Document:

Term Loan Agreement

 Exhibit 10.1 
  

 TERM LOAN AGREEMENT 
 dated as of 
 September 6, 2006 
 Between 
 HARTE-HANKS, INC. 
 The LENDERS Party Hereto, 
 WELLS
FARGO BANK, NATIONAL ASSOCIATION 
 as Administrative Agent, Sole Lead Arranger and Sole Bookrunner 
  

 TABLE OF CONTENTS 
  

					
	 	 	 	  	Page
		 	ARTICLE I	  	
			
		 	DEFINITIONS	  	
			
	 SECTION 1.01.
	 	 Defined Terms
	  	1
	 SECTION 1.02.
	 	 Terms Generally
	  	12
	 SECTION 1.03.
	 	 Accounting Terms; GAAP
	  	12
			
		 	ARTICLE II	  	
			
		 	THE CREDITS	  	
			
	 SECTION 2.01.
	 	 The Commitments
	  	12
	 SECTION 2.02.
	 	 Loans and Borrowings
	  	13
	 SECTION 2.03.
	 	 Requests for Borrowings
	  	13
	 SECTION 2.04.
	 	 Funding of Borrowings
	  	14
	 SECTION 2.05.
	 	 Interest Elections
	  	15
	 SECTION 2.06.
	 	 Increase of the Commitments
	  	16
	 SECTION 2.07.
	 	 Termination and Reduction of the Commitments
	  	19
	 SECTION 2.08.
	 	 Repayment of Loans; Evidence of Debt
	  	20
	 SECTION 2.09.
	 	 Prepayment of Loans
	  	21
	 SECTION 2.10.
	 	 Fees
	  	21
	 SECTION 2.11.
	 	 Interest
	  	22
	 SECTION 2.12.
	 	 Alternate Rate of Interest
	  	23
	 SECTION 2.13.
	 	 Increased Costs
	  	23
	 SECTION 2.14.
	 	 Break Funding Payments
	  	24
	 SECTION 2.15.
	 	 Taxes
	  	24
	 SECTION 2.16.
	 	 Payments Generally; Pro Rata Treatment; Sharing of Set-offs
	  	25
	 SECTION 2.17.
	 	 Mitigation Obligations; Replacement of Lenders
	  	27
			
		 	ARTICLE III	  	
			
		 	REPRESENTATIONS AND WARRANTIES	  	
			
	 SECTION 3.01.
	 	 Organization; Powers
	  	28
	 SECTION 3.02.
	 	 Authorization; Enforceability
	  	28
	 SECTION 3.03.
	 	 Governmental Approvals; No Conflicts
	  	28
	 SECTION 3.04.
	 	 Financial Condition; No Material Adverse Change
	  	28
	 SECTION 3.05.
	 	 Properties
	  	29
	 SECTION 3.06.
	 	 Litigation and Environmental Matters
	  	29
	 SECTION 3.07.
	 	 Compliance with Laws and Agreements
	  	29
	 SECTION 3.08.
	 	 Investment and Holding Company Status
	  	29
	 SECTION 3.09.
	 	 Taxes
	  	30
	 SECTION 3.10.
	 	 ERISA
	  	30

  

 -i- 

					
	 SECTION 3.11.
	 	 Disclosure
	  	30
	 SECTION 3.12.
	 	 Use of Credit
	  	30
	 SECTION 3.13.
	 	 Certain Agreements and Liens.
	  	30
	 SECTION 3.14.
	 	 Subsidiaries
	  	30
	 SECTION 3.15.
	 	 Deferred Compensation and Incentive Plans
	  	31
			
		 	ARTICLE IV	  	
			
		 	CONDITIONS	  	
			
	 SECTION 4.01.
	 	 Effective Date
	  	31
	 SECTION 4.02.
	 	 Each Credit Event
	  	32
			
		 	ARTICLE V	  	
			
		 	AFFIRMATIVE COVENANTS	  	
			
	 SECTION 5.01.
	 	 Financial Statements and Other Information
	  	32
	 SECTION 5.02.
	 	 Notices of Material Events
	  	33
	 SECTION 5.03.
	 	 Existence; Conduct of Business
	  	34
	 SECTION 5.04.
	 	 Payment of Obligations
	  	34
	 SECTION 5.05.
	 	 Maintenance of Properties; Insurance
	  	34
	 SECTION 5.06.
	 	 Books and Records; Inspection Rights
	  	34
	 SECTION 5.07.
	 	 Compliance with Laws
	  	34
			
		 	ARTICLE VI	  	
			
		 	NEGATIVE COVENANTS	  	
			
	 SECTION 6.01.
	 	 Liens
	  	35
	 SECTION 6.02.
	 	 Fundamental Changes
	  	36
	 SECTION 6.03.
	 	 Sale and Leasebacks
	  	36
	 SECTION 6.04.
	 	 Transactions with Affiliates
	  	37
	 SECTION 6.05.
	 	 Subsidiary Indebtedness
	  	37
	 SECTION 6.06.
	 	 Certain Financial Covenants
	  	38
			
		 	ARTICLE VII	  	
			
		 	EVENTS OF DEFAULT	  	
			
		 	ARTICLE VIII	  	
			
		 	THE ADMINISTRATIVE AGENT	  	

  

 -ii- 

					
		 	ARTICLE IX	  	
			
		 	MISCELLANEOUS	  	
			
	 SECTION 9.01.
	 	 Notices
	  	42
	 SECTION 9.02.
	 	 Waivers; Amendments
	  	43
	 SECTION 9.03.
	 	 Expenses; Indemnity; Damage Waiver
	  	44
	 SECTION 9.04.
	 	 Successors and Assigns
	  	45
	 SECTION 9.05.
	 	 Survival
	  	48
	 SECTION 9.06.
	 	 Counterparts; Integration; Effectiveness
	  	48
	 SECTION 9.07.
	 	 Severability
	  	48
	 SECTION 9.08.
	 	 Right of Setoff
	  	48
	 SECTION 9.09.
	 	 Governing Law; Jurisdiction; Etc.
	  	49
	 SECTION 9.10.
	 	 Waiver of Jury Trial
	  	49
	 SECTION 9.11.
	 	 Headings
	  	50
	 SECTION 9.12.
	 	 Treatment of Certain Information; Confidentiality
	  	50
	 SECTION 9.13.
	 	 USA Patriot Act
	  	51
	 SECTION 9.14.
	 	 Interest Rate Limitation
	  	51
	 SECTION 9.15.
	 	 ENTIRE AGREEMENT
	  	51

  

					
	 SCHEDULE I
	  	-	  	Commitments
	 SCHEDULE II
	  	-	  	Certain Agreements and Liens
	 SCHEDULE III
	  	-	  	Litigation
	 SCHEDULE IV
	  	-	  	Environmental Matters
	 SCHEDULE V
	  	-	  	Subsidiaries
	 EXHIBIT A
	  	-	  	Form of Assignment and Assumption
	 EXHIBIT B
	  	-	  	Form of Opinion of Counsel to the Borrower

  

 -iii- 

 TERM LOAN AGREEMENT 
 This TERM LOAN AGREEMENT dated as of September 6, 2006, between HARTE-HANKS, INC., a Delaware corporation (the “Borrower”),
each Lender (as herein defined) from time to time party hereto, and WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent. 
 The
Borrower has requested that the Lenders provide a term loan facility, and the Lenders have indicated their willingness to lend on the terms and conditions hereof. Accordingly, the parties hereto agree as follows: 
 ARTICLE I 
 DEFINITIONS

 SECTION 1.01. Defined Terms. As used in this Agreement, the following terms have the meanings specified below:

 “ABR”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans constituting
such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate. 
 “Additional Commitment
Increase” has the meaning assigned to such term in Section 2.06(b). 
 “Additional Commitment
Increase Amendment” has the meaning assigned to such term in Section 2.06(b). 
 “Additional
Commitment Increase Effective Date” has the meaning assigned to such term in Section 2.06(b). 
 “Adjusted LIBO Rate” means, for the Interest Period for any Eurodollar Borrowing (other than a Daily Floating Eurodollar Borrowing), an interest rate per annum (rounded upwards, if necessary, to the next 1/100 of 1%)
equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate for such Interest Period. 
 “Administrative Agent” means Wells Fargo Bank, National Association, in its capacity as administrative agent for the Lenders hereunder and its permitted successor or successors as administrative agent for the Lenders
under this Agreement. 
 “Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by
the Administrative Agent. 
 “Affiliate” means, with respect to a specified Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. 
 “Agreement” means this Term Loan Agreement (as the same may be amended, modified, supplemented, or restated from time to time). 
 “Alternate Base Rate” means, for any day, a rate per annum equal to the greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate for such day
plus 1/2 of 

 
1%. Any change in the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective from and including the
effective date of such change in the Prime Rate or the Federal Funds Effective Rate, as the case may be. 
 “Annual
Report” has the meaning assigned to such term in Section 5.01(a). 
 “Applicable
Percentage” means, with respect to any Lender, (a) on any date of determination prior to the Commitment Termination Date, the percentage that such Lender’s Commitment bears to the aggregate Commitments of all the Lenders;
(b) on any date of determination on or after the Commitment Termination Date, the percentage that such Lender’s Credit Exposure bears to the aggregate Credit Exposure of all the Lenders. 
 “Applicable Rate” means, for any day, with respect to any ABR Loan or Eurodollar Loan, or with respect to the facility fees
payable hereunder, as the case may be, the applicable rate per annum set forth below under the caption “ABR Margin”, “Eurodollar Margin” or “Facility Fee Rate”, respectively, based upon the
Leverage Ratio as of the most recent determination date: 
  

										
	 Maximum Leverage Ratio
	  	ABR Margin	 	 	Eurodollar Margin	 	 	Facility Fee Rate	 
	 Category 1
 Less than 1.50x
	  	0.000	%	 	0.315	%	 	0.085	%
	 Category 2
 Equal to or greater than 1.50x but less than or equal to 2.50x
	  	0.000	%	 	0.500	%	 	0.125	%
	 Category 3
 Greater than 2.50x
	  	0.000	%	 	0.600	%	 	0.150	%

 For purposes of the foregoing, (i) the Leverage Ratio shall be determined as of the end of
each fiscal quarter of the Borrower’s fiscal year based upon the Borrower’s consolidated financial statements delivered pursuant to Section 5.01(a) or (b) and (ii) each change in the Applicable
Rate resulting from a change in the Leverage Ratio shall be effective during the period commencing on and including the date three Business Days after delivery to the Administrative Agent of such consolidated financial statements indicating such
change and ending on the date immediately preceding the effective date of the next such change; provided that (i) the Leverage Ratio shall be deemed to be in Category 3 (A) at any time that an Event of Default has occurred and is
continuing and (B) if the Borrower fails to deliver the consolidated financial statements required to be delivered by it pursuant to Section 5.01(a) or (b), during the period from the expiration of the time
for delivery thereof until such consolidated financial statements are delivered; and (ii) until the date three Business Days after the first delivery of the Borrower’s consolidated financial statements pursuant to
Section 5.01, the “Applicable Rate” shall be the applicable rate per annum set forth above under the captions “Eurodollar Margin” and “Facility Fee Rate” in Category 1.

 “Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a
Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender. 
  

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 “Arranger” means Wells Fargo Bank, National Association., in its capacity as sole
lead arranger and sole bookrunner. 
 “Assignment and Assumption” means an assignment and assumption entered into by
a Lender and an assignee (with the consent of any party whose consent is required by Section 9.04), and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the
Administrative Agent. 
 “Availability Period” means the period from and including the Effective Date to the
Commitment Termination Date. 
 “Board” means the Board of Governors of the Federal Reserve System of the United
States of America. 
 “Borrower” means Harte-Hanks, Inc., a Delaware corporation. 
 “Borrowing” means (a) all ABR Loans or Daily Floating Eurodollar Loans made, converted or continued on the same date,
or (b) all Eurodollar Loans (other than Daily Floating Eurodollar Loans) of the same Type that have the same Interest Period. For purposes hereof, the date of a Borrowing comprising Loans that have been converted or continued shall be the
effective date of the most recent conversion or continuation of such Loans. 
 “Borrowing Request” means a request by
the Borrower for a Borrowing in accordance with Section 2.03. 
 “Business Day” means any day that
is not a Saturday, Sunday or other day on which commercial banks in Dallas, Texas and San Francisco, California are authorized or required by law to remain closed; provided that, when used in connection with a Eurodollar Loan, the term
“Business Day” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market. 
 “Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal
property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP. 
 “Change in Control” means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the date hereof), of shares representing more
than 25% of the aggregate ordinary voting power represented by the issued and outstanding capital stock of the Borrower; (b) occupation of a majority of the seats (other than vacant seats) on the board of directors of the Borrower by Persons
who were neither (i) nominated by the board of directors of the Borrower nor (ii) appointed by directors so nominated; or (c) the acquisition of direct or indirect Control of the Borrower by any Person or group. 
 “Change in Law” means (a) the adoption of any law, rule or regulation after the date of this Agreement, (b) any change
in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement or (c) compliance by any Lender (or, for purposes of Section 2.13, by any lending
office of such Lender or by such Lender’s holding company, if 

  

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any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this
Agreement. 
 “Code” means the Internal Revenue Code of 1986, as amended from time to time. 
 “Commitment” means, with respect to each Lender on any date of determination, the commitment of such Lender to make Loans
hereunder, as such commitment may be (a) reduced from time to time pursuant to Section 2.07, (b) increased pursuant to Section 2.06, (c) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 9.04, and (d) reduced from time to time by such Lender’s Applicable Percentage of the Funded Amount. The initial amount of each Lender’s Commitment is set forth
on Schedule I, or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Commitment, as applicable. The initial aggregate amount of the Lenders’ Commitments is $50,000,000. 
 “Commitment Termination Date” means the earliest of (i) the first anniversary of the Effective Date,
(ii) the Maturity Date, and (iii) any date upon which all of the Commitments of the Lenders to make Loans have been terminated in accordance with the terms of this Agreement. 
 “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or
policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto. 
 “Credit Exposure” means, with respect to any Lender at any time, the sum of the outstanding principal amount of such
Lender’s Loans. 
 “Daily Floating Eurodollar Borrowing” mean a Borrowing consisting of Loans that bear interest
at a rate determined by reference to the Daily Floating Eurodollar Rate. 
 “Daily Floating Eurodollar Loan” means a
Loan that bears interest at a rate determined by reference to the Daily Floating Eurodollar Rate. 
 “Daily Floating Eurodollar
Rate” means, for any day, the rate per annum equal to the British Bankers Association LIBO Rate (“BBA LIBOR”), as published by the Telerate Service (or any successor to or substitute for such Service, providing
quotations comparable to those currently provided by such Service, as determined by the Administrative Agent from time to time for purposes of providing quotations of BBA LIBOR applicable to Dollar deposits in the London interbank market) at
approximately 11:00 a.m. (London time) on such day (if such day is a Business Day) or the immediately preceding Business Day (if such day is not a Business Day), for U.S. dollar deposits with a term equivalent to one (1) month. 

“Default” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both
would, unless cured or waived, become an Event of Default. 
 “Disclosed Matters” means the actions, suits and
proceedings disclosed in Schedule III and the environmental matters disclosed in Schedule IV. 
 “Disposition” means any sale, assignment, transfer or other disposition of any property (whether now owned or hereafter acquired) by the Borrower or any of its Subsidiaries to any other Person (other than the
Borrower or any of its Subsidiaries) excluding (i) any sale, assignment, transfer or other disposition of any property sold or disposed of in the ordinary course of business and on ordinary business terms and (ii) any loss or damage to, or
any condemnation or taking of, any property. 
  

 4 

 “Dollars” or “$” refers to lawful money of the United
States of America. 
 “EBITDA” means, for any period, the sum, for the Borrower and its Subsidiaries (determined on a
consolidated basis without duplication in accordance with GAAP), of the following: (a) income (loss) from operations (calculated before Interest Expense, taxes, extraordinary and unusual items and income or loss attributable to equity in
Affiliates) for such period plus (b) depreciation, amortization and other non-cash charges (to the extent deducted in determining income (loss) from operations) for such period. Notwithstanding the foregoing, if during any period for
which EBITDA is being determined, the Borrower or any of its Subsidiaries shall have consummated any acquisition or shall have consummated any Disposition, then, for all purposes of this Agreement, EBITDA shall be determined on a pro forma basis as
if such acquisition or such Disposition had been made or consummated on the first day of such period. 
 “Effective
Date” means the date on which the conditions specified in Section 4.01 are satisfied (or waived in accordance with Section 9.02). 
 “Environmental Laws” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or
binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, release or threatened release of any Hazardous Material
or to health and safety matters. 
 “Environmental Liability” means any liability, contingent or otherwise (including
any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the
generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or
(e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing. 
 “Equity Rights” means, with respect to any Person, any subscriptions, options, warrants, commitments, preemptive rights or agreements of any kind (including any shareholders’ or voting
trust agreements) for the issuance, sale, registration or voting of, or securities convertible into, any additional shares of capital stock of any class, or partnership or other ownership interests of any type in, such Person. 
 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time. 
 “ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a
single employer under Section 414(b) or (c) of the Code, or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of
the Code. 
 “ERISA Event” means (a) any “reportable event”, as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) the existence with respect to any Plan of an “accumulated funding
deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any 

  

 5 

 
Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate
any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or
(g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA. 
 “Eurodollar”, when used in reference to any Loan or Borrowing, refers to such Loan, or the Loans constituting such Borrowing, that are bearing interest at a rate determined by reference to the Adjusted LIBO Rate or,
solely during the period between the Effective Date and the Initial Commitment Increase Date, the Daily Floating Eurodollar Rate. 
 “Event of Default” has the meaning assigned to such term in Article VII. 
 “Exchange Act” means the United States Securities Exchange Act of 1934, as amended. 
 “Excluded
Taxes” means, with respect to the Administrative Agent, any Lender or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) income or franchise taxes imposed on (or measured
by) its net income by the United States of America, or by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is
located, (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which the Borrower is located and (c) in the case of a Foreign Lender (other than an assignee pursuant to
a request by the Borrower under Section 2.17(b)), any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement (or designates a new lending office)
or is attributable to such Foreign Lender’s failure or inability to comply with Section 2.15(e), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new
lending office (or assignment), to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 2.15(a). 
 “Federal Funds Effective Rate” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it. 
 “Financial Officer” means the chief financial officer, principal accounting officer, treasurer or controller of the Borrower.

 “Foreign Lender” means any Lender that is organized under the laws of a jurisdiction other than that in which the
Borrower is located. For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction. 
 “Fund” means any Person (other than a natural person) that is or will be engaged in making, purchasing, holding, or otherwise
investing in commercial loans and similar extensions of credit in the ordinary course of its business. 
  

 6 

 “Funded Amount” means, on any date of determination, the aggregate principal
amount of all Loans made on and after the Effective Date to such date of determination, including any Loans which have been repaid prior to such date of determination, but excluding the aggregate principal amount of any Loans repaid on any Increase
Effective Date with the proceeds of Loans concurrently made on such Increase Effective Date. 
 “GAAP” means
generally accepted accounting principles in the United States of America. 
 “Governmental Authority” means the
government of the United States of America, or of any other nation, or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government. 
 “Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness of
any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner
of such Indebtedness of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or
(d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness; provided that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.

 “Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic
substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature
regulated pursuant to any Environmental Law. 
 “Hedging Agreement” means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement. 
 “Increase Effective Date” means the Initial Commitment Increase Effective Date or any Additional Commitment Increase Effective Date. 
 “Indebtedness” of any Person means, without duplication, (a) all obligations of such Person for borrowed money (or with
respect to deposits or advances of any kind that have substantially the same effect as obligations for borrowed money), (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of
such Person upon which interest charges are customarily paid (excluding current accounts payable incurred in the ordinary course of business), (d) all obligations of such Person under conditional sale or other title retention agreements
relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby
has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, and (i) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances.
The Indebtedness 

  

 7 

 
of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such
Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor. 
 “Indemnified Taxes” means Taxes other than Excluded Taxes. 
 “Initial Commitment Increase” has the meaning assigned to such term in Section 2.06(a). 
 “Initial Commitment Increase Amendment” has the meaning assigned to such term in Section 2.06(a). 
 “Initial Commitment Increase Effective Date” has the meaning assigned to such term in
Section 2.06(a). 
 “Interest Coverage Ratio” means, as at any date of determination thereof, the
ratio of (a) EBITDA for the period of four fiscal quarters ending on or most recently ended prior to such date to (b) Interest Expense for such period. 
 “Interest Election Request” means a request by the Borrower to convert or continue a Borrowing in accordance with Section 2.05. 
 “Interest Expense” means, for any period, the sum, for the Borrower and its Subsidiaries (determined on a consolidated basis
without duplication in accordance with GAAP), of the following: (a) all interest in respect of Indebtedness (including the interest component of any payments in respect of Capital Lease Obligations) accrued or capitalized during such period
(whether or not actually paid during such period) plus (b) the net amount payable (or minus the net amount receivable) under Hedging Agreements relating to interest during such period (whether or not actually paid or received
during such period). Notwithstanding the foregoing, if during any period for which Interest Expense is being determined, the Borrower or any of its Subsidiaries shall have consummated any acquisition or Disposition, then, for all purposes of this
Agreement, Interest Expense shall be determined on a pro forma basis as if such acquisition or Disposition (and any Indebtedness incurred by the Borrower or any of its Subsidiaries in connection with such acquisition or repaid as a result of such
Disposition) had been made or consummated (and such Indebtedness incurred or repaid) on the first day of such period. 
 “Interest
Payment Date” means (a) with respect to any ABR Loan, each Quarterly Date, (b) with respect to any Eurodollar Loan (other than a Daily Floating Eurodollar Loan), the last day of each Interest Period therefor and, in the
case of any Interest Period for a Eurodollar Loan of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at three-month intervals after the first day of such Interest Period, and (c) with
respect to any Daily Floating Eurodollar Loan on each Quarterly Date and on the Initial Commitment Increase Effective Date. 
 “Interest Period” means for any Eurodollar Loan (other than a Daily Floating Eurodollar Loan), the period commencing on the date of such Eurodollar Loan and ending (a) solely with respect to Eurodollar Loans
made during the thirty (30) day calendar period following any Increase Effective Date, on the date that is 7, 14, 21, and 28 days thereafter or (b) on the numerically corresponding day in the calendar month that is one, two, three or six
months thereafter, as specified in the applicable Borrowing Request or Interest Election Request; provided, that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless, such next succeeding Business Day would fall in the next calendar month, in which case such Interest 

  

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Period shall end on the next preceding Business Day, and (ii) any Interest Period (other than a 7, 14, 21, or 28 day Interest Period) that commences on
the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period. For
purposes hereof, the date of a Loan initially shall be the date on which such Loan is made and, thereafter shall be the effective date of the most recent conversion or continuation of such Loan. 
 “Lenders” means the Persons listed on Schedule I and any other Person that shall have become a party hereto
pursuant to an Assignment and Assumption, the Initial Commitment Increase Amendment, or any Additional Commitment Increase Amendment (other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption). 

“Leverage Ratio” means, as at any date, the ratio of (a) Indebtedness of the Borrower and its Subsidiaries (determined on
a consolidated basis without duplication in accordance with GAAP) on such date to (b) EBITDA for the period of four fiscal quarters ending on or most recently ended prior to such date. 
 “LIBO Rate” means, for the Interest Period for any Eurodollar Borrowing (other than a Daily Floating Eurodollar Borrowing), the
rate appearing on Page 3750 of the Telerate Service (or on any successor or substitute page of such Service, or any successor to or substitute for such Service, providing rate quotations comparable to those currently provided on such page of
such Service, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to Dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period, as the rate for the offering of Dollar deposits with a maturity comparable to such Interest Period. 
 “Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance securing the performance of an obligation, charge or security interest
in, on or of such asset (including, in the case of any account or other receivable, any sale thereof other than sales thereof in the ordinary course of business for purposes of collection of past-due receivables) and (b) the interest of a
vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset. 
 “Loan Documents” means this Agreement and documents, instruments, and certificates delivered pursuant to or in connection with
this Agreement, including, without limitation, any Initial Commitment Increase Amendment and any Additional Commitment Increase Amendment. 
 “Loans” means the loans made by the Lenders to the Borrower pursuant to this Agreement. 
 “Margin Stock” means “margin stock” within the meaning of Regulations T, U and X of the Board. 
 “Material Adverse Effect” means a material adverse effect on (a) the business, assets, properties, operations, prospects or condition, financial or otherwise, of the Borrower and its Subsidiaries taken as a
whole, (b) the ability of the Borrower to perform any of its obligations under this Agreement or any of the other Loan Documents or (c) the rights of or benefits available to the Lenders under this Agreement or any of the other Loan
Documents. 
  

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 “Material Indebtedness” means Indebtedness (other than the Loans), or obligations
in respect of one or more Hedging Agreements, of any one or more of the Borrower and its Subsidiaries in an aggregate principal amount exceeding $20,000,000. For purposes of determining Material Indebtedness, the “principal amount”
of the obligations of any Person in respect of any Hedging Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that such Person would be required to pay if such Hedging Agreement were terminated at
such time. 
 “Material Subsidiary” means any Subsidiary which (i) accounts for more than 5% of the total
consolidated revenue of the Borrower and its Subsidiaries or (ii) represents more than 5% of the total consolidated assets of the Borrower and its Subsidiaries. 
 “Maturity Date” means the earliest of (a) the fifth anniversary of the Effective Date, (b) if the Initial Commitment Increase Effective Date has not occurred on or before
October 31, 2006, the 90th day following the Effective Date, or (c) the date upon which the maturity of
the Loans has been accelerated; provided, however, that, in each case, if such date is not a Business Day, the Maturity Date shall be the preceding Business Day. 
 “Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA. 
 “Other Taxes” means any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or
similar levies arising from any payment made under any Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to any Loan Document. 
 “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions. 
 “Permitted Encumbrances” means: 
 (a) Liens imposed by law for taxes that are not yet due or are being contested in compliance with Section 5.04; 
 (b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law,
arising in the ordinary course of business and securing obligations that are not overdue by more than 30 days or are being contested in compliance with Section 5.04; 
 (c) pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and
other social security laws or regulations; 
 (d) cash deposits to secure the performance of bids, trade contracts, leases,
statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business; and 
 (e) judgment liens in respect of judgments that do not constitute an Event of Default under clause (k) of
Article VII. 
 provided that the term “Permitted Encumbrances” shall not
include any Lien securing Indebtedness. 
 “Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority or other entity. 
  

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 “Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under
Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA. 
 “Prime Rate” means the rate of interest per annum publicly announced from time to time by Wells Fargo as its prime rate in effect at its principal office in San Francisco; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being effective. 
 “Quarterly Dates”
means the last Business Day of the three full-calendar month period immediately following the Effective Date and the last Business Day of each three-calendar month period thereafter. 
 “Quarterly Report” has the meaning assigned to such term in Section 5.01(b). 
 “Register” has the meaning set forth in Section 9.04(c). 
 “Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the respective directors,
officers, employees, agents and advisors of such Person and such Person’s Affiliates. 
 “Required Lenders”
means, at any time, Lenders having Credit Exposures and unused Commitments representing more than 50% of the sum of the aggregate amount of the Credit Exposures and unused Commitments of all the Lenders at such time. 
 “Statutory Reserve Rate” means, for any Eurodollar Borrowing (determined daily with respect to any Daily Floating Eurodollar
Borrowings and determined for the applicable Interest Period with respect to all other Eurodollar Borrowings), for any Eurodollar Borrowing, a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which
is the number one minus the arithmetic mean, taken over each day in such Interest Period, of the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject for eurocurrency funding (currently referred to as “Eurocurrency liabilities” in Regulation D of the Board). Such reserve percentages shall include those
imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available
from time to time to any Lender under such Regulation D or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage. 
 “Subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation, limited liability
company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of
such date, as well as any other corporation, limited liability company, partnership, association or other entity of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power
or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held. Unless otherwise specified, “Subsidiary” means a Subsidiary of the Borrower. 
 “Taxes” means any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any
Governmental Authority. 
  

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 “Transactions” means the execution, delivery and performance by the Borrower of
this Agreement and the other Loan Documents, the borrowing of Loans, and the use of the proceeds thereof. 
 “Type”,
when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans constituting such Borrowing, is determined by reference to the Adjusted LIBO Rate, the Daily Floating Eurodollar Rate, or the
Alternate Base Rate. 
 “Wells Fargo” means Wells Fargo Bank, National Association. 
 “Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such
Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA. 
 SECTION 1.02. Terms
Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The
words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same
meaning and effect as the word “shall”. Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be
construed to include such Person’s successors and assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in
its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement and
(e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and
contract rights. 
 SECTION 1.03. Accounting Terms; GAAP. Except as otherwise expressly provided herein, all terms of an
accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to
eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any
provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith. 
 ARTICLE II 
 THE CREDITS 
 SECTION 2.01. The Commitments. Subject to the terms and conditions set forth herein, each Lender severally agrees to make Loans to the Borrower from time to time, on any Business Day during the
Availability Period in an aggregate principal amount not to exceed such Lender’s Applicable Percentage of (a) on or after the Effective Date but prior to the Initial Commitment Increase Effective Date, $50,000,000, and (b) on and
after each Increase Effective Date, the Aggregate Commitments of the Lenders as increased on such Increase Effective Date. Each Borrowing shall consist of Loans made simultaneously by the Lenders in accordance with their respective Applicable
Percentages. 
  

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 Amounts borrowed under this Section 2.01 and repaid or prepaid may not be reborrowed (except such
prepayments and concurrent reborrowings required to effect increases in the Commitments pursuant to Section 2.06). 
 SECTION 2.02. Loans and Borrowings. 
 (a) Obligations of Lenders. Each Loan shall be made as
part of a Borrowing consisting of Loans of the same Type made by the Lenders ratably in accordance with their respective Commitments. The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its
obligations hereunder; provided that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lender’s failure to make Loans as required. 
 (b) Type of Loans. Subject to Section 2.12, each Loan shall be constituted entirely of ABR Loans or of
Eurodollar Loans as the Borrower may request in accordance herewith; provided that, Daily Floating Eurodollar Loans may only be made during the period from and including the Effective Date to the Initial Commitment Increase Effective Date.
Each Lender at its option may make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of the Borrower to repay
such Loan in accordance with the terms of this Agreement. 
 (c) Minimum Amounts; Limitation on Number of Borrowings.
Each Eurodollar Borrowing shall be in an aggregate amount of $5,000,000 or a larger multiple of $1,000,000. Each ABR Borrowing shall be in an aggregate amount equal to $5,000,000 or a larger multiple of $1,000,000; provided that an
ABR Borrowing may be in an aggregate amount that is equal to the entire unused balance of the aggregate Commitments. Borrowings of more than one Type may be outstanding at the same time; provided that there shall not at any time be more
than a total of fifteen (15) Eurodollar Borrowings outstanding. 
 (d) Limitations on Interest Periods.
Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request Eurodollar Borrowings (or to elect to convert to, or continue as, a Eurodollar Borrowing) prior to the Maturity Date if the Interest Period
requested therefor would end after the Maturity Date; provided further that Borrower shall not be entitled to request Daily Floating Eurodollar Borrowings on and after the Initial Commitment Increase Effective Date. 
 SECTION 2.03. Requests for Borrowings. 
 (a) Notice by the Borrower. To request a Borrowing, the Borrower shall notify the Administrative Agent of such request by telephone (i) in the case of a Eurodollar Borrowing (other than a Daily Floating
Eurodollar Borrowing), not later than 10:00 a.m., Dallas, Texas time, three Business Days before the date of the proposed Borrowing or (ii) in the case of an ABR Borrowing or a Daily Floating Eurodollar Borrowing, not later than
10:00 a.m., Dallas, Texas time, one Business Day before the date of the proposed Borrowing. Each such telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of
a written Borrowing Request in a form approved by the Administrative Agent and signed by the Borrower. 
 (b) Content of
Borrowing Requests. Each telephonic and written Borrowing Request shall specify the following information in compliance with Section 2.02: 
 (i) the aggregate amount of the requested Borrowing; 
  

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 (ii) the date of such Borrowing, which shall be a Business Day; 
 (iii) whether such Borrowing is to be an ABR Borrowing, a Daily Floating Eurodollar Borrowing, or a Eurodollar Borrowing (other than
a Daily Floating Eurodollar Borrowing; 
 (iv) in the case of a Eurodollar Borrowing (other than a Daily Floating Eurodollar
Borrowing), the Interest Period therefor, which shall be a period contemplated by the definition of the term “Interest Period” and permitted under Section 2.02(d); and 
 (v) the location and number of the Borrower’s account to which funds are to be disbursed, which shall comply with the requirements of
Section 2.04. 
 (c) Notice by the Administrative Agent to the Lenders. Promptly following
receipt of a Borrowing Request in accordance with this Section, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing. 
 (d) Failure to Elect. If no election as to the Type of a Borrowing is specified, then the requested Borrowing shall be an
ABR Borrowing. If no Interest Period is specified with respect to any requested Eurodollar Borrowing (other than a Daily Floating Eurodollar Borrowing), then the requested Borrowing shall be made instead as an ABR Borrowing. 
 SECTION 2.04. Funding of Borrowings. 
 (a) Funding by Lenders. Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 11:00 a.m., Dallas, Texas time, to the
account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders. The Administrative Agent will make such Loans available to the Borrower by promptly crediting the amounts so received, in like funds, to an
account of the Borrower maintained with the Administrative Agent and designated by the Borrower in the applicable Borrowing Request. 
 (b) Presumption by the Administrative Agent. Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent
such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section and may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at
(i) in the case of such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation or (ii) in the case of the Borrower, the
interest rate applicable to ABR Loans. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing. 
  

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 SECTION 2.05. Interest Elections. 
 (a) Elections by the Borrower for Borrowings. The Loans constituting each Borrowing initially shall be of the Type specified in the
applicable Borrowing Request and, in the case of a Eurodollar Borrowing (other than a Daily Floating Eurodollar Borrowing), shall have the Interest Period specified in such Borrowing Request. Thereafter, the Borrower may elect to convert such
Borrowing to a Borrowing of a different Type or to continue such Borrowing as a Borrowing of the same Type and, in the case of a Eurodollar Borrowing (other than a Daily Floating Eurodollar Borrowing), may elect the Interest Period therefor, all as
provided in this Section; provided that, conversions to Daily Floating Eurodollar Loans may only be made during the period from the Effective Date to the Initial Commitment Increase Effective Date. The Borrower may elect different options
with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans constituting such Borrowing, and the Loans constituting each such portion shall be
considered a separate Borrowing. 
 (b) Notice of Elections. To make an election pursuant to this Section, the Borrower
shall notify the Administrative Agent of such election by telephone by the time that a Borrowing Request would be required under Section 2.03 if the Borrower were requesting a Borrowing of the Type resulting from such election to
be made on the effective date of such election. Each such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Interest Election Request in a
form approved by the Administrative Agent and signed by the Borrower. 
 (c) Content of Interest Election Requests.
Each telephonic and written Interest Election Request shall specify the following information in compliance with Section 2.02: 
 (i) the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting
Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) of this paragraph shall be specified for each resulting Borrowing); 
 (ii) the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day; 
 (iii) whether the resulting Borrowing is to be an ABR Borrowing, a Daily Floating Eurodollar Borrowing, or other Type of Eurodollar
Borrowing; (it being understood, that Daily Floating Eurodollar Borrowings are only available during the period from and including the Effective Date to the Initial Commitment Increase Date); and 
 (iv) if the resulting Borrowing is a Eurodollar Borrowing (other than Daily Floating Eurodollar Borrowing), the Interest Period therefor
after giving effect to such election, which shall be a period contemplated by the definition of the term “Interest Period” and permitted under Section 2.02(d). 
 (d) Notice by the Administrative Agent to the Lenders. Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing. 
  

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 (e) Failure to Elect; Events of Default. If the Borrower fails to deliver a timely
and complete Interest Election Request with respect to a Eurodollar Borrowing (other than a Daily Floating Eurodollar Borrowing) prior to the end of the Interest Period therefor, then, unless such Eurodollar Borrowing is repaid as provided herein at
the end of the applicable Interest Period, then such Eurodollar Borrowing shall be converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and the Administrative Agent,
at the request of the Required Lenders, so notifies the Borrower, then, so long as an Event of Default is continuing (i) no outstanding Borrowing may be converted to or continued as a Eurodollar Borrowing, (ii) unless repaid, each
Eurodollar Borrowing (other than a Daily Floating Eurodollar Borrowing) shall be converted to an ABR Borrowing at the end of the Interest Period therefor; and (iii) each Daily Floating Eurodollar Borrowing shall be converted to an ABR
Borrowing. 
 SECTION 2.06. Increase of the Commitments. 
 (a) Initial Increase of Commitments. On any date after the Effective Date but on or prior to October 31, 2006, the total
aggregate Commitments may be increased by an amount which, when aggregated on the Initial Commitment Increase Effective Date with the then-existing Commitments and the then-existing Funded Amount, would not exceed $200,000,000 (or such greater or
lesser amount as Borrower and the Administrative Agent may mutually agree, but in no event greater than $250,000,000) (the “Initial Commitment Increase”), which Initial Commitment Increase shall become effective on the date
(the “Initial Commitment Increase Effective Date”) that each of the following terms and conditions have been satisfied (or waived by the Administrative Agent and each party to the Initial Commitment Increase Amendment):

 (i) One or more financial institutions and/or Funds (acceptable to the Borrower, the Administrative Agent, and the
Arranger) have committed to lend amounts equal to the Initial Commitment Increase pursuant to this Agreement; the Administrative Agent and the Borrower shall determine the final allocation of such Initial Commitment Increase among such institutions;

 (ii) No Default exists or arises after giving effect to the Initial Commitment Increase; and 
 (iii) The Borrower, the Administrative Agent, any Lender who has agreed to increase its Commitment, and each financial institution or Fund
that has agreed to provide all or a portion of the Initial Commitment Increase shall execute and deliver an amendment and joinder agreement in form and upon terms acceptable to the Administrative Agent and the Borrower (the “Initial
Commitment Increase Amendment”), and the Borrower shall have satisfied each of the conditions precedent set forth therein, including without limitation: 
 (A) Payment of all fees required thereby or in connection therewith, including, without limitation, reimbursement of the reasonable fees
and expenses incurred by the Administrative Agent and its counsel in connection with the Initial Commitment Increase; 
 (B)
Delivery to the Administrative Agent of a certificate dated as of the Initial Commitment Increase Effective Date signed by the President, a Vice President, or a Financial Officer of the Borrower (i) certifying and attaching the resolutions
adopted by the Borrower approving or consenting to the Initial Commitment Increase; and 

  

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(ii) certifying that, immediately before and after giving effect to such Initial Commitment Increase, (x) the representations and warranties
contained in Article III and the other Loan Documents are true and correct, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such
earlier date, and (y) no Default exists or arises after giving effect to the Initial Commitment Increase or any Borrowings thereof on the Initial Commitment Increase Effective Date; 
 (C) A compliance certificate signed by a Financial Officer of the Borrower confirming compliance with Section 6.06 as
of the Initial Commitment Increase Effective Date and, on a pro forma basis, after giving effect to Borrowings of the available Commitment as so increased; 
 (D) A favorable written opinion (addressed to the Administrative Agent and the Lenders and dated the Initial Commitment Increase
Effective Date) of Cox, Smith, Mathews Incorporated, counsel for the Borrower, or such other legal counsel to the Borrower reasonably acceptable to the Administrative Agent. with respect to matters relating to the Borrower, and the Initial
Commitment Increase Agreement, as the Administrative Agent shall reasonably request (and the Borrower hereby instructs such counsel to deliver such opinion to the Lenders and the Administrative Agent), which opinion shall be in form and upon terms
reasonably acceptable to the Administrative Agent and its counsel; and 
 (E) Such other documents as the Administrative
Agent or its special counsel may reasonably request. 
 (b) Additional Increases of Commitments. After the Initial
Commitment Increase Effective Date and prior to the Commitment Termination Date if no Default then exists, the Borrower may from time to time notify the Administrative Agent (which shall promptly notify the Lenders) of the Borrower’s request to
increase the Commitments by an amount which, when aggregated on the respective Additional Commitment Increase Effective Date with the then-existing Commitments and the then-existing Funded Amount, would not exceed $250,000,000 (each an
“Additional Commitment Increase”); provided that (i) any such request for an increase shall be in a minimum amount of $20,000,000, and (ii) the Borrower may not make more than two such requests. At the time
of sending such notice, the Borrower (in consultation with the Administrative Agent) shall specify the time period within which each Lender is requested to respond (which shall in no event be less than ten Business Days from the date of delivery of
such notice to the Lenders). 
 (i) Each Lender shall notify the Administrative Agent within such time period whether or not
it agrees to increase its Commitment and, if so, whether by an amount equal to, greater than, or less than its ratable portion (based on such Lender’s Applicable Percentage) of such requested increase. Any Lender not responding within such time
period shall be deemed to have declined to increase its Commitment. To achieve the full amount of a requested increase, and subject to the approval of the Administrative Agent (which approval shall not be unreasonably withheld), the Borrower may
also invite additional financial institutions and/or Funds to become Lenders under this Agreement. 
 (ii) The Borrower, the
Administrative Agent, any Lender who has agreed to increase its Commitment, and each financial institution or Fund that has agreed to 

  

 17 

 
provide all or a portion of an Additional Commitment Increase shall execute and deliver an amendment and joinder agreement in form and upon terms acceptable
to the Administrative Agent and the Borrower (each an “Additional Commitment Increase Amendment”), and the Borrower shall have satisfied each of the conditions precedent set forth therein, including without limitation:

 (A) Payment of all reasonable fees required thereby or in connection therewith, including, without limitation,
reimbursement of the fees and expenses incurred by the Administrative Agent and its counsel in connection with the Additional Commitment Increase; 
 (B) Delivery to the Administrative Agent of a certificate dated as of the Additional Commitment Increase Effective Date signed by the President, a Vice President, or a Financial Officer of the Borrower
(i) certifying and attaching the resolutions adopted by the Borrower approving or consenting to the Additional Commitment Increase; and (ii) certifying that, before and after giving effect to such Additional Commitment Increase,
(x) the representations and warranties contained in Article III and the other Loan Documents are true and correct on and as of the Additional Commitment Increase Effective Date, except to the extent that such representations
and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date, and (y) no Default exists or arises after giving effect to such Additional Commitment Increase or any Borrowings thereof on
the applicable Additional Commitment Increase Effective Date; 
 (C) A compliance certificate signed by a Financial Officer
of the Borrower confirming compliance with Section 6.06 as of such Additional Commitment Effective Date and, on a pro forma basis, after giving effect to Borrowings of the available Commitment as so increased; 
 (D) A favorable written opinion (addressed to the Administrative Agent and the Lenders and dated as of such Additional Commitment
Increase Effective Date) of Cox, Smith, Mathews Incorporated, counsel for the Borrower, or such other legal counsel to the Borrower, reasonably acceptable to the Administrative Agent, with respect to matters relating to the Borrower, and the
Additional Commitment Increase Agreement, as the Administrative Agent shall reasonably request (and the Borrower hereby instructs such counsel to deliver such opinion to the Lenders and the Administrative Agent), which opinion shall be in form and
upon terms reasonably acceptable to the Administrative Agent and its counsel; 
 (E) No Default then exists or arises after
giving effect to such Additional Commitment Increase; and 
 (F) Such other documents as the Administrative Agent or its
special counsel may reasonably request. 
 (iii) If the Commitments are increased in accordance with this
Section 2.06(b), the Administrative Agent and the Borrower shall determine the effective date (each an “Additional Commitment Increase Effective Date”) and the final allocation of such increase. The
Administrative Agent shall promptly notify the Borrower and the Lenders of the final allocation of such increase and the Additional Commitment Increase Effective Date. 
  

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 (c) No Lender is obligated to increase its Commitment under any circumstances, and no
Lender’s Commitment may be increased except by its execution of an amendment to this Agreement in accordance with this Section 2.06. On the Initial Commitment Increase Effective Date, each financial institution or Fund
executing the Initial Commitment Increase Amendment shall be a “Lender” hereunder, and on each Additional Commitment Increase Effective Date, each financial institution or Fund executing an Additional Commitment Increase Amendment
shall be a “Lender” hereunder, in each case entitled to the rights and benefits, and subject to the duties, of a Lender under the Loan Documents. In each case, each Lender’s Applicable Percentage shall be recalculated to
reflect the new proportionate share of the revised total Commitments. In order to give effect to the Initial Commitment Increase and any Additional Commitment Increase and the related ratable allocation of the Credit Exposure and Commitments in
accordance with the adjusted Applicable Percentages of the Lenders, the Borrower shall prepay any Loans outstanding on the Initial Commitment Increase Effective Date and on each Additional Commitment Increase Effective Date and immediately reborrow
such Loans from the Lenders in accordance with such Lenders’ adjusted Applicable Percentages; provided that if any such prepayment of a Eurodollar Loan (other than a Daily Floating Eurodollar Loan) is made prior to the last day of its
applicable Interest Period, the Borrower shall also pay any additional amounts required pursuant to Section 2.14. All Loans made during the Availability Period after any Commitment increase effected pursuant to
Section 2.06(a) or (b) shall be funded in accordance with the Lenders’ Applicable Percentages as adjusted to reflect any such Commitment increase. 
 (d) Conflicting Provisions. This Section shall supersede any provisions in Section 2.16 or 9.02 to
the contrary. 
 SECTION 2.07. Termination and Reduction of the Commitments. 
 (a) Scheduled Termination. The Commitments shall automatically and permanently reduce to zero at the close of business on the
Commitment Termination Date. 
 (b) Voluntary Termination or Reduction. The Borrower may at any time terminate, or from
time to time reduce, the Commitments; provided that each reduction of the Commitments shall be in an amount that is $10,000,000 or a larger multiple of $5,000,000. 
 (c) Notice of Voluntary Termination or Reduction. The Borrower shall notify the Administrative Agent of any election to terminate
or reduce the Commitments under paragraph (b) of this Section at least three Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof. Promptly following receipt of any
notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each notice delivered by the Borrower pursuant to this Section shall be irrevocable; provided that a notice of termination of the Commitments delivered by the
Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities, in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if
such condition is not satisfied. 
 (d) Effect of Termination or Reduction. Any termination or reduction of the
Commitments shall be permanent. Each reduction of the Commitments shall be made ratably among the Lenders in accordance with their respective Commitments then in effect. 
  

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 SECTION 2.08. Repayment of Loans; Evidence of Debt. 
 (a) Repayment. The Borrower shall repay the principal of the Loans outstanding on the last day of the Availability Period (the
“Drawn Amount”) in 15 quarterly installments, commencing on the last Business Day of the three full-calendar month period immediately following the Commitment Termination Date and continuing on the last Business Day of each
three-calendar month period thereafter, with the remaining unpaid Drawn Amount being paid in full on the Maturity Date. The principal amount of each quarterly installment shall be calculated as a percentage of the Drawn Amount as set forth below.

  

			
	 Quarterly Installments
	  	Percentage of Drawn Amount
	 1 - 8
	  	2.50%/each
	 9 - 12
	  	3.75%/each
	 13 - 15
	  	5.00%/each
	 Maturity Date
	  	Remaining Principal Balance

 In the event that the Initial Commitment Increase is not made available to the Borrower on or prior
to October 31, 2006, then, notwithstanding the foregoing, the Borrower shall repay in full all principal amounts outstanding under the Loan Documents, together with all accrued and unpaid interest and fees and other amounts owed to the Lenders
or the Administrative Agent under the Loan Documents, on the 90th day after the Effective Date. 
 (b) Manner of
Payment. Prior to any repayment or prepayment of any Borrowings hereunder, the Borrower shall select the Borrowing or Borrowings to be paid and shall notify the Administrative Agent by telephone (confirmed by telecopy) of such selection not
later than 10:00 a.m., Dallas, Texas time, three Business Days before the scheduled date of such repayment; provided that each repayment of Borrowings shall be applied to repay any outstanding ABR Borrowings and Daily Floating
Eurodollar Borrowings before any other Borrowings. If the Borrower fails to make a timely selection of the Borrowing or Borrowings to be repaid or prepaid, such payment shall be applied, first, to pay any outstanding ABR Borrowings and
Daily Floating Rate Borrowings; second, to other Borrowings in the order of the remaining duration of their respective Interest Periods (the Borrowing with the shortest remaining Interest Period to be repaid first). Each payment of a
Borrowing shall be applied ratably to the Loans included in such Borrowing. 
 (c) Maintenance of Records by Lenders.
Each Lender shall maintain in accordance with its usual practice records evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to
such Lender from time to time hereunder. 
 (d) Maintenance of Records by the Administrative Agent. The Administrative
Agent shall maintain records in which it shall record (i) the amount of each Loan made hereunder, the Type thereof and each Interest Period therefor, (ii) the amount of any principal or interest due and payable or to become due and payable
from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for account of the Lenders and each Lender’s share thereof. 
 (e) Effect of Entries. The entries made in the records maintained pursuant to paragraph (c) or (d) of this Section shall
be prima facie evidence of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or the Administrative 

  

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Agent to maintain such records or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans in accordance with the
terms of this Agreement. 
 (f) Promissory Notes. Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in a form approved
by the Administrative Agent. Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 9.04) be represented by one or more promissory notes in
such form payable to the order of the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns). 
 SECTION 2.09. Prepayment of Loans. 
 (a) Right to Prepay Borrowings. The
Borrower shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, subject to the requirements of this Section. 
 (b) Notices, Etc. The Borrower shall notify the Administrative Agent by telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of prepayment of a Eurodollar Borrowing (other than a
Daily Floating Eurodollar Loan, not later than 10:00 a.m., Dallas, Texas time, three Business Days before the date of prepayment, or (ii) in the case of prepayment of an ABR Borrowing or a Daily Floating Eurodollar Borrowing, not
later than 10:00 a.m., Dallas, Texas time, one Business Day before the date of prepayment. Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Borrowing or portion thereof to be prepaid;
provided that, if a notice of prepayment is given in connection with a conditional notice of termination of the Commitments as contemplated by Section 2.07(c), then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.07(c). Promptly following receipt of any such notice relating to a Borrowing, the Administrative Agent shall advise the relevant Lenders of the contents thereof. Each partial
prepayment of any Borrowing shall be in an amount that would be permitted in the case of a Borrowing of the same Type as provided in Section 2.02. Each prepayment of a Borrowing shall be applied ratably to the Loans included in
the prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the extent required by Section 2.11 and shall be made in the manner specified in Section 2.08(b). 
 SECTION 2.10. Fees. 
 (a) Facility Fee. The Borrower agrees to pay to the Administrative Agent for account of each Lender a facility fee, which shall accrue at the Applicable Rate for Facility Fees on (i) during the Availability Period, the
sum of (A) the actual daily amount of the Commitment of such Lender during the period from and including the Effective Date to the Commitment Termination Date and (B) the actual daily amount of such Lender’s Credit Exposure and
(ii) thereafter until such Lender has been paid in full, on the actual daily amount of such Lender’s Credit Exposure. Accrued facility fees shall be payable on each Quarterly Date and on the later of the date the Commitments terminate and
the date upon which the Loans of all of the Lenders shall have been paid in full, provided that (i) any facility fees accruing after the Maturity Date shall be payable on demand, and (ii) if any principal of any Loan is not paid
when due, whether at stated maturity, upon acceleration or otherwise, the facility fee in respect of such principal shall be payable on demand. All facility fees shall be computed on the basis of a year of 360 days and 

  

 21 

 
shall be payable for the actual number of days elapsed (including the first day but excluding the last day). 
 (b) Administrative Agent Fees. The Borrower agrees to pay to the Administrative Agent, for its own account, fees payable in the
amounts and at the times separately agreed upon between the Borrower and the Administrative Agent. 
 (c) Payment of
Fees. All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent for distribution, in the case of facility fees, participation fees and fronting fees, to the Lenders entitled thereto.
Fees paid shall not be refundable under any circumstances. 
 SECTION 2.11. Interest. 
 (a) ABR Loans. The Loans constituting each ABR Borrowing shall bear interest at a rate per annum equal to the Alternate
Base Rate plus the Applicable Rate. 
 (b) Eurodollar Loans. The Loans constituting each Eurodollar Borrowing
shall bear interest at a rate per annum equal to (i) in the case of Daily Floating Eurodollar Borrowing, the Daily Floating Eurodollar Rate plus the Applicable Rate for Eurodollar Loans, or (ii) in the case of all other Eurodollar
Borrowings, the Adjusted LIBO Rate for the Interest Period for such Borrowing plus the Applicable Rate. 
 (c)
Default Interest. Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the rate otherwise applicable to such Loan as provided above or (ii) in the
case of any other amount, 2% plus the rate applicable to ABR Loans as provided in paragraph (a) of this Section. 
 (d) Payment of Interest. Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan and on the Maturity Date; provided that (i) interest accrued pursuant to paragraph (c) of
this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the
event of any conversion of any Eurodollar Borrowing (other than a Daily Floating Eurodollar Borrowing) prior to the end of the Interest Period therefor, accrued interest on such Borrowing shall be payable on the effective date of such conversion.

 (e) Computation. All interest hereunder shall be computed on the basis of a year of 360 days, except that interest
computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual
number of days elapsed (including the first day but excluding the last day). The applicable Alternate Base Rate the Adjusted LIBO Rate, and the Daily Floating Eurodollar Rate shall be determined by the Administrative Agent, and such determination
shall be conclusive absent manifest error. 
  

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 SECTION 2.12. Alternate Rate of Interest. If either prior to the commencement of the
Interest Period for any Eurodollar Borrowing (other than a Daily Floating Rate Borrowing) or the date of any Daily Floating Rate Borrowing: 
 (a) the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate for such Interest Period;
or 
 (b) the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO Rate for such Interest Period
will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their respective Loans (or its Loan) included in such Borrowing for such Interest Period; 
 then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone or telecopy as promptly as practicable thereafter and, until the
Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any Borrowing to, or the continuation of any
Borrowing as, a Eurodollar Borrowing shall be ineffective and such Borrowing (unless prepaid) shall be continued as, or converted to, an ABR Borrowing and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall
be made as an ABR Borrowing. 
 SECTION 2.13. Increased Costs. 
 (a) Increased Costs Generally. If any Change in Law shall: 
 (i) impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for account
of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate); or 
 (ii)
impose on any Lender or the London interbank market any other condition affecting this Agreement or Eurodollar Loans made by such Lender or participation therein; 
 and the result of any of the foregoing shall be to increase the cost to such Lenders of making or maintaining any Eurodollar Loan (or of maintaining its obligation to make any such Loan) or to increase the cost to
such Lender or to reduce the amount of any sum received or receivable by such Lender hereunder (whether of principal, interest or otherwise), then the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender
for such additional costs incurred or reduction suffered. 
 (b) Capital Requirements. If any Lender determines that
any Change in Law regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement or the
Loans made by such Lender to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s
holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered.

  

 23 

 (c) Certificates from Lenders. A certificate of a Lender setting forth the amount
or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section, shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower
shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof. 
 (d) Delay in
Requests. Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such compensation; provided that (i) the Borrower shall not be
required to compensate a Lender pursuant to this Section for any increased costs or reductions incurred more than six months prior to the date that such Lender notifies the Borrower of the Change in Law giving rise to such increased costs or
reductions and of such Lender’s intention to claim compensation therefor; and (ii) if the Change in Law giving rise to such increased costs or reductions is retroactive, then the six-month period referred to above shall be extended to
include the period of retroactive effect thereof. 
 SECTION 2.14. Break Funding Payments. In the event of (a) the payment
of any principal of any Eurodollar Loan (except a Daily Floating Eurodollar Loan) other than on the last day of an Interest Period therefor (including as a result of an Event of Default), (b) the conversion of any Eurodollar Loan (except a
Daily Floating Eurodollar Loan) other than on the last day of an Interest Period therefor, (c) the failure to borrow, convert, continue or prepay any Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such
notice is permitted to be revocable under Section 2.09(b) and is revoked in accordance herewith), or (d) the assignment as a result of a request by the Borrower pursuant to Section 2.17 of any Eurodollar
Loan (except a Daily Floating Eurodollar Loan) other than on the last day of an Interest Period therefor, then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event. In the case of a
Eurodollar Loan (other than a Daily Floating Eurodollar Loan), the loss to any Lender attributable to any such event shall be deemed to include an amount determined by such Lender to be equal to the excess, if any, of (i) the amount of interest
that such Lender would pay for a deposit equal to the principal amount of such Loan for the period from the date of such payment, conversion, failure or assignment to the last day of the then current Interest Period for such Loan (or, in the case of
a failure to borrow, convert or continue, the duration of the Interest Period that would have resulted from such borrowing, conversion or continuation) if the interest rate payable on such deposit were equal to the Adjusted LIBO Rate for such
Interest Period, over (ii) the amount of interest that such Lender would earn on such principal amount for such period if such Lender were to invest such principal amount for such period at the interest rate that would be bid by such
Lender (or an affiliate of such Lender) for Dollar deposits from other banks in the eurodollar market at the commencement of such period. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive
pursuant to this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof. 
 SECTION 2.15. Taxes. 
 (a) Payments Free of Taxes. Any and all payments by or on account of any obligation of the Borrower hereunder or under any other Loan Document shall be made free and clear of and without deduction for any Indemnified Taxes or Other
Taxes; provided that if the Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section) the Administrative Agent or Lender (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall
make such 

  

 24 

 
deductions and (iii) the Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

 (b) Payment of Other Taxes by the Borrower. In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law. 
 (c) Indemnification by the Borrower. The Borrower shall
indemnify the Administrative Agent and each Lender within 10 days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent or such Lender on or with respect to any payment by or on
account of any obligation of the Borrower hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) and any penalties, interest and reasonable expenses arising therefrom or
with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by
a Lender or by the Administrative Agent on its own behalf or on behalf of a Lender shall be conclusive absent manifest error. 
 (d) Evidence of Payments. As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent. 
 (e) Foreign Lenders. Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the
jurisdiction in which the Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law or reasonably requested by the Borrower, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate. 
 SECTION 2.16. Payments Generally; Pro Rata Treatment; Sharing of Set-offs. 
 (a) Payments by the Borrower. The Borrower shall make each payment required to be made by it hereunder (whether of principal,
interest, fees or amounts payable under Section 2.13, 2.14 or 2.15, or otherwise) prior to 11:00 a.m., Dallas, Texas time, on the date when due, in immediately available funds, without set-off or
counterclaim. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at 201 3rd Street, 8th Floor, San Francisco, California 94596, except payments pursuant to Sections 2.13, 2.14, 2.15 and
9.03, which shall be made directly to the Persons entitled thereto. The Administrative Agent shall distribute any such payments received by it for account of any other Person to the appropriate recipient promptly following receipt
thereof. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day and, in the case of any payment accruing interest, interest thereon shall be payable for
the period of such extension. All payments hereunder shall be made in Dollars. 
 (b) Application of Insufficient
Payments. If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, 

  

 25 

 
interest and fees then due hereunder, such funds shall be applied (i) first, to pay interest and fees then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of interest and fees then due to such parties; and (ii) second, to pay principal then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal then due
to such party. 
 (c) Pro Rata Treatment. Except to the extent otherwise provided herein: (i) each Borrowing shall
be made from the Lenders, and each termination or reduction of the amount of the Commitments under Section 2.07 shall be applied to the respective Commitments of the Lenders, pro rata according to the amounts of their respective
Commitments then in effect; (ii) each payment of facility fees under Section 2.10 shall be made for the account of the Lenders pro rata in accordance with the amount of facility fees then due and payable to the respective
Lenders; (iii) each Borrowing shall be allocated pro rata among the Lenders according to the amounts of their respective Commitments then in effect (in the case of the making of Loans) or their respective Loans that are to be included in such
Borrowing (in the case of conversions and continuations of Loans); (iv) each payment or prepayment of principal of Loans by the Borrower shall be made for account of the Lenders pro rata in accordance with the respective Credit Exposure held by
them; and (v) each payment of interest on Loans by the Borrower shall be made for account of the Lenders pro rata in accordance with the amounts of interest on such Loans then due and payable to the respective Lenders. 
 (d) Sharing of Payments by Lenders. If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain
payment in respect of any principal of or interest on any of its Loans resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans and accrued interest thereon then due than the proportion received by any
other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders
ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrower
pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or participant, other than to the
Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply). The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such
participation. 
 (e) Presumptions of Payment. Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Administrative Agent for account of the Lenders hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such
date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such Lender for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the

  

 26 

 
Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

 (f) Certain Deductions by the Administrative Agent. If any Lender shall fail to make any payment required to be made
by it pursuant to Section 2.04(b) or 2.16(e), then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent
for account of such Lender to satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid. 
 SECTION 2.17. Mitigation Obligations; Replacement of Lenders. 
 (a) Designation of a Different
Lending Office. If any Lender requests compensation under Section 2.13, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for account of any Lender pursuant to
Section 2.15, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches
or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.13 or 2.15, as the case may be, in the future and
(ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any
such designation or assignment. 
 (b) Replacement of Lenders. If any Lender requests compensation under
Section 2.13, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for account of any Lender pursuant to Section 2.15, or if any Lender defaults in its
obligation to fund Loans hereunder, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in Section 9.04), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment);
provided that (i) the Borrower shall have received the prior written consent of the Administrative Agent, which consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of
all other amounts) and (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.13 or payments required to be made pursuant to Section 2.15, such assignment will
result in a reduction in such compensation or payments. A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to
require such assignment and delegation cease to apply. 
  

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 ARTICLE III 
 REPRESENTATIONS AND WARRANTIES 
 The Borrower represents and warrants to the Lenders that:

 SECTION 3.01. Organization; Powers. Each of the Borrower and its Subsidiaries is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, has all requisite power and authority to carry on its business as now conducted and, except where the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required. 
 SECTION 3.02. Authorization; Enforceability. The Transactions are within the Borrower’s corporate powers and have been duly authorized by all necessary corporate and, if required, by all necessary
shareholder action. This Agreement has been duly executed and delivered by the Borrower and constitutes, and each of the other Loan Documents when executed and delivered will constitute, a legal, valid and binding obligation of the Borrower,
enforceable in accordance with its terms, except as such enforceability may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or similar laws of general applicability affecting the enforcement of creditors’ rights and
(b) the application of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 
 SECTION 3.03. Governmental Approvals; No Conflicts. The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority,
except (i) such as have been obtained or made and are in full force and effect, (ii) as may be required to be filed with the Securities & Exchange Commission after the date hereof, (b) will not violate any applicable law or
regulation or the charter, by-laws or other organizational documents of the Borrower or any of its Subsidiaries or any order of any Governmental Authority, (c) will not violate or result in a default under any indenture, agreement or other
instrument binding upon the Borrower or any of its Subsidiaries or assets, or give rise to a right thereunder to require any payment to be made by any such Person, and (d) will not result in the creation or imposition of any Lien on any asset
of the Borrower or any of its Subsidiaries. 
 SECTION 3.04. Financial Condition; No Material Adverse Change. 
 (a) Financial Condition. The Borrower has heretofore furnished to the Lenders (i) its consolidated balance sheet and
statements of income, stockholders’ equity and cash flows as of and for the fiscal year ended December 31, 2005, reported on by KPMG LLP, independent public accountants and (ii) its consolidated balance sheet and statements of income,
stockholders’ equity and cash flows as of and for the fiscal quarter and the portion of the fiscal year ended June 30, 2006, certified by the chief financial officer of the Borrower. Such financial statements present fairly, in all
material respects, the actual or pro forma, as the case may be, financial position and results of operations and cash flows of the Borrower and its Subsidiaries as of such dates and for such periods in accordance with GAAP, subject to year-end audit
adjustments and the absence of footnotes in the case of the statements referred to in clause (ii) of the first sentence of this paragraph. None of the Borrower nor any of its Subsidiaries has on the date hereof any material
contingent liabilities, liabilities for taxes, unusual forward or long-term commitments or unrealized or anticipated losses from any unfavorable commitments, except as referred to or reflected or provided for in said balance sheet as at
June 30, 2006. 
  

 28 

 (b) No Material Adverse Change. Since December 31, 2005, there has been no
material adverse change in the business, assets, properties, operations, prospects or condition, financial or otherwise, of the Borrower and its Subsidiaries, taken as a whole. 
 SECTION 3.05. Properties. 
 (a) Property Generally. Each of the Borrower and its Subsidiaries has good title to, or valid leasehold interests in, all its real and personal property material to their businesses, taken as a whole, subject
only to Liens permitted by Section 6.01 and except for minor defects in title that do not interfere with its ability to conduct such businesses as currently conducted or to utilize such properties for their intended purposes.

 (b) Intellectual Property. Each of the Borrower and its Subsidiaries owns, or is licensed to use, all trademarks,
tradenames, copyrights, patents and other intellectual property material to their businesses, taken as a whole, and the use thereof by the Borrower and its Subsidiaries does not infringe upon the rights of any other Person, except for any such
infringements that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. 
 SECTION
3.06. Litigation and Environmental Matters. 
 (a) Actions, Suits and Proceedings. There are no actions,
suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of the Borrower, threatened against or affecting the Borrower or any of its Subsidiaries (i) could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect (other than the Disclosed Matters) or (ii) that involve this Agreement or the Transactions. 
 (b) Environmental Matters. Except for the Disclosed Matters and except with respect to any other matters that, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse Effect, neither the Borrower nor any of its Subsidiaries (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit,
license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received notice of any claim with respect to any Environmental Liability or (iv) knows of any basis for
any Environmental Liability. 
 (c) Disclosed Matters. Since the date of this Agreement, there has been no change in
the status of the Disclosed Matters that, individually or in the aggregate, has resulted in, or could reasonably be expected to result in, a Material Adverse Effect. 
 SECTION 3.07. Compliance with Laws and Agreements. Each of the Borrower and its Subsidiaries is in compliance with all laws, regulations and orders of any Governmental Authority applicable to it or its
property and all indentures, agreements and other instruments binding upon it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. No Default
has occurred and is continuing. 
 SECTION 3.08. Investment and Holding Company Status. Neither the Borrower nor any of its
Subsidiaries is (a) an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940 or (b) a “holding company” as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935. 
  

 29 

 SECTION 3.09. Taxes. Each of the Borrower and its Subsidiaries has timely filed or caused
to be filed all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate proceedings and for which
such Person has set aside on its books adequate reserves or (b) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect. 
 SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA
Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect. 
 SECTION 3.11. Disclosure. The Borrower has disclosed to the Lenders all agreements, instruments and corporate or other restrictions to which it or any of its Subsidiaries is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. None of the reports, financial statements, certificates or other information furnished by or on behalf of the Borrower to the Administrative Agent
or any Lender in connection with the negotiation of this Agreement or delivered hereunder (as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they were made, not misleading. 
 SECTION 3.12. Use of
Credit. The proceeds of the Loans will be used (a) to pay the fees and expenses incurred by the Borrower in connection with the Transactions, and (b) for general corporate purposes of the Borrower, including, without limitation,
acquisitions and repurchases of shares of its stock. Neither the Borrower nor any of its Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose, whether immediate, incidental
or ultimate, of buying or carrying Margin Stock, and after applying the proceeds of any extension of credit hereunder, not more than 25% of the fair market value of the assets of the Borrower and its Subsidiaries consists of Margin Stock.

 SECTION 3.13. Certain Agreements and Liens. 
 (a) Certain Agreements. Part A of Schedule II is a complete and correct list of each credit
agreement, loan agreement, indenture, purchase agreement, guarantee, letter of credit or other arrangement providing for or otherwise relating to any Indebtedness or any extension of credit (or commitment for any extension of credit) to, or
guarantee by, the Borrower or any of its Subsidiaries outstanding on the date hereof the aggregate principal or face amount of each of which equals or exceeds (or may equal or exceed) $10,000,000, and the aggregate principal or face amount
outstanding or that may become outstanding under each such arrangement is correctly described in Part A of Schedule II. 
 (b) Liens. Part B of Schedule II is a complete and correct list of each Lien securing
Indebtedness of any Person outstanding on the date hereof the aggregate principal or face amount of which equals or exceeds (or may equal or exceed) $10,000,000 and covering any property of the Borrower or any of its Subsidiaries, and the aggregate
Indebtedness secured (or that may be secured) by each such Lien and the property covered by each such Lien is correctly described in Part B of Schedule II. 
 SECTION 3.14. Subsidiaries. Set forth in Schedule V is a complete and correct list of all of the Subsidiaries of the
Borrower as of the date hereof, together with, for each such Subsidiary, (i) the jurisdiction of organization of such Subsidiary, (ii) each Person holding ownership interests in such Subsidiary and (iii) the nature of the ownership
interests held by each such Person and the percentage of 

  

 30 

 
ownership of such Subsidiary represented by such ownership interests. Except as disclosed in Schedule V, on the date hereof, (x) each
of the Borrower and its Subsidiaries owns, free and clear of Liens, and has the unencumbered right to vote, all outstanding ownership interests in each Person shown to be held by it in Schedule V, (y) all of the issued and
outstanding capital stock of each such Person organized as a corporation is validly issued, fully paid and nonassessable and (z) there are no outstanding Equity Rights with respect to such Person. 
 SECTION 3.15. Deferred Compensation and Incentive Plans. The Borrower has heretofore delivered to the Lenders complete and correct copies
of its Deferred Compensation Plan, 2005 Omnibus Incentive Plan and 1998 Director Stock Plan, each as in effect on the date hereof. 
 ARTICLE IV 
 CONDITIONS 
 SECTION 4.01. Effective Date. The obligations of the Lenders to make Loans hereunder shall not become effective until the date on which the Administrative Agent shall have received each of the following
documents, each of which shall be satisfactory to the Administrative Agent (and to the extent specified below, to each Lender) in form and substance (or such condition shall have been waived in accordance with Section 9.02):

 (a) Executed Counterparts. From each party hereto either (i) a counterpart of this Agreement signed on behalf
of such party or (ii) written evidence satisfactory to the Administrative Agent (which may include telecopy transmission of a signed signature page to this Agreement) that such party has signed a counterpart of this Agreement. 
 (b) Opinion of Counsel to the Borrower. A favorable written opinion (addressed to the Administrative Agent and the Lenders and
dated the Effective Date) of Cox, Smith, Mathews Incorporated, counsel for the Borrower, substantially in the form of Exhibit B, and covering such other matters relating to the Borrower, this Agreement or the Transactions as the
Required Lenders shall reasonably request (and the Borrower hereby instructs such counsel to deliver such opinion to the Lenders and the Administrative Agent). 
 (c) Corporate Documents. Such documents and certificates as the Administrative Agent or its counsel may reasonably request relating
to the organization, existence and good standing of the Borrower, the authorization of the Transactions and any other legal matters relating to the Borrower, this Agreement or the Transactions, all in form and substance satisfactory to the
Administrative Agent and its counsel. 
 (d) Officer’s Certificate. A certificate, dated the Effective Date and
signed by the President, a Vice President or a Financial Officer of the Borrower, confirming (i) compliance with the conditions set forth in the lettered clauses of the first sentence of Section 4.02, (ii) that the
Leverage Ratio does not exceed 3.00 to 1 and (iii) that the Interest Coverage Ratio is not less than 2.75 to 1. 
 (e)
Other Documents. Such other documents as the Administrative Agent or any Lender or special counsel to Wells Fargo may reasonably request. 
 The obligation of any Lender to make its initial extension of credit hereunder is also subject to the payment by the Borrower of such fees as the Borrower shall have agreed to pay to any Lender or the Administrative Agent in connection
herewith, including the reasonable fees and expenses of 

  

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Haynes and Boone, LLP, special counsel to Wells Fargo, in connection with the negotiation, preparation, execution and delivery of this Agreement and the
extensions of credit hereunder (to the extent that statements for such fees and expenses have been delivered to the Borrower). 
 The
Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective
unless each of the foregoing conditions is satisfied (or waived pursuant to Section 9.02) on or prior to 2:00 p.m., Dallas, Texas time, on October 31, 2006 (and, in the event such conditions are not so satisfied or
waived, the Commitments shall terminate at such time). 
 SECTION 4.02. Each Credit Event. The obligation of each Lender to
make a Loan on the occasion of any Borrowing is subject to the satisfaction of the following conditions: 
 (a) the
representations and warranties of the Borrower set forth in this Agreement shall be true and correct on and as of the date of such Borrowing or the date of issuance or amendment, as applicable; and 
 (b) at the time of and immediately after giving effect to such Borrowing, no Default shall have occurred and be continuing. 
 Each Borrowing shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the matters specified in the preceding sentence.

 ARTICLE V 
 AFFIRMATIVE COVENANTS 
 Until the Commitments have expired or been terminated and the principal of and interest on each Loan
and all fees payable hereunder shall have been paid in full the Borrower covenants and agrees with the Lenders that: 
 SECTION 5.01.
Financial Statements and Other Information. The Borrower will furnish to the Administrative Agent and each Lender: 
 (a) promptly, but in any event no later than 90 days after the end of each fiscal year of the Borrower, the audited consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows of the Borrower
and its Subsidiaries as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, prepared in accordance with GAAP consistently applied (the “Annual Report”),
all reported on by KPMG LLP or other independent public accountants of recognized national standing (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such
audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied; 
 (b) promptly, but in any event no later than 45 days after the end of each of the first three fiscal
quarters of each fiscal year of the Borrower, the consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows of the Borrower and its Subsidiaries as of the end of and for such fiscal quarter and the
then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or 

  

 32 

 
periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year (the “Quarterly Report”), all certified
by one of its Financial Officers as presenting fairly in all material respects the financial condition and results of operations of the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes; 
 (c) concurrently with any delivery of financial statements
under clause (a) or (b) of this Section, a certificate of the Chief Executive Officer and Chief Financial Officer of the Borrower (i) certifying as to whether a Default has occurred and, if a Default has
occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) setting forth reasonably detailed calculations demonstrating compliance with Section 6.06 and (iii) stating
whether any change in GAAP or in the application thereof has occurred since the date of the audited financial statements referred to in Section 3.04 and, if any such change has occurred, specifying the effect of such change on the
financial statements accompanying such certificate; 
 (d) concurrently with any delivery of financial statements under
clause (a) of this Section, a certificate of the accounting firm that reported on such financial statements stating whether they obtained knowledge during the course of their examination of such financial statements of any Default
(which certificate may be limited to the extent required by accounting rules or guidelines); 
 (e) promptly after the same
become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by the Borrower or any of its Subsidiaries with the Securities and Exchange Commission, or any Governmental Authority succeeding to any
or all of the functions of said Commission, or with any national securities exchange, or distributed by the Borrower to its shareholders generally, as the case may be; and 
 (f) promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of
the Borrower or any of its Subsidiaries, or compliance with the terms of this Agreement and the other Loan Documents, as the Administrative Agent or any Lender may reasonably request. 
 SECTION 5.02. Notices of Material Events. The Borrower will furnish to the Administrative Agent and each Lender prompt written notice of
the following: 
 (a) the occurrence of any Default; 
 (b) the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or
affecting the Borrower or any of its Affiliates that could reasonably be expected to result in a Material Adverse Effect; 
 (c) the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect; 
 (d) the assertion of any environmental matter by any Person against, or with respect to the activities of, the Borrower or any of its
Subsidiaries and any alleged violation of or non-compliance with any Environmental Laws or any permits, licenses or authorizations, other than any environmental matter or alleged violation that (either individually or in the aggregate) could not
reasonably be expected to have a Material Adverse Effect; and 
  

 33 

 (e) any other development that results in, or could reasonably be expected to result in,
a Material Adverse Effect. 
 Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer or other executive officer
of the Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto. 
 SECTION 5.03. Existence; Conduct of Business. The Borrower will, and will cause each of its Subsidiaries to, do or cause to be done all things necessary to preserve, renew and keep in full force and
effect its legal existence and the rights, licenses, permits, privileges and franchises material to the conduct of its business; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted
under Section 6.02. 
 SECTION 5.04. Payment of Obligations. The Borrower will, and will cause each of its
Subsidiaries to, pay its obligations, including Tax liabilities, that, if not paid, could result in a Material Adverse Effect before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being
contested in good faith by appropriate proceedings, (b) the Borrower or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (c) the failure to make payment pending such contest
could not reasonably be expected to result in a Material Adverse Effect. 
 SECTION 5.05. Maintenance of Properties; Insurance.
The Borrower will, and will cause each of its Subsidiaries to, (a) keep and maintain all property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted, and (b) maintain, with
financially sound and reputable insurance companies, insurance in such amounts and against such risks as are customarily maintained by companies engaged in the same or similar businesses operating in the same or similar locations. 
 SECTION 5.06. Books and Records; Inspection Rights. The Borrower will, and will cause each of its Subsidiaries to, keep proper books of
record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities. The Borrower will, and will cause each of its Subsidiaries to, permit any representatives designated by
the Administrative Agent or any Lender, upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent
accountants, all at such reasonable times and as often as reasonably requested. 
 SECTION 5.07. Compliance with Laws. The
Borrower will, and will cause each of its Subsidiaries to, comply with all laws, rules, regulations and orders of any Governmental Authority, including, but not limited to, Environmental Laws applicable to it or its property, except where the
failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. 
 ARTICLE VI

 NEGATIVE COVENANTS 
 Until the Commitments have expired or terminated and the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full the Borrower covenants and agrees with the Lenders that: 
  

 34 

 SECTION 6.01. Liens. The Borrower will not, nor will it permit any of its Subsidiaries to,
create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any such income or revenues, except:

 (a) Permitted Encumbrances; 
 (b) any Lien on any property or asset of the Borrower or any of its Subsidiaries existing on the date hereof and set forth in Part B of Schedule II (or, to the extent not meeting
the minimum thresholds for required listing on Schedule II pursuant to Section 3.13 and not otherwise listed in said Schedule II, (in a footnote or otherwise) in an aggregate amount not
exceeding $10,000,000); provided that (i) no such Lien shall extend to any other property or asset of the Borrower or any of its Subsidiaries and (ii) any such Lien shall secure only those obligations which it secures on the date
hereof and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof; 
 (c)
any Lien existing on any property or asset prior to the acquisition thereof by the Borrower or any Subsidiary or existing on any property or asset of any Person that becomes a Subsidiary after the date hereof prior to the time such Person becomes a
Subsidiary; provided that (i) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Subsidiary, as the case may be, (ii) such Lien shall not apply to any other property or
assets of the Borrower or any Subsidiary and (iii) such Lien shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Subsidiary, as the case may be and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount thereof; 
 (d) Liens on assets acquired,
constructed or improved by the Borrower or any Subsidiary (including Liens created pursuant to Capital Lease Obligations); provided that (i) such security interests and the Indebtedness secured thereby are incurred prior to or within 365
days after such acquisition or the completion of such construction or improvement, (ii) the Indebtedness secured thereby does not exceed the cost of acquiring, constructing or improving such assets, (iii) such security interests shall not
apply to any other property or assets of the Borrower or any Subsidiary and (iv) the aggregate principal amount of Indebtedness secured by all such security interests under this paragraph (d) shall not exceed $50,000,000; 
 (e) set-off rights arising with respect to intercompany claims between the Borrower and one or more of its Subsidiaries against the
Borrower and one or more other Subsidiaries; 
 (f) With respect to letters of credit issued for the account of the Borrower
or its Subsidiaries pursuant to that certain Five-Year Credit Agreement dated as of August 12, 2005, among the Borrower, certain lenders party thereto, and JPMorgan Chase Bank, N.A., as the administrative agent thereunder (as amended, modified,
restated, or supplemented from time to time, the “Five-Year Credit Agreement”), any cash collateral or defeasance account created with respect to any such letter of credit in accordance with Sections 2.06(j) and
(k) of the Five-Year Credit Agreement; 
 (g) normal and customary set-off rights and bankers’ liens with
respect to deposit accounts; and 
 (h) Liens not otherwise permitted by the foregoing clauses of this Section 6.01
securing Indebtedness not in excess of $1,000,000 at any time outstanding. 
  

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 SECTION 6.02. Fundamental Changes. 
 (a) Mergers, Consolidations, Disposal of Assets, Etc. The Borrower will not, nor will it permit any of its Subsidiaries to, merge
into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or sell, transfer, lease or otherwise dispose of (in one transaction or in a series of transactions) any of its assets, or any of the stock
of any of its Subsidiaries (in each case, whether now owned or hereafter acquired), if the effect of any such sale of assets or stock or merger or consolidation would be to sell, transfer, lease or otherwise dispose of all or substantially all of
the assets of the Borrower and its Subsidiaries (taken as a whole) or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Default shall have occurred and be continuing; 
 (i) any Person may merge into or consolidate with the Borrower in a transaction in which the Borrower is the surviving corporation;

 (ii) any Person may merge into or consolidate with any Subsidiary in a transaction in which the surviving entity is a
Subsidiary; provided that if any such merger shall be between a Subsidiary and a wholly owned Subsidiary, then the wholly owned Subsidiary shall be the continuing or surviving corporation; 
 (iii) the Borrower may merge into or consolidate with any other Person in a transaction in which such Person is the surviving entity so
long as (x) such Person assumes all of the obligations of the Borrower under this Agreement by an instrument in form and substance reasonably satisfactory to the Administrative Agent and (y) such Person delivers such proof of corporate
action, incumbency of officers, opinions of counsel and other documents as is consistent with those delivered by the Borrower pursuant to Section 4.01 on the Effective Date or as the Administrative Agent shall have reasonably
requested; 
 (iv) any Subsidiary may sell, transfer, lease or otherwise dispose of its assets to the Borrower or to another
Subsidiary; and 
 (v) any Subsidiary may liquidate or dissolve if the Borrower determines in good faith that such liquidation
or dissolution is in the best interests of the Borrower and is not materially disadvantageous to the Lenders. 
 (b) Lines
of Business. The Borrower will not, nor will it permit any of its Subsidiaries to, engage to any material extent in any business other than businesses of the type conducted by the Borrower and its Subsidiaries on the date of execution of this
Agreement and businesses reasonably related thereto. 
 SECTION 6.03. Sale and Leasebacks. The Borrower will not, and will not
permit any of its Subsidiaries to, directly or indirectly, become or thereafter remain liable as lessee or as guarantor or other surety with respect to the lessee’s obligations under any lease, whether an operating lease or a capital lease, of
any property (whether real or personal or mixed) whether now owned or hereafter acquired, (a) which the Borrower or any of its Subsidiaries has sold or transferred or is to sell or transfer to any other Person or (b) which the Borrower or
any such Subsidiary intends to use for substantially the same purpose as any other property which has been or is to be sold or transferred by the Borrower or any such Subsidiary to any Person in connection with such lease, if in the case of
clause (a) or (b) above, such sale and such lease are part of the same transaction or a series of related transactions or are with the same other Person; provided that the Borrower or any Subsidiary may
enter into any such transaction so long as 

  

 36 

 
the sale price of all such transactions does not exceed $20,000,000 in the aggregate during the term of this Agreement. 
 SECTION 6.04. Transactions with Affiliates. The Borrower will not, and will not permit any of its Subsidiaries to, sell, lease or otherwise
transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except 
 (a) transactions in the ordinary course of business at prices and on terms and conditions not less favorable to the Borrower or such
Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties, 
 (b) transactions between or
among the Borrower and its Subsidiaries not involving any other Affiliate, 
 (c) loans to employees of the Borrower or any
Subsidiary for relocation expenses or other purposes; provided that the aggregate outstanding principal amount of the loans permitted under this clause (c) shall not exceed $3,000,000 at any one time, 
 (d) customary obligations to directors and officers of the Borrower and its Subsidiaries in respect of indemnification and reimbursement
of expenses, 
 (e) the payment of customary fees (in the form of cash, stock options or stock) to directors of the Borrower,

 (f) the payment of compensation to officers of the Borrower approved by the Board of Directors of the Borrower, and the
payment of deferred compensation to officers of the Borrower pursuant to the Harte-Hanks, Inc. Deferred Compensation Plan (including any amendments, modifications or replacements thereof; provided that such amendment, modification or replacement
does not substantially change the character of such deferred compensation program), 
 (g) the payment of bonuses to officers
and directors of the Borrower approved by the Board of Directors of the Borrower, 
 (h) the issuance of stock of the Borrower
and of options to purchase stock of the Borrower pursuant to the Harte-Hanks 2005 Omnibus Incentive Plan (including any amendments, modifications or replacements thereof; provided that such amendment, modification or replacement does not
substantially change the character of such stock option program), and 
 (i) the purchase of stock of the Borrower and of
options to purchase stock of the Borrower pursuant to the Borrower’s stock repurchase program that was publicly announced in January 1997. 
 SECTION 6.05. Subsidiary Indebtedness. The Borrower will not permit the aggregate principal amount of Indebtedness of its Subsidiaries (excluding any Indebtedness of a Subsidiary owed to the Borrower or another Subsidiary, but
including any Guarantee by a Subsidiary of Indebtedness of the Borrower) at any time to exceed $20,000,000. 
  

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 SECTION 6.06. Certain Financial Covenants. 
 (a) Leverage Ratio. The Borrower will not permit the Leverage Ratio to exceed 3.00 to 1 at any time during the term of this
Agreement. 
 (b) Interest Coverage Ratio. The Borrower will not permit the Interest Coverage Ratio to be less than
2.75 to 1 at any time during the term of this Agreement. 
 ARTICLE VII 
 EVENTS OF DEFAULT 
 If any of the following events
(“Events of Default”) shall occur: 
 (a) the Borrower shall fail to pay any principal of any Loan
when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise; 
 (b) the Borrower shall fail to pay any interest on any Loan, any facility fee, any fronting fee or any participation fee payable under this Agreement or any other Loan Document, when and as the same shall become due
and payable, and such failure shall continue unremedied for a period of three or more Business Days; or the Borrower shall fail to pay any other amount (other than an amount referred to in clause (a) of this Article) payable under
this Agreement or any other Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of thirty or more days; 
 (c) any representation or warranty made or deemed made by or on behalf of the Borrower or any of its Subsidiaries in or in connection with
this Agreement or any other Loan Document or any amendment or modification hereof or thereof, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with this Agreement or any other Loan Document
or any amendment or modification hereof or thereof, shall prove to have been incorrect in any material respect when made or deemed made; 
 (d) the Borrower shall fail to observe or perform any covenant, condition or agreement contained in Section 5.02(a) or 5.03 (with respect to the Borrower’s existence) or in
Article VI; 
 (e) the Borrower shall fail to observe or perform any covenant, condition or agreement
contained in this Agreement or any other Loan Document (other than those specified in clause (a), (b) or (d) of this Article) and such failure shall continue unremedied for a period of 30 or
more days after notice thereof from the Administrative Agent to the Borrower; 
 (f) the Borrower or any of its Material
Subsidiaries shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable (whether at stated maturity or on acceleration);

 (g) any event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or
that enables or permits (with or without the giving of notice, but without any further lapse of time) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due,
or to 

  

 38 

 
require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this
clause (g) shall not apply to (i) secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness or (ii) the voluntary prepayment of any
Indebtedness that is not then otherwise due or required to be prepaid pursuant to its terms; 
 (h) an involuntary proceeding
shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Borrower or any of its Material Subsidiaries or its debts, or of a substantial part of its assets, under any
Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any of its
Material Subsidiaries or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for a period of 60 or more days or an order or decree approving or ordering any of the foregoing shall be
entered; 
 (i) the Borrower or any of its Material Subsidiaries shall (i) voluntarily commence any proceeding or file
any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a
timely and appropriate manner, any proceeding or petition described in clause (h) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower or any of its Material Subsidiaries or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for
the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing; 
 (j) the Borrower
or any of its Material Subsidiaries shall become unable, admit in writing its inability or fail generally to pay its debts as they become due; 
 (k) one or more judgments for the payment of money in an aggregate amount in excess of $20,000,000 shall be rendered against the Borrower or any of its Material Subsidiaries or any combination thereof and the same
shall remain undischarged for a period of 30 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Borrower or any of its
Material Subsidiaries to enforce any such judgment; 
 (l) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect; 
 (m) there shall have been asserted against the Borrower or any of its Subsidiaries any claims or liabilities, whether accrued, absolute or contingent, based on or arising from the generation, storage, transport,
handling or disposal of Hazardous Materials by the Borrower or any of its Subsidiaries that, in the judgment of the Required Lenders, are reasonably likely to be determined adversely to the Borrower or any of its Subsidiaries, and the amount thereof
(either individually or in the aggregate) is reasonably likely to have a Material Adverse Effect (insofar as such amount is payable by the Borrower or any of its Subsidiaries but after deducting any portion thereof that is reasonably expected to be
paid by other creditworthy Persons jointly and severally liable therefor); or 
 (n) a Change in Control shall occur; 

  

 39 

 
then, and in every such event (other than an event with respect to the Borrower described in clause (h) or (i) of this
Article), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower, take either or both of the following actions, at the same or
different times: (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared
to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrower accrued
hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; and in case of any event with respect to the Borrower described in
clause (h) or (i) of this Article, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the
Borrower accrued hereunder, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower. 
 ARTICLE VIII 
 THE ADMINISTRATIVE AGENT 
 Each of the Lenders hereby irrevocably appoints the Administrative Agent as its agent hereunder and under the other Loan Documents and authorizes the
Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. 

The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such Person and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof
as if it were not the Administrative Agent hereunder. 
 The Administrative Agent shall not have any duties or obligations except those
expressly set forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan
Documents that the Administrative Agent is required to exercise in writing by the Required Lenders, and (c) except as expressly set forth herein and in the other Loan Documents, the Administrative Agent shall not have any duty to disclose, and
shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Subsidiaries that is communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders or in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall be deemed
not to have knowledge of any Default unless and until written notice thereof is given to the Administrative Agent by the Borrower or a Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or under any other Loan Document or
in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or in any other Loan Document, (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement, any other Loan 

  

 40 

 
Document or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article IV or
elsewhere herein or therein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent. 
 The
Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed
or sent by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon. The Administrative
Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel,
accountants or experts. 
 The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any
one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through their respective Related Parties. The exculpatory provisions
of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities
provided for herein as well as activities as Administrative Agent. 
 The Administrative Agent may resign at any time by notifying the
Lenders and the Borrower. Upon any such resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor. If no successor shall have been so appointed by the Required Lenders and shall have accepted
such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent’s resignation shall nonetheless become effective and (1) the retiring Administrative Agent
shall be discharged from its duties and obligations hereunder and (2) the Required Lenders shall perform the duties of the Administrative Agent (and all payments and communications provided to be made by, to or through the Administrative Agent
shall instead be made by or to each Lender directly) until such time as the Required Lenders appoint a successor agent as provided for above in this paragraph. Upon the acceptance of its appointment as Administrative Agent hereunder by a successor,
such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent and the retiring Administrative Agent shall be discharged from its duties and obligations
hereunder (if not already discharged therefrom as provided above in this paragraph). The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the
Borrower and such successor. After the Administrative Agent’s resignation hereunder, the provisions of this Article and Section 9.03 shall continue in effect for the benefit of such retiring Administrative Agent, its sub
agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as Administrative Agent. 
 Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such 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 the Administrative Agent or any other Lender and based on such documents and information as it shall from time to
time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any related agreement or any document furnished hereunder or thereunder. 
  

 41 

 Except as otherwise provided in Section 9.02(b) with respect to this Agreement, the
Administrative Agent may, with the prior consent of the Required Lenders (but not otherwise), consent to any modification, supplement or waiver under any of the Loan Documents. 
 ARTICLE IX 
 MISCELLANEOUS 
 SECTION 9.01. Notices. 
 (a) Notices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and subject to paragraph (b) of this Section), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows: 
  

	 	(i)	if to the Borrower, to: 

 Harte-Hanks, Inc. 
 200 Concord Plaza Drive, Suite 800 
 San
Antonio, Texas 78216 
 Attention: Dean H. Blythe, Senior Vice President and 
 Chief Financial Officer 
 Telephone No.
(210) 829-9138 
 Telecopy No. (210) 829-9139; 
  

	 	(ii)	if to the Administrative Agent, to: 

  

	 	(A)	with respect to Borrowing Requests, Interest Election Requests, and payments, to: 

 Wells Fargo Bank, National Association, as Agent 
 201 3rd Street, 8th Floor

 San Francisco, California 94596 
 Attention: Debby Moore, Operations Administrator 
 Telephone No. (415) 477-5379 
 Telecopy No. (415) 512-9408 or (415) 546-6353 
  

	 	(B)	with respect to all other matters, to: 

 Wells Fargo Bank,
National Association, as Agent 
 1445 Ross Avenue, Suite 2320 
 Dallas, Texas 75202 
 Attention: Greg D. Campbell, Vice President, 
 US Corporate Banking 
 Telephone No.
(214) 661-1202 
 Telecopy No. (214) 969-0371 
  

 42 

 with copy to: 
 Haynes and Boone, LLP 
 901 Main Street, Suite 3100 
 Dallas, Texas 75202-3789 
 Attention: Karen
S. Nelson, Esq. 
 Telephone No. (214) 651-5648 
 Telecopy No. (214) 200-0673 
 (iii) if to any other Lender, to it at its address (or
telecopy number) set forth in its Administrative Questionnaire. 
 (b) Electronic Communications. Notices and other
communications to the Lenders hereunder may be delivered or furnished by electronic communications (including e mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall
not apply to notices pursuant to Article II unless otherwise agreed by the Administrative Agent and the applicable Lender. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications. 
 (c) Change of Address, Etc. Any party hereto may change its address or telecopy number for notices and other communications
hereunder by notice to the other parties hereto (or, in the case of any such change by a Lender, by notice to the Borrower and the Administrative Agent). All notices and other communications given to any party hereto in accordance with the
provisions of this Agreement shall be deemed to have been given on the date of receipt. 
 SECTION 9.02. Waivers; Amendments.

 (a) No Deemed Waivers; Remedies Cumulative. No failure or delay by the Administrative Agent or any Lender in
exercising any right or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent and the Lenders hereunder are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of this Agreement or consent to any departure by the Borrower therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent or
any Lender may have had notice or knowledge of such Default at the time. 
 (b) Amendments. Neither this Agreement nor
any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrower and the Required Lenders or by the Borrower and the Administrative Agent with the consent of the Required
Lenders; provided that no such agreement shall (i) increase the Commitment of any Lender without the written consent of such Lender, (ii) reduce the principal amount of any Loan or reduce the rate of interest thereon, or reduce any
fees payable hereunder, without the written consent of each Lender adversely affected thereby, (iii) postpone the scheduled date of payment of the principal amount of any Loan, or any interest thereon, or any 

  

 43 

 
fees payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without
the written consent of each Lender adversely affected thereby, (iv) alter the provisions of clause (c) or (d) of Section 2.16 in a manner that would alter the pro rata sharing of payments
required thereby, without the written consent of each Lender, or (v) change any of the provisions of this Section or the percentage in the definition of the term “Required Lenders” or any other provision hereof specifying the
number or percentage of Lenders required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender; and provided further that no such agreement shall
amend, modify or otherwise affect the rights or duties of the Administrative Agent hereunder without the prior written consent of the Administrative Agent. Notwithstanding the foregoing, with respect to any amendment effecting an increase in the
Commitments pursuant to Section 2.06, such amendment need only be executed by the Borrower, the Administrative Agent, the existing Lender increasing their respective Commitments, if any, and any new Lenders being added pursuant to
Section 2.06. 
 Anything in this Agreement to the contrary notwithstanding, no waiver or modification of
any provision of this Agreement that has the effect (either immediately or at some later time) of enabling the Borrower to satisfy a condition precedent to the making of a Loan shall be effective against the Lenders for purposes of the Commitments
unless the Required Lenders shall have concurred with such waiver or modification. 
 For purposes of this Section, the
“scheduled date of payment” of any amount shall refer to the date of payment of such amount specified in this Agreement, and shall not refer to a date or other event specified for the mandatory or optional prepayment of such amount.
In addition, whenever a waiver, amendment or modification requires the consent of a Lender “adversely affected” thereby, such waiver, amendment or modification shall, upon consent of such Lender, become effective as to such Lender
whether or not it becomes effective as to any other Lender, so long as the Required Lenders consent to such waiver, amendment or modification as provided above. 
 SECTION 9.03. Expenses; Indemnity; Damage Waiver. 
 (a) Costs and
Expenses. The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent, in
connection with the syndication of the credit facilities provided for herein, the preparation and administration of this Agreement or any amendments, modifications or waivers of the provisions hereof (whether or not the transactions contemplated
hereby or thereby shall be consummated) and (ii) all out-of-pocket expenses incurred by the Administrative Agent or any Lender, including the fees, charges and disbursements of any counsel for the Administrative Agent or any Lender, in
connection with the enforcement or protection of its rights in connection with this Agreement and the other Loan Documents, including its rights under this Section, or in connection with the Loans made hereunder, including in connection with any
workout, restructuring or negotiations in respect thereof. 
 (b) Indemnification by the Borrower. The Borrower shall
indemnify the Administrative Agent and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and to hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including the fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of
(i) the execution or delivery of this 

  

 44 

 
Agreement or any agreement or instrument contemplated hereby, the performance by the parties hereto of their respective obligations hereunder or the
consummation of the Transactions or any other transactions contemplated hereby, (ii) any Loan or the use of the proceeds therefrom, (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or
operated by the Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any
of the foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee. 
 (c) Reimbursement by Lenders. To the extent that the Borrower fails to pay any amount required to be paid by it to the
Administrative Agent under paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the Administrative Agent such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent
in its capacity as such. 
 (d) Waiver of Consequential Damages, Etc. To the extent permitted by applicable law, the
Borrower shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a
result of, this Agreement or any agreement or instrument contemplated hereby, the Transactions, any Loan or the use of the proceeds thereof. 
 (e) Payments. All amounts due under this Section shall be payable promptly after written demand therefor. 
 SECTION 9.04. Successors and Assigns. 
 (a) Assignments Generally. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that (i) the Borrower may not assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations
hereunder except in accordance with this Section 9.04. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted
hereby, Participants (to the extent provided in paragraph (c) of this Section) and, to the extent expressly contemplated hereby, Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement. 
 (b) Assignments by Lenders. 
 (i) Assignments Generally. Subject to the conditions set forth in clause (ii) below, any Lender may assign to
one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the 

  

 45 

 
Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld or delayed) of: 
 (A) the Borrower, provided that no consent of the Borrower shall be required for an assignment to a Lender, an Affiliate of a Lender, an
Approved Fund or, if an Event of Default under clause (a), (b), (h) or (i) of Article VII shall have occurred and is continuing, any other assignee; and

 (B) the Administrative Agent, provided that no consent of the Administrative Agent shall be required for an assignment of
any Commitment to an assignee that is a Lender with a Commitment immediately prior to giving effect to such assignment. 
 (ii) Certain Conditions to Assignments. Assignments shall be subject to the following additional conditions: 
 (A) except in the case of an assignment to a Lender or an Affiliate of a Lender or an assignment of the entire remaining amount of the assigning Lender’s Commitment or Loans, the amount of the Commitment or Loans of the assigning
Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000 unless each of the Borrower and the
Administrative Agent otherwise consent, provided that no such consent of the Borrower shall be required if an Event of Default under clause (a), (b), (h) or (i) of
Article VII has occurred and is continuing; 
 (B) each partial assignment of any Commitment or Loans
shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement in respect of such Commitment and Loans; 
 (C) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption in substantially
the form of Exhibit A hereto, together with a processing and recordation fee of $3,500; and 
 (D) the
assignee, if it shall not already be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire. 
 (iii) Effectiveness of Assignments. Subject to acceptance and recording thereof pursuant to paragraph (c) below, from and after the effective date specified in each Assignment and Assumption the assignee thereunder shall be a
party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be
a party hereto but shall continue to be entitled to the rights referred to in Sections 2.13, 2.14, 2.15 and 9.03). Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this Section 9.04 shall be treated for purposes of this Agreement as a sale by such 

  

 46 

 
Lender of a participation in such rights and obligations in accordance with paragraph (e) below. 
 (c) Maintenance of Register by the Administrative Agent. The Administrative Agent, acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices in San Francisco, California a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal
amount of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower and any
Lender, at any reasonable time and from time to time upon reasonable prior notice. 
 (d) Effectiveness of Assignments.
Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and
recordation fee referred to in paragraph (b) above and any written consent to such assignment required by said paragraph (b), the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein
in the Register. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph (d). 
 (e) Participations. Any Lender may, without the consent of the Borrower or the Administrative Agent sell participations to one or
more banks or other financial institutions (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement and the other Loan Documents (including all or a portion of its Commitment and
the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement and the other Loan Documents shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrower, the Administrative Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement
and the other Loan Documents. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and the other Loan Documents and to approve any
amendment, modification or waiver of any provision of this Agreement or any other Loan Document; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to Section 9.02(b) that affects such Participant. Subject to paragraph (f) below, the Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.13, 2.14 and 2.15 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) above. To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 9.08 hereof as though it were a Lender, provided such Participant agrees to be subject to Section 2.16(d) as though it were a Lender
hereunder. 
 (f) Limitations on Rights of Participants. A Participant shall not be entitled to receive any greater
payment under Section 2.13 or 2.15 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such
Participant is made with the Borrower’s prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits 

  

 47 

 
of Section 2.15 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit
of the Borrower, to comply with Section 2.15(e) as though it were a Lender. 
 (g) Certain Pledges.
Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any such pledge or assignment to a Federal Reserve Bank, and this
Section 9.04 shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or
substitute any such assignee for such Lender as a party hereto. 
 (h) No Assignments to the Borrower or Affiliates.
Anything in this Section to the contrary notwithstanding, no Lender may assign or participate any interest in any Loan held by it hereunder to the Borrower or any of its Affiliates or Subsidiaries without the prior consent of each Lender.

 SECTION 9.05. Survival. All covenants, agreements, representations and warranties made by the Borrower herein and in the
certificates or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the making of
any Loans, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the
time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid and so long as
the Commitments have not expired or terminated. The provisions of Sections 2.13, 2.14, 2.15 and 9.03 and Article VIII shall survive and remain in full force and effect
regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Commitments or the termination of this Agreement or any provision hereof. 
 SECTION 9.06. Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and any separate letter agreements with respect to fees payable to the Administrative Agent
constitute the entire contract between and among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in
Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page to this
Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement. 
 SECTION 9.07.
Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without
affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction. 
 SECTION 9.08. Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is
hereby authorized at any time and from time to time, 

  

 48 

 
to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held
and other obligations at any time owing by such Lender or Affiliate to or for the credit or the account of the Borrower against any of and all the obligations of the Borrower now or hereafter existing under this Agreement held by such Lender,
irrespective of whether or not such Lender shall have made any demand under this Agreement and although such obligations may be unmatured. The rights of each Lender under this Section are in addition to other rights and remedies (including other
rights of setoff) which such Lender may have. 
 SECTION 9.09. Governing Law; Jurisdiction; Etc. 
 (a) GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF TEXAS. 

(b) SUBMISSION TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE
NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF TEXAS SITTING IN DALLAS COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE NORTHERN DISTRICT OF TEXAS, DALLAS DIVISION, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH TEXAS STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY
BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT AGAINST THE BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION. 
 (c) WAIVER OF
VENUE. THE BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT IN ANY COURT REFERRED TO IN PARAGRAPH (b) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF
SUCH ACTION OR PROCEEDING IN ANY SUCH COURT. 
 (d) Service of Process. Each party to this Agreement irrevocably
consents to service of process in the manner provided for notices in Section 9.01. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law. 

SECTION 9.10. Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING 

  

 49 

 
OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT
IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. 
 SECTION 9.11. Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of,
or be taken into consideration in interpreting, this Agreement. 
 SECTION 9.12. Treatment of Certain Information; Confidentiality.

 (a) Treatment of Certain Information. The Borrower acknowledges that from time to time financial advisory,
investment banking and other services may be offered or provided to the Borrower or one or more of its Subsidiaries (in connection with this Agreement or otherwise) by any Lender or by one or more subsidiaries or affiliates of such Lender and the
Borrower hereby authorizes each Lender to share any information delivered to such Lender by the Borrower and its Subsidiaries pursuant to this Agreement, or in connection with the decision of such Lender to enter into this Agreement, to any such
subsidiary or affiliate, it being understood that any such subsidiary or affiliate receiving such information shall be bound by the provisions of paragraph (b) of this Section as if it were a Lender hereunder. Such authorization shall survive
the repayment of the Loans, the expiration or termination of the Commitments or the termination of this Agreement or any provision hereof. 
 (b) Confidentiality. Each of the Administrative Agent and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (i) to its and
its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (ii) to the extent requested by any regulatory authority, (iii) to the extent required by applicable laws or regulations or by any subpoena or similar legal process,
(iv) to any other party to this Agreement, (v) in connection with the exercise of any remedies hereunder or under any other Loan Document or any suit, action or proceeding relating to this Agreement or any other Loan Document or the
enforcement of rights hereunder or thereunder, (vi) subject to an agreement containing provisions substantially the same as those of this Section, to (A) any assignee of or Participant in, or any prospective assignee of or Participant in,
any of its rights or obligations under this Agreement or (B) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (vii) with the consent of the
Borrower or (viii) to the extent such Information (A) becomes publicly available other than as a result of a breach of this Section or (B) becomes available to the Administrative Agent or any Lender on a nonconfidential basis from a
source other than the Borrower. For the purposes of this Section, “Information” means all information received from the Borrower relating to the Borrower or its business, other than any such information that is available to
the Administrative Agent or any Lender on a nonconfidential basis prior to disclosure by the Borrower; provided that, in the case of information received from the Borrower after the date hereof, such information is clearly identified at the time of
delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has 

  

 50 

 
exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

 SECTION 9.13. USA Patriot Act. Each Lender hereby notifies the Borrower that pursuant to the requirements of the USA PATRIOT
Act (Title III of Pub. L. 107 56 (signed into law October 26, 2001)), such Lender may be required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other
information that will allow such Lender to identify the Borrower in accordance with said Act. 
 SECTION 9.14. Interest Rate
Limitation. Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under applicable law
(collectively the “Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance
with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been
payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the
Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender. 
 SECTION 9.15. ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES. 
 [REMAINDER OF PAGE INTENTIONALLY BLANK; 
 SIGNATURE PAGES TO FOLLOW.] 

 

 51 

 Signature Page to that certain Term Loan Agreement dated as of September 6, 2006, among Harte-Hanks,
Inc., as Borrower, and Wells Fargo Bank, National Association, as Administrative Agent, Sole Lead Arranger and Sole Bookrunner, and certain Lenders named therein. 
  

			
	HARTE-HANKS, INC.
		
	 By:
	 	 /s/ Dean H. Blythe

		 	 Dean H. Blythe, Senior Vice President and
 Chief Financial Officer

  

 Signature Page to Term Loan Agreement 

 Signature Page to that certain Term Loan Agreement dated as of September 6, 2006, among Harte-Hanks,
Inc., as Borrower, and Wells Fargo Bank, National Association, as Administrative Agent, Sole Lead Arranger and Sole Bookrunner, and certain Lenders named therein. 
  

			
	WELLS FARGO BANK, NATIONAL ASSOCIATION, as the Administrative Agent and a Lender
		
	 By:
	 	 /s/ Greg D. Campbell

		 	 Greg D. Campbell, Vice President

  

 Signature Page to Term Loan Agreement 

 SCHEDULE I 
 Commitments 
 [See Section 1.01] 
  

				
	 Name of Lender
	  	Commitment ($)
	 Wells Fargo Bank, National Association.
	  	$	50,000,000.00
		  	 	 
	 Total
	  	$	50,000,000.00

 SCHEDULE II 
 Certain Agreements and Liens 
 [See Sections 3.13 and 6.01(b)] 
 Part A - Material Agreements 
 Borrower’s Letters of Credit in excess of $10,000,000: 
  

										
	 Bank
	  	Amount	  	Beneficiary	  	Expiration	  	Autorenewal
	 Wells Fargo
	  	$	10,100,000.00	  	Travelers Indemnity	  	9/30/06	  	Yes
	 Wells Fargo
	  	$	10,714,741.00	  	Ace American Insurance	  	10/1/06	  	Yes

 Borrower’s Five-Year Revolving Line of Credit in excess of $10,000,000:

  

						
	 Available
	  	Outstanding	  	Expiration
	 $125,000,000.00
	  	$	93,000,000.00	  	8/12/10

 Part B – Liens 
 None 

 SCHEDULE III 
 Litigation 
 [See Section 1.01—“Disclosed Matters”] 
 None. 

 SCHEDULE IV 
 Environmental Matters 
 [See Section 1.01 00 “Disclosed Matters”]

 None. 

 SCHEDULE V 
 Subsidiaries 
 [See Section 3.14] 
 As of August 10, 2006 
  

					
	 Name of Entity
	  	Jurisdiction of
Organization	  	% Owned
	 Avellino Technologies, Inc.
	  	Delaware	  	100%(8)
	 The Flyer Publishing Corporation
	  	Florida	  	100%
	 Harte-Hanks CRM Services Belgium NV
	  	Belgium	  	100%(2)
	 Harte-Hanks Data Services LLC
	  	Maryland	  	100%
	 Harte-Hanks Data Technologies, Inc.
	  	Delaware	  	100%
	 Harte-Hanks Direct, Inc.
	  	New York	  	100%(11)
	 Harte-Hanks Direct Marketing/Baltimore, Inc.
	  	Maryland	  	100%
	 Harte-Hanks Direct Marketing/Cincinnati, Inc.
	  	Ohio	  	100%
	 Harte-Hanks Direct Marketing/Dallas, L.P.
	  	Delaware	  	100%(6)
	 Harte-Hanks Direct Marketing/Fullerton, Inc.
	  	California	  	100%
	 Harte-Hanks Direct Marketing/Jacksonville, LLC
	  	Delaware	  	100%(9)
	 Harte-Hanks Direct Marketing/Kansas City, LLC
	  	Delaware	  	100%(1)
	 Harte-Hanks do Brazil Consultoria e Servicos Ltda.
	  	Brazil	  	100%(5)
	 Harte-Hanks Limited
	  	England	  	100%(3)
	 Harte-Hanks Market Intelligence, Inc.
	  	California	  	100%
	 Harte-Hanks Market Intelligence Espana LLC
	  	Colorado	  	100%
	 Harte-Hanks Market Intelligence Europe B.V.
	  	Netherlands	  	100%
	 Harte-Hanks Market Intelligence GmbH
	  	Germany	  	100%(4)
	 Harte-Hanks Market Intelligence Limited
	  	Ireland	  	100%(4)
	 Harte-Hanks Market Intelligence SAS
	  	France	  	100%(4)
	 Harte-Hanks Market Research, Inc.
	  	New Jersey	  	100%
	 Harte-Hanks Philippines, Inc.
	  	Philippines	  	100%
	 Harte-Hanks Postfuture, LP
	  	Delaware	  	100%(14)
	 Harte-Hanks Postfuture Management, LLC
	  	Delaware	  	100%(13)
	 Harte-Hanks Print, Inc.
	  	New Jersey	  	100%
	 Harte-Hanks Pty. Limited
	  	Australia	  	100%(3)
	 Harte-Hanks Response Management/Austin L.P.
	  	Delaware	  	100%(6)
	 Harte-Hanks Response Management/Boston, Inc.
	  	Massachusetts	  	100%
	 Harte-Hanks Shoppers, Inc.
	  	California	  	100%
	 Harte-Hanks Stock Plan, Inc.
	  	Delaware	  	100%
	 Harte-Hanks SRL
	  	Romania	  	100%(10)
	 Harte-Hanks Tampa Flyer, Inc.
	  	Delaware	  	100%
	 Harte-Hanks Teleservices, LLC
	  	Delaware	  	100%(7)
	 Harte-Hanks Trillium Software Germany GmbH
	  	Germany	  	100%(12)
	 Harte-Hanks Trillium UK Limited
	  	United Kingdom	  	100%(10)
	 Harte-Hanks UK Limited
	  	United Kingdom	  	100%
	 HTS, Inc.
	  	Connecticut	  	100%
	 NSO, Inc.
	  	Ohio	  	100%
	 Sales Support Services, Inc.
	  	New Jersey	  	100%
	 Southern Comprint Co.
	  	California	  	100%

  

	(1)	Owned by Sales Support Services, Inc. 

	(2)	99.84% Owned by Harte-Hanks, Inc. 

	    	0.16% Owned by Harte-Hanks Direct, Inc. 

  

	(3)	Owned by Harte-Hanks Data Technologies, Inc. 

  

	(4)	Owned by Harte-Hanks Market Intelligence Europe B.V. 

  

	(5)	99.998% Owned by Harte-Hanks Data Technologies, Inc. 

	    	.002% Owned by Harte-Hanks Stock Plan, Inc. 

  

	(6)	99% Owned by Harte-Hanks Stock Plan, Inc. 

	    	1% Owned by Harte-Hanks Direct, Inc. 

  

	(7)	Owned by Harte-Hanks Direct, Inc. 

  

	(8)	Owned by Harte-Hanks Trillium UK Limited 

  

	(9)	Owned by Harte-Hanks Direct Marketing/Cincinnati, Inc. 

  

	(10)	Owned by Harte-Hanks UK Limited 

  

	(11)	Owned by Harte-Hanks Print, Inc. 

  

	(12)	Owned by Harte-Hanks Market Intelligence GmbH 

  

	(13)	Owned by Harte-Hanks Stock Plan, Inc. 

  

	(14)	99% Owned by Harte-Hanks Stock Plan, Inc. 

	    	1% Owned by Harte-Hanks Postfuture Management, LLC 

  

 2 

 EXHIBIT A 
 ASSIGNMENT AND ASSUMPTION 
 This Assignment and Assumption (the “Assignment and Assumption”) is
dated as of the Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the “Assignee”). Capitalized terms used but
not defined herein shall have the meanings given to them in the Loan Agreement identified below (as amended, the “Loan Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and
Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full. 
 For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes
from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Loan Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s rights and
obligations in its capacity as a Lender under the Loan Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and
obligations of the Assignor under the respective facilities identified below and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a
Lender) against any Person, whether known or unknown, arising under or in connection with the Loan Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related
to any of the foregoing, including contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above
(the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as the “Assigned Interest”). Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor. 
  

					
	1.	 	 Assignor:
	  	_____________________________________
			
	2.	 	 Assignee:
	  	_____________________________________
			
		 		  	 [and is an Affiliate/Approved Fund of [identify Lender]1]

			
	3.	 	Borrower(s):	  	Harte-Hanks, Inc.
			
	4.	 	Administrative Agent:	  	Wells Fargo Bank, National Association, as the administrative agent under the Loan Agreement
			
	5.	 	 Loan Agreement:
	  	The Term Loan Agreement dated as of September 6, 2006 among Harte-Hanks, Inc., the Lenders parties thereto, and Wells Fargo Bank, National Association, as Administrative
Agent

	1	Select as applicable. 

	6.	Assigned Interest: 

  

							
	 Facility Assigned
	  	Aggregate Amount of
Commitments/Loans for
all Lenders	  	Amount of
Commitment/Loans
Assigned	  	Percentage Assigned of
Commitment/Loans
(set forth, to at least 9
decimals, as a
percentage of
the
Commitments/Loans of
all Lenders thereunder)
				
	 Commitment Assigned
	  	$	  	$	  	    %
				
	 Loans
	  	$	  	$	  	    %
				
	 Fees Assigned (if any):
	  	$	  	$	  	    %

 Effective Date: _____________ ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE
EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.] 
 The terms set forth in this Assignment and
Assumption are hereby agreed to: 
  

			
	 ASSIGNOR

	
	 [NAME OF ASSIGNOR]

		
	By:	 	  
		 	 Title:

  

			
	 ASSIGNEE

	
	 [NAME OF ASSIGNEE]

		
	By:	 	  
		 	 Title:

  

 2 

 Consented to and Accepted: 
  

			
	 WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent

		
	By	 	  
		 	 Title:

  

			
	 Consented to:

	
	 HARTE-HANKS, INC.

		
	By	 	  
		 	 Title:

  

 3 

 ANNEX 1 
 STANDARD TERMS AND CONDITIONS FOR 
 ASSIGNMENT AND ASSUMPTION 
 1. Representations and Warranties. 
 1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien,
encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes
no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Loan Agreement, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan
Agreement or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of the Loan Agreement or (iv) the performance or observance by the
Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under the Loan Agreement. 
 1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Loan Agreement, (ii) it satisfies the requirements, if any, specified in the Loan Agreement that are required to be satisfied by it in order to acquire the Assigned Interest and become a
Lender, (iii) from and after the Effective Date, it shall be bound by the provisions of the Loan Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it has
received a copy of the Loan Agreement, together with copies of the most recent financial statements delivered pursuant to Section 5.01 thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other
Lender, (v) if it is a Foreign Lender, attached to the Assignment and Assumption is any documentation required to be delivered by the Assignee pursuant to Section 2.15(e) of the Loan Agreement, duly completed and executed by
the Assignee, and (vi) if it is not already a Lender under the Loan Agreement, an Administrative Questionnaire in the form supplied by the Administrative Agent, duly completed by the Assignee; and (b) agrees that (i) it will,
independently and without reliance on the Administrative Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking
action under the Loan Agreement, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Agreement are required to be performed by it as a Lender. The [Assignee/Assignor] shall pay the fee
payable to the Administrative Agent pursuant to Section 9.04(b) of the Loan Agreement. 
 2. Payments. From and
after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the
Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date. 
 3. General Provisions. This
Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall
constitute one 

 
instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a
manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of Texas. 
  

 2 

 EXHIBIT B 
 Form of Opinion of Counsel to the Borrower 
 September 6, 2006 
 To the Lenders and the Administrative 
     Agent referred to below 
 c/o Wells Fargo Bank, National
Association, 
     as Administrative Agent 
 1445 Ross Avenue, Suite 2320 
 Dallas, Texas 75202 
 Ladies and Gentlemen: 
 We have acted as special counsel to Harte-Hanks, Inc., a Delaware corporation (the “Borrower”), in connection with the Term Loan
Agreement, dated as of September 6, 2006 (the “Loan Agreement”) between the Borrower, Wells Fargo Bank, National Association, as Administrative Agent, and the Lenders party thereto. Capitalized terms not defined herein are used
as defined in the Loan Agreement. This opinion is being delivered pursuant to Section 4.01(b) of the Loan Agreement. 
 For
purposes of this opinion, we have reviewed the Loan Agreement. We have also reviewed and relied upon the originals, or copies certified or otherwise identified to our satisfaction, of corporate documents and records of the Borrower and certificates
of public officials and officers of the Borrower and other documents, certificates, instruments and agreements as in our judgment are necessary to enable us to deliver this opinion letter. As to questions of fact material to the opinions, we have
relied upon information received from officers of the Borrower without independent verification. 
 In rendering our opinions, we have
assumed: 
  

	 	(a)	the genuineness and authenticity of all signatures to all documents submitted to us as originals (other than the Borrower’s signatures); 

  

	 	(b)	the conformity to authentic original documents of all documents submitted to us as certified, conformed, or photostatic copies; 

  

	 	(c)	the correctness and accuracy of all facts set forth in all certificates and documents delivered to us in connection with this opinion; 

  

	 	(d)	the Loan Agreement is enforceable against all parties thereto (except as otherwise expressly stated with respect to the Borrower in Paragraph 4 of the opinions expressed below); and

  

	 	(e)	there are no agreements or understandings among the parties that would define, supplement or qualify the terms of the Loan Agreement. 

 Based upon and subject to the foregoing and subject also to the assumptions and qualifications set forth
below, and having considered such questions of law as we have deemed necessary as a basis for the opinions expressed below, we are of the opinion that: 
  

	 	1.	The Borrower is a validly existing corporation in good standing under the laws of the State of Delaware. The Borrower has the requisite corporate power and authority to carry on its
business as now conducted and, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every
jurisdiction where such qualification is required. 

  

	 	2.	The Transactions are within the corporate powers of the Borrower. 

  

	 	3.	The Transactions have been duly authorized by all necessary corporate action on the part of the Borrower. 

  

	 	4.	The Loan Agreement has been duly executed and delivered by the Borrower and constitutes the legal, valid and binding obligation of the Borrower, enforceable against the Borrower in
accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or other similar laws relating to or affecting the enforcement of creditors’ rights in general and
subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law), including, without limitation, (a) the possible unavailability of specific performance, injunctive relief or
any other equitable remedy and (b) concepts of materiality, reasonableness, good faith and fair dealing. 

  

	 	5.	The Transactions (a) do not require, on the part of the Borrower, any consent or approval of, registration or filing with, or any other action by, any Governmental Authority
(except for any filings which are first required to be made with the Securities and Exchange Commission after the date hereof), (b) will not violate the charter or by-laws of the Borrower or, to our knowledge, any applicable law or regulation
or any order of any Governmental Authority applicable to the Borrower, (c) to our knowledge, will not violate or result in a default under any material indenture, agreement or other instrument binding upon the Borrower or any of its
Subsidiaries or assets, or give rise to a right thereunder to require any payment to be made by any such Person and (d) to our knowledge and except as provided in the Loan Documents, will not result in the creation or imposition of any Lien on
any asset of the Borrower or any of its Material Subsidiaries. 

  

	 	6.	To our knowledge, there are no actions, suits or proceedings by or before any arbitrator or Governmental Authority now pending against or threatened against or affecting the
Borrower or any of its Subsidiaries (a) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to have a Material Adverse
Effect (other than Disclosed Matters) or (b) that involve the Loan Agreement or the Transactions. 

  

	 	7.	The Borrower is not (a) an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940 or (b) a “holding
company” as defined in, or subject to regulation under, the Public Utility Holding Company Act of 1935. 

  

 2 

 The foregoing opinions are subject to the following qualifications and exceptions: 
  

	 	(a)	The foregoing opinions are limited to the Federal laws of the United States of America, the General Corporation Law of the State of Delaware and Texas law. 

 

	 	(b)	The qualification of any opinion or statement herein by the use of the words “to our knowledge”, “known to us” or words of similar import means that during the
course of our representation as described herein, no information has come to the attention of the attorneys in this firm directly involved in the transactions described herein which gave such attorneys actual knowledge contrary to the position
stated. 

  

	 	(c)	In rendering the opinion set forth in Paragraph 5 hereof, we have reviewed only (i) those statutes and regulations that a lawyer in the State of Texas exercising customary
professional diligence would reasonably recognize as being directly applicable to the Borrower and the transactions contemplated by the Loan Agreement and (ii) those indentures, agreements and instruments set forth on the Exhibit Index to the
Borrower’s Annual Report on Form 10-K for the year ended December 31, 2005. 

  

	 	(d)	We express no opinion with respect to any provision contained in the Loan Agreement prohibiting oral amendments to or waivers of provisions of such documents or limiting the effect
of a course of dealing between the parties thereto. 

  

	 	(e)	This opinion letter is limited to the matters stated herein as of the date hereof and is limited to present statutes, rules, laws and regulations and to the facts as they currently
exist. We assume no obligation to update this opinion letter or to advise you of any changes in our opinions in the event of changes in applicable law or facts becoming effective or occurring after the date hereof or if additional newly discovered
information is brought to our attention after the date hereof. 

  

	 	(f)	We express no opinion as to usury laws. 

  

	 	(g)	The opinions set forth in Paragraph 4 of this opinion letter to the extent covering Texas law, are also subject to the effect of generally applicable rules of Texas law that:

  

	 	(i)	provide forum selection clauses in contracts are not necessarily binding on the court(s) in the forum selected; 

  

	 	(ii)	limit the enforceability of provisions releasing, exculpating or exempting a party from, or requiring indemnification of a party for, liability for its own action or inaction, to
the extent the action or inaction involves gross negligence, recklessness, willful misconduct or unlawful conduct; 

  

	 	(iii)	may permit a party who has materially failed to render or offer performance required by the contract to cure that failure unless (i) permitting a cure would unreasonably hinder
the aggrieved party from making substitute arrangements for performance, or (ii) it was important in the circumstances to the aggrieved party that performance occur by the date stated in the contract; 

  

	 	(iv)	impose limitations on attorneys’ or trustees’ fees; 

  

 3 

	 	(v)	limit or affect the enforceability of provisions for late charges, prepayment charges, or yield maintenance charges, acceleration of future amounts due (other than principal)
without appropriate discount to present value, liquidated damages, and “penalties”; 

  

	 	(vi)	limit or affect the enforceability of provisions that provide for the acceleration of indebtedness upon any transfer or change in the control, ownership, or management of any party;
and 

  

	 	(vii)	limit or affect the enforcement of provisions of a contract that purport to require waiver of jury trial. 

 This opinion letter is delivered to you solely for your benefit in connection with the Loan Agreement. This opinion letter may not be relied on by you
for any other purpose, nor may it be furnished to, used by, circulated to, quoted to or referred to by, any other person for any purpose without our prior express written consent. 
 Very truly yours, 
  

 42006 Compensation Plan

 Exhibit 10.1 
 TURBINE TRUCK ENGINES, INC. 
 2006 INCENTIVE COMPENSATION PLAN 

 TURBINE TRUCK ENGINES, INC. 
 2006 INCENTIVE COMPENSATION PLAN 
  

					
	1.	  	Purpose	  	1
			
	2.	  	Definitions	  	1
			
	3.	  	Administration	  	5
			
	4.	  	Shares Subject to Plan	  	6
			
	5.	  	Eligibility; Per-Person Award Limitations	  	7
			
	6.	  	Specific Terms of Awards	  	7
			
	7.	  	Certain Provisions Applicable to Awards	  	11
			
	8.	  	Code Section 162(m) Provisions	  	13
			
	9.	  	Change in Control	  	14
			
	10.	  	General Provisions	  	15

 TURBINE TRUCK ENGINES, INC. 
 2006 INCENTIVE COMPENSATION PLAN 
 1. Purpose. The purpose of this
2006 INCENTIVE COMPENSATION PLAN (the “Plan”) is to assist TURBINE TRUCK ENGINES, INC., a Delaware corporation (the “Company”) and its Related Entities (as hereinafter defined) in attracting, motivating, retaining and rewarding
high-quality executives and other employees, officers, directors, consultants and other persons who provide services to the Company or its Related Entities by enabling such persons to acquire or increase a proprietary interest in the Company in
order to strengthen the mutuality of interests between such persons and the Company’s shareholders, and providing such persons with performance incentives to expend their maximum efforts in the creation of shareholder value. 
 2. Definitions. For purposes of the Plan, the following terms shall be defined as set forth below, in addition to such terms defined in
Section 1 hereof. 
 (a) “Award” means any Option, Stock Appreciation Right, Restricted Stock Award, Deferred
Stock Award, Share granted as a bonus or in lieu of another Award, Dividend Equivalent, Other Stock-Based Award or Performance Award, together with any other right or interest, granted to a Participant under the Plan. 
 (b) “Award Agreement” means any written agreement, contract or other instrument or document evidencing any Award granted by the
Committee hereunder. 
 (c) “Beneficiary” means the person, persons, trust or trusts that have been designated by a
Participant in his or her most recent written beneficiary designation filed with the Committee to receive the benefits specified under the Plan upon such Participant’s death or to which Awards or other rights are transferred if and to the
extent permitted under Section 10(b) hereof. If, upon a Participant’s death, there is no designated Beneficiary or surviving designated Beneficiary, then the term Beneficiary means the person, persons, trust or trusts entitled by will or
the laws of descent and distribution to receive such benefits. 
 (d) “Beneficial Owner” shall have the meaning
ascribed to such term in Rule 13d-3 under the Exchange Act and any successor to such Rule. 
 (e) “Board” means the
Company’s Board of Directors. 
 (f) “Cause” shall, with respect to any Participant, have the meaning specified
in the Award Agreement. In the absence of any definition in the Award Agreement, “Cause” shall have the equivalent meaning or the same meaning as “cause” or “for cause” set forth in any employment, consulting, or other
agreement for the performance of services between the Participant and the Company or a Related Entity or, in the absence of any such agreement or any such definition in such agreement, such term shall mean (i) the failure by the Participant to
perform, in a reasonable manner, his or her duties as assigned by the Company or a Related Entity, (ii) any violation or breach by the Participant of his or her employment, consulting or other similar agreement with the Company or a Related
Entity, if any, (iii) any violation or breach by the Participant of any non-competition, non-solicitation, non-disclosure and/or other similar agreement with the Company or a Related Entity, (iv) any act by the Participant of dishonesty or
bad faith with respect to the Company or a Related Entity, (v) use of alcohol, drugs or other similar substances in a manner that adversely affects the Participant’s work performance, or (vi) the commission by the Participant of any
act, misdemeanor, or crime reflecting unfavorably upon the Participant or the Company or any Related Entity. The good faith determination by the Committee of whether the Participant’s Continuous Service was terminated by the Company for
“Cause” shall be final and binding for all purposes hereunder. 
  

 1 

 (g) “Change in Control” means a Change in Control as defined in Section 9(b)
of the Plan. 
 (h) “Code” means the Internal Revenue Code of 1986, as amended from time to time, including
regulations hereunder and successor provisions and regulations thereto. 
 (i) “Committee” means a committee
designated by the Board to administer the Plan; provided, however, that if the Board fails to designate a committee or if there are no longer any members on the committee so designated by the Board, then the Board shall serve as the Committee. The
Committee shall consist of at least two directors, and each member of the Committee shall be (i) a “non-employee director” within the meaning of Rule 16b-3 (or any successor rule) under the Exchange Act, unless administration of the
Plan by “non-employee directors” is not then required in order for exemptions under Rule 16b-3 to apply to transactions under the Plan, (ii) an “outside director” within the meaning of Section 162(m) of the Code, and
(iii) “Independent”. 
 (j) “Consultant” means any person (other than an Employee or a Director,
solely with respect to rendering services in such person’s capacity as a director) who is engaged by the Company or any Related Entity to render consulting or advisory services to the Company or such Related Entity. 
 (k) “Continuous Service” means the uninterrupted provision of services to the Company or any Related Entity in any capacity of
Employee, Director, Consultant or other service provider. Continuous Service shall not be considered to be interrupted in the case of (i) any approved leave of absence, (ii) transfers among the Company, any Related Entities, or any
successor entities, in any capacity of Employee, Director, Consultant or other service provider, or (iii) any change in status as long as the individual remains in the service of the Company or a Related Entity in any capacity of Employee,
Director, Consultant or other service provider (except as otherwise provided in the Award Agreement). An approved leave of absence shall include sick leave, military leave, or any other authorized personal leave. 
 (l) “Covered Employee” means an Eligible Person who is a “covered employee” within the meaning of
Section 162(m)(3) of the Code, or any successor provision thereto. 
 (m) “Deferred Stock” means a right to
receive Shares, including Restricted Stock, cash measured based upon the value of Shares or a combination thereof, at the end of a specified deferral period. 
 (n) “Deferred Stock Award” means an Award of Deferred Stock granted to a Participant under Section 6(e) hereof. 
 (o) “Director” means a member of the Board or the board of directors of any Related Entity. 
 (p) “Disability” means a permanent and total disability (within the meaning of Section 22(e) of the Code), as determined by
a medical doctor satisfactory to the Committee. 
 (q) “Dividend Equivalent” means a right, granted to a Participant
under Section 6(g) hereof, to receive cash, Shares, other Awards or other property equal in value to dividends paid with respect to a specified number of Shares, or other periodic payments. 
 (r) “Effective Date” means the effective date of the Plan, which shall be the Shareholder Approval Date. 
 (s) “Eligible Person” means each officer, Director, Employee, Consultant and other person who provides services to the Company or
any Related Entity. The foregoing notwithstanding, only employees of the Company, or any parent corporation or subsidiary corporation of the Company (as those terms are defined in Sections 424(e) and (f) of the Code, respectively), shall be
Eligible Persons for 
  

 2 

 purposes of receiving any Incentive Stock Options. An Employee on leave of absence may be considered as still in the
employ of the Company or a Related Entity for purposes of eligibility for participation in the Plan. 
 (t)
“Employee” means any person, including an officer or Director, who is an employee of the Company or any Related Entity. The payment of a director’s fee by the Company or a Related Entity shall not be sufficient to
constitute “employment” by the Company. 
 (u) “Exchange Act” means the Securities Exchange Act of 1934, as
amended from time to time, including rules there under and successor provisions and rules thereto. 
 (v) “Fair Market
Value” means the fair market value of Shares, Awards or other property as determined by the Committee, or under procedures established by the Committee. Unless otherwise determined by the Committee, the Fair Market Value of a Share as
of any given date shall be the closing sale price per Share reported on a consolidated basis for stock listed on the principal stock exchange or market on which Shares are traded on the date immediately preceding the date as of which such value is
being determined or, if there is no sale on that date, then on the last previous day on which a sale was reported. 
 (w) “Good
Reason” shall, with respect to any Participant, have the meaning specified in the Award Agreement. In the absence of any definition in the Award Agreement, “Good Reason” shall have the equivalent meaning or the same meaning as
“good reason” or “for good reason” set forth in any employment, consulting or other agreement for the performance of services between the Participant and the Company or a Related Entity or, in the absence of any such agreement or
any such definition in such agreement, such term shall mean (i) the assignment to the Participant of any duties inconsistent in any material respect with the Participant’s duties or responsibilities as assigned by the Company or a Related
Entity, or any other action by the Company or a Related Entity which results in a material diminution in such duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which
is remedied by the Company or a Related Entity promptly after receipt of notice thereof given by the Participant; (ii) any material failure by the Company or a Related Entity to comply with its obligations to the Participant as agreed upon,
other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company or a Related Entity promptly after receipt of notice thereof given by the Participant; or (iii) the Company’s or
Related Entity’s requiring the Participant to be based at any office or location outside of fifty miles from the location of employment or service as of the date of Award, except for travel reasonably required in the performance of the
Participant’s responsibilities. 
 (x) “Incentive Stock Option” means any Option intended to be designated as an
incentive stock option within the meaning of Section 422 of the Code or any successor provision thereto. 
 (y)
“Independent”, when referring to either the Board or members of the Committee, shall have the same meaning as used in the rules of the NASDAQ Stock Market or any national securities exchange on which any securities of the
Company are listed for trading, and if not listed for trading, by the rules of the NASDAQ Stock Market. 
 (z) “Incumbent
Board” means the Incumbent Board as defined in Section 9(b)(ii) of the Plan. 
 (aa) “Option” means
a right granted to a Participant under Section 6(b) hereof, to purchase Shares or other Awards at a specified price during specified time periods. 
 (bb) “Optionee” means a person to whom an Option is granted under this Plan or any person who succeeds to the rights of such person under this Plan. 
  

 3 

 (cc) “Other Stock-Based Awards” means Awards granted to a Participant under
Section 6(i) hereof. 
 (dd) “Participant” means a person who has been granted an Award under the Plan which
remains outstanding, including a person who is no longer an Eligible Person. 
 (ee) “Performance Award” shall mean
any Award of Performance Shares or Performance Units granted pursuant to Section 6(h). 
 (ff) “Performance
Period” means that period established by the Committee at the time any Performance Award is granted or at any time thereafter during which any performance goals specified by the Committee with respect to such Award are to be measured.

 (gg) “Performance Share” means any grant pursuant to Section 6(h) of a unit valued by reference to a
designated number of Shares, which value may be paid to the Participant by delivery of such property as the Committee shall determine, including cash, Shares, other property, or any combination thereof, upon achievement of such performance goals
during the Performance Period as the Committee shall establish at the time of such grant or thereafter. 
 (hh) “Performance
Unit” means any grant pursuant to Section 6(h) of a unit valued by reference to a designated amount of property (including cash) other than Shares, which value may be paid to the Participant by delivery of such property as the
Committee shall determine, including cash, Shares, other property, or any combination thereof, upon achievement of such performance goals during the Performance Period as the Committee shall establish at the time of such grant or thereafter.

 (ii) “Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in
Sections 13(d) and 14(d) thereof, and shall include a “group” as defined in Section 13(d) thereof. 
 (jj) “Prior
Plan” means the Company’s 1992 Stock Incentive Plan, as amended. 
 (kk) “Related Entity” means any
Subsidiary, and any business, corporation, partnership, limited liability company or other entity designated by Board in which the Company or a Subsidiary holds a substantial ownership interest, directly or indirectly. 
 (ll) “Restricted Stock” means any Share issued with the restriction that the holder may not sell, transfer, pledge or assign such
Share and with such risks of forfeiture and other restrictions as the Committee, in its sole discretion, may impose (including any restriction on the right to vote such Share and the right to receive any dividends), which restrictions may lapse
separately or in combination at such time or times, in installments or otherwise, as the Committee may deem appropriate. 
 (mm)
“Restricted Stock Award” means an Award granted to a Participant under Section 6(d) hereof. 
 (nn)
“Rule 16b-3” means Rule 16b-3, as from time to time in effect and applicable to the Plan and Participants, promulgated by the Securities and Exchange Commission under Section 16 of the Exchange Act. 
 (oo) “Shareholder Approval Date” means the date on which this Plan is approved shareholders of the Company eligible to vote in
the election of directors, by a vote sufficient to meet the requirements of Code Sections 162(m) (if applicable) and 422, Rule 16b-3 under the Exchange Act (if applicable), applicable requirements under the rules of any stock exchange or automated
quotation system on which the Shares may be listed on quoted, and other laws, regulations and obligations of the Company applicable to the Plan. 
  

 4 

 (pp) “Shares” means the shares of common stock of the Company, par value $.001
per share, and such other securities as may be substituted (or resubstituted) for Shares pursuant to Section 10(c) hereof. 
 (qq)
“Stock Appreciation Right” means a right granted to a Participant under Section 6(c) hereof. 
 (rr)
“Subsidiary” means any corporation or other entity in which the Company has a direct or indirect ownership interest of 50% or more of the total combined voting power of the then outstanding securities or interests of such
corporation or other entity entitled to vote generally in the election of directors or in which the Company has the right to receive 50% or more of the distribution of profits or 50% or more of the assets on liquidation or dissolution. 

(ss) “Substitute Awards” shall mean Awards granted or Shares issued by the Company in assumption of, or in substitution or
exchange for, Awards previously granted, or the right or obligation to make future Awards, by a company acquired by the Company or any Related Entity or with which the Company or any Related Entity combines. 
 3. Administration.  
 (a) Authority of the Committee. The Plan shall be administered by the Committee, except to the extent the Board elects to administer the Plan, in which case the Plan shall be administered by only those directors who are
Independent Directors, in which case references herein to the “Committee” shall be deemed to include references to the Independent members of the Board. The Committee shall have full and final authority, subject to and consistent with the
provisions of the Plan, to select Eligible Persons to become Participants, grant Awards, determine the type, number and other terms and conditions of, and all other matters relating to, Awards, prescribe Award Agreements (which need not be identical
for each Participant) and rules and regulations for the administration of the Plan, construe and interpret the Plan and Award Agreements and correct defects, supply omissions or reconcile inconsistencies therein, and to make all other decisions and
determinations as the Committee may deem necessary or advisable for the administration of the Plan. In exercising any discretion granted to the Committee under the Plan or pursuant to any Award, the Committee shall not be required to follow past
practices, act in a manner consistent with past practices, or treat any Eligible Person or Participant in a manner consistent with the treatment of other Eligible Persons or Participants. 
 (b) Manner of Exercise of Committee Authority. The Committee, and not the Board, shall exercise sole and exclusive discretion on any matter
relating to a Participant then subject to Section 16 of the Exchange Act with respect to the Company to the extent necessary in order that transactions by such Participant shall be exempt under Rule 16b-3 under the Exchange Act. Any action of
the Committee shall be final, conclusive and binding on all persons, including the Company, its Related Entities, Participants, Beneficiaries, transferees under Section 10(b) hereof or other persons claiming rights from or through a
Participant, and shareholders. The express grant of any specific power to the Committee, and the taking of any action by the Committee, shall not be construed as limiting any power or authority of the Committee. The Committee may delegate to
officers or managers of the Company or any Related Entity, or committees thereof, the authority, subject to such terms as the Committee shall determine, to perform such functions, including administrative functions as the Committee may determine to
the extent that such delegation will not result in the loss of an exemption under Rule 16b-3(d)(1) for Awards granted to Participants subject to Section 16 of the Exchange Act in respect of the Company and will not cause Awards intended to
qualify as “performance-based compensation” under Code Section 162(m) to fail to so qualify. The Committee may appoint agents to assist it in administering the Plan. 
  

 5 

 (c) Limitation of Liability. The Committee and the Board, and each member thereof, shall be
entitled to, in good faith, rely or act upon any report or other information furnished to him or her by any officer or Employee, the Company’s independent auditors, Consultants or any other agents assisting in the administration of the Plan.
Members of the Committee and the Board, and any officer or Employee acting at the direction or on behalf of the Committee or the Board, shall not be personally liable for any action or determination taken or made in good faith with respect to the
Plan, and shall, to the extent permitted by law, be fully indemnified and protected by the Company with respect to any such action or determination. 
 4. Shares Subject to Plan.  
 (a) Limitation on Overall Number of Shares Available
for Delivery Under Plan. Subject to adjustment as provided in Section 10(c) hereof, the total number of Shares reserved and available for delivery under the Plan shall be 5,000,000. Any Shares delivered under the Plan may consist, in
whole or in part, of authorized and unissued shares or treasury shares. 
 (b) Application of Limitation to Grants of Award. No
Award may be granted if the number of Shares to be delivered in connection with such an Award or, in the case of an Award relating to Shares but settled only in cash (such as cash-only Stock Appreciation Rights), the number of Shares to which such
Award relates, exceeds the number of Shares remaining available for delivery under the Plan, minus the number of Shares deliverable in settlement of or relating to then outstanding Awards. The Committee may adopt reasonable counting procedures to
ensure appropriate counting, avoid double counting (as, for example, in the case of tandem or substitute awards) and make adjustments if the number of Shares actually delivered differs from the number of Shares previously counted in connection with
an Award. 
 (c) Availability of Shares Not Delivered under Awards and Adjustments to Limits.  
 (i) If any Shares subject to an Award are forfeited, expire or otherwise terminate without issuance of such Shares, or any Award is settled for cash or
otherwise does not result in the issuance of all or a portion of the Shares subject to such Award, the Shares shall, to the extent of such forfeiture, expiration, termination, cash settlement or non-issuance, again be available for Awards under the
Plan, subject to Section 4(c)(v) below. 
 (ii) Awards that are settled or exercised through the payment of Shares shall be counted in
full against the number of Shares available for award under the Plan, regardless of the number of Shares actually issued upon settlement or exercise of any such Award. 
 (iii) Substitute Awards shall not reduce the Shares authorized for grant under the Plan or authorized for grant to a Participant in any period. Additionally, in the event that a company acquired by the Company or any
Related Entity or with which the Company or any Related Entity combines has shares available under a pre-existing plan approved by shareholders and not adopted in contemplation of such acquisition or combination, the shares available for delivery
pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the
holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the Shares authorized for delivery under the Plan; provided that Awards using such available shares shall
not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were not Employees or Directors prior to such acquisition or
combination. 
 (iv) Any Shares that again become available for delivery pursuant to this Section 4(c) shall be added back as one
(1) Share. 
  

 6 

 (v) Notwithstanding anything in this Section 4(c) to the contrary and solely for purposes of
determining whether Shares are available for the delivery of Incentive Stock Options, the maximum aggregate number of shares that may be granted under this Plan shall be determined without regard to any Shares restored pursuant to this
Section 4(c) that, if taken into account, would cause the Plan to fail the requirement under Code Section 422 that the Plan designate a maximum aggregate number of shares that may be issued. 
 (d) No Further Awards Under Prior Plan. In light of the adoption of this Plan, no further awards shall be made under the Prior Plan after the
Effective Date. 
 5. Eligibility; Per-Person Award Limitations. Awards may be granted under the Plan only to Eligible Persons.
Subject to adjustment as provided in Section 10(c), in any fiscal year of the Company during any part of which the Plan is in effect, no Participant may be granted Awards with respect to more than 500,000 Shares. In addition, the maximum dollar
value payable to any one Participant with respect to Performance Units is (x) $1,000,000 with respect to any 12 month Performance Period (pro-rated for any Performance Period that is less than 12 months based upon the ratio of the number of
days in the Performance Period as compared to 365), and (y) with respect to any Performance Period that is more than 12 months, $2,000,000. 
 6. Specific Terms of Awards.  
 (a) General. Awards may be granted on the terms and conditions set forth
in this Section 6. In addition, the Committee may impose on any Award or the exercise thereof, at the date of grant or thereafter (subject to Section 10(e)), such additional terms and conditions, not inconsistent with the provisions of the
Plan, as the Committee shall determine, including terms requiring forfeiture of Awards in the event of termination of the Participant’s Continuous Service and terms permitting a Participant to make elections relating to his or her Award. The
Committee shall retain full power and discretion to accelerate, waive or modify, at any time, any term or condition of an Award that is not mandatory under the Plan. Except in cases in which the Committee is authorized to require other forms of
consideration under the Plan, or to the extent other forms of consideration must be paid to satisfy the requirements of Delaware law, no consideration other than services may be required for the grant (but not the exercise) of any Award. 

(b) Options. The Committee is authorized to grant Options to any Eligible Person on the following terms and conditions: 
 (i) Exercise Price. Other than in connection with Substitute Awards, the exercise price per Share purchasable under an Option shall be
determined by the Committee, provided that such exercise price shall not be less than 100% of the Fair Market Value of a Share on the date of grant of the Option and shall not, in any event, be less than the par value of a Share on the date of grant
of the Option. If an Employee owns or is deemed to own (by reason of the attribution rules applicable under Section 424(d) of the Code) more than 10% of the combined voting power of all classes of stock of the Company (or any parent corporation
or subsidiary corporation of the Company, as those terms are defined in Sections 424(e) and (f) of the Code, respectively) and an Incentive Stock Option is granted to such employee, the exercise price of such Incentive Stock Option (to the
extent required by the Code at the time of grant) shall be no less than 110% of the Fair Market Value a Share on the date such Incentive Stock Option is granted. Other than pursuant to Section 10(c), the Committee shall not be permitted to
(A) lower the exercise price per Share of an Option after it is granted, (B) cancel an Option when the exercise price per Share exceeds the Fair Market Value of the underlying Shares in exchange for another Award (other than in connection
with Substitute Awards), or (C) take any other action with respect to an Option that may be treated as a repricing, without approval of the Company’s shareholders. 
  

 7 

 (ii) Time and Method of Exercise. The Committee shall determine the time or times at which
or the circumstances under which an Option may be exercised in whole or in part (including based on achievement of performance goals and/or future service requirements), the time or times at which Options shall cease to be or become exercisable
following termination of Continuous Service or upon other conditions, the methods by which the exercise price may be paid or deemed to be paid (including in the discretion of the Committee a cashless exercise procedure), the form of such payment,
including, without limitation, cash, Shares, other Awards or Awards granted under other plans of the Company or a Related Entity, or other property (including notes or other contractual obligations of Participants to make payment on a deferred basis
provided that such deferred payments are not in violation of the Sarbanes-Oxley Act of 2002, or any rule or regulation adopted there under or any other applicable law), and the methods by or forms in which Shares will be delivered or deemed to be
delivered to Participants. 
 (iii) Incentive Stock Options. The terms of any Incentive Stock Option granted under the Plan
shall comply in all respects with the provisions of Section 422 of the Code. Anything in the Plan to the contrary notwithstanding, no term of the Plan relating to Incentive Stock Options (including any Stock Appreciation Right issued in tandem
therewith) shall be interpreted, amended or altered, nor shall any discretion or authority granted under the Plan be exercised, so as to disqualify either the Plan or any Incentive Stock Option under Section 422 of the Code, unless the
Participant has first requested, or consents to, the change that will result in such disqualification. Thus, if and to the extent required to comply with Section 422 of the Code, Options granted as Incentive Stock Options shall be subject to
the following special terms and conditions: 
 (A) the Option shall not be exercisable more than ten years after the date such Incentive
Stock Option is granted; provided, however, that if a Participant owns or is deemed to own (by reason of the attribution rules of Section 424(d) of the Code) more than 10% of the combined voting power of all classes of stock of the Company (or
any parent corporation or subsidiary corporation of the Company, as those terms are defined in Sections 424(e) and (f) of the Code, respectively) and the Incentive Stock Option is granted to such Participant, the term of the Incentive Stock
Option shall be (to the extent required by the Code at the time of the grant) for no more than five years from the date of grant; and 
 (B)
The aggregate Fair Market Value (determined as of the date the Incentive Stock Option is granted) of the Shares with respect to which Incentive Stock Options granted under the Plan and all other option plans of the Company (and any parent
corporation or subsidiary corporation of the Company, as those terms are defined in Sections 424(e) and (f) of the Code, respectively) during any calendar year exercisable for the first time by the Participant during any calendar year shall not
(to the extent required by the Code at the time of the grant) exceed $100,000. 
 (c) Stock Appreciation Rights. The Committee
may grant Stock Appreciation Rights to any Eligible Person in conjunction with all or part of any Option granted under the Plan or at any subsequent time during the term of such Option (a “Tandem Stock Appreciation Right”), or without
regard to any Option (a “Freestanding Stock Appreciation Right”), in each case upon such terms and conditions as the Committee may establish in its sole discretion, not inconsistent with the provisions of the Plan, including the following:

 (i) Right to Payment. A Stock Appreciation Right shall confer on the Participant to whom it is granted a right to receive,
upon exercise thereof, the excess of (A) the Fair Market Value of one Share on the date of exercise over (B) the grant price of the Stock Appreciation Right as determined by the Committee. The grant price of a Stock Appreciation Right
shall not be less than the Fair Market Value of a Share on the date of grant, in the case of a Freestanding Stock Appreciation Right, or less than the associated Option exercise price, in the case of a Tandem Stock Appreciation Right. Other than
pursuant to Section 10(c), the Committee shall not be permitted to (A) lower the grant price per Share of a Stock Appreciation Right after it is granted, (B) cancel a Stock Appreciation Right when the grant price 
  

 8 

 per Share exceeds the Fair Market Value of the underlying Shares in exchange for another Award (other than in connection
with Substitute Awards), or (C) take any other action with respect to a Stock Appreciation Right that may be treated as a repricing, without shareholder approval. 
 (ii) Other Terms. The Committee shall determine at the date of grant or thereafter, the time or times at which and the circumstances under which a Stock Appreciation Right may be exercised in whole or in
part (including based on achievement of performance goals and/or future service requirements), the time or times at which Stock Appreciation Rights shall cease to be or become exercisable following termination of Continuous Service or upon other
conditions, the method of exercise, method of settlement, form of consideration payable in settlement, method by or forms in which Shares will be delivered or deemed to be delivered to Participants, whether or not a Stock Appreciation Right shall be
in tandem or in combination with any other Award, and any other terms and conditions of any Stock Appreciation Right. 
 (iii) Tandem
Stock Appreciation Rights. Any Tandem Stock Appreciation Right may be granted at the same time as the related Option is granted or, for Options that are not Incentive Stock Options, at any time thereafter before exercise or expiration of
such Option. Any Tandem Stock Appreciation Right related to an Option may be exercised only when the related Option would be exercisable and the Fair Market Value of the Shares subject to the related Option exceeds the exercise price at which Shares
can be acquired pursuant to the Option. In addition, if a Tandem Stock Appreciation Right exists with respect to less than the full number of Shares covered by a related Option, then an exercise or termination of such Option shall not reduce the
number of Shares to which the Tandem Stock Appreciation Right applies until the number of Shares then exercisable under such Option equals the number of Shares to which the Tandem Stock Appreciation Right applies. Any Option related to a Tandem
Stock Appreciation Right shall no longer be exercisable to the extent the Tandem Stock Appreciation Right has been exercised, and any Tandem Stock Appreciation Right shall no longer be exercisable to the extent the related Option has been exercised.

 (d) Restricted Stock Awards. The Committee is authorized to grant Restricted Stock Awards to any Eligible Person on the
following terms and conditions: 
 (i) Grant and Restrictions. Restricted Stock Awards shall be subject to such restrictions on
transferability, risk of forfeiture and other restrictions, if any, as the Committee may impose, or as otherwise provided in this Plan, covering a period of time specified by the Committee (the “Restriction Period”). The terms of any
Restricted Stock Award granted under the Plan shall be set forth in a written Award Agreement which shall contain provisions determined by the Committee and not inconsistent with the Plan. The restrictions may lapse separately or in combination at
such times, under such circumstances (including based on achievement of performance goals and/or future service requirements), in such installments or otherwise, as the Committee may determine at the date of grant or thereafter. Except to the extent
restricted under the terms of the Plan and any Award Agreement relating to a Restricted Stock Award, a Participant granted Restricted Stock shall have all of the rights of a shareholder, including the right to vote the Restricted Stock and the right
to receive dividends thereon (subject to any mandatory reinvestment or other requirement imposed by the Committee). During the Restriction Period, subject to Section 10(b) below, the Restricted Stock may not be sold, transferred, pledged,
hypothecated, margined or otherwise encumbered by the Participant. 
 (ii) Forfeiture. Except as otherwise determined by the
Committee, upon termination of a Participant’s Continuous Service during the applicable Restriction Period, the Participant’s Restricted Stock that is at that time subject to a risk of forfeiture that has not lapsed or otherwise been
satisfied shall be forfeited and reacquired by the Company; provided that the Committee may provide, by rule or regulation or in any Award Agreement, or may determine in any individual case, that forfeiture conditions relating to Restricted Stock
Awards shall be waived in whole or in part in the event of terminations resulting from specified causes. 
  

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 (iii) Certificates for Stock. Restricted Stock granted under the Plan may be evidenced in
such manner as the Committee shall determine. If certificates representing Restricted Stock are registered in the name of the Participant, the Committee may require that such certificates bear an appropriate legend referring to the terms, conditions
and restrictions applicable to such Restricted Stock, that the Company retain physical possession of the certificates, and that the Participant deliver a stock power to the Company, endorsed in blank, relating to the Restricted Stock. 
 (iv) Dividends and Splits. As a condition to the grant of a Restricted Stock Award, the Committee may require or permit a Participant to
elect that any cash dividends paid on a Share of Restricted Stock be automatically reinvested in additional Shares of Restricted Stock or applied to the purchase of additional Awards under the Plan. Unless otherwise determined by the Committee,
Shares distributed in connection with a stock split or stock dividend, and other property distributed as a dividend, shall be subject to restrictions and a risk of forfeiture to the same extent as the Restricted Stock with respect to which such
Shares or other property have been distributed. 
 (e) Deferred Stock Award. The Committee is authorized to grant Deferred
Stock Awards to any Eligible Person on the following terms and conditions: 
 (i) Award and Restrictions. Satisfaction of a
Deferred Stock Award shall occur upon expiration of the deferral period specified for such Deferred Stock Award by the Committee (or, if permitted by the Committee, as elected by the Participant). In addition, a Deferred Stock Award shall be subject
to such restrictions (which may include a risk of forfeiture) as the Committee may impose, if any, which restrictions may lapse at the expiration of the deferral period or at earlier specified times (including based on achievement of performance
goals and/or future service requirements), separately or in combination, in installments or otherwise, as the Committee may determine. A Deferred Stock Award may be satisfied by delivery of Shares, cash equal to the Fair Market Value of the
specified number of Shares covered by the Deferred Stock, or a combination thereof, as determined by the Committee at the date of grant or thereafter. Prior to satisfaction of a Deferred Stock Award, a Deferred Stock Award carries no voting or
dividend or other rights associated with Share ownership. 
 (ii) Forfeiture. Except as otherwise determined by the Committee,
upon termination of a Participant’s Continuous Service during the applicable deferral period or portion thereof to which forfeiture conditions apply (as provided in the Award Agreement evidencing the Deferred Stock Award), the
Participant’s Deferred Stock Award that is at that time subject to a risk of forfeiture that has not lapsed or otherwise been satisfied shall be forfeited; provided that the Committee may provide, by rule or regulation or in any Award
Agreement, or may determine in any individual case, that forfeiture conditions relating to a Deferred Stock Award shall be waived in whole or in part in the event of terminations resulting from specified causes, and the Committee may in other cases
waive in whole or in part the forfeiture of any Deferred Stock Award. 
 (iii) Dividend Equivalents. Unless otherwise
determined by the Committee at date of grant, any Dividend Equivalents that are granted with respect to any Deferred Stock Award shall be either (A) paid with respect to such Deferred Stock Award at the dividend payment date in cash or in
Shares of unrestricted stock having a Fair Market Value equal to the amount of such dividends, or (B) deferred with respect to such Deferred Stock Award and the amount or value thereof automatically deemed reinvested in additional Deferred
Stock, other Awards or other investment vehicles, as the Committee shall determine or permit the Participant to elect. 
 (f) Bonus
Stock and Awards in Lieu of Obligations. The Committee is authorized to grant Shares to any Eligible Persons as a bonus, or to grant Shares or other Awards in lieu of obligations to pay 
  

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 cash or deliver other property under the Plan or under other plans or compensatory arrangements, provided that, in the
case of Eligible Persons subject to Section 16 of the Exchange Act, the amount of such grants remains within the discretion of the Committee to the extent necessary to ensure that acquisitions of Shares or other Awards are exempt from liability
under Section 16(b) of the Exchange Act. Shares or Awards granted hereunder shall be subject to such other terms as shall be determined by the Committee. 
 (g) Dividend Equivalents. The Committee is authorized to grant Dividend Equivalents to any Eligible Person entitling the Eligible Person to receive cash, Shares, other Awards, or other property equal in
value to the dividends paid with respect to a specified number of Shares, or other periodic payments. Dividend Equivalents may be Awarded on a free-standing basis or in connection with another Award. The Committee may provide that Dividend
Equivalents shall be paid or distributed when accrued or shall be deemed to have been reinvested in additional Shares, Awards, or other investment vehicles, and subject to such restrictions on transferability and risks of forfeiture, as the
Committee may specify. 
 (h) Performance Awards. The Committee is authorized to grant Performance Awards to any Eligible
Person payable in cash, Shares, or other Awards, on terms and conditions established by the Committee, subject to the provisions of Section 8 if and to the extent that the Committee shall, in its sole discretion, determine that an Award shall
be subject to those provisions. The performance criteria to be achieved during any Performance Period and the length of the Performance Period shall be determined by the Committee upon the grant of each Performance Award. Except as provided in
Section 9 or as may be provided in an Award Agreement, Performance Awards will be distributed only after the end of the relevant Performance Period. The performance goals to be achieved for each Performance Period shall be conclusively
determined by the Committee and may be based upon the criteria set forth in Section 8(b), or in the case of an Award that the Committee determines shall not be subject to Section 8 hereof, any other criteria that the Committee, in its sole
discretion, shall determine should be used for that purpose. The amount of the Award to be distributed shall be conclusively determined by the Committee. Performance Awards may be paid in a lump sum or in installments following the close of the
Performance Period or, in accordance with procedures established by the Committee, on a deferred basis. 
 (i) Other Stock-Based
Awards. The Committee is authorized, subject to limitations under applicable law, to grant to any Eligible Person such other Awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or
related to, Shares, as deemed by the Committee to be consistent with the purposes of the Plan. Other Stock-Based Awards may be granted to Participants either alone or in addition to other Awards granted under the Plan, and such Other Stock-Based
Awards shall also be available as a form of payment in the settlement of other Awards granted under the Plan. The Committee shall determine the terms and conditions of such Awards. Shares delivered pursuant to an Award in the nature of a purchase
right granted under this Section 6(i) shall be purchased for such consideration, (including without limitation loans from the Company or a Related Entity provided that such loans are not in violation of the Sarbanes Oxley Act of 2002, or any
rule or regulation adopted there under or any other applicable law) paid for at such times, by such methods, and in such forms, including, without limitation, cash, Shares, other Awards or other property, as the Committee shall determine.

 7. Certain Provisions Applicable to Awards.  
 (a) Stand-Alone, Additional, Tandem, and Substitute Awards. Awards granted under the Plan may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with, or in
substitution or exchange for, any other Award or any award granted under another plan of the Company, any Related Entity, or any business entity to be acquired by the Company or a Related Entity, or any other right of a Participant to receive
payment from the Company or any Related Entity. Such additional, tandem, and substitute or exchange Awards may be granted at any time. If an Award is granted 
  

 11 

 in substitution or exchange for another Award or award, the Committee shall require the surrender of such other Award or
award in consideration for the grant of the new Award. In addition, Awards may be granted in lieu of cash compensation, including in lieu of cash amounts payable under other plans of the Company or any Related Entity, in which the value of Stock
subject to the Award is equivalent in value to the cash compensation (for example, Deferred Stock or Restricted Stock), or in which the exercise price, grant price or purchase price of the Award in the nature of a right that may be exercised is
equal to the Fair Market Value of the underlying Stock minus the value of the cash compensation surrendered (for example, Options or Stock Appreciation Right granted with an exercise price or grant price “discounted” by the amount of the
cash compensation surrendered). 
 (b) Term of Awards. The term of each Award shall be for such period as may be determined by
the Committee; provided that in no event shall the term of any Option or Stock Appreciation Right exceed a period of ten years (or in the case of an Incentive Stock Option such shorter term as may be required under Section 422 of the Code).

 (c) Form and Timing of Payment Under Awards; Deferrals. Subject to the terms of the Plan and any applicable Award Agreement,
payments to be made by the Company or a Related Entity upon the exercise of an Option or other Award or settlement of an Award may be made in such forms as the Committee shall determine, including, without limitation, cash, Shares, other Awards or
other property, and may be made in a single payment or transfer, in installments, or on a deferred basis. Any installment or deferral provided for in the preceding sentence shall, however, be subject to the Company’s compliance with the
provisions of the Sarbanes-Oxley Act of 2002, the rules and regulations adopted by the Securities and Exchange Commission there under, and all applicable rules of the NASDAQ Stock Market or any national securities exchange on which the
Company’s securities are listed for trading and, if not listed for trading on either the NASDAQ Stock Market or a national securities exchange, then the rules of the NASDAQ Stock Market. The settlement of any Award may be accelerated, and cash
paid in lieu of Shares in connection with such settlement, in the discretion of the Committee or upon occurrence of one or more specified events (in addition to a Change in Control). Installment or deferred payments may be required by the Committee
(subject to Section 10(e) of the Plan, including the consent provisions thereof in the case of any deferral of an outstanding Award not provided for in the original Award Agreement) or permitted at the election of the Participant on terms and
conditions established by the Committee. Payments may include, without limitation, provisions for the payment or crediting of a reasonable interest rate on installment or deferred payments or the grant or crediting of Dividend Equivalents or other
amounts in respect of installment or deferred payments denominated in Shares. 
 (d) Exemptions from Section 16(b)
Liability. It is the intent of the Company that the grant of any Awards to or other transaction by a Participant who is subject to Section 16 of the Exchange Act shall be exempt from Section 16 pursuant to an applicable exemption
(except for transactions acknowledged in writing to be non-exempt by such Participant). Accordingly, if any provision of this Plan or any Award Agreement does not comply with the requirements of Rule 16b-3 then applicable to any such transaction,
such provision shall be construed or deemed amended to the extent necessary to conform to the applicable requirements of Rule 16b-3 so that such Participant shall avoid liability under Section 16(b). 
 (e) Code Section 409A. If and to the extent that the Committee believes that any Awards may constitute a “nonqualified deferred
compensation plan” under Section 409A of the Code, the terms and conditions set forth in the Award Agreement for that Award shall be drafted in a manner that is intended to comply with, and those provisions (and the provisions of the Plan
applicable thereto) shall be interpreted in a manner consistent with, the applicable requirements of Section 409A of the Code. 
  

 12 

 8. Code Section 162(m) Provisions.  
 (a) Covered Employees. The Committee, in its discretion, may determine at the time an Award is granted to an Eligible Person who is, or is
likely to be, as of the end of the tax year in which the Company would claim a tax deduction in connection with such Award, a Covered Employee, that the provisions of this Section 8 shall be applicable to such Award. 
 (b) Performance Criteria. If an Award is subject to this Section 8, then the lapsing of restrictions thereon and the distribution of
cash, Shares or other property pursuant thereto, as applicable, shall be contingent upon achievement of one or more objective performance goals. Performance goals shall be objective and shall otherwise meet the requirements of Section 162(m) of
the Code and regulations there under including the requirement that the level or levels of performance targeted by the Committee result in the achievement of performance goals being “substantially uncertain.” One or more of the following
business criteria for the Company, on a consolidated basis, and/or for Related Entities, or for business or geographical units of the Company and/or a Related Entity (except with respect to the total shareholder return and earnings per share
criteria), shall be used by the Committee in establishing performance goals for such Awards: (1) earnings per share; (2) revenues or margins; (3) cash flow; (4) operating margin; (5) return on net assets, investment,
capital, or equity; (6) economic value added; (7) direct contribution; (8) net income; pretax earnings; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; earnings after interest
expense and before extraordinary or special items; operating income; income before interest income or expense, unusual items and income taxes, local, state or federal and excluding budgeted and actual bonuses which might be paid under any ongoing
bonus plans of the Company; (9) working capital; (10) management of fixed costs or variable costs; (11) identification or consummation of investment opportunities or completion of specified projects in accordance with corporate
business plans, including strategic mergers, acquisitions or divestitures; (12) total shareholder return; and (13) debt reduction. Any of the above goals may be determined on an absolute or relative basis or as compared to the performance
of a published or special index deemed applicable by the Committee including, but not limited to, the Standard & Poor’s 500 Stock Index or a group of companies that are comparable to the Company. The Committee shall exclude the impact
of an event or occurrence which the Committee determines should appropriately be excluded, including without limitation (i) restructurings, discontinued operations, extraordinary items, and other unusual or non-recurring charges, (ii) an
event either not directly related to the operations of the Company or not within the reasonable control of the Company’s management, or (iii) a change in accounting standards required by generally accepted accounting principles.

 (c) Performance Period; Timing For Establishing Performance Goals. Achievement of performance goals in respect of such
Performance Awards shall be measured over a Performance Period no shorter than 12 months and no longer than 5 years, as specified by the Committee. Performance goals shall be established not later than 90 days after the beginning of any Performance
Period applicable to such Performance Awards, or at such other date as may be required or permitted for “performance-based compensation” under Code Section 162(m). 
 (d) Adjustments. The Committee may, in its discretion, reduce the amount of a settlement otherwise to be made in connection with Awards
subject to this Section 8, but may not exercise discretion to increase any such amount payable to a Covered Employee in respect of an Award subject to this Section 8. The Committee shall specify the circumstances in which such Awards shall
be paid or forfeited in the event of termination of Continuous Service by the Participant prior to the end of a Performance Period or settlement of Awards. 
 (e) Committee Certification. No Participant shall receive any payment under the Plan that is subject to this Section 8 unless the Committee has certified, by resolution or other appropriate action
in writing, that the performance criteria and any other material terms previously established by the Committee or set forth in the Plan, have been satisfied to the extent necessary to qualify as “performance based compensation” under Code
Section 162(m). 
  

 13 

 9. Change in Control.  
 (a) Effect of “Change in Control.” If and only to the extent provided in the Award Agreement, or to the extent otherwise
determined by the Committee, upon the occurrence of a “Change in Control,” as defined in Section 9(b): 
 (i) Any Option or
Stock Appreciation Right that was not previously vested and exercisable as of the time of the Change in Control, shall become immediately vested and exercisable, subject to applicable restrictions set forth in Section 10(a) hereof. 

(ii) Any restrictions, deferral of settlement, and forfeiture conditions applicable to a Restricted Stock Award, Deferred Stock Award or an Other
Stock-Based Award subject only to future service requirements granted under the Plan shall lapse and such Awards shall be deemed fully vested as of the time of the Change in Control, except to the extent of any waiver by the Participant and subject
to applicable restrictions set forth in Section 10(a) hereof. 
 (iii) With respect to any outstanding Award subject to achievement of
performance goals and conditions under the Plan, the Committee may, in its discretion, deem such performance goals and conditions as having been met as of the date of the Change in Control. 
 (b) Definition of “Change in Control”. Unless otherwise specified in an Award Agreement, a “Change in Control” shall
mean the occurrence of any of the following: 
 (i) The acquisition by any Person of Beneficial Ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of more than fifty percent (50%) of either (A) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (B) the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities) (the foregoing Beneficial Ownership hereinafter being referred to as a “Controlling
Interest”); provided, however, that for purposes of this Section 9(b), the following acquisitions shall not constitute or result in a Change of Control: (v) any acquisition directly from the Company; (w) any acquisition by the
Company; (x) any acquisition by any Person that as of the Effective Date owns Beneficial Ownership of a Controlling Interest; (y) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any
Subsidiary; or (z) any acquisition by any corporation pursuant to a transaction which complies with clauses (A), (B) and (C) of subsection (iii) below; or 
 (ii) During any period of two (2) consecutive years (not including any period prior to the Effective Date) individuals who constitute the Board on
the Effective Date (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Effective Date whose election, or nomination for
election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or 
 (iii) Consummation of a reorganization, merger, statutory share exchange or
consolidation or similar corporate transaction involving the Company or any of its Subsidiaries, a sale or other disposition of all or substantially all of the assets of the Company, or the acquisition of assets or stock of another entity by the
Company or any of its Subsidiaries (each a “Business Combination”), in 
  

 14 

 each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities
who were the Beneficial Owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than fifty percent
(50%) of the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such
Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially
the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding any employee benefit plan
(or related trust) of the Company or such corporation resulting from such Business Combination or any Person that as of the Effective Date owns Beneficial Ownership of a Controlling Interest) beneficially owns, directly or indirectly, fifty percent
(50%) or more of the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such
ownership existed prior to the Business Combination and (C) at least a majority of the members of the Board of Directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or 
 (iv) Approval by the
shareholders of the Company of a complete liquidation or dissolution of the Company. 
 10. General Provisions. 

 (a) Compliance With Legal and Other Requirements. The Company may, to the extent deemed necessary or advisable by the
Committee, postpone the issuance or delivery of Shares or payment of other benefits under any Award until completion of such registration or qualification of such Shares or other required action under any federal or state law, rule or regulation,
listing or other required action with respect to any stock exchange or automated quotation system upon which the Shares or other Company securities are listed or quoted, or compliance with any other obligation of the Company, as the Committee, may
consider appropriate, and may require any Participant to make such representations, furnish such information and comply with or be subject to such other conditions as it may consider appropriate in connection with the issuance or delivery of Shares
or payment of other benefits in compliance with applicable laws, rules, and regulations, listing requirements, or other obligations. 
 (b)
Limits on Transferability; Beneficiaries. No Award or other right or interest granted under the Plan shall be pledged, hypothecated or otherwise encumbered or subject to any lien, obligation or liability of such Participant to any
party, or assigned or transferred by such Participant otherwise than by will or the laws of descent and distribution or to a Beneficiary upon the death of a Participant, and such Awards or rights that may be exercisable shall be exercised during the
lifetime of the Participant only by the Participant or his or her guardian or legal representative, except that Awards and other rights (other than Incentive Stock Options and Stock Appreciation Rights in tandem therewith) may be transferred to one
or more Beneficiaries or other transferees during the lifetime of the Participant, and may be exercised by such transferees in accordance with the terms of such Award, but only if and to the extent such transfers are permitted by the Committee
pursuant to the express terms of an Award Agreement (subject to any terms and conditions which the Committee may impose thereon). A Beneficiary, transferee, or other person claiming any rights under the Plan from or through any Participant shall be
subject to all terms and conditions of the Plan and any Award Agreement applicable to such Participant, except as otherwise determined by the Committee, and to any additional terms and conditions deemed necessary or appropriate by the Committee.

  

 15 

 (c) Adjustments.  
 (i) Adjustments to Awards. In the event that any extraordinary dividend or other distribution (whether in the form of cash, Shares, or
other property), recapitalization, forward or reverse split, reorganization, merger, consolidation, spin-off, combination, repurchase, share exchange, liquidation, dissolution or other similar corporate transaction or event affects the Shares and/or
such other securities of the Company or any other issuer such that a substitution, exchange, or adjustment is determined by the Committee to be appropriate, then the Committee shall, in such manner as it may deem equitable, substitute, exchange or
adjust any or all of (A) the number and kind of Shares which may be delivered in connection with Awards granted thereafter, (B) the number and kind of Shares by which annual per-person Award limitations are measured under Section 5
hereof, (C) the number and kind of Shares subject to or deliverable in respect of outstanding Awards, (D) the exercise price, grant price or purchase price relating to any Award and/or make provision for payment of cash or other property
in respect of any outstanding Award, and (E) any other aspect of any Award that the Committee determines to be appropriate. 
 (ii)
Adjustments in Case of Certain Corporate Transactions. In the event of any merger, consolidation or other reorganization in which the Company does not survive, or in the event of any Change in Control, any outstanding Awards may be
dealt with in accordance with any of the following approaches, as determined by the agreement effectuating the transaction or, if and to the extent not so determined, as determined by the Committee: (a) the continuation of the outstanding
Awards by the Company, if the Company is a surviving corporation, (b) the assumption or substitution for, as those terms are defined in Section 9(b)(iv) hereof, the outstanding Awards by the surviving corporation or its parent or
subsidiary, (c) full exercisability or vesting and accelerated expiration of the outstanding Awards, or (d) settlement of the value of the outstanding Awards in cash or cash equivalents or other property followed by cancellation of such
Awards (which value, in the case of Options or Stock Appreciation Rights, shall be measured by the amount, if any, by which the Fair Market Value of a Share exceeds the exercise or grant price of the Option or Stock Appreciation Right as of the
effective date of the transaction). The Committee shall give written notice of any proposed transaction referred to in this Section 10(c)(ii) a reasonable period of time prior to the closing date for such transaction (which notice may be given
either before or after the approval of such transaction), in order that Participants may have a reasonable period of time prior to the closing date of such transaction within which to exercise any Awards that are then exercisable (including any
Awards that may become exercisable upon the closing date of such transaction). A Participant may condition his exercise of any Awards upon the consummation of the transaction. 
 (iii) Other Adjustments. The Committee (and the Board if and only to the extent such authority is not required to be exercised by the
Committee to comply with Section 162(m) of the Code) is authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards (including Performance Awards, or performance goals relating thereto) in recognition of
unusual or nonrecurring events (including, without limitation, acquisitions and dispositions of businesses and assets) affecting the Company, any Related Entity or any business unit, or the financial statements of the Company or any Related Entity,
or in response to changes in applicable laws, regulations, accounting principles, tax rates and regulations or business conditions or in view of the Committee’s assessment of the business strategy of the Company, any Related Entity or business
unit thereof, performance of comparable organizations, economic and business conditions, personal performance of a Participant, and any other circumstances deemed relevant, provided that no such adjustment shall be authorized or made if and to the
extent that such authority or the making of such adjustment would cause Options, Stock Appreciation Rights, Performance Awards granted pursuant to Section 8(b) hereof to Participants designated by the Committee as Covered Employees and intended
to qualify as “performance-based compensation” under Code Section 162(m) and the regulations there under to otherwise fail to qualify as “performance-based compensation” under Code Section 162(m) and regulations there
under. 
  

 16 

 (d) Taxes. The Company and any Related Entity are authorized to withhold from any Award
granted, any payment relating to an Award under the Plan, including from a distribution of Shares, or any payroll or other payment to a Participant, amounts of withholding and other taxes due or potentially payable in connection with any transaction
involving an Award, and to take such other action as the Committee may deem advisable to enable the Company or any Related Entity and Participants to satisfy obligations for the payment of withholding taxes and other tax obligations relating to any
Award. This authority shall include authority to withhold or receive Shares or other property and to make cash payments in respect thereof in satisfaction of a Participant’s tax obligations, either on a mandatory or elective basis in the
discretion of the Committee. 
 (e) Changes to the Plan and Awards. The Board may amend, alter, suspend, discontinue or
terminate the Plan, or the Committee’s authority to grant Awards under the Plan, without the consent of shareholders or Participants, except that any amendment or alteration to the Plan shall be subject to the approval of the Company’s
shareholders not later than the annual meeting next following such Board action if such shareholder approval is required by any federal or state law or regulation (including, without limitation, Rule 16b-3 or Code Section 162(m)) or the rules
of any stock exchange or automated quotation system on which the Shares may then be listed or quoted, and the Board may otherwise, in its discretion, determine to submit other such changes to the Plan to shareholders for approval; provided that,
without the consent of an affected Participant, no such Board action may materially and adversely affect the rights of such Participant under any previously granted and outstanding Award. The Committee may waive any conditions or rights under, or
amend, alter, suspend, discontinue or terminate any Award theretofore granted and any Award Agreement relating thereto, except as otherwise provided in the Plan; provided that, without the consent of an affected Participant, no such Committee or the
Board action may materially and adversely affect the rights of such Participant under such Award. 
 (f) Limitation on Rights Conferred
Under Plan. Neither the Plan nor any action taken hereunder or under any Award shall be construed as (i) giving any Eligible Person or Participant the right to continue as an Eligible Person or Participant or in the employ or service of
the Company or a Related Entity; (ii) interfering in any way with the right of the Company or a Related Entity to terminate any Eligible Person’s or Participant’s Continuous Service at any time, (iii) giving an Eligible Person or
Participant any claim to be granted any Award under the Plan or to be treated uniformly with other Participants and Employees, or (iv) conferring on a Participant any of the rights of a shareholder of the Company including, without limitation,
any right to receive dividends or distributions, any right to vote or act by written consent, any right to attend meetings of shareholders or any right to receive any information concerning the Company’s business, financial condition, results
of operation or prospects, unless and until such time as the Participant is duly issued Shares on the stock books of the Company in accordance with the terms of an Award. None of the Company, its officers or its directors shall have any fiduciary
obligation to the Participant with respect to any Shares awarded pursuant to this Plan unless and until the Participant is duly issued Shares on the stock books of the Company in accordance with the terms of an Award. Neither the Company nor any of
the Company’s officers, directors, representatives or agents are granting any rights under the Plan to the Participant whatsoever, oral or written, express or implied, other than those rights expressly set forth in this Plan or the Award
Agreement. 
 (g) Unfunded Status of Awards; Creation of Trusts. The Plan is intended to constitute an “unfunded”
plan for incentive and deferred compensation. With respect to any payments not yet made to a Participant or obligation to deliver Shares pursuant to an Award, nothing contained in the Plan or any Award shall give any such Participant any rights that
are greater than those of a general creditor of the Company; provided that the Committee may authorize the creation of trusts and deposit therein cash, Shares, other Awards or other property, or make other arrangements to meet the Company’s
obligations under the Plan. Such trusts or other arrangements shall be consistent with the “unfunded” status of the Plan unless the Committee otherwise determines with the consent of each affected Participant. The trustee of such trusts
may be authorized to dispose of trust assets and reinvest the proceeds in alternative investments, subject to such terms and conditions as the Committee may specify and in accordance with applicable law. 
  

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 (h) Nonexclusivity of the Plan. Neither the adoption of the Plan by the Board nor its
submission to the shareholders of the Company for approval shall be construed as creating any limitations on the power of the Board or a committee thereof to adopt such other incentive arrangements as it may deem desirable including incentive
arrangements and awards which do not qualify under Section 162(m) of the Code. 
 (i) Payments in the Event of Forfeitures;
Fractional Shares. Unless otherwise determined by the Committee, in the event of a forfeiture of an Award with respect to which a Participant paid cash or other consideration, the Participant shall be repaid the amount of such cash or other
consideration. No fractional Shares shall be issued or delivered pursuant to the Plan or any Award. The Committee shall determine whether cash, other Awards or other property shall be issued or paid in lieu of such fractional shares or whether such
fractional shares or any rights thereto shall be forfeited or otherwise eliminated. 
 (j) Governing Law. The validity,
construction and effect of the Plan, any rules and regulations under the Plan, and any Award Agreement shall be determined in accordance with the laws of the State of Delaware without giving effect to principles of conflict of laws, and applicable
federal law. 
 (k) Non-U.S. Laws. The Committee shall have the authority to adopt such modifications, procedures, and subplans
as may be necessary or desirable to comply with provisions of the laws of foreign countries in which the Company or its Subsidiaries may operate to assure the viability of the benefits from Awards granted to Participants performing services in such
countries and to meet the objectives of the Plan. 
 (l) Plan Effective Date and Shareholder Approval; Termination of Plan. The
Plan shall become effective on the Effective Date, which is the date the Plan was approved by shareholders of the Company eligible to vote in the election of directors, by a vote sufficient to meet the requirements of Code Sections 162(m) (if
applicable) and 422, Rule 16b-3 under the Exchange Act (if applicable), applicable requirements under the rules of any stock exchange or automated quotation system on which the Shares may be listed or quoted, and other laws, regulations, and
obligations of the Company applicable to the Plan. Awards may be granted subject to shareholder approval, but may not be exercised or otherwise settled in the event the shareholder approval is not obtained. The Plan shall terminate at the earliest
of (a) such time as no Shares remain available for issuance under the Plan, (b) termination of this Plan by the Board, or (c) the tenth anniversary of the Effective Date. Awards outstanding upon expiration of the Plan shall remain in
effect until they have been exercised or terminated, or have expired. 
  

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