Document:

Exhibit 4.7

JAMES W. HOOD

STOCK AWARD AGREEMENT

THIS AGREEMENT is made effective May 3, 2007, by and between
New World Restaurant Group, Inc., a Delaware corporation (together with its
Affiliated Corporations, except where the context otherwise requires, the “Company”), and James W. Hood (“Executive”).

A.            On May 3, 2007, the Company offered to Executive, and
Executive accepted,  employment as the Chief
Marketing Officer of the Company.

B.            As an inducement for Executive to accept employment with
the Company, the Company agreed, among other things, to award 22,000 shares of
Company common stock, par value $0.001 per share (the “Shares”) to Executive subject to the terms
and conditions set forth herein.

C.            All capitalized terms in this Agreement shall have the meaning
assigned to them throughout this Agreement, including Section 7(h) hereof.

NOW, THEREFORE, the Company and Executive hereby agree
as follows:

1.             AWARD OF SHARES

a.             Award.  On the terms and subject to the
conditions set forth in this Agreement, the Company hereby awards to Executive
effective May 3, 2007 (the “Award Date”),
and Executive accepts from the Company, a total award of 22,000 Shares,
comprised of 7,333 Bonus Shares and 14,667 Restricted Shares, as described in
Section 2 hereof.

b.             Stockholder
Rights.  Unless and until such
Shares are forfeited as hereinafter provided, Executive shall have all of the
rights of a stockholder (including voting, dividend and liquidation rights)
with respect to the Shares, subject, however, to the terms and conditions set
forth in this Agreement.

c.             Compliance
with Law.  No Shares shall be
issued or delivered pursuant to this Agreement unless, in the opinion of
counsel for the Company, there shall have been compliance with all applicable
requirements of Federal and state securities laws, all applicable listing
requirements of the Nasdaq Global Market, if applicable, and all other
requirements of law or of any regulatory bodies having jurisdiction over such
issuance and delivery.

d.             Certificates;
Book Entry.  Notwithstanding
any other provisions of this Agreement to the contrary, the Company may elect
to satisfy any requirement under this Agreement for the delivery of stock
certificates through the use of book-entry.

2.             VESTING; RESTRICTIONS

a.             Vesting.  Executive hereby accepts the Shares when
issued, subject to the terms and conditions set forth in this Agreement.  The Shares shall be issued effective as of the
Award 

Date as follows: 
(i) 7,333 Shares shall be issued without Forfeiture Restrictions (“Bonus Shares”); and (ii) the remaining
14,667 Shares shall be issued subject to Forfeiture Restrictions, which shall
lapse as set forth below (“Restricted Shares”).

b.             Forfeiture
Restrictions.  The Restricted Shares
may not be sold, assigned, pledged, exchanged, hypothecated or otherwise
transferred, encumbered or disposed of to the extent then subject to the
Forfeiture Restrictions.  The prohibition
against transfer and the obligation to forfeit and surrender Restricted Shares
to the Company upon termination of continuous employment are herein referred to
as “Forfeiture Restrictions.”  The Forfeiture Restrictions shall be binding
upon and enforceable against any transferee of the Restricted Shares.

c.             Lapse
of Forfeiture Restrictions.  Except
as provided otherwise in this Agreement, subject to Executive’s continuous
employment with the Company from the Award Date through each lapse date set
forth below, the Forfeiture Restrictions shall lapse as to the Restricted Shares
in accordance with the following schedule:    

	
  Number of Shares

  	
   

  	
  Forfeiture Restrictions —

  Lapse Date

  	
   

  
	
  7,333

  	
   

  	
  May 3, 2008

  	
   

  
	
  7,334

  	
   

  	
  May 3, 2009

  	
   

  

 

Upon the voluntary or
involuntary termination of Executive’s continuous employment with the Company, including
on account of death or Disability, any Restricted Shares held by Executive to
which the Forfeiture Restrictions have not lapsed, shall immediately be
forfeited.  Upon forfeiture of the
Restricted Shares, Executive shall have no further rights with respect to such Shares,
including but not limited to voting, dividend and liquidation rights.

d.             Enforcement
of Restrictions.  All
certificates representing Shares shall include restrictive legends regarding
applicable Forfeiture Restrictions, restrictions on transfer and compliance
with securities law requirements, as determined by the Committee.

e.             Adjustments;
Recapitalization.  If the
Company shall at any time increase or decrease the number of its outstanding
Shares or change in any way the rights and privileges of such Shares by means
of the payment of a stock dividend or any distribution upon such Shares payable
in stock, or through a stock split, subdivision, consolidation, combination,
reclassification or recapitalization involving the Shares, then in relation to
the Shares that are affected by one or more of the above events, any new,
substituted or additional securities or other property which by reason of such
transaction are distributed with respect to any Restricted Shares or into which
such Restricted Shares thereby became convertible shall immediately be subject
to the Forfeiture Restrictions, but only to the extent the Restricted Shares
are at the time covered by such Forfeiture Restrictions.  Any adjustments or determinations made by the
Committee shall be final and binding upon all persons.

3.             CORPORATE TRANSACTION

a.             Committee
Action.  Upon the occurrence
of a Corporate Transaction, as defined in Section 3(c) hereof, the Committee
shall take any one or more of the following actions with respect to outstanding
Restricted Shares:

i.                                          Provide
that the Forfeiture Restrictions with respect to all or a portion of the
Restricted Shares shall lapse upon consummation of the Corporate Transaction;

ii.                                       Provide
that all or a portion of any Restricted Shares held upon the consummation of the
Corporate Transaction shall be forfeited at the time of the closing;

iii.                                    Provide
for the assumption or substitution of all or a portion of any Restricted Shares
held upon consummation of the Corporate Transaction; or

iv.                                   Make
any other provision for outstanding Restricted Shares as the Committee deems
appropriate.

b.             Assumption
or Substitution of Restricted Shares.  The Company, or the successor or purchaser, as the case may
be, may make adequate provision for the assumption of the outstanding Restricted
Shares or the substitution of new restricted shares for the outstanding Restricted
Shares on terms comparable to the outstanding Restricted Shares.

c.             Corporate
Transaction.  A Corporate
Transaction shall include the following:

i.                                          Merger; Reorganization.  The merger or consolidation of the Company
with or into another corporation or other reorganization (other than a
reorganization under the United States Bankruptcy Code) of the Company (other
than a consolidation, merger, or reorganization in which the Company is the
continuing corporation and which does not result in any reclassification or
change of outstanding Shares); or

ii.                                       Sale. 
The sale or conveyance of the property of the Company as an entirety or
substantially as an entirety (other than a sale or conveyance in which the
Company continues as a holding company of an entity or entities that conduct
the business or businesses formerly conducted by the Company); or

iii.                                    Liquidation.  The dissolution or liquidation of the Company;
or

iv.                                   Change of Control. 
The consummation of a “Change of Control” transaction or
event as defined in Section 3(d) hereof; or

v.                                      Other Transactions.  Any other transaction that the board of
directors of the Company determines by resolution to be a Corporate
Transaction.

d.             Change of Control. 
A “Change of Control”
means any transaction or event occurring on or after the date of this Agreement
as a direct or indirect result of which (i) any Person or any group in the
aggregate equity interests (other than Greenlight Capital, L.L.C. and its
affiliates) shall (1) beneficially own (directly or indirectly) equity
interests of the Company having more than 50% of the aggregate voting power of
all equity interests of the Company at the time outstanding or (2) have the
right or power to appoint a majority of the board of directors of the Company;
(ii) during any period of two consecutive years, individuals who at the
beginning of such period constituted the board of directors of the Company
(together with any new directors whose election by such board of directors or
whose nomination for election by the shareholders of the Company was approved
by a vote of a majority of the directors of the Company then still in office
who were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute at least a majority of the board of directors of the Company then in
office; or (iii) any event or circumstance constituting a “change of control”
under any documentation evidencing or governing any indebtedness of the Company
in a principal amount in excess of $10.0 million shall occur which results in
an obligation of the Company to prepay (by acceleration or otherwise purchase,
offer to purchase, redeem or defease) all or a portion of such indebtedness.

The terms “beneficially own”, “beneficial owner” and “Group”
shall have the meanings ascribed to such terms in Sections 13(d) and 14(d) of
the Exchange Act; provided, however, that, for the purposes of this definition
of “Change of Control” only, any Person or Group other than Greenlight Capital,
L.L.C. shall be deemed to be the current beneficial owner of any Shares of
voting stock of the Company, or any interests or participations in, or measured
by the profits of, the Company, that are issuable upon the exercise of any
option, warrant or similar right, or upon the conversion of any convertible
security, in either case owned by such Person or Group without regard to
whether such option, warrant or convertible security is currently exercisable
or convertible or will become convertible or exercisable within 60 days if the
exercise or conversion price thereof at the time of grant was lower than the
fair market value of the underlying security at the time of grant.

4.             EFFECT OF PROHIBITED TRANSFER

If any transfer of Bonus
Shares or Restricted Shares is made or attempted to be made contrary to the
terms of this Agreement, the Company shall have the right to acquire for its
own account, without the payment of any consideration, such Shares from the
owner thereof or his transferee, at any time before or after such prohibited
transfer.  In addition to any other legal
or equitable remedies it may have, the Company may enforce its rights to
specific performance to the extent permitted by law and may exercise such other
equitable remedies then available.  The
Company may refuse for any purpose to recognize any transferee who receives
such Shares contrary to the provisions of this Agreement as a stockholder of
the Company and may retain and/or recover all dividends on such Shares that
were paid or payable subsequent to the date on which the prohibited transfer
was made or attempted.

5.             TAX WITHHOLDING

The Company or any
Affiliate shall have the right to deduct from payments of any kind otherwise
due to Executive, any Federal, state, local or foreign taxes of any kind
required by law 

to be withheld upon the issuance, vesting or payment
of any Shares or dividends.  The Company
may withhold taxes from any payments due to Executive or Executive may deliver
a check to the Company.  Executive may
elect to satisfy the minimum statutory withholding obligations, in whole or in
part, by delivering to the Company unrestricted Shares already owned by
Executive (for at least six months or any other minimum period required by the
Company).  The Shares delivered shall
have an aggregate Fair Market Value not in excess of the minimum statutory
total tax withholding obligations.  The
Fair Market Value of the Shares used to satisfy the withholding obligation
shall be determined by the Company as of the date that the amount of tax to be
withheld is to be determined (the “Tax Date”).  Shares used to satisfy any tax withholding
obligation must be vested and cannot be subject to any repurchase, forfeiture,
or other similar requirements.  Any election
must be made prior to the Tax Date, shall be irrevocable and shall be subject
to any restrictions or limitations that the Committee, in its sole discretion,
deems appropriate.

6.             COMPLIANCE
WITH SECURITIES LAWS

The
Company may require Executive to give written assurances in substance and form
satisfactory to the Company and its counsel to the effect that he is acquiring
the Shares for his own account for investment and not with any present
intention of selling or otherwise distributing the same, and to such other
effects as the Company deems necessary or appropriate in order to comply with
Federal and applicable state securities laws. 
Legends evidencing such restrictions may be placed on any stock certificates
for the Shares.

This
Agreement shall be subject to the requirement that if at any time counsel to
the Company shall determine that the listing, registration or qualification of
the Shares upon any securities exchange or under any state or Federal law, or
the consent or approval of any governmental or regulatory body, is necessary as
a condition of, or in connection with, the issuance of such Shares, the Shares
may not be issued or transferred unless such listing, registration,
qualification, consent or approval shall have been effected or obtained on
conditions acceptable to the Committee. 
Nothing herein shall be deemed to require the Company to apply for or
obtain such listing, registration or qualification.  Any Shares received pursuant to this Agreement
shall be subject to all state and Federal laws and the consent and approval of
any governmental or regulatory bodies, and may not be held, sold, transferred
or otherwise disposed of contrary to any state or Federal law, or without the
consent or approval of all necessary governmental or regulatory bodies.

7.             MISCELLANEOUS

a.             Tax
Treatment; Section 83(b).  Executive may incur tax
liability as a result of the issuance of Bonus Shares, the vesting of
Restricted Shares and the payment of dividends or the disposition of
Shares.  Executive should consult his own
tax adviser for tax advice.

Executive hereby acknowledges that Executive has been
informed that he may file with the Internal Revenue Service, within 30 days of
the Award Date, an irrevocable election pursuant to Section 83(b) of the Code
to be taxed as of the Award Date on the amount by which the Fair Market Value
of the Restricted Shares.  If Executive
chooses to file an election under Section 

83(b) of the Code, Executive hereby agrees to promptly
deliver a copy of any such election to the Chief Financial Officer of the
Company (or his designee).

b.             Notices.  Any notice required or permitted
to be given under this Agreement shall be in writing and shall be given by
first class registered or certified mail, postage prepaid, or by personal
delivery to the appropriate party, addressed:

i.                                          If
to the Company, to Attn: General Counsel, New World Restaurant Group, (prior to
May 23, 2007) 1687 Cole Boulevard, Golden, CO 80401-3316, (after May 23, 2007)
555 Zang Street, Suite 300, Lakewood, CO 
80228, or at such other address as may have been furnished to Executive
in writing by the Company; or

ii.                                       If
to Executive, at the address set forth following his name and signature, below,
or at such other address as may have been furnished to the Company by
Executive.

Any such notice shall be deemed to have been given as
of the second day after deposit in the United States mail, postage prepaid,
properly addressed as set forth above, in the case of mailed notice, or as of
the date delivered in the case of personal delivery.

c.             Governing
Law.  The validity and
construction of this Agreement shall be construed in accordance with and
governed by the laws of the State of Colorado other than any conflicts or
choice of law rule or principle that might otherwise refer construction or
interpretation of this Agreement to the substantive laws of any other
jurisdiction.

d.             Continued
Service.  Neither the award of
Bonus Shares or Restricted Shares nor this Agreement gives Executive the right
to continue employment or other service with the Company or its Affiliates in
any capacity.

e.             Binding
Effect.  This Agreement shall
be binding upon and inure to the benefit of the Company and Executive and their
respective heirs, executors, administrators, legal representatives, successors
and assigns.

f.              Construction;
Severability.  The section
headings contained herein are for reference purposes only and shall not in any
way affect the meaning or interpretation of this Agreement.  The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement and each other provision of this
Agreement shall be severable and enforceable to the extent permitted by law.

g.             Other
Employee Benefits.  The amount
of any compensation deemed to be received by Executive as a result of this
Agreement and the issuances of Shares hereunder, shall not constitute “earnings”
or “compensation” with respect to which any other employee benefits of
Executive are determined, including without limitation benefits under any
pension, profit sharing, 401(k), bonus, life insurance or salary continuation
plan.

h.             Other
Definitions.  The following
terms when used in this Agreement shall have the meanings set forth below:

“Affiliated
Corporation” means any corporation or other entity that is
affiliated with New World Restaurant Group, Inc. through stock ownership or
otherwise and is designated as an “Affiliated Corporation” by the board of
directors of the Company.

“Board”
means the board of directors of New World Restaurant Group, Inc.

“Code”
means the Internal Revenue Code of 1986, as it may be amended from time to
time.

“Committee”
means the Compensation Committee of the Company.  If applicable, the Committee shall be
constituted at all times as to permit the Shares issued pursuant to the
Agreement to comply with Rule 16b-3 or any successor rule promulgated under the
Securities Exchange Act of 1934, as amended from time to time, or if no
committee has been appointed, the Board.

“Disability”
means permanent and total disability within the meaning of Section 22(e)(3) of
the Code.

“Securities Act”
means the U.S. Securities Act of 1933, as amended from time to time.

8.             INTERPRETATION; ADMINISTRATION

The Committee shall have the full power and authority
to administer the terms and conditions of this Agreement, to adopt any
procedures, make any determinations, correct any defect, supply any omission or
reconcile any inconsistency with respect to the terms and conditions of this
Agreement in the manner and to the extent it shall deem expedient and it shall
be the sole and final judge of such expediency. 
No member of the Committee shall be liable for any action or determination
made in good faith.  The determinations,
interpretations and other actions of the Committee with respect to this
Agreement and the Shares shall be binding and conclusive for all purposes and
on all persons.

9.             AMENDMENT

The terms and conditions
set forth in this Agreement may only be amended by the written consent of the
Company and Executive.

[SIGNATURE PAGE
FOLLOWS]

IN WITNESS WHEREOF, the
parties have executed this Agreement in one or more counterparts on the dates
set forth below.

	
  

  	
  NEW WORLD RESTAURANT GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul J.B. Murphy, III

  
	
   

  	
   

  	
  Paul J.B. Murphy, III

  
	
   

  	
   

  	
  President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  May 3, 2007

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ James W. Hood

  
	
   

  	
  James W. Hood

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  May 3, 2007

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:Exhibit 10.1

EXECUTION COPY

U.S. $1,500,000,000

FIVE YEAR CREDIT AGREEMENT

Dated as of April 30, 2007

Among

3M COMPANY,

as Borrower,

CITIBANK, N.A. ,

as Administrative Agent,

JPMORGAN CHASE BANK, N.A.,

as Syndication Agent,

WELLS FARGO BANK, NATIONAL ASSOCIATION

and

ABN AMRO BANK N.V.,

as Co-Documentation Agents,

and

THE BANKS NAMED HEREIN,

as Banks

CITICORP GLOBAL MARKETS INC.

and

J.P. MORGAN SECURITIES INC.,

as Joint Lead Arrangers and Joint Bookrunners

Table of Contents

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
  1.

  	
  DEFINITIONS

  	
   

  	
  1

  
	
   

  	
  1.1

  	
  Generally.

  	
   

  	
  1

  
	
   

  	
  1.2

  	
  Times.

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  LINE OF CREDIT

  	
   

  	
  10

  
	
   

  	
  2.1

  	
  Revolving Advances.

  	
   

  	
  10

  
	
   

  	
  2.2

  	
  Swingline Advances.

  	
   

  	
  10

  
	
   

  	
  2.3

  	
  Bid Borrowings.

  	
   

  	
  13

  
	
   

  	
  2.4

  	
  Letters of Credit.

  	
   

  	
  15

  
	
   

  	
  2.5

  	
  Conditions Precedent to Each Advance or Letter of
  Credit.

  	
   

  	
  17

  
	
   

  	
  2.6

  	
  Increase of Commitments.

  	
   

  	
  17

  
	
   

  	
  2.7

  	
  Extension of Commitment Termination Date.

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  GUARANTY OF SEASIDE OBLIGATIONS

  	
   

  	
  20

  
	
   

  	
  3.1

  	
  Guaranty.

  	
   

  	
  20

  
	
   

  	
  3.2

  	
  Nature.

  	
   

  	
  20

  
	
   

  	
  3.3

  	
  Waiver of Accommodation Party Defenses.

  	
   

  	
  20

  
	
   

  	
  3.4

  	
  Waiver of Seaside Defenses.

  	
   

  	
  21

  
	
   

  	
  3.5

  	
  Recourse to Seaside.

  	
   

  	
  22

  
	
   

  	
  3.6

  	
  Application of Payments.

  	
   

  	
  22

  
	
   

  	
  3.7

  	
  Continuing Guaranty.

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  FEES AND EXPENSES

  	
   

  	
  22

  
	
   

  	
  4.1

  	
  Facility Fee.

  	
   

  	
  22

  
	
   

  	
  4.2

  	
  Letter of Credit Fees.

  	
   

  	
  23

  
	
   

  	
  4.3

  	
  Expenses.

  	
   

  	
  23

  
	
   

  	
  4.4

  	
  Additional Fees.

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  INTEREST

  	
   

  	
  23

  
	
   

  	
  5.1

  	
  Floating Rate.

  	
   

  	
  23

  
	
   

  	
  5.2

  	
  LIBO Rate.

  	
   

  	
  23

  
	
   

  	
  5.3

  	
  Default Rate.

  	
   

  	
  24

  
	
   

  	
  5.4

  	
  Fees on LIBO Rate Advances; Capital Adequacy;
  Indemnity.

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  DISBURSEMENTS AND PAYMENTS

  	
   

  	
  27

  
	
   

  	
  6.1

  	
  Requests for Borrowings.

  	
   

  	
  27

  
	
   

  	
  6.2

  	
  Payments.

  	
   

  	
  28

  
	
   

  	
  6.3

  	
  Prepayments.

  	
   

  	
  29

  
	
   

  	
  6.4

  	
  Termination or Reduction of the Commitments.

  	
   

  	
  30

  
	
   

  	
  6.5

  	
  Taxes.

  	
   

  	
  30

  
	
   

  	
  6.6

  	
  Judgment Currency.

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  CONDITIONS PRECEDENT

  	
   

  	
  32

  

 

 i
 

 

	
  

  	
   

  	
   

  	
   

  
	
  8.

  	
  REPRESENTATIONS AND WARRANTIES

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  COVENANTS

  	
   

  	
  33

  
	
   

  	
  9.1

  	
  Financial Information.

  	
   

  	
  33

  
	
   

  	
  9.2

  	
  Covenants.

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  EVENTS OF DEFAULT AND REMEDIES

  	
   

  	
  36

  
	
   

  	
  10.1

  	
  Default.

  	
   

  	
  36

  
	
   

  	
  10.2

  	
  Remedies.

  	
   

  	
  37

  
	
   

  	
  10.3

  	
  Setoff.

  	
   

  	
  37

  
	
   

  	
  10.4

  	
  Pledge of Special Deposit Account.

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  AGENCY

  	
   

  	
  38

  
	
   

  	
  11.1

  	
  Authorization.

  	
   

  	
  38

  
	
   

  	
  11.2

  	
  Distribution of Payments and Proceeds.

  	
   

  	
  38

  
	
   

  	
  11.3

  	
  Expenses.

  	
   

  	
  39

  
	
   

  	
  11.4

  	
  Payments Received Directly by Banks.

  	
   

  	
  40

  
	
   

  	
  11.5

  	
  Indemnification.

  	
   

  	
  40

  
	
   

  	
  11.6

  	
  Limitations on Agent’s Power.

  	
   

  	
  40

  
	
   

  	
  11.7

  	
  Exculpation of the Agent by the Banks.

  	
   

  	
  41

  
	
   

  	
  11.8

  	
  Agent and Affiliates.

  	
   

  	
  41

  
	
   

  	
  11.9

  	
  Credit Investigation.

  	
   

  	
  41

  
	
   

  	
  11.10

  	
  Resignation.

  	
   

  	
  41

  
	
   

  	
  11.11

  	
  Assignments and Participations.

  	
   

  	
  42

  
	
   

  	
  11.12

  	
  Syndication Agent and Co-Documentation Agents.

  	
   

  	
  44

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
  MISCELLANEOUS

  	
   

  	
  44

  
	
   

  	
  12.1

  	
  365-Day Year.

  	
   

  	
  44

  
	
   

  	
  12.2

  	
  GAAP.

  	
   

  	
  44

  
	
   

  	
  12.3

  	
  No Waiver; Cumulative Remedies.

  	
   

  	
  44

  
	
   

  	
  12.4

  	
  Amendments, Etc.

  	
   

  	
  44

  
	
   

  	
  12.5

  	
  Binding Effect: Assignment.

  	
   

  	
  44

  
	
   

  	
  12.6

  	
  New York Law.

  	
   

  	
  44

  
	
   

  	
  12.7

  	
  Severability of Provisions.

  	
   

  	
  45

  
	
   

  	
  12.8

  	
  Integration.

  	
   

  	
  45

  
	
   

  	
  12.9

  	
  Notice.

  	
   

  	
  45

  
	
   

  	
  12.10

  	
  Indemnification by the Borrower.

  	
   

  	
  46

  
	
   

  	
  12.11

  	
  Customer Identification - USA Patriot Act Notice.

  	
   

  	
  46

  
	
   

  	
  12.12

  	
  Execution in Counterparts.

  	
   

  	
  47

  
	
   

  	
  12.13

  	
  Waiver of Jury Trial.

  	
   

  	
  47

  
	
   

  	
  12.14

  	
  Jurisdiction.

  	
   

  	
  47

  
	
   

  	
  12.15

  	
  Substitution of Currency.

  	
   

  	
  47

  

 

 ii

Five Year Credit Agreement

Dated as of April 30, 2007

3M Company, a Delaware corporation, the Banks, as defined below, and
Citibank, N.A., a national banking association, as Administrative Agent for the
Banks, hereby agree as follows:

1.             DEFINITIONS

1.1          Generally.

“Additional Bank” means a Bank that becomes a party hereto pursuant to
Section 2.6 or 2.7.

“Advance” means a Revolving Advance, a Swingline Advance, or a Bid
Loan.

“Affiliate”, as applied to any Person, means any other Person directly
or indirectly controlling, controlled by, or under common control with, that
Person.  For the purposes of this
definition, “control” (including, with correlative meanings, the terms “controlling”,
“controlled by” and “under common control with”), as applied to any Person,
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of that Person, whether through
the ownership of voting securities or by contract or otherwise.

“Agent” means Citibank, in its capacity as lead arranger and
administrative agent for the Banks hereunder.

“Agent’s Account” means (a) in the case of Advances denominated in
Dollars, the account of the Agent maintained by the Agent at Citibank at its
office at 388 Greenwich Street, New York, New York 10013, Account
No. 36852248, Attention:  Bank Loan
Syndications, (b) in the case of Advances denominated in any Committed
Currency, the account of the Agent designated in writing from time to time by
the Agent to the Borrower and the Banks for such purpose and (c) in any
such case, such other account of the Agent as is designated in writing from
time to time by the Agent to the Borrower and the Banks for such purpose.

“Aggregate Commitment Amount” means the sum of each Bank’s Commitment.

“Aggregate Outstandings” means, at any time, an amount equal to the sum
of  (i) the aggregate principal
balance of the Revolving Advances then outstanding, (ii) the aggregate
principal amount of the Bid Loans then outstanding, (iii) the aggregate
principal balance of the Swingline Advances then outstanding, and (iv) the L/C
Amount then outstanding.

“Agreement” means this Five Year Credit Agreement.

“Applicable Fee Percentage” means, as of any date, a percentage per
annum determined by reference to the Public Debt Rating in effect on such date
as set forth below:

 

	
  Public Debt Rating

  S&P/Moody’s

  	
   

  	
  Applicable Fee

  Percentage

  
	
  

  Level 1

  AA- / Aa3 or above

  	
   

  	
  0.040%

  
	
  

  Level 2

  Lower than Level 1 but at least A- / A3

  	
   

  	
  0.060%

  
	
  

  Level 3

  Lower than Level 2

  	
   

  	
  0.080%

  

“Applicable Margin” means,
as of any date, a percentage per annum equal to the sum of (i) the
Utilization Fee, if any, as of such date, plus (ii) the percentage
determined by reference to the Public Debt Rating in effect on such date as set
forth below:

	
  Public Debt Rating

  S&P/Moody’s

  	
   

  	
  Applicable Margin for

  Floating Rate Advances

  	
   

  	
  Applicable Margin for

  LIBO Rate Advances

  
	
  

  Level 1

  AA- / Aa3 or above

  	
   

  	
  0.00%

  	
   

  	
  0.110%

  
	
  

  Level 2

  Lower than Level 1 but at least A- / A3

  	
   

  	
  0.00%

  	
   

  	
  0.190%

  
	
  

  Level 3

  Lower than Level 2

  	
   

  	
  0.00%

  	
   

  	
  0.270%

  

“Assignment Certificate”
means a certificate, acceptable to the Agent in form and substance, assigning a
Bank’s rights and obligations under this Agreement or a related document
pursuant to Section 11.11.

“Banks” means Citibank, acting on its own behalf and not as Agent; and
each other Person (other than the Borrower) that is a party hereto or hereafter
becomes a party hereto pursuant to the procedures set forth in Sections 2.6,
2.7 or 11.11.

“Base Rate” means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to the higher of
(i) the rate of interest publicly announced by Citibank, N.A. in New York,
New York from time to time as its “base” rate of interest or (ii) the
Federal Funds Rate plus one-half of one percent (.50%).

“Bid Borrowing” means a borrowing under Section 2.3 consisting of Bid
Loans made to the Borrower at the same time by one or more Banks.  All Bid Loans made pursuant to a single Bid
Borrowing Request shall constitute a single Bid Borrowing even if such Bid
Borrowing Request requested Bid Loan Quotes covering multiple Interest Periods.

“Bid Borrowing Request” has the meaning specified in Section 2.3(a).

“Bid Loan” means a loan by a Bank pursuant to Section 2.3.

“Bid Loan Quote” means an offer by a Bank to make a Bid Loan in
accordance with Section 2.3.

 2
 

“Borrower” means 3M Company, a Delaware corporation.

“Borrowing” means a borrowing under Section 2.1 consisting of
simultaneous pro rata Advances to the Borrower by each of the Banks severally.

“Business Day” means a day other than a Saturday, Sunday, United States
national holiday or other day on which banks in New York are permitted or
required by law to close.  Whenever the
context relates to a LIBO Rate, amounts bearing interest at a LIBO Rate, or a
Bid Loan, “Business Day” means a day (i) that meets the foregoing definition,
and (ii) on which dealings are carried on in the London interbank market and
banks are open for business in London and in the country of issue of the
currency of such LIBO Rate Advance (or, in the case of an Advance denominated
in Euro, on which the Trans-European Automated Real-Time Gross Settlement Express
Transfer (TARGET) System is open).

“Citibank” means Citibank, N.A., a national banking association.

“Committed Currencies” means lawful currency
of the United Kingdom of Great Britain and Northern Ireland, Euros and any
other currency that is freely convertible into Dollars and agreed to by all
Banks.

“Commitment” means, with respect to each Bank, (a) the Dollar
amount set forth opposite such Bank’s name on the signature pages hereof or if
such Bank is an Additional Bank or if such Bank has entered into an Assignment
Certificate, the Dollar amount set forth for such Bank in the records
maintained by the Agent, as such amount may be reduced pursuant to
Section 6.4 or increased pursuant to Section 2.6, or (b) the commitment of
that Bank to make Advances hereunder, as the context may require.

“Commitment Termination Date” means April 30, 2012, subject to the
extension thereof pursuant to Section 2.7 or, if earlier, the date on which the
Banks’ Commitments are terminated pursuant to Section 10 or by agreement of the
parties; provided, however, that the Commitment Termination Date
of any Bank that is a Non-Consenting Bank to any requested extension pursuant
to Section 2.7 shall be the Commitment Termination Date in effect immediately
prior to the applicable Extension Date for all purposes of this Agreement.

“Committed Outstandings” means, at any time with respect to any Bank,
an amount equal to the sum of 
(i) the aggregate principal balance of that Bank’s Revolving
Advances then outstanding (based on the Equivalent in Dollars at such time),
(ii) that Bank’s Percentage of the sum of (A) aggregate principal
balance of the Swingline Advances then outstanding, and (B) the L/C Amount then
outstanding.

“Credit Exposure” means, with respect to any Bank (i) at any time
prior to termination of the Commitments in full, such Bank’s Commitment
(whether used or unused), or (ii) thereafter, such Bank’s Committed
Outstandings.

“Default” means an event that, with the giving of notice, the passage
of time or both, would constitute an Event of Default.

“Dollars” and the “$” sign each means lawful currency of
the United States of America.

 3
 

“EBITDA” means, for any period, net income (or net loss) plus
the sum of (a) interest expense, (b) income tax expense,
(c) depreciation expense and (d) amortization expense, in each case
determined in accordance with GAAP for such period.

“EBITDA to Interest Ratio” means, as of the last day of any Fiscal
Quarter, the ratio of (i) consolidated EBITDA of the Borrower and its
subsidiaries for the period of four consecutive Fiscal Quarters then ended to
(ii) interest payable on, and amortization of debt discount in respect of,
all Funded Debt of the Borrower and its subsidiaries during such period of four
Fiscal Quarters.

“Eligible Assignee” means (i) any Bank or any Affiliate of any Bank;
(ii) a commercial bank organized under the laws of the United States or any
state thereof; or (iii) a commercial bank organized under the laws of any other
country which is a member of the Organization for Economic Cooperation and
Development or a political subdivision of such country;  provided that (x) neither any Borrower nor
any Affiliate of any Borrower shall be an Eligible Assignee, (y) any Eligible
Assignee or any corporation controlling such Eligible Assignee must also have
senior unsecured long-term debt ratings which are rated at least A- (or the
equivalent) as publicly announced by S&P or A3 (or the equivalent) as
publicly announced by Moody’s or Fitch, and (z) any Eligible Assignee or any
corporation controlling such Eligible Assignee must have shareholders’ equity
in an amount not less than $3,000,000,000.

“Equivalent” in Dollars of any Committed Currency or in any Committed
Currency of Dollars on any date, means the quoted spot rate appearing at oanda.com/convert/classic or, if such rate is not available, the rate at which the Agent offers, in accordance with
normal banking industry practice, to exchange Dollars or such Committed
Currency for such Committed Currency or Dollars, as the case may be, in New York,
New York prior to 4:00 P.M. (New York time) on such date.

“ERISA” means the Employment Retirement Security Act of 1974, as
amended from time to time, and the regulations and rulings issued thereunder.

“EURIBO Rate” means, for any Interest Period, the rate appearing on
Page 248 of the Moneyline Telerate Service (or on any successor or substitute
page of such Service, or any successor to or substitute for such Service,
providing rate quotations comparable to those currently provided on such page
of such Service, as determined by the Agent from time to time for purposes of
providing quotations of interest rates applicable to deposits in Euro by
reference to the Banking Federation of the European Union Settlement Rates for
deposits in Euro) at approximately 10:00 a.m., London time, two Business Days
prior to the commencement of such Interest Period, as the rate for deposits in
Euro with a maturity comparable to such Interest Period; provided, however,
that if such page is no longer available, the EURIBO Rate shall be determined
by the Agent on the basis of a substantially comparable source of the Agent’s
selection and acceptable to the Banks, for the number of days comprised therein
and in an amount equal or comparable to the amount of the LIBO Rate Advance of the
Agent (in its individual capacity) to be outstanding during such Interest
Period.

 4
 

“Euro” means the lawful currency of the
European Union as constituted by the Treaty of Rome which established the
European Community, as such treaty may be amended from time to time and as
referred to in the EMU legislation.

“Event of Default” means an event specified in Section 10.1.

“Federal Funds Rate” means, for any period, a fluctuating interest rate
per annum 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 that is a Business Day, the average of the quotations for such day on
such transactions received by the Agent from three federal funds brokers of
recognized standing selected by it.

“Fee Letter” means one or more separate agreements between the Borrower
and the Agent, setting forth the terms of certain fees to be paid by the
Borrower to the Agent for the benefit of the Banks and/or for the Agent’s own
behalf, as more fully set forth therein.

“Fiscal Quarter” means any of the four periods, each approximately
three calendar months in length, comprising the Borrower’s fiscal year.

“Fitch” means Fitch, Inc.

“Floating Rate” means, for any period, a fluctuating interest rate per
annum equal for each such day during such period to the sum of the Base Rate
for such day, plus the Applicable Margin for such day.

“Funded Debt” means the sum of (i) all obligations of the Borrower
and its subsidiaries for borrowed money, including but not limited to principal
and interest with respect to all indebtedness hereunder and all other senior or
subordinated debt for borrowed money, (ii) all purchase money obligations
of the Borrower and its subsidiaries, including obligations under any
capitalized lease, (iii) the face amount of all letters of credit issued
for the account of the Borrower and its subsidiaries, including but not limited
to any Letters of Credit (as defined herein), and (iv) all other
interest-bearing obligations of the Borrower and its subsidiaries that are
required to be listed as a liability on a balance sheet under GAAP. All
determinations under this definition shall be made with respect to the Borrower
and its subsidiaries on a consolidated basis.

“GAAP” has the meaning set forth in Section 12.2.

“Interest Period” means (i) with respect to any Bid
Borrowing, a period of not more than 30 days, as elected by the Borrower in the
applicable Bid Borrowing Request, and (ii) for each LIBO Rate Advance
comprising part of the same Borrowing, the period commencing on the date of
such LIBO Rate Advance or the date of the Conversion of any Base Rate Advance
into such LIBO Rate Advance and ending on the last day of the period selected
by the Borrower pursuant to the provisions of Section 5.2 and, thereafter, with
respect to Eurodollar Rate Advances, each subsequent period commencing on the
last day of the immediately preceding Interest Period and ending on the last
day of the period selected by the Borrower pursuant to the provisions of
Section 5.2.  The duration of each such
Interest Period shall be one, two, three or six months, and 

 5
 

subject to clause (c) of this definition, nine months, as the Borrower
may, upon notice received by the Agent not later than 11:00 a.m.
(New York City time) on the third Business Day prior to the first day of
such Interest Period, select; provided, however, that:

(a)          the Borrower may not
select any Interest Period that ends after the Commitment Termination Date
unless, after giving effect to any reduction of the Commitments on such
Commitment Termination Date, the aggregate principal amount of Base Rate
Advances and of LIBO Rate Advances having an Interest Period that end on or
prior to such Commitment Termination Date shall be at least equal to the
aggregate principal amount of Advances due and payable on or prior to such
date;

(b)          Interest Periods
commencing on the same date for LIBO Rate Advances comprising part of the same
Borrowing shall be of the same duration;

(c)          the Borrower shall
not be entitled to select an Interest Period having duration of nine months
unless, by 2:00 P.M. (New York City time) on the third Business Day prior to
the first day of such Interest Period, each Bank notifies the Agent that such
Bank will be providing funding for such Revolving Borrowing with such Interest
Period (the failure of any Bank to so respond by such time being deemed for all
purposes of this Agreement as an objection by such Bank to the requested
duration of such Interest Period); provided that, if any or all of the Banks
object to the requested duration of such Interest Period, the duration of the
Interest Period for such Borrowing shall be one, two, three or six months, as
specified by the Borrower requesting such Revolving Borrowing in the applicable
Notice of Borrowing as the desired alternative to an Interest Period of nine
months;

(d)          whenever the last day
of any Interest Period would otherwise occur on a day other than a Business
Day, the last day of such Interest Period shall be extended to occur on the
next succeeding Business Day, provided, however, that, if such
extension would cause the last day of such Interest Period to occur in the next
following calendar month, the last day of such Interest Period shall occur on
the next preceding Business Day; and

(e)          whenever the first
day of any Interest Period occurs on a day of an initial calendar month for
which there is no numerically corresponding day in the calendar month that
succeeds such initial calendar month by the number of months equal to the
number of months in such Interest Period, such Interest Period shall end on the
last Business Day of such succeeding calendar month.

“Issuing Bank” means Wells Fargo Bank, National Association, or any
other Bank designated by the Borrower that expressly agrees to perform in
accordance with their terms all of the obligations that by the terms of this
Agreement are required to be performed by it as an Issuing Bank that agrees to
be an Issuing Bank hereunder and notified the Agent of its designation as an
Issuing Bank.

“L/C Amount” means the sum of (i) the aggregate face amount of all
issued and outstanding Letters of Credit, plus (ii) Unreimbursed L/C
Obligations.

 6
 

“L/C Sublimit” means $150,000,000.

“Letter of Credit” means (i) the Letters of Credit issued by any
Issuing Bank for the benefit of the Borrower or Seaside and described in
Exhibit F hereto, and (ii) any other Letter of Credit, as defined in
Section 2.4.

“Letter of Credit Fee Percentage” means, as of any date, a percentage
per annum equal to the Applicable Margin then in effect with respect to
Advances bearing interest at a LIBO Rate (whether or not any such Advances are
then outstanding).

“LIBO Base Rate” means, with respect to any Interest Period for each
LIBO Rate Advance comprising part of the same Revolving Borrowing, (a) in the
case of any Revolving Credit Advance denominated in Dollars or any Committed
Currency other than Euro, the rate per annum which appears on Reuters Screen LIBOR01 Page (or
any successor page) as the London interbank offered rate for deposits in
Dollars or the applicable Committed Currency at approximately 11:00 a.m. London
time on the date two Business Days before the commencement of such Interest
Period as the rate at which deposits in immediately available funds are offered
on the London interbank market for a term substantially equivalent to the
applicable Interest Period; provided, however, that if such page is no longer
available, the LIBO Base Rate shall be determined by the Agent on the basis of
a substantially comparable source of the Agent’s selection and acceptable to
the Banks, for the number of days comprised therein and in an amount equal or
comparable to the amount of the LIBO Rate Advance of the Agent (in its
individual capacity) to be outstanding during such Interest Period or (b) in
the case of any LIBO Rate Advance denominated in Euros, the EURIBO Rate.

“LIBO Rate” means the annual rate equal to the sum of (i) the rate
obtained by dividing (a) the applicable LIBO Base Rate, by (b) a
percentage equal to 100% minus the Federal Reserve System requirement
(expressed as a percentage) applicable to such deposits, and (ii) the
Applicable Margin.

“Loan Documents” means this Agreement, the Notes, any Fee Letters, any
Reimbursement Agreements and any other document related hereto, together with
all amendments, modifications and restatements thereof.

“Moody’s” means Moody’s Investors Service, Inc.

“Non-Consenting Bank” has the meaning specified in Section 2.7.

“Notes” means the Revolving Notes and the Swingline Note, collectively.

“Obligations” means, collectively, the Advances, the Borrower’s
obligation to repay Bid Loans, and any Unreimbursed L/C Obligations.

“Payment Office” means, for any Committed Currency, such office of
Citibank as shall be from time to time selected by the Agent and notified by
the Agent to the Borrower and the Banks.

“PBGC” means the Pension Benefit Guaranty Corporation.

 7
 

“Percentage” means, with respect to each Bank, the ratio of
(i) that Bank’s Credit Exposure, to (ii) the aggregate Credit
Exposure of all of the Banks.

“Person” means any individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.

“Public Debt Rating” means, as of any date, the rating that has been
most recently announced by either S&P or Moody’s, as the case may be, for
any class of non-credit enhanced long-term senior unsecured debt issued by the
Borrower.  For purposes of the foregoing,
(a) if only one of S&P and Moody’s shall have in effect a Public Debt
Rating, the Applicable Margin and the Applicable Fee Percentage shall be
determined by reference to the available rating; (b) if neither S&P
nor Moody’s shall have in effect a Public Debt Rating, the Applicable Margin
and the Applicable Fee Percentage will be set in accordance with Level 3
under the definition of “Applicable Margin” or “Applicable Fee Percentage”, as
the case may be; (c) if the ratings established by S&P and Moody’s
shall fall within different but adjacent levels, the Applicable Margin shall be
based upon the higher rating; (d) if the ratings established by S&P
and Moody’s shall fall within different levels that are not adjacent, the
Applicable Margin shall be determined by the level immediately above the lower
rating; (e) if any rating established by S&P or Moody’s shall be
changed, such change shall be effective as of the date on which such change is
first announced publicly by the rating agency making such change; and
(f) if S&P or Moody’s shall change the basis on which ratings are
established, each reference to the Public Debt Rating announced by S&P or
Moody’s, as the case may be, shall refer to the then equivalent rating by
S&P or Moody’s, as the case may be.

“Reimbursement Agreement” means any letter of credit application and
reimbursement agreement required by an Issuing Bank as a condition to issuance
of any Letter of Credit.

“Required Banks” means one or more Banks having an aggregate Percentage
of at least fifty-one percent (51%).

“Revolving Advance” means an advance under Section 2.1.

“Revolving Borrowing Minimum” means, in respect of Revolving Advances
denominated in Dollars, $10,000,000, in respect of Revolving Advances
denominated in Sterling, £5,000,000 and, in respect of Revolving Advances
denominated in Euros, €10,000,000.

“Revolving Note” means a note in substantially the form of Exhibit C
hereto with all blanks appropriately completed, together with any modifications
and extensions thereof and any note or notes issues in renewal thereof or
substitution or replacement therefor.

“S&P” means Standard & Poor’s Rating Group, a division of The
McGraw-Hill Companies, Inc.

“Seaside” means Seaside Insurance Limited, a Bermuda corporation.

“Seaside Obligations” means all obligations of Seaside to any Issuing
Bank, the Agent or the Banks arising under or related to any Letter of Credit
or any Reimbursement Agreement, including but not limited to Seaside’s
obligations to reimburse the applicable Issuing Bank for 

 8
 

any amount drawn under any Letter of Credit and to pay interest on any
such amount, Seaside’s obligation to pay fees in connection with any Letter of
Credit, and any indemnification obligations of Seaside relating to any Letter
of Credit, in each case whether such obligation arises under this Agreement or
under a Reimbursement Agreement, and including but not limited to any notes
issued in substitution for all or any portion of such obligations.

“Securitization Entity” means a corporation,
partnership, trust, limited liability company or other entity that is formed
for the purpose of effecting or facilitating a Securitization Transaction and
which engages in no business and incurs no indebtedness or other liabilities
other than those related to or incidental to a Securitization Transaction.

“Securitization Transaction” means a transaction
or series of related transactions pursuant to which a corporation, partnership,
trust, limited liability company or other entity incurs obligations or issues
interests, the proceeds of which are used to finance a discrete pool (which may
be fixed or revolving) of receivables or other financial assets.

“Special Deposit Account” means an account maintained with the Agent in
which funds are deposited pursuant to Section 2.4(f) or Section 10.2(c).

“Swingline Advance” has the meaning set forth in Section 2.2.

“Swingline Bank” means Citibank, in its capacity as the Bank making
Swingline Advances under Section 2.2, and any successor in such capacity.

“Swingline Commitment” means the Swingline Bank’s obligation to make
Swingline Advances pursuant to Section 2.2.

“Swingline Commitment Amount” means, at any time, the lesser of
(i) $50,000,000, or (ii) the excess, if any, of the Aggregate
Commitment Amount over the Aggregate Outstandings at such time.

“Swingline Note” means a promissory note in substantially the form of
Exhibit D, duly executed by the Borrower and payable to the order of the
Swingline Bank in a face principal amount equal to the Swingline Commitment,
together with any note or notes issued in substitution therefor or replacement
thereof and any amendments or modifications thereto.

“Unreimbursed L/C Obligations” means, at any time, the aggregate amount
drawn under Letters of Credit for which the Banks have neither been reimbursed
nor made any Advance.

“Utilization Fee” means, as of any date, a percentage per annum
determined by reference to the Public Debt Rating in effect on such date as set
forth below:

 9
 

 

	
  Public Debt Rating -
  S&P/Moody’s

  	
   

  	
  Utilization Fee

  
	
  

  Level 1

  AA- / Aa3 or above

  	
   

  	
  0.025%

  
	
  

  Level 2

  Lower than Level 1 but at least A- / A3

  	
   

  	
  0.050%

  
	
  

  Level 3

  Lower than Level 2

  	
   

  	
  0.050%

  

provided, however, that if
as of any date of determination the Aggregate Outstandings are less than or
equal to fifty percent (50%) of the Aggregate Commitment Amount, the
Utilization Fee for such date shall be 0%.

1.2          Times

All references to times of day in this Agreement shall be references to
New York, New York time unless otherwise specifically provided.

2.             LINE OF CREDIT

2.1          Revolving
Advances.

Each Bank severally agrees, on the terms and conditions hereinafter set
forth, to make Advances (each, a “Revolving Advance”) to the Borrower from time
to time on any Business Day during the period from the Effective Date until the
Commitment Termination Date applicable to such Bank in accordance with this
Section 2.1; provided, however, that no Bank shall have any
obligation to make any Revolving Advance if, after giving effect to such
Advance, (i) that Bank’s Committed Outstandings (based in respect of any
Revolving Advances to be denominated in a Committed Currency by reference to
the Equivalent thereof in Dollars determined on the date of delivery of the
applicable request for such Revolving Borrowing) would exceed that Bank’s Commitment,
or (ii) the Aggregate Outstandings (based in respect of any Revolving
Credit Advances to be denominated in a Committed Currency by reference to the
Equivalent thereof in Dollars determined on the date of delivery of the
applicable request for such Revolving Borrowing) would exceed the Aggregate
Commitment Amount.  The credit facility
established hereby is revolving; subject to the terms and conditions of this
Agreement, the Borrower may borrow, prepay pursuant to Section 6.3 and reborrow
under this Section 2.1.  The obligations
of the Banks hereunder shall be several, but not joint.  The Borrower’s obligation to repay all
Advances made by each Bank under this Section will be evidenced by the Borrower’s
Revolving Note of even date herewith, payable to the order of that Bank in a
face principal amount equal to that Bank’s Commitment.

2.2          Swingline
Advances.

In order to accommodate the Borrower’s need for short-term revolving
credit, the Swingline Bank agrees to make advances on the terms and subject to
the conditions set forth in this Section (each a “Swingline Advance”).

 10

(a)                                  Swingline Advances shall be available during
the period from the date of this Agreement through and including the Commitment
Termination Date applicable to the Swingline Bank.  Each Swingline Advance shall be denominated
in Dollars.

(b)                                 The Swingline Bank shall have no obligation
to make any Swingline Advance if, after giving effect to such Swingline
Advance, (i) the aggregate amount of Swingline Advances then outstanding
would exceed the Swingline Commitment Amount, (ii) the Aggregate Outstandings
would exceed the Aggregate Commitment Amount, or (iii) the Aggregate
Outstandings would exceed the commitments of the Banks having a Commitment
Termination Date that is less than ten Business Days after the date of such
Swingline Advance.

(c)                                  Each Swingline Advance shall occur following
written or telephonic request to the Swingline Bank from any person purporting
to be authorized to request Advances on behalf of the Borrower.  Each such notice or request must be received
by the Swingline Bank no later than 1:00 p.m. on the Business Day on which the
Swingline Advance is to occur and shall specify (i) that the Borrower is
requesting a Swingline Advance, and (ii) the amount thereof.  Prior to the close of business on the day it
receives the notice or request, the Swingline Bank shall disburse the Swingline
Advance by crediting the same to the Borrower’s demand deposit account
maintained with the Agent or in such other manner as the Swingline Bank and the
Borrower may from time to time agree in writing.  The Swingline Bank shall have no obligation
to, and shall not, disburse any Swingline Advance if any condition set forth in
Section 2.5 has not been satisfied on the day of the requested Swingline
Advance.  Each Swingline Advance shall be
in the amount of $10,000,000 or more.

(d)                                 Each Swingline Advance shall bear interest at
an annual rate equal to the Floating Rate. 
Interest on the Swingline Advance shall be payable in arrears on the
last day of each March, June, September and December, and on the final
Commitment Termination Date.

(e)                                  The Swingline Advances shall be evidenced by
the Swingline Note.

(f)                                    The Borrower shall repay the principal of the
Swingline Advances in full not less frequently than once every ten Business
Days, and upon such repayment in full, shall not request another Swingline
Advance for at least one full Business Day. 
The Borrower may use the proceeds of an Advance made pursuant to
Section 2.1 to repay any Swingline Advance.

(g)                                 The Swingline Bank may at any time and from
time to time (whether before or after the occurrence of an Event of Default),
by notice to the Agent not later than 1:00 p.m. on any Business Day, request
that the Banks make Revolving Advances in an aggregate principal amount equal
to the then-outstanding principal amount of the Swingline Advances.  Upon receiving such notice and request, and
in any event not later than 2:00 p.m. on the date of the notice and request,
the Agent shall notify each Bank of the amount of the requested Borrowing, that
the 

 11
 

proceeds
of the Borrowing are to be used to repay a Swingline Advance and of the amount
of each Bank’s Advance with respect thereto. 
Unless one of the events described in Section 10.1(j) shall have
occurred, so long as a Bank receives such notice from the Agent prior to 2:00
p.m. on the date the requested Borrowing is to occur, each Bank shall make its
Advance with respect to that Borrowing available to the Agent by wire transfer
of immediately available funds to the Agent not later than 3:00 p.m. on the
same day.  Prior to the close of business
on the same day, the Agent will disburse the Borrowing by crediting the same to
the account of the Swingline Bank.  Any
Advances made by Banks pursuant to this Section 2.2(g) shall initially
bear interest at the Base Rate, but the rate of interest that applies to such
Advances may be converted pursuant to Section 5.2, and such Advances shall
in all other respects be treated in the same manner as Advances made pursuant
to Section 2.1.

(h)                                 The Borrower may prepay any Swingline Advance
on the Business Day it is made or on any subsequent Business Day; provided,
however, that each such partial prepayment shall be in the principal
amount of $10,000,000 or more.

(i)                                     In the event that one of the events of
default described in Section 10.1(j) shall have occurred, the Agent shall
immediately notify the Swingline Bank and the Banks, and, if any Swingline
Advances or interest thereon is outstanding on such day it receives notice,
each Bank will purchase from the Swingline Bank an undivided participation interest
in the Swingline Advance and interest thereon in an amount equal to its
Percentage of such Swingline Advance. 
Upon request, each Bank will promptly transfer to the Swingline Bank, in
immediately available funds, the amount of its participation and upon receipt
thereof the Swingline Bank will deliver to such Bank a loan participation
certificate, dated the date of receipt of such funds and in such amount.  Thereafter, the Swingline Bank shall make no
further Swingline Advances, any payments received directly by the Swingline
Bank with respect to the Swingline Advances shall be treated as excess payments
subject to Section 11.4, and all other payments made by the Borrower shall
be applied in the manner required by Section 11.2.

(j)                                     Each Bank’s obligation to make a Revolving
Advance under paragraph (g) or to purchase a participation in a Swingline
Advance under paragraph (i) shall be absolute and unconditional, and shall not
be affected by any circumstance, including but not limited to (i) any setoff,
counterclaim, recoupment, defense or other right that such Bank or any other
Person may have against the Swingline Bank, (ii) the occurrence or
continuance of a Default or Event of Default or the termination of the
Commitments, (iii) any adverse change in the condition (financial or
otherwise) of the Borrower or any other Person, (iv) any breach of this
Agreement by the Borrower or any other Bank, or (v) any other
circumstance, happening or event whatsoever, whether or not similar to the
foregoing.

(k)                                  Any Swingline Advances that are outstanding
on the Commitment Termination Date shall be paid in full on such date, with all
accrued interest.

 12
 

2.3          Bid
Borrowings.

(a)                                  The Borrower may from time to time deliver to
the Agent a request (a “Bid Borrowing Request”) that the Agent solicit offers
to make Bid Loans denominated in Dollars from the Banks.  Each such request shall be made no later than
10:00 a.m. on the fourth Business Day before the day of the proposed Bid
Borrowing.  Each such request shall state
(i) the day of the proposed Bid Borrowing (which day shall be a Business
Day), (ii) the aggregate amount of the proposed Bid Borrowing, and
(iii) the Interest Period or Interest Periods with respect to such Bid
Borrowing (and, if more than one Interest Period is to be applicable, the
duration of each such Interest Period and the portion of the Bid Borrowing that
will be subject to each such Interest Period). 
Each Bid Borrowing request shall be in an amount equal to an integral
multiple of $10,000,000.  The Borrower
may not request any Bid Borrowing hereunder if (i) the Borrower has made
such a request within the preceding 5 Business Days, (ii) the making of
the proposed Bid Borrowing would cause more than 3 Bid Borrowings to be
outstanding at any one time, (iii) the making of the proposed Bid Borrowing
would cause the aggregate principal amount of Bid Borrowings to exceed
$100,000,000, or (iv) the making of the proposed Bid Borrowing would cause
the Aggregate Outstandings to exceed the Aggregate Commitment Amount.

(b)                                 Promptly following receipt of any Bid
Borrowing Request, the Agent shall notify each Bank of the details thereof by
telecopy.

(c)                                  Each Bank may (but shall have no obligation
to) deliver to the Agent a Bid Loan Quote with respect to any Bid Borrowing Request.  The Agent may reject any Bid Loan Quote
received after 9:00 a.m. on the third Business Day preceding the proposed Bid
Borrowing; provided, however, that no Bid Loan Quote by Citibank, in its
capacity as a Bank, shall be effective if delivered to the Agent after 8:45
a.m. on the third Business Day preceding the proposed Bid Borrowing.  Each Bid Loan Quote shall specify the name of
the offering Bank, the date of the proposed Bid Loan, the principal amount of
the Bid Loan that the offering Bank proposes to make, and the rate of interest
per annum (adjusted to the nearest 1/100th of 1%) to be applicable to the
proposed Bid Loan.  The Agent shall
ignore any Bid Loan Quote that (i) fails to include all of the information
required under this paragraph, (ii) contains qualifying, conditional or
similar language; (iii) proposes terms other than or in addition to those
set forth in the applicable Bid Borrowing Request, or (iv) arrives after
the time required above.

(d)                                 The Agent shall notify the Borrower of the terms
of any Bid Loan Quote submitted by a Bank that meets the requirements set forth
above.  Such notice shall include
(i) the aggregate principal amount of Bid Loans for which Bid Loan Quotes
have been received for each Interest Period specified in the Bid Borrowing
Request, (ii) the respective principal amounts and interest rates so
offered, and (iii) if applicable, limitations on the aggregate principal
amount of Bid Loans for which offers in any single Bid Loan Quote may be
accepted.  Such notification shall be
delivered (x) on the day of receipt, if the Bid Loan Quote is submitted 

 13
 

prior
to the third Business Day preceding the proposed Bid Borrowing, or (y) no
later than 9:30 a.m. on the day of receipt, if the Bid Loan Quote is submitted
on the third Business Day preceding the proposed Bid Borrowing.

(e)                                  Not later than 10:00 a.m. on the third
Business Day preceding any Bid Borrowing, the Borrower shall notify the Agent
in writing or telephonically of its acceptance or rejection of the Bid Loan
Quotes.  If the Borrower fails to notify
the Agent by such time, the Borrower shall be deemed to have rejected each of
the Bid Loan Quotes.  The Borrower’s
acceptance of any Bid Loan Quotes shall specify the aggregate principal amount
of offers for each Interest Period that the Borrower accepts.  The Borrower may accept any Bid Loan Quote in
whole or in part, provided, however, that:

(i)                                        the principal amount of any portion of a Bid
Borrowing subject to any given Interest Period may not exceed the corresponding
portion specified in the related Bid Borrowing Request;

(ii)                                     the principal amount of each Bid Borrowing
(as to all Interest Periods combined) must be equal to an integral multiple of
$10,000,000;

(iii)                                  acceptance of Bid Loan Quotes may only be
made on the basis of ascending interest rates within each Interest Period; and

(iv)                                 the Borrower may not accept any Bid Loan
Quote that fails to comply with the requirements of this Agreement.

(f)                                    If Bid Loan Quotes with the same interest
rates with respect to any given Interest Period are submitted by two or more
Banks in an aggregate amount greater than that necessary to satisfy the
corresponding Bid Borrowing Request, the principal amount of Bid Loans in
respect of which such offers are accepted shall be allocated by the Agent among
such Banks as nearly as possible (in such amounts not less than $1,000,000 as
the Agent may deem appropriate) in proportion to the aggregate principal
amounts of such offers. Absent manifest error, the determination by the Agent
of the amount of the Bid Loans accepted with respect to each Bank shall be
final.

(g)                                 The Agent shall promptly notify each Bank
having submitted a Bid Loan Quote if its offer has been accepted and, if so, of
the amount of the Bid Loan or Bid Loans to be made by it on the date of the
applicable Bid Borrowing.  Each Bank so
notified that its Bid Loan Quote has been accepted shall remit the amount of
its accepted Bid Loan Quote to the Agent in immediately available funds no
later than 2:00 p.m. on the date of such Bid Borrowing.  Prior to the close of business on the day of
the requested Bid Borrowing, the Agent shall disburse such funds by crediting
the same to the Borrower’s demand deposit account maintained with the Agent or
in such other manner as the Agent and the Borrower may from time to time
agree.  The Agent shall have no
obligation (i) to disburse the requested Bid Borrowing if any condition
set forth in Section 2.5 has not been satisfied on 

 14
 

the
day of the requested Bid Borrowing, or (ii) to disburse any portion of a
Bid Borrowing for which the Agent has failed to receive funds from the
applicable Bank by the time specified above.

(h)                                 The Borrower’s obligation to repay each Bid
Loan shall be evidenced by one or more accounts or records maintained by the
Bank making such Bid Loan in the ordinary course of business.

(i)                                     The Borrower and the Banks shall from time
submit to the Agent such information as the Agent may reasonably request
regarding outstanding Bid Loans, including the amounts, interest rates, dates
of Borrowing and maturities thereof, for the purpose of allocating amounts
received from the Borrower with respect thereto.

(j)                                     Nothing hereunder shall obligate any Bank, or
the Banks collectively, to submit any Bid Loan Quotes in response to a Bid
Borrowing Request, nor shall any provision hereunder obligate the Borrower to
accept any one or more Bid Loan Quotes.

2.4          Letters
of Credit.

(a)                                  Generally.  The
Borrower may from time to time on or before the Commitment Termination Date
request that any Issuing Bank issue one or more irrevocable standby letters of
credit denominated in Dollars (each, a “Letter of Credit”) for the account of
the Borrower or Seaside.  The applicable
Issuing Bank shall give notice of such request to the Agent and each of the
Banks promptly following receipt of such request.  No Letter of Credit shall be issued if (i)(A)
immediately following such issuance, the L/C Amount would exceed the L/C
Sublimit, or (B) if, after the issuance of such Letter of Credit, the
Aggregate Outstandings would exceed the Aggregate Commitment Amount of Banks
having a Commitment Termination Date later than the expiration date of such
Letter of Credit or (ii) such Issuing Bank has received written notice from any Bank, the Agent or
the Borrower, at least one Business Day prior to the requested date of issuance
or amendment of the applicable Letter of Credit, that one or more applicable conditions contained in Section 2.5 shall not be satisfied..  Each Letter of Credit shall be used for the
general corporate purposes of the Borrower or Seaside.

(b)                                 Application.  At
least five days prior to the issuance of each Letter of Credit, the Borrower or
Seaside, as the case may be, shall execute a Reimbursement Agreement in the
applicable Issuing Bank’s standard form or in such other form as such Issuing
Bank may reasonably require.

(c)                                  Form.  Each
Letter of Credit shall be issued in a form acceptable to the applicable Issuing
Bank.  Each Letter of Credit shall be
denominated in U.S. dollars.  No Letter
of Credit shall have an initial or any renewal term of more than one year or 

 15
 

a
term (including renewals thereof) ending later than the 15th day preceding the
final Commitment Termination Date.

(d)                                 Payment of Drafts.  The
Borrower shall pay the amount of each draft drawn under any Letter of Credit to
the applicable Issuing Bank on demand, together with interest at the Floating
Rate from the date that such draft is paid by such Issuing Bank until payment
of such amount in full.  Each Issuing Bank
may (at its option) charge any deposit account maintained by the Borrower with
such Issuing Bank for the amount of any draft drawn under a Letter of Credit
issued by such Issuing Bank.

(e)                                  Reimbursement by Banks.  Each
Bank shall be deemed to hold a participation interest in each Letter of Credit
equal to that Bank’s Percentage of the face amount of that Letter of
Credit.  If any Issuing Bank makes any
payment pursuant to the terms of any Letter of Credit and is not promptly
reimbursed, such Issuing Bank may request that each other Bank pay such Bank’s
Percentage of the unreimbursed amount. 
Each Bank acknowledges and agrees that its obligation to purchase
participations pursuant to this paragraph in respect of Letters of Credit is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including any amendment, renewal or extension of any Letter of
Credit or the occurrence and continuance of a Default or Event of Default or
reduction or termination of the Commitments, and that each such payment shall
be made without any offset, abatement, withholding or reduction
whatsoever.  Each Bank further
acknowledges and agrees that its participation in each Letter of Credit will be
automatically adjusted to reflect such Bank’s Percentage of the unreimbursed
amount of such Letter of Credit at each time such Bank’s Commitment is amended
pursuant to a Commitment increase in accordance with Section 2.6, an assignment
in accordance with Section 11.11 or otherwise pursuant to this Agreement.  Upon receipt of any such request prior to 11:00
a.m. on a Business Day, the recipient shall be unconditionally and irrevocably
obligated to pay its Percentage of the unreimbursed amount to the applicable
Issuing Bank in immediately available funds prior to 3:00 p.m. on such date.  Notices received after 11:00 a.m. shall be
deemed to have been received on the following Business Day.  If payment is not made by a Bank when due
hereunder, such Bank shall pay interest on the unpaid amount from the date of
the applicable Issuing Bank’s request through the date of payment at the
Federal Funds Rate.  After making any
payment to an Issuing Bank under this subsection in connection with a
particular Letter of Credit, a Bank shall be entitled to participate to the
extent of its Percentage in the related reimbursements (including interest
thereon) received by such Issuing Bank from the Borrower or otherwise.  Upon receiving any such reimbursement, such
Issuing Bank will distribute to each Bank its Percentage of such reimbursement.  At the option of the applicable Issuing Bank,
payments by the Banks pursuant to this paragraph (e) may be deemed Advances in
accordance with Section 2.1 and payable under the Revolving Notes.

(f)                                    Special Deposit Account. 
Unless otherwise agreed by each of the Banks in writing, the Borrower
shall deposit in the Special Deposit Account, on the 

 16
 

Commitment
Termination Date, an amount equal to the aggregate face amount of all Letters
of Credit then outstanding, less the balance (if any) then outstanding in the
Special Deposit Account.

(g)                                 Letter of Credit Reports.  Each
Issuing Bank shall furnish (1) to the Agent (with a copy to the Borrower)
on the first Business Day of each month a written report summarizing issuance
and expiration dates of Letters of Credit issued by such Issuing Bank during
the preceding month and drawings during such month under all Letters of Credit
and (2) to the Agent (with a copy to the Borrower) on the first Business
Day of each calendar quarter a written report setting forth the average daily
aggregate face amount during the preceding calendar quarter of all Letters of
Credit issued by such Issuing Bank.  The
Agent shall distribute to the Banks copies of the reports received by it
pursuant to this Section.

2.5          Conditions
Precedent to Each Advance or Letter of Credit.

The obligation of each Bank to make any Advance hereunder and of each
Issuing Bank to issue any Letter of Credit hereunder shall be subject to the
satisfaction of the following conditions precedent (and any request for an
Advance or a Letter of Credit shall be deemed a representation and warranty by
the Borrower that each of the following conditions precedent have been
satisfied):

(a)                                  the Borrower has delivered to the Agent and
the Banks each of the items required to be delivered pursuant to Section 7;

(b)                                 the representations and warranties of the
Borrower contained in this Agreement (other than the representations and
warranties listed as “Material Adverse Effect”, “Litigation” and “Environmental
Matters” on Exhibit B) shall be true and correct on the date of such Advance or
such Letter of Credit, as applicable, as though made on and as of such date
(except to the extent that any such representation or warranty is expressly
stated to have been made as of a specific date, then such representation or
warranty shall be true and correct as of such specific date);

(c)                                  no Default or Event of Default exists.

2.6          Increase
of Commitments.

(a)                                  So long as no Event of Default has occurred
and is continuing, the Borrower may from time to time, upon at least 10 days’
written notice to the Agent (who shall promptly provide a copy of such notice
to each Bank), propose to increase the Aggregate Commitment Amount by
increments of $25,000,000, to an amount not to exceed $2,000,000,000 (the
amount of any such increase, the “Additional Commitment Amount”).  Each Bank may, not more than 10 Business Days
following receipt of such notice, elect by written notice to the Borrower and
the Agent to increase its Commitment by a principal amount equal to its
Percentage of the Additional Commitment Amount. 
No Bank (or any successor thereto) shall have any obligation to increase
its Commitment or its other obligations under this Agreement and the other Loan
Documents, and any decision by a Bank to 

 17
 

increase
its Commitment shall be made in its sole discretion independently from any
other Bank.

(b)                                 If any Bank shall not elect to increase its
Commitment pursuant to paragraph (a), the Borrower may designate another bank
or other financial institution (which may be, but need not be, one or more of
the existing Banks) which at the time agrees to, in the case of any such Person
that is an existing Bank, increase its Commitment and in the case of any other
such Person (each such Person, and each Person that shall accept an assignment
as provided in Section 2.7 is an “Additional Bank”), become a party to this
Agreement; provided, however, that any new bank or financial
institution must meet the criteria for an Eligible Assignee and must in all
other respects be acceptable to the Agent and the Swingline Bank, which
acceptance will not be unreasonably withheld or delayed.  The sum of the increases in the Commitments
of the existing Banks pursuant to this paragraph (b) plus the Commitments of
the Additional Banks shall not in the aggregate exceed the unsubscribed amount
of the Additional Commitment Amount.

(c)                                  An increase in the aggregate amount of the
Aggregate Commitment Amount pursuant to this Section 2.6 shall become effective
upon the receipt by the Agent of an agreement in form and substance satisfactory
to the Agent signed by the Borrower, by each Additional Bank and by each other
Bank whose Aggregate Commitment Amount is to be increased, setting forth the
new Commitments of such Banks and setting forth the agreement of each
Additional Bank to become a party to this Agreement and to be bound by all the
terms and provisions hereof, together with a replacement or additional
Revolving Note, as applicable, evidencing the new Commitment of each affected
Bank, duly executed and delivered by the Borrower and such evidence of
appropriate corporate authorization on the part of the Borrower with respect to
the increase in the Commitments and such opinions of counsel for the Borrower
with respect to the increase in the Aggregate Commitment Amount as the Agent may
reasonably request.

(d)                                 Upon the acceptance of any such agreement by
the Agent, the Aggregate Commitment Amount shall automatically be increased by
the amount of the Commitments added through such agreement.

(e)                                  Upon any increase in the aggregate amount of
the Commitments pursuant to this Section 2.6 that is not pro rata among all
Banks, (x) within five (5) Business Days, in the case of any Revolving Loans
bearing interest at the Floating Rate, and at the end of the then current
Interest Period with respect thereto, in the case of any Revolving Loans
bearing interest at a LIBO Rate, the Borrower shall prepay such Advances in
their entirety and, to the extent the Borrower elects to do so and subject to
the conditions specified in Section 2.5, the Borrower shall reborrow Revolving
Advances from the Banks in proportion to their respective Commitments after
giving effect to such increase, until such time as all outstanding Revolving
Advances are held by the Banks in such proportion and (y) 

 18
 

effective
upon such increase, the amount of the participations held by each Bank in each
Letter of Credit then outstanding shall be adjusted such that, after giving
effect to such adjustments, the Banks shall hold participations in each such
Letter of Credit in the proportion its respective Commitment bears to the
Aggregate Commitment Amount after giving effect to such increase.

2.7          Extension
of Commitment Termination Date.

(a)                                  So long as no Event of Default has occurred
and is continuing, the Borrower may, upon at least 45 days and not more than 90
days prior to the first and/or second anniversary of the date hereof, by
written notice to the Agent (who shall promptly provide a copy of such notice
to each Bank), propose to extend the Commitment Termination Date by one year.  Each Bank may, not more than 30 days nor less
than 20 days prior to such anniversary date, elect by written notice to the
Borrower and the Agent to extend its Commitment Termination Date by a period of
one year.  The Agent will notify the
Borrower, in writing of the Banks’ decisions no later than 15 days prior to
such anniversary date.  No Bank (or any
successor thereto) shall have any obligation to extend its Commitment
Termination Date, and any decision by a Bank to increase its Commitment
Termination Date shall be made in its sole discretion independently from any
other Bank.  Any Bank that does not
respond to a request to extend the Commitment Termination Date shall be deemed
to be a Non-Consenting Lender.

(b)                                 If any Bank shall not elect to extend its Commitment
Termination Date pursuant to paragraph (a) (each such Bank being a “Non-Consenting
Bank”), the Borrower may designate another bank or other financial institution
(which may be, but need not be, one or more of the existing Banks) which at the
time agrees to accept an assignment of the Commitment of the Non-Consenting
Bank in accordance with Section 11.11; provided, however, that
(i) any Additional Bank must meet the criteria for an Eligible Assignee and
must in all other respects be acceptable to the Agent and the Swingline Bank,
which acceptance will not be unreasonably withheld or delayed; (ii) the amount
of the Commitment of any such Additional Bank as a result of such substitution
shall in no event be less than $5,000,000 unless the amount of the Commitment
of such Non-Consenting Bank is less than $5,000,000, in which case such
Additional Bank shall assume all of such lesser amount; (iii) any such
Non-Consenting Bank shall have been paid (A) the aggregate principal amount of,
and any interest accrued and unpaid to the effective date of the assignment on,
the outstanding Advances, if any, of such Non-Consenting Bank plus (B)
any accrued but unpaid facility fees owing to such Non-Consenting Bank as of
the effective date of such assignment; (iv) all additional costs
reimbursements, expense reimbursements and indemnities payable to such
Non-Consenting Bank, and all other accrued and unpaid amounts owing to such
Non-Consenting Bank hereunder, as of the effective date of such assignment
shall have been paid to such Non-Consenting Bank; and (v) with respect to any
such Additional Bank, the applicable processing and recordation fee required
under Section 11.11 for such assignment shall have been paid.  To the extent that the Commitment Termination
Date is not 

 19
 

extended
as to any Bank pursuant to this Section 2.7 and the Commitment of such Bank is
not assumed in accordance with this subsection (b), the Commitment of such
Non-Consenting Bank shall automatically terminate in whole on such unextended
Commitment Termination Date without any further notice or other action by the
Borrower, such Bank or any other Person; provided that such
Non-Consenting Bank’s rights under Sections 4.3, 5.4, 6.5 and 12.10, and its
obligations under Section 11.5, shall survive the Commitment Termination Date
for such Bank as to matters occurring prior to such date.

(c)                                  If (after giving effect to any assignments
pursuant to subsection (b) of this Section 2.7) Banks having Commitments equal
to at least 50% of the Commitments in effect immediately prior to the
applicable anniversary date consent in writing to a requested extension
(whether by execution or delivery of an Assignment Certificate or otherwise)
not later than one Business Day prior to such anniversary date, the Agent shall
so notify the Borrower, and the Commitment Termination Date then in effect
shall be extended for the additional one-year period as described in subsection
(a) of this Section 2.7, and all references in this Agreement, and in the Notes
to the “Commitment Termination Date” shall, with respect to each Bank other
than a Non-Consenting Bank for such extension, refer to the Commitment
Termination Date as so extended. 
Promptly following each extension of the Commitment Termination Date, the
Agent shall notify the Banks of the extension of the scheduled Commitment
Termination Date in effect immediately prior thereto.

3.             GUARANTY OF SEASIDE
OBLIGATIONS

3.1          Guaranty.

The Borrower hereby absolutely and unconditionally guarantees to the
Issuing Banks, the Agent and the Banks the full and prompt payment when due,
whether at maturity or earlier by reason of acceleration or otherwise, of the
Seaside Obligations.

3.2          Nature.

No act or thing need occur to establish the liability of the Borrower
under this Section 3, and with the exception of full payment, no act or thing
(including, but not limited to, a discharge in bankruptcy of the Seaside
Obligations, and/or the running of the statute of limitations) relating to the
Seaside Obligations which but for this provision could act as a release of the
liabilities of the Borrower under this Section 3, shall in any way exonerate
the Borrower, or affect, impair, reduce or release the Guaranty established
under this Section 3 and the liability of the Borrower under this Section 3;
and this shall be a continuing, absolute and unconditional guaranty and shall
be in force and be binding upon the Borrower until the Seaside Obligations are
fully paid.

3.3          Waiver
of Accommodation Party Defenses.

The liability of the Borrower under this Section 3 shall not be
affected or impaired in any way by any of the following acts or things (which
the Agent and the Banks are hereby expressly authorized to do, omit or suffer
from time to time without notice to or consent of anyone): (i) any 

 20
 

acceptance of collateral security, guarantors, accommodation parties or
sureties for any or all of the Seaside Obligations; (ii) any extensions or
renewal of any Seaside Obligations (whether or not for longer than the original
period) or any modification of the interest rate, maturity or other terms of
any Seaside Obligations; (iii) any waiver or indulgence granted to
Seaside, and any delay or lack of diligence in the enforcement of any Seaside
Obligations; (iv) any full or partial release of, compromise or settlement
with, or agreement not to sue, Seaside or any other guarantor or other person
liable on any Seaside Obligations; (v) any release, surrender,
cancellation or other discharge of any Seaside Obligations or the acceptance of
any instrument in renewal or substitution for any instrument evidencing any
Seaside Obligations; (vi) any failure to obtain collateral security
(including rights of setoff) for any Seaside Obligations, or to see to the
proper or sufficient creation and perfection thereof, or to establish the priority
thereof, or to preserve, protect, insure, care for, exercise or enforce any
collateral security for any Seaside Obligations; (vii) any modification,
alteration, substitution, exchange, surrender, cancellation, termination,
release or other change, impairment, limitation, loss or discharge of any
collateral security for any Seaside Obligations; (viii) any assignment,
sale, pledge or other transfer of any Seaside Obligations; or (ix) any
manner, order or method of application of any payments or credits on any
Seaside Obligations.  The Borrower waives
any and all defenses and discharges available to a surety, guarantor, or
accommodation co-obligor, dependent on its character as such.

3.4          Waiver
of Seaside Defenses.

The Borrower waives any and all defenses, claims, setoffs and
discharges of Seaside, or any other obligor, pertaining to the Seaside
Obligations, except the defense of discharge by payment in full.  Without limiting the generality of the
foregoing, the Borrower will not assert against the Agent or any Bank any
defense of waiver, release, discharge in bankruptcy, statute of limitations,
res judicata, statute of frauds, anti-deficiency statute, fraud, ultra
vires acts, usury, illegality or unenforceability which may be available to
Seaside in respect of the Seaside Obligations, or any setoff available against
the Agent or any Bank to Seaside, whether or not on account of a related
transaction. The liability of the Borrower shall not be affected or impaired by
any voluntary or involuntary liquidation, dissolution, sale or other
disposition of all or substantially all the assets, marshaling of assets and
liabilities, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of, or
other similar event or proceeding affecting, Seaside or any of Seaside’s
assets.  The Borrower will not assert
against the Agent or any Bank any claim, defense or setoff available to the
Borrower against Seaside.  The Borrower
also hereby waives: (i) presentment, demand for payment, notice of
dishonor or nonpayment, and protest of the Seaside Obligations;
(ii) notice of the acceptance hereof by the Agent or any Bank and of the
creation and existence of all Seaside Obligations; and (iii) notice of any
amendment to or modification of any of the terms and provisions of the Seaside
Obligations, the Credit Agreement or any other agreement evidencing or securing
any Seaside Obligations.  The Agent and
the Banks shall not be required to first resort for payment of the Seaside
Obligations to Seaside or any other persons or corporations, their properties
or estates, or to any collateral, property, liens or other rights or remedies
whatsoever.

 21

3.5          Recourse
to Seaside.

No payment by the Borrower pursuant to any provision hereof shall
entitle the Borrower, by subrogation to the rights of the Agent or any Bank or
otherwise, to any payment by Seaside or out of the property of Seaside until
all of the Seaside Obligations (including interest) and all costs, expenses and
attorneys’ fees paid or incurred by the Agent in endeavoring to collect the
Seaside Obligations and enforcing the Guaranty established under this Section 3
have been fully paid.  The Borrower will
not exercise or enforce any right of contribution, reimbursement, recourse or
subrogation available to the Borrower as to any Seaside Obligations, or against
any person liable therefor, or as to any collateral security therefor, unless
and until all such Seaside Obligations shall have been fully paid and
discharged.

3.6          Application
of Payments.

Whenever, at any time or from time to time, the Borrower shall make any
payment to the Agent under the Guaranty established under this Section 3, the
Borrower shall notify the Agent in writing that such payment is made for such
purpose.  If any payment applied by the
Agent to the Seaside Obligations is thereafter set aside, recovered, rescinded
or required to be returned for any reason (including, without limitation, the
bankruptcy, insolvency or reorganization of Seaside or any other obligor), the
Seaside Obligations to which such payment was applied shall for the purposes of
this Section 3 be deemed to have continued in existence, notwithstanding such application,
and this Section 3 shall be enforceable as to such Seaside Obligations as fully
as if such application had never been made.

3.7          Continuing
Guaranty.

The Guaranty established under this Section 3 shall constitute a
continuing and irrevocable guaranty, and the Agent and the Banks may continue,
without notice to or consent by the Borrower, to issue Letters of Credit for
the account of Seaside in reliance upon the Guaranty established under this
Section 3 until written notice of revocation of the Guaranty established under
this Section 3 shall have been received by the Agent from the Borrower.  The Agent shall forward any such notice of
revocation to the Banks promptly following receipt thereof by the Agent.  Any such notice of revocation shall not affect
the Guaranty established under this Section 3 in relation to any Seaside
Obligations then existing or created thereafter pursuant to this Agreement, or
any extensions or renewals of any such Seaside Obligations, and as to all such
Seaside Obligations and extensions or renewals thereof, such Guaranty shall
continue effective until the same have been fully paid with interest.

4.             FEES AND EXPENSES

4.1          Facility
Fee.

The Borrower will pay each Bank a facility fee on the aggregate amount
of such Bank’s Commitment from the date of this Agreement through the
Commitment Termination Date applicable to such Bank at a rate per annum equal
to the Applicable Fee Percentage.  Such
fee shall be due and payable quarterly in arrears on the last day of each
March, June, September and December and on the final Commitment Termination
Date.

 22
 

4.2          Letter
of Credit Fees.

(a)                                  Commission.  A fee
shall be due and payable to the Agent for the benefit of the Banks upon
issuance of each Letter of Credit, computed at an annual rate equal to the
Letter of Credit Fee Percentage applied to the face amount of that Letter of
Credit outstanding from time to time, from and including the date of issuance
of that Letter of Credit until the expiration thereof, payable in arrears on
(i) the last day of each March, June, September and December (including,
as applicable, each such day falling before or after the final Commitment
Termination Date), and (ii) the final Commitment Termination Date.

(b)                                 Additional Fees.  An
additional examination fee shall be due and payable to the applicable Issuing
Bank upon any draw under any Letter of Credit. 
In addition, the Borrower shall pay to each Issuing Bank, on demand any
and all of such Issuing Bank’s standard fees in connection with the issuance of
and any drawings under any Letters of Credit, which fees shall be subject to
review and adjustment by such Issuing Bank in its sole discretion at any time
and from time to time.

4.3          Expenses.

The Borrower shall pay (i) all reasonable attorneys’ fees and
out-of-pocket expenses of such attorneys incurred by the Agent in connection
with the preparation, negotiation, execution and amendment of this Agreement
and related documents and (ii) all costs and expenses (including but not
limited to reasonable attorneys’ fees and out-of-pocket expenses) incurred by
the Agent or any of the Banks in connection with the enforcement of this
Agreement and related documents (including but not limited to reasonable
attorneys’ fees and out-of-pocket expenses of the Agent and each Bank, whether
paid to outside counsel or allocated to in-house counsel).

4.4          Additional
Fees.

The Borrower shall pay to the Agent additional fees in the amounts set
forth in any Fee Letter strictly pertaining to this Agreement.

5.             INTEREST

5.1          Floating
Rate.

The principal balance of the Revolving Advances shall bear interest at
the Floating Rate unless the Borrower elects a LIBO Rate pursuant to Section
5.2, subject, however, to imposition of the default rate pursuant to Section
5.3.

5.2          LIBO
Rate.

The Borrower may from time to time notify the Agent in writing or by
telephone that a particular portion of the outstanding principal balance of the
Revolving Advances shall bear interest at a LIBO Rate for a particular Interest
Period.  The portion of the outstanding
balance of the Revolving Advances to which a LIBO Rate is applied (i) must
be in an amount not less than the Revolving Borrowing Minimum or a multiple
thereof, and (ii) must not bear, or otherwise be 

 23
 

scheduled to bear, interest at a LIBO Rate at any time during the
applicable Interest Period.  Any LIBO
Rate notification shall be irrevocable, must be made pro rata with respect to
the Revolving Advances of each Bank, and must be received by the Agent before
11:00 a.m. on the day three Business Days before the Business Day which is the
first day of the applicable Interest Period. 
Commencing on the first day of the applicable Interest Period and
continuing through the last day thereof, the portion of the outstanding principal
balance of the Revolving Advances to which the notification related shall bear
interest at the applicable LIBO Rate (and the remaining part of the principal
balance of the Revolving Advances, if any, shall continue to bear interest at
the rate or rates previously applicable to such amounts), subject, however, to
imposition of the default rate pursuant to Section 5.3.  At the termination of such Interest Period,
unless a new LIBO Rate notification is requested and accepted by the Borrower,
the interest rate applicable to the portion of the principal balance of (1) the
Revolving Advances denominated in Dollars to which the LIBO Rate was applicable
shall revert to the Floating Rate and (2) the Revolving Advances denominated in
any Committed Currency shall be exchanged for an Equivalent amount of Dollars
and revert to the Floating Rate. 
Notwithstanding anything to the contrary in this Section, the Borrower’s
right to have a portion of the Revolving Advances bear interest at a LIBO Rate
hereunder shall be suspended (i) at any time that there is a Default or an
Event of Default under this Agreement, (ii) during any period in which any
Bank, in its sole discretion, determines that deposits in amounts equal to the
amount for which a LIBO Rate notification has been given and maturing at the
end of the proposed Interest Period are not readily available to that Bank from
major banks in the London interbank market, or (iii) during any period in which
any Bank shall notify the Agent that the introduction of or any change in or in
the interpretation of any law or regulation makes it unlawful, or any
Governmental Authority asserts that it is unlawful, for such Bank to perform
its obligations hereunder or to fund or maintain LIBO Rate Advances hereunder,
in which case (A) for each Revolving Advance denominated in any Committed
Currency, the Borrower shall either (x) prepay such Advances or
(y) exchange such Advances into an Equivalent amount of Dollars and such
Advances shall revert to the Floating Rate and (B) the obligation of the Bank
to make LIBO Rate Advances shall be suspended until the Agent shall notify the
Borrower and the Banks that the circumstances causing such suspension no longer
exist.  Absent manifest error, the
records of the Agent shall be conclusive evidence as to the amount of the
Revolving Advances bearing interest at a LIBO Rate, the applicable LIBO Rate
and the date on which the Interest Period applicable to such LIBO Rate
expires.  LIBO Rate Advances may not be
outstanding as more than six separate Interest Periods.

5.3          Default
Rate.

Upon the occurrence of an Event of Default, and so long as such Event
of Default continues without written waiver thereof by the Agent and the
Required Banks, in the sole discretion of the Required Banks and without
waiving any of their other rights and remedies, the outstanding principal
balance of the Advances and Unreimbursed L/C Obligations shall bear interest at
an annual rate which shall be equal to two percent (2.00%) over the annual rate
or rates that would otherwise be in effect with respect to such Advances or
Unreimbursed L/C Obligations had there been no occurrence of such Event of
Default.

 24
 

5.4          Fees
on LIBO Rate Advances; Capital Adequacy; Indemnity.

In addition to any interest payable on Advances made hereunder and any
fees or other amounts payable hereunder, the Borrower agrees:

(a)                                  LIBO Rate Advances.  If at
any time any applicable law, rule or regulation or the interpretation or
administration thereof by any governmental authority (including, without
limitation, Regulation D of the Federal Reserve Board):

(i)                                     shall subject any Bank to any tax, duty or
other charges (including but not limited to any tax designed to discourage the
purchase or acquisition of foreign securities or debt instruments by United
States nationals) with respect to this Agreement, or shall materially change
the basis of taxation of payments to any Bank of the principal of or interest
on any portion of the principal balance of any Advances bearing interest at a
LIBO Rate (except for the imposition of or changes in respect of the rate of
tax on the overall net income of that Bank); or

(ii)                                  shall impose or deem applicable or increase
any reserve, special deposit or similar requirement against assets of, deposits
with or for the account of, or credit extended by any Bank because of any
portion of the principal balance of any Advances bearing interest at a LIBO
Rate and the result of any of the foregoing would be to increase the cost to
that Bank of making or maintaining any such portion or to reduce any sum
received or receivable by that Bank with respect to such portion;

then, within 30 days after
demand by that Bank the Borrower shall pay that Bank such additional amount or
amounts as will compensate that Bank for such increased cost or reduction.  A certificate in reasonable detail of any
Bank setting forth the basis for the determination of such additional amount or
amounts shall, absent obvious error, be conclusive evidence of such amount or
amounts.  The Agent shall endeavor to
notify the Borrower of any change in applicable laws, rules, regulations,
interpretations or administrative practices that may give rise to liability
under this Section, but the Agent shall have no liability to the Borrower for
failure to so notify the Borrower, and the failure to give such notification
shall not be a defense to the Borrower’s obligation to pay any amounts under
this paragraph (a).

(b)                                 Capital Adequacy.  If
any Bank determines at any time that its Return has been reduced as a result of
any Capital Adequacy Rule Change, that Bank may require the Borrower to pay it
the amount necessary to restore that Bank’s Return to what it would have been
had there been no Capital Adequacy Rule Change. 
For purposes of this paragraph (b), the following definitions shall
apply:

(i)                                     “Return”, for any calendar quarter or shorter
period, means the percentage determined by dividing (A) the sum of interest and
ongoing fees earned by a Bank under this Agreement during such period by (B)
the average 

 25
 

capital
that Bank is required to maintain during such period as a result of its being a
party to this Agreement, as determined by that Bank based upon its total
capital requirements and a reasonable attribution formula that takes account of
the Capital Adequacy Rules then in effect. Return may be calculated for each
calendar quarter and for the shorter period between the end of a calendar
quarter and the date of termination in whole of this Agreement.

(ii)                                  “Capital Adequacy Rule” means any law, rule,
regulation or guideline regarding capital adequacy that applies to any Bank, or
the interpretation thereof by any governmental or regulatory authority
including, without limitation, any agency of the European Union or similar
monetary or multinational authority. 
Capital Adequacy Rules include rules requiring financial institutions to
maintain total capital in amounts based upon percentages of outstanding loans,
binding loan commitments and letters of credit.

(iii)                               “Capital Adequacy Rule Change” means any
change in any Capital Adequacy Rule occurring after the date of this Agreement,
but does not include any changes in applicable requirements that at the date
hereof are scheduled to take place under the existing Capital Adequacy Rules or
any increases in the capital that any Bank is required to maintain to the
extent that the increases are required due to a regulatory authority’s
assessment of that Bank’s financial condition.

(iv)                              “Bank” includes (but is not limited to) the
Agent, the Banks, as defined elsewhere in this Agreement, any assignee of any
interest of any Bank hereunder, any participant in the loans made hereunder and
any holding company of any of the foregoing.

The
initial notice sent by a Bank shall be sent as promptly as practicable after
that Bank learns that its Return has been reduced, shall include a demand for
payment of the amount necessary to restore that Bank’s Return for the quarter
in which the notice is sent, shall state in reasonable detail the cause for the
reduction in that Bank’s Return and that Bank’s calculation of the amount of
such reduction, and shall include that Bank’s representation that it has made
similar demand on one or more other commercial borrowers with revolving or term
loans in excess of $500,000. Thereafter, that Bank may send a new notice during
each calendar quarter setting forth the calculation of the reduced Return for
that quarter and including a demand for payment of the amount necessary to
restore that Bank’s Return for that quarter. 
A Bank’s calculation in any such notice shall be conclusive and binding
absent demonstrable error.

(c)                                  Funding Exceptions.  The
Borrower shall also compensate any Bank, upon written request by that Bank
(which request shall set forth the basis for requesting such amounts), for all
losses and imputed costs in respect of any interest or other consideration paid
by that Bank to lenders of funds borrowed by it or deposited 

 26
 

with
it to maintain any portion of the principal balance of any Advances at a LIBO
Rate which that Bank sustains (i) on account of any failure of the Borrower to
borrow at a LIBO Rate on a date specified therefor in a notice provided by the
Borrower to the Agent under Section 5.2 of this Agreement or (ii) due to
any payment or prepayment (whether pursuant to Section 6.2, 6.3, 9.2(d) or
10.2) of any Advance bearing interest at a LIBO Rate on a date other than the
last day of the applicable Interest Period for such Advance.  A certificate as to any such loss or cost
(including calculations, in reasonable detail, showing how the applicable Bank
computed such loss or cost) shall be promptly submitted by that Bank to the
Borrower and shall, in the absence of manifest error, be conclusive and binding
as to the amount thereof.  Such loss or
cost may be computed as though the applicable Bank acquired deposits in the
London interbank market to fund that portion of the principal balance whether
or not such Bank actually did so.

6.             DISBURSEMENTS AND
PAYMENTS

6.1          Requests
for Borrowings.

Each Borrowing shall occur on written or telephonic request to the
Agent from a person believed by the Agent to be an officer of or other
authorized representative for the Borrower. 
A request for a Borrowing must be received by the Agent (i) not later
than 11:00 a.m. on the day that such Borrowing is to be made in the case of a
Borrowing that is to bear interest initially at the Floating Rate or (ii) not
later than 11:00 a.m. on the day three Business Days before the Business Day
which is the first day of the applicable Interest Period for such Borrowing in
the case of a Borrowing denominated in Dollars that is to bear interest
initially (in whole or in part) at a LIBO Rate, (y) 4:00 P.M. (London time) on
the day three Business Days before the Business Day which is the first day of
the applicable Interest Period for such Borrowing in the case of a Borrowing
denominated in any Committed Currency. 
Each Revolving Borrowing denominated in any Committed Currency shall
bear interest at a LIBO Rate.  Each
Borrowing must be in an amount not less than the Revolving Borrowing Minimum or
a multiple thereof and shall consist of Revolving Advances in the same currency
made on the same day by the Banks ratably according to their respective
Commitments.  Each such notice of a
Revolving Borrowing shall specify the requested (i) date of such Revolving
Borrowing, (ii) whether the Advances comprising such Revolving Borrowing
are to be LIBO Rate Advances, (iii) aggregate amount of such Revolving
Borrowing, and (iv) in the case of a Revolving Borrowing consisting of
LIBO Rate Advances, initial Interest Period and currency for each such Revolving
Advance.  Upon receipt of any such
request, the Agent shall notify the Banks of the intended Borrowing no later
than 12:00 noon on the date such request for such Borrowing is received by the
Agent.  At or before 2:00 p.m. on the
date the requested Borrowing is to be made, in the case of a Revolving
Borrowing consisting of Revolving Advances denominated in Dollars, and before
11:00 A.M. (London time) on the date of such Revolving Borrowing, in the
case of a Revolving Borrowing consisting of Revolving Advances denominated in
any Committed Currency, each Bank shall remit its Percentage of the requested
Borrowing to the Agent at the applicable Agent’s Account in immediately
available funds.  Prior to the close of
business on the day the requested Borrowing is to be made, the Agent shall
disburse such funds by crediting the same to the Borrower’s demand deposit
account maintained with the Agent or in such other manner as the 

 27
 

Agent and any officer of the Borrower may agree in writing.  Any Borrowing that is to initially bear
interest at a LIBO Rate shall also be subject to all conditions set forth in
Section 5.2 hereof.

Unless the Agent shall have received notice from a Bank prior to the
time of any Borrowing that such Bank will not make available to the Agent such
Bank’s ratable portion of such Borrowing, the Agent may assume that such Bank
has made such portion available to the Agent on the date of such Borrowing in
accordance with this Section 6.1 and the Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding
amount.  If and to the extent that such
Bank shall not have so made such ratable portion available to the Agent, such
Bank and the Borrower severally agree to repay to the Agent forthwith on demand
such corresponding amount together with interest thereon, for each day from the
date such amount is made available to the Borrower until the date such amount
is repaid to the Agent, at (i) in the case of the Borrower, the interest
rate applicable at the time to such Revolving Advances comprising such
Borrowing and (ii) in the case of such Bank, (A) the Federal Funds Rate,
in the case of Advances denominated in Dollars or (B) the cost of funds
incurred by the Agent in respect of such amount in the case of Advances denominated
in Committed Currencies. If such Bank shall repay to the Agent such
corresponding amount, such amount so repaid shall constitute such Bank’s
Revolving Advance as part of such Borrowing for purposes of this Agreement.

6.2          Payments.

(a)                                  Generally.  The
Borrower shall initiate all payments, except with respect to principal of,
interest on, and other amounts relating to, Advances denominated in a Foreign
Currency, of principal, interest, fees and other payments due under the Notes
or this Agreement (including but not limited to all payments due under Section
2.4(d), Section 3 or any Reimbursement Agreement) and all prepayments with
respect to the Notes or this Agreement to the Banks by means of payment made by
the Borrower to the Agent in Dollars not later than 12:00 noon in same day
funds for the account of the Banks.  The
Borrower shall initiate each payment with respect to principal of, interest on,
and other amounts relating to, Advances denominated in a Committed Currency,
not later than 11:00 A.M. (at the Payment Office for such Committed
Currency) on the day when due in such Committed Currency to the Agent, by
deposit of such funds to the applicable Agent’s Account in same day funds.  All such payments shall be made in
immediately available funds.  Any payment
due on a day on which the Agent is not open for substantially all of its
business shall be due on the next day on which the Agent is so open.  Whenever any payment hereunder or under the
Notes shall be stated to be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day, and such extension
of time shall in such case be included in the computation of payment of
interest or fee or commission, as the case may be; provided, however, that, if
such extension would cause payment of interest on or principal of LIBO Rate
Advances to be made in the next following calendar month, such payment shall be
made on the next preceding Business Day. 
Absent obvious error, the records of the Agent will be conclusive evidence
of the principal and accrued interest owing with respect to all Obligations.

 28
 

(b)                                 Revolving Advances: Interest
Payments.  Interest accruing on the Revolving Advances
during any month at the Floating Rate shall be payable quarterly in arrears on
the last day of each March, June, September and December and at maturity.  Interest accruing on the Revolving Advances
at the LIBO Rate shall be payable on the last day of the applicable Interest
Period and at maturity and, if the applicable Interest Period has a duration of
longer than three months, on the day during such Interest Period that is every
three months after the first day of such Interest Period.

(c)                                  Revolving Advances: Principal
Payment. The entire
principal balance of the Revolving Advances owing to each Bank shall be due and
payable in full on the Commitment Termination Date applicable to such Bank.

(d)                                 Swingline Advances. Interest and principal on the Swingline
Advances shall be due and payable as set forth in Section 2.2.

(e)                                  Bid Loans: Interest. Interest accruing on the principal balance
of each Bid Loan shall be due and payable on the last day of the Interest
Period applicable thereto.

(f)                                    Bid Loans: Principal. The principal balance of each Bid Loan shall
be due and payable in full on the last day of the Interest Period applicable
thereto.

To the extent that the Agent receives funds for application to the
amounts owing by the Borrower under or in respect of this Agreement or any Note
in currencies other than the currency or currencies required to enable the
Agent to distribute funds to the Banks in accordance with the terms of this
Section 6.2, the Agent shall be entitled to convert or exchange such funds into
Dollars or into a Committed Currency or from Dollars to a Committed Currency or
from a Committed Currency to Dollars, as the case may be, to the extent
necessary to enable the Agent to distribute such funds in accordance with the
terms of this Section 6.2; provided that the Borrower and each of the Banks
hereby agree that the Agent shall not be liable or responsible for any loss,
cost or expense suffered by the Borrower or such Bank as a result of any
conversion or exchange of currencies effected pursuant to this Section 6.2 or
as a result of the failure of the Agent to effect any such conversion or
exchange, except for such loss, cost or expense due to the Agent’s negligence,
gross negligence or willful misconduct; and provided further that the Borrower
agrees to indemnify the Agent and each Bank, and hold the Agent and each Bank
harmless, for any and all losses, costs and expenses incurred by the Agent or
any Bank for any conversion or exchange of currencies (or the failure to
convert or exchange any currencies) in accordance with this Section 6.2 except
for such losses, costs or expenses due to the Agent’s or Bank’s negligence,
gross negligence or willful misconduct.

6.3          Prepayments.

(a)                                  Optional.  The
Borrower may prepay the Revolving Advances or the Swingline Advances in whole
at any time or from time to time in part, without penalty or premium, provided
that (i) prepayment of any Bank’s Advances must be accompanied by pro rata
prepayment of each other Bank’s Advances, (ii) any partial prepayment must
be in an aggregate amount not less than $10,000,000, (iii) prepayment of
any principal bearing interest at a Base Rate may be made only 

 29
 

on one Business Day’s notice
to the Agent, and (iv) any prepayment of Advances, which at the time of
such prepayment bear interest at a LIBO Rate, shall be (A) made only on
three Business Days’ notice to the Agent, (B) in a principal amount equal to
that portion of the entire Borrowing to which any given LIBO Rate was
applicable, and (C) accompanied by accrued interest on such prepayment
through the date of prepayment and additional compensation calculated in
accordance with Section 5.4(c) hereof. The Borrower may not prepay any Bid Loan
without the consent of the holder thereof.

(b)                                 Mandatory.  If,
on any date, the Agent notifies the Borrower that, on any interest payment
date, the sum of (i) the aggregate principal amount of all Advances denominated
in Dollars then outstanding plus (ii) the Equivalent in Dollars (determined on
the third Business Day prior to such interest payment date) of the aggregate
principal amount of all Advances denominated in Committed Currencies then
outstanding exceeds 105% of the aggregate Commitments of the Banks on such
date, the Borrower shall, as soon as practicable and in any event within two
Business Days after receipt of such notice, subject to the proviso to this
sentence set forth below, prepay the outstanding principal amount of any
Advances owing by the Borrower in an aggregate amount sufficient to reduce such
sum to an amount not to exceed 100% of the aggregate Commitments of the Banks
on such date together with any interest accrued to the date of such prepayment
on the aggregate principal amount of Advances prepaid; provided that if the
aggregate principal amount of Floating Rate Advances outstanding at the time of
such required prepayment is less than the amount of such required prepayment,
the portion of such required prepayment in excess of the aggregate principal
amount of Floating Rate Advances then outstanding shall be deferred until the
earliest to occur of the last day of the Interest Period of the outstanding LIBO
Rate Advances in an amount equal to the excess of such required
prepayment.  The Agent shall give prompt
notice of any prepayment required under this Section 6.3(b) to the Borrower and
the Banks, and shall provide prompt notice to the Borrower of any such notice
of required prepayment received by it from any Bank.

6.4          Termination
or Reduction of the Commitments.

The Borrower may from time to time on at least ten calendar days’ prior
notice received by the Agent (which shall promptly advise each Bank thereof)
terminate the Commitments of the Banks in whole or permanently reduce the
Commitments of the Banks in part, provided that (i) the Commitments of the
Banks may not be terminated in whole at any time that any Advance, Letter of
Credit or Unreimbursed L/C Obligation remains outstanding, (ii) each partial
reduction of the Commitments of the Banks shall be in the minimum amount of
$10,000,000 or in a multiple of $10,000,000 in excess thereof, (iii) each
partial reduction of the Commitments of the Banks shall be pro rata as to all
of the Commitments of the Banks on the basis of the respective Percentages of
the Banks, and (iv) no partial reduction of the Commitments of the Banks shall
reduce the aggregate amount of the Commitments of the Banks to an amount less
than the Aggregate Outstandings.

6.5          Taxes.

(a)                                  All payments made by the Borrower to the
Agent or any Bank (herein any  “Payee”)
under or in connection with this Agreement or the Notes shall be made without
any setoff or other counterclaim, and free and clear of and without 

 30
 

deduction
for or on account of any present or future taxes now or hereafter imposed by
any governmental or other authority, except to the extent that such deduction
or withholding is compelled by law.  As
used herein, the term “Taxes” shall include all income, excise and other taxes
of whatever nature (other than taxes generally assessed on the overall net
income of the Payee by the government or other authority of the country, state
or political subdivision in which such Payee is incorporated or in which the
office through which the Payee is acting is located) as well as all levies,
imposts, duties, charges, or fees of whatever nature.  If the Borrower is compelled by law to make
any such deductions or withholdings it will:

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

(ii)                                  except to the extent that such deduction or
withholding results from a breach by any Payee of the representations contained
in Section 6.5(b), pay such additional amounts (including, without
limitation, any penalties, interest or expenses) as may be necessary in order
that the net amount received by each Payee after such deductions or
withholdings (including any required deduction or withholding on such
additional amounts) shall equal the amount such Payee would have received had
no such deductions or withholdings been made; and

(iii)                               promptly forward to the Agent (for delivery
to such Payee) an official receipt or other documentation satisfactory to the
Agent evidencing such payment to such authorities.

(b)                                 If any Taxes otherwise payable by the
Borrower pursuant to the foregoing paragraph are directly asserted against any
Payee, such Payee may pay such Taxes and the Borrower promptly shall reimburse
such Payee to the full extent otherwise required by such paragraph.  The obligations of the Borrower under this
Section 6.5 shall survive any termination of this Agreement.  Each Bank by its execution of this Agreement
does hereby represent (and each additional Bank by its execution of any
Assignment Certificate pursuant to Section 11.11 shall be deemed to represent)
to each other Bank, the Agent and the Borrower that if such Bank or additional
Bank is organized under the laws of any jurisdiction other than the United
States or any state thereof, such Bank or additional Bank has furnished to the
Agent and the Borrower either U.S. Internal Revenue Service Form W-8BEN, or
U.S. Internal Revenue Service Form W-8ECI, as applicable (wherein such Bank
claims entitlement to complete exemption from U.S. Federal withholding tax on
all interest payments hereunder).

(c)                                  If the Borrower makes an increased tax
payment to a Bank under the foregoing clause (a)(ii) and that Bank determines
in its absolute discretion that (a) a tax credit is attributable to that tax
payment, and (b) that Bank has obtained, utilized and fully retained that tax
credit on an affiliated group basis, then such Bank shall pay an amount to the
Borrower which that Bank determines in its absolute 

 31
 

discretion
will leave it (after that payment) in the same after-tax position as it would
have been in had the payment under clause (a)(ii) not been required to be made
by the Borrower; provided, however, that (i) such Bank shall be the sole judge
of the amount of such tax credit and the date on which it is received, (ii) no
Bank shall be obliged to disclose information regarding its tax affairs or tax
computations, (iii) nothing herein shall interfere with a Bank’s right to
manage its tax affairs in whatever manner it sees fit, and (iv) if such Bank
shall subsequently determine that it has lost the credit of all or a portion of
such tax credit, the Borrower shall promptly remit to such Bank the amount
certified by such Bank to be the amount necessary to restore such Bank to the
position it would have been in if no payment had been made pursuant to this
sentence.

6.6          Judgment
Currency.

If, for the purpose of obtaining judgment in any court, it is necessary
to convert a sum due under this Agreement or the Notes in U.S. dollars or any
alternative currency (the “Specified Currency”) into another currency (the “Judgment
Currency”), the rate of exchange which shall be applied shall be that at which,
in accordance with normal banking procedures, the Agent could purchase the
Specified Currency with the amount of the Judgment Currency on the Business Day
next preceding the day on which such judgment is rendered.  The obligation of the Borrower with respect
to any such sum due from it to the Agent or any Bank (each, an “Entitled Person”)
shall, notwithstanding the rate of exchange actually applied in rendering such
judgment, be discharged only to the extent that on the Business Day following
receipt by such Entitled Person of any sum adjudged to be due under this
Agreement or under the Notes in the Judgment Currency, such Entitled Person
may, in accordance with normal banking procedures, purchase and transfer to the
required location of payment the Specified Currency with the amount of the
Judgment Currency so adjudged to be due; and the Borrower hereby, as a separate
obligation and notwithstanding any such judgment, agrees to indemnify such
Entitled Person against, and to pay such Entitled Person on demand, in the
applicable Specified Currency, any difference between the sum originally due to
such Entitled Person in the Specified Currency and the amount of the Specified
Currency so purchased and transferred on that Business Day.

7.             CONDITIONS
PRECEDENT

On or before the date hereof, the Borrower shall deliver to the Agent
the documents detailed in Exhibit A, properly executed and in form and content
acceptable to the Agent and the Banks. 
For purposes of determining compliance with the conditions of this
Section 7, each Bank shall be deemed to have consented to, approved or accepted
or to be satisfied with each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to the Banks unless
an officer of the Agent responsible for the transactions contemplated by this
Agreement shall have received notice from such Bank prior to the date hereof,
specifying its objection thereto.

8.             REPRESENTATIONS AND
WARRANTIES

To induce the Agent and the Banks to enter into this Agreement, the
Borrower makes the representations and warranties contained in Exhibit B.  Each request for a Borrowing or Letter of 

 32
 

Credit under this Agreement constitutes a reaffirmation of these
representations and warranties (other than the representations and warranties
listed as “Material Adverse Effect”, “Litigation” and “Environmental Matters”
on Exhibit B) as of the date of such Borrowing or Letter of Credit.

9.             COVENANTS.

From the date hereof through the Commitment Termination Date, and
thereafter until the Obligations are paid in full and no Letter of Credit
remains outstanding, unless the Required Banks (or the Agent, with the consent
of the Required Banks) shall otherwise agree in writing, the Borrower shall do
the following:

9.1          Financial
Information

The Borrower shall deliver to the Agent:

(a)                                  Annual Financial Statements. 
Within 100 days of the Borrower’s fiscal year end, the Borrower’s
consolidated annual financial statements. 
The statements must be audited with an unqualified opinion by a
certified public accountant acceptable to the Agent.

(b)                                 Interim Financial Statements. 
Within 60 days of each Fiscal Quarter, the Borrower’s interim financial
statements.  These statements will be
prepared on a consolidated basis and in accordance with GAAP.  These statements will include a statement of
cash flows.

(c)                                  Compliance Certificate. 
Concurrent with the financial statements required above, a compliance
certificate, in the form of Exhibit E, signed by an officer of the Borrower,
attesting to the accuracy of the financial statements, and demonstrating in
form acceptable to the Agent that the Borrower remains in compliance with the
covenants detailed in this Agreement.

(d)                                 Notices. 
Promptly upon becoming aware of the same, written notice of any Default
or Event of Default.

(e)                                  Additional Information.  Upon
request of the Agent or any of the Banks, such other information as it may
reasonably request.

The Borrower shall deliver the statements required under paragraphs (a)
and (b) to the Agent by e-mail containing either the body of such statements or
a hyperlink to the location of such statements on the World Wide Web. Upon the
Agent’s receipt of any of the foregoing from the Borrower, the Agent shall
promptly deliver a copy of the same to each Bank, transmitted in the manner
received by the Agent.

9.2          Covenants

The Borrower shall:

 33

(a)                                  Negative Pledge.  Not
create, incur or suffer to exist any pledge, lien, security interest,
assignment or transfer upon or of any of the Borrower’s accounts receivable or
other rights to payment, whether now existing or hereafter created or existing;
provided, however, nothing in this Section 9.2(a) shall prohibit the
Borrower from (i) assigning or transferring certain of its accounts
receivable in connection with a sale of the part of its business from which
such accounts receivable have arisen, or (ii) transferring not more than
25% of its accounts receivable (with such percentage determined by face amount
of the accounts receivable as of the time immediately before such transfer) to
a Securitization Entity in connection with a Securitization Transaction, so
long as the Borrower receives reasonably equivalent value on account of such
transfer.

(b)                                 Taxes.  Pay,
when due, all taxes, assessments and governmental charges levied or imposed
upon the Borrower; provided, however, the Borrower shall not be required to pay
any such tax, assessment or governmental charge whose amount, applicability or
validity is being contested in good faith by appropriate proceedings and for
which adequate reserves have been established by the Borrower in accordance
with generally accepted accounting principles.

(c)                                  Insurance.  
Cause its properties to be adequately insured against loss or damage and
to carry such other insurance as is usually carried by persons engaged in the
same or similar business.  Such insurance
shall either be maintained by the Borrower through self-insurance through
captive insurance companies or by insurance issued by reputable and solvent
insurance companies.

(d)                                 Merger. 
Refrain from being acquired by any other entity and refrain from
transferring all or substantially all of its assets to, or consolidating,
merging or otherwise combining with, any other entity where the Borrower is not
the surviving entity; provided, however, the Borrower’s failure to comply with
the requirements of this Section 9.2(d) shall not constitute an Event of
Default under Section 10.1(f) of this Agreement, but instead shall give the
Required Banks the right, by written notice to the Borrower, to demand payment
of unpaid principal, accrued interest and all other amounts payable under the
Notes and this Agreement and to terminate the Commitments, with such demand and
termination to be effective thirty calendar days’ following such written notice
from the Required Banks to the Borrower.

(e)                                  Maintenance of Properties.  
Make all repairs, renewals or replacements necessary to keep its plant,
properties and equipment in good working condition; provided, however, that
nothing in this Section 9.2(e) shall prevent the Borrower from discontinuing
the operation or maintenance of such plant, properties or equipment if such
discontinuance is, in the judgment of the Borrower, desirable in the conduct of
its business.

(f)                                    Books and Records.  
Maintain adequate books and records in accordance with generally
accepted accounting principles.

 34
 

(g)                                 Compliance with Laws.  
Comply with all material laws and regulations applicable to its
business.

(h)                                 Preservation of Rights.  
Maintain and preserve its corporate existence and all material rights,
privileges, charters and franchises it now has; provided, however, that the
Borrower shall not be required to preserve any such right, privilege, charter
or franchise if the Board of Directors of the Borrower shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Borrower.

(i)                                     Inspection.  Upon
reasonable notice by the Agent to the Borrower, permit the Agent or any Bank to
visit and inspect the Borrower’s properties and examine its books and records
to the extent the Agent or such Bank determines such inspection and examination
is necessary for the Agent or such Bank to observe and monitor the Borrower’s
financial performance and financial condition and to assure the Borrower’s
compliance with its obligations under this Agreement.

(j)                                     Use of Proceeds.  Use
the proceeds of the Advances solely for the Borrower’s general corporate
purposes; provided, however, the proceeds of the Advances shall not be used by
the Borrower (i) in connection with any acquisition by the Borrower of
other businesses, whether through merger, consolidation, acquisition of assets,
acquisition of stock or other ownership interests or otherwise; or (ii) in
connection with or preparation for any case or proceeding contemplated by
Section 10.1(j) hereof.

(k)                                  Foreign Assets Control. 
Ensure that neither the Borrower nor any subsidiary of the Borrower nor
any Person who owns a controlling interest in or otherwise controls the
Borrower is or shall be listed on (i) the lists of Specially Designated
Nationals and Blocked Persons maintained by the Department of the Treasury’s
Office of Foreign Assets Control, or (ii) the list of persons whose
property or interests in property are blocked or subject to blocking pursuant
to section1 of Executive Order 13224 of September 23, 2001.

(l)                                     Ratio of EBITDA to Interest. 
Maintain its EBITDA to Interest Ratio as of the end of each fiscal
quarter of the Borrower at not less than 3.0 to 1.

These covenants were negotiated by the Banks and the Borrower based on
information provided to the Banks by the Borrower.  A breach of a covenant is an indication that
the risk of the transaction has increased. 
In consideration for any waiver or modification of these covenants, the
Banks may require: collateral or other credit support; higher fees or interest
rates; and/or revised loan documentation or monitoring.  Any covenant waiver or modification will be
made in the sole discretion of the Required Banks.  The foregoing in no way limits the rights of
the Agent and Banks under Section 10 of this Agreement.

 35
 

10.          EVENTS OF DEFAULT AND
REMEDIES.

10.1        Default

As used herein, “Event of Default” means any of the following:

(a)                                  Default in the payment when due of any
principal due with respect to any of the Obligations and the continuance of
such default for one (1) calendar day.

(b)                                 Default in the payment when due of any
interest, fees, costs, expenses or other payments required to be paid by the
Borrower under this Agreement and the continuance of such default for five (5)
calendar days.

(c)                                  Default in the payment of unpaid principal,
interest and other payments under this Agreement following the Borrower’s
receipt of written notice from the Required Banks demanding payment thereof as
permitted in Section 9.2(d) of this Agreement and the passage of thirty
calendar days following such written notice.

(d)                                 Default in the observance or performance of
any covenant or agreement contained in Section 9.2(a) or 9.2(l) of this
Agreement.

(e)                                  Default in the observance or performance of
any covenant or agreement contained in Section 9.1 of this Agreement and
continuance of such default for twenty (20) calendar days.

(f)                                    Default in the observance or performance of
any covenant or agreement contained in this Agreement or related documents
(other than a covenant or agreement a default in whose performance is elsewhere
in this Section 10.1 specifically dealt with) and continuance for more than
thirty (30) calendar days.

(g)                                 Default in the payment of any indebtedness of
the Borrower or Seaside when due or, if payable on demand, on demand, or any
other default by the Borrower or Seaside in any agreement relating to
indebtedness or contingent liabilities that would allow the maturity of such
indebtedness to be accelerated, in each case if the outstanding balance
(including principal, interest, and any other sums) of all such indebtedness or
liabilities in default at any one time exceeds $200,000,000.

(h)                                 Any representation or warranty made by the
Borrower to the Agent or the Banks proves to be untrue in any material respect.

(i)                                     The rendering against the Borrower of any
final judgment, decree or order for the payment of money in excess of
$500,000,000 (excluding any portion of such judgment, decree or order which is
insured by an unrelated third-party insurer which has not objected to or denied
coverage), and the continuance of such judgment, decree or order unsatisfied
and in effect for any period of ninety (90) calendar days without a stay of
execution.

 36
 

(j)                                     With or without the Borrower’s consent, a
custodian, trustee or receiver shall be appointed for the majority of the
properties of the Borrower or Seaside, or a petition shall be filed by or
against the Borrower or Seaside under the United States Bankruptcy Code or any
similar comprehensive bankruptcy or insolvency law, whether domestic or
foreign.

(k)                                  The Borrower shall fail to pay the amount of
any draft drawn under any Letter of Credit to the applicable Issuing Bank on
demand, or shall otherwise fail to perform any of its obligations under Section
2.4(d); or the Borrower or Seaside shall fail to perform any of its or their
obligations under any Reimbursement Agreement.

(l)                                     The Borrower shall repudiate, purport to
revoke, assert the invalidity or unenforceability of, or fail to perform any
obligation under the guaranty set forth in Section 3, or such guaranty shall for
any reason be determined by the Agent in good faith to be invalid or
unenforceable.

10.2        Remedies.

Upon the occurrence of any one or more Events of Default, or at any
time thereafter, the Agent may, with the consent of the Required Banks, and
shall, upon request of the Required Banks:

(a)                                  terminate the Commitments;

(b)                                 declare the unpaid principal, accrued
interest and all other amounts payable under the Notes and this Agreement to be
immediately due and payable;

(c)                                  if any Letter of Credit remains outstanding,
require the Borrower to deposit in the Special Deposit Account immediately
available funds equal to the aggregate face amount of all such outstanding
Letters of Credit; and/or

(d)                                 exercise any or all remedies available to the
Agent or the Banks under the other Loan Documents or otherwise available by law
or agreement.

Notwithstanding the foregoing, upon the occurrence of an Event of
Default under paragraph 10.1(j), the Commitments shall immediately terminate
and the unpaid principal, accrued interest and all other amounts payable under
the Notes and this Agreement will become immediately due and payable, and the
Borrower shall immediately be obligated to deposit in the Special Deposit
Account immediately available funds equal to the then-outstanding L/C Amount.

10.3        Setoff

Each Bank may, upon the occurrence of an Event of Default or at any
time thereafter, without prior notice to the Borrower, set off and apply any
and all deposits held by, and other indebtedness owing by, such Bank to or for
the credit or the account of the Borrower against any and all obligations owing
to such Bank hereunder, whether now or hereafter existing, whether or not the
Agent or such Bank has made demand under this Agreement or any Loan Document
and whether such obligations may be contingent or unmatured.  Such right shall be in addition to and 

 37
 

not in lieu of any other rights and remedies available to the Agent or
the Banks under the other Loan Documents or otherwise available by law or
agreement.  Each Bank will endeavor to
notify the Borrower and the Agent promptly after any such setoff made by such
Bank; provided, however, that the failure to give such notice shall not affect
the validity of such setoff or any application of funds realized by such
setoff. Each Bank shall have the obligations, if any, specified in Section 11.4
with respect to any amounts obtained pursuant to this Section 10.3.

10.4        Pledge
of Special Deposit Account.

The Borrower hereby pledges, and grants the Agent, as agent for the
Banks, including the Issuing Banks, a security interest in, all sums held in
the Special Deposit Account from time to time and all proceeds thereof as
security for the payment of all amounts due and to become due from the Borrower
to the Issuing Banks, the Agent and/or the Banks pursuant to this Agreement,
including but not limited to both principal of and interest on the Advances and
all renewals, extensions and modifications thereof and any notes issued in
substitution therefor, the Borrower’s obligations under Section 3, and the
Borrower’s obligation to reimburse the Agent or any Bank for any amount drawn
under any Letter of Credit, whether such reimbursement obligation arises
directly under this Agreement or under a separate Reimbursement Agreement. The
Agent shall have full ownership and control of the Special Deposit Account, and
the Borrower shall have no right to withdraw the funds maintained in the
Special Deposit Account.

11.          AGENCY

11.1        Authorization.

Each Bank irrevocably appoints and authorizes the Agent to act on behalf
of such Bank to the extent provided herein or in any document or instrument
delivered hereunder or in connection herewith, and to take such other action as
may be reasonably incidental thereto.  As
to any matters not expressly provided for by this Agreement or the other Loan
Documents, the Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall
be fully protected in so acting or refraining from acting) upon the instructions
of the Required Banks, and such instruments shall be binding upon all Banks.

11.2        Distribution
of Payments and Proceeds.

(a)                                  After deduction of any costs of collection as
hereinafter provided in Section 11.3, any fees specified herein or in any
Fee Letter, and any servicing fee provided in any agreement between the Agent
and the applicable Bank, the Agent shall remit to each Bank that Bank’s
Percentage of all payments of principal, interest, fees and other payments that
are received by the Agent under the Loan Documents.  Each Bank’s interest in the Loan Documents
shall be payable solely from payments, collections and proceeds actually
received by the Agent under the Loan Documents; and the Agent’s only liability
to the Banks hereunder shall be to account for each Bank’s Percentage of such
payments, collections and proceeds in accordance with this Agreement.  If the Agent is ever required for any reason
to refund any such payments, collections or proceeds, each Bank will refund to the
Agent, upon demand, its Percentage of such payments, collections or proceeds, 

 38
 

together
with its Percentage of interest or penalties, if any, payable by the Agent in
connection with such refund.  The Agent
may, in its sole discretion, make payment to the Banks in anticipation of
receipt of payment from the Borrower.  If
the Agent fails to receive any such anticipated payment from the Borrower, each
Bank shall promptly refund to the Agent, upon demand, any such payment made to
it in anticipation of payment from the Borrower, together with interest for
each day on such amount until so refunded at a rate equal to (A) the Federal
Funds Rate, in the case of Advances denominated in Dollars or (B) the cost of
funds incurred by the Agent in respect of such amount in the case of Advances
denominated in Committed Currencies, for each such date.

(b)                                 Notwithstanding the foregoing, if any Bank
has wrongfully refused to fund its Percentage of any Borrowing or other advance
as required hereunder, or if the principal balance of any Bank’s Advances is
for any other reason less than its Percentage of the aggregate principal
balances of the Advances, the Agent may remit all payments received by it to
the other Banks until such payments have reduced the aggregate amounts owed by
the Borrower to the extent that the aggregate amount owing to such Bank
hereunder is equal to its Percentage of the aggregate amount owing to all of
the Banks hereunder.  The provisions of
this paragraph are intended only to set forth certain rules for the application
of payments, proceeds and collections in the event that a Bank has breached its
obligations hereunder and shall not be deemed to excuse any Bank from such
obligations.

(c)                                  Notwithstanding the foregoing, payments
designated by the Borrower as pertaining to any Bid Loan shall be paid by the
Agent (after deduction of costs of collection as hereinafter provided) to the
applicable Bank holding such Bid Loan, without regard to such Bank’s
Percentage.

11.3        Expenses.

All payments, collections and proceeds received or effected by the
Agent may be applied, first, to pay or reimburse the Agent for all reasonable
costs, expenses, damages and liabilities at any time incurred by or imposed
upon the Agent in connection with this Agreement or any other Loan Document
(including but not limited to all reasonable attorney’s fees, foreclosure
expenses and advances made to protect the security of any collateral), except
to the extent that the Agent shall have previously received reimbursement of
such costs, expenses, damages or liabilities from the Borrower.  If the Agent does not receive payments,
collections or proceeds sufficient to cover any such costs, expenses, damages
or liabilities within five (5) calendar days after their incurrence or imposition,
each Bank shall, upon demand, remit to the Agent its Percentage of the
difference between (i) such costs, expenses, damages and liabilities, and
(ii) such payments, collections and proceeds; provided, however, that no Bank
shall be liable for any portion of such costs, expenses, damages and
liabilities resulting from the gross negligence or willful misconduct of the
Agent.

 39
 

11.4        Payments
Received Directly by Banks.

If any Bank shall obtain any payment or other recovery (whether
voluntary, involuntary, by application of offset or otherwise) on account of
principal of or interest on any Revolving Advances other than through
distributions made in accordance with Section 11.2, such Bank shall promptly
give notice of such fact to the Agent and shall purchase from the other Banks
such participations in the Revolving Advances as shall be necessary to cause
the purchasing Bank to share the excess payment or other recovery ratably with
each of them; provided, however, that if all or any portion of the excess
payment or other recovery is thereafter recovered from such purchasing Bank,
the purchase shall be rescinded and the purchasing Bank restored to the extent
of such recovery (but without interest thereon).  The Borrower agrees that any Bank so
purchasing a participation from another Bank pursuant to this Section 11.4
may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as
fully as if such Bank were the direct creditor of the Borrower in the amount of
such participation.

11.5        Indemnification.

Each Bank severally (but not jointly) hereby agrees to indemnify and
hold harmless the Agent, as well as the Agent’s agents, employees, officers and
directors, ratably according to the respective Percentages of each of the Banks
from and against any and all losses, liabilities (including liabilities for
penalties), actions, suits, judgments, demands, damages, costs, disbursements,
or expenses (including reasonable attorneys’ fees and expenses) of any kind or
nature whatsoever, which are imposed on, incurred by, or asserted against the
Agent or its agents, employees, officers or directors in any way relating to or
arising out of this Agreement or the other Loan Documents, or as a result of
any action taken or omitted to be taken by the Agent; provided, however, that
no Bank shall be liable for any portion of any such losses, liabilities
(including liabilities for penalties), actions, suits, judgments, demands,
damages, costs, disbursements, or expenses resulting from the gross negligence
or willful misconduct of the Agent. 
Notwithstanding any other provisions of this Agreement or the other Loan
Documents, the Agent shall in all cases be fully justified in failing or
refusing to act hereunder unless it shall be indemnified to its satisfaction by
the Banks against any and all liability and expense that may be incurred by it
by reason of taking or continuing to take any such action.

11.6        Limitations
on Agent’s Power.

Notwithstanding any other provision of this Agreement, the Agent shall
not have the power, without the consent of all of the Banks, to
(i) forgive any indebtedness of the Borrower arising under this Agreement
or the Notes, (ii) agree to reduce the rate of interest or fees charged
under this Agreement except as expressly provided in this Agreement,
(iii) agree to extend the due date for payment of principal, interest,
fees or any other amount due under this Agreement or the Notes,
(iv) extend the Commitment Termination Date or increase the amount of any
of the Commitments except as provided in Sections 2.6 and 2.7, (v) amend
the definition of “Required Banks,” (vi) amend this Section 11.6,
Section 12.4 or Section 12.5 of this Agreement, or any provision
herein providing for consent or other action by all Banks, (vii) amend any
provision for the pro rata treatment of the Banks with respect to the sharing
of payments of principal or 

 40
 

interest or the making of Advances, or (viii) release the Borrower
from personal liability on account of its obligations hereunder, including its
obligations under Section 3.

11.7        Exculpation
of the Agent by the Banks.

The Agent shall be entitled to rely upon advice of counsel concerning
legal matters, and upon any writing which it believes to be genuine or to have
been presented by a proper person. 
Neither the Agent nor any of its directors, officers, employees or
agents shall (a) be responsible to any of the Banks for any recitals,
representations or warranties contained in, or for the execution, validity,
genuineness, effectiveness or enforceability of this Agreement, any Loan
Document, or any other instrument or document delivered hereunder or in
connection herewith, (b) be responsible to any of the Banks for the validity,
genuineness, perfection, effectiveness, enforceability, existence, value or
enforcement of any collateral security, (c) be under any duty to any of the
Banks to inquire into or pass upon any of the foregoing matters, or to make any
inquiry concerning the performance by the Borrower or any other obligor of its
obligations, or (d) in any event, be liable to any of the Banks for any action
taken or omitted by it or them, except for its or their own gross negligence or
willful misconduct.

11.8        Agent
and Affiliates.

The Agent shall have the same rights, powers and obligations hereunder
in its individual capacity as any other Bank, and may exercise or refrain from
exercising the same as though it were not the Agent, and the Agent and its
affiliates may accept deposits from and generally engage in any kind of
business with the Borrower as fully as if the Agent were not the Agent
hereunder.

11.9        Credit
Investigation.

Each Bank acknowledges that it has made such inquiries and taken such
care on its own behalf as would have been the case had its Commitment been
granted and the Advances made directly by such Bank to the Borrower without the
intervention of the Agent or any other Bank. 
Each Bank agrees and acknowledges that the Agent makes no
representations or warranties about the creditworthiness of the Borrower or any
other party to this Agreement or with respect to the legality, validity,
sufficiency or enforceability of this Agreement, any Loan Document, or any
other instrument or document delivered hereunder or in connection herewith.

11.10      Resignation.

The Agent may resign as such at any time upon at least 30 days’ prior
notice to the Borrower and the Banks.  In
the event of any resignation of the Agent, the Required Banks shall as promptly
as practicable appoint a successor Agent. 
If no such successor Agent shall have been so appointed by the Required
Banks and shall have accepted such appointment within 30 days after the
resigning Agent’s giving of notice of resignation, then the resigning Agent
may, on behalf of the Banks, appoint a successor Agent, which shall be a
commercial bank organized under the laws of the United States of America or of
any State thereof.  Upon the acceptance
of any appointment as Agent hereunder by a successor Agent, such successor
Agent shall thereupon be entitled to receive from the prior Agent such documents
of transfer and assignment as such successor Agent may reasonably request and
the resigning Agent shall be discharged from its duties and obligations under
this Agreement.  After any resignation
pursuant to this Section, the provisions 

 41
 

of this Section shall inure to the benefit of the successor Agent as to
any actions taken or omitted to be taken by it while it is an Agent hereunder
and to the retiring Agent as to any actions taken or omitted to be taken by it
while it was an Agent hereunder.

11.11      Assignments
and Participations.

(a)                                  Participations. Any Bank may, at its option, sell one or
more participations in that Bank’s Advances; provided, however, (i) no such
participation shall relieve any Bank of its obligations under this Agreement
and the other Loan Documents, including, without limitation, its obligation to
make Advances hereunder on the terms and subject to the conditions set forth
herein, (ii) the Borrower, the Agent and the other Banks shall continue to deal
solely and directly with such Bank granting any such participation in
connection with such Bank’s rights and obligations under this Agreement and the
other Loan Documents, and (iii) no such participant under any such
participation shall have any right to approve any amendment or waiver of any
provision of this Agreement or the other Loan Documents, or to consent to any
departure by the Borrower therefrom, except to the extent that such amendment,
waiver or consent would reduce the principal of, or interest on, the Advances
in which such participant has such participation, or any fees or other amounts
payable hereunder if such participant participates therein, or would postpone
any date fixed for any payment of principal of, or interest on, the Advances in
which such participant has such participation, or any fees or other amounts
payable hereunder if such participant participates therein.  Except as set forth in (iii) above, no holder
of any such participation shall be entitled to require the Bank granting such
participation to take or omit to take any action hereunder.

(b)                                 Assignments.

(i)                                     Generally. 
Subject to the limitations set forth in subsection (ii) below, any Bank
may, at its option, assign to another Person all or a part of its Commitment,
Advances and other rights and obligations under this Agreement, but only
pursuant to an Assignment Certificate. 
From and after the effective date of any such assignment, the assignee
thereunder shall, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such assignment, have the rights and obligations so
assigned to it, and the assigning Bank shall, to the extent that rights and
obligations have been assigned by it pursuant to such assignment, relinquish
its rights and be released from its obligations under this Agreement.  Any Bank making an assignment under this
Section shall pay the Agent a transfer fee in the amount of $3,500 concurrent
with such assignment.  Within five Business
Days after any request of the Agent following such assignment, the Borrower
will, at its own expense, execute and deliver to the Agent  (for delivery to the assignee) a new
replacement Note payable to the order of such assignee in an amount
corresponding to the interest in the assigning Bank’s rights and obligations
under this Agreement acquired by such assignee pursuant to such assignment and,
to 

 42
 

the
extent that the assigning Bank has retained rights and obligations under this
Agreement, the Borrower will, at its own expense, execute and deliver to the
Agent (for delivery to the assigning Bank) a new replacement Note payable to
the order of the assigning Bank in an amount corresponding to the interest in
the assigning Bank’s rights and obligations under this Agreement retained by
such assigning Bank pursuant to such assignment.  Such new replacement Notes shall be dated the
effective date of such assignment and shall otherwise be in the form of the
Note to be replaced thereby.  Such new
replacement Notes shall be issued in substitution for, but not in satisfaction
or payment of, the Note being replaced thereby.

(ii)                                  Limitations. 
Notwithstanding paragraph (i):

(A)                              Any assignment under paragraph (i) may be
made only with the prior written consent of the Agent and the Borrower, which
consent shall not be unreasonably withheld.

(B)                                Unless the Agent and the Borrower otherwise
consent in writing, which consent shall not be unreasonably withheld, no
assignment may be made to any Person that is not an Eligible Assignee.

(C)                                Unless the Agent and the Borrower otherwise
consent in writing, which consent shall not be unreasonably withheld, the
aggregate Credit Exposure assigned by any Bank shall not exceed 60% of its
original Commitment hereunder, as such Commitment may have been reduced from
time to time pursuant to Section 6.4.

(D)                               Unless the Agent and the Borrower otherwise
consent in writing, which consent shall not be unreasonably withheld, any
assignment of a part of a Bank’s Commitment, Advances and other rights and
obligations must be in a minimum amount of $10,000,000.

No consent of the Borrower
that would otherwise be required under this subsection (ii) shall be required
during any period in which an Event of Default exists.  No consent of the Agent or the Borrower that
would otherwise be required under this subsection (ii) shall be required in
connection with an assignment by any Bank to any Affiliate of that Bank.

(c)                                  Information.  The
Borrower authorizes the Agent and each Bank to disclose to its affiliates and
any participant or assignee and any prospective participant or assignee any and
all financial and other information in the possession of the Agent or that Bank
concerning the Borrower.

(d)                                 Assignment to Federal Reserve
Bank.  Nothing herein shall prohibit any Bank from
pledging or assigning any Note to any Federal Reserve Bank in accordance with
applicable law.

 43
 

11.12      Syndication
Agent and Co-Documentation Agents.

The Banks identified on the title page as “Syndication Agent” and “Co-Documentation
Agents” shall have no right, power, obligation or liability under this
Agreement or any other Loan Document other than those applicable to all Banks
as such.  Each Bank acknowledges that it
has not relied, and will not rely, on any Bank so identified in deciding to
enter into this Agreement or in taking or omitting any action hereunder.

12.          MISCELLANEOUS.

12.1        365-Day
Year.

All interest on Advances subject to the Floating Rate and all fees due
under this Agreement will be calculated based on the actual days elapsed in a
365-day year.  All interest on Advances
subject to a LIBO Rate or the Federal Funds Rate and all fees will be
calculated based on the actual days elapsed in a 360-day year.

12.2        GAAP.

Except as otherwise stated in this Agreement, all financial information
provided to the Agent or the Banks and all calculations for compliance with
financial covenants will be made using generally accepted accounting principles
consistently applied (“GAAP”).

12.3        No
Waiver; Cumulative Remedies.

No failure or delay by the Agent or any Bank in exercising any rights
under this Agreement shall be deemed a waiver of those rights.  The remedies provided for in the Agreement
are cumulative and not exclusive of any remedies provided by law.

12.4        Amendments,
Etc.

Any amendment, modification, termination, or waiver of any provision of
this Agreement must be in writing and signed by the Agent with the approval of
the Required Banks (or such other number of Banks, if any, as may be required
hereunder for such amendment, modification, termination or waiver).  Notwithstanding the foregoing, any
modification of the type described in the first sentence of Section 11.6 shall
be effective only if signed by each Bank.

12.5        Binding
Effect: Assignment.

This Agreement is binding on the Borrower, the Agent and the Banks and
their successors and assigns.  The
Borrower may not assign its rights hereunder without the prior written consent
of all of the Banks.

12.6        New
York Law.

This Agreement is governed by the substantive laws of the State of New
York.

 44
 

12.7        Severability
of Provisions.

If any part of this Agreement is unenforceable, the rest of the
Agreement may still be enforced.

12.8        Integration.

This Agreement contains the entire understanding between the parties
and supersedes all other oral or written agreements between the Borrower and
the Agent or any Bank.

12.9        Notice.

(a)                                  Except
as otherwise specified herein, all notices and other communications hereunder
shall be in writing and shall be (i) personally delivered, (ii) sent
by registered mail, postage prepaid, or (iii) transmitted by telecopy, in
each case addressed to the party to whom notice is being given at its address
set forth by its signature below or if telecopied, transmitted to that party at
its telecopier number set forth by its signature below; or, as to each party,
at such other address or telecopier number as may hereafter be designated in a
notice by that party to the other party complying with the terms of this
Section.  All such notices or other
communications shall be deemed to have been given on (i) the date received
if delivered personally, (ii) the date of posting if delivered by mail, or
(iii) the date of transmission if delivered by telecopy.  All communications required hereunder to be
delivered by e-mail shall be transmitted to the e-mail address set forth by the
applicable party’s signature below, or, as to each party, at such other e-mail
address as may hereafter be designated in a notice by that party to the other
party complying with the terms of this Section.

(b)                                 So
long as Citibank or any of its Affiliates is the Agent, materials required to
be delivered pursuant to Section 9.1(a) and (b) shall be delivered to the Agent
in an electronic medium in a format acceptable to the Agent and the Banks by
e-mail at oploanswebadmin@citigroup.com. 
The Borrower agrees that the Agent may make such materials, as well as
any other written information, documents, instruments and other material
relating to the Borrower, any of its subsidiaries or any other materials or
matters relating to this Agreement, the Notes or any of the transactions
contemplated hereby (collectively, the “Communications”) available to
the Banks by posting such notices on Intralinks or a substantially similar
electronic system (the “Platform”). 
The Borrower acknowledges that (i) the distribution of material through
an electronic medium is not necessarily secure and that there are
confidentiality and other risks associated with such distribution, (ii) the
Platform is provided “as is” and “as available” and (iii) neither the Agent nor
any of its affiliates warrants the accuracy, adequacy or completeness of the
Communications or the Platform and each expressly disclaims liability for
errors or omissions in the Communications or the Platform.  No warranty of any kind, express, implied or
statutory, including, without limitation, any warranty of merchantability,
fitness for a particular purpose, non-infringement of third party rights or
freedom from viruses or other code defects, is made by the Agent or any of its
Affiliates in connection with the Platform.

(c)                                  Each Bank agrees that notice to it (as provided
in the next sentence) (a “Notice”)
specifying that any Communications have been posted to the Platform shall
constitute effective delivery of such information, documents or other materials
to such Bank for purposes of this Agreement; provided
that if requested by any Bank the Agent shall deliver a copy of the 

 45
 

Communications
to such Bank by email or telecopier. 
Each Bank agrees (i) to notify the Agent in writing of such Bank’s
e-mail address to which a Notice may be sent by electronic transmission
(including by electronic communication) on or before the date such Bank becomes
a party to this Agreement (and from time to time thereafter to ensure that the
Agent has on record an effective e-mail address for such Bank) and (ii) that
any Notice may be sent to such e-mail address.

12.10      Indemnification
by the Borrower.

The Borrower hereby agrees to indemnify and hold
harmless the Agent and each Bank, as well as their agents, employees, officers
and directors (collectively, the “Indemnified Parties” and individually an “Indemnified
Party”) from and against any and all losses, liabilities (including liabilities
for penalties), actions, suits, judgments, demands, damages, costs,
disbursements, or expenses (including reasonable attorneys’ fees and expenses)
of any kind or nature whatsoever, which are imposed on, incurred by, or
asserted against an Indemnified Party in any way relating to or arising out of
this Agreement or the other Loan Documents; provided, however, that the
Borrower shall not be liable for any portion of any such losses, liabilities
(including liabilities for penalties), actions, suits, judgments, demands,
damages, costs, disbursements, or expenses to the extent resulting from
(i) an Indemnified Party’s failure to perform its obligations under this
Agreement, or (ii) any negligence, gross negligence or willful misconduct
of an Indemnified Party.  In the case of
an investigation, litigation or other proceeding to which the indemnity in this
paragraph applies, such indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by the Borrower, any of its
directors, security holders or creditors, an Indemnified Party or any other
person or an Indemnified Party is otherwise a party thereto and whether or not
the transactions contemplated hereby are consummated.

No Indemnified Party shall have any liability
(whether in contract, tort or otherwise) to the Borrower or any of its security
holders or creditors for or in connection with the transactions contemplated
hereby, except to the extent such liability is determined in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party’s negligence, gross negligence or willful
misconduct.  In no event, however, shall
any Indemnified Party be liable on any theory of liability for any special,
indirect, consequential or punitive damages (including, without limitation, any
loss of profits, business or anticipated savings).

12.11      Customer
Identification - USA Patriot Act Notice.

Each Bank and the Agent (for itself and not on behalf of any other
party) hereby notifies the Borrower that, pursuant to the requirements of the
USA Patriot Act, Title III of Pub. L. 107-56, signed into law October 26, 2001
(the “Act”), it is required to obtain, verify and record information that
identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow such Bank or the Agent, as
applicable, to identify the Borrower in accordance with the Act.

 46
 

12.12      Execution
in Counterparts.

This Agreement and the other Loan Documents may be executed in any
number of counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which counterparts of this Agreement or
such other Loan Document, as the case may be, taken together, shall constitute
but one and the same instrument.

12.13      Waiver
of Jury Trial.

THE BORROWER, THE AGENT AND THE BANKS HEREBY WAIVE TRIAL BY JURY IN ANY
JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER
SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO,
OR CONNECTED WITH THIS AGREEMENT AND THE NOTES OR THE RELATIONSHIPS ESTABLISHED
HEREUNDER.

12.14      Jurisdiction.

The Borrower hereby irrevocably and unconditionally submits to the
nonexclusive jurisdiction of any New York State court or federal court of
the United States of America sitting in New York City, and any appellate
court from any thereof, in any action or proceeding arising out of or relating
to this Agreement or any of the other Loan Documents, and the Borrower hereby
irrevocably and unconditionally agrees that all claims in respect of such
action or proceeding may be heard and determined in such state or federal
court.  The Borrower hereby irrevocably
waives, to the fullest extent it may effectively do so, the defense of an
inconvenient forum to the maintenance of such action or proceeding.  The Borrower irrevocably consents to the service
of copies of the summons and complaint and any other process which may be
served in any such action or proceeding by the mailing of copies of such
process to the Borrower at its address referred to in Section 12.9.  The Borrower agrees that a final judgment in
any such action or proceeding may be enforced in other jurisdictions by suit on
the judgment or in any other manner provided by law.  Nothing in this Section 12.15 shall affect
the right of the Agent or any Bank to serve legal process in any other manner
permitted by law or affect the right of the Agent or any Bank to bring any
action or proceeding against the Borrower or its property in the courts of
other jurisdictions.

12.15      Substitution
of Currency.

If a change in any Committed Currency occurs pursuant to any applicable
law, rule or regulation of any governmental, monetary or multi-national
authority, this Agreement (including, without limitation, the definitions of
LIBO Base Rate) will be amended to the extent determined by the Agent (acting
reasonably and in consultation with the Borrower) to be necessary to reflect
the change in currency and to put the Banks and the Borrower in the same
position, so far as possible, that they would have been in if no change in such
Committed Currency had occurred.

 47

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the day and year first above written.

	
  Address:

  	
  3M COMPANY

  
	
  Building 220-13W-37, 3M
  Center

  	
   

  	
   

  
	
  St. Paul, MN 55144-1000

  	
   

  	
   

  
	
  Attention:  J. L. Yeomans

  	
   

  	
   

  
	
  E-Mail:  jlyeomans@mmm.com

  	
  By

  	
  /s/ Janet L. Yeomans

  
	
  Telecopier (651) 737-0010

  	
   

  	
  Its Vice President &
  Treasurer

  

Signature Page to 3M Company Credit Agreement

 

 

	
  Commitment: $200,000,000

  	
   

  
	
  Address:

  	
  CITIBANK, N.A., as Agent and as
  Bank

  
	
  233 S. Wacker Drive, 86th
  Floor

  	
   

  	
   

  
	
  Chicago, IL 60606

  	
   

  	
   

  
	
  Attention: Patrick
  Hartweger

  	
   

  	
   

  
	
  E-Mail:  Patrick.hartweger@citigroup.com

  	
  By

  	
  /s/ Kevin Ege

  
	
  Telecopier (312) 876-3290

  	
   

  	
  Its Vice President

  

Signature Page to 3M Company Credit Agreement

 

	
  Commitment: $200,000,000

  	
   

  
	
  Address:

  	
  JPMORGAN CHASE BANK, N.A.

  
	
  270 Park Ave, 4th Floor

  	
   

  	
   

  
	
  New York, New York 10017

  	
   

  	
   

  
	
  Attention:  Anthony W. White

  	
   

  	
   

  
	
  E-Mail:
  anthony.w.white@JPMorgan.com

  	
  By

  	
  /s/ Randolph Cates

  
	
  Telecopier: 212-270-3279

  	
   

  	
  Its Executive Director

  

Signature Page to 3M Company Credit Agreement

 

 

	
  Commitment: $165,000,000

  	
   

  
	
  Address:

  	
  WELLS FARGO BANK, NATIONAL
  ASSOCIATION

  
	
  Wells Fargo U.S. Corporate
  Banking

  	
   

  	
   

  
	
  90 S. 7th Street

  	
   

  	
   

  
	
  MAC #N9305-031

  	
   

  	
   

  
	
  Minneapolis, MN 55479

  	
   

  	
   

  
	
  Attention:  Edward B. Hanson

  	
  By

  	
  /s/ Edward B. Hanson

  
	
  E-Mail:
  edward.b.hanson@wellsfargo.com

  	
   

  	
  Its Assistant Vice
  President

  
	
  Telecopier: 612 667-2276

  	
   

  	
   

  

Signature Page to 3M Company Credit Agreement

 

 

	
  Commitment: $165,000,000

  	
   

  
	
  Address (2):

  	
  ABN AMRO BANK N.V.

  
	
   

  	
   

  
	
  208 South LaSalle Street, Suite 1500

  	
   

  	
   

  
	
  Chicago, IL 60604-1003

  	
   

  	
   

  
	
  Attention: 
  Nick Blea

  	
   

  	
   

  
	
  E-Mail: dominic.blea@abnamro.com

  	
  By

  	
  /s/ David Carrington

  
	
  Telecopier (312) 992-5111

  	
   

  	
  Its Director

  
	
   

  	
   

  	
   

  
	
  208 South LaSalle Street, Suite 1500

  	
   

  	
   

  
	
  Chicago, IL 60604-1003

  	
   

  	
   

  
	
  Attention: 
  Jamil Ali

  	
   

  	
   

  
	
  E-Mail: jamil.ali@abnamro.com

  	
  By

  	
  /s/ Marc Brondyke

  
	
  Telecopier (312) 904-1660

  	
   

  	
  Its Associate

  

Signature Page to 3M Company Credit Agreement

 

 

	
  Commitment: $100,000,000

  	
   

  
	
  Address:

  	
  MERRILL LYNCH BANK USA

  
	
  15 W. South Temple, Suite 300

  	
   

  	
   

  
	
  Salt Lake City, UT 84101

  	
   

  	
   

  
	
  Attention: 
  Julie Young

  	
   

  	
   

  
	
  E-Mail: julie_young@ml.com

  	
  By

  	
  /s/ Louis Alder

  
	
  Telecopier 801-559-4667

  	
   

  	
  Its Director

  

Signature Page to 3M Company Credit Agreement

 

 

	
  Commitment: $100,000,000

  	
   

  
	
  Address:

  	
  MORGAN STANLEY BANK

  
	
  1633 Broadway, Floor 25

  	
   

  	
   

  
	
  New York, NY 10019

  	
   

  	
   

  
	
  Attention: 
  Erma Dell’Aquila

  	
   

  	
   

  
	
  E-Mail: erma.dell’aquila@morganstanley.com

  	
  By

  	
  /s/ Daniel Twenge

  
	
  Telecopier: 212-537-1867

  	
   

  	
  Its Authorized Signatory

  

Signature Page to 3M Company Credit Agreement

 

 

	
  Commitment: 
  $100,000,000

  	
   

  
	
  Address:

  	
  UBS LOAN FINANCE LLC

  
	
  677 Washington Boulevard

  	
   

  	
   

  
	
  Stamford, CT 06901

  	
   

  	
   

  
	
  Attention: Marie Haddad

  	
   

  	
   

  
	
  E-Mail: marie.haddad@ubs.com

  	
  By

  	
  /s/ Irja R. Otsa

  
	
  Telecopier (203) 719-3888

  	
   

  	
  Its Associate Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ David B. Julie

  
	
   

  	
   

  	
  Its Associate Director

  

Signature Page to 3M Company Credit Agreement

 

 

	
  Commitment: $100,000,000

  	
   

  
	
  Address:

  	
  WILLIAM STREET COMMITMENT CORPORATION
  

  
	
  30 Hudson Street, 17th floor

  	
   

  	
  (Recourse only to assets of
  William Street 

  
	
  Jersey City, NJ 07302

  	
   

  	
  Commitment Corporation)

  
	
  Attention: 
  Bank Loan Operations

  	
   

  	
   

  
	
  E-Mail: ficc-1stops-mv@gs.com

  	
  By

  	
  /s/ Mark Walton

  
	
  Telecopier 212-357-4597

  	
   

  	
  Its Assistant Vice
  President

  

Signature Page to 3M Company Credit Agreement

 

 

	
  Commitment: $100,000,000

  	
   

  
	
  Address:

  	
  BANK OF AMERICA, N.A.

  
	
  231 S. LaSalle St.

  	
   

  	
   

  
	
  IL 1-23-10-10

  	
   

  	
   

  
	
  Chicago, IL 60604

  	
   

  	
   

  
	
  Attention: 
  Brian Lukehart

  	
  By

  	
  /s/ Jeffrey Armitage

  
	
  E-Mail: 
  brian.lukehart@bankofamerica.com

  	
   

  	
  Its Senior Vice President

  
	
  Telecopier: 
  415-503-5148

  	
   

  	
   

  

Signature Page to 3M Company Credit Agreement

 

 

	
  Commitment:  $75,000,000

  	
   

  
	
  Address:

  	
  BANCO SANTANDER CENTRAL
  HISPANO, S.A., 

  
	
  45 East 53rd Street

  	
   

  	
  NEW YORK BRANCH

  
	
  New York, NY 10022

  	
   

  	
   

  
	
  Attention: 
  Ruben Perez Romo

  	
   

  	
   

  
	
  E-Mail: 
  rperezromo@schny.com

  	
  By

  	
  /s/ L. Ruben Perez Romo

  
	
  Telecopier: 
  212-407-1141

  	
   

  	
  Its Vice President

  

 

	
  Commitment:  $75,000,000

  	
   

  
	
  Address:

  	
  BANCO SANTANDER CENTRAL
  HISPANO, S.A., 

  
	
  45 East 53rd Street

  	
   

  	
  NEW YORK BRANCH

  
	
  New York, NY 10022

  	
   

  	
   

  
	
  Attention: 
  Ignacio Campillo

  	
   

  	
   

  
	
  E-Mail: 
  icampillo@schny.com

  	
  By

  	
  /s/ Ignacio Campillo

  
	
  Telecopier: 
  212-350-3691

  	
   

  	
  Its Executive Director

  

Signature Page to 3M Company Credit Agreement

 

	
  Commitment: $75,000,000

  	
   

  
	
  Address:

  	
  DEUTSCHE BANK AG NEW YORK
  BRANCH

  
	
  200 Plaza One

  	
   

  	
   

  
	
  Jersey City, NJ 07311-3901

  	
   

  	
   

  
	
  Attention: 
  Joe Cusmai

  	
   

  	
   

  
	
  E-Mail: 
  joe.cusmai@db.com

  	
  By

  	
  /s/ Frederick Laird

  
	
  Telecopier: 
  201-593-2313

  	
   

  	
  Its Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Heidi Sandquist

  
	
   

  	
   

  	
  Its Vice President

  

Signature Page to 3M Company Credit Agreement

 

 

	
  Commitment: $40,000,000

  	
   

  
	
  Address:

  	
  THE BANK OF NEW YORK

  
	
  One Wall Street — 19th Floor

  	
   

  	
   

  
	
  New York, New York 10286

  	
   

  	
   

  
	
  Attention: 
  Walter Parelli

  	
   

  	
   

  
	
  E-Mail: 
  wparelli@bankofny.com

  	
  By

  	
  /s/ Stephen Griffith

  
	
  Telecopier: 
  212-635-1208

  	
   

  	
  Its Managing Director

  

Signature Page to 3M Company Credit Agreement

 

 

	
  Commitment: $40,000,000

  	
   

  
	
  Address:

  	
  MELLON BANK, N.A.

  
	
  1 Mellon Center — Room 4530

  	
   

  	
   

  
	
  Pittsburgh, PA 
  15258-0001

  	
   

  	
   

  
	
  Attention: 
  Robert J. Mitchell, Jr.

  	
   

  	
   

  
	
  E-Mail: mitchell.rj@mellon.com

  	
  By

  	
  /s/ Robert J. Mitchell,
  Jr.

  
	
  Telecopier: 412 234-4401

  	
   

  	
  Its First Vice President

  

Signature Page to 3M Company Credit Agreement

 

 

	
  Commitment: $40,000,000

  	
   

  
	
  Address:

  	
  SOCIETE GENERALE

  
	
  181 West Madison St.

  	
   

  	
   

  
	
  Chicago, IL 
  60602

  	
   

  	
   

  
	
  Attention: 
  Milissa Goeden

  	
   

  	
   

  
	
  E-Mail: millissa.goeden@sgcib.com

  	
  By

  	
  /s/ Anne-Marie Dumortier

  
	
  Telecopier: 312 578-5099

  	
   

  	
  Its Director

  

Signature Page to 3M Company Credit Agreement

EXHIBITS

	
  Exhibit A

  	
   

  	
  Conditions Precedent

  
	
  Exhibit B

  	
   

  	
  Representations and
  Warranties

  
	
  Exhibit C

  	
   

  	
  Form of Revolving Note

  
	
  Exhibit D

  	
   

  	
  Form of Swingline Note

  
	
  Exhibit E

  	
   

  	
  Form of Compliance
  Certificate

  
	
  Exhibit F

  	
   

  	
  Existing Letters of
  Credit

  

 

Exhibit A

CONDITIONS PRECEDENT

1.             Each Bank’s Note.

2.             Authorization

(a)                                  A certified copy of resolutions of the
Borrower’s board of directors authorizing the execution of this Agreement and
all related documents.

(b)                                 A certificate of the Borrower’s corporate
secretary as to the incumbency and signatures of the officers of the Borrower
signing this Agreement.

3.             Organization

(a)                                  A certified copy of the Borrower’s Articles
of Incorporation and By-Laws.

(b)                                 A Certificate of Good Standing issued by the
Secretary of the State of the state of the Borrower’s incorporation dated not
more than 30 days prior to the date hereof.

4.                                       An opinion of counsel to the Borrower,
opining as to the due authorization, execution, delivery and enforceability of
the Loan Documents and such other matters as the Agent may require.

5.                                       A certificate from a duly authorized officer
of the Borrower stating that (a) the Borrower has repaid all outstanding
advances and shall have paid all other amounts payable under the U.S.
$565,000,000 Credit Agreement dated as of March 2, 2005 among the Borrower, the
lenders parties thereto and Wells Fargo Bank, National Association, as
administrative agent, and (b) the commitments under such credit facility have
been terminated.

 A-1

Exhibit B

REPRESENTATIONS AND WARRANTIES

Corporate Status.   The Borrower is a corporation duly formed
and in good standing under the laws of the State of Delaware.

Authorization.   The execution, delivery and performance of
this Agreement are within the Borrower’s powers, have been duly authorized, and
do not conflict with the articles or bylaws of the Borrower, any agreement by
which the Borrower is bound or any court, administrative or other ruling by
which the Borrower is bound.

Financial Reports.   The Borrower has provided the
Banks with its annual audited financial statement as of December 31, 2006.  These statements fairly represent the
financial condition of the Borrower as of their respective dates and were prepared
in accordance with GAAP.  There has been
no material adverse change in the consolidated financial condition of the
Borrower after the date of those statements.

Material Adverse Change.   Since December 31, 2006,
there has been occurred no event or circumstance that would individually or in
the aggregate have a material adverse effect on the consolidated financial
condition or operations of the Borrower.

Litigation.   Except as disclosed in the Borrower’s Annual
Report on Form 10-K for the year ended December 31, 2006 as filed with the
Securities and Exchange Commission (“SEC”) and the update attached hereto as
Schedule A, there are no legal or governmental proceedings pending or, to the
best of the Borrower’s knowledge, threatened by governmental authorities or
others, by which the Borrower is or may be bound, which, if determined
adversely to the Borrower, would individually or in the aggregate have a
material adverse effect on the consolidated financial condition or operations
of the Borrower.

Taxes.   The Borrower has filed when due all federal,
state and local tax returns and paid all amounts shown as due thereon, except
for such amounts which are being contested in good faith by appropriate
proceedings.

No Default.   There is no Default or Event of Default
under this Agreement.

ERISA.   The
Borrower is in compliance in all material respects with ERISA and has received
no notice to the contrary from the PBGC or other governmental area.

Environmental Matters.   Except as disclosed in the
Borrower’s Annual Report on Form 10-K for the year ended
December 31, 2006 as filed with the SEC and the update attached hereto as
Schedule A, to the best of the Borrower’s knowledge, the Borrower has not
incurred, directly or indirectly, any material contingent liability in
connection with (i) the release of any toxic or hazardous waste or
substance into the environment or (ii) noncompliance with applicable
environmental, health and safety statutes and regulations.

 B-1
 

Insurance.  The Borrower is maintaining the insurance
required by Section 9.2(c).

Legal Agreements.  This Agreement and the other Loan Documents
constitute the legal, valid and binding obligations and agreements of the
Borrower, enforceable against the Borrower in accordance with their respective
terms, including against claims of usury, except to the extent that enforcement
thereof may be limited by any applicable bankruptcy, insolvency or similar laws
now or hereafter in effect affecting creditors’ rights generally.

Regulation U.  The Borrower is not engaged in the business
of extending credit for the purpose of purchasing or carrying margin stock
(within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System), and no part of the proceeds of any Advance will be used to
purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying any margin stock.

 B-2
 

Schedule A

UPDATE
— LITIGATION AND ENVIRONMENTAL MATTERS

Legal
Proceedings:

The Company and some of its subsidiaries are
involved in numerous claims and lawsuits, principally in the United States, and
regulatory proceedings worldwide. These include various products liability
(involving products that the Company now or formerly manufactured and sold),
intellectual property, and commercial claims and lawsuits, including those
brought under the antitrust laws, and environmental proceedings. The following
sections first describe the significant legal proceedings in which the Company
is involved, and then describe the liabilities and associated insurance
receivables the Company has accrued relating to its significant legal
proceedings. Unless otherwise stated, the Company is vigorously defending all
such litigation. Additional
information can be found in Note 13 “Commitments and Contingencies” in the
Company’s Annual Report on Form 10-K for the year ended December 31, 2006,
including information about the Company’s process for establishing and
disclosing accruals and insurance receivables.

Antitrust Litigation

As previously reported, LePage’s Inc., a transparent tape competitor of
3M, filed a lawsuit against the Company in June 1997 alleging that certain
marketing practices of the Company constituted unlawful monopolization under
the antitrust laws. Following the entry of a
verdict in LePage’s favor and appellate rulings sustaining that verdict, direct
and indirect tape purchasers filed a number of purported class actions and
individual actions against the Company in various state and federal courts.
These cases alleged that the Company competed unfairly and unlawfully
monopolized alleged markets for transparent tape, and sought injunctive relief
and damages in the form of price overcharges the Company allegedly charged for
these products.

The Company has resolved each of these actions.
The settlements of the various purported class actions received final court
approval in 2006, and the settlement of the single certified class action
pending in the federal court in Pennsylvania received preliminary court
approval in the fall of 2006. No objections were filed and the final court
hearing occurred in April 2007.  A final
approval order is expected in the spring of 2007.

Breast Implant Litigation

The Company and certain other companies were named
as defendants in past years in numerous claims and lawsuits alleging damages
for personal injuries of various types resulting from breast implants formerly
manufactured by the Company or a related company. The vast majority of claims
against the Company have been resolved. The Company does not consider its
remaining probable liability to be material. Information concerning the
associated insurance receivable is in the table in the paragraph entitled Accrued Liabilities and Insurance Receivables Related to Legal
Proceedings.

Respirator Mask/Asbestos
Litigation

As of
March 31, 2007, the Company is a named defendant, with multiple co-defendants,
in numerous lawsuits in various courts that purport to represent approximately
14,500 individual claimants, a decrease from the approximately 40,200
individual claimants with actions pending at March 31, 2006.  The vast majority of the lawsuits and claims
resolved by and currently pending against the Company allege use of some of the
Company’s mask and respirator products and seek damages from the Company and
other 

 B-3
 

defendants for alleged personal injury from
workplace exposures to asbestos, silica, coal or other occupational dusts found
in products manufactured by other defendants or generally in the workplace. The
remaining claimants generally allege personal injury from occupational exposure
to asbestos from products previously manufactured by the Company, which are
often unspecified, and by other defendants, or occasionally at Company
premises.

Many of the resolved lawsuits and claims involved
unimpaired claimants who were recruited by plaintiffs’ lawyers through mass chest
x-ray screenings. The Company experienced a significant decline in the number
of claims filed in 2006 and through the first quarter of 2007 from prior years
by apparently unimpaired claimants. The Company attributes this decline to
several factors, including certain changes enacted in several states in recent
years of the law governing asbestos-related claims, and the highly-publicized
decision in mid-2005 of the United States District Court for the Southern
District of Texas that identified and criticized abuses by certain attorneys,
doctors and x-ray screening companies on behalf of claimants. The Company
expects the filing of claims by unimpaired claimants in the future to continue
at much lower levels than in the past. The Company believes that due to this
change in the type and volume of incoming claims, it is likely that going
forward the number of claims alleging more serious injuries, including
mesothelioma and other malignancies, while remaining relatively constant, will
represent a greater percentage of total claims than in the past. The Company
has demonstrated in past trial proceedings that its respiratory protection
products are effective as claimed when used in the intended manner and in the
intended circumstances. Consequently the Company believes that claimants are
unable to establish that their medical condition, even if significant, is
attributable to the Company’s respiratory protection products. Nonetheless the
Company’s litigation experience indicates that such claims are costlier to resolve
than the claims of unimpaired persons, and it therefore anticipates an increase
in the average cost of resolving pending and future claims on a per-claim basis
than it experienced in prior periods when the vast majority of claims were
asserted by the unimpaired.

As previously reported, the State of West
Virginia, through its Attorney General, filed a complaint in 2003 against the
Company and two other manufacturers of respiratory protection products in the
Circuit Court of Lincoln County, West Virginia and amended it in 2005. The
amended complaint seeks substantial, but unspecified, compensatory damages
primarily for reimbursement of the costs allegedly incurred by the State for
worker’s compensation and healthcare benefits provided to all workers with occupational pneumoconiosis, including current or former
miners allegedly suffering from silicosis and/or coal miner’s pneumoconiosis (“Black
Lung disease”) and unspecified punitive damages.

Employment Litigation

As previously reported, one current and one former
employee of the Company filed a purported class action in the District Court of
Ramsey County, Minnesota in December 2004, seeking to represent a class of all
current and certain former salaried employees employed by 3M in Minnesota below
a certain salary grade who were age 46 or older at any time during the
applicable period to be determined by the Court. The complaint alleges the
plaintiffs suffered various forms of employment discrimination on the basis of
age in violation of the Minnesota Human Rights Act and seeks injunctive relief,
unspecified compensatory damages (which they seek to treble under the statute),
including back and front pay, punitive damages (limited by statute to $8,500
per claimant) and attorneys’ fees. In January 2006, the plaintiffs filed a
motion to join four additional named plaintiffs. This motion was unopposed by
the Company and the four plaintiffs were joined in the case, although one claim
has been dismissed following an individual settlement.

A
similar age discrimination purported class action was filed against the Company
in November 2005 in the Superior Court of Essex County, New Jersey on behalf of
a class of New Jersey-based employees of the Company. The Company removed this
case to the United States District Court for the District of New Jersey. In
addition, three former employees filed age discrimination charges against the
Company with the 

 B-4
 

U.S. Equal Employment Opportunity Commission and
the pertinent state agencies in Texas, Minnesota and California, during 2005;
two of these charges were amended in 2006. Such filings include allegations
that the release of claims signed by certain former employees in the purported
class defined in the charges is invalid for various reasons and assert age
discrimination claims on behalf of certain current and former salaried
employees in states other than Minnesota and New Jersey. In 2006, one current
employee filed an age discrimination charge against the Company with the U.S.
Equal Employment Opportunity Commission and the pertinent state agency in
Missouri, asserting claims on behalf of a class of all current and certain
former salaried employees who worked in Missouri and other states other than
Minnesota and New Jersey. The same law firm represents the plaintiffs and claimants
in each of these proceedings.

Environmental Matters and
Litigation

The Company’s operations are subject to
environmental laws and regulations including those pertaining to air emissions,
wastewater discharges, toxic substances, and the handling and disposal of solid
and hazardous wastes enforceable by national, state and local authorities
around the world, and private parties in the United States and abroad. These
laws and regulations provide, under certain circumstances, a basis for the
remediation of contamination and for personal injury and property damage
claims. The Company has incurred, and will continue to incur, costs and capital
expenditures in complying with these laws and regulations, defending personal
injury and property damage claims, and modifying its business operations in
light of its environmental responsibilities. In its effort to satisfy its
environmental responsibilities and comply with environmental laws and
regulations, the Company has established, and periodically updates, policies
relating to environmental standards of performance for its operations
worldwide.

Remediation: Under certain
environmental laws, including the United States Comprehensive Environmental
Response, Compensation and Liability Act of 1980 and similar state laws, the
Company may be jointly and severally liable, typically with other companies,
for the costs of environmental contamination at current or former facilities
and at off-site locations. The Company has identified numerous locations, most
of which are in the United States, at which it may have some liability. Please refer to the following section, “Accrued Liabilities and Insurance Receivables Related to Legal
Proceedings” for more information on this subject.

Regulatory Activities: As previously
reported, the Company has been voluntarily cooperating with ongoing reviews by
local, state, national (primarily the U.S. Environmental Protection Agency
(EPA)), and international agencies of possible environmental and health effects
of perfluorooctanyl compounds (perflurooctanoic acid or “PFOA” and
perfluorooctane sulfonate or “PFOS”) and related compounds. As a result of its
phase-out decision in May 2000, the Company no longer manufactures
perfluorooctanyl compounds except that a subsidiary recovers and recycles PFOA
in Gendorf, Germany for internal use in production processes.

The EPA signed a Memorandum of Understanding with
the Company and Dyneon LLC, a subsidiary of the Company, in October, 2004,
under which the Company is assessing the potential presence of PFOA at and
around the Company’s manufacturing facility in Decatur, Alabama. Activities are
in progress pursuant to this Memorandum of Understanding.

Regulatory activities concerning PFOA and/or PFOS
continue in Europe and elsewhere, and before certain international bodies.
These activities include gathering of exposure and use information, risk
assessment, and consideration of regulatory approaches. In December 2006, the
European Union adopted an amendment to the Marketing and Use Directive to limit
use of PFOS. Member States must enact the Directive into national law by December 27,
2007.

 B-5
 

As previously reported, the Company and state
agencies tested soil and groundwater beneath two former waste disposal sites in
Washington County, Minnesota, used many years ago by the Company to dispose
lawfully of waste containing perfluoronated compounds. The test results show
that water from certain municipal wells in Oakdale, Minnesota near two of the
former disposal sites and some private wells in that vicinity in Lake Elmo,
Minnesota contain low levels of PFOS and PFOA that, in some cases, are slightly
above guidelines established by the Minnesota Department of Health (“MDH”).  In March 2007 the MDH lowered these advisory
health-based values (HBV) (i.e., the amount of a chemical in drinking water
considered by the MDH staff to be safe for people to drink for a lifetime) for
PFOA from 7 parts per billion (ppb) to 0.5 ppb and for PFOS from 1 ppb to 0.3
ppb. Additional testing by the MDH has shown that water from the municipal
wells in Oakdale, Minnesota and some private wells in Lake Elmo, Minnesota also
contain low levels of other perfluoronated compounds. As previously reported,
the Company on its own initiative agreed with the City of Oakdale to construct,
operate and maintain for at least five years a granular activated carbon water
treatment system to treat one or more of Oakdale’s municipal wells. The Company
also donated several acres of land to the City of Lake Elmo, Minnesota for a
water tower and granted the City approximately $5.6 million that the City used
to expand municipal water service to neighborhoods that included a small number
of private wells in which levels of PFOS and PFOA had been detected.

As previously reported, the MDH has also detected
low levels of a perfluoronated compound called perfluorobutanoic acid (PFBA) in
municipal wells in six nearby communities (Woodbury, Cottage Grove, Newport,
St. Paul Park, South St. Paul, and Hastings, all communities located southeast
of St. Paul), some of which slightly exceed the MDH’s interim advisory level
for PFBA, currently at 1 ppb. The Company is working with the MDH and the
Minnesota Pollution Control Agency (MPCA) in assessing the source of PFBA in
these municipal wells and is supplying data that could be used in determining
an appropriate guideline level. The MDH has not issued any HBV for PFBA and is
temporarily applying guidelines it has developed for other perfluoronated
compounds. The Company has advised the affected communities that it will assist
them in assuring their drinking water falls below the legally permissible level
for PFBA when such value is finally determined.

The Company is also working with the MPCA to
determine whether low levels of PFOA, PFOS and other perfluoronated compounds
in the soil at the Company’s former perfluoronated compound production facility
at Cottage Grove, Minnesota, in the groundwater under the former plant and
disposal sites, and in river sediments near the former plant are continuing
sources of such compounds in the Mississippi River, its fish and wildlife.

The Company cannot predict what regulatory actions
arising from the foregoing proceedings and activities, if any, may be taken
regarding such compounds or the consequences of any such actions.

Litigation: As previously reported, a former employee filed
a purported class action lawsuit in 2002 in the Circuit Court of Morgan County,
Alabama involving perfluorooctanyl chemistry, alleging that the plaintiffs
suffered fear, increased risk, subclinical injuries and property damage from
exposure to perfluorooctanyl chemistry at or near the Company’s Decatur,
Alabama, manufacturing facility. The
Circuit Court in 2005 granted the Company’s motion to dismiss the named
plaintiff’s personal injury-related claims on the basis that such claims are
barred by the exclusivity provisions of the state’s Workers Compensation Act.
The plaintiffs’ counsel filed an amended complaint in November 2006, limiting
the case to property damage claims on behalf of a purported class of residents
and property owners in the vicinity of the Decatur plant. Also in 2005, the judge in a second purported class action
lawsuit (filed by three residents of Morgan County, Alabama seeking unstated
compensatory and punitive damages involving alleged damage to their property
from emissions of perfluorooctanyl compounds from the Company’s Decatur,
Alabama, manufacturing facility that formerly manufactured those compounds)
granted the Company’s motion to abate the case, effectively putting the case on
hold pending the resolution of class certification issues in the action
described above filed in the same court in 2002. Despite the stay, plaintiffs
recently filed an amended 

 B-6
 

complaint seeking damages for alleged personal
injuries and property damage on behalf of the named plaintiffs and the members
of a purported class.  No further action
in the case is expected unless and until the stay is lifted.

As previously reported, two residents of
Washington County, Minnesota, filed in October 2004 a purported class action in
the District Court of Washington County on behalf of Washington county
residents who have allegedly suffered personal injuries and property damage
from alleged emissions
from the former perfluorooctanyl production facility at Cottage Grove,
Minnesota and from historic waste disposal sites in the vicinity of that
facility. After the District Court
granted the Company’s motion to dismiss the claims for medical monitoring and
public nuisance in April 2005, the plaintiffs filed an amended complaint adding
additional allegations involving other perfluoronated compounds manufactured by
the Company, alleging additional legal theories in support of their claims,
adding four plaintiffs, and seeking relief based on alleged contamination of
the City of Oakdale municipal water supply and certain private wells in the
vicinity of Lake Elmo, Minnesota. In April 2006, the plaintiffs filed a second
amended complaint adding two additional plaintiffs. The two original plaintiffs
thereafter dismissed their claims against the Company. Plaintiffs’ counsel has
amended their definition of the purported class. The current (and fourth)
definition includes all individuals whose residential drinking water in
Minnesota is or has been supplied by one or more wells containing one or more
carboxylated perfluorochemicals at a concentration exceeding 1.0 part per
billion, or containing one or more sulfonated perfluorochemicals at a
concentration exceeding 0.6 part per billion. Pretrial proceedings are in
progress.  A hearing on the plaintiffs’
motion to certify the case as a class action was held at the end of March
2007.  The Company anticipates the Court’s
ruling during the second quarter of 2007.

In the second quarter of 2006, the New Jersey
Department of Environmental Protection served a lawsuit that was filed in New
Jersey state court against the Company and several other companies seeking
cleanup and removal costs and damages to natural resources allegedly caused by
the discharge of hazardous substances from a former disposal site in New Jersey.
The defendants removed the case to federal court.

Accrued Liabilities and Insurance Receivables
Related to Legal Proceedings

The following table shows the major
categories of on-going litigation, environmental remediation and other
environmental liabilities (as defined below) for which the Company has been
able to estimate its probable liability and for which the Company has taken
reserves and the related insurance receivables:

	
  (Millions)

  	
   

  	
  March 31,

  2007

  	
   

  	
  Dec. 31,

  2006

  	
   

  
	
  Breast implant
  liabilities

  	
   

  	
  $

  	
  2

  	
   

  	
  $

  	
  4

  	
   

  
	
  Breast implant
  receivables

  	
   

  	
  93

  	
   

  	
  93

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Respirator
  mask/asbestos liabilities

  	
   

  	
  159

  	
   

  	
  181

  	
   

  
	
  Respirator
  mask/asbestos receivables

  	
   

  	
  365

  	
   

  	
  380

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Environmental
  remediation liabilities

  	
   

  	
  40

  	
   

  	
  44

  	
   

  
	
  Environmental
  remediation receivables

  	
   

  	
  15

  	
   

  	
  15

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Other environmental
  liabilities

  	
   

  	
  136

  	
   

  	
  14

  	
   

  
								

 

 B-7
 

For those significant pending legal proceedings that do not appear in
the table and that are not the subject of pending settlement agreements, the
Company has determined that liability is not
probable or the amount of the liability is not estimable, or both, and the
Company is unable to estimate the possible loss or range of loss at this
time. The amounts in the preceding table with respect to breast implant and
environmental remediation represent the Company’s best estimate of the
respective liabilities. The Company does not believe that there is any single
best estimate of the respirator/mask/asbestos liability or the other
environmental liabilities shown above, nor that it can reliably estimate the
amount or range of amounts by which those liabilities may exceed the reserves
the Company has established.

The Company periodically reexamines its estimate of probable
liabilities with respect to its other environmental liabilities and makes
appropriate adjustments to such estimates based on experience and developments.
Various regulatory developments occurred
during the quarter, including increased regulatory activity in Minnesota and
the receipt of a permit to begin work addressing perfluoronated
compounds in the soil and groundwater at the Company’s manufacturing facility
in Decatur, Alabama. The Company also recently completed a comprehensive review
with environmental consultants regarding its other environmental liabilities
which include the estimated costs of
addressing trace amounts of perfluoronated compounds in drinking water sources
in the City of Oakdale and Lake Elmo, Minnesota, as well as presence in the
soil and groundwater at the Company’s manufacturing facilities in Decatur, Alabama
and Cottage Grove, Minnesota and at two former disposal sites in Minnesota. As
a result of these regulatory developments and of that review, the Company
increased its accrued liabilities by $121 million in the first quarter of 2007
to $136 million. The Company expects that most of the spending will occur over
the next three to seven years. This quarter’s accrual was recorded in selling,
general and administrative expenses.

No adverse human health effects are caused by
perflouronated compounds at current levels of exposure. This conclusion is
supported by a large body of research including laboratory studies and
epidemiology studies of exposed employees. This research has been published in
peer-reviewed scientific journals and shared with the EPA and global scientific-community.

 B-8

Exhibit C

REVOLVING NOTE

$               

                          ,
200   

FOR VALUE RECEIVED, 3M Company, a Delaware
corporation (the “Borrower”), promises to pay to the order of                                    
(the “Bank”), at such place as Agent under the Credit Agreement defined below
may from time to time designate in writing, the principal sum of                                    
Dollars ($                  ), or, if less, the
aggregate unpaid principal amount of all advances made by the Bank to the
Borrower pursuant to Section 2.1 of the Five Year Credit Agreement dated April
30, 2007 among the Borrower, Citibank, N.A., as Agent (in such capacity, the “Agent”),
and various Banks, including the Bank (the “Credit Agreement”), and to pay
interest on the principal balance of this Note outstanding from time to time at
the rate or rates determined pursuant to the Credit Agreement.

This Note is issued pursuant to, and is subject to,
the Credit Agreement, which provides (among other things) for the amount and
date of payments of principal and interest hereunder, for the acceleration of
this Note upon an Event of Default, for the determination of the Dollar
Equivalent of Revolving Advances denominated in Committed Currencies and for
the voluntary prepayment of this Note. 
This Note is a “Revolving Note,” as defined in the Credit Agreement.

The Borrower shall pay all costs of collection,
including reasonable attorneys’ fees and legal expenses, if this Note is not
paid when due, whether or not legal proceedings are commenced.

Presentment or other demand for payment, notice of
dishonor and protest are expressly waived.

	
  

  	
  3M COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Its

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

 C-1

Exhibit D

SWINGLINE NOTE

$50,000,000

                 
      , 200   

For value received, 3M Company, a Delaware
corporation (the “Borrower”), promises to pay to the order of Citibank, N.A., a
national banking association (the “Bank”), at its main office in New York, New
York, or at such other place as the holder hereof may hereafter from time to
time designate in writing, in lawful money of the United States of America and
in immediately available funds, the principal sum of Fifty Million
($50,000,000), or so much thereof as is advanced by the Bank to the Borrower
pursuant to Section 2.2 of the Five Year Credit Agreement dated April 30, 2007
among the Borrower, Citibank, N.A., as Agent (in such capacity, the “Agent”),
and various lenders, including the Bank (together with all amendments,
modifications and restatements thereof, the “Credit Agreement”), and to pay
interest on the principal balance of this Note outstanding from time to time at
the rate or rates determined pursuant to the Credit Agreement.

This Note is issued pursuant to, and is subject to,
the Credit Agreement, which provides (among other things) for the amount and
date of payments of principal and interest required hereunder, for the
acceleration of the maturity hereof upon the occurrence of an Event of Default
(as defined therein) and for the voluntary and mandatory prepayment
hereof.  This Note is the Swingline Note,
as defined in the Credit Agreement.

The Borrower shall pay all costs of collection,
including reasonable attorneys’ fees and legal expenses, if this Note is not
paid when due, whether or not legal proceedings are commenced.

Presentment or other demand for payment, notice of
dishonor and protest are expressly waived.

	
  

  	
  3M COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Its

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

 

 D-1

Exhibit E

CERTIFICATE OF COMPLIANCE

In accordance with the Five Year Credit Agreement dated as of April 30,
2007, by and among Citibank, N.A., as agent for the Banks, 3M Company (the “Borrower”)
and the Banks, as such Credit Agreement has been or may hereafter be amended
from time to time, attached are the consolidated financial statements for the
Borrower for the period ending                          ,
200    (the “Effective Date”).

I certify that the financial statements have been prepared in
accordance with generally accepted accounting principles applied on a basis
consistent with those applied in the annual financial statements.  I also certify that as of the Effective Date,
the Borrower is in compliance with the covenants stated in the Credit
Agreement.

I further certify that the Company’s EBITDA to Interest Ratio, as
defined in the Credit Agreement, as of the Effective Date is as set forth below:

	
  (a)

  	
  EBITDA

  	
   

  	
  $              

  	
   

  	
   

  
	
  (b)

  	
  Interest

  	
   

  	
  $              

  	
   

  	
   

  
	
  EBITDA to Interest Ratio [(a)/(b)]

  	
   

  	
   

  	
   

  	
      to 1

  
	
  Minimum Permitted EBITDA to Interest Ratio

  	
   

  	
   

  	
   

  	
  3.0 to
  1

  

 

Furthermore, I have no knowledge of the occurrence of an Event of
Default under the Credit Agreement or of any event which with notice of lapse
of time would constitute an Event of Default, except those specifically stated
below.

	
  

  	
  3M COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Its

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

 E-1

Exhibit F

Existing Letters of Credit

	
  Account Party

  	
   

  	
  Letter of

  Credit No.

  	
   

  	
  Current

  Face Amount

  	
   

  	
  Beneficiary

  	
   

  	
  Automatic

  Renewal

  	
   

  
	
  Seaside

  	
   

  	
  316010

  	
   

  	
  $

  	
  36,565,000

  	
   

  	
  Amer.
  Intl.

  Underwriters

  Overseas Ltd.

  	
   

  	
  Yes

  	
   

  
	
  Seaside

  	
   

  	
  353416

  	
   

  	
  $

  	
  41,600,000

  	
   

  	
  Old
  Republic

  	
   

  	
  Yes

  	
   

  
	
  Seaside

  	
   

  	
  353417

  	
   

  	
  $

  	
  5,000,000

  	
   

  	
  Old
  Republic

  	
   

  	
  Yes

  	
   

  
	
  Seaside

  	
   

  	
  353418

  	
   

  	
  $

  	
  300,000

  	
   

  	
  American
  Guarantee

  and Liability

  Company

  	
   

  	
  Yes

  	
   

  
	
  Seaside

  	
   

  	
  353419

  	
   

  	
  $

  	
  350,000

  	
   

  	
  American
  Home

  Assurance Company

  	
   

  	
  Yes

  	
   

  
	
  Borrower

  	
   

  	
  374761

  	
   

  	
  $

  	
  10,375,604

  	
   

  	
  Old
  Republic

  	
   

  	
  Yes

  	
   

  
	
  Seaside

  	
   

  	
  389120

  	
   

  	
  $

  	
  3,841,536

  	
   

  	
  Northwestern

  National

  	
   

  	
  Yes

  	
   

  
	
  Seaside

  	
   

  	
  590187

  	
   

  	
  $

  	
  9,909,864

  	
   

  	
  Gererali

  Ruckversischerung

  AG

  	
   

  	
  Yes

  	
   

  
	
  Seaside

  	
   

  	
  590691

  	
   

  	
  $

  	
  1,800,000

  	
   

  	
  American Life

  Insurance Co

  	
   

  	
  Yes

  	
   

  

 

 F-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00122-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00122-of-00352.parquet"}]]