EXHIBIT 10.1*




 





 


AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT


 


dated as of June 10, 2008


 


among


 


WINMARK CORPORATION,


as the Company and a Loan Party,


 


THE SUBSIDIARIES OF THE COMPANY,


as Loan Parties,


 


EACH LENDER PARTY HERETO,


 


LASALLE BANK NATIONAL ASSOCIATION,


as a Lender and as Administrative Agent for
the Lenders,


 


and


 


THE PRIVATEBANK AND TRUST COMPANY,


as a Lender and as Documentation Agent




 





 






* Material has been omitted pursuant to a request for confidential
treatment and the material has been filed separately.


 

















 


	
  SECTION 1

  	
  DEFINITIONS

  	
  1

  
	
  1.1

  	
   

  	
  Definitions

  	
  1

  
	
  1.2

  	
   

  	
  Other
  Interpretive Provisions

  	
  18

  
	
  1.3

  	
   

  	
  Letter of Credit
  Amounts

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2

  	
  COMMITMENTS OF
  THE LENDERS; BORROWING, CONVERSION AND LETTER OF CREDIT 

  	
  18

  
	
  PROCEDURES

  	
   

  
	
  2.1

  	
   

  	
  Commitments

  	
  18

  
	
   

  	
   

  	
  2.1.1

  	
  L/C Commitment

  	
  18

  
	
   

  	
   

  	
  2.1.2

  	
  Loan Procedures.

  	
  19

  
	
  2.2

  	
   

  	
  Loan Commitment

  	
  19

  
	
   

  	
   

  	
  2.2.1

  	
  Various Types of
  Loans

  	
  19

  
	
   

  	
   

  	
  2.2.2

  	
  Borrowing
  Procedures

  	
  19

  
	
   

  	
   

  	
  2.2.3

  	
  Conversion and
  Continuation Procedures

  	
  20

  
	
  2.3

  	
   

  	
  Letter of Credit
  Procedures

  	
  21

  
	
   

  	
   

  	
  2.3.1

  	
  L/C Applications

  	
  21

  
	
   

  	
   

  	
  2.3.2

  	
  Reimbursement
  Obligations; Fundings of Participations

  	
  21

  
	
   

  	
   

  	
  2.3.3

  	
  Repayment of
  Participations

  	
  23

  
	
   

  	
   

  	
  2.3.4

  	
  Obligations
  Absolute

  	
  23

  
	
   

  	
   

  	
  2.3.5

  	
  Role of L/C
  Issuer

  	
  24

  
	
   

  	
   

  	
  2.3.6

  	
  Cash Collateral

  	
  24

  
	
   

  	
   

  	
  2.3.7

  	
  Applicability of
  ISP and UCP

  	
  25

  
	
  2.4

  	
   

  	
  Certain
  Conditions

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3

  	
  EVIDENCING OF
  LOANS

  	
  25

  
	
  3.1

  	
   

  	
  Notes

  	
  25

  
	
  3.2

  	
   

  	
  Recordkeeping

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4

  	
  INTEREST

  	
  25

  
	
  4.1

  	
   

  	
  Interest Rates

  	
  25

  
	
  4.2

  	
   

  	
  Interest Payment
  Dates

  	
  26

  
	
  4.3

  	
   

  	
  Setting and
  Notice of LIBOR Rates

  	
  26

  
	
  4.4

  	
   

  	
  Computation of Interest

  	
  26

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5

  	
  FEES.

  	
  26

  
	
  5.1

  	
   

  	
  Letter of Credit
  Fees

  	
  26

  
	
  5.2

  	
   

  	
  Other Fees

  	
  26

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6

  	
  REDUCTION OR
  TERMINATION OF THE REVOLVING COMMITMENT; PREPAYMENTS.

  	
  27

  
	
   

  	
  6.1

  	
  Prepayments

  	
  27

  
	
   

  	
   

  	
  6.1.1

  	
  Voluntary
  Prepayments

  	
  27

  
	
   

  	
   

  	
  6.1.2

  	
  Mandatory
  Prepayments

  	
  27

  
	
   

  	
   

  	
  6.1.3

  	
  Manner of
  Prepayments

  	
  27

  
	
   

  	
  6.2

  	
  Repayments

  	
  28

  
	
   

  	
  6.3

  	
  Reduction of
  Aggregate Commitments

  	
  28

  
						



 

















 


	
  SECTION 7

  	
  MAKING AND
  PRORATION OF PAYMENTS; SETOFF; TAXES

  	
  28

  
	
   

  	
  7.1

  	
  Payments
  Generally; Agent’s Clawback

  	
  28

  
	
   

  	
   

  	
  7.1.1

  	
  General

  	
  28

  
	
   

  	
   

  	
  7.1.2

  	
  Fundings by
  Lenders; Payments by Loan Parties

  	
  28

  
	
   

  	
   

  	
  7.1.3

  	
  Failure to
  Satisfy Conditions Precedent

  	
  29

  
	
   

  	
   

  	
  7.1.4

  	
  Obligations of
  Lenders Several

  	
  29

  
	
   

  	
  7.2

  	
  Sharing of Payments

  	
  29

  
	
   

  	
  7.3

  	
  Application of
  Certain Payments

  	
  30

  
	
   

  	
  7.4

  	
  Due Date
  Extension

  	
  30

  
	
   

  	
  7.5

  	
  Setoff

  	
  30

  
	
   

  	
  7.6

  	
  Taxes

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8

  	
  INCREASED COSTS;
  SPECIAL PROVISIONS FOR LIBOR LOANS.

  	
  31

  
	
   

  	
  8.1

  	
  Increased Costs

  	
  31

  
	
   

  	
  8.2

  	
  Basis for
  Determining Interest Rate Inadequate or Unfair

  	
  32

  
	
   

  	
  8.3

  	
  Changes in Law
  Rendering LIBOR Loans Unlawful

  	
  32

  
	
   

  	
  8.4

  	
  Funding Losses

  	
  32

  
	
   

  	
  8.5

  	
  Right of the
  Lenders to Fund through Other Offices

  	
  33

  
	
   

  	
  8.6

  	
  Discretion of
  the Lenders as to Manner of Funding

  	
  33

  
	
   

  	
  8.7

  	
  Mitigation of
  Circumstances

  	
  33

  
	
   

  	
  8.8

  	
  Conclusiveness
  of Statements; Survival of Provisions

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
  33

  
	
   

  	
  9.1

  	
  Organization

  	
  34

  
	
   

  	
  9.2

  	
  Authorization;
  No Conflict

  	
  34

  
	
   

  	
  9.3

  	
  Validity and
  Binding Nature

  	
  34

  
	
   

  	
  9.4

  	
  Financial
  Condition

  	
  34

  
	
   

  	
  9.5

  	
  No Material
  Adverse Change

  	
  34

  
	
   

  	
  9.6

  	
  Litigation and
  Contingent Liabilities

  	
  34

  
	
   

  	
  9.7

  	
  Ownership of
  Properties; Liens

  	
  34

  
	
   

  	
  9.8

  	
  Equity
  Ownership; Subsidiaries

  	
  35

  
	
   

  	
  9.9

  	
  Pension Plans

  	
  35

  
	
   

  	
  9.10

  	
  Investment
  Company Act

  	
  36

  
	
   

  	
  9.11

  	
  Public Utility
  Holding Company Act

  	
  36

  
	
   

  	
  9.12

  	
  Regulation U

  	
  36

  
	
   

  	
  9.13

  	
  Taxes; Tax
  Shelter Registration

  	
  36

  
	
   

  	
  9.14

  	
  Solvency, etc.

  	
  36

  
	
   

  	
  9.15

  	
  Environmental
  Matters

  	
  36

  
	
   

  	
  9.16

  	
  Insurance

  	
  37

  
	
   

  	
  9.17

  	
  Real Property

  	
  37

  
	
   

  	
  9.18

  	
  Information

  	
  37

  
	
   

  	
  9.19

  	
  Intellectual
  Property

  	
  37

  
	
   

  	
  9.20

  	
  Burdensome
  Obligations

  	
  37

  
	
   

  	
  9.21

  	
  Labor Matters

  	
  38

  
	
   

  	
  9.22

  	
  No Default

  	
  38

  
	
   

  	
  9.23

  	
  Accounts

  	
  38

  
	
   

  	
  9.24

  	
  Anti-Terrorism
  Law Compliance

  	
  38

  



 


ii

















 


	
  SECTION 10

  	
  AFFIRMATIVE
  COVENANTS

  	
  38

  
	
   

  	
  10.1

  	
  Reports,
  Certificates and Other Information

  	
  38

  
	
   

  	
   

  	
  10.1.1

  	
  Annual Report

  	
  38

  
	
   

  	
   

  	
  10.1.2

  	
  Monthly Reports

  	
  39

  
	
   

  	
   

  	
  10.1.3

  	
  Quarterly
  Reports

  	
  39

  
	
   

  	
   

  	
  10.1.4

  	
  Compliance
  Certificates

  	
  39

  
	
   

  	
   

  	
  10.1.5

  	
  Reports to the
  SEC and to Shareholders

  	
  39

  
	
   

  	
   

  	
  10.1.6

  	
  Notice of
  Default, Litigation and ERISA Matters

  	
  39

  
	
   

  	
   

  	
  10.1.7

  	
  Borrowing Base
  Certificates

  	
  40

  
	
   

  	
   

  	
  10.1.8

  	
  Management
  Reports

  	
  40

  
	
   

  	
   

  	
  10.1.9

  	
  Subordinated
  Debt Notices

  	
  40

  
	
   

  	
   

  	
  10.1.10

  	
  Other
  Information

  	
  41

  
	
   

  	
  10.2

  	
  Books, Records
  and Inspections

  	
  41

  
	
   

  	
  10.3

  	
  Maintenance of
  Property; Insurance

  	
  41

  
	
   

  	
  10.4

  	
  Compliance with
  Laws; Payment of Taxes and Liabilities

  	
  41

  
	
   

  	
  10.5

  	
  Maintenance of
  Existence, etc.

  	
  42

  
	
   

  	
  10.6

  	
  Use of Proceeds

  	
  42

  
	
   

  	
  10.7

  	
  Employee Benefit
  Plans

  	
  42

  
	
   

  	
  10.8

  	
  Environmental
  Matters

  	
  42

  
	
   

  	
  10.9

  	
  Tax Shelter
  Registration

  	
  43

  
	
   

  	
  10.10

  	
  Further
  Assurances

  	
  43

  
	
   

  	
  10.11

  	
  Banking
  Relationship

  	
  43

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 11

  	
  NEGATIVE
  COVENANTS

  	
  43

  
	
   

  	
  11.1

  	
  Debt

  	
  43

  
	
   

  	
  11.2

  	
  Liens

  	
  44

  
	
   

  	
  11.3

  	
  Operating Leases

  	
  45

  
	
   

  	
  11.4

  	
  Restricted
  Payments

  	
  45

  
	
   

  	
  11.5

  	
  Mergers,
  Consolidations, Sales

  	
  45

  
	
   

  	
  11.6

  	
  Modification of
  Organizational Documents

  	
  47

  
	
   

  	
  11.7

  	
  Affiliate
  Transactions

  	
  47

  
	
   

  	
  11.8

  	
  Unconditional
  Purchase Obligations

  	
  47

  
	
   

  	
  11.9

  	
  Inconsistent
  Agreements

  	
  47

  
	
   

  	
  11.10

  	
  Business
  Activities

  	
  47

  
	
   

  	
  11.11

  	
  Subordinated
  Debt Documents

  	
  47

  
	
   

  	
  11.12

  	
  Fiscal Year

  	
  48

  
	
   

  	
  11.13

  	
  Control
  Agreements

  	
  48

  
	
   

  	
  11.14

  	
  Tangible Net
  Worth

  	
  48

  
	
   

  	
  11.15

  	
  Debt Service
  Coverage

  	
  48

  
	
   

  	
  11.16

  	
  Maximum Leverage

  	
  48

  
	
   

  	
  11.17

  	
  Eligible Leases

  	
  48

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 12

  	
  EFFECTIVENESS;
  CONDITIONS OF LENDING, ETC.

  	
  48

  
	
   

  	
  12.1

  	
  Initial Credit
  Extension

  	
  48

  
	
   

  	
   

  	
  12.1.1

  	
  Notes

  	
  48

  
	
   

  	
   

  	
  12.1.2

  	
  Authorization
  Documents

  	
  48

  
	
   

  	
   

  	
  12.1.3

  	
  Consents, etc.

  	
  49

  



 


iii

















 


	
   

  	
   

  	
  12.1.4

  	
  Security
  Documents

  	
  49

  
	
   

  	
   

  	
  12.1.5

  	
  Financing
  Statements

  	
  49

  
	
   

  	
   

  	
  12.1.6

  	
  Opinions of
  Counsel

  	
  49

  
	
   

  	
   

  	
  12.1.7

  	
  Insurance

  	
  49

  
	
   

  	
   

  	
  12.1.8

  	
  Payment of Fees

  	
  49

  
	
   

  	
   

  	
  12.1.9

  	
  Search Results;
  Lien Terminations

  	
  49

  
	
   

  	
   

  	
  12.1.10

  	
  Filings,
  Registrations and Recordings

  	
  50

  
	
   

  	
   

  	
  12.1.11

  	
  Borrowing Base
  Certificate

  	
  50

  
	
   

  	
   

  	
  12.1.12

  	
  Closing
  Certificate

  	
  50

  
	
   

  	
   

  	
  12.1.13

  	
  Other Documents

  	
  50

  
	
   

  	
  12.2

  	
  Conditions

  	
  50

  
	
   

  	
   

  	
  12.2.1

  	
  Compliance with
  Warranties, No Default, etc.

  	
  50

  
	
   

  	
   

  	
  12.2.2

  	
  Confirmatory
  Certificate

  	
  50

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 13

  	
  EVENTS OF
  DEFAULT AND THEIR EFFECT

  	
  50

  
	
   

  	
  13.1

  	
  Events of
  Default

  	
  50

  
	
   

  	
   

  	
  13.1.1

  	
  Non-Payment of
  the Loans, etc.

  	
  51

  
	
   

  	
   

  	
  13.1.2

  	
  Non-Payment of
  Other Debt

  	
  51

  
	
   

  	
   

  	
  13.1.3

  	
  Other Material
  Obligations

  	
  51

  
	
   

  	
   

  	
  13.1.4

  	
  Bankruptcy,
  Insolvency, etc.

  	
  51

  
	
   

  	
   

  	
  13.1.5

  	
  Non-Compliance
  with Loan Documents

  	
  51

  
	
   

  	
   

  	
  13.1.6

  	
  Representations;
  Warranties

  	
  51

  
	
   

  	
   

  	
  13.1.7

  	
  Pension Plans

  	
  52

  
	
   

  	
   

  	
  13.1.8

  	
  Judgments

  	
  52

  
	
   

  	
   

  	
  13.1.9

  	
  Invalidity of
  Collateral Documents, etc.

  	
  52

  
	
   

  	
   

  	
  13.1.10

  	
  Invalidity of
  Subordination Provisions, etc.

  	
  52

  
	
   

  	
   

  	
  13.1.11

  	
  Change of
  Control

  	
  52

  
	
   

  	
   

  	
  13.1.12

  	
  Material Adverse
  Effect

  	
  52

  
	
   

  	
  13.2

  	
  Effect of Event
  of Default

  	
  52

  
	
   

  	
  13.3

  	
  Application of
  Funds

  	
  53

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 14

  	
  ADMINISTRATIVE
  AGENT

  	
  54

  
	
   

  	
  14.1

  	
  Appointment and
  Authorization of Administrative Agent

  	
  54

  
	
   

  	
  14.2

  	
  Rights as a
  Lender

  	
  54

  
	
   

  	
  14.3

  	
  Exculpatory
  Provisions

  	
  54

  
	
   

  	
  14.4

  	
  Reliance by
  Administrative Agent

  	
  55

  
	
   

  	
  14.5

  	
  Delegation of
  Duties

  	
  55

  
	
   

  	
  14.6

  	
  Resignation of
  Agent

  	
  56

  
	
   

  	
  14.7

  	
  Non-Reliance on
  Agent and Other Lenders

  	
  56

  
	
   

  	
  14.8

  	
  No Other Duties,
  Etc

  	
  56

  
	
   

  	
  14.9

  	
  Administrative
  Agent May File Proofs of Claim

  	
  57

  
	
   

  	
  14.10

  	
  Collateral
  Matters

  	
  57

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 15

  	
  THE LOAN PARTIES

  	
  59

  
	
   

  	
  15.1

  	
  Appointment of
  the Company

  	
  59

  
	
   

  	
  15.2

  	
  Relationship
  Among the Loan Parties

  	
  59

  



 


iv

















 


	
  SECTION 16

  	
  GENERAL

  	
  62

  
	
   

  	
  16.1

  	
  Waiver,
  Amendments, Etc

  	
  62

  
	
   

  	
  16.2

  	
  Confirmations

  	
  63

  
	
   

  	
  16.3

  	
  Notices

  	
  63

  
	
   

  	
  16.4

  	
  Computations

  	
  63

  
	
   

  	
  16.5

  	
  Expenses,
  Indemnity, Damage Waiver

  	
  64

  
	
   

  	
  16.6

  	
  Payments Set
  Aside

  	
  65

  
	
   

  	
  16.7

  	
  Successors and
  Assigns

  	
  66

  
	
   

  	
  16.8

  	
  GOVERNING
  LAW

  	
  66

  
	
   

  	
  16.9

  	
  Confidentiality

  	
  67

  
	
   

  	
  16.10

  	
  Severability

  	
  67

  
	
   

  	
  16.11

  	
  Nature of
  Remedies

  	
  67

  
	
   

  	
  16.12

  	
  Entire Agreement

  	
  68

  
	
   

  	
  16.13

  	
  Counterparts

  	
  68

  
	
   

  	
  16.14

  	
  Successors and
  Assigns

  	
  68

  
	
   

  	
  16.15

  	
  Captions

  	
  68

  
	
   

  	
  16.16

  	
  Nonliability of
  Agent and each Lender

  	
  68

  
	
   

  	
  16.17

  	
  FORUM
  SELECTION AND CONSENT TO JURISDICTION

  	
  69

  
	
   

  	
  16.18

  	
  WAIVER
  OF JURY TRIAL

  	
  69

  
	
   

  	
  16.19

  	
  Effect of
  Existing Credit Agreement and Existing Collateral Documents

  	
  69

  



 


v

















 


SCHEDULES


	
  SCHEDULE 2.1

  	
  Commitments

  
	
  SCHEDULE 5.2

  	
  Prepayment Consideration Calculation

  
	
  SCHEDULE 9.6

  	
  Litigation and Contingent Liabilities

  
	
  SCHEDULE 9.7

  	
  Ownership of Properties; Liens

  
	
  SCHEDULE 9.8

  	
  Subsidiaries

  
	
  SCHEDULE 9.17

  	
  Real Property

  
	
  SCHEDULE 9.23

  	
  Accounts

  
	
  SCHEDULE 11.7

  	
  Affiliate Transactions

  



 


EXHIBITS


 


	
  EXHIBIT A

  	
  Form of Note

  
	
  EXHIBIT B

  	
  Form of Compliance Certificate

  
	
  EXHIBIT C

  	
  Form of Borrowing Base Certificate

  
	
  EXHIBIT D

  	
  Form of Master Letter of Credit Agreement

  
	
  EXHIBIT E

  	
  Form of Notice of Borrowing

  
	
  EXHIBIT F

  	
  Form of Notice of Conversion/Continuation

  



 
















 


AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT


 


Dated as of June 10, 2008


 


WINMARK CORPORATION  (the “Company”), the Subsidiaries of the Company
that are or may from time to time become parties hereto (together with the
Company and their respective successors and assigns, the “Loan Parties”),
each lender from time to time party hereto (collectively, the “Lenders”
and individually, a “Lender”), LASALLE BANK NATIONAL ASSOCIATION (“LaSalle”),
as Administrative Agent for the Lenders, and THE PRIVATEBANK AND TRUST COMPANY,
as Documentation Agent, hereby agree as follows:


RECITALS


 


WHEREAS, the Loan Parties
and LaSalle have entered into a 364-Day Revolving Credit Agreement dated as of September 30,
2004, as amended by an Amendment to 364-Day Revolving Credit Agreement dated as
of August 26, 2005, a Second Amendment to 364-Day Revolving Credit
Agreement dated as of March 31, 2006, a Third Amendment to 364-Day
Revolving Credit Agreement dated as of May 19, 2006, a Fourth Amendment to
364-Day Revolving Credit Agreement dated as of August 15, 2007, and a
Fifth Amendment to 364-Day Revolving Credit Agreement dated as of November 12,
2007 (as amended, the “Existing Credit Agreement”); and


 


WHEREAS, the Loan Parties
and LaSalle have agreed to amend and restate the Existing Credit Agreement
pursuant to the terms and conditions set forth in this Amended and Restated
Revolving Credit Agreement (this “Agreement”).


 


NOW THEREFORE, in consideration of the mutual agreements herein
contained, the parties hereto agree that the Existing Credit Agreement is
hereby amended and restated to read in its entirety as follows:


 


SECTION 1                                   DEFINITIONS.


 


1.1                                 Definitions.
When used herein the following terms shall have the following meanings:


 


“Account”:  As defined in the UCC.


 


“Account Debtor”:  As
defined in the UCC.


 


“Acquisition”:  Any transaction or series of related
transactions for the purpose of or resulting, directly or indirectly, in (a) the
acquisition of all or substantially all of the assets of a Person, or of all or
substantially all of any business or division of a Person, (b) the
acquisition of all or any portion of the Capital Securities of any Person, (c) a
merger or consolidation or any other combination with another Person (other
than a Person that is already a Subsidiary), or (d) any other Investment
in a Person; provided, however, that an Investment in
publicly-traded securities of a Person shall not constitute an Acquisition so
long as such Investment does not 


 

















 


result in (i) the
acquisition of all or substantially all of the assets or Capital Securities of
such Person, or (ii) a merger, consolidation or other combination with
such Person.


 


“Administrative Agent” or “Agent”:  LaSalle in its capacity as administrative
agent under any of the Loan Documents, or any successor administrative agent.


 


“Administrative Agent’s Office”: 
Agent’s address and, as appropriate, account as set forth on the
signature page or Schedule 2.1 to this Agreement, or such other address or
account as Agent may from time to time notify the Company and the Lenders in
writing (which for purposes of this provision may include a notice by e-mail).


 


“Affected Loan”:  As
defined in Section 8.3.


 


“Affiliate”:  With respect to any Person, (a) any
other Person which, directly or indirectly, controls or is controlled by or is
under common control with such Person, (b) any officer or director of such
Person and (c) with respect to any Lender, any entity administered or
managed by such Lender or an Affiliate or investment advisor thereof and which
is engaged in making, purchasing, holding or otherwise investing in commercial
loans.  A Person shall be deemed to be “controlled
by” any other Person if such Person possesses, directly or indirectly, power to
vote 5% or more of the securities (on a fully diluted basis) having ordinary
voting power for the election of directors or managers or power to direct or
cause the direction of the management and policies of such Person whether by
contract or otherwise.  Unless expressly
stated otherwise herein, no Lender shall be deemed an Affiliate of any Loan
Party.


 


 “Aggregate Commitments”:  The Commitments of all Lenders, as reduced
from time to time pursuant to Section 6.3.


 


“Agreement”:  As defined
in the Recitals.


 


“Applicable Margin”:  For
any day, a rate per annum of (i) for LIBOR Loans, 2.00%, (ii) for
Base Rate Loans, 0.00% or (iii) for Fixed Rate Loans, 2.00%.


 


“Applicable Percentage”: 
With respect to any Lender at any time, the percentage (carried out to
the ninth decimal place) of the Aggregate Commitments represented by such
Lender’s Commitment at such time.  If the
commitment of each Lender to make Loans and the obligation of the L/C Issuer to
make L/C Credit Extensions have been terminated pursuant to Section 13.2
or if the Aggregate Commitments have expired, then the Applicable Percentage of
each Lender shall be determined based on the Applicable Percentage of such
Lender most recently in effect, giving effect to any subsequent
assignments.  The initial Applicable
Percentage of each Lender is set forth opposite the name of such Lender on
Schedule 2.1 of this Agreement or in the Assignment and Assumption pursuant to
which such Lender becomes a party hereto, as applicable.


 


“Asset Disposition”:  The sale, lease, assignment or other transfer
for value (each, a “Disposition”) by any Loan Party to any Person (other
than a Loan Party) of any asset or right of such Loan Party (including, the
loss, destruction or damage of any thereof or any actual or threatened (in
writing to any Loan Party) condemnation, confiscation, requisition, seizure or 


 


2

















 


taking thereof) other
than (a) the Disposition of any asset which is to be replaced, and is in
fact replaced, within 30 days with another asset performing the same or a
similar function and (b) the sale or lease of inventory in the ordinary
course of business.


 


“Attorney Costs”:  With respect to any Person, all reasonable
fees and charges of any counsel to such Person, the reasonable allocable cost
of internal legal services of such Person, all reasonable disbursements of such
internal counsel and all court costs and similar legal expenses.


 


“Bank Product
Agreements”:  Those certain cash
management service agreements entered into from time to time between any Loan
Party and any Lender or its Affiliates in connection with any of the Bank
Products.


 


“Bank Product
Obligations”:  All obligations,
liabilities, contingent reimbursement obligations, fees, and expenses owing by
the Loan Parties to the Lenders or their Affiliates pursuant to or evidenced by
the Bank Product Agreements and irrespective of whether for the payment of
money, whether direct or indirect, absolute or contingent, due or to become
due, now existing or hereafter arising, and including all such amounts that a
Loan Party is obligated to reimburse to any Lender as a result of such Lender
purchasing participations or executing indemnities or reimbursement obligations
with respect to the Bank Products provided to the Loan Parties pursuant to the
Bank Product Agreements.


 


“Bank Products”:  Any service or facility extended to any Loan
Party by any Lender or its Affiliates including:  (a) credit cards, (b) credit card
processing services, (c) debit cards, (d) purchase cards, (e) ACH
Transactions, (f) cash management, including controlled disbursement,
accounts or services, or (g) Hedging Agreements.


 


“Base Rate”:  At any time the greater of (a) the
Federal Funds Rate plus 0.5% and (b) the Prime Rate.


 


“Base Rate Loan”:  Any Loan which bears interest at or by
reference to the Base Rate.


 


“Borrowing Base”:  (a) 90% of the net book value of the
Eligible Leased Assets of the Loan Parties, plus (b) as of the end
of any month, an amount equal to EBITDA of the Company’s franchising and
corporate segments for the twelve consecutive months ended or most recently
ended on such month times two (2).


 


“Borrowing Base
Certificate”:  A certificate
substantially in the form of Exhibit C.


 


“BSA”:  As defined in Section 10.4.


 


“Business Day”:  Any day on which LaSalle is open for
commercial banking business in Minneapolis, Minnesota and Chicago, Illinois
and, in the case of a Business Day which relates to a LIBOR Loan, on which
dealings are carried on in the London interbank eurodollar market.


 


“Capital Expenditures”:  All expenditures which, in accordance with
GAAP, would be required to be capitalized and shown on the consolidated balance
sheet of the Company, including expenditures in respect of Capital Leases, but
excluding expenditures made in connection with the replacement, substitution or
restoration of assets to the extent financed 


 


3

















 


(a) from insurance
proceeds (or other similar recoveries) paid on account of the loss of or damage
to the assets being replaced or restored or (b) with awards of compensation
arising from the taking by eminent domain or condemnation of the assets being
replaced.


 


“Capital Lease”:  With respect to any Person, any lease of (or
other agreement conveying the right to use) any real or personal property by
such Person that, in conformity with GAAP, is accounted for as a capital lease
on the balance sheet of such Person.


 


“Capital Securities”:  With respect to any Person, all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person’s capital, whether now outstanding or
issued or acquired after the Closing Date, including common shares, preferred
shares, membership interests in a limited liability company, limited or general
partnership interests in a partnership or any other equivalent of such
ownership interest.


 


“Capitalized Lease
Obligations”:  As to any Person, all
rental obligations of such Person, as lessee under a Capital Lease which are or
will be required to be capitalized on the books of such Person.


 


“Cash Collateralize”:  To deliver cash collateral to Agent, for the
benefit of the L/C Issuer, to be held as cash collateral for outstanding
Letters of Credit, pursuant to documentation satisfactory to the L/C Issuer.  Derivatives of such term have corresponding
meanings.


 


“Change of Control”:  The occurrence of any of the following
events: (a) any Person or two or more Persons acting in concert acquiring
beneficial ownership (within the meaning of Rule 13d-3 of the Securities
and Exchange Commission under the Securities Exchange Act of 1934), directly or
indirectly, of Capital Securities of the Company representing 50% or more of
the combined voting power of all Capital Securities of the Company entitled to
vote in the election of directors; (b) any Person or two or more Persons
acting in concert acquiring by contract or otherwise, or entering into a
contract or arrangement which upon consummation will result in its or their
acquisition of, control over Capital Securities of the Company representing 50%
or more of the combined voting power of all Capital Securities of the Company
entitled to vote in the election of directors; or (c) the Company shall
cease to, directly or indirectly, own and control 100% of each class of the
outstanding Capital Securities of each Subsidiary.


 


“Closing Date”:  As
defined in Section 12.1.


 


“Code”:  The Internal
Revenue Code of 1986.


 


“Collateral Access
Agreement”:  An agreement in form and
substance reasonably satisfactory to Agent pursuant to which a mortgagee or
lessor of real property on which collateral is stored or otherwise located, or
a warehouseman, processor or other bailee of Inventory or other property owned
by any Loan Party, acknowledges the Liens of Agent and waives any Liens held by
such Person on such property, and, in the case of any such agreement with a
mortgagee or lessor, permits Agent reasonable access to and use of such real
property following the occurrence and during the continuance of an Event of
Default to assemble, complete and sell any collateral stored or otherwise
located thereon.


 


4

















 


“Collateral Documents”:  Collectively, the Security Agreement, the
Pledge Agreement, each Collateral Access Agreement, each UCC-1 financing
statement, each Control Agreement and any other agreement or instrument
pursuant to which the Company, any other Loan Party or any other Person grants
or purports to grant collateral to Agent or otherwise relates to such
collateral.


 


“Commitment”:  As to each
Lender, its obligation to (a) make Loans to the Company pursuant to Section 2.1.1,
and (b) purchase participations in L/C Obligations, in an aggregate
principal amount at any one time outstanding not to exceed the amount set forth
opposite such Lender’s name on Schedule 2.1 or in the Assignment and Assumption
pursuant to which such Lender becomes a party hereto, as applicable, as such
amount may be adjusted from time to time in accordance with this Agreement.


 


“Company”:  As defined in
the Preamble.


 


“Compliance Certificate”: 
A Compliance Certificate in substantially the form of Exhibit B.


 


“Contingent Liability”:  With respect to any Person, each obligation
and liability of such Person and all such obligations and liabilities of such
Person incurred pursuant to any agreement, undertaking or arrangement by which
such Person:  (a) guarantees,
endorses or otherwise becomes or is contingently liable upon (by direct or
indirect agreement, contingent or otherwise, to provide funds for payment, to
supply funds to, or otherwise to invest in, a debtor, or otherwise to assure a
creditor against loss) the indebtedness, dividend, obligation or other
liability of any other Person in any manner (other than by endorsement of
instruments in the course of collection), including any indebtedness, dividend
or other obligation which may be issued or incurred at some future time; (b) guarantees
the payment of dividends or other distributions upon the Capital Securities of
any other Person; (c) undertakes or agrees (whether contingently or
otherwise):  (i) to purchase,
repurchase, or otherwise acquire any indebtedness, obligation or liability of
any other Person or any or any property or assets constituting security
therefor, (ii) to advance or provide funds for the payment or discharge of
any indebtedness, obligation or liability of any other Person (whether in the
form of loans, advances, stock purchases, capital contributions or otherwise),
or to maintain solvency, assets, level of income, working capital or other
financial condition of any other Person, or (iii) to make payment to any
other Person other than for value received; (d) agrees to lease property
or to purchase securities, property or services from such other Person with the
purpose or intent of assuring the owner of such indebtedness or obligation of
the ability of such other Person to make payment of the indebtedness or
obligation; (e) to induce the issuance of, or in connection with the
issuance of, any letter of credit for the benefit of such other Person; or (f) undertakes
or agrees otherwise to assure a creditor against loss.  The amount of any Contingent Liability shall
(subject to any limitation set forth herein) be deemed to be the outstanding
principal amount (or maximum permitted principal amount, if larger) of the
indebtedness, obligation or other liability guaranteed or supported thereby.


 


“Control Agreement”:  An account control agreement, in form and
substance satisfactory to Agent, among Agent, the applicable Loan Party and the
depository or securities intermediary for any deposit, checking or brokerage
account opened or maintained by a Loan Party.


 


5

















 


“Controlled Group”:  All members of a controlled group of
corporations, all members of a controlled group of trades or businesses
(whether or not incorporated) under common control and all members of an
affiliated service group which, together with the Company or any of its
Subsidiaries, are treated as a single employer under Section 414 of the
Code or Section 4001 of ERISA.


 


 “Debt”: 
With respect to any Person, without duplication, (a) all
indebtedness of such Person, (b) all borrowed money of such Person,
whether or not evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person as lessee under Capital Leases which have been or
should be recorded as liabilities on a balance sheet of such Person in
accordance with GAAP, not including obligations of a Loan Party under
non-recourse discounted leases, (d) all obligations of such Person to pay
the deferred purchase price of property or services (excluding trade accounts
payable in the ordinary course of business), (e) all indebtedness secured
by a Lien on the property of such Person, whether or not such indebtedness
shall have been assumed by such Person; provided that if such Person has
not assumed or otherwise become liable for such indebtedness, such indebtedness
shall be measured at the fair market value of such property securing such
indebtedness at the time of determination, (f) all obligations, contingent
or otherwise, with respect to the face amount of all letters of credit (whether
or not drawn), bankers’ acceptances and similar obligations issued for the
account of such Person (including the Letters of Credit), (g) all Hedging
Obligations of such Person, (h) all Contingent Liabilities of such Person
and (i) all Debt of any partnership of which such Person is a general
partner.


 


“Default Rate”:  A rate of
interest equal to the Loan as of the date of determination (including any
Applicable Margin) plus two percent (2%) (or, in the case of Obligations
not bearing interest, a rate of interest equal to the Base Rate plus two
percent (2%)).


 


“Defaulting Lender”:  Any
Lender that (a) has failed to fund any portion of the Committed Loans or
participations in L/C Obligations required to be funded by it hereunder within
one Business Day of the date required to be funded by it hereunder unless such
failure has been cured, (b) has otherwise failed to pay over to Agent or
any other Lender any other amount required to be paid by it hereunder within
one Business Day of the date when due, unless the subject of a good faith
dispute or unless such failure has been cured, or (c) has been deemed
insolvent or become the subject of a bankruptcy or insolvency proceeding.


 


“Depreciation”:  The total
amounts added to depreciation, amortization, obsolescence, valuation and other
proper reserves, as reflected on the Company’s financial statements and
determined in accordance with GAAP.


 


“Documentation Agent”: 
The PrivateBank and Trust Company in its capacity as documentation
agent.


 


“Dollar” and the
sign “$”:  Lawful money of the
United States of America.


 


“EBITDA”:  For any period, the Company’s and the
Subsidiaries’ “Income from Operations” (as set forth on their consolidated
income statement) plus depreciation, plus amortization, plus
compensation expense related to the granting of stock options.


 


6

















 


“Eligible Leased Assets”:  Each Account and all such Accounts (exclusive
of sales, excise or other similar taxes) owing to a Loan Party that arises
solely from the leasing of Equipment by such Loan Party and that meets each of
the following requirements:


 


(a)                                  it
is genuine in all respects and has arisen in the ordinary course of the Loan
Party’s business from the sale  or lease of
Equipment by such Loan Party;


 


(b)                                 it
is subject to a perfected, first priority Lien in favor of Agent and is not
subject to any other assignment, claim or Lien;


 


(c)                                  it
is the valid, legally enforceable and unconditional obligation of the Account
Debtor with respect thereto, and is not subject to the fulfillment of any
condition whatsoever or any counterclaim, credit (except as provided in
subsection (h) of this definition), trade or volume discount, allowance,
discount, rebate or adjustment by the Account Debtor with respect thereto, or
to any claim by such Account Debtor denying liability thereunder in whole or in
part and the Account Debtor has not refused to accept and/or has not returned
or offered to return any of the Equipment or services which are the subject of
such Account;


 


(d)                                 the
Account Debtor with respect thereto is a resident or citizen of, and is located
within, the United States, unless the lease of Equipment giving rise to such
Account is on letter of credit, banker’s acceptance or other credit support
terms reasonably satisfactory to Agent;


 


(e)                                  it
is not an Account with respect to which possession and/or control of the
Equipment leased giving rise thereto is held, maintained or retained by the
Loan Party (or by any agent or custodian of such Loan Party) for the account
of, or subject to, further and/or future direction from the Account Debtor with
respect thereto;


 


(f)                                    it
has not arisen out of contracts with the United States or any department,
agency or instrumentality thereof, unless the Loan Party  has
assigned its right to payment of such Account to Agent pursuant to the
Assignment of Claims Act of 1940, and evidence (satisfactory to Agent) of such
assignment has been delivered to Agent, or any state, county, city or other
governmental body, or any department, agency or instrumentality thereof;


 


(g)                                 if
the Loan Party maintains a credit limit for an Account Debtor, the aggregate
dollar amount of Accounts due from such Account Debtor, including such Account,
does not exceed such credit limit;


 


(h)                                 if
the Account is evidenced by chattel paper or an instrument, the originals of
such chattel paper or instrument shall have been endorsed and/or assigned and
delivered to Agent or, in the case of electronic chattel paper, shall be in the
control of Agent, in each case in a manner satisfactory to Agent;


 


7

















 


(i)                                     such
Account is evidenced by an invoice delivered to the related Account Debtor and
is not more than ninety (90) days past the due date thereof;


 


(j)                                     it
is not an Account with respect to an Account Debtor that is located in any
jurisdiction which has adopted a statute or other requirement with respect to
which any Person that obtains business from within such jurisdiction must file
a notice of business activities report or make any other required filings in a
timely manner in order to enforce its claims in such jurisdiction’s courts
unless (i) such notice of business activities report has been duly and
timely filed or the Loan Party is exempt from filing such report and has
provided Agent with satisfactory evidence of such exemption or (ii) the
failure to make such filings may be cured retroactively by such Loan Party for
a nominal fee;


 


(k)                                  the
Account Debtor with respect thereto is not an Affiliate of the Loan Party;


 


(l)                                     such
Account does not arise out of a contract or order which, by its terms, forbids
or makes void or unenforceable the assignment thereof by the Loan Party to
Agent and is not unassignable to Agent for any other reason;


 


(m)                               there
is no bankruptcy, insolvency or liquidation proceeding pending by or against
the Account Debtor with respect thereto, nor has the Account Debtor suspended
business, made a general assignment for the benefit of creditors or failed to
pay its debts generally as they come due,
and/or no condition or event has occurred
having a Material Adverse Effect on the Account Debtor which would require the
Accounts of such Account Debtor to be deemed uncollectible in accordance with
GAAP;


 


(n)                                 it
is not owed by an Account Debtor with respect to which twenty five percent
(25.00%) or more of the aggregate amount of outstanding Accounts owed at such
time by such Account Debtor is classified as ineligible under clause (j) of
this definition;


 


(o)                                 if
the aggregate amount of all Accounts owed by the Account Debtor thereon exceeds
twenty five percent (25.00%) of the aggregate amount of all Accounts at such
time, then all Accounts owed by such Account Debtor in excess of such amount
shall be deemed ineligible; and


 


(p)                                 it
does not violate the negative covenants and does satisfy the affirmative
covenants of the Loan Party contained in this Agreement, and it is otherwise
not unacceptable to Agent for any other reason;


 


provided, an Account
which is at any time an Eligible Leased Asset, but which subsequently fails to
meet any of the foregoing requirements, shall forthwith cease to be an Eligible
Leased Asset, until such time that such Account meets all 


 


8

















 


of the foregoing requirements; provided  further, that,
with respect to any Account, if Agent at any time hereafter determines in its
discretion that the prospect of payment or performance by the Account Debtor
with respect thereto is materially impaired for any reason whatsoever, such
Account shall cease to be an Eligible Leased Asset after notice of such
determination is given to the relevant Loan Party; and provided  further,
that Agent shall, notwithstanding the foregoing, have the right, in the reasonable
exercise of its discretion, to establish reserves against the aggregate amount
of the Eligible Leased Assets.


 


“Eligible Leases”:  Leases
of Equipment that generate Eligible Leased Assets.


 


“Environmental Claims”:  All claims, however asserted, by any
governmental, regulatory or judicial authority or other Person alleging
potential liability or responsibility for violation of any Environmental Law,
or for release or injury to the environment.


 


“Environmental Laws”:  All present or future federal, state or local
laws, statutes, common law duties, rules, regulations, ordinances and codes,
together with all administrative or judicial orders, consent agreements,
directed duties, requests, licenses, authorizations and permits of, and
agreements with, any governmental authority, in each case relating to any
matter arising out of or relating to public health and safety, or pollution or
protection of the environment or workplace, including any of the foregoing
relating to the presence, use, production, generation, handling, transport,
treatment, storage, disposal, distribution, discharge, emission, release,
threatened release, control or cleanup of any Hazardous Substance.


 


“ERISA”:  The Employee
Retirement Income Security Act of 1974.


 


“Equipment”:  As defined
in the UCC.


 


“Event of Default”:  Any of the events described in Section 13.1.


 


“Excluded Taxes”:  With respect to each Lender, taxes based
upon, or measured by, such Lender’s (or a branch of such Lender’s) overall net
income, overall net receipts, or overall net profits (including franchise taxes
imposed in lieu of such taxes), but only to the extent such taxes are imposed
by a taxing authority (a) in a jurisdiction in which such Lender is
organized, (b) in a jurisdiction which such Lender’s principal office is
located, or (c) in a jurisdiction in which such Lender’s lending office
(or branch) in respect of which payments under this Agreement are made is
located.


 


“Existing Credit Agreement”: 
As defined in the Recitals.


 


“Federal Funds Rate”:  For
any day, a fluctuating interest rate equal for each day during such period to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of
the quotations for such day on such transactions received by Agent 


 


9

















 


from three Federal funds
brokers of recognized standing selected by Agent.  Agent’s determination of such rate shall be
binding and conclusive absent manifest error.


 


“Fiscal Quarter”:  A fiscal
quarter of a Fiscal Year.


 


“Fiscal Year”:  The fiscal year of the Company and its
Subsidiaries, which period shall be the 12-month period ending on the last
Saturday of each year.  References to a
Fiscal Year with a number corresponding to any calendar year (e.g., “Fiscal
Year 2007”) refer to the Fiscal Year ending on the last Saturday  of such calendar year.


 


“Fixed Rate Loan”:  A Loan which bears interest at or by
reference to the Loan Index Rate.


 


“FRB”:  The Board of Governors of the Federal Reserve
System or any successor thereto.


 


“Funded Debt”:  As to any Person, all Debt of such Person
that matures more than one year from the date of its creation (or is renewable
or extendible, at the option of such Person, to a date more than one year from
such date).


 


“GAAP”:  Generally accepted accounting principles set
forth from time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board (or
agencies with similar functions of comparable stature and authority within the
U.S. accounting profession) and the Securities and Exchange Commission, which
are applicable to the circumstances as of the date of determination.


 


“Group”:  As defined in Section 2.2.1.


 


“Hazardous Substances”:  (a) Any
petroleum or petroleum products, radioactive materials, asbestos in any form
that is or could become friable, urea formaldehyde foam insulation, dielectric
fluid containing levels of polychlorinated biphenyls, radon gas and mold; (b) any
chemicals, materials, pollutant or substances defined as or included in the
definition of “hazardous substances”, “hazardous waste”, “hazardous materials”,
“extremely hazardous substances”, “restricted hazardous waste”, “toxic
substances”, “toxic pollutants”, “contaminants”, “pollutants” or words of
similar import, under any applicable Environmental Law; and (c) any other
chemical, material or substance, the exposure to, or release of which is
prohibited, limited or regulated by any governmental authority or for which any
duty or standard of care is imposed pursuant to, any Environmental Law.


 


“Hedging Agreement”:  Any interest rate, currency or commodity swap
agreement, cap agreement or collar agreement, and any other agreement or
arrangement designed to protect a Person against fluctuations in interest
rates, currency exchange rates or commodity prices.


 


“Hedging Obligation”:  With respect to any Person, any liability of
such Person under any Hedging Agreement. 
The amount of any Person’s obligation in respect of any Hedging
Obligation shall be deemed to be the incremental obligation that would be
reflected in the financial statements of such Person in accordance with GAAP.


 


10

















 


“Interest Period”:  As to
any Fixed Rate Loan, the period commencing on the date such Loan is borrowed or
continued as, or converted into, a Fixed Rate Loan and ending on a date one,
two, three, four or five years thereafter as selected in writing by the
Company.  As to any LIBOR Loan, the
period commencing on the date such Loan is borrowed or continued as, or
converted into, a LIBOR Loan and ending on the date one, two, three or six
months thereafter as selected by the Company pursuant to Section 2.2.2
or 2.2.3, as the case may be; provided that:


 


(a)                                  if
any Interest Period would otherwise end on a day that is not a Business Day,
such Interest Period shall be extended to the following Business Day unless the
result of such extension would be to carry such Interest Period into another
calendar month, in which event such Interest Period shall end on the preceding
Business Day;


 


(b)                                 any
Interest Period that begins on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period
shall end on the last Business Day of the calendar month at the end of such
Interest Period; and


 


(c)                                  the
Company may not select any Interest Period for a Loan which would extend beyond
the scheduled Termination Date.


 


“Inventory”:  As defined in the Security Agreement.


 


“Investment”:  With respect to any Person, any investment in
another Person, whether by acquisition of any Capital Security, by making any
loan or advance, or by making an Acquisition.


 


“LaSalle”:  As defined in
the Preamble.


 


“L/C Advance”:  With respect to each Lender, such Lender’s
funding of its participation in any L/C Borrowing in accordance with its
Applicable Percentage.


 


“L/C Application”:  With respect to any request for the issuance
of a Letter of Credit, a letter of credit application in the form being used by
the L/C Issuer at the time of such request for the type of letter of credit
requested.


 


“L/C Borrowing”:  An
extension of credit resulting from a drawing under any Letter of Credit that
has not been reimbursed on the date when made or refinanced as a Base Rate Loan
in accordance with Section 2.3.2(a) and Section 2.3.2(b).


 


“L/C Credit Extension”: 
With respect to any Letter of Credit, the issuance thereof or extension
of the expiry date thereof, or the increase of the amount thereof.


 


“L/C Fee Rate”:  A rate
per annum of 2%.


 


“L/C Issuer”:  LaSalle, in
its capacity as issuer of the Letters of Credit, or any successor letter of
credit issuer hereunder.


 


11

















 


“L/C Obligations”:  As at
any date of determination, the aggregate amount available to be drawn under all
outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts,
including all Letters of Credit. For purposes of computing the amount available
to be drawn under any Letter of Credit, the amount of such Letter of Credit
shall be determined in accordance with Section 1.3.  For all purposes of this Agreement, if on any
date of determination a Letter of Credit has expired by its terms but any
amount may still be drawn thereunder by reason of the operation of Rule 3.14
of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the
amount so remaining available to be drawn.


 


“Lender”:  As defined in the Preamble and
including the Loan Index Lender.  In
addition to the foregoing, for the purpose of identifying the Persons entitled
to share in the Collateral and the proceeds thereof under, and in accordance
with the provisions of, this Agreement and the Collateral Documents, the term “Lender”
shall include Affiliates of a Lender providing a Bank Product.


 


“Letter of Credit”:  As
defined in Section 2.1.2.


 


“LIBOR Loan”:  Any Loan which bears interest at a rate
determined by reference to the LIBOR Rate.


 


“LIBOR Office”:  The office or offices of any Lender which
shall be making or maintaining the LIBOR Loans. 
A LIBOR Office may be, at the option of such Lender, either a domestic
or foreign office.


 


“LIBOR Rate”:  For any Interest Period for a LIBOR Loan, a
rate per annum determined by Agent pursuant to the following formula:


 


	
   

  	
  LIBOR Rate   =

  	
   

  	
  LIBOR Base Rate

  	
   

  
	
   

  	
   

  	
    1.00 – LIBOR Reserve Percentage

  	
   

  



Where,


 


“LIBOR Base Rate” means, for such Interest
Period, the rate per annum equal to the British Bankers Association LIBOR Rate
(“BBA LIBOR”), as published by Reuters (or other commercially available
source providing quotations of BBA LIBOR as designated by Agent from time to
time) at approximately 11:00 a.m., London time, two Business Days prior to
the commencement of such Interest Period, for Dollar deposits (for delivery on
the first day of such Interest Period) with a term equivalent to such Interest
Period.  If such rate is not available at
such time for any reason, then the “LIBOR Base Rate” for such Interest
Period shall be the rate per annum determined by Agent to be the rate at which
deposits in Dollars for delivery on the first day of such Interest Period in
same day funds in the approximate amount of the LIBOR Loan being made,
continued or converted by LaSalle or Bank of America and with a term equivalent
to such Interest Period would be offered by LaSalle’s or Bank of America’s
London Branch to major banks in the London interbank eurodollar market at their
request at approximately 11:00 a.m. (London time) two Business Days prior
to the commencement of such Interest Period.


 


12
















 


“LIBOR Reserve Percentage” means, for any day
during any Interest Period, the reserve percentage (expressed as a decimal,
carried out to five decimal places) in effect on such day, whether or not
applicable to any Lender, under regulations issued from time to time by the
Board of Governors of the Federal Reserve System of the United States for
determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to
Eurocurrency funding (currently referred to as “Eurocurrency liabilities”).  The LIBOR Rate for each outstanding LIBOR
Loan shall be adjusted automatically as of the effective date of any change in
the LIBOR Reserve Percentage.


 


“Lien”:  With respect to any Person, any interest granted
by such Person in any real or personal property, asset or other right owned or
being purchased or acquired by such Person (including an interest in respect of
a Capital Lease) which secures payment or performance of any obligation and
shall include any mortgage, lien, encumbrance, title retention lien, charge or
other security interest of any kind, whether arising by contract, as a matter
of law, by judicial process or otherwise.


 


“Loan”:  An extension of credit by a Lender to a Loan
Party in the form of a revolving loan pursuant to Section 2.1.1.


 


“Loan Availability”:  The lesser of (i) the Aggregate
Commitments and (ii) the Borrowing Base.


 


“Loan Documents”:  This Agreement, the Notes, the Letters of
Credit, the Master Letter of Credit Agreement, the L/C Applications, the
Collateral Documents, the Subordination Agreements and all documents,
instruments and agreements delivered in connection with the foregoing.


 


“Loan Index Lender”:  LaSalle.


 


“Loan Index Rate”:  The fixed rate per annum provided from time
to time by the Loan Index Lender in its sole discretion based on its internal “loan
index” and made available by the Loan Index Lender at the Company’s request,
which rate shall be fixed for a period equal to the relevant Interest Period; provided
that the Loan Index Rate shall be not less than U.S. Treasury rates fixed for
substantially similar periods.


 


“Loan Parties”:  As defined in the Preamble.


 


“Loan Party”:  The Company and each Subsidiary.


 


“Loan or Loans”:  As defined in Section 2.1.1.


 


“Margin Stock”:  Any “margin stock” as defined in Regulation
U.


 


“Master Letter of
Credit Agreement”:  At any time, with
respect to the issuance of Letters of Credit, a master letter of credit
agreement or reimbursement agreement in the form of Exhibit D, or
successor form designated by the L/C Issuer.


 


13

















 


“Material Adverse
Effect”:  (a) A material adverse
change in, or a material adverse effect upon, the financial condition,
operations, assets, business, properties or prospects of the Loan Parties taken
as a whole, (b) a material impairment of the ability of any Loan Party to
perform any of the Obligations under any Loan Document or (c) a material
adverse effect upon any substantial portion of the collateral under the
Collateral Documents or upon the legality, validity, binding effect or
enforceability against any Loan Party of any Loan Document.


 


“Multiemployer Pension
Plan”:  A multiemployer plan, as
defined in Section 4001(a)(3) of ERISA, to which the Company or any
other member of the Controlled Group may have any liability.


 


“Note”:  A promissory note in the form of Exhibit A.


 


“Notice
of Borrowing”:  As defined in Section 2.2.2.


 


“Notice
of Conversion/Continuation”:  As
defined in Section 2.2.3.


 


“Obligations”:  All obligations (monetary (including
post-petition interest, allowed or not) or otherwise) of any Loan Party under
this Agreement and any other Loan Document including Attorney Costs and any
reimbursement obligations of each Loan Party in respect of Letters of Credit
and surety bonds, all Hedging Obligations permitted hereunder which are owed to
any Lender or its Affiliates, and all Bank Products Obligations, all in each
case howsoever created, arising or evidenced, whether direct or indirect,
absolute or contingent, now or hereafter existing, or due or to become due.


 


“OFAC”:  As defined in Section 9.24.


 


“Operating Lease”:  Any lease of (or other agreement conveying
the right to use) any real or personal property by any Loan Party, as lessee,
other than any Capital Lease.


 


“Outstandings”:  At any time, the sum of (a) the
aggregate principal amount of all outstanding Loans after giving effect to any
borrowings and prepayments or repayments occurring on such date, plus (b) the
Stated Amount of all Letters of Credit.


 


“PBGC”:  The Pension Benefit Guaranty Corporation and
any entity succeeding to any or all of its functions under ERISA.


 


“Pension Plan”:  A “pension plan”, as such term is defined in Section 3(2) of
ERISA, which is subject to Title IV of ERISA or the minimum funding standards
of ERISA (other than a Multiemployer Pension Plan), and as to which the Company
or any member of the Controlled Group may have any liability, including any
liability by reason of having been a substantial employer within the meaning of
Section 4063 of ERISA at any time during the preceding five years, or by
reason of being deemed to be a contributing sponsor under Section 4069 of
ERISA.


 


“Person”:  Any natural person, corporation, partnership,
trust, limited liability company, association, governmental authority or unit,
or any other entity, whether acting in an individual, fiduciary or other
capacity.


 


14

















 


“Pledge Agreement”:  That certain Amended and Restated Pledge
Agreement dated as of even date herewith executed and delivered by the Company.


 


“Prepayment
Consideration Calculation”:  The
method set forth in Schedule 5.2 for calculating whether any amounts are
due and owing to the Lenders as the result of a prepayment of a Fixed Rate Loan
as contemplated in Section 5.2(b).


 


“Prime Rate”:  For any day, the rate of interest in effect
for such day as publicly announced from time to time by Agent as its prime rate
(whether or not such rate is actually charged by Agent), which is not intended
to be Agent’s lowest or most favorable rate of interest at any one time.  Any change in the Prime Rate announced by
Agent shall take effect at the opening of business on the day specified in the
public announcement of such change; provided that Agent shall not be
obligated to give notice of any change in the Prime Rate.


 


“Regulation D”:  Regulation D of the FRB.


 


“Regulation U”:  Regulation U of the FRB.


 


“Related Parties”:  With respect to any Person, such Person’s
Affiliates and the partners, directors, officers, employees, agents, trustees and
advisors of such Person and of such Person’s Affiliates.


 


“Reportable Event”:  A reportable event as defined in Section 4043
of ERISA and the regulations issued thereunder as to which the PBGC has not waived
the notification requirement of Section 4043(a), or the failure of a
Pension Plan to meet the minimum funding standards of Section 412 of the
Code (without regard to whether the Pension Plan is a plan described in Section 4021(a)(2) of
ERISA) or under Section 302 of ERISA.


 


“Required Lenders”:  As of any date of determination, the Lenders
having the Aggregate Commitments or, if the commitment of each Lender to make
Loans and the obligation of the L/C Issuer to make L/C Credit Extensions have
been terminated pursuant to Section 13.2, Lenders holding in the aggregate
more than 50% of the Outstandings (with the aggregate amount of each Lender’s
risk participation and funded participation in L/C Obligations being deemed “held”
by such Lender for purposes of this definition); provided that if at any
time there are only two Lenders, Required Lenders shall mean both Lenders
(provided that for purposes of this determination a “Lender” shall include any
other Lender that is an Affiliate of such Lender); provided  further
that the Commitment of, and the portion of the Outstandings held or deemed held
by, any Defaulting Lender shall be excluded for purposes of making a
determination of Required Lenders (including when there are only two Lenders).


 


“SEC”:  The Securities and Exchange Commission or any
other governmental authority succeeding to any of the principal functions
thereof.


 


“Security Agreement”:  That certain Amended and Restated Security
Agreement dated as of even date herewith executed and delivered by the Loan
Parties.


 


“Senior Debt”:  All Debt of the Company and its Subsidiaries
other than Subordinated Debt.


 


15

















 


“Senior Officer”:  With respect to any Loan Party, any of the
chief executive officer, the chief financial officer, the chief operating
officer or the treasurer of such Loan Party.


 


“Stated Amount”:  With respect to any Letter of Credit at any
date of determination, (a) the maximum aggregate amount available for
drawing thereunder under any and all circumstances plus (b) the
aggregate amount of all unreimbursed payments and disbursements under such
Letter of Credit.


 


“Subordinated Debt”:  The Unsecured Notes and any other unsecured
Debt of the Company which has subordination terms, covenants, pricing and other
terms which have been approved in writing by the Required Lenders.


 


“Subordinated Debt
Documents”:  The Unsecured Note
Documents and all other documents and instruments relating to the Subordinated
Debt and all amendments and modifications thereof approved by the Required
Lenders.


 


“Subordination
Agreements”:  The provisions of the
Unsecured Note Documents in favor or for the benefit of the “Senior Debt” as
defined therein and all other subordination agreements executed by a holder of
Subordinated Debt in favor of Agent, for the ratable benefit of Agent and the
Lenders, from time to time after the Closing Date.


 


“Subsidiary”:  With respect to any Person, a corporation,
partnership, limited liability company or other entity of which such Person
owns, directly or indirectly, such number of outstanding Capital Securities as
have more than 50% of the ordinary voting power for the election of directors
or other managers of such corporation, partnership, limited liability company
or other entity.  Unless the context
otherwise requires, each reference to Subsidiaries herein shall be a reference
to Subsidiaries of the Company.


 


 “Tangible Net Worth”:  As of any date of determination, the sum of
the amounts set forth on the balance sheet of the Company and the Subsidiaries
as total shareholder equity of the Company and the Subsidiaries, plus
any Subordinated Debt, minus the book value of all intangible assets of
the Company and the Subsidiaries (including all such items as goodwill, trade
names, service marks, copyrights, patents, licenses, deferred items,
unamortized debt discount, prepaid expenses and any other items deemed
intangible by Agent), minus Investments in non-public companies net of
cash dividends received in respect of such Investments.


 


“Taxes”:  Any and all present and future taxes, duties,
levies, imposts, deductions, assessments, charges or withholdings, and any and
all liabilities (including interest and penalties and other additions to taxes)
with respect to the foregoing, but excluding Excluded Taxes.


 


“Termination Date”:  The earlier to occur of (a) June 15,
2013, or (b) such other date on which the Commitment terminates pursuant
to Section 13.


 


“Termination Event”:  With respect to a Pension Plan that is
subject to Title IV of ERISA, (a) a Reportable Event, (b) the
withdrawal of Company or any other member of the Controlled Group from such
Pension Plan during a plan year in which Company or any other member of the
Controlled Group was a “substantial employer” as defined in Section 4001(a)(2) of
ERISA or was deemed such under Section 4068(f) of ERISA, (c) the
termination of such 


 


16

















 


Pension Plan, the
filing of a notice of intent to terminate the Pension Plan or the treatment of
an amendment of such Pension Plan as a termination under Section 4041 of
ERISA, (d) the institution by the PBGC of proceedings to terminate such
Pension Plan or (e) any event or condition that might constitute grounds
under Section 4042 of ERISA for the termination of, or appointment of a
trustee to administer, such Pension Plan.


 


“Total Plan Liability”:  At any time, the present value of all vested
and unvested accrued benefits under all Pension Plans, determined as of the
then most recent valuation date for each Pension Plan, using PBGC actuarial
assumptions for single employer plan terminations.


 


“type”:  As defined in Section 2.2.1.


 


“UCC”:  As defined in the Security Agreement.


 


“Unfunded Liability”:  The amount (if any) by which the present
value of all vested and unvested accrued benefits under all Pension Plans
exceeds the fair market value of all assets allocable to those benefits, all
determined as of the then most recent valuation date for each Pension Plan,
using PBGC actuarial assumptions for single employer plan terminations.


 


“Unmatured Event of
Default”:  Any event that, if it
continues uncured, will, with lapse of time or notice or both, constitute an
Event of Default.


 


“Unreimbursed Amount”:  As defined in Section 2.3.2(a).


 


“Unsecured Note
Documents”:  The Unsecured Notes, the
Unsecured Note Registration Statement, the Unsecured Note Indenture, the
Unsecured Note Prospectus and each other agreement relating to the Unsecured
Notes.


 


“Unsecured Note
Indenture”:  That certain Indenture
dated June 14, 2006 by and between the Company, as obligor, and Wells
Fargo Bank, National Association, as trustee.


 


“Unsecured Note
Prospectus”:  That certain Prospectus
of the Company dated June 14, 2006 relating to the Unsecured Notes and
included as part of the Unsecured Note Registration Statement.


 


“Unsecured Note
Registration Statement”:  The Company’s
registration statement in respect of the Unsecured Notes on Form S-1,
declared effective by the Securities and Exchange Commission on or about June 14,
2006.


 


“Unsecured Notes”:  The renewable unsecured subordinated notes of
the Company issued under the Unsecured Note Indenture pursuant to the Unsecured
Note Registration Statement.


 


“Wholly-Owned
Subsidiary”:  As to any Person, a
Subsidiary all of the Capital Securities of which (except directors’ qualifying
Capital Securities) are at the time directly or indirectly owned by such Person
and/or another Wholly-Owned Subsidiary of such Person.


 


17

















 


1.2           Other Interpretive Provisions.


 


(a)           The meanings of
defined terms are equally applicable to the singular and plural forms of the
defined terms.


 


(b)           Section, Annex, Schedule and Exhibit references
are to this Agreement unless otherwise specified.


 


(c)           The term “including” is not limiting and means “including
without limitation.”


 


(d)           In the computation of periods of time from a specified
date to a later specified date, the word “from” means “from and including”; the
words “to” and “until” each mean “to but excluding”, and the word “through”
means “to and including.”


 


(e)           Unless otherwise expressly provided herein, (i) references
to agreements (including this Agreement and the other Loan Documents) and other
contractual instruments shall be deemed to include all subsequent amendments,
restatements, supplements and other modifications thereto, but only to the
extent such amendments, restatements, supplements and other modifications are
not prohibited by the terms of any Loan Document, and (ii) references to
any statute or regulation shall be construed as including all statutory and
regulatory provisions amending, replacing, supplementing or interpreting such
statute or regulation.


 


(f)            This Agreement and the other Loan Documents may use
several different limitations, tests or measurements to regulate the same or
similar matters.  All such limitations,
tests and measurements are cumulative and each shall be performed in accordance
with its terms.


 


(g)           This Agreement and the other Loan Documents are the
result of negotiations among and have been reviewed by counsel to Agent, the
Company, each Lender and the other parties thereto and are the products of all
parties.  Accordingly, they shall not be
construed against Agent merely because of Agent’s involvement in their
preparation.


 


1.3           Letter of Credit Amounts.   Unless otherwise specified herein the amount
of a Letter of Credit at any time shall be deemed to be the stated amount of
such Letter of Credit in effect at such time; provided, however, that with
respect to any Letter of Credit that, by its terms or the terms of any L/C
Application or Master Letter of Credit Agreement related thereto, provides for
one or more automatic increases in the stated amount thereof, the amount of
such Letter of Credit shall be deemed to be the maximum stated amount of such
Letter of Credit after giving effect to all such increases, whether or not such
maximum stated amount is in effect at such time.


 


SECTION 2          COMMITMENTS
OF THE LENDERS; BORROWING, CONVERSION AND LETTER OF CREDIT PROCEDURES.


 


2.1           Commitments.   On and subject to the terms and conditions of
this Agreement, each Lender severally agrees to make Loans to, and the L/C
Issuer agrees to issue Letters of Credit for the account of, the Loan Parties,
jointly or severally, as follows:


 


2.1.1        Loan
Commitment.   Each Lender severally agrees to make Loans on
a revolving basis from time to time until the Termination Date in the amounts
as the Company may request from the Lender; provided, however,
that after giving effect to any Loan, (i) the Outstandings will not at any
time exceed Loan Availability and (ii) the aggregate Outstandings of any
Lender shall not exceed such Lender’s Commitment.  Within the limits of each Lender’s
Commitment, and subject to the other terms and conditions hereof, Borrower may
borrow under this Section 2.1.1, prepay under Section 6.1.1, and
reborrow under this Section 2.1.1.


 


18

















 


2.1.2        L/C
Commitment.   Subject to Section 2.3.1, the L/C
Issuer, in reliance on the agreements of the other Lenders set forth herein,
agrees to issue letters of credit, in each case containing such terms and
conditions as are permitted by this Agreement and are reasonably satisfactory
to the L/C Issuer (each, a “Letter of Credit”), at the request of and
for the account of the Company from time to time before the scheduled
Termination Date; provided that (a) the aggregate Stated Amount of
all Letters of Credit shall not at any time exceed $5,000,000 and (b) the
Outstandings shall not at any time exceed Loan Availability.


 


2.2           Loan Procedures.


 


2.2.1        Various
Types of Loans.  Each Loan shall be divided into tranches which
are either a Base Rate Loan, a LIBOR Loan or a Fixed Rate Loan (each, a “type”
of Loan), as the Company shall specify in the related Notice of Borrowing (with
respect to Base Rate Loans or LIBOR Loans) or conversion (with respect to all
types of Loans) pursuant to Section 2.2.2 or 2.2.3.  LIBOR Loans and Fixed Rate Loans having the
same Interest Period are sometimes called a “Group” or, collectively, “Groups”.  Base Rate Loans, LIBOR Loans and Fixed Rate
Loans may be outstanding at the same time, provided that no more than
eight (8) different Groups of LIBOR Loans shall be outstanding at any one
time.


 


2.2.2            Borrowing Procedures.


 


(a)               The Company shall give written notice (each such
written notice, a “Notice of Borrowing”) substantially in the form of Exhibit E
or telephonic notice (followed immediately by a Notice of Borrowing) to Agent
of each proposed borrowing of a revolving Loan not later than (a) in the case
of a Base Rate Loan or a Fixed Rate Loan, 11:00 A.M., Minneapolis time, on
the proposed date of such borrowing, and (b) in the case of a LIBOR Loan,
11:00 A.M., Minneapolis time, at least three Business Days prior to the
proposed date of such borrowing.  Each
such notice shall be effective upon receipt by Agent, shall be irrevocable, and
shall specify the date, amount and type of borrowing and, (i) in the case
of a LIBOR Loan, the initial Interest Period therefor, and (ii) in the case of
a Fixed Rate Loan, the initial Interest Period therefor as well as an
amortization schedule reflecting equal monthly payments over the life of such
Fixed Rate Loan over the Interest Period therefor commencing on the same date
of the next month following the borrowing (or such other method of amortization
approved in writing by the Lender prior to the commencement of the Interest
Period therefor).  Each Base Rate Loan
shall be in an aggregate amount of at least $100,000 or a higher integral
multiple of $100,000.  Each LIBOR Loan
shall be in an aggregate amount of at least $100,000 or a higher integral
multiple of $100,000.  Each Fixed Rate
Loan shall be in an aggregate amount of at least $200,000 or a higher integral
multiple of $100,000; provided, however, that the Loan Parties
may not borrow, convert to, or continue, more than eighteen (18) Fixed Rate
Loans, in the aggregate, in any calendar year.


 


(b)           Following receipt of a Notice of Borrowing, Agent
shall promptly notify each Lender of the amount of its Applicable Percentage of
the applicable Loans.  Each Lender shall
make the amount of its Loan available to Agent in immediately available funds
at Administrative Agent’s Office not later than 1:00 p.m. on the Business
Day specified in the applicable Notice of Borrowing.  Upon satisfaction of the applicable
conditions set forth in Section 12, Agent shall make all funds so
received available to the Company in like funds as received by Agent either by


 


19

















 


(i) crediting the account of Borrower on the books of
LaSalle with the amount of such funds or (ii) wire transfer of such funds,
in each case in accordance with instructions provided to (and reasonably
acceptable to) Agent by the Company; provided, however, that if,
on the date the Notice of Borrowing with respect to such borrowing is given by
the Company, there are Unreimbursed Amounts outstanding, then the proceeds of
such borrowing first, shall be applied, to the payment in full of any
such Unreimbursed Amounts, and second, shall be made available to the
Company as provided above.


 


2.2.3        Conversion and Continuation Procedures.


 


(a)           Subject to Section 2.2.1, the Company may,
upon irrevocable written notice to Agent in accordance with clause (b) below:


 


(i)            elect, as of any Business Day, to convert any Loans
(or any part thereof in an aggregate amount not less than $100,000 or a higher
integral multiple of $100,000) into Loans of the other type; or


 


(ii)           elect, as of the last day of the applicable Interest
Period, to continue any LIBOR Loans having Interest Periods expiring on such
day (or any part thereof in an aggregate amount not less than $100,000 or a
higher integral multiple of $100,000) for a new Interest Period;


 


provided that (i) the Loan Parties may not
borrow, convert to, or continue, more than eighteen (18) Fixed Rate Loans, in
the aggregate, in any calendar year, and (ii) after giving effect to any
prepayment, conversion or continuation, the aggregate principal amount of each
Group of LIBOR Loans shall be at least $100,000 or a higher integral multiple
of $100,000, and the aggregate principal amount of each Group of Fixed Rate
Loans shall be at least $200,000 or a higher integral multiple of $100,000.


 


(b)           The Company shall give written notice (each such
written notice, a “Notice of Conversion/Continuation”) substantially in
the form of Exhibit F or telephonic notice (followed immediately by
a Notice of Conversion/Continuation) to Agent of each proposed conversion or
continuation not later than (i) in the case of conversion into Base Rate
Loans, 11:00 A.M., Minneapolis time, on the proposed date of such
conversion and (ii) in the case of conversion into or continuation of
LIBOR Loans, 11:00 A.M., Minneapolis time, at least three Business Days
prior to the proposed date of such conversion or continuation, specifying in
each case:


 


(i)            the proposed date of conversion or continuation;


 


(ii)           the aggregate amount of Loans to be converted or
continued;


 


(iii)          the type of Loans resulting from the proposed
conversion or continuation; and


 


(iv)          in the case of conversion into, or continuation of,
LIBOR Loans, the duration of the requested Interest Period therefor.


 


(c)           If upon the expiration of any Interest Period
applicable to LIBOR Loans or Fixed Rate Loans, the Company has failed to select
timely a new Interest Period to be applicable to


 


20

















 


such LIBOR Loans or Agent has failed to approve a new
Interest Period to be applicable to such Fixed Rate Loans, the Company shall be
deemed to have elected to convert such LIBOR Loans or Fixed Rate Loans, as
applicable, into Base Rate Loans effective on the last day of such Interest
Period.


 


(d)           Any conversion of a LIBOR Loan on a day other than the
last date of an Interest Period therefor shall be subject to Section 8.4
and any conversion of a Fixed Rate Loan on a day other than the last date of an
Interest Period therefor shall be subject to Section 5.2(b).


 


(e)           Following receipt of a Notice of
Conversion/Continuation, Agent shall promptly notify each Lender of such
notice, and if no timely Notice of Conversion/Continuation is provided by the
Company, Agent shall notify each Lender of the details of any automatic
conversion to Base Rate Loans described in Section 2.2.3(c).  All conversions and continuation of Loans
must be made uniformly and ratably among the Lenders.


 


2.3           Letter of Credit Procedures.


 


2.3.1        L/C
Applications.   The
Loan Parties shall execute and deliver to the L/C Issuer the Master Letter of
Credit Agreement from time to time in effect. 
The Company shall give notice to the L/C Issuer (with a copy to the
Agent) of the proposed issuance of each Letter of Credit on a Business Day
which is at least three Business Days (or such lesser number of days as the
Lender shall agree in any particular instance in its sole discretion) prior to
the proposed date of issuance of such Letter of Credit.  Each such notice shall be accompanied by an
L/C Application, duly executed by the Company and in all respects satisfactory
to the L/C Issuer, together with such other documentation as the L/C Issuer may
request in support thereof, it being understood that each L/C Application shall
specify, among other things, the date on which the proposed Letter of Credit is
to be issued, the expiration date of such Letter of Credit (which shall not be
later than the earlier of thirty (30) days prior to (i) one year after the
date of issuance thereof and (ii) the scheduled Termination Date (unless
such Letter of Credit is Cash Collateralized); provided, a Letter of Credit
with an expiration date of one year may provide for renewal thereof in
additional one-year periods, subject to the preceding clause (ii)) and whether
such Letter of Credit is to be transferable in whole or in part.  So long as the L/C Issuer has not received
written notice from Agent, any Lender or any Loan Party that the conditions
precedent set forth in Section 12 with respect to the issuance of
such Letter of Credit have not been satisfied, the L/C Issuer shall issue such
Letter of Credit on the requested issuance date.  In the event of any inconsistency between the
terms of the Master Letter of Credit Agreement, any L/C Application and the
terms of this Agreement, the terms of this Agreement shall control.


 


2.3.2            Reimbursement Obligations; Fundings of Participations.


 


(a)               The L/C Issuer shall notify the Company and Agent
whenever any demand for payment is made under any Letter of Credit by the
beneficiary thereunder; provided that the failure of the L/C Issuer to
so notify the Company or Agent shall not affect the rights of the L/C Issuer or
the Lenders in any manner whatsoever. 
Not later than 11:00 a.m. Minneapolis time on the date of any
payment or disbursement by the L/C Issuer under a Letter of Credit (the “Honor
Date”), each Loan Party, jointly and severally, hereby unconditionally and
irrevocably agrees to reimburse the L/C Issuer through Agent for each such
payment or disbursement.  If the Loan
Parties fail to so reimburse the L/C Issuer by such time, Agent shall promptly
notify each Lender of the Honor Date, the


 


21

















 


amount of the unreimbursed drawing or disbursement
(the “Unreimbursed Amount”), and the amount of the Lender’s Applicable
Percentage thereof.  In such event, the
Company shall be deemed to have requested a borrowing of Base Rate Loans to be
disbursed on the Honor Date in an amount equal to the Unreimbursed Amount,
without regard to the minimum and multiples specified in Section 2.2 for
the principal amount of Base Rate Loans, but subject to the amount of the
unutilized portion of the Aggregate Commitments and satisfaction of the
conditions set forth in Section 12.2. 
Any notice given by the L/C Issuer or Agent pursuant to this Section 2.3.2(a) may
be given by telephone if immediately confirmed in writing; provided that the
lack of such immediate confirmation shall not affect the conclusiveness of
binding effect of such notice.


 


(b)           Each Lender shall upon any notice pursuant to Section 2.3.2(a) make
funds available to Agent for the account of the L/C Issuer at Administrative
Agent’s Office in an amount equal to its Applicable Percentage of the
Unreimbursed Amount not later than 1:00 p.m. on the Business Day specified
in such notice by Agent, whereupon, subject to the provisions of Section 2.3.2(c),
each Lender that so makes funds available shall be deemed to have made a Base
Rate Loan to the Company in such amount. 
Agent shall remit the funds so received to the L/C Issuer.


 


(c)           With respect to any Unreimbursed Amount that is not
fully refinanced by a borrowing of Base Rate Loans because the conditions set
forth in Section 12.2 cannot be satisfied or for any other reason, the
Loan Parties shall be deemed to have incurred from the L/C Issuer an L/C
Borrowing in the amount of the Unreimbursed Amount that is not so refinanced,
which L/C Borrowing shall be due and payable on demand (together with interest)
and shall bear interest at the Default Rate. 
In such event, each Lender’s payment to Agent for the account of the L/C
Issuer pursuant to Section 2.3.2(b) shall be deemed payment in
respect of its participation in such L/C Borrowing and shall constitute an L/C
Advance from such Lender in satisfaction of its participation obligation under
this Section 2.3.2.


 


(d)           Until each Lender funds its Loan or L/C Advance
pursuant to this Section 2.3.2 to reimburse the L/C Issuer for any amount
drawn under any Letter of Credit, interest in respect of such Lender’s
Applicable Percentage of such amount shall be solely for the account of the L/C
Issuer.


 


(e)            Each Lender’s obligation to make Loans or L/C
Advances to reimburse the L/C Issuer for amounts drawn under Letters of Credit,
as contemplated by this Section 2.3.2, shall be absolute and unconditional
and shall not be affected by any circumstance, including (A) any setoff,
counterclaim, recoupment, defense or other right which such Lender may have
against the L/C Issuer, the Company, any other Loan Party or any other Person
for any reason whatsoever; (B) the occurrence or continuance of an
Unmatured Event of Default or an Event of Default, or (C) any other
occurrence, event or condition, whether or not similar to any of the foregoing;
provided, however, that each Lender’s obligation to make
Committed Loans pursuant to this Section 2.3.2 is subject to the conditions
set forth in Section 12.2.  No such
making of an L/C Advance shall relieve or otherwise impair the obligation of
the Loan Parties to reimburse the L/C Issuer for the amount of any payment made
by the L/C Issuer under any Letter of Credit, together with interest as
provided herein.


 


22

















 


(f)            If any Lender fails to make available to Agent for the
account of the L/C Issuer any amount required to be paid by such Lender
pursuant to the foregoing provisions of this Section 2.3.2 by the time
specified in Section 2.3.2(b), the L/C Issuer shall be entitled to recover
from such Lender (acting through Agent), on demand, such amount with interest
thereon for the period from the date such payment is required to the date on
which such payment is immediately available to the L/C Issuer at a rate per
annum equal to the greater of the Federal Funds Rate and a rate determined by
the L/C issuer in accordance with banking industry rules on interbank
compensation, plus any administrative, processing or similar fees
customarily charged by the LC/ Issuer in connection with the foregoing.  If such Lender pays such amount (with
interest and fees as aforesaid), the amount so paid shall constitute such
Lender’s Loan included in the relevant borrowing or L/C Advance in respect of
the relevant L/C Borrowing, as the case may be. 
A certificate of the L/C Issuer submitted to any Lender (through Agent)
with respect to any amounts owing under this clause (f) shall be
conclusive absent manifest error.


 


2.3.3            Repayment of Participations.


 


(a)               At any time after the L/C Issuer has made a payment
under any Letter of Credit and has received from any Lender such Lender’s L/C
Advance in respect of such payment in accordance with Section 2.3.2, if
Agent receives for the account of the L/C Issuer any payment in respect of the
related Unreimbursed Amount or interest thereon (whether directly from any Loan
Party or otherwise, including proceeds of Cash Collateral applied thereto by
Agent), Agent will distribute to such Lender its Applicable Percentage thereof
in the same funds as those received by Agent.


 


(b)           If any payment received by Agent for the account of
the L/C Issuer pursuant to Section 2.3.2(a) is required to be
returned under any of the circumstances described in Section 16.6
(including pursuant to any settlement entered into by the L/C Issuer in its
discretion), each Lender shall pay to Agent for the account of the L/C Issuer
its Applicable Percentage thereof on demand of Agent, plus interest thereon
from the date of such demand to the date such amount is returned by such
Lender, at a rate per annum equal to the Federal Funds Rate from time to time
in effect.  The obligations of the
Lenders under this clause shall survive the payment in full of the Obligations
and the termination of this Agreement.


 


2.3.4        Obligations
Absolute.   The
Loan Parties’ reimbursement obligations hereunder shall be irrevocable and
unconditional under all circumstances, including (i) any lack of validity
or enforceability of any Letter of Credit, this Agreement or any other Loan
Document, (ii) the existence of any claim, set-off, defense or other right
which any Loan Party may have at any time against a beneficiary named in a
Letter of Credit, any transferee of any Letter of Credit (or any Person for
whom any such transferee may be acting), the L/C Issuer, Agent, any Lender or
any other Person, whether in connection with any Letter of Credit, this
Agreement, any other Loan Document, the transactions contemplated herein or any
unrelated transactions (including any underlying transaction between any Loan
Party and the beneficiary named in any Letter of Credit), (iii) the
validity, sufficiency or genuineness of any document which the L/C Issuer has
determined complies on its face with the terms of the applicable Letter of
Credit, even if such document should later prove to have been forged,
fraudulent, invalid or insufficient in any respect or any statement therein
shall have been untrue or inaccurate in any respect, or (iv) the surrender
or impairment of any security for the performance or observance of any of the
terms hereof.


 


23

















 


2.3.5        Role
of L/C Issuer.   Each
Lender and each Loan Party agree that, in paying any drawing under a Letter of
Credit, the L/C Issuer shall not have any responsibility to obtain any document
(other than any sight draft, certificates and documents expressly required by
the Letter of Credit) or to ascertain or inquire as to the validity or accuracy
of any such document or the authority of the Person executing or delivering any
such document.  None of the L/C Issuer,
Agent, any of their respective Related Parties nor any correspondent,
participant or assignee of the L/C Issuer shall be liable to any Lender for (i) any
action taken or omitted in connection herewith at the request or with the
approval of the Lenders or the Required Lenders, as applicable; (ii) any
action taken or omitted in the absence of gross negligence or willful
misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any document or instrument related to any Letter of Credit or
L/C Issuer document.  The Company and
each other Loan Party hereby assumes all risks of the acts or omissions of any
beneficiary or transferee with respect to its use of any Letter of Credit; provided,
however, that this assumption is not intended to, and shall not,
preclude the Company’s (or any Loan Party) pursuing such rights and remedies as
it may have against the beneficiary or transferee at law or under any other
agreement.  None of the L/C Issuer,
Agent, any of their respective Related Parties nor any correspondent,
participant or assignee of the L/C Issuer, shall be liable or responsible for
any of the matters described in clauses (i) through (iv) of Section 2.3.4;
provided, however, that anything in such clauses to the contrary
notwithstanding, the Company may have a claim against the L/C Issuer, and the
L/C Issuer may be liable to the Company, to the extent, but only to the extent,
of any direct, as opposed to consequential or exemplary, damages suffered by
the Company which the Company proves were caused by the L/C Issuer’s willful
misconduct or gross negligence or the L/C Issuer’s willful failure to pay under
any Letter of Credit after the presentation to it by the beneficiary of a sight
draft and certificate(s) strictly complying with the terms and conditions
of a Letter of Credit.   In furtherance and not in limitation of the
foregoing, the L/C Issuer may accept documents that appear on their face to be
in order, without responsibility for further investigation, regardless of any
notice or information to the contrary, and the L/C Issuer shall not be
responsible for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may
prove to be invalid or ineffective for any reason.


 


2.3.6        Cash
Collateral.   Upon
the request of Agent, (i) if the L/C Issuer has honored any full or
partial drawing request under any Letter of Credit and such drawing has
resulted in an L/C Borrowing, or (ii) if, as of the L/C Expiration Date,
any L/C Obligation for any reason remains outstanding, the Company shall, in
each case, immediately Cash Collateralize the then outstanding amount of all
L/C Obligations (including any fees then due and owing).  Sections 2.3.1, 6.1.2 and 13.2 set forth
certain additional requirements to deliver Cash Collateral hereunder.  The Company and each Loan Party hereby grants
to Agent, for the benefit of the L/C Issuer and the Lenders, a security
interest in all such cash, deposit accounts and all balances therein and all
proceeds of the foregoing.  Cash
Collateral shall be maintained in blocked, non-interest bearing deposit
accounts at LaSalle.


 


24
















 


2.3.7        Applicability
of ISP and UCP.  Unless otherwise
expressly agreed by the L/C Issuer and the Company when a Letter of Credit is
issued, (i) the rules of the ISP shall apply to each standby Letter
of Credit, and (ii) the rules of the Uniform Customs and Practice for
Documentary Credits, as most recently published by the International Chamber of
Commerce (the “ICC”) at the time of issuance shall apply to each
commercial Letter of Credit.


 


2.4           Certain Conditions.
 Notwithstanding any other provision of
this Agreement, neither Agent nor any Lender or the L/C Issuer shall have an
obligation to make any Loan, or to permit the continuation of or any conversion
into any LIBOR Loan, or to issue any Letter of Credit, if an Event of Default
or Unmatured Event of Default exists.


 


SECTION 3            EVIDENCING OF LOANS.


 


3.1           Notes.  The Loans made by each Lender shall be
evidenced by a Note, with appropriate insertions, payable to the order of each
Lender in a face principal amount equal to its Commitment.


 


3.2           Recordkeeping.  Each Lender shall record in its records, the
date and amount of each Loan made by such Lender, each repayment or conversion
thereof, the purchases and sales by such Lender of participations in Letters of
Credit and, in the case of each LIBOR Loan and each Fixed Rate Loan, the dates
on which each Interest Period for such Loan shall begin and end.  The aggregate unpaid principal amount so
recorded shall be rebuttably presumptive evidence of the principal amount of
the Loans owing and unpaid to such Lender.  The failure to so record any such amount or
any error in so recording any such amount shall not, however, limit or
otherwise affect the Obligations of the Loan Parties hereunder or under any
Note to repay the principal amount of the Loans hereunder, together with all
interest accruing thereon.


 


SECTION 4            INTEREST.


 


4.1           Interest Rates.  The Loan Parties, jointly and severally,
promise to pay interest on the unpaid principal amount of each Loan for the
period commencing on the date of such Loan until such Loan is paid in full as
follows:


 


(a)           at all times while such
Loan is a Base Rate Loan, at a rate per annum equal to the sum of the Base Rate
from time to time in effect plus the Applicable Margin; and


 


(b)           at all times while such
Loan is a LIBOR Loan, at a rate per annum equal to the sum of the LIBOR Rate
applicable to each Interest Period for such Loan plus the Applicable
Margin;


 


(c)           at all times while such
Loan is a Fixed Rate Loan, at a rate per annum equal to the sum of the Fixed
Rate applicable to each Interest Period for such Loan plus the
Applicable Margin;


 


provided that at any time an Event
of Default exists, unless the Required Lenders otherwise consent, the interest
rate applicable to each Loan shall be the Default Rate, provided  further
that such increase may thereafter be rescinded by the Required Lenders.  Notwithstanding the 


 


25

















 


foregoing, upon the occurrence of an Event of Default
under Section 13.1.1 or 13.1.4, such increase shall occur automatically.


 


4.2           Interest Payment
Dates.  Accrued interest on each Base
Rate Loan shall be payable in arrears on the first day of each calendar month
and at maturity.  Accrued interest on
each LIBOR Loan shall be payable on the last day of each Interest Period
relating to such Loan (and, in the case of a LIBOR Loan having a six-month
Interest Period, on the three-month anniversary of the first day of such
Interest Period), upon a prepayment of such Loan, and at maturity.  Accrued interest on each Fixed Rate Loan
shall be payable on the same date as payments are made on the principal in
accordance with the amortization schedule delivered pursuant to Section 2.2.2(a),
upon a prepayment of such Loan, and at maturity.  After maturity, and at any time an Event of
Default exists, accrued interest on all Loans shall be payable on demand.


 


4.3           Setting and Notice
of LIBOR Rates.  The applicable LIBOR
Rate for each Interest Period shall be determined by Agent, and notice thereof
shall be given by Agent promptly to the Company and the Lenders.  Each determination of the applicable LIBOR
Rate by Agent shall be conclusive and binding upon the parties hereto, in the
absence of demonstrable error.  Agent
shall, upon written request of the Company, deliver to the Company a statement
showing the computations used by Agent in determining any applicable LIBOR Rate
hereunder.


 


4.4           Computation of
Interest.  Interest shall be computed
for the actual number of days elapsed on the basis of a year of 360 days.  The applicable interest rate for each Base
Rate Loan shall change simultaneously with each change in the Base Rate.


 


SECTION 5            FEES.


 


5.1           Letter of Credit
Fees


 


(a)           The Loan Parties,
jointly and severally, agree to pay to the L/C Issuer a letter of credit fee
for each Letter of Credit equal to the L/C Fee Rate of the Stated Amount of
such Letter of Credit (computed for the actual number of days elapsed on the
basis of a year of 360 days); provided that, unless the L/C Issuer
otherwise consents, the rate applicable to each Letter of Credit shall be
increased by 2% at any time that an Event of Default exists.  Such letter of credit fee shall be payable in
arrears on the first day of each calendar month and on the Termination Date (or
such later date on which such Letter of Credit expires or is terminated) for
the period from the date of the issuance of each Letter of Credit (or the last
day on which the letter of credit fee was paid with respect thereto) to the
date such payment is due or, if earlier, the date on which such Letter of
Credit expired or was terminated.


 


(b)           In addition, with respect to each Letter of Credit,
the Company agrees to pay to the L/C Issuer such fees and expenses as the L/C
Issuer customarily requires in connection with the issuance, negotiation,
processing and/or administration of letters of credit in similar situations,
including a letter of credit fronting fee in the amount and at the times agreed
to by the Company and the L/C Issuer.


 


5.2           Other Fees


 


(a)           Non-Utilization Fee.  The Loan
Parties, jointly and severally, agree to pay to each Lender a non-utilization
fee equal to 0.25% of the total of (i) such Lender’s Commitment, minus
(ii) the daily average of the aggregate principal amount of the
Outstandings attributable to such Lender, which non-utilization fee shall be (X) calculated
on the basis of a year consisting of 360 days, (Y) paid for the actual
number of days elapsed, and (Z) payable monthly in arrears on the last day
of each calendar month and on the Termination Date.


 


26

















 


(b)           Fixed Rate Loan Prepayment Fee. 
The Loan Parties, jointly and severally, agree to pay to each Lender,
with respect to any prepayment made on a Fixed Rate Loan that is not in
accordance with the applicable amortization schedule for such Fixed Rate Loan
provided to and approved by Agent pursuant to Section 2.2.2 (other
than partial prepayments permitted pursuant to Section 6.1.3), a
prepayment fee equal to the amount of all net losses, costs and expenses
sustained or incurred by such Lender as a result of such prepayment (including
any net loss, cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund or
maintain any Fixed Rate Loan), as reasonably determined by Agent in accordance
with the Prepayment Consideration Calculation.


 


(c)           Origination Fee.  The Loan
Parties, jointly and severally, agree to pay (i) to LaSalle an origination
fee equal to 0.30% of $5,000,000 (the amount by which LaSalle’s Commitment has
increased pursuant to this Agreement) and (ii) to The PrivateBank and
Trust Company an origination fee equal to 0.30% of $25,000,000 (the amount of
The PrivateBank and Trust Company’s Commitment).  Each such fee shall be due and payable upon
the execution of this Agreement and shall be fully earned when paid and shall
not be refundable for any reason whatsoever.


 


(d)           Lender’s Fees.  The Loan
Parties, jointly and severally, agree to pay to each Lender such other
reasonable fees and expenses as are mutually agreed to from time to time by the
Company and such Lender, including the fees required to be paid in accordance
with Section 16.5.


 


SECTION 6            REDUCTION OR
TERMINATION OF THE REVOLVING COMMITMENT; PREPAYMENTS.


 


6.1           Prepayments 


 


6.1.1            Voluntary
Prepayments.  The Loan Parties may
from time to time prepay the Loans in whole or in part; provided that
the Company shall give Agent and each Lender notice thereof not later than
11:00 A.M., Minneapolis time, on the day of such prepayment (which shall
be a Business Day), specifying the Loans to be prepaid and the date and amount
of prepayment.


 


6.1.2            Mandatory Prepayments.  If on any day the Outstandings exceed the
Borrowing Base, the Loan Parties shall immediately prepay the Loans and/or Cash
Collateralize the outstanding Letters of Credit, or do a combination of the
foregoing, in an amount sufficient to eliminate such excess.


 


6.1.3            Manner of Prepayments.  Each voluntary partial prepayment shall be in
a principal amount of $25,000 or a higher integral multiple of $5,000.  Any partial prepayment of a Group of LIBOR
Loans shall be subject to the proviso to Section 2.2.3(a).  Any prepayment of a LIBOR Loan on a day other
than the last day of an Interest Period therefor shall include interest on the
principal amount being repaid and shall be subject to Section 8.4.  Any prepayment of a Fixed Rate Loan on a day
other than the last day of an Interest Period therefor shall include interest
on the principal amount being repaid and, if such prepayment is not a partial
prepayment permitted pursuant to Section 2.2.2(a), shall be subject to Section 5.2(b).  Except as otherwise provided by this
Agreement, all principal payments in respect of the Loans shall be applied
first to repay outstanding Base Rate Loans, then to repay outstanding Fixed
Rate Loans in direct order of Interest Period maturities and then to repay
outstanding LIBOR Rate Loans in direct order of Interest Period maturities.


 


27

















 


6.2           Repayments.  The Loans shall be paid in full and the
Commitment shall terminate on the Termination Date.


 


6.3           Reduction of
Aggregate Commitments.  The Loan
Parties may, at any time, upon not less than 30 days’ prior written notice from
the Company to Agent and each Lender, reduce the amount of the Aggregate
Commitments, with any such reduction in a minimum amount of $1,000,000, or, if
more, in an integral multiple of $500,000 and on a pro rata basis for each
Commitment; provided, however, that the Loan Parties may not at
any time reduce the amount of Aggregate Commitments below the Outstandings.


 


SECTION 7            MAKING AND PRORATION
OF PAYMENTS; SETOFF; TAXES.


 


7.1           Payments Generally;
Agent’s Clawback 


 


7.1.1        General   All
payments to be made by the Loan Parties hereunder or any Loan Document shall be
made without condition or deduction for any counterclaim, defense, recoupment
or setoff.  Except as otherwise expressly
provided herein, all payments by the Loan Parties hereunder shall be made to
Agent, for the account of the respective Lenders to which such payment is owed,
at Administrative Agent’s Office in Dollars and in immediately available funds
not later than 12:00 noon on the date specified herein.  Agent will promptly distribute to each Lender
its Applicable Percentage (or other applicable share as provided herein) of
such payment in like funds as received by wire transfer to such Lender’s
lending office.  All payments received by
Agent after 12:00 noon shall be deemed received on the next succeeding Business
Day and any applicable interest or fee shall continue to accrue.  If any payment to be made by any Loan Party
shall come due on a day other than a Business Day, payment shall be made on the
next following Business Day, and such extension of time shall be reflected in
computing interest or fees, as the case may be.


 


7.1.2        Fundings by Lenders;
Payments by Loan Parties  


 


(a)           Unless Agent shall have received
notice from a Lender prior to the proposed date of any borrowing of LIBOR Loans
or Fixed Rate Loans (or, in the case of any borrowing of Base Rate Loans, prior
to 12:00 noon on the date of such borrowing) that such Lender will not make
available to Agent such Lender’s share of such borrowing, Agent may assume that
such Lender has made such share available on such date in accordance with Section 2.2.2
(or, in the case of a borrowing of Base Rate Loans, that such Lender has made
such share available in accordance with and at the time required by Section 2.2.2)
and may, in reliance upon such assumption, make available to the Company a
corresponding amount.  In such event, if
a Lender has not in fact made its share of the applicable borrowing available
to Agent, then the applicable Lender and the Loan Parties severally agree to
pay to Agent forthwith on demand such corresponding amount in immediately
available funds with interest thereon, for each day from and including the date
such amount is made available to the Company to but excluding the date of
payment to Agent, at (A) in the case of a payment to be made by such
Lender, the greater of the Federal Funds Rate and a rate determined by Agent in
accordance with banking industry rules on interbank compensation, plus any
administrative, processing or similar fees customarily charged by Agent in
connection with the foregoing and (B) in the case of a payment to be made
by the Loan Parties, the interest rate applicable to Base Rate Loans.  If the Loan Parties and such Lender shall pay
such interest to Agent for the same or an overlapping period, Agent shall
promptly remit to the Company the amount of such interest paid by the Loan
Parties for such period.  If such Lender
pays its share of the applicable 


 


28

















 


borrowing to Agent, then the amount so paid shall
constitute such Lender’s Loan included in such borrowing.  Any payment by the Loan Parties shall be
without prejudice to any claim the Loan Parties may have against a Lender that
shall have failed to make such payment to Agent


 


(b)           Unless Agent shall have
received notice from the Company prior to the date on which any payment is due
to Agent for the account of the Lenders or the L/C Issuer hereunder that a Loan
Party will not make such payment, Agent may assume that a Loan Party has made
such payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders or the L/C Issuer, as the case may be,
the amount due.  In such event, if a Loan
Party has not in fact made such payment, then each of the Lenders or the L/C
Issuer, as the case may be, severally agrees to repay to Agent forthwith on
demand the amount so distributed to such Lender or the L/C Issuer, in
immediately available funds with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date
of payment to Agent, at the greater of the Federal Funds Rate and a rate
determined by Agent in accordance with banking industry rules on interbank
compensation.  A notice of Agent to any
Lender or the Company with respect to any amount owing under this subsection (b) shall
be conclusive, absent manifest error.


 


7.1.3            Failure to Satisfy Conditions Precedent.  If any Lender makes available to Agent funds
for any Loan to be made by such Lender as provided in the foregoing provisions
of this Section 7.1, and such funds are not made available to the Company
by Agent because the conditions to the applicable Loan set forth in Article 12
are not satisfied or waived in accordance with the terms hereof, Agent shall
promptly and in any event within one Business Day return such funds (in like
funds as received from such Lender) to such Lender, with interest at the
Federal Funds Rate.


 


7.1.4            Obligations of Lenders Several.  The obligations of the Lenders hereunder to
make Loans, to fund participations in Letters of Credit and to make payments
under Section 16.5(c)  are several and not joint.  The failure of any Lender to make any Loan,
to fund any such participation or to make any payment under Section 16.5(c) on
any date required hereunder shall not relieve any other Lender of its
corresponding obligation to do so on such date, and no Lender shall be
responsible for the failure of any other Lender to so make its Loan, purchase
its participation or to make its payment under Section 16.5(c).


 


7.2           Sharing of Payments.  If any Lender shall, by exercising any right
of setoff or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of the Loans made by it, or the participations
in L/C Obligations held by it resulting in such Lender’s receiving payment of a
proportion of the aggregate amount of such Loans or participations and accrued
interest thereon greater than its pro  rata share thereof as
provided herein, then the Lender receiving such greater proportion shall (a) notify
Agent of such fact, and (b) purchase (for cash at face value)
participations in the Loans and subparticipations in L/C Obligations of the
other Lenders, or make such other adjustments as shall be equitable, so that
the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans and other amounts owing them, provided that:


 


29

















 


(i)            if any such
participations or subparticipations are purchased and all or any portion of the
payment giving rise thereto is recovered, such participations or
subparticipations shall be rescinded and the purchase price restored to the
extent of such recovery, without interest; and


 


(ii)           the provisions of this Section shall
not be construed to apply to (x) any payment made by a Loan Party pursuant
to and in accordance with the express terms of this Agreement or (y) any
payment obtained by a Lender as consideration for the assignment of or sale of
a participation in any of its Loans or subparticipations in L/C Obligations to
any assignee or participant, other than to a Loan Party or any Subsidiary
thereof (as to which the provisions of this Section shall apply).


 


Each Loan Party consents
to the foregoing and agrees, to the extent it may effectively do so under
applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against such Loan Party rights of setoff
and counterclaim with respect to such participation as fully as if such Lender
were a direct creditor of such Loan Party in the amount of such participation.


 


7.3           Application of
Certain Payments.  So long as no
Unmatured Event of Default or Event of Default has occurred and is continuing, (a) payments
matching specific scheduled payments then due shall be applied to those
scheduled payments and (b) voluntary and mandatory prepayments shall be
applied as set forth in Sections 6.2 and 6.3.  After the occurrence and during the
continuance of an Unmatured Event of Default or Event of Default, all amounts
collected or received by the Lender as proceeds from the sale of, or other
realization upon, all or any part of the collateral shall be applied as the
Lender shall determine in its discretion.


 


7.4           Due Date Extension.  If any payment of principal or interest with
respect to any of the Loans, or of any fees, falls due on a day which is not a
Business Day, then such due date shall be extended to the immediately following
Business Day (unless, in the case of a LIBOR Loan, such immediately following
Business Day is the first Business Day of a calendar month, in which case such
due date shall be the immediately preceding Business Day) and, in the case of
principal, additional interest shall accrue and be payable for the period of
any such extension.


 


7.5           Setoff.  Each Loan Party agrees that Agent, the L/C
Issuer and each Lender has all rights of set-off and bankers’ lien provided by
applicable law, and in addition thereto, each Loan Party agrees that at any
time any Event of Default exists, Agent, the L/C Issuer or any Lender may apply
to the payment of any Obligations of the Loan Parties hereunder, whether or not
then due, any and all balances, credits, deposits, accounts or moneys of any
Loan Party then or thereafter with Agent, the L/C Issuer or any Lender, as
applicable.


 


7.6           Taxes


 


(a)           To the extent permitted by applicable
law, all payments hereunder or under the Loan Documents (including any payment
of principal, interest, or fees) to, or for the benefit, of any person shall be
made by the Loan Parties free and clear of and without deduction or withholding
for, or account of, any Taxes now or hereinafter imposed by any taxing
authority.


 


(b)           If a Loan Party makes any payment hereunder or under
any Loan Document in respect of which it is required by applicable law to
deduct or withhold any Taxes, such Loan Party shall increase the


 


30

















 


payment hereunder or
under any such Loan Document such that after the reduction for the amount of
Taxes withheld (and any taxes withheld or imposed with respect to the
additional payments required under this Section 7.6(b)), the amount
paid to the Lender equals the amount that was payable hereunder or under any
such Loan Document without regard to this Section 7.6(b).  To the extent a Loan Party withholds any
Taxes on payments hereunder or under any Loan Document, such Loan Party shall
pay the full amount deducted to the relevant taxing authority within the time
allowed for payment under applicable law and shall deliver to the affected
Lender (with a copy to Agent) within 30 days after it has made payment to such
authority a receipt issued by such authority (or other evidence satisfactory to
the Lender) evidencing the payment of all amounts so required to be deducted or
withheld from such payment.


 


(c)           If any Lender is required by law to make any payments
of any Taxes on or in relation to any amounts received or receivable hereunder
or under any other Loan Document, or any Tax is assessed against any Lender
with respect to amounts received or receivable hereunder or under any other
Loan Document, the Loan Parties, jointly and severally, will indemnify such
person against (i) such Tax (and any reasonable counsel fees and expenses
associated with such Tax) and (ii) any taxes imposed as a result of the
receipt of the payment under this Section 7.6(c).  A certificate prepared in good faith as to
the amount of such payment by the Lender shall, absent manifest error, be
final, conclusive, and binding on all parties.


 


SECTION 8            INCREASED COSTS;
SPECIAL PROVISIONS FOR LIBOR LOANS.


 


8.1           Increased Costs


 


(a)           If, after the date
hereof, the adoption of, or any change in, any applicable law, rule or
regulation, or any change in the interpretation or administration of any
applicable law, rule or regulation by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender with any request or directive (whether or
not having the force of law) of any such authority, central bank or comparable
agency:  (i) shall impose, modify or
deem applicable any reserve (including any reserve imposed by the FRB, but
excluding any reserve included in the determination of the LIBOR Rate pursuant
to Section 4), special deposit or similar requirement against
assets of, deposits with or for the account of, or credit extended by such
Lender; or (ii) shall impose on such Lender any other condition affecting
its LIBOR Loans, its Note or its obligation to make LIBOR Loans; and the result
of anything described in clauses (i) and (ii) above is to increase
the cost to (or to impose a cost on) such Lender (or any LIBOR Office of such
Lender) of making or maintaining any LIBOR Loan, or to reduce the amount of any
sum received or receivable by such Lender (or its LIBOR Office) under this
Agreement or under its Note with respect thereto, then upon demand by such
Lender (which demand shall be accompanied by a statement setting forth the
basis for such demand and a calculation of the amount thereof in reasonable
detail), the Loan Parties shall pay to such Lender such additional amount as
will compensate such Lender for such increased cost or such reduction, so long
as such amounts have accrued on or after the day which is 180 days prior to the
date on which such Lender first made demand therefor.


 


(b)           If any Lender shall reasonably determine that any
change in, or the adoption or phase-in of, any applicable law, rule or
regulation regarding capital adequacy of such Lender, 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, or the compliance by such Lender or any Person controlling such Lender
with any request or directive regarding capital adequacy of such Lender
(whether or not having the force of law) by any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on such Lender’s or such controlling Person’s capital as a consequence of such
Lender’s obligations hereunder or under any Letter of Credit to a level below
that which such Lender or such controlling Person could have achieved but for
such change, adoption, phase-in or compliance (taking into consideration such
Lender’s or such controlling Person’s policies


 


31

















 


with respect to capital
adequacy of such Lender) by an amount deemed by such Lender or such controlling
Person to be material, then from time to time, upon demand by such Lender
(which demand shall be accompanied by a statement setting forth the basis for
such demand and a calculation of the amount thereof in reasonable detail), the
Loan Parties shall pay to such Lender such additional amount as will compensate
such Lender or such controlling Person for such reduction so long as such
amounts have accrued on or after the day which is 180 days prior to the date on
which such Lender first made demand therefor.


 


8.2           Basis for
Determining Interest Rate Inadequate or Unfair. If:


 


(a)           any Lender reasonably
determines (which determination shall be binding and conclusive on the Loan
Parties) that by reason of circumstances affecting the interbank LIBOR market
adequate and reasonable means do not exist for ascertaining the applicable
LIBOR Rate; or


 


(b)           any Lender reasonably
determines that the LIBOR Rate will not adequately and fairly reflect the cost
to such Lender of maintaining or funding LIBOR Loans for such Interest Period
(taking into account any amount to which such Lender may be entitled under Section 8.1)
or that the making or funding of LIBOR Loans has become impracticable as a
result of an event occurring after the date of this Agreement which in the
opinion of such Lender materially affects such Loans;


 


then such Lender shall promptly
notify the Company thereof and, so long as such circumstances shall continue, (i) such
Lender shall be under no obligation to make or convert any Base Rate Loans into
LIBOR Loans and (ii) on the last day of the current Interest Period for
each LIBOR Loan, such Loan shall, unless then repaid in full, automatically
convert to a Base Rate Loan.


 


8.3           Changes in Law
Rendering LIBOR Loans Unlawful.  If
any change in, or the adoption of any new, law or regulation, or any change in
the interpretation of any applicable law or regulation by any governmental or
other regulatory body charged with the administration thereof, should make it
(or in the good faith judgment of any Lender cause a substantial question as to
whether it is) unlawful for any Lender to make, maintain or fund LIBOR Loans,
then such Lender shall promptly notify the Company and, so long as such
circumstances shall continue, (a) such Lender shall have no obligation to
make or convert any Base Rate Loan into a LIBOR Loan and (b) on the last
day of the current Interest Period for each LIBOR Loan of such Lender (or, in
any event, on such earlier date as may be required by the relevant law,
regulation or interpretation), such LIBOR Loan shall, unless then repaid in
full, automatically convert to a Base Rate Loan.  Each Base Rate Loan made by a Lender which,
but for the circumstances described in the foregoing sentence, would be a LIBOR
Loan (an “Affected Loan”) shall remain outstanding for the period
corresponding to the Group of LIBOR Loans of which such Affected Loan would be
a part absent such circumstances.


 


8.4           Funding Losses.  The Loan Parties hereby agree that upon
demand by any Lender (which demand shall be accompanied by a statement setting
forth the basis for the amount being claimed), the Loan Parties will indemnify
such Lender against any net loss or expense which such Lender may sustain or
incur (including any net loss or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by such Lender to fund or
maintain any LIBOR Loan), as reasonably determined by such Lender, as a result
of (a) any 


 


32

















 


payment, prepayment or
conversion of any LIBOR Loan of such Lender on a date other than the last day
of an Interest Period for such Loan (including any conversion pursuant to Section 8.3)
or (b) any failure of the Company or another Loan Party to borrow, convert
or continue any Loan on a date specified therefor in a notice of borrowing,
conversion or continuation pursuant to this Agreement.  For this purpose, all such notices to any
Lender pursuant to this Agreement shall be deemed to be irrevocable.


 


8.5           Right of the Lenders
to Fund through Other Offices.  Each
Lender may, if it so elects, fulfill its commitment as to any LIBOR Loan by
causing a foreign branch or Affiliate of such Lender to make such Loan; provided
that in such event for the purposes of this Agreement such Loan shall be deemed
to have been made by such Lender and the obligation of the Company to repay
such Loan shall nevertheless be to such Lender and shall be deemed held by it,
to the extent of such Loan, for the account of such branch or Affiliate.


 


8.6           Discretion of the
Lenders as to Manner of Funding.  Notwithstanding
any provision of this Agreement to the contrary, each Lender shall be entitled
to fund and maintain its funding of all or any part of its Loans in any manner
it sees fit, it being understood, however, that for the purposes of this
Agreement all determinations hereunder shall be made as if such Lender had
actually funded and maintained each LIBOR Loan during each Interest Period for
such Loan through the purchase of deposits having a maturity corresponding to
such Interest Period and bearing an interest rate equal to the LIBOR Rate for
such Interest Period.


 


8.7           Mitigation of
Circumstances.  Each Lender shall
promptly notify the Company of any event of which it has knowledge which will
result in, and will use reasonable commercial efforts available to it (and not,
in such Lender’s sole judgment, otherwise disadvantageous to such Lender) to
mitigate or avoid, (i) any obligation by the Loan Parties to pay any
amount pursuant to Section 7.6  or 8.1
or (ii) the occurrence of any circumstances described in Section 8.2
or 8.3 (and, if such Lender has given notice of any such event described
in clause (i) or (ii) above and thereafter such event ceases to exist,
such Lender shall promptly so notify the Company).  Without limiting the foregoing, each Lender
will designate a different funding office if such designation will avoid (or
reduce the cost to the Loan Parties of) any event described in clause (i) or
(ii) above and such designation will not, in such Lender’s sole judgment,
be otherwise disadvantageous to such Lender.


 


8.8           Conclusiveness of
Statements; Survival of Provisions.  Determinations
and statements of any Lender pursuant to Section 8.1, 8.2, 8.3
or 8.4 shall be conclusive absent demonstrable error.  Each Lender may use reasonable averaging and
attribution methods in determining compensation under Sections 8.1 and 8.4,
and the provisions of such Sections shall survive repayment of the Obligations,
cancellation of the Note, expiration or termination of the Letters of Credit
and termination of this Agreement.


 


SECTION 9            REPRESENTATIONS AND
WARRANTIES.


 


To induce the Lenders to
enter into this Agreement and to induce the Lenders to make Loans and/or issue
Letters of Credit hereunder, each Loan Party represents and warrants to the Lenders
that:


 


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9.1           Organization.  Each Loan Party is validly existing and in
good standing under the laws of its jurisdiction of organization; and each Loan
Party is duly qualified to do business in each jurisdiction where, because of
the nature of its activities or properties, such qualification is required,
except for such jurisdictions where the failure to so qualify would not have a
Material Adverse Effect.


 


9.2           Authorization; No
Conflict.  Each Loan Party is duly
authorized to execute and deliver each Loan Document to which it is a party, is
duly authorized to borrow monies hereunder and is duly authorized to perform
its Obligations under each Loan Document to which it is a party.  The execution, delivery and performance by
each Loan Party of each Loan Document to which it is a party, and the
borrowings by the Loan Parties hereunder, do not and will not (a) require
any consent or approval of any governmental agency or authority (other than any
consent or approval which has been obtained and is in full force and effect), (b) conflict
with (i) any provision of law, (ii) the charter, by-laws or other
organizational documents of any Loan Party or (iii) any agreement,
indenture, instrument or other document, or any judgment, order or decree,
which is binding upon any Loan Party or any of their respective properties or (c) require,
or result in, the creation or imposition of any Lien on any asset of any Loan
Party (other than Liens in favor of Agent, for the ratable benefit of Agent and
the Lenders, created pursuant to the Collateral Documents).


 


9.3           Validity and Binding
Nature.  Each of this Agreement and
each other Loan Document to which any Loan Party is a party is the legal, valid
and binding obligation of such Person, enforceable against such Person in
accordance with its terms, subject to bankruptcy, insolvency and similar laws
affecting the enforceability of creditors’ rights generally and to general
principles of equity.


 


9.4           Financial Condition.  The audited consolidated financial statements
of the Company and its Subsidiaries as at December 29, 2007 and the
unaudited consolidated financial statements of the Company and the Subsidiaries
as at March 29, 2008, copies of each of which have been delivered to Agent
and each Lender, were prepared in accordance with GAAP (subject, in the case of
such unaudited statements, to the absence of footnotes and to normal year-end
adjustments) and present fairly the consolidated financial condition of the
Company and its Subsidiaries as at such dates and the results of their
operations for the periods then ended.


 


9.5           No Material Adverse
Change.  Since December 29,
2007, there has been no material adverse change in the financial condition,
operations, assets, business, properties or prospects of the Loan Parties taken
as a whole.


 


9.6           Litigation and
Contingent Liabilities.  No
litigation (including derivative actions), arbitration proceeding or
governmental investigation or proceeding is pending or, to the knowledge of any
Loan Party, threatened against any Loan Party which might reasonably be
expected to have a Material Adverse Effect, except as set forth in Schedule
9.6.  Other than any liability
incident to such litigation or proceedings, no Loan Party has any material contingent
liabilities not listed on Schedule 9.6 or permitted by Section 11.1.


 


9.7           Ownership of
Properties; Liens.  Each Loan Party
owns good and, in the case of real property, 
marketable title to all of its properties and assets, real and personal,
tangible and 


 


34

















 


intangible, of any nature
whatsoever (including patents, trademarks, trade names, service marks and
copyrights), free and clear of all Liens, charges and claims (including
infringement claims with respect to patents, trademarks, service marks,
copyrights and the like) except as permitted by Section 11.2 and
listed in Schedule 9.7.


 


9.8           Equity Ownership;
Subsidiaries.  All issued and
outstanding Capital Securities of each Loan Party are duly authorized and
validly issued, fully paid, non-assessable, and free and clear of all Liens
other than those in favor of Agent, for the ratable benefit of Agent and the
Lenders, and such securities were issued in compliance with all applicable
state and federal laws concerning the issuance of securities.  As of the Closing Date, the Company has no
Subsidiaries other than those specifically disclosed in part (a) of Schedule
9.8 and no Loan Party has material Investments in any other corporation or
entity other than those specifically disclosed in part (b) of Schedule
9.8.  As of the Closing Date, each
Subsidiary is a Wholly-Owned Subsidiary and all of the issued and outstanding
Capital Securities of each Wholly-Owned Subsidiary is, directly or indirectly,
owned by the Company.


 


9.9           Pension Plans


 


(a)           The Unfunded Liability of all Pension
Plans does not in the aggregate exceed twenty percent of the Total Plan
Liability for all such Pension Plans. 
Each Pension Plan complies in all material respects with all applicable
requirements of law and regulations.  No
contribution failure under Section 412 of the Code, Section 302 of
ERISA or the terms of any Pension Plan has occurred with respect to any Pension
Plan, sufficient to give rise to a Lien under Section 302(f) of ERISA,
or otherwise to have a Material Adverse Effect. 
There are no pending or, to the knowledge of any Loan Party, threatened,
claims, actions, investigations or lawsuits against any Pension Plan, any
fiduciary of any Pension Plan, or the Company or any other member of the
Controlled Group with respect to a Pension Plan or a Multiemployer Pension Plan
which could reasonably be expected to have a Material Adverse Effect.  Neither the Company nor any other member of
the Controlled Group has engaged in any prohibited transaction (as defined in Section 4975
of the Code or Section 406 of ERISA) in connection with any Pension Plan
or Multiemployer Pension Plan which would subject that Person to any material
liability.  Within the past five years,
neither the Company nor any other member of the Controlled Group has engaged in
a transaction which resulted in a Pension Plan with an Unfunded Liability being
transferred out of the Controlled Group, which could reasonably be expected to
have a Material Adverse Effect.  No
Termination Event has occurred or is reasonably expected to occur with respect
to any Pension Plan, which could reasonably be expected to have a Material
Adverse Effect.


 


(b)           All contributions (if any) have been made to any
Multiemployer Pension Plan that are required to be made by the Company or any
other member of the Controlled Group under the terms of the plan or of any
collective bargaining agreement or by applicable law; neither the Company nor
any other member of the Controlled Group has withdrawn or partially withdrawn
from any Multiemployer Pension Plan, incurred any withdrawal liability with
respect to any such plan or received notice of any claim or demand for
withdrawal liability or partial withdrawal liability from any such plan, and no
condition has occurred which, if continued, could result in a withdrawal or
partial withdrawal from any such plan; and neither the Company nor any other
member of the Controlled Group has received any notice that any Multiemployer
Pension Plan is in reorganization, that increased contributions may be required
to avoid a reduction in plan benefits or the imposition of any excise tax, that
any such plan is or has been funded at a rate less than that required under Section 412
of the Code, that any such plan is or may be terminated, or that any such plan
is or may become insolvent.


 


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9.10         Investment Company Act.  No Loan Party is an “investment company” or a
company “controlled” by an “investment company” or a “subsidiary” of an “investment
company,” within the meaning of the Investment Company Act of 1940.


 


9.11         Public Utility Holding
Company Act.  No 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,”
within the meaning of the Public Utility Holding Company Act of 2005.


 


9.12         Regulation U.  No Loan Party is engaged principally, or as
one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying Margin Stock.


 


9.13         Taxes; Tax Shelter
Registration


 


(a)           Each Loan Party has timely filed all
tax returns and reports required by law to have been filed by it and has paid
all taxes and governmental charges due and payable with respect to such return,
except any such taxes or charges which are being diligently contested in good
faith by appropriate proceedings and for which adequate reserves in accordance
with GAAP shall have been set aside on its books.  The Loan Parties have made adequate reserves
on their books and records in accordance with GAAP for all taxes that have
accrued but which are not yet due and payable. 
No Loan Party has participated in any transaction that relates to a year
of the taxpayer (which is still open under the applicable statute of
limitations) which is a “reportable transaction” within the meaning of Treasury
Regulation section 1.6011-4(b)(2) (irrespective of the date when the
transaction was entered into).


 


(b)           No Loan Party intends to treat any of the transactions
contemplated by any Loan Document as being a “reportable transaction” within
the meaning of Treasury Regulation Section 1.6011-4.


 


9.14         Solvency, etc.  On the Closing Date, and immediately prior to
and after giving effect to the issuance of each Letter of Credit and each
borrowing hereunder and the use of the proceeds thereof, with respect to each
Loan Party, individually, (a) the fair value of its assets is greater than
the amount of its liabilities (including disputed, contingent and unliquidated
liabilities) as such value is established and liabilities evaluated, (b) the
present fair saleable value of its assets is not less than the amount that will
be required to pay the probable liability on its debts as they become absolute
and matured, (c) it is able to realize upon its assets and pay its debts
and other liabilities (including disputed, contingent and unliquidated
liabilities) as they mature in the normal course of business, (d) it does
not intend to, and does not believe that it will, incur debts or liabilities
beyond its ability to pay as such debts and liabilities mature and (e) it
is not engaged in business or a transaction, and is not about to engage in
business or a transaction, for which its property would constitute unreasonably
small capital.


 


9.15         Environmental Matters.  The on-going operations of each Loan Party
comply in all respects with all Environmental Laws, except such non-compliance
which could not (if enforced in accordance with applicable law) reasonably be
expected to result, either individually or in the aggregate, in a Material
Adverse Effect.  Each Loan Party has
obtained, and maintained in good standing, all licenses, permits,
authorizations, registrations and other approvals required under any
Environmental Law and required for their respective ordinary course operations,
and for their reasonably anticipated future operations, and each Loan Party is
in compliance with all 


 


36

















 


terms and conditions
thereof, except where the failure to do so could not reasonably be expected to
result in material liability to any Loan Party and could not reasonably be
expected to result, either individually or in the aggregate, in a Material
Adverse Effect.  No Loan Party or any of
its properties or operations is subject to, or reasonably anticipates the
issuance of, any written order from or agreement with any Federal, state or
local governmental authority, nor subject to any judicial or docketed
administrative or other proceeding, respecting any Environmental Law,
Environmental Claim or Hazardous Substance. 
There are no Hazardous Substances or other conditions or circumstances
existing with respect to any property, arising from operations prior to the
Closing Date, or relating to any waste disposal, of any Loan Party that would
reasonably be expected to result, either individually or in the aggregate, in a
Material Adverse Effect.  No Loan Party
has any underground storage tanks that are not properly registered or permitted
under applicable Environmental Laws or that at any time have released, leaked,
disposed of or otherwise discharged Hazardous Substances.


 


9.16         Insurance.  Each Loan Party and its properties are
insured with financially sound and reputable insurance companies which are not
Affiliates of the Loan Parties, in such amounts, with such deductibles and
covering such risks as are customarily carried by companies engaged in similar
businesses and owning similar properties in localities where such Loan Parties
operate.


 


9.17         Real Property.  Set forth on Schedule 9.17 is a
complete and accurate list, as of the Closing Date, of the address of all real
property owned or leased by any Loan Party, together with, in the case of
leased property, the name and mailing address of the lessor of such property.


 


9.18         Information.  All information heretofore or
contemporaneously herewith furnished in writing by any Loan Party to Agent or
any Lender for purposes of or in connection with this Agreement and the
transactions contemplated hereby is, and all written information hereafter
furnished by or on behalf of any Loan Party to Agent or any Lender pursuant
hereto or in connection herewith will be, true and accurate in every material
respect on the date as of which such information is dated or certified, and
none of such information is or will be incomplete by omitting to state any
material fact necessary to make such information not misleading in light of the
circumstances under which made (it being recognized by Agent and the Lenders
that any projections and forecasts provided by any Loan Party are based on good
faith estimates and assumptions believed by such Loan Party to be reasonable as
of the date of the applicable projections or assumptions and that actual
results during the period or periods covered by any such projections and
forecasts may differ from projected or forecasted results).


 


9.19         Intellectual Property.  Each Loan Party owns and possesses or has a
license or other right to use all patents, patent rights, trademarks, trademark
rights, trade names, trade name rights, service marks, service mark rights and
copyrights as are necessary for the conduct of the businesses of the Loan
Parties, without any infringement upon rights of others which could reasonably
be expected to have a Material Adverse Effect.


 


9.20         Burdensome Obligations.  No Loan Party is a party to any agreement or
contract or subject to any restriction contained in its organizational
documents which could reasonably be expected to have a Material Adverse Effect.


 


37

















 


9.21         Labor Matters.  No Loan Party is subject to any labor or
collective bargaining agreement.  There
are no existing or threatened strikes, lockouts or other labor disputes
involving any Loan Party that singly or in the aggregate could reasonably be
expected to have a Material Adverse Effect. 
Hours worked by and payment made to employees of the Loan Parties are
not in violation of the Fair Labor Standards Act or any other applicable law, rule or
regulation dealing with such matters.


 


9.22         No Default.  No Event of Default or Unmatured Event of
Default exists or would result from the incurrence by any Loan Party of any
Debt hereunder or under any other Loan Document.


 


9.23         Accounts.  No Loan Party maintains any deposit,
checking, brokerage or similar account with any bank, savings association,
financial institution or similar financial intermediary, other than those
identified on Schedule 9.23.*


 


9.24         Anti-Terrorism Law
Compliance.  None of the Loan Parties
is subject to or in violation of any law, regulation or list of any government
agency including, without limitation, the U.S. Office of Foreign Asset Control
(“OFAC”) list, Executive Order 13224 or the USA Patriot Act) that
prohibits or limits the conduct of business with or receiving of funds, goods
or services to or for the benefit of certain Persons specified therein or that
prohibits or limits any Bank from making any Advance or extension of credit to
any Loan Party or from otherwise conducting business with any Loan Party.


 


SECTION 10          AFFIRMATIVE COVENANTS.


 


Until the expiration or
termination of the Commitment and thereafter until all Obligations hereunder
and under the other Loan Documents are paid in full and all Letters of Credit
have been terminated, each Loan Party agrees that, unless at any time the
Required Lenders shall otherwise expressly consent in writing, it will:


 


10.1         Reports, Certificates
and Other Information.  Furnish to
Agent:


 


10.1.1          Annual Report.  Promptly when available and in any event
within ninety (90) days after the end of each Fiscal Year (a) a copy of
the annual audit report of the Company and its Subsidiaries for such Fiscal
Year, including therein consolidated balance sheets and consolidated statements
of income or operations, shareholder’s equity and cash flows of the Company and
its Subsidiaries as at the end of such Fiscal Year, together with a written
opinion from independent auditors of national standing selected by the Company
and reasonably acceptable to Agent and each Lender that (A) such
consolidated financial statements present fairly, in all material respects, the
financial position for the periods indicated in conformity with GAAP and (B) in
making the examination necessary for the signing of such annual audit report,
nothing came to the attention of such auditors that caused them to believe that
the Company was not in compliance with any provision of Section 11.1,
11.3, 11.4 or 11.13 of this Agreement; (b) a
comparison with the budget for such Fiscal Year and a comparison with the
previous


 






* Material has been omitted pursuant to a request
for confidential treatment and the material has been filed separately.


 


38
















 


Fiscal Year, certified by
a Senior Officer of the Company; and (c) statements of forecasted
consolidated income for the Company and its Subsidiaries for each Fiscal
Quarter in the current Fiscal Year and a forecasted consolidated balance sheet
of the Company and its Subsidiaries as at the end of such Fiscal Year, together
with supporting assumptions, all in reasonable detail and scope satisfactory to
Agent and each Lender and certified by a Senior Officer of the Company.


 


10.1.2      Monthly
Reports.  Promptly when available and
in any event within thirty (30) days after the end of each month, consolidated
balance sheets of the Company and its Subsidiaries as of the end of such month,
together with consolidated statements of income or operations for such month, together
with a comparison with the corresponding period of the previous Fiscal Year and
for the statements of income a comparison with the budget for such period of
the current Fiscal Year, certified by a Senior Officer of the Company.


 


10.1.3      Quarterly
Reports.  Promptly when available and
in any event within forty-five (45) days after the end of each quarter,
consolidated balance sheets of the Company and its Subsidiaries as of the end
of such quarter, together with consolidated statements of income or operations
for such quarter, and a consolidated statement of cash flows for the period
beginning with the first day of such Fiscal Year and ending on the last day of
such quarter, together with a comparison with the corresponding period of the
previous Fiscal Year and for the statements of income a comparison with the
budget for such period of the current Fiscal Year, certified by a Senior
Officer of the Company.


 


10.1.4      Compliance
Certificates.  Contemporaneously with
the furnishing of a copy of each annual audit report pursuant to Section 10.1.1
and each set of monthly statements pursuant to Section 10.1.2, a
duly completed compliance certificate in the form of Exhibit B,
with appropriate insertions, dated the date of such annual report or such
monthly statements and signed by a Senior Officer of the Company, containing (i) a
computation of each of the financial ratio set forth in Section 11.14
and to the effect that such officer has not become aware of any Event of
Default or Unmatured Event of Default that has occurred and is continuing or,
if there is any such event, describing it and the steps, if any, being taken to
cure it and (ii) a written statement of the Company’s management setting
forth a discussion of the Company’s financial condition, changes in financial
condition and results of operations.


 


10.1.5      Reports
to the SEC and to Shareholders.  Promptly upon the filing or sending thereof,
copies of all regular, periodic or special reports of any Loan Party filed with
the SEC; copies of all registration statements of any Loan Party filed with the
SEC (other than on Form S-8); and copies of all proxy statements or other
communications made to security holders generally.


 


10.1.6      Notice
of Default, Litigation and ERISA Matters.  Promptly upon becoming aware of any of the
following, written notice describing the same and the steps being taken by the
Company or the Subsidiary affected thereby with respect thereto:


 


(a)           the
occurrence of an Event of Default or an Unmatured Event of Default;


 


39

















 


(b)           any litigation, arbitration or
governmental investigation or proceeding not previously disclosed by the
Company to Agent and the Lenders which has been instituted or, to the knowledge
of any Loan Party, is threatened against any Loan Party or to which any of the
properties of any thereof is subject which might reasonably be expected to have
a Material Adverse Effect;


 


(c)           the institution of any steps by any
member of the Controlled Group or any other Person to terminate any Pension
Plan, or the failure of any member of the Controlled Group to make a required
contribution to any Pension Plan (if such failure is sufficient to give rise to
a Lien under Section 302(f) of ERISA) or to any Multiemployer Pension
Plan, or the taking of any action with respect to a Pension Plan which could
result in the requirement that the Company furnish a bond or other security to
the PBGC or such Pension Plan, or the occurrence of any event with respect to
any Pension Plan or Multiemployer Pension Plan which could result in the
incurrence by any member of the Controlled Group of any material liability,
fine or penalty (including any claim or demand for withdrawal liability or
partial withdrawal from any Multiemployer Pension Plan), or any material
increase in the contingent liability of the Company with respect to any
post-retirement welfare benefit plan or other employee benefit plan of the
Company or another member of the Controlled Group, or any notice that any
Multiemployer Pension Plan is in reorganization, that increased contributions
may be required to avoid a reduction in plan benefits or the imposition of an
excise tax, that any such plan is or has been funded at a rate less than that
required under Section 412 of the Code, that any such plan is or may be
terminated, or that any such plan is or may become insolvent;


 


(d)           any cancellation or material change
in any insurance maintained by any Loan Party; or


 


(e)           any other event (including (i) any
violation of any Environmental Law or the assertion of any Environmental Claim
or (ii) the enactment or effectiveness of any law, rule or
regulation) which might reasonably be expected to have a Material Adverse
Effect.


 


10.1.7          Borrowing
Base Certificates.  Within thirty
(30) days of the end of each month, a Borrowing Base Certificate dated as of
the end of such month and executed by a Senior Officer of the Company on behalf
of the Company (provided that (a) the Company may deliver a
Borrowing Base Certificate more frequently if it chooses and (b) at any
time an Event of Default exists, Agent or any Lender may require the Company to
deliver Borrowing Base Certificates more frequently).


 


10.1.8          Management
Reports.  Promptly upon receipt
thereof, copies of all detailed financial and management reports submitted to
the Company by independent auditors in connection with each annual or interim
audit made by such auditors of the books of the Company.


 


10.1.9          Subordinated
Debt Notices.  Promptly following
receipt, copies of any notices (including notices of default or acceleration)
received from any holder or trustee of, under or with respect to any
Subordinated Debt.


 


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10.1.10        Other
Information.  Promptly from time to
time, such other information concerning the Loan Parties as Agent or any Lender
may reasonably request.


 


10.2         Books, Records and Inspections.  Keep, and cause each other Loan Party to
keep, its books and records in accordance with sound business practices
sufficient to allow the preparation of financial statements in accordance with
GAAP; implement and maintain a cash management system reasonably acceptable to
Agent; permit, and cause each other Loan Party to permit, Agent or any
representative thereof to inspect the properties and operations of the Loan
Parties; and permit, and cause each other Loan Party to permit, at any
reasonable time and with reasonable notice (or at any time without notice if an
Event of Default exists), Agent or any representative thereof to visit any or
all of its offices, to discuss its financial matters with its officers and its
independent auditors (and the Company hereby authorizes such independent
auditors to discuss such financial matters with Agent or any representative
thereof), and to examine (and, at the expense of the Loan Parties, photocopy
extracts from) any of its books or other records; and permit, and cause each
other Loan Party to permit, Agent and its representatives to inspect the
Inventory and other tangible assets of the Loan Parties, to perform appraisals
of the equipment of the Loan Parties, and to inspect, audit, check and make
copies of and extracts from the books, records, computer data, computer
programs, journals, orders, receipts, correspondence and other data relating to
Inventory, Accounts and any other collateral. 
All such inspections or audits by Agent shall be at the Company’s
expense, provided that (i) so long
as no Event of Default or Unmatured Event of Default exists, the Company shall
not be required to reimburse Agent for inspections or audits more frequently
than once each Fiscal Year, and (ii) without limiting Agent’s rights under
clause (i) of this Section 10.2, Agent may at the Company’s expense
not later than September 30, 2008 conduct such audit or inspection in
respect of the Company’s (and the applicable Loan Party’s) leasing portfolio
and reasonably related operations.


 


10.3         Maintenance of Property; Insurance 


 


(a)           Keep, and cause each other Loan Party
to keep, all property useful and necessary in the business of the Loan Parties
in good working order and condition, ordinary wear and tear excepted.


 


(b)           Maintain, and cause each other Loan
Party to maintain, with responsible insurance companies, such insurance
coverage as may be required by any law or governmental regulation or court
decree or order applicable to it and such other insurance, to such extent and
against such hazards and liabilities, as is customarily maintained by companies
similarly situated; and, upon request of Agent, furnish to Agent a certificate
setting forth in reasonable detail the nature and extent of all insurance
maintained by the Loan Parties.  The
Company shall cause each issuer of an insurance policy to provide Agent with an
endorsement (i) showing Agent as loss payee with respect to each policy of
property or casualty insurance and naming Agent as an additional insured with
respect to each policy of liability insurance, (ii) providing that 30 days’
notice will be given to Agent prior to any cancellation of, material reduction
or change in coverage provided by or other material modification to such policy
and (iii) reasonably acceptable in all other respects to Agent.


 


10.4         Compliance with Laws; Payment of
Taxes and Liabilities. 


 


(a)           Comply, and cause each other Loan
Party to comply, in all material respects with all applicable laws, rules,
regulations, decrees, orders, judgments, licenses and permits, except where
failure to comply could not reasonably be expected to have a Material Adverse
Effect; (b) without limiting clause (a) above, ensure, and
cause each other Loan Party to ensure, that no person who owns a 


 


41

















 


controlling interest in or otherwise controls a Loan
Party is or shall be (i) listed on the Specially Designated Nationals and
Blocked Person List maintained by the OFAC, Department of the Treasury, and/or
any other similar lists maintained by OFAC pursuant to any authorizing statute,
Executive Order or regulation or (ii) a person designated under Section 1(b),
(c) or (d) of Executive Order No. 13224 (September 23,
2001), any related enabling legislation or any other similar Executive Orders, (c) without
limiting clause (a) above, comply, and cause each other Loan Party
to comply, with all applicable Bank Secrecy Act (“BSA”) and anti-money
laundering laws and regulations and (d) pay, and cause each other Loan
Party to pay, prior to delinquency, all taxes and other governmental charges
against it or any collateral, as well as claims of any kind which, if unpaid,
could become a Lien on any of its property; provided that the foregoing
shall not require any Loan Party to pay any such tax or charge so long as it
shall contest the validity thereof in good faith by appropriate proceedings and
shall set aside on its books adequate reserves with respect thereto in
accordance with GAAP and, in the case of a claim which could become a Lien on
any collateral, such contest proceedings shall stay the foreclosure of such
Lien or the sale of any portion of the collateral to satisfy such claim.


 


10.5         Maintenance of Existence, etc.  Maintain and preserve, and (subject to Section 11.5)
cause each other Loan Party to maintain and preserve, (a) its existence
and good standing in the jurisdiction of its organization and (b) its
qualification to do business and good standing in each jurisdiction where the
nature of its business makes such qualification necessary (other than such
jurisdictions in which the failure to be qualified or in good standing could
not reasonably be expected to have a Material Adverse Effect).


 


10.6         Use of Proceeds.  Use the proceeds of the Loans and the Letters
of Credit solely for working capital purposes, for Acquisitions permitted by Section 11.5,
for Capital Expenditures, for stock repurchases and for other general business
purposes; and not use or permit any proceeds of any Loan to be used, either
directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of “purchasing or carrying” any Margin Stock.


 


10.7         Employee Benefit Plans 


 


(a)           Maintain, and cause each other member
of the Controlled Group to maintain, each Pension Plan in substantial
compliance with all applicable requirements of law and regulations.


 


(b)           Make, and cause each other member of
the Controlled Group to make, on a timely basis, all required contributions to
any Multiemployer Pension Plan.


 


(c)           Not, and not permit any other member
of the Controlled Group to (i) seek a waiver of the minimum funding
standards of ERISA, (ii) terminate or withdraw from any Pension Plan or
Multiemployer Pension Plan or (iii) take any other action with respect to
any Pension Plan that would reasonably be expected to entitle the PBGC to
terminate, impose liability in respect of, or cause a trustee to be appointed
to administer, any Pension Plan, unless the actions or events described in
clauses (i), (ii) and (iii) individually or in the aggregate would
not have a Material Adverse Effect.


 


10.8         Environmental Matters.  If any release or threatened release or other
disposal of Hazardous Substances shall occur or shall have occurred on any real
property or any other assets of any Loan Party, the Company or the applicable
Loan Party shall cause the prompt containment and removal of such Hazardous
Substances and the remediation of such real property or other assets as
necessary to comply with all Environmental Laws and to preserve the 


 


42

















 


value of such real property or other assets.  Without limiting the generality of the
foregoing, each Loan Party shall comply with any Federal or state judicial or
administrative order requiring the performance at any real property of any Loan
Party of activities in response to the release or threatened release of a
Hazardous Substance.  To the extent that
the transportation of Hazardous Substances is permitted by this Agreement, the
Company shall, and shall cause its Subsidiaries to, dispose of such Hazardous
Substances, or of any other wastes, only at licensed disposal facilities
operating in compliance with Environmental Laws.


 


10.9         Tax Shelter Registration.  Notify Agent of any action (or the intention
to take an action) inconsistent with the representation in Section 9.13(b).  If the Company so notifies Agent, the Company
acknowledges and agrees that Agent may treat the transactions contemplated
hereby (or any single transaction contemplated hereby) as part of a transaction
that is subject to Treasury Regulation Section 301.6112-1, and Agent, as
applicable, may maintain the lists and other regulations required by such
Treasury Regulation.  To the extent Agent
determines to maintain such list, each Loan Party shall cooperate with Agent in
obtaining the information required under such Treasury Regulation.  Within 10 days after notifying Agent under
this Section 10.9, the Company shall deliver to Agent a duly completed
copy of IRS Form 8886 or any successor form.


 


10.10       Further Assurances.  Take such actions as are necessary or as Agent
or any Lender may reasonably request from time to time to ensure that the
Obligations of each Loan Party under the Loan Documents are secured by
substantially all of the assets of the Loan Parties (including, upon the
acquisition or creation thereof, any Subsidiary acquired or created after the
Closing Date), in each case as Agent may determine, including the execution and
delivery of guaranties, security agreements, pledge agreements, mortgages,
deeds of trust, financing statements and other documents, and the filing or
recording of any of the foregoing and the delivery of certificated securities
and other collateral with respect to which perfection is obtained by
possession.


 


10.11       Banking Relationship.  Utilize LaSalle as its primary bank of account
and depository for certain financial services, including the majority of
receipts, disbursements and cash management; provided, that, if
requested by the Company and consented to by LaSalle, which consent may not be
unreasonably withheld, the Loan Parties may utilize an alternate bank other
than LaSalle.


 


SECTION 11          NEGATIVE COVENANTS


 


Until the expiration or termination of the Commitment and thereafter
until all Obligations hereunder and under the other Loan Documents are paid in
full and all Letters of Credit have been terminated, each Loan Party agrees
that, unless at any time the Required Lenders shall otherwise expressly consent
in writing, it will:


 


11.1         Debt.  Not, and not permit any other Loan Party to,
incur, assume or suffer to exist any Debt, except:


 


(a)           Obligations under this Agreement and
the other Loan Documents;


 


43

















 


(b)           Debt secured by Liens permitted by Section 11.2(d),
and extensions, renewals and refinancings thereof; provided that the
aggregate amount of all such Debt at any time outstanding shall not exceed
$500,000;


 


(c)           Debt of the Company to any domestic
Wholly-Owned Subsidiary or Debt of any domestic Wholly-Owned Subsidiary to the
Company or another domestic Wholly-Owned Subsidiary; provided that such
Debt shall be subordinated to the Obligations of the Loan Parties hereunder in
a manner reasonably satisfactory to Agent and the Required Lenders;


 


(d)           Subordinated Debt;


 


(e)           Hedging Obligations incurred in favor
of any Lender or an Affiliate thereof for bona fide hedging purposes and not
for speculation;


 


(f)            Contingent Liabilities arising with
respect to customary indemnification obligations in favor of sellers in
connection with Acquisitions permitted under Section 11.5 and
purchasers in connection with dispositions permitted under Section 11.5;


 


(g)           other unsecured Debt, in addition to
the Debt listed above, in an aggregate outstanding amount not at any time
exceeding $250,000;


 


(h)           Accounts payable and trade debt
arising in the ordinary course of the Loan Parties’ business; and


 


(i)            Any non-recourse obligation of a
Loan Party arising from a discounting transaction in the ordinary course of
business.


 


11.2         Liens. Not, and not permit any
other Loan Party to, create or permit to exist any Lien on any of its real or
personal properties, assets or rights of whatsoever nature (whether now owned
or hereafter acquired), except:


 


(a)           Liens for taxes or other governmental
charges not at the time delinquent or thereafter payable without penalty or
being contested in good faith by appropriate proceedings and, in each case, for
which it maintains adequate reserves;


 


(b)           Liens arising in the ordinary course
of business (such as (i) Liens of carriers, warehousemen, mechanics and
materialmen and other similar Liens imposed by law, (ii) Liens in the form
of deposits or pledges incurred in connection with worker’s compensation,
unemployment compensation and other types of social security (excluding Liens
arising under ERISA), and (iii) Liens created in the ordinary course of
business arising from non-recourse discounting transactions including (without
limitation) liens against (A) the particular lease, (B) all equipment
subject to such lease, (C) all lease collateral for such lease, (D) all
warranty and other rights a Loan Party may have with respect to such lease and
the related equipment against the manufacturers of such equipment and against
the sellers and assignors from whom such Loan Party may have acquired such
lease and such equipment, (E) proceeds from any and all of the
foregoing.  Upon the written request of
the Company, each Lender agrees to execute a subordination agreement in form
and substance satisfactory to such Lender in connection with liens pursuant to Section 11.2(b)(iii);


 


44

















 


(c)           Liens arising in the ordinary course
of business in an amount of not more than $25,000;


 


(d)           subject to the limitation set forth
in Section 11.1(b), (i) Liens arising in connection with
Capital Leases (and attaching only to the property being leased), (ii) Liens
existing on property at the time of the acquisition thereof by any Loan Party
(and not created in contemplation of such acquisition) and (iii) Liens
that constitute purchase money security interests on any property securing debt
incurred for the purpose of financing all or any part of the cost of acquiring
such property, provided that any such Lien attaches to such property
within 60 days of the acquisition thereof and attaches solely to the property
so acquired;


 


(e)           attachments, appeal bonds, judgments
and other similar Liens, for sums not exceeding $250,000 arising in connection
with court proceedings, provided the execution or other enforcement of
such Liens is effectively stayed and the claims secured thereby are being
actively contested in good faith and by appropriate proceedings;


 


(f)            easements, rights of way,
restrictions, minor defects or irregularities in title and other similar Liens
not interfering in any material respect with the ordinary conduct of the
business of any Loan Party; and


 


(g)           Liens arising under the Loan
Documents.


 


11.3         Operating Leases.  Not permit the aggregate amount of all rental
payments under Operating Leases made (or scheduled to be made) by the Loan
Parties (on a consolidated basis) to exceed $1,000,000  in
any Fiscal Year.


 


11.4         Restricted Payments.  Not, and not permit any other Loan Party to, (a) make
any distribution to any holders of its Capital Securities, (b) purchase or
redeem any of its Capital Securities, (c) pay any management fees or
similar fees to any of its equityholders or any Affiliate thereof, (d) make
any redemption, prepayment, defeasance, repurchase or any other payment in
respect of any Subordinated Debt other than regular payments of principal and
interest as and when due under the Unsecured Notes subject to the terms of the
Subordination Agreement related thereto, or (e) set aside funds for any of
the foregoing.  Notwithstanding the
foregoing, so long as no Unmatured Event of Default or Event of Default has
occurred and is continuing or would occur as a result of any of the following, (i) any
Subsidiary may pay dividends or make other distributions to the Company or to a
domestic Wholly-Owned Subsidiary; (ii) the Company may purchase or redeem
any of its Capital Securities so long as after giving effect to such purchase
or redemption the Company will remain in compliance with all the financial
ratios and restrictions set forth in Sections 11.14, 11.15, 11.16
and 11.17, as certified by the Company in form and substance
satisfactory to Agent and the Required Lenders; (iii) the Company may make
payments in respect of Subordinated Debt to the extent permitted under the
applicable Subordination Agreement, and (iv) the Company may grant stock
options pursuant to a plan approved by the Shareholders of the Company.


 


11.5         Mergers, Consolidations, Sales.  Not, and not permit any other Loan Party to, (a) be
a party to any merger or consolidation, or purchase or otherwise acquire all or
substantially all of the assets or any Capital Securities of any class of, or
any partnership or joint 


 


45

















 


venture interest in, any other Person, (b) sell,
transfer, convey or lease all or any substantial part of its assets or Capital
Securities (including the sale of Capital Securities of any Subsidiary) except
for sales of inventory in the ordinary course of business, or (c) sell or
assign with or without recourse any receivables, except for (i) any such
merger, consolidation, sale, transfer, conveyance, lease or assignment of or by
any Wholly-Owned Subsidiary into the Company or into any other domestic
Wholly-Owned Subsidiary; (ii) any such purchase or other acquisition by
the Company or any domestic Wholly-Owned Subsidiary of the assets or Capital
Securities of any Wholly-Owned Subsidiary; (iii) sales and dispositions of
assets for at least fair market value (as determined by the Board of Directors
of the Company) so long as the net book value of all assets sold or otherwise
disposed of in any Fiscal Year does not exceed 10% of the net book value of the
consolidated assets of the Loan Parties as of the last day of the preceding
Fiscal Year; (iv) the discounting of non-recourse leases in the ordinary
course of business, and (v) any Acquisition by the Company or any domestic
Wholly-Owned Subsidiary where:


 


(A) the business or
division acquired are for use, or the Person acquired or invested in is
engaged, in a business engaged in by a Loan Party on the Closing Date;


 


(B) immediately
before and after giving effect to such Acquisition, no Event of Default or
Unmatured Event of Default shall exist;


 


(C) the
aggregate consideration to be paid by the Loan Parties (including any Debt
assumed or issued in connection therewith, the amount thereof to be calculated
in accordance with GAAP) in connection with such Acquisition (or any series of
related Acquisitions) is less than $10,000,000 individually and the
aggregate consideration for all Acquisitions by the Loan Parties since the
Closing Date does not exceed $10,000,000;


 


(D) immediately
after giving effect to such Acquisition, (i) the Company is in pro forma
compliance with all the financial ratios and restrictions set forth in Sections
11.14, 11.15, 11.16 and 11.17 and (ii) Loan
Availability minus Outstandings is greater than or equal to $5,000,000;


 


(E) in the case of
the Acquisition of any Person, the Board of Directors of such Person has
approved such Acquisition;


 


(F) reasonably prior
to such Acquisition, Agent and each Lender shall have received complete
executed or conformed copies of each material document, instrument and
agreement to be executed in connection with such Acquisition together with all
lien search reports and lien release letters and other documents as Agent or
such Lender may require to evidence the termination of Liens on the assets or
business to be acquired if applicable;


 


(G) not less than
ten (10) Business Days prior to such Acquisition, Agent and each Lender
shall have received an acquisition summary with respect to the Person and/or
business or division to be acquired or invested in, such summary to include a
reasonably detailed description thereof (including financial information) and
operating results (including financial statements for the most recent 12 month
period for which they are available and as otherwise available), the terms and
conditions, including economic terms, of the proposed Acquisition, and the
Company’s calculation of pro forma EBITDA relating thereto;


 


46

















 


(H) consents have
been obtained in favor of Agent and each Lender to the collateral assignment of
rights and indemnities under the related acquisition documents and opinions of
counsel for the Loan Parties and (if delivered to the Loan Party) the selling
party in favor of Agent and each Lender have been delivered; and


 


(I) the provisions
of Section 10.10 have been satisfied.


 


11.6         Modification of Organizational
Documents.  Not permit the charter,
by-laws or other organizational documents of any Loan Party to be amended or
modified in any way which could reasonably be expected to materially adversely
affect the interests of any Lender.


 


11.7         Affiliate Transactions. Not, and
not permit any other Loan Party to, enter into, or cause, suffer or permit to
exist any transaction, arrangement or contract with any of its other Affiliates
(other than the Loan Parties) which is on terms which are less favorable than
are obtainable from any Person which is not one of its Affiliate, except for
those listed on Schedule 11.7.


 


11.8         Unconditional Purchase Obligations.
 Not, and not permit any other Loan Party
to, enter into or be a party to any contract for the purchase of materials,
supplies or other property or services if such contract requires that payment
be made by it regardless of whether delivery is ever made of such materials,
supplies or other property or services.


 


11.9         Inconsistent Agreements.  Not, and not permit any other Loan Party to,
enter into any agreement containing any provision which would (a) be
violated or breached by any borrowing by a Loan Party hereunder or by the
performance by any Loan Party of any of its Obligations hereunder or under any
other Loan Document, (b) prohibit any Loan Party from granting to Agent,
for the ratable benefit of Agent and the Lenders, a Lien on any of its assets
or (c) create or permit to exist or become effective any encumbrance or
restriction on the ability of any Subsidiary to (i) pay dividends or make
other distributions to the Company or any other Subsidiary, or pay any Debt
owed to the Company or any other Subsidiary, (ii) make loans or advances
to any Loan Party or (iii) transfer any of its assets or properties to any
Loan Party, other than (A) customary restrictions and conditions contained
in agreements relating to the sale of all or a substantial part of the assets
of any Subsidiary pending such sale, provided that such restrictions and
conditions apply only to the Subsidiary to be sold and such sale is permitted
hereunder, (B) restrictions or conditions imposed by any agreement
relating to purchase money Debt, Capital Leases and other secured Debt
permitted by this Agreement if such restrictions or conditions apply only to
the property or assets securing such Debt and (C) customary provisions in
leases and other contracts restricting the assignment thereof.


 


11.10       Business Activities.  Not, and not permit any other Loan Party to,
engage in any line of business other than the businesses engaged in and
businesses reasonably related thereto.


 


11.11       Subordinated Debt Documents.  Not amend, modify or supplement any
Subordinated Debt Document in any manner that could affect or impair the rights
of the Lenders contemplated in the Subordination Agreements or amend, modify or
supplement the Subordination Agreements in any respect, in each case without
the prior written consent of the Required Lenders.


 


47

















 


11.12       Fiscal Year.  Not change its Fiscal Year.


 


11.13       Control Agreements.  Not fail to deliver to Agent within thirty
(30) days after Agent’s request, a Control Agreement for any deposit, checking
or brokerage account opened or maintained by a Loan Party.


 


11.14       Tangible Net Worth.  Not permit the Tangible Net Worth of the
Company and the Subsidiaries to be:


 


(a)           as
of the Closing Date, less than Nineteen Million One Hundred Thousand Dollars
($19,100,000); and


 


(b)           as of the last Business Day of each
month following the Closing Date, the sum of the minimum Tangible Net Worth
from the immediately preceding month plus fifty percent (50%) of the net
income of the month then ended, if positive.


 


11.15       Debt Service Coverage.  As of the end of each Fiscal Quarter, not fail
to maintain a ratio of (i) (a) EBITDA, plus (b) leasing
expense, minus (c)  capital expenditures, and minus (d) 
cash taxes, divided by (ii) cash interest (including leasing expense), of
not less than 2.00 to 1.00.


 


11.16       Maximum Leverage.  As of the end of each Fiscal Quarter, not fail
to maintain a ratio of (i) Debt of the Loan Parties minus
consolidated Subordinated Debt minus non-recourse Debt of the Loan
Parties in connection with discounting activities of the Loan Parties to (ii) consolidated
Tangible Net Worth that shall not exceed 3.00 to 1.00.


 


11.17       Eligible Leases.  Not permit the product of (i) the net
book value of the Eligible Leased Assets times (ii) ninety percent (90%)
to exceed, at any time, the Equipment cost with respect to the Eligible Leases.


 


SECTION 12          EFFECTIVENESS; CONDITIONS OF LENDING,
ETC.


 


The obligation of each
Lender to make the Loans and/or to issue Letters of Credit is subject to the
following conditions precedent:


 


12.1         Initial Credit Extension.  The obligation of each Lender to make the
initial Loans and the obligation of the L/C Issuer to issue the initial Letter
of Credit (whichever first occurs) is, in addition to the conditions precedent
specified in Section 12.2, subject to the condition precedent that
Agent shall have received all of the following, each duly executed and dated
the Closing Date (or such earlier date as shall be satisfactory to Agent), in
form and substance satisfactory to Agent and each Lender (and the date on which
all such conditions precedent have been satisfied or waived in writing by Agent
is called the “Closing Date”):


 


12.1.1          Notes.  A Note, duly executed by the Loan Parties, in
favor of each Lender.


 


12.1.2          Authorization Documents.  For each Loan Party, such Person’s (a) charter
(or similar formation document), certified by the appropriate governmental
authority; (b) good standing certificates in its state of incorporation
(or formation) and in each other 


 


48

















 


state requested by Agent; (c) bylaws (or similar
governing document); (d) resolutions of its board of directors (or similar
governing body) approving and authorizing such Person’s execution, delivery and
performance of the Loan Documents to which it is party and the transactions
contemplated thereby; and (e) signature and incumbency certificates of its
officers executing any of the Loan Documents (it being understood that the
Lenders may conclusively rely on each such certificate until formally advised
by a like certificate of any changes therein), all certified by its secretary
or an assistant secretary (or similar officer) as being in full force and
effect without modification.


 


12.1.3      Consents,
etc.  Certified copies of all
documents evidencing any necessary corporate or partnership action, consents
and governmental approvals (if any) required for the execution, delivery and
performance by the Loan Parties of the documents referred to in this Section 12.


 


12.1.4      Security
Documents.  A counterpart of the
Security Agreement executed by each Loan Party, a counterpart of the Pledge
Agreement executed by the Company, and a counterpart of a Control Agreement for
each account identified by Agent, executed by the applicable Loan Party and the
depository or financial intermediary, in each case together with all
instruments, transfer powers and other items required to be delivered in
connection therewith.


 


12.1.5      Financing
Statements.  UCC-1 financing
statements relating to the Collateral (as defined in the Security Agreement)
and the Capital Securities pledged pursuant to the Pledge Agreement, completed
and, if required, executed by each Loan Party, for filing in each jurisdiction
reasonably requested by Agent.


 


12.1.6      Opinions
of Counsel.  Opinions of counsel for
each Loan Party, including local counsel reasonably requested by Agent.


 


12.1.7      Insurance.
Evidence of the existence of insurance required to be maintained pursuant to Section 10.3(b),
together with evidence that Agent has been named as a lender’s loss payee and
an additional insured on all related insurance policies.


 


12.1.8      Payment
of Fees.  Evidence of payment by the
Company of all accrued and unpaid fees, costs and expenses to the extent then
due and payable on the Closing Date, together with all Attorney Costs of Agent
to the extent invoiced prior to the Closing Date, plus such additional
amounts of Attorney Costs as shall constitute Agent’s reasonable estimate of
Attorney Costs incurred or to be incurred by Agent through the closing
proceedings (provided that such estimate shall not thereafter preclude
final settling of accounts between the Company and Agent).


 


12.1.9      Search
Results; Lien Terminations.  Certified
copies of Uniform Commercial Code search reports and pending suit judgments and
tax lien search reports dated a date reasonably near to the Closing Date,
listing all effective financing statements, suits, judgments or tax liens which
name any Loan Party (under their present names and any previous names) as
debtors, together with copies of any such financing statements, suits, judgments
and tax liens.


 


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12.1.10        Filings,
Registrations and Recordings.  Agent
shall have received each document (including Uniform Commercial Code financing
statements) required by the Collateral Documents or under law or reasonably
requested by any Lender to be filed, registered or recorded in order to create
in favor of Agent, for the ratable benefit of Agent and the Lenders, a
perfected Lien on the collateral described therein, prior to any other Liens
(subject only to Liens permitted pursuant to Section 11.2), in
proper form for filing, registration or recording.


 


12.1.11        Borrowing Base Certificate.  A Borrowing Base Certificate dated as of the
Closing Date.


 


12.1.12        Closing
Certificate.  A certificate executed
by an officer of the Company on behalf of the Company certifying the matters
set forth in Section 12.2.1 as of the Closing Date.


 


12.1.13        Other Documents.  Such other documents as Agent or any Lender
may reasonably request.


 


12.2             Conditions.
 The obligation (a) of each Lender
to make each Loan and (b) of the L/C Issuer to issue each Letter of Credit
is subject to the following further conditions precedent that:


 


12.2.1          Compliance with Warranties, No
Default, etc.  Both before and after
giving effect to any borrowing and the issuance of any Letter of Credit, the
following statements shall be true and correct:


 


(a)           the representations and warranties of
each Loan Party set forth in this Agreement and the other Loan Documents shall
be true and correct in all respects with the same effect as if then made
(except to the extent stated to relate to a specific earlier date, in which
case such representations and warranties shall be true and correct as of such
earlier date); and


 


(b)           no Event of Default or Unmatured
Event of Default shall have then occurred and be continuing.


 


12.2.2          Confirmatory
Certificate.  If requested by any
Lender or the L/C Issuer, as applicable, such Lender or L/C Issuer shall
have received a certificate dated the date of such requested Loan or
Letter of Credit and signed by a duly authorized representative of the Company
as to the matters set out in Section 12.2.1 (it being understood
that each request by the Company for the making of a Loan or the issuance of a
Letter of Credit shall be deemed to constitute a representation and warranty by
the Company that the conditions precedent set forth in Section 12.2.1
will be satisfied at the time of the making of such Loan or the issuance of
such Letter of Credit), together with such other documents as such Lender or
L/C Issuer may reasonably request in support thereof.


 


SECTION 13     EVENTS OF DEFAULT AND THEIR EFFECT.


 


13.1         Events of Default.  Each of the following shall constitute an
Event of Default under this Agreement:


 


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13.1.1      Non-Payment of the Loans, etc.     Default
in the payment when due of the principal of any Loan; or default, and
continuance thereof for five days, in the payment when due of any interest,
fee, reimbursement obligation with respect to any Letter of Credit or other
amount payable by the Loan Parties hereunder or under any other Loan Document.


 


13.1.2      Non-Payment of Other Debt.     Any
default shall occur under the terms applicable to any Debt of any Loan Party in
an aggregate amount (for all such Debt so affected and including undrawn
committed or available amounts and amounts owing to all creditors under any
combined or syndicated credit arrangement) exceeding $250,000 and such default
shall (a) consist of the failure to pay such Debt when due, whether by
acceleration or otherwise, or (b) accelerate the maturity of such Debt or
permit the holder or holders thereof, or any trustee or agent for such holder
or holders, to cause such Debt to become due and payable (or require any Loan
Party to purchase or redeem such Debt or post cash collateral in respect
thereof) prior to its expressed maturity.


 


13.1.3      Other Material Obligations.     Default
in the payment when due, or in the performance or observance of, any material
obligation of, or condition agreed to by, any Loan Party with respect to any
material purchase or lease of goods or services where such default, singly or
in the aggregate with all other such defaults, might reasonably be expected to
have a Material Adverse Effect.


 


13.1.4      Bankruptcy, Insolvency, etc.     Any
Loan Party becomes insolvent or generally fails to pay, or admits in writing
its inability or refusal to pay, debts as they become due; or any Loan Party
applies for, consents to, or acquiesces in the appointment of a trustee,
receiver or other custodian for such Loan Party or any property thereof, or
makes a general assignment for the benefit of creditors; or, in the absence of
such application, consent or acquiescence, a trustee, receiver or other
custodian is appointed for any Loan Party or for a substantial part of the
property of any thereof and is not discharged within 60 days; or any
bankruptcy, reorganization, debt arrangement, or other case or proceeding under
any bankruptcy or insolvency law, or any dissolution or liquidation proceeding,
is commenced in respect of any Loan Party, and if such case or proceeding is
not commenced by such Loan Party, it is consented to or acquiesced in by such
Loan Party, or remains for 60 days undismissed; or any Loan Party takes any
action to authorize, or in furtherance of, any of the foregoing.


 


13.1.5      Non-Compliance with Loan Documents.     (a) Failure
by any Loan Party to comply with or to perform any covenant set forth in Section 10.1.5,
10.3(b), 10.5 or 10.9 or Section 11; or (b) failure
by any Loan Party to comply with or to perform any other provision of this
Agreement or any other Loan Document (and not constituting an Event of Default
under any other provision of this Section 13) and continuance of
such failure described in this clause (b) for 30 days.


 


13.1.6      Representations; Warranties.     Any
representation or warranty made by any Loan Party herein or any other Loan
Document is breached or is false or misleading in any material respect, or any
schedule, certificate, financial statement, report, notice or other writing
furnished by any Loan Party to Agent or any Lender in connection herewith is 


 


51


 

















 


false or misleading in any material respect on the
date as of which the facts therein set forth are stated or certified.


 


13.1.7      Pension Plans.     (a) Any
Person institutes steps to terminate a Pension Plan if as a result of such
termination the Company or any member of the Controlled Group could be required
to make a contribution to such Pension Plan, or could incur a liability or
obligation to such Pension Plan, in excess of $250,000; (b) a contribution
failure occurs with respect to any Pension Plan sufficient to give rise to a
Lien under Section 302(f) of ERISA; (c) the Unfunded Liability
exceeds twenty percent of the Total Plan Liability, or (d) there shall
occur any withdrawal or partial withdrawal from a Multiemployer Pension Plan
and the withdrawal liability (without unaccrued interest) to Multiemployer
Pension Plans as a result of such withdrawal (including any outstanding
withdrawal liability that the Company or any member of the Controlled Group
have incurred on the date of such withdrawal) exceeds $250,000.


 


13.1.8      Judgments.     Final
judgments which exceed an aggregate of $250,000 shall be rendered against any
Loan Party and shall not have been paid, discharged or vacated or had execution
thereof stayed pending appeal within 30 days after entry or filing of such
judgments.


 


13.1.9      Invalidity of
Collateral Documents, etc.     Any Collateral
Document shall cease to be in full force and effect; or any Loan Party (or any
Person by, through or on behalf of any Loan Party) shall contest in any manner
the validity, binding nature or enforceability of any Collateral Document.


 


13.1.10    Invalidity of
Subordination Provisions, etc.     Any
subordination provision in any document or instrument governing Subordinated
Debt, or any subordination provision in any guaranty by any Subsidiary of any
Subordinated Debt, shall cease to be in full force and effect, or any Loan
Party or any other Person (including the holder of any applicable Subordinated
Debt) shall contest in any manner the validity, binding nature or
enforceability of any such provision.


 


13.1.11        Change
of Control.     A Change of Control shall occur.


 


13.1.12   Material Adverse Effect.     The
occurrence of any event having a Material Adverse Effect.


 


13.2         Effect of Event of Default.     If
any Event of Default occurs and is continuing, Agent shall, at the request of,
or may, with the consent of, the Required Lenders, take any or all of the
following actions:


 


(a)           declare the Commitment of each Lender
to make Loans and any obligation of the L/C Issuer to issue Letters of Credit
to be terminated, whereupon such commitments and obligation shall be
terminated;


 


(b)           declare the unpaid principal amount
of all outstanding Loans, all interest accrued and unpaid thereon, and all
other amounts owing or payable hereunder or under any other Loan 


 


52


 

















 


Document to be immediately due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Company;


 


(c)           require that the Company Cash
Collateralize the L/C Obligations (in an amount equal to the Stated Amount
thereof); and


 


(d)           exercise on behalf of itself, the
Lenders and the L/C Issuer all rights and remedies available to it, the Lenders
and the L/C Issuer under the Loan Documents;


 


provided,
however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Company under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans and any obligation
of the L/C Issuer to make L/C Credit Extensions shall automatically terminate,
the unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable, and the
obligation of the Company to Cash Collateralize the L/C Obligations as
aforesaid shall automatically become effective, in each case without further
act of Agent or any Lender.


 


13.3         Application of Funds. After the
exercise of remedies provided for in Section 13.2 (or after the
Loans have automatically become immediately due and payable and the L/C
Obligations have automatically been required to be Cash Collateralized as set
forth in the proviso to Section 13.2), any amounts received on
account of the Obligations shall be applied by Agent in the following order:


 


First, to payment of that portion of the Obligations
constituting fees, indemnities, expenses and other amounts (including fees,
charges and disbursements of counsel to Agent (including fees and time charges
for attorneys who may be employees of Agent) and amounts payable under Section 7.6
or Section 8) payable to Agent in its capacity as such;


 


Second, to payment of that portion of the Obligations
constituting fees, indemnities and other amounts (other than principal,
interest and Letter of Credit fees) payable to Lenders and the L/C Issuer
(including fees, charges and disbursements of counsel to the respective Lenders
and the L/C Issuer (including fees and time charges for attorneys who may be
employees of any Lender or the L/C Issuer) and amounts payable under Section 7.6
or Section 8), ratably among them in proportion to the respective
amounts described in this clause Second payable to them;


 


Third, to payment of that portion of the Obligations
constituting accrued and unpaid Letter of Credit fees and interest on the
Loans, L/C Borrowings and other Obligations, ratably among Lenders and the L/C
Issuer in proportion to the respective amounts described in this clause Third
payable to them;


 


Fourth, to payment of that portion of the Obligations
constituting unpaid principal of the Loans and L/C Borrowings, ratably among
Lenders and the L/C Issuer in proportion to the respective amounts described in
this clause Fourth held by them;


 


Fifth, to Agent for the account of the L/C Issuer, to
Cash Collateralize that portion of L/C Obligations comprised of the aggregate
undrawn amount of Letters of Credit; and


 


Last, the balance, if any, after all of the Obligations
have been indefeasibly paid in full, to Borrower or as otherwise required by
law.


 


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Subject
to Section 2.3.2, amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Fifth above shall
be applied to satisfy drawings under such Letters of Credit as they occur.  If any amount remains on deposit as Cash
Collateral after all Letters of Credit have either been fully drawn or expired,
such remaining amount shall be applied to the other Obligations, if any, in the
order set forth above.


 


SECTION 14          ADMINISTRATIVE AGENT.


 


14.1         Appointment and Authorization of Administrative
Agent


 


(a)           Each of the Lenders and the L/C
issuer hereby irrevocably appoints LaSalle to act on its behalf as
Administrative Agent hereunder and under the other Loan Documents and
authorizes Agent to take such actions on its behalf and to exercise such powers
as are delegated to Agent by the terms hereof and thereof, together with such
actions and powers as are reasonably incidental thereto.  The provisions of this Article are
solely for the benefit of Agent, the Lenders and the L/C Issuer, and neither
the Company nor any other Loan Party shall have rights as a third party
beneficiary of any of such provisions.


 


(b)           Agent shall also act as the “collateral
agent” under the Loan Documents, and each of the Lenders and the L/C Issuer
hereby irrevocably appoints and authorizes Agent to act as the agent of such
Lender and the L/C Issuer for purposes of acquiring, holding and enforcing any
and all Liens on Collateral granted by any of the Loan Parties to secure any of
the Obligations, together with such powers and discretion as are reasonably
incidental thereto.  In this connection,
Agent, as “collateral agent” and any co-agents, sub-agents and
attorneys-in-fact appointed by Agent pursuant to Section 14.5 or otherwise
for purposes of holding or enforcing any Lien on the Collateral (or any portion
thereof) granted under the Collateral Documents, or for exercising any rights
and remedies thereunder at the direction of Agent), shall be entitled to the
benefits of all provisions of this Section 14 and Section 16, as
though such co-agents, sub-agents and attorneys-in-fact were the “collateral
agent” under the Loan Documents as if set forth in full herein with respect
thereto.


 


14.2         Rights as a Lender.    The
Person serving as Agent hereunder shall have the same rights and powers in its
capacity as a Lender as any other Lender and may exercise the same as though it
were not Agent and the term “Lender” or “Lenders” shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the
Person serving as Agent hereunder in its individual capacity.  Such Person and its Affiliates may accept
deposits from, lend money to, act as the financial advisor or in any other
advisory capacity for and generally engage in any kind of business with the
Company or any Subsidiary or other Affiliate thereof as if such Person were not
Agent hereunder and without any duty to account therefor to Lenders.


 


14.3         Exculpatory Provisions.    Agent
shall not have any duties or obligations except those expressly set forth herein
and in the other Loan Documents.  Without
limiting the generality of the foregoing, Agent:


 


(a)           shall not be subject to any fiduciary
or other implied duties, regardless of whether a Default has occurred and is
continuing;


 


(b)           shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby or 


 


54

















 


by the other Loan Documents that Agent is required to
exercise as directed in writing by the Required Lenders (or such other number
or percentage of the Lenders as shall be expressly provided for herein or in
the other Loan Documents), provided that Agent shall not be required to
take any action that, in its opinion or the opinion of its counsel, may expose
Agent to liability or that is contrary to any Loan Document or applicable Law;
and


 


(c)           shall not, except as expressly set
forth herein and in the other Loan Documents, have any duty to disclose, and
shall not be liable for the failure to disclose, any information relating to
the Loan Parties any of their Affiliates that is communicated to or obtained by
the Person serving as Agent or any of its Affiliates in any capacity.


 


(d)           Agent shall not be liable for any
action taken or not taken by it (i) with the consent or at the request of
the Required Lenders (or such other number or percentage of the Lenders as
shall be necessary, or as Agent shall believe in good faith shall be necessary,
under the circumstances as provided in Sections 12 and 16.1) or (ii) in
the absence of its own gross negligence or willful misconduct.  Agent shall be deemed not to have knowledge
of any Default unless and until written notice describing such Default is given
to Agent by a Loan Party, a Lender or the L/C Issuer.  Agent shall not be responsible for or have
any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with this Agreement or any other Loan
Document, (ii) the contents of any certificate, report or other document
delivered hereunder or thereunder or in connection herewith or therewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth herein or therein or the occurrence of any Default, (iv) the
validity, enforceability, effectiveness or genuineness of this Agreement, any
other Loan Document or any other agreement, instrument or document or (v) the
satisfaction of any condition set forth in Article IV or elsewhere herein,
other than to confirm receipt of items expressly required to be delivered to
Agent.


 


14.4         Reliance by Administrative Agent.    Agent
shall be entitled to rely upon, and shall not incur any liability for relying
upon, any notice, request, certificate, consent, statement, instrument,
document or other writing (including any electronic message, Internet or
intranet website posting or other distribution) believed by it to be genuine
and to have been signed, sent or otherwise authenticated by the proper Person.  Agent also may rely upon any statement made
to it orally or by telephone and believed by it to have been made by the proper
Person, and shall not incur any liability for relying thereon.  In determining compliance with any condition
hereunder to the making of a Loan, or the issuance of a Letter of Credit, that
by its terms must be fulfilled to the satisfaction of a Lender or the L/C
Issuer, Agent may presume that such condition is satisfactory to such Lender or
the L/C Issuer unless Agent shall have received notice to the contrary from
such Lender or the L/C Issuer prior to the making of such Loan or the issuance
of such Letter of Credit.  Agent may
consult with legal counsel (who may be counsel for the Loan Parties),
independent accountants and other experts reasonably selected by it with
respect to matters within the expertise of such experts, and shall not be
liable for any action taken or not taken by it in good faith in accordance with
the advice of any such counsel, accountants or experts.


 


14.5         Delegation of Duties.    Agent
may perform any and all of its duties and exercise its rights and powers
hereunder or under any other Loan Document by or through any one or more 


 


55

















 


sub-agents appointed by Agent.  Agent and any such sub-agent may perform any
and all of its duties and exercise its rights and powers by or through their
respective Related Parties.  The
exculpatory provisions of this Article shall apply to any such sub-agent
and to the Related Parties of Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Agent.


 


14.6         Resignation of Agent.    Agent
may at any time give notice of its resignation to Lenders, the L/C Issuer and
the Loan Parties.  Upon receipt of any
such notice of resignation, the Required Lenders shall have the right, in
consultation with the Loan Parties, to appoint a successor, which shall be a
bank with an office in the United States, or an Affiliate of any such bank with
an office in the United States.  If no
such successor shall have been so appointed by the Required Lenders and shall
have accepted such appointment within 30 days after the retiring Agent gives
notice of its resignation, then the retiring Agent may on behalf of Lenders and
the L/C Issuer, appoint a successor Agent meeting the qualifications set forth
above; provided that if Agent shall notify the Loan Parties and the
Lenders that no qualifying Person has accepted such appointment, then such
resignation shall nonetheless become effective in accordance with such notice
and (i) the retiring Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents (except that in the
case of any collateral security held by Agent on behalf of the Lenders or the
L/C Issuer under any of the Loan Documents, the retiring Agent shall continue
to hold such collateral security until such time as a successor Agent is appointed)
and (ii) all payments, communications and determinations provided to be
made by, to or through Agent shall instead be made by or to each Lender and the
L/C Issuer directly, until such time as the Required Lenders appoint a
successor Agent as provided for above in this Section.  Upon the acceptance of a successor’s
appointment as Agent hereunder, such successor shall succeed to and become
vested with all of the rights, powers, privileges and duties of the retiring
(or retired) Agent, and the retiring Agent shall be discharged from all of its
duties and obligations hereunder or under the other Loan Documents (if not
already discharged therefrom as provided above in this Section).  The fees payable by the Loan Parties to a
successor Agent shall be the same as those payable to its predecessor unless
otherwise agreed between the Loan Parties and such successor.  After the retiring Agent’s resignation
hereunder and under the other Loan Documents, the provisions of this Section 14
and Section 16.5 shall continue in effect for the benefit of such retiring
Agent, its sub-agents and their respective Related Parties in respect of any
actions taken or omitted to be taken by any of them while the retiring
Administrative Agent was acting as Administrative Agent.


 


14.7         Non-Reliance on Agent and Other
Lenders.    Each Lender and the L/C Issuer acknowledges
that it has, independently and without reliance upon Agent or any other Lender
or any of their Related Parties and based on such documents and information as
it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement.  Each Lender and the
L/C Issuer also acknowledges that it will, independently and without reliance
upon Agent or any other Lender or any of their Related Parties and based on
such documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or
based upon this Agreement, any other Loan Document or any related agreement.


 


14.8         No Other Duties, Etc.    Anything
herein to the contrary notwithstanding, neither the Documentation Agent nor any
other Lender holding a title listed on the cover page hereof 


 


56

















 


shall have any powers, duties or responsibilities
under this Agreement or any of the other Loan Documents, except in its
capacity, as applicable, as Administrative Agent, a Lender or the L/C Issuer
hereunder.


 


14.9         Administrative Agent May File
Proofs of Claim.    In case of the pendency of any
proceeding under any bankruptcy law or similar law for the relief of debtors or
any other judicial proceeding relative to any Loan Party, Agent (irrespective
of whether the principal of any Loan or L/C Obligation shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether Agent shall have made any demand on any Loan Party) shall be entitled
and empowered, by intervention in such proceeding or otherwise


 


(a)           to file and prove a claim for the
whole amount of the principal and interest owing and unpaid in respect of the
Loans, L/C Obligations and all other Obligations that are owing and unpaid and
to file such other documents as may be necessary or advisable in order to have
the claims of Lenders, the L/C Issuer and Agent (including any claim for the
reasonable compensation, expenses, disbursements and advances of Lenders, the
L/C Issuer and Agent and their respective agents and counsel and all other
amounts due Lenders, the L/C Issuer and Agent under Sections 5 and 16.5)
allowed in such judicial proceeding; and


 


(b)           to collect and receive any monies or
other property payable or deliverable on any such claims and to distribute the
same;


 


and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Lender and the L/C
Issuer to make such payments to Agent and, in the event that Agent shall
consent to the making of such payments directly to Lenders and the L/C Issuer,
to pay to Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of Agent and its agents and counsel, and any other
amounts due Agent under Sections 5 and 16.5. 
Nothing contained herein shall be deemed to authorize Agent to authorize
or consent to or accept or adopt on behalf of any Lender or the L/C Issuer any
plan of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender or the L/C Issuer or to authorize Agent
to vote in respect of the claim of any Lender or the L/C Issuer in any such
proceeding.


 


14.10       Collateral Matters


 


(a)           Each Lender and the L/C Issuer hereby
irrevocably authorizes and directs Agent to enter into the Collateral Documents
for the benefit of such Lender and the L/C Issuer.  Each Lender and the L/C Issuer hereby agrees,
and each holder of any Note by the acceptance thereof will be deemed to agree,
that, except as otherwise set forth in Section 16.1, any action taken by
the Required Lenders, in accordance with the provisions of this Agreement or
the Collateral Documents, and the exercise by the Required Lenders of the
powers set forth herein or therein, together with such other powers as are
reasonably incidental thereto, shall be authorized and binding upon all of
Lenders and the L/C Issuer.  Agent is
hereby authorized (but not obligated) on behalf of all of Lenders and the L/C
Issuer, without the necessity of any notice to or further consent from any
Lender or the L/C Issuer from time to time prior to, an Event of Default, to
take any action with respect to any Collateral or Collateral Documents which
may be necessary to perfect and maintain perfected the Liens upon the
Collateral granted pursuant to the Collateral Documents.


 


57

















 


(b)           Each Lender and the L/C issuer hereby
irrevocably authorize Agent, at its option and in its discretion,


 


(i)            to
release any Lien on any property granted to or held by Agent under any Loan
Document (A) upon termination of the Aggregate Commitments and payment in
full of all Obligations (other than contingent indemnification obligations) and
the expiration or termination of all Letters of Credit (other than Letters of
Credit as to which other arrangements satisfactory to Agent and the L/C Issuer
shall have been made), (B) that is sold or to be sold as part of or in
connection with any sale permitted hereunder or under any other Loan Document, (C) subject
to Section 16.1, if approved, authorized or ratified in writing by the
Required Lenders, or (D) in connection with any foreclosure sale or other
disposition of Collateral after the occurrence of an Event of Default; and


 


(ii)           to
subordinate any Lien on any property granted to or held by Agent under any Loan
Document to the holder of any Lien on such property that is permitted by this
Agreement or any other Loan Document.


 


Upon request by Agent at
any time, each Lender and the L/C Issuer will confirm in writing Agent’s
authority to release or subordinate its interest in particular types or items
of Collateral pursuant to this Section 14.10.


 


(c)           Subject to (b) above, Agent
shall (and is hereby irrevocably authorized by each Lender and the L/C Issuer ,
to execute such documents as may be necessary to evidence the release or
subordination of the Liens granted to Agent for the benefit of Agent and
Lenders and the L/C Issuer herein or pursuant hereto upon the applicable
Collateral; provided that (i) Agent shall not be required to execute any
such document on terms which, in Agent’s opinion, would expose Agent to or
create any liability or entail any consequence other than the release or
subordination of such Liens without recourse or warranty and (ii) such
release or subordination shall not in any manner discharge, affect or impair
the Obligations or any Liens upon (or obligations of the Company or any other
Loan Party in respect of) all interests retained by the Company or any other
Loan Party, including the proceeds of the sale, all of which shall continue to
constitute part of the Collateral.  In
the event of any sale or transfer of Collateral, or any foreclosure with
respect to any of the Collateral, Agent shall be authorized to deduct all
expenses reasonably incurred by Agent from the proceeds of any such sale,
transfer or foreclosure.


 


(d)           Agent shall have no obligation
whatsoever to any Lender, the L/C Issuer or any other Person to assure that the
Collateral exists or is owned by the Company or any other Loan Party or is
cared for, protected or insured or that the Liens granted to Agent herein or in
any of the Collateral Documents or pursuant hereto or thereto have been
properly or sufficiently or lawfully created, perfected, protected or enforced
or are entitled to any particular priority, or to exercise or to continue
exercising at all or in any manner or under any duty of care, disclosure or
fidelity any of the rights, authorities and powers granted or available to
Agent in this Section 14.10 or in any of the Collateral Documents, it
being understood and agreed that in respect of the Collateral, or any act,
omission or event related thereto, Agent may act in any manner it may deem
appropriate, in its sole discretion, given Agent’s own interest in the
Collateral as one of Lenders and that Agent shall have no duty or liability
whatsoever to Lenders or the L/C Issuer.


 


58

















 


(e)           Each Lender and the L/C Issuer hereby
appoints each other Lender as agent for the purpose of perfecting Lenders’ and
the L/C Issuer’s security interest in assets which, in accordance with Article 9
of the UCC can be perfected only by possession. 
Should any Lender or the L/C Issuer (other than Agent) obtain possession
of any such Collateral, such Lender or the L/C Issuer shall notify Agent
thereof, and, promptly upon Agent’s request therefor shall deliver such
Collateral to Agent or in accordance with Agent’s instructions.


 


SECTION 15          THE LOAN PARTIES.


 


15.1         Appointment of the Company.    Each
Loan Party hereby appoints and authorizes the Company to take such action as its
agent on its behalf and to exercise such powers under the Loan Documents as are
delegated to the Company by the terms thereof, together with such power that
are reasonably incidental thereto, and the Company hereby accepts such
appointment.


 


15.2         Relationship Among the Loan Parties 


 


(a)           JOINT
AND SEVERAL LIABILITY.  EACH LOAN
PARTY AGREES THAT IT IS LIABLE, JOINTLY AND SEVERALLY WITH EACH OTHER LOAN
PARTY, FOR THE PAYMENT OF ALL OBLIGATIONS OF THE LOAN PARTIES UNDER THIS
AGREEMENT AND EACH OTHER LOAN DOCUMENT, AND THAT AGENT AND ANY LENDER CAN
ENFORCE SUCH OBLIGATIONS AGAINST ANY OR ALL LOAN PARTIES, IN AGENT’S OR SUCH
LENDER’S SOLE AND UNLIMITED DISCRETION.


 


(b)           Waivers
of Defenses.  The obligations of the
Loan Parties hereunder shall not be released, in whole or in part, by any
action or thing which might, but for this provision of this Agreement, be
deemed a legal or equitable discharge of a surety or guarantor, other than
irrevocable payment and performance in full of the Obligations (except for contingent
indemnity and other contingent Obligations not yet due and payable) at a time
after any obligation of any Lender hereunder to make the Loans and to issue
Letters of Credit shall have expired or been terminated and all outstanding
Letters of Credit shall have expired or the liability of such Lender thereon
shall have otherwise been discharged. 
The purpose and intent of this Agreement is that the Obligations
constitute the direct and primary obligations of each Loan Party and that the
covenants, agreements and all obligations of each Loan Party hereunder be
absolute, unconditional and irrevocable. 
Each Loan Party shall be and remain liable for any deficiency remaining
after foreclosure of any mortgage, deed of trust or security agreement securing
all or any part of the Obligations, whether or not the liability of any other
Person for such deficiency is discharged pursuant to statute, judicial decision
or otherwise.


 


(c)           Other
Transactions.  Each of Agent and each
Lender is expressly authorized to exchange, surrender or release with or
without consideration any or all collateral and security which may at any time
be placed with it by the Loan Parties or by any other Person on behalf of the
Loan Parties, or to forward or deliver any or all such collateral and security
directly to the Loan Parties for collection and remittance or for credit.  No invalidity, irregularity or
unenforceability of any security for the Obligations or other recourse with
respect thereto shall affect, impair or be a defense to the Loan Parties’
obligations under this Agreement or any other Loan Document. The liabilities of
each Loan Party hereunder shall not be affected or impaired by any failure,
delay, neglect or 


 


59

















 


omission
on the part of Agent or any Lender to realize upon any of the Obligations of
any other Loan Party to Agent or such Lender, or upon any collateral or
security for any or all of the Obligations, nor by the taking by Agent or such
Lender of (or the failure to take) any guaranty or guaranties to secure the
Obligations, nor by the taking by Agent or such Lender of (or the failure to
take or the failure to perfect its security interest in or other lien on)
collateral or security of any kind.  No
act or omission of Agent or any Lender, whether or not such action or failure
to act varies or increases the risk of, or affects the rights or remedies of a
Loan Party, shall affect or impair the obligations of the Loan Parties
hereunder.


 


(d)           Actions
Not Required.  Each Loan Party, to
the extent permitted by applicable law, hereby waives any and all right to
cause a marshaling of the assets of any other Loan Party or any other action by
any court or other governmental body with respect thereto or to cause Agent or
any Lender to proceed against any security for the Obligations or any other
recourse which Agent or such Lender may have with respect thereto and further
waives any and all requirements that Agent or any Lender institute any action
or proceeding at law or in equity, or obtain any judgment, against any other
Loan Party or any other Person, or with respect to any collateral security for
the Obligations, as a condition precedent to making demand on or bringing an
action or obtaining and/or enforcing a judgment against, such Loan Party under
this Agreement or any other Loan Document.


 


(e)           No
Subrogation.  Notwithstanding any
payment or payments made by any Loan Party hereunder or any setoff or
application of funds of any Loan Party by Agent or any Lender, such Loan Party
shall not be entitled to be subrogated to any of the rights of Agent or such
Lender against any other Loan Party or any other guarantor or any collateral
security or guaranty or right of offset held by Agent or such Lender for the
payment of the Obligations, nor shall such Loan Party seek or be entitled to
seek any contribution or reimbursement from any other Loan Party or any other
guarantor in respect of payments made by such Loan Party hereunder, until all
amounts owing to each Lender by the Loan Parties on account of the Obligations
are irrevocably paid in full.  If any
amount shall be paid to a Loan Party on account of such subrogation rights at
any time when all of the Obligations shall not have been irrevocably paid in
full, such amount shall be held by that Loan Party in trust for Agent or such
Lender, segregated from other funds of that Loan Party, and shall, forthwith
upon receipt by the Loan Party, be turned over to Agent or such Lender in the
exact form received by the Loan Party (duly indorsed by the Loan Party to Agent
or such Lender, if required), to be applied against the Obligations, whether
matured or unmatured, in such order as Agent or such Lender may determine.


 


(f)            Application
of Payments.  Any and all payments
upon the Obligations made by the Loan Parties or by any other Person, and/or
the proceeds of any or all collateral or security for any of the Obligations,
may be applied by Agent or any Lender on such items of the Obligations as Agent
or any Lender may elect.


 


(g)           Recovery
of Payment.  If any payment received
by Agent or any Lender and applied to the Obligations is subsequently set
aside, recovered, rescinded or required to be returned for any reason
(including, without limitation, the bankruptcy, insolvency or 


 


60

















 


reorganization
of a Loan Party or any other obligor), the Obligations to which such payment
was applied shall, to the extent permitted by applicable law, be deemed to have
continued in existence, notwithstanding such application, and each Loan Party
shall be jointly and severally liable for such Obligations as fully as if such
application had never been made. 
References in this Agreement to amounts “irrevocably paid” or to “irrevocable
payment” refer to payments that cannot be set aside, recovered, rescinded or
required to be returned for any reason.


 


(h)           Loan
Parties’ Financial Condition.  Each
Loan Party is familiar with the financial condition of the other Loan Parties,
and each Loan Party has executed and delivered this Agreement based on that
Loan Party’s own judgment and not in reliance upon any statement or
representation of Agent or any Lender. 
Neither Agent nor any Lender shall have any obligation to provide any
Loan Party with any advice whatsoever or to inform any Loan Party at any time
of Agent’s or such Lender’s actions, evaluations or conclusions on the
financial condition or any other matter concerning the Loan Parties.


 


(i)            Bankruptcy
of the Loan Parties.  Each Loan Party
expressly agrees that, to the extent permitted by applicable law, the
liabilities and obligations of that Loan Party under this Agreement shall not
in any way be impaired or otherwise affected by the institution by or against
any other Loan Party or any other Person of any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or any other similar
proceedings for relief under any bankruptcy law or similar law for the relief
of debtors and that any discharge of any of the Obligations pursuant to any
such bankruptcy or similar law or other law shall not diminish, discharge or
otherwise affect in any way the obligations of that Loan Party under this
Agreement or any other Loan Document, and that upon the institution of any of
the above actions, such obligations shall be enforceable against that Loan
Party.


 


(j)            Limitation;
Insolvency Laws.  As used in this Section 15.2(j):
(a) the term “Applicable Insolvency Laws” means the laws of the United
States of America or of any State, province, nation or other governmental unit
relating to bankruptcy, reorganization, arrangement, adjustment of debts,
relief of debtors, dissolution, insolvency, fraudulent transfers or conveyances
or other similar laws (including, without limitation, 11 U. S. C. §547, §548,
§550 and other “avoidance” provisions of Title 11 of the United Stated Code) as
applicable in any proceeding in which the validity and/or enforceability of
this Agreement against any Loan Party, or any Specified Lien is in issue; and (b) “Specified
Lien” means any security interest, mortgage, lien or encumbrance granted by
any Loan Party securing the Obligations, in whole or in part.  Notwithstanding any other provision of this
Agreement, if, in any proceeding, a court of competent jurisdiction determines
that with respect to any Loan party, this Agreement or any other Loan Document
or any Specified Lien would, but for the operation of this Section, be subject
to avoidance and/or recovery or be unenforceable by reason of Applicable
Insolvency Laws, this Agreement and each such Specified Lien shall be valid and
enforceable against such Loan Party, only to the maximum extent that would not
cause this Agreement, such other Loan Document or such Specified Lien to be
subject to avoidance, recovery or unenforceability.  To the extent that any payment to, or
realization by, Agent or any Lender on the Obligations exceeds the limitations
of this Section and is otherwise subject to avoidance and recovery 


 


61

















 


in
any such proceeding, the amount subject to avoidance shall in all events be
limited to the amount by which such actual payment or realization exceeds such
limitation, and this Agreement and such other Loan Document as limited shall in
all events remain in full force and effect and be fully enforceable against
such Loan Party.  This Section is
intended solely to reserve the rights of Agent and each Lender hereunder
against each Loan Party, in such proceeding to the maximum extent permitted by
Applicable Insolvency Laws and neither the Loan Parties, any guarantor of the
Obligations nor any other Person shall have any right, claim or defense under
this Section that would not otherwise be available under Applicable
Insolvency Laws in such proceeding.


 


SECTION 16    GENERAL.


 


16.1         Waiver, Amendments, Etc.    No
amendment or waiver of any provision of this Agreement or any other Loan
Document, and no consent to any departure by the Company or any other Loan
Party therefrom, shall be effective unless in writing signed by the Required
Lenders and the Company or the applicable Loan Party, as the case may be, and
acknowledged by Agent, and each such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given;
provided, however, that no such amendment, waiver or consent shall:


 


(a)           waive any condition set forth in Section 12
without the written consent of each Lender; provided, however, in
the sole discretion of Agent, only a waiver by Agent shall be required with
respect to immaterial matters or items with respect to which the Company has
given assurances satisfactory to Agent that such items shall be delivered
promptly following the Closing Date;


 


(b)           extend or increase the Commitment of
any Lender without the written consent of such Lender;


 


(c)           postpone any date fixed by this
Agreement or any other Loan Document for any payment (excluding mandatory
prepayments) of principal, interest, fees or other amounts due to Lenders (or
any of them) hereunder or under any other Loan Document without the written
consent of each Lender directly affected thereby;


 


(d)           reduce the principal of, or the rate
of interest specified herein on, any Loan or Letter of Credit, or (subject to
clause (iv) of the second proviso to this Section 16.1) any fees or
other amounts payable hereunder or under any other Loan Document, without the
written consent of each Lender directly affected thereby;


 


(e)           change any provision of this
Agreement in a manner that would alter the pro rata sharing of payments
required thereby without the written consent of each Lender;


 


(f)            change any provision of this Section or
the definition of “Required Lenders” or any other provision hereof specifying
the number or percentage of Lenders required to amend, waive or otherwise
modify any rights hereunder or make any determination or grant any consent
hereunder, without the written consent of each Lender; or


 


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(g)           release the Liens on
all or substantially all of the Collateral in any transaction or series of
related transactions except in accordance with the terms of any Loan Document,
without the written consent of each Lender;


 


and, provided  further,
that (i) no amendment, waiver or consent shall, unless in writing and
signed by the L/C Issuer in addition to the Lenders required above, affect the
rights or duties of the L/C Issuer under this Agreement or any Issuer Document
relating to any Letter of Credit issued or to be issued by it; and (ii) no
amendment, waiver or consent shall, unless in writing and signed by Agent in
addition to the Lenders required above, affect the rights or duties of Agent
under this Agreement or any other Loan Document. Notwithstanding anything to
the contrary herein, no Defaulting Lender shall have any right to approve or
disapprove any amendment, waiver or consent hereunder, except that the
Commitment of such Lender may not be increased or extended without the consent
of such Lender.  No delay on the part of
the Lender in the exercise of any right, power or remedy shall operate as a
waiver thereof, nor shall any single or partial exercise by any of them of any
right, power or remedy preclude other or further exercise thereof, or the exercise
of any other right, power or remedy.  Any
such amendment, modification, waiver or consent described in this Section 16.1
shall be effective only in the specific instance and for the specific purpose
for which given.


 


16.2         Confirmations.     Each Loan Party and
each Lender agree from time to time, upon written request received by it from
the other, to confirm to the other in writing the aggregate unpaid principal
amount of the Loans then outstanding under the Note.


 


16.3         Notices.     Except as otherwise
provided in Sections 2.2.2 and 2.2.3 all notices hereunder
shall be in writing (including facsimile transmission) and shall be sent to the
applicable party at its address shown on the signature page or at such
other address as such party may, by written notice received by the other
parties, have designated as its address for such purpose.  Notices sent by facsimile transmission shall
be deemed to have been given when sent; notices sent by mail shall be deemed to
have been given three Business Days after the date when sent by registered or
certified mail, postage prepaid; and notices sent by hand delivery or overnight
courier service shall be deemed to have been given when received.  For purposes of Sections 2.2.2 and 2.2.3,
Agent shall be entitled to rely on telephonic instructions from any person that
Agent in good faith believes is an authorized officer or employee of the
Company, and the Company shall hold Agent harmless from any loss, cost or
expense resulting from any such reliance.


 


16.4         Computations.     Where the
character or amount of any asset or liability or item of income or expense
is required to be determined, or any consolidation or other accounting
computation is required to be made, for the purpose of this Agreement, such
determination or calculation shall, to the extent applicable and except as
otherwise specified in this Agreement, be made in accordance with GAAP,
consistently applied; provided that if the Company notifies Agent that
the Company (or any other Loan Party) wishes to amend any covenant in Section 10
(or any related definition) to eliminate or to take into account the effect of
any change in GAAP on the operation of such covenant (or if Agent notifies the
Company that Agent wishes to amend Section 10 (or any related
definition) for such purpose), then the Loan Parties’ compliance with such
covenant shall be determined on the basis of GAAP in effect immediately before
the


 


63

















 


relevant change in GAAP became effective, until either such notice is
withdrawn or such covenant (or related definition) is amended in a manner
satisfactory to the Company and Agent.


 


16.5         Expenses, Indemnity, Damage Waiver


 


(a)           Costs and Expenses.     The
Loan Parties shall pay (i) all reasonable out-of-pocket expenses incurred
by Agent and its Affiliates (including the reasonable fees, charges and
disbursements of counsel for Agent), in connection with the syndication of the
credit facilities provided for herein (excluding syndication to the initial Lender),
the preparation, negotiation, execution, delivery and administration of this
Agreement and the other Loan Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), (ii) all reasonable
out-of-pocket expenses incurred by the L/C Issuer in connection with the
issuance, amendment, renewal or extension of any Letter of Credit or any demand
for payment thereunder and (iii) all out-of-pocket expenses incurred by
Agent, any Lender or the L/C Issuer (including the fees, charges and
disbursements of any counsel for Agent, any Lender or the L/C Issuer), and
shall pay all fees and time charges for attorneys who may be employees of
Agent, any Lender or the L/C Issuer, in connection with the enforcement or
protection of its rights (A) in connection with this Agreement and the
other Loan Documents, including its rights under this Section, or (B) in
connection with the Loans made or Letters of Credit issued hereunder, including
all such out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.


 


(b)           Indemnification by
the Loan Parties.     The Loan Parties shall
indemnify Agent (and any sub-agent thereof), each Lender and the L/C Issuer,
and each Related Party of any of the foregoing Persons (each such Person being
called an “Indemnitee”) against, and hold each Indemnitee harmless from,
any and all losses, claims, damages, liabilities and related expenses
(including the fees, charges and disbursements of any counsel for any
Indemnitee), and shall indemnify and hold harmless each Indemnitee from all
fees and time charges and disbursements for attorneys who may be employees of
any Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee
by any third party or by the Company or any other Loan Party arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto of their respective
obligations hereunder or thereunder, or the consummation of the transactions
contemplated hereby or thereby, or, in the case of Agent (and any sub-agent
thereof) and its Related Parties only, the administration of this Agreement and
the other Loan Documents, (ii) any Loan or Letter of Credit or the use or
proposed use of the proceeds therefrom (including any refusal by the L/C Issuer
to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit), (iii) any actual or alleged presence or release
of Hazardous Materials on or from any property owned or operated by Borrower or
any of its Subsidiaries, or any Environmental Liability related in any way to
Borrower or any of its Subsidiaries, or (iv) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the
foregoing, whether based on contract, tort or any other theory, whether brought
by a third party or by the Company or any other Loan Party, and regardless of
whether any Indemnitee is a party thereto IN ALL CASES, WHETHER OR NOT CAUSED
BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE COMPARATIVE, CONTRIBUTORY OR
SOLE NEGLIGENCE OF THE INDEMNITEE; provided that such indemnity shall not, as
to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related


 


64

















 


expenses (x) are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted
from the gross negligence or willful misconduct of such Indemnitee or (y) result
from a claim brought by the Company or any other Loan Party against an
Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder
or under any other Loan Document, if the Company or such other Loan Party has
obtained a final and nonappealable judgment in its favor on such claim as
determined by a court of competent jurisdiction.


 


(c)           Reimbursement by
Lenders.     To the extent that the Loan Parties
for any reason fail to indefeasibly pay any amount required under subsection (a) or
(b) of this Section to be paid by them to Agent (or any sub-agent
thereof), the L/C Issuer or any Related Party of any of the foregoing, each
Lender severally agrees to pay to Agent (or any such sub-agent), the L/C Issuer
or such Related Party, as the case may be, such Lender’s Applicable Percentage
(determined as of the time that the applicable unreimbursed expense or
indemnity payment is sought) of such unpaid amount, provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against Agent (or any
such sub-agent) or the L/C Issuer in its capacity as such, or against any
Related Party of any of the foregoing acting for Agent (or any such sub-agent)
or L/C Issuer in connection with such capacity.


 


(d)           Waiver of
Consequential Damages, Etc.     To the fullest
extent permitted by applicable law, the Loan Parties shall not assert, and
hereby waive, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby, the transactions contemplated hereby or thereby, any Loan or Letter of
Credit or the use of the proceeds thereof. 
No Indemnitee referred to in subsection (b) above shall be liable
for any damages arising from the use by unintended recipients of any
information or other materials distributed to such unintended recipients by
such Indemnitee through telecommunications, electronic or other information
transmission systems in connection with this Agreement or the other Loan
Documents or the transactions contemplated hereby or thereby other than for
direct or actual damages resulting from the gross negligence or willful
misconduct of such Indemnitee as determined by a final and nonappealable
judgment of a court of competent jurisdiction.


 


(e)           Payments.   All
amounts due under this Section shall be payable not later than ten
Business Days after demand therefor.


 


(f)            Survival.   The
agreements in this Section shall survive the resignation of Agent and the
L/C Issuer, the replacement of any Lender, the termination of the Aggregate
Commitments and the repayment, satisfaction or discharge of all the other
Obligations.


 


16.6         Payments Set Aside.     To the extent
that any payment by or on behalf of the Loan Parties is made to Agent, the L/C
Issuer or any Lender, or Agent, the L/C Issuer or any Lender exercises its right
of setoff, and such payment or the proceeds of such setoff or any part thereof
is subsequently invalidated, declared to be fraudulent or preferential, set
aside or required (including pursuant to any settlement entered into by Agent,
the L/C Issuer or such Lender in its discretion) to be repaid to a trustee,
receiver or any other party, in connection with any proceeding under any
Applicable Insolvency Laws or otherwise, then (a) to the extent of such


 


65

















 


recovery, 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 setoff had not
occurred, and (b) each Lender and the L/C Issuer severally agrees to pay
to Agent upon demand its applicable share (without duplication) of any amount
so recovered from or repaid by Agent, plus interest thereon from the date of
such demand to the date such payment is made at a rate per annum equal to the
Federal Funds Rate from time to time in effect. 
The obligations of the Lenders and the L/C Issuer under clause (b) of
the preceding sentence shall survive the payment in full of the Obligations and
the termination of this Agreement.


 


16.7         Successors and Assigns.


 


(a)           Any Lender may at any time assign to one or more
Persons all or any portion of such Lender’s Loans and Commitments, provided,
that such Lender shall consult with the Company prior to such assignment and,
so long as no Event of Default exists, such assignment shall be to a Person
mutually agreed to by the Company and such Lender, except that the Company’s
agreement shall not be required if an Event of Default exists or for an
assignment by a Lender to a Lender or an Affiliate of a Lender.  Any such assignment shall be in a minimum
aggregate amount equal to $5,000,000 or, if less, the remaining Commitment and
Loans held by such Lender.  The Company
shall be deemed to have granted its consent to any assignment requiring its
consent hereunder unless the Company has expressly objected to such assignment
within three Business Days after notice thereof.


 


(b)           Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to
any such pledge or assignment of a security interest; provided that no
such pledge or assignment of a security interest shall release such Lender from
any of its obligations hereunder or substitute any such pledgee or assignee for
such Lender as a party hereto.


 


(c)           Any Lender may at any time sell to one or more Persons
participating interests in its Loans, Commitments or other interests hereunder.  In the event of a sale by such Lender of a
participating interest, (i) such Lender’s obligations hereunder shall
remain unchanged for all purposes, (ii) the Company shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights
and obligations hereunder and (iii) all amounts payable by the Company
shall be determined as if such Lender had not sold such participation and shall
be paid directly to such Lender.  No
participant shall have any direct or indirect voting rights hereunder.  The Company agrees that if amounts
outstanding under this Agreement are due and payable (as a result of
acceleration or otherwise), each participant shall be deemed to have the right
of set-off in respect of its participating interest in amounts owing under this
Agreement and with respect to any Letter of Credit to the same extent as if the
amount of its participating interest were owing directly to it as a Lender
under this Agreement; provided that such right of set-off shall be subject
to the obligation of each participant to share with each Lender, and each
Lender agrees to share with each participant. 
The Company also agrees that each participant shall be entitled to the
benefits of Section 7.6 or 8 as if it were a Lender (provided
that on the date of the participation no participant shall be entitled to any
greater compensation pursuant to Section 7.6 or 8 than would
have been paid to the Lender on such date if no participation had been sold.


 


16.8        GOVERNING LAW.     THIS AGREEMENT
AND EACH NOTE SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL
LAWS OF THE STATE OF MINNESOTA APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED
ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.


 


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16.9         Confidentiality.     Each of Agent and each
Lender agrees to use commercially reasonable efforts (equivalent to the efforts
each of Agent and each Lender applies to maintain the confidentiality of its
own confidential information) to maintain as confidential all information
provided to it by any Loan Party and designated as confidential, except that
Agent and each Lender may disclose such information (a) to Persons
employed or engaged by Agent or such Lender in evaluating, approving,
structuring or administering the Loans and the Commitment; (b) to any
assignee or participant or potential assignee or participant that has agreed to
comply with the covenant contained in this Section 16.9 (and any
such assignee or participant or potential assignee or participant may disclose
such information to Persons employed or engaged by them as described in clause (a) above);
(c) as required or requested by any federal or state regulatory authority
or examiner, or any insurance industry association, or as reasonably believed
by Agent or such Lender to be compelled by any court decree, subpoena or legal
or administrative order or process; (d) as, on the advice of Agent’s or
such Lender’s counsel, is required by law; (e) in connection with the
exercise of any right or remedy under the Loan Documents or in connection with
any litigation to which Agent or such Lender is a party; (f) to any
nationally recognized rating agency that requires access to information about
Agent or such Lender’s investment portfolio in connection with ratings issued
with respect to the Lender; (g) to any Affiliate of Agent or such Lender
who may provide Bank Products to the Loan Parties; or (h) that ceases to
be confidential through no fault of Agent or such Lender.  Notwithstanding the foregoing, the Company
consents to the publication by Agent and each Lender of a tombstone or similar
advertising material relating to the financing transactions contemplated by
this Agreement, and each of Agent and each Lender reserves the right to provide
to industry trade organizations information necessary and customary for
inclusion in league table measurements. 
Notwithstanding anything in this Agreement or any other Loan Document to
the contrary, any information with respect to the “tax treatment” or “tax
structure” (in each case, within the meaning of Treasury Regulation Section 1.6011-4)
of the transactions contemplated hereby shall not be confidential and Agent,
each Lender and other parties hereto may disclose without limitation of any
kind any information that is provided to Agent or such Lender with respect to
the “tax treatment” or “tax structure” (in each case, within the meaning of
Treasury Regulation Section 1.6011-4); provided, that to the extent
any Loan Document contains information that relates to the “tax treatment” or “tax
structure” and contains other information, this paragraph shall only apply to
the information regarding the “tax treatment” or “tax structure.”


 


16.10       Severability.     Whenever possible each
provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining
provisions of this Agreement.  All
obligations of the Loan Parties and rights of Agent and each Lender expressed
herein or in any other Loan Document shall be in addition to and not in
limitation of those provided by applicable law.


 


16.11       Nature of Remedies.   All Obligations of the Loan Parties
and rights of Agent and each Lender expressed herein or in any other Loan
Document shall be in addition to and not in limitation of those provided by
applicable law.  No failure to exercise
and no delay in exercising, on the part of Agent or any Lender, any right,
remedy, power


 


67

















 


or privilege hereunder, shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege.


 


16.12       Entire Agreement.     This Agreement,
together with the other Loan Documents, embodies the entire agreement and
understanding among the parties hereto and supersedes all prior or
contemporaneous agreements and understandings of such Persons, verbal or
written, relating to the subject matter hereof and thereof (except as relates
to the fees described in Section 5.2) and any prior arrangements
made with respect to the payment by the Loan Parties of (or any indemnification
for) any fees, costs or expenses payable to or incurred (or to be incurred) by
or on behalf of Agent or any Lender.


 


16.13       Counterparts.     This Agreement may be
executed in any number of counterparts and by the different parties hereto
on separate counterparts and each such counterpart shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same Agreement.  Receipt of an executed
signature page to this Agreement by facsimile or other electronic
transmission shall constitute effective delivery thereof.  Electronic records of executed Loan Documents
maintained by the Lender shall deemed to be originals.


 


16.14       Successors and Assigns.    This Agreement shall
be binding upon each Loan Party, Agent, the Lenders and their respective
successors and assigns, and shall inure to the benefit of each Loan Party,
Agent, the Lenders and the successors and assigns of the Lenders.  No other Person shall be a direct or indirect
legal beneficiary of, or have any direct or indirect cause of action or claim
in connection with, this Agreement or any of the other Loan Documents.  No Loan Party may assign or transfer any of
its rights or Obligations under this Agreement without the prior written
consent of Agent and each Lender.


 


16.15       Captions.     Section captions
used in this Agreement are for convenience only and shall not affect the
construction of this Agreement.


 


16.16       Nonliability of Agent and each Lender.     The
relationship between the Loan Parties on the one hand and Agent and each Lender
on the other hand shall be solely that of Loan Parties, agent and lender.  Neither Agent nor any Lender has a fiduciary
relationship with or duty to any Loan Party arising out of or in connection
with this Agreement or any of the other Loan Documents, and the relationship
between the Loan Parties, on the one hand, and the Lenders, on the other hand,
in connection herewith or therewith is solely that of debtor and creditor.  Neither Agent nor any Lender undertakes any
responsibility to any Loan Party to review or inform any Loan Party of any
matter in connection with any phase of any Loan Party’s business or
operations.  Each Loan Party agrees, on
behalf of itself and each other Loan Party, that Agent and each Lender shall
have no liability to any Loan Party (whether sounding in tort, contract or
otherwise) for losses suffered by any Loan Party in connection with, arising
out of, or in any way related to the transactions contemplated and the
relationship established by the Loan Documents, or any act, omission or event
occurring in connection therewith, unless it is determined in a final
non-appealable judgment by a court of competent jurisdiction that such losses
resulted from the gross negligence or willful misconduct of the party from
which recovery is sought.  NEITHER AGENT NOR ANY LENDER SHALL HAVE ANY LIABILITY WITH RESPECT TO,
AND EACH LOAN PARTY HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE FOR ANY
SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES RELATING


 


68

















 


TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ARISING
OUT OF ITS ACTIVITIES IN CONNECTION HEREWITH OR THEREWITH (WHETHER BEFORE OR
AFTER THE CLOSING DATE).  Each Loan Party acknowledges
that it has been advised by counsel in the negotiation, execution and delivery
of this Agreement and the other Loan Documents to which it is a party.  No joint venture is created hereby or by the
other Loan Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Loan Parties and the Lender.


 


16.17       FORUM SELECTION AND CONSENT TO JURISDICTION.     ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED
EXCLUSIVELY IN THE COURTS OF THE STATE OF MINNESOTA OR IN THE UNITED STATES
DISTRICT COURT SITTING IN MINNEAPOLIS, MINNESOTA; PROVIDED THAT NOTHING
IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE AGENT OR ANY LENDER
FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION.  EACH LOAN PARTY HEREBY EXPRESSLY AND
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF MINNESOTA
AND OF THE UNITED STATES COURT SITTING IN HENNEPIN COUNTY, MINNESOTA FOR THE
PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE.  EACH LOAN PARTY FURTHER IRREVOCABLY CONSENTS
TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL
SERVICE WITHIN OR WITHOUT THE STATE OF MINNESOTA.  EACH LOAN PARTY HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION
BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH
LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.


 


16.18       WAIVER OF JURY TRIAL.     EACH
LOAN PARTY, AGENT AND EACH LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN
ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT,
ANY NOTE, ANY OTHER LOAN DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR
AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION
HEREWITH OR THEREWITH OR ARISING FROM ANY LENDING RELATIONSHIP EXISTING IN
CONNECTION WITH ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.


 


16.19       Effect of Existing Credit Agreement and Existing
Collateral Documents


 


(a)           Existing Credit Agreement. 
This Agreement amends and restates the Existing Credit Agreement in its
entirety, provided that Obligations incurred under the Existing Credit
Agreement shall continue under this Agreement, and shall not in any
circumstances be terminated, extinguished or discharged hereby or thereby but
shall hereafter be governed by the terms of this Agreement.


 


69

















 


(b)           Existing Collateral
Documents.   Obligations hereunder are and continue to be
secured by the security interest granted by the Loan Parties in favor of the
Lender under the Collateral Documents, and all terms, conditions, provisions,
agreements, requirements, premises, obligations, duties, covenants and
representations of the Loan Parties under such documents are hereby ratified
and affirmed in all respects.


 


[Signature pages follow.]


 


70

















 


The parties hereto have caused this Agreement to be duly executed and
delivered by their duly authorized officers as of the date first set forth
above.


 


	
   

  	
  WINMARK
  CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /s/ Brett D. Heffes

  
	
   

  	
  Name: Brett
  D. Heffes

  
	
   

  	
  Title:  Chief
  Financial Officer and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WIRTH
  BUSINESS CREDIT, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /s/ Brett D. Heffes

  
	
   

  	
  Name: Brett
  D. Heffes

  
	
   

  	
  Title:  Chief
  Financial Officer and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WINMARK
  CAPITAL CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /s/ Brett D. Heffes

  
	
   

  	
  Name: Brett
  D. Heffes

  
	
   

  	
  Title:  Chief
  Financial Officer and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GROW
  BIZ GAMES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /s/ Brett D. Heffes

  
	
   

  	
  Name: Brett
  D. Heffes

  
	
   

  	
  Title:  Chief
  Financial Officer and Treasurer

  



 


Address
for Notices:


 


c/o
Winmark Corporation


4200
Dahlberg Drive


Suite 100


Minneapolis,
MN  55422


Attention:  Vice President and General Counsel


Telephone:  (763) 520-8500


Fax:  (763) 520-8410


 


 


Signature Page to


Amended and Restated Revolving Credit Agreement


 

















 


	
   

  	
  LASALLE
  BANK NATIONAL ASSOCIATION,

  as Administrative Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /s/ A. Quinn
  Richardson

  
	
   

  	
  Name:  A.
  Quinn Richardson

  
	
   

  	
  Title:  Senior
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LASALLE
  BANK NATIONAL ASSOCIATION,

  as a Lender and L/C Issuer

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /s/ A. Quinn
  Richardson

  
	
   

  	
  Name:  A.
  Quinn Richardson

  
	
   

  	
  Title:  Senior
  Vice President

  



 


 


Notices of Borrowing , Conversion, Continuation and
Letter of Credit Issuance


 


135 South LaSalle Street, Suite 1140


Chicago, IL 
60603


Attention: 
Kimberley McGinley


Telephone: 
(312) 904-2694


Facsimile: 
(312) 904-6546


 


All Other Notices


 


135 South LaSalle Street, Suite 1152


Chicago, IL 
60603


Attention: 
Quinn Richardson


Telephone: 
(312) 992-2160


Facsimile: 
(312) 904-6546


 


135 South LaSalle Street, Suite 1140


Chicago, IL 
60603


Attention:  Ryan
Randolph


Telephone: 
(312) 904-7734


Facsimile: 
(312) 904-6546


 


 


Signature Page to


Amended and Restated Revolving Credit Agreement


 

















 


	
   

  	
  THE
  PRIVATEBANK AND TRUST

  COMPANY, as a Lender and

  
	
   

  	
  Documentation
  Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter Pricco

  
	
   

  	
  Name: Peter
  Pricco

  
	
   

  	
  Title: Associate
  Managing Director

  



 


 


Address
for Notices:


 


The
PrivateBank and Trust Company


100
South 5th Street, 19th Floor


Minneapolis,
MN 55402


Attention:  Peter Pricco


Telephone:  (612) 605-6138


Fax:  (612) 605-6193


 


 


Signature Page to


Amended and Restated Revolving Credit Agreement


 

















 


SCHEDULE 2.1


 


COMMITMENTS

AND APPLICABLE PERCENTAGES


 


	
  Lender

  	
   

  	
  Commitment

  	
   

  	
  Applicable

  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  LaSalle Bank National Association

  	
   

  	
  $

  	
  30,000,000

  	
   

  	
  54.545454546

  	
  %

  
	
  The PrivateBank and Trust Company

  	
   

  	
  $

  	
  25,000,000

  	
   

  	
  45.454545454

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  55,000,000

  	
   

  	
  100.00

  	
  %

  



 
















 


SCHEDULE 5.2


 


PREPAYMENT
CONSIDERATION CALCULATION


 


For purposes of Section
5.2(b) of the Credit Agreement, the prepayment fee in respect of a Fixed Rate
Loan shall be equal to the Net Present Value of the Fixed Rate Loan less
the amount of the prepayment of such Fixed Rate Loan.


 


The Net Present Value
means the amount of each prospective payment of principal and interest that,
without such prepayment, would otherwise have been received by the Lenders over
the remaining Interest Period of such Fixed Rate Loan, discounted at a rate
equal to (i) the yield of U.S. Treasury Notes that shall be imputed, by linear
interpolation, from the current yield of those United States Treasury Notes
having a maturity as close as practicable to that of each specific payment of
principal and/or interest, as published in the most recent Federal Reserve
Statistical Release H.15 (519) or any successor publication, plus (ii)
0.85%.


 


If the prepayment
consideration as calculated above calculated is a positive amount, then the
Loan Parties shall pay such amount to the Agent for the ratable benefit of the
Lenders. If the prepayment consideration is a negative amount, then no amount
is payable by, or refundable to, the Loan Parties.


 

















 


SCHEDULE
9.6


 


LITIGATION AND
CONTINGENT LIABILITIES


 


None.


 

















 


SCHEDULE
9.7


 


OWNERSHIP OF
PROPERTIES; LIENS


 


1.                                       On August 30, 2000, the Company (f/k/a
Grow Biz International, Inc.) signed a Trademark License Agreement (“Agreement”)
with Hollis Technologies, Inc., a Florida limited liability company (“Hollis”),
granting Hollis the use of the COMPUTER RENAISSANCE AND DESIGN trademarks (U.S.
Reg. No. 1,875,949, Canada TM 474,198 and Japan trademark No. 4,313,894) for
term of twenty (20) years, with automatic successive renewals of ten (10) years
each. In addition, per the Agreement, Hollis may request, and the Company will
grant to Hollis, a license for the use of the CIRCULAR ARROWS DESIGN trademark
under the same terms and conditions.


 


2.                                       In 2001 and 2002, the Company entered
into Trademark License Agreements with 14 former ReTool® franchisees and a
former employee of Winmark for the license of the RETOOL (U.S. Reg. No.
2,304,808) and RETOOL AND DESIGN (U.S. Reg. No. 2,267,043) trademarks for a
period of 10 years with an option to renew for an additional ten (10) year
period.


 


3.                                       See attached lien summary.


 

















 


DEBTOR:                               WINMARK
CORPORATION


 


	
  Jurisdiction

  	
   

  	
  Lien Type

  	
   

  	
  Debtor

  	
   

  	
  Secured Party

  	
   

  	
  Filing Information

  	
   

  	
  Collateral

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Minnesota 

  Secretary of State 

  (thru 5-23-08)

  	
   

  	
  UCC

  	
   

  	
  Winmark Corporation

  	
   

  	
  US Bancorp

  	
   

  	
  File No.: 20038091116

  Filed: 7-16-03 
 Lapse: 7-16-08

  	
   

  	
  Leased equipment

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  UCC

  	
   

  	
  Winmark Corporation

  	
   

  	
  US Bancorp

  	
   

  	
  File No.: 20038277639

  Filed: 8-01-03 

  Lapse: 8-01-08

  	
   

  	
  Leased equipment

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  UCC

  	
   

  	
  Winmark Corporation

  	
   

  	
  LaSalle Bank National Association

  	
   

  	
  File No.: 200413450556 

  Filed: 10-01-04 

  Lapse: 10-01-09

  	
   

  	
  Pledged shares of Winmark Business Solutions, Inc., Winmark Capital
  Corporation and Grow Biz Games, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  UCC

  	
   

  	
  Winmark Corporation

  	
   

  	
  LaSalle Bank National Association

  	
   

  	
  File No.: 200413450710 

  Filed: 10-01-04 

  Lapse: 10-01-09

  	
   

  	
  All accounts, chattel paper, deposit accounts, documents, equipment,
  fixtures, general intangibles, instruments, inventory, investment property,
  letter of credit rights; all proceeds and products thereof

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  UCC

  	
   

  	
  Winmark Corporation

  	
   

  	
  US Bancorp

  	
   

  	
  File No.: 200515352382

  Filed: 2-24-05 

  Lapse: 2-24-10

  	
   

  	
  Leased equipment (informational filing)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  UCC

  	
   

  	
  Winmark Corporation

  	
   

  	
  US Bancorp

  	
   

  	
  File No.: 200517859904 

  Filed: 9-02-05 

  Lapse: 9-02-10

  	
   

  	
  Leased equipment (informational filing)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  UCC

  	
   

  	
  Winmark Corporation

  	
   

  	
  US Bancorp

  	
   

  	
  File No.: 200517888515 

  Filed: 9-07-05

  Lapse: 9-07-10

  	
   

  	
  Leased equipment (informational filing)

  



 

















 


	
  Jurisdiction

  	
   

  	
  Lien Type

  	
   

  	
  Debtor

  	
   

  	
  Secured Party

  	
   

  	
  Filing Information

  	
   

  	
  Collateral

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  UCC

  	
   

  	
  Winmark Corporation

  	
   

  	
  US Bancorp

  	
   

  	
  File No.: 200519313670 

  Filed: 12-28-05 

  Lapse: 12-28-10

  	
   

  	
  Leased equipment (informational filing)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  UCC

  	
   

  	
  Winmark Corporation

  	
   

  	
  US Bancorp

  	
   

  	
  File No.: 200614556687

  Filed: 12-06-06 

  Lapse: 12-06-11

  	
   

  	
  Leased equipment (informational filing)

  



 


Debtor:                                              WINMARK CAPITAL CORPORATION


 


	
  Jurisdiction

  	
   

  	
  Lien Type

  	
   

  	
  Debtor

  	
   

  	
  Secured Party

  	
   

  	
  Filing Information

  	
   

  	
  Collateral

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Minnesota

  Secretary of State

  (thru 5-23-08)

  	
   

  	
  UCC

  	
   

  	
  Winmark Capital Corporation

  	
   

  	
  LaSalle Bank National Association

  	
   

  	
  File No.: 200413450897

  Filed: 10-01-04
 Lapse: 10-01-09

  	
   

  	
  All accounts, chattel paper, deposit accounts, documents, equipment,
  fixtures, general intangibles, instruments, inventory, investment property,
  letter of credit rights; all proceeds and products thereof

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  UCC

  	
   

  	
  Winmark Capital Corporation

  	
   

  	
  Wells Fargo Equipment Finance, Inc.

  	
   

  	
  File No.: 200518175801 

  Filed: 9-29-05
 Lapse: 9-29-10

  	
   

  	
  Leased equipment, including all payments, revenues, insurance,
  proceeds, all right, title and interest of D in and to the equipment
  thereunder

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  UCC

  	
   

  	
  Winmark Capital Corporation

  	
   

  	
  Wells Fargo Equipment Finance, Inc.

  	
   

  	
  File No.: 200810362801 

  Filed: 1-29-08

  Lapse: 1-29-13

  	
   

  	
  Leased equipment, including all payments, revenues, insurance,
  proceeds, all right, title and interest of D in and to the equipment
  thereunder

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  UCC

  	
   

  	
  Winmark Capital Corporation

  	
   

  	
  Wells Fargo Equipment Finance, Inc.

  	
   

  	
  File No.: 200810554528 

  Filed: 2-12-08

  Lapse: 2-12-13

  	
   

  	
  Leased equipment, including all payments, revenues, insurance,
  proceeds, all right, title and interest of D in and to the equipment
  thereunder

  



 

















 


	
  Jurisdiction

  	
   

  	
  Lien Type

  	
   

  	
  Debtor

  	
   

  	
  Secured Party

  	
   

  	
  Filing Information

  	
   

  	
  Collateral

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  UCC

  	
   

  	
  Winmark Capital Corporation

  	
   

  	
  Wells Fargo Equipment Finance, Inc.

  	
   

  	
  File No.: 200811963536

  Filed: 5-28-08

  Lapse: 5-28-13

  	
   

  	
  Leased equipment, including all payments, revenues, insurance,
  proceeds, all right, title and interest of D in and to the equipment
  thereunder

  



 


DEBTOR:                                        WIRTH
BUSINESS CREDIT, INC.


 


	
  Jurisdiction

  	
   

  	
  Lien Type

  	
   

  	
  Debtor

  	
   

  	
  Secured Party

  	
   

  	
  Filing Information

  	
   

  	
  Collateral

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Minnesota

  Secretary of State

  (thru 5-23-08)

  	
   

  	
  UCC

  	
   

  	
  Winmark Business Solutions, Inc. Amended Debtor Name: Wirth Business
  Credit, Inc.

  	
   

  	
  LaSalle Bank National Association

  	
   

  	
  File No.: 200413450645 

  Filed: 10-01-04
 Lapse: 10-01-09

  

  Amendment:
 File No.: 20061126106  
 Filed: 3-31-06

  	
   

  	
  All accounts, chattel paper, deposit accounts, documents, equipment,
  fixtures, general intangibles, instruments, inventory, investment property,
  letter of credit rights; all proceeds and products thereof

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  UCC

  	
   

  	
  Wirth Business Credit, Inc.

  	
   

  	
  LaSalle Bank National Association

  	
   

  	
  File No.: 200611261240 

  Filed: 3-31-06

  Lapse: 3-31-11

  	
   

  	
  All accounts, chattel paper, deposit accounts, documents, equipment,
  fixtures, general intangibles, instruments, inventory, investment property,
  letter of credit rights; all proceeds and products thereof

  



 

















 


DEBTOR:                                        GROW
BIZ GAMES, INC.


 


	
  Jurisdiction

  	
   

  	
  Lien Type

  	
   

  	
  Debtor

  	
   

  	
  Secured Party

  	
   

  	
  Filing Information

  	
   

  	
  Collateral

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Minnesota

  Secretary of State

  (thru 5-23-08)

  	
   

  	
  UCC

  	
   

  	
  Grow Biz Games, Inc.

  	
   

  	
  LaSalle Bank National Association

  	
   

  	
  File No.: 200413450431

  Filed: 10-01-04
 Lapse: 10-01-09

  	
   

  	
  All accounts, chattel paper, deposit accounts, documents, equipment,
  fixtures, general intangibles, instruments, inventory, investment property,
  letter of credit rights; all proceeds and products thereof

  



 

















 


SCHEDULE
9.8


 


SUBSIDIARIES


 


	
   

  	
   

  	
  Company

  	
   

  	
  Percent Ownership

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (a)

  	
   

  	
  Grow Biz
  Games, Inc.

  	
   

  	
  100%

  
	
   

  	
   

  	
  Wirth
  Business Credit, Inc.

  	
   

  	
  100%

  
	
   

  	
   

  	
  Winmark
  Capital Corporation

  	
   

  	
  100%

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  Tomsten,
  Inc.

  	
   

  	
  18.3%

  



 

















 


SCHEDULE
9.17


 


REAL PROPERTY


 


	
  Property Type:

  	
   

  	
  Winmark Corporation headquarters

  	
   

  	
  (Leased)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Property Location:

  	
   

  	
  4200 Dahlberg Drive, Suite 100

  	
   

  	
   

  
	
   

  	
   

  	
  Golden Valley, MN 55422-4837

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lessor:

  	
   

  	
  Koch Trucking, Inc.

  	
   

  	
   

  
	
   

  	
   

  	
  4200 Dahlberg Drive

  	
   

  	
   

  
	
   

  	
   

  	
  Golden Valley, MN 55422-4837

  	
   

  	
   

  
	
   

  	
   

  	
  (763) 302-5400

  	
   

  	
   

  



 


On July 10, 2000, the Company sold its corporate headquarters facility
to Koch Trucking, Inc. for $3.5 million in cash. Net proceeds from the sale
were used to pay down the existing bank debt. The Company entered into a
four-year lease for approximately 55% of the facility pursuant to which the
Company will pay annual base rent of $218,908. The sale resulted in a $731,000
gain, which was recognized over
the initial 48-month lease term.


 


This property is our
headquarters facility in Golden Valley, Minnesota. Until September 1, 2003, we
leased 26,069 square feet of the 47,328 square foot building. Effective
September 1, 2003, we amended our existing lease to add an additional 4,834
square feet bringing our total leased space to 30,903. Our base rent, under the
amended lease remains the same, $218,980 per year. However, for 2004, we agreed
to pay the common area maintenance and other additional rent relating to the
entire 30,903 square feet. In addition, beginning February 1, 2005 through
August 2009, we will lease an additional 3,281 square feet, bringing our total
leased space to 34,184 square feet. In 2007,
we paid an annual base rent of $218,980
plus common area maintenance charges of approximately $295,100. The lease, as amended, expires in 2009. Our facilities
are sufficient to meet our current needs and our immediate future needs.


 

















 


Winmark Corporation Lease Properties


 


	
  Property Type:

  	
   

  	
  Winmark Capital Corporation Office Space

  	
   

  	
  (Leased)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Property Location:

  	
   

  	
  1942 Broadway Suite # 318

  	
   

  	
   

  
	
   

  	
   

  	
  Boulder, CO 80302

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lessor:

  	
   

  	
  Office Partners, Inc. (d/b/a Broadway Suites, Inc.)

  	
   

  	
   

  
	
   

  	
   

  	
  1942 Broadway

  	
   

  	
   

  
	
   

  	
   

  	
  Boulder, CO 80302

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Property Type:

  	
   

  	
  Winmark Capital Corporation Office Space

  	
   

  	
  (Leased)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Property Location:

  	
   

  	
  600 17th Street, Suite # 2124

  	
   

  	
   

  
	
   

  	
   

  	
  Denver, CO 80202-5428

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lessor:

  	
   

  	
  YOUR OFFICE USA

  	
   

  	
   

  
	
   

  	
   

  	
  600 17th Street, Suite 2800 South

  	
   

  	
   

  
	
   

  	
   

  	
  Denver, CO 80202-5428

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Property Type:

  	
   

  	
  Winmark Capital Corporation Office Space

  	
   

  	
  (Leased)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Property Location:

  	
   

  	
  1309 State Street, Suite A

  	
   

  	
   

  
	
   

  	
   

  	
  Santa Barbara, CA 93101

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lessor:

  	
   

  	
  State Street GBF, LLC

  	
   

  	
   

  
	
   

  	
   

  	
  116 East Sola Street

  	
   

  	
   

  
	
   

  	
   

  	
  Santa Barbara, CA 93101

  	
   

  	
   

  



 

















 


SCHEDULE
9.23


 


ACCOUNTS


 


I.                                         Winmark
Corporation


 


	
  LaSalle Bank*

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Bank of Montreal*

  	
   

  	
  UBS Financial Services*

  
	
   

  	
   

  	
   

  
	
  Royal Bank of Canada*

  	
   

  	
  Fidelity Investments*

  



 


II.                                     Wirth
Business Credit, Inc.


 


LaSalle Bank*


 


III.                                 Winmark
Capital Corporation


 


LaSalle Bank*


 






* Material has been
omitted pursuant to a request for confidential treatment and the material has
been filed separately.


 

















 


SCHEDULE
11.7


 


AFFILIATE
TRANSACTIONS


 


None.


 
















 


EXHIBIT A


 


FORM OF NOTE


                ,
20       


	
  $                     

  	
  Minneapolis, Minnesota

  



 


The
undersigned, jointly and severally, for value received, promise to pay to the
order of                 
(the “Lender”) at the Administrative Agent’s Office (as defined in the
Credit Agreement) the aggregate unpaid amount of all Loans made to the
undersigned by the Lender pursuant to the Credit Agreement referred to below
(as shown on the schedule attached hereto (and any continuation thereof) or in
the records of the Lender), such principal amount to be payable on the dates
set forth in the Credit Agreement.


 


The
undersigned, jointly and severally, further promise to pay interest on the
unpaid principal amount of each Loan from the date of such Loan until such Loan
is paid in full, payable at the rate(s) and at the time(s) set forth
in the Credit Agreement.  Payments of
both principal and interest are to be made in lawful money of the United States
of America.


 


This
Revolving Note evidences indebtedness incurred under, and is subject to the
terms and provisions of, the Amended and Restated Revolving Credit Agreement,
dated as of June 10, 2008 (as amended, supplemented or modified, the “Credit
Agreement”; terms not otherwise defined herein are used herein as defined
in the Credit Agreement), among the undersigned, LaSalle Bank National
Association, certain other lenders party thereto and the Lender, to which
Credit Agreement reference is hereby made for a statement of the terms and
provisions under which this Revolving Note may or must be paid prior to its due
date or its due date accelerated.


 


This
Revolving Note is made under and governed by the laws of the State of Minnesota
applicable to contracts made and to be performed entirely within such State.


 


	
  WINMARK
  CORPORATION

  	
   

  	
  GROW
  BIZ GAMES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name: Brett Heffes

  	
   

  	
  Name: Brett Heffes

  
	
  Title: Chief Financial
  Officer and Treasurer

  	
   

  	
  Title: Chief Financial
  Officer and Treasurer

  
	
   

  	
   

  	
   

  
	
  WIRTH
  BUSINESS CREDIT, INC.

  	
   

  	
  WINMARK
  CAPITAL CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name: Brett Heffes

  	
   

  	
  Name: Brett Heffes

  
	
  Title: Chief Financial
  Officer and Treasurer

  	
   

  	
  Title: Chief Financial
  Officer and Treasurer

  
						



 

















 


EXHIBIT B


 


FORM OF COMPLIANCE
CERTIFICATE


 


To:                          LaSalle Bank National Association (the “Administrative
Agent”)


 


Please
refer to the Amended and Restated Credit Agreement dated as of June 10, 2008 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”)
among Winmark Corporation (the “Company”)
and its subsidiaries (together with the Company, the “Loan Parties”),
each lender from time to time party hereto (collectively, the “Lenders”
and individually, a “Lender”), LASALLE BANK NATIONAL ASSOCIATION (“LaSalle”),
as Administrative Agent for the Lenders, and THE PRIVATEBANK AND TRUST COMPANY,
as Documentation Agent.  Terms used but
not otherwise defined herein are used herein as defined in the Credit
Agreement.


 


I.                                                         Reports.  Enclosed herewith is a copy of the monthly report of the Company as at                 ,
         (the “Computation Date”),
which report fairly presents in all material respects the financial condition
and results of operations of the Company as of the Computation Date and has
been prepared in accordance with GAAP consistently applied.


 


II.                                                     Tangible Net Worth.  The Company hereby certifies and warrants to
you that the following is a true and correct computation of the Tangible Net
Worth requirement set forth in Section 11.14 of the Credit Agreement,
which is equal to or greater than the sum of the minimum Tangible Net Worth
from the immediately preceding month plus fifty percent (50%) of the net
income of the month then ended, if positive:


 


Section 11.14 – Tangible Net Worth


 


	
   

  	
  A.

  	
   

  	
  Shareholders’
  Equity:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Common
  stock

  	
   

  	
  $                

  
	
   

  	
   

  	
   

  	
  Other
  comprehensive income

  	
   

  	
  $                

  
	
   

  	
   

  	
   

  	
  Retained
  earnings

  	
   

  	
  $                

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Total
  Shareholders’ Equity

  	
   

  	
   

  	
  $                

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  B.

  	
   

  	
  Subordinated
  Debt

  	
   

  	
   

  	
  $                

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  C.

  	
   

  	
  Intangible
  Items:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Goodwill

  	
   

  	
  $                

  
	
   

  	
   

  	
   

  	
  Trademarks

  	
   

  	
  $                

  
	
   

  	
   

  	
   

  	
  Trade
  names

  	
   

  	
  $                

  
	
   

  	
   

  	
   

  	
  Service
  marks

  	
   

  	
  $                

  
	
   

  	
   

  	
   

  	
  Copyrights

  	
   

  	
  $                

  
	
   

  	
   

  	
   

  	
  Patents

  	
   

  	
  $                

  
	
   

  	
   

  	
   

  	
  Licenses

  	
   

  	
  $                

  
	
   

  	
   

  	
   

  	
  Deferred
  items

  	
   

  	
  $                

  
	
   

  	
   

  	
   

  	
  Unamortized
  Debt discount

  	
   

  	
  $                

  



 

















 


	
   

  	
   

  	
   

  	
  Prepaid
  Expenses(1)

  	
   

  	
  $                

  	
   

  
	
   

  	
   

  	
   

  	
  Other
  intangible items

  	
   

  	
  $                

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Total
  Intangible Items

  	
   

  	
   

  	
  $                

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  D.

  	
   

  	
  Investments:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Investment
  in Tomsten, Inc.

  	
   

  	
  $                

  	
   

  
	
   

  	
   

  	
   

  	
  Investment
  in Bridge Funds Limited

  	
   

  	
  $                

  	
   

  
	
   

  	
   

  	
   

  	
  Investment
  in Commercial Credit Group

  	
   

  	
  $                

  	
   

  
	
   

  	
   

  	
   

  	
  Additional
  Investments

  	
   

  	
  $                

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Total
  Investments

  	
   

  	
   

  	
  $                

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  E.

  	
   

  	
  Tangible
  Net Worth [(A+B) – (C + D)]

  	
   

  	
   

  	
  $                

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  F.
  

  	
   

  	
  Minimum
  Tangible Net Worth from prior month end 

  	
   

  	
  $                

  	
   

  
	
   

  	
   

  	
   

  	
  plus
  50% of positive current month end net income 

  	
   

  	
  $                

  	
   

  
	
   

  	
   

  	
   

  	
  New
  Minimum Tangible Net Worth

  	
   

  	
  $                

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Covenant
  Ratio [E/F]

  	
   

  	
   

  	
  $                

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  III.

  	
   

  	
   

  	
  Debt Service Coverage. The Company hereby
  certifies and warrants to you that the following is a true and 

  
	
   

  	
  correct computation of the Debt Service Coverage requirement set
  forth in Section 11.15 of the Credit Agreement, which is not less than
  2.00 to 1.00:

  



 


	
   

  	
  A.

  	
   

  	
  TTM EBITDA:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  TTM
  Income from Operations

  	
   

  	
  $                

  
	
   

  	
   

  	
   

  	
  TTM
  Depreciation

  	
   

  	
  $                

  
	
   

  	
   

  	
   

  	
  TTM
  Amortization

  	
   

  	
  $                

  
	
   

  	
   

  	
   

  	
  TTM Compensation Related to Stock             Options

  	
   

  	
  $                

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  TTM
  EBITDA

  	
   

  	
   

  	
  $                

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  B.

  	
   

  	
  Cash Flow Available for Debt Service:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (i)  TTM EBITDA

  	
   

  	
  $                

  
	
   

  	
   

  	
   

  	
  (ii)  TTM Leasing Expense

  	
   

  	
  $                

  
	
   

  	
   

  	
   

  	
  (iii)  TTM Capital Expenditures

  	
   

  	
  $                

  
	
   

  	
   

  	
   

  	
  (iv)  TTM Cash Taxes

  	
   

  	
  $                

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Cash Flow Available for Debt Service [(i + ii) – (iii + iv)]$                ________

  



 






(1) Excludes
Income Tax Refund Receivable


 


B-2

















 


	
   

  	
  C.

  	
   

  	
  Debt Service:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  TTM Interest Expense

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (including TTM Leasing Expense)

  	
   

  	
  $                

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Debt Service Coverage Ratio [B/C]:

  	
   

  	
   

  	
                  

  
	
   

  	
  Covenant Level

  	
   

  	
   

  	
  2.00x

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IV.

  	
   

  	
   

  	
  Maximum Senior
  Leverage. The
  Company hereby certifies and warrants to you that the following is a true and
  

  
	
   

  	
  correct
  computation of the Total Leverage requirement set forth in Section 11.16
  of the Credit Agreement, which is not less greater than 3.00 to 1.00:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A.

  	
   

  	
  Recourse Senior
  Debt:   $                

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  B.

  	
   

  	
  Tangible Net
  Worth:      $                

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Total Leverage
  Ratio [A/B]:

  	
   

  	
   

  	
                  

  
	
   

  	
  Covenant Level

  	
   

  	
   

  	
  3.00x

  
	
   

  	
   

  	
   

  	
   

  
	
  V.

  	
   

  	
   

  	
  Eligible Leases. The Company hereby certifies and warrants
  to you that the following is a true and correct 

  
	
  computation of the Eligible Leased Assets requirement set forth in
  Section 11.17 of the Credit Agreement:

  
	
   

  
	
   

  	
  A.

  	
   

  	
  Net Book Value
  of

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Eligible Leased
  Assets:

  	
  $                

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  B.

  	
   

  	
  Equipment cost

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  with respect to

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Eligible Leased
  Assets:

  	
  $                

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Covenant Level: 

  	
  [(.90) times (A)]

  	
   

  	
                  

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  shall not exceed [B]

  	
   

  	
                  

  
													



 


                The Company
further certifies to you that no Event of Default or Unmatured Event of Default
has occurred and is continuing.


 


The
Company has caused this Certificate to be executed and delivered by its duly
authorized officer on                      , 20     .


 


	
   

  	
  WINMARK CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name: 

  	
   

  
	
   

  	
  Title:

  	
   

  
					



 


B-3

















 


EXHIBIT C


 


FORM OF BORROWING BASE CERTIFICATE


 


To:          LaSalle Bank
National Association (the “Administrative Agent”)


 


Please
refer to the Amended and Restated Credit Agreement dated as of June 10, 2008 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”)
among Winmark Corporation (the “Company”)
and its subsidiaries (together with the Company, the “Loan Parties”),
each lender from time to time party hereto (collectively, the “Lenders”
and individually, a “Lender”), LASALLE BANK NATIONAL ASSOCIATION (“LaSalle”),
as Administrative Agent for the Lenders, and THE PRIVATEBANK AND TRUST COMPANY,
as Documentation Agent.  Capitalized
terms used but not otherwise defined herein shall have the same meanings herein
as in the Credit Agreement.


 


The
Company hereby certifies and warrants to the Lender that at the close of
business on                ,
         (the “Calculation Date”),
the Borrowing Base was $              ,
computed as set forth on the schedule attached hereto.


 


The
Company has caused this Certificate to be executed and delivered by its officer
thereunto duly authorized on                             ,
20           .


 


	
   

  	
  WINMARK CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name: 

  	
   

  
	
   

  	
  Title:

  	
   

  
				



 

















 


SCHEDULE TO BORROWING BASE CERTIFICATE


Dated as of [                    ]


 


	
  A.

  	
   

  	
  Availability Created by Eligible Equipment Leases

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Net book value of Eligible Leased Assets

  	
   

  	
  $                

  
	
   

  	
   

  	
  Advance Rate

  	
   

  	
  0.90

  
	
   

  	
   

  	
  Availability created by
  Eligible Leased Assets

  	
   

  	
  $                

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Availability created by Eligible Equipment Leases

  	
   

  	
  $                

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
   

  	
  Availability Created by Income from Operation of Franchising and
  Corporate Segments

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TTM EBITDA of Franchising Segment

  	
   

  	
  $                

  
	
   

  	
   

  	
  TTM EBITDA of Corporate Segment

  	
   

  	
  $                

  
	
   

  	
   

  	
  Total

  	
   

  	
  $                

  
	
   

  	
   

  	
  Advance Rate

  	
   

  	
  2.00

  
	
   

  	
   

  	
  Availability created by
  EBITDA of Franchising and Corporate Segments 

  	
   

  	
  $                
  

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Availability: Lesser of (A+B) and $55,000,000

  	
   

  	
  $                

  
	
   

  	
   

  	
   

  
	
  Less
  Outstandings:

  	
   

  	
  $                

  
	
   

  	
   

  	
   

  
	
  Excess Availability

  	
   

  	
  $                

  
							



 


C-2

















 


EXHIBIT D


 


FORM OF MASTER LETTER OF CREDIT AGREEMENT


 
















 


MASTER LETTER OF
CREDIT AGREEMENT


 


Dated as of           ,
200  


 


THIS MASTER LETTER OF
CREDIT AGREEMENT (this “Agreement”) is issued by the undersigned
applicant (the “Applicant”) in favor of LaSalle Bank National
Association (together with its affiliates as set forth in Section 11.8,
the “Bank”).


 


The Applicant may from
time to time request that the Bank issue letters of credit for the account of
the Applicant. The Applicant agrees that, except as provided below, any such
letter of credit shall be subject to the terms and provisions of this
Agreement, and the Applicant further agrees with and for the benefit of the
Bank as follows:


 


SECTION 1 CERTAIN
DEFINITIONS. When used herein the following terms shall have the following
meanings (such definitions to be applicable to both the singular and plural
forms of such terms):


 


Application means, at any time, an application
(which shall be in writing, including by facsimile, or made by electronic
transmission) for a letter of credit to be issued by the Bank, specifying (a) the
requested issuance date, the amount, the beneficiary and the expiration date of
such letter of credit, (b) the documentary requirements for drawing
thereunder and (c) such other information as the Bank may reasonably
request.


 


Business Day means any day on which the Bank is open
for commercial banking business at its principal office in Chicago, Illinois.


 


Event of Default means any of the events described in Section 9.1.


 


Item means any draft, order, instrument,
demand or other document drawn or presented, or to be drawn or presented, under
any Letter of Credit.


 


ISP means at any time the most recent
International Standby Practices issued by the Institute for International
Banking Law & Practice, Inc.


 


Letter of Credit means any letter of credit issued
(including any letter of credit issued prior to the date hereof) by the Bank
for the account of the Applicant (including any letter of credit issued jointly
for the account of the Applicant and any other Person), in each case as amended
or otherwise modified from time to time, but excluding any letter of
credit that is issued pursuant to an Application which expressly provides that
such letter of credit is not issued pursuant to this Agreement. A letter of
credit issued by the Bank pursuant to an Application from the Applicant (either
individually or together with any other Person) shall be a Letter of Credit
hereunder even if another Person is named as the “Applicant” or “Account Party”
in such letter of credit.


 


Liabilities means all obligations of the Applicant
to the Bank and its successors and assigns, howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent, now or hereafter
existing or due or to become due, arising out of or in connection with this
Agreement, any Letter of Credit, any Application or any instrument or document
delivered in connection herewith or therewith.


 


Person means any natural person, corporation,
partnership, trust, limited liability company, association, governmental
authority or unit, or any other entity, whether acting in an individual,
fiduciary or other capacity.


 


Prime Rate means the rate per annum established by
the Bank from time to time as its “Prime Rate” for commercial customers. The
Prime Rate is a reference rate and does not necessarily represent the lowest or
best rate actually charged to any customer.


 


UCC means at any time the Uniform Commercial
Code as in effect in the State of Illinois.


 


UCP means at any time the most recent
Uniform Customs and Practice for Documentary Credits issued by the
International Chamber of Commerce.


 


Unmatured Event of
Default means any
event which if it continues uncured will, with lapse of time or notice or both,
constitute an Event of Default.


 


SECTION 2 LETTER OF
CREDIT PROCEDURES.


 


2.1 Issuance of
Letters of Credit. Subject to the terms and conditions of this Agreement,
the Bank may from time to time, in its sole and complete discretion, issue
Letters of Credit for the account of the Applicant; provided that the
terms and provisions of each Letter of Credit and the Application therefor
shall be satisfactory to the Bank in its discretion.


 


2.2 Applications.
Not later than three Business Days prior to the date of the proposed issuance
of a Letter of Credit (or such later date as the Bank shall agree), the
Applicant shall deliver an Application for such Letter of Credit to the Bank.
An Application may be sent by facsimile, by United States mail, by overnight
courier, by electronic transmission using the system provided by the Bank, by
personal delivery or by any other means acceptable to the Bank.


 


2.3 Form of
Letters of Credit. (a) The Applicant authorizes the Bank to set forth
the terms of each Application in the Letter of Credit corresponding to such
Application (and in any amendment thereto) in such language as the Bank deems
appropriate, with such variations from such terms as the Bank may in its
discretion determine to be necessary (which determination shall be conclusive)
and not materially inconsistent with such Application. The Bank may, but shall
not be obligated to, request the Applicant to review the form of a Letter of
Credit prior to issuance thereof, in which case the Applicant shall be deemed
to have approved the form of such Letter of Credit. With respect to any other
Letter of Credit, the Applicant agrees that such Letter of Credit shall be
conclusively presumed to be in proper form unless the Applicant notifies the
Bank in writing of any inconsistency in such Letter of Credit within three
Business Days of its issuance. Upon receipt of timely notice of any discrepancy
in any Letter of Credit, the Bank will endeavor to obtain the consent of the
beneficiary and any confirming bank for an appropriate modification to such
Letter of Credit; provided that the Bank shall have no liability or
responsibility for its failure to obtain such consent.


 


(b) The Applicant
accepts the risk that a Letter of Credit will be interpreted or applied other
than as intended by the Applicant to the extent such Letter of Credit (i) permits
presentation at a place other than the place of issuance, (ii) permits
application of laws or practice rules with which the Applicant is
unfamiliar, (iii) includes ambiguous, inconsistent or impossible
requirements, (iv) requires termination or reduction against a
presentation made by the Applicant rather than the beneficiary or (v) fails
to incorporate appropriate letter of credit practices rules.


 


2.4 Representations
and Warranties. The delivery of each Application shall automatically
constitute a representation and warranty by the Applicant to the Bank to the
effect that on the requested date of issuance of such Letter of Credit, (a) the
representations and warranties of the Applicant set forth in Section 4
shall be true and correct as of such requested date as though made on the date
thereof and (b) no Event of Default or Unmatured Event of Default shall
have then occurred and be continuing or will result from such issuance.


 


SECTION 3
REIMBURSEMENT OBLIGATIONS; RESPONSIBILITIES, ETC.


 


3.1 Reimbursement
Obligations. The Applicant hereby agrees to reimburse the Bank forthwith
upon demand in an amount equal to any payment or disbursement made by the Bank
under any Letter of Credit or any time draft issued pursuant thereto, together
with interest on the amount so paid or disbursed by the Bank from and including
the date of payment or disbursement to but not including the date the Bank is
reimbursed by the Applicant at a rate per annum equal to the Prime Rate
from time to time in effect plus 2% (or, if less, the maximum rate permitted by
applicable law). The obligation of the Applicant to reimburse the Bank under
this Section 3 for payments and disbursements made by the Bank
under any Letter of Credit or any time draft issued pursuant thereto shall be
absolute and unconditional under any and all circumstances, including, without
limitation, the following:


 


(a)          any failure of any Item presented under such Letter of
Credit to strictly comply with the terms of such Letter of Credit;


 


(b)         the legality, validity, regularity or enforceability
of such Letter of Credit or of any Item presented thereunder;


 

















 


(c)          any defense based on the identity of the transferee of
such Letter of Credit or the sufficiency of the transfer if such Letter of
Credit is transferable;


 


(d)         the existence of any claim, set-off, defense or other
right that the Applicant may have at any time against any beneficiary or
transferee of such Letter of Credit, the Bank or any other Person, whether in
connection with this Agreement, the transactions contemplated hereby or any
unrelated transaction;


 


(e)          any Item presented under such Letter of Credit proving
to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;


 


(f)            honor of a demand for payment presented electronically
even if such Letter of Credit requires that demand be in the form of a draft;


 


(g)         waiver by the Bank of any requirement that exists for
the Bank’s protection and not the protection of the Applicant or any waiver by
the Bank which does not in fact materially prejudice the Applicant;


 


(h)         any payment made by the Bank in respect of an Item
presented after the date specified as the expiration date of, or the date by
which documents must be received under, such Letter of Credit if payment after
such date is authorized by the ISP, the UCC or the UCP, as applicable; or


 


(i)             any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing;


 


provided that the Applicant shall not be
obligated to reimburse the Bank for any wrongful payment or disbursement made
by the Bank under any Letter of Credit as a result of any act or omission
constituting gross negligence or willful misconduct on the part of the Bank.


 


3.2 Discrepancies.
(a) The Applicant agrees that it will promptly examine any and all
instruments and documents delivered to it from time to time in connection with
any Letter of Credit, and if the Applicant has any claim of non-compliance with
its instructions or of discrepancies or other irregularity, the Applicant will
immediately (and, in any event, within three Business Days) notify the Bank
thereof in writing, and the Applicant shall be deemed to have waived any claim
against the Bank unless such notice is given within such time period. Without
limiting the foregoing, if the Bank makes any payment or disbursement under a
Letter of Credit and the Applicant does not send a notice to the Bank within
three Business Days objecting to such payment or disbursement and specifying in
reasonable detail the discrepancy or irregularity which is the basis for such
objection, then the Applicant shall be precluded from making any objection to
the Bank’s honor of the presentation with respect to which such payment or
disbursement was made (but shall not be precluded from asserting any objection
to any different presentation under the same or a different Letter of Credit).


 


(b) The Applicant’s
acceptance or retention of any documents presented under or in connection with
a Letter of Credit (including originals or copies of documents sent directly to
the Applicant) or of any property for which payment is supported by a Letter of
Credit shall ratify the Bank’s honor of the documents and absolutely preclude
the Applicant from raising a defense or claim with respect to the Bank’s honor
of the relevant presentation.


 


3.3 Documents.
Unless specified to the contrary in the relevant Application, the Applicant
agrees that the Bank and its correspondents: (a) may accept as complying
with the applicable Letter of Credit any Item drawn, issued or presented under
such Letter of Credit which is issued or purportedly issued by an agent,
executor, trustee in bankruptcy, receiver or other representative of the party
identified in such Letter of Credit as the party permitted to draw, issue or
present such Item; and (b) may in its or their discretion, but shall not
be obligated to, accept or honor (i) any Item which substantially complies
with the terms of the applicable Letter of Credit; (ii) any Item which
substantially complies under the laws, rules, regulations and general banking
or trade customs and usages of the place of presentation, negotiation or
payment; (iii) drafts which fail to bear any or adequate reference to the
applicable Letter of Credit; (iv) any Item presented to the Bank after the
stated expiration date of a Letter of Credit but within any applicable time
period during which such Letter of Credit may be honored in accordance with the
UCP, the UCC and/or the ISP, as applicable (and, in any event, any Item
presented to the Bank on the Business Day immediately following the stated
expiration date of any Letter of Credit, if such stated expiration date falls
on a day which is not a Business Day); or (v) any Item which substantially
complies with the requirements of the UCP, the UCC and/or the ISP, as
applicable. In determining whether to pay under any Letter of Credit, the Bank
shall have no obligation to the Applicant or any other Person except to confirm
that the Items required to be delivered under such Letter of Credit appear to
have been delivered and appear on their face to substantially comply with the
requirements of such Letter of Credit. For purposes of the foregoing, an Item “substantially
complies” unless there are discrepancies in the presentation which appear to be
substantial and which reflect corresponding defects in the beneficiary’s
performance in the underlying transaction. A discrepancy is not substantial if
it is unrelated or immaterial to the nature or amount of the Applicant’s loss.
For example, documents honored by the Bank that do not comply with the timing
requirements of the Letter of Credit for presenting or dating any required
beneficiary statement nonetheless substantially comply if those timing
requirements are not material in determining whether the underlying agreement
has been substantially performed or violated.


 


3.4 Exculpation.
In addition to the exculpatory provisions contained in the UCP, the UCC and/or
the ISP, as applicable, the Bank and its correspondents shall not be
responsible for, and the Applicant’s obligation to reimburse the Bank shall not
be affected by, (a) compliance with any law, custom or regulation in
effect in the country of issuance, presentation, negotiation or payment of any
Letter of Credit, (b) any refusal by the Bank to honor any Item because of
an applicable law, regulation or ruling of any governmental agency, whether now
or hereafter in effect, (c) any action or inaction required or permitted
under the UCC, the UCP, the ISP or the United Nations Convention on Independent
Guarantees and Stand-by Letters of Credit, in each case as applicable, or (d) any
act or the failure to act of any agent or correspondent of the Bank, including,
without limitation, failure of any such agent or correspondent to pay any Item
because of any law, decree, regulation, ruling or interpretation of any
governmental agency.


 


3.5 Risks. The
Applicant assumes all risks of the acts or omissions of any beneficiary or
transferee of any Letter of Credit (it being understood that such assumption is
not intended to, and shall not, preclude the Applicant from pursuing any right
or remedy it may have against any such beneficiary or transferee). The
Applicant further agrees that any action or omission by the Bank under or in
connection with any Letter of Credit or any related Item, document or property
shall, unless in breach of good faith, be binding on the Applicant and shall
not put the Bank under any resulting liability to the Applicant. Without
limiting the foregoing, the Applicant agrees that in no event shall the Bank be
liable for incidental, consequential, punitive, exemplary or special damages.


 


3.6 Limitation on Bank’s
Obligations. Without limiting any other provision herein, the Bank is
expressly authorized and directed to honor any request for payment which is
made under and in compliance with the terms of any Letter of Credit without
regard to, and without any duty on the part of the Bank to inquire into, the
existence of any dispute or controversy between any of the Applicant, the
beneficiary of any Letter of Credit or any other Person, or the respective
rights, duties or liabilities of any of them, or whether any facts represented
in any Item presented under a Letter of Credit are true or correct.
Furthermore, the Applicant agrees that the Bank’s obligation to the Applicant
shall be limited to honoring requests for payment made under and in compliance
with the terms of any Letter of Credit, and the Bank’s obligation remains so
limited even if the Bank may have prepared or assisted in the preparation of
the wording of any Letter of Credit or any Item required to be presented
thereunder or the Bank may otherwise be aware of the underlying transaction
giving rise to any Letter of Credit.


 


3.7 Automatic Renewal
of Letters of Credit. IF ANY LETTER OF CREDIT CONTAINS ANY PROVISION FOR
AUTOMATIC RENEWAL, THE APPLICANT ACKNOWLEDGES AND AGREES THAT THE BANK IS UNDER
NO OBLIGATION TO ALLOW SUCH RENEWAL TO OCCUR AND ANY SUCH RENEWAL SHALL REMAIN
WITHIN THE SOLE AND ABSOLUTE DISCRETION OF THE BANK. THE APPLICANT IRREVOCABLY
CONSENTS TO THE AUTOMATIC RENEWAL OF EACH SUCH LETTER OF CREDIT IN ACCORDANCE
WITH ITS TERMS IF THE BANK ALLOWS SUCH RENEWAL TO OCCUR; PROVIDED THAT
THE APPLICANT SHALL HAVE THE RIGHT TO REQUEST THE BANK TO DISALLOW ANY SUCH
RENEWAL ON THE CONDITION THAT THE APPLICANT SHALL GIVE THE BANK PRIOR WRITTEN


 


2

















 


NOTICE OF SUCH REQUEST
NOT LESS THAN 30 DAYS PRIOR TO THE DEADLINE IMPOSED UPON THE BANK FOR
NOTIFICATION TO THE BENEFICIARY OF NON-RENEWAL OF ANY SUCH LETTER OF CREDIT.


 


SECTION 4
REPRESENTATIONS AND WARRANTIES. The Applicant represents and warrants to the
Bank that:


 


(a)          Organization, etc. The Applicant is duly organized or formed, validly
existing and (to the extent applicable under the laws of the relevant
jurisdiction) in good standing under the laws of the jurisdiction of its
organization or formation, and the Applicant is duly qualified and in good
standing as a foreign entity authorized to do business in each other
jurisdiction where, because of the nature of its activities or properties, such
qualification is required.


 


(b)         Authorization; No Conflict. The execution and delivery by the
Applicant of this Agreement and each Application, the issuance of Letters of
Credit for the account of the Applicant hereunder and the performance by the
Applicant of its obligations under this Agreement and the Applications are
within the organizational powers of the Applicant, have been duly authorized by
all necessary organizational action, have received all necessary governmental
approval (if any shall be required), and do not and will not contravene or
conflict with, or result in or require the imposition of any lien or security
interest under, any provision of law or of the charter or by-laws of the
Applicant or of any indenture, loan agreement or other contract, or any
judgment, order or decree, which is binding upon the Applicant.


 


(c)          Validity and Binding Nature. This Agreement is, and upon delivery to
the Bank each Application will be, the legal, valid and binding obligation of
the Applicant, enforceable against the Applicant in accordance with its terms,
subject to bankruptcy, insolvency and similar laws of general application
affecting the rights of creditors and to general principles of equity.


 


(d)         Approvals. No authorization, approval or consent of, or notice
to or filing with, any governmental or regulatory authority is required to be
made in connection with the execution and delivery by the Applicant of this
Agreement or the issuance of any Letter of Credit for the account of the
Applicant pursuant hereto.


 


SECTION 5 FEES.
 The Applicant agrees to pay the Bank all reasonable fees of the Bank (at
the rates specified by the Bank from time to time in schedules delivered by the
Bank to the Applicant) with respect to each Letter of Credit (including,
without limitation, all fees associated with any amendment to, drawing under,
banker’s acceptance pursuant to, or transfer of a Letter of Credit), such fees
to be payable on demand by the Bank therefor.


 


SECTION 6 COMPUTATION
OF INTEREST AND FEES. All interest and fees hereunder shall be computed for the
actual number of days elapsed on the basis of a year of 360 days. The interest
rate applicable to Letter of Credit reimbursement obligations shall change
simultaneously with each change in the Prime Rate.


 


SECTION 7 MAKING OF
PAYMENTS. (a) All payments of principal of, or interest on, letter of
credit reimbursement obligations, all payments of fees and all other payments
hereunder shall be made by the Applicant in immediately available funds to the
Bank at its principal office in Chicago not later than 12:30 P.M., Chicago
time, on the date due, and funds received after that time shall be deemed to
have been received by the Bank on the next Business Day. If any payment of
principal, interest or fees falls due on a Saturday, Sunday or other day which
is not a Business Day, then such due date shall be extended to the next
Business Day, and additional interest shall accrue and be payable for the
period of such extension.


 


(b) The Applicant
irrevocably agrees that the Bank or any affiliate thereof may (but neither the
Bank nor any such affiliate shall be obligated to) debit any deposit account of
the Applicant in an amount sufficient to pay any fee, reimbursement obligation
or other amount that is due and payable hereunder. The Bank or the applicable
affiliate shall promptly notify the Applicant of any such debit (but failure of
the Bank or any such affiliate to do so shall not impair the effectiveness
thereof or impose any liability on the Bank or such affiliate).


 


(c) The
Applicant shall reimburse the Bank for each payment under a Letter of Credit in
the same currency in which such payment was made; provided that, if the
Bank so requests (in its discretion), the Applicant shall reimburse the Bank in
United States dollars for any payment under a Letter of Credit made in a
foreign currency at the rate at which the Bank could sell such foreign currency
in exchange for United States dollars for transfer to the place of payment of such
payment or, if there is no such rate, the United States dollar equivalent of
the Bank’s actual cost of settlement. The Applicant agrees to pay the Bank on
demand in United States dollars such amounts as the Bank may be required to
expend to comply with any and all governmental exchange regulations now or
hereafter applicable to the purchase of foreign currency.


 


(d) All
payments by the Applicant hereunder shall be made free and clear of and without
deduction for any present or future income, excise or stamp taxes and any other
taxes, fees, duties, withholdings or other charges of any nature whatsoever
imposed by any taxing authority, but excluding franchise taxes and taxes
imposed on or measured by the Bank’s net income or receipts (such non-excluded
items being called “Taxes”). If any withholding or deduction from any
payment to be made by the Bank hereunder is required in respect of any Taxes
pursuant to any applicable law, rule or regulation, then the Applicant
will


 


(i)    pay directly to the relevant authority the
full amount required to be so withheld or deducted;


 


(ii)   promptly forward to the Bank an official
receipt or other documentation satisfactory to the Bank evidencing such payment
to such authority; and


 


(iii)  pay to the Bank such additional amount as is
necessary to ensure that the net amount actually received by the Bank will
equal the full amount the Bank would have received had no such withholding or
deduction been required.


 


Moreover, if any Taxes
are directly asserted against the Bank or on any payment received by the Bank
hereunder, the Bank may pay such Taxes and the Applicant will promptly pay such
additional amount (including any penalty, interest or expense) as is necessary
in order that the net amount received by the Bank after the payment of such
Taxes (including any Taxes on such additional amount) shall equal the amount
the Bank would have received had no such Taxes been asserted.


 


If the Applicant fails to
pay any Taxes when due to the appropriate taxing authority or fails to remit to
the Bank the required receipts or other required documentary evidence, the
Applicant shall indemnify the Bank for any incremental Tax, interest, penalty
or expense that may become payable by the Bank as a result of such failure.


 


SECTION 8  INCREASED
COSTS. If, after the date hereof, the adoption of, or any change in, any
applicable law, rule or regulation, or any change in the interpretation or
administration of any applicable law, rule or regulation by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by the Bank with any
request, guideline or directive (whether or not having the force of law) of any
such authority, central bank or comparable agency,


 


(a)          affects or would affect the amount of capital required
or expected to be maintained by the Bank or any corporation controlling the
Bank and (taking into consideration the Bank’s or such controlling corporation’s
policies with respect to capital adequacy) the Bank determines that the amount
of such capital is increased as a consequence of this Agreement or the Letters
of Credit; or


 


(b)         imposes, modifies or deems applicable any reserve
(including, without limitation, any reserve imposed by the Board of Governors
of the Federal Reserve System), special deposit or similar requirement against
assets of, deposits with or for the account of, or credit extended by the Bank
with respect to letters of credit, or imposes on the Bank any other condition
affecting this Agreement or the Letters of Credit, and the Bank determines that
the result of any of the foregoing is to increase the cost to, or to impose a
cost on, the Bank of issuing or maintaining any Letter of Credit or of making
any payment or disbursement under any Letter of Credit, or to reduce the amount
of any sum received or receivable by the Bank under this Agreement;


 


3

















 


then within five Business Days after demand
by the Bank (which demand shall be accompanied by a statement setting forth in
reasonable detail the basis of such demand and a calculation thereof in
reasonable detail), the Applicant shall pay directly to the Bank such
additional amount as will compensate the Bank for such increased capital
requirement, such increased cost or such reduction, as the case may be.
Determinations and statements of the Bank pursuant to this Section 8
shall be conclusive absent manifest error, and the provisions of this Section 8
shall survive termination of this Agreement.


 


SECTION 9 EVENTS OF
DEFAULT AND THEIR EFFECT.


 


9.1 Events of Default.
Each of the following shall constitute an Event of Default under this
Agreement:


 


9.1.1 Non-Payment of
Liabilities, etc. Default in the payment when due of any principal of or
interest on any Liabilities; or default, and continuance thereof for five days
after notice thereof from the Bank, in the payment when due of any fees or
other amounts payable by the Applicant hereunder.


 


9.1.2 Bankruptcy, etc.
The Applicant or any guarantor of the Liabilities shall become insolvent or
admit in writing its inability to pay debts as they mature, or the Applicant or
any such guarantor shall apply for, consent to or acquiesce in the appointment
of a trustee or receiver, or in the absence of such application, consent or
acquiescence, a trustee or receiver is appointed for the Applicant or any such
guarantor, or any proceeding under any bankruptcy or insolvency law or any
dissolution or liquidation proceeding is instituted by or against the Applicant
or any such guarantor and, if instituted against the Applicant or such
guarantor, remains for 30 days undismissed, or any writ of attachment is issued
against any substantial portion of the Applicant’s or any such guarantor’s
property and is not released within 30 days of service, or the Applicant or any
such guarantor takes any action to authorize, or in furtherance of, any of the
foregoing.


 


9.1.3 Other Agreements
with Bank. Any default shall occur (subject to any applicable grace period)
under any other agreement between the Applicant and the Bank or any of its
affiliates (including any agreement under which the Applicant is a borrower and
the Bank or any such affiliate and one or more other financial institutions are
the lenders); or the Applicant shall fail to comply with or to perform (subject
to any applicable grace period) any covenant set forth in any such other
agreement as such covenant is in effect on the date hereof or is amended from
time to time with the consent of the Bank (but without giving effect to the expiration
or termination of any such agreement unless such agreement is replaced by
another agreement to which the Bank is a party).


 


9.1.4 Representations
and Warranties. Any representation or warranty made by the Applicant herein
or in any writing furnished in connection with or pursuant to this Agreement
shall be false or misleading in any material respect on the date made.


 


9.2 Effect of Event of
Default. If any Event of Default described in Section 9.1.2
shall occur, all Liabilities shall immediately become due and payable and the
Applicant shall immediately become obligated to deliver to the Bank cash
collateral in an amount equal to the face amount of all outstanding Letters of
Credit; and if any other Event of Default shall occur, the Bank may declare all
Liabilities to be due and payable and may demand that the Applicant immediately
deliver to the Bank cash collateral in an amount equal to the face amount of
all outstanding Letters of Credit, whereupon all Liabilities shall become
immediately due and payable and the Applicant shall immediately become
obligated to deliver to the Bank cash collateral in an amount equal to the face
amount of all outstanding Letters of Credit. The Bank shall promptly advise the
Applicant of any such declaration, but failure to do so shall not impair the
effect of such declaration. The Applicant hereby grants the Bank a security
interest in all cash collateral delivered hereunder. All cash collateral shall
be held by the Bank and applied to Liabilities arising in connection with any
drawing under a Letter of Credit. After all Letters of Credit have been fully
drawn, expired or been terminated, such cash collateral shall be applied by the
Bank, first, to any remaining Liabilities and, then, to any other liabilities
of the Applicant to the Bank, and any excess shall be delivered to the
Applicant or as a court of competent jurisdiction may direct.


 


SECTION 10 SECURITY.


 


10.1 Grant of Security
Interest. As security for the prompt payment and performance of all
Liabilities, and in addition to any other security given to the Bank by
separate agreement, the Applicant hereby grants to the Bank a continuing
security interest in all of the following, whether now existing or hereafter
arising: (i) all property shipped, stored or dealt with in connection with
any Letter of Credit; and (ii) all drafts, documents, instruments,
contracts (including, without limitation, shipping documents, warehouse
receipts and policies or certificates of insurance), inventory, accounts,
chattel paper and general intangibles, and all proceeds of the foregoing,
arising from or in connection with any Letter of Credit, including, without
limitation, any of the foregoing which is in the Bank’s actual or constructive
possession or is in transit to the Bank or any of its affiliates, agents or
correspondents (and regardless of whether such property has been released to
the Applicant). The Applicant further agrees that the Bank or any of its
affiliates may set off and apply to any of the Liabilities which are then due and
payable (by acceleration or otherwise) any deposit of the Applicant at any time
held by the Bank or any of its affiliates. The Applicant agrees that this
Agreement (or a carbon or photographic copy hereof) may be filed as a financing
statement to the extent permitted by law. The Applicant authorizes the Bank to
file such financing statements as may be required by the Bank to perfect the
security interest of the Bank hereunder. The Applicant also agrees that, on
request by the Bank, the Applicant shall execute and deliver such financing
statements and other documents or instruments as may be required by the Bank to
perfect or maintain the security interest of the Bank hereunder.


 


10.2 Rights and
Remedies. The Bank shall have all rights and remedies of a secured party
under the UCC. If prior notice to the Applicant is required for any action, the
Bank shall give the Applicant at least five days’ notice in writing of the time
and place of the sale, disposition or other event giving rise to such required
notice, and the Applicant agrees that such notice will be deemed commercially
reasonable. Any property or document representing collateral may be held by the
Bank in its name or in the name of the Bank’s nominee, all without prior
notice. Proceeds of any sale or other disposition of collateral shall be
applied, in order, to the expenses of retaking, holding and preparing the
collateral for sale (including reasonable attorneys’ fees and legal expenses),
and then to the obligations of the Applicant hereunder until paid in full. The
Applicant shall be liable for any deficiency.


 


SECTION 11 GENERAL.


 


11.1 Waiver:
Amendments. No delay on the part of the Bank in the exercise of any right,
power or remedy shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or remedy preclude other or further
exercise thereof, or the exercise of any other right, power or remedy. No
amendment, modification or waiver of, or consent with respect to, any provision
of this Agreement shall be effective unless the same shall be in writing and
signed and delivered by the Bank, and then any such amendment, modification,
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.


 


11.2 Notices. (a) Except
as otherwise expressly provided herein, all notices hereunder shall be in
writing (including facsimile and electronic transmission, which shall be
considered original writings). Notices given by mail shall be deemed to have
been given three Business Days after the date sent if sent by registered or
certified mail, postage prepaid, to the applicable party at its address shown
below its signature hereto or at such other address as such party may, by
written notice received by the other party to this Agreement, have designated
as its address for notices. Notices given by facsimile or electronic
transmission shall be deemed to have been given when sent. Notices sent by any
other means shall be deemed to have been given when received (or when delivery
is refused).


 


(b) The Bank may
rely on any writing (including any facsimile, any electronic transmission or
any information on a computer disk or similar medium which may be reduced to
writing), or any telephonic or other oral message or instruction (including,
without limitation, any oral waiver of any discrepancy with respect to any
Item), that the Bank believes in good faith to have been received from an
authorized officer, employee or representative of the Applicant, and the Bank
shall not be liable for any action taken in good faith with respect to any
writing, message or instruction from an unauthorized person. The Bank shall not
be under any duty to verify the identity of any


 


4

















 


person submitting any
Application or other writing or making any other communication hereunder.
Notwithstanding the foregoing, the Bank is not obligated to recognize the
authenticity of any request to issue, amend, honor or otherwise act on any
Letter of Credit that is not evidenced to the Bank’s satisfaction by a writing
originally signed by a person the Applicant has certified is authorized to act
for the Applicant hereunder or by a message or instruction authenticated to the
Bank’s satisfaction.


 


11.3 Costs Expenses
and Taxes; Indemnification. (a) The Applicant agrees to pay on demand
all reasonable out-of-pocket costs and expenses of the Bank (including the
reasonable fees and charges of counsel for the Bank) in connection with the
enforcement of this Agreement. In addition, the Applicant agrees to pay, and to
save the Bank harmless from all liability for, any stamp or other taxes which
may be payable in connection with the execution or delivery of this Agreement,
the issuance of Letters of Credit hereunder, or the issuance of any other instrument
or document provided for herein or delivered or to be delivered hereunder or in
connection herewith.


 


(b) The Applicant agrees
to indemnify the Bank and each of its affiliates and each of their respective
officers, directors, employees and agents (each an “Indemnified Party”)
against, and to hold each Indemnified Party harmless from, any and all actions,
causes of action, suits, losses, costs, damages, expenses (including reasonable
attorneys’ fees and charges, expert witness fees and other dispute resolution
expenses) and other liabilities (collectively the “Indemnified Liabilities”)
incurred by any Indemnified Party as a result of, or arising out of, or
relating to, this Agreement or any Letter of Credit (and without regard to
whether the applicable Indemnified Party is a party to any proceeding out of
which such Indemnified Liabilities arise), except to the extent that a court of
competent jurisdiction determines in a final, non-appealable order that any
Indemnified Liability resulted directly from the gross negligence or willful
misconduct of such Indemnified Party. Without limiting the generality of the
foregoing sentence, the term “Indemnified Liabilities” includes any claim or
liability in which an advising, confirming or other nominated bank, or a
beneficiary requested to issue its own undertaking, seeks to be reimbursed,
indemnified or compensated. If and to the extent the foregoing undertaking may
be unenforceable for any reason, the Applicant agrees to make the maximum
contribution to the payment of each of the Indemnified Liabilities which is
permitted under applicable law.


 


(c) Without limiting clause
(b), the Applicant agrees to indemnify the Bank, and to hold the Bank
harmless from, any loss or expense incurred by the Bank as a result of any
judgment or order being given or made for the payment of any amount due
hereunder in a particular currency (the “Currency of Account”) and such
judgment or order being expressed in a currency (the “Judgment Currency”)
other than the Currency of Account and as a result of any variation having
occurred in the rate of exchange between the date which such amount is
converted into the Judgment Currency and the date of actual payment pursuant
thereto. The foregoing indemnity shall constitute a separate and independent
obligation of the Applicant.


 


(d) All obligations
provided for in this Section 11.3 shall survive any termination of
this Agreement.


 


11.4 Captions. Section captions
used in this Agreement are for convenience only and shall not affect the construction
of this Agreement.


 


11.5 Governing Law.
This Agreement shall be a contract made under and governed by the laws of the
State of Illinois applicable to contracts made and to be performed entirely
within such State. Except to the extent inconsistent with such state law or
otherwise expressly stated in any Letter of Credit, each Letter of Credit and
this Agreement also are subject to the terms of (i) with respect to
matters relating to standby Letters of Credit and Applications therefor, the
ISP, and (ii) with respect to matters relating to commercial Letters of
Credit and Applications therefor, the UCP. Whenever possible each provision of
this Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement. All obligations of the Applicant and rights of the Bank
expressed herein shall be in addition to and not in limitation of those
provided by applicable law.


 


11.6 Counterparts.
This Agreement may be executed in any number of counterparts and by the parties
hereto on separate counterparts and each such counterpart shall be deemed to be
an original, but all such counterparts shall together constitute but one and
the same Agreement.


 


11.7 Successors and
Assigns. This Agreement shall be binding upon the Applicant and its
successors and assigns, provided that the Applicant may not assign any
of its rights or obligations hereunder without the prior written consent of the
Bank.


 


11.8 Right of Bank to
Act through Branches and Affiliates. The Bank may cause any Letter of
Credit requested by the Applicant to be issued by a branch or affiliate of the
Bank, and all references to the “Bank” herein or in any related document shall
include each applicable branch or affiliate.


 


11.9 Foreign Assets
Control Regulations. The Applicant certifies that no transaction in foreign
commodities covered by any Application will be prohibited under the foreign
assets control regulations of the United States Treasury Department and that
any importation related to any Letter of Credit will conform with all
applicable laws, rules and regulations.


 


11.10 Mitigation;
Limitation of Liability. The Applicant agrees to take action to avoid or
reduce the amount of any damages which may be claimed against the Bank. For
example, (a) in the case of wrongful honor, the Applicant agrees to
enforce its rights arising out of the underlying transaction (except to the
extent that enforcement is impractical due to the insolvency of the beneficiary
or other Person from whom the Applicant might otherwise recover), and (b) in
the case of wrongful dishonor, the Applicant agrees to specifically and timely
authorize the Bank to effect a cure and give written assurances to the
beneficiary that a cure is being arranged. The Applicant’s aggregate remedies
against the Bank for honoring a presentation or retaining honored documents in
breach of the Bank’s obligations to the Applicant (whether arising under this
Agreement, applicable letter of credit practice or law, or any other agreement
or law) are limited to the aggregate amount paid by the Applicant to the Bank
with respect to the honored presentation.


 


11.11 Subrogation.
The Bank shall be subrogated (for purposes of defending against the Applicant’s
claims and proceeding against others to the extent of any liability of the Bank
to the Applicant) to the Applicant’s rights against any Person who may be
liable to the Applicant on any underlying transaction, to the rights of any
holder in due course or Person with similar status against the Applicant and to
the rights of the beneficiary of any Letter of Credit or its assignee or any
Person with similar status against the Applicant.


 


11.12 Co-Applicants.
(a) If this Agreement is signed by two or more Persons (each a “Co-Applicant”),
then the term “Applicant” shall mean each such Person and all such Persons
shall be jointly and severally liable for all obligations of the “Applicant”
hereunder and in respect of the Letters of Credit issued pursuant hereto. Any
Co-Applicant shall have the right to issue all instructions relating to Letters
of Credit (including, without limitation, instructions as to the disposition of
documents and waiver of discrepancies) and to agree with the Bank upon any
amendment, extension, renewal or modification of, or change in the amount of,
any Letter of Credit, and such instructions and agreements shall be binding
upon all Co-Applicants. Each Co-Applicant shall be bound by (i) any notice
from the Bank to any other Co-Applicant, (ii) any other Co-Applicant’s
settlement or release of any claim against the Bank arising under this
Agreement and (iii) any default under this Agreement attributable to any
other Co-Applicant.


 


(b)      Each Co-Applicant agrees that if at any
time all or any part of any payment theretofore applied by the Bank to any of
the Liabilities is or must be rescinded or returned by the Bank for any reason
whatsoever (including the insolvency, bankruptcy or reorganization of any
Co-Applicant), such Liabilities shall, to the extent that such payment is or
must be rescinded or returned, be deemed to have continued in existence,
notwithstanding such application by the Bank, and the obligations of such
Co-Applicant with respect thereto shall continue to be effective or be
reinstated, as the case may be, as to such Liabilities, all as though such
application by the Bank had not been made.


 


(c)       The Bank may, from time to time, in its
sole discretion and without affecting the obligation of any Co-Applicant, take
any or all of the following actions: (a) retain or obtain the primary or
secondary obligation of any other obligor, in addition to such Co-Applicant,
with respect to any of the Liabilities, and take any security for the
obligations of any such other obligor, (b) extend


 


5

















 


or renew any of the
Liabilities for one or more periods (whether or not longer than the original
period), alter or exchange any of the Liabilities, or release or compromise any
obligation of any other Co-Applicant or any obligation of any nature of any
other obligor with respect to any of the Liabilities, (c) release its
security interest in, or surrender, release or permit any substitution or
exchange for, all or any part of any property securing any of the Liabilities,
or extend or renew for one or more periods (whether or not longer than the
original period) or release, compromise, alter or exchange any obligations of
any nature of any obligor with respect to any such property, and (d) resort
to such Co-Applicant for payment of any of the Liabilities when due, whether or
not the Bank shall have resorted to any property securing any of the
Liabilities or shall have proceeded against any other Co-Applicant or any other
obligor primarily or secondarily obligated with respect to any of the
Liabilities.


 


11.13 Continuation of
Liability. Regardless of the expiry date of any Letter of Credit, the
Applicant shall remain liable hereunder until the Bank is released from
liability by every Person that is entitled to draw or demand payment under each
Letter of Credit issued pursuant hereto.


 


11.14 Jurisdiction.
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT OR ANY APPLICATION, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY
IN THE COURTS OF COOK COUNTY, ILLINOIS OR IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS; PROVIDED THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT
THE BANK’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR
OTHER PROPERTY MAY BE FOUND. THE APPLICANT HEREBY EXPRESSLY AND
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF COOK COUNTY, ILLINOIS
AND OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS
FOR THE PURPOSE OF ANY SUCH LITIGATION. THE APPLICANT FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, TO THE
ADDRESS SET FORTH BENEATH ITS SIGNATURE HERETO (OR SUCH OTHER ADDRESS AS IT
SHALL HAVE SPECIFIED IN WRITING TO THE BANK AS ITS ADDRESS FOR NOTICES
HEREUNDER) OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF ILLINOIS. THE
APPLICANT EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF
VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY
SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.


 


11.15 Waiver of
Jury Trial. EACH OF THE APPLICANT AND, BY ISSUING ANY LETTER OF CREDIT, THE
BANK HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT OR ANY APPLICATION,
INSTRUMENT, DOCUMENT, AMENDMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY BANKING
RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREES THAT ANY
SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.


 


Delivered at Chicago,
Illinois, as of the day and year first above written.


 


 


	
   

  
	
  [Applicant]

  
	
   

  
	
  By

  	
   

  
	
   

  	
   

  
	
  Title

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  
	
   

  	
   

  
	
  Title

  	
   

  
	
   

  	
   

  
	
  Address:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Attention:

  	
   

  
	
   

  	
   

  
	
  Facsimile:

  	
   

  
	
   

  
	
   

  
	
   

  
	
  [Second Applicant, if
  applicable]

  
	
   

  
	
  By

  	
   

  
	
   

  	
   

  
	
  Title

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  
	
   

  	
   

  
	
  Title

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Address:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Attention:

  	
   

  
	
   

  	
   

  
	
  Facsimile:

  	
   

  



 


6
















 


EXHIBIT E


 


FORM OF NOTICE OF BORROWING


 


To:                     LaSalle
Bank National Association (the “Administrative Agent”)


 


Please
refer to the Amended and Restated Credit Agreement dated as of June 10, 2008 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”)
among Winmark Corporation (the “Company”)
and its subsidiaries (together with the Company, the “Loan Parties”),
each lender from time to time party hereto (collectively, the “Lenders”
and individually, a “Lender”), LASALLE BANK NATIONAL ASSOCIATION (“LaSalle”),
as Administrative Agent for the Lenders, and THE PRIVATEBANK AND TRUST COMPANY,
as Documentation Agent.  Capitalized
terms used but not otherwise defined herein shall have the same meanings herein
as in the Credit Agreement.


 


The
undersigned hereby gives irrevocable notice, pursuant to Section 2.2.2
of the Credit Agreement, of a request hereby for a borrowing as follows:


 


(i)            The requested borrowing date for the
proposed borrowing (which is a Business Day) is              ,       .


 


(ii)           The aggregate amount of the proposed
borrowing is $                 .


 


(iii)          The type of Revolving Loans comprising
the proposed borrowing are [Base Rate] [LIBOR] [Fixed Rate] Loans.


 


(iv)          The duration of the Interest Period
for each LIBOR Loan made as part of the proposed borrowing, if applicable, is           
month(s) (which shall be 1, 2, 3 or 6 months).


 


(v)           The duration of the Interest Period
for each Fixed Rate Loan made as part of the proposed borrowing, if applicable,
is           year(s) (which
shall be 1, 2, 3, 4 or 5 years).  An
amortization schedule reflecting monthly payments over the life of such Fixed
Rate Loan over the Interest Period therefor commencing on the same date of the
next month following the borrowing is attached hereto.


 


The
undersigned hereby certifies that on the date hereof and on the date of
borrowing set forth above, and immediately after giving effect to the borrowing
requested hereby: (i) there exists and there shall exist no Unmatured
Event of Default or Event of Default under the Credit Agreement; (ii) each
of the representations and warranties contained in the Credit Agreement and the
other Loan Documents is true and correct as of the date hereof, except to the
extent that such representation or warranty expressly relates to another date
and except for changes therein expressly permitted or expressly contemplated by
the Credit Agreement; and (iii) no more than eighteen (18) borrowings or
continuations of, or conversions to, Fixed Rate Loans have been made in the
current calendar year.


 


The
Company has caused this Notice of Borrowing to be executed and delivered by its
officer thereunto duly authorized on                 ,          .


 


	
   

  	
  WINMARK CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					



 

















 


EXHIBIT F


 


FORM OF NOTICE OF CONVERSION/CONTINUATION


 


To:                     LaSalle
Bank National Association (the “Administrative Agent”)


 


Please
refer to the Amended and Restated Credit Agreement dated as of June 10, 2008 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”)
among Winmark Corporation (the “Company”)
and its subsidiaries (together with the Company, the “Loan Parties”),
each lender from time to time party hereto (collectively, the “Lenders”
and individually, a “Lender”), LASALLE BANK NATIONAL ASSOCIATION (“LaSalle”),
as Administrative Agent for the Lenders, and THE PRIVATEBANK AND TRUST COMPANY,
as Documentation Agent.  Capitalized
terms used but not otherwise defined herein shall have the same meanings herein
as in the Credit Agreement.


 


The undersigned hereby
gives irrevocable notice, pursuant to Section 2.2.3 of the Credit
Agreement, of its request to:


 


(a)           on [date] convert $[           ]
of the aggregate outstanding principal amount of the [           
] Loan, into a(n) [              ]
Loan [and, in the case of a LIBOR Loan, having an Interest Period of [          ]
month(s)][and, in the case of a Fixed Rate Loan, having an Interest Period of [          ]
years(s)];





[(b)          on [date] continue
$[           ] of the
aggregate outstanding principal amount of the [LIBOR Loan, as a LIBOR Loan
having an Interest Period of [          ]
month(s)][Fixed Rate Loan, as a Fixed Rate Loan having an Interest Period of [        ]
year(s)].


 


The undersigned hereby represents and warrants that all of the
conditions contained in Section 12.2 of the Credit Agreement have
been satisfied on and as of the date hereof, and will continue to be satisfied
on and as of the date of the conversion/continuation requested hereby, before
and after giving effect thereto[, and, with respect to the conversion or
continuance of any Fixed Rate Loan, after giving effect to such conversion or
continuance,(i) no more than eighteen (18) borrowings of, conversions to
or continuances of Fixed Rate Loans have been made this calendar year and (ii) the
aggregate principal amount of each Fixed Rate Loan is at least $200,000 or a
higher integral multiple of $100,000].


 


The Company has caused
this Notice of Conversion/Continuation to be executed and delivered by its officer
thereunto duly authorized on            ,        .


 


	
   

  	
  WINMARK CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title: