Document:

Form of Indenture

 Exhibit 4.4 
  

 TEXAS INSTRUMENTS INCORPORATED 
 and 
 U.S. BANK NATIONAL ASSOCIATION 
 Trustee 
 INDENTURE 
 Dated as of _______________, 2007 
  

 TABLE OF CONTENTS 
  

  

			
	  	  	PAGE
	ARTICLE 1	  	
	DEFINITIONS	  	
	 Section 1.01. Certain Terms Defined
	  	1
		
	ARTICLE 2	  	
	SECURITIES	  	
		
	 Section 2.01. Forms Generally
	  	7
	 Section 2.02. Form of Trustee’s Certificate of Authentication
	  	8
	 Section 2.03. Amount Unlimited; Issuable in Series
	  	8
	 Section 2.04. Authentication and Delivery of Securities
	  	10
	 Section 2.05. Execution of Securities
	  	12
	 Section 2.06. Certificate of Authentication
	  	13
	 Section 2.07. Denomination and Date of Securities; Payments of Interest
	  	13
	 Section 2.08. Registration, Transfer and Exchange
	  	14
	 Section 2.09. Mutilated, Defaced, Destroyed, Lost and Stolen Securities
	  	16
	 Section 2.10. Cancellation of Securities; Destruction Thereof
	  	17
	 Section 2.11. Temporary Securities
	  	17
		
	ARTICLE 3	  	
	COVENANTS OF THE ISSUER	  	
		
	 Section 3.01. Payment of Principal and Interest
	  	18
	 Section 3.02. Offices for Payments, Etc.
	  	18
	 Section 3.03. Appointment to Fill a Vacancy in Office of Trustee
	  	19
	 Section 3.04. Paying Agents
	  	19
	 Section 3.05. Written Statement to Trustee
	  	20
	 Section 3.06. Limitation on Liens
	  	20
	 Section 3.07. Limitation on Sale and Leaseback
	  	23
		
	ARTICLE 4	  	
	SECURITYHOLDERS LISTS AND REPORTS BY THE ISSUER AND
THE TRUSTEE	  	
		
	 Section 4.01. Issuer to Furnish Trustee Information as to Names and Addresses of Securityholders
	  	24
	 Section 4.02. Reports by the Issuer
	  	25
	 Section 4.03. Reports by the Trustee
	  	25

			
	ARTICLE 5	  	
	REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT
OF DEFAULT	  	
		
	 Section 5.01. Event of Default Defined; Acceleration of Maturity; Waiver of Default
	  	25
	 Section 5.02. Collection of Debt by Trustee; Trustee May Prove Debt
	  	28
	 Section 5.03. Application of Proceeds
	  	31
	 Section 5.04. Suits for Enforcement
	  	32
	 Section 5.05. Restoration of Rights on Abandonment of Proceedings
	  	32
	 Section 5.06. Limitations on Suits by Securityholders
	  	32
	 Section 5.07. Unconditional Right of Securityholders to Institute Certain Suits
	  	33
	 Section 5.08. Powers and Remedies Cumulative; Delay or Omission Not Waiver of Default
	  	33
	 Section 5.09. Control by Holders of Securities
	  	33
	 Section 5.10. Waiver of Past Defaults
	  	34
	 Section 5.11. Trustee to Give Notice of Default, but May Withhold in Certain Circumstances
	  	34
	 Section 5.12. Right of Court to Require Filing of Undertaking to Pay Costs
	  	35
		
	ARTICLE 6	  	
	CONCERNING THE TRUSTEE	  	
		
	 Section 6.01. Duties and Responsibilities of the Trustee; During Default; Prior to Default
	  	35
	 Section 6.02. Certain Rights of the Trustee
	  	37
	 Section 6.03. Trustee Not Responsible for Recitals, Disposition of Securities or Application of Proceeds Thereof
	  	38
	 Section 6.04. Trustee and Agents May Hold Securities; Collections, Etc.
	  	38
	 Section 6.05. Moneys Held by Trustee
	  	38
	 Section 6.06. Compensation and Indemnification of Trustee and Its Prior Claim
	  	38
	 Section 6.07. Right of Trustee to Rely on Officers’ Certificate, Etc.
	  	39
	 Section 6.08. Indentures Creating Potential Conflicting Interests for the Trustee
	  	39
	 Section 6.09. Persons Eligible for Appointment as Trustee
	  	39
	 Section 6.10. Resignation and Removal; Appointment of Successor Trustee
	  	40
	 Section 6.11. Acceptance of Appointment by Successor Trustee
	  	41
	 Section 6.12. Merger, Conversion, Consolidation or Succession to Business of Trustee
	  	42
		
	ARTICLE 7	  	
	CONCERNING THE SECURITYHOLDERS	  	
		
	 Section 7.01. Evidence of Action Taken by Securityholders
	  	43

  

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	 Section 7.02. Proof of Execution of Instruments and of Holding of Securities
	  	43
	 Section 7.03. Holders to Be Treated as Owners
	  	44
	 Section 7.04. Securities Owned by Issuer Deemed Not Outstanding
	  	44
	 Section 7.05. Right of Revocation of Action Taken
	  	45
		
	ARTICLE 8	  	
	SUPPLEMENTAL INDENTURES	  	
		
	 Section 8.01. Supplemental Indentures Without Consent of Securityholders
	  	45
	 Section 8.02. Supplemental Indentures With Consent of Securityholders
	  	47
	 Section 8.03. Effect of Supplemental Indenture
	  	48
	 Section 8.04. Documents to Be Given to Trustee
	  	48
	 Section 8.05. Notation on Securities in Respect of Supplemental Indentures
	  	49
		
	ARTICLE 9	  	
	CONSOLIDATION, MERGER, SALE OR CONVEYANCE	  	
		
	 Section 9.01. Issuer May Consolidate, Etc., on Certain Terms
	  	49
	 Section 9.02. Successor Issuer Substituted
	  	50
	 Section 9.03. Opinion of Counsel and Officers’ Certificate to Trustee
	  	51
		
	ARTICLE 10	  	
	SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS	  	
		
	 Section 10.01. Satisfaction and Discharge of Indenture
	  	51
	 Section 10.02. Application by Trustee of Funds Deposited for Payment of Securities
	  	54
	 Section 10.03. Repayment of Moneys Held by Paying Agent
	  	54
	 Section 10.04. Return of Moneys Held by Trustee and Paying Agent Unclaimed for Two Years
	  	54
	 Section 10.05. Indemnity for U.S. Government Obligations
	  	54
		
	ARTICLE 11	  	
	MISCELLANEOUS PROVISIONS	  	
		
	 Section 11.01. Incorporators, Stockholders, Officers and Directors of Issuer Exempt from Individual Liability
	  	55
	 Section 11.02. Provisions of Indenture for the Sole Benefit of Parties and Holders of Securities
	  	55
	 Section 11.03. Successors and Assigns of Issuer Bound by Indenture
	  	55
	 Section 11.04. Notices and Demands on Issuer, Trustee and Holders of Securities
	  	55
	 Section 11.05. Officers’ Certificates and Opinions of Counsel; Statements to Be Contained Therein
	  	56
	 Section 11.06. Payments Due on Saturdays, Sundays and Holidays
	  	57

  

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	 Section 11.07. Conflict of Any Provision of Indenture With Trust Indenture Act of 1939
	  	58
	 Section 11.08. New York Law to Govern
	  	58
	 Section 11.09. Counterparts
	  	58
	 Section 11.10. Effect of Headings
	  	58
	 Section 11.11. Securities in a Foreign Currency
	  	58
	 Section 11.12. Judgment Currency
	  	59
		
	ARTICLE 12	  	
	REDEMPTION OF SECURITIES AND SINKING FUNDS	  	
		
	 Section 12.01. Applicability of Article
	  	59
	 Section 12.02. Notice of Redemption; Partial Redemptions
	  	59
	 Section 12.03. Payment of Securities Called for Redemption
	  	61
	 Section 12.04. Exclusion of Certain Securities from Eligibility for Selection for Redemption
	  	62
	 Section 12.05. Mandatory and Optional Sinking Funds
	  	62

  

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 THIS INDENTURE, dated as of ______ __, 2007 between TEXAS INSTRUMENTS INCORPORATED, a Delaware
corporation (the “Issuer”), and U.S. BANK NATIONAL ASSOCIATION, a New York banking corporation (the “Trustee”), 
 W I T N E S S E T H : 
 WHEREAS, the Issuer may from time to time duly authorize the issue of its unsecured debentures, notes or
other evidences of indebtedness to be issued in one or more series (the “Securities”) up to such principal amount or amounts as may from time to time be authorized in accordance with the terms of this Indenture; 
 WHEREAS, the Issuer has duly authorized the execution and delivery of this Indenture to provide, among other things, for the authentication, delivery and
administration of the Securities; and 
 WHEREAS, all things necessary to make this Indenture a valid indenture and agreement according to
its terms have been done; 
 NOW, THEREFORE: 
 In consideration of the premises and the purchases of the Securities by the holders thereof, the Issuer and the Trustee mutually covenant and agree for the equal and proportionate benefit of the respective holders
from time to time of the Securities as follows: 
 ARTICLE 1 
 DEFINITIONS 
 Section 1.01. Certain Terms Defined. The following terms (except as
otherwise expressly provided or unless the context otherwise clearly requires) for all purposes of this Indenture and of any indenture supplemental hereto shall have the respective meanings specified in this Section. All other terms used in this
Indenture that are defined in the Trust Indenture Act of 1939 or the definitions of which in the Securities Act of 1933 are referred to in the Trust Indenture Act of 1939, including terms defined therein by reference to the Securities Act of 1933
(except as herein otherwise expressly provided or unless the context otherwise clearly requires), shall have the meanings assigned to such terms in said Trust Indenture Act and in said Securities Act as in force at the date of this Indenture. All
accounting terms used herein and not expressly defined shall have the meanings assigned to such terms in accordance with generally accepted accounting principles, and the term “generally accepted accounting principles” means such
accounting principles as are generally accepted at the time of any 

 
computation. The words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole
and not to any particular Article, Section or other subdivision. The terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular. 
 “Additional Interest Period” has the meaning set forth in Section 5.01(g). 
 “Attributable Debt” shall have the meaning set forth in Section 3.07. 
 “Board of Directors” means either the Board of Directors of the Issuer or any committee of such Board duly authorized to act on its
behalf. 
 “Board Resolution” means a copy of one or more resolutions, certified by the secretary or an assistant secretary
of the Issuer to have been duly adopted by the Board of Directors and to be in full force and effect, and delivered to the Trustee. 
 “Business Day” means, with respect to any Security, a day that in the city (or in any of the cities, if more than one) in which amounts are payable, as specified in the form of such Security, is not a day on which banking
institutions are authorized or required by law or regulation to close. 
 “Commission” means the Securities and Exchange
Commission, as from time to time constituted, created under the Securities Exchange Act of 1934, or if at any time after the execution and delivery of this Indenture such Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act of 1939, then the body performing such duties on such date. 
 “Common Stock” means shares of common
stock, par value $1.00 per share, of the Issuer as the same exists at the date of execution and delivery of this Indenture or as such stock may be reconstituted from time to time. 
 “Consolidated Net Tangible Assets” means, at any date, the total assets appearing on the most recent consolidated balance sheet,
prepared in accordance with generally accepted accounting principles, less (a) all current liabilities as shown on such balance sheet, and (b) intangible assets. “Intangible assets” means the value (net of applicable
reserves), as shown on or reflected in such balance sheet, of: (i) all trade names, trademarks, licenses, patents, copyrights and goodwill; (ii) organizational or development costs; (iii) deferred charges (other than prepaid items
such as insurance, taxes, interest, commissions, rents and similar items and tangible assets being amortized); and (iv) unamortized debt discount and expenses, less unamortized premium; but in no event shall the term “intangible
assets” include computer programs and related products. 
 “Corporate Trust Office” means the office of the Trustee
at which the corporate trust business of the Trustee shall, at any particular time, be principally administered, which office is, at the date as of which this Indenture is dated, located at 120 Wall Street, New York, New York 10043. 
  

 2 

 “Debt” of any Person means any debt for money borrowed which is created, assumed,
incurred or guaranteed in any manner by such Person or for which such Person is otherwise responsible or liable, and shall expressly include any such guaranty thereof by such Person. For the purpose of computing the amount of any Funded Debt or
other Debt of any Person there shall be excluded all Debt of such Person for the payment or redemption or satisfaction of which money or securities (or evidences of such Debt, if permitted under the terms of the instrument creating such Debt) in the
necessary amount shall have been deposited in trust with the proper depositary, whether upon or prior to the maturity or the date fixed for redemption of such Debt; and, in any instance where Debt is so excluded, for the purpose of computing the
assets of such Person there shall be excluded the money, securities or evidences of Debt deposited by such Person in trust for the purpose of paying or satisfying such Debt. 
 “Depositary” means, with respect to the Securities of any series issuable or issued in the form of one or more Global Securities, the
Person designated as Depositary by the Issuer pursuant to Section 2.04 until a successor Depositary shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Depositary” shall mean or
include each Person who is then a Depositary hereunder, and if at any time there is more than one such Person, “Depositary” as used with respect to the Securities of any such series shall mean the Depositary with respect to the
Global Securities of that series. 
 “Dollar” means the currency of the United States of America as at the time of payment
is legal tender for the payment of public and private debts. 
 “Event of Default” means any event or condition specified as
such in Section 5.01. 
 “Exempted Debt” means the sum of the following items outstanding as of the date Exempted Debt
is being determined: (i) Debt of the Issuer and its Subsidiaries incurred after the date of this Indenture and secured by liens created, assumed or permitted to exist pursuant to Section 3.06(b) and (ii) Attributable Debt of the
Issuer and its Subsidiaries in respect of all sale and leaseback transactions entered into pursuant to Section 3.07(b), including amounts considered to be Attributable Debt pursuant to Section 3.07(a)(iii)(B). 
 “Foreign Currency” means a currency issued by the government of a country other than the United States. 
 “Funded Debt” means all Debt whether incurred, assumed or guaranteed, including purchase money indebtedness, maturing by its terms more
than one year from the date of creation thereof or which is renewable or extendable at the sole option of the obligor in such manner that it may become payable more than one year from the date of creation thereof. 
  

 3 

 “Global Security”, means a Security evidencing all or a part of a series of Securities,
issued to the Depositary for such series in accordance with Section 2.04, and bearing the legend prescribed in Section 2.04. 
 “Holder”, “holder of Securities”, “Securityholder” or other similar terms mean the Person in whose name such Security is registered in the Security register kept by the Issuer for that
purpose in accordance with the terms hereof. 
 “Indenture” means this instrument as originally executed and delivered or,
if amended or supplemented as herein provided, as so amended or supplemented or both, and shall include the forms and terms of particular series of Securities established as contemplated hereunder. 
 “interest”, unless the context otherwise requires, refers to interest and Reporting Interest, if any, and when used with respect to
non-interest bearing Securities, refers to interest payable after maturity and Reporting Interest, if any. 
 “Issuer” means
Texas Instruments Incorporated and, subject to Article 9, its successors and assigns. 
 “Issuer Order” means a written
statement, request or order of the Issuer signed in its name by the chairman of the Board of Directors, the president or any vice president of the Issuer. 
 “Market Exchange Rate” has the meaning set forth in Section 11.11. 
 “Mortgage” has the meaning set forth in Section 3.06. 
 “net rental payments” has the
meaning set forth in Section 3.07. 
 “Officers’ Certificate” means a certificate signed by (i) the chairman
of the Board of Directors or the president or any vice president and (ii) the treasurer or the secretary or any assistant secretary of the Issuer and delivered to the Trustee. Each such certificate shall comply with Section 314 of the
Trust Indenture Act of 1939 and shall include the statements provided for in Section 11.05. 
 “Opinion of Counsel”
means an opinion in writing signed by the general corporate counsel or such other legal counsel who may be an employee of or counsel to the Issuer and who shall be satisfactory to the Trustee. Each such opinion shall comply with Section 314 of
the Trust Indenture Act of 1939 and shall include the statements provided for in Section 11.05, if and to the extent required hereby. 
  

 4 

 “original issue date” of any Security (or portion thereof) means the earlier of
(a) the date of such Security or (b) the date of any Security (or portion thereof) for which such Security was issued (directly or indirectly) on registration of transfer, exchange or substitution. 
 “Original Issue Discount Security” means any Security that provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the maturity thereof pursuant to Section 5.01. 
 “Outstanding”, when
used with reference to Securities, shall, subject to the provisions of Section 7.04, mean, as of any particular time, all Securities authenticated and delivered by the Trustee under this Indenture, except 
 (a) Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation; 
 (b) Securities, or portions thereof, for the payment or redemption of which moneys or U.S. Government Obligations (as provided for in
Section 10.01) in the necessary amount shall have been deposited in trust with the Trustee or with any paying agent (other than the Issuer) or shall have been set aside, segregated and held in trust by the Issuer for the Holders of such
Securities (if the Issuer shall act as its own paying agent); provided, that if such Securities, or portions thereof, are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as herein provided, or
provision satisfactory to the Trustee shall have been made for giving such notice; and 
 (c) Securities in substitution for
which other Securities shall have been authenticated and delivered, or which shall have been paid, pursuant to the terms of Section 2.09 (except with respect to any such Security as to which proof satisfactory to the Trustee is presented that
such Security is held by a Person in whose hands such Security is a legal, valid and binding obligation of the Issuer), Securities converted into Common Stock pursuant hereto and Securities not deemed outstanding pursuant to Section 12.02.

 In determining whether the Holders of the requisite principal amount of Outstanding Securities of any or all series have given any
request, demand, authorization, direction, notice, consent or waiver hereunder, the principal amount of an Original Issue Discount Security that shall be deemed to be Outstanding for such purposes shall be the amount of the principal thereof that
would be due and payable as of the date of such determination upon a declaration of acceleration of the maturity thereof pursuant to Section 5.01. 
  

 5 

 “Person” means any individual, corporation, partnership, limited partnership, limited
liability company, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. 
 “principal” whenever used with reference to the Securities or any Security or any portion thereof, shall be deemed to include “and premium, if any”. 
 “Principal Manufacturing Property” means each manufacturing or processing plant or facility of the Issuer located in the United States
of America (other than its territories and possessions) or Puerto Rico; except any such manufacturing or processing plant or facility which the Board of Directors by resolution determines not to be of material importance to the total business
conducted by the Issuer and its consolidated Subsidiaries, taken as a whole. 
 “Reporting Interest” has the meaning set
forth in Section 5.01(g). 
 “Responsible Officer”, when used with respect to the Trustee, means the chairman of the
board of directors, any vice chairman of the board of directors, the chairman of the trust committee, the chairman of the executive committee, any vice chairman of the executive committee, the president, any vice president, the cashier, the
secretary, the treasurer, any trust officer, any assistant trust officer, any assistant vice president, any assistant cashier, any assistant secretary, any assistant treasurer, or any other officer or assistant officer of the Trustee customarily
performing functions similar to those performed by the persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of his or her knowledge of and familiarity with the particular subject.

 “Security” or “Securities” has the meaning stated in the first recital of this Indenture, or, as the
case may be, Securities that have been authenticated and delivered under this Indenture. 
 “Subsidiary” means a corporation
of which stock having a majority of the voting power under ordinary circumstances is owned, directly or indirectly, by the Issuer or by one or more subsidiaries of the Issuer, or by the Issuer and one or more subsidiaries of the Issuer. 

“Trust Indenture Act of 1939” (except as otherwise provided in Sections 8.01 and 8.02) means the Trust Indenture Act of 1939 as in
force at the date as of which this Indenture was originally executed. 
  

 6 

 “Trustee” means the Person identified as “Trustee” in the first
paragraph hereof and, subject to the provisions of Article 6, shall also include any successor trustee. “Trustee” shall also mean or include each Person who is then a trustee hereunder and if at any time there is more than one such
Person, “Trustee” as used with respect to the Securities of any series shall mean the trustee with respect to the Securities of such series. 
 “U.S. Government Obligations” shall have the meaning set forth in Section 10.01(a). 
 “vice president”, when used with respect to the Issuer or the Trustee, means any vice president, whether or not designated by a number or a word or words added before or after the title of “vice president”.

 “Yield to Maturity” means the yield to maturity on a series of securities, calculated at the time of issuance of such
series, or, if applicable, at the most recent redetermination of interest on such series, and calculated in accordance with accepted financial practice. 
 ARTICLE 2 
 SECURITIES 
 Section 2.01. Forms Generally. The Securities of each series shall be substantially in such form (not inconsistent with this Indenture) as shall
be established by or pursuant to one or more Board Resolutions (as set forth in a Board Resolution or, to the extent established pursuant to (rather than set forth in) a Board Resolution, an Officers’ Certificate detailing such establishment)
or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture and may have imprinted or otherwise reproduced thereon such
legend or legends or endorsements, not inconsistent with the provisions of this Indenture, as may be required to comply with any law or with any rules or regulations pursuant thereto, or with any rules of any securities exchange or to conform to
general usage, all as may be determined by the officers executing such Securities as evidenced by their execution of such Securities. 
 The
definitive Securities shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers executing such Securities as evidenced by their execution of such Securities.

  

 7 

 Section 2.02. Form of Trustee’s Certificate of Authentication. The Trustee’s certificate
of authentication on all Securities shall be in substantially the following form: 
 This is one of the Securities of the series designated
herein and referred to in the within-mentioned Indenture. 
  

			
	U.S. Bank National Association,
	as Trustee
		
	By:	 	  
		 	Authorized Officer

 Section 2.03. Amount Unlimited; Issuable in Series. The aggregate principal
amount of Securities which may be authenticated and delivered under this Indenture is unlimited. 
 The Securities may be issued in one or
more series. The terms of a series of Securities shall be established prior to the initial issuance thereof in or pursuant to one or more Board Resolutions of the Board of Directors and set forth in a Board Resolution, or, to the extent established
pursuant to (rather than set forth in) a Board Resolution, in an Officers’ Certificate detailing such establishment and/or established in one or more indentures supplemental hereto. The terms of such series reflected in such Board Resolution,
Officers’ Certificate, or supplemental indenture may include the following or any additional or different terms: 
 (a) the designation
of the Securities of the series (which may be part of a series of Securities previously issued); 
 (b) the terms and conditions, if
applicable, upon which conversion of the Securities into Common Stock will be effected, including the initial conversion price or rate, the conversion period and other provisions in addition to or in lieu of those described herein; 
 (c) any limit upon the aggregate principal amount of the Securities of the series that may be authenticated and delivered under this Indenture (except
for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Section 2.08, 2.09, 2.11, 8.05 or 12.03); 
 (d) if other than Dollars, the Foreign Currency in which the Securities of that series are denominated; 
 (e) any date on which the principal of the Securities of the series is payable; 
  

 8 

 (f) the rate or rates at which the Securities of the series shall bear interest, if any, the record date
or dates for the determination of holders to whom interest is payable, the date or dates from which such interest shall accrue and on which such interest shall be payable and/or the method by which such rate or rates or date or dates shall be
determined; 
 (g) the place or places where the principal of and any interest on Securities of the series shall be payable (if other than as
provided in Section 3.02); 
 (h) the price or prices at which, the period or periods within which and the terms and conditions upon
which Securities of the series may be redeemed, in whole or in part, at the option of the Issuer, pursuant to any sinking fund or otherwise; 
 (i) the obligation, if any, of the Issuer to redeem, purchase or repay Securities of the series pursuant to any mandatory redemption, sinking fund or analogous provisions or at the option of a Holder thereof and the price or prices at which
and the period or periods within which and any terms and conditions upon which Securities of the series shall be redeemed, purchased or repaid, in whole or in part, pursuant to such obligation; 
 (j) if other than denominations of $1,000 and any integral multiple thereof, the denominations in which Securities of the series shall be issuable;

 (k) if other than the principal amount thereof, the portion of the principal amount of Securities of the series which shall be payable
upon declaration of acceleration of the maturity thereof; 
 (l) if other than the currency in which the Securities of that series are
denominated, the currency in which payment of the principal of or interest on the Securities of such series shall be payable; 
 (m) if the
principal of or interest on the Securities of the series is to be payable, at the election of the Issuer or a Holder thereof, in a currency other than that in which the Securities are denominated, the period or periods within which, and the terms
and conditions upon which, such election may be made; 
 (n) if the amount of payments of principal of and interest on the Securities of the
series may be determined with reference to an index based on a currency other than that in which the Securities of the series are denominated, the manner in which such amounts shall be determined; 
 (o) whether and upon what terms the Securities may be defeased; 
 (p) whether and under what circumstances the Issuer will pay additional amounts on the Securities of the series held by a Person who is not a U.S. Person in respect of any tax, assessment or governmental charge
withheld or deducted and, if so, whether the Issuer will have the option to redeem such Securities rather than pay such additional amounts; 
  

 9 

 (q) if the Securities of such series are to be issuable in definitive form (whether upon original issue
or upon exchange of a temporary Security of such series) only upon receipt of certain certificates or other documents or satisfaction of other conditions, then the form and terms of such certificates, documents or conditions; 
 (r) any trustees, authenticating or paying agents, transfer agents or registrars or any other agents with respect to the Securities of such series;

 (s) any other events of default or covenants with respect to the Securities of such series in addition to or in lieu of those contained in
this Indenture; 
 (t) if the Securities of the series may be issued in exchange for surrendered Securities of another series, or for other
securities of the Issuer, pursuant to the terms of such Securities or securities or of any agreement entered into by the Issuer, the ratio of the principal amount of the Securities of the series to be issued to the principal amount of the Securities
or securities to be surrendered in exchange, and any other material terms of the exchange; 
 (u) the terms and conditions, if any, pursuant
to which the Securities may be exchanged for the cash value of other securities issued by the Issuer or by a third party; and 
 (v) any
other terms of the series. 
 The Issuer may from time to time, without notice to or the consent of the holders of any series of Securities,
create and issue further Securities of any such series ranking equally with the Securities of such series in all respects (or in all respects other than the payment of interest accruing prior to the issue date of such further Securities or except
for the first payment of interest following the issue date of such further Securities). Such further Securities may be consolidated and form a single series with the Securities of such series and have the same terms as to status, redemption or
otherwise as the Securities of such series. 
 Section 2.04. Authentication and Delivery of Securities. The Issuer may deliver
Securities of any series executed by the Issuer to the Trustee for authentication together with the applicable documents referred to below in this Section, and the Trustee shall thereupon authenticate and deliver such Securities to or upon the order
of the Issuer (contained in the Issuer Order referred to below in this Section) or pursuant to such procedures acceptable to the Trustee and to 

  

 10 

 
such recipients as may be specified from time to time by an Issuer Order. The maturity date, original issue date, interest rate and any other terms of the
Securities of such series shall be determined by or pursuant to such Issuer Order and procedures. If provided for in such procedures, such Issuer Order may authorize authentication and delivery pursuant to oral instructions from the Issuer or its
duly authorized agent, which instructions shall be promptly confirmed in writing. In authenticating such Securities and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to
receive, and (subject to Section 6.01) shall be fully protected in relying upon: 
 (a) an Issuer Order requesting such authentication
and setting forth delivery instructions if the Securities are not to be delivered to the Issuer; 
 (b) any Board Resolution, Officers’
Certificate and/or executed supplemental indenture referred to in Sections 2.01 and 2.03 by or pursuant to which the forms and terms of the Securities were established; 
 (c) an Officers’ Certificate setting forth the form or forms and terms of the Securities stating that the form or forms and terms of the Securities have been established pursuant to Sections 2.01 and 2.03 and
comply with this Indenture, and covering such other matters as the Trustee may reasonably request; and 
 (d) an Opinion of Counsel to the
effect that: 
 (i) the form or forms and terms of such Securities have been established pursuant to Sections 2.01 and 2.03
and comply with this Indenture, 
 (ii) the authentication and delivery of such Securities by the Trustee are authorized under
the provisions of this Indenture, 
 (iii) such Securities when authenticated and delivered by the Trustee and issued by the
Issuer in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and binding obligations of the Issuer, and 
 (iv) all laws and requirements in respect of the execution and delivery by the Issuer of the Securities have been complied with, 
 and covering such other matters as the Trustee may reasonably request. 
 The Trustee shall have the right to decline to
authenticate and deliver any Securities under this Section if the Trustee, being advised by counsel, determines that such action may not lawfully be taken by the Issuer or if the Trustee in good faith by its board of directors or board of trustees,
executive committee, or a trust committee of directors or trustees or Responsible Officers shall determine that such action would expose the Trustee to personal liability to existing Holders or would affect the Trustee’s own rights, duties or
immunities under the Securities, this Indenture or otherwise. 
  

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 The Issuer shall execute and the Trustee shall, in accordance with this Section with respect to the
Securities of a series, authenticate and deliver one or more Global Securities that (i) shall represent and shall be denominated in an amount equal to the aggregate principal amount of all of the Securities of such series issued and not yet
cancelled, (ii) shall be registered in the name of the Depositary for such Global Security or Securities or the nominee of such Depositary, (iii) shall be delivered by the Trustee to such Depositary or pursuant to such Depositary’s
instructions and (iv) shall bear a legend substantially to the following effect: “Unless and until it is exchanged in whole or in part for Securities in definitive registered form, this Security may not be transferred except as a whole by
the Depositary to the nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor
Depositary.” 
 Each Depositary designated pursuant to this Section must, at the time of its designation and at all times while it
serves as Depositary, be a clearing agency registered under the Securities Exchange Act of 1934 and any other applicable statute or regulation. 
 Section 2.05. Execution of Securities. The Securities shall be signed on behalf of the Issuer by the chairman of its Board of Directors or any vice chairman of its Board of Directors or its president or any vice president or its
treasurer. Such signatures may be the manual or facsimile signatures of the present or any future such officers. Typographical and other minor errors or defects in any such reproduction of any such signature shall not affect the validity or
enforceability of any Security that has been duly authenticated and delivered by the Trustee. 
 In case any officer of the Issuer who shall
have signed any of the Securities shall cease to be such officer before the Security so signed shall be authenticated and delivered by the Trustee or disposed of by the Issuer, such Security nevertheless may be authenticated and delivered or
disposed of as though the person who signed such Security had not ceased to be such officer of the Issuer; and any Security may be signed on behalf of the Issuer by such persons as, at the actual date of the execution of such Security, shall be the
proper officers of the Issuer, although at the date of the execution and delivery of this Indenture any such person was not such an officer. 
  

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 Section 2.06. Certificate of Authentication. Only such Securities as shall bear thereon a
certificate of authentication substantially in the form hereinbefore recited, executed by the Trustee by the manual signature of one of its authorized officers, shall be entitled to the benefits of this Indenture or be valid or obligatory for any
purpose. The execution of such certificate by the Trustee upon any Security executed by the Issuer shall be conclusive evidence that the Security so authenticated has been duly authenticated and delivered hereunder and that the Holder is entitled to
the benefits of this Indenture. 
 Section 2.07. Denomination and Date of Securities; Payments of Interest. The Securities of each
series shall be issuable in denominations established as contemplated by Section 2.03 or, if not so established, in denominations of $1,000 and any integral multiple thereof. The Securities of each series shall be numbered, lettered or
otherwise distinguished in such manner or in accordance with such plan as the officers of the Issuer executing the same may determine with the approval of the Trustee, as evidenced by the execution and authentication thereof. Unless otherwise
indicated in a Board Resolution, Officers’ Certificate or supplemental indenture for a particular series, interest will be calculated on the basis of a 360-day year of twelve 30-day months. 
 Each Security shall be dated the date of its authentication. The Securities of each series shall bear interest, if any, from the date, and such interest
shall be payable on the dates, established as contemplated by Section 2.03. 
 The Person in whose name any Security of any series is
registered at the close of business on any record date applicable to a particular series with respect to any interest payment date for such series shall be entitled to receive the interest, if any, payable on such interest payment date
notwithstanding any transfer, exchange or conversion of such Security subsequent to the record date and prior to such interest payment date, except if and to the extent the Issuer shall default in the payment of the interest due on such interest
payment date for such series, in which case such defaulted interest shall be paid to the Persons in whose names Outstanding Securities for such series are registered at the close of business on a subsequent record date (which shall be not less than
five Business Days prior to the date of payment of such defaulted interest) established by notice given by mail by or on behalf of the Issuer to the Holders of Securities not less than 15 days preceding such subsequent record date. The term
“record date” as used with respect to any interest payment date (except a date for payment of defaulted interest) for the Securities of any series shall mean the date specified as such in the terms of the Securities of such series
established as contemplated by Section 2.03, or, if no such date is so established, if such interest payment date is the first day of a calendar month, the 15th day of the next preceding calendar month or, if such interest payment date is the
15th day of a calendar month, the first day of such calendar month, whether or not such record date is a Business Day. 
  

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 Section 2.08. Registration, Transfer and Exchange. The Issuer will keep at each office or agency
to be maintained for the purpose as provided in Section 3.02 for each series of Securities a register or registers in which, subject to such reasonable regulations as it may prescribe, it will provide for the registration of Securities of such
series and the registration of transfer of Securities of such series. Such register shall be in written form in the English language or in any other form capable of being converted into such form within a reasonable time. At all reasonable times
such register or registers shall be open for inspection by the Trustee. 
 Upon due presentation for registration of transfer of any Security
of any series at any such office or agency to be maintained for the purpose as provided in Section 3.02, the Issuer shall execute and the Trustee shall authenticate and deliver in the name of the transferee or transferees a new Security or
Securities of the same series, maturity date, interest rate and original issue date in authorized denominations for a like aggregate principal amount. 
 At the option of the Holder thereof, Securities of any series (except a Global Security) may be exchanged for a Security or Securities of such series having authorized denominations and an equal aggregate principal
amount, upon surrender of such Securities to be exchanged at the agency of the Issuer that shall be maintained for such purpose in accordance with Section 3.02 and upon payment, if the Issuer shall so require, of the charges hereinafter
provided. Whenever any Securities are so surrendered for exchange, the Issuer shall execute, and the Trustee shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive. All Securities surrendered upon
any exchange or transfer provided for in this Indenture shall be promptly cancelled and disposed of by the Trustee and the Trustee will deliver a certificate of disposition thereof to the Issuer. 
 All Securities presented for registration of transfer, exchange, redemption or payment shall (if so required by the Issuer or the Trustee) be duly
endorsed by, or be accompanied by a written instrument or instruments of transfer in form satisfactory to the Issuer and the Trustee duly executed by, the Holder or his or her attorney duly authorized in writing. 
 The Issuer may require payment of a sum sufficient to cover any stamp or other tax or other governmental charge that may be imposed in connection with
any exchange or registration of transfer of Securities. No service charge shall be made for any such transaction. 
 The Issuer shall not be
required to exchange or register a transfer of (a) any Securities of any series for a period of 15 days next preceding the first mailing of notice of redemption of Securities of such series to be redeemed or (b) any Securities selected,
called or being called for redemption, in whole or in part, except, in the case of any Security to be redeemed in part, the portion thereof not so to be redeemed. 
  

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 Notwithstanding any other provision of this Section 2.08, unless and until it is exchanged in whole
or in part for Securities in definitive registered form, a Global Security representing all or a portion of the Securities of a series may not be transferred except as a whole by the Depositary for such series to a nominee of such Depositary or by a
nominee of such Depositary to such Depositary or another nominee of such Depositary or by such Depositary or any such nominee to a successor Depositary for such series or a nominee of such successor Depositary. 
 If at any time the Depositary for the Securities of a series notifies the Issuer that it is unwilling or unable to continue as Depositary for the
Securities of such series or if at any time the Depositary for the Securities of a series shall no longer be eligible under Section 2.04, the Issuer shall appoint a successor Depositary with respect to the Securities of such series. If a
successor Depositary for the Securities of such series is not appointed by the Issuer within 90 days after the Issuer receives such notice or becomes aware of such ineligibility, the Issuer’s election pursuant to Section 2.03 that the
Securities of such series be represented by a Global Security shall no longer be effective and the Issuer will execute, and the Trustee, upon receipt of an Officers’ Certificate for the authentication and delivery of definitive Securities of
such series, will authenticate and deliver, Securities of such series in definitive registered form, in any authorized denominations, in an aggregate principal amount equal to the principal amount of the Global Security or Securities representing
the Securities of such series, in exchange for such Global Security or Securities. 
 The Issuer may at any time and in its sole discretion
determine that the Securities of any series issued in the form of one or more Global Securities shall no longer be represented by a Global Security or Securities. In such event the Issuer will execute, and the Trustee, upon receipt of an
Officers’ Certificate for the authentication and delivery of definitive Securities of such series, will authenticate and deliver, Securities of such series in definitive registered form, in any authorized denominations, in an aggregate
principal amount equal to the principal amount of the Global Security or Securities representing such series, in exchange for such Global Security or Securities. 
 The Depositary for such Global Security may surrender such Global Security in exchange in whole or in part for Securities of the same series in definitive registered form on such terms as are acceptable to the Issuer
and such Depositary. Thereupon, the Issuer shall execute, and the Trustee shall authenticate and deliver, without service charge, 
 (i) to the Person specified by such Depositary a new Security or Securities of the same series, of any authorized denominations as requested by such Person, in an aggregate principal amount equal to and in exchange for such Person’s
beneficial interest in the Global Security; and 
  

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 (ii) to such Depositary a new Global Security in a denomination equal to the difference,
if any, between the principal amount of the surrendered Global Security and the aggregate principal amount of Securities authenticated and delivered pursuant to clause (i) above. 
 Upon the exchange of a Global Security for Securities in definitive registered form, in authorized denominations, such Global Security shall be cancelled
by the Trustee. Securities in definitive registered form issued in exchange for a Global Security pursuant to this Section 2.08 shall be registered in such names and in such authorized denominations as the Depositary for such Global Security,
pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such Securities to or as directed by the Persons in whose names such Securities are so registered. 
 All Securities issued upon any transfer or exchange of Securities shall be valid obligations of the Issuer, evidencing the same debt, and entitled to the
same benefits under this Indenture, as the Securities surrendered upon such transfer or exchange. 
 Section 2.09. Mutilated, Defaced,
Destroyed, Lost and Stolen Securities. In case any temporary or definitive Security shall become mutilated, defaced or be destroyed, lost or stolen, the Issuer in its discretion may execute, and upon the written request of any officer of the
Issuer, the Trustee shall authenticate and deliver a new Security of the same series, maturity date, interest rate and original issue date, bearing a number or other distinguishing symbol not contemporaneously outstanding, in exchange and
substitution for the mutilated or defaced Security, or in lieu of and substitution for the Security so destroyed, lost or stolen. In every case the applicant for a substitute Security shall furnish to the Issuer and to the Trustee and any agent of
the Issuer or the Trustee such security or indemnity as may be required by them to indemnify and defend and to save each of them harmless and, in every case of destruction, loss or theft, evidence to their satisfaction of the destruction, loss or
theft of such Security and of the ownership thereof and in the case of mutilation or defacement shall surrender the Security to the Trustee. 
 Upon the issuance of any substitute Security, the Issuer may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee) connected therewith. In case any Security which has matured or is about to mature or has been called for redemption in full, or is being 

  

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surrendered for conversion in full, shall become mutilated or defaced or be destroyed, lost or stolen, the Issuer may, instead of issuing a substitute
Security (with the Holder’s consent, in the case of convertible Securities), pay or authorize the payment of the same or convert, or authorize conversion of the same (without surrender thereof except in the case of a mutilated or defaced
Security), if the applicant for such payment shall furnish to the Issuer and to the Trustee and any agent of the Issuer or the Trustee such security or indemnity as any of them may require to save each of them harmless, and, in every case of
destruction, loss or theft, the applicant shall also furnish to the Issuer and the Trustee and any agent of the Issuer or the Trustee evidence to their satisfaction of the destruction, loss or theft of such Security and of the ownership thereof.

 Every substitute Security of any series issued pursuant to the provisions of this Section by virtue of the fact that any such Security is
destroyed, lost or stolen shall constitute an additional contractual obligation of the Issuer, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone and shall be entitled to all the benefits of (but shall
be subject to all the limitations of rights set forth in) this Indenture equally and proportionately with any and all other Securities of such series duly authenticated and delivered hereunder. All Securities shall be held and owned upon the express
condition that, to the extent permitted by law, the foregoing provisions are exclusive with respect to the replacement or payment or conversion of mutilated, defaced or destroyed, lost or stolen Securities and shall preclude any and all other rights
or remedies notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement or payment of negotiable instruments or other securities without their surrender. 
 Section 2.10. Cancellation of Securities; Destruction Thereof. All Securities surrendered for exchange for Securities of the same series or for
payment, redemption, registration of transfer, conversion or for credit against any payment in respect of a sinking or analogous fund, if surrendered to the Issuer or any agent of the Issuer or the Trustee, shall be delivered to the Trustee for
cancellation or, if surrendered to the Trustee, shall be cancelled by it; and no Securities shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Indenture. The Trustee shall dispose of cancelled Securities
held by it and deliver a certificate of disposition to the Issuer. If the Issuer shall acquire any of the Securities, such acquisition shall not operate as a redemption or satisfaction of the Debt represented by such Securities unless and until the
same are delivered to the Trustee for cancellation. 
 Section 2.11. Temporary Securities. Pending the preparation of definitive
Securities for any series, the Issuer may execute and the Trustee shall authenticate and deliver temporary Securities for such series (printed, lithographed, typewritten or otherwise reproduced, in each case in form satisfactory to the Trustee).
Temporary Securities of any series shall be issuable in any authorized 

  

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denomination, and substantially in the form of the definitive Securities of such series but with such omissions, insertions and variations as may be
appropriate for temporary Securities, all as may be determined by the Issuer with the concurrence of the Trustee as evidenced by the execution and authentication thereof. Temporary Securities may contain such reference to any provisions of this
Indenture as may be appropriate. Every temporary Security shall be executed by the Issuer and be authenticated by the Trustee upon the same conditions and in substantially the same manner, and with like effect, as the definitive Securities. Without
unreasonable delay the Issuer shall execute and shall furnish definitive Securities of such series and thereupon temporary Securities of such series may be surrendered in exchange therefor without charge at each office or agency to be maintained by
the Issuer for that purpose pursuant to Section 3.02 and the Trustee shall authenticate and deliver in exchange for such temporary Securities of such series an equal aggregate principal amount of definitive Securities of the same series having
authorized denominations. Until so exchanged, the temporary Securities of any series shall be entitled to the same benefits under this Indenture as definitive Securities of such series, unless the benefits of the temporary Securities are limited
pursuant to Section 2.03. 
 ARTICLE 3 
 COVENANTS OF THE ISSUER 
 Section 3.01.
Payment of Principal and Interest. The Issuer covenants and agrees for the benefit of each series of Securities that it will duly and punctually pay or cause to be paid the principal of, and interest on, each of the Securities of such series
(together with any additional amounts payable pursuant to the terms of such Securities) at the place or places, at the respective times and in the manner provided in such Securities and in this Indenture. The interest on Securities (together with
any additional amounts payable pursuant to the terms of such Securities) shall be payable only to or upon the written order of the Holders thereof and at the option of the Issuer may be paid by mailing checks for such interest payable to or upon the
written order of such Holders at their last addresses as they appear on the Security register of the Issuer. 
 Section 3.02. Offices for
Payments, Etc. The Issuer will maintain (i) in the Borough of Manhattan, The City of New York, an agency where the Securities of each series may be presented for payment, an agency where the Securities of each series may be presented for
exchange and conversion, if applicable, as provided in this Indenture and an agency where the Securities of each series may be presented for registration of transfer as in this Indenture provided and (ii) such further agencies in such places as
may be determined for the Securities of such series pursuant to Section 2.03. 
  

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 The Issuer will maintain in the Borough of Manhattan, The City of New York, an agency where notices and
demands to or upon the Issuer in respect of the Securities of any series or this Indenture may be served. 
 The Issuer will give to the
Trustee written notice of the location of each such agency and of any change of location thereof. In case the Issuer shall fail to maintain any agency required by this Section to be located in the Borough of Manhattan, The City of New York, or shall
fail to give such notice of the location or of any change in the location of any of the above agencies, presentations and demands may be made and notices may be served at the Corporate Trust Office of the Trustee. 
 The Issuer may from time to time designate one or more additional agencies where the Securities of a series may be presented for payment, where the
Securities of that series may be presented for exchange or conversion, if applicable, as provided in this Indenture and pursuant to Section 2.03 and where the Securities of that series may be presented for registration of transfer as in this
Indenture provided, and the Issuer may from time to time rescind any such designation, as the Issuer may deem desirable or expedient; provided, however, that no such designation or rescission shall in any manner relieve the Issuer of
its obligation to maintain the agencies provided for in this Section. The Issuer will give to the Trustee prompt written notice of any such designation or rescission thereof. 
 Section 3.03. Appointment to Fill a Vacancy in Office of Trustee. The Issuer, whenever necessary to avoid or fill a vacancy in the office of
Trustee, will appoint, in the manner provided in Section 6.10, a Trustee, so that there shall at all times be a Trustee with respect to each series of Securities hereunder. 
 Section 3.04. Paying Agents. Whenever the Issuer shall appoint a paying agent other than the Trustee with respect to the Securities of any series,
it will cause such paying agent to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section, 
 (a) that it will hold all sums received by it as such agent for the payment of the principal of or interest on the Securities of such series (whether
such sums have been paid to it by the Issuer or by any other obligor on the Securities of such series) in trust for the benefit of the Holders of the Securities of such series or of the Trustee, 
 (b) that it will give the Trustee notice of any failure by the Issuer (or by any other obligor on the Securities of such series) to make any payment of
the principal of or interest on the Securities of such series when the same shall be due and payable, and 
  

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 (c) that at any time during the continuance of any such failure, upon the written request of the Trustee,
it will forthwith pay to the Trustee all sums so held in trust by such paying agent. 
 The Issuer will, on or prior to each due date of the
principal of or interest on the Securities of such series, deposit with the paying agent a sum sufficient to pay such principal or interest so becoming due, and (unless such paying agent is the Trustee) the Issuer will promptly notify the Trustee of
any failure to take such action. 
 If the Issuer shall act as its own paying agent with respect to the Securities of any series, it will, on
or before each due date of the principal of or interest on the Securities of such series, set aside, segregate and hold in trust for the benefit of the Holders of the Securities of such series a sum sufficient to pay such principal or interest so
becoming due. The Issuer will promptly notify the Trustee of any failure to take such action. 
 Anything in this Section to the contrary
notwithstanding, but subject to Section 10.01, the Issuer may at any time, for the purpose of obtaining a satisfaction and discharge with respect to one or more or all series of Securities hereunder, or for any other reason, pay or cause to be
paid to the Trustee all sums held in trust for any such series by the Issuer or any paying agent hereunder, as required by this Section, such sums to be held by the Trustee upon the trusts herein contained. 
 Anything in this Section to the contrary notwithstanding, the agreement to hold sums in trust as provided in this Section is subject to the provisions of
Sections 10.03 and 10.04. 
 Section 3.05. Written Statement to Trustee. So long as any Securities are Outstanding hereunder, the
Issuer will deliver to the Trustee on or before April 30 in each year (beginning in the year following the first issuance of Securities pursuant to this Indenture) a written statement covering the previous calendar year, signed by two of its
officers (which need not comply with Section 11.05), stating that in the course of the performance of their duties as officers of the Issuer they would normally have knowledge of any default by the Issuer in the performance or fulfillment of
any covenant, agreement or condition contained in this Indenture, stating whether or not they have knowledge of any such default and, if so, specifying each such default of which the signers have knowledge and the nature thereof. 
 Section 3.06. Limitation on Liens. The following provisions shall apply to the Securities of each series unless specifically otherwise provided in
a Board Resolution, Officers’ Certificate or indenture supplemental hereto as provided pursuant to Section 2.03. 
  

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 (a) The Issuer will not issue or assume any Debt secured by any mortgage, pledge, lien or other
encumbrance (mortgages, pledges, liens and other encumbrances being hereinafter called “Mortgage” or “Mortgages”) upon any Principal Manufacturing Property (whether such Principal Manufacturing Property is now owned
or hereafter acquired) without in any such case effectively providing, concurrently with the issuance or assumption of such Debt, that the Securities (together with, if the Issuer shall so determine, any other Debt of the Issuer ranking equally with
the Securities and then existing or thereafter created) shall be secured equally and ratably with such Debt until such time as such Debt is no longer secured by such Mortgage; provided, that the foregoing restrictions shall not apply to:

 (i) Mortgages existing as of the closing date of the offering of the relevant series of Securities; 
 (ii) Mortgages on any Principal Manufacturing Property hereafter acquired by the Issuer prior to, at the time of, or within 120 days after
the latest of the acquisition, completion of construction (including any improvements on an existing property) or commencement of commercial operation of such property, to secure or provide for the payment or financing of all or any part of the
purchase price thereof or construction of fixed improvements thereon, or, in addition to assumptions in transactions contemplated by subparagraph (iii) below, the assumption of any Mortgage upon any such property hereafter acquired existing at
the time of such acquisition, or the acquisition of any such property subject to any Mortgage without the assumption thereof; provided, that the aggregate principal amount of Debt secured by any such Mortgage so issued, assumed or existing
shall not exceed 100% of the cost of such Principal Manufacturing Property to the corporation acquiring the same or of the fair value thereof (as determined by resolution adopted by the Board of Directors) at the time of such acquisition, whichever
is less, and provided, further, that in the case of any such acquisition, construction or improvement the Mortgage shall not apply to any property theretofore owned by the Issuer, other than, in the case of any such construction or improvement, any
theretofore unimproved real property on which the property so constructed, or the improvement, is located; 
 (iii) the
assumption of any Mortgage on any Principal Manufacturing Property of an entity which is merged into or consolidated with the Issuer or substantially all the assets of which are acquired by the Issuer; 
  

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 (iv) Mortgages on any Principal Manufacturing Property of the Issuer in favor of the
United States of America or any State thereof, or any department, agency or instrumentality or political subdivision of the United States of America or any State thereof, or in favor of any other country, or any political subdivision thereof, to
secure partial, progress, advance or other payments pursuant to any contract or statute or to secure any Debt incurred or guaranteed for the purpose of financing all or any part of the cost of acquiring, constructing or improving the property
subject to such Mortgages (including Mortgages incurred in connection with pollution control, industrial revenue, Title XI maritime financings or similar financings); 
 (v) Mortgages for taxes, assessments or other governmental charges not yet due or payable or subject to penalties for non-payment or which
the Issuer is contesting in good faith by appropriate proceedings; 
 (vi) Mortgages to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business; 
 (vii) Mortgages imposed by law, such as carrier’s, warehousemen’s and mechanic’s liens and other similar liens, in each
case for sums not yet overdue by more than 30 calendar days or being contested in good faith by appropriate proceedings, or other liens arising out of judgments or awards against the Issuer with respect to which the Issuer shall then be proceeding
with an appeal or other proceedings for review, and liens arising solely by virtue of any statutory or common law provision relating to banker’s liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds
maintained with a creditor depository institution; and 
 (viii) any extension, renewal or replacement (or successive
extensions, renewals or replacements) in whole or in part, of any Mortgage referred to in the foregoing clauses (i) through (vii); provided, however, that the principal amount of Debt so secured thereby shall not exceed the
principal amount of Debt so secured at the time of such extension, renewal or replacement, and that such extension, renewal or replacement shall be limited to all or a part of the property which secured the Mortgage so extended, renewed or replaced
(plus improvements and construction on such property). 
 (b) Notwithstanding the provisions of subsection (a) of this
Section 3.06, the Issuer or any one or more Subsidiaries may issue or assume Debt secured by a Mortgage in addition to those permitted by subsection (a) of this Section 3.06 and renew, extend or replace such Mortgages;
provided, that at the time of such creation, assumption, renewal, extension or replacement, and after giving effect thereto, Exempted Debt does not exceed 15% of Consolidated Net Tangible Assets. 
  

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 Section 3.07. Limitation on Sale and Leaseback. The following provisions shall apply to the
Securities of each series unless specifically otherwise provided in a Board Resolution, Officers’ Certificate or indenture supplemental hereto provided pursuant to Section 2.03. 
 (a) The Issuer will not enter into any arrangement with any Person (other than any then-existing subsidiary) providing for the leasing by the Issuer of
any Principal Manufacturing Property, whether such Principal Manufacturing Property is now owned or hereafter acquired, except for temporary leases for a term, including renewals at the option of the lessee, of not more than three years, which
property has been or is to be sold or transferred by the Issuer to such Person with the intention of taking back a lease of such property (a “sale and leaseback transaction”) unless the proceeds of such sale or transfer shall be at
least equal to the fair value of such property as determined by resolution adopted by the Board of Directors and either: 
 (i) the Issuer would be entitled, pursuant to the provisions of Section 3.06, to issue or assume Debt secured by a Mortgage on such property at least equal in amount to the Attributable Debt in respect of such sale and leaseback
transaction without equally and ratably securing the Securities; provided, however, that from and after the date on which such sale and leaseback transaction becomes effective the Attributable Debt in respect of such arrangement shall
be deemed for all purposes under Section 3.06 and this Section 3.07 to be Debt subject to the provisions of Section 3.06; or 
 (ii) within a period commencing 12 months prior to the consummation of such sale and leaseback transaction and ending 12 months after the consummation of such sale and leaseback transaction, the Issuer has expended,
or will expend, for Principal Manufacturing Property an amount equal to (A) the proceeds of such sale and leaseback transaction and the Issuer elects to designate such amount as a credit against such sale and leaseback transaction or (B) a
part of the proceeds of such sale and leaseback transaction and the Issuer elects to designate such amount as a credit against such sale and leaseback transaction and treats an amount equal to the remainder of the proceeds as provided in clause
(iii) hereof; or 
 (iii) such sale or transfer does not come within the exceptions provided by clause (i) hereof
and the Issuer does not make the election permitted by clause (ii) hereof or makes such election only as to part of such proceeds, in either of which events the Issuer will (A) within 120 days after such sale and leaseback transaction,
apply an amount equal to 

  

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the Attributable Debt in respect of such sale and leaseback transaction (less an amount equal to the amount, if any, elected under clause (ii) hereof)
to the retirement (other than any mandatory retirement or by way of payment at maturity) of Funded Debt of the Issuer, or (iv) consider an amount equal to the Attributable Debt in respect of such sale and leaseback transaction (less an amount
equal to the amount, if any, elected under clause (ii) hereof) to be Attributable Debt for purposes of the calculation of Exempted Debt; provided, that, after giving effect thereto, Exempted Debt does not exceed 15% of Consolidated Net
Tangible Assets. 
 For the purpose of this Section 3.07 the term “Attributable Debt” shall mean, at the time of
determination, the lesser of (i) the fair market value of the assets subject to such transaction, as determined by our Board of Directors, and (2) the present value (discounted at the interest rate implicit in the lease or, if it is not
practicable to determine such rate, then at the Issuer’s incremental borrowing rate determined in accordance with generally accepted accounting principles) of the obligation of the lessee for net rental payments during the remaining term of any
lease included in the sale and leaseback transaction (including any period for which such lease has been extended or may, at the option of the lessor, be extended). The term “net rental payments” under any lease for any period shall
mean the sum of the rental and other payments required to be paid by such lessee thereunder, not including, however, amounts payable by the lessee for maintenance and repairs, insurance, taxes, assessments and similar charges and for contingent
rents (such as those based on sales). 
 (b) Notwithstanding the provisions of paragraph (a) of this Section 3.07, the Issuer may
enter into sale and leaseback transactions in addition to those permitted by paragraph (a) of this Section 3.07 and without any obligation to make expenditures for Principal Manufacturing Property or to retire any Debt; provided,
that at the time of entering into such sale and leaseback transactions and after giving effect thereto, Exempted Debt does not exceed 15% of Consolidated Net Tangible Assets. 
 ARTICLE 4 
 SECURITYHOLDERS LISTS AND
REPORTS BY THE ISSUER AND THE TRUSTEE 
 Section 4.01. Issuer to Furnish Trustee Information as to Names and Addresses of Securityholders. The Issuer covenants and agrees that it will furnish or cause to be furnished to the Trustee a list in such form as the Trustee may
reasonably require of the names and addresses of the Holders of the Securities of each series pursuant to Section 312 of the Trust Indenture Act of 1939: 
 (a) semiannually and not more than 15 days after each record date for the payment of interest on such Securities, as hereinabove specified, as of such record date and on dates to be determined pursuant to
Section 2.03 for non-interest bearing Securities in each year, and 
  

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 (b) at such other times as the Trustee may request in writing, within 30 days after receipt by the Issuer
of any such request as of a date not more than 15 days prior to the time such information is furnished, provided, that, if and so long as the Trustee shall be the Security registrar for such series, such list shall not be required to be
furnished. 
 Section 4.02. Reports by the Issuer. The Issuer covenants to file with the Trustee, within 15 days after the Issuer
files the same with the Commission, copies of the annual reports and of the information, documents, and other reports which the Issuer may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934. The filing of such reports, information and documents with the Commission on EDGAR (or any successor system thereto) shall be deemed to constitute filing of such reports, information and documents with the Trustee, provided
however that the Issuer shall provide a physical or electronic copy thereof to the Trustee promptly following a request therefor from the Trustee. 
 Section 4.03. Reports by the Trustee. Any Trustee’s report required under Section 313(a) of the Trust Indenture Act of 1939 shall be transmitted on or before [May 1] in each year following the date hereof, so long as any
Securities are Outstanding hereunder, and shall be dated as of a date convenient to the Trustee but no more than 60 nor less than 45 days prior thereto. 
 ARTICLE 5 
 REMEDIES OF THE TRUSTEE
AND SECURITYHOLDERS ON EVENT OF DEFAULT 
 Section
5.01. Event of Default Defined; Acceleration of Maturity; Waiver of Default. “Event of Default”, with respect to Securities of any series wherever used herein, means each one of the following events which shall have occurred
and be continuing (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body): 
 (a) default in the payment of any installment of interest upon any of the Securities of such series
as and when the same shall become due and payable, and continuance of such default for a period of 60 days; or 
  

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 (b) default in the payment of all or any part of the principal on any of the Securities of such series as
and when the same shall become due and payable either at maturity, upon redemption, by declaration or otherwise, and the continuance of such default for five days; or 
 (c) default in the performance, or breach, of any covenant or warranty of the Issuer in respect of the Securities of such series (other than a covenant or warranty in respect of the Securities of such series a default
in the performance or breach of which is elsewhere in this Section specifically dealt with), and continuance of such default or breach for a period of 90 days after there has been given, by registered or certified mail, to the Issuer by the Trustee
or to the Issuer and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities of all series affected thereby, a written notice specifying such default or breach and requiring it to be remedied and stating that
such notice is a “Notice of Default” hereunder; or 
 (d) a court having jurisdiction in the premises shall enter a decree
or order for relief in respect of the Issuer in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee or sequestrator (or
similar official) of the Issuer or for all or substantially all of its property or ordering the winding up or liquidation of its affairs, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or

 (e) the Issuer shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or consent to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee or sequestrator (or similar official) of
the Issuer or for any substantial part of its property, or make any general assignment for the benefit of creditors; or 
 (f) any other
Event of Default provided for in such series of Securities. 
 (g) Notwithstanding any other provisions in this Indenture, if so elected by
the Issuer, the sole remedy for an Event of Default relating to the failure to comply with Section 4.02 of this Indenture or Section 314(a)(1) of the Trust Indenture Act of 1939, will for the Additional Interest Period (as defined below)
consist exclusively of the right to receive additional interest (the “Reporting Interest”) on the Securities accruing at an annual rate equal to 0.25% of the principal amount of the Securities. The Reporting Interest will accrue on
all outstanding Securities from and including the date on which an Event of Default relating to a failure to comply with the reporting obligations in the Indenture first occurs to, but not including, the date on which such Event of Default is cured
or waived (the “Additional Interest Period”). The foregoing 

  

 26 

 
provisions in this Section 5.01(g) will not affect the rights of Securityholders in the event of the occurrence of any other Event of Default. In
the event the Issuer does not elect to pay the Reporting Interest upon an Event of Default in accordance with this Section 5.01(g), the Securities will be subject to acceleration as provided below. In order to elect to pay the Reporting
Interest as the sole remedy during the Additional Interest Period, the Issuer must notify all holders of Securities and the Trustee and paying agent of such election on or before the close of business on the date on which such Event of Default
occurs. 
 If an Event of Default described in clauses (a), (b), (c) or (f) occurs and is continuing, then, and in each and every
such case, unless the principal of all of the Securities of such series shall have already become due and payable, either the Trustee or the Holders of not less than 25% in aggregate principal amount of the Securities of such series then Outstanding
hereunder (each such series voting as a separate class) by notice in writing to the Issuer (and to the Trustee if given by Securityholders), may declare the entire principal (or, if the Securities of such series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the terms of such series) of all Securities of such series and the interest accrued thereon, if any, to be due and payable immediately, and upon any such declaration the same
shall become immediately due and payable. If an Event of Default described in clause (d) or (e) occurs and is continuing, then and in each and every such case, unless the principal of all the Securities shall have already become due and
payable, either the Trustee or the Holders of not less than 25% in aggregate principal amount of all the Securities then Outstanding hereunder (treated as one class), by notice in writing to the Issuer (and to the Trustee if given by
Securityholders), may declare the entire principal (or, if any Securities are Original Issue Discount Securities, such portion of the principal as may be specified in the terms thereof) of all the Securities then Outstanding and interest accrued
thereon, if any, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable. 
 The
foregoing provisions, however, are subject to the condition that if, at any time after the principal (or, if the Securities are Original Issue Discount Securities, such portion of the principal as may be specified in the terms thereof) of the
Securities of any series (or of all the Securities, as the case may be) shall have been so declared due and payable, and before any judgment or decree for the payment of the moneys due shall have been obtained or entered as hereinafter provided, the
Issuer shall pay or shall deposit with the Trustee a sum sufficient to pay all matured installments of interest upon all the Securities of such series (or of all the Securities, as the case may be) and the principal of any and all Securities of such
series (or of all the Securities, as the case may be) which shall have become due otherwise than by acceleration (with interest upon such principal and, to the extent that payment of such interest is enforceable under applicable law, on overdue
installments of interest, at the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) specified in the 

  

 27 

 
Securities of such series, (or at the respective rates of interest or Yields to Maturity of all the Securities, as the case may be) to the date of such
payment or deposit) and such amount as shall be sufficient to cover reasonable compensation to the Trustee, its agents, attorneys and counsel, and all other expenses and liabilities incurred, and all advances made, by the Trustee except as a result
of negligence or bad faith, and if any and all Events of Default under the Indenture, other than the non-payment of the principal of Securities which shall have become due by acceleration, shall have been cured, waived or otherwise remedied as
provided herein—then and in every such case the Holders of a majority in aggregate principal amount of all the Securities of such series, each series voting as a separate class, (or of all the Securities, as the case may be, voting as a single
class) then Outstanding, by written notice to the Issuer and to the Trustee, may waive all defaults with respect to such series (or with respect to all the Securities, as the case may be) and rescind and annul such declaration and its consequences,
but no such waiver or rescission and annulment shall extend to or shall affect any subsequent default or shall impair any right consequent thereon. 
 For all purposes under this Indenture, if a portion of the principal of any Original Issue Discount Securities shall have been accelerated and declared due and payable pursuant to the provisions hereof, then, from and after such
declaration, unless such declaration has been rescinded and annulled, the principal amount of such Original Issue Discount Securities shall be deemed, for all purposes hereunder, to be such portion of the principal thereof as shall be due and
payable as a result of such acceleration, and payment of such portion of the principal thereof as shall be due and payable as a result of such acceleration, together with interest, if any, thereon and all other amounts owing thereunder, shall
constitute payment in full of such Original Issue Discount Securities. 
 Section 5.02. Collection of Debt by Trustee; Trustee May Prove
Debt. The Issuer covenants that (a) in case default shall be made in the payment of any installment of interest on any of the Securities of any series when such interest shall have become due and payable, and such default shall have
continued for a period of 30 days or (b) in case default shall be made in the payment of all or any part of the principal of any of the Securities of any series when the same shall have become due and payable, and such default shall have
continued for a period of five days, whether upon maturity of the Securities of such series or upon any redemption or by declaration or otherwise—then, upon demand of the Trustee, the Issuer will pay to the Trustee for the benefit of the
Holders of the Securities of such series the whole amount that then shall have become due and payable on all Securities of such series for principal or interest, as the case may be (with interest to the date of such payment upon the overdue
principal and, to the extent that payment of such interest is enforceable under applicable law, on overdue installments of interest at the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities)
specified in the Securities of such series); and, in addition thereto, such further amount as shall be sufficient to 

  

 28 

 
cover the costs and expenses of collection, including reasonable compensation to the Trustee and each predecessor trustee, their respective agents, attorneys
and counsel, and any expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor trustee except as a result of its negligence or bad faith. 
 In case the Issuer shall fail forthwith to pay such amounts upon such demand, the Trustee, in its own name and as trustee of an express trust, shall be
entitled and empowered to institute any action or proceedings at law or in equity for the collection of the sums so due and unpaid, and may prosecute any such action or proceedings to judgment or final decree, and may enforce any such judgment or
final decree against the Issuer or other obligor upon such Securities and collect in the manner provided by law out of the property of the Issuer or other obligor upon such Securities, wherever situated, the moneys adjudged or decreed to be payable.

 In case there shall be pending proceedings relative to the Issuer or any other obligor upon the Securities under Title 11 of the United
States Code or any other applicable Federal or state bankruptcy, insolvency or other similar law, or in case a receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for
or taken possession of the Issuer or its property or such other obligor or its property, or in case of any other comparable judicial proceedings relative to the Issuer or other obligor upon the Securities of any series, or to the creditors or
property of the Issuer or such other obligor, the Trustee, irrespective of whether the principal of any Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have
made any demand pursuant to the provisions of this Section, shall be entitled and empowered, by intervention in such proceedings or otherwise: 
 (i) to file and prove a claim or claims for the whole amount of principal and interest (or, if the Securities of any series are Original Issue Discount Securities, such portion of the principal amount as may be
specified in the terms of such series) owing and unpaid in respect of the Securities of any series, and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for
reasonable compensation to the Trustee and each predecessor trustee, and their respective agents, attorneys and counsel, and for reimbursement of all expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor
trustee, except as a result of negligence or bad faith) and of the Securityholders allowed in any judicial proceedings relative to the Issuer or other obligor upon the Securities of any series, or to the creditors or property of the Issuer or such
other obligor, 
  

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 (ii) unless prohibited by applicable law and regulations, to vote on behalf of the
Holders of the Securities of any series in any election of a trustee or a standby trustee in arrangement, reorganization, liquidation or other bankruptcy or insolvency proceedings or person performing similar functions in comparable proceedings, and

 (iii) to collect and receive any moneys or other property payable or deliverable on any such claims, and to distribute all
amounts received with respect to the claims of the Securityholders and of the Trustee on their behalf; and any trustee, receiver, or liquidator, custodian or other similar official is hereby authorized by each of the Securityholders to make payments
to the Trustee, and, in the event that the Trustee shall consent to the making of payments directly to the Securityholders, to pay to the Trustee such amounts as shall be sufficient to cover reasonable compensation to the Trustee, each predecessor
trustee and their respective agents, attorneys and counsel, and all other expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor trustee except as a result of negligence or bad faith and all other amounts due
to the Trustee or any predecessor trustee pursuant to Section 6.06. 
 Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or vote for or accept or adopt on behalf of any Securityholder any plan of reorganization, arrangement, adjustment or composition affecting the Securities of any series or the rights of any Holder thereof, or to authorize
the Trustee to vote in respect of the claim of any Securityholder in any such proceeding except, as aforesaid, to vote for the election of a trustee in bankruptcy or similar person. 
 All rights of action and of asserting claims under this Indenture, or under any of the Securities of any series, may be enforced by the Trustee without
the possession of any of the Securities of such series or the production thereof on any trial or other proceedings relative thereto, and any such action or proceedings instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment, subject to the payment of the expenses, disbursements and compensation of the Trustee, each predecessor trustee and their respective agents and attorneys, shall be for the ratable benefit of the Holders
of the Securities in respect of which such action was taken. 
 In any proceedings brought by the Trustee (and also any proceedings involving
the interpretation of any provision of this Indenture to which the Trustee shall be a party), the Trustee shall be held to represent all the Holders of the Securities in respect to which such action was taken, and it shall not be necessary to make
any Holders of such Securities parties to any such proceedings. 
  

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 Section 5.03. Application of Proceeds. Any moneys collected by the Trustee pursuant to this
Article in respect of any series shall be applied in the following order at the date or dates fixed by the Trustee and, in case of the distribution of such moneys on account of principal or interest, upon presentation of the several Securities in
respect of which monies have been collected and stamping (or otherwise noting) thereon the payment, or issuing Securities of such series in reduced principal amounts in exchange for the presented Securities of like series if only partially paid, or
upon surrender thereof if fully paid: 
 FIRST: To the payment of all amounts due to the Trustee or any predecessor trustee
pursuant to Section 6.06; 
 SECOND: In case the principal of the Securities of such series in respect of which moneys
have been collected shall not have become and be then due and payable, to the payment of interest on the Securities of such series in default in the order of the maturity of the installments of such interest, with interest (to the extent that such
interest has been collected by the Trustee) upon the overdue installments of interest at the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) specified in such Securities, such payments to be
made ratably to the Persons entitled thereto, without discrimination or preference; 
 THIRD: In case the principal of the
Securities of such series in respect of which moneys have been collected shall have become and shall be then due and payable, to the payment of the whole amount then owing and unpaid upon all the Securities of such series for principal and interest,
with interest upon the overdue principal, and (to the extent that such interest has been collected by the Trustee) upon overdue installments of interest at the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue
Discount Securities) specified in the Securities of such series; and in case such moneys shall be insufficient to pay in full the whole amount so due and unpaid upon the Securities of such series, then to the payment of such principal and interest
or Yield to Maturity, without preference or priority of principal over interest or Yield to Maturity, or of interest or Yield to Maturity over principal, or of any installment of interest over any other installment of interest, or of any Security of
such series over any other Security of such series, ratably to the aggregate of such principal and accrued and unpaid interest or Yield to Maturity; and 
 FOURTH: To the payment of the remainder, if any, to the Issuer or any other Person lawfully entitled thereto. 
  

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 Section 5.04. Suits for Enforcement. In case an Event of Default has occurred, has not been waived
and is continuing, the Trustee may in its discretion proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights,
either at law or in equity or in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement contained in this Indenture or in aid of the exercise of any power granted in this Indenture or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law. 
 Section 5.05. Restoration of Rights on Abandonment of
Proceedings. In case the Trustee shall have proceeded to enforce any right under this Indenture and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely to the Trustee, then and in
every such case the Issuer and the Trustee shall be restored respectively to their former positions and rights hereunder, and all rights, remedies and powers of the Issuer, the Trustee and the Securityholders shall continue as though no such
proceedings had been taken. 
 Section 5.06. Limitations on Suits by Securityholders. No Holder of any Security of any series shall
have any right by virtue or by availing of any provision of this Indenture to institute any action or proceeding at law or in equity or in bankruptcy or otherwise upon or under or with respect to this Indenture, or for the appointment of a trustee,
receiver, liquidator, custodian or other similar official or for any other remedy hereunder, unless such Holder previously shall have given to the Trustee written notice of default and of the continuance thereof, as hereinbefore provided, and unless
also the Holders of not less than 25% in aggregate principal amount of the Securities of such series then Outstanding shall have made written request upon the Trustee to institute such action or proceedings in its own name as trustee hereunder and
shall have offered to the Trustee such reasonable indemnity as it may require against the costs, expenses and liabilities to be incurred therein or thereby and the Trustee for 60 days after its receipt of such notice, request and offer of indemnity
shall have failed to institute any such action or proceeding and no direction inconsistent with such written request shall have been given to the Trustee pursuant to Section 5.09; it being understood and intended, and being expressly covenanted
by the Holder of every Security with every other Holder and the Trustee, that no one or more Holders of Securities of any series shall have any right in any manner whatever by virtue or by availing of any provision of this Indenture to affect,
disturb or prejudice the rights of any other such Holder of Securities, or to obtain or seek to obtain priority over or preference to any other such Holder or to enforce any right under this Indenture, except in the manner herein provided and for
the equal, ratable and common benefit of all Holders of Securities of the applicable series. For the protection and enforcement of the provisions of this Section, each and every Securityholder and the Trustee shall be entitled to such relief as can
be given either at law or in equity. 
  

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 Section 5.07. Unconditional Right of Securityholders to Institute Certain Suits. Notwithstanding
any other provision in this Indenture and any provision of any Security, the right of any Holder of any Security to receive payment of the principal of and interest on such Security on or after the respective due dates expressed in such Security, or
to institute suit for the enforcement of any such payment on or after such respective dates, or for the enforcement of such conversion right, shall not be impaired or affected without the consent of such Holder. 
 Section 5.08. Powers and Remedies Cumulative; Delay or Omission Not Waiver of Default. Except as provided in Section 5.06, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders of Securities is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy. 
 No delay or omission of the Trustee or of any Holder of Securities to exercise any right or power accruing
upon any Event of Default occurring and continuing as aforesaid shall impair any such right or power or shall be construed to be a waiver of any such Event of Default or an acquiescence therein; and, subject to Section 5.06, every power and
remedy given by this Indenture or by law to the Trustee or to the Holders of Securities may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the Holders of Securities. 
 Section 5.09. Control by Holders of Securities. The Holders of a majority in aggregate principal amount of the Securities of each series affected
(with each series voting as a separate class) at the time Outstanding shall have the right to direct the time, method, and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the
Trustee with respect to the Securities of such series by this Indenture; provided, that such direction shall not be otherwise than in accordance with law and the provisions of this Indenture and provided, further, that (subject to the
provisions of Section 6.01) the Trustee shall have the right to decline to follow any such direction if the Trustee, being advised by counsel, shall determine that the action or proceeding so directed may not lawfully be taken or if the Trustee
in good faith by its board of directors, the executive committee, or a trust committee of directors or Responsible Officers of the Trustee shall determine that the action or proceedings so directed would involve the Trustee in personal liability or
if the Trustee in good faith shall so determine that the actions or forbearances specified in or pursuant to such direction would be unduly prejudicial to the interests of Holders of the Securities of all series so affected not joining in the giving
of said direction, it being understood that (subject to Section 6.01) the Trustee shall have no duty to ascertain whether or not such actions or forbearances are unduly prejudicial to such Holders. 
  

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 Nothing in this Indenture shall impair the right of the Trustee in its discretion to take any action
deemed proper by the Trustee and which is not inconsistent with such direction or directions by Securityholders. 
 Section 5.10. Waiver
of Past Defaults. Prior to the declaration of the acceleration of the maturity of the Securities of any series as provided in Section 5.01, the Holders of a majority in aggregate principal amount of the Securities of such series at the time
Outstanding may on behalf of the Holders of all the Securities of such series waive any past default or Event of Default described in clause Section 5.01(c) or Section 5.01(f) of Section 5.01 (or, in the case of an event specified in
clause Section 5.01(c) or Section 5.01(f) of Section 5.01 which relates to less than all series of Securities then Outstanding, the Holders of a majority in aggregate principal amount of the Securities then Outstanding affected
thereby (each series voting as a separate class) may waive any such default or Event of Default, or, in the case of an event specified in clause Section 5.01(c) or Section 5.01(f) (if the Event of Default under clause Section 5.01(c)
or Section 5.01(f) relates to all series of Securities then Outstanding), Section 5.01(d) or Section 5.01(e) of Section 5.01 the Holders of Securities of a majority in principal amount of all the Securities then Outstanding
(voting as one class) may waive any such default or Event of Default), and its consequences except a default in respect of a covenant or provision hereof which cannot be modified or amended without the consent of the Holder of each Security
affected. In the case of any such waiver, the Issuer, the Trustee and the Holders of the Securities of such series shall be restored to their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon. 
 Upon any such waiver, such default shall cease to exist and be deemed to have been
cured and not to have occurred, and any Event of Default arising therefrom shall be deemed to have been cured, and not to have occurred for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or Event
of Default or impair any right consequent thereon. 
 Section 5.11. Trustee to Give Notice of Default, but May Withhold in Certain
Circumstances. The Trustee shall, within 90 days after the occurrence of a default with respect to the Securities of any series, give notice of all defaults with respect to that series known to the Trustee to all Holders of Securities of such
series in the manner and to the extent provided in Section 4.03, unless in each case such defaults shall have been cured before the mailing or publication of such notice (the term “defaults” for the purpose of this Section
being hereby defined to mean any event or condition which is, or with notice or lapse of time or 

  

 34 

 
both would become, an Event of Default); provided, that, except in the case of default in the payment of the principal of or interest on any of the
Securities of such series, or in the payment of any sinking fund installment on such series, the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee, or a trust committee of
directors or trustees and/or Responsible Officers of the Trustee in good faith determines that the withholding of such notice is in the interests of the Securityholders of such series. 
 Section 5.12. Right of Court to Require Filing of Undertaking to Pay Costs. All parties to this Indenture agree, and each Holder of any Security
by his or her acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees,
against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Trustee, to any suit
instituted by any Securityholder or group of Securityholders of any series holding in the aggregate more than 10% in aggregate principal amount of the Securities of such series, or, in the case of any suit relating to or arising under clause
Section 5.01(c) or Section 5.01(f) of Section 5.01 (if the suit relates to Securities of more than one but less than all series), 10% in aggregate principal amount of Securities then Outstanding and affected thereby, or in the case of
any suit relating to or arising under Section 5.01(c) or Section 5.01(f) (if the suit under Section 5.01(c) or Section 5.01(f) relates to all the Securities then Outstanding), Section 5.01(d) or Section 5.01(e) of
Section 5.01, 10% in aggregate principal amount of all Securities then Outstanding, or to any suit instituted by any Securityholder for the enforcement of the payment of the principal of or interest on any Security on or after the due date
expressed in such Security or any date fixed for redemption or for the enforcement of a right to convert any Security in accordance with the terms thereof. 
 ARTICLE 6 
 CONCERNING THE TRUSTEE 
 Section 6.01. Duties and Responsibilities of the Trustee; During Default; Prior to Default. With respect to the Holders of any series of
Securities issued hereunder, the Trustee, prior to the occurrence of an Event of Default with respect to the Securities of a particular series and after the curing or waiving of all Events of Default which may have occurred with respect to such
series, undertakes to perform such duties and only such duties as are specifically set forth in this 

  

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Indenture. In case an Event of Default with respect to the Securities of a series has occurred (which has not been cured or waived), the Trustee shall
exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs.

 No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct, except that 
 (a) prior to the occurrence of an Event of Default with respect to the
Securities of any series and after the curing or waiving of all such Events of Default with respect to such series which may have occurred: 
 (i) the duties and obligations of the Trustee with respect to the Securities of any series shall be determined solely by the express provisions of this Indenture, and the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and 
 (ii) in the absence of bad faith on the part of the Trustee, the Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any statements, certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but, in the case of any such statements, certificates or opinions which by
any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture; 
 (b) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Responsible Officers of the Trustee, unless
it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; and 
 (c) the Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders pursuant to Section 5.09 relating to the time, method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture. 
 None of the provisions contained in this
Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers if there shall be reasonable ground for
believing that the repayment of such funds or adequate indemnity against such liability is not reasonably assured to it. 
  

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 The provisions of this Section 6.01 are in furtherance of and subject to Sections 315 and 316 of the
Trust Indenture Act of 1939. 
 Section 6.02. Certain Rights of the Trustee. In furtherance of and subject to the Trust Indenture Act
of 1939 and subject to Section 6.01: 
 (a) the Trustee may rely and shall be protected in acting or refraining from acting upon any
resolution, Officers’ Certificate or any other certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture, note, security or other paper or document believed by it to be genuine and to have been signed
or presented by the proper party or parties; 
 (b) any request, direction, order or demand of the Issuer mentioned herein shall be
sufficiently evidenced by an Officers’ Certificate (unless other evidence in respect thereof be herein specifically prescribed); and any resolution of the Board of Directors may be evidenced to the Trustee by a copy thereof certified by the
secretary or an assistant secretary of the Issuer; 
 (c) the Trustee may consult with counsel and any advice or Opinion of Counsel shall be
full and complete authorization and protection in respect of any action taken, suffered or omitted to be taken by it hereunder in good faith and in accordance with such advice or Opinion of Counsel; 
 (d) the Trustee shall be under no obligation to exercise any of the trusts or powers vested in it by this Indenture at the request, order or direction of
any of the Securityholders pursuant to the provisions of this Indenture, unless such Securityholders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred therein or
thereby; 
 (e) the Trustee shall not be liable for any action taken or omitted by it in good faith and believed by it to be authorized or
within the discretion, rights or powers conferred upon it by this Indenture; 
 (f) prior to the occurrence of an Event of Default hereunder
and after the curing or waiving of all Events of Default, the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent,
order, approval, appraisal, bond, debenture, note, security, or other paper or document unless requested in writing so to do by the Holders of not less than a majority in aggregate principal amount of the Securities of all series affected then

  

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Outstanding; provided, that, if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be incurred by it
in the making of such investigation is, in the opinion of the Trustee, not reasonably assured to the Trustee by the security afforded to it by the terms of this Indenture, the Trustee may require reasonable indemnity against such expenses or
liabilities as a condition to proceeding; the reasonable expenses of every such investigation shall be paid by the Issuer or, if paid by the Trustee or any predecessor trustee, shall be repaid by the Issuer upon demand; and 
 (g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys
not regularly in its employ and the Trustee shall not be responsible for any misconduct or negligence on the part of any such agent or attorney appointed with due care by it hereunder. 
 Section 6.03. Trustee Not Responsible for Recitals, Disposition of Securities or Application of Proceeds Thereof. The recitals contained herein
and in the Securities, except the Trustee’s certificates of authentication, shall be taken as the statements of the Issuer, and the Trustee assumes no responsibility for the correctness of the same. The Trustee makes no representation as to the
validity or sufficiency of this Indenture or of the Securities. The Trustee shall not be accountable for the use or application by the Issuer of any of the Securities or of the proceeds thereof. 
 Section 6.04. Trustee and Agents May Hold Securities; Collections, Etc. The Trustee or any agent of the Issuer or the Trustee, in its individual
or any other capacity, may become the owner or pledgee of Securities with the same rights it would have if it were not the Trustee or such agent and may otherwise deal with the Issuer and receive, collect, hold and retain collections from the Issuer
with the same rights it would have if it were not the Trustee or such agent. 
 Section 6.05. Moneys Held by Trustee. Subject to the
provisions of Section 10.04 hereof, all moneys received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be segregated from other funds except to the
extent required by mandatory provisions of law. Neither the Trustee nor any agent of the Issuer or the Trustee shall be under any liability for interest on any moneys received by it hereunder. 
 Section 6.06. Compensation and Indemnification of Trustee and Its Prior Claim. The Issuer covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, reasonable compensation (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust) and the Issuer covenants and agrees to pay or reimburse the
Trustee and each predecessor trustee upon its request for all reasonable expenses, 

  

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disbursements and advances incurred or made by or on behalf of it in accordance with any of the provisions of this Indenture (including the reasonable
compensation and the expenses and disbursements of its counsel and of all agents and other persons not regularly in its employ) except any such expense, disbursement or advance as may arise from its negligence or bad faith. The Issuer also covenants
to indemnify the Trustee and each predecessor trustee for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of
this Indenture or the trusts hereunder and its duties hereunder, including the costs and expenses of defending itself against or investigating any claim of liability in the premises. The obligations of the Issuer under this Section to compensate and
indemnify the Trustee and each predecessor trustee and to pay or reimburse the Trustee and each predecessor trustee for expenses, disbursements and advances shall constitute additional indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture. Such additional indebtedness shall be a senior claim to that of the Securities upon all property and funds held or collected by the Trustee as such, except funds held in trust for the benefit of the Holders of particular
Securities, and the Securities are hereby subordinated to such senior claim. 
 Section 6.07. Right of Trustee to Rely on Officers’
Certificate, Etc. Subject to Sections 6.01 and 6.02, whenever in the administration of the trusts of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering or omitting
any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence or bad faith on the part of the Trustee, be deemed to be conclusively proved and established by an
Officers’ Certificate delivered to the Trustee, and such certificate, in the absence of negligence or bad faith on the part of the Trustee, shall be full warrant to the Trustee for any action taken, suffered or omitted by it under the
provisions of this Indenture upon the faith thereof. 
 Section 6.08. Indentures Creating Potential Conflicting Interests for the Trustee.
No indentures are hereby specifically described for the purposes of Section 310(b)(1) of the Trust Indenture Act of 1939. 
 Section
6.09. Persons Eligible for Appointment as Trustee. The Trustee for each series of Securities hereunder shall at all times be a corporation having a combined capital and surplus of at least $50,000,000 and shall be eligible in accordance with
the provisions of Section 310(a) of the Trust Indenture Act of 1939. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of a Federal, State or District of Columbia supervising or
examining authority, then, for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. 
  

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 Section 6.10. Resignation and Removal; Appointment of Successor Trustee. (a) The
Trustee, or any trustee or trustees hereafter appointed, may at any time resign with respect to one or more or all series of Securities by giving written notice of resignation to the Issuer and by mailing notice of such resignation to the Holders of
then Outstanding Securities of each series affected at their addresses as they shall appear on the Security register. Upon receiving such notice of resignation, the Issuer shall promptly appoint a successor trustee or trustees with respect to the
applicable series by written instrument in duplicate, executed by authority of the Board of Directors, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee or trustees. If no successor
trustee shall have been so appointed with respect to any series and have accepted appointment within 30 days after the mailing of such notice of resignation, the resigning trustee may petition any court of competent jurisdiction for the appointment
of a successor trustee, or any Securityholder who has been a bona fide Holder of a Security or Securities of the applicable series for at least six months may, subject to the provisions of Section 5.12, on behalf of himself or herself and all
others similarly situated, petition any such court for the appointment of a successor trustee. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, appoint a successor trustee. 
 (b) In case at any time any of the following shall occur: 
 (i) the Trustee shall fail to comply with the provisions of Section 310(b) of the Trust Indenture Act of 1939 with respect to any series of Securities after written request therefor by the Issuer or by any
Securityholder who has been a bona fide Holder of a Security or Securities of such series for at least six months; or 
 (ii)
the Trustee shall cease to be eligible in accordance with the provisions of Section 310(a) of the Trust Indenture Act of 1939 and shall fail to resign after written request therefor by the Issuer or by any Securityholder; or 
 (iii) the Trustee shall become incapable of acting with respect to any series of Securities, or shall be adjudged a bankrupt or insolvent,
or a receiver or liquidator of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation;

  

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 then, in any such case, the Issuer may remove the Trustee with respect to the applicable series of Securities and appoint
a successor trustee for such series by written instrument, in duplicate, executed by order of the Board of Directors of the Issuer, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor trustee, or,
subject to Section 315(e) of the Trust Indenture Act of 1939, any Securityholder who has been a bona fide Holder of a Security or Securities of such series for at least six months may on behalf of himself or herself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor trustee with respect to such series. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor trustee. 
 (c) The Holders of a majority in aggregate principal amount of the Securities of each
series at the time Outstanding may at any time remove the Trustee with respect to Securities of such series and appoint a successor trustee with respect to the Securities of such series by delivering to the Trustee so removed, to the successor
trustee so appointed and to the Issuer the evidence provided for in Section 7.01 of the action in that regard taken by the Securityholders. 
 (d) Any resignation or removal of the Trustee with respect to any series and any appointment of a successor trustee with respect to such series pursuant to any of the provisions of this Section 6.10 shall become effective upon
acceptance of appointment by the successor trustee as provided in Section 6.11. 
 Section 6.11. Acceptance of Appointment by
Successor Trustee. Any successor trustee appointed as provided in Section 6.10 shall execute and deliver to the Issuer and to its predecessor trustee an instrument accepting such appointment hereunder, and thereupon the resignation or
removal of the predecessor trustee with respect to all or any applicable series shall become effective and such successor trustee, without any further act, deed or conveyance, shall become vested with all rights, powers, duties and obligations with
respect to such series of its predecessor hereunder, with like effect as if originally named as trustee for such series hereunder; but, nevertheless, on the written request of the Issuer or of the successor trustee, upon payment of its charges then
unpaid, the trustee ceasing to act shall, subject to Section 10.04, pay over to the successor trustee all moneys at the time held by it hereunder and shall execute and deliver an instrument transferring to such successor trustee all such
rights, powers, duties and obligations. Upon request of any such successor trustee, the Issuer shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor trustee all such rights and
powers. Any trustee ceasing to act shall, nevertheless, retain a prior claim upon all property or funds held or collected by such trustee to secure any amounts then due it pursuant to the provisions of Section 6.06. 
  

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 If a successor trustee is appointed with respect to the Securities of one or more (but not all) series,
the Issuer, the predecessor trustee and each successor trustee with respect to the Securities of any applicable series shall execute and deliver an indenture supplemental hereto which shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the predecessor trustee with respect to the Securities of any series as to which the predecessor trustee is not retiring shall continue to be vested in the predecessor trustee,
and shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such trustees co-trustees of the same trust and that each such trustee shall be trustee of a trust or trusts under separate indentures. 
 No successor trustee with respect to any series of Securities shall accept appointment as provided in this Section 6.11 unless at the time of such
acceptance such successor trustee shall be qualified under the provisions of Section 310(b) of the Trust Indenture Act of 1939 and eligible under the provisions of Section 310(a) of the Trust Indenture Act of 1939. 
 Upon acceptance of appointment by any successor trustee as provided in this Section 6.11, the Issuer shall mail notice thereof to the Holders of
Securities of each series affected, by mailing such notice to such Holders at their addresses as they shall appear on the Security register. If the acceptance of appointment is substantially contemporaneous with the resignation, then the notice
called for by the preceding sentence may be combined with the notice called for by Section 6.10. If the Issuer fails to mail such notice within ten days after acceptance of appointment by the successor trustee, the successor trustee shall cause
such notice to be given at the expense of the Issuer. 
 Section 6.12. Merger, Conversion, Consolidation or Succession to Business of
Trustee. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation
succeeding to the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder; provided, that such corporation shall be qualified under the provisions of Section 310(b) of the Trust Indenture Act of 1939 and
eligible under the provisions of Section 310(a) of the Trust Indenture Act of 1939, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding.

 In case, at the time such successor to the Trustee shall succeed to the trusts created by this Indenture, any of the Securities of any
series shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee and deliver such Securities 

  

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so authenticated; and, in case at that time any of the Securities of any series shall not have been authenticated, any successor to the Trustee may
authenticate such Securities either in the name of any predecessor hereunder or in the name of the successor trustee; and in all such cases such certificate shall have the full force which it is anywhere in the Securities of such series or in this
Indenture provided that the certificate of the Trustee shall have; provided, that the right to adopt the certificate of authentication of any predecessor trustee or to authenticate Securities of any series in the name of any predecessor
trustee shall apply only to its successor or successors by merger, conversion or consolidation. 
 ARTICLE 7 
 CONCERNING THE SECURITYHOLDERS 
 Section 7.01. Evidence of Action Taken by Securityholders. Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by a specified
percentage in principal amount of the Securityholders of any or all series may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such specified percentage of Securityholders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee. Proof of execution of any instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Indenture and (subject to Sections 6.01 and 6.02) conclusive in favor of the Trustee and the Issuer, if made in the manner provided in this Article. 
 Section 7.02. Proof of Execution of Instruments and of Holding of Securities. Subject to Sections 6.01 and 6.02, the execution of any instrument
by a Securityholder or his or her agent or proxy may be proved in the following manner: 
 (a) The fact and date of the execution by any
Holder of any instrument may be proved by the certificate of any notary public or other officer of any jurisdiction authorized to take acknowledgments of deeds or administer oaths that the person executing such instruments acknowledged to him or her
the execution thereof, or by an affidavit of a witness to such execution sworn to before any such notary or other such officer. Where such execution is by or on behalf of any legal entity other than an individual, such certificate or affidavit shall
also constitute sufficient proof of the authority of the person executing the same. 
 (b) The ownership of such Securities shall be proved
by the Security register or by a certificate of the Security registrar. 
  

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 (c) If the Issuer shall solicit from the Holders of Securities any request, demand, authorization,
direction, notice, consent, waiver or other action, the Issuer may, at its option, by Board Resolution, fix in advance a record date for the determination of Holders of Securities entitled to give such request, demand, authorization, direction,
notice, consent, waiver or other action, but the Issuer shall have no obligation to do so. Notice of such record date shall be given to the Trustee as soon as practicable after the time that the record date has been fixed. If such a record date is
fixed, such request, demand, authorization, direction, notice, consent, waiver or other action may be given before or after such record date, but only the Holders of Securities of record at the close of business on such record date shall be deemed
to be Holders of Securities for the purposes of determining whether Holders of Securities of the requisite proportion of Outstanding Securities have authorized or agreed or consented to such request, demand, authorization, direction, notice,
consent, waiver or other action, and for that purpose the Outstanding Securities shall be computed as of such record date; provided, that no such authorization, agreement or consent by the Holders of Securities on such record date shall be
deemed effective unless it shall become effective pursuant to the provisions of this Indenture not later than six months after the record date. 
 Section 7.03. Holders to Be Treated as Owners. The Issuer, the Trustee and any agent of the Issuer or the Trustee may deem and treat the Person in whose name any Security shall be registered upon the Security register for such series
as the absolute owner of such Security (whether or not such Security shall be overdue and notwithstanding any notation of ownership or other writing thereon) for the purpose of receiving payment of or on account of the principal of, and, subject to
the provisions of this Indenture, interest on, such Security and for all other purposes; and neither the Issuer nor the Trustee nor any agent of the Issuer or the Trustee shall be affected by any notice to the contrary. All such payments so made to
any such Person, or upon his or her order, shall be valid, and, to the extent of the sum or sums so paid, effectual to satisfy and discharge the liability for moneys payable. 
 Section 7.04. Securities Owned by Issuer Deemed Not Outstanding. In determining whether the Holders of the requisite aggregate principal amount of
Outstanding Securities of any or all series have concurred in any direction, consent or waiver under this Indenture, Securities which are owned by the Issuer or any other obligor on the Securities with respect to which such determination is being
made or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuer or any other obligor on the Securities with respect to which such determination is being made shall be disregarded
and deemed not to be Outstanding for the purpose of any such determination, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, consent or waiver, only Securities which the Trustee
knows are so owned shall be so disregarded. 

  

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Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee’s right so to act with respect to such Securities and that the pledgee is not the Issuer or any other obligor upon the Securities or any Person directly or indirectly controlling or controlled by or under direct or indirect common
control with the Issuer or any other obligor on the Securities. In case of a dispute as to such right, the advice of counsel shall be full protection in respect of any decision made by the Trustee in accordance with such advice. Upon request of the
Trustee, the Issuer shall furnish to the Trustee promptly an Officers’ Certificate listing and identifying all Securities, if any, known by the Issuer to be owned or held by or for the account of any of the above-described Persons; and, subject
to Sections 6.01 and 6.02, the Trustee shall be entitled to accept such Officers’ Certificate as conclusive evidence of the facts therein set forth and of the fact that all Securities not listed therein are Outstanding for the purpose of any
such determination. 
 Section 7.05. Right of Revocation of Action Taken. At any time prior to (but not after) the evidencing to the
Trustee, as provided in Section 7.01, of the taking of any action by the Holders of the percentage in aggregate principal amount of the Securities of any or all series, as the case may be, specified in this Indenture in connection with such
action, any Holder of a Security the serial number of which is shown by the evidence to be included among the serial numbers of the Securities the Holders of which have consented to such action may, by filing written notice at the Corporate Trust
Office and upon proof of holding as provided in this Article, revoke such action so far as concerns such Security. Except as aforesaid, any such action taken by the Holder of any Security shall be conclusive and binding upon such Holder and upon all
future Holders and owners of such Security and of any Securities issued in exchange or substitution therefor or on registration of transfer thereof, irrespective of whether or not any notation in regard thereto is made upon any such Security. Any
action taken by the Holders of the percentage in aggregate principal amount of the Securities of any or all series, as the case may be, specified in this Indenture in connection with such action shall be conclusively binding upon the Issuer, the
Trustee and the Holders of all the Securities affected by such action. 
 ARTICLE 8 
 SUPPLEMENTAL INDENTURES 
 Section 8.01. Supplemental
Indentures Without Consent of Securityholders. The Issuer, when authorized by a resolution of its Board of Directors, and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto in form
satisfactory to the Trustee for one or more of the following purposes: 
 (a) to convey, transfer, assign, mortgage or pledge to the Trustee
as security for the Securities of one or more series any property or assets; 
  

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 (b) to evidence the succession of another corporation to the Issuer, or successive successions, and the
assumption by the successor corporation of the covenants, agreements and obligations of the Issuer pursuant to Article 9; 
 (c) to add to
the covenants of the Issuer such further covenants, restrictions, conditions or provisions as its Board of Directors and the Trustee shall consider to be for the protection of the Holders of Securities, and to make the occurrence, or the occurrence
and continuance, of a default in any such additional covenants, restrictions, conditions or provisions an Event of Default permitting the enforcement of all or any of the several remedies provided in this Indenture as herein set forth;
provided, that in respect of any such additional covenant, restriction, condition or provision such supplemental indenture may provide for a particular period of grace after default (which period may be shorter or longer than that allowed in the
case of other defaults) or may provide for an immediate enforcement upon such an Event of Default or may limit the remedies available to the Trustee upon such an Event of Default or may limit the right of the Holders of a majority in aggregate
principal amount of the Securities of such series to waive such an Event of Default; 
 (d) to cure any ambiguity or to correct or supplement
any provision contained herein or in any supplemental indenture which may be defective or inconsistent with any other provision contained herein or in any supplemental indenture, or to conform this Indenture or any supplemental indenture to the
description of the Securities set forth in any prospectus or prospectus supplement related to such series of Securities; 
 (e) to establish
the form or terms of Securities of any series as permitted by Sections 2.01 and 2.03; 
 (f) to evidence and provide for the acceptance of
appointment hereunder by a successor trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one trustee, pursuant to the requirements of Section 6.11; 
 (g) to make any other change that is necessary or
desirable; provided, that no such action shall adversely affect the interests of the Holders of the Securities in any material respect; and 
 (h) to make any change to the Securities of any series so long as no Securities of such series are Outstanding. 
  

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 The Trustee is hereby authorized to join with the Issuer in the execution of any such supplemental
indenture, to make any further appropriate agreements and stipulations which may be therein contained and to accept the conveyance, transfer, assignment, mortgage or pledge of any property thereunder, but the Trustee shall not be obligated to enter
into any such supplemental indenture which affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise. 
 Any supplemental indenture authorized by the provisions of this Section may be executed without the consent of the Holders of any of the Securities at the time Outstanding, notwithstanding any of the provisions of Section 8.02.

 Section 8.02. Supplemental Indentures With Consent of Securityholders. With the consent (evidenced as provided in Article 7) of the
Holders of not less than a majority in aggregate principal amount of the Securities at the time Outstanding of all series affected by such supplemental indenture (voting as one class), the Issuer, when authorized by a resolution of its Board of
Directors, and the Trustee may, from time to time and at any time, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture
or of any supplemental indenture or of modifying in any manner the rights of the Holders of the Securities of each such series; provided, that no such supplemental indenture shall, without the consent of the Holder of each Security so
affected, (a) extend the final maturity of any Security, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any amount payable on redemption thereof, or make the principal
thereof (including any amount in respect of original issue discount) or interest thereon payable in any currency other than that provided in the Securities or in accordance with the terms thereof, or reduce the amount of the principal of an Original
Issue Discount Security that would be due and payable upon an acceleration of the maturity thereof pursuant to Section 5.01 or the amount thereof provable in bankruptcy pursuant to Section 5.02, or alter the provisions of
Section 11.11 or 11.12, or impair or affect the right of any Securityholder to institute suit for the payment or conversion thereof or, in the case of convertible or exchangeable Securities, materially and adversely affect the right to convert
or exchange the Securities in accordance with their terms or, if the Securities provide therefor, any right of repayment at the option of the Securityholder, or modify any of the provisions of this paragraph except to increase any required
percentage or to provide that certain other provisions cannot be modified or waived without the consent of the Holder of each Security so affected; provided, that no consent of any Holder of any Security shall be necessary under this
Section 8.02 to permit the Trustee and the Issuer to execute supplemental indentures pursuant to Section 8.01(e) of this Indenture, or (b) reduce the aforesaid percentage of Securities of any series, the consent of the Holders of
which is required for any such supplemental indenture. 
  

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 A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture
which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of Holders of Securities of such series with respect to such covenant or provision, shall be deemed not to affect
the rights under this Indenture of the Holders of Securities of any other series. 
 Upon the request of the Issuer, accompanied by a copy of
a resolution of the Board of Directors certified by the secretary or an assistant secretary of the Issuer authorizing the execution of any such supplemental indenture, and upon the filing with the Trustee of evidence of the consent of
Securityholders as aforesaid and other documents, if any, required by Section 7.01, the Trustee shall join with the Issuer in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee’s own rights,
duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such supplemental indenture. 
 It shall not be necessary for the consent of the Securityholders under this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the substance thereof. 
 Promptly after the execution by the Issuer and
the Trustee of any supplemental indenture pursuant to the provisions of this Section, the Trustee shall give a notice thereof to the Holders of then Outstanding Securities of each series affected thereby, by mailing a notice thereof by first-class
mail to such Holders at their addresses as they shall appear on the Security register, and in each case such notice shall set forth in general terms the substance of such supplemental indenture. Any failure of the Issuer to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture. 
 Section 8.03. Effect
of Supplemental Indenture. Upon the execution of any supplemental indenture pursuant to the provisions hereof, this Indenture shall be and be deemed to be modified and amended in accordance therewith and the respective rights, limitations of
rights, obligations, duties and immunities under this Indenture of the Trustee, the Issuer and the Holders of Securities of each series affected thereby shall thereafter be determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes. 
 Section 8.04. Documents to Be Given to Trustee. The Trustee, subject to the provisions of Sections 6.01 and 6.02, may receive an Officers’
Certificate and an Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant to this Article 8 complies with the applicable provisions of this Indenture. 
  

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 Section 8.05. Notation on Securities in Respect of Supplemental Indentures. Securities of any
series authenticated and delivered after the execution of any supplemental indenture pursuant to the provisions of this Article may bear a notation in form approved by the Trustee for such series as to any matter provided for by such supplemental
indenture or as to any action taken by Securityholders. If the Issuer or the Trustee shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee and the Board of Directors, to any modification of this
Indenture contained in any such supplemental indenture may be prepared by the Issuer, authenticated by the Trustee and delivered in exchange for the Securities of such series then Outstanding. 
 ARTICLE 9 
 CONSOLIDATION, MERGER, SALE
OR CONVEYANCE 
 Section 9.01. Issuer May Consolidate, Etc., on Certain Terms. The Issuer covenants that
it will not merge or consolidate with any other corporation or sell or convey (including by way of lease) all or substantially all of its assets to any Person, unless (a) either the Issuer shall be the continuing corporation, or the successor
corporation or the Person which acquires by sale or conveyance substantially all the assets of the Issuer (if other than the Issuer) shall expressly assume the due and punctual payment of the principal of and interest on all the Securities,
according to their tenor, and the due and punctual performance and observance of all of the covenants and conditions of this Indenture to be performed or observed by the Issuer, including, without limitation, the conversion rights, if any, provided
for in accordance with the terms of the Securities, by supplemental indenture satisfactory to the Trustee, executed and delivered to the Trustee by such corporation or entity, and shall be a corporation or entity organized under the laws of the
United States of America or any State thereof or a corporation or entity not organized under such laws which shall agree, in form satisfactory to the Trustee, (i) to subject itself to the jurisdiction of the United States district court for the
Southern District of New York, and (ii) to indemnify and hold harmless the holders of all Securities against (A) any tax, assessment or governmental charge imposed on such holders by a jurisdiction other than the United States or any
political subdivision or taxing authority thereof or therein with respect to, and withheld on the making of, any payment of principal of or interest on such Securities and which would not have been so imposed and withheld had such consolidation,
merger, sale or conveyance not been made and (B) any tax, assessment or governmental charge imposed on or relating to, and any costs or expenses involved in, such consolidation, merger, sale or 

  

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conveyance, Section 9.02 the Issuer or such successor corporation or entity, as the case may be, shall not, immediately after such merger or
consolidation, or such sale or conveyance, be in default in the performance of any such covenant or condition, and Section 9.03 the Issuer delivers to the trustee an officers’ certificate and opinion of counsel, in each case stating that
such consolidation, merger, or transfer and such supplemental indenture complies with this Section 9.01 and that all conditions precedent provided for in the Indenture and the Securities relating to such transaction have been complied with.

 The restrictions in this Section 9.01 shall not, however, apply to (i) the merger or consolidation of the Issuer with one of its
affiliates, if the Board of Directors determines in good faith that the purpose of such transaction is principally to change the Issuer’s State of incorporation or convert the Issuer’s form of organization to another form, or (ii) the
merger of the Issuer with or into a single direct or indirect wholly owned Subsidiary pursuant to Section 251(g) (or any successor provision) of the General Corporation Law of the State of Delaware. 
 Section 9.02. Successor Issuer Substituted. In case of any such consolidation, merger, sale or conveyance, and following such an assumption by the
successor corporation, such successor corporation shall succeed to and be substituted for the Issuer with the same effect as if it had been named herein. Such successor corporation may cause to be signed, and may issue either in its own name or in
the name of the Issuer prior to such succession any or all of the Securities issuable hereunder which theretofore shall not have been signed by the Issuer and delivered to the Trustee; and, upon the order of such successor corporation instead of the
Issuer and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee shall authenticate and shall deliver any Securities which previously shall have been signed and delivered by the officers of the Issuer to the
Trustee for authentication, and any Securities which such successor corporation thereafter shall cause to be signed and delivered to the Trustee for that purpose. All of the Securities so issued shall in all respects have the same legal rank and
benefit under this Indenture as the Securities theretofore or thereafter issued in accordance with the terms of this Indenture as though all of such Securities had been issued at the date of the execution hereof. 
 In case of any such consolidation, merger, sale, lease or conveyance, such changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate. 
 In the event of any such sale or conveyance (other than a conveyance by way of
lease), the Issuer or any successor corporation which shall theretofore have become such in the manner described in this Article shall be discharged from all obligations and covenants under this Indenture and the Securities and may be liquidated and
dissolved. 
  

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 Section 9.03. Opinion of Counsel and Officers’ Certificate to Trustee. The Trustee, subject
to the provisions of Sections 6.01 and 6.02, may receive an Opinion of Counsel and an Officers’ Certificate, prepared in accordance with Section 11.05, as conclusive evidence that any such consolidation, merger, sale, lease or conveyance,
and any such assumption, and any such liquidation or dissolution, complies with the applicable provisions of this Indenture. 
 ARTICLE 10

 SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED
MONEYS 
 Section 10.01. Satisfaction and Discharge of Indenture. (a) If at any time (i) the Issuer shall have
paid or caused to be paid the principal of and interest on all the Securities of any series Outstanding hereunder (other than Securities of such series which have been destroyed, lost or stolen and which have been replaced or paid as provided in
Section 2.09) as and when the same shall have become due and payable, or (ii) the Issuer shall have delivered to the Trustee for cancellation all Securities of any series theretofore authenticated (other than any Securities of such series
which shall have been destroyed, lost or stolen and which shall have been replaced or paid as provided in Section 2.09) or (iii) in the case of any series of Securities the exact amount (including the currency of payment) of principal of
and interest due on which on the dates referred to in clause (B) below can be determined at the time of making the deposit referred to in such clause, (A) all the Securities of such series not theretofore delivered to the Trustee for
cancellation shall have become due and payable, or are by their terms to become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption,
and (B) the Issuer shall have irrevocably deposited or caused to be deposited with the Trustee as trust funds the entire amount in cash (other than moneys repaid by the Trustee or any paying agent to the Issuer in accordance with
Section 10.04) or, in the case of any series of Securities the payments on which may only be made in Dollars, direct obligations of the United States of America, backed by its full faith and credit (“U.S. Government
Obligations”), maturing as to principal and interest in such amounts and at such times as will insure the availability of cash sufficient to pay on any subsequent interest payment date all interest due on such interest payment date on the
Securities of such series and to pay at maturity or upon redemption all Securities of such series (in each case other than any Securities of such series which shall have been destroyed, lost or stolen and which shall have been replaced or paid as
provided in Section 2.09) not theretofore delivered to the Trustee for cancellation, including principal and interest due or to become due to such date of maturity, as the case may be, and if, in any such case, the Issuer shall also pay or
cause to be paid all other sums payable hereunder by the Issuer, including amounts due the Trustee pursuant to Section 6.06, with respect to Securities of such series, then this Indenture shall 

  

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cease to be of further effect with respect to Securities of such series (except as to (1) rights of registration of transfer, conversion and exchange of
Securities of such series and the Issuer’s right of optional redemption, (2) substitution of mutilated, defaced, destroyed, lost or stolen Securities, (3) rights of Holders of Securities to receive payments of principal thereof and
interest thereon upon the original stated due dates therefor (but not upon acceleration) and remaining rights of the Holders to receive mandatory sinking fund payments, if any, (4) the rights (including the Trustee’s rights under
Section 10.05) and immunities of the Trustee hereunder and the Trustee’s obligations under Sections 10.02 and 10.04, (5) the rights of the Holders of Securities of such series as beneficiaries hereof with respect to the property so
deposited with the Trustee payable to all or any of them and (6) the obligations of the Issuer under Section 3.02), and the Trustee, on demand of the Issuer accompanied by an Officers’ Certificate and an Opinion of Counsel which
complies with Section 11.05 and at the cost and expense of the Issuer, shall execute proper instruments acknowledging such satisfaction of and discharging this Indenture with respect to such series; provided, that the rights of Holders
of the Securities to receive amounts in respect of principal of and interest on the Securities held by them shall not be delayed longer than required by then-applicable mandatory rules or policies of any securities exchange upon which the Securities
are listed. The Issuer agrees to reimburse the Trustee for any costs or expenses thereafter reasonably and properly incurred and to compensate the Trustee for any services thereafter reasonably and properly rendered by the Trustee in connection with
this Indenture or the Securities of such series. 
 (b) The following provisions shall apply to the Securities of each series unless
specifically otherwise provided in a Board Resolution, Officers’ Certificate or indenture supplemental hereto provided pursuant to Section 2.03. In addition to discharge of the Indenture pursuant to the next preceding paragraph, in the
case of any series of Securities the exact amounts (including the currency of payment) of principal of and interest subsequently due on which can be determined at the time of making the deposit referred to in clause (vi)(A)(1) below, the Issuer
shall be deemed to have paid and discharged the entire Debt on all the Securities of such a series on the 121st day after the date of the deposit referred to in subparagraph (vi)(A)(1) below, and the provisions of this Indenture with respect to the
Securities of such series shall no longer be in effect (except as to (i) rights of registration of transfer, conversion and exchange of Securities of such series, (ii) substitution of apparently mutilated, defaced, destroyed, lost or
stolen Securities, (iii) rights of Holders of Securities to receive payments of principal thereof and interest thereon, upon the original stated due dates therefor (but not upon acceleration) and remaining rights of the Holders to receive
sinking fund payments, if any, (iv) the rights (including the Trustee’s rights under Section 10.05) and immunities of the Trustee hereunder and the Trustee’s obligations with respect to the Securities of such series under
Sections 10.02 and 10.04, (v) the rights of the Holders of Securities of such series as beneficiaries hereof with 

  

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respect to the property so deposited with the Trustee payable to all or any of them and (vi) the obligations of the Issuer under Section 3.02) and
the Trustee, at the expense of the Issuer, shall at the Issuer’s request, execute proper instruments acknowledging the same, if 
 (A) with reference to this provision the Issuer has irrevocably deposited or caused to be irrevocably deposited with the Trustee as trust funds in trust, specifically pledged as security for, and dedicated solely to, the benefit of the
Holders of the Securities of such series (1) cash in an amount, or (2) in the case of any series of Securities the payments on which may only be made in Dollars, U.S. Government Obligations, maturing as to principal and interest at such
times and in such amounts as will insure the availability of cash or (3) a combination thereof, sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered
to the Trustee, to pay (x) the principal and interest on all Securities of such series on the date that such principal or interest is due and payable and (y) any mandatory sinking fund payments on the day on which such payments are due and
payable in accordance with the terms of the Indenture and the Securities of such series; 
 (B) such deposit will not result
in a breach or violation of, or constitute a default under, any agreement or instrument to which the Issuer is a party or by which it is bound; 
 (C) the Issuer has delivered to the Trustee an Officers’ Certificate and an opinion of independent legal counsel satisfactory to the Trustee to the effect that the Issuer has received from, or there has been
published by, the Internal Revenue Service a ruling to the effect that Holders of the Securities of such series will not recognize income, gain or loss for Federal income tax purposes as a result of such deposit, defeasance and discharge and will be
subject to Federal income tax on the same amount and in the same manner and at the same times, as would have been the case if such deposit, defeasance and discharge had not occurred; and 
 (D) the Issuer has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to the defeasance contemplated by this provision have been complied with, and the Opinion of Counsel shall also state that such deposit does not violate applicable law. 
  

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 Section 10.02. Application by Trustee of Funds Deposited for Payment of Securities. Subject to
Section 10.04, all moneys deposited with the Trustee (or other trustee) pursuant to Section 10.01 shall be held in trust and applied by it to the payment, either directly or through any paying agent (including the Issuer acting as its own
paying agent), to the Holders of the particular Securities of such series for the payment or redemption of which such moneys have been deposited with the Trustee, of all sums due and to become due thereon for principal and interest; but such money
need not be segregated from other funds except to the extent required by law. 
 Section 10.03. Repayment of Moneys Held by Paying Agent.
In connection with the satisfaction and discharge of this Indenture with respect to Securities of any series, all moneys then held by any paying agent under the provisions of this Indenture with respect to such series of Securities shall, upon
demand of the Issuer, be repaid to it or paid to the Trustee and thereupon such paying agent shall be released from all further liability with respect to such moneys. 
 Section 10.04. Return of Moneys Held by Trustee and Paying Agent Unclaimed for Two Years. Any moneys deposited with or paid to the Trustee or any paying agent for the payment of the principal of or interest on
any Security of any series and not applied but remaining unclaimed for two years after the date upon which such principal or interest shall have become due and payable, shall, upon the written request of the Issuer and unless otherwise required by
mandatory provisions of applicable escheat or abandoned or unclaimed property law, be repaid to the Issuer by the Trustee for such series or such paying agent, and the Holder of the Securities of such series shall, unless otherwise required by
mandatory provisions of applicable escheat or abandoned or unclaimed property laws, thereafter look only to the Issuer for any payment which such Holder may be entitled to collect, and all liability of the Trustee or any paying agent with respect to
such moneys shall thereupon cease; provided, however, that the Trustee or such paying agent, before being required to make any such repayment with respect to moneys deposited with it for any payment in respect of Securities of any
series, shall at the expense of the Issuer mail by first-class mail to Holders of such Securities at their addresses as they shall appear on the Security register notice that such moneys remain and that, after a date specified therein, which shall
not be less than 30 days from the date of such mailing or publication, any unclaimed balance of such money then remaining will be repaid to the Issuer. 
 Section 10.05. Indemnity for U.S. Government Obligations. The Issuer shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 10.01 or the principal or interest received in respect of such obligations. 
  

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 ARTICLE 11 
 MISCELLANEOUS PROVISIONS 
 Section 11.01. Incorporators, Stockholders,
Officers and Directors of Issuer Exempt from Individual Liability. No recourse under or upon any obligation, covenant or agreement contained in this Indenture, or in any Security, or because of any indebtedness evidenced thereby, shall be had
against any incorporator, as such, or against any past, present or future stockholder, officer or director, as such, of the Issuer or of any successor, either directly or through the Issuer or any successor, under any rule of law, statute or
constitutional provision or by the enforcement of any assessment or by any legal or equitable proceeding or otherwise, all such liability being expressly waived and released by the acceptance of the Securities by the Holders thereof and as part of
the consideration for the issue of the Securities. 
 Section 11.02. Provisions of Indenture for the Sole Benefit of Parties and Holders
of Securities. Nothing in this Indenture or in the Securities, expressed or implied, shall give or be construed to give to any person, firm or corporation, other than the parties hereto and their successors and the Holders of the Securities any
legal or equitable right, remedy or claim under this Indenture or under any covenant or provision herein contained, all such covenants and provisions being for the sole benefit of the parties hereto and their successors and of the Holders of the
Securities. 
 Section 11.03. Successors and Assigns of Issuer Bound by Indenture. All the covenants, stipulations, promises and
agreements contained in this Indenture by or on behalf of the Issuer shall bind its successors and assigns, whether so expressed or not. 
 Section 11.04. Notices and Demands on Issuer, Trustee and Holders of Securities. Any notice or demand which by any provision of this Indenture is required or permitted to be given or served by the Trustee or by the Holders of
Securities to or on the Issuer may be given or served by being deposited postage prepaid, first-class mail (except as otherwise specifically provided herein) addressed (until another address of the Issuer is filed by the Issuer with the Trustee) to
Texas Instruments Incorporated, Post Office Box 655474, Dallas, Texas 75265-5474, Attn: Secretary. Any notice, direction, request or demand by the Issuer or any Holder of Securities to or upon the Trustee shall be deemed to have been sufficiently
given or made, for all purposes, if given or made at U.S. Bank National Association, EP-MN-WS3C, 60 Livingston Avenue, St. Paul, Minnesota, 55107-1419, Attn: Corporate Trust Services. 
  

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 Where this Indenture provides for notice to Holders of Securities, such notice shall be sufficiently
given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder entitled thereto, at his or her last address as it appears in the Security register. In any case where notice to such Holders is
given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. 
 In case, by reason of the suspension of or irregularities in regular mail service, it shall be impracticable to mail notice to the Issuer when such
notice is required to be given pursuant to any provision of this Indenture, then any manner of giving such notice as shall be satisfactory to the Trustee shall be deemed to be a sufficient giving of such notice. 
 In case, by reason of the suspension of or irregularities in regular mail service, it shall be impracticable to mail notice of any event to Holders of
Securities when said notice is required to be given pursuant to any provision of this Indenture or of the Securities, then any manner of giving such notice as shall be satisfactory to the Trustee shall be deemed to be a sufficient giving of such
notice. Neither the failure to give notice, nor any defect in any notice so given, to any particular Holder of a Security shall affect the sufficiency of such notice with respect to other Holders of Securities given as provided above. 
 Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice either before
or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such
waiver. 
 Section 11.05. Officers’ Certificates and Opinions of Counsel; Statements to Be Contained Therein. Upon any
application or demand by the Issuer to the Trustee to take any action under any of the provisions of this Indenture, the Issuer shall furnish to the Trustee an Officers’ Certificate stating that all conditions precedent provided for in this
Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent have been complied with, except that in the case of any such application or demand
as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or demand, no additional certificate or opinion need be furnished. 
 Each certificate or opinion provided for in this Indenture and delivered to the Trustee with respect to compliance with a condition or covenant provided
for in this Indenture shall include (a) a statement that the person making such certificate or opinion has read such covenant or condition, (b) a brief statement as to the nature and scope of the examination or investigation upon which the
statements or opinions contained in such certificate or opinion are based, (c) a 

  

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statement that, in the opinion of such person, he or she has made such examination or investigation as is necessary to enable him or her to express an
informed opinion as to whether or not such covenant or condition has been complied with and (d) a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with. 
 Any certificate, statement or opinion of an officer of the Issuer may be based, insofar as it relates to legal matters, upon a certificate or opinion of
or representations by counsel, unless such officer knows that the certificate or opinion or representations with respect to the matters upon which his or her certificate, statement or opinion may be based as aforesaid are erroneous, or in the
exercise of reasonable care should know that the same are erroneous. Any certificate, statement or opinion of counsel may be based, insofar as it relates to factual matters, information with respect to which is in the possession of the Issuer, upon
the certificate, statement or opinion of or representations by an officer or officers of the Issuer, unless such counsel knows that the certificate, statement or opinion or representations with respect to the matters upon which his or her
certificate, statement or opinion may be based as aforesaid are erroneous, or in the exercise of reasonable care should know that the same are erroneous. 
 Any certificate, statement or opinion of an officer of the Issuer or of counsel may be based, insofar as it relates to accounting matters, upon a certificate or opinion of or representations by an accountant or firm
of accountants in the employ of the Issuer, unless such officer or counsel, as the case may be, knows that the certificate or opinion or representations with respect to the accounting matters upon which his or her certificate, statement or opinion
may be based as aforesaid are erroneous, or in the exercise of reasonable care should know that the same are erroneous. 
 Any certificate or
opinion of any independent firm of public accountants filed with and directed to the Trustee shall contain a statement that such firm is independent. 
 Section 11.06. Payments Due on Saturdays, Sundays and Holidays. If the date of maturity of interest on or principal of the Securities of any series or the date fixed for redemption or repayment of any such
Security, or the last day on which a Holder has the right to convert any Security, shall not be a Business Day, then payment of interest or principal, or any conversion, need not be made on such date, but may be made on the next succeeding Business
Day with the same force and effect as if made on the date of maturity or the date fixed for redemption or on such last day for conversion, and no interest shall accrue for the period after such date. 
  

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 Section 11.07. Conflict of Any Provision of Indenture With Trust Indenture Act of 1939. If and to
the extent that any provision of this Indenture limits, qualifies or conflicts with another provision included in this Indenture by operation of Sections 310 to 317, inclusive, of the Trust Indenture Act of 1939, such incorporated provision shall
control. 
 Section 11.08. New York Law to Govern. This Indenture and each Security shall be deemed to be a contract under the laws of
the State of New York, and for all purposes shall be construed in accordance with the laws of such State, except as may otherwise be required by mandatory provisions of law. 
 Section 11.09. Counterparts. This Indenture may be executed in any number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument. 
 Section 11.10. Effect of Headings. The Article and Section
headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. 
 Section 11.11.
Securities in a Foreign Currency. Unless otherwise specified in an Officers’ Certificate delivered pursuant to Section 2.03 of this Indenture with respect to a particular series of Securities, whenever for purposes of this Indenture
any action may be taken by the Holders of a specified percentage in aggregate principal amount of Securities of all series or all series affected by a particular action at the time Outstanding and, at such time, there are Outstanding Securities of
any series which are denominated in a currency other than Dollars, then the principal amount of Securities of such series which shall be deemed to be Outstanding for the purpose of taking such action shall be that amount of Dollars that could be
obtained for such amount at the Market Exchange Rate. For purposes of this Section 11.11, “Market Exchange Rate” shall mean the noon Dollar buying rate for that currency for cable transfers quoted in The City of New York as
certified for customs purposes by the Federal Reserve Bank of New York. If such Market Exchange Rate is not available for any reason with respect to such currency, the Trustee shall use, in its sole discretion and without liability on its part, such
quotation of the Federal Reserve Bank of New York as of the most recent available date, or quotations from one or more major banks in The City of New York or in the country of issue of the currency in question, or such other quotations as the
Trustee shall deem appropriate. The provisions of this paragraph shall apply in determining the equivalent principal amount in respect of Securities of a series denominated in a currency other than Dollars in connection with any action taken by
Holders of Securities pursuant to the terms of this Indenture. 
 All decisions and determinations of the Trustee regarding the Market
Exchange Rate or any alternative determination provided for in the preceding paragraph shall be in its sole discretion and shall, in the absence of manifest error, be conclusive for all purposes and irrevocably binding upon the Issuer and all
Holders. 
  

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 Section 11.12. Judgment Currency. The Issuer agrees, to the fullest extent that it may effectively
do so under applicable law, that (a) if for the purpose of obtaining judgment in any court it is necessary to convert the sum due in respect of the principal of or interest on the Securities of any series (the “Required
Currency”) into a currency in which a judgment will be rendered (the “Judgment Currency”), the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Trustee could purchase in The
City of New York the Required Currency with the Judgment Currency on the New York Banking Day preceding that on which final unappealable judgment is given and (b) its obligations under this Indenture to make payments in the Required Currency
(i) shall not be discharged or satisfied by any tender, or any recovery pursuant to any judgment (whether or not entered in accordance with subsection (a)), in any currency other than the Required Currency, except to the extent that such tender
or recovery shall result in the actual receipt, by the payee, of the full amount of the Required Currency expressed to be payable in respect of such payments, (ii) shall be enforceable as an alternative or additional cause of action for the
purpose of recovering in the Required Currency the amount, if any, by which such actual receipt shall fall short of the full amount of the Required Currency so expressed to be payable and (iii) shall not be affected by judgment being obtained
for any other sum due under this Indenture. For purposes of the foregoing, “New York Banking Day” means any day except a Saturday, Sunday or legal holiday in The City of New York or a day on which banking institutions in The City of
New York are authorized or required by law or executive order to close. 
 ARTICLE 12 
 REDEMPTION OF SECURITIES AND SINKING FUNDS 
 Section 12.01. Applicability of Article. The provisions of this Article shall be applicable to the Securities of any series which are redeemable
before their maturity or to any sinking fund for the retirement of Securities of a series, except as otherwise specified, as contemplated by Section 2.03 for Securities of such series. 
 Section 12.02. Notice of Redemption; Partial Redemptions. Notice of redemption to the Holders of Securities of any series to be redeemed as a
whole or in part at the option of the Issuer shall be given by mailing notice of such redemption by first class mail, postage prepaid, at least 30 days and not more than 60 days prior to the date fixed for redemption to such Holders of Securities of
such series at their last addresses as they shall appear upon the Security register. Any notice which is given in the manner herein provided shall be conclusively 

  

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presumed to have been duly given, whether or not the Holder receives the notice. Failure to give notice or any defect in the notice to the Holder of any
Security of a series designated for redemption as a whole or in part shall not affect the validity of the proceedings for the redemption of any other Security of such series. 
 The notice of redemption to each such Holder shall specify the principal amount of each Security of such series held by such Holder to be redeemed, the
date fixed for redemption, the redemption price, the place or places of payment, that payment will be made upon presentation and surrender of such Securities, that such redemption is pursuant to the mandatory or optional sinking fund, or both, if
such be the case, that interest accrued to the date fixed for redemption will be paid as specified in such notice and that on and after said date interest thereon or on the portions thereof to be redeemed will cease to accrue and shall also specify,
if applicable, the conversion price then in effect and the date on which the right to convert such Securities or the portions thereof to be redeemed will expire. In case any Security of a series is to be redeemed in part only, the notice of
redemption shall state the portion of the principal amount thereof to be redeemed and shall state that on and after the date fixed for redemption, upon surrender of such Security, a new Security or Securities of such series in principal amount equal
to the unredeemed portion thereof will be issued. 
 The notice of redemption of Securities of any series to be redeemed at the option of the
Issuer shall be given by the Issuer or, at the Issuer’s request, by the Trustee in the name and at the expense of the Issuer. 
 On or
before the redemption date specified in the notice of redemption given as provided in this Section, the Issuer will deposit with the Trustee or with one or more paying agents (or, if the Issuer is acting as its own paying agent, set aside, segregate
and hold in trust as provided in Section 3.04) an amount of money sufficient to redeem on the redemption date all the Securities of such series so called for redemption (other than those theretofore surrendered for conversion into Common Stock)
at the appropriate redemption price, together with accrued interest to the date fixed for redemption. If any Security called for redemption is converted pursuant hereto, any money deposited with the Trustee or any paying agent or so segregated and
held in trust for the redemption of such Security shall be paid to the Issuer upon the Issuer’s request, or, if then held by the Issuer, shall be discharged from such trust. The Issuer will deliver to the Trustee at least 70 days prior to the
date fixed for redemption (unless a shorter time period shall be acceptable to the Trustee) an Officers’ Certificate (which need not comply with Section 11.05) stating the aggregate principal amount of Securities to be redeemed. In case of
a redemption at the election of the Issuer prior to the expiration of any restriction on such redemption, the Issuer shall deliver to the Trustee, prior to the giving of any notice of redemption to Holders pursuant to this Section, an Officers’
Certificate stating that such restriction has been complied with. 
  

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 If less than all the Securities of a series are to be redeemed, the Trustee shall select, in such manner
as it shall deem appropriate and fair, Securities of such Series to be redeemed in whole or in part. Securities may be redeemed in part in multiples equal to the minimum authorized denomination for Securities of such series or any multiple thereof.
The Trustee shall promptly notify the Issuer in writing of the Securities of such series selected for redemption and, in the case of any Securities of such series selected for partial redemption, the principal amount thereof to be redeemed. For all
purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities of any series shall relate, in the case of any Security redeemed or to be redeemed only in part, to the portion of the
principal amount of such Security which has been or is to be redeemed. If any Security selected for partial redemption is surrendered for conversion after such selection, the converted portion of such Security shall be deemed (so far as may be) to
be the portion selected for redemption. Upon any redemption of less than all the Securities, the Issuer and the Trustee may treat as Outstanding Securities surrendered for conversion during the period of 15 days next preceding the mailing of a
notice of redemption, and need not treat as Outstanding any Security authenticated and delivered during such period in exchange for the unconverted portion of any Security converted in part during such period. 
 Section 12.03. Payment of Securities Called for Redemption. If notice of redemption has been given as above provided, the Securities or portions
of Securities specified in such notice shall become due and payable on the date and at the place stated in such notice at the applicable redemption price, together with interest accrued to the date fixed for redemption, and on and after said date
(unless the Issuer shall default in the payment of such Securities at the redemption price, together with interest accrued to said date) interest on the Securities or portions of Securities so called for redemption shall cease to accrue, and, except
as provided in Sections 6.05 and 10.04, such Securities shall cease from and after the date fixed for redemption to be convertible into Common Stock, if applicable, and to be entitled to any benefit or security under this Indenture, and the Holders
thereof shall have no right in respect of such Securities except the right to receive the redemption price thereof and unpaid interest to the date fixed for redemption. On presentation and surrender of such Securities at a place of payment specified
in said notice, said Securities or the specified portions thereof shall be paid and redeemed by the Issuer at the applicable redemption price, together with interest accrued thereon to the date fixed for redemption; provided, that payment of
interest becoming due on or prior to the date fixed for redemption shall be payable to the Holders of such Securities registered as such on the relevant record date subject to the terms and provisions of Sections 2.03 and 2.07 hereof. 
 If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal shall, until paid or duly provided for,
bear interest from the date fixed for redemption at the rate of interest or Yield to Maturity (in the case of an Original Issue Discount Security) borne by such Security and, if applicable, such Security shall remain convertible into Common Stock
until the principal of such Security shall have been paid or duly provided for. 
  

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 Upon presentation of any Security redeemed in part only, the Issuer shall execute and the Trustee shall
authenticate and deliver to or on the order of the Holder thereof, at the expense of the Issuer, a new Security or Securities of such series, of authorized denominations, in principal amount equal to the unredeemed portion of the Security so
presented. 
 Section 12.04. Exclusion of Certain Securities from Eligibility for Selection for Redemption. Securities shall be
excluded from eligibility for selection for redemption if they are identified by registration and certificate number in an Officers’ Certificate delivered to the Trustee at least 40 days prior to the last date on which notice of redemption may
be given as being owned of record and beneficially by, and not pledged or hypothecated by either (a) the Issuer or (b) an entity specifically identified in such written statement as directly or indirectly controlling or controlled by or
under direct or indirect common control with the Issuer. 
 Section 12.05. Mandatory and Optional Sinking Funds. The minimum amount of
any sinking fund payment provided for by the terms of the Securities of any series is herein referred to as a “mandatory sinking fund payment”, and any payment in excess of such minimum amount provided for by the terms of the
Securities of any series is herein referred to as an “optional sinking fund payment”. The date on which a sinking fund payment is to be made is herein referred to as the “sinking fund payment date”. 
 In lieu of making all or any part of any mandatory sinking fund payment with respect to any series of Securities in cash, the Issuer may at its option
(a) deliver to the Trustee Securities of such series theretofore purchased or otherwise acquired (except upon redemption pursuant to the mandatory sinking fund) by the Issuer or receive credit for Securities of such series (not previously so
credited) theretofore purchased or otherwise acquired (except as aforesaid) by the Issuer and delivered to the Trustee for cancellation pursuant to Section 2.10 and, if applicable, receive credit for Securities (not previously so credited)
converted into Common Stock and so delivered to the Trustee for cancellation, (b) receive credit for optional sinking fund payments (not previously so credited) made pursuant to this Section, or (c) receive credit for Securities of such
series (not previously so credited) redeemed by the Issuer through any optional redemption provision contained in the terms of such series. Securities so delivered or credited shall be received or credited by the Trustee at the sinking fund
redemption price specified in such Securities. 
  

 62 

 On or before the 60th day next preceding each sinking fund payment date for any series, the Issuer will
deliver to the Trustee an Officers’ Certificate (which need not contain the statements required by Section 11.05) (a) specifying the portion of the mandatory sinking fund payment to be satisfied by payment of cash and the portion to
be satisfied by credit of Securities of such series and the basis for such credit, (b) stating that none of the Securities of such series has theretofore been so credited, (c) stating that no defaults in the payment of interest or Events
of Default with respect to such series have occurred (which have not been waived or cured) and are continuing and (d) stating whether or not the Issuer intends to exercise its right to make an optional sinking fund payment with respect to such
series and, if so, specifying the amount of such optional sinking fund payment which the Issuer intends to pay on or before the next succeeding sinking fund payment date. Any Securities of such series to be credited and required to be delivered to
the Trustee in order for the Issuer to be entitled to credit therefor as aforesaid which have not theretofore been delivered to the Trustee shall be delivered for cancellation pursuant to Section 2.10 to the Trustee with such Officers’
Certificate (or reasonably promptly thereafter if acceptable to the Trustee). Such Officers’ Certificate shall be irrevocable and upon its receipt by the Trustee the Issuer shall become unconditionally obligated to make all the cash payments or
payments therein referred to, if any, on or before the next succeeding sinking fund payment date. Failure of the Issuer, on or before any such 60th day, to deliver such Officers’ Certificate and Securities specified in this paragraph, if any,
shall not constitute a default but shall constitute, on and as of such date, the irrevocable election of the Issuer (i) that the mandatory sinking fund payment for such series due on the next succeeding sinking fund payment date shall be paid
entirely in cash without the option to deliver or credit Securities of such series in respect thereof and (ii) that the Issuer will make no optional sinking fund payment with respect to such series as provided in this Section. 
 If the sinking fund payment or payments (mandatory or optional or both) to be made in cash on the next succeeding sinking fund payment date plus any
unused balance of any preceding sinking fund payments made in cash shall exceed $50,000 (or the equivalent thereof in any Foreign Currency or a lesser sum in Dollars or in any Foreign Currency if the Issuer shall so request) with respect to the
Securities of any particular series, such cash shall be applied on the next succeeding sinking fund payment date to the redemption of Securities of such series at the sinking fund redemption price together with accrued interest to the date fixed for
redemption. If such amount shall be $50,000 (or the equivalent thereof in any Foreign Currency) or less and the Issuer makes no such request then it shall be carried over until a sum in excess of $50,000 (or the equivalent thereof in any Foreign
Currency) is available. The Trustee shall select, in the manner provided in Section 12.02, for redemption on such sinking fund payment date a sufficient principal amount of Securities of such series to absorb said cash, as nearly as may be, and
shall (if requested in writing by the Issuer) inform the 

  

 63 

 
Issuer of the serial numbers of the Securities of such series (or portions thereof) so selected. Securities shall be excluded from eligibility for redemption
under this Section if they are identified by registration and certificate number in an Officers’ Certificate delivered to the Trustee at least 60 days prior to the sinking fund payment date as being owned of record and beneficially by, and not
pledged or hypothecated by either (a) the Issuer or (b) an entity specifically identified in such Officers’ Certificate as directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuer.
The Trustee, in the name and at the expense of the Issuer (or the Issuer, if it shall so request the Trustee in writing), shall cause notice of redemption of the Securities of such series to be given in substantially the manner provided in
Section 12.02 (and with the effect provided in Section 12.03) for the redemption of Securities of such series in part at the option of the Issuer. The amount of any sinking fund payments not so applied or allocated to the redemption of
Securities of such series shall be added to the next cash sinking fund payment for such series and, together with such payment, shall be applied in accordance with the provisions of this Section. Any and all sinking fund moneys held on the stated
maturity date of the Securities of any particular series (or earlier, if such maturity is accelerated), which are not held for the payment or redemption of particular Securities of such series, shall be applied, together with other moneys, if
necessary, sufficient for the purpose, to the payment of the principal of, and interest on, the Securities of such series at maturity. The Issuer’s obligation to make a mandatory or optional sinking fund payment shall automatically be reduced
by an amount equal to the sinking fund redemption price allocable to any Securities or portions thereof called for redemption pursuant to the preceding paragraph on any sinking fund payment date and converted into Common Stock; provided,
that, if the Trustee is not the conversion agent for the Securities, the Issuer or such conversion agent shall give the Trustee written notice prior to the date fixed for redemption of the principal amount of Securities or portions thereof so
converted. 
 On or before each sinking fund payment date, the Issuer shall pay to the Trustee in cash or shall otherwise provide for the
payment of all interest accrued to the date fixed for redemption on Securities to be redeemed on the next following sinking fund payment date. 
 The Trustee shall not redeem or cause to be redeemed any Securities of a series with sinking fund moneys or give any notice of redemption of Securities for such series by operation of the sinking fund during the continuance of a default in
payment of interest on such Securities or of any Event of Default except that, where the mailing of notice of redemption of any Securities shall theretofore have been made, the Trustee shall redeem or cause to be redeemed such Securities, provided
that it shall have received from the Issuer a sum sufficient for such redemption. Except as aforesaid, any moneys in the sinking fund for such series at the time when any such default or Event of Default shall occur, and any moneys thereafter paid
into the sinking fund, shall, during the continuance of such default or Event of Default, be deemed to have been collected under Article 5 and held for the payment of all such Securities. In case such Event of Default shall have been waived as
provided in Section 5.10, or the default cured on or before the 60th day preceding the sinking fund payment date in any year, such moneys shall thereafter be applied on the next succeeding sinking fund payment date in accordance with this
Section to the redemption of such Securities. 
  

 64 

 IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of _________ __,
2007. 
  

			
	TEXAS INSTRUMENTS INCORPORATED
		
	 By:
	 	  
		 	Title:
	
	 Attest:

		
	 By:
	 	  
		 	Title:
	
	U.S. BANK NATIONAL ASSOCIATION, Trustee
		
	 By:
	 	  
		 	Title:
		 	

  

 65Loan and Security Agreement

 Exhibit 10.39 
 LOAN AND SECURITY AGREEMENT 
 (Accounts Receivable & Inventory Line of Credit) 
 This Loan and Security Agreement (Accounts Receivable & Inventory Line of Credit), is entered into as of February 26, 2007, between
BFI Business Finance, a California corporation (the “Lender”), with its headquarters’ office located at 1655 The Alameda, San Jose, CA 95126 and Spy Optic, Inc. (the “Borrower”), a(n) California
corporation, with its sole place of business (if it has only one), chief executive office (if it has more than one place of business) or residence (if an individual) located at 2070 Las Palmas Drive, Carlsbad, California 92011 (the
“Chief Executive Office”). 
 RECITALS 
 A. Borrower has requested Lender to make loans to Borrower for business purposes. 
 B. Lender is willing to
make such loans to Borrower, on the terms and conditions set forth in this Agreement, and Borrower agrees to make the payments required by this Agreement and to comply with the other terms and conditions of this Agreement. 
 AGREEMENT 
 For good and valuable
consideration, receipt of which is hereby acknowledged, the parties agree as set forth below. 
 1. Definitions and Construction.

 1.1. Definitions. As used in this Agreement, the following terms shall have the following definitions: 
 “Accounting Period” has the meaning given in Section (c) hereof. 
 “Account Debtor” means a person obligated on an Account, Chattel Paper, or General Intangible. 
 “Accounts” means all currently existing and hereafter arising accounts as defined in the Code, as such definition may be changed from
time to time, and shall include, but not be limited to a right to payment of a monetary obligation for property sold or services rendered, and any and all credit insurance, guaranties, or security therefor. 
 “Addendum” means that certain Addendum A hereto, if applicable. 
 “Advance(s)” has the meaning given in Section 2.1.1 hereof. 
 “Administrative Fee” has the meaning given in Section 2.2.10 hereof. 
 “Affiliate” means, when used with respect to any Person, any other Person which, directly or indirectly, controls or is controlled by or
is under common control with such Person. For purposes of this definition, “control” (including the correlative meanings of the terms “controlled by” and “under common control with”), with respect to any Person, shall
mean possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or by contract or otherwise. 
 “Agreement” means this Loan and Security Agreement (Accounts Receivable & Inventory Line of Credit) together with all addenda,
exhibits and schedules hereto, as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced. 
 “Allowable Amount” means the lesser of the Borrowing Base and the Maximum Amount. 
 “A R Borrowing
Base” has the meaning set forth in the definition of Borrowing Base. 
 “Audit Fees” shall have the meaning set
forth in Section 2.2.12 hereof. 
 “Authenticate” shall have the meaning given in the Code, as such definition may be
amended from time to time, which means to sign, execute, or otherwise adopt a symbol, or encrypt or similarly process a record in whole or in part, with the present intention of the authenticating person to identify the person and adopt or accept a
record. 
 “Authorized Officer” means any officer or employee of Borrower as set forth in that certain Signature
Authorization of even date herewith, as it may be amended from time to time. 
 “Average Daily Balance” means the average of
the Daily Balance, which shall be calculated taking into account that no payment made by check shall be deemed to be made until three (-3- ) Business Days after receipt of Lender of such checks to allow for clearance thereof, as provided in
Section 3.3 hereof. 
  

			
	Page 1 of 36	 	Initial Here   ̈

 “Bankruptcy Code” means Title 11 of the United States Code, as amended and any successor
statute. 
 “Basic Term” has the meaning set forth in Section 6.1 hereof. 
 “Borrower” has the meaning set forth in the preamble to this Agreement, individually and collectively. 
 “Borrower’s Books” means all of Borrower’s books and records including ledgers, records indicating, summarizing, or evidencing
Borrower’s properties or assets (including, without limitation, the Collateral) or liabilities, all information relating to Borrower’s business operations or financial condition, and all computer programs, disc or tape files, printouts,
runs, or other computer prepared information, and the equipment containing such information. 
 “Borrowing Base” means the
sum of the following: 
 (a) Eighty percent (80%) of the Net Face Amount of Prime Accounts, but in any event not in an aggregate
amount in excess of the Maximum Account Advance (the “A R Borrowing Base”); plus 
 (b) Fifteen percent (15%) of the
Current Market Cost of raw materials that constitute Eligible Inventory; plus Fifteen (15%) of the Current Market Cost of finished goods that constitute Eligible Inventory, but in any event not in an aggregate amount in excess of the
Maximum Inventory Advance (the “Inventory Borrowing Base”). 
 “Business Day” means any day which is not a
Saturday, Sunday, or other day on which national banks are authorized or required to close. 
 “CERCLA” has the meaning
given in the definition of Environmental Laws. 
 “Chattel Paper” has the meaning given in the Code, as such definition may
be amended from time to time, which defines Chattel Paper as a record or records that evidence both (a) a monetary obligation; and (b) a security interest in (1) specific goods; (2) a security interest in specific goods and
software used in the goods; (3) a security interest in specific goods and license of software used in the goods; or (4) a lease of specific goods and license of software used in the goods. 
 “Chief Executive Office” has the meaning set forth in the preamble to this Agreement. 
 “Clearance Days” has the meaning given in Section 3.3 hereof. 
 “Closing Date” means the date of the initial advance hereunder. 
 “Code” or “UCC” means the California Uniform Commercial Code, or any successor statute, as amended from time to time,
which is also known as the UCC. 
 “Collateral” means all of the personal property and Trade Fixtures now owned or hereafter
acquired by Borrower whether now existing or hereafter arising and wherever located, including without limitation: (a) all Accounts; (b) all Chattel Paper including without limitation Electronic Chattel Paper; (c) all Inventory;
(d) all Equipment; (e) all Trade Fixtures; (f) all Fixtures, but only if connected with Real Property Collateral (g) all Instruments; (h) all Financial Assets, including without limitation, Investment Property; (i) all
Documents; (j) all Deposit Accounts; (k) all Letter of Credit Rights; (l) all General Intangibles including without limitation copyrights, trademarks, and patents, Payment Intangibles and Software; (m) all Supporting Obligations;
(n) any Commercial Tort Claim listed on any schedule provided herewith or hereafter; (o) all returned or repossessed goods arising from or relating to any Accounts or Chattel Paper; (p) all certificates of title and certificates of
origin or manufacturers statements of origin relating to any of the foregoing, now owned or hereafter acquired; (q) all property similar to any of the foregoing hereafter acquired by Borrower; (r) all ledger sheets, files, records,
documents, instruments, and other books and records (including without limitation related electronic data processing Software) evidencing an interest in or relating to the above; (s) all money, cash or cash equivalents; and (t) to the
extent not otherwise included in the foregoing, all proceeds, products, insurance claims, and other rights to payment and all accessions to, replacements for, attachments to, substitutions for, and rents and profits of, and noncash proceeds of, each
of the foregoing. Notwithstanding any contrary term of this Agreement, Collateral shall not include any waste or other materials that have been or may be designated as toxic or hazardous. 
 “Collateral Account” has the meaning give in Section 3.7.2 hereof. 
 “Collateral Control Account” has the meaning given in Section 3.7.3 hereof. 
 “Collateral State” has the meaning given in Section 9.14 hereof. 
 “Commercial Tort Claim” has the meaning give in the Code, as such definition may be amended from time to time, which means a claim
arising in tort with respect to which the claimant is an organization or if the claimant is an individual, the claim arose in (a) the course of the claimant’s business or professions; and (b) does not include damages arising out of
personal injury to or death of an individual. 
 “Cumulative Minimum Annual Interest Payment” has the meaning given in
Section 2.2.2 hereof. 
  

			
	Page 2 of 36	 	Initial Here   ̈

 “Current Market Cost” means, as determined by Lender in good faith, the lower of
(a) cost of Inventory, computed on a first-in-first-out basis in accordance with GAAP; or (b) market value of Inventory. 
 “Daily Balance” means the principal amount of any Obligations owed at the end of a given day. 
 “Deemed
Prime Rate” shall have the meaning given in the definition of Prime Rate. 
 “Default Rate” has the meaning given
in Section 2.2.4 hereof. 
 “Delinquent Accounts” shall mean Accounts which remain uncollected for more than ninety
(90) days from the invoice date. 
 “Deposit” has the meaning given in Section 2.2.11 hereof. 
 “Deposit Account(s)” has the meaning given in the Code, as such definition may be amended from time to time, including without
limitation, a demand, time, savings, passbook or similar account maintained with a bank. 
 “Dilution Rate” shall mean the
percentage rate at which Borrower’s Prime Accounts are subject to reduction due to credits, returns, and allowances. 
 “Documentation Fee/Legal Deposit” shall have the meaning set forth in Section 2.2.11 hereof. 
 “Documents” has the meaning given in the Code, as such definition may be amended from time to time. 
 “Electronic Chattel Paper” has the meaning given in the Code, as such definition may change from time to time, which defines Electronic Chattel Paper as Chattel Paper evidenced by a record or records consisting of
information stored in an electronic medium. 
 “Eligible Inventory” means: 
 (a) Inventory acceptable to Lender, in its reasonable and sole discretion, for lending purposes; 
 (b) Inventory held for sale or lease in the ordinary course of Borrower’s business; 
 (c) Inventory located at Borrower’s Chief Executive Office or Warehouse, provided however, that if any such location is owned by a party other than
Borrower, Lender shall have obtained from the owner thereof an agreement relative to Lender’s rights with respect to such Inventory, in form and content satisfactory to Lender; 
 (d) Inventory in which Lender has a first priority, perfected security interest; 
 (e) Inventory not subject to a security interest, lien, or other encumbrance in favor of any other Person; 
 (f) Inventory of good and merchantable quality that is free from defect and that is not slow moving, obsolete, returned, perishable, or manufactured
under a license agreement; 
 (g) Inventory owned and in the lawful possession of Borrower; 
 (h) Inventory which does not consist of packaging and shipping materials; and 
 (i) Inventory that does not consist of supplies used or consumed in Borrower’s business or work-in-process. 
 General criteria for Eligible Inventory may be established and revised from time to time by Lender in good faith. Any Inventory that is not Eligible Inventory shall
nevertheless be part of the Collateral. 
 “Environmental Laws” means all federal, state, local and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or other governmental restrictions relating to the environment or to emissions, discharges or releases of pollutants,
contaminants, petroleum or petroleum products, chemicals or industrial, toxic or hazardous substances or wastes into the environment, including ambient air, surface water, ground water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, petroleum or petroleum products, chemicals, or industrial, toxic or hazardous substances or wastes or the clean-up or other remediation thereof,
including without limitation 42 U.S.C. 9601 (14), Comprehensive Environmental Response, Compensation and Liability Act of 1980 set forth at 42 U.S.C. 9601 et seq. (“CERCLA”), or the Resource Conservation and Recovery Act of 1986 set forth
at 42 U.S.C. 9601 et seq. (“RCRA”) and all successor statutes and amendments thereto. 
 “EPA” means the United
States Environmental Protection Agency. 
  

			
	Page 3 of 36	 	Initial Here   ̈

 “Equipment” means all of Borrower’s now owned and hereafter acquired equipment as
defined in the Code, as such definition may be amended from time to time, and wherever located, and shall include, but not be limited to, all goods (other than inventory, farm products, or consumer goods) including without limitation machinery,
computers and computer hardware and software (whether owned or licensed), vehicles, tools, furniture, Trade Fixtures (but not including Fixtures unless Real Property Collateral has been pledged to Lender), all attachments, accessions and property
now or hereafter affixed thereto or used in connection therewith, and substitutions and replacements thereof, wherever located. 
 “ERISA” shall have the meaning given in Section 9.20. 
 “Event of Default” means those
events described in Section 11 hereof. 
 “FEIN” shall have the meaning given in Section 8.1.15. 
 “Financial Assets” has the meaning given in the Code, which defines Financial Assets as any of the following: (a) a security;
(b) an obligation of a person or a share, participation, or other interest in a person or in property or an enterprise of a person, that is, or is of a type, dealt in or traded on financial markets or that is recognized in any area in which it
is issued or dealt in as a medium for investment; and (c) any property that is held by a securities intermediary for another person in a securities account that has expressly agreed with the other person that the property is to be treated as a
financial asset. 
 “Fixtures” has the meaning given in the Code, as such definition may be amended from time to time, which
defines Fixtures as goods that have become so related to particular real property that an interest in them arises under property law, but shall not include Trade Fixtures. 
 “GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and pronouncements of the Financial Accounting Standards Board (or any successor authority) that are applicable as of the date of determination. 
 “General Intangibles” means general intangibles as defined in the Code, as such definition may be amended from time to time, (and shall
include, but not be limited to, registered and unregistered patents, trademarks, service marks, copyrights, trade names, applications for the foregoing, trade secrets, goodwill, processes, drawings, blueprints, customer lists, licenses, whether as
licensor or licensee, choses in action and other claims and existing and future leasehold interests in Equipment, Payment Intangibles and Software), all whether arising under the laws of the United States of America or any other country. 

“Good Faith Deposit” shall have the meaning set forth in Section 2.2.11 hereof. 
 “Guarantor” means, individually and collectively, Orange 21 Inc., a Delaware corporation. 
 “Guaranty” means that certain General Continuing Guaranty or those certain General Continuing Guaranties, signed by Guarantor
concurrently with the execution of this Agreement and the Loan Documents and/or the Term Loan Documents, as amended from time to time hereafter. 
 “Hazardous Substances” and “Hazardous Wastes” means all or any of the following: 
 (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, 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 which contains any oil or
dielectric fluid containing levels of polychlorinated biphenyls in excess of fifty (50) parts per million. 
 “Indebtedness” means all of the following: 
 (a) all indebtedness for borrowed money (whether by loan or the
issuance and sale of debt securities); 
 (b) that portion of obligations with respect to capital leases that is properly classified as a
liability on a balance sheet in conformity with GAAP; 
 (c) acceptances, bonds, indentures, notes payable, and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money; 
  

			
	Page 4 of 36	 	Initial Here   ̈

 (d) any obligation owed for all or any part of the deferred purchase price of property or services if the
purchase price is due more than six (6) months from the date the obligation is incurred or is evidenced by a note or similar written instrument; 
 (e) all indebtedness secured by any lien on any property or asset owned or held by Borrower regardless of whether the indebtedness secured thereby shall have been assumed by Borrower or is nonrecourse to the credit of
Borrower; 
 (f) contingent obligations to the extent such obligations are no longer contingent but become absolute and remain unpaid;

 (g) all obligations, contingent or otherwise, relative to the face amount of any letter of credit, letter of credit guaranties, bankers
acceptances, interest rate swaps, controlled disbursement accounts, or other financial products; 
 (h) any unfunded obligation of Borrower
or any of its subsidiaries to a Multiemployer Plan required to be accrued by GAAP; and 
 (i) obligations of Borrower guaranteeing or
intended to guarantee (whether guaranteed, endorsed, co-made, discounted, or sold with recourse to Borrower), any indebtedness, lease, dividend, letter of credit, or other obligation of any other Person. 
 “Insolvency Proceeding” means any case, proceeding, or matter commenced by or against any Person under any provision of the Bankruptcy
Code or under any other bankruptcy or insolvency law, including assignments for the benefit of creditors, formal or informal moratoria, compositions, extensions generally with its creditors, or proceedings seeking reorganization, arrangement, or
other similar relief. 
 “Instrument” has the meaning given in the Code, as such definition may be amended from time to
time, which defines an Instrument as a negotiable instrument or any other writing that evidences a right to payment of a monetary obligation, is not itself a security agreement or lease, and is of a type that in the ordinary course of business is
transferred by delivery with any necessary endorsement or assignment. Instrument shall include but not be limited to promissory notes. 
 “Inventory” means all present and future inventory, as defined in the Code, as such definition may be amended from time to time, in which Borrower has any interest and wherever located, and shall include but not be limited
to, goods held for sale or lease or to be furnished under a contract of service and all of Borrower’s present and future raw materials, work in process, finished goods, and packing and shipping materials, wherever located, and any documents of
title representing any of the above. 
 “Inventory Appraisal Fee” shall have the meaning set forth in Section 2.2.13
hereof. 
 “Inventory Borrowing Base” has the meaning set forth in the definition of Borrowing Base. 
 “Investment Property” has the meaning given in the Code, as such definition may be amended from time to time, which defines Investment
Property as securities, security accounts, commodity contracts, or commodity accounts. 
 “IRC” means the Internal Revenue
Code of 1986, as amended, and the regulations thereunder. 
 “Lender” has the meaning set forth in the preamble to this
Agreement. 
 “Lender Expenses” includes without limitation all of the following: 
 (a) costs or expenses (including without limitation taxes, photocopying, notarization, telecommunication, insurance premiums, and postage) paid by Lender;

 (b) costs and expenses required to be paid by Borrower under any of the Loan Documents that are paid or advanced by Lender; 
 (c) documentation, filing, recording, publication, appraisal (including periodic Collateral appraisals) and search fees assessed, paid, or incurred by
Lender in connection with Lender’s transactions with Borrower; 
 (d) costs and expenses incurred by Lender in the disbursement of funds
to Borrower (by wire transfer or otherwise); 
 (e) charges paid or incurred by Lender resulting from the dishonor of checks; costs and
expenses paid or incurred by Lender 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) costs and expenses paid or incurred by Lender in
examining Borrower’s Books; and 
  

			
	Page 5 of 36	 	Initial Here   ̈

 (g) costs and expenses of third party claims or any other suit paid or incurred by Lender in enforcing or
defending the Loan Documents and adjusting or settling disputes and claims with Account Debtors with respect to the Accounts; and Lender’s reasonable attorneys’ fees and expenses (whether for legal services incurred by and expenses from
outside counsel and/or from in-house counsel) incurred in advising, structuring, drafting, reviewing, administering, amending, terminating, enforcing (including attorneys’ fees and expenses incurred in such adjusted or settled disputes and
claims, and in connection with a “workout,” a “restructuring,” or an Insolvency Proceeding concerning Borrower or any Guarantor of the Obligations, irrespective of whether suit is brought). The attorneys’ fees incurred by
Lender in any Insolvency Proceeding shall include, without limitation, those incurred in connection with debtor-in-possession financing, motions for relief from automatic stay, and actions to determine dischargeability, and defending, or concerning
the Loan Documents. 
 “Letter of Credit Rights” has the meaning given in the Code, as such definition may be amended from
time to time, which defines Letter of Credit Rights as a right to payment or performance under a letter of credit, whether or not beneficiary has demanded or is at the time entitled to demand payment or performance. 
 “Loan Documents” means collectively, this Agreement, the Term Loan Documents, the Guaranty, and all notes, other guarantees, security
agreements, subordination agreements, and other agreements, documents and instruments now or at any time hereafter executed and/or delivered by Borrower or any Obligor in connection with this Agreement or otherwise, as the same now exist or may
hereafter be amended, modified, supplemented, extended, renewed, restated or replaced. 
 “Loan Fee” has the meaning given
in Section 2.2.9 hereof. 
 “Material Adverse Change” means a material adverse change in any one or more of the
following: (a) Borrower’s, any subsidiary’s, or any Guarantor’s assets, operations, business, or financial condition, or business or financial or financial prospects; (b) Borrower’s ability to pay and perform the
Obligations when due; (c) any property in which Lender holds a Security Interest; (d) the perfection or priority of any such Security Interest; or (e) Lender’s rights and remedies under any Loan Documents. 
 “Maximum Account Advance” means Five Million and 00/100 Dollars ($5,000,000.00). 
 “Maximum Amount” means Five Million and 00/100 Dollars ($5,000,000.00). 
 “Maximum Inventory Advance” means the lesser of One Million and 00/100 Dollars ($1,000,000.00) or fifty percent
(50%) of the A R Borrowing Base. 
 “Minimum Monthly Interest Payment” has the meaning given in Section 2.2.3
hereof. 
 “Net Face Amount” means, with respect to an Account, the gross face amount of such Account less all trade
discounts or other deductions to which the Account Debtor is entitled. 
 “Obligations” means (a) the due and punctual
payment of all amounts due or to become due under this Agreement; (b) the performance of all obligations of Borrower under the Loan Documents; and (c) all present and future obligations owing by Borrower to Lender whether or not for the
payment of money, whether or not evidenced by any note or other instrument, whether direct or indirect, absolute or contingent, due or to become due, joint or several, primary or secondary, liquidated or unliquidated, secured or unsecured, original
or renewed or extended, whether arising before, during or after the commencement of any bankruptcy case in which Borrower is a debtor, (each, a “Insolvency Proceeding”), including but not limited to Lender Expenses and any obligations
arising pursuant to letters of credit or acceptance transactions or any other financial accommodations; and all principal, interest, fees, charges, Lender Expenses, attorneys’ fees and accountants’ fees chargeable to Borrower or incurred
by Lender in connection with the Loan Documents. Except to the extent otherwise provided, this Agreement does not secure any obligation described above which is secured by a consensual lien on real property. 
 “Obligor” means Borrower and all Guarantors. 
 “Old Lender” means Comerica Bank. 
 “Overadvance” means the amount
by which the Obligations exceed the Allowable Amount. 
 “Payment Intangibles” means a General Intangible under which the
Account Debtor’s principal obligation is a monetary obligation. 
 “Permitted Indebtedness” means Indebtedness
evidenced by this Agreement or the Loan Documents and the Indebtedness set forth in the latest financial statements of Borrower submitted to Lender on or prior to the Closing Date or secured by Permitted Liens or refinancings, renewals, or
extensions of the foregoing, provided (a) the terms and conditions of such refinancings, renewals, or extensions do not materially impair the prospects of repayment of the Obligations by Borrower; (b) 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; (c) such refinancings, renewals, or extensions do not result in a shortening of the
average weighted maturity of the Indebtedness so refinanced, renewed, or extended; and (d) that to the extent that the Indebtedness that is refinanced was subordinated in right of payment to the Obligations, then the subordination terms and
conditions of the refinancing of the Indebtedness must be at least as favorable to Lender as those applicable to the refinanced Indebtedness; 
  

			
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 “Permitted Liens” means all of the following: 
 (a) liens and security interests held by Lender or agreed to by Lender in the Term Loan Documents; 
 (b) liens for unpaid taxes of Borrower that are not yet due and payable; 
 (c) liens and security interests granted against Equipment disclosed in writing by Borrower to Lender and consented to by Lender in writing; 
 (d) purchase money security interests and liens of lessors under capital leases to the extent that the acquisition or lease of the underlying asset was
permitted under this Agreement, and so long as the security interest or lien only secures the purchase price of the asset; 
 (e) easements,
rights of way, reservations, covenants, conditions, restrictions, zoning variances, and other similar encumbrances that do not materially interfere with the use or value of the property subject thereto; and 
 (f) obligations and duties as lessee under any lease existing on the date of this Agreement. 
 “Person” means and includes natural persons, corporations, limited partnerships, general partnerships, joint ventures, limited liability
companies, limited liability partnerships, trusts, land trusts, business trusts, or other organizations, irrespective of whether they are legal entities, and governments and agencies and political subdivisions thereof. 
 “Post Office Box” has the meaning given in Section 3.7.2 hereof. 
 “Premises” means the locations of Borrower consisting of its Chief Executive Office and any and all Warehouses. 
 “Prepayment” has the meaning given in Section 6.3 hereof. 
 “Prepayment Fee” means the fee described in Section 6.3 hereof. 
 “Prime Accounts” means those Accounts of Borrower that meet all of the following criteria: 
 (a) are acceptable to Lender; 
 (b) are
creditworthy; 
 (c) have been validly assigned as Collateral to Lender, giving Lender a first priority security interest therein and in all
proceeds thereof; 
 (d) as of the date of determining whether an Account is “prime” or not, no invoice is more than sixty
(60) days past due or remains uncollected more than ninety (90) days from the date of such invoice; 
 (e) strictly comply with all
Borrower’s warranties and representations to Lender; 
 (f) have been created by absolute sales of Borrower’s merchandise or
services; 
 (g) are genuine, bona fide and collectible; 
 (h) Borrower will have good, unencumbered and absolute title to Collateral free of all third party claims; 
 (i) are not subject to any dispute, right of offset, counterclaim, or right of cancellation or return; 
 (j) all property giving
rise to such Accounts will have been delivered from Borrower’s Premises to, and unconditionally accepted by, each Account Debtor; 
 (k)
Borrower has performed all things required of Borrower by the terms of all agreements or purchase orders giving rise to such Accounts; 
 (l)
are due and unconditionally payable on terms of thirty (30) days or less, or on such other terms (as may be acceptable to Lender) which are expressly set forth on the face of all invoices, copies of which shall be delivered to Lender, and no
account will then be past due; 
 (m) are not Accounts with respect to which goods are placed on consignment, guaranteed sale, or other terms
by which the payment by the Account Debtor may be conditional; 
 (n) are not Accounts with respect to which the Account Debtor is an
officer, employee, partner, joint venturer or agent of Borrower; 
  

			
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 (o) are not Accounts with respect to which the Account Debtor is a resident of a country other than the
United States of America; 
 (p) are not Accounts with respect to which the Account Debtor is the United States of America or any department,
agency or instrumentality of the United States of America; 
 (q) are not Accounts with respect to which the Account Debtor is any state of
the United States of America or any city, county, town, municipality or division thereof; 
 (r) are not Accounts with respect to which the
Account Debtor disputes liability or makes any claim, or has any defense, crossclaim, counterclaim or offset; 
 (s) are not Accounts with
respect to which any Insolvency Proceeding is filed by or against the Account Debtor, or if an Account Debtor becomes insolvent, fails or goes out of business; 
 (t) are not Accounts with respect to which Borrower is or may become liable to the Account Debtor for goods sold or services rendered by the Account Debtor to Borrower; 
 (u) are not Accounts which in the aggregate from one Account Debtor constitutes twenty-five percent (25%) of total Accounts, but the portion not in
excess of such percentage may be deemed Prime Accounts; and 
 (v) are not Accounts from any one Account Debtor of which twenty-five percent
(25%) is ninety (90) days old or older. 
 “Prime Rate” means the variable rate of interest announced as the
“prime” rate in the Western Edition of the Wall Street Journal which is in effect from time to time; provided that the Prime Rate shall at all times be deemed to be not less than eight percent (8.00%) per annum (the
“Deemed Prime Rate”). 
 “RCRA” has the meaning given in the definition of Environmental Laws. 
 “Real Property Collateral” means that or those certain item(s) of real property pledged by Borrower and/or Guarantor respectively,
pursuant to this Agreement and the Loan Documents. 
 “Renewal Term” shall have the meaning given in Section 6.1.

 “Report of Assignment” means the form with which invoices are transmitted to Lender. 
 “Software” has the meaning given in the Code, which defines Software as a computer program and any supporting information provided in
connection with a transaction relating to the program. 
 “Solvent” means that a Person is able to pay its debts and other
liabilities, contingent obligations and other commitments as they mature in the normal course of business, and 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. 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. 
 “Supporting Obligations” has the meaning given in the Code, as
such definition may be amended from time to time, which defines a Supporting Obligation as a letter-of-credit right or secondary obligation that supports the payment or performance of an Account, Chattel Paper, a Document, a General Intangible, an
Instrument, or a Financial Asset, including without limitation, Investment Property. 
 “Term Loan” means the loan extended
by Lender to Borrower pursuant to the Term Loan Documents described in Section 24.15 hereof, if applicable. 
 “Term Loan
Documents” means those documents described in Section 24.15 hereof, if any, and all amendments and renewals thereof. 
 “Termination Notice” has the meaning given in Section 6.1 hereof. 
 “Trade Fixtures” means
equipment and furnishings which are used in Borrower’s business or operations which become affixed to the Premises or other location, but which can be removed without causing undue damage to such Premises, or to such other location. 

“UCC” has the meaning given in the definition of Code. 
 “Voidable Transfer” has the meaning given in Section 24.11 hereof. 
 “Warehouse” means that or those warehouse(s) located at Chrome 52 Logistics, 2215 Carpenter Street, Abbotsford, British Columbia, Canada V2T 6E9. 
 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” is used in respect of a financial covenant or a related definition, it shall be understood to mean Borrower on a consolidated
basis unless the context clearly requires otherwise. 
  

			
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 1.3. Code. All other terms contained in this Agreement, which are not specifically defined herein,
shall have the meanings provided in the Code to the extent the same are used herein. 
 1.4. Construction. Unless the context of this
Agreement 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,” “hereby,” “hereunder,” and similar terms in this Agreement refer to this Agreement as a whole and not to any
particular provision of this Agreement. Any 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. 
 1.5. Authenticated Documents Any reference herein to a “writing”, a “written document”, or an executed
document shall also mean an “Authenticated” writing or document or “Authentication” unless Lender shall otherwise require an original writing. 
 1.6. Schedules and Exhibits. All of the schedules and exhibits attached to this Agreement shall be deemed incorporated herein by reference as though set forth in full herein. 
 2. Loan and Terms of Payment. 
 2.1.
Revolving Advances Against Accounts and Inventory. 
 2.1.1. Advances Not to Exceed Borrowing Base. Subject to the terms and
conditions of this Agreement, from the Closing Date until termination of this Agreement, Lender shall, from time to time, at the request of Borrower, make advances (the “Advances”) to Borrower so long as, before and after such Advance, the
Obligations do not exceed the Allowable Amount. Borrower shall draw all available funds under the A R Borrowing Base prior to drawing any available funds under the Inventory Borrowing Base. Amounts borrowed pursuant to this Section may be repaid
and, subject to the terms and conditions of this Agreement, reborrowed at any time during the term of this Agreement. 
 2.1.2. Reduction
of Advance Rates. Lender may, in its discretion, from time to time, upon not less than five (5) days’ prior notice to Borrower, reduce the Borrowing Base to the extent that Lender determines in good faith that: (a) the Dilution
Rate with respect to the Accounts for any period (based on the ratio of (1) the aggregate amount of reductions in Accounts other than as a result of payments in cash to (2)) the aggregate amount of total sales) has increased in any
material respect or may be reasonably anticipated to increase in any material respect above historical levels; (b) the general creditworthiness of Account Debtors has declined; (c) the number of days of the turnover of the Inventory for
any period has changed in any material respect; (d) the liquidation value of the Eligible Inventory, or any category thereof, has decreased; or (e) the nature and quality of the Inventory has deteriorated. In determining whether to reduce
the Borrowing Base, Lender may consider events, conditions, contingencies, or risks that are also considered in determining Prime Accounts or Eligible Inventory 
 2.1.3. Authorization for Advances. Subject to the terms and conditions of this Agreement, Lender is authorized to make Advances (a) upon telephonic, facsimile or other instructions received from anyone
purporting to be an Authorized Officer of Borrower; or (b) at the sole discretion of Lender, and notwithstanding any other provision in this Agreement, if necessary to meet any Obligations, including but not limited to any interest not paid
when due. Notwithstanding anything to the contrary contained herein, Lender shall not be obligated to make an Advance if, before or as a result thereof, the Obligations shall exceed the Allowable Amount. 
 2.1.4. Establish Deposit Account; Provide Control Agreement. Borrower agrees to establish and maintain a single designated Deposit Account for
the purpose of receiving the proceeds of the Advances requested by Borrower and made by Lender hereunder. Unless otherwise agreed by Lender and Borrower, any Advance requested by Borrower and made by Lender hereunder shall be made to such designated
Deposit Account. Borrower agrees to provide Lender with a control agreement in form and substance acceptable to Lender, signed by the bank or financial institution at which the Deposit Account is located. If Borrower’s bank or financial
institution refuses to or does not cooperate in executing such control agreement, Borrower shall move its account to a financial institution willing to execute a control agreement. 
 2.2. Interest: Rates, Payments, Fees, and Calculations. 
 2.2.1. Interest Rates. 
 (a) On Advances Against Accounts. All Advances against Accounts
hereunder shall bear interest, on the Average Daily Balance, at a per annum rate of Two and one-half percent (2.50%) in excess of (1) the Prime Rate; or (2) the Deemed Prime Rate, whichever is higher. 
 (b) On Advances Against Inventory. All Advances against Inventory hereunder shall bear interest, on the Average Daily Balance, at a per
annum rate of Two and one-half percent (2.50%) in excess of (1) the Prime Rate; or (2) the Deemed Prime Rate, whichever is higher. 
  

			
	Page 9 of 36	 	Initial Here   ̈

 2.2.2. Cumulative Minimum Annual Interest Payment. Interest payable under this Agreement, on a
cumulative annual basis, shall not be less than --------—N/A--------— and 00/100 Dollars ($--------—N/A--------—) (the “Cumulative Minimum Annual Interest Payment”). 
 2.2.3. Minimum Monthly Interest Payment. Interest together with the Administrative Fee payable under this Agreement on a monthly basis, shall not
be less than Two Thousand and 00/100 Dollars ($2,000.00) (the “Minimum Monthly Interest Payment”). 
 2.2.4. Default
Rate. All Obligations shall bear interest, from and after the occurrence and during the continuance of an Event of Default, at a rate equal to an additional three percent (3.00%) per annum in excess of the applicable interest rate as
set forth in Section 2.2.1 (the “Default Rate”). Lender’s failure to assess interest at the Default Rate as provided hereunder shall not be deemed a waiver by Lender to charge such Default Rate. Lender reserves the right, and
Borrower hereby acknowledges that Lender may, recalculate interest at the Default Rate. 
 2.2.5. Interest Payments. Subject to
Section 2.2.4, interest on the Obligations shall be payable monthly, in arrears, shall be computed at the applicable interest rate as set forth in Section 2.2.1, and shall be due on the last day of each month following the accrual thereof.
Interest shall be payable commencing on March 1, 2007. Any interest not paid when due shall be compounded by becoming a part of the Obligations, and such interest shall thereafter accrue interest at the rate then applicable hereunder.

 2.2.6. Calculation of Interest. 
 All interest charged hereunder shall be computed on the basis of a three hundred sixty (360) day year for the actual number of days elapsed. Notwithstanding anything to the contrary contained herein, any interest
rate calculated hereunder shall be rounded up to the closest one-quarter of one percent (1/4 of 1%), with no adjustments made for rate changes of less than one-quarter of one percent (1/4 of 1%). Lender shall, for the purpose of the computation of
interest due hereunder, add the Clearance Days to any payments by check, which is acknowledged by the parties to constitute an integral aspect of the pricing of Lender’s facility to Borrower, and shall apply irrespective of the characterization
of whether receipts are owned by Borrower or Lender. Should any check not be honored when presented for payment, then Borrower shall be deemed not to have made such payment, and interest shall be recalculated accordingly. 
 2.2.7. Computation upon Change in Prime Rate. In the event the Prime Rate changes, the applicable interest rate hereunder automatically and
immediately shall be increased or decreased by an amount equal to such change in the Prime Rate. 
 2.2.8. Principal Payments.
Commencing on --------—N/A--------— and continuing on the first (1st) day of every month through --------—N/A--------—, Borrower shall make equal monthly principal payments in the sum of
--------—N/A--------— Dollars ($--------—N/A--------—). 
 2.2.9. Loan Fee. At the time of funding hereof,
annually (every twelve (12) months) thereafter, and while any Obligations remain outstanding to Lender, Borrower agrees to pay Lender a loan fee equal to One percent (1.00%) of the Maximum Amount (the “Loan Fee”).

 2.2.10. Administrative Fee. While any Obligations remain outstanding to Lender, on or before the first (1st) day of each
month, Borrower agrees to pay Lender an administrative fee equal to --------—N/A--------— percentage points (--------—N/A--------—%) per month of the Average Daily Balance during the preceding month (the
“Administrative Fee”). 
 2.2.11. Deposits and Fees for Lender Expenses. Borrower shall pay to Lender the Lender Expenses
incurred by Lender in connection with the negotiation and preparation of this Agreement and the Loan Documents, including but not limited to Lender. 
 (a) Lender has received or will receive a deposit in the amount of Three Thousand Five Hundred and 00/100 Dollars ($3,500.00) (the “Good Faith Deposit”) to be applied against such Lender Expenses
consisting of hard costs. Any unpaid portion of the Good Faith Deposit shall be due and payable at the funding hereof. In the event that such Lender Expenses are less than the Good Faith Deposit, any such excess amount will be applied to the Loan
Fee and then to Administrative Fee, or if the Loan Fee and Administrative Fee have been paid in full, such excess amount shall be refunded to Borrower. 
 (b) Lender has received or will receive a documentation fee/legal deposit in the amount of Four Thousand and 00/100 Dollars ($4,000.00) to be applied against Lender Expenses consisting of document
preparation and legal fees and costs, (the “Documentation Fee/Legal Deposit”). Any unpaid portion of the Documentation Fee/Legal Deposit shall be due and payable at the funding hereof. 
 2.2.12. Audit Fees. Borrower shall pay to Lender on demand semi-annual audit fees of Seven Hundred Fifty and 00/100 Dollars ($750.00)
each, plus actual out of pocket costs related to each audit. 
 2.2.13. Inventory Appraisal Fee. Borrower shall pay to Lender on
demand an annual Inventory Appraisal Fee not to exceed the amount of Three Thousand Five Hundred and 00/100 Dollars ($3,500.00) per year, for any year in which i) funds are available to Borrower under the Inventory Borrowing Base; or
ii) funds that have been advanced under the Maximum Inventory Amount are owing and payable to Lender. 
  

			
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 3. Payment of Advances. 
 3.1. Delivery to Lender. Borrower shall remit to Lender all payments received by Borrower on Accounts pledged to Lender. Borrower shall pay, on
demand, (a) the Net Face Amount of all Delinquent Accounts; or (b) the Net Face Amount of Accounts more than sixty (60) days past due. Borrower shall pay the entire unpaid balance of the Obligations immediately upon: (a) the
occurrence of an Event of Default; or (b) in the case of termination, as set forth in Section 6.1, whether by notice, lapse of time or otherwise, whichever occurs first. 
 3.2. Application of Payments. Payments received shall be applied first against fees and Lender Expenses, if any, then against interest and then
against principal. To the extent Borrower uses Advances under this Agreement to purchase any Collateral, Borrower’s repayment of the Advances shall apply on a “first-in-first-out” basis so that the portion of the Advances used to
purchase a particular item of Collateral shall be paid in the chronological order in which Borrower purchased the Collateral. 
 3.3.
Clearance Days. Payments made by check shall be deemed to be made three (-3- ) Business Days after receipt by Lender of such check to allow for, and subject to clearance of such check (the “Clearance Days”). 
 3.4. Overadvances. In the event of an Overadvance, as applicable, such event shall not limit, waive or otherwise affect any rights of Lender in
that circumstance or on any future occasions and Borrower shall, upon demand by Lender, which may be made at any time or from time to time, immediately repay to Lender the entire amount of the Overadvance. 
 3.5. Payment of Obligations. Notwithstanding anything to the contrary contained in this Agreement, no payment received by Lender shall constitute
payment thereof unless and until final payment thereof has been received. 
 3.6. Statements of Obligations. Lender shall render
statements to Borrower of the Obligations, including principal, interest, fees, and an itemization of all charges and expenses constituting Lender Expenses owing, and such statements shall be conclusively presumed to be correct and accurate and
constitute an account stated between Borrower and Lender unless, within thirty (30) days after receipt thereof by Borrower, Borrower shall have delivered to Lender by registered or certified mail at its address specified herein, written
objection thereto describing the error or errors contained in any such statements. 
 3.7. Notification of Accounts. Lender and
Borrower have agreed to the terms set forth below with respect to notification of Accounts. 
 3.7.1. Right of Lender to Notify
Accounts. Lender may, at any time, irrespective of whether an Event of Default has occurred, without notice to or the assent of Borrower: (a) notify any Account Debtor that the underlying Account has been assigned to Lender by Borrower and
that payment thereof is to be made to the order of and directly and solely to Lender; and (b) send, or cause to be sent by its designee, written or telephonic requests (which may identify the sender by a pseudonym) for verification of any
Account directly to the appropriate Account Debtor or any bailee with respect thereto. At Lender’s request, all invoices and statements sent to any Account Debtor or any bailee shall state that the relevant Account has been assigned to Lender
and that any payments in respect thereof are payable directly and solely to Lender. 
 3.7.2. Collateral Account. Borrower shall
direct, at Borrower’s expense and in the manner requested by Lender from time to time, that remittances and all other collections and proceeds of Accounts and other Collateral be (a) deposited into a lock box account (the “Collateral
Account”) maintained in Lender’s name as set forth in Exhibit A; or (b) sent to Lender or a post office box (the “Post Office Box”) designated by or in the name of Lender, or in the name of Borrower, but as to which
access is limited solely to Lender also as set forth in Exhibit A. In connection with the Collateral Account, Borrower shall execute such lockbox agreement as Lender shall require. Borrower shall maintain with Lender, and Borrower hereby
grants to Lender a security interest in, the Deposit Account representing the Collateral Account, over which Borrower shall have no control and into which the proceeds of all Collateral shall be deposited immediately upon their receipt. 

3.7.3. Collateral Control Account. Lender may, on occasion, agree to permit Borrower to maintain a Deposit Account in addition to the
Collateral Account (the “Collateral Control Account”), provided (a) Lender has received a control agreement in form and substance acceptable to Lender, which is fully executed by the financial institution where such account is
located; and (b) such account is a blocked account to which only Lender may have access. A description of said Collateral Control Account is set forth in Exhibit A hereto. 
 3.7.4. Procedure Regarding Mail Delivered to the Post Office Box. All mail delivered to the Post Office Box shall be opened by Lender, checks
contained therein shall be endorsed by Lender, and all such items shall be deposited by Lender into the Collateral Account. 
 3.7.5.
Wire Transfers. Borrower shall direct all Account Debtors on Accounts who make payments by electronic transfer of funds to wire such funds directly to the Collateral Account. 
 3.7.6. Monies Held in Trust. Borrower shall hold in trust for Lender all amounts Borrower may receive in payment of or relating to any Accounts
despite directions to make payment to the Post Office Box or the Collateral Account, and immediately deliver such payments to Lender in their original form as received, with proper endorsements. Borrower and all of its Affiliates, subsidiaries,
shareholders, directors, employees or agents shall, acting as trustee for Lender, receive, as the property of Lender, any monies, checks, notes, drafts, or any other payment relating to and/or proceeds of Accounts or other Collateral which come into
their possession or under their control and immediately upon receipt thereof, shall deposit or cause the same to be deposited in the Collateral Account, or remit the same or cause the same to be remitted, in kind, to Lender. In no event shall the
same be commingled with Borrower’s own funds. Borrower shall continue to remit such payments to Lender until such time as Borrower’s Obligations have been paid in full. 
  

			
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 3.7.7. Authorization. Notwithstanding any other provision of this Agreement, Borrower irrevocably
authorizes Lender to transfer into the Collateral Account any funds in payment of or relating to the Accounts that have been deposited into other deposit accounts with Lender or that Lender has otherwise received. 
 3.7.8. Lender’s Right to Items in Collateral Account. Lender shall have all right, title and interest in all of the items contained from time
to time in the Collateral Account and their proceeds. 
 3.7.9. Lender Has Sole Control Over Account. Neither Borrower, nor any Person
or entity claiming through Borrower shall have any right in or control over the use of, or any right to withdraw any amount from the Collateral Account which shall be under Lender’s sole control. Unless the instruments so deposited in the
Collateral Account are dishonored, or unless Lender shall in Lender’s discretion have remitted the amount thereof to Borrower, Lender shall credit the amount thereof against Borrower’s Obligations to Lender. 
 3.7.10. Lender Authorization. 
 (a)
Borrower hereby irrevocably authorizes Lender and any designee of Lender, at Borrower’s sole expense, to exercise at any time in Lender’s or such designee’s discretion all or any of the following powers as attorney in fact of Borrower
until all of the Obligations have been paid in full: (1) receive, take, endorse, assign, deliver, accept and deposit, in the name of Lender or Borrower, any and all cash, checks, commercial paper, drafts, remittances and other instruments and
documents relating to the Collateral or the proceeds thereof (whether checks or other forms of payment are (i) in the name of Borrower; (ii) any other name under which it now does business or does business in the future;(iii) or names of
its products now or in the future, and Borrower additionally agrees not to make any protest of any kind against Lender for negotiating such checks or other items described herein); (2) take or bring, in the name of Lender or Borrower, all
steps, actions, suits or proceedings deemed by Lender necessary or desirable to effect collection of or other realization upon the Accounts and other Collateral; (3) after an Event of Default, extend the time of payment of, compromise or settle
for cash, credit, return of merchandise, and upon any terms or conditions, any and all Accounts or other Collateral which includes a monetary obligation and discharge or release any Account Debtor or other obligor (including filing of any public
record releasing any lien granted to Borrower by such Account Debtor), without affecting any of the Obligations; (4) execute in the name of Borrower and file against Borrower in favor of Lender financing statements or amendments with respect to
the Collateral; (5) pay any sums necessary to discharge any lien or encumbrance which is senior to Lender’s security interest in the Collateral, which sums shall be included as Obligations hereunder; (6) at any time, irrespective of
whether an Event of Default has occurred, without notice to or the assent of Borrower, notify any Account Debtor obligated with respect to any Account, that the underlying Account has been assigned to Lender by Borrower and that payment thereof is
to be made to the order of and directly and solely to Lender; (7) after an Event of Default, change the address for delivery of mail to Borrower and to receive and open mail addressed to Borrower; (8) send requests for verification of
Accounts; (9) to make, settle, and adjust all claims under Borrower’s policies of insurance and make all determinations and decisions with respect to such policies of insurance; (10) to settle and adjust disputes and claims respecting
the Accounts directly with Account Debtors, for amounts and upon terms which Lender determines to be reasonable; (11) Lender may cause to be executed and delivered any documents and releases which Lender determines to be necessary; and
(12) qualify Borrower to do business in any state. 
 (b) Borrower authorizes Lender to accept, indorse and deposit on behalf of
Borrower any checks tendered by an Account Debtor “in full payment” of its obligation to Borrower. Borrower shall not assert against Lender any claim arising therefrom, irrespective of whether such action by Lender affects an accord and
satisfaction of Borrower’s claims, under §3-311 of the Code, or otherwise. 
 (c) BORROWER HEREBY RELEASES AND EXCULPATES LENDER,
LENDER’S OFFICERS, EMPLOYEES, AGENTS, DESIGNEES, ATTORNEYS, AND ACCOUNTANTS FROM ANY AND ALL LIABILITY ARISING FROM ANY ACTS UNDER THIS AGREEMENT OR RELATED TO THIS AGREEMENT IN ANY MANNER OR IN FURTHERANCE THEREOF, WHETHER OF OMISSION OR
COMMISSION, AND WHETHER BASED UPON ANY ERROR OF JUDGMENT OR MISTAKE OF LAW OR FACT AND WHETHER BASED UPON ANY LEGAL THEORY, INCLUDING WITHOUT LIMITATION, BREACH OF CONTRACT, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW OR STATUTORY
CLAIMS, EXCEPT FOR LIABILITY DIRECTLY CAUSED BY LENDER’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. IN NO EVENT SHALL LENDER HAVE ANY LIABILITY TO BORROWER FOR LOST PROFITS OR OTHER SPECIAL OR CONSEQUENTIAL DAMAGES. 
 (d) Borrower acknowledges and agrees that Lender may from time to time at its discretion run such further credit reports and other reports as it may deem
necessary to continue to keep itself apprised regarding the continued financial condition of Borrower during the term of the Loan and hereby authorizes Lender to run such credit and other reports from time to time as Lender deems appropriate.

 4. Audits. Lender shall have the right to conduct audits of Borrower’s Accounts, Inventory, and Borrower’s Books on a
semi-annual basis during the term of this Agreement. The cost of each audit shall be paid by Borrower, which cost per audit shall not exceed the sum set forth in Section 2.2.12. Borrower shall pay such cost within five (5) Business Days of
receipt of invoice and if such cost is not paid by such date, Lender may charge such cost against the Obligations at such time or if not charged at such time, upon termination. In addition, upon the occurrence of an Event of Default, Lender may
conduct such additional audits as it deems appropriate, also at Borrower’s cost, but not subject to any limitation contained in Section 2.2.12. 
  

			
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 4.1. Delivery of Collateral. At such times as Lender may request and in the manner specified by
Lender, Borrower shall deliver to Lender or Lender’s representative original invoices, agreements, proof of rendition of services and delivery of goods and other documents evidencing or relating to the transactions which gave rise to any of the
Collateral, together with customer statements, schedules describing the proceeds or statements of account and confirmatory assignments to Lender of the proceeds in form and substance satisfactory to Lender and duly executed by Borrower. Without
limiting the provisions of any other section of this Agreement, Borrower will promptly notify Lender, in writing, of Borrower’s granting of credits, discounts, allowances, deductions, return authorizations or the like with respect to any
proceeds. In no event shall any such schedule or confirmatory assignment (or the absence thereof or omission of any proceeds therefrom) limit or in any way be construed as a waiver, limitation, or modification of the liens or rights of Lender or the
warranties, representations, and covenants of Borrower under this Agreement. In addition, in the event that any Collateral, including proceeds, is evidenced by or consists of Chattel Paper, Documents, Instruments, or Financial Assets, including
without limitation, Investment Property, Borrower shall, immediately upon written request therefor from Lender, endorse and assign such Chattel Paper, Documents, Instruments, or Financial Assets, including without limitation, Investment Property
over to Lender and deliver actual physical possession of such Chattel Paper, Documents, Instruments, or Financial Assets, including without limitation, Investment Property to Lender with, if applicable, stock powers in blank executed by Borrower.

 5. Conditions Precedent to Advances. 
 5.1. Conditions Precedent to Initial Advance. The obligation of Lender to make the initial Advance is subject to the fulfillment, to the satisfaction of Lender and its counsel, of each of the conditions set
forth below on or before the Closing Date. 
 5.1.1. Lien in First Position. Lender shall be satisfied that its lien against the
Collateral is a first priority perfected security interest. 
 5.1.2. UCC Search. Lender shall have received searches with results
reflecting the filing of its financing statements and fixture filings. 
 5.1.3. Documents Contemplated Herein. Lender shall have
received all of the Loan Documents, duly executed, and each such document shall be in full force and effect. 
 5.1.4. Authorization.
Lender shall have received such certificate of authorization, corporate resolution, unanimous written consent, or other writing as Lender deems appropriate under the circumstances, duly executed by the secretary, general partner, managing member, or
other appropriate representative of Borrower, authorizing the execution and delivery of this Agreement and the other Loan Documents to which Borrower is a party and authorizing one or more specific officers, general partners, managing members, or
other persons to execute and deliver same to Lender. 
 5.1.5. Bylaws, etc. Lender shall have received copies of Borrower’s
By-laws and Articles, Certificate of Incorporation, Articles of Organization, Partnership Agreement, Trust Agreement, or Operating Agreement all duly certified as appropriate, as amended, modified, or supplemented to the Closing Date. 
 5.1.6. Certificate From State of California. Lender shall have received a certificate of status, corporate or otherwise, with respect to
Borrower dated as of a date acceptable to Lender, by the Secretary of State of California, which certificate shall indicate that Borrower is in good standing in such state. 
 5.1.7. Certificates From States Other Than California. Lender shall have received certificates of status, corporate or otherwise, with
respect to Borrower dated as of a date acceptable to Lender, issued by the Secretary of State of the states in which its failure to be duly qualified or licensed would have a Material Adverse Change in the financial condition or properties and
assets of Borrower, and shall indicate that Borrower is in good standing. 
 5.1.8. Insurance Policies and Endorsements. Lender shall
have received the certified copies of the policies of insurance, together with the endorsements thereto, as further described in Section 9 hereof, as are required hereby, the form and substance of which shall be satisfactory to Lender and its
counsel. 
 5.1.9. Certificates of Title. Lender shall have received duly executed certificates of title with respect to that portion
of the Collateral that is subject to certificates of title, if any. 
 5.1.10. Evidence of Payment of Taxes. Lender shall have
received satisfactory evidence that all returns required to be filed by Borrower have been timely filed and all taxes upon 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. 
 5.1.11. Subordination Agreements. Lender
shall have received subordination agreements in form satisfactory to Lender from all parties that Lender shall require. 
 5.1.12.
Guaranty. Lender shall have received the duly executed Guaranty from Guarantor, and Guarantor shall have executed the Acknowledgment and Agreement by Guarantor set forth at the end of this Agreement. 
  

			
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 5.1.13. Payment of All Fees and Lender Expenses. All fees and Lender Expenses required to be paid
in connection with this Agreement shall have been paid. 
 5.1.14. Deed of Trust From Guarantor. Lender shall have received the Deed
of Trust for the Real Property Collateral commonly known as --------—N/A--------—, which secures the obligations of Guarantor under the Guaranty and which shall be in --------—N/A--------—
(--------—N/A--------—) priority against such Real Property Collateral. 
 5.1.15. Bailment Agreements; Waiver and Consents
by Real Property Owner(s). Borrower shall execute and deliver, or cause to be executed and delivered to Lender such agreements, documents, and instruments in form and substance acceptable to Lender, as Lender may deem reasonably necessary or
desirable to protect its interests in the Collateral at the Premises, including without limitation, UCC-1 Financing Statements and Waivers and Consents by Real Property Owner(s) and/or Bailment and Security Agreements. The Inventory and Equipment
shall not, at any time now or hereafter, be stored with a bailee, warehouseman, or similar party without Lender’s prior written consent. Additionally, Borrower shall not open any new locations unless Borrower (a) gives Lender thirty
(30) days’ prior written notice of the intended opening of any such new location; and (b) executes and delivers, or causes to be executed and delivered, to Lender such agreements, documents, and instruments in form and substance
acceptable to Lender, as Lender may deem reasonably necessary or desirable to protect its interests in the Collateral at such location, including without limitation, UCC-1 Financing Statements and Waiver and Consent by Real Property Owner(s) and/or
Bailment and Security Agreements. 
 5.1.16. Pre-Funding Audit. Lender shall have performed a pre-funding audit of Borrower’s
Accounts and Inventory, with results satisfactory to Lender. 
 5.1.17. Key Person Life Insurance. Lender shall have received an
assignment of Borrower’s interest in the key person insurance on the life of --------—N/A--------— in the amount of --------—N/A--------— and 00/100 Dollars ($--------—N/A--------—). 
 5.1.18. Assignment of Insurance Claims. Lender shall have received an assignment of Borrower’s claim against its insurance company in the
sum of approximately --------—N/A--------— and 00/100 Dollars ($--------—N/A--------—). 
 5.1.19. Payment to
Old Lender; Termination of Old Lender’s Security Interest. Old Lender shall have been paid in full and Old Lender’s security interest in any assets of Borrower and all Collateral shall have been terminated. 
 5.1.20. Control Agreements. Borrower shall execute, or cause to be executed, and Lender shall have received such control agreements, in form and
substance satisfactory to Lender and its counsel, regarding Deposit Accounts, Investment Property, or such other Collateral as Lender may require. 
 5.1.21. Other Documents and Legal Matters. All other documents in connection with the transactions contemplated by this Agreement shall have been delivered or executed or recorded and shall be in form and substance satisfactory to
Lender and its counsel, including without limitation a Report of Assignment of Invoices and all procedure requirements, whether pursuant to a procedure manual or otherwise, shall have been met. 
 5.2. Conditions Precedent to All Advances. The items set forth below shall be conditions precedent to all Advances hereunder and under the Loan
Documents. 
 5.2.1. Representations and Warranties. 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 Advance, as though made on and as of such date (except to the extent that such representations and warranties relate solely to an earlier date). 
 5.2.2. No Event of Default. No Event of Default or event which with the giving of notice or passage of time would constitute an Event of Default
shall have occurred and be continuing on the date of such Advance, nor shall either result from the making of the Advance. 
 5.2.3. No
Injunction, etc. No injunction, writ, restraining order, or other order of any nature prohibiting, directly or indirectly, the making of such Advance shall have been issued and remain in force by any governmental authority against Borrower,
Lender, or any Affiliate. 
 5.2.4. Procedural Requirements. Borrower shall have submitted a Report of Assignment and followed such
other procedures as Lender may require pursuant to a procedure manual or otherwise. 
 6. Basic Term; Termination; Prepayment Fee.

 6.1. Basic Term. This Agreement will be effective upon the Closing Date, will continue in full force and effect for twelve
(-12-) months thereafter (the “Basic Term”), and shall be further automatically extended, for successive periods equal to the term of the Basic Term (each, a “Renewal Term”), unless Borrower shall have given the Lender
written notice of its intention to terminate (a “Termination Notice”) at least thirty (30) days prior to the anniversary of each Basic Term anniversary, whereupon this Agreement shall terminate as of the date fixed in the Termination
Notice. Notwithstanding any contrary provisions herein, Lender reserves the right to terminate this Agreement at its sole discretion upon giving thirty (30) days’ prior written notice to Borrower pursuant to provisions of Section 15
hereof. 
  

			
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 6.2. Termination; Payments Due upon Termination. Upon termination of this Agreement whether
pursuant to Section 6 or due to the occurrence of an Event of Default pursuant to Section 11, Borrower shall pay the Obligations to Lender. 
 6.3. Prepayment Fee. The Obligations may be prepaid by Borrower at any time and to the extent such Prepayment occurs, Borrower shall pay to Lender a sum equal to the amount of (a) the Cumulative Minimum
Annual Interest Payment less interest paid during the Basic Term or Renewal Term; or (b) an amount equal to the Minimum Monthly Interest Payment times the number of months remaining in the Basic Term or Renewal Term, as applicable (the
“Prepayment Fee”). In addition, Borrower shall also pay any prepayment penalties provided for in the Term Loan Documents or any other agreement with Lender. “Prepayment” includes any payment or other reduction of the balance of
the Obligations, regardless of whether such payment or other reduction (1) is voluntary or involuntary; (2) is occasioned by Lender’s acceleration of the Obligations or demand hereunder; (3) is made by Borrower or other third
party, including Guarantor; (4) results from Lender’s receipt or collection of proceeds of its Collateral, including insurance proceeds and condemnation awards; (5) results from Lender’s exercise of its right of setoff; and/or
(6) is made during an Insolvency Proceeding, or is made pursuant to any plan of reorganization or liquidation. 
 6.4. Other
Obligations Upon Termination of this Agreement. Upon termination of this Agreement whether pursuant to Section 6 or due to the occurrence of an Event of Default pursuant to Section 11, the Obligations owed under the Term Loan Documents
or any other Loan Documents shall be accelerated and shall be due, owing and payable at such time, including without limitation, all Lender Expenses. 
 6.5. Rights upon Termination. No termination of this Agreement shall relieve or discharge Borrower of Borrower’s duties, Obligations, or covenants hereunder, including without limitation the obligation to
continue to turn over sales information and invoices, and Lender’s continuing security interests in the Collateral shall remain in effect until all Obligations have been fully and finally discharged and Lender’s obligation to provide
Advances hereunder is terminated. 
 7. Creation of Security Interest. 
 7.1. Grant of Security Interest. In order to secure the payment and performance in full of all of the Obligations, Borrower hereby grants to
Lender a continuing security interest in the Collateral. 
 7.2. Express Authority of Lender to Execute UCC Financing Statement(s).
Notwithstanding any provision hereof, Lender is hereby expressly authorized to execute and file on behalf of Borrower, UCC Financing Statement(s), including but not limited to corrections, amendments, and modifications thereof, including, without
limitation, the use of an abbreviated description of Collateral such as “All Assets of the Borrower” on any and all of the foregoing. 
 7.3. Delivery of Additional Documentation Required. At any time upon the request of Lender, Borrower shall hereby authorize the preparation and filing by Lender and/or shall execute and deliver to Lender all financing statements,
continuation financing statements, control agreements, fixture filings, security agreements, chattel mortgages, pledges, assignments, endorsements of certificates of title, applications for title, affidavits, reports, notices, schedules of Accounts,
letters of authority, and all other documents that Lender may reasonably request, in form satisfactory to Lender, to perfect and continue the perfection of Lender’s security interests in the Collateral, and in order to fully consummate all of
the transactions contemplated hereby and under the Loan Documents. 
 8. Representations, Warranties, and Covenants. 
 8.1. Borrower’s Representations, Warranties, and Covenants. So long as Borrower is indebted to Lender, Borrower warrants, represents, and
agrees that the statements set forth herein are true and correct and shall remain so. 
 8.1.1. Borrower Sole Owner of Collateral;
Personal Property; First Priority Security Interest. All Collateral is (a) solely owned by Borrower; (b) shall remain personal property at all times except to the extent granted in connection with the pledge of Real Property
Collateral; and (c) all security interests against any Collateral given or caused to be given by Borrower to Lender are and will be first priority security interests thereon (except insofar as Borrower has notified Lender to the contrary in
writing and Lender has consented to such prior security interest by a third party). 
 8.1.2. No Other Liens. Borrower has good and
indefeasible title to the Collateral and the Collateral is free and clear of all liens, encumbrances, security interests, and adverse claims or restrictions on transfer or pledge except: (a) Permitted Liens; and (b) as disclosed in writing
by Borrower to Lender; and further, (c) all such liens, encumbrances, security interests, and adverse claims that have either previously or concurrently herewith, been consented to in writing by Lender. 
 8.1.3. Condition of Collateral; No Transfer of Collateral. The Collateral is (a) kept in good condition and repair; (b) is not subject
to waste; and (c) will not (except for sales of Inventory in the ordinary course of business) be sold, transferred, assigned or removed from the Premises without first obtaining Lender’s prior written consent. 
 8.1.4. Facts, Figures and Representations True and Correct. All facts, figures, and representations given, or caused to be given, by Borrower to
Lender in connection with the value of the Collateral or regarding each Advance or Account or pertaining to anything done under this Agreement shall be true and correct. 
  

			
	Page 15 of 36	 	Initial Here   ̈

 8.1.5. Books and Records. Borrower’s Books and records fully and accurately reflect all of
Borrower’s assets and liabilities (absolute and contingent) and are kept in the ordinary course of business in accordance with GAAP. 
 8.1.6. Fair Market Value of Collateral. The fair market value of the Collateral is, and shall at all times be, not less than the value carried on Borrower’s financial statements (less normal depreciation caused by ordinary wear
and tear) and as represented to Lender. 
 8.1.7. Taxes. All taxes of any governmental or taxing authority due or payable by, or
imposed or assessed against Borrower, have been paid and shall be paid in full before delinquency. 
 8.1.8. No Actions, Litigation,
etc. Except as disclosed in writing by Borrower to Lender, (a) there are no actions or proceedings pending by or against Borrower or Guarantor before any court or administrative agency; and (b) Borrower does not have knowledge or
belief of any pending, threatened, or imminent litigation, governmental investigations, or claims, complaints, actions, or prosecutions involving Borrower or any Guarantor of the Obligations, except for (1) ongoing collection matters in which
Borrower is the plaintiff; and (2) matters arising after the date hereof that, if decided adversely to Borrower or Guarantor, would not (i)materially impair the prospect of repayment of the Obligations; or (ii) materially impair the value
or priority of Lender’s security interests in the Collateral. 
 8.1.9. Legal Power and Authority. Borrower has the legal power
and authority to enter into this Agreement and the Loan Documents and to perform and discharge Borrower’s Obligations hereunder and under the Loan Documents. The Persons signing this Agreement and the Loan Documents on behalf of Borrower are
authorized to do so. 
 8.1.10. Payments on Accounts. Every payment falling due on Accounts assigned to Lender will be duly paid and
received by Lender on or before the earlier of (a) ninety (90) days from the date of each invoice; or (b) sixty (60) days from the due date of each invoice. 
 8.1.11. Prime Accounts. All Accounts against which Borrower seeks Advances from Lender are now Prime Accounts and Borrower shall only seek
Advances against Accounts if such Accounts are believed by Borrower to be Prime Accounts as defined above. 
 8.1.12. Eligible
Inventory. All Inventory against which Borrower seeks Advances from Lender is and shall be Eligible Inventory as defined above. 
 8.1.13. Location of Inventory. Except as permitted herein, the Inventory is not and shall not be stored with a bailee, warehouseman, or similar party (without Lender’s prior written consent) and is located and shall be located
only at the Premises. 
 8.1.14. Inventory Records. Borrower now keeps, and hereafter at all times shall keep, correct and accurate
records itemizing and describing the kind, type, quality, and quantity of the Inventory, and Borrower’s cost therefor. 
 8.1.15.
Location of Chief Executive Office; FEIN; Organizational Number. The Chief Executive Office of Borrower is located at the address indicated in the preamble to this Agreement. Borrower’s Federal Employer Identification Number (the
“FEIN”) is 20-3073355 and the number assigned by California, the state of Borrower’s organization, for Borrower’s organizational identification number is C2712935. 
 8.1.16. Due Organization and Qualification. Borrower is a duly formed, organized, and existing corporation, limited liability company, limited
partnership, general partnership, or other legal entity in good standing, qualified, and licensed to do business in the state of its incorporation or formation and in any other state where the failure to be so licensed or qualified could reasonably
be expected to have a Material Adverse Change to the business, operations, conditions (financial or otherwise), finances or prospects of Borrower, or on the value of the Collateral to Lender. 
 8.1.17. Due Authorization; No Conflict. The execution, delivery, and performance of the Loan Documents are within Borrower’s powers, have
been duly authorized, and are not in conflict with nor constitute a breach of any provision contained in Borrower’s By-laws and Articles, Certificate of Incorporation, Articles of Organization, Partnership Agreement, Trust Agreement, or
Operating Agreement, nor will they constitute an event of default under any material agreement to which Borrower is a party or by which its properties or assets may be bound. 
 8.1.18. Financial Statements Fairly Represent Borrower’s Financial Condition; No Material Adverse Change in Financial Condition. All
financial statements relating to Borrower or any Guarantor of the Obligations that have been delivered by Borrower to Lender have been prepared in accordance with GAAP and fairly present Borrower’s (or such Guarantor’s, as applicable)
financial condition as of the date thereof and Borrower’s results of operations for the period then ended. There has not been a Material Adverse Change in the financial condition of Borrower (or such Guarantor, as applicable) since the date of
the latest financial statements submitted to Lender on or before the Closing Date. 
 8.1.19. Solvency. No transfer of property is
being made by Borrower and no Obligation is being incurred by 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
Borrower. 
  

			
	Page 16 of 36	 	Initial Here   ̈

 8.1.20. Environmental Condition. Except as disclosed in writing by Borrower to Lender, none of
Borrower’s properties or assets has ever been used by Borrower or, to the best of Borrower’s knowledge, by previous owners or operators in the disposal of, or to produce, store, handle, treat, release, or transport, any Hazardous
Substances or Hazardous Wastes. None of the Premises of Borrower’s properties or assets has ever been designated or identified in any manner pursuant to any Environmental Laws as a disposal site for Hazardous Substances or Hazardous Wastes, or
a candidate for closure pursuant to any Environmental Laws. No lien arising under any Environmental Laws has attached to any revenues or to any real or personal property owned or operated by Borrower. Borrower has not received a summons, citation,
notice, or directive from the Environmental Protection Agency or any other federal or state governmental agency concerning any action or omission by Borrower resulting in the releasing or disposing of Hazardous Substances or Hazardous Wastes into
the environment. Borrower is not using and neither Borrower nor to the best of Borrower’s knowledge, any prior owner, occupant, or operator of the Premises has used Hazardous Substances or Hazardous Wastes at or upon, or in any way affecting,
the Premises in any manner which violates or violated any Environmental Laws if such violation could, individually or in the aggregate, reasonably be expected to have a Material Adverse Change with respect to any of the Premises or property of
Borrower or to result in a Material Adverse Change. 
 8.1.21. Filings and other Actions. Borrower shall timely make all filings and
take other actions required under applicable law, including but not limited to applicable securities law. 
 8.2. Reliance by Lender;
Cumulative Representations and Warranties. Each warranty and representation contained in this Agreement automatically shall be deemed repeated with each Advance and shall be conclusively presumed to have been relied on by Lender regardless of
any investigation made or information possessed by Lender. The warranties and representations set forth herein shall be cumulative and in addition to any and all other warranties and representations that Borrower now or hereafter shall give, or
cause to be given, to Lender. 
 9. Affirmative Covenants. Borrower covenants and agrees that, so long as any credit hereunder shall
be available and until full and final payment of the Obligations, and unless Lender shall otherwise consent in writing, the following statements shall be true and Borrower shall do all of the actions set forth below. 
 9.1. Preserve Good Standing. Borrower shall do all things necessary to preserve its good standing as a corporation under the laws of the
states where Borrower is authorized to do business, specifically the state(s) of California, and under the laws of California, the state of its organization. Further, Borrower shall maintain the state of California as the state
in which Borrower is organized or incorporated. 
 9.2. Preliminary Annual Financial Statements. Borrower shall provide Lender, as
soon as possible after the end of each fiscal year of Borrower, and in any event within sixty (60) days thereafter, preliminary year end financial statements, including but not limited to, the balance sheet and income statement for such year.

 9.3. Reviewed Annual Financial Statements. Borrower shall provide Lender, as soon as possible after the end of each fiscal year but
in any event within one hundred twenty (120) days of the end of Borrower’s fiscal year: 
 (a) a complete copy of Borrower’s
financial statements, including but not limited to (1) the management letter, if any; (2) the balance sheet as of the close of the fiscal year; and (3) the income statement for such year, together with a statement of cash flows,
reviewed by a firm of independent certified public accountants of recognized standing and acceptable to Lender, or if permitted by Lender in writing, by Borrower; 
 (b) a statement certified by the chief financial officer of Borrower that Borrower is in compliance with all the terms, conditions, covenants, and warranties of this Agreement; and 
 (c) a complete copy of all filings required under securities law if Borrower is a publicly traded company. 
 9.4. Other Financial Statements. No later than thirty (30) days after the close of each month (each, an “Accounting Period”),
Borrower shall provide Lender with Borrower’s balance sheet as of the close of such Accounting Period and its income statement for that portion of the then current fiscal year through the end of such Accounting Period certified by
Borrower’s chief financial officer as being complete, correct, and fairly representing its financial condition and results of operations. 
 9.5. Tax Returns. Borrower shall provide Lender copies of each of Borrower’s federal income tax returns, and any amendments thereto, within one hundred twenty (120) days after the end of Borrower’s fiscal year.

 9.6. Inventory Product Activity. Borrower shall provide Lender a full, complete, and accurate summary of all Borrower’s
inventory activity on a monthly basis from Borrower within two (2) days of the end of the prior period and on a monthly basis from any and all public Warehouses within fifteen (15) days of the end of the prior month. 
 9.7. Monthly Accounts Payable Aging Report. Borrower shall provide Lender on a monthly basis with a full, complete, and accurate accounts payable
aging report within fifteen (15) days of the end of the prior month. 
 9.8. Accounting System. Borrower shall maintain a
standard and modern system of accounting in accordance with GAAP with ledger and account cards or computer tapes, discs, printouts, and records pertaining to the Collateral which contain information as from time to time may be reasonably requested
by Lender. Borrower also shall keep proper books of account showing all sales, claims, and allowances on its Inventory. 
  

			
	Page 17 of 36	 	Initial Here   ̈

 9.9. Designation of Inventory. Borrower shall now and from time to time hereafter, but not less
frequently than monthly, execute and deliver to Lender a written designation of Inventory specifying Borrower’s cost and the wholesale market value of Borrower’s raw materials, work in process, and finished goods, and further specifying
such other information as Lender may reasonably request. 
 9.10. Taxes. All assessments and taxes, whether real, personal, or
otherwise, due or payable by, or imposed, levied, or assessed against Borrower or any of its property have been paid, and shall hereafter be paid in full, before delinquency or before the expiration of any extension period. Borrower shall make due
and timely payment or deposit of all federal, state, and local taxes, assessments, or contributions required of it by law, and will execute and deliver to Lender, on demand, appropriate certificates and/or payroll and other tax receipts attesting to
the payment thereof or deposit with respect thereto. Borrower will make timely payment or deposit of all payroll and other tax payments and withholding 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 Lender with proof satisfactory to Lender indicating that Borrower has made such payments or deposits. 
 9.11. Insurance. Borrower, at its expense, shall keep the Collateral insured against loss or damage by fire, theft, explosion, sprinklers, and all
other hazards and risks, and in such amounts, as are ordinarily insured against by other owners in similar businesses. Borrower also shall maintain business interruption, public liability, product liability, and property damage insurance relating to
Borrower’s ownership and use of the Collateral, as well as insurance against larceny, embezzlement, and criminal misappropriation. Additionally, Borrower shall maintain Workers’ Compensation insurance coverage for all employees.

 9.12. Lender as Loss Payee. All such policies of insurance shall be in such form, with such companies, and in such amounts as may
be reasonably satisfactory to Lender. All such policies of insurance (except those of public liability and property damage) shall contain a 438BFU lender’s loss payable endorsement, or an equivalent endorsement in a form satisfactory to Lender,
showing Lender as sole loss payee thereof, and shall contain a waiver of warranties, and shall specify that the insurer must give at least thirty (30) days’ prior written notice to Lender before canceling its policy for any reason.
Borrower shall deliver to Lender certified copies of such policies of insurance and evidence of the payment of all premiums therefor. All proceeds payable under any such policy shall be payable to Lender to be applied on account of the Obligations.

 9.13. No Setoffs or Counterclaims. All payments hereunder and under the other Loan Documents made by or on behalf of Borrower shall
be made 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. 
 9.14. Location of Collateral, Inventory, and Equipment. Borrower shall keep the Collateral, including, but not limited to Inventory and Equipment, only at the Premises and Warehouse (assuming Bailment
Agreement(s) have been signed) in the following state(s) 1) California and 2) British Columbia, Canada (the “Collateral State”); provided, however, that with the prior written consent of Lender, Borrower may change the locations of
the Collateral, including Inventory and Equipment after sending written notice to Lender not less than thirty (30) days prior to the date on which the Collateral, including but not limited to Inventory and Equipment is moved to such new
location, (a) so long as such new location is within the continental United States; and (b) so long as, at the time of such written notification, Borrower authorizes (1) the filing of or provides any financing statements or fixture
filings necessary to perfect and continue perfected Lender’s security interests in such assets; and (2) also executes and delivers, or causes to be executed and delivered, to Lender such agreements, documents, and instruments as Lender may
deem reasonably necessary or desirable to protect its interests in the Collateral, including but not limited to Inventory and Equipment, at such location, in form and substance satisfactory to Lender. 
 9.15. Control of Collateral. Borrower will cooperate with Lender in obtaining possession, where Lender chooses to perfect its security interest by
possession in addition to the filing of a financing statement. Borrower will cooperate with Lender in obtaining control with respect to Collateral consisting of Deposit Accounts, Financial Assets, including without limitation, Investment Property,
Letter of Credit Rights, and Electronic Chattel Paper. 
 9.16. Commercial Tort Claim. If Borrower shall acquire a commercial tort
claim, Borrower shall promptly notify Lender in a writing signed by Borrower of the general details thereof and grant to Lender in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such
writing to be in form and substance satisfactory to Lender. 
 9.17. Leases. Borrower shall pay when due all rents and other amounts
payable under any leases to which Borrower is a party or by which Borrower’s properties and assets are bound, unless such payments are the subject of a permitted protest. To the extent that Borrower fails timely to make payment of such rents
and other amounts payable when due under its leases, Lender shall be entitled, in its discretion, and without the necessity of declaring an Event of Default, to reserve an amount equal to such unpaid amounts from the loan available to Borrower.

 9.18. Change in Name. Borrower shall give Lender written notice immediately upon forming an intention to change its name or form or
jurisdiction of business organization, and shall take such actions, including but not limited to executing documents, as Lender may require as a result of such change. 
 9.19. Inspection. Borrower shall permit Lender or any representatives thereof, during usual business hours, without notice to Borrower, to periodically: (a) have access to all Premises where any Collateral
is 

  

			
	Page 18 of 36	 	Initial Here   ̈

 
located for the purposes of inspecting (and removing, if after the occurrence of an Event of Default) any of the Collateral, including Borrower’s Books;
(b) permit Lender or its designees to inspect, audit, make copies of, and make extracts from Borrower’s Books as Lender may request. Borrower hereby irrevocably authorizes all accountants and third parties to disclose and deliver to Lender
at Borrower’s expense all financial information, books and records, work papers, management reports and other information in their possession relating to Borrower whether verbally, in writing (by record or authenticated record) or otherwise.

 9.20. Employee Retirement Income Security Act. Borrower shall comply with all provisions of the Employee Retirement Income Security
Act of 1974, and any successor statute, all as amended from time to time (“ERISA”), including regulations promulgated thereunder and interpretations published regarding same. 
 9.21. Environmental Issues. Borrower shall comply with the affirmative covenants set forth below with respect to environmental issues. 

9.21.1 Borrower shall furnish to Lender promptly and in any event within thirty (30) days after receipt thereof, a copy of any notice, summons,
citation, directive, letter or other communications from the EPA or any other governmental agency or instrumentality concerning any intentional or unintentional action or omission on Borrower’s part in connection with the handling,
transporting, transferring, disposal or in the releasing, spilling, leaking, pumping, pouring, emitting, emptying or dumping of Hazardous Substances or Hazardous Wastes into the environment resulting in damage to the environment, fish, shellfish,
wildlife, biota and any other natural resource; 
 9.21.2 Borrower shall furnish to Lender promptly and in any event within thirty
(30) days after the receipt thereof, a copy of any notice of or other communication concerning the filing of a lien upon, against or in connection with Borrower, the Collateral or Borrower’s real property by the EPA or any other
governmental agency or instrumentality authorized to file such a lien pursuant to an environmental protection statute in connection with a fund to pay for damages and/or cleanup and/or removal costs arising from the intentional or unintentional
action or omission of Borrower resulting from the disposal or in the releasing, spilling, leaking, pumping, pouring, emitting, emptying or dumping of Hazardous Substances or Hazardous Wastes into the environment; 
 9.21.3 Borrower shall furnish to Lender promptly and in any event within thirty (30) days after the receipt thereof, a copy of any notice,
directive, letter or other communication from the EPA or any other governmental agency or instrumentality acting under the authority of an Environmental Law indicating that all or any portion of the Borrower’s property or assets have been
listed and/or that Borrower has been deemed by such agency to be the owner and operator of the facility that has failed to furnish to the EPA or other authorized governmental agency or instrumentality, all the information required by the RCRA,
CERCLA or other applicable Environmental Laws; and 
 9.21.4 Borrower shall furnish to Lender promptly and in no event more than thirty
(30) days after the filing thereof with the EPA or other governmental agency or instrumentality authorized as such pursuant to an environmental protection statute, copies of any and all information reports filed with such agency or
instrumentality in connection with Borrower’s compliance with RCRA, CERCLA, or other applicable Environmental Laws. 
 9.21.5 Borrower
shall require and use its best efforts to ensure compliance by all operators and occupants of the Premises with all applicable Environmental Laws. 
 9.21.6 Borrower agrees to defend, indemnify, save, and hold Lender and its officers, employees, and agents harmless against all obligations, demands, claims, and liabilities claimed or asserted by any other Person arising out of or relating
to discharges or releases of Hazardous Substances or Hazardous Wastes into the environment, including ambient air, surface water, ground water, or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous substances or Hazardous Wastes or the clean-up or other remediation thereof, and all losses (including without limitation attorneys’ fees and legal and other costs from outside counsel or in-house
counsel) in any way suffered, incurred, or paid by Lender as a result of or in any way arising out of, following, or consequential thereto; provided, however, that no such indemnification shall apply with respect to any liability directly arising
out of the gross negligence or willful misconduct on the part of Lender or any of its officers, employees and agents in connection with Hazardous Wastes or Hazardous Substances. 
 9.22. Reaffirmation and Continuing Nature of Representations, Warranties, and Covenants. The foregoing representations, warranties, and covenants
shall be of a continuing nature and shall survive the termination of this Agreement and full payment and performance of the Obligations. They shall also be deemed to be repeated whenever Borrower makes a request for an Advance. 
 10. Negative Covenants. Borrower covenants and agrees that, so long as any credit hereunder shall be available and until full and final payment
and performance of the Obligations, Borrower will not do any of the following or take any of the actions set forth herein, without Lender’s prior written consent. 
 10.1. Returns; Allowances and Credits. Borrower shall not accept any returns or grant any allowances or credits to Account Debtors without notifying Lender at the time any credit is issued. 
 10.2. Credit Limit. Borrower shall not borrow any funds from any third party in an amount in excess of One Hundred Thousand and 00/100 Dollars
($100,000.00) without Lender’s prior written consent, which consent shall not be unreasonably denied. 
  

			
	Page 19 of 36	 	Initial Here   ̈

 10.3. Indebtedness. Except as permitted by Section 10.2, Borrower shall not create, incur,
assume, permit, guarantee, or otherwise become or remain, directly or indirectly, liable with respect to any Indebtedness except Permitted Indebtedness. 
 10.4. Liens. Borrower shall not create, incur, assume, or permit to exist, directly or indirectly, any lien on or with respect to any of the Collateral or 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 and so long as the replacement liens secure
only those assets or property that secured the original Indebtedness). 
 10.5. Restrictions on Fundamental Changes. Borrower shall
not enter into any acquisition, merger, consolidation, reorganization, or recapitalization, or reclassify its capital stock, or liquidate, wind up, or dissolve itself (or suffer any liquidation or dissolution), or convey, sell, assign, lease,
license, transfer, or otherwise dispose of, in one transaction or a series of transactions, all or any substantial part of its business, property, or assets, whether now owned or hereafter acquired, or acquire by purchase or otherwise all or
substantially all of the properties, assets, stock, or other evidence of beneficial ownership of any Person. 
 10.6. Extraordinary
Transactions and Disposal of Assets. Borrower shall not enter into any transaction not in the ordinary and usual course of Borrower’s business, including the sale, lease, license, or other disposition of, moving, relocation, or transfer,
whether by sale or otherwise, of any of Borrower’s properties or assets (other than sales of Inventory to buyers in the ordinary course of Borrower’s business as currently conducted) except as permitted by this Agreement or the Loan
Documents. 
 10.7. Change Name. Borrower shall not change Borrower’s name, Federal Employer Identification Number, business
structure, or identity, or add any new fictitious name. To that effect, Borrower shall not do business under any name other than Spy Optic, Inc., Borrower’s correct legal name, unless Borrower has provided to Lender evidence that it has
taken such legal steps required with respect to fictitious or assumed names under the applicable laws of the jurisdictions in which Borrower is located and/or does business. Lender has received acceptable documentation indicating that Borrower will
be doing business under the following additional name(s): ——N/A—— 
 10.8. Guarantee. Borrower shall not
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 Borrower or which are transmitted or turned over to Lender.

 10.9. Restructure. Borrower shall not make any change in Borrower’s financial structure, the principal nature of
Borrower’s business operations, or the date of its fiscal year. 
 10.10. Consignments. Borrower shall not consign any Inventory
or sell any Inventory on bill and hold, sale or return, sale on approval, or other conditional terms of sale. 
 10.11. Distributions.
Borrower shall not make any distribution or declare or pay any dividends (whether in cash or stock) on, or purchase, acquire, redeem, or retire any of Borrower’s capital stock, of any class, whether now or hereafter outstanding. 
 10.12. Accounting Methods. Borrower shall not modify or change its method of accounting or enter into, modify, or terminate any agreement
currently existing, or at any time hereafter entered into with any third party accounting firm or service bureau for the preparation or storage of Borrower’s accounting records without said accounting firm or service bureau agreeing to provide
Lender information regarding the Collateral or Borrower’s financial condition. Borrower waives the right to assert a confidential relationship, if any, it may have with any accounting firm or service bureau in connection with any information
requested by Lender pursuant to or in accordance with this Agreement, and agrees that Lender may contact directly any such accounting firm or service bureau in order to obtain such information. 
 10.13. Investments. Borrower shall not directly or indirectly make or acquire any beneficial interest in (including stock, partnership interest,
or other securities of), or make any loan, or capital contribution to, any Person. 
 10.14. Transactions With Affiliates. Borrower
shall not directly or indirectly enter into or permit to exist any material transaction with any Affiliate of Borrower except for transactions that are in the ordinary course of Borrower’s business, upon fair and reasonable terms, that are
fully disclosed to Lender, and that are no less favorable to Borrower than would be obtained in arm’s length transaction with a non-Affiliate. 
 10.15. Suspension. Borrower shall not suspend or go out of a substantial portion of its business. 
 10.16. Use of
Proceeds. Borrower shall not use the proceeds of the Advances made hereunder for any purpose other than to, on the Closing Date, repay in full the outstanding principal, accrued interest, and accrued fees and/or expenses owing the Old Lender,
and to pay transactional Lender Expenses incurred in connection with this Agreement. Thereafter, Borrower shall use the proceeds of the Advances made hereunder for any purpose consistent with the terms and conditions hereof, for its lawful and
permitted business purpose, but subject to the terms and conditions of this Agreement. 
 10.17. Change in Location of Premises;
Collateral and Third Party Control. Borrower covenants and agrees that it will not, without thirty (30) days’ prior written notification to Lender, relocate its Premises to a new location. Further, Borrower agrees that at the time of
such written notification, Borrower shall provide Lender 

  

			
	Page 20 of 36	 	Initial Here   ̈

 
any financing statements or fixture filings necessary to perfect and continue Lender’s perfected security interests in the Collateral and authorize
Lender to file same. In addition, Borrower agrees that it will not at any time store the Collateral with any bailee or warehouseman or in a third party owned facility without prior execution of an agreement between Lender and bailee or landlord in
form and substance satisfactory to Lender. 
 10.18. Hazardous Substances or Hazardous Waste. Borrower shall not permit the Premises
to be used to generate, manufacture, refine, transport, treat, store, handle, dispose, produce, or process Hazardous Substances or Hazardous Wastes, except in compliance with all applicable Environmental Laws. 
 10.19. Management Borrower shall not, and shall not permit any Subsidiary to, make any significant change in its management without a minimum
thirty (30) days’ prior written notice to Lender. 
 11. Events Of Default. Any one or more of the events set forth below
shall constitute an “Event of Default” under this Agreement and the Loan Documents. 
 11.1. Failure to Pay. Borrower or any
Obligor fails to pay when due and payable or when declared due and payable, any portion of the Obligation 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 Lender, reimbursement of Lender Expenses, or other amounts constituting the Obligation. 
 11.2. Failure to
Perform. Borrower fails or neglects to perform, keep, or observe any term, provision, condition, covenant, or agreement contained in this Agreement, any of the Loan Documents, or in any other present or future agreement between Borrower and
Lender. 
 11.3. Material Adverse Change. A Material Adverse Change has occurred. 
 11.4. Writ. Any of 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. 
 11.5. Insolvency Proceeding. An Insolvency Proceeding is commenced by or against Borrower
or any Obligor. 
 11.6. Injunction Against Doing Business. Borrower is enjoined, restrained, or in any way prevented by court order
from continuing to conduct all or any material part of its business affairs. 
 11.7. Notice of Lien or Levy. (a) A notice of lien,
levy, or assessment is filed of record with respect to any of Borrower’s properties or assets by the government of the United States, or any department, agency, or instrumentality thereof, or by any state, county, municipal, or governmental
agency; or (b) any taxes or debts owing at any time hereafter to any one or more of such entities becomes a lien, whether choate or otherwise, upon any of Borrower’s properties or assets and the same is not paid on the payment date
thereof. 
 11.8. Judgment Lien. A judgment or other claim becomes a lien or encumbrance upon any material portion of Borrower’s
properties or assets. 
 11.9. Default in Third Party Agreements. Borrower defaults in any material agreement to which Borrower is a
party with one or more third Persons resulting in a right by such third Persons, irrespective of whether exercised, to accelerate the maturity of Borrower’s obligations thereunder. 
 11.10. Prohibited Payment on Subordination Agreement. Borrower makes any payment on account of Indebtedness that has been 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. 
 11.11. Misstatement or Misrepresentation. Any misstatement or misrepresentation exists now or hereafter in any warranty, representation, statement, or report made to Lender by Borrower or any officer, employee,
agent, or director of Borrower, or any such warranty or representation is withdrawn. 
 11.12. Limitation or Termination of Guaranties,
Validity Agreements, etc. (a) The obligation of any Guarantor or other third Person under the Guaranty, Validity Agreement, or any of the other Loan Documents is limited or terminated by operation of law or by the Guarantor or other third Person
thereunder; (b) any such Guarantor or other third Person becomes the subject of an Insolvency Proceeding; or (c) the termination, lapse, or ineffectiveness of any UCC Financing Statement filed in connection with or related to any
collateral pledged in support of the Guaranty. 
 11.13. Prospect of Payment Materially Impaired. Lender shall believe that the
prospect of (a) payment of the Loans; or (b) the performance of any of Borrower’s material Obligations is materially impaired. 
 11.14. Termination, Lapse, or Ineffectiveness of UCC Filing. The termination, lapse of, or ineffectiveness of any UCC Financing Statement filed in connection with or related to any Collateral granted pursuant to this Agreement or any
of the other Loan Documents. 
 11.15. Violation of any Environmental Law. (a) the failure by Borrower to comply with each, every and
all of the requirements of RCRA, CERCLA or any other applicable Environmental Law on Borrower’s property; (b) the receipt by Borrower of a notice from the EPA or any other governmental agency or instrumentality acting under the authority
of any Environmental Law, indicating that a lien has been filed against any of the Collateral, or any of Borrower’s other property by the EPA or any other 
  

			
	Page 21 of 36	 	Initial Here   ̈

 
governmental agency or instrumentality in connection with a fund as a result of damage arising from an intentional or unintentional action or omission by
Borrower resulting from the disposal, releasing, spilling, leaking, pumping, pouring, emitting, emptying or dumping of Hazardous Substances or Hazardous Wastes into the environment; and (c) any other event or condition exists which might, in
the opinion of Lender, under applicable environmental protection statutes, have a material adverse effect on the financial or operational condition of Borrower or the value of all or any material part of the Collateral or other property of Borrower.

 12. Lender’s Rights and Remedies. Borrower and Lender have agreed to the terms set forth below with respect to the rights and
remedies of Lender. 
 12.1. Rights and Remedies. Upon the occurrence, and during the continuation, of an Event of Default, Lender
may, at its election, without notice of its election and without demand, do any one or more of the actions set forth below, all of which are authorized by Borrower. 
 12.1.1. Accelerate Obligations. Lender may declare all Obligations, whether evidenced by this Agreement, by any of the other Loan Documents, or otherwise, immediately due and payable, without presentment,
demand, protest, or notice of any kind, all of which are hereby expressly waived by Borrower. 
 12.1.2. Cease Advancing Money.
Lender may cease advancing money or extending credit to or for the benefit of Borrower under this Agreement, the Loan Documents, or any other agreement between Borrower and Lender. 
 12.1.3. Terminate This Agreement. Lender may terminate this Agreement and any of the other Loan Documents as to any future liability or
obligation of Lender, but without affecting Lender’s rights and security interests in the Collateral and without affecting the Obligations. 
 12.1.4. Settle or Adjust Disputes. Lender may settle or adjust disputes and claims directly with Account Debtors to the Accounts for amounts and upon terms which Lender considers advisable, and in such cases, Lender will credit
Borrower’s loan account with only the net amounts received by Lender in payment of such disputed Accounts, after deducting all Lender Expenses incurred or expended in connection therewith. 
 12.1.5. Returned Inventory. Lender may cause Borrower to hold all returned Inventory in trust for Lender, segregate all returned Inventory from
all other property of Borrower or in Borrower’s possession and conspicuously label said returned Inventory as being the Collateral of Lender. 
 12.1.6. Make Payment; Do Acts. Lender may, without notice to or demand upon Borrower, Guarantor, or other guarantor, make such payments and do such acts as Lender considers necessary or reasonable to protect its security interests in
the Collateral. Borrower agrees to assemble the Collateral if Lender so requires, and to make the Collateral available to Lender as Lender may designate. Borrower authorizes Lender 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 Lender’s determination appears to conflict with its security interests and to pay all expenses
incurred in connection therewith. With respect to any of Borrower’s owned Premises, Borrower hereby grants Lender a license to enter into possession of such Premises and to occupy the same, without charge, for up to one hundred twenty
(120) days in order to exercise any of Lender’s rights or remedies provided herein or in any of the other Loan Documents, at law, in equity, or otherwise. 
 12.1.7. Setoff. Lender may, without notice to Borrower (such notice being expressly waived), and without constituting a retention of any Collateral in satisfaction of an Obligation (within the meaning of
Sections 9620 and 9621 of the Code), set off and apply to the Obligations any and all (a) balances and deposits of Borrower held by Lender (including any amounts received in the Collateral Account); or (b) the Obligations at any time owing
to or for the credit or the account of Borrower held by Lender. 
 12.1.8. Hold Monies. Lender may hold, as cash collateral, any and
all balances and deposits of Borrower held by Lender, and any amounts received in the Collateral Account and Collateral Control Account, to secure the full and final repayment of all of the Obligations. 
 12.1.9. Deal with Collateral. Lender may collect, ship, reclaim, recover, store, finish, maintain, repair, dispose of, prepare for sale,
advertise for sale, and sell (in the manner provided for herein) the Collateral. Lender is hereby granted a license or other right to use, without charge, Borrower’s 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 Borrower’s rights under all
licenses and all franchise agreements shall inure to Lender’s benefit. 
 12.1.10. Sell Collateral. Lender may sell 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 Borrower’s Premises) as Lender determines is commercially reasonable. It
is not necessary that the Collateral be present at any such sale. 
 12.1.11. Notice of Disposition of Collateral. Lender shall give
notice of the disposition of the Collateral as follows: 
  

			
	Page 22 of 36	 	Initial Here   ̈

 (a) Lender shall give Borrower and each holder of a security interest in the Collateral who has filed
with Lender a written request for notice, 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; 
 (b) the notice shall be personally delivered or mailed, postage prepaid, to Borrower
at the address set forth herein, giving such notice as may be reasonable under the circumstance of (1) the date fixed for the sale; or (2) before the date on or after which the private sale or other disposition is to be made; except that
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 Borrower,
Guarantor, or secured creditors reflected in a UCC search claiming an interest in the Collateral shall be sent to such addresses as they have furnished to Lender or as is reflected in such UCC search as the case may be; and 
 (c) if the sale is to be a public sale, Lender shall also give notice of the time and place by publishing a notice one (1) time giving such notice
as may be reasonable under the circumstance before the date of the sale in a newspaper of general circulation in the county in which the sale is to be held. 
 12.1.12. Credit Bid. Lender may credit bid and purchase any and all of the Collateral at any public sale. 
 12.1.13. Deficiency; Excess. Any deficiency that exists after disposition of the Collateral as provided above will be paid immediately to Lender by Borrower. Any excess will be returned, without interest and subject to the rights of
third Persons, by Lender to Borrower. 
 12.2. Remedies Cumulative. Lender shall have all rights, powers and remedies available under
each of the Loan Documents, or accorded by law, including without limitation the right to resort to any or all Collateral for any credit accommodation from Lender under this Agreement or any other Loan Document and to exercise any or all of the
rights of a beneficiary or secured party pursuant to applicable law. All rights, powers and remedies of Lender in connection with each of the Loan Documents or as accorded by Lender, may be exercised at any time by Lender and from time to time after
the occurrence of an Event of Default, are cumulative and not exclusive, and shall be in addition to any other rights, powers or remedies provided by law or equity. 
 13. Taxes and Lender Expenses. If Borrower fails to pay any monies (whether taxes, rents, assessments, insurance premiums, or otherwise) 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 Lender determines that such failure by Borrower could have a Material Adverse Change with respect to Lender’s interests in the
Collateral, in its discretion and without prior notice except as provided in the Loan Documents, Lender may do any or all of the following: set up such reserves in Borrower’s loan account and comply with any condition as Lender deems necessary
to protect Lender from the exposure created by such failure; qualify Borrower in any state to collect Accounts; or obtain and maintain insurance policies of the type described herein, and take any action with respect to such policies as Lender deems
prudent. Any such amounts paid by Lender shall be at Borrower’s expense and shall constitute Lender Expenses. Any such payments made by Lender shall not constitute an agreement by Lender to make similar payments in the future or a waiver by
Lender of any Event of Default under this Agreement. Lender need not inquire as to, or contest the validity of, any such expense, tax, security interest, encumbrance, 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. Such Lenders’ Expenses may be charged to Borrower’s account and if not charged or paid prior to such time, shall be charged upon termination. 
 Unless Borrower provides Lender with evidence of the insurance coverage as required by this Agreement, Lender may purchase such insurance at Borrower’s expense to
protect Lender’s interest. This insurance may, but need not, also protect Borrower’s interest. If any Collateral becomes damaged, the insurance coverage that Lender purchases may not pay any claim Borrower makes or any claim made against
Borrower. Borrower may later cancel this coverage after providing evidence that Borrower has obtained property coverage elsewhere. 
 Borrower is responsible
for the cost of any insurance purchased by Lender, which shall constitute a Lender Expense. The cost obtaining of this insurance may be added to Borrower’s loan balance. If the cost is added to Borrower’s loan balance, the Rate will apply
to this added amount. The effective date of coverage may be the date on which Borrower’s prior coverage lapsed or the date Borrower failed to provide proof of coverage. 
 The insurance coverage that Lender purchases may be considerably more expensive than the insurance coverage that Borrower could obtain and may not satisfy any need for property damage coverage or any mandatory
liability insurance requirements imposed by applicable law. 
 14. Waivers; Indemnification. 
 14.1. Waivers of Demand, Protest, etc. Borrower waives demand, protest, notice of protest, notice of default or dishonor, notice of payment and
nonpayment, notice of any default, nonpayment at maturity, release, compromise, settlement, extension, or renewal of Accounts, Documents, Instruments, Chattel Paper, and guarantees at any time held by Lender on which Borrower may in any way be
liable. 
 14.2. No Liability of Lender Re: Collateral. Lender shall not in any way or manner be liable or responsible for the
safekeeping of the Collateral; any loss or damage thereto occurring or arising in any manner or fashion from any cause; any diminution in the value thereof; or 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 Borrower. 
  

			
	Page 23 of 36	 	Initial Here   ̈

 14.3. Indemnification. Borrower agrees to defend, indemnify, save, and hold Lender and
Lender’s officers, employees, shareholders, directors, attorneys, and agents harmless against all obligations, demands, claims, and liabilities claimed or asserted by any other Person arising out of or relating to the transactions contemplated
by this Agreement or any of the other Loan Documents; and all losses (including attorneys’ fees and legal and other costs) in any way suffered, incurred, or paid by Lender as a result of or in any way arising out of, following, or consequential
to the transactions contemplated by this Agreement or any of the other Loan Documents; provided, however, that no such indemnification shall apply with respect to any liability directly arising out of the gross negligence or willful misconduct on
the part of Lender or any of Lender’s officers, employees, shareholders, directors, attorneys, and agents. 
 14.4. No Liability for
Failure to Make Advances. Borrower agrees Lender shall not be liable or responsible for any failure to make Advances (a) if in Lender’s discretion Lender believes Borrower is not entitled to receive such Advances; (b) due to any
accounting or administrative errors made by Lender so long as such errors are not in bad faith; or (c) due to any other failure by Lender unless the same arises directly from Lender’s gross negligence or willful misconduct. 
 14.5. Best Efforts by Lender to Give Notice of Default. Lender agrees to use its best efforts to give Borrower prompt written notice of any
default or Event of Default or alleged default by Borrower. 
 15. Notices. Unless otherwise provided in this Agreement, all notices
or demands by any party relating to this Agreement or any of the other Loan Documents 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 overnight mail, registered or certified mail, postage prepaid, return receipt requested, or by prepaid telex, TWX, telefacsimile, or telegram (with messenger delivery specified) to Borrower or to Lender, as the case
may be, at its address set forth below: 
  

			
	If to Borrower:	 	Spy Optic, Inc.
		 	2070 Las Palmas Drive, Carlsbad, California 92011
	Attn:	 	Mark Simo, Chief Executive Officer
	Telephone No.:	 	(760) 804-8420
	Facsimile No.:	 	(760) 804-8442
		 	
	With a copy to:	 	Spy Optic, Inc.
		 	2070 Las Palmas Drive, Carlsbad, California 92011
	Attn:	 	Jerry Collazo, CFO
	Telephone No.:	 	(760) 804-8420
	Facsimile No.:	 	(760) 804-8442
		 	
	If to Lender:	 	BFI Business Finance
		 	1655 The Alameda, San Jose, California 95126
	Attn:	 	David Drogos, President
	Telephone No.:	 	(408) 288-4010
	Facsimile No.:	 	(408) 288-4018/(408) 283-4867

 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, other than notices by Lender in connection with Sections 9610, 9611, 9615, 9617, 9618, 9620, 9621, or 9624 of the Code, shall be deemed received on
the earlier of the date of actual receipt or three (3) days after the deposit thereof in the mail. Borrower acknowledges and agrees that notices sent by Lender in connection with the foregoing described Sections of the Code shall be deemed sent
when deposited in the mail or transmitted by telefacsimile or other similar method set forth above. 
 16. Choice of Law. This
Agreement and all transactions contemplated hereunder and/or evidenced hereby shall be governed by, construed under, and enforced in accordance with the internal laws of the State of California, without giving effect to conflicts of law principles.

 17. Venue. The parties agree that all actions or proceedings arising in connection with this Agreement and/or the Loan Documents
shall be tried and litigated only in the State and Federal courts located in the County of Santa Clara, State of California or, at the sole option of Lender, in any other court in which Lender shall initiate legal or equitable proceedings and which
has subject matter jurisdiction over the matter in controversy. Each of Borrower and Lender 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. 
 18. JURY TRIAL WAIVER. BORROWER AND LENDER HEREBY WAIVE THEIR 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, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW OR STATUTORY CLAIMS. BORROWER AND LENDER REPRESENT THAT EACH 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. 
  

			
	Page 24 of 36	 	Initial Here   ̈

 WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO WAIVE THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY, if
the above waiver of the right to a trial by jury is not enforceable, the parties hereto agree that any and all disputes or controversies of any nature between them arising at any time shall be decided by a reference to a private judge, mutually
selected by the parties (or, if they cannot agree, by the Presiding Judge of the Santa Clara County, California Superior Court) appointed in accordance with California Code of Civil Procedure Section 638 (or pursuant to comparable provisions of
federal law if the dispute falls within the exclusive jurisdiction of the federal courts), sitting without a jury, in Santa Clara County, California; and the parties hereby submit to the jurisdiction of such court. The reference proceedings shall be
conducted pursuant to and in accordance with the provisions of California Code of Civil Procedure §§ 638 through 645.1, inclusive. The private judge shall have the power, among others, to grant provisional relief, including without
limitation, entering temporary restraining orders, issuing preliminary and permanent injunctions and appointing receivers. All such proceedings shall be closed to the public and confidential and all records relating thereto shall be permanently
sealed. If during the course of any dispute, a party desires to seek provisional relief, but a judge has not been appointed at that point pursuant to the judicial reference procedures, then such party may apply to the Santa Clara County, California
Superior Court for such relief. The proceeding before the private judge shall be conducted in the same manner as it would be before a court under the rules of evidence applicable to judicial proceedings. The parties shall be entitled to discovery
which shall be conducted in the same manner as it would be before a court under the rules of discovery applicable to judicial proceedings. The private judge shall oversee discovery and may enforce all discovery rules and order applicable to judicial
proceedings in the same manner as a trial court judge. The parties agree that the selected or appointed private judge shall have the power to decide all issues in the action or proceeding, whether of fact or of law, and shall report a statement of
decision thereon pursuant to the California Code of Civil Procedure § 644(a). Nothing in this paragraph shall limit the right of any party at any time to exercise self-help remedies, foreclose against collateral, or obtain provisional remedies.
The private judge shall also determine all issues relating to the applicability, interpretation, and enforceability of this paragraph. 
 19.
Destruction of Borrower’s Documents. All documents, schedules, invoices, agings, or other papers delivered to Lender, other than Borrower’s Books or Collateral, may be destroyed or otherwise disposed of by Lender four
(4) months after they are delivered to or received by Lender, unless Borrower requests, in writing, the return of said documents, schedules, or other papers and makes arrangements, at Borrower’s expense, for their return. 
 20. Revocation of Borrower’s Right to Sell Inventory Free and Clear of Lender’s Security Interest. Lender may, upon the occurrence of an
Event of Default, revoke Borrower’s right to sell Inventory free and clear of Lender’s security interest therein. 
 21.
Disclaimer for Negligence. Lender shall not be liable for any claims, demands, losses or damages made, claimed or suffered by Borrower, except such as may arise through or could be caused directly by Lender’s gross negligence or willful
misconduct. 
 22. Limitation of Consequential Damages. Lender shall not be responsible for any lost profits of Borrower arising from
any breach of contract, tort (excluding Lender’s gross negligence or willful misconduct), or any other wrong arising from the establishment, administration, or collection of the Obligations. 
 23. Multiple Borrowers. If there is more than one Borrower as of the Closing Date or thereafter, the following provisions shall apply: 

23.1. Each Borrower hereby waives its rights of subrogation, reimbursement, indemnification, and contribution and any other rights and defenses that
are or may become available to any Borrower by reason of Sections 2787 to 2855, inclusive of the California Civil Code. 
 23.2. Each
Borrower waives all rights and defenses it may have if any agreement with Lender is secured by real property. This means, among other things: (a) Lender may collect from any Borrower without first foreclosing on any real or personal property
Collateral pledged by Borrower; and (b) if Lender forecloses on any Real Property Collateral pledged by any Borrower: (1) the amount of the debt 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 (2) Lender may collect from any Borrower even if Lender, by foreclosing on the Real Property Collateral, has destroyed any right any Borrower may have to collect from any other
Borrower. This is an unconditional and irrevocable waiver of any rights and defenses any Borrower may have because Borrower’s debt is secured by Real Property Collateral. 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. 
 23.3. Each Borrower waives all rights
and defenses arising out of an election of remedies by Lender, even though that election of remedies, such as a nonjudicial foreclosure with respect to security for a guaranteed obligation, has destroyed any Borrower’s rights of subrogation and
reimbursement against the principal by the operation of Section 580d of the California Code of Civil Procedure or otherwise, and each Borrower further waives any and all benefits or defenses, if any, arising directly or indirectly under any one
or more of Sections 3116, 3118, 3119, 3419, 3605, 9504, 9610, 9611, 9615, 9617, 9618, 9620, 9621, 9624, 9625, or 9627 of the Code. 
 23.4.
Each Borrower hereby agrees that it is jointly and severally, directly, and primarily liable to Bank for payment and performance in full of all duties, obligations, and liabilities under this Agreement and each other document, instrument, and
agreement entered into by any Borrower with or in favor of Lender in connection herewith, and that such liability is independent of the duties, obligations, and liabilities of any other Borrower or any Guarantor of the Obligations, as applicable.
Each reference herein to Borrower shall mean each and every Borrower that is a party hereto, individually and collectively, jointly and severally. 
  

			
	Page 25 of 36	 	Initial Here   ̈

 24. General Provisions. 
 24.1. Effectiveness. This Agreement shall be binding and deemed effective when executed by Borrower and Lender, with the acknowledgment and
agreement portion executed by each Guarantor. 
 24.2. Successors and Assigns. This Agreement shall be binding on and inure to the
benefit of the heirs, executors, administrators, legal representatives, successors and assigns of the parties; provided however, that Borrower may not assign or transfer its interest hereunder without the prior written consent of Lender, any
prohibited assignment shall be void ab initio. Lender reserves the right to sell, assign, transfer, negotiate, or grant participations in all or any part of, or any interest in, Lender’s rights and benefits under each of the Loan Documents
executed herewith or hereafter. In connection therewith, Lender may disclose all documents and information which Lender now has or may hereafter acquire relating to any credit extended by Lender to Borrower, Borrower or its business, any Obligor or
the business of any Obligor, or any Collateral. 
 24.3. 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. 
 24.4. Interpretation. This Agreement and all agreements relating to the subject matter hereof are the product of negotiation and preparation by and among each party and its respective attorneys, and shall be construed accordingly.
The parties waive the provisions of California Civil Code §1654. 
 24.5. Severability of Provisions.. In the event any one or
more of the provisions contained in this Agreement is held to be invalid, illegal or unenforceable in any respect, then such provision shall be ineffective only to the extent of such prohibition or invalidity, and the validity, legality, and
enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. 
 24.6. Amendments in
Writing. Neither this Agreement nor any provisions hereof may be changed, waived, discharged, or terminated, nor may any consent to the departure from the terms hereof be given, orally (even if supported by new consideration), but only by an
instrument in writing signed by all parties to this Agreement. Any waiver or consent so given shall be effective only in the specific instance and for the specific purpose for which given. 
 24.7. Waiver. No failure to exercise and no delay in exercising any right, power, or remedy hereunder shall impair any right, power, or remedy
which Lender may have, nor shall any such delay be construed to be a waiver of any of such rights, powers, or remedies, or any acquiescence in any breach or default hereunder; nor shall any waiver by Lender of any breach or default by Borrower
hereunder be deemed a waiver of any default or breach subsequently occurring. All rights and remedies granted to Lender hereunder shall remain in full force and effect notwithstanding any single or partial exercise of, or any discontinuance of
action begun to enforce, any such right or remedy. The rights and remedies specified herein are cumulative and not exclusive of each other or of any rights or remedies which Lender would otherwise have. Any waiver, permit, consent or approval by
Lender of any breach or default hereunder must be in writing and shall be effective only to the extent set forth in such writing and only as to that specific instance. 
 24.8. Survival. All representations, warranties, and agreements herein contained shall be effective so long as any portion of this Agreement remains executory. 
 24.9. Continuing Obligations. No termination of this Agreement or the other Loan Documents shall relieve or discharge Borrower of its respective
duties, obligations and covenants until all Borrower’s Obligations under this Agreement and the other Loan Documents have been fully and finally discharged and paid, and Lender’s continuing security interest in the Collateral and the
rights and remedies of Lender hereunder, under the other Loan Documents and applicable law and procedures established by Lender in connection with its lending operations from time to time, whether pursuant to a procedure manual or otherwise, shall
remain in effect until all such Obligations have been fully and finally discharged and paid. 
 24.10. Counterparts; Telefacsimile
Execution. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if all signatures were upon the same instrument. Delivery of an executed counterpart of the signature page to this
Agreement by telefacsimile shall be effective as delivery of a manually executed counterpart of this Agreement, and any party delivering such an executed counterpart of the signature page to this Agreement by telefacsimile to any other party shall
thereafter also promptly deliver a manually executed counterpart of this Agreement to such other party, provided that the failure to deliver such manually executed counterpart shall not affect the validity, enforceability, or binding effect of this
Agreement. 
 24.11. Revival and Reinstatement of Obligations. If the incurrence or payment of the Obligations by Borrower or any
Guarantor or the transfer by either or both of such parties to Lender 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 (individually or collectively, a “Voidable Transfer”), and if
Lender is required to repay or restore, in whole or in part, any 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 Lender is required or elects to
repay or restore, and as to all reasonable costs, expenses, and attorneys’ fees of Lender related thereto, the liability of Borrower or such Guarantor automatically shall be revived, reinstated, and restored and shall exist as though such
Voidable Transfer had never been made. 
  

			
	Page 26 of 36	 	Initial Here   ̈

 24.12. Supplementary Terms. The terms and conditions of the Loan Documents shall supplement the
terms hereof, except to the extent otherwise specifically provided herein. 
 24.13. Integration. This Agreement, together with the
Loan Documents, embodies the entire agreement and understanding among and between the parties hereto, and supersedes all prior or contemporaneous agreements and understandings between said parties, verbal or written, express or implied, relating to
the subject matter hereof. No promises of any kind have been made by Lender or any third party to induce Borrower to execute this Agreement. No course of dealing, course of performance or trade usage, and no parol evidence of any nature, shall be
used to supplement or modify any terms of this Agreement. 
 24.14. Conflict With Other Agreements. Unless otherwise expressly stated
in any other agreement between Lender and Borrower, if a conflict exists between the provisions of this Agreement and the provisions of such other agreement, the provisions of this Agreement shall control. 
 24.15. Term Loan Documents Executed Concurrently Herewith, If Any. Concurrently with the execution of this Agreement, Borrower may be executing an
Equipment Security Agreement or other applicable security agreement and a Secured Promissory Note (the “Term Loan”) and related documents (collectively, the “Term Loan Documents”). 
 25. Cross-Collateral. Any Collateral pledged to Lender to secure any obligation of Borrower shall also secure any other obligation of Borrower to
Lender except that any Real Property Collateral pledged to secure any obligation of Borrower shall only secure any other obligation of Borrower if Lender specifically so agrees in writing. 
 26. Cross-Payment; Right to Reserve. Lender may, in its discretion, make Advances under one loan to make any payments due from Borrower to Lender
under any other loan. Lender may also, in its sole discretion, reserve under one loan for amounts due under any other loan. 
 27.
Cross-Defaults. An Event of Default under this Agreement shall be an Event of Default under each of the Loan Documents, and vice versa. 
 This
Agreement is subject to the terms and conditions set forth in Addendum A attached hereto and made a part hereof. 
 IN WITNESS WHEREOF, the parties
hereto have caused this Loan and Security Agreement (Accounts Receivable & Inventory Line of Credit) to be executed as of the date first set forth above. 
  

			
	Spy Optic, Inc.
		
	By:	 	 /s/ Mark Simo

		 	Mark Simo
	Title:	 	Chief Executive Officer
	
	BFI BUSINESS FINANCE
		
	By:	 	 /s/ David Drogos

		 	David Drogos
	Title:	 	President

  

 Page 27 of 36 

 ACKNOWLEDGMENT AND AGREEMENT BY GUARANTOR(S) 
 The Guarantor or Guarantors hereby acknowledge the terms and conditions of the foregoing Loan and Security Agreement (Accounts Receivable and Inventory Line of Credit)
and agree to the terms thereof, and further agree to be bound by such terms, including, but not limited to, the terms regarding choice of law and venue and the waiver of the right to a jury trial. 
  

			
	 Orange 21 Inc., Guarantor

		
	By:	 	 /s/ Mark Simo

		 	Mark Simo
	Its:	 	Chief Executive Officer

  

			
	Page 28 of 36	 	

 Addendum A to Loan and Security Agreement 
 Pursuant to this Addendum A to Loan and Security Agreement (this “Addendum”), the foregoing Loan and Security Agreement (the “Agreement”) by and
between BFI Business Finance (“Lender”) and Spy Optic, Inc. (“Borrower”) is hereby amended and/or supplemented by the following terms and conditions, which are incorporated by this reference in the Agreement, as the
following additional sections of the Agreement: 
 28. As used throughout the Agreement, the terms (a) “discretion” and
“sole discretion” by Lender shall mean the exercise by Lender of its reasonable business judgment in light of all of the facts and circumstances existing with respect to the issue under consideration; and (b) “acceptable to
Lender” shall mean acceptable to Lender exercising reasonable business judgment, with both terms (a) and (b) being considered in light of all of the facts and circumstances existing with respect to the issue under consideration,
including but not limited to the performance by Borrower of its obligations under the Agreement and whether any of such facts and circumstances cause Lender to reasonably deem itself insecure if any given decision were to be made or not made or any
approval were to be given or not given. 
 29. As used throughout the Agreement, the term “creditworthy” and
“creditworthiness” with respect to Borrower’s Accounts shall mean the creditworthiness of such Accounts in Lender’s reasonable business judgment, taking into account the facts and circumstances relating to such Accounts,
including without limitation the following considerations: (a) credit rating, (b) Paydex rating; (c) net worth; (d) payment history, (e) terms of sale; (f) reputation; and (f) other factors used by Lender in the
ordinary course of its business as an asset based lender. 
 30. Borrower’s Chief Executive Officer and Chief Financial Officer shall
each execute and provide to Lender separate updated Officer’s Representations and Warranties within fifteen (15) days of month end. 
 31. As used herein, the term “Borrower’s Credit Policy” shall refer to the written Credit Policy that has been provided by Borrower to Lender prior to the Closing Date, which Lender hereby acknowledges to be acceptable to
Lender. 
 32. Notwithstanding any contrary provision in the definition of “Collateral”, Collateral shall not include copyrights,
patents, trademarks, servicemarks and applications therefor, now owned or hereafter acquired, or any claims for damages by way of any past present and future infringement of any of the foregoing (collectively, the “Intellectual Property”);
provided, however, that the Collateral shall include all accounts and general intangibles that consist of rights to payment and proceeds from the sale, licensing or disposition of all or any part, or rights in, the foregoing (the “Rights to
Payment”). Notwithstanding the foregoing, if a judicial authority (including a U.S. Bankruptcy Court) holds that a security interest in the underlying Intellectual Property is necessary to have a security interest in the Rights to Payment, then
the Collateral shall automatically, and effective as of the Closing Date, include the Intellectual Property to the minimum extent necessary to permit perfection of Lender’s security interest in the Rights to Payment, and such limited inclusion
of the Intellectual Property in the Collateral shall not provide Lender with any rights of a secured creditor with respect to the Intellectual Property, including any rights under the Code or the Agreement, except to the extent necessary to permit
Lender to realize on such Rights to Payment. Lender specifically acknowledges and agrees that, except to the extent necessary to permit Lender to realize on the Rights to Payment, Lender has no right to sell, dispose of or otherwise transfer the
Intellectual Property or any interests therein. 
 33. The definition of “Deposits” shall mean the Good Faith Deposit and the
Documentation Fee/Legal Deposit referred to in Section 2.2.11. 
 34. Subsection (e) of the definition of “Material Adverse
Change” shall be deleted. 
 35. “Material Event of Default” shall mean any of the Events of Default described in
Section 11. 
 36. Notwithstanding any contrary provision of Subsection (c) of the definition of “Permitted Liens”, with
respect to liens and security interests in Equipment granted by Borrower to third Persons, Borrower shall not be required to disclose such liens and security interests to Lender and such liens and security interest in Equipment shall be deemed to be
Permitted Liens, provided that Borrower is in compliance with the credit limit established pursuant to Section 10.2. 
 37.
Notwithstanding any contrary provision of Subsection (l) of the definition of “Prime Accounts” Lender has agreed that certain Accounts of Borrower which are offered sales terms pursuant to invoices that provide for payment on terms of
sixty (60) days may be Prime Accounts as of the Closing Date and pending further notice provided they are otherwise Prime Accounts. (List) 
 38. The definition of “Prime Accounts” shall be supplemented with the following Subsection (w): 
 (w) Borrower has advised Lender of two (2) seasonal dating programs. The Snow Program (the “Snow Program”) consists of i) invoices issued in the months of August and September, all with due dates of
January 15th; and ii) invoices issued in the months of October, November, and December, all with due dates of
February 15th. The March Madness Program (the “March Program”) consists of invoices issued in March,
all with due dates on or after July 1st. Lender shall deem such invoices under the Snow Program and the March
Program to be Prime Accounts under the following terms: the period of time from the date of each invoice through and including fifteen (15) days beyond the due date shall be considered the “Billing Period.” Invoices shall be
considered consigned during the period of time from the date of the invoice up to but not including the final ninety (90) days (the “Final Ninety Days”) of the Billing Period (the “Consigned Period”). Provided that the
invoices are in all other respects Prime Accounts, Lender shall make such sums available to Borrower at the following advance rates: (i) fifty percent (50%) of the face amount of each invoice during the Consigned Period; and
(ii) eighty percent (80%) of the face amount of each invoice during the Final Ninety Days. 

  

			
	Page 29 of 36	 	Initial Here   ̈

 39. Notwithstanding the inclusion of the definitions “Term Loans” and “Term Loan
Documents” in the Agreement, the parties hereto do not contemplate having any Term Loan in effect as of the Closing Date or executing any term Loan Documents as part of the Closing Documents as defined below. 
 40. Notwithstanding the terms of Section 2.2.11, the Documentation Fee/Legal Deposit shall not exceed the maximum amount of Ten Thousand and 00/100
Dollars ($10,000.00). 
 41. Section 2.2.12 shall be deleted and replaced in its entirety with the following Section 2.2.12:

 “Borrower shall pay to Lender on demand semi-annual audit fees of Seven Hundred Fifty and 00/100 Dollars ($750.00) each, plus
actual out of pocket costs related to each audit not to exceed the amount of Five Thousand and 00/100 Dollars ($5,000.00) per year.” 
 42. Notwithstanding any contrary provision of Section 2.2.13, Lender shall perform or have performed an audit of Borrower’s Inventory within one hundred twenty (120) days of the Closing Date. 
 43. Notwithstanding any contrary provision of Subsection (b) of Section 3.1 with respect to Borrower’s obligation to pay, on demand, the
Net Face Amount of Accounts more than sixty (60) days past due, Lender has agreed with respect to certain Accounts that the invoices related thereto may be payable on sixty (60) day terms. In those instances, Lender shall pay on demand the
Net Face Amount of Accounts that are more than ninety (90) days past due. 
 44. Notwithstanding any contrary provision of
Section 3.3, the reference therein to “payments by check” shall also be deemed to refer to payments payable to Borrower and remitted to Lender from any source, including but not limited to wire transfers, ACH transfers and credit card
proceeds. 
 45. Notwithstanding any contrary provision of Section 3.6, the reference therein to thirty (30) days shall be deemed
to refer to thirty (30) days after quarter end. 
 46. Notwithstanding any contrary provision of the Agreement, including but not
limited to Section 3.7, in the event that as a result of all payments having been directed to the Lender to such bank account as Lender may designate, there shall be a negative loan balance under the Agreement, Borrower shall be entitled to
direct Lender to remit to Borrower to its operating account at Old Lender funds in the amount of such negative loan balance. 
 47.
Notwithstanding any contrary provision of Section 3.7.1 and Subsection (a) (6) of Section 3.7.10, Lender has agreed that Lender shall not exercise its rights to send the notification to Borrower’s Accounts as provided in
Sections 3.7.1 and Subsection (a) (6) of Section 3.7.10 absent the occurrence of a Material Event of Default, which Material Event of Default is continuing, except that if any fraud, defalcation or conversion on the part of Borrower
shall have occurred regardless of the dollar amount involved with such fraud, conversion or defalcation, (a) such Event of Default shall be deemed to be a Material Event of Default; and (b) there shall be no requirement that such Event of
Default be continuing to permit Lender to send such notification to Borrower’s Accounts. 
 48. Section 3.7.2 is hereby deleted in
its entirety and replaced with the following Subsection 3.7.2: 
 “As of the Closing Date and continuing until such time as unless Lender
has given alternative instructions to Borrower as provided in Section 3.7.1 and Subsection (a) (6) of Section 3.7.10, Borrower and Lender have agreed that Borrower shall direct, at Borrower’s expense and in the manner
requested by Lender from time to time, that remittances and all other collections and proceeds of Accounts and other Collateral be (a) deposited into a lock box account (the “Collateral Control Account”) maintained in Borrower’s
name at Old Lender as set forth in Exhibit A. In connection with the Collateral Account, Borrower shall execute such pledge agreement and control agreement as Lender shall require. Borrower shall maintain with Old Lender or such other
financial institution as Borrower and Lender may agree, and Borrower hereby grants to Lender a security interest in, the Deposit Account representing the Collateral Control Account, over which Borrower shall have no control and into which the
proceeds of all Collateral shall be deposited immediately upon their receipt. The funds shall be swept into the Collateral Account as also set forth in Exhibit A. The Collateral Control Account shall be established and the Control Agreement
executed within fifteen (15) Business Days of the Closing Date.” 
 49. Section 3.7.3 is hereby deleted in its entirety and
replaced with the following Section 3.7.3: 
 “Borrower shall direct all Account Debtors on Accounts which make payments by
electronic transfer of funds to wire such funds directly to the Collateral Control Account unless Lender has given alternative instructions to Borrower as provided in Section 3.7 1 and Subsection (a) (6) of Section 3.7.10.”

 50. Section 3 .7.4 is hereby deleted in its entirety and replaced with the following Section 3.7.4.: 
 “At Lender’s request after a Material Event of Default, Borrower shall direct all Account Debtors on Accounts which make payments by electronic
transfer of funds to wire such funds directly to the Collateral Account.” 
  

			
	Page 30 of 36	 	Initial Here   ̈

 51. Section 3.7.5 is hereby deleted in its entirety and replaced with the following
Section 3.7.5: 
 Borrower shall direct all Account Debtors on Accounts which make payments by electronic transfer of funds to wire such
funds directly to the Collateral Control Account.” 
 52. Section 3.7.6 is hereby deleted in its entirety and replaced with the
following Section 3.7.6: 
 “Borrower shall hold in trust for Lender all amounts which Borrower may receive in payment of or
relating to any Accounts, and immediately deliver such payments to the Collateral Control Account in their original form as received, with proper endorsements or follow such other instructions as Lender may give following a Material Event of
Default. Borrower and all of its Affiliates, subsidiaries, shareholders, directors, employees or agents shall, acting as trustee for Lender, receive, as the property of Lender, any monies, checks, notes, drafts, or any other payment relating to
and/or proceeds of Accounts or other Collateral which come into their possession or under their control and immediately upon receipt thereof, shall deposit or cause the same to be deposited in the Collateral Control Account. In no event shall the
same be commingled with Borrower’s own funds. Borrower shall continue to remit such payments to the Collateral Control Account until such time as (a) Borrower’s Obligations have been paid in full; or (b) Lender has given
alternative instructions to Borrower following a Material Event of Default.” 
 53. Section 3.7.7 is hereby deleted in its entirety
and replaced with the following Section 3.7.7: 
 “Notwithstanding any other provision of this Agreement, Borrower irrevocably
authorizes Lender to transfer into the Collateral Control Account any funds in payment of or relating to the Accounts that have been deposited into other deposit accounts with Lender or that Lender has otherwise received.” 
 54. Section 3.7.8 is hereby deleted in its entirety and replaced with the following Section 3.7.8: 
 “Lender shall have and is hereby given a security interest in all of the items contained from time to time in the Collateral Control Account and
their proceeds, which security interest shall at all time be perfected pursuant to a Control Agreement to be executed by and among Borrower, Lender and Old Lender (or such other financial institution as Borrower and Lender may agree).”

 55. Section 3.7.9 is hereby deleted in its entirety and replaced with the following Section 3.7.9: 
 “Neither Borrower, nor any Person or entity claiming through Borrower shall have any right in or control over the use of, or any right to withdraw
any amount from the Collateral Control Account which shall be under Lender’s sole control. Unless the instruments so deposited in the Collateral Control Account are dishonored, or unless Lender shall in Lender’s discretion have remitted
the amount thereof to Borrower, Lender shall credit the amount thereof against Borrower’s Obligations to Lender.” 
 56.
Notwithstanding any contrary provision of Subsections (a) (2), (5), or (10) of Section 3.7.10, Lender shall not exercise any of the rights to take certain actions enumerated therein except upon the occurrence and continuation of a
Material Event of Default; or (b) with the consent of Borrower, which shall not unreasonably be withheld. 
 57. Notwithstanding any
contrary provision of Subsection (a) (11) of Section 3.7.10, Lender shall only be authorized to exercise its rights thereunder to the extent reasonably necessary to have its security interest be perfected or remain perfected, except
(a) upon the occurrence and during the continuation of a Material Event of Default; or (b) with the consent of Borrower, which consent shall not unreasonably be withheld. 
 58. Subsection (a ) (12) of Section 3.7.10 relating to Lender’s authority to qualify Borrower to do business in any state is hereby
stricken. 
 59. Notwithstanding any contrary provision of Subsection (b) of Section 3.7.10, Lender shall not exercise its
authority to endorse the words “in full payment” on any check payable to Borrower except (a) upon the occurrence and during the continuation of a Material Event of Default; or (b) with the consent of Borrower, which consent shall
not be unreasonably withheld. 
 60. With respect to Sections 4.1 and 10.1, in the event Borrower becomes aware of any return, allowance or
credit to any Account Debtor of Fifty Thousand Dollars ($50,000) or greater which return, allowance or credit has arisen subsequent to the issuance of an invoice by Borrower to such Account, Lender shall immediately so advise Lender by e-mail, or
telephone. Otherwise, advice of returns, allowances and credits shall occur in the ordinary course of business by electronic reporting by Borrower to Lender. 
 61. The documents referred to in Sections 5.1.21 and 24.12 as being the documents contemplated to be signed/in effect as of the Closing Date (collectively, the “Closing Documents”) are as follows:

 (a) this Agreement; 
 (b) the
Borrowing Resolution and Incumbency Certification; 
 (c) a Director’s Consent to Borrowing; 
 (d) the Guaranty; 
  

			
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 (e) the Security Agreement (All Assets) to secure the Guaranty; 
 (f) the Secretary’s Certificate – Guaranty Resolution; 
 (g) the UCC-1 Financing Statements; 
 (h) the Deposit Pledge Agreement; 
 (i) a Control Agreement with Old Lender; 
 (j) any documents required by Old Lender as a condition to terminating or subordinating its security interest in the Collateral; 
 (k) any cash management agreements to be executed with Old Lender; 
 (l) the Landlord’s Consent and Subordination; 

(m) the Officer’s Certificate signed by each of Mark Simo and Jerry Collazo; 
 (n) the Certificates of Insurance; 
 (o) the
Signature Authorization; and 
 (p) the Acknowledgment. 
 62. As used in Section 5.1.10, the term “Permitted Protest” shall mean a protest taken by Borrower in good faith for which a bond has been posted by Borrower in the amount of the disputed taxes that
have not been paid. 
 63. With respect to its obligations under Section 5.1.15, Borrower has advised Lender of its intention to
relocate its Chief Executive Office in approximately eight (8) months. Accordingly, in addition to currently providing Lender with a fully executed landlord waiver in form and substance satisfactory to Lender from its current landlord, Borrower
shall provide Lender with a fully executed landlord waiver in form and substance acceptable to Lender for such new location of Borrower’s Chief Executive Office prior to or concurrent with Borrower’s occupancy thereof, and in any event,
prior to requesting any advances against any Inventory located at such facility. 
 64. With respect to the control agreements referred to in
Section 5.1.20, Borrower and Lender have agreed that with respect to the Collateral Control Account (s) to be established by Borrower at Old Lender, there shall be a fully executed Control Agreement executed by Borrower, Prior Lender and
Lender in favor of Lender in form and substance satisfactory to Lender as of fifteen (15) Business Days from the Closing Date. 
 65.
The following provision shall be added as Section 5.1.22: 
 “With respect to the repayment of Old Lender, the following shall have
occurred prior to the Closing Date as a condition to the initial funding under the Agreement: Borrower, Lender and Old Lender shall have arrived at a mutually satisfactory resolution of the repayment of Old Lender and the subordination of Old
Lender’s security interest in the Collateral to the security interest of Lender.” 
 66. The following provision is hereby added as
Section 5.1.23: 
 “Mark Simo and Jerry Collazo shall each execute and provide to Lender as part of the Closing Documents separate
Officer’s Representations and Warranties in form and content satisfactory to Lender.” 
 67. Section 6.1 shall be deleted in
its entirety and replaced with the following Section 6.1: 
 “(a) This Agreement will be effective upon the Closing Date, will
continue in full force and effect for twelve (-12-) months thereafter (the “Basic Term”), and shall be further automatically extended, for successive periods equal to the term of the Basic Term (each, a “Renewal Term”), subject
to subsections (b) and (c) of this Section 6.1. 
 (b) If Borrower shall have given Lender written notice of its intention to
terminate (a “Borrower Termination Notice”) at least thirty (30) days prior to the anniversary of the Basic Term or any Renewal Term, this Agreement shall terminate as of the date fixed in the Borrower Termination Notice.
Notwithstanding the foregoing, if Borrower subsequently determines it wishes not to terminate the Agreement, Borrower may retract the Borrower Termination Notice provided that (i) no Material Event of Default has occurred and is continuing; and
(ii) Borrower pays any charges that Lender has occurred in reliance on the prior Borrower Termination Notice. 
 (c) If Lender shall have
given Borrower thirty (30) days’ written notice of its intention to terminate (a “Lender Termination Notice”), this Agreement shall terminate as of the date fixed in the Lender Termination Notice; provided, however, that during
the Basic Term, Lender shall only give a Lender Termination Notice for cause, which cause shall be the occurrence of a Material Event of Default; provided, however, that (i) any fraud, defalcation or conversion on the part of Borrower shall be
deemed to be a Material Event of Default; and (ii) there shall be no requirement that such fraud, defalcation or conversion be continuing in order to permit Lender to exercise any rights or remedies available to Lender under the Agreement or
applicable law. 
  

			
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 (d) After Lender has given any Lender Termination Notice, if Borrower so requests, the thirty
(30) day notice period shall be extended to a period not to exceed ninety (90) days in order to give Borrower additional time to obtain replacement financing. 
 (e) Nothing in this Section 6.1 shall be deemed to preclude Lender from immediately exercising any and all remedies available to it under the Agreement as provided in Sections 11 and 12 upon the occurrence of a
Material Event of Default, including but not limited to accelerating the Obligations under the Agreement and ceasing advancing any further funds.” 
 68. Notwithstanding any contrary provision of Section 6.3, no Prepayment Fee shall be due unless the Agreement has been terminated for cause, which cause shall be the occurrence of a Material Event of Default;
provided, however, that (i) any fraud, defalcation or conversion on the part of Borrower shall be deemed to be a Material Event of Default; and (ii) there shall be no requirement that such fraud, defalcation or conversion be continuing in
order to permit Lender to exercise any rights or remedies available to Lender under the Agreement or applicable law. 
 69. Section 8.1
is hereby deleted and replaced with the following Section 8.1: 
 “So long as Borrower is indebted to Lender, Borrower warrants,
represents, and agrees that the statements set forth herein are true and correct and shall remain so on the date they are given. Borrower shall immediately advise Lender if it learns that any such fact, figure or representation is untrue in any
material respect.” 
 70. Notwithstanding any contrary provision of Section 9.4, the obligation on the part of Borrower to provide
the reports referred to therein shall commence as of sixty (60) days from the Closing Date. 
 71. Notwithstanding any contrary
provision of Section 9.5, Borrower shall provide Lender with copies of its tax returns including any authorized extensions, when filed, which tax returns shall have been filed when required by law. 
 72. Notwithstanding any contrary provision of the terms of Section 9.6, the reporting referred to therein shall be deemed to be required for the
domestic (i.e., North American) locations of Borrower only. 
 73. Section 8.1.3 (a) shall be amended to add the phrase
“subject to normal wear and tear” to the end thereof. 
 74. Section 9.6 is hereby deleted in its entirety and replaced with
the following Section 9.6: 
 “Borrower shall provide Lender a full, complete, and accurate summary of all Borrower’s inventory
activity on a monthly basis from Borrower within five (5) Business Days of the end of the prior period and on a monthly basis from any and all public Warehouses within fifteen (15) days of the end of the prior month.”

 75. With respect to Section 9.19, Lender agrees to give Borrower reasonable notice of its intent to conduct an audit on the Premises.
Notwithstanding the foregoing, after the occurrence of and during the continuation of a Material Event of Default, no such prior notice shall be required. 
 76. With respect to Section 10.2, the credit limit of One Hundred Thousand and 00/100 Dollars ($100,000.00) established thereby shall not be deemed to include Borrower’s accounts payable in the ordinary
course of Borrower’s business. 
 77. With respect to Section 10.6, Borrower has advised Lender of its intent to liquidate certain
obsolete Inventory and to write off certain obsolete Inventory, which liquidation and write off shall be deemed to be permitted by Lender. 
 78. With respect to Section 10.14, Borrower has disclosed to Lender its relationship with its Affiliate, No Fear, which relationship is deemed to be permitted by Lender. 
 79. With respect to Section 10.14, Borrower has advised Lender of the need to provide funds to be used in connection with the re-capitalization of
its Affiliate, LEM, and Lender has agreed to Borrower providing such funds to LEM in an aggregate amount not to exceed Five Hundred Thousand Dollars ($500,000) without Lender’s prior written consent. 
 80. Section 10.19 shall be deleted in its entirety and replaced with the following Section 10.19: 
 “If Borrower’s CEO, CFO or Controller should no longer be employed or should die or become disabled such that such officer was not able to
continue to act in its capacity as an officer, (a “Material Management Change”), Borrower shall (a) so notify Lender within five (5) Business Days of such Material Management Change; and (b) shall replace such CEO, CFO or
Controller with a satisfactory acting CEO, CFO or Controller within six (6) weeks of the Material Management Change.” 
  

			
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 81. Section 11.2 shall be deleted and replaced with the following Section 11.2: 
 “Borrower fails or neglects to perform, keep or observe any material term, provision, condition, covenant or agreement contained in this Agreement,
any of the Loan Documents or in any other present or future agreement between Borrower and Lender.” 
 82. Section 11.3 shall be
amended to add the following phrase to the end thereof: “without being cured.” 
 83. Section 11.5 shall be amended by adding
the following to the end thereof: 
 “without being dismissed in sixty (60) days; provided, however, that Lender may take such
immediate actions permitted under the law that Lender believes are required under the circumstances to prevent or avoid prejudice to Lender, including but not limited to seeking court orders granting relief from the automatic stay or prohibiting the
use of cash collateral, and Lender shall not be required to continue to made advances under the Agreement absent a stipulation on terms and conditions satisfactory to Lender and approved by the bankruptcy court.” 
 84. Section 11.9 shall be deleted and replaced with the following Section 11.9: 
 “Borrower defaults in any material agreement to which Borrower is a party with one or more third Persons resulting in a right by such third Persons,
irrespective of whether exercised to accelerate the maturity of Borrower’s obligations thereunder, provided that the effect of the default of such material agreement results in or causes a Material Adverse Change.” 
 85. Section 11.11 shall be deleted and replaced with the following Section 11.11: 
 “Any material or intentional misstatement exists now or hereafter in any warranty, representation, statement or report made to Lender by Borrower or
any officer, employee, agent or director of Borrower, or any such warranty or representation is withdrawn.” 
 86. Section 11.13
shall be deleted and replaced with the following Section 11.13: 
 “Lender shall reasonably believe that the prospect of
(a) payment of the Loans; or (b) the performance of any of Borrower’s material Obligations to be materially impaired.” 
 87. Section 11.14 shall be deleted and replaced with the following Section 11.14: 
 “The termination, lapse of or
ineffectiveness of any UCC Financing Statement filed in connection with or related to any Collateral granted pursuant to this Agreement or any of the other Loan Documents if Borrower has failed to take any action reasonably requested of Borrower by
Lender. 
 88. The following provision shall be added as Section 11.16: 
 “Any fraud, defalcation or conversion by Borrower.” 
 89. The following provision shall be added as Section 11.17: 
 “Any breach or default under this
Agreement, the Loan Documents or any other present or future agreement between Borrower and Lender shall become a Material Event of Default if Borrower has not cured said breach or default within the time period specified by Lender in its sole
discretion in any notice of default, which time period shall depend upon the facts and circumstances then in effect.” 
 90. The
following provision shall be added as Section 12.1.14: 
 “12.1.14. Lender shall not assign any or all of its rights to any person
or entity, or any principal or affiliate thereof, engaged principally in the action sports wear or fashion industry.” 
 91.
Section 14.5 is hereby deleted and replaced with the following Section 14.5: 
 “Lender shall give Borrower written notice of
any Material Event of Default promptly after Lender has made the determination that it intends to exercise its right and remedies as a lender.” 
 92. The following provision shall be added as Section 28, and entitled “Further Assurances: 
 “Borrower shall execute such other and further documents and instruments as Lender may reasonably request to implement the provisions of this Agreement and to perfect and protect the security interests of Lender.” 
 93. Lender has been provided a draft of the document which represents the guaranty by Orange 21 Inc. (the “Guarantor”) of a loan to its
subsidiary LEM Srl (“LEM”) from San Paulo Bank in Italy. Lender hereby consents to such guaranty, provided that no material changes appear in the final guaranty document. Lender reserves the right to review and consent to the final and
fully executed guaranty document. 
  

			
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 94. Borrower has advised Lender of that certain litigation pending in the United States District Court
for the District of Southern California, entitled In re ORANGE 21 INC. SECURITIES LITIGATION, being case no. 05-CV-0595-JM (BLM) (the “Class Action Suit”) and that certain litigation pending in the Superior Court for the County of
San Diego (confirm) entitled In Re ORANGE 21 INC. DERIVATIVE LITIGATION, being case no. GIC858051 (the “Derivative Suit”). The Class Action Suit and the Derivative Suit are sometimes collectively referred to as the “Securities
Litigation”. Borrower has scheduled or will schedule a hearing for the approval of the settlement of the Securities Litigation. Borrower will advise Lender of all material developments in the Securities Litigation and will provide Lender with
copies of the settlement agreements, the orders approving the settlement and the dismissal of the Securities Litigation. 
 95. Borrower
has advised Lender of the existence of that certain litigation pending in the United States District Court for the Central District of Southern California entitled Oakley, Inc. vs. Spy Optic, Inc. a California corporation and Orange 21, Inc., a
Delaware corporation, being case no. SAVC05-219 AHS (RNBx) (the “Patent Litigation”). Borrower has advised Lender that a settlement demand in the sum of Fifty-five Thousand and 00/100 Dollars ($55,000) has been made by plaintiff.
Borrower shall keep Lender informed of all material developments in the Patent Litigation. 
  

			
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 EXHIBIT A 
  

			
	Collateral Account
		
	Name:	  	BFI Business Finance
	Bank:	  	Comerica Bank
	Address:	  	333 West Santa Clara Street
		  	San Jose, California 95113
	
	Collateral Control Account
		
	Name:	  	Spy Optic, Inc. - Collateral Control Account
	Bank:	  	Comerica Bank (to be verified)
	Address:	  	701 B Street, Suite 600
		  	San Diego, California 92101
	
	Post Office Box
		
	Name:	  	BFI Business Finance
	Address:	  	P.O. Box 225
		  	Santa Clara, California 95052-0225

  

			
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