Document:

Fifth Amended and Restated Loan and Security Agreement

 Exhibit 10 
 Execution Version 
  

 PW EAGLE, INC., 
 AND 
 USPOLY COMPANY, LLC 
 AS
CO-BORROWERS 
  

 FIFTH AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT 
 Dated: April 27, 2006 
  

 BANK OF AMERICA, N.A.,

 Individually and as Agent for any Lender which is 
 or becomes a Party hereto 
  

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page
	 SECTION 1.
	  	 CREDIT FACILITY
	  	1
			
	 1.1
	  	 Loans
	  	1
	 1.2
	  	 Letters of Credit; LC Guaranties
	  	4
			
	 SECTION 2.
	  	 INTEREST, FEES AND CHARGES
	  	5
			
	 2.1
	  	 Interest
	  	5
	 2.2
	  	 Computation of Interest and Fees
	  	5
	 2.3
	  	 Fee Letter
	  	6
	 2.4
	  	 Letter of Credit Fees and LC Guaranty Fees
	  	6
	 2.5
	  	 Unused Line Fee
	  	6
	 2.6
	  	 Prepayment Fee
	  	7
	 2.7
	  	 Audit Fees
	  	7
	 2.8
	  	 Reimbursement of Expenses
	  	7
	 2.9
	  	 Bank Charges
	  	8
	 2.10
	  	 Collateral Protection Expenses; Appraisals
	  	8
	 2.11
	  	 Payment of Charges
	  	8
	 2.12
	  	 No Deductions
	  	8
	 2.13
	  	 Increase of Aggregate Revolving Loan Commitments
	  	9
			
	 SECTION 3.
	  	 LOAN ADMINISTRATION
	  	10
			
	 3.1
	  	 Manner of Borrowing Revolving Credit Loans/LIBOR Option
	  	10
			
	 3.2
	  	 Payments
	  	13
	 3.3
	  	 Mandatory and Optional Prepayments
	  	14
	 3.4
	  	 Application of Payments and Collections
	  	15
	 3.5
	  	 All Loans to Constitute One Obligation
	  	16
	 3.6
	  	 Loan Account
	  	16
	 3.7
	  	 Statements of Account
	  	16
	 3.8
	  	 Increased Costs
	  	16
	 3.9
	  	 Basis for Determining Interest Rate Inadequate
	  	17
	 3.10
	  	 Sharing of Payments, Etc
	  	18
			
	 SECTION 4.
	  	 TERM AND TERMINATION
	  	18
			
	 4.1
	  	 Term of Agreement
	  	18
	 4.2
	  	 Termination
	  	18
			
	 SECTION 5.
	  	 SECURITY INTERESTS
	  	19
			
	 5.1
	  	 Security Interest in Collateral
	  	19
	 5.2
	  	 Other Collateral
	  	21
	 5.3
	  	 Lien Perfection; Further Assurances
	  	21
	 5.4
	  	 Lien on Realty
	  	21

  

 i 

 TABLE OF CONTENTS 
 (continued) 
  

					
	 	  	 	  	Page
	 SECTION 6.
	  	 COLLATERAL ADMINISTRATION
	  	22
			
	 6.1
	  	 General
	  	22
	 6.2
	  	 Administration of Accounts
	  	23
	 6.3
	  	 Administration of Inventory
	  	24
	 6.4
	  	 Administration of Equipment
	  	25
	 6.5
	  	 Payment of Charges
	  	25
			
	 SECTION 7.
	  	 REPRESENTATIONS AND WARRANTIES
	  	25
			
	 7.1
	  	 General Representations and Warranties
	  	25
	 7.2
	  	 Continuous Nature of Representations and Warranties
	  	32
	 7.3
	  	 Survival of Representations and Warranties
	  	32
			
	 SECTION 8.
	  	 COVENANTS AND CONTINUING AGREEMENTS
	  	32
			
	 8.1
	  	 Affirmative Covenants
	  	32
	 8.2
	  	 Negative Covenants
	  	36
	 8.3
	  	 Specific Financial Covenants
	  	40
			
	 SECTION 9.
	  	 CONDITIONS PRECEDENT
	  	40
			
	 9.1
	  	 Documentation
	  	40
	 9.2
	  	 No Default
	  	40
	 9.3
	  	 Other Conditions
	  	40
	 9.4
	  	 No Litigation
	  	40
	 9.5
	  	 Material Adverse Effect
	  	40
	 9.6
	  	 Availability
	  	40
	 9.7
	  	 Closing Fees
	  	40
	 9.8
	  	 Environmental Matters
	  	40
			
	 SECTION 10.
	  	 EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT
	  	41
			
	 10.1
	  	 Events of Default
	  	41
	 10.2
	  	 Acceleration of the Obligations
	  	43
	 10.3
	  	 Other Remedies
	  	43
	 10.4
	  	 Set Off and Sharing of Payments
	  	45
	 10.5
	  	 Remedies Cumulative; No Waiver
	  	45
			
	 SECTION 11.
	  	 AGENT
	  	46
			
	 11.1
	  	 Authorization and Action
	  	46
	 11.2
	  	 Agent’s Reliance, Etc
	  	46
	 11.3
	  	 Bank of America and Affiliates
	  	47
	 11.4
	  	 Lender Credit Decision
	  	47
	 11.5
	  	 Indemnification
	  	47
	 11.6
	  	 Rights and Remedies to be Exercised by Agent Only
	  	48
	 11.7
	  	 Agency Provisions Relating to Collateral
	  	48
	 11.8
	  	 Agent’s Right to Purchase Commitments
	  	49

  

 ii 

 TABLE OF CONTENTS 
 (continued) 
  

					
	 	  	 	  	Page
	 11.9
	  	 Right of Sale, Assignment, Participations
	  	49
	 11.10
	  	 Amendment
	  	51
	 11.11
	  	 Resignation of Agent; Appointment of Successor
	  	51
	 11.12
	  	 Audit and Examination Reports; Disclaimer by Lenders
	  	52
			
	 SECTION 12.
	  	 MISCELLANEOUS
	  	53
			
	 12.1
	  	 Power of Attorney
	  	53
	 12.2
	  	 Indemnity
	  	53
	 12.3
	  	 Sale of Interest
	  	54
	 12.4
	  	 Severability
	  	54
	 12.5
	  	 Successors and Assigns
	  	54
	 12.6
	  	 Cumulative Effect; Conflict of Terms
	  	54
	 12.7
	  	 Execution in Counterparts
	  	54
	 12.8
	  	 Notice
	  	54
	 12.9
	  	 Consent
	  	55
	 12.10
	  	 Credit Inquiries
	  	55
	 12.11
	  	 Time of Essence
	  	56
	 12.12
	  	 Entire Agreement
	  	56
	 12.13
	  	 Interpretation
	  	56
	 12.14
	  	 Confidentiality
	  	56
	 12.15
	  	 GOVERNING LAW; CONSENT TO FORUM
	  	56
	 12.16
	  	 WAIVERS BY CO-BORROWERS
	  	57
	 12.17
	  	 Advertisement
	  	58
	 12.18
	  	 No Novation
	  	58
	 12.19
	  	 Joint and Several Liability and Reimbursement
	  	58
	 12.20
	  	 Defaulting Lender
	  	59

  

 iii 

 FIFTH AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT 
 THIS FIFTH AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT is made as of this 27th day of April, 2006, by and among BANK OF AMERICA, N.A., a national banking association (“Bank of America”), with an office at One South
Wacker Drive, Suite 3400, Chicago, Illinois 60606, individually as a Lender and as Agent (“Agent”) for itself and any other financial institution which is or becomes a party hereto (each such financial institution, including Bank of
America, is referred to hereinafter individually as a “Lender” and collectively as “Lenders”), LENDERS, PW EAGLE, INC., a Minnesota corporation with its chief executive office and principal place of business at 1550
Valley River Drive, Eugene, Oregon 97401 (“Borrower”) and USPOLY COMPANY, LLC, a Minnesota limited liability company with its chief executive office and principal place of business at 7901 North Kickapoo Street, Shawnee,
Oklahoma 74804 (“USPoly”). Borrower and USPoly are sometimes hereinafter referred to collectively as “Co-Borrowers” and individually as “Co-Borrower”. Capitalized terms used in this Agreement have the meanings assigned
to them in Appendix A, General Definitions. Accounting terms not otherwise specifically defined herein shall be construed in accordance with GAAP consistently applied. 
 RECITALS 
 A. Borrower, Agent’s predecessor-in-interest, Fleet Capital
Corporation, and certain Lenders, entered into a certain Fourth Amended and Restated Loan and Security Agreement dated as of October 25, 2004 (said Fourth Amended and Restated Loan and Security Agreement, as amended from time to time, is
hereinafter referred to as the “Original Loan Agreement”); 
 B. Co-Borrowers, Agent and Lenders wish to amend and restate the
Original Loan Agreement pursuant to the terms hereof; and 
 C. Accordingly, in consideration of the mutual agreements contained herein, and
subject to the terms and conditions hereof, the parties hereto agree as follows: 
 SECTION 1. CREDIT FACILITY 
 Subject to the terms and conditions of, and in reliance upon the representations and warranties made in, this Agreement and the other Loan Documents,
Lenders, severally and not jointly, agree to make a Total Credit Facility available upon Co-Borrowers’ request therefor, as follows: 
 1.1 Loans. 
 1.1.1 Revolving Credit Loans. Each Lender agrees, severally and not jointly, for so long
as no Default or Event of Default exists, to make Revolving Credit Loans to Co-Borrowers from time to time during the period from the date hereof to but not including the last day of the Term, as requested by Borrower, on its own behalf and on
behalf of each other Co-Borrower, in the manner set forth in subsection 3.1.1 hereof, up to a maximum principal amount at any time outstanding equal to the lesser of (i) such Lender’s Revolving Loan Commitment minus the product
of such Lender’s Revolving Loan Percentage and the LC Amount minus the product of such Lender’s Revolving Loan Percentage and reserves, if any and 

 
(ii) the product of such Lender’s Revolving Loan Percentage and an amount equal to the Borrowing Base at such time minus the LC Amount
minus reserves, if any. Agent shall have the right to establish reserves in such amounts, and with respect to such matters, as Agent shall deem necessary or appropriate in its sole judgment, or as it may from time to time be directed to do so
by Majority Lenders, against the amount of Revolving Credit Loans which Borrower may otherwise request under this subsection 1.1.1, including, without limitation, with respect to (i) price adjustments, damages, unearned discounts, returned
products or other matters for which credit memoranda are issued in the ordinary course of Co-Borrowers’ business; (ii) potential dilution related to Accounts; (iii) shrinkage, spoilage and obsolescence of Co-Borrowers’ Inventory;
(iv) slow moving Inventory; (v) other sums chargeable against Co-Borrowers’ Loan Account as Revolving Credit Loans under any section of this Agreement; (vi) amounts owing by any Co-Borrower to any Person to the extent secured by
a Lien on, or trust over, any Property of a Co-Borrower (other than Permitted Liens); (vii) amounts owing by Co-Borrowers in connection with Product Obligations; and (viii) such other specific events, conditions or contingencies as to
which Agent, in its sole judgment or at the direction of Majority Lenders, determines reserves should be established from time to time hereunder. The Revolving Credit Loans shall be repayable in accordance with the terms of the Revolving Notes and
shall be secured by all of the Collateral. 
 1.1.2 Overadvances. Insofar as Borrower may request, on its own behalf
and on behalf of each other Co-Borrower and Agent or Majority Lenders (as provided below), may be willing in their sole and absolute discretion to make Revolving Credit Loans to Co-Borrowers at a time when the unpaid balance of Revolving Credit
Loans plus the sum of the LC Amount plus the amount of LC Obligations that have not been reimbursed by Co-Borrowers or funded with a Revolving Credit Loan, plus reserves, exceeds, or would exceed with the making of any such Revolving Credit Loan,
the Borrowing Base (and such Loan or Loans being herein referred to individually as an “Overadvance” and collectively, as “Overadvances”), Agent shall enter such Overadvances as debits in the Loan Account. All Overadvances shall
be repaid on demand, shall be secured by the Collateral and shall bear interest as provided in this Agreement for Revolving Credit Loans generally. Any Overadvance made pursuant to the terms hereof shall be made by all Lenders ratably in accordance
with their respective Revolving Loan Percentages. Overadvances in the aggregate amount of One Million Dollars ($1,000,000) or less may, unless a Default or Event of Default (other than an Event of Default resulting from the applicable Overadvance)
has occurred and is continuing, be made in the sole and absolute discretion of Agent. Overadvances in an aggregate amount of more than One Million Dollars ($1,000,000) but less than Three Million Dollars ($3,000,000) may, unless a Default or an
Event of Default (other than an Event of Default resulting from the Overadvance) has occurred and is continuing, be made in the sole and absolute discretion of the Majority Lenders. Overadvances in an aggregate amount of Three Million Dollars
($3,000,000) or more and Overadvances to be made after the occurrence and during the continuation of a Default or an Event of Default shall require the consent of all Lenders. The foregoing notwithstanding, in no event, unless otherwise consented to
by all Lenders, (w) shall any Overadvances be outstanding for more than ninety (90) consecutive days, (x) after all outstanding Overadvances have been repaid, shall Agent or Lenders make any additional Overadvances unless sixty
(60) days or more have expired since the last date on which any Overadvances were outstanding, (y) shall Overadvances be outstanding on more than ninety (90) days within any one hundred eighty day (180) period or (z) shall
Agent make Revolving Credit Loans on behalf of Lenders under this subsection 1.1.2 to the extent such 

  

 2 

 
Revolving Credit Loans would cause a Lender’s share of the Revolving Credit Loans to exceed such Lender’s Revolving Loan Commitment minus such
Lender’s Revolving Loan Percentage of the LC Amount. 
 1.1.3 Use of Proceeds. The Revolving Credit Loans shall be
used solely for (i) Co-Borrowers’ general operating capital needs in a manner consistent with the provisions of this Agreement and all applicable laws and (ii) other purposes permitted under this Agreement. 
 1.1.4 Swingline Loans. 
 (a) In order to reduce the frequency of transfers of funds from Lenders to Agent for making Revolving Credit Loans and for so long as no Default or Event of Default exists, Agent shall be permitted (but not required)
to make Revolving Credit Loans to Co-Borrowers upon request by Borrower, on its own behalf and on behalf of each other Co-Borrower (such Revolving Credit Loans to be designated as “Swingline Loans”), provided that the aggregate
amount of Swingline Loans outstanding at any time will not (i) exceed Five Million Dollars ($5,000,000); (ii) when added to the principal amount of Agent’s other Revolving Credit Loans then outstanding plus Agent’s Revolving Loan
Percentage of the LC Amount, exceed Agent’s Revolving Credit Commitment; or (iii) when added to the principal amount of all other Revolving Credit Loans then outstanding plus the LC Amount, exceed the Borrowing Base. Within the foregoing
limits, Co-Borrowers may borrow, repay and reborrow Swingline Loans. All Swingline Loans shall be treated as Revolving Credit Loans for purposes of this Agreement, except that (a) all Swingline Loans shall be included within the Base Rate
Revolving Portion and (b) notwithstanding anything herein to the contrary (other than as set forth in the next succeeding sentence), all principal and interest paid with respect to Swingline Loans shall be for the sole account of Agent in its
capacity as the lender of Swingline Loans. Notwithstanding the foregoing, not more than 2 Business Days after (1) Lenders receive notice from Agent that a Swingline Loan has been advanced in respect of a drawing under a Letter of Credit or LC
Guaranty or (2) in any other circumstance, demand is made by Agent during the continuance of an Event of Default, each Lender shall irrevocably and unconditionally purchase and receive from Agent, without recourse or warranty from Agent, an
undivided interest and participation in each Swingline Loan to the extent of such Lender’s Revolving Loan Percentage thereof (and to the extent such Swingline Loan has not been refinanced with Revolving Loans pursuant to
subsection 1.1.4(b)), by paying to Agent, in same day funds, an amount equal to such Lender’s Revolving Loan Percentage of such Swingline Loan. 
 (b) As frequently as determined by Agent, but not less frequently than one day per each week (which day shall be a Business Day), Agent shall notify each Lender of the aggregate amount of Swingline Loans outstanding
as of the end of the previous day and the amount of Revolving Loans required to be made by each Lender to refinance such outstanding Swingline Loans (which shall be in the amount of each Lender’s Revolving Loan Percentage of such outstanding
Swingline Loans). Upon its receipt of a request from Agent under the first sentence of this subsection 1.1.4(b), each Lender (including Bank of America) shall make a Revolving Loan (which shall not be made as a Swingline Loan) in an amount
equal to its Revolving Loan Percentage of the 

  

 3 

 
aggregate principal amount of Swingline Loans to be refinanced, and make the proceeds of such Revolving Loans available to Agent, in immediately available
funds, at the main office of Agent not later than 12:00 noon (Chicago time) on the date such notice was received. Notwithstanding anything to the contrary, a Lender shall not be obligated to make any Revolving Loan or purchase any participation in
any Swingline Loan under this Section unless (A) Agent believed in good faith that all conditions to making the subject Revolving Loan were satisfied at the time the related Swingline Loan was made, or (B) such Lender has actual knowledge,
by receipt of the statements furnished to it pursuant to Section 8.1.3 or otherwise, that any such condition had not been satisfied and failed to notify Agent in a writing received by Agent prior to the time it made such Swingline Loan that
Agent was not authorized to make a Swingline Loan until such condition has been satisfied. The proceeds of Revolving Loans made pursuant to the preceding sentence shall be delivered to Agent (and not to any Co-Borrower) and applied to the
outstanding Swingline Loans. 
 1.1.5 Agent Loans. Upon the occurrence and during the continuance of an Event of
Default, Agent, in its sole discretion, may make Revolving Credit Loans on behalf of Lenders, in an aggregate amount not to exceed Two Million Dollars ($2,000,000), if Agent, in its reasonable business judgment, deems that such Revolving Credit
Loans are necessary or desirable (i) to protect all or any portion of the Collateral, (ii) to enhance the likelihood, or maximize the amount of, repayment of the Loans and the other Obligations, or (iii) to pay any other amount
chargeable to Co-Borrowers pursuant to this Agreement, including without limitation costs, fees and expenses as described in Sections 2.8 and 2.9 that have not been reimbursed by Co-Borrowers or Lenders (hereinafter, “Agent Loans”);
provided, that in no event shall (a) the principal amount of Agent Loans cause the Revolving Credit Loans to exceed the aggregate Revolving Loan Commitments and (b) Majority Lenders may at any time revoke Agent’s authorization
to make Agent Loans. Any such revocation must be in writing and shall become effective prospectively upon Agent’s receipt thereof. Each Lender shall be obligated to advance its Revolving Loan Percentage of each Agent Loan in the manner provided
in subsection 3.1.3 hereof. If Agent Loans are made pursuant to the preceding sentence, then (a) the Borrowing Base shall be deemed increased by the amount of such permitted Agent Loans, but only for so long as Agent allows such Agent
Loans to be outstanding, and (b) all Lenders that have committed to make Revolving Credit Loans shall be bound to make, or permit to remain outstanding, such Agent Loans based upon their Revolving Loan Percentages in accordance with the terms
of this Agreement. 
 1.2 Letters of Credit; LC Guaranties. Agent agrees, for so long as no Default or Event of Default exists and if
requested by Borrower, on its own behalf and on behalf of each other Co-Borrower, (i) to issue its, or cause to be issued by Bank or another Affiliate of Agent, on the date requested by Borrower, on its behalf and on behalf of each other
Co-Borrower, Letters of Credit for the account of Co-Borrowers or (ii) execute LC Guaranties by which Agent, Bank or another Affiliate of Agent, on the date requested by Borrower, on its behalf and on behalf of each other Co-Borrower, shall
guaranty the payment or performance by Co-Borrowers of their reimbursement obligations with respect to Letters of Credit; provided that the LC Amount shall not exceed Ten Million Dollars ($10,000,000) at any time. No Letter of Credit or LC
Guaranty may have an expiration date after the last day of the Term. Each Letter of Credit shall be payable on sight draft only. Notwithstanding anything to the contrary contained herein, 

  

 4 

 
Co-Borrowers, Agent and Lenders hereby agree that all LC Obligations and all obligations of Co-Borrowers relating thereto shall be satisfied by the prompt
issuance of one or more Revolving Credit Loans that are Base Rate Portions, which Co-Borrowers hereby acknowledge are requested and Lenders hereby agree to fund. In the event that any Lender does not promptly make its portion of such Revolving
Credit Loans, for any reason, to satisfy its ratable portion of all then existing LC Obligations, such Lender hereby agrees to pay to Agent, on demand, an amount equal to such LC Obligations multiplied by such Lender’s Revolving Loan
Percentage, and until so paid, such amount shall be secured by the Collateral and shall bear interest and be payable at the same rate and in the same manner as Base Rate Portions. Immediately upon the issuance of a Letter of Credit or an LC Guaranty
under this Agreement, each Lender shall be deemed to have irrevocably and unconditionally purchased and received from Agent, without recourse or warranty, an undivided interest and participation therein equal to the relevant LC Obligations
multiplied by such Lender’s Revolving Loan Percentage. 
 SECTION 2. INTEREST, FEES AND CHARGES 
 2.1 Interest. 
 2.1.1
Rates of Interest. Interest shall accrue on the principal amount of the Base Rate Portions outstanding at the end of each day at a fluctuating rate per annum equal to the Applicable Margin then in effect plus the Base Rate. Said rate
of interest shall increase or decrease by an amount equal to any increase or decrease in the Base Rate, effective as of the opening of business on the day that any such change in the Base Rate occurs. If Borrower, on its own behalf and on behalf of
each other Co-Borrower, exercises its LIBOR Option as provided in Section 3.1, interest shall accrue on the principal amount of the LIBOR Portions outstanding at the end of each day at a rate per annum equal to the Applicable Margin then in
effect plus the LIBOR applicable to each LIBOR Portion for the corresponding Interest Period. 
 2.1.2 Default Rate
of Interest. At the option of Agent or the Majority Lenders, upon and after the occurrence of an Event of Default, and during the continuation thereof, the principal amount of all Loans shall bear interest at a rate per annum equal to 2.0%
plus the interest rate otherwise applicable thereto (the “Default Rate”). 
 2.1.3 Maximum Interest.
In no event whatsoever shall the aggregate of all amounts deemed interest hereunder or under the Notes and charged or collected pursuant to the terms of this Agreement or pursuant to the Notes exceed the highest rate permissible under any law which
a court of competent jurisdiction shall, in a final determination, deem applicable hereto. If any provisions of this Agreement or the Notes are in contravention of any such law, such provisions shall be deemed amended to conform thereto (the
“Maximum Rate”). If at any time, the amount of interest paid hereunder is limited by the Maximum Rate, and the amount at which interest accrues hereunder is subsequently below the Maximum Rate, the rate at which interest accrues hereunder
shall remain at the Maximum Rate, until such time as the aggregate interest paid hereunder equals the amount of interest that would have been paid had the Maximum Rate not applied. 
 2.2 Computation of Interest and Fees. Interest, Letter of Credit and LC Guaranty fees and Unused Line Fees hereunder shall be calculated daily and
shall be computed on the actual number of days elapsed over a year of 360 days. 
  

 5 

 2.3 Fee Letter. Co-Borrower shall pay to Agent certain fees and other amounts in accordance with
the terms of the fee letter between Co-Borrower and Agent (the “Fee Letter”). 
 2.4 Letter of Credit Fees and LC Guaranty
Fees. Co-Borrowers shall pay to Agent: 
 (i) for standby Letters of Credit and LC Guaranties of standby Letters of
Credit, for the ratable benefit of Lenders a per annum fee, payable monthly in arrears, equal to the Applicable Margin then in effect of the daily average aggregate undrawn available amount of such Letters of Credit and LC Guaranties of such standby
Letters of Credit outstanding during the applicable month, plus all normal and customary charges associated with the issuance, processing and administration thereof, which fees and charges shall be deemed fully earned upon issuance of each
such Letter of Credit or LC Guaranty of such standby Letters of Credit or as advised by Agent or Bank. Such amounts shall be due and payable monthly in arrears on the first Business Day of each month following the issuance of such standby Letter of
Credit or LC Guaranty of such standby Letter of Credit or as advised by Agent or Bank and shall not be subject to rebate or proration upon the termination of this Agreement for any reason; 
 (ii) for documentary Letters of Credit and LC Guaranties of documentary Letters of Credit, for the ratable benefit of Lenders, a per annum
fee, payable monthly in arrears, equal to the Applicable Margin then in effect of the undrawn available amount of each such documentary Letter of Credit or LC Guaranties of such documentary Letters of Credit outstanding during the applicable month
plus all normal and customary charges associated with the issuance, processing and administration of each such documentary Letter of Credit or LC Guaranty of such documentary Letters of Credit (which fees and charges shall be fully earned
upon issuance, renewal or extension (as the case may be) of each such documentary Letter of Credit or LC Guaranty of such documentary Letters of Credit or as otherwise advised by Agent or Bank. Such amounts shall be due and payable monthly in
arrears on the first Business Day of each month following the issuance of such documentary Letter of Credit or LC Guaranty of such documentary Letter of Credit or as otherwise advised by Agent or Bank, and shall not be subject to rebate or proration
upon the termination of this Agreement for any reason; and 
 (iii) with respect to all Letters of Credit and LC Guaranties,
for the account of Agent only, a per annum fronting fee equal to 0.125% of the aggregate average daily undrawn available amount of such Letters of Credit or LC Guaranties outstanding during the applicable month, which fronting fees shall be payable
monthly in arrears on the first Business Day of each month and shall not be subject to rebate or proration upon the termination of this Agreement for any reason. 
 2.5 Unused Line Fee. Co-Borrowers shall pay to Agent, for the ratable benefit of Lenders, a fee (the “Unused Line Fee”) equal to the Applicable Margin per annum multiplied by the average daily amount
by which the Revolving Credit Maximum Amount exceeds the sum of (i) the outstanding principal balance of the Revolving Credit Loans plus (ii) the LC Amount; provided, that for purposes of allocating the Unused Line Fee among
Lenders, outstanding 

  

 6 

 
Swingline Loans shall not be included as part of the outstanding balance of the Loans for purposes of calculating such fees owed to Lenders other than Agent.
The Unused Line Fee shall be payable monthly in arrears on the first day of each month hereafter. 
 2.6 Prepayment Fee. At the
effective date of termination of this Agreement for any reason other than a Change in Control, Co-Borrowers shall pay to Agent, for the ratable benefit of Lenders (in addition to the then outstanding principal, accrued interest and other charges
owing under the terms of this Agreement and any of the other Loan Documents) and any amounts owing pursuant to subsection 3.2.5, as liquidated damages for the loss of the bargain and not as a penalty, an amount equal to one-half of one percent
( 1/2%) of the Total Credit Facility if termination occurs during the period from the Closing Date to
October 26, 2007, one-quarter of one percent ( 1/4%) of the Total Credit Facility if termination occurs
during the period from October 27, 2007 through October 26, 2008 or one-eighth of one percent (0.125%) if termination occurs after October 26, 2008 but prior to April 26, 2011. If termination occurs on April 26, 2011, no
termination charge shall be payable. 
 2.7 Audit Fees. Co-Borrowers shall pay to Agent audit fees in accordance with
Agent’s current schedule of fees in effect from time to time in connection with audits of the books and records and Properties of Borrower and its Subsidiaries and such other matters as Agent shall deem appropriate in its sole judgment, plus
all reasonable out-of-pocket expenses incurred by Agent in connection with such audits, whether such audits are conducted by employees of Agent or by third parties hired by Agent. Such audit fees and out-of-pocket expenses shall be payable on the
first day of the month following the date of issuance by Agent of a request for payment thereof to Co-Borrowers. Agent may, in its discretion, provide for the payment of such amounts by making appropriate Revolving Credit Loans to Co-Borrowers and
charging Co-Borrowers’ Loan Account therefor. The foregoing notwithstanding, Co-Borrowers shall not be required to reimburse Agent for the costs of more than one (1) audit within any calendar year unless an Event of Default has occurred
and is continuing. 
 2.8 Reimbursement of Expenses. If, at any time or times regardless of whether or not an Event of Default then
exists, (i) Agent incurs legal or accounting expenses or any other costs or out-of-pocket expenses in connection with (1) the negotiation and preparation of this Agreement or any of the other Loan Documents, any amendment of or
modification of this Agreement or any of the other Loan Documents, or any syndication or attempted syndication of the Obligations (including, without limitation, printing and distribution of materials to prospective Lenders and all costs associated
with bank meetings, but excluding any closing fees paid to Lenders in connection therewith) or (2) the administration of this Agreement or any of the other Loan Documents and the transactions contemplated hereby and thereby; or (ii) Agent
or any Lender incurs legal or accounting expenses or any other costs or out-of-pocket expenses in connection with (1) any litigation, contest, dispute, suit, proceeding or action (whether instituted by Agent, any Lender, any Co-Borrower or any
other Person) relating to the Collateral, this Agreement or any of the other Loan Documents or any Co-Borrowers’, any of their Subsidiaries’ or any Guarantor’s affairs; (2) any attempt to enforce any rights of Agent or any Lender
against any Co-Borrower or any other Person which may be obligated to Agent or any Lender by virtue of this Agreement or any of the other Loan Documents, including, without limitation, the Account Debtors; or (3) any attempt to inspect, verify,
protect, preserve, restore, collect, sell, liquidate or otherwise dispose of or realize upon the Collateral; then all such legal and 

  

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accounting expenses, other costs and out of pocket expenses of Agent or any Lender, as applicable, shall be charged to Co-Borrowers; provided, that
Co-Borrowers shall not be responsible for such costs and out-of-pocket expenses to the extent incurred because of the gross negligence or willful misconduct of Agent or any Lender. All amounts chargeable to Co-Borrowers under this Section 2.8
shall be Obligations secured by all of the Collateral, shall be payable on demand to Agent or such Lender, as the case may be, and shall bear interest from the date such demand is made until paid in full at the rate applicable to Base Rate Revolving
Portions from time to time. Co-Borrowers shall also reimburse Agent for expenses incurred by Agent in its administration of the Collateral to the extent and in the manner provided in Sections 2.9 and 2.10 hereof. The foregoing notwithstanding,
Co-Borrowers shall not be required to reimburse Agent or any Lender for any costs or expenses incurred in any action where there is entered a final non-appealable court order pursuant to which Agent or Lenders are not the prevailing party (as
determined by said order). 
 2.9 Bank Charges. Co-Borrowers shall pay to Agent, on demand, any and all fees, costs or expenses which
Agent or any Lender pays to a bank or other similar institution arising out of or in connection with (i) the forwarding to any Co-Borrower or any other Person on behalf of any Co-Borrower, by Agent or any Lender, of proceeds of Loans made to
Co-Borrowers pursuant to this Agreement and (ii) the depositing for collection by Agent or any Lender of any check or item of payment received or delivered to Agent or any Lender on account of the Obligations. 
 2.10 Collateral Protection Expenses; Appraisals. All out-of-pocket expenses incurred in protecting, storing, warehousing, insuring, handling,
maintaining and shipping the Collateral, and any and all excise, property, sales, and use taxes imposed by any state, federal, or local authority on any of the Collateral or in respect of the sale thereof shall be borne and paid by Co-Borrowers. If
Co-Borrowers fail to promptly pay any portion thereof when due, Agent may, at its option, but shall not be required to, pay the same and charge Co-Borrowers therefor. Additionally, from time to time, Agent may, at Co-Borrowers’ expense, obtain
appraisals from appraisers (who may be personnel of Agent), stating the then current fair market value of all or any portion of the real estate or personal Property of Borrower or any of its Subsidiaries, including without limitation the Inventory
of Borrower and its Subsidiaries; provided that unless an Event of Default has occurred and is continuing, Agent shall not be permitted to obtain at Co-Borrowers’ expense more than one such appraisal per calendar year with respect to
Borrower’s and its Subsidiaries’ Inventory or more than one such appraisal per calendar year with respect to Borrower’s and its Subsidiaries’ Equipment and real Property. 
 2.11 Payment of Charges. All amounts chargeable to Co-Borrowers under this Agreement shall be Obligations secured by all of the Collateral, shall
be, unless specifically otherwise provided, payable on demand and shall bear interest from the date demand was made or such amount is due, as applicable, until paid in full at the rate applicable to Base Rate Portions from time to time. 

2.12 No Deductions. Any and all payments or reimbursements made hereunder shall be made free and clear of and without deduction for any and all
taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto; excluding, however, the following: taxes imposed on the income of Agent or any Lender or franchise taxes by the 

  

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jurisdiction under the laws of which Agent or any Lender is organized or doing business or any political subdivision thereof and taxes imposed on its income
by the jurisdiction of Agent’s or such Lender’s applicable lending office or any political subdivision thereof or franchise taxes (all such taxes, levies, imposts, deductions, charges or withholdings and all liabilities with respect
thereto excluding such taxes imposed on net income and franchise taxes, herein “Tax Liabilities”). If Co-Borrowers shall be required by law to deduct any such Tax Liabilities from or in respect of any sum payable hereunder to Agent or any
Lender, then the sum payable hereunder shall be increased as may be necessary so that, after all required deductions are made, Agent or such Lender receives an amount equal to the sum it would have received had no such deductions been made.

 2.13 Increase of Aggregate Revolving Loan Commitments. 
 (i) At any time, Borrower may request (in consultation with Agent) that the aggregate Revolving Loan Commitments be increased by an
aggregate amount of up to $25,000,000 without the prior written consent of the Majority Lenders, provided that the aggregate Revolving Loan Commitments shall at no time exceed $125,000,000. Such request shall be made in a written notice given
to Agent and Lenders by Borrower not less than twenty (20) Business Days prior to the proposed effective date of such increase, which notice (a “Commitment Increase Notice”) shall specify the amount of the proposed increase in the
aggregate Revolving Loan Commitments and the proposed effective date of such increase. No Lender shall have any obligation to increase its Revolving Loan Commitment pursuant to a Commitment Increase Notice. 
 (ii) Not later than three (3) Business Days prior to the proposed effective date, Borrower may notify Agent of any financial
institution that shall have agreed to become a “Lender” party hereto (a “Proposed New Lender”) in connection with the Commitment Increase Notice. Any Proposed New Lender shall be subject to the consent of Agent (which consent
shall not be unreasonably withheld). Agent shall notify Borrower and Lenders on or before the Business Day immediately prior to the proposed effective date of the amount of each Lender’s and Proposed New Lender’s Revolving Loan Commitment
(the “Effective Commitment Amount”) and the amount of the aggregate Revolving Loan Commitments, which amount shall be effective on the following Business Day. 
 (iii) Any increase in the aggregate Revolving Loan Commitments shall be subject to the following conditions: (a) as of the date of
the Commitment Increase Notice and as of the proposed effective date of the increase in the aggregate Revolving Loan Commitments, all representations and warranties set forth in Section 7 hereof shall be true and correct as though made on such
date (unless any such representation and warranty is made as of a specific date, in which case, such representation and warranty shall be true and correct as of such date) and no Default or Event of Default shall have occurred and then be
continuing, (b) Borrower, Agent and each Proposed New Lender or Lender that shall have agreed to provide a “Revolving Loan Commitment” in support of such increase in the aggregate Revolving Loan Commitments shall have executed and
delivered a Commitment Agreement and Acceptance in a form reasonably acceptable to Agent and (c) Borrower and any Proposed New Lender shall otherwise have executed 

  

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and delivered such other instruments, documents and agreements as Agent shall have reasonably requested in connection with such increase. Upon satisfaction
of the conditions precedent to any increase in the aggregate Revolving Loan Commitments, Agent shall promptly advise Borrower and each Lender of the effective date of such increase. Upon the effective date of any increase in the aggregate Revolving
Loan Commitments that is provided by a Proposed New Lender, such Proposed New Lender shall be a party to this Agreement as a Lender and shall have the rights and obligations of a Lender hereunder. Nothing contained herein shall constitute, or
otherwise be deemed to be, a commitment on the part of any Lender to increase its Revolving Loan Commitment hereunder at any time. 
 (iv) Upon the execution and delivery of such Commitment Agreement and Acceptance, Agent shall reallocate any outstanding Loans and LC Amounts ratably among Lenders after giving effect to each such increase in the aggregate Revolving Loan
Commitments; provided that Co-Borrowers hereby agree to compensate each Lender for all losses, expenses and liabilities incurred by such Lender in connection with the sale and assignment of any LIBOR Portions on the terms and in the manner
set forth in subsection 3.2.5. 
 SECTION 3. LOAN ADMINISTRATION 
 3.1 Manner of Borrowing Revolving Credit Loans/LIBOR Option. Borrowings under the credit facility established pursuant to Section 1 hereof
shall be as follows: 
 3.1.1 Loan Requests; Revolving Credit Loans. A request for a Revolving Credit Loan shall be
made, or shall be deemed to be made, in the following manner: (a) Borrower, on its own behalf and on behalf of each other Co-Borrower, may give Agent notice of its intention to borrow, in which notice Borrower shall specify the amount of the
proposed borrowing of a Revolving Credit Loan and the proposed borrowing date, which shall be a Business Day, no later than 11:00 a.m. (Chicago, Illinois time) on the proposed borrowing date (or in accordance with subsection 3.1.7, 3.1.8
or 3.1.9, as applicable, in the case of a request for a LIBOR Revolving Portion), provided, however, that no such request may be made at a time when there exists a Default or an Event of Default; and (b) the becoming due of any
amount required to be paid under this Agreement, or the Notes, whether as interest or for any other Obligation, shall be deemed irrevocably to be a request for a Revolving Credit Loan on the due date in the amount required to pay such interest or
other Obligation. 
 3.1.2 Disbursement. Co-Borrowers hereby irrevocably authorize Agent to disburse the proceeds of
each Loan requested, or deemed to be requested, pursuant to subsection 3.1.1(a) as follows: (i) the proceeds of each Revolving Credit Loan requested under subsection 3.1.1(a) shall be disbursed by Agent in lawful money of the United
States of America in immediately available funds, in the case of the initial borrowing, in accordance with the terms of the written disbursement letter from Borrower, and in the case of each subsequent borrowing, by wire transfer to such bank
account as may be agreed upon by Borrower and Agent from time to time or elsewhere if pursuant to a written direction from Borrower; and (ii) the proceeds of each Revolving Credit Loan deemed requested under subsection 3.1.1(b) shall be
disbursed by Agent by way of direct payment of the relevant interest or other Obligation. If at any time any 

  

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Loan is funded by Agent or Lenders in excess of the amount requested or deemed requested by Borrower, Co-Borrowers agree to repay the excess to Agent
immediately upon the earlier to occur of (a) a Co-Borrower’s discovery of the error and (b) notice thereof to Co-Borrowers from Agent or any Lender. 
 3.1.3 Payment by Lenders. Agent shall give to each Lender prompt written notice by facsimile of the receipt by Agent from Borrower
of any request for a Revolving Credit Loan. Each such notice shall specify the requested date and amount of such Revolving Credit Loan, whether such Revolving Credit Loan shall be subject to the LIBOR Option, and the amount of each Lender’s
advance thereunder (in accordance with its applicable Revolving Loan Percentage). Each Lender shall, not later than 12:00 p.m. (Chicago time) on such requested date, wire to a bank designated by Agent the amount of that Lender’s Revolving
Loan Percentage of the requested Revolving Credit Loan. The failure of any Lender to make the Revolving Credit Loans to be made by it shall not release any other Lender of its obligations hereunder to make its Revolving Credit Loan. Neither Agent
nor any other Lender shall be responsible for the failure of any other Lender to make the Revolving Credit Loan to be made by such other Lender. The foregoing notwithstanding, Agent, in its sole discretion, may from its own funds make a Revolving
Credit Loan on behalf of any Lender; provided that Agent shall not make any Revolving Loan on behalf of a Lender if Agent has received prior written notice from such Lender that such Lender will not make such Revolving Loan. In such event,
the Lender on behalf of whom Agent made the Revolving Credit Loan shall reimburse Agent for the amount of such Revolving Credit Loan made on its behalf, on a weekly (or more frequent, as determined by Agent in its sole discretion) basis. On each
such settlement date, Agent will pay to each Lender the net amount owing to such Lender in connection with such settlement, including without limitation amounts relating to Loans, fees, interest and other amounts payable hereunder. The entire amount
of interest attributable to such Revolving Credit Loan for the period from the date on which such Revolving Credit Loan was made by Agent on such Lender’s behalf until Agent is reimbursed by such Lender, shall be paid to Agent for its own
account. 
 3.1.4 Authorization. Co-Borrowers hereby irrevocably authorize Agent, in Agent’s sole discretion, to
advance to Co-Borrowers, and to charge to Co-Borrowers’ Loan Account hereunder as a Revolving Credit Loan (which shall be a Base Rate Revolving Portion), a sum sufficient to pay all interest accrued on the Obligations during the immediately
preceding month and to pay all fees, costs and expenses and other Obligations at any time owed by Co-Borrowers to Agent or any Lender hereunder on the due date therefore. 
 3.1.5 Letter of Credit and LC Guaranty Requests. A request for a Letter of Credit or LC Guaranty shall be made in the following
manner: Borrower, on its own behalf and on behalf of each other Co-Borrower, may give Agent and Bank a written notice of its request for the issuance of a Letter of Credit or LC Guaranty, not later than 11:00 a.m. (Chicago, Illinois time), one
Business Day before the proposed issuance date thereof, in which notice Borrower shall specify the proposed issuance date and format and wording for the Letter of Credit being requested (which shall be satisfactory to Agent and the Person being
asked to issue such Letter of Credit); provided, that no such request may be made at a time when there exists a Default or Event of Default. Such request shall be accompanied by an executed application and reimbursement agreement in form and
substance satisfactory to Agent and the Person being asked to issue the Letter of Credit or LC Guaranty, as well as any required resolutions. 
  

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 3.1.6 Method of Making Requests. As an accommodation to Co-Borrowers, unless a
Default or an Event of Default is then in existence, (i) Agent shall permit telephonic or electronic requests for Revolving Credit Loans to Agent, (ii) Agent and Bank may, in their discretion, permit electronic transmittal of requests for
Letters of Credit or LC Guaranties to them, and (iii) Agent may, in Agent’s discretion, permit electronic transmittal of instructions, authorizations, agreements or reports to Agent. Unless Borrower specifically directs Agent or Bank in
writing not to accept or act upon telephonic or electronic communications from any Co-Borrower, neither Agent nor Bank shall have any liability to Co-Borrowers for any loss or damage suffered by Co-Borrowers as a result of Agent’s or
Bank’s honoring of any requests, execution of any instructions, authorizations or agreements or reliance on any reports communicated to it telephonically or electronically and purporting to have been sent to Agent or Bank by a Co-Borrower, and
neither Agent nor Bank shall have any duty to verify the origin of any such communication or the authority of the Person sending it. Each telephonic request for a Revolving Credit Loan, Letter of Credit or LC Guaranty accepted by Agent and Bank, if
applicable, hereunder shall be promptly followed by a written confirmation of such request from Borrower to Agent and Bank, if applicable. 
 3.1.7 LIBOR Portions. Provided that as of both the date of the LIBOR Request and the first day of the Interest Period, no Default or Event of Default exists, in the event Borrower desires to obtain a LIBOR
Portion, Borrower on its own behalf and on behalf of each other Co-Borrower, shall give Agent a LIBOR Request no later than 11:00 a.m. (Chicago, Illinois time) on the third Business Day prior to the requested borrowing date. Each LIBOR Request
shall be irrevocable and binding on Co-Borrowers. In no event shall Co-Borrowers be permitted to have outstanding at any one time LIBOR Portions with more than four (4) different Interest Periods. 
 3.1.8 Conversion of Base Rate Portions. Provided that as of both the date of the LIBOR Request and the first day of the Interest
Period, no Default or Event of Default exists, Borrower, on its own behalf and on behalf of each other Co-Borrower, may, on any Business Day, convert any Base Rate Portion into a LIBOR Portion. If Borrower desires to convert a Base Rate Portion,
Borrower shall give Agent a LIBOR Request no later then 11:00 a.m. (Chicago, Illinois time) on the third Business Day prior to the requested conversion date. After giving effect to any conversion of Base Rate Portions to LIBOR Portions,
Co-Borrowers shall not be permitted to have outstanding at any one time LIBOR Portions with more than four (4) different Interest Periods. 
 3.1.9 Continuation of LIBOR Portions. Provided that as of both the date of the LIBOR Request and the first day of the Interest Period, no Default or Event of Default exists, Borrower, on its own behalf and on
behalf of each other Co-Borrower, may, on any Business Day, continue any LIBOR Portions into a subsequent Interest Period of the same or a different permitted duration. If Borrower desires to continue a LIBOR Portion, Borrower shall give Agent a
LIBOR Request no later than 11:00 a.m. (Chicago, Illinois time) on the third Business Day prior to the requested continuation date. After giving effect to any continuation of LIBOR Portions, Co-Borrowers shall not be permitted to have
outstanding at any one time LIBOR Portions with more than four (4) different Interest Periods. If Borrower shall fail to give timely notice of its election to continue any LIBOR Portion or portion thereof as provided above, or if such
continuation shall not be permitted, such LIBOR Portion or portion thereof, unless such 

  

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LIBOR Portion shall be repaid, shall automatically be converted into a Base Rate Portion at the end of the Interest Period then in effect with respect to
such LIBOR Portion. 
 3.1.10 Inability to Make LIBOR Portions. Notwithstanding any other provision hereof, if any
applicable law, treaty, regulation or directive, or any change therein or in the interpretation or application thereof, shall make it unlawful for any Lender (for purposes of this subsection 3.1.10, the term “Lender” shall include the
office or branch where such Lender or any corporation or bank then controlling such Lender makes or maintains any LIBOR Portions) to make or maintain its LIBOR Portions, or if with respect to any Interest Period, Agent is unable to determine the
LIBOR relating thereto, or adverse or unusual conditions in, or changes in applicable law relating to, the London interbank market make it, in the reasonable judgment of Agent or any Lender, impracticable to fund therein any of the LIBOR Portions,
or make the projected LIBOR unreflective of the actual costs of funds therefor to any Lender, the obligation of Agent and Lenders to make or continue LIBOR Portions or convert Base Rate Portions to LIBOR Portions hereunder shall forthwith be
suspended during the pendency of such circumstances and Borrower shall, if any affected LIBOR Portions are then outstanding, promptly upon request from Agent, convert such affected LIBOR Portions into Base Rate Portions. 
 3.2 Payments. The Obligations shall be payable as follows: 
 3.2.1 Principal. Principal on account of Revolving Credit Loans shall be payable by Co-Borrowers to Agent for the ratable benefit
of Lenders immediately upon the earliest of (i) the receipt by Agent or any Co-Borrower of any proceeds of any of the Collateral (except as otherwise provided herein), including without limitation pursuant to subsections 3.3.1 and 6.2.4,
to the extent of said proceeds, subject to Co-Borrowers’ rights to reborrow such amounts in compliance with subsection 1.1.1 hereof; (ii) the occurrence of an Event of Default in consequence of which Agent or Majority Lenders
elect to accelerate the maturity and payment of the Obligations, or (iii) termination of this Agreement pursuant to Section 4 hereof; provided, however, that, if an Overadvance shall exist at any time, Co-Borrowers shall, on
demand, repay the Overadvance. Each payment (including principal prepayment) by Co-Borrowers on account of principal of the Revolving Credit Loans shall be applied first to Base Rate Revolving Portions and then to LIBOR Revolving Portions.

 3.2.2 Interest. 
 (i) Base Rate Portion. Interest accrued on the Base Rate Portion shall be due and payable on each of the following dates (1) the first calendar day of each month (for the immediately preceding month),
computed through the last calendar day of the preceding month, (2) the occurrence of an Event of Default in consequence of which Agent or Majority Lenders elect to accelerate the maturity and payment of the Obligations or (3) termination
of this Agreement pursuant to Section 4 hereof. 
 (ii) LIBOR Portion. Interest accrued on each LIBOR Portion
shall be due and payable on each LIBOR Interest Payment Date and on each of the following dates (1) the occurrence of an Event of Default in consequence of which Agent or 

  

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Majority Lenders elect to accelerate the maturity and payment of the Obligations or (2) termination of this Agreement pursuant to Section 4 hereof.

 3.2.3 Costs, Fees and Charges. Costs, fees and charges payable pursuant to this Agreement shall be payable by
Co-Borrowers, as and when provided in Section 2 or Section 3 hereof, as applicable to Agent or a Lender, as applicable, or to any other Person designated by Agent or such Lender in writing. 
 3.2.4 Other Obligations. The balance of the Obligations requiring the payment of money, if any, shall be payable by Co-Borrowers to
Agent for distribution to Lenders, as appropriate, as and when provided in this Agreement, the Other Agreements or the Security Documents, or on demand, whichever is later. 
 3.2.5 Prepayment of/Failure to Borrow LIBOR Portions. Co-Borrowers may prepay a LIBOR Portion only upon three (3) Business
Days’ prior written notice to Agent (which notice shall be irrevocable). In the event of (i) the payment of any principal of any LIBOR Portion other than on the last day of the Interest Period applicable thereto (including as a result of
an Event of Default), (ii) the conversion of any LIBOR Portion other than on the last day of the Interest Period applicable thereto, or (iii) the failure to borrow, convert, continue or prepay any LIBOR Portion on the date specified in any
notice delivered pursuant hereto, then, in any such event, Co-Borrowers shall compensate Lenders ratably for the loss, cost and expense attributable to such event, as determined by Agent in a manner consistent with its customs and practices.

 3.3 Mandatory and Optional Prepayments. 
 3.3.1 Proceeds of Sale, Loss, Destruction or Condemnation of Collateral. Except as provided in subsections 6.4.2 and 8.2.9, if
Borrower or any of its Subsidiaries sells any of the Collateral or if any of the Collateral is lost, damaged or destroyed or taken by condemnation, Co-Borrowers shall, unless otherwise agreed by Majority Lenders, pay to Agent for the ratable benefit
of Lenders as and when received by Borrower or such Subsidiary and as a mandatory prepayment of the Loans, as herein provided, a sum equal to the cash proceeds (including insurance payments but net of costs and taxes incurred in connection with such
sale or event) received by Borrower or such Subsidiary from such sale, damage, loss, destruction or condemnation. The applicable prepayment shall be applied to reduce the outstanding principal balance of the Revolving Credit Loans. Subject to the
provisions of the following sentence, the Fixed Asset Maximum Amount shall be reduced by the Net Appraised Orderly Liquidation Value of the particular item of Co-Borrowers’ Equipment or the Net Appraised Fair Market Value of the particular
piece of Co-Borrowers’ real Property so sold, lost, destroyed or condemned, whether any such sale is permitted by the provisions of this subsection 3.3.1, subsection 6.4.2 or subsection 8.2.9. Notwithstanding the foregoing, if
the proceeds of insurance (net of costs and taxes incurred) with respect to any loss, damage or destruction of Equipment or real Property (i) are less than $750,000, unless an Event of Default is then in existence, Agent shall remit such
proceeds to Co-Borrowers for use in replacing or repairing the damaged Collateral or (ii) are equal to or greater than $750,000 and Borrower, on its own behalf and on behalf of each other Co-Borrower, has requested that Agent agree to permit
Borrower or the applicable Subsidiary to repair or replace the damaged Collateral, then such amounts shall be 

  

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provisionally applied to reduce the outstanding principal balance of the Revolving Credit Loans (and the Fixed Asset Maximum Amount shall not be so reduced)
and, unless an Event of Default has occurred and is continuing, thereafter remitted to Co-Borrowers for use in replacing or repairing the damaged Collateral. If, however, Borrower or the applicable Subsidiary does not effect such repair or
replacement within 180 days from the date of such request, the Fixed Asset Maximum Amount shall be reduced as provided above. 
 3.3.2 Proceeds from Issuance of Additional Indebtedness or Equity. If, at any time when an Event of Default has occurred and is continuing, any Co-Borrower issues any additional Indebtedness (other than Indebtedness permitted by
Section 8.2.3) or issues any additional equity in a manner permitted under this Agreement, Co-Borrowers shall pay to Agent for the ratable benefit of Lenders, when and as received by Borrower and as a mandatory prepayment of the Obligations, a
sum equal to one hundred percent (100%) of the net cash proceeds to Borrower of the issuance of such Indebtedness or equity, which payment shall be due on receipt of such proceeds. Any such prepayment shall be applied to the Loans in the manner
specified in the last sentence of subsection 3.2.1 until payment thereof in full. 
 3.3.3 LIBOR Portions. If the
application of any payment made in accordance with the provisions of this Section 3.3 at a time when no Event of Default has occurred and is continuing would result in termination of a LIBOR Portion prior to the last day of the Interest Period
for such LIBOR Portion, the amount of such prepayment shall not be applied to such LIBOR Portion, but will, at Borrower’s option, be held by Agent in a non-interest bearing account at a Lender or another bank satisfactory to Agent in its
discretion, which account is in the name of Agent and from which account only Agent can make any withdrawal, in each case to be applied as such amount would otherwise have been applied under this Section 3.3 at the earlier to occur of
(i) the last day of the relevant Interest Period or (ii) the occurrence of a Default or an Event of Default. 
 3.4 Application
of Payments and Collections. 
 3.4.1 Collections. All items of payment received by Agent by 12:00 noon, Chicago,
Illinois, time, on any Business Day shall be deemed received on that Business Day. All items of payment received after 12:00 noon, Chicago, Illinois, time, on any Business Day shall be deemed received on the following Business Day. If as the result
of collections of Accounts as authorized by subsection 6.2.4 hereof or otherwise, a credit balance exists in the Loan Account, such credit balance shall not accrue interest in favor of Co-Borrower, but shall be disbursed to Co-Borrowers or
otherwise at Borrower’s direction in the manner set forth in subsection 3.1.2, upon Borrower’s request at any time, so long as no Default or Event of Default then exists. Agent may at its option, offset such credit balance against any
of the Obligations upon and during the continuance of an Event of Default. 
 3.4.2 Apportionment, Application and Reversal
of Payments. Principal and interest payments shall be apportioned and distributed by Agent ratably among Lenders (according to their respective Revolving Loan Percentages). All payments shall be remitted to Agent and all such payments not
relating to principal or interest of specific Loans, or not constituting payment of specific fees, and all proceeds of Accounts, or, except as provided in subsection 3.3.1, other Collateral received by Agent after the occurrence and during the

  

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continuation of an Event of Default, shall be applied, ratably, subject to the provisions of this Agreement, first, to pay any fees, indemnities, or
expense reimbursements (other than amounts related to Product Obligations) then due to Agent or Lenders from Borrower; second, to pay interest due from Borrower in respect of all Loans, including Swingline Loans and Agent Loans; third,
to pay or prepay principal of Swingline Loans and Agent Loans; fourth, to pay or prepay principal of the Revolving Credit Loans (other than Swingline Loans and Agent Loans) and unpaid reimbursement obligations in respect of Letters of Credit;
fifth, to pay an amount to Agent equal to all outstanding Letter of Credit Obligations to be held as cash Collateral for such Obligations; sixth, to the payment of any other Obligation (other than amounts related to Product
Obligations) due to Agent or any Lender by Co-Borrowers; and seventh, to pay any fees, indemnities or expense reimbursements related to Product Obligations. 
 3.5 All Loans to Constitute One Obligation. The Loans and LC Guarantees shall constitute one general Obligation of Co-Borrowers, and shall be secured by Agent’s Lien upon all of the Collateral. 

3.6 Loan Account. Agent shall enter all Loans as debits to a loan account (the “Loan Account”) and shall also record in the Loan
Account all payments made by Co-Borrowers on any Obligations and all proceeds of Collateral which are finally paid to Agent, and may record therein, in accordance with customary accounting practice, other debits and credits, including interest and
all charges and expenses properly chargeable to Co-Borrowers. 
 3.7 Statements of Account. Agent will account to Co-Borrowers monthly
with a statement of Loans, charges and payments made pursuant to this Agreement during the immediately preceding month, and such account rendered by Agent shall be deemed final, binding and conclusive upon Co-Borrowers absent demonstrable error
unless Agent is notified by Borrower in writing to the contrary within 30 days of the date each accounting is received by Co-Borrowers. Such notice shall only be deemed an objection to those items specifically objected to therein. 
 3.8 Increased Costs. If any law or any governmental or quasi-governmental rule, regulation, policy, guideline or directive (whether or not having
the force of law) adopted or implemented after the date of this Agreement and having general applicability to all banks or finance companies within the jurisdiction in which any Lender operates (excluding, for the avoidance of doubt, the effect of
and phasing in of capital requirements or other regulations or guidelines passed prior to the date of this Agreement), or any interpretation or application thereof by any governmental authority charged with the interpretation or application thereof,
or the compliance of such Lender therewith, shall: 
 (i) (1) subject such Lender to any tax with respect to this Agreement
(other than (a) any tax based on or measured by net income or otherwise in the nature of a net income tax, including, without limitation, any franchise tax or any similar tax based on capital, net worth or comparable basis for measurement and
(b) any tax collected by a withholding on payments and which neither is computed by reference to the net income of the payee nor is in the nature of an advance collection of a tax based on or measured by the net income of the payee) or
(2) change the basis of taxation of payments to such Lender of principal, fees, interest or any other amount payable 

  

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hereunder or under any Loan Documents (other than in respect of (a) any tax based on or measured by net income or otherwise in the nature of a net
income tax, including, without limitation, any franchise tax or any similar tax based on capital, net worth or comparable basis for measurement and (b) any tax collected by a withholding on payments and which neither is computed by reference to
the net income of the payee nor is in the nature of an advance collection of a tax based on or measured by the net income of the payee); 
 (ii) impose, modify or hold applicable any reserve (except any reserve taken into account in the determination of the applicable LIBOR), special deposit, assessment or similar requirement against assets held by, or
deposits in or for the account of, advances or loans by, or other credit extended by, any office of such Lender, including (without limitation) pursuant to Regulation D of the Board of Governors of the Federal Reserve System; or 
 (iii) impose on such Lender or the London interbank market any other condition with respect to any Loan Document; 
 and the result of any of the foregoing is to increase the cost to such Lender of making, renewing or maintaining Loans hereunder or the result of any of the foregoing is
to reduce the rate of return on such Lender’s capital as a consequence of its obligations hereunder, or the result of any of the foregoing is to reduce the amount of any payment (whether of principal, interest or otherwise) in respect of any of
the Loans, then, in any such case, Co-Borrowers shall pay such Lender, upon demand and certification not later than sixty (60) days following its receipt of notice of the imposition of such increased costs, such additional amount as will
compensate such Lender for such additional cost or such reduction, as the case may be, to the extent such Lender has not otherwise been compensated, with respect to a particular Loan, for such increased cost as a result of an increase in the Base
Rate or the LIBOR. An officer of the applicable Lender shall determine the amount of such additional cost or reduced amount using reasonable averaging and attribution methods and shall certify the amount of such additional cost or reduced amount to
Co-Borrowers, which certification shall include a written explanation of such additional cost or reduction to Co-Borrowers. Such certification shall be conclusive absent demonstrable error. If a Lender claims any additional cost or reduced amount
pursuant to this Section 3.8, then such Lender shall use reasonable efforts (consistent with legal and regulatory restrictions) to designate a different lending office or to file any certificate or document reasonably requested by Borrower if
the making of such designation or filing would avoid the need for, or reduce the amount of, any such additional cost or reduced amount and would not, in the sole discretion of such Lender, be otherwise disadvantageous to such Lender. 
 3.9 Basis for Determining Interest Rate Inadequate. In the event that Agent or any Lender shall have determined that: 
 (i) reasonable means do not exist for ascertaining the LIBOR for any Interest Period; or 
 (ii) Dollar deposits in the relevant amount and for the relevant maturity are not available in the London interbank market with respect to
a proposed 

  

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LIBOR Portion, or a proposed conversion of a Base Rate Portion into a LIBOR Portion; then 
 Agent or such Lender shall give Borrower prompt written, telephonic or electronic notice of the determination of such effect. If such notice is given, (i) any such requested LIBOR Portion shall be made as a Base
Rate Portion, unless Borrower shall notify Agent no later than 10:00 a.m. (Chicago, Illinois time) three (3) Business Days prior to the date of such proposed borrowing that the request for such borrowing shall be canceled or made as an
unaffected type of LIBOR Portion, and (ii) any Base Rate Portion which was to have been converted to an affected type of LIBOR Portion shall be continued as or converted into a Base Rate Portion, or, if Borrower shall notify Agent, no later
than 10:00 a.m. (Chicago, Illinois time) three (3) Business Days prior to the proposed conversion, shall be maintained as an unaffected type of LIBOR Portion. 
 3.10 Sharing of Payments, Etc. If any Lender shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of any Loan made by it in excess of
its ratable share of payments on account of Loans made by all Lenders, such Lender shall forthwith purchase from each other Lender such participation in such Loan as shall be necessary to cause such purchasing Lender to share the excess payment
ratably with each other Lender; provided, that if all or any portion of such excess payment is thereafter recovered from such purchasing Lender, such purchase from each Lender shall be rescinded and such Lender shall repay to the purchasing
Lenders the purchase price to the extent of such recovery, together with an amount equal to such Lender’s ratable share (according to the proportion of (i) the amount of such Lender’s required repayment to (ii) the total amount
so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered. Co-Borrowers agree that any Lender so purchasing a participation from another Lender
pursuant to this Section 3.10 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such participation as fully as if such Lender were the direct creditor of
Co-Borrowers in the amount of such participation. Notwithstanding anything to the contrary contained herein, all purchases and repayments to be made under this Section 3.10 shall be made through Agent. 
 SECTION 4. TERM AND TERMINATION 
 4.1
Term of Agreement. Subject to the right of Lenders to cease making Loans to Co-Borrowers during the continuance of any Default or Event of Default, this Agreement shall be in effect for a period through and including April 26, 2011 (the
“Term”), unless terminated as provided in Section 4.2 hereof. 
 4.2 Termination. 
 4.2.1 Termination by Lenders. Agent may, and at the direction of Majority Lenders shall, terminate this Agreement without notice
upon or after the occurrence and during the continuance of an Event of Default. 
 4.2.2 Termination by Borrower. Upon
at least 90 days prior written notice to Agent and Lenders, Borrower may, at its option, on its own behalf and on behalf of each other 

  

 18 

 
Co-Borrower, terminate this Agreement; provided, however, no such termination shall be effective until Co-Borrowers have paid or collateralized
to Agent’s satisfaction all of the Obligations in immediately available funds, all Letters of Credit and LC Guaranties have expired, terminated or have been cash collateralized to Agent’s satisfaction and Co-Borrowers have complied with
Section 2.6 and subsection 3.2.5. Any notice of termination given by Borrower shall be irrevocable unless all Lenders otherwise agree in writing and no Lender shall have any obligation to make any Loans or issue or procure any Letters of
Credit or LC Guaranties on or after the termination date stated in such notice. Borrower may elect to terminate this Agreement in its entirety only. No section of this Agreement or type of Loan available hereunder may be terminated singly.

 4.2.3 Effect of Termination. All of the Obligations shall be immediately due and payable upon the termination date
stated in any notice of termination of this Agreement. All Obligations, undertakings, agreements, covenants, warranties and representations of Co-Borrowers contained in the Loan Documents shall survive any such termination and Agent shall retain its
Liens in the Collateral and Agent and each Lender shall retain all of its rights and remedies under the Loan Documents notwithstanding such termination until all Obligations have been discharged or paid, in full, in immediately available funds,
including, without limitation, all Obligations under Section 2.6 and subsection 3.2.5 resulting from such termination. Notwithstanding the foregoing or the payment in full of the Obligations, Agent shall not be required to terminate its
Liens in the Collateral unless, with respect to any loss or damage Agent may incur as a result of dishonored checks or other items of payment received by Agent from any Co-Borrower or any Account Debtor and applied to the Obligations, Agent shall,
at its option, (i) have received a written agreement satisfactory to Agent, executed by Co-Borrowers and by any Person whose loans or other advances to Co-Borrowers are used in whole or in part to satisfy the Obligations, indemnifying Agent and
each Lender from any such loss or damage or (ii) have retained cash Collateral or other Collateral for such period of time as Agent, in its discretion, may deem necessary to protect Agent and each Lender from any such loss or damage.

 SECTION 5. SECURITY INTERESTS 
 5.1 Security Interest in Collateral. To secure the prompt payment and performance to Agent and each Lender of the Obligations, each Co-Borrower hereby grants to Agent for the benefit of itself and each Lender a continuing Lien upon
all of such Co-Borrower’s assets, including all of the following Property and interests in Property of such Co-Borrower, whether now owned or existing or hereafter created, acquired or arising and wheresoever located: 
 (i) Accounts; 
 (ii) Certificated Securities; 
 (iii) Chattel Paper; 
 (iv) Computer Hardware and Software and all rights with respect thereto, including, any and all licenses, options, warranties, service
contracts, program services, test rights, maintenance rights, support rights, improvement rights, renewal 

  

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rights and indemnifications, and any substitutions, replacements, additions or model conversions of any of the foregoing; 
 (v) Contract Rights; 
 (vi) Deposit Accounts; 
 (vii) Documents; 
 (viii) Equipment; 
 (ix) Financial Assets; 
 (x) Fixtures; 
 (xi) General Intangibles, including Payment Intangibles and Software; 
 (xii) Goods (including all of its Equipment, Fixtures and Inventory), and all accessions, additions, attachments, improvements,
substitutions and replacements thereto and therefor; 
 (xiii) Instruments; 
 (xiv) Intellectual Property; 
 (xv) Inventory; 
 (xvi) Investment Property; 
 (xvii) money (of every jurisdiction whatsoever); 
 (xviii) Letter-of-Credit Rights; 
 (xix) Payment Intangibles; 
 (xx) Security Entitlements; 
 (xxi) Software; 
 (xxii) Supporting Obligations; 
 (xxiii) Uncertificated Securities; and 
 (xxiv) to the extent not included in the foregoing, all other personal property of any kind or description; 
 together with all books, records, writings, data bases, information and other property relating to, used or useful in connection with, or evidencing, embodying,
incorporating or referring to any of 

  

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the foregoing, and all Proceeds, products, offspring, rents, issues, profits and returns of and from any of the foregoing. 
 5.2 Other Collateral. 
 5.2.1 Commercial Tort Claims. Co-Borrowers shall promptly notify Agent in writing upon incurring or otherwise obtaining a Commercial Tort Claim after the Closing Date against any third party and, upon request of Agent, promptly enter
into an amendment to this Agreement and do such other acts or things deemed appropriate by Agent to give Agent a security interest in any such Commercial Tort Claim. Borrower represents and warrants that as of the date of this Agreement, to its
knowledge, neither it nor any of its Subsidiaries possess any Commercial Tort Claims. 
 5.2.2 Other Collateral.
Co-Borrowers shall promptly notify Agent in writing upon acquiring or otherwise obtaining any Collateral after the date hereof consisting of Deposit Accounts, Investment Property, Letter-of-Credit Rights or Electronic Chattel Paper and, upon the
request of Agent, promptly execute such other documents, and do such other acts or things deemed appropriate by Agent to deliver to Agent control with respect to such Collateral; promptly notify Agent in writing upon acquiring or otherwise obtaining
any Collateral after the date hereof consisting of Documents or Instruments and, upon the request of Agent, will promptly execute such other documents, and do such other acts or things deemed appropriate by Agent to deliver to Agent possession of
such Documents which are negotiable and Instruments, and, with respect to nonnegotiable Documents, to have such nonnegotiable Documents issued in the name of Agent; and with respect to Collateral in the possession of a third party, other than
Certificated Securities and Goods covered by a Document, obtain an acknowledgement from the third party that it is holding the Collateral for the benefit of Agent. 
 5.3 Lien Perfection; Further Assurances. Co-Borrowers shall execute such UCC-1 financing statements as are required by the UCC and such other instruments, assignments or documents as are necessary to perfect
Agent’s Lien upon any of the Collateral and shall take such other action as may be required to perfect or to continue the perfection of Agent’s Lien upon the Collateral. Unless prohibited by applicable law, each Co-Borrower hereby
authorizes Agent to execute and file any such financing statement, including, without limitation, financing statements that indicate the Collateral (i) as all assets of such Co-Borrower or words of similar effect, or (ii) as being of an
equal or lesser scope, or with greater or lesser detail, than as set forth in Section 5.1, on such Co-Borrower’s behalf. Each Co-Borrower also hereby ratifies its authorization for Agent to have filed in any jurisdiction any like financing
statements or amendments thereto if filed prior to the date hereof. The parties agree that a carbon, photographic or other reproduction of this Agreement shall be sufficient as a financing statement and may be filed in any appropriate office in lieu
thereof. At Agent’s request, each Co-Borrower shall also promptly execute or cause to be executed and shall deliver to Agent any and all documents, instruments and agreements deemed necessary by Agent, to give effect to or carry out the terms
or intent of the Loan Documents. 
 5.4 Lien on Realty. The due and punctual payment and performance of the Obligations shall also be
secured by the Lien created by the Mortgages upon all real Property of each Co-Borrower described therein. If any Co-Borrower shall acquire at any time or times 

  

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hereafter any fee simple interest in other real Property (other than leasehold interests in sales offices or warehouses), such Co-Borrower agrees promptly to
execute and deliver to Agent, for its benefit and the ratable benefit of Lenders, as additional security and Collateral for the Obligations, deeds of trust, security deeds, mortgages or other collateral assignments reasonably satisfactory in form
and substance to Agent and its counsel (herein collectively referred to as “New Mortgages”) covering such real Property. The Mortgages and each New Mortgage shall be duly recorded (at Co-Borrowers’ expense) in each office where such
recording is required to constitute a valid Lien on the real Property covered thereby. In respect to any Mortgage or any New Mortgage, Co-Borrowers shall deliver to Agent, at Co-Borrowers’ expense, mortgagee title insurance policies issued by a
title insurance company reasonably satisfactory to Agent, which policies shall be in form and substance reasonably satisfactory to Agent and shall insure a valid Lien in favor of Agent for the benefit of itself and each Lender on the Property
covered thereby, subject only to Permitted Liens and those other exceptions reasonably acceptable to Agent and its counsel. Co-Borrowers shall also deliver to Agent such other usual and customary documents, including, without limitation, ALTA
Surveys of the real Property, environmental surveys and, if requested by Agent, local counsel opinions described in the Mortgages or any New Mortgage, as Agent and its counsel may reasonably request relating to the real Property subject to the
Mortgages or the New Mortgages. The foregoing notwithstanding, Agent and Lenders acknowledge and agree that USPoly shall not be required to grant Agent a Mortgage on USPoly’s facility at Shawnee, Oklahoma unless requested to do so by Agent
after the occurrence and during the continuance of an Event of Default. 
 SECTION 6. COLLATERAL ADMINISTRATION 
 6.1 General. 
 6.1.1
Location of Collateral. All Collateral, other than Inventory in transit and motor vehicles, will at all times be kept by Borrower and its Subsidiaries at one or more of the business locations set forth in Exhibit 6.1.1 hereto, as
updated by Borrower providing prior written notice to Agent of any new location. 
 6.1.2 Insurance of Collateral.
Borrower shall maintain and pay for insurance upon all Collateral wherever located and with respect to the business of Borrower and each of its Subsidiaries, covering casualty, hazard, public liability, workers’ compensation and such other
risks in such amounts and with such insurance companies as are reasonably satisfactory to Agent. Borrower shall deliver certified copies of such policies to Agent as promptly as practicable, with satisfactory lender’s loss payable endorsements,
naming Agent as a loss payee, assignee or additional insured, as appropriate, as its interest may appear, and showing only such other loss payees, assignees and additional insureds as are satisfactory to Agent. Each policy of insurance or
endorsement shall contain a clause requiring the insurer to give not less than 10 days’ prior written notice to Agent in the event of cancellation of the policy for nonpayment of premium and not less than 30 days’ prior written notice to
Agent in the event of cancellation of the policy for any other reason whatsoever and a clause specifying that the interest of Agent shall not be impaired or invalidated by any act or neglect of Borrower, any of its Subsidiaries or the owner of the
Property or by the occupation of the premises for purposes more hazardous than are permitted by said policy. Borrower agrees to deliver to Agent, promptly as rendered, true copies of all reports made in any reporting forms to insurance companies.
All proceeds of business 

  

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interruption insurance (if any) of Borrower and its Subsidiaries shall be remitted to Agent for application to the outstanding balance of the Revolving
Credit Loans. 
 Unless Borrower provides Agent with evidence of the insurance coverage required by this Agreement, Agent may
purchase insurance at Co-Borrowers’ expense to protect Agent’s interests in the Properties of Borrower and its Subsidiaries. This insurance may, but need not, protect the interests of Borrower and its Subsidiaries. The coverage that Agent
purchases may not pay any claim that Borrower or any Subsidiary makes or any claim that is made against Borrower or any such Subsidiary in connection with said Property. Borrower may later cancel any insurance purchased by Agent, but only after
providing Agent with evidence that Borrower and its Subsidiaries have obtained insurance as required by this Agreement. If Agent purchases insurance, Co-Borrowers will be responsible for the costs of that insurance, including interest and any other
charges Agent may impose in connection with the placement of insurance, until the effective date of the cancellation or expiration of the insurance. The costs of the insurance shall be added to the Obligations. The costs of the insurance may be more
than the cost of insurance that Borrower and its Subsidiaries may be able to obtain on their own. 
 6.1.3 Protection of
Collateral. Neither Agent nor any Lender shall be liable or responsible in any way for the safekeeping of any of the Collateral or for any loss or damage thereto (except for reasonable care in the custody thereof while any Collateral is in
Agent’s or any Lender’s actual possession) or for any diminution in the value thereof, or for any act or default of any warehouseman, carrier, forwarding agency, or other person whomsoever, but the same in each case shall be at
Co-Borrowers’ sole risk. 
 6.2 Administration of Accounts. 
 6.2.1 Records, Schedules and Assignments of Accounts. Co-Borrowers shall keep accurate and complete records of its and their
Subsidiaries’ Accounts and all payments and collections thereon and shall submit to Agent on such periodic basis as Agent shall request a sales and collections report for the preceding period, in form acceptable to Agent. Within 15 days after
the end of each month, or more frequently as requested by Agent, from and after the date hereof, Borrower shall deliver to Agent a detailed aged trial balance of all of its and its Subsidiaries’ Accounts, specifying the names, addresses, face
values, dates of invoices and due dates for each Account Debtor obligated on an Account so listed (“Schedule of Accounts”), and upon Agent’s request therefor, copies of proof of delivery and the original copy of all documents,
including, without limitation, repayment histories and present status reports relating to the Accounts so scheduled and such other matters and information relating to the status of then existing Accounts as Agent shall request. If requested by
Agent, Borrower and each other Co-Borrower shall execute and deliver to Agent formal written assignments of all of its Accounts weekly or daily, which shall include all Accounts that have been created since the date of the last assignment, together
with copies of invoices or invoice registers related thereto. 
 6.2.2 Discounts, Allowances, Disputes. If any
Co-Borrower grants any discounts, allowances or credits that are not shown on the face of the invoice for the Account involved, Co-Borrowers shall report such discounts, allowances or credits, as the case may be, to Agent as part of the next
required Schedule of Accounts. 
  

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 6.2.3 Account Verification. Any of Agent’s officers, employees or agents
shall have the right, at any time or times hereafter, in the name of Agent, any designee of Agent or any Co-Borrower, to verify the validity, amount or any other matter relating to any Accounts by mail, telephone, electronic communication or
otherwise. Borrower and its Subsidiaries shall cooperate fully with Agent in an effort to facilitate and promptly conclude any such verification process. 
 6.2.4 Maintenance of Dominion Account. As of the Closing Date, with respect to Borrower and as of the date which is sixty (60) days after the Closing Date, with respect to USPoly, each Co-Borrower shall
maintain a Dominion Account or Accounts pursuant to lockbox and blocked account arrangements acceptable to Agent with banks as may be selected by Co-Borrowers and be acceptable to Agent. The applicable Co-Borrower shall issue to any such banks an
irrevocable letter of instruction directing such banks to deposit all payments or other remittances received in the lockbox and blocked accounts to the Dominion Account for application on account of the Obligations as provided in
subsection 3.2.1. All funds deposited in any Dominion Account shall immediately become the property of Agent, for the ratable benefit of Lenders, and Co-Borrowers shall obtain the agreement by such banks in favor of Agent to waive any
recoupment, setoff rights, and any security interest in, or against, the funds so deposited. Agent assumes no responsibility for such lockbox and blocked account arrangements, including, without limitation, any claim of accord and satisfaction or
release with respect to deposits accepted by any bank thereunder. 
 6.2.5 Collection of Accounts, Proceeds of
Collateral. Each Co-Borrower agrees that all invoices rendered and other requests made by Co-Borrowers for payment in respect of Accounts shall contain a written statement directing payment in respect of such Accounts to be paid to a lockbox
established pursuant to subsection 6.2.4. To expedite collection, Co-Borrowers shall endeavor in the first instance to make collection of its Accounts for Agent. All remittances received by Co-Borrowers on account of Accounts, together with the
proceeds of any other Collateral, shall be held as Agent’s property, for its benefit and the benefit of Lenders, by Co-Borrowers as trustee of an express trust for Agent’s benefit and Co-Borrowers shall immediately deposit same in kind in
the Dominion Account. Agent retains the right at all times after the occurrence and during the continuance of a Default or an Event of Default to notify Account Debtors that Co-Borrowers’ Accounts have been assigned to Agent and to collect
Co-Borrowers’ Accounts directly in its own name, or in the name of Agent’s agent, and to charge the collection costs and expenses, including attorneys’ fees, to Co-Borrowers. 
 6.2.6 Taxes. If an Account includes a charge for any tax payable to any governmental taxing authority, Agent is authorized, in its
sole discretion, to pay the amount thereof to the proper taxing authority for the account of a Co-Borrower and to charge Co-Borrowers therefor, except for taxes that (i) are being actively contested in good faith and by appropriate proceedings
and with respect to which Co-Borrowers maintain reasonable reserves on their books therefor and (ii) would not reasonably be expected to result in any Lien other than a Permitted Lien. In no event shall Agent or any Lender be liable for any
taxes to any governmental taxing authority that may be due by any Co-Borrower. 
 6.3 Administration of Inventory. Borrower shall keep
records of its and its Subsidiaries’ Inventory which records shall be complete and accurate and complete in all material respects. Borrower shall furnish to Agent Inventory reports concurrently with the 

  

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delivery of each Borrowing Base Certificate described in subsection 8.1.4 or more frequently as requested by Agent, which reports will be in such other
format and detail as Agent shall request and shall include a current list of all locations of Borrower’s Inventory. Borrower shall conduct a physical inventory no less frequently than annually and shall provide to Agent a report based on each
such physical inventory promptly thereafter, together with such supporting information as Agent shall reasonably request. 
 6.4
Administration of Equipment. 
 6.4.1 Records and Schedules of Equipment. Borrower shall keep records of its and
its Subsidiaries’ Equipment which shall be complete and accurate in all material respects itemizing and describing the kind, type, quality, quantity and book value of its and its Subsidiaries’ Equipment and all dispositions made in
accordance with subsection 6.4.2 hereof, and Borrower shall, and shall cause each of its Subsidiaries to, furnish Agent with a current schedule containing the foregoing information on at least an annual basis and more often if requested by
Agent. Promptly after the request therefor by Agent, Co-Borrowers shall deliver to Agent any and all evidence of ownership, if any, of any of its and its Subsidiaries’ Equipment. 
 6.4.2 Dispositions of Equipment. Borrower shall not, and shall not permit any of its Subsidiaries to, sell, lease or otherwise
dispose of or transfer any of its respective Equipment or other fixed assets or any part thereof without the prior written consent of Agent; provided, however, that the foregoing restriction shall not apply, for so long as no Default
or Event of Default exists and is continuing, to (i) dispositions of Equipment and other fixed assets which, in the aggregate during any consecutive twelve-month period, have a fair market value or a book value, whichever is less, of $750,000
or less, provided that all proceeds thereof are remitted to Agent for application to the Loans as provided in subsection 3.3.1, or (ii) replacements of Equipment or other fixed assets that are substantially worn, damaged or obsolete
with Equipment or other fixed assets of like kind, function and value, provided that the replacement Equipment or other fixed assets shall be acquired within 90 days after any disposition of the Equipment or other fixed assets that are to be
replaced and the replacement Equipment or other fixed assets shall be free and clear of Liens other than Permitted Liens that are not Purchase Money Liens. 
 6.5 Payment of Charges. All amounts chargeable to Co-Borrowers under Section 6 hereof shall be Obligations secured by all of the Collateral, shall be payable on demand and shall bear interest from the date
such advance was made until paid in full at the rate applicable to Base Rate Portions from time to time. 
 SECTION 7. REPRESENTATIONS AND
WARRANTIES 
 7.1 General Representations and Warranties. To induce Agent and each Lender to enter into this Agreement and to make
advances hereunder, Co-Borrowers warrant, represent and covenant to Agent and each Lender that: 
 7.1.1 Qualification.
Borrower and each of its Subsidiaries is a corporation, limited partnership or limited liability company duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization. Borrower and

  

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each of its Subsidiaries is duly qualified and is authorized to do business and is in good standing as a foreign limited liability company, limited
partnership or corporation, as applicable, in each state or jurisdiction listed on Exhibit 7.1.1 hereto and in all other states and jurisdictions in which the failure of Borrower or any of its Subsidiaries to be so qualified could
reasonably be expected to have a Material Adverse Effect. 
 7.1.2 Power and Authority. Borrower and each of its
Subsidiaries is duly authorized and empowered to enter into, execute, deliver and perform this Agreement and each of the other Loan Documents to which it is a party. The execution, delivery and performance of this Agreement and each of the other
Loan Documents have been duly authorized by all necessary corporate or other relevant action and do not and will not: (i) require any consent or approval of the shareholders of Borrower or any of the shareholders, partners or members, as the
case may be, of any Subsidiary of Borrower; (ii) contravene Borrower’s or any of its Subsidiaries’ charter, articles or certificate of incorporation, partnership agreement, certificate of formation, by-laws, limited liability
agreement, operating agreement or other organizational documents (as the case may be); (iii) violate, or cause Borrower or any of its Subsidiaries to be in default under, any provision of any law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award in effect having applicability to Borrower or any of its Subsidiaries, the violation of which could reasonably be expected to have a Material Adverse Effect; (iv) result in a breach of or constitute a
default under any indenture or loan or credit agreement or any other agreement, lease or instrument to which Borrower or any of its Subsidiaries is a party or by which it or its Properties may be bound or affected, the breach of or default under
which could reasonably be expected to have a Material Adverse Effect; or (v) result in, or require, the creation or imposition of any Lien (other than Permitted Liens) upon or with respect to any of the Properties now owned or hereafter
acquired by Borrower or any of its Subsidiaries. 
 7.1.3 Legally Enforceable Agreement. This Agreement is, and each of
the other Loan Documents when delivered under this Agreement will be, a legal, valid and binding obligation of Borrower and each of its Subsidiaries party thereto, enforceable against it in accordance with its respective terms. 
 7.1.4 Capital Structure. Exhibit 7.1.4 hereto states, as of the date hereof, (i) the correct name of each of the
Subsidiaries of Borrower, its jurisdiction of incorporation or organization and the percentage of its Voting Stock owned by Borrower, (ii) the name of Borrower’s and each of its Subsidiaries’ corporate or joint venture relationships
and the nature of the relationship, (iii) the numbers and nature of all outstanding Securities of Borrower and the holder of Securities of each Subsidiary of Borrower and (iv) the number of authorized, issued and treasury Securities of
Borrower and each Subsidiary of Borrower. Borrower has good title to all of the Securities it purports to own of each of such Subsidiaries, free and clear in each case of any Lien other than Permitted Liens. All such Securities have been duly issued
and are fully paid and non-assessable. Except as set forth on Exhibit 7.1.4, as of the date hereof, there are no outstanding options to purchase, or any rights or warrants to subscribe for, or any commitments or agreements to issue or
sell, or any powers of attorney relating to any Securities, or Obligations convertible into Securities of Borrower or any of its Subsidiaries, which in each case, have been granted by Borrowers or any of its Subsidiaries. Except as set forth on
Exhibit 7.1.4, as of the date hereof, there are no outstanding agreements or instruments binding upon any of Borrower’s 

  

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or any of its Subsidiaries’ partners, members or shareholders, as the case may be, relating to the ownership of its Securities to which Borrower or any
of its Subsidiaries are a party. Exhibit 7.1.4 shall be deemed to be updated as permitted by Section 7.2 by each of Borrower’s Public Filings made after the date hereof, so long as Borrower has delivered a copy of such Public
Filing to Agent. 
 7.1.5 Names; Organization. Neither Borrower nor any of its Subsidiaries has been known as or has
used any legal, fictitious or trade names except those listed on Exhibit 7.1.5 hereto. Except as set forth on Exhibit 7.1.5, neither Borrower nor any of its Subsidiaries has been the surviving entity of a merger or
consolidation or has acquired all or substantially all of the assets of any Person. Each of Borrower’s and each of its Subsidiaries’ state(s) of incorporation or organization, Type of Organization and Organizational I.D. Number is set
forth on Exhibit 7.1.5. The exact legal name of Borrower and each of its Subsidiaries is set forth on Exhibit 7.1.5. 
 7.1.6 Business Locations; Agent for Process. Each of Borrower’s and each of its Subsidiary’s chief executive office, location of books and records and other places of business are as listed on
Exhibit 6.1.1 hereto, as updated from time to time by Borrower in accordance with the provisions of subsection 6.1.1. During the preceding one-year period, neither Borrower nor any of its Subsidiaries has had an office, place of
business or agent for service of process, other than as listed on Exhibit 6.1.1. All tangible Collateral is and will at all times be kept by Borrower and its Subsidiaries in accordance with subsection 6.1.1. Except as shown on
Exhibit 6.1.1, as of the date hereof, no Inventory is stored with a bailee, distributor, warehouseman or similar party, nor is any Inventory consigned to any Person. 
 7.1.7 Title to Properties; Priority of Liens. Borrower and each of its Subsidiaries has good, indefeasible and marketable title to
and fee simple ownership of, or valid and subsisting leasehold interests in, all of its real Property, and good title to all of the Collateral and all of its other Property, in each case, free and clear of all Liens except Permitted Liens. Borrower
and each of its Subsidiaries has paid or discharged all lawful claims which, if unpaid, might become a Lien against any of Borrower’s or such Subsidiary’s Properties that is not a Permitted Lien. The Liens granted to Agent under
Section 5 hereof are first priority Liens, subject only to Permitted Liens. 
 7.1.8 Accounts. Agent may rely, in
determining which Accounts are Eligible Accounts, on all statements and representations made by Borrower with respect to any Account or Accounts. With respect to each of Borrower’s Accounts, whether or not such Account is an Eligible Account,
unless otherwise disclosed to Agent in writing: 
 (i) It is genuine and in all respects what it purports to be, and it is not
evidenced by a judgment; 
 (ii) It arises out of a completed, bona fide sale and delivery of goods or rendition
of services by a Co-Borrower, in the ordinary course of its business and in accordance with the terms and conditions of all purchase orders, contracts or other documents relating thereto and forming a part of the contract between a Co-Borrower and
the Account Debtor; 
  

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 (iii) It is for a liquidated amount maturing as stated in the duplicate invoice covering
such sale or rendition of services, a copy of which has been furnished or is available to Agent; 
 (iv) There are no facts,
events or occurrences which in any way impair the validity or enforceability of any Accounts or tend to reduce the amount payable thereunder from the face amount of the invoice and statements delivered or made available to Agent with respect
thereto; 
 (v) To the best of Co-Borrowers’ knowledge, the Account Debtor thereunder (1) had the capacity to
contract at the time any contract or other document giving rise to the Account was executed and (2) such Account Debtor is Solvent; and 
 (vi) To the best of Co-Borrowers’ knowledge, there are no proceedings or actions which are threatened or pending against the Account Debtor thereunder which might result in any material adverse change in such
Account Debtor’s financial condition or the collectibility of such Account. 
 7.1.9 Equipment. The Equipment of
Borrower and its Subsidiaries is in good operating condition and repair, and all necessary replacements of and repairs thereto shall be made so that the operating efficiency thereof shall be maintained and preserved, reasonable wear and tear
excepted. Neither Borrower nor any of its Subsidiaries will permit any Equipment to become affixed to any real Property leased to Borrower or any of its Subsidiaries so that an interest arises therein under the real estate laws of the applicable
jurisdiction unless the landlord of such real Property has executed a landlord waiver or leasehold mortgage in favor of and in form reasonably acceptable to Agent, and Borrower will not permit any of the Equipment of Borrower or any of its
Subsidiaries to become an accession to any personal Property other than Equipment that is subject to first priority Liens (except for Permitted Liens) in favor of Agent. 
 7.1.10 Financial Statements; Fiscal Year. The Consolidated balance sheets of Borrower and its Subsidiaries (including the accounts
of all Subsidiaries of Borrower and their respective Subsidiaries for the respective periods during which a Subsidiary relationship existed) as of [December 31, 2005], and the related statements of income, changes in shareholder’s
equity, and changes in financial position for the periods ended on such dates, have been prepared in accordance with GAAP, and present fairly in all material respects the financial positions of Borrower and such Persons, at such dates and the
results of Borrower’s and such Persons’ operations, for such periods. As of the date hereof, since [December 31, 2005], there has been no material adverse change in the financial position of Borrower and such other Persons,
taken as a whole, as reflected in the Consolidated balance sheet as of such date. As of the date hereof, the fiscal year of Borrower and each of its Subsidiaries ends on December 31 of each year. 
 7.1.11 Full Disclosure. The financial statements referred to in subsection 7.1.10 hereof do not, nor does this Agreement or
any other written statement of Borrower to Agent or any Lender contain any untrue statement of a material fact or omit a material fact necessary to make the statements contained therein or herein not misleading. 
  

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 7.1.12 Solvent Financial Condition. Borrower and each of its Subsidiaries, is and
will be Solvent. 
 7.1.13 Surety Obligations. Except as set forth on Exhibit 7.1.13, as of the date
hereof, neither Borrower nor any of its Subsidiaries is obligated as surety or indemnitor under any surety or similar bond or other contract or has issued or entered into any agreement to assure payment, performance or completion of performance of
any undertaking or obligation of any Person. 
 7.1.14 Taxes. Borrower’s federal tax identification number is
41-1642846. USPoly’s federal tax identification number is 20-3575436. The federal tax identification number of each other Subsidiary of Borrower is shown on Exhibit 7.1.14 hereto. Borrower and each of its Subsidiaries has filed all
federal, state and local tax returns and other reports relating to taxes it is required by law to file, and has paid, or made provision for the payment of, all taxes, assessments, fees, levies and other governmental charges upon it, its income and
Properties as and when such taxes, assessments, fees, levies and charges are due and payable, unless and to the extent any thereof are being actively contested in good faith and by appropriate proceedings and Borrower and each of its Subsidiaries
maintains reasonable reserves on its books therefor. The provision for taxes on the books of Borrower and its Subsidiaries is adequate for all years not closed by applicable statutes, and for the current fiscal year. 
 7.1.15 Brokers. Except as shown on Exhibit 7.1.15 hereto, there are no claims for brokerage commissions, finder’s
fees or investment banking fees in connection with the transactions contemplated by this Agreement. 
 7.1.16 Patents,
Trademarks, Copyrights and Licenses. Borrower and each of its Subsidiaries owns, possesses or licenses or has the right to use all the patents, trademarks, service marks, trade names, copyrights, licenses and other Intellectual Property
necessary for the present and planned future conduct of its business without any known conflict with the rights of others, except for such conflicts as could not reasonably be expected to have a Material Adverse Effect. All such patents, trademarks,
service marks, trade names, copyrights, licenses, and other similar rights are listed on Exhibit 7.1.16 hereto. No claim, which could reasonably be expected to have a Material Adverse Effect, has been asserted to Borrower or any of its
Subsidiaries which is currently pending that their use of their Intellectual Property or the conduct of their business does or may infringe upon the Intellectual Property rights of any third party. To the knowledge of Borrower and except as set
forth on Exhibit 7.1.16 hereto, as of the date hereof, no Person is engaging in any activity that infringes in any material respect upon Borrower’s or any of its Subsidiaries’ material Intellectual Property. Except as set forth
on Exhibit 7.1.16, Borrower’s and each of its Subsidiaries’ (i) material trademarks, service marks, and copyrights are registered with the U.S. Patent and Trademark Office or in the U.S. Copyright Office, as applicable and
(ii) material license agreements and similar arrangements relating to its Inventory (1) permits, and does not restrict, the assignment by Borrower or any of its Subsidiaries to Agent, or any other Person designated by Agent, of all of
Borrower’s or such Subsidiary’s, as applicable, rights, title and interest pertaining to such license agreement or such similar arrangement and (2) would permit the continued use by Borrower or such Subsidiary, or Agent or its
assignee, of such license agreement or such similar arrangement and the right to sell Inventory subject to such license agreement for a period of no less than 6 months after a default or breach of such 

  

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agreement or arrangement. The consummation and performance of the transactions and actions contemplated by this Agreement and the other Loan Document,
including without limitation, the exercise by Agent of any of its rights or remedies under Section 10, will not result in the termination or impairment of any of Borrower’s or any of its Subsidiaries’ ownership or rights relating to
its Intellectual Property, except for such Intellectual Property rights the loss or impairment of which could not reasonably be expected to have a Material Adverse Effect. Except as listed on Exhibit 7.1.16 and except as could not
reasonably be expected to have a Material Adverse Effect, (i) neither Borrower nor any of its Subsidiaries is in breach of, or default under, any term of any license or sublicense with respect to any of its Intellectual Property and
(ii) to the knowledge of Borrower, no other party to such license or sublicense is in breach thereof or default thereunder, and such license is valid and enforceable. 
 7.1.17 Governmental Consents. Borrower and each of its Subsidiaries has, and is in good standing with respect to, all governmental
consents, approvals, licenses, authorizations, permits, certificates, inspections and franchises necessary to continue to conduct its business as heretofore or proposed to be conducted by it and to own or lease and operate its Properties as now
owned or leased by it, except where the failure to possess or so maintain such rights could not reasonably be expected to have a Material Adverse Effect. 
 7.1.18 Compliance with Laws. Borrower and each of its Subsidiaries has duly complied, and its Properties, business operations and leaseholds are in compliance with, the provisions of all federal, state and
local laws, rules and regulations applicable to Borrower or such Subsidiary, as applicable, its Properties or the conduct of its business, except for such non-compliance as could not reasonably be expected to have a Material Adverse Effect, and
there have been no citations, notices or orders of noncompliance issued to Borrower or any of its Subsidiaries under any such law, rule or regulation, except where such noncompliance could not reasonably be expected to have a Material Adverse
Effect. Borrower and each of its Subsidiaries has established and maintains an adequate monitoring system to insure that it remains in compliance in all material respects with all federal, state and local rules, laws and regulations applicable to
it. No Inventory has been produced in violation of the Fair Labor Standards Act (29 U.S.C. §201 et seq.), as amended. 
 7.1.19 Restrictions. Neither Borrower nor any of its Subsidiaries is a party or subject to any contract or agreement which restricts its right or ability to incur Indebtedness, other than as set forth on
Exhibit 7.1.19 hereto, none of which prohibit the execution of or compliance with this Agreement or the other Loan Documents by Borrower or any of its Subsidiaries, as applicable. 
 7.1.20 Litigation. Except as set forth on Exhibit 7.1.20 hereto, there are no actions, suits, proceedings or
investigations pending, or to the knowledge of Borrower, threatened, against or affecting Borrower or any of its Subsidiaries, or the business, operations, Properties, prospects, profits or condition of Borrower or any of its Subsidiaries which,
singly or in the aggregate, could reasonably be expected to have a Material Adverse Effect. Neither Borrower nor any of its Subsidiaries is in default with respect to any order, writ, injunction, judgment, decree or rule of any court, governmental
authority or arbitration board or tribunal, which, singly or in the aggregate, could reasonably be expected to have a Material Adverse Effect. 
  

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 7.1.21 No Defaults. No event has occurred and no condition exists which would,
upon or after the execution and delivery of this Agreement or Borrower’s performance hereunder, constitute a Default or an Event of Default. Neither Borrower nor any of its Subsidiaries is in default in (and no event has occurred and no
condition exists which constitutes, or with the passage of time or the giving of notice or both would constitute, a default in) the payment of any Indebtedness to any Person for Money Borrowed in excess of Seven Hundred Fifty Thousand Dollars
($750,000). 
 7.1.22 Leases. Exhibit 7.1.22 hereto is a complete listing of all capitalized and operating
personal property leases of Borrower and its Subsidiaries and all real property leases of Borrower and its Subsidiaries. Borrower and each of its Subsidiaries is in full compliance with all of the terms of each of its respective capitalized and
operating leases, except where the failure to so comply could not reasonably be expected to have a Material Adverse Effect. 
 7.1.23 Pension Plans. Except as disclosed on Exhibit 7.1.23 hereto, neither Borrower nor any of its Subsidiaries has any Plan. Borrower and each of its Subsidiaries is in compliance with the requirements of ERISA and the
regulations promulgated thereunder with respect to each Plan, except where the failure to so comply could not reasonably be expected to have a Material Adverse Effect. No fact or situation that could reasonably be expected to result in a material
adverse change in the financial condition of Borrower and its Subsidiaries exists in connection with any Plan. Neither Borrower nor any of its Subsidiaries has any withdrawal liability in connection with a Multiemployer Plan. 
 7.1.24 Trade Relations. There exists no actual or, to Co-Borrowers’ knowledge, threatened termination, cancellation or
limitation of, or any modification or change in, the business relationship between Borrower or any of its Subsidiaries and any customer or any group of customers whose purchases individually or in the aggregate are material to the business of
Borrower and its Subsidiaries, or with any material supplier, except in each case, where the same could not reasonably be expected to have a Material Adverse Effect, and there exists no present condition or state of facts or circumstances which
would prevent Borrower or any of its Subsidiaries from conducting such business after the consummation of the transactions contemplated by this Agreement in substantially the same manner in which it has heretofore been conducted. 
 7.1.25 Labor Relations. Except as described on Exhibit 7.1.25 hereto, as of the date hereof, neither Borrower nor any
of its Subsidiaries is a party to any collective bargaining agreement. There are no material grievances, disputes or controversies with any union or any other organization of Borrower’s or any of its Subsidiaries’ employees, or threats of
strikes, work stoppages or any asserted pending demands for collective bargaining by any union or organization, except those that could not reasonably be expected to have a Material Adverse Effect. 
 7.1.26 Related Businesses. Co-Borrowers are engaged in the businesses of the manufacture and distribution of plastic pipe as of the
Closing Date, as well as in certain other businesses. These operations require financing on a basis such that the credit supplied can be made available from time to time to Co-Borrowers, as required for the continued successful operation of
Co-Borrowers taken as a whole. Co-Borrowers have requested the Lenders to make 

  

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credit available hereunder primarily for the purposes set forth in subsection 1.1.3 and generally for the purposes of financing the operations of
Co-Borrowers. Each Co-Borrower and each Subsidiary of each Co-Borrower expects to derive benefit (and the Board of Directors of each Co-Borrower and each Subsidiary of each Co-Borrower has determined that such Co-Borrower or Subsidiary may
reasonably be expected to derive benefit), directly or indirectly, from a portion of the credit extended by Lenders hereunder, both in its separate capacity and as a member of the group of companies, since the successful operation and condition of
each Co-Borrower and each Subsidiary of each Co-Borrower is dependent on the continued successful performance of the functions of the group as a whole. Each Co-Borrower acknowledges that, but for the agreement of each of the other Co-Borrowers to
execute and deliver this Agreement, Agent and Lenders would not have made available the credit facilities established hereby on the terms set forth herein. 
 7.2 Continuous Nature of Representations and Warranties. Each representation and warranty contained in this Agreement and the other Loan Documents shall be continuous in nature and shall remain accurate,
complete and not misleading at all times during the term of this Agreement, except for changes in the nature of Borrower’s or any of Borrower’s Subsidiary’s business or operations that would render the information in any exhibit
attached hereto or to any other Loan Document either inaccurate, incomplete or misleading, so long as Majority Lenders have consented to such changes or such changes are expressly permitted by this Agreement or such changes do not have or evidence a
Material Adverse Effect. Without limiting the generality of the foregoing, each Loan request made or deemed made pursuant to subsection 3.1.1 hereof shall constitute Borrower’s reaffirmation, as of the date of each such loan request, of
each representation, warranty or other statement made or furnished to Agent or any Lender by or on behalf of Borrower, any Subsidiary of Borrower, or any Guarantor in this Agreement, any of the other Loan Documents, or any instrument, certificate or
financial statement furnished in compliance with or in reference thereto, as any such representation, warranty or other statement may be modified or amended as provided in the previous sentence. To the extent Borrowers have not delivered new
exhibits to be attached hereto, then the corresponding exhibit attached to the Original Loan Agreement shall be deemed attached to this Agreement and Borrowers shall be deemed to have represented and warranted to Agent and Lenders that the
information contained in any such exhibit is true and correct in all material respects. 
 7.3 Survival of Representations and
Warranties. All representations and warranties of Borrower contained in this Agreement or any of the other Loan Documents shall survive the execution, delivery and acceptance thereof by Agent and each Lender and the parties thereto and the
closing of the transactions described therein or related thereto. 
 SECTION 8. COVENANTS AND CONTINUING AGREEMENTS 
 8.1 Affirmative Covenants. During the Term, and thereafter for so long as there are any Obligations outstanding, each Co-Borrower covenants that,
unless otherwise consented to by Majority Lenders, in writing, it shall: 
 8.1.1 Visits and Inspections; Lender
Meeting. Permit (i) representatives of Agent, and during the continuation of any Default or Event of Default any Lender, from time to time, as often as may be reasonably requested, but only during normal business hours, to visit 

  

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and inspect the Properties of Borrower and each of its Subsidiaries, inspect, audit and make extracts from its books and records, and discuss with its
officers, its employees and its independent accountants, Borrower’s and each of its Subsidiaries’ business, assets, liabilities, financial condition, business prospects and results of operations and (ii) appraisers engaged pursuant to
Section 2.10 (whether or not personnel of Agent), from time to time, as often as may be reasonably requested, but only during normal business hours and subject to the limitations contained in Section 2.10 of the Agreement, to visit and
inspect the Properties of Borrower and each of its Subsidiaries, for the purpose of completing appraisals pursuant to Section 2.10. Agent, if no Default or Event of Default then exists, shall give Borrower reasonable prior notice of any such
inspection or audit. Without limiting the foregoing, Borrower will participate and will cause key management personnel of each Co-Borrower to participate in a meeting with Agent and Lenders periodically during each year, which meeting(s) shall be
held at such times and such places as may be reasonably requested by Agent. 
 8.1.2 Notices. Promptly notify Agent in
writing of the occurrence of any event or the existence of any fact which renders any representation or warranty in this Agreement or any of the other Loan Documents inaccurate, incomplete or misleading in any material respect as of the date made or
remade. In addition, Borrower agrees to provide Agent with prompt written notice of any change in the information disclosed in any Exhibit hereto (other than changes which are expressly permitted by this Agreement), in each case after giving
effect to the materiality limits and Material Adverse Effect qualifications contained therein. 
 8.1.3 Financial
Statements. Keep, and cause each of its Subsidiaries to keep, adequate records and books of account with respect to its business activities in which proper entries are made in accordance with customary accounting practices reflecting all its
financial transactions; and cause to be prepared and furnished to Agent and each Lender, the following, all to be prepared in accordance with GAAP applied on a consistent basis, unless Borrower’s certified public accountants concur in any
change therein and such change is disclosed to Agent and is consistent with GAAP: 
 (i) not later than 90 days after the
close of each fiscal year of Borrower, unqualified (except for a qualification for a change in accounting principles with which the accountant concurs) audited financial statements of Borrower and its Subsidiaries as of the end of such year, on a
Consolidated and consolidating basis, certified by a firm of independent certified public accountants of recognized standing selected by Borrower but acceptable to Agent and, within a reasonable time thereafter a copy of any management letter issued
in connection therewith; 
 (ii) not later than 30 days after the end of each month hereafter, including the last month of
Borrower’s fiscal year, unaudited interim financial statements of Borrower and its Subsidiaries as of the end of such month and of the portion of the fiscal year then elapsed, on a Consolidated and consolidating basis, certified by the
principal financial officer of Borrower as prepared in accordance with GAAP and fairly presenting in all material respects the financial position and results of operations of Borrower and its Subsidiaries for such month and period subject only to
changes from audit and year-end adjustments and except that such statements need not contain notes; 
  

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 (iii) together with each delivery of financial statements pursuant to clause (i) of
this subsection 8.1.3 and clause (ii) of this subsection 8.1.3 for the months of March, June, September and December, a management report (1) setting forth in comparative form the corresponding figures for the corresponding
periods of the previous fiscal year and the corresponding figures from the most recent Projections for the current fiscal year delivered pursuant to subsection 8.1.7 and (2) identifying the reasons for any significant variations. The
information above shall be presented in reasonable detail and shall be certified by the chief financial officer of Borrower to the effect that such information fairly presents in all material respects the results of operation and financial condition
of Borrower and its Subsidiaries as at the dates and for the periods indicated; 
 (iv) promptly after the sending or filing
thereof, as the case may be, copies of any proxy statements, financial statements or reports which Borrower has made available to its Securities holders and copies of any regular, periodic and special reports or registration statements which
Borrower or any of its Subsidiaries files with the Securities and Exchange Commission or any governmental authority which may be substituted therefor, or any national securities exchange; 
 (v) upon request of Agent, copies of any annual report to be filed with ERISA in connection with each Plan; and 
 (vi) such other data and information (financial and otherwise) as Agent or any Lender, from time to time, may reasonably request, bearing
upon or related to the Collateral or Borrower’s or any of its Subsidiaries’ financial condition or results of operations. 
 The
foregoing notwithstanding, Agent and Lenders agree that in respect to operating divisions, Borrower shall only be required to deliver income statements pursuant to clauses (i) and (ii) above. 
 Concurrently with the delivery of the financial statements described in clause (i) of this subsection 8.1.3, Borrower shall
forward to Agent a copy of the accountants’ letter to Borrower’s management that is prepared in connection with such financial statements and also shall cause to be prepared and shall furnish to Agent a certificate of the aforesaid
certified public accountants certifying to Agent that, based upon their examination of the financial statements of Borrower and its Subsidiaries performed in connection with their examination of said financial statements, they are not aware of any
Default or Event of Default, or, if they are aware of such Default or Event of Default, specifying the nature thereof. Concurrently with the delivery of the annual financial statements described in paragraph (i) and the interim financial
statements described in paragraph (ii) for the months of March, June, September and December and of this subsection 8.1.3, or more frequently if reasonably requested by Agent, Borrower shall cause to be prepared and furnished to Agent a
Compliance Certificate in the form of Exhibit 8.1.3 hereto executed by the Chief Financial Officer of Borrower (a “Compliance Certificate”). 
 8.1.4 Borrowing Base Certificates. On or before the 20th of each month from and after the date hereof, Borrower shall deliver to Agent, in form acceptable to Agent, a 

  

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monthly Borrowing Base Certificate as of the last day of the immediately preceding month, with such supporting materials as Agent shall reasonably request.
If Borrower deems it advisable, or Agent shall request, Borrower shall execute and deliver to Agent Borrowing Base Certificates more frequently than monthly. 
 8.1.5 Landlord, Processor and Storage Agreements. Provide Agent with copies of all agreements between Borrower or any of its
Subsidiaries and any landlord, warehouseman, processor, distributor or consignee which owns or is the lessee of any premises at which any Collateral may, from time to time, be kept. With respect to any lease (other than leases for sales offices),
warehousing agreement or any processing agreement in any case entered into after the Closing Date, Borrower shall provide Agent with landlord waivers, bailee letters or processor letters with respect to such premises. Such landlord waivers, bailee
letters or processor letters shall be in a form supplied by Agent to Borrower with such reasonable revisions as are customarily accepted by Agent or by similar financial institutions in similar financial transactions. 
 8.1.6 Intentionally Omitted. 
 8.1.7 Projections. No later than 30 days prior to the end of each fiscal year of Borrower, deliver to Agent Projections of Borrower and each of its Subsidiaries for the forthcoming fiscal year, month by month.

 8.1.8 Subsidiaries. Cause each Subsidiary of Borrower (other than a Co-Borrower), whether now or hereafter in
existence, promptly upon Agent’s request therefor, to execute and deliver to Agent a Guaranty Agreement and a security agreement pursuant to which such Subsidiary guaranties the payment of all Obligations and grants to Agent a first priority
Lien (subject only to Permitted Liens) on all of its Properties of the types described in Section 5.1. Additionally, Borrower shall execute and deliver to Agent a pledge agreement pursuant to which Borrower grants to Agent a first priority Lien
(subject only to Permitted Liens) with respect to all of the issued and outstanding Securities of each such Subsidiary. 
 8.1.9 Deposit and Brokerage Accounts. For each deposit account or brokerage account that any Co-Borrower at any time opens or maintains, such Co-Borrower shall, at Agent’s request and option, pursuant to an agreement in form and
substance reasonably satisfactory to Agent, cause the depository bank or securities intermediary, as applicable, to agree to comply at any time with instructions from Agent to such depository bank or securities intermediary, as applicable, directing
the disposition of funds from time to time credited to such deposit or brokerage account, without further consent of the applicable Co-Borrower. With respect to any automated clearing house (ACH) services offered by Agent or Bank to any Co-Borrower,
Agent agrees to cause Bank to require Co-Borrowers to pre-fund any such ACH transfer if (x) an Event of Default has occurred and is continuing or (y) any two Lenders deliver to Agent a written request to require Co-Borrowers to do so.

  

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 8.2 Negative Covenants. During the Term, and thereafter for so long as there are any Obligations
outstanding, each Co-Borrower covenants that, unless otherwise consented to by Majority Lenders, in writing, it shall not: 
 8.2.1 Mergers; Consolidations; Acquisitions; Structural Changes. Merge or consolidate, or permit any Subsidiary of Borrower to merge or consolidate, with any Person; nor change its or any of its Subsidiaries’ state of
incorporation or organization, Type of Organization or Organizational I.D. Number; nor change its or any of its Subsidiaries’ legal name; nor acquire, nor permit any of its Subsidiaries to acquire, all or any substantial part of the
Properties of any Person, except for: 
 (i) mergers or other consolidations of any Subsidiary of Borrower into Borrower or
another wholly-owned Subsidiary of Borrower; and 
 (ii) acquisitions of assets consisting of fixed assets or real property
that constitute Capital Expenditures; 
 (iii) Permitted Limited Acquisitions; and 
 (iv) Permitted Acquisitions. 
 8.2.2 Loans. Except as provided in Section 8.2.7 hereof, make, or permit any Subsidiary of Borrower to make, any loans or other advances of money (other than for salary, travel, advances, advances against
commissions and other similar advances in the ordinary course of business) to any Person, except that if after giving effect to any such loans or advances there is no existing and continuing Default or Event of Default, Borrower may make loans and
advances to its officers and executives for the purpose of financing the purchase by such officers and executives in the open market of shares of Borrower’s Common Stock; provided that the aggregate amount of such loans and advances
under this clause does not exceed at any point in time Two Million Dollars ($2,000,000). 
 8.2.3 Total Indebtedness.
Create, incur, assume, or suffer to exist, or permit any Subsidiary of Borrower to create, incur or suffer to exist, any Indebtedness, except: 
 (i) Obligations owing to Agent and Lenders; 
 (ii) Indebtedness of any Subsidiary of Borrower
to Borrower; 
 (iii) accounts payable to trade creditors and current operating expenses (other than for Funded Debt) which
are not aged more than 30 days from the due date, in each case incurred in the ordinary course of business and paid within such time period, unless the same are being actively contested in good faith and by appropriate and lawful proceedings; and
Borrower or such Subsidiary shall have set aside such reserves, if any, with respect thereto as are required by GAAP and deemed adequate by Borrower or such Subsidiary and its independent accountants; 
 (iv) Obligations to pay Rentals permitted by Section 8.2.18; 
 (v) Permitted Purchase Money Indebtedness; 
 (vi) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business; 
  

 36 

 (vii) Indebtedness under Capitalized Leases listed on Exhibit 7.1.22; 
 (viii) Indebtedness incurred in connection with performance bonds, workmen’s compensation bonds or the like; 
 (ix) Indebtedness under the leases of Borrower’s manufacturing plants at 2220 Nugget Way, Eugene, Oregon and at 101 East Avenue M,
Conroe, Texas; 
 (x) Indebtedness under the leases of real Property at 2150 Port of Tacoma Road, Tacoma, Washington, 8875
Avenue 304, Visalia, California and 1820 Midvale Road, Sunnyside, Washington; 
 (xi) Indebtedness under the Sale and
Leaseback Documents; 
 (xii) Permitted Indebtedness; and 
 (xiii) Indebtedness not included in paragraphs (i) through (xii) above which does not exceed at any time, in the aggregate, the
sum of $1,000,000. 
 8.2.4 Affiliate Transactions. Enter into, or be a party to, or permit any Subsidiary of Borrower
to enter into or be a party to, any transaction with any Affiliate of Borrower or any holder of any Securities of Borrower, who is also an Affiliate of Borrower, including without limitation any management, consulting or similar fees, except
(x) in the ordinary course of and pursuant to the reasonable requirements of Borrower’s or such Subsidiary’s business and upon fair and reasonable terms which are fully disclosed to Agent and are no less favorable to Borrower or such
Subsidiary than would be obtained in a comparable arms-length transaction with a Person not an Affiliate or Security holder of Borrower, or (y) the payment of management, consulting or similar fees in an amount not to exceed $500,000 per year,
if the agreement governing the payment of such fees provides that such management, consulting or similar fees are payable no less frequently than quarterly and that any payment of such management, consulting or similar fees would be continually
deferred if after giving effect to any such payment, an Event of Default (including, without limitation, an Event of Default under Section 8.3 hereof) would exist and be continuing. 
 8.2.5 Limitation on Liens. Create or suffer to exist, or permit any Subsidiary of Borrower to create or suffer to exist, any Lien
upon any of its Property, income or profits, whether now owned or hereafter acquired, except: 
 (i) Liens at any time granted
in favor of Agent for its benefit and the ratable benefit of Lenders; 
 (ii) Liens for taxes (excluding any Lien imposed
pursuant to any of the provisions of ERISA) not yet due, or being contested in the manner described in Section 7.1.14 hereto, but only if in Agent’s judgment such Lien does not adversely affect Agent’s or Lenders’ rights or the
priority of Agent’s Lien in the Collateral; 
 (iii) Liens arising in the ordinary course of Co-Borrowers’ business
by operation of law or regulation or to secure the performance of contracts (other than for 

  

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Funded Debt), statutory obligations, surety, appeal bonds or the like, but only if payment in respect of any such Lien is not at the time required and such
Liens do not, in the aggregate, materially detract from the value of the Property of Co-Borrowers or materially impair the use thereof in the operation of Co-Borrowers’ business; 
 (iv) Purchase Money Liens securing Permitted Purchase Money Indebtedness; 
 (v) Liens securing Indebtedness of one of Borrower’s Subsidiaries to Borrower or another such Subsidiary; 
 (vi) such other Liens as appear on Exhibit 8.2.5 hereto; 
 (vii) zoning restrictions, easements, licenses, reservations, provisions, covenants, conditions, waivers, restrictions on the use of
property or minor irregularities of title (and with respect to leasehold interest, mortgages, obligations, liens and other encumbrances incurred, created, assumed or permitted to exist and arising by, through or under a landlord or owner of the
leased Property, with or without consent of the lessee) which do not in the aggregate impair the use of any Property material to the operation of the business of Borrower or its Subsidiaries or the value of such Property for the purpose of the
business of Borrower or its Subsidiaries; 
 (viii) such other Liens as Required Lenders may hereafter approve in writing; and

 (ix) extensions, renewals and replacements of the Liens referred to in paragraphs (i) through (viii) hereof.

 8.2.6 Subordinated Debt and Other Indebtedness. Make, or permit any Subsidiary of Borrower to make, any payment,
redemption or repurchase of any part or all of any Subordinated Debt or take any other action or omit to take any other action in respect of any Subordinated Debt, except in accordance with any applicable subordination agreement. 
 8.2.7 Distributions. Declare or make, or permit any Subsidiary of Borrower to declare or make, any Distributions other than
Distributions payable by a Subsidiary of Borrower to Borrower and Permitted Distributions. 
 8.2.8 Intentionally
Omitted. 
 8.2.9 Disposition of Assets. Sell, lease or otherwise dispose of any of, or permit any Subsidiary of
Borrower to sell, lease or otherwise dispose of any of, its Properties, including any disposition of Property as part of a sale and leaseback transaction, to or in favor of any Person, except for: 
 (i) sales of Inventory in the ordinary course of business; 
 (ii) transfers of Property to Borrower by a Subsidiary of Borrower; 
  

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 (iii) dispositions of Property that is substantially worn, damaged, uneconomic or
obsolete (subject to subsection 6.4.2 hereof); 
 (iv) dispositions of investments described in paragraphs (iv),
(v), (vi) and (vii) of the definition of the term “Restricted Investments”; and 
 (v) other dispositions
expressly authorized by this Agreement (including, without limitation, subsection 8.2.7). 
 8.2.10 Securities of
Subsidiaries. Permit any of its Subsidiaries to issue any additional Securities except to Borrower and except for director’s qualifying Securities. 
 8.2.11 Bill-and-Hold Sales, Etc. Make, or permit any Subsidiary of Borrower to make, a sale to any customer on a bill-and-hold,
guaranteed sale, sale and return, sale on approval, repurchase or return or consignment basis. 
 8.2.12 Restricted
Investment. Except as otherwise provided by subsection 8.2.2 of the Agreement or make or have, or permit any Subsidiary of Borrower to make or have, any Restricted Investment. 
 8.2.13 Subsidiaries and Joint Ventures. Create, acquire or otherwise suffer to exist, or permit any Subsidiary of Borrower to
create, acquire or otherwise suffer to exist, any Subsidiary or joint venture arrangement not in existence as of the date hereof. 
 8.2.14 Tax Consolidation. File or consent to the filing of any consolidated income tax return with any Person other than Borrower’s Subsidiaries. 
 8.2.15 Organizational Documents. Agree to, or suffer to occur, any amendment, supplement or addition to its or any of its
Subsidiaries’ charter, articles or certificate of incorporation, certificate of formation, limited partnership agreement, bylaws, limited liability agreement, operating agreement or other organizational documents (as the case may be), that
would reasonably be expected to have a Material Adverse Effect. 
 8.2.16 Fiscal Year End. Change, or permit any
Subsidiary of Borrower to change, its fiscal year end. 
 8.2.17 Negative Pledges. Enter into any agreement limiting
the ability of Borrower or any of its Subsidiaries to voluntarily create Liens upon any of its Property. 
 8.2.18
Leases. Become, or permit any of its Subsidiaries to become, a lessee under any operating lease (other than a lease under which Borrower or any of its Subsidiaries is lessor) of Property if the aggregate Rentals payable during any current or
future of 12 consecutive months under the lease in question and all other leases under which Borrower or any of its Subsidiaries is then lessee would exceed One Million Five Hundred Thousand Dollars ($1,500,000). Lease payments made with respect to
the Sale and Leaseback Transaction are capital lease payments not operating lease payments. The term “Rentals” means, as of the date of determination, all payments which the lessee is required to make by the terms of any lease. 

 

 39 

 8.3 Specific Financial Covenants. During the Term, and thereafter for so long as there are any
Obligations outstanding, Co-Borrowers covenant that, unless otherwise consented to by Majority Lenders, in writing, they shall comply with all of the financial covenants set forth in Exhibit 8.3 hereto. If GAAP changes from the basis used in
preparing the audited financial statements delivered to Agent by Borrower on or before the Closing Date, Borrower will provide Agent with certificates demonstrating compliance with such financial covenants and will include, at the election of
Borrower or upon the request of Agent, calculations setting forth the adjustments necessary to demonstrate how Borrower is also in compliance with such financial covenants based upon GAAP as in effect on the Closing Date. 
 SECTION 9. CONDITIONS PRECEDENT 
 Notwithstanding any other provision of this Agreement or any of the other Loan Documents, and without affecting in any manner the rights of Agent or any Lender under the other sections of this Agreement, no Lender shall be required to make
the initial Loan, nor shall Agent be required to or issue or procure the initial Letter of Credit or LC Guaranty unless and until each of the following conditions has been and continues to be satisfied: 
 9.1 Documentation. Agent shall have received, in form and substance satisfactory to Agent and its counsel, a duly executed copy of this Agreement
and the other Loan Documents, together with such additional documents, instruments, opinions and certificates as Agent and its counsel shall require in connection therewith from time to time, all in form and substance satisfactory to Agent and its
counsel. 
 9.2 No Default. No Default or Event of Default shall exist. 
 9.3 Other Conditions. Each of the conditions precedent set forth in the Loan Documents shall have been satisfied. 
 9.4 No Litigation. No action, proceeding, investigation, regulation or legislation shall have been instituted, threatened or proposed before any
court, governmental agency or legislative body to enjoin, restrain or prohibit, or to obtain damages in respect of, or which is related to or arises out of this Agreement or the consummation of the transactions contemplated hereby. 
 9.5 Material Adverse Effect. As of the Closing Date, since December 31, 2005, there has not been any material adverse change in its business,
assets, financial condition, income or prospects. 
 9.6 Availability. Agent shall have determined immediately after the payment of
all expenses incurred in connection herewith, Availability shall equal or exceed $30,000,000. 
 9.7 Closing Fees. Co-Borrowers shall
have paid to Agent for the benefit of the applicable Lenders the fees provided for in Section 2.3. 
 9.8 Environmental Matters.
Agent shall be satisfied as to the existing potential liability of Borrower and its Subsidiaries with respect to environmental matters including compliance with all laws and regulations relating to environmental protection. 
  

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 SECTION 10. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT 
 10.1 Events of Default. The occurrence of one or more of the following events shall constitute an “Event of Default”: 
 10.1.1 Payment of Obligations. Co-Borrowers shall fail to pay any of the Obligations hereunder or under any Note on the due date
thereof (whether due at stated maturity, on demand, upon acceleration or otherwise). 
 10.1.2 Misrepresentations. Any
representation, warranty or other statement made or furnished to Agent or any Lender by or on behalf of Borrower, any Subsidiary of Borrower or any Guarantor in this Agreement, any of the other Loan Documents or any instrument, certificate or
financial statement furnished in compliance with or in reference thereto proves to have been false or misleading in any material respect when made, furnished or reaffirmed pursuant to Section 7.2 hereof. 
 10.1.3 Breach of Specific Covenants. Co-Borrowers shall fail or neglect to perform, keep or observe any covenant contained in
Section or subsection 5.2, 5.3, 5.4, 6.1.1, 6.1.2, 6.2.4, 6.2.5, 8.1.1, 8.1.4, 8.1.9, 8.2 or 8.3 hereof on the date that Co-Borrower (or any one of them) are (is) required to perform, keep or observe such covenant or shall fail or neglect to
perform, keep or observe any covenant contained in Section 8.1.3 or 8.1.7 hereof within 5 days following the date on which Co-Borrower (or any one of them) are (is) required to perform, keep or observe such covenant. 
 10.1.4 Breach of Other Covenants. Borrower or any Subsidiary of Borrower shall fail or neglect to perform, keep or observe any
covenant contained in this Agreement (other than a covenant which is dealt with specifically elsewhere in Section 10.1 hereof) and the breach of such other covenant is not cured to Majority Lenders’ satisfaction within fifteen
(15) days after the sooner to occur of Borrower’s receipt of notice of such breach from Agent or any Lender or the date on which such failure or neglect first becomes known to any officer of Borrower or any Subsidiary of any Borrower;
provided, however, that if a cure cannot be effected within such fifteen (15) day period, Co-Borrowers shall have ten (10) additional days to effect such cure if during such ten-day period Co-Borrowers are diligent in
pursuing such a cure. 
 10.1.5 Default Under Security Documents or Other Agreements. Any event of default shall occur
under, or Borrower or any of its Subsidiaries shall default in the performance or observance of any term, covenant, condition or agreement contained in, any of the Security Documents, or the Other Agreements and such default shall continue beyond
any applicable grace period. 
 10.1.6 Other Defaults. There shall occur any default or event of default on the part of
Borrower or any Subsidiary of Borrower under any agreement, document or instrument to which Borrower or such Subsidiary of Borrower is a party or by which Borrower, such Subsidiary of Borrower or any of its Property is bound, evidencing or relating
to any Indebtedness (other than the Obligations) with an outstanding principal balance in excess of $750,000, if the payment or maturity of such Indebtedness is or could be accelerated in 

  

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consequence of such event of default or demand for payment of such Indebtedness is made or could be made in accordance with the terms thereof. 
 10.1.7 Uninsured Losses. Any material loss, theft, damage or destruction of any portion of the Collateral having a fair market
value of $750,000, in the aggregate, if not fully covered (subject to such deductibles and self-insurance retentions as Agent shall have permitted) by insurance. 
 10.1.8 Insolvency and Related Proceedings. Borrower or any Subsidiary of Borrower shall cease to be Solvent or shall suffer the
appointment of a receiver, trustee, custodian or similar fiduciary, or shall make an assignment for the benefit of creditors, or any petition for an order for relief shall be filed by or against Borrower or any Subsidiary of Borrower under U.S.
federal bankruptcy laws (if against Borrower or any Subsidiary of Borrower the continuation of such proceeding for more than 30 days), or Borrower or any Subsidiary of Borrower shall make any offer of settlement, extension or composition to their
respective unsecured creditors generally. 
 10.1.9 Business Disruption; Condemnation. There shall occur a cessation of
a substantial part of the business of Borrower or any Subsidiary of Borrower for a period which materially adversely affects Borrower’s or such Subsidiary’s capacity to continue its business on a profitable basis; or Borrower or any
Subsidiary of Borrower shall suffer the loss or revocation of any material license or permit now held or hereafter acquired by Borrower or any Subsidiary of Borrower which is necessary to the continued or lawful operation of its business; or
Borrower or any Subsidiary of Borrower shall be enjoined, restrained or in any way prevented by court, governmental or administrative order from conducting all or any material part of its business affairs; or any material lease or agreement pursuant
to which Borrower or any Subsidiary of Borrower leases, uses or occupies any Property shall be canceled or terminated prior to the expiration of its stated term, except any such lease or agreement the cancellation or termination of which could not
reasonably be expected to have a Material Adverse Effect; or any material portion of the Collateral shall be taken through condemnation or the value of such Property shall be impaired through condemnation. 
 10.1.10 Change of Control. A Change of Control shall have occurred and, with respect to a Board Change of Control only, Agent or
Majority Lenders shall have declared in writing that such Board Change constitutes an Event of Default within [30] days after the occurrence of such Board Change of Control. Agent and Lenders agree not to charge Co-Borrowers any fee in order
to waive or not declare an Event of Default as a result of a Board Change of Control. 
 10.1.11 ERISA. A Reportable
Event shall occur which, in Agent’s reasonable determination, constitutes grounds for the termination by the Pension Benefit Guaranty Corporation of any Plan or for the appointment by the appropriate United States district court of a trustee
for any Plan, or any Plan shall be terminated or any such trustee shall be requested or appointed, or if Borrower or any Subsidiary of Borrower is in “default” (as defined in Section 4219(c)(5) of ERISA) with respect to payments to a
Multiemployer Plan resulting from Borrower’s or such Subsidiary’s complete or partial withdrawal from such Plan and any such event could reasonably be expected to have a Material Adverse Effect. 
  

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 10.1.12 Challenge to Agreement. Borrower or any Subsidiary of Borrower, or any
Affiliate of any of them, shall challenge or contest in any action, suit or proceeding the validity or enforceability of this Agreement or any of the other Loan Documents, the legality or enforceability of any of the Obligations or the perfection or
priority of any Lien granted to Agent. 
 10.1.13 Criminal Forfeiture. Borrower or any Subsidiary of Borrower or any
other Guarantor shall be criminally indicted or convicted under any law that could lead to a forfeiture of any Property of Borrower or any Subsidiary of Borrower. 
 10.1.14 Judgments. Any money judgments, writ of attachment or similar processes (collectively, “Judgments”) are issued or
rendered against Borrower or any Subsidiary of Borrower, or any of their respective Property (i) in the case of money judgments, in an amount of Two Hundred Fifty Thousand Dollars ($250,000) or more for all such judgments, attachments or
processes in the aggregate, in each case in excess of any applicable insurance with respect to which the insurer has admitted liability, and (ii) in the case of non-monetary Judgments, such Judgment or Judgments (in the aggregate) could
reasonably be expected to have a Material Adverse Effect, in each case which Judgment is not stayed, released or discharged within 30 days. 
 10.1.15 Senior Management. Borrower’s chief executive officer or chief financial officer shall resign or otherwise cease to be employed by Borrower and such individual(s) is (are) not replaced within 60
days after the date on which such officer(s) is (are) no longer employed by Borrower with an individual(s) acceptable to Agent. 
 10.2
Acceleration of the Obligations. Upon or at any time after the occurrence and during the continuance of an Event of Default, (i) the Revolving Loan Commitments shall, at the option of Agent or Majority Lenders be terminated and/or
(ii) Agent or Majority Lenders may declare all or any portion of the Obligations at once due and payable without presentment, demand, protest or further notice by Agent or any Lender, and Co-Borrowers shall forthwith pay to Agent, the full
amount of such Obligations, provided, that upon the occurrence of an Event of Default specified in subsection 10.1.8 hereof, the Revolving Loan Commitments shall automatically be terminated and all of the Obligations shall become
automatically due and payable, in each case without declaration, notice or demand by Agent or any Lender. 
 10.3 Other Remedies. Upon
the occurrence and during the continuance of an Event of Default, Agent shall have and may and, upon receiving an instruction from Majority Lenders in accordance with Section 11.1, shall exercise from time to time the following other rights and
remedies: 
 10.3.1 All of the rights and remedies of a secured party under the UCC or under other applicable law, and all
other legal and equitable rights to which Agent or Lenders may be entitled, all of which rights and remedies shall be cumulative and shall be in addition to any other rights or remedies contained in this Agreement or any of the other Loan Documents,
and none of which shall be exclusive. 
  

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 10.3.2 The right to take immediate possession of the Collateral, and to (i) require
Borrower and each of its Subsidiaries to assemble the Collateral, at Co-Borrowers’ expense, and make it available to Agent at a place designated by Agent which is reasonably convenient to both parties, and (ii) enter any premises where any
of the Collateral shall be located and to keep and store the Collateral on said premises until sold (and if said premises be the Property of Borrower or any Subsidiary of Borrower, Borrower agrees not to charge, or permit any of its Subsidiaries to
charge, Agent for storage thereof). 
 10.3.3 The right to sell or otherwise dispose of all or any Collateral in its then
condition, or after any further manufacturing or processing thereof, at public or private sale or sales, with such notice as may be required by law, in lots or in bulk, for cash or on credit, all as Agent, in its sole discretion, may deem advisable.
Agent may, at Agent’s option, disclaim any and all warranties regarding the Collateral in connection with any such sale. Co-Borrowers agree that 10 days’ written notice to Borrower or any of its Subsidiaries of any public or private sale
or other disposition of Collateral shall be reasonable notice thereof, and such sale shall be at such locations as Agent may designate in said notice. Agent shall have the right to conduct such sales on Borrower’s or any of its
Subsidiaries’ premises, without charge therefor, and such sales may be adjourned from time to time in accordance with applicable law. Agent shall have the right to sell, lease or otherwise dispose of the Collateral, or any part thereof, for
cash, credit or any combination thereof, and Agent, on behalf of Lenders, may purchase all or any part of the Collateral at public or, if permitted by law, private sale and, in lieu of actual payment of such purchase price, may set off the amount of
such price against the Obligations. The proceeds realized from the sale of any Collateral shall be applied, after allowing 2 Business Days for collection, first to the costs, expenses and attorneys’ fees incurred by Agent in collecting
the Obligations, in enforcing the rights of Agent and Lenders under the Loan Documents and in collecting, retaking, completing, protecting, removing, storing, advertising for sale, selling and delivering any Collateral and second as provided
in subsection 3.4.2 hereof. If any deficiency shall arise, Co-Borrowers shall remain jointly and severally liable to Agent and Lenders therefor. 
 10.3.4 Agent is hereby granted a license or other right to use, without charge, Borrower’s and each of its Subsidiary’s labels, patents, copyrights, licenses, rights of use of any name, trade secrets, trade
names, trademarks and advertising matter, or any Property of a similar nature, as it pertains to the Collateral, in completing, advertising for sale and selling any Collateral and Borrower’s and each of its Subsidiary’s rights under all
licenses and all franchise agreements shall inure to Agent’s benefit. 
 10.3.5 Agent may, at its option, or shall, if so
required by Majority Lenders, require Co-Borrowers to deposit with Agent funds equal to the LC Amount; provided that upon the occurrence of an Event of Default specified in Section 10.1.8 hereof, Co-Borrowers shall automatically deposit
with Agent funds equal to the LC Amount and, if Co-Borrowers fail to promptly make such deposit, Agent may advance such amount as a Revolving Credit Loan (whether or not an Overadvance is created thereby). Each such Revolving Credit Loan shall be
secured by all of the Collateral and shall constitute a Base Bate Portion. Any such deposit or advance shall be held by Agent as a reserve to fund future payments on such LC Guaranties and future drawings against such Letters of Credit. At such time
as all LC Guaranties have been paid or terminated and all Letters of Credit have been drawn upon or expired, any amounts remaining 

  

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in such reserve shall be applied against any outstanding Obligations, or, if all Obligations have been indefeasibly paid in full, returned to Co-Borrowers.

 10.4 Set Off and Sharing of Payments. In addition to any rights now or hereafter granted under applicable law and not by way of
limitation of any such rights, during the continuance of any Event of Default, each Lender is hereby authorized by each Co-Borrower at any time or from time to time, with prior written consent of Agent and with reasonably prompt subsequent notice to
Co-Borrowers (any prior or contemporaneous notice to Co-Borrowers being hereby expressly waived) to set off and to appropriate and to apply any and all (i) balances held by such Lender at any of its offices for the account of Borrower or any of
its Subsidiaries (regardless of whether such balances are then due to Borrower or its Subsidiaries), and (ii) other property at any time held or owing by such Lender to or for the credit or for the account of Borrower or any of its
Subsidiaries, against and on account of any of the Obligations. Any Lender exercising a right to set off shall, to the extent the amount of any such set off exceeds its Revolving Loan Percentage of the amount set off, purchase for cash (and the
other Lenders shall sell) interests in each such other Lender’s pro rata share of the Obligations as would be necessary to cause such Lender to share such excess with each other Lender in accordance with their respective Revolving Loan
Percentages. Each Co-Borrower agrees, to the fullest extent permitted by law, that any Lender may exercise its right to set off with respect to amounts in excess of its pro rata share of the Obligations and upon doing so shall deliver such excess to
Agent for the benefit of all Lenders in accordance with the Revolving Loan Percentages. 
 10.5 Remedies Cumulative; No Waiver. All
covenants, conditions, provisions, warranties, guaranties, indemnities, and other undertakings of Co-Borrowers contained in this Agreement and the other Loan Documents, or in any document referred to herein or contained in any agreement
supplementary hereto or in any schedule or in any Guaranty Agreement given to Agent or any Lender or contained in any other agreement between any Lender and any or all Co-Borrower(s) or between Agent and any or all Co-Borrower(s) heretofore,
concurrently, or hereafter entered into, shall be deemed cumulative to and not in derogation or substitution of any of the terms, covenants, conditions, or agreements of Co-Borrowers herein contained. The failure or delay of Agent or any Lender to
require strict performance by Co-Borrowers of any provision of this Agreement or to exercise or enforce any rights, Liens, powers, or remedies hereunder or under any of the aforesaid agreements or other documents or security or Collateral shall not
operate as a waiver of such performance, Liens, rights, powers and remedies, but all such requirements, Liens, rights, powers, and remedies shall continue in full force and effect until all Loans and other Obligations owing or to become owing from
Co-Borrowers to Agent and each Lender have been fully satisfied. None of the undertakings, agreements, warranties, covenants and representations of Co-Borrowers contained in this Agreement or any of the other Loan Documents and no Default or Event
of Default by Co-Borrowers under this Agreement or any other Loan Documents shall be deemed to have been suspended or waived by Lenders, unless such suspension or waiver is by an instrument in writing specifying such suspension or waiver and is
signed by a duly authorized representative of Agent and directed to Borrower, on its own behalf and on behalf of each other Co-Borrower. 
  

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 SECTION 11. AGENT 
 11.1 Authorization and Action. Each Lender hereby appoints and authorizes Agent to take such action on its behalf and to exercise such powers
under this Agreement and the other Loan Documents as are delegated to Agent by the terms hereof and thereof, together with such powers as are reasonably incidental thereto. Each Lender hereby acknowledges that Agent shall not have by reason of this
Agreement assumed a fiduciary relationship in respect of any Lender. In performing its functions and duties under this Agreement, Agent shall act solely as agent of Lenders and shall not assume, or be deemed to have assumed, any obligation toward,
or relationship of agency or trust with or for, Co-Borrowers. As to any matters not expressly provided for by this Agreement and the other Loan Documents (including without limitation enforcement and collection of the Notes), Agent may, but shall
not be required to, exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Majority Lenders, whenever such
instruction shall be requested by Agent or required hereunder, or a greater or lesser number of Lenders if so required hereunder, and such instructions shall be binding upon all Lenders; provided, that Agent shall be fully justified in
failing or refusing to take any action which exposes Agent to any liability (for which Agent, in the reasonable exercise of its discretion, believes it is not adequately indemnified against) or which is contrary to this Agreement, the other Loan
Documents or applicable law, unless Agent is indemnified to its satisfaction by the other Lenders against any and all liability and expense which it may incur by reason of taking or continuing to take any such action. If Agent seeks the consent or
approval of the Majority Lenders (or a greater or lesser number of Lenders as required in this Agreement), with respect to any action hereunder, Agent shall send notice thereof to each Lender and shall notify each Lender at any time that the
Majority Lenders (or such greater or lesser number of Lenders) have instructed Agent to act or refrain from acting pursuant hereto. 
 11.2
Agent’s Reliance, Etc. Neither Agent, any Affiliate of Agent, nor any of their respective directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by it or them under or in connection with this
Agreement or the other Loan Documents, except for its or their own gross negligence or willful misconduct. Without limitation of the generality of the foregoing, Agent: (i) may treat each Lender party hereto as the holder of Obligations until
Agent receives written notice of the assignment or transfer or such lender’s portion of the Obligations signed by such Lender and in form reasonably satisfactory to Agent; (ii) may consult with legal counsel, independent public accountants
and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts, (iii) makes no warranties or representations to any
Lender and shall not be responsible to any Lender for any recitals, statements, warranties or representations made in or in connection with this Agreement or any other Loan Documents; (iv) shall not have any duty beyond Agent’s customary
practices in respect of loans in which Agent is the only lender, to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement or the other Loan Documents on the part of Co-Borrowers,
to inspect the property (including the books and records) of Co-Borrowers, to monitor the financial condition of Co-Borrowers or to ascertain the existence or possible existence or continuation of any Default or Event of Default; (v) shall not
be responsible to any Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or the other Loan Documents or any other instrument or document furnished pursuant hereto or thereto;
(vi) shall not be liable to any Lender for any action taken, or inaction, by Agent upon the instructions of Majority Lenders pursuant to Section 11.1 hereof or refraining to take any action pending such instructions; 

  

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(vii) shall not be liable for any apportionment or distributions of payments made by it in good faith pursuant to Section 3 hereof;
(viii) shall incur no liability under or in respect of this Agreement or the other Loan Documents by acting upon any notice, consent, certificate, message or other instrument or writing (which may be by telephone, facsimile, telegram, cable or
telex) believed in good faith by it to be genuine and signed or sent by the proper party or parties; and (ix) may assume that no Event of Default has occurred and is continuing, unless Agent has actual knowledge of the Event of Default, has
received notice from Co-Borrowers or Co-Borrowers’ independent certified public accounts stating the nature of the Event of Default, or has received notice from a Lender stating the nature of the Event of Default and that such Lender considers
the Event of Default to have occurred and to be continuing. In the event any apportionment or distribution described in clause (vii) above is determined to have been made in error, the sole recourse of any Person to whom payment was due but not
made shall be to recover from the recipients of such payments any payment in excess of the amount to which they are determined to have been entitled. 
 11.3 Bank of America and Affiliates. With respect to its commitment hereunder to make Loans, Bank of America shall have the same rights and powers under this Agreement and the other Loan Documents as any other
Lender and may exercise the same as though it were not Agent; and the terms “Lender,” “Lenders” or “Majority Lenders” shall, unless otherwise expressly indicated, include Bank of America in its individual capacity as a
Lender. Bank of America and its Affiliates may lend money to, and generally engage in any kind of business with, any Co-Borrower, and any Person who may do business with or own Securities of any Co-Borrower all as if Bank of America were not Agent
and without any duty to account therefor to any other Lender. 
 11.4 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon Agent or any other Lender and based on the financial statements referred to herein and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into
this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement. Agent shall not have any duty or responsibility, either initially or on an ongoing basis, to provide any Lender with any credit or other similar information regarding Co-Borrowers,
except for any reports or information that Agent is expressly required to give Lenders pursuant to the terms of this Agreement. 
 11.5
Indemnification. Lenders agree to indemnify Agent (to the extent not reimbursed by Co-Borrowers), in accordance with their respective Aggregate Percentages, from and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against Agent in any way relating to or arising out of this Agreement or any other Loan Document or any
action taken or omitted by Agent under this Agreement; provided that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from Agent’s gross negligence or willful misconduct or resulting from Product Obligations offered by Agent or its Affiliates to any Co-Borrower. Without limitation of the foregoing, each Lender agrees to 

  

 47 

 
reimburse Agent promptly upon demand for its ratable share, as set forth above, of any out-of-pocket expenses (including reasonable attorneys’ fees)
incurred by Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiation, legal proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement and each other Loan Document, to the extent that Agent is not reimbursed for such expenses by Co-Borrowers. The obligations of Lenders under this Section 11.5 shall survive the payment in full of all
Obligations and the termination of this Agreement. If after payment and distribution of any amount by Agent to Lenders, any Lender or any other Person, including any Co-Borrower, any creditor of a Co-Borrower, a liquidator, administrator or trustee
in bankruptcy, recovers from Agent any amount found to have been wrongfully paid to Agent or disbursed by Agent to Lenders, then Lenders, in accordance with their respective Aggregate Percentages, shall reimburse Agent for all such amounts.

 11.6 Rights and Remedies to be Exercised by Agent Only. Each Lender agrees that, except as set forth in Section 10.4 and
except, at times when no Person is acting as Agent, for any action to sue for and collect a judgment upon its Note, no Lender shall have any right individually (i) to realize upon the security created by this Agreement or any other Loan
Document, (ii) to enforce any provision of this Agreement or any other Loan Document, or (iii) to make demand under this Agreement or any other Loan Document. 
 11.7 Agency Provisions Relating to Collateral. Each Lender authorizes and ratifies Agent’s entry into this Agreement and the Security Documents for the benefit of Lenders. Each Lender agrees that any
action taken by Agent with respect to the Collateral in accordance with the provisions of this Agreement or the Security Documents, and the exercise by Agent of the powers set forth herein or therein (other than any act or omission that is contrary
to the written instructions of Majority Lenders given pursuant to Section 11.1.), together with such other powers as are reasonably incidental thereto, shall be authorized and binding upon all Lenders. Agent is hereby authorized on behalf of
all Lenders, without the necessity of any notice to or further consent from any Lender to take any action with respect to any Collateral or the Loan Documents which may be necessary to perfect and maintain perfected Agent’s Liens upon the
Collateral, for its benefit and the ratable benefit of Lenders. Lenders hereby irrevocably authorize Agent, at its option and in its discretion, to release any Lien granted to or held by Agent upon any Collateral (i) upon termination of the
Agreement and payment and satisfaction of all Obligations; or (ii) constituting property being sold or disposed of if Borrower, on its own behalf and on behalf of each other Co-Borrower, certifies to Agent that the sale or disposition is made
in compliance with subsection 8.2.9 hereof (and Agent may rely conclusively on any such certificate, without further inquiry); or (iii) constituting property in which no Co-Borrower owned any interest at the time the Lien was granted or at
any time thereafter; or (iv) in connection with any foreclosure sale or other disposition of Collateral after the occurrence and during the continuation of an Event of Default or (v) if approved, authorized or ratified in writing by Agent
at the direction of all Lenders. Upon request by Agent at any time, Lenders will confirm in writing Agent’s authority to release particular types or items of Collateral pursuant hereto. Agent shall have no obligation whatsoever to any Lender or
to any other Person to assure that the Collateral exists or is owned by a Co-Borrower or is cared for, protected or insured or has been encumbered or that the Liens granted to Agent herein or pursuant to the Security Documents have been properly or
sufficiently or lawfully created, perfected, protected or enforced or are entitled to any particular priority, or to exercise at all or in any particular manner 

  

 48 

 
or under any duty of care, disclosure or fidelity, or to continue exercising, any of its rights, authorities and powers granted or available to Agent in this
Section 11.7 or in any of the Loan Documents, it being understood and agreed that in respect of the Collateral, or any act, omission or event related thereto, Agent may act in any manner it may deem appropriate, in its sole discretion,
exercised in good faith, but consistent with the provisions of this Agreement, including given Agent’s own interest in the Collateral as a Lender and that Agent shall have no duty or liability whatsoever to any Lender. 
 11.8 Agent’s Right to Purchase Commitments. Agent shall have the right, but shall not be obligated, at any time upon written notice to any
Lender and with the consent of such Lender, which may be granted or withheld in such Lender’s sole discretion, to purchase and assume for Agent’s own account all of such Lender’s interests in this Agreement, the other Loan Documents
and the Obligations, for the unpaid balance of the outstanding Obligations owed to such Lender, including without limitation all accrued and unpaid interest and fees. 
 11.9 Right of Sale, Assignment, Participations. Each Co-Borrower hereby consents to any Lender’s participation, sale, assignment, transfer or other disposition, at any time or times hereafter, of this
Agreement and any of the other Loan Documents, or of any portion hereof or thereof, including, without limitation, such Lender’s rights, title, interests, remedies, powers, and duties hereunder or thereunder subject to the terms and conditions
set forth below: 
 11.9.1 Sales, Assignments. Each assigning Lender hereby agrees that, with respect to any sale or
assignment (i) no such sale or assignment shall be for an amount of less than $5,000,000 or an integral multiple of $1,000,000 in excess thereof, (ii) each such sale or assignment shall be made on terms and conditions which are customary
in the industry at the time of the transaction, (iii) Agent and, in the absence of a Default or Event of Default, Borrower, on its own behalf and on behalf of each other Co-Borrower, must consent, such consent not to be unreasonably withheld,
to each such assignment to a Person that is not an original signatory to this Agreement, (iv) the assigning Lender shall pay to Agent a processing and recordation fee of $3,500 and any reasonable out-of-pocket attorneys’ fees and expenses
incurred by Agent in connection with any such sale or assignment and (v) Agent, the assigning Lender and the assignee Lender shall each have executed and delivered an Assignment and Acceptance Agreement. After such sale or assignment has been
consummated (x) the assignee Lender thereupon shall become a “Lender” for all purposes of this Agreement and (y) the assigning Lender shall have no further liability for funding the portion of Revolving Loan Commitments assumed
by such other Lender. Notwithstanding any other provision of this Agreement, any Lender may at any time create a security interest in, or pledge, all or any portion of its rights under and interest in this Agreement and any note held by it in favor
of any federal reserve bank in accordance with Regulation A of the Board or U.S. Treasury Regulation 31 CFR § 203.14, and such Federal Reserve Bank may enforce such pledge or security interest in any manner permitted under applicable law.

 11.9.2 Participations. Any Lender may grant participations in its extensions of credit hereunder to any other Lender
or other lending institution (a “Participant”), provided that (i) no such participation shall be for an amount of less than $5,000,000, (ii) no Participant shall thereby acquire any direct rights under this Agreement,
(iii) no Participant shall be granted any right to consent to any amendment, except to the extent any of the same pertain to (1) reducing 

  

 49 

 
the aggregate principal amount of, or interest rate on, or fees applicable to, any Loan or (2) extending the final stated maturity of any Loan or the
stated maturity of any portion of any payment of principal of, or interest or fees applicable to, any of the Loans; provided, that the rights described in this subclause (2) shall not be deemed to include the right to consent to any
amendment with respect to or which has the effect of requiring any mandatory prepayment of any portion of any Loan or any amendment or waiver of any Default or Event of Default, (iv) no sale of a participation in extensions of credit shall in
any manner relieve the originating Lender of its obligations hereunder, (v) the originating Lender shall remain solely responsible for the performance of such obligations, (vi) Co-Borrowers and Agent shall continue to deal solely and
directly with the originating Lender in connection with the originating Lender’s rights and obligations under this Agreement and the other Loan Documents, (vii) in no event shall any financial institution purchasing the participation grant
a participation in its participation interest in the Loans without the prior written consent of Agent, and, in the absence of a Default or an Event of Default, Borrower, on its own behalf and on behalf of each other Co-Borrower, which consents shall
not unreasonably be withheld and (viii) all amounts payable by Co-Borrowers hereunder shall be determined as if the originating Lender had not sold any such participation. Notwithstanding the sale by any Lender of any participation hereunder,
no Participant shall be deemed to be or have the rights and obligations of a Lender hereunder except that (a) any participant shall have a right of setoff under Section 10.4 as if it were such Lender and the amount of its participation
were owing directly to such participant by the Co-Borrowers and (b) each such Participant shall be entitled to the benefits of Sections 3.8, 3.9 and 12.2 with respect to its participation. 
 11.9.3 Certain Agreements of Co-Borrowers. Each Co-Borrower agrees that (i) it will use commercially reasonable best efforts
to assist and cooperate with each Lender in any manner reasonably requested by such Lender to effect the sale of participation in or assignments of any of the Loan Documents or any portion thereof or interest therein, including, without limitation,
assisting in the preparation of appropriate disclosure documents and making members of management available at reasonable times and upon reasonable notice to meet with and answer questions of potential assignees and Participants; and
(ii) subject to the provisions of Section 12.14 hereof, such Lender may disclose credit information regarding Co-Borrowers to any potential Participant or assignee. 
 11.9.4 Non U.S. Resident Transferees. If, pursuant to this Section 11.9, any interest in this Agreement or any Loans is
transferred to any transferee which is organized under the laws of any jurisdiction other than the United States or any state thereof, the transferor Lender shall cause such transferee (other than any Participant), and may cause any Participant,
concurrently with and as a condition precedent to the effectiveness of such transfer, to (i) represent to the transferor Lender (for the benefit of the transferor Lender, Agent, and Co-Borrowers) that under applicable law and treaties no taxes
will be required to be withheld by Agent, Co-Borrowers or the transferor Lender with respect to any payments to be made to such transferee in respect of the interest so transferred, (ii) furnish to the transferor Lender, Agent and Co-Borrowers
either United States Internal Revenue Service Form W-8BEN or United States Internal Revenue Service Form W-8ECI (wherein such transferee claims entitlement to complete exemption from United States federal withholding tax on all interest payments
hereunder), and (iii) agree (for the benefit of the transferor Lender, Agent and Co-Borrowers) to provide the transferor Lender, Agent and Co-Borrowers a new Form W-8BEN or Form W-8ECI upon the 

  

 50 

 
obsolescence of any previously delivered form and comparable statements in accordance with applicable United States laws and regulations and amendments duly
executed and completed by such transferee, and to comply from time to time with all applicable United States laws and regulations with regard to such withholding tax exemption. 
 11.10 Amendment. No amendment or waiver of any provision of this Agreement or any other Loan Document (including without limitation any Note), nor
consent to any departure by Co-Borrowers therefrom, shall in any event be effective unless the same shall be in writing and signed by the Majority Lenders and Co-Borrowers, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, that no amendment, waiver or consent shall be effective, unless (i) in writing and signed by each Lender, to any of the following: (1) except as expressly permitted by
Section 2.13, increase or decrease the aggregate Loan Commitments or any Lender’s Revolving Loan Commitment, (2) reduce the principal of, or interest on, any amount payable hereunder or under any Note, other than those payable only to
Bank of America in its capacity as Agent, which may be reduced by Bank of America unilaterally, (3) amend the definition of Applicable Margin or increase or decrease any interest rate payable hereunder (other than the waiver or rescission of
interest charged at the Default Rate which waiver or rescission may be effected by Majority Lenders), (4) postpone any date fixed for any payment of principal of, or interest on, any amounts payable hereunder or under any Note, other than those
payable only to Bank of America in its capacity as Agent, which may be postponed by Bank of America unilaterally, (5) increase any advance percentage (including, without limitation, the Inventory Advance Percentage) contained in the definition
of the term Borrowing Base, (6) reduce the number of Lenders that shall be required for Lenders or any of them to take any action hereunder, (7) release or discharge any Person liable for the performance of any obligations of
Co-Borrowers hereunder or under any of the Loan Documents, (8) amend any provision of this Agreement that requires the consent of all Lenders or consent to or waive any breach thereof, (9) amend the definition of the term “Majority
Lenders”, (10) amend subsection 3.4.2, subsection 8.1.11 or this Section 11.10, (11) release any substantial portion of the Collateral, unless otherwise permitted pursuant to Section 11.7 hereof, (12) amend
the definition of Borrowing Base in any manner that materially increases the principal amount of Revolving Credit Loans that Co-Borrowers are able to obtain or (13) amend clause (iii) of subsection 8.2.3; or (ii) in writing and
signed by Agent in addition to the Lenders required above to affect the rights or duties of Agent under this Agreement, any Note or any other Loan Document. 
 11.11 Resignation of Agent; Appointment of Successor. Agent may resign as Agent by giving not less than thirty (30) days’ prior written notice to Lenders and Borrower, on its own behalf and on behalf
of each other Co-Borrower. If Agent shall resign under this Agreement, then, (i) subject to the consent of Co-Borrowers (which consent shall not be unreasonably withheld and which consent shall not be required during any period in which a
Default or an Event of Default exists), Majority Lenders shall appoint from among Lenders a successor agent for Lenders or (ii) if a successor agent shall not be so appointed and approved within the thirty (30) day period following
Agent’s notice to Lenders and Co-Borrowers of its resignation, then Agent shall appoint a financial institution as successor agent who shall serve as Agent until such time as Majority Lenders appoint a successor agent, subject to
Co-Borrowers’ consent as set forth above. Upon its appointment, such successor agent shall succeed to the rights, powers and duties of Agent and the term “Agent” shall mean such successor effective upon its appointment, 

  

 51 

 
and the former Agent’s rights, powers and duties as Agent shall be terminated without any other or further act or deed on the part of such former Agent
or any of the parties to this Agreement. After the resignation of any Agent hereunder, the provisions of this Section 11 shall inure to the benefit of such former Agent and such former Agent shall not by reason of such resignation be deemed to
be released from liability for any actions taken or not taken by it while it was an Agent under this Agreement. 
 11.12 Audit and
Examination Reports; Disclaimer by Lenders. By signing this Agreement, each Lender: 
 (a) is deemed to have requested
that Agent furnish such Lender, promptly after it becomes available, a copy of each audit or examination report (each a “Report” and collectively, “Reports”) prepared by or on behalf of Agent; 
 (b) expressly agrees and acknowledges that Agent (i) does not make any representation or warranty as to the accuracy of any Report,
and (ii) shall not be liable for any information contained in any Report; 
 (c) expressly agrees and acknowledges that
the Reports are not comprehensive audits or examinations, that Agent or other party performing any audit or examination will inspect only specific information regarding Borrower and will rely significantly upon Borrower’s books and records, as
well as on representations of Borrower’s personnel; 
 (d) agrees to keep all Reports confidential and strictly for its
internal use, and not to distribute except to its participants, or use any Report in any other manner, in accordance with the provisions of Section 12.14; and 
 (e) without limiting the generality of any other indemnification provision contained in this Agreement, agrees: (i) to hold Agent and
any such other Lender preparing a Report harmless from any action the indemnifying Lender may take or conclusion the indemnifying Lender may reach or draw from any Report in connection with any loans or other credit accommodations that the
indemnifying Lender has made or may make to Co-Borrowers, or the indemnifying Lender’s participation in, or the indemnifying Lender’s purchase of, a loan or loans of Co-Borrowers; and (ii) to pay and protect, and indemnify, defend and
hold Agent and any such other Lender preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses and other amounts (including attorney’s fees and expenses) incurred by Agent and any such other Lender
preparing a Report as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender. 
  

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 SECTION 12. MISCELLANEOUS 
 12.1 Power of Attorney. Each Co-Borrower hereby irrevocably designates, makes, constitutes and appoints Agent (and all Persons designated by
Agent) as such Co-Borrower’s true and lawful attorney (and agent-in-fact), solely with respect to the matters set forth in this Section 12.1, and Agent, or Agent’s agent, may, without notice to Co-Borrowers and in Co-Borrower’s
or Agent’s name, but at the cost and expense of Co-Borrowers: 
 12.1.1 At such time or times as Agent or said agent, in
its sole discretion, may determine, endorse any Co-Borrower’s name on any checks, notes, acceptances, drafts, money orders or any other evidence of payment or proceeds of the Collateral which come into the possession of Agent or under
Agent’s control. 
 12.1.2 At such time or times upon or after the occurrence and during the continuance of an Event of
Default (provided that the occurrence of an Event of Default shall not be required with respect to clauses (iv), (vi), (viii) and (ix) below), as Agent or its agent in its sole discretion may determine: (i) demand payment
of the Accounts from the Account Debtors, enforce payment of the Accounts by legal proceedings or otherwise, and generally exercise all of Co-Borrowers’ rights and remedies with respect to the collection of the Accounts; (ii) settle,
adjust, compromise, discharge or release any of the Accounts or other Collateral or any legal proceedings brought to collect any of the Accounts or other Collateral; (iii) sell or assign any of the Accounts and other Collateral upon such terms,
for such amounts and at such time or times as Agent deems advisable, and at Agent’s option, with all warranties regarding the Collateral disclaimed; (iv) take control, in any manner, of any item of payment or proceeds relating to any
Collateral; (v) prepare, file and sign any Co-Borrower’s name to a proof of claim in bankruptcy or similar document against any Account Debtor or to any notice of lien, assignment or satisfaction of lien or similar document in connection
with any of the Collateral; (vi) receive, open and dispose of all mail addressed to any Co-Borrower and notify postal authorities to change the address for delivery thereof to such address as Agent may designate; (vii) endorse the name of
any Co-Borrower upon any of the items of payment or proceeds relating to any Collateral and deposit the same to the account of Agent on account of the Obligations; (viii) endorse the name of any Co-Borrower upon any chattel paper, document,
instrument, invoice, freight bill, bill of lading or similar document or agreement relating to the Accounts, Inventory and any other Collateral; (ix) use any Co-Borrower’s stationery and sign the name of any Co-Borrower to verifications of
the Accounts and notices thereof to Account Debtors; (x) use the information recorded on or contained in any data processing equipment and Computer Hardware and Software relating to the Accounts, Inventory, Equipment and any other Collateral;
(xi) make and adjust claims under policies of insurance; and (xii) do all other acts and things necessary, in Agent’s determination, to fulfill Co-Borrowers’ obligations under this Agreement. 
 The power of attorney granted hereby shall constitute a power coupled with an interest and shall be irrevocable. 
 12.2 Indemnity. Co-Borrowers hereby agree to indemnify Agent and each Lender (and each of their Affiliates, attorneys, employees, officers,
directors and agents) and hold Agent and each Lender (and each of their Affiliates, attorneys, employees, officers, directors and agents) harmless from and against any liability, loss, damage, suit, action or proceeding ever suffered or incurred by
any such Person (including reasonable attorneys fees and legal expenses) (a) as the result of Co-Borrowers’ failure to observe, perform or discharge Co-Borrowers’ duties hereunder; (b) by reason of, relating to or in connection
with the execution, delivery, performance or enforcement of any Loan Document, any commitments relating thereto, or any transaction contemplated by any Loan Document; or (c) by reason of, relating to or in connection with any credit extended or
used under the Loan Documents or any act done or omitted by any Person, or the exercise of any rights or remedies thereunder, including the acquisition of any collateral by the Lender by way of foreclosure of the lien thereon, deed or bill of sale
in lieu of 

  

 53 

 
such foreclosure or otherwise, except those resulting from the gross negligence or intentional misconduct of Agent, any Lender, any Affiliate of Agent or any
Lender or any of their attorneys, employees, officers, directors or agents. In addition, Co-Borrowers shall defend Agent and each Lender (and each of their Affiliates) against and save it harmless from all claims of any Person with respect to the
Collateral (except those resulting from the gross negligence or intentional misconduct of Agent, any Lender or any Affiliate of Agent or any Lender, as applicable). Without limiting the generality of the foregoing, these indemnities shall extend to
any claims asserted against Agent or any Lender (and each of their Affiliates) by any Person under any Environmental Laws by reason of Co-Borrowers’ or any other Person’s failure to comply with laws applicable to solid or hazardous waste
materials or other toxic substances. Notwithstanding any contrary provision in this Agreement, the obligation of Co-Borrowers under this Section 12.2 shall survive the payment in full of the Obligations and the termination of this Agreement.

 12.3 Sale of Interest. No Co-Borrower may sell, assign or transfer any interest in this Agreement, any of the other Loan Documents,
or any of the Obligations, or any portion thereof, including, without limitation, Co-Borrowers’ rights, title, interests, remedies, powers, and duties hereunder or thereunder. 
 12.4 Severability. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement. 
 12.5 Successors and Assigns. This Agreement, the Other Agreements and the
Security Documents shall be binding upon and inure to the benefit of the successors and assigns of each Co-Borrower, Agent and each Lender permitted under Section 11.9 hereof. 
 12.6 Cumulative Effect; Conflict of Terms. The provisions of the Other Agreements and the Security Documents are hereby made cumulative with the
provisions of this Agreement. Except as otherwise provided in any of the other Loan Documents by specific reference to the applicable provision of this Agreement, if any provision contained in this Agreement is in direct conflict with, or
inconsistent with, any provision in any of the other Loan Documents, the provision contained in this Agreement shall govern and control. 
 12.7 Execution in Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and
all of which counterparts taken together shall constitute but one and the same instrument. 
 12.8 Notice. Except as otherwise
provided herein, all notices, requests and demands to or upon a party hereto, to be effective, shall be in writing, and shall be sent by certified or registered mail, return receipt requested, by personal delivery against receipt, by overnight
courier or by facsimile and, unless otherwise expressly provided herein, shall be deemed to have been validly served, given, delivered or received immediately when delivered against receipt, three (3) Business Days’ after deposit in the
mail, postage prepaid, one (1) Business Day after 

  

 54 

 
deposit with an overnight courier or, in the case of facsimile notice, when sent with respect to machine confirmed, addressed as follows: 
  

			
	 If to Agent:
	  	 Bank of America, N.A.
 One South Wacker
Drive
 Suite 3400
 Chicago, Illinois 60606
 Attention: Loan Administration Manager
 Facsimile No.:
(312) 332-6537

		
	 With a copy to:
	  	 Vedder, Price, Kaufman & Kammholz, P.C.
 222
North LaSalle Street
 Suite 2600
 Chicago, Illinois
60601
 Attention: John T. McEnroe
 Facsimile No.:
(312) 609-5005

		
	 If to Co-Borrowers:
	  	 PW Eagle, Inc.
 1550 Valley River Drive
 Eugene, Oregon 97440
 Attention: Scott M. Long
 Facsimile No.: (541) 686-9248

		
	 With a copy to:
	  	 Fredrikson & Byron, P.A.
 200 South Sixth
Street, Suite 4000
 Minneapolis, MN 55402-1425
 Attention: K.
Lisa Holter
 Facsimile No.: (612) 492-7077

		
	 If to any Lender:
	  	at the address of such Lender indicated in its signature page hereto

 or to such other address as each party may designate for itself by notice given in accordance with this
Section 12.8; provided, however, that any notice, request or demand to or upon Agent or a Lender pursuant to subsection 3.1.1 or 4.2.2 hereof shall not be effective until received by Agent or such Lender. 
 12.9 Consent. Whenever Agent’s, Majority Lenders’ or all Lenders’ consent is required to be obtained under this Agreement, any of
the Other Agreements or any of the Security Documents as a condition to any action, inaction, condition or event, except as otherwise specifically provided herein, Agent, Majority Lenders or all Lenders, as applicable, shall be authorized to give or
withhold such consent in their sole and absolute discretion and to condition its consent upon the giving of additional Collateral security for the Obligations, the payment of money or any other matter. 
 12.10 Credit Inquiries. Each Co-Borrower hereby authorizes and permits Agent and 

  

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each Lender to respond to usual and customary credit inquiries from third parties concerning such Co-Borrower or any of its Subsidiaries, consistent with
usual and customary practices in the industry. 
 12.11 Time of Essence. Time is of the essence of this Agreement, the Other
Agreements and the Security Documents. 
 12.12 Entire Agreement. This Agreement and the other Loan Documents, together with all other
instruments, agreements and certificates executed by the parties in connection therewith or with reference thereto, embody the entire understanding and agreement between the parties hereto and thereto with respect to the subject matter hereof and
thereof and supersede all prior agreements, understandings and inducements, whether express or implied, oral or written. 
 12.13
Interpretation. No provision of this Agreement or any of the other Loan Documents shall be construed against or interpreted to the disadvantage of any party hereto by any court or other governmental or judicial authority by reason of such
party having or being deemed to have structured or dictated such provision. 
 12.14 Confidentiality. Agent and each Lender shall hold
all nonpublic information in accordance with Agent’s and such Lender’s customary procedures for handling confidential information of this nature and in accordance with safe and sound banking practices and in any event may make disclosure
reasonably required by a prospective participant or assignee in connection with the contemplated participation or assignment or as required or requested by any governmental authority or representative thereof or pursuant to legal process and shall
require any such participant or assignee to agree to comply with this Section 12.14. Agent and each Lender shall advise Borrower in writing of any such disclosure. Neither Agent nor any Lender shall use any nonpublic information concerning
Borrower in contravention of state or federal securities laws. Agent and each Lender acknowledges that it is aware, and that it will advise its directors, officers, employees and representatives, that the United States securities laws prohibit any
person who has received from an issuer material, non-public information concerning that issuer from purchasing or selling securities of such issuer or from communicating such information to any other person under circumstances under which it is
reasonably foreseeable that such person is likely to purchase or sell securities of such issuer. 
 12.15 GOVERNING LAW; CONSENT TO
FORUM. THIS AGREEMENT HAS BEEN NEGOTIATED, EXECUTED AND DELIVERED IN AND SHALL BE DEEMED TO HAVE BEEN MADE IN CHICAGO, ILLINOIS. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS;
PROVIDED, HOWEVER, THAT IF ANY OF THE COLLATERAL SHALL BE LOCATED IN ANY JURISDICTION OTHER THAN ILLINOIS, THE LAWS OF SUCH JURISDICTION SHALL GOVERN THE METHOD, MANNER AND PROCEDURE FOR FORECLOSURE OF AGENT’S LIEN UPON SUCH
COLLATERAL AND THE ENFORCEMENT OF AGENT’S OTHER REMEDIES IN RESPECT OF SUCH COLLATERAL TO THE EXTENT THAT THE LAWS OF SUCH JURISDICTION ARE DIFFERENT FROM OR INCONSISTENT WITH THE LAWS OF ILLINOIS. AS PART OF THE CONSIDERATION FOR NEW VALUE
RECEIVED, AND REGARDLESS OF ANY PRESENT OR FUTURE DOMICILE OR PRINCIPAL 

  

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PLACE OF BUSINESS OF ANY CO-BORROWER, AGENT OR ANY LENDER, EACH CO-BORROWER, AGENT AND EACH LENDER HEREBY CONSENTS AND AGREES THAT THE CIRCUIT COURT OF
COOK COUNTY, ILLINOIS, OR, AT AGENT’S OPTION, THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION, SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN ANY CO-BORROWER ON
THE ONE HAND AND AGENT OR ANY LENDER ON THE OTHER HAND PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATED TO THIS AGREEMENT. EACH CO-BORROWER EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT
COMMENCED IN ANY SUCH COURT, AND EACH CO-BORROWER HEREBY WAIVES ANY OBJECTION WHICH SUCH CO-BORROWER MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH
LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH CO-BORROWER HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND
OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO BORROWER (ON ITS OWN BEHALF AND ON BEHALF OF EACH OTHER CO-BORROWER) AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE
EARLIER OF BORROWER’S ACTUAL RECEIPT THEREOF OR 3 DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID. NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO AFFECT THE RIGHT OF AGENT OR ANY LENDER TO SERVE LEGAL PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW, OR TO PRECLUDE THE ENFORCEMENT BY AGENT OR ANY LENDER OF ANY JUDGMENT OR ORDER OBTAINED IN SUCH FORUM OR THE TAKING OF ANY ACTION UNDER THIS AGREEMENT TO ENFORCE SAME IN ANY OTHER APPROPRIATE FORUM OR JURISDICTION.

 12.16 WAIVERS BY CO-BORROWERS. EACH CO-BORROWER, AGENT AND EACH LENDER WAIVES THE RIGHT TO TRIAL BY JURY (WHICH AGENT AND
EACH LENDER HEREBY ALSO WAIVES) IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO ANY OF THE LOAN DOCUMENTS, THE OBLIGATIONS OR THE COLLATERAL. EACH CO-BORROWER WAIVES (i) PRESENTMENT, DEMAND AND PROTEST
AND NOTICE OF PRESENTMENT, PROTEST, DEFAULT, NON PAYMENT, MATURITY, RELEASE, COMPROMISE, SETTLEMENT, EXTENSION OR RENEWAL OF ANY OR ALL COMMERCIAL PAPER, ACCOUNTS, CONTRACT RIGHTS, DOCUMENTS, INSTRUMENTS, CHATTEL PAPER AND GUARANTIES AT ANY TIME
HELD BY AGENT OR ANY LENDER ON WHICH ANY CO-BORROWER MAY IN ANY WAY BE LIABLE AND HEREBY RATIFIES AND CONFIRMS WHATEVER AGENT OR ANY LENDER MAY DO IN THIS REGARD; (ii) NOTICE PRIOR TO AGENT’S TAKING POSSESSION OR CONTROL OF THE
COLLATERAL OR ANY BOND OR SECURITY WHICH MIGHT BE REQUIRED BY ANY COURT 

  

 57 

 
PRIOR TO ALLOWING AGENT TO EXERCISE ANY OF AGENT’S REMEDIES; (iii) THE BENEFIT OF ALL VALUATION, APPRAISEMENT AND EXEMPTION LAWS;
(iv) NOTICE OF ACCEPTANCE HEREOF AND (v) EXCEPT AS PROHIBITED BY LAW, ANY RIGHT TO CLAIM OR RECOVER ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. EACH CO-BORROWER
ACKNOWLEDGES THAT THE FOREGOING WAIVERS ARE A MATERIAL INDUCEMENT TO AGENT’S AND EACH LENDER’S ENTERING INTO THIS AGREEMENT AND THAT AGENT AND EACH LENDER IS RELYING UPON THE FOREGOING WAIVERS IN ITS FUTURE DEALINGS WITH CO-BORROWERS. EACH
CO-BORROWER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THE FOREGOING WAIVERS WITH ITS LEGAL COUNSEL AND HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT. 
 12.17 Advertisement. Co-Borrowers hereby authorize
Agent to publish the name of Borrower and the amount of the credit facility provided hereunder in any “tombstone” or comparable advertisement which Agent elects to publish. 
 12.18 No Novation. Notwithstanding anything to the contrary contained herein, this Agreement is not intended to and does not serve to effect a
novation of the Obligations. Instead, it is the express intention of the parties hereto to reaffirm the indebtedness created under the Original Loan Agreement which is evidenced by the notes provided for therein and secured by the Collateral. Each
Co-Borrower acknowledges and confirms that the Liens granted pursuant to the Loan Documents secured the indebtedness, liabilities and obligations of Borrower to Agent and the applicable Lenders under the Original Loan Agreement, as amended and
restated hereby, and that the term “Obligations” as used in the Loan Documents (or any other terms used therein to describe or refer to the indebtedness, liabilities and obligations of Co-Borrowers to Agent and Lenders) includes, without
limitation, the indebtedness, liabilities and obligations of each Co-Borrower under the Notes to be delivered hereunder, and under the Original Loan Agreement, all as amended and restated hereby, as the same may be further amended, modified,
supplemented or restated from time to time. The Loan Documents and all agreements, instruments and documents executed or delivered in connection with any of the foregoing shall each be deemed to be amended to the extent necessary to give effect to
the provisions of this Agreement. Cross-references in the Loan Documents to particular section numbers in the Original Loan Agreement shall be deemed to be cross-references to the corresponding sections, as applicable, to this Agreement. 

12.19 Joint and Several Liability and Reimbursement. The undertaking by Co-Borrowers to repay the Obligations and each representation, warranty
or covenant of each Borrower are and shall be joint and several. Subject to the last sentence of this Section 12.19, to the extent that any Co-Borrower shall be required to pay a portion of the Obligations which shall exceed the amount of
loans, advances or other extensions of credit received by such Co-Borrower and all interest, costs, fees and expenses attributable to such loans, advances or other extensions of credit, then such Co-Borrower shall be reimbursed by the other 

  

 58 

 
Co-Borrowers for the amount of such excess. This Section 12.19 is intended only to define the relative rights of Co-Borrowers, and nothing set forth in
Section 12.19 is intended or shall impair the obligations of each Co-Borrower, jointly and severally, to pay to Agent and Lenders the Obligations as and when the same shall become due and payable in accordance with the terms hereof.
Notwithstanding anything to the contrary set forth in this Section 12.19 or any other provisions of this Agreement, it is the intent of the parties hereto that the liability incurred by each Co-Borrower in respect of the Obligations of the
other Co-Borrowers (and any Lien granted by each Co-Borrower to secure such Obligations), not constitute a fraudulent conveyance or fraudulent transfer under the provisions of any applicable law of any state or other governmental unit
(“Fraudulent Conveyance”). Consequently, each Co-Borrower, Agent and each Lender hereby agree that if a court of competent jurisdiction determines that the incurrence of liability by any Co-Borrower in respect of the Obligations of any
other Co-Borrower (or any Liens granted by such Co-Borrower to secure such Obligations) would, but for the application of this sentence, constitute a Fraudulent Conveyance, such liability (and such Liens) shall be valid and enforceable only to the
maximum extent that would not cause the same to constitute a Fraudulent Conveyance, and this Agreement and the other Loan Documents shall automatically be deemed to have been amended accordingly, nunc pro tunc. The obligations of the Co-Borrowers
hereunder shall not be released, in whole or in part, by any action or thing which might, but for this provision of this Agreement, be deemed a legal or equitable discharge of a surety or guarantor, other than irrevocable payment and performance in
full of the Obligations at a time after any obligation of the Lenders and the Agent to extend financial accommodations to the Co-Borrowers shall have expired or been terminated. Notwithstanding any payment or payments made by any Co-Borrower
hereunder or any setoff or application of funds of any Co-Borrower by any Lender or the Agent, such Co-Borrower shall not be entitled to be subrogated to any of the rights of any Lender or the Agent against any other Co-Borrower or any other
guarantor or any collateral security or guaranty or right of offset held by any Lender or the Agent for the payment of the Obligations, nor shall such Co-Borrower seek or be entitled to seek any contribution or reimbursement from any other
Co-Borrower or any other guarantor in respect of payments made by such Borrower hereunder, until all amounts owing to the Lenders and the Agent by the Co-Borrowers on account of the Obligations are irrevocably paid in full and all commitments of the
Lenders and the Agent to extend financial accommodations to the Co-Borrowers have been terminated. 
 12.20 Defaulting Lender.

 (a) Remedies Against a Defaulting Lender. In addition to the rights and remedies that may be available to Agent or
Co-Borrowers under this Agreement or applicable law, if at any time a Lender defaults on its obligations to make Loans herein (any such Lender a “Defaulting Lender”), such Defaulting Lender’s right to collect unused line fees or to
participate in the administration of the Loans, this Agreement and the other Loan Documents, including without limitation, any right to vote in respect of, to consent to or to direct any action or inaction of Agent or to be taken into account in the
calculation of the Majority Lenders, shall be suspended while such Lender remains a Defaulting Lender; provided, however, that the Revolving Loan Commitments of such Lender may not be increased and the period of such Revolving Loan
Commitments may not be extended without such Defaulting Lender’s prior written consent. If a Lender is a Defaulting Lender because it has failed to make timely payment to Agent of any amount 

  

 59 

 
required to be paid to Agent hereunder (without giving effect to any notice or cure periods), in addition to other rights and remedies which Agent or
Co-Borrowers may have under the immediately preceding provisions or otherwise, Agent shall be entitled (i) to collect interest from such Defaulting Lender on such delinquent payment for the period from the date on which the payment was due
until the date on which the payment is made at the Prime Rate, (ii) to withhold or setoff and to apply in satisfaction of the defaulted payment and any related interest, any amounts otherwise payable to such Defaulting Lender under this
Agreement or any other Loan Document until such defaulted payment and related interest has been paid in full and such default no longer exists and (iii) to bring an action or suit against such Defaulting Lender in a court of competent
jurisdiction to recover the defaulted amount and any related interest. Any amounts received by Agent in respect of a Defaulting Lender’s Loans shall not be paid to such Defaulting Lender and shall be held uninvested by Agent and either applied
against the purchase price of such Loans under the following subsection (b) or paid to such Defaulting Lender upon the default of such Defaulting Lender being cured. 
 (b) Purchase from Defaulting Lender. Any Lender that is not a Defaulting Lender shall have the right, but not the obligation, in
its sole discretion, to acquire all of a Defaulting Lender’s Commitments. If more than one Lender exercises such right, each such Lender shall have the right to acquire such proportion of such Defaulting Lender’s Commitments on a pro rata
basis. Upon any such purchase, the Defaulting Lender’s interest in its Loans and its rights hereunder (but not its liability in respect thereof of under the Loan Documents or this Agreement to the extent the same relate to the period prior to
the effective date of the purchase) shall terminate on the date of purchase, and the Defaulting Lender shall promptly execute all documents reasonably requested to surrender and transfer such interest to the purchaser thereof subject to and in
accordance with the requirements set forth in subsection 11.9.1, including an Assignment and Acceptance Agreement in form acceptable to Agent. The purchase price for the Commitments of a Defaulting Lender shall be equal to the amount of the
principal balance of the Loans outstanding and owed by the Co-Borrowers to the Defaulting Lender. The purchaser shall pay to the Defaulting Lender in immediately available funds on the date of such purchase the principal of and accrued and unpaid
interest and fees on the Loans made by such Defaulting Lender hereunder (it being understood that such accrued and unpaid interest and fees may be paid pro rata to the purchasing Lender and the Defaulting Lender by Agent at a subsequent date upon
receipt of payment of such amounts from the Co-Borrowers). Prior to payment of such purchase price to a Defaulting Lender, Agent shall apply against such purchase price any amounts retained by Agent pursuant to the last sentence of the immediately
preceding subsection (a). The Defaulting Lender shall be entitled to receive amounts owed to it by Co-Borrowers under the Loan Documents which accrued prior to the date of the default by the Defaulting Lender, to the extent the same are
received by Agent from or on behalf of the Co-Borrowers. There shall be no recourse against any Lender or Agent for the payment of such sums except to the extent of the receipt of payments from any other party or in respect of the Loans. 

(Signature Page Follows) 
  

 60 

 Fifth Amended and Restated Loan and Security Agreement Signature Page 
 IN WITNESS WHEREOF, this Agreement has been duly executed on the day and year specified at the beginning of this Agreement. 
  

					
	PW EAGLE, INC., a Minnesota corporation, as
a Borrower
		
	By:	 	/s/ Scott Long
		 	Name:	 	Scott Long
		 	Title:	 	CFO
	
	USPOLY COMPANY, LLC, a Minnesota limited liability company, as a Borrower
		
	By:	 	/s/ Scott Long
		 	Name:	 	Scott Long
		 	Title:	 	CFO

 Fifth Amended and Restated Loan and Security Agreement Signature Page 
  

					
	BANK OF AMERICA, N.A., as Agent and as a Lender
		
	By:	 	/s/ Brian Conole
		 	Name:	 	Brian Conole
		 	Title:	 	Senior Vice-President
	
	Revolving Loan Commitment: $50,000,000

 Fifth Amended and Restated Loan and Security Agreement Signature Page 
  

					
	WELLS FARGO BUSINESS CREDIT, INC., as a Lender
		
	By:	 	/s/ Ronald E. Gockowski
		 	Name:	 	Ronald E. Gockowski
		 	Title:	 	Vice-President
	
	 Revolving Loan Commitment: $25,000,000
  
 Address:
  
 Wells Fargo Center
 N9312-040 MAC
 Sixth and Marquette
Avenue
 Minneapolis, Minnesota 55479
 Attention: Ronald E.
Gockowski
 Telephone No.: 612-673-8577
 Facsimile No.:
612-673-8589

 Fifth Amended and Restated Loan and Security Agreement Signature Page 
  

					
	THE CIT GROUP/BUSINESS CREDIT, INC., as a Lender
		
	By:	 	/s/ Jack A. Meyers
		 	Name:	 	Jack A. Meyers
		 	Title:	 	Vice-President
	
	 Revolving Loan Commitment: $25,000,000
  
 Address:
  
 Ten South LaSalle Street, 22nd Floor
 Chicago, IL 60603
 Attention:                                     
                                
 Telephone No.: 312.424.9700
 Facsimile No.: 312.424.9740

 APPENDIX A 
 GENERAL DEFINITIONS 
 When used in the Fifth Amended and Restated Loan and Security Agreement dated as of
April 27, 2006, by and among Bank of America, N.A., individually and as Agent, the other financial institutions which are or become parties thereto (“Lenders”) and PW Eagle, Inc. and USPoly Company, LLC (a) the terms
Account, Certificated Security, Chattel Paper, Commercial Tort Claims, Deposit Account, Document, Electronic Chattel Paper, Equipment, Financial Asset, Fixture, General
Intangibles, Goods, Instruments, Inventory, Investment Property, Letter-of-Credit Rights, Payment Intangibles, Proceeds, Security, Security Entitlement, Software,
Supporting Obligations, Tangible Chattel Paper and Uncertificated Security have the respective meanings assigned thereto under the UCC; (b) all terms affecting Collateral having the meanings assigned thereto under the UCC
shall be deemed to mean such Property, whether now owned or hereafter created or acquired by any Co-Borrower or in which a Co-Borrower now has or hereafter acquires any interest; (c) capitalized terms which are not otherwise defined have the
respective meanings assigned thereto in said Loan and Security Agreement; and (d) the following terms shall have the following meanings (terms defined in the singular to have the same meaning when used in the plural and vice versa): 

Account Debtor – any Person who is or may become obligated under or on account of any Account, Contract Right, Chattel Paper or
General Intangible. 
 Affiliate – a Person (other than a Subsidiary): (i) which directly or indirectly through one or
more intermediaries controls, or is controlled by, or is under common control with, a Person; (ii) which beneficially owns or holds 5% or more of any class of the Voting Stock of a Person; or (iii) 5% or more of the Voting Stock (or in the
case of a Person which is not a corporation, 5% or more of the equity interest) of which is beneficially owned or held by a Person or a Subsidiary of a Person. 
 Agent – Bank of America, N.A., in its capacity as agent for the Lenders under the Agreement and any successor in that capacity appointed pursuant to subsection 11.11 of the Agreement. 

Agent Loans – as defined in subsection 1.1.5 of the Agreement. 
 Aggregate Percentage – with respect to each Lender, the percentage equal to the quotient of (i) such Lender’s Loan Commitment
divided by (ii) the aggregate of all Loan Commitments. 
 Agreement – the Fifth Amended and Restated Loan and
Security Agreement referred to in the first sentence of this Appendix A, all Exhibits and Schedules thereto and this Appendix A, as each of the same may be amended from time to time. 
 ALTA Survey – a survey prepared in accordance with the standards adopted by the American Land Title Association and the American Congress on
Surveying and Mapping in 1997, known as the “Minimum Standard Detail Requirements of Land Title Surveys”. The ALTA Survey shall be in sufficient form to satisfy the requirements of [Name of] Title Insurance Company to provide extended
coverage over survey defects and shall also show the location of 

  

 A-1 

 
all easements, utilities, and covenants of record, dimensions of all improvements, encroachments from any adjoining property, and certify as to the location
of any flood plain area affecting the subject real estate. The ALTA Survey shall contain the following certification: “To PW Eagle, Inc., Bank of America, N.A., as Agent, and _____________ Title Insurance Company. This is to certify that this
map of plat and the survey on which it is based were made in accordance with the “Minimum Standard Detail Requirements for Land Title Surveys” jointly established and adopted by ALTA and ACSM in 1997. (signed (SEAL) License
No. __________”. 
 Applicable Margin – from the Closing Date to, but not including, the first Adjustment Date (as
hereinafter defined) the percentages set forth below with respect to the Base Rate Portion, the LIBOR Portion, the L/C Fee and the Unused Line Fee: 
  

				
	 Base Rate Portion
	  	-.50	%
	 LIBOR Portion
	  	1.00	%
	 L/C Fee
	  	1.00	%
	 Unused Line Fee
	  	.50	%

 The percentages set forth above will be adjusted on the first day of the month following delivery
by Borrower to Agent of the financial statements required to be delivered pursuant to subsection 8.1.3 of the Agreement for each December 31, March 31, June 30 and September 30 during the Term, commencing with the month
ending March 31, 2007 (each such date an “Adjustment Date”), effective prospectively, by reference to the applicable “Financial Measurement” (as defined below) for the four quarters most recently ending in accordance with
the following: 
  

													
	 Financial
Measurement
	  	Base Rate
Portion	 	 	LIBOR
Portion	 	 	
L/C Fee	 	 	Unused
Line Fee	 
	 < 1.25 to 1
	  	0.00	%	 	1.75	%	 	1.75	%	 	0.375	%
	 > 1.25 to 1, but
< 1.75 to 1
	  	0.00	%	 	1.50	%	 	1.50	%	 	0.25	%
	 >1.75 to 1, but < 2.25 to 1
	  	-0.25	%	 	1.25	%	 	1.25	%	 	0.25	%
	 >2.25 to 1
	  	-0.50	%	 	1.00	%	 	1.00	%	 	0.25	%

 provided that, if Borrower fails to deliver the financial statements required to be delivered pursuant to
subsection 8.1.3 of the Agreement on or before the due date thereof, and such failure has not been cured to Agent’s reasonable satisfaction, the Applicable Margin shall automatically adjust to the highest interest rate or fee set forth
above, effective prospectively from such due date until the next Adjustment Date. For purposes hereof, “Financial Measurement” shall mean the Fixed Charge Coverage Ratio. The foregoing notwithstanding, with respect to the Applicable Margin
for Unused Line Fees, from April 1, 2006 until the date when Co-Borrowers have paid Agent for periods after the Closing Date Unused Line Fees in an amount equal to $125,000 over the amount that Co-Borrowers would have paid Agent for Unused Line Fees
for such period if the Applicable Margin for Unused Line Fees had been 0.25%, the Applicable Margin for Unused Line Fees shall remain at 0.50%. On and after such date, the Applicable 

  

 A-2 

 
Margin for Unused Line Fees shall be 0.25% (or such higher number as applicable as of the most recent Adjustment Date per the above grid). 
 Assignment and Acceptance Agreement – an assignment and acceptance agreement in form and content reasonably acceptable to Agent pursuant
to which a Lender assigns to another Lender all or any portion of any of such Lender’s Revolving Loan Commitment, as permitted pursuant to the terms of this Agreement. 
 Availability – the amount of additional money which Co-Borrowers are entitled to borrow from time to time as Revolving Credit Loans,
such amount being the difference derived when the sum of the principal amount of Revolving Credit Loans then outstanding (including any amounts which Agent or any Lender may have paid for the account of Co-Borrowers pursuant to any of the Loan
Documents and which have not been reimbursed by Co-Borrowers), the LC Amount and any reserves, without duplication, is subtracted from the Borrowing Base. If the amount outstanding is equal to or greater than the Borrowing Base, Availability is $0.

 Bank – Bank of America, N.A. and/or Fleet National Bank. 
 Base Rate – the rate of interest announced or quoted by Bank from time to time as its prime rate for commercial loans, whether or not
such rate is the lowest rate charged by Bank to its most preferred borrowers; and, if such prime rate for commercial loans is discontinued by Bank as a standard, a comparable reference rate designated by Bank as a substitute therefor shall be the
Base Rate. 
 Base Rate Portion or Base Rate Revolving Portion – that portion of the Revolving Loans that is not subject to
a LIBOR Option. 
 Board Change of Control – as defined in the definition of Change of Control. 
 Borrowing Base – as at any date of determination thereof, an amount equal to the lesser of: 
 (i) The Revolving Credit Maximum Amount; or 
 (ii) an amount equal to the sum (such sum the “Collateral Borrowing Base”) of: 
 (a) the sum of
(x) eighty-five percent (85%) of the net amount of Eligible Accounts (other than Eligible Accounts with Dating Terms) outstanding at such date, plus (y) the lesser of eighty-five percent (85%) of the net amount of Eligible
Accounts with Dating Terms outstanding at such date and Ten Million Dollars ($10,000,000); 
 PLUS 
 (b) the lesser of (1) Fifty Million Dollars ($50,000,000); or (2) the sum of (x) the Inventory Advance Percentage of the
value of Eligible Inventory at such date calculated on the basis of the lower of cost or market with the cost of raw materials and finished goods calculated on a first-in, first-out basis; 
  

 A-3 

 PLUS 
 (c) an amount (the “FACC”) equal to the Fixed Asset Maximum Amount. 
 For purposes hereof, the net
amount of Eligible Accounts at any time shall be the face amount of such Eligible Accounts less any and all returns, rebates, discounts (which may, at Agent’s option, be calculated on shortest terms), credits, allowances or excise taxes of any
nature at any time issued, owing, claimed, granted, outstanding or payable in connection with such Accounts at such time. Agent and Lenders agree that Accounts derived from sales on items of “FOB Seller’s (Borrower’s) plant” (or
the equivalent) may be included within Eligible Accounts from the date of any such sale. 
 Borrowing Base Certificate – a
certificate by a responsible officer of Borrower, on its own behalf and on behalf of each other Borrower, substantially in the form of Exhibit 8.1.4 (or another form acceptable to Agent) setting forth the calculation of the Borrowing
Base, including a calculation of each component thereof, all in such detail as shall be satisfactory to Agent. All calculations of the Borrowing Base in connection with the preparation of any Borrowing Base Certificate shall originally be made by
Borrower and certified to Agent; provided, that Agent shall have the right to review and adjust, in the exercise of its credit judgment, any such calculation after giving notice thereof to Borrower, (1) to reflect its reasonable estimate
of declines in value of any of the Collateral described therein, and (2) to the extent that Agent determines that such calculation is not in accordance with this Agreement. 
 Business Day – any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the State of Wisconsin or the
State of Illinois or is a day on which banking institutions located in either of such states are closed. 
 Capital
Expenditures – expenditures made or liabilities incurred for the acquisition of any fixed assets or improvements, replacements, substitutions or additions thereto which have a useful life of more than one year, including the total
principal portion of Capitalized Lease Obligations. 
 Capitalized Lease Obligation – any Indebtedness represented by
obligations under a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP. 
 Change of
Control - means the occurrence of any of the following events: (i) all or substantially all of Borrower’s assets, on a consolidated basis, are sold as an entirety to any Person or related group of Persons or there shall be consummated
any consolidation or merger of Borrower (A) in which Borrower is not the continuing or surviving company (other than a consolidation or merger with a wholly owned Subsidiary in which all shares of Common Stock outstanding immediately prior to
the effectiveness thereof are changed into or exchanged for the same consideration) or (B) pursuant to which the Common Stock would be converted into cash, securities or other property, in any case, other than a sale of assets or consolidation
or merger of Borrower in which the holders of the Common Stock immediately prior to the sale of assets or consolidation or merger have, directly or indirectly, at least a majority of the Common Stock of the transferee or continuing or surviving
company immediately after such sale of assets or consolidation or merger, (ii) any “person”(as such term is used in Sections 13(d) and 14(d) of the 

  

 A-4 

 
Exchange Act) other than any such person existing as of the Closing Date, is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 of the
Exchange Act provided that such person shall be deemed to have “beneficial ownership” of all shares that such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time),
directly or indirectly, of more than 35% of the total voting power of the outstanding voting securities of Borrower, or (iii) other than in connection with the election of new directors at Borrower’s 2006 Annual Stockholders Meeting, which
new directors have been disclosed to Agent and Lenders, during any period of six consecutive months, individuals who at the beginning of such period constituted the Board cease for any reason to constitute a majority of the Board of Directors of
Borrower then in office. A Change of Control resulting from the circumstances described in clause (iii) above is referred to as a “Board Change of Control.” 
 Closing Date – the date on which all of the conditions precedent in Section 9 of the Agreement are satisfied or waived. 

Collateral – all of the Property and interests in Property described in Section 5 of the Agreement, and all other Property and
interests in Property that now or hereafter secure the payment and performance of any of the Obligations. 
 Collateral Borrowing
Base – as defined in the definition of Borrowing Base. 
 Commitment and Acceptance Agreement – a commitment and
acceptance agreement in form and content reasonably acceptable to Agent pursuant to which a Person undertakes to become a Lender under this Agreement with the Revolving Loan Commitment provided for therein as permitted pursuant to the terms of this
Agreement. 
 Common Stock – means (i) the Common Stock, $.01 par value of Borrower, (ii) the Class B Common Stock and
(iii) the other class of capital stock of Borrower hereafter authorized that is not limited to a fixed sum or percentage of par or stated or liquidation value with respect to the rights of the holders thereof to participate in dividends or in
the distribution of assets upon any liquidation, dissolution or winding up of Borrower. 
 Compliance Certificate – as defined in
subsection 8.1.3 of the Agreement. 
 Computer Hardware and Software – all of any Co-Borrower’s rights (including
rights as licensee and lessee) with respect to (i) computer and other electronic data processing hardware, including all integrated computer systems, central processing units, memory units, display terminals, printers, computer elements, card
readers, tape drives, hard and soft disk drives, cables, electrical supply hardware, generators, power equalizers, accessories, peripheral devices and other related computer hardware; (ii) all Software and all software programs designed for use
on the computers and electronic data processing hardware described in clause (i) above, including all operating system software, utilities and application programs in any form (source code and object code in magnetic tape, disk or hard copy
format or any other listings whatsoever); (iii) any firmware associated with any of the foregoing; and (iv) any documentation for hardware, Software and firmware described in clauses (i), (ii) and (iii) above, including flow
charts, logic diagrams, manuals, specifications, training materials, charts and pseudo codes. 
  

 A-5 

 Consolidated – the consolidation in accordance with GAAP of the accounts or other items
as to which such term applies or as the context may require. 
 Contract Right – any right of any Co-Borrower to payment under a
contract for the sale or lease of goods or the rendering of services, which right is at the time not yet earned by performance. 
 Default – an event or condition the occurrence of which would, with the lapse of time or the giving of notice, or both, become an Event of Default. 
 Default Rate – as defined in subsection 2.1.2 of the Agreement. 
 Defaulting Lender – as defined in Section 12.21. 
 Derivative Obligations – every obligation of a Person under any forward contract, futures contract, exchange contract, swap, option or other financing agreement or arrangement (including, without
limitation, caps, floors, collars and similar agreement), the value of which is dependent upon interest rates, currency exchange rates, commodities or other indices. 
 Distribution – in respect of any Person means and includes: (i) the payment of any dividends or other distributions on Securities (except distributions in such Securities) and (ii) the
redemption or acquisition of Securities of such Person, as the case may be, unless made contemporaneously from the net proceeds of the sale of Securities. 
 Dominion Account – a special bank account or accounts of Agent established by a Co-Borrower pursuant to subsection 6.2.4 of the Agreement at banks selected by Co-Borrowers, but acceptable to
Agent in its discretion, and over which Agent shall have sole and exclusive access and control for withdrawal purposes. 
 EBITDA
– as defined in Exhibit 8.3 of the Agreement. 
 Eligible Account – an Account arising in the ordinary course of
the business of a Co-Borrower, on its own behalf and on behalf of each other Co-Borrower, from the sale of goods or rendition of services which Agent, in its reasonable judgment, deems to be an Eligible Account. Without limiting the generality of
the foregoing, no Account shall be an Eligible Account if: 
 (i) it arises out of a sale made by a Co-Borrower to a Subsidiary or an
Affiliate of a Co-Borrower or to a Person controlled by an Affiliate of a Co-Borrower; or 
 (ii) in respect to Accounts without dating
terms, it is unpaid for more than 60 days after the original due date shown on the invoice; or 
 (iii) in respect to Accounts without dating
terms, it is due or unpaid more than 90 days after the original invoice date; or 
 (iv) in respect to Accounts with dating terms, it is due
or unpaid for more than 210 days after the original invoice date; provided, however, that invoices qualifying for dating 

  

 A-6 

 
hereunder cannot be issued prior to December 15 or after March 15 of the subsequent year, and any invoice issued with dating terms must be paid on
or before the next May 31; 
 (v) 25% or more of the Accounts from the relevant Account Debtor are not deemed Eligible Accounts
hereunder; or 
 (vi) the total unpaid Accounts of the relevant Account Debtor exceed 20% of the net amount of all Eligible Accounts, to the
extent of such excess; or 
 (vii) any covenant, representation or warranty contained in the Agreement with respect to such Account has been
breached; or 
 (viii) the relevant Account Debtor is also a Co-Borrower’s creditor or supplier, or the Account Debtor has disputed
liability with respect to such Account, or the Account Debtor has made any claim with respect to any other Account due from such Account Debtor to Co-Borrower, or the Account otherwise is or may become subject to any right of setoff by the Account
Debtor; or 
 (ix) the Account Debtor has commenced a voluntary case under the federal bankruptcy laws, as now constituted or hereafter
amended, or made an assignment for the benefit of creditors, or a decree or order for relief has been entered by a court having jurisdiction in the premises in respect of the Account Debtor in an involuntary case under the federal bankruptcy laws,
as now constituted or hereafter amended, or any other petition or other application for relief under the federal bankruptcy laws has been filed against the Account Debtor, or if the Account Debtor has failed, suspended business, ceased to be
Solvent, or consented to or suffered a receiver, trustee, liquidator or custodian to be appointed for it or for all or a significant portion of its assets or affairs; or 
 (x) it arises from a sale to an Account Debtor outside the United States, Ontario, Canada or any other province of Canada in which the Personal Property Security Act has been adopted in substantially the same form as
currently in effect in Ontario, unless the sale is on letter of credit, guaranty or acceptance terms in each case acceptable to Agent in its sole discretion; or 
 (xi) it arises from a sale to the Account Debtor on a bill-and-hold, guaranteed sale, sale-or-return, sale-on-approval, consignment or any other repurchase or return basis; or 
 (xii) the Account Debtor is the United States of America or any department, agency or instrumentality thereof, unless Borrower assigns its right to
payment of such Account to Agent, for its benefit and the ratable benefit of Lenders, in a manner satisfactory to Agent so as to comply with the Assignment of Claims Act of 1940 (31 U.S.C. §203 et seq., as amended); or 
 (xiii) the Account is subject to a Lien other than a Permitted Lien; or 
 (xiv) the goods giving rise to such Account have not been delivered to and accepted by the Account Debtor or the services giving rise to such Account have not been performed by a Co-Borrower and accepted by the
Account Debtor or the Account otherwise does not represent a final sale; or 
  

 A-7 

 (xv) the Account is evidenced by chattel paper or an instrument of any kind, or has been reduced to
judgment; or 
 (xvi) a Co-Borrower has made any agreement with the Account Debtor for any deduction therefrom, except for discounts or
allowances which are made in the ordinary course of business for prompt payment and which discounts or allowances are reflected in the calculation of the face value of each invoice related to such Account; or 
 (xvii) the Account is not at all times subject to Agent’s duly perfected, first priority security interest and no other Lien except a Permitted
Lien; or 
 (xviii) a Co-Borrower has made an agreement with the Account Debtor to extend the time of payment thereof. 
 Eligible Accounts with Dating Terms – any Eligible Account that does not satisfy the criteria of clauses (ii) or (iii) of the
definition of Eligible Accounts but does satisfy the criteria of clause (iv) of the definition of Eligible Accounts. 
 Eligible
Inventory – such Inventory of a Co-Borrower (other than packaging materials, supplies, consigned Inventory, ropes and reels) which Agent in its reasonable credit judgment deems to be Eligible Inventory. Without limiting the generality of
the foregoing, no Inventory shall be Eligible Inventory if: 
 (i) it is not raw materials or finished goods that is, in Agent’s
opinion, readily marketable in its current form; or 
 (ii) it is not in good, new and saleable condition; or 
 (iii) it is slow-moving, obsolete or unmerchantable; or 
 (iv) it does not meet all standards imposed by any governmental agency or authority; or 
 (v) it does not
conform in all respects to the warranties and representations set forth in the Agreement; or 
 (vi) it is not at all times subject to
Agent’s duly perfected, first priority security interest and no other Lien except a Permitted Lien; or 
 (vii) it is not situated at a
location that is either owned by a Co-Borrower or is subject to a landlord or bailee waiver reasonably acceptable to Agent and is otherwise in compliance with the Agreement or is in transit; or 
 (viii) it is not situated at a location in the United States of America. 
 Environmental Laws – all federal, state and local laws, rules, regulations, ordinances, orders and consent decrees relating to health, safety and environmental matters. 
  

 A-8 

 ERISA – the Employee Retirement Income Security Act of 1974, as amended, and any
successor statute, and all rules and regulations from time to time promulgated thereunder. 
 ETI – Extrusion Technologies, Inc.,
a former Subsidiary of Borrower that has been either (x) merged into Borrower or (y) dissolved and whose assets were distributed to Borrower. 
 Event of Default – as defined in Section 10.1 of the Agreement. 
 FACC –
shall have the meaning contained in the definition of Borrowing Base. 
 Fixed Asset Maximum Amount – as of any date Eighteen
Million Dollars ($18,000,000) reduced by Eight Hundred Forty-Six Thousand One Hundred Fifty-Four Dollars ($846,154.00) on each March 31, June 30, September 30 and December 31 commencing March 31, 2006; provided that
the Fixed Asset Maximum Amount shall be further reduced from time to time as provided in Section 3.3.1. 
 Fixed Charge Coverage
Ratio – as defined in Exhibit 8.3 of the Agreement. 
 Funded Debt – (i) Indebtedness arising from the lending
of money by any Person to Borrower or any of its Subsidiaries; (ii) Indebtedness, whether or not in any such case arising form the lending by any Person of money to Borrower or any of its Subsidiaries (A) which is represented by notes
payable or drafts accepted that evidence extensions of credit, (B) which constitutes obligations evidenced by bonds, debentures, notes or similar instruments, or (C) upon which interest charges are customarily paid (other than accounts
payable) or that was issued or assumed as full or partial payment for property; (iii) Indebtedness that constitutes a Capitalized Lease Obligation; (iv) reimbursement obligations with respect to letters of credit or guaranties of letters
of credit; and (v) Indebtedness of Borrower or any of its Subsidiaries under any guaranty of obligations that would constitute Funded Debt under clauses (i) through (iv) hereof if owed directly by Borrower or any of its Subsidiaries.

 GAAP – generally accepted accounting principles in the United States of America in effect from time to time. 

Indebtedness – as applied to a Person means, without duplication: 
 (i) all items which in accordance with GAAP would be included in determining total liabilities as shown on the liability side of a balance sheet of such
Person as at the date as of which Indebtedness is to be determined, including, without limitation, Capitalized Lease Obligations; 
 (ii) all
obligations of other Persons which such Person has guaranteed; 
 (iii) all reimbursement obligations in connection with letters of credit or
letter of credit guaranties issued for the account of such Person; 
 (iv) Derivative Obligations; and 
 (v) in the case of Co-Borrowers (without duplication), the Obligations. 
  

 A-9 

 Intellectual Property – means: all past, present and future: trade secrets, know-how and
other proprietary information; trademarks, internet domain names, service marks, trade dress, trade names, business names, designs, logos, slogans (and all translations, adaptations, derivations and combinations of the foregoing) indicia and other
source and/or business identifiers, and the goodwill of the business relating thereto and all registrations or applications for registrations which have heretofore been or may hereafter be issued thereon throughout the world; copyrights (including
copyrights for computer programs) and copyright registrations or applications for registrations which have heretofore been or may hereafter be issued throughout the world and all tangible property embodying the copyrights, unpatented inventions
(whether or not patentable); patent applications and patents; industrial design applications and registered industrial designs; license agreements related to any of the foregoing and income therefrom; books, records, writings, computer tapes or
disks, flow diagrams, specification sheets, computer software, source codes, object codes, executable code, data, databases and other physical manifestations, embodiments or incorporations of any of the foregoing; the right to sue for all past,
present and future infringements of any of the foregoing; all other intellectual property; and all common law and other rights throughout the world in and to all of the foregoing. 
 Interest Period – as applicable to any LIBOR Portion, a period commencing on the date such LIBOR Portion is advanced, continued or
converted, and ending on the date which is one (1) month, two (2) months, three (3) months, or six (6) months later, as may then be requested by Borrower; provided that (i) any Interest Period which would otherwise
end on a day which is not a Business Day shall end in the next preceding or succeeding Business Day as is Agent’s custom in the market to which such LIBOR Portion relates; (ii) there remains a minimum of one (1) month, two
(2) months, three (3) months or six (6) months (depending upon which Interest Period Borrower selects) in the Term, unless Co-Borrowers, Agent and Lenders have agreed to an extension of the Term beyond the expiration of the Interest
Period in question; and (iii) all Interest Periods of the same duration which commence on the same date shall end on the same date; provided that Co-Borrowers shall not be required to pay double interest even though the preceding
Interest Period ends and all new Interest Period begins on the same day. 
 Inventory Advance Percentage – shall mean sixty
percent (60%) between and including each December 1 and April 30 within the Term and fifty-five percent (55%) between and including each May 1 and November 30 within the Term. 
 LC Amount – at any time, the aggregate undrawn face amount of all Letters of Credit and LC Guaranties then outstanding plus the
aggregate amount of all unreimbursed drawings under a Letter of Credit or LC Guaranty. 
 LC Guaranty – any guaranty pursuant to
which Agent or any affiliate of Agent shall guaranty the payment or performance by Co-Borrowers of their or any one of their reimbursement obligation under any Letter of Credit. 
 LC Obligations – Any Obligations that arise from any draw against any Letter of Credit or against any Letter of Credit supported by an
LC Guaranty. 
 Lessor – as defined in the definition of Sale and Leaseback Documents. 
  

 A-10 

 Letter of Credit – any standby or documentary letter of credit issued by Agent or any
Affiliate of Agent for the account of Co-Borrowers or any one of them. 
 LIBOR – as applicable to any LIBOR Portion, for
the applicable Interest Period, the rate per annum (rounded upward, if necessary, to the nearest 1/8 of one percent) as determined on the basis of the offered rates for deposits in U.S. dollars, for a period of time comparable to such Interest
Period which appears on the Telerate page 3750 as of 11:00 a.m. (London time) on the day that is two (2) London Banking Days preceding the first day of such Interest Period; provided, however, if the rate described above
does not appear on the Telerate System on any applicable interest determination date, the LIBOR shall be the rate (rounded upwards as described above, if necessary) for deposits in U.S. dollars for a period substantially equal to the Interest Period
on the Reuters Page ”LIBO” (or such other page as may replace the LIBO Page on that service for the purpose of displaying such rates), as of 11:00 a.m. (London Time), on the day that is two (2) London Banking Days
prior to the first day of such Interest Period. If both the Telerate and Reuters systems are unavailable, then the rate for that date will be determined on the basis of the offered rates for deposits in U.S. dollars for a period of time comparable
to such Interest Period which are offered by four (4) major banks in the London interbank market at approximately 11:00 a.m. (London time), on the day that is two (2) London Banking Days preceding the first day of such Interest Period
as selected by Agent. The principal London office of each of the major London banks so selected will be requested to provide a quotation of its U.S. dollar deposit offered rate. If at least two (2) such quotations are provided, the rate for
that date will be the arithmetic mean of the quotations. If fewer than two quotations are provided as requested, the rate for that date will be determined on the basis of the rates quoted for loans in U.S. dollars to leading European banks for a
period of time comparable to such Interest Period offered by major banks in New York City at approximately 11:00 a.m. (New York City time), on the day that is two (2) London Banking Days preceding the first day of such Interest Period. In
the event that Agent is unable to obtain any such quotation as provided above, it will be determined that LIBOR pursuant to an Interest Period cannot be determined. In the event that the Board of Governors of the Federal Reserve System shall impose
a Reserve Percentage with respect to LIBOR deposits of Bank then for any period during which such Reserve Percentage shall apply, LIBOR shall be equal to the amount determined above divided by an amount equal to 1 minus the Reserve Percentage.

 LIBOR Portion or LIBOR Revolving Portion – that portion of the Revolving Loans specified in a LIBOR Request (including
any portion of Revolving Loans which is being borrowed by Borrower concurrently with such LIBOR Request) which, as of the date of the LIBOR Request specifying such LIBOR Portion, has met the conditions for basing interest on the LIBOR in
Section 3.1 of the Agreement and the Interest Period of which has not terminated. 
 LIBOR Interest Payment Date – the
first day of each calendar month during and immediately following the applicable Interest Period. 
 LIBOR Option – the option
granted pursuant to Section 3.1 of the Agreement to have the intent on all or any portion of the principal amount of the Revolving Credit Loans based on LIBOR. 
  

 A-11 

 LIBOR Request – a notice in writing (or by telephone confirmed electronically or by
telecopy or other facsimile transmission on the same day as the telephone request) from Borrower to Agent requesting that interest on a Revolving Credit Loan be based on the LIBOR, specifying: (i) the first day of the Interest Period (which
shall be a Business Day); (ii) the length of the Interest Period; (iii) whether the LIBOR Portion is a new Loan, a conversion of a Base Rate Portion, or a continuation of a LIBOR Portion, and (iv) the dollar amount of the LIBOR
Portion, which shall be in an amount not less than $1,000,000 or an integral multiple of $100,000 in excess thereof. 
 Lien – any interest in Property securing an obligation owed to, or a claim by, a Person other than the owner of the Property, whether such interest is based on common law, statute or contract. The term “Lien”
shall also include rights of seller under conditional sales contracts or title retention agreements, reservations, exceptions, encroachments, easements, rights-of-way, covenants, conditions, restrictions, leases and other title exceptions and
encumbrances affecting Property. For the purpose of the Agreement, a Co-Borrower shall be deemed to be the owner of any Property which it has acquired or holds subject to a conditional sale agreement or other arrangement pursuant to which title to
the Property has been retained by or vested in some other Person for security purposes. 
 Loan Account – the loan account
established on the books of Agent pursuant to Section 3.6 of the Agreement. 
 Loan Commitment – with respect to any
Lender, the amount of such Lender’s Revolving Loan Commitment. 
 Loan Documents – the Agreement, the Other Agreements
and the Security Documents. 
 Loans – all loans and advances of any kind made by Agent, any Lender, or any Affiliate of
Agent or any Lender, pursuant to the Agreement. 
 London Banking Day – any date on which commercial banks are open for
business in London, England. 
 Majority Lenders – as of any date, Lenders holding 66-2/3% of the Revolving Loan Commitments
determined on a combined basis and following the termination of the Revolving Loan Commitments, Lenders holding 66-2/3% or more of the outstanding Loans, LC Amounts and LC Obligations not yet reimbursed by Co-Borrowers or funded with a Revolving
Credit Loan; provided, that (i) in each case, if there are 2 or more Lenders with outstanding Loans, LC Amounts, unfunded and unreimbursed LC Obligations or Revolving Loan Commitments, at least 2 Lenders shall be required to constitute
Majority Lenders; (ii) if there are 2 or fewer Lenders with outstanding Loans, LC Amounts, unfunded and unreimbursed LC Obligations or Revolving Loan Commitments, then all Lenders shall be required to constitute Majority Lenders; and
(iii) prior to termination of the Revolving Loan Commitments, if any Lender breaches its obligation to fund any requested Revolving Credit Loan, for so long as such breach exists, its voting rights hereunder shall be calculated with reference
to its outstanding Loans, LC Amounts and unfunded and unreimbursed LC Obligations, rather than its Revolving Loan Commitment. 
  

 A-12 

 Material Adverse Effect – (i) a material adverse effect on the business, condition
(financial or otherwise), operation, performance or properties of Co-Borrowers, (ii) a material adverse effect on the rights and remedies of Agent or Lenders under the Loan Documents, or (iii) the material impairment of the ability of
Borrower or any of its Subsidiaries to perform its obligations hereunder or under any Loan Document. 
 Medallion Note – the Loan
Agreement dated January 15, 2004 between USPoly and Medallion Capital, Inc. as amended from time to time. 
 Mid-States –
Mid-States Plastics, Inc., a former Subsidiary of Borrower that has been either (x) merged into Borrower or (y) dissolved and whose assets were distributed to Borrower or sold in exchange for consideration paid to Borrower. 
 Money Borrowed – means, (i) Indebtedness arising from the lending of money by any Person to Borrower or any of its Subsidiaries;
(ii) Indebtedness, whether or not in any such case arising from the lending by any Person of money to Borrower or any of its Subsidiaries, (1) which is represented by notes payable or drafts accepted that evidence extensions of credit,
(2) which constitutes obligations evidenced by bonds, debentures, notes or similar instruments, or (3) upon which interest charges are customarily paid (other than accounts payable) or that was issued or assumed as full or partial payment
for Property; (iii) Indebtedness that constitutes a Capitalized Lease Obligation; (iv) reimbursement obligations with respect to letters of credit or guaranties of letters of credit and (v) Indebtedness of Borrower or any of its
Subsidiaries under any guaranty of obligations that would constitute Indebtedness for Money Borrowed under clauses (i) through (iii) hereof, if owed directly by Borrower or any of its Subsidiaries. Money Borrowed shall not include trade
payables or accrued expenses. 
 Mortgages – the mortgages, deeds of trust, security deeds and/or leasehold mortgages
executed prior to the Closing Date by a Co-Borrower (or a predecessor-in-interest to Borrower by merger) granting in favor of Agent as security for the Obligations, a Lien upon the real Property owned by a Co-Borrower and located in or at
(i) Cameron Park, California; (ii) Buckhannon, West Virginia; (iii) Columbia, Missouri; and (iv) Perris, California. 
 Multiemployer Plan – has the meaning set forth in Section 4001(a)(3) of ERISA. 
 New Mortgages –
as defined in Section 5.4 of the Agreement. 
 Net Appraised Fair Market Value – with respect to any of any
Co-Borrower’s real Property subject to a Mortgage, the amount estimated to be realized, net of reasonable sale expenses (as estimated by Agent), in a sale of such real Property by a willing buyer to a willing seller, such amount to be
determined by an appraisal of such real Property conducted by Hilco Appraisal Services or another qualified company selected by Agent in its reasonable discretion as provided in Section 2.10 of the Agreement. 
 Net Appraised Orderly Liquidation Value – with respect to any item of Collateral in which Agent for its benefit and the benefit of Lenders
has a first perfected security interest (subject to Permitted Liens), the amount estimated to be recoverable in the orderly liquidation of such item of Collateral over a three month period with respect to Inventory or a six month period with respect
to Equipment or any other item of such Collateral, net of liquidation expenses (as 

  

 A-13 

 
estimated by Agent), such amount to be determined by an appraisal of such item of Collateral conducted by Hilco Appraisal Services or another qualified
company selected by Agent in its reasonable discretion as provided in Section 2.10 of the Agreement. 
 Notes – the
Revolving Notes. 
 Obligations – all Loans, all LC Obligations and all other advances, debts, liabilities, obligations,
covenants and duties, together with all interest, fees and other charges thereon, owing, arising, due or payable from Co-Borrowers to Agent, for its own benefit, from Co-Borrowers or any one of them to Agent for the benefit of any Lender, from
Co-Borrowers or any one of them to any Lender or from Co-Borrowers or any one of them to Bank or any other Affiliate of Agent, of any kind or nature, present or future, whether or not evidenced by any note, guaranty or other instrument, arising
under the Agreement or any of the other Loan Documents, whether direct or indirect (including those acquired by assignment), absolute or contingent, primary or secondary, due or to become due, now existing or hereafter arising and however acquired
and any Product Obligations owing to Agent, any Lender, Bank or any Affiliate of Bank or Agent. 
 Organizational
I.D. Number – with respect to any Person, the organizational identification number assigned to such Person by the applicable governmental unit or agency of the jurisdiction of organization of such Person. 
 Other Agreements – any and all agreements, instruments and documents (other than the Agreement and the Security Documents), heretofore,
now or hereafter executed by Co-Borrowers, any Subsidiary of Borrower or any other third party and delivered to Agent or any Lender in respect of the transactions contemplated by the Agreement. 
 Overadvance – as defined in subsection 1.1.2 of the Agreement. 
 Patent Assignment – (x) the Amended and Restated Patent Security Agreement executed by Borrower on or about September 30, 1999 in
favor of Agent and by which Borrower assigned to Agent and granted to Agent a security interest in, as security for all of the Obligations, all of Borrower’s rights, title and interest in and to all of its patents, as the same may be amended
from time to time, (y) the Patent Security Agreements executed by ETI and Mid-States on or about March 14, 2003 in favor of Agent and by which Mid-States and ETI assigned to Agent and granted to Agent a security interest in, as security
for all of the Obligations, all of Mid-States’ and ETI’s rights, title and interest in and to all of its patents, as the same may be amended from time to time and (z) the Patent Security Agreements executed by USPoly on or about the
Closing Date in favor of Agent and by which USPoly has assigned to Agent and granted to Agent a security interest in, as security for all of the Obligations, all of USPoly’s rights, title and interest in and to all of its patents, as the same
may be amended from time to time. 
 Permitted Acquisitions – any acquisition(s) by a Co-Borrower of all or substantially
all of the assets or outstanding capital stock or other ownership interests of a Person, or an operating division of a Person or a merger of a Person with a Co-Borrower, which in either case, constitutes a business unit so long as each of the
following conditions precedent (collectively, the “Acquisition Conditions”) have been fulfilled to the satisfaction of Agent: (i) no Default or 

  

 A-14 

 
Event of Default shall have occurred and be continuing at the time of such acquisition or would occur as a result thereof; (ii) the business unit being
acquired (the “Target”) is primarily located in the United States of America and is in the same or related line of business as a Co-Borrower; (iii) if the acquisition in question is not an asset acquisition, Borrowers shall require
Target to comply with the provisions of Section 8.1.8 or to become an additional Co-Borrower hereunder, or if the acquisition in question is an asset acquisition, the applicable Co-Borrower shall have executed such financing statements and
other collateral documents as reasonably requested by Agent to grant to Agent a perfected security interest subject only to Permitted Liens in substantially all of the acquired assets; (iv) Availability on an average pro forma basis after
giving effect to the acquisition in question for the 60 days immediately prior to the closing date of such acquisition and immediately after the closing of such acquisition equals or exceeds $30,000,000; (v) Suppressed Availability on an
average pro forma basis after giving effect to the acquisition in question for the 60 days immediately prior to the closing date of such acquisition and immediately after the closing of such acquisition equals or exceeds $40,000,000; (vi) the
Fixed Charge Coverage Ratio shall be greater than or equal to 1.25 to 1 (x) for the twelve-month period immediately preceding the making of such acquisition and (y) on a pro forma basis for the twelve-month period following the making of
such acquisition, after giving effect to the making of such acquisition, such pro forma calculation to be demonstrated to Agent and to be reasonably acceptable to Agent in its reasonable credit judgment based on projections prepared using reasonable
assumptions by Borrower; (vii) all conditions precedent to the consummation of the transactions relating to such acquisition shall have been satisfied in all material respects; and (viii) Agent shall have received a copy of the purchase
agreement (or substantially final draft) with respect to such acquisition in question, certified as true and correct by Borrower and such other agreements, documents, and instruments as Agent may request in its reasonable credit judgment. No Account
or piece of Inventory, Equipment or real Property acquired in a Permitted Acquisition or a Permitted Limited Acquisition shall be included within Eligible Accounts, Eligible Inventory or within the appraised value of Co-Borrowers’ Equipment or
real Property until Agent has conducted an audit and/or appraisal of such Accounts, Inventory, Equipment or real Property and the results of such audit and/or appraisal are satisfactory to Agent in its reasonable discretion. 
 Permitted Distributions – any Distribution so long as each of the following conditions precedent (collectively, the “Permitted
Distribution Conditions”) has been fulfilled to the satisfaction of Agent: (i) no Default or Event of Default shall have occurred and be continuing at the time of such Distribution or would occur as a result thereof; (ii) Availability
on an average pro forma basis after giving effect to the Distribution in question for the 60 days immediately prior to the making of such Distribution and immediately after the making of such Distribution equals or exceeds $30,000,000;
(iii) Suppressed Availability on an average pro forma basis after giving effect to the Distribution in question for the 60 days immediately prior to the making of such Distribution and immediately after the making of such Distribution equals or
exceeds $40,000,000; (iv) the Fixed Charge Coverage Ratio shall be greater than or equal to 1.25 to 1 (x) for the twelve-month period immediately preceding the making of such Distribution and (y) on a pro forma basis for the
twelve-month period following the making of such Distribution, after giving effect to the making of such Distribution, such pro forma calculation to be demonstrated to Agent and to be reasonably acceptable to Agent in its reasonable credit judgment
based on projections prepared using reasonable assumptions by Borrowers; and (v) the aggregate amount of any such Distributions do not exceed $30,000,000 within any twelve month period. 
  

 A-15 

 Permitted Indebtedness – any Indebtedness incurred by a Borrower so long as each of the
following conditions precedent (collectively, the “Permitted Indebtedness Conditions”) has been fulfilled to the satisfaction of Agent: (i) no Default or Event of Default shall have occurred and be continuing at the time of the
incurrence of such Indebtedness or would occur as a result thereof; (ii) Availability on an average pro forma basis after giving effect to the incurrence of such Indebtedness in question for the 60 days immediately prior to the incurrence of
such Indebtedness and immediately after the incurrence of such Indebtedness equals or exceeds $20,000,000; (iii) the Fixed Charge Coverage Ratio shall be greater than or equal to 1.25 to 1 (x) for the twelve-month period immediately
preceding the incurrence of such Indebtedness and (y) on a pro forma basis for the twelve-month period following the incurrence of such Indebtedness, after giving effect to the incurrence of such Indebtedness, such pro forma calculation to be
demonstrated to Agent and to be reasonably acceptable to Agent in its reasonable credit judgment based on projections prepared using reasonable assumptions by Borrowers; (iv) Agent and the holders of any such Permitted Indebtedness shall have
entered into such intercreditor agreements as may be reasonably requested by Agent or Majority Lenders; and (v) the aggregate principal amount of such Permitted Indebtedness does not exceed at any time $10,000,000. 
 Permitted Liens – any Lien of a kind specified in subsection 8.2.5 of the Agreement. 
 Permitted Limited Acquisitions – any acquisition by a Borrower of all or substantially all of the assets or capital stock or other ownership
interests of a Person, or an operating division of a Person or a merger of a Person with a Borrower, which, in either case, consists of a business unit which satisfies items (i), (iii), (iv), (v), (vi), (vii) and (viii) of the definition
of Permitted Acquisitions (but not condition (ii)) and so long as the aggregate purchase price (including, without limitation, assumed Indebtedness) paid (x) in connection with any one such acquisition does not exceed $5,000,000 and
(y) in connection with all such acquisitions consummated within the Term does not exceed $10,000,000. 
 Permitted Purchase Money
Indebtedness – Purchase Money Indebtedness of Co-Borrowers incurred after the date hereof which is secured by a Purchase Money Lien and the principal amount of which, when aggregated with the principal amount of all other such
Indebtedness and Capitalized Lease Obligations of Borrower and its Subsidiaries at the time outstanding, does not exceed $1,250,000. For the purposes of this definition, the principal amount of any Purchase Money Indebtedness consisting of
capitalized leases (as opposed to operating leases) shall be computed as a Capitalized Lease Obligation. 
 Person – an
individual, partnership, corporation, limited liability company, joint stock company, land trust, business trust, or unincorporated organization, or a government or agency or political subdivision thereof. 
 Plan – an employee benefit plan now or hereafter maintained for employees of Borrower or any of its Subsidiaries that is covered by
Title IV of ERISA. 
  

 A-16 

 Pledge Agreement – the Pledge Agreement executed by Borrower on or about the Closing Date in
favor of Agent for its benefit and the ratable benefit of Lenders with respect to the outstanding equity Securities of USPoly, as such Pledge Agreement has or will be amended from time to time. 
 Poly Senior Debt – the Amended and Restated Credit and Security Agreement by and between USPoly, Uponor North America, Inc., Uponor Aldyl
Company, Inc., Uponor Aldyl Holding Company, LLC and Wells Fargo Business Credit, Inc., as of September 27, 2004 as amended from time to time. 
 Product Obligations – every obligation of any Co-Borrower under and in respect of any one or more of the following types of services or facilities extended to a Co-Borrower by Bank, Agent, any Lender or any Affiliate of
Bank or Agent: (i) credit cards, (ii) cash management or related services including the automatic clearing house transfer of funds for the account of a Co-Borrower pursuant to agreement or overdraft, (iii) cash management, including
controlled disbursement services and (iv) Derivative Obligations. 
 Projections – Borrower’s forecasted
Consolidated and consolidating (i) balance sheets, (ii) profit and loss statements, (iii) cash flow statements, and (iv) capitalization statements, all prepared on a consistent basis with the historical financial statements of
Borrower and its Subsidiaries, together with appropriate supporting details and a statement of underlying assumptions. 
 Property – any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible. 
 Public Filings – all filings required to be made by Borrower with the Securities and Exchange Commission from and after the Closing Date under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended. 
 Purchase Money Indebtedness – means and includes (i) Indebtedness (other than the Obligations) for the
payment of all or any part of the purchase price of any fixed assets, (ii) any Indebtedness (other than the Obligations) incurred at the time of or within 10 days prior to or after the acquisition of any fixed assets for the purpose of
financing all or any part of the purchase price thereof, and (iii) any renewals, extensions or refinancings thereof, but not any increases in the principal amounts thereof outstanding at the time. 
 Purchase Money Lien – a Lien upon fixed assets which secures Purchase Money Indebtedness, but only if such Lien shall at all times be
confined solely to the fixed assets the purchase price of which was financed through the incurrence of the Purchase Money Indebtedness secured by such Lien. 
 Rentals – as defined in subsection 8.2.18 of the Agreement. 
 Reportable
Event – any of the events set forth in Section 4043(c) of ERISA. 
  

 A-17 

 Reserve Percentage – the maximum aggregate reserve requirement (including all basic,
supplemental, marginal and other reserves) which is imposed on member banks of the Federal Reserve System against “Euro-currency Liabilities” as defined in Regulation D. 
 Restricted Investment – any investment made in cash or by delivery of Property to any Person, whether by acquisition of stock,
Indebtedness or other obligation or Security, or by loan, advance or capital contribution, or otherwise, or in any Property except the following: 
 (i) investments by Borrower, to the extent existing on the Closing Date, in one or more Subsidiaries of Borrower; 
 (ii) Property
to be used in the ordinary course of business; 
 (iii) Current Assets arising from the sale of goods and services in the ordinary course of
business of Borrower or any of its Subsidiaries; 
 (iv) investments in direct obligations of the United States of America, or any agency
thereof or obligations guaranteed by the United States of America, provided that such obligations mature within one year from the date of acquisition thereof; 
 (v) investments in certificates of deposit maturing within one year from the date of acquisition and fully insured by the Federal Deposit Insurance Corporation; 
 (vi) investments in commercial paper given the highest rating by a national credit rating agency and maturing not more than 270 days from the date of
creation thereof; 
 (vii) investments in money market, mutual or similar funds having assets in excess of $100,000,000 and the investments
of which are limited to investment grade securities; 
 (viii) investments existing on the date hereof and listed on Exhibit 8.2.12
hereto; and 
 (ix) investments otherwise expressly permitted pursuant to the Agreement. 
 Revolving Credit Loan – a Loan made by any Lender pursuant to Section 1.1 of the Agreement. 
 Revolving Credit Maximum Amount – the lesser of One Hundred Million Dollars ($100,000,000) or the aggregate amount of Revolving Loan
Commitments of all Lenders, as such amount may be increased pursuant to Section 2.13. 
 Revolving Loan Commitment –
with respect to any Lender, the amount of such Lender’s Revolving Loan Commitment pursuant to subsection 1.1.1 of the Agreement, as set forth below such Lender’s name on the signature page hereof or any Assignment and Acceptance
Agreement executed by such Lender. 
 Revolving Loan Percentage – with respect to each Lender, the percentage equal to the
quotient of such Lender’s Revolving Loan Commitment divided by the aggregate of all Revolving Loan Commitments. 
  

 A-18 

 Revolving Notes – the Revolving Notes to be executed by Co-Borrowers on or about the
Closing Date in favor of each Lender to evidence the Revolving Credit Loans, which shall be in the form of Exhibit 1.1 to the Agreement, together with any replacement or successor notes therefor. 
 Sale and Leaseback Documents – the Sale and Leaseback Agreement together with all exhibits, schedules and related documents. 
 Sale and Leaseback Transaction – the sale and leaseback by Borrower of its real Property located in Perris, California, Eugene, Oregon, West
Jordan, Utah and Tacoma, Washington pursuant to that certain Lease Agreement (“Sale and Leaseback Agreement”) dated as of February 28, 2002, by and between Borrower and PWE (Multi) 14-85, Inc. (“Lessor”). 
 Schedule of Accounts – as defined in subsection 6.2.1. 
 Security – all shares of stock, partnership interests, membership interests, membership units or other ownership interests in any other
Person and all warrants, options or other rights to acquire the same. 
 Security Documents – the Mortgages, any New
Mortgage, the Patent Assignment, the Pledge Agreement, the Trademark Assignment and all other instruments and agreement now or at any time hereafter securing the whole or any part of the Obligations. 
 Solvent – as to any Person, that such Person (i) owns Property whose fair saleable value is greater than the amount required to pay
all of such Person’s Indebtedness (including contingent debts), (ii) is able to pay all of its Indebtedness as such Indebtedness matures and (iii) has capital sufficient to carry on its business and transactions and all business and
transactions in which it is about to engage. 
 Spell Group – shall mean collectively William H. Spell, (ii) Harry W. Spell,
Richard W. Perkins, Bruce A. Richard, and any of their spouses or any family trust which is controlled by any of the foregoing. 
 Subordinated Debt – Indebtedness of Borrower or any Subsidiary of Borrower that is subordinated to the Obligations in a manner satisfactory to Agent and contains terms, including without limitation, payment terms,
satisfactory to Agent. 
 Subsidiary – any Person of which another Person owns, directly or indirectly through one or more
intermediaries, more than 50% of the Voting Stock at the time of determination. 
 Suppressed Availability – an amount equal
to the difference derived when the sum of the principal amount of Revolving Credit Loans then outstanding (including any amounts which Agent or any Lender may have paid for the account of Co-Borrowers pursuant to any of the Loan Documents and which
have not been reimbursed by Co-Borrowers), the LC Amount and any reserves, without duplication, is subtracted from the Collateral Borrowing Base. If the amount outstanding is equal to or greater than the Collateral Borrowing Base, Suppressed
Availability is $0. 
  

 A-19 

 Swingline Loans – as defined in subsection 1.1.4 of the Agreement. 
 Term – as defined in Section 4.1 of the Agreement. 
 Total Credit Facility – the lesser of One Hundred Million Dollars ($100,000,000) or the aggregate amount of Revolving Loan Commitments of all Lenders, as such amount may be increased pursuant to
Section 2.13. 
 Trademark Assignment- (x) the Amended and Restated Trademark Security Agreement executed by Borrower on or
about September 20, 1999 in favor of Agent and by which Borrower assigned to Agent, and granted to Agent a security interest in, as security for the Obligations all of Borrower’s rights, title and interest in and to all of its trademarks,
as the same may be amended from time to time, (y) the Trademark Security Agreements executed by ETI and Mid-States on or about March 14, 2003 in favor of Agent and by which Mid-States and ETI assigned to Agent, and granted to Agent a
security interest in, as security for the Obligations all of Mid-States’ and ETI’s rights, title and interest in and to all of its trademarks, as the same may be amended from time to time and (z) the Trademark Security Agreements
executed by USPoly on or about the Closing Date in favor of Agent and by which USPoly has assigned to Agent, and granted to Agent a security interest in, as security for the Obligations all of USPoly’s rights, title and interest in and to all
of its trademarks, as the same may be amended from time to time. 
 Type of Organization – with respect to any Person, the
kind or type of entity by which such Person is organized, such as a corporation or limited liability company. 
 UCC – the
Uniform Commercial Code as in effect in the State of Illinois on the date of this Agreement, as it may be amended or otherwise modified. 
 Unused Line Fee – as defined in Section 2.5 of the Agreement. 
 Voting Stock – Securities of
any class or classes of a corporation, limited partnership or limited liability company or any other entity the holders of which are ordinarily, in the absence of contingencies, entitled to vote with respect to the election of corporate directors
(or Persons performing similar functions). 
 Other Terms. All other terms contained in the Agreement shall have, when the
context so indicates, the meanings provided for by the UCC to the extent the same are used or defined therein. 
 Certain Matters of
Construction. The terms “herein”, “hereof” and “hereunder” and other words of similar import refer to the Agreement as a whole and not to any particular section, paragraph or subdivision. Any pronoun used shall
be deemed to cover all genders. The section titles, table of contents and list of exhibits appear as a matter of convenience only and shall not affect the interpretation of the Agreement. All references to statutes and related regulations shall
include any amendments of same and any successor statutes and regulations. All references to any of the Loan Documents shall include any and all modifications thereto and any and all extensions or renewals thereof. 
  

 A-20 

 LIST OF EXHIBITS AND SCHEDULES 
  

			
	Exhibit 1.1	    	Form of Revolving Note
	Exhibit 6.1.1	    	Business Locations
	Exhibit 7.1.1	    	Jurisdictions in which Borrower and each Subsidiary is Authorized to do Business
	Exhibit 7.1.4	    	Capital Structure of Borrower and each Subsidiary
	Exhibit 7.1.5	    	Names; Organization
	Exhibit 7.1.13	    	Surety Obligations
	Exhibit 7.1.14	    	Tax Identification Numbers of Subsidiaries
	Exhibit 7.1.15	    	Brokers’ Fees
	Exhibit 7.1.16	    	Patents, Trademarks, Copyrights and Licenses
	Exhibit 7.1.19	    	Contracts Restricting Right to Incur Debts
	Exhibit 7.1.20	    	Litigation
	Exhibit 7.1.22	    	Capitalized and Operating Leases
	Exhibit 7.1.23	    	Pension Plans
	Exhibit 7.1.25	    	Labor Relations
	Exhibit 8.1.3	    	Form of Compliance Certificate
	Exhibit 8.1.4	    	Form of Borrowing Base Certificate
	Exhibit 8.2.3	    	Existing Indebtedness
	Exhibit 8.2.5	    	Permitted Liens
	Exhibit 8.2.12	    	Permitted Investments
	Exhibit 8.3	    	Financial CovenantsIndenture

 Exhibit 4.1 
  

  
 Execution Copy 
  
 BROOKSTONE COMPANY, INC.

  
 AND EACH OF THE GUARANTORS PARTY HERETO 
  
 12.00% SECOND LIEN SENIOR SECURED NOTES DUE 2012 
  

  
 INDENTURE 
  
 Dated as of October 4, 2005 
  

  
 WELLS FARGO BANK, N.A. 
  
 Trustee 
  

  

  
 CROSS-REFERENCE TABLE*

  

					
	 Trust Indenture Act Section

	  	Indenture Section

	 310
	 	(a)(1)	  	7.10
	 	 	(a)(2)	  	7.10
	 	 	(a)(3)	  	N.A.
	 	 	(a)(4)	  	N.A.
	 	 	(a)(5)	  	7.10
	 	 	(b)	  	7.10
	 	 	(c)	  	N.A.
	 311
	 	(a)	  	7.11
	 	 	(b)	  	7.11
	 	 	(c)	  	N.A.
	 312
	 	(a)	  	2.05
	 	 	(b)	  	13.03
	 	 	(c)	  	13.03
	 313
	 	(a)	  	7.06
	 	 	(b)(1)	  	10.03
	 	 	(b)(2)	  	7.06; 7.07
	 	 	(c)	  	7.06; 10.03; 13.02
	 	 	(d)	  	7.06
	 314
	 	(a)	  	4.03;13.02; 13.05
	 	 	(b)	  	N.A.
	 	 	(c)(1)	  	13.04
	 	 	(c)(2)	  	13.04
	 	 	(c)(3)	  	N.A.
	 	 	(d)	  	10.04
	 	 	(e)	  	13.05
	 	 	(f)	  	N.A.
	 315
	 	(a)	  	7.01
	 	 	(b)	  	7.05; 13.02
	 	 	(c)	  	7.01
	 	 	(d)	  	7.01
	 	 	(e)	  	6.11
	 316
	 	(a) (last sentence)	  	2.09
	 	 	(a)(1)(A)	  	6.05
	 	 	(a)(1)(B)	  	6.04
	 	 	(a)(2)	  	N.A.
	 	 	(b)	  	6.07
	 	 	(c)	  	2.12
	 317
	 	(a)(1)	  	6.08
	 	 	(a)(2)	  	6.09
	 	 	(b)	  	2.04
	 318
	 	(a)	  	13.01
	 	 	(b)	  	N.A.
	 	 	(c)	  	13.01

  
 N.A. means not applicable. 

 

	*	This Cross Reference Table is not part of the Indenture. 

  
 TABLE OF CONTENTS 

 

					
	 	  	 	  	Page

	ARTICLE 1	  	 
	 DEFINITIONS AND INCORPORATION
 BY REFERENCE
	  	 
			
	 Section 1.01
	  	Definitions	  	1
	 Section 1.02
	  	Other Definitions	  	30
	 Section 1.03
	  	Incorporation by Reference of Trust Indenture Act	  	31
	 Section 1.04
	  	Rules of Construction	  	31
			
	 	  	ARTICLE 2	  	 
	 	  	THE NOTES	  	 
			
	 Section 2.01
	  	Form and Dating	  	32
	 Section 2.02
	  	Execution and Authentication	  	33
	 Section 2.03
	  	Registrar and Paying Agent	  	33
	 Section 2.04
	  	Paying Agent to Hold Money in Trust	  	33
	 Section 2.05
	  	Holder Lists	  	34
	 Section 2.06
	  	Transfer and Exchange	  	34
	 Section 2.07
	  	Replacement Notes	  	45
	 Section 2.08
	  	Outstanding Notes	  	46
	 Section 2.09
	  	Treasury Notes	  	46
	 Section 2.10
	  	Temporary Notes	  	46
	 Section 2.11
	  	Cancellation	  	47
	 Section 2.12
	  	Defaulted Interest	  	47
		
	ARTICLE 3	  	 
	REDEMPTION AND PREPAYMENT	  	 
			
	 Section 3.01
	  	Notices to Trustee	  	47
	 Section 3.02
	  	Selection of Notes to Be Redeemed or Purchased	  	47
	 Section 3.03
	  	Notice of Redemption	  	48
	 Section 3.04
	  	Effect of Notice of Redemption	  	49
	 Section 3.05
	  	Deposit of Redemption or Purchase Price	  	49
	 Section 3.06
	  	Notes Redeemed or Purchased in Part	  	49
	 Section 3.07
	  	Optional Redemption	  	49
	 Section 3.08
	  	Mandatory Redemption	  	50
	 Section 3.09
	  	Offer to Purchase by Application of Excess Proceeds	  	50
		
	ARTICLE 4	  	 
	COVENANTS	  	 
			
	 Section 4.01
	  	Payment of Notes	  	52
	 Section 4.02
	  	Maintenance of Office or Agency	  	52
	 Section 4.03
	  	Reports	  	53
	 Section 4.04
	  	Compliance Certificate	  	54
	 Section 4.05
	  	Taxes	  	54
	 Section 4.06
	  	Stay, Extension and Usury Laws	  	54
	 Section 4.07
	  	Restricted Payments	  	55
	 Section 4.08
	  	Dividend and Other Payment Restrictions Affecting Subsidiaries	  	58
	 Section 4.09
	  	Incurrence of Indebtedness and Issuance of Preferred Stock	  	59
	 Section 4.10
	  	Asset Sales	  	62

					
	 Section 4.11
	  	Transactions with Affiliates	  	63
	 Section 4.12
	  	Liens	  	65
	 Section 4.13
	  	Business Activities	  	65
	 Section 4.14
	  	Corporate Existence	  	65
	 Section 4.15
	  	Offer to Repurchase Upon Change of Control	  	65
	 Section 4.16
	  	Payments for Consent	  	67
	 Section 4.17
	  	Additional Note Guarantees	  	67
	 Section 4.18
	  	Designation of Restricted and Unrestricted Subsidiaries	  	67
		
	ARTICLE 5	  	 
	SUCCESSORS	  	 
			
	 Section 5.01
	  	Merger, Consolidation or Sale of Assets	  	68
	 Section 5.02
	  	Successor Corporation Substituted	  	70
		
	ARTICLE 6	  	 
	DEFAULTS AND REMEDIES	  	 
			
	 Section 6.01
	  	Events of Default	  	70
	 Section 6.02
	  	Acceleration	  	72
	 Section 6.03
	  	Other Remedies	  	73
	 Section 6.04
	  	Waiver of Past Defaults	  	73
	 Section 6.05
	  	Control by Majority	  	74
	 Section 6.06
	  	Limitation on Suits	  	74
	 Section 6.07
	  	Rights of Holders of Notes to Receive Payment	  	74
	 Section 6.08
	  	Collection Suit by Trustee	  	74
	 Section 6.09
	  	Trustee May File Proofs of Claim	  	74
	 Section 6.10
	  	Priorities	  	75
	 Section 6.11
	  	Undertaking for Costs	  	75
		
	ARTICLE 7	  	 
	TRUSTEE	  	 
			
	 Section 7.01
	  	Duties of Trustee	  	76
	 Section 7.02
	  	Rights of Trustee	  	76
	 Section 7.03
	  	Individual Rights of Trustee	  	77
	 Section 7.04
	  	Trustee’s Disclaimer	  	77
	 Section 7.05
	  	Notice of Defaults	  	78
	 Section 7.06
	  	Reports by Trustee to Holders of the Notes	  	78
	 Section 7.07
	  	Compensation and Indemnity	  	78
	 Section 7.08
	  	Replacement of Trustee	  	79
	 Section 7.09
	  	Successor Trustee by Merger, etc.	  	80
	 Section 7.10
	  	Eligibility; Disqualification	  	80
	 Section 7.11
	  	Preferential Collection of Claims Against Company	  	80
		
	ARTICLE 8	  	 
	LEGAL DEFEASANCE AND COVENANT DEFEASANCE	  	 
			
	 Section 8.01
	  	Option to Effect Legal Defeasance or Covenant Defeasance	  	80
	 Section 8.02
	  	Legal Defeasance and Discharge	  	80
	 Section 8.03
	  	Covenant Defeasance	  	81
	 Section 8.04
	  	Conditions to Legal or Covenant Defeasance	  	81
	 Section 8.05
	  	Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions	  	82
	 Section 8.06
	  	Repayment to Company	  	83

					
	 Section 8.07
	  	Reinstatement	  	83
		
	ARTICLE 9	  	 
	AMENDMENT, SUPPLEMENT AND WAIVER	  	 
			
	 Section 9.01
	  	Without Consent of Holders of Notes	  	84
	 Section 9.02
	  	With Consent of Holders of Notes	  	85
	 Section 9.03
	  	Compliance with Trust Indenture Act	  	86
	 Section 9.04
	  	Revocation and Effect of Consents	  	86
	 Section 9.05
	  	Notation on or Exchange of Notes	  	86
	 Section 9.06
	  	Trustee to Sign Amendments, etc.	  	87
		
	ARTICLE 10	  	 
	COLLATERAL AND SECURITY	  	 
			
	 Section 10.01
	  	Equal and Ratable Sharing of Collateral by Holders of Parity Lien Debt	  	87
	 Section 10.02
	  	Ranking of Parity Liens	  	87
	 Section 10.03
	  	Relative Rights	  	88
	 Section 10.04
	  	Compliance with Trust Indenture Act	  	88
	 Section 10.05
	  	Further Assurances; Insurance	  	89
	 Section 10.06
	  	Release of Liens in Respect of Notes	  	89
		
	ARTICLE 11	  	 
	NOTE GUARANTEES	  	 
			
	 Section 11.01
	  	Guarantee	  	90
	 Section 11.02
	  	Limitation on Guarantor Liability	  	91
	 Section 11.03
	  	Execution and Delivery of Note Guarantee	  	92
	 Section 11.04
	  	Guarantors May Consolidate, etc., on Certain Terms	  	92
	 Section 11.05
	  	Releases	  	93
		
	ARTICLE 12	  	 
	SATISFACTION AND DISCHARGE	  	 
			
	 Section 12.01
	  	Satisfaction and Discharge	  	94
	 Section 12.02
	  	Application of Trust Money	  	95
		
	ARTICLE 13	  	 
	MISCELLANEOUS	  	 
			
	 Section 13.01
	  	Trust Indenture Act Controls	  	95
	 Section 13.02
	  	Notices	  	95
	 Section 13.03
	  	Communication by Holders of Notes with Other Holders of Notes	  	96
	 Section 13.04
	  	Certificate and Opinion as to Conditions Precedent	  	96
	 Section 13.05
	  	Statements Required in Certificate or Opinion	  	97
	 Section 13.06
	  	Rules by Trustee and Agents	  	97
	 Section 13.07
	  	No Personal Liability of Directors, Officers, Employees and Stockholders	  	97
	 Section 13.08
	  	Governing Law	  	97
	 Section 13.09
	  	No Adverse Interpretation of Other Agreements	  	97
	 Section 13.10
	  	Successors	  	97
	 Section 13.11
	  	Severability	  	98
	 Section 13.12
	  	Counterpart Originals	  	98
	 Section 13.13
	  	Table of Contents, Headings, etc.	  	98

 EXHIBITS 
  

			
	 Exhibit A1
	  	FORM OF NOTE
		
	 Exhibit A2
	  	FORM OF REGULATION S TEMPORARY GLOBAL NOTE
		
	 Exhibit B
	  	FORM OF CERTIFICATE OF TRANSFER
		
	 Exhibit C
	  	FORM OF CERTIFICATE OF EXCHANGE
		
	 Exhibit D
	  	FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
		
	 Exhibit E
	  	FORM OF NOTATION OF GUARANTEE
		
	 Exhibit F
	  	FORM OF SUPPLEMENTAL INDENTURE
		
	 Exhibit G
	  	FORM OF INTERCREDITOR AGREEMENT
		
	 Exhibit H
	  	FORM OF SECURITY AGREEMENT
		
	 Exhibit I
	  	FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT
		
	 Exhibit J
	  	FORM OF COLLATERAL AGENCY AGREEMENT

 INDENTURE dated as of October 4, 2005 among Brookstone Company, Inc., a New Hampshire corporation,
the Guarantors (as defined) and Wells Fargo Bank, N.A., as trustee. 
  
 The Company, the Guarantors and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders (as defined) of the 12.00% Second Lien Senior Secured Notes due 2012 (the
“Notes”): 
  
 ARTICLE 1 
 DEFINITIONS AND INCORPORATION 
 BY REFERENCE

  
 Section 1.01 Definitions. 
  
 “144A Global Note” means a Global Note substantially in the
form of Exhibit A1 hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold in reliance on Rule 144A. 
  
 “Acquired Debt” means, with respect to any specified Person: 
  
 (1) Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Restricted Subsidiary of
such specified Person, whether or not such Indebtedness is incurred in connection with, or in contemplation of, such other Person merging with or into, or becoming a Restricted Subsidiary of, such specified Person; and 
  
 (2) Indebtedness secured by a Lien encumbering any asset
acquired by such specified Person. 
  
 “Act of Required
Debtholders” means, (i) for so long as the Credit Agreement is outstanding, an act of the Credit Agreement Agent and (ii) as to any matter at any time thereafter: 
  
 (1) prior to the Discharge of Priority Lien Obligations, a direction in writing delivered to the Priority
Lien Collateral Agent by or with the written consent of the holders of more than 50% of the sum of: 
  
 (a) the aggregate outstanding principal amount of Priority Lien Debt (including outstanding letters of credit whether or not then
available or drawn); and 
  
 (b) other than in
connection with the exercise of remedies, the aggregate unfunded commitments to extend credit which, when funded, would constitute Priority Lien Debt; and 
  
 (2) at any time after the Discharge of Priority Lien Obligations, a direction in writing delivered to the Collateral Agent by or with the
written consent of the holders of Parity Debt representing the Required Parity Lien Debtholders. 
  
 For purposes of this definition, (a) Secured Debt registered in the name of, or beneficially owned by, the Company or any Affiliate of the Company
will be deemed not to be outstanding, and (b) votes will be determined in accordance with the provisions described in Section 6.2 of the Intercreditor Agreement. 
  

 1 

 “Additional Notes” means additional Notes (other than the Initial Notes) issued from
time to time under this Indenture in accordance with Sections 2.02 and 4.09 hereof, as part of the same series as the Initial Notes. 
  
 “Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For purposes of this definition, “control,” as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise. For purposes of this definition, the terms “controlling,” “controlled by” and “under
common control with” have correlative meanings. 
  
 “Agent” means any Registrar, co-registrar, Paying Agent or additional paying agent. 
  
 “Applicable Premium” means, with respect to a Note at any redemption date, the greater of: 
  
 (1) 1.0% of the principal amount of such Note; and

  
 (2) the excess of: (a) the present value
at such redemption date of (i) the redemption price of such Note on October 15, 2009, (such redemption price being set forth in the table appearing in Section 3.07 hereof) plus (ii) all required remaining scheduled interest
payments due on such Note through October 15, 2009, other than accrued interest to such redemption date, computed using a discount rate equal to the Treasury Rate plus 50 basis points, discounted on a semi-annual bond equivalent basis, over
(b) the principal amount of such Note on such redemption date. 
  
 “Applicable Procedures” means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, the rules and procedures of the Depositary, Euroclear and Clearstream that apply to such transfer or
exchange. 
  
 “Asset Sale” means: 
  
 (1) the sale, lease, conveyance or other disposition of any
assets other than in the ordinary course of business; provided that the sale, conveyance or other disposition of all or substantially all of the assets of Holdings and the Restricted Subsidiaries taken as a whole will be governed by the
provisions Section 4.15 and/or Section 5.01 hereof and not by the provisions of Section 4.10 hereof; and 
  
 (2) the issuance of Equity Interests in any of the Restricted Subsidiaries or the sale of Equity Interests in any of the Restricted
Subsidiaries. 
  
 Notwithstanding the preceding, none of the following items will
be deemed to be an Asset Sale: 
  
 (1) any single
transaction or series of related transactions that involves assets having a Fair Market Value of less than $2.5 million; 
  
 (2) a transfer of assets between or among Holdings and/or the Restricted Subsidiaries; 
  
 (3) an issuance of Equity Interests by a Restricted
Subsidiary to Holdings or to another Restricted Subsidiary or the issuance of Equity Interests by a Restricted Subsidiary in which Holdings’ percentage interest (direct and indirect) in the Equity Interests of such Restricted Subsidiary, after
giving effect to such issuance, is at least equal to its percentage interest prior thereto; 
  

 2 

 (4) the sale, lease, conveyance or other disposition of assets in the ordinary course of
business and any sale or other disposition of damaged, worn-out, surplus or obsolete assets in the ordinary course of business; 
  
 (5) the sale or other disposition of cash or Cash Equivalents; 
  
 (6) a Restricted Payment that does not violate Section 4.07 hereof or a Permitted Investment;

  
 (7) the licensing or sublicensing of
intellectual property, customer lists or other general intangibles and licenses, leases or subleases of other property in the ordinary course of business which do not materially interfere with the business of Holdings and the Restricted
Subsidiaries; 
  
 (8) the sale of Permitted
Investments (other than sales of Equity Interests of any of the Restricted Subsidiaries) made by Holdings or any Restricted Subsidiary after the date of this Indenture, if such Permitted Investments were (a) received in exchange for, or
purchased out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of Holdings) of, Equity Interests of Holdings (other than Disqualified Stock) or (b) received in the form of, or were purchased from the
proceeds of, a substantially concurrent contribution of common equity capital to Holdings; 
  
 (9) the sale of the capital stock of or any of the assets of, Gardeners Eden, Inc. 
  
 “Bankruptcy Law” means Title 11, U.S. Code or any similar
federal or state law for the relief of debtors. 
  
 “Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as that term is used in
Section 13(d)(3) of the Exchange Act), such “person” will be deemed to have beneficial ownership of all securities that such “person” has the right to acquire by conversion or exercise of other securities, whether such right
is currently exercisable or is exercisable only after the passage of time. The terms “Beneficially Owns” and “Beneficially Owned” have a corresponding meaning. 
  
 “Board of Directors” means: 
  
 (1) with respect to a corporation, the board of directors of the corporation or, other than for purposes of
the definition of “Change of Control” and “Continuing Directors,” any committee thereof duly authorized to act on behalf of such board; and 
  

(2) with respect to any other Person, the functional equivalent of a board of directors of a corporation or, other than for purposes of
the definition of “Change of Control” and “Continuing Directors,” any committee thereof duly authorized to act on behalf thereof. 
  
 “Borrowing Base” means “Borrowing Base” as defined in the Credit Agreement as in effect on the date of this Indenture.

  
 “Broker-Dealer” has the meaning set forth in
the Registration Rights Agreement. 
  
 “Business
Day” means any day other than a Legal Holiday. 
  

 3 

 “Capital Lease Obligation” means, at the time any determination is to be made, the
amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a balance sheet prepared in accordance with GAAP. 
  

“Capital Stock” means: 
  
 (1) in the case of a corporation, corporate stock; 
  
 (2) in the case of an association or business entity, any and all shares, interests, participations, rights
or other equivalents (however designated) of corporate stock; 
  
 (3) in the case of a partnership or limited liability company, partnership interests (whether general or limited) or membership interests; and 
  
 (4) any other interest or participation that confers on a Person the right to receive a share of the profits
and losses of, or distributions of assets of, the issuing Person, but excluding from all of the foregoing any debt securities convertible into Capital Stock, whether or not such debt securities include any right of participation with Capital Stock.

  
 “Cash Equivalents” means: 
  
 (1) United States dollars (including such dollars as are
held as overnight bank deposits and demand deposits with banks); 
  
 (2) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality of the United States government (provided that the full faith and credit of the
United States is pledged in support of those securities) having maturities of not more than one year from the date of acquisition; 
  
 (3) certificates of deposit, time deposits, time deposit accounts, term deposit accounts, money market deposit accounts and eurodollar
time deposits with maturities of one year or less from the date of acquisition, bankers’ acceptances with maturities not exceeding one year and overnight bank deposits, in each case, with any domestic commercial bank having capital and surplus
in excess of $500.0 million and a Thomson Bank Watch Rating of “B” or better; 
  
 (4) repurchase obligations with a term of not more than 30 days for underlying securities of the types described in clauses (2) and
(3) above entered into with any financial institution meeting the qualifications specified in clause (3) above; 
  
 (5) commercial paper having one of the two highest ratings obtainable from Moody’s or S&P and, in each case, maturing within one
year after the date of acquisition; 
  
 (6) money
market funds at least 95% of the assets of which constitute Cash Equivalents of the kinds described in clauses (1) through (5) of this definition; and 
  
 (7) in the case of any Foreign Subsidiary, investments made locally of a type comparable to those described
in clauses (1) through (6) of this definition. 
  

 4 

 “Change of Control” means the occurrence of any of the following: 
  
 (1) the direct or indirect sale, transfer, conveyance or
other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of Holdings and its Subsidiaries taken as a whole to any “person” (as
that term is used in Section 13(d) of the Exchange Act) other than an Equity Sponsor or a Control Investment Affiliate of an Equity Sponsor; 
  
 (2) the adoption of a plan relating to the liquidation or dissolution of Holdings or the Company (other than a transaction that complies
with Section 5.01 hereof); 
  
 (3) the
consummation of any transaction (including, without limitation, any merger or consolidation), the result of which is that any “person” (as defined in clause (1) above) other than an Equity Sponsor or a Control Investment Affiliate of
an Equity Sponsor becomes the Beneficial Owner, directly or indirectly, of Voting Stock of Holdings representing 50% or more of the total voting power of the Voting Stock of Holdings; provided that this clause (3) shall not be deemed to
be triggered by any Person that is deemed to be a Beneficial Owner of Voting Stock of the Company by virtue of its relationship with (other than ownership directly or indirectly of Capital Stock of) an Equity Sponsor or a Control Investment
Affiliate of an Equity Sponsor; 
  
 (4) after an
initial public offering of Holdings or any Parent Company, the first day on which a majority of the members of the Board of Directors of Holdings are not Continuing Directors; provided, however, that the Equity Sponsor and their
Control Investment Affiliates do not, at such time, in the aggregate, (a) Beneficially Own, directly or indirectly, Voting Stock of Holdings representing more than 50% of the total voting power of the Voting Stock of Holdings or (b) have
the right or ability by voting power, contract or otherwise to elect or designate a majority of the Board of Directors of Holdings; or 
  
 (5) Holdings shall cease to Beneficially Own all of the Equity Interests of the Company. 
  
 “Class” means (1) in the case of Parity Lien Debt,
every Series of Parity Lien Debt, taken together, and (2) in the case of Priority Lien Debt, every Series of Priority Lien Debt, taken together. 
  
 “Clearstream” means Clearstream Banking, S.A. 
  
 “Collateral” means all properties and assets at any time owned or acquired by the Company or any of the other Pledgors, except:

  
 (1) Excluded Assets; 
  
 (2) any properties and assets in which the Collateral Agent
is required to release its Liens pursuant to the provisions described in Section 5.1 of the Intercreditor Agreement; 
  
 (3) any properties and assets that no longer secure the notes or any Obligations in respect thereof pursuant to the provisions described
in Section 5.4 of the Intercreditor Agreement; 
  
 provided that, in the case of clauses (2) and (3), if such Liens are required to be released as a result of the sale, transfer or other disposition of any properties or assets of the Company or any other Pledgor, such assets or
properties will cease to be excluded from the Collateral if the Company or any other Pledgor thereafter acquires or reacquires such assets or properties. 
  
 “Collateral Agent” means Wells Fargo Bank, N.A., in its capacity as collateral agent under the Security Documents, together with its
successors in such capacity. 
  

 5 

 “Company” means Brookstone Company, Inc., a New Hampshire corporation. 
  
 “Consolidated Cash Flow” means, for any period, for any
Person, an amount determined for such Person and its Restricted Subsidiaries on a consolidated basis equal to: 
  
 (1) Consolidated Net Income for such period plus  
  
 (2) the sum, without duplication, of the amounts for such Person and its Restricted Subsidiaries for such
period (in each case to the extent reducing such Consolidated Net Income) of: 
  
 (a) Fixed Charges; 
  
 (b) provision for taxes based on income; 
  
 (c) total depreciation expenses; 
  
 (d)
total amortization expenses; 
  
 (e) other
non-cash items reducing such Consolidated Net Income (excluding any such non-cash item to the extent that it represents an accrual or reserve for potential cash items in any future period or amortization of a prepaid cash item that was paid in a
prior period); 
  
 (f) costs and expenses
incurred on or prior to the Issue Date in connection with the Transactions; 
  
 (g) other non-recurring, non-operating losses in an aggregate amount not to exceed $2.5 million in any four-quarter period; 
  
 (h) cash gains realized under Hedging Obligations relating to currency exchange rates; and 
  
 (i) minority interest (if negative) with respect to any
Subsidiary Guarantor; minus  
  
 (3) the
sum, without duplication, of the amounts for such period (in each case to the extent increasing such Consolidated Net Income) of 
  
 (a) non-cash items increasing such Consolidated Net Income (excluding any such non-cash item to the extent it represents the reversal of
an accrual or reserve for potential cash item in any prior period); 
  
 (b) non-recurring, non-operating gains; 
  
 (c) cash losses realized under Hedging Obligations relating to currency exchange rates; and 
  
 (d) minority interest (if positive) with respect to any Subsidiary Guarantor; plus or minus  
  
 (4) without duplication of any amounts referred to above or
in the definition of Consolidated Net Income, with respect to any part of a four-quarter period that includes any fiscal 

  

 6 

 
month of Holdings ending on or prior to August 31, 2005, the pro forma adjustments to net income set forth in the section “Unaudited Pro Forma
Financial Data” in the Offering Circular and the adjustments to net income to derive “EBITDA” and to “EBITDA” to derive “Adjusted EBITDA” set forth in the section “Summary—Summary Historical and Pro Forma
Consolidated Financial Data” thereof; 
  
 provided that the items
listed in clauses (2)(a) through (e) of a Restricted Subsidiary will be included in Consolidated Cash Flow only to the extent (and in the same proportion) that the net income of such Subsidiary was included in calculating Consolidated Net
Income for such period. 
  
 “Consolidated Net Income”
means, for any period, the net income (or net loss) of a Person and its Restricted Subsidiaries for such period as determined on a consolidated basis in accordance with GAAP, adjusted to the extent included in calculating such net income or loss
by excluding: 
  
 (1) any net after-tax
extraordinary gains or losses (less all fees and expenses relating thereto); 
  
 (2) any net after-tax gains or losses (less all fees and expenses relating thereto) attributable to Asset Sales, dispositions of securities or returned surplus assets of any pension plan; 
  
 (3) the net income (but not the net loss) of any Person that
is not a Restricted Subsidiary or that is accounted for by the equity method of accounting, except to the extent of the amount of dividends or other distributions actually paid to Holdings or any Restricted Subsidiary in cash during such period;

  
 (4) the net income (but not the net loss) of
any Restricted Subsidiary to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary is at the date of determination prohibited, directly or indirectly, except to the extent that such net income
is actually paid to Holdings or any Restricted Subsidiary by loans, advances, intercompany transfers, principal repayments or otherwise; 
  
 (5) the cumulative effect of a change in accounting principles; 
  
 (6) any operating losses relating to Gardeners Eden, Inc. and any one-time costs, fees and expenses
associated with the sale, liquidation or other disposition of Gardeners Eden, Inc. in an aggregate amount not to exceed $8.0 million; and 
  
 (7) purchase accounting adjustments required or permitted by GAAP in connection with the transactions described under the heading
“Use of Proceeds”. 
  
 provided, further, that
Consolidated Net Income shall be reduced by amounts under clause (1) of the definition of Permitted Payments to Parent. 
  
 “Continuing Directors” means, as of any date of determination, any member of the Board of Directors of Holdings who: 
  
 (1) was a member of such Board of Directors on the Issue
Date; 
  

 7 

 (2) was nominated for election or elected to such Board of Directors with the approval of
a majority of the Continuing Directors who were members of such Board of Directors at the time of such nomination or election; or 
  
 (3) was nominated by one or more of the Equity Sponsors or their Control Investment Affiliates. 
  
 “Control Investment Affiliate” means, as to any Person, any
Person which directly or indirectly is in control of, is controlled by, or is under common control with such Person and is organized by such Person (or any Person controlling such Person) primarily for making equity or debt investments in portfolio
companies. 
  
 “Corporate Trust Office of the
Trustee” will be at the address of the Trustee specified in Section 13.02 hereof or such other address as to which the Trustee may give notice to the Company. 
  
 “Credit Agreement” means that certain credit agreement, dated on or about the Issue Date, by and among
Holdings, the Company, certain subsidiaries of the Company, Bank of America, N.A., Goldman Sachs Credit Partners L.P. and the lenders from time to time party thereto, together with any agreements relating to the provision of cash and treasury
management services and other bank products provided by a lender thereunder or an affiliate thereof and any related notes, guarantees, collateral documents, instruments and agreements executed in connection therewith, and in each case, as amended,
restated, modified, renewed, refunded, replaced (whether upon termination or otherwise) or refinanced (including by means of sales of debt securities to institutional investors) in whole or in part from time to time. 
  
 “Credit Agreement Agent” means, at any time, the Person
serving at such time as the “Agent” or “Administrative Agent” or “Collateral Agent” under the Credit Agreement or any other representative then most recently designated in accordance with the applicable provisions of
the Credit Agreement, together with its successors in such capacity. 
  
 “Credit Facilities” means one or more debt facilities (including, without limitation, the Credit Agreement) or commercial paper facilities, in each case with banks or other institutional lenders providing for revolving
credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or letters of credit, in each case, as amended,
restated, modified, renewed, refunded, replaced or refinanced (including by means of sales of debt securities to institutional investors) in whole or in part from time to time. 
  
 “Custodian” means the Trustee, as custodian with respect to the Notes in global form, or any successor
entity thereto. 
  
 “Default” means any event
that is, or with the passage of time or the giving of notice or both would be, an Event of Default. 
  
 “Definitive Note” means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 2.06
hereof, substantially in the form of Exhibit A1 hereto except that such Note shall not bear the Global Note Legend and shall not have the “Schedule of Exchanges of Interests in the Global Note” attached thereto. 
  
 “Depositary” means, with respect to the Notes issuable or
issued in whole or in part in global form, the Person specified in Section 2.03 hereof as the Depositary with respect to the Notes, and any and 

  

 8 

 
all successors thereto appointed as depositary hereunder and having become such pursuant to the applicable provision of this Indenture. 
  
 “Designated Preferred Stock” means preferred stock issued
after the date of this Indenture (including, without limitation, Disqualified Stock) issued and sold for cash in a bona fide financing transaction that is designated as Designated Preferred Stock pursuant to an officers’ certificate on the
issuance date thereof, the net cash proceeds of which are excluded from the calculation set forth in clause (3) of the first paragraph of Section 4.07 hereof and are not used for purposes of clause (b) of the second paragraph thereof.

  
 “Discharge of Priority Lien Obligations”
means the occurrence of all of the following: 
  
 (1) termination or expiration of all commitments to extend credit that would constitute Priority Lien Debt; 
  
 (2) payment in full in cash of the principal of and interest and premium (if any) on all Priority Lien Debt (other than any undrawn
letters of credit); 
  
 (3) discharge or cash
collateralization (at the lower of (1) 105% of the aggregate undrawn amount and (2) the percentage of the aggregate undrawn amount required for release of liens under the terms of the applicable Priority Lien Document) of all outstanding
letters of credit constituting Priority Lien Debt; and 
  
 (4) payment in full in cash of all other Priority Lien Obligations that are outstanding and unpaid at the time the Priority Lien Debt is paid in full in cash (other than any obligations for taxes, costs, indemnifications, reimbursements,
damages and other liabilities in respect of which no claim or demand for payment has been made at such time). 
  
 “Disqualified Stock” means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible, or for
which it is exchangeable, in each case at the option of the holder of the Capital Stock), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of
the holder of the Capital Stock, in whole or in part, on or prior to the date that is 91 days after the date on which the Notes mature. Notwithstanding the preceding sentence, any Capital Stock that would constitute Disqualified Stock solely because
the holders of the Capital Stock have the right to require the Company to repurchase such Capital Stock upon the occurrence of a change of control or an asset sale will not constitute Disqualified Stock if the asset sale or change or control
provisions applicable to such Capital Stock provide that the Company may not repurchase or redeem any such Capital Stock pursuant to such provisions unless such repurchase or redemption complies with Section 4.07 hereof. The amount of
Disqualified Stock deemed to be outstanding at any time for purposes of this Indenture will be the maximum amount that Holdings and its Restricted Subsidiaries may become obligated to pay upon the maturity of, or pursuant to any mandatory redemption
provisions of, such Disqualified Stock. 
  
 “Domestic
Subsidiary” means any Restricted Subsidiary of Holdings that was formed under the laws of the United States or any state of the United States or the District of Columbia or that guarantees or otherwise provides direct credit support for any
Indebtedness of Holdings or the Company. 
  

 9 

 “equally and ratably” means, in reference to sharing of Liens or proceeds thereof as
between holders of Secured Obligations within the same Class, that such Liens or proceeds: 
  
 (1) will be allocated and distributed first to the Secured Debt Representative for each outstanding Series of Secured Debt within that
Class, for the account of the holders of such Series of Secured Debt, ratably in proportion to the principal of, and interest and premium (if any) and reimbursement obligations (contingent or otherwise) with respect to letters of credit, if any,
outstanding (whether or not drawings have been made under such letters of credit) on each outstanding Series of Secured Debt within that Class when the allocation or distribution is made, and thereafter 
  
 (2) will be allocated and distributed (if any remain after
payment in full of all of the principal of, and interest and premium (if any) and reimbursement obligations (contingent or otherwise) with respect to letters of credit, if any, outstanding (whether or not drawings have been made on such letters of
credit) on all outstanding Secured Obligations within that Class) to the Secured Debt Representative for each outstanding Series of Secured Obligations within that Class, for the account of the holders of any remaining Secured Obligations within
that Class, ratably in proportion to the aggregate unpaid amount of such remaining Secured Obligations within that Class due and demanded (with written notice to the applicable Secured Debt Representative, the Priority Lien Collateral Agent and the
Collateral Agent) prior to the date such distribution is made. 
  
 “Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock). 
  
 “Equity Sponsors” means John W. Childs, and J.W. Childs
Associates, L.P., OSIM International Ltd and Temasek Capital (Private) Limited. 
  
 “Euroclear” means Euroclear Bank, S.A./N.V., as operator of the Euroclear system. 
  
 “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
  
 “Exchange Notes” means the Notes issued in the Exchange Offer pursuant to Section 2.06(f) hereof.

  
 “Exchange Offer” has the meaning set forth in
the Registration Rights Agreement. 
  
 “Exchange Offer
Registration Statement” has the meaning set forth in the Registration Rights Agreement. 
  
 “Excluded Assets” means each of the following: 
  

(1) any permit, lease, license, contract, instrument or other agreement held by the Company or any other Pledgor that prohibits or
requires the consent of any Person as a condition to the creation by the Company or such other Pledgor of a security interest or Lien thereon or that would be breached or give the other party the right to terminate it as a result thereof, or any
permit, lease, license contract or other agreement held by the Company or any other Pledgor to the extent that any law applicable thereto prohibits the creation of a security interest or Lien thereon or that would be breached or give the other party
the right to terminate is as a result thereof, but only, in each case to the extent, and for so long as, such prohibition is not terminated or rendered unenforceable or otherwise deemed ineffective by the UCC (including Sections 9-406(a), 9-407(a),
9-408(a) and 9-409 of the UCC) or any other law, and (ii) equipment owned by the Company or any other Pledgor that is subject to a purchase money Lien or a capital lease which is permitted by this Indenture if the contract or other agreement in
which such Lien is 

  

 10 

 
granted (or in the documentation providing for such capital lease) prohibits or requires the consent of any Person as a condition to the creation of any
other Lien on such equipment or that would be breached or give the other party the right to terminate is as a result thereof provided, however, “Excluded Assets” shall not include any Proceeds, substitutions or replacements
of Excluded Assets (unless such Proceeds, substitutions or replacements would constitute replacements of Excluded Assets); 
  
 (2) any interest of the Company or any other Pledgor in any real property; 
  
 (3) all “securities” of the Company or any of the Company’s “affiliates” (as the
terms “securities” and “affiliates” are used in Rule 3-16 of Regulation S-X under the Securities Act); and 
  
 (4) any other property or assets in which a Lien cannot be perfected by the filing of a financing statement under the Uniform Commercial
Code of the relevant jurisdiction, so long as the aggregate Fair Market Value of all such property and assets does not at any one time exceed $10.0 million. 
  
 “Existing Indebtedness” means Indebtedness of the Company and its Subsidiaries (other than Indebtedness under the Credit Agreement) in
existence on the date of this Indenture after giving effect to the issuance of the notes and the borrowing under the Credit Agreement on the Issue Date and the use of proceeds therefrom, until such amounts are repaid. 
  
 “Fair Market Value” means the value that would be paid by a
willing buyer to an unaffiliated willing seller in a transaction not involving distress or necessity of either party, determined in good faith by the Board of Directors of the Company. 
  
 “Fixed Charge Coverage Ratio” means, with respect to any specified Person for any period, the ratio of the
Consolidated Cash Flow of such Person for such period to the Fixed Charges of such Person for such period. In the event that the specified Person or any Restricted Subsidiary incurs, assumes, guarantees, repays, repurchases, redeems, defeases or
otherwise discharges any Indebtedness (other than ordinary working capital borrowings) or issues, repurchases or redeems preferred stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated and
on or prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made occurred (the “Calculation Date”), then the Fixed Charge Coverage Ratio will be calculated giving pro forma
effect to such incurrence, assumption, guarantee, repayment, repurchase, redemption, defeasance or other discharge of Indebtedness, or such issuance, repurchase or redemption of preferred stock, and the use of the proceeds therefrom, as if the same
had occurred at the beginning of the applicable four-quarter reference period. 
  
 In addition, for purposes of calculating the Fixed Charge Coverage Ratio: 
  
 (1) acquisitions that have been made by the specified Person or any Restricted Subsidiary, including through
mergers or consolidations, or any Person or any Restricted Subsidiary acquired by the specified Person or any Restricted Subsidiary, and including any related financing transactions and including increases in ownership of Restricted Subsidiaries,
during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date will be given pro forma effect (in accordance with Regulation S-X under the Securities Act but giving effect to Pro Forma Cost
Savings) as if they had occurred on the first day of the four-quarter reference period; 
  

 11 

 (2) the Consolidated Cash Flow attributable to operations or businesses (and ownership
interests therein) disposed of prior to the Calculation Date will be excluded; 
  
 (3) the Fixed Charges attributable to operations or businesses (and ownership interests therein) disposed of prior to the Calculation Date
will be excluded, but only to the extent that the obligations giving rise to such Fixed Charges will not be obligations of the specified Person or any Restricted Subsidiary following the Calculation Date; 
  
 (4) any Person that is a Restricted Subsidiary on the
Calculation Date (or would become a Restricted Subsidiary on such Calculation Date in connection with the transaction requiring determination of such Consolidated Cash Flow) will be deemed to have been a Restricted Subsidiary at all times during
such four-quarter period; 
  
 (5) any Person that
is not a Restricted Subsidiary on the Calculation Date (or would cease to be a Restricted Subsidiary on such Calculation Date in connection with the transaction requiring determination of such Consolidated Cash Flow) will be deemed not to have been
a Restricted Subsidiary at any time during such four-quarter period; and 
  
 (6) if any Indebtedness bears a floating rate of interest, the interest expense on such Indebtedness will be calculated as if the rate in effect on the Calculation Date had been the applicable rate for the entire
period (taking into account any Hedging Obligation applicable to such Indebtedness if such Hedging Obligation has a remaining term as at the Calculation Date in excess of 12 months). 
  
 “Fixed Charges” means, with respect to any specified Person for any period, the sum, without duplication,
of: 
  
 (1) the consolidated interest expense of
such Person and its Restricted Subsidiaries for such period, whether paid or accrued, including, without limitation, amortization of debt issuance costs and original issue discount, non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated with Capital Lease Obligations, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers’ acceptance financings, and net of the
effect of all payments made or received pursuant to Hedging Obligations in respect of interest rates; plus  
  
 (2) the consolidated interest of such Person and its Restricted Subsidiaries that was capitalized during such period; plus 

  
 (3) any interest accruing on Indebtedness of
another Person that is guaranteed by such Person or one of its Restricted Subsidiaries or secured by a Lien on assets of such Person or one of its Restricted Subsidiaries, whether or not such guarantee or Lien is called upon; plus 

  
 (4) the product of (a) all dividends,
whether paid or accrued and whether or not in cash, on any series of preferred stock of such Person or any Restricted Subsidiary, other than dividends on Equity Interests payable solely in Equity Interests of the Company (other than Disqualified
Stock) or to the Company or a Restricted Subsidiary of the Company, times (b) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax rate of such
Person, expressed as a decimal, in each case, on a consolidated basis and in accordance with GAAP. 
  
 “Foreign Subsidiary” means any Subsidiary of Holdings that is not a Domestic Subsidiary. 
  

 12 

 “GAAP” means generally accepted accounting principles in the United States of America,
as set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by
such other entity as have been approved by a significant segment of the accounting profession, which are in effect from time to time. 
  
 “Global Note Legend” means the legend set forth in Section 2.06(g)(2) hereof, which is required to be placed on all Global Notes
issued under this Indenture. 
  
 “Global Notes”
means, individually and collectively, each of the Restricted Global Notes and the Unrestricted Global Notes deposited with or on behalf of and registered in the name of the Depositary or its nominee, substantially in the form of Exhibit A1 hereto
and that bears the Global Note Legend and that has the “Schedule of Exchanges of Interests in the Global Note” attached thereto, issued in accordance with Section 2.01, 2.06(b)(3), 2.06(b)(4), 2.06(d)(2) or 2.06(f) hereof. 

 
 “Government Securities” means direct obligations of, or
obligations guaranteed by, the United States of America, and the payment for which the United States pledges its full faith and credit. 
  
 “guarantee” means a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business,
direct or indirect, in any manner, including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness (whether arising by virtue of
partnership arrangements, or by agreements to keep well, to purchase assets, goods, securities or services, to take or pay or to maintain financial statement conditions or otherwise). 
  
 “Guarantors” means Holdings and the Subsidiary Guarantors. 
  
 “Hedging Obligations” of any Person means the obligations of
such Person under swap, cap, collar, forward purchase or similar agreements or arrangements dealing with interest rates, currency exchange rates or commodity prices, either generally or under specific contingencies. 
  
 “Holder” means a Person in whose name a Note is registered.

  
 “Holdings” means Brookstone, Inc., a Delaware
corporation. 
  
 “IAI Global Note” means a Global
Note substantially in the form of Exhibit A1 hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee that will be issued in a denomination
equal to the outstanding principal amount of the Notes sold to Institutional Accredited Investors. 
  
 “Indebtedness” means, with respect to any specified Person, any indebtedness of such Person (excluding accrued expenses and trade
payables), whether or not contingent: 
  
 (1) in
respect of borrowed money; 
  
 (2) evidenced by
bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof); 
  
 (3) in respect of bankers’ acceptances; 
  
 (4) representing Capital Lease Obligations; 
  

 13 

 (5) representing the balance deferred and unpaid of the purchase price of any property or
services due more than six months after such property is acquired or such services are completed, except any such balance that represents an accrued expense or trade payable; 
  
 (6) representing any Hedging Obligations; or 
  
 (7) all monetary obligations, including fees, costs, expenses and indemnities, whether primary, secondary,
direct, contingent, fixed or otherwise of Holdings or any Restricted Subsidiary arising out of any cash management, depository or investment services provided by any Priority Lien Collateral Agent or its Affiliates. 
  
 if and to the extent any of the preceding items (other than letters of credit, Hedging
Obligations and obligations referred to in clause (7) above) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP. In addition, the term “Indebtedness” includes all Indebtedness of
others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person), but only to the extent that the aggregate amount of such Indebtedness does not exceed the Fair Market Value of the
asset, and, to the extent not otherwise included, the guarantee by the specified Person of any Indebtedness of any other Person. In no event will obligations or liabilities in respect of any Capital Stock constitute Indebtedness hereunder.

  
 “Indenture” means this Indenture, as amended
or supplemented from time to time. 
  
 “Indirect
Participant” means a Person who holds a beneficial interest in a Global Note through a Participant. 
  
 “Initial Notes” means the first $185,000,000 aggregate principal amount of Notes issued under this Indenture on the date hereof.

  
 “insolvency or liquidation proceeding” means:

  
 (1) any case commenced by or against the
Company or any other Pledgor under Title 11, U.S. Code or any similar federal or state law for the relief of debtors, any other proceeding for the reorganization, recapitalization or adjustment or marshalling of the assets or liabilities of the
Company or any other Pledgor, any receivership or assignment for the benefit of creditors relating to the Company or any other Pledgor or any similar case or proceeding relative to the Company or any other Pledgor or its creditors, as such, in each
case whether or not voluntary; 
  
 (2) any
liquidation, dissolution, marshalling of assets or liabilities or other winding up of or relating to the Company or any other Pledgor, in each case whether or not voluntary and whether or not involving bankruptcy or insolvency; or 
  
 (3) any other proceeding of any type or nature in which
substantially all claims of creditors of the Company or any other Pledgor are determined and any payment or distribution is or may be made on account of such claims. 
  
 “Institutional Accredited Investor” means an institution that is an “accredited investor” as
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act, who are not also QIBs. 
  
 “Intercreditor Agreement” means the Intercreditor Agreement, dated as of the date hereof, among the Pledgors, the Credit Agreement Agent,
the Trustee and the Collateral Agent, as amended, supplemented or otherwise modified from time to time. 
  

 14 

 “Investments” means, with respect to any Person, all direct or indirect investments by
such Person in other Persons (including Affiliates) in the forms of loans (including guarantees or other obligations), advances or capital contributions, purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. If Holdings or any Restricted Subsidiary sells or otherwise disposes of any Equity Interests of any Restricted
Subsidiary such that, after giving effect to any such sale or disposition, such Person is no longer a Restricted Subsidiary, Holdings will be deemed to have made an Investment on the date of any such sale or disposition equal to the Fair Market
Value of Holdings’ Investments in such Restricted Subsidiary that were not sold or disposed of in an amount determined as provided in the final paragraph of Section 4.07 hereof. The acquisition by Holdings or any Restricted Subsidiary of a
Person that holds an Investment in a third Person will be deemed to be an Investment by Holdings or such Restricted Subsidiary in such third Person in an amount equal to the Fair Market Value of the Investments held by the acquired Person in such
third Person in an amount determined as provided in the final paragraph of Section 4.07 hereof. Except as otherwise provided in this Indenture, the amount of an Investment will be determined at the time the Investment is made and without giving
effect to subsequent changes in value. Notwithstanding the foregoing, Restricted Payments of the type described in clause (iii) of the definition thereof will not be deemed to be Investments. 
  
 “Issue Date” means the date on which the notes are first issued
under this Indenture. 
  
 “Legal Holiday”
means a Saturday, a Sunday or a day on which banking institutions in the City of New York or at a place of payment are authorized by law, regulation or executive order to remain closed. If a payment date is a Legal Holiday at a place of payment,
payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue on such payment for the intervening period. 
  
 “Letter of Transmittal” means the letter of transmittal to be prepared by the Company and sent to all
Holders of the Notes for use by such Holders in connection with the Exchange Offer. 
  
 “letters of credit” means “Letters of Credit” as defined in the Credit Agreement. 
  
 “Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest, hypothec or encumbrance of any kind in
respect of such asset, whether or not filed, recorded, registered or otherwise perfected under applicable law, including any conditional sale or other title retention agreement; provided that in no event shall an operating lease that is not a
Capital Lease Obligation be deemed to constitute a Lien. 
  
 “Lien Sharing and Priority Confirmation” means: 
  
 (1) as to any Series of Parity Lien Debt, the written agreement of the holders of such Series of Parity Lien Debt, as set forth in this Indenture, the Credit Agreement or other agreement governing such Series of
Parity Lien Debt, for the enforceable benefit of all holders of each existing and future Series of Priority Lien Debt, each existing and future Priority Lien Representative and each existing and future holder of Permitted Prior Liens: 
  
 (a) that all Parity Lien Obligations will be and are secured
equally and ratably by all Parity Liens at any time granted by the Company or any other Pledgor to secure any Obligations in respect of such Series of Parity Lien Debt, whether or not upon property otherwise constituting collateral for such Series
of Parity Lien Debt, and that all such 

  

 15 

 
Parity Liens will be enforceable by the Collateral Agent for the benefit of all holders of Parity Lien Obligations equally and ratably; 
  
 (b) that the holders of Obligations in respect of such
Series of Parity Lien Debt are bound by the provisions of the Intercreditor Agreement, including the provisions relating to the ranking of Parity Liens and the order of application of proceeds from the enforcement of Parity Liens; and 
  
 (c) consenting to and directing the Collateral Agent to
perform its obligations under the Intercreditor Agreement and the other Security Documents; and 
  
 (2) as to any Series of Priority Lien Debt, the written agreement of the holders of such Series of Priority Lien Debt, as set forth in the
Credit Agreement or other agreement governing such Series of Priority Lien Debt, for the enforceable benefit of all holders of each existing and future Series of Parity Lien Debt, each existing and future Parity Lien Representative and each existing
and future holder of Permitted Prior Liens: 
  
 (a) that all Priority Lien Obligations will be and are secured equally and ratably by all Priority Liens at any time granted by the Company or any other Pledgor to secure any Obligations in respect of such Series of Priority Lien Debt,
whether or not upon property otherwise constituting Collateral for such Series of Priority Lien Debt, and that all such Priority Liens will be enforceable by the Priority Lien Collateral Agent for the benefit of all holders of Priority Lien
Obligations equally and ratably; 
  
 (b) that the
holders of Obligations in respect of such Series of Priority Lien Debt are bound by the provisions of the Intercreditor Agreement, including the provisions relating to the ranking of Priority Liens and the order of application of proceeds from
enforcement of Priority Liens; and 
  
 (c)
consenting to and directing the Priority Lien Collateral Agent to perform its obligations under the Intercreditor Agreement and the other Security Documents. 
  
 “Net Proceeds” means the aggregate cash proceeds received by Holdings or any Restricted Subsidiary in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of the direct costs relating to such Asset Sale, including, without limitation, (a) fees and
expenses related to such Asset Sale (including legal, accounting and investment banking fees and discounts, and sales and brokerage commissions, and any relocation expenses incurred as a result of the Asset Sale), (b) taxes paid or payable as a
result of the Asset Sale, in each case, after taking into account any available tax credits or deductions and any tax sharing arrangements, (c) amounts required to be applied to the repayment of Indebtedness, other than Indebtedness under a
Credit Facility, secured by a Lien on the asset or assets that were the subject of such Asset Sale, (d) any reserve in accordance with GAAP against any liabilities associated with such Asset Sale and retained by the seller after such Asset
Sale, including pension and other post-employment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale and (e) cash escrows (until released from
escrow to the seller). 
  
 “Non-Recourse Debt”
means Indebtedness: 
  
 (1) as to which neither
Holdings nor any Restricted Subsidiary (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute 

  

 16 

 
Indebtedness), (b) is directly or indirectly liable as a guarantor or otherwise, or (c) constitutes the lender; 
  
 (2) no default with respect to which would permit upon
notice, lapse of time or both any holder of any Indebtedness of Holdings or any Restricted Subsidiary to declare a default on such Indebtedness or cause the payment of the Indebtedness to be accelerated or payable prior to its Stated Maturity; and

  
 (3) as to which the lenders have been
notified in writing that they will not have any recourse to the stock or assets of Holdings or any Restricted Subsidiary. 
  
 “Non-U.S. Person” means a Person who is not a U.S. Person. 
  
 “Note Documents” means this Indenture, the Notes and the Security Documents. 
  
 “Note Guarantee” means the guarantee by each Guarantor of
the Company’s obligations under this Indenture and on the Notes, executed pursuant to the provisions of this Indenture. 
  
 “Notes” has the meaning assigned to it in the preamble to this Indenture. The Initial Notes and the Additional Notes shall be treated as
a single class for all purposes under this Indenture, and unless the context otherwise requires, all references to the Notes shall include the Initial Notes and any Additional Notes. 
  
 “Obligations” means any principal (including reimbursement obligations with respect to letters of credit
whether or not drawn), interest (including, to the extent legally permitted, all interest accrued thereon after the commencement of any insolvency or liquidation proceeding at the rate, including any applicable post-default rate, specified in the
Secured Debt Documents, even if such interest is not enforceable, allowable or allowed as a claim in such proceeding), premium (if any), fees, indemnifications, reimbursements, expenses and other liabilities payable under the applicable Secured Debt
Documents. 
  
 “Offering Circular” means the
Company’s offering circular relating to the Notes dated September 23, 2005. 
  
 “Officer” means, with respect to any Person, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer, any
Assistant Treasurer, the Controller, the Secretary or any Vice-President of such Person. 
  
 “Officers’ Certificate” means a certificate signed on behalf of the Company by two Officers of the Company, one of whom must be the principal executive officer, the principal financial officer,
the treasurer or the principal accounting officer of the Company, that meets the requirements of Section 13.05 hereof. 
  
 “Opinion of Counsel” means an opinion from legal counsel who is reasonably acceptable to the Trustee, that meets the requirements of
Section 13.05 hereof. The counsel may be an employee of or counsel to the Company, any Subsidiary of the Company or the Trustee. 
  
 “Parent Companies” means OSIM Brookstone Holdings, Inc., OSIM Brookstone Holdings, L.P., and any of its Subsidiaries that directly or
indirectly owns Equity Interests of Holdings. 
  

 17 

 “Parity Lien” means a Lien granted by a Security Document to the Collateral Agent, at
any time, upon any property of the Company or any other Pledgor to secure Parity Lien Obligations. 
  
 “Parity Lien Debt” means: 
  
 (1) the Notes issued on the date hereof (including any related Exchange Notes); and 
  
 (2) any other Indebtedness of the Company (including
Additional Notes) that is secured equally and ratably with the Notes by a Parity Lien that was permitted to be incurred and so secured under each applicable Secured Debt Document; provided that: 
  
 (a) the net proceeds are used to refund, refinance, replace,
defease, discharge or otherwise acquire or retire Priority Lien Debt and corresponding permanent reduction in commitments or other Parity Lien Debt; or 
  
 (b) on the date of incurrence of such Indebtedness, after giving pro forma effect to the incurrence thereof and the application of the
proceeds therefrom, the Secured Leverage Ratio would not be greater than 2.75 to 1.0; 
  
 provided, further, in the case of any Indebtedness referred to in clause (2) of this definition: 
  
 (a) on or before the date on which such Indebtedness is incurred by the Company, such Indebtedness is designated by the Company, in an
officers’ certificate delivered to each Parity Lien Representative and the Collateral Agent and the Priority Lien Collateral Agent, as “Parity Lien Debt” for the purposes of this Indenture and the Intercreditor Agreement;
provided that no Series of Secured Debt may be designated as both Parity Lien Debt and Priority Lien Debt; 
  
 (b) such Indebtedness is governed by an indenture, credit agreement or other agreement that includes a Lien Sharing and Priority
Confirmation; and 
  
 (c) all requirements set
forth in the Intercreditor Agreement as to the confirmation, grant or perfection of the Collateral Agent’s Liens to secure such Indebtedness or Obligations in respect thereof are satisfied (and the satisfaction of such requirements and the
other provisions of this clause (c) will be conclusively established if the Company delivers to the Priority Lien Collateral Agent and the Collateral Agent an officers’ certificate stating that such requirements and other provisions have
been satisfied and that such Indebtedness is “Parity Lien Debt”). 
  
 “Parity Lien Documents” means, collectively, the Note Documents and the indenture, credit agreement or other agreement governing each other Series of Parity Lien Debt and the Security Documents (other
than any Security Documents that do not secure Parity Lien Obligations). 
  
 “Parity Lien Obligations” means Parity Lien Debt and all other Obligations in respect thereof. 
  
 “Parity Lien Representative” means: 
  
 (1) in the case of the notes, the trustee; or 
  
 (2) in the case of any other Series of Parity Debt, the trustee, agent or representative of the Holders of such Series of Parity Lien Debt
who maintains the transfer register for such Series 

  

 18 

 
of Parity Lien Debt and (a) is appointed as a Parity Lien Representative (for purposes related to the administration of the Security Documents) pursuant
to the indenture, credit agreement or other agreement governing such Series of Parity Lien Debt, together with its successors in such capacity, and (b) has become a party to the Intercreditor Agreement by executing a joinder in the form
required under the Intercreditor Agreement. 
  
 “Participant” means, with respect to the Depositary, Euroclear or Clearstream, a Person who has an account with the Depositary, Euroclear or Clearstream, respectively (and, with respect to DTC, shall include Euroclear and
Clearstream). 
  
 “Permitted Business” means any
business conducted by Holdings or any Restricted Subsidiary on the Issue Date and any businesses that, in the good faith judgment of the Board of Directors of Holdings, are reasonably related, ancillary or complementary thereto, or reasonable
extensions thereof. 
  
 “Permitted Investments”
means: 
  
 (1) any Investment in Cash
Equivalents; 
  
 (2) any Investment in Holdings
or in a Restricted Subsidiary; 
  
 (3) any
Investment by Holdings or any Restricted Subsidiary in a Person, if as a result of such Investment: 
  
 (a) such Person becomes a Restricted Subsidiary; or 
  
 (b) such Person is merged or consolidated with or into, or transfers or conveys substantially all of its
assets to, or is liquidated into, Holdings or a Restricted Subsidiary; 
  
 (4) any Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with Section 4.10 hereof; 
  
 (5) any Investment made for consideration consisting of
Qualified Equity Interests; 
  
 (6) any
Investment received in compromise or resolution of (A) obligations of trade creditors or customers that were incurred in the ordinary course of business of Holdings or any Restricted Subsidiary, including pursuant to any plan of reorganization
or similar arrangement upon the bankruptcy or insolvency of any trade creditor or customer; or (B) litigation, arbitration or other disputes with Persons that are not Affiliates; 
  
 (7) Investments represented by Hedging Obligations permitted under this Indenture; 
  
 (8) loans or advances to employees of Holdings or any of its
Subsidiaries (x) in the ordinary course of business in an aggregate amount not to exceed $5.0 million at any time outstanding or (y) in connection with the purchase by such Persons of Equity Interests of Holdings or any Parent Company so
long as the cash proceeds of such purchase received by any Parent Company are contemporaneously contributed to the common equity capital of Holdings; 
  
 (9) Investments in existence on the Issue Date; 
  

(10) Investments in prepaid expenses, negotiable instruments held for collection and lease, endorsements for deposit or collection in
the ordinary course of business, utility or workers 

  

 19 

 
compensation, performance and similar deposits entered into as a result of the operations of the business in the ordinary course of business; 
  
 (11) pledges or deposits permitted under clause (6) of
the definition of Permitted Liens; 
  
 (12)
receivables owing to Holdings or any Restricted Subsidiary if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms as Holdings or such Restricted Subsidiary deems reasonable
under the circumstances; and 
  
 (13) other
Investments in any Person having an aggregate Fair Market Value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this
clause (13) that are at the time outstanding (net of the amount of all returns of principal or capital received in cash or Cash Equivalents with respect to such Investments), not to exceed $15.0 million. 
  
 “Permitted Liens” means: 
  
 (1) Liens held by the Priority Lien Collateral Agent
securing Priority Lien Debt in an aggregate principal amount not exceeding the Priority Lien Cap and all Obligations related thereto; 
  
 (2) Liens held by the Collateral Agent equally and ratably securing the Notes to be issued on the date hereof and all future Parity Lien
Debt and other Parity Lien Obligations; 
  
 (3)
Liens in favor of Holdings or any Restricted Subsidiary; 
  
 (4) Liens on property (including Capital Stock) of a Person existing at the time such Person is merged with or into or consolidated with Holdings or any Subsidiary of Holdings; provided that such Liens were in
existence prior to the contemplation of such merger or consolidation and do not extend to any assets other than those of the Person merged into or consolidated with Holdings or the Subsidiary; 
  
 (5) Liens on property (including Capital Stock) existing at
the time of acquisition of the property by Holdings or any Subsidiary of Holdings; provided that such Liens were in existence prior to, such acquisition, and not incurred in contemplation of, such acquisition; 
  
 (6) Liens to secure the performance of statutory
obligations, surety or appeal bonds, performance bonds or other obligations of a like nature incurred in the ordinary course of business; 
  
 (7) Liens to secure Indebtedness (including Capital Lease Obligations) permitted by clause (4) of the second paragraph of
Section 4.09 hereof covering only the assets acquired with or financed by such Indebtedness; 
  
 (8) Liens existing on the date of this Indenture; 
  
 (9) Liens for taxes, assessments or governmental charges or claims that are not yet delinquent more than 30
days or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded; provided that any reserve or other appropriate provision as is required in conformity with GAAP has been made therefor;

  

 20 

 (10) Liens imposed by law, such as carriers’, warehousemen’s, landlords’,
suppliers’ and mechanics’ Liens, in each case, incurred in the ordinary course of business; 
  
 (11) survey exceptions, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph
and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real property that were not incurred in connection with Indebtedness and that do not in the aggregate materially adversely affect the operation of the
business of the Company and its Restricted Subsidiaries, taken as a whole; 
  
 (12) Liens created for the benefit of (or to secure) the notes (or the Note Guarantees) or payment obligations to the Trustee; 
  

(13) Liens to secure any Permitted Refinancing Indebtedness permitted to be incurred under this Indenture; provided,
however, that the new Lien shall be limited to all or part of the same property and assets that secured or, under the written agreements pursuant to which the original Lien arose, could secure the original Lien (plus improvements and
accessions to such property or proceeds or distributions thereof); and 
  
 (14) Liens not otherwise permitted under this Indenture; provided that the aggregate amount of obligations secured thereby does not exceed $5.0 million at any one time outstanding; 
  
 (15) judgment Liens not giving rise to an Event of Default;

  
 (16) Liens and rights of setoff in favor of a
bank imposed by law and incurred in the ordinary course of business on deposit accounts maintained with such bank and cash and Cash Equivalents in such accounts; 
  
 (17) Liens upon specific items of inventory or other goods and proceeds of any Person securing such
Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods; 
  
 (18) pledges or deposits by a Person under worker’s
compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits as security
for contested taxes or import duties or for the payment of rent, in each case incurred in the ordinary course of business; 
  
 (19) Liens solely on any cash earnest money deposits in connection with any letter of intent or purchase agreement hereunder; 

 
 (20) Liens in favor of customs revenue authorities
arising as a matter of law to secure payment of customs duties in connection with the importation of goods; 
  
 (21) any zoning or similar law or right reserved to or vested in any governmental office or agency to control or regulate the use of any
real property; 
  
 (22) Liens of a collection
bank arising under Section 4-210 of the Uniform Commercial Code on items in the course of collection; 
  

 21 

 (23) Liens deemed to exist in connection with Investments in repurchase agreements
permitted under this Indenture; 
  
 (24) Liens on
insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto to the extent permitted hereunder; 
  
 (25) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into in the
ordinary course of business; 
  
 (26) purported
Liens evidenced by the filing of precautionary UCC financing statements relating solely to operating leases of personal property entered into in the ordinary course of business; and 
  
 (27) non-exclusive licenses of patents, trademarks and other intellectual property rights granted by
Brookstone Company, Inc. or any of its Subsidiaries in the ordinary course of business and not interfering in any respect with the ordinary conduct of the business of Brookstone Inc. and its Subsidiaries, taken as a whole. 
  
 “Permitted Payments to Parent” means, without duplication as
to amounts: 
  
 (1) payments by Holdings to or on
behalf of any Parent Company in an amount sufficient to pay out-of-pocket legal, accounting and filing and other general corporate overhead costs of such Parent Company and franchise taxes and other fees required to maintain its existence actually
incurred by such Parent Company, in any case in an aggregate amount not to exceed $2.0 million in any calendar year; and 
  
 (2) for so long as Company or Holdings is a member of a group filing a consolidated or combined tax return with any Parent Company,
payments to the Parent Company in respect of an allocable portion of the tax liabilities of such group that is attributable to Holdings and its Subsidiaries (“Tax Payments”); the Tax Payments shall not exceed the lesser of (i) the
amount of the relevant tax (including any penalties and interest) that Holdings or Company would owe if Holdings or Company were filing a separate tax return (or a separate consolidated or combined return with its Subsidiaries that are members of
the consolidated or combined group), taking into account any carryovers and carrybacks of tax attributes (such as net operating losses) of Holdings or Company and such Subsidiaries from other taxable years and (ii) the net amount of the
relevant tax that the Parent Company actually owes to the appropriate taxing authority; any Tax Payments received from Holdings or Company shall be paid over to the appropriate taxing authority within 30 days of the Parent Company’s receipt of
such Tax Payments or refunded to Holdings or Company, as appropriate. 
  
 “Permitted Prior Liens” means: 
  
 (1) Liens described in clause (1) of the definition of “Permitted Liens;” 
  
 (2) Liens described in clauses (4), (5), (7), (8), (17), (18), (19), (22), (23), (24), (25) and (27) of the definition of
“Permitted Liens;” 
  
 (3) Liens
described in clause (13) of the definition of “Permitted Liens” to the extent the Lien securing the Indebtedness being refinanced constituted a Permitted Prior Lien under clause (1) or (2) of this definition; and 

 

 22 

 (4) Permitted Liens that arise by operation of law and are not voluntarily granted, to
the extent entitled by law to priority over the Liens created by the Priority Lien Security Documents or the Security Documents. 
  
 “Permitted Refinancing Indebtedness” means any Indebtedness of Holdings or any Restricted Subsidiary issued in exchange for, or the net
proceeds of which are used to refund, refinance, replace, defease or discharge, other Indebtedness of Holdings or any Restricted Subsidiary; provided that: 
  
 (1) the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does
not exceed the principal amount (or accreted value, if applicable) of the Indebtedness extended, refinanced, renewed, replaced, defeased or refunded (plus all accrued interest on the Indebtedness and the amount of all expenses and premiums incurred
in connection therewith); 
  
 (2) such Permitted
Refinancing Indebtedness has a final maturity date not earlier than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; 
  
 (3) if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is subordinated in right of payment to the notes, such Permitted Refinancing Indebtedness is subordinated in right of payment to, the notes on terms
at least as favorable to the Holders of Notes as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; and 
  
 (4) such Indebtedness is incurred either by Holdings or by the Restricted Subsidiary that is the obligor on
the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded. 
  
 “Person” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company or government or other entity.

  
 “Pledgors” means Holdings, the Company, the
Guarantors and any other Person (if any) that provides collateral security for any Secured Obligations. 
  
 “Priority Lien” means a Lien granted by a Priority Lien Security Document to the Priority Lien Collateral Agent, at any time, upon any
property of the Company or any other Pledgor to secure Priority Lien Obligations. 
  
 “Priority Lien Cap” means, as of any date, the principal amount outstanding under the Credit Agreement and/or the Indebtedness outstanding under any other Credit Facility, in an aggregate principal
amount (including face amounts of letters of credit) not to exceed the sum of the amount provided by clause (1) of the definition of Permitted Debt, as of any date, plus the amount provided by clauses (13) and (14) of the
definition of Permitted Debt, less the amount of Parity Lien Debt incurred after the date hereof the net proceeds of which are used to repay Priority Lien Debt and corresponding permanent reduction in commitments. For purposes of this
definition, all letters of credit will be valued at the face amount thereof, whether or not drawn and all Hedging Obligations will be valued at zero. 
  
 “Priority Lien Collateral Agent” means the Credit Agreement Agent until such time as the Credit Agreement is no longer outstanding,
thereafter shall mean such person as shall be appointed collateral agent under the Priority Lien Security Documents, together with its successors in such capacity. 
  

 23 

 “Priority Lien Debt” means: 
  
 (1) Indebtedness of the Company under the Credit Agreement
that was permitted to be incurred and secured under each applicable Secured Debt Document (or as to which the lenders under the Credit Agreement obtained an officers’ certificate at the time of incurrence to the effect that such Indebtedness
was permitted to be incurred and secured by all applicable Secured Debt Documents); 
  
 (2) Indebtedness of the Company under any other Credit Facility that is secured equally and ratably with the Credit Agreement by a
Priority Lien that was permitted to be incurred and so secured under each applicable Secured Debt Document; provided, in the case of any Indebtedness referred to in this clause (2), that: 
  
 (a) on or before the date on which such Indebtedness is
incurred by the Company, such Indebtedness is designated by the Company, in an officers’ certificate delivered to each Priority Lien Representative, the Priority Lien Collateral Agent and the Collateral Agent, as “Priority Lien Debt”
for the purposes of the Secured Debt Documents; provided that no Series of Secured Debt may be designated as both Parity Lien Debt and Priority Lien Debt; 
  
 (b) such Indebtedness is governed by a credit agreement or other agreement that includes a Lien Sharing and
Priority Confirmation; and 
  
 (c) all
requirements set forth in the Intercreditor Agreement as to the confirmation, grant or perfection of the Priority Lien Collateral Agent’s Lien to secure such Indebtedness or Obligations in respect thereof are satisfied (and the satisfaction of
such requirements and the other provisions of this clause (c) will be conclusively established if the Company delivers to the Priority Lien Collateral Agent and the Collateral Agent an officers’ certificate stating that such requirements
and other provisions have been satisfied and that such Indebtedness is “Priority Lien Debt”); and 
  
 (3) Hedging Obligations of the Company incurred to hedge or manage interest rate risk with respect to Priority Lien Debt; provided
that: 
  
 (a) such Hedging Obligations are
secured by a Priority Lien on all of the assets and properties that secure Indebtedness under the Credit Facility in respect of which such Hedging Obligations are incurred; and 
  
 (b) such Priority Lien is senior to or on a parity with the Priority Liens securing Indebtedness under the
Credit Facility in respect of which such Hedging Obligations are incurred. 
  
 (4) Notwithstanding the foregoing, if the sum of: (1) Indebtedness constituting principal outstanding under the Priority Lien Documents; plus (2) the aggregate face amount of any letters of credit issued but
not reimbursed under the Priority Lien Documents, is in excess of Priority Lien Cap, then only that portion of such Indebtedness and such aggregate face amount of letters of credit equal to the Priority Lien Cap shall be included in Priority Lien
Obligations and interest with respect to such Indebtedness and reimbursement obligations with respect to such letters of credit shall only constitute Priority Lien Obligations to the extent related to Indebtedness and face amounts of letters of
credit included in the Priority Lien Obligations. 
  

 24 

 “Priority Lien Documents” means the Credit Agreement and any other Credit Facility
pursuant to which any Priority Lien Debt is incurred and the Priority Lien Security Documents. 
  
 “Priority Lien Obligations” means the Priority Lien Debt and all other Obligations in respect of Priority Lien Debt. 
  
 “Priority Lien Representative” means the Credit Agreement Agent so long as the Credit Agreement is
outstanding and thereafter, in the case of any other Series of Priority Lien Debt, the trustee, agent or representative of the holders of such Series of Priority Lien Debt who maintains the transfer register for such Series of Priority Lien Debt and
is appointed as a representative of the Priority Debt (for purposes related to the administration of the Security Documents) pursuant to the Credit Agreement or other agreement governing such Series of Priority Lien Debt. 
  
 “Priority Lien Security Documents” means the Intercreditor
Agreement, each Lien Sharing and Priority Confirmation, and all security agreements, pledge agreements, collateral assignments, mortgages, deeds of trust, collateral agency agreements, control agreements or other grants or transfers for security
executed and delivered by the Company or any other Pledgor creating (or purporting to create) a Priority Lien upon Collateral in favor of the Priority Lien Collateral Agent, in each case, as amended, modified, renewed, restated or replaced, in whole
or in part, from time to time, in accordance with its terms. 
  
 “Private Placement Legend” means the legend set forth in Section 2.06(g)(1) hereof to be placed on all Notes issued under this Indenture except where otherwise permitted by the provisions of this Indenture. 

 
 “Pro Forma Cost Savings” means, with respect to any
period, the reductions in costs that occurred during the four-quarter period that are (1) directly attributable to an asset acquisition and calculated on a basis that is consistent with Article 11 of Regulation S-X under the Securities Act or
(2) implemented, committed to be implemented or the commencement of implementation of which was begun in good faith by the business that was the subject of any such asset acquisition within six months of the date of the asset acquisition and
that are supportable and quantifiable by the underlying records of such business, as if, in the case of each of clauses (1) and (2), all such reductions in costs had been effected as of the beginning of such period, decreased by any incremental
expenses incurred or to be incurred during the four-quarter period in order to achieve such reduction in costs. 
  
 “Public Equity Offering” means an offer and sale of Capital Stock (other than Disqualified Stock) of the Company, Holdings or any Parent
Company pursuant to a registration statement that has been declared effective by the SEC pursuant to the Securities Act (other than a registration statement on Form S-8 or otherwise relating to equity securities issuable under any employee benefit
plan of Holdings). 
  
 “QIB” means a
“qualified institutional buyer” as defined in Rule 144A. 
  
 “Qualified Equity Interests” means Equity Interests of Holdings other than Disqualified Stock. 
  
 “Registration Rights Agreement” means (i) the Exchange and Registration Rights Agreement dated as of the Issue Date among the
Company, the Guarantors and the initial purchasers of the notes issued on the Issue Date and (ii) any other exchange and registration rights agreement entered into in connection with an issuance of Additional Notes in a private offering after
the Issue Date “Regulation S” means Regulation S promulgated under the Securities Act. 
  
 “Regulation S Global Note” means a Regulation S Temporary Global Note or Regulation S Permanent Global Note, as appropriate. 

 

 25 

 “Regulation S Permanent Global Note” means a permanent Global Note in the form of
Exhibit A1 hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of
the Regulation S Temporary Global Note upon expiration of the Restricted Period. 
  
 “Regulation S Temporary Global Note” means a temporary Global Note in the form of Exhibit A2 hereto deposited with or on behalf of and registered in the name of the Depositary or its nominee, issued
in a denomination equal to the outstanding principal amount of the Notes initially sold in reliance on Rule 903 of Regulation S. 
  
 “Required Parity Lien Debtholders” means, at any time, the holders of more than 50% of the sum of: 
  
 (a) the aggregate outstanding principal amount of Parity
Lien Debt (including outstanding letters of credit whether or not then available or drawn); and 
  
 (b) other than in connection with the exercise of remedies, the aggregate unfunded commitments to extend credit which, when funded, would
constitute Parity Lien Debt. 
  
 For purposes of this definition,
(a) Parity Lien Debt registered in the name of, or beneficially owned by, the Company or any Affiliate of the Company will be deemed not to be outstanding, and (b) votes will be determined in accordance with the provisions described in
Section 6.2 of the Intercreditor Agreement. 
  
 “Responsible Officer,” when used with respect to the Trustee, means any officer within the Corporate Trust Administration of the Trustee (or any successor group of the Trustee) or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject. 
  
 “Restricted Definitive Note” means a Definitive Note bearing the Private Placement Legend. 
  
 “Restricted Global Note” means a Global Note bearing the Private Placement Legend. 
  
 “Restricted Investment” means an Investment other than a
Permitted Investment. 
  
 “Restricted Period”
means the 40-day distribution compliance period as defined in Regulation S. 
  
 “Restricted Subsidiary” of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary. Unless otherwise indicated, references to Restricted Subsidiaries shall
be deemed to be to Restricted Subsidiaries of Holdings, including the Company. 
  
 “Rule 144” means Rule 144 promulgated under the Securities Act. 
  
 “Rule 144A” means Rule 144A promulgated under the Securities Act. 
  
 “Rule 903” means Rule 903 promulgated under the Securities Act. 
  
 “Rule 904” means Rule 904 promulgated under the Securities
Act. 
  
 “Sale of Collateral” means any Asset
Sale involving a sale or other disposition of Collateral. 
  

 26 

 “SEC” means the Securities and Exchange Commission. 
  
 “Securities Act” means the Securities Act of 1933, as
amended. 
  
 “Secured Debt” means Parity Lien
Debt and Priority Lien Debt. 
  
 “Secured Debt
Documents” means the Parity Lien Documents and the Priority Lien Documents. 
  
 “Secured Debt Representative” means each Parity Lien Representative and each Priority Lien Representative. 
  
 “Secured Leverage Ratio” means, on any date, the ratio of: 
  
 (1) the aggregate principal amount of Secured Debt outstanding on such date plus all Indebtedness of
Restricted Subsidiaries of the Company that are not Guarantors outstanding on such date (and, for this purpose, letters of credit will be deemed to have a principal amount equal to the face amount thereof, whether or not drawn), to: 
  
 (2) the aggregate amount of the Company’s Consolidated
Cash Flow for the most recent four-quarter period for which financial information is available. 
  
 In addition, for purposes of calculating the Secured Leverage Ratio: 
  
 (1) acquisitions that have been made by the specified Person or any Restricted Subsidiary, including through
mergers or consolidations, or any Person or any Restricted Subsidiary acquired by the specified Person or any Restricted Subsidiary, and including any related financing transactions and including increases in ownership of Restricted Subsidiaries,
during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date will be given pro forma effect (in accordance with Regulation S-X under the Securities Act but giving effect to Pro Forma Cost
Savings) as if they had occurred on the first day of the four-quarter reference period; 
  
 (2) the Consolidated Cash Flow attributable to operations or businesses (and ownership interests therein) disposed of prior to the
Calculation Date will be excluded; 
  
 (3) the
Fixed Charges attributable to operations or businesses (and ownership interests therein) disposed of prior to the Calculation Date will be excluded, but only to the extent that the obligations giving rise to such Fixed Charges will not be
obligations of the specified Person or any Restricted Subsidiary following the Calculation Date; 
  
 (4) any Person that is a Restricted Subsidiary on the Calculation Date (or would become a Restricted Subsidiary on such Calculation Date
in connection with the transaction requiring determination of such Consolidated Cash Flow) will be deemed to have been a Restricted Subsidiary at all times during such four-quarter period; 
  
 (5) any Person that is not a Restricted Subsidiary on the
Calculation Date (or would cease to be a Restricted Subsidiary on such Calculation Date in connection with the transaction requiring determination of such Consolidated Cash Flow) will be deemed not to have been a Restricted Subsidiary at any time
during such four-quarter period; and 
  

 27 

 (6) if any Indebtedness bears a floating rate of interest, the interest expense on such
Indebtedness will be calculated as if the rate in effect on the Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligation applicable to such Indebtedness if such Hedging Obligation has a
remaining term as at the Calculation Date in excess of 12 months). 
  
 “Secured Obligations” means Parity Lien Obligations and Priority Lien Obligations. 
  
 “Security Documents” means the Intercreditor Agreement, each Lien Sharing and Priority Confirmation, and all security agreements, pledge
agreements, collateral assignments, mortgages, deeds of trust, collateral agency agreements, control agreements or other grants or transfers for security executed and delivered by the Company or any other Pledgor creating (or purporting to create) a
Parity Lien upon Collateral in favor of the Collateral Agent, in each case, as amended, modified, renewed, restated or replaced, in whole or in part, from time to time, in accordance with its terms and the provisions of Section 3.9 of the
Intercreditor Agreement. 
  
 “Series of Parity Lien
Debt” means, severally, the Notes and each other issue or series of Parity Lien Debt for which a single transfer register is maintained. 
  
 “Series of Priority Lien Debt” means, severally, the Indebtedness outstanding under the Credit Agreement and any other Credit Facility
that constitutes Priority Lien Debt. 
  
 “Series of
Secured Debt” means each Series of Parity Lien Debt and each Series of Priority Lien Debt. 
  
 “Shelf Registration Statement” means the Shelf Registration Statement as defined in the Registration Rights Agreement. 
  
 “Significant Subsidiary” means any Subsidiary of Holdings
that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the date of this Indenture. 
  
 “Special Interest” means (i) “Special
Interest” as defined in the Registration Rights Agreement with respect to the notes issued on the Issue Date and (ii) “Special Interest”, “Additional Interest”, “Liquidated Damages” or any similar term as such
term is defined in any registration rights agreement with respect to Additional Notes issued after the Issue Date. 
  
 “Stated Maturity” means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which the
payment of interest or principal was scheduled to be paid in the documentation governing such Indebtedness as of the date of this Indenture, and will not include any contingent obligations to repay, redeem or repurchase any such interest or
principal prior to the date originally scheduled for the payment thereof. 
  
 “Subsidiary” means, with respect to any specified Person: 
  
 (1) any corporation, company, association or other business entity of which more than 50% of the total voting power of shares of Capital
Stock entitled (without regard to the occurrence of any contingency and after giving effect to any voting agreement or stockholders’ agreement that effectively transfers voting power) to vote in the election of directors, managers or trustees
of the corporation, association or other business entity is at the time owned or controlled, 

  

 28 

 
directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and 
  
 (2) any partnership (a) the sole general partner or the
managing general partner of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are that Person or one or more Subsidiaries of that Person (or any combination thereof). 
  
 “Subsidiary Guarantor” means each Subsidiary of the Company
that executes a Note Guarantee in accordance with the provisions of this Indenture and its successors and assigns, until such Subsidiary is released from its Note Guarantee in accordance with the provisions of this Indenture. 
  
 “TIA” means the Trust Indenture Act of 1939, as amended (15
U.S.C. §§ 77aaa-77bbbb). 
  
 “Transactions” means the transactions referenced under the heading “Offering Circular Summary—The Transactions” and further described under the headings “The Acquisition,” “Use of
Proceeds,” “Capitalization,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations—History—Impact of the Transactions” and “Description of New Senior Secured Credit
Facility” in the Offering Circular. 
  
 “Treasury
Rate” means, with respect to a redemption date, the yield to maturity at the time of computation of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release
H.15(519) that has become publicly available at least two Business Days prior to such redemption date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period
from such redemption date to October 15, 2009; provided, however, that if the period from such redemption date to October 15, 2009 is not equal to the constant maturity of the United States Treasury security for which a weekly average
yield is given, the Treasury Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of United States Treasury securities for which such yields are given, except that if the
period from such redemption date to October 15, 2009 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year shall be used. 
  
 “Trustee” means Wells Fargo Bank, N.A. until a successor
replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder. 
  
 “Unrestricted Definitive Note” means a Definitive Note that does not bear and is not required to bear the Private Placement Legend.

  
 “Unrestricted Global Note” means a Global
Note that does not bear and is not required to bear the Private Placement Legend. 
  
 “Unrestricted Subsidiary” means any Subsidiary of Holdings (other than the Company) that is designated by the Board of Directors of Holdings as an Unrestricted Subsidiary pursuant to a Board
Resolution, but only to the extent that such Subsidiary: 
  
 (1) has no Indebtedness other than Non-Recourse Debt; 
  
 (2) except as permitted by Section 4.11 hereof, is not party to any agreement, contract, arrangement or understanding with Holdings
or any Restricted Subsidiary unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to Holdings or such 

  

 29 

 
Restricted Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of Holdings; 
  
 (3) is a Person with respect to which neither Holdings nor
any Restricted Subsidiary has any direct or indirect obligation (a) to subscribe for additional Equity Interests or (b) to maintain or preserve such Person’s financial condition or to cause such Person to achieve any specified levels
of operating results; and 
  
 (4) has not
guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of Holdings or any Restricted Subsidiary. 
  
 “U.S. Person” means a U.S. Person as defined in Rule 902(k) promulgated under the Securities Act. 
  
 “Voting Stock” of any Person as of any date means the
Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person. 
  
 “Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing:

  
 (1) the sum of the products obtained by
multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect of the Indebtedness, by (b) the number of years
(calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by 
  
 (2) the then outstanding principal amount of such Indebtedness. 
  
 Section 1.02 Other Definitions. 
  

			
	 Term

	  	Defined in
Section

	 “Affiliate Transaction”
	  	4.11
	 “Asset Sale Offer”
	  	3.09
	 “Authentication Order”
	  	2.02
	 “Change of Control Offer”
	  	4.15
	 “Change of Control Payment”
	  	4.15
	 “Change of Control Payment Date”
	  	4.15
	 “Covenant Defeasance”
	  	8.03
	 “DTC”
	  	2.03
	 “Event of Default”
	  	6.01
	 “Excess Proceeds”
	  	4.10
	 “incur”
	  	4.09
	 “Legal Defeasance”
	  	8.02
	 “Offer Amount”
	  	3.09
	 “Offer Period”
	  	3.09
	 “Paying Agent”
	  	2.03
	 “Payment Default”
	  	6.01
	 “Permitted Debt”
	  	4.09
	 “Purchase Date”
	  	3.09
	 “Registrar”
	  	2.03
	 “Restricted Payments”
	  	4.07

  

 30 

 Section 1.03 Incorporation by Reference of Trust Indenture Act. 
  
 Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. 
  
 The following TIA terms used in this Indenture have the following meanings: 
  
 “indenture securities” means the Notes; 
  
 “indenture security Holder” means a Holder of a Note; 
  
 “indenture to be qualified” means this Indenture; 
  
 “indenture trustee” or “institutional trustee” means the Trustee; and 
  
 “obligor” on the Notes and the Note Guarantees means the
Company and the Guarantors, respectively, and any successor obligor upon the Notes and the Note Guarantees, respectively. 
  
 All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have
the meanings so assigned to them. 
  
 Section 1.04 Rules of Construction.

  
 Unless the context otherwise requires: 
  
 (1) a term has the meaning assigned to it; 
  
 (2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP; 
  
 (3)
“or” is not exclusive; 
  
 (4) words in
the singular include the plural, and in the plural include the singular; 
  
 (5) “will” shall be interpreted to express a command; 
  
 (6) provisions apply to successive events and transactions; and 
  
 (7) references to sections of or rules under the Securities Act will be deemed to include substitute,
replacement of successor sections or rules adopted by the SEC from time to time. 
  

 31 

 ARTICLE 2 
 THE NOTES 
  
 Section 2.01 Form and Dating.

  
 (a) General. The Notes and the Trustee’s
certificate of authentication will be substantially in the form of Exhibits A1 and A2 hereto. The Notes may have notations, legends or endorsements required by law, stock exchange rule or usage. Each Note will be dated the date of its
authentication. The Notes shall be in minimum amounts of $2,000 and integral multiples of $1,000 in excess of $2,000. 
  
 The terms and provisions contained in the Notes will constitute, and are hereby expressly made, a part of this Indenture and the Company, the Guarantors
and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the
provisions of this Indenture shall govern and be controlling. 
  
 (b) Global Notes. Notes issued in global form will be substantially in the form of Exhibits A1 or A2 hereto (including the Global Note Legend thereon and the “Schedule of Exchanges of Interests in the Global Note” attached
thereto). Notes issued in definitive form will be substantially in the form of Exhibit A1 hereto (but without the Global Note Legend thereon and without the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Each
Global Note will represent such of the outstanding Notes as will be specified therein and each shall provide that it represents the aggregate principal amount of outstanding Notes from time to time endorsed thereon and that the aggregate principal
amount of outstanding Notes represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the aggregate
principal amount of outstanding Notes represented thereby will be made by the Trustee or the Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 2.06 hereof. 

 
 (c) Temporary Global Notes. Notes offered and sold in reliance on
Regulation S will be issued initially in the form of the Regulation S Temporary Global Note, which will be deposited on behalf of the purchasers of the Notes represented thereby with the Trustee, as custodian for the Depositary, and registered in
the name of the Depositary or the nominee of the Depositary for the accounts of designated agents holding on behalf of Euroclear or Clearstream, duly executed by the Company and authenticated by the Trustee as hereinafter provided. The Restricted
Period will be terminated upon the receipt by the Trustee of: 
  
 (1) a written certificate from the Depositary, together with copies of certificates from Euroclear and Clearstream certifying that they have received certification of non-United States beneficial ownership of 100% of
the aggregate principal amount of the Regulation S Temporary Global Note (except to the extent of any beneficial owners thereof who acquired an interest therein during the Restricted Period pursuant to another exemption from registration under the
Securities Act and who will take delivery of a beneficial ownership interest in a 144A Global Note or an IAI Global Note bearing a Private Placement Legend, all as contemplated by Section 2.06(b) hereof); and 
  
 (2) an Officers’ Certificate from the Company.

  
 Following the termination of the Restricted Period, beneficial
interests in the Regulation S Temporary Global Note will be exchanged for beneficial interests in the Regulation S Permanent Global Note pursuant to the Applicable Procedures. Simultaneously with the authentication of the Regulation S Permanent
Global Note, the Trustee will cancel the Regulation S Temporary Global Note. The aggregate principal amount of the Regulation S Temporary Global Note and the Regulation S Permanent Global Note may from time to time be increased or decreased by
adjustments made on the records of the Trustee and the Depositary or its nominee, as the case may be, in connection with transfers of interest as hereinafter provided. 
  

 32 

 (3) Euroclear and Clearstream Procedures Applicable. The provisions of the
“Operating Procedures of the Euroclear System” and “Terms and Conditions Governing Use of Euroclear” and the “General Terms and Conditions of Clearstream Banking” and “Customer Handbook” of Clearstream will be
applicable to transfers of beneficial interests in the Regulation S Temporary Global Note and the Regulation S Permanent Global Note that are held by Participants through Euroclear or Clearstream. 
  
 Section 2.02 Execution and Authentication. 
  
 At least one Officer must sign the Notes for the Company by manual or
facsimile signature. 
  
 If an Officer whose signature is on a
Note no longer holds that office at the time a Note is authenticated, the Note will nevertheless be valid. 
  
 A Note will not be valid until authenticated by the manual signature of the Trustee. The signature will be conclusive evidence that the Note has been
authenticated under this Indenture. 
  
 The Trustee will, upon
receipt of a written order of at least one Officer of the Company (an “Authentication Order”), authenticate Notes for original issue that may be validly issued under this Indenture, including any Additional Notes up to the aggregate
principal amount stated in paragraph 4 of the Notes. The aggregate principal amount of Notes outstanding at any time may not exceed the aggregate principal amount of Notes authorized for issuance by the Company pursuant to one or more Authentication
Orders, except as provided in Section 2.07 hereof. 
  
 The
Trustee may appoint an authenticating agent acceptable to the Company to authenticate Notes. An authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as an Agent to deal with Holders or an Affiliate of the Company. 
  
 Section 2.03 Registrar and Paying Agent. 
  
 The Company will maintain an office or agency where Notes may be presented for registration of transfer or for exchange (“Registrar”) and
an office or agency where Notes may be presented for payment (“Paying Agent”). The Registrar will keep a register of the Notes and of their transfer and exchange. The Company may appoint one or more co-registrars and one or more
additional paying agents. The term “Registrar” includes any co-registrar and the term “Paying Agent” includes any additional paying agent. The Company may change any Paying Agent or Registrar without notice to any Holder. The
Company will notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Company fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. The Company or any
of its Subsidiaries may act as Paying Agent or Registrar. 
  
 The
Company initially appoints The Depository Trust Company (“DTC”) to act as Depositary with respect to the Global Notes. 
  
 The Company initially appoints the Trustee to act as the Registrar and Paying Agent and to act as Custodian with respect to the Global Notes. 

 
 Section 2.04 Paying Agent to Hold Money in Trust. 
  
 The Company will require each Paying Agent other than the Trustee to agree
in writing that the Paying Agent will hold in trust for the benefit of Holders or the Trustee all money held by the Paying 

  

 33 

 
Agent for the payment of principal, premium or Special Interest, if any, or interest on the Notes, and will notify the Trustee of any default by the Company
in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon
payment over to the Trustee, the Paying Agent (if other than the Company or a Subsidiary) will have no further liability for the money. If the Company or a Subsidiary acts as Paying Agent, it will segregate and hold in a separate trust fund for the
benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Company, the Trustee will serve as Paying Agent for the Notes. 
  
 Section 2.05 Holder Lists. 
  
 The Trustee will preserve in as current a form as is reasonably practicable
the most recent list available to it of the names and addresses of all Holders and shall otherwise comply with TIA § 312(a). If the Trustee is not the Registrar, the Company will furnish to the Trustee at least seven Business Days before
each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders of Notes and the Company shall
otherwise comply with TIA § 312(a). 
  
 Section 2.06 Transfer and
Exchange. 
  
 (a) Transfer and Exchange of Global
Notes. A Global Note may not be transferred except as a whole by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to
a successor Depositary or a nominee of such successor Depositary. All Global Notes will be exchanged by the Company for Definitive Notes if: 
  
 (1) the Company delivers to the Trustee notice from the Depositary that it is unwilling or unable to continue to act as Depositary or that
it is no longer a clearing agency registered under the Exchange Act and, in either case, a successor Depositary is not appointed by the Company within 120 days after the date of such notice from the Depositary or 
  
 (2) there has occurred and is continuing a Default or Event
of Default with respect to the Notes. 
  
 Upon the occurrence of
either of the preceding events in (1) or (2) above, Definitive Notes shall be issued in such names as the Depositary shall instruct the Trustee. Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections
2.07 and 2.10 hereof. Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the
form of, and shall be, a Global Note. A Global Note may not be exchanged for another Note other than as provided in this Section 2.06(a), however, beneficial interests in a Global Note may be transferred and exchanged as provided in
Section 2.06(b), (c) or (f) hereof. 
  

 34 

 (b) Transfer and Exchange of Beneficial Interests in the Global Notes. The transfer and exchange
of beneficial interests in the Global Notes will be effected through the Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial interests in the Restricted Global Notes will be subject to
restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Transfers of beneficial interests in the Global Notes also will require compliance with either subparagraph (1) or (2) below, as
applicable, as well as one or more of the other following subparagraphs, as applicable: 
  
 (1) Transfer of Beneficial Interests in the Same Global Note. Beneficial interests in any Restricted Global Note may be transferred
to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Private Placement Legend; provided, however, that prior to the
expiration of the Restricted Period, transfers of beneficial interests in the Regulation S Temporary Global Note may not be made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Beneficial interests
in any Unrestricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. No written orders or instructions shall be required to be delivered to the Registrar to
effect the transfers described in this Section 2.06(b)(1). 
  
 (2) All Other Transfers and Exchanges of Beneficial Interests in Global Notes. In connection with all transfers and exchanges of beneficial interests that are not subject to Section 2.06(b)(1) above, the
transferor of such beneficial interest must deliver to the Registrar either: 
  
 (A) both: 
  
 (i) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Note
in an amount equal to the beneficial interest to be transferred or exchanged; and 
  
 (ii) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be
credited with such increase; or 
  
 (B) both:

  
 (i) a written order from a Participant or an
Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Note in an amount equal to the beneficial interest to be transferred or exchanged; and 

 
 (ii) instructions given by the Depositary to the
Registrar containing information regarding the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in (1) above; 
  
 ; provided that in no event shall Definitive Notes be issued upon the transfer or exchange of beneficial interests
in the Regulation S Temporary Global Note prior to (A) the expiration of the Restricted Period and (B) the receipt by the Registrar of any certificates required pursuant to Rule 903 under the Securities Act. 
  
 Upon consummation of an Exchange Offer by the Company in accordance with Section 2.06(f)
hereof, the requirements of this Section 2.06(b)(2) shall be deemed to have been satisfied upon receipt by the Registrar of the instructions contained in the Letter of Transmittal delivered by the Holder of such beneficial interests in the
Restricted Global Notes. Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall
adjust the principal amount of the relevant Global Note(s) pursuant to Section 2.06(h) hereof. 
  

 35 

 (3) Transfer of Beneficial Interests to Another Restricted Global Note. A
beneficial interest in any Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer complies with the requirements of
Section 2.06(b)(2) above and the Registrar receives the following: 
  
 (A) if the transferee will take delivery in the form of a beneficial interest in the 144A Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in
item (1) thereof; 
  
 (B) if the transferee
will take delivery in the form of a beneficial interest in the Regulation S Temporary Global Note or the Regulation S Permanent Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications
in item (2) thereof; and 
  
 (C) if the
transferee will take delivery in the form of a beneficial interest in the IAI Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by
item (3) thereof, if applicable. 
  
 (4)
Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in an Unrestricted Global Note. A beneficial interest in any Restricted Global Note may be exchanged by any Holder thereof for a beneficial
interest in an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Section 2.06(b)(2)
above and: 
  
 (A) such exchange or transfer is
effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder of the beneficial interest to be transferred, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (i) a Broker-Dealer, (ii) a Person participating in the distribution of the Exchange Notes or (iii) a Person who is an affiliate (as defined in Rule 144) of the Company; 
  
 (B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights Agreement; 
  
 (C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or 
  
 (D) the Registrar receives the following: 
  
 (i) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(a) thereof;
or 
  
 (ii) if the holder of such beneficial
interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit
B hereto, including the certifications in item (4) thereof; 
  

 36 

 and, in each such case set forth in this subparagraph (D), if the Registrar so requests or if the
Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and
in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act. 
  
 If any such transfer is effected pursuant to subparagraph (B) or (D) above at a time when an Unrestricted Global Note has not yet been issued,
the Company shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal
amount of beneficial interests transferred pursuant to subparagraph (B) or (D) above. 
  
 Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a
beneficial interest in a Restricted Global Note. 
  
 (c)
Transfer or Exchange of Beneficial Interests for Definitive Notes. 
  
 (1) Beneficial Interests in Restricted Global Notes to Restricted Definitive Notes. If any holder of a beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a
Restricted Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Restricted Definitive Note, then, upon receipt by the Registrar of the following documentation: 
  
 (A) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (2)(a) thereof; 
  
 (B) if such beneficial interest is being transferred to a
QIB in accordance with Rule 144A, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof; 
  
 (C) if such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule
904, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof; 
  
 (D) if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in
accordance with Rule 144, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof; 
  
 (E) if such beneficial interest is being transferred to an Institutional Accredited Investor in reliance on an exemption from the
registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in Exhibit B hereto, including the certifications, certificates and Opinion of Counsel
required by item (3) thereof, if applicable; 
  
 (F) if such beneficial interest is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(b) thereof; or 
  

 37 

 (G) if such beneficial interest is being transferred pursuant to an effective
registration statement under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(c) thereof, 
  
 the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to
Section 2.06(h) hereof, and the Company shall execute and the Trustee shall authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for
a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall deliver such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a
beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c)(1) shall bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein. 
  
 (2) Beneficial Interests in Regulation S Temporary Global
Note to Definitive Notes. Notwithstanding Sections 2.06(c)(1)(A) and (C) hereof, a beneficial interest in the Regulation S Temporary Global Note may not be exchanged for a Definitive Note or transferred to a Person who takes delivery
thereof in the form of a Definitive Note prior to (A) the expiration of the Restricted Period and (B) the receipt by the Registrar of any certificates required pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act, except in the case
of a transfer pursuant to an exemption from the registration requirements of the Securities Act other than Rule 903 or Rule 904. 
  
 (3) Beneficial Interests in Restricted Global Notes to Unrestricted Definitive Notes. A holder of a beneficial interest in a
Restricted Global Note may exchange such beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note only if: 
  
 (A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement and the holder of such beneficial interest, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is
not (i) a Broker-Dealer, (ii) a Person participating in the distribution of the Exchange Notes or (iii) a Person who is an affiliate (as defined in Rule 144) of the Company; 
  
 (B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights Agreement; 
  
 (C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or 
  
 (D) the Registrar receives the following: 
  
 (i) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest for an Unrestricted Definitive Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof; or 
  

 38 

 (ii) if the holder of such beneficial interest in a Restricted Global Note proposes to
transfer such beneficial interest to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;

  
 and, in each such case set forth in this subparagraph (D), if
the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act. 
  

(4) Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive Notes. If any holder of a beneficial interest
in an Unrestricted Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon satisfaction of the
conditions set forth in Section 2.06(b)(2) hereof, the Trustee will cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Company will execute and the
Trustee will authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(4) will
be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest requests through instructions to the Registrar from or through the Depositary and the Participant or Indirect
Participant. The Trustee will deliver such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(4) will not bear the
Private Placement Legend. 
  
 (d) Transfer and Exchange of
Definitive Notes for Beneficial Interests. 
  
 (1) Restricted Definitive Notes to Beneficial Interests in Restricted Global Notes. If any Holder of a Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note or to transfer
such Restricted Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar of the following documentation: 
  
 (A) if the Holder of such Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a Restricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (2)(b) thereof; 
  
 (B) if such Restricted Definitive Note is being transferred
to a QIB in accordance with Rule 144A, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof; 
  
 (C) if such Restricted Definitive Note is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or
Rule 904, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof; 
  
 (D) if such Restricted Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities
Act in accordance with 

  

 39 

 
Rule 144, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof; 
  
 (E) if such Restricted Definitive Note is being transferred
to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in Exhibit B
hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable; 
  
 (F) if such Restricted Definitive Note is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (3)(b) thereof; or 
  
 (G) if such Restricted Definitive Note is being transferred pursuant to an effective registration statement under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(c) thereof, 
  
 the Trustee will cancel the Restricted Definitive Note, increase or cause to be increased the aggregate principal amount of, in the case of clause
(A) above, the appropriate Restricted Global Note, in the case of clause (B) above, the 144A Global Note, in the case of clause (C) above, the Regulation S Global Note, and in all other cases, the IAI Global Note. 
  
 (2) Restricted Definitive Notes to Beneficial Interests
in Unrestricted Global Notes. A Holder of a Restricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form
of a beneficial interest in an Unrestricted Global Note only if: 
  
 (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (i) a Broker-Dealer, (ii) a Person participating in the distribution of the Exchange Notes or (iii) a Person who is an affiliate (as defined in Rule 144) of the Company;

  
 (B) such transfer is effected pursuant to the
Shelf Registration Statement in accordance with the Registration Rights Agreement; 
  
 (C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration
Rights Agreement; or 
  
 (D) the Registrar
receives the following: 
  
 (i) if the Holder of
such Definitive Notes proposes to exchange such Notes for a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(c) thereof; or 

 
 (ii) if the Holder of such Definitive Notes proposes to
transfer such Notes to a Person who shall take delivery thereof in the form of a beneficial 

  

 40 

 
interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item
(4) thereof; 
  
 and, in each such case set forth in this
subparagraph (D), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and
that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act. 
  
 Upon satisfaction of the conditions of any of the subparagraphs in this Section 2.06(d)(2), the Trustee
will cancel the Definitive Notes and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note. 
  
 (3) Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note
may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at any time. Upon receipt of
a request for such an exchange or transfer, the Trustee will cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Notes. 
  
 If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (2)(B), (2)(D) or (3) above at a time when an Unrestricted Global Note has not yet been issued, the Company will issue and, upon receipt of an Authentication Order in accordance
with Section 2.02 hereof, the Trustee will authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of Definitive Notes so transferred. 
  
 (e) Transfer and Exchange of Definitive Notes for Definitive Notes.
Upon request by a Holder of Definitive Notes and such Holder’s compliance with the provisions of this Section 2.06(e), the Registrar will register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder must present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or by its attorney,
duly authorized in writing. In addition, the requesting Holder must provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.06(e). 
  
 (1) Restricted Definitive Notes to Restricted Definitive
Notes. Any Restricted Definitive Note may be transferred to and registered in the name of Persons who take delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the following: 
  
 (A) if the transfer will be made pursuant to Rule 144A, then
the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof; 
  
 (B) if the transfer will be made pursuant to Rule 903 or Rule 904, then the transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (2) thereof; and 
  

 41 

 (C) if the transfer will be made pursuant to any other exemption from the registration
requirements of the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable. 
  
 (2) Restricted Definitive Notes to Unrestricted
Definitive Notes. Any Restricted Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Note if:

  
 (A) such exchange or transfer is effected
pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (i) a
Broker-Dealer, (ii) a Person participating in the distribution of the Exchange Notes or (iii) a Person who is an affiliate (as defined in Rule 144) of the Company; 
  
 (B) any such transfer is effected pursuant to the Shelf Registration Statement in accordance with the
Registration Rights Agreement; 
  
 (C) any such
transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or 
  
 (D) the Registrar receives the following: 
  
 (i) if the Holder of such Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted Definitive Note, a certificate
from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(d) thereof; or 
  
 (ii) if the Holder of such Restricted Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the
form of an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; 
  

and, in each such case set forth in this subparagraph (D), if the Registrar so requests, an Opinion of Counsel in form reasonably acceptable to the
Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with
the Securities Act. 
  
 (3) Unrestricted
Definitive Notes to Unrestricted Definitive Notes. A Holder of Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note. Upon receipt of a request to register
such a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof. 
  

 42 

 (f) Exchange Offer. Upon the occurrence of the Exchange Offer in accordance with the Registration
Rights Agreement, the Company will issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee will authenticate: 
  
 (1) one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of
the beneficial interests in the Restricted Global Notes accepted for exchange in the Exchange Offer by Persons that certify in the applicable Letters of Transmittal that (A) they are not Broker-Dealers, (B) they are not participating in a
distribution of the Exchange Notes and (C) they are not affiliates (as defined in Rule 144) of the Company; and 
  
 (2) Unrestricted Definitive Notes in an aggregate principal amount equal to the principal amount of the Restricted Definitive Notes
accepted for exchange in the Exchange Offer by Persons that certify in the applicable Letters of Transmittal that (A) they are not Broker-Dealers, (B) they are not participating in a distribution of the Exchange Notes and (C) they are
not affiliates (as defined in Rule 144) of the Company. 
  
 Concurrently with the issuance of such Notes, the Trustee will cause the aggregate principal amount of the applicable Restricted Global Notes to be reduced accordingly, and the Company will execute and the Trustee will authenticate and
deliver to the Persons designated by the Holders of Definitive Notes so accepted Unrestricted Definitive Notes in the appropriate principal amount. 
  
 (g) Legends. The following legends will appear on the face of all Global Notes and Definitive Notes issued under this Indenture unless specifically
stated otherwise in the applicable provisions of this Indenture. 
  
 (1) Private Placement Legend. 
  
 (A) Except as permitted by subparagraph (B) below, each Global Note and each Definitive Note (and all Notes issued in exchange therefor or substitution thereof) shall bear the legend in substantially the
following form. 
  
 “THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE
TRANSACTION COMPLYING WITH RULE 903 OR 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (4) TO AN INSTITUTIONAL ACCREDITED
INVESTOR IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE
STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.” 
  
 (B) Notwithstanding the foregoing, any Global Note or Definitive Note issued pursuant to subparagraphs (b)(4), (c)(3), (c)(4), (d)(2), (d)(3), (e)(2), (e)(3) or (f) of this Section 2.06 (and all Notes issued
in exchange therefor or substitution thereof) will not bear the Private Placement Legend. 
  

 43 

 (2) Global Note Legend. Each Global Note will bear a legend in substantially the
following form: 
  
 “THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED
IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE
REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY. 
  
 UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A 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. UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.” 
  
 (3) Regulation S Temporary Global Note Legend. The
Regulation S Temporary Global Note will bear a legend in substantially the following form: 
  
 “THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER
THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON.” 
  
 (h) Cancellation and/or Adjustment of Global Notes. At such time as all beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note will be returned to or retained and canceled by the Trustee in accordance with Section 2.11 hereof. At any
time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the
principal amount of Notes represented by such Global Note will be reduced accordingly and an endorsement will be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the
beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note will be increased accordingly and an endorsement will be made on
such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase. 
  

 44 

 (i) General Provisions Relating to Transfers and Exchanges. 
  
 (1) To permit registrations of transfers and exchanges, the
Company will execute and the Trustee will authenticate Global Notes and Definitive Notes upon receipt of an Authentication Order in accordance with Section 2.02 hereof or at the Registrar’s request. 
  
 (2) No service charge will be made to a Holder of a
beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in
connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.10, 3.06, 3.09, 4.10, 4.15 and 9.05 hereof). 
  
 (3) The Registrar will not be required to register the
transfer of or exchange of any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part. 
  
 (4) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes will be
the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange. 
  
 (5) Neither the Registrar nor the Company will be required:

  
 (A) to issue, to register the transfer of or
to exchange any Notes during a period beginning at the opening of business 15 days before the day of any selection of Notes for redemption under Section 3.02 hereof and ending at the close of business on the day of selection; 
  
 (B) to register the transfer of or to exchange any Note
selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part; or 
  
 (C) to register the transfer of or to exchange a Note between a record date and the next succeeding interest payment date. 
  
 (6) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the Company may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Notes and
for all other purposes, and none of the Trustee, any Agent or the Company shall be affected by notice to the contrary. 
  
 (7) The Trustee will authenticate Global Notes and Definitive Notes in accordance with the provisions of Section 2.02 hereof.

  
 (8) All certifications, certificates and
Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.06 to effect a registration of transfer or exchange may be submitted by facsimile. 
  
 Section 2.07 Replacement Notes. 
  
 If any mutilated Note is surrendered to the Trustee or the Company and the Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, the Company will issue and the Trustee, upon receipt of an Authentication Order, will authenticate a replacement Note if the Trustee’s 

  

 45 

 
requirements are met. If required by the Trustee or the Company, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the
Trustee and the Company to protect the Company, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced. The Company may charge for its expenses in replacing a Note. 
  
 Every replacement Note is an additional obligation of the Company and will be
entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder. 
  
 Section 2.08 Outstanding Notes. 
  
 The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation,
those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section 2.08 as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not
cease to be outstanding because the Company or an Affiliate of the Company holds the Note; however, Notes held by the Company or a Subsidiary of the Company shall not be deemed to be outstanding for purposes of Section 3.07(a) hereof.
 
  
 If a Note is replaced pursuant to Section 2.07
hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a protected purchaser. 
  
 If the principal amount of any Note is considered paid under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.

  
 If the Paying Agent (other than the Company, a Subsidiary or
an Affiliate of any thereof) holds, on a redemption date or maturity date, money sufficient to pay Notes payable on that date, then on and after that date such Notes will be deemed to be no longer outstanding and will cease to accrue interest.

  
 Section 2.09 Treasury Notes. 
  
 In determining whether the Holders of the required principal amount of Notes
have concurred in any direction, waiver or consent, Notes owned by the Company or any Guarantor, or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or any Guarantor, will
be considered as though not outstanding, except that for the purposes of determining whether the Trustee will be protected in relying on any such direction, waiver or consent, only Notes that the Trustee knows are so owned will be so disregarded.

  
 Section 2.10 Temporary Notes. 
  
 Until certificates representing Notes are ready for delivery, the Company
may prepare and the Trustee, upon receipt of an Authentication Order, will authenticate temporary Notes. Temporary Notes will be substantially in the form of certificated Notes but may have variations that the Company considers appropriate for
temporary Notes and as may be reasonably acceptable to the Trustee. Without unreasonable delay, the Company will prepare and the Trustee will authenticate definitive Notes in exchange for temporary Notes. 
  
 Holders of temporary Notes will be entitled to all of the benefits of this
Indenture. 
  

 46 

 Section 2.11 Cancellation. 
  
 The Company at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent will forward to
the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else will cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and will destroy
canceled Notes (subject to the record retention requirement of the Exchange Act). Certification of the destruction of all canceled Notes will be delivered to the Company. The Company may not issue new Notes to replace Notes that it has paid or that
have been delivered to the Trustee for cancellation. 
  
 Section 2.12 Defaulted
Interest. 
  
 If the Company defaults in a payment of
interest on the Notes, it will pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest, to the Persons who are Holders on a subsequent special record date, in each case at the rate
provided in the Notes and in Section 4.01 hereof. The Company will notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment. The Company will fix or cause to be
fixed each such special record date and payment date; provided that no such special record date may be less than 10 days prior to the related payment date for such defaulted interest. At least 15 days before the special record date, the
Company (or, upon the written request of the Company, the Trustee in the name and at the expense of the Company) will mail or cause to be mailed to Holders a notice that states the special record date, the related payment date and the amount of such
interest to be paid. 
  
 ARTICLE 3 
 REDEMPTION AND PREPAYMENT 
  
 Section 3.01 Notices to Trustee. 
  
 If the Company elects to redeem Notes pursuant to the optional redemption provisions of Section 3.07 hereof, it must furnish to the Trustee, at least
30 days but not more than 60 days before a redemption date, an Officers’ Certificate setting forth: 
  
 (1) the clause of this Indenture pursuant to which the redemption shall occur; 
  
 (2) the redemption date; 
  
 (3) the principal amount of Notes to be redeemed; and

  
 (4) the redemption price. 
  
 Section 3.02 Selection of Notes to Be Redeemed or Purchased. 
  
 If less than all of the Notes are to be redeemed or purchased in an offer to
purchase at any time, the Trustee will select Notes for redemption or purchase on a pro rata basis or as nearly a pro rata basis as is practicable except: 
  
 (1) if the Notes are listed on any national securities exchange, in compliance with the requirements of the
principal national securities exchange on which the Notes are listed; or 
  
 (2) if otherwise required by law. 
  
 If a partial redemption is made with the proceeds of one or more Public Equity Offerings pursuant to Section 3.07 hereof, selection of the Notes or portions thereof for redemption shall be made by the 

  

 47 

 
Trustee only on a pro rata basis or as nearly a pro rata basis as is practicable (subject to the procedures of The Depository Trust Company),
unless that method is otherwise prohibited. In the event of partial redemption or purchase by lot, the particular Notes to be redeemed or purchased will be selected, unless otherwise provided herein, not less than 30 nor more than 60 days prior to
the redemption or purchase date by the Trustee from the outstanding Notes not previously called for redemption or purchase. 
  
 The Trustee will promptly notify the Company in writing of the Notes selected for redemption or purchase and, in the case of any Note selected for partial
redemption or purchase, the principal amount thereof to be redeemed or purchased. Notes and portions of Notes selected will be in amounts of $1,000 or whole multiples of $1,000; except that if all of the Notes of a Holder are to be redeemed or
purchased, the entire outstanding amount of Notes held by such Holder, even if not a multiple of $1,000, shall be redeemed or purchased. Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called for
redemption or purchase also apply to portions of Notes called for redemption or purchase. 
  
 The Company may acquire Notes by means other than a redemption, whether pursuant to a tender offer, open market purchase, negotiated transaction or otherwise, so long as such acquisition does not otherwise violate the
terms of this Indenture. 
  
 Section 3.03 Notice of Redemption. 

 
 Subject to the provisions of Section 3.09 hereof, at least 30 days
but not more than 60 days before a redemption date, the Company will mail or cause to be mailed, by first class mail, a notice of redemption to each Holder whose Notes are to be redeemed at its registered address, except that redemption notices may
be mailed more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of this Indenture pursuant to Article 8 or 12 hereof. 
  
 The notice will identify the Notes to be redeemed and will state: 

 
 (1) the redemption date; 
  
 (2) the redemption price; 
  
 (3) if any Note is being redeemed in part, the portion of
the principal amount of such Note to be redeemed and that, after the redemption date upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion will be issued upon cancellation of the original Note;

  
 (4) the name and address of the Paying Agent;

  
 (5) that Notes called for redemption must be
surrendered to the Paying Agent to collect the redemption price; 
  
 (6) that, unless the Company defaults in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the redemption date; 
  
 (7) the paragraph of the Notes and/or Section of this
Indenture pursuant to which the Notes called for redemption are being redeemed; and 
  

 48 

 (8) that no representation is made as to the correctness or accuracy of the CUSIP number,
if any, listed in such notice or printed on the Notes. 
  
 At the
Company’s request, the Trustee will give the notice of redemption in the Company’s name and at its expense; provided, however, that the Company has delivered to the Trustee, at least 45 days prior to the redemption date, an
Officers’ Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph. 
  
 Section 3.04 Effect of Notice of Redemption. 
  
 Once notice of redemption is mailed in accordance with Section 3.03 hereof, Notes called for redemption become
irrevocably due and payable on the redemption date at the redemption price. A notice of redemption may not be conditional. 
  
 Section 3.05 Deposit of Redemption or Purchase Price. 
  
 One Business Day prior to the redemption or purchase date, the Company will deposit with the Trustee or with the Paying Agent money sufficient to pay the
redemption or purchase price of and accrued interest and Special Interest, if any, on all Notes to be redeemed or purchased on that date. The Trustee or the Paying Agent will promptly return to the Company any money deposited with the Trustee or the
Paying Agent by the Company in excess of the amounts necessary to pay the redemption or purchase price of, and accrued interest and Special Interest, if any, on, all Notes to be redeemed or purchased. 
  
 If the Company complies with the provisions of the preceding paragraph, on
and after the redemption or purchase date, interest will cease to accrue on the Notes or the portions of Notes called for redemption or purchase. If a Note is redeemed or purchased on or after an interest record date but on or prior to the related
interest payment date, then any accrued and unpaid interest shall be paid to the Person in whose name such Note was registered at the close of business on such record date. If any Note called for redemption or purchase is not so paid upon surrender
for redemption or purchase because of the failure of the Company to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the redemption or purchase date until such principal is paid, and to the extent lawful on
any interest not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof. 
  
 Section 3.06 Notes Redeemed or Purchased in Part. 
  
 Upon surrender of a Note that is redeemed or purchased in part, the Company will issue and, upon receipt of an Authentication Order, the Trustee will
authenticate for the Holder at the expense of the Company a new Note equal in principal amount to the unredeemed or unpurchased portion of the Note surrendered. 
  

Section 3.07 Optional Redemption. 
  
 (a) At any time prior to October 15, 2008, the Company may on any one or more occasions redeem up to 35% of the aggregate principal amount of Notes
issued under this Indenture (including any Additional Notes) at a redemption price of 112.00% of the principal amount thereof, plus accrued and unpaid interest and Special Interest, if any, on the notes to be redeemed to the redemption date, with
the net cash proceeds of one or more Public Equity Offerings that are concurrently contributed by Holdings to the Company’s common equity capital; provided that: 
  
 (1) at least 65% of the aggregate principal amount of Notes originally issued under this Indenture
(including any Additional Notes, but excluding Notes held by the Company or any of its Affiliates) remains outstanding immediately after the occurrence of such redemption; and 
  

 49 

 (2) the redemption occurs within 90 days of the date of the closing of such Public Equity
Offering. 
  
 (b) Except pursuant to the preceding paragraph and
paragraph (d) of this Section 3.07 below, the Notes will not be redeemable at the Company’s option prior to October 15, 2008. 
  
 (c) On or after October 15, 2009, the Company may on any one or more occasions redeem all or a part of the Notes upon at least 30 but not more than
60 days’ notice, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest and Special Interest, if any, on the Notes redeemed to the redemption date, if redeemed during the
twelve-month period beginning on October 15 of the years indicated below, subject to the rights of Holders on the relevant record date to receive interest on the relevant interest payment date: 
  

				
	 Year

	  	Percentage

	 
	 2009
	  	106.00	%
	 2010
	  	103.00	%
	 2011 and thereafter
	  	100.00	%

  
 Unless the Company
defaults in the payment of the redemption price, interest will cease to accrue on the Notes or portions thereof called for redemption on the redemption date. 
  
 (d) Any redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof. 
  
 At any time prior to October 15, 2009, the Company may on any one or
more occasions also redeem all or a part of the Notes, upon at least 30 but not more than 60 days prior notice mailed by first-class mail to each Holder’s registered address, at a redemption price equal to 100% of the principal amount of Notes
redeemed plus the Applicable Premium, plus accrued and unpaid interest and Special Interest, if any, on the notes to be redeemed to the date of redemption, subject to the rights of Holders on the relevant record date to receive interest due on the
relevant interest payment date; provided that in the case of any redemption in part, at least 50% of the aggregate principal amount of Notes issued under this Indenture (including any Additional Notes) remains outstanding after giving effect
to such redemption. 
  
 Calculation of the Applicable Premium will
be made by the Company or on behalf of the Company by such Person as the Company shall designate; provided, however, that such calculation shall not be a duty or obligation of the Trustee. 
  
 Section 3.08 Mandatory Redemption. 
  
 The Company is not required to make mandatory redemption or sinking fund
payments with respect to the Notes. 
  
 Section 3.09 Offer to Purchase by
Application of Excess Proceeds. 
  
 In the event that,
pursuant to Section 4.10 hereof, the Company is required to commence an offer to all Holders to purchase Notes (an “Asset Sale Offer”), it will follow the procedures specified below. 
  

 50 

 The Asset Sale Offer shall be made to all Holders and all holders of other Indebtedness that is pari
passu with the Notes containing provisions similar to those set forth in this Indenture with respect to offers to purchase or redeem with the proceeds of sales of assets. The Asset Sale Offer will remain open for a period of at least 20 Business
Days following its commencement and not more than 30 Business Days, except to the extent that a longer period is required by applicable law (the “Offer Period”). No later than three Business Days after the termination of the Offer
Period (the “Purchase Date”), the Company will apply all Excess Proceeds (the “Offer Amount”) to the purchase of Notes and such other pari passu Indebtedness (on a pro rata basis, if applicable) or, if
less than the Offer Amount has been tendered, all Notes and other Indebtedness tendered in response to the Asset Sale Offer. Payment for any Notes so purchased will be made in the same manner as interest payments are made. 
  
 If the Purchase Date is on or after an interest record date and on or before
the related interest payment date, any accrued and unpaid interest and Special Interest, if any, will be paid to the Person in whose name a Note is registered at the close of business on such record date, and no additional interest will be payable
to Holders who tender Notes pursuant to the Asset Sale Offer. 
  
 Upon the commencement of an Asset Sale Offer, the Company will send, by first class mail, a notice to the Trustee and each of the Holders, with a copy to the Trustee. The notice will contain all instructions and materials necessary to
enable such Holders to tender Notes pursuant to the Asset Sale Offer. The notice, which will govern the terms of the Asset Sale Offer, will state: 
  
 (1) that the Asset Sale Offer is being made pursuant to this Section 3.09 and Section 4.10 hereof and the length of time the
Asset Sale Offer will remain open; 
  
 (2) the
Offer Amount, the purchase price and the Purchase Date; 
  
 (3) that any Note not tendered or accepted for payment will continue to accrue interest; 
  
 (4) that, unless the Company defaults in making such payment, any Note accepted for payment pursuant to the Asset Sale Offer will cease to
accrue interest on and after the Purchase Date; 
  
 (5) that Holders electing to have a Note purchased pursuant to an Asset Sale Offer may elect to have Notes purchased in integral multiples of $1,000 only; 
  
 (6) that Holders electing to have Notes purchased pursuant to any Asset Sale Offer will be required to
surrender the Note, with the form entitled “Option of Holder to Elect Purchase” attached to the Notes completed, or transfer by book-entry transfer, to the Company, a Depositary, if appointed by the Company, or a Paying Agent at the
address specified in the notice at least three days before the Purchase Date; 
  
 (7) that Holders will be entitled to withdraw their election if the Company, the Depositary or the Paying Agent, as the case may be, receives, not later than the expiration of the Offer Period, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased; 
  
 (8) that, if the aggregate principal amount of Notes and
other pari passu Indebtedness surrendered by holders thereof exceeds the Offer Amount, the Company will select the Notes and other pari passu Indebtedness to be purchased on a pro rata basis based on the principal amount of
Notes and such other pari passu Indebtedness surrendered (with such adjustments as 

  

 51 

 
may be deemed appropriate by the Company so that only Notes in denominations of $1,000, or integral multiples thereof, will be purchased); and 
  
 (9) that Holders whose Notes were purchased only in part
will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry transfer). 
  
 On or before the Purchase Date, the Company will, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer, or if less than the Offer Amount has been tendered, all Notes tendered, and will deliver or cause to be delivered to the Trustee the Notes properly accepted together with
an Officers’ Certificate stating that such Notes or portions thereof were accepted for payment by the Company in accordance with the terms of this Section 3.09. The Company, the Depositary or the Paying Agent, as the case may be, will
promptly (but in any case not later than five days after the Purchase Date) mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes tendered by such Holder and accepted by the Company for purchase, and the Company
will promptly issue a new Note, and the Trustee, upon written request from the Company, will authenticate and mail or deliver (or cause to be transferred by book entry) such new Note to such Holder, in a principal amount equal to any unpurchased
portion of the Note surrendered. Any Note not so accepted shall be promptly mailed or delivered by the Company to the Holder thereof. The Company will publicly announce the results of the Asset Sale Offer on the Purchase Date. 
  
 Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof. 
  
 ARTICLE 4 
 COVENANTS 
  
 Section 4.01 Payment of Notes. 
  
 The Company will pay or cause to be paid the principal of, premium, if any,
and interest and Special Interest, if any, on, the Notes on the dates and in the manner provided in the Notes. Principal, premium, if any, and interest and Special Interest, if any, will be considered paid on the date due if the Paying Agent, if
other than the Company or a Subsidiary thereof, holds as of 12:00 p.m. Eastern Time on the due date money deposited by the Company in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest
then due. The Company will pay all Special Interest, if any, in the same manner on the dates and in the amounts set forth in the Registration Rights Agreement. 
  
 The Company will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal at the rate equal to 1% per annum in excess of the then applicable interest rate on the Notes to the extent lawful; it will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest and Special Interest (without regard to any applicable grace period) at the same rate to the extent lawful. 
  
 Section 4.02 Maintenance of Office or Agency. 
  
 The Company will maintain an office or agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where
Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served. The Company will give prompt written notice to the Trustee of the

  

 52 

 
location, and any change in the location, of such office or agency. If at any time the Company fails to maintain any such required office or agency or fails
to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee. 
  
 The Company may also from time to time designate one or more other offices or agencies where the Notes may be presented or
surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission will in any manner relieve the Company of its obligation to maintain an office or agency
for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. 
  
 The Company hereby designates the Corporate Trust Office of the Trustee as one such office or agency of the Company in
accordance with Section 2.03 hereof. 
  
 Section 4.03 Reports.

  
 (a) Whether or not required by the rules and regulations of
the SEC, so long as any Notes are outstanding, the Company will: 
  
 (1) furnish to the Holders of Notes or cause the Trustee to furnish to the Holders of Notes and post to its website or 
  
 (2) file with the SEC, transmit to the Trustee an electronic or paper copy of, and if the Company has a website, post to its website, in
each case, within the time periods that such reports would be required to be filed with the SEC if the rules and regulations of the SEC were applicable to the Company: 
  
 (a) all quarterly and annual reports that would be required to be filed with the SEC on Forms 10-Q and 10-K
if the Company were required to file such reports; and 
  
 (b) all current reports that would be required to be filed with the SEC on Form 8-K if the Company were required to file such reports. 
  
 All such reports will be prepared in all material respects in accordance with all of the rules and regulations applicable to such reports. Each annual
report on Form 10-K will include a report on the Company’s consolidated financial statements by the Company’s certified independent accountants. 
  
 If required by the SEC’s rules and regulations, following the consummation of the exchange offer contemplated by the Registration Rights Agreement,
the Company will file a copy of each of the reports referred to in clauses (a) and (b) above with the SEC within the time periods that such reports are required to be filed with the SEC (unless the SEC will not accept such a filing). The
Company will not take any action for the purpose of causing the SEC not to accept any such filings. 
  
 In addition, the Company and the Guarantors agree that, for so long as any notes remain outstanding, if at any time they are not required to file with the
SEC the reports specified by the preceding paragraphs, they will furnish to the Holders of Notes and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act. 
  

 53 

 If Holdings or any Parent Company has complied with the reporting requirements of Section 13 or
15(d) of the Exchange Act, if applicable, or has furnished the reports described herein with respect to such Parent Company in the manner provided above for the Company, including if applicable, by posting such reports on the Company’s website
(including any consolidating financial information required by Regulation S-X relating to the Company and the Guarantors), the Company shall be deemed to be in compliance with the provisions of this Section 4.03. 
  
 Section 4.04 Compliance Certificate. 
  
 (a) The Company and each of the Guarantors (to the extent
that such Guarantor is so required under the TIA) shall deliver to the Trustee, within 105 days after the end of each fiscal year, an Officers’ Certificate stating that a review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Company has kept, observed, performed and fulfilled its obligations under this Indenture and the Security Documents, and further
stating, as to each such Officer signing such certificate, that to the best of his or her knowledge the Company is not in default in the performance or observance of any of the terms, provisions and conditions of this Indenture and the Security
Documents (or, if a Default or Event of Default has occurred, describing all such Defaults or Events of Default of which he or she may have knowledge and what action the Company is taking or proposes to take with respect thereto) and that to the
best of his or her knowledge no event has occurred and remains in existence by reason of which payments on account of the principal of or interest, if any, on the Notes is prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto. 
  
 (b) So long as not contrary to the then current recommendations of the American Institute of Certified Public Accountants, the year-end financial statements delivered pursuant to Section 4.03 above shall be
accompanied by a written statement of the Company’s independent public accountants (who shall be a firm of established national reputation) that in making the examination necessary for certification of such financial statements, nothing has
come to their attention that would lead them to believe that the Company has violated any provisions of Article 4 or Article 5 hereof or, if any such violation has occurred, specifying the nature and period of existence thereof, it being understood
that such accountants shall not be liable directly or indirectly to any Person for any failure to obtain knowledge of any such violation. 
  
 (c) So long as any of the Notes are outstanding, the Company will deliver to the Trustee, forthwith upon any Officer becoming aware of any
Default or Event of Default, an Officers’ Certificate specifying such Default or Event of Default and what action the Company is taking or proposes to take with respect thereto. 
  
 Section 4.05 Taxes. 
  
 The Company will pay, and will cause each of its Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or where the failure to effect such payment is not adverse in any material respect to the Holders of the Notes. 
  
 Section 4.06 Stay, Extension and Usury Laws. 
  
 The Company and each of the Guarantors covenants (to the extent that it may lawfully do so) that it will not at any time
insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture;
and the Company and each of the 

  

 54 

 
Guarantors (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not, by
resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law has been enacted. 
  
 Section 4.07 Restricted Payments. 
  
 (a) Holdings will not, and will not permit any Restricted Subsidiary to,
directly or indirectly: 
  
 (1) declare or pay
any dividend or make any other payment or distribution on account of the Equity Interests of Holdings or any Restricted Subsidiary (including, without limitation, any payment in connection with any merger or consolidation involving Holdings or any
Restricted Subsidiary) or to the direct or indirect holders of the Equity Interests of Holdings or any Restricted Subsidiary in their capacity as such (other than (A) dividends or distributions payable in Qualified Equity Interests,
(B) dividends or distributions payable to Holdings or any Restricted Subsidiary and (C) any dividend, payment or distribution made on the Issue Date in connection with the Transactions; 
  
 (2) purchase, redeem or otherwise acquire or retire for
value (including, without limitation, in connection with any merger or consolidation involving Holdings) any Equity Interests of Holdings or any Parent Company; 
  
 (3) make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for
value, any Indebtedness of the Company or any Guarantor that is contractually subordinated to the notes or any Note Guarantee (excluding any Indebtedness owed to and held by Holdings or any Restricted Subsidiary), other than (1) payments of
interest or principal at the Stated Maturity thereof and (2) payments, purchases, redemptions, defeasances or other acquisitions or retirements for value in anticipation of satisfying a scheduled maturity, sinking fund or amortization or other
installment obligation or mandatory redemption, in each case, due within one year of the Stated Maturity thereof; or 
  
 (4) make any Restricted Investment 
  
 (all such payments and other actions set forth in clauses (1) through (4) above being collectively referred to as “Restricted Payments”),
unless, at the time of and after giving effect to such Restricted Payment: 
  
 (1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment; 
  

(2) Holdings would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a) hereof; and 
  
 (3) such Restricted Payment, together with the aggregate
amount of all other Restricted Payments made by Holdings and the Restricted Subsidiaries since the date of this Indenture (excluding Restricted Payments permitted by clauses (2) through (10) of paragraph (b) of this
Section 4.07), is not greater than the sum, without duplication, of: 
  
 (A) 50% of the Consolidated Net Income of Holdings for the period (taken as one accounting period) from the beginning of the first fiscal quarter following the fiscal 

  

 55 

 
quarter in which the Issue Date occurs to the end of Holdings’ most recently ended fiscal quarter for which internal financial statements are available
at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit); plus 
  
 (B) 100% of the aggregate net cash proceeds received by Holdings, and 100% of the Fair Market Value at the time of receipt of assets other
than cash, if any, received by Holdings, after the date of this Indenture as a contribution to its common equity capital or from the issue or sale of Qualified Equity Interests or from the issue or sale (other than to a Subsidiary of Holdings) of
convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of Holdings that have been converted into or exchanged for Qualified Equity Interests; plus 
  
 (C) to the extent that any Restricted Investment that was made after the date of this Indenture is sold for
cash or Holdings or a Restricted Subsidiary otherwise receives Cash Equivalents therefor, the return of capital in cash or Cash Equivalents with respect to such Restricted Investment (less the cost of disposition, if any); plus 
  
 (D) to the extent that any Unrestricted Subsidiary is
redesignated as a Restricted Subsidiary after the date of this Indenture, the Fair Market Value of the Investment of Holdings and the Restricted Subsidiaries in such Subsidiary as of the date of such redesignation. 
  
 (b) The provisions of Section 4.07(a) hereof will not prohibit:

  
 (1) the payment of any dividend within 60
days after the date of declaration of the dividend, if at the date of declaration the dividend payment would have complied with the provisions of this Indenture; 
  
 (2) the making of any Restricted Payment in exchange for, or out of the net cash proceeds of the
substantially concurrent sale (other than to a Subsidiary of Holdings) of, Qualified Equity Interests or from the substantially concurrent contribution of common equity capital to Holdings; provided that the amount of any such net cash
proceeds that is utilized for any such Restricted Payment will be excluded from clause 3(B) of Section 4.07(a) hereof; 
  
 (3) the payment, defeasance, redemption, repurchase or other acquisition or retirement for value of Indebtedness of the Company or any
Guarantor that is contractually subordinated to the notes or to any Note Guarantee with the net cash proceeds from a substantially concurrent incurrence of Permitted Refinancing Indebtedness; 
  
 (4) the payment of any dividend (or, in the case of any
partnership or limited liability company, any similar distribution) by a Restricted Subsidiary of Holdings to the holders of its Equity Interests on a pro rata basis taking into account the relative preferences, if any, of the various classes
of equity interests in such Restricted Subsidiary; 
  
 (5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of Holdings or any Restricted Subsidiary, or payments by Holdings to any Parent Company to permit, and which are used by, any Parent Company
to repurchase, redeem or otherwise acquire or retire for value any Equity Interests of any Parent Company, in each case, held by any current or former officer, director, consultant or employee of Holdings or any Restricted Subsidiary (or permitted
transferees, assigns, estates or heirs of any of the foregoing); 

  

 56 

 
provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $7.5 million in any
calendar year (excluding for purposes of calculating such amount (i) the purchase price of Equity Interests repurchased, redeemed, acquired or retired with the proceeds from the repayment of loans by Holdings or a Restricted Subsidiary made for
the purpose of purchasing such Equity Interests and (ii) any proceeds received by Holdings or a Restricted Subsidiary in connection with any resales of any Equity Interests so purchased), with unused amounts being available to be used in the
following calendar year, but not in any succeeding calendar year; 
  
 (6) the repurchase of Equity Interests deemed to occur upon the exercise of stock options to the extent such Equity Interests represent a portion of the exercise price of those stock options; 
  
 (7) the declaration and payment of dividends on Designated
Preferred Stock in accordance with the certificate of designations therefor; provided that at the time of issuance of such Designated Preferred Stock, Holdings would, after giving pro forma effect thereto as if such issuance had been made at
the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a) hereof; 
  
 (8) payments made to purchase, redeem, defease or otherwise
acquire or retire for value any Equity Interests of Holdings or any Restricted Subsidiary or any Indebtedness of the Company or any Guarantor that is contractually subordinated to the notes or to any Note Guarantee, in each case, pursuant to
provisions requiring such Person to offer to purchase, redeem, defease or otherwise acquire or retire for value such Equity Interests or subordinated Indebtedness upon the occurrence of a “change of control” or with the proceeds of
“asset sales” as defined in the charter provisions, agreements or instruments governing such Equity Interests or subordinated Indebtedness; provided, however, that a Change of Control Offer or Asset Sale Offer, as applicable,
has been made and the Company has purchased all notes validly tendered in connection with that Change of Control Offer or Asset Sale Offer; 
  
 (9) Permitted Payments to Parent; and 
  
 (10) other Restricted Payments in an aggregate amount not to exceed $5.0 million since the date of this Indenture; 
  
 provided that in the case of clause (5), (7), (8) or (10), no Default shall have
occurred and be continuing. 
  
 Not withstanding the foregoing, in
no event shall Holdings or any of its Restricted Subsidiaries make any Restricted Payments set forth in clauses (1) and (2) of the first paragraph of Section 4.07(a) prior to October 4, 2006, except, in each case to the extent
permitted under clause (2), (4), (5), (6), (8) or (9) of Section 4.07(b). 
  
 The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by Holdings or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. 
  
 For purposes of determining compliance with this Section 4.07, if a Restricted Payment meets the criteria of more than one of the exceptions described in clauses (1) through (10) above or is entitled to
be made according to the first paragraph of this Section 4.07, Holdings may, in its sole discretion, classify the Restricted Payment in any manner that complies with this Section 4.07. 
  

 57 

 Section 4.08 Dividend and Other Payment Restrictions Affecting Subsidiaries. 
  
 (a) Holdings will not, and will not permit any of Restricted Subsidiary to,
directly or indirectly, create or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary to: 
  

(1) pay dividends or make any other distributions on its Capital Stock to Holdings or any Restricted Subsidiary, or with respect to any
other interest or participation in, or measured by, its profits, or pay any Indebtedness owed to Holdings or any Restricted Subsidiary; 
  
 (2) make loans or advances to Holdings or any Restricted Subsidiary; or 
  
 (3) transfer any of its properties or assets to Holdings or any Restricted Subsidiary. 
  
 (b) However, the restrictions in Section 4.08(a) hereof will not apply
to encumbrances or restrictions existing under or by reason of: 
  
 (1) agreements governing Existing Indebtedness and Credit Facilities as in effect on the date of this Indenture and any amendments, restatements, modifications, renewals, increases, supplements, refundings,
replacements or refinancings of those agreements; provided that the amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are no more restrictive, taken as a whole, with respect to
such dividend and other payment restrictions than those contained in those agreements on the date of this Indenture; 
  
 (2) this Indenture, the Notes and the Note Guarantees 
  
 (3) applicable law, rule, regulation or order; 
  
 (4) any instrument governing Indebtedness or Capital Stock
of a Person acquired by Holdings or any Restricted Subsidiary as in effect at the time of such acquisition (except to the extent such Indebtedness or Capital Stock was incurred in connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired; provided that, in the case of Indebtedness, such Indebtedness
was permitted by the terms of this Indenture to be incurred; 
  
 (5) customary non-assignment provisions in contracts and licenses entered into in the ordinary course of business; 
  
 (6) purchase money obligations for property acquired in the ordinary course of business and Capital Lease Obligations that impose
restrictions on the property purchased or leased of the nature described in clause (3) of Section 4.08(a) hereof; 
  
 (7) any agreement for the sale or other disposition of a Restricted Subsidiary or an asset that restricts distributions by that Restricted
Subsidiary or transfers of such asset pending the sale or other disposition; 
  
 (8) Permitted Refinancing Indebtedness; provided that the restrictions contained in the agreements governing such Permitted Refinancing Indebtedness are not materially more 

  

 58 

 
restrictive, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced; 
  
 (9) Liens permitted to be incurred under the provisions of
Section 4.12 hereof that limit the right of the debtor to dispose of the assets subject to such Liens; 
  
 (10) provisions limiting the disposition or distribution of assets or property in joint venture agreements, partnership agreements,
limited liability company operating agreements, asset sale agreements, sale-leaseback agreements, stock sale agreements and other similar agreements entered into with the approval of the Board of Directors of Holdings, which limitation is applicable
only to the assets that are the subject of such agreements; 
  
 (11) restrictions on cash or other deposits or net worth imposed under contracts entered into in the ordinary course of business; and 
  
 (12) agreements governing Indebtedness permitted to be incurred pursuant to Section 4.09 hereof;
provided that the provisions relating to such encumbrance or restriction contained in such Indebtedness, taken as a whole are not materially more restrictive to the Company or Holdings, as applicable, as determined by the Board of Directors
of the Company or Holdings, as applicable, in its reasonable and good faith judgment, than the provisions contained in the Credit Agreement or this Indenture as in effect on the date of this Indenture. 
  
 Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock. 

 
 (a) Holdings will not, and will not permit any Restricted Subsidiary to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and
Holdings will not issue any Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of preferred stock; provided, however, that Holdings may incur Indebtedness (including Acquired Debt) or issue
Disqualified Stock, and any Subsidiary Guarantor may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed Charge Coverage Ratio of Holdings for its most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued, as the case may be, would have been at least (i) for any period prior
to October 4, 2007, 2.25 to 1.0 and (ii) for any period thereafter, 2.5 to 1.0, in each case, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been
incurred or the Disqualified Stock or the preferred stock had been issued, as the case may be, at the beginning of such four-quarter period. 
  
 (b) The provisions of Section 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively,
“Permitted Debt”): 
  
 (1) the
incurrence by the Company and any Guarantor of Indebtedness and letters of credit under Credit Facilities in an aggregate amount at any time outstanding under this clause (1) (with letters of credit being deemed to have an amount equal to the
maximum potential liability of Holdings and the Restricted Subsidiaries thereunder) not to exceed the greater of (a) $100.0 million less the aggregate amount of all Net Proceeds of Asset Sales applied by Holdings or any Restricted Subsidiary
since the date of this Indenture to repay any term Indebtedness under a Credit Facility or to repay any revolving credit Indebtedness under a Credit Facility and effect a corresponding commitment reduction thereunder pursuant to Section 4.10
hereof or (b) the Borrowing Base as of the date of such incurrence; 
  

 59 

 (2) the incurrence by Holdings and the Restricted Subsidiaries of the Existing
Indebtedness; 
  
 (3) the incurrence of the notes
on the Issue Date, the Note Guarantees and the exchange notes to be issued pursuant to the Registration Rights Agreement; 
  
 (4) the incurrence by Holdings or any Restricted Subsidiary of Indebtedness represented by Capital Lease Obligations, mortgage financings
or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used or useful in the business of
Holdings or any Restricted Subsidiary, and refinancings thereof, in an aggregate amount not to exceed $15.0 million at any time outstanding; 
  
 (5) the incurrence by Holdings or any of its Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or the net
proceeds of which are used to refund, refinance, replace, defease or discharge Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clauses (2), (3), or
(5) of this Section 4.09(b); 
  
 (6)
the incurrence by Holdings or any Restricted Subsidiary of intercompany Indebtedness between or among Holdings and/or any Restricted Subsidiary; provided, however, that: 
  
 (A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or
a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and 

 
 (B) (1) any subsequent issuance or transfer of Equity
Interests that results in any such Indebtedness being held by a Person other than Holdings or a Restricted Subsidiary and (2) any sale or other transfer of any such Indebtedness to a Person that is neither Holdings nor a Restricted Subsidiary

  
 will be deemed, in each case, to constitute an incurrence of
such Indebtedness by Holdings or such Restricted Subsidiary, as the case may be, that is not permitted by this clause (6); 
  
 (7) the issuance by any of the Restricted Subsidiaries to Holdings or to any Restricted Subsidiary of preferred stock; provided,
however, that: 
  
 (A) any subsequent
issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than Holdings or a Restricted Subsidiary and 
  
 (B) any sale or other transfer of any such preferred stock to a Person that is neither Holdings nor a Restricted Subsidiary, 

 
 will be deemed, in each case, to constitute an issuance of such preferred
stock by such Restricted Subsidiary that was not permitted by this clause (7); 
  

 60 

 (8) the incurrence by Holdings or any Restricted Subsidiary of Hedging Obligations in the
ordinary course of business; 
  
 (9) the
guarantee by the Company or any Guarantor of Indebtedness of Holdings or a Restricted Subsidiary that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is
subordinated to the Notes or the Note Guarantees, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed; 
  
 (10) the incurrence by Holdings or any Restricted Subsidiary of Indebtedness in respect of workers’ compensation claims,
self-insurance obligations, indemnities, bankers’ acceptances, performance, completion and surety bonds or guarantees, and similar types of obligations in the ordinary course of business; 
  
 (11) the incurrence by Holdings or any Restricted Subsidiary
of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days; 

 
 (12) the incurrence by Holdings or any Restricted
Subsidiary of Indebtedness consisting of guarantees, earn-outs, indemnities or obligations in respect of purchase price adjustments in connection with the acquisition or disposition of assets, including, without limitation, shares of Capital Stock;

  
 (13) all monetary obligations, including
fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise of Holdings or any Restricted Subsidiary arising out of any cash management, depository or other investment services provided by any Priority
Lien Collateral Agent or its Affiliates; and 
  
 (14) the incurrence by Holdings or any Restricted Subsidiary of additional Indebtedness in an aggregate amount at any time outstanding, including all Indebtedness incurred to refund, refinance, replace, defease or discharge any Indebtedness
incurred pursuant to this clause (14), not to exceed $10.0 million. 
  
 Holdings and the Company will not incur, and the Company will not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of
Holdings, the Company or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness
will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. 
  
 For purposes of determining compliance with this Section 4.09, in the
event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (14) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, the
Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit
Facilities outstanding on the Issue Date will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) above. 
  

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 The accrual of interest, the accrual of dividends, the accretion or amortization of original issue
discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Stock in the form of additional shares of the same class of Disqualified Stock will not be
deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.09; provided, in each such case, that the amount thereof is included in Fixed Charges of Holdings as accrued. Notwithstanding
any other provision of this Section 4.09, the maximum amount of Indebtedness that Holdings or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in
exchange rates or currency values. 
  
 The amount
of any Indebtedness outstanding as of any date will be: 
  
 (1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount; 
  
 (2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and 
  
 (3) in respect of Indebtedness of another Person secured by
a Lien on the assets of the specified Person, the lesser of: 
  
 (A) the Fair Market Value of such assets at the date of determination; and 
  
 (B) the amount of the Indebtedness of the other Person that is secured by such assets. 
  
 Section 4.10 Asset Sales. 
  
 Holdings will not, and will not permit any Restricted Subsidiary to,
consummate an Asset Sale unless: 
  
 (1) Holdings
(or a Restricted Subsidiary) receives consideration at the time of the Asset Sale at least equal to the Fair Market Value of the assets or Equity Interests issued or sold or otherwise disposed of; and 
  
 (2) at least 75% of the consideration received in the Asset
Sale by Holdings or such Restricted Subsidiary is in the form of cash or Cash Equivalents. For purposes of this provision, each of the following will be deemed to be cash: 
  
 (A) any liabilities, as shown on Holdings’ most recent consolidated balance sheet, of Holdings or any
Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes or any Note Guarantee) that are assumed by the transferee of any such assets pursuant to a customary novation agreement that releases Holdings or such
Restricted Subsidiary from such liabilities; 
  
 (B) any securities, notes or other obligations received by Holdings or any such Restricted Subsidiary from such transferee that are, within 180 days of the Asset Sale, converted by Holdings or such Restricted Subsidiary into cash or Cash
Equivalents, to the extent of the cash or Cash Equivalents received in that conversion; and 
  
 (C) any stock or assets of the kind referred to in clauses (2) or (4) of the next paragraph of this Section 4.10.

  

 62 

 Within 365 days after the receipt of any Net Proceeds from an Asset Sale, Holdings (or a Restricted
Subsidiary) may apply those Net Proceeds at its option: 
  
 (1) to repay Priority Lien Debt and if such Priority Lien Debt is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto; 
  
 (2) to acquire all or substantially all of the assets of, or
any Capital Stock of, a Person engaged in a Permitted Business; provided that in the case of acquisition of Capital Stock of any Person, such acquisition is permitted by Section 4.07 hereof (without giving effect to clause (4) of
the definition of “Permitted Investments”); 
  
 (3) to make a capital expenditure; or 
  
 (4) to acquire other assets that are not classified as current assets under GAAP and that are used or useful in a Permitted Business. 
  
 Pending the final application of any Net Proceeds, Holdings (or a Restricted Subsidiary) may temporarily reduce revolving credit borrowings or otherwise
invest the Net Proceeds in any manner that is not prohibited by this Indenture. 
  
 Any Net Proceeds from Asset Sales that are not applied or invested as provided in the second paragraph of this Section 4.10 will constitute “Excess Proceeds.” When the aggregate amount of Excess
Proceeds exceeds $15.0 million, the Company will make an Asset Sale Offer to all Holders of Notes and all holders of Parity Lien Debt containing provisions similar to those set forth in this Indenture with respect to offers to purchase or redeem
with the proceeds of sales of assets, the maximum principal amount of Notes and such other Parity Lien Debt that may be purchased out of the Excess Proceeds. The offer price for the Notes in any Asset Sale Offer will be equal to 100% of the
principal amount of the Notes plus accrued and unpaid interest and Special Interest thereon, if any, to the date of purchase, and will be payable in cash, and the offer or redemption price for such Parity Lien Debt shall be as set forth in the
related documentation governing such Indebtedness. If any Excess Proceeds remain after consummation of an Asset Sale Offer, the Company may use those Excess Proceeds for any purpose not otherwise prohibited by this Indenture. If the aggregate
principal amount of Notes and other Parity Lien Debt tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee will select the Notes and such other Parity Lien Debt to be purchased on a pro rata basis. Upon
completion of each Asset Sale Offer, the amount of Excess Proceeds will be reset at zero. 
  
 The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with
each repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of Section 3.09 hereof or this Section 4.10, the Company will comply with the
applicable securities laws and regulations and will not be deemed to have breached its obligations under Section 3.09 hereof or this Section 4.10 by virtue of such compliance. 
  
 Section 4.11 Transactions with Affiliates. 
  

(a) Holdings will not, and will not permit any Restricted Subsidiary to, make any payment to, or sell, lease, transfer or otherwise dispose of any of
its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of Holdings (each an
“Affiliate Transaction”), unless: 
  
 (1) the Affiliate Transaction is on terms that are not materially less favorable to Holdings or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by Holdings or such Restricted
Subsidiary with an unrelated Person; and 
  

 63 

 (2) Holdings delivers to the Trustee: 
  
 (A) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in excess of $5.0 million, a resolution of the Board of Directors of Holdings set forth in an Officers’ Certificate certifying that such Affiliate Transaction complies with clause
(1) of this Section 4.11(a) and that such Affiliate Transaction has been approved by a majority of the disinterested members of such Board of Directors; and 
  
 (B) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $20.0 million, an opinion as to the fairness to Holdings or such Restricted Subsidiary of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm of
national standing in the United States. 
  
 (b) The following
items will not be deemed to be Affiliate Transactions and, therefore, will not be subject to the provisions of Section 4.11(a) hereof: 
  
 (1) reasonable director, officer, consultant and employee compensation, benefit and indemnification agreements, plans and arrangements
entered into by Holdings or any Restricted Subsidiary in the ordinary course of business and payments pursuant thereto; 
  
 (2) transactions between or among Holdings and/or the Restricted Subsidiaries; 
  
 (3) transactions with a Person (other than an Unrestricted
Subsidiary of Holdings) that is an Affiliate of Holdings solely because Holdings owns, directly or through a Restricted Subsidiary, an Equity Interest in, or controls, such Person; 
  
 (4) any issuance of Qualified Equity Interests (and the exercise of any warrants, options or other rights to
acquire Qualified Equity Interests); 
  
 (5)
Restricted Payments that do not violate Section 4.07 hereof; 
  
 (6) loans or advances to employees of Holdings or any Restricted Subsidiary (x) in the ordinary course of business in an aggregate amount not to exceed $5.0 million at any time outstanding or (y) in
connection with the purchase by such Persons of Equity Interests of Holdings or any Parent Company so long as the cash proceeds of such purchase received by any Parent Company are contemporaneously contributed to the common equity capital of
Holdings; 
  
 (7) purchases of goods from OSIM
International Ltd. or any of its affiliates on terms that are no less favorable to Holdings or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by Holdings or such Restricted Subsidiary with an
unrelated person; 
  
 (8) Permitted Payments to
Parent; 
  

 64 

 (9) the agreements described in the Offering Circular under the caption “Certain
Relationships and Related Party Transactions,” as in effect on the date of this Indenture or as amended thereafter (so long as the amended agreement is not more disadvantageous to the Holders of the Notes, taken as a whole, in any material
respect than such agreement immediately prior to such amendment) or any transaction contemplated thereby; 
  
 (10) so long as no Event of Default exists, the existence or performance by Holdings or any Restricted Subsidiary of the provisions of a
management agreement to be entered into by Holdings or any Restricted Subsidiary and one or more of the Equity Sponsors or any of their respective affiliates, provided that the aggregate payment made pursuant to such agreement may not to exceed $1.0
million in any four quarter period; and 
  
 (11)
a payment to the Equity Sponsors on the Issue Date, not to exceed $11.0 million. 
  
 Section 4.12 Liens. 
  
 Holdings will not, and
will not permit any Restricted Subsidiary to, directly or indirectly, create, incur, assume or suffer to exist any Lien securing Indebtedness or trade payables of any kind on any asset now owned or hereafter acquired, except Permitted Liens.

  
 Section 4.13 Business Activities. 
  
 Holdings will not, and will not permit any Restricted Subsidiary to, engage
in any business other than Permitted Businesses, except to such extent as would not be material to the Company and its Restricted Subsidiaries taken as a whole. 
  

Section 4.14 Corporate Existence. 
  
 Subject to Article 5 hereof, Holdings shall do or cause to be done all things necessary to preserve and keep in full force and effect: 
  
 (1) its corporate existence, and the corporate, partnership
or other existence of each of its Subsidiaries, in accordance with the respective organizational documents (as the same may be amended from time to time) of Holdings or any such Subsidiary; and 
  
 (2) the rights (charter and statutory), licenses and
franchises of each of the Company and Holdings and its Subsidiaries; provided, however, that the each of the Company and Holdings shall not be required to preserve any such right, license or franchise, or the corporate, partnership or other
existence of any of its Subsidiaries, if the Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of each of the Company and Holdings and its Subsidiaries, taken as a whole, and that
the loss thereof is not adverse in any material respect to the Holders of the Notes. 
  
 Section 4.15 Offer to Repurchase Upon Change of Control. 
  
 (a) Upon the occurrence of a Change of Control, the Company will make an offer (a “Change of Control Offer”) to each Holder to repurchase all or any part (equal to $1,000 or an integral multiple of
$1,000) of that Holder’s Notes at a purchase price in cash equal to 101% of the aggregate principal amount of Notes repurchased plus accrued and unpaid interest and Special Interest, if any, on the Notes repurchased to the date of purchase,
subject to the rights of Holders on the relevant record date to receive interest due on the relevant interest payment date (the “Change of Control Payment”). Within 30 days 

  

 65 

 
following any Change of Control, the Company will mail a notice to each Holder describing the transaction or transactions that constitute the Change of
Control and stating: 
  
 (1) that the Change of
Control Offer is being made pursuant to this Section 4.15 and that all Notes tendered will be accepted for payment; 
  
 (2) the purchase price and the purchase date, which shall be no earlier than 30 days and no later than 60 days from the date such notice
is mailed (the “Change of Control Payment Date”); 
  
 (3) that any Note not tendered will continue to accrue interest; 
  
 (4) that, unless the Company defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the
Change of Control Offer will cease to accrue interest on and after the Change of Control Payment Date; 
  
 (5) that Holders electing to have any Notes purchased pursuant to a Change of Control Offer will be required to surrender the Notes, with
the form entitled “Option of Holder to Elect Purchase” attached to the Notes completed, or transfer by book-entry transfer, to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day
preceding the Change of Control Payment Date; 
  
 (6) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the close of business on the second Business Day preceding the Change of Control Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal amount of Notes delivered for purchase, and a statement that such Holder is withdrawing his election to have the Notes purchased; and 
  
 (7) that Holders whose Notes are being purchased only in
part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered, provided that each new Note will be in a principal amount of $2,000 or an integral multiple of $1,000. 
  
 The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the Notes as a result of a Change of Control. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of Section 3.09 hereof or this Section 4.15, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations
under Section 3.09 hereof or this Section 4.15 by virtue of such compliance. 
  
 (b) On the Change of Control Payment Date, the Company will, to the extent lawful: 
  
 (1) accept for payment all Notes or portions of Notes properly tendered pursuant to the Change of Control Offer; 
  
 (2) deposit with the Paying Agent an amount equal to the
Change of Control Payment in respect of all Notes or portions of Notes properly tendered; and 
  
 (3) deliver or cause to be delivered to the Trustee the Notes properly accepted together with an Officers’ Certificate stating the
aggregate principal amount of Notes or portions of Notes being purchased by the Company. 
  

 66 

 The Paying Agent will promptly mail (but in any case not later than five days after the Change of Control
Payment Date) to each Holder of Notes properly tendered the Change of Control Payment for such Notes, and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount
to any unpurchased portion of the Notes surrendered, if any; provided that each new Note will be in a principal amount of $2,000 or an integral multiples of $1,000. The Company will publicly announce the results of the Change of Control Offer
on or as soon as practicable after the Change of Control Payment Date. 
  
 (c) Notwithstanding anything to the contrary in this Section 4.15, the Company will not be required to make a Change of Control Offer upon a Change of Control if (1) a third party makes the Change of Control Offer in the manner,
at the times and otherwise in compliance with the requirements set forth in this Section 4.15 and Section 3.09 hereof and purchases all Notes properly tendered and not withdrawn under the Change of Control Offer or (2) notice of
redemption has been given pursuant to Section 3.07 hereof, unless and until there is a default in payment of the applicable redemption price. 
  
 (d) Notwithstanding anything to the contrary in this Section 4.15, the Company will not be required to make a Change of Control Offer if, in
connection with or in contemplation of any Change of Control, it or a third party has made an offer to purchase (an “Alternate Offer”) any and all notes validly tendered at a cash price equal to or higher than the Change of Control Payment
and has purchased all notes properly tendered in accordance with the terms of such Alternate Offer. 
  
 Section 4.16 Payments for Consent. 
  
 Holdings will not, and will not permit any Restricted Subsidiary to, directly or indirectly, pay or cause to be paid any consideration to or for the benefit of any Holder of Notes for or as an inducement to any
consent, waiver or amendment of any of the terms or provisions of this Indenture or the Notes unless such consideration is offered to be paid or is paid to all Holders of the Notes that consent, waive or agree to amend in the time frame set forth in
the solicitation documents relating to such consent, waiver or agreement. 
  
 Section 4.17 Additional Note Guarantees. 
  
 If
Holdings or any of its Restricted Subsidiaries acquires or creates another Restricted Subsidiary after the date of this Indenture and that Restricted Subsidiary guarantees any Indebtedness under any Credit Facility, then Holdings will cause that
newly acquired or created Restricted Subsidiary to execute a Note Guarantee pursuant to a supplemental indenture in form and substance satisfactory to the Trustee and deliver an Opinion of Counsel to the Trustee within 30 days of the date on which
it guarantees such Indebtedness to the effect that such supplemental indenture has been duly authorized, executed and delivered by that Restricted Subsidiary and constitutes a valid and binding agreement of that Restricted Subsidiary, enforceable in
accordance with its terms (subject to customary exceptions). The form of such Note Guarantee is attached as Exhibit E hereto. 
  
 Section 4.18 Designation of Restricted and Unrestricted Subsidiaries. 
  
 The Board of Directors of Holdings may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if that designation would not cause a Default.
If a Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate Fair Market Value of all outstanding Investments owned by Holdings and the Restricted Subsidiaries in the Subsidiary designated as an Unrestricted Subsidiary will
be deemed to be an Investment made as of the time of the designation and will reduce the amount available for Restricted Payments under Section 4.07 hereof or under one or more clauses of the definition of Permitted Investments, as determined
by Holdings. That designation will only be permitted 

  

 67 

 
if the Investment would be permitted at that time and if the Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. The Board of
Directors of Holdings may redesignate any Unrestricted Subsidiary to be a Restricted Subsidiary if that redesignation would not cause a Default. 
  
 Any designation of a Subsidiary of Holdings as an Unrestricted Subsidiary will be evidenced to the Trustee by filing with the Trustee a certified copy of
a resolution of the Board of Directors giving effect to such designation and an Officers’ Certificate certifying that such designation complied with the preceding conditions and was permitted by Section 4.07 hereof. If, at any time, any
Unrestricted Subsidiary would fail to meet the preceding requirements as an Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of such Subsidiary will be deemed to
be incurred by a Restricted Subsidiary as of such date and, if such Indebtedness is not permitted to be incurred as of such date under Section 4.09 hereof, the Company will be in default of such covenant. The Board of Directors of Holdings may
at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such designation will be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation will only be permitted if (1) such Indebtedness is permitted under Section 4.09 hereof, calculated on a pro forma basis as if such designation had occurred at the beginning of the four-quarter reference
period; and (2) no Default or Event of Default would be in existence following such designation. 
  
 ARTICLE 5 
 SUCCESSORS 
  
 Section 5.01 Merger, Consolidation or Sale of Assets. 
  
 (a) The Company may not, directly or indirectly: (1) consolidate or
merge with or into another Person (whether or not the Company is the surviving Person); or (2) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Company and its Restricted
Subsidiaries taken as a whole, in one or more related transactions, to another Person, unless: 
  
 (1) either: 
  
 (A) the Company is the surviving Person; or 
  
 (B) the Person formed by or surviving any such consolidation or merger (if other than the Company) or to which such sale, assignment,
transfer, conveyance or other disposition has been made (i) is a corporation, limited liability company or limited partnership organized or existing under the laws of the United States, any state of the United States or the District of Columbia
and (ii) assumes all the obligations of the Company under the Notes, this Indenture and the Registration Rights Agreement pursuant to agreements reasonably satisfactory to the Trustee; 
  
 (2) immediately after such transaction, no Default or Event
of Default exists; and 
  
 (3) either:

  
 (A) the Company or the Person formed by or
surviving any such consolidation or merger (if other than the Company), or to which such sale, assignment, transfer, conveyance or other disposition has been made, will, on the date of such transaction after giving pro forma effect thereto and to
any related financing transactions as if the same had occurred at the beginning of the applicable four-quarter period, be permitted to incur 

  

 68 

 
at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a) hereof or 
  
 (B) the Fixed Charge Coverage Ratio of Holdings or the
Person formed by or surviving any such consolidation or merger (if other than the Company), or to which such sale, assignment, transfer, conveyance or other disposition has been made, after giving effect to the transaction and any related
financings, would not be less than the Fixed Charge Coverage Ratio of Holdings immediately prior to such transaction. 
  
 In addition, the Company may not, directly or indirectly, lease all or substantially all of its properties or assets, in one or more related transactions,
to any other Person. 
  
 For purposes of the foregoing, the
transfer (by lease, assignment, sale or otherwise, in a single transaction or series of transactions) of all or substantially all of the properties or assets of one or more Restricted Subsidiaries, the Equity Interests of which constitute all or
substantially all of the properties and assets of the Company, will be deemed to be the transfer of all or substantially all of the properties and assets of the Company. 
  
 (b) Holdings may not, directly or indirectly (1) consolidate or merge with or into another Person (whether or not
Holdings is the surviving Person); or (2) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of Holdings and the Restricted Subsidiaries taken as a whole, in one or more related
transactions, to another Person unless, 
  
 (1)
either 
  
 (A) Holdings is the surviving Person;
or 
  
 (B) the Person formed by or surviving any
such consolidation or merger (if other than Holdings) or to which such sale, assignment, transfer, conveyance or other disposition has been made (i) a corporation, limited liability company or limited partnership organized or existing under the
laws of the United States, any state of the United States or the District of Columbia and (ii) assumes all the obligations of Holdings under the Note Guarantee, this Indenture and the Registration Rights Agreement pursuant to agreements
reasonably satisfactory to the Trustee; 
  
 (2)
immediately after such transaction, no Default or Event of Default exists; and 
  
 (3) either 
  
 (A) Holdings or the Person formed by or surviving any such consolidation or merger (if other than Holdings), or to which such sale,
assignment, transfer, conveyance or other disposition has been made will, on the date of such transaction after giving pro forma effect thereto and any related financing transactions as if the same had occurred at the beginning of the applicable
four-quarter period, be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a) hereof or 
  
 (B) the Fixed Charge Coverage Ratio of Holdings or the Person formed by or surviving any such consolidation
or merger (if other than Holdings), or to which such sale, assignment, transfer, conveyance or other disposition has been made, after giving 

  

 69 

 
effect to the transaction and any related financings, would not be less than the Fixed Charge Coverage Ratio of Holdings immediately prior to such
transaction. 
  
 In addition, Holdings may not, directly or
indirectly, lease all or substantially all of its properties or assets, in one or more related transactions, to any other Person. 
  
 For purposes of the foregoing, the transfer (by lease, assignment, sale or otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more Restricted Subsidiaries, the Equity Interests of which constitute all or substantially all of the properties and assets of Holdings, will be deemed to be the transfer of all or
substantially all of the properties and assets of Holdings. 
  
 (c) This Section 5.01 will not apply to a merger of the Company or a Guarantor with an Affiliate solely for the purpose, and with the effect, of reincorporating the Company or such Guarantor, as the case may be, in another jurisdiction
of the United States. In addition, nothing in this Section 5.01 will prohibit any Restricted Subsidiary from consolidating or amalgamating with, merging with or into or conveying, transferring or leasing, in one transaction or a series of
transactions, all or substantially all of its assets to Holdings or another Restricted Subsidiary. 
  
 Section 5.02 Successor Corporation Substituted. 
  
 Upon any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the properties or assets of the Company in a transaction that is subject to,
and that complies with the provisions of, Section 5.01 hereof, the successor Person formed by such consolidation or into or with which the Company is merged or to which such sale, assignment, transfer, lease, conveyance or other disposition is
made shall succeed to, and be substituted for (so that from and after the date of such consolidation, merger, sale, assignment, transfer, lease, conveyance or other disposition, the provisions of this Indenture referring to the “Company”
shall refer instead to the successor Person and not to the Company), and may exercise every right and power of the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein; provided,
however, that the predecessor Company shall not be relieved from the obligation to pay the principal of and interest on the Notes except in the case of a sale of all of the Company’s assets in a transaction that is subject to, and that
complies with the provisions of, Section 5.01 hereof. 
  
 ARTICLE 6 
 DEFAULTS AND REMEDIES 
  
 Section 6.01 Events of Default. 
  
 Each of the following is an “Event of Default”: 
  

(1) default for 30 days in the payment when due of interest on, or Special Interest, if any, with respect to, the Notes; 
  
 (2) default in the payment when due (at maturity, upon
redemption or otherwise) of the principal of, or premium, if any, on, the Notes; 
  
 (3) failure by Holdings or any Restricted Subsidiary to comply (a) for 30 days after written notice with Sections 4.10 and 4.15
hereof or (b) with Section 5.01 hereof; 
  

 70 

 (4) failure by Holdings or any Restricted Subsidiary for 60 days after written notice has
been given to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in aggregate principal amount of the Notes then outstanding voting as a single class to comply with any of the other agreements in this
Indenture; 
  
 (5) default under any mortgage,
indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by Holdings or any Restricted Subsidiary (or the payment of which is guaranteed by Holdings or any Restricted
Subsidiary), whether such Indebtedness or guarantee now exists, or is created after the date of this Indenture, if that default: 
  
 (A) is caused by a failure to pay any such Indebtedness at its stated final maturity after giving effect to any applicable grace periods
(a “Payment Default”); or 
  
 (B) results in the acceleration of such Indebtedness prior to its stated final maturity, 
  
 and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has
been a Payment Default or the maturity of which has been so accelerated, aggregates $20.0 million or more; 
  
 (6) failure by Holdings or any Restricted Subsidiary to pay final judgments entered by a court or courts of competent jurisdiction
aggregating in excess of $20.0 million in excess of amounts that are covered by insurance, which judgments are not paid, discharged or stayed for a period of 60 days; 
  
 (7) the occurrence of any of the following: 
  
 (a) except as permitted by this Indenture, any Security Document ceases for any reason to be fully
enforceable; provided, that it will not be an Event of Default under this clause (7)(a) if the sole result of the failure of one or more Security Documents to be fully enforceable is that any Parity Lien purported to be granted under
such Security Documents on Collateral, individually or in the aggregate, having a Fair Market Value of not more than $20.0 million ceases to be an enforceable and perfected second-priority Lien, subject only to Permitted Prior Liens; 
  
 (b) any Parity Lien purported to be granted under any
Security Document on Collateral, individually or in the aggregate, having a Fair Market Value in excess of $20.0 million ceases to be an enforceable and perfected second-priority Lien, subject only to Permitted Prior Liens; or 
  
 (c) the Company or any other Pledgor, or any Person acting
on behalf of any of them, denies or disaffirms, in writing, any obligation of the Company or any other Pledgor set forth in or arising under any Security Document; and 
  
 (8) the Company, Holdings or any of its Restricted Subsidiaries that is a Significant Subsidiary or any
group of Restricted Subsidiaries of Holdings that, taken together, would constitute a Significant Subsidiary pursuant to or within the meaning of Bankruptcy Law: 
  
 (A) commences a voluntary case, 
  

 71 

 (B) consents to the entry of an order for relief against it in an involuntary case,

  
 (C) consents to the appointment of a
custodian of it or for all or substantially all of its property, 
  
 (D) makes a general assignment for the benefit of its creditors, or 
  
 (E) generally is not paying its debts as they become due; 
  
 (9) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: 

 
 (A) is for relief against the Company, Holdings or any of
its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries of Holdings that, taken together, would constitute a Significant Subsidiary in an involuntary case; 
  
 (B) appoints a custodian of the Company, Holdings or any of
its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries of the Holdings that, taken together, would constitute a Significant Subsidiary or for all or substantially all of the property of Holdings or any
of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries of Holdings that, taken together, would constitute a Significant Subsidiary; or 
  
 (C) orders the liquidation of the Company, Holdings or any of its Restricted Subsidiaries that is a
Significant Subsidiary or any group of Restricted Subsidiaries of Holdings that, taken together, would constitute a Significant Subsidiary; 
  
 and the order or decree remains unstayed and in effect for 60 consecutive days; or 
  
 (10) except as permitted by this Indenture, the Note
Guarantee of Holdings or any Restricted Subsidiary that is a Significant Subsidiary shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect, or any Guarantor, or any Person
acting on behalf of any Guarantor, shall deny or disaffirm its obligations under its Note Guarantee. 
  
 Section 6.02 Acceleration. 
  
 In the case of an Event of Default specified in clause (8) or (9) of Section 6.01 hereof, with respect to Holdings, the Company, any Restricted Subsidiary that is a Significant Subsidiary or any group of Restricted
Subsidiaries that, taken together, would constitute a Significant Subsidiary, all outstanding Notes will become due and payable immediately without further action or notice. If any other Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately. 
  
 Upon any such declaration, the Notes shall become due and payable immediately. 
  
 The Holders of a majority in aggregate principal amount of the then outstanding Notes by written notice to the Trustee may,
on behalf of all of the Holders, rescind an acceleration or waive any existing Default or Event of Default and its consequences, if the rescission would not conflict with any judgment or decree and if all existing Events of Default (except
nonpayment of principal, interest or premium or 

  

 72 

 
Special Interest, if any, that has become due solely because of the acceleration) have been cured or waived. 
  
 If an Event of Default occurs on or after October 15, 2009 by reason of
any willful action (or inaction) taken (or not taken) by or on behalf of the Company with the intention of avoiding payment of the premium that the Company would have had to pay if the Company then had elected to redeem the Notes pursuant to
Section 3.07 hereof, then, upon acceleration of the Notes, an equivalent premium shall also become and be immediately due and payable, to the extent permitted by law, anything in this Indenture or in the Notes to the contrary notwithstanding.
If an Event of Default occurs prior to October 15, 2009 by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the Company with the intention of avoiding the prohibition on redemption of the Notes prior to such
date, then, upon acceleration of the Notes, an additional premium shall also become immediately due and payable, to the extent permitted by law, in an amount, for each of the years beginning on October 15 of the years set forth below, as set
forth below (expressed as a percentage of the principal amount of the Notes on the date of payment that would otherwise be due but for the provisions of this sentence): 
  

				
	 Year

	  	Percentage

	 
	 2005
	  	12.0	%
	 2006
	  	10.5	%
	 2007
	  	9.0	%
	 2008
	  	7.5	%
	 2009
	  	6.0	%

  
 Section 6.03 Other Remedies.

  
 If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy to collect the payment of principal, premium and Special Interest, if any, and interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture. 
  
 The Trustee may maintain a proceeding even if it does not possess any of the
Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of a Note in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or
acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law. 
  
 Section 6.04 Waiver of Past Defaults. 
  
 Holders of not less than a majority in aggregate principal amount of the then outstanding Notes by written notice to the Trustee may on behalf of the Holders of all of the Notes rescind an acceleration or waive any
existing Default or Event of Default and its consequences hereunder, except a continuing Default or Event of Default in the payment of the principal of, premium and Special Interest, if any, or interest on, the Notes (including in connection with an
offer to purchase); provided, however, that the Holders of a majority in aggregate principal amount of the then outstanding Notes may rescind an acceleration and its consequences, including any related payment default that resulted from such
acceleration. Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon. 
  

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 Section 6.05 Control by Majority. 
  
 Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the time, method and place of
conducting any proceeding for exercising any remedy available to the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture that the Trustee
determines may be unduly prejudicial to the rights of other Holders of Notes or that may involve the Trustee in personal liability. 
  
 Section 6.06 Limitation on Suits. 
  
 Except to enforce the right to receive payment of principal, premium, if any, or interest when due, no Holder of a Note may pursue any remedy with respect
to this Indenture or the Notes unless: 
  
 (1)
such Holder has previously given to the Trustee written notice that an Event of Default is continuing; 
  
 (2) Holders of at least 25% in aggregate principal amount of the then outstanding Notes have requested in writing that the Trustee pursue
the remedy; 
  
 (3) such Holder or Holders have
offered the Trustee reasonable security or indemnity against any loss, liability or expense; 
  
 (4) the Trustee has not complied with such request within 60 days after receipt of the request and the offer of security or indemnity; and

  
 (5) Holders of a majority in aggregate
principal amount of the outstanding Notes have not given the Trustee a written direction inconsistent with such request within such 60-day period. 
  
 A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a Note or to obtain a preference or priority over another
Holder of a Note. 
  
 Section 6.07 Rights of Holders of Notes to Receive
Payment. 
  
 Notwithstanding any other provision of this
Indenture, the right of any Holder of a Note to receive payment of principal, premium and Special Interest, if any, and interest on the Note, on or after the respective due dates expressed in the Note (including in connection with an offer to
purchase), or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder. 
  
 Section 6.08 Collection Suit by Trustee. 
  
 If an Event of Default specified in Section 6.01(1) or (2) hereof occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against the Company for the whole amount of principal of, premium and Special Interest, if any, and interest remaining unpaid on the Notes and interest on overdue principal and, to the extent lawful,
interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel. 
  
 Section 6.09 Trustee May File Proofs of Claim. 
  
 The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the 

  

 74 

 
Holders of the Notes allowed in any judicial proceedings relative to the Company (or any other obligor upon the Notes), its creditors or its property and
shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due
the Trustee under Section 7.07 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities
and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding. 
  
 Section 6.10 Priorities. 
  
 If the Trustee collects any money pursuant to this Article 6, it shall pay
out the money in the following order: 
  
 First: to the Trustee, its agents and attorneys for amounts due under Section 7.07 hereof, including payment of all compensation, expenses and liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection; 
  
 Second: to
Holders of Notes for amounts due and unpaid on the Notes for principal, premium and Special Interest, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal,
premium and Special Interest, if any and interest, respectively; and 
  
 Third: to the Company or to such party as a court of competent jurisdiction shall direct. 
  
 The Trustee may fix a record date and payment date for any payment to Holders of Notes pursuant to this Section 6.10. 
  
 Section 6.11 Undertaking for Costs. 
  
 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 or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion
may assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not
apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in aggregate principal amount of the then outstanding Notes. 
  

 75 

 ARTICLE 7 
 TRUSTEE 
  
 Section 7.01 Duties of Trustee.

  
 (a) If an Event of Default has occurred and is continuing,
the Trustee will exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s
own affairs. 
  
 (b) Except during the continuance of an Event of
Default: 
  
 (1) the duties of the Trustee will
be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and 
  
 (2) in the
absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements
of this Indenture. However, the Trustee will examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture. 
  
 (c) The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its
own willful misconduct, except that: 
  
 (1) this
paragraph does not limit the effect of paragraph (b) of this Section 7.01; 
  
 (2) the Trustee will not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and 
  
 (3) the Trustee will not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05 hereof. 
  
 (d) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b), and (c) of this Section 7.01. 
  
 (e) No provision of this Indenture will require the Trustee to expend or risk its own funds or incur any liability. The Trustee will be under no
obligation to exercise any of its rights and powers under this Indenture at the request of any Holders, unless such Holder has offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense. 
  
 (f) The Trustee will not be liable for interest on any money received by it
except as the Trustee may agree in writing with the Company and except to the extent required by law or any other provision of this Indenture. Money held in trust by the Trustee need not be segregated from other funds except to the extent required
by law. 
  
 Section 7.02 Rights of Trustee. 
  
 (a) The Trustee may conclusively rely upon any document believed by it to be
genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document. 
  

 76 

 (b) Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate or, to
the extent required under the TIA, an Opinion of Counsel or both. The Trustee will not be liable for any action it takes or omits to take in good faith in reliance on such Officers’ Certificate or Opinion of Counsel. The Trustee may consult
with counsel and the written advice of such counsel or any Opinion of Counsel will be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance
thereon. 
  
 (c) The Trustee may act through its attorneys and
agents and will not be responsible for the misconduct or negligence of any agent appointed with due care. 
  
 (d) The Trustee will not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers
conferred upon it by this Indenture. 
  
 (e) Unless otherwise
specifically provided in this Indenture, any demand, request, direction or notice from the Company will be sufficient if signed by an Officer of the Company. 
  
 (f) The Trustee will be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of
the Holders unless such Holders have offered to the Trustee reasonable indemnity or security against the losses, liabilities and expenses that might be incurred by it in compliance with such request or direction. 
  
 (g) The Trustee shall not be deemed to have knowledge of any Default or Event
of Default hereunder unless (i) such Default is a default under Section 6.01(1) or (2) or (ii) the Trustee has been notified in writing of such Default or Event of Default by the Company or a Holder. 
  
 Section 7.03 Individual Rights of Trustee. 
  
 The Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may otherwise deal with the Company or any Affiliate of the Company with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest it must eliminate such
conflict within 90 days, apply to the SEC for permission to continue as Trustee (if this Indenture has been qualified under the TIA) or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and
7.11 hereof. 
  
 Section 7.04 Trustee’s Disclaimer. 
  
 The Trustee will not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Notes, it shall not be accountable for the Company’s use of the proceeds from the Notes or any money paid to the Company or upon the Company’s direction under any provision of this
Indenture, it will not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it will not be responsible for any statement or recital herein or any statement in the Notes or any other document
in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication. In addition, the Trustee shall not be responsible for filing any financing or continuation statements or recording any documents or
instruments in any public office at any time or times or otherwise perfecting or maintaining the perfection of any Liens on the Collateral nor for monitoring the actions of the Collateral Agent with respect to the same. Delivery of reports,
financial information and other documents (other than Officer’s Certificates) required to be delivered to the Trustee under this Indenture are for central collection purposes only and shall not constitute constructive notice of anything
contained therein. The Trustee shall have no obligation to review such documents or determine whether the information contained therein would demonstrate the existence of a Default or an Event of Default. 
  

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 Section 7.05 Notice of Defaults. 
  
 If a Default or Event of Default occurs and is continuing and if it is known to the Trustee, the Trustee will mail to
Holders of Notes a notice of the Default or Event of Default within 90 days after it occurs. Except in the case of a Default or Event of Default in payment of principal of, premium or Special Interest, if any, or interest on, any Note, the Trustee
may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of the Holders of the Notes. 
  
 Section 7.06 Reports by Trustee to Holders of the Notes. 
  
 (a) Within 60 days after each May 15 beginning with the May 15 following the date of this Indenture, and for so
long as Notes remain outstanding, the Trustee will mail to the Holders of the Notes a brief report dated as of such reporting date that complies with TIA § 313(a) (but if no event described in TIA § 313(a) has occurred within the
twelve months preceding the reporting date, no report need be transmitted). The Trustee also will comply with TIA § 313(b)(2). The Trustee will also transmit by mail all reports as required by TIA § 313(c). 
  
 (b) A copy of each report at the time of its mailing to the Holders of Notes
will be mailed by the Trustee to the Company and filed by the Trustee with the SEC and each stock exchange on which the Notes are listed in accordance with TIA § 313(d). The Company will promptly notify the Trustee when the Notes are
listed on any stock exchange. 
  
 Section 7.07 Compensation and Indemnity.

  
 (a) The Company will pay to the Trustee from time to time
reasonable compensation for its acceptance of this Indenture and services hereunder. The Trustee’s compensation will not be limited by any law on compensation of a trustee of an express trust. The Company will reimburse the Trustee promptly
upon request for all reasonable and customary disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses will include the reasonable and customary compensation, disbursements and
expenses of the Trustee’s agents and counsel. 
  
 (b) The
Company and the Guarantors will indemnify the Trustee against any and all losses, liabilities or expenses incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, including the costs
and expenses of enforcing this Indenture against the Company and the Guarantors (including this Section 7.07) and defending itself against any claim (whether asserted by the Company, the Guarantors, any Holder or any other Person) or liability
in connection with the exercise or performance of any of its powers or duties hereunder, except to the extent any such loss, liability or expense may be attributable to its negligence or bad faith. The Trustee will notify the Company in writing
promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Company will not relieve the Company or any of the Guarantors of their obligations hereunder. The Company or such Guarantor will defend the claim and the
Trustee will cooperate in the defense. The Trustee may have separate counsel and the Company will pay the reasonable fees and expenses of such counsel. Neither the Company nor any Guarantor need pay for any settlement made without its consent, which
consent will not be unreasonably withheld. 
  
 (c) The obligations
of the Company and the Guarantors under this Section 7.07 will survive the satisfaction and discharge of this Indenture. 
  

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 (d) To secure the Company’s and the Guarantors’ payment obligations in this Section 7.07,
the Trustee will have a Lien prior to the Notes on all money or property held or collected by the Trustee, except that held in trust to pay principal and interest on particular Notes. Such Lien will survive the satisfaction and discharge of this
Indenture. 
  
 (e) When the Trustee incurs expenses or renders
services after an Event of Default specified in Sections 6.01(8) or (9) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of
administration under any Bankruptcy Law. 
  
 (f) The Trustee will
comply with the provisions of TIA § 313(b)(2) to the extent applicable. 
  
 Section 7.08 Replacement of Trustee. 
  
 (a) A
resignation or removal of the Trustee and appointment of a successor Trustee will become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section 7.08. 
  
 (b) The Trustee may resign in writing at any time and be discharged from the
trust hereby created by so notifying the Company. The Holders of a majority in aggregate principal amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Company in writing. The Company may remove the Trustee
if: 
  
 (1) the Trustee fails to comply with
Section 7.10 hereof; 
  
 (2) the Trustee is
adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law; 
  
 (3) a custodian or public officer takes charge of the Trustee or its property; or 
  
 (4) the Trustee becomes incapable of acting. 
  
 (c) If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company will promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in aggregate principal amount of the then outstanding Notes may appoint a successor
Trustee to replace the successor Trustee appointed by the Company. 
  
 (d) If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company, or the Holders of at least 10% in aggregate principal amount of the then outstanding Notes
may petition any court of competent jurisdiction for the appointment of a successor Trustee. 
  
 (e) If the Trustee, after written request by any Holder who has been a Holder for at least six months, fails to comply with Section 7.10 hereof, such Holder may petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee. 
  
 (f) A successor Trustee will deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon, the resignation or removal of the retiring Trustee will become effective, and the successor Trustee will
have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee will mail a notice of its succession to Holders. The retiring Trustee will promptly transfer all property held by it as Trustee to the successor
Trustee; provided all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.07 hereof. 

  

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Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Company’s obligations under Section 7.07 hereof will continue
for the benefit of the retiring Trustee. 
  
 Section 7.09 Successor Trustee by
Merger, etc. 
  
 If the Trustee consolidates, merges or
converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act will be the successor Trustee. 
  
 Section 7.10 Eligibility; Disqualification. 
  
 There will at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities
and that has a combined capital and surplus of at least $100.0 million as set forth in its most recent published annual report of condition. 
  
 This Indenture will always have a Trustee who satisfies the requirements of TIA § 310(a)(1), (2) and (5). The Trustee is subject to TIA
§ 310(b). 
  
 Section 7.11 Preferential Collection of Claims Against
Company. 
  
 The Trustee is subject to TIA
§ 311(a), excluding any creditor relationship listed in TIA § 311(b). A Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the extent indicated therein. 
  
 ARTICLE 8 
 LEGAL DEFEASANCE AND COVENANT DEFEASANCE 
  
 Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance. 
  
 The Company may at any time, at the option of its Board of Directors evidenced by a resolution set forth in an Officers’ Certificate, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon compliance with the conditions set forth below in this Article 8. 
  
 Section 8.02 Legal Defeasance and Discharge. 
  
 Upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section 8.02, the Company and each of the Guarantors
will, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged from their obligations with respect to all outstanding Notes (including the Note Guarantees) on the date the conditions set
forth below are satisfied (hereinafter, “Legal Defeasance”). For this purpose, Legal Defeasance means that the Company and the Guarantors will be deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes (including the Note Guarantees), which will thereafter be deemed to be “outstanding” only for the purposes of Section 8.05 hereof and the other Sections of this Indenture referred to in clauses (1) and
(2) below, and to have satisfied all their other obligations under such Notes, the Note Guarantees and this Indenture (and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging the same),
except for the following provisions which will survive until otherwise terminated or discharged hereunder: 
  
 (1) the rights of Holders of outstanding Notes to receive payments in respect of the principal of, or interest or premium and Special
Interest, if any, on such Notes when such payments are due from the trust referred to in Section 8.04 hereof; 
  

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 (2) the Company’s obligations with respect to such Notes under Article 2 and
Section 4.02 hereof; 
  
 (3) the rights,
powers, trusts, duties and immunities of the Trustee hereunder and the Company’s and the Guarantors’ obligations in connection therewith; and 
  
 (4) this Article 8. 
  
 Subject to compliance with this Article 8, the Company may exercise its option under this Section 8.02 notwithstanding the prior exercise of its
option under Section 8.03 hereof. 
  
 Section 8.03 Covenant
Defeasance. 
  
 Upon the Company’s exercise under
Section 8.01 hereof of the option applicable to this Section 8.03, the Company and each of the Guarantors will, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from each of their obligations
under the covenants contained in Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17 and 4.18 hereof and clause (a)(3)(A) of Section 5.01 hereof with respect to the outstanding Notes on and after the date the conditions set
forth in Section 8.04 hereof are satisfied (hereinafter, “Covenant Defeasance”), and the Notes will thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of
Holders (and the consequences of any thereof) in connection with such covenants, but will continue to be deemed “outstanding” for all other purposes hereunder (it being understood that such Notes will not be deemed outstanding for
accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes and Note Guarantees, the Company and the Guarantors may omit to comply with and will have no liability in respect of any term, condition or
limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and
such omission to comply will not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such Notes and Note Guarantees will be unaffected thereby. In addition,
upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections 6.01(3) through 6.01(5) hereof will not
constitute Events of Default. 
  
 Section 8.04 Conditions to Legal or Covenant
Defeasance. 
  
 In order to exercise either Legal Defeasance
or Covenant Defeasance under either Section 8.02 or 8.03 hereof: 
  
 (1) the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of the Notes, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in amounts as will
be sufficient, without consideration of any reinvestment of interest, in the opinion of an investment bank, appraisal firm, or firm of independent public accountants nationally recognized in the United States, to pay the principal of, or interest
and premium and Special Interest, if any, on the outstanding Notes on the Stated Maturity thereof or on the applicable redemption date, as the case may be, and the Company must specify whether the Notes are being defeased to maturity or to a
particular redemption date; 
  

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 (2) in the case of an election under Section 8.02 hereof, the Company must deliver
to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that: 
  
 (A) the Company has received from, or there has been published by, the Internal Revenue Service a ruling; or 
  
 (B) since the date of this Indenture, there has been a
change in the applicable federal income tax law, 
  
 in either
case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be
subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred; 
  
 (3) in the case of an election under Section 8.03 hereof, the Company must deliver to the Trustee an
Opinion of Counsel reasonably acceptable to the Trustee confirming that the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred; 
  
 (4) no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of
Default resulting from the borrowing of funds to be applied to such deposit); 
  
 (5) such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than this Indenture) to which Holdings, the
Company or any of Holdings’ Restricted Subsidiaries that are Significant Subsidiaries is a party or by which the Holdings, the Company or any of Holdings’ Restricted Subsidiaries that are Significant Subsidiaries is bound; 
  
 (6) the Company must deliver to the Trustee an
Officers’ Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders of Notes over the other creditors of the Company with the intent of defeating, hindering, delaying or defrauding any creditors
of the Company or others; and 
  
 (7) the Company
must deliver to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance have been complied with. 
  
 The Collateral will be released from the Lien securing the Notes, as provided
in Section 10.06 hereof, upon a Legal Defeasance or Covenant Defeasance in accordance with the provisions of this Article 8. 
  
 Section 8.05 Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions. 
  
 Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.05, the “Trustee”) pursuant to Section 8.04 hereof in respect of the
outstanding Notes will be 

  

 82 

 
held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium and Special Interest, if any, and interest, but such
money need not be segregated from other funds except to the extent required by law. 
  
 The Company will pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or non-callable Government Securities deposited pursuant to Section 8.04 hereof or the
principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes. 
  
 Notwithstanding anything in this Article 8 to the contrary, the Trustee will deliver or pay to the Company from time to time
upon the request of the Company any money or non-callable Government Securities held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(1) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or
Covenant Defeasance. 
  
 Section 8.06 Repayment to Company. 
  
 Subject to any applicable laws relating to abandoned property, any money
deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of, premium or Special Interest, if any, or interest on, any Note and remaining unclaimed for two years after such principal,
premium or Special Interest, if any, or interest has become due and payable shall be paid to the Company on its request or (if then held by the Company) will be discharged from such trust; and the Holder of such Note will thereafter be permitted to
look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, will thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in the New York Times and The Wall Street Journal (national edition), notice that such money remains
unclaimed and that, after a date specified therein, which will not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining will be repaid to the Company. 
  
 Section 8.07 Reinstatement. 
  
 If the Trustee or Paying Agent is unable to apply any U.S. dollars or
non-callable Government Securities in accordance with Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application,
then the Company’s and the Guarantors’ obligations under this Indenture and the Notes and the Note Guarantees will be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as
the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the case may be; provided, however, that, if the Company makes any payment of principal of, premium or Special Interest,
if any, or interest on, any Note following the reinstatement of its obligations, the Company will be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent. 
  

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 ARTICLE 9 
 AMENDMENT, SUPPLEMENT AND WAIVER 
  
 Section 9.01
Without Consent of Holders of Notes. 
  
 Notwithstanding
Section 9.02 of this Indenture, the Company, the Guarantors and the Trustee may amend or supplement this Indenture or the Notes or the Note Guarantees without the consent of any Holder of Notes: 
  
 (1) to cure any ambiguity, defect or inconsistency;

  
 (2) to provide for uncertificated Notes in
addition to or in place of certificated Notes; 
  
 (3) to provide for the assumption of the Company’s or a Guarantor’s obligations to the Holders of the Notes and Note Guarantees by a successor to the Company or such Guarantor pursuant to Article 5 or Article 11 hereof;

  
 (4) to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not materially adversely affect the legal rights hereunder of any such Holder; 
  
 (5) to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA; 

 
 (6) to conform the text of this Indenture, the Note
Guarantees, the Notes or the Security Documents to any provision of the “Description of Notes” section of the Offering Circular, relating to the initial offering of the Notes, to the extent that such provision in that “Description of
Notes” was intended to be a verbatim recitation of a provision of this Indenture, the Note Guarantees, the Notes or the Security Documents; 
  
 (7) to provide for the issuance of Additional Notes in accordance with the limitations set forth in this Indenture as of the date hereof;

  
 (8) to allow any Guarantor to execute a
supplemental indenture and a Note Guarantee with respect to the Notes; 
  
 (9) to evidence and provide for the acceptance of appointment under this Indenture by a successor Trustee; or 
  
 (10) to make, complete or confirm any grant of Collateral permitted or required by this Indenture or any of the Security Documents or any
release of Collateral that becomes effective as set forth in this Indenture or any of the Security Documents. 
  
 Upon the request of the Company accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental
indenture, and upon receipt by the Trustee of the documents described in Section 7.02 hereof, the Trustee will join with the Company and the Guarantors in the execution of any amended or supplemental indenture authorized or permitted by the
terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee will not be obligated to enter into such amended or supplemental indenture that affects its own rights, duties or
immunities under this Indenture or otherwise. 
  

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 Section 9.02 With Consent of Holders of Notes. 
  
 Except as provided below in this Section 9.02, the Company and the Trustee may amend or supplement this Indenture
(including, without limitation, Sections 3.09, 4.10 and 4.15 hereof) and the Notes and the Note Guarantees with the consent of the Holders of at least a majority in aggregate principal amount of the then outstanding Notes (including, without
limitation, Additional Notes, if any) voting as a single class (including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes), and, subject to Sections 6.04 and 6.07 hereof, any
existing Default or Event of Default (other than a Default or Event of Default in the payment of the principal of, premium or Special Interest, if any, or interest on, the Notes, except a payment default resulting from an acceleration that has been
rescinded) or compliance with any provision of this Indenture or the Notes or the Note Guarantees may be waived with the consent of the Holders of a majority in aggregate principal amount of the then outstanding Notes (including, without limitation,
Additional Notes, if any) voting as a single class (including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes). Section 2.08 hereof shall determine which Notes are
considered to be “outstanding” for purposes of this Section 9.02. 
  
 Upon the request of the Company accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of the documents described in Section 7.02 hereof, the Trustee will join with the Company and the Guarantors in the execution of
such amended or supplemental indenture unless such amended or supplemental indenture directly affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but will
not be obligated to, enter into such amended or supplemental Indenture. 
  
 It is not be necessary for the consent of the Holders of Notes under this Section 9.02 to approve the particular form of any proposed amendment, supplement or waiver, but it is sufficient if such consent approves the substance thereof.

  
 After an amendment, supplement or waiver under this
Section 9.02 becomes effective, the Company will mail to the Holders of Notes affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Company to mail such notice, or any defect therein, will not,
however, in any way impair or affect the validity of any such amended or supplemental indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a majority in aggregate principal amount of the Notes then outstanding voting as a
single class may waive compliance in a particular instance by the Company with any provision of this Indenture or the Notes or the Note Guarantees. However, without the consent of each Holder affected, an amendment, supplement or waiver under this
Section 9.02 may not (with respect to any Notes held by a non-consenting Holder): 
  
 (1) reduce the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver; 
  
 (2) reduce the principal of or change the fixed maturity of
any Note or alter the provisions with respect to the redemption of the Notes (except as provided above with respect to Sections 3.09, 4.10 and 4.15 hereof); 
  
 (3) reduce the rate of or change the time for payment of interest, including default interest, on any Note; 
  
 (4) waive a Default or Event of Default in the payment of
principal of, or interest or premium or Special Interest, if any, on the Notes (except a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of the then outstanding Notes 

  

 85 

 
in accordance with the provisions of this Indenture and a waiver of the payment default that resulted from such acceleration); 
  
 (5) make any Note payable in money other than that stated in
the Notes; 
  
 (6) make any change in the
provisions of this Indenture relating to waivers of past Defaults or the rights of Holders of Notes to receive payments of principal of, or interest or premium or Special Interest, if any, on, the Notes; 
  
 (7) waive a redemption payment with respect to any Note
(other than a payment required by Sections 3.09, 4.10 or 4.15 hereof); 
  
 (8) release Holdings or any other Guarantor that is a Significant Subsidiary from any of its obligations under its Note Guarantee or this Indenture, except in accordance with the terms of this Indenture; 

 
 (9) in the event that the obligation to make a Change of
Control Offer or an Asset Sale Offer has arisen, amend, change or modify in any material respect the obligation of the Company to make and consummate such Change of Control Offer or such Asset Sale Offer, as the case may be; or 
  
 (10) make any change in the preceding amendment and waiver
provisions. 
  
 In addition, any amendment to, or waiver of, the
provisions of this Indenture or any Security Document that has the effect of releasing all or substantially all of the Collateral from the Liens securing the Notes will require the consent of the Holders of at least 66 2/3% in aggregate principal amount of the Notes then outstanding. 
  
 Section 9.03 Compliance with Trust Indenture Act. 
  
 Every amendment or supplement to this Indenture or the Notes will be set
forth in a amended or supplemental indenture that complies with the TIA as then in effect. 
  
 Section 9.04 Revocation and Effect of Consents. 
  
 Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that
evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives
written notice of revocation before the date the amendment, supplement or waiver becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder. 
  
 Section 9.05 Notation on or Exchange of Notes. 
  
 The Trustee may place an appropriate notation about an amendment, supplement
or waiver on any Note thereafter authenticated. The Company in exchange for all Notes may issue and the Trustee shall, upon receipt of an Authentication Order, authenticate new Notes that reflect the amendment, supplement or waiver. 
  

 86 

 Failure to make the appropriate notation or issue a new Note will not affect the validity and effect of
such amendment, supplement or waiver. 
  
 Section 9.06 Trustee to Sign
Amendments, etc. 
  
 The Trustee will sign any amended or
supplemental indenture authorized pursuant to this Article 9 if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Company may not sign an amended or supplemental indenture until
the Board of Directors of the Company approves it. In executing any amended or supplemental indenture, the Trustee will be entitled to receive and (subject to Section 7.01 hereof) will be fully protected in relying upon, in addition to the
documents required by Section 13.04 hereof, an Officers’ Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture. 
  
 ARTICLE 10 
 COLLATERAL AND SECURITY 
  
 Section 10.01 Equal and Ratable Sharing of Collateral by Holders of Parity Lien Debt. 
  
 Notwithstanding: (1) anything to the contrary contained in the Security Documents; (2) the time of incurrence of any Series of Parity Lien Debt;
(3) the order or method of attachment or perfection of any Liens securing any Series of Parity Lien Debt; (4) the time or order of filing or recording of financing statements, mortgages or other documents filed or recorded to perfect any
Lien upon any Collateral; (5) the time of taking possession or control over any Collateral; (6) that any Parity Lien may not have been perfected or may be or have become subordinated, by equitable subordination or otherwise, to any other
Lien; or (7) the rules for determining priority under any law governing relative priorities of Liens: 
  
 (a) all Parity Liens granted at any time by the Company or any other Pledgor will secure, equally and ratably, all present and future Parity Lien
Obligations; and 
  
 (b) all proceeds of all Parity Liens granted
at any time by the Company or any other Pledgor will be allocated and distributed equally and ratably on account of the Parity Lien Debt and other Parity Lien Obligations. 
  
 This Section 10.01 is intended for the benefit of, and will be enforceable as a third party beneficiary by, each
present and future holder of Parity Lien Obligations, each present and future Parity Lien Representative and the Collateral Agent as holder of Parity Liens. The Parity Lien Representative of each future Series of Parity Lien Debt will be required to
deliver a Lien Sharing and Priority Confirmation to the Collateral Agent and the Trustee at the time of incurrence of such Series of Parity Lien Debt. 
  
 Section 10.02 Ranking of Parity Liens. 
  
 Notwithstanding: (1) anything to the contrary contained in the Security Documents; (2) the time of incurrence of any Series of Secured Debt;
(3) the order or method of attachment or perfection of any Liens securing any Series of Secured Debt; (4) the time or order of filing or recording of financing statements, mortgages or other documents filed or recorded to perfect any Lien
upon any Collateral; (5) the time of taking possession or control over any Collateral; (6) that any Priority Lien may not have been perfected or may be or have become subordinated, by equitable subordination or otherwise, to any other
Lien; or (7) the rules for determining priority under any law governing relative priorities of Liens, all 

  

 87 

 
Parity Liens at any time granted by the Company or any other Pledgor will be subject and subordinate to all Priority Liens securing Priority Lien
Obligations. 
  
 This Section 10.02 is intended for the
benefit of, and will be enforceable as a third party beneficiary by, each present and future holder of Priority Lien Obligations, each present and future Priority Lien Representatives and the Priority Lien Collateral Agent as holder of the Priority
Liens. No other Person will be entitled to rely on, have the benefit of or enforce those provisions. The Parity Lien Representative of each future Series of Parity Lien Debt will be required to deliver a Lien Sharing and Priority Confirmation to the
Priority Lien Collateral Agent and each Priority Lien Representative at the time of incurrence of such Series of Parity Lien Debt. 
  
 In addition, this Section 10.02 is intended solely to set forth the relative ranking, as Liens, of the Liens securing Parity Lien Debt as against the
Priority Liens. Neither the Notes, nor any other Parity Lien Obligations nor the exercise or enforcement of any right or remedy for the payment or collection thereof are intended to be, or will ever be by reason of the foregoing provision, in any
respect subordinated, deferred, postponed, restricted or prejudiced. 
  
 Section
10.03 Relative Rights. 
  
 Nothing in the Note Documents
will: 
  
 (a) impair, as between the Company and the Holders of
the Notes, the obligation of the Company to pay principal of, premium and interest and Special Interest, if any, on the Notes in accordance with their terms or any other obligation of the Company or any other Pledgor; 
  
 (b) affect the relative rights of Holders of Notes as against any other
creditors of the Company or any other Pledgor (other than holders of Priority Liens, Permitted Prior Liens or other Parity Liens); 
  
 (c) restrict the right of any Holder of Notes to sue for payments that are then due and owing (but not enforce any judgment in respect thereof against any
Collateral to the extent specifically prohibited under the Intercreditor Agreement); 
  
 (d) restrict or prevent any Holder of Notes or any other Parity Lien Obligations, the Collateral Agent or any Parity Lien Representative from exercising any of its rights or remedies upon a Default or Event of Default
not specifically restricted or prohibited by the Intercreditor Agreement; or 
  
 (e) restrict or prevent any Holder of Notes or any other Parity Lien Obligations, the Collateral Agent or any Parity Lien Representative from taking any lawful action in an insolvency or liquidation proceeding not
specifically restricted or prohibited by the Intercreditor Agreement. 
  
 Section
10.04 Compliance with Trust Indenture Act. 
  
 The Company
will comply with the provisions of TIA §314. 
  
 To the
extent applicable, the Company will cause TIA §313(b), relating to reports, and TIA §314(d), relating to the release of property or securities subject to the Lien of the Security Documents, to be complied with. Any certificate or opinion
required by TIA §314(d) may be made by an Officer of the Company except in cases where TIA §314(d) requires that such certificate or opinion be made by an independent Person, which Person will be an independent engineer, appraiser or other
expert selected by or reasonably satisfactory to the Trustee. Notwithstanding anything to the contrary in this paragraph, the Company will not be required to comply with all or any portion of TIA §314(d) if it determines, in good 

  

 88 

 
faith based on advice of counsel, that under the terms of TIA §314(d) and/or any interpretation or guidance as to the meaning thereof of the SEC and its
staff, including “no action” letters or exemptive orders, all or any portion of TIA §314(d) is inapplicable to one or a series of released Collateral. 
  
 Section 10.05 Further Assurances; Insurance. 
  
 (a) The Company and each of the other Pledgors will do or cause to be done all acts and things that may be required, or that
the Collateral Agent from time to time may reasonably request, to assure and confirm that the Collateral Agent holds, for the benefit of the holders of Parity Lien Obligations, duly created and enforceable and perfected Parity Liens upon the
Collateral (including any property or assets that are acquired or otherwise become Collateral after the Notes are issued), in each case, as contemplated by, and with the Lien priority required under, the Parity Lien Documents. 
  
 Upon the reasonable request of the Collateral Agent or any Parity Lien
Representative at any time and from time to time, the Company and each of the other Pledgors will promptly execute, acknowledge and deliver such Security Documents, instruments, certificates, notices and other documents, and take such other actions
as will be reasonably required, or that the Collateral Agent may reasonably request, to create, perfect, protect, assure or enforce the Liens and benefits intended to be conferred, in each case as contemplated by the Parity Lien Documents for the
benefit of the holders of Parity Lien Obligations. 
  
 (b) The
Company and the other Pledgors will: 
  
 (1) keep
their properties adequately insured at all times by financially sound and reputable insurers; 
  
 (2) maintain such other insurance, to such extent and against such risks (and with such deductibles, retentions and exclusions), including
fire and other risks insured against by extended coverage and coverage for acts of terrorism, as is customary with companies in the same or similar businesses operating in the same or similar locations, including public liability insurance against
claims for personal injury or death or property damage occurring upon, in, about or in connection with the use of any properties owned, occupied or controlled by them; 
  
 (3) maintain such other insurance as may be required by law; and 
  
 (4) maintain such other insurance as may be required by the
Security Documents. 
  
 (c) Upon the request of the Collateral
Agent, the Company and the other Pledgors will furnish to the Collateral Agent full information as to their property and liability insurance carriers. The Company will cause the Holders of Parity Lien Obligations, as a class, to be named as
additional insureds, with a waiver of subrogation, on all insurance policies of the Company and the other Pledgors and the Collateral Agent to be named as loss payee, with 30 days’ notice of cancellation or material change (except 10 days in
case of non-payment), on all property and casualty insurance policies of the Company and the other Pledgors. 
  
 Section 10.06 Release of Liens in Respect of Notes. 
  
 The Collateral Agent’s Parity Liens upon the Collateral will no longer secure the Notes outstanding under this Indenture or any other Obligations under this Indenture, and the right of the holders of the Notes
and such Obligations to the benefits and proceeds of the Collateral Agent’s Parity Liens on the Collateral will terminate and be discharged: 
  
 (a) upon satisfaction and discharge of this Indenture as set forth under Article 12 hereof; 
  

 89 

 (b) upon a Legal Defeasance or Covenant Defeasance of the Notes as set forth under Article 8 hereof;

  
 (c) upon payment in full and discharge of all Notes
outstanding under this Indenture and all Obligations that are outstanding, due and payable under this Indenture at the time the Notes are paid in full and discharged; 
  
 (d) in whole or in part, with the consent of the Holders of the requisite percentage of Notes in accordance with Article 9
hereof. 
  
 (e) as to any Collateral that is sold, transferred or
otherwise disposed of by the Company or any other Pledgor to a Person that is not (either before or after such sale, transfer or disposition) the Company or a Restricted Subsidiary of the Company in a transaction or other circumstance that complies
with Section 4.10 hereof and the Security Documents, at the time of such sale, transfer or other disposition or to the extent of the interest sold, transferred or otherwise disposed of; provided that the Collateral Agent’s Liens
upon the Collateral will not be released if the sale or disposition is subject to Section 5.01 hereof. 
  
 (f) upon a release of less than all or substantially all of the Collateral, if consent to the release of all Priority Liens on such Collateral has been
given by an Act of Required Debtholders; and 
  
 (g) upon a
release of all or substantially all of the Collateral, if (i) consent to the release of that Collateral has been given by the requisite percentage or number of Holders of each Series of Secured Debt at the time outstanding as provided for in
the applicable Secured Debt Documents, and (ii) the Company has delivered an Officers’ Certificate to the Priority Lien Collateral Agent and the Collateral Agent certifying that all such necessary consents have been obtained; 

 
 provided, however, with respect to clauses (e), (f) and
(g) of this Section 10.06, that the security interests on the applicable Collateral held by the Priority Lien Collateral Agent are also released. 
  
 The Security Documents provide that the Liens securing the Secured Debt will extend to the proceeds of any Sale of Collateral. As a result, the Collateral
Agent’s Liens will apply to the proceeds of any such Collateral received in connection with any sale or other disposition of assets described in this Section 10.06. 
  
 Each of the Security Documents will terminate upon release of all of the Collateral in accordance with the provisions of
this Section 10.06. 
  
 ARTICLE 11 
 NOTE GUARANTEES 
  
 Section 11.01 Guarantee. 
  
 (a) Subject to this Article 11, each of the Guarantors hereby, jointly and severally, unconditionally guarantees to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of this Indenture, the Notes or the obligations of the Company hereunder or thereunder, that: 
  
 (1) the principal of, premium and Special Interest, if any, and interest on, the Notes will be promptly paid in full when due, whether at
maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other obligations of the Company to the Holders or the Trustee hereunder or thereunder will be
promptly paid in full or performed, all in accordance with the terms hereof and thereof; and 
  

 90 

 (2) in case of any extension of time of payment or renewal of any Notes or any of such
other obligations, that same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. 
  
 Failing payment when due of any amount so guaranteed or any performance so
guaranteed for whatever reason, the Guarantors will be jointly and severally obligated to pay the same immediately. Each Guarantor agrees that this is a guarantee of payment and not a guarantee of collection. 
  
 (b) The Guarantors hereby agree that their obligations hereunder are
unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or
thereof, the recovery of any judgment against the Company, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Each Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenant that this
Note Guarantee will not be discharged except by complete performance of the obligations contained in the Notes and this Indenture. 
  
 (c) If any Holder or the Trustee is required by any court or otherwise to return to the Company, the Guarantors or any custodian, trustee, liquidator or
other similar official acting in relation to either the Company or the Guarantors, any amount paid by either to the Trustee or such Holder, this Note Guarantee, to the extent theretofore discharged, will be reinstated in full force and effect.

  
 (d) Each Guarantor agrees that it will not be entitled to any
right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the
Holders and the Trustee, on the other hand, (1) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes of this Note Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (2) in the event of any declaration of acceleration of such obligations as provided in Article 6 hereof, such obligations (whether or not due and
payable) will forthwith become due and payable by the Guarantors for the purpose of this Note Guarantee. The Guarantors will have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the
rights of the Holders under the Note Guarantee. 
  
 Section 11.02 Limitation on
Guarantor Liability. 
  
 Each Guarantor, and by its
acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Note Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to any Note Guarantee. To effectuate the foregoing intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree that
the obligations of such Guarantor will be limited to the maximum amount that will, after giving 

  

 91 

 
effect to such maximum amount and all other contingent and fixed liabilities of such Guarantor that are relevant under such laws, and after giving effect to
any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under this Article 11, result in the obligations of such Guarantor under its Note
Guarantee not constituting a fraudulent transfer or conveyance. 
  
 Section 11.03
Execution and Delivery of Note Guarantee. 
  
 To evidence
its Note Guarantee set forth in Section 11.01 hereof, each Guarantor hereby agrees that a notation of such Note Guarantee substantially in the form attached as Exhibit E hereto will be endorsed by an Officer of such Guarantor on each Note
authenticated and delivered by the Trustee and that this Indenture will be executed on behalf of such Guarantor by one of its Officers. 
  
 Each Guarantor hereby agrees that its Note Guarantee set forth in Section 11.01 hereof will remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Note Guarantee. 
  
 If an Officer whose signature is on this Indenture or on the Note Guarantee no longer holds that office at the time the Trustee authenticates the Note on which a Note Guarantee is endorsed, the Note Guarantee will be valid nevertheless.

  
 The delivery of any Note by the Trustee, after the
authentication thereof hereunder, will constitute due delivery of the Note Guarantee set forth in this Indenture on behalf of the Guarantors. 
  
 In the event that the Company or any of its Restricted Subsidiaries creates or acquires any Domestic Subsidiary after the date of this Indenture, if
required by Section 4.24 hereof, the Company will cause such Domestic Subsidiary to comply with the provisions of Section 4.24 hereof and this Article 11, to the extent applicable. 
  
 Section 11.04 Guarantors May Consolidate, etc., on Certain Terms. 
  
 Except as otherwise provided in Section 11.05 hereof, no Guarantor may
sell or otherwise dispose of all or substantially all of its assets to, or consolidate with or merge with or into (whether or not such Guarantor is the surviving Person) another Person, other than the Company or another Guarantor, unless:

  
 (1) immediately after giving effect to such
transaction, no Default or Event of Default exists; and 
  
 (2) either: 
  
 (a) subject to Section 11.05 hereof, the Person acquiring the property in any such sale or disposition or the Person formed by or surviving any such consolidation or merger unconditionally assumes all the obligations of that Guarantor
under this Indenture, its Note Guarantee and the Registration Rights Agreement on the terms set forth herein or therein, pursuant to a supplemental indenture in form and substance reasonably satisfactory to the Trustee; or 
  
 (b) the Net Proceeds of such sale or other disposition are
applied in accordance with the applicable provisions of this Indenture, including without limitation, Section 4.10 hereof. 
  

 92 

 In case of any such consolidation, merger, sale or conveyance and upon the assumption by the successor
Person, by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the Note Guarantee endorsed upon the Notes and the due and punctual performance of all of the covenants and conditions of this
Indenture to be performed by the Guarantor, such successor Person will succeed to and be substituted for the Guarantor with the same effect as if it had been named herein as a Guarantor. Such successor Person thereupon may cause to be signed any or
all of the Note Guarantees to be endorsed upon all of the Notes issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Trustee. All the Note Guarantees so issued will in all respects have the same legal
rank and benefit under this Indenture as the Note Guarantees theretofore and thereafter issued in accordance with the terms of this Indenture as though all of such Note Guarantees had been issued at the date of the execution hereof. 
  
 Except as set forth in Articles 4 and 5 hereof, and notwithstanding clauses
2(a) and (b) above, nothing contained in this Indenture or in any of the Notes will prevent any consolidation or merger of a Guarantor with or into the Company or another Guarantor, or will prevent any sale or conveyance of the property of a
Guarantor as an entirety or substantially as an entirety to the Company or another Guarantor. 
  
 Section 11.05 Releases. 
  
 (a) In the event of any sale or other disposition of all or substantially all of the assets of any Subsidiary Guarantor, by way of merger, consolidation or otherwise, or a sale or other disposition of all of the Capital Stock of any
Subsidiary Guarantor, in each case to a Person that is not (either before or after giving effect to such transactions) the Company or a Restricted Subsidiary of the Company, then such Subsidiary Guarantor (in the event of a sale or other
disposition, by way of merger, consolidation or otherwise, of all of the Capital Stock of such Subsidiary Guarantor) or the corporation acquiring the property (in the event of a sale or other disposition of all or substantially all of the assets of
such Subsidiary Guarantor) will be released and relieved of any obligations under its Note Guarantee; provided that the Net Proceeds of such sale or other disposition are applied in accordance with the applicable provisions of this Indenture,
including without limitation Section 4.10 hereof. Upon delivery by the Company to the Trustee of an Officers’ Certificate and an Opinion of Counsel to the effect that such sale or other disposition was made by the Company in accordance
with the provisions of this Indenture, including without limitation Section 4.10 hereof, the Trustee will execute any documents reasonably required in order to evidence the release of any Guarantor from its obligations under its Note Guarantee.

  
 (b) Upon designation of any Subsidiary Guarantor as an
Unrestricted Subsidiary in accordance with the terms of this Indenture, such Subsidiary Guarantor will be released and relieved of any obligations under its Note Guarantee. 
  
 (c) Upon Legal Defeasance in accordance with Article 8 hereof or satisfaction and discharge of this Indenture in accordance
with Article 12 hereof, each Subsidiary Guarantor will be released and relieved of any obligations under its Note Guarantee. 
  
 (d) If any Subsidiary Guarantor shall not guarantee any Indebtedness under any Credit Facility (other than if such Subsidiary Guarantor no longer
guarantees any Indebtedness under any Credit Facility as a result of payment under any guarantee of any such Indebtedness by any Subsidiary Guarantor), such Subsidiary Guarantor will be released and relieved of any obligations under its Note
Guarantee; provided, that a Subsidiary Guarantor shall not be permitted to be released from its Guarantee if it is an obligor with respect to Indebtedness that would not, under Section 4.09 hereof, be permitted to be incurred by a
Restricted Subsidiary that is not a Guarantor. 
  

 93 

 Any Guarantor not released from its obligations under its Note Guarantee as provided in this
Section 11.05 will remain liable for the full amount of principal of and interest and premium and Special Interest, if any, on the Notes and for the other obligations of any Guarantor under this Indenture as provided in this Article 11.

  
 ARTICLE 12 
 SATISFACTION AND DISCHARGE 
  
 Section 12.01 Satisfaction and Discharge. 
  
 This Indenture will be discharged and will cease to be of further effect as to all Notes issued hereunder, when: 
  
 (1) either: 
  
 (a) all Notes that have been authenticated, except lost,
stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust and thereafter repaid to the Company or discharged from the trust, have been delivered to the Trustee for
cancellation; or 
  
 (b) all Notes that have not
been delivered to the Trustee for cancellation have become due and payable by reason of the mailing of a notice of redemption or otherwise or will become due and payable within one year or have been called for redemption pursuant to
Section 3.07 hereof and the Company or any Guarantor has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the Holders, cash in U.S. dollars, non-callable Government Securities,
or a combination thereof, in such amounts as will be sufficient, without consideration of any reinvestment of interest, to pay and discharge the entire Indebtedness on the Notes not delivered to the Trustee for cancellation for principal, premium
and Special Interest, if any, and accrued interest to the date of maturity or redemption; 
  
 (2) the Company or any Guarantor has paid or caused to be paid all sums payable by it under this Indenture; and 
  
 (3) the Company has delivered irrevocable instructions to
the Trustee under this Indenture to apply the deposited money toward the payment of the Notes at maturity or on the redemption date, as the case may be. 
  
 In addition, the Company must deliver an Officers’ Certificate and an Opinion of Counsel to the Trustee stating that all conditions precedent to
satisfaction and discharge have been satisfied. 
  
 The Collateral
will be released from the Lien securing the Notes, as provided in Section 10.06 hereof, upon a satisfaction and discharge in accordance with the provisions described above. 
  
 Notwithstanding the satisfaction and discharge of this Indenture, if money has been deposited with the Trustee pursuant to
subclause (b) of clause (1) of this Section 12.01, the provisions of Sections 12.02 and 8.06 hereof will survive. In addition, nothing in this Section 12.01 will be deemed to discharge those provisions of Section 7.07
hereof, that, by their terms, survive the satisfaction and discharge of this Indenture. 
  

 94 

 Section 12.02 Application of Trust Money. 
  
 Subject to the provisions of Section 8.06 hereof, all money deposited with the Trustee pursuant to Section 12.01
hereof shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium and Special Interest, if any) and interest for whose payment such money has been deposited with the Trustee; but such money need not be segregated from other funds except to
the extent required by law. 
  
 If the Trustee or Paying Agent is
unable to apply any money or Government Securities in accordance with Section 12.01 hereof by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, the Company’s and any Guarantor’s obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 12.01 hereof; provided that if
the Company has made any payment of principal of, premium or Special Interest, if any, or interest on, any Notes because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive
such payment from the money or Government Securities held by the Trustee or Paying Agent. 
  
 ARTICLE 13 
 MISCELLANEOUS 
  
 Section 13.01 Trust Indenture Act Controls. 
  

If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by TIA §318(c), the imposed duties will control.

  
 Section 13.02 Notices. 
  
 Any notice or communication by the Company, any Guarantor or the Trustee to
the others is duly given if in writing and delivered in Person or mailed by first class mail (registered or certified, return receipt requested), facsimile transmission or overnight air courier guaranteeing next day delivery, to the others’
address: 
  
 If to the Company and/or any Guarantor: 

 
 Brookstone, Inc. 
 One Innovation Way 
 Merrimack, New Hampshire
03054 
 Facsimile No.: (603) 577-8011 
 Attention: General Counsel 
  
 With a copy to: 
  
 Kaye Scholer LLP 
 425 Park Avenue 
 New York, New York 10022

 Facsimile No.: (212) 836-8689 
 Attention: Stephen C. Koval 
  

 95 

 If to the Trustee: 
  
 Wells Fargo Bank, N.A. 
 Corporate Trust Services 
 213 Court Street, Suite 703 
 Middletown, CT 06457 
 Facsimile No.: (860) 704-6219 
 Attention: Joseph P. O’Donnell 
  
 The Company, any Guarantor or the Trustee, by notice to the others, may designate additional or different addresses for subsequent notices or
communications. 
  
 All notices and communications (other than
those sent to Holders) will be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if transmitted by
facsimile; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery. 
  
 Any notice or communication to a Holder will be mailed by first class mail, certified or registered, return receipt requested, or by overnight air courier
guaranteeing next day delivery to its address shown on the register kept by the Registrar. Any notice or communication will also be so mailed to any Person described in TIA § 313(c), to the extent required by the TIA. Failure to mail a
notice or communication to a Holder or any defect in it will not affect its sufficiency with respect to other Holders. 
  
 If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives
it. 
  
 If the Company mails a notice or communication to Holders,
it will mail a copy to the Trustee and each Agent at the same time. 
  
 Section
13.03 Communication by Holders of Notes with Other Holders of Notes. 
  
 Holders may communicate pursuant to TIA § 312(b) with other Holders with respect to their rights under this Indenture or the Notes. The Company, the Trustee, the Registrar and anyone else shall have the
protection of TIA § 312(c). 
  
 Section 13.04 Certificate and Opinion
as to Conditions Precedent. 
  
 Upon any request or
application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee: 
  
 (1) an Officers’ Certificate in form and substance reasonably satisfactory to the Trustee (which must include the statements set
forth in Section 13.05 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and 
  
 (2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which must include the statements set forth in Section 13.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied. 
  

 96 

 Section 13.05 Statements Required in Certificate or Opinion. 
  
 Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided pursuant to TIA § 314(a)(4)) must comply with the provisions of TIA § 314(e) and must include: 
  
 (1) a statement that the Person making such certificate or
opinion has read such covenant or condition; 
  
 (2) 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; 
  
 (3) a 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 satisfied; and 
  
 (4) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been satisfied. 
  
 Section 13.06 Rules by Trustee and Agents. 
  
 The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions. 
  
 Section 13.07 No Personal Liability of Directors, Officers, Employees and Stockholders. 
  
 No director, officer, employee, incorporator, member or shareholder of the Company or any Guarantor, as such, will have any
liability for any obligations of the Company or the Guarantors under the Notes, this Indenture, the Note Guarantees or the Note Documents or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of
Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. The waiver may not be effective to waive liabilities under the federal securities laws. 
  
 Section 13.08 Governing Law. 
  
 THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. 
  
 Section 13.09 No Adverse Interpretation of Other Agreements. 
  
 This Indenture may not be used to interpret any other indenture, loan or
debt agreement of the Company or its Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture. 
  
 Section 13.10 Successors. 
  
 All agreements of the Company in this Indenture and the Notes will bind its successors. All agreements of the Trustee in this Indenture will bind its
successors. All agreements of each Guarantor in this Indenture will bind its successors, except as otherwise provided in Section 11.05 hereof. 
  

 97 

 Section 13.11 Severability. 
  
 In case any provision in this Indenture or in the Notes is invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions will not in any way be affected or impaired thereby. 
  
 Section 13.12 Counterpart Originals. 
  
 The parties may sign any number of copies of this Indenture. Each signed copy will be an original, but all of them together represent the same agreement. 
  
 Section 13.13 Table of Contents, Headings, etc. 
  
 The Table of Contents, Cross-Reference Table and Headings of the Articles and Sections of this Indenture have been inserted
for convenience of reference only, are not to be considered a part of this Indenture and will in no way modify or restrict any of the terms or provisions hereof. 
  
 [Signatures on following page] 
  

 98 

 SIGNATURES TO INDENTURE 
  
 Dated as of October 4, 2005 
  

			
	Brookstone Company, Inc.
		
	 By:
	 	/s/    PHILIP W. ROIZIN        
	 Name:
	 	Philip W. Roizin
	 Title:
	 	Executive Vice President
	
	Brookstone, Inc.
		
	 By:
	 	/s/    PHILIP W. ROIZIN        
	 Name:
	 	Philip W. Roizin
	 Title:
	 	Executive Vice President
	
	Brookstone International Holdings, Inc.
		
	 By:
	 	/s/    PHILIP W. ROIZIN        
	 Name:
	 	Philip W. Roizin
	 Title:
	 	Executive Vice President
	
	Brookstone Purchasing, Inc.
		
	 By:
	 	/s/    PHILIP W. ROIZIN        
	 Name:
	 	Philip W. Roizin
	 Title:
	 	Executive Vice President
	
	Brookstone Stores, Inc.
		
	 By:
	 	/s/    PHILIP W. ROIZIN        
	 Name:
	 	Philip W. Roizin
	 Title:
	 	Executive Vice President

			
	Brookstone Retail Puerto Rico, Inc.
		
	 By:
	 	/s/    PHILIP W. ROIZIN        
	 Name:
	 	Philip W. Roizin
	 Title:
	 	Executive Vice President

  

			
	Brookstone Holdings, Inc.
		
	 By:
	 	/s/    PHILIP W. ROIZIN        
	 Name:
	 	Philip W. Roizin
	 Title:
	 	Executive Vice President

  

			
	Brookstone Properties, Inc.
		
	 By:
	 	/s/    PHILIP W. ROIZIN        
	 Name:
	 	Philip W. Roizin
	 Title:
	 	Executive Vice President

  

			
	Advanced Audio Concepts, Limited
		
	 By:
	 	/s/    PHILIP W. ROIZIN        
	 Name:
	 	Philip W. Roizin
	 Title:
	 	Executive Vice President

  

			
	Gardeners Eden, Inc.
		
	 By:
	 	/s/    PHILIP W. ROIZIN        
	 Name:
	 	Philip W. Roizin
	 Title:
	 	Executive Vice President

			
	 Wells Fargo Bank, N.A.
 Trustee

		
	By:	 	/s/    JOSEPH P.
O’DONNELL        
	 Name:
	 	Joseph P. O’Donnell
	 Title:
	 	Vice President

 [Face of Note] 

  
 CUSIP/CINS
             
  
 12.00% Second Lien Senior Secured Notes due 2012 
  

			
	No.             	  	$            

  
 BROOKSTONE COMPANY,
INC. 
  
 promises to pay to
[            ] or registered assigns, 
  
 the principal sum of
                                        
                                        
                                     DOLLARS on October 15,
2012. 
  
 Interest Payment Dates: April 15 and October 15 
  
 Record Dates: April 1 and October 1 
  
 Dated:             ,
200   
  

			
	 BROOKSTONE COMPANY, INC.

		
	 By:
	 	 
	 Name:
	 	 
	 Title:
	 	 

  
 This is one of the Notes
referred to 
 in the within-mentioned Indenture: 
  

			
	 WELLS FARGO BANK,

	 as Trustee

		
	By:	 	 
	 	 	Authorized Signatory

  

  

 A1-1 

 [Back of Note] 
 12.00% Second Lien Senior Secured Notes due 2012 
  
 [Insert the Global Note Legend, if applicable pursuant to the provisions of the Indenture] 
  
 [Insert the Private Placement Legend, if applicable pursuant to the provisions of the Indenture] 
  
 Capitalized terms used herein have the meanings assigned to them in the Indenture referred to below unless otherwise indicated. 
  
 (1) INTEREST.
Brookstone Company, Inc., a New Hampshire corporation (the “Company”), promises to pay interest on the principal amount of this Note at 12.00% per annum from October 4, 2005 until maturity and shall pay the Special
Interest, if any, payable pursuant to Section 2 of the Registration Rights Agreement referred to below. The Company will pay interest and Special Interest, if any, semi-annually in arrears on April 15 and October 15 of each year, or
if any such day is not a Business Day, on the next succeeding Business Day (each, an “Interest Payment Date”). Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been
paid, from the date of issuance; provided that if there is no existing Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date,
interest shall accrue from such next succeeding Interest Payment Date; provided further that the first Interest Payment Date shall be             ,
20    . The Company will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at a rate that is 1% per annum
in excess of the rate then in effect to the extent lawful; it will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Special Interest, if any, (without regard to any
applicable grace periods) from time to time on demand at the same rate to the extent lawful. Interest will be computed on the basis of a 360-day year of twelve 30-day months. 
  
 (2) METHOD OF PAYMENT. The Company will
pay interest on the Notes (except defaulted interest) and Special Interest, if any, to the Persons who are registered Holders of Notes at the close of business on the October 1 or April 1 immediately preceding the Interest Payment Date,
even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. The Notes will be payable as to principal, premium and
Special Interest, if any, and interest at the office or agency of the Company maintained for such purpose, or, at the option of the Company, payment of interest and Special Interest, if any, may be made by check mailed to the Holders at their
addresses set forth in the register of Holders; provided that payment by wire transfer of immediately available funds will be required with respect to principal of and interest, premium and Special Interest, if any, on, all Global Notes and
all other Notes the Holders of which will have provided wire transfer instructions to the Company or the Paying Agent. Such payment will be in such coin or currency of the United States of America as at the time of payment is legal tender for
payment of public and private debts. 
  
 (3)
PAYING AGENT AND REGISTRAR. Initially, Wells Fargo Bank, N.A., the Trustee under the Indenture, will act as Paying Agent and Registrar. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries may act in any such capacity. 
  

 A1-2 

 (4) INDENTURE AND SECURITY
DOCUMENTS. The Company issued the Notes under an Indenture dated as of October 4, 2005 (the “Indenture”) among the Company, the Guarantors and the Trustee. The terms of the Notes include those
stated in the Indenture and those made part of the Indenture by reference to the TIA. The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. To the extent any provision of this
Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling. The Notes are secured obligations of the Company. The Notes are secured by a second-priority Liens in the Collateral
granted to the Collateral Agent for the benefit of the Holders of the Parity Lien Obligations, as further described in the Indenture. The Indenture does not limit the aggregate principal amount of Notes that may be issued thereunder. 
  
 (5) OPTIONAL
REDEMPTION. 
  
 (a) Except as set forth in subparagraphs (b) and (c) of this Paragraph 5, the Company will not have the option to redeem the Notes prior to October 15, 2008. On or after October 15, 2009, the Company may on any one or
more occasions redeem all or a part of the Notes upon at least 30 but not more than 60 days’ notice, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest and Special Interest,
if any, on the Notes redeemed to the applicable redemption date, if redeemed during the twelve-month period beginning on October 15 of the years indicated below, subject to the rights of Holders on the relevant record date to receive interest
on the relevant interest payment date: 
  

				
	 Year  

	  	Percentage

	 
	 2009
	  	106.00	%
	 2010
	  	103.00	%
	 2011 and thereafter
	  	100.00	%

  
 Unless the Company
defaults in the payment of the redemption price, interest will cease to accrue on the Notes or portions thereof called for redemption on the applicable redemption date. 
  
 (b) Notwithstanding the provisions of subparagraph (a) of this Paragraph 5, at any time prior to
October 15, 2008, the Company may on any one or more occasions redeem up to 35% of the aggregate principal amount of Notes issued under the Indenture (including any Additional Notes) at a redemption price of 112.00% of the principal amount
thereof, plus accrued and unpaid interest and Special Interest, if any on the Notes to be redeemed to the redemption date, with the net cash proceeds of one or more Public Equity Offerings that are concurrently contributed by Holdings to the
Company’s common equity capital; provided that at least 65% in aggregate principal amount of the Notes originally issued under the Indenture (including any Additional Notes, but excluding Notes held by the Company or any of its
Affiliates) remains outstanding immediately after the occurrence of such redemption and that such redemption occurs within 90 days of the date of the closing of such Public Equity Offering. 
  
 (c) At any time prior to October 15, 2009, the Company
may on any one or more occasions also redeem all or part of the Notes upon at least 30 but not more than 60 days prior notice mailed by first-class mail to each Holder’s registered address, at a redemption price equal to 100% of the principal
amount of Notes redeemed plus the Applicable Premium plus accrued and unpaid interest and Special Interest, if any, on the Notes to be redeemed to the date of redemption, subject to the rights of Holders on the relevant record date to receive
interest due on the relevant interest payment date; provided that in the case of any redemption in part, at least 50% of the aggregate principal amount of Notes issued under the Indenture (including any Additional Notes) remains outstanding after
giving effect to such redemption. 
  

 A1-3 

 (6) MANDATORY REDEMPTION. 

 
 The Company is not be required to make mandatory redemption or sinking
fund payments with respect to the Notes. 
  
 (7)
REPURCHASE AT THE OPTION OF HOLDER. 
  
 (a) Upon the occurrence of a Change of Control, the Company will make an offer (a “Change of Control Offer”) to each
Holder to repurchase all or any part (equal to $1,000 or an integral multiple of $1,000) of that Holder’s Notes at a purchase price in cash equal to 101% of the aggregate principal amount of Notes repurchased plus accrued and unpaid interest
and Special Interest, if any, on the Notes repurchased to the date of purchase, subject to the rights of Holders on the relevant record date to receive interest due on the relevant interest payment date (the “Change of Control
Payment”). Within 30 days following any Change of Control, the Company will mail a notice to each Holder setting forth the procedures governing the Change of Control Offer as required by the Indenture. 
  
 (b) If the Company or a Restricted Subsidiary of the Company
consummates any Asset Sales, when the aggregate amount of Excess Proceeds exceeds $15.0 million, the Company will commence an offer to all Holders of Notes and all holders of Parity Lien Debt containing provisions similar to those set forth in the
Indenture with respect to offers to purchase or redeem with the proceeds of sales of assets (an “Asset Sale Offer”) pursuant to Section 3.09 of the Indenture to purchase the maximum principal amount of Notes (including any
Additional Notes) and such other Parity Lien Debt that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof plus accrued and unpaid interest and Special Interest, if any,
thereon to the date of purchase, in accordance with the procedures set forth in the Indenture, or the documentation governing such other Parity Lien Debt, respectively. To the extent that the aggregate amount of Notes (including any Additional
Notes) and other Parity Lien Debt tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company (or such Restricted Subsidiary) may use such deficiency for any purpose not otherwise prohibited by the Indenture. If the
aggregate principal amount of Notes and other Parity Lien Debt tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and such other Parity Lien Debt to be purchased on a pro rata basis.
Holders of Notes that are the subject of an offer to purchase will receive an Asset Sale Offer from the Company prior to any related purchase date and may elect to have such Notes purchased by completing the form entitled “Option of Holder
to Elect Purchase” attached to the Notes. Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero. 
  
 (8) NOTICE OF REDEMPTION. Notice of redemption will be mailed at least
30 days but not more than 60 days before the redemption date to each Holder whose Notes are to be redeemed at its registered address, except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued
in connection with a defeasance of the Notes or a satisfaction or discharge of the Indenture. Notes in denominations larger than $1,000 may be redeemed in part but only in whole multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed. If the Company complies with the redemption provisions set forth in the indenture, on and after the redemption or purchase date, interest will cease to accrue on the Notes or the portions of Notes called for redemption or purchase.

  
 (9) DENOMINATIONS,
TRANSFER, EXCHANGE. The Notes are in registered form without coupons in minimum amounts of $2,000 and integral multiples of $1,000 in excess of $2,000. The transfer of Notes may be registered and
Notes may be exchanged as provided in the 

  

 A1-4 

 
Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company
may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any
Note being redeemed in part. Also, the Company need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed or during the period between a record date and the corresponding Interest
Payment Date. 
  
 (10) PERSONS
DEEMED OWNERS. The registered Holder of a Note may be treated as its owner for all purposes. 
  
 (11) AMENDMENT, SUPPLEMENT AND WAIVER. Subject to
certain exceptions, the Indenture or the Notes or the Note Guarantees may be amended or supplemented with the consent of the Holders of at least a majority in aggregate principal amount of the then outstanding Notes including, without limitation,
Additional Notes, if any, voting as a single class (including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes), and subject to Sections 6.04 and 6.07 of the Indenture, any
existing Default or Event of Default (other than a Default or Event of Default in the payment of the principal of, premium or Special Interest, if any or interest on, the Notes, except a payment default resulting from an acceleration has been
rescinded) or compliance with any provision of the Indenture or the Notes or the Note Guarantees may be waived with the consent of the Holders of a majority in aggregate principal amount of the then outstanding Notes (including, without limitation,
Additional Notes, if any,) voting as a single class (including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes). In addition, any amendment to, or waiver of, the provisions of
the Indenture or any Security Document that has the effect of releasing all or substantially all of the Collateral from the Liens securing the Notes will require the consent of the Holders of at least 66 2/3% in aggregate principal amount of
the Notes then outstanding. Without the consent of any Holder of a Note, the Indenture or the Notes or the Note Guarantees may be amended or supplemented to cure any ambiguity, defect or inconsistency, to provide for uncertificated Notes in addition
to or in place of certificated Notes, to provide for the assumption of the Company’s or a Guarantor’s obligations to Holders of the Notes and Note Guarantees in case of a merger or consolidation, to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights under the Indenture of any such Holder, to comply with the requirements of the SEC in order to effect or maintain the qualification of the
Indenture under the TIA, to conform the text of the Indenture, the Notes or the Note Guarantees to any provision of the “Description of Notes” section of the Offering Circular, relating to the initial offering of the Notes, to the extent
that such provision in that “Description of Notes” was intended to be a verbatim recitation of a provision of the Indenture, the Note Guarantees or the Notes; to provide for the issuance of Additional Notes in accordance with the
limitations set forth in the Indenture, to allow any Guarantor to execute a supplemental indenture and a Note Guarantee with respect to the Notes, to evidence and provide for the acceptance of appointment under the Indenture by a successor Trustee
or to make, complete or confirm any grant of Collateral permitted or required by the Indenture or any of the Security Documents or any release of Collateral that becomes effective as set forth in the Indenture or any of the Security Documents.

  
 (12) DEFAULTS
AND REMEDIES. Events of Default include: (i) default for 30 days in the payment when due of interest on, or Special Interest, if any, with respect to, the Notes; (ii) default in the payment
when due (at maturity, upon redemption or otherwise) of the principal of, or premium, if any, on, the Notes, (iii) failure by Holdings or any Restricted Subsidiary to comply 

  

 A1-5 

 
(a) for 30 days after written notice with Sections 4.10 and 4.15 of the Indenture or (b) with Section 5.01 of the Indenture; (iv) failure by
the Holdings or any Restricted Subsidiary for 60 days after notice has been given to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in aggregate principal amount of the Notes then outstanding voting as a
single class to comply with any of the other agreements in the Indenture; (v) default under certain other agreements relating to Indebtedness of Holdings or any Restricted Subsidiary which default is (a) caused by a failure to pay any such
Indebtedness at its stated final maturity after giving effect to any applicable grace periods or (b) results in the acceleration of such Indebtedness prior to its stated final maturity and in each case of (a) and (b) the principal
amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default of the maturity of which has been so accelerated, aggregates $20.0 million or more (vi) certain
final judgments for the payment of money that aggregate in excess of $20.0 million or more in excess of amounts that are covered by insurance that remain unpaid, undischarged or are not stayed for a period of 60 days; (vii) the occurrence of
any of the following: (a) except as permitted by the Indenture, any Security Document ceases for any reason to be fully enforceable unless the sole result of the failure of one or more Security Documents to be fully enforceable is that any
Parity Lien purported to be granted under such Security Documents on Collateral, individually or in the aggregate, having a Fair Market Value of not more than $20.0 million ceases to be an enforceable and perfected second-priority Lien, subject only
to Permitted Prior Liens; (b) any Parity Lien purported to be granted under any Security Document on Collateral, individually or in the aggregate, having a Fair Market Value in excess of $20.0 million ceases to be an enforceable and perfected
second-priority Lien, subject only to Permitted Prior Liens; or (c) the Company or any other Pledgor, or any Person acting on behalf of any of them, denies or disaffirms, in writing, any obligation of the Company or any other Pledgor set forth
in or arising under any Security Document, (viii) certain events of bankruptcy or insolvency with respect to the Company, Holdings or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries of
Holdings that, taken together, would constitute a Significant Subsidiary; (ix) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law, under certain circumstances described in the Indenture, and such order or
decree remains unstayed and in effect for 60 consecutive days or (x) except as permitted by the Indenture, the Note Guarantee of Holdings or any Restricted Subsidiary that is a Significant Subsidiary shall be held in any judicial proceeding to
be unenforceable or invalid or shall cease for any reason to be in full force and effect or any Guarantor or any Person acting on behalf of any Guarantor shall deny or disaffirm its obligations under such Guarantor’s Note Guarantee. If any
Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately. Notwithstanding the foregoing, in the case
of an Event of Default arising from certain events of bankruptcy or insolvency, all outstanding Notes will become due and payable immediately without further action or notice. Holders may not enforce the Indenture or the Notes except as provided in
the Indenture. Subject to certain limitations, Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice
of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest or premium or Special Interest, if any,) if it determines that withholding notice is in their interest. The Holders
of a majority in aggregate principal amount of the then outstanding Notes by written notice to the Trustee may, on behalf of the Holders of all of the Notes, rescind an acceleration or waive any existing Default or Event of Default and its
consequences under the Indenture except a continuing Default or Event of Default in the payment of interest or premium or Special Interest, if any, on, or the principal of, the Notes. The Company is required to deliver to the Trustee annually a
statement regarding compliance with the Indenture, and the Company is required, 

  

 A1-6 

 
upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default. 
  
 (13) TRUSTEE DEALINGS
WITH COMPANY. The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee. 
  
 (14) NO RECOURSE AGAINST OTHERS. A director, officer, employee, incorporator or stockholder of the Company or any of the Guarantors, as
such, will not have any liability for any obligations of the Company or the Guarantors under the Notes, the Note Guarantees or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder
by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Notes. 
  
 (15) AUTHENTICATION. This Note will not be valid until authenticated by the manual signature of the
Trustee or an authenticating agent. 
  
 (16)
ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act). 
  
 (17) ADDITIONAL RIGHTS OF HOLDERS OF
RESTRICTED GLOBAL NOTES AND RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders of Notes under the
Indenture, Holders of Restricted Global Notes and Restricted Definitive Notes will have all the rights set forth in the Registration Rights Agreement dated as of October 4, 2005, among the Company, the Guarantors and the other parties named on
the signature pages thereof or, in the case of Additional Notes, Holders of Restricted Global Notes and Restricted Definitive Notes will have the rights set forth in one or more registration rights agreements, if any, among the Company, the
Guarantors and the other parties thereto, relating to rights given by the Company and the Guarantors to the purchasers of any Additional Notes (collectively, the “Registration Rights Agreement”). 
  
 (18) CUSIP NUMBERS.
Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes, and the Trustee may use CUSIP numbers in notices of redemption as a convenience
to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption, and reliance may be placed only on the other identification numbers placed thereon. 
  
 (19) GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF
NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THIS NOTE AND THE NOTE GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY. 
  
 The Company will furnish to any Holder upon written
request and without charge a copy of the Indenture, Intercreditor Agreement, Security Documents and/or the Registration Rights Agreement. Requests may be made to: 
  
 Brookstone Company, Inc. 
 One Innovation Way

 Merrimack, New Hampshire 03054 
 Attention: General Counsel

  

 A1-7 

 ASSIGNMENT FORM 
  
 To assign this Note, fill in the form below: 
  

			
	(I) or (we) assign and transfer this Note to: ________________________________________________________
	 	  	 (Insert assignee’s legal name)

	  

	(Insert assignee’s soc. sec. or tax I.D. no.)
	 
	
  

	

	 
	

	 
	

	(Print or type assignee’s name, address and zip code)

  

			
	 and irrevocably appoint ______________________________________________________________________

	to transfer this Note on the books of the Company. The agent may substitute another to act for him.

  
 Date:
             

			
	Your Signature: 	 	 
	(Sign exactly as your name appears on the face of this Note)

  
 Signature Guarantee*:
                                     
  

	*	Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). 

  

 A1-8 

 OPTION OF HOLDER TO ELECT
PURCHASE 
  
 If you want to elect to have this Note
purchased by the Company pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate box below: 
  

			
	  ̈
Section 4.10
	  	 ̈ Section 4.15

  
 If you want to elect
to have only part of the Note purchased by the Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you elect to have purchased: 
  
 $                     
  
 Date:                      
  

			
	Your Signature:	 	 
	(Sign exactly as your name appears on the face of this Note)

  

			
	Tax Identification No.: 	 	 

  
 Signature Guarantee*:
                     
  

	*	Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). 

  

 A1-9 

 SCHEDULE OF EXCHANGES OF
INTERESTS IN THE GLOBAL NOTE * 
  
 The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another
Global Note or Definitive Note for an interest in this Global Note, have been made: 
  

									
	 Date of Exchange  

	  	 Amount of decrease in
Principal Amount of
this Global Note

	  	 Amount of increase in
Principal Amount of
this Global Note

	  	 Principal Amount of
this Global Note
following such
decrease 
(or
increase)

	  	 Signature of authorized
officer of Trustee or
Custodian

	 	  	 	  	 	  	 	  	 
	 	  	 	  	 	  	 	  	 
	 	  	 	  	 	  	 	  	 

  

	*	This schedule should be included only if the Note is issued in global form. 

  

 A1-10 

 [Face of Regulation S Temporary Global Note] 

 
 CUSIP/CINS U11228 AA 8 
  
 12.00% Second Lien Senior Secured Notes due 2012 
  

			
	 No.                 
	  	$                

  
 BROOKSTONE COMPANY,
INC. 
  
 promises to pay to CEDE & CO. or registered assigns, 

 
 the principal sum of
_________________________________________________________________DOLLARS on October 15, 2012. 
  
 Interest Payment Dates: April 15 and October 15 
  
 Record Dates: April 1 and October 1 
  
 Dated: October 4, 2005 
  

			
	 BROOKSTONE COMPANY, INC.

		
	 By:
	 	 
	 Name:
	 	 
	 Title:
	 	 

  
 This is one of the Notes
referred to 
 in the within-mentioned Indenture: 
  
 WELLS FARGO BANK, N.A., 
 as Trustee 
  

			
		
	By:	 	 
	 	 	Authorized Signatory

  

  

 A2-1 

 [Back of Regulation S Temporary Global Note] 
 12.00% Second Lien Senior Secured Notes due 2012 
  
 THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE
HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON. 
  
 THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF,
AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT
IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY
WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY. 
  
 UNLESS AND UNTIL IT IS
EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A 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. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK)
(“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 
  
 “THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT
(A) (1) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), (4) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT, AND (B) IN 

  

 A2-2 

 
ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.” 
  
 Capitalized terms used herein have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated. 
  
 (1) INTEREST. Brookstone Company, Inc., a New Hampshire corporation (the “Company”), promises to pay interest on the principal amount of this Note at
12.00% per annum from October 4, 2005 until maturity and shall pay the Special Interest, if any, payable pursuant to Section 2 of the Registration Rights Agreement referred to below. The Company will pay interest and Special Interest,
if any, semi-annually in arrears on April 15 and October 15 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each, an “Interest Payment Date”). Interest on the Notes will accrue
from the most recent date to which interest has been paid or, if no interest has been paid, from the date of issuance; provided that if there is no existing Default in the payment of interest, and if this Note is authenticated between a
record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided further that the first Interest Payment Date shall be April 15,
2006. The Company will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at a rate that is 1% per annum in excess of the rate then in
effect to the extent lawful; it will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Special Interest, if any, (without regard to any applicable grace periods) from
time to time on demand at the same rate to the extent lawful. Interest will be computed on the basis of a 360-day year of twelve 30-day months. 
  
 (2) METHOD OF PAYMENT. The Company will pay interest on the Notes
(except defaulted interest) and Special Interest, if any, to the Persons who are registered Holders of Notes at the close of business on the October 1 or April 1 immediately preceding the Interest Payment Date, even if such Notes are
canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. The Notes will be payable as to principal, premium and Special Interest, if
any, and interest at the office or agency of the Company maintained for such purpose, or, at the option of the Company, payment of interest and Special Interest, if any, may be made by check mailed to the Holders at their addresses set forth in the
register of Holders; provided that payment by wire transfer of immediately available funds will be required with respect to principal of and interest, premium and Special Interest, if any, on, all Global Notes and all other Notes the Holders
of which will have provided wire transfer instructions to the Company or the Paying Agent. Such payment will be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private
debts. 
  
 (3) PAYING
AGENT AND REGISTRAR. Initially, Wells Fargo Bank, N.A., the Trustee under the Indenture, will act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar
without notice to any Holder. The Company or any of its Subsidiaries may act in any such capacity. 
  
 (4) INDENTURE AND SECURITY DOCUMENTS. The Company issued
the Notes under an Indenture dated as of October 4, 2005 (the “Indenture”) among the Company, the Guarantors and the Trustee. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by
reference to the TIA. The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the
provisions of the Indenture 

  

 A2-3 

 
shall govern and be controlling. The Notes are secured obligations of the Company. The Notes are secured by a second-priority Liens in the Collateral granted
to the Collateral Agent for the benefit of the Holders of the Parity Lien Obligations, as further described in the Indenture. The Indenture does not limit the aggregate principal amount of Notes that may be issued thereunder. 
  
 (5) OPTIONAL
REDEMPTION. 
  
 (a) Except as set forth in subparagraphs (b) and (c) of this Paragraph 5, the Company will not have the option to redeem the Notes prior to October 15, 2008. On or after October 15, 2009, the Company may on any one or
more occasions redeem all or a part of the Notes upon at least 30 but not more than 60 days’ notice, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest and Special Interest,
if any, on the Notes redeemed to the applicable redemption date, if redeemed during the twelve-month period beginning on October 15 of the years indicated below, subject to the rights of Holders on the relevant record date to receive interest
on the relevant interest payment date: 
  

				
	 Year

	  	Percentage

	 
	 2009
	  	106.00	%
	 2010
	  	103.00	%
	 2011 and thereafter
	  	100.00	%

  
 Unless the Company
defaults in the payment of the redemption price, interest will cease to accrue on the Notes or portions thereof called for redemption on the applicable redemption date. 
  
 (b) Notwithstanding the provisions of subparagraph (a) of this Paragraph 5, at any time prior to
October 15, 2008, the Company may on any one or more occasions redeem up to 35% of the aggregate principal amount of Notes issued under the Indenture (including any Additional Notes) at a redemption price of 112.00% of the principal amount
thereof, plus accrued and unpaid interest and Special Interest, if any on the Notes to be redeemed to the redemption date, with the net cash proceeds of one or more Public Equity Offerings that are concurrently contributed by Holdings to the
Company’s common equity capital; provided that at least 65% in aggregate principal amount of the Notes originally issued under the Indenture (including any Additional Notes, but excluding Notes held by the Company or any of its
Affiliates) remains outstanding immediately after the occurrence of such redemption and that such redemption occurs within 90 days of the date of the closing of such Public Equity Offering. 
  
 (c) At any time prior to October 15, 2009, the Company
may on any one or more occasions also redeem all or part of the Notes upon at least 30 but not more than 60 days prior notice mailed by first-class mail to each Holder’s registered address, at a redemption price equal to 100% of the principal
amount of Notes redeemed plus the Applicable Premium plus accrued and unpaid interest and Special Interest, if any, on the Notes to be redeemed to the date of redemption, subject to the rights of Holders on the relevant record date to receive
interest due on the relevant interest payment date; provided that in the case of any redemption in part, at least 50% of the aggregate principal amount of Notes issued under the Indenture (including any Additional Notes) remains outstanding after
giving effect to such redemption. 
  
 (6)
MANDATORY REDEMPTION. 
  
 The Company is not be required to make mandatory redemption or sinking fund payments with respect to the Notes. 
  

 A2-4 

 (7) REPURCHASE AT THE
OPTION OF HOLDER. 
  
 (a) Upon the occurrence of a Change of Control, the Company will make an offer (a “Change of Control Offer”) to each
Holder to repurchase all or any part (equal to $1,000 or an integral multiple of $1,000) of that Holder’s Notes at a purchase price in cash equal to 101% of the aggregate principal amount of Notes repurchased plus accrued and unpaid interest
and Special Interest, if any, on the Notes repurchased to the date of purchase, subject to the rights of Holders on the relevant record date to receive interest due on the relevant interest payment date (the “Change of Control
Payment”). Within 30 days following any Change of Control, the Company will mail a notice to each Holder setting forth the procedures governing the Change of Control Offer as required by the Indenture. 
  
 (b) If the Company or a Restricted Subsidiary of the Company
consummates any Asset Sales, when the aggregate amount of Excess Proceeds exceeds $15.0 million, the Company will commence an offer to all Holders of Notes and all holders of Parity Lien Debt containing provisions similar to those set forth in the
Indenture with respect to offers to purchase or redeem with the proceeds of sales of assets (an “Asset Sale Offer”) pursuant to Section 3.09 of the Indenture to purchase the maximum principal amount of Notes (including any
Additional Notes) and such other Parity Lien Debt that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof plus accrued and unpaid interest and Special Interest, if any,
thereon to the date of purchase, in accordance with the procedures set forth in the Indenture, or the documentation governing such other Parity Lien Debt, respectively. To the extent that the aggregate amount of Notes (including any Additional
Notes) and other Parity Lien Debt tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company (or such Restricted Subsidiary) may use such deficiency for any purpose not otherwise prohibited by the Indenture. If the
aggregate principal amount of Notes and other Parity Lien Debt tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and such other Parity Lien Debt to be purchased on a pro rata basis.
Holders of Notes that are the subject of an offer to purchase will receive an Asset Sale Offer from the Company prior to any related purchase date and may elect to have such Notes purchased by completing the form entitled “Option of Holder
to Elect Purchase” attached to the Notes. Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero. 
  
 (8) NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30 days but not
more than 60 days before the redemption date to each Holder whose Notes are to be redeemed at its registered address, except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection
with a defeasance of the Notes or a satisfaction or discharge of the Indenture. Notes in denominations larger than $1,000 may be redeemed in part but only in whole multiples of $1,000, unless all of the Notes held by a Holder are to be redeemed. If
the Company complies with the redemption provisions set forth in the indenture, on and after the redemption or purchase date, interest will cease to accrue on the Notes or the portions of Notes called for redemption or purchase. 
  
 (9) DENOMINATIONS,
TRANSFER, EXCHANGE. The Notes are in registered form without coupons in minimum amounts of $2,000 and integral multiples of $1,000 in excess of $2,000. The transfer of Notes may be registered and
Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees
required by law or permitted by the Indenture. The Company need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Company
need not 

  

 A2-5 

 
exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed or during the period between a record date
and the corresponding Interest Payment Date. 
  
 (10) PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as its owner for all purposes. 
  
 (11) AMENDMENT, SUPPLEMENT AND
WAIVER. Subject to certain exceptions, the Indenture or the Notes or the Note Guarantees may be amended or supplemented with the consent of the Holders of at least a majority in aggregate principal amount of the
then outstanding Notes including, without limitation, Additional Notes, if any, voting as a single class (including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes), and
subject to Sections 6.04 and 6.07 of the Indenture, any existing Default or Event of Default (other than a Default or Event of Default in the payment of the principal of, premium or Special Interest, if any or interest on, the Notes, except a
payment default resulting from an acceleration has been rescinded) or compliance with any provision of the Indenture or the Notes or the Note Guarantees may be waived with the consent of the Holders of a majority in aggregate principal amount of the
then outstanding Notes (including, without limitation, Additional Notes, if any,) voting as a single class (including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes). In
addition, any amendment to, or waiver of, the provisions of the Indenture or any Security Document that has the effect of releasing all or substantially all of the Collateral from the Liens securing the Notes will require the consent of the Holders
of at least 66 2/3% in aggregate principal amount of the Notes then outstanding. Without the consent of any Holder of a Note, the Indenture or the Notes or the Note Guarantees may be amended or supplemented to cure any ambiguity, defect or
inconsistency, to provide for uncertificated Notes in addition to or in place of certificated Notes, to provide for the assumption of the Company’s or a Guarantor’s obligations to Holders of the Notes and Note Guarantees in case of a
merger or consolidation, to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights under the Indenture of any such Holder, to comply with the requirements
of the SEC in order to effect or maintain the qualification of the Indenture under the TIA, to conform the text of the Indenture, the Notes or the Note Guarantees to any provision of the “Description of Notes” section of the Offering
Circular, relating to the initial offering of the Notes, to the extent that such provision in that “Description of Notes” was intended to be a verbatim recitation of a provision of the Indenture, the Note Guarantees or the Notes; to
provide for the issuance of Additional Notes in accordance with the limitations set forth in the Indenture, to allow any Guarantor to execute a supplemental indenture and a Note Guarantee with respect to the Notes, to evidence and provide for the
acceptance of appointment under the Indenture by a successor Trustee or to make, complete or confirm any grant of Collateral permitted or required by the Indenture or any of the Security Documents or any release of Collateral that becomes effective
as set forth in the Indenture or any of the Security Documents. 
  
 (12) DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30 days in the payment when due of interest on, or Special Interest, if
any, with respect to, the Notes; (ii) default in the payment when due (at maturity, upon redemption or otherwise) of the principal of, or premium, if any, on, the Notes, (iii) failure by Holdings or any Restricted Subsidiary to comply
(a) for 30 days after written notice with Sections 4.10 and 4.15 of the Indenture or (b) with Section 5.01 of the Indenture; (iv) failure by the Holdings or any Restricted Subsidiary for 60 days after notice has been given to the
Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in aggregate principal amount of the Notes then outstanding voting as a single class to comply with any of the other agreements in the Indenture; 

  

 A2-6 

 
(v) default under certain other agreements relating to Indebtedness of Holdings or any Restricted Subsidiary which default is (a) caused by a failure to
pay any such Indebtedness at its stated final maturity after giving effect to any applicable grace periods or (b) results in the acceleration of such Indebtedness prior to its stated final maturity and in each case of (a) and (b) the
principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default of the maturity of which has been so accelerated, aggregates $20.0 million or more
(vi) certain final judgments for the payment of money that aggregate in excess of $20.0 million or more in excess of amounts that are covered by insurance that remain unpaid, undischarged or are not stayed for a period of 60 days;
(vii) the occurrence of any of the following: (a) except as permitted by the Indenture, any Security Document ceases for any reason to be fully enforceable unless the sole result of the failure of one or more Security Documents to be fully
enforceable is that any Parity Lien purported to be granted under such Security Documents on Collateral, individually or in the aggregate, having a Fair Market Value of not more than $20.0 million ceases to be an enforceable and perfected
second-priority Lien, subject only to Permitted Prior Liens; (b) any Parity Lien purported to be granted under any Security Document on Collateral, individually or in the aggregate, having a Fair Market Value in excess of $20.0 million ceases
to be an enforceable and perfected second-priority Lien, subject only to Permitted Prior Liens; or (c) the Company or any other Pledgor, or any Person acting on behalf of any of them, denies or disaffirms, in writing, any obligation of the
Company or any other Pledgor set forth in or arising under any Security Document, (viii) certain events of bankruptcy or insolvency with respect to the Company, Holdings or any of its Restricted Subsidiaries that is a Significant Subsidiary or
any group of Restricted Subsidiaries of Holdings that, taken together, would constitute a Significant Subsidiary; (ix) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law, under certain circumstances described
in the Indenture, and such order or decree remains unstayed and in effect for 60 consecutive days or (x) except as permitted by the Indenture, the Note Guarantee of Holdings or any Restricted Subsidiary that is a Significant Subsidiary shall be
held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any Guarantor or any Person acting on behalf of any Guarantor shall deny or disaffirm its obligations under such
Guarantor’s Note Guarantee. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately.
Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency, all outstanding Notes will become due and payable immediately without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest or premium or Special Interest, if any,) if it determines that
withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the then outstanding Notes by written notice to the Trustee may, on behalf of the Holders of all of the Notes, rescind an acceleration or waive any
existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest or premium or Special Interest, if any, on, or the principal of, the Notes. The Company is
required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Company is required, upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or
Event of Default. 
  
 (13)
TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or
its 

  

 A2-7 

 
Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Trustee. 
  
 (14) NO RECOURSE
AGAINST OTHERS. A director, officer, employee, incorporator or stockholder of the Company or any of the Guarantors, as such, will not have any liability for any obligations of the Company or the
Guarantors under the Notes, the Note Guarantees or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Notes. 
  
 (15) AUTHENTICATION. This Note will not be valid until authenticated by the manual signature of the Trustee or an authenticating agent. 
  
 (16) ABBREVIATIONS.
Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act). 
  
 (17) ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND
RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders of Notes under the Indenture, Holders of Restricted Global Notes and Restricted Definitive Notes will have all
the rights set forth in the Registration Rights Agreement dated as of October 4, 2005, among the Company, the Guarantors and the other parties named on the signature pages thereof or, in the case of Additional Notes, Holders of Restricted
Global Notes and Restricted Definitive Notes will have the rights set forth in one or more registration rights agreements, if any, among the Company, the Guarantors and the other parties thereto, relating to rights given by the Company and the
Guarantors to the purchasers of any Additional Notes (collectively, the “Registration Rights Agreement”). 
  
 (18) CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security
Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes, and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers
either as printed on the Notes or as contained in any notice of redemption, and reliance may be placed only on the other identification numbers placed thereon. 
  

(19) GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THIS NOTE AND
THE NOTE GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. 
  
 The Company will furnish to any Holder upon written request and without charge a copy of the Indenture, Intercreditor
Agreement, Security Documents and/or the Registration Rights Agreement. Requests may be made to: 
  
 Brookstone Company, Inc. 
 One Innovation Way 
 Merrimack, New Hampshire 03054 
 Attention: General Counsel 
  

 A2-8 

 ASSIGNMENT FORM 
  
 To assign this Note, fill in the form below: 
  

			
	(I) or (we) assign and transfer this Note to: ________________________________________________________
	 	 	(Insert assignee’s legal name)

  

 (Insert assignee’s soc. sec. or tax I.D. no.) 
  

  

  

  

 (Print or
type assignee’s name, address and zip code) 
  
 and irrevocably appoint
_______________________________________________________________________ to transfer this Note on the books of the Company. The agent may substitute another to act for him. 
  
 Date:                     

  

			
	Your Signature:	 	 
	(Sign exactly as your name appears on the face of this Note)

  
 Signature Guarantee*:
                     
  

	*	Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). 

  

 A2-9 

 OPTION OF HOLDER TO ELECT
PURCHASE 
  
 If you want to elect to have this Note
purchased by the Company pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate box below: 
  

			
	  ̈
Section 4.10
	  	 ̈ Section 4.15

  
 If you want to elect
to have only part of the Note purchased by the Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you elect to have purchased: 
  
 $                     
  
 Date:                      
  

			
	Your Signature:	 	 
	(Sign exactly as your name appears on the face of this Note)

  

			
	Tax Identification No.: 	 	 

  
 Signature Guarantee*:
                     
  

	*	Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). 

  

 A2-10 

 SCHEDULE OF EXCHANGES OF
INTERESTS IN THE REGULATION S TEMPORARY GLOBAL NOTE 
  
 The following exchanges of a part of this Regulation S Temporary Global Note for an interest in another Global Note, or exchanges of a part of another
Restricted Global Note for an interest in this Regulation S Temporary Global Note, have been made: 
  

									
	 Date of Exchange  

	  	 Amount of decrease in
Principal Amount of
this Global Note

	  	 Amount of increase in
Principal Amount of
this Global Note

	  	 Principal Amount
of this Global Note
following such
decrease 
(or increase)

	  	 Signature of authorized
officer of Trustee or
Custodian

	 	  	 	  	 	  	 	  	 
	 	  	 	  	 	  	 	  	 
	 	  	 	  	 	  	 	  	 

  

 A2-11 

 EXHIBIT B 
  
 FORM OF CERTIFICATE OF TRANSFER 
  
 Brookstone Company, Inc. 
 One Innovation Way 
 Merrimack, New Hampshire 03054 
 Attention: General Counsel 
  
 Wells Fargo Bank, N.A. 
 Corporate Trust Services 
 213 Court Street, Suite 703 
 Middletown, CT 06457 
  

	Re:	12.00% Second Lien Senior Secured Notes due 2012 

  
 Reference is hereby made to the Indenture, dated as of October 4, 2005 (the “Indenture”), among Brookstone Company, Inc., as issuer
(the “Company”), the Guarantors party thereto and Wells Fargo Bank, N.A., as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. 
  
                                       
                  , (the “Transferor”) owns and proposes to transfer the Note[s] or interest in such Note[s] specified in Annex A hereto,
in the principal amount of $             in such Note[s] or interests (the “Transfer”), to
                                        
(the “Transferee”), as further specified in Annex A hereto. In connection with the Transfer, the Transferor hereby certifies that: 
  
 [CHECK ALL THAT APPLY] 
  
 1.  ̈ Check if Transferee will take delivery
of a beneficial interest in the 144A Global Note or a Restricted Definitive Note pursuant to Rule 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the Securities Act of 1933, as amended (the
“Securities Act”), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Definitive Note is being transferred to a Person that the Transferor reasonably believes is purchasing the beneficial
interest or Definitive Note for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a “qualified institutional buyer” within the
meaning of Rule 144A in a transaction meeting the requirements of Rule 144A, and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the 144A Global Note and/or the Restricted Definitive Note
and in the Indenture and the Securities Act. 
  
 2.  ̈ Check if Transferee will take delivery of a beneficial interest in the Regulation S Temporary Global Note, the Regulation S Permanent Global Note or
a Restricted Definitive Note pursuant to Regulation S. The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor hereby further certifies that
(i) the Transfer is not being made to a Person in the United States and (x) at the time the buy order was originated, the Transferee was outside the United States or such Transferor and any Person acting on its behalf reasonably believed
and believes that the Transferee was outside the United States or (y) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither such Transferor nor any Person acting on its behalf knows
that the transaction was prearranged with a buyer in the United States, (ii) no directed selling efforts have been made in contravention of the 

  

 B-1 

 
requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act, (iii) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act and (iv) if the proposed transfer is being made prior to the expiration of the Restricted Period, the transfer is not being made to a U.S. Person or for the account or benefit of a U.S. Person
(other than an Initial Purchaser). Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on Transfer enumerated in the
Private Placement Legend printed on the Regulation S Permanent Global Note, the Regulation S Temporary Global Note and/or the Restricted Definitive Note and in the Indenture and the Securities Act. 
  
 3.  ̈ Check and complete if Transferee will take delivery of a beneficial interest in the IAI Global Note or a Restricted Definitive Note pursuant to any provision of the Securities Act other than Rule 144A or
Regulation S. The Transfer is being effected in compliance with the transfer restrictions applicable to beneficial interests in Restricted Global Notes and Restricted Definitive Notes and pursuant to and in accordance with the Securities Act
and any applicable blue sky securities laws of any state of the United States, and accordingly the Transferor hereby further certifies that (check one): 
  
 (a)  ̈ such Transfer is being
effected pursuant to and in accordance with Rule 144 under the Securities Act; 
  
 or 
  
 (b)
 ̈ such Transfer is being effected to the Company or a subsidiary thereof; 
  
 or 
  
 (c)  ̈ such Transfer is being
effected pursuant to an effective registration statement under the Securities Act and in compliance with the prospectus delivery requirements of the Securities Act; 
  
 or 
  
 (d)  ̈ such Transfer is being
effected to an Institutional Accredited Investor and pursuant to an exemption from the registration requirements of the Securities Act other than Rule 144A, Rule 144, Rule 903 or Rule 904, and the Transferor hereby further certifies that it has not
engaged in any general solicitation within the meaning of Regulation D under the Securities Act and the Transfer complies with the transfer restrictions applicable to beneficial interests in a Restricted Global Note or Restricted Definitive Notes
and the requirements of the exemption claimed, which certification is supported by (1) a certificate executed by the Transferee in the form of Exhibit D to the Indenture and (2) an Opinion of Counsel provided by the Transferor or the
Transferee (a copy of which the Transferor has attached to this certification), to the effect that such Transfer is in compliance with the Securities Act. Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the IAI Global Note and/or the Restricted Definitive Notes and in the Indenture and the
Securities Act. 
  
 4.  ̈ Check if Transferee will take delivery of a beneficial interest in an Unrestricted Global Note or of an Unrestricted Definitive Note.

  
 (a)  ̈ Check if Transfer is pursuant to Rule 144. (i) The Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in
compliance with the transfer 

  

 B-2 

 
restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture. 
  
 (b)  ̈ Check if Transfer is Pursuant to Regulation S. (i) The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the
Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will
no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture. 
  
 (c)  ̈ Check if Transfer is Pursuant to Other Exemption. (i) The Transfer is being effected pursuant to and in compliance with an exemption from the registration
requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States and (ii) the
restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture,
the transferred beneficial interest or Definitive Note will not be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes or Restricted Definitive Notes and in the Indenture.

  
 This certificate and the statements contained herein are made
for your benefit and the benefit of the Company. 
  

	
	
	 
	 [Insert Name of Transferor]

  

			
		
	 By:
	 	 
	 Name:
	 	 
	 Title:
	 	 

  
 Dated:
                                        
                 
  

 B-3 

 ANNEX A TO CERTIFICATE OF TRANSFER 
  

	1.	The Transferor owns and proposes to transfer the following: 

  
 [CHECK ONE OF (a) OR (b)] 
  
 (a)  ̈ a beneficial interest in the: 

 

	 	(i)	 ̈ 144A Global Note (CUSIP
            ), or 

  

	 	(ii)	 ̈ Regulation S Global Note (CUSIP
            ), or 

  

	 	(iii)	 ̈ IAI Global Note (CUSIP
            ); or 

  
 (b)  ̈ a Restricted Definitive Note. 

 

	2.	After the Transfer the Transferee will hold: 

  
 [CHECK ONE] 
  
 (a)  ̈ a beneficial interest in the: 

 

	 	(i)	 ̈ 144A Global Note (CUSIP
            ), or 

  

	 	(ii)	 ̈ Regulation S Global Note (CUSIP
            ), or 

  

	 	(iii)	 ̈ IAI Global Note (CUSIP
            ); or 

  

	 	(iv)	 ̈ Unrestricted Global Note (CUSIP
            ); or 

  
 (b)  ̈ a Restricted Definitive Note; or

  
 (c)  ̈ an Unrestricted Definitive Note, 
  
 in accordance with the terms of the Indenture. 
  

 B-4 

 EXHIBIT C 
  
 FORM OF CERTIFICATE OF EXCHANGE 
  
 Brookstone Company, Inc. 
 One Innovation Way 
 Merrimack, New Hampshire 03054 
 Attention: General Counsel 
  
 Wells Fargo Bank, N.A. 
 Corporate Trust Services 
 213 Court Street, Suite 703 
 Middletown, CT 06457 
  

	Re:	12.00% Second Lien Senior Secured Notes due 2012 

  
 (CUSIP                 ) 
  
 Reference is hereby made to the Indenture, dated as of October 4, 2005
(the “Indenture”), among Brookstone Company, Inc., as issuer (the “Company”), the Guarantors party thereto and Wells Fargo Bank, N.A., as trustee. Capitalized terms used but not defined herein shall have the
meanings given to them in the Indenture. 
  
                                 , (the “Owner”)
owns and proposes to exchange the Note[s] or interest in such Note[s] specified herein, in the principal amount of $                 in such Note[s] or interests
(the “Exchange”). In connection with the Exchange, the Owner hereby certifies that: 
  
 1. Exchange of Restricted Definitive Notes or Beneficial Interests in a Restricted Global Note for Unrestricted Definitive Notes or Beneficial
Interests in an Unrestricted Global Note 
  
 (a)
 ̈ Check if Exchange is from beneficial interest in a Restricted Global Note to beneficial interest in an Unrestricted
Global Note. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a beneficial interest in an Unrestricted Global Note in an equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in accordance with the
Securities Act of 1933, as amended (the “Securities Act”), (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act
and (iv) the beneficial interest in an Unrestricted Global Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States. 
  
 (b)  ̈ Check if Exchange is from beneficial interest in a Restricted Global Note to Unrestricted Definitive Note. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for an
Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance
with the Securities Act and (iv) the Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States. 
  

 C-1 

 (c)  ̈ Check if Exchange is from Restricted Definitive Note to beneficial interest in an Unrestricted Global Note. In connection with the Owner’s Exchange of a Restricted Definitive Note for a beneficial interest in an Unrestricted
Global Note, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to
Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the
Securities Act and (iv) the beneficial interest is being acquired in compliance with any applicable blue sky securities laws of any state of the United States. 
  
 (d)  ̈ Check if Exchange is from Restricted Definitive Note to Unrestricted Definitive Note. In connection with the Owner’s Exchange of a Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes
and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States. 
  
 2. Exchange of Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes for Restricted Definitive Notes or Beneficial
Interests in Restricted Global Notes 
  
 (a)
 ̈ Check if Exchange is from beneficial interest in a Restricted Global Note to Restricted Definitive Note. In
connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a Restricted Definitive Note with an equal principal amount, the Owner hereby certifies that the Restricted Definitive Note is being acquired for
the Owner’s own account without transfer. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Restricted Definitive Note issued will continue to be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the Restricted Definitive Note and in the Indenture and the Securities Act. 
  
 (b)  ̈ Check if Exchange
is from Restricted Definitive Note to beneficial interest in a Restricted Global Note. In connection with the Exchange of the Owner’s Restricted Definitive Note for a beneficial interest in the [CHECK ONE]  ̈ 144A Global Note,  ̈ Regulation S Global Note,  ̈ IAI Global Note with an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own
account without transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, and in compliance with any
applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the beneficial interest issued will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the relevant Restricted Global Note and in the Indenture and the Securities Act. 
  

 C-2 

 This certificate and the statements contained herein are made for your benefit and the benefit of the
Company. 
  

	
	
	 
	 [Insert Name of Transferor]

  

			
		
	 By:
	 	 
	 Name:
	 	 
	 Title:
	 	 

  
 Dated:
                                        
                 
  

 C-3 

 EXHIBIT D 
  
 FORM OF CERTIFICATE FROM 
 ACQUIRING
INSTITUTIONAL ACCREDITED INVESTOR 
  
 Brookstone Company, Inc. 
 One Innovation Way 
 Merrimack, New Hampshire 03054 
 Attention: General Counsel 
  
 Wells Fargo Bank, N.A. 
 Corporate Trust Services 
 213 Court Street, Suite 703 
 Middletown, CT 06457 
  

	Re:	12.00% Second Lien Senior Secured Notes due 2012 

  
 Reference is hereby made to the Indenture, dated as of October 4, 2005 (the “Indenture”), among Brookstone Company, Inc., as issuer
(the “Company”), the Guarantors party thereto and Wells Fargo Bank, N.A., as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. 
  
 In connection with our proposed purchase of
$                 aggregate principal amount of: 
  
 (a)  ̈ a beneficial interest in a Global Note, or

  
 (b)  ̈ a Definitive Note, 
  
 we confirm that: 
  
 1. We
understand that any subsequent transfer of the Notes or any interest therein is subject to certain restrictions and conditions set forth in the Indenture and the undersigned agrees to be bound by, and not to resell, pledge or otherwise transfer the
Notes or any interest therein except in compliance with, such restrictions and conditions and the Securities Act of 1933, as amended (the “Securities Act”). 
  
 2. We understand that the offer and sale of the Notes have not been registered under the Securities Act, and that the Notes
and any interest therein may not be offered or sold except as permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we should sell the Notes or any
interest therein, we will do so only (A) to the Company or any subsidiary thereof, (B) in accordance with Rule 144A under the Securities Act to a “qualified institutional buyer” (as defined therein), (C) to an institutional
“accredited investor” (as defined below) that, prior to such transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to you and to the Company a signed letter substantially in the form of this letter and an Opinion of
Counsel in form reasonably acceptable to the Company to the effect that such transfer is in compliance with the Securities Act, (D) outside the United States in accordance with Rule 904 of Regulation S under the Securities Act,
(E) pursuant to the provisions of Rule 144(k) under the Securities Act or (F) pursuant to an effective registration statement under the Securities Act, and we further agree to provide to any Person purchasing the Definitive Note or
beneficial interest in a Global Note from us in a transaction meeting the requirements of clauses (A) through (E) of this paragraph a notice advising such purchaser that resales thereof are restricted as stated herein. 
  

 D-1 

 3. We understand that, on any proposed resale of the Notes or beneficial interest therein, we will be
required to furnish to you and the Company such certifications, legal opinions and other information as you and the Company may reasonably require to confirm that the proposed sale complies with the foregoing restrictions. We further understand that
the Notes purchased by us will bear a legend to the foregoing effect. 
  
 4. We are an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Notes, and we and any accounts for which we are acting are each able to bear the economic risk of our or its investment. 
  
 5. We are acquiring the Notes or beneficial interest therein purchased by us
for our own account or for one or more accounts (each of which is an institutional “accredited investor”) as to each of which we exercise sole investment discretion. 
  
 You and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby. 
  

	
	
	 
	 [Insert Name of Accredited Investor]

  

			
		
	 By:
	 	 
	 Name:
	 	 
	 Title:
	 	 

  
 Dated:
                                        
                 
  

 D-2 

 EXHIBIT E 
  
 FORM OF NOTATION OF GUARANTEE 
  
 For value received, each Guarantor (which term includes any successor Person under the Indenture) has, jointly and severally, unconditionally guaranteed,
to the extent set forth in the Indenture and subject to the provisions in the Indenture dated as of October 4, 2005 (the “Indenture”) among Brookstone Company, Inc,, (the “Company”), the Guarantors party
thereto and Wells Fargo Bank, N.A., as trustee (the “Trustee”), (a) the due and punctual payment of the principal of, premium and Special Interest, if any, and interest on, the Notes, whether at maturity, by acceleration,
redemption or otherwise, the due and punctual payment of interest on overdue principal of and interest on the Notes, if any, if lawful, and the due and punctual performance of all other obligations of the Company to the Holders or the Trustee all in
accordance with the terms of the Indenture and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that the same will be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. The obligations of the Guarantors to the Holders of Notes and to the Trustee pursuant to the Note Guarantee and the Indenture are expressly set forth in
Article 11 of the Indenture and reference is hereby made to the Indenture for the precise terms of the Note Guarantee. 
  
 Capitalized terms used but not defined herein have the meanings given to them in the Indenture. 
  

			
	 BROOKSTONE, INC.

		
	 By:
	 	 
	 Name:
	 	 
	 Title:
	 	 
	
	 BROOKSTONE INTERNATIONAL HOLDINGS, INC.

		
	 By:
	 	 
	 Name:
	 	 
	 Title:
	 	 
	
	 BROOKSTONE PURCHASING, INC.

		
	 By:
	 	 
	 Name:
	 	 
	 Title:
	 	 
	
	 BROOKSTONE STORES, INC.

		
	 By:
	 	 
	 Name:
	 	 
	 Title:
	 	 

  

 E-1 

			
	 BROOKSTONE RETAIL PUERTO RICO,
INC.

		
	 By:
	 	 
	 Name:
	 	 
	 Title:
	 	 
	
	 BROOKSTONE HOLDINGS, INC.

		
	 By:
	 	 
	 Name:
	 	 
	 Title:
	 	 
	
	 BROOKSTONE PROPERTIES, INC.

		
	 By:
	 	 
	 Name:
	 	 
	 Title:
	 	 
	
	 ADVANCED AUDIO CONCEPTS, LIMITED

		
	 By:
	 	 
	 Name:
	 	 
	 Title:
	 	 
	
	 GARDENERS EDEN, INC.

		
	 By:
	 	 
	 Name:
	 	 
	 Title:
	 	 

  

 E-2 

 EXHIBIT F 
  
 FORM OF SUPPLEMENTAL INDENTURE 
 TO BE DELIVERED
BY SUBSEQUENT GUARANTORS 
  
 SUPPLEMENTAL
INDENTURE (this “Supplemental Indenture”), dated as of                     , 200  , among
                     (the “Guaranteeing Subsidiary”), a subsidiary of Brookstone Company, Inc. (or its permitted successor),
a New Hampshire corporation (the “Company”), the Company, the other Guarantors (as defined in the Indenture referred to herein) and Wells Fargo Bank, N.A., as trustee under the Indenture referred to below (the
“Trustee”). 
  
 W I T N E S S E T H 
  
 WHEREAS, the Company has heretofore executed and delivered to the Trustee an
indenture (the “Indenture”), dated as of October 4, 2005 providing for the issuance of 12.00% Second Lien Senior Secured Notes due 2012 (the “Notes”); 
  
 WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Company’s Obligations under the Notes and the Indenture on the
terms and conditions set forth herein (the “Note Guarantee”); and 
  
 WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture. 
  
 NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is
hereby acknowledged, the Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows: 
  
 1. CAPITALIZED TERMS. Capitalized terms used herein without definition shall have the meanings
assigned to them in the Indenture. 
  
 2. AGREEMENT
TO GUARANTEE. The Guaranteeing Subsidiary hereby agrees to provide an unconditional Guarantee on the terms and subject to the conditions set forth in the Note Guarantee and in the Indenture including but not limited to
Article 11 thereof. 
  
 4. NO
RECOURSE AGAINST OTHERS. No past, present or future director, officer, employee, incorporator, stockholder or agent of the Guaranteeing Subsidiary, as such, shall have any liability for any obligations of
the Company or any Guaranteeing Subsidiary under the Notes, any Note Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of the Notes by
accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Such waiver may not be effective to waive liabilities under the federal securities laws and it is the view of
the SEC that such a waiver is against public policy. 
  
 5. NEW
YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. 
  

 H-1 

 6. COUNTERPARTS. The parties may sign any number of copies of this Supplemental Indenture.
Each signed copy shall be an original, but all of them together represent the same agreement. 
  
 7. EFFECT OF HEADINGS. The Section headings herein are for convenience only and shall not affect the construction hereof. 
  
 8. THE TRUSTEE. The Trustee shall not be
responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary and the
Company. 
  

 H-2 

 IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed and
attested, all as of the date first above written. 
  
 Dated:                     , 20     
  

			
	 [GUARANTEEING SUBSIDIARY]

		
	 By:
	 	 
	 Name:
	 	 
	 Title:
	 	 
	
	 BROOKSTONE COMPANY, INC.

		
	 By:
	 	 
	 Name:
	 	 
	 Title:
	 	 
	
	 [EXISTING GUARANTORS]

		
	 By:
	 	 
	 Name:
	 	 
	 Title:
	 	 
	
	 [TRUSTEE],
 as Trustee

		
	 By:
	 	 
	 	 	 Authorized Signatory

  

 H-3 

 EXHIBIT G 
  
 Form of Intercreditor Agreement 
  

 G-1 

 EXHIBIT H 
  
 Form of Security Agreement 
  

 H-1 

 EXHIBIT I 
  
 Form of Intellectual Property Security Agreement 
  

 I-1 

 EXHIBIT J 
  
 Form of Collateral Agency Agreement 
  

 J-1

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