herein or in any other loan document executed in connection herewith shall be construed so as to require dealings with, consent of or notice to any other parties or persons.
15. Construction .  The parties acknowledge that in the event the provisions of this Security Agreement require judicial interpretation, it is agreed that the court interpreting or construing this Security Agreement shall not apply a presumption that the terms hereof shall be more strictly construed against one

party by reason of the rule of construction that a document is to be construed more strictly against the party who itself or through its agent prepared the same, it being agreed that all parties to this Security Agreement participated in the preparation of this Security Agreement.
16. Counterparts .  This Security Agreement may be executed in multiple counterparts, and all such executed counterparts shall constitute the same agreement. It shall not be necessary that the signatures of all parties be contained on any one counterpart. It shall be necessary to account for only one such counterpart in proving the existence or terms of this Security Agreement.
17. Number and Gender .  As used in this Security Agreement, the singular number shall include the plural and the plural shall include the singular, and the use of any gender shall be applicable to all genders, unless the context would clearly not admit such construction. The words “herein,” “hereof,” “hereunder” and other similar compounds of the word “here” when used in this Security Agreement shall refer to the entire Security Agreement and not to any particular provision or section.
18. Governing Law; Submission to Jurisdiction; Venue; WAIVER OF JURY TRIAL. The terms of Sections 11.5 and 11.6 of the Credit Agreement with respect to governing law, submission to jurisdiction, venue and waiver of jury trial are incorporated herein by reference, mutatis mutandis, and the parties hereto agree to such terms.
19. Successors and Assigns .  No Debtor shall assign its rights or delegate its duties under this Security Agreement. All terms and provisions of this Security Agreement applicable to each Debtor shall bind such Debtor and such Debtor’s permitted successors and assigns and shall inure to the benefit of Secured Party, for the benefit of the holders of the Indebtedness, and its successors and assigns.
20. Entire Security Agreement .  This Security Agreement, including Exhibits and the other documents and agreements referred to herein, constitutes the entire agreement between the parties hereto with respect to the matters addressed herein and supersedes all prior agreements and understandings relating to the subject matter hereof, either written or oral, that may have existed between them with respect to the matters addressed herein. No representation, promise, condition, warranty or understanding, either express or implied, other than as set forth herein, shall be binding upon any of the parties to this Security Agreement.
21. Notices .  All communications and notices hereunder shall be in writing and given as provided in Section 11.1 of the Credit Agreement.
22. Renewal, Extension or Rearrangement .  All provisions of this Security Agreement relating to Indebtedness shall apply with equal force and effect to each and every promissory note executed hereafter that in whole or in part represents a renewal, extension for any period, increase or rearrangement of any part of the Indebtedness originally represented by any part of such other Indebtedness.
23. Election of Remedies .  Secured Party shall have all of the rights and remedies now or hereafter existing, by contract, at law or in equity and pursuant to any other body of law, statutory or otherwise, and these same rights and remedies shall be cumulative and may be pursued separately, successively or concurrently against the Debtors at the sole discretion of Secured Party. The exercise or failure to exercise any of the same shall not constitute a waiver or release thereof or of any other right or remedy and the same shall be nonexclusive. If Secured Party has security in addition to the Collateral, Secured Party may resort to such other security for the payment of the Indebtedness.
24. Titles of Sections and Subsections . All titles or headings to sections, subsections or other divisions of this Security Agreement or the exhibits to this Security Agreement are only for the convenience of the parties and shall not be construed to have any effect or meaning with respect to the other content of

such sections, subsections or other divisions, such other content being controlling with respect to the agreement between the parties.
25. Joinder . At any time after the date of this Agreement, one or more additional Persons may become party hereto by executing and delivering to the Secured Party a Joinder Agreement. Immediately upon such execution and delivery of such Joinder Agreement (and without any further action), each such additional Person will become a party to this Agreement as a “Debtor” and have all of the rights and obligations of a Debtor hereunder and this Agreement and the schedules hereto shall be deemed amended by such Joinder Agreement.
26. Joint and Several Obligations of Debtors .
(a)    Subject to subsection (c) of this Section 28, each of the Debtors is accepting joint and several liability hereunder, in consideration of the financial accommodation to be provided by the holders of the Indebtedness, of each of the Debtors and in consideration of the undertakings of each of the Debtors to accept joint and several liability for the obligations of each of them.
(b)    Subject to subsection (c) of this Section 28, each of the Debtors jointly and severally hereby irrevocably and unconditionally accepts, not merely as a surety but also as a co-debtor, joint and several liability with the other Debtors with respect to the payment and performance of all of the Indebtedness arising under Loan Documents and any other documents relating to the Indebtedness, it being the intention of the parties hereto that all the Indebtedness shall be the joint and several obligations of each of the Debtors without preferences or distinction among them.
(c)    Notwithstanding any provision to the contrary contained herein, in any other of the Loan Documents or in any other documents relating to the Indebtedness, the obligations of each Debtor under the Credit Agreement, the other Loan Documents and the other documents relating to the Indebtedness shall be limited to an aggregate amount equal to the largest amount that would not render such obligations subject to avoidance under Section 548 of the United States Bankruptcy Code or any comparable provisions of any other applicable Law.
27. Modification .  This Agreement and the provisions hereof may not be amended, waived, modified, changed, discharged or terminated except as set forth in Section 11.2 of the Credit Agreement.
28. Further Assurances .  Each Debtor agrees that it will without further consideration execute and deliver such other documents and take such other action, as may be reasonably requested by Secured Party to consummate more effectively the transactions contemplated hereby.
29. Severability .  The invalidity or unenforceability of any of the rights or remedies herein provided in any jurisdiction shall not in any way affect the right to the enforcement in such jurisdiction or elsewhere of any of the other rights or remedies herein provided.
IN WITNESS WHEREOF , this Security Agreement has been executed and delivered on the date first written above.
DEBTORS:
MALIBU BOATS, LLC,
a Delaware limited liability company
By: /s/ Wayne Wilson     
Name: Wayne Wilson     

Title: Chief Financial Officer     
MALIBU BOATS HOLDINGS, LLC
By: /s/ Wayne Wilson     
Name: Wayne Wilson     
Title: Chief Financial Officer     
MALIBU AUSTRALIAN ACQUISITION CORP.
By: /s/ Wayne Wilson     
Name: Wayne Wilson     
Title: Secretary and Treasurer     
SECURED PARTY:
SUNTRUST BANK
By: /s/ Tesha Winslow     
Name: Tesha Winslow     
Title: Director     

EXHIBIT A
The Collateral includes, and each Debtor hereby grants to Secured Party, for the benefit of the holders of the Indebtedness, a security interest in and to, all of such Debtor’s right, title and interest in the following described property (and types of property) both presently existing and hereafter acquired or arising:
1. All of such Debtor’s assets, including without limitation, all Accounts, Accounts receivable, Inventory, Equipment, General Intangibles, Goods, Documents, contract rights, distributions, payments, capital accounts, profits, furniture, choses in action, Chattel Paper, leases, rentals, machinery, Investment Property, cash, cash equivalents, Deposit Accounts, tort claims, intellectual property rights, trademarks, patents, copyrights, intercompany obligations, stock, marketable securities, brokerage accounts, Instruments, notes and Supporting Obligations, including, without limitation, those U.S. federally registered intellectual property, patents, and trademarks described on the Closing Certificate. Capitalized terms used herein and not defined herein shall have the meanings given to such terms in the Code (as such term is defined in this Security Agreement).
2. All of the foregoing as such may arise under any Organizational Documentation for Pledged Interests (as such term is defined in this Security Agreement).
3. All of such Debtor’s membership interests, partnership interests, stockholder interests, shareholder interests, financial rights, and governance rights arising under any Organizational Documentation for Pledged Interests, together with any payments and distributions arising in connection therewith, and including, without limitation, those interests described on the Closing Certificate.
4. All ledgers, books of account and records of such Debtor relating to any and all of the property described on this Exhibit A .
5. All payments, monies, interest, distributions, and dividends arising from any of the property described on this Exhibit A .
6. The proceeds (including insurance proceeds) of any and all of the Collateral.
7. All deposit and checking accounts maintained by such Debtor with Secured Party, excluding any Excluded Account (as such term is defined in the Credit Agreement) provided, that this Security Agreement shall not constitute a grant of a security interest in any property to the extent that and for as long as such grant of a security interest (A) is prohibited by any Requirement of Law, as such term is defined in the Credit Agreement, (B) constitutes a breach or default under or results in the termination of, or requires any consent not obtained under, any lease, license, or agreement except to the extent that such Requirement of Law or provisions of any such lease , license, or agreement is ineffective under applicable law or would be ineffective under Sections 9-406, 9-407, 9-408 or 9-409 of the Code (as defined in this Security Agreement) to prevent the attachment of the security interest granted hereunder, (C) is in any United States trademark applications filed on the basis of a Debtor’s intent-to-use such mark, in each case, unless and until evidence of the use of such trademark in interstate commerce is submitted to the United States Patent and Trademark Office, but only if and to the extent that the granting of a security interest in such application would result in the invalidation of such application, provided, that to the extent such application is excluded from the Collateral, upon the submission of evidence of use of such trademark to the United States Patent and Trademark Office, such trademark application shall automatically be included in the Collateral, without further action on any party’s part, (D) is any membership interests, partnership interests, stockholder interests, shareholder interests, financial rights, and governance rights arising under any Organizational Documentation for Pledged Interests, together with any payments and distributions arising in connection therewith, to the extent not required by the terms of the Loan Documents (as such term is defined in the Credit Agreement) to constitute Collateral hereunder, (E) is in motor vehicles or other assets in which a security interest may

be perfected only through compliance with a certificate of title or similar statute, (F) constitutes the “Properties” (as such term is defined in the Existing Master Lease), (G) is any property that is subject to a purchase money agreement, capital lease or similar arrangement to the extent other Liens are prohibited thereby or otherwise requiring consent of any Person (other than the Borrower or its Affiliates), (H) is a circumstance where the Borrower and the Administrative Agent have determined in their reasonable discretion that the cost, burden or consequences (including adverse tax consequences) of obtaining or perfecting the security interest in such assets is excessive in relation to the practical benefit afforded thereby, or (I) requires any Debtor to take any action outside the United States to perfect such security interest (the Collateral described in the foregoing proviso being collectively referred to as the “ Excluded Collateral ”).

Exhibit 10.3
 
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this “ Agreement ”) is made and entered into as of June 28, 2017, by and between Cobalt Boats, LLC, a Delaware limited liability company (the “ Company ”), and William Paxson St. Clair, Jr., an individual (“ Executive ”).
RECITALS:
A.  The Company, Malibu Boats, LLC, a Delaware limited liability company (“ Malibu Boats ”), and certain other parties thereto have entered into a Unit Purchase Agreement dated as of the date hereof (the “ Unit Purchase Agreement ”) that provides for the acquisition of the Company by Malibu Boats.
B.  Subject to and effective upon the closing of the transactions contemplated by the Unit Purchase Agreement (the “ Closing ”), the Company desires that Executive be employed by the Company to carry out the duties and responsibilities described below, all on the terms and conditions hereinafter set forth.
C.  Subject to and effective upon the Closing, Executive desires to accept such employment on such terms and conditions.
D.  This  Agreement shall govern the employment relationship between Executive and the Company from and after the Closing, and supersedes and negates all previous negotiations and agreements with respect to such relationship.
E.   If the transactions contemplated by the Unit Purchase Agreement fail to close for any reason, or if the Unit Purchase Agreement terminates for any reason without the transactions contemplated thereby closing, this Agreement shall automatically terminate and be of no force and effect.
NOW, THEREFORE , in consideration of the above recitals incorporated herein and the mutual covenants and promises contained herein and other valuable consideration, the receipt and sufficiency of which is hereby expressly acknowledged, the parties agree as follows:

1.	EMPLOYMENT .  The Company hereby agrees to employ Executive as President of the Company for the Period of Employment (as such term is defined in Section 2) according to the terms and conditions set forth herein.  Executive shall report directly to the Chief Executive Officer of Malibu Boats.  Executive shall perform such duties and have such level of authority and responsibility as is usual and customary for such position, plus any additional duties as may reasonably be assigned from time to time, including but not limited to providing services as an officer or director to one or more of the Company’s subsidiaries or affiliates (and the compensation for such services shall be covered exclusively by Sections 3 through 5 of this Agreement).  Executive hereby accepts such employment and agrees to devote Executive’s full business time, energy and best efforts to the performance of  Executive’s duties for the Company.  Executive shall be subject to and comply with the Company’s policies, procedures and approval practices, as generally in effect from time-to-time.	
2. EMPLOYMENT RELATIONSHIP .  The “ Period of Employment ” under this Agreement shall be the period of two years commencing on the date of the Closing and ending on the second anniversary of the date of the Closing.  Subject to the terms of Section 5 of this Agreement, Executive shall be

employed on an at-will basis and Executive’s employment with the Company may be terminated by Executive or the Company at any time, with or without Cause, and with or without advance notice.
3. COMPENSATION .
a. Base Salary .  During the Period of Employment, the Company agrees to pay Executive a base salary of Four Hundred Thousand dollars ($400,000) per annum, less standard deductions and authorized withholdings (the “ Salary ”).  The Salary shall be paid in accordance with the Company’s standard payroll practices.
b. Bonus .  During the Period of Employment, Executive shall be entitled to earn an annual performance-based bonus (“ Annual Bonus ”).  In addition to Salary, during each fiscal year of the Period of Employment, Executive will be eligible to earn a target annual cash bonus based on the Bonus Program in effect for that model year, if and only if Executive, the Company and its subsidiaries and affiliates achieve the performance criteria specified by the Board or the Compensation Committee (if there is one) of Malibu Boats, Inc. for such year, as determined by the Board or such Compensation Committee (if there is one) in its sole discretion.  To earn any Annual Bonus, Executive must be continuously and actively employed through the end of the applicable fiscal year and the date that bonuses are normally paid to the Company’s executives and key employees.  Each Annual Bonus earned by Executive, if any, will be due and payable following the Company’s receipt of its audited financial statements for the fiscal year with respect to which such bonus has been earned (and in any event, by the end of the calendar year in which such fiscal year ends).  Any Annual Bonus paid to Executive shall be subject to applicable deductions and withholdings.
4. BENEFITS .
a. Benefits .  In addition to (but without duplication of) Salary and any bonuses payable to Executive pursuant to Section 3, Executive shall be entitled to participate at his sole discretion in all of the Company’s employee benefit programs for which employees of the Company are generally eligible, subject to the terms, conditions and eligibility requirements of such plans and benefits.
b. Vacation .  Executive will be entitled to accrue vacation time, in an amount and subject to accrual limits, in accordance with the Company’s policies and practices for employees of the Company.  Executive shall schedule and take vacation at the mutual convenience of the Executive and the Company.
c. Business Expenses .  During the Period of Employment, the Company shall reimburse Executive in the calendar year in which they are incurred for all reasonable out-of-pocket business expenses incurred by him in the course of performing his duties and responsibilities under this Agreement which are consistent with the Company’s policies in effect from time to time with respect to travel, entertainment and other business expenses, subject to the Company’s requirements with respect to reporting and documentation of such expenses.
d. Boat .  During the Period of Employment, the Company at its cost shall provide Executive a boat of a quality consistent with the Company’s practices and made available to other executives of the Company by the CEO and/or CFO of Malibu Boats, that will be owned by the Company.  Insurance will be maintained and paid by the Company.  Executive shall be entitled to reimbursement for the cost of all maintenance costs associated with Executive’s use of the boat.  Executive will be responsible for all fuel costs associated with Executive’s use of the boat.  Executive may use such boat for business and personal purposes.  Executive may not exchange

such boat for a different boat owned by the Company until the second anniversary of the date of the Closing.
e. Auto . During the Period of Employment, the Company will pay or reimburse expenses associated with the Executive’s use of an automobile. Expenses included will be all fuel, maintenance and repair costs.
		
1.	TERMINATION .  Notwithstanding anything in this Agreement to the contrary, Executive’s employment may be terminated as follows:	
a. Death .  Upon the death of Executive, Executive’s employment with the Company shall terminate and the Company shall not be obligated to make any further payments to Executive hereunder, except amounts due as Salary, any unpaid Annual Bonus earned pursuant to Section 3(b) and accrued but unused vacation earned at the time of Executive’s termination of employment, and reimbursement for any documented expenses incurred prior to Executive’s termination of employment in accordance with Section 5 hereof (collectively, the “ Accrued Obligations ”).
b. Disability .  In the event that the Company reasonably determines in good faith that Executive is unable to perform the essential functions of his employment with the Company, even with reasonable accommodation that does not impose an undue hardship on the Company, for more than ninety (90) days in any rolling one-year period (“ Disability ”), unless a longer period is required by applicable federal or state law, in which case that longer period would apply, the Company shall have the right to terminate Executive’s employment, and the Company shall not be obligated to make any further payments to Executive hereunder, except for the Accrued Obligations.  Executive expressly agrees that the Company shall have the right to permanently replace Executive in the event he is terminated due to a Disability.
c. Termination for Cause .  The Company may terminate Executive’s employment at any time immediately upon written notice to Executive for Cause.
(1)   For purposes of this Agreement, “ Cause ” shall mean any of the following occurring during Executive’s employment hereunder: (a) a knowing, intentional or reckless act or omission that constitutes theft, forgery, fraud, material dishonesty, misappropriation, breach of fiduciary duty or duty of loyalty, or embezzlement by Executive against the Company or any of its parent, subsidiary or affiliated entities; (b) Executive’s conviction, or plea of guilty or nolo contendere , of a felony or any other crime involving moral turpitude; (c) Executive knowingly or intentionally causing the Company’s financial statements to fail to materially comply with generally accepted accounting principles, or Executive’s unlawful use (including being under the influence) or possession of any illegal drug or narcotic while on Company premises or while performing Executive’s duties and responsibilities hereunder; (d) Executive’s willful refusal to comply with the lawful requests made of Executive by the Company, which (if reasonably susceptible of cure), is not fully cured within five (5) days after Executive receives written notice from the Company detailing Executive’s willful refusal; (e) gross negligence of Executive in the performance of his job duties, which (if reasonably susceptible of cure), is not fully cured within 30 days after Executive receives written notice from the Company detailing Executive’s gross negligence; (f) a material violation by Executive of one or more Company policies, which (if reasonably susceptible of cure), is not fully cured within 30 days after Executive receives written notice from the Company detailing Executive’s violation(s) of Company policy; and/or (g) a material breach by Executive of this Agreement or any other agreement with the Company, which (if reasonably susceptible of cure), is not fully cured within 30 days after Executive receives written notice from the

Company detailing Executive’s breach of this Agreement and/or any other agreement with the Company.
(2)   In the event that the Company terminates Executive’s employment for Cause, the Company shall not be obligated to make any further payments to Executive hereunder, except for the Accrued Obligations.

a.	Termination Without Cause .	
(1)   By Executive .  Except as set forth in this Agreement, Executive may voluntarily resign from his employment with the Company at any time, and for any reason or no reason, with or without cause, after giving thirty (30) days’ prior written notice to the Company.  In the event of a voluntary resignation, the Company may elect at its sole discretion to make the resignation of employment effective at any time prior to the expiration of the 30-day notice period and, upon the effective date of such resignation, the Company shall not be obligated to make any further payments to Executive hereunder, except for the Accrued Obligations.
(2)   By Company .  Notwithstanding any other provision in this Agreement, the Company shall have the right to terminate Executive’s employment at any time, for any reason or no reason, immediately upon written notice to Executive.  If the Company terminates Executive’s employment pursuant to this Section 5(d)(2) without Cause, the Company shall pay to Executive the Accrued Obligations.  In addition, if the Company terminates Executive’s employment without Cause, subject to Executive signing (and not revoking) a complete and general release of any and all claims in favor of the Company and its affiliates in a form and substance satisfactory to the Company (the “ Release ”) within twenty-one (21) days (or such longer period as may be required by applicable law to obtain a complete and general release of claims) (the “ Release Execution Deadline ”) after the Company provides the form of Release to the Executive, upon a termination of Executive’s employment by the Company without Cause, Executive shall continue to receive his Salary through the end of the Period of Employment (the “ Severance Payments ”).  Such Release shall be in substantially the same form as attached as Exhibit A hereto, which shall be subject to necessary changes to comply with changes in applicable law to obtain a valid and complete general release of claims.  Executive’s right to receive and retain any of the Severance Payments is contingent upon Executive’s compliance with his continuing obligations to the Company under the terms of this Agreement and the Release.  The Company shall pay the Severance Payments to Executive in substantially equal installments through the end of the Period of Employment in accordance with the Company’s standard payroll policies then in effect, provided that the first installment shall be payable on (or within ten (10) days following) the sixtieth (60th) day following the date of Executive’s termination of employment with the Company and shall include all amounts that would have otherwise been paid in accordance with the Company’s standard payroll policies from the date of Executive’s termination of employment through such payment date.
b. Resignation . Upon any termination of Executive’s employment with the Company, Executive agrees to resign, on the date of Executive’s termination of employment, as an officer and director of the Company and any affiliate of the Company, and as a fiduciary of any benefit plan of the Company or any affiliate of the Company, and to promptly execute and provide to the Company any further documentation, as requested by the Company or any affiliate, to confirm such resignation.

		
1.	NONSOLICITATION/NONDISPARAGEMENT .  During the Period of Employment and for a period thereafter of three (3) years, the Participant shall not, directly or indirectly:	
a. solicit, induce or encourage any employee of the Company or any of its affiliates or subsidiaries to terminate their employment with the Company or any of its affiliates or subsidiaries;
b. make any defamatory public statement concerning the financial performance, products, services, the Board or management personnel of the Company or any of its affiliates or subsidiaries, or Executive’s employment.
2. INVENTIONS ASSIGNMENT AND CONFIDENTIAL INFORMATION .
a. Inventions .  The Company shall own all right, title, and interest to all ideas, concepts, know-how, techniques, processes, methods, inventions, discoveries, developments, innovations, and improvements developed or created by Executive, either solely or jointly with others, both prior to and during the Period of Employment that: (i) are reasonably related to the Company’s or any of its affiliates’ or subsidiaries’ business; (ii) involve the Company’s or any of its affiliates’ or subsidiaries’ actual or demonstrably anticipated research or development; (iii) result from any work performed by Executive for the Company or any of its affiliates or subsidiaries, whether during or prior to the commencement of the Period of Employment; or (iv) incorporate any of the Confidential Information (as defined below) (collectively, “ Inventions ”).  Executive shall immediately and confidentially communicate a description of any Inventions to the Company and to no other party at any time, and if the Company so desires, Executive shall execute all documents and instruments and do all things as may be requested by the Company in order to forever vest all right, title and interest in such Inventions solely in the Company and to obtain such letters of patent, copyrights, registrations or other protections as the Company may, from time to time, desire.  In addition, Executive hereby assigns to the Company all right, title and interest of Executive in and to any present Inventions made, devised, created, invented or discovered, in whole or in part, by Executive.
b. Confidential Information .  During the term of this Agreement and at all times thereafter, Executive shall hold inviolate and keep secret all non-public documents, materials, knowledge or other confidential business or technical information of any nature whatsoever that the Company or any of its affiliates or subsidiaries  has maintained as confidential and that has been disclosed to or developed by him or to which he had access as a result of his employment with the Company or any of its affiliates or subsidiaries, whether during or prior to the commencement of the Period of Employment (hereinafter referred to as “ Confidential Information ”).  Such Confidential Information shall include non-public technical and business information, including, but not limited to, inventions, research and development, engineering, products, designs, manufacture, methods, systems, improvements, trade secrets, formulas, processes, marketing, merchandising, selling, licensing, servicing, pricing, investors, personnel information (including skills, compensation, experience and performance), customer lists and preferences, records, financial information, manuals and/or business plans and strategies.  Executive agrees that all Confidential Information shall remain the sole and absolute property of the Company, unless such information is or becomes publicly available or disclosed by lawful means.  During the term of this Agreement, Executive shall not use, disclose, disseminate, publish, reproduce or otherwise make available such Confidential Information to any person, firm, corporation or other entity, except for the purpose of performing services on behalf of the Company.  Upon the termination of Executive’s employment with the Company for any reason, Executive shall (i) not use, disclose, disseminate, publish, reproduce or otherwise make available such Confidential Information to any person, firm,

corporation or other entity, unless such information is or becomes publicly available or disclosed by lawful means; (ii) return to the Company all property that belongs to or is owned by the Company (including any computer, cell phone, personal digital assistant, keys, security cards, etc.); and (iii) return to the Company all documents, records, compositions, articles, devices, equipment, electronic storage devices and other items that disclose or embody Confidential Information, including all copies or specimens thereof (including electronic copies), whether prepared by him or by others, unless such information is or becomes publicly available or disclosed by lawful means. 
c. Whistleblower Protections .  Notwithstanding Section 7(b) and Section 6(b) or any other provision of this Agreement, (1) Executive may truthfully respond to a lawful and valid subpoena or other legal process, but, subject to clauses (2)-(5) below, shall give the Company the earliest possible notice thereof, shall, as much in advance of the return date as possible, make available to the Company and its counsel the documents and other information sought, and shall assist the Company and such counsel in resisting or otherwise responding to such process, (2) nothing in this Agreement or otherwise limits Executive’s ability to communicate directly with and provide information, including documents, not otherwise protected from disclosure by any applicable law or privilege to the Securities and Exchange Commission (the “ SEC ”) or any other federal, state or local governmental agency or commission (“ Government Agency ”) regarding possible legal violations, without disclosure to the Company, (3) the Company may not retaliate against Executive for any of these foregoing activities, (4) nothing in this Agreement or otherwise requires Executive to waive any monetary award or other payment that Executive might become entitled to from the SEC or any other Government Agency, or (5) nothing in this Agreement precludes Executive from filing a charge of discrimination with the Equal Employment Opportunity Commission or a like charge or complaint with a state or local fair employment practice agency; provided, however, the Executive shall not be entitled to receive a monetary award or any other form of personal relief from the Company in connection with any such charge or complaint that Executive files or that is filed on Executive’s behalf (clauses (1)-(5) collectively, the “ Whistleblower Protections ”).

		
1.	ADDITIONAL ACKNOWLEDGMENTS .  Executive acknowledges that the provisions of Sections 6, 7 and this Section 8 are in consideration of Executive’s employment with the Company and other good and valuable consideration as set forth in this Agreement.  In addition, Executive agrees and acknowledges that the restrictions contained in Sections 6, 7 and this Section 8 do not preclude Executive from earning a livelihood, nor do they unreasonably impose limitations on Executive’s ability to earn a living.  In addition, Executive acknowledges (x) that the business of the Company and its affiliates will be conducted throughout the United States and its territories and beyond, (y) notwithstanding the state of organization or principal office of the Company or any of its affiliates or facilities, or any of their respective executives or employees (including Executive), it is expected that the Company and its affiliates will have business activities and have valuable business relationships within its industry throughout the United States and its territories and beyond, and (z) as part of Executive’s responsibilities, Executive will be traveling throughout the United States and other jurisdictions where the Company and its affiliates conduct business during the Period of Employment in furtherance of the Company’s business relationships.  Executive agrees and acknowledges that the potential harm to the Company and its affiliates of the non-enforcement of any provision of Sections 6, 7 and this Section 8 outweighs any potential harm to Executive of its enforcement by injunction or otherwise.  Executive acknowledges that he has carefully read this Agreement and either consulted with legal counsel of Executive’s choosing	

regarding its contents or knowingly and voluntarily waived the opportunity to do so, has given careful consideration to the restraints imposed upon Executive by this Agreement and is in full accord as to their necessity for the reasonable and proper protection of confidential and proprietary information of the Company and its affiliates now existing or to be developed in the future.  Executive expressly acknowledges and agrees that each and every restraint imposed by this Agreement is reasonable with respect to subject matter, duration and geographical area.
2. SPECIFIC PERFORMANCE .  In the event of the breach or a threatened breach by Executive of any of the provisions of Sections 6, 7 or 8, the Company and its affiliates and subsidiaries would suffer irreparable harm and Executive acknowledges that money damages would not be a sufficient remedy and, in addition and supplementary to other rights and remedies existing in its favor whether under this Agreement or under any other agreement, the Company shall be entitled to specific performance and/or injunctive or other equitable relief from a court of competent jurisdiction in order to enforce or prevent any violations of the provisions hereof (without posting a bond or other security).  In addition, in the event of an alleged breach or violation by Executive of Section 6, the nonsolicit period, shall be tolled until such breach or violation has been duly cured.
3. LITIGATION/AUDIT COOPERATION .  Executive agrees that following the termination of his employment for any reason, for a period of twelve (12) months he shall reasonably cooperate at mutually convenient times and locations in connection with the defense of, or prosecution by, the Company or any of its affiliates with respect to any threatened or pending litigation or in any investigation or proceeding by any Government Agency or body that relates to any events or actions which occurred during the term of Executive’s employment with, or service to, the Company or any of its affiliates or subsidiaries, whether during or prior to the commencement of the Period of Employment.  The Company shall reimburse Executive for reasonable expenses incurred by Executive in connection with such cooperation.  Executive shall be compensated for his time at a mutually agreed upon rate for any services other than the provision of information to the Company or its counsel and/or testifying as a witness, which he shall undertake without any compensation up to a maximum obligation of 120 hours.
4. WAIVER OF BREACH .  The waiver of any breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach.  Each and every right, remedy and power hereby granted to any party or allowed it by law shall be cumulative and not exclusive of any other.
5. SEVERABILITY .  If any of the provisions of this Agreement or the application thereof to any party under any circumstances is adjudicated to be invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision of this Agreement or the application thereof.
6. ENTIRE AGREEMENT .  This Agreement, along with any related documents referenced herein, constitutes the entire agreement between the parties with respect to the subject matter hereof and, subject to the Closing, supersedes and completely and irrevocably terminates any and all other previous or contemporaneous communications, representations, understandings, agreements, negotiations and discussions, either oral or written, between the parties with respect to the subject matter hereof.  The parties acknowledge and agree that there are no written or oral agreements, understandings, or representations, directly or indirectly related to this Agreement or the employment, compensation or benefits of Executive that are not set forth herein.  By executing this Agreement, Executive represents and warrants to the Company that Executive is not subject to any agreement with any current or former employer or consultancy relationship that would prohibit Executive’s acceptance of and performance of his duties and responsibilities under the terms of this Agreement or as contemplated in the future during Executive’s employment with the Company.  Executive agrees that he shall not share any confidential or proprietary information of any prior employer (other than a subsidiary or affiliate of the Company) or consultancy or individual with the Company or the Company’s employees.

7. AMENDMENT OF AGREEMENT .  This Agreement may be altered or amended in any of its provisions only by a written agreement signed by each of the parties hereto.
8. SUCCESSORS .  The Agreement shall inure to the benefit of and be binding on the Company and its successors and assigns, as well as Executive and his estate.  Executive may not assign or delegate, in whole or in part, his duties or obligations under this Agreement.  This Agreement may be transferred and assigned by the Company to any successor of the Company by acquisition, merger, reorganization, amalgamation, asset sale or otherwise.  Upon any assignment of this Agreement by the Company, all obligations of the Company shall terminate, Executive shall become employed by the assignee in accordance with the terms of this Agreement and the term “Company” as used in this Agreement shall include only such assignee.
9. RIGHTS CUMULATIVE .  The Company’s rights under this Agreement are cumulative, and the exercise of one right will not be deemed to preclude the exercise of any other rights.
10. COUNTERPARTS .  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  Photographic copies of such signed counterparts may be used in lieu of the originals for any purpose.
11. CONSTRUCTION .  Each party has cooperated in the drafting and preparation of this Agreement, and therefore, the Agreement shall not be construed against either party on the basis that any particular party was the drafter.
12. VOLUNTARY COUNSEL .  Executive agrees and acknowledges that he has read and understood this Agreement prior to signing it, has entered into this Agreement freely and voluntarily and has been advised to seek legal counsel prior to entering into this Agreement and has had ample opportunity to do so.
13. GOVERNING LAW .  This Agreement shall be construed in accordance with, and governed in all respects by, the internal laws of the State of Tennessee (without giving effect to principles of conflicts of laws).
14. SECTION 409A .
a. The intent of the parties is that payments and benefits under this Agreement be exempt from or comply with Internal Revenue Code Section 409A and the regulations and guidance promulgated thereunder (collectively “ Code Section 409A ”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith.  In no event whatsoever shall the Company or any of its subsidiaries or affiliates be liable for any additional tax, interest or penalty that may be imposed on Executive by Code Section 409A or damages for failing to comply with Code Section 409A.
b. To the extent necessary to comply with Code Section 409A, a termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Code Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment,” “termination of the Employment Period” or like terms shall mean “separation from service.”
c. All expenses or other reimbursements under this Agreement shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by Executive (provided that if any such reimbursements constitute taxable income to Executive, such

reimbursements shall be paid no later than March 15th of the calendar year following the calendar year in which the expenses to be reimbursed were incurred), and no such reimbursement or expenses eligible for reimbursement in any taxable year shall in any way affect the expenses eligible for reimbursement in any other taxable year.  All expenses or other reimbursements under this Agreement are not subject to liquidation or exchange for another benefit.
d. For purposes of Code Section 409A, Executive’s right to receive any installment payment pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments.
e. Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within fifteen (15) days following the Termination Date”), the actual date of payment within the specified period shall be within the sole discretion of the Company.
15. ARBITRATION .
a. In exchange for the benefits of the speedy, economical and impartial dispute resolution procedure of arbitration, the Company and Executive, with the advice and consent of their selected counsel, choose to forego their right to resolution of their disputes in a court of law by a judge or jury, and instead elect to treat their disputes, if any, pursuant to the Federal Arbitration Act.
b. Executive and the Company agree that any and all claims or controversies whatsoever brought by Executive or the Company, arising out of or relating to this Agreement or Executive’s employment with the Company, will be settled by final and binding arbitration in Knoxville, Tennessee or such other location as may be mutually agreed by parties in accordance with the Employment Arbitration Rules and Procedures of Judicial Arbitration and Mediation Services, Inc. (“ JAMS ”) then in effect.  This includes all claims whether arising in tort or contract and whether arising under statute or common law.  Such claims may include, but are not limited to, those relating to this Agreement, wrongful termination, retaliation, harassment, or any statutory claims under Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act, the Americans with Disabilities Act, or similar Federal or state statutes.  In addition, any claims arising out of the public policy of Tennessee, any claims of wrongful termination, employment discrimination, retaliation, or harassment of any kind, as well as any claim related to the termination or non-renewal of this Agreement shall be arbitrated under the terms of this Agreement.  The obligation to arbitrate such claims will survive the termination of this Agreement.  To the extent permitted by law, the hearing and all filings and other proceedings shall be treated in a private and confidential manner by the arbitrator and all parties and representatives, and shall not be disclosed except as necessary for any related judicial proceedings.
c. The arbitration will be conducted before an arbitrator to be mutually agreed upon by the parties from JAMS’ panel of arbitrators.  In the event that the parties are unable to mutually agree upon the arbitrator, JAMS shall provide a slate of five arbitrators with experience in employment law and each party shall have the opportunity to strike two names and rank the remaining arbitrators in order of preference.  JAMS shall then select the highest ranked arbitrator to preside over the arbitration.  If JAMS is unable to provide an arbitrator who has experience in employment law, the parties may jointly or separately petition the court for appointment of an arbitrator with such experience.  The arbitrator will have jurisdiction to determine the arbitrability of any claim.  The arbitrator shall have the authority to grant all monetary or equitable relief (including, without limitation, injunctive relief, ancillary costs and fees, and punitive damages) available under state and Federal law.  Judgment on any award rendered by the arbitrator may be entered and enforced

by any court having jurisdiction thereof.  In addition to any other relief awarded, the prevailing party in any arbitration or court action covered by this Agreement, as determined by the arbitrator or court in a final judgment or decree, shall be entitled to recover costs, expenses, and reasonable attorneys’ fees to the extent permitted by law.

  IN WITNESS WHEREOF , the parties have executed this Agreement on the date and year first above written.

			
 	 	COBALT BOATS, LLC	
 	 	By: /s/ William J. Wallisch	
 	 	Name: William Wallisch	
 	 	Title: Chief Financial Officer	
 	 	 	
 	 	EXECUTIVE	
 	 	 	
 	 	/s/ William Paxson St. Clair, Jr.	
 	 	William Paxson St. Clair, Jr.	

 

EXHIBIT A
SETTLEMENT AND GENERAL RELEASE AGREEMENT
THIS SETTLEMENT AND GENERAL RELEASE AGREEMENT (this “ Agreement ”) is entered into effective as of the ___________ day of _____ , 20___ , by and between William Paxson St. Clair, Jr. (“ Executive ”) and Cobalt Boats, LLC. (the “ Company ”) (hereinafter sometimes collectively referred to as the “ Parties ”).  In consideration of the mutual promises and covenants contained in this Agreement, Executive and the Company contract and agree as follows:

1.	BENEFITS .	
a. General .  The Company promises that I will receive the benefits set forth in the employment agreement entered into with the Company effective as of_____, 20___ (the “ Employment Agreement ”), if any, after I execute and return this Agreement to the Company as provided in Section 4.  I acknowledge that the Company is not otherwise required to provide me such benefits until such conditions have been met.
b. Sufficiency of Consideration .  I acknowledge and agree that the benefits to be provided under the terms of the Agreement are sufficient consideration for Executive’s promises set out herein and are made in confidence and in settlement of any disputed claims for which the Company has asserted factual and affirmative defenses and denies same in the entirety.
c. Payment .  If the requirements of the Employment Agreement and this Agreement are met, in accordance with their terms, the Company will provide payment in an amount equal to $_____, minus any applicable taxes and withholding, payable as provided in Section 5(d)(2) of the Employment Agreement.
d. Taxes .  I acknowledge that I have had the opportunity to receive, and to the extent desired, have received independent professional advice from my own tax advisor with respect to the tax consequences of entering into this Agreement.  I acknowledge and agree that the Company has made no representations regarding the tax consequences of any amounts paid pursuant to this Agreement.  I agree that I will be solely and ultimately responsible for paying any federal, state or other taxes that I may owe as a result of payments made pursuant to this Agreement.  In addition, I agree to hold the Company harmless from, and to indemnify the Company for, any claims, demands, taxes, deficiencies, fines, penalties, levies, assessments, executions, judgments, interest, costs, or any recoveries by any governmental agency against the Company for any amounts claimed due on account of this Agreement as a result of improper allocations or my failure to report and/or pay taxes as legally required.
		
1.	COMPLETE RELEASE .	
a. General .  In exchange for the Company’s promises contained in this Agreement, I, on behalf of myself and all my heirs, successors, and assigns, agree to irrevocably and unconditionally release any and all Claims I may now have against the Company and other parties as set forth in this Section 2.
b. Released Parties .  The “ Released Parties ” are the Company, all related companies, partnerships, subsidiaries, predecessors, and assigns, their parents and subsidiaries, or joint ventures, and, with respect to each of them, their predecessors and successors; and, with respect to each such entity, all of its past and present employees, officers, directors, stockholders, owners, representatives, assigns,

attorneys, agents, insurers, employee benefit programs (and the trustees, administrators, fiduciaries, and insurers of such programs), and any other persons acting by, through, under or in concert with any of the persons or entities listed in this subsection.
c. Claims Released .  I understand and agree that I am releasing all known and unknown claims, promises, causes of action, grievances, or similar rights of any type that I may have against any Released Party related to my employment with the Company under any Tennessee or Kansas law, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with Disabilities Act, the Family and Medical Leave Act, the Employee Retirement and Income Security Act of 1974, and all other federal, state, or local laws or regulations prohibiting employment discrimination or retaliation or protecting employee rights as well as claims for other tortious or unlawful conduct (the “ Claims ”).  I am not, however, releasing any claim that relates to: (i) my right to enforce this Agreement; (ii) my right, if any, to claim government-provided unemployment benefits; or (iii) any rights or claims which may arise or accrue after I sign this Agreement. 
d. Whistleblower Protections .  The Whistleblower Protections (as defined in the Employment Agreement) shall apply equally to this Agreement, and all of the provisions of this Agreement are subject to the Whistleblower Protections.
e. Knowing and Voluntary .  I represent and agree that I have thoroughly considered all aspects of this Agreement, that I have had the opportunity to discuss this matter with my attorney, that I have read carefully and understand fully all of the provisions of this Agreement and that I am entering into this Agreement voluntarily.  I further understand that the Company is relying on this and all other representations that I have made herein.
2. PROMISES .
a. Pursuit of Released Claims .  Except as specifically identified above, I have not filed or caused to be filed any lawsuit, complaint, or charge with respect to any Claim this Agreement purports to waive, and I promise never to file or prosecute a lawsuit or complaint based on such Claims. 
b. Ownership of Claims .  I have not assigned or transferred any Claim I am releasing, nor have I purported to do so.
c. Nonadmission of Liability .  I agree that this Agreement is not an admission of guilt or wrongdoing by any Released Party and I acknowledge that the Released Parties deny that they have engaged in wrongdoing of any kind or nature.
d. No Further Employment or Benefits .  I agree that my employment with the Company has ended, and that I forever waive and relinquish any and all claims, rights, or interests in reinstatement or future employment that I might have in the future with the Company or its successors, predecessors, parents, subsidiaries, and related or affiliated entities.
e. Confidentiality .  I agree that I have not and will not disclose the underlying facts that led up to this Agreement or the terms, amount, or existence of this Agreement to anyone other than a member of my immediate family, attorney, or other professional advisor and, even as to such a person, only if the person agrees to honor this confidentiality requirement.  Such a person’s violation of this confidentiality requirement will be treated as a violation of this Agreement by me.  This subsection does not prohibit my disclosure of the terms, amount, or existence of this Agreement to the extent necessary legally to enforce this Agreement, nor does it prohibit disclosures to the extent otherwise legally required.  I acknowledge that the Company would be irreparably harmed if this subsection were violated.  I agree that if asked

about the status of my claims against the Company, I will agree to reply, if at all, by saying only that all such claims have been resolved and the underlying action dismissed.
		
3.	REVIEW AND REVOCATION .	
I acknowledge and understand that I have twenty-one (21) days to review and consider this Agreement before signing it.  No discussions about, or changes to, this Agreement will restart the running of said twenty-one (21) day period.  I understand that I may use as much of this twenty-one (21) day period as I wish prior to signing and that I may revoke this Agreement within seven (7) days of signing it.  Revocation can be made by delivering a written notice of revocation to _______________, Malibu Boats, Inc., 5075 Kimberly Way, Loudon, TN 3774.  For this revocation to be effective, written notice must be received no later than the close of business on the seventh day after I sign this Agreement.  If I revoke this Agreement, it shall not be effective or enforceable and I will not receive the benefits described herein nor shall I or the Company be bound by any representations, releases or agreements made herein.

1.	MISCELLANEOUS .	
a. Entire Agreement .  This, in conjunction with the Employment Agreement, is the entire agreement between the Company and me, and such agreement supersedes and renders void any prior agreements I may have with the Company or its affiliates pertaining to the subject matter hereof.  This Agreement may not be modified or canceled in any manner except by a writing signed by both an authorized Company official and me.  I acknowledge that the Company has made no representations or promises to me, other than those in the Employment Agreement and this Agreement.  If any provision in this Agreement is found to be unenforceable, all other provisions will remain fully enforceable.  I agree to sign any documents and take other action that is necessary in the future to implement this Agreement.
b. Successors .  This Agreement binds my heirs, administrators, representatives, executors, successors, and assigns, and will inure to the benefit of all Released Parties and their respective heirs, administrators, representatives, executors, successors, and assigns.
c. Interpretation .  This Agreement shall be construed as a whole according to its fair meaning.  It shall not be construed strictly for or against any Released Party or me.  Unless the context indicates otherwise, the singular or plural number shall be deemed to include the other Captions are intended solely for convenience of reference and shall not be used in the interpretation of this Agreement.  This Agreement shall be governed by the laws of the State of Tennessee.
d. Counterparts .  This Agreement and any amendments hereto may be executed in multiple counterparts by the parties.  Each counterpart shall be deemed an original, but all counterparts together shall constitute one and the same instrument.  Photographic copies of such signed counterparts may be used in lieu of the originals for any purpose.
PLEASE READ THIS AGREEMENT AND CAREFULLY CONSIDER ALL OF ITS PROVISIONS BEFORE SIGNING: THIS SETTLEMENT AND GENERAL RELEASE INCLUDES A RELEASE OF KNOWN AND UNKNOWN CLAIMS.
Executed this _________ day of__________, 20___.
__________________________________________
Executive

Exhibit 99.1

Malibu Boats, Inc. Announces Agreement to Acquire Cobalt Boats, LLC
		
•	Combines two premium, best-in-class recreational boating brands, further strengthening Malibu's leading position in the powerboat industry	
		
•	Cobalt's comprehensive portfolio of quality products provides Malibu greater scale and a more balanced portfolio	
		
•	Adds a complementary distribution network allowing for more market opportunities across multiple segments within the recreational boating industry	
		
•	Combined business anticipated to deliver approximately $7.5 million in synergies and operational improvements expected to be realized by the fourth year post-closing, and approximately $18 million in expected tax benefits	
		
•	Expected to be accretive to Malibu's earnings per share, excluding purchase accounting and acquisition costs, in fiscal year 2018	
Malibu Boats, Inc. (NASDAQ: MBUU) ("Malibu" or the "Company") announced today that it has entered into a definitive agreement to acquire Cobalt Boats, LLC ("Cobalt"), a privately held, leading manufacturer and distributor of premium sterndrive and outboard boats for an aggregate purchase price of $130 million, subject to customary adjustments for the amount of working capital in the business at the closing date and subject to adjustment for any judgment or settlement in connection with a pending litigation matter between Cobalt and Sea Ray Boats, Inc. and Brunswick Corporation.
Founded in 1968, Cobalt is the market leader in the mid to large-sized sterndrive boat market and their recent expansion into the surf and outboard markets provides further opportunities for Cobalt to reach additional customers. Cobalt manufactures and sells water sport boats, cruisers, bowriders and outboard boats for cruising, skiing, entertainment, surfing, fishing and other recreational uses on lakes, rivers, intercoastal waterways and oceans. Cobalt is a world class brand with a product portfolio of twenty-four models across six proprietary, industry-leading series. Cobalt sells its boats through a well-established dealer network of 132 locations in the United States, Canada, and overseas. For the last 12 months ended March 31, 2017, Cobalt generated approximately $140 million in net sales.
"It is hard to know where to start, given how positive we are about this opportunity. We are excited at the prospect of combining two iconic brands with extensive dealer networks, leading market shares, and strong product innovation. We are very excited about bringing Cobalt, its proven management and experienced employees into the Malibu family. Cobalt is a well-recognized market leader and world class brand with a rich history of delivering performance, innovation and uncompromising quality. In addition, the St. Clair family is known for their passion and integrity and this has been proven and re-proven throughout this process," said Malibu's Chief Executive Officer, Jack Springer.
Mr. Springer continued, "This acquisition is consistent with our disciplined, long term growth strategy, and we believe it provides us with an immediate leadership position in a key segment of the recreational boating industry, while allowing us to diversify our product offering and tap into an exceptionally strong dealer network to accelerate Malibu's growth and profitability. The addition of Cobalt will expand our distribution footprint and allow us to grow both brands across the combined dealer network presenting both customer bases with an array of product offerings. The addition of Cobalt will also provide us with a number of vertical integration and market opportunities that we believe will create significant value for our stakeholders."

Cobalt's Chief Executive Officer, Paxson St. Clair commented, "This is an outstanding opportunity for Cobalt, our employees, and our dealer network. As our focus has always been on the long term success of the company, Malibu brings us a new level of opportunity through accelerated growth and brand awareness. I look forward to working with the Malibu team and continuing our legacy of market leadership."
Transaction Overview
Following the completion of the transaction, Malibu, with its headquarters in Loudon, Tennessee, will maintain an important and visible presence in Neodesha, Kansas, Cobalt's headquarters. Paxson St. Clair will continue to lead the Cobalt business as its President, and he will become a Director on Malibu's Board of Directors, subject to and effective upon completion of the transaction .
Malibu expects that by the end of the fourth year of operations after the completion of the transaction, the combined business will achieve a run rate of approximately $7.5 million in cost and operational synergies. These synergies will be primarily derived from identified opportunities in product management, operating efficiencies and vertical integration opportunities.
The transaction is expected to be accretive to Malibu's earnings per share in fiscal year 2018, excluding purchase accounting adjustments and acquisition costs . In connection with the transaction, Malibu expects to benefit from tax attributes valued on a present value basis at approximately $18 million.
The transaction is expected to close in early July, subject to customary closing conditions. Malibu will fund the transaction through borrowings under a new second amended and restated credit facility.
Moelis & Company LLC is acting as Malibu's financial advisor and O'Melveny & Myers LLP is acting as Malibu's legal counsel. Raymond James & Associates, Inc. is acting as Cobalt's financial advisor and Foulston Siefkin LLP is acting as Cobalt's legal counsel.
Call and Webcast Information
Malibu Boats, Inc. will host a conference call and webcast on June 29, 2017 at 8:30 a.m. Eastern time to further discuss the Cobalt acquisition. The call will be hosted by Jack Springer, Chief Executive Officer, Wayne Wilson, Chief Financial Officer, and Ritchie Anderson, Chief Operating Officer. A slide presentation and link to the webcast will be posted on the Malibu Investor Relations website at http://investors.malibuboats.com . Investors and analysts can participate on the conference call by dialing (855) 433-0928 or (484) 756-4263 and using Conference ID #48299964.
Alternatively, interested parties can listen to a live webcast of the conference call by logging on to the Investor Relations section on the Company's website at http://investors.malibuboats.com . A replay of the webcast will also be archived on the Company's website for twelve months.
About Malibu Boats, Inc.
Malibu Boats is a leading designer, manufacture r and marketer of performance sport boats, with the #1 market share position in the United States since 2010. The Company has two brands of performance sport boats, Malibu and Axis Wake Research (Axis). Since inception in 1982, the Company has been a consistent innovator in the powerboat industry, designing products that appeal to an expanding range of recreational boaters and water sports enthusiasts whose passion for boating and water sports is a key aspect of their lifestyle.
Forward Looking Statements
This press release includes forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Forward-looking statements ca n be identified by such words and phrases as “believes,” “anticipates,” “expects,” “intends,” “estimates,” “may,” “will,” “should,” “continue” and similar

expressions, comparable terminology or the negative thereof, and includes the statements in this press release regarding the expected timing for the closing of the transaction and the expected financial and business impact of the transaction, including the expected impact on Malibu's earnings per share for fiscal year 2018, tax benefits and cost and operational synergies and the timeline for achieving such synergies.
Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from th ose expressed or implied in the forward-looking statements, including, but not limited to: the satisfaction of the closing conditions to the transaction and conditions for borrowing under the new second amended and restated credit facility, our ability to efficiently integrate the operations and business of Cobalt upon completion of the transaction, general industry, economic and business conditions, demand for our products, changes in consumer preferences, competition within our industry, our reliance on our network of independent dealers, our ability to manage our manufacturing lev els and our large fixed cost base, the successful introduction of our new products, and other factors affecting us detailed from time to time in our filings with the Securities and Exchange Commission. Many of these risks and uncertainties are outside our control, and there may be other risks and uncertainties which we do not currently anticipate because they relate to events and depend on circumstances that may or may not occur in the future. Although we believe that the expectations reflected in any forward-looking statements are based on reasonable assumptions at the time made, we can give no assurance that our expectations will be achieved. Undue reliance should not be placed on these forward-looking statements, which speak only as of the date hereof. We undertake no obligation (and we expressly disclaim any obligation) to update or supplement any forward-looking statements that may become untrue because of subsequent events, whether because of new information, future events, changes in assumptions or otherwise.     

Malibu Boats, Inc. Acquisition of Cobalt Boats, LLC June 2017 Exhibit 99.2 

 

Forward Looking Statements This presentation includes forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Forward-looking statements can be identified by such words and phrases as “believes,” “anticipates,” “expects,” “intends,” “estimates,” “may,” “will,” “should,” “continue” and similar expressions, comparable terminology or the negative thereof, and includes the statements in this presentation regarding the expected timing for the closing of the transaction and the expected financial and business impact of the transaction, including the expected impact on Malibu’s earnings per share for fiscal year 2018, tax benefits, de- leveraging and cost and operational synergies and the timeline for achieving such synergies. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward- looking statements, including, but not limited to: the satisfaction of the closing conditions to the transaction and conditions for borrowing under the new second amended and restated credit facility, our ability to efficiently integrate the operations and business of Cobalt upon completion of the transaction, general industry, economic and business conditions, demand for our products, changes in consumer preferences, competition within our industry, our reliance on our network of independent dealers, our ability to manage our manufacturing levels and our large fixed cost base, the successful introduction of our new products, and other factors affecting us detailed from time to time in our filings with the Securities and Exchange Commission. Many of these risks and uncertainties are outside our control, and there may be other risks and uncertainties which we do not currently anticipate because they relate to events and depend on circumstances that may or may not occur in the future. Although we believe that the expectations reflected in any forward-looking statements are based on reasonable assumptions at the time made, we can give no assurance that our expectations will be achieved. Undue reliance should not be placed on these forward-looking statements, which speak only as of the date hereof. We undertake no obligation (and we expressly disclaim any obligation) to update or supplement any forward-looking statements that may become untrue because of subsequent events, whether because of new information, future events, changes in assumptions or otherwise. 2 

 

3 Agenda • Transaction Overview and Rationale • Cobalt Boats Overview • Financial Summary • Closing Comments 

 

Transaction Overview and Rationale 

 

5 Transaction Overview • Acquiring Cobalt Boats, LLC (“Cobalt”); expect early July 2017 close • Market leading manufacturer of premium water sport boats, cruisers, bowriders and outboard boats • ~$140 million in sales (LTM March 31, 2017) • $130 million purchase price; including estimated $18 million NPV of future tax benefits • Accretive to EPS in FY2018, excluding purchase accounting/acquisition costs • Synergies through operations, vertical integration and product management • Cobalt to maintain existing operational footprint in Kansas Addition of Another World Class Brand to MBUU 

 

6 Transaction Rationale ATTRACTIVE TARGET • Unique opportunity to acquire an industry leader of meaningful size • World class brand known for exceptional quality for 50 years • Some Whitespace growth opportunities • Strengthens MBUU position in overall powerboat industry LEVERAGES MALIBU CORE COMPETENCIES • Opportunities for operational and margin improvement are real and impactful • Product similarities provide opportunity to leverage existing vertical integration • Product differences will allow for market expansion • Enhance strategic leadership and velocity of product development and innovation INTEGRATION • Maintain successful operational footprint in Kansas • Very similar business with familiar design, production, distribution and market dynamics • Implement Malibu’s aggressive leadership and management to drive value ATTRACTIVE FINANCIAL PROFILE • Attractive purchase price multiple and significant tax benefits • Accretive to EPS in FY2018, excluding purchase accounting adjustments and acquisition costs • Limited leverage with rapid deleveraging 

 

7 Cobalt Boats Overview 

 

8 Business Overview Business Summary • Founded in 1968 by the St. Clair family • Comprehensive product portfolio − Six series with 24 models ranging from 20’ – 40’ • Retail prices range from ~$50k to ~$700k − ~$80k average price • Dealer network with 132 locations • ~600 employees • Based in Neodesha, Kansas Strategic Focus • Culture of excellence focused on the customer • Reputation for performance and quality • Innovative new product pipeline, including wake surf technology and outboard saltwater models Sales by Series FY161 Net Sales: $135 million 1. Fiscal year ended September 30th * Includes discontinued pontoon business. Watersports Outboard* Premium Sterndrive Entry Sterndrive 

 

9 World Class Brand with Growth Potential Entry Sterndrive Premium Sterndrive Outboard Pontoon Series Watersports Significant Growth Opportunities Strong Core Business 

 

10 Leading & Defensible Market Position with a Globally Recognized Brand • Cobalt is the market leader in large sterndrive boats with a market share of 29.5% in 24’-29’ length segment • Top distribution with a large percentage of dealers with #1 or #2 market share • Strong brand and market penetration in core segment provides opportunity in adjacent segments − Expansion in offerings in varying price points and foot lengths present significant opportunity − Expansion into outboard fiberglass is a logical brand extension Source: Statistical Surveys, Inc. LTM as of 3/31/17. 29.5% 14.9% 13.3% 8.6% 8.6% 7.4% 17.7% OTHERS #1 U.S. 24’-29’ Sterndrive Market Share 

 

11 Financial Summary 

 

12 Financial Summary PURCHASE PRICE • $130 million purchase price, subject to certain adjustments • Attractive purchase price multiple and significant estimated tax benefits EARNINGS / MARGINS AND SYNERGIES • Accretive to EPS in FY2018, excluding purchase accounting/acquisition costs • Significant margin expansion opportunity • Synergies of $7.5 million by the fourth year TAXES • Asset basis step up in transaction provides estimated $18 million NPV of future tax benefits FUNDING • Funded through cash on hand and borrowing under amended and restated credit agreement • Delayed draw term loan will be used to close acquisition in July INTEGRATION • Minimal risk anticipated • Cobalt continues to operate in Kansas • MBUU team to provide best practices to enhance operations 

 

Closing Comments 

 

14 Closing Comments • Acquisition of significant scale and opportunity • World class, market leading brand with significant growth opportunities • Consistent with our stated strategic approach to acquisitions • Enhanced diversity in distribution and product offering • Similar business model allows us to use our well developed playbook • Synergy through operations, vertical integration and product management • Malibu has been preparing our team for this type of opportunity for years • Accretive to EPS in FY2018, excluding purchase accounting/acquisition costs Disciplined and patient acquisition approach has resulted in a unique opportunity of scale to drive returns