Document:

Master Lease Agreement

 Exhibit 10.2 
  
 LASALLE NATIONAL LEASING CORPORATION 

  
 MASTER LEASE AGREEMENT 
  
 THIS MASTER LEASE AGREEMENT (this “Lease”) is made as of the
16th day of April, 2003, by and between LASALLE NATIONAL LEASING CORPORATION, its successors and assigns
(“Lessor”), and PACER INTERNATIONAL, INC., its successors and permitted assigns (“Lessee”). 
  
 The parties agree that Lessee shall lease from Lessor the property (the “Equipment”) described in the Interim Equipment Schedules and Final
Equipment Schedule(s) to be executed pursuant hereto (collectively, the “Equipment Schedule”), subject to the terms set forth herein, in the Riders attached hereto and in the Equipment Schedule. Certain definitions and construction of
certain of the terms used herein are provided in Section 20 hereof. Each Equipment Schedule shall incorporate by reference the terms and conditions of this Lease. Each Equipment Schedule, incorporating by reference the terms and conditions of this
Lease, shall constitute a separate instrument of lease. 
  
 1.
TERM. The term of lease (the “Term”) with respect to any item of the Equipment shall consist of the Interim Term and Base Term (as such terms are defined therein) set forth in the Equipment Schedule relating thereto together with the
Initial Renewal Term (if applicable), Second Renewal Term (as such terms are defined in Rider No. 1 attached hereto) (if applicable), the Build-Down Period (as such term is defined in Rider No. 2 attached hereto) (if applicable), and the six (6)
month period after the expiration of the Build-Down Period (if applicable); provided, however, that this Lease shall be effective from and after the date of execution hereof. 
  
 2. RENT. Lessee shall pay Lessor rent for the use of the Equipment in the aggregate amounts specified in the Equipment
Schedule, and all other amounts payable pursuant to this Lease, without prior notice or demand (provided, however, that Lessor shall endeavor to provide to Lessee an invoice approximately twenty-five (25) days prior to the date such payments are
due) (such installments and other amounts, the “Rent”). Each Equipment Schedule constitutes a non-cancelable net lease, and Lessee’s obligation to pay Rent, and otherwise to perform its obligations under this Lease, each such
Equipment Schedule and all of the other documents and agreements entered into in connection herewith (collectively, the “Lease Documents”), are and shall be absolute and unconditional and shall not be affected by any right of setoff,
counterclaim, recoupment, deduction, defense or other right which Lessee may have against Lessor, the manufacturer or vendor of the Equipment (the “Suppliers”), or anyone else, for any reason whatsoever. Rent is payable as and when
specified in the Equipment Schedule by mailing the same to Lessor at its address specified pursuant to this Lease, or by such other method as may from time to time be directed by Lessor or its assignee in writing; and payments of Rent shall be
effective upon receipt. Time is of the essence. If any Rent is not paid on the due date, Lessor may collect, and Lessee agrees to pay, a charge (the “Late Charge”) calculated as the product of the late charge rate specified in the
Equipment Schedule (the “Late Charge Rate”) and the amount in arrears for the period such amount remains unpaid after the original due date. Lessor expressly acknowledges and agrees that nothing contained in this Section 2 shall constitute
a waiver by the Lessee of any of its rights under this Lease, the Equipment Schedule or any of the other Lease Documents or of its right to assert and sue upon any claims it may have against Lessor or any other Person in one or more separate actions
so long as such claims or actions in no way diminish or discharge Lessee’s obligation to pay rent, and otherwise to perform its obligations under the Lease Documents without any right of setoff, counterclaim, recoupment, deduction, or defense.

  
 3. REPRESENTATIONS AND WARRANTIES. (a) Representations and
Warranties of Lessee. Lessee represents and warrants that: (i) Lessee is a corporation duly organized and validly existing in good standing under the laws of the State of Tennessee. (ii) The execution, delivery and performance of this Lease, the
Equipment Schedule and all related instruments and documents: (A) have been duly authorized by all necessary corporate action on the part of Lessee; (B) do not require the approval of any stockholder, trustee or holder of any obligations of Lessee
except such as have been duly obtained; and (C) do not and will not contravene any law, governmental rule, 

 
regulation or order now binding on Lessee, or the charter or by-laws of Lessee, or contravene the provisions of, or constitute a default under, or result in
the creation of any lien or encumbrance upon the property of Lessee under, any indenture, mortgage, contract or other agreement to which Lessee is a party or by which it or its property is bound. (iii) This Lease, the Equipment Schedule and all
related instruments and documents, when entered into, will constitute legal, valid and binding obligations of Lessee enforceable against Lessee in accordance with the terms thereof, except as such enforceability may be limited by applicable
bankruptcy, insolvency, moratorium or similar laws affecting the rights of creditors generally, and except as such enforceability may be subject to the application of equitable principles, legal or equitable. (iv) There are no actions, suits or
proceedings pending to which Lessee is a party, and there are no other actions, suits or proceedings threatened of which Lessee has knowledge, before any court, arbitrator or administrative agency, which, either individually or in the aggregate have
a Material Adverse Effect. As used herein, “Material Adverse Effect” shall mean (1) a materially adverse effect on the business, condition (financial or otherwise), operations, performance or properties of Lessee, or (2) a material
impairment of the ability of Lessee to perform its obligations under or to remain in compliance with the Lease Documents. Further, to the best of its knowledge, Lessee is not in default under any obligation for the payment of borrowed money, for the
deferred purchase price of property or for the payment of any rent under any lease agreement which, either individually or in the aggregate, would have the same such effect. (v) The financial statements of Lessee (copies of which have been furnished
to Lessor) have been prepared in accordance with generally accepted accounting principles consistently applied (“GAAP”), and fairly present Lessee’s financial condition and the results of its operations as of the date of and for the
period covered by such statements, and since the date of such statements there has been no material adverse change in such conditions or operations. (vi) Lessee’s name, jurisdiction of organization, Federal Employer Identification Number and
Organizational Number specified below the signature of Lessee are true and correct, and the address stated below the signature of Lessee is the chief place of business and chief executive office of Lessee. 
  
 (b) Representations and Warranties of Lessor: Lessor represents and warrants:
(i) Lessor is a corporation duly organized and validly existing in good standing under the law of the State of Delaware. (ii) The execution, delivery and performance of the Lease Documents: (A) have been duly authorized by all necessary corporate
action on the part Lessor: (B) do not require the approval of any stockholder, trustee or holder of any obligations of Lessor except such as had been duly obtained. (iii) This Lease, the Equipment Schedule and all related instruments and documents,
when entered into, will constitute legal, valid and binding obligations of Lessor enforceable against Lessor in accordance with the terms thereof, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium or
similar laws affecting the rights of creditors generally, and except that such enforceability may be subject to the application of equitable principles in any proceeding, legal or equitable. 
  
 4. CONDITIONS PRECEDENT. Lessor’s obligations under each Equipment
Schedule, including its obligation to purchase and lease any Equipment to be leased thereunder, are conditioned upon satisfaction of the following conditions: 
  

(a) Lessor having received the following, in form and substance satisfactory to Lessor: (1) evidence as to due compliance with the insurance provisions
hereof; (2) UCC financing statements in respect of the Equipment; (3) a certificate of Lessee’s Assistant Secretary certifying: (i) resolutions of Lessee’s Board of Directors duly authorizing the leasing of the Equipment hereunder and the
execution, delivery and performance of the Lease Documents, and (ii) the incumbency and signature of the officers of Lessee authorized to execute such documents; (4) the only manually executed original of the Equipment Schedule and all other Lease
Documents; and (5) all purchase documents pertaining to the Equipment (collectively, the “Supply Contract”). 
  
 (b) All representations and warranties provided in favor of Lessor in any of the Lease Documents shall be true and correct on the effective date of such
Equipment Schedule with the same effect as though made as of such date (Lessee’s execution and delivery of the Equipment Schedule shall constitute an acknowledgment of the same). 
  
 (c) There shall be no Default or Event of Default under the Equipment Schedule or any other Lease Documents. The Equipment
shall have been delivered to and accepted by Lessee, and shall be in the condition and repair required hereby; and on the effective date of the Equipment Schedule, Lessor shall have received good title to the Equipment to be leased thereunder, free
and clear of any Lien or encumbrance of any kind. 
  
 5.
COVENANTS. Lessee covenants and agrees as follows: (a) Lessee will furnish Lessor (1) within one hundred twenty (120) days after the end of each fiscal year of Lessee, a balance sheet of Lessee as at the end of such 

 
year, and the related statement of income and statement of changes in financial position of Lessee for such fiscal year, prepared in accordance with GAAP,
all in reasonable detail and certified by independent certified public accountants of nationally recognized standing selected by Lessee (it being agreed that if Lessee files a Form 10-K with the Securities and Exchange Commission, that delivery of
such Form 10-K shall be deemed to satisfy the requirements of this Section 5(a)(1)); and (2) within sixty (60) days after the end of each quarter of Lessee’s fiscal year, a balance sheet of Lessee as at the end of such quarter, and the related
statement of income and statement of changes in financial position of Lessee for such quarter, prepared in accordance with GAAP (it being agreed that if Lessee files a Form 10-Q with the Securities and Exchange Commission, that delivery of such Form
10-Q shall be deemed to satisfy the requirements of this Section 5(a)(2)). (b) Lessee will duly execute and deliver to Lessor such further documents, instruments, assurances and other records and take such further action as Lessor may from time to
time reasonably request and as may be required in order to effectively carry out the intent and purpose of this Lease and to establish and protect the rights and remedies created or intended to be created in favor of Lessor under the Lease Documents
(including, without limitation, such UCC financing statements as reasonably may be required by Lessor in connection with any relocation of the Equipment in accordance with the terms hereof, if any). (c) Lessee shall provide written notice to Lessor:
(1) not less than thirty (30) days prior to any contemplated change in the name, the jurisdiction of organization, or address of the chief executive office, of Lessee; (2) promptly upon the occurrence of any Event of Default (as hereinafter defined)
or event which, with the lapse of time or the giving of notice, or both, would become an Event of Default (a “Default”); and (3) promptly upon Lessee becoming aware of any alleged violation of applicable law relating to the Equipment or
this Lease. 
  
 6. DELIVERY; INSPECTION AND ACCEPTANCE BY LESSEE.
Upon delivery, Lessee shall inspect the Equipment and, to the extent the Equipment conforms to the condition required by the applicable Supply Contract, accept the Equipment and shall execute and deliver to Lessor an Interim Equipment Schedule
containing a complete description of the item of Equipment accepted; whereupon, as between Lessor and Lessee, the same shall be deemed to have been finally accepted by Lessee pursuant to this Lease. If Lessee shall, for reasonable cause, refuse to
accept delivery of any item of the Equipment, Lessor shall assign to Lessee all rights under the Supply Contract and Lessee shall assume all obligations as purchaser of such item of Equipment. Upon completion of delivery of the Equipment to be
leased hereunder, Lessee shall execute and deliver to Lessor one or more Final Equipment Schedules which shall replace in their entirety the Interim Equipment Schedules. 
  
 7. DISCLAIMER OF WARRANTIES. LESSOR IS NOT A SELLER, SUPPLIER OR MANUFACTURER (AS SUCH TERMS ARE DEFINED OR USED, AS THE
CASE MAY BE, IN THE UCC), OR DEALER, NOR A SELLER’S OR A DEALER’S AGENT. THE EQUIPMENT IS LEASED HEREUNDER “AS IS”, AND LESSOR HAS NOT MADE, AND HEREBY DISCLAIMS LIABILITY FOR, AND LESSEE HEREBY WAIVES ALL RIGHTS AGAINST LESSOR
RELATING TO, ANY AND ALL WARRANTIES, REPRESENTATIONS OR OBLIGATIONS OF ANY KIND WITH RESPECT TO THE EQUIPMENT, EITHER EXPRESS OR IMPLIED, ARISING BY APPLICABLE LAW OR OTHERWISE, INCLUDING ANY OF THE SAME RELATING TO OR ARISING IN OR UNDER (a)
MERCHANTABILITY OR FITNESS FOR PARTICULAR USE OR PURPOSE, (b) COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OR TRADE, OR (c) TORT (WHETHER OR NOT ARISING FROM THE ACTUAL, IMPLIED OR IMPUTED NEGLIGENCE OF LESSOR OR STRICT LIABILITY) OR THE
UCC (INCLUDING ARTICLE 2A, AS HEREINAFTER DEFINED) OR OTHER APPLICABLE LAW WITH RESPECT TO THE EQUIPMENT, INCLUDING ITS TITLE OR FREEDOM FROM LIENS, FREEDOM FROM TRADEMARK, PATENT OR COPYRIGHT INFRINGEMENT, FREEDOM FROM LATENT DEFECTS (WHETHER OR
NOT DISCOVERABLE), CONDITION, MANUFACTURE, DESIGN, SERVICING OR COMPLIANCE WITH APPLICABLE LAW; it being agreed that all such risks, as between Lessor and Lessee, are to be borne by Lessee; and Lessor’s agreement to enter into this Lease and
any Equipment Schedule is in reliance upon the freedom from and complete negation of liability or responsibility for the matters waived and disclaimed herein. Lessor is not responsible for any direct, indirect, incidental or consequential damage to
or losses resulting from the installation, operation or use of the Equipment or any products manufactured thereby. All assignable warranties made by the Supplier to Lessor are hereby assigned to Lessee for and during the term of this Lease and
Lessee agrees to resolve all such claims directly with the Supplier. Lessor fully shall cooperate with Lessee with respect to the resolution of such claims, in good faith and by appropriate proceedings at Lessee’s expense. Any such claim shall
not affect in any manner the unconditional obligation of Lessee to make Rent payments hereunder. 
  
 8. USE AND MAINTENANCE. (a) Lessee shall: (1) have the unrestricted right to use the Equipment in its operations and to place the Equipment in an
interchange program within the United States, Mexico and Canada; 

 
(2) use the Equipment (or cause the Equipment to be used) in the conduct of its business, for the purpose for which the Equipment was designed, in a careful
and proper manner, and shall not permanently discontinue use of a substantial portion of the Equipment; (3) operate, maintain, service and repair the Equipment, and maintain (or shall cause the Equipment to be operated, maintained, serviced and
repaired, and shall cause to be maintained) all records and other materials relating thereto, (i) in accordance and consistent with (A) the requirements of all applicable insurance policies, (B) the Supply Contract, so as to preserve all of
Lessee’s and Lessor’s rights thereunder, including all rights to any warranties, indemnities or other rights or remedies, (C) the Institute of International Container Lessors (“IICL”) Standard 5, and in compliance with all
applicable laws, and (D) to no lesser standard than that employed by Lessee for comparable equipment owned or leased by it; and (ii) shall not discriminate against the Equipment with respect to scheduling of maintenance, parts or service; and (4)
not attach or incorporate the Equipment to or in any other item of equipment in such a manner that the Equipment may be deemed to have become an accession to or a part of such other item of equipment. (b) Within a reasonable time, Lessee will
replace any parts of the Equipment which become worn out, lost, destroyed, damaged beyond repair or otherwise permanently rendered unfit for use, by new or reconditioned replacement parts which are free and clear of all liens, encumbrances or rights
of others and have a value, utility and remaining useful life at least equal to the parts replaced. Any modification or addition to the Equipment which is required by law (a “Required Modification”) shall be made by Lessee, at its expense.
Lessee shall be permitted at any time to request that Lessor finance any Required Modification; provided that Lessor may, in its sole discretion, refuse such financing request of Lessee; provided further, however, that Lessor’s refusal to
finance any Required Modification shall in no way excuse Lessee’s performance of its obligations under this Lease. Title to all parts, improvements and additions to the Equipment immediately shall vest in Lessor, without cost or expense to
Lessor or any further action by any other Person, and such parts, improvements and additions shall be deemed incorporated in the Equipment and subject to the terms of this Lease as if originally leased hereunder, if such parts are required by law or
are otherwise essential to the operation of the Equipment or cannot be detached from the Equipment without materially interfering with the operation of the Equipment or adversely affecting the value, utility and remaining useful life which the
Equipment would have had without the addition thereof. Lessee shall not make any material alterations to the Equipment without the prior written consent of Lessor. (c) Upon forty-eight (48) hours’ notice, Lessee shall use its reasonable best
efforts to afford Lessor access to the premises where the Equipment is located for the purpose of inspecting such Equipment and all applicable maintenance or other records at any reasonable time during normal business hours, provided that such
inspection shall be at the sole risk of Lessor and shall be conducted in such a manner as to not disrupt the normal operation of the Equipment; provided, however, if a Default or Event of Default shall have occurred and then be continuing, no notice
of any inspection by Lessor shall be required. If any discrepancies are found as they pertain to the general condition of the Equipment, Lessor will communicate these discrepancies to Lessee in writing. Lessee shall then have thirty (30) days to
rectify these discrepancies at its sole expense. Lessee shall pay all expenses of a re-inspection by Lessor’s appointed representative, if corrective measures were required. (d) Lessee may cause the Equipment to be lettered with the names or
initials or other insignia customarily used by Lessee or any permitted sublessee of equipment used by it of the same or similar type. 
  
 9. FEES AND TAXES. (a) To the extent permitted by law, Lessee shall file any necessary report and return for, shall pay promptly when due, shall otherwise
be liable to reimburse Lessor (on an after-tax basis, taking into account all relevant, current, and future tax costs and benefits) for, and agrees to indemnify and hold Lessor harmless from: (1) all titling, filing, publication, recordation,
documentary stamp and other fees; and (2) taxes (other than taxes calculated solely on the basis of net income), assessments and all other charges or withholdings of any nature (together with any penalties, fines or interest thereon); relating to
the Equipment or this Lease or the delivery, acquisition, ownership, use, operation, substitution, leasing or subleasing of the Equipment, or upon the rentals payable hereunder, whether the same be assessed to Lessor or Lessee, provided that Lessee
shall not be required to pay, or to reimburse or indemnify Lessor for, any of the following: (i) any tax imposed on or with respect to or measured by the gross or net income, gross receipts, capital, net worth or franchise of Lessor or the conduct
of business by Lessor unless (A) such tax is a sales, use, rental, goods and services or similar tax, or (B) such tax is imposed by a jurisdiction outside the United States of America, or a jurisdiction within the United States of America in which
Lessor would not have otherwise been subject to tax, as the result of the use, operation or presence of any Equipment or any activity of Lessee, any permitted Sublessee or any other permitted user of any Equipment in such jurisdiction; (ii) any tax
imposed on or with respect to any sale, assignment, transfer or other disposition by Lessor of any interest in any Equipment or this Lease or any Equipment Schedule unless caused by an Event of Loss with respect to such Equipment or by an exercise
of remedies after the occurrence of a Default, or unless made at the request of Lessee; (iii) any tax imposed with respect to any Equipment for any period after the expiration or earlier 

 
termination of this Lease with respect to such Equipment and the return of such Equipment (if and as required by this Lease) to Lessor; (iv) any interest or
penalty resulting from the failure of Lessor to file any tax return or other tax document, or to pay any tax, in a timely and proper manner unless such failure results from the failure by Lessee to perform its obligations under this Lease; (v) any
tax to the extent such tax would not have been incurred but for, or is increased as a result of, (A) the gross negligence or willful misconduct of Lessor, (B) any sale-leaseback, loan, assignment of receivables or other transaction between Lessor
and a third party with respect to any Equipment, this Lease or any Equipment Schedule; and (vi) any United States federal withholding tax. Upon request, Lessor shall furnish to Lessee all documentation and other information reasonably necessary to
file such reports and returns and to pay the amount of such fees, taxes or other sums then due; provided, however, nothing contained herein shall require that Lessor deliver copies of tax returns or other information that it considers (in its sole
discretion) confidential; provided further, that to the extent such information which is not disclosed by Lessor after request from Lessee is reasonably necessary to permit Lessee to contest fees, taxes or other sums or to determine the amount of
the fees, taxes or other sums to be paid, if such information is not provided by Lessor to Lessee, Lessee shall not be required to indemnify Lessor for the amount of such fees, taxes or other sums. 
  
 (b) If any report, return or property listing, or any fee, tax or assessment
for which Lessee is required to indemnify Lessor pursuant to sub-part (a) hereof (“Imposition”) is, by law, required to be filed by, assessed or billed to, or paid by, Lessor, Lessee at its own expense will do all things required to be
done by Lessor (to the extent permitted by law) in connection therewith and is hereby authorized by Lessor to act on behalf of Lessor in all respects, including (but not limited to) the contest or protest, in good faith and by appropriate
proceedings, of the validity of any Imposition or of the amount thereof, and Lessor agrees to notify Lessee promptly in writing of Lessor’s receipt of any assessment, bill or other claim by any taxing authority for any such Imposition, provided
that (x) Lessor’s failure to provide such notice shall not relieve Lessee of its obligations under this Section 11 unless such failure precludes a contest of such Imposition, (y) Lessor will have the right to elect (by giving Lessee written
notice of such election together with Lessor’s notice of receipt of such claim) to control any contest of such Imposition that may result in any material unindemnified loss, cost or expense to Lessor, and (z) Lessee shall not be permitted to
contest any such claim unless the amount of the Imposition that is the subject of such claim (plus the amount of all other Impositions that may be asserted with respect to the Equipment in the same or any other tax period) exceeds Ten Thousand
Dollars ($10,000). Lessor agrees to cooperate with Lessee in any such contest unless such cooperation would cause any material unindemnified loss, cost or expense to Lessor, and Lessee agrees promptly to indemnify Lessor for all reasonable expenses
incurred by Lessor in the course of such cooperation. An Imposition shall be paid, subject to refund proceedings, if failure to pay would create a material danger of the sale, forfeiture or loss of the Equipment or any interest therein. If Lessor
obtains a refund of any Imposition which has been paid (by Lessee, or by Lessor and for which Lessor has been reimbursed by Lessee), Lessor shall promptly pay such refund to Lessee, provided that Lessor shall not be required to pay such refund to
Lessee if a Default is continuing unless and until such Default ceases to exist, provided further that the amount payable by Lessor under this sentence shall not exceed the amount paid by Lessee with respect to such Imposition. To the extent that
any tax liability of Lessor for which Lessee is not required to indemnify Lessor is reduced as a result of an Imposition which Lessee has paid or for which Lessee has indemnified Lessor, Lessor shall pay to Lessee the amount of such tax savings plus
the amount of any additional tax savings resulting from such payment, provided that (i) the amount payable by Lessor under this sentence shall not exceed the amount paid by Lessee with respect to such Imposition and (ii) Lessor shall not be required
to make any such payment if a Default has occurred and is continuing unless and until such Default ceases to exist. Lessee shall indemnify Lessor for any refund or tax saving paid by Lessor to Lessee which subsequently becomes disallowed or
recaptured. Lessee will cause all billings of such charges to Lessor to be made to Lessor in care of Lessee (to the extent permitted by applicable law) and will, in preparing any report or return required by law with respect to any Imposition (to
the extent permitted on such report or return), show the ownership of the Equipment in Lessor, and shall send a copy of any such report or return to Lessor. If Lessee fails to pay any such Impositions when due, except any Imposition being contested
in good faith and by appropriate proceedings as above provided for a reasonable period of time, Lessor at its option may do so, in which event the amount so paid (including any penalty or interest incurred as a result of Lessee’s failure), plus
interest thereon at the Late Charge Rate shall be paid by Lessee to Lessor with the next periodic payment of rent. (c) As used herein, the term “Lessor” shall mean and include Lessor and the consolidated Federal taxpayer group of which
Lessor is a member; Lessor shall cause each entity that is directly or indirectly in control of, is controlled by, or is under common control with, Lessor (an “Affiliate”) to comply with the obligations of “Lessor” under this
Section 9. At Lessee’s written request, Lessor’s calculation of an indemnity payment under this Section 9 which is at least Fifty Thousand Dollars ($50,000) shall be submitted to a nationally recognized public accounting firm selected by
Lessor reasonably acceptable to Lessee to verify the accuracy of 

 
Lessor’s calculations. If Lessee pays an indemnity payment before completion of such review, appropriate adjustments will be made after completion of
the review to take into account any redetermination of such indemnity made by the accounting firm. Lessee shall pay the fees and expenses charged by the accounting firm for such review unless such an accounting firm concludes that the indemnity
payment calculated by Lessor exceeds the indemnity payment properly due by an amount exceeding 10% of the indemnity payment calculated by Lessor. 
  
 10. INTENT, TITLE AND LIENS. (a) The parties intend and agree that the Equipment shall remain personal property, and that Lessor’s title thereto not
be impaired, notwithstanding the manner in which it may be affixed to any real property. (b) It is the express intention of the parties hereto that (1) each Equipment Schedule, incorporating by reference the terms of this Lease, constitutes a true
“lease” and a “finance lease” as such terms are defined in the UCC Article 2A—Leases (“Article 2A”) and not a sale or retention of a security interest; and (2) title to the Equipment shall at all times remain in
Lessor, and Lessee shall acquire no ownership, property, rights, equity, or interest other than a leasehold interest, solely as Lessee subject to the terms and conditions hereof. If, notwithstanding the express intent of the parties, a court of
competent jurisdiction determines that any Equipment Schedule is not a true lease, but is rather a sale and extension of credit, a lease intended for security, a loan secured by the Equipment specified in such Equipment Schedule, or other similar
arrangement, the parties agree that in such event: (i) (A) in order to secure the prompt payment and performance as and when due of all of Lessee’s obligations (both now existing and hereafter arising) hereunder and under each such Equipment
Schedule, Lessee shall be deemed to have granted, and it hereby grants, to Lessor a first priority security interest in the following (whether now existing or hereafter created): the Equipment leased pursuant to such Equipment Schedule and all
replacements, substitutions, accessions, and proceeds (cash and non-cash), including the proceeds of all insurance policies, thereof, and (B) Lessee agrees that with respect to the Equipment, in addition to all of the other rights and remedies
available to Lessor hereunder upon the occurrence of an Event of Default, Lessor shall have all of the rights and remedies of a first priority secured party under the Uniform Commercial Code, as the same may be in effect in any applicable
jurisdiction (“UCC”). For purposes of this sub-part (b), this Lease, the Equipment Schedule, or a photocopy of either thereof may be filed as a financing statement under the UCC. Lessee hereby acknowledges and agrees that, to the extent
that Lessor’s participation in any purchase and lease of an item or items of Equipment pursuant to this Lease constitutes a financing of Lessee’s acquisition of such item or items of Equipment, Lessee’s repayment of the amounts of
such financing shall apply on a “first-in/first-out” basis so that portions of the amounts of such financing used to purchase such item or items of Equipment shall be deemed repaid in the chronological order of the use of such amounts to
purchase the same. (c) Lessee further agrees to maintain the Equipment free from all claims, liens, attachments, rights of others and legal processes (“Liens”) of creditors of Lessee or any other Persons, other than Liens for: (1) fees,
taxes, levies, duties or other governmental charges of any kind, Liens of mechanics, materialmen, laborers, employees or suppliers and similar Liens arising by operation of law incurred by Lessee in the ordinary course of business for sums that are
not yet delinquent or are being contested in good faith by negotiations or by appropriate proceedings which suspend the collection thereof (provided, however, that such proceedings do not involve any substantial danger (as determined in
Lessor’s sole reasonable discretion) of the sale, forfeiture or loss of the Equipment or any interest therein); (2) Liens arising out of any judgments or awards against Lessee with respect to which a stay of execution has been obtained pending
an appeal or proceeding for review; (3) Liens for taxes of Lessor for which Lessee has no indemnification obligation pursuant to this Lease; and (4) Liens created by or through Lessor (such Liens in clauses (1) and (4) being hereinafter referred to
as “Permitted Liens”). Lessee will defend, at its own cost and expense, Lessor’s title to the Equipment from such claims, Liens or legal processes (other than Permitted Liens). Lessee shall also notify Lessor promptly upon receipt of
notice of any Lien (other than Permitted Liens) affecting the Equipment in whole or in part. 

 11. LOSS, DESTRUCTION, REQUISITION, ETC. 
  
 (a) Lessee hereby assumes the risk of direct and consequential loss and damage to the Equipment. Except as otherwise
provided herein, no loss or damage to the Equipment or any part thereof shall release or impair any obligations of Lessee under this Lease. Lessee agrees that Lessor shall not incur any liability to Lessee for any loss of business, loss of profits,
expenses, or any other damages resulting to Lessee by reason of any failure of or delay in delivery or any delay caused by any non-performance, defective performance, or breakdown of the Equipment, nor shall Lessor at any time be responsible for
personal injury or the loss or destruction of any other property resulting from the Equipment. In the event of loss or damage to any Equipment which does not constitute an Event of Loss (as hereinafter defined), Lessee shall, at its sole cost and
expense, promptly repair and restore such Equipment to the condition required by this Lease. Provided that Lessee is not then in Default, upon receipt of evidence reasonably satisfactory to Lessor of completion of such repairs, Lessor will apply any
insurance proceeds received by Lessor on account of such loss to the cost of repairs. 
  
 (b) In the event that any Equipment (i) shall suffer destruction, damage, contamination or wear which, in Lessee’s good faith opinion, makes repair uneconomic or renders such Equipment unfit for commercial use,
(ii) shall suffer theft or disappearance, (iii) shall be permanently returned to the manufacturer pursuant to any patent indemnity provisions, (iv) shall have title thereto taken or appropriated by any governmental authority under the power of
eminent domain or otherwise, (v) shall be taken or requisitioned for use by any governmental authority (other than the United States government or any agency or instrumentality thereof) under the power of eminent domain or otherwise, (vi) shall be
taken or requisitioned for use by the United States government or any agency or instrumentality thereof and such taking or requisition is continuing on the last day of the term of this Lease or (vii) shall become obsolete or not usable for the
purposes for which it was placed in service (any such occurrence being hereinafter called an “Event of Loss”), Lessee, in accordance with the provisions hereof, shall promptly and fully inform Lessor of such Event of Loss. 
  
 (c) Upon the occurrence of an Event of Loss with respect to any Equipment,
Lessee shall within thirty (30) days thereafter notify Lessor of such Event of Loss and of its election to perform one of the following options (it being agreed that if Lessee shall not have given notice of said election within said thirty (30) day
period, or if providing Replacement Equipment (as hereinafter defined) could cause adverse tax consequences to Lessor, Lessee shall be deemed to have elected to perform the option set forth in the following paragraph (ii)): 
  
 (i) as promptly as practicable, and in any event on or
before the Business Day (as hereinafter defined) next preceding the sixtieth (60th) day next following the date of such notice, in replacement for such Equipment, Lessee shall convey or cause to be conveyed to Lessor equipment (“Replacement
Equipment”) to be leased to Lessee hereunder, such Replacement Equipment to be free and clear of all Liens (other than Permitted Liens), to be of a similar make and model to the Equipment so replaced and to have a fair market value, utility and
remaining useful life at least equal to the Equipment so replaced (assuming such Equipment was in the condition required to be maintained by the terms of this Lease); provided that, if Lessee shall not perform its obligation to effect such
replacement under this paragraph (i) during the period of time provided herein, then Lessee shall pay on the next succeeding date for the payment of rent to Lessor the amounts specified in paragraph (ii) below; provided, further that, if Lessee is
diligently undertaking to convey such Replacement Equipment but is unable to do so within the allotted time due to circumstances beyond its control, then Lessee shall not be required to make the payments specified in paragraph (ii) below so long as
it (A) provides Lessor written notice within forty-five (45) days of such notice of Event of Loss that Lessee will be unable to convey Replacement Equipment within sixty (60) days of such notice of Event of Loss, and (B) Lessee pays the Stipulated
Loss Value of such Equipment having suffered the Event of Loss as a deposit to Lessor, which deposit shall be applied against the purchase of such Equipment, which amount shall be payable on the ninetieth (90th) day following the date of such notice if no Replacement Equipment has been delivered by such date; or 
  
 (ii) on the next succeeding date for the payment of rent
that is at least sixty (60) days after the date of notice of such Event of Loss or deemed Event of Loss, Lessee shall pay or cause to be paid on such rent payment date to Lessor (A) an amount equal to the Stipulated Loss Value of each such item of
Equipment, determined as of such rent payment date, (B) all rent payable on such date in respect of such item of 

 
Equipment, and (C) all other sums then due and payable hereunder, it being understood that until such Stipulated Loss Value is paid, there shall be no
abatement or reduction of rent. 
  
 (d) Upon the sale or
replacement of any Equipment in compliance with this Section 11 or upon the payment of all sums required to be paid pursuant hereto in respect of any Equipment for which Lessee has elected to pay or is deemed to have elected to pay the amounts
specified above, the term of this Lease with respect to such Equipment and the obligation to pay rent for such Equipment accruing subsequent to the date of payment of the Stipulated Loss Value pursuant to the terms hereof shall terminate; provided
that Lessee shall be obligated to pay all rent in respect of such Equipment which has accrued up to and including the date of payment of the Stipulated Loss Value. Upon the payment of all sums required to be paid pursuant hereto in respect of any
Equipment, Lessor will convey to Lessee or its designee all right, title and interest of Lessor in and to such Equipment, “AS IS”, “WHERE IS”, without recourse or warranty other than a warranty that whatever title to such
Equipment was originally conveyed to Lessor has been conveyed to Lessee, free and clear of any Liens created by or through Lessor, and shall execute and deliver to Lessee or its designee such bill(s) of sale and other documents and instruments as
Lessee or its designee reasonably may request to evidence such conveyance. As to each Equipment so disposed of, Lessee or its designee shall be entitled to any amounts arising from such disposition, plus any awards, insurance or other proceeds and
damages (including any Uniform Intermodal Interchange Association settlement or settlement under any rail transportation service agreement paid upon an Event of Loss) received by Lessee or Lessor by reason of such Event of Loss after having paid the
Stipulated Loss Value attributable thereto; provided, however, that, with respect to any Event of Loss referred to in clauses (v) and (vi) of sub-part (b) above, any excess of such condemnation awards over the amount of the Stipulated Loss Value of
such Equipment shall be paid to Lessee so long as the result of such condemnation was not directly or proximately caused by Lessee’s neglect, in which such case, any excess of such condemnation awards over the amount of the Stipulated Loss
Value of such Equipment shall be paid to Lessor. At the time of or prior to any replacement of any Equipment, Lessee, at its own cost and expense, will (A) furnish Lessor with a bill of sale and an assignment of warranties with respect to the
Replacement Equipment, (B) execute and deliver to Lessor an amendment in form and substance acceptable to Lessor, subjecting such Replacement Equipment to this Lease, and duly executed by Lessee, to be delivered to Lessor for execution and, upon
such execution and to the extent required by Lessor, to be filed for recordation in the same manner as provided for the original Lease, (C) furnish Lessor with copies of all filings made that are necessary or appropriate to perfect and protect
Lessor’s interests in the Replacement Equipment, and (D) furnish Lessor with a certificate of a qualified engineer (who may be the system chief mechanical officer of Lessee) certifying that the Replacement Equipment has a fair market value,
utility and remaining useful life at least equal to the Equipment so replaced (assuming such Equipment was in the condition required to be maintained by the terms of this Lease) and setting forth a reasonable basis for such conclusion in reasonable
detail. For all purposes hereof, upon passage of title thereto to Lessor, the Replacement Equipment shall be deemed part of the property leased hereunder and the Replacement Equipment shall be deemed an item of the “Equipment” as defined.
Upon such passage of title, Lessor will transfer to Lessee, without recourse or warranty other than a warranty that title to such Equipment has been conveyed to Lessee, free and clear of any Liens created by or through Lessor, all Lessor’s
right, title and interest in and to the replaced Equipment. 
  
 (e) In the event that during the term of this Lease the use of any Equipment is requisitioned or taken by any governmental authority under the power of eminent domain or otherwise for a period which does not constitute an Event of Loss,
Lessee’s obligation to pay all installments of rent shall continue for the duration of such requisitioning or taking. Lessee shall be entitled to receive and retain for its own account all sums payable for any such period by such governmental
authority as compensation for requisition or taking of possession. Any amount referred to herein which is payable to Lessee shall not be paid to Lessee, or if it has previously been paid directly to Lessee, shall not be retained by Lessee, if at the
time of such payment a Default shall have occurred and be continuing, but shall be paid to and held by Lessor as security for the obligations of Lessee under this Lease, and at such time as there shall not be continuing any such Default, such amount
shall be paid to Lessee. 
  
 (f) As used in this Lease,
“Stipulated Loss Value” shall mean as of any rent payment date the product of the Total Cost of each item of Equipment (as specified on the applicable Equipment Schedule) and the applicable percentage factor for such rent payment date set
forth on the Equipment Schedule of Stipulated Loss Values attached to the Equipment Schedule. After payment of the final payment of rent due under the term of this Lease, Stipulated Loss Value shall be determined as of the date of termination of
this Lease, after payment of any rent due on such date, and the applicable percentage factor shall be the last percentage factor set forth on the Equipment Schedule of Stipulated Loss Values. 

 12. INSURANCE. Lessee shall obtain and maintain during the Term all-risk insurance coverage with respect
to the Equipment insuring against, among other things: casualty, including loss or damage due to fire and the risks normally included in extended coverage, malicious mischief and vandalism, for not less than the Stipulated Loss Value; and commercial
liability, including both bodily injury and property damage with a combined single limit per occurrence of not less than the amount specified in the Equipment Schedule, having a deductible or self-assumption of risk hereunder reasonably satisfactory
to Lessor. All said insurance shall be in form (including all endorsements required by Lessor) and amount and with companies reasonably satisfactory to Lessor. All insurance for loss or damage shall provide that losses, if any, shall be used to
repair or replace the Equipment as required under Section 11 hereof and Lessee shall utilize its best efforts to have all checks relating to any such losses delivered promptly to Lessor. Lessor shall be named as an additional insured with respect to
all such liability insurance. Lessee shall pay the premiums therefor and deliver to Lessor evidence satisfactory to Lessor of such insurance coverage. Lessee shall cause to be provided to Lessor, prior to the scheduled expiration or lapse of such
insurance coverage, evidence satisfactory to Lessor of renewal or replacement coverage. Each insurer shall agree, by endorsement upon the policy or policies issued by it or by independent instrument furnished to Lessor, that (a) it will give Lessor
thirty (30) days’ prior written notice of the effective date of any cancellation of such policy; and (b) with respect to property damage insurance as to the interest of any loss payee other than Lessee shall not be invalidated by any actions,
inactions, breach of warranty or conditions or negligence of Lessee, Lessee’s agents or third party contractors of Lessee with respect to such policy or policies. The proceeds of such insurance payable as a result of loss of or damage to the
Equipment shall be applied as required by the provisions of Section 11 hereof.  
  
 13. REDELIVERY. Lessee shall provide written notice to Lessor not less than one hundred eighty (180) days and not more than two hundred forty (240) days prior to the expiration of the term of any Equipment Schedule
(or of any renewal thereof, if applicable) of Lessee’s intent to return the Equipment to Lessor upon the expiration of the term of such Equipment Schedule. Upon the expiration or earlier termination of the term of any Equipment Schedule (or of
any renewal thereof, if applicable), Lessee shall redeliver the Equipment in accordance with Rider No. 2 attached hereto. Lessor may, in its sole discretion, cause the Equipment to be inspected by an inspector selected by Lessor at least sixty (60)
days prior to the scheduled return or storage of the Equipment, and, if Lessor causes such inspection, Lessor promptly shall provide Lessee with such inspector’s written report identifying those repairs necessary to put the Equipment in the
condition required by this Lease. Lessee may complete such repairs prior to the return or storage of the Equipment. If Lessee does not so repair, Lessee agrees to pay the cost of such repairs and further agrees to pay Lessor rent for the period of
time reasonably necessary to accomplish such repairs based on a daily pro-rated amount of the previously prevailing rent. Lessor’s acceptance of such rent on account of such delay or repair does not constitute a renewal of the term of this
Lease or a waiver of Lessor’s right to prompt return of such Equipment in proper condition. 
  
 14. INDEMNITY. (a) General. Lessee assumes and agrees to indemnify, defend and keep harmless Lessor, and any assignee of Lessor’s rights,
obligations, title or interests under any Equipment Schedule, its Affiliates and their agents and employees (“Indemnitees”), from and against any and all Claims (other than such as may directly and proximately result from the gross
negligence or willful misconduct of such Indemnitees), by paying (on an after-tax basis taking into account all relevant, current, and future costs and benefits) or otherwise discharging same, when and as such Claims shall become due. Lessor shall
give Lessee prompt notice of any Claim hereby indemnified against, provided that Lessor’s failure to provide such notice shall not preclude Lessee’s obligation to indemnify for any Claim so long as such failure does not materially
prejudice Lessee. Lessee shall be entitled to control the defense thereof, so long as no Default has occurred and is then continuing and so long as there is no conflict of interest between Lessor and Lessee which, in Lessor’s reasonable
judgment, makes it inadvisable for Lessee to control the defense thereof. Lessor shall have the right to retain separate counsel to represent it in connection with any claim at its own expense, provided that if Lessor shall have retained such
counsel as a result of a conflict of interest which would preclude Lessee and Lessor from being represented by the same counsel, the fees and expenses of such counsel shall be indemnified by Lessee hereunder. Lessor agrees that it will cooperate (at
Lessee’s expense) with all reasonable requests of Lessee in the defense of any action to which Lessor is entitled to indemnification and defense hereunder. For the purposes of this Lease, the term “Claims” shall mean all claims,
allegations, harms, judgments, good faith settlements entered into, suits, actions, debts, obligations, damages (whether incidental, consequential or direct), demands (for compensation, indemnification, reimbursement or otherwise), losses,
penalties, fines, liabilities (including strict liability), charges that Lessor has incurred or for which it is responsible, in the nature of interest, Liens, and costs (including attorneys’ fees and disbursements and any other legal or
non-legal expenses of 

 
investigation or defense of any Claim, whether or not such Claim is ultimately defeated or enforcing the rights, remedies or indemnities provided for
hereunder, or otherwise available at law or equity to Lessor), of whatever kind or nature, contingent or otherwise, matured or unmatured, foreseeable or unforeseeable, by or against any Person, arising on account of (a) any Lease Document, or (b)
the Equipment, or any part thereof, including the ordering, acquisition, delivery, installation or rejection of the Equipment, the possession, maintenance, use, condition, ownership or operation of any Equipment, and by whomsoever owned, used or
operated, during the term of any Equipment Schedule with respect to that Equipment, the existence of latent and other defects (whether or not discoverable by Lessor or Lessee), any claim in tort for negligence or strict liability, any claim for
patent, trademark or copyright infringement, and any Environmental Claim or Environmental Loss (as such terms are hereinafter defined), or the loss, damage, destruction, removal, return, surrender, sale or other disposition of the Equipment, or any
item thereof. Notwithstanding the foregoing, Lessee shall not have any obligation for any Claim to the extent that such Claim results from (i) the willful misconduct or gross negligence of the party or entity seeking indemnification, (ii) the
incorrectness or inaccuracy of any representation made by the party or entity seeking indemnification hereunder, (iii) any taxes other than as provided in Section 14(b) (taxes being the subject of a separate indemnity in Section 14(b)), (iv) any
Claims attributable to a Lien created by or through Lessor, (v) any Claims resulting from an assignment by Lessor pursuant to Section 18 (except an assignment in connection with the exercise by Lessor of its remedies in Section 16) following a
Default or (vi) Claims arising in connection with any Equipment after such Equipment have been returned by Lessee to Lessor in the condition required by Section 13 following the expiration or early termination of the term for such Equipment;
provided, however, nothing contained herein shall relieve Lessee of its obligation to indemnify the Indemnitees for Claims which relate to or arise out of facts or conditions giving rise to any Claim which occurred or were in existence prior to such
return. 
  
 (b) Tax. (1) Lessee represents, warrants and
covenants that: (A) Lessee (i) shall use the Equipment, or cause the Equipment to be used, either (x) within the United States or (y) “in the transportation of property to and from the United States” within the meaning of Section
168(g)(4)(E) of the Internal Revenue Code of 1986, as amended from time to time (the “Code”), and (ii) shall maintain records to demonstrate that the Equipment is used in accordance with subclause (i) during each calendar year during the
term of this Lease (which records shall be made available to Lessor as and when reasonably requested by Lessor); and (B) the Equipment is, and will be used by Lessee so as to remain, property eligible for the MACRS Deductions (as defined below).

  
 (2) If(A) by reason of (i) any act or failure to act of Lessee
(including a breach of any covenant of Lessee set forth herein), or (ii) the misrepresentation of or breach by Lessee of any of the warranties and representations set forth in subpart (b)(1) of this Section, Lessor in computing its taxable income or
liability for tax, shall lose, or shall not have, or shall lose the right to claim or there shall be disallowed or recaptured for Federal and/or state income tax purposes, in whole or in part, the benefit of MACRS Deductions; or (B) Lessor shall
become liable for additional tax as a result of Lessee having replaced any Equipment pursuant to the terms of this Lease, or having added an attachment or made an alteration to the Equipment, including (without limitation) any such attachment or
alteration which would increase the productivity or capability of the Equipment so as to violate the provisions of Rev. Proc. 2001-28, 2001-19 I.R.B. 1156 (as it may hereafter be modified or superseded); or (C) Lessor shall be entitled to claim a
lesser credit for foreign taxes against its Federal income tax liability for any taxable year than that to which Lessor would have been entitled if each item of income, gain, loss and deduction with respect to the Equipment had been treated as
income from sources within the United States pursuant to Section 861 of the Code; hereinafter referred to as a “Loss”; then Lessee shall pay Lessor the Tax Indemnification Payment as additional rent and Lessor shall revise the Equipment
Schedule(s) of Stipulated Loss Values to reflect the Loss. As used herein, “MACRS Deductions” shall mean the deductions under Section 167 of the Code, determined in accordance with the modified Accelerated Cost Recovery System with respect
to the Total Cost of any item of the Equipment using the accelerated method set forth in Section 168(b)(1) or 168(b)(2) of the Code as in effect on the date of this Lease for property assigned to the 5-year class of property and taking into account
the special depreciation allowance and basis adjustment under Section 168(k)(1) of the Code; “Lessor” shall be deemed to include the consolidated Federal taxpayer group of which Lessor or any Assignee (as applicable) is a member; and
“Tax Indemnification Payment” shall mean such amount as, after consideration of (i) all taxes required to be paid by Lessor in respect of the receipt thereof under the laws of any governmental or taxing authority in the United States, and
(ii) the amount of any interest or penalty which may be payable by Lessor in connection with the Loss, shall be required to cause Lessor’s after-tax net return, calculated using the same assumptions used by Lessor to calculate the rent
specified for the affected Equipment on the date of the Equipment Schedule in which such Equipment are listed except to the extent that the Loss changes (or any prior Loss changed) any of those assumptions (the “Net Return”) to be equal
to, but no greater 

 
than, the Net Return computed consistently with current tax laws (and with the assumption that Lessor is taxed at the highest marginal Federal and state tax
rates) as of the date of this Lease that would have been available to Lessor had the Loss not occurred. 
  
 (3) Lessor shall be responsible for, and shall not be entitled to a Tax Indemnification Payment by Lessee on account of, any Loss to the extent arising as
a result of the occurrence of any one or more of the following events: (a) the failure of Lessor to timely and properly claim MACRS Deductions in the tax return of Lessor unless in the reasonable opinion of Lessor’s tax counsel there is no
reasonable basis for such claim (a copy of which written opinion shall have been received by Lessee at least thirty (30) days before the filing of the return on which Lessor failed to claim such MACRS Deductions); or (b) the failure of Lessor to
have sufficient taxable income before application of the MACRS Deductions to offset the full amount of such MACRS Deductions; or (c) any event which by the terms of this Lease requires payment by Lessee of the Stipulated Loss Value if such payment
is thereafter actually made to Lessor; or (d) a sale of any item of the Equipment or this Lease by Lessor unless in connection with an exercise of remedies after the occurrence of a Default. 
  
 (4) Lessor promptly shall notify Lessee in writing of such Loss (provided
that Lessor’s failure to provide such notice shall not affect Lessee’s obligation to indemnify Lessor unless such failure precludes a contest of such Loss) and Lessee shall pay to Lessor the Tax Indemnification Payment within thirty (30)
days after the latest of the following dates: (i) the date on which Lessor gives Lessee such notice of the occurrence of such Loss (which notice shall include a description in reasonable detail of such Loss and the calculation of the Tax
Indemnification Payment requested by Lessor), (ii) the date on which Lessor files its federal income tax return, or makes a payment of estimated tax, in which such Loss is taken into account, and (iii) if Lessee has requested that such Loss be
contested pursuant to Section 14(b)(5), the date of the final determination of such contest. For these purposes, a Loss shall occur upon the earliest of: (A) the happening of any event (such as disposition or change in use of any of the Equipment)
which will cause such Loss, (B) the payment by Lessor to the Internal Revenue Service or state taxing authority of the tax increase (including an increase in estimated taxes) resulting from such Loss; (C) the date on which the Loss is realized by
Lessor; or (D) the adjustment of the tax return of Lessor to reflect such Loss. 
  
 (5) If Lessor receives from the Internal Revenue Service a written notice of a proposed adjustment or notice of deficiency which, if accepted by Lessor, would result in a Loss (a “Tax Claim”), Lessor shall
send a copy of such notice (or the portion thereof relating to such Loss) to Lessee within thirty (30) days after receiving such notice. Provided that no Default has occurred and is continuing, if Lessee so requests in writing within thirty (30)
days after Lessee receives such written notice, accompanied by a written opinion of independent tax counsel selected by Lessee and reasonably acceptable to Lessor (“Tax Counsel”) to the effect that there is a reasonable basis (within the
meaning of ABA Formal Opinion 85-352) for contesting such Tax Claim, and discussing the authority in support of such opinion, Lessor shall in good faith contest such Tax Claim in appropriate administrative and/or judicial proceedings so long as the
amount of such Tax Claim, together with any similar Tax Claim that may be made with respect to the Equipment, is greater than One Hundred Thousand Dollars ($100,000) and Lessee acknowledges in writing its obligation to indemnify for such Loss unless
the final determination of the contest demonstrates that Lessee is not required by this Section 14(b) to indemnify Lessor for such Loss (including all available appeals requested by Lessee in writing, and, in the case of an appeal of an adverse
court decision, accompanied by a written opinion of Tax Counsel to the effect that there is a meritorious basis for appeal, but provided that Lessor shall not be required to seek Supreme Court review of an adverse decision). Lessor shall control all
aspects of the contest, considering in good faith any suggestions made by Lessee. Lessee shall pay all reasonable professional fees and other reasonable out-of-pocket expenses incurred by Lessor to contest such Tax Claim. Lessor may refuse to
conduct a contest otherwise required under this Section 14(b)(5), or may settle any Tax Claim that Lessee has requested Lessor to contest without the prior written consent of Lessee, provided that in such event Lessee shall be relieved of its
obligation under this Section 14(b) to pay Lessor any Tax Indemnification Payment for any Loss that was the subject of such Tax Claim or for any related Loss in any other taxable year to the extent that such settlement materially adversely affects a
contest of such related Loss. 
  
 (6) To the extent Lessor obtains
a refund of any tax, penalty, addition to tax and/or interest for which Lessee has indemnified Lessor, Lessor shall pay to Lessee the amount of such refund plus the amount of any interest received by Lessor with respect to such refund, plus the
amount of any Lessor tax saving resulting from such payment, provided that (i) the amount payable by Lessor under this Section 14(b)(6) (excluding the amount thereof, if any, representing interest received by Lessor with respect to such refund)
shall not exceed the amount paid by Lessee 

 
with respect to such Loss, and (ii) Lessor shall not be required to pay such refund if a Default is continuing unless and until such Default ceases to exist.

  
 (7) To the extent that the income tax liability of Lessor with
respect to any taxable year is reduced as a result of a Loss for which Lessee paid a Tax Indemnification Payment to Lessor, Lessor shall pay to Lessee the amount of such tax saving plus the amount of any additional Lessor tax saving resulting from
such payment, provided that (i) the amount payable by Lessor under this Section 14(b)(7) shall not exceed the amount paid by Lessee with respect to such Loss, and (ii) Lessor shall not be required to make any such payment if a Default has occurred
and is continuing unless and until such Default ceases to exist. Lessee shall indemnify Lessor for any refund or tax saving paid by Lessor to Lessee which subsequently becomes disallowed or recaptured. 
  
 (8) Lessor shall cause each of its Affiliates to comply with the obligations
of “Lessor” under this Section 14. 
  
 (9) At
Lessee’s written request, Lessor’s calculation of a Tax Indemnification Payment which is at least Fifty Thousand Dollars ($50,000) shall be submitted to a nationally recognized public accounting firm selected by Lessor and reasonably
acceptable to Lessee to verify the accuracy of Lessor’s calculations. If Lessee pays a Tax Indemnification Payment before completion of such review, appropriate adjustments will be made after completion of the review to take into account any
redetermination of such Tax Indemnification Payment by the accounting firm. Lessee shall pay the fees and expenses charged by the accounting firm for such review unless such accounting firm concludes that the Tax Indemnification Payment calculated
by the Lessor exceeds the Tax Indemnification Payment properly due by an amount exceeding ten (10) percent of the Tax Indemnification Payment calculated by Lessor. 
  
 (c) The obligations of Lessee and Lessor under this Section, which accrue during the term of this Lease, shall survive the
expiration or termination of this Lease. 
  
 15. DEFAULT. (a)
Lessee shall be deemed to be in default hereunder and under an Equipment Schedule upon the occurrence of any of the following (each, an “Event of Default”): (1) Lessee shall fail to make any payment of Rent hereunder or under an Equipment
Schedule as and when due and such failure shall continue unremedied for a period of five (5) days after written notice thereof to Lessee by Lessor; or (2) Lessee shall fail to obtain and maintain the insurance required herein; or (3) Lessee shall
fail to perform or observe any other covenant, condition or agreement to be performed or observed by it under any Lease Document (other than any covenant or agreement in Section 14(b)(i) of this Lease, it being agreed that the Tax Indemnification
Payment shall be Lessor’s sole remedy for any failure to perform or observe any such covenant or agreement of this Lease) and such failure shall continue unremedied for a period of thirty (30) days after written notice thereof to Lessee by
Lessor (unless such failure is not curable within such thirty (30) days, and Lessee is diligently pursuing a cure, in which case Lessee shall have ninety (90) days to effect such cure); or (4) Lessee shall (i) not pay its debts generally as they
become due; or (ii) take action for the purpose of invoking the protection of any bankruptcy or insolvency law, or any such law is invoked against or with respect to Lessee or its property, and any such petition filed against Lessee is not dismissed
within ninety (90) days; or (5) Lessee shall make or permit any unauthorized Lien (other than a Permitted Lien) against, or assignment or transfer of, this Lease, an Equipment Schedule, the Equipment, or any interest therein; or (6) any certificate,
statement, representation, warranty or audit contained herein (except in respect of Section 14(b)(i) of this Lease, it being agreed that the Tax Indemnification Payment shall be Lessor’s sole remedy in connection with any such certificate,
statement, representation, warranty or audit) or heretofore or hereafter furnished with respect hereto by or on behalf of Lessee proving to have been false in any material respect at the time as of which the facts therein set forth were stated or
certified, or having omitted any material contingent or unliquidated liability or claim against Lessee; or (7) Lessee shall be in default under any (i) loan, lease, guaranty, installment sale or other financing agreement or financing contract, of
which Lessor, or any of its Affiliates, is a party or beneficiary, involving amounts owed in the aggregate in excess of Ten Million Dollars ($10,000,000), or (ii) material obligation for the payment of borrowed money, for the deferred purchase price
of property or any payment under any lease agreement, involving amounts owed in the aggregate in excess of Ten Million Dollars ($10,000,000), and such default shall have been declared and not yet cured; or (8) Lessee shall have terminated its
corporate existence, consolidated with, merged into, or conveyed or leased substantially all of its assets as an entirety to any Person (such actions under this Section 15(a)(8) being referred to as an “Event”), unless immediately prior to
such Event: (A) such Person executes and delivers to Lessor an agreement satisfactory in form and substance to Lessor, in its reasonable discretion, containing such Person’s effective assumption, and its agreement to pay, perform, comply with
and otherwise be liable for, in due and punctual manner, 

 
all of Lessee’s obligations having previously arisen, or thereafter arising, under any Lease Document; and (B)(1) such Person or the new entity has a
Net Worth equal to or greater than Lessee’s Net Worth as of December 31, 2002, as published in Lessee’s 10-K as filed with the Securities and Exchange Commission and has a credit rating from Standard & Poor’s Ratings Group, a
Division of McGraw-Hill, Inc. (“Standard & Poor’s”) equal to or better than BB-; or (2) such Person or the new entity has a Net Worth of at least Twenty-five Million Dollars ($25,000,000) greater than Lessee’s Net Worth as of
December 31, 2002, as published in Lessee’s 10-K as filed with the Securities and Exchange Commission; or (9) Lessee is no longer subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or no longer registered
under Section 12 of the Securities Act of 1933, as amended, unless immediately thereafter Lessee has a Net Worth equal to or greater than Lessee’s Net Worth as of December 31, 2002, as published in Lessee’s 10-K as filed with the
Securities and Exchange Commission and has a credit rating from Standard & Poor’s equal to or better than BB-, or a Net Worth of at least Twenty-five Million Dollars ($25,000,000.00) greater than Lessee’s Net Worth as of December 31,
2002, as published in Lessee’s 10-K as filed with the Securities and Exchange Commission; or (10) the occurrence of a default or an anticipatory repudiation under any guaranty executed in connection herewith. Accounting terms used herein
(including the term “Net Worth”) shall be as defined, and all calculations shall be made, in accordance with GAAP. 
  
 (b) The occurrence of an Event of Default with respect to any Equipment Schedule shall, at the sole discretion of Lessor, constitute an Event of Default
with respect to any or all Equipment Schedules to which it is then a party. Notwithstanding anything to the contrary set forth herein, Lessor may exercise all rights and remedies hereunder independently with respect to each Equipment Schedule.

  
 16. REMEDIES. Upon the occurrence of any Event of Default,
Lessor may, at its option, without election of remedies, declare this Lease and any Equipment Schedule to be in default. At any time after cancellation of an Equipment Schedule or after declaration by Lessor that such Equipment Schedule is in
default, Lessor may, in addition to any other remedies provided herein or by applicable law, exercise one or more of the following remedies as Lessor in its sole discretion shall elect: 
  
 (a) Require Lessee to assemble any or all of the Equipment at a location in accordance with Rider 2; and/or to return
promptly, at Lessee’s expense, any or all of the Equipment to Lessor at the location, in the condition and otherwise in accordance with all of the terms of Section 13 hereof; and/or take possession of and render unusable by Lessee any or all of
the Equipment, wherever it may be located, without any court order or other process of law and without liability for any damages occasioned by such taking of possession (other than to premises) not attributable to the gross negligence or willful
misconduct of Lessor or its agents (any such taking of possession shall constitute an automatic cancellation of the Equipment Schedule pertaining thereto, as it applies to those items taken without further notice, and such taking of possession shall
not prohibit Lessor from exercising its other remedies hereunder). 
  
 (b) Sell, re-lease or otherwise dispose of any or all of the Equipment, whether or not in Lessor’s possession, in a commercially reasonable manner at public or private sale with notice to Lessee (the parties agreeing that ten (10)
days’ prior written notice shall constitute adequate notice of such sale), with the right of Lessor to purchase and apply the net proceeds of such disposition, after deducting all costs incurred by Lessor in connection with such Event of
Default and all costs of such sale, re-lease or other disposition (including but not limited to costs of transportation, possession, storage, refurbishing, advertising and brokers’ fees), to the obligations of Lessee pursuant to this sub-part
(b), with Lessee remaining liable for any deficiency and with any excess being retained by Lessor; or retain any or all of the Equipment in full or partial satisfaction, as the case may be, with Lessee remaining liable for any deficiency; and
recover from Lessee damages, not as a penalty, but herein liquidated for all purposes as follows: 
  
 (1) if Lessor elects to dispose of the Equipment under an Equipment Schedule pursuant to a lease which is substantially similar to this Lease and such
Equipment Schedule: an amount equal to the sum of (A) any accrued and unpaid Rent and other sums then due under this Lease and such Equipment Schedule as of the date of commencement (the “Commencement Date”) of the term of the new lease,
and (B) (i) the present value as of the Commencement Date of the total Rent for the then remaining term of such Equipment Schedule, minus (ii) the present value as of the Commencement Date of the Rent under the new lease applicable to that period of
the new lease term which is comparable to the then remaining term of such Equipment Schedule, and (C) any incidental damages allowed under Article 2A, less expenses saved by Lessor in consequence of the Event of Default (“Incidental
Damages”); or 

 (2) if Lessor elects to retain the Equipment or to dispose of the Equipment under an Equipment Schedule
by sale, by re-lease (pursuant to a lease which is not substantially similar to this Lease and such Equipment Schedule), or otherwise: an amount equal to the sum of (A) any accrued and unpaid Rent and other sums then due as of the date Lessor
repossesses the Equipment or such earlier date as Lessee tenders possession of the Equipment to Lessor, (B) (i) the present value as of the date determined under clause (A) of the total Rent for the then remaining term of such Equipment Schedule,
minus (ii) the present value, as of that certain date which may be determined by taking a reasonable opportunity to repossess and remarket the Equipment, of the “market rent” (as computed pursuant to Article 2A) at the place where the
Equipment was located on that date, computed for the same lease term, and (C) any Incidental Damages (provided, however, that if the measure of damages provided is inadequate to put Lessor in as good a position as performance would have, the damages
shall be the present value of the profit, including reasonable overhead, Lessor would have made from full performance by Lessee, together with any Incidental Damages allowed under Article 2A, due allowance for costs reasonably incurred and due
credit for payments or proceeds of disposition); 
  
 (c) In lieu
of the damages specified in sub-part (b), with respect to each applicable Equipment Schedule, Lessor may recover from Lessee, as liquidated damages for loss of a bargain and not as a penalty, an amount calculated as the sum of (1) the Stipulated
Loss Value of the Equipment (as determined as of the next date on which a payment is or would have been due after the declaration of an Event of Default), together with all other sums due hereunder through the date of such payment with respect to
such Equipment; plus (2) the amount of all commercially reasonable cost and expenses incurred by Lessor in connection with repossession, recovery, storage, repair, sale, release or other disposition of the Equipment, including reasonable
attorneys’ fees and costs incurred in connection therewith or otherwise resulting from Lessee’s Default; provided, however, if Lessor has repossessed and disposed of the Equipment, Lessor shall apply the Net Proceeds of such disposition to
reimburse Lessee for an amount up to, but in no event exceeding, that portion of the Stipulated Loss Value that Lessee has paid to Lessor pursuant to this subpart (iii); as used herein, “Net Proceeds” shall mean (a), in the case of a
disposition by sale, the gross selling price actually received, or (b), in the case of a disposition by lease, the present value of the rent actually due during that period of the new lease term which is comparable to the then remaining term of this
Lease in respect of the applicable Equipment Schedule, or, if shorter, the new lease term plus the present value of Lessor’s estimated residual interest in the Equipment at the end of the applicable Lease term of such Equipment Schedule, in
each case less (A) amounts which (if not paid) would constitute a lien on the Equipment for which Lessee is responsible for under this Lease, and (B) applicable sales, transfer, use or comparable taxes paid by Lessor. For purposes of the definition
of Net Proceeds, the new lease payments shall be discounted at a rate equal to the rate implicit in the rent due during the term of this Lease in which the Event of Default occurs. 
  
 If Lessor exercises its remedy pursuant to sub-part (c), upon payment in full by Lessee of the amounts required to be paid
by Lessee pursuant to such sub-part (c) and the amounts for which Lessee is liable pursuant to the last paragraph of this Section, Lessor shall deliver to Lessee a bill of sale transferring and assigning to Lessee without recourse or warranty,
except that Lessor shall warrant that it is conveying such title to the Equipment as was received by it, free and clear of all liens arising from any acts of Lessor, all of Lessor’s right, title and interest in and to the Equipment. Lessor
shall not be required to make and may specifically disclaim any representation or warranty as to the condition of the Equipment or any other matters. 
  
 (d) Cancel such Equipment Schedule as to any or all of the Equipment. 
  
 (e) Proceed by appropriate court action, either at law or in equity (including an action for specific performance), to
enforce performance by Lessee or to recover damages associated with such Event of Default; or exercise any other right or remedy available to Lessor at law or in equity. 
  
 With respect to any exercise by Lessor of its right to recover and/or dispose of any Equipment or other collateral securing
Lessee’s obligations under any Equipment Schedule (if applicable), Lessee acknowledges and agrees as follows: (i) Lessor shall have no obligation, subject to the requirements of commercial reasonableness, to clean up or otherwise prepare the
Equipment or any other collateral for disposition, and (ii) Lessor may comply with the requirements of any applicable law in connection with any disposition of the Equipment or other collateral, and any actions taken in connection therewith shall
not be deemed to have adversely affected the commercial reasonableness of any disposition of such Equipment and/or other collateral. Lessee acknowledges that if Lessor 

 
purchases any of the Equipment or other collateral upon sale pursuant to the exercise of its remedies hereunder, Lessor may pay for the same by crediting
some or all of Lessee’s obligations hereunder or under any Equipment Schedule. 
  
 All amounts to be present valued shall be discounted at a rate equal to the discount rate of the Federal Reserve Bank of Richmond in effect on the applicable date. Unless otherwise provided above, a cancellation of
any Equipment Schedule shall occur only upon written notice by Lessor to Lessee and only with respect to such items of the Equipment as Lessor specifically elects to cancel in such notice. Except as to such items of the Equipment with respect to
which there is a cancellation, this Lease and the Equipment Schedules not so cancelled shall remain in full force and effect and Lessee shall be and remain liable for the full performance of all its obligations hereunder and thereunder. Lessee shall
be liable for all reasonable legal fees and other expenses incurred by reason of any Default or Event of Default or the exercise of Lessor’s rights or remedies, including all expenses incurred in connection with the return of any Equipment in
accordance with the terms of Section 13 hereof and this Section or in placing such Equipment in the condition required by said Sections, and all other pre-judgment and post-judgment enforcement related actions taken by Lessor, and/or any actions
taken by Lessor in any bankruptcy case involving Lessee, the Equipment or any other collateral. Lessee shall also be liable for Late Charges which shall accrue and be payable with respect to all amounts becoming due pursuant to this Section from and
after the due date therefor until payment of the full amount thereof is made. No right or remedy referred to in this Section is intended to be exclusive, but each shall be cumulative and shall be in addition to any other remedy referred to above or
otherwise available at law or in equity, and may be exercised concurrently or separately from time to time. The failure of Lessor to exercise the rights granted hereunder upon any Event of Default by Lessee shall not constitute a waiver of any such
right upon the continuation or reoccurrence of any such Event of Default. In no event shall the execution of an Equipment Schedule constitute a waiver by Lessor of any pre-existing Event of Default in the performance of the terms and conditions
hereof. 
  
 17. LESSOR’S RIGHT TO PERFORM. If Lessee fails to
make any payment required to be made by it hereunder or fails to perform or comply with any of its other agreements contained herein and such failure can be cured with the payment of money, Lessor may itself make such payment or perform or comply
with such agreement, but shall not be obligated hereunder to do so, and the amount of such payment and of the reasonable expenses of Lessor incurred in connection with such payment or the performance of or compliance with such agreement, as the case
may be, together with interest thereon at the Late Charge Rate, to the extent permitted by applicable law, shall be payable by Lessee to Lessor on demand. 
  
 18. ASSIGNMENT. 
  
 (a) WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR (WHICH SHALL NOT UNREASONABLY BE WITHHELD), LESSEE WILL NOT ASSIGN, TRANSFER OR ENCUMBER ANY OF ITS RIGHTS
OR OBLIGATIONS HEREUNDER OR ITS LEASEHOLD INTEREST, SUBLET THE EQUIPMENT OR OTHERWISE PERMIT THE EQUIPMENT TO BE OPERATED OR USED BY, OR TO COME INTO OR REMAIN IN THE POSSESSION OF, ANYONE BUT LESSEE, ITS EMPLOYEES AND AGENTS, OTHER THAN IN THE
NORMAL COURSE OF LESSEE’S BUSINESS AND OPERATIONS; PROVIDED, HOWEVER, THAT SO LONG AS NO EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING: (1) LESSEE MAY ASSIGN OR TRANSFER ALL OF ITS RIGHTS OR OBLIGATIONS HEREUNDER OR ITS LEASEHOLD
INTEREST IN CONNECTION WITH A MERGER OR CONSOLIDATION OF LESSEE WITH, OR ANY TRANSFER OF SUBSTANTIALLY ALL OF THE ASSETS OF THE STACKTRAIN DIVISION OF LESSEE TO, AN ENTITY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 15(a)(8)(A) and (B) HEREOF; AND
(2) LESSEE SHALL HAVE THE RIGHT TO PUT THE EQUIPMENT IN THE POSSESSION OF ANY REPUTABLE REPAIR FACILITY FOR THE PURPOSE OF ANY REPAIRS, MODIFICATIONS, CHANGES OR ALTERATIONS PERMITTED UNDER THIS LEASE, SUCH WORK TO BE PERFORMED ON THE TERMS
CONFERRING NO MORE THAN A CONTRACTUAL RIGHT AGAINST LESSEE AND NO RIGHT AGAINST THE EQUIPMENT. No assignment or sublease, whether authorized in this Section or in violation of the terms hereof, shall relieve Lessee of its obligations hereunder and
Lessee shall remain primarily liable hereunder. Lessee will not, without the prior written consent of Lessor, sublease or otherwise in any manner deliver, transfer or relinquish possession of any Equipment. 
  
 (b) Lessor may assign any or all of its rights, obligations, title and
interest hereunder, or the right to enter into any Equipment Schedule or may resell (through syndication, assignment, participation or placements) an interest in 

 
any or all of the Equipment, this Lease or any Equipment Schedule; provided, however, that no such assignment or resale by Lessor may materially increase the
burdens or risks placed on Lessee under the Lease. Notwithstanding any assignment by Lessor, Lessee shall be entitled to continue to make payments to LaSalle National Leasing Corporation (“LaSalle”), as agent for any and all assignees of
LaSalle, and Lessee shall not be required to provide notices to any parties other than to LaSalle, as agent for any and all assignees. Each Equipment Schedule, incorporating by reference the terms and conditions of this Lease, constitutes a separate
instrument of lease, and the “Lessor” named therein or its assignee shall have all rights as “Lessor” thereunder separately exercisable by such named Lessor or assignee as the case may be, exclusively and independently of Lessor
or any assignee with respect to other Equipment Schedules executed pursuant hereto. Lessee agrees to confirm in writing receipt of any notice of assignment, syndication, participation or placement, as reasonably may be requested by Lessor or any
such assignee or participant (collectively, the “Assignee”). Without waiving any rights Lessee may have against Lessor, Lessee hereby waives and agrees not to assert against any such Assignee any defense, setoff, recoupment, claim or
counterclaim which Lessee has or may at any time hereafter have against Lessor or any Person other than such Assignee, for any reason whatsoever. Lessee will provide reasonable assistance to Lessor in whatever manner necessary but at Lessor’s
expense in order to permit Lessor to complete any resale, syndication, assignment, participation or placement of the transaction contemplated by this Lease. Lessee agrees that any such assignment shall not materially change Lessee’s duties or
obligations under this Lease or any Equipment Schedule, or materially increase Lessee’s risks or burdens. Upon such assignment and except as may otherwise by provided herein, all references in this Lease to Lessor shall include such Assignee.

  
 (c) Subject always to the foregoing, this Lease inures to the
benefit of, and is binding upon, the successors and assigns of the parties hereto. 
  
 19. MISCELLANEOUS. (a) This Lease, the Riders attached hereto, each Equipment Schedule, any commitment letter between Lessor and Lessee in connection with the transactions contemplated by this Lease, and the Equipment
Purchase Order Assignment and Novation dated as of the date hereof between Lessor and Lessee, constitute the entire agreement between the parties with respect to the subject matter hereof and thereof and shall not be rescinded, amended or modified
in any manner except by a document in writing executed by both parties. (b) Any provision of this Lease which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. (c) The representations,
warranties and covenants of Lessee herein shall be deemed to be continuing and to survive the execution and delivery of this Lease, each Equipment Schedule and any other Lease Documents. Each execution by Lessee of an Equipment Schedule shall be
deemed a reaffirmation and warranty that there shall have been no material adverse change in the business or financial condition of Lessee from the date of execution hereof. With respect to each Equipment Schedule, the obligations of Lessee under
Sections 9, 13 and 14 hereof, together with any of Lessee’s obligations under the other provisions of this Lease (as incorporated therein) which have accrued but not been fully satisfied, performed or complied with prior to the cancellation or
expiration of such Equipment Schedule, shall survive the cancellation or expiration thereof to the extent necessary for the full and complete performance of such obligations. The obligations of Lessor under Sections 9 and 14 hereof, which have
accrued but not been fully satisfied, performed or complied with prior to the cancellation or expiration of such Equipment Schedule, shall survive the cancellation or expiration thereof to the extent necessary for the full and complete performance
of such obligations. (d) Lessor represents and covenants to Lessee that Lessor has full authority to enter into this Lease and any other Lease Documents to which it may become a party, and so long as no Default or Event of Default occurs with
respect to an Equipment Schedule, neither Lessor nor any Person claiming by or through Lessor shall interfere with Lessee’s right to peaceably and quietly possess and use the Equipment during the term thereof, subject to the terms and
provisions hereof. Lessor further agrees to enforce Lessee’s or any permitted sublessee’s right of quiet enjoyment as provided for herein against Liens (as defined in Section 10(c) hereof) of third parties created by or through Lessor. (e)
Expenses incurred by Lessor in connection with (1) the initial filing or recording of real property waivers (if applicable) and UCC statements, and (2) lien search reports and copies of filings on or about the date of the Equipment Schedule with
respect to Lessee and/or the Equipment, shall be for the account of Lessee and shall be payable by Lessee upon demand. (f) If Lessor is required by the terms hereof to pay to or for the benefit of Lessee any amount received as a refund of an
Imposition or as insurance proceeds, and a Default or Event of Default has then occurred and is continuing, Lessor shall not be required to pay such amount unless and until any such Default or Event of Default shall have been waived by Lessor. In
addition, if Lessor is required by the terms hereof to cooperate with Lessee in connection with certain matters, such cooperation shall not be required if an Event of Default has then occurred and is continuing. (g) Lessee irrevocably authorizes
Lessor to file any UCC statements, 

 
and Lessee irrevocably appoints Lessor as Lessee’s attorney-in-fact (which power shall be deemed coupled with an interest) to execute, endorse and
deliver any UCC statements and any documents and checks or drafts relating to or received in payment for any loss or damage under the policies of insurance required by the provisions of Section 11 hereof, but only to the extent that the same relates
to the Equipment. (h) LESSEE AND LESSOR HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH LESSEE AND/OR LESSOR MAY BE PARTIES ARISING OUT OF OR IN ANY WAY PERTAINING TO THIS LEASE. LESSEE AUTHORIZES LESSOR TO FILE THIS PROVISION WITH
THE CLERK OR JUDGE OF ANY COURT HEARING ANY SUCH CLAIM. THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY LESSEE AND LESSEE HEREBY ACKNOWLEDGES THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS
WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT. LESSEE AND LESSOR FURTHER ACKNOWLEDGE THAT THEY HAVE BEEN REPRESENTED IN THE SIGNING OF THIS LEASE AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED OF
THEIR OWN FREE WILL, AND THAT THEY HAVE HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL. (i) All notices (excluding billings and communications in the ordinary course of business) hereunder shall be in writing, personally delivered,
delivered by overnight courier service, sent by facsimile transmission (with confirmation of receipt), or sent by certified mail, return receipt requested, addressed to the other party at its respective address stated below the signature of such
party or at such other address as such party shall from time to time designate in writing to the other party; and shall be effective upon receipt. (j) This Lease and all of the other Lease Documents shall not be effective unless and until accepted
by execution by an officer of Lessor. (k) All warranties, representations, indemnities and covenants made by any party hereto, herein or in any certificate or other instrument delivered by any such party or on the behalf of any such party under this
Lease shall be considered to have been relied upon by each other party hereto and shall survive the consummation of the transactions contemplated regardless of any investigation made by any such party or on behalf of any such party. (l) If any
payment is to be made hereunder or any action is to be taken hereunder on any date that is not a Business Day, such payment or action otherwise required to be made or taken on such date shall be made or taken on the next succeeding Business Day. (m)
THIS LEASE AND ALL OF THE OTHER LEASE DOCUMENTS, AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER, SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT
REGARD TO THE CONFLICT OF LAWS PRINCIPLES OF SUCH STATE), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, REGARDLESS OF THE LOCATION OF THE EQUIPMENT. The parties agree that any action or proceeding arising out of or relating to
this Lease may be commenced in any state or Federal court in the State of New York, and agree that a summons and complaint commencing an action or proceeding in any such court shall be properly served and shall confer personal jurisdiction if served
personally or by certified mail to it at its address hereinbelow set forth, or as it may provide in writing from time to time, or as otherwise provided under the laws of the State of New York. (n) This Lease and all of the other Lease Documents may
be executed in any number of counterparts and by different parties hereto or thereto on separate counterparts, each of which, when so executed and delivered, shall be an original, but all such counterparts shall together consist of but one and the
same instrument; provided, however, that to the extent that this Lease and/or the Equipment Schedule would constitute chattel paper, as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction, no security
interest herein or therein may be created through the transfer or possession of this Lease in and of itself without the transfer or possession of the original of such Equipment Schedule and incorporating this Lease by reference; and no security
interest in this Lease and an Equipment Schedule may be created by the transfer or possession of any counterpart of such Equipment Schedule other than the original thereof, which shall be identified as the document marked “Original” and
all other counterparts shall be marked “Duplicate”. 
  
 20. DEFINITIONS AND RULES OF CONSTRUCTION. (a) The following terms when used in this Lease or in any of the Equipment Schedules have the following meanings: (1) “applicable law” or “law”: any law, rule, regulation,
ordinance, order, code, common law, interpretation, judgment, directive, decree, treaty, injunction, writ, determination, award, permit or similar norm or decision of any governmental authority; (2) “Business Day”: any day, other than a
Saturday, Sunday, or legal holiday for commercial banks under the laws of the State of New York; (3) “UCC”: the Uniform Commercial Code as in effect in the State of New York or in any other applicable jurisdiction; and any reference to an
article or section thereof shall mean the corresponding article or section (however termed) of any such other applicable version of the Uniform Commercial Code; (4) “governmental authority”: any Federal, state, county, municipal, regional
or other governmental authority, agency, board, body, instrumentality or court, in each case, whether domestic or foreign where the Equipment is operated; and (5) “Person”: any individual, 

 
corporation, partnership, joint venture, or other legal entity or a governmental authority, whether employed, hired, affiliated, owned, contracted with, or
otherwise related or unrelated to Lessee or Lessor. (b) The following terms when used herein or in any of the Equipment Schedules shall be construed as follows: “herein,” “hereof,” “hereunder,” etc.: in, of, under, etc.
this Lease or such other Lease Document in which such term appears (and not merely in, of, under, etc. the section or provision where the reference occurs); “including”: containing, embracing or involving all of the enumerated items, but
not limited to such items unless such term is followed by the words “and limited to,” or similar words; and “or”: at least one, but not necessarily only one, of the alternatives enumerated. Any defined term used in the singular
preceded by “any” indicates any number of the members of the relevant class. Any Lease Document or other agreement or instrument referred to herein means such agreement or instrument as supplemented and amended from time to time. Any
reference to Lessor or Lessee shall include their permitted successors and assigns. Any reference to a law shall also mean such law as amended, superseded or replaced from time to time. Unless otherwise expressly provided herein to the contrary, all
actions that Lessee takes or is required to take under any Lease Document shall be taken at Lessee’s sole cost and expense, and all such costs and expenses shall constitute Claims and be covered by Section 14 hereof. To the extent Lessor is
required to give its consent or approval with respect to any matter, the reasonableness of Lessor’s withholding of such consent shall be determined based on the then existing circumstances; provided, that Lessor’s withholding of its
consent shall be deemed reasonable for all purposes if (i) the taking of the action that is the subject of such request, might result (in Lessor’s discretion), in (A) an impairment of Lessor’s rights, title or interests hereunder or under
any Equipment Schedule or other Lease Document, or to the Equipment, or (B) expose Lessor to any Claims, or (ii) to the extent Lessee fails to provide promptly to Lessor any filings, certificates, opinions or indemnities specified by Lessor to
Lessee in writing. 
  
 [REMAINDER OF THIS PAGE INTENTIONALLY LEFT
BLANK] 

 IN WITNESS WHEREOF, the parties hereto have caused this Master Lease Agreement to be duly executed, under
seal, as of the day and year first above set forth. 
  

	LASALLE NATIONAL LEASING CORPORATION
Lessor	 	 	 	 PACER INTERNATIONAL, INC.
 Lessee

					
	 	 	 	 	 	 	 	 	 
	 By:                                      
                              [SEAL]
	 	 	 	 By:                                      
                              [SEAL]

	 Name:                                     
                                      
 
	 	 	 	 Name:                                     
                                      
 

	 Title:                                     
                                        
 
	 	 	 	 Title:                                     
                                        
 

			
	 One West Pennsylvania Avenue
	 	 	 	 1340 Treat Boulevard

	 Suite 1000
	 	 	 	 Suite 200

	 Towson, Maryland 21204
	 	 	 	 Walnut Creek, California 94596

	 Facsimile: (410) 769-9313
	 	 	 	 Facsimile: 925-979-4215

	 	 	 	 	 	 	 Federal Employer Identification No.:

	 	 	 	 	 	 	 Jurisdiction of Organization: Tennessee

	 	 	 	 	 	 	 Organizational No.: 0022491Credit Agreement - US Bank National Association

 EXHIBIT 10.1 
  

  
  
  
 CREDIT AGREEMENT 
  
 Between 
  
 STANCORP FINANCIAL GROUP, INC. 
  
 And 
  
 U.S. BANK NATIONAL ASSOCIATION 
  
 Dated as of June 30, 2003 
  
 $75,000,000 
  
  
  

 CREDIT AGREEMENT 
  
 THIS CREDIT AGREEMENT, dated and effective as of June 30, 2003, is made by and between StanCorp Financial Group, Inc., an
Oregon corporation (the “Borrower”), and U.S. BANK NATIONAL ASSOCIATION, a national banking association (the “Bank”). 
  
 NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Borrower and the Bank agree as follows:

  
 ARTICLE I 
  
 DEFINITIONS AND ACCOUNTING TERMS 
  
 1.1    Defined Terms. 
  
 In addition to the terms defined elsewhere in this Agreement, the following
terms shall have the following meanings (and such meanings shall be equally applicable to both the singular and plural form of the terms defined, as the context may require): 
  
 “Advance” means the portion of the outstanding Loan bearing interest at an identical rate for an identical Loan
Period. An Advance may be a Fixed LIBOR Advance or a Floating LIBOR Advance (together, “LIBOR Advances” and each, a type of Advance). 
  
 “Adverse Event” means the occurrence of any event that could reasonably be expected to have a material adverse effect on the business,
operations, property, assets or financial condition of the Borrower and its Subsidiaries, taken as whole, or on the ability of the Borrower or any Guarantor to perform its obligations under the Loan Documents. 
  
 “Agreement” means this Credit Agreement, as it may be amended,
modified, supplemented, restated or replaced from time to time. 
  
 “Authorized Control Level Risk-Based Capital” shall have the meaning set forth on page 27, line 31, column 1 of the most recent NAIC Statement filed by SIC. 
  
 “Business Day” means any day (other than a Saturday, Sunday or legal holiday in the State of Oregon) on which
national banks are permitted to be open in Portland, Oregon and on which dealings in Dollars may be carried on by the banks in the interbank LIBOR market. 
  
 “Capitalized Lease” means any lease which is or should be capitalized on the books of the lessee in accordance with GAAP. 
  
 “Code” means the Internal Revenue Code of 1986, as amended, or any
successor statute, together with regulations thereunder. 
  
 “Commitment” means seventy-five million dollars ($75,000,000) as such amount may be reduced from time to time pursuant to Section 4.4 or Section 10.2. 
  

 1 

 “Compliance Certificate” means a certificate in the form of Exhibit C, duly completed and
signed by the chief financial officer or controller of the Borrower. 
  
 “Default” means any event which, with the giving of notice to the Borrower or lapse of time, or both, would constitute an Event of Default. 
  
 “Department” means the governmental agency or authority of the state of domicile of an insurance company primarily
responsible for regulating the insurance company. 
  
 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute, together with regulations thereunder. 
  
 “ERISA Affiliate” means any trade or business (whether or not incorporated) that is a member of a group of which
the Borrower is a member and which is treated as a single employer under Section 414 of the Code. 
  
 “Event of Default” means any event described in Section 10.1. 
  
 “Executive Officer” means the chief executive officer, president, chief financial officer, controller, or
treasurer. 
  
 “Expiry Date” means June 28, 2004.

  
 “Facility Fee” shall have the meaning set forth in
Section 3.2. 
  
 “Federal Reserve Board” means the Board
of Governors of the Federal Reserve System or a successor thereto. 
  
 “Fixed Charge Coverage Ratio” means for any period (a) net income plus interest expense plus income tax expense plus depreciation and amortization expense divided by (b) cash taxes plus cash paid for interest (as shown on the
Borrower’s Consolidated Statement of Cash Flows as filed with the Securities and Exchange Commission for such period), all as calculated in accordance with GAAP consistently applied. 
  
 “Fixed LIBOR Advance” means an Advance designated as such in a notice of borrowing under Section 2.2 or a notice
of continuation or conversion under Section 2.3 or as referred to in Section 3.1(a). 
  
 “Floating LIBOR Advance” means an Advance designated as such in a notice of borrowing under Section 2.2 or a notice of continuation or conversion under Section 2.3 or as referred to in Section 3.1(a).

  
 “Funded Debt” means, without duplication, the
following obligations, contingent or otherwise, of the Borrower and its Subsidiaries (whether or not classified as liabilities upon the obligor’s balance sheet, whether originally incurred or later assumed, and whether or not incurred as a
general partner or joint venturer of a partnership or joint venture): (a) obligations under this Agreement; (b) indebtedness for borrowed money (including, without limitation, any and all notes outstanding under the Note Indenture); (c)
”surplus notes” as set forth in the 

  

 2 

 
Borrower’s financial statements prepared in accordance with SAP; (d) any obligations as lessee under any Capitalized Lease or synthetic lease; (e)
obligations secured by any mortgage, pledge, security interest, lien, charge or other encumbrance existing on property owned or acquired and whether or not the obligation secured is the obligation of the owner or another party; (f) all guaranties,
endorsements and other contingent obligations in respect to Indebtedness of others, including agreements to maintain net worth or working capital of, or provide funds to satisfy any other financial test applicable to any other Person; and (g)
undertakings or agreements to reimburse or indemnify issuers of letters of credit; but in any event excluding: (v) obligations in which the creditor’s only recourse is to the property which secures the obligation; (w) obligations of
partnerships or joint ventures where the recourse of the creditor on the obligation is limited to assets of the partnership or joint venture; (x) obligations arising on account of the endorsement of negotiable instruments for deposit or collection
(or similar transactions) in the ordinary course of business; and (y) obligations of the Borrower or any Subsidiary to another Subsidiary or the Borrower, to the extent such obligations are consolidated on Borrower’s financial statements;
provided that with respect to Funded Debt of a partnership or joint venture, such Funded Debt shall be deemed to be Funded Debt of each Person participating therein in an amount equal to such Person’s pro rata interest in such partnership or
joint venture. 
  
 “GAAP” means generally accepted
accounting principles consistently applied. 
  
 “Guarantors” means SIC and SMI. 
  
 “Guaranties” means guaranties in the form of Exhibit B-1 and B-2, duly completed and signed by authorized officers of SIC and SMI, respectively. 
  
 “Indebtedness” means Funded Debt (without regard to the exclusions contained in the definition of such term) plus,
without duplication, all obligations, contingent or otherwise, which in accordance with GAAP should be classified upon the obligor’s balance sheet as liabilities, but in any event including the following (whether or not they should be
classified as liabilities upon such balance sheet): (a) any obligation on account of deposits or advances; and (b) any obligation for the deferred purchase price of any property or services, except Trade Accounts Payable. 
  
 “Intercreditor Agreement” means that certain agreement dated as of
June 30, 2003 between the Borrower, the Bank, and Key Bank National Association. 
  
 “Letters of Credit” shall have the meaning set forth in Section 2.6. 
  
 “Letter of Credit Obligations” shall mean the aggregate amount of all possible drawings under all outstanding Letters of Credit plus all amounts
drawn under any Letter of Credit and not reimbursed by the Borrower under the applicable Letter of Credit Agreement. 
  
 “Lien” means any security interest, mortgage, pledge, lien, hypothecation, judgment lien or similar legal process, charge, encumbrance, title
retention agreement or analogous instrument or device (including, without limitation, the interest of the lessors under Capitalized Leases and the interest of a vendor under any conditional sale or other title retention agreement). 
  

 3 

 “LIBOR Rate” shall be one of the interest rates determined in accordance with Section 3.1.

  
 “Loan” shall have the meaning set forth in Section
2.1. 
  
 “Loan Documents” means this Agreement, the
Note, the Guaranties, each Letter of Credit Agreement, and each other instrument, document, guaranty, security agreement, mortgage, or other agreement executed and delivered by the Borrower or any guarantor or party granting security interests in
connection with this Agreement, the Loan or any collateral for the Loan. 
  
 “Loan Period” shall have the meaning set forth in Section 3.1(b); provided that with respect to Floating LIBOR Advances all such Advances shall be deemed to have a Loan Period ending on the Expiry Date.

  
 “NAIC” means the National Association of Insurance
Commissioners. 
  
 “NAIC Standards” means accounting
standards of the NAIC for life and health insurers, as such standards may be amended from time to time. 
  
 “NAIC Statement” means the annual statement of the Standard Insurance Company of Portland in the state of Oregon to the Insurance Department of
the state of Oregon. 
  
 “Net Income” shall have the
meaning set forth on page 4, line 35, column 1 of the most recent NAIC Statement filed by SIC. 
  
 “Net Income to Total Income Percentage” means (a) the sum of Net Income plus the amount of ceding commissions paid by SIC plus the net deferred acquisition cost of SIC determined on a consolidated basis in
accordance with GAAP divided by (b) the sum of Total Income plus Realized Capital Gains/Losses expressed as a percentage. 
  
 “Net Worth” means the Borrower’s shareholders’ equity determined on a consolidated basis in accordance with GAAP consistently applied.

  
 “Note” means a promissory note in the form of
Exhibit A, duly completed and signed by an authorized officer of the Borrower. 
  
 “Note Indenture” means that certain Indenture between the Borrower and U.S. Bank National Association, as trustee, dated as of September 25, 2002. 
  
 “PBGC” means the Pension Benefit Guaranty Corporation, established
pursuant to Subtitle A of Title IV of ERISA, and any successor thereto or to the functions thereof. 
  
 “Person” means any natural person, corporation, partnership, joint venture, firm, association, trust, unincorporated organization, government or
governmental agency or political subdivision or any other entity, whether acting in an individual, fiduciary or other capacity. 
  

 4 

 “Plan” means an employee pension benefit plan maintained for employees of the Borrower or of
any ERISA Affiliate and subject to Title IV of ERISA or Section 412 of the Code. 
  
 “Prime Rate” means the rate of interest publicly announced by the Bank from time to time as its prime rate. 
  
 “Realized Capital Gains/Losses” shall have the meaning set forth on page 4, line 34, column 1 of the most recent NAIC Statement filed by
SIC. 
  
 “Related Party” means any Person (other
than the Borrower or a Subsidiary): (a) which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, the Borrower, (b) which beneficially owns or holds 5.00 percent or more of the
equity interest of the Borrower; or (c) 5.00 percent or more of the equity interest of which is beneficially owned or held by the Borrower or a Subsidiary. The term “control” means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. 
  
 “Reportable Event” means a reportable event as defined in Section 4043 of ERISA and the regulations issued under such section, with respect to a
Plan, excluding, however, such events as to which the PBGC by regulation has waived the requirement of Section 4043(a) of ERISA that it be notified within 30 days of the occurrence of such event, provided that a failure to meet the minimum funding
standard of Section 412 of the Code and Section 302 of ERISA shall be a reportable event regardless of the issuance of any such waivers in accordance with Section 412(d) of the Code. 
  
 “Risk-Based Capital Percentage” means (a) Total Adjusted Capital divided by (b) Authorized Control Level
Risk-Based Capital, expressed as a percentage. 
  
 “SAP”
means, as to any insurance company, accounting practices prescribed or permitted by statutes of the state of its domicile or by rules of the Department, or to the extent statutes and the Department fail to prescribe or address such practices, NAIC
Standards. 
  
 “SIC” means Standard Insurance Company, a
Subsidiary of the Borrower. 
  
 “SMI” means StanCorp
Mortgage Investors, LLC, a Subsidiary of the Borrower. 
  
 “SREI” means StanCorp Real Estate Investors, LLC, a Subsidiary of the Borrower. 
  
 “Subsidiary” means any Person of which or in which the Borrower or its other Subsidiaries own directly or indirectly 50 percent or more of: (a)
the combined voting power of all classes of stock having general voting power under ordinary circumstances to elect a majority of the board of directors of such Person, if it is a corporation, (b) the capital interest or profit interest of such
Person, if it is a partnership, joint venture or similar entity, or (c) the beneficial interest of such Person, if it is a trust, association or other unincorporated organization. 
  

 5 

 “Termination Date” means the earlier of (a) the Expiry Date and (b) the date on which the
Commitment is terminated pursuant to Section 4.4 or Section 10.2 hereof. 
  
 “Total Adjusted Capital” shall have the meaning set forth on page 27, line 30, column 1 of the most recent NAIC Statement filed by SIC. 
  
 “Total Income” shall have the meaning set forth on page 4, line 9, column 1 of the most recent NAIC Statement
filed by SIC. 
  
 “Trade Accounts Payable” means
the trade accounts payable of any Person with a maturity of not greater than 90 days incurred in the ordinary course of such Person’s business. 
  
 1.2    Accounting Terms and Calculations.    Except as may be expressly provided to the contrary
herein, all accounting terms used herein shall be interpreted and all accounting determinations hereunder (including, without limitation, determination of compliance with financial ratios and restrictions in Article VIII and Article IX hereof) shall
be made in accordance with GAAP as in effect on the date of application thereof. Any reference to “consolidated” financial terms shall be deemed to refer to those financial terms as applied to the Borrower and its Subsidiaries, as
applicable, in accordance with GAAP. Any reference to a page, line or column of a NAIC Statement shall be deemed to include a substitute page, line, or column of such NAIC Statement where equivalent financial information appears. 
  
 1.3    Computation of Time
Periods.    In this Agreement, in the computation of a period of time from a specified date to a later specified date, unless otherwise stated the word “from” means “from and including” and the word
“to” or “until” each means “to but excluding.” 
  
 1.4    Other Definitional Terms.    The words “hereof,” “herein” and “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. References to Sections, Exhibits, schedules and like references are to this Agreement unless otherwise expressly provided. 
  
 ARTICLE II 
  
 TERMS OF LENDING 
  
 2.1    The
Commitment.    Subject to the terms and conditions hereof and in reliance upon the warranties of the Borrower herein, the Bank shall make loans (the “Loan”) to the Borrower from time to time from the date hereof
until the Expiry Date, during which period the Borrower may repay and reborrow in accordance with the provisions hereof, provided that the unpaid principal amount of the Loan plus the Letter of Credit Obligations shall not at any time exceed the
Commitment. 
  
 2.2    Borrowing
Procedures.    Any request by the Borrower for a Loan shall be in writing, or by telephone promptly confirmed in writing, and must be given so as to be received by the Bank not later than: 
  

 6 

 (a)    4:00 p.m., Portland time, on the date of the requested Loan,
if the Loan is a Floating LIBOR Advance; or 
  
 (b)    12:00 noon, Portland time, two New York Banking Days prior to the date of the requested Loan, if the Loan is, or includes, a Fixed LIBOR Advance. 
  
 Each request for a Loan shall specify (i) the borrowing date (which shall be a Business Day), (ii) the amount of such Loan
and the type or types of Advances comprising such Loan, and (iii) if such Loan includes Fixed LIBOR Advances, the Loan Periods for such Advances. 
  
 2.3    Continuation or Conversion of Loan.    Subject to the provisions of Section 3.1, the
Borrower may elect to (i) continue any outstanding Fixed LIBOR Advance from one Loan Period into a subsequent Loan Period to begin on the last day of the earlier Loan Period, or (ii) convert any outstanding Advance into another type of Advance (on
the last day of a Loan Period only) by giving the Bank notice in writing, or by telephone promptly confirmed in writing, given so as to be received by the Bank not later than: 
  
 (a)    4:00 p.m., Portland time, on the date of the requested continuation or
conversion, if the continuing or converted Advance shall be a Floating LIBOR Advance; or 
  
 (b)    12:00 noon, Portland time, two New York Banking Days prior to the date of the requested continuation or
conversion, if the continuing or converted Advance shall be a Fixed LIBOR Advance. 
  
 Each notice of continuation or conversion of an Advance shall specify (i) the effective date of the continuation or conversion date (which shall be a Business Day), (ii) the amount and the type or types of Advances following such
continuation or conversion (subject to the limitations set forth in Section 3.1), and (iii) for continuation as, or conversion into, Fixed LIBOR Advances, the Loan Periods for such Advances. 
  
 2.4    The Note.    The
Loan shall be evidenced by the Note in the amount of the Commitment and dated as of the date of this Agreement. The Bank shall enter in its records the amount of the Loan and each Advance, the rate of interest borne by each Advance and the payments
made on the Loan, and such records shall be deemed conclusive evidence of the subject matter thereof, absent manifest error. 
  
 2.5    Funding Losses.    Subject to the provisions of Section 3.1, the Borrower will indemnify the
Bank upon demand against any loss or expense that the Bank may sustain or incur (including, without limitation, any loss or expense sustained or incurred in obtaining, liquidating or employing deposits or other funds acquired to effect, fund, or
maintain any Advance) as a consequence of (i) any failure of the Borrower to make any payment when due of any amount due hereunder or under the Note, (ii) any failure of the Borrower to borrow, continue or convert an Advance on a date specified
therefor in a notice thereof, or (iii) any payment (including, without limitation, any payment pursuant to Section 4.2 or Section 10.2), prepayment or conversion of any LIBOR Advance on a date other than the last day of the Loan Period for 

  

 7 

 
such Advance. Determinations by the Bank for purposes of this Section 2.5 of the amount required to indemnify the Bank shall be conclusive in the absence of
manifest error. 
  
 2.6    Letters of
Credit. 
  
 (a)    Letters of Credit.    Subject to the terms and conditions of this Agreement, the Borrower may, in addition to requesting Loans, request that the Bank issue letters of credit for the
account of the Borrower, by making such request to the Bank (such letters of credit as any of them may be amended, supplemented, extended or confirmed from time to time, being herein collectively called the “Letters of Credit”). The
issuance of such Letters of Credit will be subject to the Bank’s customary letter of credit conditions and requirements as in effect from time to time. 
  
 (b)    Additional Provisions.    The following additional provisions shall apply to each
Letter of Credit: 
  
 (i)    No Letter of Credit may be issued if after giving effect thereto the Letter of Credit Obligations shall exceed $10,000,000 or if the sum of (a) the outstanding principal amount of the Loan plus (B) the Letter of
Credit Obligations would exceed the Commitment. 
  
 (ii)    No Letter of Credit shall be issued on or after the Expiry Date. No Letter of Credit shall be issued which expires or which permits presentment of drafts or other documents for payment later than six months after
the Expiry Date. 
  
 (iii)    Upon receipt from the beneficiary of any Letter of Credit of any demand for payment thereunder, the Bank shall promptly notify the Borrower as to the amount to be paid as a result of such demand and the payment
date. 
  
 (iv)    The
Borrower shall be irrevocably and unconditionally obligated forthwith to reimburse the Bank for any amount paid by the Bank upon any drawing under any Letter of Credit, without presentment, demand, protest or other formalities of any kind, all of
which are hereby waived. Such reimbursement may, subject to satisfaction of the conditions in Article VI hereof and to the available Commitment (after adjustment in the same to reflect the elimination of the corresponding Letter of Credit
Obligation), be made by the making of a Loan. 
  
 (v)    The Borrower will pay to the Bank a letter of credit fee with respect to each Letter of Credit equal to an amount, calculated on the basis of face amount of each Letter of Credit, in each case for the period from
and including the date of issuance of such Letter of Credit to and including the date of expiration or termination thereof at a rate equal to the 0.50 percent per annum, but in no event less than $400, such fee to be due and payable in advance on
the date of the issuance thereof, and shall be adjusted for any cancellation or reduction in the face amount of the Letter of Credit. All fees hereunder shall be computed on the basis of a year of 360 days and paid for the actual number of days
elapsed. 
  

 8 

 (vi)    The issuance by the Bank of each Letter of Credit shall, in
addition to the discretionary nature of this facility, be subject to the conditions precedent that the Borrower shall have executed and delivered such applications and other instruments and agreements relating to such Letter of Credit as the Bank
shall have reasonably requested and are not inconsistent with the terms of this Agreement. In the event of a conflict between the terms of this Agreement and the terms of any Letter of Credit agreement (including the charging of any fees other than
normal and customary reimbursable expenses), the terms hereof shall control. 
  
 (c)    Indemnification.    The Borrower hereby indemnifies and holds harmless the Bank and its officers, directors, employees, and agents (collectively, the
“Indemnified Parties”) from and against any and all claims and damages, losses, liabilities, costs or expenses that the Indemnified Parties may incur (or which may be claimed against the Indemnified Parties by any Person whatsoever), in
connection with the execution and delivery of any Letter of Credit or transfer of or payment or failure to pay under any Letter of Credit; provided that the Borrower shall not be required to indemnify any party seeking indemnification for any
claims, damages, losses, liabilities, costs or expenses to the extent, but only to the extent, caused by the willful misconduct or gross negligence of the party seeking indemnification. 
  
 ARTICLE III 
  
 INTEREST AND FEES 
  
 3.1    Interest. 
  
 (a)    Rates.    Interest on each Advance hereunder shall
accrue at one of the following per annum rates selected by the Borrower (i) upon notice to the Bank, .60 percent plus the one-month LIBOR rate quoted by the Bank from Telerate Page 3750 or any successor thereto, which shall be that one-month LIBOR
rate in effect and reset each New York Banking Day, adjusted for any reserve requirement and any subsequent costs arising from a change in government regulation (a “Floating LIBOR Advance”); or (ii) upon a minimum of two New York Banking
Days’ prior notice, .40 percent plus the 1, 2, 3 or 6-month LIBOR rate quoted by the Bank from Telerate Page 3750 or any successor thereto (which shall be the LIBOR rate in effect two New York Banking Days prior to commencement of the Advance),
adjusted for any reserve requirement and any subsequent costs arising from a change in government regulation (a “Fixed LIBOR Advance”). The term “New York Banking Days” means any day (other than a Saturday or Sunday) on which
commercial banks are open for business in New York, New York. No Fixed LIBOR Advance may extend beyond the Expiry Date. In any event, if the Loan Period for a Fixed LIBOR Advance should happen to extend beyond the Expiry Date, such loan must be
prepaid on the Expiry Date. 
  
 (b)    Prepayments.    If a Fixed LIBOR Advance is prepaid prior to the end of the Loan Period for such loan, whether voluntarily or because prepayment is required due to the Note maturing or
due to acceleration of the Note upon default or otherwise, the 

  

 9 

 
Borrower agrees to pay all of the Bank’s costs, expenses, and Interest Differential (as determined by the Bank) incurred as a result of such prepayment.
The term “Loan Period” means the period commencing on the advance date of the applicable Fixed LIBOR Advance and ending on the numerically corresponding day 1, 2, 3, or 6 months thereafter matching the interest rate term selected by the
Borrower; provided, however, (a) if any Loan Period would otherwise end on a day which is not a New York Banking Day, then the Loan Period shall end on the next succeeding New York Banking Day unless the next succeeding New York Banking Day falls in
another calendar month, in which the Loan Period shall end on the immediately preceding New York Banking Day; or (b) if any Loan Period begins on the last New York Banking Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of the Loan Period), then the Loan Period shall end on the last New York Banking Day of the calendar month at the end of such Loan Period. The term “Interest Differential” shall mean that
sum equal to the greater of zero or the financial loss incurred by the Bank resulting from prepayment, calculated as the difference between the amount of interest the Bank would have earned (from like investments in the Money Markets as of the first
day of the Fixed LIBOR Advance) had prepayment not occurred and the interest the Bank will actually earn (from like investments in the Money Markets as of the date of prepayment) as a result of the redeployment of funds from the prepayment. The term
“Money Markets” refers to one or more wholesale funding markets available to the Bank, including negotiable certificates of deposit, commercial paper, eurodollar deposits, bank notes, federal funds, interest rate swaps, or others. Because
of the short-term nature of this facility, the Borrower agrees that the Interest Differential shall not be discounted to its present value. Any prepayment of a Fixed LIBOR Advance shall be in an amount equal to the remaining entire balance of such
loan. 
  
 (c)    Conversion.    In the event the Borrower does not timely select another interest rate option at least two New York Banking Days before the end of the Loan Period for a Fixed LIBOR
Advance, the Bank may at any time after the end of the Loan Period convert the Fixed LIBOR Advance to a Floating LIBOR Advance, but until such conversion, the funds advanced under the Fixed LIBOR Advance shall continue to accrue interest at the same
rate as the interest in effect for such Fixed LIBOR Advance prior to the end of the Loan Period. The Bank’s internal records of applicable interest rates shall be determinative in the absence of manifest error. Each Fixed LIBOR Advance shall be
in a minimum principal amount of $100,000. No more than four separate Fixed LIBOR Advances shall be outstanding at any one time. 
  
 (d)    Interest Payment Dates.    Accrued interest shall be payable monthly in arrears on
the last day of each calendar month and on the Termination Date. 
  
 (e)    Interest After Default.    Any amount of the Loan not paid when due, whether at the date scheduled therefor or earlier upon acceleration, shall bear interest until
paid in full at a rate per annum equal to 2.00 percent in excess of the Prime Rate, as announced from time to time. 
  
 3.2    Facility Fee.    On the last day of each calendar quarter and on the Termination Date, the
Borrower shall pay to the Bank a non-refundable fee (the “Facility Fee”) 
  

 10 

 
in an amount determined by applying a rate of 0.075 percent per annum to the daily amount of the Commitment for the quarter (or portion thereof) then ended.

  
 3.3    Computation.    Accrued interest and the Facility Fee shall be computed on the basis of actual days elapsed and a year of 360 days. 
  
 3.4    Account
Deductions.    Without limiting its set-off rights, the Bank may at its option deduct any principal or interest payments due from the Borrower hereunder or under the Note from the Borrower’s account #1-536-9086-7160
maintained with the Bank. 
  
 ARTICLE IV 
  
 PAYMENTS, PREPAYMENTS, REDUCTION OR TERMINATION 
 OF THE CREDIT AND FUNDING OF THE BANK 
  
 4.1    Repayment.    The entire outstanding principal balance of the Loan, together with all accrued
and unpaid interest thereon, shall be due and payable on the Termination Date. 
  
 4.2    Prepayments. 
  
 (a)    The Borrower may, upon at least two Business Days’ prior written or telephonic notice received by the Bank
in the case of any Fixed LIBOR Advance and at any time in the case of any other Advance, prepay the Loan, in whole or in part. Any such prepayment must be accompanied by accrued and unpaid interest on the amount prepaid. Each partial prepayment
shall be in an amount of $100,000 or an integral multiple thereof. 
  
 (b)    All prepayments, whether or not following the occurrence of an Event of Default, shall be subject to the provisions (including payments of fees, costs, and expenses) of Sections 2.5 and 3.1
hereof. 
  
 4.3    Payments.    Payments and prepayments of principal of, and interest on, the Note and all fees, expenses and other obligations under the Loan Documents shall be made without
set-off or counterclaim in immediately available funds not later than 4:00 p.m., Portland time, on the dates due at the main office of the Bank in Portland, Oregon. Funds received on any day after such time shall be deemed to have been received on
the next Business Day. Subject to the definition of the term “Loan Period,” whenever any payment to be made hereunder or on the Note shall be stated to be due on a day that is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the computation of any interest or fees. 
  
 4.4    Optional Reduction or Termination of Commitment.    The Borrower may, at any time, upon no
less than five Business Days’ prior written notice received by the Bank, reduce the Commitment, with any such reduction in a minimum amount of $1,000,000 or an integral multiple thereof. Upon any reduction in the Commitment pursuant to this
Section 4.4 the Borrower shall pay to the Bank the amount, if any, by which the unpaid principal amount of the outstanding Loan plus the Letter of Credit Obligations exceeds the Commitment as so 

  

 11 

 
reduced. Amounts so paid cannot be reborrowed. The Borrower may, at any time, upon not less than five Business Days prior written notice to the Bank,
terminate the Commitment in its entirety. Upon termination of the Commitment pursuant to this section, the Borrower shall pay to the Bank the full amount of the outstanding Loan, all accrued and unpaid interest thereon, all unpaid fees accrued to
the date of such termination and all other unpaid obligations of the Borrower to the Bank hereunder. All payments described in this section are subject to the provisions of Sections 2.5 and 3.1. Notwithstanding the foregoing, the Commitment may not
be reduced to an amount below outstanding Letter of Credit Obligations, or terminated, if Letters of Credit are outstanding. 
  
 ARTICLE V 
  
 ADDITIONAL PROVISIONS RELATING 
 TO LOAN AND LETTERS OF CREDIT 

 
 5.1    Increased Costs. 
  
 If, on or after the date of this Agreement, as a result of any law, rule,
regulation, treaty or directive, or any change therein or in the interpretation or administration thereof, or compliance by the Bank with any request or directive (whether or not having the force of law) from any court, central bank, governmental
authority, agency or instrumentality, or comparable agency: 
  
 (a)    Any tax, duty or other charge with respect to the Loan, the Note or the Commitment is imposed, modified or deemed applicable, or the basis of taxation of payments to the Bank of interest or
principal of the Loan or of the Facility Fees (other than taxes imposed on the overall net income of the Bank) is changed; 
  
 (b)    Any reserve, special deposit, special assessment or similar requirement against assets of, deposits with or for
the account of, or credit extended by, the Bank is imposed, modified or deemed applicable; 
  
 (c)    Any increase in the amount of capital required or expected to be maintained by the Bank or any Person
controlling the Bank is imposed, modified or deemed applicable; or 
  
 (d)    Any other condition affecting this Agreement or the Commitment is imposed on the Bank or the relevant funding markets; 
  
 And the Bank determines that, by reason thereof, the cost to the Bank of making or maintaining the Loan, issuing or
participating in the Letters of Credit or extending the Commitment is increased, or the amount of any sum receivable by the Bank hereunder or under the Note in respect of any Loan or Letters of Credit is reduced; 
  
 Then, the Borrower shall pay to the Bank upon demand such additional amount
or amounts as will compensate the Bank (or the controlling Person in the instance of (c) above) for such additional costs or reduction (provided that the Bank has not been compensated for such additional cost or reduction in the calculation of the
LIBOR Reserve Rate). Determinations by 

  

 12 

 
the Bank for purposes of this Section 5.1 of the additional amounts required to compensate the Bank shall be conclusive in the absence of manifest error. In
determining such amounts, the Bank may use any reasonable averaging, attribution and allocation methods. 
  
 5.2    Deposits Unavailable or Interest Rate Unascertainable or Inadequate; Impracticability. 
  
 If the Bank in good faith determines (which determination shall be
conclusive and binding on the parties hereto) that: 
  
 (a)    Deposits of the necessary amount for the relevant Loan Period for any LIBOR Advance are not available to the Bank in the relevant markets or that, by reason of circumstances affecting such market, adequate and
reasonable means do not exist for ascertaining the LIBOR Rate for such Loan Period; 
  
 (b)    The LIBOR Rate will not adequately and fairly reflect the cost to the Bank of making or funding the LIBOR
Advance for a relevant Loan Period; or 
  
 (c)    The making or funding of LIBOR Advances has become impracticable as a result of any event occurring after the date of this Agreement which, in the opinion of the Bank, materially and adversely affects such
Advances or the Bank’s Commitment to make such Advances or the relevant market; 
  
 The Bank shall promptly give notice of such determination to the Borrower, and (i) any notice of a new LIBOR Advance previously given by the Borrower and not yet borrowed or converted shall be deemed to be a notice to
make an advance bearing interest at the Prime Rate, (ii) any outstanding Fixed LIBOR Advance shall be deemed to be converted to an advance bearing interest at the Prime Rate as of the last day of the current Loan Period with respect thereto, and
(iii) any Outstanding Floating LIBOR Advance shall be deemed to be converted to an advance bearing interest at the Prime Rate as of the last day of the current month. 
  
 5.3    Changes in Law Rendering LIBOR Advances Unlawful.    If at any
time due to the adoption of any law, rule, regulation, treaty or directive, or any change therein or in the interpretation or administration thereof by any court, central bank, governmental authority, agency or instrumentality, or comparable agency
charged with the interpretation or administration thereof, or for any other reason arising subsequent to the date of this Agreement, it shall become unlawful or impossible for the Bank to make or fund any LIBOR Advance, the obligation of the Bank to
provide such Advance shall, upon the happening of such event, forthwith be suspended for the duration of such illegality or impossibility. If any such event shall make it unlawful or impossible for the Bank to continue any LIBOR Advance previously
made by it hereunder, the Bank shall, upon the happening of such event, notify the Borrower thereof in writing, and the Borrower shall, at the time notified by the Bank, either convert each such unlawful Advance to an advance bearing interest at the
Prime Rate, or repay such Advance in full, together with accrued interest thereon, subject to the provisions of Sections 2.5 and 3.1. 
  

 13 

 5.4    Discretion of the Bank as to Manner of
Funding.    Notwithstanding any provision of this Agreement to the contrary, the Bank shall be entitled to fund and maintain its funding of all or any part of the Loan in any manner it elects; it being understood,
however, that for purposes of this Agreement, all determinations hereunder shall be made as if the Bank had actually funded and maintained each LIBOR Advance during the Loan Period for such Advance through the purchase of deposits having a term
corresponding to such Loan Period and bearing an interest rate equal to the LIBOR Rate for such Loan Period (whether or not the Bank shall have granted any participations in such Advances). 
  
 5.5    Claims for Increased
Costs.    The Bank shall not be entitled to compensation under Section 5.1 for any increased costs incurred by the Bank unless the Bank shall have notified the Borrower of such increased costs not more than 90 days after
the date on which the Bank became aware of such increased costs. 
  
 ARTICLE VI 
  
 CONDITIONS PRECEDENT

  
 6.1    Conditions of Initial
Advance.    The obligation of the Bank to make the initial Advance hereunder shall be subject to the satisfaction of the following conditions precedent, in addition to the applicable conditions precedent set forth in
Section 6.2 below: 
  
 (a)    The Bank shall have received all of the following, in form and substance satisfactory to the Bank, each duly executed and certified or dated the date of the initial Loan or such other date as is satisfactory to
the Bank: 
  
 (i)    The
Note; 
  
 (ii)    The
Guaranties; 
  
 (iii)    The
Intercreditor Agreement; 
  
 (iv)    A copy of the corporate resolutions of the Borrower authorizing the execution, delivery and performance of the Loan Documents, certified by the Secretary or an Assistant Secretary of the Borrower; 
  
 (v)    A copy of the corporate
resolutions of the Guarantors authorizing the execution, delivery and performance of the Guaranty, certified by the Secretary or an Assistant Secretary of Guarantors; 
  
 (vi)    An incumbency certificate showing the names and titles, and bearing the
signatures of, the officers of the Borrower authorized to execute the Loan Documents and to request the Loan hereunder, certified by the Secretary or an Assistant Secretary of the Borrower; 
  
 (vii)    Incumbency certificates showing
the names and titles, and bearing the signatures of, the officers of the Guarantors authorized to execute the Guaranty, certified by the Secretary or an Assistant Secretary of the Guarantors; 
  

 14 

 (viii)    A status certificate for the Borrower and each Guarantor in
the jurisdiction of its incorporation, certified by the appropriate governmental officials; 
  
 (ix)    Copies of the Articles or Certificate of Incorporation and the By-Laws of the Borrower and each Guarantor with
all amendments thereto, certified by the Secretary or an Assistant Secretary of the Borrower; and 
  
 (x)    An opinion of counsel to the Borrower, addressed to the Bank, in substantially the form of Exhibit D.

  
 (b)    Payment of the
expenses of the Bank as provided in Section 11.4 hereof. 
  
 6.2    Conditions Precedent to all Advances.    The obligation of the Bank to make any Advance hereunder (including the initial Advance) shall be subject to the satisfaction of the
following conditions precedent (and each request for an Advance shall be deemed a representation and warranty by the Borrower that the following have been satisfied): 
  
 (a)    Before and after giving effect to such Advance, the representations and
warranties contained in Article VII shall be true and correct in all material respects, as though made on the date of such Advance (except to the extent such representation or warranty expressly relates to an earlier date). 
  
 (b)    Before and after giving effect to
such Advance, no Default or Event of Default shall have occurred and be continuing. 
  
 ARTICLE VII 
  
 REPRESENTATIONS AND WARRANTIES 
  
 To induce the
Bank to enter into this Agreement, and to make the Loan and issue Letters of Credit hereunder, the Borrower represents and warrants to the Bank: 
  
 7.1    Organization, Standing, Etc.    The Borrower and each of the Guarantors are duly organized
and validly existing and if applicable in good standing under the laws of their respective jurisdictions of organization and have all requisite power and authority to carry on their respective businesses as now conducted, to enter into the Loan
Documents to which they are a party, and to perform their obligations under such Loan Documents. The Borrower and each of the Guarantors are duly qualified and in good standing as a foreign corporation in each jurisdiction in which the failure to
qualify would be an Adverse Event. 
  
 7.2    Authorization and Validity.    The execution, delivery and performance by the Borrower of the Loan Documents have been duly authorized by all necessary corporate action by the
Borrower, and the Loan Documents constitute the legal, valid and binding obligations of the Borrower, enforceable against the Borrower in accordance with their respective terms, subject to limitations as to enforceability which might result from
bankruptcy, insolvency, moratorium and other similar laws affecting creditors’ rights generally and subject to limitations on the availability of equitable remedies. 
  

 15 

 7.3    No Conflict; No Default.    The execution,
delivery and performance by the Borrower of the Loan Documents will not (a) violate any provision of any law, statute, rule or regulation or any order, writ, judgment, injunction, decree, determination or award of any court, governmental agency or
arbitrator presently in effect having applicability to the Borrower, (b) violate or contravene any provisions of the Articles (or Certificate) of Incorporation or by-laws of the Borrower, or (c) result in a breach of or constitute a default under
any indenture, loan or credit agreement or any other agreement, lease or instrument to which the Borrower is a party or by which it or any of its properties may be bound or result in the creation of any Lien on any asset of the Borrower or any
Subsidiary. Neither the Borrower nor any Guarantor is in default under or in violation of any such law, statute, rule or regulation, order, writ, judgment, injunction, decree, determination or award or any such indenture, loan or credit agreement or
other agreement, lease or instrument in any case in which the consequences of such default or violation would be an Adverse Event. 
  
 7.4    Government Consent.    No order, consent, approval, license, authorization or validation of,
or filing, recording or registration with, or exemption by, any governmental or public body or authority is required on the part of the Borrower to authorize, or is required in connection with the execution, delivery and performance of, or the
legality, validity, binding effect or enforceability of, the Loan Documents. 
  
 7.5    Financial Statements and Condition.    The Borrower’s audited consolidated financial statements and its unaudited consolidated financial statements as
heretofore furnished to the Bank have been prepared in accordance with GAAP or in accordance with SAP on a consistent basis and fairly present the financial condition of the Borrower and its Subsidiaries as at such dates and the results of their
operations and changes in financial position for the respective periods then ended, subject, in the case of interim financial statements, to the absence of footnotes and year-end adjustments. As of the dates of such financial statements, neither the
Borrower nor any Subsidiary had any material obligation, contingent liability, liability for taxes or long-term lease obligation that is not reflected in such financial statements or in a note thereto. Since the dates of the most recent of such
financial statements, no Adverse Event has occurred. 
  
 7.6    Litigation and Contingent Liabilities.    Except as described in Exhibit E or in the financial statements (or a note thereto) furnished to the Banks, there are no actions, suits
or proceedings pending or, to the knowledge of the Borrower, threatened against or affecting the Borrower or any Subsidiary or any of their properties before any court or arbitrator, or any governmental department, board, agency or other
instrumentality which, if determined adversely to the Borrower or any Subsidiary, would be an Adverse Event. Except as described in Exhibit F or in the financial statements (or a note thereto) furnished to the Banks, neither the Borrower nor any
Subsidiary has any contingent liabilities that are material to the Borrower and the Subsidiaries as a consolidated enterprise. 
  
 7.7    Compliance.    The Borrower and the Guarantors are in material compliance with all statutes
and governmental rules and regulations applicable to them. 
  
 7.8    Environmental, Health and Safety Laws.    There does not exist any violation by the Borrower or any Guarantor of any applicable federal, state or local law, rule or 

  

 16 

 
regulation or order of any government, governmental department, board, agency or other instrumentality relating to environmental, pollution, health or safety
matters which will or could reasonably be expected to impose a material liability on the Borrower or a Guarantor or which would or could reasonably be expected to require a material expenditure by the Borrower or such Guarantor to cure. Neither the
Borrower nor any Guarantor has received any notice to the effect that any part of its operations or properties is not in material compliance with any such law, rule, regulation or order or notice that it or its property is the subject of any
governmental investigation evaluating whether any remedial action is needed to respond to any release of any toxic or hazardous waste or substance into the environment, the consequences of which non-compliance or remedial action would be an Adverse
Event. 
  
 7.9    ERISA.    Each Plan complies with all material applicable requirements of ERISA and the Code and with all material applicable rulings and regulations issued under the provisions
of ERISA and the Code setting forth those requirements. No Reportable Event, other than a Reportable Event for which the reporting requirements have been waived by regulations of the PBGC, has occurred and is continuing with respect to any Plan. All
of the minimum funding standards applicable to such Plans have been satisfied and there exists no event or condition which would permit the institution of proceedings to terminate any Plan under Section 4042 of ERISA. 
  
 7.10    Regulation
U.    Neither the Borrower nor any Guarantor is engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (as defined in Regulation U of the Board of Governors of the Federal
Reserve System) and no part of the proceeds of the Loan will be used to purchase or carry margin stock or for any other purpose which would violate any of the margin requirements of the Board of Governors of the Federal Reserve System. 

 
 7.11    Ownership of
Property.    Each of the Borrower and the Guarantors has good and marketable title to its real properties and good and sufficient title to or right to use its other properties, including all properties and assets referred
to as owned by the Borrower and its Subsidiaries in the audited financial statements of the Borrower referred to in Section 7.5 (other than property disposed of since the date of such financial statements in the ordinary course of business).

  
 7.12    Taxes.    Each of the Borrower and the Guarantors has filed all federal, state and local tax returns required to be filed and has paid or made provision for the payment of all
taxes due and payable pursuant to such returns and pursuant to any assessments made against it or any of its property and all other taxes, fees and other charges imposed on it or any of its property by any governmental authority (other than taxes,
fees or charges the amount or validity of which is currently being contested in good faith by appropriate proceedings and with respect to which reserves in accordance with GAAP have been provided on the books of the Borrower). No tax Liens have been
filed and no material claims are being asserted with respect to any such taxes, fees or charges, except as disclosed in the Borrower’s financial statements (or a note thereto) furnished to the Bank. The charges, accruals and reserves on the
books of the Borrower in respect of taxes and other governmental charges are adequate 

  

 17 

 7.13    Trademarks, Patents.    Each of the
Borrower and the Guarantors possesses or has the right to use all of the patents, trademarks, trade names, service marks and copyrights, and applications therefor, and all technology, know-how, processes, methods and designs which are material to
the conduct of its business, without known conflict with the rights of others. 
  
 7.14    Investment Company Act.    Neither the Borrower nor any Guarantor is an “investment company” or a company “controlled” by an investment
company within the meaning of the Investment Company Act of 1940, as amended. 
  
 7.15    Public Utility Holding Company Act.    Neither the Borrower nor any Guarantor is a “holding company” or a “subsidiary company” of a
holding company or an “affiliate” of a holding company or of a subsidiary company of a holding company within the meaning of the Public Utility Holding Company Act of 1935, as amended. 
  
 7.16    Subsidiaries.    Exhibit G sets forth as of the date of this Agreement a list of all Subsidiaries and the number and percentage of the shares of each class of capital stock or
other equity interest owned beneficially or of record by the Borrower or any Subsidiary therein, and the jurisdiction of organization of each Subsidiary. 
  
 7.17    Partnerships and Joint Ventures.    Exhibit H sets forth as of the date of this Agreement a
list of all partnerships or joint ventures in which the Borrower or any Subsidiary is a partner (limited or general) or joint venturer. 
  
 ARTICLE VIII 
  
 AFFIRMATIVE COVENANTS 
  
 From the date of this Agreement and thereafter until the Loan and all other liabilities and obligations of the Borrower to the Bank hereunder and under the Note have been paid in full, unless the Bank shall otherwise
expressly consent in writing, the Borrower will do, and will cause each Guarantor to do, all of the following: 
  
 8.1    Financial Statements and Reports.    Furnish to the Bank: 
  
 (a)    As soon as available and in any
event within 120 days after the end of each fiscal year of the Borrower, the consolidated annual financial statements of the Borrower (and its Subsidiaries), and SMI prepared on a consolidated basis and in conformity with GAAP, consisting of at
least statements of income, cash flow, changes in financial position and shareholders’ equity, and a consolidated balance sheet as at the end of such year, setting forth in each case in comparative form corresponding figures from the previous
year, certified without qualification by independent certified public accountants of nationally recognized standing selected by the Borrower, together with any management letters, management reports or other supplementary comments or reports to the
Borrower or its board of directors furnished in writing by such accountants, and a statement by the accounting firm performing such audit stating that it has reviewed this Agreement and that in performing its examination nothing came to its
attention that 

  

 18 

 
caused it to believe that any Default or Event of Default exists, or, if such Default or Event of Default exists, describing its nature. 
  
 (b)    As soon as available and in any
event within 120 days after the end of each fiscal year of the Borrower, the unaudited annual financial statements of (i) SIC prepared in conformity with SAP certified by the Borrower’s chief financial officer or controller, consisting of at
least statements of assets, liabilities, surplus and other funds, operations and cash flow setting forth in each case in comparative form corresponding figures from the previous year and (ii) SREI prepared in conformity with GAAP and consisting of
at least statements of income, cash flow, changes in financial position and shareholders’ equity, and a consolidated balance sheet as at the end of such year, setting forth in each case in comparative form corresponding figures from the
previous year. 
  
 (c)    As
soon as available and in any event within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower, the unaudited financial statements of the Borrower prepared in conformity with GAAP, the unaudited
financial statements of SIC prepared in conformity with SAP, and the unaudited financial statements of SMI and SREI prepared in conformity with GAAP (except for the absence of footnotes and subject to year-end audit adjustments), each certified by
the Borrower’s chief financial officer or controller, consisting of statements of the types referenced in Sections 8.1(a) and 8.1(b) for such quarter and for the period from the beginning of such fiscal year to the end of such quarter, and as
of the end of such quarter. 
  
 (d)    Together with the financial statements furnished by the Borrower under Sections 8.1(a) and 8.1(c), a Compliance Certificate. 
  
 (e)    As soon as available and in any event within 45 days after the end of each fiscal
quarter of the Borrower, the Borrower’s internal Quarterly Investment Division Report describing investments and returns on investments made by the Borrower and its Subsidiaries, as such report may be amended or modified from time to time,
signed by the Borrower’s chief financial officer or controller. 
  
 (f)    Promptly upon an Executive Officer of the Borrower becoming aware of any Default or Event of Default, a notice describing the nature thereof and what action the Borrower proposes to take
with respect thereto. 
  
 (g)    Promptly upon an Executive Officer of the Borrower becoming aware of any Reportable Event (other than a Reportable Event for which the reporting requirements have been waived by PBGC regulations) or any
“prohibited transaction” (as defined in Section 4975 of the Code), a notice specifying the nature thereof and what action the Borrower proposes to take with respect thereto, and, if and when received, copies of any notice from PBGC of
intention to terminate or have a trustee appointed for any Plan. 
  
 (h)    Promptly upon the mailing or filing thereof, copies of all financial statements, reports and proxy statements mailed to the Borrower’s stockholders, and 

  

 19 

 
copies of all registration statements, periodic reports and other documents, including any actuary’s opinion, filed by the Borrower or any of its
Subsidiaries with the Department. 
  
 (i)    Promptly upon an Executive Officer of the Borrower becoming aware of the occurrence thereof, notice of the institution of any litigation, arbitration or governmental proceeding, or the rendering of a judgment or
decision in such litigation or proceeding, which is an Adverse Event, and the steps being taken by the Person(s) affected by such proceeding. 
  
 (j)    Promptly upon an Executive Officer of the Borrower becoming aware of the occurrence thereof, notice of any
violation as to any environmental matter by the Borrower or any Guarantor and of the commencement of any judicial or administrative proceeding relating to health, safety or environmental matters, which will or reasonably could be expected to impose
a material liability on the Borrower or such Guarantor to any Person or which will require a material expenditure by the Borrower or such Guarantor to cure any alleged problem or violation. 
  
 (k)    Prior to making any material
change in its current investment policy, a notice describing such change. 
  
 (l)    From time to time, such other information regarding the business, operation and financial condition of the Borrower and the Subsidiaries as the Bank may reasonably request. 
  
 8.2    Existence.    Except as otherwise permitted in Section 9.1, maintain its existence under the laws of its jurisdiction of organization and its qualification to transact business in
each jurisdiction in which the failure to qualify would be an Adverse Event. 
  
 8.3    Insurance.    Maintain with financially sound and reputable insurance companies such insurance as may be required by law and such other insurance in such
amounts and against such hazards as is customary in the case of reputable corporations engaged in the same or similar business and similarly situated. 
  
 8.4    Payment of Taxes and Claims.    File all tax returns and reports which are required by law to
be filed by it and pay before they become delinquent all taxes, assessments and governmental charges and levies imposed upon it or its property and all claims or demands of any kind (including, without limitation, those of suppliers, mechanics,
carriers, warehouses, landlords and other like Persons) which, if unpaid, might result in the creation of a Lien upon its property; provided that the foregoing items need not be paid if they are being contested in good faith by appropriate
proceedings, and as long as the Borrower’s or such Subsidiary’s title to its property is not materially adversely affected, its use of such property in the ordinary course of its business is not materially interfered with and adequate
reserves with respect thereto have been set aside on the Borrower’s or such Subsidiary’s books in accordance with GAAP. 
  
 8.5    Inspection.    Permit any Person designated by the Bank to visit and inspect any of its
properties, corporate books and financial records, to examine and to make copies of its books of accounts and other financial records, and to discuss the affairs, finances and accounts of 

  

 20 

 
the Borrower and the Subsidiaries with, and to be advised as to the same by, its officers, all at such reasonable times and intervals as the Bank may
designate. The cost and expense of the first two such visits and inspections during any fiscal year shall be at the expense of the Borrower, with all other visits and inspections to be at the Bank’s expense, provided, however, that any visit
and inspection during the existence of a Default or an Event of Default shall be at Borrower’s expense. 
  
 8.6    Maintenance of Properties.    Maintain and preserve all of its properties necessary or useful
in the proper conduct of its business in good working order and condition in accordance with the general practice of other corporations of similar character and size, ordinary wear and tear excepted. 
  
 8.7    Books and
Records.    Keep adequate and proper records and books of account in which full and correct entries will be made of its dealings, business and affairs. 
  
 8.8    Compliance.    Comply in all material respects with all laws,
rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject. 
  
 8.9    ERISA.    Maintain each Plan in compliance with all material applicable requirements of ERISA
and of the Code and with all material applicable rulings and regulations issued under the provisions of ERISA and of the Code. 
  
 8.10    Environmental Matters.    Observe and comply with all laws, rules, regulations and orders of
any government or government agency relating to health, safety, pollution, hazardous materials or other environmental matters to the extent non-compliance would be an Adverse Event. 
  
 8.11    Financial Covenants of the Borrower. 
  
 (a)    Maintain as of the end of each
fiscal quarter a ratio of Funded Debt to Net Worth that is less than or equal to .50 to 1.0. 
  
 (b)    Maintain a Fixed Charge Coverage Ratio, calculated as of the end of each fiscal quarter for the immediately
preceding 12-month period, that is greater than or equal to 2.50 to 1.0. 
  
 8.12    Financial Covenants of SIC.    Cause SIC to comply with the following financial covenants: 
  
 (a)    Maintain, as of the end of each fiscal year of SIC, a Risk-Based Capital
Percentage that is greater than or equal to 350 percent; and 
  
 (b)    Maintain, as of the end of each fiscal quarter of SIC calculated on a year-to-date basis, a Net Income to Total Income Percentage that is greater than or equal to zero. 
  
 8.13    Material
Transactions.    Notify the Bank at least 14 days prior to entering into any agreement regarding (a) any material transaction outside the Borrower’s (or any 

  

 21 

 
Subsidiary’s) ordinary course of business and (b) any purchase or sale of a material block of insurance policies from or to another company. 

 
 8.14    Licenses.    Obtain and maintain all material licenses, authorizations, consents, filings, exemptions, registrations and other governmental approvals necessary in connection with
the execution, delivery and performance of the Loan Documents, the consummation of the transactions therein contemplated or the operation and conduct of its business and ownership of its properties. 
  
 ARTICLE IX  
  
 NEGATIVE COVENANTS 
  
 From the date of this Agreement and thereafter until the Loan and all other
liabilities and obligations of the Borrower to the Bank hereunder and under the Note have been paid in full, unless the Bank shall otherwise expressly consent in writing, the Borrower will not, and will not permit any Guarantor to, do any of the
following: 
  
 9.1    Merger.    Merge or consolidate or enter into any analogous reorganization or transaction with any Person; provided, however, the Borrower or any Guarantor may merge or
consolidate with any other Person so long as (i) the Borrower or such Guarantor shall be the continuing or surviving Person, and (ii) immediately before and after giving effect to such merger, there shall be no Default or Event of Default.

  
 9.2    Sale of
Assets.    Sell, transfer, lease or otherwise convey all or substantially all of its assets. 
  
 9.3    Plans.    Permit any condition to exist in connection with any Plan which might constitute
grounds for the PBGC to institute proceedings to have such Plan terminated or a trustee appointed to administer such Plan, permit any Plan to terminate under any circumstances which would cause the lien provided for in Section 4068 of ERISA to
attach to any property, revenue or asset of the Borrower or any Subsidiary. 
  
 9.4    Change in Nature of Business.    Make any material change in the nature of the business of the Borrower and its Subsidiaries, taken as a whole, carried on
at the date hereof. 
  
 9.5    Subsidiaries.    Take any action or permit any Subsidiary to take any action, which would result in the Borrower’s direct or indirect ownership interest in SIC or SMI to be
less than 100 percent. 
  
 9.6    Other
Agreements.    Enter into any agreement, bond, note or other instrument with or for the benefit of any Person other than the Bank which would: (a) prohibit the Borrower or any Guarantor from granting, or otherwise limit
the ability of the Borrower or such Guarantor to grant, to the Bank any Lien on any assets or properties of the Borrower or such Guarantor (other than prohibitions or limitations (i) existing on the date of this Agreement, (ii) affecting the assets
of any Person acquired after the date of this Agreement, and existing on the date of the acquisition of the Person, (iii) existing under, or by reason of, applicable law, or 

  

 22 

 
(iv) constituting an encumbrance or restriction on any property or assets in an agreement relating to the acquisition of such property or asset that is
otherwise permitted by the terms of this Agreement); or (b) be violated or breached by the Borrower’s performance of its obligations under the Loan Documents. 
  
 9.7    Unconditional Purchase Obligations.    Enter into or be
a party to any contract for the purchase or lease of materials, supplies or other property or services involving payments of more than $25,000,000 if such contract requires that payment be made by it regardless of whether or not delivery is ever
made of such materials, supplies or other property or services. 
  
 9.8    Transactions with Related Parties.    Enter into or be a party to any transaction or arrangement, including, without limitation, the purchase, sale, lease or exchange of
property or the rendering of any service, with any Related Party, except in the ordinary course of and pursuant to the reasonable requirements of the Borrower’s or the applicable Guarantor’s business and upon fair and reasonable terms no
less favorable to the Borrower or such Guarantor than would obtain in a comparable arm’s-length transaction with a Person not a Related Party. 
  
 9.9    Use of Proceeds.    Permit any proceeds of the Loan to be used, either directly or
indirectly, for the purpose, whether immediate, incidental or ultimate, of “purchasing or carrying any margin stock” within the meaning of Regulation U of the Federal Reserve Board, as amended from time to time, and furnish to the Bank,
upon its request, a statement in conformity with the requirements of Federal Reserve Form U-1 referred to in Regulation U. 
  
 ARTICLE X 
  
 EVENTS OF DEFAULT AND REMEDIES 
  
 10.1    Events of Default.    The occurrence of any one or more of the following events shall constitute an Event of Default: 
  
 (a)    The Borrower shall fail to make
when due, whether by acceleration or otherwise, any payment of principal or shall fail to pay, within 10 days of the due date thereof, any payment of interest on the Note or any fee or other amount required to be made to the Bank pursuant to the
Loan Documents; 
  
 (b)    Any representation or warranty made or deemed to have been made by or on behalf of the Borrower or any Guarantor in the Loan Documents or on behalf of the Borrower or any Guarantor in any certificate, statement,
report or other writing furnished by or on behalf of the Borrower to the Bank pursuant to the Loan Documents or any other instrument, document or agreement shall prove to have been false or misleading in any material respect on the date as of which
the facts set forth are stated or certified or deemed to have been stated or certified; 
  
 (c)    The Borrower shall fail to comply with any agreement, covenant, condition, provision or term contained in this
Agreement or in any of the other Loan 
  

 23 

 
Documents for 15 days after written notice thereof has been given to the Borrower by the Bank; 
  
 (d)    The Borrower or any Guarantor shall become insolvent or shall generally not pay
its debts as they mature or shall apply for, shall consent to, or shall acquiesce in the appointment of a custodian, trustee or receiver of the Borrower or such Guarantor or for a substantial part of the property thereof or, in the absence of such
application, consent or acquiescence, a custodian, trustee or receiver shall be appointed for the Borrower or a Guarantor or for a substantial part of the property thereof and shall not be discharged within 60 days; 
  
 (e)    Any bankruptcy, reorganization,
debt arrangement or other proceedings under any bankruptcy or insolvency law shall be instituted by or against the Borrower or a Guarantor, and, if instituted against the Borrower or a Guarantor, shall have been consented to or acquiesced in by the
Borrower or such Guarantor, or shall remain undismissed for 60 days, or an order for relief shall have been entered against the Borrower or such Guarantor, or the Borrower or any Guarantor shall take any corporate action to approve institution of,
or acquiescence in, such a proceeding; 
  
 (f)    Any dissolution or liquidation proceeding shall be instituted by or against the Borrower or a Guarantor and, if instituted against the Borrower or such Guarantor, shall be consented to or acquiesced in by the
Borrower or such Guarantor or shall remain for 60 days undismissed, or the Borrower or any Guarantor shall take any corporate action to approve institution of, or acquiescence in, such a proceeding; 
  
 (g)    A judgment or judgments for the
payment of money in excess of the sum of $10,000,000 in the aggregate shall be rendered against the Borrower or a Guarantor and the Borrower or such Guarantor shall not discharge the same or provide for its discharge in accordance with its terms, or
procure a stay of execution thereof, prior to any execution on such judgments by such judgment creditor, within 30 days from the date of entry thereof, and within said period of 30 days, or such longer period during which execution of such judgment
shall be stayed, appeal therefrom and cause the execution thereof to be stayed during such appeal; 
  
 (h)    The initiation by the Borrower, any ERISA Affiliate or the PBGC of a distress termination of any Plan under
Section 4041(c) of ERISA; 
  
 (i)    The maturity of any Indebtedness of the Borrower or any Guarantor in excess of $10,000,000 (other than Indebtedness under this Agreement) shall be accelerated, or the Borrower or a Guarantor shall fail to pay any
such Indebtedness when due or, in the case of such Indebtedness payable on demand, when demanded, or any event shall occur or condition shall exist and shall continue for more than the period of grace, if any, applicable thereto and shall have the
effect of causing, or permitting (any required notice having been given and grace period having expired) the holder of any such Indebtedness or any trustee or other Person acting on behalf of such holder to cause, such Indebtedness to become due
prior to its stated maturity or to realize upon any collateral given as security therefor; 
  

 24 

 (j)    Either SIC or SMI shall cease to be a wholly owned Subsidiary
of the Borrower; and 
  
 (k)    Any default or event of default occurs under or Borrower or any Guarantor fails to pay, perform or comply with any term, covenant or obligation in any loan agreement, promissory note or any other agreement,
document or instrument between such Person and the Bank. 
  
 10.2    Remedies.    If (a) any Event of Default described in Sections 10.1(d), (e) or (f) shall occur with respect to the Borrower, the Commitment shall automatically terminate
and the outstanding unpaid principal balance of the Note, the accrued interest thereon and all other obligations of the Borrower to the Bank under the Loan Documents shall automatically become immediately due and payable; or (b) any other Event of
Default shall occur and be continuing, which event shall continue for 10 days after written notice from the Bank to the Borrower, then the Bank may take any or all of the following actions: (i) declare the Commitment terminated, whereupon the
Commitment shall terminate, (ii) declare that the outstanding unpaid principal balance of the Note, the accrued and unpaid interest thereon and all other obligations of the Borrower to the Bank under the Loan Documents to be forthwith due and
payable, whereupon the Note, all accrued and unpaid interest thereon and all such obligations shall immediately become due and payable, in each case without demand or notice of any kind, all of which are hereby expressly waived, anything in this
Agreement or in the Note to the contrary notwithstanding, and (iii) exercise all rights and remedies under the Loan Documents, and (iv) enforce all rights and remedies under any applicable law. After an Event of Default has occurred, all amounts due
hereunder shall bear interest at the Prime Rate as announced from time to time plus 2.00 percent per annum. 
  
 10.3    Letters of Credit.    In addition to the foregoing remedies, if any Event of Default
described in Section 10.1(d), (e) or (f) shall have occurred, or if any other Event of Default shall have occurred and the Bank shall have declared that the principal balance of the Note is due and payable or if a Letter of Credit is outstanding as
of the Expiry Date, the Borrower shall pay to the Bank an amount equal to the Letter of Credit Obligations. Such payment shall be in immediately available funds or in similar cash collateral acceptable to the Bank and shall be pledged to the Bank.
Such amount shall be held by the Bank in a cash collateral account until the outstanding Letters of Credit are terminated without payment or are paid and Letter of Credit Obligations with respect thereto are paid. In the event the Borrower defaults
in the payment of any Letter of Credit Obligations, the proceeds of the cash collateral account shall be applied to the payment thereof. The Borrower acknowledges and agrees that the Bank would not have an adequate remedy at law for failure by the
Borrower to pay immediately to the Bank the amount provided under this Section 10.3, and that the Bank shall have the right to require the Borrower to perform specifically such undertaking whether or not any of the Letter of Credit Obligations are
due and payable. Upon the failure of the Borrower to make any payment required under this section, the Bank may proceed to use all remedies available at law or equity to enforce the obligation of the Borrower to pay or reimburse the Bank. The
balance of any payment due under this section shall bear interest payable on demand until paid in full at a per annum rate equal to the Prime Rate as announced from time to time plus 2.00 percent. 
  

 25 

 ARTICLE XI 
  
 MISCELLANEOUS 
  
 11.1    Waiver and Amendment.    No failure on the part of the Bank to exercise and no delay
in exercising any power or right hereunder or under any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any power or right preclude any other or further exercise thereof or the exercise of any other
power or right. The remedies herein and in any other instrument, document or agreement delivered or to be delivered to the Bank hereunder or in connection herewith are cumulative and not exclusive of any remedies provided by law. No notice to or
demand on the Borrower not required hereunder or under the Note shall in any event entitle the Borrower to any other or further notice or demand in similar or other circumstances or constitute a waiver of the right of the Bank or the holder of the
Note to any other or further action in any circumstances without notice or demand. 
  
 11.2    Amendments, Etc.    No amendment or waiver of any provision of this Agreement, nor consent to any departure by the Borrower therefrom, shall in any
event be effective unless the same shall be in writing and signed by the Borrower and the Bank and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. 
  
 11.3    Assignments and
Participation. 
  
 (a)    Assignments.    With the prior written consent of the Borrower, the Bank shall have the right, subject to the further provisions of this Section 11.3, to sell or assign all or any part
of the Loan, Note, and other rights and obligations under this Agreement and related documents (such transfer, and “Assignment”) to any commercial lender, other financial institution or other entity (an “Assignee”). Upon such
Assignment becoming effective as provided in Section 11.3(b), the Bank shall be relieved from its obligations hereunder to the extent assumed and undertaken by the Assignee, and to such extent the Assignee shall have the rights and obligations of
the Bank hereunder. Notwithstanding the foregoing, unless otherwise consented to by the Borrower and the Bank, each Assignment shall be in the initial principal amount of not less than $10,000,000 in the aggregate for all Loan and Commitments
assigned, or an integral multiple of $10,000,000 if above such amount. Each Assignment shall be documented by an agreement between the Bank and the Assignee (an “Assignment and Assumption Agreement”) in form and substance satisfactory to
the Bank. 
  
 (b)    Effectiveness of Assignments.    An Assignment shall become effective hereunder when the Borrower shall have been given notice of the Assignment. Upon the Assignment becoming effective,
if requested by the Bank, the Borrower shall make appropriate arrangements so that a new Note is issued to the Bank and the Assignee. 
  
 (c)    Participations.    With the prior written consent of the Borrower, the Bank shall
have the right, subject to the further provisions of this Section 11.3, to grant or sell a participation in all or any part of the Loan and Note (a “Participation”) to any commercial lender, other financial institution or other entity (a
“Participant”). The Borrower agrees 
  

 26 

 
that if amounts outstanding under this Agreement and the Note are due and unpaid, or shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall be deemed to have the right of setoff in respect of its Participation in amounts owing under this Agreement and any Note to the same extent as if the amount of its Participation were owing
directly to it as a Bank under this Agreement or the Note. The Borrower also agrees that each Participant shall be entitled to the benefits of Article V with respect to its Participation, provided that no Participant shall be entitled to receive a
greater amount pursuant to such sections than the transferor Bank would have been entitled to receive in respect of the amount of the Participation transferred by such transferor Bank to such Participant had no such transfer occurred. 
  
 (d)    Limitation of Rights of any
Assignee or Participant.    Notwithstanding anything in the foregoing to the contrary, except in the instance of an Assignment that has become effective as provided in Section 11.3(b), (i) no Assignee or Participant shall
have any direct rights hereunder, (ii) the Borrower shall deal solely with the Bank and shall not be obligated to extend any rights or make any payment to, or seek any consent of the Assignee or Participant, (iii) no Assignment or Participation
shall relieve the Bank from any of its other obligations hereunder and the Bank shall remain solely responsible for the performance hereof, (iv) no Assignee or Participant shall be entitled to require the Bank to take or omit to take any action
hereunder, except that the Bank may agree with such Assignee or Participant that the Bank will not, without such Assignee’s or Participant’s consent, take any action which would, in the case of any principal, interest or fee in which the
Assignee or Participant has an ownership or beneficial interest: (w) extend the final maturity of the Loan or extend the Termination Date, (x) reduce the interest rate on the Loan, or (y) forgive any principal of, or interest on, the Loan or any
fees. 
  
 (e)    Tax
Matters.    The Bank shall not be permitted to enter into any Assignment or Participation with any Assignee or Participant who is not a United States Person unless such Assignee or Participant represents and warrants to such
Bank that, as at the date of such Assignment or Participation, it is entitled to receive interest payments without withholding or deduction of any taxes and such Assignee or Participant executes and delivers to the Bank on or before the date of
execution and delivery of documentation of such Participation or Assignment, a United States Internal Revenue Service Form 1001 or 4224, or any successor to either of such forms, as appropriate, properly completed and claiming complete exemption
from withholding and deduction of all Federal Income Taxes. A “United States Person” means any citizen, national or resident of the United States, any corporation or other entity created or organized in or under the laws of the United
States or any political subdivision hereof or any estate or trust, in each case that is not subject to withholding of United States Federal income taxes or other taxes on payment of interest, principal of fees hereunder. 
  
 (f)    Information.    The Bank may furnish any information concerning the Borrower in the possession of such Bank from time to time to Assignees and Participants and potential Assignees and
Participants, provided that prior to furnishing any confidential information to any such Person, such Person is subject to a confidentiality agreement with respect to such information. 
  

 27 

 (g)    Federal Reserve Bank.    Nothing
herein stated shall limit the right of the Bank to assign any interest herein and in the Note to a Federal Reserve Bank. 
  
 11.4    Costs, Expenses and Taxes.    The Borrower agrees, whether or not any Loan is made
hereunder, to pay on demand all costs and expenses of the following Persons (including the reasonable fees and expenses of counsel and paralegals for such Persons who may be employees of such Persons), incurred in connection with the following
matters: (i) the Bank in connection with the preparation, execution and delivery of the Loan Documents and the preparation, negotiation and execution of any and all amendments to any thereof and (ii) the Bank in connection with the enforcement of
the Loan Documents. The Borrower agrees to pay, and save the Bank harmless from all liability for, any stamp or other taxes which may be payable with respect to the execution or delivery of the Loan Documents. The Borrower agrees to indemnify and
hold the Bank harmless from any loss or expense which may arise or be created by the acceptance of telephonic or other instructions for making the Loan or disbursing the proceeds thereof. The obligations of the Borrower under this Section 11.4 shall
survive any termination of this Agreement. 
  
 11.5    Notices.    Except when telephonic notice is expressly authorized by this Agreement, any notice or other communication to any party in connection with this Agreement shall be in
writing and shall be sent by manual delivery, telegram, telex, facsimile transmission, overnight courier or United States mail (postage prepaid) addressed to such party at the address specified on the signature page hereof, or at such other address
as such party shall have specified to the other party hereto in writing. All periods of notice shall be measured from the date of delivery thereof if manually delivered, from the date of sending thereof if sent by telegram, telex or facsimile
transmission, from the first Business Day after the date of sending if sent by overnight courier, or upon receipt if mailed; provided, however, that any notice to the Bank under Article II or Section 4.4 hereof shall be deemed to have been given
only when received by the Bank. 
  
 11.6    Successors.    This Agreement shall be binding upon the Borrower and the Bank and their respective successors and permitted assigns, and shall inure to the benefit of the
Borrower and the Bank and the successors and permitted assigns of the Bank. The Borrower shall not assign its rights or duties hereunder without the written consent of the Bank, except as expressly permitted herein. 
  
 11.7    Severability.    Any provision of the Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction. 
  
 11.8    Subsidiary References.    The provisions of this Agreement
relating to Subsidiaries shall apply only during such times as the Borrower has one or more Subsidiaries. 
  
 11.9    Captions.    The captions or headings herein and any table of contents hereto are for
convenience only and in no way define, limit or describe the scope or intent of any provision of this Agreement. 
  

 28 

 11.10    Entire Agreement.    The Loan
Documents embody the entire agreement and understanding between the Borrower and the Bank with respect to the subject matter hereof and thereof. This Agreement supersedes all prior agreements and understandings relating to the subject matter hereof.

  
 11.11    Counterparts.    This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and either of the
parties hereto may execute this Agreement by signing any such counterpart. 
  
 11.12    Set Off Rights.    As security for the payment of the indebtedness under the Note, obligations arising under the Loan Documents, and any
other obligations of the Borrower to the Bank of any nature whatsoever (collectively the “Obligations”), the Borrower hereby grants to the Bank a security interest in, a lien on, and an express contractual right to set off against all
depository account balances, cash, and any other property of the Borrower now or hereafter in the possession of the Bank. The Bank may, at any time upon the occurrence of a default hereunder (notwithstanding any notice requirements or cure periods
under this or other agreements between the Borrower and the Bank) exercise the aforesaid right to setoff against the Obligations whether or not the Obligations (including future installments) are then due or have been accelerated, and the Bank may
refuse to allow withdrawals from any account, all without any advance or contemporaneous notice or demand of any kind to the Borrower, such notice and demand being expressly waived. 
  
 11.13    Governing Law.    THE VALIDITY, CONSTRUCTION AND
ENFORCEABILITY OF THIS AGREEMENT AND THE NOTE SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF OREGON, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF, BUT GIVING EFFECT TO FEDERAL LAWS OF THE UNITED STATES APPLICABLE TO NATIONAL
BANKING ASSOCIATIONS. 
  
 11.14    Consent to Jurisdiction.    AT THE OPTION OF THE BANK, THIS AGREEMENT AND THE NOTE MAY BE ENFORCED IN ANY FEDERAL COURT OR OREGON STATE COURT SITTING IN PORTLAND, OREGON;
AND THE BORROWER CONSENTS TO THE JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVES ANY ARGUMENT THAT VENUE IN SUCH FORUMS IS NOT CONVENIENT. IN THE EVENT THE BORROWER COMMENCES ANY ACTION IN ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT
THEORY ARISING DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS AGREEMENT, THE BANK AT ITS OPTION SHALL BE ENTITLED TO HAVE THE CASE TRANSFERRED TO ONE OF THE JURISDICTIONS AND VENUES ABOVE-DESCRIBED, OR IF SUCH TRANSFER CANNOT BE
ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASE DISMISSED WITHOUT PREJUDICE. 
  
 11.15    Waiver of Jury Trial.    THE BORROWER AND THE BANK HEREBY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT AND TO ANY OF THE OTHER LOAN DOCUMENTS, THE OBLIGATIONS HEREUNDER OR THEREUNDER, ANY COLLATERAL SECURING THE OBLIGATIONS, OR ANY TRANSACTION ARISING THEREFROM OR 
  

 29 

 CONNECTED THERETO. THE BORROWER AND THE BANK EACH REPRESENTS TO THE OTHER THAT THIS WAIVER IS KNOWINGLY, WILLINGLY, AND
VOLUNTARILY GIVEN. 
  
 11.16    Confidentiality.    The Bank agrees to hold any confidential information that it may receive from the Borrower pursuant to this Agreement in confidence, except for
disclosure: (a) to legal counsel and accountants for the Bank; (b) to other professional advisors to the Bank, provided that the recipient has accepted such information subject to a confidentiality agreement substantially similar to this section;
(c) to regulatory officials having jurisdiction over the Bank; and (d) as required by law or legal process or in connection with any legal proceeding to which that Bank and the Borrower or any of its Subsidiaries are adverse parties. For purposes of
the foregoing, “confidential information” shall mean any information respecting the Borrower or its Subsidiaries reasonably considered by the Borrower to be confidential, other than (i) information previously filed with any governmental
agency and available to the public, (ii) information previously published in any public medium from a source other than, directly or indirectly, that Bank, and (iii) information previously disclosed by the Borrower or its Subsidiaries to any Person
not associated with the Borrower without a confidentiality agreement or obligation substantially similar to this section. Nothing in this section shall be construed to create or give rise to any fiduciary duty on the part of the Bank to the Borrower
or any other Person. 
  
 11.17    Disclosure.    Under Oregon law, most agreements, promises and commitments made by lenders after October 3, 1989, concerning loans and other credit extensions which
are not for personal, family or household purposes or secured solely by the borrower’s residence must be in writing, express consideration and be signed by the lender to be enforceable. 
  

 30 

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

	 STANCORP FINANCIAL GROUP, INC.

		
	By:	 	 /s/    Cindy J. McPike

	 	

	Title: Vice President and Chief Financial Officer
	 1100 S.W. Sixth Avenue, P11-D
 Portland, Oregon 97204-1093

	Attention:	 	 Treasurer

	Telephone:	 	 (503) 321-7520

	Fax:	 	 (503) 321-7540

	
	U.S. BANK NATIONAL ASSOCIATION
		
	By:	 	 /s/    Thomas J. Corry

	Title: Vice President
	 Oregon Commercial Banking
 4th
Floor
 111 S.W. Fifth Avenue
 Portland, Oregon 97204

Attention: Conan Schleicher
 Telephone: (503) 275-4053
 Fax: (503) 275-5795

  
  
  

 31 

 EXHIBIT A 
  
 REVOLVING LOAN NOTE 
  

	 $75,000,000
	 	 Portland, Oregon
 June 30, 2003

  
 For valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, StanCorp Financial Group, Inc. (“Borrower”) promises and agrees to pay to the order and assigns of U.S. Bank National Association (“Bank”)
at Oregon Commercial Banking, 555 S.W. Oak Street, Suite 400, Portland, Oregon 97204 (or at such other address as Bank may hereafter specify in writing from time to time): (1) on the Termination Date, the total unpaid principal amount advanced by
Bank from time to time under the Credit Agreement dated as of June 30, 2003, between Borrower and Bank (as amended from time to time, the “Credit Agreement”) to or for the benefit of or at the request of Borrower until the Termination
Date, (2) when and as due, interest on the outstanding balance of all advances under this Note at the rates, on the terms, and in the amounts specified in the Credit Agreement, and (3) when and as due, fees, costs, and disbursements provided for in
the Credit Agreement and this Note. 
  
 No amounts shall be
advanced under this Note if, as a result of such Advance, the total unpaid principal amount of the Loan plus all Letter of Credit Obligations would exceed the Commitment. No Advance shall be made under this Note after the Termination Date. Unless
payment in full shall have been previously demanded, Borrower shall pay the entire outstanding principal amount, together with all accrued interest, on the Termination Date. 
  
 Repayment of the indebtedness evidenced by this Note is subject to prepayment and acceleration pursuant to, and is otherwise
governed by, the terms of the Credit Agreement and the agreements and instruments required thereunder. Capitalized terms used herein and not otherwise defined shall have the respective meanings ascribed thereto in the Credit Agreement. 

 
 Borrower also promises and agrees to pay on demand the costs and
disbursements, including reasonable attorney fees, incurred by Bank in collecting this Note, whether or not a civil action, arbitration proceeding, or insolvency proceeding or claim is commenced, tried, or appealed, plus interest thereon at
Bank’s prime rate plus two percent per annum from the date of the demand until payment is received. 
  

 A-1 

 Borrower hereby waives acceptance, presentment, demand, diligence, protest, nonpayment, dishonor and
notice of any of the foregoing. Borrower acknowledges that forbearance by Bank, including any failure to make demand, or other failure by Bank to exercise any right or remedy upon demand or default shall not constitute a waiver or grounds for a
claim of estoppel. 
  

	 STANCORP FINANCIAL GROUP, INC.

		
	By:	 	 /s/    CINDY J. MCPIKE

	 	

		
	Name:	 	 Cindy J. McPike

	 	

		
	Title:	 	 Vice President and Chief Financial Officer

	 	

  

 A-2 

 EXHIBIT B-1 
  
 GUARANTY 
  
 This Guaranty, dated as of June 30, 2003, is made by STANDARD INSURANCE COMPANY, an Oregon corporation (“Guarantor”), in favor of U.S. BANK
NATIONAL ASSOCIATION (the “Bank”). 
  
 Recitals

  
 A.    StanCorp Financial Group, Inc.,
an Oregon corporation (the “Borrower”) and the Bank are parties to a Credit Agreement of even date herewith (as amended, modified, renewed or extended from time to time, the “Credit Agreement”). It is a condition precedent to the
borrowings under the Credit Agreement that Guarantor guarantee the indebtedness and other obligations of the Borrower to the Bank as set forth herein. 
  
 B.    The Borrower owns 100 percent of the outstanding capital stock of Guarantor. Guarantor will derive substantial direct and
indirect economic, financial, and other benefits from the making of the loan to the Borrower pursuant to the Credit Agreement (which benefits are hereby acknowledged by Guarantor). 
  
 Accordingly, to induce the Bank to make such loans, and in consideration thereof, Guarantor hereby agrees as follows:

  
 1.    Definitions.    All capitalized terms used in this Guaranty and not otherwise defined herein shall have the meanings assigned to them in the Credit Agreement. In addition, as used in this
Guaranty, the following terms shall have the following meanings: 
  
 “Event of Default” has the meaning set forth in paragraph 15. 
  
 “Guaranteed Obligations” has the meaning set forth in paragraph 2. 
  
 “Guarantor Documents” means this Guaranty and all other certificates, documents, agreements and instruments delivered to the Bank under or in
connection with this Guaranty. 
  
 “Subordinated Borrower
Debt” has the meaning set forth in paragraph 7. 
  
 2.    Guaranty. 
  
 (a)    Guaranty.    Guarantor hereby absolutely, unconditionally and irrevocably guarantees to the Bank, and its successors, endorsees, transferees and assigns, the full and prompt payment when
due (whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise) and performance of all indebtedness, liabilities and other obligations of the Borrower to the Bank, whether created under, arising out of or in
connection with the Credit Agreement, the Note or any of the other Loan Documents, including all unpaid principal of the Advances, all interest 
  

 B-1-1 

 
accrued thereon, all fees due under the Credit Agreement and all other amounts payable by the Borrower to the Bank thereunder or in connection therewith. The
terms “indebtedness”, “liabilities” and “obligations” are used herein in their most comprehensive sense and include any and all debts, obligations and liabilities, now existing or hereafter arising, whether voluntary or
involuntary and whether due or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined, and whether recovery upon such indebtedness, liabilities and obligations may be or hereafter become unenforceable or shall be an
allowed or disallowed claim under the United States Bankruptcy Code or other applicable law. The foregoing indebtedness, liabilities and other obligations of the Borrower, and all other indebtedness, liabilities and obligations to be paid or
performed by Guarantor in connection with this Guaranty, shall hereinafter be collectively referred to as the “Guaranteed Obligations.” 
  
 (b)    Limitation of Guaranty.    To the extent that any court of competent jurisdiction
shall impose by final judgment under applicable law (including the Uniform Fraudulent Transfer Act and §§544 and 548 of the United States Bankruptcy Code) any limitations on the amount of Guarantor’s liability with respect to the
Guaranteed Obligations which the Bank can enforce under this Guaranty, the Bank accepts such limitation on the amount of Guarantor’s liability hereunder to the extent needed to make this Guaranty and Guarantor Documents fully enforceable and
nonavoidable. 
  
 3.    Liability of
Guarantor.    The liability of Guarantor under this Guaranty shall be irrevocable, absolute, independent and unconditional, and shall not be affected by any circumstance which might constitute a discharge of a surety or
guarantor other than the indefeasible payment and performance in full of all Guaranteed Obligations. In furtherance of the foregoing and without limiting the generality thereof, Guarantor agrees as follows: 
  
 (a)    Guarantor’s liability
hereunder shall be the immediate, direct, and primary obligation of Guarantor and shall not be contingent upon the Bank’s exercise or enforcement of any remedy it may have against the Borrower or any other Person, or against any collateral;

  
 (b)    this Guaranty is a
guaranty of payment and performance when due and not merely of collectability; 
  
 (c)    the Bank may enforce this Guaranty upon the occurrence of an Event of Default notwithstanding the existence of
any dispute between the Bank and the Borrower with respect to the existence of such Event of Default; 
  
 (d)    Guarantor’s payment of a portion, but not all, of the Guaranteed Obligations shall in no way limit,
affect, modify or abridge Guarantor’s liability for any portion of the Guaranteed Obligations remaining unsatisfied; and 
  

 B-1-2 

 (e)    Guarantor’s liability with respect to the Guaranteed
Obligations shall remain in full force and effect without regard to, and shall not be impaired or affected by, nor shall Guarantor be exonerated or discharged by, any of the following events: 
  
 (i)    any bankruptcy or insolvency
proceeding with respect to the Borrower, Guarantor, any other guarantor or any other Person; 
  
 (ii)    any limitation, discharge, or cessation of the liability of the Borrower, Guarantor, any other guarantor or
any other Person for any Guaranteed Obligations due to any statute, regulation or rule of law, or any invalidity or unenforceability in whole or in part of any of the Guaranteed Obligations or the Loan Documents; 
  
 (iii)    any merger, acquisition,
consolidation or change in structure of the Borrower, Guarantor or any other guarantor or Person, or any sale, lease, transfer or other disposition of any or all of the assets or shares of the Borrower, Guarantor, any other guarantor or other
Person; 
  
 (iv)    any
assignment or other transfer, in whole or in part, of the Bank’s interests in and rights under this Guaranty or the other Loan Documents, including the Bank’s right to receive payment of the Guaranteed Obligations, or any assignment or
other transfer, in whole or in part, of the Bank’s interests in and to any collateral; 
  
 (v)    any claim, defense, counterclaim or setoff, other than that of prior performance, that the Borrower, Guarantor,
any other guarantor or other Person may have or assert, including any defense of incapacity or lack of corporate or other authority to execute any of the Loan Documents; 
  
 (vi)    the amendment, modification, renewal, extension, cancellation or surrender of
any Loan Document, any Guaranteed Obligations, any collateral, or the Bank’s exchange, release, or waiver of any collateral; 
  
 (vii)    the Bank’s exercise or nonexercise of any power, right or remedy with respect to any collateral,
including compromise, release, settlement or waiver with or of the Borrower, Guarantor, any other guarantor or any other Person; 
  
 (viii)    the Bank’s vote, claim, distribution, election, acceptance, action or inaction in any insolvency
proceeding related to the Guaranteed Obligations; 
  
 (ix)    any impairment or invalidity of any collateral or any failure to perfect any of the Bank’s liens thereon or therein; and 
  

 B-1-3 

 (x)    any other guaranty, whether by Guarantor or any other Person,
of all or any part of the Guaranteed Obligations or any other indebtedness, obligations or liabilities of the Borrower to the Bank. 
  
 4.    Consents of Guarantor. Guarantor hereby unconditionally consents and agrees that, without notice to or further assent
from Guarantor: 
  
 (a)    the principal amount of the Guaranteed Obligations may be increased or decreased and additional indebtedness or obligations of the Borrower under the Loan Documents may be incurred, by one or more amendments,
modifications, renewals or extensions of any Loan Document or otherwise; 
  
 (b)    the time, manner, place or terms of any payment under any Loan Document may be extended or changed, including by an increase or decrease in the interest rate on any Guaranteed Obligation or
any fee or other amount payable under such Loan Document, by an amendment, modification or renewal of any Loan Document or otherwise; 
  
 (c)    the time for the Borrower’s (or any other Person’s) performance of or compliance with any term,
covenant or agreement on its part to be performed or observed under any Loan Document may be extended, or such performance or compliance waived, or failure in or departure from such performance or compliance consented to, all in such manner and upon
such terms as the Bank may deem proper; 
  
 (d)    the Bank may discharge or release, in whole or in part, any other guarantor or any other Person liable for the payment and performance of all or any part of the Guaranteed Obligations, and may permit or consent to
any such action or any result of such action, and shall not be obligated to demand or enforce payment upon any of the collateral or any other collateral, nor shall the Bank be liable to Guarantor for any failure to collect or enforce payment or
performance of the Guaranteed Obligations from any Person or to realize any collateral therefor; 
  
 (e)    the Bank may take and hold other security (legal or equitable) of any kind, at any time, as collateral for the
Guaranteed Obligations, and may, from time to time, in whole or in part, exchange, sell, surrender, release, subordinate, modify, waive, rescind, compromise or extend such security and may permit or consent to any such action or the result of any
such action, and may apply such security and direct the order or manner of sale thereof; 
  
 (f)    the Bank may request and accept other guaranties of the Guaranteed Obligations and any other indebtedness,
obligations or liabilities of the Borrower to the Bank and may, from time to time, in whole or in part, surrender, release, subordinate, modify, waive, rescind, compromise or extend any such guaranty and may permit or consent to any such action or
the result of any such action; and 
  
 (g)    the Bank may exercise, or waive or otherwise refrain from exercising, any other right, remedy, power or privilege (including the right to accelerate 
  

 B-1-4 

 
the maturity of any Loan and any power of sale) granted by any Loan Document or other security document or agreement, or otherwise available to the Bank,
with respect to the Guaranteed Obligations or any collateral, even if the exercise of such right, remedy, power or privilege affects or eliminates any right of subrogation or any other right of Guarantor against the Borrower; 
  
 all as the Bank may deem advisable, and all without impairing, abridging, releasing or
affecting this Guaranty. 
  
 5.    Guarantor’s Waivers. 
  
 (a)    Certain Waivers.    Guarantor waives and agrees not to assert: 
  
 (i)    any right to require the Bank to marshal assets in favor of the Borrower, Guarantor, any other guarantor or any
other Person, to proceed against the Borrower, any other guarantor or any other Person, to proceed against or exhaust any collateral, to give notice of the terms, time and place of any public or private sale of personal property security
constituting collateral or to pursue any other right, remedy, power or privilege of the Bank whatsoever; 
  
 (ii)    the defense of the statute of limitations in any action hereunder or for the collection or performance of the
Guaranteed Obligations; 
  
 (iii)    any defense arising by reason of any lack of corporate or other authority or any other defense of the Borrower, Guarantor or any other Person; 
  
 (iv)    any defense based upon the Bank’s errors or omissions in the administration
of the Guaranteed Obligations; 
  
 (v)    any rights to set-offs and counterclaims; 
  
 (vi)    any defense based upon an election of remedies (including, if available, an election to proceed by nonjudicial foreclosure) which destroys or impairs the subrogation rights of Guarantor or
the right of Guarantor to proceed against the Borrower or any other obligor of the Guaranteed Obligations for reimbursement; and 
  
 (vii)    without limiting the generality of the foregoing, to the fullest extent permitted by law, any defenses or
benefits that may be derived from or afforded by applicable law limiting the liability of or exonerating guarantors or sureties, or which may conflict with the terms of this Guaranty. 
  
 (b)    Additional Waivers.    Guarantor waives any and all
notice of the acceptance of this Guaranty, and any and all notice of the creation, renewal, modification, extension or accrual of the Guaranteed Obligations, or the reliance by the Bank upon this Guaranty, or the exercise of any right, power or
privilege hereunder. The Guaranteed Obligations shall conclusively be deemed to have been created, contracted, incurred and 
  

 B-1-5 

 
permitted to exist in reliance upon this Guaranty. Guarantor waives promptness, diligence, presentment, protest, demand for payment, notice of default,
dishonor or nonpayment and all other notices to or upon the Borrower, Guarantor or any other Person with respect to the Guaranteed Obligations. 
  
 (c)    Independent Obligations.    The obligations of Guarantor hereunder are independent
of and separate from the obligations of the Borrower and any other guarantor and upon the occurrence and during the continuance of any Event of Default, a separate action or actions may be brought against Guarantor, whether or not the Borrower or
any such other guarantor is joined therein or a separate action or actions are brought against the Borrower or any such other guarantor. 
  
 (d)    Financial Condition of the Borrower.    Guarantor shall not have any right to
require the Bank to obtain or disclose any information with respect to: (i) the financial condition or character of the Borrower or the ability of the Borrower to pay and perform the Guaranteed Obligations; (ii) the Guaranteed Obligations; (iii) any
collateral; (iv) the existence or nonexistence of any other guarantees of all or any part of the Guaranteed Obligations; (v) any action or inaction on the part of the Bank or any other Person; or (vi) any other matter, fact or occurrence whatsoever.

  
 6.    Subrogation.    Until the Guaranteed Obligations shall be satisfied in full and the commitment of the Bank to loan money under the Credit Agreement shall be terminated, Guarantor shall
not have, and shall not directly or indirectly exercise, (i) any rights that it may acquire by way of subrogation under this Guaranty, by any payment hereunder or otherwise, (ii) any rights of contribution, indemnification, reimbursement or similar
suretyship claims arising out of this Guaranty, or (iii) any other right which it might otherwise have or acquire (in any way whatsoever) which could entitle it at any time to share or participate in any right, remedy or security of the Bank as
against the Borrower or other guarantors, whether in connection with this Guaranty, any of the other Loan Documents or otherwise. If any amount shall be paid to Guarantor on account of the foregoing rights at any time when all the Guaranteed
Obligations shall not have been paid in full, such amount shall be held in trust for the benefit of the Bank and shall forthwith be paid to the Bank to be credited and applied to the Guaranteed Obligations, whether matured or unmatured, in
accordance with the terms of the Loan Documents. 
  
 7.    Subordination. 
  
 (a)    Subordination to Payment of Guaranteed Obligations.    All payments on account of all indebtedness, liabilities and other obligations of the Borrower to Guarantor,
whether created under, arising out of or in connection with any documents or instruments evidencing any credit extensions to the Borrower or otherwise, including all principal on any such credit extensions, all interest accrued thereon, all fees and
all other amounts payable by the Borrower to Guarantor in connection therewith, whether now existing or hereafter arising, and whether due or to become due, absolute or contingent, liquidated or unliquidated, determined or undetermined (the
“Subordinated Borrower Debt”) shall be subject, subordinate and junior in right of payment and exercise 
  

 B-1-6 

 
of remedies, to the extent and in the manner set forth herein, to the prior payment in full in cash or cash equivalents of the Guaranteed Obligations.

  
 (b)    No
Payments.    As long as any of the Guaranteed Obligations shall remain outstanding and unpaid, Guarantor shall not accept or receive any payment or distribution by or on behalf of the Borrower, directly or indirectly, of
assets of the Borrower of any kind or character, whether in cash, property or securities, including on account of the purchase, redemption or other acquisition of Subordinated Borrower Debt, as a result of any collection, sale or other disposition
of collateral, or by setoff, exchange or in any other manner, for or on account of the Subordinated Borrower Debt (“Subordinated Debt Payments”), except that prior to the occurrence of any Event of Default, Guarantor shall be entitled to
accept and receive payments on account of principal and interest on the Subordinated Borrower Debt, in accordance with the terms of the documents and instruments governing the Subordinated Borrower Debt. In the event that, notwithstanding the
provisions of this paragraph 7, any Subordinated Borrower Debt Payments shall be received in contravention of this paragraph 7 by Guarantor before all Guaranteed Obligations are paid in full in cash or cash equivalents, such Subordinated Borrower
Debt Payments shall be held in trust for the benefit of the Bank and shall be paid over or delivered to the Bank for application to the payment in full in cash or cash equivalents of all Guaranteed Obligations remaining unpaid to the extent
necessary to give effect to this paragraph 7, after giving effect to any concurrent payments or distributions to the Bank in respect of the Guaranteed Obligations. 
  
 (c)    Subordination of Remedies.    As long as any
Guaranteed Obligations shall remain outstanding and unpaid, Guarantor shall not, without the prior written consent of the Bank: 
  
 (i)    accelerate, make demand or otherwise make due and payable prior to the original stated maturity thereof any
Subordinated Borrower Debt or bring suit or institute any other actions or proceedings to enforce its rights or interests under or in respect of the Subordinated Borrower Debt; 
  
 (ii)    exercise any rights under or with respect to (A) any guaranties of the
Subordinated Borrower Debt, or (B) any collateral held by it, including causing or compelling the pledge or delivery of any collateral, any attachment of, levy upon, execution against, foreclosure upon or the taking of other action against or
institution of other proceedings with respect to any collateral held by it, notifying any account debtors of the Borrower or asserting any claim or interest in any insurance with respect to any collateral, or attempt to do any of the foregoing;

  
 (iii)    exercise any
rights to set-offs and counterclaims in respect of any indebtedness, liabilities or obligations of Guarantor to the Borrower against any of the Subordinated Borrower Debt; or 
  

 B-1-7 

 (iv)    commence, or cause to be commenced, or join with any creditor
other than the Bank in commencing, any insolvency proceeding against the Borrower. 
  
 (d)    Subordination Upon Any Distribution of Assets of the Borrower.    In the event of
any payment or distribution of assets of the Borrower of any kind or character, whether in cash, property or securities, upon any insolvency proceeding with respect to or involving the Borrower or its property, (i) all amounts owing on account of
the Guaranteed Obligations, including all interest accrued thereon at the contract rate both before and after the initiation of any such proceeding, whether or not an allowed claim in any such proceeding, shall first be paid in full in cash, or
payment provided for in cash or in cash equivalents, before any Subordinated Borrower Debt Payment is made; and (ii) to the extent permitted by applicable law, any Subordinated Borrower Debt Payment to which Guarantor would be entitled except for
the provisions hereof, shall be paid or delivered by the trustee in bankruptcy, receiver, assignee for the benefit of creditors or other liquidating bank making such payment or distribution directly to the Bank for application to the payment of the
Guaranteed Obligations in accordance with clause (i), after giving effect to any concurrent payment or distribution or provision therefor to the Bank in respect of such Guaranteed Obligations. 
  
 (e)    Authorization to the
Bank.    If, while any Subordinated Borrower Debt is outstanding, any insolvency proceeding is commenced by or against the Borrower or its property: 
  
 (i)    the Bank is hereby irrevocably authorized and empowered (in the name of the Bank
or in the name of Guarantor or otherwise), but shall have no obligation, to demand, sue for, collect and receive every payment or distribution in respect of the Subordinated Borrower Debt and give acquittance therefor and to file claims and proofs
of claim and take such other action (including voting the Subordinated Borrower Debt) as it may deem necessary or advisable for the exercise or enforcement of any of the rights or interests of the Bank; and 
  
 (ii)    Guarantor shall promptly take
such action as the Bank may reasonably request (A) to collect the Subordinated Borrower Debt for the account of the Bank and to file appropriate claims or proofs of claim in respect of the Subordinated Borrower Debt, (B) to execute and deliver to
the Bank, such powers of attorney, assignments and other instruments as it may request to enable it to enforce any and all claims with respect to the Subordinated Borrower Debt, and (C) to collect and receive any and all Subordinated Borrower Debt
Payments. 
  
 8.    Continuing Guaranty;
Reinstatement. 
  
 (a)    Continuing Guaranty.    This Guaranty is a continuing guaranty and agreement of subordination and shall continue in effect and be binding upon Guarantor until termination of the
commitment of the Bank to loan money under the Credit Agreement and payment and performance in full of the Guaranteed Obligations. 
  

 B-1-8 

 (b)    Reinstatement.    This Guaranty
shall continue to be effective or shall be reinstated and revived, as the case may be, if, for any reason, any payment of the Guaranteed Obligations by or on behalf of the Borrower (or receipt of any proceeds of collateral) shall be rescinded,
invalidated, declared to be fraudulent or preferential, set aside, voided or otherwise required to be repaid to the Borrower, its estate, trustee, receiver or any other Person (including under the United States Bankruptcy Code or other state or
federal law), or must otherwise be restored by the Bank, whether as a result of insolvency proceedings or otherwise. To the extent any payment is so rescinded, set aside, voided or otherwise repaid or restored, the Guaranteed Obligations shall be
revived in full force and effect without reduction or discharge for such payment. All losses, damages, costs and expenses that the Bank may suffer or incur as a result of any voided or otherwise set aside payments shall be specifically covered by
the indemnity in favor of the Bank contained in paragraph 18. 
  
 9.    Payments.    Guarantor hereby agrees, in furtherance of the foregoing provisions of this Guaranty and not in limitation of any other right which the Bank or any other Person may have
against Guarantor by virtue hereof, upon the failure of the Borrower to pay any of the Guaranteed Obligations when and as the same shall become due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise
(including amounts that would become due but for the operation of the automatic stay under §362(a) of the United States Bankruptcy Code), Guarantor shall forthwith pay, or cause to be paid, in cash, to the Bank an amount equal to the amount of
the Guaranteed Obligations then due as aforesaid (including interest which, but for the filing of a petition in any insolvency proceeding with respect to the Borrower, would have accrued on such Guaranteed Obligations, whether or not a claim is
allowed against the Borrower for such interest in any such insolvency proceeding). Guarantor shall make each payment hereunder, unconditionally in full without set-off, counterclaim or other defense, or deduction for any taxes, on the day when due
in Dollars and in same day or immediately available funds, to the Bank. All such payments shall be promptly applied from time to time by the Bank (i) first, to the payment of any fees, costs, expenses and other amounts due the Bank hereunder and
under the other Guarantor Documents, and (ii) second, to the payment of the other Guaranteed Obligations in such order of application as the Bank in its sole discretion may choose. 
  
 10.    Representations and Warranties.    Guarantor represents and warrants
to the Bank that: 
  
 (a)    Organization and Powers.    Guarantor is a corporation duly organized and validly existing under the laws of the state of Oregon, is qualified to do business and is in good standing in
each jurisdiction in which the failure so to qualify or be in good standing would have a material adverse effect on such Person or its business and has all requisite power and authority to own its assets and carry on its business and to execute,
deliver and perform its obligations under the Guarantor Documents. 
  
 (b)    Authorization; No Conflict.    The execution, delivery and performance by Guarantor of this Guaranty and any other Guarantor Documents have been duly authorized by
all necessary corporate action of Guarantor, and do not and will not: (i) contravene the terms of the certificate or articles, as the case may be, of 

  

 B-1-9 

 
incorporation and the bylaws of Guarantor or result in a breach of or constitute a default under any indenture or loan or credit agreement or any other
agreement, lease or instrument to which Guarantor is a party or by which it or its properties may be bound or affected; or (ii) violate any provision of any law, rule, regulation, order, writ, judgment, injunction, decree or the like binding on or
affecting Guarantor. 
  
 (c)    Binding Obligation.    This Guaranty constitutes the legal, valid and binding obligation of Guarantor, enforceable against Guarantor in accordance with its terms, subject to limitations
as to enforceability which might result from bankruptcy, insolvency, moratorium and other similar laws affecting creditors’ rights generally and subject to limitations on the availability of equitable remedies. 
  
 (d)    Governmental
Consents.    No authorization, consent, approval, license, exemption of, or filing or registration with, any Governmental Authority, or approval or consent of any other Person, is required for the due execution, delivery or
performance by Guarantor of the Guarantor Documents. 
  
 (e)    Solvency.    Immediately prior to and after giving effect to the incurrence of Guarantor’s obligations under this Guaranty, Guarantor will be solvent. 
  
 (f)    Consideration.    Guarantor has received at least “reasonably equivalent value” (as such phrase is used in §548 of the United States Bankruptcy Code, in the Uniform
Fraudulent Transfer Act and in comparable provisions of other applicable law) and more than sufficient consideration to support its obligations hereunder in respect of the Guaranteed Obligations. 
  
 (g)    Independent
Investigation.    Guarantor hereby acknowledges that it has undertaken its own independent investigation of the financial condition of the Borrower and all other matters pertaining to this Guaranty and further acknowledges
that it is not relying in any manner upon any representation or statement of the Bank with respect thereto. Guarantor represents and warrants that it has received and reviewed copies of the Loan Documents and that it is in a position to obtain, and
it hereby assumes full responsibility for obtaining, any additional information concerning the financial condition of the Borrower and any other matters pertinent hereto that Guarantor may desire. Guarantor is not relying upon or expecting the Bank
to furnish to Guarantor any information now or hereafter in the Bank’s possession concerning the financial condition of the Borrower or any other matter. 
  

11.    Reporting Covenants.    So long as any Guaranteed Obligations shall remain unsatisfied or the
Bank shall have any commitment to loan money under the Credit Agreement, Guarantor agrees that it shall furnish to the Bank: 
  
 (a)    the information regarding Guarantor set forth in Sections 8.1(b) and (c) of the Credit Agreement; and

  

 B-1-10 

 (b)    such other information respecting the operations, properties,
business or condition (financial or otherwise) of Guarantor as required by the Credit Agreement or as the Bank may from time to time reasonably request. 
  
 12.    Additional Affirmative Covenants.    So long as any Guaranteed Obligations shall remain unsatisfied
or the Bank shall have any commitment to loan money under the Credit Agreement, Guarantor agrees that: 
  
 (a)    Further Assurances and Additional Acts.    Guarantor shall execute, acknowledge,
deliver, file, notarize and register at its own expense all such further agreements, instruments, certificates, documents and assurances and perform such acts as the Bank shall deem necessary or appropriate to effectuate the purposes of this
Guaranty and the other Guarantor Documents, and promptly provide the Bank with evidence of the foregoing satisfactory in form and substance to it. 
  
 (b)    Financial Covenants.    Guarantor shall comply with the financial covenants set
forth in Section 8.12 of the Credit Agreement. 
  
 13.    Restrictions on Fundamental Changes.    So long as any Guaranteed Obligations shall remain unsatisfied or the Bank shall have any commitment to loan money under the Credit Agreement,
Guarantor agrees that Guarantor shall not merge or consolidate into or be acquired by, any Person, or sell, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets.

  
 14.    Other
Obligations.    The liability of Guarantor under this Guaranty is in addition to and shall be cumulative with all other liabilities of Guarantor to the Bank, if any, as guarantor, surety, endorser, accommodation co-obligor or
otherwise of any obligations of the Borrower, without any limitation as to amount, unless the instrument or agreement evidencing or creating such other liability specifically provides to the contrary. 
  
 15.    Events of
Default.    Any of the following shall constitute an “Event of Default”: 
  
 (a)    Representations and Warranties.    Any representation or warranty by Guarantor under
or in connection with the Guarantor Documents shall prove to have been incorrect in any material respect when made or deemed made. 
  
 (b)    Failure by Guarantor to Perform Certain Covenants.    Guarantor shall fail to
perform or observe any term, covenant or agreement contained in this Guaranty or any other Guarantor Document. 
  
 (c)    Invalidity of Guaranty.    This Guaranty or any other Guarantor Document shall for
any reason be revoked or invalidated, or otherwise cease to be in full force and effect, or Guarantor or any other Person shall contest in any manner the validity or enforceability thereof or Guarantor shall deny that it has any further liability or
obligation thereunder. 
  

 B-1-11 

 (d)    Default under Credit
Agreement.    Any “Event of Default” as defined in the Credit Agreement shall occur. 
  
 Upon the occurrence of an Event of Default, the Bank shall have the rights and remedies set forth in Section 10.2 of the Credit Agreement and may proceed
to enforce all other rights and remedies available to the Bank under this Guaranty, the other Loan Documents, and applicable law. 
  
 16.    Addresses for Notices, Etc.    All notices, requests, demands and other communications provided for
hereunder shall be in writing and mailed or delivered (i) if to the Bank, at the address set forth in the Credit Agreement and (ii) if to the Guarantor, at the address set forth on the execution pages hereto, or as to each party, at such other
address as shall be designated by such party in a written notice to the other party complying as to delivery with this paragraph 16. All such notices, requests, demands and other communications, when delivered, shall be effective upon actual
delivery and when mailed, shall be effective when sent by nationally recognized overnight mail courier or delivery service, addressed as aforesaid. 
  
 17.    No Waiver; Cumulative Remedies.    No failure on the part of the Bank to exercise, and no delay in
exercising, any right, remedy, power or privilege hereunder or under any other Guarantor Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, remedy, power or privilege preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege. The rights and remedies under this Guaranty and the other Guarantor Documents are cumulative and not exclusive of any rights, remedies, powers and privileges that may
otherwise be available to the Bank. 
  
 18.    Costs and Expenses; Indemnification. 
  
 (a)    Costs and Expenses.    Guarantor agrees to pay on demand: 
  
 (i)    the reasonable out-of-pocket
costs and expenses of the Bank and any of its Affiliates, and the reasonable fees and disbursements of counsel to the Bank (including allocated costs of internal counsel), in connection with the negotiation, preparation, execution, delivery and
administration of this Guaranty or any other Guarantor Document, and any amendments, modifications or waivers of the terms thereof; 
  
 (ii)    all costs and expenses of the Bank and its Affiliates, and fees and disbursements of counsel (including
allocated costs of internal counsel), in connection with the enforcement or attempted enforcement, or preservation of any rights or interests under, this Guaranty and any other Guarantor Document, and any out-of-court workout or other refinancing or
restructuring or any insolvency proceeding, including any losses, costs and expenses sustained by the Bank as a result of any failure by Guarantor to perform or observe its obligations contained in this Guaranty and the other Guarantor Documents;
provided, however, that notwithstanding the foregoing, the prevailing party in connection with any judicial suit or proceeding brought by any party to this transaction 

  

 B-1-12 

 
against the other shall be entitled to all costs and expenses, and all fees and disbursements of counsel (including allocated costs of internal counsel).

  
 (b)    Indemnification.    In addition, whether or not the transactions contemplated by the Loan Documents shall be consummated, Guarantor hereby agrees to indemnify the Bank and any of its
Affiliates (each an “Indemnified Person”), against, and hold each of them harmless from, any and all liabilities, obligations, losses, claims, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever, including the reasonable fees and disbursements of counsel to an Indemnified Person (including allocated costs of internal counsel), which may be imposed on, incurred by, or asserted against any Indemnified Person, (i) in any way
relating to or arising out of this Guaranty or any other Guarantor Document, the Guaranteed Obligations, or the transactions contemplated hereby or thereby, or (ii) with respect to any investigation, litigation or other proceeding relating to any of
the foregoing, irrespective of whether the Indemnified Person shall be designated a party thereto (the “Indemnified Liabilities”); provided that Guarantor shall not be liable to any Indemnified Person for any portion of such Indemnified
Liabilities to the extent they are found by a final decision of a court of competent jurisdiction to have resulted from such Indemnified Person’s gross negligence or willful misconduct. If and to the extent that the foregoing indemnification is
for any reason held unenforceable, Guarantor agrees to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. 
  
 (c)    Defense.    At the election of any Indemnified Person, Guarantor shall defend such Indemnified Person using legal counsel satisfactory to such Indemnified Person in such Person’s
sole discretion, at the sole cost and expense of Guarantor. 
  
 (d)    Interest.    Any amounts payable to the Bank under this paragraph 18 if not paid upon demand shall bear interest from the date of such demand until paid in full,
at the Prime Rate plus 2.00 percent per annum. 
  
 19.    Set off Rights.    As security for the payment of the Guaranteed Obligations or obligations arising under the Loan Documents, and any other obligations of Guarantor to the Bank of
any nature whatsoever (collectively the “Obligations”), Guarantor hereby grants to the Bank a security interest in, a lien on, and an express contractual right to set off against all depository account balances, cash, and any other
property of Guarantor now or hereafter in the possession of the Bank. The Bank may, at any time upon the occurrence of a default hereunder (notwithstanding any notice requirements or cure periods under this or other agreements between Guarantor and
the Bank) exercise the aforesaid right to setoff against the Obligations whether or not the Obligations (including future installments) are then due or have been accelerated, and the Bank may refuse to allow withdrawals from any account, all without
any advance or contemporaneous notice or demand of any kind to Guarantor, such notice and demand being expressly waived. 
  
 20.    Survival.    All covenants, agreements, representations and warranties made in this Guaranty and in
any other Guarantor Document shall survive the execution and delivery 

  

 B-1-13 

 
of this Guaranty, and shall continue in full force and effect so long as the Bank has any commitment to loan money under the Credit Agreement or any
Guaranteed Obligations remain unsatisfied. Without limiting the generality of the foregoing, the obligations of Guarantor under paragraph 18 shall survive the satisfaction of the Guaranteed Obligations and the termination of the commitment of the
Bank to loan money under the Credit Agreement. 
  
 21.    Benefits of Guaranty.    This Guaranty is entered into for the sole protection and benefit of the Bank and its successors and assigns, and no other Person (other than any Indemnified
Person specified herein) shall be a direct or indirect beneficiary of, or shall have any direct or indirect cause of action or claim in connection with, this Guaranty. The Bank, by its acceptance of this Guaranty, shall not have any obligations
under this Guaranty to any Person other than Guarantor, and such obligations shall be limited to those expressly stated herein. 
  
 22.    Binding Effect; Assignment. 
  
 (a)    Binding Effect.    This Guaranty shall be binding upon Guarantor and its successors
and assigns, and inure to the benefit of and be enforceable by the Bank and its successors, endorsees, transferees and assigns. 
  
 (b)    Assignment.    Guarantor shall not have the right to assign or transfer its rights
and obligations hereunder or under any other Guarantor Documents without the prior written consent of the Bank. The Bank may, without notice to or consent by Guarantor, sell, assign, transfer or grant participations in all or any portion of the
Bank’s rights and obligations hereunder and under the other Guarantor Documents in connection with any sale, assignment, transfer or grant of a participation by the Bank under Section 11.3 of the Credit Agreement of the Bank’s rights and
obligations thereunder and under the other Loan Documents. Guarantor agrees that in connection with any such sale, assignment, transfer or grant by the Bank, the same may deliver to the prospective participant or assignee financial statements and
other relevant information relating to Guarantor and its Subsidiaries. 
  
 23.    Governing Law.    This Guaranty shall be governed by, and construed in accordance with, the law of the state of Oregon. 
  
 24.    Submission to Jurisdiction.    Guarantor hereby (i) submits to the
non-exclusive jurisdiction of the courts of the State of Oregon and the Federal courts of the United States sitting in the State of Oregon for the purpose of any action or proceeding arising out of or relating to this Guaranty and the other
Guarantor Documents, (ii) agrees that all claims in respect of any such action or proceeding may be heard and determined in such courts, (iii) irrevocably waives (to the extent permitted by applicable law) any objection which it now or hereafter may
have to the laying of venue of any such action or proceeding brought in any of the foregoing courts, and any objection on the ground that any such action or proceeding in any such court has been brought in an inconvenient forum and (iv) agrees that
a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner permitted by law. 
  

 B-1-14 

 25.    Waiver of Jury Trial.    Guarantor hereby agrees to
waive, and the Bank by its acceptance hereof hereby agrees to waive, their respective rights to a trial by jury of any claim or cause of action based upon or arising out of or related to this Guaranty, the other Guarantor Documents or the
transactions contemplated hereby or thereby in any action, proceeding or other litigation of any type brought by any of the parties against any other party or parties, whether with respect to contract claims, tort claims, or otherwise. Guarantor
hereby agrees, and the Bank by its acceptance hereof hereby agrees, that any such claim or cause of action shall be tried by a court trial without a jury. Without in any way limiting the foregoing, Guarantor further agrees, and the Bank by its
acceptance hereof further agrees, that their respective rights to a trial by jury are waived by operation of this paragraph as to any action, counterclaim, or other proceeding which seeks, in whole or in part, to challenge the validity or
enforceability of this Guaranty or the other Guarantor Documents or any provision hereof or thereof. This waiver shall apply to any subsequent amendments, renewals, supplements or modifications to this Guaranty and the other Guarantor Documents. A
copy of this paragraph 25 may be filed with any court as written evidence of the waiver of the right to trial by jury and consent to trial by court. 
  
 26.    Entire Agreement; Amendments and Waivers. 
  
 (a)    Entire Agreement.    This Guaranty and the other
Guarantor Documents constitute the entire agreement of Guarantor with respect to the matters set forth herein and supersede any prior agreements, commitments, drafts, communications, discussions and understandings, oral or written, with respect
thereto. There are no conditions to the full effectiveness of this Guaranty. 
  
 (b)    Amendments and Waivers.    Except to the extent otherwise provided in the Credit Agreement, this Guaranty and the other Guarantor Documents may not be amended
except by a writing signed by Guarantor and the Bank. No waiver of any rights of the Bank under any provision of this Guaranty or consent to any departure by Guarantor therefrom shall be effective unless in writing and signed by the Bank. Any such
amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. 
  
 27.    Severability.    Whenever possible, each provision of this Guaranty and the other Guarantor
Documents shall be interpreted in such manner as to be effective and valid under all applicable laws and regulations. If, however, any provision of this Guaranty or any other Guarantor Document shall be prohibited by or invalid under any such law or
regulation in any jurisdiction, it shall, as to such jurisdiction, be deemed modified to conform to the minimum requirements of such law or regulation, or, if for any reason it is not deemed so modified, it shall be ineffective and invalid only to
the extent of such prohibition or invalidity without affecting the remaining provisions of this Guaranty or such Guarantor Document, as the case may be, or the validity or effectiveness of such provision in any other jurisdiction. 
  
 28.    Effectiveness.    This
Guaranty shall be effective upon delivery to the Bank, without further act, condition or acceptance by the Bank. 
  
 29.    Disclaimer.    UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY A FINANCIAL
INSTITUTION 

  

 B-1-15 

 
CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY BORROWER’S PRINCIPAL
RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY THE FINANCIAL INSTITUTION TO BE ENFORCEABLE. 
  
 IN WITNESS WHEREOF, Guarantor has executed this Guaranty, as of the date first above written. 
  

	 STANDARD INSURANCE COMPANY

		
	By:	 	 /s/    ERIC E. PARSONS

	 	

		
	Name:	 	 Eric E. Parsons

	 	

		
	Title:	 	 President and Chief Executive Officer

	 	

		
	Address:	 	 1100 S.W. Sixth Avenue, P11-D

	 	

		
	 	 	 Portland, Oregon, 97204-1093 

	 	

		
	 	 	 
	 	

		
	Attention:	 	 Treasurer

	 	

		
	Fax No.	 	 (503) 321-7540

	 	

  

 B-1-16 

 EXHIBIT B-2 
  
 GUARANTY 
  
 This Guaranty, dated as of June 30, 2003, is made by STANCORP MORTGAGE INVESTORS, LLC, an Oregon limited liability company (“Guarantor”), in
favor of U.S. BANK NATIONAL ASSOCIATION (the “Bank”). 
  
 Recitals 
  
 A.    StanCorp
Financial Group, Inc., an Oregon corporation (the “Borrower”) and the Bank are parties to a Credit Agreement of even date herewith (as amended, modified, renewed or extended from time to time, the “Credit Agreement”). It is a
condition precedent to the borrowings under the Credit Agreement that Guarantor guarantee the indebtedness and other obligations of the Borrower to the Bank as set forth herein. 
  
 B.    The Borrower owns 100 percent of the outstanding capital stock of Guarantor. Guarantor will derive
substantial direct and indirect economic, financial, and other benefits from the making of the loan to the Borrower pursuant to the Credit Agreement (which benefits are hereby acknowledged by Guarantor). 
  
 Accordingly, to induce the Bank to make such loans, and in consideration
thereof, Guarantor hereby agrees as follows: 
  
 1.    Definitions.    All capitalized terms used in this Guaranty and not otherwise defined herein shall have the meanings assigned to them in the Credit Agreement. In addition, as used in this
Guaranty, the following terms shall have the following meanings: 
  
 “Event of Default” has the meaning set forth in paragraph 15. 
  
 “Guaranteed Obligations” has the meaning set forth in paragraph 2. 
  
 “Guarantor Documents” means this Guaranty and all other certificates, documents, agreements and instruments delivered to the Bank under or in
connection with this Guaranty. 
  
 “Subordinated Borrower
Debt” has the meaning set forth in paragraph 7. 
  
 2.    Guaranty. 
  
 (a)    Guaranty.    Guarantor hereby absolutely, unconditionally and irrevocably guarantees to the Bank, and its successors, endorsees, transferees and assigns, the full and prompt payment when
due (whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise) and performance of all indebtedness, liabilities and other obligations of the Borrower to the Bank, whether created under, arising out of or in
connection with the Credit Agreement, the Note or any of the other Loan Documents, including all unpaid principal of the Advances, all interest accrued thereon, all fees due under the Credit Agreement and all other amounts payable 

  

 B-2-1 

 
by the Borrower to the Bank thereunder or in connection therewith; provided, however, that Guarantor’s maximum liability hereunder shall be limited to
$25,000,000. The terms “indebtedness”, “liabilities” and “obligations” are used herein in their most comprehensive sense and include any and all debts, obligations and liabilities, now existing or hereafter arising,
whether voluntary or involuntary and whether due or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined, and whether recovery upon such indebtedness, liabilities and obligations may be or hereafter become
unenforceable or shall be an allowed or disallowed claim under the United States Bankruptcy Code or other applicable law. The foregoing indebtedness, liabilities and other obligations of the Borrower, and all other indebtedness, liabilities and
obligations to be paid or performed by Guarantor in connection with this Guaranty, shall hereinafter be collectively referred to as the “Guaranteed Obligations.” 
  
 (b)    Limitation of Guaranty.    To the extent that any
court of competent jurisdiction shall impose by final judgment under applicable law (including the Uniform Fraudulent Transfer Act and §§544 and 548 of the United States Bankruptcy Code) any limitations on the amount of Guarantor’s
liability with respect to the Guaranteed Obligations which the Bank can enforce under this Guaranty, the Bank accepts such limitation on the amount of Guarantor’s liability hereunder to the extent needed to make this Guaranty and Guarantor
Documents fully enforceable and nonavoidable. 
  
 3.    Liability of Guarantor.    The liability of Guarantor under this Guaranty shall be irrevocable, absolute, independent and unconditional, and shall not be affected by any circumstance
which might constitute a discharge of a surety or guarantor other than the indefeasible payment and performance in full of all Guaranteed Obligations. In furtherance of the foregoing and without limiting the generality thereof, Guarantor agrees as
follows: 
  
 (a)    Guarantor’s liability hereunder shall be the immediate, direct, and primary obligation of Guarantor and shall not be contingent upon the Bank’s exercise or enforcement of any remedy it may have against
the Borrower or any other Person, or against any collateral; 
  
 (b)    this Guaranty is a guaranty of payment and performance when due and not merely of collectability; 
  
 (c)    the Bank may enforce this Guaranty upon the occurrence of an Event of Default notwithstanding the existence of
any dispute between the Bank and the Borrower with respect to the existence of such Event of Default; 
  
 (d)    Guarantor’s payment of a portion, but not all, of the Guaranteed Obligations shall in no way limit,
affect, modify or abridge Guarantor’s liability for any portion of the Guaranteed Obligations remaining unsatisfied; and 
  

 B-2-2 

 (e)    Guarantor’s liability with respect to the Guaranteed
Obligations shall remain in full force and effect without regard to, and shall not be impaired or affected by, nor shall Guarantor be exonerated or discharged by, any of the following events: 
  
 (i)    any bankruptcy or insolvency
proceeding with respect to the Borrower, Guarantor, any other guarantor or any other Person; 
  
 (ii)    any limitation, discharge, or cessation of the liability of the Borrower, Guarantor, any other guarantor or
any other Person for any Guaranteed Obligations due to any statute, regulation or rule of law, or any invalidity or unenforceability in whole or in part of any of the Guaranteed Obligations or the Loan Documents; 
  
 (iii)    any merger, acquisition,
consolidation or change in structure of the Borrower, Guarantor or any other guarantor or Person, or any sale, lease, transfer or other disposition of any or all of the assets or shares of the Borrower, Guarantor, any other guarantor or other
Person; 
  
 (iv)    any
assignment or other transfer, in whole or in part, of the Bank’s interests in and rights under this Guaranty or the other Loan Documents, including the Bank’s right to receive payment of the Guaranteed Obligations, or any assignment or
other transfer, in whole or in part, of the Bank’s interests in and to any collateral; 
  
 (v)    any claim, defense, counterclaim or setoff, other than that of prior performance, that the Borrower, Guarantor,
any other guarantor or other Person may have or assert, including any defense of incapacity or lack of corporate or other authority to execute any of the Loan Documents; 
  
 (vi)    the amendment, modification, renewal, extension, cancellation or surrender of
any Loan Document, any Guaranteed Obligations, any collateral, or the Bank’s exchange, release, or waiver of any collateral; 
  
 (vii)    the Bank’s exercise or nonexercise of any power, right or remedy with respect to any collateral,
including compromise, release, settlement or waiver with or of the Borrower, Guarantor, any other guarantor or any other Person; 
  
 (viii)    the Bank’s vote, claim, distribution, election, acceptance, action or inaction in any insolvency
proceeding related to the Guaranteed Obligations; 
  
 (ix)    any impairment or invalidity of any collateral or any failure to perfect any of the Bank’s liens thereon or therein; and 
  

 B-2-3 

 (x)    any other guaranty, whether by Guarantor or any other Person,
of all or any part of the Guaranteed Obligations or any other indebtedness, obligations or liabilities of the Borrower to the Bank. 
  
 4.    Consents of Guarantor.    Guarantor hereby unconditionally consents and agrees that, without notice
to or further assent from Guarantor: 
  
 (a)    the principal amount of the Guaranteed Obligations may be increased or decreased and additional indebtedness or obligations of the Borrower under the Loan Documents may be incurred, by one or more amendments,
modifications, renewals or extensions of any Loan Document or otherwise; 
  
 (b)    the time, manner, place or terms of any payment under any Loan Document may be extended or changed, including by an increase or decrease in the interest rate on any Guaranteed Obligation or
any fee or other amount payable under such Loan Document, by an amendment, modification or renewal of any Loan Document or otherwise; 
  
 (c)    the time for the Borrower’s (or any other Person’s) performance of or compliance with any term,
covenant or agreement on its part to be performed or observed under any Loan Document may be extended, or such performance or compliance waived, or failure in or departure from such performance or compliance consented to, all in such manner and upon
such terms as the Bank may deem proper; 
  
 (d)    the Bank may discharge or release, in whole or in part, any other guarantor or any other Person liable for the payment and performance of all or any part of the Guaranteed Obligations, and may permit or consent to
any such action or any result of such action, and shall not be obligated to demand or enforce payment upon any of the collateral or any other collateral, nor shall the Bank be liable to Guarantor for any failure to collect or enforce payment or
performance of the Guaranteed Obligations from any Person or to realize any collateral therefor; 
  
 (e)    the Bank may take and hold other security (legal or equitable) of any kind, at any time, as collateral for the
Guaranteed Obligations, and may, from time to time, in whole or in part, exchange, sell, surrender, release, subordinate, modify, waive, rescind, compromise or extend such security and may permit or consent to any such action or the result of any
such action, and may apply such security and direct the order or manner of sale thereof; 
  
 (f)    the Bank may request and accept other guaranties of the Guaranteed Obligations and any other indebtedness,
obligations or liabilities of the Borrower to the Bank and may, from time to time, in whole or in part, surrender, release, subordinate, modify, waive, rescind, compromise or extend any such guaranty and may permit or consent to any such action or
the result of any such action; and 
  
 (g)    the Bank may exercise, or waive or otherwise refrain from exercising, any other right, remedy, power or privilege (including the right to accelerate 

  

 B-2-4 

 
the maturity of any Loan and any power of sale) granted by any Loan Document or other security document or agreement, or otherwise available to the Bank,
with respect to the Guaranteed Obligations or any collateral, even if the exercise of such right, remedy, power or privilege affects or eliminates any right of subrogation or any other right of Guarantor against the Borrower; 
  
 all as the Bank may deem advisable, and all without impairing, abridging, releasing or
affecting this Guaranty. 
  
 5.    Guarantor’s Waivers. 
  
 (a)    Certain Waivers.    Guarantor waives and agrees not to assert: 
  
 (i)    any right to require the Bank to marshal assets in favor of the Borrower, Guarantor, any other guarantor or any
other Person, to proceed against the Borrower, any other guarantor or any other Person, to proceed against or exhaust any collateral, to give notice of the terms, time and place of any public or private sale of personal property security
constituting collateral or to pursue any other right, remedy, power or privilege of the Bank whatsoever; 
  
 (ii)    the defense of the statute of limitations in any action hereunder or for the collection or performance of the
Guaranteed Obligations; 
  
 (iii)    any defense arising by reason of any lack of corporate or other authority or any other defense of the Borrower, Guarantor or any other Person; 
  
 (iv)    any defense based upon the Bank’s errors or omissions in the administration
of the Guaranteed Obligations; 
  
 (v)    any rights to set-offs and counterclaims; 
  
 (vi)    any defense based upon an election of remedies (including, if available, an election to proceed by nonjudicial foreclosure) which destroys or impairs the subrogation rights of Guarantor or
the right of Guarantor to proceed against the Borrower or any other obligor of the Guaranteed Obligations for reimbursement; and 
  
 (vii)    without limiting the generality of the foregoing, to the fullest extent permitted by law, any defenses or
benefits that may be derived from or afforded by applicable law limiting the liability of or exonerating guarantors or sureties, or which may conflict with the terms of this Guaranty. 
  
 (b)    Additional Waivers.    Guarantor waives any and all
notice of the acceptance of this Guaranty, and any and all notice of the creation, renewal, modification, extension or accrual of the Guaranteed Obligations, or the reliance by the Bank upon this Guaranty, or the exercise of any right, power or
privilege hereunder. The Guaranteed Obligations shall conclusively be deemed to have been created, contracted, incurred and 
  

 B-2-5 

 
permitted to exist in reliance upon this Guaranty. Guarantor waives promptness, diligence, presentment, protest, demand for payment, notice of default,
dishonor or nonpayment and all other notices to or upon the Borrower, Guarantor or any other Person with respect to the Guaranteed Obligations. 
  
 (c)    Independent Obligations.    The obligations of Guarantor hereunder are independent
of and separate from the obligations of the Borrower and any other guarantor and upon the occurrence and during the continuance of any Event of Default, a separate action or actions may be brought against Guarantor, whether or not the Borrower or
any such other guarantor is joined therein or a separate action or actions are brought against the Borrower or any such other guarantor. 
  
 (d)    Financial Condition of the Borrower.    Guarantor shall not have any right to
require the Bank to obtain or disclose any information with respect to: (i) the financial condition or character of the Borrower or the ability of the Borrower to pay and perform the Guaranteed Obligations; (ii) the Guaranteed Obligations; (iii) any
collateral; (iv) the existence or nonexistence of any other guarantees of all or any part of the Guaranteed Obligations; (v) any action or inaction on the part of the Bank or any other Person; or (vi) any other matter, fact or occurrence whatsoever.

  
 6.    Subrogation.    Until the Guaranteed Obligations shall be satisfied in full and the commitment of the Bank to loan money under the Credit Agreement shall be terminated, Guarantor shall
not have, and shall not directly or indirectly exercise, (i) any rights that it may acquire by way of subrogation under this Guaranty, by any payment hereunder or otherwise, (ii) any rights of contribution, indemnification, reimbursement or similar
suretyship claims arising out of this Guaranty, or (iii) any other right which it might otherwise have or acquire (in any way whatsoever) which could entitle it at any time to share or participate in any right, remedy or security of the Bank as
against the Borrower or other guarantors, whether in connection with this Guaranty, any of the other Loan Documents or otherwise. If any amount shall be paid to Guarantor on account of the foregoing rights at any time when all the Guaranteed
Obligations shall not have been paid in full, such amount shall be held in trust for the benefit of the Bank and shall forthwith be paid to the Bank to be credited and applied to the Guaranteed Obligations, whether matured or unmatured, in
accordance with the terms of the Loan Documents. 
  
 7.    Subordination. 
  
 (a)    Subordination to Payment of Guaranteed Obligations.    All payments on account of all indebtedness, liabilities and other obligations of the Borrower to Guarantor,
whether created under, arising out of or in connection with any documents or instruments evidencing any credit extensions to the Borrower or otherwise, including all principal on any such credit extensions, all interest accrued thereon, all fees and
all other amounts payable by the Borrower to Guarantor in connection therewith, whether now existing or hereafter arising, and whether due or to become due, absolute or contingent, liquidated or unliquidated, determined or undetermined (the
“Subordinated Borrower Debt”) shall be subject, subordinate and junior in right of payment and exercise 

  

 B-2-6 

 
of remedies, to the extent and in the manner set forth herein, to the prior payment in full in cash or cash equivalents of the Guaranteed Obligations.

  
 (b)    No
Payments.    As long as any of the Guaranteed Obligations shall remain outstanding and unpaid, Guarantor shall not accept or receive any payment or distribution by or on behalf of the Borrower, directly or indirectly, of
assets of the Borrower of any kind or character, whether in cash, property or securities, including on account of the purchase, redemption or other acquisition of Subordinated Borrower Debt, as a result of any collection, sale or other disposition
of collateral, or by setoff, exchange or in any other manner, for or on account of the Subordinated Borrower Debt (“Subordinated Debt Payments”), except that prior to the occurrence of any Event of Default, Guarantor shall be entitled to
accept and receive payments on account of principal and interest on the Subordinated Borrower Debt, in accordance with the terms of the documents and instruments governing the Subordinated Borrower Debt. In the event that, notwithstanding the
provisions of this paragraph 7, any Subordinated Borrower Debt Payments shall be received in contravention of this paragraph 7 by Guarantor before all Guaranteed Obligations are paid in full in cash or cash equivalents, such Subordinated Borrower
Debt Payments shall be held in trust for the benefit of the Bank and shall be paid over or delivered to the Bank for application to the payment in full in cash or cash equivalents of all Guaranteed Obligations remaining unpaid to the extent
necessary to give effect to this paragraph 7, after giving effect to any concurrent payments or distributions to the Bank in respect of the Guaranteed Obligations. 
  
 (c)    Subordination of Remedies.    As long as any
Guaranteed Obligations shall remain outstanding and unpaid, Guarantor shall not, without the prior written consent of the Bank: 
  
 (i)    accelerate, make demand or otherwise make due and payable prior to the original stated maturity thereof any
Subordinated Borrower Debt or bring suit or institute any other actions or proceedings to enforce its rights or interests under or in respect of the Subordinated Borrower Debt; 
  
 (ii)    exercise any rights under or with respect to (A) any guaranties of the
Subordinated Borrower Debt, or (B) any collateral held by it, including causing or compelling the pledge or delivery of any collateral, any attachment of, levy upon, execution against, foreclosure upon or the taking of other action against or
institution of other proceedings with respect to any collateral held by it, notifying any account debtors of the Borrower or asserting any claim or interest in any insurance with respect to any collateral, or attempt to do any of the foregoing;

  
 (iii)    exercise any
rights to set-offs and counterclaims in respect of any indebtedness, liabilities or obligations of Guarantor to the Borrower against any of the Subordinated Borrower Debt; or 
  

 B-2-7 

 (iv)    commence, or cause to be commenced, or join with any creditor
other than the Bank in commencing, any insolvency proceeding against the Borrower. 
  
 (d)    Subordination Upon Any Distribution of Assets of the Borrower.    In the event of
any payment or distribution of assets of the Borrower of any kind or character, whether in cash, property or securities, upon any insolvency proceeding with respect to or involving the Borrower or its property, (i) all amounts owing on account of
the Guaranteed Obligations, including all interest accrued thereon at the contract rate both before and after the initiation of any such proceeding, whether or not an allowed claim in any such proceeding, shall first be paid in full in cash, or
payment provided for in cash or in cash equivalents, before any Subordinated Borrower Debt Payment is made; and (ii) to the extent permitted by applicable law, any Subordinated Borrower Debt Payment to which Guarantor would be entitled except for
the provisions hereof, shall be paid or delivered by the trustee in bankruptcy, receiver, assignee for the benefit of creditors or other liquidating bank making such payment or distribution directly to the Bank for application to the payment of the
Guaranteed Obligations in accordance with clause (i), after giving effect to any concurrent payment or distribution or provision therefor to the Bank in respect of such Guaranteed Obligations. 
  
 (e)    Authorization to the
Bank.    If, while any Subordinated Borrower Debt is outstanding, any insolvency proceeding is commenced by or against the Borrower or its property: 
  
 (i)    the Bank is hereby irrevocably authorized and empowered (in the name of the Bank
or in the name of Guarantor or otherwise), but shall have no obligation, to demand, sue for, collect and receive every payment or distribution in respect of the Subordinated Borrower Debt and give acquittance therefor and to file claims and proofs
of claim and take such other action (including voting the Subordinated Borrower Debt) as it may deem necessary or advisable for the exercise or enforcement of any of the rights or interests of the Bank; and 
  
 (ii)    Guarantor shall promptly take
such action as the Bank may reasonably request (A) to collect the Subordinated Borrower Debt for the account of the Bank and to file appropriate claims or proofs of claim in respect of the Subordinated Borrower Debt, (B) to execute and deliver to
the Bank, such powers of attorney, assignments and other instruments as it may request to enable it to enforce any and all claims with respect to the Subordinated Borrower Debt, and (C) to collect and receive any and all Subordinated Borrower Debt
Payments. 
  
 8.    Continuing Guaranty;
Reinstatement. 
  
 (a)    Continuing Guaranty.    This Guaranty is a continuing guaranty and agreement of subordination and shall continue in effect and be binding upon Guarantor until termination of the
commitment of the Bank to loan money under the Credit Agreement and payment and performance in full of the Guaranteed Obligations. 
  

 B-2-8 

 (b)    Reinstatement.    This Guaranty
shall continue to be effective or shall be reinstated and revived, as the case may be, if, for any reason, any payment of the Guaranteed Obligations by or on behalf of the Borrower (or receipt of any proceeds of collateral) shall be rescinded,
invalidated, declared to be fraudulent or preferential, set aside, voided or otherwise required to be repaid to the Borrower, its estate, trustee, receiver or any other Person (including under the United States Bankruptcy Code or other state or
federal law), or must otherwise be restored by the Bank, whether as a result of insolvency proceedings or otherwise. To the extent any payment is so rescinded, set aside, voided or otherwise repaid or restored, the Guaranteed Obligations shall be
revived in full force and effect without reduction or discharge for such payment. All losses, damages, costs and expenses that the Bank may suffer or incur as a result of any voided or otherwise set aside payments shall be specifically covered by
the indemnity in favor of the Bank contained in paragraph 18. 
  
 9.    Payments.    Guarantor hereby agrees, in furtherance of the foregoing provisions of this Guaranty and not in limitation of any other right which the Bank or any other Person may have
against Guarantor by virtue hereof, upon the failure of the Borrower to pay any of the Guaranteed Obligations when and as the same shall become due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise
(including amounts that would become due but for the operation of the automatic stay under §362(a) of the United States Bankruptcy Code), Guarantor shall forthwith pay, or cause to be paid, in cash, to the Bank an amount equal to the amount of
the Guaranteed Obligations then due as aforesaid (including interest which, but for the filing of a petition in any insolvency proceeding with respect to the Borrower, would have accrued on such Guaranteed Obligations, whether or not a claim is
allowed against the Borrower for such interest in any such insolvency proceeding). Guarantor shall make each payment hereunder, unconditionally in full without set-off, counterclaim or other defense, or deduction for any taxes, on the day when due
in Dollars and in same day or immediately available funds, to the Bank. All such payments shall be promptly applied from time to time by the Bank (i) first, to the payment of any fees, costs, expenses and other amounts due the Bank hereunder and
under the other Guarantor Documents, and (ii) second, to the payment of the other Guaranteed Obligations in such order of application as the Bank in its sole discretion may choose. 
  
 10.    Representations and Warranties.    Guarantor represents and warrants
to the Bank that: 
  
 (a)    Organization and Powers.    Guarantor is a limited liability company duly organized and validly existing under the laws of the state of Oregon, is qualified to do business and is in good
standing in each jurisdiction in which the failure so to qualify or be in good standing would have a material adverse effect on such Person or its business and has all requisite power and authority to own its assets and carry on its business and to
execute, deliver and perform its obligations under the Guarantor Documents. 
  
 (b)    Authorization; No Conflict.    The execution, delivery and performance by Guarantor of this Guaranty and any other Guarantor Documents have been duly authorized by
all necessary corporate action of Guarantor, and do not and will 

  

 B-2-9 

 
not: (i) contravene the terms of the certificate or articles, as the case may be, of incorporation and the bylaws of Guarantor or result in a breach of or
constitute a default under any indenture or loan or credit agreement or any other agreement, lease or instrument to which Guarantor is a party or by which it or its properties may be bound or affected; or (ii) violate any provision of any law, rule,
regulation, order, writ, judgment, injunction, decree or the like binding on or affecting Guarantor. 
  
 (c)    Binding Obligation.    This Guaranty constitutes the legal, valid and binding
obligation of Guarantor, enforceable against Guarantor in accordance with its terms, subject to limitations as to enforceability which might result from bankruptcy, insolvency, moratorium and other similar laws affecting creditors’ rights
generally and subject to limitations on the availability of equitable remedies. 
  
 (d)    Governmental Consents.    No authorization, consent, approval, license, exemption
of, or filing or registration with, any Governmental Authority, or approval or consent of any other Person, is required for the due execution, delivery or performance by Guarantor of the Guarantor Documents. 
  
 (e)    Solvency.    Immediately prior to and after giving effect to the incurrence of Guarantor’s obligations under this Guaranty, Guarantor will be solvent. 
  
 (f)    Consideration.    Guarantor has received at least “reasonably equivalent value” (as such phrase is used in §548 of the United States Bankruptcy Code, in the Uniform
Fraudulent Transfer Act and in comparable provisions of other applicable law) and more than sufficient consideration to support its obligations hereunder in respect of the Guaranteed Obligations. 
  
 (g)    Independent
Investigation.    Guarantor hereby acknowledges that it has undertaken its own independent investigation of the financial condition of the Borrower and all other matters pertaining to this Guaranty and further acknowledges
that it is not relying in any manner upon any representation or statement of the Bank with respect thereto. Guarantor represents and warrants that it has received and reviewed copies of the Loan Documents and that it is in a position to obtain, and
it hereby assumes full responsibility for obtaining, any additional information concerning the financial condition of the Borrower and any other matters pertinent hereto that Guarantor may desire. Guarantor is not relying upon or expecting the Bank
to furnish to Guarantor any information now or hereafter in the Bank’s possession concerning the financial condition of the Borrower or any other matter. 
  

11.    Reporting Covenants.    So long as any Guaranteed Obligations shall remain unsatisfied or the
Bank shall have any commitment to loan money under the Credit Agreement, Guarantor agrees that it shall furnish to the Bank: 
  
 (a)    the information regarding Guarantor set forth in Sections 8.1(a) and (c) of the Credit Agreement; and

  

 B-2-10 

 (b)    such other information respecting the operations, properties,
business or condition (financial or otherwise) of Guarantor as required by the Credit Agreement or as the Bank may from time to time reasonably request. 
  
 12.    Additional Affirmative Covenants.    So long as any Guaranteed Obligations shall remain unsatisfied
or the Bank shall have any commitment to loan money under the Credit Agreement, Guarantor agrees that Guarantor shall execute, acknowledge, deliver, file, notarize and register at its own expense all such further agreements, instruments,
certificates, documents and assurances and perform such acts as the Bank shall deem necessary or appropriate to effectuate the purposes of this Guaranty and the other Guarantor Documents, and promptly provide the Bank with evidence of the foregoing
satisfactory in form and substance to it. 
  
 13.    Restrictions on Fundamental Changes.    So long as any Guaranteed Obligations shall remain unsatisfied or the Bank shall have any commitment to loan money under the Credit Agreement,
Guarantor agrees that Guarantor shall not merge or consolidate into or be acquired by, any Person, or sell, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets.

  
 14.    Other
Obligations.    The liability of Guarantor under this Guaranty is in addition to and shall be cumulative with all other liabilities of Guarantor to the Bank, if any, as guarantor, surety, endorser, accommodation co-obligor or
otherwise of any obligations of the Borrower, without any limitation as to amount, unless the instrument or agreement evidencing or creating such other liability specifically provides to the contrary. 
  
 15.    Events of
Default.    Any of the following shall constitute an “Event of Default”: 
  
 (a)    Representations and Warranties.    Any representation or warranty by Guarantor under
or in connection with the Guarantor Documents shall prove to have been incorrect in any material respect when made or deemed made. 
  
 (b)    Failure by Guarantor to Perform Certain Covenants.    Guarantor shall fail to
perform or observe any term, covenant or agreement contained in this Guaranty or any other Guarantor Document. 
  
 (c)    Invalidity of Guaranty.    This Guaranty or any other Guarantor Document shall for
any reason be revoked or invalidated, or otherwise cease to be in full force and effect, or Guarantor or any other Person shall contest in any manner the validity or enforceability thereof or Guarantor shall deny that it has any further liability or
obligation thereunder. 
  
 (d)    Default under Credit Agreement.    Any “Event of Default” as defined in the Credit Agreement shall occur. 
  
 Upon the occurrence of an Event of Default, the Bank shall have the rights and remedies set forth in Section 10.2 of the
Credit Agreement and may proceed to enforce all other 

  

 B-2-11 

 
rights and remedies available to the Bank under this Guaranty, the other Loan Documents, and applicable law. 
  
 16.    Addresses for Notices,
Etc.    All notices, requests, demands and other communications provided for hereunder shall be in writing and mailed or delivered (i) if to the Bank, at the address set forth in the Credit Agreement and (ii) if to the
Guarantor, at the address set forth on the execution pages hereto, or as to each party, at such other address as shall be designated by such party in a written notice to the other party complying as to delivery with this paragraph 16. All
such notices, requests, demands and other communications, when delivered, shall be effective upon actual delivery and when mailed, shall be effective when sent by nationally recognized overnight mail courier or delivery service, addressed as
aforesaid. 
  
 17.    No Waiver; Cumulative
Remedies.    No failure on the part of the Bank to exercise, and no delay in exercising, any right, remedy, power or privilege hereunder or under any other Guarantor Document shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right, remedy, power or privilege preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights and remedies under this Guaranty and the other
Guarantor Documents are cumulative and not exclusive of any rights, remedies, powers and privileges that may otherwise be available to the Bank. 
  
 18.    Costs and Expenses; Indemnification. 
  
 (a)    Costs and Expenses.    Guarantor agrees to pay on
demand: 
  
 (i)    the
reasonable out-of-pocket costs and expenses of the Bank and any of its Affiliates, and the reasonable fees and disbursements of counsel to the Bank (including allocated costs of internal counsel), in connection with the negotiation, preparation,
execution, delivery and administration of this Guaranty or any other Guarantor Document, and any amendments, modifications or waivers of the terms thereof; 
  
 (ii)    all costs and expenses of the Bank and its Affiliates, and fees and disbursements of counsel (including
allocated costs of internal counsel), in connection with the enforcement or attempted enforcement, or preservation of any rights or interests under, this Guaranty and any other Guarantor Document, and any out-of-court workout or other refinancing or
restructuring or any insolvency proceeding, including any losses, costs and expenses sustained by the Bank as a result of any failure by Guarantor to perform or observe its obligations contained in this Guaranty and the other Guarantor Documents;
provided, however, that notwithstanding the foregoing, the prevailing party in connection with any judicial suit or proceeding brought by any party to this transaction against the other shall be entitled to all costs and expenses, and all fees and
disbursements of counsel (including allocated costs of internal counsel). 
  
 (b)    Indemnification.    In addition, whether or not the transactions contemplated by the Loan Documents shall be consummated, Guarantor hereby agrees to indemnify the
Bank and any of its Affiliates (each an “Indemnified Person”), against, and 

  

 B-2-12 

 
hold each of them harmless from, any and all liabilities, obligations, losses, claims, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever, including the reasonable fees and disbursements of counsel to an Indemnified Person (including allocated costs of internal counsel), which may be imposed on, incurred by, or asserted against any
Indemnified Person, (i) in any way relating to or arising out of this Guaranty or any other Guarantor Document, the Guaranteed Obligations, or the transactions contemplated hereby or thereby, or (ii) with respect to any investigation, litigation or
other proceeding relating to any of the foregoing, irrespective of whether the Indemnified Person shall be designated a party thereto (the “Indemnified Liabilities”); provided that Guarantor shall not be liable to any Indemnified Person
for any portion of such Indemnified Liabilities to the extent they are found by a final decision of a court of competent jurisdiction to have resulted from such Indemnified Person’s gross negligence or willful misconduct. If and to the extent
that the foregoing indemnification is for any reason held unenforceable, Guarantor agrees to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. 

 
 (c)    Defense.    At the election of any Indemnified Person, Guarantor shall defend such Indemnified Person using legal counsel satisfactory to such Indemnified Person in such Person’s
sole discretion, at the sole cost and expense of Guarantor. 
  
 (d)    Interest.    Any amounts payable to the Bank under this paragraph 18 if not paid upon demand shall bear interest from the date of such demand until paid in full,
at the Prime Rate plus 2.00 percent per annum. 
  
 19.    Set off Rights.    As security for the payment of the Guaranteed Obligations or obligations arising under the Loan Documents, and any other obligations of Guarantor to the Bank of
any nature whatsoever (collectively the “Obligations”), Guarantor hereby grants to the Bank a security interest in, a lien on, and an express contractual right to set off against all depository account balances, cash, and any other
property of Guarantor now or hereafter in the possession of the Bank. The Bank may, at any time upon the occurrence of a default hereunder (notwithstanding any notice requirements or cure periods under this or other agreements between Guarantor and
the Bank) exercise the aforesaid right to setoff against the Obligations whether or not the Obligations (including future installments) are then due or have been accelerated, and the Bank may refuse to allow withdrawals from any account, all without
any advance or contemporaneous notice or demand of any kind to Guarantor, such notice and demand being expressly waived. 
  
 20.    Survival.    All covenants, agreements, representations and warranties made in this Guaranty and in
any other Guarantor Document shall survive the execution and delivery of this Guaranty, and shall continue in full force and effect so long as the Bank has any commitment to loan money under the Credit Agreement or any Guaranteed Obligations remain
unsatisfied. Without limiting the generality of the foregoing, the obligations of Guarantor under paragraph 18 shall survive the satisfaction of the Guaranteed Obligations and the termination of the commitment of the Bank to loan money under the
Credit Agreement. 
  

 B-2-13 

 21.    Benefits of Guaranty.    This Guaranty is entered
into for the sole protection and benefit of the Bank and its successors and assigns, and no other Person (other than any Indemnified Person specified herein) shall be a direct or indirect beneficiary of, or shall have any direct or indirect cause of
action or claim in connection with, this Guaranty. The Bank, by its acceptance of this Guaranty, shall not have any obligations under this Guaranty to any Person other than Guarantor, and such obligations shall be limited to those expressly stated
herein. 
  
 22.    Binding Effect;
Assignment. 
  
 (a)    Binding Effect.    This Guaranty shall be binding upon Guarantor and its successors and assigns, and inure to the benefit of and be enforceable by the Bank and its successors, endorsees,
transferees and assigns. 
  
 (b)    Assignment.    Guarantor shall not have the right to assign or transfer its rights and obligations hereunder or under any other Guarantor Documents without the prior written consent of
the Bank. The Bank may, without notice to or consent by Guarantor, sell, assign, transfer or grant participations in all or any portion of the Bank’s rights and obligations hereunder and under the other Guarantor Documents in connection with
any sale, assignment, transfer or grant of a participation by the Bank under Section 11.3 of the Credit Agreement of the Bank’s rights and obligations thereunder and under the other Loan Documents. Guarantor agrees that in connection with any
such sale, assignment, transfer or grant by the Bank, the same may deliver to the prospective participant or assignee financial statements and other relevant information relating to Guarantor and its Subsidiaries. 
  
 23.    Governing Law.    This
Guaranty shall be governed by, and construed in accordance with, the law of the state of Oregon. 
  
 24.    Submission to Jurisdiction.    Guarantor hereby (i) submits to the non-exclusive jurisdiction of the
courts of the State of Oregon and the Federal courts of the United States sitting in the State of Oregon for the purpose of any action or proceeding arising out of or relating to this Guaranty and the other Guarantor Documents, (ii) agrees that all
claims in respect of any such action or proceeding may be heard and determined in such courts, (iii) irrevocably waives (to the extent permitted by applicable law) any objection which it now or hereafter may have to the laying of venue of any such
action or proceeding brought in any of the foregoing courts, and any objection on the ground that any such action or proceeding in any such court has been brought in an inconvenient forum and (iv) agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner permitted by law. 
  
 25.    Waiver of Jury Trial.    Guarantor hereby agrees to waive, and the Bank by its acceptance hereof
hereby agrees to waive, their respective rights to a trial by jury of any claim or cause of action based upon or arising out of or related to this Guaranty, the other Guarantor Documents or the transactions contemplated hereby or thereby in any
action, proceeding or other litigation of any type brought by any of the parties against any other party or parties, whether with respect to contract claims, tort claims, or otherwise. Guarantor hereby agrees, and the Bank by its acceptance hereof
hereby agrees, that any such claim or cause of action shall be tried by a court trial without a jury. Without in any way limiting the foregoing, Guarantor further agrees, and the Bank by its acceptance hereof further agrees, that their respective
rights to a trial by jury are waived 

  

 B-2-14 

 
by operation of this paragraph as to any action, counterclaim, or other proceeding which seeks, in whole or in part, to challenge the validity or
enforceability of this Guaranty or the other Guarantor Documents or any provision hereof or thereof. This waiver shall apply to any subsequent amendments, renewals, supplements or modifications to this Guaranty and the other Guarantor Documents. A
copy of this paragraph 25 may be filed with any court as written evidence of the waiver of the right to trial by jury and consent to trial by court. 
  
 26.    Entire Agreement; Amendments and Waivers. 
  
 (a)    Entire Agreement.    This Guaranty and the other
Guarantor Documents constitute the entire agreement of Guarantor with respect to the matters set forth herein and supersede any prior agreements, commitments, drafts, communications, discussions and understandings, oral or written, with respect
thereto. There are no conditions to the full effectiveness of this Guaranty. 
  
 (b)    Amendments and Waivers.    Except to the extent otherwise provided in the Credit Agreement, this Guaranty and the other Guarantor Documents may not be amended
except by a writing signed by Guarantor and the Bank. No waiver of any rights of the Bank under any provision of this Guaranty or consent to any departure by Guarantor therefrom shall be effective unless in writing and signed by the Bank. Any such
amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. 
  
 27.    Severability.    Whenever possible, each provision of this Guaranty and the other Guarantor
Documents shall be interpreted in such manner as to be effective and valid under all applicable laws and regulations. If, however, any provision of this Guaranty or any other Guarantor Document shall be prohibited by or invalid under any such law or
regulation in any jurisdiction, it shall, as to such jurisdiction, be deemed modified to conform to the minimum requirements of such law or regulation, or, if for any reason it is not deemed so modified, it shall be ineffective and invalid only to
the extent of such prohibition or invalidity without affecting the remaining provisions of this Guaranty or such Guarantor Document, as the case may be, or the validity or effectiveness of such provision in any other jurisdiction. 
  
 28.    Effectiveness.    This
Guaranty shall be effective upon delivery to the Bank, without further act, condition or acceptance by the Bank. 
  
 29.    Disclaimer.    UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY A FINANCIAL
INSTITUTION CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY BORROWER’S PRINCIPAL RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY THE FINANCIAL
INSTITUTION TO BE ENFORCEABLE. 
  

 B-2-15 

 IN WITNESS WHEREOF, Guarantor has executed this Guaranty, as of the date first above written. 

 

	 	 	 	 	 	 	STANCORP MORTGAGE INVESTORS, LLC
					
	 	 	 	 	 	 	By:	 	 /s/    Eric E. Parsons

	 	 	 	 	 	 	Name:	 	 Eric E. Parsons

	 	 	 	 	 	 	Title:	 	 President and Chief Executive Officer

	 	 	 	 	 	 	Address:	 	 1100 S.W. Sixth Avenue, P11-D

	 	 	 	 	 	 	 	 	 Portland, Oregon 97204-1093

	 	 	 	 	 	 	 	 	  

	 	 	 	 	 	 	Attention: 	 	 Treasurer

	 	 	 	 	 	 	Fax No.	 	 (503) 321-7540

  

 B-2-16 

 EXHIBIT C 
  
 COMPLIANCE CERTIFICATE 
  
 This Compliance Certificate is executed and delivered by StanCorp Financial Group, Inc. (“Borrower”) to U.S. Bank National Association
(“Bank”) pursuant to the requirements of the Credit Agreement dated as of June 30, 2003 between Borrower and Bank (“Credit Agreement”). Any capitalized terms used herein and not defined herein shall have the meanings given to
such terms in the Credit Agreement. This Compliance Certificate covers Borrower’s and Guarantor’s fiscal              ended
            . 
  
 1.    Financial Covenants.    Attached are the calculations showing whether Borrower was in compliance with Section 8.11 of the Credit Agreement and whether Borrower and
Guarantor were in compliance with Section 8.12 of the Credit Agreement, as of the end of the fiscal period covered by this Compliance Certificate. Each such calculation is derived from the books and records of Borrower and Guarantor and correctly
reflects whether Borrower and Guarantor are in compliance with the applicable sections of the Credit Agreement. 
  
 2.    Contingent Liabilities.    Except as disclosed in the financial statements (or a note thereto)
furnished to the Bank, there were no material contingent obligations of Borrower and its Subsidiaries, including guaranties, endorsements, undertakings or agreements to reimburse or indemnify issuers of letters of credit, and agreements to maintain
net worth or working capital of or provide funds to satisfy any other financial test applicable to any other Person (whether or not they should be classified as liabilities upon the obligor’s balance sheet, whether originally incurred or later
assumed, and whether or not incurred as a general partner or joint venturer of a partnership or joint venture), but in any event excluding contingent obligations arising on account of the endorsement of negotiable instruments for deposit or
collection (or similar transactions) in the ordinary course of business. 
  
 3.    Defaults.    A review of the activities of Borrower and Guarantor during the fiscal period covered by this Compliance Certificate has been made under the
supervision of the undersigned with a view to determining whether during such fiscal period Borrower and Guarantor performed and observed all of their obligations under the Credit Agreement and the Guaranty. To the best knowledge of the undersigned
after reasonable investigation, all covenants and conditions of Borrower and Guarantor have been performed and observed during such fiscal period and no Default has occurred and is continuing under the Credit Agreement. 
  
 4.    Adverse Events.    To
the best knowledge of the undersigned after reasonable investigation, no Adverse Event has occurred since the last Compliance Certificate was delivered to the Bank. 
  

 C-1 

 5.    Date. This Compliance Certificate is executed on
                    . 
  

	 	 	BORROWER:
		
	 	 	StanCorp Financial Group, Inc.
		
	 	 	By:                                      
                                        
                   
	 	 	Name:                                     
                                        
              
	 	 	Title:                                     
                                        
                

  
  
  

 C-2 

 EXHIBIT D 
  
 Opinion of Counsel 
  

 EXHIBIT G 
  
 Subsidiaries (Section 7.16) 
  

STANCORP FINANCIAL GROUP, INC. 
  
 (As of June 30, 2003) 
  

	 Company Name

	  	 State of
Organization

	  	 Ownership
 Percentage

	 	 Direct Parent/Equity Owner

	 Standard Insurance Company
	  	Oregon	  	100%	 	StanCorp Financial Group, Inc.
	 Standard Management, Inc.
	  	Oregon	  	100%	 	StanCorp Financial Group, Inc.
	 StanCorp Mortgage Investors, LLC (1)
	  	Oregon	  	99%	 	StanCorp Financial Group, Inc.
	 StanCorp Real Estate Investors, LLC (1)
	  	Oregon	  	99%	 	StanCorp Financial Group, Inc.
	 StanCorp Investment Advisors, Inc.
	  	Oregon	  	100%	 	StanCorp Financial Group, Inc.
	 The Standard Life Insurance Company of New York
	  	Oregon	  	100%	 	StanCorp Financial Group, Inc.
	 400 Health Club, Inc.
	  	Oregon	  	100%	 	Standard Management, Inc.
	 Standard Assigned Benefits, Inc.
	  	Oregon	  	100%	 	Standard Management, Inc.
	 StanCorp Equities, Inc.
	  	Oregon	  	100%	 	Standard Management, Inc.

  
 Entities are corporations unless
otherwise noted: (1) = Limited Liability Company 
  

 EXHIBIT H 
  
 Partnerships/Joint Ventures (Section 7.17) 
  
 STANCORP FINANCIAL GROUP, INC. 
  
 (As of June 30, 2003) 
  

	 Company Name

	  	 State of
Organization

	  	 Ownership
 Percentage

	 	 Direct Parent/Equity Owner

	 Alder House, LP (2)
	  	Oregon	  	33%	 	Standard Insurance Company
	 Gold/West Henry Building, LP (2)
	  	Oregon	  	19.8%	 	Standard Insurance Company
	 Oregon Equity Fund, LP (2)
	  	Oregon	  	24.8%	 	Standard Insurance Company
	 Oregon Equity Fund II, LP (2)
	  	Oregon	  	29.4%	 	Standard Insurance Company
	 Oregon Equity Fund III, LP (2)
	  	Oregon	  	19.2%	 	Standard Insurance Company
	 Oregon Equity Fund IV
	  	Oregon	  	12.4%	 	Standard Insurance Company
	 Canyon Park Development (2)
	  	Washington	  	75%	 	Standard Insurance Company
	 Hillsboro Hotel Association (2)
	  	Washington	  	21.6%	 	Standard Insurance Company
	 Portland West CYM, LLC (1)
	  	Washington	  	14.4%	 	Standard Insurance Company
	 Homestead Equity (2)
	  	Oregon	  	20.0%	 	Standard Insurance Company
	 Sunset Center LLC (1)
	  	Oregon	  	50.0%	 	StanCorp Real Estate Investors, LLC
	 NMC Limited II, LLC (1)
	  	Oregon	  	50%	 	Standard Insurance Company

  
 Entities are corporations unless
otherwise noted: (1) = Limited Liability Company; (2) = Limited Partnership 

 TABLE OF CONTENTS 
  
  

	 	  	 	  	Page

	 ARTICLE I         DEFINITIONS AND ACCOUNTING TERMS
	  	1
	1.1	  	 Defined Terms
	  	1
	1.2	  	 Accounting Terms and Calculations
	  	6
	1.3	  	 Computation of Time Periods
	  	6
	1.4	  	 Other Definitional Terms
	  	6
	 ARTICLE II         TERMS OF LENDING
	  	6
	2.1	  	The Commitment	  	6
	2.2	  	Borrowing Procedures	  	6
	2.3	  	Continuation or Conversion of Loan	  	7
	2.4	  	 The Note
	  	7
	2.5	  	 Funding Losses
	  	7
	2.6	  	Letters of Credit	  	8
	ARTICLE III         INTEREST AND FEES	  	9
	3.1	  	Interest	  	9
	3.2	  	Facility Fee	  	10
	3.3	  	Computation	  	11
	3.4	  	 Account Deductions
	  	11
	ARTICLE IV         PAYMENTS, PREPAYMENTS, REDUCTION OR TERMINATION	  	11
	4.1	  	Repayment	  	11
	4.2	  	Prepayments	  	11
	4.3	  	Payments	  	11
	4.4	  	Optional Reduction or Termination of Commitment	  	11
	ARTICLE V         ADDITIONAL PROVISIONS RELATING TO LOAN AND LETTERS OF CREDIT	  	12
	5.1	  	Increased Costs	  	12
	5.2	  	Deposits Unavailable or Interest Rate Unascertainable or Inadequate; Impracticability	  	13
	5.3	  	Changes in Law Rendering LIBOR Advances Unlawful	  	13
	5.4	  	Discretion of the Bank as to Manner of Funding	  	14
	5.5	  	Claims for Increased Costs	  	14

  
  
  

 -i- 

 TABLE OF CONTENTS 
  
 (continued) 
  

	 	  	 	  	Page

	ARTICLE VI         CONDITIONS PRECEDENT	  	14
	6.1	  	Conditions of Initial Advance	  	14
	6.2	  	Conditions Precedent to all Advances	  	15
	ARTICLE VII         REPRESENTATIONS AND WARRANTIES	  	15
	7.1	  	Organization, Standing, Etc.	  	15
	7.2	  	Authorization and Validity	  	15
	7.3	  	No Conflict; No Default	  	16
	7.4	  	Government Consent	  	16
	7.5	  	Financial Statements and Condition	  	16
	7.6	  	Litigation and Contingent Liabilities	  	16
	7.7	  	Compliance	  	16
	7.8	  	Environmental, Health and Safety Laws	  	16
	7.9	  	ERISA	  	17
	7.10	  	Regulation U	  	17
	7.11	  	 Ownership of Property
	  	17
	7.12	  	Taxes	  	17
	7.13	  	Trademarks, Patents	  	18
	7.14	  	 Investment Company Act
	  	18
	7.15	  	Public Utility Holding Company Act	  	18
	7.16	  	Subsidiaries	  	18
	7.17	  	Partnerships and Joint Ventures	  	18
	ARTICLE VIII         AFFIRMATIVE COVENANTS	  	18
	8.1	  	Financial Statements and Reports	  	18
	8.2	  	Existence	  	20
	8.3	  	Insurance	  	20
	8.4	  	Payment of Taxes and Claims	  	20
	8.5	  	Inspection	  	20
	8.6	  	Maintenance of Properties	  	21
	8.7	  	Books and Records	  	21

  
  

 -ii- 

 TABLE OF CONTENTS 
  
 (continued) 
  

	 	  	 	  	Page

	8.8	  	 Compliance
	  	21
	8.9	  	 ERISA
	  	21
	8.10	  	 Environmental Matters
	  	21
	8.11	  	 Financial Covenants of the Borrower
	  	21
	8.12	  	 Financial Covenants of SIC
	  	21
	8.13	  	 Material Transactions
	  	21
	8.14	  	 Licenses
	  	22
	 ARTICLE IX         NEGATIVE COVENANTS
	  	22
	9.1	  	 Merger
	  	22
	9.2	  	 Sale of Assets
	  	22
	9.3	  	 Plans
	  	22
	9.4	  	 Change in Nature of Business
	  	22
	9.5	  	 Subsidiaries
	  	22
	9.6	  	 Other Agreements
	  	22
	9.7	  	 Unconditional Purchase Obligations
	  	23
	9.8	  	 Transactions with Related Parties
	  	23
	9.9	  	 Use of Proceeds
	  	23
	 ARTICLE X         EVENTS OF DEFAULT AND REMEDIES
	  	23
	10.1	  	 Events of Default
	  	23
	10.2	  	 Remedies
	  	25
	10.3	  	 Letters of Credit
	  	25
	ARTICLE XI         MISCELLANEOUS	  	26
	11.1	  	Waiver and Amendment	  	26
	11.2	  	Amendments, Etc	  	26
	11.3	  	Assignments and Participation	  	26
	11.4	  	Costs, Expenses and Taxes	  	28
	11.5	  	Notices	  	28
	11.6	  	Successors	  	28
	11.7	  	Severability	  	28

  

 -iii- 

 TABLE OF CONTENTS 
  
 (continued) 
  

	11.8	  	 Subsidiary References
	  	28
	11.9	  	 Captions
	  	28
	11.10	  	 Entire Agreement
	  	29
	11.11	  	 Counterparts
	  	29
	11.12	  	 Set Off Rights
	  	29
	11.13	  	 Governing Law
	  	29
	11.14	  	 Consent to Jurisdiction
	  	29
	11.15	  	 Waiver of Jury Trial
	  	29
	11.16	  	 Confidentiality
	  	30
	11.17	  	 Disclosure
	  	30

  

 -iv-

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