Document:

Amended and Restated Loan and Security Agreement

 Exhibit 10.33 
 EXECUTION VERSION 
  
  
  
 SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT 
 among 
 LESLIE’S POOLMART, INC., 
 and 
 LPM
MANUFACTURING, INC., 
 as Borrowers, 
 THE FINANCIAL INSTITUTIONS NAMED HEREIN, 
 as Lenders, 
 and 
 WELLS FARGO RETAIL FINANCE, LLC, 
 as Agent 
 Dated as of September 30, 2009 
  
  
  

 TABLE OF CONTENTS 
  

							
	 1.
	  	DEFINITIONS AND CONSTRUCTION	  	1
				
		  	1.1.	  	Definitions	  	1
				
		  	1.2.	  	Accounting Terms	  	28
				
		  	1.3.	  	Code	  	28
				
		  	1.4.	  	Construction	  	28
				
		  	1.5.	  	Schedules and Exhibits	  	29
			
	 2.
	  	LOAN AND TERMS OF PAYMENT	  	29
				
		  	2.1.	  	Revolving Advances	  	29
				
		  	2.2.	  	Defaulting Lender	  	34
				
		  	2.3.	  	Letters of Credit	  	36
				
		  	2.4.	  	Intentionally Omitted	  	46
				
		  	2.5.	  	Intentionally Omitted	  	46
				
		  	2.6.	  	Payments	  	46
				
		  	2.7.	  	Overadvances	  	47
				
		  	2.8.	  	Interest and Letter of Credit Fees: Rates, Payments, and Calculations	  	47
				
		  	2.9.	  	Cash Management; Collection of Accounts	  	49
				
		  	2.10.	  	Crediting Payments; Application of Collections	  	49
				
		  	2.11.	  	Designated Account	  	50
				
		  	2.12.	  	Maintenance of Loan Account; Statements of Obligations	  	50
				
		  	2.13.	  	Fees	  	50
				
		  	2.14.	  	Eurodollar Rate Loans	  	51
				
		  	2.15.	  	Illegality	  	52
				
		  	2.16.	  	Requirements of Law	  	53
				
		  	2.17.	  	Indemnity	  	54
				
		  	2.18.	  	Increase in Commitments	  	55
			
	 3.
	  	CONDITIONS; TERM OF AGREEMENT	  	57
				
		  	3.1.	  	Conditions Precedent to the Restatement Date	  	57
				
		  	3.2.	  	Conditions Precedent to all Advances and all Letters of Credit	  	59
				
		  	3.3.	  	Term; Automatic Renewal	  	59
				
		  	3.4.	  	Effect of Termination	  	59

  

 i 

							
		  	3.5.	  	Early Termination or Reduction of Commitments and Maximum Commitment Amount by Borrowers	  	59
				
		  	3.6.	  	Termination Upon Event of Default	  	60
			
	 4.
	  	CREATION OF SECURITY INTEREST	  	60
				
		  	4.1.	  	Grant of Security Interest	  	60
				
		  	4.2.	  	Control of Collateral	  	60
				
		  	4.3.	  	Negotiable Collateral	  	60
				
		  	4.4.	  	Collection of Accounts, General Intangibles, and Negotiable Collateral	  	61
				
		  	4.5.	  	Delivery of Additional Documentation Required	  	61
				
		  	4.6.	  	Power of Attorney	  	61
				
		  	4.7.	  	Right to Inspect	  	62
			
	 5.
	  	REPRESENTATIONS AND WARRANTIES	  	62
				
		  	5.1.	  	No Encumbrances	  	62
				
		  	5.2.	  	Accounts	  	63
				
		  	5.3.	  	Inventory	  	63
				
		  	5.4.	  	Equipment	  	63
				
		  	5.5.	  	Location of Inventory and Equipment	  	63
				
		  	5.6.	  	Inventory Records	  	63
				
		  	5.7.	  	Legal Status	  	63
				
		  	5.8.	  	Due Organization and Qualification; Subsidiaries	  	64
				
		  	5.9.	  	Due Authorization; No Conflict	  	64
				
		  	5.10.	  	Litigation	  	65
				
		  	5.11.	  	No Material Adverse Change	  	65
				
		  	5.12.	  	Solvency; Borrowers are Solvent	  	65
				
		  	5.13.	  	Employee Benefits	  	66
				
		  	5.14.	  	Environmental Condition	  	66
				
		  	5.15.	  	Taxes	  	66
				
		  	5.16.	  	Foreign Asset Control Regulations	  	67
				
		  	5.17.	  	Brokerage Fees	  	67
				
		  	5.18.	  	Intellectual Property	  	67
				
		  	5.19.	  	Leases	  	67
				
		  	5.20.	  	DDAs	  	67

  

 ii 

							
		  	5.21.	  	Credit Card Receipts	  	67
				
		  	5.22.	  	Indebtedness	  	68
				
		  	5.23.	  	Complete Disclosure	  	68
				
		  	5.24.	  	Insurance	  	68
				
		  	5.25.	  	Requirements of Law	  	68
				
		  	5.26.	  	Investment Company Status	  	68
				
		  	5.27.	  	No Margin Stock	  	68
				
		  	5.28.	  	Investments	  	69
				
		  	5.29.	  	In-Transit Inventory	  	69
			
	 6.
	  	AFFIRMATIVE COVENANTS	  	69
				
		  	6.1.	  	Accounting System	  	69
				
		  	6.2.	  	Collateral Reporting	  	69
				
		  	6.3.	  	Financial Statements, Reports, Certificates	  	69
				
		  	6.4.	  	Intentionally Omitted	  	70
				
		  	6.5.	  	Intentionally Omitted	  	70
				
		  	6.6.	  	Returns	  	71
				
		  	6.7.	  	Title to Equipment	  	71
				
		  	6.8.	  	Maintenance	  	71
				
		  	6.9.	  	Taxes	  	71
				
		  	6.10.	  	Insurance	  	71
				
		  	6.11.	  	No Setoffs or Counterclaims	  	72
				
		  	6.12.	  	Location of Inventory and Equipment	  	72
				
		  	6.13.	  	Compliance with Laws	  	73
				
		  	6.14.	  	Employee Benefits	  	73
				
		  	6.15.	  	Leases	  	73
				
		  	6.16.	  	[Intentionally Omitted]	  	73
				
		  	6.17.	  	Existence	  	73
				
		  	6.18.	  	Environmental	  	73
				
		  	6.19.	  	Immediate Notice to Agent	  	74
				
		  	6.20.	  	Disclosure Updates	  	75
				
		  	6.21.	  	Solvency	  	75

  

 iii 

							
		  	6.22.	  	Line of Business	  	75
				
		  	6.23.	  	Additional Subsidiaries	  	75
				
		  	6.24.	  	In-Transit Inventory	  	75
				
		  	6.25.	  	Post-Restatement Date Deliveries	  	76
			
	 7.
	  	NEGATIVE COVENANTS	  	76
				
		  	7.1.	  	Indebtedness	  	76
				
		  	7.2.	  	Liens	  	77
				
		  	7.3.	  	Restrictions on Fundamental Changes	  	78
				
		  	7.4.	  	Disposal of Assets	  	78
				
		  	7.5.	  	Change Name	  	78
				
		  	7.6.	  	Guarantee	  	78
				
		  	7.7.	  	Nature of Business	  	78
				
		  	7.8.	  	Prepayments and Amendments	  	78
				
		  	7.9.	  	Change of Control	  	79
				
		  	7.10.	  	Consignments	  	79
				
		  	7.11.	  	Distributions	  	79
				
		  	7.12.	  	Accounting Methods	  	80
				
		  	7.13.	  	Investments and Acquisitions	  	80
				
		  	7.14.	  	Transactions with Affiliates	  	80
				
		  	7.15.	  	Suspension	  	80
				
		  	7.16.	  	Intentionally Omitted	  	80
				
		  	7.17.	  	Use of Proceeds	  	80
				
		  	7.18.	  	Change in Location of Chief Executive Office; Inventory and Equipment with Bailees	  	80
				
		  	7.19.	  	No Prohibited Transactions Under ERISA	  	81
				
		  	7.20.	  	Financial Covenants	  	81
				
		  	7.21.	  	Store Closings	  	82
				
		  	7.22.	  	Securities Accounts	  	82
				
		  	7.22.	  	Fiscal Year	  	80
			
	 8.
	  	EVENTS OF DEFAULT	  	82
				
		  	8.1.	  	Payment	  	82
				
		  	8.2.	  	Covenants, etc.	  	82

  

 iv 

							
		  	8.3.	  	Attachment	  	83
				
		  	8.4.	  	Insolvency	  	83
				
		  	8.5.	  	Involuntary Insolvency	  	83
				
		  	8.6.	  	Judgment	  	83
				
		  	8.7.	  	Levy	  	83
				
		  	8.8.	  	[Intentionally Omitted]	  	83
				
		  	8.9.	  	Material Agreements	  	83
				
		  	8.10.	  	Optional Redemption of Indebtedness	  	84
				
		  	8.11.	  	Misrepresentation	  	84
				
		  	8.12.	  	Cessation of Business	  	84
				
		  	8.13.	  	Change of Control	  	84
				
		  	8.14.	  	Liens	  	84
				
		  	8.15.	  	Loan Documents	  	84
				
		  	8.16.	  	Material Restraint	  	85
				
		  	8.17.	  	Indictment	  	85
			
	 9.
	  	THE LENDER GROUP’S RIGHTS AND REMEDIES	  	85
				
		  	9.1.	  	Rights and Remedies	  	85
				
		  	9.2.	  	Remedies Cumulative	  	88
			
	 10.
	  	TAXES AND EXPENSES; WITHHOLDINGS	  	89
				
		  	10.1.	  	Third Party Payments	  	89
				
		  	10.2.	  	Taxes	  	89
			
	 11.
	  	WAIVERS; INDEMNIFICATION	  	91
				
		  	11.1.	  	Demand; Protest; etc.	  	91
				
		  	11.2.	  	The Lender Group’s Liability for Collateral	  	91
				
		  	11.3.	  	Indemnification	  	91
				
		  	11.4.	  	Joint Borrowers	  	92
				
		  	11.5.	  	Costs and Expenses of Agent and Lenders	  	97
			
	 12.
	  	NOTICES	  	98
			
	 13.
	  	CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER	  	99
			
	 14.
	  	DESTRUCTION OF BORROWERS’ DOCUMENTS	  	99
			
	 15.
	  	ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS	  	100

  

 v 

							
		  	15.1.	  	Assignments and Participations	  	100
				
		  	15.2.	  	Successors	  	102
			
	 16.
	  	AMENDMENTS; WAIVERS	  	102
				
		  	16.1.	  	Amendments and Waivers	  	102
				
		  	16.2.	  	No Waivers; Cumulative Remedies	  	103
			
	 17.
	  	AGENT; THE LENDER GROUP	  	104
				
		  	17.1.	  	Appointment and Authorization of Agent	  	104
				
		  	17.2.	  	Delegation of Duties	  	104
				
		  	17.3.	  	Liability of Agent-Related Persons	  	105
				
		  	17.4.	  	Reliance by Agent	  	105
				
		  	17.5.	  	Notice of Default or Event of Default	  	106
				
		  	17.6.	  	Credit Decision	  	106
				
		  	17.7.	  	Costs and Expenses; Indemnification	  	107
				
		  	17.8.	  	Agent in Individual Capacity	  	108
				
		  	17.9.	  	Successor Agent	  	108
				
		  	17.10.	  	Withholding Tax	  	108
				
		  	17.11.	  	Collateral Matters	  	109
				
		  	17.12.	  	Restrictions on Actions by Lenders; Sharing of Payments	  	110
				
		  	17.13.	  	Agency for Perfection	  	112
				
		  	17.14.	  	Payments by Agent to the Lenders	  	112
				
		  	17.15.	  	Concerning the Collateral and Related Loan Documents	  	112
				
		  	17.16.	  	Field Audits and Examination Reports; Confidentiality; Disclaimers by Lenders; Other Reports and Information	  	112
				
		  	17.17.	  	Several Obligations; No Liability	  	113
				
		  	17.18.	  	Distributions	  	114
				
		  	17.19.	  	Agent’s Covering of Fundings	  	114
				
		  	17.20.	  	Bank Product Obligations	  	116
			
	 18.
	  	ACCELERATION AND LIQUIDATION	  	116
				
		  	18.1.	  	Acceleration Notice	  	116
				
		  	18.2.	  	Acceleration of Duties	  	117
				
		  	18.3.	  	Actions At and Following Initiation of Liquidation	  	117
				
		  	18.4.	  	Agent’s Conduct of Liquidation	  	117

  

 vi 

							
		  	18.5.	  	Distribution of Liquidation Proceeds by Agent	  	118
				
		  	18.6.	  	Distributions of Liquidation Proceeds by Agent and Ordinary Loan Payments	  	118
			
	 19.
	  	GENERAL PROVISIONS	  	119
				
		  	19.1.	  	Effectiveness	  	119
				
		  	19.2.	  	Section Headings	  	119
				
		  	19.3.	  	Interpretation	  	119
				
		  	19.4.	  	Severability of Provisions	  	119
				
		  	19.5.	  	Counterparts; Telefacsimile Execution	  	119
				
		  	19.6.	  	Revival and Reinstatement of Obligations	  	119
				
		  	19.7.	  	Integration	  	120
				
		  	19.8.	  	Existing Loan Agreement Superseded	  	120
				
		  	19.9.	  	U.S. Patriot Act	  	120
				
		  	19.10.	  	Replacement of Lenders	  	120
				
		  	19.11.	  	Right of Set-Off	  	121
				
		  	19.12.	  	Pledges To Federal Reserve Banks	  	121
				
		  	19.13.	  	Dispute Resolution	  	122
				
		  	19.14.	  	Press Releases	  	122

  

 vii 

 SCHEDULES AND EXHIBITS 
  

					
	Schedule C-1	  	Commitments on Restatement Date	  	
	Schedule E-1	  	Inventory Locations	  	
	Schedule P-1	  	Permitted Liens	  	
	Schedule 2.1(a)	  	Form of Revolving Credit Note	  	
	Schedule 2.9	  	Cash Management Banks and Accounts	  	
	Schedule 5.7	  	Chief Executive Offices, FEINs	  	
	Schedule 5.8	  	Subsidiaries	  	
	Schedule 5.10(a)	  	Litigation	  	
	Schedule 5.10(b)	  	Commercial Tort Claims	  	
	Schedule 5.14	  	Environmental Condition	  	
	Schedule 5.21	  	Credit Card Processors	  	
	Schedule 5.22	  	Indebtedness	  	
	Schedule 5.24	  	Insurance	  	
	Schedule 6.12	  	Location of Inventory and Equipment	  	
	Schedule 7.4	  	Sale and Leaseback Properties	  	
			
	Exhibit A-1	  	Form of Assignment and Acceptance	  	
	Exhibit B-1	  	Form of Business Plan	  	
	Exhibit C-1	  	Form of Compliance Certificate	  	
	Exhibit C-2	  	Form of Credit Card Processor Agreement	  	
	Exhibit E-1	  	Eligible Transferees	  	

  

 viii 

 SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT 
 THIS SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (as hereafter amended, restated, supplemented, or modified from time to
time, this “Agreement”), is entered into as of September 30, 2009, among LESLIE’S POOLMART, INC., a Delaware corporation (“Poolmart”), LPM MANUFACTURING, INC., a California corporation
(“LPM”; each of Poolmart and LPM, a “Borrower,” and collectively, “Borrowers”), with Borrowers’ chief executive office located at 3925 E. Broadway Road, Suite 100, Phoenix, Arizona 85040, and
the financial institutions listed on the signature pages hereof (such financial institutions, together with their respective successors and assigns, are referred to hereinafter each individually as a “Lender” and collectively as the
“Lenders”), and WELLS FARGO RETAIL FINANCE, LLC, as Agent. 
 RECITALS 
 WHEREAS, the Borrowers, Agent and certain of the Lenders have previously entered into the Existing Loan Agreement, as defined herein;

 WHEREAS, the Borrowers have requested that the Existing Loan Agreement be amended and restated in its entirety by this
Agreement in order to extend the Maturity Date and make certain other amendments and modifications to the Existing Loan Agreement as provided herein; and 
 WHEREAS, the Lenders are willing to amend and restate the Existing Loan Agreement as provided herein; 
 NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged (these recitals being an integral part
of this Agreement), the Borrowers, the Agent and the Lenders hereby agree that, as of the Restatement Date (as defined below), the Existing Loan Agreement shall be amended and restated in its entirety and shall remain in full force and effect only
as set forth herein and parties hereto hereby agree as follows: 
 The parties agree as follows: 
 1. DEFINITIONS AND CONSTRUCTION. 
 1.1. Definitions. As used in this Agreement, the following terms shall have the following definitions: 
 “ACH Transactions” means any cash management or related services (including the Automated Clearing House
processing of electronic funds transfers through the direct Federal Reserve Fedline system) provided by WFRF or its Affiliates for the account of the Borrowers. 
 “Acceleration” means with respect to any Indebtedness, the making of a demand or declaration that it has
become due and payable prior to its stated maturity as a consequence of the occurrence and continuation of a default or event of default with respect thereto. Derivations of the word “Acceleration” (such as “Accelerate”) are used
with like meaning in this Agreement. 

 “Acceleration Notice” means a written notice as follows:

 (a) From the Agent to the Lenders, as provided in Section 18.1(a). 
 (b) From the Required Lenders to the Agent, as provided in Section 18.1(b). 
 “Account Debtor” means any Person who is or who may become obligated under, with respect to, or on account
of, an Account. 
 “Accounts” means all currently existing and hereafter arising accounts,
contract rights, and all other forms of obligations owing to any Person arising out of the sale or lease of goods or the rendition of services by such Person, irrespective of whether earned by performance, and any and all credit insurance,
guaranties, or security therefor. 
 “Additional Commitment Lender” has the meaning given such
term in Section 2.18(c). 
 “Adjusted Eurodollar Rate” means, with respect to each
Interest Period for any Eurodollar Rate Loan, the rate per annum determined by the Agent (rounded upwards, if necessary, to the next of 1/100th of one percent) determined by dividing (a) the Eurodollar Rate for such Interest Period by
(b) a percentage equal to (i) 100% minus (ii) the Reserve Percentage. The Adjusted Eurodollar Rate shall be adjusted on and as of the effective day of any change in the Reserve Percentage. 
 “Advances” has the meaning set forth in Section 2.1(a). 
 “Affiliate” means, as applied to any Person, any other Person who directly or indirectly controls, is
controlled by, is under common control with or is a director or executive officer of such Person. For purposes of this definition, “control” means the possession, directly or indirectly, of the power to vote 15% or more of the securities
having ordinary voting power for the election of directors or the direct or indirect power to direct the management and policies of a Person. 
 “Agent” means WFRF, solely in its capacity as agent for the Lenders, and shall include any successor agent. 
 “Agent Loan” has the meaning set forth in Section 2.1(h). 
 “Agent-Related Persons” means Agent, together with its Affiliates, and the officers, directors, employees,
and agents of Agent and such Affiliates. 
 “Agent Protective Advance” has the meaning set forth
in Section 2.1(i). 
 “Agent’s Account” has the meaning set forth in
Section 2.9. 
  

 2 

 “Agent’s Fee Letter” means that certain amended and
restated fee letter, of even date herewith, by Agent addressed to Borrowers concerning certain fees payable to Agent. 
 “Agreement” has the meaning set forth in the preamble hereto. 
 “Applicable
Law” means as to any Person: (i) all statutes, rules, regulations, orders, or other requirements having the force of law, and (ii) all court orders and injunctions, binding arbitrator’s decisions, and/or similar rulings
having the force of law and binding on such Person, in each instance ((i) and (ii)) of or by any federal, state, municipal, and other Governmental Authority, or court, tribunal, panel, or other body which has or claims jurisdiction over such Person,
or any material property of such Person. 
 “Applicable Margin” means, at any time, with respect
to any Advance or L/C Fee: (a) from the Restatement Date through and including September 30, 2009, (i) 3.25% with respect to Eurodollar Rate Loans consisting of Advances or L/C Fees; and (ii) 2.25% with respect to Base Rate Loans
consisting of Advances; and (b) commencing on the first day of the first calendar month following an adjustment as provided in the immediately succeeding sentence, the rate set forth below which corresponds to the Leverage Ratio of Borrowers
for which Agent receives the financial statements and Compliance Certificate required below, determined and adjusted as provided herein. At all times after September 30, 2009, the Applicable Margin shall be adjusted quarterly after each
delivery to Agent of the financial statements of the Borrowers required pursuant to Section 6.3 hereof, together with the corresponding Compliance Certificate (demonstrating, among other things, the Leverage Ratio for such quarter), each
such adjustment to be effective on the first day of the first calendar month after each such delivery. 
 Applicable Margin For:

  

												
	 Level
	  	 Average Leverage Ratio
	  	Base Rate
Loans	 	 	Eurodollar Rate
Loans	 	 	L/C Fee	 
	 I
	  	 less than 1.0:1.0
	  	2.00	% 	 	3.00	% 	 	3.00	% 
	 II
	  	 greater than or equal to 1.0:1.0 and less than 2.0:1.0
	  	2.25	% 	 	3.25	% 	 	3.25	% 
	 III
	  	 greater than or equal to 2.0:1.0
	  	2.50	% 	 	3.50	% 	 	3.50	% 

 Notwithstanding anything in this definition to the contrary, in the event that Agent shall fail to
receive any such financial statements and the related Compliance Certificate for any calendar month within 45 days following the end of such month, then the Applicable Margin shall, at the end of such 45th day, immediately and without notice or
further action be the highest Applicable Margin provided herein (such Applicable Margin to be in effect until the Agent receives the monthly financial statements of Borrower required under Section 6.3 for the most recent month and the
related Compliance Certificate). 
 “Assignee” has the meaning set forth in
Section 15.1. 
  

 3 

 “Assignment and Acceptance” has the meaning set forth in
Section 15.1(a) and shall be in the form of Exhibit A-1. 
 “Authorized Person”
means any officer or other employee of Borrower. 
 “Auto-Extension Letter of Credit” has the
meaning set forth in Section 2.3(b)(iii). 
 “Auto-Extension Notice Date” has the
meaning set forth in Section 2.3(b)(iii). 
 “Availability” means, as of the date of
determination, the result (so long as such result is a positive number) of (a) the Maximum Commitment Amount, less (b) the Revolving Facility Usage. 
 “Availability Condition” means, in connection with any of the events specified at Sections 7.8(a),
7.11 (other than 7.11(a) and (d)) and 7.13, (i) no Default or Event of Default shall have occurred or be continuing or would result from such event, (ii) immediately before and after giving effect to such event,
Availability hereunder is not less than $20,000,000, (iii) prior to such event the Borrowers have delivered to the Agent reasonably satisfactory financial projections forecasting that Availability will not be less than $20,000,000 immediately
before such event or at any time during the six (6) month period immediately following the next Parent Tax Distribution to occur after such event (after giving pro forma effect to such Parent Tax Distribution and all other Parent Tax
Distributions and other events subject to the Availability Condition projected in good faith to be made in the six (6) month period following the next Parent Tax Distribution), and (iv) not less than five (5) Business Days prior to
such event, the Borrowers have delivered a certificate of their chief financial officer certifying that the requirements set forth in clauses (i) through (iii) above are satisfied and the projections delivered to the Agent in connection
with such transaction were prepared based on reasonable assumptions and reflect good faith estimates of the Borrowers’ future financial performance. 
 “Average Quarterly Availability” means, as of any date of determination, (a) average daily Availability for the preceding quarter, less (b) the sum of (i) the
average daily amount of Advances that were outstanding during the immediately preceding quarter, plus (ii) the average daily amount of the undrawn Letters of Credit that were outstanding during the immediately preceding quarter. 
 “Bank Product Agreements” means any agreement between a Bank Product Provider with respect to Bank Products
including, without limitation, those certain cash management service agreements entered into from time to time by a Borrower or its Subsidiaries. 
 “Bank Product Obligations” means, at any time, the outstanding amount of all obligations, liabilities, contingent reimbursement obligations, fees, and expenses owing by any Borrower or
any of its Subsidiaries to a Bank Product Provider pursuant to or evidenced by a Bank Product Agreement and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, and including all
such amounts that a Borrower is obligated to reimburse to Agent as a result of Agent purchasing participations or executing indemnities or reimbursement obligations with respect to the Bank Products provided to a Borrower or any of its Subsidiaries
pursuant to a Bank Product Agreement. 
  

 4 

 “Bank Products” means any service or facility extended to
Borrowers by any Bank Product Provider including: (a) credit cards, (b) credit card processing services, (c) debit cards, (d) purchase cards, (e) ACH Transactions, (f) cash management, including controlled disbursement,
accounts or services, (g) Hedge Agreements, or (h) Factored Receivables and other arrangements with respect to the factoring, sale, put, or other conditional sale or transfer of any Accounts of a Borrower or accounts payable of a Borrower.

 “Bank Product Provider” means Wells Fargo or any Affiliate thereof and, if the requirements
of Section 17.20 hereof have been satisfied, any Lender (other than WFRF) or its Affiliates provided that such Lender is a Lender hereunder on the date such Bank Products are extended to Borrowers. 
 “Base Rate” shall mean, for any day, a rate per annum (rounded upward, if necessary, to the next 1/100 of
1%) equal to the greatest of (a) the Reference Rate in effect on such day, (b) the one-month Adjusted Eurodollar Rate in effect on such day plus 1.00% and (c) the Federal Funds Effective Rate in effect on such day plus 0.50%. If the
Agent shall have determined (which determination shall be conclusive absent manifest error) that it is unable to ascertain the Federal Funds Effective Rate for any reason, including the inability or failure of the Agent to obtain sufficient
quotations in accordance with the terms of the definition thereof, the Base Rate shall be determined without regard to clause (c) of the preceding sentence until the circumstances giving rise to such inability no longer exist. Any change in the
Base Rate due to a change in the Reference Rate, the Adjusted Eurodollar Rate or the Federal Funds Effective Rate shall be effective on the date of such change. 
 “Base Rate Loans” means any Advance made or outstanding hereunder during any period when interest on such
Advance is payable based on the Base Rate. 
 “Bankruptcy Code” means the United States
Bankruptcy Code (11 U.S.C. § 101 et seq.), as amended, and any successor statute. 
 “Benefit
Plan” means a “defined benefit plan” (as defined in Section 3(35) of ERISA) for which Borrower, any Subsidiary of Borrower, or any ERISA Affiliate has been an “employer” (as defined in Section 3(5) of ERISA)
within the past six years. 
 “Board of Directors” means the board of directors (or comparable
managers) of Poolmart or any committee thereof duly authorized to act on behalf of the board. 
 “Borrower” and “Borrowers” mean Poolmart and LPM, a Borrower and collectively, the Borrowers. 
 “Borrowers’ Books” means all of Borrowers’ and their respective Subsidiaries’ books and records including: ledgers; records indicating, summarizing, or evidencing
Borrowers’ or their Subsidiaries’ properties or assets (including the Collateral) or liabilities; all information relating to Borrowers’ or their Subsidiaries’ business operations or financial condition or General Intangibles
related to all such information; and all computer programs, disk or tape files, printouts, runs, or other computer prepared information. 
  

 5 

 “Borrowing” means a borrowing hereunder consisting of
Advances or Letters of Credit made or issued on the same day by the Lenders (or by Agent in the case of an Agent Loan or any Agent Protective Advance) or Issuing Bank, as applicable. 
 “Business Day” means (a) any day that is not a Saturday, Sunday, or a day on which banks in Los
Angeles, California are required or permitted to be closed, and (b) with respect to all notices, determinations, fundings and payments in connection with the Eurodollar Rate or Eurodollar Rate Loans, any day that is a Business Day pursuant to
clause (a) above and that is also a day on which trading in Dollars is carried on by and between banks in the London interbank market. 
 “Business Plan” means, for any Fiscal year, the Business Plan delivered pursuant to Section 6.3(e). 
 “Capital Assets” means fixed assets, both tangible (such as land, buildings, fixtures, machinery and
equipment) and intangible (such as patents, copyrights, trademarks, franchises and good will); provided that Capital Assets shall not include any item customarily charged directly to expense or depreciated over a useful life of twelve
(12) months or less in accordance with GAAP. 
 “Capital Expenditures” means amounts paid
or Indebtedness incurred by the Borrowers or any of their Subsidiaries in connection with (i) the purchase or lease by the Borrowers or any of their Subsidiaries of Capital Assets that would be required to be capitalized and shown on the
balance sheet of such Person in accordance with GAAP or (ii) the lease of any assets by the Borrowers or any of their Subsidiaries as lessee under any Synthetic Lease to the extent that such assets would have been Capital Assets had the
Synthetic Lease been treated for accounting purposes as a Capital Lease; provided that Capital Expenditures shall not include the August 4, 2009 acquisition of a Falcon 20005N036 (with improvements) corporate aircraft consummated prior
to the Restatement Date. 
 “Capital Lease” means, for any Person, any lease of property
(whether personal, real or mixed) which, in accordance with GAAP, would, at the time a determination is made, be required to be recorded as a capital lease in respect of which such Person is liable as lessee. 
 “Capital Stock” of any person means any and all shares, interests, participation, or other equivalents
(however designated) of or rights, warrants, or options to purchase, corporate stock or any other equity interest (however designated) of or in such Person. 
 “Cash Collateralize” has the meaning set forth in Section 2.3(i). 
 “Cash Dominion Event” shall occur when either (a) (i) an Event of Default has occurred and is
continuing and (ii) the Revolving Facility Usage at any time during the continuation of such Event of Default is greater than thirty five percent (35%) of the Maximum Commitment Amount or (b) (i) an Event of Default has occurred
and is continuing at any time

  

 6 

 
under any of Sections 8.1, 8.4, 8.5, 8.6, 8.12 or 8.13 (in each case subject to any applicable grace period provided herein), or as a result of a breach
of Section 2.9 or 7.7 (subject to the grace period provided in Section 8.2(b)). For purposes of this Agreement, the first Cash Dominion Event to occur hereunder shall continue for six months from the date on which the
Event(s) of Default which gave rise to such Cash Dominion Event has been cured or waived in accordance with the terms hereof (so long as no other Cash Dominion Event has occurred during such time and Borrowers have provided Agent with replacement
Credit Card Notifications and DDA notifications pursuant to Section 2.9 hereof); the second Cash Dominion Event to occur hereunder shall continue for 12 months from the date on which the Event(s) of Default which gave rise to such second
Cash Dominion Event has been cured or waived in accordance with the terms hereof (so long as no other Cash Dominion Event has occurred during such time and Borrowers have provided Agent with replacement Credit Card Notifications and DDA
notifications pursuant to Section 2.9 hereof), and the third Cash Dominion Event to occur hereunder shall continue until the Revolving Credit Termination Date. The termination of the first or second Cash Dominion Event as provided herein
shall in no way limit, waive or delay the occurrence of a subsequent Cash Dominion Event in the event that the conditions set forth in this definition again arise. 
 “Cash Equivalents” means (a) marketable direct obligations issued or unconditionally guaranteed by the
United States or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within 1 year from the date of acquisition thereof, (b) marketable direct obligations issued by any state of the
United States or any political subdivision of any such state or any public instrumentality thereof maturing within 1 year from the date of acquisition thereof and, at the time of acquisition, having the highest rating obtainable from either S&P
or Moody’s, (c) commercial paper maturing no more than 1 year from the date of acquisition thereof and, at the time of acquisition, having a rating of A-1 or P-1, or better, from S&P or Moody’s, and (d) certificates of
deposit or bankers’ acceptances maturing within 1 year from the date of acquisition thereof either (i) issued by any bank organized under the laws of the United States or any state thereof which bank has a rating of A or A2, or better,
from S&P or Moody’s, or (ii) certificates of deposit less than or equal to $100,000 in the aggregate issued by any other bank insured by the Federal Deposit Insurance Corporation. 
 “Cash Management Accounts” has the meaning set forth in Section 2.9 hereof. 
 “Cash Management Banks” has the meaning set forth in Section 2.9 hereof. 
 “Change of Control” means (a) any “person” or “group” (within the meaning of
Sections 13(d) and 14(d) of the Exchange Act), other than Permitted Holder, becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of an amount equal to the greater of (x) 35% of, or (y) the
percentage held by the Permitted Holder of, the Stock of Parent having the right to vote for the election of members of the Board of Directors, or (b) a majority of the members of the Board of Directors of Parent do not constitute Continuing
Directors, or (c) Permitted Holder ceases to own at least 35% of the Stock of Parent having the right to vote for the election of the members of the Board of Directors, or (d) Parent ceases to directly or indirectly, own and control 100%
of the outstanding capital Stock of each Borrower and its other Subsidiaries extant as of the Restatement Date. 
  

 7 

 “Chattel Paper” means all of any Person’s now owned or
hereafter acquired right, title, and interest with respect to “chattel paper”, including, without limitation, “tangible chattel paper” and “electronic chattel paper”, as such terms are defined from time to time in the
Code, and any and all supporting obligations in respect thereof. 
 “Closing Date” means
January 25, 2005. 
 “Code” means the Uniform Commercial Code, as in effect from time to
time in the State of California. 
 “Collateral,” means each Borrower’s now owned or
hereafter acquired right, title and interest in and to and to all personal property, including, without limitation, each of the following: 
  

	 	(a)	the Accounts, 

  

	 	(b)	Borrowers’ Books, 

  

	 	(c)	Goods (including, without limitation, Inventory and Equipment), 

  

	 	(d)	General Intangibles, 

  

	 	(e)	Chattel Paper, 

  

	 	(f)	DDAs, 

  

	 	(g)	Documents, 

  

	 	(h)	Investment Property 

  

	 	(i)	Instruments, 

  

	 	(j)	Letter of Credit Rights and Payment Intangibles, 

  

	 	(k)	Commercial Tort Claims as set forth on Schedule 5.10(b) hereof, 

  

	 	(l)	Supporting Obligations, 

  

	 	(m)	Negotiable Collateral, 

  

	 	(n)	any money, or other assets of any Borrower that now or hereafter come into the possession, custody, or control of the Lender Group or any Bank Product Provider,

  

	 	(o)	All insurance policies proceeds, refunds, and premium rebates, including, without limitation, proceeds of fire and credit insurance, whether any of such proceeds,
refunds and premium rebates arise out of any of the foregoing (subparagraphs (a) through (n) hereof) or otherwise, 

  

 8 

	 	(p)	All liens, guarantees, rights, remedies and privileges pertaining to any of the foregoing (subparagraphs (a) through (o) hereof), and

  

	 	(q)	the proceeds and products, whether tangible or intangible, of any of the foregoing, including proceeds of insurance covering any or all of the Collateral of any
Borrower, and any and all Accounts, Borrowers’ Books, General Intangibles, Goods (including, without limitation, Equipment and Inventory) , Investment Property, Negotiable Collateral, Real Property, money, deposit accounts, DDAs or other
tangible or intangible property resulting from the sale, exchange, collection, or other disposition of any of the foregoing, or any portion thereof or interest therein, and the proceeds thereof. 

 “Collateral Access Agreement” means a landlord waiver, mortgagee waiver, bailee letter, or acknowledgement
agreement with respect to each of the following locations: chief executive office of Poolmart, any location in a Landlord Lien State and any distribution center of a Borrower or warehouse where Collateral is located, each in form and substance
satisfactory to Agent. 
 “Collections” means all cash, checks, notes, instruments, and other
items of payment (including, insurance proceeds, proceeds of cash sales, rental proceeds, and tax refunds). 
 “Commercial Tort Claim” means any now existing or hereafter arising “commercial tort claim”, as such term is defined from time to time in the Code. 
 “Commitment” means, at any time with respect to a Lender, the principal amount set forth beside such
Lender’s name under the heading “Commitment” on Schedule C-1 or on the signature page of the Assignment and Acceptance pursuant to which such Lender became a Lender hereunder in accordance with the provisions of
Section 15.1, as such Commitment may be adjusted from time to time in accordance with the provisions of Sections 2.1(k), 2.18 and 15.1 and “Commitments” means, collectively, the aggregate amount of the
commitments of all the Lenders. 
 “Compliance Certificate” means a certificate substantially in
the form of Exhibit C-1 and delivered by the chief accounting officer of Borrowers to Agent. 
 “Consent” means actual consent given by a Lender from whom such consent is sought; or the passage of three (3) Business Days from receipt of written notice to a Lender from the Agent of a proposed course of action to
be followed by the Agent without such Lender’s giving the Agent written notice of that Lender’s objection to such course of action, provided that the Agent may rely on such passage of time as consent by a Lender only if such written notice
states that consent will be deemed effective if no objection is received within such time period. 
  

 9 

 “Consolidated Total Debt Service” means with respect to the
Borrowers and their Subsidiaries and for any period, the sum, without duplication, of (a) Consolidated Total Interest Expense for such period plus (b) any and all mandatory or optional repayments of principal of Indebtedness (other than
optional prepayments of revolving loans) during such period pursuant to any agreement or instrument to which any Borrower or any of their respective Subsidiaries is a party relating to (i) the borrowing of money or the obtaining of credit,
including the issuance of notes or bonds, (ii) the deferred purchase price of assets (other than trade payables incurred in the ordinary course of business), (iii) any Synthetic Lease or any Capital Lease, plus (c) Parent Debt Service
Distributions for such period. 
 “Consolidated Total Interest Expense” means for any period,
the aggregate amount of interest that is paid in cash by any Borrower or any of their respective Subsidiaries during such period on all Indebtedness of the Borrowers and their respective Subsidiaries outstanding during all or any part of such
period, whether such interest was or is required to be reflected as an item of expense or capitalized, including payments consisting of interest in respect of any Capital Lease or any Synthetic Lease, and including commitment fees, agency fees,
facility fees, balance deficiency fees and similar fees or expenses in connection with the borrowing of money. 
 “Continuing Director” means (a) any member of the Board of Directors who was a director (or comparable manager) of Parent on the Restatement Date, and (b) any individual who becomes a member of the Board of
Directors after the Restatement Date if such individual was appointed or nominated for election to the Board of Directors by a majority of the Continuing Directors, but excluding any such individual originally proposed for election in opposition to
the Board of Directors in office at the Restatement Date in an actual or threatened election contest relating to the election of the directors (or comparable managers) of Parent (as such terms are used in Rule 14a-11 under the Exchange Act) and
whose initial assumption of office resulted from such contest or the settlement thereof. 
 “Credit Card
Notifications” means those certain credit card receipts agreements, each substantially in the form attached as Exhibit C-2 hereto, and otherwise reasonably satisfactory to Agent and each of which is among Agent, the applicable
Borrower and one of the Borrowers’ Credit Card Processors. 
 “Credit Card Processor” means
any Person that acts as a credit card clearinghouse or processor of credit card payments accepted by any Borrower. 
 “Custom Brokers Agreement” means a tri-party agreement in form satisfactory to the Agent, in its Permitted Discretion, among the Borrowers, Agent and a customs broker or other carrier, in which the customs broker or such
carrier acknowledges that it has control over and holds the Documents evidencing ownership of Inventory of a Borrower for the benefit of the Agent and the Lender Group and agrees, upon notice from the Agent, to hold and dispose of such Inventory
solely as directed by Agent. 
  

 10 

 “Daily Balance” means, with respect to each day during the
term of this Agreement, the amount of an Obligation owed at the end of such day. 
 “DDA” means
any checking or other Deposit Account maintained by a Borrower or any of its Subsidiaries. 
 “Default” means an event, condition, or default that, with the giving of notice, the passage of time, or both, would be an Event of Default. 
 “Default Rate” means the applicable interest as set forth in Section 2.8(c). 
 “Defaulting Lender” means any Lender that (a) has failed to fund any portion of the Advances or
participations in Letters of Credit required to be funded by it hereunder within one Business Day of the date required to be funded by it hereunder, (b) has otherwise failed to pay over to the Agent or any other Lender any other amount required
to be paid by it hereunder within one Business Day of the date when due, (c) has failed, within three (3) Business Days after request by the Agent, to confirm that it will comply with the terms of this Agreement relating to its
Commitments, provided that such Lender shall cease to be a Defaulting Lender under this clause (c) upon the Agent’s receipt of such confirmation, or (d) has been deemed insolvent by any Governmental Authority or become the
subject of an Insolvency Proceeding. 
 “Defaulting Lenders Rate” means the Base Rate for the
first three days from and after the date the relevant payment is due and thereafter at the interest rate then applicable to Advances. 
 “Deposit Account” has the meaning given that term in the Code and also includes all demand, time, savings, passbook, or similar accounts maintained with a bank. 
 “Designated Account” means account number 4801907023 of Borrowers maintained with Borrowers’ Designated
Account Bank, or such other deposit account of Borrowers (located within the United States) which has been designated, in writing and from time to time, by Borrowers to Agent. 
 “Designated Account Bank” means Wells Fargo or its Affiliates. 
 “Deteriorating Lender” means any Defaulting Lender or any Lender as to which (a) the Issuing Bank or
Agent has a good faith belief that such Lender has defaulted in fulfilling its obligations under one or more other syndicated credit facilities, or (b) such Lender or a Person that controls such Lender has been deemed insolvent by any
Governmental Authority or become the subject of a bankruptcy, insolvency or similar proceeding; provided that a Lender shall not be a Deteriorating Lender solely by virtue of the ownership or acquisition of any equity interest in such Lender or the
Person controlling such Lender by a Governmental Authority. 
 “Disbursement Letter” means an
instructional letter executed and delivered by Borrowers to Agent regarding the extensions of credit to be made on the Restatement Date, the form and substance of which shall be satisfactory to Agent in its Permitted Discretion. 
  

 11 

 “Document” means all of any Person’s now owned or
hereafter acquired right, title, and interest with respect to any “document” as such term is defined in the Code, and any and all supporting obligations in respect thereof. 
 “Documentary Letters of Credit” has the meaning set forth in Section 2.2. 
 “Dollars or $” means United States dollars. 
 “Early Termination Fee” has the meaning set forth in Section 3.5. 
 “EBITDA” means, for any Person at any time, the consolidated net earnings (or loss) of such Person and its
Subsidiaries for the period of 12 consecutive calendar months most recently ended, minus extraordinary gains for such period, plus all interest expense (including without limitation amortization of capitalized financing costs), income
tax expense, extraordinary or nonrecurring losses (but not including any write-down of Inventory or cash store closing costs), non-cash charges (including without limitation non-cash compensation, write-off of fixed assets, and accrued but unpaid
Management Fees), employee termination charges incurred prior to the Closing Date, and depreciation and amortization for such period, determined in accordance with GAAP. 
 “Eligible Transferee” means those entities (and any Affiliate thereof) set forth on Exhibit E-1 hereto as
the same may be amended from time to time by Agent, with the consent of Borrowers, which consent shall not be unreasonably withheld; provided, however, that notwithstanding the foregoing, no entity shall be an Eligible Transferee if it is a
Non-Consenting Lender or a Deteriorating Lender. 
 “Environmental Actions” means any complaint,
summons, citation, notice, directive, order, claim, litigation, investigation, judicial or administrative proceeding or judgment from any Governmental Authority, or any third party involving violations of Environmental Laws or releases of Hazardous
Materials from any assets, properties, or businesses of any Borrower or any predecessor in interest. 
 “Environmental Law” means any applicable federal, state, provincial, foreign or local statute, law, rule, regulation, ordinance, code, binding and enforceable guideline, binding and enforceable written policy or rule of
common law now or hereafter in effect and in each case as amended, or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment, to the extent binding on the Borrower, relating
to the environment, employee health and safety, or Hazardous Materials, including CERCLA; RCRA; the Federal Water Pollution Control Act, 33 USC § 1251 et seq. the Toxic Substances Control Act, 15 USC, § 2601 et
seq. the Clean Air Act, 42 USC § 7401 et seq.; the Safe Drinking Water Act, 42 USC. § 3803 et seq.; the Oil Pollution Act of 1990, 33 USC. § 2701 et seq.; the Emergency Planning and the
Community Right-to-Know Act of 1986, 42 USC. § 11001 et seq.; the Hazardous Material Transportation Act, 49 USC § 1801 et seq.; and the Occupational Safety and Health Act, 29 USC. § 651 et
seq. (to the extent it regulates occupational exposure to Hazardous Materials); any state and local or foreign counterparts or equivalents, in each case as amended from time to time. 
  

 12 

 “Environmental Liabilities and Costs” means all
liabilities, monetary obligations, Remedial Actions, losses, damages, punitive damages, consequential damages, treble damages, costs and expenses (including all reasonable fees, disbursements and expenses of counsel, experts, or consultants, and
costs of investigation and feasibility studies), fines, penalties, sanctions, and interest incurred as a result of any claim or demand by any Governmental Authority or any third party, and which relate to any Environmental Action. 
 “Environmental Lien” means any Lien in favor of any Governmental Authority for Environmental Liabilities and
Costs. 
 “Equipment” means all of any Person’s present and hereafter acquired machinery,
machine tools, motors, equipment, furniture, furnishings, fixtures, vehicles (including motor vehicles and trailers), tools, parts, goods (other than consumer goods, farm products, or Inventory), wherever located, including, (a) any interest of
such Borrower in any of the foregoing, and (b) all attachments, accessories, accessions, replacements, substitutions, additions, and improvements to any of the foregoing. 
 “ERISA” means the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1000 et seq.,
amendments thereto, successor statutes, and regulations or guidance promulgated thereunder. 
 “ERISA
Affiliate” means (a) any corporation subject to ERISA whose employees are treated as employed by the same employer as the employees of a Borrower under IRC Section 414(b), (b) any trade or business subject to ERISA whose
employees are treated as employed by the same employer as the employees of a Borrower under IRC Section 414(c), (c) solely for purposes of Section 302 of ERISA and Section 412 of the IRC, any organization subject to ERISA that is
a member of an affiliated service group of which Borrower is a member under IRC Section 414(m), or (d) solely for purposes of Section 302 of ERISA and Section 412 of the IRC, any party subject to ERISA that is a party to an
arrangement with Borrower and whose employees are aggregated with the employees of Borrower under IRC Section 414(o). 
 “ERISA Event” means (a) a Reportable Event with respect to any Benefit Plan or Multiemployer Plan, (b) the withdrawal of a Borrower, any of its Subsidiaries or ERISA Affiliates
from a Benefit Plan during a plan year in which it was a “substantial employer” (as defined in Section 4001(a)(2) of ERISA), (c) the providing of notice of intent to terminate a Benefit Plan in a distress termination (as
described in Section 4041(e) of ERISA), (d) the institution by the PBGC of proceedings to terminate a Benefit Plan or Multiemployer Plan, (e) any event or condition (i) that provides a basis under Section 4042(a)(1), (2), or
(3) of ERISA for the termination of, or the appointment of a trustee to administer, any Benefit Plan or Multiemployer Plan, or (ii) that may result in termination of a Multiemployer Plan pursuant to Section 4041A of ERISA,
(f) the partial or complete withdrawal within the meaning of Sections 4203 and 4205 of ER1SA, of a Borrower, any of its Subsidiaries or ER1SA Affiliates from a Multiemployer Plan, or (g) providing any security to any Plan under
Section 401(a)(29) of the IRC by Borrower or its Subsidiaries or any of their ER1SA Affiliates. 
 “Event of Default” has the meaning set forth in Section 8. 
  

 13 

 “Eurodollar Rate” means, with respect to each Interest
Period for a Eurodollar Rate Loan, the interest rate per annum (rounded upwards, if necessary, to the next 1/100th of one percent) at which United States dollar deposits are offered to WFRF (or its Affiliates) by major banks in the London interbank
market (or other Eurodollar market selected by Agent) on or about 11:00 a.m. (California time) two Business Days prior to the commencement of such Interest Period in amounts comparable to the amount of the Eurodollar Rate Loans requested by and
available to Borrowers in accordance with this Agreement and for the applicable Interest Period. 
 “Eurodollar Rate Loan” means any Advance made or outstanding hereunder during any period when interest on such Advance is payable based on the Adjusted Eurodollar Rate. 
 “Existing Letters of Credit” means each letter of credit issued by an Issuing Bank under the Existing Loan
Agreement and outstanding on the Restatement Date. 
 “Existing Loan Agreement” means the
Amended and Restated Loan and Security Agreement, dated as of January 25, 2005, among the Borrowers, the lenders from time to time parties thereto, and Wells Fargo Retail Finance, LLC, as Agent, as amended prior to the Restatement Date.

 “Factored Receivables” means any accounts of any Borrower which have been factored, sold,
transferred, conditionally sold or assigned by an Account Debtor of such Borrower to a Bank Product Provider pursuant to a factoring arrangement or otherwise. 
 “Federal Funds Effective Rate” means for any day, the weighted average of the rates on overnight federal
funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for the day for such transactions received by the Agent from three federal funds brokers of recognized standing selected by it. 
 “FEIN” means Federal Employer Identification Number. 
 “Fiscal” means, when followed by “month” or “quarter” or “year”, the relevant
fiscal period based on the Borrowers’ fiscal year and accounting conventions (e.g. a reference to “July Fiscal 2009” is to the fiscal month of July of the Borrowers’ 2009 fiscal year) and when followed by reference to a specific
year, the fiscal year which encompasses the majority of months in such fiscal year (e.g. if the Borrowers’ 2009 fiscal year ends in February 2010 reference to that year would be to the Borrowers’ “Fiscal 2009”). 
 “Fixed Charge Coverage Ratio” means, as of any date of determination, the ratio of (a) an amount equal
to the result of (i) EBITDA, less (ii) Capital Expenditures made during the twelve (12) consecutive calendar months most recently ended less (iii) Parent Tax Distributions during the twelve (12) consecutive
calendar months most recently ended, to (b) Consolidated Total Debt Service for the twelve (12) consecutive calendar months most recently ended. 
  

 14 

 “Freight Forwarders Agreement” means a tri-party agreement
in form satisfactory to the Agent, in its Permitted Discretion, among the Agent, Borrowers and a freight forwarder, in which the freight forwarder acknowledges that it has control over and holds the Documents evidencing ownership of the Inventory of
a Borrower for the benefit of Agent and the Lender Group and agrees, upon notice by the Agent, to hold and dispose of the subject Inventory solely as directed by Agent. 
 “Funded Debt” means (a) Indebtedness of the Borrowers and their Subsidiaries relating to (i) the
borrowing of money or the obtaining of credit, including the issuance of notes or bonds, (ii) the deferred purchase price of assets (other than trade payables incurred in the ordinary course of business), (iii) in respect of any Synthetic
Leases or any Capitalized Leases, and (iv) the maximum drawing amount of all letters of credit outstanding and (b) Indebtedness of the type referred to in clause (a) of another Person guaranteed by the Borrowers or any of their
Subsidiaries. 
 “Funding Date” means the date on which a Borrowing occurs. 
 “GAAP” means generally accepted accounting principles as in effect from time to time in the United States,
consistently applied. 
 “General Intangibles” means all of any Person’s present and future
general intangibles and other personal property (including contract rights, rights arising under common law, statutes, or regulations, choses or things in action, goodwill, patents, trade names, trademarks, service marks, copyrights, blueprints,
drawings, purchase orders, customer lists, monies due or recoverable from pension funds, route lists, rights to payment and other rights under any royalty or licensing agreements, infringement claims, computer programs, information contained on
computer disks or tapes, literature, reports, catalogs, deposit accounts, insurance premium rebates, tax refunds, and tax refund claims), other than goods, Accounts, and Negotiable Collateral. 
 “Goods” means all of any Person’s now owned or hereafter acquired right, title, and interest with
respect to “goods”, as that term is defined from time to time in the Code, including, without limitation, any and all Inventory and Equipment. 
 “Governing Documents” means the certificate or articles of incorporation, by-laws, or other organizational or governing documents of any Person. 
 “Governmental Authority” means any nation or government, any state or other political subdivision thereof
and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government. 
 “Hazardous Materials” means (a) substances that are defined or listed in, or otherwise classified pursuant to, any applicable laws or regulations as “hazardous substances,”
“hazardous materials,” “hazardous wastes,” “toxic substances,” or any other formulation intended to define, list, or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, reproductive toxicity, or “EP toxicity”, (b) oil, petroleum, or petroleum derived substances, natural gas, natural gas liquids, synthetic gas, drilling fluids, produced waters, and other wastes associated with the
exploration, development,

  

 15 

 
or production of crude oil, natural gas, or geothermal resources, (c) any flammable substances or explosives or any radioactive materials, and (d) asbestos in any form or electrical
equipment that contains any oil or dielectric fluid containing levels of polychlorinated biphenyls in excess of 50 parts per million. 
 “Hedge Agreement” means any and all transactions, agreements, or documents now existing or hereafter entered into between any Borrower and a Bank Product Provider, which provide for an
interest rate, credit, commodity or equity swap, cap, floor, collar, forward foreign exchange transaction, currency swap, cross currency rate swap, currency option, or any combination of, or option with respect to, these or similar transactions, for
the purpose of hedging Borrowers’ exposure to fluctuations in interest or exchange rates, loan, credit exchange, security or currency valuations or commodity prices. 
 “Increase Effective Date” has the meaning given such term in Section 2.18(d). 
 “Increased Commitment Amount” has the meaning given such term in Section 2.18(c). 
 “Increased Commitment Fee” means any fee payable to any Increased Commitment Lender as consideration for
such Increased Commitment Lender to become an Increased Commitment Lender hereunder. 
 “Indebtedness” means: (a) all obligations of a Person for borrowed money, (b) all obligations of a Person evidenced by bonds, debentures, notes, or other similar instruments and all reimbursement or other
obligations of a Person in respect of letters of credit, bankers acceptances, interest rate swaps, or other similar financial products, (c) all obligations of a Person under capital leases, (d) all obligations or liabilities of others
secured by a Lien on any property or asset of a Person, irrespective of whether such obligation or liability is assumed, to the extent, if such obligation or liability is non-recourse, of the lesser of (x) the value of such asset and
(y) the amount of the obligation or liability so secured, and (e) any obligation of a Person guaranteeing or intended to guarantee (whether guaranteed, endorsed, co-made, discounted, or sold with recourse to such Person) any indebtedness,
lease, dividend, letter of credit, or other obligation of any other Person. 
 “Indemnified
Liabilities” has the meaning set forth in Section 11.3. 
 “Indemnified
Person” has the meaning set forth in Section 11.3. 
 “Indenture” means
that certain Indenture, dated as of January 25, 2005 for Poolmart’s Senior Notes, between The Bank of New York, as trustee, and Poolmart, as issuer, as amended from time to time in accordance with the terms hereof. 
 “Insolvency Proceeding” means any proceeding commenced by or against any Person under any provision of the
Bankruptcy Code or under any other bankruptcy or insolvency law, assignments for the benefit of creditors, formal or informal moratoria, compositions, extensions generally with creditors, or proceedings seeking reorganization, arrangement, or other
similar relief. 
  

 16 

 “Instruments” means all of any Person’s now owned or
hereafter acquired right, title, and interest with respect to “instruments”, including, without limitation, any “promissory notes”, as such terms are defined from time to time in the Code, and any and all supporting obligations
in respect thereof. 
 “Intangible Assets” means, with respect to any Person, that portion of
the book value of all of such Person’s assets that would be treated as intangibles under GAAP. 
 “Intellectual Property Security Agreement” means that certain Intellectual Property Security Agreement, dated as of the Restatement Date, between Borrowers and the Agent, which agreement amends and restates in its entirety
that certain Grant of Security Interest in Trademarks and Licenses, dated as of June 22, 2000, between Borrowers and the Agent. 
 “Interest Period” means, for any Eurodollar Rate Loan, the period commencing on the Business Day such Eurodollar Rate Loan is disbursed or continued, or on the Business Day on which a
Base Rate Loan is converted to such Eurodollar Rate Loan, and ending on the date that is one, two, or three months thereafter, as selected by Borrowers and notified to Agent as provided in Sections 2.14(a) and 2.14(b). 
 “Inventory” means all present and future inventory in which a Person has any interest, including goods held
for sale or lease or to be furnished under a contract of service and all of such Person’s present and future raw materials, work in process, finished goods, and packing and shipping materials, wherever located. 
 “Investment” means, with respect to any Person, any investment by such Person in any other Person (including
Affiliates) in the form of loans, guarantees, advances, transfers of property to, or capital contributions (excluding (a) commission, travel, and similar advances to officers and employees of such Person made in the ordinary course of business,
and (b) bona fide Accounts arising in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness or Stock or other securities. In determining the aggregate amount of Investments outstanding at any
particular time: (a) the amount of any Investment represented by a guaranty shall be taken at not less than the principal amount of the obligations guaranteed and still outstanding; (b) there shall be deducted in respect of each such
Investment any amount received as a return of capital; (c) there shall not be deducted in respect of any Investment any amounts received as earnings on such Investment, whether as dividends, interest or otherwise; and (d) there shall not
be deducted from the aggregate amount of Investments any decrease in the value thereof. 
 “Investment
Property” means all of a Person’s presently existing and hereafter acquired or arising investment property (as that term is defined in Section 9-115 of the Code). 
 “IRC” means the Internal Revenue Code of 1986, as amended, and the regulations thereunder. 
 “IRS” means the Internal Revenue Service. 
  

 17 

 “Issuing Bank” means, individually and collectively, Wells
Fargo or any other institution that, with the consent of Agent, in Agent’s sole discretion, agrees to become an Issuing Bank for the purpose of issuing L/Cs or L/C Undertakings pursuant to Section 2.2 hereof. 
 “Issuer Documents” means with respect to any Letter of Credit, the Letter Credit Application, and any other
document, agreement and instrument entered into by, among or between the Issuing Bank, Agent and a Borrower or in favor of the Agent or Issuing Bank and relating to any such Letter of Credit. 
 “Landlord Lien State” means initially Washington, Virginia, and Pennsylvania and such other states in which
a landlord’s claim for rent has priority over the Liens of the Agent in the Collateral as determined by Agent, in its sole discretion. 
 “L/C” has the meaning set forth in Section 2.3(a). 
 “L/C Advance” has the meaning set forth in Section 2.3(c)(iii). 
 “L/C Borrowing” has the meaning set forth in Section 2.3(c)(iii). 
 “L/C Commitment” means the commitment of the Issuing Bank to issue L/Cs from time to time in an aggregate face amount not to exceed the L/C Sublimit at any time. 
 “L/C Fee” means, as of any date of determination, the “L/C Fee” specified in the grid in the
definition of Applicable Margin as adjusted from time to time as provided in such definition. 
 “L/C
Sublimit” means $7,000,000. 
 “L/C Undertaking” has the meaning set forth in
Section 2.3(a). 
 “L/C Usage” means, as of any date of determination, the aggregate
undrawn amount of all outstanding Letters of Credit plus 100% of the amount of outstanding time drafts accepted by an Underlying Issuer as a result of drawings under Underlying Letters of Credit. 
 “Leasehold Interests” means any Borrower’s leasehold estate or interest in each of the properties at or
upon which any Borrower conducts business or maintains any of the Collateral, together with the Borrower’s interest in any of the improvements and fixtures located upon or appurtenant thereto, including without limitation, any rights of a
Borrower to payments, proceeds of value of any kind or nature realized upon the sale or transfer of such estate or interest. 
 “Lender” and “Lenders” have the respective meanings set forth in the preamble to this Agreement, and shall include any other Person made a party to this Agreement as a
Lender in accordance with the provisions of Section 15.1. 
 “Lender Group” means,
individually and collectively, each of the individual Lenders, Issuing Bank and Agent. 
  

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 “Lender Group Expenses” means all (a) costs or
expenses (including taxes, and insurance premiums) required to be paid by a Borrower under any of the Loan Documents that are paid or incurred by the Lender Group, (b) reasonable and documented fees or charges actually paid or incurred by Agent
in connection with the Lender Group’s transactions with Borrowers, including, fees or charges for photocopying, notarization, couriers and messengers, telecommunication, public record searches (including tax lien, litigation, and UCC searches
and including searches with the patent and trademark office, the copyright office, or the department of motor vehicles), filing, recording, publication, real estate surveys, real estate title policies and endorsements, and environmental audits,
(c) reasonable and documented costs and expenses incurred by Agent in the disbursement of funds to or for the account of Borrowers (by wire transfer or otherwise), (d) charges paid or incurred by Agent or any Affiliate thereof resulting
from the dishonor of checks, (e) reasonable and documented costs and expenses paid or incurred by the Agent to correct any default or enforce any provision of the Loan Documents, or in gaining possession of, maintaining, handling, preserving,
storing, shipping, selling, preparing for sale, or advertising to sell the Collateral, or any portion thereof, irrespective of whether a sale is consummated, (f) reasonable and documented audit fees and expenses of Agent related to audit
examinations of the Borrowers’ Books to the extent of the fees and charges (and up to the amount of any limitation) contained in this Agreement, (g) reasonable and documented costs and expenses of third party claims or any other suit paid
or incurred by the Lender Group in enforcing or defending the Loan Documents or in connection with the transactions contemplated by the Loan Documents or the Lender Group’s relationship with any Borrower or any guarantor of the Obligations,
(h) Agent’s reasonable and documented fees and expenses (including attorneys’ fees) incurred in advising, structuring, drafting, reviewing, syndicating, administering, amending or modifying the Loan Documents and any related document
or instrument, and (i) Agent’s reasonable fees and expenses (including attorneys’ fees, consulting, accounting, investment banking and similar professional fees and charges) incurred in terminating, enforcing (including
attorneys’ fees and expenses incurred in connection with a “workout”, a “restructuring”, or an Insolvency Proceeding concerning any Borrower or in exercising any rights or remedies under the Loan Documents), or defending the
Loan Documents, irrespective of whether suit is brought, or in taking any remedial action concerning the Collateral. 
 “Letter of Credit” means an L/C or an L/C Undertaking, as the context requires. 
 “Letter of Credit Application” has the meaning set forth in Section 2.3(b)(i). 
 “Letter of Credit Expiration Date” has the meaning set forth in Section 2.3(a). 
 “Letter of Credit Rights” means all of any Borrower’s now owned or hereafter acquired right, title, and interest with respect to “letter of credit rights”, as that term is defined from time to time in the
Code, and any and all supporting obligations in respect thereof. 
 “Leverage Ratio” means as at
any date of determination, the ratio of (a) Total Debt outstanding on such date to (b) EBITDA. 
  

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 “LGP” means Leonard Green & Partners, L.P.

 “Lien” means any interest in property securing an obligation owed to, or a claim by, any
Person other than the owner of the property, whether such interest shall be based on the common law, statute, or contract, whether such interest shall be recorded or perfected, and whether such interest shall be contingent upon the occurrence of
some future event or events or the existence of some future circumstance or circumstances, including the lien or security interest arising from a mortgage, deed of trust, encumbrance, pledge, hypothecation, assignment, deposit arrangement, security
agreement, adverse claim or charge, conditional sale or trust receipt, or from a lease, consignment, or bailment for security purposes or from a sale of accounts receivable or chattel paper, or the interest of a lessor under a Capital Lease or other
arrangement pursuant to which any Person is entitled to any preference or priority with respect to the property or assets of another Person and also including reservations, exceptions, encroachments, easements, rights-of-way, covenants, conditions,
restrictions, leases, and other title exceptions and encumbrances affecting Real Property each of the foregoing whether consensual or non-consensual and whether arising by way of agreement, operation of law, legal process or otherwise. 

“Liquidation” means the exercise, by the Agent, of those rights and remedies accorded to the Agent under
the Loan Documents and applicable law as a creditor of the Borrowers following and on account of the occurrence and continuation of an Event of Default in respect of the realization on Collateral. Derivations of the word “Liquidation”
(such as “Liquidate”) are used with like meaning in this Agreement. “Liquidation” shall include the conduct of sale or disposition of all or substantially all the Borrowers’ assets by the Borrowers, including without
limitation, the conduct of “going out of business” or similar sales with the consent of the Agent. 
 “Loan Account” has the meaning set forth in Section 2.12. 
 “Loan
Documents” means this Agreement, the Disbursement Letter, the Letters of Credit, the Restricted Account Agreements, the Securities Account Control Agreements, the Intellectual Property Security Agreement, the Revolving Credit Note, the
Agent’s Fee Letter, any certificates (including without limitation, any Perfection Certificate, Solvency Certificate, and each Compliance Certificate) from time to time delivered in connection with this Agreement or any other Loan Document and
any other agreement entered into, now or in the future, in connection with this Agreement or any other Loan Document. 
 “LPM” means LPM Manufacturing, Inc., a California corporation. 
 “Management
Agreement” means that certain Management Agreement, dated January 25, 2005, between Poolmart and LGP, in the substantially the form delivered by Poolmart to Agent prior to the Restatement Date. 
 “Material Adverse Change” means (a) a material adverse change in the business, prospects, operations,
results of operations, assets, liabilities or condition (financial or otherwise) of Poolmart on a consolidated basis, (b) the material impairment of the Borrowers’ ability to perform their obligations under the Loan Documents or of the
Lender Group to enforce

  

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the Secured Obligations or realize upon the Collateral, (c) a material adverse effect on the value of the Collateral or the amount that the Lender Group would be likely to receive (after
giving consideration to delays in payment and costs of enforcement) in the Liquidation of such Collateral, or (d) a material impairment of the priority of the Lender Group’s Liens with respect to the Collateral. 
 “Maturity Date” has the meaning set forth in Section 3.3. 
 “Maximum Commitment Amount” means $50,000,000 (subject to increase pursuant to Section 2.18
hereof) less any reductions in the Maximum Commitment Amount made pursuant to Section 3.5. 
 “Multiemployer Plan” means a “multiemployer plan” (as defined in Section 4001(a)(3) of ERISA) to which a Borrower, any of its Subsidiaries, or any ERISA Affiliate has contributed, or was obligated to
contribute, within the past six years. 
 “Negotiable Collateral” means all of a Person’s
present and future letters of credit, notes, drafts, Instruments, Goods covered by Documents, Investment Property, securities (including the shares of stock of Subsidiaries of such Person), Documents, Leasehold Interests, Chattel Paper and all
supporting obligations of the foregoing. 
 “Net Book Value” means, at any time, the gross
amount of any Borrower’s Inventory that is located in the United States, conforms to the representations and warranties contained in Section 5.3 hereof, less reserves required by GAAP, and is reflected on the most recent
consolidated balance sheet of Poolmart delivered pursuant to Section 6.3 hereof. 
 “Nominee” means a business entity (such as a corporation or limited partnership) formed by the Agent or any Lender to own or manage any Post Foreclosure Asset. 
 “Non-consenting Lender” has the meaning given such term in Section 19.10. 
 “Obligations” means all Advances, including the principal thereof and interest thereon (including any
interest that, but for the provisions of the Bankruptcy Code, would have accrued), contingent reimbursement obligations under any outstanding Letters of Credit, premiums (including Early Termination Fees), and all other obligations of the Borrowers
arising under any of the Loan Documents, including without limitation fees and Lender Group Expenses that the Borrowers are required to perform, observe, pay or reimburse under any of the Loan Documents (including any fees or expenses that, but for
the provisions of the Bankruptcy Code, would have accrued or been so payable), whether absolute or contingent, due or to become due, or now existing or hereafter arising. 
 “Officer’s Closing Certificate” means that certain closing certificate, dated as of the date hereof,
executed and delivered by the chief financial officer of each Borrower to the Agent. 
 “Originating
Lender” has the meaning set forth in Section 15.1(e). 
  

 21 

 “Parent” means Leslie’s Holdings, Inc., a Delaware
corporation. 
 “Parent Debt Service Distributions” has the meaning set forth in
Section 7.11(a) hereof. 
 “Parent Debentures” means the Parent’s
$128,072,179.62 aggregate amount of Series A Junior Subordinated Debentures dated June 1, 2009. 
 “Parent Note Purchase Documents” means the Note Purchase Agreement, dated as of February 20, 2007, by and among the Parent and GSMP 2006 Onshore US, Ltd., GSMP 2006 Offshore US, Ltd., GSMP 2006 Institutional US, Ltd.,
GSO Domestic Capital Funding LLC, GSO Origination Funding Partners LP and GSO Special Situations Fund LP and all documents, instruments, agreements and certificates delivered in connection therewith, as the same may be amended, supplemented or
otherwise modified (and including the documents and instruments governing or evidencing any Indebtedness incurred to refinance, in whole or in part, the Indebtedness outstanding thereunder). 
 “Parent Tax Distributions” has the meaning set forth in Section 7.11(d). 
 “Participant” has the meaning set forth in Section 15.1(e). 
 “Payment Intangible” as defined in the Code and also includes any general intangible under which the Account
Debtor’s primary obligation is a monetary obligation. 
 “Payoff Letters” means (i) a
letter, in form and substance satisfactory to Agent in its Permitted Discretion, from PNC Bank, National Association to Agent respecting the amount necessary to repay in full all of the obligations of any Borrower and any other guarantors thereof
owing to PNC Bank, National Association under the Existing Credit Agreement and (ii) a letter, in form and substance satisfactory to Agent in its Permitted Discretion, from Bank of America to Agent respecting the amount necessary to repay in
full all of the obligations of any Borrower and any other guarantors thereof owing to Bank of America under the Existing Credit Agreement. 
 “PBGC” means the Pension Benefit Guaranty Corporation as defined in Title N of ERISA, or any successor thereto. 
 “Perfection Certificate” means the perfection certificate submitted by Borrowers to Agent in connection with
the execution and delivery of this Agreement, together with Borrowers’ completed responses to the inquiries set forth therein, the form and substance of such responses to be satisfactory to Agent in its Permitted Discretion. 
 “Permitted Discretion” means a determination made in good faith and in the exercise of reasonable (from the
perspective of a secured lender) business judgment. 
 “Permitted Holder” means LGP and any
Affiliate thereof. 
  

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 “Permitted Investments” means (a) investments in Cash
Equivalents, (b) investments in negotiable instruments for collection, and (c) advances made in connection with purchases of goods or services in the ordinary course of business. 
 “Permitted Liens” means (a) Liens held by the Lender Group securing the Secured Obligations,
(b) Liens for unpaid taxes that either (i) are not yet due and payable or (ii) are the subject of Permitted Protests, (c) Liens set forth on Schedule P-1, (d) the interests of lessors under operating leases and
purchase money security interests and Liens of lessors under capital leases to the extent that the acquisition or lease of the underlying asset is permitted under Section 7.20(c) and so long as the Lien only attaches to the asset
purchased or acquired and only secures the purchase price of the asset, (e) Liens arising by operation of law in favor of warehousemen, landlords, carriers, mechanics, materialmen, laborers, or suppliers, incurred in the ordinary course of
business of Borrower and not in connection with the borrowing of money, and which Liens either (i) are for sums not yet due and payable, or (ii) are the subject of Permitted Protests, (f) Liens arising from deposits made in connection
with obtaining worker’s compensation or other unemployment insurance, (g) Liens or deposits to secure performance of bids, tenders, or leases (to the extent permitted under this Agreement), incurred in the ordinary course of business of a
Borrower and not in connection with the borrowing of money, (h) Liens arising by reason of security for surety or appeal bonds in the ordinary course of business of a Borrower, (i) Liens of or resulting from any judgment or award that
would not cause a Material Adverse Change and as to which the time for the appeal or petition for rehearing of which has not yet expired, or in respect of which a Borrower is in good faith prosecuting an appeal or proceeding for a review, and in
respect of which a stay of execution pending such appeal or proceeding for review has been secured, and (j) easements, rights of way, zoning and similar covenants and restrictions, and similar encumbrances that do not materially interfere with
or impair the use or operation of the Collateral by any Borrower, or materially interfere with the ordinary conduct of the business of a Borrower. 
 “Permitted Parent Debt” has the meaning given such term in Section 7.1(d). 
 “Permitted Protest” means the right of a Borrower to protest any Lien (other than any such Lien that secures the Secured Obligations) (other than payroll taxes or taxes that are subject
of a United States federal tax lien) or rental payment, provided that (a) Borrowers establish any reserve required in respect of such obligation in accordance with GAAP, (b) any such protest is instituted and diligently prosecuted by such
Borrower in good faith, and (c) Agent is satisfied that, while any such protest is pending, there will be no impairment of the enforceability, validity, or priority of any of the Liens of the Lender Group in and to the Collateral or, if Agent
is not so satisfied, Agent shall have established such reserve against Availability as it deems appropriate in its Permitted Discretion. 
 “Person” means and includes natural persons, corporations, limited liability companies, limited partnerships, general partnerships, limited liability partnerships, joint ventures, trusts,
land trusts, business trusts, or other organizations, irrespective of whether they are legal entities, and governments and agencies and political subdivisions thereof. 
  

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 “Plan” means any employee benefit plan, program, or
arrangement maintained or contributed to by a Borrower or with respect to which it may incur liability. 
 “Poolmart” has the meaning set forth in the preamble to this Agreement. 
 “Post Foreclosure Asset” means any asset of the Borrowers for which the Agent “credit bids” in the course of the exercise of its rights and remedies pursuant to any Loan Document. 
 “Projections” means Borrowers’ forecasted (a) balance sheets, (b) profit and loss statements,
and (c) cash flow statements, all prepared on a basis consistent with Borrowers’ historical financial statements, together with appropriate supporting details and a statement of underlying assumptions. 
 “Pro-Rata Share” means, with respect to a Lender, a fraction (expressed as a percentage), the numerator of
which is the amount of such Lender’s Commitment and the denominator of which is the aggregate amount of the Commitments. 
 “Real Property” means any estates or interests in real property now owned or hereafter acquired by a Borrower. 
 “Record” means information that is inscribed on a tangible medium or which is stored in an electronic or
other medium and is retrievable in perceivable form. 
 “Reference Rate” means the rate of
interest announced within Wells Fargo at its principal office in San Francisco as its “prime rate,” with the understanding that the “prime rate” is one of Wells Fargo’s base rates (not necessarily the lowest of such rates)
and serves as the basis upon which effective rates of interest are calculated for those loans making reference thereto and is evidenced by the recording thereof after its announcement in such internal publication or publications as WFRF may
designate. 
 “Remedial Action” means all actions taken to (a) clean up, remove, remediate,
contain, treat, monitor, assess, evaluate, or in any way address Hazardous Materials in the indoor or outdoor environment, (b) prevent or minimize a release or threatened release of Hazardous Materials so they do not migrate or endanger or
threaten to endanger public health or welfare or the indoor or outdoor environment, (c) perform any pre-remedial studies, investigations, or post-remedial operation and maintenance activities, or (d) conduct any other actions authorized by
42 USC § 9601. 
 “Reportable Event” means any of the events described in
Section 4043(c) of ERISA or the regulations thereunder other than a Reportable Event as to which the provision of 30 days notice to the PBGC is waived under applicable regulations. 
 “Requested Increased Commitment Amount” has the meaning given such term in Section 2.18(a).

 “Required Lenders” means, at any time, Agent, together with such other Lenders (other than
Delinquent Lenders) whose Pro Rata Shares together with Agent, aggregate

  

 24 

 
50.1% or more of the Commitments (without, for purposes of this definition, giving effect to the Pro Rata Shares of the Commitment of any Delinquent Lender); provided that, at any time there are
two or more Lenders (other than Delinquent Lenders), “Required Lenders” shall be comprised of at least two Lenders (other than Delinquent Lenders). 
 “Requirement of Law” means, as to any Person: (a) (i) all statutes and regulations and
(ii) court orders and injunctions, arbitrators’ decisions, and/or similar rulings, in each instance by any Governmental Authority or arbitrator applicable to or binding upon such Person or any of such Person’s property or to which
such Person or any of such Person’s property is subject; and (b) that Person’s organizational documents, by-laws and/or other instruments which deal with corporate or similar governance, as applicable. 
 “Reserve Percentages” for any Interest Period means, as of the date of determination thereof, the maximum
percentage (rounded upward, if necessary to the nearest 1/100th of 1%), that is in effect on such date as prescribed by the Board of Governors of the Federal Reserve System for determining the reserve requirements (including supplemental, marginal,
and emergency reserve requirements) with respect to “Eurocurrency liabilities” (as defined in Federal Reserve Board Regulation D). 
 “Restatement Date” means the date on which all of the conditions precedent set forth at Section 3.1 are satisfied as determined by Agent in its Permitted Discretion.

 “Restricted Account” shall mean any depository account, DDA, or Investment Property account
designated by Agent as a “Restricted Account” and subject to a Restricted Account Agreement. 
 “Restricted Account Agreements” means an agreement, in form and substance satisfactory to Agent, in its Permitted Discretion, executed and delivered by the applicable Borrower, Agent, and the applicable Restricted Account
Bank, which agreement is sufficient to give Agent “control” over the subject Restricted Account as provided in the Code. 
 “Restricted Account Bank” means Wells Fargo or such other bank(s) as may be agreed to by Agent and Borrowers from time to time. 
 “Restricted Payments Cap” means an aggregate amount of payments which Borrowers are permitted pursuant to
Sections 7.8(a), 7.11(b), 7.11(c), and 7.13(d) not to exceed $50,000,000 in any Fiscal year; unless, after the Restatement Date, Parent pays “in kind” any accrued interest on any Indebtedness of Parent, in which case
the annual “Restricted Payments Cap” shall increase after the first anniversary of the Restatement Date by the annual amount of interest accruing on such interest that was paid “in kind”; provided, however,
that such cap shall not exceed $55,000,000 during the 365 day period from the first anniversary of the Restatement Date to the second anniversary, and shall not exceed, after the second anniversary of the Restatement Date, $60,000,000.

 “Retiree Health Plan” means an “employee welfare benefit plan” within the meaning
of Section 3(1) of ERISA that provides benefits to individuals after termination of their employment, other than as required by Section 601 of ERISA. 
  

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 “Revolving Credit Note” as defined in
Section 2.1(a) hereof. 
 “Revolving Facility Usage” means, as of any date of
determination, the aggregate amount of Advances and undrawn Letters of Credit, and unpaid reimbursement obligations in respect of drawings under Letter of Credit, then outstanding. 
 “Revolving Credit Termination Date” shall mean the earliest to occur: (a) the Maturity Date;
(b) termination of this Agreement pursuant to Section 3.5; or (c) termination of this Agreement by the Lenders upon the occurrence and during the continuation of an Event of Default (which termination shall be automatic upon
the occurrence of an Event of Default under Sections 8.4 or 8.5). 
 “Secured
Obligations” means collectively and individually all Obligations and all Bank Product Obligations of either or both Borrowers. 
 “Securities Account Control Agreement” means each Securities Account Control Agreement, in form and substance satisfactory to Agent, in its Permitted Discretion, executed and delivered by
the applicable Borrower, Agent, and a securities intermediary, which agreement is sufficient to give Agent “control” over the subject Securities Account or Investment Property as provided in the Code. 
 “Senior Notes” means Poolmart’s 7.75% Senior Notes due February 1, 2013. 
 “Settlement” has the meaning set forth in Section 2.1(j)(i). 
 “Settlement Date” has the meaning set forth in Section 2.1(j)(i). 
 “Solvency Certificate” means a certificate signed by an Authorized Person of the Borrowers, dated as of the
Restatement Date, demonstrating the Solvency of Poolmart on a consolidated basis. 
 “Solvent”
means, with respect to any Person on a particular date, that on such date, on a consolidated basis, (a) at fair valuations, all of the properties and assets of such Person as an entirety on a going concern basis are greater than the sum of the
debts, including contingent liabilities, of such Person, (b) the present fair salable value of the properties and assets of such Person as an entirety on a going concern basis is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and matured, (c) such Person is able to pay its debts and other liabilities, contingent obligations and other commitments as they mature in the normal course of business,
(d) such Person does not intend to, and does not believe that it will, incur debts beyond such Person’s ability to pay as such debts mature, and (e) such Person is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person’s properties and assets would constitute unreasonably small capital after giving due consideration to the prevailing practices in the industry in which such Person is engaged. In computing the
amount of contingent liabilities at any time, it is intended that such liabilities will be computed at the amount that, in light of all the facts and circumstances existing at such time, represents the amount that reasonably can be expected to
become an actual or matured liability. 
  

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 “Standby L/C” means L/Cs issued pursuant to this Agreement,
the drawing under which does not require the delivery of bills of lading, airway bills or other similar types of documents of title, or which are customarily referred to as “standby letters of credit”. 
 “Stock” means all shares, options, warrants, interests, participation, or other equivalents (regardless of
how designated) of or in a Person, whether voting or nonvoting, including common stock, preferred stock, or any other “equity security” (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the
Securities Exchange Commission under the Securities Exchange Act of 1934). 
 “Subsidiary” of a
Person means a corporation, partnership, limited liability company, or other entity in which that Person directly or indirectly owns or controls the shares of stock or other ownership interests having ordinary voting power to elect a majority of the
board of directors (or appoint other comparable managers) of such corporation, partnership, limited liability company, or other entity. 
 “Subordinated Debt” means unsecured Indebtedness of a Borrower or any of its Subsidiaries that is expressly subordinated and made junior to the payment and performance in full of the
Secured Obligations, and evidenced by a written instrument containing subordination provisions in form and substance approved by the Agent in writing. 
 “Supporting Obligation” has the meaning given such term in the Code and also refers to a Letter-of-Credit Right or secondary obligation which supports the payment or performance of an
Account, Chattel Paper, a Document, a General Intangible, an Instrument, or Investment Property. 
 “Synthetic Lease” means any lease of goods or other property, whether real or personal, which is treated as an operating lease under GAAP and as a loan or financing for U.S. income tax purposes. 
 “Taxes” or “Tax” includes any taxes, duties, fees, premiums, assessments, levies, tariffs
and any other charges whatsoever imposed, assessed, reassessed or collected by any Governmental Authority, including all fines, penalties, interest, additions to tax, installments on account of taxes, or other additional amounts imposed, assessed or
collected by any Governmental Authority in respect thereof, and including those related to any tax-sharing agreement or any other contract relating to the sharing or payment of any such Taxes, or levied on, or measured by, or referred to as, gross
income, net income, gross receipts, profits, royalty, capital, capital gains, transfer, land transfer, sales, goods and services, harmonized sales, use, alternative, net worth, value-added, severance, premium, real property, capital stock, personal
property, ad valorem, windfall profits, environmental, excise, stamp, withholding, business, franchise, property development, occupancy, employer health, payroll, employment, health, social services, education and social security taxes, all
surtaxes, all customs duties and import and export taxes, countervail and anti-dumping, all license, franchise and registration fees and all employment insurance, health insurance and other government pension plan premiums or contributions, all
withholdings on amounts paid to or by the relevant Person, and any liability for any of the foregoing as a transferee, successor, guarantor or by contract or by operation of Applicable Law. 
  

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 “Tax Returns” includes all returns, elections, filings,
forms, and any other documents (whether in electronic, tangible or any other form whatsoever) made, prepared or filed, or to be made, prepared or filed in respect of Taxes under Applicable Law. 
 “Total Debt” means with respect to the Borrowers and its Subsidiaries, the result of, without duplication,
of (a) the aggregate amount of Indebtedness of each Borrower and its Subsidiaries, on a consolidated basis, relating to (i) the borrowing of money or the obtaining of credit, including the issuance of notes or bonds, (ii) the deferred
purchase price of assets (other than trade payables incurred in the ordinary course of business), (iii) in respect of any Synthetic Lease or any Capital Lease, and (iv) the maximum drawing amount of all letters of credit outstanding plus
(b) Indebtedness of the type referred to in clause (a) of another Person guaranteed by any Borrower or any of their Subsidiaries. 
 “Underlying Issuer” means any Person who is the beneficiary of an L/C Undertaking. 
 “Underlying Letter of Credit” means a letter of credit that has been issued by an Underlying Issuer in consequence of which an Issuing Bank has agreed to issue an L/C Undertaking.

 “Unreimbursed Amount” has the meaning set forth in Section 2.2. 
 “Unused Line Fee” has the meaning set forth in Section 2.13(b). 
 “Voidable Transfer” has the meaning set forth in Section 19.6. 
 “Wells Fargo” means Wells Fargo Bank, National Association, a national banking association. 
 “WFRF” means Wells Fargo Retail Finance, LLC, a Delaware limited liability company. 
 1.2. Accounting Terms. All accounting terms not specifically defined herein shall be construed in accordance with
GAAP. When used herein, the term “financial statements” shall include the notes and schedules thereto. Whenever the term “Borrower” or “Borrowers” is used in respect of a financial covenant or a related
definition, it shall be understood to mean Borrowers on a consolidated basis unless the context clearly requires otherwise. 
 1.3. Code. Any terms used in this Agreement that are defined in the Code shall be construed and defined as set forth in the Code unless otherwise defined herein. 
 1.4. Construction. Unless the context of this Agreement or, with respect to any other Loan Document, such Loan
Document, clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the term “including” is not limiting, and the term “or” has, except where otherwise indicated,
the inclusive meaning represented by the phrase “and/or.” The words “hereof,” “herein,”

  

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“hereby,” “hereunder,” and similar terms in this Agreement or any other Loan Document refer to this Agreement or such Loan Document as a whole and not to any particular
provision of this Agreement or such Loan Document. An Event of Default shall “continue” or be “continuing” until such Event of Default has been cured or waived in writing by the requisite members of the Lender Group. Section,
subsection, clause, schedule, and exhibit references are to this Agreement unless otherwise specified. Any reference in this Agreement or in the Loan Documents to this Agreement or any of the Loan Documents shall include all alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions, and supplements, thereto and thereof, as applicable. Any reference herein to any Person shall be construed to include such Person’s successors and assigns. Any
requirement of a writing contained herein or in the other Loan Documents shall be satisfied by the transmission of a Record and any Record transmitted shall constitute a representation and warranty as to the accuracy and completeness of the
information contained therein. 
 1.5. Schedules and Exhibits. All of the schedules and exhibits attached
to this Agreement shall be deemed incorporated herein by reference. 
 2. LOAN AND TERMS OF PAYMENT. 
 2.1. Revolving Advances. 
 (a) Amounts. Subject to the terms and conditions of this Agreement, each Lender agrees, severally and not jointly, during the term of this Agreement, to make cash advances
(“Advances”) to Borrowers in an amount at any one time outstanding not to exceed such Lender’s Pro Rata Share of an amount equal to the Maximum Commitment less the outstanding balance of all undrawn or unreimbursed Letters of
Credit. The obligation to repay each Lender’s Pro Rata Share of the Advances, with interest as provided herein, shall be further evidenced by a promissory note made by the Borrowers payable to the order of such Lender in the form of Schedule
2.1(a) annexed hereto (each, a “Revolving Credit Note”). Neither the original nor a copy of the Revolving Credit Notes shall be required, however, to establish or prove any Obligations. In the event that a Revolving Credit Note
is ever lost, mutilated, or destroyed, the Borrowers shall execute a replacement thereof and deliver such replacement to the Agent upon receipt from the applicable Lender of a lost note affidavit and reasonably satisfactory indemnification from the
applicable Lender. 
 (b) Revolving Nature. Amounts borrowed pursuant to this Section 2.1 may
be repaid and, subject to the terms and conditions of this Agreement, reborrowed at any time during the term of this Agreement. 
 (c) Limits on Obligation. The Lenders shall have no obligation to make an Advance if: (i) a Default or an Event of Default has occurred and is continuing; (ii) a Default or Event of
Default would be reasonably likely to result from the making of such Advance; or (iii) after giving effect to the making of such Advance, the Revolving Facility Usage would exceed the Maximum Commitment. 
  

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 (d) Revolving Credit Termination Date. All amounts borrowed pursuant
to this Section, together with all other Obligations, shall be due and payable on the Revolving Credit Termination Date. 
 (e) Procedure for Borrowing. Each Borrowing and election of an applicable interest rate shall be made by an irrevocable written request by an Authorized Person delivered to Agent, which notice must
be received by Agent (i) no later than 11:00 a.m. (California time) on the date that is the requested Funding Date in the case of a request for an Advance bearing interest at the Base Rate or (ii) at least three (3) Business Days
prior to the date that is the requested Funding Date in the case of a request for an Advance bearing interest at a Eurodollar Rate, in each case specifying (i) the amount of such Borrowing, and (ii) the requested Funding Date, which shall
be a Business Day. At Agent’s election, in lieu of delivering the above-described written request, any Authorized Person may give Agent telephonic notice of such request by the required time, with such telephonic notice to be confirmed in
writing within 24 hours of the giving of such notice. 
 (f) Agent’s Election. Promptly after receipt
of a request for a Borrowing of an Advance pursuant to Section 2.1(e) in an amount equal to or less than $5,000,000, the Agent shall elect, in its discretion, (i) to have the terms of Section 2.1(g) apply to such
requested Borrowing, or (ii) to make an Agent Loan pursuant to the terms of Section 2.1(h) in the amount of the requested Borrowing. Any requested Borrowing in an amount greater than $5,000,000 shall be made pursuant to the terms of
Section 2.1(g). 
 (g) Making of Advances. 
 (i) Promptly after receipt of a request for a Borrowing pursuant to Section 2.1(g) in excess of $5,000,000 or
otherwise at the Agent’s election in accordance with Section 2.1(f), the Agent shall notify the Lenders, not later than 10:00 a.m. (California time) on the Business Day immediately preceding the Funding Date applicable thereto, by
telephone, and promptly followed by telecopy, or other similar form of transmission, of the requested Borrowing. Each Lender shall make the amount of such Lender’s Pro Rata Share of the requested Borrowing available to the Agent in same day
funds, to such account of the Agent as the Agent may designate, not later than 12:00 p.m. (California time) on the Funding Date applicable thereto. After the Agent’s receipt of the proceeds of such Advances, upon satisfaction of the applicable
conditions precedent set forth in Sections 3.1 and 3.2, the Agent shall make the proceeds of such Advances available to Borrower on the applicable Funding Date by transferring same day funds equal to the proceeds of such Advances
received by the Agent to the Designated Account; provided, however, the Agent shall not request any Lender to make, and no Lender shall have the obligation to make, any Advance if the Agent has actual knowledge, that (A) one or
more of the applicable conditions precedent set forth in Sections 3.1 or 3.2 will not be satisfied on the requested Funding Date for the applicable Borrowing, or (B) the requested Borrowing would exceed the Availability on such
Funding Date, 
  

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 (ii) Unless Agent receives notice from a Lender on or prior to the
Restatement Date or, with respect to any Borrowing after the Restatement Date, at least one Business Day prior to the date of such Borrowing, that such Lender will not make available as and when required hereunder to Agent for the account of
Borrowers the amount of that Lender’s Pro Rata Share of the Borrowing, Agent may assume that each Lender has made or will make such Lender’s Pro Rata Share available to Agent in immediately available funds on the applicable Funding Date
and Agent may (but shall not be so required), in reliance upon such assumption, make available to Borrowers on such date a corresponding amount. If and to the extent any Lender (including any Deteriorating Lender) shall not have made its Pro Rata
Share of such Borrowing available to Agent in immediately available funds on such Funding Date and Agent in such circumstances has made available to Borrowers such amount, that Lender shall immediately following such Funding Date make its Pro Rata
Share of such Borrowing available to Agent, together with interest at the Defaulting Lenders Rate for each day or portion thereof from such Funding Date to the day on which such Lender has so paid Agent. A notice from Agent submitted to any Lender
with respect to amounts (including interest) owing under this subsection shall be conclusive, absent manifest error. If such Lender’s Pro Rata Share of such Borrowing, plus any accrued interest payable by such Lender to Agent thereon, is paid
to Agent by such Lender such payment (excluding interest) to Agent shall constitute such Lender’s Advance on the Funding Date for such Borrowing for all purposes of this Agreement. If such amount is not paid to Agent on the Business Day
following the Funding Date, Agent will notify Borrowers of such failure to fund and, upon demand by Agent, Borrowers shall pay such amount to Agent for Agent’s account, together with interest thereon for each day elapsed since the date of such
Borrowing, at a rate per annum equal to the interest rate applicable at the time to the Advances composing such Borrowing. The failure of any Lender to make any Advance on any Funding Date shall not relieve any other Lender of any obligation
hereunder to make an Advance on such Funding Date, but no Lender shall be responsible for the failure of any other Lender to make the Advance to be made by such other Lender on any Funding Date. 
 (h) Making of Agent Loans. 
 (i) In the event of any requested Borrowing of an Advance in an amount less than or equal to $5,000,000, at the Agent’s
election (it being expressly understood that the Agent has no commitment to make such Advance), Agent may make an Advance in the amount of such Borrowing (any such Advance made solely by the Agent pursuant to this Section 2.1(h) being
referred to as an “Agent Loan” and such Advances being referred to collectively as “Agent Loans”) available to Borrowers on the Funding Date applicable thereto by transferring same day funds to Borrower Designated
Account. Each Agent Loan is an Advance hereunder and shall be subject to all the terms and conditions applicable to other Advances, except that all payments thereon shall be payable to Agent solely for its own account (and for the account of the
holder of any participation interest with respect to such Advance). The Agent shall not make any Agent Loan if the Agent has actual knowledge, that (i) one or more of the applicable conditions precedent set forth in Sections 3.1 or
3.2 will not be satisfied on the requested Funding Date for the applicable Borrowing, or (ii) the requested Borrowing would exceed the Availability on such Funding Date. Agent shall not otherwise be required to determine whether the
applicable conditions precedent set forth in Sections 3.1 or 3.2 have been satisfied on the Funding Date applicable thereto prior to making, in its sole discretion, any Agent Loan. 
  

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 (ii) The Agent Loans shall be secured by the Collateral and shall
constitute Advances and Secured Obligations hereunder, and shall bear interest at the rate applicable from time to time to Advances pursuant to Section 2.8. 
 (i) Agent Protective Advances. 
 (i) Agent hereby is authorized by Borrowers and the Lenders, from time to time in Agent’s sole discretion,
(1) after the occurrence of a Default or an Event of Default (but without constituting a waiver of such Default or Event of Default), or (2) at any time that any of the other applicable conditions precedent set forth in
Section 3.1 or 3.2 have not been satisfied, to make Advances to Borrowers on behalf of the Lenders which Agent, in its Permitted Discretion, deems necessary or desirable (A) to preserve or protect the Collateral, or any
portion thereof; (B) to enhance the likelihood of, or maximize the amount of repayment of the Secured Obligations, or (C) to pay any other amount chargeable to Borrowers pursuant to the terms of this Agreement, including Lender Group
Expenses and the costs, fees, and expenses described in Section 10 (any of the Advances described in this Section 2.1(i) being hereinafter referred to as “Agent Protective Advances”); provided, that
Agent shall not make any Agent Protective Advances to Borrowers without the consent of the Required Lenders if the amount thereof would exceed $5,000,000 in the aggregate at any one time. 
 (ii) Agent Protective Advances shall be repayable on demand and secured by the Collateral, shall constitute Advances and
Secured Obligations hereunder, and shall bear interest at the rate applicable from time to time to Advances pursuant to Section 2.8. 
 (j) Settlement. It is agreed that each Lender’s funded portion of the Advances is intended by the Lenders to be equal at all times to such Lender’s Pro Rata Share of the outstanding
Advances. Such agreement notwithstanding, the Agent and the Lenders agree (which agreement shall not be for the benefit of or enforceable by Borrowers) that in order to facilitate the administration of this Agreement and the other Loan Documents,
settlement among them as to the Advances, the Agent Loans, and the Agent Protective Advances shall take place on a periodic basis in accordance with the following provisions: 
 (i) The Agent shall request settlement (“Settlement”) with the Lenders on a weekly basis, or on a more
frequent basis if so determined by the Agent, (1) for itself, with respect to each Agent Loan and Agent Protective Advance, and (2) with respect to Collections received, as to each by notifying the Lenders by telephone and promptly
followed by telecopy, or other similar form of transmission, of such requested Settlement, no later than 10:00 a.m. (California time) on the Business Day immediately preceding the date of such requested Settlement (the “Settlement
Date”). Such notice of a Settlement Date shall include a summary statement of the amount of outstanding Advances, Agent Loans, and Agent Protective Advances for the period since the prior Settlement Date, the amount of repayments received
in such period, and the amounts

  

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allocated to each Lender of the principal, interest, fees, and other charges for such period. Subject to the terms and conditions contained herein (including Section 2.1(j)(ii)):
(y) if a Lender’s balance of the Advances, Agent Loans, and Agent Protective Advances exceeds such Lender’s Pro Rata Share of the Advances, Agent Loans, and Agent Protective Advances as of a Settlement Date, then Agent shall by no
later than 10:00 a.m. (California time) on the Settlement Date transfer in same day funds to the account of such Lender as Lender may designate, an amount such that each such Lender shall, upon receipt of such amount, have as of the Settlement Date,
its Pro Rata Share of the Advances, Agent Loans, and Agent Protective Advances; and (z) if a Lender’s balance of the Advances, Agent Loans, and Agent Protective Advances is less than such Lender’s Pro Rata Share of the Advances, Agent
Loans, and Agent Protective Advances as of a Settlement Date, such Lender shall no later than 10:00 a.m. (California time) on the Settlement Date transfer in same day funds to such account of the Agent as the Agent may designate, an amount such that
each such Lender shall, upon transfer of such amount, have as of the Settlement Date, its Pro Rata Share of the Advances, Agent Loans, and Agent Protective Advances. Such amounts made available to the Agent under clause (z) of the immediately
preceding sentence shall be applied against the amounts of the applicable Agent Loan or Agent Protective Advance and, together with the portion of such Agent Loan or Agent Protective Advance representing WFRF’s Pro Rata Share thereof, shall
constitute Advances of such Lenders. If any such amount is not made available to the Agent by any Lender on the Settlement Date applicable thereto to the extent required by the terms hereof, the Agent shall be entitled to recover for its account
such amount on demand from such Lender together with interest thereon at the Defaulting Lenders Rate. 
 (ii) In
determining whether a Lender’s balance of the Advances, Agent Loans, and Agent Protective Advances is less than, equal to, or greater than such Lender’s Pro Rata Share of the Advances, Agent Loans, and Agent Protective Advances as of a
Settlement Date, Agent shall, as part of the relevant Settlement, apply to such balance the portion of payments actually received by Agent with respect to principal, interest, fees payable by Borrower and allocable to the Lenders hereunder, and
proceeds of Collateral. To the extent that a net amount is owed to any such Lender after such application, such net amount shall be distributed by Agent to that Lender as part of such Settlement. 
 (iii) Between Settlement Dates, the Agent, to the extent no Agent Protective Advances or Agent Loans are outstanding, may
pay over to WFRF any payments received by the Agent, which in accordance with the terms of the Agreement would be applied to the reduction of the Advances, for application to WFRF’s Pro Rata Share of the Advances. If, as of any Settlement Date,
Collections received since the then immediately preceding Settlement Date have been applied to WFRF’s Pro Rata Share of the Advances other than to Agent Loans or Agent Protective Advances, as provided for in the previous sentence, WFRF shall
pay to the Agent for the accounts of the Lenders, and Agent shall pay to the Lenders, to be applied to the outstanding Advances of such Lenders, an amount such that each Lender shall, upon receipt of such amount, have, as of such Settlement Date,
its Pro Rata Share of the Advances. During the period between Settlement Dates, the Agent with respect to Agent Loans and Agent Protective Advances,

  

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and each Lender with respect to the Advances other than Agent Loans and Agent Protective Advances, shall be entitled to interest at the applicable rate or rates payable under this Agreement on
the daily amount of funds employed by the Agent or the Lenders, as applicable. 
 (k) Notation. The Agent
shall record on its books the principal amount of the Advances owing to each Lender, including the Agent Loans and Agent Protective Advances owing to the Agent, and the interests therein of each Lender, from time to time. In addition, each Lender is
authorized, at such Lender’s option, to note the date and amount of each payment or prepayment of principal of such Lender’s Advances in its books and records, including computer records, such books and records constituting rebuttably
presumptive evidence, absent manifest error, of the accuracy of the information contained therein. 
 (l)
Lenders’ Failure to Perform. All Advances (other than Agent Loans and Agent Protective Advances) shall be made by the Lenders simultaneously and in accordance with their Pro Rata Shares. It is understood that (i) no Lender shall be
responsible for any failure by any other Lender to perform its obligation to make any Advances hereunder, nor shall any Commitment of any Lender be increased or decreased as a result of any failure by any other Lender to perform its obligation to
make any Advances hereunder, and (ii) no failure by any Lender to perform its obligation to make any Advances hereunder shall excuse any other Lender from its obligation to make any Advances hereunder. 
 (m) Effect of Bankruptcy. If a case is commenced by or against any Borrower under the Bankruptcy Code, or other
statute providing for debtor relief, prior to the payment in full of the Obligations and the termination of the Commitments, or if any of the Agent or any Affiliate shall seek to provide a Borrower with, or consent to a third party’s providing
, any financing under Section 364 of the Bankruptcy Code or consent to any order for the use of cash collateral, constituting Collateral under Section 363 of the Bankruptcy Code, or any similar provision of any state or foreign insolvency
law (each, a “DIP Financing”), with such DIP Financing to be secured by all or any portion of Collateral (including assets that, but for the application of Section 552 of the Bankruptcy Code would be Collateral), then each of
the Lenders agrees that it will not raise any objection and will not support any objection to such DIP Financing or use of cash collateral or to the Liens securing the same on any basis and not offer its support of any alternative
debtor-in-possession financing which seeks to prime or be pari passu with the Secured Obligations. 
 2.2.
Defaulting Lender. 
 (a) If a Lender becomes a Defaulting Lender, then, in addition to the rights and
remedies that may be available to the other Lenders, Agent, the Borrowers or any other party at law or in equity, and not in limitation thereof, (i) such Defaulting Lender’s right to participate in the administration of, or decision-making
rights related to, the Obligations in respect of Required Lender votes, this Agreement or the other Loan Documents shall be suspended for so long as such Lender remains a Defaulting Lender, (ii) such Defaulting Lender (on its own behalf and on
behalf of any of its Affiliates that is a Bank Product Provider) shall be deemed to have permanently (unless reinstated as set forth below) assigned, without further consideration, any and all payments due to it from the Borrowers, whether on
account of

  

 34 

 
outstanding Advances, interest, fees or otherwise, to the remaining non-Defaulting Lenders for application to, and reduction of, their proportionate shares of all outstanding Obligations until,
as a result of application of such assigned payments the Lenders’ respective Pro Rata Shares of all outstanding Obligations shall have returned to those in effect immediately prior to such delinquency and without giving effect to the nonpayment
causing such delinquency, and (iii) at the option of the Agent, any amount payable to such Defaulting Lender (or to any Affiliate of such Defaulting Lender which is a Bank Product Provider) hereunder (whether on account of principal, interest,
fees, Bank Products or otherwise) shall, in lieu of being distributed to such Defaulting Lender (or its Affiliate), be retained by the Agent as cash collateral for, and applied by the Agent to, defaulted and future funding obligations of the
Defaulting Lender in respect of any Advance or existing or future participating interest in any Letter of Credit. The Defaulting Lender’s (and its Affiliates) decision-making and participation rights and rights to payments as set forth in
clauses (i), (ii) and (iii) hereinabove shall be restored only upon (a) the payment by the Defaulting Lender of its Pro Rata Share of any Obligations, any participation obligation, or expenses as to which it is delinquent, together
with interest thereon at a rate equal to the Base Rate from time to time in effect from the date when originally due until the date upon which any such amounts are actually paid and (b) receipt by the Agent and the Borrowers of a certification
by such Defaulting Lender of its ability and intent to comply with the provisions of this Agreement going forward. The operation of this section shall not be construed to increase or otherwise affect the Commitment of any non-Defaulting Lender, or
relieve or excuse the performance by Borrowers of their duties and obligations hereunder. 
 (b) The Agent shall
also have the right, but not the obligation, in its Permitted Discretion, to cause the assignment to a non-Defaulting Lender or Lenders or an Eligible Transferee, in accordance with the terms and conditions of Section 15.1, hereof,
without any further action by the Defaulting Lender for no cash consideration, of the Defaulting Lender’s Commitment to fund future Advances and participate in Letters of Credit. Upon any such assignment of the Commitment of any Defaulting
Lender, the Defaulting Lender’s share in future Advances, Letters of Credit, and any fees payable to the Lenders and its other rights under the Loan Documents with respect thereto (but not with respect to then outstanding Obligations owed to
the Defaulting Lender) shall terminate on the date of such assignment, and the Defaulting Lender shall promptly execute all documents reasonably requested to surrender and transfer such interest, including, if so requested, an Assignment and
Acceptance. 
 (c) In addition to the rights of the non-Defaulting Lenders set forth in
Section 2.2(b) above, each Borrower shall have the right, at any time, upon at least five Business Days’ notice to a Defaulting Lender (with a copy to the Agent), to terminate in whole such Lender’s Commitments and to replace
such Defaulting Lender in accordance with the provisions of Section 19.10 hereof. 
 (d) Each
Defaulting Lender shall indemnify the Agent and each non-Defaulting Lender (and their respective Affiliates and their employees, agents, consultants, advisors, and attorneys) from and against any and all loss, damage or expenses, including but not
limited to reasonable attorneys’ fees and funds advanced by the Agent or by any non-Defaulting Lender, on account of a Defaulting Lender’s failure to timely fund its Pro Rata Share of an Advance, participate in Letters of Credit, or to
otherwise perform its obligations under the Loan Documents. 
  

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 2.3. Letters of Credit. 
 (a) The Letter of Credit Commitment. 
 (i) Subject to the terms and conditions set forth herein, (A) the Agent, in reliance upon the agreements of the Lenders
set forth in this Section 2.2 shall endeavor to cause the Issuing Bank from time to time on any Business Day during the period from the Restatement Date until the Letter of Credit Expiration Date, to issue letters of credit for the
account of the Borrowers (each, an “L/C”) or to undertake to purchase participations or execute indemnities or reimbursement obligations (each such undertaking, an “L/C Undertaking”) with respect to letters of
credit issued by an Underlying Issuer (as of the Restatement Date, the prospective Underlying Issuer is Wells Fargo) for the account of Borrowers, and to amend or extend Letters of Credit previously issued by the Issuing Bank, in accordance with
Section 2.3(b) below and (B) the Lenders severally agree to participate in Letters of Credit issued for the account of the Borrowers and any drawings thereunder; provided that (w) after giving effect to the issuance of
any requested Letter of Credit, Revolving Facility Usage shall not exceed the Maximum Commitment, (x) such Letter of Credit shall not be issued in an amount which would exceed Availability as in effect immediately prior to its issuance,
(y) any Lender’s Pro Rata Share shall not exceed such Lender’s Commitment, (y) L/C Usage shall not exceed the L/C Sublimit, and (z) the expiry date of the proposed Letter of Credit is no later than thirty (30) days
prior to the Maturity Date (the “Letter of Credit Expiration Date”). Each request by the Borrowers for the issuance or amendment of a Letter of Credit shall be deemed to be a representation by the Borrowers that the issuance or
amendment so requested complies with the conditions set forth in the proviso to the preceding sentence and with the succeeding clauses “ii” and “iii”. Within the foregoing limits, and subject to the terms and conditions hereof,
the Borrowers’ ability to obtain Letters of Credit shall be fully revolving, and accordingly the Borrowers may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon
and reimbursed. 
 (ii) Without limitation of the foregoing clause “i” no Letter of Credit shall be
issued, if: 
 (A) with respect to any Standby L/C, subject to Section 2.3(b)(iii), the expiry date
of such requested Standby L/C would occur more than twelve months after the date of issuance or last extension, unless the Required Lenders have approved such expiry date; or 
 (B) with respect to Documentary Letters of Credit, subject to Section 2.3(b)(iii), the expiry date of such
requested Documentary Letter of Credit would occur more than 180 days after the date of issuance or last extension, unless the Required Lenders have approved such expiry date. 
  

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 (iii) Without limitation of the foregoing clauses “i” and
“ii”, no Letter of Credit shall be issued without the prior consent of the Agent and Issuing Bank if: 
 (A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the Issuing Bank from issuing such Letter of Credit, or any Applicable Law or any request or directive (whether
or not having the force of law) from any Governmental Authority with jurisdiction over the Issuing Bank shall prohibit, or request that the Issuing Bank refrain from, the issuance of letters of credit generally or such Letter of Credit in particular
or shall impose upon the Issuing Bank with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the Issuing Bank is not otherwise compensated hereunder) not in effect on the Restatement Date, or shall impose
upon the Issuing Bank any unreimbursed loss, cost or expense which was not applicable on the Restatement Date and which the Issuing Bank in good faith deems material to it; 
 (B) the issuance of such Letter of Credit would violate one or more policies of the Issuing Bank applicable to letters of
credit generally; 
 (C) such Letter of Credit is to be denominated in a currency other than Dollars; provided
that if the Issuing Bank, in its discretion and with the consent of the Agent, issues a Letter of Credit denominated in a currency other than Dollars, all reimbursements by the Borrowers of the honoring of any drawing under such Letter of Credit
shall be paid in Dollars. 
 (D) any Lender is at such time a Deteriorating Lender hereunder, unless the Agent
or the Issuing Bank has entered into satisfactory arrangements with the Borrower or such Deteriorating Lender to eliminate the Issuing Bank’s risk with respect to such Lender. 
 (iv) The Issuing Bank shall not amend any Letter of Credit if the Issuing Bank would not be permitted at such time to issue
such Letter of Credit in its amended form under the terms hereof or if the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit. 
 (v) The Issuing Bank shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents
associated therewith, and the Issuing Bank shall have all of the benefits and immunities (A) provided to the Agent in Article 17 with respect to any acts taken or omissions suffered by the Issuing Bank in connection with Letters of
Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the term “Agent” as used in Article 17 included the Issuing Bank with respect to such acts or omissions, and
(B) as additionally provided herein with respect to the Issuing Bank. 
  

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 (b) Procedures for Issuance and Amendment of Letters of Credit;
Auto-Extension Letters of Credit. 
 (i) Each Letter of Credit shall be issued or amended, as the case may
be, upon the request of the Borrowers delivered to the Agent in the form of a Letter of Credit application in form and substance satisfactory to the Issuing Bank in its Permitted Discretion (the “Letter of Credit Application”),
appropriately completed and signed by an Authorized Person. Any Letter of Credit Application or other document delivered hereunder that is signed by an Authorized Person shall be conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action and such Authorized Person shall be conclusively presumed to have acted on behalf of the Borrowers. Such Letter of Credit Application must be received by the Agent not later than 11:00 a.m., California
time, at least two Business Days (or such other date and time as the Agent may agree in a particular instance in its sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an
initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the Agent and Issuing Bank in their Permitted Discretion: (A) the proposed issuance date of the requested Letter of
Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing
thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; and (G) such other matters as the Agent or Issuing Bank may reasonably require. In the case of a request for an
amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the Agent and Issuing Bank in their Permitted Discretion: (A) the Letter of Credit to be amended; (B) the
proposed date of amendment thereof (which shall be a Business Day); (C) the nature of the proposed amendment; and (D) such other matters as the Agent and Issuing Bank may require in their Permitted Discretion. Additionally, the Borrowers
shall furnish to the Issuing Bank and the Agent such other documents and information pertaining to such requested Letter of Credit issuance or amendment, including any Issuer Documents, as the Issuing Bank or the Agent may reasonably require.

 (ii) Immediately upon the issuance or amendment of each Letter of Credit, each Lender shall be deemed to
(without any further action), and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank, without recourse or warranty, a risk participation in such Letter of Credit in an amount equal to the product of such Lender’s
Pro Rata Share times the amount of such Letter of Credit. Upon any change in the Commitments under this Agreement, it is hereby agreed that with respect to all L/C Usage, there shall be an automatic adjustment to the participations hereby created to
reflect the new Pro Rata Shares of the assigning and assignee Lenders. 
  

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 (iii) If the Borrowers so request in any applicable Letter of Credit
Application, the Issuing Bank may, in its Permitted Discretion, issue a Standby Letter of Credit that has automatic extension provisions (each, an “Auto-Extension Letter of Credit”); provided that any such Auto-Extension Letter of
Credit must permit the Issuing Bank to prevent any such extension at least once in each twelve-month period (commencing with the date of issuance of such Standby Letter of Credit) by giving prior notice to the beneficiary thereof not later than a
day (the “Non-Extension Notice Date”) in each such twelve-month period to be agreed upon at the time such Standby Letter of Credit is issued. Unless otherwise directed by the Agent or Issuing Bank, the Borrowers shall not be
required to make a specific request to the Agent or Issuing Bank for any such extension. Once an Auto-Extension Letter of Credit has been issued, the Lenders shall be deemed to have authorized (but may not require) the Issuing Bank to permit the
extension of such Standby Letter of Credit at any time to an expiry date not later than the Letter of Credit Expiration Date; provided, however, that the Agent shall instruct the Issuing Bank not to permit any such extension if
(A) the Agent has determined that it would not be permitted, or would have no obligation, at such time to cause the issuance of such Standby Letter of Credit in its revised form (as extended) under the terms hereof (by reason of the provisions
of clause (ii) or (iii) of Section 2.3(a) or otherwise), or (B) the Issuing Bank has received notice (which may be by telephone or in writing) on or before the day that is thirty days before the Non-Extension Notice Date
from the Agent or the Borrowers that one or more of the applicable conditions specified in Section 3.2 is not then satisfied, and directing the Issuing Bank not to permit such extension. 
 (iv) Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with
respect thereto or to the beneficiary thereof, the Issuing Bank will make available to the Borrowers and the Agent a true and complete copy of such Letter of Credit or amendment. 
 (c) Drawings and Reimbursements; Funding of Participations. 
 (i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the
Issuing Bank shall notify the Agent thereof and the Agent shall notify the Borrowers; provided, however, that any failure to give or delay in giving such notice shall not relieve the Borrowers of their obligation to reimburse the
Issuing Bank and the Lenders with respect to any such payment. Not later than 10:00 a.m. (California time) on the date of any payment made by the Issuing Bank under a Letter of Credit if such notice of a Letter of Credit drawing is received by the
Borrowers before 9:00 a.m. (California time) on such date or 10:00 a.m. (California time) on the Business Day immediately following such date if such notice of a Letter of Credit drawing was received after 9:00 a.m. (California time) on such date
(each such date, an “Honor Date”), the Borrowers shall reimburse the Issuing Bank through the Agent in an amount equal to the amount of such drawing. If the Borrowers fail to so reimburse the Issuing Bank by such time, the Agent
shall promptly notify each Lender of the Honor Date, the amount of the unreimbursed drawing (the “Unreimbursed Amount”), and the amount of such Lender’s Pro Rata Share thereof. In such event, the Borrowers shall be deemed to
have requested a Borrowing of Base Rate Loans to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount subject to the amount of the unutilized Commitments and the conditions set forth in Section 3.2. Any notice
given by the Issuing Bank or the Agent pursuant to this Section 2.3(c)(i) may be given by telephone or electronic means. 
  

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 (ii) Each Lender shall upon any notice pursuant to
Section 2.3(c)(i) make funds available to the Agent for the account of the Issuing Bank in an amount equal to its Pro Rata Share of the Unreimbursed Amount not later than 10:00 a.m., California time, on the Business Day specified in such
notice by the Agent, whereupon, subject to the provisions of Section 2.3(c)(iii), each Lender that so makes funds available shall be deemed to have made a Base Rate Loan to the Borrowers in such amount. The Agent shall remit the funds so
received to the Issuing Bank. 
 (iii) With respect to any Unreimbursed Amount that is not fully refinanced by a
Borrowing of Base Rate Loans because the conditions set forth in Section 4.2 cannot be satisfied or for any other reason, the Borrowers shall be deemed to have incurred from the Issuing Bank a Borrowing in the amount of the Unreimbursed
Amount that is not so refinanced (such Borrowing, an “L/C Borrowing”), which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate. In such event, each Lender’s
payment to the Agent for the account of the Issuing Bank pursuant to Section 2.3(c)(ii) shall be deemed payment in respect of its participation in such L/C Borrowing and shall constitute an Advance from such Lender in satisfaction of its
participation obligation under this Section 2.2 (each such Advance, an “L/C Advance”). 
 (iv) Until each Lender funds its Base Rate Loan or L/C Advance pursuant to this Section 2.3(c) to reimburse the Issuing Bank for any amount drawn under any Letter of Credit, interest in respect of such Lender’s Pro Rata
Share of such amount shall be solely for the account of the Issuing Bank. 
 (v) Each Lender’s obligation
to make Base Rate Loans or L/C Advances to reimburse the Issuing Bank for amounts drawn under Letters of Credit, as contemplated by this Section 2.3(c), shall be absolute and unconditional and shall not be affected by any circumstance,
including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against the Issuing Bank, the Borrowers or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default or
Event of Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing. No such making of an L/C Advance shall relieve or otherwise impair the obligation of the Borrowers to reimburse the Issuing Bank
for the amount of any payment made by the Issuing Bank under any Letter of Credit, together with interest as provided herein. 
 (vi) If any Lender fails to make available to the Agent for the account of the Issuing Bank any amount required to be paid by such Lender pursuant to the foregoing provisions of this
Section 2.3(c) by the time specified in Section 2.3(c)(ii), the Issuing Bank shall be entitled to recover from such Lender (acting through the Agent), on demand, such amount with interest thereon for the period from the date
such payment is required to the date on which such payment is immediately available to the Issuing Bank at a rate per annum equal to the greater of the Base Rate and a rate

  

 40 

 
determined by the Issuing Bank in accordance with banking industry rules on interbank compensation plus any administrative, processing or similar fees customarily charged by the Issuing Bank in
connection with the foregoing. If such Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Lender’s Advance included in the relevant Borrowing or L/C Advance in respect of the relevant L/C
Borrowing, as the case may be. A certificate of the Issuing Bank submitted to any Lender (through the Agent) with respect to any amounts owing under this clause (vi) shall be conclusive absent manifest error. 
 (d) Repayment of Participations. 
 (i) At anytime after the Issuing Bank has made a payment under any Letter of Credit and has received from the Agent a
Lender’s L/C Advance in respect of such payment in accordance with Section 2.3(c), if the Agent receives for the account of the Issuing Bank any payment in respect of the related Unreimbursed Amount or interest thereon (whether
directly from the Borrowers or otherwise, including proceeds of Cash Collateral, in form and substance satisfactory to Agent, applied thereto by the Agent), the Agent will distribute to such Lender its Pro Rata Share thereof (appropriately adjusted,
in the case of interest payments, to reflect the period of time during which such Lender’s L/C Advance was outstanding) in the same funds as those received by the Agent. 
 (ii) If any payment received by the Agent for the account of the Issuing Bank pursuant to Section 2.3(c)(i) is
required to be returned under any of the circumstances described in Section 19.6 (including pursuant to any settlement entered into by the Issuing Bank in its discretion), each Lender shall pay to the Agent for the account of the Issuing
Bank its Pro Rata Share thereof on demand of the Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Lender, at a rate per annum equal to the Base Rate from time to time in effect. The obligations of
the Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement. 
 (e) Obligations Absolute. The obligation of the Borrowers to reimburse the Issuing Bank for each drawing under each Letter of Credit and to repay each L/C Borrowing shall be absolute, unconditional
and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following: 
 (i) any lack of validity or enforceability of such Letter of Credit, this Agreement, or any other Loan Document; 
 (ii) the existence of any claim, counterclaim, setoff, defense or other right that the Borrowers or any Subsidiary may have
at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the Issuing Bank or any other Person, whether in connection with this Agreement, the
transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction; 
  

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 (iii) any draft, demand, certificate or other document presented under such
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to
make a drawing under such Letter of Credit, provided that the Issuing Bank has acted commercially reasonably; 
 (iv) any payment by the Issuing Bank under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit or any payment made by the Issuing Bank under such Letter
of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of
Credit, including any arising in connection with any Insolvency Proceeding; 
 (v) any other circumstance or
happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Borrowers or any of their Subsidiaries; or 
 (vi) the fact that any Default or Event of Default shall have occurred and be continuing. 
 Borrowers shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any
claim of noncompliance with the Borrowers’ instructions or other irregularity, the Borrowers will immediately notify the Agent and the Issuing Bank. The Borrowers shall be conclusively deemed to have waived any such claim against the Issuing
Bank and its correspondents unless such notice is given as aforesaid. Borrowers’ delivery of any such notice shall not relieve or waive Borrowers’ reimbursement obligations with respect to any such Letter of Credit in the event of any
drawing thereunder. 
 (f) Role of Issuing Bank. Each Lender and each Borrower agree that, in paying any
drawing under a Letter of Credit, the Issuing Bank shall not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the
validity or accuracy of any such document or the authority of the Person executing or delivering any such document. None of the Issuing Bank, the Agent or any of their respective Affiliates, officers, directors, employees, agents, attorneys, and
attorneys-in-fact nor any correspondent, participant or assignee of the Issuing Bank shall be liable to any Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Required Lenders, as
applicable; (ii) any action taken or omitted in the absence of a breach of this Agreement, violation of Applicable Law, gross negligence or willful misconduct; (iii) any error, omission, interruption, loss or delay in transmission or
delivery of any draft, notice or other communication under or relating to any Letter of Credit or any error in interpretation of technical terms; or (iv) the due execution, effectiveness, validity or enforceability of any document or instrument
related to any Letter of Credit or Issuer Document. The Borrowers hereby assume all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit and the proceeds

  

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thereof; provided, however, that this assumption is not intended to, and shall not, preclude the Borrowers’ pursuing such rights and remedies as it may have against the beneficiary or
transferee at law or under any other agreement. None of the Issuing Bank, the Agent, any of their respective officers, directors, employees, agents, attorneys, and attorneys-in-fact nor any correspondent, participant or assignee of the Issuing Bank
shall be liable or responsible for any of the matters described in clauses (i) through (vi) of Section 2.3(e); provided, however, that anything in such clauses to the contrary notwithstanding, the Borrowers may have a claim
against the Issuing Bank, and the Issuing Bank may be liable to the Borrowers, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by the Borrowers which the Borrowers prove were caused by
the Issuing Bank’s breach of this Agreement, violation of Applicable Law, willful misconduct or gross negligence or the Issuing Bank’s willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a
sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit. In furtherance and not in limitation of the foregoing, the Issuing Bank may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or information to the contrary (or the Issuing Bank may refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such
Letter of Credit), and the Issuing Bank shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, which may prove to be invalid or ineffective for any reason. 
 (g) Underlying
L/Cs. 
 (i) Borrowers agree to be bound by the Underlying Issuer’s regulations and interpretations of
any Underlying Letter of Credit. Borrowers understand that the L/C Undertakings may require Issuing Bank to indemnify the Underlying Issuer for certain costs or liabilities arising out of claims by Borrowers against such Underlying Issuer. Borrowers
hereby agree to indemnify, save, defend, and hold the Issuing Bank harmless with respect to any loss, cost, expense (including reasonable attorneys’ fees), or liability incurred by the Issuing Bank under any L/C Undertaking as a result of the
Issuing Bank’s indemnification of any Underlying Issuer; provided, however, that Borrowers shall not be obligated hereunder to indemnify for any loss, cost, expense, or liability that is caused by the gross negligence or willful
misconduct of the Issuing Bank. 
 (ii) Borrowers hereby authorize and direct any Underlying Issuer to deliver
to the Issuing Bank all instruments, documents, and other writings and property received by such Underlying Issuer pursuant to such Underlying Letter of Credit and to accept and rely upon the Issuing Bank’s instructions with respect to all
matters arising in connection with such Underlying Letter of Credit and the related application. 
 (iii) Any
and all charges, commissions, fees, and costs incurred by the Issuing Bank relating to Underlying Letters of Credit shall be Lender Group Expenses for purposes of this Agreement and immediately shall be reimbursable by Borrowers to Agent for the
account of the Issuing Bank; it being acknowledged and agreed that the Underlying Issuer may impose charges for amendments, extensions, drawings, and renewals. 
  

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 (h) Increased Cost. 
 If by reason of (i) any change in any applicable law, treaty, rule, or regulation or any change in the interpretation or application
thereof by any Governmental Authority, or (ii) compliance by the Underlying Issuer, Issuing Bank, or the Agent with any direction, request, or requirement (irrespective of whether having the force of law) of any Governmental Authority or
monetary authority including, without limitation, Regulation D of the Board of Governors of the Federal Reserve System as from time to time in effect (and any successor thereto): 
 (A) any reserve, deposit, or similar requirement is or shall be imposed or modified in respect of any Letter of Credit
issued hereunder, or 
 (B) there shall be imposed on the Underlying Issuer, Issuing Bank or the Agent any other
condition regarding any Underlying Letter of Credit or any Letter of Credit issued pursuant hereto; 
 and the result of the
foregoing is to increase, directly or indirectly, the cost to the Underlying Issuer, Issuing Bank, Agent or Lenders of issuing, making, guaranteeing, or maintaining any Letter of Credit or to reduce the amount receivable in respect thereof by the
Underlying Issuer, Issuing Bank, Agent or Lenders, then, and in any such case, Agent may, at any time within a reasonable period after the additional cost is incurred or the amount received is reduced, notify Borrowers, and Borrowers shall pay on
demand such amounts as Agent may specify to be necessary to compensate for such additional cost or reduced receipt, together with interest on such amount from the date of such demand until payment in full thereof at the rate then applicable to Base
Rate Loans hereunder. The determination by Underlying Issuer, Issuing Bank, Agent or any Lender, as the case may be, of any amount due pursuant to this Section, as set forth in a certificate setting forth the calculation thereof in reasonable
detail, shall, in the absence of manifest or demonstrable error, be final and conclusive and binding on all of the parties hereto. 
 (i) Cash Collateral. Upon the request of the Agent, (i) if the Issuing Bank has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C
Borrowing, or (ii) if, as of the Letter of Credit Expiration Date, any L/C Obligation for any reason remains outstanding, the Borrowers shall, in each case, immediately Cash Collateralize the then extant L/C Usage. For purposes of this
Section 2.2 “Cash Collateralize” means to pledge and deposit with or deliver to the Agent, for the benefit of the Issuing Bank and the Lenders, as collateral for the L/C Obligations, cash or deposit account balances in
an amount equal to 105% of the then extant L/C Usage, pursuant to documentation in form and substance satisfactory to the Agent and the Issuing Bank in their Permitted Discretion (which documents are hereby consented to by the Lenders). The
Borrowers hereby grant to the Agent a security interest in all such cash, deposit accounts and all balances therein and all proceeds of the foregoing. Cash Collateral shall be maintained in blocked, non-interest bearing deposit accounts at Wells
Fargo or an account maintained by the Agent subject to a Restricted Account Agreement. If at any time the Agent determines that any funds held as Cash Collateral are subject to any right or claim of any Person other than the Agent or that the total
amount of such funds is less than the aggregate L/C Usage, the Borrowers will, forthwith upon demand by

  

 44 

 
the Agent, pay to the Agent, as additional funds to be deposited as Cash Collateral, an amount equal to the excess of (x) such aggregate outstanding amount over (y) the total amount of
funds, if any, then held as Cash Collateral that the Agent determines to be free and clear of any such right and claim. Upon the drawing of any Letter of Credit for which funds are on deposit as Cash Collateral, such funds shall be applied, to the
extent permitted under Applicable Law, to reimburse the Issuing Bank and, to the extent not so applied, shall thereafter be applied to satisfy other Secured Obligations. 
 (j) Documentary and Processing Charges Payable to Issuing Bank. The Borrowers shall pay to the Agent on behalf of the
Issuing Bank for the Issuing Bank’s own account the customary presentation, amendment and other processing fees, and other standard costs and charges, of the Issuing Bank relating to letters of credit as from time to time in effect. It is
acknowledged and agreed by Borrowers that such fees and charges may be changed from time to time. Such customary fees and standard costs and charges are due and payable on demand and are nonrefundable. 
 (k) Consignment of Bill of Lading. The Borrowers shall upon the request of the Agent consign to the Agent, or the
Issuing Bank any bill of lading which Inventory which is supported by a Documentary Letter of Credit issued by the Issuing Bank. 
 (l) Conflict with Issuer Documents. In the event of any conflict between the terms hereof and the terms of any Issuer Document, the terms hereof shall control. 
 (m) The Borrowers hereby agree to indemnify, save, defend, and hold Agent, Issuing Bank and each Lender harmless from any
loss, cost, expense, or liability, and reasonable attorneys fees incurred by Agent, Issuing Bank or any Lender arising out of or in connection with any Letter of Credit including any such loss or claim due to any action taken by any Issuing Bank;
provided, however, that Borrowers shall not be obligated hereunder to indemnify the Agent, Issuing Bank or any Lender for any loss, cost, expense, or liability that is caused by the bad faith, gross negligence or willful misconduct of
such Person. The Borrowers further agree to hold Agent and each Lender harmless from any errors or omission, negligence or misconduct by the Issuing Bank. The Borrowers agree to be bound by the Agent’s, Issuing Bank’s or Underlying
Issuer’s regulations and interpretations of any Letter of Credit, even though this interpretation may be different from Borrowers’ own, and the Borrowers understand and agree that none of the Agent, the Lenders, or any Issuing Bank shall
be liable for any error, negligence, or mistake, whether of omission or commission, in following the Borrowers’ instructions or those contained in the Letter of Credit or any modifications, amendments, or supplements thereto other than those
caused by its own bad faith, gross negligence or willful misconduct. The Borrowers understand that L/C Undertakings may require Lenders to indemnify the Underlying Issuer for certain costs or liabilities arising out of claims by the Borrowers
against such Underlying Issuer. The Borrowers hereby agree, severally each as to 100%, to indemnify, save, defend, and hold each Lender harmless with respect to any loss, cost, expense (including reasonable attorneys’ fees), or liability
incurred by Lenders under any L/C Undertaking as a result of Lender’s indemnification of any Underlying Issuer; provided, however, that no Borrower shall be obligated hereunder to indemnify for any loss, cost, expense, or
liability that is caused by the bad faith, gross negligence or willful misconduct of such Lender. 
  

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 (n) On the Restatement Date, (i) Existing Letters of Credit shall be
deemed to be Letters of Credit issued pursuant to and in compliance with this Agreement, (iii) the face amount of such Existing Letters of Credit shall be included in the calculation of the Availability, (iv) the provisions of this
Agreement shall apply thereto, and the Borrowers and the Lenders hereunder hereby expressly assume all obligations with respect to such Letters of Credit that they would have if such Letters of Credit had been issued pursuant to this Agreement and
(v) all liabilities of any Borrower with respect to such Existing Letters of Credit shall constitute obligations of the Borrower hereunder. 
 2.4. Intentionally Omitted. 
 2.5. Intentionally Omitted.

 2.6. Payments. 
 (a) Payments by Borrowers. 
 (i) All payments to be made by Borrowers shall be made without set-off, recoupment, deduction, or counterclaim, except as
otherwise required by law. Except as otherwise expressly provided herein, all payments by Borrowers shall be made to Agent for the account of the Lenders, Issuing Bank or Agent, as the case may be, and shall be made in immediately available funds,
no later than 11:00 a.m. (California time) on the date specified herein. Any payment received by Agent later than 11:00 am. (California time), at the option of Agent, shall be deemed to have been received on the following Business Day and any
applicable interest or fee shall continue to accrue until such following Business Day. 
 (ii) Whenever any
payment is due on a day other than a Business Day, such payment shall be made on the following Business Day, and such extension of time shall in such case be included in the computation of interest or fees, as the case may be. 
 (iii) Unless Agent receives notice from Borrowers prior to the date on which any payment is due to the Lenders or Issuing
Bank that Borrowers will not make such payment in full as and when required, Agent may assume that Borrowers have made such payment in full to Agent on such date in immediately available funds and Agent may (but shall not be so required), in
reliance upon such assumption, distribute to each Lender or Issuing Bank on such due date an amount equal to the amount then due such Lender or Issuing Bank. If and to the extent Borrowers have not made such payment in full to Agent, each Lender or
Issuing Bank shall repay to Agent on demand such amount distributed to such Lender or Issuing Bank, together with interest thereon at the Base Rate for each day from the date such amount is distributed to such Lender or Issuing Bank until the date
repaid. 
 (b) Apportionment and Application of Payments. Except as otherwise provided with respect to
Defaulting Lenders, aggregate principal and interest payments shall be apportioned ratably among the Lenders (according to the unpaid principal balance of the Advances to which such payments relate held by each Lender) and payments of the fees
(other

  

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than fees designated for Agent’s or Issuing Bank’s separate account) shall, as applicable, be apportioned ratably among the Lenders. All payments shall be remitted to Agent and all such
payments not relating to principal or interest on specific Advances, or not constituting payment of specific fees and all proceeds of Collateral received by Agent, shall be applied, first, to pay any fees or expense reimbursements then due to Agent
from Borrowers; second, to pay any fees or expense reimbursements then due to the Lenders and Issuing Bank from Borrowers; third, to pay interest due in respect of all Advances, including Agent Loans and Agent Protective Advances; fourth, to pay or
prepay principal of Agent Loans and Agent Protective Advances; fifth, ratably to pay principal of the Advances (other than Agent Loans and Agent Protective Advances) and unreimbursed obligations in respect of Letters of Credit (and, if such payment
occurs after the acceleration of the Obligations due to an Event of Default, to Cash Collateralize all outstanding Letters of Credit up to an amount equal to 105% of the aggregate extant value of all such Letters of Credit); and sixth, ratably to
pay any other Secured Obligations due to Agent, any Lender or any Bank Product Providers by Borrowers. Agent shall promptly distribute to each Lender (for Lender’s own account and for the account of any Affiliate of such Lender which is a Bank
Product Provider) and Issuing Bank, pursuant to the applicable wire transfer instructions received from each Lender in writing, such funds as it (or any of its Affiliates which is a Bank Product Provider) may be entitled to receive, subject to a
Settlement delay as provided for in Section 2.1(j). 
 2.7. Overadvances. If, at any time or
for any reason, the Revolving Credit Usage is greater than Maximum Commitment as then in effect, Borrowers immediately shall pay to Agent, in cash, the amount of such excess to be used by Agent to reduce the Obligations pursuant to the terms of
Section 2.6(b). 
 2.8. Interest and Letter of Credit Fees: Rates, Payments, and Calculations.

 (a) Interest Rate. Except as provided in Section 2.8(c), all Obligations (except for
undrawn Letters of Credit) shall bear interest on the Daily Balance thereof as follows: (i) if the relevant Obligation is an Eurodollar Rate Loan, at a per annum rate equal to the Adjusted Eurodollar Rate plus the Applicable Margin for
Eurodollar Rate Loans and (ii) if the relevant Obligation is an Base Rate Loan, at a per annum rate equal to the Base Rate plus the Applicable Margin for Base Rate Loans, and (iii) all other Obligations (except Letters of Credit) at a per
annum rate equal to the Base Rate plus the Applicable Margin for Base Rate Loans. 
 (b) Letter of Credit
Fee. As to each outstanding Letter of Credit, Borrowers shall pay Agent, for the benefit of the Lender Group, an L/C Fee (in addition to the charges, commissions, fees, and costs set forth in Section 2.3(g)) which shall accrue at a
rate equal to the aggregate L/C Fees applicable to such Letters of Credit times the Daily Balance of the undrawn amount of all outstanding Letters of Credit. 
 (c) Default Rate. Upon the occurrence and during the continuation of an Event of Default, 
 (i) all Obligations (except for undrawn Letters of Credit) that have been charged to the Loan Account pursuant to the terms
hereof shall bear interest on the Daily Balance thereof at a per annum rate equal to two percentage points above the sum of the Base Rate plus the Applicable Margin, and 
  

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 (ii) the L/C Fees provided in Section 2.8(b) shall be increased
to a per annum rate equal to two percentage points above the L/C Fee otherwise payable hereunder. 
 The interest rates and L/C
Fees set forth in these subsections (i) and (ii) of this Section 2.8(c) shall be collectively referred to as the “Default Rate”. 
 (d) Intentionally Omitted. 
 (e) Payments. Interest in respect of Base Rate Loans and Letter of Credit fees payable hereunder shall be due and
payable, in arrears, on the first day of each month during the term hereof. Interest in respect of each Eurodollar Rate Loan shall be due and payable, in arrears, on the last day of the applicable Interest Period or, if an Event of Default has
occurred and is continuing, on the first day of each month during the Interest Period. Each Borrower hereby authorizes Agent, at its option, without prior notice to such Borrower, to charge such interest and Letter of Credit fees, all Lender Group
Expenses (as and when incurred), the charges, commissions, fees, and costs provided for in Section 2.3(e) (as and when accrued or incurred), the fees and charges provided for in Section 2.13 (as and when accrued or incurred),
and all installments or other payments due under any Loan Document to the applicable Borrowers’ Loan Account, which amounts thereafter shall constitute Advances hereunder and shall accrue interest at the rate then applicable to Advances
hereunder. Any interest not paid when due shall be compounded and shall thereafter constitute Advances hereunder and shall thereafter accrue interest at the rate then applicable to Advances hereunder. 
 (f) Computation. All interest and fees chargeable under the Loan Documents shall be computed on the basis of a 360 day
year for the actual number of days elapsed. 
 (g) Intent to Limit Charges to Maximum Lawful Rate. In no
event shall the interest rate or rates payable under this Agreement, plus any other amounts paid in connection herewith, exceed the highest rate permissible under any law that a court of competent jurisdiction shall, in a final determination, deem
applicable. Borrowers and the Lender Group, in executing and delivering this Agreement, intend legally to agree upon the rate or rates of interest and manner of payment stated within it; provided, however, that, anything contained
herein to the contrary notwithstanding, if said rate or rates of interest or manner of payment exceeds the maximum allowable under applicable law, then, ipso facto, as of the date of this Agreement, Borrowers are and shall be liable only for
the payment of such maximum as allowed by law, and payment received from Borrower in excess of such legal maximum, whenever received, shall be applied to reduce the principal balance of the Obligations to the extent of such excess or held as Cash
Collateral for the Secured Obligations in Agent’s Permitted Discretion. 
  

 48 

 2.9. Cash Management; Collection of Accounts. 
 (a) Borrowers shall (i) establish and maintain cash management services of a type and on terms reasonably satisfactory
to Agent at one or more of the banks set forth on Schedule 2.9 (each a “Cash Management Bank”), and (ii) at all times maintain a Restricted Account. Immediately after the Restatement Date, Borrowers shall deposit all
Collections in respect thereof to such Restricted Account or into one of the DDAs set forth on Schedule 2.9 (a “Cash Management Account”) subject to the requirements of this Section 2.9. Borrowers, Agent, and the
Restricted Account Bank shall enter into the Restricted Account Agreement, in form and substance satisfactory to Agent in its Permitted Discretion, which among other things shall provide for the opening of the Restricted Account for the deposit of
Collections at the Restricted Account Bank. Each Borrower agrees that all Collections and other amounts received by such Borrower from any Account Debtor or any other source immediately upon receipt shall be deposited (i) into the Restricted
Account or (ii) into a Cash Management Account. Each Cash Management Bank shall be directed by the Borrowers via irrevocable written notice in form and substance satisfactory to the Agent in its Permitted Discretion to remit all such
Collections and such other amounts no less frequently than once each day to, and only to, the Restricted Account. The Restricted Account Agreement and arrangement contemplated thereby shall not be modified by a Borrower without the prior written
consent of Agent. Upon the terms and subject to the conditions set forth in the Restricted Account Agreement, so long as no Cash Dominion Event has occurred and is continuing, Borrowers shall have the right to have the entire collected balance in
the Restricted Account transferred, on a daily basis, to the Operating Account (as defined in the Restricted Account Agreement), and upon the occurrence and during the continuation of Cash Dominion Event and direction by Agent to the Restricted
Account Bank, amounts on deposit in the Restricted Account may be retained therein or transferred, all at the direction of the Agent, or, the Restricted Account may be transferred, at the direction of the Agent, into the name of Agent and all
amounts received in the Restricted Account wired each Business Day into an account (the “Agent’s Account”) maintained by Agent at a depositary selected by Agent. 
 (b) Upon the occurrence and during the continuation of any Cash Dominion Event, Borrowers hereby authorize Agent to, without
further notice to or consent from Borrowers, date the Credit Card Notifications and DDA notifications delivered to Agent by Borrowers pursuant to Section 6.25 hereof and deliver such Credit Card Notifications and DDA notifications to the
applicable Credit Card Processors and DDA institutions. Borrowers shall not attempt to change any direction or designation set forth in any Credit Card Notification or DDA notification regarding payment of charges or funds on deposit without the
prior written consent of Agent. As a condition to the termination of any Cash Dominion Period, Borrowers shall deliver replacement original executed and undated Credit Card Notifications and DDA notifications to Agent, to be used by the Agent
pursuant to the first sentence of this Section 2.9(b) in the event a subsequent Cash Dominion Event occurs. Borrowers further agree to deliver such replacement Credit Card Notifications and DDA notifications to Agent in the event that the Agent
notifies the Borrowers that any such notifications are lost, mutilated, or destroyed. 
 2.10. Crediting
Payments; Application of Collections. The receipt of any Collections by Agent immediately shall be applied provisionally to reduce the Obligations outstanding under Section 2.1, but shall not be considered a payment on account unless
such Collection item is a wire transfer of immediately available federal funds and is made to the Agent’s Account or unless and until such Collection item is honored when presented for payment. Should any Collection item not be honored when
presented for payment, then Borrowers shall be deemed not to have made such payment,

  

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and interest shall be recalculated accordingly. Anything to the contrary contained herein notwithstanding, any Collection item shall be deemed received by Agent only if it is received into the
Agent’s Account on a Business Day on or before 11:00 a.m. California time. If any Collection item is received into the Agent’s Account on a non-Business Day or after 11:00 a.m. California time on a Business Day, it shall be deemed to have
been received by Agent as of the opening of business on the immediately following Business Day. 
 2.11.
Designated Account. Agent and the Lender Group are authorized to make the Advances and to issue the Letters of Credit under this Agreement based upon telephonic or other instructions received from anyone purporting to be an Authorized Person, or
without instructions if pursuant to Section 2.8(e). Borrowers agree to establish and maintain a single Designated Account with the Designated Account Bank (which at all times shall be Restricted Account) for the purpose of receiving the
proceeds of the Advances requested by Borrowers and made by the Lender Group hereunder. Unless otherwise agreed by Agent and Borrowers, any Advance requested by Borrowers and made by the Lender Group hereunder shall be made to the Designated
Account. 
 2.12. Maintenance of Loan Account; Statements of Obligations. At the request of Borrowers, to
facilitate and expedite the administration and accounting processes and procedures of their borrowings under this Agreement, Agent shall maintain a single account on its books in the names of Borrowers (the “Loan Account”) on which
Borrowers will be charged with all Advances made by the Lender Group to Borrowers or for Borrowers’ account, including, accrued interest, Lender Group Expenses, and any other payment Obligations of Borrowers. In accordance with
Section 2.10, the Loan Account will be credited with all payments received by Agent from any Borrowers or for any Borrowers’ account. Agent shall render one statement regarding the Loan Account to Poolmart on behalf of Borrowers,
including principal, interest, fees, and including an itemization of all charges and expenses constituting the Lender Group Expenses owing, and such statements shall be conclusively presumed to be correct and accurate and constitute an account
stated between Borrowers and the Lender Group unless, within 30 days after receipt thereof by Borrowers, Borrowers shall deliver to Agent written objection thereto describing the error or errors contained in any such statements. Each Borrower hereby
expressly agrees and acknowledges that Agent shall have no obligation to account separately to such Borrower. 
 2.13. Fees. Borrowers shall pay to Agent the following fees and charges, which fees and charges shall be non-refundable when paid (irrespective of whether this Agreement is terminated thereafter): 
 (a) Fee Letter. As and when due and payable under the terms of the Agent’s Fee Letter, Borrowers shall pay to
Agent the fees set forth in the Agent’s Fee Letter. 
 (b) Unused Line Fee. On the first day of each
calendar quarter during the term of this Agreement during which: (i) Average Quarterly Availability for the immediately preceding calendar quarter (or portion thereof during which this Agreement was in effect) was less than fifty percent (50%),
an unused line fee in an amount equal to 0.50% per annum

  

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multiplied by the Average Quarterly Availability during such quarter, and (ii) Average Quarterly Availability for the immediately preceding calendar quarter (or portion thereof during which
this Agreement was in effect) was equal to or greater than fifty percent (50%), an unused line fee in an amount equal to seventy-five percent (0.75%) per annum multiplied by the Average Quarterly Availability during such quarter. 
 (c) Financial Examination and Appraisal Fees. For the separate account of Agent, Borrowers shall, to the extent
provided in Section 4.7 hereof, pay all reasonable audit fees plus out-of-pocket expenses, for each audit of the Collateral performed by or at the request of Agent (excluding, in any event, the cost of appraisal of Inventory), or the
actual reasonable charges paid or incurred by Agent if it elects to employ the services of one or more third Persons to perform financial audits of Borrowers (excluding, in any event, the cost of appraisal of Inventory). 
 2.14. Eurodollar Rate Loans. Any other provisions herein to the contrary notwithstanding, the following provisions
shall govern with respect to Eurodollar Rate Loans as to the matters covered: 
 (a) Borrowing; Conversion;
Continuation. Borrowers may from time to time, on or after the Restatement Date (and subject to the satisfaction of the requirements of Sections 3.1 and 3.2), request in a written or telephonic communication with Agent:
(i) Advances made up of Eurodollar Rate Loans; (ii) that Base Rate Loans be converted into Eurodollar Rate Loans; or (iii) that existing Eurodollar Rate Loans continue for an additional Interest Period. Any such request shall specify
the aggregate amount of the requested Eurodollar Rate Loans, the proposed Funding Date therefor (which shall be a Business Day, and with respect to continued Eurodollar Rate Loans shall be the last day of the Interest Period of the existing
Eurodollar Rate Loans being continued), and the proposed Interest Period (in each case subject to the limitations set forth below). Eurodollar Rate Loans may only be made, continued, or extended if, as of the proposed Funding Date therefor, each of
the following conditions is satisfied: 
 (i) no Event of Default exists; 
 (ii) no more than five Interest Periods would be in effect at any one time; 
 (iii) the amount of each Eurodollar Rate Loan borrowed, converted, or continued must be in an amount not less than $500,000
and integral multiples of $100,000 in excess thereof; 
 (iv) Agent shall have determined that the Interest
Period or Adjusted Eurodollar Rate is available to it and can be readily determined as of the date of the request for such Eurodollar Rate Loan by Borrowers; and 
 (v) Agent shall have received such request at least two Business Days prior to the proposed Funding Date therefor.

 Any request by Borrowers to borrow Eurodollar Rate Loans, to convert Base Rate Loans to Eurodollar Rate
Loans, or to continue any existing Eurodollar Rate Loans shall be irrevocable, except to the extent that the Agent shall determine under Section 2.14(a), or as to any Lender that determines under Section 2.15, that such
Eurodollar Rate Loans cannot be made or continued. 
  

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 (b) Determination of Interest Period. By giving notice as set forth
in Section 2.14(a), Borrowers shall select an Interest Period for such Eurodollar Rate Loan. The determination of the Interest Period shall be subject to the following provisions: 
 (i) in the case of immediately successive Interest Periods, each successive Interest Period shall commence on the day on
which the next preceding Interest Period expires; 
 (ii) if any Interest Period would otherwise expire on a day
which is not a Business Day, the Interest Period shall be extended to expire on the next succeeding Business Day; provided, however, that if the next succeeding Business Day occurs in the following calendar month, then such Interest Period shall
expire on the immediately preceding Business Day; 
 (iii) if any Interest Period begins on the last Business
Day of a month, or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period, then the Interest Period shall end on the last Business Day of the calendar month at the end of such Interest
Period; and 
 (iv) Borrowers may not select an Interest Period which expires later than the Maturity Date.

 (c) Automatic Conversion. Any Eurodollar Rate Loan shall automatically convert to a Base Rate Loan upon
the last day of the applicable interest Period, unless Agent has received a request to continue such Eurodollar Rate Loan at least two Business Days prior to the end of such Interest Period in accordance with the terms of
Section 2.14(a). 
 2.15. Illegality. Any other provision herein to the contrary
notwithstanding, if the adoption of or any change in any Requirement of Law or in the interpretation or application thereof by a Governmental Authority made subsequent to the Closing Date shall make it unlawful for any Lender to make or maintain
Eurodollar Rate Loans as contemplated by this Agreement, (a) the obligation of such Lender hereunder to make Eurodollar Rate Loans, continue Eurodollar Rate Loans as such, and convert Base Rate Loans to Eurodollar Rate Loans shall forthwith be
suspended and (b) such Lender’s then outstanding Eurodollar Rate Loans, if any, shall be converted automatically to Base Rate Loans on the respective last days of the then current Interest Periods with respect thereto or within such
earlier period as required by law; provided, however, that before making any such demand, each Lender agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions and so long as such efforts would not
be disadvantageous to it, in its reasonable discretion, in any legal, economic, or regulatory manner) to designate a different lending office if the making of such a designation would allow such Lender or its lending office to continue to perform
its obligations to make Eurodollar Rate Loans. If any such conversion of a Eurodollar Rate Loan occurs on a day

  

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which is not the last day of the then current Interest Period with respect thereto, Borrowers shall pay to such Lender such amounts, if any, as may be required pursuant to
Section 2.17. If circumstances subsequently change so that such Lender shall determine that it is no longer so affected, such Lender will promptly notify Agent and Borrowers, and upon receipt of such notice, the obligations of such
Lender to make or continue Eurodollar Rate Loans or to convert Base Rate Loans into Eurodollar Rate Loans shall be reinstated. 
 2.16. Requirements of Law. 
 (a) If the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof by a Governmental Authority made subsequent to the Closing Date or compliance by any Lender with any request or directive (whether or not having the force of law) from
any central bank or other Governmental Authority made subsequent to the Closing Date; 
 (i) shall subject such
Lender to any tax, levy, charge, fee, reduction, or withholding of any kind whatsoever with respect to Eurodollar Rate Loans, or change the basis of taxation of payments to such Lender in respect thereof (except for (x) the establishment of a
tax based on the net income of such Lender or changes in the rate of tax on the net income of such Lender and (y) United States withholding taxes in respect of payments made to any Lender that is organized under the law of any jurisdiction
other than the United States or a political subdivision thereof); 
 (ii) shall in respect of Eurodollar Rate
Loans impose, modify or hold applicable any reserve, special deposit, compulsory loan, or similar requirement against assets held by, deposits or other liabilities in or for the account of, Advances or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender; or 
 (iii) shall impose on such Lender any other condition
with respect to Eurodollar Rate Loans; 
 and the result of any of the foregoing is to increase the cost to such Lender, by an
amount which such Lender deems to be material, of making, converting into, continuing, or maintaining Eurodollar Rate Loans or to increase the cost to such Lender in respect of Eurodollar Rate Loans, by an amount which such Lender deems to be
material, or to reduce any amount receivable hereunder in respect of Eurodollar Rate Loans, or to forego any other sum payable thereunder or make any payment on account thereof in respect of Eurodollar Rate Loans, then, in any such case, if such
Lender is demanding payment of additional amounts in respect thereof by borrowers generally that are reasonably similarly situated with the Borrowers, Borrowers shall promptly pay to Agent (for the benefit of such Lender), upon such Lender’s
demand, any additional amounts necessary (without duplication of any other amounts paid by Borrowers with respect thereto or reserved by Agent pursuant to the definition of Adjusted Euro-dollar Rate) to compensate such Lender for such increased cost
or reduced amount receivable; provided, however, that before making any such demand, each Lender agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions and so long as such efforts would not be
disadvantageous to it, in its reasonable discretion, in any legal, economic, or

  

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regulatory manner) to designate a different Eurodollar lending office if the making of such designation would allow such Lender or its Eurodollar lending office to continue to perform its
obligations to make Eurodollar Rate Loans or to continue to fund or maintain Eurodollar Rate Loans and avoid the need for, or materially reduce the amount of, such increased cost; provided, further, that the Lender shall not be entitled to demand
payment of any such amount that is attributable to any period prior to 60 days before such demand is made. If a Lender becomes entitled to claim any additional amounts pursuant to this Section 2.16, such Lender shall promptly notify
Agent and Borrowers of the event by reason of which it has become so entitled. A certificate as to any additional amounts payable pursuant to this Section 2.16 submitted in reasonable detail by such Lender to Agent and Borrowers shall be
conclusive in the absence of manifest error. Within five Business Days after a Lender notifies Borrowers and Agent of any increased cost pursuant to the foregoing provisions of this Section 2.16, Borrowers may convert all Eurodollar Rate
Loans then outstanding into Base Rate Loans in accordance with Section 2.14 and, additionally, reimburse such Lender for any cost in accordance with Section 2.17. This covenant shall survive the termination of this Agreement
and the payment of the Advances and all other amounts payable hereunder for nine months following such termination and repayment. 
 (b) If a Lender shall have determined that the adoption of or any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof by a Governmental Authority
made subsequent to the Restatement Date or compliance by such Lender or any Person controlling such Lender with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made
subsequent to the Restatement Date does or shall have the effect of increasing the amount of capital required to be maintained or reducing the rate of return on such Lender’s or such Person’s capital as a consequence of its obligations
hereunder to a level below that which such Lender or such Person could have achieved but for such change or compliance (taking into consideration such Lender’s or such Person’s policies with respect to capital adequacy) by an amount deemed
by such Lender to be material, then from time to time, after submission by such Lender to Agent and Borrowers of a prompt written request therefor accompanied by a certified calculation in reasonable detail, Borrowers shall pay to Agent (for the
benefit of such Lender) such additional amount or amounts as will compensate such Lender or such Person for such reduction. This covenant shall survive the termination of this Agreement and the payment of the Advances and all other amounts payable
hereunder for nine months following such termination and repayment. 
 2.17. Indemnity. Borrowers agree to
indemnify Agent and each Lender and to hold Agent and Lenders harmless from any loss or expense which Agent or any Lender may sustain or incur as a consequence of (a) default by Borrowers in payment when due of the principal amount of or
interest on any Eurodollar Rate Loan, (b) default by Borrowers in making a Borrowing of, conversion into, or continuation of Eurodollar Rate Loans after Borrowers have given a notice requesting the same in accordance with the provisions of this
Agreement, (c) default by Borrowers in making any prepayment of a Eurodollar Rate Loan after Borrowers have given a notice thereof in accordance with the provisions of this Agreement, or (d) the making of a prepayment of Eurodollar Rate
Loans on a day which is not the last day of an Interest Period with respect thereto (whether due to the termination of this Agreement, upon an Event of Default, or otherwise), including, in each case, any such loss or expense (but excluding loss of
margin or anticipated profits)

  

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arising from the reemployment of funds obtained by it or from fees payable to terminate the deposits from which such funds were obtained; provided, however, that Agent or any Lender, if
requesting indemnification, shall have delivered to the Borrowers a certificate as to the amount of such loss or expense, which certificate shall be conclusive in the absence of manifest error. Calculation of all amounts payable to any such Lender
under this Section 2.17 shall be made as though such Lender had actually funded the relevant Eurodollar Rate Loan through the purchase of a deposit bearing interest at the Eurodollar Rate in an amount equal to the amount of such
Eurodollar Rate Loan and having a maturity comparable to the relevant Interest Period; provided, however, that each Lender may fund each of the Eurodollar Rate Loans in any manner it sees fit, and the foregoing assumption shall be utilized only for
the calculation of amounts payable under this Section 2.17. This covenant shall survive the termination of this Agreement and the payment of the Obligations hereunder. 
 2.18. Increase in Commitments. 
 (a) Request for Increase. The Borrowers may make a one time request by written notice to the Agent (which shall
promptly notify the Lenders and Issuing Bank) that the Maximum Commitment Amount be increased by an aggregate amount of up to $25,000,000 (the “Requested Increased Commitment Amount”). At the time of sending such notice, the
Borrowers (in consultation with the Agent) shall specify the time period within which each Lender is requested to respond (which shall in no event be less than thirty days from the date of delivery of such notice to the Agent). 
 (b) WFRF Right of First Refusal. Upon such request to increase the Maximum Commitment Amount, WFRF shall have the
right (but not the obligation) to increase its Commitment by an amount equal to the lower of the Requested Increased Commitment Amount or an amount identified by WFRF in written notice to the Borrowers and Agent (it being understood that WFRF may or
may not elect to increase its Commitment in its sole discretion). WFRF shall make its election within ten (10) days after receipt of Borrowers’ notice under Section 2.18(a) by written notice to Borrowers through Agent. In the
event that WFRF does not so notify Borrowers on or before such tenth day, WFRF shall be deemed to have elected not to increase its Commitment. 
 (c) Additional Lenders. To achieve the full amount of any Requested Increased Commitment Amount, to the extent that WFRF declines to increase its Commitment, or declines to increase its Commitment
by the full Requested Increased Commitment Amount, Agent may arrange, with Borrowers’ consent, for any Affiliate of Bank of America or PNC Bank, National Association or other Eligible Assignees (each an “Additional Commitment
Lender”) to become a Lender hereunder and furnish a commitment equal to the Requested Increased Commitment Amount not accepted by WFRF, provided, however, that without the consent of the Agent, at no time shall the Commitment
of any Additional Commitment Lender be less than $10,000,000. The aggregate increased commitment amounts agreed to by WFRF and, if any, each Additional Commitment Lender shall constitute the “Increased Commitment Amount”.

  

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 (d) Conditions to Effectiveness of Commitment Increase. As a
condition precedent to the increase of the Maximum Commitment Amount by the Increased Commitment Amount, (i) the Borrowers shall deliver to the Agent a certificate of each Borrower dated as of the effective date of such increase (the
“Increase Effective Date”) signed by an Authorized Officer of such Borrower (A) certifying and attaching the resolutions adopted by the board of directors (or other applicable governing body) of such Borrower approving or
consenting to such increase in the Maximum Commitment Amount, and (B) certifying that, before and after giving effect to such increase in the Maximum Commitment Amount, the representations and warranties contained in Article 5 hereof and
the other Loan Documents are true and correct in all material respects on and as of the Increase Effective Date, except to the extent such representations or warranties expressly relate to an earlier date (in which case such representations and
warranties shall be true and correct in all material respects as of such earlier date); (ii) if applicable, the Borrowers, the Agent, and any Additional Commitment Lender shall have executed and delivered a joinder to the Loan Documents in such
form as the Agent shall reasonably require; (iii) the Borrowers shall have paid the fees to Agent owing to the Agent under the Fee Letter, and any Increased Commitment Fee payable to the Additional Commitment Lenders (with the understanding
that, whether or not WFRF is an Additional Commitment Lender it shall be entitled to receive for its own account a fee equal to the highest fee payable to any Additional Commitment Lender), as the Borrowers, the Agent, and the Additional Commitment
Lenders may agree; and (iv) no Default or Event of Default shall exist or result from the increase to the Maximum Commitment Amount. The Borrowers shall prepay any Advances outstanding on the Increase Effective Date (and pay any additional
amounts required pursuant to this Agreement) and may borrow on a non-ratable basis from any Lender or Additional Commitment Lender committed to a portion of the applicable Increased Commitment Amount, in each case to the extent necessary to keep the
outstanding Advances ratable with any revised Pro Rata Share arising from any nonratable increase in the Commitments under this Section. Each of the parties hereto hereby agrees that the Agent may take any and all further action as may be reasonably
necessary to ensure that all Advances in respect of Commitment Increases, when originally made, are included in each Borrowing of outstanding Advances on a pro rata basis. 
 (e) Effective Date and Allocations. If the Commitments are hereafter increased, the Agent (in consultation with the
Borrowers) shall determine the Increase Effective Date of the Increased Commitment Amount and the final allocation thereof among the Additional Commitment Lenders. The Agent shall promptly notify the Borrowers and the Lenders of such final
allocation and the Increase Effective Date, and on the Increase Effective Date (i) the Commitments under, and for all purposes of, this Agreement shall be increased by the aggregate amount of the Increased Commitment Amount, and (ii) the
applicable Schedule to the Agreement shall be deemed modified, without further action, to reflect the revised Commitments of the Lenders. 
  

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 3. CONDITIONS; TERM OF AGREEMENT. 
 3.1. Conditions Precedent to the Restatement Date. The occurrence of the Restatement Date is subject to the
fulfillment, to the satisfaction of Agent and its counsel, of each of the following conditions on or before the Restatement Date: 
 (a) The Restatement Date shall occur on or before September 30, 2009; 
 (b) The Loan Documents shall be effective to create in favor of the Agent a legal, valid and enforceable first (except for Permitted Liens entitled to priority under applicable law) security interest in and lien upon the Collateral for the
benefit of the Agent and the Lenders. All filings, recordings, deliveries of instruments and other actions necessary or desirable in the opinion of the Agent to protect and preserve such security interests shall have been duly effected. The Agent
shall have received evidence thereof in form and substance satisfactory to the Agent; 
 (c) Agent shall have
received each of the following documents, duly executed, and each such document shall be in full force and effect: 
  

	 	a.	this Agreement (with all exhibits and schedules attached); 

  

	 	b.	Revolving Credit Note for each Lender; 

  

	 	c.	Restricted Account Control Agreements; 

  

	 	e.	Intellectual Property Security Agreement; 

  

	 	f.	the Disbursement Letter; 

  

	 	h.	the Agent’s Fee Letter; 

  

	 	i.	the Payoff Letters; 

  

	 	j.	the Perfection Certificate of the Borrowers; and 

  

	 	k.	any other documents and agreements required by the Agent. 

 (d) Agent shall have received a certificate from the Secretary of each of the Borrowers attesting to the resolutions of each Borrower’s Board of Directors authorizing its execution, delivery, and
performance of this Agreement, the other Loan Documents and the transactions contemplated hereby to which such Borrower is a party and authorizing specific officers of such Borrower to execute the same; 
 (e) Agent shall have received copies of each Borrower’s Governing Documents, as amended, modified, or supplemented to
the Restatement Date, certified by the Secretary of such Borrower, each in form and substance satisfactory to Agent in its Permitted Discretion; 
 (f) Agent shall have received a certificate of status with respect to each Borrower, dated within 10 days of the Restatement Date, such certificate to be issued by the appropriate officer of the
jurisdiction of organization of such Borrower, which certificate shall indicate that such Borrower is in good standing in such jurisdiction; 
 (g) Agent shall have received certificates of status with respect to each Borrower, each dated within 15 days of the Restatement Date, such certificates to be issued by the appropriate officer of the
jurisdictions in which its failure to be duly qualified or licensed would constitute a Material Adverse Change, which certificates shall indicate that such Borrower is in good standing in such jurisdictions; 
  

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 (h) Agent shall have received a pro forma Compliance Certificate dated as of
the Restatement Date; 
 (i) Agent shall have received the Solvency Certificate and Agent shall otherwise be
satisfied, in its Permitted Discretion, with the capital structure of the Borrowers and their Affiliates; 
 (j)
Agent shall have received a certificate of insurance, together with the endorsements thereto, as are required by Section 6.10, the form and substance of which shall be satisfactory to Agent and its counsel in their Permitted Discretion;

 (k) Agent shall have received an opinion of Borrowers’ counsel with respect to this Agreement and the
other Loan Documents, in form and substance satisfactory to Agent in its Permitted discretion; 
 (l) Borrower
shall have paid all Lender Expenses incurred in connection with the transactions evidenced by this Agreement; 
 (m) Agent shall have received evidence satisfactory in Agent’s Permitted Discretion that the Borrowers have received all consents, licenses, approvals or evidence of other actions required by any Person, including any Governmental
Authority, in connection with the execution and delivery by the Borrowers of this Agreement or any other Loan Document or with the consummation of the transactions contemplated hereby and thereby, (other than intellectual property security interest
filings to be made on the Restatement Date); 
 (n) Agent shall have received an Officer’s Closing
Certificate dated as of the Restatement Date, the form and substance of which shall be satisfactory to Agent in its Permitted Discretion; 
 (o) Agent shall have received copies of the Senior Notes, Indenture, Parent Note Purchase Documents, the form of Parent Debentures, and any other documents evidencing any Indebtedness of Borrowers or
Parent, and the Management Agreement. 
 (p) No Material Adverse Change shall have occurred since the
September 30, 2008 financial statements delivered to the Agent; and 
 (q) All other documents and legal
matters in connection with the transactions contemplated by this Agreement shall have been delivered, executed, or recorded and shall be in form and substance satisfactory to Agent. 
  

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 3.2. Conditions Precedent to all Advances and all Letters of Credit.
The following shall be conditions precedent to all Advances and all Letters of Credit hereunder: 
 (a) the
representations and warranties contained in this Agreement and the other Loan Documents shall be true and correct in all respects on and as of the date of such extension of credit, as though made on and as of such date (except to the extent that
such representations and warranties relate solely to an earlier date); 
 (b) no Default or Event of Default
shall have occurred and be continuing on the date of such extension of credit, nor shall either result from the making thereof; 
 (c) no injunction, writ, restraining order, or other order of any nature prohibiting, directly or indirectly, the extending of such credit shall have been issued and remain in force by any Governmental
Authority against any Borrower, the Lender Group or any of their Affiliates; 
 (d) the amount of any requested
Advance or Letter of Credit shall not exceed the Availability at such time; and 
 (e) no Material Adverse Change
shall have occurred. 
 3.3. Term; Automatic Renewal. This Agreement shall become effective upon the
execution and delivery hereof by Borrowers and the Lender Group and shall continue in full force and effect for a term ending on September 30, 2012 (the “Maturity Date”) if not earlier terminated. The foregoing notwithstanding,
the Lender Group, upon the election of the Required Lenders, shall have the right to terminate the Lender Group’s obligations under this Agreement immediately and without notice upon the occurrence and during the continuation of an Event of
Default. 
 3.4. Effect of Termination. On the date of termination of this Agreement, all Obligations
(including contingent reimbursement obligations of Borrowers with respect to any outstanding Letters of Credit) immediately shall become due and payable without notice or demand. No termination of this Agreement, however, shall relieve or discharge
Borrowers or Borrowers’ duties, Obligations, or covenants hereunder, and the Lender Group’s continuing security interests in the Collateral shall remain in effect until all Obligations have been fully and finally discharged and the Lender
Group’s obligation to provide additional credit hereunder is terminated. 
 3.5. Early Termination or
Reduction of Commitments and Maximum Commitment Amount by Borrowers. The provisions of Section 3.3 that allow termination of this Agreement by Borrowers only on the Maturity Date notwithstanding, Borrowers have the option: at any
time upon at least 15 days prior written notice to Agent, to terminate this Agreement in full (but not in part) by paying to Agent (for the ratable benefit of the Lender Group), in cash, the Obligations (including depositing with Agent an amount
equal to 105% of the undrawn amount of the Letters of Credit, which Cash Collateral shall be returned to Borrowers by Agent net of the amount of all drawings under such Letters of Credit and all costs and expenses associated therewith), in full,
together with a fee (the “Early Termination Fee”) equal to the following amount: 
  

			
	 Effective Date of Termination
	  	 Early Termination Fee

	Prior to and including the second anniversary of the Restatement Date	  	0.50% of the Maximum Commitment Amount
		
	Thereafter	  	0.0%

  

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 3.6. Termination Upon Event of Default. If the Lender Group
terminates this Agreement upon the occurrence and during the continuation of an Event of Default which Agent has reasonably determined to be been caused intentionally by a Borrower, in view of the impracticability and extreme difficulty of
ascertaining actual damages and by mutual agreement of the parties as to a reasonable calculation of the Lender Group’s lost profits as a result thereof, Borrowers shall pay to Agent (for the ratable benefit of the Lender Group) upon the
effective date of such termination, a fee in an amount equal the Early Termination Fee. Such amount shall be presumed to be the amount of damages sustained by the Lender Group as the result of the early termination and Borrowers agree that it is
reasonable under the circumstances currently existing. The fee provided for in this Section 3.6, shall be deemed included in the Obligations. 
 4. CREATION OF SECURITY INTEREST. 
 4.1. Grant of
Security Interest. Each Borrower confirms that it has granted and, for the avoidance of doubt, hereby grants to Agent, for the benefit of the Lender Group and any Bank Product Provider to whom any Borrower owes Bank Product Obligations, a
continuing security interest in all of its right, title and interest in all currently existing and hereafter acquired or arising Collateral in order to secure prompt repayment of any and all Secured Obligations and in order to secure prompt
performance by such Borrower of each of its covenants and duties under the Loan Documents. The security interests granted to the Agent, for the benefit of the Lender Group and any Bank Product Provider, in the Collateral shall attach to all
Collateral without further act on the part of the Agent, Lender Group or Borrowers. 
 4.2. Control of
Collateral. If from time to time any Collateral, having a value of $250,000 or more, as determined by Agent, including proceeds or supporting obligations, consists of property or rights of a Borrower in which the perfection or priority of the
Agent’s Liens is dependent upon or enhanced by Agent’s gaining control of such Collateral, Borrowers shall immediately notify Agent and, at Agent’s request, deliver the appropriate Restricted Account Control Agreements or take such
actions as may be necessary to give Agent control over such Collateral as provided in the Code; provided, however, that the Borrowers shall not be required to deliver Restricted Account Control Agreements for any DDAs maintained and administered in
compliance with Section 2.9 hereof. 
 4.3. Negotiable Collateral. In the event that any
Collateral, including proceeds, of value in excess of $250,000 is evidenced by or consists of Negotiable Collateral, Borrowers, immediately upon the request of Agent, shall endorse and deliver physical possession of such Negotiable Collateral to
Agent. 
  

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 4.4. Collection of Accounts, General Intangibles, and Negotiable
Collateral. At any time after the occurrence and during the continuation of an Event of Default, Agent or Agent’s designee may (a) notify customers or Account Debtors of any Borrower that the Accounts, General Intangibles, or
Negotiable Collateral of such Borrower have been assigned to Agent for the benefit of the Lender Group or that Agent for the benefit of the Lender Group has a security interest therein, and (b) collect the Accounts, General Intangibles, and
Negotiable Collateral of such Borrower directly and charge the collection costs and expenses to the Loan Account. After the occurrence and during the continuation of an Event of Default, each Borrower agrees that it will hold in trust for the Lender
Group, as the Lender Group’s trustee, any Collections that it receives and immediately will deliver said Collections to Agent in their original form as received by such Borrower. 
 4.5. Delivery of Additional Documentation Required. At any time upon the request of Agent, Borrowers shall execute and
deliver to Agent all continuation financing statements, fixture filings, security agreements, pledges, assignments, control agreements, affidavits, reports, notices, schedules of accounts, letters of authority, and bailee acknowledgments, each in
form and substance satisfactory to Agent and hereby authorizes Agent to file any financing statements, amendments to financing statements, continuation to financing statements as deemed necessary or desirable by Agent and, after the occurrence and
during the continuation of an Event of Default, endorsements of certificates of title, applications for title, and, in any event (whether prior to or after the occurrence of an Event of Default), all other documents that Agent reasonably may
request, each in form satisfactory to Agent, to perfect and continue perfected the Liens of the Lender Group (and their applicable Affiliates) in the Collateral, and in order to fully consummate all of the transactions contemplated hereby and under
the other Loan Documents. To the maximum extent permitted by Applicable Law, each Borrower authorizes Agent to execute any such documents in such Borrower’s name and authorizes the Agent to file such documents in any appropriate filing office.
Without limiting the foregoing, Borrowers shall (a) give the Agent prompt written notice of any Commercial Tort Claim of Borrowers not specifically identified on Schedule 5.10(b) and any Letter of Credit Right of Borrowers. Borrowers
shall grant to the Agent, for the benefit of the Lender Group (and their applicable Affiliates), a security interest in any such Commercial Tort Claim or Letter of Credit Right and the proceeds thereof, and (b) on such periodic basis as the
Agent shall require, (i) provide Agent with a report of all new patents, registered copyrights, registered trademarks and licenses with respect to any of the foregoing (ii) cause to be prepared, executed, and delivered to Agent
supplemental schedules to the applicable Loan Documents to identify such patents, registered copyrights and registered trademarks as being subject to the security interests created thereunder, and (iii) execute and deliver to Agent at
Agent’s request supplemental intellectual property security agreements with respect to such patents, registered trademarks or registered copyrights for filing with the appropriate filing office. 
 4.6. Power of Attorney. Each Borrower hereby irrevocably makes, constitutes, and appoints Agent (and any of
Agent’s officers, employees, or agents designated by Agent) as such Borrower’s true and lawful attorney, with power to (a) if such Borrower refuses to, or fails timely to execute and deliver any of the documents described

  

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in Section 4.5, sign the name of such Borrower on any of the documents described in Section 4.5, (b) at any time that an Event of Default has occurred and is
continuing, sign such Borrower’s name on any invoice or bill of lading relating to any Account of such Borrower, drafts against Account Debtors, schedules and assignments of Accounts of such Borrower, verifications of Accounts of such Borrower,
and notices to Account Debtors, (c) send requests for verification of Accounts, (d) endorse such Borrower’s name on any Collection item that may come into the Lender Group’s possession, (e) at any time that an Event of
Default has occurred and is continuing, notify the post office authorities to change the address for delivery of such Borrower’s mail to an address designated by Agent, to receive and open all mail addressed to such Borrower, and to retain all
mail relating to the Collateral of such Borrower and forward all other mail to such Borrower, (f) at any time that an Event of Default has occurred and is continuing, make, settle, and adjust all claims under such Borrower’s policies of
insurance and make all determinations and decisions with respect to such policies of insurance, and (g) at any time that an Event of Default has occurred and is continuing, settle and adjust disputes and claims respecting the Accounts, Chattel
Paper or General Intangibles of such Borrower directly with Account Debtors, for amounts and upon terms that Agent determines to be reasonable, and Agent may cause to be executed and delivered any documents and releases that Agent determines to be
necessary. The appointment of Agent as such Borrower’s attorney, and each and every one of Agent’s rights and powers, being coupled with an interest, is irrevocable until all of the Obligations have been fully and finally repaid and
performed and the Lender Group’s obligation to extend credit hereunder is terminated. 
 4.7. Right to
Inspect. Unless an Event of Default shall have occurred and be continuing, Agent (through any of its officers, employees, or agents) shall have the right, (i) upon reasonable notice to the Borrowers, to inspect Borrowers’ Books and to
conduct an audit and (ii) to conduct an appraisal and inventory of the Collateral in order to verify Borrowers’ financial condition or the amount, quality, value, condition of or any other matter relating to, the Collateral at Agent’s
discretion (upon reasonable notice to the Borrowers). Following the occurrence and continuation of an Event of Default, the Agent (through any of its officers, employees, or agents) shall have the right to (i) conduct audits at Agent’s
discretion and (ii) conduct appraisals and inventory of the Collateral at Agent’s discretion in order to verify Borrowers’ financial condition or the amount, quality, value, condition of or any other matter relating to, the
Collateral. The Borrower shall reasonably cooperate with the Agent or its designees in the conduct of such inventories, appraisals and audits. 
 5. REPRESENTATIONS AND WARRANTIES. 
 In order to induce the Lender Group to enter into this
Agreement, each Borrower makes the following representations and warranties which shall be true, correct, and complete in all respects as of the date hereof and shall be true, correct, and complete in all respects as of the Restatement Date, and at
and as of the date of the making of each Advance or Letter of Credit made thereafter, and at and as of any Increase Effective Date as though made on and as of the date of such Advance or Letter of Credit and such Increase Effective Date (except to
the extent that such representations and warranties relate solely to an earlier date in which case such representations and warranties shall be true and correct in all material respects as of such earlier date) and such representations and
warranties shall survive the execution and delivery of this Agreement: 
 5.1. No Encumbrances. Each
Borrower has good and indefeasible title to all of such Borrower’s property comprising the Collateral, free and clear of Liens except for Permitted Liens. 
  

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 5.2. Accounts. Unless otherwise indicated in writing to Agent
reasonably promptly after the creation thereof, and except to the extent of reserves for returns and bad debts as reflected in the Borrowers’ Books and established in the ordinary course of Borrowers’ business, each Account of each
Borrower is genuine and in all material respects what it purports to be and arises out of a completed, bona fide sale and delivery of Goods by such Borrower in the ordinary course of business. 
 5.3. Inventory. The Borrowers have established such reserves with respect to their Inventory as are adequate in
accordance with GAAP, and such reserves are reflected on their most recent consolidated balance sheet delivered pursuant to Section 6.3; such Inventory is owned solely by a Borrower and such Borrower has good title thereto, subject to no
Liens that are prohibited hereby; is located at one of the locations set forth on Schedule E-1, (as amended from time to time in accordance with Section 6.12) or in transit in the United States to such a location; such Inventory,
if located at a distribution center or warehouse of a Borrower, is subject to a Collateral Access Agreement; and such Inventory is subject to a valid and perfected first priority security interest in favor of the Lender Group. 
 5.4. Equipment. All of the Equipment of Borrowers is used or held for use in Borrowers’ business and is fit for
such purposes. 
 5.5. Location of Inventory and Equipment. The Inventory and Equipment of Borrowers are
not stored with a bailee, warehouseman, or similar party (without delivery to Agent of a Collateral Access Agreement or Agent’s prior written consent) and are located only at the locations identified on Schedule 6.12 or otherwise
permitted by Section 6.12. 
 5.6. Inventory Records. Consistent with past practices, each
Borrower keeps records itemizing and describing the kind, type and quantity of its Inventory and the Net Book Value thereof. 
 5.7. Legal Status. As of the Restatement Date, (a) each Borrower’s exact legal name is that indicated on the signature page hereof; (b) such Borrower is an organization of the type,
and is organized in the jurisdiction, set forth in the Perfection Certificate; (c) the Perfection Certificate accurately sets forth such Borrower’s organizational identification number or accurately states that such Borrower has none;
(d) the Perfection Certificate accurately sets forth such Borrower’s chief executive office, as well as such Borrower’s mailing address, if different; (e) all other information set forth on the Perfection Certificate pertaining
to such Borrower is accurate and complete as of the Restatement Date; and (f) there has been no change in any of such information from the date on which the Perfection Certificate was signed by such Borrower to the Restatement Date. 

 

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 5.8. Due Organization and Qualification; Subsidiaries. 
 (a) Each Borrower is duly organized and existing and in good standing under the laws of the jurisdiction of its incorporation
and qualified and licensed to do business in, and in good standing in, any state where the failure to be so licensed or qualified reasonably could be expected to cause a Material Adverse Change. 
 (b) Set forth on Schedule 5.8 is a complete and accurate description of the authorized capital Stock of each Borrower,
by class, and, as of the Restatement Date, a description of the number of shares of each such class that are issued and outstanding. Other than as described on Schedule 5.8, there are no subscriptions, options, warrants, or calls relating to
any shares of such Borrower’s capital Stock, including any right of conversion or exchange under any outstanding security or other instrument. Poolmart is not subject to any obligation (contingent or otherwise) to repurchase or otherwise
acquire or retire any shares of its capital Stock or any security convertible into or exchangeable for any of its capital Stock. Set forth on Schedule 5.8 is a complete and accurate list of each Borrower’s direct and indirect
Subsidiaries, showing: (i) the jurisdiction of their incorporation; (ii) the number of shares of each class of common and preferred stock authorized for each of such Subsidiaries; and (iii) the number and the percentage of the
outstanding shares of each such class owned directly or indirectly by such Borrower. 
 (c) Except as set forth
on Schedule 5.8, no capital stock (or any subscriptions, securities, instruments, warrants, options, purchase rights, conversion or exchange rights, calls, commitments or claims of any character convertible into or exercisable for capital
stock) of any direct or indirect Subsidiary of any Borrower is subject to the issuance of any security, instrument, warrant, option, purchase right, conversion or exchange right, call, commitment or claim of any right, title, or interest therein or
thereto. 
 5.9. Due Authorization; No Conflict. 
 (a) The execution, delivery, and performance by each Borrower of this Agreement and the Loan Documents to which it is a party
have been duly authorized by all necessary corporate action. 
 (b) The execution, delivery, and performance by
each Borrower of this Agreement and the Loan Documents to which it is a party do not and will not (i) violate any provision of federal, state, or local law or regulation (including Regulations T, U, and X of the Federal Reserve Board)
applicable to such Borrower, the Governing Documents of such Borrower, or any order, judgment, or decree of any court or other Governmental Authority binding on such Borrower, (ii) conflict with, result in a breach of, or constitute (with due
notice or lapse of time or both) a default under the Indenture, any other material contractual obligation or material lease of such Borrower, (iii) result in or require the creation or imposition of any Lien of any nature whatsoever upon any
properties or assets of such Borrower, other than Permitted Liens, or (iv) require any approval of stockholders or any approval or consent of any Person under any material contractual obligation of such Borrower. 
  

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 (c) Other than the filing of appropriate financing statements, fixture
filings, and mortgages, the execution, delivery, and performance by each Borrower of this Agreement and the Loan Documents to which such Borrower is a party do not and will not require any registration with, consent, or approval of, or notice to, or
other action with or by, any federal, state, foreign, or other Governmental Authority or other Person. 
 (d)
This Agreement and the Loan Documents to which any Borrower is a party, and all other documents contemplated hereby and thereby, when executed and delivered by such Borrower will be the legally valid and binding obligations of such Borrower,
enforceable against such Borrower in accordance with their respective terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting
creditors’ rights generally. 
 (e) The Liens granted by each Borrower to Agent (for the benefit of the
Lender Group) in and to its properties and assets pursuant to this Agreement and the other Loan Documents are validly created, perfected, and first priority Liens, subject only to Permitted Liens. 
 5.10. Litigation. 
 (a) There are no actions or proceedings pending by or against any Borrower before any court or administrative agency and no Borrower has any knowledge or belief of any pending, threatened, or imminent
litigation, governmental investigations, or claims, complaints, actions, or prosecutions involving any Borrower or any guarantor of the Obligations, except for: (i) ongoing collection matters in which a Borrower is the plaintiff,
(ii) matters disclosed on Schedule 5.10(a); and (iii) matters that would not reasonably be expected to cause a Material Adverse Change. 
 (b) Schedule 5.10(b) lists all of the Borrower’s Commercial Tort Claims existing as of the date hereof. 
 5.11. No Material Adverse Change. All of Poolmart’s consolidated financial statements that have been delivered to
the Lender Group have been prepared in accordance with GAAP (except, in the case of unaudited financial statements, for the lack of footnotes and being subject to year-end audit adjustments) and fairly present Poolmart’s consolidated financial
condition as of the date thereof and results of operations for the period then ended. There has not been a Material Adverse Change on or before the Restatement Date with respect to Borrowers (taken as a whole) since the date of the latest financial
statements submitted to the Lender Group on or before the Restatement Date. 
 5.12. Solvency; Borrowers are
Solvent. No transfer of property is being made by any Borrower and no obligation is being incurred by any Borrower in connection with the transactions contemplated by this Agreement or the other Loan Documents with the intent to hinder, delay,
or defraud either present or future creditors of any Borrower. No transfer of property is being made by the Borrowers without receiving a reasonably equivalent value in exchange for such transfer and the Borrowers’ remaining assets are not
unreasonably small in relation to their businesses. The Borrowers are Solvent on a consolidated basis. 
  

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 5.13. Employee Benefits. Each Borrower and each Subsidiary of a
Borrower are in compliance in all material respects with all applicable provisions of ERISA; each Borrower and each such Subsidiary have not violated in any material respect any provision of any Benefit Plan maintained or contributed to by Borrower
or any such Subsidiary; no Reportable Event as defined in ERISA has occurred and is continuing with respect to any Benefit Plan initiated by a Borrower or any such Subsidiary; Borrowers and each Subsidiary of a Borrower have met their minimum
funding requirements under ERISA with respect to each Benefit Plan; and each Benefit Plan will be able to fulfill its benefit obligations as they come due in accordance with the Benefit Plan documents and under GAAP. 
 5.14. Environmental Condition. Except as set forth on Schedule 5.14 to the best of Borrowers’ knowledge,
Borrowers and each Subsidiary of a Borrower are in compliance in all material respects with all applicable environmental, hazardous waste, health, and safety statutes and regulations governing their operations and/or properties or relating to the
disposal, handling, production, storage, transport or release of Hazardous Materials. To the best of Borrowers’ knowledge, none of Borrowers’ properties or assets has ever been used by Borrowers in the disposal of, or to produce, store,
handle, treat, release, or transport, any Hazardous Materials, where such production, storage, handling, treatment, release or transport was in violation, in any material respect, of applicable Environmental Law, (b) to Borrowers’
knowledge, none of Borrowers’ properties or assets have ever been designated or identified in any manner pursuant to any environmental protection statute as a Hazardous Materials disposal site, (c) none of Borrowers have received notice
that a Lien arising under any Environmental Law has attached to any revenues or to any Real Property owned or operated by Borrowers, and (d) to the best of Borrowers’ knowledge, none of the Borrowers have received a summons, citation,
notice, or directive from the Environmental Protection Agency or any other federal Provincial or state governmental agency concerning any action by any Borrower resulting in the releasing or disposing of Hazardous Materials into the environment. To
the best of Borrowers’ knowledge, none of the operations of Borrowers or any Subsidiary of a Borrower are the subject of any federal or state investigation evaluating whether any remedial action involving a material expenditure is needed to
respond to a release of any Hazardous Material into the environment. To the best of Borrowers’ knowledge, no Borrower or any such Subsidiary has any material contingent liability in connection with any such release of Hazardous Materials into
the environment. 
 5.15. Taxes. 
 Borrowers have timely filed all Tax Returns required to be filed by Borrowers and all Taxes upon each Borrower or its properties, assets, income, and franchises (including real property Taxes and payroll
Taxes) have been paid prior to delinquency, except such Taxes that are the subject of a Permitted Protest. 
  

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 5.16. Foreign Asset Control Regulations. None of the requesting or
borrowing of the Advances, the requesting or issuance, extension or renewal of any Letters of Credit or the use of the proceeds of any thereof will violate the Trading With the Enemy Act (50 U.S.C. § 1 et seq., as amended) (the “Trading
With the Enemy Act”) or any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) (the “Foreign Assets Control Regulations”) or any enabling
legislation or executive order relating thereto (which for the avoidance of doubt shall include, but shall not be limited to (a) Executive Order 13224 of September 21, 2001 Blocking Property and Prohibiting Transactions With Persons Who
Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)) (the “Executive Order”) and (b) the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism
Act of 2001 (Public Law 107-56)). Furthermore, neither the Borrowers nor any of their Subsidiaries or other Affiliates (a) is or will become a “blocked person” as described in the Executive Order, the Trading With the Enemy Act or the
Foreign Assets Control Regulations or (b) engages or will engage in any dealings or transactions, or be otherwise associated, with any such “blocked person”. 
 5.17. Brokerage Fees. No Borrower has utilized the services of any broker or finder in connection with such
Borrower’s obtaining financing from the Lender Group under this Agreement and no brokerage commission or finders fee is payable by any Borrower in connection herewith. 
 5.18. Intellectual Property. Except as would not reasonably be expected to result in a Material Adverse Change, each
Borrower owns, or holds licenses in, all trademarks, trade names, copyrights, patents, patent rights, and licenses that are necessary to the conduct of its business as currently conducted. Attached to the Perfection Certificate is a true, correct,
and complete listing of all patents, patent applications, trademarks, trademark applications, copyrights, and copyright registrations as to which such Borrower is the owner or is an exclusive licensee. 
 5.19. Leases. Except as would not reasonably be expected to result in a Material Adverse Change, each Borrower enjoys
peaceful and undisturbed possession under all leases material to the business of such Borrower and to which such Borrower is a party or under which such Borrower is operating. 
 5.20. DDAs. The Perfection Certificate sets forth all of the DDAs of the Borrowers as of the date hereof, including,
with respect to each depositary (i) the name and address of that depositary, (ii) the account numbers of the accounts maintained with such depositary, and (iii) the purpose for which each deposit account is used (i.e., payroll,
benefits, collections, disbursement, etc.). 
 5.21. Credit Card Receipts. Schedule 5.21 sets forth
the Borrowers’ Credit Card Processors and all arrangements to which the Borrowers are a party with respect to the payment to the Borrowers of the proceeds of all credit card charges for sales by Borrowers. 
  

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 5.22. Indebtedness. Set forth on Schedule 5.22 is a true and
complete list of all Indebtedness of Borrower outstanding immediately prior to the Restatement Date that is to remain outstanding after the Restatement Date. Such Schedule accurately reflects the aggregate principal amount of such Indebtedness and
the principal terms thereof and whether (and to what extent) such Indebtedness is secured. 
 5.23. Complete
Disclosure. All factual information (taken as a whole) furnished by or on behalf of each Borrower in writing to the Agent, Issuing Bank, or Lenders (including all information contained in the Schedules hereto or in the other Loan Documents) for
purposes of or in connection with this Agreement, the other Loan Documents or any transaction contemplated herein or therein is (taken as a whole), and all other such factual information (taken as a whole) hereafter furnished by or on behalf of such
Borrower in writing to Agent, Issuing Bank, or Lenders will be, true, accurate and complete in all material respects on the date as of which such information is dated or certified. The Business Plan delivered to Agent and Lenders prior to the
Restatement Date is, and each additional Business Plan delivered to the Agent hereunder will be, on the date of its delivery, prepared in good faith based on assumptions believed by management of the Borrowers to be accurate and reasonable at the
time made, it being recognized by the Agent and the Lenders that such projections as to future events are not to be viewed as facts and that actual results during the period or periods covered by any such projections may differ from the projected
results and that such differences may be material. 
 5.24. Insurance. Schedule 5.24 annexed
hereto, is a schedule of all insurance policies owned by the Borrowers or under which any Borrower is the named insured. Each of such policies is in full force and effect. The coverage reflected on Schedule 5.24 satisfies the requirements of
Section 6.10. 
 5.25. Requirements of Law. To each Borrower’s knowledge, each Borrower
is in compliance with, and shall hereafter comply with and use its assets in compliance with, all requirements of law except where the failure of such compliance will not be reasonably likely to have a Material Adverse Change. No Borrower has
received any notice of any violation of any requirement of law (other than of a violation which would not be reasonably likely to have a Material Adverse Change) which violation has not been cured or otherwise remedied. 
 5.26. Investment Company Status. No Borrower is an “investment company” as defined in, or subject to
regulation under, the Investment Company Act of 1940. 
 5.27. No Margin Stock. No Borrower is engaged in
the business of extending credit for the purpose of purchasing or carrying any margin stock (within the meaning of Regulations U, T, and X of the Board of Governors of the Federal Reserve System of the United States). No part of the proceeds of any
Borrowing hereunder will be used at any time to purchase or carry any such margin stock or to extend credit to others for the purpose of purchasing or carrying any such margin stock. 
  

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 5.28. Preferred Stock. The “Preferred Stock” (as defined in
the Existing Loan Agreement) has been cancelled and all obligations of Poolmart with respect thereto have been satisfied in full. 
 5.29. In Transit Inventory. On the Restatement Date, substantially none of Borrowers’ Inventory consists of Inventory in-transit from any other country to the United States. 
 6. AFFIRMATIVE COVENANTS. 
 Each Borrower covenants and agrees that, so long as any credit hereunder shall be available and until full and final payment of the Obligations, such Borrower shall do all of the following: 
 6.1. Accounting System. Maintain a system of accounting that enables such Borrower to produce financial statements in
accordance with GAAP, consistent with past practices. 
 6.2. Collateral Reporting. At the request of the
Agent, provide Agent (and if so requested by Agent, with copies for each Lender) with the following documents at the following times in form satisfactory to Agent: (a) a detailed calculation of the Net Book Value of Inventory, including
Inventory mix by major category (including a separate parts inventory category), all in such form and detail as Agent may reasonably require, (b) a summary aging, by vendor, of such Borrower’s accounts payable and any book overdraft,
(c) a physical inventory report together with an inventory shrinkage reconciliation schedule based upon such count, (d) a reconciliation of the Borrowers’ general ledger to the perpetual inventory report, and (e) such other
reports as to the Collateral or the financial condition of such Borrower as Agent may reasonably request from time to time. 
 6.3. Financial Statements, Reports, Certificates. 
 (a)
Deliver to Agent: (i) as soon as available, but in any event within 30 days after the end of each month during each of Borrowers’ Fiscal years (or 45 days after end of the last month in each Fiscal quarter), a Borrower prepared
consolidated balance sheet, income statement, and, on a quarterly basis only, a statement of cash flow covering the Borrowers’ and their Subsidiaries operations during such period; and (ii) as soon as available, but in any event within 90
days after the end of each of the Borrowers’ Fiscal years, financial statements of Borrowers and their Subsidiaries for each such Fiscal year, audited by independent certified public accountants from a “Big 4” accounting firm or such
other accounting firm as is reasonably acceptable to Agent and certified, without any material qualifications, by such accountants to have been prepared in accordance with GAAP, together with a certificate of such accountants addressed to Agent
stating that such accountants do not have knowledge of the existence of any Default or Event of Default. Such audited financial statements shall include a consolidated balance sheet, profit and loss statement, and statement of cash flow and, if
prepared, such accountants’ letter to management. 
 (b) Together with the above, Borrowers also shall
deliver to Agent Borrowers’ Form 10-Q Quarterly Reports, Form 10-K Annual Reports, and Form 8-K Current Reports, and any other filings made by Borrowers with the Securities and Exchange Commission, if any, as soon as the same are filed, and any
other report reasonably requested by Agent relating to the financial condition of Borrowers. 
  

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 (c) Each month, together with the financial statements provided pursuant to
Section 6.3(a), Borrowers shall deliver to Agent a Compliance Certificate signed by its chief financial officer to the effect that: (i) all financial statements delivered or caused to be delivered to Agent hereunder have been
prepared in accordance with GAAP (except, in the case of unaudited financial statements, for the lack of footnotes and being subject to year-end audit adjustments) and fairly present the consolidated financial condition of the Borrowers and their
Subsidiaries, (ii) the representations and warranties of the Borrowers contained in this Agreement and the other Loan Documents are true and correct in all material respects on and as of the date of such certificate, as though made on and as of
such date (except to the extent that such representations and warranties relate solely to an earlier date), (iii) for each month that also is the date on which a financial covenant in Section 7.2 is to be tested, the Borrowers are
in compliance at the end of such period with the applicable financial covenants contained in Section 7.20 (and demonstrating such compliance in reasonable detail), (iv) in any month in which any principal amount of Indebtedness
arising under the Indenture is redeemed, a statement of the principal amount of such Indebtedness redeemed during such month and during the term hereof; and (v) on the date of delivery of such certificate to Agent there does not exist any
condition or event that constitutes a Default or Event of Default (or, in the case of clauses (i), (ii), or (iii), to the extent of any noncompliance, describing such non-compliance as to which he or she may have knowledge and what action such
Borrower has taken, is taking, or proposes to take with respect thereto). 
 (d) Poolmart shall, from time to
time, not more frequently than once in any year unless an Event of Default has occurred and is continuing, at the request of the Agent cause its independent certified public accountants to meet and confer with Agent, in the presence of management of
Poolmart, to discuss with Agent the Borrowers’ financial affairs. 
 (e) As soon as available, but in any
event within ninety (90) days after the last Business Day of each Fiscal year, copies of Borrowers’ Business Plan, for the forthcoming year, setting forth the Borrowers’ Projections, on a quarter-by-quarter basis, for the upcoming
Fiscal year, certified by the chief financial officer of Borrowers (in such officer’s capacity as such and not individually) as being prepared in good faith based on assumptions believed by management of the Borrowers to be reasonable at the
time made (it being recognized by the Lenders that such projections as to future events are not to be viewed as facts and that actual results during the period or periods covered by any such projections may differ from the projected results and that
such difference may be material). 
 (f) Upon the request of Agent, any other report reasonably requested
relating to the financial condition of the Borrowers. 
 6.4. Intentionally Omitted. 
 6.5. Intentionally Omitted. 
  

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 6.6. Returns. Cause returns of Inventory and allowances, if any, as
between such Borrower and its Account Debtors to be on the same basis and in accordance with the usual customary practices of such Borrower, as they exist at the time of the execution and delivery of this Agreement. 
 6.7. Title to Equipment. Upon Agent’s request after the occurrence and during the continuation of an Event of
Default, such Borrower immediately shall deliver to Agent, properly endorsed, any and all evidences of ownership of, certificates of title, or applications for title to any items of Equipment. 
 6.8. Maintenance. Maintain their properties that are necessary in the proper conduct of their business in good working
order and condition. Maintain the Equipment in good operating condition and repair (ordinary wear and tear excepted), and make all necessary replacements thereto so that the value and operating efficiency thereof shall at all times be maintained and
preserved. Other than those items of Equipment that constitute fixtures on the Restatement Date, such Borrower shall not permit any item of Equipment to become a fixture to real estate or an accession to other property, and such Equipment shall at
all times remain personal property. 
 6.9. Taxes. Cause all Taxes of such Borrower or any of its property
to be paid in full, before delinquency or before the expiration of any extension period, except to the extent that the validity of such assessment or tax shall be the subject of a Permitted Protest. Such Borrower shall make due and timely payment or
deposit of all such Taxes required of it by law, and will execute and deliver to Agent, on demand, appropriate certificates attesting to the payment thereof or deposit with respect thereto. Such Borrower will make timely payment or deposit of all
Taxes required of it by applicable laws, including those laws concerning F.I.C.A., F.U.T.A., state disability, and local, state, and federal income Taxes, and will, upon request, furnish Agent with proof satisfactory to Agent indicating that such
Borrower has made such payments or deposits. 
 6.10. Insurance. 
 (a) Maintain and keep in force, and cause each Subsidiary of such Borrower to maintain and keep in force, insurance of the
types and in amounts customarily carried in similar lines of business, including but not limited to fire, extended coverage, public liability, property damage, and workers’ compensation, carried with companies and in amounts reasonably
satisfactory to Agent, and deliver to Agent from time to time at Agent’s request certificates of insurance setting forth all insurance then in effect; provided, however, that (a) with respect to Borrowers’ and each such
Subsidiary’s commercial liability insurance, each Borrower and each such Subsidiary may maintain deductibles which do not exceed, in the aggregate, $500,000 per occurrence, (b) each Borrower and each such Subsidiary may self-insure for
workers’ compensation upon disclosure by Borrowers to Agent in writing, so long as such self-insurance program is instituted and maintained in compliance with all applicable laws, rules, and regulations, and (c) with respect to each
Borrower’s and each such Subsidiary’s fire and property damage insurance, each Borrower and each Subsidiary may maintain deductibles which do not exceed, in the aggregate, five percent (5%) of their combined net current assets per
occurrence. 
  

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 (b) Except as otherwise provided in (a) above, all hazard insurance and
such other insurance as Agent shall specify shall contain a California Form 438BFU (NS) mortgagee endorsement, or an equivalent endorsement satisfactory to Agent, showing Agent (for the ratable benefit of the Lenders) as sole loss payee thereof and
shall contain a waiver of warranties. Every policy of insurance referred to in this Section 6.10 shall contain an agreement by the insurer that it will not cancel such policy except after 30 days prior written notice to Agent (for the
ratable benefit of the Lenders) and that any loss payable thereunder shall be payable notwithstanding any act or negligence of such Borrower or the Lender Group which might, absent such agreement, result in a forfeiture of all or apart of such
insurance payment. 
 (c) Original policies or certificates thereof satisfactory to Agent evidencing such
insurance shall be delivered to Agent at least 30 days prior to the expiration of the existing or preceding policies. Such Borrower shall give Agent prompt notice of any loss covered by such insurance, and, after the occurrence and during the
continuation of an Event of Default, Agent shall have the right to adjust any loss. In such event, Agent shall have the exclusive right to adjust all losses payable under any such insurance policies without any liability to such Borrower whatsoever
in respect of such adjustments. Any monies received as payment for any loss under any insurance policy mentioned above (other than liability insurance policies) or as payment of any award or compensation for condemnation or taking by eminent domain,
shall be paid over to Agent to be disbursed to Borrower under staged payment terms reasonably satisfactory to the Agent for application to the cost of repairs, replacements, or restorations; provided, however that if a Default or Event of Default
has occurred and is continuing Agent may, in its Permitted Discretion, apply such funds to the prepayment of the Obligations. Any such repairs, replacements, or restorations shall be affected with reasonable promptness. 
 (d) Such Borrower shall not take out separate insurance concurrent in form or contributing in the event of loss with that
required to be maintained under this Section 6.10, unless Agent is included thereon as named insured with the loss payable to Agent (for the ratable benefit of Lenders) under a standard California 438BFU (NS) Mortgagee endorsement, or
its local equivalent. Such Borrower immediately shall notify Agent whenever such separate insurance is taken out, specifying the insurer thereunder and full particulars as to the policies evidencing the same, and originals of such policies
immediately shall be provided to Agent. 
 6.11. No Setoffs or Counterclaims. Make payments
hereunder and under the other Loan Documents by or on behalf of such Borrower without setoff or counterclaim and free and clear of and without deduction or withholding for or on account of, any federal, state, or local Taxes. 
 6.12. Location of Inventory and Equipment. Except for in-transit Inventory, keep the Inventory and
Equipment only at the locations (including store locations) identified on Schedule 6.12; provided, however, that Borrowers may amend Schedule 6.12 so long as such amendment occurs by written notice to Agent not less than
30 days prior to the date on which the Inventory or Equipment of Borrowers is moved to such new location, so long as such new location is within the continental United States, and so long as, at the time of such written notification, Borrowers
provide to Agent, if requested by Agent or otherwise required under this Agreement, a Collateral Access Agreement. 
  

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 6.13. Compliance with Laws. Comply with the
requirements of all applicable laws, rules, regulations, and orders of any governmental authority, including the Fair Labor Standards Act and the Americans With Disabilities Act, other than laws, rules, regulations, and orders the non-compliance
with which, individually or in the aggregate, would not reasonably be expected to cause a Material Adverse Change. 
 6.14. Employee Benefits. Deliver to Agent: (i) promptly, and in any event within 10 Business Days after such Borrower or any of its Subsidiaries knows or has reason to know that an ERISA Event has occurred that
reasonably could be expected to result in a Material Adverse Change, a written statement of the chief financial officer of such Borrower describing such ERISA Event and any action that is being taking with respect thereto by Borrowers, any such
Subsidiary or ERISA Affiliate, and any action taken or threatened by the IRS, Department of Labor, or PBGC. Such Borrower or such Subsidiary, as applicable, shall be deemed to know all facts known by the administrator of any Benefit Plan of which it
is the plan sponsor, (ii) promptly, and in any event within three Business Days after the filing thereof with the IRS, a copy of each funding waiver request filed with respect to any Benefit Plan and all communications received by such
Borrower, any of its Subsidiaries or, to the knowledge of such Borrower, any ERISA Affiliate with respect to such request, and (iii) promptly, and in any event within three Business Days after receipt by such Borrower, any of its Subsidiaries
or, to the knowledge of such Borrower, any ERISA Affiliate, of the PBGCs intention to terminate a Benefit Plan or to have a trustee appointed to administer a Benefit Plan, copies of each such notice. 
 6.15. Leases. Pay when due all rents and other amounts payable under any leases to which such Borrower is a
party or by which such Borrower’s properties and assets are bound, unless such payments are the subject of a Permitted Protest. To the extent that such Borrower fails timely to make payment of such rents and other amounts payable when due under
its leases, Agent shall be entitled, in its discretion, to reserve an amount equal to such unpaid amounts against the Maximum Commitment Amount. 
 6.16. [Intentionally Omitted.] 
 6.17.
Existence. At all times preserve and keep in full force and effect Borrowers’ valid existence and good standing and any rights and franchises material to the Borrowers’ businesses, except where the failure to maintain a foreign
good standing qualification or any right or franchise could not reasonably be expected to result in a Material Adverse Effect. 
 6.18. Environmental. (a) Keep any property either owned or operated by the Borrowers free of any material Environmental Liens or post bonds or other financial assurances sufficient to
satisfy the obligations or liability evidenced by such Environmental Liens, (b) comply, in all material respects, with Environmental Laws and provide to Agent documentation of such compliance which Agent reasonably requests, (c) promptly
notify Agent of any release of a Hazardous Material of any reportable and material quantity from or onto property owned or operated by the any Borrower and take any Remedial Actions required to abate said release or otherwise to come into compliance
with applicable Environmental Law, and (d) promptly provide Agent with written notice within 10 days of

  

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the receipt of any of the following: (i) notice that an Environmental Lien has been filed against any of the real or personal property of any Borrower, (ii) commencement of any
Environmental Action or notice that an Environmental Action will be filed against any Borrower, and (iii) notice of a violation, citation, or other administrative order which reasonably could be expected to result in a Material Adverse Change.

 6.19. Immediate Notice to Agent. Each Borrower shall provide Agent with written notice
promptly upon actual knowledge of the occurrence of any of the following events, which written notice shall state with reasonable particularity the facts and circumstances of the event for which such notice is being given: 
 (i) Any change in the Authorized Persons; 
 (ii) Any cessation by such Borrower of its making payment to its creditors generally as such Borrower’s debts become
due; 
 (iii) Any failure by the Borrowers to pay rent at the Borrowers’ locations, which failure continues
for more than five (5) Business Days following the last day on which such rent was payable without more than a minimal adverse effect on the Borrowers; 
 (iv) Any Material Adverse Change in the business, operations, or financial affairs of any Borrower; 
 (v) The occurrence of any Default or Event of Default; 
 (vi) Any intention on the part of any Borrower to discharge such Borrower’s present independent accountants or any
withdrawal or resignation by such independent accountants from their acting in such capacity; 
 (vii) Any
determination by Borrowers to import an amount of its Inventory in excess of $500,000 in any Fiscal year; 
 (viii) Any litigation which could reasonably be expected to result in a Material Adverse Change; 
 (ix) Any determination by Parent or a Borrower, as applicable, to amend, or agree to amend, the terms of Parent Debentures, the Parent Note Purchase Documents, the Indenture or to enter into or amend any other agreement evidencing any
Indebtedness of Parent or a Borrower; 
 (x) The occurrence of any default or event of default under the Parent
Debentures, the Parent Note Purchase Documents, the Indenture or any other agreement evidencing any Indebtedness of Parent or a Borrower; and 
 (xi) Any amendments or waivers (with copies thereof) to any of the documents governing or evidencing the Parent Debentures, the Parent Note Purchase Documents, the Indenture or any other agreement
evidencing any Indebtedness of Parent or a Borrower. 
  

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 6.20. Disclosure Updates. Promptly and in no event later than
5 Business Days after obtaining actual knowledge thereof, (a) notify Agent if any written information, exhibit, schedule, or report furnished to the Agent contained any untrue statement of a material fact or omitted to state any material fact
necessary to make the statements contained therein not misleading in light of the circumstances in which made, and (b) correct any defect or error that may be discovered therein or in any Loan Document or in the execution, acknowledgement,
filing, or recordation thereof; provided, however, that any Schedules attached to this Agreement or the Perfection Certificate shall be deemed amended by any written notification provided by Borrowers pursuant to this Section. 
 6.21. Solvency. The Borrowers are in compliance with Section 5.12 hereof on a consolidated basis.

 6.22. Line of Business. Each Borrower shall not engage in any business other than the business
in which it is currently engaged or a business reasonably related thereto (the conduct of which reasonably related business is reflected in the Business Plan). 
 6.23. Additional Subsidiaries. If any additional Subsidiary of a Borrower is formed or acquired after the
Restatement Date, Borrowers will notify the Agent thereof and (a) each Borrowers will cause such Subsidiary to become a Borrower hereunder and under each applicable Loan Document within ten (10) Business Days after such Subsidiary is
formed or acquired and promptly take such actions to create and perfect Liens on such Subsidiary’s assets to secure the Secured Obligations as the Agent shall reasonably request. 
 6.24. In-Transit Inventory. In the event that Borrowers elect to import any Inventory in excess of $500,000 in any
Fiscal year from any other country to the United States, Borrowers shall, after the occurrence and during the continuation of a Cash Dominion Event, use their commercially reasonable best efforts to cause such Inventory to be (i) the subject of
a negotiable bill of lading (x) that is consigned to Agent (either directly or by means of endorsements), (y) that was issued by the carrier respecting the subject Inventory, and (z) that is in the possession of Agent or a customs
broker or freight forwarder that has executed a Custom Brokers Agreement or Freight Forwarders Agreement with Agent, or (ii) the subject of a negotiable cargo receipt and is not the subject of a bill of lading (other than a negotiable bill of
lading consigned to, and in the possession of, a consolidator or Agent, or their respective agents) and such negotiable cargo receipt is (x) consigned to Agent (either directly or by means of endorsements), (y) was issued by a consolidator
respecting the subject Inventory, and (z) is in the possession of Agent or a customs broker or freight forwarder that has executed a Custom Brokers Agreement or Freight Forwarders Agreement with Agent. 
  

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 6.25. Post-Restatement Date. 
 (a) Borrowers shall, on the later of one hundred eighty (180) days after the Restatement Date or prior to the date on
which Borrowers commence importing Inventory in excess of $500,000 in any Fiscal year from outside the United States, use commercially reasonable best efforts to deliver to Agent fully executed Customs Brokers Agreements or Freight Forwarders
Agreements, as applicable, from each freight forwarder and customs broker that transports or ships Inventory from a location outside the United States for receipt by Borrowers, in each case in form and substance satisfactory to Agent in its
Permitted Discretion and executed by the freight forwarder or customs broker, as applicable, the Agent and Borrowers. 
 (b) Borrowers shall: (i) use commercially reasonable best efforts to deliver a Collateral Access Agreement after the Restatement Date for each retail store location of Borrowers which is, as of any date, located in a Landlord Lien
State and (ii) deliver to Agent, within thirty (30) days after the Restatement Date, Collateral Access Agreements for each distribution center or warehouse where any Collateral is located and for Borrowers’ chief executive office.

 (c) Borrowers shall, within thirty (30) days after the Restatement Date, execute and deliver to the Agent
original but undated Credit Card Notifications duly authorized, executed and delivered by Borrowers, and directed to each Credit Card Processor of Borrowers as of the Restatement Date. In the event that Borrowers retain any Credit Card Processor
which was not a Credit Card Processor on the Restatement Date (or if the legal identity of any Credit Card Processor changes because of merger, acquisition, or any other reason), Borrowers shall promptly deliver a duly authorized and executed Credit
Card Notification for such additional Credit Card Processor to Agent, which shall be held by the Agent and delivered to the Credit Card Processors, if at all, only after the occurrence and during the continuation of a Cash Dominion Event.

 (d) Borrowers shall, within thirty (30) days after the Restatement Date, execute and deliver to the Agent
original but undated notifications duly authorized, executed, and delivered by Borrowers, directed to each depositary institution at which Borrowers maintain a DDA on the Restatement Date, and, for any DDA opened after the conclusion of such thirty
(30) day period, on the date such DDA is opened, instructing each such institution to remit all amounts deposited from time to time in the DDA to the Restricted Account, which shall be held by the Agent and delivered to such depositary
institutions, if at all, only after the occurrence and during the continuation of a Cash Dominion Event. 
 7. NEGATIVE
COVENANTS. 
 Each Borrower and each Subsidiary of a Borrower covenants and agrees that, so long as any credit hereunder shall be available
to Borrowers and until full and final payment of the Obligations, such Borrower or Subsidiary will not: 
 7.1. Indebtedness. Create, incur, assume, permit, guarantee, or otherwise become or remain, directly or indirectly, liable with respect to any Indebtedness, except: 
 (a) Indebtedness evidenced by this Agreement; 
  

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 (b) Indebtedness under the Indenture outstanding as of the Restatement Date
(and Indebtedness in exchange thereof not to exceed the aggregate amount of the Indebtedness so exchanged) and such other Indebtedness as set forth on Schedule 5.22; 
 (c) Indebtedness incurred by Poolmart hereafter to finance the acquisition by Poolmart of real estate or other fixed assets
for use in the on-going operations of Poolmart, provided (i) that such Indebtedness is secured only by the real estate or other assets financed thereby, and that such investments in real estate or other assets are permitted under
Section 7.21 hereof and (ii) that the aggregate amount of such Indebtedness outstanding at any time shall not exceed $10,000,000; 
 (d) Indebtedness of Parent in an aggregate principal amount not to exceed $450,000,000 (plus interest paid in kind in respect of any outstanding permitted Indebtedness of Parent) (the “Permitted
Parent Debt”); 
 (e) Indebtedness arising under Capital Leases entered into by a Borrower or any of its
Affiliates in the ordinary course of business, provided that the aggregate amount of such Indebtedness outstanding at any time shall not exceed $10,000,000; 
 (f) Indebtedness incurred by a Borrower or any of its Subsidiaries in an aggregate amount not to exceed $10,000,000 at any
time outstanding; 
 (g) Indebtedness of any Subsidiary of a Borrower to a Borrower incurred in the ordinary
course of business; and 
 (h) refinancings, renewals, or extensions of Indebtedness permitted under clauses
(b) (other than Indebtedness under the Indenture), (d), and (g) of this Section 7.1 (and continuance or renewal of any Permitted Liens associated therewith) so long as: (i) the terms and conditions of such refinancings,
renewals, or extensions do not materially impair the prospects of repayment of the Secured Obligations by Borrowers, (ii) the net cash proceeds of such refinancings, renewals, or extensions do not result in an increase in the aggregate
principal amount of the Indebtedness so refinanced, renewed, or extended, (iii) such refinancings, renewals, refundings, or extensions do not result in a shortening of the average weighted maturity of the Indebtedness so refinanced, renewed, or
extended, and (iv) to the extent that Indebtedness that is refinanced was subordinated in right of payment to the Secured Obligations, then the subordination terms and conditions of the refinancing Indebtedness must be at least as favorable to
the Lender Group as those applicable to the refinanced Indebtedness. 
 7.2. Liens. Create,
incur, assume, or permit to exist, directly or indirectly, any Lien on or with respect to any of its property or assets, of any kind, whether now owned or hereafter acquired, or any income or profits therefrom, except for Permitted Liens (including
Liens that are replacements of Permitted Liens to the extent that the original Indebtedness is refinanced under Section 7.1(c) and so long as the replacement Liens only encumber those assets or property that secured the original
Indebtedness); provided that in any event, with respect to any of fee interest in Real Property, Borrowers shall not create or suffer to exist any consensual Liens, or sell or enter into any sale and leaseback transaction relating to any such
interest in any Real Property which is owned by a Borrower on the Restatement Date. 
  

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 7.3. Restrictions on Fundamental Changes. Enter into any
merger or consolidation (other than of a Subsidiary of a Borrower into a Borrower, or a Borrower into the other Borrower), reorganization or recapitalization (other than in connection with an acquisition permitted by Section 7.13, in
which the Borrower or a Subsidiary is the surviving corporation), or reclassify its capital stock, or liquidate, wind up, or dissolve itself (or suffer any liquidation or dissolution), or convey, sell, assign, lease, transfer, or otherwise dispose
of, in one transaction or a series of transactions, all or substantially all of its property or assets. 
 7.4. Disposal of Assets. Sell, lease, assign, transfer, or otherwise dispose of any of such Borrower’s properties or assets other than sales of or other disposition of (a) Inventory, (b) obsolete Equipment,
(c) Equipment not used or useful in the conduct of the applicable Borrower’s business, (d) sale and leasebacks of the properties listed on Schedule 7.4 or of any Real Property or fixed assets acquired after the Restatement
Date, and (e) other assets (other than Inventory) not exceeding $500,000 per year in book value. 
 7.5. Change Name. Change such Borrower’s name, FEIN, corporate structure (within the meaning of Section 9-402(7) of the Code), or identity, or add any new fictitious name. 
 7.6. Guarantee. Guarantee or otherwise become in any way liable with respect to the obligations of any
third Person except by endorsement of instruments or items of payment for deposit to the account of such Borrower or which are transmitted or turned over to Agent. 
 7.7. Nature of Business. Make any material change in the principal nature of such Borrower’s
business. 
 7.8. Prepayments and Amendments. 
 (a) Prepay, redeem, retire, defease, purchase, or otherwise acquire any Funded Debt owing to any Person; provided, however,
that Borrowers may prepay, redeem, retire, defease, purchase, or otherwise acquire any Funded Debt if (i) the Availability Condition has been satisfied; (ii) the amount of such prepayment, redemption, retirement, defeasance, purchase, or
acquisition does not exceed, when aggregated with all other payments made pursuant to this Section 7.8(a) or any of Sections 7.11(b) and 7.11(c) and Section 7.13(d) in the same Fiscal year, the Restricted Payments
Cap then in effect; and (iii) the amount of such prepayment, redemption, retirement, defeasance, purchase, or acquisition does not exceed (A) $25,000,000 per annum if such Funded Debt is prepaid, redeemed, retired, defeased, purchased or
otherwise acquired with proceeds of a Borrowing under this Agreement or (B) $50,000,000 per annum if such Funded Debt is prepaid, redeemed, retired, defeased, purchased or otherwise acquired solely by use of Borrowers’ available
cash-on-hand, less Revolving Facility Usage at such time. 
  

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 (b) Directly or indirectly, amend or otherwise modify the terms or
conditions of the Indenture or any other agreement, instrument, document, indenture, or other writing evidencing or concerning any other Indebtedness of the Borrowers without Agent’s prior written consent if such amendment or modification to
such other Indebtedness would materially adversely change any obligations or covenants of a Borrower or could otherwise be reasonably anticipated to result in a Material Adverse Change. 
 7.9. Change of Control. Cause, permit, or suffer, directly or indirectly, any Change of Control.

 7.10. Consignments. Consign any Inventory or sell any inventory on bill and hold, sale or
return, sale on approval, or other conditional terms of sale. 
 7.11. Distributions. Make
any distribution or declare or pay any dividends (in cash or other property, other than capital stock) on, or purchase, acquire, redeem, or retire any of such Borrower’s capital stock, of any class, whether now or hereafter outstanding;
provided, however, that: 
 (a) each Subsidiary of a Borrower may pay cash dividends or
distributions to a Borrower or another wholly-owned Subsidiary of a Borrower; 
 (b) so long as the Availability
Condition has been satisfied and subject to the Restricted Payments Cap, a Borrower may: 
 (i) declare or pay
any dividend or make distribution to Parent for the purpose of repurchasing capital stock of Parent or options, warrants or other securities exercisable or convertible into capital stock of Parent from employees and directors of Parent or any of its
Subsidiaries or their authorized representatives upon the death, disability or termination of employment or directorship of such employees or directors, in an aggregate amount not to exceed $1,000,000 in any calendar year and $4,000,000 in the
aggregate plus, in the case of any such repurchase of capital stock, the amount of net cash proceeds received by Parent from the resale of repurchased capital stock to officers or directors of Parent and its Subsidiaries; and 
 (ii) make distributions or declare or pay any dividends (in cash or other property) on, or otherwise purchase, acquire,
redeem, or retire any of such Borrower’s capital stock, of any class; 
 (c) if the Availability Condition
has been satisfied and subject to the Restricted Payments Cap, the Borrowers may make distributions to Parent to pay interest on the Permitted Parent Debt (collectively, the “Parent Debt Service Distributions”); provided, however,
that the aggregate amount of Restricted Payments under clauses “b” and “c” of this Section 7.11, when aggregated with all payments made under Sections 7.8(a) and 7.13(d) in any Fiscal year shall not
exceed the Restricted Payments Cap at any time; and 
 (d) the Borrowers may make distributions to Parent in
respect of any Fiscal year in an amount up to the federal and state income tax expense of Poolmart on a consolidated basis in such Fiscal year (collectively, the “Parent Tax Distributions”). 
  

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 7.12. Accounting Methods. Other than pursuant to GAAP or with
the concurrence of a “Big 4” accounting firm, modify or change its method of accounting. 
 7.13. Investments and Acquisitions. Directly or indirectly make any Investment or acquire any assets outside of the ordinary course of business comprising substantially all of the assets of any other Person or of a
business unit of any other Person other than (a) Permitted Investments, (b) loans by a Borrower to employees which do not exceed $1,000,000 in the aggregate outstanding at any time, (c) trade credit extended to customers of Borrowers
in the ordinary course of business, (d) acquisitions of capital stock of any Person or any assets comprising substantially all of the assets of any other Person or of a business unit of any other Person in an amount not to exceed $30,000,000 in
the aggregate over the term of this Agreement so long as the Availability Condition at the time of each such acquisition is satisfied and the aggregate amount of all such acquisitions, together with the aggregate amount of all payments made under
Sections 7.8(a) and 7.11(b) and (c) in the same Fiscal year does not exceed Restricted Payments Cap in effect for such Fiscal year. 
 7.14. Transactions with Affiliates. Directly or indirectly enter into or permit to exist any material
transaction with any Affiliate of such Borrower except for (x) transactions contemplated under the Management Agreement as in effect as of the Restatement Date and (y) transactions that are in the ordinary course of such Borrower’s
business and upon fair and reasonable terms, and that are no less favorable to such Borrower than would be obtained in an arm’s length transaction with a non-Affiliate. 
 7.15. Suspension. Suspend or go out of a substantial portion of its business. 
 7.16. Fiscal Year. The Borrowers shall not change their Fiscal year from the current twelve month period that
comprises each Fiscal year. 
 7.17. Use of Proceeds. Use the proceeds of the Advances or
any Letter of Credit for any purpose other than (i) on the Restatement Date, to pay transactional fees, costs, and expenses incurred in connection with this Agreement and the transactions contemplated hereby, including the refinance of any
existing Obligations under the Existing Loan Agreement, and (ii) thereafter, for Borrowers’ general corporate purposes and all other lawful and permitted purposes. 
 7.18. Change in Location of Chief Executive Office; Inventory and Equipment with Bailees. Relocate its
chief executive office to a new location without providing 30 days prior written notification thereof to Agent and so long as, at the time of such written notification, such Borrower provides any financing statements or fixture filings necessary to
perfect and continue perfected the Lien of Agent (for the benefit of the Lender Group) and also provides to Agent a Collateral Access Agreement with respect to such new location. The Inventory and Equipment of such Borrower shall not at anytime now
or hereafter be stored with a bailee, warehouseman, or similar party without Agent’s prior written consent and without a Collateral Access Agreement. 
  

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 7.19. No Prohibited Transactions Under ERISA. Directly
or indirectly: 
 (a) engage, or permit any Subsidiary of such Borrower to engage, in any prohibited transaction
which is reasonably likely to result in a civil penalty or excise Tax described in Sections 406 of ERISA or 4975 of the IRC for which a statutory or class exemption is not available or a private exemption has not been previously obtained from the
Department of Labor; 
 (b) permit to exist with respect to any Benefit Plan any accumulated funding deficiency
(as defined in Sections 302 of ERISA and 412 of the IRC), whether or not waived; 
 (c) fail, or permit any
Subsidiary of such Borrower to fail, to pay timely required contributions or annual installments due with respect to any waived funding deficiency to any Benefit Plan; 
 (d) terminate, or permit any Subsidiary of such Borrower to terminate, any Benefit Plan where such event would result in any
liability of such Borrower, any of its Subsidiaries or any ERISA Affiliate under Title IV of ERISA; 
 (e) fail,
or permit any Subsidiary of such Borrower to fail, to make any required contribution or payment to any Multiemployer Plan; 
 (f) fail, or permit any Subsidiary of such Borrower to fail, to pay any required installment or any other payment required under Section 412 of the IRC on or before the due date for such installment
or other payment; 
 (g) amend, or permit any Subsidiary of such Borrower to amend, a Plan resulting in an
increase in current liability for the plan year such that either of such Borrower, any Subsidiary of such Borrower or any ERISA Affiliate is required to provide security to such Plan under Section 401(a)(29) of the IRC; or 
 (h) withdraw, or permit any Subsidiary of such Borrower to withdraw, from any Multiemployer Plan where such withdrawal is
reasonably likely to result in any liability of any such entity under Title IV of ERISA; 
 which, individually or in the
aggregate, results in or reasonably would be expected to result in a claim against or liability of such Borrower, any of its Subsidiaries or any ERISA Affiliate in excess of $1,000,000. 
 7.20. Financial Covenants. 
 (a) Fixed Charge Coverage Ratio. At any time during which the Revolving Facility Usage exceeds $12,500,000 for more
than sixty (60) consecutive days, permit the Fixed Charge Coverage Ratio as of the last day of any Fiscal quarter to be less than 1.10 to 1.00. 
  

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 (b) Leverage Ratio. Permit the Leverage Ratio for the preceding
Fiscal quarter tested as of the last day of any Fiscal quarter to exceed the ratio of 2.75 to 1.00. 
 (c)
Capital Expenditures Covenant. Permit the aggregate amount of Capital Expenditures incurred in any Fiscal year to exceed $25,000,000, provided, however, that if Borrowers expend less (a “Capital Expenditures Savings”) than
$25,000,000 on Capital Expenditures in any Fiscal Year, such Capital Expenditure Cap in the next Fiscal Year shall equal the lesser of (i) $25,000,000 plus the amount of the previous Fiscal Year’s Capital Expenditures Savings or
(ii) $28,000,000. 
 (d) Minimum EBITDA. Permit EBITDA as of the last day of any Fiscal quarter to be
less than $70,000,000. 
 7.21. Store Closings. Close (or plan or project to close) more than ten
percent (10%) of Borrowers’ retail store locations in any Fiscal year or 12 month consecutive period unless Borrowers have first obtained Agent’s prior written consent which consent may be conditioned, among other things, upon
Borrowers’ retention of a nationally recognized liquidator approved by Agent as either a consultant or liquidator in connection with the closing of such stores. 
 7.22. Securities Accounts. Establish or maintain any Securities Account unless Agent shall have received a
Securities Account Control Agreement in respect of such Securities Account. 
 8. EVENTS OF DEFAULT. 
 Any one or more of the following events shall constitute an event of default (each, an “Event of Default”) under this
Agreement: 
 8.1. Payment. If Borrowers fail to pay, within two (2) Business Days of
the date due or the date when declared due and payable, any portion of the Obligations (whether of principal, interest (including any interest which, but for the provisions of the Bankruptcy Code, would have accrued on such amounts), fees and
charges due the Lender Group, reimbursement of Lender Group Expenses, or other amounts constituting Obligations), provided that nothing contained herein shall prohibit Agent from charging such amounts to the Borrowers’ loan account on the due
date thereof; 
 8.2. Covenants, etc. 
 (a) If any Borrower fails to perform or observe any term, provision, condition, covenant or agreement contained in
Section 6.25(a) of this Agreement; 
 (b) If any Borrower fails to perform or observe any term,
provision, condition, covenant or agreement in this Agreement or any of the Loan Documents (other than those listed in Sections 8.1 or 8.2), and, with respect to any such failure which by its nature can be cured, such failure shall
continue for a period of 20 days from the date of its occurrence; provided, however, that in the case of a failure which by its nature can be cured under any of the following sections of this Agreement, such failure shall continue for a period of 20
days from the

  

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date the such Borrower receives written notice from Agent of the existence of such failure: Section 6.1 with respect to the maintenance of adequate books and records;
Section 6.3 with respect to Agent’s satisfaction with form of the financial statements furnished to Agent; Sections 6.9 and 6.10 with respect to the failure to make provision to the satisfaction of Agent for payment of
the obligations described therein; 
 8.3. Attachment. If any material portion of any
Borrower’s properties or assets is attached, seized, subjected to a writ or distress warrant; or is levied upon, or comes into the possession of any-third Person, or if any Borrower fails to pay its debts generally when due or admits in writing
its inability to pay its debts as they become due; 
 8.4. Insolvency. If an Insolvency
Proceeding is commenced by any Borrower or any of their Affiliates; 
 8.5. Involuntary
Insolvency. If an Insolvency Proceeding is commenced against any Borrower and any of the following events occur: (a) such Borrower consents to the institution of the Insolvency Proceeding against it; (b) the petition commencing the
Insolvency Proceeding is not timely controverted; (c) the petition commencing the Insolvency Proceeding is not dismissed within 60 calendar days of the date of the filing thereof; provided, however, that, during the pendency of such period, the
Lender Group shall be relieved of its obligation to extend credit hereunder; (d) an interim trustee is appointed to take possession of all or a substantial portion of the properties or assets of, or to operate all or any substantial portion of
the business of, such Borrower; or (e) an order for relief shall have been issued or entered therein; 
 8.6. Judgment. If one or more judgments or orders for the payment of money is rendered against any Borrower or any of its Subsidiaries in excess of $500,000 in the aggregate (provided, that, any judgment covered by
insurance where the insurer has assumed responsibility in writing for such judgment shall not be included in calculating such amount) and shall remain undischarged or unvacated for a period in excess of thirty (30) days or execution shall at
any time not be effectively stayed; 
 8.7. Levy. If a notice of Lien, levy, or assessment
is filed of record with respect to any Borrower’s or any of such Borrower’s Subsidiaries’ assets by the United States, or any department, agency, or instrumentality thereof, or by any state, county, municipal, or governmental agency,
or if any Taxes or debts owing at any time hereafter to anyone or more of such entities becomes a Lien, whether choate or otherwise, upon any of such Borrower’s properties or assets and the same is not paid on the payment date thereof provided
that any such Lien or assessment shall not be an Event of Default if for less than $500,000 and if fully reserved by Agent against Availability; 
 8.8. [Intentionally Omitted] 
 8.9.
Material Agreements. If there is a default by a Borrower under the Indenture or under any other agreement evidencing Indebtedness of a Borrower evidencing Indebtedness outstanding in an amount in excess of $500,000, or under any other
agreement to which any Borrower is a party with one or more third Persons the termination

  

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or suspension of which would be reasonably anticipated to result in a Material Adverse Change, and such default (a) occurs at the final maturity of the obligations thereunder, or
(b) results in a right by such third Person(s), irrespective of whether exercised, to accelerate the maturity of such Borrower’s obligations thereunder, to terminate such agreement or to refuse to renew such agreement pursuant to an
automatic renewal right therein; 
 8.10. Optional Redemption of Indebtedness. If any
Borrower makes any optional redemption of Indebtedness under the Indenture or any other Subordinated Debt (other than as contemplated under Section 7.8) or any payment on account of Indebtedness that has been contractually subordinated
in right of payment to the payment of the Obligations, except to the extent such payment is permitted by the terms of the subordination provisions applicable to such Indebtedness; 
 8.11. Misrepresentation. If any misstatement or misrepresentation exists now or hereafter in any
warranty, representation, statement, or report made to the Lender Group by any Borrower or any of their Subsidiaries or any officer, employee, agent, or director of any Borrower or any of their Subsidiaries, on the date any such warranty,
representation, statement, or report is made; 
 8.12. Cessation of Business. Any event
occurs, as a result of which revenue producing activities (except to the extent such lost revenue is promptly replaced with business interruption insurance) cease at (a) any of Borrowers’ principal distribution centers and such cessation
or curtailment would reasonably be anticipated to result in a Material Adverse Change or (b) any other facility or facilities of the Borrowers generating more than 10% of Borrowers’ consolidated revenues for Borrowers’ Fiscal year
preceding such event, and such cessation continues for more than twenty (20) days. 
 8.13.
Change of Control. If a “Change in Control” occurs under and as defined in the Indenture or under and as defined in this Agreement. 
 8.14. Liens. If this Agreement or any other Loan Document that purports to create a Lien in favor of the Lender Group, shall, for any reason, fail or cease to create a valid and
perfected and, except to the extent permitted by the terms hereof or thereof, first priority Lien on or security interest (subject only to Permitted Liens) in a material portion of the Collateral covered hereby or thereby in which a Lien is required
to be perfected under the Loan Documents. 
 8.15. Loan Documents. Any provision of any Loan
Document shall at any time for any reason be declared to be null and void, or the validity or enforceability thereof shall be contested by any Borrower, a proceeding shall be commenced by any Borrower, or by any Governmental Authority having
jurisdiction over the Borrowers, seeking to establish the invalidity or unenforceability thereof (as the case may be), or any Borrower that such Borrower has any liability or obligation purported to be created under any Loan Document (as the case
may be) or any challenge is brought by any Borrower which seeks to void, avoid, limit or otherwise adversely affect any security interests created by or in any Loan Document or any payment made pursuant thereto or a determination by any court or any
other judicial government authority that any Loan Document is not enforceable strictly in accordance with the subject Loan Documents terms or which voids, avoids, limits, or otherwise adversely affects any security interests created by any Loan
Document or any payment made pursuant thereto. 
  

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 8.16. Parent Note Purchase Documents. If there is an
“Event of Default” (as therein defined) under the Parent Note Purchase Documents or the Parent Debentures or a breach or “Event of Default” under any other Indebtedness of Parent by reason of Parent’s failure to make any
payment required by Parent thereunder or if any other “Event of Default” occurs under the Parent Note Purchase Documents, the Parent Debentures or any other such other Indebtedness in consequence of which the holders of such Parent Note
Purchase Documents, Parent Debentures or other Indebtedness have caused the acceleration of the maturity of Indebtedness evidenced thereby. 
 8.17. Material Restraint. The indictment of, or institution of any legal process or proceedings against any Borrower where the relief, penalties or remedies sought or available
include the forfeiture of any property of any Borrower and/or the imposition of any stay or other order, in each case, which would cause a Material Adverse Change. 
 8.18. Indictment. Any indictment of Borrowers’ chief executive officer or chief financial officer
under Applicable Law where the crime alleged arises from an act of defalcation, breach of fiduciary duty, embezzlement or intentions) fraud related to senior executive’s work responsibilities and would constitute a felony under Applicable Law
unless in the case of an indicted executive, such executive’s employment is terminated within sixty (60) days of such indictment or the Agent determines, in its Permitted Discretion, that such indictment may not reasonably be anticipated
to result in a Material Adverse Change. 
 9. THE LENDER GROUP’S RIGHTS AND REMEDIES. 
 9.1. Rights and Remedies. Upon the occurrence, and during the continuation, of an Event of Default Agent
may, pursuant to Sections 17.4 and 17.5, without notice of its election and without demand, do any one or more of the following, all of which are authorized by Borrowers: 
 (a) Declare all Obligations immediately due and payable; 
 (b) Cease advancing money or extending credit to or for the benefit of Borrowers under this Agreement or under any of the
Loan Documents; 
 (c) Terminate this Agreement and any of the other Loan Documents as to any future liability or
obligation of the Lender Group, but without affecting the Lender Group’s rights and security interests in the Collateral and without affecting the Secured Obligations; 
 (d) Notify Account Debtors and other Persons obligated on the Collateral to make payment or otherwise render performance to
or for Agent, and, to the extent permitted under the Code, enforce the obligations of Account Debtors and other Persons obligated on the Collateral and exercise the rights of Borrowers with respect to such obligations

  

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and any property that may secure such obligations and settle or adjust disputes and claims directly with Account Debtors for amounts and upon terms which Agent considers advisable, and in such
cases, Agent will credit Borrowers’ Loan Account with only the net amounts received by Agent in payment of such disputed, Accounts after deducting all Lender Group Expenses incurred or expended in connection therewith; 
 (e) Take any proceeds of Collateral; 
 (f) Cause Borrowers to hold all of their returned Inventory in trust for the Lender Group, segregate all such returned
Inventory from all other property of any Borrower or in any Borrower’s possession and conspicuously label said returned Inventory as the property of the Lender Group; 
 (g) Without notice to or demand upon any Borrower or any guarantor, make such payments and do such acts as Agent considers
necessary or reasonable to protect its security interests in the Collateral. Borrowers agree to assemble the Collateral if Agent so requires, and to make the Collateral available to Agent as Agent may designate. Each Borrower authorizes Agent to
enter the premises where the Collateral is located, to take and maintain possession of the Collateral, or any part of it, and to pay, purchase, contest, or compromise any encumbrance, charge, or Lien that in Agent’s determination appears to
conflict with the Liens of Agent (for the benefit of the Lender Group) in the Collateral and to pay all expenses incurred in connection therewith. With respect to any of Borrowers’ owned or leased premises, each Borrower hereby grants Agent a
license to enter into possession of such premises and to occupy the same, without charge, for up to 120 days in order to exercise any of the Lender Group’s rights or remedies provided herein, at law, in equity, or otherwise; 
 (h) Without notice to any Borrower (such notice being expressly waived), and without constituting a retention of any
collateral in satisfaction of an obligation (within the meaning of Section 9505 of the Code), set off and apply to the Secured Obligations any and all (i) balances and deposits of Borrowers held by the Lender Group (including any amounts
received in any Restricted Account), or (ii) indebtedness at any time owing to or for the credit or the account of any Borrower held by the Lender Group; 
 (i) Hold, as cash collateral, any and all balances and deposits of any Borrower held by the Lender Group, and any amounts
received in any Restricted Account, to secure the full and final repayment of all of the Secured Obligations; 
 (j) Instruct each Cash Management Bank, Restricted Account Bank and any other depositary with whom a DDA subject to a Restricted Account Control Agreement is maintained, to pay any and all balances and deposits in the applicable Cash
Management Account, Restricted Account, or other DDA to the Agent’s Account. 
 (k) Instruct any securities
intermediary to liquidate the applicable Securities Account or any related Investment Property maintained or held thereby and remit the proceeds thereof to the Agent’s Account; 
  

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 (l) Ship, reclaim, recover, store, finish, maintain, repair, prepare for
sale, advertise for sale, and sell (in the manner provided for herein) the Collateral. Agent is hereby granted an irrevocable license or other right to use, apply, and/or affix, without charge, any Borrowers’ labels, patents, copyrights, rights
of use of any name, trade secrets, trade names, trademarks, service marks, and advertising matter, or any property of a similar nature, as it pertains to the Collateral, in completing production of, advertising for sale, and selling any Collateral
and each Borrower’s rights under all licenses and all franchise agreements shall inure to the Lender Group’s benefit; 
 (m) Sell, or cause to be sold, the Collateral at either a public or private sale, or both, by way of one or more contracts or transactions, for cash or on terms, in such manner and at such places
(including any Borrowers’ premises) as Agent determines is commercially reasonable. It is not necessary that the Collateral be present at any such sale; 
 (n) Agent shall give notice of the disposition of the Collateral as follows: 
 (1) Agent shall give Borrowers a notice in writing of the time and place of public sale, or, if the sale is a private sale or
some other disposition other than a public sale is to be made of the Collateral, then the time on or after which the private sale or other disposition is to be made; 
 (2) The notice shall be personally delivered or mailed, postage prepaid, to Borrowers as provided in Section 12,
at least five days before the date fixed for the sale, or at least five days before the date on or after which the private sale or other disposition is to be made; no notice needs to be given prior to the disposition of any portion of the Collateral
that is perishable or threatens to decline speedily in value or that is of a type customarily sold on a recognized market. Notice to Persons other than Borrowers claiming an interest in the Collateral shall be sent to such addresses as they have
furnished to Agent; 
 (3) If the sale is to be a public sale, Agent also shall give notice of the time and place
by publishing a notice one time at least five days before the date of the sale in a newspaper of general circulation in the county in which the sale is to be held; 
 (4) Borrowers agree that such written notice shall satisfy all requirements for notice to the Borrowers which are imposed
under the Code or other applicable law with respect to the exercise of the Agent’s rights and remedies upon default. 
 (o) Agent may credit bid and purchase at any public sale; 
 (p)
Agent may conduct one or more going out of business sales in respect to the Collateral; 
 (q) The Agent shall
have all other rights and remedies available to it at law or in equity pursuant to any other Loan Documents and as a secured party under the Code; 
 (r) Any deficiency that exists after disposition of the Collateral as provided above will be paid immediately by Borrower. Any excess will be returned, without interest and subject to the rights of third
Persons, by Agent to Borrowers; 
  

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 (s) The Agent, in the exercise of the Agent’s rights and remedies upon
default, may conduct one or more going out of business sales, in the Agent’s own right or by one or more agents and contractors. Such sale(s) may be conducted upon any premises owned, leased, or occupied by the Borrowers. The Agent’s and
any such agent or contractor, in conjunction with any such sale, may augment the Inventory with other goods (all of which other goods shall remain the sole property of the Agent’s or such agent or contractor). Any amounts realized from the sale
of such goods which constitute augmentations to the Inventory (net of an allocable share of the costs and expenses incurred in their disposition) shall be the sole property of the Agent’s or such agent or contractor and none of the Lenders,
Borrowers nor any Person claiming under or in right of the Borrowers shall have any interest therein; 
 (t)
Unless the Collateral is perishable or threatens to decline speedily in value, or is of a type customarily sold on a recognized market (in which event the Agent shall provide the Borrowers with such notice as may be practicable under the
circumstances), the Agent shall give the Borrowers at least ten (10) days prior written notice of the date, time, and place of any proposed public sale, and of the date after which any private sale or other disposition of the Collateral may be
made. The Borrowers agree that such written notice shall satisfy all requirements for notice to the Borrowers which are imposed under the Code or other applicable law with respect to the exercise of the Agent’s rights and remedies upon default;

 (u) In connection with the Agent’s exercise of its rights under this Agreement, the Agent may enter upon,
occupy, and use any premises owned or occupied by the Borrowers, and may exclude the Borrowers from such premises or portion thereof as may have been so entered upon, occupied, or used by the Agent. The Agent shall not be required to remove any of
the Collateral from any such premises upon the Agent’s taking possession thereof, and may render any Collateral unusable to the Borrowers. In no event shall the Agent be liable to the Borrowers for use or occupancy by the Agent of any premises
pursuant to this Agreement, nor for any charge (such as wages for the Borrowers’ employees and utilities) incurred in connection with the Agent’s exercise of the Agent’s rights and remedies; and 
 (v) The Borrowers hereby grant to the Agent a royalty free nonexclusive irrevocable license to use, apply, and affix any
trademark, trade name, logo, or the like in which any of the Borrowers now or hereafter has rights, such license being with respect to the Agent’s exercise of its rights and remedies hereunder including, without limitation, in connection with
any completion of the manufacture of Inventory or sale or other disposition of Inventory. 
 9.2.
Remedies Cumulative. The Lender Group’s rights and remedies under this Agreement, the Loan Documents, and all other agreements shall be cumulative and may be exercised simultaneously. The Lender Group shall have all other rights
and remedies not inconsistent herewith as provided under the Code, by law, or in equity. No exercise by the Lender Group of one right or remedy shall be deemed an election, and no waiver by the Lender Group of any Event of Default shall be deemed a
continuing waiver. No delay by the Lender Group shall constitute a waiver, election, or acquiescence by it. 
  

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 10. TAXES AND EXPENSES; WITHHOLDINGS. 
 10.1. Third Party Payments. If, after written request by Agent to a Borrower, such Borrower fails
to pay any monies (whether taxes, assessments, insurance premiums, or, in the case of leased properties or assets, rents or other amounts payable under such leases) due to third Persons, or fails to make any deposits or furnish any required proof of
payment or deposit, all as required under the terms of this Agreement, then, to the extent that Agent determines that such failure by such Borrower could result in a Material Adverse Change, in its discretion and without prior notice to such
Borrower, Agent may do any or all of the following: (a) make payment of the same or any part thereof; (b) set up such reserves in Borrowers’ Loan Account as Agent deems necessary to protect the Lender Group from the exposure created
by such failure; or (c) obtain and maintain insurance policies of the type described in Section 6.10, and take any action with respect to such policies as Agent deems prudent. Any such amounts paid by Agent shall constitute Lender
Group Expenses. Any such payments made by Agent shall not constitute an agreement by the Lender Group to make similar payments in the future or a waiver by the Lender Group of any Event of Default under this Agreement. Agent need not inquire as to,
or contest the validity of, any such expense, tax, or Lien and the receipt of the usual official notice for the payment thereof shall be conclusive evidence that the same was validly due and owing. 
 10.2. Taxes. 
 (a) All payments required to be made by a Borrower under the Loan Documents shall be made free and clear of, and without deduction or withholding for or on account of, any Taxes unless such deduction or
withholding is required by Applicable Law or the affected Lender has not made commercially reasonable efforts to minimize its exposure to any such Taxes. 
 (b) If any Taxes are required to be deducted or withheld by Applicable Law from any amounts payable under the Loan Documents by a Borrower, (i) such Borrower shall promptly pay an additional amount
(“Additional Amount”) to the Agent or the applicable Lender as may be necessary so that after making all required Tax deductions or withholdings (including deductions or withholdings applicable to all Taxes on, or arising by reason
of, the payment of Additional Amounts), the Agent or applicable Lender receives and retains, an amount equal to the amount that it would have received had no such deductions or withholdings been required, (ii) such Borrower shall deduct or
withhold all Taxes (including Taxes on Additional Amounts) required to be withheld or deducted under Applicable Law from any payments made to the Agent or the Lenders pursuant to the Loan Documents, and (iii) the Borrower shall pay the full
amount of all Taxes deducted or withheld under this Section 10.2 to the relevant Governmental Authority on a timely basis, all in accordance with Applicable Law. 
 (c) The obligations of the Borrowers to pay Additional Amounts under this Section 10.2 shall not apply with
respect to “Excluded Taxes”, which shall mean (i) in relation to the Agent or any Lender any Taxes imposed on the net income or capital of the Agent or any Lender (however denominated) and franchise taxes imposed on the Agent or any
Lender (in lieu of net income taxes) by any Governmental Authority, and also Taxes that are branch

  

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profits taxes or any similar tax imposed by any Governmental Authority, in each case as a result of the Agent or the Lender (1) carrying on a trade or business or having a permanent
establishment in any jurisdiction or political subdivision thereof, (2) being organized under the laws of such jurisdiction or any political subdivision thereof, or (3) being or being deemed to be resident in such jurisdiction or political
subdivision thereof and (ii) any withholding Tax that (1) is imposed on amounts payable to any Lender at the time such Lender becomes a party to this Agreement (or designates a new lending office) or (2) is attributable to such
Lender’s failure to comply with Section 17.10(a). 
 (d) The Borrowers shall, promptly following
receipt of a request from the Agent, pay to the Agent, on its behalf or on behalf of any Lender, any and all Taxes in the nature of sales, use, goods and services, and harmonized sales Taxes payable under the laws of the United States of America,
any State of the United States of America or any other country or jurisdiction with respect to any and all goods and services made available under the Loan Documents to any Borrower by the Agent and the Lenders. 
 (e) Whenever any Taxes are required to be paid by a Borrowers to a Governmental Authority under this
Section 10.2, the Borrower shall send or cause to be sent to the Agent, for the account of the Agent and each affected Lender, a certified copy of an original official receipt evidencing payment of such Taxes, or other evidence of such
payment reasonably satisfactory to the Agent, within 30 days after the date of any payment of Taxes thereunder. 
 (f) If a Borrower fails to pay any Taxes under this Section 10.2 when due or if a Borrower fails to send to the Agent the required documentary evidence of the payment of Taxes pursuant to Section 10.2, the Borrowers
shall jointly and severally indemnify and save harmless the Agent and the Lenders from any Taxes, interest, penalties or other liabilities that may become payable by the Agent or by any Lender or to which the Agent or any Lender may be subjected to
as a result of any such failure. A certificate of the Agent or any applicable Lender as to the amount of any such Taxes, interest, penalties or other liabilities and containing reasonable details of the calculation of such Taxes, interest, penalties
or other liabilities shall be, absent manifest error, prima facie evidence of the amount of such Taxes, interest, penalties or other liabilities, as the case may be. The indemnification in this Section 10.2 shall be made within 30 days
after the date the Agent or any applicable Lender has submitted a certificate under this Section 10.2. 
 (g) A Lender that is entitled to an exemption from or reduction of non-U.S. withholding tax under the law of the jurisdiction in which a Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments
under this Agreement shall deliver to the Borrowers (with a copy to the Agent), at the time or times prescribed by Applicable Law or reasonably requested by a Borrower, such properly completed and executed documentation prescribed by applicable law
as will permit such payments to be made without withholding or at a reduced rate, provided that such Lender is legally entitled to complete, execute and deliver such documentation and in such Lender’s judgment such completion, execution or
submission would not materially prejudice the legal position of such Lender. 
  

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 (h) If the Agent or any Lender determines, in its Permitted Discretion, that
it has received a refund of any Taxes as to which it has been indemnified by a Borrower or with respect to which a Borrower has paid additional amounts pursuant to this Section 10.2, it shall pay over such refund to the Borrowers (but only to
the extent of indemnity payments made, or additional amounts paid, by such Borrower under this Section 10.2 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses of the Agent or such Lender and without
interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided, that the Borrowers, upon the request of the Agent or such Lender, agrees to repay the amount paid over to for the account of such
Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Agent or such Lender in the event the Agent or such Lender is required to repay such refund to such Governmental Authority. This paragraph
shall not be construed to require the Agent or any Lender to make available its tax returns (or any other information relating to its taxes which it deems confidential) to the Borrowers or any other Person. 
 (i) Without prejudice to the survival of any other obligation contained in the Loan Documents, the obligations of a Borrower
under this Section 10.2 shall survive the termination of the Loan Documents and the payment of all amounts payable to the Agent or the Lenders under the Loan Documents or with respect to the Loan Documents. 
 11. WAIVERS; INDEMNIFICATION. 
 11.1. Demand; Protest; etc. Each Borrower waives demand, protest, notice of protest, notice of default or dishonor, notice of payment and nonpayment, nonpayment at maturity, release,
compromise, settlement, extension, or renewal of accounts, documents, instruments, chattel paper, and guarantees at any time held by the Lender Group on which such Borrower may in any way be liable. 
 11.2. The Lender Group’s Liability for Collateral. So long as the Lender Group complies with its
obligations, if any, under Section 9207 of the Code, the Lender Group shall not in any way or manner be liable or responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage thereto occurring or arising in any
manner or fashion from any cause; (c) any diminution in the value thereof; or (d) any act or default of any carrier, warehouseman, bailee, forwarding agency, or other Person. All risk of loss, damage, or destruction of the Collateral shall
be borne by the Borrowers. 
 11.3. Indemnification. Borrowers shall pay, indemnify, defend,
and hold each Agent-Related Person, each Lender, each Participant, and each of their respective officers, directors, employees, agents (each, an “Indemnified Person”) harmless (to the fullest extent permitted by law) from and
against any and all claims, demands, suits, actions, investigations, proceedings, and damages, and all reasonable attorneys fees and disbursements and other reasonable and documented out-of-pocket costs and expenses actually incurred in connection
therewith (as and when they are incurred and irrespective of whether suit is brought), at any time asserted against, imposed upon, or incurred by any of them in connection with or as a result of or related to the execution, delivery, enforcement,
performance, and administration (including any of the foregoing arising out of the administration of the credit facilities hereunder on a joint borrowing basis) of this Agreement and any other Loan Documents or the transactions contemplated herein,
and with respect to any investigation, litigation, or proceeding related to this Agreement, any

  

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other Loan Document, or the use of the proceeds of the credit provided hereunder (irrespective of whether any Indemnified Person is a party thereto), or any act, omission, event or circumstance
in any manner related thereto (all the foregoing, collectively, the “Indemnified Liabilities”). Borrowers shall have no obligation to any Indemnified Person under this Section 11.3 with respect to any Indemnified
Liability that a court of competent jurisdiction finally determines to have resulted from the gross negligence or willful misconduct of such Indemnified Person. This provision shall survive the termination of this Agreement and the repayment of the
Obligations. If any Indemnified Person makes any payment to any other Indemnified Person with respect to an Indemnified Liability as to which a Borrower was required to indemnify the Indemnified Person receiving such payment, the Indemnified Person
making such payment is entitled to be indemnified and reimbursed by such Borrower with respect thereto. Borrowers shall be subrogated to an Indemnified Person’s rights of recovery to the extent of any liabilities satisfied by the Borrowers and
such Indemnified Person shall execute and deliver such instruments and papers as are necessary to assign such rights and assist in the execution thereof; provided, however, that, and, notwithstanding the foregoing to the contrary, such subrogation
rights of Borrowers may not be exercised until payment in full of all Obligations due hereunder and the termination of the Commitments and shall be subordinate to the Obligations due Lender Group in all respects. WITHOUT LIMITATION, THE FOREGOING
INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION (OTHER THAN GROSS NEGLIGENCE) OF SUCH INDEMNIFIED PERSON OR OF ANY OTHER
PERSON. 
 11.4. Joint Borrowers. 
 (a) Each Borrower agrees that it is jointly and severally, directly and primarily liable to the Agent and the Lenders for
payment in full of all Secured Obligations, whether for principal, interest or otherwise and that such liability is independent of the duties, obligations, and liabilities of the other Borrowers. The Agent may bring a separate action or actions on
each, any, or all of the Obligations against any Borrower, whether action is brought against the other Borrowers or whether the other Borrowers are joined in such action. In the event that any Borrower fails to make any payment of any Secured
Obligations on or before the due date thereof, the other Borrowers immediately shall cause such payment to be made or each of such Secured Obligations to be performed, kept, observed, or fulfilled. 
 (b) The Loan Documents are a primary and original obligation of each Borrower, are not the creation of a surety relationship,
and are an absolute, unconditional, and continuing promise of payment and performance which shall remain in full force and effect without respect to future changes in conditions, including any change of law or any invalidity or irregularity with
respect to the Loan Documents. Each Borrower agrees that its liability -under the Loan Documents shall be immediate and shall not be contingent upon the exercise or enforcement by Agent of whatever remedies it may have against the other Borrowers,
or the enforcement of any lien or realization upon any security Agent may at any time possess. Each Borrower consents and agrees that Agent shall be under no obligation (under Section 2899 or 3433 of the California Civil Code or otherwise) to
marshal any assets of any Borrower against or in payment of any or all of the Obligations. 
  

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 (c) Each Borrower acknowledges that it is presently informed as to the
financial condition of the other Borrowers and of all other circumstances which a diligent inquiry would reveal and which bear upon the risk of nonpayment of the Obligations. Each Borrower hereby covenants that it will continue to keep informed as
to the financial condition of the other Borrowers, the status of the other Borrowers and of all circumstances which bear upon the risk of nonpayment of the Secured Obligations. Absent a written request from any Borrower to Agent for information,
such Borrower hereby waives any and all rights it may have to require Agent to disclose to such Borrower any information which Agent may now or hereafter acquire concerning the condition or circumstances of the other Borrowers. 
 (d) The liability of each Borrower under the Loan Documents includes Obligations arising under successive transactions
continuing, compromising, extending, increasing, modifying, releasing, or renewing the Obligations, changing the interest rate, payment terms, or other terms and conditions thereof, or creating new or additional Obligations after prior Obligations
have been satisfied in whole or in part. To the maximum extent permitted by law, each Borrower hereby waives any right to revoke its liability under the Loan Documents as to future indebtedness, and in connection therewith, each Borrower hereby
waives any rights it may have under Section 2815 of the California Civil Code. If such a revocation is effective notwithstanding the foregoing waiver, each Borrower acknowledges and agrees that (a) no such revocation shall be effective
until written notice thereof has been received by Agent, (b) no such revocation shall apply to any Secured Obligations in existence on such date (including, any subsequent continuation, extension, or renewal thereof, or change in the interest
rate, payment terms, or other terms and conditions thereof), (c) no such revocation shall apply to any Obligations made or created after such date to the extent made or created pursuant to a legally binding commitment of Agent in existence on
the date of such revocation, (d) no payment by such Borrower or from any other source prior to the date of such revocation shall reduce the maximum obligation of the other Borrowers hereunder, and (e) any payment by such Borrower or from
any source other than Borrowers, subsequent to the date of such revocation, shall first be applied to that portion of the Obligations as to which the revocation is effective and which are not, therefore, guaranteed hereunder, and to the extent so
applied shall not reduce the maximum obligation of each Borrower hereunder. 
 (e) (i) Each Borrower absolutely,
unconditionally, knowingly, and expressly waives (A) notice of acceptance hereof; (B) notice of any loans or other financial accommodations made or extended under the Loan Documents or the creation or existence of any Secured Obligations;
(C) notice of the amount of the Secured Obligations, subject, however, to each Borrower’s right to make inquiry of Agent to ascertain the amount of the Secured Obligations at any reasonable time; (D) notice of any adverse change in
the financial condition of the other Borrowers or of any other fact that might increase such Borrower’s risk hereunder, (E) notice of presentment for payment, demand, protest, and notice thereof as to any instruments among the Loan
Documents; and (F) all notices (except if such notice is specifically required to be given to Borrowers hereunder or under the Loan Documents) and demands to which such Borrower might otherwise be entitled: 
  

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 (ii) its right, under Sections 2845 or 2850 of the California Civil Code,
or otherwise, to require Agent, on behalf of the Lender Group, to institute suit against, or to exhaust any rights and remedies which Agent has or may have against, the other Borrowers or any third party, or against any Collateral provided by the
other Borrowers, or any third party. In this regard, each Borrower agrees that it is bound to the payment of all Secured Obligations, whether now existing or hereafter accruing, as fully as if such Obligations were directly owing to the Lender Group
by such Borrower. Each Borrower further waives any defense arising by reason of any disability or other defense (other than the defense that the Obligations shall have been fully and finally performed and indefeasibly paid) of the other Borrowers or
by reason of the cessation from any cause whatsoever of the liability of the other Borrowers in respect thereof. 
 (iii) (A) any rights to assert against Agent, any Lender, or any Bank Product Provider any defense (legal or equitable), set-off, counterclaim, or claim which such Borrower may now or at any time hereafter have against the other Borrowers
or any other party liable to Agent, any Lender, or any Bank Product Provider; (B) any defense, set-off, counterclaim, or claim, of any kind or nature, arising directly or indirectly from the present or future lack of perfection, sufficiency,
validity, or enforceability of the Secured Obligations or any security therefor, (C) any defense such Borrower has to performance hereunder, and any right such Borrower has to be exonerated, provided by Sections 2819, 2822, or 2825 of the
California Civil Code, or otherwise, arising by reason of the impairment or suspension of Agent’s rights or remedies against the other Borrowers; the alteration by Agent and Lenders of the Obligations; any discharge of the other Borrowers’
obligations to the Lender Group by operation of law as a result of Agent’s intervention or omission; or the acceptance by the Lender Group of anything in partial satisfaction of the Obligations; (D) the benefit of any statute of
limitations affecting such Borrower’s liability hereunder or the enforcement thereof, and any act which shall defer or delay the operation of any statute of limitations applicable to the Obligations shall similarly operate to defer or delay the
operation of such statute of limitations applicable to such Borrower’s liability hereunder. 
 (iv) Each
Borrower absolutely, unconditionally, knowingly, and expressly waives any defense arising by reason of or deriving from (i) any claim or defense based upon an election of remedies by Agent including any defense based upon an election of
remedies by Agent under the provisions of Sections 580a, 580b, 580d, and 726 of the California Code of Civil Procedure or any similar law of California or any other jurisdiction; or (ii) any election by Agent under Bankruptcy Code
Section 1111(b) to limit the amount of, or any collateral securing, the Lender Group’s claim against the Borrowers. Pursuant to California Civil Code Section 2856(b); 
 (A) “Each Borrower waives all rights and defenses arising out of an election of remedies by the creditor, even though
that election of remedies, such as a nonjudicial foreclosure with respect to security for a guaranteed obligation, has destroyed such Borrower’s rights of subrogation and reimbursement against the other Borrowers by the operation of
Section 580(d) of the California Code of Civil Procedure or otherwise.” 
  

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 (B) “Each Borrower waives all rights and defenses that such Borrower
may have because the Obligations are secured by real property. This means, among other things (i) Agent may collect from such Borrower without first foreclosing on any real or personal property collateral pledged by the other Borrower or any
third Person; (ii) if Agent forecloses on any real property collateral pledged by the other Borrower or any third Person: (x) the amount of the Obligations may be reduced only by the price for which that collateral is sold at the
foreclosure sale, even if the collateral is worth more than the sale price; and (y) Agent may collect from such Borrower even if Agent, by foreclosing on the real property collateral, has destroyed any right such Borrower may have to collect
from the other Borrower or any third Person. 
 This is an unconditional and irrevocable waiver of any rights and
defenses each Borrower may have because the Obligations are secured by real property. These rights and defenses include, but are not limited to, any rights or defenses based upon Section 580a, 580b, 580d, or 726 of the California Code of Civil
Procedure.” 
 (v) If any of the Obligations at any time is secured by a mortgage or deed of trust upon
real property, Agent may elect, in its sole discretion, upon a default with respect to the Obligations, to foreclose such mortgage or deed of trust judicially or nonjudicially in any manner permitted by law, before or after enforcing the Loan
Documents, without diminishing or affecting the liability of any Borrower hereunder except to the extent the Obligations are repaid with the proceeds of such foreclosure. Each Borrower understands that (a) by virtue of the operation of
California’s antideficiency law applicable to nonjudicial foreclosures, an election by Agent nonjudicially to foreclose such a mortgage or deed of trust probably would have the effect of impairing or destroying rights of subrogation,
reimbursement, contribution, or indemnity of such Borrower against the other Borrowers or other guarantors or sureties, and (b) absent the waiver given by such Borrower, such an election would prevent Agent from enforcing the Loan Documents
against such Borrower. Understanding the foregoing, and understanding that such Borrower is hereby relinquishing a defense to the enforceability of the Loan Documents, such Borrower hereby waives any right to assert against Agent any defense to the
enforcement of the Loan Documents, whether denominated “estoppel” or otherwise, based on or arising from an election by Agent nonjudicially to foreclose any such mortgage or deed of trust. Each Borrower understands that the effect of the
foregoing waiver may be that each Borrower may have liability hereunder for amounts with respect to which such Borrower may be left without rights of subrogation, reimbursement, contribution, or indemnity against the other Borrower or other
guarantors or sureties. Each Borrower also agrees that the “fair market value” provisions of Section 580a of the California Code of Civil Procedure shall have no applicability with respect to the determination of such Borrower’s
liability under the Loan Documents. 
 (vi) Until such time as all Obligations have been fully, finally, and
indefeasibly paid in full, in cash, each Borrower hereby absolutely, unconditionally, knowingly, and expressly postpones: (1) any right of subrogation such Borrower has or

  

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may have as against the other Borrowers with respect to the Obligations; (2) any right to proceed against the other Borrowers or any other Person, now or hereafter, for contribution,
indemnity, reimbursement, or any other suretyship rights and claims, whether direct or indirect, liquidated or contingent, whether arising under express or implied contract or by operation of law, which such Borrower may now have or hereafter have
as against the other Borrowers with respect to the Obligations; and (3) any right to proceed or seek recourse against or with respect to any property or asset of the other Borrowers. 
 (vii) WITHOUT LIMITING THE GENERALITY OF ANY OTHER WAIVER OR OTHER PROVISION SET FORTH IN THIS SECTION 11.4, EACH
BORROWER HEREBY ABSOLUTELY, KNOWINGLY, UNCONDITIONALLY, AND EXPRESSLY WAIVES AND AGREES NOT TO ASSERT ANY AND ALL BENEFITS OR DEFENSES ARISING DIRECTLY OR INDIRECTLY UNDER ANY ONE OR MORE OF CALIFORNIA CIVIL CODE SECTIONS 2799, 2808, 2809, 2810,
2815, 2819, 2820, 2821, 2822, 2825, 2839, 2845, 2848, 2849, AND 2850, CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS 580a, 580b, 580c, 580d, AND 726, CALIFORNIA UNIFORM COMMERCIAL CODE SECTIONS 3116, 3118, 3119, 3419, 3605, 9610, 9612, 9615, 9624, 9625
AND 9627, AND CHAPTER 2 OF TITLE 14 OF PART 4 OF DIVISION 3 OF THE CALIFORNIA CIVIL CODE. 
 (f) Each Borrower
consents and agrees that, without notice to or by such Borrower, and without affecting or impairing the liability of such Borrower hereunder, Agent may, by action or inaction: 
 (i) compromise, settle, extend the duration or the time for the payment of, or discharge the performance of, or may refuse
to or otherwise not enforce the Loan Documents, or any part thereof, with respect to the other Borrowers; 
 (ii) release the other Borrowers or grant other indulgences to the other Borrowers in respect thereof; or 
 (iii) release or substitute any guarantor, if any, of the Obligations, or enforce, exchange, release, or waive any security for the Obligations or any guaranty of the Obligations, or any portion thereof. 
 (g) Agent shall have the right to seek recourse against each Borrower to the fullest extent provided for herein, and no
election by Agent to proceed in one form of action or proceeding, or against any party, or on any obligation, shall constitute a waiver of Agent’s right to proceed in any other form of action or proceeding or against other parties unless Agent
has expressly waived such right in writing. Specifically, but without limiting the generality of the foregoing, no action or proceeding by Agent under the Loan Documents shall serve to diminish the liability of any Borrower thereunder except to the
extent that Agent finally and unconditionally shall have realized indefeasible payment by such action or proceeding. 
  

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 (h) The Obligations shall not be considered indefeasibly paid for purposes
of this Section 11.4 unless and until all payments to Agent are no longer subject to any right on the part of any Person, including any Borrower, any Borrower as a debtor in possession, or any trustee (whether appointed pursuant to 11
U.S.C., or otherwise) of any Borrower’s assets to invalidate or set aside such payments or to seek to recoup the amount of such payments or any portion thereof, or to declare same to be fraudulent or preferential. Upon such full and final
performance and indefeasible payment of the Obligations, Agent shall have no obligation whatsoever to transfer or assign its interest in the Loan Documents to any Borrower. In the event that, for any reason, any portion of such payments to Agent is
set aside or restored, whether voluntarily or involuntarily, after the making thereof, then the obligation intended to be satisfied thereby shall be revived and continued in full force and effect as if said payment or payments had not been made, and
each Borrower shall be liable for the full amount Agent is required to repay plus any and all costs and expenses (including attorneys’ fees and attorneys’ fees incurred pursuant to 11 U.S.C.) paid by Agent in connection therewith.

 (i) Each Borrower warrants and agrees that each of the waivers and consents set forth herein are made after
consultation with legal counsel and with full knowledge of their significance and consequences, with the understanding that events giving rise to any defense or right waived may diminish, destroy or otherwise adversely affect rights which a Borrower
otherwise may have against the other Borrower, the Lender Group or others, or against Collateral. If any of the waivers or consents herein are determined to be contrary to any applicable law or public policy, such waivers and consents shall be
effective to the maximum extent permitted by law. 
 11.5. Costs and Expenses of Agent and Lenders.

 (a) The Borrowers shall pay from time to time on demand all costs of collection, Lender Expenses and all
reasonable costs, expenses, and disbursements (including reasonable attorneys’ fees and expenses) which are incurred by Agent in connection with the preparation, negotiation, execution, administration and delivery of this Agreement and of any
other Loan Documents, and all other reasonable costs, expenses, and disbursements which may be incurred in connection with or in respect to the credit facility contemplated hereby or which otherwise are incurred with respect to the Obligations.

 (b) The Borrowers shall pay from time to time on demand all Lender Expenses (including reasonable
attorneys’ and solicitors’ fees and reasonable attorneys’ and solicitors’ expenses) incurred, following the occurrence of any Event of Default, by the Lenders or Agent. 
 (c) Each Borrower authorizes the Agent to pay all such fees and expenses, and in the Agent’s discretion, to add such
fees and expenses to the Loan Account. 
 (d) The undertaking on the part of each Borrower in this
Section 11.5 shall survive payment of the Obligations and/or any termination, release, or discharge executed by any Agent in favor of any Borrower, other than a termination, release, or discharge which makes specific reference to this
Section 11.5. 
  

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 12. NOTICES. 
 Unless otherwise provided in this Agreement, all notices or demands by any party relating to this Agreement or any other Loan Document shall
be in writing and (except for financial statements and other informational documents which may be sent by first-class mail, postage prepaid) shall be personally delivered or sent by registered or certified mail (postage prepaid, return receipt
requested), overnight courier, or telefacsimile to Borrowers or to Agent, as the case may be, at its address set forth below: 
  

			
	If to Borrowers:	  	 LESLIE’S POOLMART, INC.
 3925 E. Broadway Road
 Suite 100
 Phoenix, Arizona 85040
 Attn: Chief Financial Officer
 Fax No. 602-366-3942

		
	with copies to:	  	 GIBSON, DUNN & CRUTCHER LLP
 333 South Grand Avenue
 Los Angeles, California 90071-3197
 Attn: Brian D. Kilb, Esq.
 Fax No. 213.229.7520

		
	If to Agent or the Lender Group:	  	 WELLS FARGO RETAIL FINANCE, LLC
 One Boston Place
 18th Floor
 Boston, Massachusetts 02108
 Attn: Jennifer Blanchette
 Fax No. 617.523.4029

		
	with copies to:	  	 BROWN RUDNICK LLP
 One
Financial Center
 Boston, MA 02111
 Attn: Steven B. Levine, Esq.
 Fax : 617.856.8201

 The parties hereto may change the address at which they are to receive notices
hereunder, by notice in writing in the foregoing manner given to the other. All notices or demands sent in accordance with this Section 12, other than notices by Agent in connection with Sections 9-504 or 9-505 of the Code, shall be
deemed received on the earlier of the date of actual receipt or three days after the deposit thereof in the mail. Each Borrower acknowledges and agrees that notices sent by Agent in connection with Sections 9-610, 9-611, 9-612, or 9-620 of the Code
shall be deemed sent when deposited in the mail or personally delivered, or, where permitted by law, transmitted by telefacsimile or other similar method set forth above. 
  

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 13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER. 
 THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT), THE
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA. THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL
COURTS LOCATED IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA OR, AT THE SOLE OPTION OF THE LENDER GROUP, IN ANY OTHER COURT IN WHICH THE LENDER GROUP SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER JURISDICTION OVER
THE MATTER IN CONTROVERSY. EACH BORROWER AND EACH MEMBER OF THE LENDER GROUP WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY
PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 13. EACH BORROWER AND EACH MEMBER OF THE LENDER GROUP HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN
DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH BORROWER AND EACH MEMBER OF THE LENDER GROUP REPRESENTS THAT IT HAS REVIEWED
THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT. 
 14. DESTRUCTION OF BORROWERS’ DOCUMENTS. 
 All documents, schedules, invoices, agings, or other papers delivered to Agent may be destroyed or otherwise disposed of by Agent four months after they are delivered to or received by Agent, unless
Borrowers requests, in writing, the return of said documents, schedules, or other papers and makes arrangements, at Borrowers’ expense, for their return. 
  

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 15. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS. 
 15.1. Assignments and Participations. 
 (a) Any Lender may, subject to the terms and conditions of this Section 15, assign and delegate to one or more
Eligible Transferees or, with the prior written consent of Agent, Issuing Bank, and Borrowers (provided, however, that Borrowers’ consent shall not be required if an Event of Default has occurred and is continuing), any other Person (each an
“Assignee”) all, or any ratable part, of the Obligations, the Commitments, and the other rights and obligations of such Lender hereunder and under the other Loan Documents, in a minimum amount of $5,000,000, which assignment shall
not become effective until (i) written notice of such assignment, together with payment instructions, addresses, and related information with respect to the Assignee, shall have been given to Borrowers and Agent by such Lender and the Assignee;
(ii) such Lender and its Assignee shall have delivered to Borrowers and Agent a fully executed Assignment and Acceptance (“Assignment and Acceptance”) in the form of Exhibit A-1; and (iii) the assignor Lender or
Assignee has paid to Agent for Agent’s sole and separate account a processing fee in the amount of $5,000. Anything contained herein to the contrary notwithstanding, the consent of Agent shall not be required (and payment of any fees shall not
be required) if such assignment is in connection with any merger, consolidation, sale, transfer, or other disposition of all or any substantial portion of the business or loan portfolio of such Lender. 
 (b) From and after the date that Agent notifies the assignor Lender that it has received a fully executed Assignment and
Acceptance and payment of the above-referenced processing fee, (i) the Assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance,
shall have the rights and obligations of a Lender under the Loan Documents, and (ii) the assignor Lender shall, to the extent that rights and obligations hereunder and under the other Loan Documents have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its obligations under this Agreement (and in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender’s rights and obligations
under this Agreement and the other Loan Documents, such Lender shall cease to be a party hereto and thereto). 
 (c) By executing and delivering an Assignment and Acceptance, the assigning Lender thereunder and the Assignee thereunder confirm to and agree with each other and the other parties hereto as follows: (1) other than as provided in such
Assignment and Acceptance, such assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties, or representations made in or in connection with this Agreement or the execution,
legality, validity, enforceability, genuineness, sufficiency, or value of this Agreement or any other Loan Document furnished pursuant hereto; (2) such assigning Lender makes no representation or warranty and assumes no responsibility with
respect to the financial condition of Borrowers or any guarantor or the performance or observance by Borrowers or any guarantor of any of its obligations under this Agreement or any other Loan Document furnished pursuant hereto; (3) such
Assignee confirms that it has received a copy of this Agreement, together with such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (4) such
Assignee will, independently and without reliance upon Agent, such assigning Lender, or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (5) such Assignee appoints and authorizes Agent to take such action as agent on its behalf and to exercise such powers under this Agreement as are delegated to Agent by the terms hereof, together with
such powers as are reasonably incidental thereto; and (6) such Assignee agrees that it will perform in accordance with their terms all of the obligations which by the terms of this Agreement are required to be performed by it as a Lender.

  

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 (d) Immediately upon each Assignee’s making its processing fee payment
under the Assignment and Acceptance, this Agreement shall be deemed to be amended to the extent, but only to the extent, necessary to reflect the addition of the Assignee and the resulting adjustment of the Commitments of the Assignor and Assignee
arising therefrom. The Commitment allocated to each Assignee shall reduce such Commitment of the assigning Lender pro tanto. 
 (e) Any Lender may at any time, with the written consent of Agent, which consent shall not be unreasonably withheld, sell to one or more Persons (a “Participant”) participating interests
in the Obligations, the Commitment, and the other rights and interests of that Lender (the “Originating Lender”) hereunder and under the other Loan Documents; provided, however, that (i) the Originating Lender’s
obligations under this Agreement shall remain unchanged, (ii) the Originating Lender shall remain solely responsible for the performance of such obligations, (iii) Borrowers and Agent shall continue to deal solely and directly with the
Originating Lender in connection with the Originating Lender’s rights and obligations under this Agreement and the other Loan Documents, (iv) no Originating Lender shall transfer or grant any participating interest under which the
Participant has any right to approve or consent to, or vote with respect to, any amendment to, or waiver with respect to, this Agreement or any other Loan Document, except to the extent such amendment to, or consent or waiver with respect to this
Agreement or of any other Loan Document would (A) extend the final maturity date of the Obligations hereunder in which such participant is participating; (B) reduce the interest rate applicable to the Obligations hereunder in which such
Participant is participating; (C) release all or a material portion of the Collateral (except to the extent expressly provided herein or in any of the Loan Documents) supporting the Obligations hereunder in which such Participant is
participating; (D) postpone the payment of or reduce the amount of, the interest or fees hereunder in which such Participant is participating; or (E) change the amount or due dates of scheduled principal repayments or prepayments or fees
in respect of the Obligations hereunder in which such Participant is participating; and (v) all amounts payable by Borrowers hereunder shall be determined as if such Originating Lender had not sold such participation. The rights of any
Participant shall only be derivative through the Originating Lender with whom such Participant participates and no Participant shall have any direct rights as to the other Lenders, Agent, Borrowers, the Collections, the Collateral, or otherwise in
respect of the Advances or the Letters of Credit. No Participant shall have the right to participate directly in the making of decisions by the Lenders among themselves. 
 (f) In connection with any such assignment or participation or proposed assignment or participation, a Lender may disclose to
the proposed assignee or participant all documents and information which it now or hereafter may have relating to Borrowers or Borrowers’ business if such Person has agreed to be bound by the confidentiality provisions of this Agreement.

 (g) Notwithstanding any other provision in this Agreement, any Lender may at any time create a security
interest in, or pledge, all or any portion of its rights under and interest in this Agreement in favor of any Federal Reserve Bank in accordance with Regulation A of the FRB or U.S. Treasury Regulation 31 CFR §203.14, and such Federal Reserve
Bank may enforce such pledge or security interest in any manner permitted under applicable law. 
  

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 15.2. Successors. This Agreement shall bind and inure to the benefit
of the respective successors and permitted assigns of each of the parties; provided, however, that no Borrower may assign this Agreement or any rights or duties hereunder without the Lenders’ prior written consent and any prohibited assignment
shall be absolutely void. No consent to assignment by the Lenders shall release Borrower from its Obligations. A Lender may assign this Agreement and its rights and duties hereunder pursuant to Section 15.1 and, except as expressly
required pursuant to Section 15.1, no consent or approval by Borrower is required in connection with any such assignment. 
 16. AMENDMENTS; WAIVERS. 
 16.1. Amendments and Waivers. No amendment or waiver of any
provision of this Agreement or any other Loan Document, and no consent with respect to any departure by Borrowers therefrom, shall be effective unless the same shall be in writing and signed by the Required Lenders (or by Agent at the written
request of the Required Lenders) and Borrowers and then any such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such waiver, amendment, or consent shall,
unless in writing and signed by all the Lenders and Borrowers and acknowledged by Agent, do any of the following: 
 (a) increase or extend the Commitment of any Lender; 
 (b) postpone or delay any date fixed by this
Agreement or any other Loan Document for any payment of principal, interest, fees, or other amounts due to the Lenders (or any of them) hereunder or under any other Loan Document; 
 (c) reduce the principal of, or the rate of interest specified herein on, any Loan, or any fees or other amounts payable
hereunder or under any other Loan Document; 
 (d) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Advances which is required for the Lenders or any of them to take any action hereunder; 
 (e) amend this Section or any provision of the Agreement providing for consent or other action by all Lenders; 
 (f) release Collateral other than as permitted by Section 17.11; 
 (g) change the
definition of “Required Lenders”; 
 (h) release Borrowers from any Obligation for the payment of
money; or 
 (i) amend any of the provisions of Article 17. 
  

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 and, provided further that no amendment, waiver or consent shall affect the rights or duties of Agent or
Issuing Bank under this Agreement or any other Loan Document unless in writing and signed by Agent or Issuing Bank, as applicable; and, provided further, that the limitation contained in clause (d) above shall not be deemed to limit the ability
of Agent to make Advances or Agent Loans, as applicable, in accordance with the provisions of Sections 2.1(i), 2.1(j), or 2.1(k). The foregoing notwithstanding, any amendment, modification, waiver, consent, termination, or
release of or with respect to any provision of this Agreement or any other Loan Document that relates only to the relationship of the Lender Group among themselves, and that does not affect the rights or obligations of Borrowers, shall not require
consent by or the agreement of Borrowers. 
 16.2. No Waivers; Cumulative Remedies. No failure by Agent or
any Lender to exercise any right, remedy, or option under this Agreement, any other Loan Document, or any present or future supplement hereto or thereto, or in any other agreement between or among Borrowers and Agent and/or any Lender, or delay by
Agent or any Lender in exercising the same, will operate as a waiver thereof. No waiver by Agent or any Lender will be effective unless it is in writing, and then only to the extent specifically stated. No waiver by Agent or the Lenders on any
occasion shall affect or diminish Agent’s and each Lender’s rights thereafter to require strict performance by Borrowers of any provision of this Agreement. Agent’s and each Lender’s rights under this Agreement and the other Loan
Documents will be cumulative and not exclusive of any other right or remedy which Agent or any Lender may have. 
 16.3. Replacement of Holdout Lender. If any action to be taken by the Lenders or Agent hereunder requires the unanimous consent, authorization, or agreement of all Lenders, and a Lender (“Holdout Lender”) fails to
give its consent, authorization, or agreement, then Agent, upon at least 5 Business Days prior irrevocable notice to the Holdout Lender may permanently replace the Holdout Lender with one or more substitute Lenders (each, a “Replacement
Lender”), and the Holdout Lender shall have no right to refuse to be replaced hereunder. Such notice to replace the Holdout Lender shall specify an effective date for such replacement, which date shall not be later than 15 Business Days
after the date such notice is given. Prior to the effective date of such replacement, the Holdout Lender and each Replacement Lender shall execute and deliver an Assignment and Acceptance Agreement, subject only to the Holdout Lender being repaid
its share of the outstanding Obligations (including an assumption of its Pro Rata Share of the Risk Participation Liability) without any premium or penalty of any kind whatsoever. If the Holdout Lender shall refuse or fail to execute and deliver any
such Assignment and Acceptance Agreement prior to the effective date of such replacement, the Holdout Lender shall be deemed to have executed and delivered such Assignment and Acceptance Agreement. The replacement of any Holdout Lender shall be made
in accordance with the terms of Section 15.1. Until such time as the Replacement Lenders shall have acquired all of the Obligations, the Commitments, and the other rights and obligations of the Holdout Lender hereunder and under the
other Loan Documents, the Holdout Lender shall remain obligated to make the Holdout Lender’s Pro Rata Share of Advances and to purchase a participation in each Letter of Credit, in an amount equal to its Pro Rata Share of the Risk Participation
Liability of such Letter of Credit. 
  

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 17. AGENT; THE LENDER GROUP. 
 17.1. Appointment and Authorization of Agent. Each Lender (on its own behalf and on behalf of any Affiliate which is a
Bank Product Provider) hereby designates and appoints WFRF as its Agent under this Agreement and the other Loan Documents and each Lender (on its own behalf and on behalf of any Affiliate which is a Bank Product Provider) hereby irrevocably
authorizes Agent to take such action on its behalf under the provisions of this Agreement and each other Loan Document and to exercise such powers and perform such duties as are expressly delegated to it by the terms of this Agreement or any other
Loan Document, together with such powers as are reasonably incidental thereto. Agent agrees to act as such on the express conditions contained in this Article 17. The provisions of this Article 17 are solely for the benefit of Agent
and the Lenders, and Borrowers shall not have any rights as a third party beneficiary of any of the provisions contained herein; provided, however, that the provisions of Sections 17.10, 17.11, and 17.16(d) also shall be for the
benefit of Borrowers. Any provision to the contrary contained elsewhere in this Agreement or in any other Loan Document notwithstanding, Agent shall not have any duties or responsibilities, except those expressly set forth herein, nor shall Agent
have or be deemed to have any fiduciary or other non-contractual relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations, or liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against Agent. Except as expressly otherwise provided in this Agreement, Agent shall have and may use its sole discretion with respect to exercising or refraining from exercising any discretionary rights or taking or refraining from
taking any actions which Agent is expressly entitled to take or assert under or pursuant to this Agreement and the other Loan Documents, including making the determinations contemplated by Section 2.1(b). Without limiting the generality
of the foregoing, or of any other provision of the Loan Documents that provides rights or powers to Agent, Lenders agree that Agent shall have the right to exercise the following powers as long as this Agreement remains in effect: (a) maintain,
in accordance with its customary business practices, ledgers and records reflecting the status of the Advances, the Collateral, the Collections, and related matters; (b) execute and/or file any and all financing or similar statements or
notices, amendments, renewals, supplements, documents, instruments, proofs of claim for Lenders, notices and other written agreements with respect to the Loan Documents; (c) make Advances for itself or on behalf of Lenders as provided in the
Loan Documents; (d) exclusively receive, apply, and distribute the Collections as provided in the Loan Documents; (e) open and maintain such bank accounts and lock boxes as Agent deems necessary and appropriate in accordance with the Loan
Documents for the foregoing purposes with respect to the Collateral and the Collections; (f) perform, exercise, and enforce any and all other rights and remedies of the Lender Group with respect to Borrowers, the Advances, the Collateral, the
Collections, or otherwise related to any of same as provided in the Loan Documents; (g) incur and pay such Lender Group Expenses as Agent may deem necessary or appropriate for the performance and fulfillment of its functions and powers pursuant
to the Loan Documents; and (h) incur the Agent’s Cover. 
 17.2. Delegation of Duties. Except as
otherwise provided in this Section, Agent may execute any of its duties under this Agreement or any other Loan Document by or through agents, employees, or attorneys-in-fact and shall be entitled to advice of counsel

  

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concerning all matters pertaining to such duties. Agent shall not be responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects as long as such selection was
made in compliance with this Section and without gross negligence or willful misconduct. The foregoing notwithstanding, Agent shall not make any material delegation of duties to subagents or non-employee delegees without the prior written consent of
Required Lenders (it being understood that routine delegation of such administrative matters as filing financing statements, or conducting appraisals or audits, is not viewed as a material delegation that requires prior Required Lender approval).

 17.3. Liability of Agent-Related Persons. None of the Agent-Related Persons shall (i) be liable
for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Loan Document or the transactions contemplated hereby (except for its own gross negligence or willful misconduct), or, (ii) be
responsible in any manner to any of the Lenders for any recital, statement, representation or warranty made by Borrower, or any Subsidiary or Affiliate of any Borrower, or any officer or director thereof, contained in this Agreement or in any other
Loan Document, or in any certificate, report, statement, or other document referred to or provided for in, or received by Agent under or in connection with, this Agreement or any other Loan Document, or the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document, or for any failure of any Borrower or any other party to any Loan Document to perform its obligations hereunder or thereunder. No Agent-Related Person shall be under any
obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the properties, books, or records of any
Borrower, or any of such Borrower’s Subsidiaries or Affiliates. Agent may employ attorneys, accountants, and other professionals and agents and attorneys-in-fact and shall not be responsible for the negligence or misconduct of any such
attorneys, accountants, and other professionals or agents or attorneys-in-fact selected by the Agent with reasonable care. No such attorney, accountant, other professional, agent, or attorney-in-fact shall be responsible for any action taken or
omitted to be taken by any other such Person. Neither Agent, nor any of its directors, officers, or employees shall be responsible for any action taken or omitted to be taken or omitted to be taken by any other of them in connection herewith in
reliance upon advice of counsel nor, in any other event except for any action taken or omitted to be taken as to which a final judicial determination has been or is made (in a proceeding in which such Person has had an opportunity to be heard) that
such Person had acted in a grossly negligent manner, in actual bad faith, or in willful misconduct. Agent shall not have any responsibility in any event for more funds than that Agent actually receives and collects. 
 17.4. Reliance by Agent. Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing,
resolution, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex, or telephone message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent, or made by the proper
Person or Persons, and upon advice and statements of legal counsel (including counsel to Borrowers or counsel to any Lender), independent accountants, and other experts selected by Agent. Agent shall be fully justified in failing or refusing to take
any action under this Agreement or any other Loan Document unless it

  

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shall first receive such advice or concurrence of the Required Lenders or all Lenders, as applicable, and until such instructions are received, Agent shall act, or refrain from acting, as it
deems advisable so long as it is not grossly negligent or guilty of willful misconduct. If Agent so requests, it shall first be indemnified to its reasonable satisfaction by Lenders against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action. Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of the
Required Lenders or all Lenders, as applicable, and such request and any action taken or failure to act pursuant thereto shall be binding upon all of the Lenders. 
 17.5. Notice of Default or Event of Default. Agent shall not be deemed to have knowledge or notice of the occurrence
of any Default or Event of Default, except with respect to defaults in the payment of principal, interest, fees, and expenses required to be paid to Agent for the account of Agent or the Lenders, except with respect to Defaults and Events of Default
of which Agent has actual knowledge, unless Agent shall have received written notice from a Lender or Borrower referring to this Agreement, describing such Default or Event of Default, and stating that such notice is a “notice of default.”
Agent promptly will notify the Lenders of its receipt of any such notice or of any Event of Default of which Agent has, or is deemed to have, actual knowledge. If any Lender obtains actual knowledge of any Event of Default, such Lender promptly
shall notify the other Lenders and Agent of such Event of Default. Each Lender shall be solely responsible for giving any notices to its Participants, if any. Subject to Section 17.4, Agent shall take such action with respect to such
Default or Event of Default as may be requested by the Required Lenders; provided, however, that: 
 (a) At all
times, Agent may propose and, with the consent of Required Lenders (which shall not be unreasonably withheld and which shall be deemed to have been given by a Lender unless such Lender has notified Agent to the contrary in writing within three
Business Days of notification of such proposed actions by Agent) exercise, any remedies on behalf of the Lender Group; and 
 (b) At all times, once Required Lenders or all Lenders, as the case may be, have approved the exercise of a particular remedy or pursuit of a course of action, Agent may, but shall not be obligated to,
make all administrative decisions in connection therewith or take all other actions reasonably incidental thereto (for example, if the Required Lenders approve the foreclosure of certain Collateral, Agent shall not be required to seek consent for
the administrative aspects of conducting such sale or handling of such Collateral). 
 17.6. Credit
Decision. Each Lender acknowledges that none of the Agent-Related Persons has made any representation or warranty to it, and that no act by Agent hereinafter taken, including any review of the affairs of Borrowers and their Subsidiaries or
Affiliates, shall be deemed to constitute any representation or warranty by any Agent-Related Person to any Lender. Each Lender represents to Agent that it has, independently and without reliance upon any Agent-Related Person and based on such
documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, property, financial and other

  

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condition, and creditworthiness of Borrowers and any other Person (other than the Lender Group) party to a Loan Document, and all applicable bank regulatory laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and to extend credit to Borrowers. Each Lender also represents that it will, independently and without reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals, and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigations as it deems
necessary to inform itself as to the business, prospects, operations, property, financial and other condition, and creditworthiness of Borrowers, and any other Person (other than the Lender Group) party to a Loan Document. Except for notices,
reports, and other documents expressly herein required to be furnished to the Lenders by Agent, Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, prospects,
operations, property, financial and other condition, or creditworthiness of Borrowers, and any other Person party to a Loan Document that may come into the possession of any of the Agent-Related Persons. 
 17.7. Costs and Expenses; Indemnification. Agent may incur and pay Lender Group Expenses to the extent Agent deems
reasonably necessary or appropriate for the performance and fulfillment of its functions, powers, and obligations pursuant to the Loan Documents, including without limiting the generality of the foregoing, but subject to any requirements of the Loan
Documents that it obtain any applicable consents or engage in any required consultation, court costs, reasonable attorneys fees and expenses, costs of collection by outside collection agencies and auctioneer fees and costs of security guards or
insurance premiums paid to maintain the Collateral, whether or not Borrowers are obligated to reimburse Agent or Lenders for such expenses pursuant to the Loan Agreement or otherwise. Agent is authorized and directed to deduct and retain sufficient
amounts from Collections to reimburse Agent for such out-of-pocket costs and expenses prior to the distribution of any amounts to Lenders. In the event Agent is not reimbursed for such costs and expenses from Collections, each Lender hereby agrees
that it is and shall be obligated to pay to or reimburse Agent for the amount of such Lender’s Pro Rata Share thereof. Whether or not the transactions contemplated hereby are consummated, the Lenders shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of Borrowers and without limiting the obligation of Borrowers to do so), according to their Pro Rata Shares, from and against any and all Indemnified Liabilities; provided, however,
that no Lender shall be liable for the payment to the Agent-Related Persons of any portion of such Indemnified Liabilities resulting solely from such Person’s gross negligence, bad faith, or willful misconduct. Without limitation of the
foregoing, each Lender shall reimburse Agent upon demand for its ratable share of any costs or out-of-pocket expenses (including attorney fees and expenses) incurred by Agent in connection with the preparation, execution, delivery, administration,
modification, amendment, or enforcement (whether through negotiations, legal proceedings or otherwise) of or legal advice in respect of rights or responsibilities under, this Agreement, any other Loan Document, or any document contemplated by or
referred to herein, to the extent that Agent is not reimbursed for such expenses by or on behalf of Borrowers. The undertaking in this Section 17.7 shall survive the payment of all Obligations hereunder and the resignation or replacement
of Agent. 
  

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 17.8. Agent in Individual Capacity. WFRF and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from, acquire equity interests, in and generally engage in any kind of banking, trust, financial advisory, underwriting, or other business with Borrowers and their Subsidiaries
and Affiliates and any other Person party to any Loan Documents as though WFRF were not Agent hereunder without notice to or consent of the Lenders. The Lenders acknowledge that, pursuant to such activities, WFRF and its Affiliates may receive
information regarding Borrowers or its Affiliates and any other Person party to any Loan Documents that is subject to confidentiality obligations in favor of Borrowers or such other Person and that prohibit the disclosure of such information to the
Lenders, and the Lenders acknowledge that, in such circumstances (and in the absence of a waiver of such confidentiality obligations, which waiver Agent will use its reasonable best efforts to obtain), Agent shall be under no obligation to provide
such information to them. With respect to the Agent Loans and Agent Protective Advances, WFRF shall have the same rights and powers under this Agreement as any other Lender and may exercise the same as though it were not Agent, and the terms
“Lender” and “Lenders” include WFRF in its individual capacity. 
 17.9. Successor
Agent. Agent may resign as Agent following notice of such resignation (“Notice”) to the Lenders and Borrowers, and effective upon the appointment of and acceptance of such appointment by, a successor Agent. If Agent resigns
under this Agreement, the Required Lenders shall appoint any Lender or Eligible Transferee as successor Agent for the Lenders. If no successor Agent is appointed within 30 days of such retiring Agent’s Notice, Agent may appoint a successor
Agent, after consulting with the Lenders and Borrowers. In any such event, upon the acceptance of its appointment as successor Agent hereunder, such successor Agent shall succeed to all the rights, powers and duties of the retiring Agent and the
term “Agent” shall mean such successor Agent and the retiring Agent’s appointment, powers, and duties as Agent shall be terminated. After any retiring Agent’s resignation hereunder as Agent, the provisions of this
Section 16.3 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement. 
 17.10. Withholding Tax. 
 (a) If any Lender is a
“foreign corporation, partnership or trust” within the meaning of the IRC and such Lender claims exemption from, or a reduction of, U.S. withholding tax under Sections 871, 881, 1441 or 1442 of the IRC, such Lender agrees with and in favor
of Agent and Borrowers, to deliver to Agent and Borrowers, whichever of the following is applicable: 
 (i)
properly completed copies of IRS Form W-8BEN claiming eligibility for benefits of an income tax treaty to which the United States of America is a party, 
 (ii) properly completed copies of IRS Form W-8ECI, 
  

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 (iii) in the event the Lender is claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the IRC, (x) a certificate, in form reasonably acceptable to the Borrowers, to the effect that the Lender is not (A) a “bank” within the meaning of Section 881(c)(3)(A) of the
IRC, (B) a “10 percent shareholder” of any Borrower within the meaning of Section 881(c)(3)(B) of the IRC, or (C) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the IRC and
(y) properly completed copies of Internal Revenue Service Form W-8BEN, or 
 (iv) any other form prescribed
by applicable law as a basis for claiming exemption from or a reduction in United States Federal withholding Tax properly completed together with such supplementary documentation as may be prescribed by applicable law to permit the Borrowers to
determine the withholding or deduction required to be made. 
 Such Lender agrees to promptly notify Agent and Borrowers of any
change in circumstances which would modify or render invalid any claimed exemption or reduction. 
 (b) If any
Lender claiming exemption from United States withholding tax by filing IRS Form 4224 with Agent sells, assigns, grants a participation in, or otherwise transfers all or part of the Obligations of Borrowers to such Lender, such Lender agrees to
undertake sole responsibility for complying with the withholding tax requirements imposed by Sections 1441 and 1442 of the IRC. 
 (c) If any Lender is entitled to a reduction in the applicable withholding Tax, Agent may withhold from any interest payment to such Lender an amount equivalent to the applicable withholding Tax after
taking into account such reduction. If the forms or other documentation required by subsection (a) of this Section are not delivered to Agent, then Agent may withhold from any interest payment to such Lender not providing such forms or other
documentation an amount equivalent to the applicable withholding Tax. 
 (d) If the IRS or any other Governmental
Authority of the United States or other jurisdiction asserts a claim that Agent or Borrowers did not properly withhold Tax from amounts paid to or for the account of any Lender (because the appropriate form was not delivered, was not properly
executed, or because such Lender failed to notify Agent and Borrowers of a change in circumstances which rendered the exemption from, or reduction of, withholding Tax ineffective, or for any other reason) such Lender shall indemnify Agent and
Borrowers fully for all amounts paid, directly or indirectly, by Agent or Borrowers as Tax or otherwise, including penalties and interest, and including any Taxes imposed by any jurisdiction on the amounts payable to Agent or Borrowers under this
Section, together with all costs and expenses (including attorneys fees and expenses). The obligation of the Lenders under this subsection shall survive the payment of all Obligations and the resignation of Agent. 
 17.11. Collateral Matters. 
 (a) The Lenders hereby irrevocably authorize Agent to release any Lien on any Collateral (i) upon the termination of the
Commitments and payment and satisfaction in full by Borrowers of all Obligations; and upon such termination and payment Agent shall deliver to Borrowers, at Borrowers’ sole cost and expense, all UCC termination statements and any other
documents necessary to terminate the Loan Documents and release the Liens with respect to the

  

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Collateral; (ii) constituting property being sold or disposed of if a release is required or desirable in connection therewith and if Borrowers certify to Agent that the sale or disposition
is permitted under Section 7.4 of this Agreement or the other Loan Documents (and Agent may rely conclusively on any such certificate, without further inquiry); (iii) constituting property in which Borrowers owned no interest at the
time the Lien was granted or at any time thereafter, or (iv) constituting property leased to Borrowers under a lease that has expired or been terminated in a transaction permitted under this Agreement. Except as provided above, Agent will not
release any Lien on any Collateral without the prior written authorization of the Lenders; provided, however, that Agent may, in its discretion, without prior authorization of Lenders, release any Lien on Collateral where the value of such
Collateral released at any one time is not in excess of $100,000 and the value of all such Collateral released in any calendar year is not in excess of $250,000. Upon request by Agent or Borrowers at any time, the Lenders will confirm in writing
Agent’s authority to release any such Liens on particular types or items of Collateral pursuant to this Section 17.11; provided, however, that (i) Agent shall not be required to execute any document necessary to evidence such
release on terms that, in Agent’s reasonable opinion, would expose Agent to liability or create any obligation or entail any consequence other than the release of such Lien without recourse, representation, or warranty, and (ii) such
release shall not in any manner discharge, affect or impair the Obligations or any Liens (other than those expressly being released), upon (or obligations of Borrowers in respect of) all interests retained by Borrowers, including, the proceeds of
any sale, all of which shall continue to constitute part of the Collateral. 
 (b) Agent shall have no obligation
whatsoever to any of the Lenders to assure that the Collateral exists or is owned by Borrowers, is cared for, protected, or insured or has been encumbered, or that the Liens of the Agent (for the benefit of the Lender Group) have been properly or
sufficiently or lawfully created, perfected, protected, or enforced or are entitled to any particular priority, or to exercise at all or in any particular manner or under any duty of care, disclosure, or fidelity, or to continue exercising, any of
the rights, authorities and powers granted or available to Agent pursuant to any of the Loan Documents, it being understood and agreed that in respect of the Collateral, or any act, omission or event related thereto, subject to the terms and
conditions contained herein, Agent may act in any manner it may deem appropriate, in its sole discretion given Agent’s own interest in the Collateral in its capacity as one of the Lenders and that Agent shall have no other duty or liability
whatsoever to any Lender as to any of the foregoing, except as otherwise provided herein. 
 17.12.
Restrictions on Actions by Lenders; Sharing of Payments. 
 (a) Agent, in its reasonable discretion based
upon its determination of the likelihood that additional payments will be received, expenses incurred, and/or claims made by third parties to all or a portion of such proceeds, may delay the distribution of any payment received on account of the
Secured Obligations. 
 (b) Agent may disburse funds prior to determining that the sums that Agent expects to
receive have been finally and unconditionally paid to that Agent. If and to the extent that Agent does disburse funds and it later becomes apparent that the Agent did not then receive a payment in an amount equal to the sum paid out, then any Lender
to whom the Agent made the funds available, on demand from the Agent, shall refund to the Agent the sum paid to that Person. 
  

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 (c) If, in the opinion of the Agent, the distribution of any amount received
by Agent might involve Agent in liability, or might be prohibited hereby, or might be questioned by any Person, then Agent may refrain from making distribution until Agent’s right to make distribution has been adjudicated by a court of
competent jurisdiction. 
 (d) Each Lender recognizes that the crediting the Borrowers with the
“proceeds” of any transaction in which a Post Foreclosure Asset is acquired is a non-cash transaction and that, in consequence, no distribution of such “proceeds” will be made by the Agent to any Lender. 
 (e) In the event that (x) a court of competent jurisdiction shall adjudge that any amount received and distributed by
the Agent is required to be repaid or disgorged or (y) those Lenders adversely affected thereby determine to effect such repayment or disgorgement, then each Lender to which any such distribution shall have been made shall repay, to the Agent
which had made such distribution, that Lender’s Pro-Rata share of the amount so adjudged or determined to be repaid or disgorged. 
 (f) Each of the Lenders agrees that it shall not, absent the occurrence and continuation of an Event of Default, and that it shall, to the extent that it is lawfully entitled to do so, upon the request of
the Agent, set off against the Obligations any amounts owing by such Lender to Borrowers or any accounts of Borrowers now or hereafter maintained with such Lender. Each of the Lenders further agrees that it shall not, unless specifically requested
to do so by Agent, take or cause to be taken any action, including the commencement of any legal or equitable proceedings, to foreclose any Lien on, or otherwise enforce any security interest in, any of the Collateral the purpose of which is, or
could be, to give such Lender any preference or priority against the other Lenders with respect to the Collateral. 
 (g) Subject to Section 17.8, if at any time or times any Lender shall receive (i) by payment, foreclosure, setoff, or otherwise, any proceeds of Collateral or any payments with respect to the Obligations of Borrowers to
such Lender arising under, or relating to, this Agreement or the other Loan Documents, except for any such proceeds or payments received by such Lender from Agent pursuant to the terms of this Agreement, or (ii) payments from Agent in excess of
such Lender’s Pro Rata Share of all such distributions by Agent, such Lender shall promptly (1) turn the same over to Agent, in kind, and with such endorsements as may be required to negotiate the same to Agent, or in same day funds, as
applicable, for the account of all of the Lenders and for application to the Obligations in accordance with the applicable provisions of this Agreement, or (2) purchase, without recourse or warranty, an undivided interest and participation in
the Obligations owed to the other Lenders so that such excess payment received shall be applied ratably as among the Lenders in accordance with their Pro Rata Shares; provided, however, that if all or part of such excess payment received by the
purchasing party is thereafter recovered from it, those purchases of participations shall be rescinded in whole or in part, as applicable, and the applicable portion of the purchase price paid therefor shall be returned to such purchasing party, but
without interest except to the extent that such purchasing party is required to pay interest in connection with the recovery of the excess payment. 
  

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 17.13. Agency for Perfection. Agent and each Lender hereby appoints
each other Lender as agent for the purpose of perfecting the Liens of the Lender Group in assets which, in accordance with Article 9 of the UCC can be perfected only by possession. Should any Lender obtain possession of any such Collateral, such
Lender shall notify Agent thereof, and, promptly upon Agent’s request therefor shall deliver such Collateral to Agent or in accordance with Agent’s instructions. 
 17.14. Payments by Agent to the Lenders. All payments to be made by Agent to the Lenders shall be made by bank wire
transfer or internal transfer of immediately available funds pursuant to the instructions set forth on Schedule C-1, or pursuant to such other wire transfer instructions as each party may designate for itself by written notice to Agent.
Concurrently with each such payment, Agent shall identify whether such payment (or any portion thereof) represents principal, fee or interest on revolving advances or otherwise. 
 17.15. Concerning the Collateral and Related Loan Documents. Each member of the Lender Group (and any of their
Affiliates which are Bank Product Providers) authorizes and directs Agent to enter into this Agreement and the other Loan Documents relating to the Collateral, for the ratable benefit (subject to Section 4.1) of the Lender Group. Each
member of the Lender Group agrees that any action taken by Agent, Required Lenders, or all Lenders, as applicable, in accordance with the terms of this Agreement or the other Loan Documents relating to the Collateral and the exercise by Agent,
Required Lenders, or all Lenders, as applicable, of their respective powers set forth therein or herein, together with such other powers that are reasonably incidental thereto, shall be binding upon all of the Lenders. 
 17.16. Field Audits and Examination Reports; Confidentiality; Disclaimers by Lenders; Other Reports and Information.
By signing this Agreement, each Lender, 
 (a) is deemed to have requested that Agent furnish such Lender,
promptly after it becomes available, a copy of each field audit or examination report (each a “Report” and collectively, “Reports”) prepared by Agent, and Agent shall so furnish each Lender with such Reports;

 (b) expressly agrees and acknowledges that Agent (i) does not make any representation or warranty as to
the accuracy of any Report, and (ii) shall not be liable for any information contained in any Report; 
 (c)
expressly agrees and acknowledges that the Reports are not comprehensive audits or examinations, that Agent or other party performing any audit or examination will inspect only specific information regarding Borrowers and will rely significantly
upon Borrowers’ Books and records, as well as on representations of Borrowers’ personnel; 
  

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 (d) agrees to keep all Reports and other material information obtained by it
pursuant to the requirements of this Agreement in accordance with its reasonable customary procedures for handling confidential information; it being understood and agreed by Borrower that in any event such Lender may make disclosures
(i) reasonably required by any bona fide potential or actual Assignee, transferee, or Participant in connection with any contemplated or actual assignment or transfer by such Lender of an interest herein or any participation interest in such
Lender’s rights hereunder, (ii) of information that has become public by disclosures made by Persons other than such Lender, its Affiliates, assignees, transferees, or participants, or (iii) as required or requested by any court,
governmental or administrative agency, pursuant to any subpoena or other legal process, or by any law, statute, regulation, or court order; provided, however, that, unless prohibited by applicable law, statute, regulation, or court order, such
Lender shall notify Borrowers of any request by any court, governmental or administrative agency, or pursuant to any subpoena or other legal process for disclosure of any such non-public material information concurrent with, or where practicable,
prior to the disclosure thereof, and 
 (e) without limiting the generality of any other indemnification
provision contained in this Agreement, agrees: (1) to hold Agent and any such other Lender preparing a Report harmless from any action the indemnifying Lender may take or conclusion the indemnifying Lender may reach or draw from any Report in
connection with any loans or other credit accommodations that the indemnifying Lender has made or may make to Borrower, or the indemnifying Lender’s participation in, or the indemnifying Lender’s purchase of, a loan or loans of Borrowers;
and (ii) to pay and protect, and indemnify, defend, and hold Agent and any such other Lender preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses and other amounts (including, attorney costs)
incurred by Agent and any such other Lender preparing a Report as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender. 
 In addition to the foregoing: (x) any Lender may from time to time request of Agent in writing that Agent provide to such Lender a copy
of any report or document provided by Borrowers to Agent, and, upon receipt of such request, Agent shall provide a copy of same to such Lender promptly upon receipt thereof; (y) to the extent that Agent is entitled, under any provision of the
Loan Documents, to request additional reports or information from Borrowers, any Lender may, from time to time, reasonably request Agent to exercise such right as specified in such Lender’s notice to Agent, whereupon Agent promptly shall
request of Borrowers the additional reports or information specified by such Lender, and, upon receipt thereof, Agent promptly shall provide a copy of same to such Lender; and (z) any time that Agent renders to Borrowers a statement regarding
the Loan Account, Agent shall send a copy of such statement to each Lender. 
 17.17. Several Obligations; No
Liability. Notwithstanding that certain of the Loan Documents now or hereafter may have been or will be executed only by or in favor of Agent in its capacity as such, and not by or in favor of the Lenders, any and all obligations on the part of
Agent (if any) to make any Advances shall constitute the several (and not joint) obligations of the respective Lenders on a ratable basis, according to their respective Commitments, to make an amount of such Advances not to exceed, in principal
amount, at any one time outstanding, the amount of their respective Commitments. Nothing contained herein shall confer upon any Lender any interest in, or subject any Lender to any liability for, or in respect of the business, assets, profits,
losses, or liabilities

  

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of any other Lender. Each Lender shall be solely responsible for notifying its Participants of any matters relating to the Loan Documents to the extent any such notice may be required, and no
Lender shall have any obligation, duty, or liability to any Participant of any other Lender. Except as provided in Section 17.7, no member of the Lender Group shall have any liability for the acts of any other member of the Lender Group.
No Lender shall be responsible to Borrower or any other Person for any failure by any other Lender to fulfill its obligations to make Advances, nor to advance for it or on its behalf in connection with its Commitment, nor to take any other action on
its behalf hereunder or in connection with the financing contemplated herein. 
 17.18. Distributions.

 (a) On such day as may be set from time to time by the Agent, not less frequently than weekly (or more
frequently at the Agent’s option) the Agent, each Lender and the Issuing Bank shall settle up on amounts advanced under this Agreement and collected funds received in a Restricted Account. 
 (b) The Agent shall distribute to each Lender and the Issuing Bank, such Person’s respective Pro-Rata Share of payments
of principal, interest and fees on the Obligations when actually received and collected by the Agent. For purposes of calculating interest due to a Lender, that Lender shall be entitled to receive interest on the actual amount contributed by that
Lender towards the principal balance of the Obligations outstanding during the applicable period covered by the interest payment made by the Borrowers. Any net principal reductions to the Obligations received by the Agent in accordance with the Loan
Documents during such period shall not reduce such actual amount so contributed, for purposes of calculation of interest due to that Lender (but will reduce the principal amount for purposes of calculation of interest due from the Borrowers), until
the Agent has distributed to that Lender its Pro-Rata Share thereof. 
 (c) The Agent shall distribute fees paid
by Borrowers hereunder for the account of Lenders to each Lender (other than Deteriorating Lenders) based upon such Lender’s Pro Rata Share when actually received and collected by the Agent. No Lender shall be entitled to any fees payable to
Agent under the Fee Letter. 
 (d) Any amount received by the Agent as reimbursement for any cost or expense
(including without limitation, reasonable attorneys’ fees) shall be distributed by the Agent to that Person which is entitled to such reimbursement as provided in this Agreement (and if such Person(s) is (are) the Lenders, based on the
Lender’s Pro Rata Shares at the date on which the expense, in respect of which such reimbursement is being made, was incurred). 
 17.19. Agent’s Covering of Fundings 
 (a) Each Lender
shall make available to the Agent, as provided herein, that Lender’s Pro Rata Share of the following: 
 (i) Each Advance, up to the maximum amount of that Lender’s Pro Rata Share. 
  

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 (ii) Up to the maximum amount of that Lender’s Pro Rata Share of each
L/C Disbursement (to the extent that such L/C Disbursement is not “covered” by an Advance as provided herein). 
 (b) In all circumstances, the Agent may: 
 (i) Assume that each
Lender timely shall make available to the Agent that Lender’s Pro Rata Share of each Advance, notice of which is provided pursuant to Section 12 and shall make available, to the extent not “covered” by an Advance, that
Lender’s Pro Rata Share of any honoring of a Letter of Credit. 
 (ii) In reliance upon such assumption,
make available the corresponding amount to the Borrowers. 
 (iii) Assume that each Lender timely shall pay, and
shall make available, to the Agent all other amounts which that Lender is obligated to so pay and/or make available hereunder or under any of the Loan Documents. 
 (c) In the event that, in reliance upon any of such assumptions, the Agent makes available, a Lender’s Pro Rata Share of
one or more Advances, or any other amount to be made available hereunder or under any of the Loan Documents, which amount a Lender fails to provide to the Agent within one (1) Business Day of written notice of such failure, then: 
 (i) The amount which had been made available by the Agent is an “Agent’s Cover” (and is so referred to
herein). 
 (ii) All interest paid by the Borrowers on account of the Advances or coverage of the subject L/C
Disbursement which consist of the Agent’s Cover shall be retained by the Agent and applied by Agent to Agent’s Cover until the Agent’s Cover, with interest, has been paid. 
 (iii) The Defaulting Lender shall pay to the Agent, on demand, interest at a rate equal to the prevailing federal funds rate
on any Agent’s Cover in respect of that Defaulting Lender. 
 (iv) The Agent shall have succeeded to all
rights to payment to which the Defaulting Lender otherwise would have been entitled hereunder in respect of those amounts paid by or in respect of the Borrowers on account of the Agent’s Cover together with interest until it is repaid. Such
payments shall be deemed made first towards the amounts in respect of which the Agent’s Cover was provided and only then towards amounts in which the Defaulting Lender is then participating. For purposes of distributions to be made hereunder,
amounts shall be deemed distributable to a Defaulting Lender (and consequently, to the Agent to the extent to which the Agent is then entitled) at the highest level of distribution (if applicable) at which the Defaulting Lender would otherwise have
been entitled to a distribution. 
  

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 (v) Subject to Section 17.18 and except as otherwise provided
herein, the Defaulting Lender shall be entitled to receive any payments from the Borrowers to which the Defaulting Lender is then entitled, provided however there shall be deducted from such amount and retained by the Agent any interest to which the
Agent is then entitled on account of Section17.18 above. 
 (d) A Defaulting Lender shall not be relieved
of any obligation of such and except as otherwise provided herein Lender hereunder (all and each of which shall constitute continuing obligations on the part of any Defaulting Lender). 
 (e) A Defaulting Lender may cure its status as a Defaulting Lender by paying the Agent the aggregate of the following:

 (i) The Agent’s Cover (to the extent not previously repaid by the Borrowers and retained by the Agent in
accordance with Section 17.18 above) with respect to that Defaulting Lender. 
 Plus 
 (ii) The aggregate of the amount payable under Section 17.18 above (which relates to interest to be paid by that
Defaulting Lender). 
 Plus 
 (iii) All such costs and expenses as may be incurred by the Agent in the enforcement of the Agent’s rights against such
Defaulting Lender. 
 17.20. Bank Product Obligations. 
 Each Lender agrees to furnish the Agent at such frequency as the Agent may reasonably request with a summary of all Bank
Products provided by, and amounts due to become due on account thereof to, such Lender or its Affiliates. In connection with any distributions to be made hereunder, the Agent shall be entitled to assume that no amounts are due to any Bank Product
Provider on account of any such Bank Products unless the Agent has received such written notice thereof. 
 18. ACCELERATION
AND LIQUIDATION. 
 18.1. Acceleration Notice. 
 (a) The Agent may give the Lenders an Acceleration Notice at any time following the occurrence and during the continuation of
an Event of Default. 
 (b) The Required Lenders may give the Agent an Acceleration Notice at any time following
the occurrence and during the continuation of an Event of Default. Such notice may be by multiple counterparts, provided that counterparts executed by the requisite Lenders are received by the Agent within a period of five (5) consecutive
Business Days. 
  

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 18.2. Acceleration of Duties. 
 (a) Unless stayed by judicial or statutory process, the Agent shall Accelerate the Obligations within a commercially
reasonable time following: 
 (i) The Agent’s giving of an Acceleration Notice to the Lenders as provided
in Section 18.1(a). 
 (ii) The Agent’s receipt of an Acceleration Notice from the Required
Lenders, in compliance with Section 18.1(b). 
 18.3. Actions At and Following Initiation of
Liquidation. At the initiation of a Liquidation: 
 (a) The Agent and the Lenders shall “net out”
each Lender’s respective contributions towards the Advances, so that each Lender holds that Lender’s Pro Rata Share percentage of the Advances. 
 (b) Each Lender shall contribute, towards any Letter of Credit thereafter honored and not immediately reimbursed by the Borrowers, that Lender’s Pro Rata Share of such honoring. 
 18.4. Agent’s Conduct of Liquidation. 
 (a) Any Liquidation, including, without limitation, the exercise of any rights of set off or offset, shall be conducted
solely by the Agent (or any of the Lenders solely if so directed by Agent), with the advice and assistance of the Lenders. 
 (b) The Agent may establish one or more nominees (a “Nominee”) to “bid in” or otherwise acquire ownership to any Post Foreclosure Asset. 
 (c) The Agent shall manage the Nominee and manage and dispose of any Post Foreclosure Assets with a view towards the
realization of the economic benefits of the ownership of the Post Foreclosure Assets and in such regard, the Agent and/or the Nominee may operate, repair, manage, maintain, develop, and dispose of any Post Foreclosure Asset in such manner as the
Agent determines as appropriate under the circumstances. 
 (d) Agent may decline to undertake or to continue
taking a course of action or to execute an action plan (whether proposed by a Lender or Agent) unless indemnified to Agent’s satisfaction by the Lenders against any and all liability and expense which may be incurred by Agent by reason of
taking or continuing to take that course of action or action plan if such action was taken in the absence of gross negligence, actual bad faith, or willful misconduct. 
 (e) The Agent and each Lender shall execute all such instruments and documents not inconsistent with the provisions of this
Agreement as the Agent and/or the Nominee reasonably may request with respect to the creation and governance of any Nominee, the conduct of the Liquidation, and the management and disposition of any Post Foreclosure Asset. 
  

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 (f) The Agent, with the advice of the Lenders, may Liquidate (through a
public or private sale in its discretion) or sell or otherwise dispose of any of the Collateral or all or any portion of the Borrowers’ assets or stock following the occurrence and during the continuance of an Event of Default hereunder and in
connection therewith release the Lien thereon granted to the Agent hereunder. Each Lender hereby consents to the Agent’s release of the Liens granted to it in the Collateral in connection with a Liquidation or other sale of the Borrowers’
assets or stock following the occurrence and during the continuance of an Event of Default hereunder which the Agent determines is in the Lenders’ best interest. 
 18.5. Distribution of Liquidation Proceeds by Agent. 
 (a) The Agent may establish one or more reasonably funded reserve accounts into which proceeds of the conduct of any
Liquidation may be deposited in anticipation of future expenses which may be incurred by the Agent in the exercise of rights as a secured creditor and prior claims which the Agent anticipates may need to be paid. 
 (b) The Agent shall distribute the net proceeds of Liquidation in accordance with the relative priorities set forth in
Section 18.6. 
 (c) Each Lender, on the written request of the Agent and/or any Nominee, not more
frequently than once each month, shall reimburse the Agent and/or any Nominee, pro-rata, for any cost or expense reasonably incurred by the Agent and/or the Nominee in the conduct of a Liquidation, which amount is not covered out of current proceeds
of the Liquidation, which reimbursement shall be paid over to and distributed by the Agent. 
 18.6.
Distributions of Liquidation Proceeds by Agent and Ordinary Loan Payments. 
 (a) Proceeds of a Liquidation
shall be distributed based on levels of priority with respect to each classification of Collateral as specified below. 
 (b) All distributions of proceeds of a Liquidation shall be net of payment over to the Agent as reimbursement for all reasonable third party costs and expenses incurred by the Agent and its counsel and to any funded reserve established
pursuant to Section 18.5(a). 
 (c) The relative priorities to the proceeds of a Liquidation or any
other sale of Collateral outside of the ordinary course of business shall be distributed based on the following relative priorities: 
 (A) First, to pay all fees and expenses then due and payable to the Agent or any Lender (other than any Deteriorating Lender), including, but not limited to, all Lender Expenses due to either the Agent or
any Lender (other than any Deteriorating Lender); 
 (B) Second, to the Lenders (other than any Deteriorating
Lender), in respect to the Secured Obligations (other than Bank Product Obligations) owed to such Lenders or their Affiliates (including, but not limited to the Early Termination Fee); 
  

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 (C) Third, to any Deteriorating Lenders, until all of such Secured
Obligations (other than Bank Product Obligations) are indefeasibly paid in full and the Loan Agreement is terminated; and then 
 (D) Third, to the holders of any and all other Obligations due to the Agents or any Lender or any of their Affiliates (including, but not limited to Bank Product Obligations). 
 19. GENERAL PROVISIONS. 
 19.1. Effectiveness. This Agreement shall be binding and deemed effective when executed by Borrowers, the Agent, and each Lender agreeing to provide a Commitment on the Restatement Date.

 19.2. Section Headings. Headings and numbers have been set forth herein for convenience only. Unless
the contrary is compelled by the context, everything contained in each section applies equally to this entire Agreement. 
 19.3. Interpretation. Neither this Agreement nor any uncertainty or ambiguity herein shall be construed or resolved against the Lender Group or Borrower, whether under any rule of construction or
otherwise. On the contrary, this Agreement has been reviewed by all parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to fairly accomplish the purposes and intentions of all parties hereto.

 19.4. Severability of Provisions. Each provision of this Agreement shall be severable from every other
provision of this Agreement for the purpose of determining the legal enforceability of any specific provision. 
 19.5. Counterparts; Telefacsimile Execution. This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an
original, and all of which, when taken together, shall constitute but one and the same Agreement. Delivery of an executed counterpart of this Agreement by telefacsimile shall be equally as effective as delivery of an original executed counterpart of
this Agreement. Any party delivering an executed counterpart of this Agreement by telefacsimile also shall deliver an original executed counterpart of this Agreement but the failure to deliver an original executed counterpart shall not affect the
validity, enforceability, and binding effect of this Agreement 
 19.6. Revival and Reinstatement of
Obligations. If the incurrence or payment of the Secured Obligations by any Borrower or any guarantor of the Secured Obligations or the transfer by any or all of such parties to the Lender Group of any property of either or both of such parties
should for any reason subsequently be declared to be void or voidable under any state or federal law relating to creditors’ rights, including provisions of the Bankruptcy Code relating to fraudulent conveyances, preferences, and other voidable
or recoverable payments of money or transfers of property (collectively, a “Voidable Transfer”), and if the Lender Group is required to repay or restore, in whole or in part, any

  

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such Voidable Transfer, or elects to do so upon the reasonable advice of its counsel, then, as to any such Voidable Transfer, or the amount thereof that the Lender Group is required or elects to
repay or restore, and as to all reasonable costs, expenses, and attorneys fees of the Lender Group related thereto, the liability of Borrowers or such guarantor automatically shall be revived, reinstated, and restored and shall exist as though such
Voidable Transfer had never been made. 
 19.7. Integration. This Agreement, together with the other Loan
Documents, reflects the entire understanding of the parties with respect to the transactions contemplated hereby and shall not be contradicted or qualified by any other agreement, oral or written, before the date hereof. 
 19.8. Existing Loan Agreement Superseded. On the Restatement Date, this Agreement shall supersede the Existing Loan
Agreement in its entirety, except as provided in this Section 19.8. On the Restatement Date, the rights and obligations of the parties evidenced by the Existing Loan Agreement shall be evidenced by this Agreement and the other Loan
Documents, the “Advances” and all other “Obligations” as each such term is defined in the Existing Loan Agreement shall be converted to Advances and Obligations as defined herein and the Existing Letters of Credit issued by the
Agent for the account of the Borrowers prior to the Restatement Date shall be converted into L/Cs or L/C Guaranties, as applicable, under this Agreement. Without limiting the generality of the foregoing and to the extent necessary, the Lenders and
the Agent reserve all of their rights under the Existing Loan Agreement in respect of all present and future Obligations under, inter alia, the Existing Credit Agreement, as amended and restated by this Agreement. All interest and fees and expenses,
if any, owing or accruing under or in respect of the Existing Loan Agreement through the Restatement Date shall be calculated as of the Restatement Date (pro rated in the case of any fractional periods), and shall be paid on the Restatement Date.
Commencing on the Restatement Date, the all fees hereunder shall be payable by the Borrowers to the Agent for the account of the Lenders in accordance with this Agreement. 
 19.9. U.S. Patriot Act. Each Lender hereby notifies each Borrower that pursuant to the requirements of the USA PATRIOT
Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies such Borrower, which information includes the name and address of such
Borrower and other information that will allow such Lender to identify such Borrower in accordance with the Act. 
 19.10. Replacement of Lenders. If any Lender requests compensation under Section 2.16 or if the Borrowers are required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 2.16, if any Lender does not consent (a “Non-Consenting Lender”) to a proposed amendment, waiver, consent or release with respect to any Loan Document that requires the consent of each Lender and that
has been approved by the Required Lenders or any Lender is a Deteriorating Lender, then the Borrowers may, at their sole expense and effort, upon notice to such Lender and the Agent, require such Lender to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in, and consents required by, Section 15.1), all of its interests, rights and obligations under this

  

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Agreement and the related Loan Documents to an Eligible Transferee that shall assume such obligations (which Eligible Transferee may be another Lender, if a Lender accepts such assignment),
provided that: 
 (a) the Borrowers shall have paid to the Agent the assignment fee specified in
Section 15.1; 
 (b) such Lender shall have received payment of an amount equal to the outstanding
principal of its Advances, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the
Borrowers (in the case of all other amounts); 
 (c) in the case of any such assignment resulting from a claim
for compensation under Section 2.16 or payments required to be made pursuant to Section 2.16, such assignment will result in a reduction in such compensation or payments thereafter; 
 (d) with respect to the replacement of any Non-Consenting Lender, such amendment, waiver or consent can be effected as a
result of such assignment (together with all other assignments required by the Agent to be made pursuant to this paragraph); and 
 (e) such assignment does not conflict with applicable Laws. 
 A
Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrowers to require such assignment and delegation cease to apply.

 19.11. Right of Set-Off. Any and all deposits or other sums at any time credited by or due to any
Borrower from any Agent or any Lender or any Participant or from any Affiliate of any of the foregoing, and any cash, securities, instruments or other property of any Borrower in the possession of any of the foregoing, whether for safekeeping or
otherwise (regardless of the reason such Person had received the same) shall at all times constitute security for any and all Secured Obligations of each Borrower to each Agent and such Lender or any Participant or such Affiliate and may be applied
or set off against Secured Obligations and against such obligations at any time, whether or not such are then due and whether or not other collateral is then available to any Agent or that Lender. 
 19.12. Pledges To Federal Reserve Banks. Nothing included in this Agreement shall prevent or limit any Lender, to the
extent that such Lender is subject to any of the twelve Federal Reserve Banks organized under §4 of the Federal Reserve Act (12 U.S.C. §341) from pledging all or any portion of that Lender’s interest and rights under this Agreement,
provided, however, neither such pledge nor the enforcement thereof shall release the pledging Lender from any of its obligations hereunder or under any of the Loan Documents. 
  

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 19.13. Dispute Resolution. Any dispute among the Lenders and/or any
Agent concerning the interpretation, administration, or enforcement of the financing arrangements contemplated by this or any other Loan Document or the interpretation or administration of this or any other Loan Document which cannot be resolved
amicably shall be resolved in the United States District Court for the District of California, sitting in Los Angeles County, California, to the jurisdiction of which courts each Lender hereto hereby submits. 
 19.14. Press Releases. Each Borrower agrees that neither it nor its Affiliates will in the future issue any press
releases or other public disclosure using the name of Agents or their Affiliates or referring to this Agreement or the other Loan Documents without at least two (2) Business Days’ prior notice to Agent and without the prior written consent
of the Agent unless (and only to the extent that) such Borrower or Affiliate is required to do so under Applicable Law and then, in any event, such Borrower or Affiliate will consult with Agent before issuing such press release or other public
disclosure. Each Borrower, on their own behalf and on behalf of their Affiliates, consents to the publication by Agent or any Lender of advertising material relating to the financing transactions contemplated by this Agreement using any
Borrower’s or Affiliates name, product photographs, logo or trademark. Agent or such Lender shall provide a draft reasonably in advance of any advertising material to the Lead Borrower for review and comment prior to the publication thereof.
Agent reserves the right to provide to industry trade organizations information necessary and customary for inclusion in league table measurements. 
 [SIGNATURE PAGES FOLLOW] 
  

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 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in Los
Angeles, California. 
  

			
	 LESLIE’S POOLMART, INC.,
 a Delaware corporation

		
	By	 	/s/ Steven L. Ortega
	Title:	 	Chief Financial Officer and EVP
	
	 LPM MANUFACTURING, INC.,
 a California corporation

		
	By	 	/s/ Steven L. Ortega
	Title:	 	Chief Financial Officer and EVP

			
	 WELLS FARGO RETAIL FINANCE, LLC,
 as Agent

		
	By	 	/s/ Jennifer Blanchette
	Title:	 	Vice President
	
	 WELLS FARGO RETAIL FINANCE, LLC,
 as Lender

		
	By	 	/s/ Jennifer Blanchette
	Title:	 	Vice PresidentSecurities Purchase Agreement, dated December 22, 2009

 EXHIBIT 4.1 
  
  
 SECURITIES PURCHASE AGREEMENT 
 by and among 
 RUTH’S HOSPITALITY GROUP, INC., 
 BRUCKMANN, ROSSER, SHERRILL & CO. III, L.P. 
 and 
 BRS COINVESTOR III, L.P. 
 Dated as of December 22, 2009 
  
  

 TABLE OF CONTENTS 
  

					
	 	    	 	  	Page
		
	ARTICLE I DEFINITIONS AND INTERPRETATION	  	1
			
	 Section 1.1
	    	Definitions	  	1
		
	ARTICLE II PURCHASE AND SALE OF THE SHARES	  	7
			
	 Section 2.1
	    	Preferred Stock Purchase Commitment	  	7
	 Section 2.2
	    	Closing	  	7
	 Section 2.3
	    	Delivery and Payment	  	8
		
	ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY	  	8
			
	 Section 3.1
	    	Organization	  	8
	 Section 3.2
	    	Authorization	  	8
	 Section 3.3
	    	Capitalization	  	8
	 Section 3.4
	    	Valid Issuance of Shares	  	9
	 Section 3.5
	    	Non-Contravention; Authorizations	  	9
	 Section 3.6
	    	Litigation	  	10
	 Section 3.7
	    	Compliance with Laws; Permits	  	10
	 Section 3.8
	    	Periodic Filings; Financial Statements; Undisclosed Liabilities	  	10
	 Section 3.9
	    	No Material Adverse Effect	  	11
	 Section 3.10
	    	Brokers and Finders	  	11
	 Section 3.11
	    	Employee Benefits	  	11
	 Section 3.12
	    	Title to Properties	  	12
	 Section 3.13
	    	Environmental Compliance	  	12
	 Section 3.14
	    	Taxes	  	12
	 Section 3.15
	    	Subsidiaries	  	13
	 Section 3.16
	    	Governmental Consents	  	13
	 Section 3.17
	    	Investment Company Act	  	13
	 Section 3.18
	    	Agreements	  	13
	 Section 3.19
	    	Insurance	  	13
	 Section 3.20
	    	Intellectual Property	  	13
	 Section 3.21
	    	No Restriction on Ability to Pay Dividends	  	14
		
	ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE INVESTORS	  	14
			
	 Section 4.1
	    	Organization	  	14
	 Section 4.2
	    	Authorization	  	14
	 Section 4.3
	    	Non-Contravention; Governmental Authorization	  	14
	 Section 4.4
	    	Securities Act Compliance	  	15
	 Section 4.5
	    	Ownership	  	16
	 Section 4.6
	    	Financial Capability	  	16
	 Section 4.7
	    	Brokers and Finders	  	16
		
	ARTICLE V CONDITIONS TO CLOSING	  	16
			
	 Section 5.1
	    	Conditions to the Obligations of the Investors	  	16
	 Section 5.2
	    	Conditions to the Obligations of the Company	  	18

					
	ARTICLE VI COVENANTS	  	18
			
	 Section 6.1
	    	Securities to be Issued	  	18
	 Section 6.2
	    	Publicity	  	19
	 Section 6.3
	    	Use of Proceeds	  	19
	 Section 6.4
	    	Filing of Certificate of Designations	  	19
	 Section 6.5
	    	Standstill Agreement	  	19
	 Section 6.6
	    	Board Representation and Board Composition	  	20
	 Section 6.7
	    	Supermajority Board Actions	  	21
	 Section 6.8
	    	Transfer Restrictions	  	22
	 Section 6.9
	    	Financial Information	  	22
	 Section 6.10
	    	No Solicitation	  	22
	 Section 6.11
	    	Shareholder Approval; Proxy Statement	  	23
	 Section 6.12
	    	Rights Offering	  	23
	 Section 6.13
	    	Preemptive Rights	  	25
	 Section 6.14
	    	Negative Covenants Prior to Closing	  	26
	 Section 6.15
	    	Reservation of Common Stock; Issuance of Shares of Common Stock	  	27
	 Section 6.16
	    	Transfer Taxes	  	27
	 Section 6.17
	    	Listing	  	27
	 Section 6.18
	    	Pre-Closing Access	  	27
	 Section 6.19
	    	Further Assurances; Efforts	  	27
		
	ARTICLE VII TERMINATION	  	28
			
	 Section 7.1
	    	Termination	  	28
	 Section 7.2
	    	Effects of Termination	  	28
	 Section 7.3
	    	Fees and Expenses Upon Termination	  	28
		
	ARTICLE VIII MISCELLANEOUS	  	29
			
	 Section 8.1
	    	Survival	  	29
	 Section 8.2
	    	No Personal Liability of Directors, Officers, Owners, Etc.	  	29
	 Section 8.3
	    	Notices	  	29
	 Section 8.4
	    	Amendments and Waivers	  	30
	 Section 8.5
	    	Successors and Assigns	  	30
	 Section 8.6
	    	Governing Law	  	30
	 Section 8.7
	    	Consent to Jurisdiction; Venue; Waiver of Jury Trial	  	30
	 Section 8.8
	    	Entire Agreement	  	31
	 Section 8.9
	    	Effect of Headings and Table of Contents	  	31
	 Section 8.10
	    	Severability	  	31
	 Section 8.11
	    	Counterparts	  	31
	 Section 8.12
	    	No Third-Party Beneficiaries	  	31
	 Section 8.13
	    	Enforcement of Agreement	  	32

  

 ii 

 EXHIBITS 
  

			
	Exhibit A	  	Form of Certificate of Designations
	Exhibit B	  	Form of Voting Agreement
	Exhibit C	  	Form of Registration Rights Agreement
	Exhibit D	  	Credit Agreement Amendment

 SCHEDULE 
  

			
	Schedule A	  	Schedule of Investors

 SECURITIES PURCHASE AGREEMENT 
 SECURITIES PURCHASE AGREEMENT dated as of December 22, 2009 (this “Agreement”) by and among Ruth’s Hospitality
Group, Inc., a Delaware corporation (the “Company”), Bruckmann, Rosser, Sherrill & Co. III, L.P., a Delaware limited partnership (the “Fund”), and BRS Coinvestor III, L.P., a Delaware limited partnership
(the “Co-Invest Fund,” and together with the Fund, the “Investors”). 
 BACKGROUND

 WHEREAS, on the terms and conditions set forth in this Agreement, the Company desires to sell, and each Investor desires
to purchase, that number of shares (the “Shares”) of the Company’s Series A 10% Convertible Preferred Stock, par value $0.01 per share (“Preferred Stock”), set forth opposite such Investor’s name on
Schedule A hereto, having the voting and other powers, preferences, privileges or other rights and qualifications, limitations and restrictions as specified in the Certificate of Designations of the Preferred Stock in the form attached as
Exhibit A hereto (the “Certificate of Designations”); 
 WHEREAS, the Company has proposed to offer and
sell shares of Common Stock pursuant to a proposed Common Stock rights offering to be completed immediately prior to the closing of the issuance and sale of the Shares (the “Rights Offering”), and the Investors’ purchase of the
Shares is conditioned upon the successful completion of the Rights Offering; 
 WHEREAS, the Company has agreed to submit the
issuance and sale of the Shares to its stockholders for approval on the terms contemplated by this Agreement and the Certificate of Designations (the “Shareholder Approval”), and the Investors’ purchase of the Shares and the
Company’s issuance and sale of the Shares is conditioned upon the receipt of such approval; 
 WHEREAS, as a condition to
the Investors’ willingness to enter into this Agreement, Madison Dearborn Capital Partners III, L.P. and the directors and executive officers of the Company have entered into Voting Agreements in the form attached as Exhibit B hereto in
order to assist the Company in obtaining Shareholder Approval; 
 WHEREAS, as a further condition to the Investors’
willingness to enter into this Agreement, the Company has agreed to provide the holders of the Shares with certain registration rights after Closing as set forth in a registration rights agreement in the form attached as Exhibit C hereto (the
“Registration Rights Agreement”); and 
 WHEREAS, in connection with the purchase and sale of the Shares, the
Company and the Investors desire to make certain representations and warranties and enter into certain other agreements. 
 NOW,
THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement, the receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement hereby agree as follows: 
 ARTICLE I 
 DEFINITIONS AND INTERPRETATION 
 Section 1.1 Definitions. As used in this Agreement, the following terms
have the respective meanings set forth below: 
 “Acquisition Transaction” (a) any direct or indirect
acquisition or purchase of all or substantially all of the consolidated assets of the Company (including equity securities of its Subsidiaries) or 50% or more of the Common Stock outstanding or the Total Voting Power of the Company, including any
tender offer or exchange offer that, if consummated, would result in any Person beneficially owning 50% or more of the Common Stock outstanding or the Total Voting Power of the Company, or (b) any merger, consolidation, business combination,
recapitalization, reorganization, liquidation, dissolution or similar transaction involving the Company pursuant to which any Person would, directly or indirectly, own 50% or more of the Common Stock outstanding or the Total Voting Power of the
Company. 

 “Additional Director” has the meaning set forth in
Section 6.6(e). 
 “Affiliate” means any Person directly or indirectly Controlling, Controlled by
or under direct or indirect common Control with such Person; provided, that for purposes of this Agreement, the Company and its Subsidiaries shall not be deemed to be Affiliates of the Investors. 
 “Agreement” has the meaning set forth in the Preamble. 
 “Alternative Proposal” means any sale of debt or equity securities or any financing transaction, in each case generating
(or expected to generate) gross proceeds in excess of $20,000,000 (other than the transactions contemplated by this Agreement, including the sale of the Shares to the Investors and the Rights Offering), or any merger, consolidation, business
combination, recapitalization or similar transaction which, if consummated, would result in an Acquisition Transaction. 
 “Beneficially Own,” “Beneficially Owned,” “Beneficial Ownership” and “Beneficial Owner” means with respect to any securities a holder who is deemed to be the beneficial
owner, or ownership that is deemed to be beneficial ownership, of such securities under Rule 13d-3 or Rule 13d-5 of the Exchange Act, and shall include such securities Beneficially Owned by all other persons with whom a holder would constitute a
“group” within the meaning of Section 13(d) of the Exchange Act with respect to such securities; provided, that any Person shall be deemed to Beneficially Own any securities that such Person has the right to acquire, whether or
not such right is exercisable immediately. 
 “Board” means the board of directors of the Company. 

“Business Marks” has the meaning set forth in Section 3.20. 
 “Capital Stock” means for any Person any and all shares, interests, participations or other equivalents however designated
of corporate stock or other equity participations, including partnership interests, whether general or limited, of such Person and any rights (other than debt securities convertible or exchangeable into an equity interest), warrants or options to
acquire an equity interest in such Person. 
 “Certificate of Designations” has the meaning set forth in the
Preamble. 
 “Closing” has the meaning set forth in Section 2.2. 
 “Closing Date” has the meaning set forth in Section 2.2. 
 “Common Stock” means the common stock, par value $0.01 per share, of the Company. 
 “Common Stock Board Condition” has the meaning set forth in Section 6.6(a). 
 “Company” has the meaning set forth in the Preamble. 
  

 2 

 “Company Agreement” has the meaning set forth in Section 3.5.

 “Company Financial Statements” has the meaning set for in Section 3.8(b). 
 “Company Intellectual Property Rights” has the meaning set forth in Section 3.20. 
 “Company SEC Documents” has the meaning set forth in Section 3.8(a). 
 “Competitor” means a Person engaged in the business of owning or operating full service restaurants specializing in the
service of high end steak in more than 25 locations in the United States with an average guest check of more than $30 per person. 
 “Control” has the meaning specified in Rule 12b-2 under the Exchange Act. 
 “Credit
Agreement” means the First Amended and Restated Credit Facility dated February 19, 2008, as amended, among the Company, Wells Fargo Bank, National Association, as administrative agent, and various lenders. 
 “Credit Agreement Amendment” means the amendment to the Credit Agreement dated on or prior to the date of this Agreement
among the parties to the Credit Agreement to become effective upon the Closing in the form attached as Exhibit D hereto. 
 “DGCL” means the General Corporation Law of the State of Delaware. 
 “Effect” has
the meaning set forth in the definition of “Material Adverse Effect.” 
 “Environmental Laws” means
all federal, state, local or foreign laws relating to pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface strata), including laws relating to Hazardous Materials
into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, including, without limitation, common law theories of liability with respect
to such matters, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.

 “ERISA Affiliate” means any entity that is considered a single employer with the Company under
Section 414 of the Internal Revenue Code. 
 “Exercise Notice” has the meaning set forth in
Section 6.13(b). 
 “Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated by the SEC thereunder. 
 “GAAP” means generally accepted accounting
principles in the United States of America as in effect from time to time. 
 “Governmental Entity” means any
national, state, local, county, parish or municipal government, domestic or foreign, any agency, board, bureau, commission, court, tribunal, subdivision, department or other governmental or regulatory authority or instrumentality that has
jurisdiction over the Company or any of its properties or assets or any matter relating to the transactions contemplated by this Agreement. 
  

 3 

 “Hazardous Materials” means emissions, discharges, releases or threatened
releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes, including, without limitation, carbon dioxide to the extent regulated. 
 “Incidental Liens” means (a) Liens for taxes, assessments, levies or other governmental charges not yet due (subject to applicable grace periods) or that are being contested in good
faith and by appropriate proceedings if, in each case, adequate reserves with respect to such Liens are maintained on the books of the Company in accordance with GAAP; (b) carriers’, warehousemen’s, mechanics’, landlords’,
vendors’, materialmen’s, repairmen’s, sureties’ or other like Liens arising in the ordinary course of business (or deposits to obtain the release of any such Lien) and securing amounts not yet due or that are being contested in
good faith and by appropriate proceedings if, in the case of such contested Liens, adequate reserves with respect to such Liens are maintained on the books of the Company in accordance with GAAP; (c) pledges or deposits in connection with
workers’ compensation, unemployment insurance and other social security legislation; and (d) easements, rights-of-way, covenants, reservations, exceptions, encroachments, zoning and similar restrictions and other similar encumbrances or
title defects incurred in the ordinary course of business that, in the aggregate, are not substantial in amount, and that do not in any case singly or in the aggregate materially detract from the value or usefulness of the property subject to such
Liens or materially interfere with the ordinary conduct of the business of the Company and its Subsidiaries, taken as a whole. 
 “Internal Revenue Code” means the United States Internal Revenue Code of 1986, as amended. 
 “Investors” has the meaning set forth in the Preamble. 
 “Investor New Securities”
has the meaning set forth in Section 6.13(a). 
 “Investor Nominee” has the meaning set forth in
Section 6.6(a). 
 “Law” means any federal, state, provincial, local, municipal, foreign,
international, multinational or other law, statute, regulation, rule, directive, ordinance, code, constitution, order, treaty or judgment. 
 “Lien” means any mortgage, pledge, charge, encumbrance, security interest, collateral assignment or other lien or restriction of any kind, whether based on common law, constitutional
provision, statute or contract, and shall include reservations, exceptions, encroachments, easements, rights of way, covenants, conditions, restrictions, leases and other title exceptions. 
 “Material Adverse Effect” means any fact, circumstance, event, change, effect or occurrence (an “Effect”)
that, individually or in the aggregate with all other Effects, (a) with respect to either party, would reasonably be expected to prevent, materially delay or materially impair the ability of such party to consummate the transactions
contemplated hereby in the timeframe contemplated hereby or (b) with respect to the Company, has had or caused, or would reasonably be expected to have or cause, a material adverse effect on the assets, properties, business, results of
operations, or financial condition of the Company and its Subsidiaries, taken as a whole, but, in the case of this clause (b) shall not include (i) Effects generally affecting (A) the industry in which the Company and its Subsidiaries
operate or (B) the economy or the financial, securities or credit markets in the United States or elsewhere in the world where the Company or its Subsidiaries do business, including any regulatory or political conditions or developments
occurring after the date of this Agreement, unless any such Effects disproportionately affect the assets, properties, business, results of operations or financial condition of the Company and its Subsidiaries, taken as a whole, relative to other
restaurant industry participants; (ii) declines in the price or trading volume of shares of any Capital Stock of the Company; provided, that the exception in this clause (ii) shall not prevent or otherwise affect a determination
that any Effect underlying such decline

  

 4 

 
has resulted in, or contributed to, a Material Adverse Effect with respect to the Company; (iii) Effects to the extent resulting from any changes in Law or in GAAP (or the interpretation
thereof) after the date hereof, unless any such Effects disproportionately affect the assets, properties, business, results of operations or financial condition of the Company and its Subsidiaries, taken as a whole, relative to other restaurant
industry participants; (iv) any failure by the Company to meet any published analyst estimates or expectations regarding the Company’s revenue, earnings or other financial performance or results of operations for any period, or any failure
by the Company to meet its internal budgets, plans or forecasts regarding its revenues, earnings or other financial performance or results of operations; provided, that the exception in this clause (iv) shall not prevent or otherwise
affect a determination that any Effect underlying such failure has resulted in, or contributed to, a Material Adverse Effect with respect to the Company; or (v) Effects to the extent resulting from the announcement of, or the taking of any
action required by, this Agreement. 
 “Nasdaq” means The NASDAQ Stock Market LLC. 
 “New Securities” has the meaning set forth in Section 6.13(a). 
 “Permitted Transferees” means, subject to the following proviso, collectively, (1) the Fund, (2) the Co-invest
Fund, (3) any general partner of the Fund or the Co-Invest Fund, (4) any of their commonly controlled or commonly managed investment funds and (5) upon the dissolution of the Fund or the Co-Invest Fund, as the case may be, any limited
partner or any member of the general partner of the Fund or the Co-Invest Fund, as the case may be; provided, however, that solely for purposes of Section 8.5 hereof, “Permitted Transferees” shall mean, collectively,
(1) the Fund, (2) the Co-invest Fund, (3) any general partner of the Fund or the Co-Invest Fund and (4) any of their commonly controlled or commonly managed investment funds. 
 “Person” means an individual, a corporation, a partnership, a limited liability company, limited partnership, an
association, a trust or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof. 
 “Potential Change in Control Event” means the earlier of (a) the date on which the Board (i) publicly recommends that the stockholders tender their shares to any Person who has
publicly announced a tender or exchange offer which, if consummated, would result in an Acquisition Transaction, or (ii) fails to recommend that stockholders reject such an offer within ten (10) business days after the commencement of such
tender or exchange offer or fails to make a “stop-look-and-listen” communication to the stockholders of the Company within such time period, (b) the execution by the Company of a definitive agreement which if consummated will result
in an Acquisition Transaction, or (c) the public announcement by the Company that it recommends any transaction that, if consummated, would result in an Acquisition Transaction. 
 “Pre-Closing Period” has the meaning set forth in Section 6.14. 
 “Preferred Director” has the meaning set forth in the Certificate of Designations. 
 “Preferred Stock” has the meaning set forth in the Preamble. 
 “Previously Disclosed” means information set forth in or incorporated by reference into the Company’s Annual Report on
Form 10-K for the fiscal year ended December 28, 2008 or its other reports and forms filed with the SEC under Sections 13(a), 14(a) or 15(d) of the Exchange Act on or after December 29, 2008 but prior to the date hereof (except for risks
and forward looking information set forth in the “Risk Factors” section of such annual report or in any forward looking statement disclaimers or similar statements that are similarly non-specific and are predictive or forward looking in
nature). 
  

 5 

 “Prior Sale” has the meaning set forth in 6.13(b). 
 “Prospectus Supplement” has the meaning set forth in Section 6.12(a). 
 “Purchase Price” has the meaning set forth in Section 2.1. 
 “Record Date” has the meaning set forth in Section 6.12(c). 
 “Registration Rights Agreement” has the meaning set forth in the Preamble. 
 “Registration Statement” has the meaning set forth in Section 6.12(a). 
 “Representatives” has the meaning set forth in Section 6.10. 
 “Rights Offering” has the meaning set forth in the Preamble. 
 “SEC” means the Securities and Exchange Commission. 
 “Securities” has the meaning set forth in Section 4.4. 
 “Securities Act” means the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated by the SEC
thereunder. 
 “Shareholder Approval” has the meaning set forth in the Preamble. 
 “Shares” has the meaning set forth in the Preamble. 
 “Standstill Period” has the meaning set forth in Section 6.5(a). 
 “Stockholder Meeting” has the meaning set forth in Section 6.11(b). 
 “Stock Plans” means the Company’s 2000 Stock Option Plan, the Company’s 2004 Restricted Stock Plan and the
Company’s 2005 Equity Incentive Plan, in each case as amended or amended and restated to date and as the same may be amended or amended and restated from time to time. 
 “Subsidiary” means, with respect to any specified Person, (a) any corporation, association or other business entity of
which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency and after giving effect to any voting agreement or stockholders’ agreement that effectively transfers voting
power) to vote in the election of directors, managers or trustees of the corporation, association or other business entity is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that
Person (or a combination thereof); (b) any partnership a general partner or a managing general partner of which is such Person or a Subsidiary of such Person; and (c) any limited liability company a managing member or manager of which is
such Person or a Subsidiary of such Person. 
 “Subscription Period” has the meaning set forth in
Section 6.12(c). 
 “Subscription Rights” has the meaning set forth in Section 6.12(a).

  

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 “Tax Returns” means all returns, declarations, reports, forms, estimates,
information returns and statements required to be filed in respect of any Taxes with a taxing authority (including any schedules thereto or amendments thereof). 
 “Taxes” means all federal, state, county, local, foreign and other taxes (including, without limitation, income, profits, premium, estimated, excise, sales, use, occupancy, gross
receipts, franchise, ad valorem, severance, capital levy, production, transfer, withholding, employment, unemployment compensation, payroll-related and property taxes, import duties and other governmental charges and assessments), whether or not
measured in whole or in part by net income, and including deficiencies, interest, additions to tax or interest and penalties with respect thereto. 
 “Total Voting Power of the Company” means the total number of votes that may be cast in the election of directors of the Company if all Voting Stock of the Company treated as outstanding
pursuant to this definition were present and voted at a meeting held for such purpose. The percentage of the Total Voting Power of the Company Beneficially Owned by any Person is the percentage of the Total Voting Power of the Company that is
represented by the total number of votes that may be cast in the election of directors of the Company with respect to Voting Stock of the Company Beneficially Owned by such Person. In calculating such percentage, the Voting Stock of the Company
Beneficially Owned by any Person that is not outstanding but is subject to issuance upon exercise or exchange of rights of conversion or any options, warrants or other rights Beneficially Owned by such Person shall be deemed to be outstanding for
the purpose of computing the percentage of the Total Voting Power of the Company represented by Voting Stock of the Company Beneficially Owned by such Person, but shall not be deemed to be outstanding for the purpose of computing the percentage of
the Total Voting Power of the Company represented by Voting Stock of the Company Beneficially Owned by any other Person. 
 “Voting Stock” shall mean, with respect to the Company or any other Person, Capital Stock of the class or classes pursuant to which the holders thereof have the general voting power under ordinary circumstances (determined
without regard to any classification of directors) to vote in the election of one or more members of the board of directors or other governing body thereof (it being understood that the Preferred Stock shall be considered Voting Stock of the Company
for all purposes under this Agreement). 
 ARTICLE II 
 PURCHASE AND SALE OF THE SHARES 
 Section 2.1
Preferred Stock Purchase Commitment. Upon the basis of the representations, warranties and covenants, and on the terms subject to the conditions set forth in this Agreement, at the Closing, the Company agrees to sell to the Investors, and
each Investor agrees to purchase from the Company, that number of shares of Preferred Stock set forth opposite such Investor’s name on Schedule A hereto at a purchase price of $1,000 per share, for an aggregate purchase price of
$25,000,000 in cash (the “Purchase Price”) to be paid in full to the Company on the Closing Date. 
 Section
2.2 Closing. The closing of the purchase and sale of the shares of Preferred Stock (the “Closing”) shall be held at the offices of Kirkland & Ellis LLP, 300 North LaSalle Street, Chicago, Illinois, 60654, at 10:00
a.m. Central Standard Time, on the second (2nd) business day following the satisfaction (or waiver) of the conditions set forth in ARTICLE V hereof (other than those conditions that by their nature are to be satisfied at the Closing, but
subject to the satisfaction or waiver of those conditions) or such other time, place and date as is mutually agreed upon by the Company and the Investors (the date of the Closing under this Agreement is hereinafter referred to as the
“Closing Date”). If and to the extent the Company and the Investors mutually agree, the Closing may take place by exchange of facsimile or electronic signatures without the necessity for a physical meeting of the parties.

  

 7 

 Section 2.3 Delivery and Payment. 
 (a) At the Closing, the Company shall deliver or cause to be delivered to each Investor (i) certificate(s) evidencing the number of
shares of Preferred Stock set forth opposite such Investor’s name on Schedule A hereto and (ii) all other documents, instruments and writings required to be delivered by the Company to the Investors pursuant to this Agreement or
otherwise herewith. 
 (b) At the Closing, the Investors shall deliver or cause to be delivered to the Company (i) the
Purchase Price by wire transfer of immediately available funds to an account designated by the Company and (ii) all other documents, instruments and writings required to be delivered by the Investors to the Company pursuant to this Agreement or
otherwise herewith. 
 ARTICLE III 
 REPRESENTATIONS AND WARRANTIES OF THE COMPANY 
 Except as Previously
Disclosed, the Company represents and warrants to the Investors that: 
 Section 3.1 Organization. The Company and each
of its Subsidiaries is duly organized and validly existing and in good standing under the laws of the state of its formation; has all requisite power and authority to own its property and conduct its business in all material respects as currently
conducted; and, except as would not, individually or in the aggregate, have or reasonably be expected to have a Material Adverse Effect, is duly qualified as a foreign corporation for the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases properties, or conducts any business so as to require such qualification. 
 Section 3.2 Authorization. The Company has all corporate power and authority to execute and deliver this Agreement, the Registration Rights Agreement and the Credit Agreement Amendment and to perform its obligations hereunder and
thereunder. The execution, delivery and performance by the Company of this Agreement, the Registration Rights Agreement and the Credit Agreement Amendment and the consummation of the transactions contemplated hereby and thereby have been (or will be
when delivered) duly authorized by all necessary corporate action on the part of the Company, and no further approval or authorization is required on the part of the Company, other than the Shareholder Approval. This Agreement, the Registration
Rights Agreement and the Credit Agreement Amendment, assuming due authorization, execution and delivery of this Agreement, the Registration Rights Agreement and the Credit Agreement Amendment by the Investors and the other parties thereto, do
constitute (or will constitute when delivered) the valid and binding obligation of the Company, enforceable against the Company in accordance with their terms, except as such may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization or other similar laws affecting creditors’ rights generally and by general equitable principles. 
 Section
3.3 Capitalization. (a) As of the date hereof, the Company is authorized to issue up to 100,000,000 shares of Common Stock, 1,000,000 of class B common stock, par value $0.01 per share, 10,000,000 shares of undesignated preferred stock,
par value $0.01 per share, 58,000 shares of series A senior cumulative preferred stock, par value $0.01 per share and 92,000 shares of series B junior cumulative preferred stock, par value $0.01 per share and (b) as of December 18, 2009,
has 24,162,893 shares of Common Stock issued and outstanding (including 484,000 shares of unvested restricted stock and 71,950 shares of Common Stock held in treasury) and no shares of class B common stock, undesignated preferred stock (other than
as contemplated by this Agreement), series A senior cumulative preferred stock and series B junior cumulative preferred stock outstanding. Since December 18, 2009 and prior to the date of this Agreement, the Company has not issued any shares of
its Capital Stock or any

  

 8 

 
securities containing options or rights to acquire any shares of its Capital Stock, other than shares of Common Stock issued pursuant to the exercise of options to purchase shares of Common Stock
outstanding under the Stock Plans as of December 18, 2009. As of December 18, 2009, there are outstanding options to purchase an aggregate of not more than 2,161,560 shares of Common Stock, all of which options are outstanding under the
Stock Plans, and 1,716,417 shares of Common Stock remain available for future grant under the Stock Plans. Of such outstanding options, (x) options to purchase 515,241 shares of Common Stock have an exercise price of $3.00 or less and a
weighted average exercise price of $1.32 and (y) options to purchase 1,646,319 shares of Common Stock have an exercise price of $3.01 or more. All of the outstanding shares of Capital Stock of the Company have been duly and validly authorized
and issued and are fully paid and non-assessable and were not issued in violation of any preemptive rights, resale rights, rights of first refusal or similar rights. Other than those granted pursuant to the Stock Plans, (i) there are no
options, warrants, calls, rights, convertible securities, commitments or agreements (which, for purposes of this Agreement, shall be deemed to include “phantom” stock or other commitments that provide any right to receive value or benefits
similar to capital stock or other similar rights, except for the Company’s discretionary quarterly or annual cash incentive payments to its employees made in the ordinary course) to which the Company is a party or by which the Company is bound
obligating the Company to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of Capital Stock or obligating the Company to grant, extend or enter into any such option, warrant, call or right to acquire Capital Stock
of the Company, (ii) there are no outstanding contractual obligations of the Company or any of its Subsidiaries obligating it to repurchase, redeem or otherwise acquire any shares of Capital Stock of the Company, except for obligations to
repurchase, redeem or otherwise acquire shares of Capital Stock for nominal consideration under agreements with directors, officers or employees in effect on the date hereof, and (iii) there are no outstanding debt securities of any kind
convertible into or exchangeable or exercisable for the Capital Stock of the Company. There are no statutory or contractual preemptive rights or rights of first offer or refusal or similar rights with respect to any shares of Capital Stock of the
Company, and there are no declared and unpaid dividends or distributions on any shares of Capital Stock of the Company. 
 Section 3.4 Valid Issuance of Shares. The Shares will be, as of the date of issuance, (a) duly authorized by all necessary corporate action on the part of the Company, (b) when issued and delivered by the Company against
payment therefor as provided in this Agreement will be validly issued, fully paid and nonassessable, (c) will not be subject to any statutory or contractual preemptive rights or other similar rights of stockholders and (d) will have the
rights set forth in the Certificate of Designations. The Common Stock issuable upon conversion of the Shares has been duly and validly reserved for issuance and, upon issuance in accordance with the terms of the Certificate of Designations, will be
validly issued, fully paid and nonassessable and will be free of Liens other than restrictions on transfer under this Agreement and under applicable state and federal securities laws. 
 Section 3.5 Non-Contravention; Authorizations. The Company is not in violation or default of any provision of its Amended and
Restated Certificate of Incorporation or Restated By-Laws. After the Company obtains the consent of its lenders under its Credit Agreement and amends and restates its Amended and Restated Certificate of Incorporation as contemplated herein, the
Company’s execution, delivery and performance of and compliance with this Agreement, the Registration Rights Agreement and the Credit Agreement Amendment, the issuance and delivery of the Shares, the issuance of Common Stock upon conversion of
the Shares and the consummation of the other transactions contemplated hereby and thereby (a) will not result in any violation of the provisions of the Amended and Restated Certificate of Incorporation or Restated By-Laws of the Company,
(b) will not conflict with or constitute a breach of or a default (or constitute an event which with notice or lapse of time or both would become a default) under, or give rise to any right of termination, recapture, acceleration or
cancellation under any agreement, lease, mortgage, license, indenture or other contract to which the Company or any of its Subsidiaries is a party or by which its properties are bound (each, a “Company Agreement”) or result in

  

 9 

 
the creation or imposition of any Lien upon any property or assets of the Company or any of its Subsidiaries, or the suspension, revocation, impairment or forfeiture of any material permit,
license, authorization, or approval applicable to the Company, its business or operations, or any of its assets or properties, except in any case in this clause (b) as would not, individually or in the aggregate, have a Material Adverse Effect
and (c) will not result in any violation of any applicable Law or any judgment, order or decree of any Governmental Entity applicable to the Company or any of its Subsidiaries, except for such violations as would not, individually or in the
aggregate, be material to the Company and its Subsidiaries, taken as a whole. 
 Section 3.6 Litigation. There is no
action, suit, proceeding or investigation pending or, to the knowledge of the Company, threatened against, nor any outstanding judgment, order or decree affecting, the Company or any of its Subsidiaries before or by any Governmental Entity or
arbitral body that, individually or in the aggregate, would reasonably be expected to result in a liability or a limitation on its operations that is material to the Company and its Subsidiaries, taken as a whole. Neither the Company nor any of its
Subsidiaries is in default with respect to any material judgment, order or decree of any Governmental Entity specifically directed at the Company or any of its Subsidiaries. The Company is not a party or subject to, and none of its assets is bound
by, the provisions of any order, writ, injunction, judgment, or decree of any court or government agency or instrumentality specifically directed at the Company or any of its Subsidiaries that is material to the Company and its Subsidiaries, taken
as a whole. 
 Section 3.7 Compliance with Laws; Permits. 
 (a) The Company and each of its Subsidiaries is not in violation of any applicable Law of any Governmental Entity (including those with
respect to the Company’s franchise operations), except where such violation would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. To the knowledge of the Company, the Company and its Subsidiaries
are not being investigated with respect to, or has not been threatened to be charged with or given notice of any violation of, any applicable Law, except where such of the foregoing as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. 
 (b) The Company and its Subsidiaries possess all permits or licenses from
Governmental Entities that are required to conduct its businesses as currently conducted, except for such permits or licenses the absence of which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
The Company has performed all of its obligations with respect to its permits and licenses, except as would not reasonably be expected to have a Material Adverse Effect. No event has occurred that allows, or with or without the passage of time or
giving of notice, or both, would allow, revocation or termination thereof, and the Company has not received any written notice of proceedings relating to the revocation or modification of any such permit or license, which revocation, termination or
modification would reasonably be expected to have a Material Adverse Effect. 
 Section 3.8 Periodic Filings; Financial
Statements; Undisclosed Liabilities. 
 (a) Since September 28, 2008, the Company has timely filed all reports,
registrations, documents, filings, statements and submissions, together with any amendments thereto (collectively the “Company SEC Documents”), that were required to be filed with the SEC pursuant to Section 13(a), 14(a) and
15(d) of the Exchange Act. As of their respective filing dates or, in the case of Company SEC Documents that were subsequently amended prior to the date hereof, as of the respective date of such amendments, the Company SEC Documents and the
Registration Statement complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of such Company SEC Documents or the Registration Statement contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein or necessary to make such statements, in the light of the circumstances in which they were made, not misleading. 
  

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 (b) The Company’s consolidated financial statements, including the notes thereto,
included or incorporated by reference in the Company SEC Documents (the “Company Financial Statements”) have been prepared in accordance with GAAP consistently applied (except as may be indicated in the notes and schedules thereto)
during the periods involved and present fairly in all material respects the Company’s consolidated financial position at the dates thereof and of its operations and cash flows for the periods specified therein (subject to the absence of notes
and year-end adjustments in the case of unaudited statements). 
 (c) Neither the Company nor any of its Subsidiaries has any
liabilities or obligations (accrued, absolute, contingent or otherwise), other than liabilities or obligations (i) reflected on, reserved against, or disclosed in the notes to, the consolidated balance sheets of the most recent Company
Financial Statements, (ii) incurred in the ordinary course of business consistent with past practice since the date of the consolidated balance sheet in the most recent Company Financial Statements or (iii) that would not, individually or
in the aggregate, have or reasonably be expected to have a Material Adverse Effect. 
 (d) The Company (i) has implemented
and maintains disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) that are reasonably designed to ensure that material information relating to the Company, including its consolidated Subsidiaries, is made known
to the individuals responsible for the preparation of the Company’s filings with the SEC, and (ii) has disclosed, based on its most recent evaluation prior to the date hereof, to the Company’s outside auditors and the audit committee
of the Board (A) any significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that are reasonably likely to adversely affect
the Company’s ability to record, process, summarize and report financial information and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal
controls over financial reporting. 
 Section 3.9 No Material Adverse Effect. Since June 28, 2009, no event or
circumstance has occurred that, individually or in the aggregate, has had or would reasonably be expected to have a Material Adverse Effect. 
 Section 3.10 Brokers and Finders. Except for Jefferies & Company, Inc., the fees of which will be paid by the Company, neither the Company nor any of its Subsidiaries has employed any
broker or finder or incurred any liability for any financial advisory fee, brokerage fee, commission or finder’s fee, and no broker or finder has acted directly or indirectly for the Company or any of its Subsidiaries in connection with this
Agreement or the transactions contemplated hereby. 
 Section 3.11 Employee Benefits. Except as would not, individually
or in the aggregate, have or reasonably be expected to have a Material Adverse Effect, no material payment (whether of severance pay, bonus or otherwise), acceleration, forgiveness of indebtedness, vesting, distribution, increase in benefits or
obligation to fund benefits with respect to any employee will occur as a result of either the execution of or the performance of the transactions contemplated in this Agreement (including, without limitation, upon any resulting termination of
employment or service at any time prior to or following the Closing). Except as would not, individually or in the aggregate, have or reasonably be expected to have a Material Adverse Effect, no payment or benefit that will be made by the Company or
any of its Subsidiaries with respect to any employee, former employee, director or agent of the Company or its Subsidiaries as a result of either the execution of or the performance of the transactions contemplated in

  

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this Agreement (including, without limitation, upon any resulting termination of employment or service at any time prior to or following the Closing), will be characterized as an “excess
parachute payment,” within the meaning of Section 280G of the Internal Revenue Code. The Company has no material liability (including on account of an ERISA Affiliate) under Part 3, Subtitle B of Title I of ERISA or Title IV of ERISA.

 Section 3.12 Title to Properties. 
 (a) Except as would not be material to the Company and its Subsidiaries, taken as a whole, the Company and its Subsidiaries have good and marketable title to each parcel of real property owned by it and
good and valid title to all of its other material properties and assets, in each case free and clear of all Liens, except (a) Incidental Liens and (b) Liens granted pursuant to the Credit Agreement. 
 (b) All of the leased real property of the Company and its Subsidiaries is held under leases or subleases that are legal, valid, binding,
enforceable and in full force and effect in all material respects in accordance with their respective terms, and there is no default or breach by the Company or any Subsidiary, or, to the Company’s knowledge, any other party, in the timely
performance of any obligation to be performed or paid thereunder or any other provision thereof, except in each case as would not be material to the Company and its Subsidiaries, taken as a whole. The Company’s execution, delivery and
performance of and compliance with this Agreement, the Registration Rights Agreement and the Credit Agreement Amendment, the issuance and delivery of the Shares, the issuance of Common Stock upon conversion of the Shares and the consummation of the
other transactions contemplated hereby and thereby, will not conflict with or constitute a breach of or a default (or an event which with notice or lapse of time or both would become a default) under, or give rise to any right of termination,
recapture, acceleration or cancellation under any lease or sublease to which the Company or any of its Subsidiaries is a party, except as would not be material to the Company and its Subsidiaries, taken as a whole. 
 Section 3.13 Environmental Compliance. Each of the Company and its Subsidiaries (a) is in compliance with all Environmental
Laws, (b) has received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct its respective businesses, (c) is in compliance with all terms and conditions of any such permit, license or
approval and (d) has not emitted, discharged, released, or caused any threatened release, of Hazardous Materials on or from any of its properties referenced in the Company SEC Documents, or at any off-site property, or any property formerly
owned, leased, operated or used by the Company and, to its knowledge, the Company is not responsible or liable for any such emissions, discharges, releases or threatened releases under contract or Environmental Laws, and there have been no notices
or allegations of such responsibility or liability, in each of the foregoing clauses (a), (b), (c) and (d), that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. 
 Section 3.14 Taxes. Except as Previously Disclosed, each of the Company and its Subsidiaries has (a) timely filed all material
Tax Returns required to have been filed (including any validly obtained extensions), (b) timely paid all material Taxes due and payable except for those which are being contested in good faith by appropriate proceedings and in respect of which
adequate reserves with respect thereto are maintained in accordance with GAAP and (c) complied, in all material respects, with all applicable Laws relating to the withholding of Taxes and timely collected or withheld and paid over to the proper
Governmental Entity all material amounts required to be so collected or withheld and paid over. Except as Previously Disclosed, none of the Company and its Subsidiaries is the subject of any current, pending or threatened action, suit, proceeding,
investigation, audit, claim or assessment with regard to any material Taxes, and there are no Liens for material Taxes (other than Incidental Liens) upon the assets of the Company or its Subsidiaries. 
  

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 Section 3.15 Subsidiaries. The Company has no Subsidiaries other than those
Previously Disclosed. The Company owns, directly or indirectly, all of the issued and outstanding shares of capital stock of or all other equity interests in each of its Subsidiaries, free and clear of any Liens and all of such shares or equity
interests are duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights. 
 Section
3.16 Governmental Consents. No consent, approval, order, or authorization of, or registration, qualification, declaration, or filing with, any Governmental Entity on the part of the Company is required in connection with the offer, sale, or
issuance of the Shares (and the Common Stock issuable upon conversion of the Shares) or the consummation of any other transaction contemplated hereby, except for the following: (a) the filing of the Certificate of Designations in the office of
the Secretary of State of the State of Delaware, which will be filed by the Company prior to the Closing; (b) the compliance with other applicable state securities laws; (c) the filing with the SEC of such reports under the Exchange Act as
may be required in connection with this Agreement and the transactions contemplated by this Agreement; and (d) such that if not made or obtained would not reasonably be expected to prevent, materially delay or materially impair the ability of
the Company to consummate the transactions contemplated hereby in the timeframe contemplated hereby and would not otherwise result in a liability that is material to the Company and its Subsidiaries, taken as a whole. Assuming that the
representations of the Investors set forth in ARTICLE IV below are true and correct, the offer, sale, and issuance of the Shares in conformity with the terms of this Agreement are exempt from the registration requirements of Section 5 of
the Securities Act and all applicable state securities laws, and neither the Company nor any authorized agent acting on its behalf has taken any action hereafter that would cause the loss of such exemptions. 
 Section 3.17 Investment Company Act. Neither the Company nor any of its Subsidiaries is an investment company within the meaning of
the Investment Company Act of 1940, as amended, or, directly or indirectly, controlled by or acting on behalf of any Person which is an investment company, within the meaning of said Act. 
 Section 3.18 Agreements. Except as would not reasonably be expected to have a Material Adverse Effect: (a) each of the Company
Agreements is valid and binding on the Company and its Subsidiaries, as applicable, and in full force and effect; (b) the Company and each of its Subsidiaries, as applicable, are in compliance with and have performed all obligations required to
be performed by them to date under each Company Agreement; and (c) as of the date hereof, neither the Company nor any of its Subsidiaries has received notice of any material violation or default (or any condition which with the passage of time
or the giving of notice or both would cause such a violation of or a default) by any party under any Company Agreement nor, to the Company’s knowledge, has such notice been threatened. 
 Section 3.19 Insurance. Except as would not, individually or in the aggregate, have a Material Adverse Effect, (a) the assets,
properties and businesses of the Company are subject to reasonable and customary policies relative to other participants in the restaurant industry, (b) all material insurance policies of the Company and its Subsidiaries are in full force and
effect (except for policies that have expired in accordance with their terms in the ordinary course), (c) neither the Company nor any of its Subsidiaries is in breach or default thereunder and (d) no notice of cancellation or termination
has been received with respect to any such policy. 
 Section 3.20 Intellectual Property. 
 (a) The Company owns or has the right to use, free and clear of all Liens, all (i) material trademarks, trade names, trade dress,
designs, logos and other source identifiers used in connection with the operation of its business as now operated by them (the “Business Marks”), and (ii)

  

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the material concepts, methods, recipes, formulae, processes and confidential and proprietary information and material embodied or used in the conduct of its business as now operated by them
(together with the Business Marks, the “Company Intellectual Property Rights”). 
 (b) All registrations and
applications to register the Business Marks anywhere in the world are subsisting and in good standing, and, to the knowledge of the Company, the Business Marks are valid and enforceable. To the knowledge of the Company, (i) no third party is or
has infringed, diluted or misappropriated any of the Company Intellectual Property Rights and (ii) the Company is not infringing, misappropriating or otherwise violating the intellectual property rights of any third party in each case as which
would reasonably be expected to have a Material Adverse Effect. 
 Section 3.21 No Restriction on Ability to Pay
Dividends. The Company is not party to any contract, agreement, arrangement or other understanding, oral or written, express or implied, other than the Credit Agreement, and is not subject to any provision in its Amended and Restated Certificate
of Incorporation or Restated By-Laws or other governing documents or resolutions of the Board, that could restrict, limit, prohibit or prevent the Company’s ability to pay dividends on the Shares in the manner and amounts contemplated by the
Certificate of Designations and permitted under applicable Laws. 
 ARTICLE IV 
 REPRESENTATIONS AND WARRANTIES OF THE INVESTORS 
 Each of the Investors represents and warrants to the Company, severally and not jointly, that: 
 Section 4.1 Organization. Such Investor is duly organized and is validly existing and in good standing as a limited partnership under the laws of the State of Delaware and, has all the requisite
corporate or other power and authority to carry on its business as it is now being conducted, and no proceedings have been instituted in such jurisdiction revoking, limiting, curtailing, or seeking to revoke, limit or curtail, such power, authority
or qualification. 
 Section 4.2 Authorization. Such Investor has the full right, power, authority and capacity to enter
into this Agreement and the Registration Rights Agreement and to consummate the transactions contemplated by this Agreement and the Registration Rights Agreement. The execution, delivery and performance by such Investor of this Agreement and the
Registration Rights Agreement and the consummation of the transactions contemplated hereby and thereby have been (or will be when delivered) duly authorized by all necessary and proper actions on the part of such Investor. This Agreement and the
Registration Rights Agreement have been (or will be) duly executed and delivered by such Investor and, assuming due authorization, execution and delivery of this Agreement and the Registration Rights Agreement by the Company, do constitute (or will
constitute when delivered) the valid and binding obligation of such Investor, enforceable against such Investor in accordance with its terms, except as such may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization or other
similar laws affecting creditors’ rights generally and by general equitable principles. 
 Section 4.3
Non-Contravention; Governmental Authorization. The execution, delivery and performance by such Investor of this Agreement and the consummation of the transactions contemplated hereby will not: (a) conflict with or violate any provision
of its limited partnership agreement; (b) conflict with or result in any breach of, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give rise to any right of termination,
acceleration or cancellation under, any material agreement, lease, mortgage, license, indenture or any other contract to which such Investor is a party or by which its properties may be bound or affected; (c) conflict with or violate any Law
applicable to such Investor or (d) result in the creation of any Lien upon any properties or assets of

  

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such Investor or the suspension, revocation, impairment or forfeiture of any material permit, license, authorization or approval applicable to such Investor, its business or operations, or any of
its assets or properties, except, in the case of clauses (b), (c) and (d), as would not, individually or in the aggregate, reasonably be expected to materially and adversely affect such Investor’s ability to perform its obligations under
this Agreement or consummate the transactions contemplated hereby on a timely basis. 
 Section 4.4 Securities Act
Compliance. 
 (a) Such Investor is: (i) an “accredited investor” within the meaning of Rule 501 of
Regulation D promulgated under the Securities Act; (ii) aware that the issuance and sale to such Investor of the Shares and the Common Stock issuable upon conversion of the Shares (collectively, the “Securities”) pursuant to
this Agreement is being made in reliance on a private placement exemption from registration under the Securities Act and (iii) is acquiring the Securities for its own account without a view to distributing the Securities in violation of the
Securities Act or any applicable state blue sky law. 
 (b) Such Investor understands and agrees that the Securities are being
offered in a transaction not involving any public offering within the meaning of the Securities Act, that such Securities have not been and, except as contemplated by the Registration Rights Agreement, will not be registered under the Securities Act
and that such Securities may be offered, resold, pledged or otherwise transferred only (i) in a transaction not involving a public offering, (ii) pursuant to an exemption from registration under the Securities Act provided by Rule 144
thereunder (if available), (iii) pursuant to an effective registration statement under the Securities Act or (iv) to the Company or one of its Subsidiaries, in each of cases (i) through (iv) in accordance with any applicable
state and federal securities laws, and that it will notify any subsequent purchaser of the Securities from it of the resale restrictions referred to above, as applicable. 
 (c) Such Investor understands that, unless sold pursuant to a registration statement that has been declared effective under the Securities Act or in compliance with Rule 144 thereunder, the Company may
require that the Securities will bear a legend or other restriction substantially to the following effect (it being agreed that if the Securities are not certificated, other appropriate restrictions shall be implemented to give effect to the
following): 
 “THIS SECURITY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED, (THE “SECURITIES ACT”), AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. THE HOLDER OF THIS SECURITY AGREES
FOR THE BENEFIT OF THE COMPANY THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN A TRANSACTION NOT INVOLVING A PUBLIC OFFERING, (II) PURSUANT TO ANY OTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, INCLUDING RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (III) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (IV) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, IN EACH OF CASES
(I) THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE STATE AND FEDERAL SECURITIES LAWS, AND (B) THE HOLDER WILL NOTIFY ANY SUBSEQUENT PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.”

  

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 (d) Such Investor acknowledges that it: (i) is able to conduct its own evaluation of
the transactions contemplated by this Agreement; (ii) has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its prospective investment in the Securities; and (iii) has
the ability to bear the economic risks of its prospective investment and can afford the complete loss of such investment. 
 (e)
Such Investor acknowledges that (i) it has conducted its own investigation of the Company and the terms of the Securities, (ii) it has had access to the Company’s public filings with the SEC and to such financial and other information
as it deems necessary (including all environmental reports, evaluations, assessments, permits and correspondence with respect thereto) to make its decision to purchase the Securities and (iii) has been offered the opportunity to conduct such
review and analysis of the business, assets, condition, operations and prospects of the Company and its Subsidiaries and to ask questions of the Company and received answers thereto, each as it deemed necessary in connection with the decision to
purchase the Securities. Such Investor further acknowledges that it has had such opportunity to consult with its own counsel, financial and tax advisors and other professional advisers as it believes is sufficient for purposes of the purchase of the
Securities. 
 (f) Except for the representations and warranties contained in ARTICLE III of this Agreement (including
any references in such Article to information Previously Disclosed), such Investor acknowledges that neither the Company nor any Person on behalf of the Company makes, and such Investor has not relied upon, any other express or implied
representation or warranty with respect to the Company or any of its Subsidiaries or with respect to any other information provided to such Investor in connection with the transactions contemplated by this Agreement. The foregoing, however, does not
limit or modify the representations and warranties contained in ARTICLE III of this Agreement or the right of such Investor to rely thereon. 
 Section 4.5 Ownership. As of the date of this Agreement, such Investor owns no Capital Stock of the Company. 
 Section 4.6 Financial Capability. Such Investor currently has or will have at Closing available funds necessary to consummate the Closing on the terms and conditions contemplated by this Agreement.

 Section 4.7 Brokers and Finders. Neither such Investor nor any of its Affiliates or any of their respective officers
or directors has employed any broker or finder or incurred any liability for any financial advisory fee, brokerage fee, commission or finder’s fee, and no broker or finder has acted directly or indirectly for such Investor or any of its
Affiliates or any of their respective officers or directors in connection with this Agreement or the transactions contemplated hereby. 
 ARTICLE V 
 CONDITIONS TO CLOSING 
 Section 5.1 Conditions to the Obligations of the Investors. The obligations of the Investors to purchase the Shares at the Closing is subject to the fulfillment or waiver on or before the Closing
of each of the following conditions: 
 (a) (i) the representations and warranties of the Company in this Agreement (other than
the representations and warranties set forth in Section 3.2 (Authorization), Section 3.3 (Capitalization), Section 3.4 (Valid Issuance of Shares) and Section 3.9 (No Material Adverse Effect)) shall be
true and correct (disregarding all qualifications or limitations as to materiality or a Material Adverse Effect) as of the date hereof and as of the Closing Date as though made on and as of the Closing

  

 16 

 
Date (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty shall be true and correct as of such
earlier date), except where failure of such representations and warranties to be so true and correct would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect and (ii) the representations and
warranties of the Company set forth in Section 3.2 (Authorization), Section 3.4 (Valid Issuance of Shares) and Section 3.9 (No Material Adverse Effect) shall be true and correct, and the representations and
warranties of the Company set forth in Section 3.3 (Capitalization) shall be true and correct in all material respects, in each case as of the date hereof and as of the Closing Date as though made on and as of the Closing Date (except to
the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty shall be true and correct as of such earlier date); 
 (b) the Company shall have performed and complied in all material respects with all agreements, obligations, and conditions contained in
this Agreement that are required to be performed or complied with by it on or before the Closing; 
 (c) the Company shall have
delivered a certificate signed on behalf of the Company by the Chief Executive Officer or Chief Financial Officer of the Company certifying that the conditions specified in Section 5.1 (a), (b), (i), (j) and (l) have
been fulfilled; 
 (d) the Company shall have adopted and filed with the Secretary of State of the State of Delaware the
Certificate of Designations, and the Certificate of Designations shall have become effective as an amendment to the Company’s Amended and Restated Certificate of Incorporation; 
 (e) the Company shall have executed and delivered the Registration Rights Agreement; 
 (f) the Investors shall have received from Kirkland & Ellis LLP, special counsel for the Company, an opinion, dated as of the
Closing Date, in a form mutually agreed upon; 
 (g) simultaneous with the Closing, the Company shall have paid (or deemed to
have paid through a reduction in the Purchase Price) the Investors a funding fee equal to $625,000, representing 2.5% of the Purchase Price; 
 (h) simultaneous with the Closing, the Company shall have reimbursed the Investors for their reasonable and documented out-of-pocket fees and expenses incurred on or before the Closing Date in connection
with the transactions contemplated by this Agreement; provided, that in no event shall the Company be obligated to reimburse the Investors for any such fees or expenses in excess of $500,000 in the aggregate; 
 (i) the Company shall have raised at least $25.0 million in gross proceeds in the Rights Offering; 
 (j) the Company shall have obtained the Shareholder Approval; 
 (k) simultaneous with the Closing, the Preferred Director shall be appointed to the Board and the Investors shall have received evidence satisfactory to them of the taking of such action; 
 (l) the Credit Agreement Amendment shall have become effective or will become effective immediately after Closing; and 
  

 17 

 (m) the Shares to be issued to the Investors at Closing will represent, upon issuance and on
an as-if converted basis, not less than 19.0% of the shares of Common Stock outstanding after giving effect to the issuance of the Shares and the shares of Common Stock issued in the Rights Offering, such percentage to be calculated (A) without
taking into account shares of Common Stock issued upon exercise of stock options outstanding as of December 18, 2009 (B) without giving effect to the repurchase or acquisition by the Company of any shares of Capital Stock since
December 18, 2009 and (C) based on the assumption that at the Rights Offering subscription price the Company raised only $25 million as part of the Rights Offering. 
 Section 5.2 Conditions to the Obligations of the Company. The obligations of the Company to issue, sell and deliver the Shares to the
Investors are subject to the fulfillment or waiver on or before the Closing of each of the following conditions: 
 (a) all
representations and warranties of the Investors in this Agreement shall be true and correct (disregarding all qualifications or limitations as to materiality) as of the date hereof and as of the Closing Date (except to the extent that any such
representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty shall be true and correct as of such earlier date), except where failure of such representations and warranties to be so true and
correct would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; 
 (b) the
Investors shall have paid to the Company the Purchase Price, net of any reduction thereto pursuant to Section 5.1(g); 
 (c) the Investors shall have executed and delivered the Registration Rights Agreement; 
 (d) the Company shall have
raised at least $25.0 million in gross proceeds in the Rights Offering; 
 (e) the Company shall have obtained the Shareholder
Approval; 
 (f) the Shares to be issued to the Investors at Closing and the shares of Common Stock issued as part of the Rights
Offering will represent, upon issuance and on an as-if converted basis, not more than 46.6% of the shares of Common Stock outstanding after giving effect to the issuance of the Shares and the issuance of the shares of Common Stock as part of the
Rights Offering, such percentage to be calculated (A) without taking into account shares of Common Stock issued upon exercise of stock options outstanding as of December 18, 2009 (B) without giving effect to the repurchase or
acquisition by the Company of any shares of Capital Stock since December 18, 2009 and (C) based on the assumption that at the Rights Offering subscription price the Company raised only $25 million as part of the Rights Offering; and

 (g) the Credit Agreement Amendment shall have become effective or will become effective immediately after Closing.

 ARTICLE VI 
 COVENANTS 
 Section 6.1 Securities to be Issued. The Shares to be issued to the Investors pursuant to
this Agreement shall be subject to the terms and provisions of the Company’s Amended and Restated Certificate of Incorporation, including the Certificate of Designations. The initial “Conversion Rate” of the Shares for purposes of
Section 3(o) of the Certificate of Designations shall be the greater of (i)

  

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307.692 or (ii) 1,000 divided by a per share price that represents a fifteen percent (15%) premium to the per share purchase price for the shares of Common Stock offered in the Rights
Offering; provided that such Conversion Rate shall not be greater than 344.828. 
 Section 6.2 Publicity. The
Company and the Investors shall communicate with each other and cooperate with each other prior to any public disclosure of the purchase and sale of the Shares. The Company, on the one hand, and the Investors, on the other hand, agree that no public
release or announcement concerning the purchase and sale of the Shares shall be issued by or as a result of the actions of any of them without the prior consent of the other, which consent shall not be unreasonably withheld or delayed, except for
any release or announcement that may be required by Law or the rules and regulations of Nasdaq, in which case the party required to make the release or announcement shall, to the extent reasonably practicable, allow the other party reasonable time
to comment on such release or announcement in advance of such issuance. The provisions of this Section 6.2 shall not restrict the ability of a party to summarize or describe the transactions contemplated by this Agreement in any proxy,
prospectus or similar offering document so long as the other party is provided a reasonable opportunity to review such disclosure in advance. 
 Section 6.3 Use of Proceeds. The Company shall apply the net proceeds of the sale of the Shares to the retirement of indebtedness of the Company under the Credit Agreement in accordance with the
terms of the Credit Agreement Amendment. 
 Section 6.4 Filing of Certificate of Designations. The Company shall file, on
or before the Closing Date, the Certificate of Designations with the Secretary of State of the State of Delaware. 
 Section 6.5
Standstill Agreement. 
 (a) From and after the Closing Date until the earlier of (x) the first anniversary of the
Closing Date, (y) the date on which the Investors cease to own five percent (5%) of the Total Voting Power of the Company or (z) the occurrence of a Potential Change in Control Event (the “Standstill Period”), the
Investors agree that, without the prior written consent of the Board, they will not, directly or indirectly, through their Affiliates or associates or any other persons, or in concert with any person, or as a participant in a “group”
(within the meaning of Section 13(d) under the Exchange Act): 
 (i) purchase, offer to purchase, agree to
purchase or otherwise acquire Beneficial Ownership of the Company’s Common Stock, or securities convertible into or exchangeable for the Company’s Common Stock; provided, however, that if the Investors’ percentage of
Total Voting Power of the Company from the Shares (or shares of Common Stock received upon conversion of the Shares) decreases solely as a result of the Company issuing additional shares of Common Stock, then the Investors may purchase shares of
Common Stock in the open market or otherwise in order to restore the Investors to their percentage of Total Voting Power of the Company immediately prior to such issuance; 
 (ii) engage in any short selling or trading in derivative securities representing the right to vote or right to economic
benefits of any such securities of the Company; provided, however, that the Investors may engage in collared hedging transactions in the Common Stock designed solely to hedge their economic investment in the Company; 
 (iii) make any public announcement with respect to any Acquisition Transaction; 
  

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 (iv) enter into negotiations, arrangements or understandings with, or form,
join or participate in a group with, any other person in such other person’s taking, planning to take, or seeking to take any of the actions described in clauses (i) and (ii) of this Section 6.5(a); or 
 (v) except as expressly contemplated by this Agreement or the Certificate of Designations, otherwise act, alone or in the
concert with others, to seek to control or direct the management of the Company or the Board; 
 provided, that this
Section 6.5(a) shall not apply to the acquisition of the Shares as contemplated by this Agreement or to shares of the Company’s Common Stock issuable upon conversion of the Shares. 
 (b) Notwithstanding the provisions of Section 6.5(a), during the Standstill Period, (i) the Investors may make a proposal
for an Acquisition Transaction directly to the Board; provided, that the Investors do not, subject to applicable Law, publicly announce or disclose such proposal or permit such proposal to be publicly known and (ii) if the Board decides
to engage in a process that could result in an Acquisition Transaction, then the Company shall invite the Investors to participate in such process on terms generally made available to other participants, on the condition that the Preferred Director
or the Investor Nominee, as the case may be, shall recuse himself or herself from any meeting of the Board discussing such process. 
 Section 6.6 Board Representation and Board Composition. 
 (a) At any time that the Investors are not
entitled to elect the Preferred Director in accordance with Section 9(b) of the Certificate of Designations, but the Investors Beneficially Own shares of Common Stock and/or Shares representing in the aggregate five percent (5%) or more of
the Total Voting Power of the Company, then the Company agrees that it shall, to the extent necessary, cause the size of the Board to be increased by one (1) (unless already increased as required by the Certificate of Designations) and the
Investors shall have the right to appoint a current employee of BRS Management LP to fill the vacancy resulting thereby (the “Investor Nominee”). The Investors’ right to appoint the Investor Nominee shall continue for so long
as the Investors Beneficially Own in the aggregate at least five percent (5%) of the Total Voting Power of the Company (the “Common Stock Board Condition”). 
 (b) As soon as practical after the date of this Agreement, the Investors shall provide the Company with the name of the Preferred Director.
At least fifteen (15) days prior to Closing, the Preferred Director shall deliver a completed and signed questionnaire regarding his or her background and qualifications to serve as a director and such additional information that the Company
may reasonably request that could be material to an understanding of the qualifications of such nominee as a director. Upon request of the Company, the Preferred Director shall also provide a signed consent to be named in the Company’s proxy
statement as a nominee for election as a director, and shall execute and deliver all other documents reasonably requested by the Company in connection with the Preferred Director’s service as a director, including certifications as to
compliance with the Company’s insider trading policy and code of conduct applicable to directors. 
 (c) As long as the
Common Stock Board Condition continues to be satisfied, the Company shall use commercially reasonable efforts (i) to cause the Board (or the appropriate committee thereof) to nominate and recommend to the stockholders of the Company the
election or re-election of the Investor Nominee at any meeting of the stockholders of the Company called for such purposes, (ii) to seek the election or re-election of the Investor Nominee at each such meeting and (iii) if, for any reason,
a designee of the Investors hereunder is not elected to the Board by the stockholders, to use reasonable best efforts to cause another designee of the Investors to be elected to the Board; provided, that the Company shall not be obligated to
call more than two (2) stockholder meetings in any twelve (12) month period, cause any director to resign or increase the size of the Board. 
  

 20 

 (d) The Investors, by delivery of written notice to the Company at any time or from time to
time, shall have the right, in their sole and absolute discretion, to name a replacement Investor Nominee. Such replacement Investor Nominee shall be a current employee of BRS Management LP and shall be reasonably satisfactory to the Board in
accordance with the applicable selection criteria for directors of the Company’s Nominating and Corporate Governance Committee and shall provide, prior to appointment, the information and documents referred to in Section 6.6(b)
above. 
 (e) In addition to the Preferred Director, following the Closing, the Company agrees in consultation with the
Investors, to initiate a search for an additional independent director with substantial restaurant industry experience (the “Additional Director”). The identification and appointment of the Additional Director shall be subject to
the mutual consent and approval of both the Company and the Investors. 
 (f) Until the Investors no longer have the right to
appoint or elect either the Preferred Director or the Investor Nominee, the Company agrees that without the prior consent of the Investors it shall not expand the size of its Board beyond the Board’s current size of six (6) members;
provided, that the Board may be expanded for the Preferred Director, the Investor Nominee and the Additional Director, as contemplated by this Section 6.6. 
 (g) If at any time the percentage of Voting Stock Beneficially Owned by the Investors decreases below five percent (5%) as a result of
the Company issuing additional shares of Common Stock, the Company shall provide the Investors with written notice thereof, including the applicable calculations with respect thereto. In the event that, within ten (10) business days of receipt
of such notice, the Investors notify the Company that they intend within ninety (90) days to acquire sufficient additional Voting Stock in accordance with and to the extent permitted by Section 6.5(a)(i) of this Agreement necessary
to maintain their Board representation, then, until the end of such ninety (90) day period (and thereafter if the Investors in fact restore their percentage to the extent necessary to maintain their Board representation) the Board shall
continue to include the Preferred Director or the Investor Nominee, as the case may be. 
 Section 6.7 Supermajority Board
Actions. Until the earlier of the date on which (x) neither the Preferred Director nor the Investor Nominee is serving on the Board (other than as a result of the Company’s stockholders failing to elect such nominee) or (y) the
Investors cease to Beneficially Own five percent (5%) of the Total Voting Power of the Company, the following actions shall require approval by 66% of the members of the Board: 
 (a) entering into a definitive agreement that provides for an Acquisition Transaction; 
 (b) any sale of the Company’s assets or properties involving consideration in excess of $25,000,000, other than inventory in the
ordinary course of business; or 
 (c) any purchase of an equity interest, or any portion of assets of, or any merger with or
into or any business combination involving, any other company or entity in a transaction involving total consideration in excess of $25,000,000. 
  

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 Section 6.8 Transfer Restrictions. 
 (a) The Investors shall not sell, transfer or otherwise dispose of all or any portion of the Securities prior to the first
(1st) anniversary of the Closing Date; provided, that nothing in this Section 6.8 shall restrict the Investors from transferring the Shares to any Permitted Transferee; provided, that such Permitted Transferee agrees
in writing to be bound by the terms of this Agreement. 
 (b) For the period commencing on the first (1st) anniversary of
the Closing Date and ending on the second (2nd) anniversary of the Closing Date, the Investors shall not sell, transfer or otherwise dispose of all or any portion of the Shares in a privately negotiated transaction to any Person that
(i) is a Competitor of the Company or (ii) will Beneficially Own more than 5% of the Total Voting Power of the Company after giving effect to such transaction, without the Company’s consent, which consent shall not be unreasonably
withheld or delayed; provided, however, that nothing in this Section 6.8(b) shall prohibit the transfer of the Shares or shares of Common Stock issuable upon conversion of the Shares into the public market, to investment
banks or to brokers or other financial intermediaries engaged in the securities business, so long as such transfers are not made in bad faith to avoid the transfer restrictions of this Section 6.8(b). 
 Section 6.9 Financial Information. For so long as the Investors continue to Beneficially Own at least five percent (5%) of the
Total Voting Power of the Company, the Company shall provide the Investors with: (i) unaudited monthly (as soon as available and in any event within thirty (30) days of the end of each month), unaudited quarterly (as soon as available and
in any event within forty-five (45) days of the end of each quarter) and audited (by a nationally recognized accounting firm) annual (as soon as available and in any event within ninety (90) days of the end of each year) financial
statements prepared in accordance with GAAP (which statements shall include the consolidated balance sheets of the Company and its Subsidiaries and the related consolidated statements of income, shareholders’ equity and cash flows, a comparison
to the corresponding data for the corresponding periods of the previous fiscal year and from the Company’s financial plan and a reasonably detailed narrative descriptive report of the operations of the Company and its Subsidiaries in the form
prepared for presentation to the senior management of the Company for each applicable period and for the period from the beginning of the then current fiscal year to the end of such period and a comparison to the corresponding data for the
corresponding periods of the previous fiscal year and from the Company’s financial plan), (ii) a copy of the financial plan of the Company in the form approved by the Board prior to the beginning of each fiscal year and any revisions
thereof approved by the Board and (iii) such other information as the Investors may reasonably request, in each case consistent with materials otherwise provided to the members of the Board. Any documents or other information that is filed with
the SEC need not be separately provided to the Investors. 
 Section 6.10 No Solicitation. From and after the date of
this Agreement until the earlier of the Closing Date or the termination of this Agreement, the Company agrees that the Company shall not, and shall use its reasonable best efforts to cause its stockholders, officers, directors, affiliates,
representatives or advisers (the “Representatives”) not to take, directly or indirectly, any action to initiate, assist, encourage, solicit, accept or otherwise pursue any offer or inquiry from any Person to engage in any
Alternative Proposal, or to enter into any definitive agreement with respect to, or consummate, any Alternative Proposal prior to the earlier of the termination of this Agreement or the Closing. 
 Notwithstanding anything in this Agreement to the contrary, the Company (directly or through its Representatives) may engage in substantive
discussions or in negotiations with a Person regarding an Alternative Proposal if the Board believes, after consultation with the Company’s outside counsel, that its failure to consider such Alternative Proposal would result in a breach of
fiduciary duties of the Board to the Company’s stockholders under applicable Laws. 
  

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 Section 6.11 Shareholder Approval; Proxy Statement. 
 (a) Concurrently with or promptly following the date of this Agreement, the Company shall prepare and file with the SEC a preliminary proxy
statement on Schedule 14A for use in connection with a special meeting of stockholders of the Company held to obtain the Shareholder Approval. The Company shall use its reasonable best efforts to respond promptly to any comments of the SEC or its
staff and cause the preliminary proxy statement to be cleared by the SEC or its staff, and to cause a definitive proxy statement to be mailed to the Company’s stockholders as promptly as practicable after responding to all such comments to the
satisfaction of the SEC or its staff. Both the preliminary proxy statement and the definitive proxy statement shall include a statement to the effect that the Board recommends that the Company’s stockholders vote in favor of the issuance and
sale of the Shares at the Stockholders Meeting. The Company shall notify the Investors promptly of the receipt of any comments from the SEC or its staff and of any request by the SEC or its staff for amendments or supplements to the proxy statement
or for additional information and will supply the Investors with copies of all correspondence between the Company or any of its representatives, on the one hand, and the SEC or its staff, on the other hand, with respect to the proxy statement. If at
any time prior to the special meeting of stockholders there shall occur any event that, in the good faith judgment of the Company, after consulting with outside counsel, should be set forth in an amendment or supplement to the proxy statement, the
Company shall promptly prepare and mail to its stockholders such an amendment or supplement, in each case to the extent required by applicable Law in the good faith judgment of the Company, after consulting with outside counsel. The Investors shall
cooperate with the Company in the preparation of the proxy statement and any amendment or supplement thereto. Prior to filing or mailing the proxy statement or making any other required filing with the SEC (including any amendment or supplement
thereto) or responding to any comments of the SEC or its staff with respect thereto, the Company shall provide the Investors and their representatives with a reasonable opportunity to review and comment on such document or response. Any notification
or communication by the Company pursuant to this Section 6.11 may be made by e-mail notwithstanding the provisions of Section 8.3 below. The Company shall cause the proxy statement (including any amendment or supplement
thereto) to comply as to form and substance in all materials respects with the applicable requirements of the Exchange Act, the Securities Act and the rules and regulations of Nasdaq, and as of its date, the proxy statement (and any amendment
thereto) shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. 
 (b) The Company shall, as soon as practicable after the proxy statement is cleared by the SEC or its staff for mailing to the Company’s
stockholders (or the ten (10) calendar day period set forth in Rule 14a-6(a) of the Exchange Act has expired without the SEC informing the Company that it intends to review the proxy statement), take all action necessary to cause the definitive
proxy statement (including any amendment or supplement thereto) to be mailed to its stockholders and to duly call, give notice of, convene and hold a special meeting of stockholders (the “Stockholders Meeting”) as soon as
practicable following the mailing of the definitive proxy statement (and in any event within 120 days of the date of this Agreement) for the purpose of obtaining the Shareholder Approval. The Company shall use its reasonable best efforts to ensure
that the Stockholders Meeting is called, noticed, convened, held and conducted, and all proxies solicited by it in connection with the Stockholders Meeting are solicited, in compliance with the DGCL, the Company’s Amended and Restated
Certificate of Incorporation, the Company’s Restated By-Laws, the rules of Nasdaq and all other applicable Laws. 
 Section 6.12 Rights Offering. 
 (a) The Company, as promptly as practicable after the proxy statement is
cleared by the SEC or its staff for mailing to the Company’s stockholders in connection with the Stockholders Meeting (or the ten (10) calendar day period set forth in Rule 14a-6(a) of the Exchange Act has expired

  

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without the SEC informing the Company that it intends to review the proxy statement), shall (i) publicly announce the terms of the Rights Offering, including the record date for the Rights
Offering (the “Record Date”) in accordance with the rules of Nasdaq and, when required by Nasdaq, the proposed subscription price for the Rights Offering; and (ii) prepare and file with the SEC, a prospectus supplement
(including each amendment thereto, the “Prospectus Supplement”) to its existing registration statement on Form S-3 (File No. 333-160231) (including each amendment and supplement thereto, including the Prospectus Supplement, the
“Registration Statement”), which shall register under the Securities Act (x) the issuance of subscription rights to purchase shares of Common Stock in the Rights Offering (the “Subscription Rights”), and (y) the
issuance of Common Stock upon the exercise of such subscription rights. The Company shall not permit any other securities to be included in the Prospectus Supplement. The Prospectus Supplement (and any amendments thereto) and any amendments to the
Registration Statement proposed to be filed with the SEC after the date hereof shall be provided to the Investors and its counsel prior to their filing with the SEC, and the Investors and their counsel shall be given a reasonable opportunity to
review and comment thereon. The Company shall cause the Prospectus Supplement (and any amendment thereto) and any amendment to the Registration Statement to comply as to form and substance in all materials respects with the applicable requirements
of the Exchange Act, the Securities Act and the rules and regulations of Nasdaq, and as of its date, neither the Prospectus Supplement (and any amendment thereto) nor any amendment to the Registration Statement shall include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the case of the Prospectus Supplement and any amendment thereto, in the light of the circumstances under which they were
made, not misleading. 
 (b) The Investors shall provide to the Company such information as the Company may reasonably require
in connection with the preparation and filing of the Prospectus Supplement. At the time such information is provided and at the time the Prospectus Supplement is filed, no such information provided by the Investors specifically for inclusion in the
Prospectus Supplement shall include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not
misleading. 
 (c) As promptly as practicable following the filing of the Prospectus Supplement, the Company shall distribute
copies of the Prospectus Supplement to the holders of record of Common Stock as of the Record Date, and thereafter promptly commence the Rights Offering on the following terms: (i) the Company shall distribute transferable Subscription Rights
to each holder of record of Common Stock as of the Record Date; (ii) each Subscription Right shall entitle the holder thereof to purchase, at the election of such holder, one (1) share of Common Stock at a subscription price to be
determined; provided, that no fractional shares of Common Stock shall be issued and the subscription price multiplied by the aggregate number of shares of Common Stock offered shall be at least $35.0 million; (iii) the offering shall
remain open for at least fourteen (14) days (the “Subscription Period”); and (iv) each holder who fully exercises such holder’s subscription privilege shall be entitled to subscribe for additional shares of Common
Stock that were not subscribed for in the Rights Offering; provided, that if insufficient shares of Common Stock are available to satisfy all oversubscription requests, such requests shall be honored on a pro rata basis based on the number of
shares initially subscribed for by each stockholder. The Company shall not amend any of the terms described in clauses (i) through (iv) above without the prior written consent of the Investors. Subject to the terms and conditions above,
the Company shall effect a closing of the Rights Offering as promptly as practicable following the end of the Subscription Period. 
 (d) The Company shall use its reasonable best efforts to complete the Rights Offering, but shall not be obligated to close the Rights Offering if the Shareholder Approval has not been obtained or any other conditions to this Agreement are
not satisfied. The Company shall pay all of its expenses associated with the Registration Statement, the Prospectus Supplement, the Rights Offering and the other

  

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transactions contemplated hereby, including filing and printing fees, the fees and expenses of any dealer manager or subscription and information agents, the fees and expenses of its counsel,
accounting fees and expenses and costs associated with listing of the Subscription Rights and the Common Stock and clearing the Subscription Rights and the Common Stock offered for sale under applicable state securities Laws. 
 Section 6.13 Preemptive Rights. 
 (a) For so long as the Investors continue to Beneficially Own at least five percent (5%) of the Total Voting Power of the Company, the Investors shall have the right to exercise the preemptive rights
set forth in this Section 6.13. If the Company, at any time following the Closing, intends to issue shares of Capital Stock (“New Securities”) to any Person (other than (i) pursuant to the granting or exercise of
stock options or other equity-based awards pursuant to the Company’s Stock Plans or other incentive plans approved by the Board in the ordinary course of business, (ii) issuances made as consideration in an acquisition by the Company of
another business entity, (iii) issuances upon conversion of, or as a dividend on, any convertible or exchangeable securities of the Company issued either (A) pursuant to the transactions contemplated hereby or (B) prior to the date
hereof and (iv) issuances as part of a bona fide public offering pursuant to a registration statement under the Securities Act underwritten on a firm commitment basis), the Investors shall be afforded the opportunity to acquire from the Company
a portion of such New Securities (the “Investor New Securities”) at the same price and on the same terms as such New Securities are sold to others, up to the amount specified in the following sentence. The amount of Investor New
Securities that the Investors shall be entitled to purchase in the aggregate shall be determined by multiplying (x) the total number of such offered shares of New Securities by (y) a fraction, the numerator of which is the number of shares
of Common Stock held by the Investors (treating the Shares on an as-converted basis) as of such date, and the denominator of which is the number of shares of Common Stock then outstanding on a fully-diluted basis as of such date. 
 (b) In the event the Company proposes to offer New Securities, it shall deliver written notice thereof to the Investors, which offer notice
shall also describe the price, anticipated amount of New Securities to be sold, the anticipated timing of such sale and the other material terms upon which the Company proposes to offer the New Securities no later than thirty (30) days prior to
the issuance of the New Securities. Each Investor shall have fifteen (15) days from the date of receipt of such notice to notify the Company in writing that it intends to exercise such preemptive rights and as to the amount of Investor New
Securities such Investor desires to purchase, up to the maximum amount such Investor is entitled to purchase calculated pursuant to Section 6.13(a) above (such notice, the “Exercise Notice”). An Exercise Notice shall
constitute a binding agreement of such Investor to purchase the amount of Investor New Securities so specified at the price and other terms set forth in the Company’s offer notice. The failure of an Investor to respond within fifteen
(15) days shall be deemed a waiver of such Investor’s rights under this Section 6.13 only with respect to the offering described in the applicable offer notice. Notwithstanding anything set forth in this
Section 6.13 to the contrary, as a matter of convenience, the Company may issue, offer and sell any shares of its Capital Stock, or any securities containing options or rights to acquire any shares of its Capital Stock, to any Person at
any time without regard for the time periods set forth in this Section 6.13(b) if, within fifteen (15) days following the completion of such issuance or sale, the Company delivers a written notice to the Investors, pursuant to which
the Company shall offer to issue and sell to the Investors, on the same economic terms upon which the previous issuance and sale was consummated (the “Prior Sale”), a number of shares of the securities sold in the Prior Sale up to
the amount specified in the following sentence. The amount of such securities that the Investors shall be entitled to purchase in the aggregate shall be determined by subtracting the number of securities sold in the Prior Sale from the product of
(x) the total number of such securities sold in the Prior Sale multiplied by (y) a fraction, the numerator of which is the number of shares of Common Stock outstanding on a fully-diluted basis as of the date of and immediately prior to the
Prior Sale, and the denominator of which is the number of shares of Common Stock held by all Persons other than the

  

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Investors (treating the Shares on an as-converted basis) as of the date of and immediately prior to the Prior Sale. The Investors will then have fifteen (15) days from the receipt of this
written notice of the Prior Sale to provide the Company written notice that the Investors intend to purchase up to the number of such shares of offered securities set forth above. Notwithstanding anything contained herein to the contrary, until the
earlier of such time as the time the Investors have to notify the Company in writing that they intend to exercise their right to purchase has lapsed or the Investors have waived in writing their right to purchase the number of such shares of offered
securities set forth above, a decrease in the percentage of the Total Voting Power of the Company Beneficially Owned by the Investors below five percent (5%) as a result of the previous issuance and sale shall have no effect on any rights of
the Investors under this Agreement based on maintaining such Beneficial Ownership percentage. 
 (c) If an Investor exercises
its preemptive rights provided in this Section 6.13, the closing of the purchase of the Investor New Securities with respect to which such right has been exercised shall take place simultaneously with the closing of the sale of the New
Securities to the other purchasers thereof (or, if such purchasers close on different dates, simultaneously with the earliest such closing date); provided, that the closing may be extended for a maximum of ninety (90) days in order to
comply with applicable Laws (including receipt of any applicable regulatory or stockholder approvals). The Company and each of the Investors agrees to use its commercially reasonable efforts to secure any regulatory or stockholder approvals or other
consents, and to comply with any Law necessary in connection with the offer, sale and purchase of such New Securities. 
 (d) In
the event an Investor fails to exercise its preemptive rights as provided in this Section 6.13 within said fifteen (15) day period or, if so exercised, an Investor is unable to consummate such purchase within the time period
specified in Section 6.13(c) above because of the failure to obtain any required regulatory or stockholder consent or approval, the Company shall thereafter be entitled, during the period of sixty (60) days following the conclusion
of the applicable period, to enter into an agreement (pursuant to which the sale of the New Securities covered thereby shall be consummated, if at all, within thirty (30) days from the date of said agreement) to sell the New Securities, at a
price and upon terms no more favorable to the purchasers of the New Securities than were specified in the Company’s original offer notice to the Investors. Notwithstanding the foregoing, if such sale of New Securities is subject to the receipt
of any regulatory or stockholder approval or consent or the expiration of any waiting period, the time period during which such sale may be consummated shall be extended until the expiration of five (5) business days after all such approvals or
consents have been obtained or waiting periods expired, but in no event shall such time period exceed ninety (90) days from the date of the applicable agreement with respect to such sale. In the event the Company has not sold the New Securities
or entered into an agreement to sell the New Securities within said sixty (60)-day period (or sold and issued New Securities in accordance with the foregoing within thirty (30) days from the date of said agreement (as such period may be
extended in the manner described above for a period not to exceed ninety (90) days from the date of said agreement)), the Company shall not thereafter offer, issue or sell such New Securities without first offering such securities once again in
the manner provided in Section 6.13(a) and Section 6.13(b) above. 
 Section 6.14 Negative
Covenants Prior to Closing. Except as provided herein, from the date of this Agreement through the Closing (the “Pre-Closing Period”), the Company shall not, and shall cause each of its Subsidiaries not to, take any actions
outside of the ordinary course of business, without the prior consent of the Investors. Without limiting the generality of the foregoing, during the Pre-Closing Period, the Company shall not, and shall cause each of its Subsidiaries not to:

 (a) declare, or make payment in respect of, any dividend or other distribution upon any shares of Capital Stock of the
Company, other than in connection with the Rights Offering; 
  

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 (b) redeem, repurchase or acquire any Capital Stock of the Company or any of its
Subsidiaries, except for obligations to repurchase, redeem or otherwise acquire shares of Capital Stock for nominal consideration under agreements with directors, officers or employees in effect on the date hereof; 
 (c) amend the Company’s Amended and Restated Certificate of Incorporation or Restated By-Laws (other than the filing of the Certificate
of Designations with the Secretary of State of the State of Delaware in accordance with this Agreement); 
 (d) except in
connection with the Rights Offering or the exercise of options to purchase shares of Common Stock presently outstanding under the Stock Plans, authorize, issue or reclassify any Capital Stock, or debt securities convertible into Capital Stock, of
the Company (other than the authorization and issuance of the Shares, and the authorization of the shares of Common Stock underlying the Shares, in accordance with this Agreement); or 
 (e) agree or commit to do any of the foregoing. 
 Section 6.15 Reservation of Common Stock; Issuance of Shares of Common Stock. For as long as any Shares remain outstanding, the Company shall at all times reserve and keep available out of its
authorized but unissued Common Stock or shares of Common Stock held in treasury by the Company, for the purpose of effecting the conversion of the Shares, the full number of shares of Common Stock then issuable upon the conversion of all Shares
(after giving effect to any anti-dilution adjustments that have theretofore been made) then outstanding. All shares of Common Stock delivered upon conversion or repurchase of the Shares shall be newly issued shares or shares held in treasury by the
Company, shall have been duly authorized and validly issued and shall be fully paid and nonassessable, and shall be free from preemptive rights and free of any Liens. 
 Section 6.16 Transfer Taxes. The Company shall pay any and all documentary, stamp or similar issue or transfer tax due on the issue of the Shares at Closing. 
 Section 6.17 Listing. Prior to the Closing, the Company shall file a Listing of Additional Shares notification form with Nasdaq
with respect to the Common Stock to be issued upon conversion of the Shares. 
 Section 6.18 Pre-Closing Access.
During the Pre-Closing Period, subject to applicable Law, the Company shall grant the Investors, upon reasonable advance notice and during the Company’s normal business hours, such access to its books, records, properties and such other
information as the Investors may reasonably request, excluding access to such items or information that is the subject of attorney client privilege. 
 Section 6.19 Further Assurances; Efforts. Upon the terms and subject to the conditions set forth in this Agreement, the parties hereto shall each use their commercially reasonable efforts to
promptly take, or to cause to be taken, all actions, and to do, or to cause to be done, and to assist and cooperate with the other parties in doing all things necessary, proper or advisable under applicable Law or otherwise to consummate and make
effective the transactions contemplated by this Agreement. The Investors and the Company will cooperate and consult with each other and use commercially reasonable efforts to prepare and file all necessary documentation, to effect all necessary
applications, notices, petitions, filings and other documents, and to obtain all necessary permits, consents, orders, approvals and authorizations of, or any exemption by, all third Persons required to consummate the transactions contemplated by
this Agreement. Without limiting the generality of the foregoing, the Company shall use all commercially reasonable efforts to (a) obtain all necessary permits and qualifications, if any, or secure an exemption therefrom, required by any New
York state securities regulatory authority prior to the offer and sale of the Shares, and (b) cause such permit, qualification or exemption to be effective as of the Closing. 
  

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 ARTICLE VII 
 TERMINATION 
 Section 7.1 Termination. This Agreement may be
terminated at any time prior to the occurrence of the Closing Date: 
 (a) by the mutual written consent of the Investors and
the Company; 
 (b) by either the Investors or the Company, upon written notice to the other, if the Closing shall not have
occurred on or before April 21, 2010; provided, however, that the right to terminate this Agreement under this Section 7.1(b) shall not be available to any party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the failure of the Closing to occur on or before such date; 
 (c) by either
the Investors or the Company, upon written notice to the other, if such other party is in breach or default of, or has failed to comply with, any representation, warranty, term, condition or covenant of this Agreement, and such breach, default or
failure to comply is not curable or, if curable, has not been cured within ten (10) days of such other party receiving written notice thereof; 
 (d) by either the Investors or the Company, upon written notice to the other, if a Material Adverse Effect has occurred with respect to such other party, and such Material Adverse Effect is not curable
or, if curable, has not been cured within ten (10) days of such other party receiving written notice thereof; 
 (e) by
either the Investors or the Company, upon written notice to the other, if any Governmental Entity in the United States shall have enacted, issued, promulgated, enforced or entered any judgment, injunction, writ, decree or order of any nature which
is then in effect and has the effect of making consummation of the transactions contemplated by this Agreement illegal or otherwise preventing or prohibiting consummation of such transactions and such judgment, injunction, writ, decree or order has
become final and nonappealable; or 
 (f) by the Investors, upon written notice to the Company, if the Company has not obtained
the Shareholder Approval within 120 days from the date of this Agreement. 
 Section 7.2 Effects of Termination. In
the event of the termination of this Agreement as provided in Section 7.1, this Agreement (other than this Section 7.2, Section 7.3 and Sections 8.2 through 8.12, which shall remain in full force and
effect) shall forthwith become wholly void and of no further force and effect; provided, that nothing herein shall relieve any party from liability for any intentional breach of this Agreement. 
 Section 7.3 Fees and Expenses Upon Termination. 
 (a) Promptly following termination of this Agreement by either party pursuant to Section 7.1, but in no event later than five (5) business days following such termination, the Company
shall reimburse the Investors for their reasonable and documented out-of-pocket fees and expenses incurred in connection with this Agreement on or before the termination of this Agreement; provided, that in no event shall the Company be
obligated to reimburse the Investors for any such fees or expenses in excess of $500,000 in the aggregate. 
  

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 (b) In the event the Company fails to obtain the Shareholder Approval within 120 days of the
date of this Agreement and the Agreement is subsequently terminated pursuant to Section 7.1(f) and (x) as of the date of the Stockholders Meeting, an Alternative Proposal has been publicly announced and not withdrawn and
(y) within six months of the date of termination of this Agreement the Company enters into an agreement to consummate such Alternative Proposal, then the Company shall pay to the Investors a fee in the amount of $1,000,000 at the time it
ultimately consummates such Alternative Proposal. 
 ARTICLE VIII 
 MISCELLANEOUS 
 Section 8.1 Survival. The
representations and warranties made by the Company in (a) Sections 3.2 (Authorization), 3.3 (Capitalization), 3.4 (Valid Issuance of Shares), 3.8(a) (Periodic Filings), and 3.8(b) (Financial Statements) of
this Agreement and (b) the certificate delivered by the Company to the Investors pursuant to Section 5.1(c) insofar as such certificate relates to the representations and warranties set forth in clause (a), shall survive the Closing
of this Agreement for a period of twelve (12) months. None of the other representations and warranties made in this Agreement shall survive the Closing or termination of this Agreement. 
 Section 8.2 No Personal Liability of Directors, Officers, Owners, Etc. No director, officer, employee, incorporator,
stockholder, managing member, member, general partner, limited partner, principal or other agent of either the Investors or the Company shall have any liability for any obligations of the Investors or the Company, as applicable, under this Agreement
or for any claim based on, in respect of, or by reason of, the respective obligations of the Investors or the Company, as applicable, under this Agreement. Each party hereby waives and releases all such liability. This waiver and release is a
material inducement to each party’s entry into this Agreement. 
 Section 8.3 Notices. All notices and other
communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given (a) on the date of delivery, if delivered personally or by facsimile, upon confirmation of receipt,
(b) on the first (1st) business day following the date of dispatch if delivered by a recognized next-day courier services or (c) on the third (3rd) business day following the date of mailing if delivered by registered or
certified mail, return receipt requested, postage prepaid, to the parties to this Agreement at the following address or to such other address either party to this Agreement shall specify by notice to the other party: 
 If to the Company: 
  

					
		 	Ruth’s Hospitality Group, Inc.
 500 International Parkway

 Heathrow, Florida 32746

		 	Attention:	 	Chief Financial Officer
		 	Facsimile:	 	(407) 833-9625

 With a copy to (which shall not constitute notice): 
  

					
		 	Kirkland & Ellis LLP
 300 North LaSalle
Street
 Chicago, Illinois 60654

		 	Facsimile:	 	(312) 862-2200
		 	Attention:	 	 James S. Rowe
 William R. Burke

  

 29 

 If to the Investors: 
  

					
		 	c/o Bruckmann, Rosser, Sherrill & Co., Inc.
 126 East
56th Street
 29th Floor
 New York, New York 10022

		 	Facsimile:	 	(212) 521-3799
		 	Attention:	 	Harold O. Rosser

 With a copy to (which shall not constitute notice): 
  

					
		 	Dechert LLP
 Cira Centre
 2929 Arch Street
 Philadelphia, Pennsylvania 19104

		 	Facsimile:	 	(215) 994-2222
		 	Attention:	 	Carmen J. Romano

 Section 8.4 Amendments and Waivers. Any provision of this Agreement may
be amended or waived if, but only if, such amendment or waiver is in writing and is duly executed and delivered by the Company and the Investors. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as
a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of
any rights or remedies provided by Law. 
 Section 8.5 Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. This Agreement shall not be assignable by operation of law or otherwise; provided, that the Investors shall be permitted to
assign this Agreement or any of their rights hereunder to any investment fund under the control of the Investors or any of their Affiliates; provided, that such assignee shall execute an agreement for the benefit of the Company in form and
substance reasonably satisfactory to the Company, pursuant to which such proposed assignee agrees to be bound by the terms and conditions of this Agreement. Without limiting the foregoing, none of the rights of the Investors hereunder shall be
assignable to, or enforceable by, any Person to whom the Investors may transfer Capital Stock of the Company (other than a transfer to a Permitted Transferee to the extent permitted in accordance with the terms of this Agreement). 
 Section 8.6 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New
York. 
 Section 8.7 Consent to Jurisdiction; Venue; Waiver of Jury Trial. 
 (a) Each of the parties hereto irrevocably submits to the exclusive jurisdiction of any court of the State of New York and the Federal
courts of the United States located in the State of New York for the purpose of any action arising out of or relating to this Agreement, and each of the parties hereto irrevocably agrees that all claims in respect to such action may be heard and
determined

  

 30 

 
exclusively in such court. Each of the parties hereto agrees that a final judgment in any action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by Law. 
 (b) Each of the parties hereto irrevocably consents to the service of any summons and complaint
and any other process in any action relating to the transactions contemplated hereby, on behalf of itself or its property, by the personal delivery of copies of such process to such party hereto. Nothing in this Section 8.7(b) shall
affect the right of any party hereto to serve legal process in any other manner permitted by Law. 
 (c) EACH PARTY HERETO
ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY HERETO WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, (iii) IT
MAKES SUCH WAIVER VOLUNTARILY, AND (iv) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.7(C). 
 Section 8.8 Entire Agreement. This Agreement, together with exhibits and schedules hereto, constitutes the entire agreement
between the parties with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings, both oral and written, between the parties and/or their affiliates with respect to the subject matter of this Agreement,
including that certain letter agreement dated October 22, 2009 addressed to the Company and signed by Bruckmann, Rosser, Sherrill & Co Management, L.P. and the Company. 
 Section 8.9 Effect of Headings and Table of Contents. The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof. 
 Section 8.10 Severability. If one or more
provisions of this Agreement are held to be unenforceable under applicable Law, such provision shall be deemed to be excluded from this Agreement and the balance of this Agreement shall be interpreted as if such provision were so excluded and shall
be enforced in accordance with its terms to the maximum extent permitted by Law. 
 Section 8.11 Counterparts. This
Agreement may be signed in any number of counterparts and signatures may be delivered by facsimile or in electronic format, each of which shall be an original, with the same effect as if the signatures were upon the same instrument. 
 Section 8.12 No Third-Party Beneficiaries. Nothing in this Agreement, expressed or implied, is intended to confer on any Person
(other than the parties hereto) any rights, remedies, obligations or liabilities under or by reason of this Agreement, and no Person that is not a party to this Agreement (including any partner, member, stockholder, director, officer, employee or
other beneficial owner of any party, in its own capacity as such or in bringing a derivative action on behalf of a party) shall have standing as third-party beneficiary with respect to this Agreement or the transactions contemplated by this
Agreement. 
  

 31 

 Section 8.13 Enforcement of Agreement. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any Federal court of the United States located in the State of New York (or, solely to the extent that no such Federal court has
jurisdiction over such suit, action or proceeding, in any New York State court in the State of New York), this being in addition to any other remedy to which they are entitled at law or in equity. Additionally, each party hereto irrevocably waives
any defenses based on adequacy of any other remedy, whether at law or in equity, that might be asserted as a bar to the remedy of specific performance of any of the terms or provisions hereof or injunctive relief in any action brought therefor.

 *    *    *    *    * 
  

 32 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by
their respective authorized officers as of the date first written above. 
  

			
	RUTH’S HOSPITALITY GROUP, INC.
		
	By:	 	 /s/ Michael P. O’Donnell

	Name:	 	 Michael P. O’Donnell

	Title:	 	 President and CEO

	
	 BRUCKMANN, ROSSER, SHERRILL & CO.
 III, L.P.

		
	By:	 	 /s/ Harold O. Rosser

	Name:	 	 Hal Rosser

	Title:	 	  

	
	BRS COINVESTOR III, L.P.
		
	By:	 	 /s/ Harold O. Rosser

	Name:	 	 Hal Rosser

	Title:	 	  

 [Signature Page to Securities Purchase Agreement] 

 EXHIBIT A 
 FORM OF CERTIFICATE OF DESIGNATIONS OF 
 THE SERIES
A 10% CONVERTIBLE PREFERRED STOCK 
 (Par Value $0.01) 
 OF 
 RUTH’S HOSPITALITY GROUP, INC.

  
  
 Pursuant to Section 151 of the 
 General Corporation Law
of the State of Delaware 
  
  
 Ruth’s Hospitality Group, Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (the
“Company”), in accordance with the provisions of Section 151 thereof, DOES HEREBY CERTIFY: 
 That pursuant to the
authority conferred upon the Board of Directors of the Company (the “Board”) in accordance with the Amended and Restated Certificate of Incorporation of the Company and the Restated Bylaws of the Company, the Board on
December 18, 2009 adopted the following resolution creating a series of Preferred Stock, par value $0.01 per share, of the Company designated as Series A 10% Convertible Preferred Stock: 
 RESOLVED, that pursuant to the authority vested in the Board in accordance with the Amended and Restated Certificate of Incorporation of the Company and out
of the Preferred Stock, par value $0.01 per share, authorized therein, the Board hereby authorizes, designates and creates a series of 25,000 shares of Preferred Stock, and states that the designation and amount thereof and the voting powers,
preferences and relative, participating, optional and other special rights of the shares of such series, and the qualifications, limitations or restrictions thereof be, and hereby are, as follows: 
 Section 1. Designation. 
 The
designation of the series of Preferred Stock created by this resolution shall be “Series A 10% Convertible Preferred Stock” (the “Series A Preferred Stock”). Each share of the Series A Preferred Stock shall be identical in
all respects to every other share of the Series A Preferred Stock. The Series A Preferred Stock shall be perpetual, subject to the provisions of Section 6. 
 Section 2. Number of Shares. 
 The authorized number of shares of Series A
Preferred Stock shall be 25,000. Such number of shares may be increased or decreased by resolution of the Board; provided, that no decrease shall reduce the number of shares of Series A Preferred Stock to a number less than the number of
shares then outstanding or may be required to be issued pursuant to Section 4. Shares of Series A Preferred Stock that are redeemed, purchased or otherwise acquired by the Company, or converted into Common Stock or another series of
Preferred Stock, shall revert to authorized but unissued shares of Preferred Stock. 

 Section 3. Definitions. As used herein with respect to the Series A Preferred Stock:

 (a) “Accumulated Dividends” shall mean with respect to any share of Series A Preferred Stock, as of any date,
the aggregate accumulated and unpaid dividends on such share for Dividend Periods ending on or prior to such date. 
 (b)
“Affiliate” of any Person shall mean any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such Person. For purposes of this definition, “control” when used
with respect to any Person has the meaning specified in Rule 12b-2 under the Exchange Act; and the terms “controlling” and “controlled” have meanings correlative to the foregoing. 
 (c) “Board” shall mean the Board of Directors of the Company. 
 (d) “Business Day” shall mean a day that is a Monday, Tuesday, Wednesday, Thursday or Friday and is not a day on which
banking institutions in New York, New York generally are authorized or obligated by law, regulation or executive order to close. 
 (e) “Bylaws” shall mean the Restated By-Laws of the Company in effect on the date hereof, as may be amended from time to time. 
 (f) “Capital Stock” shall mean any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (in each case however
designated) Common Stock, Preferred Stock or other equity interests issued by the Company, any Subsidiary of the Company or any other Person, as applicable. 
 (g) “Certificate of Designations” shall mean this Certificate of Designations relating to the Series A Preferred Stock, as it may be amended from time to time. 
 (h) “Certificate of Incorporation” shall mean the Amended and Restated Certificate of Incorporation of the Company.

 (i) “Change of Control” shall mean the occurrence of any of the following: 
 (1) any Person other than one or more Permitted Holders shall Beneficially Own, directly or indirectly, through a purchase, merger or other
acquisition transaction or series of transactions, shares of the Company’s Capital Stock entitling such Person to exercise 50% or more of the Total Voting Power of Voting Stock of the Company (for purposes of this clause (1), “Person”
shall include any syndicate or group that would be deemed to be a “person” under Section 13(d)(3) of the Exchange Act); 
 (2) the Company (i) merges or consolidates with or into any other Person or another Person merges with or into the Company or (ii) engages in any recapitalization, reclassification or other transaction in which all or
substantially all of the Common Stock is exchanged for or converted into cash, securities or other property, in each case; provided, that the stockholders of the Company

 
immediately prior to the consummation of such transaction (including a series of related transactions) shall own less than 50% of the Voting Stock (or have the right to appoint less than 50% of
the members of the Board) of the surviving person (or the parent of the surviving person where the surviving person is wholly owned by the parent person) immediately following the consummation of such transaction (including a series of related
transactions); or 
 (3) the Company conveys, sells, transfers or leases all or substantially all of the Company’s
consolidated assets to another Person in one or a series of transactions. 
 (j) “Close of Business” shall mean
5:00 p.m., New York City time, on any Business Day. 
 (k) “Closing Price” shall mean the price per share of
the final trade of the Common Stock, other Capital Stock or similar equity interest, as applicable, on the applicable Trading Day (or the last trade of the Capital Stock or similar equity interest preceding the applicable Trading Day if no trades of
such securities were made on the applicable Trading Day) on the principal national securities exchange or over-the-counter securities market on which the Common Stock, other Capital Stock or similar equity interest is listed or admitted to trading;
provided that if the Capital Stock is not so listed or traded, the Closing Price shall be equal to the fair market value, as reasonably determined in good faith by the Board. 
 (l) “Common Stock” shall mean the common stock, par value $0.01 per share, of the Company. 
 (m) “Company” shall mean Ruth’s Hospitality Group, Inc., a Delaware corporation. 
 (n) “Conversion Price” shall mean $1,000 divided by the Conversion Rate in effect on the date of determination. 

(o) “Conversion Rate” shall mean [—], subject to adjustment as set
forth in Section 8. 
 (p) “Conversion Shares” shall have the meaning ascribed to it in
Section 7(a). 
 (q) “Credit Agreement” means the First Amended and Restated Credit Facility dated
February 19, 2008, as amended, among the Company, Wells Fargo Bank, National Association, as administrative agent, and various lenders, as the same may be amended, restated, supplemented, modified, renewed, refunded, replaced or refinanced from
time to time in one or more agreements. 
 (r) “Current Market Price” shall mean the average Closing Price for
the ten (10) consecutive Business Days immediately preceding, but not including, the date as of which the Current Market Price is to be determined. 
 (s) “Current Market Value” shall mean the average consolidated closing bid price of the Common Stock for the ten (10) consecutive Business Days immediately preceding, but not
including, the date as of which the Current Market Value is to be determined. 
 (t) “Distributed Property”
shall have the meaning ascribed to it in Section 8(c). 
 (u) “Dividend Payment Date” shall mean
January 1, April 1, July 1 and October 1 of each year, commencing on April 1, 2010; provided, that if any such Dividend Payment Date would otherwise occur on a day that is not a Business Day, such Dividend
Payment Date shall instead be (and any dividend payable on Series A Preferred Stock on such Dividend Payment Date shall instead be payable on) the immediately succeeding Business Day. 

 (v) “Dividend Period” shall mean the period commencing on and including a
Dividend Payment Date (other than the initial Dividend Period, which shall commence on and include the Original Issue Date of the Series A Preferred Stock) and shall end on and include the calendar day immediately preceding the next Dividend Payment
Date. 
 (w) “Dividend Rate” shall mean 10% per annum. 
 (x) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder. 
 (y) “Exchange Property” shall have the meaning ascribed to it in Section 10(a).

 (z) “Excluded Issuance” shall mean, any issuances of (1) Capital Stock to any employee, officer or
director of the Company pursuant to a stock option, incentive compensation, stock purchase or similar plan outstanding as of the Original Issue Date or, subsequent to the Original Issue Date, approved by the Board or a duly authorized committee of
the Board, (2) Capital Stock by the Company pursuant to any merger, joint venture, partnership, consolidation, dissolution, liquidation, tender offer, recapitalization, reorganization, share exchange, business combination or similar transaction
or any other direct or indirect acquisition by the Company approved by the Board, whereby the Company’s Capital Stock comprises, in whole or in part, the consideration paid by the Company in such transaction, (3) securities pursuant to a
broadly-marketed underwritten public offering, to be offered and sold to the public at an issue price of not less than 95% of the Closing Price of the Common Stock immediately prior to the pricing of such offering, (4) Capital Stock by the
Company pursuant to options, warrants, notes or other rights to acquire Capital Stock of the Company outstanding on the Original Issue Date or issued pursuant to an Excluded Issuance under clauses (1) and (2) above, and (5) Common
Stock issued by the Company upon conversion of the Series A Preferred Stock. 
 (aa) “Expiration Date” shall
have the meaning ascribed to it in Section 8(d). 
 (bb) “Internal Reorganization Event” shall have
the meaning ascribed to it in Section 10(d). 
 (cc) “Junior Stock” shall mean the Common Stock and
any other class or series of Capital Stock of the Company that ranks junior to the Series A Preferred Stock (1) as to the payment of dividends or (2) as to the distribution of assets on any liquidation, dissolution or winding up of the
Company, or both. 
 (dd) “Liquidation Preference” shall mean, on any specific date, with respect to any share
of Series A Preferred Stock, (1) $1,000 plus (2) the Accumulated Dividends with respect to such share. 
 (ee)
“Notice of Change of Control” shall have the meaning ascribed to it in Section 6(c). 
 (ff)
“Original Issue Date” shall mean [—]. [NTD: Fill in with the Closing Date.] 
 (gg) “Parity Stock” shall mean any class or series of Capital Stock of the Company (other than the Series A Preferred Stock) that ranks equally with the Series A Preferred Stock both
(1) in the priority of payment of dividends and (2) in the distribution of assets upon any liquidation, dissolution or winding up of the Company (in each case, without regard to whether dividends accrue cumulatively or non-cumulatively).

 (hh) “Pending COC Event” shall mean the earlier of (1) the date on
which the Board (A) publicly recommends that the stockholders tender their shares to any Person who has publicly announced a tender or exchange offer which, if consummated, would result in a Change of Control, or (B) fails to recommend
that stockholders reject such an offer within 10 business days after the commencement of such tender or exchange offer or in the alternative fails to make a “stop-look-and-listen” communication to the stockholders of the Company within
such time period, (2) the execution by the Company of a definitive agreement which if consummated will result in a Change of Control, or (3) the public announcement by the Company that it recommends any transaction that, if consummated,
would result in a Change of Control. 
 (ii) “Permitted Holders” shall mean, collectively, (1) BRS
Coinvestor III, L.P., a Delaware limited partnership (“Co-Invest Fund”), (2) Bruckmann, Rosser, Sherrill & Co. III, L.P., a Delaware limited partnership (“BRS”), (3) any general partner of BRS or
BRS Co-Invest Fund and (4) any of their commonly controlled or commonly managed investment funds. 
 (jj)
“Person” shall mean any individual, company, partnership, limited liability company, joint venture, association, joint stock company, trust, unincorporated organization, government or agency or political subdivision thereof or any
other entity. 
 (kk) “Preferred Director” shall have the meaning ascribed to it in Section 9(b).

 (ll) “Preferred Stock” shall mean any and all series of preferred stock of the Company, including the Series
A Preferred Stock. 
 (mm) “Purchase Agreement” shall mean the Securities Purchase Agreement by and among the
Company, BRS and Co-Invest Fund, dated as of December 22, 2009. 
 (nn) “Record Date” shall mean, with
respect to any dividend, distribution or other transaction or event in which the holders of Common Stock (or other applicable security) have the right to receive any cash, securities or other property or in which the Common Stock (or other
applicable security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of stockholders entitled to receive such cash, securities or other property (whether such date is fixed
by the Board or by statute, contract, this Certificate of Designations or otherwise). 
 (oo) “Redemption
Amount” shall have the meaning ascribed to it in Section 6(a). 
 (pp) “Reorganization
Event” shall have the meaning ascribed to it in Section 10(a). 
 (qq) “Series A Parity Payment
Date” shall have the meaning ascribed to it in Section 4(c)(3). 
 (rr) “Series A Preferred
Stock” shall have the meaning ascribed to it in Section 1. 
 (ss) “Spin-Off” shall have
the meaning ascribed to it in Section 8(c). 
 (tt) “Subsidiary” shall mean any company,
partnership, limited liability company, joint venture, joint stock company, trust, unincorporated organization or other entity for which the Company owns, directly or indirectly, at least 50% of the Voting Stock of such entity. 
 (uu) “Total Voting Power” means the total number of votes that may be cast in the election of directors of the Company if
all Voting Stock treated as outstanding pursuant to this definition were present and voted at a meeting held for such purpose. The percentage of the Total Voting Power

 
Beneficially Owned by any Person is the percentage of the Total Voting Power that is represented by the total number of votes that may be cast in the election of directors of the Company by
Voting Stock Beneficially Owned by such Person. In calculating such percentage, the Voting Stock Beneficially Owned by any Person that are not outstanding but are subject to issuance upon exercise or exchange of rights of conversion or any options,
warrants or other rights Beneficially Owned by such Person shall be deemed to be outstanding for the purpose of computing the percentage of the Total Voting Power represented by Voting Stock Beneficially Owned by such Person, but shall not be deemed
to be outstanding for the purpose of computing the percentage of the Total Voting Power represented by Voting Stock Beneficially Owned by any other Person. Any Person shall be deemed to “Beneficially Own,” to have
“Beneficial Ownership” of, or to be “Beneficially Owning” any securities (which securities shall also be deemed “Beneficially Owned” by such Person) that such Person is deemed to “beneficially
own” within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act; provided, that any Person shall be deemed to Beneficially Own any securities that such Person has the right to acquire, whether or not such right is exercisable
immediately. 
 (vv) “Trading Day” shall mean any Business Day on which the Common Stock is traded, or able to
be traded, on the principal national securities exchange or over-the-counter securities market on which the Common Stock is listed or admitted to trading. 
 (ww) “Trigger Event” shall have the meaning ascribed to it in Section 8(c). 
 (xx) “Voting Stock” shall mean, with respect to the Company or any other Person, Capital Stock of the class or classes pursuant to which the holders thereof have the general voting power
under ordinary circumstances (determined without regard to any classification of directors) to elect one or more members of the board of directors or other governing body thereof (it being understood that the Series A Preferred Stock shall be
considered Voting Stock for all purposes under this Certificate of Designations). 
 Section 4. Dividends. 
 (a) Rate. Holders of the Series A Preferred Stock shall be entitled to receive, on each share of Series A Preferred Stock, when, as
and if declared by the Board, out of funds legally available therefor, dividends with respect to each Dividend Period (1) in an amount equal to the Dividend Rate on the then applicable Liquidation Preference and (2) in the event a cash
dividend or other distribution in cash has been declared on the Common Stock during such Dividend Period, an additional amount in cash equal to the product of (A) the quotient of (i) the Liquidation Preference in effect on the Record Date
for such dividend or other distribution divided by (ii) the Conversion Price in effect on the Record Date for such dividend or other distribution, multiplied by (B) the cash amount per share distributed or to be distributed in respect of
the Common Stock. Dividends payable at the Dividend Rate on the then applicable Liquidation Preference shall accrue daily and begin to accrue and be cumulative from the Original Issue Date, whether or not the Company has funds legally available for
such dividends or such dividends are declared. Dividends that are payable on the Series A Preferred Stock on any Dividend Payment Date shall be payable to holders of record of the Series A Preferred Stock as they appear on the stock register of the
Company on the record date for such dividend, which record date shall be the date that is 15 days prior to the applicable Dividend Payment Date; provided, that dividends on account of arrears for any past Dividend Period may be declared and
paid at any time, without reference to any regular Dividend Payment Date, to the holders of record of the Series A Preferred Stock on any date as may be fixed by the Board, which date is not more than 30 days prior to the payment of such dividends.
Notwithstanding anything to the contrary set forth above, unless and until such dividends are declared by the Board, there shall be no obligation to pay such dividends; provided, however, that such dividends shall compound on each
Dividend Payment Date if not otherwise paid in cash on such date and shall be added to the then applicable Liquidation Preference. Dividends payable at the Dividend Rate on the Series A Preferred Stock shall be computed on the basis of a 365-day
year and the actual number of days elapsed. 

 (b) Partial Payment of Dividends. All dividends paid with respect to shares of Series
A Preferred Stock pursuant to Section 4(a) above shall be paid pro rata to the holders of record of the Series A Preferred Stock entitled thereto. 
 (c) Priority. Without the vote or consent of the holders of at least a majority of the shares of Series A Preferred Stock then outstanding pursuant to Section 9(c) hereof, so long as
any shares of Series A Preferred Stock are outstanding: 
 (1) no dividends shall be declared by the Board or paid or funds set
apart for the payment of dividends or other distributions on any Junior Stock for any period; 
 (2) no payment in cash or
otherwise on account of the purchase, redemption, retirement or other acquisition of Junior Stock shall be made, and no sum shall be set aside for or applied by the Company to any Junior Stock (either pursuant to any applicable sinking fund
requirement or otherwise); provided that the foregoing limitations shall not apply to redemptions, purchases or other acquisitions of shares of Common Stock or other Junior Stock by the Company in accordance with the provisions of any
employee benefit plan or other equity agreement with the employees, officers and directors of the Company that has been approved by the Board, so long as such redemptions, purchases or other acquisitions do not exceed an aggregate of one percent
(1%) of the outstanding shares of Common Stock in any twelve month period; 
 (3) no dividends shall be declared by the
Board or paid or funds set apart for the payment of dividends or other distributions on any Parity Stock for any period unless (A) full Accumulated Dividends have been paid or set apart for payment on the Series A Preferred Stock for all
Dividend Periods terminating on or prior to the date of payment of such dividends or distributions on such Parity Stock (the “Series A Parity Payment Date”) and (B) an amount equal to accrued and unpaid dividends on the Series
A Preferred Stock from and including the immediately preceding Dividend Payment Date to but excluding the Series A Parity Payment Date have been paid or set apart for payment on the Series A Preferred Stock; and 
 (4) no payment in cash or otherwise on account of the purchase, redemption, retirement or other acquisition of Parity Stock shall be made,
and no sum shall be set aside for or applied by the Company to any Parity Stock (either pursuant to any applicable sinking fund requirement or otherwise). 
 Section 5. Liquidation Rights. 
 (a) Voluntary or Involuntary
Liquidation. In the event of any liquidation, dissolution or winding up of the affairs of the Company, whether voluntary or involuntary, holders of the Series A Preferred Stock shall be entitled to receive for each share of Series A Preferred
Stock, out of the assets of the Company or proceeds thereof (whether capital or surplus) available for distribution to stockholders of the Company, and after satisfaction of all liabilities and obligations to creditors of the Company, on par with
each share of Parity Stock but before any distribution of such assets or proceeds is made to or set aside for the holders of Junior Stock, an amount equal to the greater of (1) the sum of (A) the then applicable Liquidation Preference per
share of the Series A Preferred Stock plus (B) an amount per share equal to accrued but unpaid dividends not previously added to the Liquidation Preference from and including the immediately preceding Dividend Payment Date to but excluding the
date fixed for such liquidation, dissolution or winding up of the Company and (2) the proportionate amount of all cash,

 
securities and other property (such securities or other property having a value equal to its fair market value as reasonably determined in good faith by the Board) to be distributed in respect of
the Common Stock that such holder would have been entitled to had it converted such Series A Preferred Stock into Common Stock immediately prior to the date fixed for such liquidation, dissolution or winding up of the Company. To the extent such
amount is paid in full to all holders of Series A Preferred Stock, the holders of other Capital Stock of the Company shall be entitled to receive all remaining assets of the Company (or proceeds thereof) according to their respective rights and
preferences. 
 (b) Partial Payment. If in connection with any distribution described in Section 5(a) above
the assets of the Company or proceeds thereof are not sufficient to pay the then applicable Liquidation Preferences in full to all holders of Series A Preferred Stock and all holders of Parity Stock, the amounts paid to the holders of Series A
Preferred Stock and to the holders of all such other Parity Stock shall be paid pro rata in accordance with the respective aggregate Liquidation Preferences of the holders of Series A Preferred Stock and the holders of all such other Parity
Stock. 
 (c) Merger, Consolidation and Sale of Assets Not Liquidation. For purposes of this Section 5, the
merger or consolidation of the Company with any other corporation or other entity, including a merger or consolidation in which the holders of Series A Preferred Stock receive cash, securities or other property for their shares, or the sale, lease
or exchange (for cash, securities or other property) of all or substantially all of the assets of the Company, shall not constitute a liquidation, dissolution or winding up of the Company, but instead shall be subject to the provisions of
Section 10. 
 Section 6. Redemption. 
 (a) Redemption at the Option of the Company. The Series A Preferred Stock may be called for redemption, in whole or in part, at the
option of the Company, at any time on or after the fifth (5th) anniversary of the date on which the Company issues the first share of Series A Preferred Stock, upon giving of notice of redemption as provided below, at a redemption price per
share in cash equal to the sum of (1) the then applicable Liquidation Preference per share of the Series A Preferred Stock plus (2) an amount per share equal to accrued but unpaid dividends not previously added to the Liquidation
Preference from and including the immediately preceding Dividend Payment Date to but excluding the date of redemption (the “Redemption Amount”); provided, however, that the Company shall not be permitted to redeem less
than all of the outstanding shares of Series A Preferred Stock if such partial redemption would result in the Permitted Holders holding more than 0% and less than 5% of the Total Voting Power of the Company. 
 Notice of every redemption of outstanding shares of Series A Preferred Stock pursuant to this Section 6(a) shall be given by
first class mail, postage prepaid, addressed to the holders of record of the shares to be redeemed at their respective last addresses appearing on the books of the Company. Such mailing shall be made at least 30 days and not more than 60 days before
the date fixed for redemption. Any notice mailed as provided in this Section 6(a) shall be conclusively presumed to have been duly given, whether or not the holder receives such notice, but failure duly to give such notice by mail, or
any defect in such notice or in the mailing thereof, to any holder of shares of Series A Preferred Stock designated for redemption shall not affect the validity of the proceedings for the redemption of any other shares of Series A Preferred Stock.
Each notice of redemption given to a holder shall state: (1) the redemption date; (2) the number of shares of Series A Preferred Stock to be redeemed and, if less than all the shares held by such holder are to be redeemed, the number of
such shares to be redeemed from such holder; (3) the Redemption Amount; and (4) the place or places where certificates for such shares are to be surrendered for payment of the redemption price. 

 (b) Redemption at the Option of the Holder. At any time on or after the seventh
(7th) anniversary of the date on which the Company issues the first share of Series A Preferred Stock, each holder of Series A Preferred Stock shall have the right to require the Company to repurchase all or any part of such holder’s
Series A Preferred Stock at a purchase price per share in cash equal to the Redemption Amount. 
 The right of redemption
provided in this Section 6(b) may be exercised by a holder of Series A Preferred Stock by (1) providing written notice to the Company stating the holder’s determination to redeem its shares of Series A Preferred Stock and the
address to which payment for such shares is to be sent and (2) tendering the certificate or certificates representing the shares to be redeemed. 
 (c) Redemption Upon a Change of Control. Within ten (10) days after a Pending COC Event and at least twenty (20) days prior to the Company effecting a Change of Control, the Company shall
notify each holder of Series A Preferred Stock in writing of the Pending COC Event or the Change of Control. Such notice (the “Notice of Change of Control”) shall set forth in reasonable detail all material terms and conditions of
the Pending COC Event or the Change of Control. Each holder of Series A Preferred Stock may elect (by delivery of written notice to the Company within ten (10) days of receipt of the Notice of Change of Control) to require the Company, as part
of the proposed Change of Control and contemporaneously with the consummation thereof, to repurchase all or any part of such holder’s Series A Preferred Stock at a purchase price per share in cash equal to the Redemption Amount; provided
that in any case, the Company shall not be required to purchase any shares of Series A Preferred Stock until the consummation of such Pending COC Event or Change of Control. 
 (d) Partial Redemption. In case of any redemption of part of the shares of Series A Preferred Stock at the time outstanding, the
shares to be redeemed shall be selected pro rata. If fewer than all the shares represented by any certificate are redeemed, a new certificate shall be issued representing the unredeemed shares without charge to the holder thereof. 

(e) Effectiveness of Redemption. If notice of redemption has been duly given and if on or before the redemption date specified in
the notice all funds necessary for the redemption have been deposited by the Company, in trust for the pro rata benefit of the holders of the shares called for redemption, with a bank or trust company doing business in the Borough of
Manhattan, The City of New York, and having a capital and surplus of at least $5.0 billion and selected by the Board, so as to be and continue to be available solely therefor, then, notwithstanding that any certificate for any share so called for
redemption has not been surrendered for cancellation, on and after the redemption date dividends shall cease to accrue on all shares so called for redemption, all shares so called for redemption shall no longer be deemed outstanding and all rights
with respect to such shares shall forthwith on such redemption date cease and terminate, except only the right of the holders thereof to receive the amount payable on such redemption from such bank or trust company, without interest (it being
understood that notwithstanding the foregoing, any share so called for redemption may be converted pursuant to Section 7 prior to the redemption date). Any funds unclaimed at the end of three (3) years from the redemption date
shall, to the extent permitted by law, be released to the Company, after which time the holders of the shares shall look only to the Company for payment of the Redemption Amount of such shares. 
 Section 7. Conversion. 
 (a) Permissive Conversion. Each share of Series A Preferred Stock may be converted on any date, from time to time, at the option of the holder thereof, into the number of shares of Common Stock equal to the quotient of (1) the
sum of (A) the then applicable Liquidation Preference plus (B) an amount per share equal to accrued but unpaid dividends not previously added to the Liquidation Preference on such share of Series A Preferred Stock from and including the
immediately preceding Dividend Payment Date to but excluding the conversion date divided by (2) the Conversion Price in effect at such time (such number of shares of Common Stock, the “Conversion Shares”). 

 The right of conversion attaching to any shares of Series A Preferred Stock may be exercised by the holders
thereof by delivering the shares to be converted to the office of the Company, accompanied by a duly signed and completed notice of conversion in form reasonably satisfactory to the Company. The conversion date shall be the date on which the shares
of Series A Preferred Stock and the duly signed and completed notice of conversion are received by the Company. The Person entitled to receive the Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or
holders of such Common Stock as of such conversion date, and such Person or Persons shall cease to be a record holder of the Series A Preferred Stock on that date. As promptly as practicable on or after the conversion date (and in any event no later
than three Trading Days thereafter), the Company shall issue the number of whole shares of Common Stock issuable upon conversion, with any fractional shares (after aggregating all Series A Preferred Stock being converted on such date) rounded down
to the nearest whole share. Such delivery shall be made, at the option of the applicable holder, in certificated form or by book-entry. Any such certificate or certificates shall be delivered by the Company to the appropriate holder on a book-entry
basis or by mailing certificates evidencing the shares to the holders at their respective addresses as set forth in the conversion notice. From and after the date of conversion, the shares of Series A Preferred Stock converted on such date will
no longer be deemed to be outstanding, and all rights of the holder thereof as a holder of Series A Preferred Stock (except the right to receive from the Company the Common Stock and any other property receivable upon conversion) shall cease
and terminate with respect to such shares. 
 (b) Automatic Conversion. If, at any time after the second anniversary of
the date on which the Company issues the first share of Series A Preferred Stock, the Closing Price equals or exceeds 225% of the then applicable Conversion Price for a period of 20 Trading Days over any consecutive 30 Trading Day period occurring
completely after the second anniversary of the date on which the Company issues the first share of Series A Preferred Stock, then upon the fifteenth (15th) day following receipt of written notice from the Company of automatic conversion sent in
accordance with Section 7(c) and Section 12 hereof, the Series A Preferred Stock shall automatically be converted into shares of Common Stock to the extent specified in the notice from the Company (i.e., in whole or in part,
at the option of the Company) without any action on the part of the holder, with each share of Series A Preferred Stock being converted into the then applicable number of Conversion Shares. 
 (c) Notice of Automatic Conversion. Notice of the automatic conversion of shares of Series A Preferred Stock pursuant to
Section 7(b) shall be given by first class mail, postage prepaid, addressed to the holders of record of the shares to be converted at their respective last addresses appearing on the books of the Company. Any notice mailed as provided in
this Section 7(c) shall be conclusively presumed to have been duly given, whether or not the holder receives such notice, but failure to duly give such notice by mail, or any defect in such notice or in the mailing thereof, to any holder
of shares of Series A Preferred Stock designated for conversion shall not affect the validity of the proceedings for the conversion of any other shares of Series A Preferred Stock. Each notice of conversion given to a holder shall state:
(1) the conversion date; (2) the number of shares of the Series A Preferred Stock to be converted and, if less than all the shares held by such holder are to be converted, the number of such holder’s shares to be converted;
(3) the Conversion Shares to be received by such holder; and (4) the place or places where certificates for such shares of Series A Preferred Stock are to be surrendered for conversion. 

 (d) Partial Conversion. In case of any conversion of part of the shares of Series A
Preferred Stock at the time outstanding, the shares to be converted shall be selected pro rata. If fewer than all the shares represented by any certificate are converted, a new certificate shall be issued representing the shares that were not
converted without charge to the holder thereof. 
 (e) Common Stock Reserved for Issuance. The Company shall at all times
reserve and keep available out of its authorized and unissued Common Stock, solely for issuance upon the conversion of the Series A Preferred Stock, such number of shares of Common Stock as shall from time to time be issuable upon the conversion of
all the shares of Series A Preferred Stock then outstanding. Any shares of Common Stock issued upon conversion of Series A Preferred Stock shall be (1) duly authorized, validly issued and fully paid and nonassessable, (2) shall rank
pari passu with the other shares of Common Stock outstanding from time to time and (3) shall be approved for listing on the principal national securities exchange or over-the-counter securities market on which the Common Stock is listed
or admitted to trading. 
 (f) Taxes. The Company shall pay any and all transfer taxes that may be payable in respect of
the issue or delivery of shares of Common Stock on conversion of Series A Preferred Stock. The Company shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares of
Common Stock in a name other than that in which the Series A Preferred Stock so converted were registered, and no such issue or delivery shall be made unless and until the Person requesting such issue has paid to the Company the amount of any such
tax, or has established to the satisfaction of the Company that such tax has been paid. 
 Section 8. Dilution Adjustments. 

 The Conversion Rate shall be adjusted from time to time (successively and for each event described) by the Company as follows: 
 (a) If the Company shall, at any time or from time to time while any of the Series A Preferred Stock is outstanding, issue shares of Common
Stock as a dividend or distribution on shares of Common Stock, to the extent the holders of the Series A Preferred Stock are not entitled to receive such dividend or distribution, or if the Company effects a share split or share combination in
respect of the Common Stock, then the Conversion Rate shall be adjusted based on the following formula: 
 

 
 Where 
  

					
	CR0	  	=	  	the Conversion Rate in effect immediately prior to the Close of Business on the Record Date for such dividend or distribution, or the Close of Business on the effective date of
such share split or share combination, as applicable;
			
	CR’	  	=	  	the new Conversion Rate in effect immediately after the Close of Business on the Record Date for such dividend or distribution, or the Close of Business on the effective date of
such share split or share combination, as applicable;

					
	OS0	  	=	  	the number of shares of Common Stock outstanding immediately prior to the Close of Business on the Record Date for such dividend or distribution, or the Close of Business on the
effective date of such share split or share combination, as applicable; and
			
	OS’	  	=	  	the number of shares of Common Stock outstanding immediately after such dividend or distribution, or the Close of Business on the effective date of such share split or share
combination, as applicable.

 (b) Except as otherwise provided for by Section 8(c) and except for
Excluded Issuances, if the Company shall, at any time or from time to time while any of the Series A Preferred Stock is outstanding, issue or distribute any options, rights or warrants entitling the holder to subscribe for or purchase shares of
Common Stock at a price per share less than the Closing Price of the Common Stock on the Trading Day immediately preceding the date of issuance or the Record Date of such distribution, to the extent the holders of the Series A Preferred Stock are
not entitled to subscribe for or purchase such shares of Common Stock, the Conversion Rate shall be adjusted based on the following formula: 
 

 
 Where 
  

					
	CR0	  	=	  	the Conversion Rate in effect immediately prior to the Close of Business on the date of such issuance or the Record Date for such distribution;
			
	CR’	  	=	  	the new Conversion Rate in effect immediately after the Close of Business on the date of such issuance or the Record Date for such distribution;
			
	OS0	  	=	  	the number of shares of Common Stock outstanding immediately prior to the Close of Business on the date of such issuance or the Record Date for such
distribution;
			
	X	  	=	  	the total number of shares of Common Stock issuable pursuant to such options, rights or warrants; and
			
	Y	  	=	  	the number of shares of Common Stock equal to the aggregate price payable to exercise such options, rights or warrants divided by the average Closing Price over the 10
consecutive Trading Day period ending on the Record Date.

 To the extent that shares of Common Stock are not delivered pursuant to any such options, rights or
warrants upon the expiration or termination of such options, rights or warrants, the Conversion Rate shall be readjusted to the Conversion Rate which would then be in effect had the adjustments made upon the issuance or distribution of such options,
rights or warrants been made on the basis of the delivery of only the number of shares of Common Stock actually delivered. 

 In determining the aggregate price payable to exercise such options, rights or warrants, there shall be
taken into account any amount payable on exercise thereof, with the value of such consideration, if other than cash, to be determined in good faith by the Board. 
 (c) If the Company, at any time or from time to time while any of the Series A Preferred Stock is outstanding, shall, by dividend or otherwise, distribute to all or substantially all holders of its Common
Stock shares of any class of Capital Stock of the Company (other than Common Stock as covered by Section 8(a)), evidences of its indebtedness, assets, property or rights or warrants to acquire Capital Stock or other securities, but
excluding (1) dividends, distributions or issuances as to which an adjustment under Section 8(a) or Section 8(b) shall apply, (2) dividends or distributions paid exclusively in cash (which shall be payable to the
holders of the Series A Preferred Stock to the extent set forth in Section 4(a)) and (3) Spin-Offs to which the provision set forth below in this Section 8(c) shall apply (any of such shares of Capital Stock,
indebtedness, assets, property or rights or warrants to acquire Capital Stock or other securities, hereinafter in this Section 8(c) called the “Distributed Property”), to the extent the holders of the Series A Preferred
Stock are not entitled to participate in any such distribution, then, in each such case the Conversion Rate shall be adjusted based on the following formula: 
 

 
 Where 
  

					
	CR0	  	=	  	the Conversion Rate in effect immediately prior to the Close of Business on the Record Date for such distribution;
			
	CR’	  	=	  	the new Conversion Rate in effect immediately after the Close of Business on the Record Date for such distribution;
			
	SP0	  	=	  	the Current Market Price of the Common Stock on the Record Date for such distribution; and
			
	FMV	  	=	  	the fair market value (as determined in good faith by the Board) of the portion of Distributed Property with respect to each outstanding share of Common Stock on the Record Date
for such distribution.

 Notwithstanding the foregoing, if the then fair market value (as so determined)
of the portion of the Distributed Property so distributed applicable to one share of Common Stock is equal to or greater than SP0 as set forth above, then in lieu of the foregoing adjustment, the Company shall distribute to each holder of Series A
Preferred Stock on the date such Distributed Property is distributed to holders of Common Stock, but without requiring such holder to convert its shares of Series A Preferred Stock, the amount of Distributed Property such holder would have received
per share of Series A Preferred Stock had such holder owned a number of shares of Common Stock equal to the Conversion Rate on the Record Date fixed for determination of stockholders entitled to receive such distribution. If the Board determines the
fair market value of any distribution for purposes of this Section 8(c) by reference to the actual or when issued trading market for any securities, it shall in doing so consider the prices in such market over the same period used in
computing the Current Market Price of the Common Stock for purposes of calculating SP0 in the formula in this Section 8(c). 

 With respect to an adjustment pursuant to this Section 8(c) where there has
been a payment of a dividend or other distribution on the Common Stock consisting of shares of Capital Stock of any class or series, or similar equity interest, of or relating to a Subsidiary or other business unit of the Company (a
“Spin-Off”), to the extent the holders of the Series A Preferred Stock are not entitled to participate in any such Spin-Off, the Conversion Rate in effect immediately before the Close of Business on the 10th Trading Day immediately following, and including, the effective date
of the Spin-Off shall be increased based on the following formula: 
 

 
 Where 
  

					
	CR0	  	=	  	the Conversion Rate in effect immediately prior to the Close of Business on the 10th Trading Day immediately following, and including, the effective date of the Spin-Off;
			
	CR’	  	=	  	the new Conversion Rate in effect from and after the Close of Business on the 10th Trading Day immediately following, and including, the effective date of the Spin-Off;
			
	FMV	  	=	  	the average of the Closing Prices of the Capital Stock or similar equity interest distributed to holders of Common Stock applicable to one share of Common Stock over the 10
consecutive Trading Day period immediately following, and including, the effective date of the Spin-Off; and
			
	MP0	  	=	  	the average Closing Price of the Common Stock over the 10 consecutive Trading Day period immediately following, and including, the effective date of the
Spin-Off.

 Such adjustment shall occur on the 10th Trading Day immediately following, and including, the effective date
of the Spin-Off. 
 For purposes of this Section 8(c), Section 8(a) and Section 8(b) hereof, any dividend or
distribution to which this Section 8(c) is applicable that also includes shares of Common Stock, or rights or warrants to subscribe for or purchase shares of Common Stock to which Section 8(a) or Section 8(b)
hereof applies (or both), shall be deemed instead to be (1) a dividend or distribution of the evidences of indebtedness, assets or shares of Capital Stock other than such shares of Common Stock or rights or warrants to which
Section 8(a) or Section 8(b) hereof applies (and any Conversion Rate adjustment required by this Section 8(c) with respect to such dividend or distribution shall then be made) immediately followed by (2) a
dividend or distribution of such shares of Common Stock or such options, rights or warrants to which Section 8(a) or Section 8(b) hereof applies (and any further Conversion Rate adjustment required by

 
Section 8(a) and Section 8(b) hereof with respect to such dividend or distribution shall then be made), except (A) “the Close of Business on the Record Date of
such dividend or distribution” shall be substituted for “such dividend or distribution, or the Close of Business on the effective date of such share split or share combination, as applicable,” “after the Close of Business on the
Record Date for such dividend or distribution, or the Close of Business on the effective date of such share split or share combination, as applicable” and “the Close of Business on the date of such issuance or the Record Date for such
distribution” within the meaning of Section 8(a) and Section 8(b) hereof and (B) for the avoidance of doubt any shares of Common Stock included in such dividend or distribution shall not be deemed “outstanding
immediately prior to the Close of Business on the Record Date or the Close of Business on the effective date” within the meaning of Section 8(a) hereof. 
 If the Company shall, at any time or from time to time while any of the Series A Preferred Stock is outstanding, distribute options, rights or warrants to all or substantially all holders of Common Stock
entitling the holders thereof to subscribe for, purchase or convert into shares of Capital Stock (either initially or under certain circumstances), which options, rights or warrants, until the occurrence of a specified event or events
(“Trigger Event”): (x) are deemed to be transferred with such shares of Common Stock; (y) are not exercisable; and (z) are also issued in respect of future issuances of Common Stock, then such options, rights or
warrants shall be deemed not to have been distributed for purposes of this Section 8(c) (and no adjustment to the Conversion Rate under this Section 8(c) shall be required), until the occurrence of the earliest Trigger Event
and a distribution or deemed distribution under the terms of such options, rights or warrants at which time an appropriate adjustment (if any is required) to the Conversion Rate shall be made in the same manner as provided for under this
Section 8(c). If any such options, rights or warrants are subject to events, upon the occurrence of which such options, rights or warrants become exercisable to purchase different securities, evidences of indebtedness or other assets,
then the date of the occurrence of any and each such event shall be deemed to be the date of distribution and Record Date with respect to new options, rights or warrants for purposes of this Section 8(c) (and a termination or expiration
of the existing rights or warrants without exercise by any of the holders thereof). In addition, in the event of any distribution (or deemed distribution) of options, rights or warrants (of the type described in the preceding sentence) with respect
thereto that was counted for purposes of calculating a distribution amount for which an adjustment to the Conversion Rate under this Section 8(c) was made, (1) in the case of any such options, rights or warrants that shall all have
been redeemed or repurchased without exercise by any holders thereof, the Conversion Rate shall be readjusted upon such final redemption or repurchase to give effect to such distribution or Trigger Event, as the case may be, as though it were a
distribution under this Section 8(c), equal to the per share redemption or repurchase price received by a holder or holders of Common Stock with respect to such options, rights or warrants (assuming such holder had retained such options,
rights or warrants), made to all holders of Common Stock as of the date of such redemption or repurchase, and (2) in the case of such options, rights or warrants that shall have expired or been terminated without exercise by any holders
thereof, the Conversion Rate shall be readjusted as if such options, rights or warrants had not been issued. 
 (d) If the
Company or any of its Subsidiaries makes a payment of cash or other consideration in respect of a tender offer or exchange offer for all or any portion of the Common Stock, where such cash and the value of any such other consideration included in
the payment per share of Common Stock

 
validly tendered or exchanged exceeds the Closing Price of the Common Stock on the Trading Day next succeeding the last date (the “Expiration Date”) on which tenders or exchanges
may be made pursuant to such tender or exchange offer (as it may be amended), the Conversion Rate shall be increased based on the following formula: 
 

 
 Where 
  

					
	CR0	  	=	  	the Conversion Rate in effect immediately prior to the Close of Business on the Expiration Date;
			
	CR’	  	=	  	the new Conversion Rate in effect immediately after the Close of Business on the Expiration Date;
			
	AC	  	=	  	the aggregate value of all cash and any other consideration (as determined in good faith by the Board) paid or payable for shares purchased in such tender or exchange
offer;
			
	OS0	  	=	  	the number of shares of Common Stock outstanding immediately prior to the date such tender or exchange offer expires;
			
	OS’	  	=	  	the number of shares of Common Stock outstanding immediately after the date such tender or exchange offer expires (after giving effect to such tender offer or exchange offer);
and
			
	SP’	  	=	  	the average Closing Price of the Common Stock over the ten consecutive Trading Days ending on the Trading Day succeeding the Expiration Date.

 If the Company or any Subsidiary is obligated to purchase shares of Common Stock
pursuant to any such tender or exchange offer, but the Company or such Subsidiary is permanently prevented by applicable law from effecting any such purchases or all or any portion of such purchases are rescinded, then the Conversion Rate shall
again be adjusted to be the Conversion Rate that would then be in effect if such tender or exchange offer had not been made or had only been made in respect of the purchases that were effected. 

 (e) If the Company, at any time or from time to time while any of the Series A Preferred
Stock is outstanding, shall issue shares of Common Stock for a consideration per share less than the Current Market Price of the Common Stock, or, if the Common Stock is listed on the Nasdaq Stock Market, less than the Current Market Value of the
Common Stock, on the date the Company fixes the offering price of such additional shares, the Conversion Rate shall be increased based on the following formula: 
 

 
 Where 
  

					
	CR0	  	=	  	the Conversion Rate in effect immediately prior to the issuance of such additional shares of Common Stock;
			
	CR’	  	=	  	the new Conversion Rate in effect immediately after the issuance of such additional shares of Common Stock;
			
	AC	  	=	  	the aggregate consideration paid or payable for such additional shares of Common Stock;
			
	OS0	  	=	  	the number of shares of Common Stock outstanding immediately prior to the issuance of such additional shares of Common Stock;
			
	OS’	  	=	  	the number of shares of Common Stock outstanding immediately after the issuance of such additional shares of Common Stock; and
			
	SP’	  	=	  	the Closing Price of the Common Stock on the date of issuance of such additional shares of Common Stock.

 The adjustment shall become effective immediately after such issuance. 
 This Section 8(e) does not apply to: (a) dividends, distributions or issuances as to which an adjustment under Sections
8(a), 8(b) or 8(c) shall apply, or any shares of Common Stock issued upon the exercise of rights, options, warrants or other securities so distributed; and (b) Excluded Issuances. 
 (f) Upon the occurrence of each adjustment of the Conversion Rate pursuant to this Section 8, the Company at its expense shall, as
promptly as reasonably practicable but in any event not later than thirty (30) days thereafter, compute such adjustment in accordance with the terms hereof and furnish or make available to each holder of Series A Preferred Stock a certificate
setting forth such adjustment (including the kind and amount of securities, cash or other property into which the Series A Preferred Stock is convertible) and showing in detail the facts upon which such adjustment is based. The Company shall, as
promptly as reasonably practicable after the written request at any time of any holder of Series A Preferred Stock (but in any event not later than thirty (30) days thereafter), furnish or cause to be furnished to such holder a certificate
setting forth the Conversion Rate then in effect or, if applicable, the amount of other securities, cash or property that then would be received upon the conversion of a share of Series A Preferred Stock. 
 Section 9. Voting Rights of the Series A Preferred Stock. 
 (a) General. The holders of shares of Series A Preferred Stock shall be entitled to vote with the holders of the Common Stock on all matters submitted to a vote of stockholders of the Company,
except as otherwise provided herein or by applicable law. Each holder of shares of Series A Preferred

 
Stock shall be entitled to the number of votes equal to the product (rounded down to the nearest number of whole shares) of [—]1 times the largest number of whole shares of Common Stock into which
all shares of Series A Preferred Stock held of record by such holder could then be converted pursuant to Section 7 at the record date for the determination of the stockholders entitled to vote on such matters or, if no such record
date is established, at the date such vote is taken or any written consent of stockholders is first executed. In any case in which the holders of shares of Series A Preferred Stock shall be entitled to vote as a separate series to the exclusion of
the holders of the Common Stock, each holder of shares of Series A Preferred Stock shall be entitled to one vote for each share of Series A Preferred Stock held at the Record Date for the determination of the stockholders entitled to vote on such
matters or, if no such Record Date is established, at the date such vote is taken or any written consent of shareholders is first executed. The holders of shares of Series A Preferred Stock shall be entitled to notice of any stockholders’
meeting in accordance with the Bylaws. 
 (b) Election of Directors. 
 (1) Effective as of the date on which the Company issues the first share of Series A Preferred Stock, the number of directors constituting
the Board shall be increased by one person, to seven (7) persons (such additional director, the “Preferred Director”). For so long as the Permitted Holders Beneficially Own shares of Series A Preferred Stock representing at
least 5% of the Total Voting Power of the Company, (A) the Permitted Holders, voting as a separate class to the exclusion of the holders of Common Stock, shall be entitled to elect the Preferred Director, provided that such Preferred Director
is a current employee (and remains a current employee) of BRS Management LP, and (B) the Company shall not, without the consent of the Permitted Holders, increase the size of the Board to more than eight (8) persons. 
 (2) Term. The Preferred Director shall serve until the next annual meeting of the stockholders of the Company and until his or her
successor is elected and qualifies in accordance with this Section 9(b) and the Bylaws, unless the Preferred Director is earlier removed in accordance with the Certificate of Incorporation or Bylaws, resigns, ceases to be an employee of
BRS Management LP or is otherwise unable to serve. In the event the Preferred Director is removed, resigns or is unable to serve as a member of the Board, the Permitted Holders, voting as a separate class to the exclusion of the holders of Common
Stock, shall have the right to fill such vacancy. The Preferred Director may only be elected to the Board by the Permitted Holders in accordance with this Section 9(b), and such director’s seat shall otherwise remain vacant.

 (3) Removal. At such time as the Permitted Holders Beneficially Own shares of Series A Preferred Stock representing
less than 5% of the Total Voting Power of the Company, the Permitted Holders shall, except as otherwise set forth in the Purchase Agreement, automatically and immediately, without any further action on the part of the stockholders or the Board, lose
the right to elect the Preferred Director. Subject to the right of the Permitted Holders to remove the Preferred Director, no loss of the right to elect the Preferred Director shall have the effect of shortening the term of the incumbent Preferred
Director. 
  
  

	1	 NTD: To arrive at the appropriate multiple if the actual conversion price as of the Original
Issue Date is below the closing bid price of the Common Stock immediately prior to the execution of the Purchase Agreement, divide (x) the actual conversion price as of the Original Issue Date by (y) the closing bid price of the Common
Stock immediately prior to the execution of the Purchase Agreement. Otherwise, the multiple is 1. 

 (4) Non-Limitation of Voting Rights. For the avoidance of doubt, the right of the
Series A Preferred Stock to vote for the election of the Preferred Director shall be in addition to the right of the holders of the Series A Preferred Stock to vote together with the holders of Common Stock for the election of the other members of
the Board. 
 (c) Class Voting Rights as to Particular Matters. So long as any shares of Series A Preferred Stock are
outstanding, the Company shall not, either directly or indirectly by amendment, merger, consolidation or otherwise, do any of the following without (in addition to any other vote or consent of stockholders required by law or by the Certificate of
Incorporation) the vote or consent of the holders of at least a majority of the shares of Series A Preferred Stock then outstanding, given in person or by proxy, either in writing without a meeting or by vote at any meeting called for the purpose:

 (1) amend the Certificate of Incorporation or Bylaws in a manner that would adversely affect the relative rights,
preferences, privileges or voting powers of the Series A Preferred Stock; 
 (2) amend, alter or change the relative rights,
preferences, privileges or voting powers of the Series A Preferred Stock; 
 (3) declare or pay any dividend or distribution on
or in respect of Common Stock, other Junior Stock or Parity Stock (other than a dividend payable solely in Junior Stock); 
 (4)
purchase, redeem or otherwise acquire for consideration, directly or indirectly, any Common Stock, other Junior Stock or Parity Stock or capital stock of any of the Company’s Subsidiaries (except as necessary to effect (A) a
reclassification of Junior Stock for or into other Junior Stock, (B) a reclassification of Parity Stock for or into other Parity Stock with the same or lesser aggregate liquidation preference, (C) a reclassification of Parity Stock into
Junior Stock, (D) the exchange or conversion of one share of Junior Stock for or into another share of Junior Stock, (E) the exchange or conversion of one share of Parity Stock for or into another share of Parity Stock with the same or
lesser per share liquidation amount, (F) the exchange or conversion of one share of Parity Stock into Junior Stock and (G) redemptions, purchases or other acquisitions of shares of Common Stock or other Junior Stock by the Company in
accordance with the provisions of any employee benefit plan or other equity agreement with the employees, officers and directors of the Company that has been approved by the Board, so long as such redemptions, purchases or other acquisitions do not
exceed an aggregate of one percent (1%) of the outstanding shares of Common Stock in any twelve month period); and 
 (5)
authorize, issue, or reclassify into, Parity Stock (including additional shares of the Series A Preferred Stock), Capital Stock that would rank senior to the Series A Preferred Stock or debt securities that are convertible into Capital Stock by
their terms. 
 (d) Except as set forth herein, in the Certificate of Incorporation or as otherwise required by law, holders of
shares of Series A Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action.

 Section 10. Reorganization Events. 
 (a) In the event of: 
 (1) any consolidation or merger of the Company with or into
another Person or of another Person with or into the Company; 

 (2) any sale, transfer, lease or conveyance to another Person of all or substantially all of
the assets of the Company in one or a series of transactions; or 
 (3) any statutory share exchange of the Company with another
Person (other than in connection with a consolidation or merger), 
 in each case in which holders of Common Stock would be entitled to receive
cash, securities or other property for their shares of Common Stock (any such event specified in this Section 10(a), a “Reorganization Event”), each share of Series A Preferred Stock outstanding immediately prior to such
Reorganization Event shall remain outstanding but shall thereafter (subject to prior redemption, including pursuant to Section 6(a), or conversion), without the consent of the holder thereof, become convertible into the cash, securities
and other property that the holder would have received in such Reorganization Event had such holder owned a number of shares of Common Stock equal to the Conversion Rate on the Record Date fixed for determination of stockholders entitled to receive
such cash, securities or other property (such cash, securities and other property having a value equal to its fair market value as reasonably determined in good faith by the Board and referenced to herein as the “Exchange
Property”); provided, however, that in the case of a Reorganization Event in the form of a consolidation or merger, the surviving corporation shall exchange in such transaction for each share of Series A Preferred Stock
outstanding immediately prior to such Reorganization Event, preferred shares of the surviving corporation with substantially the same terms and conditions as the Series A Preferred Stock, which terms are no less beneficial to the holders thereof,
except that such preferred shares shall, upon conversion, be converted into, in lieu of the Common Stock, the Exchange Property. Any consideration to be paid to or received by holders of Common Stock pursuant to any employment, consulting,
severance, non-competition or other similar arrangement approved by the Board or a duly authorized committee of the Board, shall not be considered to be “Exchange Property” for purposes of the foregoing provision, regardless of whether
such consideration is paid in connection with, or conditioned upon the completion of, the Reorganization Event. 
 (b) In the
event that holders of the shares of the Common Stock have the opportunity to elect the form of consideration to be received in the Reorganization Event, the “Exchange Property” that holders of the Series A Preferred Stock shall be entitled
to receive shall be determined by the holders of a majority of the outstanding shares of Series A Preferred Stock, who shall make such determination from among the choices made available to the holders of the Common Stock. 
 (c) The above provisions of this Section 10 shall similarly apply to successive Reorganization Events. 
 (d) Notwithstanding anything to the contrary in this Section 10, Section 10(a) shall not apply in the case of, and a
Reorganization Event shall not be deemed to be, a merger, consolidation, reorganization or statutory share exchange (1) among the Company and its direct and indirect wholly owned Subsidiaries to the extent such merger, consolidation,
reorganization or statutory share exchange does not change or effect the outstanding classes of Capital Stock of the Company or (2) between the Company and any Person for the sole purpose of changing the domicile of the Company (an
“Internal Reorganization Event”). Without limiting the rights of the holders of the Series A Preferred Stock set forth in Section 9(c)(2), the Company shall not effectuate an Internal Reorganization Event unless
(A) the Series A Preferred Stock shall be outstanding as a class of preferred stock of the surviving company having the same rights, terms, preferences, liquidation preference and accrued and unpaid dividends as the Series A Preferred Stock in
effect immediately prior to such Internal Reorganization Event, as adjusted for such Internal Reorganization Event pursuant to this Certificate of Designations after giving effect to any such Internal Reorganization Event and (B) no holder of
the Series A Preferred Stock recognizes taxable income as a result of such Internal Reorganization Event. The Company (or any

 
successor) shall, within twenty (20) days of the occurrence of any Internal Reorganization Event, provide written notice to the holders of the Series A Preferred Stock of the occurrence of
such event. Assuming compliance with Section 9(c)(2) hereof, failure to deliver such notice shall not affect the operation of this Section 10(d) or the validity of any Internal Reorganization Event. 
 Section 11. Record Holders. 
 To the fullest extent permitted by applicable law, the Company may deem and treat the record holder of any share of the Series A Preferred Stock as the true and lawful owner thereof for all purposes, and
the Company shall not be affected by any notice to the contrary. 
 Section 12. Notices. 
 (a) General. All notices or communications in respect of the Series A Preferred Stock shall be sufficiently given if given in writing
and delivered in person or by first class mail, postage prepaid, or if given in such other manner as may be permitted in this Certificate of Designations, in the Certificate of Incorporation or the Bylaws or by applicable law or regulation, and
shall be deemed received (1) three (3) Business Days after being sent by certified or registered mail, return receipt requested, postage prepaid. (2) one (1) Business Day after being deposited with a next-day courier or
(3) upon confirmation of receipt, if made by facsimile. Notwithstanding the foregoing, if the Series A Preferred Stock is issued in book-entry form through The Depository Trust Company or any similar facility, such notices may be given to the
holders of the Series A Preferred Stock in any manner permitted by such facility and such notice shall be deemed to be received by the holders on the date such notice is appropriately given to such facility. 
 (b) Notice of Certain Events. The Company shall to the extent not included in the Exchange Act reports of the Company, provide
reasonable written notice to each holder of the Series A Preferred Stock of any event that is reasonably likely to result in (1) a Reorganization Event, (2) an event the occurrence of which would result in an adjustment to the Conversion
Rate, (3) the voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company or (4) a Change of Control. 
 Section 13. Replacement Certificates. 
 The Company shall
replace any mutilated certificate at the holder’s expense upon surrender of that certificate to the Company. The Company shall replace certificates that become destroyed, stolen or lost at the holder’s expense upon delivery to the Company
of reasonably satisfactory evidence that the certificate has been destroyed, stolen or lost, together with any indemnity that may be required by the Company. 
 Section 14. Other Rights. 
 The shares of Series A Preferred
Stock shall not have any rights, preferences, privileges or voting powers or relative, participating, optional or other special rights, or qualifications, limitations or restrictions thereof, other than as set forth herein or in the Certificate of
Incorporation or as provided by applicable law and regulation. 

 Section 15. Descriptive Headings and Governing Law. 
 The descriptive headings of the several Sections and paragraphs of this Certificate of Designations are inserted for convenience only and do
not constitute a part of this Certificate of Designations. 
 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 

 IN WITNESS WHEREOF, Ruth’s Hospitality Group, Inc. has caused this Certificate of
Designations to be signed and duly authorized as of the date first above written. 
  

			
	RUTH’S HOSPITALITY GROUP, INC.
		
	By:	 	  

		 	Name:
		 	Title:

 EXHIBIT B 
 FORM OF VOTING AGREEMENT 

 EXHIBIT C 
 FORM OF REGISTRATION RIGHTS AGREEMENT 
 This REGISTRATION RIGHTS
AGREEMENT (this “Agreement”), dated as of [    ], 2009, is by and among Bruckmann, Rosser, Sherrill & Co. III, L.P., a Delaware limited partnership (the “Fund”), BRS Coinvestor III,
L.P., a Delaware limited partnership (the “Co-Invest Fund” and together with the Fund, the “Investors”), and Ruth’s Hospitality Group, Inc., a Delaware corporation (the “Company”). 

WHEREAS, the Investors have, pursuant to the terms of the Securities Purchase Agreement (as defined herein), agreed to purchase 25,000 shares of the
Company’s Series A 10% Convertible Preferred Stock, par value $0.01 per share (the “Preferred Stock”); 
 WHEREAS, the
Preferred Stock is convertible into common stock of the Company, par value $0.01 per share (the “Common Stock”); 
 WHEREAS, it
is a condition to the closing of the transactions contemplated by the Securities Purchase Agreement that the Company and the Investors enter into this Agreement in order to grant the Investors certain registration rights with respect to the Common
Stock issuable upon conversion of the Preferred Stock; and 
 WHEREAS, the Company and the Investors desire to define the registration rights of
the Investors on the terms and subject to the conditions set forth herein. 
 NOW, THEREFORE, for and in consideration of the mutual agreements
contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows: 
 Section 1. Definitions. As used in this Agreement, the following terms shall have the respective meanings set forth
below: 
 “Agreement” shall have the meaning set forth in the preamble to this Agreement. 
 “Business Day” shall mean any day except a Saturday, Sunday or other day on which commercial banks in New York City are
authorized or required by law to close. 
 “Common Stock” shall have the meaning set forth in the recitals to
this Agreement. 
 “Company” shall have the meaning set forth in the preamble to this Agreement. 
 “Demand Registration” shall have the meaning set forth in Section 3(a) hereof. 
 “Effectiveness Period” shall have the meaning set forth in Section 2(a) hereof. 

 “Exchange Act” shall mean the U.S. Securities Exchange Act of 1934, as
amended, and any successor statute thereto and the rules and regulations of the SEC promulgated thereunder. 
 “Holder” shall mean a holder of Registrable Securities and any transferee or assignee who receives Registrable Securities and agrees to become bound by the provisions of this Agreement in accordance with
Section 14(c). 
 “Holder Indemnified Party” shall have the meaning set forth in
Section 7(a) hereof. 
 “Indemnified Party” shall have the meaning set forth in
Section 7(c) hereof. 
 “Indemnifying Party” shall have the meaning set forth in
Section 7(c) hereof. 
 “Investors” shall have the meaning set forth in the preamble to this
Agreement. 
 “MDP” shall have the meaning set forth in Section 13 hereof. 
 “MDP Registration Agreement” shall have the meaning set forth in Section 13 hereof. 
 “Other Shareholders” shall have the meaning set forth in Section 3(a) hereof. 
 “Person” shall mean any natural person, corporation, limited partnership, general partnership, limited liability company,
joint stock company, joint venture, association, company, estate, trust, bank trust company, land trust, business trust, or other organization, whether or not a legal entity, custodian, trustee-executor, administrator, nominee or entity in a
representative capacity and any government or agency or political subdivision thereof. 
 “Piggyback
Registration” shall have the meaning set forth in Section 4(a) hereof. 
 “Preferred
Stock” shall have the meaning set forth in the recitals to this Agreement. 
 “Registrable Securities”
shall mean any Common Stock issuable or issued upon conversion of the Preferred Stock and any additional Common Stock that are issued or issuable upon the conversion or exercise of any warrant, right or other security that is issued by way of a
dividend, stock split, recapitalization or other distribution in respect of such Common Stock. As to any particular Registrable Securities, such securities shall cease to be Registrable Securities when (a) they are sold pursuant to an effective
Registration Statement under the Securities Act, (b) they are sold pursuant to Rule 144 (or any similar provision then in force under the Securities Act), (c) they shall have ceased to be outstanding or (d) they have been sold in a
private transaction in which the transferor’s rights under this Agreement are not assigned to the transferee of the securities. No Registrable Securities may be registered under more than one Registration Statement at any one time. 

 “Registration” shall mean a registration effected by preparing and filing a
registration statement in compliance with the Securities Act (and any post-effective amendments filed or required to be filed in connection therewith) and the declaration or ordering of effectiveness of such registration statement by the SEC.

 “Registration Default” shall have the meaning set forth in Section 8 hereof. 
 “Registration Expenses” shall mean all costs and expenses incurred by the Company in connection with its performance of or
compliance with its obligations hereunder, including, (a) registration and filing fees, (b) fees and expenses incurred in connection with the listing of the Common Stock issued upon conversion of any Preferred Stock, as applicable,
(c) processing, duplicating and printing expenses, (d) fees and disbursements of counsel for the Company, (e) fees and expenses, not to exceed $50,000 in the aggregate for all Registrations effected pursuant to this Agreement, of one
counsel for all the Holders (which counsel shall be chosen by the Investors), (f) blue sky fees and expenses (including reasonable fees and disbursements of counsel in connection with blue sky qualifications of the Registrable Securities) and
(g) the fees and expenses for independent certified public accountants retained by the Company incident to or required by any such Registration (including the expenses of any comfort letters or costs associated with the delivery by independent
certified public accountants of a comfort letter or comfort letters requested, but not the cost of any audit other than a year end audit), but excluding the compensation of regular employees of the Company, which shall be paid in any event by the
Company. 
 “Registration Statement” shall mean any registration statement of the Company under the Securities
Act which covers any of the Registrable Securities pursuant to the provisions of this Agreement, including the prospectus, amendments and supplements to such registration statement, including post-effective amendments, all exhibits and all material
incorporated by reference or deemed to be incorporated by reference in such registration statement. 
 “Requesting
Holders” shall have the meaning set forth in Section 3(a) hereof. 
 “Rule 144” shall mean
Rule 144 under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC. 
 “Rule 415” shall mean Rule 415 under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC. 
 “SEC” shall mean the Securities and Exchange Commission or any other federal agency then administering the Securities Act
or the Exchange Act. 
 “Securities Act” shall mean the U.S. Securities Act of 1933, as amended, and any
successor statute thereto and the rules and regulations of the SEC promulgated thereunder. 
 “Securities Purchase
Agreement” shall mean that certain Securities Purchase Agreement, dated as of December 22, 2009, among the Company and the Investors, as the same may be amended, modified or supplemented from time to time in accordance with its terms.

 “Selling Expenses” shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities, all stamp duty and transfer taxes, if any, and all fees and disbursements of counsel retained by any Holder (other than the reasonable fees and expenses, not to exceed $50,000 in the
aggregate for all Registrations effected pursuant to this Agreement, of one counsel for all the Holders, which fees and expenses are included in the definition of Registration Expenses). 
 “Shelf Registration Statement” shall have the meaning set forth in Section 2(a) hereof. 
 “Suspension Period” shall have the meaning set forth in Section 2(b) hereof. 
 Section 2. Shelf Registration. 
 (a) On or prior to the date that is nine (9) months from the date hereof, the Company shall prepare and file with the SEC a Registration Statement on Form S-3 (or any successor form thereto),
covering the resale of all Registrable Securities requested by the Holders to be included in such Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415 (the “Shelf Registration Statement”). The
Company shall use its commercially reasonable efforts to cause the Shelf Registration Statement to be declared effective under the Securities Act as promptly as practical following such filing (and in any event prior to the first
(1st) anniversary of the date hereof), and shall use its commercially reasonable efforts to keep the Shelf Registration Statement continuously effective under the Securities Act until there are no longer any Registrable Securities required to
be registered in accordance with Section 2(c) hereof (the “Effectiveness Period”). For the avoidance of doubt, despite any earlier effectiveness of a Shelf Registration Statement, the Holders will not be permitted to sell,
transfer or otherwise dispose of their Registrable Securities prior to the first (1st) anniversary of the date hereof, except as expressly permitted by the terms of the Securities Purchase Agreement. 
 (b) Notwithstanding anything in Section 2(a), the Company shall not be obligated to effect, or take any action to effect, or
maintain as continuously effective the Shelf Registration Statement if the Company shall furnish to the Holder(s) a certificate signed by the chief executive officer of the Company stating that in the good faith judgment of the board of directors of
the Company, as a result of a pending material corporate development, it would be seriously detrimental to the Company or its stockholders to file the Shelf Registration Statement or to maintain the effectiveness of the Shelf Registration Statement
or to permit the continued use thereof, in which case the Company’s obligation to use its commercially reasonable efforts to comply with Section 2(a) shall be deferred for a period (or several periods) not to exceed ninety
(90) days in the aggregate in any twelve (12) month period (a “Suspension Period”). In the event the Company exercises its rights under the preceding sentence, the Holders agree to suspend, immediately upon their receipt
of the notice referred to above, their use of the prospectus relating to such Registration Statement in connection with any sale or offer to sell Registrable Securities. The Company shall promptly notify the Holders when the Shelf Registration
Statement may once again be used or be filed and/or become effective. The Company shall not be permitted to deliver a notice of suspension, nor exercise its rights of suspension under this Section 2(b), more than twice during any twelve
(12) month period. 
 (c) The registration rights granted under this Section 2 shall automatically terminate
with respect to any Registrable Securities as of the date and time on which such securities are no longer “Registrable Securities” hereunder. 

 Section 3. Demand Registration. 
 (a) Requested Registration. If at any time on or after the first anniversary of the date hereof, the Company shall receive a written
request from the Holders of a majority of the then outstanding Registrable Securities (the “Requesting Holders”) that the Company effect a Registration with respect to all or a part of the Registrable Securities not included or
requested to be included on the Shelf Registration Statement (a “Demand Registration”), the Company will: 
 (i) within ten (10) Business Days give written notice of the proposed Demand Registration to all other Holders; and 
 (ii) as soon as practicable, use commercially reasonable efforts to effect such Demand Registration on Form S-3 (or any
successor form thereto) or another appropriate form for such purpose if the Company is not then eligible to use Form S-3 to permit or facilitate the sale and distribution of all or such portion of such Registrable Securities as are specified in such
request, together with all or such portion of the Registrable Securities of any other Holder joining in such request as are specified in a written request received by the Company within twenty (20) Business Days after written notice from the
Company is given under Section 3(a)(i) above; provided that the Company shall only be obligated to effect three (3) Demand Registrations pursuant to this Section 3 and the Company shall not be obligated to effect,
or take any action to effect: 
 (A) any such Demand Registration pursuant to this Section 3, if the
Registrable Securities requested by all Holders to be registered pursuant to any such request have an anticipated aggregate public offering price (after deduction of any Selling Expenses) of less than $500,000; and 
 (B) any such Demand Registration pursuant to this Section 3 of any Registrable Securities if such Registrable
Securities are then covered by another effective Registration Statement. 
 (b) The Company may only delay an offering pursuant
to this Section 3 if it would be entitled to delay such offering pursuant to, and for such time as is permitted by, Section 2(b) above. The Registration Statement filed pursuant to the request of the Requesting Holders
pursuant to Section 3(a) may, subject to the priority of the Holders to include their Registrable Securities prior to any other equity securities of the Company being registered, include other equity securities of the Company which are
held by Persons who, by virtue of agreements with the Company, are entitled to include their equity securities in any such Registration (“Other Shareholders”). If such Demand Registration is an underwritten public offering, the
Company will include in such registration: (A) first, all securities of the Requesting Holders exercising “demand” registration rights pursuant to Section 3(a); (B) second, up to the full amount of securities
requested to be included in such Demand Registration by such Holders having registration rights on a pari passu basis with the Requesting Holders exercising such “demand” registration rights, allocated pro rata among such Holders, on the
basis of the amount of securities requested to be included therein by each such Holder; (C) third, up to the full amount of equity securities proposed to be included in the Registration by the Company and (D) fourth, up to the full amount
of equity securities requested to be included in such Registration by any Other Shareholders having registration rights on a pari passu basis, allocated pro rata among such Other Shareholders, on the basis of the amount of securities requested to be
included therein by each such Other Shareholder, so that the total amount of securities to be included in such underwritten offering is the full amount that, in the view of the managing underwriter, can be sold without adversely affecting the
success of such underwritten offering. 

 (c) If the Requesting Holders intend that the Registrable Securities covered by the request
for a Demand Registration shall be distributed by means of an underwritten public offering, the Requesting Holders will so advise the Company as a part of such request, and the Company will include such information in the notice sent by the Company
to the other Holders pursuant to Section 3(a)(i) above with respect to such request. In such event, the lead underwriter to administer the offering will be chosen by the Requesting Holders, subject to the prior written consent of the
Company, such consent not to be unreasonably withheld, conditioned or delayed. 
 (d) No request for a Demand Registration will
count for purposes of the limitations set forth in this Section 3 if (i) the Requesting Holders determine in good faith to withdraw the proposed Demand Registration prior to the effectiveness of the Registration Statement relating
to such request due to marketing conditions or regulatory reasons relating to the Company (provided that the Requesting Holders shall then pay all of the Company’s reasonable out-of-pocket expenses incurred in connection with such Demand
Registration), (ii) the Registration Statement relating to such request is not declared effective within 180 days of the date such Registration Statement is first filed with the SEC (other than solely by reason of the Requesting Holders having
refused to proceed or provide any required information for inclusion therein) and the Requesting Holders withdraw such request prior to such Registration Statement being declared effective, (iii) prior to the sale of at least 90% of the
Registrable Securities included in the applicable Demand Registration relating to such request, such Demand Registration is adversely affected by any stop order, injunction or other order or requirement of the SEC or other governmental agency or
court for any reason and the Company fails to have such stop order, injunction or other order or requirement removed, withdrawn or resolved to the Requesting Holders’ reasonable satisfaction within thirty (30) days of the date of such
order, or (iv) more than 33.33% of the Registrable Securities requested by the Requesting Holders to be included in the Demand Registration are not so included pursuant to Section 3(b). 
 Section 4. Piggy-Back Registration. 
 (a) Inclusion in Registration. If at any time on or after the first anniversary of the date hereof, the Company (x) shall determine to register any of its securities either for its own account
or for the account of any Other Shareholders in any public offering, other than a Registration Statement on Form S-4 or Form S-8 (or any successor form thereto), or (y) shall determine to conduct an underwritten takedown from a previously filed
shelf Registration Statement (which such shelf Registration Statement permits secondary sales or could, upon the filing of a post-effective amendment thereto, be amended to permit such secondary sales) (in each case, a “Piggyback
Registration”), the Company will: 
 (i) at least ten (10) Business Days prior to filing the
Registration Statement or at least ten (10) Business Days prior to the proposed commencement of such underwritten takedown give to each of the Holders a written notice thereof; and 
 (ii) include in such Piggyback Registration, and in any underwriting involved therein, all or such portion of the Registrable
Securities specified in a written request or requests, made by the Holders within five (5) Business Days after receipt of the written notice from the Company described in Section 4(a)(i) above, except as set forth in
Section 4(b) below. 
 (b) Underwriting. If the Piggyback Registration of which the Company gives notice is
an underwritten public offering, the Company shall so advise each of the Holders as a part of the written notice given pursuant to Section 4(a)(i). In such event, the right of each of the Holders to Registration pursuant to this
Section 4 shall be conditioned upon such Holders’ participation in such

 
underwriting and the inclusion of such Holders’ Registrable Securities in the underwriting to the extent provided herein. The Holders whose shares are to be included in such Piggyback
Registration shall (together with the Company and the Other Shareholders distributing their securities through such underwriting) enter into an underwriting agreement in customary form with the underwriter or underwriters selected for underwriting
by the Company. Notwithstanding the foregoing, if the managing underwriter of such underwritten public offering advises that, in its view, the total amount of securities that the Company, the Holders and any Other Shareholders propose to include in
such offering is such as to adversely affect the success of such underwritten offering, then: 
 (i) if such
Piggyback Registration is a primary registration by the Company for its own account, the Company will include in such Piggyback Registration: (A) first, all securities to be offered by the Company; (B) second, up to the full amount of
securities requested to be included in such Piggyback Registration by the Holders and any Other Shareholders having registration rights on a pari passu basis, allocated pro rata among such holders, on the basis of the amount of securities requested
to be included therein by each such holder; and (C) third, up to the full amount of securities requested to be included in such Piggyback Registration by any Other Shareholders in accordance with the priorities, if any, then existing among the
Company and the Other Shareholders so that the total amount of securities to be included in such underwritten offering is the full amount that, in the view of such managing underwriter, can be sold without adversely affecting the success of such
underwritten offering; and 
 (ii) if such Piggyback Registration is an underwritten secondary registration for
the account of holders of securities of the Company, the Company will include in such registration: (A) first, all securities requested to be included in such Piggyback Registration by Persons exercising “demand” registration rights;
(B) second, up to the full amount of securities requested to be included in such Piggyback Registration by the Holders and any Other Shareholders having registration rights on a pari passu basis with the Persons exercising such
“demand” registration rights, allocated pro rata among such Holders and Other Shareholders, on the basis of the amount of securities requested to be included therein by each such Holder and Other Shareholder; (C) third, up to the full
amount of securities proposed to be included in the registration by the Company; and (D) fourth, up to the full amount of securities requested to be included in such Piggyback Registration by the Other Shareholders in accordance with the
priorities, if any, then existing among the Company and the Other Shareholders so that the total amount of securities to be included in such underwritten offering is the full amount that, in the view of such managing underwriter, can be sold without
adversely affecting the success of such underwritten offering. 
 (c) Right to Terminate Registration. The Company shall
have the right to terminate or withdraw any Piggyback Registration initiated by it under this Section 4 prior to the effectiveness of such Piggyback Registration or the pricing of any underwritten takedown whether or not any Holder has
elected to include Registrable Securities in such Piggyback Registration. If any Holder disapproves of the terms of any such underwriting, such Holder may elect to withdraw therefrom at any time prior to the effectiveness of the Registration
Statement filed with the SEC with respect to such Piggyback Registration or the pricing of any underwritten takedown by providing prompt written notice to the Company and the underwriter or the representative of the underwriters of such withdrawal.
The Registrable Securities or other Securities so withdrawn shall also be withdrawn from Registration. 
 Section 5. Registration Expenses. All Registration Expenses incurred in connection with any Registration, qualification or compliance pursuant to this Agreement, whether or not

 
any Registrable Securities are sold pursuant to a Registration Statement, shall be borne by the Company, and all Selling Expenses shall be borne by the Holders of the Registrable Securities so
registered pro rata on the basis of the number of their shares so registered, other than fees and expenses of counsel, which, to the extent not included in Registration Expenses, shall be borne by the Holder incurring such fees and expenses of
counsel (or if incurred by a Holder or Holders on behalf of one or more Holders, pro rata on the basis of the amounts of their shares so Registered). 
 Section 6. Registration Procedures. Whenever the Holders of Registrable Securities shall request that any Registrable Securities be registered pursuant to this Agreement, the Company
shall use its reasonable best efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended method of disposition thereof, and pursuant thereto the Company shall as expeditiously as possible:

 (a) permit one legal counsel to the Holders (which counsel shall be chosen by the Holders) with an opportunity to review and
comment upon each Registration Statement and any related prospectus included therein at least five (5) Business Days prior to their initial filing with the SEC and upon all amendments and supplements thereto such lesser period prior to their
filing with the SEC as shall be reasonable and appropriate under the circumstances, and the Company shall not file any documents to which such legal counsel to the Holders reasonably objects in writing (it being agreed that such writing may for this
purpose be in electronic format); provided that any fees and expenses of such counsel shall be borne by the parties as provided in Section 5; 
 (b) furnish to each Holder whose Registrable Securities are included in any Registration Statement, without charge, (i) promptly after the same is prepared and filed with the SEC, at least one copy
of such Registration Statement and any amendment(s) thereto, including financial statements and schedules, and if requested by such Holder, all documents incorporated therein by reference and all exhibits thereto, (ii) upon the effectiveness of
any Registration Statement, ten (10) copies of the prospectus included in such Registration Statement and all amendments and supplements thereto (or such other number of copies as such Holder may reasonably request) and (iii) such other
documents, including copies of any preliminary or final prospectus or prospectus supplement, as such Holder may reasonably request from time to time in order to facilitate the disposition of the Registrable Securities owned by such Holder. The
Company hereby consents to the use of each such prospectus and each amendment or supplement thereto by each of the Holders whose Registrable Securities are included in any Registration Statement in connection with the offering and sale of the
Registrable Securities covered by such prospectus and any amendment or supplement thereto; 
 (c) notify each Holder of
Registrable Securities covered by such Registration, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event as a result of which the prospectus included in such Registration
Statement, as then in effect, includes financial statements that are ineligible for inclusion therein or an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading, and, subject to Section 6(a), promptly prepare a supplement or amendment to such Registration Statement to correct such untrue statement or omission,
and deliver ten (10) copies of such supplement or amendment to each such Holder (or such other number of copies as such Holder may reasonably request). The Company shall also promptly notify each Holder of Registrable Securities covered by such
Registration in writing (i) when a prospectus or any prospectus supplement or post-effective amendment is proposed to be filed, and when a Registration Statement or any post-effective amendment has been declared effective (notification of such
effectiveness shall be delivered by facsimile

 
on the same day of such effectiveness and by overnight mail), (ii) of any request by the SEC for amendments or supplements to a Registration Statement or related prospectus or related
information, (iii) of the Company’s determination that a post-effective amendment to a Registration Statement would be appropriate, and (iv) when the SEC notifies the Company whether there will be a “review” of a
Registration Statement and whenever the SEC comments in writing on a Registration Statement (in which case the Company shall provide true and complete copies thereof and all written responses thereto); 
 (d) notify each Holder whose Registrable Securities are included in any Registration Statement of the issuance of any stop order or other
suspension of effectiveness of a Registration Statement, or the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction. If such an order or suspension is issued, the Company
shall procure the withdrawal of such order or suspension at the earliest possible moment and shall notify each Holder who holds Registrable Securities being sold of the issuance of such order and the resolution thereof or its receipt of actual
notice of the initiation or threat of any proceeding for such purpose; 
 (e) reasonably cooperate with the Holders who hold
Registrable Securities being offered to facilitate the timely preparation and delivery of certificates (not bearing any restrictive legend) representing the Registrable Securities to be offered pursuant to a Registration Statement and enable such
certificates to be in such denominations or amounts, as the case may be, as such Holders may reasonably request and registered in such names as such Holders may request. In connection therewith, if required by the Company’s transfer agent, the
Company shall, promptly after the effectiveness of a Registration Statement, cause an opinion of counsel as to the effectiveness of such Registration Statement to be delivered to and maintained with its transfer agent, together with any other
authorizations, certificates and directions required by the transfer agent which authorize and direct the transfer agent to issue such Registrable Securities without legend upon sale by the Holder of such shares of Registrable Securities under such
Registration Statement; 
 (f) make generally available to its security holders as soon as practicable an earnings statement
(in form complying with the provisions of Rule 158 under the Securities Act) covering a twelve-month period beginning no later than the first Business Day of the Company’s fiscal quarter next following the effective date of the Registration
Statement; provided that such requirement will be deemed to be satisfied if the Company timely files complete and accurate information on its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q under the Exchange Act; 
 (g) otherwise comply in all material respects with all applicable rules and regulations of the SEC that are applicable to the Company in
connection with any Registration Statement and the disposition of all Registrable Securities covered by such Registration Statement; 
 (h) in connection with any underwritten Registration or takedown therefrom, furnish, on the date that such Registrable Securities are delivered to the underwriter(s) for sale, (i) an opinion, dated as of such date, of the counsel
representing the Company for purposes of such Registration or takedown therefrom, in form and substance as is customarily given to underwriter(s) in an underwritten public offering and reasonably satisfactory to the underwriter(s), addressed to the
underwriter(s) and (ii) a letter, dated as of such date, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriter(s) in an
underwritten public offering and reasonably satisfactory to the underwriter(s), addressed to the underwriter(s); 
 (i) enter
into such customary agreements (including underwriting agreements and lock up agreements in customary form, and including provisions with respect to

 
indemnification and contribution in customary form) and take all such other customary actions as the Holders whose Registrable Securities are included in any Registration Statement or the
underwriters, if any, reasonably request in order to expedite or facilitate the disposition of the Registrable Securities (including making members of management and executives of the Company available to participate in “road show,”
similar sales events and other marketing activities); 
 (j) use commercially reasonable efforts to (i) prepare and file
with the SEC such amendments, including post-effective amendments, to each Registration Statement and the prospectus used in connection therewith as may be necessary to keep such Registration Statement continuously effective as to the applicable
Registrable Securities for the Effectiveness Period and to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by such Registration Statement until such time as all of such
Registrable Securities have been disposed of by the Holders whose Registrable Securities are included in such Registration Statement in accordance with the intended methods of disposition set forth in such Registration Statement; (ii) cause the
related prospectus to be amended or supplemented by any prospectus supplement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of the Registrable Securities covered by each Registration
Statement, and as so supplemented to be filed pursuant to Rule 424 under the Securities Act; and (iii) respond as promptly as reasonably possible to any comments received from the SEC with respect to each Registration Statement or any amendment
thereto; 
 (k) if requested by any Holder whose Registrable Securities are included in any Registration Statement, or the
underwriters, if any, promptly include in a prospectus supplement or amendment such information as such Holder or underwriters, if any, may reasonably request in order to permit the intended method of distribution of such Registrable Securities and
make all required filings of such prospectus supplement or such amendment as soon as practicable after the Company has received such request; 
 (l) prior to any public offering of Registrable Securities, use its commercially reasonable efforts to register or qualify or cooperate with the Holders whose Registrable Securities are included in any
Registration Statement in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Securities for offer and sale under the securities or Blue Sky laws of those jurisdictions within
the United States as any such Holder reasonably requests in writing and to keep each such registration or qualification (or exemption therefrom) effective during the term of this Agreement and to do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the Registrable Securities covered by a Registration Statement; provided, that the Company shall not be required to qualify generally to do business in any jurisdiction where it is
not then so qualified or subject the Company to any material tax in any such jurisdiction where it is not then so subject; 
 (m) list such Registrable Securities on any national securities exchange on which the Common Stock is then listed, if such Registrable Securities are not already so listed and if such listing is then permitted under the rules of such
exchange; and 
 (n) take all other reasonable actions necessary to expedite and facilitate disposition by the Holders whose
Registrable Securities are included in any Registration Statement pursuant to such Registration Statement. 
 Section 7. Indemnification. 
 (a) To the fullest extent permitted by law, the Company will
indemnify each of the Holders, each of its officers, directors, agents, partners, members, stockholders and employees of

 
each such Person, and each Person, if any, who controls each of the Holders within the meaning of the Securities Act or Exchange Act, (each, a “Holder Indemnified Party”), with
respect to each Registration which has been effected pursuant to this Agreement against all claims, losses, damages and liabilities (or actions in respect thereof), arising out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any Registration Statement filed with the SEC in connection with such Registration, including any preliminary prospectus or final prospectus contained therein, any amendments or supplements thereto or any “issuer free
writing prospectus” (as defined in Rule 433 under the Securities Act) related thereto, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Holder Indemnified Party for any legal fees and any other costs and expenses reasonably incurred in connection with investigating and defending any such claim, loss, damage, liability or action; provided,
that the Company will not be liable in any such case to the extent that any such claim, loss, damage, liability or expense arises out of or is based on any untrue statement or omission based solely upon written information regarding such Holder
Indemnified Party furnished to the Company by such Holder Indemnified Party expressly for use in such Registration Statement. 
 (b) To the fullest extent permitted by law, each of the Holders will, if Registrable Securities held by it are included in the securities as to which any Registration pursuant to this Agreement is being effected, indemnify the Company, each
of its directors and officers, each Person who controls the Company within the meaning of the Securities Act or the Exchange Act, against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in any Registration Statement filed in connection with such Registration, including any preliminary prospectus or final prospectus contained therein, any amendments or
supplements thereto or any “issuer free writing prospectus” related thereto, or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements by such Holder therein
not misleading, and will reimburse the Company, its directors and officers and Persons who control the company for any legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is actually made in such Registration Statement, including any preliminary or final
prospectus contained therein, any amendments or supplements thereto or any “issuer free writing prospectus” related thereto, in reliance upon and in conformity with written information regarding such Holder furnished to the Company by such
Holder expressly for use in such Registration Statement; provided, however, that the obligations of each of the Holders hereunder shall be limited to an amount equal to the gross proceeds after deduction of underwriting discounts and
commissions, but before deduction of any other expenses, received by such Holder for securities sold in such Registration as contemplated herein. 
 (c) Each party entitled to indemnification under this Section 7 (the “Indemnified Party”) shall give notice to the party required to provide indemnification (the
“Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation
resulting therefrom; provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or any litigation resulting therefrom, shall be approved by the Indemnified Party (whose approval shall not unreasonably be
withheld) and the Indemnified Party may participate in such defense at such party’s expense (unless (i) the Indemnified Party shall have reasonably concluded that there may be a conflict of interest between the Indemnifying Party and the
Indemnified Party in such action or (ii) the Indemnifying Party shall have failed promptly to assume the defense of any such action, in which case the reasonable fees and expenses of counsel shall be at the expense of the Indemnifying Party and
the Indemnifying Party shall not have the right to assume the defense thereof), and provided, further, that the failure of any Indemnified Party to give notice as provided herein shall not relieve the

 
Indemnifying Party of its obligations under this Section 7 unless the Indemnifying Party is materially prejudiced thereby. No Indemnifying Party, in the defense of any such claim or
litigation shall, except with the prior written consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement which (A) does not include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party of a release from all liability in respect to such claim or litigation or (B) requires anything from the Indemnified Party other than the payment of money damages that the Indemnifying Party has agreed to pay in full.
Each Indemnified Party shall, at the expense of the Indemnifying Party, furnish such information regarding itself or the claim in question as the Indemnifying Party may reasonably request in writing and as shall be reasonably required in connection
with the defense of such claim and litigation resulting therefrom. 
 (d) If the indemnification provided for in this
Section 7 is held by a court of competent jurisdiction to be unavailable to an Indemnified Party with respect to any loss, liability, claim, damage or expense referred to herein, then the Indemnifying Party, in lieu of indemnifying such
Indemnified Party hereunder, shall contribute to the amount paid or payable by such Indemnified Party as a result of such loss, liability, claim, damage or expense in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on the other hand in connection with the statements or omissions which resulted in such loss, liability, claim, damage or expense, as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the Indemnified Party shall be determined by reference to, among other things, whether the untrue (or alleged untrue) statement of a material fact or the omission (or alleged
omission) to state a material fact relates to information supplied by the Indemnifying Party or by the Indemnified Party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or
omission. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 7(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the
equitable considerations referred to herein. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) under the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent
misrepresentation. 
 (e) Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution
contained in the underwriting agreement entered into in connection with any underwritten public offering contemplated by this Agreement are in conflict with the foregoing provisions, the provisions in such underwriting agreement shall be
controlling. 
 (f) The indemnity agreements contained herein shall be in addition to (i) any cause of action or similar
right of any Indemnified Party against the Indemnifying Party or others and (ii) any liabilities the Indemnifying Party may be subject to pursuant to law. 
 Section 8. Default Payment. 
 If (a) any Registration
Statement is not filed within the time periods specified herein, (b) any Registration Statement is not declared effective by the SEC or does not otherwise become effective on or prior to its required effectiveness date, (c) the Company
fails to file with the SEC a request for acceleration in accordance with Rule 461 under the Securities Act within five (5) Business Days of the date on which the Company is notified (orally or in writing, whichever is earlier) by the SEC that a
Registration Statement will not be reviewed or is not subject to further review, or (d) after it has been declared effective, such Registration Statement ceases for any reason to be effective and available to the Holders as to all Registrable
Securities to which it is required to cover at any time (in each case, except as specifically permitted herein) (each, a “Registration Default”), then the Company shall make a special payment to Holders in an

 
amount equal to 1.00% per annum of the accrued liquidation preference of each share of Preferred Stock that is convertible into a Registrable Security, payable, at the option of the Company,
either in cash or by increasing the liquidation preference of each share of Preferred Stock. Special payments shall accrue from the date of the applicable Registration Default until such Registration Default has been cured, and shall be payable
quarterly in arrears on each January 1, April 1, July 1 and October 1 following such Registration Default to the record holder of the applicable security on the date that is 15 days prior to such payment date, until
paid in full. Special payments payable in respect of any Registration Default shall be computed on the basis of a 365-day year and the actual number of days elapsed. Special payments shall be payable only with respect to a single Registration
Default at any given time, notwithstanding the fact that multiple Registration Defaults may have occurred and be continuing. Notwithstanding anything in this Section 8 to the contrary, in no event shall a Registration Default be deemed
to have occurred and be continuing during any Suspension Period permitted hereunder. 
 Section 9.
Obligations of Holders. 
 (a) It shall be a condition precedent to the obligation of the Company to effect any Registration
pursuant to this Agreement with respect to the Registrable Securities of a particular Holder that such Holder promptly furnish to the Company such information regarding such Holder and the distribution proposed by such Holder as the Company may from
time to time reasonably request in writing and such other information as may be legally required in connection with such Registration including, without limitation, all such information as may be requested by the SEC. 
 (b) Each Holder, by such Holder’s acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of any Registration hereunder, unless such Holder has notified the Company in writing of such Holder’s election to exclude all of such Holder’s Registrable Securities
from such Registration. 
 (c) Each Holder agrees that, upon receipt of any notice from the Company of the happening of any
event of the kind described in Section 6(d) or the commencement of any Suspension Period pursuant to Section 2(b), such Holder will immediately discontinue the disposition of Registrable Securities pursuant to any
Registration Statement covering such Registrable Securities until such Holder’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 6(d) or the termination of the Suspension Period, and, if so
directed by the Company, such Holder shall (at the expense of the Company) deliver to the Company, or destroy all copies in such Holder’s possession of, any prospectus covering such Registrable Securities current at the time of receipt of such
notice. 
 Section 10. Rule 144 Reporting. With a view to making available to Holders the benefits of certain
rules and regulations of the SEC which may permit the sale of restricted securities to the public without registration, the Company agrees, as long as Registrable Securities remain outstanding, to use reasonable best efforts to: (a) at all
times after the date of this Agreement, make publicly available such information as necessary to permit sales pursuant to Rule 144 under the Securities Act, (b) file with the SEC in a timely manner all reports and other documents required of
the Company under the Securities Act and the Exchange Act at any time after it has become subject to such reporting requirements; and (c) so long as a Holder owns any Registrable Securities, furnish to such Holder upon request, a written
statement by the Company as to its compliance with the reporting requirements of Rule 144. 

 Section 11. Termination of Registration Rights. The registration rights
set forth in this Agreement shall not be available to any Holder, and the obligations of the Company set forth in Section 10 shall not pertain to any Holder once such Holder no longer owns any Registrable Securities. 
 Section 12. Lock-Up Agreement. Subject to the provisions hereof, in the event the Company proposes to enter into an
underwritten public offering, each Holder agrees to enter into a customary agreement with the underwriter or underwriters not to effect any sale or distribution of the Common Stock of the Company, or any securities convertible, exchangeable or
exercisable for or into Common Stock, during the period reasonably requested by such underwriter; provided that such Holders shall not be so obligated unless the Company and each other stockholder owning 5% or more of the Company’s outstanding
Common Stock participating in such offering enter into the same or comparable lock-up agreement for the same period. 
 Section 13. Other Registration Rights. The Company covenants that it will not grant to any Person any right of registration under the Securities Act relating to any of its securities other than pursuant to this Agreement
and the Amended and Restated MDP Registration Agreement entered into with Madison Dearborn Capital Partners III, L.P., a Delaware limited partnership, Madison Dearborn Special Equity III, L.P., a Delaware limited partnership, and Special Advisors
Fund I, LLC, a Delaware limited liability company (collectively, “MDP”), dated as of December 22, 2009 by and among the Company and MDP (the “MDP Registration Agreement”) unless consented to in writing by Persons holding a
majority of the Registrable Securities and by the Persons holding a majority of the Registrable Securities then held by the Investors. The Company further covenants that it will not amend the MDP Registration Agreement unless consented to in writing
by Persons holding a majority of the Registrable Securities and by the Persons holding a majority of the Registrable Securities then held by the Investors. With respect to relative priority in Piggyback Registrations, the Investors hereby agree that
the Holders (as defined in the MDP Agreement) shall be deemed “Other Shareholders having registration rights on a pari passu basis” for purposes of Sections 4(b)(i) and 4(b)(ii) of this Agreement. In the event that the Company has more
than one effective Shelf Registration Statement in place and it receives competing requests for underwritten takedowns from such Registration Statements, the Investors hereby agree that priority shall be given to the Person at whose direction or
pursuant to whose right the Shelf Registration Statement was originally filed. 
 Section 14. Miscellaneous.

 (a) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be
amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given without the written consent of the Company and the Holders of a majority of the then outstanding Registrable Securities. No waiver
of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement
hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right. 

 (b) Notices. All notices, demands, instructions, waivers, consents or other
communications to be provided pursuant to this Agreement shall be in writing, shall be effective upon receipt, and shall be sent by hand, facsimile, air courier or certified or registered mail, return receipt requested, as follows: 
  

	 	(i)	if to the Company: 

 Ruth’s Hospitality Group, Inc. 
 500 International Parkway 
 Heathrow, Florida 32746 
 Attention: Chief Financial Officer 
 Facsimile:
(407) 833-9625 
 with a copy to (which shall not constitute notice): 
 Kirkland & Ellis LLP 
 300 North LaSalle Street 
 Chicago, Illinois 60654 
 Facsimile: (312) 862-2200

 Attention: James S. Rowe 
             William R. Burke 
  

	 	(ii)	if to the Investors: 

 c/o Bruckmann, Rosser, Sherrill & Co., Inc. 
 126 East 56th Street 
 29th Floor 
 New York, New York 10022 
 Facsimile: (212) 521-3799

 Attention: Harold O. Rosser 
 with a copy to (which shall not constitute notice): 
 Dechert LLP 
 Cira Centre 
 2929 Arch Street 
 Philadelphia, Pennsylvania 19104 
 Facsimile: (215) 994-2222 
 Attention: Carmen J. Romano 
  

	 	(iii)	if to any other Person who is then a registered Holder: 

 To the address of such Holder as it appears in the stock transfer books of the Company 
 (c) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors of each of the parties. The registration rights set forth in this Agreement may not be assigned, in whole or in part, to any
person without the prior written consent of the Company, such consent not to be unreasonably withheld, conditioned or delayed. 

 (d) Counterparts. This Agreement may be signed in any number of counterparts and
signatures may be delivered by facsimile or in electronic format, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 
 (e) Headings and Section References. The section and paragraph headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this Agreement. Unless otherwise specified herein, references to Sections and clauses shall be references to Sections and clauses of this Agreement. 
 (f) Governing Law. The provisions of this Agreement shall be governed by and construed in accordance with the laws of the State of
New York. 
 (g) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated
except to the extent necessary to delete such invalid, illegal, void or unenforceable provision unless the provision held invalid, illegal, void or unenforceable shall substantially impair the benefits of the remaining portions of this Agreement.

 (h) Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement, and is
intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein, with respect to the registration rights granted by the Company with respect to Registrable Securities. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

 (i) Remedies. In the event of a breach or a threatened breach by any party to this Agreement of its obligations under
this Agreement, any party injured or to be injured by such breach will be entitled to specific performance of its rights under this Agreement or to injunctive relief, in addition to being entitled to exercise all rights provided in this Agreement
and granted by law, it being agreed by the parties that the remedy at law, including monetary damages, for breach of any such provision will be inadequate compensation for any loss and that any defense or objection in any action for specific
performance or injunctive relief that a remedy at law would be adequate is waived. 
 (j) Submission to Jurisdiction.
The Company and each of the Investors irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the courts of the State of New York sitting in New York County and of the United States District Court of
the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, or for the recognition or enforcement of any judgment in connection herewith, and each of the
parties hereto irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State court or, to the fullest extent permitted by applicable law, in such federal court.
Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. 
 * * * * * 

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

			
	RUTH’S HOSPITALITY GROUP, INC.
		
	By:	 	  

	Name:	 	  

	Title:	 	  

	
	BRUCKMANN, ROSSER, SHERRILL & CO. III, L.P.
		
	By:	 	  

	Name:	 	  

	Title:	 	  

	
	BRS COINVESTOR III, L.P.
		
	By:	 	  

	Name:	 	  

	Title:	 	  

 EXHIBIT D 
 CREDIT AGREEMENT AMENDMENT 

 SCHEDULE A 
 SCHEDULE OF INVESTORS 
  

						
	 Investor
	  	Number of Shares	  	Aggregate
Purchase
Price
	 Bruckmann, Rosser, Sherrill & Co. III, L.P.
	  	19,817.71285	  	$	19,817,712.85
			
	 BRS Coinvestor III, L.P.
	  	5,182.28715	  	$	5,182,287.15
			
	 Total
	  	25,000	  	$	25,000,000.00

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