Document:

Amended and Restated Credit Agreement

 Exhibit 10.19 
  
  
 AMENDED AND RESTATED 
 CREDIT AGREEMENT 
  
 dated as of 
  
 July 16, 2004 
  
 among 
  
 SCANSOURCE, INC., a South Carolina corporation, and 
  
 NETPOINT INTERNATIONAL, INC., a Florida corporation, as U.S. Borrowers,

  
 SCANSOURCE EUROPE SPRL, 
  
 SCANSOURCE EUROPE LIMITED, 
  
 and 
  
 SCANSOURCE UK LIMITED, as Non-U.S. Borrowers, 
  
 The Initial Guarantors Listed Herein, 
  
 The Banks Listed Herein, 
  
 BRANCH BANKING AND TRUST COMPANY OF SOUTH CAROLINA, 
  
 as Administrative Agent, 
  
 WACHOVIA BANK, NATIONAL ASSOCIATION, 
 as
Syndication Agent 
 and an Other Currency Lender 
  

  
 BB&T CAPITAL MARKETS and

 WACHOVIA BANK, NATIONAL ASSOCIATION 
  
 As Arrangers 

 AMENDED AND RESTATED 
 CREDIT AGREEMENT 
  
 AGREEMENT
dated as of July 16, 2004 among SCANSOURCE, INC. a South Carolina corporation, NETPOINT INTERNATIONAL, INC., a Florida corporation, 4100 QUEST, LLC, a South Carolina limited liability company, PARTNER SERVICES, INC., a South Carolina corporation,
SCANSOURCE EUROPE SPRL, a company incorporated under the laws of Belgium, SCANSOURCE EUROPE LIMITED, a company incorporated under the laws of the United Kingdom, SCANSOURCE UK LIMITED, a company incorporated under the laws of the United Kingdom, the
BANKS listed on the signature pages hereof, WACHOVIA BANK, NATIONAL ASSOCIATION, as Syndication Agent and an Other Currency Lender, and BRANCH BANKING AND TRUST COMPANY OF SOUTH CAROLINA, as Administrative Agent. 
  
 The Company, the Guarantors, the Banks and the Administrative Agent are
parties to the Original Credit Agreement (as defined herein) which provides for the making of loans by the Revolving Advance Lenders to the Company in an aggregate principal amount at any one time outstanding not exceeding $80,000,000. 

 
 The parties hereto wish to amend the Original Credit Agreement in certain
respects and to restate the Original Credit Agreement, to read in its entirety as set forth below. Accordingly, the parties hereto agree that effective on the Restatement Effective Date (as defined herein), the Original Credit Agreement is amended
and restated to read in its entirety as follows: 
  
 ARTICLE I

  
 DEFINITIONS 
  
 SECTION 1.01. Definitions. The terms as defined in this Section 1.01
shall, for all purposes of this Agreement and any amendment hereto (except as otherwise expressly provided or unless the context otherwise requires), have the meanings set forth herein: 
  
 “ACL Agreement” means any credit line sweep services agreement now or hereafter entered into between the
Administrative Agent and the Company and all amendments and modifications thereto. 
  
 “Account Debtor” shall mean the person who is obligated on any of the Accounts Receivable Collateral or otherwise is obligated as a purchaser or lessee of any of the Inventory Collateral. 
  
 “Accounts” shall have the meaning set forth in the Security
Agreement. 
  
 “Accounts Receivable Collateral” shall
mean all obligations of every kind at any time owing to any U.S. Borrower or any Guarantor howsoever evidenced or incurred, including, without limitation, all accounts, instruments, contract rights, chattel paper (whether tangible or electronic) and
general intangibles, all returned or repossessed goods and all books, records, computer tapes, programs and ledger books arising therefrom or relating thereto, whether now owned or hereafter acquired or arising and all proceeds of the foregoing.

 “Acquisition” means the acquisition of (i) a controlling equity interest in another Person
(including the purchase of an option, warrant or convertible or similar type security to acquire such a controlling interest at the time it becomes exercisable by the holder thereof), whether by purchase of such equity interest or upon exercise of
an option or warrant for, or conversion of securities into, such equity interest, or (ii) assets of another Person which constitute all or any material part of the assets of such Person or of a line or lines of business conducted by such Person.

  
 “Additional Costs” means, with respect to any
Advance the rate per annum calculated by the Administrative Agent (or an Other Currency Lender designated by the Administrative Agent) in accordance with Schedule 1.01 – Additional Costs hereto. 
  
 “Adjusted Monthly Libor Index” has the meaning set forth in Section
2.06(c). 
  
 “Administrative Agent” means Branch Banking
and Trust Company of South Carolina, in its capacity as administrative agent for the Banks, Other Currency Lender and the Issuing Banks hereunder, and its successors and permitted assigns in such capacity. 
  
 “Administrative Agent’s Letter Agreement” means that certain
letter agreement, dated as of May 20, 2004, between the Company and the Administrative Agent relating to the structure of the credit facility provided by this Agreement, and certain fees from time to time payable by the Company to the Administrative
Agent, together with all amendments and modifications thereto. If there is any conflict between the provisions of this Agreement and the provisions of the Administrative Agent’s Letter Agreement, the provisions of this Agreement will control.

  
 “Advances” means, collectively the Revolving
Advances, the Swing Line Advances and Other Currency Advances and “Advance” means any one of such Advances. 
  
 “Affiliate” of any Person means (i) any other Person which directly, or indirectly through one or more intermediaries, controls such Person,
(ii) any other Person which directly, or indirectly through one or more intermediaries, is controlled by or is under common control with such Person, or (iii) any other Person of which such Person owns, directly or indirectly, 20% or more of the
common stock or equivalent equity interests. As used herein, the term “control” means possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise. 
  
 “Aggregate Unused Commitments” means at any date an amount equal to the aggregate amount of each Bank’s Facility Commitment less the sum of: (1) the aggregate outstanding principal amount of all Advances (excluding Swing Line
Advances); (2) the aggregate outstanding principal amount of all Letter of Credit Advances and Undrawn Amounts; and (3) the aggregate outstanding principal amount of the Dollar Equivalent of all Other Currency Advances. It is agreed that the
aggregate outstanding principal amount of all Swing Line Advances shall not be considered used amounts of the Facility Commitment for purposes of calculating the fee payable under Section 2.07. 
  
 “Agreement” means this Credit Agreement, together with all
amendments and supplements hereto. 
  

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 “Applicable Margin” has the meaning set forth in Section 2.06(a). 
  
 “Assignee” has the meaning set forth in Section 9.07(c).

  
 “Assignment and Acceptance” means an Assignment and
Acceptance executed in accordance with Section 9.07(c) in the form attached hereto as Exhibit J. 
  
 “Australian Dollars” means the lawful currency of the Commonwealth of Australia, as in effect from time to time. 
  
 “Authority” has the meaning set forth in Section 8.02. 

 
 “Bank” means each bank listed on the signature pages hereof as
having a Revolving Advance Commitment or Other Currency Commitment (including, without limitation, the Revolving Advance Lenders, the Other Currency Lenders and the Swing Line Lender), and their respective successors and assigns; provided, that
unless the context otherwise requires, each reference herein to the Banks shall be deemed to include any Conduit Lender. 
  
 “BB&T” means Branch Banking and Trust Company of South Carolina, and its successors and assigns. 
  
 “Borrowers” means collectively the U.S. Borrowers and the Non-U.S.
Borrowers and “Borrower” means any one of such Borrowers. 
  
 “Borrowing” means Advances of the same type made by the applicable Banks required to make such Advances on the same Domestic Business Day and Euro-Dollar Business Day, as the case may be, and pursuant to Article II. 
  
 “Canadian Dollars” means the lawful currency of Canada, as in
effect from time to time. 
  
 “Capital Expenditures”
means for any period the sum of all capital expenditures incurred during such period by the Company and its Consolidated Subsidiaries, as determined in accordance with GAAP; provided, however, that Capital Expenditures shall not include any capital
expenditure that is included within the definition of “Costs of Acquisition” and made to consummate an Acquisition. 
  
 “Capital Securities” means, with respect to any Person, any and all shares, interests (including membership interests and partnership
interests), participations or other equivalents (however designated, whether voting or non-voting) of such Person’s capital (including any instruments convertible into equity), whether now outstanding or issued after the Restatement Effective
Date. 
  
 “CERCLA” means the Comprehensive Environmental
Response Compensation and Liability Act, 42 U.S.C. §9601 et seq. and its implementing regulations and amendments. 
  
 “CERCLIS” means the Comprehensive Environmental Response Compensation and Liability Information System established pursuant to CERCLA.

  

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 “Change of Law” shall have the meaning set forth in Section 8.02. 
  
 “Closing Certificate” has the meaning set forth in Section 3.01(e).

  
 “Closing Date” means July 26, 2001. 
  
 “Code” means the Internal Revenue Code of 1986, as amended, or any
successor Federal tax code. Any reference to any provision of the Code shall also be deemed to be a reference to any successor provision or provisions thereof. 
  

“Collateral” shall have the meaning set forth in the Security Agreement. 
  
 “Collateral Documents” means, collectively, the Pledge Agreement and the Security Agreement. 
  
 “Collateral Locations” shall mean the Executive Offices and those
additional locations set forth and described on Schedule 1.01 - Collateral Locations, under the heading “Collateral Locations.” 
  
 “Commitments” means, with respect to each Bank, collectively such Bank’s Facility Commitment, Revolving Advance Commitment and Other
Currency Commitment and “Commitment” means, with respect to each Bank, any of such Commitments. 
  
 “Company” means ScanSource, Inc., a South Carolina corporation, and its successors and permitted assigns. 
  
 “Compliance Certificate” has the meaning set forth in Section
5.01(c). 
  
 “Conduit Lender” shall mean any special
purpose corporation organized and administered by any Bank for the purpose of making Revolving Advances otherwise required to be made by such Bank and designated by such Bank in a written instrument provided to the Administrative Agent;
provided, that the designation by any Bank of a Conduit Lender shall not relieve the designating Bank of any of its obligations to fund a Revolving Advance under this Agreement if, for any reason, its Conduit Lender fails to fund any such
Revolving Advance, and the designating Bank (and not the Conduit Lender) shall have the sole right and responsibility to deliver all consents, approvals and waivers required or requested under this Agreement with respect to its Conduit Lender, and
provided, further, that no Conduit Lender shall (a) be entitled to receive any greater amount pursuant to Article VIII than the designating Bank would have been entitled to receive in respect of the extensions of credit made by such
Conduit Lender or (b) be deemed to have any Revolving Advance Commitment or Other Currency Commitment. 
  
 “Consolidated Debt” means at any date the sum of all Debt of the Company and its Consolidated Subsidiaries. 
  
 “Consolidated EBITDA” shall be determined as of the end of each
Fiscal Quarter and shall mean EBITDA, of the Company and its Consolidated Subsidiaries, for the Fiscal Quarter then ending and the immediately preceding three Fiscal Quarters, all as determined in accordance with GAAP. 
  

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 “Consolidated Fixed Charges” for any period means the sum of (i) Consolidated Interest Expense
for such period, (ii) all payments of principal in respect of Debt (excluding principal payments made with respect to any revolving line of credit) of the Company or any of its Consolidated Subsidiaries for such period, and (iii) all payment
obligations of the Company and its Consolidated Subsidiaries for such period under all operating leases and rental agreements. 
  
 “Consolidated Funded Debt” shall mean, as of any date of determination, the aggregate (without duplication) of all Funded Debt of the Company
and its Consolidated Subsidiaries as of such date. 
  
 “Consolidated Interest Expense” for any period means interest, whether expensed or capitalized, in respect of Debt of the Company or any of its Consolidated Subsidiaries outstanding during such period. 
  
 “Consolidated Net Income” means, for any period, the Net Income of
the Company and its Consolidated Subsidiaries determined on a consolidated basis, but excluding (i) extraordinary items and (ii) any equity interests of the Company or any Subsidiary of the Company in the unremitted earnings of any Person that is
not a Subsidiary of the Company. 
  
 “Consolidated
Subsidiary” means at any date any Subsidiary or other entity the accounts of which, in accordance with GAAP, would be consolidated with those of the Company in its consolidated and consolidating financial statements as of such date. 

 
 “Consolidated Tangible Net Worth” means, at any time,
Stockholders’ Equity, less the sum of the value, as set forth or reflected on the most recent consolidated balance sheet of the Company and its Consolidated Subsidiaries, prepared in accordance with GAAP, of 
  
 (A) Any surplus resulting from any write-up of assets subsequent to March
31, 2004 (provided that this item (A) shall not preclude the write up of assets in accordance with and as a result of purchase accounting principles at the time such assets are acquired); 
  
 (B) All assets which would be treated as intangible assets for balance sheet presentation purposes under GAAP, including
without limitation goodwill (whether representing the excess of cost over book value of assets acquired, or otherwise), trademarks, tradenames, copyrights, patents and technologies (other than computer software and software under development which
is treated as fixed assets for balance sheet presentation purposes), and unamortized debt discount and expense. 
  
 (C) To the extent not included in (B) of this definition, any amount at which shares of capital stock of the Company appear as an asset on the balance
sheet of the Company and its Consolidated Subsidiaries; 
  
 (D)
Loans or advances to stockholders, directors, officers or employees; and 
  
 (E) To the extent not included in (B) of this definition, deferred expenses. 
  

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 “Consolidated Total Assets” means, at any time, the total assets of the Company and its
Consolidated Subsidiaries, determined on a consolidated basis, as set forth or reflected on the most recent consolidated balance sheet of the Company and its Consolidated Subsidiaries, prepared in accordance with GAAP. 
  
 “Controlled Group” means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under common control which, together with any Loan Party, are treated as a single employer under Section 414 of the Code or Section 4001 of ERISA. 
  
 “Costs of Acquisition” means, with respect to any Acquisition, as
at the date of entering into any agreement therefor, the sum of the following (without duplication): (i) the value of the capital stock, warrants or options to acquire capital stock of the Company or any Subsidiary to be transferred in
connection therewith, (ii) the amount of any cash and fair market value of other property (excluding property described in clause (i) and the unpaid principal amount of any debt instrument) given as consideration, (iii) the amount (determined by
using the face amount or the amount payable at maturity, whichever is greater) of any Debt incurred, assumed or acquired by the Company or any Subsidiary in connection with such Acquisition, (iv) all additional purchase price amounts in the form of
earnouts and other contingent obligations that should be recorded on the financial statements of the Company and its Subsidiaries in accordance with GAAP, (v) all amounts paid in respect of covenants not to compete, consulting agreements that should
be recorded on financial statements of the Company and its Subsidiaries in accordance with GAAP, and other affiliated contracts in connection with such Acquisition, (vi) the aggregate fair market value of all other consideration given by the Company
or any Subsidiary in connection with such Acquisition, and (vii) out of pocket transaction costs for the services and expenses of attorneys, accountants and other consultants incurred in effecting such transaction, and other similar transaction
costs so incurred. For purposes of determining the Cost of Acquisition for any transaction, (A) the capital stock of the Company shall be valued (I) in the case of capital stock that is then designated as a national market system security by the
National Association of Securities Dealers, Inc. (“NASDAQ”) or is listed on a national securities exchange, the average of the last reported bid and ask quotations or the last prices reported thereon, and (II) with respect to any other
shares of capital stock, as determined by the Board of Directors of the Company and, if requested by the Administrative Agent, determined to be a reasonable valuation by the independent public accountants referred to in Section 5.01(a), (B) the
capital stock of any Subsidiary shall be valued as determined by the Board of Directors of such Subsidiary and, if requested by the Administrative Agent, determined to be a reasonable valuation by the independent public accountants referred to in
Section 5.01(a), and (C) with respect to any Acquisition accomplished pursuant to the exercise of options or warrants or the conversion of securities, the Cost of Acquisition shall include both the cost of acquiring such option, warrant or
convertible security as well as the cost of exercise or conversion. For purposes of Section 5.04, “Costs of Acquisition” shall not include any additional purchase amounts in the form of earnouts payable under written agreements in
existence on the Restatement Effective Date in connection with the Company’s acquisitions of NetPoint and Outsourcing Unlimited, Inc. that should be recorded on the financial statements of the Company and its Subsidiaries in accordance with
GAAP. 
  
 “Credit Extensions” means, as the context may
require, 
  

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 (a) the making of an Advance by a Bank; or 
  
 (b) the issuance of any Letter of Credit, or the extension of any expiry date of any existing Letter of Credit, by an
Issuing Bank. 
  
 “Debt” of any Person means at any
date, without duplication, (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person to pay the deferred
purchase price of property or services, except trade accounts payable arising in the ordinary course of business, (iv) all obligations of such Person as lessee under capital leases, (v) all obligations of such Person to reimburse any bank or other
Person in respect of amounts payable under a banker’s acceptance, (vi) all Redeemable Preferred Stock of such Person (in the event such Person is a corporation), (vii) all obligations (absolute or contingent) of such Person to reimburse any
bank or other Person in respect of amounts which are available to be drawn or have been drawn under a letter of credit or similar instrument, (viii) all Debt of others secured by a Lien on any asset of such Person, whether or not such Debt is
assumed by such Person, (ix) all Debt of others Guaranteed by such Person, (x) all obligations of such Person with respect to interest rate protection agreements, foreign currency exchange agreements or other hedging agreements (valued as the
termination value thereof computed in accordance with a method approved by the International Swap Dealers Association and agreed to by such Person in the applicable hedging agreement, if any); provided that for the purposes of calculating
“Funded Debt,” “Debt” shall not include any Hedging Agreements which are entered into in the ordinary course of business and used solely as a part of the normal business operations of the Company or any of its Subsidiaries as a
risk management strategy and/or hedge against changes resulting from interest rate and currency market changes and not as a means to speculate for purposes of investment on trends and shifts in financial or commodities markets; and (xi) the
principal portion of all obligations of such Person under any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing product where such transaction is considered borrowed money indebtedness for
tax purposes but is classified as an operating lease under GAAP. 
  
 “Default” means any condition or event which constitutes an Event of Default or which with the giving of notice or lapse of time or both would, unless cured or waived in writing, become an Event of Default. 
  
 “Default Rate” means, with respect to the Loan, including without
limitation, any Revolving Advance, Other Currency Advance (other than an Other Currency Overdraft Advance) or Swing Line Advance, on any day, the sum of 2% plus the then highest interest rate (including the Applicable Margin determined as if the
Ratio of Consolidated Funded Debt to Consolidated EBITDA is greater than 2.00) which may be applicable to any Advance hereunder (irrespective of whether any such type of Advance is actually outstanding hereunder). 
  
 “Depreciation and Amortization” means for any period an amount
equal to the sum of all depreciation and amortization expenses of the Company and its Consolidated Subsidiaries for such period, as determined in accordance with GAAP. 
  

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 “Dividends” means for any period the sum of all dividends paid or declared during such period
in respect of any Capital Securities and Redeemable Preferred Stock (other than dividends paid or payable in the form of additional Capital Securities). 
  
 “Dollar Borrowing” means a borrowing hereunder consisting of Revolving Advances made in Dollars to the U.S. Borrowers at the same time by the
Banks pursuant to Article II. 
  
 “Dollar Equivalent”
means, at any time, (a) as to any amount denominated in Dollars, the amount thereof at such time, and (b) as to any amount denominated in an Other Currency, the equivalent amount in Dollars as determined by the Administrative Agent at such time on
the basis of the Spot Rate for the purchase of Dollars with such Other Currency on the applicable Determination Date. 
  
 “Dollars” or “$” means dollars in lawful currency of the United States of America. 
  
 “Domestic Business Day” means any day except a Saturday, Sunday or
other day on which commercial banks in South Carolina are authorized or required by law to close. 
  
 “EBITDA” means and includes, for any Fiscal Quarter for which the amount thereof is to be determined as follows: (A) the sum of (i) Consolidated
Net Income for such period; (ii) Consolidated Interest Expense for such period; (iii) franchise taxes (if applicable), income taxes and other taxes measured by income or profits in respect of the Company and its Consolidated Subsidiaries for such
period, but only to the extent such taxes were deducted in computing Consolidated Net Income for such period; (iv) Depreciation and Amortization for such period, all determined on a consolidated basis in accordance with GAAP; plus (B) other
extraordinary non-cash charges for such period, but only to the extent such other extraordinary non-cash charges are included in computing Consolidated Net Income for such period, minus, (C) other extraordinary non-cash gains for such period, but
only to the extent such other extraordinary non-cash gains are included in computing Consolidated Net Income for such period; plus, (D) non-recurring after-tax losses for such period, but only to the extent such non-recurring after-tax losses are
included in computing Consolidated Net Income for such period, minus (E) non-recurring after-tax gains for such period, but only to the extent such non-recurring after-tax gains are included in computing Consolidated Net Income for such period, plus
(F) non-cash charges in respect of stock options and good will amortization for such period, but only to the extent such non-cash charges in respect of stock options and good will amortization are included in computing Consolidated Net Income for
such period. 
  
 “EDGAR” means the Electronic Data
Gathering, Analysis and Retrieval system established and operated by the SEC, or any successor system. 
  
 “Environmental Authority” means any foreign, federal, state, local or regional government that exercises any form of jurisdiction or authority
under any Environmental Requirement. 
  
 “Environmental
Authorizations” means all licenses, permits, orders, approvals, notices, registrations or other legal prerequisites for conducting the business of a Loan Party or any Subsidiary of a Loan Party required by any Environmental Requirement.

  

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 “Environmental Judgments and Orders” means all judgments, decrees or orders arising from or in
any way associated with any Environmental Requirements, whether or not entered upon consent or written agreements with an Environmental Authority or other entity arising from or in any way associated with any Environmental Requirement, whether or
not incorporated in a judgment, decree or order. 
  
 “Environmental Laws” means any and all federal, state, local and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions, discharges or releases of pollutants, contaminants, petroleum or petroleum products, chemicals or industrial, toxic or hazardous substances or wastes into the environment,
including, without limitation, ambient air, surface water, groundwater or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, petroleum or
petroleum products, chemicals or industrial, toxic or hazardous substances or wastes or the clean-up or other remediation thereof. 
  
 “Environmental Liabilities” means any liabilities, whether accrued, contingent or otherwise, arising from and in any way associated with any
Environmental Requirements. 
  
 “Environmental Notices”
means notice from any Environmental Authority or by any other person or entity, of possible or alleged noncompliance with or liability under any Environmental Requirement, including without limitation any complaints, citations, demands or requests
from any Environmental Authority or from any other person or entity for correction of any violation of any Environmental Requirement or any investigations concerning any violation of any Environmental Requirement. 
  
 “Environmental Proceedings” means any judicial or administrative
proceedings arising from or in any way associated with any Environmental Requirement. 
  
 “Environmental Releases” means releases as defined in CERCLA or under any applicable state or local environmental law or regulation. 
  
 “Environmental Requirements” means any legal requirement relating to health, safety or the environment and
applicable to a Loan Party, any Subsidiary of a Loan Party or the Properties, including but not limited to any such requirement under CERCLA or similar state legislation and all federal, state and local laws, ordinances, regulations, orders, writs,
decrees and common law. 
  
 “ERISA” means the Employee
Retirement Income Security Act of 1974, as amended from time to time, or any successor law. Any reference to any provision of ERISA shall also be deemed to be a reference to any successor provision or provisions thereof. 
  
 “Euro” and the sign “€” means the single
currency of the Member States of the European Union that have adopted such currency as their currency in accordance with the legislations of the European Union relating to the European Economic and Monetary Union. 
  
 “Euro-Dollar Business Day” means any day: 
  
 (a) which is a Domestic Business Day on which dealings in Dollar and Other
Currency deposits are carried out in the London interbank market; 
  

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 (b) in relation to a transaction involving an Other Currency (other than Euros), on which banks are open
for general interbank business in the principal financial centre of the country of that Other Currency; and 
  
 (c) in relation to a transaction involving Euros, which is a TARGET Day. 
  
 “Euro-Dollar Loan” means the Loan during Interest Periods when the Loan bears or is to bear interest at a rate
based upon the London Interbank Offered Rate. 
  
 “Euro-Dollar Reserve Percentage” has the meaning set forth in Section 2.06. 
  
 “Event of Default” has the meaning set forth in Section 6.01. 
  
 “Executive Offices” shall mean with respect to the U.S. Borrowers or a Guarantor, the address and location corresponding to such U.S.
Borrowers’ or Guarantor’s name set forth on Schedule 1.01 - Collateral Locations under the heading “Executive Offices.” 
  
 “Facility Commitment” means with respect to any Bank, (i) the amount set forth opposite the name of such Bank on the signature page hereof as
its Facility Commitment; or (ii) as to any Bank which enters into an assignment and acceptance (whether as transferor Bank or as assignee thereunder), the amount of such Bank’s Commitment after giving effect to such assignment and acceptance,
or (iii) as to any Bank which agrees to increase its Revolving Advance Commitment pursuant to Section 2.01(b) and (c) or increase its Other Currency Commitment pursuant to Section 2.16(a)(2), the amount of the Facility Commitment after giving effect
to such increase, in each case as such amount may be reduced from time to time pursuant to Sections 2.08 and 2.09. 
  
 “Facing Fees” means, collectively the U.S. Dollar Facing Fees and Other Currency Facing Fees. 
  
 “Federal Funds Rate” means, for any day, the rate per annum
(rounded upward, if necessary, to the next higher 1/100th of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic Business Day next succeeding such day, provided that (i) if the day for which such rate is to be determined is not a Domestic Business Day, the Federal Funds Rate for such day shall
be such rate on such transactions on the next preceding Domestic Business Day as so published on the next succeeding Domestic Business Day, and (ii) if such rate is not so published for any day, the Federal Funds Rate for such day shall be the
average rate charged to BB&T on such day on such transactions as determined by the Administrative Agent. 
  
 “Financing” shall mean (i) any transaction or series of transactions for the incurrence by a Loan Party of any Debt or for the establishment of
a commitment to make advances which would constitute Debt of a Loan Party, which Debt is not by its terms subordinate and junior to other Debt of a Loan Party, (ii) an obligation incurred in a transaction or series of transactions in which assets of
a Loan Party are sold and leased back, or (iii) a sale of accounts or other receivables or any interest therein, other than a sale or transfer of accounts or receivables attendant to a sale permitted hereunder of an operating division. 

 

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 “Fiscal Month” means any fiscal month of the Company. 
  
 “Fiscal Quarter” means any fiscal quarter of the Company.

  
 “Fiscal Year” means any fiscal year of the Company.

  
 “Fixed Charge Coverage Ratio” shall be determined as
of the end of each Fiscal Quarter and shall mean the ratio of: (A) Consolidated EBITDA for the period of four consecutive Fiscal Quarters most recently ended on or prior to such date, plus all obligations of the Company or any of its Consolidated
Subsidiaries as lessee under operating leases, for the period of four consecutive Fiscal Quarters most recently ended on or prior to such date, to (B) (i) Consolidated Fixed Charges for the period of four consecutive fiscal quarters most recently
ended on or prior to such date, plus (ii) the sum of the aggregate cash taxes on income (and franchise taxes, if applicable) paid by the Company and its Consolidated Subsidiaries during such period of four consecutive Fiscal Quarters most recently
ended on or prior to such date, all Dividends paid or declared by the Company and its Consolidated Subsidiaries during such period, plus Capital Expenditures during such period. 
  
 “Foreign Employee Benefit Plan” means any employee benefit plan as defined in Section 3(3) of ERISA which is
maintained or contributed to for the benefit of the employees of any Loan Party or any member of the Controlled Group, but which is not covered by ERISA pursuant to ERISA Section 4(b)(4). 
  
 “Foreign Pension Plan” means any employee benefit plan as defined in Section 3(3) of ERISA which (i) is maintained
or contributed to for the benefit of employees of any Loan Party or any member of the Controlled Group, (ii) is not covered by ERISA pursuant to Section 4(b)(4) of ERISA, and (iii) under applicable local law, is required to be funded through a trust
or other funding vehicle. 
  
 “Funded Debt” shall mean,
as of any date of determination with respect to any Person, all Debt for borrowed money of such Person, whether direct or contingent, including without limitation, reimbursement and all other obligations outstanding with respect to surety bonds and
letters of credit (but excluding the amount of undrawn letters of credit and surety bonds of such Person), all obligations of such Person as lessee under capitalized leases, the deferred purchase price of any property or asset or Debt evidenced by a
promissory note, bond, guaranty or similar written obligations for the payment of money (including, but not limited to, conditional sales or similar title retention agreements but excluding trade accounts payable arising in the ordinary course of
business). 
  
 “GAAP” means generally accepted
accounting principles in effect in the United States applied on a basis consistent with those which, in accordance with Section 1.02, are to be used in making the calculations for purposes of determining compliance with the terms of this Agreement.

  
 “Governmental Authority” shall mean any nation or
government, any state or other political subdivision thereof and any central bank thereof, any municipal, local, city or 
  

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 county government, and any entity exercising executive, legislative, judicial, regulatory or administrative functions of
or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing. 
  

“Guarantee” by any Person means any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (i) to secure, purchase or pay (or advance or supply funds for the purchase or payment
of) such Debt or other obligation (whether arising by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services, to provide collateral security, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for the purpose of assuring in any other manner the obligee of such Debt or other obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in
part), provided that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning. 
  
 “Guaranteed Obligations” means any and all liabilities,
indebtedness and obligations of any and every kind and nature, heretofore, now or hereafter owing, arising, due or payable from the Borrowers to the Banks (including, without limitation, the Other Currency Lender and Swing Line Lender), the Issuing
Banks, the Administrative Agent, or any of them, arising under or evidenced by this Agreement, the Other Currency Overdraft Facility Letter, the Notes, the Letter of Credit Agreements, the Collateral Documents or any other Loan Document. 

 
 “Guarantors” shall mean collectively: (a) the Initial
Guarantors; and (b) all Material Subsidiaries acquired, formed or otherwise in existence after the Closing Date. 
  
 “Hazardous Materials” includes, without limitation, (a) solid or hazardous waste, as defined in the Resource Conservation and Recovery Act of
1980, 42 U.S.C. §6901 et seq. and its implementing regulations and amendments, or in any applicable state or local law or regulation, (b) any “hazardous substance”, “pollutant” or “contaminant”, as defined in
CERCLA, or in any applicable state or local law or regulation, (c) gasoline, or any other petroleum product or by-product, including crude oil or any fraction thereof, (d) toxic substances, as defined in the Toxic Substances Control Act of 1976, or
in any applicable state or local law or regulation and (e) insecticides, fungicides, or rodenticides, as defined in the Federal Insecticide, Fungicide, and Rodenticide Act of 1975, or in any applicable state or local law or regulation, as each such
Act, statute or regulation may be amended from time to time. 
  
 “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.

  
 “IBM Intercreditor Agreement” shall mean that
certain Intercreditor Agreement dated July 26, 2001 by and between the Administrative Agent and IBM Credit Corporation, either as originally executed or as it may be from time to time supplemented, modified, amended, renewed or extended, as the
context shall require. 
  

 12 

 “Initial Guarantors” shall mean collectively (i) 4100 Quest, LLC, a South Carolina limited
liability company; (ii) Partner Services, Inc., a South Carolina corporation; and (iii) with respect to the Obligations of the Non-U.S. Borrowers, the U.S. Borrowers. 
  
 “Intercreditor Agreement” means the Amended and Restated Intercreditor Agreement of even date herewith by and
between the Administrative Agent, the Banks, the Issuing Banks, the Other Currency Lenders and the IR Bank, either as originally executed or as it may be from time to time supplemented, modified, amended, renewed or extended, as the context shall
require. 
  
 “Interest Payment Date” shall mean each
Quarterly Payment Date. 
  
 “Interest Period” means: (1)
relative to any Revolving Advance and Swing Line Advance, a calendar month; provided that: (a) the initial Interest Period shall mean the period commencing on the Closing Date and ending on July 31, 2001, provided that the London Interbank Offered
Rate shall be determined as if such Interest Period commenced on July 1, 2001; and (b) the last Interest Period under this Agreement shall end on the Termination Date; and (2) relative to any Other Currency Advance (other than an Other Currency
Overdraft Advance), the period beginning on (and including) the date on which such Euro-Dollar Loan is made or continued as, or converted into, a Euro-Dollar Loan pursuant to Section 2.16 and shall end on (but exclude) the day which
numerically corresponds to such date one, two, three or six months thereafter (or, if such month has no numerically corresponding day, on the last Euro-Dollar Business Day of such month) as the Borrowers may select in their relevant notice pursuant
to Section 2.16 provided that (a) the Borrowers shall not be permitted to select Interest Periods to be in effect at any one time which have expiration dates occurring on more than eight different dates; (b) if such Interest Period
would otherwise end on a day which is not a Euro-Dollar Business Day, such Interest Period shall end on the next following Euro-Dollar Business Day (unless such next following Euro-Dollar Business Day is the first Euro-Dollar Business Day of a
calendar month, in which case such Interest Period shall end on the Euro-Dollar Business Day next preceding such numerically corresponding day); and (c) no Interest Period for any Other Currency Advance may end later than the Termination Date.

  
 “Inventory Collateral” shall mean all inventory of
U.S. Borrowers and Guarantors, or in which any U.S. Borrower or Guarantor has rights, whether now owned or hereafter acquired, wherever located, including, without limitation, all goods of the U.S. Borrowers and Guarantors held for sale or lease or
furnished or to be furnished under contracts of service, all goods held for display or demonstration, goods on lease or consignment, returned and repossessed goods, all raw materials, work-in-process, finished goods and supplies used or consumed in
the business of any U.S. Borrower or any Guarantor, together with all documents, documents of title, dock warrants, dock receipts, warehouse receipts, intellectual property, bills of lading or orders for the delivery of all, or any portion, of the
foregoing. 
  
 “Investment” means any investment in any
Person, whether by means of purchase or acquisition of obligations or securities of such Person, capital contribution to such Person, loan or advance to such Person, making of a time deposit with such Person, Guarantee or assumption of any
obligation of such Person or otherwise, excluding, however, trade credit extended in the ordinary course of business by the Company or any Consolidated Subsidiary to a Person that is not an Affiliate. 
  

 13 

 “IR Agreement” means that certain ISDA Master Agreement dated as of July 26, 2001, by and
between the Borrower and the IR Bank, together with all schedules thereto, as amended from time to time, and all confirmations entered into, as amended, from time to time. 
  
 “IR Bank” means Branch Banking and Trust Company, in its capacity as a party to the IR Agreement. 
  
 “Issuing Banks” means collectively the U.S. Dollar Issuing Bank and
the Other Currency Issuing Bank and “Issuing Bank” means one of such Issuing Banks. 
  
 “Japanese Yen” means the lawful currency of Japan, as in effect from time to time. 
  
 “Judgment Currency” is defined in Section 9.19. 
  

“Lending Office” means, as to each Bank, its office located at its address set forth on the signature pages hereof (or identified on the
signature pages hereof as its Lending Office) or such other office as such Bank may hereafter designate as its Lending Office by notice to the Company and the Administrative Agent. 
  
 “Letter of Credit Advances” means collectively the U.S. Dollar Letter of Credit Advances and the Dollar Equivalent
of the Other Currency Letter of Credit Advances and “Letter of Credit Advance” means any one of such Letter of Credit Advances. 
  
 “Letter of Credit Agreement” means collectively the U.S. Dollar Letter of Credit Agreements and the Other Currency Letter of Credit Agreements
and “Letter of Credit Agreement” means any one of such Letter of Credit Agreements. 
  
 “Letter of Credit Facility Exposure” shall mean, with respect to any Bank at any time, such Bank’s Pro Rata Facility Share of the sum of (i) the aggregate Undrawn Amounts at such time and (ii) the
aggregate amount of all Letter of Credit Advances outstanding at such time (being in the case of Other Currency Letters of Credit, the Dollar Equivalent amount of the same). 
  
 “Letters of Credit” means collectively the U.S. Dollar Letters of Credit and the Other Currency Letters of Credit
and “Letter of Credit” means any one of such Letters of Credit, as any of such letters of credit may be extended, renewed, replaced or amended from time to time. 
  
 “Lien” means, with respect to any asset, any mortgage, deed to secure debt, deed of trust, lien, pledge, charge,
security interest, security title, preferential arrangement which has the practical effect of constituting a security interest or encumbrance, servitude or encumbrance of any kind in respect of such asset to secure or assure payment of a Debt or a
Guarantee, whether by consensual agreement or by operation of statute or other law, or by any agreement, contingent or otherwise, to provide any of the foregoing. For the purposes of this Agreement, the Company or any Subsidiary shall be deemed to
own subject to a Lien any asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such asset. 
  

 14 

 “Loan” means the aggregate outstanding Advances made by the Banks to the Borrowers under this
Agreement and the Other Currency Overdraft Facility Letter. The Loan shall at all times be a Euro-Dollar Loan, unless such Loan is to be a Prime Rate Loan pursuant to Article VIII herein. 
  
 “Loan Documents” means this Agreement, the Other Currency Overdraft Facility Letter, the Notes, the Collateral
Documents, the Letter of Credit Agreements, the Letters of Credit, any other document evidencing, relating to or securing the Revolving Advances, the Other Currency Advances, the Swing Line Advances or the Letters of Credit, and any other document
or instrument delivered from time to time in connection with this Agreement, the Notes, the Letter of Credit Agreements, the Swing Line Advances, the Letters of Credit, the Collateral Documents, the Other Currency Advances or the Revolving Advances,
as such documents and instruments may be amended or supplemented from time to time. 
  
 “Loan Parties” means collectively the Borrowers and each Guarantor that is now or hereafter a party to any of the Loan Documents. 
  
 “London Interbank Offered Rate” has the meaning set forth in Section 2.06(c). 
  
 “Margin Stock” means “margin stock” as defined in
Regulations T, U or X of the Board of Governors of the Federal Reserve System, as in effect from time to time, together with all official rulings and interpretations issued thereunder. 
  
 “Material Adverse Effect” means, with respect to any event, act, condition or occurrence of whatever nature
(including any adverse determination in any litigation, arbitration, or governmental investigation or proceeding), whether singly or in conjunction with any other event or events, act or acts, condition or conditions, occurrence or occurrences,
whether or not related, a material adverse change in, or a material adverse effect upon, any of (a) the financial condition, operations, business or properties of the Company and its Consolidated Subsidiaries taken as a whole, (b) the rights and
remedies of the Administrative Agent or the Banks under the Loan Documents, or the ability of the Borrowers or any other Loan Party to perform its obligations under the Loan Documents to which it is a party, as applicable, or (c) the legality,
validity or enforceability of any Loan Document. 
  
 “Material Subsidiary” means collectively: (i) each U.S. Subsidiary which is a Consolidated Subsidiary and at any date accounts for (or in the case of a recently formed or acquired U.S. Subsidiary would so account for on a pro
forma historical basis) at least: (A) 5% of Consolidated Total Assets as measured as at the end of the then most recently ended Fiscal Year, or (B) 5% of Consolidated Net Income (before taxes) for either of the two most recently ended Fiscal Years;
and (ii) each U.S. Subsidiary that is a member of the Material Subsidiary Group. As used herein, “Material Subsidiary Group” as at any date means one or more U.S. Subsidiaries (determined in accordance with this definition) which account
for (or in the case of a recently formed or acquired U.S. Subsidiary would so account for on a pro forma historical basis), when combined with the Company, at least (A) 90% of Consolidated Total Assets as measured as at the end of the then most
recently ended Fiscal Year or (B) 90% of Consolidated Net Income (before taxes) for either of the two most recently ended Fiscal Years. A U.S. Subsidiary shall be a “Material Subsidiary” if such U.S. Subsidiary is included in any of the
following groups: (1) the U.S. Subsidiaries (determined in accordance with the terms of the 
  

 15 

 following sentence) accounting for the Consolidated Total Assets measured under part (A) of the preceding sentence, but
not the Consolidated Net Income measured under part (B) of the preceding sentence; or (2) the U.S. Subsidiaries (determined in accordance with the terms of the following sentence) accounting for the Consolidated Net Income measured under part (B) of
the preceding sentence, but not the Consolidated Total Assets measured under part (A) of the preceding sentence; or (3) the U.S. Subsidiaries (determined in accordance with the terms of the following sentence) accounting for the Consolidated Net
Income measured under part (B) of the preceding sentence and the Consolidated Total Assets measured under part (A) of the preceding sentence. The determination of the U.S. Subsidiaries comprising the Material Subsidiary Group as of any date shall be
made on the basis of a group (selected by the Company) consisting of the smallest number of U.S. Subsidiaries necessary to satisfy groups (1), (2) or (3), as the case may be, above. 
  
 “Multiemployer Plan” shall have the meaning set forth in Section 4001(a)(3) of ERISA. 
  
 “Net Income” means, as applied to any Person for any period, the
aggregate amount of net income of such Person, after taxes, for such period, as determined in accordance with GAAP. 
  
 “Netpoint” means Netpoint International, Inc., a Florida corporation. 
  
 “Netpoint Guaranty” means the guaranty by the Company of the indebtedness of Netpoint under Netpoint’s line
of credit in a maximum outstanding principal amount of $1,000,000. 
  
 “New Borrower Joinder Agreement” has the meaning set forth in Section 2.20(a). 
  
 “Non-U.S. Borrowers” means collectively: (i) ScanSource Europe SPRL; (ii) ScanSource Europe Limited; (iii) ScanSource UK Limited; (iv) each
Consolidated Subsidiary that executes and delivers a New Borrower Joinder Agreement, as a Non-U.S. Borrower pursuant to Section 2.20(a); and (v) their respective successors and permitted assigns. “Non-U.S. Borrower” means any one of such
Non-U.S. Borrowers. 
  
 “Non-U.S. Obligations” means all
obligations (monetary or otherwise, whether absolute or contingent, matured or unmatured) of the Non-U.S. Borrowers and their Subsidiaries arising under or in connection with a Loan Document, including, without limitation, the principal of, premium,
if any, and interest (including interest accruing during, or which would have accrued but for, the pendency of any proceeding of the type described in Sections 6.01(g), 6.01(h) and 6.01(t), whether or not allowed in such
proceeding) on all Other Currency Advances borrowed by each Non-U.S. Borrower, all Other Currency Letter of Credit Advances made in respect of an Other Currency Letter of Credit in which one or more Non-U.S. Borrowers is the applicant, all Other
Currency Letters of Credit in which one or more Non-U.S. Borrowers is the applicant, indemnities on the Other Currency Advances borrowed by each Non-U.S. Borrower and solely for the purposes of calculating the amount of the Non-U.S. Obligations, the
amount of all loans or Investments made by the U.S. Borrowers to or in each Non-U.S. Borrower and each of its Subsidiaries made with the proceeds of Other Currency Advances. Notwithstanding anything to the contrary contained herein, the Non-U.S.
Borrower Obligations shall not include 
  

 16 

 any Credit Extensions actually made to any Person that is not a Non-U.S. Borrower and Non-U.S. Borrower Obligations, with
respect to any Person, shall exclude any obligations that would constitute unlawful financial assistance prohibited by Section 151 of the English Companies Act 1985. 
  
 “Non-U.S. Subsidiary” means any Subsidiary which is not a U.S. Subsidiary. 
  
 “Notes” means the Swing Line Note, the Other Currency Notes and the
promissory notes of the U.S. Borrowers, substantially in the form of Exhibit A hereto, evidencing the obligation of the U.S. Borrowers to repay the Revolving Advances, together with all amendments, consolidations, modifications, renewals and
supplements thereto and “Note” means any one of such Notes. 
  
 “Notice of Borrowing” has the meaning set forth in Section 2.02. 
  
 “Obligations” means the collective reference to all indebtedness, obligations and liabilities to the Administrative Agent, the Issuing Banks, the Other Currency Lenders, the Swing Line Lender and the Banks,
existing on the date of this Agreement or arising thereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law or otherwise,
of the Loan Parties under this Agreement, the Letter of Credit Agreements or any other Loan Document; provided that in no event shall term “Obligations” include (i) the loan evidenced by that certain $7,350,000 promissory note dated July
28, 2000 made by 4100 Quest, LLC and payable to BB&T; (ii) the loan evidenced by that certain $506,000 promissory note dated January 8, 2001 made by ScanSource, Inc. and payable to BB&T; and (iii) the loan evidenced by that certain
$1,750,000 promissory note dated October 4, 1996 made by ScanSource, LLC and serviced by Wachovia. 
  
 “Officer’s Certificate” has the meaning set forth in Section 3.01(f). 
  
 “Organic Document” means, relative to any Loan Party, as applicable, its articles or certificate of incorporation,
by-laws, memorandum of association, articles of association, certificate of change of name, certificate of partnership, partnership agreement, articles or organization, certificate of formation, limited liability agreement, operating agreement and
all shareholder agreements, voting trusts and similar arrangements applicable to any of such Loan Party’s partnership interests, limited liability company interests or authorized shares of Capital Securities. 
  
 “Original Credit Agreement” means that certain Credit Agreement,
dated as of July 26, 2001, between the Company, the Guarantors, the Revolving Advance Lenders and Branch Banking and Trust Company of South Carolina, as Agent, as modified by that certain First Amendment to Credit Agreement, dated June 15, 2002,
that certain Second Amendment to Credit Agreement dated October 31, 2002, that certain Third Amendment to Credit Agreement dated August 6, 2003 and that certain Fourth Amendment to Credit Agreement dated October 8, 2003. This Agreement amends,
restates and replaces the Original Credit Agreement. 
  
 “Other Currency” means Sterling, Euros, Canadian Dollars, Swedish Krona, Swiss Francs, Japanese Yen, Australian Dollars or any other immediately available and freely transferable and convertible currency acceptable to the Other
Currency Lenders and the Administrative Agent. 
  

 17 

 “Other Currency Advance” means an advance made to the Borrowers under this Agreement pursuant
to Section 2.16 denominated in an Other Currency or an Other Currency Overdraft Advance. 
  
 “Other Currency Advance Exposure” shall mean with respect to any Bank at any time, such Bank’s Pro Rata Facility Share of the Dollar Equivalent amount of the aggregate amount of all Other Currency
Advances outstanding at such time. 
  
 “Other Currency
Borrowing” means a borrowing hereunder consisting of Other Currency Advances (other than Other Currency Overdraft Advances) made in an Other Currency to the Non-U.S. Borrowers by the Other Currency Lenders pursuant to Section 2.16. 

 
 “Other Currency Commitment” means with respect to an Other
Currency Lender, (i) the amount set forth opposite the name of such Other Currency Lender on the signature page hereof as its Other Currency Commitment; or (ii) as to any Other Currency Lender which enters into an Assignment and Acceptance (whether
as transferor Other Currency Lender or as assignee thereunder), the amount of such Other Currency Lender’s Other Currency Commitment after giving effect to such Assignment and Acceptance, or (iii) as to any Other Currency Lender which agrees to
increase its Other Currency Commitment pursuant to Section 2.16(a)(2), the amount of such Other Currency Commitment after giving effect to such increase, in each case as such amount may be reduced from time to time pursuant to Sections 2.08 and
2.09. 
  
 “Other Currency Issuing Bank” shall mean
Wachovia. 
  
 “Other Currency Lender” shall mean each
Bank listed on the signature pages hereof as having an Other Currency Commitment and their respective successors and assigns. 
  
 “Other Currency Lender Participation Share” of any amount means, at any time, the product of such amount times a fraction the numerator of which
is the amount of the Other Currency Lender’s Facility Commitment at such time and the denominator of which is the aggregate amount of the Facility Commitments of the Other Currency Lender and BB&T at such time; provided that if the Facility
Commitments are no longer in effect, the Other Currency Lender Participation Share shall be calculated at the moment immediately prior to such Facility Commitments not being in effect. 
  
 “Other Currency Letter of Credit” means the letters of credit issued by the Other Currency Issuing Bank pursuant
to Section 2.19(a) and “Other Currency Letter of Credit” means any one of such Other Currency Letters of Credit, as any of such letters of credit may be extended, renewed, replaced or amended from time to time. 
  
 “Other Currency Letter of Credit Advance” means an advance made by
the Other Currency Issuing Bank pursuant to Section 2.19(c). 
  
 “Other Currency Letter of Credit Agreement” means any agreement entered into by the Borrowers and the Other Currency Issuing Bank pursuant to which a Other Currency Letter of Credit is issued, as amended, modified or restated from
time to time. 
  

 18 

 “Other Currency Letter of Credit Commitment” means, with respect to each Bank, (i) the amount
designated as the Other Currency Letter of Credit Commitment set forth opposite the name of such Bank on the signature pages hereof, or (ii) as to any Bank which enters into an Assignment and Acceptance (whether as transferor Bank or as Assignee
thereunder), the amount of such Bank’s Other Currency Letter of Credit Commitment after giving effect to such Assignment and Acceptance, in each case as such amount may be reduced from time to time pursuant to Sections 2.08 and 2.09.

  
 “Other Currency Note” means the promissory note of
the Borrowers, substantially in the form of Exhibit E hereto, evidencing the obligation of the Borrowers to repay the Other Currency Advances, together with all amendments, consolidations, modifications, renewals and supplements thereto. 

 
 “Other Currency Overdraft Advance” means an Advance made to the
Company and the Non-U.S. Borrowers pursuant to the terms of the Other Currency Overdraft Facility Letter denominated in an Other Currency. 
  
 “Other Currency Overdraft Facility Letter” means the other currency overdraft facility letter dated on or about the date hereof and entered into
by the Company and the Non-U.S. Borrowers and Wachovia pursuant to which the Other Currency Lender agrees to make available to the Company and the Non-U.S. Borrowers up to a Dollar Equivalent Amount of $500,000 (subject to such amount being altered
from time to time pursuant to the terms thereof) provided that such amount shall from time to time be reduced to the extent that there is not at least a Dollar Equivalent Amount of available undrawn Other Currency Commitment to make Other Currency
Advances under this Agreement. 
  
 “Other Currency Quotation
Date” means: 
  
 (a) in relation to any Interest Period or
other period for an Other Currency Advance or other sum denominated in euros, the second Euro-Dollar Business Day before the first day of that Interest Period or other such period; and 
  
 (b) in relation to any Interest Period or other period for an Other Currency or other sum denominated in a currency other
than euros, the day on which interest rate quotations are ordinarily given by banks for delivery on the first day of the Interest Period or other such period; 
  

“Other Currency Undrawn Amount” means, with respect to any Other Currency Letter of Credit, at any time, the maximum amount available to be
drawn under such Other Currency Letter of Credit at such time and “Other Currency Undrawn Amounts” means, at any time, the sum of all Other Currency Undrawn Amounts at such time. 
  
 “Other Revolving Advance Lenders” means each Revolving Advance
Lender other than BB&T. 
  
 “Participant” has the
meaning set forth in Section 9.07(b). 
  
 “Participation
Excess” has the meaning set forth in Section 2.02(e). 
  

 19 

 “Participation Share” of any Participation Excess means, with respect to any Other Revolving
Advance Lender at any time, the product of such amount times a fraction the numerator of which is the amount of such Other Revolving Advance Lender’s Facility Commitment at such time and the denominator of which is the aggregate amount of the
Facility Commitments of all of the Other Revolving Advance Lenders at such time; provided that if the Facility Commitments are no longer in effect, the Participant Share shall be calculated at the moment immediately prior to such Facility Commitment
not being in effect. 
  
 “Patriot Act” means the Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. 107-56, signed into law October 26, 2001. 
  
 “PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions
under ERISA. 
  
 “Permitted Investments” means (a) (i)
direct obligations of the Governments of the United States, United Kingdom, Germany, France or Belgium maturing within one year, (ii) certificates of deposit issued by a commercial bank whose credit is satisfactory to the Administrative Agent, (iii)
commercial paper rated A-1 or the equivalent thereof by Standard & Poor’s Corporation or P-1 or the equivalent thereof by Moody’s Investors Service, Inc. and in either case maturing within 6 months after the date of acquisition, and
(iv) tender bonds the payment of the principal of and interest on which is fully supported by a letter of credit issued by a bank whose long-term certificates of deposit are rated at least AA or the equivalent thereof by Standard & Poor’s
Corporation and Aa or the equivalent thereof by Moody’s Investors Service, Inc.; and (b) other investments of equal quality and equivalent maturity available to investors in the European markets. 
  
 “Person” means an individual, a corporation, a limited liability
company, a partnership (including without limitation, a joint venture), an unincorporated association, a trust or any other entity or organization, including, but not limited to, a government or political subdivision or an agency or instrumentality
thereof. 
  
 “Plan” means at any time an employee
pension benefit plan which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code and is either (i) maintained by a member of the Controlled Group for employees of any member of the Controlled Group
or (ii) maintained pursuant to a collective bargaining agreement or any other arrangement under which more than one employer makes contributions and to which a member of the Controlled Group is then making or accruing an obligation to make
contributions or has within the preceding 5 plan years made contributions. 
  
 “Pledge Agreement” means collectively the Pledge Agreement(s), executed by the Pledgors for the benefit of the Administrative Agent, as agent for the Secured Parties, in accordance with Section 5.26.

  
 “Pledgors” means the pledgor(s) under the Pledge
Agreement, either collectively or individually, as the context shall require. 
  

 20 

 “Prime Rate” refers to that interest rate so denominated and set by BB&T from time to time
as an interest rate basis for borrowings. The Prime Rate is but one of several interest rate bases used by BB&T. BB&T lends at interest rates above and below the Prime Rate. 
  
 “Prime Rate Loan” means the Loan (or portions thereof) during Interest Periods when the Loan bears or is to bear
interest at a rate based upon the Prime Rate. 
  
 “Pro Rata
Facility Share” of any amount means, with respect to any Bank at any time, the product of such amount times a fraction the numerator of which is the amount of such Bank’s Facility Commitment at such time and the denominator of which is the
aggregate amount of the Facility Commitments of all of the Banks at such time; provided that if the Facility Commitments are no longer in effect, the Pro Rata Facility Share shall be calculated at the moment immediately prior to such Facility
Commitments not being in effect. 
  
 “Pro Rata Revolving
Advance Share” of any amount means, with respect to any Revolving Advance Lender at any time, the product of such amount times a fraction the numerator of which is the amount of such Revolving Advance Lender’s Revolving Advance Commitment
at such time and the denominator of which is the aggregate amount of the Revolving Advance Commitments of all of the Revolving Advance Lenders at such time; provided that if the Revolving Advance Commitments are no longer in effect, the Pro Rata
Revolving Advance Share shall be calculated at the moment immediately prior to such Facility Commitments not being in effect. 
  
 “Properties” means all real property owned, leased or otherwise used or occupied by a Loan Party or any Subsidiary of a Loan Party, wherever
located. 
  
 “Quarterly Payment Date” means March 31,
June 30, September 30 and December 31 of each year. 
  
 “Rate
Determination Date” has the meaning set forth in Section 2.06(a). 
  
 “Receivables” shall have the meaning assigned to the term “Accounts” in the Security Agreement. 
  
 “Redeemable Preferred Stock” of any Person means any preferred stock issued by such Person which is at any time prior to the Termination Date
either (i) mandatorily redeemable (by sinking fund or similar payments or otherwise) or (ii) redeemable at the option of the holder thereof. 
  
 “Required Banks” means at any time Banks having at least 66 2/3% of the aggregate amount of the Facility Commitments or, if the Facility Commitments are no longer in effect, Banks holding at least 66 2/3% of the aggregate outstanding principal amount of the Revolving Advances, Letter of Credit Facility Exposure,
Swing Line Exposure and Other Currency Advance Exposure. 
  
 “Required Revolving Advance Lenders” means at any time Revolving Advance Lenders having at least 66 2/3% of the aggregate amount of the Revolving Advance Commitments or, if the Revolving Advance Commitments are no longer in effect, Revolving Advance Lenders holding at least 66 2/3% of the aggregate outstanding principal amount of the Revolving Advances, Swing Line Exposure, U.S. Dollar Letter of Credit Advances and U.S. Dollar
Undrawn Amounts. 
  

 21 

 “Requirement of Law” shall mean, with respect to any Person, the charter, articles or
certificate of organization or incorporation and bylaws or other organizational or governing documents of such Person and any statute, law, treaty, rule, regulation, order, decree, writ, injunction or determination of any arbitrator or court or
other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject or otherwise pertaining to any or all of the transactions contemplated by this
Agreement and the other Credit Documents. 
  
 “Restatement
Effective Date” means July 16, 2004. 
  
 “Restricted
Payment” means (i) any dividend or other distribution on any shares of the Company’s capital stock (except dividends payable solely in shares of its capital stock) or (ii) any payment on account of the purchase, redemption, retirement or
acquisition of (a) any shares of the Company capital stock (except shares acquired upon the conversion thereof into other shares of its capital stock) or (b) any option, warrant or other right to acquire shares of the Company ‘s capital stock.

  
 “Revolving Advance” shall mean an advance made to
the U.S. Borrowers under this Agreement pursuant to Section 2.01 in Dollars. A Revolving Advance is a “Prime Rate Advance” if such Revolving Advance is part of a Prime Rate Borrowing or a “Euro-Dollar Advance” if such Revolving
Advance is part of a Euro-Dollar Borrowing. 
  
 “Revolving
Advance Commitment” means, with respect to each Revolving Advance Lender, (i) the amount set forth opposite the name of such Revolving Advance Lender on the signature pages hereof as its Revolving Advance Commitment, or (ii) as to any Revolving
Advance Lender which enters into an Assignment and Acceptance (whether as transferor Revolving Advance Lender or as assignee thereunder), the amount of such Revolving Advance Lender’s Revolving Advance Commitment after giving effect to such
Assignment and Acceptance, or (iii) as to any Revolving Advance Lender which agrees to increase its Revolving Advance Commitment pursuant to Section 2.01(b) and (c), the amount of such Revolving Advance Lender’s Revolving Advance Commitment
after giving effect to such increase, in each case as such amount may be reduced from time to time pursuant to Sections 2.08 and 2.09. 
  
 “Revolving Advance Lender” shall mean each Bank listed on the signature pages hereof as having a Revolving Advance Commitment and their
respective successors and assigns; provided, that unless the context otherwise requires, each reference herein to a Revolving Advance Lender shall be deemed to include a conduit lender. 
  
 “Revolving Advance Lender Letter of Credit Exposure” shall mean with respect to any Revolving Advance Lender at
any time, such Revolving Advance Lender’s Pro Rata Revolving Advance Share of the sum of (i) the aggregate U.S. Dollar Undrawn Amounts at such time; and (ii) the aggregate amount of all U.S. Dollar Letter of Credit Advances outstanding at such
time. 
  
 “Secured Parties” shall have the meaning set
forth in the Security Agreement. 
  

 22 

 “Security Agreement” means that certain Amended and Restated General Security Agreement dated
of even date herewith, by and between the U.S. Borrowers and Guarantors for the benefit of the Administrative Agent, as agent for the Secured Parties. 
  
 “Spot Rate” for any Other Currency means the rate quoted by an Other Currency Lender selected by the Administrative Agent as the spot rate for
the purchase by such Other Currency Lender of such Other Currency with Dollars through its foreign exchange trading office at approximately 11:00 a.m. (London time) on the date two Euro-Dollar Business Days prior to the date as of which the foreign
exchange computation is made. 
  
 “Sterling” and
“£” mean the lawful currency of the United Kingdom of Great Britain and Northern Ireland. 
  
 “Stockholders’ Equity” means, at any time, the shareholders’ equity of the Company and its Consolidated Subsidiaries, as set forth or
reflected on the most recent consolidated balance sheet of the Company and its Consolidated Subsidiaries prepared in accordance with GAAP, but excluding any Redeemable Preferred Stock of the Company or any of its Consolidated
Subsidiaries. Shareholders’ equity generally would include, but not be limited to (i) the par or stated value of all outstanding Capital Securities, (ii) capital surplus, (iii) retained earnings, and (iv) various deductions such as (A)
purchases of treasury stock, (B) receivables due from an employee stock ownership plan, (C) employee stock ownership plan debt guarantees, and (D) translation adjustments for foreign currency transactions. 
  
 “Subsidiary” means, with respect to any Person, any corporation or
other entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by such Person.
Unless otherwise specified a reference herein to a Subsidiary shall mean a Subsidiary of the Company. 
  
 “Swedish Krona” means the lawful currency of the Kingdom of Sweden as in effect from time to time. 
  
 “Swing Line Advance” means an advance made by the Swing Line Lender
pursuant to Section 2.15 hereof. 
  
 “Swing Line
Exposure” shall mean, with respect to any Revolving Advance Lender at any time, such Revolving Advance Lender’s Pro Rata Revolving Advance Share of the aggregate amount of all Swing Line Advances outstanding at such time. 
  
 “Swing Line Lender” means BB&T. 
  
 “Swing Line Note” means the promissory note of the U.S. Borrowers,
substantially in the form of Exhibit M hereto, evidencing the obligation of the U.S. Borrowers to repay the Swing Line Advance, together with all amendments, consolidations, modifications, renewals and supplements thereto. 
  
 “Swiss Francs” means the lawful currency of the Swiss Confederation
as in effect from time to time. 
  

 23 

 “TARGET” means the Trans-European Automated Real-time Gross Settlement Express Transfer System.

  
 “TARGET Day” means a day on which TARGET is
operating. 
  
 “Taxes” has the meaning set forth in
Section 2.12(c). 
  
 “Termination Date” means July 31,
2008. 
  
 “Textron Intercreditor Agreement” shall mean
that certain Intercreditor Agreement dated July 26, 2001, by and between the Administrative Agent and Textron Financial Corporation, either as originally executed or as it may be from time to time supplemented, modified, amended, renewed or
extended, as the context shall require. 
  
 “Total
Liabilities” means, at any time, the total liabilities of the Company and its Consolidated Subsidiaries, determined on a consolidated basis, as set forth or reflected on the most recent consolidated balance sheet of the Company and its
Consolidated Subsidiaries prepared in accordance with GAAP; provided that Total Liabilities shall not include any preferred stock that is not Redeemable Preferred Stock. 
  
 “Total Unused Commitments” means at any date, an amount equal to: (A) the aggregate amount of the Facility
Commitments of all of the Banks at such time, less (B) the sum of: (i) the aggregate outstanding principal amount of the Advances of all of the Banks at such time; (ii) the aggregate outstanding principal amount of all Letter of Credit Advances;
(iii) the aggregate outstanding principal amount of all Swing Line Advances; (iv) the aggregate outstanding principal amount of the Dollar Equivalent of all Other Currency Advances; and (v) the aggregate outstanding principal amount of all Undrawn
Amounts. 
  
 “Transferee” has the meaning set forth in
Section 9.07(d). 
  
 “type” means, relative to the Loan,
the portion thereof, if any, being maintained as a Euro-Dollar Loan or a Prime Rate Loan. 
  
 “UCC” means the Uniform Commercial Code as in effect from time to time in the State of South Carolina; provided that if, with respect to any financing statement or by reason of any provisions of law,
the perfection or the effect of perfection or non-perfection of the security interests granted to the Administrative Agent pursuant to the applicable Loan Document is governed by the Uniform Commercial Code as in effect in a jurisdiction of the
United States other than South Carolina, UCC means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions of each Loan Document and any financing statement relating to such perfection or
effect of perfection or non-perfection. 
  
 “UCC Recording
Office” means those certain locations and recording offices set forth on Schedule 1.01 - Collateral Locations, under the heading “UCC Recording Office”. 
  
 “Undrawn Amounts” means collectively the aggregate U.S. Dollar Undrawn Amounts and the aggregate Dollar Equivalent
of Other Currency Undrawn Amounts. 
  

 24 

 “Unused Commitment” means at any date: (1) with respect to any Other Revolving Advance Lender,
an amount equal to its Facility Commitment less the sum of: (i) the aggregate outstanding principal amount of its Revolving Advances (excluding Swing Line Advances); (ii) such Revolving Advance Lender’s Pro Rata Facility Share of the aggregate
outstanding principal amount of all U.S. Dollar Letter of Credit Advances; (iii) such Revolving Advance Lender’s Pro Rata Facility Share of the U.S. Dollar Undrawn Amounts; and (iv) the aggregate principal amount of the participations in
Revolving Advances held by such Revolving Advance Lender pursuant to Section 2.02(e) hereof); (2) with respect to BB&T, an amount equal to its Facility Commitment less the sum of: (i) the aggregate outstanding principal amount of its Revolving
Advances (excluding Swing Line Advances) less the aggregate principal amount of the participations in such Revolving Advances sold to other Banks pursuant to Section 2.02(e) hereof; (ii) BB&T’s Pro Rata Facility Share of the aggregate
outstanding principal amount of all U.S. Dollar Letter of Credit Advances; and (iii) BB&T’s Pro Rata Facility Share of the U.S. Dollar Undrawn Amounts; and (3) with respect to any Other Currency Lender an amount equal to its Facility
Commitment less the sum of: (i) the aggregate outstanding principal amount of the Dollar Equivalent of all Other Currency Advances; (ii) the aggregate outstanding principal amount of the Dollar Equivalent of all Other Currency Letter of
Credit Advances; (iii) the aggregate outstanding principal amount of the Dollar Equivalent of the Other Currency Undrawn Amounts; and (iv) the aggregate principal amount of the participations in Revolving Advances held by such Other Currency Lender
pursuant to Section 2.02(e) hereof. 
  
 “U.S. Borrowers”
means collectively: (i) the Company; (ii) Netpoint; (iii) each Consolidated Subsidiary that executes and delivers a New Borrower Joinder Agreement, as a U.S. Borrower pursuant to Section 2.20(a); and (iv) the respective successors and permitted
assigns of the foregoing. “U.S. Borrower” means any one of such U.S. Borrowers. 
  
 “U.S. Dollar Issuing Bank” shall mean BB&T. 
  
 “U.S. Dollar Letters of Credit” means the letters of credit issued by the U.S. Dollar Issuing Bank pursuant to Section 2.03(a) and “U.S. Dollar Letter of Credit” means any one of such U.S. Dollar
Letters of Credit, as any of such letters of credit may be extended, renewed, replaced or amended from time to time. 
  
 “U.S. Dollar Letter of Credit Advance” means an advance made by the U.S. Dollar Issuing Bank pursuant to Section 2.03(c). 
  
 “U.S. Dollar Letter of Credit Agreement” means any agreement
entered into by the U.S. Borrowers and the U.S. Dollar Issuing Bank pursuant to which a U.S. Dollar Letter of Credit is issued, as amended, modified or restated from time to time. 
  
 “U.S. Dollar Letter of Credit Commitment” means, with respect to each Bank, (i) the amount designated as the U.S.
Dollar Letter of Credit Commitment set forth opposite the name of such Bank on the signature pages hereof, or (ii) as to any Bank which enters into an Assignment and Acceptance (whether as transferor Bank or as assignee thereunder), the amount of
such Bank’s U.S. Dollar Letter of Credit Commitment after giving effect to such Assignment and Acceptance, in each case as such amount may be reduced from time to time pursuant to Sections 2.08 and 2.09. 
  

 25 

 “U.S. Dollar Undrawn Amount” means, with respect to any U.S. Dollar Letter of Credit, at any
time, the maximum amount available to be drawn under such U.S. Dollar Letter of Credit at such time and “U.S. Dollar Undrawn Amounts” means, at any time, the sum of all U.S. Dollar Undrawn Amounts at such time. 
  
 “U.S. Subsidiary” means any Subsidiary which is organized under the
laws of any state or territory of the United States of America. 
  
 “Wachovia” means Wachovia Bank, National Association, and its successors and assigns. 
  
 “Wholly Owned Subsidiary” means any Subsidiary all of the shares of capital stock or other ownership interests of which (except directors’
qualifying shares) are at the time directly or indirectly owned by the Company. 
  
 SECTION 1.02. Accounting Terms and Determinations. Unless otherwise specified herein, all terms of an accounting character used herein shall be interpreted, all accounting determinations hereunder shall be
made, and all financial statements required to be delivered hereunder shall be prepared in accordance with GAAP, applied on a basis consistent (except for changes concurred in by the Company’s independent public accountants or otherwise
required by a change in GAAP) with the most recent audited consolidated financial statements of the Company and its Consolidated Subsidiaries delivered to the Banks, unless with respect to any such change concurred in by the Company’s
independent public accountants or required by GAAP, in determining compliance with any of the provisions of this Agreement or any of the other Loan Documents: (i) the Company shall have objected to determining such compliance on such basis at the
time of delivery of such financial statements, or (ii) the Required Banks shall so object in writing within 30 days after the delivery of such financial statements, in either of which events such calculations shall be made on a basis consistent with
those used in the preparation of the latest financial statements as to which such objection shall not have been made (which, if objection is made in respect of the first financial statements delivered under Section 5.01 hereof, shall mean the
financial statements referred to in Section 4.04). 
  
 SECTION
1.03. Use of Defined Terms. All terms defined in this Agreement shall have the same meanings when used in any of the other Loan Documents, unless otherwise defined therein or unless the context shall otherwise require. 
  
 SECTION 1.04. Terminology. All personal pronouns used in this
Agreement, whether used in the masculine, feminine or neuter gender, shall include all other genders; the singular shall include the plural and the plural shall include the singular. Titles of Articles and Sections in this Agreement are for
convenience only, and neither limit nor amplify the provisions of this Agreement. 
  
 SECTION 1.05. References. Unless otherwise indicated, references in this Agreement to “Articles”, “Exhibits”, “Schedules”, and “Sections” are references to articles,
exhibits, schedules and sections hereof. 
  

 26 

 ARTICLE II 
  
 THE CREDITS 
  
 SECTION 2.01. Commitments to Make Revolving Advances. (a) Each Revolving Advance Lender severally agrees, on the terms and conditions set forth
herein, to make Revolving Advances to the U.S. Borrowers from time to time before the Termination Date; provided that, immediately after each such Revolving Advance is made: (1) the aggregate outstanding principal amount of Revolving Advances
by each Other Revolving Advance Lender together with: (i) such Other Revolving Advance Lender’s Pro Rata Revolving Advance Share of the aggregate outstanding principal amount of all U.S. Dollar Letter of Credit Advances, Swing Line Advances and
U.S. Dollar Undrawn Amounts, and (ii) the aggregate principal amount of the participations in Revolving Advances and U.S. Dollar Letter of Credit Advances held by such Other Revolving Advance Lender pursuant to Section 2.02(e) hereof shall not
exceed the amount of its Revolving Advance Commitment; (2) the aggregate principal amount of all Revolving Advances, together with the aggregate principal amount of all Letter of Credit Advances, Swing Line Advances, the Dollar Equivalent of Other
Currency Advances and Undrawn Amounts, shall not exceed the aggregate amount of the Facility Commitments of all of the Banks at such time; (3) the aggregate outstanding principal amount of all Revolving Advances by BB&T together with
BB&T’s Pro Rata Revolving Advance Share of the aggregate outstanding principal amount of all U.S. Dollar Letter of Credit Advances, Swing Line Advances, and U.S. Dollar Undrawn Amounts shall not exceed the amount of BB&T’s
Revolving Advance Commitment; and (4) the aggregate outstanding principal amount of all Revolving Advances by BB&T (less the aggregate principal amount of the participations in such amounts held by (or which can be sold upon BB&T’s
request to) other Banks pursuant to Section 2.02(e) hereof) together with BB&T’s Pro Rata Revolving Advance Share of the aggregate outstanding principal amount of all U.S. Dollar Letter of Credit Advances, Swing Line Advances and U.S.
Dollar Undrawn Amounts (less the aggregate principal amount of the participations in such amounts held by (or which can be sold upon BB&T’s request to) other Banks pursuant to Section 2.02(e) hereof) shall not exceed the amount of
BB&T’s Facility Commitment. Except as otherwise provided in an ACL Agreement, each Dollar Borrowing under this Section shall be in an aggregate principal amount of $500,000 or any larger multiple of $500,000 (except that any such Dollar
Borrowing may be in the aggregate amount of the Total Unused Commitments) and shall be made from the several Revolving Advance Lenders ratably in proportion to their respective Revolving Advance Commitments. Within the foregoing limits, the U.S.
Borrowers may borrow under this Section, repay or, to the extent permitted by Section 2.10, prepay Revolving Advances and reborrow under this Section at any time before the Termination Date. 
  
 (b) Subject to the terms and conditions set forth herein, the Borrowers shall
have the right, at any time and from time to time from the Restatement Effective Date until the Termination Date, to increase the total Revolving Advance Commitments (together with a corresponding increase in the Facility Commitment) in an amount of
at least $5,000,000 (or any larger multiple of $1,000,000) but not to exceed $30,000,000 (for a total maximum Revolving Advance Commitment (and Facility Commitment), assuming no reductions, of $130,000,000) in the aggregate. The following terms and
conditions shall apply to any such increase: (i) any such increase shall be obtained from existing Revolving Advance Lenders or from other banks or other financial institutions, in each case in accordance with the terms set forth below, (ii) the
Revolving Advance Commitment of any Revolving Advance Lender may not be increased 
  

 27 

 without the prior written consent of such Revolving Advance Lender, (iii) any increase in the aggregate Revolving Advance
Commitments shall be in a minimum principal amount of $5,000,000, (iv) the Loan Parties and Banks shall execute an acknowledgement in form and content satisfactory to the Administrative Agent to reflect the revised Revolving Advance Commitments (the
Banks do hereby agree to execute such acknowledgement unless the acknowledgement purports to increase the Commitment of a Bank without such Bank’s consent), (v) the Borrowers shall execute such Notes as are necessary to reflect the increase in
the Revolving Advance Commitments, (vi) if any Revolving Advances are outstanding at the time of any such increase, the Borrowers shall make such payments and adjustments on the Revolving Advances as necessary to give effect to the revised
commitment percentages and outstandings of the Revolving Advance Lenders, and (vii) the conditions set forth in Section 3.02 shall be true and correct. The amount of any increase in the Revolving Advance Commitments hereunder may be offered by the
Borrowers first to banks and financial institutions that are not a party to this Agreement as a Revolving Advance Lender (a “New Revolving Advance Financial Institution”) so long as such New Revolving Advance Financial Institution is
approved by the Administrative Agent (such approval not to be unreasonably withheld) and the Revolving Advance Commitment of any such New Revolving Advance Financial Institution (and the amount of the additional commitments requested by the
Borrowers which are allocated to the Revolving Advance Lenders then party to this Agreement) shall be acceptable to the Borrowers and the Administrative Agent. Any such New Financial Institution shall enter into such joinder agreements to give
effect thereto as the Administrative Agent and the Borrowers may reasonably request. 
  
 (c) Upon written request of the Borrowers, which shall be made in writing and delivered to the Administrative Agent on a Domestic Business Day after the Borrowers’ exercise of the rights provided in Section
2.01(b) and no fewer than 45 days prior to the proposed effective date, the Revolving Advance Lenders and the Administrative Agent in their sole and absolute discretion may (but shall not be obligated to) increase the total Revolving Advance
Commitments (together with a corresponding increase in the Facility Commitment) in an aggregate amount not to exceed $20,000,000. The terms of any increase in the total Revolving Advance Commitments shall be independently negotiated among the
Borrowers, the Revolving Advance Lenders and the Administrative Agent at the time of the Borrowers’ request, provided that the terms of the extension may be the same as those in effect prior to any increase should the Borrowers, the
Revolving Advance Lenders and the Administrative Agent so agree; provided, further, that should the terms of the increase be other than those in effect prior to the increase, then the Loan Documents shall be amended to the extent
necessary to incorporate any such different terms. In the event that a Revolving Advance Lender chooses to increase its Revolving Advance Commitment, notice shall be given by such Revolving Advance Lender to the Borrowers and the Administrative
Agent at least 15 days prior to the effective date proposed by the Borrowers; provided that the Revolving Advance Commitments shall not be increased with respect to any of the Revolving Advance Lenders (regardless of whether any relevant
Revolving Advance Lender has delivered a favorable increase notice) unless the Required Revolving Advance Lenders have delivered favorable increase notices and are willing to increase the total Revolving Advance Commitments (together with a
corresponding increase in the Facility Commitment) or have delivered written consents to such increase in the total Revolving Advance Commitments (together with a corresponding increase in the Facility Commitment). 
  

 28 

 SECTION 2.02. Method of Borrowing Advances. (a) Except as otherwise provided in an ACL Agreement,
Section 2.15 in the case of Swing Line Advances and Section 2.16 in the case of Other Currency Advances (other than Other Currency Overdraft Advances), the U.S. Borrowers shall give the Administrative Agent notice in the form attached hereto as
Exhibit B (a “Notice of Borrowing”) prior to 11:00 A.M. (Greenville, South Carolina time) on the Domestic Business Day of each Dollar Borrowing, specifying: 
  
 (i) the date of such Dollar Borrowing; and 
  
 (ii) the aggregate amount of such Dollar Borrowing. 
  
 (b) Except as provided in Section 2.02(d) of this Agreement, upon receipt of a Notice of Dollar Borrowing, the
Administrative Agent shall promptly notify each Revolving Advance Lender of the contents thereof and of such Revolving Advance Lender’s ratable share of such Dollar Borrowing and such Notice of Dollar Borrowing shall not thereafter be revocable
by the U.S. Borrowers. 
  
 (c) Except as provided in Section
2.02(d) of this Agreement, not later than 1:00 P.M. (Winston-Salem, North Carolina time) on the date of each Dollar Borrowing, each Revolving Advance Lender shall (except as provided in subsection (d) of this Section) make available its ratable
share of such Dollar Borrowing, in Federal or other funds immediately available in Winston-Salem, North Carolina, to the Administrative Agent at its address referred to in or specified pursuant to Section 9.01. Unless the Administrative Agent
determines that any applicable condition specified in Article III has not been satisfied, the Administrative Agent will make the funds so received from the Revolving Advance Lenders available to the U.S. Borrowers at the Administrative Agent’s
address in Greenville, South Carolina not later than 2:00 p.m. (Greenville, South Carolina time). Unless the Administrative Agent receives notice from a Revolving Advance Lender, at the Administrative Agent’s address referred to in Section
9.01, no later than 4:00 P.M. (local time at such address) on the Domestic Business Day before the date of a Dollar Borrowing stating that such Revolving Advance Lender will not make a Revolving Advance in connection with such Dollar Borrowing, the
Administrative Agent shall be entitled to assume that such Revolving Advance Lender will make a Revolving Advance in connection with such Dollar Borrowing and, in reliance on such assumption, the Administrative Agent may (but shall not be obligated
to) make available such Revolving Advance Lender’s ratable share of such Dollar Borrowing to the U.S. Borrowers for the account of such Revolving Advance Lender. If the Administrative Agent makes such Revolving Advance Lender’s ratable
share available to the U.S. Borrowers and such Revolving Advance Lender does not in fact make its ratable share of such Dollar Borrowing available on such date, the Administrative Agent shall be entitled to recover such Revolving Advance
Lender’s ratable share from such Revolving Advance Lender or the U.S. Borrowers (and for such purpose shall be entitled to charge such amount to any account of any U.S. Borrower maintained with the Administrative Agent), together with interest
thereon for each day during the period from the date of such Dollar Borrowing until such sum shall be paid in full at a rate per annum equal to the rate set forth in Section 2.06 for each such day during such period, provided that any such
payment by the U.S. Borrowers of such Revolving Advance Lender’s ratable share and interest thereon shall be without prejudice to any rights that the U.S. Borrowers may have against such Revolving Advance Lender. If such Revolving Advance
Lender shall repay to the Administrative Agent such corresponding amount, such amount so repaid shall constitute such Revolving Advance Lender’s Revolving Advance included in such Dollar Borrowing for purposes of this Agreement. 
  

 29 

 (d) At the Administrative Agent’s option and to facilitate the efficient administration of this
Agreement, the Administrative Agent shall be entitled to make settlements and adjustments on a weekly basis provided that: (1) all Dollar Borrowings, Revolving Advances and all payments of principal with respect to such Dollar Borrowings and
Revolving Advances shall be shared by the Revolving Advance Lenders ratably in proportion to their Revolving Advance Commitments and in accordance with this Agreement; and (2) all funds advanced by the Administrative Agent under this Agreement and
all funds received by the Administrative Agent under this Agreement shall be made or received, as the case may be, by the Administrative Agent, as agent on behalf of the Revolving Advance Lenders and shall not constitute separate loans or advances
made by the Administrative Agent. Unless the Administrative Agent receives notice from a Revolving Advance Lender, at the Administrative Agent’s address referred to in Section 9.01, no later than 4:00 P.M. (local time at such address) on the
Domestic Business Day before the date of a Dollar Borrowing stating that such Revolving Advance Lender will not make a Revolving Advance in connection with such Dollar Borrowing, the Administrative Agent may assume that each Revolving Advance Lender
will make a Revolving Advance in connection with each Dollar Borrowing and, in reliance on such assumption, the Administrative Agent may make available such Revolving Advance Lender’s ratable share of such Dollar Borrowing to the U.S. Borrowers
for the account of such Revolving Advance Lender. No later than 11:00 A.M. (Winston-Salem, North Carolina time) on Friday of each week the Administrative Agent shall advise each Revolving Advance Lender of its ratable share of the Dollar Borrowings
and payments made or received by the Administrative Agent for the period ending on the immediately preceding Wednesday. No later than 2:00 P.M. (Winston-Salem, North Carolina time) on such Friday the Administrative Agent and Revolving Advance
Lenders shall effect payments (and credits) so that all Dollar Borrowings, Revolving Advances and payments with respect to the Dollar Borrowings and U.S. Dollar Letters of Credit are shared by the Revolving Advance Lenders ratably; provided,
however, at any time, upon the request of the Administrative Agent, each Revolving Advance Lender shall, make its ratable share of any Dollar Borrowing available to the Administrative Agent on demand but in no event later than one Domestic Business
Day following the Administrative Agent’s demand; and (2) the Administrative Agent shall be entitled to recover such Revolving Advance Lender’s ratable share of each Dollar Borrowing from such Revolving Advance Lender, together with
interest thereon for each day during the period from the date of any such demand until such sum shall be paid in full at a rate per annum equal to the rate set forth in Section 2.06. Each Revolving Advance Lender’s obligation under this Section
2.02(d) shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation: (i) any setoff, counterclaim, recoupment, defense or other right which such Revolving Advance Lender or any other Person may
have against the Administrative Agent requesting such adjustment or payment or any other Person for any reason whatsoever; (ii) the occurrence or continuance of a Default or an Event of Default or the termination of any Commitment (including,
without limitation, any Facility Commitment, Revolving Advance Commitment or Other Currency Commitment) (whether by a Borrower pursuant to Section 2.08 or by the Administrative Agent pursuant to Section 6.01 or otherwise); (iii) any adverse change
in the condition (financial or otherwise) of any Borrower, any Guarantor or any other Person; (iv) the failure to satisfy any condition set forth in Section 3.01, 3.02, 3.03 or 3.04; (v) any breach of this Agreement or any of the other Loan
Documents by any Borrower, any Guarantor or any other Bank; or (vi) any other circumstance, happening or event whatsoever whether or not similar to any of the foregoing. 
  

 30 

 (e) Participations in Revolving Advances Made by BB&T. (1) Subject to clause (2) below, at any
time and from time to time, upon written demand by BB&T, with a copy to the Administrative Agent, the Other Currency Lender shall purchase from BB&T and BB&T shall sell to the Other Currency Lender, a participation interest in each
Revolving Advance and each U.S. Dollar Letter of Credit Advance (after giving effect to the sale by BB&T of participations in such U.S. Dollar Letter of Credit Advance pursuant to Section 2.03(c)) equal to the Other Currency Lender Participation
Share of each Revolving Advance and U.S. Dollar Letter of Credit Advance as of the date of such purchase. 
  
 (2) If any participation required to be purchased by the Other Currency Lender pursuant to clause (1) above would result in the sum of (A) the Other
Currency Advances made by such Other Currency Lender plus (B) the Other Currency Lender’s Pro Rata Other Currency Share of the Other Currency Letters of Credit Advances and the Other Currency Undrawn Amounts to exceed the Other Currency
Commitment of such Other Currency Lender (the amount of any such excess being hereinafter referred to as the “Participation Excess”), then (x) such Other Currency Lender shall not be required to purchase such participations to the extent
of the Participation Excess and (y) each Other Revolving Advance Lender shall purchase from BB&T and BB&T shall sell to each Other Revolving Advance Lender, a participation interest in each Revolving Advance and each U.S. Dollar Letter of
Credit Advance (after giving effect to the sale by BB&T of participations in such U.S. Dollar Letter of Credit Advance pursuant to Section 2.03(c)) equal to such Other Revolving Advance Lender’s Participation Share of the Participation
Excess. 
  
 (3) In the event that any Other Currency Lender has
purchased any participation pursuant to this Section 2.02(e) and thereafter any Borrower makes a request for a Other Currency Advance or for the issuance of an Other Currency Letter of Credit at a time when the making of such Other Currency Advance
or the issuance of such Other Currency Letter of Credit would result in the creation of a Participation Excess, then upon written demand by such Other Currency Lender, with a copy to BB&T and the Administrative Agent, each Other Revolving
Advance Lender shall purchase from such Other Currency Lender and such Other Currency Lender shall sell to each Other Revolving Advance Lender participations held by the Other Currency Lender in the Revolving Advances and the U.S. Dollar Letter of
Credit Advance equal to such Other Revolving Advance Lender’s Participation Share of the Participation Excess; provided that: (1) the Administrative Agent may allocate among the Revolving Advance Lenders such participations in the Participation
Excess as the Administrative Agent determines; and (2) BB&T shall have the option, but not an obligation, to purchase such portion of the Participation Excess as BB&T may elect. 
  
 (4) Any Bank required to purchase a participation pursuant to this Section 2.02(e), shall make available to the
Administrative Agent for the account of BB&T or the Other Currency Lender, as the case may be, in Federal or other funds immediately available an amount equal to the Participation Share of the outstanding principal amount of such Revolving
Advances and U.S. Dollar Letter of Credit Advances. Promptly after receipt thereof, the Administrative Agent shall transfer such funds to BB&T or the Other Currency Lender, as appropriate. The Borrowers hereby agree to each such sale and
purchase of participation interests in Revolving 
  

 31 

 Advances and U.S. Dollar Letter of Credit Advances outstanding from time to time. Each Bank agrees to purchase its
participation interest in each outstanding Revolving Advance and U.S. Dollar Letter of Credit Advance on (i) the Domestic Business Day on which demand therefor is made by BB&T or the Other Currency Lender, as applicable, provided notice of such
demand is given not later than 1:00 P.M. (Greenville, South Carolina time) on such Domestic Business Day or (ii) the first Domestic Business Day next succeeding the date of such demand if notice of such demand is given after 1:00 P.M. (Greenville,
South Carolina time) on any Domestic Business Day. BB&T and the Other Currency Lender makes no representation or warranty and assumes no responsibility with respect to any sale and purchase of a participation interest by it in any Revolving
Advance or U.S. Dollar Letter of Credit Advance. If and to the extent that any Bank required to purchase a participation pursuant to this Section 2.02(e) shall not have so made the amount available to the Administrative Agent in connection with its
purchase of a participation interest in any Revolving Advance or U.S. Dollar Letter of Credit Advance, such Bank agrees to pay to BB&T or the Other Currency Lender, as the case may be, forthwith on demand such amount together with interest
thereon, for each day from the date of demand by BB&T or the Other Currency Lender, until the date such amount is paid to BB&T or the Other Currency Lender, as the case may be, at the Federal Funds Rate for their own account. 
  
 (5) The obligation of the Other Revolving Advance Lenders and the Other
Currency Lender to purchase a participation interest in each Revolving Advance and U.S. Dollar Letter of Credit Advance pursuant to this Section 2.02(e) shall be absolute and unconditional and shall not be affected by any circumstance, including,
without limitation: (i) any set off, counterclaim, recoupment, defense or other right which any Bank or any other Person may have against BB&T or the Other Currency Lender requesting such purchase or any other Person for any reason whatsoever;
(ii) the occurrence or continuance of a Default or an Event of Default or the termination of any Commitment (including, without limitation, any Facility Commitment, Revolving Advance Commitment or Other Currency Commitment) (whether by a Borrower
pursuant to Section 2.08 or by the Administrative Agent pursuant to Section 6.01 or otherwise); (iii) any adverse change in the condition (financial or otherwise) of any Borrower, any Guarantor or any other Person; (iv) the failure to satisfy any
condition set forth in Section 3.01, 3.02, 3.03 or 3.04; (v) any breach of this Agreement or any other Loan Document by any Borrower, any Guarantor or any other Bank; or (vi) any other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing. 
  
 (6) The failure of any Bank
to purchase a participation interest required of it in any U.S. Dollar Letter of Credit Advance shall not relieve any other Bank of its obligation under Section 2.03(c) to purchase its participation interest in any U.S. Dollar Letter of Credit
Advance on such date, but no Bank shall be responsible for the failure of any other Bank to so purchase a participation interest on such date. 
  
 (7) The Administrative Agent will promptly distribute to each Other Revolving Advance Lender and Other Currency Lender its ratable share of any payment of
principal of or interest on any Revolving Advance and U.S. Dollar Letter of Credit Advance received by the Administrative Agent; provided, however, that in the event that such payment received by the Administrative Agent is required to be returned,
the Other Revolving Advance Lender and Other Currency Lender will return to the Administrative Agent any portion thereof previously distributed by the Administrative Agent to it. 
  

 32 

 SECTION 2.03. U.S. Dollar Letters of Credit. 
  
 (a) The U.S. Dollar Issuing Bank may, from time to time upon request of the
U.S. Borrowers, in its sole discretion issue Letters of Credit denominated in Dollars for the account of the U.S. Borrowers, subject to satisfaction of the conditions referenced in Section 3.03. 
  
 (b) Each U.S. Dollar Letter of Credit shall be subject to the provisions of
this Agreement and to the provisions set forth in the U.S. Dollar Letter of Credit Agreement executed by the U.S. Borrowers in connection with the issuance of such U.S. Dollar Letter of Credit. The U.S. Borrowers agree to promptly perform and comply
with the terms and conditions of each Letter of Credit Agreement. 
  
 (c) The payment by the U.S. Dollar Issuing Bank of a draft drawn under any U.S. Dollar Letter of Credit shall constitute for all purposes of this Agreement a U.S. Dollar Letter of Credit Advance in the amount of such draft. Upon written
demand by the U.S. Dollar Issuing Bank, with a copy to the Administrative Agent, each Revolving Advance Lender shall purchase from the U.S. Dollar Issuing Bank, and the U.S. Dollar Issuing Bank shall sell to each Revolving Advance Lender, a
participation interest in such U.S. Dollar Letter of Credit Advance equal to such Revolving Advance Lender’s Pro Rata Revolving Advance Share of such U.S. Dollar Letter of Credit Advance as of the date of such purchase, by making available to
the Administrative Agent for the account of the U.S. Dollar Issuing Bank, in Federal or other funds immediately available an amount equal to such Revolving Advance Lender’s Pro Rata Revolving Advance Share of the outstanding principal amount of
such U.S. Dollar Letter of Credit Advance. Promptly after receipt thereof, the Administrative Agent shall transfer such funds to the U.S. Dollar Issuing Bank. The U.S. Borrowers hereby agree to each such sale and purchase of participation interests
in U.S. Dollar Letter of Credit Advances outstanding from time to time. Each Revolving Advance Lender agrees to purchase its participation interest in an outstanding U.S. Dollar Letter of Credit Advance on (i) the Domestic Business Day on which
demand therefor is made by the U.S. Dollar Issuing Bank, provided notice of such demand is given not later than 1:00 P.M. (Winston-Salem, North Carolina time) on such Domestic Business Day or (ii) the first Domestic Business Day next succeeding the
date of such demand if notice of such demand is given after 1:00 P.M. (Winston-Salem, North Carolina time) on any Domestic Business Day. The U.S. Dollar Issuing Bank makes no representation or warranty and assumes no responsibility with respect to
any sale and purchase of a participation interest in any U.S. Dollar Letter of Credit Advance. If and to the extent that any Revolving Advance Lender shall not have so made the amount available to the Administrative Agent in connection with its
purchase of a participation interest in any U.S. Dollar Letter of Credit Advance, such Revolving Advance Lender agrees to pay to the Administrative Agent forthwith on demand such amount together with interest thereon, for each day from the date of
demand by the Issuing Bank, until the date such amount is paid to the Administrative Agent, at the Federal Funds Rate for the account of the U.S. Dollar Issuing Bank. 
  
 (d) The obligation of each Revolving Advance Lender to purchase a participation interest in any U.S. Dollar Letter of Credit
Advance pursuant to Section 2.03(c) shall be unconditional and absolute and shall not be affected by any circumstance, including, without limitation: (i) any setoff, counterclaim, recoupment, defense or other right which the Revolving Advance Lender
or any other Person may have against BB&T requesting such 
  

 33 

 purchase or any other Person for any reason whatsoever; (ii) the occurrence or continuance of a Default or an Event of
Default or the termination of any Commitment (including, without limitation, any Facility Commitment, Revolving Advance Commitment or Other Currency Commitment) (whether by a Borrower pursuant to Section 2.08 or by the Administrative Agent pursuant
to Section 6.01 or otherwise); (iii) any adverse change in the condition (financial or otherwise) of any Borrower, any Guarantor or any other Person; (iv) the failure to satisfy any condition set forth in Section 3.01, 3.02, 3.03 or 3.04; (v) any
breach of this Agreement or any other Loan Document by any Borrower, any Guarantor or any other Bank; or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. 
  
 (e) The U.S. Dollar Issuing Bank shall furnish (A) to the Administrative
Agent and each Bank on the tenth Domestic Business Day of each April, July, October and January, a written report summarizing the issuance and expiration dates of U.S. Dollar Letters of Credit issued during the preceding calendar quarter and (B) to
the Administrative Agent and each Bank upon request a written report setting forth the aggregate U.S. Dollar Undrawn Amounts. 
  
 (f) The failure of any Revolving Advance Lender to purchase a participation interest in any U.S. Dollar Letter of Credit Advance shall not relieve any
other Revolving Advance Lender of its obligation hereunder to purchase its participation interest in any U.S. Dollar Letter of Credit Advance on such date, but no Revolving Advance Lender shall be responsible for the failure of any other Revolving
Advance Lender to so purchase a participation interest on such date. 
  
 (g) The U.S. Borrowers shall pay to the Administrative Agent for the account of each Revolving Advance Lender that has purchased a participation interest in a U.S. Dollar Letter of Credit Advance on the earlier of demand and the Termination
Date the outstanding principal amount of such U.S. Dollar Letter of Credit Advance. The Administrative Agent will promptly distribute to each Revolving Advance Lender its ratable share of any payment of principal of or interest on any U.S. Dollar
Letter of Credit Advance received by the Administrative Agent; provided, however, that in the event that such payment received by the Administrative Agent is required to be returned, such Revolving Advance Lender will return to the Administrative
Agent any portion thereof previously distributed by the Administrative Agent to it. 
  
 (h) The U.S. Dollar Issuing Bank will notify the Borrower and the Administrative Agent promptly of the presentment for payment of any U.S. Dollar Letter of Credit, together with notice of the date such payment shall
be made, and the Administrative Agent promptly will notify the Revolving Advance Lenders of such matters. 
  
 (i) In the event that the U.S. Dollar Issuing Bank makes any payment under any U.S. Dollar Letter of Credit, unless otherwise instructed by the U.S.
Borrowers in writing on or before the date of such payment under the U.S. Dollar Letter of Credit, the U.S. Borrowers shall be deemed to have delivered a Notice of Borrowing to the Administrative Agent requesting a Dollar Borrowing pursuant to
Section 2.02 on the date (and time) of such U.S. Dollar Letter of Credit Advance. The U.S. Borrowers hereby authorize each Revolving Advance Lender to make such Revolving Advance. 
  

 34 

 SECTION 2.04. Notes. (a) The Revolving Advances of each Revolving Advance Lender shall be
evidenced by a single Note payable to the order of such Revolving Advance Lender for the account of its Lending Office in an amount equal to the original principal amount of such Revolving Advance Lender’s Revolving Advance Commitment.

  
 (b) (1) The Swing Line Advances made by the Swing Line Lender
to the U.S. Borrowers shall be evidenced by a single Swing Line Note payable to the order of the Swing Line Lender; and (2) the Other Currency Advances made by the Other Currency Lender to the Borrowers (other than Other Currency Overdraft Advances)
shall be evidenced by a single Other Currency Note payable to the order of the Other Currency Lender. 
  
 (c) Upon receipt of each Bank’s Note pursuant to Section 3.01, the Administrative Agent shall deliver such Note to such Bank. Each Bank shall record,
and prior to any transfer of its Note shall endorse on the schedule forming a part thereof appropriate notations to evidence, the date, amount and maturity of, and effective interest rate for, each Advance made by it, the date and amount of each
payment of principal made by the Borrowers with respect thereto and such schedule shall constitute rebuttable presumptive evidence of the principal amount owing and unpaid on such Bank’s Note; provided that the failure of any Bank to
make, or any error in making, any such recordation or endorsement shall not affect the obligation of any Borrower hereunder or under the Note or the ability of any Bank to assign its Note. Each Bank is hereby irrevocably authorized by the Borrowers
so to endorse its Note and to attach to and make a part of any Note a continuation of any such schedule as and when required. 
  
 SECTION 2.05. Maturity of Loans. (a) Each Revolving Advance included in any Dollar Borrowing and each Swing Line Advance shall mature, and the
principal amount thereof shall be due and payable, subject to Section 6.01, on the Termination Date. 
  
 (b) Each Other Currency Advance shall mature, and the principal amount thereof shall be due and payable, subject to Section 6.01, on the
Termination Date. 
  
 SECTION 2.06. Interest Rates. (a)
“Applicable Margin” shall be determined quarterly based upon the ratio of Consolidated Funded Debt (calculated as of the last day of each Fiscal Quarter) to Consolidated EBITDA (calculated as of the last day of each Fiscal Quarter for the
Fiscal Quarter then ended and the immediately preceding three Fiscal Quarters), as follows: 
  

							
	 Ratio of Consolidated Funded
 Debt to
Consolidated EBITDA

	  	 Euro-Dollar Loans and
 Letters of Credit

	 	 	 Prime
 Rate Loans

	 
	 Greater than or equal to 2.00
	  	1.75	%	 	0.75	%
	 Greater than or equal to 1.50 but less than 2.00
	  	1.50	%	 	0.50	%
	 Greater than or equal 1.00 but less than 1.50
	  	1.00	%	 	0.25	%
	 Less than 1.00
	  	0.75	%	 	0	%

  
 The Applicable Margin
shall be effective as of the date (herein, the “Rate Determination Date”) which is 45 days after the last day of the Fiscal Quarter as of the end of 
  

 35 

 which the Ratio of Consolidated Funded Debt to Consolidated EBITDA is being determined, based on the quarterly financial
statements for such Fiscal Quarter, and the Applicable Margin so determined shall remain effective from such Rate Determination Date until the date which is 45 days after the last day of the Fiscal Quarter in which such Rate Determination Date falls
(which latter date shall be a new Rate Determination Date); provided that (i) for the period from and including the Restatement Effective Date to but excluding the Rate Determination Date next following the Restatement Effective Date, the
Applicable Margin shall be .75% for a Euro-Dollar Loan and Letters of Credit, (ii) in the case of any Applicable Margin determined on the basis of the Ratio of Consolidated Funded Debt to Consolidated EBITDA for the fourth and final Fiscal Quarter
of a Fiscal Year, the Applicable Margin for the period beginning on the Rate Determination Date immediately after the last day of such fourth and final Fiscal Quarter and continuing until the date which is 90 days after the last day of such final
Fiscal Quarter (the “Adjustment Date”) shall be the Applicable Margin in effect on the last day of such final Fiscal Quarter but such Applicable Margin shall be adjusted on such Adjustment Date and thereafter until the next Rate
Determination Date such Applicable Margin shall be determined based upon the annual audited financial statements for the Fiscal Year ended on the last day of such final Fiscal Quarter, (iii) if the Applicable Margin for the fourth and final Fiscal
Quarter as determined on the Adjustment Date shall be different from the Applicable Margin for such date determined on the Rate Determination Date for such fourth Fiscal Quarter, such redetermined Applicable Margin shall be effective retroactive to
the Rate Determination Date, and the Borrowers, the Administrative Agent and the Banks, as applicable, shall within 10 days of such redetermination, make a payment (in the case of amounts owing by the Borrowers to the Banks) or provide a credit
applicable to future amounts payable by the Borrowers hereunder (in the case of amounts owing by the Banks to the Borrowers) equal to the difference between the interest and letter of credit fees actually paid under this Agreement and the interest
and fees that would have been paid under this Agreement had the Applicable Margin as originally determined been equal to the Applicable Margin as redetermined; and (iv) if on any Rate Determination Date (or in the case of the fourth Fiscal Quarter,
the Adjustment Date) the Company shall have failed to deliver to the Bank the financial statements required to be delivered pursuant to Section 5.01(a) or Section 5.01(b) with respect to the Fiscal Year or Fiscal Quarter, as the case may be, most
recently ended prior to such Rate Determination Date (or in the case of the fourth Fiscal Quarter, the Adjustment Date), then for the period beginning on such Rate Determination Date (and in the case of the fourth Fiscal Quarter, the Rate
Determination Date immediately preceding the Adjustment Date) and ending on the earlier of (A) the date on which the Company shall deliver to the Banks the financial statements to be delivered pursuant to Section 5.01(b) with respect to such Fiscal
Quarter or any subsequent Fiscal Quarter, or (B) the date on which the Company shall deliver to the Banks annual financial statements required to be delivered pursuant to Section 5.01(a) with respect to the Fiscal Year which includes such Fiscal
Quarter or any subsequent Fiscal Year, the Advances shall bear interest at a rate per annum determined as if the ratio of Consolidated Funded Debt to Consolidated EBITDA was more than 2.00 at all times during such period; provided that at the
election of the Required Banks, the principal amount of the Advances shall bear interest at the Default Rate. Any change in the Applicable Margin on any Rate Determination Date shall result in a corresponding change, effective on and as of such Rate
Determination Date, in the interest rate applicable to the Advances and in the fees applicable to each Letter of Credit outstanding on such Rate Determination Date; provided, that no Applicable Margin shall be decreased pursuant to this Section 2.06
if a Default is in existence on the Rate Determination Date. 
  

 36 

 (b) During each Interest Period in which the Advances are a Prime Rate Loan, such Prime Rate Loan shall
bear interest on the outstanding principal amount thereof, for each day during the applicable Interest Period, at a rate per annum equal to the Prime Rate for such day plus the Applicable Margin for Prime Rate Loans. Any overdue principal of and, to
the extent permitted by applicable law, overdue interest on any Prime Rate Loan shall bear interest, payable on demand, for each day until paid in full at a rate per annum equal to the Default Rate. 
  
 (c) During each Interest Period in which the Advances are a Euro-Dollar Loan,
such Euro-Dollar Loan shall bear interest on the outstanding principal amount thereof, for the Interest Period applicable thereto, at a rate per annum equal to the sum of: (1) the Applicable Margin for Euro-Dollar Loans, plus (2) the applicable
Adjusted Monthly Libor Index for such Interest Period. Any overdue principal of and, to the extent permitted by applicable law, overdue interest on any Euro-Dollar Loan shall bear interest, payable on demand, for each day until paid in full at a
rate per annum equal to the Default Rate. 
  
 The “Adjusted
Monthly Libor Index” applicable to any Interest Period means a rate per annum equal to (A) in the case of a Euro-Dollar Loan denominated in Dollars: the quotient obtained (rounded upward, if necessary, to the next higher 1/100th of 1%) by
dividing (i) the applicable London Interbank Offered Rate for such Interest Period by (ii) 1.00 minus the Euro-Dollar Reserve Percentage; and (B) in the case of a Euro-Dollar Loan denominated in an Other Currency, the sum (rounded upward, if
necessary to the next higher 1/100th of 1%) of (i) the applicable London Interbank Offered Rate for such Interest
Period, plus (ii) the Additional Costs. 
  
 The “London
Interbank Offered Rate” applicable to any Euro-Dollar Loan means for the Interest Period of such Euro-Dollar Loan the rate per annum determined on the basis of the rate for deposits in Dollars (of amounts selected by the Administrative Agent in
its reasonable discretion) offered for a term comparable to such Interest Period, which rate appears, in the case of Dollars, on the display designated as Page “3750” of the Telerate Service and, in the case of Other Currency, the
appropriate page of the Telerate screen which displays British Bankers Association Interest Settlement Rates for deposits in the relevant Other Currency (or in each case such other page or service as may replace such page on such service or system
for the purpose of displaying rates) (or, in each case, if more than one rate appears on such screen, the arithmetic mean for all such rates rounded upward to the next higher 1/100th of 1%) as the London interbank offered rate for deposits in the applicable currency at approximately 11:00 A.M. London time on: (i) in the case of a Revolving
Advance or Swing Line Advance, the first day of such Interest Period or on the immediately preceding Euro-Dollar Business Day if the first day of such Interest Period is not a Euro-Dollar Business Day; and (ii) in the case of an Other Currency
Advance (other than an Other Currency Overdraft Advance) two Euro-Dollar Business Days prior to the beginning of the Interest Period. If, for any reason, such rate does not appear on Telerate Page 3750, or the appropriate page of the Telerate screen
which displays British Bankers Association Interest Settlement Rates for deposits in the relevant Other Currency, then the “London Interbank Offered Rate” shall be determined by the Administrative Agent to be the arithmetic average of the
rate per annum at which deposits in the relevant currency in which the applicable Euro-Dollar Loan is denominated would be offered by HSBC Bank plc, Barclays Bank plc, and Lloyds Bank Limited in the London interbank market to the Administrative
Agent (or such Other Currency Lender as the Administrative Agent may specify) at approximately 11.00 AM London time (i) in the case of a Revolving Advance or Swing Line Advance, the first 
  

 37 

 day of such Interest Period or on the immediately preceding Euro-Dollar Business Day if the first day of such Interest
Period is not a Euro-Dollar Business Day; and (ii) in the case of an Other Currency Advance (other than an Other Currency Overdraft Advance) two Euro-Dollar Business Days prior to the beginning of the Interest Period. 
  
 “Euro-Dollar Reserve Percentage” means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement for a member bank of the Federal Reserve System in
respect of “Eurocurrency liabilities” (or in respect of any other category of liabilities which includes deposits by reference to which the interest rate on such Euro-Dollar Loan is determined or any category of extensions of credit or
other assets which includes loans by a non-United States office of any Bank to United States residents). The Adjusted Monthly Libor Index shall be adjusted automatically on and as of the effective date of any change in the Euro-Dollar Reserve
Percentage. 
  
 (d) The Advances shall at all times be a
Euro-Dollar Loan unless the Advances are to be a Prime Rate Loan pursuant to Article VIII herein. Interest that accrues on Revolving Advances shall be payable on each Interest Payment Date; provided that: (1) all accrued unpaid interest on the
Revolving Advances shall be paid in full on the Termination Date; and (2) should any of the Commitments (including, without limitation, the Revolving Commitment, the Other Currency Commitment or the Facility Commitment) be terminated at any time
prior to the Termination Date for any reason, any and all accrued unpaid interest (together with any amounts due under Section 8.05(a)) shall be paid on the date of such termination. 
  
 (e) Each Letter of Credit Advance shall bear interest on the outstanding principal amount thereof, payable on demand, for
each day from the date such Letter of Credit Advance is made until paid in full at a rate per annum equal to the Default Rate. 
  
 (f) The Administrative Agent shall determine each interest rate applicable to the Advances hereunder. The Administrative Agent shall give prompt notice to
the Borrowers and the Banks by telecopy of each rate of interest so determined, and its determination thereof shall be conclusive in the absence of manifest error. 
  
 (g) After the occurrence and during the continuance of a Default, the principal amount of the Advances (excluding the Swing
Line Advances) (and, to the extent permitted by applicable law, all accrued interest thereon) may, at the election of the Required Banks, bear interest at the Default Rate; provided, however, that automatically whether or not the Required Banks
elect to do so, any overdue principal of and, to the extent permitted by law, overdue interest on the Advances (excluding the Swing Line Advances) shall bear interest payable on demand, for each day until paid at a rate per annum equal to the
Default Rate. 
  
 (h) Except as otherwise agreed upon by the Swing
Line Lender and the U.S. Borrowers, such interest that accrues on Swing Line Advances shall be payable on each Interest Payment Date; provided that: (1) all accrued unpaid interest on the Swing Line Advances shall be paid in full on the Termination
Date; and (2) should any of the Commitments be terminated at any time prior to the Termination Date for any reason, any and all accrued unpaid interest (together with any amounts due under Section 8.05(a)) shall be paid on the date of such

  

 38 

 termination. Any overdue principal of and, to the extent permitted by applicable law, overdue interest on the Swing Line
Advances may, at the election of the Swing Line Lender, bear interest, payable on demand, for each day until paid at a rate per annum equal to the Default Rate. 
  

(i) Interest that accrues on Other Currency Advances (other than Other Currency Overdraft Advances) shall be payable for each Interest Period on the
last day thereof and, if such Interest Period is longer than 3 months, at intervals of 3 months after the first day thereof; provided that: (1) all accrued unpaid interest on such Other Currency Advances shall be paid in full on the Termination
Date; and (2) should any of the Commitments (including, without limitation, the Revolving Commitment, the Other Currency Commitment or the Facility Commitment) be terminated at any time prior to the Termination Date for any reason, any and all
accrued unpaid interest (together with any amounts due under Section 8.05(a)) shall be paid on the date of such termination. 
  
 SECTION 2.07. Fees. (a) The Borrower shall pay to the Administrative Agent for the account of the Banks a non-utilization fee equal to the product
of: (i) the aggregate of the daily average amounts of the Aggregate Unused Commitments, times (ii) a per annum percentage equal to the Applicable Non-Utilization Fee Rate. Such non-utilization fee shall accrue from and including the Restatement
Effective Date to and including the Termination Date. Non-Utilization fees shall be payable quarterly in arrears on the first Quarterly Payment Date following each Non-Utilization Fee Determination Date and on the Termination Date; provided that
should any of the Commitments (including, without limitation, the Revolving Commitment, the Other Currency Commitment or the Facility Commitment) be terminated at any time prior to the Termination Date for any reason, the entire accrued and unpaid
fee shall be paid on the date of such termination. The Administrative Agent will promptly distribute to each Bank a share of the Non-Utilization Fee received by the Administrative Agent in an amount equal to the Non-Utilization Fee received by the
Administrative Agent multiplied by a fraction the numerator of which shall be such Bank’s daily average Unused Commitment for the applicable period and the denominator of which shall be the aggregate of the daily average amounts of the Unused
Commitments of all Banks for the applicable period. The “Applicable Non-Utilization Fee Rate” shall be determined quarterly based upon the ratio of Consolidated Funded Debt (calculated as of the last day of each Fiscal Quarter) to
Consolidated EBITDA (calculated as of the last day of each Fiscal Quarter for the Fiscal Quarter then ended and the immediately preceding three Fiscal Quarters) as follows: 
  

				
	 Ratio of Consolidated
 Funded
Debt
 to Consolidated EBITDA

	  	 Applicable
 Non-Utilization
 Fee Rate

	 
	 less than 1.00
	  	0.20	%
	 Greater than or equal to 1.00 but less than 1.50
	  	0.25	%
	 Greater than or equal to 1.50 but less than 2.00
	  	0.30	%
	 Greater than or equal to 2.00
	  	0.35	%

  
 The Applicable Non-Utilization Fee
Rate shall be determined effective as of the date (herein, the “Non-Utilization Fee Determination Date”) which is 45 days after the last day of the Fiscal Quarter as of the end of which the Ratio of Consolidated Funded Debt to Consolidated
EBITDA is being determined, based on the quarterly financial statements for such Fiscal Quarter, and the 
  

 39 

 Applicable Non-Utilization Fee Rate so determined shall remain effective from such Non-Utilization Fee Determination Date
until the date which is 45 days after the last day of the Fiscal Quarter in which such Non-Utilization Fee Determination Date falls (which latter date shall be a new Non-Utilization Fee Determination Date); provided that (i) for the period
from and including the Restatement Effective Date to but excluding the Non-Utilization Fee Determination Date next following the Restatement Effective Date, the Applicable Non-Utilization Fee Rate shall be 0.20%; (ii) in the case of any Applicable
Non-Utilization Fee Rate determined on the basis of the Ratio of Consolidated Funded Debt to Consolidated EBITDA for the fourth and final Fiscal Quarter of a Fiscal Year, the Applicable Non-Utilization Fee Rate for the period beginning on the
Non-Utilization Fee Determination Date immediately after the last day of such fourth and final Fiscal Quarter and continuing until the date which is 90 days after the last day of such final Fiscal Quarter (the “Fee Adjustment Date”) shall
be the Applicable Non-Utilization Fee Rate in effect on the last day of such final Fiscal Quarter but such Applicable Non-Utilization Fee Rate shall be adjusted on such Fee Adjustment Date and thereafter until the next Rate Determination Date. Such
Applicable Non-Utilization Fee Rate shall be determined based upon the annual audited financial statements for the Fiscal Year ended on the last day of such final Fiscal Quarter, (iii) if the Applicable Non-Utilization Fee Rate for the fourth and
final Fiscal Quarter as determined on the Fee Adjustment Date shall be different from the applicable Non-Utilization Fee Rate for such date determined on the Non-Utilization Fee Determination Date for such fourth Fiscal Quarter, such redetermined
Applicable Non-Utilization Fee Rate shall be effective retroactive to the Non-Utilization Fee Determination Date, and the Borrowers, the Administrative Agent and the Banks, as applicable, shall within 10 days of such redetermination, make a payment
(in the case of amounts owing by the Borrowers to the Banks) or provide a credit applicable to future amounts payable by the Borrowers hereunder (in the case of amounts owing by the Banks to the Borrowers) equal to the difference between the
Non-Utilization Fees actually paid under this Agreement and the Non-Utilization Fees that would have been paid under this Agreement had the Applicable Non-Utilization Fee Rate as originally determined been equal to the Applicable Non-Utilization Fee
Rate as redetermined; and (iv) if on any Non-Utilization Fee Determination Date (or in the case of the fourth Fiscal Quarter, the Adjustment Date) the Company shall have failed to deliver to the Banks the financial statements required to be
delivered pursuant to Section 5.01(a) or Section 5.01(b) with respect to the Fiscal Year or Fiscal Quarter, as the case may be, most recently ended prior to such Non-Utilization Fee Determination Date (or in the case of the fourth Fiscal Quarter,
the Adjustment Date), then for the period beginning on such Non-Utilization Fee Determination Date (and in the case of the fourth Fiscal Quarter, the Non-Utilization Fee Determination Date immediately preceding the Adjustment Date) and ending on the
earlier of (A) the date on which the Company shall deliver to the Banks the financial statements to be delivered pursuant to Section 5.01(b) with respect to such Fiscal Quarter or any subsequent Fiscal Quarter, and (B) the date on which the Company
shall deliver to the Banks annual financial statements required to be delivered pursuant to Section 5.01(a) with respect to the Fiscal Year which includes such Fiscal Quarter or any subsequent Fiscal Year, the Applicable Non-Utilization Fee Rate
shall be determined as if the ratio of Consolidated Funded Debt to Consolidated EBITDA was more than 2.00 at all times during such period. Any change in the Applicable Non-Utilization Fee Rate on any Non-Utilization Fee Determination Date shall
result in a corresponding change, effective on and as of such Non-Utilization Fee Determination Date, in the fees payable hereunder; provided, that no Applicable Non-Utilization Fee Rate shall be decreased pursuant to this Section 2.07 if a Default
is in existence on the Non-Utilization Fee Determination Date. 
  

 40 

 (b) (1) The U.S. Borrowers shall pay to the Administrative Agent for the ratable account of each
Revolving Advance Lender, with respect to each U.S. Dollar Letter of Credit, a per annum letter of credit fee (the “U.S. Dollar Letter of Credit Fee”) equal to the product of: (i) the aggregate average daily U.S. Dollar Undrawn Amounts,
times (ii) a per annum percentage equal to the Applicable Margin for Letters of Credit (determined in accordance with Sections 2.06 and 2.13 hereof). Such U.S. Dollar Letter of Credit Fees shall be payable in arrears for each U.S. Dollar Letter of
Credit on each Quarterly Payment Date during the term of each respective U.S. Dollar Letter of Credit and on the termination thereof (whether at its stated expiry date or earlier). The “Applicable Margin” for Letters of Credit shall be as
determined in Section 2.06(a). No Other Currency Lender shall be entitled to any portion of the U.S. Dollar Letter of Credit Fee. 
  
 (2) The Non-U.S. Borrowers shall pay to Wachovia, in its capacity as Other Currency Issuing Bank (and in the event there is more than one Other Currency
Issuing Bank, such payment shall be made to the Other Currency Sub-Agent for the ratable account of each Other Currency Lender), for the ratable account of each Other Currency Lender, with respect to each Other Currency Letter of Credit, a per annum
letter of credit fee (the “Other Currency Letter of Credit Fee”) equal to the product of: (i) the aggregate average daily Other Currency Undrawn Amounts, times (ii) a per annum percentage equal to the Applicable Margin for Letters of
Credit (determined in accordance with Sections 2.06 and 2.13 hereof). Such Other Currency Letter of Credit Fees shall be payable in arrears for each Other Currency Letter of Credit on each Quarterly Payment Date during the term of each respective
Other Currency Letter of Credit and on the termination thereof (whether at its stated expiry date or earlier). The “Applicable Margin” for Letters of Credit shall be as determined in Section 2.06(a). No Revolving Advance Lender shall be
entitled to any portion of the Other Currency Letter of Credit Fee. 
  
 (c) (1) The U.S. Borrowers shall pay to the Administrative Agent for the account of the U.S. Dollar Issuing Bank a facing fee (the “U.S. Dollar Facing Fee”) with respect to each U.S. Dollar Letter of Credit equal to the product
of: (i) the face amount of such U.S. Dollar Letter of Credit, times (ii) one-eighth (1/8th) of one percent (0.125%). Such U.S. Dollar Facing Fee shall be due and payable on such date as may be agreed upon by the U.S. Dollar Issuing Bank and the U.S.
Borrowers. The U.S. Borrowers shall pay to the U.S. Dollar Issuing Bank, for its own account, transfer fees, drawing fees, modification fees, extension fees and such other fees and charges as may be provided for in any U.S. Dollar Letter of Credit
Agreement or otherwise charged by the U.S. Dollar Issuing Bank. No Bank shall be entitled to any portion of the U.S. Dollar Facing Fees or any other fees payable by the U.S. Borrowers to the U.S. Dollar Issuing Bank pursuant to this Section
2.07(c)(1). 
  
 (2) The Non-U.S. Borrowers shall pay to Wachovia,
in its capacity as Other Currency Issuing Bank (and in the event there is more than one Other Currency Issuing Bank, such payment shall be made to the Other Currency Sub-Agent for the ratable account of each Other Currency Issuing Bank), for the
account of the Other Currency Issuing Bank a facing fee (the “Other Currency Facing Fee”) with respect to each Other Currency Letter of Credit issued by such Other Currency Issuing Bank equal to the product of: (i) the face amount of such
Other Currency Letter of Credit, times (ii) one-eighth (1/8th) of one percent (0.125%). Such Other Currency Facing Fee shall be due and payable on such date as may be agreed upon by the Other Currency Issuing Bank and the Non-U.S. Borrowers. The
Non-U.S. Borrowers shall pay to the 
  

 41 

 Other Currency Issuing Bank, for its own account, transfer fees, drawing fees, modification fees, extension fees and such
other fees and charges as may be provided for in any Other Currency Letter of Credit Agreement or otherwise charged by the Other Currency Issuing Bank. No Bank shall be entitled to any portion of the Other Currency Facing Fees or any other fees
payable by the Non-U.S. Borrowers to the Other Currency Issuing Bank pursuant to this Section 2.07(c)(2). 
  
 (d) The Borrower shall pay to the Administrative Agent, for the account and sole benefit of the Administrative Agent, such fees and other amounts at such
times as set forth in the Administrative Agent’s Letter Agreement. 
  
 SECTION 2.08. Optional Termination or Reduction of Commitments. The Company may, upon at least 3 Domestic Business Days’ irrevocable notice to the Administrative Agent, terminate at any time, or proportionately reduce from time
to time by an aggregate amount of at least $1,000,000 or any larger multiple of $1,000,000, the Commitments; provided, however: (1) each termination or reduction, as the case may be, shall be permanent and irrevocable; (2) no such termination or
reduction shall be in an amount greater than the Total Unused Commitments on the date of such termination or reduction (giving effect to any repayment of the Loans contemplated to be made in connection therewith); and (3) no such reduction pursuant
to this Section 2.08 shall result in the aggregate Facility Commitments of all of the Banks to be reduced to an amount less than $65,000,000, unless the Commitments are terminated in their entirety, in which case all accrued fees (as provided under
Section 2.07) with respect to the amount of the Facility Commitments being reduced shall be payable on the effective date of such termination. Any reduction in the Commitments shall result in (1) a proportionate reduction in each of the Facility
Commitments, Other Currency Commitments and the Revolving Advance Commitments of each Bank; and (2) a termination of the Borrowers’ rights under Sections 2.01(b), 2.01(c) and 2.16 (a)(2). 
  
 SECTION 2.09. Mandatory Reduction and Termination of Commitments. The
Commitments (including, without limitation, the Revolving Advance Commitments, the Facility Commitments and Other Currency Commitments) shall terminate on the Termination Date and any Revolving Advances, Other Currency Advances, Swing Line Advances
and if demand had not been earlier made Letter of Credit Advances then outstanding (together with accrued interest thereon) shall be due and payable on such date. 
  
 SECTION 2.10. Optional Prepayments. (a) The Borrowers may prepay the Advances in whole at any time, or from time to
time in part in amounts aggregating at least $500,000, or any larger multiple of $100,000, by paying the principal amount to be prepaid together with accrued interest thereon to the date of prepayment (together with any amounts due under Section
8.05(a)); provided, however: (1) during any period that an ACL Agreement shall be applicable, prepayments by the Borrower respecting Revolving Advances shall be made in accordance with the terms of the ACL Agreement; (2) in the case of a
voluntary prepayment, in whole or in part, of an Other Currency Advance (other than an Other Currency Overdraft Advance): (A) such voluntary prepayment shall require at least one but no more than five Euro-Dollar Business Days prior notice to the
Administrative Agent and the Other Currency Lender; and (B) such voluntary partial prepayment shall be in an aggregate minimum Dollar Equivalent amount of $500,000 or any larger multiple of $500,000; and (3) in the case of Other Currency Overdraft
Advances prepayment shall be made in accordance with the terms of the Other Currency Overdraft Facility Letter. Other than in respect of Other Currency Overdraft Advances, 
  

 42 

 each such optional prepayment shall be applied first to repay or prepay Swing Line Advances outstanding on the date of
such prepayment, second, to repay or prepay outstanding Other Currency Advances or Revolving Advances as the Company may specify in writing; provided that in the absence of such written instruction from the Company, such optional prepayment shall be
applied, to repay or prepay ratably Other Currency Advances outstanding on the date of such prepayment and then to prepay ratably the Revolving Advances of the several Banks. 
  
 (b) Upon receipt of a notice of prepayment pursuant to this Section, the Administrative Agent shall promptly notify each
Bank of the contents thereof and of such Bank’s ratable share of such prepayment. 
  
 SECTION 2.11. Mandatory Prepayments. (a) On each date on which the Commitments are reduced or terminated pursuant to Section 2.08 or Section 2.09, the Borrowers shall repay or prepay such principal amount of
the outstanding Revolving Advances, the Dollar Equivalent of Other Currency Advances and Swing Line Advances, if any (together with interest accrued thereon and any amounts due under Section 8.05(a)) or the Other Currency Overdraft Facility Letter,
as may be necessary so that after such payment the aggregate unpaid principal amount of the Revolving Advances, together with the aggregate principal amount of all Swing Line Advances, the Dollar Equivalent of Other Currency Advances, the Dollar
Equivalent of Other Currency Letter of Credit Advances, the Dollar Equivalent of Other Currency Undrawn Amounts, U.S. Dollar Letter of Credit Advances and U.S. Dollar Undrawn Amounts does not exceed the aggregate amount of the Facility Commitments
as then reduced. Other than in respect of Other Currency Overdraft Advances, each such payment or prepayment shall be applied to repay or prepay first to Swing Line Advances outstanding on the date of such prepayment and second, to repay or prepay
outstanding Other Currency Advances or Revolving Advances as the Company may specify in writing; provided that in the absence of such written instruction from the Company, such optional prepayment shall be applied to repay or prepay ratably Other
Currency Advances outstanding on the date of such prepayment and then, ratably to the Revolving Advances of the several Banks. 
  
 (b) In the event that the aggregate principal amount of all Revolving Advances, together with the aggregate principal amount of the Swing Line Advances,
the Dollar Equivalent of Other Currency Advances, the Dollar Equivalent of Other Currency Letter of Credit Advances, the Dollar Equivalent of Other Currency Undrawn Amounts, U.S. Dollar Letter of Credit Advances and U.S. Dollar Undrawn Amounts at
any one time outstanding shall at any time exceed the aggregate amount of the Facility Commitments of all of the Banks at such time, the Borrowers shall immediately repay so much of the Revolving Advances, the Dollar Equivalent of Other Currency
Advances and Swing Line Advances as is necessary in order that the aggregate principal amount of the Revolving Advances thereafter outstanding, together with the aggregate principal amount of the Swing Line Advances, the Dollar Equivalent of Other
Currency Advances, the Dollar Equivalent of Other Currency Advances, the Dollar Equivalent of Other Currency Letter of Credit Advances, the Dollar Equivalent of Other Currency Undrawn Amounts, U.S. Dollar Letter of Credit Advances and U.S. Dollar
Undrawn Amounts shall not exceed the aggregate amount of the Facility Commitments of all of the Banks at such time. 
  
 SECTION 2.12. General Provisions as to Payments. (a) The Borrowers shall make each payment of principal of, and interest on, the Advances and of
fees hereunder, not later than 11:00 A.M. (Greenville, South Carolina time, except in the case of payments in respect of 
  

 43 

 Other Currency Advances and Other Currency Letter of Credit Advances such time shall be London time) on the date when
due, in Federal or other funds immediately available: (i) in the case of all Obligations (except payments in respect of Other Currency Advances and Other Currency Letter of Credit Advances), in Greenville, South Carolina, to the Administrative Agent
at its address referred to in Section 9.01; and (ii) in the case of payments in respect of Other Currency Advances and Other Currency Letter of Credit Advances, in London, England, to the Other Currency Lender, at its address referred to in Section
9.01 (or as set out in the Other Currency Overdraft Facility Letter in respect of Other Currency Overdraft Advances). Subject to the terms of Section 2.02(d), the Administrative Agent will promptly distribute to each Bank its ratable share of each
such payment in respect of a Revolving Advance received by the Administrative Agent for the account of the Banks; provided that payments of interest in respect of a Revolving Advance shall be distributed by the Administrative Agent within three
Domestic Business Days of the date such payment is received by the Administrative Agent for the account of the Banks. 
  
 (b) Whenever any payment of principal of, or interest on, the Revolving Advances, Swing Line Advances or of fees shall be due on a day which is not a
Domestic Business Day (including, without limitation, any payments pursuant to Sections 2.02(c) and 2.02(d)) or in the case of an Other Currency Advance (other than an Other Currency Overdraft Advance) on a day which is not a Euro-Dollar Business
Day, the date for payment thereof shall be extended to the next succeeding Domestic Business Day or Euro-Dollar Business Day, as the case may be. If the date for any payment of principal is extended by operation of law or otherwise, interest thereon
shall be payable for such extended time. 
  
 (c) All payments of
principal, interest and fees and all other amounts to be made by the Borrowers pursuant to this Agreement and the Other Currency Overdraft Facility Letter with respect to any Advance, Swing Line Advance, Other Currency Advances, Letter of Credit
Advance or fee relating thereto shall be paid without deduction for, and free from, any tax, imposts, levies, duties, deductions, assessments, charges or withholdings of any nature now or at anytime hereafter imposed by any governmental authority or
by any taxing authority thereof or therein excluding in the case of each Bank, taxes imposed on or measured by its net income, and franchise taxes imposed on it, by the jurisdiction under the laws of which such Bank is organized or any political
subdivision thereof and, in the case of each Bank, taxes imposed on its income, and franchise taxes imposed on it, by the jurisdiction of such Bank’s applicable Lending Office or any political subdivision thereof (all such non-excluded taxes,
imposts, levies, assessments, charges, duties, deductions or withholdings of any nature being “Taxes”). In the event that a Borrower is required by applicable law to make any such withholding or deduction of Taxes with respect to any
Revolving Advance, Swing Line Advance, Other Currency Advance, Letter of Credit Advance or fee or other amount, the Borrowers shall: 
  
 (i) pay to such Bank additional amounts as may be necessary in order that such payment is made, after withholding or deduction for or on
account of such Taxes, in an amount that is not less than the amount provided for in the Loan Documents; and 
  
 (ii) withhold the full amount of such Taxes from such payment (as increased pursuant to clause (c)(i)) and pay such amount to the
applicable taxing authority imposing such Taxes in accordance with applicable law. 
  

 44 

 (d) As promptly as practicable after the payment of any Taxes, and in any event within 90 days of any
such payment being due, the applicable Borrower shall furnish to the Administrative Agent a copy of an official receipt (or a certified copy thereof) evidencing the payment of such Taxes. The Administrative Agent shall make copies thereof available
to any Bank upon request therefor. 
  
 (e) Each Bank organized
under the laws of a jurisdiction outside the United States (a “Non-US Bank”) and each Other Currency Lender organized under the laws of a jurisdiction outside the country of the applicable Non-U.S. Borrower, in each other case, shall, on
or prior to the date of its execution and delivery of this Agreement in the case of each initial Bank hereunder that is a Non-U.S. Bank or Other Currency Lender, and on the date of the Assignment and Acceptance pursuant to which it became a Bank in
the case of each other Bank that is a Non-U.S. Bank or Other Currency Lender, and from time to time thereafter if requested in writing by a Borrower or the Administrative Agent (but only so long thereafter as such Bank remains lawfully able to do
so), provide the Administrative Agent and such Borrower with (i) in the case of a Non-US Bank, (w) if such Non-US Bank claims an exemption from withholding tax pursuant to its portfolio interest exemption, (A) a statement of the Non-US Bank, signed
under penalty of perjury, that it is not (I) a “bank” as described in Section 881(c)(3)(A) of the Code, (II) a ten percent (10%) shareholder of any Borrower (within the meaning of Section 871(h)(3)(B) of the Code), or (III) a controlled
foreign corporation related to any Borrower within the meaning of Section 864(d)(4) of the Code, and (B) a properly completed and executed IRS Form W-8BEN; (x) if such Non-US Bank claims an exemption from, or a reduction of, withholding tax under a
United States tax treaty, properly completed and executed IRS Form W-8BEN; (y) if such Non-US Bank claims that interest paid under this Agreement is exempt from United States withholding tax because it is effectively connected with a United States
trade or business of such Non-US Bank, a properly completed and executed copy of IRS Form W-8ECI; and (z) such other form or forms as may be required under the Code or other laws of the United States as a condition to exemption from, or reduction
of, United States withholding tax, and (ii) in the case of each Other Currency Lender organized under the laws of a jurisdiction outside the country within which an applicable Borrower is organized, such valid and fully completed forms, as are
required by the applicable tax authority of such jurisdiction, indicating that such Bank is entitled to benefits under an applicable income tax treaty to which the country within which such Borrower is resident is a party that reduces the rate of
interest withholding tax on payments under this Agreement. If any form or document referred to in this subsection (e) requires the disclosure of information, other than information necessary to compute the tax payable and information required on the
Agreement Date by Internal Revenue Service form W-8ECI or W-8BEN or other form that the applicable Borrower has indicated in writing to the Banks on the Agreement Date as being a required form to avoid or reduce withholding tax on payments under
this Agreement, that a Bank reasonably considers to be confidential, such Bank shall give notice thereof to the Borrowers and shall not be obligated to include in such form or document such confidential information. 
  
 (f) For any period with respect to which a Non-U.S. Bank or Other Currency
Lender has failed to provide the Borrowers with the appropriate form described in subsection (e) (other than if such failure resulted from a change in any applicable statute, treaty, regulation or other applicable law or any interpretation of any of
the foregoing occurring after the date on which a form originally was required to be provided or if such form otherwise is not required 
  

 45 

 under subsection (e)), such Non-U.S. Bank or Other Currency Lender, as the case may be, shall not be entitled to an
additional payment or indemnification under subsection (a) or (c) with respect to Taxes; provided that should a Non-U.S. Bank or Other Currency Lender become subject to Taxes because of its failure to deliver a form required hereunder, the Borrowers
shall take such steps as such Non-U.S. Bank or Other Currency Lender shall reasonably request to assist such Bank to recover such Taxes. If the appropriate forms provided by a Non-U.S. Bank or Other Currency Lender pursuant to Section 2.11(e) at the
time such Non-U.S. Bank or Other Currency Lender first becomes a party to this Agreement indicates an interest-withholding tax rate in respect of a Borrower in excess of zero, withholding tax at such rate shall be considered in respect of such
Borrower excluded from Taxes unless and until such Non-U.S. Bank or Other Currency Lender, as the case may be, provides the appropriate form certifying that a lesser rate applies in respect of such Borrower, whereupon withholding tax in respect of
such Borrower at such lesser rate only shall be considered excluded from Taxes for periods governed by such form. 
  
 (g) If a Borrower makes a payment under subsection (c) of this Section 2.12 and the Administrative Agent or Bank determines that a credit against, relief
or remission for, or repayment or refund of any tax, is attributable to that payment or to the Taxes which gave rise to that payment (a “Tax Credit”), and the Administrative Agent or Bank has obtained, utilized and retained that Tax
Credit, the Administrative Agent or Bank that obtained, utilized or retained such Tax Credit shall pay the amount of the Tax Credit (net of all out-of-pocket expenses and without interest) to the Borrowers up to such amount as the Administrative
Agent or Bank, as the case may be, determines in the good faith judgment of such Bank or Administrative Agent is attributable to payment of such additional amounts by the Borrowers and in an amount as will leave it (after that payment) in no better
and no worse after-tax position as it would have been in had the payment under subsection (c) not have been made by the Borrowers; provided, however, that the Borrowers, upon the request of such Administrative Agent or Bank, agree to repay the
amount paid over to the Borrowers (plus penalties, interest or other charges payable to the relevant jurisdiction or taxing authority) to such Administrative Agent or Bank in the event such Administrative Agent or Bank is required to repay such
refund to such jurisdiction or taxing authority. 
  
 (h) Subject
to the terms of Section 2.11(f), the Loan Parties shall, jointly and severally, indemnify the Administrative Agent and each Bank against any Taxes, assessments or charges made by reason of the execution and delivery of this Agreement or the other
Loan Documents (and whether or not such Taxes, assessments or charges are correctly or legally asserted by the relevant Authority). Promptly upon having knowledge that any such Taxes, assessments or charges have been levied, imposed or assessed, and
promptly upon notice thereof by the Administrative Agent or any Bank, the Borrowers shall pay such Taxes, assessments or charges directly to the relevant Authority (provided, however, that no Administrative Agent nor Bank shall be under any
obligation to provide any such notice to any Borrower). With respect to indemnification for Taxes, assessments or charges actually paid by any Bank, such indemnification shall be made within 30 days after the date such Bank or Administrative Agent
makes written demand therefore. Each Borrower acknowledges that any payment made to any Bank or to any Authority in respect of the indemnification obligations of the Borrowers provided in this clause shall constitute a payment in respect of which
the provisions of clause (c) and this clause shall apply. 
  

 46 

 (i) Without prejudice to the survival of any other agreement of the Borrowers hereunder, the agreements
and obligations of the Borrowers contained in this Section 2.12 shall be applicable with respect to any Participant, Assignee or other Transferee, and any calculations required by such provisions (i) shall be made based upon the circumstances of
such Assignee or any Participant which is also a Bank hereunder, and (ii) constitute a continuing agreement and shall survive the termination of this Agreement and the payment in full or cancellation of the Notes; provided, however, that no
Participant that is not also a Bank hereunder shall be entitled to receive any greater payment under this Section 2.12 than the transferor Bank would have been entitled to receive with respect to the participation sold to such Participant.

  
 SECTION 2.13. Computation of Interest and Fees.
Interest on the Advances shall be computed on the basis of a year of 360 days and paid for the actual number of days elapsed (including the first day but excluding the last day); except with respect to Other Currency Advances denominated in Sterling
which shall accrue interest computed on the basis of 365 days and other than Other Currency Overdraft Advances for which the interest thereon shall be calculated in accordance with the terms of the Other Currency Overdraft Facility Letter,
provided, however, that to the extent the current market practice is to compute interest and/or fees in respect of any Other Currency or any Advance denominated in any Other Currency in a manner other than as set forth above, all
interest and fees hereunder shall be computed on the basis of such market practice, as notified to a Borrower by the Administrative Agent or the Other Currency Lender. Facility fees, letter of credit fees and any other fees (excluding Facing Fees)
payable hereunder shall be computed on the basis of a year of 360 days and paid for the actual number of days elapsed (including the first day but excluding the last day). 
  
 SECTION 2.14. [Reserved]. 
  
 SECTION 2.15. Swing Line Advances. (a) The U.S. Borrowers may prior to the Termination Date, as set forth in this Section, request the Swing Line
Lender to make, and the Swing Line Lender may in its sole and absolute discretion prior to the Termination Date make, Swing Line Advances to the U.S. Borrowers, in an aggregate principal amount at any one time outstanding, not exceeding $10,000,000
(the “Swing Line Cap”), provided that: (1) the aggregate principal amount of all Swing Line Advances, together with the aggregate principal amount of all outstanding Revolving Advances, the Dollar Equivalent of Other Currency Advances, the
Dollar Equivalent of Other Currency Letter of Credit Advances, the Dollar Equivalent of Other Currency Undrawn Amounts, U.S. Dollar Undrawn Amounts and U.S. Dollar Letter of Credit Advances, at any one time outstanding shall not exceed the aggregate
amount of the Facility Commitments of all of the Banks at such time; (2) the aggregate outstanding principal amount of all Revolving Advances by BB&T (less the Other Currency Lender Participation Share of such Revolving Advances) together with
(i) BB&T’s Pro Rata Revolving Advance Share of the aggregate outstanding principal amount of all U.S. Dollar Letter of Credit Advances, Swing Line Advances and U.S. Dollar Undrawn Amounts (less the Other Currency Lender Participation Share
in such amounts), plus (ii) BB&T’s Pro Rata Facility Share of the aggregate outstanding principal amount of the Dollar Equivalent of all Other Currency Advances, Other Currency Letter of Credit Advances and Other Currency Undrawn Amounts
shall not exceed the amount of BB&T’s Facility Commitment; and (3) the aggregate principal amount of all Swing Line Advances and Revolving Advances of the Swing Line Lender, together with: (i) the Swing Line Lender’s Pro Rata Revolving
Advance Share of the aggregate outstanding principal amount of all U.S. Dollar Letter of Credit Advances and U.S. Dollar 
  

 47 

 Undrawn Amounts, plus (ii) the Swing Line Lender’s Pro Rata Facility Share of the aggregate outstanding principal
amount of the Dollar Equivalent of all Other Currency Advances, the Dollar Equivalent of all Other Currency Letter of Credit Advances and the Dollar Equivalent of all Other Currency Undrawn Amounts will not exceed the amount of the Swing Line
Lender’s Revolving Advance Commitment. 
  
 (b) Except as may
otherwise be agreed upon by the Swing Line Lender and the U.S. Borrowers, when the U.S. Borrowers wish to request a Swing Line Advance, they shall give the Administrative Agent notice substantially in the form of Exhibit L hereto (a “Swing Line
Advance Request”) so as to be received no later than 11:00 A.M. (Greenville, South Carolina time) on or before the date of the proposed Swing Line Advance proposed therein (or such other time and date as the U.S. Borrowers and the Swing Line
Lender may agree), specifying: 
  
 (i) the proposed date of such
Swing Line Advance, which shall be a Domestic Business Day (the “Borrowing Date”); and 
  
 (ii) the aggregate amount of such Swing Line Advance, which shall be at least $50,000 (or in larger multiples of $10,000) but shall not cause the limits
specified in Section 2.15(a) to be violated. 
  
 (c) The Swing
Line Lender shall make the amount of such Swing Line Advance available to the U.S. Borrowers on such date by depositing the same, in immediately available funds, in an account of the U.S. Borrowers maintained with the Swing Line Lender. 

 
 (d) Subject to the limitations contained in this Agreement, the U.S.
Borrowers may borrow under this Section 2.15, prepay and reborrow under this Section 2.15 at any time before the Termination Date. 
  
 (e) At any time and from time to time, upon the request of the Swing Line Lender, each Bank other than the Swing Line Lender shall, on the Domestic
Business Day after such request is made, purchase a participating interest in Swing Line Advances in an amount equal to its ratable share (based upon its respective Facility Commitment) of such Swing Line Advances. On such Domestic Business Day,
each Bank will immediately transfer to the Swing Line Lender, in immediately available funds, the amount of its participation. Whenever, at any time after the Swing Line Lender has received from any such Bank its participating interest in a Swing
Line Advance, the Administrative Agent receives any payment on account thereof, the Administrative Agent will distribute to such Bank its participating interest in such amount (appropriately adjusted, in the case of interest payments, to reflect the
period of time during which such Bank’s participating interest was outstanding and funded); provided, however, that in the event that such payment received by the Administrative Agent is required to be returned, such Bank will
return to the Administrative Agent any portion thereof previously distributed by the Administrative Agent to it. Each Bank’s obligation to purchase such participating interests shall be absolute and unconditional and shall not be affected by
any circumstance, including, without limitation: (i) any set-off, counterclaim, recoupment, defense or other right which such Bank or any other Person may have against the Swing Line Lender requesting such purchase or any other Person for any reason
whatsoever; (ii) the occurrence or continuance of a Default or an Event of Default or the termination of any of the Commitments (including, without limitation, any Facility Commitment, Revolving Advance Commitment or Other Currency Commitment)
(whether by a 
  

 48 

 Borrower pursuant to Section 2.08 or by the Administrative Agent pursuant to Section 6.01 or otherwise); (iii) any
adverse change in the condition (financial or otherwise) of any Borrower, any Guarantor or any other Person; (iv) the failure to satisfy any condition set forth in Section 3.01, 3.02, 3.03 or 3.04; (v) any breach of this Agreement or any other Loan
Documents by any Borrower, any Guarantor or any other Bank; or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. 
  
 (f) Notwithstanding anything contained in this Agreement to the contrary, the Swing Line facility contained in this Section
2.15 shall terminate immediately upon: (i) BB&T’s removal or resignation as Administrative Agent; or (ii) termination of any of the Commitments (whether at maturity or otherwise). 
  
 SECTION 2.16. Other Currency Advances. 
  
 (a) Commitments to Make Other Currency Advances. (1) The Other
Currency Lenders agree, on the terms and conditions set forth herein, to make Other Currency Advances (together with Other Currency Overdraft Advances pursuant to the terms of the Other Currency Overdraft Facility Letter to which they are a party)
to the Borrowers from time to time before the Termination Date; provided that: (1) immediately after each such Other Currency Advance is made, the aggregate outstanding principal amount of Other Currency Advances made by the Other Currency
Lender together with the aggregate principal amount of the participations in Revolving Advances and Letter of Credit Advances held by such Other Currency Lender pursuant to Section 2.02(e) hereof shall not exceed the amount of the Other Currency
Lender’s Facility Commitment (after giving effect to the purchase and sale of participations in the Revolving Advances and U.S. Dollar Letter of Credit Advances required by Section 2.02(e)(3)); (2) the aggregate principal amount of all Other
Currency Advances, together with the aggregate principal amount of all Letter of Credit Advances, Revolving Advances, Swing Line Advances and Undrawn Amounts, shall not exceed the aggregate amount of the Facility Commitments of all of the Banks at
such time; and (3) immediately after such Other Currency Advance is made, the aggregate principal Dollar Equivalent amount of all outstanding Other Currency Advances, Other Currency Undrawn Amounts and Other Currency Letter of Credit Advances shall
not exceed the Other Currency Commitments of all of the Other Currency Lenders at such time. Each Other Currency Advance under this Section other than Other Currency Overdraft Advances shall be in a principal Dollar Equivalent amount of $500,000 or
any larger multiple of $500,000 (except that any such Other Currency Advance may be in the aggregate amount of the Other Currency Commitment less the Dollar Equivalent amount of any outstanding Other Currency Advances, Other Currency Undrawn Amounts
and Other Currency Letter of Credit Advances). Within the foregoing limits, the Borrowers may borrow under this Section, repay or, to the extent permitted by Section 2.10, prepay Other Currency Advances and reborrow under this Section at any time
before the Termination Date. 
  
 (2) Subject to the terms and
conditions set forth herein, the Borrowers shall have the right, at any time from the Restatement Effective Date until the Termination Date, to increase the total Other Currency Commitment by an amount up to $12,500,000 (for a total Other Currency
Commitment, assuming no reductions, of $40,000,000) in the aggregate. The following terms and conditions shall apply to any such increase: (i) any such increase shall be obtained from the Other Currency Lender or Other Currency Lenders in accordance
with the terms set forth herein, (ii) the Other Currency Commitment of an Other Currency Lender may not 
  

 49 

 be increased without the prior written consent of such Other Currency Lender and BB&T, (iii) any increase in the
aggregate Other Currency Commitment shall be in a minimum principal amount of $2,500,000 (or any larger multiple of $1,000,000), (iv) the Loan Parties, the Banks (including without limitation, the Other Currency Lenders) and the Administrative Agent
shall execute an amendment to this Agreement in form and content satisfactory to the Administrative Agent to reflect the revised Other Currency Commitment and to incorporate the terms of any amendment, supplement or modification requested by the
Administrative Agent pursuant to Section 2.16(b)(5), (the Banks do hereby agree to execute such amendment unless the amendment purports to increase the Facility Commitment, Revolving Advance Commitment or Other Currency Commitment of a Bank without
such Bank’s consent), (v) the Borrowers shall execute such Notes as are necessary to reflect the increase in the Facility Commitments and Other Currency Commitment, (vi) if any Advances are outstanding at the time of any such increase, the
Borrower shall make such payments and adjustments on the Advances (including payment of any break-funding amount owing under Section 8.05) as necessary to give effect to the revised commitment percentages and outstandings of the Banks, (vii) the
conditions set forth in Section 3.02 shall be true and correct; and (viii) the U.S. Borrowers shall have not reduced the Facility Commitments at any time. The amount of any increase in the Other Currency Commitments hereunder may be offered by the
Borrowers first to banks and financial institutions that are not a party to this Agreement as an Other Currency Lender (a “New Other Currency Financial Institution”) so long as such New Other Currency Financial Institution is approved by
the Administrative Agent (such approval not to be unreasonably withheld) and the Other Currency Commitment of any such New Other Currency Financial Institution (and the additional commitments requested by the Non-U.S. Borrowers and allocated to the
Other Currency Lenders then a party to this Agreement) shall be acceptable to the Non-U.S. Borrowers and the Administrative Agent. 
  
 (b) Method of Borrowing Other Currency Advances (other than Other Currency Overdraft Advances). (1) The Borrowers shall give the Administrative
Agent and the Other Currency Lender notice in the form attached hereto as Exhibit D (a “Notice of Other Currency Borrowing”) prior to 11:00 A.M. (London time) at least one Euro-Dollar Business Day before each Other Currency Borrowing
denominated in Euros, Sterling or Canadian Dollars and at least four Euro-Dollar Business Days before each Other Currency Borrowing in an Other Currency other than Euros, Sterling or Canadian Dollars, specifying: 
  
 (i) the date of such Other Currency Borrowing (which shall
be a Euro-Dollar Business Day); and 
  
 (ii) the
aggregate amount of such Other Currency Borrowing;. 
  
 (iii) the duration of the Interest Period applicable thereto, subject to the provisions of the definition of Interest Period. 
  
 (2) Upon receipt of a Notice of Other Currency Borrowing, the Administrative Agent shall promptly notify each Bank of the contents thereof and such Notice
of Other Currency Borrowing shall not thereafter be revocable by the Borrowers. 
  
 (3) Unless the Administrative Agent or the Other Currency Lender determines that any applicable condition specified in Article III has not been satisfied, the Other Currency 
  

 50 

 Lender will make the funds so requested available to the Borrowers at Wachovia Bank, National Association, London Branch,
3 Bishopsgate London EC2N3AB, not later than 2:00 P.M. (London time) on the date of each Other Currency Borrowing. 
  
 (4) Notwithstanding anything to the contrary contained in this Agreement, no Other Currency Advance shall be requested (and the Other Currency Lender
shall have no obligation to make an Other Currency Advance) if there shall have occurred a Default which Default shall not have been cured or waived. 
  
 (5) In the event that a New Other Currency Financial Institution becomes an Other Currency Lender hereunder, the Administrative Agent, in its sole
discretion, may designate one of the Other Currency Lenders to be a sub-administrative agent hereunder (in such capacity, the “Other Currency Sub-Agent”) (in connection with which, Wachovia has indicated its willingness to carry out this
role for as long as it is an Other Currency Lender) with the authority to fulfill the duties of the Administrative Agent in connection with the funding, payment and administration of the Other Currency Advances. As a condition precedent to the
appointment of any such Other Currency Sub-Agent and the assignment of any Other Currency Commitment or the addition of a New Other Currency Financial Institution, the method of borrowing, funding, repayment and administration of the Other Currency
Advances shall be, to the extent reasonably required by the Administrative Agent and Other Currency Sub-Agent, supplemented with and/or superceded by such other methods of borrowing, funding, repayment and administration of the Other Currency
Advances as shall be mutually agreeable to the Borrowers, the Administrative Agent, the Other Currency Sub-Agent and the Other Currency Lenders. 
  
 (c) Continuation and Conversion Elections. By delivering a Continuation/Conversion Notice to the Administrative Agent and the Other Currency Lender
on or before 10:00 a.m. on a Euro-Dollar Business Day, the U.S. Borrowers may from time to time irrevocably elect, on not less than one Euro-Dollar Business Day’s notice (and not more than five Euro-Dollar Business Days’ notice) in the
case of a continuation of an Other Currency Borrowing denominated in Euros, Sterling or Canadian Dollars and on not less than four Euro-Dollar Business Days’ notice (and not more than five Euro-Dollar Business Days’ notice) in the case of
a continuation of an Other Currency Borrowing denominated in an Other Currency other than Euros, Sterling or Canadian Dollars, that all, or any portion in an aggregate minimum amount of the Dollar Equivalent of $500,000 and an integral multiple of
the Dollar Equivalent of $500,000 be, continued as Euro-Dollar Loans in the absence of delivery of a Continuation/Conversion Notice with respect to any Euro-Dollar Loan at least one Euro-Dollar Business Day (but not more than five Euro-Dollar
Business Days) in the case of a continuation of an Other Currency Borrowing denominated in Euros, Sterling or Canadian Dollars and at least four Euro-Dollar Business Days (but not more than five Euro-Dollar Business Days) in the case of a
continuation of an Other Currency Borrowing denominated in an Other Currency other than in Euros, Sterling or Canadian Dollars before the last day of the then current Interest Period with respect thereto, such Euro-Dollar Loan shall, on such last
day, automatically be continued with an Interest Period of one month; provided, however, that when any Default has occurred and is continuing, at the option of the Other Currency Lender, no portion of the outstanding principal amount
of any Other Currency Advances may be continued with an Interest Period in excess of one month. Other Currency Advances can only be continued or converted in the currency that such Other Currency Advances were made on the date of such Other Currency
Advances Borrowing. 
  

 51 

 (d) Euros And National Currency Units. 
  
 Where: 
  
 (i) any Advance is requested in the currency of a participating member state it shall, subject to the terms
of this Agreement, be made in euros; and 
  
 (ii)
more than one currency or currency unit are at the same time recognized by the central bank of any country as the lawful currency of that country, then (unless otherwise prohibited by law): 
  
 (a) any reference in this Agreement to, and any obligations
arising under this Agreement in, the currency of that country shall be translated into, or paid in, the currency or currency unit of the country designated by the Other Currency Lender; and 
  
 (b) any translation from one currency or currency unit to
another shall be at the official rate of exchange recognized by the central bank for the conversion of that currency or currency unit into the other, rounded up or down by the Other Currency Lender acting reasonably. 
  
 SECTION 2.17. Multi Currency Loans. 
  
 (a) Determination of Dollar Equivalents. The Other Currency Lender
will determine the Dollar Equivalent amount with respect to any (a) Euro-Dollar Loan that is an Other Currency Advance as of the requested Borrowing date and as of the earlier of (i) any requested continuation date or (ii) ninety days after the
Borrowing date of any outstanding Euro-Dollar Loans that is an Other Currency Advance, (b) outstanding Euro-Dollar Loans that are an Other Currency Advance as of such dates as may be requested by the Required Banks, but in no event more frequently
than once a week, (c) upon the request of the Administrative Agent, and (d) any Euro-Dollar Loan that is an Other Currency Advance with respect to calculations made under the definition of EBITDA, as of the date of such calculations (each such date
a “Determination Date”). 
  
 (b) Notification
of Availability. In the event the Other Currency requested or elected by a requesting Borrower to be continued is not available to the Other Currency Lender, then the Other Currency Lender shall, in the case of Other Currency Advances (other
than Other Currency Overdraft Advances), notify such Borrower no later than the date of the proposed Other Currency Borrowing and, in the case of Other Currency Overdraft Advances, pursuant to the terms of the Other Currency Overdraft Facility
Letter. 
  
 (c) Consequences of Non-Availability. If the
Other Currency Lender notifies a Borrower pursuant to Section 2.17(b) that the Other Currency requested or elected by a requesting Borrower to be continued is not available, such notification shall subject to the terms of Section 8.04, in the
case of any Notice of Other Currency Borrowing, revoke such Notice of Other Currency Borrowing. 
  
 SECTION 2.18. Funding. Each Bank may, if it so elects, fulfill its obligation to make, continue or convert Euro-Dollar Loans hereunder by causing
one of its foreign branches or 
  

 52 

 Affiliates (or an international banking facility created by such Bank) to make or maintain such Euro-Dollar Loan;
provided, however, that such Euro-Dollar Loan shall nonetheless be deemed to have been made and to be held by such Bank, and the obligation of the Borrowers to repay such Euro-Dollar Loan shall nevertheless be to such Bank for the
account of such foreign branch, Affiliate or international banking facility. In addition, the Borrowers hereby consent and agree that, for purposes of any determination to be made for purposes of Article VIII or Section 2.12, it shall be
conclusively assumed that each Bank elected to fund all Euro-Dollar Loans by purchasing Dollar deposits in its Lending Office’s interbank eurodollar market. 
  
 SECTION 2.19. Other Currency Letters of Credit. 
  
 (a) The Other Currency Issuing Bank may, from time to time upon request of a U.S. Borrower or Non-U.S. Borrower, in its sole
discretion issue Other Currency Letters of Credit for the account of such requesting U.S. Borrower or Non-U.S. Borrower, subject to satisfaction of the conditions referenced in Section 3.04. 
  
 (b) Each Other Currency Letter of Credit shall be subject to the provisions
of this Agreement and to the provisions set forth in the Other Currency Letter of Credit Agreement executed by the requesting U.S. Borrower or Non-U.S. Borrower, as the case may be, in connection with the issuance of such Other Currency Letter of
Credit. The Borrowers agree to promptly perform and comply with the terms and conditions of each Other Currency Letter of Credit Agreement. 
  
 (c) The payment by the Other Currency Issuing Bank of a draft drawn under any Other Currency Letter of Credit shall constitute for all purposes of this
Agreement a Other Currency Letter of Credit Advance in the amount of such draft. 
  
 (d) The Other Currency Issuing Bank shall furnish (A) to the Administrative Agent and each Bank on the tenth Domestic Business Day of each April, July, October and January, a written report summarizing the issuance
and expiration dates of Other Currency Letters of Credit issued during the preceding calendar quarter and (B) to the Administrative Agent and each Bank upon request a written report setting forth the aggregate Other Currency Undrawn Amounts.

  
 (e) The Other Currency Issuing Bank will notify the Borrower
and the Administrative Agent promptly of the presentment for payment of any Other Currency Letter of Credit, together with notice of the date such payment shall be made, and the Administrative Agent promptly will notify the Banks of such matters.

  
 (f) In the event that the Other Currency Issuing Bank makes
any payment under any Other Currency Letter of Credit and the Non-U.S. Borrowers shall not have timely satisfied in full the Other Currency Letter of Credit Advance to the Other Currency Issuing Bank pursuant to Section 2.19, the Non-U.S. Borrowers
shall be deemed to have delivered a Notice of Other Currency Borrowing to the Administrative Agent and Other Currency Lender requesting an Other Currency Borrowing pursuant to Section 2.16 on the date (and time) of such Other Currency Letter of
Credit Advance. 
  

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 SECTION 2.20. Additional Borrowers; Joint and Several Liability. 
  
 (a) Subject to the terms and conditions set forth herein, the Company shall
have the right, at any time and from time to time from the Restatement Effective Date until the Termination Date, to cause a Consolidated Subsidiary to become either a U.S. Borrower or a Non-U.S. Borrower under this Agreement (referred to herein as
a “New Borrower”). The following terms and conditions shall apply to the addition of any such New Borrower: (1) No fewer than 45 days prior to the proposed effective date, the Company shall provide the Administrative Agent with written
notice that it intends to add a New Borrower pursuant to this Section 2.20(a) which notice shall set forth the name of the proposed New Borrower, specify whether the New Borrower will be a U.S. Borrower or a Non-U.S. Borrower and be accompanied with
a complete and accurate copy of the New Borrower’s Organic Documents; (2) a proposed New Borrower that is intended to be a U.S. Borrower must be a U.S. Subsidiary; (3) a proposed New Borrower that is intended to be a Non-U.S. Borrower must be a
Non-U.S. Subsidiary; (4) the Company must own no less than 65% of the Capital Securities of the proposed New Borrower and the Company must possess, directly or indirectly, the power to direct or cause the direction of the management and policies of
the New Borrower through the ownership of Capital Securities; (5) such New Borrower must: (a) if a U.S. Borrower, become a party to, and agree to be bound by the terms of, this Agreement, the Security Agreement and the other Loan Documents pursuant
to a Joinder Agreement, in the form attached hereto as Exhibit F-2 satisfactory to the Administrative Agent in all respects; or (b) if a Non-U.S. Borrower, become a party to, and agree to be bound by the terms of, this Agreement and the other Loan
Documents to which the other Non-U.S. Borrowers are a party pursuant to a Joinder Agreement, in the form attached hereto as Exhibit F-3 satisfactory to the Administrative Agent in all respects (such Joinder Agreement referenced in (a) and (b) being
referred to herein as the “New Borrower Joinder Agreement”), (6) the Loan Parties and Banks shall execute the New Borrower Joinder Agreement on or before the date on which such Person shall become a Borrower hereunder, (7) immediately
before and after the effective date of such New Borrower Joinder Agreement, no Default shall have occurred and be continuing; (8) the representations and warranties of the Loan Parties contained in Article IV of this Agreement shall be true, on and
as of the effective date of such New Borrower Joinder Agreement, (9) the Borrowers shall execute and re-execute such Notes as are necessary to reflect the New Borrower, (10) the conditions set forth in Section 3.02 shall be true and correct on the
effective date of such New Borrower Joinder Agreement, and (11) the Company and the New Borrower shall also cause the items specified in Section 3.01(c), (f), (h) (if such New Borrower is a U.S. Borrower), (i) and (n) to be delivered to the
Administrative Agent concurrently with the New Borrower Joinder Agreement, modified appropriately to refer to such instrument and such New Borrower. 
  
 (b) The Borrowers are accepting the joint and several liability provided for hereunder in consideration of the financial accommodations provided and to be
provided by the Administrative Agent and Banks under this Agreement for the mutual benefit, directly and indirectly, of the Borrowers and in consideration of each of the undertakings of each Borrower herein to accept joint and several liability, for
their mutual benefit, for the obligations of each of the other of them. 
  
 (c) The Borrowers, jointly and severally as hereinafter described, hereby irrevocably and unconditionally accept, not merely as surety but also as co-debtors, joint and several liability with respect to the payment and performance of all of
the Obligations (including, 
  

 54 

 without limitation, all indebtedness, liabilities and obligations under this Agreement, the Notes and the other Loan
Documents), it being the intention of the parties hereto that all the Obligations shall be the joint and several obligations of all the Borrowers without preference or distinction among them. Notwithstanding anything contained herein to the
contrary, each Non-U.S. Borrower shall only be liable for the Non-U.S. Obligations and the indemnities contained herein and not for any other amounts. 
  
 (d) If and to the extent that any Borrower shall fail to make any payment with respect to any of the Obligations, as and when due or to perform any of the
Obligations in accordance with the terms thereof, then in each such event each of the other Borrowers will, forthwith upon demand by the Administrative Agent, make such payment with respect to, or perform, such Obligations pursuant to the terms
hereof. 
  
 (e) Each Borrower hereby acknowledges and consents to
all provisions of this Agreement. In connection with its obligations under this Section, except to the extent that notice is expressly required by this Agreement, each Borrower hereby waives notice of acceptance of the joint and several liability
contained in this Section, notice of any loan or advance to any Borrower under this Agreement, notice of the occurrence of any Default or any Event of Default or of any demand upon any Borrower for any payment under this Agreement, notice of any
action at any time taken or omitted by the Administrative Agent or any Bank under or in respect of this Agreement, the Notes or any other Loan Document and, generally, all demands, notices, protests and other formalities of every kind in connection
with the joint and several liability contained in this Section and the other provisions of this Agreement. In connection with its obligations under this Section, each Borrower hereby assents to, and waives notice of, any extension or postponement of
the time for the payment of any of the indebtedness, liabilities and obligations under this Agreement, the Notes and the other Loan Documents, the acceptance of any partial payment thereon, any waiver, consent or other action or acquiescence by the
Administrative Agent or any Bank at any time or times in respect of any Default by any Borrower in the performance or satisfaction of any term, covenant, condition or provision of this Agreement, the Notes or any other Loan Document, any and all
other indulgences whatsoever by the Administrative Agent or any Bank in respect of any of the Obligations, and the taking, addition, substitution or release, in whole or in part, at any time or times, of any security for any of the Obligations or
the addition, substitution or release, in whole or in part, of any Person or Persons primarily or secondarily liable in respect of any of the Obligations. Each of the Borrowers also waives: (I) any right to require the Administrative Agent or any
Bank to (A) proceed against any other Person, including any other Borrower or any Guarantor, or (B) pursue any other remedy; and (II) any defense arising by reason of (A) any disability or other defense of any Borrower, any Guarantor or any other
Person, (B) the cessation from any cause whatsoever, other than payment or performance in full, of any of the Obligations of the Borrowers, any Guarantor or any other Person, or (C) any act or omission by the Administrative Agent or any Bank which
directly or indirectly results in or aids the discharge of any Borrower, any Guarantor or any Obligations by operation of law or otherwise. The obligations of each Borrower under this Section shall not be diminished or rendered unenforceable by any
winding up, reorganization, arrangement, liquidation, reconstruction or similar proceeding with respect to any Borrower, any Guarantor, the Administrative Agent or any Bank. The joint and several liability of each Borrower in this Section shall
continue in full force and effect notwithstanding any absorption, merger, amalgamation or any other change whatsoever in the name, charter, membership, constitution or place of formation of any Borrower, any Guarantor, the Administrative Agent or
any Bank. Each 
  

 55 

 of the Borrowers agrees that each of the waivers set forth above are made with such Borrower’s full knowledge of
their significance and consequences, and such Borrower agrees that, under the circumstances, the waivers are reasonable and not contrary to public policy or law. If any of said waivers are determined to be contrary to any applicable law or public
policy, such waivers shall be effective only to the extent permitted by law. 
  
 (f) The provisions of this Section 2.20 are made for the benefit of the Administrative Agent and the Banks and their respective successors and assigns, and may be enforced by the Administrative Agent from time to time
against any of the Borrowers as often as occasion therefore may arise and without requirement on the part of the Administrative Agent or any Bank first to marshal any of their claims or to exercise any of their rights against any other Borrower or
to exhaust any remedies available to the Administrative Agent or any Bank against the other Borrower or to resort to any other source or means of obtaining payment of any of the indebtedness, liabilities and obligations evidenced by or arising under
this Agreement, the Note and the Loan Documents or to elect any other remedy. The provisions of this Section 2.20 shall remain in effect until all the indebtedness, liabilities and obligations evidenced by or arising under this Agreement, the Notes
and the Loan Documents shall have been paid in full or otherwise fully satisfied. If at any time, any payment, or any part thereof, made in respect of any of the indebtedness, liabilities and obligations evidenced by or arising under this Agreement,
the Notes and the Loan Documents, is rescinded or must otherwise be restored or returned by the Administrative Agent or any Bank upon the insolvency, Administrative Agent or any Bankruptcy or reorganization of any of the Borrowers, or otherwise, the
provisions of this Section 2.20 will forthwith be reinstated in effect, as though such payment had not been made. 
  
 (g) Notwithstanding any provision to the contrary contained herein, in the Notes or in any other of the Loan Documents, to the extent the joint
obligations of any Borrower shall be adjudicated to be invalid or unenforceable for any reason (including, without limitation, because of any applicable state or federal law relating to fraudulent conveyances or transfers) then the obligations of
each Borrower hereunder shall be limited to the maximum amount that is permissible under applicable law (whether federal or state and including, without limitation, the federal Bankruptcy Code). 
  
 (h) Without limiting in anyway the foregoing and notwithstanding anything to
the contrary contained herein or in any Letter of Credit Agreement but subject to the terms of Section 2.20(c), the Borrowers hereby acknowledge and agree that they shall be obligated, jointly and severally, to reimburse the applicable Issuing Bank
upon each Letter of Credit Advance and it shall be deemed to be obligated in respect of each such Letter of Credit issued hereunder (whether the account party on such letter of credit is any other Borrower or Guarantor). 
  
 ARTICLE III 
  
 CONDITIONS TO BORROWINGS 
  
 SECTION 3.01. Conditions to First Borrowing. The obligation of each Bank to make an Advance on the occasion of the first Borrowing is subject to
the satisfaction of the conditions set forth in Section 3.02 and the following additional conditions: 
  
 (a) receipt by the Administrative Agent from each of the parties hereto of a duly executed counterpart of this Agreement signed by such party; 

 

 56 

 (b) receipt by the Administrative Agent of a duly executed Note for the account of each lender complying
with the provisions of Section 2.04; 
  
 (c) receipt by the
Administrative Agent of opinions (together with any opinions of local counsel relied on therein) of Troutman Sanders LLP, Eversheds and John Ellsworth, Esq., General Counsel of the Company, counsel for the Borrowers and Guarantors, dated as of the
Restatement Effective Date, substantially in the form of Exhibits C-1, C-2 and C-3 hereto and covering such additional matters relating to the transactions contemplated hereby as the Administrative Agent or any Bank may reasonably request;

  
 (d) receipt by the Administrative Agent of an opinion of
Womble Carlyle Sandridge & Rice, PLLC, special counsel for the Administrative Agent, dated as of the Restatement Effective Date, substantially in the form of Exhibit N hereto; 
  
 (e) receipt by the Administrative Agent of a certificate (the “Closing Certificate”), dated the date of the first
Borrowing, substantially in the form of Exhibit G hereto, signed by a principal financial officer of each Loan Party, to the effect that (i) no Default has occurred and is continuing on the date of the first Borrowing and (ii) the representations
and warranties of the Loan Parties contained in Article IV are true on and as of the date of the first Borrowing hereunder; 
  
 (f) receipt by the Administrative Agent of all documents which the Administrative Agent or any Bank may reasonably request relating to the existence of
each Loan Party, the authority for and the validity of this Agreement, the Notes and the other Loan Documents, and any other matters relevant hereto, all in form and substance satisfactory to the Administrative Agent, including without limitation a
certificate of incumbency of each Loan Party (the “Officer’s Certificate”), signed by the Secretary or an Assistant Secretary of the respective Loan Party, substantially in the form of Exhibit H hereto, certifying as to the names,
true signatures and incumbency of the officer or officers of the respective Loan Party, authorized to execute and deliver the Loan Documents, and certified copies of the following items: (i) the Loan Party’s Organic Documents, (ii) a
certificate of the Secretary of State or other comparable Governmental Authority of such Loan Party’s jurisdiction of organization as to the good standing of such Loan Party, and (iii) the action taken by the Board of Directors of the Loan
Party authorizing the Loan Party’s execution, delivery and performance of this Agreement, the Notes and the other Loan Documents to which the Loan Party is a party; 
  
 (g) receipt by the Administrative Agent of a Notice of Revolving Advance Borrowing in the case of a Revolving Advance, a
Swing Line Advance Request in the case of a Swing Line Advance and a Notice of Other Currency Borrowing in the case of an Other Currency Advance (other than an Other Currency Overdraft Advance); 
  
 (h) the Security Agreement shall have been duly executed by the U.S.
Borrowers and Guarantors and shall have been delivered to the Administrative Agent and shall be in full force and effect and each document (including each Uniform Commercial Code financing statements) required by law or reasonably requested by the
Administrative Agent to be 
  

 57 

 filed, registered or recorded in order to create in favor of the Administrative Agent for the benefit of the Secured
Parties a valid, legal and perfected first-priority security interest in and lien on the Collateral described in the Security Agreement shall have been delivered to the Administrative Agent; 
  
 (i) the Administrative Agent shall have received the results of a search of
the Uniform Commercial Code filings (or equivalent filings) made with respect to the U.S. Borrowers and Guarantors in the states (or other jurisdictions) in which the chief executive office of each such person is located, any offices of such persons
in which records have been kept relating to the Collateral and the other jurisdictions in which Uniform Commercial Code filings (or equivalent filings) are to be made pursuant to the preceding paragraph, together with copies of the financing
statements (or similar documents) disclosed by such search, and accompanied by evidence satisfactory to the Administrative Agent that the Liens indicated in any such financing statement (or similar document) have been released or subordinated to the
satisfaction of Administrative Agent; 
  
 (j) receipt by the
Administrative Agent and approval by the Banks of the insurance required under this Agreement; 
  
 (k) receipt by the Administrative Agent of a fully executed: (1) IBM Intercreditor Agreement, in form and content satisfactory to the Administrative Agent; and (2) Textron Intercreditor Agreement in form and content
satisfactory to the Administrative Agent; 
  
 (l) the
Intercreditor Agreement duly executed by the Borrowers, the Administrative Agent, the IR Bank, the Banks and the Issuing Banks; 
  
 (m) the U.S. Borrowers shall have paid all fees required to be paid by it on the Restatement Effective Date, including all fees required hereunder and
under the Administrative Agent’s Letter Agreement to be paid as of such date and shall have reimbursed the Administrative Agent and Wachovia for all fees, costs and expenses of closing the transactions contemplated hereunder and under the other
Loan Documents, including the legal and other document preparation costs incurred by the Administrative Agent and Wachovia; and 
  
 (n) such other documents or items as the Administrative Agent, the Banks or their counsel may reasonably request. 
  
 SECTION 3.02. Conditions to All Borrowings. The obligation of each
Bank to make an Advance on the occasion of each Borrowing (including, without limitation, the obligation of the Swing Line Lender to make a Swing Line Advance and the obligation of the Other Currency Lender to make an Other Currency Advance) is
subject to the satisfaction of the following conditions: 
  
 (a)
receipt by the Administrative Agent of: (1) Notice of Borrowing as required by Section 2.02 in the case of a Revolving Borrowing; (2) a Swing Line Advance Request in the case of a Swing Line Advance in compliance with Section 2.15; and (3) a Notice
of Other Currency Borrowing in the case of an Other Currency Advance (other than an Other Currency Overdraft Advance) in compliance with Section 2.16; 
  

 58 

 (b) the fact that, immediately before and after such Borrowing, no Default shall have occurred and be
continuing; 
  
 (c) the fact that the representations and
warranties of the Loan Parties contained in Article IV of this Agreement shall be true, on and as of the date of such Borrowing, except to the extent such representations and warranties specifically relate to a date earlier than the date of such
Borrowing, in which case such representations and warranties shall have been true on and as of such earlier date; and 
  
 (d) the fact that, immediately after such Borrowing (i) the aggregate outstanding principal amount of the Revolving Advances of each Other Revolving
Advance Lender together with such Bank’s Pro Rata Facility Share of the aggregate outstanding principal amount of all Swing Line Advances, U.S. Dollar Letter of Credit Advances, U.S. Dollar Undrawn Amounts and the aggregate principal amount of
the participations in Revolving Advances and U.S. Dollar Letter of Credit Advances held by such Bank pursuant to Section 2.02(e), will not exceed the amount of its Facility Commitment; (ii) the aggregate principal Dollar Equivalent Amount of all
outstanding Other Currency Advances, Other Currency Undrawn Amounts and Other Currency Letter of Credit Advances shall not exceed the total Other Currency Commitments; (iii) the sum of (a) the Dollar Equivalent of the Other Currency Lender’s
Pro Rata Other Currency Share of the aggregate outstanding principal amount of all Other Currency Advances; and (b) the Dollar Equivalent of the Other Currency Lender’s Pro Rata Other Currency Share of the aggregate outstanding principal amount
of the Other Currency Letter of Credit Advances and Other Currency Undrawn Amounts; and (c) the aggregate principal amount of the participations in Revolving Advances and U.S. Dollar Letter of Credit Advances held by such Bank pursuant to Section
2.02(e) shall not exceed the amount of such Other Currency Lender’s Facility Commitment (after giving effect to the purchase and sale of participations in the Revolving Advances and U.S. Dollar Letter of Credit Advances required by Section
2.02(e)(3)); (iv) the aggregate outstanding principal amount of the Revolving Advances together with the aggregate outstanding principal amount of all Swing Line Advances, the Dollar Equivalent of Other Currency Advances, the Dollar Equivalent of
Other Currency Letter of Credit Advances, the Dollar Equivalent of Other Currency Undrawn Amounts, U.S. Dollar Letter of Credit Advances and U.S. Dollar Undrawn Amounts, will not exceed the aggregate amount of the Facility Commitments of all of the
Banks as of such date; and (v) the aggregate outstanding principal amount of Revolving Advances by BB&T (less the aggregate principal amount of the participations in Revolving Advances and U.S. Dollar Letter of Credit Advances held by (or which
can be sold upon BB&T’s request to) other Banks pursuant to Section 2.02(e)) together with BB&T’s Pro Rata Facility Share of the aggregate outstanding principal amount of all U.S. Dollar Letter of Credit Advances, Swing Line
Advances and U.S. Dollar Undrawn Amounts shall not exceed the amount of BB&T’s Facility Commitment. 
  
 Each Borrowing hereunder shall be deemed to be a representation and warranty by the Loan Parties on the date of such Borrowing as to the truth and
accuracy of the facts specified in clauses (b), (c) and (d) of this Section. 
  
 SECTION 3.03. Conditions to Issuance of U.S. Dollar Letters of Credit. The issuance by the U.S. Dollar Issuing Bank of each U.S. Dollar Letter of Credit shall be subject to satisfaction of the conditions set
forth in the related U.S. Dollar Letter of Credit Agreement and satisfaction of the following conditions: 
  
 (a) the fact that, immediately before and after the issuance of such U.S. Dollar Letter of Credit, no Default shall have occurred and be continuing;

  

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 (b) the fact that the representations and warranties of the Loan Parties contained in Article IV of this
Agreement shall be true, on and as of the date of issuance of such U.S. Dollar Letter of Credit, except to the extent such representations and warranties specifically relate to a date earlier than the date of issuance of such U.S. Dollar Letter of
Credit, in which case such representations and warranties shall have been true on and as of such earlier date; 
  
 (c) the fact that, immediately after the issuance of such U.S. Dollar Letter of Credit: (i) the sum of (A) the entire outstanding principal amount of the
Revolving Advances, (B) the aggregate outstanding principal amount of the U.S. Dollar Letter of Credit Advances, (C) the aggregate outstanding principal amount of Swing Line Advances, (D) the Dollar Equivalent of the aggregate outstanding principal
amount of Other Currency Advances, Other Currency Letter of Credit Advances and Other Currency Undrawn Amounts; and (E) the aggregate U.S. Dollar Undrawn Amounts, will not exceed the aggregate amount of the Facility Commitments of all of the Banks
at such time; (ii) the sum of (a) the aggregate outstanding principal amount of the Revolving Advances of each Other Revolving Advance Lender together with such Revolving Advance Lender’s Pro Rata Revolving Advance Share of the aggregate
outstanding principal amount of all Swing Line Advances, U.S. Dollar Letter of Credit Advances, U.S. Dollar Undrawn Amounts and the aggregate principal amount of the participations in Revolving Advances and U.S. Dollar Letter of Credit Advances held
by such Bank pursuant to Section 2.02(e), will not exceed the amount of its Revolving Advance Commitment; and (iii) the aggregate outstanding principal amount of Revolving Advances by BB&T together with BB&T’s Pro Rata Revolving Advance
Share of the aggregate outstanding principal amount of all U.S. Dollar Letter of Credit Advances, Swing Line Advances, and U.S. Dollar Undrawn Amounts shall not exceed the amount of BB&T’s Revolving Advance Commitment; 
  
 (d) the fact that immediately after the issuance of such U.S. Dollar Letter
of Credit the sum of: (i) the aggregate outstanding principal amount of the U.S. Dollar Letter of Credit Advances, plus (ii) the aggregate U.S. Dollar Undrawn Amounts, will not exceed $25,000,000; and 
  
 (e) no U.S. Dollar Letter of Credit shall have an expiry date or termination
date on or after the earlier of: (1) the date twelve months after the date of the issuance of such U.S. Dollar Letter of Credit (provided that a U.S. Dollar Letter of Credit may provide for automatic annual renewals); or (2) the date two Domestic
Business Days prior to the Termination Date. 
  
 SECTION 3.04.
Conditions to Issuance of Other Currency Letters of Credit. The issuance by the Other Currency Issuing Bank of each Other Currency Letter of Credit shall be subject to satisfaction of the conditions set forth in the related Other Currency
Letter of Credit Agreement and satisfaction of the following conditions: 
  
 (a) the fact that, immediately before and after the issuance of such Other Currency Letter of Credit, no Default shall have occurred and be continuing; 
  

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 (b) the fact that the representations and warranties of the Loan Parties contained in Article IV of this
Agreement shall be true, on and as of the date of issuance of such Other Currency Letter of Credit, except to the extent such representations and warranties specifically relate to a date earlier than the date of issuance of such Other Currency
Letter of Credit, in which case such representations and warrants shall have been true on and as of such earlier date; 
  
 (c) the fact that, immediately after the issuance of such Other Currency Letter of Credit: (i) the sum of (A) the entire outstanding principal amount of
the Revolving Advances, (B) the aggregate outstanding principal amount of the U.S. Dollar Letter of Credit Advances, (C) the aggregate outstanding principal amount of Swing Line Advances, (D) the Dollar Equivalent of the aggregate outstanding
principal amount of Other Currency Advances, the Other Currency Letter of Credit Advances and the Other Currency Undrawn Amounts; and (E) the aggregate U.S. Dollar Undrawn Amounts, will not exceed the aggregate amount of the Facility Commitments of
all of the Banks at such time; and (ii) the sum of (a) the Dollar Equivalent of the aggregate outstanding principal amount of all Other Currency Advances made by such Other Currency Lender; (b) the Dollar Equivalent of the aggregate outstanding
principal amount of the Other Currency Letter of Credit Advances and Other Currency Undrawn Amounts; and (c) the aggregate principal amount of the participations in Revolving Advances and U.S. Dollar Letter of Credit Advances held by such Bank
pursuant to Section 2.02(e) shall not exceed the amount of such Other Currency Lender’s Facility Commitment (after giving effect to the purchase and sale of participations in the Revolving Advances and U.S. Dollar Letter of Credit Advances
required by Section 2.02(e)(3)); 
  
 (d) the fact that immediately
after the issuance of such Other Currency Letter of Credit the sum of: (i) the Dollar Equivalent of the aggregate outstanding principal amount of the Other Currency Letter of Credit Advances, plus (ii) the Dollar Equivalent of the aggregate Other
Currency Undrawn Amounts, will not exceed $15,000,000; 
  
 (e) the
fact that immediately after the issuance of such Other Currency Letter of Credit the sum of: (i) the Dollar Equivalent of the aggregate outstanding principal amount of the Other Currency Advances, plus (ii) the Dollar Equivalent of the aggregate
outstanding principal amount of the Other Currency Letter of Credit Advances, plus (iii) the Dollar Equivalent of the aggregate Other Currency Undrawn Amounts, will not exceed $27,500,000; and 
  
 (f) no Other Currency Letter of Credit shall have an expiry date or
termination date on or after the earlier of: (1) the date twelve months after the date of the issuance of such Other Currency Letter of Credit (provided that a Other Currency Letter of Credit may provide for automatic annual renewals); or (2) the
date two Domestic Business Days prior to the Termination Date. 
  

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 ARTICLE IV 
  
 REPRESENTATIONS AND WARRANTIES 
  
 The Loan Parties represent and warrant that: 
  
 SECTION 4.01. Existence and Power. Each Loan Party is duly organized, validly existing and in good standing under the laws of the jurisdiction of
its incorporation or organization, as the case may be, is duly qualified to transact business in every jurisdiction where, by the nature of its business, such qualification is necessary, and has all organizational powers and all governmental
licenses, authorizations, consents and approvals required to carry on its business as now conducted, except in each case where the failure to be so qualified or to have such power, license, authorization, consent or approval would not reasonably be
expected to have a Material Adverse Effect. 
  
 SECTION 4.02.
Organizational and Governmental Authorization; No Contravention. The execution, delivery and performance by each Loan Party of this Agreement, the Notes, the Collateral Documents and the other Loan Documents (i) are within each Loan
Party’s organizational powers, (ii) have been duly authorized by all necessary organizational action, (iii) require no action by or in respect of, or filing with, any governmental body, agency or official, (iv) do not contravene, or constitute
a default under, any provision of applicable law or regulation or of the Organic Documents of each Loan Party or of any agreement, judgment, injunction, order, decree or other instrument binding upon each Loan Party or any of its Subsidiaries, and
(v) do not result in the creation or imposition of any Lien on any asset of the Loan Parties or any of their respective Subsidiaries other than the Liens created by the Loan Documents. 
  
 SECTION 4.03. Binding Effect. This Agreement constitutes a valid and binding agreement of the Loan Parties
enforceable in accordance with its terms, and the Notes, the Collateral Documents and the other Loan Documents, when executed and delivered in accordance with this Agreement, will constitute valid and binding obligations of the Loan Parties
enforceable in accordance with their respective terms, provided that the enforceability hereof and thereof is subject in each case to general principles of equity and to bankruptcy, insolvency and similar laws affecting the enforcement of
creditors’ rights generally. 
  
 SECTION 4.04. Financial
Information. (a) The consolidated balance sheet of the Company and its Consolidated Subsidiaries as of June 30, 2003 and the related consolidated statements of income, shareholders’ equity and cash flows for the Fiscal Year then ended,
reported on by Ernst & Young, LLP, copies of which have been delivered to each of the Banks, and the unaudited consolidated financial statements of the Company for the interim period ended March 31, 2004, copies of which have been delivered to
each of the Banks, fairly present, in conformity with GAAP, the consolidated financial position of the Company and its Consolidated Subsidiaries as of such dates and their consolidated results of operations and cash flows for such periods stated,
except (a) that such interim financial statements are subject to year-end adjustment and (b) such interim financial statements shall not include footnotes customarily contained in the Company’s annual financial statements. 
  
 (b) Since March 31, 2004 there has been no event, act, condition or
occurrence having a Material Adverse Effect. 
  
 SECTION 4.05.
Litigation. There is no action, suit or proceeding pending, or to the knowledge of the Loan Parties threatened, against or affecting the Loan Parties or any of their respective Subsidiaries before any court or arbitrator or any governmental
body, agency or official which would reasonably be expected to have a Material Adverse Effect or which in any 
  

 62 

 manner draws into question the validity or enforceability of, or could impair the ability of the Loan Parties to perform
their respective obligations under, this Agreement, the Notes, the Collateral Documents or any of the other Loan Documents. 
  
 SECTION 4.06. Compliance with ERISA and Foreign Employee Benefit Plan Compliance. (a) The Loan Parties and each member of the Controlled Group have
fulfilled their obligations under the minimum funding standards of ERISA and the Code with respect to each Plan and are in compliance in all material respects with the presently applicable provisions of ERISA and the Code with respect to each Plan,
and have not incurred any liability to the PBGC or a Plan under Title IV of ERISA. 
  
 (b) Neither the Loan Parties nor any member of the Controlled Group is or ever has been obligated to contribute to any Multiemployer Plan. 
  
 (c) Each Foreign Employee Benefit Plan maintained or contributed to by the Loan Parties, any Non-U.S. Subsidiaries or any
member of the Controlled Group is in compliance with all laws, regulations and rules applicable thereto and the respective requirements of the governing documents for such Foreign Employee Benefit Plan except where such failure would not reasonably
be expected to have a Material Adverse Effect. The aggregate of the liabilities to provide all of the accrued benefits under any Foreign Pension Plan maintained or contributed to by the Loan Parties, any Non-U.S. Subsidiaries or any member of the
Controlled Group does not exceed the current fair market value of the assets held in the trust or other funding vehicle for such Foreign Pension Plan by an amount in excess of $100,000. With respect to any Foreign Employee Benefit Plan maintained by
the Loan Parties, any Non-U.S. Subsidiaries or any member of the Controlled Group (other than a Foreign Pension Plan), reasonable reserves have been established in accordance with prudent business practice or where required by ordinary accounting
practices in the jurisdiction in which such Foreign Employee Benefit Plan is maintained. The aggregate unfunded liabilities, after giving effect to any reserves for such liabilities, with respect to such Foreign Employee Benefit Plans are not
reasonably expected to have a Material Adverse Effect. There are no actions, suits or claims (other than routine claims for benefits) pending or threatened against the Loan Parties, any Non-U.S. Subsidiaries or any member of the Controlled Group
with respect to any Foreign Employee Benefit Plan other than those which, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. 
  
 SECTION 4.07. Taxes. There have been filed on behalf of the Loan Parties and their respective Subsidiaries all
Federal, state and local income, excise, property and other tax returns which are required to be filed by them and all taxes due pursuant to such returns or pursuant to any assessment received by or on behalf of the Loan Parties or any Subsidiary
have been paid except (a) where such taxes are being contested in good faith by appropriate action and for which reserves have been established on the books of the Loan Parties in accordance with GAAP or (b) where the failure to file such return or
pay such taxes does not result in a Lien on any property of the Loan Parties having a value in excess of $100,000 in the aggregate. The charges, accruals and reserves on the books of the Loan Parties and their respective Subsidiaries in respect of
taxes or other governmental charges are, in the opinion of the Loan Parties, adequate. United States income tax returns of the Loan Parties and their respective Subsidiaries have been examined and closed through the Fiscal Year ended June 30, 1996.

  

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 SECTION 4.08. Subsidiaries. Each of the Loan Party’s Subsidiaries is a corporation or limited
liability company duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or organization, as the case may be, is duly qualified to transact business in every jurisdiction where, by the nature of its
business, such qualification is necessary, and has all organizational powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted, except in each case where the failure to
be so qualified or to have such power, license, authorization, consent or approval would not reasonably be expected to have a Material Adverse Effect. As of the date of this Agreement, no Loan Party has any Subsidiaries except those Subsidiaries
listed on Schedule 4.08 which, accurately sets forth, each such Subsidiary’s complete name and jurisdiction of organization. As of the date of the most recent financial statements provided to the Banks pursuant to Sections 5.01(a) and
5.01(b), no Loan Party has any Material Subsidiaries and Material Non-U.S. Subsidiaries except those Subsidiaries listed on Schedule 4.08 and set forth in the Compliance Certificates provided pursuant to Section 5.01(c), which accurately set forth
the complete name and jurisdiction of organization of each such Material Subsidiary and Material Non-U.S. Subsidiaries. 
  
 SECTION 4.09. Not an Investment Company. No Loan Party nor any Subsidiary of a Loan Party is an “investment company” within the meaning
of the Investment Company Act of 1940, as amended. 
  
 SECTION
4.10 Public Utility Holding Company Act. No Loan Party nor any Subsidiary of a Loan Party is a “holding company”, or a “subsidiary company” of a “holding company”, or an “affiliate” of a “holding
company” or of a “subsidiary company” of a “holding company”, as such terms are defined in the Public Utility Holding Company Act of 1935, as amended. 
  
 SECTION 4.11. Ownership of Property; Liens. Each of the Loan Parties and their respective Subsidiaries has title to
its properties sufficient for the conduct of its business, and none of such property is subject to any Lien except as permitted in Section 5.11. 
  
 SECTION 4.12. No Default. No Loan Party nor any of their respective Subsidiaries is in default under or with respect to any agreement, instrument
or undertaking to which it is a party or by which it or any of its property is bound which would reasonably be expected to have a Material Adverse Effect. No Default or Event of Default has occurred and is continuing. 
  
 SECTION 4.13. Full Disclosure. (a) All information (other than
financial projections) heretofore furnished by any Loan Party to the Administrative Agent or any Bank for purposes of or in connection with this Agreement or any transaction contemplated hereby is, and all such information (other than financial
projections) hereafter furnished by any Loan Party to the Administrative Agent or any Bank will be, to the Company’s good faith knowledge, true, accurate and complete in every material respect on the date as of which such information is stated
or certified, subject however, as to any reservations or qualifications as to the truth or accuracy of such information provided by the Company at the time such information is delivered. Each Loan Party has disclosed to the Banks in writing any and
all facts which could have or cause a Material Adverse Effect. 
  

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 (b) All financial projections shall be believed by the Company at the time furnished to be reasonable,
shall have been prepared on a reasonable basis and in good faith by the Company, and shall have been based on assumptions believed by the Company to be reasonable at the time made and upon the best information then reasonably available to the
Company, and the Company shall not be aware of any facts or information that would lead it to believe that such projections, as so updated, are incorrect or misleading in any material respect. 
  
 SECTION 4.14. Environmental Matters. (a) No Loan Party nor any
Subsidiary of a Loan Party is subject to any Environmental Liability which would reasonably be expected to have a Material Adverse Effect and no Loan Party nor any Subsidiary of a Loan Party has been designated as a potentially responsible party
under CERCLA. None of the Properties has been identified on any current or proposed (i) National Priorities List under 40 C.F.R. § 300, (ii) CERCLIS list or (iii) any list arising from a state statute similar to CERCLA. 
  
 (b) No Hazardous Materials have been or are being used, produced,
manufactured, processed, treated, recycled, generated, stored, disposed of, managed or otherwise handled at, or shipped or transported to or from the Properties or are otherwise present at, on, in or under the Properties, or, to the best of the
knowledge of the Loan Parties, at or from any adjacent site or facility, except (i) for Hazardous Materials, such as cleaning solvents, pesticides and other materials used, produced, manufactured, processed, treated, recycled, generated, stored,
disposed of, and managed or otherwise handled in minimal amounts in the ordinary course of business in compliance with all applicable Environmental Requirements or (ii) where such failure to be in compliance would reasonably be expected to have a
Material Adverse Effect. 
  
 (c) The Loan Parties, and each of
their respective Subsidiaries and Affiliates, has procured all Environmental Authorizations necessary for the conduct of its business, and is in compliance with all Environmental Requirements in connection with the operation of the Properties and
the Loan Party’s, and each of their respective Subsidiary’s and Affiliate’s, respective businesses except where the failure to obtain such Environmental Authorization or to be in compliance would reasonably be expected to have a
Material Adverse Effect. 
  
 SECTION 4.15. Compliance with
Laws. Each Loan Party and each Subsidiary of a Loan Party is in compliance with all applicable laws, except where such failure would not reasonably be expected to have a Material Adverse Effect. 
  
 SECTION 4.16. Capital Securities. All Capital Securities, debentures,
bonds, notes and all other securities of each Loan Party and their respective Subsidiaries presently issued and outstanding are validly and properly issued in accordance with all applicable laws, including, but not limited to, the “Blue
Sky” laws of all applicable states and the federal securities laws. The issued shares of Capital Securities of the Loan Party’s respective Wholly Owned Subsidiaries are owned by the Loan Parties free and clear of any Lien or adverse claim.
At least a majority of the issued shares of capital stock of each of the other Subsidiaries of the Loan Parties (other than Wholly Owned Subsidiaries) is owned by the respective Loan Parties free and clear of any Lien or adverse claim. 

 
 SECTION 4.17. Margin Stock. No Loan Party nor any of their
respective Subsidiaries is engaged principally, or as one of its important activities, in the business of purchasing or carrying any Margin Stock, and no part of the proceeds of any Revolving Advance, 
  

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 Other Currency Advance or Swing Line Advance will be used to purchase or carry any Margin Stock in violation of any
applicable law or regulation or to extend credit to others for the purpose of purchasing or carrying any Margin Stock in violation of any applicable law or regulation, or be used for any purpose which violates, or which is inconsistent with, the
provisions of Regulation X. 
  
 SECTION 4.18. Insolvency.
After giving effect to the execution and delivery of the Loan Documents and the making of the Revolving Advances, Other Currency Advances and Swing Line Advances under this Agreement, no Loan Party will be “insolvent,” within the meaning
of such term as defined in § 101 of Title 11 of the United States Code or Section 2 of the Uniform Fraudulent Transfer Act, or any other applicable state law pertaining to fraudulent transfers, as each may be amended from time to time, or be
unable to pay its debts generally as such debts become due, or have an unreasonably small capital to engage in any business or transaction, whether current or contemplated. 
  
 SECTION 4.19. Security Documents. (a) Upon execution by the Pledgors, the Pledge Agreement shall be effective to
create in favor of the Administrative Agent, for the ratable benefit of the Secured Parties, a legal, valid and enforceable security interest in the Collateral (as defined in the Pledge Agreement) and, when the certificates evidencing the Capital
Securities included in the Collateral are delivered to the Administrative Agent, the Pledge Agreement shall constitute a fully perfected first priority Lien on, and security interest in, all right, title and interest of the Pledgors thereunder in
such Capital Securities, in each case prior and superior in any right to any other Person. 
  
 (b) The Security Agreement is effective to create in favor of the Administrative Agent, for the ratable benefit of the Secured Parties, a legal, valid and enforceable security interest in the Collateral (as defined in
the Security Agreement) and, when financing statements in appropriate form are filed in the UCC Recording Office, the Security Agreement shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of the U.S.
Borrowers and Guarantors in such Collateral and the proceeds thereof, as contemplated by the Security Agreement, in each case prior and superior in right to any other Person. 
  
 SECTION 4.20. Labor Matters. There are no significant strikes, lockouts, slowdowns or other labor disputes against
any Loan Party or any Subsidiary of any Loan Party pending or, to the knowledge of any Loan Party, threatened in each case which would reasonably be expected to have a Material Adverse Effect. The hours generally worked by and payment generally made
to employees of the Loan Parties and each Subsidiary of any Loan Party have not been in violation of the Fair Labor Standards Act or any other applicable federal, state or foreign law dealing with such matters. 
  
 SECTION 4.21. Patents, Trademarks, Etc. To the best of their
knowledge, the Loan Parties and each Subsidiary of a Loan Party owns, or is licensed to use, all patents, trademarks, trade names, copyrights, technology, know-how and processes, service marks and rights with respect to the foregoing that are (a)
used in or necessary for the conduct of their respective businesses as currently conducted and (b) material to the businesses, assets, operations, properties, prospects or condition (financial or otherwise) of the Loan Parties and their respective
Subsidiaries taken as a whole. The use of such patents, trademarks, trade names, copyrights, technology, know-how, processes and rights with respect to the foregoing by the 
  

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 Loan Parties and their respective Subsidiaries, does not infringe on the rights of any Person. Schedule 4.21 sets forth
all registered patents, trademarks and copyrights owned by, or licensed to, the Loan Parties. 
  
 SECTION 4.22. Loans and Investments. No Loan Party nor any of their respective Subsidiaries has any Investment which is outstanding or existing on the Restatement Effective Date except as set forth on Schedule
4.22. 
  
 SECTION 4.23. Anti-Terrorism Laws. To the best of
their knowledge, none of the Borrowers, nor any of their respective Subsidiaries, is in violation of any laws relating to terrorism or money laundering, including, without limitation, the Patriot Act, except as may be disclosed in writing to the
Agent and Banks. 
  
 ARTICLE V 
  
 COVENANTS 
  
 The Loan Parties agree, jointly and severally, that, so long as any Bank has any Commitment hereunder or any Letter of
Credit is outstanding or any amount payable under any Note or Letter of Credit Advance remains unpaid: 
  
 SECTION 5.01. Information. The Company will deliver to each of the Banks: 
  
 (a) within 90 days after the end of each Fiscal Year, a consolidated balance sheet of the Company and its Consolidated
Subsidiaries as of the end of such Fiscal Year and the related consolidated statements of income, shareholders’ equity and cash flows for such Fiscal Year, setting forth in each case in comparative form the figures for the previous fiscal year,
all certified by Ernst & Young LLP or other independent public accountants of nationally recognized standing, with such certification to be free of exceptions and qualifications not acceptable to the Required Banks; 
  
 (b) within 45 days after the end of each of the first three Fiscal Quarters
of each Fiscal Year, a consolidated balance sheet of the Company and its Consolidated Subsidiaries as of the end of such Fiscal Quarter and the related statement of income and statement of cash flows for such Fiscal Quarter and for the portion of
the Fiscal Year ended at the end of such Fiscal Quarter, setting forth in each case in comparative form the figures for the corresponding Fiscal Quarter and the corresponding portion of the previous Fiscal Year, all certified (subject to normal
year-end adjustments) as to fairness of presentation, GAAP (except as to the omission of footnotes) and consistency by the Chief Financial Officer of the Company; 
  
 (c) simultaneously with the delivery of each set of financial statements referred to in clauses (a) and (b) above, a
certificate, substantially in the form of Exhibit I (a “Compliance Certificate”), of the Chief Financial Officer of the Company or if authorized by the Company’s Board of Directors, the Executive Director of Treasury of the Company
(i) setting forth in reasonable detail the calculations required to establish whether the Loan Parties were in compliance with the requirements of Sections 5.03 through 5.11, inclusive, 5.14, 5.29 and 5.30 on the date of such financial statements,
(ii) setting forth in reasonable detail the calculations establishing the identities of the Material Subsidiaries and Material Non-U.S. Subsidiary on the date of such financial statements, and (iii) stating whether any Default exists on the date of
such certificate and, if any Default then exists, setting forth the details thereof and the action which the Loan Parties are taking or propose to take with respect thereto; 
  

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 (d) promptly from time to time upon the request of the Administrative Agent, a certificate of the Chief
Financial Officer of the Company or if authorized by the Company’s Board of Directors, the Executive Director of Treasury of the Company setting forth all registered patents, trademarks and copyrights owned by, or licensed to, the Loan Parties;

  
 (e) within 5 Domestic Business Days after the Company becomes
aware of the occurrence of any Default, a certificate of the Chief Financial Officer of the Company setting forth the details thereof and the action which the Company is taking or proposes to take with respect thereto; 
  
 (f) promptly upon the mailing thereof to the shareholders of the Company
generally, copies of all financial statements, reports and proxy statements so mailed; 
  
 (g) promptly upon the filing thereof, copies of all registration statements (other than the exhibits thereto and any registration statements on Form S-8 or its equivalent) and annual, quarterly or monthly reports
which the Company shall have filed with the Securities and Exchange Commission; 
  
 (h) if and when the Company or any member of the Controlled Group (i) gives or is required to give notice to the PBGC of any “reportable event” (as defined in Section 4043 of ERISA) with respect to any Plan
which might constitute grounds for a termination of such Plan under Title IV of ERISA, or knows that the plan administrator of any Plan has given or is required to give notice of any such reportable event, a copy of the notice of such reportable
event given or required to be given to the PBGC; (ii) receives notice of complete or partial withdrawal liability under Title IV of ERISA, a copy of such notice; or (iii) receives notice from the PBGC under Title IV of ERISA of an intent to
terminate or appoint a trustee to administer any Plan, a copy of such notice; 
  
 (i) promptly after the Company knows of the commencement thereof, notice of any litigation, dispute or proceeding involving a claim against a Loan Party and/or any Subsidiary of a Loan Party for $2,000,000 or more in
excess of amounts covered in full by applicable insurance; and 
  
 (j) from time to time such additional information regarding the financial position or business of the Company and its Subsidiaries as the Administrative Agent, at the request of any Bank, may reasonably request. 
  
 Documents required to be delivered pursuant to Section 5.01(a) or
Section 5.01(b) or Section 5.01(f) or Section 5.01(g) (to the extent any such documents are included in materials otherwise filed with the Securities Exchange Commission) may be delivered electronically and if so delivered,
shall be deemed to have been delivered on the date on which the Company posts such documents, or provides a link thereto on the Company’s website on the Internet or that such documents become available on EDGAR provided that the Company
shall deliver paper copies of such documents to the Administrative Agent or any Bank that requests the Company to deliver such paper copies until a written request to cease delivering paper copies is given by the Administrative Agent or such Bank
and (ii) the Company shall notify (which may be by facsimile 
  

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 or electronic mail) the Administrative Agent and each Bank of the posting of any documents described in Sections 5.01(f)
or Section 5.01(g). Notwithstanding anything contained herein, in every instance the Company shall be required to provide copies of an executed Compliance Certificate required by Section 5.01(c) to the Administrative Agent and each of the
Banks. The Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and shall have no responsibility to monitor compliance by the Company with any such request for delivery, and
each Bank shall be solely responsible for requesting delivery to it or maintaining its copies of such documents. 
  
 SECTION 5.02. Inspection of Property, Books and Records. The Company will (i) keep, and will cause each Subsidiary to keep, proper books of record
and account in which full, true and correct entries in conformity with generally accepted accounting principles, consistently applied, shall be made of all dealings and transactions in relation to its business and activities; and (ii) permit, and
will cause each Subsidiary to permit, representatives of any Bank at such Bank’s expense and upon reasonable notice and during normal business hours prior to the occurrence of an Event of Default and at the Borrowers’ expense, without
notice and at such times as such Bank deems appropriate after the occurrence of an Event of Default to visit and inspect any of their respective properties, to examine and make abstracts from any of their respective books and records and to discuss
their respective affairs, finances and accounts with their respective officers, employees and independent public accountants. The Borrowers agree to cooperate and assist in such visits and inspections, in each case at such reasonable times and as
often as may reasonably be desired. 
  
 SECTION 5.03. Ratio of
Consolidated Funded Debt to Consolidated EBITDA. At the end of each Fiscal Quarter, commencing with the Fiscal Quarter ending June 30, 2004, the ratio of Consolidated Funded Debt to Consolidated EBITDA for the Fiscal Quarter then ending and the
immediately preceding three Fiscal Quarters will not at any time exceed 2.50 to 1.00. 
  
 SECTION 5.04. Acquisitions. No Loan Party nor any Subsidiary of a Loan Party shall make any Acquisition, or take any action to solicit the tender of securities or proxies in respect thereof in order to effect
any Acquisition, unless (i) the board of directors or comparable governing body of the Person to be (or whose assets are to be) acquired has approved such Acquisition and the line or lines of business of the Person to be acquired are substantially
the same as or reasonably related to one or more line or lines of business conducted by the Company, (ii) no Default or Event of Default shall have occurred and be continuing either immediately prior to or immediately after giving effect to such
Acquisition and the Company shall have furnished to the Administrative Agent (A) if the aggregate Costs of Acquisition incurred by any Loan Party or any Subsidiary of a Loan Party in any single transaction or in a series of related transactions
exceeds $5,000,000, pro forma historical financial statements as of the end of the most recently completed Fiscal Year of the Company and most recent interim Fiscal Quarter, if applicable giving effect to such Acquisition and (B) a certificate in
the form of Exhibit I prepared on a historical pro forma basis as of the most recent date for which financial statements have been furnished pursuant to Section 5.01 giving effect to such Acquisition, which certificate shall demonstrate that no
Default or Event of Default would exist immediately after giving effect thereto, (iii) the Person acquired shall be a Subsidiary, or be merged into the Company or a Wholly Owned Subsidiary, immediately upon consummation of the Acquisition (or if
assets are being acquired, the acquiror shall be the Company or a Subsidiary of the Company), and (iv) after giving effect to such Acquisition: (A) the aggregate Costs of Acquisition incurred by any 
  

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 Loan Party or any Subsidiary of a Loan Party in any single transaction or in a series of related transactions shall not
exceed $25,000,000; and (B) the aggregate Costs of Acquisition incurred by the Loan Parties and all Subsidiaries of the Loan Parties shall not exceed $50,000,000 in the aggregate. 
  
 SECTION 5.05. Ratio of Total Liabilities to Consolidated Tangible Net Worth. The ratio of Total Liabilities to
Consolidated Tangible Net Worth shall at all times be less than 2.0. 
  
 SECTION 5.06. Restricted Payments. The Company will not declare or make any Restricted Payment during any Fiscal Year. 
  
 SECTION 5.07. Fixed Charge Coverage. At the end of each Fiscal Quarter, commencing with the Fiscal Quarter ending June 30, 2004, the Fixed Charge
Coverage Ratio shall not be less than 1.50 to 1.00: 
  
 SECTION
5.08. Capital Expenditures. Capital Expenditures will not exceed in the aggregate in any Fiscal Year the sum of $12,000,000; provided that after giving effect to the incurrence of any Capital Expenditures permitted by this Section, no Default
shall have occurred and be continuing as a result of such Capital Expenditure (with the effect that amounts not incurred in any Fiscal Year may not be carried forward to a subsequent period). 
  
 SECTION 5.09. [Intentionally Omitted]. 
  
 SECTION 5.10. Investments. No Loan Party nor any Subsidiary of a Loan
Party shall make Investments in any Person except (i) Permitted Investments; (ii) Acquisitions permitted by Section 5.04 hereof; (iii) Investments by the Company in another Borrower or in a Guarantor that is a Consolidated Subsidiary; (iv) loans or
advances to the Company or any Guarantor that is a Consolidated Subsidiary; (v) loans or advances to employees of a Loan Party or an Affiliate of a Loan Party that do not exceed Five Hundred Thousand and No/100 Dollars ($500,000) in the aggregate at
any time outstanding made in the ordinary course of business and consistently with practices existing on the Restatement Effective Date; (vi) deposits required by government agencies or public utilities; (vii) Investments consisting of promissory
notes received as proceeds of asset dispositions permitted by Section 5.14 hereof; (viii) investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with, customers and suppliers,
in each case in the ordinary course of business; (ix) Capital Securities of a Subsidiary of the Company held by an employee of such Subsidiary which are acquired in connection with the termination of such employees employment; (x) Guarantees of
Hedging Agreements entered into by a Subsidiary of the Company which Hedging Agreements are entered into in the ordinary course of business and used solely as a part of the normal business operations of such Subsidiary as a risk management strategy
and/or hedge against changes resulting from currency market changes and not as a means to speculate for purposes of investment on trends and shifts in financial markets; (xi) Investments existing on the Restatement Effective Date and set forth on
Schedule 4.22; (xii) Investments consisting of the Netpoint Guaranty; (xiii) purchases of Capital Securities of Netpoint and/or Outsourcing Unlimited, Inc. from minority shareholders in accordance with the terms of the written agreements with such
minority shareholders as in effect on the Restatement Effective Date; and (xiv) Investments not otherwise permitted under this Section 5.10, made in the ordinary course of business and consistently with practices existing on March 31, 2004, which do
not exceed $10,000,000 in the aggregate. 
  

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 SECTION 5.11. Negative Pledge. No Loan Party nor any Subsidiary of a Loan Party will create,
assume or suffer to exist any Lien on any asset now owned or hereafter acquired by it, except: 
  
 (a) Liens existing on the date of this Agreement encumbering assets securing Debt outstanding on the date of this Agreement in an aggregate principal
amount not exceeding $210,000,000, all of which are set forth on Schedule 5.11; 
  
 (b) Liens on Inventory (i) in favor of IBM Credit Corporation (and its successors and assigns) which are subject to the IBM Intercreditor Agreement and (ii) in favor of Textron Financial Corporation (and its
successors or assigns) which are subject to the Textron Intercreditor Agreement; 
  
 (c) Liens for taxes, assessments or similar charges, incurred in the ordinary course of business that are not yet due and payable or that are being contested in good faith and with due diligence by appropriate
proceedings; 
  
 (d) any Lien on any equipment or real property
securing Debt incurred or assumed for the purpose of financing all or any part of the cost of acquiring such equipment or real property and permitted under Section 5.29(i), provided that such Lien attaches to such asset concurrently with or
within 180 days after the acquisition thereof; 
  
 (e) pledges or
deposits made in the ordinary course of business to secure payment of workers’ compensation, or to participate in any fund in connection with workers’ compensation, unemployment insurance, old-age pensions or other social security
programs; 
  
 (f) Liens of mechanics, materialmen, warehousemen,
carriers or other like liens, securing obligations incurred in the ordinary course of business that are not yet due and payable; 
  
 (g) good faith pledges or deposits made in the ordinary course of business to secure performance of bids, tenders, contracts (other than for the repayment
of borrowed money) or leases, not in excess of twenty percent (20%) of the aggregate amount due thereunder, or to secure statutory obligations, or surety, appeal, indemnity, performance or other similar bonds required in the ordinary course of
business; 
  
 (h) any Lien arising out of the refinancing,
extension, renewal or refunding of any Debt secured by any Lien permitted by any of the foregoing clauses of this Section, provided that (i) such Debt is not secured by any additional assets, and (ii) the amount of such Debt secured by any
such Lien is not increased except to the extent permitted by Section 5.29(h) or (i); 
  
 (i) encumbrances consisting of zoning restrictions, easements or other restrictions on the use of real property, none of which materially impairs the use of such property by the Company in the operation of its
business, and none of which is violated in any material respect by existing or proposed restrictions on land use; 
  

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 (j) any Lien on Margin Stock; 
  
 (k) a Lien encumbering the inventory and accounts receivable of Netpoint securing the indebtedness of Netpoint under a line
of credit to be used for working capital purposes by Netpoint in a maximum principal amount not exceeding $1,000,000 at any time; 
  
 (l) a Lien on an account receivable that arises by operation of law and secures a performance bond obtained in the ordinary course of business relating to
the services performed or goods supplied that gave rise to such account receivable provided that: (1) such Lien is limited to the account receivable arising from the services performed or goods supplied that are the subject of such performance bond;
and (2) the Administrative Agent is provided written notice of such performance bond and corresponding account receivable; 
  
 (m) Liens securing the IR Bank and BB&T that are subject to the Intercreditor Agreement; 
  
 (n) Liens securing the Administrative Agent and the Banks created or arising under the Loan Documents; and 
  
 (o) Other Liens on assets of the Company or its Subsidiaries to the extent
not otherwise included in paragraphs (a) through (n) of this Section securing Debt and other liabilities in an aggregate amount not to exceed $5,000,000 at any time outstanding. 
  
 SECTION 5.12. Line of Business. Each Loan Party shall carry on its business in substantially the same manner and in
substantially the same fields and such other fields as are incidental or reasonably related thereto, as such business is now carried on and maintained. 
  
 SECTION 5.13. Stock Redemption. No Loan Party nor any Subsidiary of a Loan Party shall redeem or retire any shares of its own stock or that of any
Subsidiary of a Loan Party, except: (1) through corporate reorganization to the extent permitted by Section 5.14 or Investments permitted by Section 5.10; (2) Restricted Payments permitted by Section 5.06; and (3) the redemption of shares of a
Subsidiary of the Company in connection with the Acquisition of such Subsidiary which shares are owned by a minority shareholder the cost of such redemption is included within the Costs of Acquisition and permitted under Section 5.04. 
  
 SECTION 5.14. Consolidations, Mergers and Sales of Assets. No Loan
Party will, nor will it permit any Subsidiary of a Loan Party to, consolidate or merge with or into, dissolve or liquidate, terminate or fail to maintain its organizational existence or sell, lease or otherwise transfer all or any substantial part
of its assets to, any other Person, or discontinue or eliminate any business line or segment, provided that (a) a U.S. Borrower may merge with another Person if (i) such Person was organized under the laws of the United States of America or
one of its states, (ii) the U.S. Borrower is the Person surviving such merger, (iii) if the Company merges or consolidates with another Person the Person surviving such merger or consolidation must be the Company, and (iv) immediately after giving
effect to such merger, no Default shall have occurred and be continuing, (b) Subsidiaries of the Company may merge or consolidate with any other Subsidiary of the Company or with the Company; provided, however, that (i) if such merger or
consolidation is between a Borrower and a Subsidiary that is not a Borrower, the Person surviving such merger or consolidation must be a Borrower and (ii) if such merger is between a Subsidiary that is a Loan Party and a Subsidiary that is not a
Loan Party, the 
  

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 Person surviving such merger or consolidation must be a Loan Party and (iii) if a Subsidiary of the Company merges or
consolidates with the Company, the Person surviving such merger or consolidation must be the Company, (c) the merger of a Subsidiary of the Company with any other Person in consummation of an Acquisition permitted by Section 5.04 hereof provided
that the Person surviving such merger is a Subsidiary of the Company; (d) any Subsidiary of the Company that is neither a Loan Party nor a Material Non-U.S. Subsidiary may liquidate or dissolve; (e) any Loan Party (other than the Company) or a
Material Non-U.S. Subsidiary may liquidate or dissolve so long as its assets are distributed to the Company or another Loan Party; (f) the sale of inventory in the ordinary course of business and for fair value and the sale of Equipment or other
fixed assets no longer needed in the business of the Borrowers or their Subsidiaries in the ordinary course of business and for fair value, (g) the sale of real property of the Borrowers or their respective Subsidiaries pursuant to a sale/leaseback
transaction provided that immediately before and after giving effect to such sale/leaseback transaction no Default shall have occurred and be continuing; and (h) the foregoing limitation on the sale, lease or other transfer of assets and on the
discontinuation or elimination of a business line or segment shall not prohibit a transfer of assets or the discontinuance or elimination of a business line or segment (in a single transaction or in a series of related transactions) unless the
aggregate assets to be so transferred or utilized in a business line or segment to be so discontinued, when combined with all other assets transferred (excluding assets transferred under Section 5.14(f) and 5.14(g)), and all other assets utilized in
all other business lines or segments discontinued after the Restatement Effective Date constitute more than $10,000,000 in the aggregate. 
  
 SECTION 5.15. Use of Proceeds. No portion of the proceeds of the Loan will be used by any Borrower or any Subsidiary (i) in connection with, either
directly or indirectly, any tender offer for, or other acquisition of, stock of any corporation with a view towards obtaining control of such other corporation, (ii) directly or indirectly, for the purpose, whether immediate, incidental or ultimate,
of purchasing or carrying any Margin Stock in violation of any applicable law or regulation, or (iii) for any purpose in violation of any applicable law or regulation. Except as otherwise provided herein, the proceeds of the Loan shall be used for
general corporate purposes and working capital. 
  
 SECTION 5.16.
Compliance with Laws; Payment of Taxes. Each Loan Party will, and will cause each Subsidiary of a Loan Party and each member of the Controlled Group to, comply with applicable laws (including but not limited to ERISA and the Patriot Act),
regulations and similar requirements of governmental authorities (including but not limited to PBGC), except where the necessity of such compliance is being contested in good faith through appropriate proceedings diligently pursued or such failure
would not reasonably be expected to have a Material Adverse Effect. Each Loan Party will, and will cause each Subsidiary of a Loan Party to, pay promptly when due all taxes, assessments, governmental charges, claims for labor, supplies, rent and
other obligations which, if unpaid, might become a lien against the property of a Loan Party or any Subsidiary of a Loan Party, except liabilities being contested in good faith by appropriate proceedings diligently pursued and against which, if
requested by the Administrative Agent, the Company shall have set up reserves in accordance with GAAP or where the failure to file such return or pay such taxes does not result in a Lien on any property of the Loan Parties having a value in excess
of $100,000. 
  
 SECTION 5.17. Insurance. Each Loan Party
will maintain, and will cause each Subsidiary of a Loan Party to maintain (either in the name of such Loan Party or in such 
  

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 Subsidiary’s own name), with financially sound and reputable insurance companies, insurance on all its Property in
at least such amounts and against at least such risks as are usually insured against in the same general area by companies of established repute engaged in the same or similar business. 
  
 SECTION 5.18. Change in Fiscal Year. Each Loan Party will not change its Fiscal Year without the consent of the
Required Banks. 
  
 SECTION 5.19. Maintenance of Property.
Each Loan Party shall, and shall cause each Subsidiary of a Loan Party to, maintain all of its properties and assets in good condition, repair and working order, ordinary wear and tear excepted, excluding equipment which the Loan Party has
determined is no longer used in the ordinary course of its business. 
  
 SECTION 5.20. Environmental Notices. Each Loan Party shall furnish to the Banks and the Administrative Agent prompt written notice of all Environmental Liabilities, pending, threatened or anticipated Environmental Proceedings,
Environmental Notices, Environmental Judgments and Orders, and Environmental Releases at, on, in, under or in any way affecting the Properties or any adjacent property that, individually or in the aggregate, may reasonably be expected to have a
Material Adverse Effect. 
  
 SECTION 5.21. Environmental
Matters. No Loan Party or any Subsidiary of a Loan Party will, nor will any Loan Party permit any Third Party to, use, produce, manufacture, process, treat, recycle, generate, store, dispose of, manage at, or otherwise handle or ship or
transport to or from the Properties any Hazardous Materials except for Hazardous Materials such as cleaning solvents, pesticides and other similar materials used, produced, manufactured, processed, treated, recycled, generated, stored, disposed,
managed or otherwise handled in amounts and in a manner in the ordinary course of business in compliance, in all material respects, with applicable Environmental Requirements. 
  
 SECTION 5.22. [Intentionally Omitted.] 
  
 SECTION 5.23 Environmental Release. Each Loan Party agrees that upon the occurrence of an Environmental Release at or
on any of the Properties it will act promptly to investigate the extent of, and to take appropriate remedial action, as determined in such Loan Party’s reasonable business judgment, to eliminate, such Environmental Release, whether or not
ordered or otherwise directed to do so by any Environmental Authority. 
  
 SECTION 5.24 Additional Covenants, Etc. In the event that at any time this Agreement is in effect or any Note remains unpaid any Loan Party shall enter into any agreement, guarantee, indenture or other instrument governing, relating
to, providing for commitments to advance or guaranteeing any Financing in a principal amount in excess of $5,000,000 or to amend any terms and conditions applicable to any Financing in a principal amount in excess of $5,000,000, which agreement,
guarantee, indenture or other instrument includes covenants, warranties, representations, defaults or events of default (or any other type of restriction which would have the practical effect of any of the foregoing, including, without limitation,
any “put” or mandatory prepayment of such debt) or other terms or conditions not substantially as, or in addition to those, provided in this Agreement or any other Loan Document, or more favorable to the lender or other counterparty
thereunder than those provided in this Agreement or any other 
  

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 Loan Document, the Loan Party shall promptly so notify the Administrative Agent and the Banks. Thereupon, if the
Administrative Agent shall request by written notice to the Loan Party (after a determination has been made by the Required Banks that any of the above referenced documents or instruments contain any provisions which either individually or in the
aggregate are more favorable than one of the provisions set forth herein), the Loan Parties, the Administrative Agent and the Banks shall enter into an amendment to this Agreement providing for substantially the same such covenants, warranties,
representations, defaults or events of default or other terms or conditions as those provided for in such agreement, guarantee, indenture or other instrument, to the extent required and as may be selected by the Administrative Agent, such amendment
to remain in effect, unless otherwise specified in writing by the Administrative Agent, for the entire duration of the stated term to maturity of such Financing (to and including the date to which the same may be extended at the option of the Loan
Party), notwithstanding that such Financing might be earlier terminated by prepayment, refinancing, acceleration or otherwise, provided that if any such agreement, guarantee, indenture or other instrument shall be modified, supplemented,
amended or restated so as to modify, amend or eliminate from such agreement, guarantee, indenture or other instrument any such covenant, warranty, representation, default or event of default or other term or condition so made a part of this
Agreement, then unless required by the Administrative Agent pursuant to this Section, such modification, supplement or amendment shall not operate to modify, amend or eliminate such covenant, warranty, representation, default or event of default or
other term or condition as so made a part of this Agreement. 
  
 SECTION 5.25. Transactions with Affiliates. No Loan Party nor any Subsidiary of a Loan Party shall enter into, or be a party to, any transaction with any Affiliate of a Loan Party or such Subsidiary (which Affiliate is not a Loan
Party or a Subsidiary of a Loan Party), except as permitted by law and pursuant to reasonable terms which are no less favorable to the Loan Party or such Subsidiary than would be obtained in a comparable arm’s length transaction with a Person
which is not an Affiliate and is either in the ordinary course of business, or if such transaction involves more than $500,000 is fully disclosed to the Administrative Agent and the Banks, and is consented to in writing by the Required Banks.

  
 SECTION 5.26. Material Subsidiaries. (a) The Loan
Parties shall cause any Person which becomes a Material Subsidiary after the Restatement Effective Date to become a party to, and agree to be bound by the terms of, this Agreement and the Security Agreement pursuant to a Joinder Agreement, in the
form attached hereto as Exhibit F-1 satisfactory to the Administrative Agent in all respects and executed and delivered to the Administrative Agent within ten (10) Domestic Business Days after the day on which such Person became a Material
Subsidiary. The Company shall also cause the items specified in Section 3.01(c), (f), (h), (i) and (n) to be delivered to the Administrative Agent concurrently with the instrument referred to above, modified appropriately to refer to such instrument
and such Material Subsidiary. 
  
 (b) The Company shall, and shall
cause any U.S. Subsidiary (the “Pledgor Subsidiary”) to, pledge the lesser of 65% or the entire interest owned by the Company and such Pledgor Subsidiary, of the shares of Capital Securities or equivalent equity interests in any Person
which becomes a Material Non-U.S. Subsidiary after the Restatement Effective Date pursuant to a pledge agreement in the form attached hereto as Exhibit K executed and delivered by the Company or such Pledgor Subsidiary to the Administrative Agent
within ten (10) Domestic Business Days after the day on which such Person became a Material Non-U.S. Subsidiary and shall deliver to the Administrative Agent such shares of capital stock together with stock powers 
  

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 executed in blank. The Company shall also cause the items specified in Section 3.01(c), (f) and (n) to be delivered to
the Administrative Agent concurrently with the pledge agreement referred to above, modified appropriately to refer to such pledge agreement, Pledgor and such Material Non-U.S. Subsidiary. As used herein, “Material Non-U.S. Subsidiary”
means a Non-U.S. Subsidiary whose Capital Securities are held by the Company or by a U.S. Subsidiary and which accounts for (or in the case of a recently formed or acquired Non-U.S. Subsidiary would so account for on a pro forma historical basis) at
least 2% of Consolidated Net Income (determined on any date as of the last day of the Fiscal Quarter immediately preceding such date) or has total assets of at least 2% of Consolidated Total Assets (determined on any date as of the last day of the
Fiscal Quarter immediately preceding such date). The Borrowers and the Guarantors acknowledge and agree that the Administrative Agent and Banks may at any one time after the Closing Date request the Borrowers to obtain (and the Borrower shall
deliver to the Administrative Agent within 30 calendar days of such request) a legal opinion in form and content reasonably satisfactory to Administrative Agent from counsel licensed in Canada confirming that the Pledge Agreement constitutes a
valid, enforceable and perfected first priority security interest in and lien upon the Collateral (as defined in the Pledge Agreement) under the applicable laws of Canada. 
  
 (c) Once any Subsidiary becomes a Material Subsidiary and therefore becomes a party to this Agreement in accordance with
Section 5.26(a) or any shares of capital stock of a Material Non-U.S. Subsidiary are pledged to the Administrative Agent in accordance with Section 5.26(b), such Subsidiary (including, without limitation, all Initial Guarantors) thereafter shall
remain a party to this Agreement and the shares of capital stock in such Material Non-U.S. Subsidiary (including, without limitation, all initial Material Foreign Subsidiaries) shall remain subject to the pledge to the Administrative Agent, as the
case may be, even if: (i) such Material Subsidiary ceases to be a Material Subsidiary; or (ii) such Non-U.S. Subsidiary ceases to be a Material Non-U.S. Subsidiary; provided that if a Material Subsidiary or Material Non-U.S. Subsidiary ceases to be
a Subsidiary of the Company as a result of the Company’s transfer or sale of one hundred percent (100%) of the capital stock of such Subsidiary held by such U.S. Subsidiary or of all or substantially all the assets of such Subsidiary in
accordance with and to the extent permitted by the terms of Section 5.14, the Administrative Agent and the Banks agree to release such Subsidiary from the Guaranty and release (x) the shares of capital stock of such Subsidiary from the Pledge
Agreement and (y) to the extent encumbered thereby, the assets of such Subsidiary from the Lien of the Security Agreement. 
  
 (d) The Company and Guarantors acknowledge that ScanSource Properties, LLC is not an Initial Guarantor because the Company has advised the Administrative
Agent and Banks that ScanSource Properties, LLC is party to an agreement that prohibits ScanSource Properties, LLC from being a Guarantor (the “Restrictive Provision”). The U.S. Borrowers and Guarantors shall immediately notify the
Administrative Agent if there is any modification, expiration or termination of the Restrictive Provision. The U.S. Borrower and Guarantors shall cause ScanSource Properties, LLC to become a party to, and agree to be bound by the terms of, this
Agreement and the Security Agreement pursuant to a Joinder Agreement, in the form attached hereto as Exhibit F-1 satisfactory to the Administrative Agent in all respects and executed and delivered to the Administrative Agent within ten (10) Domestic
Business Days after the day on which there is any modification, expiration or termination of the Restrictive Provision which would allow ScanSource Properties, LLC to execute such documentation. The U.S. Borrower shall also cause the items specified
in Section 3.01(c), (f), (h), (i) and (n) to be delivered to the Administrative Agent concurrently with the instruments referred to above, modified appropriately to refer to such instrument and ScanSource Properties, LLC. 
  

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 (e) The Company shall promptly notify the Administrative Agent in the event that the sum of: (1) all
Investments made by the Company and Subsidiaries of the Company in Netpoint and the Subsidiaries of Netpoint; plus (2) the outstanding principal amount of Advances made under this Agreement the proceeds of which are deposited in an account that
Netpoint controls, exceeds $5,000,000 (a “Netpoint Triggering Event”). At any time after the occurrence of a Netpoint Triggering Event, the Administrative Agent may request (and within 45 days after such request) the Company shall deliver
a legal opinion in form and content reasonably satisfactory to the Administrative Agent from legal counsel licensed in Florida stating: (i) Netpoint is duly incorporated, validly existing and in good standing under the laws of the State of Florida;
(ii) Netpoint has all requisite power and authority to enter into and perform under this Agreement and the Loan Documents to which it is a party; and (iii) this Agreement and the Loan Documents to which Netpoint is a party have been duly authorized,
executed and delivered by Netpoint. 
  
 SECTION 5.27. No
Restrictive Agreement. No Borrower will, and no Borrower will permit or cause any of its Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any restriction or encumbrance on (a) the ability
of any Borrower and its Subsidiaries to perform and comply with their respective obligations under the Loan Documents or (b) the ability of any Subsidiary of any Borrower to make any dividend payments or other distributions in respect of its Capital
Securities, to repay Debt owed to any Borrower or any other Subsidiary, to make loans or advances to any Borrower or any other Subsidiary, or to transfer any of its assets or properties to any Borrower or any other Subsidiary, in each case other
than restrictions which (i) exist under applicable Requirements of Law; (ii) exist under any agreement or instrument creating a Lien permitted under Section 5.11 (but only to the extent such restriction or encumbrance applies to the assets subject
to such Lien permitted under Section 5.11); or (iii) exist with respect to any Person or the property or assets of such Person acquired by the Company or any Subsidiary, existing at the time of such acquisition and not incurred in contemplation
thereof, which encumbrances or restrictions are not applicable to any Person or the property or assets of any Person other than such Person or the property or assets of such Person so acquired and such Person so acquired is not a Loan Party; (iv)
restrict in a customary manner the subletting, assignment or transfer of any property or asset that is subject to a lease or license (but only to the extent such restriction or encumbrance applies to the assets subject to such lease or license); (v)
are imposed pursuant to an agreement that has been entered into for the sale or disposition of property and assets of the Company or a Subsidiary or the sale of 100% of the Capital Securities of a Subsidiary (but only to the extent such restriction
or encumbrance applies to the property, assets or Capital Securities sold or disposed); (vi) are with minority shareholders of any Subsidiary that is not a Wholly Owned Subsidiary which are customary for the protection of minority shareholders and
consistent with such agreements in effect on the Restatement Effective Date; (vii) exist in any agreements in effect on the Restatement Effective Date, and any extensions, refinancings, renewals or replacements of such agreements that are not more
restrictive than exist on the Restatement Effective Date; and (viii) are restrictions contained in any documents governing any Debt incurred after the Restatement Effective Date which are not more restrictive than those contained herein. 

 

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 SECTION 5.28. Partnerships and Joint Ventures. No Loan Party shall become a general partner in any
general or limited partnership or joint venture. 
  
 SECTION 5.29.
Additional Debt. No Loan Party or Subsidiary of a Loan Party shall directly or indirectly issue, assume, create, incur or suffer to exist any Debt or the equivalent, except for: (a) the Debt owed to the Banks, Swing Line Lender, Other
Currency Lenders and Issuing Banks; (b) the Debt existing and outstanding on the Restatement Effective Date described on Schedule 5.29; (c) Debt incurred and owing to Textron Financial Corporation and IBM Credit Corporation for the purpose of
financing all or any part of the cost of acquiring inventory from such Person; (d) Guarantees included within the Netpoint Guaranty, subject to compliance with the conditions set forth in the definition of “Netpoint Guaranty”; (e) Debt
under the IR Agreement; (f) Debt assumed in connection with an Acquisition permitted under Sections 5.04; (g) Debt of a Borrower or a Subsidiary of a Borrower owed to another Borrower or Subsidiary of a Borrower to the extent permitted under Section
5.10; (h) Debt incurred in connection with: (1) the refinancing of the real estate commonly known as the ScanSource Headquarters Facility located at 6 Logue Court, Greenville, South Carolina provided the principal amount of such Debt does not exceed
the fair market value of such real property determined by an appraisal conducted at the time of such refinancing by an independent MAI appraiser; and (2) the refinancing of the real estate, commonly known as the ScanSource Distribution Facility
located at 4100 Quest Way, Memphis, Tennessee provided the principal amount of such Debt does not exceed the fair market value of such real property determined by an appraisal conducted at the time of such refinancing by an independent MAI appraiser
and provided further in the case of both (1) and (2) the aggregate amount of the Debt described in 5.29(h)(1) and (2) shall not exceed $13,000,000; and (i) Debt not otherwise permitted under this Section 5.29, the aggregate outstanding principal
amount of which shall not, at any time, exceed $7,000,000.00. 
  
 SECTION 5.30. Operating Leases. No Loan Party nor any Subsidiary of a Loan Party shall create, assume or suffer to exist any operating lease except operating leases which: (1) are entered into in the ordinary course of business, and
(2) the aggregate indebtedness, liabilities and obligations of the Loan Parties under all such operating leases during any period of four (4) consecutive Fiscal Quarters shall at no time exceed $5,000,000. 
  
 SECTION 5.31. Foreign Employee Benefit Plan Compliance. The Borrowers
shall cause each of their Non-U.S. Subsidiaries and members of the Controlled Group to establish, maintain and operate all Foreign Employee Benefit Plans (other than government-sponsored plans) in compliance in all material respects with all laws,
regulations and rules applicable thereto and the respective requirements of the governing documents for such plans except where such failure to comply would not reasonably be expected to have a Material Adverse Effect. 
  
 SECTION 5.32. “Know Your Client” Requests. Each Borrower
will, and will cause their respective Subsidiaries to, promptly upon request by the Administrative Agent or any Bank, and each Bank shall promptly upon request by the Administrative Agent, supply, or procure the supply of, such documentation and
other evidence as is reasonably requested by the Administrative Agent (for itself and on behalf of any Bank) or any Bank (for itself or on behalf of any prospective lender) in order for the Administrative Agent, such Bank or such prospective new
lender to carry out and be satisfied with the results of all necessary “know your client” or other checks in relation to the identity of any Person that it is required to carry out in relation to the transactions contemplated in the Loan
Documents. 
  

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 ARTICLE VI 
  
 DEFAULTS 
  
 SECTION 6.01. Events of Default. If one or more of the following events (“Events of Default”) shall have occurred and be continuing:

  
 (a) any Borrower shall fail to pay when due any principal of
the Loan (including, without limitation, any Revolving Advance, Other Currency Advance or Swing Line Advance) or shall fail to pay any interest on the Loan (including, without limitation, any Revolving Advance, Other Currency Advance or Swing Line
Advance) within five (5) Domestic Business Days after such interest shall become due, or any Loan Party shall fail to pay any fee or other amount payable hereunder within five (5) Domestic Business Days after such fee or other amount becomes due; or

  
 (b) any Loan Party shall fail to observe or perform any
covenant contained in Sections 5.02(ii), 5.03 to 5.15, inclusive, or Section 5.18, 5.29 or 5.30; or 
  
 (c) any Loan Party shall fail to observe or perform any covenant or agreement contained or incorporated by reference in this Agreement (other than those
covered by clause (a) or (b) above or clauses (n) or (o) or (p) or (q) or (r) below) for thirty days after the earlier of (i) the first day on which any Loan Party has knowledge of such failure or (ii) written notice thereof has been given to the
Company by the Administrative Agent at the request of any Bank; or 
  
 (d) any representation, warranty, certification or statement made or deemed made by the Loan Parties in Article IV of this Agreement or in any financial statement, material certificate or other material document delivered pursuant to this
Agreement shall prove to have been incorrect or misleading in any material respect when made (or deemed made); or 
  
 (e) any Loan Party or any Subsidiary of a Loan Party shall fail to make any payment in respect of Debt (other than the Notes) having a principal balance
in excess of $1,000,000 and such failure shall continue beyond any applicable grace period; or 
  
 (f) any event or condition shall occur which results in the acceleration of the maturity of Debt having an outstanding principal balance in excess of $1,000,000 of any Loan Party or any Subsidiary of a Loan Party or
the mandatory prepayment or purchase of such Debt by any Loan Party (or its designee) or such Subsidiary of a Loan Party (or its designee) prior to the scheduled maturity thereof, or enables (or, with the giving of notice or lapse of time or both,
would enable) the holders of such Debt or any Person acting on such holders’ behalf to accelerate the maturity thereof or require the mandatory prepayment or purchase thereof prior to the scheduled maturity thereof, without regard to whether
such holders or other Person shall have exercised or waived their right to do so; or 
  
 (g) any Loan Party or any Subsidiary of a Loan Party shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in 
  

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 effect or seeking the appointment of a trustee, receiver, liquidator, administrator, custodian or other similar official
of it or any substantial part of its property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment
for the benefit of creditors, or shall fail generally, or shall admit in writing its inability, to pay its debts as they become due, or shall take any corporate action to authorize any of the foregoing; or 
  
 (h) an involuntary case or other proceeding shall be commenced against any
Loan Party or any Subsidiary of a Loan Party seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, administrator, custodian or other similar official of it or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of 60 days; or an order
for relief shall be entered against any Loan Party or any Subsidiary of a Loan Party under the federal bankruptcy laws as now or hereafter in effect; or 
  
 (i) any Loan Party or any member of the Controlled Group shall fail to pay when due any material amount which it shall have become liable to pay to the
PBGC or to a Plan under Title IV of ERISA; or notice of intent to terminate a Plan or Plans shall be filed under Title IV of ERISA by any Loan Party, any member of the Controlled Group, any plan administrator or any combination of the foregoing; or
the PBGC shall institute proceedings under Title IV of ERISA to terminate or to cause a trustee to be appointed to administer any such Plan or Plans or a proceeding shall be instituted by a fiduciary of any such Plan or Plans to enforce Section 515
or 4219(c)(5) of ERISA and such proceeding shall not have been dismissed within 30 days thereafter; or a condition shall exist by reason of which the PBGC would be entitled to obtain a decree adjudicating that any such Plan or Plans must be
terminated; or 
  
 (j) one or more judgments or orders for the
payment of money in an aggregate amount in excess of $1,000,000 (or the equivalent in any other currency(ies)) shall be rendered against any Loan Party or any Subsidiary of a Loan Party and such judgment or order shall continue unsatisfied and
unstayed for a period of 30 days; or 
  
 (k) a federal tax lien
shall be filed against any Loan Party or any Subsidiary of a Loan Party under Section 6323 of the Code or a lien of the PBGC shall be filed against any Loan Party or any Subsidiary of a Loan Party under Section 4068 of ERISA and in either case such
lien shall remain undischarged for a period of 25 days after the date of filing; or 
  
 (l) (i) any Person or two or more Persons acting in concert shall have acquired beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of
1934) of 20% or more of the outstanding shares of the voting stock of the Company; or (ii) as of any date a majority of the Board of Directors of the Company consists of individuals who were not either (A) directors of the Company as of the
corresponding date of the previous year, (B) selected or nominated to become directors by the Board of Directors of the Company of which a majority consisted of individuals described in clause (A), or (C) selected or nominated to become directors by
the Board of Directors of the Company of which a majority consisted of individuals described in clause (A) and individuals described in clause (B); or 
  

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 (m) there shall have occurred uninsured damage to, or loss, theft or destruction of, any part of the
Collateral with a fair market value in excess of $1,000,000 in the aggregate; or 
  
 (n) a default or event of default shall occur and be continuing under any of the Collateral Documents or Letter of Credit Agreements or any Borrower, Pledgor Subsidiary or Guarantor shall fail to observe or perform
any obligation to be observed or performed by it under any Collateral Document or Letter of Credit Agreements, and such default, event of default or failure to perform or observe any obligation continues beyond any applicable cure or grace period
provided in such Collateral Document or Letter of Credit Agreement; or 
  
 (o) a default or event of default shall occur and be continuing under the IBM Intercreditor Agreement, or a Loan Party or any Subsidiary of a Loan Party shall fail to observe or perform any obligation to be observed or performed by it under
the IBM Intercreditor Agreement, or the IBM Intercreditor Agreement shall be terminated without the prior written consent of the Administrative Agent; or 
  
 (p) a default or event of default shall occur and be continuing under the Textron Intercreditor Agreement, or a Loan Party or any Subsidiary of a Loan
Party shall fail to observe or perform any obligation to be observed or performed by it under the Textron Intercreditor Agreement, or the Textron Intercreditor Agreement shall be terminated without the prior written consent of the Administrative
Agent; or 
  
 (q) a default or event of default shall occur and be
continuing under the IR Agreement or any Loan Party shall fail to observe or perform any obligation to be observed or performed by it under the IR Agreement or the IR Agreement is terminated without the prior written consent of the IR Bank; or

  
 (r) (i) any of the Guarantors shall fail to pay when due any
Guaranteed Obligations or shall fail to pay any fee or other amount payable hereunder when due; or (ii) any Guarantor shall disaffirm or deny its obligations under Article X; or 
  
 (s) (i) if the Company at any time fails to own (directly or indirectly) 100% of the outstanding shares (other than director
qualifying shares) of the voting stock (in the case of a corporation ) or membership interests (in the case of a limited liability company) (or equivalent equity interests) of each Person (other than 4100 Quest, LLC and Netpoint) that is a Loan
Party on the Restatement Effective Date; or (ii) if the Company at any time fails to own (directly or indirectly) 80% of the membership interests of 4100 Quest, LLC or 68% of the Capital Securities of Netpoint; or (iii) if the Company at any time
fails to own (directly or indirectly) the percentage of the outstanding shares of the voting stock (in the case of a corporation) or membership interests (in the case of a limited liability company) (or equivalent equity interests) of any Subsidiary
that becomes a Borrower or Guarantor after the Restatement Effective Date in an amount equal to or greater than the percentage owned on the date such Subsidiary became a Borrower or Guarantor; or 
  
 (t) any event or occurrence which is analogous or similar to the matters
referred to in paragraphs (g) or (h) above shall take place under the laws of any jurisdiction in the relation to any Loan Party; or 
  

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 (u) the occurrence of any event, act or condition which the Required Banks determine either does or has a
reasonable probability of causing a Material Adverse Effect, 
  
 then, and in
every such event, the Administrative Agent shall (i) if requested by the Required Banks, by notice to the Company terminate the Revolving Advance Commitments, Other Currency Commitments and Facility Commitments and they shall thereupon terminate,
(ii) if requested by the Swing Line Lender, by notice to the Company terminate the Swing Line facility set forth in Section 2.15, (iii) if requested by the Required Banks, by notice to the Issuing Banks, instruct the Issuing Banks to declare an
Event of Default under the Letter of Credit Agreements, (iv) if requested by the Required Banks or the Other Currency Lender by notice to the Borrowers terminate the Other Currency facility set forth in Section 2.16; and (v) if requested by the
Required Banks, by notice to the Borrower declare the Notes (together with accrued interest thereon) and all other amounts payable hereunder and under the other Loan Documents to be, and the Notes (together with all accrued interest thereon) and all
other amounts payable hereunder and under the other Loan Documents shall thereupon become, immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Loan Parties;
provided that if any Event of Default specified in clause (g), (h) or (t) above occurs with respect to any Loan Party, without any notice to any Loan Party or any other act by the Administrative Agent or the Banks, the Revolving Advance
Commitments, Other Currency Commitments and Facility Commitments, the Other Currency facility set forth in Section 2.16 and the Swing Line facility set forth in Section 2.15 shall thereupon automatically terminate and the Notes (together with
accrued interest thereon) and all other amounts payable hereunder and under the other Loan Documents shall automatically become immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby
waived by the Loan Parties. Notwithstanding the foregoing, the Administrative Agent shall have available to it all other remedies at law or equity, and shall exercise any one or all of them at the request of the Required Banks. Notwithstanding the
foregoing, the Administrative Agent shall have available to it all rights and remedies provided under the Loan Documents (including, without limitation, the Collateral Documents) and in addition thereto, all other rights and remedies at law or
equity, and the Administrative Agent shall exercise any one or all of them at the request of the Required Banks. 
  
 SECTION 6.02. Notice of Default. The Administrative Agent shall give notice to the Company of any Default under Section 6.01(c) promptly upon being
requested to do so by any Bank and shall thereupon notify all the Banks thereof. 
  
 SECTION 6.03 Cash Cover. Upon the request of the Administrative Agent, if an Event of Default occurs and a U.S. Dollar Letter of Credit is outstanding, partially or wholly undrawn, then the U.S. Borrowers shall
immediately Cash Collateralize the U.S. Dollar Letters of Credit in an amount equal to the aggregate U.S. Dollar Undrawn Amounts. The U.S. Borrowers hereby grant to the Administrative Agent, for the ratable benefit of the Administrative Agent and
the Banks, a security interest in all such cash and deposit account balances to secure the U.S. Dollar Letters of Credit. Cash collateral shall be maintained in blocked deposit accounts held by the Administrative Agent or any of its agents, provided
that, if any Event of Default specified in clause (g), (h) or (t) above occurs, the U.S. Borrowers shall be obligated to Cash Collateralize the U.S. Letters of Credit forthwith without any notice to the U.S. Borrowers or any other act by the
Administrative Agent. 
  

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 (b) Upon the request of the Administrative Agent or the Other Currency Lender, if an Event of Default
occurs and an Other Currency Letter of Credit is outstanding, partially or wholly undrawn, then the Borrowers shall immediately Cash Collateralize the Other Currency Letters of Credit in an amount equal to the aggregate Other Currency Undrawn
Amounts; provided that, if any Event of Default specified in clause (g), (h) or (t) above occurs, the Borrowers shall be obligated to Cash Collateralize the Other Letters of Credit forthwith without any notice to the Borrowers or any other act by
the Other Currency Lender or Administrative Agent. The Borrowers hereby grant to the Administrative Agent, for the ratable benefit of the Administrative Agent and the Banks, a security interest in all such cash and deposit account balances to secure
the Other Currency Letters of Credit. Cash collateral shall be maintained in blocked deposit accounts held by the Administrative Agent or any of its agents. As used herein, “Cash Collateralize” means with respect to a letter of credit, the
deposit of immediately available funds into a cash collateral account maintained with (or on behalf of) the Administrative Agent on terms satisfactory to the Administrative Agent in an amount equal to the aggregate undrawn amounts of such letter of
credit. Derivatives of such terms shall have corresponding meanings. 
  
 SECTION 6.04. Allocation of Proceeds. If an Event of Default has occurred and not been waived, and the maturity of the Notes has been accelerated pursuant to Article VI hereof, all payments received by the Administrative Agent
hereunder, in respect of any principal of or interest on the Obligations or any other amounts payable by the Borrowers or any other Loan Party hereunder, shall be applied by the Administrative Agent in the following order: 
  
 (a) the reasonable expenses incurred in connection with retaking, holding,
preserving, processing, maintaining or preparing for sale, lease or other disposition of, any Collateral, including reasonable attorney’s fees and legal expenses pertaining thereto; 
  
 (b) amounts due to the Banks, Administrative Agent and the Issuing Banks pursuant to Sections 2.7(a), 2.7(b), 2.7(c), 2.7(d)
and 9.03(a); 
  
 (c) payments of interest on Revolving Advances,
Swing Line Advances, Other Currency Advances and Letter of Credit Advances, to be applied for the ratable benefit of the Banks (with amounts payable in respect of Swing Line Advances, Other Currency Advances and Other Currency Letter of Credit
Advances being included in such calculation and paid to the Swing Line Lender and Other Currency Lender, as the case may be); 
  
 (d) payments of principal of Revolving Advances, Swing Line Advances, Other Currency Advances and Letter of Credit Advances, to be applied for the ratable
benefit of the Banks (with amounts payable in respect of Swing Line Advances, Other Currency Advances and Other Currency Letter of Credit Advances being included in such calculation and paid to the Swing Line Lender and Other Currency Lender, as the
case may be); 
  
 (e) payments of cash amounts to the
Administrative Agent in respect of outstanding Letters of Credit pursuant to Section 6.03; 
  
 (f) amounts due to the Issuing Banks, the Administrative Agent and the Banks pursuant to Sections 7.05 and 9.03(b) and (c); 
  

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 (g) payments of all other amounts due under any of the Loan Documents, if any, to be applied for the
ratable benefit of the Secured Parties; 
  
 (h) any surplus
remaining after application as provided for herein, to the Company or otherwise as may be required by applicable law. 
  
 SECTION 6.05. Conversions. After the occurrence of an Event of Default upon the request of the Administrative Agent or the Other Currency Lender
and in connection with the exercise by any Bank of any right under Section 12 of the Intercreditor Agreement, all outstanding Advances denominated in an Other Currency shall be re-denominated and converted into their Dollar Equivalent in Dollars on
the date of such request. 
  
 ARTICLE VII 
  
 THE ADMINISTRATIVE AGENT 
  
 SECTION 7.01. Appointment, Powers and Immunities. Each Bank hereby
irrevocably appoints and authorizes the Administrative Agent to act as its agent hereunder and under the other Loan Documents (including, without limitation, the Intercreditor Agreement) with such powers as are specifically delegated to the
Administrative Agent by the terms hereof and thereof, together with such other powers as are reasonably incidental thereto. The Administrative Agent: (a) shall have no duties or responsibilities except as expressly set forth in this Agreement and
the other Loan Documents, and shall not by reason of this Agreement or any other Loan Document be a trustee for any Bank; (b) shall not be responsible to the Banks for any recitals, statements, representations or warranties contained in this
Agreement or any other Loan Document, or in any certificate or other document referred to or provided for in, or received by any Bank under, this Agreement or any other Loan Document, or for the validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document or any other document referred to or provided for herein or therein or for any failure by any Loan Party to perform any of its obligations hereunder or thereunder; (c) shall not be required
to initiate or conduct any litigation or collection proceedings hereunder or under any other Loan Document except to the extent requested by the Required Banks, and then only on terms and conditions satisfactory to the Administrative Agent, and (d)
shall not be responsible for any action taken or omitted to be taken by it hereunder or under any other Loan Document or any other document or instrument referred to or provided for herein or therein or in connection herewith or therewith, except
for its own gross negligence or willful misconduct. The Administrative Agent may employ agents and attorneys-in-fact and shall not be responsible for the negligence or misconduct of any such agents or attorneys-in-fact selected by it with reasonable
care. The provisions of this Article VII are solely for the benefit of the Administrative Agent and the Banks, and no Loan Party shall have any rights as a third party beneficiary of any of the provisions hereof. In performing its functions and
duties under this Agreement and under the other Loan Documents, the Administrative Agent shall act solely as agent of the Banks and does not assume and shall not be deemed to have assumed any obligation towards or relationship of agency or trust
with or for the Loan Parties. The duties of the Administrative Agent shall be ministerial and administrative in nature, and the Administrative Agent shall not have by reason of this Agreement or any other Loan Document a fiduciary relationship in
respect of any Bank. 
  

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 SECTION 7.02. Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely
upon any certification, notice or other communication (including any thereof by telephone, telefax, telegram or cable) believed by it to be genuine and correct and to have been signed or sent by or on behalf of the proper Person or Persons, and upon
advice and statements of legal counsel, independent accountants or other experts selected by the Administrative Agent. As to any matters not expressly provided for by this Agreement or any other Loan Document, the Administrative Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder and thereunder in accordance with instructions signed by the Required Banks, and such instructions of the Required Banks in any action taken or failure to act pursuant
thereto shall be binding on all of the Banks. 
  
 SECTION 7.03.
Defaults. The Administrative Agent shall not be deemed to have knowledge of the occurrence of a Default or an Event of Default (other than the non-payment of principal of or interest on the Revolving Advances and Swing Line Advances) unless
the Administrative Agent has received notice from a Bank or the Borrower specifying such Default or Event of Default and stating that such notice is a “Notice of Default”. In the event that the Administrative Agent receives such a notice
of the occurrence of a Default or an Event of Default, the Administrative Agent shall give prompt notice thereof to the Banks. The Administrative Agent shall give each Bank prompt notice of each non-payment of principal of or interest on the
Revolving Advances and Swing Line Advances, whether or not it has received any notice of the occurrence of such non-payment. The Administrative Agent shall (subject to Section 9.05) take such action with respect to such Default or Event of Default
as shall be directed by the Required Banks, provided that, unless and until the Administrative Agent shall have received such directions, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem advisable in the best interests of the Banks. 
  
 SECTION 7.04. Rights of Administrative Agent and its Affiliates as a Bank. With respect to any Advance made any Participation purchased in an
Advance or Letter of Credit Advance and any Letter of Credit issued by BB&T or an Affiliate of BB&T, such Affiliate and BB&T in their capacity as a Bank hereunder shall have the same rights and powers hereunder as any other Bank and may
exercise the same as though it were not an Affiliate of BB&T (or in BB&T’s case, acting as the Administrative Agent), and the term “Bank” or “Banks” shall, unless the context otherwise indicates, include such
Affiliate of BB&T or BB&T in its individual capacity. Such Affiliate and BB&T may (without having to account therefor to any Bank) accept deposits from, lend money to and generally engage in any kind of banking, trust or other business
with any Loan Party (and any of the Affiliates of any Loan Party) as if they were not an Affiliate of the Administrative Agent or the Administrative Agent, respectively; and such Affiliate and BB&T may accept fees and other consideration from
any Loan Party (in addition to any agency fees and arrangement fees heretofore agreed to between the Company and BB&T) for services in connection with this Agreement or any other Loan Document or otherwise without having to account for the same
to the Banks. 
  
 SECTION 7.05. Indemnification. Each Bank
severally agrees to indemnify the Administrative Agent, to the extent the Administrative Agent shall not have been reimbursed by the Loan Parties, ratably in accordance with its Facility Commitment, for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses (including, without limitation, counsel fees and disbursements) or disbursements of any kind and nature 
  

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 whatsoever which may be imposed on, incurred by or asserted against the Administrative Agent in any way relating to or
arising out of this Agreement or any other Loan Document or any other documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby (excluding, unless an Event of Default has occurred and is
continuing, the normal administrative costs and expenses incident to the performance of its agency duties hereunder) or the enforcement of any of the terms hereof or thereof or any such other documents; provided, however, that no Bank
shall be liable for any of the foregoing to the extent they arise from the gross negligence or willful misconduct of the Administrative Agent. If any indemnity furnished to the Administrative Agent for any purpose shall, in the opinion of the
Administrative Agent, be insufficient or become impaired, the Administrative Agent may call for additional indemnity and cease, or not commence, to do the acts indemnified against until such additional indemnity is furnished. 
  
 SECTION 7.06. CONSEQUENTIAL DAMAGES. THE ADMINISTRATIVE AGENT SHALL
NOT BE RESPONSIBLE OR LIABLE TO ANY BANK, ANY BORROWER, ANY GUARANTOR OR ANY OTHER PERSON OR ENTITY FOR ANY PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. 
  
 SECTION 7.07.
Payee of Note Treated as Owner. The Administrative Agent may deem and treat the payee of any Note as the owner thereof for all purposes hereof unless and until a written notice of the assignment or transfer thereof shall have been filed with
the Administrative Agent and the provisions of Section 9.07(c) have been satisfied. Any requests, authority or consent of any Person who at the time of making such request or giving such authority or consent is the holder of any Note shall be
conclusive and binding on any subsequent holder, transferee or assignee of that Note or of any Note or Notes issued in exchange therefor or replacement thereof. 
  

SECTION 7.08. Non-Reliance on Administrative Agent and Other Banks. Each Bank agrees that it has, independently and without reliance on the
Administrative Agent or any other Bank, and based on such documents and information as it has deemed appropriate, made its own credit analysis of the Loan Parties and decision to enter into this Agreement and that it will, independently and without
reliance upon the Administrative Agent or any other Bank, and based on such documents and information as it shall deem appropriate at the time, continue to make its own analysis and decisions in taking or not taking action under this Agreement or
any of the other Loan Documents. The Administrative Agent shall not be required to keep itself (or any Bank) informed as to the performance or observance by the Loan Parties of this Agreement or any of the other Loan Documents or any other document
referred to or provided for herein or therein or to inspect the properties or books of the Borrowers, Guarantors or any other Person. Except for notices, reports and other documents and information expressly required to be furnished to the Banks by
the Administrative Agent hereunder or under the other Loan Documents, the Administrative Agent shall not have any duty or responsibility to provide any Bank with any credit or other information concerning the affairs, financial condition or business
of the Loan Parties or any other Person (or any of their Affiliates) which may come into the possession of the Administrative Agent. 
  

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 SECTION 7.09. Failure to Act. Except for action expressly required of the Administrative Agent
hereunder or under the other Loan Documents, the Administrative Agent shall in all cases be fully justified in failing or refusing to act hereunder and thereunder unless it shall receive further assurances to its satisfaction by the Banks of their
indemnification obligations under Section 7.05 against any and all liability and expense which may be incurred by the Administrative Agent by reason of taking, continuing to take, or failing to take any such action. 
  
 SECTION 7.10. Resignation or Removal of Administrative Agent. Subject
to the appointment and acceptance of a successor Administrative Agent as provided below, the Administrative Agent may resign at any time by giving notice thereof to the Banks and the Company and the Administrative Agent may be removed at any time
with or without cause by the Required Banks. Upon any such resignation or removal, the Required Banks shall have the right to appoint a successor Administrative Agent. If no successor Administrative Agent shall have been so appointed by the Required
Banks and shall have accepted such appointment within 30 days after the retiring Administrative Agent’s notice of resignation or the Required Banks’ removal of the retiring Administrative Agent, then the retiring Administrative Agent may,
on behalf of the Banks, appoint a successor Administrative Agent. Any successor Administrative Agent shall be a bank which has a combined capital and surplus of at least $5,000,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder. After any retiring Administrative Agent’s resignation or removal hereunder as Administrative Agent, the provisions of this Article VII shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was acting as the Administrative Agent hereunder. 
  
 SECTION 7.11. Arrangers and Syndication Agent. The parties acknowledge and agree that each of the Arrangers and the Syndication Agent shall be
credited as, and may publicize that it is, an Arranger and the Syndication Agent, as the case may be. Without in any respect limiting the rights, privileges, powers, immunities, indemnities and other benefits granted to the Administrative Agent and
Banks, the parties further acknowledge and agree that (a) neither the Arrangers nor the Syndication Agent shall have by reason of its designation as such, any power, duty, responsibility or liability whatsoever under this Agreement or any Loan
Document or in respect of financing the transaction contemplated hereby and (b) each of the Arrangers and the Syndication Agent shall nevertheless be entitled to each of the protections and immunities granted to the Administrative Agent under
Sections 7.04, and 7.08 as fully as if it were expressly referred to therein. 
  
 SECTION 7.12. Other Currency Sub-Agent. In the event that an Other Currency Sub-Agent is appointed pursuant to Section 2.16 hereof, such Other Currency Sub-Agent shall be entitled to each of the protections,
indemnifications and immunities granted to the Administrative Agent under Sections 7.01 through 7.10 inclusive as fully as if it were expressly referred to herein. 
  

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 ARTICLE VIII 
  
 CHANGE IN CIRCUMSTANCES; COMPENSATION 
  
 SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair. If on or prior to the first day of any Interest Period: 
  
 (a) the Administrative Agent determines that deposits in Dollars (in the
applicable amounts) are not being offered in the relevant market for such Interest Period, or 
  
 (b) the Required Banks (or the Other Currency Lender in the case of Other Currency Advances) advise the Administrative Agent that the London Interbank Offered Rate as determined by the Administrative Agent will not
adequately and fairly reflect the cost to such Banks of funding the Advances for such Interest Period, 
  
 the Administrative Agent shall forthwith give notice thereof to the Company and the Banks, whereupon until the Administrative Agent notifies the Company that the circumstances giving rise to such suspension no longer
exist, the obligations of the Banks to make Euro-Dollar Loans (including without limitation Other Currency Advances) shall be suspended. Unless the Company notifies the Administrative Agent at least 2 Domestic Business Days before the date of any
Revolving Borrowing for which a Notice of Borrowing has previously been given that it elects not to borrow on such date, such Revolving Borrowing shall instead be made as a Prime Rate Borrowing. 
  
 SECTION 8.02. Illegality. If, after the date hereof, the adoption of
any applicable law, rule or regulation, or any change in any existing or future law, rule or regulation, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof (any such authority, bank or agency being referred to as an “Authority” and any such event being referred to as a “Change of Law”), or compliance by any Bank (or its Lending Office) with
any request or directive (whether or not having the force of law) of any Authority shall make it unlawful or impossible for any Bank (or its Lending Office) to make, maintain or fund its Euro-Dollar Loan and such Bank shall so notify the
Administrative Agent, the Administrative Agent shall forthwith give notice thereof to the other Banks and the Company, whereupon until such Bank notifies the Company and the Administrative Agent that the circumstances giving rise to such suspension
no longer exist: (a) the obligation of such Bank to make its portion of the Euro-Dollar Loan shall be suspended; and (b) the obligation of the Other Currency Lender to make Other Currency Advances shall be suspended. Before giving any notice to the
Administrative Agent pursuant to this Section, such Bank shall designate a different Lending Office if such designation will avoid the need for giving such notice and will not, in the judgment of such Bank, be otherwise disadvantageous in any
material respect to such Bank. If such Bank shall determine that it may not lawfully continue to maintain and fund any of its portion of the outstanding Euro-Dollar Loan to maturity and shall so specify in such notice, the Borrower shall immediately
prepay in full: (1) the then outstanding principal amount of the Euro-Dollar Loan of such Bank, together with accrued interest thereon and any amount due such Bank pursuant to Section 8.05(a); and (2) the then outstanding principal amount of the
Other Currency Advances, together with accrued interest thereon and any amount due pursuant to Section 8.05(a) (or the Other Currency Overdraft Facility Letter in respect of Other Currency Overdraft Advances). Concurrently with prepaying 

 

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 such Euro-Dollar Loan of such Bank referenced in (1) above, to the extent permitted by applicable law the Company shall
borrow a Prime Rate Loan in an equal principal amount from such Bank (on which interest and principal shall be payable contemporaneously with the related Euro-Dollar Loans of the other Banks), and such Bank shall make such a Prime Rate Loan.

  
 SECTION 8.03. Increased Cost and Reduced Return. (a) If
after the date hereof, a Change of Law or compliance by any Bank (or its Lending Office) with any request or directive (whether or not having the force of law) of any Authority: 
  
 (i) shall subject any Bank (or its Lending Office) to any tax, duty or other charge with respect to its
Euro-Dollar Loan, its Notes or its obligation to make a Euro-Dollar Loan, or shall change the basis of taxation of payments to any Bank (or its Lending Office) of the principal of or interest on its Euro-Dollar Loan or any other amounts due under
this Agreement in respect of its Euro-Dollar Loan or its obligation to make a Euro-Dollar Loan (except for changes in the rate of tax on the overall net income of such Bank or its Lending Office imposed by the jurisdiction in which such Bank’s
principal executive office or Lending Office is located); or 
  
 (ii) shall impose, modify or deem applicable any reserve, special deposit or similar requirement (including, without limitation, any such requirement imposed by the Board of Governors of the Federal Reserve System,
but excluding any such requirement included in an applicable Euro-Dollar Reserve Percentage) against assets of, deposits with or for the account of, or credit extended by, any Bank (or its Lending Office); or 
  
 (iii) shall impose on any Bank (or its Lending Office) or on
the United States market for certificates of deposit or the London interbank market any other condition affecting its Euro-Dollar Loan, its Notes or its obligation to make a Euro-Dollar Loan; 
  
 and the result of any of the foregoing is to increase the cost to such Bank (or its Lending
Office) of making or maintaining any Euro-Dollar Loan, or to reduce the amount of any sum received or receivable by such Bank (or its Lending Office) under this Agreement or under its Notes with respect thereto, by an amount deemed by such Bank, in
its reasonable discretion, to be material, then, within 15 days after demand by such Bank (with a copy to the Administrative Agent), the Company shall pay to such Bank such additional amount or amounts as will reasonably compensate such Bank for
such increased cost or reduction. 
  
 (b) If any Bank shall have
determined that after the date hereof the adoption of any applicable law, rule or regulation regarding capital adequacy, or any change in any existing or future law, rule or regulation, or any change in the interpretation or administration thereof,
or compliance by any Bank (or its Lending Office) with any request or directive regarding capital adequacy (whether or not having the force of law) of any Authority, has or would have the effect of reducing the rate of return on such Bank’s
capital as a consequence of its obligations hereunder to a level below that which such Bank could have achieved but for such adoption, change or compliance (taking into consideration such Bank’s policies with respect to capital adequacy) by an
amount deemed by such Bank, in its reasonable discretion, to be material, then 
  

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 from time to time, within 15 days after demand by such Bank, the Company shall pay to such Bank such additional amount or
amounts as will reasonably compensate such Bank for such reduction. 
  
 (c) Each Bank will promptly notify the Company and the Administrative Agent of any event of which it has knowledge, occurring after the date hereof, which will entitle such Bank to compensation pursuant to this Section as promptly as
practicable, but in any event within 90 days, after the Bank obtains actual knowledge thereof; provided that (i) if any Bank fails to give such notice within 90 days after it obtains actual knowledge of such an event, such Bank shall with respect to
compensation payable pursuant to this Section in respect of any costs resulting from such event, only be entitled to payment under this Section for costs incurred from and after the date 90 days prior to the date that such Bank does give such notice
and (ii) each Bank will designate a different Lending Office if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the judgment of such Bank, be otherwise disadvantageous to such Bank. A certificate
of any Bank claiming compensation under this Section and setting forth the additional amount or amounts to be paid to it hereunder shall be conclusive in the absence of manifest error. In determining such amount, such Bank may use any reasonable
averaging and attribution methods. 
  
 (d) The provisions of this
Section 8.03 shall be applicable with respect to any Participant, Assignee or other Transferee that is a Bank party to this Agreement (including, without limitation, any Bank that purchases a participation pursuant to Sections 2.02, 2.03 or 9.04),
and any calculations required by such provisions shall be made based upon the circumstances of (i) such Assignee or Participant, if such Participant is also a Bank hereunder, or (ii) in the case of a Participant that is not also a Bank hereunder,
the transferor Bank with respect to such participation sold to such Participant. 
  
 SECTION 8.04. Prime Rate Loans Substituted for Affected Euro-Dollar Loans. If (i) the obligation of any Bank to make or maintain a Euro-Dollar Loan has been suspended pursuant to Section 8.02 or (ii) any Bank
has demanded compensation under Section 8.03, and the Borrower shall, by at least 5 Euro-Dollar Business Days’ prior notice to such Bank through the Administrative Agent, have elected that the provisions of this Section shall apply to such
Bank, then, unless and until such Bank notifies the Company that the circumstances giving rise to such suspension or demand for compensation no longer apply, to the extent permitted by applicable law: 
  
 (a) all Advances which would otherwise be made by such Bank as part of a
Euro-Dollar Loan shall be made instead as a Prime Rate Loan, and 
  
 (b) after its portion of the Euro-Dollar Loan has been repaid, all payments of principal which would otherwise be applied to repay such Euro-Dollar Loan shall be applied to repay its Prime Rate Loan instead. 
  
 In the event that the Company shall elect that the provisions of this Section shall apply to
any Bank, the Company shall remain liable for, and shall pay to such Bank as provided herein, all amounts due such Bank under Section 8.03 in respect of the period preceding the date of conversion of such Bank’s portion of the Loan resulting
from the Company’s election. 
  

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 SECTION 8.05. Compensation to Other Currency Lender. Upon the request of any Other Currency
Lender, delivered to the Company and the Administrative Agent, the Borrowers shall pay to such Other Currency Lender such amount or amounts as shall compensate such Other Currency Lender for any loss, cost or expense incurred by such Other Currency
Lender as a result of: 
  
 (a) any payment, conversion or
prepayment (pursuant to Section 2.09, Section 2.10, 2.16, Section 8.02 or otherwise) of an Other Currency Advance on a date other than the last day of an Interest Period for such Other Currency Advance; 
  
 (b) any failure by the Borrower to prepay an Other Currency Advance on the
date for such prepayment specified in the relevant notice of prepayment hereunder; 
  
 (c) any failure by the Borrower to borrow an Other Currency Advance on the date for the Borrowing specified in the applicable Notice of Other Currency Borrowing delivered pursuant to Section 2.16 (other than an Other
Currency Overdraft Advance); or 
  
 (d) any Other Currency Advance
not being continued as, or converted into, a Euro-Dollar Loan in accordance with the Continuation/Conversion Notice therefor; 
  
 such compensation to include, without limitation, an amount equal to the excess, if any, of (x) the amount of interest which would have accrued on the amount so paid or
prepaid, converted or not converted or not prepaid or borrowed for the period from the date of such payment, prepayment, conversion, failure to convert or failure to prepay or borrow to the last day of the then current Interest Period for such Other
Currency Advance (or, in the case of a failure to prepay, convert or borrow, the Interest Period for such Other Currency Advance which would have commenced on the date of such failure to prepay, convert or borrow) at the applicable rate of interest
for such Other Currency Advance (excluding the Applicable Margin) provided for herein over (y) the amount of interest (as reasonably determined by such Other Currency Lender) such Other Currency Lender would have paid on deposits in the relevant
Other Currency of comparable amounts having terms comparable to such period placed with it by leading banks in the London interbank market. 
  
 SECTION 8.06. Replacement of Bank. In the event that any Bank gives any notice under Section 8.02 resulting in the suspension of its obligation to
make Euro-Dollar Loans or requests compensation pursuant to Section 8.03 or in the event any Loan Party is required to pay any additional amounts to any Bank pursuant to Section 2.12(c), then, so long as the condition giving rise to such suspension
or compensation exists, the Borrowers may designate another bank or financial institution (such bank or financial institution being herein called a “Replacement Bank”) acceptable to the Administrative Agent (which acceptance will not be
unreasonably withheld) and which is not an Affiliate of the Borrower, to assume such Bank’s Revolving Advance Commitment, Other Currency Commitment and Facility Commitment hereunder and to purchase the Loans of such Bank and such Bank’s
rights under this Agreement and the Notes held by such Bank, all without recourse to or representation or warranty by, or expense to, such Bank, for a purchase price equal to the outstanding principal amount of the Loans payable to such Bank plus
any accrued but unpaid interest on such Loans and accrued but unpaid fees owing to such Bank plus any amounts otherwise owing to such Bank under the Loan Documents, and upon such assumption, purchase and substitution, and subject to the execution

  

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 and delivery to the Administrative Agent by the Replacement Bank of documentation satisfactory to the Administrative
Agent (pursuant to which such Replacement Bank shall assume the obligations of such original Bank under this Agreement), the Replacement Bank shall succeed to the rights and obligations of such Bank hereunder. In the event that the Borrowers
exercise their rights under the preceding sentence, the Bank against which such rights were exercised shall no longer be a party hereto or have any rights or obligations hereunder; provided that the obligations of the Borrowers to such Bank under
Article VIII and Section 9.03 with respect to events occurring or obligations arising before or as a result of such replacement shall survive such exercise. Notwithstanding anything contained herein to the contrary, the Borrowers shall not exercise
their rights under this Section with regard to an Issuing Bank without first arranging for the termination (and return) of any Letters of Credit issued by such Issuing Bank. 
  
 ARTICLE IX 
  
 MISCELLANEOUS 
  
 SECTION 9.01. Notices. All notices, requests and other communications to any party hereunder shall be in writing (including facsimile transmission
or similar writing) and shall be given to such party at its address or telecopy number set forth on the signature pages hereof or such other address or telecopy number as such party may hereafter specify for the purpose by notice to each other
party. Each such notice, request or other communication shall be effective (i) if given by telecopier, when such telecopy is transmitted to the telecopy number specified in this Section and the telecopy machine used by the sender provides a written
confirmation that such telecopy has been so transmitted or receipt of such telecopy transmission is otherwise confirmed, (ii) if given by electronic mail, when a receipt of delivery has been received, (iii) if given by mail, 72 hours after such
communication is deposited in the mails with first class postage prepaid, addressed as aforesaid, and (iv) if given by any other means, when delivered at the address specified in this Section; provided that notices to the Administrative Agent
under Article II or Article VIII shall not be effective until received. 
  
 SECTION 9.02. No Waivers. No failure or delay by the Administrative Agent or any Bank in exercising any right, power or privilege hereunder or under any Note or other Loan Document shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies
provided by law. 
  
 SECTION 9.03. Expenses; Documentary Taxes;
Indemnification. (a) The Loan Parties shall, jointly and severally, pay (i) all expenses of the Administrative Agent, including reasonable fees and disbursements of special counsel for the Administrative Agent, in connection with the preparation
of this Agreement and the other Loan Documents, any waiver or consent hereunder or thereunder or any amendment hereof (except as provided in Section 9.07(c)) or thereof or any Default or alleged Default hereunder or thereunder, (ii) reasonable fees
and disbursements of special counsel for the Syndication Agent, in connection with the preparation of this Agreement and the other Loan Documents, and (iii) if a Default occurs, all out-of-pocket expenses incurred by the Administrative Agent or any
Bank, including fees and disbursements of counsel, in connection with such Default and collection and other enforcement proceedings resulting therefrom, including out-of-pocket expenses incurred in enforcing this Agreement and the other Loan
Documents. 
  

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 (b) The Loan Parties shall, jointly and severally, indemnify the Administrative Agent and each Bank
against any transfer taxes, documentary taxes, assessments or charges made by any Authority by reason of the execution and delivery of this Agreement or the other Loan Documents (and whether or not such transfer taxes, documentary taxes, assessments
or charges are correctly or legally asserted by the relevant Authority). Promptly upon having knowledge that any such transfer taxes, documentary taxes, assessments or charges have been levied, imposed or assessed, and promptly upon notice thereof
by the Administrative Agent or any Bank, the Loan Parties shall pay such transfer taxes, documentary taxes, assessments or charges directly to the relevant Authority (provided, however, that no Administrative Agent nor Bank shall be under any
obligation to provide any such notice to any Borrower). With respect to indemnification for transfer taxes, documentary taxes, assessments or charges actually paid by any Bank, such indemnification shall be made within 30 days after the date such
Bank or Administrative Agent makes written demand therefore. Each Borrower acknowledges that any payment made to any Bank or to any Authority in respect of the indemnification obligations of the Borrowers provided in this clause shall constitute a
payment in respect of which the provisions of clause 2.12(c) and this clause shall apply. 
  
 (c) The Loan Parties shall, jointly and severally, indemnify the Administrative Agent, the Banks and each Affiliate thereof and their respective directors, officers, employees and agents from, and hold each of them
harmless against, any and all losses, liabilities, claims or damages to which any of them may become subject, insofar as such losses, liabilities, claims or damages arise out of or result from any actual or proposed use by the Borrower of the
proceeds of any extension of credit by any Bank hereunder or breach by any Loan Party of this Agreement or any other Loan Document or from investigation, litigation (including, without limitation, any actions taken by the Administrative Agent or any
of the Banks to enforce this Agreement or any of the other Loan Documents) or other proceeding (including, without limitation, any threatened investigation or proceeding) relating to the foregoing, and the Loan Parties shall reimburse the
Administrative Agent and each Bank, and each Affiliate thereof and their respective directors, officers, employees and agents, upon demand for any expenses (including, without limitation, legal fees) incurred in connection with any such
investigation or proceeding; but excluding any such losses, liabilities, claims, damages or expenses incurred by reason of the gross negligence or willful misconduct of the Person to be indemnified. 
  
 SECTION 9.04. Setoffs; Sharing of Set-Offs. (a) Each Loan Party hereby
grants to each Bank, as security for the full and punctual payment and performance of the obligations of each Loan Party under this Agreement and the other Loan Documents, a continuing lien on and security interest in all deposits and other sums
credited by or due from such Bank to such Loan Party or subject to withdrawal by such Loan Party; and regardless of the adequacy of any collateral or other means of obtaining repayment of such obligations, each Bank may at any time upon or after the
occurrence of any Event of Default, and without notice to any Loan Party, set off the whole or any portion or portions of any or all such deposits and other sums against such obligations, whether or not any other Person or Persons could also
withdraw money therefrom. 
  
 (b) Each Bank agrees that if it
shall, by exercising any right of set-off or counterclaim or otherwise, receive payment of a proportion of the aggregate amount of principal 
  

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 and interest owing with respect to the Letter of Credit Advances and Notes held by it which is greater than the
proportion received by any other Bank in respect of the aggregate amount of all Letter of Credit Advances and principal and interest owing with respect to the Notes held by such other Bank (after giving effect to the terms of Sections 2.02, 2.03 and
6.05), the Bank receiving such proportionately greater payment shall purchase such participations in the Letter of Credit Advances and Notes held by the other Banks owing to such other Banks, and/or such other adjustments shall be made, as may be
required so that all such payments of principal and interest with respect to the Letter of Credit Advances and Notes held by the Banks owing to such other Banks shall be shared by the Banks pro rata based upon their respective Facility Commitments;
provided that (i) nothing in this Section shall impair the right of any Bank to exercise any right of set-off or counterclaim it may have and to apply the amount subject to such exercise to the payment of indebtedness of the Loan Parties
other than its indebtedness under the Letter of Credit Advances and Notes, provided that any such rights of a Bank are subject to the terms and conditions of the Intercreditor Agreement, and (ii) if all or any portion of such payment received by the
purchasing Bank is thereafter recovered from such purchasing Bank, such purchase from each other Bank shall be rescinded and such other Bank shall repay to the purchasing Bank the purchase price of such participation to the extent of such recovery
together with an amount equal to such other Bank’s ratable share (according to the proportion of (x) the amount of such other Bank’s required repayment to (y) the total amount so recovered from the purchasing Bank) of any interest or other
amount paid or payable by the purchasing Bank in respect of the total amount so recovered. The Loan Parties agree, to the fullest extent they may effectively do so under applicable law, that any holder of a participation in the Letter of Credit
Advances or Notes, whether or not acquired pursuant to the foregoing arrangements, may exercise rights of set-off or counterclaim and other rights with respect to such participation as fully as if such holder of a participation were a direct
creditor of the Loan Parties in the amount of such participation. 
  
 SECTION 9.05. Amendments and Waivers. (a) Any provision of this Agreement, the Notes or any other Loan Documents (excluding the Intercreditor Agreement which may be amended as provided therein) may be amended or waived if, but only
if, such amendment or waiver is in writing and is signed by the Borrower and the Required Banks (and, if the rights or duties of the Administrative Agent are affected thereby, by the Administrative Agent); provided that no such amendment or
waiver shall, unless signed by all the Banks, (i) increase the Revolving Advance Commitment, Other Currency Commitment or Facility Commitment of any Bank or subject any Bank to any additional obligation, (ii) decrease the rate of interest on any
Advance or decrease any fees (excluding Facing Fees and other fees payable solely to an Issuing Bank for its own account) hereunder, (iii) extend the date fixed for any payment of principal of or interest on any Advance or any fees (excluding Facing
Fees and other fees payable solely to an Issuing Bank for its own account) hereunder, (iv) decrease the amount of principal, decrease the amount of interest or decrease the amount of fees (excluding Facing Fees and other fees payable solely to an
Issuing Bank for its own account) due on any date fixed for the payment thereof, (v) except as a result of Sections 2.01(b), 2.01(c) or 2.16(a)(2), change the percentage of the Revolving Advance Commitment, Other Currency Commitment or Facility
Commitments or of the aggregate unpaid principal amount of the Notes, or the percentage of Banks, which shall be required for the Banks or any of them to take any action under this Section or any other provision of this Agreement, (vi) change the
manner of application of any payments made under this Agreement or the other Loan Documents, (vii) release or substitute all or substantially all of the Collateral held as security for the Obligations, (viii) change or modify the 
  

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 definition of “Required Banks,” or (ix) release any guaranty (other than a release pursuant to Section 5.26(c))
given to support payment of the Guaranteed Obligations and provided further that: (I) no amendment or waiver shall, unless signed by the Swing Line Lender, (A) modify or amend Section 2.15; or (B) change in any manner, any term or condition
applicable to the Swing Line Advances; (II) no amendment or waiver shall, unless signed by the Other Currency Lender and BB&T, (A) modify or amend Section 2.16 or 6.05; or (B) change in any manner, any term or condition applicable to the Other
Currency Advances (other than terms and conditions applicable to the Other Currency Overdraft Advances, the amendment of which shall be subject to the Other Currency Lender’s consent in writing provided that no such amendment shall subject any
Bank to any additional obligation without such Bank’s written consent); (III) no amendment or waiver shall, unless signed by the U.S. Dollar Issuing Bank, (A) modify or amend Section 2.03 or 3.03; or (B) change in any manner, any term or
condition applicable to the U.S. Dollar Letters of Credit or the U.S. Dollar Letter of Credit Agreements; (IV) no amendment or waiver shall, unless signed by the Other Currency Issuing Bank, (A) modify or amend Section 2.19 or 3.04, or (B) change in
any manner, any term or condition applicable to the Other Currency Letters of Credit or the Other Currency Letter of Credit Agreements. The amount of Facing Fees and other fees payable solely to an Issuing Bank for its own account may be amended,
from time to time, by the Borrower and such Issuing Bank without the approval of any of the Banks. 
  
 (b) No Loan Party will solicit, request or negotiate for or with respect to any proposed waiver or amendment of any of the provisions of this Agreement
unless each Bank shall be informed thereof by the Borrower and shall be afforded an opportunity of considering the same and shall be supplied by the Borrower with sufficient information to enable it to make an informed decision with respect thereto.
Executed or true and correct copies of any waiver or consent effected pursuant to the provisions of this Agreement shall be delivered by the Borrowers to each Bank forthwith following the date on which the same shall have been executed and delivered
by the requisite percentage of Banks. No Loan Party will, directly or indirectly, pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise, to any Bank (in its capacity as such) as
consideration for or as an inducement to the entering into by such Bank of any waiver or amendment of any of the terms and provisions of this Agreement unless such remuneration is concurrently paid, on the same terms, ratably to all such Banks.

  
 SECTION 9.06. Margin Stock Collateral. Each of the
Banks represents to the Administrative Agent and each of the other Banks that it in good faith is not, directly or indirectly (by negative pledge or otherwise), relying upon any Margin Stock as collateral in the extension or maintenance of the
credit provided for in this Agreement. 
  
 SECTION 9.07.
Successors and Assigns. (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided that no Loan Party may assign or otherwise transfer any of
its rights under this Agreement. 
  
 (b) Any Bank, other than a
Conduit Lender, may at any time sell to one or more Persons (each a “Participant”) participating interests in any Advance owing to such Bank, any Note held by such Bank, any Commitment hereunder or any other interest of such Bank
hereunder. In the event of any such sale by a Bank of a participating interest to a Participant, such Bank’s obligations under this Agreement shall remain unchanged, such Bank shall remain 
  

 95 

 solely responsible for the performance thereof, such Bank shall remain the holder of any such Note for all purposes under
this Agreement, and the Borrower and the Administrative Agent shall continue to deal solely and directly with such Bank in connection with such Bank’s rights and obligations under this Agreement. In no event shall a Bank that sells a
participation be obligated to the Participant to take or refrain from taking any action hereunder except that such Bank may agree that it will not (except as provided below), without the consent of the Participant, agree to (i) extend any date fixed
for the payment of principal of or interest on the related Advance or Advances, (ii) decrease the amount of any principal, interest or fees due on any date fixed for the payment thereof with respect to the related Advance or Advances, (iii) the
change of the principal of the related Advance or Advances, (iv) any decrease in the rate at which either interest is payable thereon or (if the Participant is entitled to any part thereof) any fee is payable hereunder from the rate at which the
Participant is entitled to receive interest or any fee (as the case may be) in respect of such participation, (v) the release or substitution of all or a substantial part of the collateral (if any) held as security for the Obligations, or (vi) the
release of any guaranty (other than a release pursuant to Section 5.26(c)) given to support payment of the Guaranteed Obligations. Each Bank selling a participating interest in any Advance, Note, Commitment or other interest under this Agreement
shall, within 10 Domestic Business Days of such sale, provide the Borrower and the Administrative Agent with written notification stating that such sale has occurred and identifying the Participant and the interest purchased by such Participant;
provided, that a Bank shall not be required to provide written notification of a participation sold to an Affiliate of a Bank. The Loan Parties agree that each Participant shall be entitled to the benefits of Article VIII with respect to its
participation in Loans outstanding from time to time. 
  
 (c) Any
Bank, other than a Conduit Lender, may at any time assign to one or more banks or financial institutions (each an “Assignee”) all, or a proportionate part of all, of its rights and obligations under this Agreement, the Notes and the other
Loan Documents, and such Assignee shall assume all such rights and obligations, pursuant to an Assignment and Acceptance in the form attached hereto as Exhibit J, executed by such Assignee, such transferor Bank and the Administrative Agent (and, in
the case of: (i) an Assignee that is not then a Bank or an Affiliate of a Bank; and (ii) an assignment not made during the existence of a Default or an Event of Default, by the Borrower); provided that (i) no interest may be sold by a Bank pursuant
to this paragraph (c) unless the Assignee shall agree to assume ratably equivalent portions of the transferor Bank’s Facility Commitment, Revolving Advance Commitment, Other Currency Commitment, U.S. Dollar Letter of Credit Commitment and Other
Currency Letter of Credit Commitment, (ii) the amount of the Commitment of the assigning Bank being assigned pursuant to such assignment (determined as of the effective date of the assignment) shall be equal to $5,000,000 (or any larger multiple of
$1,000,000) (except that any such assignment may be in the full amount of the assigning Bank’s Commitment), (iii) no interest may be sold by a Bank pursuant to this paragraph (c) to any Assignee that is not then a Bank or an Affiliate of a Bank
without the consent of the Borrower, which consent shall not be unreasonably withheld, provided that the Borrower’s consent shall not be necessary with respect to any assignment made during the existence of a Default or an Event of Default;
(iv) a Bank may not have more than two Assignees that are not then Banks at any one time, (v) no interest may be sold by a Bank pursuant to this paragraph (c) to any Assignee that is not then a Bank or an Affiliate of a Bank, without the consent of
the Administrative Agent, which consent shall not be unreasonably withheld, provided, that the Administrative Agent shall be permitted to require that (at the expense of the assigning Other Currency Lender) as a condition to any such assignment
which first results in 
  

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 multiple Other Currency Lenders, that an amendment to this Agreement and the other Loan Documents in form and content
satisfactory to the Administrative Agent be entered into by all Loan Parties and Banks to address the methods of borrowing, funding, repayment and administration of this Agreement as shall be mutually agreeable to the Loan Parties, Administrative
Agent and Banks and no such assignment shall be effective until the conditions set forth in the following sentence are satisfied; and (vi) no interest may be sold by a Bank to an Assignee that is not a party to the Intercreditor Agreement; and (vii)
no interest in a Commitment may be sold by a Bank pursuant to this paragraph (c) to any Assignee that is not then a Bank or an Affiliate of a Bank, without the consent of the Issuing Banks, which consent may be withheld by the Issuing Banks in their
sole and absolute discretion. Upon (A) execution of the Assignment and Acceptance by such transferor Bank, such Assignee, the Administrative Agent and (if applicable) the Borrower, (B) delivery of an executed copy of the Assignment and Acceptance to
the Borrower and the Administrative Agent, (C) payment by such Assignee to such transferor Bank of an amount equal to the purchase price agreed between such transferor Bank and such Assignee, (D) delivery of an executed amendment to the
Intercreditor Agreement adding the Assignee as a party thereto, (E) in connection with an assignment which first results in multiple Other Currency Lenders, delivery of an amendment to this Agreement and the other Loan Documents in form and content
satisfactory to the Administrative Agent addressing such issues in respect of the methods of borrowing, funding, repayment and administration of this Agreement as the Administrative Agent may reasonably require, and (F) payment by the assigning Bank
of a processing and recordation fee of $3,500 to the Administrative Agent if the Assignee is not a Bank or Affiliate of a Bank and $1,000 if the Assignee is a Bank or Affiliate of a Bank, such Assignee shall for all purposes be a Bank party to this
Agreement and shall have all the rights and obligations of a Bank under this Agreement to the same extent as if it were an original party hereto with Commitments as set forth in such instrument of assumption, and the transferor Bank shall be
released from its obligations hereunder to a corresponding extent, and no further consent or action by the Borrower, the Banks or the Administrative Agent shall be required. Upon the consummation of any transfer to an Assignee pursuant to this
paragraph (c), the transferor Bank, the Administrative Agent and the Borrower shall make appropriate arrangements so that, if required, a new Note is issued to each of such Assignee and such transferor Bank. Notwithstanding the foregoing, any
Conduit Lender may assign at any time to its designating Bank hereunder without the consent of the Borrower or the Administrative Agent any or all of the Advances it may have funded hereunder and pursuant to its designation agreement and without
regard to the limitations set forth in the first sentence of this subsection 9.07(c). 
  
 (d) Subject to the provisions of Section 9.08, the Loan Parties authorize each Bank to disclose to any Participant, Assignee or other transferee (each a “Transferee”) and any prospective Transferee any and
all financial and other information in such Bank’s possession concerning the Loan Parties which has been delivered to such Bank by the Loan Parties pursuant to this Agreement or which has been delivered to such Bank by the Loan Parties in
connection with such Bank’s credit evaluation prior to entering into this Agreement. 
  
 (e) No Transferee shall be entitled to receive any greater payment under Section 8.03 than the transferor Bank would have been entitled to receive with respect to the rights transferred, unless such transfer is made
with the Borrower’s prior written consent or by reason of the provisions of Section 8.02 or 8.03 requiring such Bank to designate a different Lending Office under certain circumstances or at a time when the circumstances giving rise to such
greater payment did not exist. 
  

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 (f) Anything in this Section 9.07 to the contrary notwithstanding, any Bank may assign and pledge all or
any portion of the Loan and/or obligations owing to it to any Federal Reserve Bank or the United States Treasury as collateral security pursuant to Regulation A of the Board of Governors of the Federal Reserve System and Operating Circular issued by
such Federal Reserve Bank, provided that any payment in respect of such assigned Loan and/or obligations made by the Borrower to the assigning and/or pledging Bank in accordance with the terms of this Agreement shall satisfy the Borrower’s
obligations hereunder in respect of such assigned Loan and/or obligations to the extent of such payment. No such assignment shall release the assigning and/or pledging Bank from its obligations hereunder. 
  
 SECTION 9.08. Confidentiality. Each Bank agrees to exercise its
commercially reasonable best efforts to keep any non-public information delivered or made available by the Loan Parties to it, confidential from anyone other than persons employed or retained by such Bank who are or are expected to become engaged in
evaluating, approving, structuring or administering the Loan; provided, however, that nothing herein shall prevent any Bank from disclosing such information (i) to any other Bank, (ii) upon the order of any court or administrative
agency, (iii) upon the request or demand of any regulatory agency or authority having jurisdiction over such Bank, (iv) which has been publicly disclosed, (v) to the extent reasonably required in connection with any litigation to which the
Administrative Agent, any Bank or their respective Affiliates may be a party, (vi) to the extent reasonably required in connection with the exercise of any remedy hereunder, (vii) to such Bank’s legal counsel and independent auditors and (viii)
to any actual or proposed Participant, Assignee or other Transferee of all or part of its rights hereunder which has agreed in writing to be bound by the provisions of this Section 9.08. 
  
 SECTION 9.09. Representation by Banks. Each Bank hereby represents that it is a commercial lender or financial
institution which makes loans in the ordinary course of its business and that it will make its Advances hereunder for its own account in the ordinary course of such business; provided, however, that, subject to Section 9.07, the
disposition of the Note or Notes held by that Bank shall at all times be within its exclusive control. 
  
 SECTION 9.10. Obligations Several. The obligations of each Bank hereunder are several, and no Bank shall be responsible for the obligations or
commitment of any other Bank hereunder. Nothing contained in this Agreement and no action taken by the Banks pursuant hereto shall be deemed to constitute the Banks to be a partnership, an association, a joint venture or any other kind of entity.
The amounts payable at any time hereunder to each Bank shall be a separate and independent debt, and subject to the terms of the Intercreditor Agreement, each Bank shall be entitled to protect and enforce its rights arising out of this Agreement or
any other Loan Document and it shall not be necessary for any other Bank to be joined as an additional party in any proceeding for such purpose. 
  
 SECTION 9.11. Survival of Certain Obligations. Sections 8.03(a), 8.03(b), 8.05 and 9.03, and the obligations of the Loan Parties thereunder, shall
survive, and shall continue to be enforceable notwithstanding, the termination of this Agreement, the Swing Line facility described in Section 2.15 and the Commitments and the payment in full of the principal of and interest on all Advances and
Swing Line Advances. 
  

 98 

 SECTION 9.12. South Carolina Law. This Agreement and each Note shall be construed in accordance
with and governed by the law of the State of South Carolina. 
  
 SECTION 9.13. Severability. In case any one or more of the provisions contained in this Agreement, the Notes or any of the other Loan Documents should be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby and shall be enforced to the greatest extent permitted by law. 
  
 SECTION 9.14. Interest. In no event shall the amount of interest due or payable hereunder or under the Notes exceed
the maximum rate of interest allowed by applicable law, and in the event any such payment is inadvertently made to any Bank by a Borrower or inadvertently received by any Bank, then such excess sum shall be credited as a payment of principal, unless
the Borrower shall notify such Bank in writing that it elects to have such excess sum returned forthwith. It is the express intent hereof that the Borrowers not pay and the Banks not receive, directly or indirectly in any manner whatsoever, interest
in excess of that which may legally be paid by the Borrowers under applicable law. 
  
 SECTION 9.15. Interpretation. No provision of this Agreement or any of the other Loan Documents shall be construed against or interpreted to the disadvantage of any party hereto by any court or other
governmental or judicial authority by reason of such party having or being deemed to have structured or dictated such provision. 
  
 SECTION 9.16. Consent to Jurisdiction. The Loan Parties (a) and each of the Banks and the Administrative Agent irrevocably waives, to the fullest
extent permitted by law, any and all right to trial by jury in any legal proceeding arising out of this Agreement, any of the other Loan Documents, or any of the transactions contemplated hereby or thereby, (b) submit to personal jurisdiction in the
State of South Carolina, the courts thereof and the United States District Courts sitting therein, for the enforcement of this Agreement, the Notes and the other Loan Documents, (c) waives any and all personal rights under the law of any
jurisdiction to object on any basis (including, without limitation, inconvenience of forum) to jurisdiction or venue within the State of South Carolina for the purpose of litigation to enforce this Agreement, the Notes or the other Loan Documents,
and (d) agrees that service of process may be made upon it in the manner prescribed in Section 9.01 for the giving of notice to the Borrower. Nothing herein contained, however, shall prevent the Administrative Agent from bringing any action or
exercising any rights against any security and against the Loan Parties personally, and against any assets of the Loan Parties, within any other state or jurisdiction. 
  
 SECTION 9.17. Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon the same instrument. 
  
 SECTION 9.18. Intercreditor Agreement. The Banks, Administrative Agent, IR Bank and Issuing Banks have entered into an Intercreditor Agreement
dated of even date herewith governing the rights and responsibilities of the Administrative Agent to the Banks, IR 
  

 99 

 Bank and Issuing Banks and certain obligations of the Administrative Agent. The Borrowers and Guarantors acknowledge and
agree that they are not a third-party beneficiary of any provisions of the Intercreditor Agreement and are not entitled to rely thereon or enforce any provisions thereof. The Borrowers and Guarantors also acknowledge that the Intercreditor Agreement
may be amended by the Banks, IR Bank and Issuing Banks without notice to or approval by the Borrowers and Guarantors. 
  
 SECTION 9.19. Judgment Currency. The Obligations of the Borrowers and Guarantors in respect of any sum due in any currency (the “Original
Currency”) to any Bank, the Issuing Banks, the Other Currency Lenders, or the Administrative Agent hereunder shall, notwithstanding any judgment in a currency other than the Original Currency (the “Judgment Currency”), be
discharged only to the extent that on the Business Day following receipt by such Bank, Issuing Banks, Other Currency Lender or the Administrative Agent of any sum adjudged to be so due in the Judgment Currency, such Bank, Issuing Banks, Other
Currency Lender or the Administrative Agent, in accordance with normal banking procedures, purchases the Original Currency with the Judgment Currency. If the amount of Original Currency so purchased is less than the sum originally due to such Bank,
Issuing Banks, Other Currency Lender or the Administrative Agent, the Borrowers and Guarantors agree as a separate obligation and notwithstanding any such judgment, jointly and severally to indemnify each Bank, each Issuing Bank, Other Currency
Lender and the Administrative Agent, as the case may be, against such loss. 
  
 SECTION 9.20. Other Transactions. Nothing contained herein shall preclude the Administrative Agent, any Issuing Bank, any Other Currency Lender or any other Bank from engaging in any transaction, in addition to
those contemplated by the Loan Documents, with the Borrowers or any of their respective Affiliates in which such Borrower or such Affiliate is not restricted hereby from engaging with any other Person. 
  
 SECTION 9.21. Patriot Act Notice, etc. Each Bank, the Other Currency
Lender and the Administrative Agent (for itself and not on behalf of any other party) hereby notifies the Borrowers and Guarantors that, pursuant to the requirements of the Patriot Act and applicable U.K. law, it is required to obtain, verify and
record information that identifies each Borrower and Guarantor, which information includes the names and addresses and other information that will allow such Bank, the Other Currency Lender or the Administrative Agent, as applicable, to identify
each Borrower and Guarantor in accordance with the Patriot Act and such applicable U.K. law. The Borrowers and Guarantors will, and will cause each of their Subsidiaries to, provide, to the extent commercially reasonable or required by applicable
law or regulation, such information and take such actions as are reasonably requested by the Administrative Agent, the Other Currency Lender or any Banks in order to assist the Administrative Agent, the Other Currency Lender and the Banks in
maintaining compliance with the Patriot Act and applicable U.K. law. 
  
 ARTICLE X 
  
 GUARANTY 
  
 SECTION 10.01. Unconditional Guaranty. Each Guarantor hereby
irrevocably, unconditionally and jointly and severally guarantees, each as a primary obligor and not merely as 
  

 100 

 a surety, to the Administrative Agent, the Issuing Banks and the Banks (including, without limitation, the Other Currency
Lenders, the Swing Line Lender) the due and punctual payment of the principal of and the premium, if any, and interest on the Guaranteed Obligations and any and all other amounts due under or pursuant to the Loan Documents, when and as the same
shall become due and payable (whether at stated maturity or by optional or mandatory prepayment or by declaration, redemption or otherwise) in accordance with the terms of the Loan Documents. The Guarantors’ guaranty under this Section is an
absolute, present and continuing guarantee of payment and not of collectibility, and is in no way conditional or contingent upon any attempt to collect from any Borrower, any of the Guarantors or any other guarantor of the Guaranteed Obligations (or
any portion thereof) or upon any other action, occurrence or circumstances whatsoever. In the event that any Borrower or any Guarantor shall fail so to pay any such principal, premium, interest or other amount to the Administrative Agent, the
Issuing Banks or a Bank, the Guarantors will pay the same forthwith, without demand, presentment, protest or notice of any kind (all of which are waived by the Guarantors to the fullest extent permitted by law), in lawful money of the United States,
at the place for payment specified in Loan Documents or specified by such Administrative Agent in writing, to such Administrative Agent. The Guarantors further agree, promptly after demand, to pay to the Administrative Agent, the Issuing Banks and
Banks the costs and expenses incurred by such Administrative Agent, Issuing Bank or Bank in connection with enforcing the rights of such Administrative Agent, Issuing Banks, and Banks against any or all of the Borrowers and any or all of the
Guarantors (whether in a bankruptcy proceeding or otherwise) following any default in payment of any of the Guaranteed Obligations or the obligations of the Guarantors hereunder, including, without limitation, the fees and expenses of counsel to the
Administrative Agent, Issuing Banks and such Banks. 
  
 SECTION
10.02. Obligations Absolute. The obligations of the Guarantors hereunder are and shall be absolute and unconditional, irrespective of the validity, regularity or enforceability of this Agreement, any of the Guaranteed Obligations or any of
the Loan Documents, shall not be subject to any counterclaim, set-off, deduction or defense based upon any claim any of the Guarantors may have against any Borrower, any other Guarantor or the Administrative Agent, any Issuing Bank or any Bank
hereunder or otherwise, and shall remain in full force and effect without regard to, and shall not be released, discharged or in any way affected by, to the fullest extent permitted by law, any circumstance or condition whatsoever (whether or not
any of the Guarantors shall have any knowledge or notice thereof), including, without limitation: 
  
 (a) any amendment or modification of or supplement to any of the Loan Documents or any other instrument referred to herein or therein, or any assignment
or transfer of any thereof or of any interest therein, or any furnishing or acceptance of additional security for any of the Guaranteed Obligations; 
  
 (b) any waiver, consent or extension under any Loan Document or any such other instrument, or any indulgence or other action or inaction under or in
respect of, or any extensions or renewals of, any Loan Document, any such other instrument or any Guaranteed Obligation; 
  
 (c) any failure, omission or delay on the part of the Administrative Agent to enforce, assert or exercise any right, power or remedy conferred on or
available to the Administrative Agent, any Issuing Bank or any Bank against any Borrower or any Guarantor, any Subsidiary of any Borrower or any Subsidiary of any Guarantor; 
  

 101 

 (d) any bankruptcy, insolvency, readjustment, composition, liquidation or similar proceeding with respect
to any Borrower, any Guarantor, any Subsidiary of any Borrower or any Subsidiary of any Guarantor or any property of any Borrower, any Guarantor or any such Subsidiary or any unavailability of assets against which the Guaranteed Obligations, or any
of them, may be enforced; 
  
 (e) any merger or consolidation of
any Borrower, any Subsidiary of any Borrower or any Guarantor or any of the Guarantors into or with any other Person or any sale, lease or transfer of any or all of the assets of any of the Guarantors, any Borrower or any Subsidiary of any Borrower
or any Guarantor to any Person; 
  
 (f) any failure on the part of
any Borrower, any Guarantor or any Subsidiary of any Borrower or any Guarantor for any reason to comply with or perform any of the terms of any agreement with any of the Guarantors; 
  
 (g) any exercise or non-exercise by the Administrative Agent, any Issuing Bank or any Bank, of any right, remedy, power or
privilege under or in respect of any of the Loan Documents or the Guaranteed Obligations, including, without limitation, under this Section; 
  
 (h) any default, failure or delay, willful or otherwise, in the performance or payment of any of the Guaranteed Obligations; 
  
 (i) any furnishing or acceptance of security, or any release, substitution or
exchange thereof, for any of the Guaranteed Obligations; 
  
 (j)
any failure to give notice to any of the Guarantors of the occurrence of any breach or violation of, or any event of default or any default under or with respect to, any of the Loan Documents or the Guaranteed Obligations; 
  
 (k) any partial prepayment, or any assignment or transfer, of any of the
Guaranteed Obligations; or 
  
 (l) any other circumstance (other
than indefeasible payment in full) which might otherwise constitute a legal or equitable discharge or defense of a guarantor or which might in any manner or to any extent vary the risk of such Guarantor. 
  
 The Guarantors covenant that their respective obligations hereunder will not
be discharged except by complete performance of the obligations contained in the Loan Documents and this Agreement and the final and indefeasible payment in full of the Guaranteed Obligations. The Guarantors unconditionally waive, to the fullest
extent permitted by law (A) notice of any of the matters referred to in this Section, (B) any and all rights which any of the Guarantors may now or hereafter have arising under, and any right to claim a discharge of the Guarantor’s obligations
hereunder by reason of the failure or refusal by the Administrative Agent, any Issuing Bank, or any Bank to take any action pursuant to any statute permitting a Guarantor to request that the Administrative Agent or any Bank attempt to collect the
Guaranteed Obligations from any Borrower, any of the Guarantors or any other guarantor, (C) all notices which may be required by statute, rule of law or otherwise to preserve any of the rights of the Administrative Agent, any Issuing Bank or any
Bank against the Guarantors, including, without limitation, presentment to or demand of payment from any Borrower, any of the Subsidiaries of the 
  

 102 

 Borrower or any Guarantor, or any of the other Guarantors with respect to any Loan Document or this agreement, notice of
acceptance of the Guarantors’ guarantee hereunder and/or notice to any Borrower, any of the Subsidiaries of any Borrower or any Guarantor, or any Guarantor of default or protest for nonpayment or dishonor, (D) any diligence in collection from
or protection of or realization upon all or any portion of the Guaranteed Obligations or any security therefor, any liability hereunder, or any party primarily or secondarily liable for all or any portion of the Guaranteed Obligations, and (E) any
duty or obligation of the Administrative Agent, any Issuing Bank or any Bank to proceed to collect all or any portion of the Guaranteed Obligations from, or to commence an action against, any Borrower, any Guarantor or any other Person, or to resort
to any security or to any balance of any deposit account or credit on the books of the Administrative Agent, any Issuing Bank or any Bank in favor of any Borrower, any Guarantor or any other Person, despite any notice or request of any of the
Guarantors to do so. 
  
 SECTION 10.03. Continuing Obligations;
Reinstatement. The obligations of the Guarantors under this Article X are continuing obligations and shall continue in full force and effect until such time as all of the Guaranteed Obligations (and any renewals and extensions thereof)
shall have been finally and indefeasibly paid and satisfied in full. The obligations of the Guarantors under this Article X shall continue to be effective or be automatically reinstated, as the case may be, if any payment made by any
Borrower, any Guarantor or any Subsidiary of any Borrower or any Guarantor on, under or in respect of any of the Guaranteed Obligations is rescinded or must otherwise be restored or returned by the recipient upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of any Borrower, any Guarantor or any such Subsidiary, or upon or as a result of the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to any Borrower, any
Guarantor or any such Subsidiary or any substantial part of the property of any Borrower, any Guarantor or any such Subsidiary, or otherwise, all as though such payment had not been made. If an event permitting the acceleration of all or any portion
of the Guaranteed Obligations shall at any time have occurred and be continuing, and such acceleration shall at such time be stayed, enjoined or otherwise prevented for any reason, including without limitation because of the pendency of a case or
proceeding relating to any Borrower, any Guarantor or any Subsidiary of any Borrower or any Guarantor under any bankruptcy or insolvency law, for purposes of this Article X and the obligations of the Guarantors hereunder, such Guaranteed
Obligations shall be deemed to have been accelerated with the same effect as if such Guaranteed Obligations had been accelerated in accordance with the terms of the applicable Loan Documents or of this Agreement. 
  
 SECTION 10.04. Additional Security, Etc. The Guarantors authorize the
Administrative Agent on behalf of the Issuing Banks and Banks without notice to or demand on the Guarantors and without affecting their liability hereunder, from time to time (a) to obtain additional or substitute endorsers or guarantors; (b) to
exercise or refrain from exercising any rights against, and grant indulgences to, any Borrower, any Subsidiary of any Borrower or any Guarantor, any other Guarantor or others; and (c) to apply any sums, by whomsoever paid or however realized, to the
payment of the principal of, premium, if any, and interest on, and other obligations consisting of, the Guaranteed Obligations. The Guarantors waive any right to require the Administrative Agent, any Issuing Bank or any Bank to proceed against any
additional or substitute endorsers or guarantors or any Borrower or any of their Subsidiaries or any other Person or to pursue any other remedy available to the Administrative Agent, any Issuing Bank or any such Bank. 
  

 103 

 SECTION 10.05. Information Concerning the Borrowers. The Guarantors assume all responsibility for
being and keeping themselves informed of the financial condition and assets of the Borrowers, the other Guarantors and their respective Subsidiaries, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations
and the nature, scope and extent of the risks which the Guarantors assume and insure hereunder, and agree that neither the Administrative Agent, any Issuing Bank nor any Bank shall have any duty to advise the Guarantors of information known to the
Administrative Agent, any Issuing Bank or any such Bank regarding or in any manner relevant to any of such circumstances or risks. 
  
 SECTION 10.06. Guarantors’ Subordination. The Guarantors hereby absolutely subordinate, both in right of payment and in time of payment, any
present and future indebtedness of the Borrowers or any Subsidiary of the Borrowers or any Guarantor to any or all of the Guarantors to the indebtedness of the Borrowers or any such Subsidiary to the Issuing Banks or the Banks (or any of them),
provided that until receipt of notice from the Administrative Agent that an Event of Default then exists and further stating that no further payments may be received, the Guarantors may receive payments in respect of such present or future
indebtedness in the ordinary course of business. 
  
 SECTION
10.07. Waiver of Subrogation. Notwithstanding anything herein to the contrary, until the Guaranteed Obligations owed to the Administrative Agent, the Issuing Banks and the Banks have been indefeasibly paid in full, the Guarantors hereby waive
any right of subrogation (under contract, Section 509 of the Bankruptcy Code or otherwise) or any other right of indemnity, reimbursement or contribution and hereby waive any right to enforce any remedy that the Administrative Agent, any Issuing
Bank or any Bank now has or may hereafter have against the Borrower, any Guarantor or any endorser or any other guarantor of all or any part of the Guaranteed Obligations, and until the Guaranteed Obligations owed to the Administrative Agent, the
Issuing Banks and the Banks have been indefeasibly paid in full, the Guarantors hereby waive any benefit of, and any right to participate in, any security or collateral given to the Administrative Agent, any Issuing Bank or any Bank to secure
payment or performance of the Guaranteed Obligations or any other liability of the Borrower to the Administrative Agent, any Issuing Bank or any Bank. 
  
 SECTION 10.08. Enforcement. In the event that the Guarantors shall fail forthwith to pay upon demand of the Administrative Agent, any Issuing Bank
or any Bank any amounts due pursuant to this Article X or to perform or comply with or to cause performance or compliance with any other obligation of the Guarantors under this Agreement, the Administrative Agent, any Issuing Bank and any
Bank shall be entitled and empowered to institute any action or proceeding at law or in equity for the collection of the sums so due and unpaid or for the performance of or compliance with such terms, and may prosecute any such action or proceeding
to judgment or final decree and may enforce such judgment or final decree against the Guarantors and collect in the manner provided by law out of the property of the Guarantors, wherever situated, any monies adjudged or decreed to be payable. The
obligations of the Guarantors under this Agreement are continuing obligations and a fresh cause of action shall arise in respect of each default hereunder. 
  
 SECTION 10.09. Miscellaneous. Except as may otherwise be expressly agreed upon in writing, the liability of the Guarantors under this Article X
shall neither affect nor be affected by any prior or subsequent guaranty by the Guarantors of any other indebtedness to the 
  

 104 

 Administrative Agent, the Issuing Banks or the Banks. Notwithstanding anything in this Article X to the contrary, the
maximum liability of each Guarantor hereunder shall in no event exceed the maximum amount which could be paid out by such Guarantor without rendering such Guarantor’s obligations under this Article X, in whole or in part, void or voidable under
applicable law, including, without limitation, (i) the Bankruptcy Code of 1978, as amended, (ii) the Uniform Fraudulent Transfer Act and (iii) any other applicable state or federal law relative to fraudulent conveyances. 
  
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 105 

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

							
	SCANSOURCE, INC.	 	 
			
	 By:
  
	 	 /s/ Richard P. Cleys

	 	 (SEAL)

	 Title:
	 	 Chief Financial Officer
	 	 
		
	6 Logue Court	 	 
	Greenville, South Carolina 29615	 	 
	Attention: Linda Davis	 	 
	Telecopy number: 864-288-4886	 	 
	Telephone number: 864-286-4271	 	 
		
	 NETPOINT INTERNATIONAL, INC.
	 	 
			
	 By:
  
	 	 /s/ Michael L. Baur

	 	 (SEAL)

	 Title:
	 	 Director and Chief Executive Officer
	 	 
		
	6 Logue Court	 	 
	Greenville, South Carolina 29615	 	 
	Attention: Linda Davis	 	 
	Telecopy number: 864-288-4886	 	 
	Telephone number: 864-286-4271	 	 
		
	4100 QUEST, LLC	 	 
		
	 By:
	 	 ScanSource, Inc., its sole member

				
	 	 	 By:
	 	 /s/ Richard P. Cleys

	 	 (SEAL)

	 	 	 Title:
	 	 Chief Financial Officer
	 	 
		
	6 Logue Court	 	 
	Greenville, South Carolina 29615	 	 
	Attention: Linda Davis	 	 
	Telecopy number: 864-288-4886	 	 
	Telephone number: 864-286-4271	 	 

  

 106 

							
	PARTNER SERVICES, INC.	 	 
			
	 By:
  
	 	 /s/ Richard P. Cleys

	 	 (SEAL)

	 Title:
	 	 Chief Financial Officer
	 	 
		
	6 Logue Court	 	 
	Greenville, South Carolina 29615	 	 
	Attention: Linda Davis	 	 
	Telecopy number: 864-288-4886	 	 
	Telephone number: 864-286-4271	 	 
		
	 SCANSOURCE EUROPE SPRL
	 	 
			
	 By:
  
	 	 /s/ Linda B. Davis

	 	 (SEAL)

	 Title:
	 	General Manager with Special Power Delegation and Proxy	 	 
		
	6 Logue Court	 	 
	Greenville, South Carolina 29615	 	 
	Attention: Linda Davis	 	 
	Telecopy number: 864-288-4886	 	 
	Telephone number: 864-286-4271	 	 
		
	 SCANSOURCE EUROPE LIMITED
	 	 
			
	 By:
  
	 	 /s/ Linda B. Davis

	 	 (SEAL)

	 Title:
	 	 Alternate Director
	 	 
		
	6 Logue Court	 	 
	Greenville, South Carolina 29615	 	 
	Attention: Linda Davis	 	 
	Telecopy number: 864-288-4886	 	 
	Telephone number: 864-286-4271	 	 

  

 107 

					
	SCANSOURCE UK LIMITED
			
	 By:
  
	 	 /s/ Linda B. Davis

	 	(SEAL)
	 Title:
	 	 Alternate Director
	 	 
		
	 6 Logue Court
	 	 
	 Greenville, South Carolina 29615

	 Attention: Linda Davis

	 Telecopy number: 864-288-4886

	 Telephone number: 864-286-4271

  
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this page intentionally left blank.] 
  

 108 

							
	COMMITMENTS	 	 BRANCH BANKING AND TRUST COMPANY OF
 SOUTH
CAROLINA, as Administrative Agent, U.S. Dollar
 Issuing Bank and as a Bank

	 Facility
     Commitment:
$50,000,000
	 	 
			
	 Revolving Advance
     Commitment: $77,500,000
	 	 By:     /s/ D. Randolph Bryan Wilson

	 	(SEAL)
	 	Title: SVP
		
	 U.S. Dollar Letter of Credit
     Commitment: $19,375,000
	 	Lending Office
	 	 	Branch Banking and Trust Company of South Carolina
	 	 	P. O. Box 408
		
	 Other Currency
     Commitment:
$-0-
	 	301 North Main Street (29602)
	 	 	Greenville, South Carolina 29602-0408
	 	 	Attention: Rand Wilson
		
	 Other Currency Letter of
     Credit
Commitment: $-0-
	 	Telecopy number: (864) 282-3339
	 	 	Telephone number: (864) 282-3317
		
	 	 	with a copy to
		
	 	 	Christopher E. Leon, Esq.
	 	 	Womble Carlyle Sandridge & Rice, PLLC
	 	 	P.O. Drawer 84
	 	 	200 West Second Street (27101)
	 	 	Winston-Salem, North Carolina 27102
	 	 	Telecopy: (336) 726-6932
	 	 	Telephone: (336) 721-3518

  
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intentionally left blank.] 
  

 109 

					
	 	 	 WACHOVIA BANK, NATIONAL ASSOCIATION, as the
 Other Currency Lender, Other Currency Issuing Bank and a
 Bank

	 Facility
     Commitment:
$27,500,000
	 	 
	 Revolving Advance
     Commitment: $-0-
	 	 By:      /s/ T. Snider

	 	(SEAL)
	 	Title:   Vice President
		
	U.S. Dollar Letter of Credit     Commitment: $-0-	 	Lending Office
	 	 	Wachovia Bank, National Association
	 	 	15 South Main Street, 3rd Floor, Commercial
Banking
	Other Currency	 	P. O. Box 969 (29602)
	    Commitment: $27,500,000	 	Greenville, South Carolina 29601
	 	 	Attention: Lee R. Gray, Senior Vice President
	Other Currency Letter of Credit     Commitment: $15,000,000	 	Telecopy number: (864) 467-2543
	 	 	Telephone number: (864) 467-2540

  
 [Remainder of this page
intentionally left blank.] 

	

  

 110 

					
	 	 	FIFTH THIRD BANK
	 Facility
     Commitment:
$7,500,000
	 	 
			
	 Revolving Advance
     Commitment: $7,500,000
	 	 By:     /s/Jennifer Schwartz

	 	(SEAL)
	 	Title: AVP
	 U.S. Dollar Letter of Credit
     Commitment: $1,875,000
	 	Lending Office
	 	 	Fifth Third Bank
	 	 	38 Fountain Square Plaza
	 Other Currency
     Commitment:
$-0-
	 	 MD10904K
 Cincinnati, Ohio
45263

	 	 	Attention: Jennifer E. Schwartz
	 	 	Telecopy number: (513) 534-6479
	 Other Currency Letter of Credit
     Commitment: $-0-
	 	Telephone number: (513) 534-7167
	 	 	 

  
 [Remainder of this page
intentionally left blank.] 
  

 111 

					
	 	 	FIRST TENNESSEE BANK NATIONAL ASSOCIATION
	 Facility
     Commitment:
$7,500,000
	 	 
			
	 Revolving Advance
     Commitment: $7,500,000
	 	 By:     /s/ Phillip E. Stevenson

	 	(SEAL)
	 	Title: Sr. Vice President
		
	 U.S. Dollar Letter of Credit
     Commitment: $1,875,000
	 	Lending Office
	 	 	First Tennessee Bank National Association
	 	 	Metropolitan Division
	 Other Currency
     Commitment:
$-0-
	 	 165 Madison Avenue, 10th Floor
 P. O. Box 84 (38101)

	 	 	Memphis, Tennessee 38103
	 	 	Attention: Phillip E. Stevenson
	Other Currency Letter of Credit     Commitment: $-0-	 	 Telecopy number: (901) 523-4235
 Telephone
number: (901) 523-4245

  
 [Remainder of this page
intentionally left blank.] 
  

 112 

					
	 	 	HIBERNIA NATIONAL BANK
	 Facility
     Commitment:
$7,500,000
	 	 	 	 
			
	 Revolving Advance
     Commitment:
$7,500,000
	 	 By:     /s/ Kay St. John

	 	(SEAL)
	 	 	Title: Senior Vice President & Manager	 	 
	 U.S. Dollar Letter of Credit
     Commitment: $1,875,000
	 	Lending Office	 	 
	 	 	Hibernia National Bank	 	 
	 	 	U.S. Corporate Division	 	 
	 Other Currency
     Commitment:
$-0-
	 	 313 Carondelet Street, 12th Floor
 New Orleans, Louisiana
70130
	 	 
	 	 	Attention: Laura K. Watts	 	 
	 	 	Telecopy number: (504) 533-5344	 	 
	 Other Currency Letter of Credit
     Commitment: $-0-
	 	Telephone number: (504) 533-7859	 	 
	 	 	 	 	 
			
	TOTAL COMMITMENTS:	 	 	 	 
	 Facility
     Commitment:
$100,000,000
	 	 	 	 
			
	 Revolving Advance
     Commitment:
$100,000,000
	 	 	 	 
			
	 U.S. Dollar Letter of Credit
     Commitment: $25,000,000
	 	 	 	 
			
	 Other Currency
     Commitment:
$27,500,000
	 	 	 	 
			
	 Other Currency Letter of Credit
     Commitment: $15,000,000
	 	 	 	 

  

 113Form of Securities Purchase Agreement

 Exhibit 4.1 
  
 SECURITIES PURCHASE AGREEMENT 
  

This Securities Purchase Agreement (this “Agreement”) is dated as of September 8, 2004 among Hartville Group, Inc., a Nevada
corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors and assigns, a “Purchaser” and collectively the “Purchasers”). 
  
 WHEREAS, subject to the terms and conditions set forth in this Agreement and
pursuant to Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”) and Rule 506 promulgated thereunder, the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and not jointly,
desires to purchase from the Company, securities of the Company as more fully described in this Agreement. 
  
 NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser agrees as follows: 
  
 ARTICLE I. 
 DEFINITIONS 
  
 1.1 Definitions. In addition to the terms defined elsewhere in this Agreement: (a) capitalized terms that are not
otherwise defined herein have the meanings given to such terms in the Debentures (as defined herein), and (b) the following terms have the meanings indicated in this Section 1.1: 
  
 “Action” shall have the meaning ascribed to such term in Section 3.1(j). 
  
 “Affiliate” means any Person that, directly
or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 144 under the Securities Act. With respect to a Purchaser, any investment
fund or managed account that is managed on a discretionary basis by the same investment manager as such Purchaser will be deemed to be an Affiliate of such Purchaser. 
  
 “Closing” means the closing of the purchase and sale of the Securities pursuant to
Section 2.1. 
  
 “Closing
Date” means the Trading Day when all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and
(ii) the Company’s obligations to deliver the Securities have been satisfied or waived. 
  
 “Closing Price” means on any particular date (a) the last reported closing bid price per share of Common Stock on such
date on the Trading Market (as reported by 

 Bloomberg L.P. at 4:15 PM (New York time), or (b) if there is no such price on such date, then the
closing bid price on the Trading Market on the date nearest preceding such date (as reported by Bloomberg L.P. at 4:15 PM (New York time) for the closing bid price for regular session trading on such day), or (c) if the Common Stock is not then
listed or quoted on the Trading Market and if prices for the Common Stock are then reported in the “pink sheets” published by the National Quotation Bureau Incorporated (or a similar organization or agency succeeding to its functions of
reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) if the shares of Common Stock are not then publicly traded the fair market value of a share of Common Stock as determined by a qualified independent
appraiser selected in good faith by the Purchasers of a majority in interest of the principal amount of Debentures then outstanding. 
  
 “Commission” means the Securities and Exchange Commission. 
  
 “Common Stock” means the common stock of the Company, par value $0.001 per share, and any
securities into which such common stock shall hereinafter have been reclassified into. 
  
 “Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof
to acquire at any time Common Stock, including without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exchangeable for, or otherwise entitles the holder thereof to
receive, Common Stock. 
  
 “Company
Counsel” means Joseph I. Emas, Esq. 
  
 “Conversion Price” shall have the meaning ascribed to such term in the Debentures. 
  
 “Debentures” means, the 12% Convertible Debentures due, subject to the terms therein, 70 days from their date of
issuance, issued by the Company to the Purchasers hereunder, in the form of Exhibit A. 
  
 “Disclosure Schedules” shall have the meaning ascribed to such term in Section 3.1 hereof. 
  
 “Effective Date” means the date that the
initial Registration Statement filed by the Company pursuant to the Registration Rights Agreement is first declared effective by the Commission. 
  
 “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
  
 “Exempt Issuance” means the issuance of (a)
shares of Common Stock or options to employees, officers or directors of the Company pursuant to any stock or option plan duly adopted by a majority of the non-employee members of the Board of Directors of the Company or a majority of the members of
a committee of non-employee directors 
  

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 established for such purpose, (b) securities upon the exercise of or conversion of any securities issued
hereunder, convertible securities, options or warrants issued and outstanding on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number of such securities, and (c)
securities issued pursuant to acquisitions or strategic transactions, provided any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company
and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is
investing in securities. 
  
 “FW” means Feldman Weinstein LLP with offices at 420 Lexington Avenue, Suite 2620, New York, New York 10170-0002. 
  
 “GAAP” shall have the meaning ascribed to such term in Section 3.1(h) hereof. 
  
 “Liens” means a lien, charge, security
interest, encumbrance, right of first refusal, preemptive right or other restriction. 
  
 “Material Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b) hereof. 
  
 “Material Permits” shall have the meaning
ascribed to such term in Section 3.1(m). 
  
 “Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or
other entity of any kind. 
  
 “Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened. 
  
 “Registration Rights Agreement” means the
Registration Rights Agreement, dated the date hereof, among the Company and the Purchasers, in the form of Exhibit B attached hereto. 
  
 “Registration Statement” means a registration statement meeting the requirements set forth in the Registration Rights
Agreement and covering the resale of the Underlying Shares by each Purchaser as provided for in the Registration Rights Agreement. 
  
 “Required Approvals” shall have the meaning ascribed to such term in Section 3.1(e). 
  
 “Required Minimum” means, as of any date,
the maximum aggregate number of shares of Common Stock then issued or potentially issuable in the future pursuant to the Transaction Documents, including any Underlying Shares issuable upon exercise or 
  

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 conversion in full of all Warrants and Debentures (including Underlying Shares issuable as payment of
interest), ignoring any conversion or exercise limits set forth therein, and assuming that the Conversion Price is at all times on and after the date of determination 75% of the then Conversion Price on the Trading Day immediately prior to the date
of determination. 
  
 “Rule 144”
means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

  
 “SEC Reports” shall have the
meaning ascribed to such term in Section 3.1(h) hereof. 
  
 “Securities” means the Debentures, the Warrants, the Warrant Shares and the Underlying Shares. 
  
 “Securities Act” means the Securities Act of 1933, as amended. 
  
 “Subscription Amount” means, as to each
Purchaser, the aggregate amount to be paid for Debentures and Warrants purchased hereunder as specified below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount”, in United
States Dollars and in immediately available funds. 
  
 “Subsequent Financing” shall have the meaning ascribed to such term in Section 4.13. 
  
 “Subsidiary” means any subsidiary of the Company as set forth on Schedule 3.1(a). 
  
 “Trading Day” means a day on which the
Common Stock is traded on a Trading Market. 
  
 “Trading Market” means the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the Nasdaq SmallCap Market, the American Stock Exchange, the New York Stock
Exchange, the Nasdaq National Market or the OTC Bulletin Board. 
  
 “Transaction Documents” means this Agreement, the Debentures, the Warrants, the Registration Rights Agreement and any other documents or agreements executed in connection with the transactions
contemplated hereunder. 
  
 “Underlying
Shares” means the shares of Common Stock issuable upon exercise of the Warrants and upon conversion of the Debentures subject to the terms of the Debenture. 
  
 “VWAP” means, for any date, the price determined by the first of the following 

 

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 clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily
volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the primary Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg Financial L.P. (based on a Trading Day from
9:30 a.m. EST to 4:02 p.m. Eastern Time) using the VAP function; (b) if the Common Stock is not then listed or quoted on the Trading Market and if prices for the Common Stock are then reported in the “Pink Sheets” published by the National
Quotation Bureau Incorporated (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported; or (c) in all other cases, the fair market value of a share of
Common Stock as determined by a nationally recognized-independent appraiser selected in good faith by Purchasers holding a majority of the principal amount of Debentures then outstanding. 
  
 “Warrants” means collectively the Common
Stock purchase warrants, in the form of Exhibit C delivered to the Purchasers at the Closing in accordance with Section 2.2(a) hereof, which Warrants shall be exercisable immediately and have a term of exercise equal to 5 years. 

 
 “Warrant Shares” means the shares of
Common Stock issuable upon exercise of the Warrants. 
  
 ARTICLE
II. 
 PURCHASE AND SALE 
  
 2.1 Closing. On the Closing Date, upon the terms and subject to the conditions set forth herein, concurrent with the execution and delivery of this
Agreement by the parties hereto, the Company agrees to sell, and each Purchaser agrees to purchase in the aggregate, severally and not jointly, up to $3,000,000 principal amount of the Debentures. Each Purchaser shall deliver to the Company via wire
transfer or a certified check immediately available funds equal to their Subscription Amount and the Company shall deliver to each Purchaser their respective Debenture and Warrants as determined pursuant to Section 2.2(a) and the other items set
forth in Section 2.2 issuable at the Closing. Upon satisfaction of the conditions set forth in Section 2.2, the Closing shall occur at the offices of FW, or such other location as the parties shall mutually agree. 
  
 2.2 Deliveries. 
  

	 	a)	On the Closing Date, the Company shall deliver or cause to be delivered to each Purchaser the following: 

  

	 	(i)	this Agreement duly executed by the Company; 

  

	 	(ii)	a Debenture with a principal amount equal to such Purchaser’s Subscription Amount, registered in the name of such Purchaser; 

  

	 	(iii)	a Warrant registered in the name of such Purchaser to purchase up 

  

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 to 500,000 shares of Common Stock, divided on a pro rata basis for all Purchasers based on such of such
Purchaser’s Subscription Amount, with an exercise price equal to $            1,
subject to adjustment therein; 
  

	 	(iv)	the Registration Rights Agreement duly executed by the Company; and 

  

	 	(v)	a legal opinion of Company Counsel, in the form of Exhibit D attached hereto. 

  

	 	b)	On the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company the following: 

  

	 	(i)	this Agreement duly executed by such Purchaser; 

  

	 	(ii)	such Purchaser’s Subscription Amount by wire transfer to the account as specified in writing by the Company; and 

  

	 	(iii)	the Registration Rights Agreement duly executed by such Purchaser. 

  
 2.3 Closing Conditions. 
  

	 	a)	The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met: 

  

	 	(i)	the accuracy in all material respects when made and on the Closing Date of the representations and warranties of the Purchasers contained herein; 

  

	 	(ii)	all obligations, covenants and agreements of the Purchasers required to be performed at or prior to the Closing Date shall have been performed; and 

  

	 	(iii)	the delivery by the Purchasers of the items set forth in Section 2.2(b) of this Agreement. 

  

	 	b)	The respective obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions being met: 

  

	 	(i)	the accuracy in all material respects on the Closing Date of the representations and warranties of the Company contained herein; 

	1	The lesser of (a) the average of the 5 day VWAP bid immediately prior to the date hereof, (b) the Closing Price on
            , 2004 and (c) $4.50. 

  

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	 	(ii)	all obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed; 

  

	 	(iii)	the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement; 

  

	 	(iv)	there shall have been no Material Adverse Effect with respect to the Company since the date hereof; and 

  

	 	(v)	From the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission (except for any suspension of trading of limited duration
agreed to by the Company, which suspension shall be terminated prior to the Closing), and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg Financial Markets shall not have been suspended or limited, or
minimum prices shall not have been established on securities whose trades are reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities nor shall
there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable
judgment of each Purchaser, makes it impracticable or inadvisable to purchase the Debentures at the Closing. 

  
 ARTICLE III. 
 REPRESENTATIONS AND
WARRANTIES 
  
 3.1 Representations and Warranties of the
Company. Except as set forth under the corresponding section of the disclosure schedules delivered to the Purchasers concurrently herewith (the “Disclosure Schedules”) which Disclosure Schedules shall be deemed a part hereof,
the Company hereby makes the representations and warranties set forth below to each Purchaser. 
  
 (a) Subsidiaries. All of the direct and indirect subsidiaries of the Company are set forth on Schedule 3.1(a). The Company
owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid,
non-assessable and free of preemptive and similar rights to subscribe for or purchase securities. If the Company has no subsidiaries, then references in the Transaction Documents to the Subsidiaries will be disregarded. 
  

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 (b) Organization and Qualification. Each of the Company and the Subsidiaries is an
entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization (as applicable), with the requisite power and authority to own and use its properties and
assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in violation or default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or
charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned
by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in (i) a material adverse effect on the legality, validity or
enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or financial condition of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on
the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no Proceeding has been instituted in any
such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification. 
  
 (c) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the
transactions contemplated by each of the Transaction Documents and otherwise to carry out its obligations thereunder. The execution and delivery of each of the Transaction Documents by the Company and the consummation by it of the transactions
contemplated thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company in connection therewith. Each Transaction Document has been (or upon delivery will have been) duly
executed by the Company and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or
other equitable remedies. 
  
 (d) No
Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company of the other transactions contemplated thereby do not and will not: (i) conflict with or violate any provision of
the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) subject to the Required Approvals, conflict with, or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company 
  

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 or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound
or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a
Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected, or (iv) subject to the Required Approvals, conflict with or violate the terms
of any agreement by which the Company or any Subsidiary is bound or to which any property or asset of the Company or any Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be
expected to result in a Material Adverse Effect. 
  
 (e) Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than (i) filings required pursuant to Section 4.6, (ii) the filing with the Commission of the
Registration Statement, (iii) the notice and/or application(s) to each applicable Trading Market for the issuance and sale of the Debentures and Warrants and the listing of the Underlying Shares for trading thereon in the time and manner required
thereby and (iv) the filing of Form D with the Commission and such filings as are required to be made under applicable state securities laws (collectively, the “Required Approvals”). 
  
 (f) Issuance of the Securities. The Securities are
duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions on
transfer provided for in the Transaction Documents. The Underlying Shares, when issued in accordance with the terms of the Transaction Documents, will be validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the
Company. The Company has reserved from its duly authorized capital stock a number of shares of Common Stock for issuance of the Underlying Shares at least equal to the Required Minimum on the date hereof. The Company has not, and to the knowledge of
the Company, no Affiliate of the Company has sold, offered for sale or solicited offers to buy or otherwise negotiated in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the
Securities in a manner that would require the registration under the Securities Act of the sale of the Securities to the Purchasers, or that would be integrated with the offer or sale of the Securities for purposes of the rules and regulations of
any Trading Market. 
  
 (g)
Capitalization. The capitalization of the Company is as described in the Company’s most recent periodic report filed with the Commission. The Company has not issued any capital stock since such filing other than pursuant to the exercise
of employee stock options under the Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s employee stock purchase 
  

 9 

 plan and pursuant to the conversion or exercise of outstanding Common Stock Equivalents. No Person has
any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except as a result of the purchase and sale of the Securities, there are no
outstanding options, warrants, script rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exchangeable for, or giving any Person any right to subscribe for or
acquire, any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock, or securities or rights convertible or
exchangeable into shares of Common Stock. The issuance and sale of the Securities will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Purchasers) and will not result in a right of any
holder of Company securities to adjust the exercise, conversion, exchange or reset price under such securities. All of the outstanding shares of capital stock of the Company are validly issued, fully paid and nonassessable, have been issued in
compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval or authorization of any
stockholder, the Board of Directors of the Company or others is required for the issuance and sale of the Securities. Except as disclosed in the SEC Reports, there are no stockholders agreements, voting agreements or other similar agreements with
respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders. 
  
 (h) SEC Reports; Financial Statements. The Company has filed all reports required to be filed by it
under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law to file such material) (the foregoing
materials, including the exhibits thereto, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the
expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act and the rules and regulations of the Commission promulgated
thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission
with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved
(“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material
respects the financial position of the Company and its consolidated subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments. 
  

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 (i) Material Changes. Since the date of the latest audited financial statements
included within the SEC Reports, except as specifically disclosed in the SEC Reports, (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company
has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the
Company’s financial statements pursuant to GAAP or required to be disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution
of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except
pursuant to existing Company stock option plans. The Company does not have pending before the Commission any request for confidential treatment of information. 
  

(j) Litigation. There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge
of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or
foreign) (collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) could, if there were an unfavorable decision, have
or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or
state securities laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director
or officer of the Company. The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act. 
  
 (k) Labor Relations. No material labor dispute exists
or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company which could reasonably be expected to result in a Material Adverse Effect. 
  
 (l) Compliance. Neither the Company nor any Subsidiary (i) is in default under or in violation of
(and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default
under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its 
  

 11 

 properties is bound (whether or not such default or violation has been waived), (ii) is in violation of
any order of any court, arbitrator or governmental body, or (iii) is or has been in violation of any statute, rule or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws applicable to its
business except in each case as could not have a Material Adverse Effect. 
  
 (m) Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to
conduct their respective businesses as described in the SEC Reports, except where the failure to possess such permits could not have or reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and neither
the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit. 
  
 (n) Title to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by
them that is material to the business of the Company and the Subsidiaries and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each case free and clear of all
Liens, except for Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and Liens for the payment of federal, state
or other taxes, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases of which the
Company and the Subsidiaries are in compliance. 
  
 (o) Patents and Trademarks. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, copyrights, licenses and other similar rights
necessary or material for use in connection with their respective businesses as described in the SEC Reports and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”).
Neither the Company nor any Subsidiary has received a written notice that the Intellectual Property Rights used by the Company or any Subsidiary violates or infringes upon the rights of any Person. To the knowledge of the Company, all such
Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights of others. 
  
 (p) Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged. To the best of Company’s knowledge, such insurance contracts and policies are accurate and complete. Neither the
Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business
without a significant increase in cost. 
  

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 (q) Transactions With Affiliates and Employees. Except as set forth in the SEC
Reports, none of the officers or directors of the Company and, to the knowledge of the Company, none of the employees of the Company is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner, in each case in excess of $60,000 other than
(i) for payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) for other employee benefits, including stock option agreements under any stock option plan of the
Company. 
  
 (r) Sarbanes-Oxley; Internal
Accounting Controls. The Company is in material compliance with all provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it as of the Closing Date. The Company and the Subsidiaries maintain a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements
in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company has established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and
designed such disclosure controls and procedures to ensure that material information relating to the Company, including its subsidiaries, is made known to the certifying officers by others within those entities, particularly during the period in
which the Company’s most recently filed periodic report under the Exchange Act, as the case may be, is being prepared. The Company’s certifying officers have evaluated the effectiveness of the Company’s controls and procedures as of
the date prior to the filing date of the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under the Exchange Act the
conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no significant changes in the Company’s
internal controls (as such term is defined in Item 307(b) of Regulation S-K under the Exchange Act) or, to the Company’s knowledge, in other factors that could significantly affect the Company’s internal controls. 
  
 (s) Certain Fees. No brokerage or finder’s fees
or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by this Agreement. The Purchasers
shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by this Agreement.

  

 13 

 (t) Private Placement. Assuming the accuracy of the Purchasers representations and
warranties set forth in Section 3.2, no registration under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchasers as contemplated hereby. The issuance and sale of the Securities hereunder does not
contravene the rules and regulations of the Trading Market. 
  
 (u) Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will not be or be an Affiliate of, an “investment company” within
the meaning of the Investment Company Act of 1940, as amended. The Company shall conduct its business in a manner so that it will not become subject to the Investment Company Act. 
  
 (v) Registration Rights. No Person has any right to cause the Company to effect the registration
under the Securities Act of any securities of the Company. 
  
 (w) Listing and Maintenance Requirements. The Company’s Common Stock is registered pursuant to Section 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge
is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration. The Company has not, in the 12
months preceding the date hereof, received notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading
Market. The Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements. 
  
 (x) Application of Takeover Protections. The Company and its Board of Directors have taken all
necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s
Certificate of Incorporation (or similar charter documents) or the laws of its state of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and the Company fulfilling their obligations or exercising their
rights under the Transaction Documents, including without limitation as a result of the Company’s issuance of the Securities and the Purchasers’ ownership of the Securities. 
  
 (y) Disclosure. The Company confirms that neither it nor any other Person acting on its behalf has
provided any of the Purchasers or their agents or counsel with any information that constitutes or might constitute material, nonpublic information. The Company understands and confirms that the Purchasers will rely on the foregoing representations
and covenants in effecting transactions in securities of the Company. All disclosure provided to the Purchasers regarding the Company, its business and the 
  

 14 

 transactions contemplated hereby, including the Disclosure Schedules to this Agreement, furnished by or
on behalf of the Company with respect to the representations and warranties made herein are true and correct with respect to such representations and warranties and do not contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The Company acknowledges and agrees that no Purchaser makes or has made any representations or warranties with
respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2 hereof. 
  
 (z) No Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2,
neither the Company, nor any of its affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this
offering of the Securities to be integrated with prior offerings by the Company for purposes of the Securities Act or any applicable shareholder approval provisions, including, without limitation, under the rules and regulations of any exchange or
automated quotation system on which any of the securities of the Company are listed or designated. 
  
 (aa) Solvency. Based on the financial condition of the Company as of the Closing Date after giving effect to the receipt by the
Company of the proceeds from the sale of the Securities hereunder, (i) the Company’s fair saleable value of its assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other
liabilities (including known contingent liabilities) as they mature; (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business for the current fiscal year as now conducted and as proposed to be conducted
including its capital needs taking into account the particular capital requirements of the business conducted by the Company, and projected capital requirements and capital availability thereof; and (iii) the current cash flow of the Company,
together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its debt when such amounts are
required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). 
  
 (bb) Form S-3 Eligibility. The Company is eligible to
register the resale of the Underlying Shares for resale by the Purchaser on Form S-3 promulgated under the Securities Act. 
  
 (cc) Tax Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect, the Company and each Subsidiary has filed all necessary federal, state and foreign income and franchise tax returns and has paid or accrued all taxes shown as due thereon, and the Company has no knowledge of a tax deficiency
which has been asserted or threatened against the Company or any Subsidiary. 
  

 15 

 (dd) No General Solicitation. Neither the Company nor any person acting on behalf
of the Company has offered or sold any of the Securities by any form of general solicitation or general advertising. The Company has offered the Securities for sale only to the Purchasers and certain other “accredited investors” within the
meaning of Rule 501 under the Securities Act. 
  
 (ee) Foreign Corrupt Practices. Neither the Company, nor to the knowledge of the Company, any agent or other person acting on behalf of the Company, has (i) directly or indirectly, used any corrupt funds for unlawful contributions,
gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns
from corporate funds, (iii) failed to disclose fully any contribution made by the Company (or made by any person acting on its behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision
of the Foreign Corrupt Practices Act of 1977, as amended 
  
 (ff) Accountants. The Company’s accountants are set forth on Schedule 3.1(ff) of the Disclosure Schedule. To the Company’s knowledge, such accountants, who the Company expects will express
their opinion with respect to the financial statements to be included in the Company’s Annual Report on Form 10-KSB for the year ending December 31, 2004 are a registered public accounting firm as required by the Securities Act. 
  
 (gg) Seniority. As of the Closing Date, no
indebtedness of the Company is senior to the Debentures in right of payment, whether with respect to interest or upon liquidation or dissolution, or otherwise, other than indebtedness secured by purchase money security interests (which is senior
only as to underlying assets covered thereby) and capital lease obligations (which is senior only as to the property covered thereby). 
  
 (hh) No Disagreements with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably
anticipated by the Company to arise, between the accountants and lawyers formerly or presently employed by the Company and the Company is current with respect to any fees owed to its accountants and lawyers. 
  
 (ii) Acknowledgment Regarding Purchasers’ Purchase
of Securities. The Company acknowledges and agrees that each of the Purchasers is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby. The Company
further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated hereby and any advice given by any Purchaser or any of
their respective representatives or agents in connection with this Agreement and the transactions contemplated hereby is merely incidental to the Purchasers’ purchase of the Securities. The Company further represents to each Purchaser that the
Company’s decision to enter into this Agreement has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives. 
  

 16 

 3.2 Representations and Warranties of the Purchasers. Each Purchaser hereby, for itself and for no
other Purchaser, represents and warrants as of the date hereof and as of the Closing Date to the Company as follows: 
  
 (a) Organization; Authority. Such Purchaser is an entity duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization with full right, corporate or partnership power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations thereunder. The
execution, delivery and performance by such Purchaser of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate or similar action on the part of such Purchaser. Each Transaction Document to which it is a
party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its
terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law. 
  
 (b) Purchaser Representation. Such Purchaser
understands that the Securities are “restricted securities” and have not been registered under the Securities Act or any applicable state securities law and is acquiring the Securities as principal for its own account and not with a view
to or for distributing or reselling such Securities or any part thereof, has no present intention of distributing any of such Securities and has no arrangement or understanding with any other persons regarding the distribution of such Securities
(this representation and warranty not limiting such Purchaser’s right to sell the Securities pursuant to the Registration Statement or otherwise in compliance with applicable federal and state securities laws). Such Purchaser is acquiring the
Securities hereunder in the ordinary course of its business. Such Purchaser does not have any agreement or understanding, directly or indirectly, with any Person to distribute any of the Securities. 
  
 (c) Purchaser Status. At the time such Purchaser was
offered the Securities, it was, and at the date hereof it is, and on each date on which it exercises any Warrants or converts any Debentures, it will be either: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3),
(a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act. Such Purchaser is not required to be registered as a broker-dealer under Section 15 of the Exchange
Act. 
  
 (d) Experience of Such Purchaser.
Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business 
  

 17 

 and financial matters so as to be capable of evaluating the merits and risks of the prospective
investment in the Securities, and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such
investment. 
  
 (e) General Solicitation.
Such Purchaser is not purchasing the Securities as a result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or
presented at any seminar or any other general solicitation or general advertisement. 
  
 (f) Short Sales. Each Purchaser represents that prior to execution of this Agreement, neither it nor any Person over which the
Purchaser has direct control, have made any net short sales of, or granted any option for the purchase of or entered into any hedging or similar transaction with the same economic effect as a net short sale, of the Common Stock. 
  
 The Company acknowledges and agrees that each Purchaser does
not make or has not made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in this Section 3.2. 
  
 ARTICLE IV. 
 OTHER AGREEMENTS OF THE PARTIES 
  
 4.1
Transfer Restrictions. 
  
 (a) The
Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Securities other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of a
Purchaser or in connection with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form
and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under the Securities Act. As a condition of transfer, any such transferee
shall agree in writing to be bound by the terms of this Agreement and shall have the rights of a Purchaser under this Agreement and the Registration Rights Agreement. 
  
 (b) The Purchasers agree to the imprinting, so long as is required by this Section 4.1(b), of a legend on
any of the Securities in the following form: 
  
 [NEITHER] THESE SECURITIES [NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE [EXERCISABLE] [CONVERTIBLE]] HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, 
  

 18 

 AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR REASONABLY ACCEPTABLE TO THE COMPANY TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE
OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES. 
  
 The Company acknowledges and agrees that a Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a
registered broker-dealer or grant a security interest in some or all of the Securities to a financial institution that is an “accredited investor” as defined in Rule 501(a) under the Securities Act and who agrees to be bound by the
provisions of this Agreement and the Registration Rights Agreement and, if required under the terms of such arrangement, such Purchaser may transfer pledged or secured Securities to the pledgees or secured parties. Such a pledge or transfer would
not be subject to approval of the Company and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no notice shall be required of such pledge. At the appropriate
Purchaser’s expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of Securities may reasonably request in connection with a pledge or transfer of the Securities, including, if the Securities
are subject to registration pursuant to the Registration Rights Agreement, the preparation and filing of any required prospectus supplement under Rule 424(b)(3) under the Securities Act or other applicable provision of the Securities Act to
appropriately amend the list of Selling Stockholders thereunder. 
  
 (c) Certificates evidencing Underlying Shares shall not contain any legend (including the legend set forth in Section 4.1(b)): (i) while a registration statement (including the Registration Statement) covering the
resale of such security is effective under the Securities Act, or (ii) following any sale of such Underlying Shares pursuant to Rule 144, or (iii) while such Underlying Shares are eligible for sale under Rule 144(k), or (iv) if such legend is not
required under the applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the Staff of the Commission); provided, however, in connection with the issuance of the Underlying
Shares, each Purchaser, severally and not jointly with the other Purchasers, hereby agrees to adhere to and abide by all prospectus delivery requirements under the Securities Act and rules and regulations of the Commission. The Company shall cause
its counsel to issue a legal opinion to the Company’s transfer agent promptly after the Effective Date if required by the Company’s transfer agent to effect the removal of the legend hereunder. If all or any portion of a Debenture or
Warrant is converted or exercised (as applicable) at a time when there is an effective registration statement to cover the resale of the 
  

 19 

 Underlying Shares, or if such Underlying Shares may be sold under Rule 144(k) or if such legend is not
otherwise required under applicable requirements of the Securities Act (including judicial interpretations thereof) then such Underlying Shares shall be issued free of all legends. The Company agrees that following the Effective Date or at such time
as such legend is no longer required under this Section 4.1(c), it will, no later than three Trading Days following the delivery by a Purchaser to the Company or the Company’s transfer agent of a certificate representing Underlying Shares, as
applicable, issued with a restrictive legend (such third Trading Day, the “Legend Removal Date”), deliver or cause to be delivered to such Purchaser a certificate representing such shares that is free from all restrictive and other
legends. The Company may not make any notation on its records or give instructions to any transfer agent of the Company that enlarge the restrictions on transfer set forth in this Section. 
  
 (d) In addition to such Purchaser’s other available
remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated damages and not as a penalty, for each $500 of Underlying Shares (based on the VWAP of the Common Stock on the date such Securities are submitted to the Company’s
transfer agent) delivered for removal of the restrictive legend and subject to this Section 4.1(c), $5 per Trading Day (increasing to $10 per Trading Day 5 Trading Days after such damages have begun to accrue) for each Trading Day after the Legend
Removal Date until such certificate is delivered without a legend. Nothing herein shall limit such Purchaser’s right to pursue actual damages for the Company’s failure to deliver certificates representing any Securities as required by the
Transaction Documents, and such Purchaser shall have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief. 
  
 (e) Each Purchaser, severally and not jointly with the other
Purchasers, agrees that the removal of the restrictive legend from certificates representing Securities as set forth in this Section 4.1 is predicated upon the Company’s reliance that the Purchaser will sell any Securities pursuant to either
the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or an exemption therefrom. 
  
 (f) Until the date that each Purchaser holds less than 20% of the Debentures initially purchased hereunder by such Purchaser, the Company
shall not undertake a reverse or forward stock split or reclassification of the Common Stock without the prior written consent of the Purchasers holding a majority in principal amount outstanding of the Debentures. 
  
 4.2 Acknowledgment of Dilution. The Company acknowledges that the
issuance of the Securities may result in dilution of the outstanding shares of Common Stock, which dilution may be substantial under certain market conditions. The Company further acknowledges that its obligations under the Transaction Documents,
including without limitation its obligation to issue the Underlying Shares pursuant to the Transaction Documents, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction, regardless of the effect of
any such dilution or any claim the Company may have against any Purchaser and regardless of the dilutive effect that such issuance may have on the ownership of the other stockholders of the Company. 
  

 20 

 4.3 Furnishing of Information. As long as any Purchaser owns Securities, the Company covenants to
timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act. As long as any Purchaser owns Securities, if the
Company is not required to file reports pursuant to the Exchange Act, it will prepare and furnish to the Purchasers and make publicly available in accordance with Rule 144(c) such information as is required for the Purchasers to sell the Securities
under Rule 144. The Company further covenants that it will take such further action as any holder of Securities may reasonably request, all to the extent required from time to time to enable such Person to sell such Securities without registration
under the Securities Act within the limitation of the exemptions provided by Rule 144. 
  
 4.4 Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated
with the offer or sale of the Securities in a manner that would require the registration under the Securities Act of the sale of the Securities to the Purchasers or that would be integrated with the offer or sale of the Securities for purposes of
the rules and regulations of any Trading Market. 
  
 4.5
Exercise and Conversion Procedures. The form of Notice of Exercise included in the Warrants and the form of Notice of Conversion included in the Debentures set forth the totality of the procedures required of the Purchasers in order to
exercise the Warrants or convert the Debentures. No additional legal opinion or other information or instructions shall be required of the Purchasers to exercise their Warrants or convert their Debentures. The Company shall honor exercises of the
Warrants and conversion of the Debentures and shall deliver Underlying Shares in accordance with the terms, conditions and time periods set forth in the Transaction Documents. 
  
 4.6 Securities Laws Disclosure; Publicity. The Company shall, by 8:30 a.m. Eastern time on the Trading Day following
the date hereof, issue a press release or file a Current Report on Form 8-K, in each case reasonably acceptable to each Purchaser disclosing the material terms of the transactions contemplated hereby. The Company and each Purchaser shall consult
with each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any such press release or otherwise make any such public statement without the prior
consent of the Company, with respect to any press release of any Purchaser, or without the prior consent of each Purchaser, with respect to any press release of the Company, which consent shall not unreasonably be withheld, except if such disclosure
is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication. Notwithstanding the foregoing, the Company shall not publicly disclose the name of any
Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except (i) as required by federal securities law in connection with
the registration statement 
  

 21 

 contemplated by the Registration Rights Agreement and (ii) to the extent such disclosure is required by law or Trading
Market regulations, in which case the Company shall provide the Purchasers with prior notice of such disclosure permitted under subclause (i) or (ii). 
  
 4.7 Shareholder Rights Plan. No claim will be made or enforced by the Company or, to the knowledge of the Company, any other Person that any
Purchaser is an “Acquiring Person” under any shareholder rights plan or similar plan or arrangement in effect or hereafter adopted by the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or
arrangement, by virtue of receiving Securities under the Transaction Documents or under any other agreement between the Company and the Purchasers. The Company shall conduct its business in a manner so that it will not become subject to the
Investment Company Act. 
  
 4.8 Non-Public Information. The
Company covenants and agrees that neither it nor any other Person acting on its behalf will provide any Purchaser or its agents or counsel with any information that the Company believes constitutes material non-public information, unless prior
thereto such Purchaser shall have executed a written agreement regarding the confidentiality and use of such information. The Company understands and confirms that each Purchaser shall be relying on the foregoing representations in effecting
transactions in securities of the Company. 
  
 4.9 Use of
Proceeds. Except as set forth on Schedule 4.9 attached hereto, the Company shall use the net proceeds from the sale of the Securities hereunder for working capital purposes and not for the satisfaction of any portion of the Company’s
debt (other than payment of trade payables in the ordinary course of the Company’s business and prior practices), to redeem any Company equity or equity equivalent securities or to settle any outstanding litigation. 
  
 4.10 Reimbursement. If any Purchaser becomes involved in any capacity
in any Proceeding by or against any Person who is a stockholder of the Company (except as a result of sales, pledges, margin sales and similar transactions by such Purchaser to or with any current stockholder), solely as a result of such
Purchaser’s acquisition of the Securities under this Agreement, the Company will reimburse such Purchaser for its reasonable legal and other expenses (including the cost of any investigation preparation and travel in connection therewith)
incurred in connection therewith, as such expenses are incurred. The reimbursement obligations of the Company under this paragraph shall be in addition to any liability which the Company may otherwise have, shall extend upon the same terms and
conditions to any Affiliates of the Purchasers who are actually named in such action, proceeding or investigation, and partners, directors, agents, employees and controlling persons (if any), as the case may be, of the Purchasers and any such
Affiliate, and shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of the Company, the Purchasers and any such Affiliate and any such Person. The Company also agrees that neither the
Purchasers nor any such Affiliates, partners, directors, agents, employees or controlling persons shall have any liability to the Company or any Person asserting claims on behalf of or in right of the Company solely as a result of acquiring the
Securities under this Agreement. 
  
 4.11 Indemnification of
Purchasers. Subject to the provisions of this Section 4.11, the Company will indemnify and hold the Purchasers and their directors, officers, shareholders, 
  

 22 

 partners, employees and agents (each, a “Purchaser Party”) harmless from any and all losses,
liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer
or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against a Purchaser, or
any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Purchaser, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is based upon a breach of
such Purchaser’s representation, warranties or covenants under the Transaction Documents or any agreements or understandings such Purchaser may have with any such stockholder or any violations by the Purchaser of state or federal securities
laws or any conduct by such Purchaser which constitutes fraud, gross negligence, willful misconduct or malfeasance). If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement,
such Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing. Any Purchaser Party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing,
(ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of such separate counsel, a material conflict on any material issue between the
position of the Company and the position of such Purchaser Party. The Company will not be liable to any Purchaser Party under this Agreement (i) for any settlement by a Purchaser Party effected without the Company’s prior written consent, which
shall not be unreasonably withheld or delayed; or (ii) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants or
agreements made by the Purchasers in this Agreement or in the other Transaction Documents. 
  
 4.12 Reservation and Listing of Securities. 
  
 (a) The Company shall maintain a reserve from its duly authorized shares of Common Stock for issuance pursuant to the Transaction
Documents in such amount as may be required to fulfill its obligations in full under the Transaction Documents. 
  
 (b) If, on any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than the Required
Minimum on such date, then the Board of Directors of the Company shall use commercially reasonable efforts to amend the Company’s certificate or articles of incorporation to increase the number of authorized but unissued shares of Common Stock
to at least the Required Minimum at such time, as soon as possible and in any event not later than the 75th day after such date. 
  
 (c) The Company shall, if applicable: (i) in the time and manner required by the Trading Market, prepare and file with such Trading Market
an additional shares listing application covering a number of shares of Common Stock at least equal to the Required 
  

 23 

 Minimum on the date of such application, (ii) take all steps necessary to cause such shares of Common
Stock to be approved for listing on the Trading Market as soon as possible thereafter, (iii) provide to the Purchasers evidence of such listing, and (iv) maintain the listing of such Common Stock on any date at least equal to the Required Minimum on
such date on such Trading Market or another Trading Market. 
  
 4.13 Participation in Future Financing. From the date hereof until the Debentures are no longer outstanding, upon any financing by the Company or any of its Subsidiaries of Common Stock or Common Stock Equivalents (a
“Subsequent Financing”), each Purchaser shall have the right to participate in up to 100% of the Subsequent Financing (the “Participation Maximum”). Notwithstanding anything herein to the contrary, in lieu of a cash
payment for a Purchaser’s participation in any Subsequent Financing, such Purchaser may elect to instead surrender any portion of the outstanding principal amount of Debenture and unpaid interest then outstanding and held by such Purchaser. At
least 5 Trading Days prior to the closing of the Subsequent Financing, the Company shall deliver to each Purchaser a written notice of its intention to effect a Subsequent Financing (“Pre-Notice”), which Pre-Notice shall ask such
Purchaser if it wants to review the details of such financing (such additional notice, a “Subsequent Financing Notice”). Upon the request of a Purchaser, and only upon a request by such Purchaser, for a Subsequent Financing Notice,
the Company shall promptly, but no later than 1 Trading Day after such request, deliver a Subsequent Financing Notice to such Purchaser. The Subsequent Financing Notice shall describe in reasonable detail the proposed terms of such Subsequent
Financing, the amount of proceeds intended to be raised thereunder, the Person with whom such Subsequent Financing is proposed to be effected, and attached to which shall be a term sheet or similar document relating thereto. If by 5:30 p.m. (New
York City time) on the 5th Trading Day after all of the Purchasers have received the Pre-Notice, notifications by
the Purchasers of their willingness to participate in the Subsequent Financing (or to cause their designees to participate) is, in the aggregate, less than the total amount of the Subsequent Financing, then the Company may effect the remaining
portion of such Subsequent Financing on the terms and to the Persons set forth in the Subsequent Financing Notice. If the Company receives no notice from a Purchaser as of such 5th Trading Day, such Purchaser shall be deemed to have notified the Company that it does not elect to participate. The Company must provide the Purchasers with a
second Subsequent Financing Notice, and the Purchasers will again have the right of participation set forth above in this Section 4.13, if the Subsequent Financing subject to the initial Subsequent Financing Notice is not consummated for any reason
on the terms set forth in such Subsequent Financing Notice within 60 Trading Days after the date of the initial Subsequent Financing Notice. In the event the Company receives responses to Subsequent Financing Notices from Purchasers seeking to
purchase more than the aggregate amount of the Subsequent Financing, each such Purchaser shall have the right to purchase their Pro Rata Portion (as defined below) of the Participation Maximum. “Pro Rata Portion” is the ratio of (x)
the Subscription Amount of Securities purchased by a participating Purchaser and (y) the sum of the aggregate Subscription Amount of all participating Purchasers. Notwithstanding the foregoing, this Section 4.13 shall not apply in respect of an
Exempt Issuance. 
  
 4.14 Prohibition on Variable Rate
Transactions and MFN Transactions. From the date hereof until such time as no Purchaser holds any of the Securities, the Company shall be prohibited from effecting or entering into an agreement to effect any Subsequent Financing 
  

 24 

 involving a “Variable Rate Transaction” or an “MFN Transaction” (each as defined
below). The term “Variable Rate Transaction” shall mean a transaction in which the Company issues or sells (i) any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive
additional shares of Common Stock either (A) at a conversion, exercise or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of
such debt or equity securities, or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent
events directly or indirectly related to the business of the Company or the market for the Common Stock. The term “MFN Transaction” shall mean a transaction in which the Company issues or sells any securities in a capital raising
transaction or series of related transactions which grants to an investor the right to receive additional shares based upon future transactions of the Company on terms more favorable than those granted to such investor in such offering. 

 
 4.15 Equal Treatment of Purchasers. No consideration shall be
offered or paid to any person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the same consideration is also offered to all of the parties to the Transaction Documents. Further, the Company
shall not make any payment of principal or interest on the Debentures in amounts which are disproportionate to the respective principal amounts outstanding on the Debentures at any applicable time. For clarification purposes, this provision
constitutes a separate right granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended to treat for the Company the Debenture holders as a class and shall not in any way be construed as the Purchasers
acting in concert or as a group with respect to the purchase, disposition or voting of Securities or otherwise. 
  
 ARTICLE V. 
 MISCELLANEOUS 
  
 5.1 Fees and Expenses. At the Closing, the Company has agreed to
reimburse Crestview Master Fund LLC (“Crestview”) up to $20,000 for its actual, reasonable, out-of-pocket legal fees and expenses. The Company shall deliver, prior to the Closing, a completed and executed copy of the Closing
Statement, attached hereto as Annex A. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other
expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all transfer agent fees, stamp taxes and other taxes and duties levied in connection with the
issuance of any Securities. 
  
 5.2 Entire Agreement. The
Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect
to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules. 
  

 25 

 5.3 Notices. Any and all notices or other communications or deliveries required or permitted to be
provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages
attached hereto prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages
attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (d)
upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto. 
  
 5.4 Amendments; Waivers. No provision of this Agreement may be waived or amended except in a written instrument
signed, in the case of an amendment, by the Company and each Purchaser or, in the case of a waiver, by the party against whom enforcement of any such waiver is sought. No waiver of any default with respect to any provision, condition or requirement
of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any
right hereunder in any manner impair the exercise of any such right. 
  
 5.5 Construction. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. The language used in this Agreement will be deemed to
be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party. 
  
 5.6 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted
assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Purchaser. Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such
Purchaser assigns or transfers any Securities, provided such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions hereof that apply to the “Purchasers”. 
  
 5.7 No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.11. 
  
 5.8 Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each
party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective
affiliates, directors, officers, shareholders, employees or agents) shall be commenced exclusively 
  

 26 

 in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York, borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including
with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy
thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. The parties hereby waive all rights to a trial by jury. If either party shall commence an action or
proceeding to enforce any provisions of the Transaction Documents, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such action or proceeding. 
  
 5.9 Survival. The representations and warranties contained herein shall survive the Closing and the delivery, exercise and/or conversion of the Securities, as applicable for the applicable statue of
limitations. 
  
 5.10 Execution. This Agreement may be
executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood
that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page were an original thereof. 
  
 5.11 Severability. If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall
incorporate such substitute provision in this Agreement. 
  
 5.12
Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a
Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any
relevant notice, demand or election in whole or in part without prejudice to its future actions and rights; provided, however, in the case of a rescission of a conversion of a Debenture or exercise of a Warrant, the Purchaser shall be
required to return any shares of Common Stock subject to any such rescinded conversion or exercise notice. 
  

 27 

 5.13 Replacement of Securities. If any certificate or instrument evidencing any Securities is
mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of
evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonable indemnity, if requested. The applicants for a new certificate or instrument under such circumstances shall also pay any reasonable
third-party costs associated with the issuance of such replacement Securities. 
  
 5.14 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers and the Company will be entitled to specific
performance under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations described in the foregoing sentence and hereby agrees to waive in any
action for specific performance of any such obligation the defense that a remedy at law would be adequate. 
  
 5.15 Payment Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document or a
Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable
cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or
setoff had not occurred. 
  
 5.16 Usury. To the extent it
may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever claim, and will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at any time
hereafter in force, in connection with any claim, action or proceeding that may be brought by any Purchaser in order to enforce any right or remedy under any Transaction Document. Notwithstanding any provision to the contrary contained in any
Transaction Document, it is expressly agreed and provided that the total liability of the Company under the Transaction Documents for payments in the nature of interest shall not exceed the maximum lawful rate authorized under applicable law (the
“Maximum Rate”), and, without limiting the foregoing, in no event shall any rate of interest or default interest, or both of them, when aggregated with any other sums in the nature of interest that the Company may be obligated to
pay under the Transaction Documents exceed such Maximum Rate. It is agreed that if the maximum contract rate of interest allowed by law and applicable to the Transaction Documents is increased or decreased by statute or any official governmental
action subsequent to the date hereof, the new maximum contract rate of interest allowed by law will be the Maximum Rate applicable to the 
  

 28 

 Transaction Documents from the effective date forward, unless such application is precluded by applicable law. If under
any circumstances whatsoever, interest in excess of the Maximum Rate is paid by the Company to any Purchaser with respect to indebtedness evidenced by the Transaction Documents, such excess shall be applied by such Purchaser to the unpaid principal
balance of any such indebtedness or be refunded to the Company, the manner of handling such excess to be at such Purchaser’s election. 
  
 5.17 Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document are several
and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any Transaction
Document, and no action taken by any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way
acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Document. Each Purchaser shall be entitled to independently protect and enforce its rights, including without limitation the rights
arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose. Each Purchaser has been represented by its own
separate legal counsel in their review and negotiation of the Transaction Documents. For reasons of administrative convenience only, Purchasers and their respective counsel have chosen to communicate with the Company through FW. FW does not
represent all of the Purchasers but only Crestview Capital Master, LLC. The Company has elected to provide all Purchasers with the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested
to do so by the Purchasers. 
  
 5.18 Liquidated Damages.
The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other
amounts have been paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages or other amounts are due and payable shall have been canceled. 
  
 (Signature Pages Follow) 
  

 29 

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

					
	HARTVILLE GROUP, INC.	  	Address for Notice:
			
	By:	 	  

	  	 
	Name:	  	 
	 Title:
	  	 

  
 With a copy to (which shall not
constitute notice): 
  
 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

 SIGNATURE PAGE FOR PURCHASER FOLLOWS] 
  

 30 

 [PURCHASER SIGNATURE PAGES TO HVTL SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  
 Name of Investing Entity: _________________________________________________________________ 
 Signature of Authorized
Signatory of Investing Entity:___________________________________________ 
 Name of Authorized Signatory:
_____________________________________________________________ 
 Title of Authorized Signatory: ______________________________________________________________

 Email Address of Authorized Entity: _________________________________________________________ 
  
 Address for Notice of Investing Entity: 
  
 Address for Delivery of Securities for Investing Entity (if not same as above): 
  

Subscription Amount: 
 Warrant Shares: 
 EIN Number: [PROVIDE THIS UNDER SEPARATE COVER] 
  
 [SIGNATURE PAGES CONTINUE] 
  

 31 

 Annex A 
  
 CLOSING STATEMENT 
  
 Pursuant to the attached Securities Purchase Agreement, dated as of the date hereto, the purchasers shall purchase up to $3,000,000 of Debentures and Warrants from
Hartville Group, Inc. (the “Company”). All funds will be wired into a trust account maintained by
                    , counsel to the Company. All funds will be disbursed in accordance with this Closing Statement. 
  
 Disbursement Date: September     , 2004 

 

				
	I. PURCHASE PRICE	  	 	 
		
	 Gross Proceeds to be Received in Trust
	  	$	 
		
	II. DISBURSEMENTS	  	 	 
		
	 Crestview Capital Master LLC
	  	$	20,000
	 Stonegate Securities
	  	$	210,000
	 	  	$	 
	 	  	$	 
	 	  	$	 
		
	Total Amount Disbursed:	  	$	 

  
 WIRE INSTRUCTIONS:

  
 To: Crestview Capital Master LLC 
  
 To: Stonegate Securities 
  

 32 

 EXHIBIT A 
  

NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED
BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR REASONABLY ACCEPTABLE TO THE COMPANY TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON CONVERSION OF THESE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES. 
  
 Original Issue Date: September     , 2004 
  
 $                 
  
 12% CONVERTIBLE DEBENTURE 
 DUE NOVEMBER 18, 2004 
  
 THIS DEBENTURE is one of a series of duly authorized and issued 12% Convertible Debentures of Hartville Group, Inc., a Nevada corporation, having a
principal place of business at 1597 North Main Street, North Canton, Ohio 44720 (the “Company”), designated as its 12% Convertible Debenture, due November 18, 2004 (the “Debentures”). 
  
 FOR VALUE RECEIVED, the Company promises to pay to
                     or its registered assigns (the “Holder”), the principal sum of
$                 on November 18, 2004 or such earlier date as the Debentures are required or permitted to be repaid as provided hereunder (the “Maturity
Date”), and to pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Debenture in accordance with the provisions hereof. This Debenture is subject to the following additional provisions:

  
 Section 1. Definitions. For the purposes
hereof, in addition to the terms defined elsewhere in this Debenture: (a) capitalized terms not otherwise defined herein have the meanings given to such terms in the Purchase Agreement, and (b) the following terms shall have the following meanings:

  
 “Alternate Consideration”
shall have the meaning set forth in Section 5(e)(iii). 
  

 A-1 

 “Bankruptcy Event” means any of the following events: (a) the Company or
any Significant Subsidiary (as such term is defined in Rule 1.02(s) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction relating to the Company or any Significant Subsidiary thereof; (b) there is commenced against the Company or any Significant Subsidiary thereof any such case or proceeding that is not dismissed within
60 days after commencement; (c) the Company or any Significant Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered; (d) the Company or any Significant
Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial part of its property that is not discharged or stayed within 60 days; (e) the Company or any Significant Subsidiary thereof makes a general assignment
for the benefit of creditors; (f) the Company or any Significant Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts; or (g) the Company or any Significant Subsidiary
thereof, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing. 
  
 “Business Day” means any day except
Saturday, Sunday and any day which shall be a federal legal holiday in the United States or a day on which banking institutions in the State of New York are authorized or required by law or other government action to close. 
  
 “Change of Control Transaction” means the
occurrence after the date hereof of any of (i) an acquisition after the date hereof by an individual or legal entity or “group” (as described in Rule 13d5(b)(1) promulgated under the Exchange Act) of effective control (whether through
legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of in excess of 33% of the voting securities of the Company (other than the Holders of the Debentures), or (ii) a replacement at one time or within a three year
period of more than one-half of the members of the Company’s board of directors which is not approved by a majority of those individuals who are members of the board of directors on the date hereof (or by those individuals who are serving as
members of the board of directors on any date whose nomination to the board of directors was approved by a majority of the members of the board of directors who are members on the date hereof), or (iii) the execution by the Company of an agreement
to which the Company is a party or by which it is bound, providing for any of the events set forth above in (i) or (ii). 
  
 “Commission” means the Securities and Exchange Commission. 
  
 “Common Stock” means the common stock, par value $0.001 per share, of the Company and stock
of any other class into which such shares may hereafter have been reclassified or changed. 
  

 A-2 

 “Conversion Date” shall have the meaning set forth in Section 4(a)
hereof. 
  
 “Conversion Price”
shall have the meaning set forth in Section 4(b). 
  
 “Conversion Shares” means the shares of Common Stock issuable upon conversion of Debentures. 
  
 “Dilutive Issuance” shall have the meaning set forth in Section 5(b) hereof. 
  
 “Effectiveness Period” shall have the
meaning given to such term in the Registration Rights Agreement. 
  
 “Event of Default” shall have the meaning set forth in Section 8. 
  
 “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
  
 “Fundamental Transaction” shall have the
meaning set forth in Section 5(e)(iii) hereof. 
  
 “Late Fees” shall have the meaning set forth in the second paragraph to this Debenture. 
  
 “Mandatory Prepayment Amount” for any Debentures shall equal the sum of (i) the greater of: (A) 100% of the principal
amount of Debentures to be prepaid, plus all accrued and unpaid interest thereon, or (B) if an Event of Default occurs as a result of the Company’s failure to timely deliver certificates upon conversion or failure to timely register the
Conversion Shares, the principal amount of Debentures to be prepaid, plus all other accrued and unpaid interest hereon, divided by the Conversion Price multiplied by the VWAP on (x) the date the Mandatory Prepayment Amount is demanded or otherwise
due or (y) the date the Mandatory Prepayment Amount is paid in full, whichever is greater, and (ii) all other amounts, costs, expenses and liquidated damages due in respect of such Debentures. 
  
 “Original Issue Date” shall mean the date
of the first issuance of the Debentures regardless of the number of transfers of any Debenture and regardless of the number of instruments which may be issued to evidence such Debenture. 
  
 “Person” means a corporation, an association, a partnership, organization, a business, an
individual, a government or political subdivision thereof or a governmental agency. 
  
 “Purchase Agreement” means the Securities Purchase Agreement, dated as of September     ,
2004, to which the Company and the original Holder are parties, as amended, modified or supplemented from time to time in accordance with its terms. 
  

 A-3 

 “Registration Rights Agreement” means the Registration Rights Agreement,
dated as of the date of the Purchase Agreement, to which the Company and the original Holder are parties, as amended, modified or supplemented from time to time in accordance with its terms. 
  
 “Registration Statement” means a
registration statement meeting the requirements set forth in the Registration Rights Agreement, covering among other things the resale of the Conversion Shares and naming the Holder as a “selling stockholder” thereunder. 
  
 “Securities Act” means the Securities Act
of 1933, as amended, and the rules and regulations promulgated thereunder. 
  
 “Subsidiary” shall have the meaning given to such term in the Purchase Agreement. 
  
 “Trading Day” means a day on which the Common Stock is traded on a Trading Market. 
  
 “Trading Market” means the following
markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the Nasdaq SmallCap Market, the American Stock Exchange, the New York Stock Exchange, the Nasdaq National Market or the OTC Bulletin Board.

  
 “Transaction Documents”
shall have the meaning set forth in the Purchase Agreement. 
  
 “VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted
average price of the Common Stock for such date (or the nearest preceding date) on the primary Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg Financial L.P. (based on a Trading Day from 9:30 a.m. EST to
4:02 p.m. Eastern Time) using the VAP function; (b) if the Common Stock is not then listed or quoted on the Trading Market and if prices for the Common Stock are then reported in the “Pink Sheets” published by the National Quotation Bureau
Incorporated (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported; or (c) in all other cases, the fair market value of a share of Common Stock as
determined by a nationally recognized-independent appraiser selected in good faith by Purchasers holding a majority of the principal amount of Debentures then outstanding. 
  
 Section 2. Interest. 
  

a) Payment of Interest in Cash. The Company shall pay interest to the Holder on the outstanding principal amount of this
Debenture at the rate of 12% per annum, payable on the first business day after the 30 day anniversary of the Original Issue Date, on the date this Debenture is prepaid or on the Maturity Date (except that, if any such date is not a Business Day,
then such payment shall be due on the next succeeding Business Day) (each such date, an “Interest Payment Date”) in cash. 
  

 A-4 

 b) Interest Calculations. Interest shall be calculated on the basis of a 360-day
year and shall accrue daily commencing on the Original Issue Date until payment in full of the principal sum, together with all accrued and unpaid interest and other amounts which may become due hereunder, has been made. Interest hereunder will be
paid to the Person in whose name this Debenture is registered on the records of the Company regarding registration and transfers of Debentures (the “Debenture Register”). 
  
 c) Late Fee. All overdue accrued and unpaid interest
to be paid hereunder shall entail a late fee at the rate of 18% per annum (or such lower maximum amount of interest permitted to be charged under applicable law) (“Late Fee”) which will accrue daily, from the date such interest is
due hereunder through and including the date of payment. 
  
 d) Prepayment. The Company may prepay any portion of the principal amount of this Debenture without the prior written consent of the Holder. 
  
 Section 3. Registration of Transfers and Exchanges. 
  
 a) Different Denominations. This Debenture is
exchangeable for an equal aggregate principal amount of Debentures of different authorized denominations, as requested by the Holder surrendering the same. No service charge will be made for such registration of transfer or exchange. 
  
 b) Investment Representations. This Debenture has
been issued subject to certain investment representations of the original Holder set forth in the Purchase Agreement and may be transferred or exchanged only in compliance with the Purchase Agreement and applicable federal and state securities laws
and regulations. 
  
 c) Reliance on Debenture
Register. Prior to due presentment to the Company for transfer of this Debenture, the Company and any agent of the Company may treat the Person in whose name this Debenture is duly registered on the Debenture Register as the owner hereof for the
purpose of receiving payment as herein provided and for all other purposes, whether or not this Debenture is overdue, and neither the Company nor any such agent shall be affected by notice to the contrary. 
  
 Section 4. Conversion. 
  
 a) Voluntary Conversion. At any time after the
Maturity Date, this Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time (subject to the limitations on conversion set forth in Section 4(c)(ii) hereof). The
Holder shall effect conversions by delivering to the Company the form of Notice of Conversion attached hereto as Annex A (a “Notice of Conversion”), specifying therein the principal amount of Debentures to be converted and

  

 A-5 

 the date on which such conversion is to be effected (a “Conversion Date”). If no
Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion is provided hereunder. To effect conversions hereunder, the Holder shall not be required to physically surrender Debentures
to the Company unless the entire principal amount of this Debenture plus all accrued and unpaid interest thereon has been so converted. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture in an
amount equal to the applicable conversion. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. The Company shall deliver any objection to any Notice of Conversion within 1
Business Day of receipt of such notice. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error. The Holder and any assignee, by acceptance of this Debenture,
acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Debenture, the unpaid and unconverted principal amount of this Debenture may be less than the amount stated on the face hereof.

  
 b) Conversion Price. The conversion
price shall be equal to $1.00 (subject to adjustment herein)(the “Conversion Price”). 
  
 c) Holder’s Restriction on Conversion. The Company shall not effect any conversion of this Debenture, and the Holder shall not
convert any portion of this Debenture, pursuant to Section 4(a) or otherwise, to the extent that after giving effect to such conversion, the Holder (together with the Holder’s affiliates), as set forth on the applicable Notice of Conversion,
would beneficially own in excess of 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to such conversion. For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by
the Holder and its affiliates shall include the number of shares of Common Stock issuable upon conversion of this Debenture with respect to which the determination of such sentence is being made, but shall exclude the number of shares of Common
Stock which would be issuable upon (A) conversion of the remaining, nonconverted portion of this Debenture beneficially owned by the Holder or any of its affiliates and (B) exercise or conversion of the unexercised or nonconverted portion of any
other securities of the Company (including, without limitation, any other Debentures or the Warrants) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its
affiliates. Except as set forth in the preceding sentence, for purposes of this Section 4(c), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act. To the extent that the limitation contained in this section
applies, the determination of whether this Debenture is convertible (in relation to other securities owned by the Holder) and of which a portion of this Debenture is convertible shall be in the sole discretion of such Holder. To ensure compliance
with this restriction, the Holder will be deemed to represent to the Company each time it delivers a Notice of Conversion that such Notice of Conversion has not violated the restrictions set forth in this paragraph and the Company shall have no
obligation to verify or confirm the accuracy of such determination. For purposes of this Section 4(c), in determining the number of 
  

 A-6 

 outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common
Stock as reflected in (x) the Company’s most recent Form 10-QSB or Form 10-KSB, as the case may be, (y) a more recent public announcement by the Company or (z) any other notice by the Company or the Company’s Transfer Agent setting forth
the number of shares of Common Stock outstanding. Upon the written or oral request of the Holder, the Company shall within two Trading Days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any
case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Debenture, by the Holder or its affiliates since the date as of which such
number of outstanding shares of Common Stock was reported. The provisions of this Section 4(c) may be waived by the Holder upon, at the election of the Holder, not less than 61 days’ prior notice to the Company, and the provisions of this
Section 4(c) shall continue to apply until such 61st day (or such later date, as determined by the Holder, as may be
specified in such notice of waiver). 
  
 d)
Mechanics of Conversion 
  
 i.
Conversion Shares Issuable Upon Conversion. The number of shares of Common Stock issuable upon any conversion hereunder shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be
converted plus (if indicated in the applicable Conversion Notice) the amount of any accrued but unpaid interest on this Debenture through the Conversion Date by (y) the Conversion Price. 
  
 ii. Delivery of Certificate Upon Conversion. Not later than three Trading Days after any Conversion
Date, the Company will deliver to the Holder a certificate or certificates representing the Conversion Shares which shall be free of restrictive legends and trading restrictions (other than those required by the Purchase Agreement) representing the
number of shares of Common Stock being acquired upon the conversion of Debentures (including, if so timely elected by the Company, shares of Common Stock representing the payment of accrued interest) and (B) a bank check in the amount of accrued and
unpaid interest (if the Company is required to pay accrued interest in cash). The Company shall, if available and if allowed under applicable securities laws, use its best efforts to deliver any certificate or certificates required to be delivered
by the Company under this Section electronically through the Depository Trust Corporation or another established clearing corporation performing similar functions. 
  
 iii. Failure to Deliver Certificates. If in the case of any Notice of Conversion such certificate or
certificates are not delivered to or as directed by the applicable Holder by the third Trading Day after a Conversion Date, the Holder shall be entitled by written notice to the Company at any time on or before its receipt of such certificate or
certificates thereafter, to rescind such conversion, in which event the Company shall immediately return the certificates representing the principal amount of Debentures tendered for conversion. 
  

 A-7 

 iv. Partial Liquidated Damages. If the Company fails for any reason to deliver to
the Holder such certificate or certificates pursuant to Section 4(d)(ii) by the third Trading Day after the Conversion Date, the Company shall pay to such Holder, in cash, as liquidated damages and not as a penalty, for each $500 of principal amount
being converted, $5 per Trading Day (increasing to $10 per Trading Day after 5 Trading Days after such damages begin to accrue and increasing to $100 per Trading Day 6 Trading Days after such after such damages begin to accrue) for each Trading Day
after such third Trading Day until such certificates are delivered. The Company’s obligations to issue and deliver the Conversion Shares upon conversion of this Debenture in accordance with the terms hereof are absolute and unconditional,
irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim,
recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other person, and irrespective of any other
circumstance which might otherwise limit such obligation of the Company to the Holder in connection with the issuance of such Conversion Shares; provided, however, such delivery shall not operate as a waiver by the Company of any such
action the Company may have against the Holder. 
  
 v. Failure to Timely Deliver Certificates Upon Conversion. In addition to any other rights available to the Holder, if the Company fails for any reason to deliver to the Holder such certificate or certificates pursuant to Section
4(d)(ii) by the third Trading Day after the Conversion Date, and if after such third Trading Day the Holder is required by its brokerage firm to purchase (in an open market transaction or otherwise) Common Stock to deliver in satisfaction of a sale
by such Holder of the Conversion Shares which the Holder anticipated receiving upon such conversion (a “Buy-In”), then the Company shall (A) pay in cash to the Holder (in addition to any remedies available to or elected by the
Holder) the amount by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the Common Stock so purchased exceeds (y) the product of (1) the aggregate number of shares of Common Stock that such Holder
anticipated receiving from the conversion at issue multiplied by (2) the actual sale price of the Common Stock at the time of the sale (including brokerage commissions, if any) giving rise to such purchase obligation and (B) at the option of the
Holder, either reissue Debentures in principal amount equal to the principal amount of the attempted conversion or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its
delivery requirements under Section 4(d)(ii). For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of Debentures with respect to which the actual sale
price of the Conversion Shares at the time of the sale 
  

 A-8 

 (including brokerage commissions, if any) giving rise to such purchase obligation was a total of $10,000
under clause (A) of the immediately preceding sentence, the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In.
Notwithstanding anything contained herein to the contrary, if a Holder requires the Company to make payment in respect of a Buy-In for the failure to timely deliver certificates hereunder and the Company timely pays in full such payment, the Company
shall not be required to pay such Holder liquidated damages under Section 4(d)(iv) in respect of the certificates resulting in such Buy-In. 
  
 vi. Reservation of Shares Issuable Upon Conversion. The Company covenants that it will at all times reserve and keep available out
of its authorized and unissued shares of Common Stock solely for the purpose of issuance upon conversion of the Debentures and payment of interest on the Debenture, each as herein provided, free from preemptive rights or any other actual contingent
purchase rights of persons other than the Holders, not less than such number of shares of the Common Stock as shall (subject to any additional requirements of the Company as to reservation of such shares set forth in the Purchase Agreement) be
issuable (taking into account the adjustments and restrictions of Section 4(d)) upon the conversion of the outstanding principal amount of the Debentures and payment of interest hereunder. The Company covenants that all shares of Common Stock that
shall be so issuable shall, upon issue, be duly and validly authorized, issued and fully paid, nonassessable and, if the Registration Statement is then effective under the Securities Act, registered for public sale in accordance with such
Registration Statement. 
  
 vii. Fractional
Shares. Upon a conversion hereunder the Company shall not be required to issue stock certificates representing fractions of shares of the Common Stock, but may if otherwise permitted, make a cash payment in respect of any final fraction of a
share based on the VWAP at such time. If the Company elects not, or is unable, to make such a cash payment, the Holder shall be entitled to receive, in lieu of the final fraction of a share, one whole share of Common Stock. 
  
 viii. Transfer Taxes. The issuance of certificates
for shares of the Common Stock on conversion of the Debentures shall be made without charge to the Holders thereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificate, provided that
the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holder of such Debentures so converted and
the Company shall not be required to issue or deliver such certificates unless or until the person or persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid. 
  

 A-9 

 Section 5. Certain Adjustments. 
  
 a) Stock Dividends and Stock Splits. If the Company,
at any time while the Debentures are outstanding: (A) shall pay a stock dividend or otherwise make a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock
(which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company pursuant to this Debenture, including as interest thereon), (B) subdivide outstanding shares of Common Stock into a larger number of shares, (C)
combine (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (D) issue by reclassification of shares of the Common Stock any shares of capital stock of the Company, then the Conversion
Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding before such event and of which the denominator shall be the number of shares of Common Stock
outstanding after such event. Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision, combination or re-classification. 
  
 b) Intentionally Omitted. 
  
 c) Pro Rata Distributions. If the Company, at any time while Debentures are outstanding, shall distribute to all holders of Common
Stock (and not to Holders) evidences of its indebtedness or assets or rights or warrants to subscribe for or purchase any security, then in each such case the Conversion Price shall be determined by multiplying such Conversion Price in effect
immediately prior to the record date fixed for determination of stockholders entitled to receive such distribution by a fraction of which the denominator shall be the VWAP determined as of the record date mentioned above, and of which the numerator
shall be such VWAP on such record date less the then fair market value at such record date of the portion of such assets or evidence of indebtedness so distributed applicable to one outstanding share of the Common Stock as determined by the Board of
Directors in good faith. In either case the adjustments shall be described in a statement provided to the Holders of the portion of assets or evidences of indebtedness so distributed or such subscription rights applicable to one share of Common
Stock. Such adjustment shall be made whenever any such distribution is made and shall become effective immediately after the record date mentioned above. 
  
 d) Calculations. All calculations under this Section 5 shall be made to the nearest cent or the nearest 1/100th of a share, as the
case may be. For purposes of this Section 5, the number of shares of Common Stock outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) outstanding. 
  

 A-10 

 e) Notice to Holders. 
  
 i. Adjustment to Conversion Price. Whenever the
Conversion Price is adjusted pursuant to any of this Section 5, the Company shall promptly mail to each Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such
adjustment. If the Company issues a variable rate security, despite the prohibition thereon in the Purchase Agreement, the Company shall be deemed to have issued Common Stock or Common Stock Equivalents at the lowest possible conversion or exercise
price at which such securities may be converted or exercised in the case of a Variable Rate Transaction (as defined in the Purchase Agreement), or the lowest possible adjustment price in the case of an MFN Transaction (as defined in the Purchase
Agreement). 
  
 ii. Notice to Allow Conversion
by Holder. If (A) the Company shall declare a dividend (or any other distribution) on the Common Stock; (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock; (C) the Company shall authorize
the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights; (D) the approval of any stockholders of the Company shall be required in connection with any
reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, of any compulsory share exchange whereby the Common Stock is converted
into other securities, cash or property; (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company; then, in each case, the Company shall cause to be filed at each office or
agency maintained for the purpose of conversion of the Debentures, and shall cause to be mailed to the Holders at their last addresses as they shall appear upon the stock books of the Company, at least 20 calendar days prior to the applicable record
or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the
holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is
expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer or share exchange; provided, that the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be
specified in such 
  

 A-11 

 notice. Holders are entitled to convert Debentures during the 20-day period commencing the date of such
notice to the effective date of the event triggering such notice. 
  
 iii. Fundamental Transaction. If, at any time while this Debenture is outstanding, (A) the Company effects any merger or consolidation of the Company with or into another Person, (B) the Company effects any
sale of all or substantially all of its assets in one or a series of related transactions, (C) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to
tender or exchange their shares for other securities, cash or property, or (D) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or
exchanged for other securities, cash or property (in any such case, a “Fundamental Transaction”), then upon any subsequent conversion of this Debenture, the Holder shall have the right to receive, for each Conversion Share that
would have been issuable upon such conversion absent such Fundamental Transaction, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been,
immediately prior to such Fundamental Transaction, the holder of one share of Common Stock (the “Alternate Consideration”). For purposes of any such conversion, the determination of the Conversion Price shall be appropriately
adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Conversion Price among the
Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a
Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this Debenture following such Fundamental Transaction. To the extent necessary to effectuate the foregoing
provisions, any successor to the Company or surviving entity in such Fundamental Transaction shall issue to the Holder a new debenture consistent with the foregoing provisions and evidencing the Holder’s right to convert such debenture into
Alternate Consideration. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this paragraph (c) and insuring that
this Debenture (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction. 
  

 A-12 

 Section 6. Intentionally Omitted. 
  
 Section 7. Negative Covenants. So long as any portion of this
Debenture is outstanding, the Company will not and will not permit any of its Subsidiaries to directly or indirectly: 
  
 a) enter into, create, incur, assume or suffer to exist any indebtedness or liens of any kind, on or with respect to any of its property
or assets hereafter acquired or any interest therein or any income or profits therefrom that is senior to, or pari passu with, in any respect, the Company’s obligations under the Debentures without the prior written consent of the Holder;

  
 b) amend its certificate of incorporation,
bylaws or to her charter documents so as to adversely affect any rights of the Holder; 
  
 c) repay, repurchase or offer to repay, repurchase or otherwise acquire more than a de minimis number of shares of its Common Stock
or other equity securities other than as to the Conversion Shares to the extent permitted or required under the Transaction Documents or as otherwise permitted by the Transaction Documents; or 
  
 d) enter into any agreement with respect to any of the
foregoing. 
  
 Section 8. Events of Default.

  
 a) “Event of Default”,
wherever used herein, means any one of the following events (whatever the reason and whether it shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or
regulation of any administrative or governmental body): 
  
 i. any default in the payment of (A) the principal of amount of any Debenture, or (B) interest (including Late Fees) on, or liquidated damages in respect of, any Debenture, in each case free of any claim of
subordination, as and when the same shall become due and payable (whether on a Conversion Date or the Maturity Date or by acceleration or otherwise) which default, solely in the case of an interest payment or other default under clause (B) above, is
not cured, within 3 Trading Days; 
  
 ii. the
Company shall fail to observe or perform any other covenant or agreement contained in this Debenture or any of the other Transaction Documents (other than a breach by the Company of its obligations to deliver shares of Common Stock to the Holder
upon conversion which breach is addressed in clause (xii) below) which failure is not cured, if possible to cure, within the earlier to occur of (A) 5 Trading Days after notice of such default sent by the Holder or by any other Holder and (B)10
Trading Days after the Company shall become or should have become aware of such failure. 
  

 A-13 

 iii. a default or event of default (subject to any grace or cure period provided for in
the applicable agreement, document or instrument) shall occur under (A) any of the Transaction Documents other than the Debentures, or (B) any other material agreement, lease, document or instrument to which the Company or any Subsidiary is bound;

  
 iv. any representation or warranty made
herein, in any other Transaction Document, in any written statement pursuant hereto or thereto, or in any other report, financial statement or certificate made or delivered to the Holder or any other holder of Debentures shall be untrue or incorrect
in any material respect as of the date when made or deemed made; 
  
 v. (i) the Company or any of its Subsidiaries shall commence, or there shall be commenced against the Company or any such Subsidiary, a case under any applicable bankruptcy or insolvency laws as now or hereafter in
effect or any successor thereto, or the Company or any Subsidiary commences any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to the Company or any Subsidiary thereof or (ii) there is commenced against the Company or any Subsidiary thereof any such bankruptcy, insolvency or other proceeding which remains undismissed for a period
of 60 days; or (iii) the Company or any Subsidiary thereof is adjudicated by a court of competent jurisdiction insolvent or bankrupt; or any order of relief or other order approving any such case or proceeding is entered; or (iv) the Company or any
Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial part of its property which continues undischarged or unstayed for a period of 60 days; or (v) the Company or any Subsidiary thereof makes a general
assignment for the benefit of creditors; or (vi) the Company shall fail to pay, or shall state that it is unable to pay, or shall be unable to pay, its debts generally as they become due; or (vii) the Company or any Subsidiary thereof shall call a
meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts; or (viii) the Company or any Subsidiary thereof shall by any act or failure to act expressly indicate its consent to, approval of or
acquiescence in any of the foregoing; or (ix) any corporate or other action is taken by the Company or any Subsidiary thereof for the purpose of effecting any of the foregoing; 
  
 vi. the Company or any Subsidiary shall default (subject to any applicable grace or cure period provided for
in the applicable agreement or instrument) in any of its obligations under any mortgage, credit agreement or other facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be
secured or evidenced any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement of the Company in an amount exceeding $150,000, whether such indebtedness now exists or shall hereafter be created and such
default shall result in such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise become due and payable; 
  

 A-14 

 vii. the Company shall be a party to any Change of Control Transaction or Fundamental
Transaction, shall agree to sell or dispose of all or in excess of 33% of its assets in one or more transactions (whether or not such sale would constitute a Change of Control Transaction) or shall redeem or repurchase more than a de minimis number
of its outstanding shares of Common Stock or other equity securities of the Company (other than redemptions of Conversion Shares and repurchases of shares of Common Stock or other equity securities of departing officers and directors of the Company;
provided such repurchases shall exceed $100,000, in the aggregate, for all officers and directors during the term of this Debenture); 
  
 viii. a Registration Statement shall not have been declared effective by the Commission on or prior to the 180th calendar day after the Closing Date or any other or any other Event (as defined in the Registration Rights Agreement);

  
 ix. if, during the Effectiveness Period (as
defined in the Registration Rights Agreement), the effectiveness of the Registration Statement lapses for any reason or the Holder shall not be permitted to resell Registrable Securities (as defined in the Registration Rights Agreement) under the
Registration Statement, in either case, for more than 30 consecutive Trading Days or 60 non-consecutive Trading Days during any 12 month period; provided, however, that in the event that the Company is negotiating a merger,
consolidation, acquisition or sale of all or substantially all of its assets or a similar transaction and in the written opinion of counsel to the Company, the Registration Statement, would be required to be amended to include information concerning
such transactions or the parties thereto that is not available or may not be publicly disclosed at the time, the Company shall be permitted an additional 10 consecutive Trading during any 12 month period relating to such an event; 
  
 x. an Event (as defined in the Registration Rights
Agreement) shall not have been cured to the satisfaction of the Holder prior to the expiration of thirty days from the Event Date (as defined in the Registration Rights Agreement) relating thereto (other than an Event resulting from a failure of an
Registration Statement to be declared effective by the Commission on or prior to the Effectiveness Date (as defined in the Registration Rights Agreement), which shall be covered by Section 8(a)(ix); 
  
 xi. the Company shall fail for any reason to deliver
certificates to a Holder prior to the fifth Trading Day after a Conversion Date pursuant to and in accordance with Section 4(d), or the Company shall provide notice to the Holder, including by way of public announcement, at any time, of its
intention not to comply with requests for conversions of any Debentures in accordance with the terms hereof (other than a result of the limitation on conversion or exercise set forth in Section 4(c)); or 
  

 A-15 

 xii. the Company shall fail for any reason to deliver the payment in cash pursuant to a
Buy-In (as defined herein) within 5 Trading Days after notice thereof is delivered hereunder. 
  
 b) Remedies Upon Event of Default. If any Event of Default occurs and if the Holder has elected to convert, then, in addition to
its other remedies, the full principal amount of this Debenture, together with interest and other amounts owing in respect thereof, to the date of acceleration shall become, at the Holder’s election, immediately due and payable in cash. The
aggregate amount payable upon an Event of Default shall be equal to the Mandatory Prepayment Amount. Commencing 5 days after the occurrence of any Event of Default that results in the eventual acceleration of this Debenture, the interest rate on
this Debenture shall accrue at the rate of 18% per annum, or such lower maximum amount of interest permitted to be charged under applicable law. All Debentures for which the full Mandatory Prepayment Amount hereunder shall have been paid in
accordance herewith shall promptly be surrendered to or as directed by the Company. The Holder need not provide and the Company hereby waives any presentment, demand, protest or other notice of any kind, and the Holder may immediately enforce any
and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such declaration may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a
Debenture holder until such time, if any, as the full payment under this Section shall have been received by it. No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon. 
  
 Section 9. Miscellaneous. 
  
 a) Notices. Any and all notices or other
communications or deliveries to be provided by the Holders hereunder, including, without limitation, any Notice of Conversion, shall be in writing and delivered personally, by facsimile, sent by a nationally recognized overnight courier service,
addressed to the Company, at the address set forth above, facsimile number             , Attn:
             or such other address or facsimile number as the Company may specify for such purposes by notice to the Holders delivered in accordance with this Section. Any and
all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile, sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile
telephone number or address of such Holder appearing on the books of the Company, or if no such facsimile telephone number or address appears, at the principal place of business of the Holder. Any notice or other communication or deliveries
hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or 
  

 A-16 

 communication is delivered via facsimile at the facsimile telephone number specified in this Section
prior to 5:30 p.m. (New York City time), (ii) the date after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section later than 5:30 p.m. (New York City time)
on any date and earlier than 11:59 p.m. (New York City time) on such date, (iii) the second Business Day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such
notice is required to be given. 
  
 b)
Absolute Obligation. Except as expressly provided herein, no provision of this Debenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, interest and liquidated damages (if
any) on, this Debenture at the time, place, and rate, and in the coin or currency, herein prescribed. This Debenture is a direct debt obligation of the Company. This Debenture ranks paripassu with all other Debentures now or hereafter
issued under the terms set forth herein. 
  
 c)
Lost or Mutilated Debenture. If this Debenture shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Debenture, or in lieu of or in
substitution for a lost, stolen or destroyed Debenture, a new Debenture for the principal amount of this Debenture so mutilated, lost, stolen or destroyed but only upon receipt of evidence of such loss, theft or destruction of such Debenture, and of
the ownership hereof, and indemnity, if requested, all reasonably satisfactory to the Company. 
  
 d) Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Debenture shall be
governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the
state and federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, or such New York Courts are improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service
of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to
it under this Debenture and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.
Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Debenture or the transactions contemplated 
  

 A-17 

 hereby. If either party shall commence an action or proceeding to enforce any provisions of this
Debenture, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

  
 e) Waiver. Any waiver by the Company
or the Holder of a breach of any provision of this Debenture shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Debenture. The failure of the Company or the
Holder to insist upon strict adherence to any term of this Debenture on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this
Debenture. Any waiver must be in writing. 
  
 f)
Severability. If any provision of this Debenture is invalid, illegal or unenforceable, the balance of this Debenture shall remain in effect, and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain
applicable to all other persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates applicable laws governing usury, the applicable rate of interest due hereunder shall automatically be
lowered to equal the maximum permitted rate of interest. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any
stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of or interest on this Debenture as contemplated herein, wherever enacted, now or at any time hereafter in force,
or which may affect the covenants or the performance of this indenture, and the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such
law, hinder, delay or impeded the execution of any power herein granted to the Holder, but will suffer and permit the execution of every such as though no such law has been enacted. 
  
 g) Next Business Day. Whenever any payment or other obligation hereunder shall be due on a day other
than a Business Day, such payment shall be made on the next succeeding Business Day. 
  
 h) Headings. The headings contained herein are for convenience only, do not constitute a part of this Debenture and shall not be
deemed to limit or affect any of the provisions hereof. 
  
 ********************* 
  

 A-18 

 IN WITNESS WHEREOF, the Company has caused this Debenture to be duly executed by a duly authorized
officer as of the date first above indicated. 
  

			
	 HARTVILLE GROUP, INC.

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 

  

 A-19 

 ANNEX A 
  
 NOTICE OF CONVERSION 
  
 The undersigned hereby elects to convert principal under the 12 % Convertible Debenture of Hartville Group, Inc., a Nevada corporation (the
“Company”), due on November     , 2004 , into shares of common stock, par value $0.001 per share (the “Common Stock”), of the Company according to the conditions hereof, as of the date
written below. If shares are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested
by the Company in accordance therewith. No fee will be charged to the holder for any conversion, except for such transfer taxes, if any. 
  
 By the delivery of this Notice of Conversion the undersigned represents and warrants to the Company that its ownership of the Company’s Common Stock
does not exceed the amounts determined in accordance with Section 13(d) of the Exchange Act, specified under Section 4 of this Debenture. 
  
 The undersigned agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection with any transfer of the
aforesaid shares of Common Stock. 
  
 Conversion calculations: 
  

			
	 	 	 Date to Effect Conversion:

		
	 	 	 Principal Amount of Debentures to be Converted:

		
	 	 	 Number of shares of Common Stock to be issued:

		
	 	 	 Signature:

		
	 	 	 Name:

		
	 	 	 Address:

  

 A-20 

 Schedule 1 
  

CONVERSION SCHEDULE 
  
 12% Convertible Debenture due on November     , 2004, in the aggregate principal amount of
$             issued by Hartville Group, Inc. This Conversion Schedule reflects conversions made under Section 4 of the above referenced Debenture. 
  
 Dated: 
  

							
	 Date of Conversion
 (or for first entry,
 Original Issue Date)

	 	 Amount of
 Conversion

	 	 Aggregate
 Principal
 Amount
 Remaining
 Subsequent to
 Conversion
 (or original
 Principal
 Amount)

	 	Company Attest

  

 A-21 

 EXHIBIT B 
  

REGISTRATION RIGHTS AGREEMENT 
  
 This Registration Rights Agreement (this “Agreement”) is made and entered into as of September 8, 2004 among Hartville Group, Inc., a
Nevada corporation (the “Company”), and the purchasers signatory hereto (each such purchaser is a “Purchaser” and all such purchasers are, collectively, the “Purchasers”). 
  
 This Agreement is made pursuant to the Securities Purchase Agreement, dated
as of the date hereof among the Company and the Purchasers (the “Purchase Agreement”). 
  
 The Company and the Purchasers hereby agree as follows: 
  
 1. Definitions 
  
 Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreement shall have the meanings given such terms in the
Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings: 
  
 “Advice” shall have the meaning set forth in Section 6(d). 
  
 “Effectiveness Date” means, with respect to the initial Registration Statement required to
be filed hereunder, the 120th calendar day following the date hereof and, with respect to any additional
Registration Statements which may be required pursuant to Section 3(c), the 120th calendar day following the date on
which the Company first knows, or reasonably should have known, that such additional Registration Statement is required hereunder; provided, however, in the event the Company is notified by the Commission that one of the above
Registration Statements will not be reviewed or is no longer subject to further review and comments, the Effectiveness Date as to such Registration Statement shall be the fifth Trading Day following the date on which the Company is so notified if
such date precedes the dates required above. 
  
 “Effectiveness Period” shall have the meaning set forth in Section 2(a). 
  
 “Event” shall have the meaning set forth in Section 2(b). 
  
 “Event Date” shall have the meaning set forth in Section 2(b). 
  
 “Filing Date” means, with respect to the
initial Registration Statement required hereunder, the 60th calendar day following the date hereof and, with respect
to any additional Registration Statements which may be required pursuant to Section 3(c), the 15th day following the
date on which the Company first knows, or reasonably should have known that such additional Registration Statement is required hereunder. 
  

 B-1 

 “Holder” or “Holders” means the holder or holders, as
the case may be, from time to time of Registrable Securities. 
  
 “Indemnified Party” shall have the meaning set forth in Section 5(c). 
  
 “Indemnifying Party” shall have the meaning set forth in Section 5(c). 
  
 “Losses” shall have the meaning set forth
in Section 5(a). 
  
 “Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened. 
  
 “Prospectus” means the prospectus included
in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus. 
  
 “Registrable Securities” means (i) all of the shares of Common Stock issuable upon conversion in full of the Debentures,
(ii) all shares issuable as interest on the Debentures assuming all interest payments are made in shares of Common Stock and the Debentures are held until maturity, (iii) all Warrant Shares, (iv) any securities issued or issuable upon any stock
split, dividend or other distribution recapitalization or similar event with respect to the foregoing and (v) any additional shares issuable in connection with any anti-dilution provisions in the Debentures. 
  
 “Registration Statement” means the
registration statements required to be filed hereunder and any additional registration statements contemplated by Section 3(c), including (in each case) the Prospectus, amendments and supplements to such registration statement or Prospectus,
including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in such registration statement. 
  
 “Rule 415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule. 
  
 “Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule. 
  

 B-2 

 2. Shelf Registration 
  
 (a) On or prior to each Filing Date, the Company shall prepare and file with the Commission a “Shelf” Registration
Statement covering the resale of 125% of the Registrable Securities on such Filing Date for an offering to be made on a continuous basis pursuant to Rule 415. The Registration Statement shall be on Form S-3 (except if the Company is not then
eligible to register for resale the Registrable Securities on Form S-3, in which case such registration shall be on another appropriate form in accordance herewith) and shall contain (unless otherwise directed by the Holders) substantially the
“Plan of Distribution” attached hereto as Annex A. Subject to the terms of this Agreement, the Company shall use its best efforts to cause the Registration Statement to be declared effective under the Securities Act as promptly as
possible after the filing thereof, but in any event prior to the applicable Effectiveness Date, and shall use its best efforts to keep such Registration Statement continuously effective under the Securities Act until all Registrable Securities
covered by such Registration Statement have been sold or may be sold without volume restrictions pursuant to Rule 144(k) as determined by the counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the
Company’s transfer agent and the affected Holders (the “Effectiveness Period”). The Company shall immediately notify the Holders via facsimile of the effectiveness of the Registration Statement on the same day that the Company
receives notification of the effectiveness from the Commission. Failure to so notify the Holder within 1 Trading Day of such notification shall be deemed an Event under Section 2(b). 
  
 (b) If: (i) a Registration Statement is not filed on or prior to its Filing Date (if the Company files a Registration
Statement without affording the Holders the opportunity to review and comment on the same as required by Section 3(a), the Company shall not be deemed to have satisfied this clause (i)), or (ii) the Company fails to file with the Commission a
request for acceleration in accordance with Rule 461 promulgated under the Securities Act, within five Trading Days of the date that the Company is notified (orally or in writing, whichever is earlier) by the Commission that a Registration Statement
will not be “reviewed,” or not subject to further review, or (iii) prior to its Effectiveness Date, the Company fails to file a pre-effective amendment and otherwise respond in writing to comments made by the Commission in respect of such
Registration Statement within 10 calendar days after the receipt of comments by or notice from the Commission that such amendment is required in order for a Registration Statement to be declared effective, or (iv) a Registration Statement filed or
required to be filed hereunder is not declared effective by the Commission by its Effectiveness Date, or (v) after the Effectiveness Date, a Registration Statement ceases for any reason to remain continuously effective as to all Registrable
Securities for which it is required to be effective, or the Holders are not permitted to utilize the Prospectus therein to resell such Registrable Securities for 10 consecutive calendar days but no more than an aggregate of 15 calendar days during
any 12-month period (which need not be consecutive Trading Days) (any such failure or breach being referred to as an “Event”, and for purposes of clause (i) or (iv) the date on which such Event occurs, or for purposes of clause (ii)
the date on which such five Trading Day period is exceeded, or for purposes of clause (iii) the date which such 10 calendar day period is exceeded, or for purposes of clause (v) the date on which such 10 or 15 calendar day period, as applicable, is

  

 B-3 

 exceeded being referred to as “Event Date”), then in addition to any other rights the Holders may have
hereunder or under applicable law, on each such Event Date and on each monthly anniversary of each such Event Date (if the applicable Event shall not have been cured by such date) until the applicable Event is cured, the Company shall pay to each
Holder an amount in cash, as partial liquidated damages and not as a penalty, equal to 1.5% of the aggregate purchase price paid by such Holder pursuant to the Purchase Agreement for any Registrable Securities then held by such Holder. If the
Company fails to pay any partial liquidated damages pursuant to this Section in full within seven days after the date payable, the Company will pay interest thereon at a rate of 18% per annum (or such lesser maximum amount that is permitted to be
paid by applicable law) to the Holder, accruing daily from the date such partial liquidated damages are due until such amounts, plus all such interest thereon, are paid in full. The partial liquidated damages pursuant to the terms hereof shall apply
on a daily pro-rata basis for any portion of a month prior to the cure of an Event. 
  
 3. Registration Procedures 
  
 In connection with the Company’s registration obligations hereunder, the Company shall: 
  
 (a) Not less than five Trading Days prior to the filing of each Registration Statement or any related Prospectus or any amendment or supplement thereto
(including any document that would be incorporated or deemed to be incorporated therein by reference), the Company shall, (i) furnish to each Holder copies of all such documents proposed to be filed, which documents (other than those incorporated or
deemed to be incorporated by reference) will be subject to the review of such Holders, and (ii) cause its officers and directors, counsel and independent certified public accountants to respond to such inquiries as shall be necessary, in the
reasonable opinion of respective counsel to conduct a reasonable investigation within the meaning of the Securities Act. The Company shall not file the Registration Statement or any such Prospectus or any amendments or supplements thereto to which
the Holders of a majority of the Registrable Securities shall reasonably object in good faith, provided that, the Company is notified of such objection in writing no later than 5 Trading Days after the Holders have been so furnished copies of such
documents. Each Holder agrees to furnish to the Company a completed Questionnaire in the form attached to this Agreement as Annex B (a “Selling Holder Questionnaire”) not less than two Trading Days prior to the Filing
Date or by the end of the fourth Trading Day following the date on which such Holder receives draft materials in accordance with this Section. 
  
 (b) (i) Prepare and file with the Commission such amendments, including post-effective amendments, to a Registration Statement and the Prospectus used in
connection therewith as may be necessary to keep a Registration Statement continuously effective as to the applicable Registrable Securities for the Effectiveness Period and prepare and file with the Commission such additional Registration
Statements in order to register for resale under the Securities Act all of the Registrable Securities; (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement (subject to the terms of this Agreement),
and as so supplemented or amended to be filed pursuant to Rule 424; (iii) respond as promptly as reasonably possible to any comments received from the Commission with respect to a Registration Statement or any amendment thereto and as promptly as
reasonably possible 
  

 B-4 

 provide the Holders true and complete copies of all correspondence from and to the Commission relating to a Registration
Statement; and (iv) comply in all material respects with the provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by a Registration Statement during the applicable period in
accordance (subject to the terms of this Agreement) with the intended methods of disposition by the Holders thereof set forth in such Registration Statement as so amended or in such Prospectus as so supplemented. 
  
 (c) If during the Effectiveness Period, the number of Registrable Securities
at any time exceeds 90% of the number of shares of Common Stock then registered in a Registration Statement, then the Company shall file as soon as reasonably practicable but in any case prior to the applicable Filing Date, an additional
Registration Statement covering the resale by the Holders of not less than 125% of the number of such Registrable Securities. 
  
 (d) Notify the Holders of Registrable Securities to be sold (which notice shall, pursuant to clauses (ii) through (vi) hereof, be accompanied by an
instruction to suspend the use of the Prospectus until the requisite changes have been made) as promptly as reasonably possible (and, in the case of (i)(A) below, not less than five Trading Days prior to such filing) and (if requested by any such
Person) confirm such notice in writing no later than one Trading Day following the day (i)(A) when a Prospectus or any Prospectus supplement or post-effective amendment to a Registration Statement is proposed to be filed; (B) when the Commission
notifies the Company whether there will be a “review” of such Registration Statement and whenever the Commission comments in writing on such Registration Statement (the Company shall provide true and complete copies thereof and all written
responses thereto to each of the Holders); and (C) with respect to a Registration Statement or any post-effective amendment, when the same has become effective; (ii) of any request by the Commission or any other Federal or state governmental
authority for amendments or supplements to a Registration Statement or Prospectus or for additional information; (iii) of the issuance by the Commission or any other federal or state governmental authority of any stop order suspending the
effectiveness of a Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; (v) of the occurrence of any event or passage of time that makes
the financial statements included in a Registration Statement ineligible for inclusion therein or any statement made in a Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in
any material respect or that requires any revisions to a Registration Statement, Prospectus or other documents so that, in the case of a Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and (vi) the occurrence or existence of any pending
corporate development with respect to the Company that the Company believes may be material and that, in the determination of the Company, makes it not in the best interest of the Company to allow continued availability of the Registration Statement
or Prospectus; provided that any and all of such information shall remain confidential to each Holder until such information otherwise 
  

 B-5 

 becomes public, unless disclosure by a Holder is required by law; provided, further, notwithstanding each
Holder’s agreement to keep such information confidential, the Holders make no acknowledgement that any such information is material, non-public information. 
  
 (e) Use its best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order suspending the
effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest practicable moment. 
  
 (f) Furnish to each Holder, without charge, at least one conformed copy of
each such Registration Statement and each amendment thereto, including financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference to the extent requested by such Person, and all exhibits to the
extent requested by such Person (including those previously furnished or incorporated by reference) promptly after the filing of such documents with the Commission. 
  
 (g) Promptly deliver to each Holder, without charge, as many copies of the Prospectus or Prospectuses (including each form
of prospectus) and each amendment or supplement thereto as such Persons may reasonably request in connection with resales by the Holder of Registrable Securities. Subject to the terms of this Agreement, the Company hereby consents to the use of such
Prospectus and each amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto, except after the giving on
any notice pursuant to Section 3(d). 
  
 (h) Prior to any resale
of Registrable Securities by a Holder, use its commercially reasonable efforts to register or qualify or cooperate with the selling Holders in connection with the registration or qualification (or exemption from the Registration or qualification) of
such Registrable Securities for the resale by the Holder under the securities or Blue Sky laws of such jurisdictions within the United States as any Holder reasonably requests in writing, to keep each registration or qualification (or exemption
therefrom) effective during the Effectiveness Period and to do any and all other acts or things reasonably necessary to enable the disposition in such jurisdictions of the Registrable Securities covered by each Registration Statement; provided, that
the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified, subject the Company to any material tax in any such jurisdiction where it is not then so subject or file a general consent
to service of process in any such jurisdiction. 
  
 (i) If
requested by the Holders, cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be delivered to a transferee pursuant to a Registration Statement, which certificates shall
be free, to the extent permitted by the Purchase Agreement, of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any such Holders may request. 
  
 (j) Upon the occurrence of any event contemplated by this Section 3, as
promptly as reasonably possible under the circumstances taking into account the Company’s good faith 
  

 B-6 

 assessment of any adverse consequences to the Company and its stockholders of the premature disclosure of such event,
prepare a supplement or amendment, including a post-effective amendment, to a Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other
required document so that, as thereafter delivered, neither a Registration Statement nor such Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made, not misleading. If the Company notifies the Holders in accordance with clauses (ii) through (v) of Section 3(d) above to suspend the use of any Prospectus until the
requisite changes to such Prospectus have been made, then the Holders shall suspend use of such Prospectus. The Company will use its best efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The Company
shall be entitled to exercise its right under this Section 3(j) to suspend the availability of a Registration Statement and Prospectus, subject to the payment of partial liquidated damages pursuant to Section 2(b), for a period not to exceed 60 days
(which need not be consecutive days) in any 12 month period. 
  
 (k) Comply with all applicable rules and regulations of the Commission. 
  
 (l) The Company may require each selling Holder to furnish to the Company a certified statement as to the number of shares of Common Stock beneficially owned by such Holder and, if required by the Commission, the
person thereof that has voting and dispositive control over the Shares. During any periods that the Company is unable to meet its obligations hereunder with respect to the registration of the Registrable Securities solely because any Holder fails to
furnish such information within three Trading Days of the Company’s request, any liquidated damages that are accruing at such time as to such Holder only shall be tolled and any Event that may otherwise occur solely because of such delay shall
be suspended as to such Holder only, until such information is delivered to the Company. 
  
 4. Registration Expenses. All fees and expenses incident to the performance of or compliance with this Agreement by the Company shall be borne by the Company whether or not any Registrable Securities are sold
pursuant to the Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses (A) with respect to filings
required to be made with the Trading Market on which the Common Stock is then listed for trading, and (B) in compliance with applicable state securities or Blue Sky laws reasonably agreed to by the Company in writing (including, without limitation,
fees and disbursements of counsel for the Company in connection with Blue Sky qualifications or exemptions of the Registrable Securities and determination of the eligibility of the Registrable Securities for investment under the laws of such
jurisdictions as requested by the Holders), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities and of printing prospectuses if the printing of prospectuses is reasonably requested by
the holders of a majority of the Registrable Securities included in a Registration Statement), (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company, (v) Securities Act liability insurance, if the
Company so desires such insurance, and (vi) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions 
  

 B-7 

 contemplated by this Agreement. In addition, the Company shall be responsible for all of its internal expenses incurred
in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit
and the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder. In no event shall the Company be responsible for any broker or similar commissions or, except to the
extent provided for in the Transaction Documents, any legal fees or other costs of the Holders. 
  
 5. Indemnification 
  
 (a) Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder,
the officers, directors, agents, brokers (including brokers who offer and sell Registrable Securities as principal as a result of a pledge or any failure to perform under a margin call of Common Stock), investment advisors and employees of each of
them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, agents and employees of each such controlling Person, to the fullest extent
permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising out
of or relating to any untrue or alleged untrue statement of a material fact contained in a Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of
or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in light of the circumstances
under which they were made) not misleading, except to the extent, but only to the extent, that (i) such untrue statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder
expressly for use therein, or to the extent that such information relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for
use in a Registration Statement, such Prospectus or such form of Prospectus or in any amendment or supplement thereto (it being understood that the Holder has approved Annex A hereto for this purpose) or (ii) in the case of an occurrence of an event
of the type specified in Section 3(d)(ii)-(vi), the use by such Holder of an outdated or defective Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated or defective and prior to the receipt by such Holder
of the Advice contemplated in Section 6(e). The Company shall notify the Holders promptly of the institution, threat or assertion of any Proceeding arising from or in connection with the transactions contemplated by this Agreement of which the
Company is aware. 
  
 (b) Indemnification by Holders. Each
Holder shall, severally and not jointly, indemnify and hold harmless the Company, its directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, to the extent arising out of or based solely upon: (x) such
Holder’s failure to comply with the 
  

 B-8 

 prospectus delivery requirements of the Securities Act or (y) any untrue or alleged untrue statement of a material fact
contained in any Registration Statement, any Prospectus, or any form of prospectus, or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not misleading (i) to the extent, but only to the extent, that such untrue statement or omission is contained in any information so furnished in writing by such Holder to the
Company specifically for inclusion in such Registration Statement or such Prospectus or (ii) to the extent that (1) such untrue statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by
such Holder expressly for use therein, or to the extent that such information relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder
expressly for use in the Registration Statement (it being understood that the Holder has approved Annex A hereto for this purpose), such Prospectus or such form of Prospectus or in any amendment or supplement thereto or (2) in the case of an
occurrence of an event of the type specified in Section 3(d)(ii)-(vi), the use by such Holder of an outdated or defective Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated or defective and prior to the
receipt by such Holder of the Advice contemplated in Section 6(e). In no event shall the liability of any selling Holder hereunder be greater in amount than the dollar amount of the net proceeds received by such Holder upon the sale of the
Registrable Securities giving rise to such indemnification obligation. 
  
 (c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify the
Person from whom indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall have the right to assume the defense thereof, including the employment of counsel reasonably satisfactory to the
Indemnified Party and the payment of all fees and expenses incurred in connection with defense thereof; provided, that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or
liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have prejudiced
the Indemnifying Party. 
  
 An Indemnified Party shall have the
right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed
in writing to pay such fees and expenses; (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named
parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such Indemnified Party shall reasonably believe that a material conflict of interest is likely to exist if the same
counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense thereof and the reasonable fees 
  

 B-9 

 and expenses of one separate counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not
be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any
settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such
Proceeding. 
  
 Subject to the terms of this Agreement, all
reasonable fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be
paid to the Indemnified Party, as incurred, within ten Trading Days of written notice thereof to the Indemnifying Party; provided, that the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such fees and expenses
applicable to such actions for which such Indemnified Party is not entitled to indemnification hereunder, determined based upon the relative faults of the parties. 
  
 (d) Contribution. If a claim for indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party
(by reason of public policy or otherwise), then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault
of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a
material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action,
statement or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in this Agreement, any reasonable attorneys’ or other reasonable fees or expenses incurred
by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms. 

 
 The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding
the provisions of this Section 5(d), no Holder shall be required to contribute, in the aggregate, any amount in excess of the amount by which the proceeds actually received by such Holder from the sale of the Registrable Securities subject to the
Proceeding exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission, except in the case of fraud by such Holder. 
  

 B-10 

 The indemnity and contribution agreements contained in this Section are in addition to any liability that
the Indemnifying Parties may have to the Indemnified Parties. 
  
 6. Miscellaneous 
  
 (a) Remedies. In the
event of a breach by the Company or by a Holder, of any of their obligations under this Agreement, each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement,
including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company and each Holder agree that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach
by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate. 
  
 (b) Piggyback on Registrations. The Company or any of its security
holders (other than the Holders in such capacity pursuant hereto) may include securities of the Company in the Registration Statement; provided; however, if the Company does not file any other registration statement prior to the Filing
Date and the Effectiveness Date, the Company or any of its security holders may not include securities of the Company in the Registration Statement. The Company may file any other registration statements prior to the Filing Date and the
Effectiveness Date required hereunder, provided that this Section 6(b) shall not prohibit the Company from filing amendments to registration statements already filed. 
  
 (c) Compliance. Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the
Securities Act as applicable to it in connection with sales of Registrable Securities pursuant to the Registration Statement. 
  
 (d) Discontinued Disposition. Each Holder agrees by its acquisition of such Registrable Securities that, upon receipt of a notice from the Company
of the occurrence of any event of the kind described in Section 3(d), such Holder will forthwith discontinue disposition of such Registrable Securities under a Registration Statement until such Holder’s receipt of the copies of the supplemented
Prospectus and/or amended Registration Statement, or until it is advised in writing (the “Advice”) by the Company that the use of the applicable Prospectus may be resumed, and, in either case, has received copies of any additional
or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement. The Company will use its best efforts to ensure that the use of the Prospectus may be resumed as promptly as it
practicable. The Company agrees and acknowledges that any periods during which the Holder is required to discontinue the disposition of the Registrable Securities hereunder shall be subject to the provisions of Section 2(b). 
  
 (e) Piggy-Back Registrations. If at any time during the Effectiveness
Period there is not an effective Registration Statement covering all of the Registrable Securities and the Company shall determine to prepare and file with the Commission a registration statement relating to an offering for its own account or the
account of others under the Securities Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the 
  

 B-11 

 Securities Act) or their then equivalents relating to equity securities to be issued solely in connection with any
acquisition of any entity or business or equity securities issuable in connection with the stock option or other employee benefit plans, then the Company shall send to each Holder a written notice of such determination and, if within fifteen days
after the date of such notice, any such Holder shall so request in writing, the Company shall include in such registration statement all or any part of such Registrable Securities such holder requests to be registered; provided, that, the Company
shall not be required to register any Registrable Securities pursuant to this Section 6(f) that are eligible for resale pursuant to Rule 144(k) promulgated under the Securities Act or that are the subject of a then effective Registration Statement.

  
 (f) Amendments and Waivers. The provisions of this
Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by the Company and
each Holder of the then outstanding Registrable Securities. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders and that does not directly
or indirectly affect the rights of other Holders may be given by Holders of all of the Registrable Securities to which such waiver or consent relates; provided, however, that the provisions of this sentence may not be amended,
modified, or supplemented except in accordance with the provisions of the immediately preceding sentence. 
  
 (g) Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be delivered as set
forth in the Purchase Agreement. 
  
 (h) Successors and
Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and shall inure to the benefit of each Holder. The Company may not assign its rights or obligations hereunder
without the prior written consent of all of the Holders of the then-outstanding Registrable Securities. Each Holder may assign their respective rights hereunder in the manner and to the Persons as permitted under the Purchase Agreement. 

 
 (i) No Inconsistent Agreements. Neither the Company nor any of its
subsidiaries has entered, as of the date hereof, nor shall the Company or any of its subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its securities, that would have the effect of impairing the rights
granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. Except as set forth on Schedule 6(b), neither the Company nor any of its subsidiaries has previously entered into any agreement granting any registration
rights with respect to any of its securities to any Person that have not been satisfied in full. 
  
 (j) Execution and Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be
an original and, all of which taken together shall constitute one and the same Agreement. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid binding obligation of the party executing (or on
whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature were the original thereof. 
  

 B-12 

 (k) Governing Law. All questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be determined with the provisions of the Purchase Agreement. 
  
 (l) Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. 
  
 (m) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way
be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable. 
  
 (n) Headings.
The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. 
  
 (o) Independent Nature of Holders’ Obligations and Rights. The obligations of each Holder hereunder are several and not joint with the
obligations of any other Holder hereunder, and no Holder shall be responsible in any way for the performance of the obligations of any other Holder hereunder. Nothing contained herein or in any other agreement or document delivered at any closing,
and no action taken by any Holder pursuant hereto or thereto, shall be deemed to constitute the Holders as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Holders are in any way acting in
concert with respect to such obligations or the transactions contemplated by this Agreement. Each Holder shall be entitled to protect and enforce its rights, including without limitation the rights arising out of this Agreement, and it shall not be
necessary for any other Holder to be joined as an additional party in any proceeding for such purpose. 
  
 ******************** 
  

 B-13 

 IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first
written above. 
  

			
	HARTVILLE GROUP, INC.
		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 

  
 [SIGNATURE PAGE
OF HOLDERS FOLLOWS] 
  

 B-14 

 [SIGNATURE PAGE OF HOLDERS TO HVTL RRA] 
  
 Name of Investing Entity:
                                        

 Signature of Authorized Signatory of Investing Entity:
                                        
     
 Name of Authorized Signatory:
                                        

 Title of Authorized Signatory:
                                        

  
 [SIGNATURE PAGES CONTINUE] 
  

 B-15 

 Plan of Distribution 
  
 Each Selling Stockholder (the “Selling Stockholders”) of the common stock (“Common Stock”)
of Hartville Group, Inc., a Nevada corporation (the “Company”) and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their shares of Common Stock on the Trading Market or any
other stock exchange, market or trading facility on which the shares are traded or in private transactions. These sales may be at fixed or negotiated prices. A Selling Stockholder may use any one or more of the following methods when selling shares:

  

	 	•	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; 

  

	 	•	block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

  

	 	•	purchases by a broker-dealer as principal and resale by the broker-dealer for its account; 

  

	 	•	an exchange distribution in accordance with the rules of the applicable exchange; 

  

	 	•	privately negotiated transactions; 

  

	 	•	settlement of short sales entered into after the date of this prospectus; 

  

	 	•	broker-dealers may agree with the Selling Stockholders to sell a specified number of such shares at a stipulated price per share; 

  

	 	•	a combination of any such methods of sale; 

  

	 	•	through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; or 

  

	 	•	any other method permitted pursuant to applicable law. 

  
 The Selling Stockholders may also sell shares under Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”), if
available, rather than under this prospectus. 
  
 Broker-dealers
engaged by the Selling Stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the Selling Stockholders (or, if any broker-dealer acts as agent for the purchaser of shares,
from the purchaser) in amounts to be negotiated. Each Selling Stockholder does not expect these commissions and discounts relating to its sales of shares to exceed what is customary in the types of transactions involved. 
  
 In connection with the sale of our common stock or interests therein, the
Selling Stockholders may enter into hedging transactions with broker-dealers or other financial 
  

 B-16 

 institutions, which may in turn engage in short sales of the common stock in the course of hedging the positions they
assume. The Selling Stockholders may also sell shares of our common stock short and deliver these securities to close out their short positions, or loan or pledge the common stock to broker-dealers that in turn may sell these securities. The Selling
Stockholders may also enter into option or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of
shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction). 
  
 The Selling Stockholders and any broker-dealers or agents that are involved
in selling the shares may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the
shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Each Selling Stockholder has informed the Company that it does not have any agreement or understanding, directly or indirectly, with any
person to distribute the Common Stock. 
  
 The Company is required
to pay certain fees and expenses incurred by the Company incident to the registration of the shares. The Company has agreed to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under
the Securities Act. 
  
 Because Selling Stockholders may be deemed
to be “underwriters” within the meaning of the Securities Act, they will be subject to the prospectus delivery requirements of the Securities Act. In addition, any securities covered by this prospectus which qualify for sale pursuant to
Rule 144 under the Securities Act may be sold under Rule 144 rather than under this prospectus. Each Selling Stockholder has advised us that they have not entered into any agreements, understandings or arrangements with any underwriter or
broker-dealer regarding the sale of the resale shares. There is no underwriter or coordinating broker acting in connection with the proposed sale of the resale shares by the Selling Stockholders. 
  
 We agreed to keep this prospectus effective until the earlier of (i) the date
on which the shares may be resold by the Selling Stockholders without registration and without regard to any volume limitations by reason of Rule 144(e) under the Securities Act or any other rule of similar effect or (ii) all of the shares have been
sold pursuant to the prospectus or Rule 144 under the Securities Act or any other rule of similar effect. The resale shares will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In
addition, in certain states, the resale shares may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.

  
 Under applicable rules and regulations under the Exchange Act,
any person engaged in the distribution of the resale shares may not simultaneously engage in market making activities with respect to our common stock for a period of two business days prior to the commencement of the distribution. In addition, the
Selling Stockholders will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of shares of our common stock by the Selling
Stockholders or any other person. We will make copies of this prospectus available to the Selling Stockholders and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale. 

 

 B-17 

 Annex B 
  
 Hartville Group, Inc. 
  
 Selling Securityholder Notice and Questionnaire 
  
 The undersigned beneficial owner of common stock, par value $0.001 per share (the “Common Stock”), of Hartville Group, Inc., a Nevada
corporation (the “Company”), (the “Registrable Securities”) understands that the Company has filed or intends to file with the Securities and Exchange Commission (the “Commission”) a registration
statement on Form S-3 (the “Registration Statement”) for the registration and resale under Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”), of the Registrable Securities, in accordance with
the terms of the Registration Rights Agreement, dated as of September 8, 2004 (the “Registration Rights Agreement”), among the Company and the Purchasers named therein. A copy of the Registration Rights Agreement is available from
the Company upon request at the address set forth below. All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement. 
  
 Certain legal consequences arise from being named as a selling securityholder in the Registration Statement and the related
prospectus. Accordingly, holders and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or not being named as a selling securityholder in the Registration
Statement and the related prospectus. 
  
 NOTICE 

 
 The undersigned beneficial owner (the “Selling
Securityholder”) of Registrable Securities hereby elects to include the Registrable Securities owned by it and listed below in Item 3 (unless otherwise specified under such Item 3) in the Registration Statement. 
  

 B-18 

 The undersigned hereby provides the following information to the Company and represents and warrants that such
information is accurate: 
  
 QUESTIONNAIRE 
  
 1. Name. 
  

	 	(a)	Full Legal Name of Selling Securityholder 

  
  

	
	 ________________________________________________________________________________________________________________________
 

  

	 	(b)	Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Securities Listed in Item 3 below are held: 

  

	
	 ________________________________________________________________________________________________________________________
 

	 	(c)	Full Legal Name of Natural Control Person (which means a natural person who directly you indirectly alone or with others has power to vote or dispose of the securities covered by
the questionnaire): 

  

	
	 ________________________________________________________________________________________________________________________
 

  
 2. Address for Notices to Selling
Securityholder: 
  

					
	 _________________________________________________________________________________________________

	 _________________________________________________________________________________________________

	 _________________________________________________________________________________________________

	 	  	Telephone:_____________________________________________________________________________________
	 	  	Fax: __________________________________________________________________________________________
	 	  	Contact Person: _________________________________________________________________________________

  
 3. Beneficial Ownership of
Registrable Securities: 
  

	 	(a)	Type and Principal Amount of Registrable Securities beneficially owned: 

  

	
	 ________________________________________________________________________________________________________________________
 
	 ________________________________________________________________________________________________________________________
 
	 ________________________________________________________________________________________________________________________
 

  

 B-19 

	4.	Broker-Dealer Status: 

  

	 	(a)	Are you a broker-dealer? 

  
 Yes   ̈    No   ̈ 
  

	 	Note:	If yes, the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement. 

  

	 	(b)	Are you an affiliate of a broker-dealer? 

  
 Yes   ̈    No   ̈ 
  

	 	(c)	If you are an affiliate of a broker-dealer, do you certify that you bought the Registrable Securities in the ordinary course of business, and at the time of the purchase of the
Registrable Securities to be resold, you had no agreements or understandings, directly or indirectly, with any person to distribute the Registrable Securities? 

  
 Yes   ̈    No   ̈ 
  

	 	Note:	If no, the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement. 

  

	5.	Beneficial Ownership of Other Securities of the Company Owned by the Selling Securityholder. 

  
 Except as set forth below in this Item 5, the undersigned is not the beneficial or registered owner of any securities of
the Company other than the Registrable Securities listed above in Item 3. 
  

	 	(a)	Type and Amount of Other Securities beneficially owned by the Selling Securityholder: 

  

	
	 _____________________________________________________________________________________
 
	 _____________________________________________________________________________________
 

  

 B-20 

 6. Relationships with the Company: 
  
 Except as set forth below, neither the undersigned nor any of its affiliates, officers, directors or principal equity
holders (owners of 5% of more of the equity securities of the undersigned) has held any position or office or has had any other material relationship with the Company (or its predecessors or affiliates) during the past three years. 

 
 State any exceptions here: 
  

	
	 ______________________________________________________________________________________________________________________________________________________________________________
 
	 ______________________________________________________________________________________________________________________________________________________________________________
 

  
 The undersigned agrees
to promptly notify the Company of any inaccuracies or changes in the information provided herein that may occur subsequent to the date hereof at any time while the Registration Statement remains effective. 
  
 By signing below, the undersigned consents to the disclosure of the
information contained herein in its answers to Items 1 through 6 and the inclusion of such information in the Registration Statement and the related prospectus. The undersigned understands that such information will be relied upon by the Company in
connection with the preparation or amendment of the Registration Statement and the related prospectus. 
  
 IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by
its duly authorized agent. 
  

					
	Dated:                     	 	Beneficial Owner:
                                    
			
	 	 	By:	 	  

	 	 	Name:	 	 
	 	 	Title:	 	 

  
 PLEASE FAX A COPY OF THE COMPLETED
AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO: 
  

 B-21 

 EXHIBIT C 
  

NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED
BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR REASONABLY ACCEPTABLE TO THE COMPANY TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES
MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES. 
  
 COMMON STOCK PURCHASE WARRANT 
  
 To Purchase              Shares of Common Stock of 
  
 HARTVILLE GROUP, INC. 
  
 THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received,
                     (the “Holder”), is entitled, upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time on or after the date hereof (the “Initial Exercise Date”) and on or prior to the close of business on the five year anniversary of the Initial Exercise Date (the “Termination
Date”) but not thereafter, to subscribe for and purchase from Hartville Group, Inc., a Nevada corporation (the “Company”), up to              shares (the
“Warrant Shares”) of Common Stock, par value $0.001 per share, of the Company (the “Common Stock”). The purchase price of one share of Common Stock (the “Exercise Price”) under this Warrant shall be
$            1, subject to adjustment hereunder. 
  
 Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement (the “Purchase Agreement”), dated September 8,
2004, among the Company and the purchasers signatory thereto. 
  
 Section 2. Exercise. 
  
 a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made at any time or times on or after the Initial Exercise Date and on or 

	1	The lesser of (a) the average of the 5 day VWAP bid immediately prior to the date of the Purchase Agreement, (b) the Closing Price on
                            , 2004 and (c) $4.50. 

  

 C-1 

 before the Termination Date by delivery to the Company of a duly executed facsimile copy of the Notice of
Exercise Form annexed hereto (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of such Holder appearing on the books of the Company); provided, however,
within 5 Trading Days of the date said Notice of Exercise is delivered to the Company, the Holder shall have surrendered this Warrant to the Company and the Company shall have received payment of the aggregate Exercise Price of the shares thereby
purchased by wire transfer or cashier’s check drawn on a United States bank. 
  
 b) Exercise Price. The Exercise Price of each share of Common Stock under this Warrant shall be
$            2, subject to adjustment hereunder. 
  
 c) Cashless Exercise. If at any time after one year from the date of issuance of this Warrant there is no effective Registration Statement registering the resale of the Warrant Shares by the Holder, then this
Warrant may also be exercised at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a certificate for the number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A),
where: 
  
 (A) = the VWAP on the Trading Day
immediately preceding the date of such election; 
  
 (B) = the Exercise Price of this Warrant, as adjusted; and 
  
 (X) = the number of Warrant Shares issuable upon exercise of this Warrant in accordance with the 
           terms of this Warrant by means of a cash exercise rather than a cashless exercise. 
  
 d) Exercise Limitations; Holder’s Restrictions. The Holder shall not have the right to exercise any portion of this
Warrant, pursuant to Section 2(c) or otherwise, to the extent that after giving effect to such issuance after exercise, the Holder (together with the Holder’s affiliates), as set forth on the applicable Notice of Exercise, would beneficially
own in excess of 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to such issuance. For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its
affiliates shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which the determination of such sentence is being made, but shall exclude the number of shares of Common Stock which would be
issuable upon (A) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its affiliates and (B) exercise or conversion of the unexercised or nonconverted portion of any other securities of the
Company (including, without limitation, any other Debentures or Warrants) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its affiliates. Except as set forth
in the preceding sentence, for 

	2	The lesser of (a) the average of the 5 day VWAP bid immediately prior to the date of the Purchase Agreement, (b) the Closing Price on Tuesday, August 31, 2004 and
(c) $4.50. 

  

 C-2 

 purposes of this Section 2(d), beneficial ownership shall be calculated in accordance with Section 13(d)
of the Exchange Act, it being acknowledged by Holder that the Company is not representing to Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and Holder is solely responsible for any schedules required to be filed
in accordance therewith. To the extent that the limitation contained in this Section 2(d) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder) and of which a portion of this Warrant
is exercisable shall be in the sole discretion of such Holder, and the submission of a Notice of Exercise shall be deemed to be such Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by such
Holder) and of which portion of this Warrant is exercisable, in each case subject to such aggregate percentage limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. For purposes of this Section
2(d), in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company’s most recent Form 10-QSB or Form 10-KSB, as the case may be, (y) a
more recent public announcement by the Company or (z) any other notice by the Company or the Company’s Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of the Holder, the Company
shall within two Trading Days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion
or exercise of securities of the Company, including this Warrant, by the Holder or its affiliates since the date as of which such number of outstanding shares of Common Stock was reported. 
  
 e) Mechanics of Exercise. 
  
 i. Authorization of Warrant Shares. The Company
covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant, be duly authorized, validly issued, fully paid and
nonassessable and free from all taxes, liens and charges in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue). The Company covenants that during the period the Warrant is
outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants
that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares upon the exercise of the purchase
rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the
Trading Market upon which the Common Stock may be listed. 
  

 C-3 

 ii. Delivery of Certificates Upon Exercise. Certificates for shares purchased
hereunder shall be delivered to the Holder within 3 Trading Days from the delivery to the Company of the Notice of Exercise Form, surrender of this Warrant and payment of the aggregate Exercise Price as set forth above (“Warrant Share
Delivery Date”). This Warrant shall be deemed to have been exercised on the date the Exercise Price is received by the Company. The Warrant Shares shall be deemed to have been issued, and Holder or any other person so designated to be named
therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised by payment to the Company of the Exercise Price and all taxes required to be paid by the Holder, if any,
pursuant to Section 2(e)(vii) prior to the issuance of such shares, have been paid. 
  
 iii. Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the time of
delivery of the certificate or certificates representing Warrant Shares, deliver to Holder a new Warrant evidencing the rights of Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other
respects be identical with this Warrant. 
  
 iv.
Rescission Rights. If the Company fails to deliver to the Holder a certificate or certificates representing the Warrant Shares pursuant to this Section 2(e)(iv) by the Warrant Share Delivery Date, then the Holder will have the right to
rescind such exercise 
  
 v. Buy-In
Compensation. In addition to any other rights available to the Holder, if the Company fails to deliver to the Holder a certificate or certificates representing the Warrant Shares pursuant to an exercise on or before the Warrant Share Delivery
Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated
receiving upon such exercise (a “Buy-In”), then the Company shall (1) pay in cash to the Holder the amount by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock
so purchased exceeds (y) the amount obtained by multiplying (A) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (B) the price at which the sell order giving rise to
such purchase obligation was executed, and (2) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored or deliver to the Holder the number of shares of
Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase price of $11,000 
  

 C-4 

 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale
price giving rise to such purchase obligation of $10,000, under clause (1) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts
payable to the Holder in respect of the Buy-In, together with applicable confirmations and other evidence reasonably requested by the Company. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder,
at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon exercise of the Warrant
as required pursuant to the terms hereof. 
  
 vi. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which Holder would otherwise be entitled to purchase
upon such exercise, the Company shall pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price. 
  
 vii. Charges, Taxes and Expenses. Issuance of certificates for Warrant Shares shall be made without
charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of the
Holder or in such name or names as may be directed by the Holder; provided, however, that in the event certificates for Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for
exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder; and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.

  
 viii. Closing of Books. The Company
will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof. 
  
 Section 3. Certain Adjustments. 
  
 a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (A) pays a stock dividend or
otherwise make a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by
the Company pursuant to this Warrant), (B) subdivides outstanding shares of Common Stock into a larger number of shares, (C) combines (including by way of reverse stock split) outstanding shares of Common Stock 
  

 C-5 

 into a smaller number of shares, or (D) issues by reclassification of shares of the Common Stock any
shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding before such event and
of which the denominator shall be the number of shares of Common Stock outstanding after such event. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders
entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification. 
  
 b) Subsequent Equity Sales. If the Company or any Subsidiary thereof, as applicable, at any time
while this Warrant is outstanding, shall offer, sell, grant any option to purchase or offer, sell or grant any right to reprice its securities, or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or other
disposition) any Common Stock or Common Stock Equivalents entitling any Person to acquire shares of Common Stock, at an effective price per share less than the then Exercise Price (such lower price, the “Base Share Price” and such
issuances collectively, a “Dilutive Issuance”), as adjusted hereunder (if the holder of the Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments, reset provisions,
floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which is issued in connection with such issuance, be entitled to receive shares of Common Stock at an effective price per share which is
less than the Exercise Price, such issuance shall be deemed to have occurred for less than the Exercise Price), then, the Exercise Price shall be reduced by multiplying the Exercise Price by a fraction, the numerator of which is the number of shares
of Common Stock issued and outstanding immediately prior to the Dilutive Issuance plus the number of shares of Common Stock which the offering price for such Dilutive Issuance would purchase at the then Exercise Price, and the denominator of which
shall be the sum of the number of shares of Common Stock issued and outstanding immediately prior to the Dilutive Issuance plus the number of shares of Common Stock so issued or issuable in connection with the Dilutive Issuance. Such adjustment
shall be made whenever such Common Stock or Common Stock Equivalents are issued. The Company shall notify the Holder in writing, no later than the business day following the issuance of any Common Stock or Common Stock Equivalents subject to this
section, indicating therein the applicable issuance price, or of applicable reset price, exchange price, conversion price and other pricing terms. 
  
 c) Pro Rata Distributions. If the Company, at any time prior to the Termination Date, shall distribute to all holders of Common
Stock (and not to Holders of the Warrants) evidences of its indebtedness or assets or rights or warrants to subscribe for or purchase any security other than the Common Stock (which shall be subject to Section 3(b)), then in each such case the
Exercise Price shall be adjusted by multiplying the Exercise Price in effect immediately prior to the record date fixed for determination of stockholders entitled to receive such distribution by a fraction of which the denominator shall be the VWAP
determined as of the record date mentioned above, and of which the numerator shall be such VWAP on such record date less the then per share fair market 
  

 C-6 

 value at such record date of the portion of such assets or evidence of indebtedness so distributed
applicable to one outstanding share of the Common Stock as determined by the Board of Directors in good faith. In either case the adjustments shall be described in a statement provided to the Holders of the portion of assets or evidences of
indebtedness so distributed or such subscription rights applicable to one share of Common Stock. Such adjustment shall be made whenever any such distribution is made and shall become effective immediately after the record date mentioned above.

  
 d) Calculations. All calculations
under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock outstanding as of a given date shall be the sum of the number of
shares of Common Stock (excluding treasury shares, if any) outstanding. 
  
 e) Notice to Holders. 
  
 i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to this Section 3, the Company shall promptly mail to each Holder a notice setting forth the Exercise Price after such
adjustment and setting forth a brief statement of the facts requiring such adjustment. If the Company issues a variable rate security, despite the prohibition thereon in the Purchase Agreement, the Company shall be deemed to have issued Common Stock
or Common Stock Equivalents at the lowest possible conversion or exercise price at which such securities may be converted or exercised in the case of a Variable Rate Transaction (as defined in the Purchase Agreement), or the lowest possible
adjustment price in the case of an MFN Transaction (as defined in the Purchase Agreement. 
  
 ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution) on the Common
Stock; (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock; (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any
shares of capital stock of any class or of any rights; (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party,
any sale or transfer of all or substantially all of the assets of the Company, of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property; (E) the Company shall authorize the voluntary or
involuntary dissolution, liquidation or winding up of the affairs of the Company; then, in each case, the Company shall cause to be mailed to the Holder at its last addresses as it shall appear upon the Warrant Register of the Company, at least 20
calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such 
  

 C-7 

 dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as
of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share
exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable
upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided, that the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required
to be specified in such notice. The Holder is entitled to exercise this Warrant during the 20-day period commencing the date of such notice to the effective date of the event triggering such notice 
  
 f) Fundamental Transaction. If, at any time while
this Warrant is outstanding, (A) the Company effects any merger or consolidation of the Company with or into another Person, (B) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions, (C)
any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (D) the Company effects
any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (in any such case, a “Fundamental
Transaction”), then, upon any subsequent conversion of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise absent such Fundamental Transaction, at the option of
the Holder, (a) upon exercise of this Warrant, the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and Alternate Consideration receivable upon or as a result of such
reorganization, reclassification, merger, consolidation or disposition of assets by a Holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such event or (b) cash equal to the value of this Warrant
as determined in accordance with the Black-Scholes option pricing formula (the “Alternate Consideration”). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such
Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a
reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the
Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to the
Company or surviving entity in such Fundamental Transaction shall issue to the Holder a new warrant consistent with the foregoing provisions and 
  

 C-8 

 evidencing the Holder’s right to exercise such warrant into Alternate Consideration. The terms of
any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this paragraph (f) and insuring that this Warrant (or any such replacement
security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction. 
  
 g) Exempt Issuance. Notwithstanding the foregoing, no adjustments, Alternate Consideration nor notices shall be made, paid or
issued under this Section 3 in respect of an Exempt Issuance. 
  
 h) Voluntary Adjustment By Company. The Company may at any time during the term of this Warrant reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the Board of
Directors of the Company. 
  
 Section 4. Transfer of
Warrant. 
  
 a) Transferability.
Subject to compliance with any applicable securities laws and the conditions set forth in Sections 5(a) and 4(d) hereof and to the provisions of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder are transferable, in whole
or in part, upon surrender of this Warrant at the principal office of the Company, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient
to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denomination
or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. A Warrant, if properly assigned, may be
exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued. 
  
 b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of
the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be
involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. 
  
 c) Warrant Register. The Company shall register this
Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the
absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary. 
  

 C-9 

 d) Transfer Restrictions. If, at the time of the surrender of this Warrant in
connection with any transfer of this Warrant, the transfer of this Warrant shall not be registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws, the Company may
require, as a condition of allowing such transfer (i) that the Holder or transferee of this Warrant, as the case may be, furnish to the Company a written opinion of counsel (which opinion shall be in form, substance and scope customary for opinions
of counsel in comparable transactions) to the effect that such transfer may be made without registration under the Securities Act and under applicable state securities or blue sky laws, (ii) that the holder or transferee execute and deliver to the
Company an investment letter in form and substance acceptable to the Company and (iii) that the transferee be an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), or (a)(8) promulgated under the Securities Act or
a qualified institutional buyer as defined in Rule 144A(a) under the Securities Act. 
  
 Section 5. Miscellaneous. 
  
 a) Title to Warrant. Prior to the Termination Date and subject to compliance with applicable laws and Section 4 of this Warrant, this Warrant and all rights hereunder are transferable, in whole or in part, at
the office or agency of the Company by the Holder in person or by duly authorized attorney, upon surrender of this Warrant together with the Assignment Form annexed hereto properly endorsed. The transferee shall sign an investment letter in form and
substance reasonably satisfactory to the Company. 
  
 b) No Rights as Shareholder Until Exercise. This Warrant does not entitle the Holder to any voting rights or other rights as a shareholder of the Company prior to the exercise hereof. Upon the surrender of this Warrant and the
payment of the aggregate Exercise Price (or by means of a cashless exercise), the Warrant Shares so purchased shall be and be deemed to be issued to such Holder as the record owner of such shares as of the close of business on the later of the date
of such surrender or payment. 
  
 c) Loss,
Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the
Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or
stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate. 
  
 d) Saturdays, Sundays, Holidays, etc. If the last or
appointed day for the taking of any action or the expiration of any right required or granted herein shall be a Saturday, Sunday or a legal holiday, then such action may be taken or such right may be exercised on the next succeeding day not a
Saturday, Sunday or legal holiday. 
  

 C-10 

 e) Authorized Shares. 
  
 The Company covenants that during the period the Warrant is
outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants
that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares upon the exercise of the purchase
rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the
Trading Market upon which the Common Stock may be listed. 
  
 Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer
of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company
will (a) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (b) take all such action as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant, and (c) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having
jurisdiction thereof as may be necessary to enable the Company to perform its obligations under this Warrant. 
  
 Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in
the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof. 
  
 f) Jurisdiction. All questions concerning the
construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the provisions of the Purchase Agreement. 
  

g) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered,
will have restrictions upon resale imposed by state and federal securities laws. 
  
 h) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall
operate as a waiver of such right 
  

 C-11 

 or otherwise prejudice Holder’s rights, powers or remedies, notwithstanding the fact that all rights
hereunder terminate on the Termination Date. If the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to Holder such amounts as shall be
sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of
its rights, powers or remedies hereunder. 
  
 i) Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Purchase Agreement. 

 
 j) Limitation of Liability. No provision hereof,
in the absence of any affirmative action by Holder to exercise this Warrant or purchase Warrant Shares, and no enumeration herein of the rights or privileges of Holder, shall give rise to any liability of Holder for the purchase price of any Common
Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company. 
  
 k) Remedies. Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to
waive the defense in any action for specific performance that a remedy at law would be adequate. 
  
 l) Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby
shall inure to the benefit of and be binding upon the successors of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of all Holders from time to time of this Warrant
and shall be enforceable by any such Holder or holder of Warrant Shares. 
  
 m) Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and
the Holder. 
  
 n) Severability.
Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant. 
  
 o) Headings. The headings used in this Warrant are for the convenience of reference only and shall
not, for any purpose, be deemed a part of this Warrant. 
  
 ******************** 
  

 C-12 

 IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly
authorized. 
  
 Dated: September 8, 2004 
  

			
	HARTVILLE GROUP, INC.
		
	By:	 	  

	 Name:
 Title:
	 	 

  

 C-13 

 NOTICE OF EXERCISE 
  
 To: HARTVILLE GROUP, INC. 
  
 (1) The undersigned hereby elects to purchase              Warrant Shares of the Company
pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any. 
  
 (2) Payment shall take the form of (check applicable box): 
  
 [    ] in lawful money of the United States; or 
  
 [    ] the cancellation of such number of Warrant
Shares as is necessary, in accordance with the formula set forth in subsection 3(d), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 3(d).

  
 (3) Please issue a certificate or certificates representing
said Warrant Shares in the name of the undersigned or in such other name as is specified below: 
  
 _____________________________ 
  
 The Warrant Shares shall be delivered to the following: 
  
 _____________________________ 
  
 _____________________________ 
  
 _____________________________ 
  
  
 (4) Accredited Investor. The undersigned is an “accredited
investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended. 
  

			
	[PURCHASER]
		
	By:	 	  

	Name:	 	 
	Title:	 	 
		
	Dated:	 	 

  

 C-14 

 ASSIGNMENT FORM 
  
 (To assign the foregoing warrant, execute 
 this form and supply required information. 
 Do not use this form to exercise the warrant.) 
  
 FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby
are hereby assigned to 
  
 ______________________________whose address is

  
 ______________________________________________________. 
  
 ______________________________________________________ 
  
 Dated:
            ,          
  
 Holder’s Signature:   ____________________ 
  
 Holder’s Address:     ____________________ 
  
                                   ____________________ 
  
 Signature Guaranteed:
                         
  
 NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change
whatsoever, and must be guaranteed by a bank or trust company. Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant. 
  

 C-15 

 EXHIBIT D 
  

FORM OF OPINION OF THE COMPANY’S INDEPENDENT COUNSEL 
  
 [Date]                                      
                                        
   
  
 [Purchasers] 
  

	Re:	Securities Purchase Agreement 

  
 Ladies and Gentlemen: 
  
 This opinion is furnished to you pursuant to the Securities Purchase Agreement by and among the purchasers signatory thereto (the
“Purchasers”) and Hartville Group, Inc. a Nevada corporation (the “Company”), dated as of September 8, 2004 (the “Purchase Agreement”), which provides for the issuance and sale by the Company of up
to $3,000,000 principal amount of Debentures and Warrants to purchase shares of the Company’s Common Stock. All terms used herein have the meanings defined for them in the Purchase Agreement unless otherwise defined herein. 
  
 We have acted as counsel for the Company in connection with the negotiation
of the Purchase Agreement, the Registration Rights Agreement, the Debentures and the Warrants (the Purchase Agreement, the Registration Rights Agreement, the Debentures and the Warrants, collectively the “Agreements”). As counsel,
we have made such legal and factual examinations and inquiries as we have deemed advisable or necessary for the purpose of rendering this opinion. In addition, we have examined, among other things, originals or copies of such corporate records of
the Company, certificates of public officials and such other documents and questions of law that we consider necessary or advisable for the purpose of rendering this opinion. In such examination we have assumed the genuineness of all signatures on
original documents, the authenticity and completeness of all documents submitted to us as originals, the conformity to original documents of all copies submitted to us as copies thereof, the legal capacity of natural persons, and the due execution
and delivery of all documents (except as to due execution and delivery by the Company) where due execution and delivery are a prerequisite to the effectiveness thereof. 
  
 As used in this opinion, the expression “to our knowledge” refers to the current actual knowledge of the attorneys
of this firm who have worked on matters for the Company solely in connection with the Agreements and the Warrants and the transactions contemplated thereby, and without any independent investigation of any underlying facts or circumstances.

  
 For purposes of this opinion, we have assumed that you have
all requisite power and authority, and have taken any and all necessary corporate action, to execute and deliver the Agreements, and we are assuming that the representations and warranties made by each Purchaser in the Agreements and pursuant
thereto are true and correct. 
  

 D-1 

 Based upon and subject to the foregoing, we are of the opinion that: 
  
 1. The Company is a corporation duly organized, validly existing and in good
standing under the laws of Nevada and has all requisite corporate power and authority to carry on its business and to own, lease and operate its properties and assets as described in the Company’s SEC Reports. To our knowledge, the Company does
not have any subsidiaries and does not own more than fifty percent (50%) of the outstanding capital stock of or control any other business entity other than as disclosed in the SEC Reports. 
  
 2. The Company has the requisite corporate power and authority to enter into
and perform its obligations under the Agreements and to issue the Debentures and Warrants and the Underlying Shares. The execution and delivery of the Agreements by the Company and the consummation by it of the transactions contemplated thereby have
been duly authorized by all necessary corporate action and no further consent or authorization of the Company or its Board of Directors or stockholders is required, and the issuance of the Underlying Shares will not violate the corporate governance
rules of the Trading Market. Each of the Agreements has been duly executed and delivered, and the Debentures and Warrants have been duly executed, issued and delivered by the Company and each of the Agreements, the Debentures and the Warrants
constitute valid and binding obligations of the Company enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, or similar laws relating to, or
affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application. 
  
 3. The execution, delivery and performance of the Agreements by the Company and the consummation by the Company of the transactions contemplated thereby,
including, without limitation, the issuance of the Debentures, the Warrants and the Underlying Shares, do not and will not (i) result in a violation of the Company’s Certificate of Incorporation or By-Laws; (ii) conflict with, or constitute a
material default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any material agreement, indenture, instrument or any
“lock-up”, refusal or similar provision of any underwriting or similar agreement to which the Company is a party; or (iii) result in a violation of any federal or state law, rule or regulation applicable to the Company or by which any
property or asset of the Company is bound or affected, except for such violations as would not, individually or in the aggregate, have a Material Adverse Effect. To our knowledge, the Company is not in violation of any terms of its Certificate of
Incorporation or Bylaws. 
  
 4. The issuance of the Debentures,
the Warrants, and the Underlying Shares in accordance with the Purchase Agreement will be exempt from registration under the Securities Act of 1933, as amended. When so issued, the Debentures, the Warrants and, upon conversion of the Debentures or
exercise of the Warrants in accordance with their respective terms, the Underlying Shares, will be duly and validly issued, fully paid and nonassessable, and free of any liens, encumbrances and preemptive or similar rights contained in the
Company’s Certificate of Incorporation or Bylaws or, to our knowledge, in any agreement to which the Company is party. 
  
 5. We have not been engaged to devote substantive attention to any claims, actions, suits, proceedings or investigations that are pending against the
Company or its properties, or against any officer or director of the Company in his or her capacity as such. To our knowledge, the Company is not a party to or subject to the provisions of any order, writ, injunction, judgment or decree of any court
or government agency or instrumentality. 
  

 D-2 

 6. The Company and its Board of Directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s Certificate of Incorporation (or similar charter
documents) or the laws of its state of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and the Company fulfilling their obligations or exercising their rights under the Transaction Documents,
including without limitation as a result of the Company’s issuance of the Securities and the Purchasers’ ownership of the Securities. 
  
 7. The authorized capital stock of the Company consists of 50,000,000 shares of Common Stock, $001 par value, of which 13,890,987 shares are issued and
outstanding and no shares of Preferred Stock. 
  
 This opinion is
furnished to the Purchasers for their benefit in connection with the transactions described above and may not be relied upon by any other person or for any other purpose without our prior written consent, except that the Company’s transfer
agent, Liberty Stock Transfer, or its successor agent, and the Purchasers’ respective brokers, or their successor agents, may rely upon this opinion in acting as transfer agent with respect to the transactions contemplated by the Agreements.

  
 Very truly
yours,                                       
      
  

 D-3

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