Exhibit 10.1

EXECUTION VERSION

FLORIDA DOCUMENTARY STAMP TAXES IN THE AMOUNT OF $2,450.00 HAVE BEEN OR WILL BE PAID DIRECTLY TO THE FLORIDA DEPARTMENT OF REVENUE.

THIRD AMENDMENT TO
THIRD AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

This THIRD AMENDMENT TO THIRD AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT, dated as of August 22, 2022 (this “Amendment”), among FRANCHISE GROUP, INC., a Delaware corporation (“FRG”), VALOR ACQUISITION, LLC, a Delaware limited liability company, FRANCHISE GROUP NEWCO INTERMEDIATE AF, LLC, a Delaware limited liability company, FRANCHISE GROUP NEWCO PSP, LLC, a Delaware limited liability company, each as a Borrower (as defined in the ABL Loan Agreement (as defined below)), the other Borrowers party to the ABL Loan Agreement, the Guarantors (as defined in the ABL Loan Agreement) party to the ABL Loan Agreement, W.S. Badcock Corporation, a Florida corporation (the “Joining Borrower”), each of the Lenders party to the ABL Loan Agreement on the date hereof and JPMORGAN CHASE BANK, N.A., in its capacities as administrative agent and collateral agent (in such capacities, the “Agent”), which amends that certain Third Amended and Restated Loan and Security Agreement, dated as of March 10, 2021 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time prior to the date hereof, the “ABL Loan Agreement”), by and among FRG, the other Borrowers from time to time party thereto, the Guarantors from time to time party thereto, the Lenders from time to time party thereto and the Agent. Capitalized terms used and not otherwise defined herein shall have the meanings assigned to them in the Amended ABL Loan Agreement (as defined below).

WHEREAS, Section 11.4 of the ABL Loan Agreement permits certain amendments to the ABL Loan Agreement with the consent of the Borrowers, the Agent, the Issuing Bank, the Swingline Lender and each of the Lenders, including the amendments contemplated herein; and

WHEREAS, each Borrower, the Agent, the Issuing Bank, the Swingline Lender and each of the Lenders desire to enter into this Amendment in order to effect the amendments to the ABL Loan Agreement contemplated herein, in each case, on the terms and subject to the conditions set forth in Section 2.

NOW, THEREFORE, in consideration of the mutual agreements herein contained and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto agree as follows:

Section 1.                   Amendments to the ABL Loan Agreement. Subject to the satisfaction (or waiver by the Lenders) of the conditions set forth in Section 2, the ABL Loan Agreement (including Schedule 1A, but, subject to Section 3(a) below, excluding all other Schedules and Exhibits thereto, which shall remain as in effect immediately prior to the Third Amendment Effective Date), shall be amended by inserting the language indicated in double underlined text (indicated textually in the same manner as the following example: underlined text) in Exhibit A hereto and by deleting the language indicated by strikethrough text (indicated textually in the same manner as the following example: stricken text) in Exhibit A hereto (the ABL Loan Agreement, as so amended, including pursuant to Section 3(a) below, the “Amended ABL Loan Agreement”).

Section 2.                   Conditions to Effectiveness. The effectiveness of this Amendment is subject only to the satisfaction (or waiver by the Lenders) of the following conditions precedent (the date on which such conditions have been satisfied (or waived by the Lenders), the “Third Amendment Effective Date”):

(a)                the Agent shall have received (i) executed counterparts of this Amendment from each Loan Party, the Agent, the Issuing Bank, the Swingline Lender and each of the Lenders, (ii) a duly executed certificate from an Authorized Officer of the Administrative Borrower certifying that the conditions precedent set forth in clauses (b) and (c) of this Section 2 have been satisfied as of the Closing Date and (iii) such legal opinions, certificates, documents, instruments and agreements as the Agent shall reasonably request in connection with this Amendment, all in form and substance satisfactory to the Agent and its counsel;

(b)                all representations and warranties contained in the Amended ABL Loan Agreement and in the other Financing Agreements shall be true and correct in all material respects with the same effect as though such representations and warranties had been made on and as of the Third Amendment Effective Date and after giving effect to this Amendment, except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties shall have been true and accurate on and as of such earlier date);

(c)                no Default or Event of Default shall exist or have occurred and be continuing on and as of the Third Amendment Effective Date and immediately after giving effect to this Amendment;

(d)                the Agent shall have received the deliverables contemplated by Section 9.23(a)(ii) of the ABL Loan Agreement with respect to the Joining Borrower and such other documents, instruments and agreements as the Agent shall reasonably request in connection with Section 3, all in form and substance satisfactory to the Agent and its counsel; and

(e)                the Agent shall have received all fees and other amounts due and payable on or prior to the date hereof, including, to the extent invoiced at least one Business Day prior to the Third Amendment Effective Date, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrowers under the Amended ABL Loan Agreement in connection with this Amendment.

Section 3.                   Joining Borrower Joinder.

(a)                The Joining Borrower hereby acknowledges, agrees and confirms that, by its execution of this Amendment, the Joining Borrower will be deemed to be a “Borrower” for all purposes of the Amended ABL Loan Agreement and shall have all of the obligations of a Borrower thereunder as if the Joining Borrower had executed the Amended ABL Loan Agreement. The Joining Borrower hereby ratifies, as of the Third Amendment Effective Date, and agrees to be bound by, all of the terms, provisions and conditions contained in the Amended ABL Loan Agreement applicable to a Borrower, including, without limitation, (a) all of the representations and warranties of the Borrowers and each Guarantor set forth in Section 8 of the Amended ABL Loan Agreement and (b) all of the covenants set forth in Section 7 and Section 9 of the Amended ABL Loan Agreement. Without limiting the generality of the foregoing terms of this paragraph 1, the Joining Borrower (i) is hereby made a party to the Amended ABL Loan Agreement and the other Financing Agreements as a Borrower thereunder with the same force and effect as if originally named therein as a Borrower and the Joining Borrower hereby jointly and severally assumes and agrees to pay and perform all obligations of a Borrower under the Amended ABL Loan Agreement and each of the other Financing Agreements, (ii) hereby jointly and severally agrees to pay in full the Obligations as set forth in Section 2.7 of the Amended ABL Loan Agreement, and (iii) hereby expressly assumes all obligations and liabilities of a Borrower under the Amended ABL Loan Agreement and hereby assigns and transfers to the Agent, and hereby grants to the Agent pursuant to Section 5 of the Amended ABL Loan Agreement, for the ratable benefit of the Secured Parties, a security interest in the Collateral now owned or hereafter acquired by the Joining Borrower. Solely with respect to the Joining Borrower, each of Schedules 1D, 1E, 5.2(g), 8.2(a), 8.2(b), 8.4, 8.6, 8.10, 8.11(a), 8.11(c), 8.12, 8.13, 8.15, 8.16, 8.25, 9.9, 9.10, 9.12 and 9.16 is hereby supplemented with the Schedules attached hereto as Exhibit B, with each reference in the Amended ABL Loan Agreement to such Schedules being as of the Third Amendment Effective Date (instead of the Closing Date) with respect to the Joining Borrower.

(b)                The Joining Borrower hereby represents and warrants that each of the representations and warranties contained in Section 8 of the Amended ABL Loan Agreement is true and correct in all material respects (without duplication of any materiality qualifier) on and as the Third Amendment Effective Date (after giving effect to this Amendment and the other documents executed in connection with this Amendment) as if made on and as of such date except to the extent that such representations and warranties are expressly made as of a particular date, in which case such representations and warranties were true and correct in all material respects (without duplication of any materiality qualifier) as of such date.

(c)                The address of the Joining Borrower for purposes of Section 13.3 of the Amended ABL Loan Agreement is as follows:

Franchise Group, Inc.

109 Innovation Court, Suite J

Delaware, Ohio 43015

Attention: Brian Kahn

Email: bkahn@franchisegrp.com

with a copy, which shall not constitute notice, to:

W.S. Badcock Corporation

200 Phosphate Blvd., N.W.

Mulberry, FL 33860

Attention: Mitchell P. Stiles, Senior Vice President- Retail Operations

E-mail Address: Mitchell.Stiles@badcock.com

(863) 425-7506

with a copy, which shall not constitute notice, to:

W.S. Badcock Corporation

200 Phosphate Blvd., N.W.

Mulberry, FL 33860

Attention: Shannon Collins, Vice President and Deputy General Counsel

E-mail Address: shannon.collins@badcock.com

(863) 869-7957

(d)                The Joining Borrower hereby waives acceptance by the Agent and the Secured Parties of the obligations of the Joining Borrower upon the execution of this Amendment by the Joining Borrower.

Section 4.                   New Lender; Prepayment.

(a)                BMO Harris Bank N.A. (the “New Lender”), the Agent, the Issuing Bank, the Swingline Lender and the Borrowers agree that, subject to the satisfaction of each condition precedent set forth in Section 2, from and after the Third Amendment Effective Date, (i) the New Lender shall be a party to the Amended ABL Loan Agreement as a Lender and is subject to all rights and obligations of a Lender under the Amended ABL Loan Agreement and any other documents or instruments delivered pursuant thereto to the extent of its respective Pro Rata Share, (ii) the New Lender’s Revolving Commitment is in the amount of $100,000,000, (iii) Schedule 1A to the Amended ABL Loan Agreement is hereby to be amended to reflect such Revolving Commitment pursuant to Section 1 and (iv) to the extent permitted under applicable law, the New Lender shall be entitled to the benefits of, and shall be deemed to have assumed, to the extent of its respective Pro Rata Share, all claims, suits, causes of action and any other right of a Lender against any Person, whether known or unknown, arising under or in connection with the Amended ABL Loan 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.

(b)                Subject to the satisfaction of each condition precedent set forth in Section 2, on the Third Amendment Effective Date, the New Lender shall fund its respective Pro Rata Share of the Loans outstanding as of such date (other than the “Eurodollar Rate Loans” (as defined in the ABL Loan Agreement immediately prior to the effectiveness of the Second Amendment) outstanding on the Third Amendment Effective Date) by making such amount available to the Agent at its payment office at 10 South Dearborn Street, Floor L2, Chicago, Illinois or at such other office as agreed to by the Agent, in immediately available funds, and the Agent shall disburse such amounts to each Lender in such amounts as are necessary to cause each Lender to hold its respective Pro Rata Share of all outstanding Loans after giving effect thereto.

(c)                The New Lender (i) represents and warrants that (A) it has full power and authority, and has taken all action necessary, to execute and deliver this Amendment and to consummate the transactions contemplated hereby and to become a Lender under the Amended ABL Loan Agreement, (B) it satisfies the requirements, if any, specified in the Amended ABL Loan Agreement that are required to be satisfied by it in order to become a Lender, (C) from and after the Third Amendment Effective Date, it shall be bound by the provisions of the Amended ABL Loan Agreement as a Lender thereunder and, to the extent of its respective Pro Rata Share, shall have the obligations of a Lender thereunder, (D) it has received a copy of the Amendment ABL Loan Agreement, together with copies of the most recent financial statements delivered pursuant to Section 9.6 thereof and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Amendment on the basis of which it has made such analysis and decision independently and without reliance on the Agent or any other Lender and (E) if it is a Foreign Lender, attached to this Amendment is any documentation required to be delivered by it pursuant to the terms of the Amended ABL Loan Agreement, duly completed and executed by the New Lender; and (ii) agrees that (A) it will, independently and without reliance on the Agent 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 Financing Agreements, and (B) it will perform in accordance with their terms all of the obligations which by the terms of the Financing Agreements are required to be performed by it as a Lender.

(d)                FRG hereby irrevocably notifies the Agent that, on the day immediately following the Third Amendment Effective Date (such day, the “Prepayment Date”), the Borrowers shall prepay the principal amount of all “Eurodollar Rate Loans” (as defined in the ABL Loan Agreement immediately prior to the effectiveness of the Second Amendment) outstanding on the Third Amendment Effective Date, together with all accrued interest thereon to the extent required by Section 3.1 of the Amended ABL Loan Agreement. Each Lender hereby waives (i) the notice requirement set forth in Section 2.9(b) of the Amended ABL Loan Agreement for prepayments of such Loans and (ii) the notice requirement set forth in Section 2.11(a) of the Amended ABL Loan Agreement with respect to any Loans borrowed on the Prepayment Date to repay such Loans.

Section 5.                   Amendments; Counterparts. This Amendment may not be amended or waived except by an instrument in writing signed by each of the parties party hereto. This Amendment may be executed by one or more of the parties hereto on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to this Amendment shall be deemed to include Electronic Signatures (as defined below), deliveries 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, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be. “Electronic Signatures” means any electronic symbol or process attached to, or associated with, any contract or other record and adopted by a person with the intent to sign, authenticate or accept such contract or record.

Section 6.                   Governing Law, Jurisdiction and Waiver of Right to Trial by Jury. THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS AMENDMENT AND ANY DISPUTE ARISING OUT OF THE RELATIONSHIP BETWEEN THE PARTIES HERETO, WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK BUT EXCLUDING ANY PRINCIPLES OF CONFLICTS OF LAW OR OTHER RULE OF LAW THAT WOULD CAUSE THE APPLICATION OF THE LAW OF ANY JURISDICTION OTHER THAN THE LAWS OF THE STATE OF NEW YORK. The jurisdiction, service of process, and waiver of right to trial by jury provisions in Section 11.1 of the ABL Loan Agreement are incorporated herein by reference mutatis mutandis.

Section 7.                   Headings. The headings of this Amendment are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.

Section 8.                   Effect of Amendment.

(a)                On and after the Third Amendment Effective Date, each reference in the ABL Loan Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the ABL Loan Agreement, and each reference in the other Financing Agreement to the “Loan Agreement”, “thereunder”, “thereof” or words of like import referring to the ABL Loan Agreement, mean and are a reference to the ABL Loan Agreement as modified by this Amendment.

(b)                Except as expressly amended hereby, all of the terms and provisions of the ABL Loan Agreement and all other Financing Agreements are and shall remain in full force and effect and are hereby ratified and confirmed. In furtherance of the foregoing, each of the Loan Parties party hereto hereby irrevocably and unconditionally ratifies its grant of security interest and pledge under the Security Agreement and each Financing Agreement and confirms that the liens, security interests and pledges granted thereunder continue to secure the Obligations, including, without limitation, any additional Obligations resulting from or incurred pursuant to this Amendment.

(c)                Each of the Loan Parties as debtor, grantor, mortgagor, pledgor, guarantor, assignor, or in any other similar capacity in which such Loan Party grants liens or security interests in its property or otherwise acts as accommodation party, guarantor or indemnitor, as the case may be, hereby (i) ratifies and reaffirms all of its payment and performance obligations, contingent or otherwise, under each of the Financing Agreements to which it is a party, (ii) ratifies and reaffirms each grant of a lien on, or security interest in, its property made pursuant to the Financing Agreements (including, without limitation, the grant of security made by such Loan Party pursuant to the Collateral Documents) and confirms that such liens and security interests continue to secure the Obligations under the Financing Agreements, in each case subject to the terms thereof, and (iii) in the case of each Guarantor, ratifies and reaffirms its guaranty of the Obligations pursuant to the Financing Agreements. The execution of this Amendment shall not operate as a waiver of any right, power or remedy of the Agent or Lenders, constitute a waiver of any provision of any of the Financing Agreements or serve to effect a novation of the Obligations.

(d)                The execution, delivery and performance of this Amendment shall not constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of the Agent or any Lender under, the ABL Loan Agreement or any of the other Financing Agreements. This Amendment shall be deemed to be a Financing Agreement as defined in the ABL Loan Agreement.

Section 9.                   No Novation. By its execution of this Amendment, each of the parties hereto acknowledges and agrees that the terms of this Amendment do not constitute a novation, but, rather, a supplement of a pre-existing indebtedness and related agreement, as evidenced by the Amended ABL Loan Agreement.

[Signature Pages Follow]

WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written.

FRANCHISE GROUP, INC.

By: /s/ Brian Kahn
Name: Brian Kahn
Title: President and Chief Executive Officer

FRANCHISE GROUP NEWCO PSP, LLC

By: /s/ Brian Kahn
Name: Brian Kahn
Title: President and Chief Executive Officer

FRANCHISE GROUP NEWCO INTERMEDIATE AF, LLC

By: /s/ Brian Kahn
Name: Brian Kahn
Title: Chief Executive Officer and President

VALOR ACQUISITION, LLC

By: /s/ Brian Kahn
Name: Brian Kahn
Title: President and Chief Executive Officer

VITAMIN SHOPPE INDUSTRIES LLC

By: /s/ Laura Coffey

Name: Laura Coffey

Title: Chief Financial Officer

AMERICAN FREIGHT GROUP, LLC

By: /s/ Will Powell

Name: Will Powell

Title: President

[Signature Page to Third Amendment to Third Amended and Restated Loan and Security Agreement]

PET SUPPLIES “PLUS”, LLC

By: /s/ Brian Kahn

Name: Brian Kahn

Title: Vice President

VITAMIN SHOPPE MARINER, LLC

By: /s/ Laura Coffey

Name: Laura Coffey

Title: Chief Financial Officer

VITAMIN SHOPPE GLOBAL, LLC

By: /s/ Laura Coffey

Name: Laura Coffey

Title: Chief Financial Officer

VITAMIN SHOPPE FLORIDA, LLC

By: /s/ Laura Coffey

Name: Laura Coffey

Title: Chief Financial Officer

BETANCOURT SPORTS NUTRITION, LLC

By: /s/ Laura Coffey

Name: Laura Coffey

Title: Chief Financial Officer

VITAMIN SHOPPE PROCUREMENT SERVICES, LLC

By: /s/ Laura Coffey

Name: Laura Coffey

Title: Chief Financial Officer

VITAMIN SHOPPE FRANCHISING, LLC

By: /s/ Laura Coffey

Name: Laura Coffey

Title: Chief Financial Officer

[Signature Page to Third Amendment to Third Amended and Restated Loan and Security Agreement]

FRANCHISE GROUP INTERMEDIATE HOLDCO, LLC

By: /s/ Brian Kahn

Name: Brian Kahn

Title: President and Chief Executive Officer

FRANCHISE GROUP INTERMEDIATE S, LLC

By: /s/ Will Powell

Name: Will Powell

Title: President

AMERICAN FREIGHT HOLDINGS, LLC

By: /s/ Will Powell

Name: Will Powell
Title: President

AMERICAN FREIGHT, LLC

By: /s/ Will Powell

Name: Will Powell
Title: President

AMERICAN FREIGHT MANAGEMENT COMPANY, LLC

By: /s/ Will Powell

Name: Will Powell
Title: President

AMERICAN FREIGHT OUTLET STORES, LLC

By: /s/ Will Powell

Name: Will Powell

Title: Chief Executive Officer & President

HOME & APPLIANCE OUTLET, LLC

By: /s/ Will Powell

Name: Will Powell

Title: Chief Executive Officer & President

[Signature Page to Third Amendment to Third Amended and Restated Loan and Security Agreement]

FRANCHISE GROUP NEWCO S, LLC

By: /s/ Brian Kahn

Name: Brian Kahn

Title: Chief Executive Officer

AMERICAN FREIGHT FRANCHISING, LLC

By: /s/ Will Powell

Name: Will Powell

Title: Chief Executive Officer and President

AMERICAN FREIGHT FRANCHISOR, LLC

By: /s/ Will Powell

Name: Will Powell

Title: Chief Executive Officer and President

FRANCHISE GROUP NEW HOLDCO, LLC

By: /s/ Brian Kahn

Name: Brian Kahn

Title: President and Chief Executive Officer

FRANCHISE GROUP INTERMEDIATE L, LLC

By: /s/ Brian Kahn

Name: Brian Kahn

Title: President and Chief Executive Officer

FRANCHISE GROUP INTERMEDIATE V, LLC

By: /s/ Brian Kahn

Name: Brian Kahn

Title: President and Chief Executive Officer

FRANCHISE GROUP NEWCO V, LLC

By: /s/ Brian Kahn

Name: Brian Kahn

Title: President and Chief Executive Officer

[Signature Page to Third Amendment to Third Amended and Restated Loan and Security Agreement]

FRANCHISE GROUP INTERMEDIATE B, LLC

By: /s/ Brian Kahn

Name: Brian Kahn

Title: President and Chief Executive Officer

BUDDY'S NEWCO, LLC

By: /s/ Michael Bennett

Name: Michael Bennett

Title: Chief Executive Officer

BUDDY'S FRANCHISING AND LICENSING LLC

By: /s/ Michael Bennett

Name: Michael Bennett

Title: Chief Executive Officer

AMERICAN FREIGHT FFO, LLC

By: /s/ Will Powell

Name: Will Powell

Title: Chief Executive Officer and President

FRANCHISE GROUP ACQUISITION TM, LLC

By: /s/ Brian Kahn

Name: Brian Kahn

Title: President and Chief Executive Officer

FRANCHISE GROUP INTERMEDIATE PSP, LLC

By: /s/ Brian Kahn

Name: Brian Kahn

Title: President and Chief Executive Officer

PSP MIDCO, LLC

By: /s/ Brian Kahn

Name: Brian Kahn

Title: Vice President

[Signature Page to Third Amendment to Third Amended and Restated Loan and Security Agreement]

PSP GROUP, LLC

By: /s/ Brian Kahn

Name: Brian Kahn

Title: Vice President

PSP SERVICE NEWCO, LLC

By: /s/ Brian Kahn

Name: Brian Kahn

Title: Vice President

PSP STORES, LLC

By: /s/ Brian Kahn

Name: Brian Kahn

Title: Vice President

PSP SUBCO, LLC

By: /s/ Brian Kahn

Name: Brian Kahn

Title: Vice President

PSP FRANCHISING, LLC

By: /s/ Brian Kahn

Name: Brian Kahn

Title: Vice President

PSP DISTRIBUTION, LLC

By: /s/ Brian Kahn

Name: Brian Kahn

Title: Vice President

FRANCHISE GROUP INTERMEDIATE BHF, LLC

By: /s/ Brian Kahn

Name: Brian Kahn

Title: President and Chief Executive Officer

[Signature Page to Third Amendment to Third Amended and Restated Loan and Security Agreement]

FRANCHISE GROUP NEWCO BHF, LLC

By: /s/ Brian Kahn

Name: Brian Kahn

Title: President and Chief Executive Officer

FRANCHISE GROUP INTERMEDIATE SL, LLC

By: /s/ Brian Kahn

Name: Brian Kahn

Title: President and Chief Executive Officer

FRANCHISE GROUP NEWCO SL, LLC

By: /s/ Brian Kahn

Name: Brian Kahn

Title: Chief Executive Officer

EDUCATE, INC.

By: /s/ Brian Kahn

Name: Brian Kahn

Title: Vice President

EDUCATE OPERATING COMPANY, LLC

By: /s/ Brian Kahn

Name: Brian Kahn

Title: Vice President

SYLVAN LEARNING, LLC

By: /s/ Brian Kahn

Name: Brian Kahn

Title: Vice President

LEARNING PARTNERSHIPS, LLC

By: /s/ Brian Kahn

Name: Brian Kahn

Title: Vice President

[Signature Page to Third Amendment to Third Amended and Restated Loan and Security Agreement]

EDUCATE DIGITAL, LLC

By: /s/ Brian Kahn

Name: Brian Kahn

Title: Vice President

SYLVAN IN-HOME, LLC

By: /s/ Brian Kahn

Name: Brian Kahn

Title: Vice President

EDUCATE CORPORATE CENTERS HOLDINGS, LLC

By: /s/ Brian Kahn

Name: Brian Kahn

Title: Vice President

LEARNING SYSTEM OF THE FUTURE, LLC

By: /s/ Brian Kahn

Name: Brian Kahn

Title: Vice President

SYLVAN LEARNING CENTERS, LLC

By: /s/ Brian Kahn

Name: Brian Kahn

Title: Vice President

OMEGA LEARNING CENTERS, LLC

By: /s/ Brian Kahn

Name: Brian Kahn

Title: Vice President

MARYLAND LEARNING CENTERS, LLC

By: /s/ Brian Kahn

Name: Brian Kahn

Title: Vice President

[Signature Page to Third Amendment to Third Amended and Restated Loan and Security Agreement] 

W.S. BADCOCK CORPORATION

By: /s/ Brian Kahn

Name: Brian Kahn

Title: Senior Vice President

[Signature Page to Third Amendment to Third Amended and Restated Loan and Security Agreement]

JPMORGAN CHASE BANK, N.A., as the Agent, the Issuing Bank, the Swingline Lender and a Lender

By: /s/ James A. Knight
Name: James A. Knight
Title: Executive Director

[Signature Page to Third Amendment to Third Amended and Restated Loan and Security Agreement]

CITIZENS BANK, N.A., as a Lender

By: /s/ Alexander V. Lodi
Name: Alexander V. Lodi
Title: AVP

[Signature Page to Third Amendment to Third Amended and Restated Loan and Security Agreement]

BMO HARRIS BANK N.A., as a Lender

By: /s/ Joseph Basa
Name: Joseph Basa
Title: Assistant Vice President

[Signature Page to Third Amendment to Third Amended and Restated Loan and Security Agreement]

EXHIBIT A

Amended ABL Loan Agreement

[see attached]

Exhibit A to SecondThird Amendment

FLORIDA DOCUMENTARY STAMP TAXES IN THE AMOUNT OF $2,450.00 HAVE BEEN OR WILL BE PAID DIRECTLY TO THE FLORIDA DEPARTMENT OF REVENUE.

THIRD AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

by and among

FRANCHISE GROUP, INC.,

VALOR ACQUISITION, LLC,
FRANCHISE GROUP NEWCO INTERMEDIATE AF, LLC

and

FRANCHISE GROUP NEWCO PSP, LLC,

as Borrowers

THE OTHER BORROWERS FROM TIME TO TIME PARTY HERETO

THE OTHER LOAN PARTIES FROM TIME TO TIME PARTY HERETO

THE LENDERS, SWINGLINE LENDER AND ISSUING BANK FROM TIME TO TIME PARTY HERETO

and

JPMORGAN CHASE BANK, N.A.,
as Agent

and

BMO HARRIS BANK N.A.,

as Documentation Agent

_________________________________

JPMORGAN CHASE BANK, N.A. and CITIZENS BANK, N.A.,

as Joint Lead Arrangers and Joint Bookrunners

Dated: March 10, 2021

TABLE OF CONTENTS

Page

THIRD AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

This Third Amended and Restated Loan and Security Agreement dated March 10, 2021 (this “Agreement”) is by and among Franchise Group, Inc., a Delaware corporation, Valor Acquisition, LLC, a Delaware limited liability company, Franchise Group Newco Intermediate AF, LLC, a Delaware limited liability company, Franchise Group Newco PSP, LLC, a Delaware limited liability company, and certain Subsidiaries of each of the foregoing, as Borrowers, the parties hereto from time to time as Guarantors, the parties hereto from time to time as lenders (each individually, a “Lender” and collectively, “Lenders” as hereinafter further defined) and JPMorgan Chase Bank, N.A., a national banking association, in its capacity as agent for the Lenders (in such capacity, “Agent” as hereinafter further defined).

WITNESSETH:

WHEREAS, Borrowers, Valor Acquisition, LLC, as parent and a guarantor, Agent and the lenders party thereto are parties to that certain Second Amended and Restated Loan and Security Agreement dated as of December 16, 2019 (as amended, supplemented or otherwise modified from time to time prior to the date hereof, the “Existing Credit Agreement”); and

WHEREAS, subject to the conditions precedent set forth herein, the parties hereto desire to amend and restate the Existing Credit Agreement in its entirety in the form of this Agreement.

NOW, THEREFORE, in consideration of the premises, the representations, warranties, covenants and agreements contained herein, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and subject to the satisfaction of each condition precedent contained in Section 4.1 hereof, the Existing Credit Agreement shall be amended and restated as of the Closing Date (as defined below) in the form of this Agreement. It is the intention of the parties hereto, and such parties hereby agree, that this Agreement supersedes and replaces the Existing Credit Agreement in its entirety, and that (a) such amendment and restatement shall operate to renew, amend and modify certain of the rights and obligations of the parties under the Existing Credit Agreement as provided herein, but shall not act as a novation thereof, and (b) the Liens securing the “Obligations” under and as defined in the Existing Credit Agreement shall not be extinguished, but shall be carried forward and shall secure such obligations and Indebtedness as renewed, amended, restated and modified hereby. The parties hereto further agree as follows:

1.1              Definitions. For purposes of this Agreement, the following terms shall have the respective meanings given to them below:

“A Team” means A Team Sales, LLC, a Delaware limited liability company.

“ABL Priority Collateral” has the meaning assigned to such term in the Intercreditor Agreement.

“ABR Borrowing” shall mean a Borrowing of ABR Loans.

“ABR Loans” shall mean any Loans or portion thereof on which interest is payable based on the Alternate Base Rate in accordance with the terms thereof.

“Accounts” shall have the meaning set forth in Article 9 of the UCC and includes, without limitation, as to each Borrower and Guarantor, all present and future rights of such Borrower and Guarantor to payment of a monetary obligation, whether or not earned by performance, which is not evidenced by Chattel Paper or an Instrument, (a) for property that has been or is to be sold, leased, licensed, assigned, or otherwise disposed of, (b) for services rendered or to be rendered, (c) for a secondary obligation incurred or to be incurred, (d) arising out of the use of a credit or charge card or information contained on or for use with the card or (e) arising out of franchising agreements.

“Account Debtor” shall have the meaning set forth in Article 9 of the UCC.

“ACH Transactions” shall mean the automatic clearing house transfer of funds by Agent, any Lender or any of their respective Affiliates for the account of any Borrower or its Subsidiaries, in each case pursuant to agreements entered into with any Borrower or any of its Subsidiaries.

“Acquired EBITDA” means, with respect to any Pro Forma Entity, for any period, the amount of EBITDA of such Pro Forma Entity (determined as if references to the Borrowers and their Subsidiaries in the definition of “EBITDA” were references to such Pro Forma Entity and its subsidiaries that will become Subsidiaries), all as determined on a consolidated basis for such Pro Forma Entity.

“Acquired Entity or Business” has the meaning given such term in the definition of “EBITDA.”

“Additional Lender Agreement” has the meaning assigned to such term in Section 2.4(d)(ii).

“Adjusted Daily Simple SOFR” means an interest rate per annum equal to (a) the Daily Simple SOFR, plus (b) 0.10%; provided that if the Adjusted Daily Simple SOFR as so determined would be less than the Floor, such rate shall be deemed to be equal to the Floor for the purposes of this Agreement.

“Adjusted Term SOFR Rate” means, for any Interest Period, an interest rate per annum equal to (a) the Term SOFR Rate for such Interest Period, plus (b) 0.10%; provided that if the Adjusted Term SOFR Rate as so determined would be less than the Floor, such rate shall be deemed to be equal to the Floor for the purposes of this Agreement.

“Administrative Borrower” shall mean FRG, in its capacity as Administrative Borrower on behalf of itself and the other Borrowers pursuant to Section 6.8 hereof and its successors and assigns in such capacity.

“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Agent.

“Affected Financial Institution” means (a) any EEA Financial Institution or (b) any UK Financial Institution.

“Affiliate” shall mean, with respect to a specified Person, any other Person which directly or indirectly, through one or more intermediaries, controls or is controlled by or is under common control with such Person. For the purposes of this definition, the term “control” (including with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of Voting Stock, by agreement or otherwise. Without limiting the foregoing, any Subsidiary of FRG shall be considered an Affiliate of the Borrowers for purposes of this Agreement.

“AFG Borrowers” means (a) American Freight, LLC, a Delaware limited liability company, (b) AFG Intermediate and (c) American Freight Outlet Stores, LLC, a Delaware limited liability company.

“AFG Borrowing Base” shall mean, at any time, the amount equal to:

(a) the amount equal to:

(i) 90% of the amount of Eligible Credit Card Receivables of the AFG Borrowers at such time, plus

(ii) 85% of the amount of Eligible Accounts of the AFG Borrowers at such time, plus

(iii) 90% of the Net Recovery Percentage multiplied by the Value of the Eligible Inventory of the AFG Borrowers, net of any Inventory Reserves, in each case, at such time, minus

(b) the Availability Reserves;

provided that (1) the aggregate amount of Eligible Inventory of the AFG Borrowers that is (x) Inventory that is consigned to AFG Franchisees or (y) Inventory at locations owned or leased by AFG Franchisees shall not exceed, in the aggregate for clauses (x) and (y), the amount equal to 10% of the AFG Borrowing Base at any time and (2) the aggregate amount of Eligible Accounts of the AFG Borrowers in respect of Franchisee Receivables shall not exceed the amount equal to 10% of the AFG Borrowing Base at any time.

The amounts of Eligible Inventory of the AFG Borrowers shall be determined based on the amount of applicable Inventory set forth in the inventory record maintained by the Borrowers.

Agent shall have the right to establish Reserves against or sublimits in the AFG Borrowing Base in such amounts and with respect to such matters as Agent shall deem reasonably necessary or appropriate in its Permitted Discretion, based on new information received by Agent and after Agent has completed its updated field audits, examinations and appraisals of the Collateral; provided, however, that, so long as no Event of Default has occurred and is continuing, Agent shall give to Administrative Borrower five Business Days’ telephonic or electronic notice if (A) Agent establishes new categories of Reserves, (B) Agent changes the methodology of calculating Reserves or (C) Agent establishes new categories of sublimits in the AFG Borrowing Base; provided further that, during such five Business Day-period, no Borrowing may be drawn or Letter of Credit issued to the extent any Revolving Exposure Limitations would be exceeded after giving effect to any such Reserves or sublimit modifications. The foregoing notwithstanding, in the event Agent establishes Reserves to preserve or protect or maximize the value of the Collateral during the continuance of an Event of Default, Agent shall only provide Administrative Borrower with notice at the time such Reserves are established.

Accounts, Credit Card Receivables and Inventory of the AFG Borrowers shall only be Eligible Accounts, Eligible Credit Card Receivables and Eligible Inventory, as applicable, to the extent that (x) Agent has conducted and completed a field examination, appraisal and other due diligence with respect thereto and (y) the criteria for Eligible Accounts, Eligible Credit Card Receivables and Eligible Inventory set forth herein, as applicable, are satisfied with respect thereto in accordance with this Agreement (or such other or additional criteria as Agent may, at its option, establish with respect thereto in accordance with this Agreement and subject to such Reserves as Agent may establish in its Permitted Discretion).

The AFG Borrowing Base shall be determined at any time by Agent, on the basis of the most recently delivered Borrowing Base Certificate, as adjusted by Agent for any changes in Reserves or otherwise in accordance with the terms hereof.

“AFG Borrowing Cap” shall mean, the amount, calculated at any date, equal to the lesser of (i) $100,000,000 and (ii) the AFG Borrowing Base in effect at such time.

“AFG Excess Availability” shall mean, the amount, as determined by Agent, calculated at any date, equal to: (a) the AFG Borrowing Cap minus (b) the Aggregate Revolving Exposure owing by the AFG Borrowers.

“AFG Franchise Agreement” means a franchising agreement between any AFG Borrower, as franchisor, and any other Person, as franchisee, pertaining to the establishment and operation of a business with operations comparable to the operations of AFG Intermediate and its Subsidiaries.

“AFG Franchisee Eligibility Requirements” means, collectively, each of the following:

(a) the applicable AFG Borrower has executed an agreement with the applicable AFG Franchisee to operate a franchise under one of the brands as listed on Schedule 1C hereto, or any subsequent rebranding of such franchise, at a location owned or leased and operated by such AFG Franchisee, substantially on the standard form agreements containing terms and conditions established by the AFG Borrowers from time to time, which shall include (A) an acknowledgement from such AFG Franchisee that the AFG Borrowers, or Agent acting on behalf of the AFG Borrowers, are authorized to transfer proceeds of the Inventory consigned by such AFG Borrower to such AFG Franchisee from the bank account maintained by such AFG Franchisee to an account in the name of an AFG Borrower and (B) an acknowledgement by the AFG Franchisee that the applicable AFG Borrower has granted a Lien to Agent on the Inventory consigned by such AFG Borrower to the AFG Franchisee and an agreement by the AFG Franchisee to reasonably cooperate with Agent in the event of the exercise by Agent of its rights and remedies with respect to such Lien;

(b) the applicable AFG Borrower has provided Agent with evidence that such AFG Borrower has filed appropriate UCC financing statements against the applicable AFG Franchisee evidencing the consignment arrangement between such AFG Borrower and the applicable AFG Franchisee with respect to the Inventory consigned by the such AFG Borrower to the applicable AFG Franchisee, and has taken all other action required under applicable Requirements of Law to obtain a valid, first priority perfected security interest in such Inventory (including, without limitation, providing notification to other secured parties of the applicable AFG Franchisee as required by the UCC);

(c) if requested by Agent, the applicable AFG Borrower has provided the Agent with an assignment of the UCC financing statements set forth in clause (b) above;

(d) the applicable AFG Borrower has complied in all material respects with all representations, warranties and covenants set forth herein and in the other Financing Agreements relating to federal and state franchise and other regulatory Requirements of Law in connection with the operation of a franchise under one of the brands as listed on Schedule 1C (or any subsequent rebranding of such franchises) by the applicable AFG Franchisee; and

(e) the agreements between the applicable AFG Borrower and the applicable AFG Franchisee provide that all amounts owed by such AFG Franchisee to such AFG Borrower shall be swept at least daily into an account of an AFG Borrower which is subject to a Deposit Account Control Agreement.

For the purposes of paragraph (a) above, “reasonably cooperate with Agent” means that the AFG Franchisee will, at Agent’s expense and with reasonable prior notice from Agent, (i) give Agent and its representatives access during normal business hours to all Inventory consigned by the applicable AFG Borrower to the AFG Franchisee, (ii) permit Agent and its representatives to take possession and control of the Inventory consigned by the applicable AFG Borrower to the AFG Franchisee, and to remove the Inventory from the premises of the AFG Franchisee, (iii) to the extent not prohibited by applicable location occupancy agreements (including leases), conduct “going out of business sales” and engage in similar activities with respect to the Inventory consigned by the applicable AFG Borrower to the AFG Franchisee, and (iv) take all other commercially reasonable actions with respect to the Inventory consigned by the applicable AFG Borrower to the AFG Franchisee that, upon Agent’s request, may be reasonably necessary to permit Agent to exercise all of its rights and remedies with respect to the Lien on the Inventory consigned by such AFG Borrower to the AFG Franchisee.

“AFG Franchisees” means, as of the Closing Date, the individuals and entities listed in Schedule 1B as “AFG franchisees”, and thereafter, such entities and any additional individual or entity that meets the AFG Franchisee Eligibility Requirements.

“AFG Intermediate” means Franchise Group Newco Intermediate AF, LLC, a Delaware limited liability company.

“AFG Loan Party” means (a) each AFG Borrower and (b) without duplication of clause (a), each Loan Party that is a Subsidiary of an AFG Borrower.

“Agent” shall mean JPMorgan Chase Bank, N.A., in its capacity as agent on behalf of Lenders pursuant to the terms hereof and any replacement or successor agent hereunder.

“Agent Fee Letter” shall mean the amended and restated administrative agent fee letter, dated as of January 29, 2021, by and among FRG, PSP Newco and Agent, as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.

“Agent Payment Account” shall mean account no. XXXXX9773 of Agent at Chase, or such other account of Agent as Agent may from time to time designate to Administrative Borrower as the Agent Payment Account for purposes of this Agreement and the other Financing Agreements.

“Aggregate Borrowing Base” means the sum of the AFG Borrowing Base, the PSP Borrowing Base and the TVS Borrowing Base.

“Aggregate Revolving Commitment Amounts” shall mean, at any time, the sum of the Revolving Commitments, as the same may be adjusted pursuant to Section 2.4. As of the SecondThird Amendment Effective Date, the Aggregate Revolving Commitment Amounts are $250,000,000400,000,000.

“Aggregate Revolving Exposure” shall mean, at any time, the aggregate amount of Revolving Exposure of all Revolving Lenders.

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the NYFRB Rate in effect on such day plus ½ of 1% and (c) the Adjusted Term SOFR Rate for a one month Interest Period as published two U.S. Government Securities Business Days prior to such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1%, provided that, for the purpose of this definition, the Adjusted Term SOFR Rate for any day shall be based on the Term SOFR Reference Rate at approximately 5:00 a.m. Chicago time on such day (or any amended publication time for the Term SOFR Reference Rate, as specified by the CME Term SOFR Administrator in the Term SOFR Reference Rate methodology). Any change in the Alternate Base Rate due to a change in the Prime Rate, the NYFRB Rate or the Adjusted Term SOFR Rate shall be effective from and including the effective date of such change in the Prime Rate, the NYFRB Rate or the Adjusted Term SOFR Rate, respectively. If the Alternate Base Rate is being used as an alternate rate of interest pursuant to Section 3.4 (for the avoidance of doubt, only until the Benchmark Replacement has been determined pursuant to Section 3.4(c)), then the Alternate Base Rate shall be the greater of clause (a) and (b) above and shall be determined without reference to clause (c) above. For the avoidance of doubt, if the Alternate Base Rate as determined pursuant to the foregoing would be less than 1.00%, such rate shall be deemed to be 1.00% for purposes of this Agreement.

“Ancillary Document” has the meaning assigned to it in Section 13.10(b).

“Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction applicable to the Borrowers, the Guarantors or any of their respective Subsidiaries from time to time concerning or relating to bribery or corruption.

“Applicable Borrowers” means (a) with respect to any AFG Loan Party, the AFG Borrowers, (b) with respect to any PSP Loan Party, the PSP Borrowers and (c) with respect to any TVS Loan Party, the TVS Borrowers.

“Applicable Borrowing Cap” means (a) with respect to any AFG Loan Party, the AFG Borrowing Cap, (b) with respect to any PSP Loan Party, the PSP Borrowing Cap and (c) with respect to any TVS Loan Party, the TVS Borrowing Cap.

“Applicable Margin” means, from and after the Third Amendment Effective Date, for any day, with respect to any Revolving Loan, the applicable rate per annum set forth below under the caption “Revolver ABR Spread”, “Revolver Term Benchmark Spread” or “Revolver RFR Spread”, as the case may be, based upon the Borrowers’ Average Excess Availability for the prior fiscal quarter as of the most recent determination date, provided that until the delivery to Agent, pursuant to Section 7.1(a)(i), of the Borrowers’ Borrowing Base Certificate for the fiscal month ended MarchAugust 31, 20212022, the “Applicable Margin” shall be the applicable rate per annum set forth below in Category 2:

For purposes of the foregoing, (a) the Applicable Margin shall be determined as of the end of each fiscal quarter of the Borrowers based upon the Borrowers’ Average Excess Availability for the prior fiscal quarter upon Agent’s receipt of the Borrowers’ Borrowing Base Certificate delivered pursuant to Section 7.1(a)(i) and (b) each change in the Applicable Margin resulting from a change in the Borrowers’ Average Excess Availability for the prior fiscal quarter shall be effective during the period commencing on and including the date of delivery to Agent of such Borrowing Base Certificate indicating such change and ending on the date immediately preceding the effective date of the next such change, provided that the Borrowers’ Average Excess Availability shall be deemed to be in Category 3 at the option of Agent or at the request of the Required Lenders if the Borrowers fail to deliver the Borrowing Base Certificate required to be delivered by them pursuant to Section 7.1(a)(i), during the period from the expiration of the time for delivery thereof until such Borrowing Base Certificate is delivered.

“Approved Bank” has the meaning assigned to such term in the definition of the term “Cash Equivalents.”

“Approved Electronic Platform” has the meaning assigned to it in Section 12.16(a).

“Arrangers” means each of JPMorgan Chase Bank, N.A and Citizens Bank, N.A., in its capacity as a joint bookrunner and a joint lead arranger hereunder.

“Asset Sale” shall mean:

(a)               the sale, lease, conveyance or other disposition of any assets or rights; and

(b)               the issuance of Capital Stock in any of the Borrowers or the Subsidiary Guarantors or the sale of Capital Stock in any of the Borrowers or the Subsidiary Guarantors (in each case other than issuing directors’ qualifying shares, nominal shares issued to foreign nationals to the extent required by applicable Requirement of Law and other than issuing Capital Stock to the Borrower or a Subsidiary).

Notwithstanding the preceding, none of the following items will be deemed to be an Asset Sale:

(i)                 any single transaction or series of related transactions that involves assets having a fair market value of less than $5,000,000;

(ii)              a transfer of assets between or among any Loan Parties;

(iii)            an issuance of Capital Stock by a Loan Party to a Loan Party;

(iv)             the sale or lease of products, services, inventory, equipment, leasehold improvements, fixtures or accounts receivable in the ordinary course of business and any sale or other disposition of damaged, worn-out or obsolete assets, and assets that are no longer used or useful, or economically impracticable to maintain, in the ordinary course of business (including allowing any registration or application for registration of any Intellectual Property that is no longer used or useful, or economically practicable to maintain, to lapse, go abandoned, be dedicated to the public domain or be invalidated);

(v)               the sale or other disposition of cash or Cash Equivalents;

(vi)             any license, sublicense, covenant not to sue, or similar agreement with respect to patents, trademarks, registrations thereof and other Intellectual Property (a) made in the ordinary course of business or (b) that do not materially interfere with the business of the Borrowers or Guarantors, taken as a whole;

(vii)          any release of intangible claims or rights in connection with the loss or settlement of a bona-fide lawsuit, dispute or other controversy;

(viii)        leases or subleases in the ordinary course of business to third persons not interfering in any material respect with the business of the Borrowers or any of the Guarantors; and

(ix)             an Investment permitted under Section 9.10 and any dividend or other distribution (whether in cash, securities or other property) with respect to any Capital Stock of the Borrowers and the Subsidiary Guarantors that are expressly permitted under Section 9.11.

“Assignment and Assumption” shall mean an Assignment and Assumption substantially in the form of Exhibit A attached hereto (with blanks appropriately completed) delivered to Agent in connection with an assignment of a Lender’s interest hereunder in accordance with the provisions of Section 13.7 hereof.

“Authorized Officer” shall mean the individuals holding the position of president, treasurer, vice president of finance, chief executive officer, chief financial officer or controller of Administrative Borrower, or if no such officers have been appointed or elected, the sole member of the Administrative Borrower.

“Availability Reserves” shall mean all Reserves other than Inventory Reserves.

“Available Equity Amount” means a cumulative amount equal to:

(a)                the net proceeds received in cash or Cash Equivalents of new public or private issuances after the Closing Date of Qualified Equity Interests (excluding any Qualified Equity Interests used for, or otherwise having the effect of increasing, any other basket under this Agreement) of the Administrative Borrower, plus

(b)                capital contributions received by the Administrative Borrower after the Closing Date in cash or Cash Equivalents (and the fair market value (as determined in good faith by the Administrative Borrower) of non-cash capital contributions) in respect of Qualified Equity Interests (excluding any Qualified Equity Interests used for, or otherwise having the effect of increasing, any other basket under this Agreement), plus

(c)                the net cash proceeds received by a Borrower or any Subsidiary from Indebtedness and Disqualified Equity Interest issuances issued after the Closing Date and which have been exchanged or converted into Qualified Equity Interests, plus

(d)                returns, profits, distributions and similar amounts received in (or converted into) cash or Cash Equivalents (and the fair market value (as determined in good faith by the Administrative Borrower) of non-cash returns, profits, distributions and similar amounts) by the Borrower or any Subsidiary on Investments made using the Available Equity Amount (not to exceed the original amount of such Investments).

“Available General RP Capacity Amount” means (i) the amount of dividends and distributions that may be paid or made at the time of determination pursuant to 9.11(lm) plus (ii) the amount of prepayments, redemptions, purchases, defeasances and other payments in respect of any Permitted Subordinated Indebtedness that may be made at the time of determination pursuant to Section 9.24(j)(A) minus (iii) the sum of the amount of the Available General RP Capacity Amount utilized by a Borrower or any Subsidiary prior to such time to pay or make (a) dividends or distributions pursuant to Section 9.11(lm), (b) prepayments, redemptions, purchases, defeasances and other payments in respect of any Permitted Subordinated Indebtedness pursuant to Section 9.24(j)(A), (c) Investments pursuant to Section 9.10(hh)(A)(ii) utilizing the Available General RP Capacity Amount or (d) prepayments, redemptions, purchases, defeasances and other payments in respect of any Indebtedness pursuant to Section 9.24(j)(B) utilizing the Available General RP Capacity Amount.

“Available Tenor” means, as of any date of determination and with respect to the then-current Benchmark, as applicable, any tenor for such Benchmark (or component thereof) or payment period for interest calculated with reference to such Benchmark (or component thereof), as applicable, that is or may be used for determining the length of an Interest Period for any term rate or otherwise, for determining any frequency of making payments of interest calculated pursuant to this Agreement as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of “Interest Period” pursuant to clause (f) of Section 3.4.

“Average Excess Availability” means, for any period, the average daily Excess Availability during such period, as determined by the Agent’s system of records.

“Badcock” means W.S. Badcock Corporation, a Florida corporation.

“Badcock Acquisition” means the “Badcock Acquisition” as defined in the First Amendment.

“Badcock Loan Party” means (a) Badcock and (b) without duplication of clause (a), each Loan Party that is a Subsidiary of Badcock.

“Badcock Collateral” means (i) prior to the Badcock Joinder Date, any and all assets, whether real or personal, tangible or intangible, on which Liens are purported to be granted pursuant to the applicable Badcock Security Documents as security for the First Lien Obligations, the Second Lien Obligations or any Badcock Term Obligations, as the case may be, and (ii) from and after the Badcock Joinder Date, any and all assets, whether real or personal, tangible or intangible, on which Liens are purported to be granted pursuant to the applicable Collateral Documents as security for the Obligations.

“Badcock First Lien Agent” means JPMorgan Chase Bank, N.A., as administrative agent and collateral agent under the Badcock First Lien Credit Agreement or any successor thereto acting in such capacities.

“Badcock First Lien Credit Agreement” means that certain First Lien Credit Agreement, dated as of the First Amendment Effective Date, among the Administrative Borrower and certain Subsidiaries of the Administrative Borrower, as borrowers, the Badcock First Lien Agent and the lenders from time to time party thereto, as in effect on the First Amendment Effective Date as the same may be amended, amended and restated, modified, supplemented, extended or renewed from time to time not in violation of the terms hereof (including by reference to the ABL Intercreditor Agreement and the First Lien/Second Lien Intercreditor Agreement).

“Badcock First Lien Term Loan Documents” shall have the meaning ascribed to the term “Loan Documents” in the Badcock First Lien Credit Agreement.

“Badcock Joinder Date” shall have the meaning set forth in Section 9.23(a)(ii) hereof.

“Badcock Second Lien Agent” means Alter Domus (US) LLC, as administrative agent and collateral agent under the Badcock Second Lien Credit Agreement or any successor thereto acting in such capacities.

“Badcock Second Lien Credit Agreement” means that certain Second Lien Credit Agreement, dated as of the First Amendment Effective Date, among the Administrative Borrower and certain Subsidiaries of the Administrative Borrower, as borrowers, the Badcock Second Lien Agent and the lenders from time to time party thereto, as in effect on the First Amendment Effective Date as the same may be amended, amended and restated, modified, supplemented, extended or renewed from time to time not in violation of the terms hereof (including by reference to the ABL Intercreditor Agreement and the First Lien/Second Lien Intercreditor Agreement).

“Badcock Second Lien Term Loan Documents” shall have the meaning ascribed to the term “Loan Documents” in the Badcock Second Lien Credit Agreement.

“Badcock Security Documents” means (i) the “Badcock Security Documents” as defined in the First Lien Credit Agreement, (ii) the “Badcock Security Documents” as defined in the Second Lien Credit Agreement, (iii) the “Badcock Security Documents” as defined in the Badcock First Lien Credit Agreement and (iv) the “Badcock Security Documents” as defined in the Badcock Second Lien Credit Agreement.

“Badcock Term Obligations” means, collectively, (i) the Secured Obligations (as defined in the Badcock First Lien Credit Agreement) and (ii) the Secured Obligations (as defined in the Badcock Second Lien Credit Agreement).

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.

“Bail-In Legislation” means, (a) 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, regulation, rule or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).

“Bank Products” shall mean any one or more of the following types of services or facilities provided to any Loan Party or its Subsidiaries by a Bank Product Provider: (a) credit cards for commercial customers (including, without limitation, “commercial credit cards” and purchasing cards), (b) stored value cards, (c) treasury management services (including, without limitation, controlled disbursement, ACH Transactions, return items, overdrafts and interstate depository network services), (d) foreign exchange contracts, and (e) Hedge Agreements and coin and currency lines.

“Bank Product Providers” shall mean Agent, any Lender and any of their respective Affiliates that may, from time to time, provide any Bank Products to a Loan Party or any Subsidiary of a Loan Party; each sometimes being referred to herein individually as a “Bank Product Provider”.

“Bank Product Reserve” shall mean any and all reserves that Agent may establish from time to time with the written consent of the Administrative Borrower, to reflect any obligations, liabilities or indebtedness (contingent or otherwise) of any Loan Party or its Subsidiaries to Agent or any Bank Product Provider arising under or in connection with any Bank Products or as such Bank Product Provider may otherwise require in connection therewith to the extent that such obligations, liabilities or indebtedness constitute Obligations as such term is defined herein or otherwise receive the benefit of the security interest of Agent in the Collateral. The Administrative Borrower hereby consents to the establishment of a Bank Product Reserve with respect to any obligations, liabilities or indebtedness (contingent or otherwise) of any Loan Party or its Subsidiaries to Agent, any Lender or any of their respective Affiliates (whether outstanding on the Closing Date or incurred thereafter) arising under or in connection with any Bank Products existing on the Closing Date, and Agent agrees to maintain such Bank Product Reserve to the extent Agent is notified of such Bank Products and the amounts thereof in accordance with the requirements of this Agreement.

“Benchmark” means, initially, with respect to any (i) RFR Loan, the Daily Simple SOFR or (ii) Term Benchmark Loan, the Term SOFR Rate; provided that if a Benchmark Transition Event and the related Benchmark Replacement Date have occurred with respect to the Daily Simple SOFR or Term SOFR Rate, as applicable, or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to clause (c) of Section 3.4.

“Benchmark Replacement” means, for any Available Tenor, the first alternative set forth in the order below that can be determined by the Agent for the applicable Benchmark Replacement Date:

(1) the Adjusted Daily Simple SOFR; or

(2) the sum of: (a) the alternate benchmark rate that has been selected by the Agent and the Administrative Borrower as the replacement for the then-current Benchmark for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement for the then-current Benchmark for dollar-denominated syndicated credit facilities at such time in the United States and (b) the related Benchmark Replacement Adjustment.

If the Benchmark Replacement as determined pursuant to clause (1) or (2) above would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Financing Agreements.

“Benchmark Replacement Adjustment” means, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement for any applicable Interest Period and Available Tenor for any setting of such Unadjusted Benchmark Replacement, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Agent and the Administrative Borrower for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body on the applicable Benchmark Replacement Date and/or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for dollar-denominated syndicated credit facilities at such time.

“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement and/or any Term Benchmark Loan, any technical, administrative or operational changes (including changes to the definition of “Alternate Base Rate,” the definition of “Business Day,” the definition of “U.S. Government Securities Business Day,” the definition of “Interest Period,” timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, length of lookback periods, the applicability of breakage provisions, and other technical, administrative or operational matters) that the Agent decides in its reasonable discretion may be appropriate to reflect the adoption and implementation of such Benchmark and to permit the administration thereof by the Agent in a manner substantially consistent with market practice (or, if the Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Agent determines that no market practice for the administration of such Benchmark exists, in such other manner of administration as the Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Financing Agreements).

“Benchmark Replacement Date” means, with respect to any Benchmark, the earliest to occur of the following events with respect to such then-current Benchmark:

(1) in the case of clause (1) or (2) of the definition of “Benchmark Transition Event,” the later of (a) the date of the public statement or publication of information referenced therein and (b) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof); or

(2) in the case of clause (3) of the definition of “Benchmark Transition Event,” the first date on which such Benchmark (or the published component used in the calculation thereof) has been determined and announced by the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be no longer representative; provided that such non-representativeness will be determined by reference to the most recent statement or publication referenced in such clause (3) and even if any Available Tenor of such Benchmark (or such component thereof) continues to be provided on such date.

For the avoidance of doubt, (i) if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time for such determination and (ii) the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (1) or (2) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).

“Benchmark Transition Event” means, with respect to any Benchmark, the occurrence of one or more of the following events with respect to such then-current Benchmark:

(1) a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof);

(2) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the Federal Reserve Board, the NYFRB, the CME Term SOFR Administrator, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), in each case, which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or

(3) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are no longer, or as of a specified future date will no longer be, representative.

For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).

“Benchmark Unavailability Period” means, with respect to any Benchmark, the period (if any) (x) beginning at the time that a Benchmark Replacement Date pursuant to clauses (1) or (2) of that definition has occurred if, at such time, no Benchmark Replacement has replaced such then-current Benchmark for all purposes hereunder and under any Financing Agreement in accordance with Section 3.4 and (y) ending at the time that a Benchmark Replacement has replaced such then-current Benchmark for all purposes hereunder and under any Financing Agreement in accordance with Section 3.4.

“Beneficial Ownership Certification” means a certification regarding beneficial ownership or control as required by the Beneficial Ownership Regulation.

“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.

“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in Section 3(3) of ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in Section 4975 of the Code to which Section 4975 of the Code applies, and (c) any Person whose assets include (for purposes of the Plan Asset Regulations or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.

“BHC Act Affiliate” of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.

“Blocked Accounts” shall have the meaning set forth in Section 6.3 hereof.

“Board” means, with respect to any Person, (a) in the case of any corporation, the board of directors of such Person or any committee thereof duly authorized to act on behalf of such board, (b) in the case of any limited liability company, the board of managers, board of directors, manager or managing member of such Person or the functional equivalent of the foregoing or any committee thereof duly authorized to act on behalf of such board, manager or managing member, (c) in the case of any partnership, the board of directors or board of managers of the general partner of such Person and (d) in any other case, the functional equivalent of the foregoing.

“Borrower Joinder Agreement” shall mean a joinder agreement in substantially the form of Exhibit H hereto and otherwise in form and substance acceptable to Agent.

“Borrowers” shall mean, collectively, the following (together with their respective successors and assigns): (a) FRG (provided that, for any Borrowing in which FRG is a Borrower, FRG shall be deemed to be an AFG Borrower, a PSP Borrower or a TVS Borrower, as applicable, for all purposes of this Agreement with respect to such Borrowing, depending on whether FRG has designated that such Borrowing will utilize the AFG Borrowing Base, the PSP Borrowing Base or the TVS Borrowing Base)the Administrative Borrower; (b) the AFG Borrowers; (c) Badcock; (d) the PSP Borrowers; (de) the TVS Borrowers; and (ef) any other Person that at any time after the Closing Date becomes a Borrower pursuant to the terms hereof, including, without limitation, Section 9.23 hereof and by the execution of a Borrower Joinder Agreement; each sometimes being referred to herein individually as a “Borrower”; provided that, notwithstanding anything to the contrary herein or in any other Financing Document, unless Badcock shall be joined hereto as a Borrower on the Badcock Joinder Date, Badcock shall not be a Borrower for any purpose in any Financing Agreement..

“Borrowing” means (a) Revolving Loans of the same Type, made, converted or continued on the same date and, in the case of Term Benchmark Loans, as to which a single Interest Period is in effect, (b) Swingline Loans and (c) Overadvances.

“Borrowing Base” means the AFG Borrowing Base, the PSP Borrowing Base or the TVS Borrowing Base, as applicable.shall mean, at any time, the amount equal to:

(a)               the amount equal to:

(i)                 90% of the amount of Eligible Credit Card Receivables of the Borrowers (other than Badcock) at such time, plus

(ii)              85% of the amount of Eligible Accounts of the Borrowers (other than Badcock) at such time, plus

(iii)            90% of the Net Recovery Percentage multiplied by the Value of the Eligible Inventory of the Borrowers, net of any Inventory Reserves, in each case, at such time, minus

(b)              the Availability Reserves;

provided that (1) the aggregate amount of Eligible Inventory of the Borrowers that is (x) Inventory that is consigned to Franchisees or (y) Inventory at locations owned or leased by Franchisees shall not exceed, in the aggregate for clauses (x) and (y), the amount equal to 10% of the Borrowing Base at any time, (2) the aggregate amount of the portion of the Borrowing Base provided by Inventory at locations owned or leased by Dealers shall not exceed $30,000,000 at any time and (3) the aggregate amount of Eligible Accounts of the Borrowers in respect of Franchisee Receivables shall not exceed the amount equal to 10% of the Borrowing Base at any time.

The amounts of Eligible Inventory of the Borrowers shall be determined based on the amount of applicable Inventory set forth in the inventory record maintained by the Borrowers.

Agent shall have the right to establish Reserves against or sublimits in the Borrowing Base in such amounts and with respect to such matters as Agent shall deem reasonably necessary or appropriate in its Permitted Discretion, based on new information received by Agent and after Agent has completed its updated field audits, examinations and appraisals of the Collateral; provided, however, that, so long as no Event of Default has occurred and is continuing, Agent shall give to Administrative Borrower five Business Days’ telephonic or electronic notice if (A) Agent establishes new categories of Reserves, (B) Agent changes the methodology of calculating Reserves or (C) Agent establishes new categories of sublimits in the Borrowing Base; provided further that, during such five Business Day-period, no Borrowing may be drawn or Letter of Credit issued to the extent any Revolving Exposure Limitations would be exceeded after giving effect to any such Reserves or sublimit modifications. The foregoing notwithstanding, in the event Agent establishes Reserves to preserve or protect or maximize the value of the Collateral during the continuance of an Event of Default, Agent shall only provide Administrative Borrower with notice at the time such Reserves are established.

Accounts, Credit Card Receivables and Inventory of the Borrowers shall only be Eligible Accounts, Eligible Credit Card Receivables and Eligible Inventory, as applicable, to the extent that (x) Agent has conducted and completed a field examination, appraisal and other due diligence with respect thereto and (y) the criteria for Eligible Accounts, Eligible Credit Card Receivables and Eligible Inventory set forth herein, as applicable, are satisfied with respect thereto in accordance with this Agreement (or such other or additional criteria as Agent may, at its option, establish with respect thereto in accordance with this Agreement and subject to such Reserves as Agent may establish in its Permitted Discretion).

The Borrowing Base shall be determined at any time by Agent, on the basis of the most recently delivered Borrowing Base Certificate, as adjusted by Agent for any changes in Reserves or otherwise in accordance with the terms hereof.

Notwithstanding anything to the contrary herein, in connection with the Third Amendment, the Borrowers may submit a Borrowing Base Certificate reflecting a calculation of the Borrowing Base that includes Eligible Inventory acquired in connection with the Badcock Acquisition (collectively, the “Deemed Badcock Eligible Inventory”) and, from and after the Third Amendment Effective Date until the date that is 60 days after the Third Amendment Effective Date (or such later date not to exceed 30 days thereafter as Agent may agree to in its reasonable discretion), the Borrowing Base hereunder shall be calculated giving effect thereto; provided that, prior to the completion and delivery to Agent of the applicable field examination and inventory appraisal with respect to such Deemed Badcock Eligible Inventory, the portion of the Borrowing Base provided by Badcock shall be deemed to equal $25,000,000. On and after the date that is 60 days after the Third Amendment Effective (or such later date not to exceed 30 days thereafter as Agent may agree to in its reasonable discretion), the portion of the Borrowing Base provided by Badcock shall be deemed to equal $0 unless Agent shall have received a field examination, an inventory appraisal and an updated Borrowing Base Certificate reflecting the Borrowing Base on a pro forma basis after giving effect to the Eligible Inventory of Badcock, in each case in form and substance reasonably satisfactory to Agent, and after the delivery of all such items, the Borrowing Base shall be calculated without giving effect to this paragraph.

“Borrowing Base Certificate” shall mean a certificate substantially in the form of Exhibit D hereto, as such form may from time to time be modified by Agent to reflect modifications to the AFG Borrowing Base, the PSP Borrowing Base, the TVS Borrowing Base and the Aggregate Borrowing Base and the reporting requirements pursuant to the terms of this Agreement, which is duly completed (including all schedules thereto) and executed by the chief financial officer, a vice president of finance, a controller or other appropriate financial officer of Administrative Borrower (or if no such officer has been appointed or elected, the sole member of Administrative Borrower) reasonably acceptable to Agent and delivered to Agent.

“Borrowing Cap” shall mean, the amount, calculated at any date, equal to the lesser of (i) the Aggregate Revolving Commitment Amounts and (ii) the Aggregate Borrowing Base, in each case, in effect at such time.

“Borrowing Request” means a request by the Administrative Borrower for a Borrowing in accordance with Section 2.11.

“Buddy Top Parent” means Franchise Group Intermediate B, LLC, a Delaware limited liability company.

“Business Day” shall mean any day (other than a Saturday or a Sunday) on which banks are open for business in New York City or Chicago; provided that in relation to RFR Loans and any interest rate settings, fundings, disbursements, settlements or payments of any such RFR Loan, or any other dealings of such RFR Loan, any such day that is only a U.S. Government Securities Business Day.

“Capital Expenditures” shall mean, for any period, any expenditure of money under a Capital Lease or for the lease, purchase or other acquisition of any capital asset, or for the purchase or construction of assets, or for improvements or additions thereto, which are capitalized on a Person’s balance sheet, but excluding (i) any such expenditure to the extent of trade-ins thereon and (ii) reimbursed leasehold improvements.

“Capital Leases” shall mean, as applied to any Person, any lease of any property (whether real, personal, or mixed) by that Person (a) as lessee that, in conformity with GAAP, is or should be accounted for as a capital lease on the balance sheet of that Person or (b) as lessee which is a transaction of a type commonly known as a “synthetic lease” (i.e., a transaction that is treated as an operating lease for accounting purposes but with respect to which payments of rent are intended to be treated as payments of principal and interest on a loan for Federal income Tax purposes); provided, that lease liabilities and associated expenses recorded by FRG and its Subsidiaries (or any other applicable Persons) pursuant to Financial Accounting Standards Board Accounting Standards Update No. 2016-02, Leases (Topic 842) (“FAS 842”), shall not be treated as Indebtedness and shall not be included in Interest Expense or Fixed Charges, unless the corresponding leases would have been treated as Capital Leases under GAAP as in effect prior to the adoption of FAS 842 (in which case such leases shall be treated as Capital Leases, and the interest component of such Capital Leases shall be included in Interest Expense and Fixed Charges); provided further, that, to the extent requested by Agent, the Borrowers shall provide to Agent and, as applicable, the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such amounts or ratio made before and after giving effect to FAS 842.

“Capital Stock” shall mean, with respect to any Person, any and all shares, interests, participations or other equivalents (however designated) of such Person’s capital stock or partnership, limited liability company or other equity interests at any time outstanding, and any and all rights, warrants or options exchangeable for or convertible into such capital stock or other interests (but excluding any debt security that is exchangeable for or convertible into such capital stock).

“Capitalized Software Expenditures” means, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities) by the Borrowers and their Subsidiaries during such period in respect of purchased software or internally developed software and software enhancements that, in conformity with GAAP, are or are required to be reflected as capitalized costs on the consolidated balance sheet of the Borrowers and their Subsidiaries.

“Cash Equivalents” shall mean, at any time, (a) dollars, euros, Swiss francs, Sterling, Canadian dollars, or such other currencies held by it from time to time in the ordinary course of business, (b) readily marketable obligations issued or directly and fully guaranteed or insured by the government or any agency or instrumentality of (i) the United States, (ii) the United Kingdom, (iii) Canada, (iv) Switzerland or (v) any member nation of the European Union rated A (or the equivalent thereof) or better by S&P and A2 (or the equivalent thereof) or better by Moody’s, having average maturities of not more than 24 months from the date of acquisition thereof; provided that the full faith and credit of such country or such member nation of the European Union is pledged in support thereof, (c) time deposits with, or certificates of deposit or bankers’ acceptances of, any commercial bank that (i) is a Lender or (ii) has combined capital and surplus of at least $250,000,000 in the case of U.S. banks and $100,000,000 (or the dollar equivalent as of the date of determination) in the case of foreign banks (any such bank in the foregoing clauses (i) or (ii) being an “Approved Bank”), in each case with average maturities of not more than 12 months from the date of acquisition thereof, (d) commercial paper and variable or fixed rate notes issued by an Approved Bank (or by the parent company thereof) or any variable or fixed rate note issued by, or guaranteed by, a corporation rated A-2 (or the equivalent thereof) or better by S&P or P-2 (or the equivalent thereof) or better by Moody’s, in each case with average maturities of not more than 12 months from the date of acquisition thereof, (e) repurchase agreements entered into by any Person with an Approved Bank, a bank or trust company (including any of the Lenders) or recognized securities dealer covering securities described in clauses (b) and (c) above, (f) marketable short-term money market and similar highly liquid funds substantially all of the assets of which are comprised of securities of the types described in clauses (b) through (e) above, (g) securities with average maturities of 24 months or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, the United Kingdom, Canada, Switzerland, a member of the European Union or by any political subdivision or taxing authority of any such state, member, commonwealth or territory having an investment grade rating from either S&P or Moody’s (or the equivalent thereof), (h) investments with average maturities of 12 months or less from the date of acquisition in mutual funds rated AA- (or the equivalent thereof) or better by S&P or Aa3 (or the equivalent thereof) or better by Moody’s, (i) instruments equivalent to those referred to in clauses (a) through (h) above denominated in euros or any other foreign currency comparable in credit quality and tenor to those referred to above and customarily used by corporations for cash management purposes in any jurisdiction outside the United States to the extent reasonably required in connection with any business conducted by any Subsidiary organized or incorporated in such jurisdiction, (j) investments, classified in accordance with GAAP as current assets of the Borrower or any Subsidiary, in money market investment programs that are registered under the Investment Company Act of 1940 or that are administered by financial institutions having capital of at least $250,000,000 or its equivalent, and, in either case, the portfolios of which are limited such that substantially all of such investments are of the character, quality and maturity described in clauses (a) through (i) of this definition, (k) demand deposit accounts holding cash, (l) interest bearing instruments with a maximum maturity of 180 days in respect of which the obligor is a G7 government or other G7 governmental agency or a G7 financial institution with credit ratings from S&P of at least “A-2” or the equivalent thereof or from Moody’s of at least “P-2” or the equivalent thereof, (m) other short-term investments of a type analogous to the foregoing utilized by Foreign Subsidiaries, (n) investment funds investing at least 90% of their assets in securities of the types described in clauses (a) through (m) above and (o) any guarantee or indemnity for the obligations of a Subsidiary in connection with a Subsidiary claiming exemption from audit, the preparation and filing of its accounts or other similar exemptions (including under section 394C, 448C or 479C of the Companies Act 2006 or other similar or equivalent provisions).

“Cash Management Obligations” means (a) obligations of a Borrower or any Subsidiary in respect of any overdraft and related liabilities arising from treasury, depository, cash pooling arrangements and cash management services or any automated clearing house transfers of funds and (b) other obligations in respect of netting services, employee credit or purchase card programs and similar arrangements.

“Casualty Event” means any event that gives rise to the receipt by a Borrower or any Subsidiary of any insurance proceeds or condemnation awards, in each case, in respect of any equipment, fixed assets or real property (including any improvements thereon) to replace or repair such equipment, fixed assets or real property.

“Change in Law” means the occurrence after the date of this Agreement (or, with respect to any Lender, such later date on which such Lender becomes a party to this Agreement) of any of the following: (a) the adoption of or taking effect of any law, rule, regulation or treaty; (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority; or (c) compliance by any Lender, the Swingline Lender or the Issuing Bank (or, for purposes of Section 3.3(b), by any lending office of such Lender or by such Lender’s, the Swingline Lender’s or the Issuing Bank’s holding company, if any) with any request, guideline, requirement or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, requirements or directives thereunder or issued in connection therewith or in the implementation thereof, and (y) all requests, rules, guidelines, requirements 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 or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted, issued or implemented.

“Change of Control” means (x) the acquisition of beneficial ownership, directly or indirectly, by any Person or group, other than the Permitted Holders (directly or indirectly, including through one or more holding companies), of Capital Stock representing 35% or more of the aggregate ordinary voting power represented by the issued and outstanding Capital Stock in the Administrative Borrower and the percentage of the aggregate ordinary voting power so held is greater than the percentage of the aggregate ordinary voting power represented by the Equity Interests in the Administrative Borrower held by the Permitted Holders, unless the Permitted Holders (directly or indirectly, including through one or more holding companies) otherwise have the right (pursuant to contract, proxy or otherwise), directly or indirectly, to designate, nominate or appoint (and do so designate, nominate or appoint) a majority of the Board of the Administrative Borrower, (y) other than as a result of a disposition permitted hereunder, the failure of FRG to own directly or indirectly 100% of the total outstanding Capital Stock of any other Borrower or any Person that becomes a Borrower after the date hereof or (z) any “change of control” or similar event under the First Lien Credit Agreement, or the Second Lien Credit Agreement, the First Lien Badcock Credit Agreement or the Second Lien Badcock Credit Agreement.

For purposes of this definition, (i) “beneficial ownership” shall be as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act, (ii) the phrase “Person or group” is within the meaning of Section 13(d) or 14(d) of the Exchange Act, but excluding any employee benefit plan of such Person or “group” and its subsidiaries and any Person acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan, and (iii) if any Person or “group” includes one or more Permitted Holders, the issued and outstanding Equity Interests of the Administrative Borrower directly or indirectly owned by the Permitted Holders that are part of such Person or “group” shall not be treated as being owned by such Person or “group” for purposes of determining whether clause (c) of this definition is triggered.

“Chase” shall mean JPMorgan Chase Bank, N.A., a national banking association, in its individual capacity, and its successors.

“Chattel Paper” shall have the meaning set forth in Article 9 of the UCC.

“Closing Date” shall mean March 10, 2021.

“CME Term SOFR Administrator” means CME Group Benchmark Administration Limited as administrator of the forward-looking term Secured Overnight Financing Rate (SOFR) (or a successor administrator).

“Code” shall mean the Internal Revenue Code of 1986, as the same now exists or may from time to time hereafter be amended, modified, recodified or supplemented, together with all rules, regulations and interpretations thereunder or related thereto.

“Collateral” shall have the meaning set forth in Section 5.1 hereof. For the avoidance of doubt, prior to the Badcock Joinder Date, in no event shall any assets of Badcock constitute “Collateral”.

“Collateral Access Agreement” shall mean an agreement in writing, in form and substance reasonably satisfactory to Agent, from any lessor of premises to any Borrower or Guarantor, or any other Person to whom any Collateral is consigned or who has custody, control or possession of any such Collateral or is otherwise the owner or operator of any premises on which any of such Collateral is located, in favor of Agent (or in favor of Agent and the First Lien Agent) with respect to the Collateral at such premises or otherwise in the custody, control or possession of such lessor, consignee or other Person, inter alia, acknowledges the first priority security interest of Agent in such Collateral, agrees to waive (or subordinate on terms acceptable to Agent) any and all claims such lessor, consignee, processor or other person may, at any time, have against such Collateral, whether for storage or otherwise, and agrees to permit Agent access to, and the right to remain on, the premises of such lessor, consignee, processor or other person so as to exercise Agent’s rights and remedies and otherwise deal with such Collateral, and in the case of any customs broker, cargo consolidator, freight forwarder, consignee or other person who at any time has custody, control or possession of any bills of lading or other documents of title, agrees to hold such Collateral, acknowledges that it holds and will hold possession of the Collateral for the benefit of the Agent and the First Lien Agent and agrees to follow all instructions of Agent or the First Lien Agent (as the case may be) with respect thereto.

“Collateral Documents” shall mean, collectively, the Pledge Agreement, each Guaranty, the Deposit Account Control Agreements, the Investment Property Control Agreements and any other agreements, instruments and documents executed in connection with this Agreement that are intended to create, perfect or evidence liens to secure the Obligations, including, without limitation, all other security agreements, deposit account control agreements, pledge agreements, subordination agreements, pledges, powers of attorney, assignments, financing statements and all other written matter whether theretofore, now or hereafter executed by any Borrower or any Guarantor and delivered to Agent, in each case as may be amended, restated, supplemented or otherwise modified from time to time.

“Collateral Reporting Trigger Event” means any Asset Sale or other transaction (whether pursuant to the sale of Capital Stock in a Subsidiary, an Investment, a dividend or other distribution, a merger or consolidation or otherwise, but excluding any transaction that is expressly excluded from the definition of “Asset Sale”) that would result in the elimination of Collateral from the Aggregate Borrowing Base constituting 5% or more of the Aggregate Borrowing Base (on a net basis, after giving effect to all applicable advance rates, Net Recovery Percentages and any Reserves applicable to such assets) in effect immediately prior to giving effect to such Asset Sale or other transaction. In determining whether a Collateral Reporting Trigger Event has occurred in connection with any Asset Sale or other transaction, such Asset Sale or other transaction shall be taken together with all other Asset Sales and other such transactions that have occurred since the delivery of the most recent Borrowing Base Certificate required hereunder.

“Commercial Tort Claims” shall have the meaning set forth in Article 9 of the UCC.

“Commitment Increase Agreement” has the meaning assigned to such term in Section 2.4(d)(ii).

“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, and any regulations promulgated thereunder.

“Compliance Period” shall mean any period commencing on the first date on which Excess Availability is less than the greater of (a) 12.5% of the Borrowing Cap or (b) $18,750,00040,000,000, in each case for three consecutive days, and continuing until the date that both (x) Excess Availability exceeds the greater of (i) 12.5% of the Borrowing Cap or (ii) $18,750,00040,000,000, in each case for 60 consecutive days and (y) no Default or Event of Default then exists and is continuing.

“Consolidated Cash Balance” means, at any time, the aggregate amount of cash and Cash Equivalents, marketable securities, treasury bonds and bills, certificates of deposit, investments in money market funds, and commercial paper, in each case, held or owned by (either directly or indirectly), credited to the account of or would otherwise be required to be reflected as an asset on the balance sheet of the Loan Parties.

“Consolidated Cash Interest Charges” means, for any period, the total interest expense of the Administrative Borrower and its Subsidiaries for such period determined on a consolidated basis net of any interest income, which shall be determined on a cash basis only and solely in respect of Indebtedness of the type described in the definition of Total Indebtedness and excluding, for the avoidance of doubt, (i) any non-cash interest expense and any capitalized interest, whether paid or accrued, (ii) the amortization of original issue discount resulting from the issuance of Indebtedness at less than par, (iii) amortization of deferred financing costs, debt issuance costs, commissions, fees and expenses (including agency costs, amendment, consent or other front end, one-off or similar non-recurring fees), (iv) any expenses resulting from discounting of indebtedness in connection with the application of recapitalization accounting or purchase accounting, (v) penalties or interest related to taxes and any other amounts of non-cash interest resulting from the effects of acquisition method accounting or pushdown accounting, (vi) the accretion or accrual of, or accrued interest on, discounted liabilities (other than Indebtedness) during such period, (vii) non-cash interest expense attributable to the movement of the mark-to-market valuation of obligations under hedging agreements or other derivative instruments pursuant to FASB Accounting Standards Codification No. 815-Derivatives and Hedging, (viii) any one-time cash costs associated with breakage in respect of Hedge Agreements for interest rates, (ix) any payments with respect to make whole premiums, commissions or other breakage costs of any Indebtedness, (x) all non-recurring interest expense consisting of liquidated damages for failure to timely comply with registration rights obligations, all as calculated on a consolidated basis in accordance with GAAP, (xi) expensing of bridge, arrangement, structuring, commitment, fronting or other financing fees, (xii) fees and expenses (including any penalties and interest relating to Taxes but excluding any bona fide interest expense) associated with the consummation of the Transactions, (xiii) agency fees paid to the administrative agents and collateral agents under any credit facilities or other debt instruments or documents and (xiv) fees (including any ticking fees) and expenses (including any penalties and interest relating to Taxes) associated with any Investment not prohibited by Section 9.10 or the issuance of Capital Stock or Indebtedness (in each case excluding any bona fide interest expense).

“Consolidated Net Income” means, for any period, the net income (loss) of the Borrowers and their Subsidiaries for such period determined on a consolidated basis in accordance with GAAP, excluding, without duplication,

(a)                extraordinary (as defined under GAAP as in effect prior to FASB Update No. 2015-01), unusual, or non-recurring gains or losses for such period,

(b)                the cumulative effect of a change in accounting principles during such period;

(c)                any Transaction Costs incurred during such period,

(d)                any fees, costs and expenses (including (x) any transaction or retention bonus or similar payment and (y) any indemnities) incurred during such period, or any amortization thereof for such period, in connection with or in relation to any acquisition (including any acquisition of a franchisee), non-recurring costs to acquire equipment to the extent not capitalized in accordance with GAAP, Investment, recapitalization, asset disposition, non-competition agreement, incurrence, issuance or repayment of debt or similar transaction, issuance of equity securities, option buyouts, refinancing transaction or amendment or other modification of or waiver or consent relating to any debt instrument or similar transaction (in each case, including the Transaction Costs and any such transaction consummated prior to the Closing Date and any such transaction undertaken but not completed) and any charges or non-recurring merger costs incurred during such period as a result of any such transaction, in each case whether or not successful (including, for the avoidance of doubt, the effects of expensing all transaction-related expenses in accordance with FASB Accounting Standards Codification 805 and gains or losses associated with FASB Accounting Standards Codification 460),

(e)                any income (loss) (and all fees and expenses or charges relating thereto) for such period attributable to the early extinguishment of Indebtedness, hedging agreements or other derivative instruments,

(f)                 accruals and reserves that are established or adjusted as a result of the Transactions or any Permitted Acquisition or other Investment not prohibited under this Agreement in accordance with GAAP (including any adjustment of estimated payouts on Earn-Outs) or changes as a result of the adoption or modification of accounting policies during such period,

(g)                stock-based award compensation expenses (including any one-time compensation related to unvested options outstanding as of the Closing Date),

(h)                any income (loss) attributable to deferred compensation plans or trusts,

(i)                 any income (loss) from Investments recorded using the equity method,

(j)                 the amount of any expense required to be recorded as compensation expense related to contingent transaction consideration,

(k)                any unrealized gain or loss due solely to fluctuations in currency values and the related tax effects, determined in accordance with GAAP,

(l)                 [Reserved],

(m)              (A) the amount of management, monitoring, consulting and advisory fees, indemnities and related expenses paid or accrued in such period (including any termination fees payable in connection with the early termination of management and monitoring agreements) and (B) the amount of expenses relating to payments made to option holders of the Administrative Borrower or any of its direct or indirect parent companies in connection with, or as a result of, any distribution being made to shareholders of such Person or its direct or indirect parent companies, which payments are being made to compensate such option holders as though they were shareholders at the time of, and entitled to share in, such distribution, in each case, to the extent permitted in the Financing Agreements,

(n)                any costs or expenses incurred by the Borrowers or any Subsidiary pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement, any severance agreement or any stock subscription or shareholder agreement, to the extent that such costs or expenses are non-cash or otherwise funded with cash proceeds contributed to the capital of the Borrowers or net proceeds received in cash or Cash Equivalents of an issuance of Capital Stock of the Borrowers (other than Disqualified Equity Interests),

(o)                the Consolidated Net Income of any Subsidiary to the extent that the declaration or payment of dividends or similar distributions by that Subsidiary of that Consolidated Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary or its stockholders, and

(p)                any non-cash goodwill impairment charges or other intangible asset impairment charges incurred subsequent to the date of this Agreement resulting from the application of ASC 350 or other non-cash asset impairment charges incurred subsequent to the date of this Agreement resulting from the application of SFAS 144.

There shall be included in Consolidated Net Income, without duplication, the amount of any cash tax benefits related to the tax amortization of intangible assets in such period. There shall be excluded from Consolidated Net Income for any period the effects from applying acquisition method accounting, including applying acquisition method accounting to inventory, property and equipment, loans and leases, software and other intangible assets and deferred revenue (including deferred costs related thereto and deferred rent) required or permitted by GAAP and related authoritative pronouncements (including the effects of such adjustments pushed down to the Borrowers and their Subsidiaries), as a result of the Transactions, any acquisition or Investment consummated prior to the Closing Date and any Permitted Acquisitions (or other Investment not prohibited hereunder) or the amortization or write-off of any amounts thereof.

In addition, to the extent included in the Consolidated Net Income of such Person and its Subsidiaries, notwithstanding anything to the contrary in the foregoing, Consolidated Net Income shall (i) exclude any expenses and charges that are reimbursed by indemnification or other reimbursement provisions in connection with any acquisition or other investment or any sale, conveyance, transfer or other disposition of assets permitted hereunder and (ii) include the amount of business interruption insurance proceeds received and, to the extent covered by insurance and actually reimbursed, or, so long as the Administrative Borrower has made a determination that there exists reasonable evidence that such amount will in fact be reimbursed by the insurer and only to the extent that such amount is (A) not denied by the applicable carrier in writing within 180 days and (B) in fact reimbursed within 365 days of the date of such evidence (with a deduction for any amount so added back to the extent not so reimbursed within such 365 days), expenses with respect to liability or casualty events or business interruption.

“Control” shall have the meaning set forth in Article 8 or, if applicable, in Section 9-104, 9-105, 9-106 or 9-107 of Article 9 of the UCC.

“Copyright License” means any written agreement or license now or hereafter in effect, granting to or from any Person any use right under any Copyright now or hereafter owned by any other Person or that such other Person otherwise has the right to license, and all rights of any such Person under any such agreement or license.

“Copyrights” means (a) all copyright rights in any work arising under the copyright laws of the United States or any other jurisdiction, whether as author, assignee, transferee or otherwise, (b) all registrations and applications for registration of any such copyright, including registrations, supplemental registrations and pending applications for registration in the United States Copyright Office and (c) all extensions, renewals, and restorations thereof.

“Corresponding Tenor” with respect to any Available Tenor means, as applicable, either a tenor (including overnight) or an interest payment period having approximately the same length (disregarding business day adjustment) as such Available Tenor.

“Covered Entity” means any of the following:

(a)               a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);

(b)               a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or

(c)               a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).

“Covered Party” has the meaning assigned to it in Section 13.12.

“COVID-19 Pandemic” means the global spread of the coronavirus illness, which was declared to be a pandemic by the World Health Organization on March 11, 2020.

“Credit Card Acknowledgments” shall mean, collectively, the agreements by Credit Card Issuers or Credit Card Processors who are parties to Credit Card Agreements in favor of Agent acknowledging Agent’s first priority security interest, for and on behalf of Lenders, in the monies due and to become due to a Borrower (including, without limitation, credits and reserves) under the Credit Card Agreements, and agreeing to transfer all such amounts to the Blocked Accounts, as the same now exist or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced pursuant to their terms, sometimes being referred to herein individually as a “Credit Card Acknowledgment”.

“Credit Card Agreements” shall mean all agreements entered into on, prior and after the date hereof by any Borrower or for the benefit of any Borrower, in each case with any Credit Card Issuer or any Credit Card Processor, as the same now exist or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced, including, but not limited to, the agreements set forth on Schedule 8.16 hereto.

“Credit Card Issuer” shall mean any Person (other than FRG and its Subsidiaries) who issues or whose members issue credit cards, including, without limitation, MasterCard or VISA bank credit or debit cards or other bank credit or debit cards issued through MasterCard International, Inc., Visa, U.S.A., Inc. or Visa International and American Express, Discover, Japan Credit Bureau (a/k/a JCB Co.), Diners Club, Carte Blanche and other non-bank credit or debit cards, including, without limitation, credit or debit cards issued by or through American Express Travel Related Services Company, Inc., and Novus Services, Inc., and other issuers approved by the Agent.

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

“Credit Card Receivables” shall mean, collectively, (a) all present and future rights of any Borrower to payment from any Credit Card Issuer or Credit Card Processor arising from sales of goods or rendition of services to customers who have purchased such goods or services using a credit or debit card and (b) all present and future rights of any Borrower to payment from any Credit Card Issuer, Credit Card Processor or other third party in connection with the sale or transfer of Credit Card Receivables arising pursuant to the sale of goods or rendition of services to customers who have purchased such goods or services using a credit card or a debit card, including, but not limited to, all amounts at any time due or to become due from any Credit Card Issuer or Credit Card Processor under the Credit Card Agreements or otherwise which, in the case of both clause (a) and (b) above, have been earned by performance by such Borrower but not yet been paid to such Borrower by the Credit Card Issuer or the Credit Card Processor, as applicable.

“Credit Facility” shall mean the Loans, Swingline Loans and Letters of Credit provided to or for the benefit of any Borrower pursuant to Sections 2.1, 2.2 and 2.3 hereof.

“Cross-Silo Loan Party” means (a) with respect to the AFG Loan Parties, (i) the PSP Loan Parties and (ii) TVS Loan Parties, (b) with respect to the PSP Loan Parties, (i) the AFG Loan Parties and (ii) the TVS Loan Parties and (c) with respect to the TVS Loan Parties, (i) the AFG Loan Parties and (ii) the PSP Loan Parties.

“Daily Simple SOFR” means, for any day (a “SOFR Rate Day”), a rate per annum equal to SOFR for the day that is five (5) U.S. Government Securities Business Days prior to (i) if such SOFR Rate Day is a U.S. Government Securities Business Day, such SOFR Rate Day or (ii) if such SOFR Rate Day is not a U.S. Government Securities Business Day, the U.S. Government Securities Business Day immediately preceding such SOFR Rate Day, in each case, as such SOFR is published by the SOFR Administrator on the SOFR Administrator’s Website. Any change in Daily Simple SOFR due to a change in SOFR shall be effective from and including the effective date of such change in SOFR without notice to the Administrative Borrower.

“Deemed Eligible Credit Card Receivables” has the meaning assigned to it in the definition of “PSP Borrowing Base”.

“Dealer Agreement” means a dealer agreement between any Borrower, as owner, and any other Person, as dealer, pertaining to the establishment and operation of a business with operations comparable to the operations of the AFG Borrowers and their Subsidiaries, Badcock, the PSP Borrowers and their Subsidiaries or the TVS Borrowers and their Subsidiaries, as applicable.

“Dealer Eligibility Requirements” means, collectively, each of the following:

(a)               the applicable Borrower has executed an agreement with the applicable Dealer to operate a dealership under one of the brands as listed on Schedule 1E hereto, or any subsequent rebranding of such dealership, at a location owned or leased and operated by such Dealer, substantially on the standard form agreements containing terms and conditions established by the Borrowers from time to time, which shall include (A) an acknowledgement from such Dealer that the Borrowers, or Agent acting on behalf of the Borrowers, are authorized to transfer proceeds of the Inventory consigned by such Borrower to such Dealer from the bank account maintained by such Dealer to an account in the name of a Borrower and (B) an acknowledgement by the Dealer that the applicable Borrower has granted a Lien to Agent on the Inventory consigned by such Borrower to the Dealer and an agreement by the Dealer to reasonably cooperate with Agent in the event of the exercise by Agent of its rights and remedies with respect to such Lien; provided that this clause (a) shall be deemed to be satisfied if both (x) the applicable Borrower and the applicable Dealer have entered into a Dealer Agreement substantially in the form of the “Dealership Agreement Template” provided to Agent prior to the Third Amendment Effective Date (and such Dealer Agreement shall have been delivered by the applicable Borrower to Agent) and (y) the applicable Borrower shall have (I) delivered a written notice (which shall include notice by electronic means) executed by such Borrower to the applicable Dealer that such Borrower has irrevocably designated Agent as an express third-party beneficiary of the applicable Dealer Agreement, that Agent irrevocably has all of the rights of such a beneficiary under such Dealer Agreement and that such Borrower retains all right, title and interest in and to the Inventory subject to such Dealer Agreement and (II) provided written evidence (including by electronic means) to Agent of such delivery;

(b)              the applicable Borrower has provided Agent with evidence that such Borrower has filed appropriate UCC financing statements against the applicable Dealer evidencing the consignment arrangement between such Borrower and the applicable Dealer with respect to the Inventory consigned by such Borrower to the applicable Dealer, and has taken all other action required under applicable Requirements of Law to obtain a valid, first priority perfected (subject to the same Liens permitted in clause (j) of the definition of “Eligible Inventory”) security interest (or a pre-existing Lien) in such Inventory (including, without limitation, providing notification to other secured parties of the applicable Dealer as required by the UCC);

(c)               if requested by Agent, the applicable Borrower has provided the Agent with an assignment of the UCC financing statements set forth in clause (b) above;

(d)              [reserved]; and

(e)               the agreements between the applicable Borrower and the applicable Dealer provide that all amounts owed by such Dealer to such Borrower shall be swept or deposited (including by the applicable Dealer) at least daily (provided that such deposits will only be required to be daily with respect to any Business Day) into (i) an account of a Borrower which is subject to a Deposit Account Control Agreement or (ii) a Store Account with respect to which the Loan Parties are in compliance with Section 6.3.

For the purposes of paragraph (a) above, “reasonably cooperate with Agent” means that the Dealer will, at Agent’s expense and with reasonable prior notice from Agent, (i) give Agent and its representatives access during normal business hours to all Inventory consigned by the applicable Borrower to the Dealer, (ii) permit Agent and its representatives to take possession and control of the Inventory consigned by the applicable Borrower to the Dealer, and to remove the Inventory from the premises of the Dealer, (iii) to the extent not prohibited by applicable location occupancy agreements (including leases), conduct “going out of business sales” and engage in similar activities with respect to the Inventory consigned by the applicable Borrower to the Dealer, and (iv) take all other commercially reasonable actions with respect to the Inventory consigned by the applicable Borrower to the Dealer that, upon Agent’s request, may be reasonably necessary to permit Agent to exercise all of its rights and remedies with respect to the Lien on the Inventory consigned by such Borrower to the Dealer.

“Dealers” means, as of the Third Amendment Effective Date, the individuals and entities listed in Schedule 1D as “dealers”, and thereafter, such entities and any additional individual or entity that meets the Dealer Eligibility Requirements.

“Deemed Badcock Eligible Inventory” has the meaning assigned to it in the definition of “PSP Borrowing Base”.

“Default” shall mean an act, condition or event which with notice or passage of time or both would constitute an Event of Default.

“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.

“Defaulting Lender” shall mean any Revolving Lender, as determined by Agent, that has (a) failed to fund any portion of its Revolving Loans or participations in Letters of Credit or Swingline Loans within three Business Days of the date required to be funded by it hereunder, (b) notified any Borrower, Agent, the Swingline Lender, the Issuing Bank or any Lender in writing that it does not intend to comply with any of its funding obligations under this Agreement or has made a public statement to the effect that it does not intend to comply with its funding obligations under this Agreement or under other agreements in which it commits to extend credit, (c) failed, within three Business Days after request by Agent, to confirm that it will comply with the terms of this Agreement relating to its obligations to fund prospective Revolving Loans and participations in then outstanding Letters of Credit and Swingline Loans, (d) otherwise failed to pay over Agent or any other Lender any other amount required to be paid by it hereunder within three Business Days of the date when due, unless the subject of a good faith dispute, or (e) (i) become or is insolvent or has a parent company that has become or is insolvent or (ii) become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment or has a parent company that has become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment.

“Deposit Accounts” shall have the meaning set forth in Article 9 of the UCC.

“Deposit Account Control Agreement” shall mean an agreement in writing, in form and substance reasonably satisfactory to Agent, by and among Agent, the First Lien Agent (if a party thereto), the Second Lien Agent (if a party thereto), Borrowers or Guarantor with a Deposit Account at any bank and the bank at which such Deposit Account is at any time maintained which provides that such bank will comply with instructions originated by Agent directing disposition of the funds in the Deposit Account without further consent by such Borrower or Guarantor upon the occurrence of an Event of Default or upon the commencement of a Compliance Period and at all times during the continuance of such Event of Default or Compliance Period, and has such other terms and conditions as Agent may reasonably require including as to any such agreement with respect to any Blocked Account, providing that all items received or deposited in the Blocked Accounts are the property of Agent, for itself and the ratable benefit of the Lenders and the Bank Product Providers and, except as otherwise agreed with the corresponding bank and with such other appropriate or customary exceptions for agreements of this kind, that the bank has no lien upon, or right to set off against, the Blocked Accounts, the items received for deposit therein, or the funds from time to time on deposit therein and that the bank will upon the occurrence of an Event of Default or upon the commencement of a Compliance Period and at all times during the continuance of such Event of Default or Compliance Period, wire, or otherwise transfer, in immediately available funds, on a daily basis to the Agent Payment Account all funds received or deposited into the Blocked Accounts.

“Designated Non-Cash Consideration” means the fair market value of non-cash consideration received by the Borrower or a Subsidiary in connection with a disposition pursuant to Section 6.5(U) that is designated as Designated Non-Cash Consideration pursuant to a certificate of an Authorized Officer of the Administrative Borrower, setting forth the basis of such valuation (which amount will be reduced by the fair market value of the portion of the non-cash consideration converted to cash within 180 days following the consummation of the applicable disposition or, if converted to cash after 180 days, the lesser of (a) the consideration in cash or cash equivalents received from such conversion and (b) the fair market value of such non-cash consideration at the time of such conversion).

“Disposed EBITDA” means, with respect to any Sold Entity or Business for any period through (but not after) the date of such disposition, the amount for such period of EBITDA of such Sold Entity or Business (determined as if references to the Borrowers and their Subsidiaries in the definition of the term “EBITDA” (and in the component financial definitions used therein) were references to such Sold Entity or Business and its subsidiaries), all as determined on a consolidated basis for such Sold Entity or Business.

“Disqualified Equity Interest” means, with respect to any Person, any Capital Stock in such Person that by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable, either mandatorily or at the option of the holder thereof), or upon the happening of any event or condition:

(a)                matures or is mandatorily redeemable or contains any mandatory put, redemption or repayment provision (other than solely for Capital Stock in such Person that do not constitute Disqualified Equity Interests and cash in lieu of fractional shares of such Capital Stock), whether pursuant to a sinking fund obligation or otherwise;

(b)                is convertible or exchangeable, either mandatorily or at the option of the holder thereof, for Indebtedness or Capital Stock (other than solely for Capital Stock in such Person that do not constitute Disqualified Equity Interests and cash in lieu of fractional shares of such Capital Stock);

(c)                is redeemable (other than solely for Capital Stock in such Person that do not constitute Disqualified Equity Interests and cash in lieu of fractional shares of such Capital Stock) or is required to be repurchased by such Person or any of its Affiliates, in whole or in part, at the option of the holder thereof; or

(d)                in the case of any preferred Capital Stock, provides for scheduled payments of dividends and/or distributions in cash;

in each case, on or prior to the date ninety-one (91) days after the Maturity Date; provided, however, that (i) an Capital Stock in any Person that would not constitute a Disqualified Equity Interest but for terms thereof giving holders thereof the right to require such Person to redeem or purchase such Capital Stock upon the occurrence of an “asset sale” or a “change of control” or similar event shall not constitute a Disqualified Equity Interest if any such requirement becomes operative only after, or payment thereunder is subject to the prior, repayment in full of all the Loans and all other Obligations that are accrued and payable and the termination of the Revolving Commitments, (ii) if an Capital Stock in any Person is issued pursuant to any plan for the benefit of employees of the Administrative Borrower or any of its subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute a Disqualified Equity Interest solely because it may be required to be repurchased by the Administrative Borrower or any of its subsidiaries in order to satisfy applicable statutory or regulatory obligations of such Person and (iii) any Capital Stock in any Person that would not constitute a Disqualified Equity Interest but for a requirement of payment of dividends or distributions in violation of clauses (a) or (b) above shall not constitute a Disqualified Equity Interest if the terms of such Capital Stock (x) give the applicable issuer the option to elect to pay such dividends or distributions on a non-cash basis and (y) do not require the cash payment of dividends or distributions at any time that such cash payment is not permitted under Section 9.11 or Section 9.24 or would result in an Event of Default hereunder.

“Dividing Person” has the meaning assigned to it in the definition of “Division.”

“Division” means the division of the assets, liabilities and/or obligations of a Person (the “Dividing Person”) among two or more Persons (whether pursuant to a “plan of division” or similar arrangement), which may or may not include the Dividing Person and pursuant to which the Dividing Person may or may not survive.

“Division Successor” means any Person that, upon the consummation of a Division of a Dividing Person, holds all or any portion of the assets, liabilities and/or obligations previously held by such Dividing Person immediately prior to the consummation of such Division. A Dividing Person which retains any of its assets, liabilities and/or obligations after a Division shall be deemed a Division Successor upon the occurrence of such Division.

“Documents” shall have the meaning set forth in Article 9 of the UCC.

“dollars” or “$” refers to lawful money of the U.S., unless the context clearly otherwise indicates.

“E-Payables Agreement” shall mean that certain Bank of America Corporate Purchasing Card Agreement, dated as of June 7, 2007, by and among the parties thereto, including TVS and Bank of America, N.A.

“E-Payables Reserve” shall mean any Reserves implemented by Agent pursuant to clause (b)(ii) of the definition of Obligations related to the E-Payables Agreement.

“Earn-Outs” means, with respect to any Person, obligations of such Person arising from Permitted Acquisitions or other Investments permitted hereunder which are payable to the sellers thereunder in their capacity as such based on the achievement of specified financial results or other criteria or milestones over time.

“EBITDA” means, for any period, Consolidated Net Income for such period, plus:

(a)                without duplication and to the extent already deducted (and not added back) in arriving at such Consolidated Net Income, the sum of the following amounts for such period:

(i)                 total Interest Expense and, to the extent not reflected in such total Interest Expense, the sum of (A) premium payments, debt discount, fees, charges and related expenses incurred in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets plus (B) the portion of rent expense with respect to such period under Capital Leases that are treated as interest expense in accordance with GAAP plus (C) the implied interest component of synthetic leases with respect to such period plus (D) any losses on hedging obligations or other derivative instruments entered into for the purpose of hedging interest rate risk, net of interest income and gains on such hedging obligations or such derivative instruments plus (E) bank and letter of credit fees and costs of surety bonds in connection with financing activities, plus (F) amortization or write-off of deferred financing fees, debt issuance costs, debt discount or premium, terminated hedging obligations and other commissions, financing fees and expenses and, adjusted, to the extent included, to exclude any refunds or similar credits received in connection with the purchasing or procurement of goods or services under any purchasing card or similar program;

(ii)              provision for taxes based on income, profits, revenue or capital and sales taxes, including federal, foreign, state, franchise, excise, and similar taxes paid or accrued during such period (including in respect of repatriated funds) including penalties and interest related to such taxes or arising from any tax examinations;

(iii)            Non-Cash Charges;

(iv)             [reserved];

(v)               net cash received from A Team and its Subsidiaries and utilized to repay or prepay Indebtedness;

(vi)             severance, relocation, integration and facilities’ opening costs and expenses and other business optimization costs and expenses and operating improvements (including related to new product introductions and any operating expenses, losses or charges related to the implementation of cost savings initiatives, operating expense reductions and other similar initiatives), recruiting fees, signing costs, reserve, retention, recruiting, relocation and signing bonuses and expenses, transition costs, costs related to closure/consolidation of facilities, internal costs in respect of strategic initiatives and curtailments or modifications to pension and post-retirement employee benefit plans (including any settlement of pension liabilities), contract terminations, professional and consulting fees incurred in connection with any of the foregoing and other one-time and nonoperational costs and expenses;

(vii)          restructuring costs, charges, accruals or reserves (including restructuring and integration costs related to acquisitions and adjustments to existing reserves), whether or not classified as restructuring expense on the consolidated financial statements;

(viii)        the amount of any non-controlling interest consisting of income attributable to non-controlling interests of third parties in any Non-Wholly Owned Subsidiary deducted (and not added back in such period) in calculating Consolidated Net Income, excluding cash distributions in respect thereof;

(ix)             [reserved];

(x)               any non-cash loss attributable to the mark to market movement in the valuation of any Capital Stock, and hedging obligations or other derivative instruments (in each case, including pursuant to Financial Accounting Standards Codification No. 815—Derivatives and Hedging);

(xi)             any loss relating to amounts paid in cash prior to the stated settlement date of any hedging obligation that has been reflected in Consolidated Net Income for such period;

(xii)          any gain relating to hedging obligations that has been reflected in Consolidated Net Income in prior periods and excluded from EBITDA pursuant to clause (c)(iv) below;

(xiii)        any net pension or other post-employment benefit costs representing amortization of unrecognized prior service costs, actuarial losses, including amortization of such amounts arising in prior periods, amortization of the unrecognized net obligation (and loss or cost) existing at the date of initial application of FASB Accounting Standards Codification 715, and any other items of a similar nature;

(xiv)         charges, losses, lost profits, expenses (including litigation expenses, fee and charges) or write-offs to the extent indemnified or insured by a third party, including expenses or losses covered by indemnification provisions or by any insurance provider in connection with the Transactions, a Permitted Acquisition or any other acquisition or Investment, disposition or any Event of Loss, in each case, to the extent that coverage has not been denied and so long as such amounts are actually reimbursed in cash within one year after the related amount is first added to EBITDA pursuant to this clause (xiv) (and if not so reimbursed within one year, such amount shall be deducted from EBITDA during the next measurement period);

(xv)           cash receipts (or any netting arrangements resulting in reduced cash expenses) not included in EBITDA in any period to the extent non-cash gains relating to such receipts were deducted in the calculation of EBITDA pursuant to clause (c) below for any previous period and not added back;

(xvi)         Earn-Out payments, contingent consideration obligations (including to the extent accounted for as bonuses or otherwise) and adjustments thereof and purchase price adjustments incurred in connection with the PSP Acquisition and/or any acquisition or other investment (including any acquisition or other investment consummated prior to the Closing Date) which are paid or accrued during the applicable period;

(xvii)      other adjustments (i) identified to Agent prior to the Closing Date, (ii) set forth in (A) the Model or (B) the quality of earnings report prepared by independent registered public accountants of recognized national standing or any other accounting firm reasonably acceptable to the Agent and delivered to the Agent in connection with the Transactions or (iii) contemplated by the PSP Acquisition Agreement; and

(xviii)    without duplication and solely for the purpose of Section 9.17 and not for any other purpose under this Agreement, (x) Cure Amounts (as defined in the First Lien Credit Agreement) received pursuant to the Cure Right (as defined in the First Lien Credit Agreement) in accordance with Section 7.02 of the First Lien Credit Agreement (without giving effect to any amendments, restatements, supplements or other modifications thereto) and (y) Cure Amounts (as defined in the Second Lien Credit Agreement) received pursuant to the Cure Right (as defined in the Second Lien Credit Agreement) in accordance with Section 7.02 of the Second Lien Credit Agreement (without giving effect to any amendments, restatements, supplements or other modifications thereto); plus

(b)                without duplication, (i) the amount of “run rate” cost savings, operating expense reductions and synergies related to any of the Transactions, any Specified Transaction, any restructuring, any business optimization activities, cost saving initiatives and operating improvements or other initiatives, actions or events (each of the foregoing, an “Event”) that are reasonably identifiable and projected by the Administrator Borrower in good faith to result from actions that either have been taken, with respect to which substantial steps have been taken or that are expected to be taken within 18 months after the date of consummation of such Event (or, if the underlying Event is any of the Transactions, within 18 months after the Closing Date) (including actions initiated prior to the Closing Date) (in the good faith determination of the Administrative Borrower) (which cost savings, operating expense reductions and synergies shall be added to EBITDA until fully realized and calculated on a pro forma basis as though such cost savings, operating expense reductions and synergies had been realized on the first day of the relevant period), net of the amount of actual benefits realized from such actions; provided that no cost savings, operating expense reductions or synergies shall be added pursuant to this clause (b) to the extent duplicative of any expenses or charges relating to such cost savings, operating expense reductions, other operating improvements or synergies that are included above or in the definition of “pro forma basis” (it being understood and agreed that “run rate” shall mean the full recurring benefit that is associated with any action taken); provided, further that the aggregate amount of addbacks to EBITDA pursuant this clause (b) for any period, excluding any addbacks for such period pursuant to this clause (b) where the underlying Event is any of the Transactions, shall not exceed 20.0% of EBITDA for such period (calculated after giving effect to such addbacks); less

(c)                without duplication and to the extent included in arriving at such Consolidated Net Income, the sum of the following amounts for such period:

(i)                 non-cash gains (excluding any non-cash gain to the extent it represents the reversal of an accrual or reserve for a potential cash item that reduced Consolidated Net Income or EBITDA in any prior period and any non-cash gains attributable to accrual of revenue or recording of receivables in the ordinary course of business);

(ii)              any non-cash gain attributable to the mark to market movement in the valuation of any Capital Stock, and hedging obligations or other derivative instruments (in each case, including pursuant to Financial Accounting Standards Codification No. 815—Derivatives and Hedging);

(iii)            any gain relating to amounts received in cash prior to the stated settlement date of any hedging obligation that has been reflected in Consolidated Net Income in such period;

(iv)             any loss relating to hedging obligations that has been reflected in Consolidated Net Income in prior periods and excluded from EBITDA pursuant to clauses (a)(xi) and (a)(xii) above;

(v)               the amount of any non-controlling interest consisting of loss attributable to non-controlling interests of third parties in any Non-Wholly Owned Subsidiary added (and not deducted in such period) to Consolidated Net Income;

(vi)             non-cash gains increasing Consolidated Net Income of such Person for such period, excluding any non-cash gains to the extent they represent the reversal of an accrual or cash reserve for a potential cash item that reduced EBITDA in any prior period, any non-cash gains with respect to cash actually received in a prior period so long as such cash did not increase EBITDA in such prior period, and any non-cash gains attributable to accrual of revenue or recording of receivables in the ordinary course of business; and

(vii)          any amount included in Consolidated Net Income of such Person for such period attributable to non-controlling interests pursuant to the application of FASB Accounting Standards Codification Topic 810-10-45;

in each case, as determined on a consolidated basis for the BorrowerFRG and its Subsidiaries in accordance with GAAP; provided that:

(I)                to the extent included in Consolidated Net Income, there shall be excluded in determining EBITDA currency translation gains and losses related to currency remeasurements of assets or liabilities (including the net loss or gain resulting from hedging agreements for currency exchange risk and revaluations of intercompany balances),

(II)              to the extent included in Consolidated Net Income, there shall be excluded in determining EBITDA for any period any adjustments resulting from the application of Financial Accounting Standards Codification No. 815—Derivatives and Hedging,

(III)           there shall be included in determining EBITDA for any period, without duplication, (A) to the extent not included in Consolidated Net Income, the Acquired EBITDA of any Person, property, business or asset acquired by the Borrower or any Subsidiary during such period to the extent not subsequently sold, transferred or otherwise disposed of (but not including the Acquired EBITDA of any related Person, property, business or assets to the extent not so acquired) (each such Person, property, business or asset acquired, including pursuant to the Transactions, an “Acquired Entity or Business”), based on the Acquired EBITDA of such Pro Forma Entity for such period (including the portion thereof occurring prior to such acquisition or conversion) determined on a historical pro forma basis and (B) in the case of any Person that is not a Subsidiary or that is accounted for by the equity method of accounting, the EBITDA of such Person multiplied by the ownership percentage of the Borrower or applicable Subsidiary therein;

(IV)          there shall be (A) to the extent included in Consolidated Net Income, excluded in determining EBITDA for any period the Disposed EBITDA of any Person, property, business or asset sold, transferred or otherwise disposed of, closed or classified as discontinued operations in accordance with GAAP (other than (x) if so classified on the basis that it is being held for sale unless such sale has actually occurred during such period and (y) for periods prior to the applicable sale, transfer or other disposition, if the Disposed EBITDA of such Person, property, business or asset is positive (i.e., if such Disposed EBITDA is negative, it shall be added back in determining EBITDA for any period)) by the Borrower or any Subsidiary during such period (each such Person, property, business or asset so sold, transferred or otherwise disposed of, closed or classified, a “Sold Entity or Business”), based on the Disposed EBITDA of such Sold Entity or Business for such period (including the portion thereof occurring prior to such sale, transfer, disposition, closure, classification or conversion) determined on a historical pro forma basis and (B) to the extent not included in Consolidated Net Income, included in determining EBITDA for any period in which a Sold Entity or Business is disposed, an adjustment equal to the Pro Forma Disposal Adjustment with respect to such Sold Entity or Business (including the portion thereof occurring prior to such disposal) as specified in the Pro Forma Disposal Adjustment certificate delivered to the Agent (for further delivery to the Lenders); and

(V)             to the extent included in Consolidated Net Income, there shall be excluded in determining EBITDA any non-cash expense (or income) as a result of adjustments recorded to contingent consideration liabilities relating to the Transaction or any Permitted Acquisition (or other Investment permitted hereunder).

Notwithstanding the foregoing, EBITDA shall be deemed to equal (a) $127,130,374 for the fiscal quarter of the Administrative Borrower ended on or about March 31, 2020, (b) $80,121,961 for the fiscal quarter of the Administrative Borrower ended on or about June 30, 2020, (c) $73,342,974 for the fiscal quarter of the Administrative Borrower ended on or about September 30, 2020, (d) $59,648,397 for the fiscal quarter of the Administrative Borrower ended on or about December 31, 2020 and (e) $25,460,393 for the fiscal month of the Administrative Borrower ended on or about January 31, 2021 (it being understood that such amounts are subject to adjustments, as and to the extent otherwise contemplated in this Agreement, in connection with any calculation on a pro forma basis); provided that such amounts of EBITDA for any such fiscal quarter shall be adjusted to include, without duplication, any cost savings that would otherwise be included pursuant to clause (b) of this definition.

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

“EEA Financial Institution” means (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 an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

“EEA Resolution Authority” means 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.

“Electronic Signature” means an electronic sound, symbol, or process attached to, or associated with, a contract or other record and adopted by a Person with the intent to sign, authenticate or accept such contract or record.

“Electronic System” means any electronic system, including e-mail, e-fax, web portal access for such Borrower and any other Internet or extranet-based site, whether such electronic system is owned, operated or hosted by the Agent, the Swingline Lender or the Issuing Bank and any of its respective Related Parties or any other Person, providing for access to data protected by passcodes or other security system.

“Eligible Accounts” shall mean, at any time, the Accounts of a Borrower (other than Badcock) which Agent determines in its Permitted Discretion are eligible as the basis for the extension of Loans and Swingline Loans and the issuance of Letters of Credit. Eligible Accounts shall be calculated, without duplication of any Reserves, net of customer deposits, unapplied cash, taxes, finance charges, service charges, discounts, credits, allowances, and rebates. Without limiting Agent’s Permitted Discretion provided herein, Eligible Accounts shall not include any Account of a Borrower:

(a)               which is not subject to a first priority perfected security interest in favor of Agent;

(b)               which is subject to any lien other than (i) a lien in favor of Agent and (ii) a Permitted Encumbrance or a Lien permitted pursuant to Section 9.8(s), in each case, which does not have priority over the lien in favor of Agent;

(c)               (i) with respect to which the scheduled due date is more than 60 days after the date of the original invoice therefor, (ii) which, is unpaid more than 90 days after the date of the original invoice therefor or more than 60 days after the original due date, therefor (“Overage”) (when calculating the amount under this clause (ii), for the same Account Debtor, Agent shall include the net amount of such Overage and add back any credits, but only to the extent that such credits do not exceed the total gross receivables from such Account Debtor, or (iii) which has been written off the books of such Borrower or otherwise designated as uncollectible;

(d)               which is owing by an Account Debtor for which more than 50% of the Accounts owing from such Account Debtor and its Affiliates are ineligible hereunder;

(e)               which is owing by an Account Debtor to the extent the aggregate amount of Accounts owing from such Account Debtor and its Affiliates to (i) such Borrower exceeds 10% of the aggregate amount of Eligible Accounts of such Borrower or (ii) all TVS Borrowers exceeds 10% of the aggregate amount of Eligible Accounts of all TVS Borrowers;

(f)                with respect to which any covenant, representation, or warranty contained in this Agreement or any other Financing Agreement has been breached in any material respect or is not true in any material respect;

(g)               which (i) does not arise from the sale of goods or performance of services in the ordinary course of business, (ii) is not evidenced by an invoice or other documentation satisfactory to Agent in its Permitted Discretion which has been sent to the Account Debtor, (iii) represents a progress billing, (iv) is contingent upon such Borrower’s completion of any further performance, (v) represents a sale on a bill-and-hold, guaranteed sale, sale-and-return, sale on approval, consignment, cash-on-delivery or any other repurchase or return basis, (vi) relates to payments of interest and (vii) constitutes a Franchisee Receivable, other than a Franchisee Receivable arising after the Closing Date owing by a franchisee that has been approved by Agent in its Permitted Discretion;

(h)               for which the goods giving rise to such Account have not been shipped to the Account Debtor or for which the services giving rise to such Account have not been performed by such Borrower or if such Account was invoiced more than once;

(i)                 with respect to which any check or other instrument of payment has been returned uncollected for any reason;

(j)                 which is owed by an Account Debtor which has (i) applied for, suffered, or consented to the appointment of any receiver, custodian, trustee, or liquidator of its assets, (ii) had possession of all or a material part of its property taken by any receiver, custodian, trustee or liquidator, (iii) filed, or had filed against it, any request or petition for liquidation, reorganization, arrangement, adjustment of debts, adjudication as bankrupt, winding-up, or voluntary or involuntary case under any state or federal bankruptcy laws (other than post-petition accounts payable of an Account Debtor that is a debtor-in-possession under the United States Bankruptcy Code and reasonably acceptable to Agent), (iv) admitted in writing its inability, or is generally unable to, pay its debts as they become due, (v) become insolvent or (vi) ceased operation of its business;

(k)               which is owed by any Account Debtor which has sold all or a substantially all of its assets;

(l)                 which is owed by an Account Debtor which (i) does not maintain its chief executive office in the U.S. or (ii) is not organized under applicable law of the U.S. or any state of the U.S. unless, in either case, such Account is backed by a Letter of Credit acceptable to Agent which is in the possession of, and is directly drawable by, Agent;

(m)             which is owed in any currency other than U.S. dollars;

(n)               which is owed by (i) the government (or any department, agency, public corporation, or instrumentality thereof) of any country other than the U.S. unless such Account is backed by a Letter of Credit acceptable to Agent which is in the possession of, and is directly drawable by, Agent, or (ii) the government of the U.S., or any department, agency, public corporation, or instrumentality thereof, unless the Federal Assignment of Claims Act of 1940, as amended (31 U.S.C. § 3727 et seq. and 41 U.S.C. § 15 et seq.), and any other steps necessary to perfect the lien of Agent in such Account have been complied with to Agent’s satisfaction;

(o)               which is owed by any Affiliate of any Borrower or any Guarantor or any employee, officer, director, agent or stockholder of any Borrower, any Guarantor or any of their Affiliates;

(p)               which, for any Account Debtor, exceeds a credit limit determined by Agent in its Permitted Discretion, to the extent of such excess;

(q)               which is owed by an Account Debtor or any Affiliate of such Account Debtor to which any Borrower or any Guarantor is indebted, but only to the extent of such indebtedness, or is subject to any security, deposit, progress payment, retainage or other similar advance made by or for the benefit of an Account Debtor, in each case to the extent thereof;

(r)                which is subject to any counterclaim, deduction, defense, setoff or dispute but only to the extent of any such counterclaim, deduction, defense, setoff or dispute;

(s)                which is evidenced by any promissory note, chattel paper, or instrument;

(t)                 which is owed by an Account Debtor (i) located in any jurisdiction which requires filing of a “Notice of Business Activities Report” or other similar report in order to permit such Borrower to seek judicial enforcement in such jurisdiction of payment of such Account, unless such Borrower has filed such report or qualified to do business in such jurisdiction or (ii) which is a Sanctioned Person;

(u)               with respect to which such Borrower has made any agreement with the Account Debtor for any reduction thereof, other than discounts and adjustments given in the ordinary course of business, or any Account which was partially paid and such Borrower created a new receivable for the unpaid portion of such Account;

(v)               which does not comply in all material respects with the requirements of all applicable laws and regulations, whether Federal, state or local, including without limitation the Federal Consumer Credit Protection Act, the Federal Truth in Lending Act and Regulation Z of the Federal Reserve Board;

(w)             which is for goods that have been sold under a purchase order or pursuant to the terms of a contract or other agreement or understanding (written or oral) that indicates or purports that any Person other than such Borrower has or has had an ownership interest in such goods, or which indicates any party other than such Borrower as payee or remittance party;

(x)               which was created on cash on delivery terms;

(y)               which is (i) a Credit Card Receivable or (ii) an Account generated by a consumer lease or rental agreement or arrangement (including a Rental Agreement); or

(z)               which is owing to Buddy Top Parent or any of its Subsidiaries.

In the event that an Account of a Borrower which was previously an Eligible Account ceases to be an Eligible Account hereunder, such Borrower or Administrative Borrower shall notify thereof on and at the time of submission to Agent of the next Borrowing Base Certificate. In determining the amount of an Eligible Account of a Borrower, the face amount of an Account may, in Agent’s Permitted Discretion, be reduced by, without duplication, to the extent not reflected in such face amount, (i) the amount of all accrued and actual discounts, claims, credits or credits pending, promotional program allowances, price adjustments, finance charges or other allowances (including any amount that such Borrower may be obligated to rebate to an Account Debtor pursuant to the terms of any agreement or understanding (written or oral)) and (ii) the aggregate amount of all cash received in respect of such Account but not yet applied by such Borrower to reduce the amount of such Account.

“Eligible Credit Card Receivables” shall mean, the gross amount of Credit Card Receivables of Borrowers (other than Badcock) that are subject to a valid, first priority and fully perfected security interest in favor of the Agent for itself and the Secured Parties, which conform to all applicable warranties contained herein, less, without duplication:

(a)               the sum of all Credit Card Receivables:

(i)                 for which Agent has not received a Credit Card Acknowledgment pursuant to Section 9.31 if the Credit Card Agreement exists on the Closing Date (or if the Credit Card Agreement is entered into after the Closing Date, no later than 90 days after the date of such Credit Card Agreement or such later date as is acceptable to Agent);

(ii)              which are unpaid more than five Business Days after the date of the sale of Inventory giving rise to such Credit Card Receivable;

(iii)            arising from any private label credit card program or other similar credit arrangement of a Loan Party or any of its Subsidiaries, except as otherwise approved by Agent in its Permitted Discretion;

(iv)             which are generated by a consumer lease or rental agreement or arrangement (including a Rental Agreement);

(v)               which are owing to Buddy Top Parent or any of its Subsidiaries; and

(b)               amounts owing to Credit Card Issuers or Credit Card Processors in connection with the Credit Card Agreements.

Without limiting the foregoing, to qualify as an Eligible Credit Card Receivable, a Credit Card Receivable shall indicate no Person other than a Borrower as payee or remittance party.

“Eligible Depository Bank” means:

(a)               Any Lender or any of its Affiliates;

(b)               Bank of America, N.A.; or

(c)               Any other Person who is a commercial bank or financial institution having total assets in excess of $1,000,000,000; organized under the laws of any country that is a member of the Basel Accord and the Organization of Economic Cooperation and Development, or a political subdivision of any such country, so long as such bank or financial institution is acting through a branch or agency located in the United States.

“Eligible Inventory” shall mean, as to each Borrower, Inventory of such Borrower consisting of finished goods held for resale in the ordinary course of the business of such Borrower that satisfy the criteria set forth below as reasonably determined by Agent. Eligible Inventory shall not include:

(a)               work-in-process;

(b)               raw materials;

(c)               spare parts for Equipment;

(d)               packaging and shipping materials;

(e)               supplies used or consumed in such Borrower’s business;

(f)                Inventory located (i) (A) at premises other than a premise which is owned or leased by any Borrower or (iiB) in any third party warehouse or in the possession of a bailee (other than a third party processor) unless Agent has received, subject to Section 9.31, a Collateral Access Agreement in respect of such premises on terms and conditions reasonably satisfactory to Agent (it being understood that (1) Inventory of the TVS Borrowers which is in-transit from any location of the TVS Borrowers permitted herein to another such location shall be considered Eligible Inventory solely with respect to the TVS Borrowing Base; provided that (x) it otherwise satisfies the criteria for Eligible Inventory set forth herein and is not in-transit more than ten consecutive days and (y) the aggregate amount of Eligible Inventory of the TVS Borrowers consisting of in-transit Inventory shall not exceed the amount equal to 10% of the TVS Borrowing Base at any time, (2) Inventory of the AFG Borrowers which is in-transit from any location of the AFG Borrowers permitted herein to another such location shall be considered Eligible Inventory solely with respect to the AFG Borrowing Base; provided that (x) it otherwise satisfies the criteria for Eligible Inventory set forth herein and is not in-transit more than ten consecutive days and (y) the aggregate amount of Eligible Inventory of the AFG Borrowers consisting of in-transit Inventory shall not exceed the amount equal to 10% of the AFG Borrowing Base at any time and (3) Inventory of the PSP Borrowers which is in-transit from any location of the PSP Borrowers permitted herein to another such location shall be considered Eligible Inventory solely with respect to the PSP Borrowing Base; provided that (x) it otherwise satisfies the criteria for Eligible Inventory set forth herein and is not in-transit more than ten consecutive days and (y) the aggregate amount of Eligible Inventory of the PSP Borrowers consisting of in-transit Inventory shall not exceed the amount equal to 10% of the PSP Borrowing Base at any time) or (ii) at a location owned or leased by a Dealer, other than Inventory for which the Borrowers have met the Dealer Eligibility Requirements;

(g)               Inventory subject to a security interest or lien in favor of any Person other than Agent except those permitted in this Agreement that are subject to an intercreditor agreement in form and substance satisfactory to Agent between the holder of such security interest or lien and Agent and those liens described in clause (j) below;

(h)               bill and hold goods;

(i)                 Inventory which is past its expiration date;

(j)                 Inventory that is not subject to the first priority, valid and perfected security interest of Agent except in the case of those non-consensual statutory liens described in Section 9.8(c)(i) hereofclause (i) of the definition of “Permitted Encumbrances”, liens permitted under Section 9.8(sff) and (gg) so long as such liens are subject to the Intercreditor Agreement, liens permitted under Section 9.8(b)(i) consisting of licenses to Dealers to use the Badcock name on a nonexclusive basis for purposes of Inventory sales, liens permitted under Section 9.8(b)(i) consisting of licenses of third party brand names to Badcock which do not otherwise disqualify such Inventory from being “Eligible Inventory” under clause (o) of the definition thereof, and landlord, warehouseman or similar liens (i) in respect of which Agent has established a Reserve (if and only to the extent establishment of a Reserve is permitted by the terms hereof), (ii) for which no Reserve is provided by the terms hereof, or (iii) in respect of which premises Agent has received a Collateral Access Agreement pursuant to which the landlord, warehouseman or bailee, as applicable, has either waived or subordinated its lien on terms and conditions reasonably satisfactory to Agent;

(k)               returned Inventory which is not held for sale in the ordinary course of business;

(l)                 damaged and/or defective Inventory;

(m)             Inventory (i) purchased or sold on consignment or (ii) solely with respect to the AFG Borrowing Base, that is consigned by an AFGa Borrower to a Person which is not a Borrower or a Subsidiary of a Borrower, other than Inventory that is consigned to AFG Franchisees for which the AFG Borrowers have met the AFG Franchisee Eligibility Requirements;

(n)               Inventory located outside the United States of America, unless approved by Agent in writing;

(o)               Inventory that is subject to any licensing arrangement or any other Intellectual Property or other proprietary rights of any Person, the effect of which would be to limit the ability of the Agent, or any Person selling the Inventory on behalf of the Agent, to sell such Inventory in enforcement of the Agent’s Liens without further consent or payment to the licensor or such other Person (unless such consent has then been obtained);

(p)               Inventory which has been acquired from a Sanctioned Person;

(q)               Inventory that is subject to any consumer lease or rental agreement or arrangement (including any Rental Agreement); and

(r)                Inventory of Buddy Top Parent or any of its Subsidiaries.

The criteria for Eligible Inventory set forth above may only be changed and any new criteria for Eligible Inventory may only be established by Agent in its good faith based on either: (i) an event, condition or other circumstance arising after the date hereof, or (ii) an event, condition or other circumstance existing on the date hereof to the extent Agent has no written notice thereof from a Borrower prior to the date hereof in either case under clause (i) or (ii) which materially and adversely affects or could reasonably be expected to materially and adversely affect the Inventory, its value or the amount that would be received by Agent from the sale or other disposition or realization upon such Inventory as determined by Agent in its good faith and commercially reasonable determination. Any Inventory that is not Eligible Inventory shall nevertheless be part of the Collateral.

“Eligible Transferee” shall mean (a) any Lender; (b) the parent company of any Lender and/or any Affiliate of such Lender which is at least 50% owned by such Lender or its parent company; (c) any Person that is engaged in the business of making, purchasing, holding or otherwise investing in bank loans and similar extensions of credit in the ordinary course of its business and is administered or managed by a Lender or with respect to any Lender that is a fund which invests in bank loans and similar extensions of credit, any other fund that invests in bank loans and similar extensions of credit and is managed by the same investment advisor as such Lender or by an Affiliate of such investment advisor, in each case is approved by Agent, the Swingline Lender, the Issuing Bank and, unless an Event of Default under Section 10.1(a), Section 10.1(g) or Section 10.1(h) has occurred and is continuing at the time any assignment is effected hereunder, Administrative Borrower (such approval not to be unreasonably withheld, conditioned or delayed by Administrative Borrower, provided, that, (i) Administrative Borrower’s failure to consent to an assignment to a “distressed debt” purchaser, a “vulture” fund or other similar assignee or buyer shall not be deemed unreasonable and (ii) no such consent shall be required in connection with any assignment to another Lender or to an Affiliate of any Lender); and (d) any other commercial bank, financial institution or “accredited investor” (as defined in Regulation D under the Securities Act of 1933) approved by Agent, the Swingline Lender, the Issuing Bank (each such approval not to be unreasonably withheld, conditioned or delayed) and, unless an Event of Default under Section 10.1(a), Section 10.1(g) or Section 10.1(h) has occurred and is continuing at the time any assignment is effected hereunder, Administrative Borrower, provided that (i) neither any Borrower nor any Guarantor or any Affiliate of any Borrower or Guarantor shall qualify as an Eligible Transferee; (ii) no Person to whom any Indebtedness which is in any way subordinated in right of payment to any other Indebtedness of any Borrower or Guarantor shall qualify as an Eligible Transferee, except, in each case, as Agent may otherwise specifically agree; and (iii) a competitor of Borrowers shall not be deemed an “Eligible Transferee” under any circumstances except after the occurrence of either (A) an Event of Default for non-payment of any principal amount of Obligations owing hereunder or (B) the occurrence of an Event of Default with respect to any Borrower or Guarantor set forth in Section 10.1(g) or Section 10.1(h) hereof.

“Environmental Events” shall have the meaning set forth in Section 9.3(b) hereof.

“Environmental Laws” shall mean all foreign, Federal, State and local laws (including common law), rules, codes, licenses, permits (including any conditions imposed therein), authorizations, legally binding judicial or administrative decisions, injunctions or agreements between Borrower and any Governmental Authority, (a) relating to pollution and the protection, preservation or restoration of the environment (including air, water vapor, surface water, ground water, drinking water, drinking water supply, surface land, subsurface land, plant and animal life or any other natural resource), (b) relating to the exposure of humans to, or the use, storage, recycling, treatment, generation, manufacture, processing, distribution, transportation, handling, labeling, production, release or disposal, or threatened release, of hazardous, toxic or dangerous substances, materials, and wastes, or (c) imposing requirements with regard to recordkeeping, notification, disclosure and reporting respecting hazardous, toxic or dangerous substances, materials, and wastes. The term “Environmental Laws” includes (i) the Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Federal Superfund Amendments and Reauthorization Act, the Federal Water Pollution Control Act of 1972, the Federal Clean Water Act, the Federal Clean Air Act, the Federal Resource Conservation and Recovery Act of 1976 (including the Hazardous and Solid Waste Amendments thereto), the Federal Solid Waste Disposal and the Federal Toxic Substances Control Act, the Federal Insecticide, Fungicide and Rodenticide Act, and the Federal Safe Drinking Water Act of 1974, (ii) applicable state counterparts to such laws and (iii) any common law or equitable doctrine that imposes liability or obligations for injuries or damages due to, or threatened as a result of, the presence of or exposure to any hazardous, toxic or dangerous substances, materials, and wastes.

“Environmental Liability” means any liability, obligation, loss, claim, action, order or cost, contingent or otherwise (including any liability for damages, costs of medical monitoring, costs of environmental remediation or restoration, administrative oversight costs, consultants’ fees, fines, penalties and indemnities) directly or indirectly resulting from or based upon (a) any actual or alleged violation of any Environmental Law or permit, license or approval issued thereunder, (b) the generation, use, handling, transportation, storage, or treatment of any Hazardous Materials, (c) 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.

“Equipment” shall have the meaning set forth in Article 9 of the UCC and includes, without limitation, as to each Borrower and Guarantor, all of such Borrower’s and Guarantor’s now owned and hereafter acquired equipment, wherever located, including machinery, data processing and computer equipment (whether owned or licensed and including embedded software), vehicles, tools, furniture, fixtures, all attachments, accessions and property now or hereafter affixed thereto or used in connection therewith, and substitutions and replacements thereof, wherever located.

“ERISA” shall mean the United States Employee Retirement Income Security Act of 1974, as amended, together with all rules, regulations and interpretations thereunder or related thereto.

“ERISA Affiliate” shall mean any Person required to be aggregated with any Borrower, any Guarantor or any of its or their respective Subsidiaries under Sections 414(b), 414(c), 414(m) or 414(o) of the Code.

“ERISA Event” shall mean (a) any “reportable event”, as defined in Section 4043(c) of ERISA or the regulations issued thereunder, with respect to a Plan, except for any such event with respect to which notice has been waived pursuant to applicable regulations; (b) the adoption of any amendment to a Plan that would require the provision of security pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA; (c) the existence with respect to any Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (d) the filing pursuant to Section 412 of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (e) the occurrence of a non-exempt “prohibited transaction” with respect to which Borrower, or any of their respective Subsidiaries is a “disqualified Person” (within the meaning of Section 4975 of the Code); (f) a complete or partial withdrawal by Borrower, or any ERISA Affiliate from a Multiemployer Plan or a cessation of operations which is treated as such a withdrawal or notification that a Multiemployer Plan is in reorganization; (g) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the Pension Benefit Guaranty Corporation to terminate a Plan; (h) an event or condition which might reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan; (i) the imposition of any liability under Title IV of ERISA, other than the Pension Benefit Guaranty Corporation premiums due but not delinquent under Section 4007 of ERISA, upon Borrower, or any ERISA Affiliate in an amount that could reasonably be expected to have a Material Adverse Effect.

“Event of Default” shall mean the occurrence or existence of any event or condition described in Section 10.1 hereof.

“Event of Loss” means, with respect to any property, any of the following: (a) any loss, destruction or damage of such property; or (b) any actual condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, of such property, or confiscation of such property or the requisition of the use of such property; which for the avoidance of doubt, shall not include store closings or liquidations.

“Excess Availability” shall mean, the amount, as determined by Agent, calculated at any date, equal to: (a) the Borrowing Cap minus (b) the Aggregate Revolving Exposure.

“Exchange Act” shall mean the Securities Exchange Act of 1934, together with all rules, regulations and interpretations thereunder or related thereto.

“Excluded Accounts” means (a) Zero Balance Accounts (provided that, upon any such account ceasing to be a Zero Balance Account, such account shall cease to be an Excluded Account), (b) Store Accounts, (c) accounts into which government receivables and government reimbursement payments are deposited, (d) payroll accounts (including accounts used for the disbursement of payroll, payroll taxes and other employee wage and benefit payments, including 401(k) and other retirement plans, rabbi trusts for deferred compensation and health care benefits), (e) withholding and trust accounts, escrow and other fiduciary accounts, (f) Manual Sweeping Accounts, (g) Deposit Accounts, Securities Accounts and commodity accounts that (x) individually have a daily balance of not more than $100,000 and (y) together with all other Deposit Accounts, Securities Accounts and commodity accounts constituting Excluded Accounts under this clause (g), have a daily balance of not more than $2,500,000 in the aggregate for all such Deposit Accounts, Securities Accounts or commodity accounts and (h) consisting solely of cash or Cash Equivalents securing Indebtedness permitted by Section 9.9(ff) to the extent such security constitutes liens permitted by Section 9.8(ii).

“Excluded Assets” means, (a) any fee-owned real property that is not Material Real Property, all leasehold (including ground lease) interests in real property and any real property that contains improvements and is located in an area determined (as of the First Amendment Effective Date with respect to real property owned on the First Amendment Effective Date and as of the date of acquisition of any real property acquired after the First Amendment Effective Date) by the Federal Emergency Management Agency (or any successor agency) to be a special flood hazard area, (b) motor vehicles, railcars, trailers, aircraft, aircraft engines, construction and earth moving equipment and other assets subject to certificates of title or ownership (except to the extent perfection of a security interest therein can be accomplished by filing of a UCC-1 financing statement or equivalent financing statement with a central registry), (c) letter of credit rights (except to the extent constituting supporting obligations (as defined under the UCC) in which a security interest can be perfected with the filing of a UCC-1 financing statement or equivalent financing statement with a central registry), (d) commercial tort claims with an individual value, as determined by the Administrative Borrower in good faith, of less than $7,500,000 and commercial tort claims for which no complaint or counterclaim has been filed in a court of competent jurisdiction, (e) Capital Stock in any Person (other than any Wholly Owned Subsidiaries) to the extent the pledge thereof to Agent is not permitted by the terms of such Person’s organizational, incorporation or joint venture documents, (f) [reserved], (g) Capital Stock of any Immaterial Subsidiary (except to the extent perfection of a security interest therein can be accomplished by filing of a UCC-1 financing statement or equivalent financing statement with a central registry), not-for profit Subsidiaries, captive insurance companies or other special purpose subsidiaries (including real estate special purpose entities), (h) [reserved], (i) any lease, license or other agreement, government approval or franchise with any Person if, to the extent and for so long as, the grant of a Lien thereon to secure the Obligations constitutes a breach of or a default under, or creates a right of termination in favor of any party (other than any Loan Party) to, such lease, license or other agreement, government approval or franchise (but only to the extent any of the foregoing is not rendered ineffective by, or is otherwise unenforceable under, the UCC or any applicable Requirements of Law), other than proceeds and receivables thereof, the assignment of which is expressly deemed effective under the UCC,

(j) any asset subject to a Lien of the type permitted by Section 9.8(e) (whether or not incurred pursuant to such Section) or a Lien permitted by Section 9.9(m), in each case if, to the extent and for so long as the grant of a Lien thereon to secure the Obligations constitutes a breach of or a default under, or creates a right of termination in favor of any party (other than any Loan Party) to, any agreement pursuant to which such Lien has been created (but only to the extent any of the foregoing is not rendered ineffective by, or is otherwise unenforceable under, the UCC Code or any applicable Requirements of Law), (k) any intent-to-use trademark applications filed in the United States Patent and Trademark Office, pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. Section 1051, prior to the accepted filing of a “Statement of Use” and issuance of a “Certificate of Registration” pursuant to Section 1(d) of the Lanham Act or an accepted filing of an “Amendment to Allege Use” whereby such intent-to-use trademark application is converted to a “use in commerce” application pursuant to Section 1(c) of the Lanham Act, (l) any asset if, to the extent and for so long as the grant of a Lien thereon to secure the Obligations is prohibited by any applicable Requirements of Law, rule or regulation, or agreements with any Governmental Authority (other than to the extent that any such prohibition would be rendered ineffective pursuant to the UCC or any other applicable Requirements of Law) or which would require consent, approval, license or authorization from any Governmental Authority or regulatory authority, unless such consent, approval, license or authorization has been received in consultation with Agent, (m) margin stock (within the meaning of Regulation U of the Board of Governors, as in effect from time to time) and, to the extent prohibited by, or creating an enforceable right of termination in favor of any other party thereto (other than the Administrative Borrower or any Material Subsidiary of the Administrative Borrower), under the terms of any applicable organizational or incorporation documents, joint venture agreement or shareholders’ agreement, equity interests in any person other than Material Subsidiaries that are Wholly Owned Subsidiaries after giving effect to the anti-assignment provisions of the UCC or any other applicable Requirements of Law, (n) Excluded Accounts, (o) assets to the extent a security interest in such assets would result in material adverse tax consequences to any Borrower (or any direct or indirect parent or beneficial owner thereof) or one of its subsidiaries (as determined in good faith by the Administrative Borrower), (p) assets sold to any Person who is not a Loan Party in compliance with the Financing Agreements, (q) assets owned by a Subsidiary Loan Party after the release of the guarantee of such Subsidiary Loan Party pursuant to the Financing Agreements, and (r) any assets with respect to which, in the reasonable judgment of Agent and the Administrative Borrower (as agreed to in writing), the cost or other consequences (including adverse tax consequences as determined by the Administrative Borrower and Agent in good faith) of pledging such assets shall be excessive in view of the benefits to be obtained by the Lenders therefrom.

“Excluded Hedge Obligation” shall mean, with respect to any Borrower or Guarantor, any Hedge Obligation if, and to the extent that, all or a portion of the guarantee of such Borrower or Guarantor of, or the grant by such Borrower or Guarantor of a security interest to secure, such Hedge 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) (a) by virtue of such Borrower’s or Guarantor’s failure for any reason to constitute an ECP at the time the guarantee of such Borrower or Guarantor or the grant of such security interest becomes effective with respect to such Hedge Obligation or (b) in the case of a Hedge Obligation subject to a clearing requirement pursuant to Section 2(h) of the Commodity Exchange Act (or any successor provision thereto), because such Borrower or Guarantor is a “financial entity,” as defined in Section 2(h)(7)(C)(i) of the Commodity Exchange Act (or any successor provision thereto), at the time the guarantee of such Borrower or Guarantor becomes effective with respect to such related Hedge Obligation. If a Hedge Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Hedge Obligation that is attributable to swaps for which such guarantee or security interest is or becomes illegal.

“Excluded Subsidiary” means (a) any Subsidiary that is not a Wholly Owned Subsidiary of the Administrative Borrower, (b) any Subsidiary that is prohibited by applicable law, rule or regulation or contractual obligation (so long as any such contractual prohibition is not incurred in contemplation of the acquisition of such Subsidiary, and only for so long as such contractual prohibition shall be continuing) existing on the Closing Date or, if later, the date such Subsidiary first becomes a Subsidiary, from guaranteeing the Obligations or which would require any governmental or regulatory consent, approval, license or authorization to do so, unless such consent, approval, license or authorization has been obtained, (c) any Subsidiary acquired pursuant to a Permitted Acquisition or similar Investment financed with secured Indebtedness permitted to be incurred pursuant to Section 9.9(h) or Section 9.9(z) (and not incurred in contemplation of such Permitted Acquisition or similar Investment) and any subsidiary thereof that guarantees such Indebtedness, in each case to the extent, and so long as, such secured Indebtedness prohibits such Subsidiary from becoming a Loan Party, providing a guarantee of the Obligations or granting Liens on its assets as security for the Obligations, (d) any direct or indirect U.S. subsidiary of a Subsidiary that is a “controlled foreign corporation” within the meaning of Section 957 of the Code, and any direct or indirect U.S. Subsidiary that has no material assets other than the equity of (or equity of and obligations owed to or treated as owed by) one or more direct or indirect non-U.S. subsidiaries that are “controlled foreign corporations” within the meaning of Section 957 of the Code, (e) any Immaterial Subsidiary, (f) any other Subsidiary with respect to which, in the reasonable judgment of Agent and the Administrative Borrower (as agreed in writing), the cost or other consequences (including any adverse tax consequences as determined in good faith by the Administrative Borrower and Agent) of providing the guaranty shall be excessive in view of the benefits to be obtained by the Lenders therefrom, (g) any Subsidiary if the provision of a guaranty by such Subsidiary would result in material adverse tax consequences to the Administrative Borrower (or any direct or indirect parent or beneficial owner thereof) or one of its subsidiaries (as determined in good faith by the Administrative Borrower), (h) any other Subsidiary excused from becoming a Loan Party pursuant to the last paragraph of Section 9.23, (i) any Subsidiary that is (or, if it were a Loan Party, would be) an “investment company” under the Investment Company Act of 1940, as amended, (j) any not-for profit Subsidiaries, captive insurance companies or other special purpose subsidiaries, and (k) any Foreign Subsidiary; provided that any Immaterial Subsidiary that is a signatory to the Guaranty Agreement shall be deemed not to be an Excluded Subsidiary for purposes of this Agreement and the other Financing Agreements unless the Administrative Borrower has otherwise notified Agent; provided further that the Administrative Borrower may at any time and in its sole discretion, with the consent of Agent (such consent not to be unreasonably withheld, conditioned or delayed), cause any Subsidiary to not be an Excluded Subsidiary for purposes of this Agreement and the other Financing Agreements; provided, further, that notwithstanding the foregoing, no Subsidiary that Guarantees the obligations under the First Lien Credit Agreement, or the Second Lien Credit Agreement, the Badcock First Lien Credit Agreement and the Badcock Second Lien Credit Agreement shall be an Excluded Subsidiary hereunder.

“Excluded Taxes” means 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 located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes; (b) in the case of a Lender, U.S. Federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan, Letter of Credit or Revolving Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan, Letter of Credit or Revolving Commitment (other than pursuant to an assignment request by the Borrowers under Section 3.6(b)) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 3.5, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender acquired the applicable interest in a Loan, Letter of Credit or Revolving Commitment or to such Lender immediately before it changed its lending office; (c) Taxes attributable to such Lender’s failure to comply with Section 3.5(f); and (d) any withholding Taxes imposed under FATCA.

“Existing Credit Agreement” shall have the meaning assigned to such term in the recitals to this Agreement.

“Existing Debt Agreements” means (a) that certain ABL Credit Agreement, dated as of September 23, 2020, by and among the Loan Parties party thereto as borrowers or guarantors, the lenders from time to time party thereto and Citizens Bank, N.A., as administrative agent and collateral agent, as amended, restated, supplemented or otherwise modified from time to time prior to the date hereof, (b) that certain Credit Agreement, dated as of December 12, 2018, by and among the Loan Parties party thereto as borrowers or guarantors, the lenders from time to time party thereto and Golub Capital Markets LLC, as administrative agent and collateral agent, as amended, restated, supplemented or otherwise modified from time to time prior to the date hereof, (c) that certain Note Purchase Agreement, dated as of December 12, 2018, by and among the Loan Parties party thereto as borrowers or guarantors, Norwest Mezzanine Partners IV-Debt, LP and Sentinel Junior Capital I, L.P., as the initial purchasers, and the other noteholders party thereto from time to time, as amended, restated, supplemented or otherwise modified from time to time prior to the date hereof, and (d) that certain Credit Agreement, dated as of February 14, 2020, by and among the Loan Parties party thereto as borrowers or guarantors, the lenders from time to time party thereto, GACP Finance Co., LLC, as administrative agent, and Kayne Solutions Fund, L.P., as collateral agent, as amended, restated, supplemented or otherwise modified from time to time prior to the date hereof.

“Existing Letter of Credit” means each letter of credit issued prior to the Closing Date by a Person that shall be an Issuing Bank and listed on Schedule 2.3.

“Existing Term Loan Credit Agreement” means that certain Credit Agreement, dated as of February 14, 2020, by and among the Loan Parties party thereto as borrowers or guarantors, the lenders from time to time party thereto, GACP Finance Co., LLC, as administrative agent, and Kayne Solutions Fund, L.P., as collateral agent, as amended, restated, supplemented or otherwise modified from time to time prior to the date hereof.

“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 agreement entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing such Sections of the Code.

“Federal Funds Effective Rate” means, for any day, the rate calculated by the NYFRB based on such day’s federal funds transactions by depositary institutions (as determined in such manner as shall be set forth on the NYFRB’s Website from time to time) and published on the next succeeding Business Day by the NYFRB as the effective federal funds rate; provided that, if the Federal Funds Effective Rate as so determined would be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement.

“Federal Reserve Board” means the Board of Governors of the Federal Reserve System of the United States of America.

“Fee Letter” shall mean the amended and restated arranger fee letter, dated as of January 29, 2021, by and among FRG, PSP Newco, Agent, Citizens Bank, N.A. and Credit Suisse Loan Funding LLC, as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.

“Financing Agreements” shall mean, collectively, this Agreement, the Intercreditor Agreement, the Collateral Documents and all notes, guarantees, security agreements, intercreditor agreements, the Agent Fee Letter, the Fee Letter and all other agreements, documents and instruments now or at any time hereafter executed and/or delivered by any Borrower or Guarantor in connection with this Agreement.

“FIRREA” means the Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended.

“First Amendment” means that certain First Amendment to Third Amended and Restated Loan and Security Agreement, dated as of the First Amendment Effective Date, among the Borrowers, the other Loan Parties party thereto, the Lenders party thereto and the Agent.

“First Amendment Effective Date” means November 22, 2021.

“First Lien Agent” means JPMorgan Chase Bank, N.A., in its capacity asthe “Administrative Agent and Collateral Agent” (or analogous terms) under the First Lien Credit Agreement, together with its successorincluding any successors and permitted assigns thereof.

“First Lien Credit Agreement” means (i) that certain Credit Agreement, dated as of the Closing Date, among the Administrative Borrower and PSP Newco, as borrowers, JPMorgan Chase Bank, N.A., a national banking association, as administrative agent and collateral agent, and the lenders from time to time party thereto, as the same may be amended, restated, supplemented or otherwise modified, superseded or replaced from time to time in accordance with the Intercreditor Agreement and/or (ii) any credit agreement, loan agreement, or other financing that replaces or refinances the Credit Agreement described in the preceding clause (i) so long as the security interests securing such credit agreement, loan agreement or other financing are subject to the Intercreditor Agreement, as the same may be amended, restated, supplemented or otherwise modified, superseded or replaced from time to time in accordance with the Intercreditor Agreement.

“First Lien Lender” means a “Lender” under and as defined in the First Lien Credit Agreement.

“First Lien Obligations” means all Indebtedness of the BorrowerBorrowers and the Guarantors incurred or owing under the First Lien Term Loan Documents, including all obligations in respect of the payment of principal, interest, fees, prepayment premiums and indemnification obligations, and any refinancing or replacement of such Indebtedness permitted under this Agreement and under the Intercreditor Agreement; provided that such Indebtedness is subject to the Intercreditor Agreement.

“First Lien Term Loan Documents” means the “Loan Documents” or analogous term as defined in the First Lien Credit Agreement or the agreements and other documents governing other Indebtedness incurred under Section 9.9(s).

“Fixed Charge Coverage Ratio” means, for any period of four fiscal quarters of the Administrative Borrower, the ratio of (a) EBITDA for such period minus (i) all Unfinanced Capital Expenditures for such period and (ii) cash taxes paid (including in the form of tax distributions) for such period (net of cash refunds received during such period) to (b) Fixed Charges.

“Fixed Charges” shall mean, for any period, the sum of (i) Consolidated Cash Interest Charges paid or payable currently for such period plus (ii) scheduled amortization of Funded Debt (including Capital Leases) paid or payable currently in cash for such period plus (iii) dividends or distributions made in reliance on Section 9.11(d) which are paid in cash (net of tax distributions) for such period.

“Flood Insurance Laws” means, collectively, (i) the National Flood Insurance Act of 1968 as now or hereafter in effect or any successor statute thereto, (ii) the Flood Disaster Protection Act of 1973 as now or hereafter in effect or any successor statue thereto, (iii) the National Flood Insurance Reform Act of 1994 as now or hereafter in effect or any successor statute thereto, (iv) the Flood Insurance Reform Act of 2004 as now or hereafter in effect or any successor statute thereto and (v) the Biggert-Waters Flood Insurance Reform Act of 2012 as now or hereafter in effect or any successor statute thereto.

“Floor” means the benchmark rate floor, if any, provided in this Agreement (as of the execution of the Second Amendment, the modification, amendment or renewal of this Agreement or otherwise) with respect to the Adjusted Term SOFR Rate or the Adjusted Daily Simple SOFR, as applicable. For the avoidance of doubt, as of the Second Amendment Effective Date, the Floor for each of the Adjusted Term SOFR Rate and the Adjusted Daily Simple SOFR shall be 0%.

“Foreign Lender” shall mean any Lender that is not a U.S. Person.

“Foreign Subsidiary” shall mean a Subsidiary of FRG that is organized or incorporated under the laws of any jurisdiction outside of the United States of America; sometimes being referred to herein collectively as “Foreign Subsidiaries”.

“Franchise Agreement” means a franchising agreement between any Loan Party or any Subsidiary thereofBorrower, as franchisor, and any other Person, as franchisee, pertaining to the establishment and operation of a business with operations comparable to the operations of the AFG Intermediate and its Subsidiaries, including, without limitation, any AFG Franchise Agreement.Borrowers and their Subsidiaries, Badcock, the PSP Borrowers and their Subsidiaries or the TVS Borrowers and their Subsidiaries, as applicable.

“Franchise Disclosure Documents” means any uniform franchise offering circulars and franchise disclosure documents used by (and, to the extent required, filed by) any AFG Borrower to comply with any applicable law, rule, regulation or order of any Governmental Authority.

“Franchise Fees” shall mean each Borrower’s right to payment under any franchising agreement (including any Franchise Agreement) between any Borrower, as franchisor, and any other Person, as franchisee, pertaining to the establishment and operation of a business with operations comparable to the operations of such Borrower and its Subsidiaries, including, without limitation, all fees, royalties, revenues, charges, penalties and/or interest; provided that Franchise Fees shall not include any Account or other rights to payment arising from the sale of Inventory by a Loan Party to a franchisee.

“Franchise Laws” means all applicable laws, rules, regulations, orders, binding guidance or other requirements of the United States Federal Trade Commission or any other Governmental Authority relating to the relationship between franchisor and franchisees or to the offer, sale, termination, non-renewal or transfer of a franchise.

“Franchisee Eligibility Requirements” means, collectively, each of the following:

(a)               the applicable Borrower has executed an agreement with the applicable Franchisee to operate a franchise under one of the brands as listed on Schedule 1C hereto, or any subsequent rebranding of such franchise, at a location owned or leased and operated by such Franchisee, substantially on the standard form agreements containing terms and conditions established by the Borrowers from time to time, which shall include (A) an acknowledgement from such Franchisee that the Borrowers, or Agent acting on behalf of the Borrowers, are authorized to transfer proceeds of the Inventory consigned by such Borrower to such Franchisee from the bank account maintained by such Franchisee to an account in the name of a Borrower and (B) an acknowledgement by the Franchisee that the applicable Borrower has granted a Lien to Agent on the Inventory consigned by such Borrower to the Franchisee and an agreement by the Franchisee to reasonably cooperate with Agent in the event of the exercise by Agent of its rights and remedies with respect to such Lien;

(b)              the applicable Borrower has provided Agent with evidence that such Borrower has filed appropriate UCC financing statements against the applicable Franchisee evidencing the consignment arrangement between such Borrower and the applicable Franchisee with respect to the Inventory consigned by such Borrower to the applicable Franchisee, and has taken all other action required under applicable Requirements of Law to obtain a valid, first priority perfected security interest in such Inventory (including, without limitation, providing notification to other secured parties of the applicable Franchisee as required by the UCC);

(c)               if requested by Agent, the applicable Borrower has provided the Agent with an assignment of the UCC financing statements set forth in clause (b) above;

(d)              the applicable Borrower has complied in all material respects with all representations, warranties and covenants set forth herein and in the other Financing Agreements relating to federal and state franchise and other regulatory Requirements of Law in connection with the operation of a franchise under one of the brands as listed on Schedule 1C (or any subsequent rebranding of such franchises) by the applicable Franchisee; and

(e)               the agreements between the applicable Borrower and the applicable Franchisee provide that all amounts owed by such Franchisee to such Borrower shall be swept at least daily into an account of a Borrower which is subject to a Deposit Account Control Agreement.

For the purposes of paragraph (a) above, “reasonably cooperate with Agent” means that the Franchisee will, at Agent’s expense and with reasonable prior notice from Agent, (i) give Agent and its representatives access during normal business hours to all Inventory consigned by the applicable Borrower to the Franchisee, (ii) permit Agent and its representatives to take possession and control of the Inventory consigned by the applicable Borrower to the Franchisee, and to remove the Inventory from the premises of the Franchisee, (iii) to the extent not prohibited by applicable location occupancy agreements (including leases), conduct “going out of business sales” and engage in similar activities with respect to the Inventory consigned by the applicable Borrower to the Franchisee, and (iv) take all other commercially reasonable actions with respect to the Inventory consigned by the applicable Borrower to the Franchisee that, upon Agent’s request, may be reasonably necessary to permit Agent to exercise all of its rights and remedies with respect to the Lien on the Inventory consigned by such Borrower to the Franchisee.

“Franchisee Loan Program Agreement” means that certain Franchisee Loan Program Agreement, dated August 18, 2020, between JTH Tax, LLC and MetaBank, N.A., a copy of which has been provided to Agent, as in effect on the date hereof.

“Franchisee Receivable” shall mean an Account or credit card receivable of a Loan Party owed by an Account Debtor that is a franchisee arising from the sale of Inventory by a Loan Party to such Account Debtor (including any Account or credit card receivable to the extent arising from the sale of Inventory under a Franchise Agreement other than any such Account or credit card receivable (or portion thereof) that consists of fees, royalties, penalties and interest payable under any Franchise Agreement).

“Franchisees” means, as of the Third Amendment Effective Date, the individuals and entities listed in Schedule 1B as “franchisees”, and thereafter, such entities and any additional individual or entity that meets the Franchisee Eligibility Requirements.

“Frequent Buyer Program” shall mean the Borrowers’ “Healthy Awards” customer loyalty program, which as in effect on the Closing Date is described at https://www.vitaminshoppe.com/lp/Newhealthyaward.

“FRG” means Franchise Group, Inc., a Delaware corporation.

“Funded Debt” means all Indebtedness of the Administrative Borrower and its Subsidiaries for borrowed money that matures more than one year from the date of its creation or matures within one year from such date that is renewable or extendable, at the option of such Person, to a date more than one year from such date or arises under a revolving credit or similar agreement that obligates the lender or lenders to extend credit during a period of more than one year from such date, including Indebtedness in respect of the Loans.

“GAAP” shall mean generally accepted accounting principles in the United States of America as in effect from time to time as set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and the statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States (including any principles required by the Securities and Exchange Commission), that are applicable to the circumstances as of the date of determination, consistently applied. If there occurs after the date of this Agreement any change in GAAP that affects the calculation of any requirements, terms or covenants set forth in this Agreement or any other Financing Agreement (whether contained in Section 9.24 or otherwise), Agent and Borrowers shall negotiate in good faith to amend the provisions of this Agreement and the other Financing Agreements that relate to the calculation of such requirements, terms and covenants with the intent of having the respective positions of the Lenders and Borrowers after such change in GAAP conform as nearly as possible to their respective positions as of the date of this Agreement and, until any such amendments have been agreed upon, the implicated requirements and covenants shall be calculated as if no such change in GAAP has occurred; provided, that, for the avoidance of doubt, the parties agree that all financial statements required to be delivered hereunder shall and will be delivered giving effect to any such change in GAAP.

“General Intangibles” shall have the meaning set forth in Article 9 of the UCC.

“Goods” shall have the meaning set forth in Article 9 of the UCC.

“Governmental Authority” shall mean any nation or government, any state, province, or other political subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, and any entity exercising executive, legislative, judicial, regulatory or administrative functions of government.

“Guarantors” shall mean, collectively and together with their respective successors and assigns), each party to the Guaranty on the Closing Date and any Subsidiary of FRG that at any time after the date hereof becomes party to a Guaranty in favor of Agent for the benefit of the Secured Parties or otherwise liable on or with respect to the Obligations (other than Borrowers) (each a “Subsidiary Guarantor”); each sometimes being referred to herein individually as a “Guarantor”; provided that, if at any time after the date hereof, a Guarantor which is directly or indirectly wholly owned by FRG shall own any assets that would constitute Eligible Inventory if owned by a Borrower, upon Administrative Borrower’s request, such Guarantor shall cease to be a Guarantor hereunder and shall be deemed a Borrower effective on the date of the confirmation by Agent to Administrative Borrower that (i) Agent has received such request and that Agent has received an appraisal with respect to such Inventory and conducted a field examination with respect thereto, the results of which are satisfactory to Agent in good faith, or alternatively, at Agent’s option, Agent shall have received such information with respect thereto as Agent may in its good faith require and (ii) Agent and each Lender have received all information and documentation reasonably requested by the Agent and the Lenders for purposes of compliance with applicable “know your customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act and the Beneficial Ownership Regulation with respect to such Guarantor; provided that, notwithstanding anything to the contrary herein or in any Financing Agreement, prior to the Badcock Joinder Date, Badcock shall not be a Guarantor for any purpose in any Financing Agreement.

“Guaranty” shall mean (a) that certain Second Amended and Restated Guaranty Agreement dated as of the Closing Date, by each of Loan Parties from time to time party thereto in favor of Agent, Lenders and the other Secured Parties, and (b) any other guaranty agreement executed by a Subsidiary of FRG that at any time after the date hereof becomes a Guarantor under this Agreement in favor of Agent, Lenders and the other Secured Parties, in each case, as the same may be amended, restated or otherwise modified from time to time.

“Hazardous Materials” shall mean any hazardous, toxic or dangerous substances, materials and wastes, including petroleum hydrocarbons, flammable explosives, asbestos, urea formaldehyde insulation, radioactive materials, polychlorinated biphenyls, pesticides, herbicides and any other kind and/or type of pollutants or contaminants, sewage, sludge, industrial slag, solvents and/or any other substances, materials or wastes that are or become regulated under any Environmental Law (including any that are or become classified as hazardous or toxic under any Environmental Law).

“Hedge Agreement” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), 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; sometimes being collectively referred to herein as “Hedge Agreements”.

“Hedge Obligations” of any Borrower or Guarantor means any and all obligations of such Borrower or Guarantor, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (a) any and all Hedge Agreements, and (b) any and all cancellations, buy backs, reversals, terminations or assignments of any Hedge Agreement transaction, in each case, solely under Hedge Agreements entered into with a Bank Product Provider and which are deemed to be Obligations under clause (b) (other than clause (b)(ii)) of the definition of Obligations.

“Immaterial Subsidiary” means any Subsidiary other than a Material Subsidiary.

“Immediate Family Member” means with respect to any individual, such individual’s child, stepchild, grandchild or one or more remote descendent, parent, stepparent, grandparents, spouse, sibling, mother in law, father in law, son in law and/or daughter in law (including any adoptive relationship), any trust, partnership, or other bona fide estate planning vehicle, the only beneficiaries of which are any of the foregoing individuals, such individual’s estate (or an executor or administrator working on its behalf), heirs or legatees or ay private foundation or fund that is controlled by any of the foregoing individuals or any donor advised fund of which any such individual is the donor.

“Increased Amount” of any Indebtedness shall mean any increase in the amount of such Indebtedness in connection with any accrual of interest, the accretion of accreted value, the amortization of original issue discount, the payment of interest in the form of additional Indebtedness or in the form of Qualified Equity Interests of a Borrower or any of its direct or indirect parent entities, the accretion of original issue discount or liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies.

“Increased Reporting Period” shall mean any period commencing on the first date on which Excess Availability is less than the greater of (a) 20% of the Borrowing Cap or (b) $30,000,00050,000,000, in each case for three consecutive days, and continuing until the date that both (x) Excess Availability exceeds the greater of (i) 20% of the Borrowing Cap or (ii) $30,000,00050,000,000 for 60 consecutive days and (y) no Default or Event of Default then exists and is continuing.

“Indebtedness” of any Person means, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments to the extent the same would appear as a liability on a balance sheet of such Person prepared in accordance with GAAP, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (d) all obligations of such Person in respect of the deferred purchase price of property or services (excluding (w) trade accounts payable in the ordinary course of business, (x) any Earn-Out obligation, purchase price adjustment or similar obligation until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP and if not paid within thirty (30) days after being due and payable,

(y) liabilities associated with customer prepayments and deposits and (z) expenses accrued in the ordinary course of business), (e) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (f) all Guarantees by such Person of Indebtedness of others, (g) all obligations with respect to Capital Leases of such Person, (h) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty and (i) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances; provided that the term “Indebtedness” shall not include (i) deferred or prepaid revenue, (ii) purchase price holdbacks in respect of a portion of the purchase price of an asset to satisfy warranty, indemnity or other unperformed obligations of the seller, (iii) contingent indemnity and similar obligations incurred in the ordinary course of business (iv) any obligations attributable to the exercise of appraisal rights and the settlement of any claims or actions (whether actual, contingent or potential) with respect thereto, (v) Indebtedness of any Person that is a direct or indirect parent of a Borrower appearing on the balance sheet of a Borrower, or solely by reason of push down accounting under GAAP, (vi) any non-compete or consulting obligations incurred in connection with a Permitted Acquisition, (vii) any reimbursement obligations under pre-paid contracts entered into with clients in the ordinary course of business, (viii) for the avoidance of doubt, any Qualified Equity Interests issued by the Borrower. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor. The amount of Indebtedness of any Person for purposes of clause (e) above shall (unless such Indebtedness has been assumed by such Person) be deemed to be equal to the lesser of (A) the aggregate unpaid amount of such Indebtedness and (B) the fair market value of the property encumbered thereby as determined by such Person in good faith. For all purposes hereof, the Indebtedness of any Borrower and its Subsidiaries shall exclude intercompany liabilities arising from their cash management, tax, and accounting operations and intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any rollover or extensions of terms).

“Indemnified Taxes” means (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 Financing Agreement and (b) to the extent not otherwise described in the foregoing clause (a) hereof, Other Taxes.

“Indemnitee” shall have the meaning set forth in Section 11.6(a) hereof.

“Information Certificate” shall mean that certain Information Certificate in the form of Exhibit B hereto (or such other form reasonably acceptable to the Agent) delivered by the Borrowers and Guarantors on the Closing Date.

“Instruments” shall have the meaning set forth in Article 9 of the UCC.

“Intellectual Property” means all intellectual property rights of every kind and nature, including rights in inventions, Patents, Copyrights, Licenses, Trademarks, rights in Trade Secrets, and rights in Software all rights to sue or otherwise recover for any past, present and future infringement, dilution, misappropriation, or other violation or impairment thereof, a Proceeds of the foregoing, including, without limitation, license fees, royalties, income, payments, claims, damages and proceeds of suit now or hereafter due and/or payable with respect thereto, and all other rights of any kind accruing thereunder or pertaining thereto throughout the world, in each case of the Borrowers and the Guarantors.

“Intercreditor Agreement” means (a) that certain Amended and Restated Intercreditor Agreement, dated as of the First Amendment Effective Date, as amended on August 1, 2022, by and among the Agent, the First Lien Agent, the Second Lien Agent, the Badcock First Lien Agent and the Badcock and the Second Lien Agent, and acknowledged by the Borrowers, and the Guarantors and Badcockas of August 1, 2022, as the same may be amended, restated, amended and restated, supplemented, replaced or otherwise modified from time to time in accordance with the provisions hereof and thereof or (b) such other intercreditor agreement or arrangement among the Agent (or other applicable representative on behalf of the holders of the Indebtedness incurred under this Agreement and the other Financing Agreements) and the First Lien Agent and/or the Second Lien Agent (or any of them) (and any other Persons party thereto), that is reasonably acceptable to the Agent and the Administrative Borrower, as may be amended, amended and restated, modified, supplemented, extended or renewed from time to time not in violation of the terms hereof or thereof, as applicable.

“Interest Election Request” means a request by the Administrative Borrower to convert or continue a Borrowing in accordance with Section 2.12.

“Interest Expense” shall mean, for any period, as to any Person, as determined on a consolidated basis in accordance with GAAP, the total interest expense of such Person, whether paid or accrued during such period (including the interest component of Capital Leases for such period), including, discounts in connection with the sale of any Accounts and bank fees, commissions, discounts and other fees and charges owed with respect to letters of credit, banker’s acceptances or similar instruments, losses, fees, net costs and early termination costs under Hedge Agreements, amortization or write-off of debt discounts and debt issuance costs and commissions, and other discounts and other fees and charges associated with Indebtedness.

“Interest Payment Date” means (a) with respect to any ABR Loan (other than a Swingline Loan), the first Business Day of each calendar quarter and the Maturity Date, (b) with respect to any RFR Loan, each date that is on the numerically corresponding day in each calendar month that is one month after the Borrowing of such RFR Loan (or, if there is no numerically corresponding day in such month, then the last day of such month) and the Maturity Date, (c) with respect to any Term Benchmark Loan, the last day of each Interest Period applicable to the Borrowing of which such Loan is a part (and, in the case of a Term Benchmark Borrowing with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period) and the Maturity Date and (d) with respect to any Swingline Loan, the day that such Swingline Loan is required to be repaid and the Maturity Date.

“Interest Period” means, with respect to any Term Benchmark Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, three or six thereafter (in each case, subject to the availability for the Benchmark applicable to the relevant Loan or Revolving Commitment), as the Administrative Borrower may elect; provided that (a) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, (b) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period and (c) no tenor that has been removed from this definition pursuant to Section 3.4(f) shall be available for specification in such Borrowing Request or Interest Election Request. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.

“Internally Generated Cash” shall mean any cash or Cash Equivalents of any Loan Party (or, prior to the Badcock Joinder Date, Badcock) that is not generated from an Asset Sale, an Event of Loss, an incurrence of Indebtedness, an issuance of Capital Stock or a capital contribution.

“Inventory” shall have the meaning set forth in Article 9 of the UCC and includes, without limitation, as to each Borrower and Guarantor, all of such Borrower’s and Guarantor’s now owned and hereafter existing or acquired goods, wherever located, which (a) are leased by such Borrower or Guarantor as lessor; (b) are held by such Borrower or Guarantor for sale or lease or to be furnished under a contract of service; (c) are furnished by such Borrower or Guarantor under a contract of service; or (d) consist of raw materials, work in process, finished goods or materials used or consumed in its business.

“Inventory Reserves” shall mean the reserves described in clauses (i), (ii), (viii), (x), (xi) and (xii) of the definition of “Reserves”.

“Investment” shall have the meaning set forth in Section 9.10.

“Investment Property” shall have the meaning set forth in Article 9 of the UCC.

“Investment Property Control Agreement” shall mean an agreement in writing, in form and substance reasonably satisfactory to Agent, by and among Agent (and the First Lien Agent, if a party), any Borrower or Guarantor (as the case may be) and any securities intermediary, commodity intermediary or other Person who has custody, control or possession of any Investment Property of such Borrower or Guarantor acknowledging that such securities intermediary, commodity intermediary or other Person has custody, control or possession of such Investment Property on behalf of Agent (and the First Lien Agent, if a party) that it will comply with entitlement orders originated by Agent (or the First Lien Agent, as applicable) after the occurrence and during the continuance of an Event of Default with respect to such Investment Property, or other instructions of Agent (or the First Lien Agent, as applicable), and has such other terms and conditions as Agent may reasonably require.

“Investors” means the one or more co-investors and other investors (which may include existing shareholders, board members, management or other rollover investors of the Acquired Company) who are holders of Capital Stock in the Borrower (or any direct or indirect parent thereof) on the Closing Date after giving effect to the Transactions, together with their Affiliates.

“Issuing Bank” shall mean Chase.

“Landlord Lien States” shall mean the States of Washington and Virginia and the Commonwealth of Pennsylvania and such other states, provinces or jurisdictions in which a landlord’s claim for rent (including a portion of rent) has or may have priority by operation of applicable law over the lien of the Agent on behalf of the Secured Parties in any of the Collateral.

“LC Disbursement” means any payment made by an Issuing Bank pursuant to a Letter of Credit.

“LCA Election” has the meaning assigned to such term in Section 1.2.

“LCA Test Date” has the meaning assigned to such term in Section 1.2.

“Lender-Related Person” shall have the meaning set forth in Section 11.6(b) hereof.

“Lenders” shall mean the financial institutions who are signatories hereto as Lenders and other Persons made a party to this Agreement as a Lender in accordance with Section 13.7 hereof, and their respective successors and assigns, including the Revolving Lenders; each sometimes being referred to herein individually as a “Lender”. Unless the context otherwise requires, the term “Lenders” includes the Swingline Lender and the Issuing Bank.

“Letter of Credit Documents” shall mean, with respect to any Letter of Credit, such Letter of Credit, any amendments thereto, any documents delivered in connection therewith, any application therefor, and any agreements, instruments, guarantees or other documents (whether general in application or applicable only to such Letter of Credit) governing or providing for (a) the rights and obligations of the parties concerned or at risk or (b) any collateral security for such obligations.

“Letter of Credit Limit” shall mean $25,000,00040,000,000.

“Letter of Credit Obligations” shall mean, at any time and without duplication, the sum of (a) the aggregate undrawn amount of all Letters of Credit outstanding at such time, plus (b) the aggregate amount of all drawings under Letters of Credit for which Issuing Bank has not at such time been reimbursed, plus (c) the aggregate amount of all payments made by each Revolving Lender to Issuing Bank with respect to such Revolving Lender’s participation in Letters of Credit as provided in Section 2.3 for which Borrowers have not at such time reimbursed the Revolving Lenders, whether by way of a Revolving Loan or otherwise.

“Letter-of-Credit Rights” shall have the meaning set forth in Article 9 of the UCC.

“Letters of Credit” shall mean all letters of credit (whether documentary or stand-by and whether for the purchase of Inventory, Equipment or otherwise) issued by an Issuing Bank for the account of any Borrower pursuant to this Agreement and shall include each Existing Letter of Credit, and all amendments, extensions or replacements thereof, and the term “Letter of Credit” means any one of them or each of them singularly, as the context may require.

“Leverage Ratio” shall mean, for any date of determination, the ratio of: (a) Total Indebtedness as of such date to (b) EBITDA for the most recently completed Test Period, all calculated for any Person on a consolidated basis in accordance with GAAP.

“Liabilities” means any losses, claims (including intraparty claims), demands, damages or liabilities of any kind.

“License” means any Patent License, Trademark License or Copyright License.

“License Agreements” means (a) all agreements or other arrangements of Borrowers and Guarantors pursuant to which such Borrower or Guarantor has a license, option, or other right to use any trademarks, logos, designs or other intellectual property that is material to such Borrower’s or Guarantor’s business and owned by another Person as in effect on the Closing Date and (b) all such agreements or other arrangements as may be entered into by any Borrower or Guarantor after the Closing Date.

“Lien” and “lien” mean, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

“Limited Condition Transaction” means any Permitted Acquisition or other investment, incurrence of Indebtedness, dividend, distribution or repayment, repurchase or redemption of Indebtedness permitted hereunder by a Borrower or one or more of its Subsidiaries.

“Liquidity” means, at any time, (a) with respect to the AFG Borrowers, the sum of (i) the aggregate amount of cash of the AFG Borrowers contained in any deposit account for which such AFG Borrower has delivered to the Agent a Deposit Account Control Agreement pursuant to which (x) the Agent has been granted a lien on and first-priority security interest in such account and all cash held from time to time therein and (y) the Agent has been granted control over the amounts held from time to time therein and (ii) any AFG Excess Availability, (b) with respect to the PSP Borrowers, the sum of (i) the aggregate amount of cash of the PSP Borrowers contained in any deposit account for which such PSP Borrower has delivered to the Agent a Deposit Account Control Agreement pursuant to which (x) the Agent has been granted a lien on and first-priority security interest in such account and all cash held from time to time therein and (y) the Agent has been granted control over the amounts held from time to time therein and (ii) any PSP Excess Availability or (c) with respect to the TVS Borrowers, the sum of (i) the aggregate amount of cash of the TVS Borrowers contained in any deposit account for which such TVS Borrower has delivered to the Agent a Deposit Account Control Agreement pursuant to which (x) the Agent has been granted a lien on and first-priority security interest in such account and all cash held from time to time therein and (y) the Agent has been granted control over the amounts held from time to time therein and (ii) any TVS Excess Availability.

“Loan Parties” means, collectively, the Borrowers and the Guarantors and their respective successors and assigns, and the term “Loan Party” shall mean any one of them or all of them individually, as the context may require; provided that, notwithstanding anything to the contrary herein or in any Financing Agreement, prior to the Badcock Joinder Date, Badcock shall not be a Loan Party for any purpose in any Financing Agreement.

“Loans” shall mean, collectively, all of the Revolving Loans (including Swingline Loans and Overadvances) and “Loan” shall mean any one of the Revolving Loans (including Swingline Loans and Overadvances).

“Manual Sweeping Accounts” shall mean the Deposit Accounts maintained by the Borrowers as of the Closing Date that are identified as “Manual Sweeping Accounts” on Schedule 8.10 hereto, and any replacement or additional accounts of the Borrowers.

“Master Agreement” has the meaning assigned to such term in the definition of “Hedge Agreement”.

“Material Adverse Effect” shall mean a material adverse effect on (a) the financial condition, business, performance or operations of Borrowers taken as a whole or of Borrowers and the Guarantors taken as a whole; (b) the legality, validity or enforceability of this Agreement, any Collateral Document, the Intercreditor Agreement or any of the other material Financing Agreements; (c) the legality, validity, enforceability, perfection or priority of the security interests and liens of Agent upon the Collateral; (d) the Collateral (taken as a whole) or its value; (e) the ability of Borrowers (taken as a whole) to repay the Obligations or of Borrowers (taken as a whole) to perform their obligations under this Agreement or any of the other Financing Agreements as and when to be performed; or (f) the ability of Agent or any Lender to enforce the Obligations or realize upon the Collateral or otherwise with respect to the material rights and remedies of Agent and Lenders under this Agreement or any of the other Financing Agreements.

“Material Contract” shall mean the First Lien Credit Agreement, the Second Lien Credit Agreement, the Badcock First Lien Credit Agreement, the Badcock Second Lien Credit Agreement and any other contract or other agreement (other than the Financing Agreements and the Credit Card Agreements), whether written or oral, to which any Borrower or Guarantor is a party as to which the breach, nonperformance, cancellation or failure to renew by any party thereto (unless a replacement Material Contract has been entered into either prior to or contemporaneously with the date of such termination or cancellation) would reasonably be expected have a Material Adverse Effect.

“Material Real Property” means real property (including fixtures) (i) located in the United States, (ii) first acquired by any Loan Party after the Effective Date and (iii) owned (but not leased or ground-leased) by any Loan Party with a book value, as reasonably determined by the Administrative Borrower in good faith on the date of acquisition thereof, greater than or equal to $7,500,000.

“Material Subsidiary” means each Wholly Owned Subsidiary that, as of the last day of the fiscal quarter of the Administrative Borrower most recently ended, had net revenues or total assets for such quarter in excess of 2.5% of the consolidated net revenues or total assets, as applicable, of the Administrative Borrower and its Subsidiaries for such fiscal quarter; provided that in the event that the Immaterial Subsidiaries, taken together, had as of the last day of the fiscal quarter of the Administrative Borrower most recently ended net revenues or total assets in excess of 7.5% of the consolidated net revenues or total assets, as applicable, of the BorrowerFRG and its Subsidiaries for such fiscal quarter, the Administrative Borrower shall designate at its sole discretion one or more Immaterial Subsidiaries to be a Material Subsidiary as may be necessary such that the foregoing 7.5% limit shall not be exceeded, and any such Subsidiary shall thereafter be deemed to be a Material Subsidiary hereunder; provided, further, that the Borrower may re-designate Material Subsidiaries as Immaterial Subsidiaries so long as Borrower is in compliance with the foregoing.

“Maturity Date” shall mean the earliest of (a) the fifth anniversary of the Closing Date, (b) the date that is 91 days prior to the maturity date of any Indebtedness of any Borrower or Guarantor with an aggregate outstanding principal amount in excess of $25,000,000 (including the First Lien Obligations and the Second Lien Obligations (but excluding, for the avoidance of doubt, the Badcock Term Obligations)) and in each case any Refinancing Indebtedness in respect thereof and (c) any date on which the Revolving Commitments are reduced to zero or otherwise terminated pursuant to the terms hereof.

“Model” means the model delivered by the Administrative Borrower to Agent on or prior to the Closing Date.

“Moneys” shall have the meaning set forth in the UCC.

“Moody’s” means Moody’s Investors Service, Inc. and any successor to its rating agency business

“Mortgage” means a mortgage, deed of trust, deed to secure debt or other security document granting a Lien on any Mortgaged Property in favor of Agent for the benefit of the Secured Parties to secure the Obligations, as the same may be amended, amended and restated, supplemented or otherwise modified from time to time. Each Mortgage shall be in form and substance reasonably satisfactory to Agent and the Administrative Borrower.

“Mortgaged Property” means each parcel of Material Real Property with respect to which a Mortgage is granted pursuant to Section 9.21.

“Multiemployer Plan” shall mean a “multi-employer plan” as defined in Section 4001(a)(3) of ERISA which is contributed to by any Borrower, Guarantor or any ERISA Affiliate or with respect to which any Borrower, Guarantor or any ERISA Affiliate may reasonably be expected to incur any liability.

“Net Recovery Percentage” shall mean with respect to finished goods Inventory or raw materials Inventory, as applicable, the fraction, expressed as a percentage, (a) the numerator of which is the amount equal to the amount of the recovery in respect of the applicable Inventory at such time on a “net orderly liquidation value” basis as set forth in the most recent acceptable appraisal of such Inventory received by Agent in accordance with Section 7.3, net of operating expenses, liquidation expenses and commissions, and (b) the denominator of which is the applicable original cost of the aggregate amount of such Inventory subject to such appraisal.

“Non-Cash Charges” means (a) any impairment charge or asset write-off or write-down, including impairment charges or asset write-offs or write-downs related to intangible assets (including goodwill), long-lived assets, and Investments in debt and equity securities or as a result of a change in law or regulation, in each case pursuant to GAAP, and the amortization of intangibles pursuant to GAAP (which, without limiting the foregoing, shall include any impairment charges resulting from the application of FASB Statements No. 142 and 144 and the amortization of intangibles arising pursuant to No. 141), (b) all losses from Investments recorded using the equity method, (c) all Non-Cash Compensation Expenses, (d) the non-cash impact of acquisition method accounting, (e) depreciation and amortization (including amortization of deferred financing fees or costs, Capitalized Software Expenditures and amortization of unrecognized prior service costs and actuarial gains and losses related to pension and other post-employment benefits) and (f) other non-cash charges (including non-cash charges related to deferred rent) (provided, in each case, that if any non-cash charges represent an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be subtracted from EBITDA to such extent, and excluding amortization of a prepaid cash item that was paid in a prior period).

“Non-Cash Compensation Expense” means any non-cash expenses and costs that result from the issuance of stock-based awards, partnership interest-based awards and similar incentive based compensation awards or arrangements.

“Non-Wholly Owned Subsidiary” means any Subsidiary other than a Wholly Owned Subsidiary.

“Not Otherwise Applied” means, with reference to the Available Equity Amount, that such amount was not previously applied pursuant to 9.10(hh), 9.11(m) and 9.24(l).

“NYFRB” means the Federal Reserve Bank of New York.

“NYFRB Rate” means, for any day, the greater of (a) the Federal Funds Effective Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on such day(or for any day that is not a Business Day, for the immediately preceding Business Day); provided that, if none of such rates are published for any day that is a Business Day, the term “NYFRB Rate” means the rate for a federal funds transaction quoted at 11:00 a.m. on such day received by the Agent from a federal funds broker of recognized standing selected by it; provided further that, if any of the aforesaid rates as so determined would be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

“NYFRB’s Website” means the website of the NYFRB at http://www.newyorkfed.org, or any successor source.

“Obligations” shall mean:

(a)               any and all Loans, Letter of Credit Obligations and all other obligations, liabilities and indebtedness of every kind, nature and description owing by any or all of Borrowers and Guarantors to Agent or any Lender, including principal, interest, charges, fees, costs and expenses, however evidenced, whether as principal, surety, endorser, guarantor or otherwise, arising under this Agreement or any of the other Financing Agreements, whether now existing or hereafter arising, whether arising before, during or after the initial or any renewal term of this Agreement or after the commencement of any case with respect to such Borrower or Guarantor under the United States Bankruptcy Code or any similar statute (including the payment of interest and other amounts which would accrue and become due but for the commencement of such case, whether or not such amounts are allowed or allowable in whole or in part in such case), whether direct or indirect, absolute or contingent, joint or several, due or not due, primary or secondary, liquidated or unliquidated, or secured or unsecured; and

(b)               for purposes only of Section 5.1 hereof and subject to the priority in right of payment set forth in Section 6.4 hereof, all obligations, liabilities and indebtedness of every kind, nature and description owing by any or all of Borrowers or Guarantors and each of their respective Subsidiaries to Agent or any Bank Product Provider arising under or pursuant to any Bank Products or to Bank of America, N.A. arising under the E-Payables Agreement, in each case whether now existing or hereafter arising to the extent such obligations, liabilities and indebtedness would not cause the total amount of the Obligations to exceed the value of the Collateral; provided that:

(i)                 solely with respect to any Borrower or Guarantor that is not an ECP, Excluded Hedge Obligations of any such Borrower or Guarantor shall in any event be excluded from “Obligations” owing by such Borrower or Guarantor,

(ii)              as to any such obligations, liabilities and indebtedness arising under or pursuant to the E-Payables Agreement, such obligations, liabilities and indebtedness owing to Bank of America, N.A. thereunder shall constitute Obligations entitled to the benefits of the security interest of Agent granted hereunder, provided that (A) such obligations, liabilities and indebtedness considered Obligations hereunder shall not exceed $20,000,000 in the aggregate at any time outstanding, (B) Administrative Borrower shall instruct and cause Bank of America, N.A. to deliver to Agent, monthly, a summary of the amount of the obligations, liabilities and indebtedness owing to Bank of America, N.A. under and pursuant to the E-Payables Agreement as Agent may reasonably request, (C) Agent may, at its option, establish a Reserve with respect to the amount of the reported obligations, liabilities and indebtedness owing to Bank of America, N.A. under and pursuant to the E-Payables Agreement and (D) Bank of America, N.A. shall not have any voting rights under this Agreement or any other Financing Agreement as a result of the existence of Obligations owing to it under and pursuant to the E-Payables Agreement,

(iii)            any Bank Product Provider (other than Chase and its Affiliates), shall have delivered written notice to Agent that (A) such Bank Product Provider has entered into a transaction to provide Bank Products to a Borrower and Guarantor and (B) the obligations arising pursuant to such Bank Products provided to Borrowers and Guarantors constitute Obligations entitled to the benefits of the security interest of Agent granted hereunder, and Agent shall have accepted such notice in writing, and

(iv)             in no event shall any Bank Product Provider to whom such obligations, liabilities or indebtedness are owing, or Bank of America, N.A. with respect to obligations, liabilities and indebtedness owing to it under and pursuant to the E-Payables Agreement, be deemed a Lender for purposes hereof to the extent of and as to such obligations, liabilities or indebtedness other than for purposes of Section 5.1 hereof and other than for purposes of Sections 12.1, 12.2, 12.3(b), 12.6, 12.7, 12.9, 12.12 and 13.6 hereof, as applicable, and in no event shall such obligations be included in the Obligations to the extent that the effect is that the value of the Collateral (as determined by Agent) is less than the amount of the Obligations and in no event shall the approval of any such Person be required in connection with the release or termination of any security interest or lien of Agent.

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Taxes (other than a connection 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 Financing Agreement, or sold or assigned an interest in any Loan, Letter of Credit or any Financing Agreement).

“Other Taxes” means 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 Financing Agreement, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 3.6(b)).

“Overadvances” has the meaning assigned to such term in Section 2.2(b).

“Overnight Bank Funding Rate” means, for any day, the rate comprised of both overnight federal funds and overnight eurodollar transactions denominated in dollars by U.S.-managed banking offices of depository institutions (as such composite rate shall be determined by the NYFRB as set forth on the NYFRB’s Website from time to time) and published on the next succeeding Business Day by the NYFRB as an overnight bank funding rate.

“Paid in Full” or “Payment in Full” means, (a) the payment in full in cash of all outstanding Loans and LC Disbursements, together with accrued and unpaid interest thereon, (b) the termination, expiration, or cancellation and return of all outstanding Letters of Credit (or alternatively, with respect to each such Letter of Credit, the furnishing to the Agent of a cash deposit, or at the discretion of the Agent a backup standby letter of credit satisfactory to the Agent and the Issuing Bank, in an amount equal to 105% of the Letter of Credit Obligations as of the date of such payment), (c) the payment in full in cash of the accrued and unpaid fees, (d) the payment in full in cash of all reimbursable expenses and other Obligations (other than Unliquidated Obligations for which no claim has been made and other obligations expressly stated to survive such payment and termination of this Agreement), together with accrued and unpaid interest thereon, (e) the termination of all Revolving Commitments, and (f) the termination of the Hedge Obligations and the Bank Products or entering into other arrangements satisfactory to the Secured Parties counterparties thereto.

“Participant” shall mean any Person that acquires and holds a participation in the interest of any Lender in any of the Loans and Letters of Credit in conformity with the provisions of Section 13.7 of this Agreement governing participations.

“Participant Register” has the meaning assigned to such term in Section 13.7(e).

“Patent License” means any written agreement or license now or hereafter in effect, granting to or from any Person any right to manufacture, use or sell any invention claimed in a Patent, now or hereafter owned by any other Person or that any other Person now or hereafter otherwise has the right to license, and all rights of any such Person under any such agreement or license.

“Patents” means (a) all patents and patent applications, for letters patent of the United States or any other jurisdiction, including issued patents and pending patent applications in the United States Patent and Trademark Office, and (b) all reissues, substitutes, divisionals, continuations, continuations-in-part, extensions, renewals, and reexaminations thereof.

“Payment” has the meaning assigned to such term in Section 12.6(b)(i).

“Payment in Full of Badcock Term Obligations” means, collectively, (i) the termination of all Commitments (under and as defined in the Badcock First Lien Credit Agreement) and the payment in full of all Secured Obligations (as defined in the Badcock First Lien Credit Agreement) (other than contingent indemnification obligations) and (ii) the termination of all Commitments (under and as defined in the Badcock Second Lien Credit Agreement) and the payment in full of all Secured Obligations (as defined in the Badcock Second Lien Credit Agreement) (other than contingent indemnification obligations).

“Payment Notice” has the meaning assigned to such term in Section 12.6(b)(ii).

“Permitted Acquisitions” shall mean the purchase or other acquisition, by merger, consolidation or otherwise, by any Borrower or any Subsidiary of any Capital in, or all or substantially all the assets of (or all or substantially all the assets constituting a business unit, division, product line or line of business of), any Person (the “Acquired Business”); provided that (a) in the case of any purchase or other acquisition of Capital Stock in a Person, (i) such Person, upon the consummation of such purchase or acquisition, will be a Subsidiary (including as a result of a merger or consolidation between any Subsidiary and such Person), or (ii) such Person is merged into or consolidated with a Subsidiary and such Subsidiary is the surviving entity of such merger or consolidation, (b) the business of such Person, or such assets, as the case may be, constitute a Permitted Business (or assets with respect thereto), (c) with respect to each such purchase or other acquisition, all actions required to be taken with respect to such newly created or acquired Subsidiary (including each subsidiary thereof) or assets in order to satisfy the requirements set forth in Section 9.23 (other than with respect to any Subsidiary of such newly created or acquired Subsidiary that is an Excluded Subsidiary), (d) subject to Section 1.2, after giving effect to any such purchase or other acquisition no Event of Default shall have occurred and be continuing, (e) the total consideration paid in connection with all such purchases and acquisitions of the Capital Stock in any Person which will not become a Loan Party (within the time periods set forth in this Agreement), or all or substantially all the assets of (or all or substantially all the assets constituting a business unit, division, product line or line of business of) any Person if substantially all of such assets will not become owned by a Loan Party (or a Person that will become a Loan Party within the time periods set forth in this Agreement), shall not exceed $20,000,000 in the aggregate, unless financed with the proceeds of Qualified Equity Interests, excluding any Qualified Equity Interests used for, or otherwise having the effect of increasing, any other basket under this Agreement,

(f) Accounts, Credit Card Receivables and Inventory of the Acquired Business shall only be Eligible Accounts, Eligible Credit Card Receivables, and Eligible Inventory to the extent that (i) such Accounts, Credit Card Receivables and Inventory are owned by a Borrower, (ii) Agent has conducted and completed a field examination and inventory appraisal with respect thereto and (iii) the criteria for Eligible Accounts, Eligible Credit Card Receivables, and Eligible Inventory set forth herein are satisfied with respect thereto in accordance with this Agreement (or such other or additional criteria as Agent may, at its option, establish with respect thereto in accordance with this Agreement and subject to such Reserves as Agent may establish in connection with the Acquired Business) and (g) (i) Excess Availability shall have been not less than the greater of (x) 15% of the Borrowing Cap and (y) $22,500,00050,000,000, in each case for the 30-day period ending on the date of consummation of such acquisition, and (ii) the Borrowers shall have projected Excess Availability of not less than the greater of (x) 15% of the Borrowing Cap and (y) $22,500,00050,000,000, in each case immediately after giving effect to such acquisition and any payments made in respect of such acquisition and for the succeeding 30-day period thereafter on a pro forma basis using the most recent calculation of the Aggregate Borrowing Base immediately prior to such acquisition or payment.

“Permitted Business” shall mean any business engaged in by any of the Borrowers on the date hereof, and any business or other activities that are reasonably similar, ancillary, complementary or related to, or a reasonable extension, development or expansion of, the businesses in which the Borrowers are engaged as of the Closing Date.

“Permitted Discretion” shall mean a determination made in good faith and in the exercise of reasonable (from the perspective of a secured asset-based lender) business judgment.

“Permitted Encumbrances” means:

(i)                 liens for Taxes, assessments or governmental charges that are not overdue for a period of more than 30 days or that are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP;

(ii)              liens with respect to outstanding motor vehicle fines and liens imposed by law, such as carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or construction contractors’ liens and other similar liens arising in the ordinary course of business that secure amounts not overdue for a period of more than 30 days or, if more than 30 days overdue, are unfiled and no other action has been taken to enforce such lien or that are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP, in each case so long as such liens do not individually or in the aggregate have a Material Adverse Effect;

(iii)            liens incurred, pledges or deposits made in the ordinary course of business (i) in connection with payroll taxes, workers’ compensation, unemployment insurance and other social security legislation, public liability laws or similar legislation or (ii) securing liability for reimbursement or indemnification obligations of (including obligations in respect of letters of credit or bank guarantees or similar instrument for the benefit of) insurance carriers providing property, casualty or liability insurance to a Borrower or any Subsidiary or otherwise supporting the payment of items of the type set forth in the foregoing clause (i);

(iv)             liens incurred or deposits made to secure the performance of tenders, bids, trade contracts, customer claims, governmental contracts and leases, statutory obligations, surety, stay, customs and appeal bonds, performance bonds, bankers’ acceptance facilities and other obligations of a like nature (including those to secure health, safety and environmental obligations) and obligations in respect of letters of credit, bank guarantees or similar instruments that have been posted to support the same, in each case incurred in the ordinary course of business or consistent with past practices;

(v)               easements, licenses, servitudes, restrictive covenants, rights-of-way, restrictions, encroachments, protrusions, zoning restrictions and other similar encumbrances and title defects affecting real property that, in the aggregate, do not materially interfere with the ordinary conduct of the business of the Borrowers and their Subsidiaries taken as a whole;

(vi)             leases or subleases of real or personal property granted to other Persons (as lessee thereof) that do not materially interfere with the ordinary conduct of the business of the Borrowers and their Subsidiaries taken as a whole;

(vii)          rights of future tenants pursuant to written leases entered into in accordance with the terms hereof;

(viii)        liens securing, or otherwise arising from, judgments not constituting an Event of Default under Section 10.1(d) and any pledge and/or deposit securing any settlement of threatened litigation;

(ix)             liens on (i) goods the purchase price of which is financed by a documentary letter of credit issued for the account of a Borrower or any of its Subsidiaries or liens on bills of lading, drafts or other documents of title arising by operation of law or pursuant to the standard terms of agreements relating to letters of credit, bank guarantees and other similar instruments; provided that such lien secures only the obligations of a Borrower or such Subsidiaries in respect of such letter of credit to the extent such obligations are permitted by Section 9.9 and (ii) specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

(x)               liens arising from precautionary UCC financing statements or similar filings made in respect of operating leases entered into by a Borrower or any of its Subsidiaries;

(xi)             rights of recapture of unused real property (other than any Mortgaged Property) in favor of the seller of such property set forth in customary purchase agreements and related arrangements with any Governmental Authority;

(xii)          liens in favor of deposit banks or securities intermediaries securing customary fees, expenses or charges in connection with the establishment, operation or maintenance of deposit accounts or securities accounts;

(xiii)        liens in favor of obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by a Borrower or any of the Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;

(xiv)         liens arising from grants of non-exclusive licenses or sublicenses of Intellectual Property, or covenants not to sue with respect to Intellectual Property, made in the ordinary course of business;

(xv)           rights of setoff, banker’s lien, netting agreements and other liens arising by operation of law or by the terms of documents of banks or other financial institutions in relation to the maintenance of administration of deposit accounts, securities accounts, cash management arrangements or in connection with the issuance of letters of credit, bank guarantees or other similar instruments;

(xvi)         liens arising from the right of distress enjoyed by landlords or liens otherwise granted to landlords, in either case, to secure the payment of arrears of rent or performance of other obligations in respect of leased properties, so long as such liens are not exercised or except where the exercise of such liens would not reasonably be expected to have a Material Adverse Effect;

(xvii)      liens or security given to public utilities or to any municipality or Governmental Authority when required by the utility, municipality or Governmental Authority in connection with the supply of services or utilities to the Borrower or any of its Subsidiaries;

(xviii)    servicing agreements, development agreements, site plan agreements, subdivision agreements, facilities sharing agreements, cost sharing agreements and other agreements pertaining to the use or development of any of the assets of the Person, provided the same do not result in (i) a substantial and prolonged interruption or disruption of the business activities of the BorrowerFRG and its Subsidiaries, taken as a whole, or (ii) a Material Adverse Effect; and

(xix)         liens securing Priority Obligations;

provided that the term “Permitted Encumbrances” shall not include any lien securing Indebtedness for borrowed money other than liens referred to in clauses (iv) and (xiii) above securing obligations under letters of credit or bank guarantees or similar instruments related thereto and in clause (viii) above, in each case to the extent any such lien would constitute a lien securing Indebtedness for borrowed money.

“Permitted Holders” shall mean (a) Vintage (and its controlled investment funds) and (b) Vintage’s controlling persons who are Brian Kahn and Andrew Laurence (together with their controlled family trusts and personal investment vehicles), plus in each case any Immediate Family Member of either Brian Kahn or Andrew Laurence.

“Permitted Sale and Leaseback Transaction” has the meaning assigned to it in Section 9.7(b)(T).

“Permitted Subordinated Indebtedness” means (a) any Indebtedness (other than any permitted intercompany Indebtedness owing to the Borrower or any Subsidiary) for borrowed money in a principal amount in excess of $10,000,000 that is secured on a junior basis to the Obligations, unsecured or contractually subordinated in right of payment or right of lien to the Obligations and (b) any Refinancing Indebtedness in respect of the foregoing. For avoidance of doubt, Indebtedness under the First Lien Credit Agreement and the other First Lien Term Loan Documents, the Second Lien Credit Agreement and the other Second Lien Term Loan Documents, the Badcock First Lien Credit Agreement and the other Badcock First Lien Term Loan Documents and the Badcock Second Lien Credit Agreement and the other Badcock Second Lien Term Loan Documents shall not constitute Permitted Subordinated Indebtedness.

“Person” or “person” shall mean any individual, sole proprietorship, partnership, corporation (including any corporation which elects subchapter S status under the Code), limited liability company, limited liability partnership, business trust, unincorporated association, joint stock corporation, trust, joint venture or other entity or any government or any agency or instrumentality or political subdivision thereof.

“Plan” shall mean an employee pension benefit plan (as defined in Section 3(2) of ERISA) which Borrower or any Guarantor or, solely with respect to an employee benefit plan subject to Title IV of ERISA, an ERISA Affiliate sponsors or to which it contributes, or a Multiemployer Plan.

“Plan Asset Regulations” means 29 CFR § 2510.3-101 et seq., as modified by Section 3(42) of ERISA, as amended from time to time.

“Pledge Agreement” shall mean that certain Third Amended and Restated Stock Pledge Agreement dated as of the Closing Date, by and among the Loan Parties and Agent, as the same may be amended, restated or otherwise modified from time to time.

“Post-Transaction Period” means, with respect to any Specified Transaction, the period beginning on the date such Specified Transaction is consummated and ending on the last day of the eighth full consecutive fiscal quarter of the Administrative Borrower immediately following the date on which such Specified Transaction is consummated.

“Prime Rate” shall mean the rate of interest last quoted by The Wall Street Journal as the “Prime Rate” in the U.S. or, if The Wall Street Journal ceases to quote such rate, the highest per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or, if such rate is no longer quoted therein, any similar rate quoted therein (as determined by the Agent) or any similar release by the Federal Reserve Board (as determined by the Agent). Each change in the Prime Rate shall be effective from and including the date such change is publicly announced or quoted as being effective.

“Priority Obligation” means any obligation that is secured by a Lien on any Collateral (and/or, prior to the Badcock Joinder Date, any Badcock Collateral) in favor of a Governmental Authority, which Lien ranks or is capable of ranking prior to or pari passu with the Liens created thereon by the applicable Collateral Documents (and/or, prior to the Badcock Joinder Date, the applicable Badcock Security Documents), including any such Lien securing amounts owing for wages, vacation pay, severance pay, employee deductions, sales tax, excise tax, other Taxes, workers compensation, governmental royalties and stumpage or pension fund obligations.

“pro forma basis” means, with respect to compliance with any test hereunder for an applicable period of measurement, that all Specified Transactions and the following transactions in connection therewith that have been made during the applicable period of measurement or subsequent to such period and prior to or simultaneously with the event for which the calculation is made shall be deemed to have occurred as of the first day of the applicable measurement period with respect to such covenant or condition: (a) income statement items (whether positive or negative) attributable to the property or Person subject to such Specified Transaction, (i) in the case of a sale, transfer or other disposition of all or substantially all Capital Stock in FRG or any of its Subsidiaries or any division or product line of FRG or any of its Subsidiaries, shall be excluded, and (ii) in the case of an Investment described in the definition of the term “Specified Transaction”, shall be included, (b) any retirement of Indebtedness and (c) any Indebtedness incurred or assumed by FRG or any of its Subsidiaries in connection with such Specified Transaction, and assuming all Indebtedness so incurred or assumed to be outstanding shall be deemed to have borne interest (i) in the case of fixed rate Indebtedness, at the rate applicable thereto or (ii) in the case of floating rate Indebtedness, at the rates which were or would have been applicable thereto during the period when such Indebtedness was or was deemed to be outstanding.

“Pro Forma Disposal Adjustment” means, for any Test Period that includes all or a portion of a fiscal quarter of the Administrative Borrower included in any Post-Transaction Period with respect to any Sold Entity or Business, the pro forma increase or decrease in EBITDA projected by the Administrative Borrower in good faith as a result of contractual arrangements between the Borrowers or any Subsidiary entered into with such Sold Entity or Business at the time of its disposal or within the Post-Transaction Period and which represent an increase or decrease in EBITDA which is incremental to the Disposed EBITDA of such Sold Entity or Business for the most recent Test Period prior to its disposal.

“Pro Forma Entity” means any Acquired Entity or Business.

“Pro Rata Share” shall mean as to any Lender, the fraction (expressed as a percentage) the numerator of which is such Revolving Lender’s Revolving Commitment and the denominator of which is the aggregate amount of the Revolving Commitments of all Revolving Lenders, as adjusted from time to time in accordance with the provisions of Section 13.7 hereof; provided, that, if the Revolving Commitments have terminated, the numerator shall be the unpaid amount of such Revolving Lender’s Revolving Exposure and the denominator shall be the aggregate amount of Revolving Exposure of all Revolving Lenders.

“Proceeding” means any claim, litigation, investigation, action, suit, arbitration or administrative, judicial or regulatory action or proceeding in any jurisdiction.

“Proceeds” means all “proceeds” as such term is defined in Section 9-102(a)(64) of the UCC and, in any event, shall include, without limitation, all dividends or other income from the Pledged Securities, collections thereon and distributions or payments with respect thereto.

“Promissory note” shall have the meaning set forth in Article 9 of the UCC.

“PSP” means Pet Supplies “Plus”, LLC, a Delaware limited liability company.

“PSP Acquisition” means the acquisition of PSP and its Subsidiaries by FRG and its Subsidiaries pursuant to the PSP Acquisition Agreement.

“PSP Acquisition Agreement” means the Equity Purchase Agreement, dated as of January 23, 2021, by and among PSP Newco, PSP Holdings, LLC, a Delaware limited liability company, PSP, Sentinel Capital Partners VI-A, L.P., a Delaware limited partnership, solely for purposes of agreeing to the covenants set forth in Sections 6.8 and 6.9 thereof, Sentinel Capital Partners, L.L.C., a Delaware limited liability company, PSP Midco Holdings, LLC, a Delaware limited liability company, and, solely for purposes of agreeing to the covenants in Section 10.19 thereof, FRG, and including the schedules, exhibits and disclosure letters thereto.

“PSP Borrowers” means (a) PSP and (b) PSP Newco.

“PSP Borrowing Base” shall mean, at any time, the amount equal to:

(a) the amount equal to:

(i) 90% of the amount of Eligible Credit Card Receivables of the PSP Borrowers at such time, plus

(ii) 85% of the amount of Eligible Accounts of the PSP Borrowers at such time, plus

(iii) 90% of the Net Recovery Percentage multiplied by the Value of the Eligible Inventory of the PSP Borrowers, net of any Inventory Reserves, in each case, at such time, minus

(b) the Availability Reserves;

provided that the aggregate amount of Eligible Accounts of the PSP Borrowers in respect of Franchisee Receivables shall not exceed the amount equal to 10% of the PSP Borrowing Base at any time.

The amounts of Eligible Inventory of the PSP Borrowers shall be determined based on the amount of applicable Inventory set forth in the inventory record maintained by the Borrowers.

Agent shall have the right to establish Reserves against or sublimits in the PSP Borrowing Base in such amounts and with respect to such matters as Agent shall deem reasonably necessary or appropriate in its Permitted Discretion, based on new information received by Agent and after Agent has completed its updated field audits, examinations and appraisals of the Collateral; provided, however, that, so long as no Event of Default has occurred and is continuing, Agent shall give to Administrative Borrower five Business Days’ telephonic or electronic notice if (A) Agent establishes new categories of Reserves, (B) Agent changes the methodology of calculating Reserves or (C) Agent establishes new categories of sublimits in the PSP Borrowing Base; provided further that, during such five Business Day-period, no Borrowing may be drawn or Letter of Credit issued to the extent any Revolving Exposure Limitations would be exceeded after giving effect to any such Reserves or sublimit modifications. The foregoing notwithstanding, in the event Agent establishes Reserves to preserve or protect or maximize the value of the Collateral during the continuance of an Event of Default, Agent shall only provide Administrative Borrower with notice at the time such Reserves are established.

Accounts, Credit Card Receivables and Inventory of the PSP Borrowers shall only be Eligible Accounts, Eligible Credit Card Receivables and Eligible Inventory, as applicable, to the extent that (x) Agent has conducted and completed a field examination, appraisal and other due diligence with respect thereto and (y) the criteria for Eligible Accounts, Eligible Credit Card Receivables and Eligible Inventory set forth herein, as applicable, are satisfied with respect thereto in accordance with this Agreement (or such other or additional criteria as Agent may, at its option, establish with respect thereto in accordance with this Agreement and subject to such Reserves as Agent may establish in its Permitted Discretion).

The PSP Borrowing Base shall be determined at any time by Agent, on the basis of the most recently delivered Borrowing Base Certificate, as adjusted by Agent for any changes in Reserves or otherwise in accordance with the terms hereof.

Notwithstanding anything to the contrary herein, in connection with the PSP Acquisition, the PSP Borrowers may submit a Borrowing Base Certificate reflecting a calculation of the PSP Borrowing Base that includes Eligible Credit Card Receivables (collectively, the “Deemed Eligible Credit Card Receivables”) and Eligible Inventory (collectively, the “Deemed Eligible Inventory”) acquired in connection with the PSP Acquisition and, from and after the date of the PSP Acquisition until the date that is 90 days after the Closing Date (or such later date not to exceed 30 days thereafter as Agent may agree to in its sole discretion), the PSP Borrowing Base hereunder shall be calculated giving effect thereto; provided that, prior to the completion and delivery to Agent of the applicable field examination or inventory appraisal with respect to such Deemed Eligible Credit Card Receivables or Deemed Eligible Inventory, the PSP Borrowing Base shall be limited to the sum of (x) (i) 50% of the Deemed Eligible Credit Card Receivables plus (ii) 40% of the Value (without giving effect to the proviso in the definition thereof) of the Deemed Eligible Inventory, net of any Inventory Reserves, minus (y) Availability Reserves. On and after the date that is 90 days after the Closing Date (or such later date not to exceed 30 days thereafter as Agent may agree to in its sole discretion), the PSP Borrowing Base shall be deemed to equal $0 unless Agent shall have received a field examination, an inventory appraisal and an updated Borrowing Base Certificate reflecting the PSP Borrowing Base on a pro forma basis after giving effect to the Eligible Credit Card Receivables and Eligible Inventory of the PSP Borrowers, in each case in form and substance reasonably satisfactory to Agent, and after the delivery of all such items, the PSP Borrowing Base shall be calculated without giving effect to this paragraph.

“PSP Borrowing Cap” shall mean, the amount, calculated at any date, equal to the lesser of (i) $75,000,000 and (ii) the PSP Borrowing Base in effect at such time.

“PSP Excess Availability” shall mean, the amount, as determined by Agent, calculated at any date, equal to: (a) the PSP Borrowing Cap minus (b) the Aggregate Revolving Exposure owing by the PSP Borrowers.

“PSP Loan Party” means (a) each PSP Borrower and (b) without duplication of clause (a), each Loan Party that is a Subsidiary of a PSP Borrower.

“PSP Newco” means Franchise Group Newco PSP, LLC, a Delaware limited liability company and an indirect subsidiary of FRG.

“PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.

“QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).

“QFC Credit Support” has the meaning assigned to it in Section 13.12.

“Qualified ECP Guarantor” shall mean, in respect of any Hedge Obligation, each Borrower or Guarantor that has total assets exceeding $10,000,000 at the time the relevant guarantee or grant of the relevant security interest becomes effective with respect to such Hedge Obligation or such other person 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.

“Qualified Equity Interests” means Capital Stock of a Borrower other than Disqualified Equity Interests.

“Real Property” shall mean all now owned and hereafter acquired real property of each Borrower and Guarantor, including leasehold interests, together with all buildings, structures, and other improvements located thereon and all licenses, easements and appurtenances relating thereto, wherever located.

“Receivables” shall mean all of the following now owned or hereafter arising or acquired property of each Borrower and Guarantor: (a) all Accounts; (b) all interest, fees, late charges, penalties, collection fees and other amounts due or to become due or otherwise payable in connection with any Account; (c) all payment intangibles of such Borrower or Guarantor; (d) letters of credit, indemnities, guarantees, security or other deposits and proceeds thereof issued payable to any Borrower or Guarantor or otherwise in favor of or delivered to any Borrower or Guarantor in connection with any Account; or (e) all other Accounts, contract rights, Chattel Paper, Documents, Instruments, notes, General Intangibles and other forms of obligations owing to any Borrower or Guarantor, whether from the sale and lease of goods or other property, licensing of any property (including Intellectual Property or other General Intangibles), franchising, rendition of services or from loans or advances by any Borrower or Guarantor or to or for the benefit of any third Person (including loans or advances to any Affiliates or Subsidiaries of any Borrower or Guarantor) or otherwise associated with any Accounts, Inventory or General Intangibles of any Borrower or Guarantor (including choices in action, causes of action, tax refunds, tax refund claims, any funds which may become payable to any Borrower or Guarantor in connection with the termination of any Plan or other employee benefit plan and any other amounts payable to any Borrower or Guarantor from any Plan or other employee benefit plan, rights and claims against carriers and shippers, rights to indemnification, business interruption insurance and proceeds thereof, casualty or any similar types of insurance and any proceeds thereof and proceeds of insurance covering the lives of employees on which any Borrower or Guarantor is a beneficiary).

“Recipient” means, as applicable, (a) the Agent, (b) any Lender, (c) the Swingline Lender and (d) the Issuing Bank, or any combination thereof (as the context requires).

“Records” shall mean, as to each Borrower and Guarantor, all of such Borrower’s and Guarantor’s present and future books of account of every kind or nature, purchase and sale agreements, invoices, ledger cards, bills of lading and other shipping evidence, statements, correspondence, memoranda, credit files and other data relating to the Collateral or any Account Debtor, together with the tapes, disks, diskettes and other data and software storage media and devices, file cabinets or containers in or on which the foregoing are stored (including any rights of any Borrower or Guarantor with respect to the foregoing maintained with or by any other Person).

“Reference Time” with respect to any setting of the then-current Benchmark means (i) if such Benchmark is the Term SOFR Rate, 5:00 a.m., Chicago time, on the day that is two (2) Business Days preceding the date of such setting, (ii) if such Benchmark is the Daily Simple SOFR, then four (4) Business Days prior to such setting, and (iii) if such Benchmark is none of the Term SOFR Rate or Daily Simple SOFR, the time determined by the Agent in its reasonable discretion.

“Refinanced Indebtedness” shall have the meaning set forth in Section 9.9(p) hereof.

“Refinancing Indebtedness” shall have the meaning set forth in Section 9.9(p) hereof.

“Register” shall have the meaning set forth in Section 13.7 hereof.

“Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, partners, members, trustees, employees, agents, administrators, managers, representatives and advisors of such Person and such Person’s Affiliates.

“Release” means any release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, emptying, escaping, pumping, discharge, dispersal, leaching or migration into or through the environment (including ambient air, surface water, groundwater, land surface or subsurface strata) and including the environment within any building, or any occupied structure, facility or fixture.

“Relevant Governmental Body” means the Federal Reserve Board, the NYFRB and/or the CME Term SOFR Administrator, as applicable, or a committee officially endorsed or convened by the Federal Reserve Board and/or the NYFRB or, in each case, any successor thereto.

“Relevant Rate” means (i) with respect to any Term Benchmark Borrowing, the Adjusted Term SOFR Rate or (ii) with respect to any RFR Borrowing, the Adjusted Daily Simple SOFR, as applicable.

“Rental Agreements” means each rental agreement entered into by FRG or any of its Subsidiaries.

“Required Conditions” shall mean, with respect to any Specified Transaction, either (a) Excess Availability exceeds the greater of (x) 2015% of the Borrowing Cap and (y) $30,000,00050,000,000 and the Fixed Charge Coverage Ratio is equal to or greater than 1.0 to 1.0, in each case, calculated as of the date of such Specified Transaction both prior to and after giving effect to such Specified Transaction, on a pro forma basis using the most recent calculation of the Aggregate Borrowing Base immediately prior to such Specified Transaction; provided that the pro forma Fixed Charge Coverage Ratio shall be calculated as of the last Test Period prior to the date of such Specified Transaction for which financial statements for the fiscal month, fiscal quarter or fiscal year then ended have been (or have been required to be) delivered pursuant to Section 9.6(a)(i) and Section 9.6(a)(ii), as applicable, or (b) Excess Availability exceeds the greater of (x) 2520% of the Borrowing Cap and (y) $37,500,00070,000,000 calculated as of the date of such Specified Transaction both prior to and after giving effect to such Specified Transaction, on a pro forma basis using the most recent calculation of the Aggregate Borrowing Base immediately prior to such Specified Transaction.

“Required Lenders” shall mean, at any time, those Lenders whose Pro Rata Shares aggregate 50.1% or more of the aggregate of the Revolving Commitments of all Lenders, or if the Revolving Commitments shall have been terminated, Lenders to whom at least 50.1% of the then outstanding Obligations are owing; provided that (x) if there are only two non-affiliated Lenders at such time, then Required Lenders shall mean all Lenders and (y) if there are only three non-affiliated Lenders at such time, then Required Lenders must include at least two non-affiliated Lenders.

“Requirement of Law” means, with respect to any Person, (a) the charter, articles or certificate of organization or incorporation and bylaws or operating, management or partnership agreement, or other organizational or governing documents of such Person and (b) any statute, law (including common law), treaty, rule, regulation, code, ordinance, order, decree, writ, judgment, injunction or determination of any arbitrator or court or other Governmental Authority (including Environmental Laws), 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.

“Reserves” shall mean as of any date of determination, such amounts as Agent may from time to time in its Permitted Discretion establish and revise reasonably and in good faith reducing the amount of Revolving Loans and Letters of Credit which would otherwise be available to any Borrower under the lending formula(s) provided for herein:

(a)               to reflect events, conditions, contingencies or risks which, as determined by Agent reasonably and in good faith, materially and adversely affect, either (i) the Collateral, its value or the amount that might be received by Agent from the sale or other disposition or realization upon such Collateral, or (ii) the assets or business of any Borrower or Guarantor or (iii) the security interests and other rights of Agent or any Lender in the Collateral (including the enforceability, perfection and priority thereof); or

(b)               to reflect Agent’s reasonable and good faith belief that any collateral report or financial information furnished by or on behalf of any Borrower or Guarantor to Agent is or may have been incomplete, inaccurate or misleading in any material respect; or

(c)               in respect of any state of facts which Agent believes reasonably and in good faith determines constitutes a Default or an Event of Default (which reasonable and good faith belief shall be relevant for purposes of this definition regardless of whether the Agent has explicitly asserted any other rights to which it may be entitled).

Without limiting the generality of the foregoing, Reserves may, at Agent’s option (or shall, to the extent so required under this Agreement), be established to reflect any of the following:

(i)                 Inventory shrinkage,

(ii)              reserves in respect of markdowns and cost variances (pursuant to discrepancies between the purchase order price of Inventory and the actual cost thereof),

(iii)            outstanding Taxes and other governmental charges, including, without limitation, ad valorem, real estate, personal property, sales, claims of the Pension Benefit Guaranty Corporation (or any successor thereto) and other Taxes which may have priority over the interests of Agent in the Collateral,

(iv)             any amounts which are past due in respect of rental payments, service charges or other amounts which are past due to (i) lessors of real property other than retail store locations (“Non-Retail Store Locations”) or (ii) consignees, warehousemen or bailees of Inventory or personal property (“Warehouse Locations”), to the extent Inventory or Records are located in or on such property (but not in respect of Non-Retail Store Locations or Warehouse Locations (A) where Agent has received a Collateral Access Agreement executed and delivered by the owner and lessor of such real property that Agent has acknowledged in writing is in form and substance satisfactory to Agent or (B) which do not (1) contain Records relating to Receivables or Inventory or (2) in which either no Inventory or Inventory having a Value of less than $5,000,000 is located, provided that, notwithstanding the foregoing, Agent may, at its option, establish Reserves in respect of amounts at any time due or to become due to the owner and operator of such Non-Retail Store Location and Warehouse Location as Agent shall reasonably determine in the event that any of the following shall occurred: (A) an Event of Default shall have occurred and be continuing, (B) any Borrower, Guarantor or Agent shall have received notice of any event of default under (i) the lease with respect to such Non-Retail Store Location or (ii) the bailee or warehouse agreement with respect to such Warehouse Location or (C) any Borrower or Guarantor has granted to the lessor, consignee, warehousemen or bailee a consensual security interest or lien upon any assets of such Borrower or Guarantor (unless such security interest is waived or subordinated to the security interest of Agent on terms and conditions reasonably satisfactory to Agent)),

(v)               any rental payments, service charges or other amounts owing to lessors of retail store locations,

(A)             which are past due and owing to lessors of retail store locations in states other than Landlord Lien States (but not in respect of retail store locations where Agent has received a Collateral Access Agreement executed and delivered by the owner and lessor of such real property that Agent has acknowledged in writing is in form and substance satisfactory to Agent), provided, that, Agent may, at its option, establish Reserves in respect of amounts at any time due or to become due to the owner and lessor of such a retail store location as Agent shall reasonably determine in the event that any of the following shall occurred: (1) an Event of Default shall have occurred and be continuing, (2) any Borrower, Guarantor or Agent shall have received notice of any event of default under the lease with respect to such location, or (3) any Borrower or Guarantor has granted to the lessor a security interest or lien upon any assets of such Borrower or Guarantor (unless such security interest is waived or subordinated to the security interest of Agent on terms and conditions reasonably satisfactory to Agent), and

(B)              which are due or to become due to lessors of retail store locations located in Landlord Lien States (but not in respect of retail store locations where Agent has received a Collateral Access Agreement executed and delivered by the owner and lessor of such real property that Agent has acknowledged in writing is in form and substance satisfactory to Agent), provided, that, the Reserves established pursuant to this clause (v)(B) as to any particular retail store location shall not exceed at any time the aggregate of such amounts payable for the next two months to the lessors of such retail store locations, provided, that, such limitation on the amount of the Reserves which may be established by Agent pursuant to this clause (v)(B) shall only apply so long as: (1) no Event of Default shall have occurred and be continuing, (2) neither a Borrower, Guarantor nor Agent shall have received notice of any event of default under the lease with respect to such location or (3) any Borrower or Guarantor has granted a consensual lien or security interest upon any assets of such Borrower or Guarantor (unless such security interest is waived or subordinated to the security interest of Agent on terms and conditions reasonably satisfactory to Agent),

(vi)             any rental payments, service charges or other amounts which are past due to lessors of personal property,

(vii)          up to 50% of the aggregate amount of (A) merchandise gift certificates and (B) the dollar value of Frequent Buyer Program points as accrued by Borrowers in accordance with GAAP,

(viii)        an adverse change in the number of days of the turnover of Inventory or a material change in the mix of the Inventory that results in an overall decrease in the value thereof or a material deterioration in its nature or quality that results in an overall decrease in the value thereof (but only to the extent not addressed by the lending formulas in a manner satisfactory to Agent),

(ix)             variances between the perpetual inventory records of Borrowers and the results of test counts of Inventory conducted by Agent or at the request of Agent pursuant to the terms of this Agreement, with respect thereto in excess of the percentage reasonably acceptable to Agent but only to the extent that such variances are not accounted for as Inventory shrinkage,

(x)               Inventory that may become obsolete, based on prior twelve months expired product expenses or Inventory currently in retail store locations that was subject to previous store “giveaways” within the prior twelve months,

(xi)             the aggregate amount of deposits, if any, received by any Borrower from its retail customers in respect of unfilled orders for merchandise,

(xii)          [reserved]Inventory located at locations owned or leased by Dealers,

(xiii)        (i) commissions and other amounts due to franchisees (including AFG Franchisees) and (ii) commissions and other amounts (including rent) due to dealers (including Dealers),

(xiv)         customs duties, and other costs to release Inventory which is being imported into the United States,

(xv)           the aggregate remaining value at such time of outstanding merchandise credits of the Loan Parties,

(xvi)         rebates, discounts, deposits, warranty claims and returns,

(xvii)      Bank Product Reserve, and

(xviii)    E-Payables Reserve.

Agent will not establish new Reserves after the date hereof on account of any circumstances, conditions, events or contingencies of which Agent has actual knowledge as of the Closing Date. To the extent Agent may establish new criteria or revise existing criteria (including percentages applied to determine the amount of) for Eligible Credit Card Receivables, Eligible Accounts, or Eligible Inventory so as to address any circumstances, condition, event or contingency in a manner reasonably satisfactory to Agent, Agent shall not establish or increase a Reserve for the same purpose. The amount of any Reserve established or increased by Agent shall have a reasonable relationship to the event, condition or other matter which is the basis for such Reserve as reasonably determined by Agent in good faith and to the extent that such Reserve is in respect of amounts that may be payable to third parties or is in respect of Bank Product Reserves, Agent may, at its option, deduct such Reserve from the Aggregate Revolving Commitments Amount at any time that such limit is less than the amount of the Aggregate Borrowing Base. Agent shall provide prior written notice to Administrative Borrower of any material change in the categories of Reserves established after the date hereof or in the manner such Reserves are calculated or any other change to any item for the calculation thereof.

“Resolution Authority” means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.

“Reuters” means, as applicable, Thomson Reuters Corp, Refinitiv, or any successor thereto.

“Revolving Commitment” means, with respect to each Revolving Lender, the commitment, if any, of such Revolving Lender to make Revolving Loans and to acquire participations in Letters of Credit, expressed as an amount representing the maximum possible aggregate amount of such Revolving Lender’s Revolving Exposure hereunder, as such commitment may be reduced or increased from time to time pursuant to (a) Section 2.4 and (b) assignments by or to such Revolving Lender pursuant to Section 13.7. Each Revolving Lender’s Revolving Commitment as of the ClosingThird Amendment Effective Date is the amount set forth opposite such Revolving Lender’s name on Schedule 1A under the caption “Revolving Commitment”.

“Revolving Exposure” means, with respect to any Revolving Lender at any time, the sum of the outstanding principal amount of such Revolving Lender’s unpaid Revolving Loans, its Swingline Exposure and its outstanding Letter of Credit Obligations.

“Revolving Exposure Limitations” has the meaning assigned to it in Section 2.1(a).

“Revolving Lender” means, as of any date of determination, a Lender with a Revolving Commitment or, if the Revolving Commitments have terminated or expired, a Lender with Revolving Exposure. Unless the context otherwise requires, the term “Revolving Lenders” includes the Swingline Lender and the Issuing Bank.

“Revolving Loans” shall mean the loans now or hereafter made by or on behalf of any Revolving Lender or by Agent for the account of any Revolving Lender on a revolving basis pursuant to the Credit Facility (involving advances, repayments, readvances, Swingline Loans and Overadvances) as set forth in Section 2.1, Section 2.2, Section 12.8 and Section 12.11 hereof.

“RFR Borrowing” means, as to any Borrowing, the RFR Loans comprising such Borrowing.

“RFR Loan” means a Loan that bears interest at a rate based on the Adjusted Daily Simple SOFR.

“S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business, and any successor to its rating agency business.

“Sanctioned Country” means, at any time, a country, region or territory which is itself the subject or target of any Sanctions (as of the Closing Date, Crimea, Cuba, Iran, North Korea, and Syria).

“Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State or other relevant sanctions authority, (b) any Person operating, organized or resident in a Sanctioned Country, (c) any Person owned or controlled by any such Person or Persons described in the foregoing clauses (a) or (b) or (d) any Person otherwise the subject of any Sanctions.

“Sanctions” means all economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State, or (b) any other relevant sanctions authority.

“Sears Top Parent” means Franchise Group Intermediate S, LLC, a Delaware limited liability company.

“Second Amendment” means that certain Second Amendment to Third Amended and Restated Loan and Security Agreement, dated as of the Second Amendment Effective Date, among the Borrowers, the other Loan Parties party thereto, the Lenders party thereto and the Agent.

“Second Amendment Effective Date” means June [__]3, 2022.

“Second Lien Agent” means Alter Domus (US) LLC, in its capacity asthe “Administrative Agent and Collateral Agent” (or analogous terms) under the Second Lien Credit Agreement, together with its successorincluding any successors and permitted assigns thereof.

“Second Lien Credit Agreement” means (i) that certain Credit Agreement, dated as of the Closing Date, among the Administrative Borrower, PSP Newco, Valor Acquisition, LLC and AFG Intermediate, as borrowers, Alter Domus (US) LLC, as administrative agent and collateral agent, and the lenders from time to time party thereto, as the same may be amended, restated, supplemented or otherwise modified, superseded or replaced from time to time in accordance with the Intercreditor Agreement and/or (ii) any credit agreement, loan agreement, or other financing that replaces or refinances the Credit Agreement described in the preceding clause (i) so long as the security interests securing such credit agreement, loan agreement or other financing are subject to the Intercreditor Agreement, as the same may be amended, restated, supplemented or otherwise modified, superseded or replaced from time to time in accordance with the Intercreditor Agreement.

“Second Lien Lender” means a “Lender” under and as defined in the Second Lien Credit Agreement.

“Second Lien Obligations” means all Indebtedness of the BorrowerBorrowers and the Guarantors incurred or owing under the Second Lien Term Loan Documents, including all obligations in respect of the payment of principal, interest, fees, prepayment premiums and indemnification obligations, and any refinancing or replacement of such Indebtedness permitted under this Agreement and under the Intercreditor Agreement; provided that such Indebtedness (to the extent secured) is subject to the Intercreditor Agreement.

“Second Lien Term Loan Documents” means the “Loan Documents” or analogous term as defined in the Second Lien Credit Agreement or the agreements and other documents governing other Indebtedness incurred under Section 9.9(t).

“Secured Parties” shall mean, collectively, (a) Agent, (b) Lenders, (c) the Swingline Lender, (d) the Issuing Bank and (e) any Bank Product Provider and Bank of America, N.A. (in its capacity as a party to the E-Payables Agreement); provided, that, (i) as to any Bank Product Provider and as to Bank of America, N.A., only to the extent of the Obligations owing to such Bank Product Provider and Bank of America, N.A., as provided, in subsection (b) of the definition of Obligations set forth herein and (ii) such parties are sometimes referred to herein individually as a “Secured Party”.

“Secured Term Debt Cap” means the sum of (i) $1,430,000,000 plus (ii) an additional amount not to exceed 110% of the Incremental Cap (as defined in the First Lien Credit Agreement as in effect on the Closing Date and assuming, for purposes of this definition, that any Indebtedness incurred pursuant to Section 9.9(s) or (t) constitutes Consolidated First Lien Indebtedness (as defined in the First Lien Credit Agreement)).

“Securities Accounts” shall have the meaning set forth in Article 9 of the UCC.

“Securities and Exchange Commission” means the Securities and Exchange Commission of the United States.

“Security” shall have the meaning set forth in Article 8 of the UCC.

“Settlement” has the meaning assigned to such term in Section 2.2(d).

“Settlement Date” has the meaning assigned to such term in Section 2.2(d).

“Settlement Period” has the meaning assigned to such term in Section 6.1(b).

“SOFR” means a rate equal to the secured overnight financing rate as administered by the SOFR Administrator.

“SOFR Administrator” means the NYFRB (or a successor administrator of the secured overnight financing rate).

“SOFR Administrator’s Website” means the NYFRB’s Website, currently at http://www.newyorkfed.org, or any successor source for the secured overnight financing rate identified as such by the SOFR Administrator from time to time.

“SOFR Rate Day” has the meaning specified in the definition of “Daily Simple SOFR”.

“Sold Entity or Business” has the meaning assigned to such term in the definition of the term “EBITDA.”

“Solvent” shall mean, at any time with respect to any Person, that at such time such Person (a) is able to pay its debts as they mature and has (and has a reasonable basis to believe it will continue to have) sufficient capital (and not unreasonably small capital) to carry on its business consistent with its practices as of the Closing Date, and (b) the assets and properties of such Person at a fair valuation on a going concern basis (and including as assets for this purpose at a fair valuation all rights of subrogation, contribution or indemnification arising pursuant to any guarantees given by such Person) are greater than the Indebtedness of such Person, and including subordinated and contingent liabilities computed at the amount which, such Person has a reasonable basis to believe, represents an amount which can reasonably be expected to become an actual or matured liability (and including as to contingent liabilities arising pursuant to any guarantee the face amount of such liability as reduced to reflect the probability of it becoming a matured liability).

“Special Agent Advances” shall have the meaning set forth in Section 12.11 hereof.

“Specified Transaction” means any (a) disposition of all or substantially all the assets of or all the Capital Stock of any Subsidiary of FRG or of any business unit, line of business or division of FRG or any of its Subsidiaries for which historical financial statements are available, (b) Permitted Acquisitions, (c) Investment that results in a Person becoming a Borrower or Subsidiary, (d) the proposed incurrence of Permitted Subordinated Indebtedness or (e) the making of an Investment, dividend or distribution or repurchase of Capital Stock in respect of which compliance with the Required Conditions or any other financial ratio is by the terms of this Agreement is required to be calculated on a pro forma basis.

“Store Accounts” shall have the meaning set forth in Section 6.3; provided that the Store Accounts maintained by the Borrowers as of the Closing Date are identified as “Store Accounts” on Schedule 8.10 hereto, and any replacement or additional accounts of the Borrowers.

“Subsidiary” or “subsidiary” shall mean, with respect to any Person, any corporation, limited liability company, limited liability partnership or other limited or general partnership, trust, association or other business entity of which an aggregate of at least a majority of the outstanding Capital Stock or other interests entitled to vote in the election of the board of directors of such corporation (irrespective of whether, at the time, Capital Stock of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency), managers, trustees or other controlling Persons, or an equivalent controlling interest therein, of such Person is, at the time, directly or indirectly, owned by such Person and/or one or more subsidiaries of such Person.

“Subsidiary Guarantors” shall have the meaning assigned to such term in the definition of “Guarantors”.

“Successor Borrower” shall have the meaning set forth in Section 9.7(a)(iv) hereof.

“Supermajority Revolving Lenders” means, at any time, Lenders (other than Defaulting Lenders) having Revolving Exposures and unused Revolving Commitments representing at least 66 2/3% of the sum of the Aggregate Revolving Exposure and unused Revolving Commitments at such time; provided that (x) if there are only two non-affiliated Lenders at such time, then Supermajority Revolving Lenders shall mean all Lenders and (y) if there are only three non-affiliated Lenders at such time, then Supermajority Revolving Lenders must include at least two non-affiliated Lenders.

“Supported QFC” has the meaning assigned to it in Section 13.12.

“Supporting Obligations” shall have the meaning set forth in Article 9 of the UCC.

“Swingline Exposure” means, at any time, the aggregate principal amount of all Swingline Loans outstanding at such time. The Swingline Exposure of any Revolving Lender at any time shall be its Pro Rata Share of the total Swingline Exposure at such time.

“Swingline Lender” means Chase, in its capacity as lender of Swingline Loans hereunder. Any consent required of Agent or the Issuing Bank shall be deemed to be required of the Swingline Lender and any consent given by Chase in its capacity as Agent or Issuing Bank shall be deemed given by Chase in its capacity as Swingline Lender.

“Swingline Loan” has the meaning assigned to such term in Section 2.2(a).

“Tax Restructuring” means any reorganizations and other activities related to tax planning and tax reorganization (as determined by Administrative Borrower in good faith) entered into after the Closing Date so long as such Tax Restructuring does not materially impair the Guaranty or the security interests of the Agent and the Lenders under the Collateral Documents in the Collateral, taken as a whole, and Borrower and its Subsidiaries otherwise comply with Sections 9.23.

“Taxes” means any and 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.

“Term Benchmark Borrowing” shall mean a Borrowing of Term Benchmark Loans.

“Term Benchmark Loans” shall mean any Loan or portion thereof on which interest is payable based on the Adjusted Term SOFR Rate in accordance with the terms hereof.

“Term Loan Priority Collateral” has the meaning assigned to such term in the Intercreditor Agreement.

“Term SOFR Determination Day” has the meaning assigned to it under the definition of Term SOFR Reference Rate.

“Term SOFR Rate” means, with respect to any Term Benchmark Borrowing and for any tenor comparable to the applicable Interest Period, the Term SOFR Reference Rate at approximately 5:00 a.m., Chicago time, two U.S. Government Securities Business Days prior to the commencement of such tenor comparable to the applicable Interest Period, as such rate is published by the CME Term SOFR Administrator.

“Term SOFR Reference Rate” means, for any day and time (such day, the “Term SOFR Determination Day”), with respect to any Term Benchmark Borrowing and for any tenor comparable to the applicable Interest Period, the rate per annum determined by the Agent as the forward-looking term rate based on SOFR. If by 5:00 pm (New York City time) on such Term SOFR Determination Day, the “Term SOFR Reference Rate” for the applicable tenor has not been published by the CME Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Rate has not occurred, then the Term SOFR Reference Rate for such Term SOFR Determination Day will be the Term SOFR Reference Rate as published in respect of the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate was published by the CME Term SOFR Administrator, so long as such first preceding Business Day is not more than five (5) Business Days prior to such Term SOFR Determination Day.

“Test Period” means the most recent period of twelve consecutive months of FRG ended on or prior to such time (taken as one accounting period) in respect of which financial statements for each month or fiscal year period have been (or have been required to be) delivered pursuant to Section 9.6.

“Third Amendment” means that certain Third Amendment to Third Amended and Restated Loan and Security Agreement, dated as of the Third Amendment Effective Date, among the Borrowers, the other Loan Parties party thereto, the Lenders party thereto and the Agent.

“Third Amendment Effective Date” means August 22, 2022.

“Total Indebtedness” means, as of any date of determination, (i) the aggregate amount of Indebtedness of the Administrative Borrower and its Subsidiaries outstanding on such date, determined on a consolidated basis in accordance with GAAP (but excluding the effects of any discounting of Indebtedness resulting from the application of the acquisition method accounting in connection with the Transactions or any Permitted Acquisition (or other Investment not prohibited hereunder)) consisting only of third-party Indebtedness for borrowed money, drawn but unreimbursed obligations under letters of credit, letters of guaranty and bankers’ acceptances and third-party debt obligations evidenced by bonds, debentures, loan agreements, promissory notes or similar instruments, and, in each case, without duplication, guarantees by the Administrative Borrower and its Subsidiaries outstanding on such date, determined on a consolidated basis in accordance with GAAP, in respect of any of the foregoing Indebtedness of any other Person minus (ii) the sum of (x) unrestricted cash and cash equivalents of the Administrative Borrower and its Subsidiaries in an aggregate amount not to exceed $150,000,000 and (y) cash and cash equivalents restricted in favor of Agent or any Lender (which may also include cash and cash equivalents securing other indebtedness (including Indebtedness under the First Lien Term Loan Documents and the Badcock First Lien Term Loan Documents) secured by a Lien on the Collateral).

“Trade Secrets” means any trade secrets or other proprietary and confidential information, including unpatented inventions, invention disclosures, engineering or other technical data, financial data, procedures, know-how, designs, supplier lists, customer lists, business, production or marketing plans, formulae, methods (whether or not patentable), processes, compositions, schematics, algorithms, techniques, analyses, source code, object code and data collections.

“Trademark License” means any written agreement or license now or hereafter in effect, granting to or from any Person any right to use any Trademark now or hereafter owned by any other Person or that any other Person otherwise has the right to license and all rights of any such Person under any such agreement or license.

“Trademarks” means (a) all trademarks, service marks, trade names, corporate names, company names, business names, fictitious business names, trade dress, logos, domain names and other source identifiers, in each case whether arising under the trademark laws of the United States or any other jurisdiction, (b) all registrations and applications for the registration thereof, including all registrations and applications for registration filed in the United States Patent and Trademark Office, and (c) all of the goodwill of the applicable business connected with the use of and symbolized by any of the foregoing.

“Transaction Costs” means all fees, premiums, costs and expenses incurred or payable by the Administrative Borrower or any of its subsidiaries in connection with the Transactions.

“Transactions” means (a) the PSP Acquisition, (b) the execution and delivery of the First Lien Term Loan Documents, the creation of the Liens pursuant to the Security Documents (as defined in the First Lien Credit Agreement) and the incurrence of the Term Facility (as defined in the First Lien Credit Agreement) and the funding of the Initial Term Loans (as defined in the First Lien Credit Agreement) on the Closing Date, (c) the execution and delivery of the Second Lien Term Loan Documents, the creation of the Liens pursuant to the Security Documents (as defined in the Second Lien Credit Agreement) and the incurrence of the Term Facility (as defined in the Second Lien Credit Agreement) and the funding of the Initial Term Loans (as defined in the Second Lien Credit Agreement) on the Closing Date, (d) the consummation of the other transactions contemplated by this Agreement on the Closing Date, (e) the consummation of any other transactions in connection with the foregoing, (f) the repayment of the existing Indebtedness under the Existing Term Loan Credit Agreement and the termination of such Existing Term Loan Credit Agreement and the documents related thereto, (g) the repayment of the existing Indebtedness under, and the termination of, the Existing Debt Agreements and the documents related thereto, (h) the execution and delivery of this Agreement, the creation of the Liens pursuant to the Collateral Documents and the incurrence of any borrowings hereunder to be incurred on the Closing Date and (i) the payment of the Transaction Costs related thereto.

“TVS” means Vitamin Shoppe Industries LLC, a New York limited liability company.

“TVS Borrowers” means (a) TVS and (b) Valor Acquisition, LLC, a Delaware limited liability company.

“TVS Borrowing Base” shall mean, at any time, the amount equal to:

(a) the amount equal to:

(i) 90% of the amount of Eligible Credit Card Receivables of the TVS Borrowers at such time, plus

(ii) 85% of the amount of Eligible Accounts of the TVS Borrowers at such time, plus

(iii) 90% of the Net Recovery Percentage multiplied by the Value of the Eligible Inventory of the TVS Borrowers, net of any Inventory Reserves, in each case, at such time, minus

(b) the Availability Reserves;

provided that the aggregate amount of Eligible Accounts of the TVS Borrowers in respect of Franchisee Receivables shall not exceed the amount equal to 10% of the TVS Borrowing Base at any time.

The amounts of Eligible Inventory of the TVS Borrowers shall be determined based on the amount of applicable Inventory set forth in the inventory record maintained by the Borrowers.