Document:

Genentech, Inc. - Exhibit 10.21

EXHIBIT 10.21

 

 

 

 

COLLABORATIVE

AGREEMENT

AMONG

F. HOFFMANN-LA ROCHE LTD

HOFFMANN-LA ROCHE INC.

AND

GENENTECH, INC.

 

 

 

 

 

A G R E E M E N T

 

This agreement ("Agreement") is effective as of April 13, 2004 is among

F. Hoffmann-La Roche Ltd, Grenzacherstrasse 124, CH 4002 Basel, Switzerland ("Roche Basel");

Hoffmann-La Roche Inc., 340 Kingsland Street, Nutley, New Jersey 07110 ("Roche Nutley", collectively, Roche Basel and Roche Nutley are referred to as "ROCHE");

            and

Genentech, Inc., One DNA Way, South San Francisco, California 94080 USA ("GENENTECH")

WHEREAS, GENENTECH, and ROCHE have each established independent pharmaceutical research efforts.

WHEREAS, GENENTECH and ROCHE wish to potentially conduct joint research on molecules in areas of mutual interest, such as oncology, immunology and protein therapeutics, with any specific joint research to be mutually agreed to by them as provided herein;

WHEREAS, GENENTECH and ROCHE believe that sharing certain responsibilities for research, development, and commercialization with respect to select molecules will maximize opportunities to identify and develop such molecules in a more efficient manner than either company might accomplish independently;

WHEREAS, GENENTECH and ROCHE believe that this Agreement may provide an economic benefit to both of them and has the potential to hasten the commercialization of such molecules;

WHEREAS, Roche Holdings Ltd., a corporation organized under the laws of Switzerland, and GENENTECH concluded, effective September 8, 1990, a Mutual Confidentiality Agreement ("Mutual Confidentiality Agreement") covering the ongoing disclosure of all confidential scientific, financial, technical and business information of any nature in any tangible form of expression among GENENTECH on the one hand and Roche Holdings Ltd. and its subsidiaries and affiliates throughout the world, except GENENTECH, on the other hand.

NOW, THEREFORE, ROCHE AND GENENTECH AGREE AS FOLLOWS:

 

ARTICLE I - DEFINITIONS

Capitalized terms used in this Agreement and the Financial Appendix attached to this Agreement shall have the meanings set forth below: 

1.1     "Affiliate" shall mean --

a)     an organization greater than fifty percent (>50%) of the voting stock of which is owned and/or controlled directly or indirectly by either Party; 

b)     an organization which directly or indirectly owns and/or controls greater than fifty percent (>50%) of the voting stock of either Party; or

c)     an organization which is directly or indirectly under common control of either Party through common share holdings.

The foregoing notwithstanding, for the purposes of this Agreement, GENENTECH shall not be considered to be an Affiliate of ROCHE and ROCHE shall not be considered to be an Affiliate of GENENTECH.

 

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1.2     "Agreement" shall mean this Agreement, including all Appendices attached hereto, together with any valid amendments or modifications of the foregoing, and any agreements entered into in connection with this Agreement.

1.3     "Approval Application" or "Registration" shall mean the submission to an appropriate regulatory authority of an appropriate application seeking approval for the sale of a Product in any country.

1.4     "Clinical Requirements" shall mean the quantities of a Drug Candidate or Product which are required by a Party for the conduct of preclinical and clinical studies of that Drug Candidate or Product by that Party.  The term Clinical Requirements as used herein with respect to a Party shall also include the Clinical Requirements of that Party's permitted licensees, if any. 

1.5     "Commercial Requirements" shall mean the quantities of a Product which are required by a Party for or in connection with that Party's sale of that Product.  The term Commercial Requirements as used herein with respect to a Party shall also include the Commercial Requirements of that Party's permitted licensees or distributors if any.

1.6     "Development Costs" shall have the meaning set forth in the Financial Appendix to this Agreement.

1.7     "Drug Candidate" shall mean a Molecule resulting from the joint research efforts of the Parties pursuant to a Joint Research Plan, including all derivatives of that specific molecule as well as its precursors, that has been selected by the JRC and by each Party's internal selection process to enter Phase I Clinical Trials. 

1.8     "Effective Date" shall mean the date set forth in the introductory paragraph of this Agreement.

1.9     "Fully Burdened Manufacturing Cost" shall have the meaning set forth in the Financial Appendix to this Agreement.  

1.10     "Joint Collaboration" shall mean a specific joint effort agreed to by the Parties that is based on and governed by a specific Joint Research Plan focused on a Target agreed to by the Joint Research Committee in writing and is specifically designed to identify one or more Drug Candidates to that Target and to subsequently develop and commercialize a Product or Products containing or based on such Drug Candidate or Drug Candidates.

1.11    "Joint Development Plan" shall mean a written, comprehensive description of the prospective development efforts of each of the Parties to achieve Approval Application/Registration and subsequent approval for the sale of a Product in the Major Countries with respect to the Product which the Parties have agreed to in writing, and which shall be subsequently appended to this Agreement.

1.12    "Joint Research Plan" shall mean a written, comprehensive description of the previous and prospective research efforts of each of the Parties hereunder with respect to a specific Joint Collaboration for the identification of a Drug Candidate, which the Parties have each agreed to in writing.

1.13    "Know-How" shall mean any and all proprietary technical information, know-how, data, test results, knowledge, techniques, discoveries, inventions, specifications, designs, regulatory filings, and other information (whether or not patentable) which are now or hereafter during the term of this Agreement in the possession or control of a Party and are unique to a Drug Candidate or Product or to the development, manufacture, use or sale of a Drug Candidate or Product or which arise from or as a result of the efforts performed or costs borne by a Party under the Joint Research Plan or Joint Development Plan; provided, however, that Know-How shall not include any of the foregoing (i) which are now or until the identification of a Drug Candidate in the possession or control of a Party as a result of a license taken from a third party and which such Party is not free to transfer or license to the other Party or which such Party may transfer or license but such transfer or license would necessitate the payment of a fee or royalty to the licensor at the time of transfer or license or subsequently (unless provision is made hereunder for the payment of such fee or royalty) or (ii) which are known from publicly available information.

1.14    "Major Country" shall mean the US, Italy, France, United Kingdom, Germany or Japan.

 

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1.15    "Manufacturing Technology" shall mean all Know-How of a Party necessary to make or have made a Product in the manner that such Product is manufactured by that Party to produce Clinical Requirements and/or Commercial Requirements.

1.16    "Molecule" shall mean a molecule, such as a compound, antibody or peptide, which is selected for further research in a Joint Collaboration.

1.17    "Net Sales" shall have the meaning set forth in the Financial Appendix to this Agreement. 

1.18    "Operating Profits and Losses" shall have the meaning set forth in the Financial Appendix to this Agreement. 

1.19    "Party" shall mean GENENTECH or ROCHE and, when used in the plural, shall mean both of them.

1.20    "Patents" shall mean any and all patent applications and patents (including inventor's certificates) throughout the world, including any substitutions, extensions, reissues, renewals, divisions, continuations or continuations-in-part thereof or therefor which are now or hereafter during the term of this Agreement owned or controlled by a Party and which, but for the licenses granted herein, would be infringed by the development, manufacture, use or sale of a Drug Candidate or a Product; provided, however, that Patents shall not include any of the foregoing which are now owned or controlled by a Party as a result of a license taken from a third party and which such Party is not free to transfer or license to the other Party or which the Party may transfer or license but such transfer or license would necessitate the payment of a fee or royalty at the time of transfer or license or subsequently (unless provision is made hereunder for the payment of such fee or royalty) to the licensor.  

1.21    "Phase I Clinical Trial" shall mean a controlled study in humans of the safety of a Product for a specific indication or indications in healthy volunteers or patients having the disease or condition for which the Product is being studied.

1.22    "Phase II Clinical Trial" shall mean a controlled study in humans of both the safety and efficacy of a Product for a specific indication or indications in patients having the disease or condition for which the Product is being studied.

1.23    "Phase III Clinical Trial" shall mean a controlled study in humans of the efficacy and safety of a Product which is prospectively designed to demonstrate statistically whether the Product is effective for use in a particular indication in a manner sufficient to obtain regulatory approval to market that Product in one or more particular countries and, where a Joint Development Committee exists for a Product, a study which a Joint Development Committee designates as a Phase III Clinical Trial. 

1.24    "Product" shall mean any pharmaceutical formulation containing a Drug Candidate. The term Product shall include: (a) all bulk forms of the active ingredient of the Product ("Bulk Product"); (b) all forms of the Product which are finished but not packaged ("Finished Product"); or (c) finished, packaged final dosage units of Product ("Final Product").

1.25    "Responsible Party" shall mean that Party, pursuant to Section 7.1, which is responsible for the development of a manufacturing process and facilities for a Drug Candidate and Product for a particular Joint Collaboration.

1.26    "ROW" shall mean all countries of the world except the US. 

1.27    "Target" shall mean a molecule or variants of that molecule to which a Drug Candidate or Product, as its primary mechanism of action, physically binds to or interacts with.

1.28    "Territory" shall mean the US and ROW.

1.29    "US" shall mean the United States of America, its territories and possessions.

 

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Other capitalized terms that are used in this Agreement and not defined above are defined in the Financial Appendix to this Agreement or as follows:  

	
Claims
	
Section 12.2

	
Decision Point
	
Section 3.9

	
Genentech  Opt-in Option 1
	
Section 4.3c(b)

	
Genentech  Opt-in Option 2
	
Section 4.3c(c)

	
Information
	
Section 10.1

	
JCC 
	
Section 5.7

	
JDC
	
Section 4.4a

	
JFC
	
Section 6.1

	
JRC
	
Section 3.1

	
Lead Party
	
Section 5.1

	
Licensee 
	
Section 8.1

	
Licensor
	
Section 8.1

	
Management Committee
	
Section 2.1

	
Non-terminating Party
	
Section 13.3

	
Opt-out Option
	
Section 4.3a(a)

	
Principal Party 
	
Section 11.2

	
Roche Opt-in Option 1
	
Section 4.3b(b)

	
Roche Opt-in Option 2
	
Section 4.3b(c)

	
Terminating Party
	
Section 13.3

ARTICLE II - MANAGEMENT OF THE COLLABORATION

	
2.1
	
Management Committee.  Within sixty (60) days after the Effective Date, the Parties shall form a management committee comprised of three (3) representatives from ROCHE, including initially its Head of Global Research, and three (3) representatives from GENENTECH, including initially its Head of Research ("Management Committee").  The Management Committee shall meet at least once per year to review the research, development and commercialization status of Molecules, Drug Candidates, and Products.  The Management Committee shall be responsible for reviewing and approving the worldwide budget (including but not limited to worldwide inventory levels) submitted by the joint research committee ("JRC"), joint development committee ("JDC") and/or joint commercialization committee ("JCC") (as applicable).  The Management Committee shall have the authority to create other committees as needed and oversee the activities of all other committees.  Each Party shall be free to change any or all of its representation effective immediately upon written notice to the other Party.  All decisions of the Management Committee shall require consensus of the representatives of the Committee to be effective, provided, however, that in cases where such consensus cannot be reached, the matter will be referred to a senior officer at ROCHE and a senior officer at GENENTECH for decision.  

	 	 
	
2.2
	
Other Committees.  Initially, the Parties shall form a JRC as set forth in Section 3.1 below and a joint finance committee ("JFC") as set forth in Section 6.1 below.  Thereafter, as the need arises, the Management Committee may form a JDC as set forth in Section 4.4a below and a JCC as set forth in Section 5.7 below.

	 	 
	
2.3
	
Review of Status.  From time to time, the Parties shall review the committee structure and composition set forth in this Agreement with a view towards simplifying the committee system where feasible.

 

ARTICLE III - RESEARCH AND DEVELOPMENT UP TO PHASE I

3.1     Creation of Joint Research Committee.  The Parties shall form a JRC consisting of three (3) representatives of each Party.  Each Party shall notify the other Party within thirty (30) days after the Effective Date of its initial appointees to the JRC.  Each Party shall be free to change any or all of its representatives effective immediately

 

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upon written notice to the other Party.  Upon three (3) months prior written notice to the other Party, either Party can terminate the Joint Research Committee and any prospective duties of the Joint Research Committee.  Such termination shall not terminate any Joint Research Plan then in effect.

3.2     Meetings.  The JRC shall meet periodically as the Parties may agree.  In addition, if the JRC has not met for a period of more than six (6) months, then either Party may call a meeting of the JRC on thirty (30) days' prior written notice to the other Party.  The sites of the meetings shall alternate between the principal research sites of the Parties unless otherwise agreed.  The Party hosting the meeting shall designate the chairperson for that meeting, and the Party visiting the other shall designate the secretary for that meeting.  By mutual agreement of the Parties, the JRC may meet by video-conference or use other means of conducting joint meetings. 

3.3     Decision-making.  All decisions and recommendations of the JRC shall require consensus of the representatives of the Committee to be effective.  If consensus cannot be reached, GENENTECH shall have the final decision-making authority with respect to whether or not to conduct research efforts to be performed by GENENTECH, and ROCHE shall have the final decision-making authority with respect to whether or not to conduct research efforts to be performed by ROCHE. 

3.4     Duties of the JRC.  The Parties will disclose, to the extent each so unilaterally determines, to each other in confidence through the JRC their research efforts in oncology, immunology and protein therapeutics for the purpose of identifying projects for potential collaboration.  The JRC shall direct all research efforts pursuant to this Agreement where the Parties have agreed to a Joint Collaboration.  The JRC shall establish a Joint Research Plan for each Joint Collaboration.  It shall be responsible for making any other decisions it is required to make pursuant to this Agreement and making recommendations to the Parties regarding other decisions necessary or appropriate to implement research efforts under a Joint Research Plan.  

3.5     Joint Research Plan.  The purpose of a Joint Research Plan is to identify and select a Drug Candidate for pre-clinical and clinical development.  A Joint Research Plan should attempt to avoid unnecessary duplication by the Parties, maximize utilization of the resources of the Parties, and appropriately allocate responsibilities and contributions of the Parties.  The Parties shall share equally the total costs incurred in implementing the responsibilities and obligations under a Joint Research Plan provided that such costs have been mutually agreed to in advance.  The JRC and JFC shall jointly prepare the budget for the Joint Research Plan.  Consistent with the above principles, a Joint Research Plan should include --

            (a)    identification of the prior efforts of the Parties related to the subject of the particular Joint Collaboration;

            (b)    identification of specific tasks for each of the Parties;

            (c)    identification of resource requirements of the Joint Research Plan and allocation of those resources between the Parties; and

            (d)    timelines for each stage of the process of identifying a Drug Candidate. 

From time to time, the JRC may agree to update and amend a Joint Research Plan by changing its scope or the responsibilities of the Parties and in such case such amendment shall be effective only if committed to writing and signed by both Parties.  

3.6     Exclusivity.  If a Target is selected for research by the JRC, then during the term of the Joint Research Plan neither Party shall conduct research activities utilizing such Target other than those activities set forth in the Joint Research Plan.  If a Party terminates its research efforts under a Joint Research Plan pursuant to Section 3.8, then that Party shall not conduct research on that Target for two (2) years after such termination.  Notwithstanding the foregoing, if a Party terminates its research efforts under a Joint Research Plan pursuant to Section 3.8, the previous sentence shall not restrict either Party from licensing from a third party any molecule falling within the limitations set forth therein, provided that such molecule is the subject of human clinical trials at the time of licensing.

 

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3.7     Outside Collaborations.  If a Party wants to enter into an agreement with a third party concerning a Molecule, a Drug Candidate or a Product, then such Party shall consult with the other Party to see if the other Party has any reasonable objection to the agreement.  If the other Party has a reasonable objection to the agreement, no such agreement shall be concluded until the objections are resolved.  Neither Party, without consulting with and obtaining the written consent of the other Party, shall enter into an agreement with a third party concerning a Molecule, a Drug Candidate or a Product which results in any additional royalty required to be paid by the other Party with respect to such Molecule, Drug Candidate or Product or which creates a material encumbrance on the rights of the other Party which are granted in this Agreement with respect to such Molecule, Drug Candidate or a Product.  Nothing herein shall be construed to prevent a Party from providing to any third party in any manner it chooses, any materials or reagents that result from its own efforts and were not received from the other Party.

3.8     Termination of Research Efforts.  

      (a)    If one Party wishes to cease research efforts with respect to a Target, then it may do so.  Such Party shall either (i) share equally all of the mutually agreed to costs in implementing the responsibilities and obligations of the Joint Research Plan for such Target, in which case the Joint Research Plan shall remain in effect, and retain a right to receive a royalty of one percent (1%) of worldwide Net Sales of products derived from Molecules identified under such Joint Research Plan or (ii) discontinue sharing costs in implementing the responsibilities and obligations under the Joint Research Plan for such Target, in which case the Joint Research Plan shall no longer remain in effect, and forfeit rights to receive remuneration under this Agreement.  

      (b)    If a Party elects to proceed under Section 3.8(a)(i) above, then the research efforts that would have been performed by the Party that ceases to perform such research efforts may be performed by the Party actively fulfilling its obligations under the Joint Research Plan or by another party at the active Party's direction, provided that the total costs for the Joint Research Plan shall remain the same as mutually agreed to as set forth in Sections 3.5 and 2.1.  In addition, the active Party shall have the sole right, but not the obligation, to conduct, either itself or together with any third party, the development and commercialization of the Molecules that were identified under such Joint Research Plan (and products derived therefrom) in all Territories and shall bear all prospective costs and expenses and all profits and losses associated with such development and commercialization, subject to payment of the royalty set forth in Section 3.8(a)(i) above.  The obligation to pay such royalties (on a product-by-product and country-by-country basis) shall terminate fifteen (15) years after the first commercial sale of such product in such country.

      (c)    If a Party elects to proceed under Section 3.8(a)(ii) above, then the other Party shall have the sole right, but not the obligation, to conduct, either itself or together with any third party, the research, development and commercialization of the Molecules that were identified under such Joint Research Plan (and products derived therefrom) in all Territories and shall bear all prospective costs and expenses and all profits and losses associated with such research, development and commercialization.  

      (d)    For clarity, if a Party elects to cease research efforts with respect to a Target under this Section 3.8, the following provisions shall not apply to such Target and Molecules identified under such Joint Research Plan: Sections 3.9, 6.1 through 6.5 and Articles IV, V, VII and IX.

3.9     Decision Point.  Prior to the dosing of the first patient in a Phase I Clinical Trial, the Parties shall meet to discuss in good faith whether a Molecule should be designated a Drug Candidate and how such Drug Candidate shall be developed ("Decision Point").  The Parties agree that unless determined otherwise, each Drug Candidate shall be subject to Joint Development where both Genentech and Roche share equally in the development efforts and Development Costs.  In lieu of Joint Development, the Parties may agree to: (1) Genentech Development, where GENENTECH is fully responsible for all development efforts and Development Costs, subject to ROCHE opt-in; or (2) Roche Development, where ROCHE is fully responsible for all development efforts and Development Costs, subject to GENENTECH opt-in.

 

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ARTICLE IVA - JOINT DEVELOPMENT 

4.1a    Decision for Joint Development.  If the Parties agree to jointly develop a Drug Candidate, then the provisions of this Article IVA shall apply.

4.2a    Joint Development.  Subject to Article 4.3a below, the Parties will undertake using commercially reasonable efforts to develop a Drug Candidate, including performing preclinical and clinical research necessary to seek appropriate regulatory marketing approval or registration of a Product based on the Drug Candidate.  The Parties shall share equally in the worldwide Development Costs, including the development of a manufacturing process for the Drug Candidate.

4.3a    Opt-out Option. 

      (a)    At any time until the approval of the first Approval Application/ Registration in a Major Country, each Party shall have the option ("Opt-out Option") to decline to participate in future development and commercialization efforts and Operating Profit and Loss sharing for a particular Drug Candidate.  To exercise its Opt-out Option, the exercising Party must provide written notice of such to the other Party at least six (6) months in advance of such exercise if a Phase I Clinical Trial, Phase II Clinical Trial or Phase III Clinical Trial is then underway or otherwise provide written notice of such to the other Party at least one (1) month in advance of such exercise.  The Opt-out Party shall be responsible for its portion of Development Costs through the end of the month in which the Opt-out Option becomes effective.  If one Party exercises its Opt-out Option, then the other Party shall have the sole right, but not the obligation, to conduct, either itself or together with any third party, the development and commercialization of the Drug Candidate and all Products resulting therefrom in the entire Territory and shall bear all prospective costs and expenses and all profits and losses associated with such development and commercialization except that with respect to any development effort such as a clinical study which has been agreed to by the JDC prior to the exercise of a Party's Opt-out Option and for which a binding contractual commitment has been entered into with a third Party, the Parties shall share such costs in accordance with Section 4.2a above.  Upon a Party's exercise of its Opt-out Option with respect to a Drug Candidate, the Joint Development Plan for that Drug Candidate shall cease to be in effect.

      (b)    If both Parties exercise their respective Opt-out Option for a particular Drug Candidate and neither Party desires to pursue the development or commercialization of such Drug Candidate and Products resulting therefrom, then the Parties shall cooperate in seeking one or more suitable third parties to develop and commercialize such Drug Candidate and Products on terms and conditions mutually agreeable to both Parties and under which both Parties share the economic benefits of such an arrangement in the same proportion as they contributed to the worldwide Development Costs.  Thus, if both Parties simultaneously exercise their Opt-out Option for a particular Drug Candidate, then the Parties would share equally the economic benefits derived from such an arrangement.

      (c)    If a Party exercises its Opt-out Option for a particular Drug Candidate and the other Party does not exercise its Opt-out Option for that particular Drug Candidate, then the Party exercising its Opt-out Option shall not develop or have developed (i) the Drug Candidate during the period that such Drug Candidate is actively being developed or commercialized by the other Party, (ii) any Molecule that was the subject of such Joint Collaboration during the period that such Drug Candidate is actively being developed or commercialized by the other Party, (iii) any molecule that is derived from a Molecule of such Joint Collaboration during the period that such Drug Candidate is actively being developed or commercialized by the other Party, or (iv) any molecule whose primary mechanism of action is directed at the Target that was the subject of the Joint Collaboration for a period of one (1) year following the exercise of that Opt-out Option.  Notwithstanding the above, if a Party exercises its Opt-out Option for a particular Drug Candidate, then either Party may license from a third party any molecule with the characteristics set forth in clause (iv) above (and develop such molecule), provided that such molecule is the subject of human clinical trials at the time of licensing.  For clarity, the restrictions under this Section 4.3a(c) shall terminate upon termination of the Agreement in its entirety.

4.4a    Creation of Joint Development Committee.  Upon agreement to jointly develop Drug Candidate, unless either Party exercises its Opt-out Option, the Management Committee shall create a JDC for that Joint Collaboration which 

 

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shall consist of three (3) representatives of each Party.  Each Party promptly shall notify the other Party of its initial appointees to that JDC.  Each Party shall be free to change any or all of its representatives effective upon written notice to the other Party.

4.5a    Meetings.  The JDC shall meet regularly as it shall determine, but at least three (3) times per year, to discuss development of the Drug Candidate.  The sites of the meetings shall alternate between the principal offices of the Parties unless otherwise agreed.  The Party hosting the meeting shall designate the chairperson for that meeting and the Party visiting the other shall designate the secretary for that meeting.  By mutual agreement of the Parties, meetings of the JDC may be held by video-conference or by other means of conducting joint meetings. 

4.6a    Decision-making.  All decisions of a JDC shall be by consensus of the Committee representatives; provided, however, that in cases where such consensus cannot be reached, the matter will be referred to the head of the Development organization at ROCHE and the head of the Development organization at GENENTECH for decision.  Notwithstanding the foregoing, under certain circumstances set forth in Section 5.2, one Party shall have the tie-breaking decisional authority on the JDC as set forth therein.

4.7a    Duties of a Joint Development Committee.  A JDC shall be responsible for directing and coordinating all development efforts relating to Drug Candidate and Product, including regulatory filings, with respect to a specific Joint Collaboration.  A JDC shall be responsible for making any other decisions it is required to make pursuant to this Agreement and making recommendations to the Parties regarding other decisions necessary or appropriate to implement development efforts for a specific Drug Candidate and resulting Products.  If a Party desires to pursue an indication for a Drug Candidate or Product in addition to that which is decided by the JDC, then the JDC shall refer this matter to the Management Committee to determine conditions under which a Party may pursue such indication.

4.8a    Joint Development Plan.  A JDC shall create a Joint Development Plan within two (2) months after the Committee's creation.  The purpose of the Joint Development Plan is to provide for the development of a Product for which regulatory marketing approval will be sought.  The Joint Development Plan should avoid unnecessary duplication by the Parties in any activity and have a goal of an appropriate allocation of responsibilities in light of the specific form of Joint Collaboration involved.  Consistent with the above principles, the Joint Development Plan should include --

            (a)    identification of specific tasks for each of the Parties;

            (b)    identification of resource requirements of the Joint Development Plan and allocation of those resources between the Parties, including, at a minimum, five (5) year financial budgets as detailed in the Financial Appendix; and

            (c)    timelines for each stage of preclinical and clinical investigation and other development activities of the Product. 

From time to time, a JDC may agree upon further investigations or other development efforts to be undertaken by the Parties pursuant to this Agreement, including the scope and procedures for such investigations and the responsibilities of each Party with respect to such investigations, and that JDC shall update and amend the Joint Development Plan involved in writing as necessary.  

 

ARTICLE IVB -- GENENTECH DEVELOPMENT 

4.1b    Decision for Genentech Development.  If the Parties agree that GENENTECH shall develop a Drug Candidate, then the provisions of this Article IVB shall apply.

4.2b    Genentech Development.  Subject to Article 4.3b below, GENENTECH will use commercially reasonable efforts to develop a Drug Candidate which has been approved as such by both Parties, including performing pre-clinical and clinical research necessary to seek appropriate regulatory marketing approval or registration of a 

 

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Product based on the Drug Candidate.  GENENTECH shall bear financial responsibility for worldwide Development Costs, including the development of a manufacturing process.  GENENTECH shall provide ROCHE with reports outlining the results of each completed material pre-clinical and clinical study, and an analysis of such results.  These reports shall be forwarded to ROCHE within thirty (30) days after the relevant study is completed and analyzed.

4.3b    Opt-in Option. 

      (a)    Within sixty (60) days after each of the successful completion of the first Phase II Clinical Trial and successful completion of the first Phase III Clinical Trial for a particular Drug Candidate, GENENTECH shall notify ROCHE of such completion.  In connection with such notification, GENENTECH shall provide ROCHE with all relevant information regarding the Drug Candidate, including the results of pre-clinical and clinical studies concluded to that date, third party rights (patent rights and royalty obligations) of which Genentech is aware and manufacturing process and cost information to the extent not previous provided to ROCHE and the amount of Development Costs for that Drug Candidate incurred by GENENTECH between the Decision Point and that date.  

      (b)    At any time until ninety (90) days after receipt by ROCHE of all the information set forth in Section 4.3b(a) above for a given Drug Candidate that has just successfully completed the first Phase II Clinical Trial, ROCHE shall have the option ("Roche Opt-in Option 1") to elect to participate in future development and commercialization efforts and Operating Profit and Loss sharing for the given Drug Candidate.  To exercise Roche Opt-in Option 1, ROCHE must provide written notice to GENENTECH within the ninety (90) day period after receipt of the information set forth in Section 4.3b(a) above.  If ROCHE exercises Roche Opt-in Option 1, then ROCHE and GENENTECH shall share equally in development efforts and shall share equally Development Costs as set forth in Section 4.2a above beginning on the first day of the month in which Roche Opt-in Option 1 becomes effective.  In consideration for exercising Roche Opt-in Option 1, ROCHE shall reimburse to GENENTECH (a) sixty-two and one-half percent (62.5%) of the unreimbursed Development Costs incurred by GENENTECH between the Decision Point and the first day of the month in which Roche Opt-in Option 1 becomes effective and (b) interest on fifty percent (50%) of all such unreimbursed Development Costs incurred by GENENTECH, calculated at LIBOR plus two percent (2%), compounded on an annual basis, through the date of the exercise of Roche Opt-in Option 1, collectively payable within thirty (30) days after ROCHE receives an accounting from GENENTECH for such Development Costs.

      (c)     At any time until ninety (90) days after receipt by ROCHE of all the information set forth in Section 4.3b(a) above for a given Drug Candidate that has just successfully completed the first Phase III Clinical Trial, ROCHE shall have the option ("Roche Opt-in Option 2") to elect to participate in future development and commercialization efforts and Operating Profit and Loss sharing for the given Drug Candidate.  To exercise Roche Opt-in Option 2, ROCHE must provide written notice to GENENTECH within the ninety (90) day period after receipt of the information set forth in Section 4.3b(a) above.  If ROCHE exercises Roche Opt-in Option 2, then ROCHE and GENENTECH shall share equally in development efforts and Development Costs as set forth in Section IVA above beginning on the first day of the month in which ROCHE exercises Roche Opt-in Option 2.  In consideration for exercising Roche Opt-in Option 2, ROCHE shall reimburse to GENENTECH (a) seventy-five percent (75%) of the unreimbursed Development Costs incurred by GENENTECH between the Decision Point and the first day of the month in which ROCHE exercises Roche Opt-in Option 2, and (b) interest on fifty percent (50%) of all such unreimbursed Development Costs incurred by GENENTECH, calculated at LIBOR plus two percent (2%), compounded on an annual basis, through the date of exercise of Roche Opt-in Option 2, collectively payable within thirty (30) days after ROCHE receives an accounting from GENENTECH for such Development Costs.

4.4b    Creation of Joint Development Committee.  As soon as possible after ROCHE exercises Roche Opt-in Option 1 or Roche Opt-in Option 2, the Parties shall create a JDC as provided for in Section 4.4a.  The JDC shall meet as provided for in Section 4.5a.  Decisions shall be made as provided for in Section 4.6a.  The duties of the JDC shall be as provided for in Section 4.7a, using a Joint Development Plan as provided for under Section 4.8a.  For all activities contemplated under Article IVB involving the JDC, the activities described in Article IVA shall be modified to reflect the state of development at the time the Opt-in was exercised by ROCHE.  

 

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ARTICLE IVC - ROCHE DEVELOPMENT 

4.1c    Decision for Roche Development.  If the Parties agree that ROCHE shall develop a Drug Candidate, then the provisions of this Article IVC shall apply.

4.2c    Roche Development.  Subject to Article 4.3c below, ROCHE will use commercially reasonable efforts to develop a Drug Candidate which has been approved as such by both Parties, including performing preclinical and clinical research necessary to seek appropriate regulatory marketing approval or registration of a Product based on the Drug Candidate.  ROCHE shall bear financial responsibility for worldwide Development Costs, including the development of a manufacturing process.  ROCHE shall provide GENENTECH with reports outlining the results of each completed material pre-clinical and clinical study, and an analysis of such results.  These reports shall be forwarded to GENENTECH within thirty (30) days after the relevant study is completed and analyzed.

4.3c    Opt-in Option. 

      (a)    Within sixty (60) days after each of the successful completion of the first Phase II Clinical Trial and the successful completion of the first Phase III Clinical Trial for a particular Drug Candidate, ROCHE shall notify GENENTECH of such completion.  In connection with such notification, ROCHE shall provide GENENTECH with all relevant information regarding the Drug Candidate, including the results of pre-clinical and clinical studies concluded to that date third party rights (patent rights and royalty obligations) of which ROCHE is aware and manufacturing process and cost information to the extent not previously provided to GENENTECH and the amount of Development Costs for that Drug Candidate incurred by ROCHE between the Decision Point and that date.

      (b)    At any time until ninety (90) days after receipt by GENENTECH of all the information set forth in Section 4.3c(a) above for a given Drug Candidate that has just successfully completed the first Phase II Clinical Trial, GENENTECH shall have the option ("Genentech Opt-in Option 1") to elect to participate in future development and commercialization efforts and Operating Profit and Loss sharing for the given Drug Candidate.  To exercise Genentech Opt-in Option 1, GENENTECH must provide written notice to ROCHE within the ninety (90) day period after receipt of the information set forth in Section 4.3c(a) above.  If GENENTECH exercises Genentech Opt-in Option 1, then GENENTECH and ROCHE shall share equally in development efforts and shall share equally in the Development Costs as set forth in Section 4.2a above beginning on the first day of the month in which Genentech Opt-in Option 1 becomes effective.  In consideration for exercising Opt-in Option 1, GENENTECH shall reimburse to ROCHE (a) sixty-two and one-half percent (62.5%) of the unreimbursed Development Costs incurred by ROCHE between the Decision Point and the first day of the month in which Genentech Opt-in Option 1 becomes effective and (b) interest on fifty percent (50%) of all such unreimbursed Development Costs incurred by ROCHE, calculated at LIBOR plus two percent (2%), compounded on an annual basis, through the date of the exercise of Genentech Opt-in Option 1, collectively payable within thirty (30) days after GENENTECH receives an accounting from ROCHE for such Development Costs.

      (c)    At any time until ninety (90) days after receipt by GENENTECH of all the information set forth in Section 4.3c(a) above for a given Drug Candidate that has just successfully completed the first Phase III Clinical Trial, GENENTECH shall have the option ("Genentech Opt-in Option 2") to elect to participate in future development and commercialization efforts and Operating Profit and Loss sharing for the given Drug Candidate.  To exercise Genentech Opt-in Option 2, GENENTECH must provide written notice to ROCHE within the ninety (90) day period after receipt of the information set forth in Section 3.3b(a) above.  If GENENTECH exercises Genentech Opt-in Option 2, then GENENTECH and ROCHE shall share equally in development efforts and Development Costs as set forth in Section IVA above beginning on the first day of the month in which GENENTECH exercises Genentech Opt-in Option 2.  In consideration for exercising Genentech Opt-in Option 2, GENENTECH shall reimburse to ROCHE (a) seventy-five percent (75%) of the unreimbursed Development Costs incurred by ROCHE between the Decision Point and the first day of the month in which GENENTECH exercises Opt-in Option 2, and (b) interest on fifty percent (50%) of all such unreimbursed Development Costs incurred by ROCHE, calculated at LIBOR plus two percent (2%), compounded on an annual basis, through the date of exercise of Genentech Opt-in Option 2, collectively payable within thirty (30) days after GENENTECH receives an accounting from ROCHE for such Development Costs.

 

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4.4c    Creation of Joint Development Committee.  As soon as possible after GENENTECH exercises Genentech Opt-in Option 1 or Genentech Opt-in Option 2, the Management Committee shall create a JDC as provided for in Section 4.4a.  The JDC shall meet as provided for in Section 4.5a.  Decisions shall be made as provided for in Section 4.6a.  The duties of the JDC shall be as provided for in Section 4.7a, using a Joint Development Plan as provided for under Section 4.8a.  For all activities contemplated under Article IVC involving the JDC, the activities describe in Article IVA shall be modified to reflect the state of development at the time the Opt-in was exercised by GENENTECH.  

 

ARTICLE V - MARKETING, PROMOTION, AND SALES

5.1     Marketing and Sales Scenarios.  Five possible marketing, promotion and sales scenarios can arise depending upon whether development is made pursuant to Article IVA or Article IVB or Article IVC, and whether an Opt-in Option has been exercised in the case of Article IVB and Article IVC.  Scenario 1 is where development proceeded under Article IVA (and neither Party has exercised its Opt-out Option).  Scenario 2 is where development proceeded under Article IVB and ROCHE has not opted in. Scenario 3 is where development proceeded under Article IVB and ROCHE has opted in. Scenario 4 is where development proceeded under Article IVC and GENENTECH has not opted in.  Scenario 5 is where development proceeded under Article IVC and GENENTECH has opted in.  In all scenarios, the Party that markets the Product in a given country is fully responsible for all marketing and sales activity in such country, except that if the Parties have co-promotion rights in the US, their respective responsibilities shall be as set forth in Appendix B (the Party booking sales in the US is referred to in such Appendix as the "Lead Party").  

5.2     Scenario 1.  Under Scenario 1, GENENTECH has the first right to book sales in the US for a particular Product, to have the tie-breaking decisional authority on the JDC and JCC with respect to developing and commercializing that Product in the US, and to share Operating Profits and Losses in the US in the ratio of 48:52 (GENENTECH:ROCHE) for the first Product and 49:51 (GENENTECH:ROCHE) for each Product thereafter.  In order to exercise this right, Genentech shall provide written notice to Roche of such exercise at any time prior to thirty (30) days after completion of the first Phase II Clinical Trial utilizing that Product.  If GENENTECH does not exercise this right, then ROCHE shall have the next right to book sales in the US for such Product, to have the tie-breaking decisional authority on the JDC and JCC with respect to developing and commercializing that Product in the US, and share Operating Profits and Losses in the US in the ratio of 48:52 (ROCHE:GENENTECH) for the first Product and 49:51 (ROCHE:GENENTECH) for each Product thereafter.  In order to exercise such right, ROCHE shall provide written notice to GENENTECH of such exercise within sixty (60) days after completion of the first Phase II Clinical Trial utilizing that Product.  If neither Party wants to exercise its right set forth under this Section 5.2 to book sales at the applicable ratio and to have certain tie-breaking decisional authority, then the Parties shall use a random selection process to determine which Party will book sales in the US.  In that case, the Parties shall make decisions by consensus on the JDC and JCC with respect to developing and commercializing that Product in the US and shall share Operating Profits and Losses in the US in the ratio of 50:50.  Thereafter, for the next such Product for which neither Party exercises its right hereunder with respect to booking of US sales and decisional authority, the Party which did not book sales for the preceding similarly situated Product shall book US sales.  For each such similarly situated Product thereafter, the Parties shall alternate booking of US sales.  At the request of a Party, the Parties shall discuss and review whether one Party has disproportionately benefited from the selection process described in the previous four sentences and if so, the Parties shall consider in good faith appropriate adjustments so that the Parties are treated equitably.  In the US, the Parties co-promote all Products.  In the ROW, ROCHE markets, sells, promotes and books sales for all Products.  The Parties shall share Operating Profits and Losses in the ROW in the ratio of 50:50.

5.3     Scenario 2.  Under Scenario 2, GENENTECH markets, sells, promotes and books sales for Products in the US and ROW.

5.4     Scenario 3.  Under Scenario 3, in the US, GENENTECH books sales and the Parties co-promote all Products.  In the ROW, ROCHE markets, sells, promotes and books sales for all Products.

 

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5.5     Scenario 4.  Under Scenario 4, ROCHE markets, sells, promotes and books sales for Products in the US and ROW.

5.6     Scenario 5.  Under Scenario 5, in the US, ROCHE books sales and the Parties co-promote all Products.  In the ROW, ROCHE markets, sells, promotes and books sales for all Products.

5.7     Joint Commercialization Committee.  (a) Under Scenarios 1, 3 and 5 above, a JCC shall be established by the Management Committee for the purpose of overseeing and managing the worldwide commercialization of a Product.  The JCC's responsibilities shall include: (i) developing appropriate global marketing plans for the Product, including appropriate budgets associated with such plans; (ii) developing global positioning and marketing strategies for a Product; (iii) reviewing and approving Product trade dress; (iv) approving the pricing of a Product in all countries; and (v) developing strategies with respect to, and planning and coordinating, external communications by the Parties with respect to commercialization of a Product.  

      (b)    The JCC shall have an equal number of members appointed by each Party.  The JCC shall initially be comprised of three (3) members from each Party.  Each Party shall notify the other Party of any change in the identities of its appointed members prior to making any such change.

      (c)    In general, all decisions of the JCC shall be made by consensus of the Committee representatives; provided, however, that in cases where such consensus cannot be reached, the matter will be referred to the head of the Commercial organization at ROCHE and the head of the Commercial organization at GENENTECH for decision (or their respective designees).  Notwithstanding the foregoing, under Scenario 1, under certain circumstances set forth in Section 5.2, one Party shall have the tie-breaking decisional authority on the JCC as set forth therein.

 

ARTICLE VI - PROFIT AND LOSS SHARING; ROYALTIES

6.1     Joint Finance Committee.  Within sixty (60) days after the Effective Date, the Parties shall form a JFC comprised of two (2) representatives from ROCHE and two (2) representatives from GENENTECH. The JFC shall meet on an as needed basis to review and discuss financial activities and issues relating to this Agreement. 

6.2     Profit and Loss Sharing.  Under Scenario 1 (except if a Party has exercised its Opt-out Option or the Parties have agreed otherwise), the Parties agree to share all Operating Profits and Losses in the manner set forth in Section 5.2 above.  Under Scenario 3 and Scenario 5, the Parties agree to share all worldwide Operating Profits and Losses on a 50:50 basis.  The definitions principles and mechanisms for the sharing of Operating Profits and Losses are set forth in the Financial Appendix attached hereto as Appendix A and incorporated by reference.  The term of such sharing of Operating Profits and Losses for a particular Product shall continue so long as that Product is sold anywhere in the world.  Under Scenario 1, if a Party has exercised its Opt-out Option, then it shall be entitled to royalties pursuant to Section 6.4.

6.3     Royalties.  Under Scenario 2 and Scenario 4, the Party that markets the Product shall pay to the other Party a royalty on worldwide Net Sales of one percent (1%) on such Product.

6.4     Royalties after Exercise of Opt-out Option.  If a Party has exercised its Opt-out Option and the other Party has not exercised its Opt-out Option for a particular Drug Candidate or Product resulting therefrom, then the Party that 

 

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markets such resulting Product shall pay to the Party that exercised its Opt-out Option a royalty on worldwide Net Sales of such Product as follows:

	 	
If Opt-out Occurs
	 	
Royalty

	 	
Before administration of Drug

Candidate to a human

	 	
1%

	 	
From administration of Drug

Candidate to a human

until initiation of first

Phase III Clinical Trial

	 	
3%

	 	
From initiation of first Phase III

Clinical Trial through first Approval

Application/Registration
	 	
5%

6.5     Term of Royalties.  On a Product-by Product and country-by-country basis, the obligation to pay royalties under Sections 6.3 and 6.4 above with respect to a Product shall terminate fifteen (15) years after the first commercial sale of such Product in such country.

6.6     Payment of Third Party Royalties.  For clarity, without limiting the foregoing, the Party that owes royalties to the other Party under Section 3.8(a)(i), 6.3 or 6.4 shall also be financially responsible for any and all applicable third party royalties or license fees for the applicable Product for which it has sole marketing rights.  

6.7     Restrictions on Transfer of Funds.  

      (a)    If a Party ships a Product into a country for sale in that country and, at the time of shipment, such country has legal restrictions which prevent the prompt remittance of part or all of the royalty on Net Sales of the Product in that country, such Party shall be obligated to make the royalty payments in immediately available funds to such account as the other Party shall designate.

      (b)    If a Party ships a Product into a country for sale in that country and such country subsequently imposes legal restrictions which prevents the prompt remittance of part or all of the royalty on Net Sales of that shipment of the Product in that country, such Party shall be obligated to --

            (i)    pay such portion of the royalty payments as permitted by the law of the country in immediately available funds to such account as the other Party shall designate, and

            (ii)    pay the remainder of such royalty payments to such account as the other Party shall designate in a bank in such country.

In event of (ii) above, the Parties shall discuss in good faith the best means of utilizing the funds on deposit in such country.  Shipments of Product into such country after the imposition of legal restrictions which prevents the prompt remittance of part or all of the royalty on Net Sales shall be subject to subsection (a) of this Section 6.7.

6.8     Records.  A Party making royalty payments agrees to keep for at least three (3) years, records of all sales of Products in each country in sufficient detail to permit the other Party to confirm the accuracy of the calculations with respect to payment of royalties.  Once a year, at the request and the expense of the Party requesting the audit and upon at least ten (10) days' prior written notice, the receiving Party will elect whether to have the other Party's officially appointed world-wide auditor or another internationally-recognized independent certified public accountant, whose appointment will not be unreasonably withheld by the other Party, examine the previously unaudited records of the other Party in a manner sufficient to report to the receiving Party on the accuracy of the paying Party's royalty and sharing of Operating Profit and Losses  calculations.  Such audit shall occur at the time 

 

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the paying Party normally conducts audits of this type, and shall be limited to results in the twelve (12) calendar quarters prior to audit notification.  Both parties reserve the right to redact confidential information not relevant to making such verification from such records prior to examination by such accountant. Written results of any such examination shall be made available to both Parties.  If such examination reveals an underpayment of royalties, Operating Profits and Losses, or Development Costs for the time period being examined by five percent (5%) or more, the paying Party shall pay all costs of such examination. If such examination concludes that additional royalties, Operating Profits and Losses, or Development Costs are owed, then the additional amounts shall be paid within thirty (30) days of the date such accountant's written report is available.  If such examination concludes that there has been an overpayment of royalties, Operating Profits and Losses, or Development Costs by a Party, then the excess shall be credited against the next payment owed by that Party.  This Section 6.8 shall survive any termination of this Agreement for a period of six (6) years.  

 

ARTICLE VII - PRODUCTION AND SUPPLY

7.1     Party Responsibilities.  For Joint Development under Article IVA, provided that neither Party has exercised its Opt-out Option, both Parties shall determine responsibility for the development of a manufacturing process and facilities for all Drug Candidates and Products and specify a Responsible Party.  The Responsible Party shall evaluate both internal and third party manufacturing to achieve maximum value (including quality and cost) for supplying Drug Candidates and Products.  For GENENTECH Development under Article IVB, GENENTECH shall be the Responsible Party and solely responsible for the development of a manufacturing process and facilities for all Drug Candidates and Products and for producing and supplying to both Parties (i) all quantities of Drug Candidates needed by a Party to conduct research and (ii) Clinical Requirements and Commercial Requirements.  For ROCHE Development under Article IVC, ROCHE shall be the Responsible Party and solely responsible for the development of a manufacturing process and facilities for all Drug Candidates and Products and for producing and supplying to both Parties (i) all quantities of Drug Candidates needed by a Party to conduct research and (ii) Clinical Requirements and Commercial Requirements.  The Parties shall, at least three (3) months before the initiation of Phase III Clinical Trials for a given Product, negotiate in good faith and conclude a production and supply agreement for Clinical Requirements of such Product, which requirements shall be supplied at the cost set forth in Section 7.2 below.

7.2     Supply of Clinical Requirements.  Unless the other Party exercises its Opt-out Option for a Drug Candidate, the Responsible Party shall use commercially reasonable efforts to supply the other Party with the other Party's Clinical Requirements for that Drug Candidate pursuant to a mutually agreeable production schedule based on the other Party's reasonable forecast of its Clinical Requirements.  The other Party shall reimburse the Responsible Party for the Responsible Party's Fully Burdened Manufacturing Cost for such Clinical Requirements with payment for shipments of such Clinical Requirements to be made within ninety (90) days after the receipt and acceptance of each shipment of Clinical Requirements.  The Responsible Party shall not be obligated to supply Clinical Requirements to the other Party other than in accordance with the quantities mutually agreed to and at the approximate dates of delivery mutually agreed to.  All transportation and packing and similar costs shall be borne by the other Party.  Title and risk of loss shall pass to the other Party upon delivery by the Responsible Party to the other Party.  The Parties shall agree on specifications for the Clinical Requirements, and the Clinical Requirements delivered by the Responsible Party shall meet those specifications.  The Responsible Party shall not favor the supply of its own clinical requirements of a Product over the other Party's Clinical Requirements.

7.3     Supply of Commercial Requirements.  Unless the other Party exercises its Opt-out Option for a Drug Candidate or Product, the Responsible Party shall supply the other Party with the other Party's Commercial Requirements for that Product and the other Party agrees to purchase its Commercial Requirements for that Product from the Responsible Party.  The other Party shall reimburse the Responsible Party for such Commercial Requirements at one hundred and twenty percent (120%) of the Responsible Party's Fully Burdened Manufacturing Cost.  The supply and purchase of Commercial Requirements shall be pursuant to a Supply Agreement with terms and conditions to be negotiated, finalized and executed prior to the filing of the first Approval Application/Registration for that Product.

 

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7.4     Third Party Contractor.  The Responsible Party may contract the supply of Clinical Requirements or Commercial Requirements to an independent third party, provided that the other Party is provided the opportunity to produce such supply itself at a price that is the same or lower than the price proposed by such independent third party manufacturer.

7.5     Manufacturing Termination Option.  Upon three (3) years' prior written notice to the other Party, the Responsible Party may cease the production of the other Party's Commercial Requirements pursuant to the provisions of this Section 7.5.  If the Responsible Party provides such notice, then the other Party, at its request, shall have the Manufacturing Technology transferred to it or to a third party free of charge (except for royalties or license fees required to be paid to third parties under existing contractual obligations with respect to the Manufacturing Technology) pursuant to an agreed upon technology transfer agreement and plan, in which case the other Party will have an exclusive, royalty free, sublicenseable right to use the Manufacturing Technology solely to make, have made, use and sell that Product.

7.6     Responsible Party's Inability to Manufacture.  If the Responsible Party is unable or unwilling for any reason to supply the other Party's reasonable Clinical Requirements or Commercial Requirements as required by this Agreement and such inability or unwillingness results in, or is reasonably likely to have, an adverse material impact on the other Party's ability to conduct clinical trials or to sell a Product as permitted hereunder or to otherwise exercise its rights or fulfill it obligations hereunder, then the other Party shall provide notice of such adverse material impact or the likelihood of such adverse material impact to the Responsible Party and the other Party shall have the right to manufacture the Product in addition to any other remedy that may be available to it.

7.7     Exercise of Opt-out Option.  If the Responsible Party exercises its Opt-out Option, the other Party shall thereafter have the royalty-free (subject to the other Party's payment of applicable third party royalties or license fees) right and license to produce and supply all of the other Party's Clinical Requirements and Commercial Requirements for that Drug Candidate or Product for use and sale throughout all the Territories.  Upon exercise by the Responsible Party of its Opt-out Option, the Responsible Party shall transfer in an expeditious manner as is reasonable all of the Manufacturing Technology for that Drug Candidate or Product to the other Party pursuant to an agreed upon technology transfer agreement and plan.

ARTICLE VIII - LICENSE GRANTS  

8.1     License Grants.  Subject to the rights and obligations contained herein, (i) each Party ("Licensor") grants to the other Party ("Licensee") an exclusive right and license to use the Licensor's Know-How and practice the Licensor's Patents, to sell and offer for sale Products in portion of the Territory for which this Agreement authorizes such Party to sell Products; (ii) Licensor grants to Licensee a semi-exclusive right and license to use Licensor's Know-How and practice the Licensor's Patents to use and import Drug Candidates and Products in the portion of the Territory for which this Agreement authorizes such Party to market Products; (iii) Licensor grants Licensee a semi-exclusive right and license to use the Licensor's Know-How and to practice the Licensor's Patents to make or have made Product in accordance with the provisions of Article VII. 

8.2     Sublicenses.  Each Party shall have the right to grant sublicenses under this Agreement or any of its provisions (i) except that neither Party shall have any right to grant a sublicense to another party to use, market or sell a Product in the US during such time as the other Party maintains a right or contingent right to co-promote that Product in the US; and (ii) a Party shall have the right to grant a sublicense to use, market or sell a Product in any country to another party at any time that the other Party has no right or contingent right to co-promote that Product in that country.

8.3     Trademarks.  Unless one Party has exercised its Opt-out Option, the Parties shall discuss in good faith the selection and use of one or more trademarks to be used worldwide for each Product.

 

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ARTICLE IX - COMMERCIALIZATION DILIGENCE 

Any exclusive license granted to a Party by the other Party in Article VIII above shall be conditioned, in each Major Country in the Territory for which the other Party has exclusive rights, on the other Party using commercially reasonable efforts to expeditiously conduct development activities with respect to the Drug Candidate and Product involved, to obtain regulatory approval to sell that Product, and to sell that Product in a manner so as to maximize that Product's revenue potential.  Such efforts shall be at least as diligent as those used for its own products having an analogous commercial potential.  Unless the other Party has exercised its Opt-out Option, the other Party shall inform the Party granting the exclusive license of the progress of its efforts to develop, register, market and sell such Product in those countries in that Territory for which the other Party has exclusive rights.  Such progress reports shall be made annually by September 30th of each year.  For each such country in the Territory for which the other Party has exclusive rights such progress reports shall include information on

            a)    status of, and plans for, clinical trials needed for registration of that Product; 

            b)    status of, and plans for, registering that Product for sale; and

            c)    forecasted sales of that Product or the Net Sales of that Product if any are registered. 

 

ARTICLE X - CONFIDENTIALITY AND PUBLICATIONS

10.1     Confidential Information.  During the course of this Agreement, the Parties may receive from each other information belonging solely to the disclosing Party, which is proprietary and confidential and of significant commercial value to the disclosing Party.  Such information as well as Know-How owned solely by a Party, so long as such Know-How is not generally ascertainable from publicly available information, shall be deemed "Information" as that term is used in the Mutual Confidentiality Agreement and the Parties agree that such Information shall be subject to the terms and provisions of the Mutual Confidentiality Agreement.  All Know-How and confidential information which is derived from activities which are paid for by both Parties shall be jointly owned by both Parties and each Party shall be free to use or disclose such Know-How or confidential information in any manner it chooses.

10.2     Sharing of Data.  The Parties agree that free and open communication of ideas and sharing of data and materials relating to a Joint Research Plan or a Joint Development Plan are essential to this collaboration.  The Parties agree to report and update each other (including their respective Joint Committee representatives) on a regular basis regarding the progress and results of their respective activities under the Joint Research Plan or Joint Development Plan.  Any such report or update shall be considered confidential information (as defined in Section 10.1) of the disclosing Party for purposes of this Agreement if such report or update satisfies the requirements of Section 10.1.

10.3     Publications.  Notwithstanding Section 10.1, each Party shall be free to publish or publicly disclose the results of its research and development activities hereunder to the extent that such publication or public disclosure will not result in the disclosure of Information of the other Party.  Each Party shall submit any proposed publication which may contain Information of the other Party at least thirty (30) days in advance to the other Party to allow that Party to review such planned publication.  The reviewing Party shall have the authority to require deletion from any such planned publication of any Information of the reviewing Party.  This Agreement shall not prohibit or restrict either Party from publishing or publicly disclosing the results of research or development conducted solely by the Party using materials and information not supplied to it by the other Party pursuant to this Agreement. 

10.4     Restrictions on Transfer of Proprietary Materials.  Each Party agrees, with respect to any proprietary materials, substances, reagents or the like (except Product) received from the other Party (Materials), that such materials shall be subject to the provisions of Mutual Agreement for Supply of Research Material entered into between GENENTECH and Roche Holding Ltd. as of July 7, 1991.

 

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ARTICLE XI - INVENTIONS AND PATENTS  

11.1    Sole Inventions.  Either Party may independently and separately make inventions in the course of this Agreement relating to a Molecule, Drug Candidate, or Product or to its administration, formulation or clinical use.  In such event, the Party making the invention shall be the sole owner of that invention and of any patent applications and patents thereon (including inventor's certificates) and shall be solely responsible for the filing, prosecution and maintenance of all such patent applications and patents, subject to the licenses granted under this Agreement.  The non-inventing Party shall have no right to practice inventions claimed in any patent resulting from a sole invention of the other Party or any Know-How owned solely by the other Party for any purpose outside of this Agreement.  Each Party shall be free to use all Patents or Know-How or any other technology or information owned solely by it or owned together with the other Party for any purpose at any time without charge, consistent with the provisions of this Agreement.

11.2    Joint Inventions.  Any inventions relating to a Molecule, Drug Candidate, or Product or to its administration, formulation or clinical use and arising from the Parties' efforts under this Agreement and that are jointly made by both Parties (i.e., an invention in which one or more inventors from each Party, including individuals normally obliged to assign an invention to a Party, have made an inventive contribution as determined by United States Patent Law), and any patent applications and patents thereon, shall be jointly owned by the Parties.  The filing, prosecution and maintenance of any patent applications thereon will be under the control of the Party from whom the majority of data underlying such patent application arises ("Principal Party").  The Principal Party shall have the right (but not the obligation), consistent with its obligations under this Agreement, to undertake such filings, prosecutions and maintenance at its sole expense, provided that: (a) the Principal Party provides the other Party with a copy of any such proposed patent application one (1) month before the filing of such patent application by the Principal Party; (b) the Principal Party informs the other Party within eight (8) months from the filing of the priority application whether and in which countries it intends to file convention applications; (c) the Principal Party provides the other Party promptly with copies of all material communications received from or filed in patent office(s) with respect to such filings; and (d) the Principal Party provides the other Party a reasonable time prior to taking or failing to take any action that would affect the scope or validity of rights under any patent applications or patents (including but not limited to substantially narrowing or canceling any claim, abandoning any patent or not filing or perfecting the filing of any patent application in any country), with notice of such proposed action or inaction sufficiently in advance that the other Party has a reasonable opportunity to review and make comments.  If the Principal Party breaches the foregoing obligations regarding updating and consultation, and such breach is not cured within thirty (30) days of a written notice from the other Party to the Principal Party describing such breach, or if the Principal Party does not inform the other Party that it intends to file or undertake a prosecution action with respect to a patent application within forty-five (45) days of, or fails to undertake the filing of or a prosecution action with respect to a patent application or to take an appropriate action to maintain a patent in any country within ninety (90) days of, a written notice by the other Party to the Principal Party stating that the other Party believes filing of or taking a or prosecution action with respect to such an application or taking an appropriate action to maintain a patent is appropriate, then the other Party may undertake such filing, prosecution and maintenance at its sole expense, in which case the Principal Party shall assign all its rights to such invention to the other Party, and any patent application and subsequently issued patent thereon shall be owned solely by the other Party.  If a Party has exercised its Opt-out Option, then the other Party shall have control of the filing, prosecution and maintenance of all such patent applications throughout the Territory.  Each Party shall be free to practice inventions claimed in any joint patents in any manner they choose without compensation to the other Party.

11.3    Third Party Infringement.  

      (a)    If GENENTECH or ROCHE becomes aware of any infringement by a third party of any Patents in any country, whether solely or jointly held, then each Party shall inform the other in writing of all available evidence and details available concerning such infringement.  Before taking any action, the Parties shall consult with each other as to the best manner in which to proceed.  Either Party which is the sole owner of a Patent shall have the sole right but not the obligation to bring, defend, and maintain any appropriate suit or action or to control the conduct thereof against the infringer.  If a Party which is the sole owner of a Patent declines to bring, defend and maintain any appropriate suit or action or to control the conduct thereof against the infringer, then upon consent of the owner, the 

 

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other Party may bring, defend and maintain such action on the solely owned Patent, and the sole owner of the Patent shall provide reasonable cooperation to with the other Party in such action at the other Party's expense.  Whenever there is profit and loss sharing among the Parties (i.e. Scenario 1 [without an exercised Opt-out Option], Scenario 3, or Scenario 5) and the Parties have agreed to a particular patent litigation, then the Parties shall share equally all expenses regarding that patent litigation and share equally all recoveries due to any such action.  If there are royalty payments (i.e. Scenario 1 [where the Opt-out Option has been exercised], Scenario 2, or Scenario 4), then the marketing Party shall pay all expenses and keep all recoveries from such action (subject to payment of such royalties to the other Party by including such recovery in the calculation of Net Sales) if the marketing Party is solely pursuing such action.  If the Party bringing an action on a solely owned Patent requests the other Party to join in such suit or action, the other Party shall provide reasonable cooperation and execute all papers and perform such other acts as may be reasonably required.

      (b)    If GENENTECH and/or ROCHE are sued or threatened with suit in any country by a third party who claims that the manufacture, use or sale of a Product is an infringement of one or more claims of a patent owned or controlled by the third party, then if GENENTECH and ROCHE are sharing Operating Profits and Losses pursuant to Section 6.2, GENENTECH and ROCHE shall share equally the costs in defending such suit or threatened suit.  If the settlement of a lawsuit or threatened lawsuit or other action which the Parties consent to the terms of or a judgment arising out of a lawsuit requires any payments to a third party or license from a third party in order to manufacture, use or sell Product in a country, then the Party receiving royalties for Net Sales in that country agrees to reduce the royalty specified in this Agreement such that GENENTECH and ROCHE share equally the cost of any such payments and/or license fees including royalties.

11.4    Third Party Patents.  If the Responsible Party is producing Clinical Requirements or Commercial Requirements for the other Party and either Party becomes aware of any patents or other appropriate intellectual property belonging to a third party which either Party reasonably believes that, in the absence of a license thereto, the Responsible Party would infringe by virtue of the Responsible Party's manufacture of that Product, then the Responsible Party shall advise the other Party of such.  The Parties shall thereafter discuss a means of resolving such potential infringement including one Party or the other (or jointly) taking a license to such patent or other intellectual property.  If as a result of an agreement between the Parties, the Responsible Party acquires a license to such patent or other intellectual property, then the associated intellectual property acquisition and licensing costs shall be deemed to be part of the Other Operating Income/Expense as defined in the Financial Appendix.  If the Responsible Party insists that such a license is necessary but the other Party does not agree, or if the other Party is not willing to agree to terms for such a license that are acceptable to the Responsible Party and to the third party patent or intellectual property owner, then the other Party shall defend, indemnify and hold harmless the Responsible Party and the other Party from and against all third party costs, claims, suits, expenses (including reasonable attorney's fees) and damages arising out of or resulting from any infringement by the Responsible Party of such patent or intellectual property which covers the manufacture of that Drug Candidate or Product.  If the other Party insists that such a license is necessary but the Responsible Party does not agree or if the Responsible Party is not willing to agree to terms for such a license that are acceptable to the other Party and to the third party patent or intellectual property owner, then the Responsible Party shall defend, indemnify and hold harmless the other Party from and against all third party costs, claims, suits, expenses (including reasonable attorneys fees) and damages arising out of or resulting from any infringement by the Responsible Party or the other Party of such patent or intellectual property which covers the manufacture of that Product.  The provisions of the previous two sentences shall not be transferable to any other party or person.

 

ARTICLE XII - LIABILITY

12.1     No Liability.  Neither Party shall be liable to the other Party for indirect, incidental or consequential damages arising out of the terms or conditions of this Agreement or to that Party's performance or lack thereof hereunder.

12.2     ROCHE Indemnification.  ROCHE shall defend, indemnify and hold harmless GENENTECH from and against all costs, claims, suits, expenses (including reasonable attorneys' fees) and damages (collectively "Claims") arising out of or resulting from ROCHE's negligence or misconduct in its manufacture of Drug Candidate or 

 

- 19 -

 

Products or from ROCHE's marketing, sale or use of Products or Drug Candidates.  The foregoing indemnification shall not extend to any Claims which arise or result from GENENTECH's negligence or willful misconduct or from any defect in GENENTECH's manufacture of Products or Drug Candidates.  The foregoing indemnification shall be conditioned upon GENENTECH (i) providing written notice to ROCHE within twenty (20) days after GENENTECH has been given written notice of such Claim; (ii) permitting ROCHE the opportunity to assume full responsibility (at ROCHE's expense) for the investigation and defense of any such Claim; and (iii) not settling or compromising any such Claim without ROCHE's prior written consent.

12.3     GENENTECH Indemnification.  GENENTECH shall defend, and indemnify and hold harmless ROCHE from and against all costs, claims, suits, expenses (including reasonable attorneys' fees) and damages (collectively Claims) arising out of or resulting from GENENTECH's negligence or misconduct in its manufacture of Drug Candidates or Products or from GENENTECH's marketing, sale or use of Products or Drug Candidates.  The foregoing indemnification shall not extend to any Claims which arise as a result from ROCHE's negligence or willful misconduct or from any defect in ROCHE's manufacture of Products or Drug Candidates.  The foregoing indemnification shall be conditioned upon ROCHE (i) providing written notice to GENENTECH within twenty (20) days after ROCHE has knowledge of such Claim; (ii) permitting GENENTECH the opportunity to assume full responsibility (at GENENTECH's expense) for the investigation and defense of any such Claim; and (iii) not settling or compromising of any such Claim without GENENTECH's prior written consent.

 

ARTICLE XIII - TERM AND TERMINATION

13.1     Term.  Unless terminated earlier pursuant to this Article XIII, this Agreement is effective as of the Effective Date and shall remain in full force and effect for so long as the Parties collaborate on research under this Agreement or, with respect to a Drug Candidate or Product, for so long as a Drug Candidate or Product continues to be sold by a Party or a sublicensee.

Upon expiration of the term of this Agreement, each Party shall have a fully paid up license under the other Party's Patents and Know-How and any other intellectual property, except trademarks, to make, have made, use and sell that Drug Candidate and Product in that country.  

13.2     Termination.  

      (a)    The Parties may mutually agree in a writing signed by both Parties to terminate this Agreement with respect to any Drug Candidate or Product in any country in the Territory.  

      (b)    Either Party may terminate this Agreement with respect to any Drug Candidate or Product

                  (i)    in any country in the Territory effective upon any material breach by the other Party of the terms or conditions of this Agreement with respect to such Drug Candidate or Product in such country, which breach cannot be, or is not, cured within sixty (60) days of a written notice by the non-breaching Party specifying such breach and stating its intention to terminate this Agreement, or 

                  (ii)    in the entire Territory effective upon the other Party becoming insolvent or bankrupt or making an assignment for the benefit of its creditors, upon appointment of a trustee or receiver for the other Party or all or substantially all of its assets, or upon the filing of a voluntary or involuntary petition by or against the other Party under any bankruptcy or insolvency law, the reorganization or rearrangement provisions of the United States Bankruptcy Code or any similar law. 

      (c)    In such event of a termination under Sections 13.2(b)(i) of this Article, the terminating Party --

                  i)    shall have all rights and licenses granted by the terminating Party to the other Party herein with respect to that Drug Candidate or Product and the supply obligations of the other Party for that Drug Candidate or Product, if any, with respect to that country shall automatically terminate as of the date of termination with respect 

 

- 20 -

 

to that country and the terminating Party shall thereafter have all rights to make, have made, use and sell that Product in that country;

                  ii)    the terminated Party shall promptly transfer and assign to the dossier and the registration and all associated data, information, results and documents for that Drug Candidate or Product in that country to the terminating Party; 

                  iii)    the Parties shall discuss and agree on a transfer of inventory for that Drug Candidate or Product from the terminated Party to the terminating Party; and

                  iv)    for a period of three (3) years thereafter the terminated Party shall not produce or sell that Drug Candidate or Product in that country unless the other Party consents in writing. 

13.3     Unilateral Termination.  Either Party shall have the right to unilaterally terminate its efforts to use, market and sell Products, on a Product-by-Product basis, in any country by giving ninety (90) days' notice to the other Party.  If that Party (for the purposes of this Section 13.3 only, the "Terminating Party") decides to terminate its efforts in any country, then at the other Party's election, the other Party (the "Non-terminating Party") shall be granted a sole and exclusive license to all of the Terminating Party's rights with respect to all Products in that country at the royalty rates set forth in Section 6.3 above (and all Operating Profit and Loss sharing between the parties in effect at the time (if any) shall terminate).  If the Non-terminating Party is granted such a license, the Terminating Party will transfer to the Non-terminating Party free of charge (except for the Terminating Party's reasonable out-of-pocket expenses which shall be reimbursed by the Non-terminating Party) all information, data, Product registrations and dossiers and any other regulatory and other documentation that the Terminating Party has developed or acquired for that Product for that country.  In the event of a unilateral termination pursuant to this Section 13.3, for a period of three (3) years after such termination the Terminating Party shall not conduct research and development on or produce or sell that Drug Candidate or Product in that country.

13.4     Effect of Termination.  Termination of this Agreement for any reason shall be without prejudice to any rights that shall have accrued to the benefit of either Party prior to such termination, and shall not relieve either Party of any obligations that have accrued prior to such termination or any obligations that survive such termination.  The provisions of Article VII, X, XI, XII, XIV and to the extent applicable, Section 6.6 shall survive any termination of this Agreement.

 

ARTICLE XIV - MISCELLANEOUS

14.1     Warranties.  Each Party hereby represents and warrants that, as of the date hereof, it has the full right and authority to enter into this Agreement, and that it is not aware of any impediment that would inhibit its ability to perform its obligations under this Agreement.

14.2     Disclaimer of Certain Warranties.  INFORMATION, REAGENTS AND MATERIALS TRANSFERRED FROM ONE PARTY TO ANOTHER IN THE COURSE OF THIS AGREEMENT ARE SUPPLIED AS IS WITHOUT WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY, TITLE, FREEDOM FROM INFRINGEMENT OR FITNESS FOR A PARTICULAR USE.

14.3     Entire Agreement, Amendment.  This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof, supersedes all prior agreements (except as provided for herein), understandings and communications, oral or written, relating to the subject matter hereof, and shall not be modified, altered or amended except by mutual written agreement of the Parties.  For clarity, the Amended and Restated Agreement between Genentech, Inc. and F. Hoffman-La Roche Ltd Regarding Commercialization of Genentech's Products Outside the United States shall not apply to any Molecules, Drug Candidates or Products under this Agreement.

 

- 21 -

 

14.4     Failure to Enforce.  The failure by either Party at any time or for any period of time to enforce any term or provision of this Agreement shall not be construed as a waiver of such term or provision or of the right of either Party to enforce each and every such term and provision.

14.5     Force Majeure.  If either Party shall be delayed, interrupted in or prevented from the performance of any obligation hereunder by reason of Force Majeure including an act of God, fire, flood, war (declared or undeclared), terrorism, public disaster, strike or labor differences, governmental enactment, rule or regulation, or any other cause beyond such Party's control, such Party shall not be liable to the other therefor and the time for performance of such obligation shall be extended for a period equal to the duration of the  contingency which occasioned the delay, interruption or prevention.  The Party invoking such Force Majeure rights must notify the other Party within a period of fifteen (15) days, from the first and the last day of the Force Majeure unless the Force Majeure renders such notification impossible in which case notification will be made as soon as possible.  If the delay resulting from the Force Majeure exceeds six (6) months, both Parties shall consult each other to find an appropriate solution.

14.6     Arbitration.  (a)  In the event of any dispute, controversy or claim arising out of or relating to this Agreement, the Parties shall try to settle such disputes, controversies or claims amicably between themselves.  If the Parties are unable to so settle any such dispute, controversy or claim, then any dispute, controversy or claim arising out of or relating to any provision of this Agreement or the interpretation, enforceability, performance, breach, termination or validity hereof, including, without limitation, this arbitration clause shall be solely and finally settled by arbitration in the manner specified in this Section.

      (b)    If the Parties fail to agree, then any controversy, dispute or claim which may arise out of or in connection with this Agreement, or the breach, termination or validity thereof, shall be settled by final and binding arbitration, pursuant to the Rules of Compilation and Arbitration of the International Chamber of Commerce (Paris) as hereinafter provided.

                  (i)    The arbitration tribunal shall consist of three (3) arbitrators.  Each Party shall nominate in the request for arbitration and the answer thereto one arbitrator and the two arbitrators so named will then jointly appoint the third arbitrator as chairman of the arbitration tribunal.  If one Party fails to nominate its arbitrator or if the Parties arbitrators cannot agree on the person to be named as chairman within sixty (60) days, the Court of Arbitration of the International Chamber of Commerce shall make the necessary appointments for arbitrator or chairman.

                  (ii)    The place of arbitration shall be in New York City if GENENTECH requests arbitration or San Francisco, California if ROCHE requests arbitration or such other venue as the Parties may mutually agree, and the arbitration proceedings shall be held in English.  The procedural law of the place of arbitration shall apply where the Rules are silent.

                  (iii)    The award of the arbitration tribunal shall be final and judgment upon such an award may be entered in any competent court or application may be made to any competent court for acceptance of such an award and order of enforcement. 

14.7     Notices.  Requests, notices and reports required or permitted under this Agreement shall be in writing and shall be sent by telefax or telecopier (with written confirmation) or express mail to the address set forth below or such other address as a Party may designate from time to time in accordance with this Section:

	 	
to ROCHE:
	 	
F. Hoffmann-La Roche Ltd

	 	 	 	 	
Corporate Law

Grenzacherstrasse 124

CH-4002 Basel, Switzerland

	 	 	 	 	 
	 	 	 	
Hoffmann-La Roche Inc.

	 	 	 	 	
Corporate Secretary

340 Kinglsland Street

Nutley, New Jersey 07110

 

- 22 -

 

	 	 	 	 	 
	 	
to GENENTECH:
	 	
Genentech, Inc.

	 	 	 	 	
Corporate Secretary

One DNA Way

South San Francisco, California  94080

U.S.A.

	 	 	 	 	 
	 	
With a copy to:
	 	
Genentech, Inc.

	 	 	 	 	
Vice President of Business Development

One DNA Way

South San Francisco, California  94080

U.S.A.

14.8     Use of Names.  Neither Party will use or refer to this Agreement in any promotional activity, or use the marks of the other Party, without express prior written permission of the other Party.  Both Parties shall refrain from making any public announcement or disclosure of this Agreement and its terms without the prior written consent of the other Party except as required by law.

14.9     Successors and Assigns.  Neither Party may assign this Agreement or any rights hereunder without the prior written consent of the other Party, which consent shall not be unreasonably withheld.  Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assignees.

14.10     Headings.  The section headings of this Agreement are for convenience only and are not a part of this Agreement.

14.11     Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

14.12     Severability.  The Parties hereby expressly state that it is not their intention to violate any applicable rule, law or regulation.  If any of the provisions of this Agreement are held to be void or unenforceable with regard to any particular country by a court of competent jurisdiction, then, to the extent possible, such void or unenforceable provision shall be replaced by a valid and enforceable provision which will achieve as far as possible the economic business intentions of the Parties.  The provisions held to be void or unenforceable shall remain, however, in full force and effect with regard to all other countries.

14.13     Governing Law.  This Agreement shall be governed by and construed for all purposes in accordance with the laws of the State of California. 

14.14     Relationship.  Neither Party is in any way the legal representative, agent or fiduciary of the other Party, nor authorized or empowered to assume any obligation of any kind, implied or expressed, on behalf of the other Party, without the express written consent of the other Party.

 

- 23 -

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized representatives as of the Effective Date.

 

	
GENENTECH, INC.
	 	
F. HOFFMANN-LA ROCHE LTD

	 	 	 	 	 
	
By:
	
/s/ ARTHUR D. LEVISON
	 	
By:
	
/s/ BRAD BOLZON

	
	
	
	
	

	 	 	 	 	 
	
Name:
	
Arthur D. Levinson
	 	
Name:
	
Brad Bolzon

	
	
	
	
	

	 	 	 	 	 
	

Title:
	

Chief Executive Officer
	 	

Title:
	
Executive Vice President

Pharma Partnering

	
	
	
	
	

	 	 	 	 	 
	 	 	 	 	 
	 	 	 	
By:
	
/s/ STEFAN ARNOLD

	
	
	
	
	

	 	 	 	 	 
	 	 	 	
Name:
	
Stefan Arnold

	
	
	
	
	

	 	 	 	 	 
	 	 	 	
Title:
	
Deputy Director

	
	
	
	
	

	 	 	 	 	 
	 	 	 	 	 
	
HOFFMANN-LA ROCHE INC.
	 	 	 
	 	 	 	 	 
	
By:
	
/s/ DENNIS E. BURNS
	 	 	 
	
	
	
	
	

	 	 	 	 	 
	
Name:
	
Dennis E. Burns
	 	 	 
	
	
	
	
	

	 	 	 	 	 
	

Title:
	
Vice President

Global Head of Business Development
	 	 	 
	
	
	
	
	

 

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APPENDIX A

FINANCIAL PLANNING, ACCOUNTING AND REPORTING

FOR THE

ROCHE/GENENTECH COLLABORATIVE AGREEMENT

 

This Appendix A to the Collaborative Agreement ("Agreement") dated as of April 13, 2004, among F. Hoffmann-La Roche Ltd, Hoffmann-La Roche Inc. (collectively referred to as "ROCHE") and Genentech, Inc. ("GENENTECH") addresses the financial planning, accounting policies and procedures to be followed in determining Operating Profits or Losses, royalties and related sharing of revenue and expenses, including Development Costs. Terms not defined in this Appendix shall have the meanings set forth in the Agreement.

This Appendix sets forth the principles for reporting actual results and budgeted plans of the combined operations, the frequency of reporting, the use of a single functional currency for reporting, and the methods of determining settlement payments between the Parties and auditing of accounts.

For purposes of this Appendix only, the consolidated accounting of operations for the collaboration shall be referred to as GenRoche Development.  GenRoche Development is not a legal entity and has been defined for identification purposes only.

A.1.       Principles of Reporting
The results of operations of GenRoche Development will be presented in the following format (as to all Molecules, Drug Candidates, and Products and also on a product-by-product basis), with the categories as defined in Section A.3 below:

A.1.1(a)   Commercial Income Statement
ROCHE          GENENTECH          Total

Net Sales

less Distribution Costs

less Cost of Sales

less Marketing Costs

less Sales Costs

less Other Operating Income/Expense

= Operating Profit (Loss)

A.1.1(b)   Development Costs

             Development Costs (as to all individual Molecules, Drug Candidates, and Products and also on an aggregate basis) chargeable to GenRoche Development will be reported separate from the Operating Profit (Loss).

A.1.1(c)   Royalties

            Royalties, pursuant to Sections 3.8(a)(i), 6.3 or 6.4 of the Agreement, will be accounted for and reported on a Product-by-Product basis.

            It is the intention of the Parties that the interpretation of these definitions will be consistent with US GAAP (Generally Accepted Accounting Principles) for GENENTECH and IFRS (International Financial Reporting Standards) and FGAR (The Roche Financial Group Accounting and Reporting Manual) for ROCHE.

 

- 25 -

 

A.1.2   Subcomponent Reporting

            For reporting purposes only, expenses will be identified for the budget, forecast, and quarterly actuals reporting events within this Section A.1 by the following detail sub-components within the Commercial Income Statement expense components specified under Section A.1.1(a) and A.1.1(b):

Cost of Sales - Fully Burdened Manufacturing Cost ("FBMC") and Period Costs.

Cost of Sales - Fully Burdened Manufacturing Cost ("FBMC") and Period Costs.

Marketing - Product Promotion Costs (including market research, registries, and post-launch clinical studies) and Management & Infrastructure Costs

Sales - Field Force Costs

Development - on a project/product/indication/work package basis

A.2.     Frequency of Reporting

            The fiscal year of GenRoche Development will be a calendar year. An Annual Budget for each year will be defined and agreed between the Parties on or before December 1 of the previous year.  Reporting by each Party for GenRoche Development revenues, expenses and royalties will be performed as follows (with copies provided to the JFC and to the other Party):

	
Reporting Event
	 	
Frequency
	 	
Timing of Submission

	
Actuals
	 	
Quarterly
	 	
Q1-Q3:

Q4:
	 	
+30 days

+45 days

	 	 	 	 	 	 	 
	
Development Costs

(Actuals)
	 	
Monthly
	 	
Jan-Nov:

Dec:
	 	
+30 days

+45 days

	 	 	 	 	 	 	 
	
Settlement Payments
	 	
Quarterly
	 	
+90 days
	 	 
	 	 	 	 	 	 	 
	
Annual Budget
	 	
Annually
	 	
October-December

	 	 	 	 	 	 	 
	
Forecasts

(current and

following 5 quarters)
	 	
Quarterly
	 	
Within first 10 (ten) business 

days of the third month of quarter

excluding Q4, where the Forecasting

event is replaced by the Annual Budget

	 	 	 	 	 	 	 
	
Long Range Plan

(next 5 calendar years)
	 	
Annually
	 	
May-July *
	 	 

* - ROCHE acknowledges that GENENTECH's current internal Long Range Plan timing is completed annually in December and that until such time as the two Parties are further coordinated on the timing of their efforts, GENENTECH submissions may be out-dated.

The committee appointed by the Management Committee with oversight responsibility for the particular Molecules, Drug Candidates, and Products (i.e. the JRC, JDC or JCC, as applicable) ("Committee(s)") will be responsible for the applicable portions of the Budget and Long Range Plan with regard to Products.  The applicable Committee(s) will develop budgets for research, development and commercialization in coordination with the JFC for review and approval by the Management Committee.  

 

- 26 -

 

Unless otherwise mutually agreed by the Parties, ROCHE will be responsible for the preparation of consolidated global and ROW reporting (actuals, budgets, forecasts, and long range plans), calculation of the profit/loss sharing and determination of the consolidated Settlement Payments.  In the US, the Lead Party will be responsible for the preparation of consolidated US reporting (actuals, budgets, forecasts, and long range plans and reporting such to ROCHE), calculation of the profit/loss sharing, development costs, and determination of the US-related Settlement Payments. ROCHE will provide the JFC (and GENENTECH) within five (5) working days of the submission date shown above, the Commercial Income Statement, a statement showing the global consolidated results (and forecasts) and calculations of the profit/loss sharing, development costs and royalties and resulting Settlement Payments required in a format agreed to by the Parties.

Reports of actual results compared to budget (as to all Molecules, Drug Candidates, and Products and also on a product-by-product basis) will be made, if requested, to the applicable Committee on a quarterly basis.  After acceptance by the JFC as to amounts, the JFC will forward the report to the applicable Committee for its acceptance.  The Parties will work together to keep actual spend within the Annual Budget. Any deviations greater than five percent (5%) above the Annual Budget will have to be accepted by the JFC. In this event, each Party will be given the time to receive internal approval from their respective decision making bodies before making any firm commitment on additional spending.

On a monthly basis, within seven (7) working days following that particular month end, each party will supply the other party with Net Sales (as to all Products and also on a product-by-product basis) in units, local currency and US dollars (by GENENTECH) or Swiss Francs (by ROCHE) by country of each month's sales according to the selling Party's sales reporting system, which shall be consistent with the definitions in Section A.3.

The JFC will meet as appropriate, at least twice a year and alternating between the locations of GENENTECH and ROCHE, to review and approve the reporting events (Actuals, Annual Budget, Forecasts and Long Range Plan) as to all Molecules, Drug Candidates, and Products and also on a product-by-product basis. The minimum scope that the JFC will cover in this work is:

	
-
	 	
FTE rate to be charged between the parties

	
-
	 	
inventory levels and write offs

	
-
	 	
sales returns and allowances

	
-
	 	
other financial matters, including each Party's methodologies for charging costs to GenRoche Development.

A.3.     Definitions

            A.3.1    "Allocable Overhead" means costs incurred by a Party or for its account which are attributable to a Party's supervisory services, occupancy costs, corporate bonus (to the extent not charged directly), and its payroll, information systems, human relations or purchasing functions and which are allocated to company departments based on space occupied or headcount or other activity-based method.  Allocable Overhead shall not include any costs attributable to general corporate activities including, by way of example, executive management, investor relations, business development, legal affairs and finance.

            A.3.2    "Cost of Capital" means each Party's interest charges on the average inventory values (including consideration of any valuation differences) of the Products for commercial quantities of Bulk Product, product specific raw materials, intermediates, Finished Product and Final Product held by that Party during the year (i.e. twelve months) immediately prior to a Product launch (with the last day of such year being the date of the Product launch) ("Product Launch Year") and for the two years (i.e. the 24 month period ending on the second anniversary date of the Product Launch) immediately following a Product launch (individually and collectively known as the "Post Launch Year(s)"). The interest rate to be used to determine the charge will be the average annual LIBOR rate during each such year plus four percent (4%), and the amount will be charged in one lump sum immediately following the Product Launch (for the Product Launch Year) and immediately following the fourth fiscal quarter of each individual Post Launch Year, in order to properly reflect the average annual calculations above.  The Cost of 

 

- 27 -

 

Capital shall be charged only for a Product launched in the US or Europe.  With respect to Product in Europe, such calculation shall not be made on a country-by-country basis, but shall be made only once per Product with respect to the Product Launch Year and the Post Launch Years (with the Product Launch Year being the year immediately prior to first launch of that Product anywhere in Europe).

            A.3.3    "Costs of Sales" for Bulk Product, Finished Product, or Final Product, as the case may be, shall mean the sum of:

      i)    FBMC, and

      ii)    Period Costs.

            In the event Product is supplied for pre-clinical or clinical purposes, such Cost of Sales shall not include item i) above to the extent it has already been considered or charged within Development Costs, nor shall it include any mark-up outlined in section A.8.2 herein.

            A.3.4    "Development Costs" means costs attributable to the Joint Research Plan or Joint Development Plan actually incurred in the Territory, as to each Molecule, Drug Candidate, and Product, including Allocable Overhead, required to obtain and/or maintain the authorization and/or ability to manufacture, formulate, fill, and/or ship such Molecule, Drug Candidate, or Product in commercial quantities as part of this Agreement.  

Development Costs consist of two main accounting elements, fixed costs and variable costs:

                  (A)    Fixed costs include the two main components of primary fixed costs and secondary fixed costs (i.e. Allocable Overhead). The primary cost types include personnel (including all fringe benefits), relocation, travel, entertainment and training incurred by the functions directly operating the development program. The work scope of these functions include activities within the areas of development operations, clinical quality insurance, medical science, genetics integrated medicine, drug regulatory and technical development. To these primary fixed costs should be added the secondary fixed costs (i.e. Allocable Overhead) which are attributable to costs, for example, for IT-software and hardware, IT-external costs, depreciation, occupancy costs, corporate bonus (to the extent not charged directly), and its payroll, information systems, human relations and purchasing. These secondary fixed costs are allocated to company departments based on space occupied or headcount or other activity-based method; and

                  (B)    Variable costs are external costs invoiced from Third Parties such as CROs (Contract Research Organizations), investigators, consultants, laboratories and suppliers of pre-clinical and clinical material for running studies (product development) and may also include material sourced from Third Parties or from in-house manufacturing, as well as filing fees necessary for the regulatory process. Any pre-clinical and clinical material manufactured in-house by either Party will be supplied at FBMC, and will not include any mark-up.

            Development Costs shall include but are not limited to the cost of the development of research plans and programs, screening, lead optimization, in vitro and in vivo testing, studies on the toxicological, pharmacokinetic, metabolic or clinical aspects of such Molecules, Drug Candidates and Products conducted internally or by individual investigators, or consultants necessary for the purpose of obtaining and/or maintaining approval of such Molecules, Drug Candidates and Products by a government organization in a country, and costs for preparing, submitting, reviewing or developing data or information for the purpose of a submission to a governmental authority to obtain and/or maintain approval of such Molecules, Drug Candidates and Products in a country as well as costs of process development, process improvements, scale-up costs and recovery (including plant costs), Phase IV clinical trials required by the FDA or equivalent, and costs of qualification lots. Development Costs shall include data management, statistical designs and studies, document preparation, and other expenses associated with the clinical testing program.

            Development costs shall not include patent costs, pre-Registration marketing costs (e.g. trademark costs, advertising agency selection costs, pre-marketing studies), post-Registration clinical studies which are not enabling for Registration of the Molecules, Drug Candidates and Products and post-Registration marketing studies and registries.  

 

- 28 -

 

            In determining Development Costs, on or before October 31st of each year, the Parties will agree on respective FTE-rates that will be charged for the following calendar year. Resources will be allocated to the programs from the functions directly operating the programs on a fractional FTE-basis, and time-recording will be used by all personnel within these functions to record actual time spent on the programs.  Each Party will also use its applicable project cost system with the purpose of tracking and reporting costs on a project/product indication/work package level. It is also understood between the Parties that they will jointly work to exchange data in a standard electronic form.

            A.3.5    "Distribution Costs" means any other direct costs borne by either Party in the US and ROW (and not invoiced to a Third Party) for logistics, transport, credit

and collections, customs clearance and storage of Products (if necessary) at the request of another Party, an Affiliate or a Third Party (i.e., freight, customs, duty, and insurance); provided, however, that unless the Parties mutually agree otherwise, Distribution Costs will be calculated as 2% of Net Sales for each and every Product sold in the US and 3% of Net Sales for each and every Product sold in the ROW. 

            A.3.6    "Failures" shall mean Bulk Product, Finished Product, or Final Product as the case may be, that is considered a yield loss because it does not meet the specifications, was not manufactured or tested in accordance with the procedures or was not manufactured in accordance with cGMPs. 

            A.3.7    "Fully Burdened Manufacturing Cost" or "FBMC" shall mean for Bulk Product, Finished Product, or Final Product as the case may be, the standard manufacturing cost, as defined by that Parties' standard cost accounting practices and policies. In the event of any transfer of Product among ROCHE, GENENTECH, GenRoche Development, its Affiliates or sublicensees, FBMC shall exclude any profit or other mark-up by any such parties, unless otherwise agreed by the Parties.

            Such FBMC shall include direct labor, materials, product testing costs (including quality control and quality assurance bulk testing and in-process testing e.g. adventitious virus and mycoplasma testing), and Allocable Overhead for manufacturing or contracting for each stage of the manufacturing process of the product shipped. In addition, FBMC includes Failures that are considered normal yield losses that could be reasonably expected and/or justified in this area of technology. The Parties will discuss and agree annually between November and January the main drivers of FBMC for the up-coming year. On or before January 31st of each year, these main drivers will be used to agree on a standard FBMC to be charged for that year. This standard FBMC will be calculated using ROCHE's exchange rates used for the Annual Budget. Such FBMC will be charged for that entire calendar year. 

      Such FBMC shall not include any costs associated with process development, scale up costs, qualification lots and any other costs if they are included in Development Costs. 

            A.3.8    "Marketing Costs" means, as to each Drug Candidate and Product, the Product Promotion Costs and Management & Infrastructure Costs, including Allocable Overhead, of marketing, promotion, advertising, professional education, product related public relations, relationships with opinion leaders and professional societies, market research, healthcare economics studies, any specifically identifiable Third Party contract services and other similar activities directly related to such Drug Candidates and Products and approved by the Parties.  Such costs will include both internal costs (e.g., salaries, benefits, supplies and materials, etc.) as well as external costs for outside services and expenses (e.g., consultants, agency fees, meeting costs, etc.).  The internal marketing costs include Allocable Overhead charges to marketing each Drug Candidate and Product that is consistent with each Party's internal process used for all of its products.  

Product Promotion Costs include but are not limited to: i) all Drug Candidate- and Product-related media advertising and promotion literature, e.g., journals, newspapers, TV, radio, agency fees, internet, etc., including production costs, agency fees, handouts, mailing and other printed materials, ii) samples of Drug Candidates and Products, iii) providing Drug Candidates and Products to customers in the Territory for free where the purpose of the free supply is promotional in nature, iv) organizing and participating in congresses and sponsoring local delegates, v) mini symposia, such as evening events, and vi) running marketing studies including the costs of compassionate use 

 

- 29 -

 

programs. Product Promotion Costs shall also include activities related to obtaining reimbursement from payers and costs to procure or obtain sales and marketing data.

	 	
Product Promotion Costs shall also include the external pre-Registration marketing expenses related to the above activities performed before first commercial sale as well as the post-Registration preclinical, clinical and marketing studies and registries that may be conducted (other than post-Registration preclinical studies which are intended to support label-enabling clinical studies, and other than post-Registration clinical studies and registries which are enabling for Registration of the Drug Candidates or Products or required by the FDA or equivalent, all of which costs are Development Costs).

	 	 
	 	
By way of illustration, Product Promotion Costs for such post-Registration preclinical, clinical and marketing studies and registries described above that may be conducted shall include the internal and external costs, in accordance with the Forecast and Long Range Plan (and not included in the Joint Development Plan), associated with the following:

	 	 
	
-
	
trial clinical material costs if commercially available products are used, that have not otherwise been previously charged to the collaboration;

	 	 
	
-
	
cost of post-Registration preclinical studies (unless intended to support label-enabling clinical studies) and clinical trials (phase III b and phase IV, unless required by the FDA or equivalent), registries, and marketing studies conducted as part of the Forecast and Long Range Plan;

	 	 
	
-
	
monitoring costs (travel expenses, training, etc., excluding salaries) for clinical personnel;

	 	 
	
-
	
development of protocols/case report forms;

	 	 
	
-
	
per patient costs, fees per trial, investigator sponsored trials, etc.;

	 	 
	
-
	
statistical evaluations (data handling and computer analysis, etc.);

	 	 
	
-
	
final study report (translation, publications, etc.);

	 	 
	
-
	
investigators' meeting, study coordination; and

	 	 
	
-
	
investigators' clinical study costs.

Management & Infrastructure Costs means all Drug Candidate-specific and Product-specific fixed costs relating to the marketing function for the particular Drug Candidate or Product.  These costs include salaries, bonuses, training, fringe benefits, travel and other fixed costs, not included in Field Force Costs, as well as bad debt expenses. Management & Infrastructure Costs also include Allocable Overhead for Drug Candidate-specific and Product-specific resources allocable from functions such as management and administration of marketing, health economics, registration, planning, communication, and controlling.

Marketing Costs will specifically exclude the costs of activities which promote (i) either Party's business as a whole without being product specific (such as corporate image advertising), or (ii) non-Drug Candidates or non-Products.

For clarity, if a Party exercises its opt-in right for a Drug Candidate or Product under Article IVB or IVC, the Parties shall share Marketing Costs incurred from the date of exercise onwards, in accordance with the ratios in Section 6.2.  

            A.3.9    "Net Sales" means the amount of gross sales of the Product invoiced to independent Third Parties less deductions of returns and return reserves (including allowances actually given for spoiled, damaged, out-dated, rejected, returned Product sold, withdrawals and recalls), rebates (price reductions, rebates to social and welfare systems, charge backs or reserves for chargebacks, cash payment incentives, government mandated rebates and 

 

- 30 -

 

similar types of rebates e.g., Pharmaceutical Price Regulation Scheme, Medicaid), volume (quantity) discounts, cash discounts, taxes (value added or sales taxes, government mandated exceptional taxes and other taxes directly linked to the gross sales amount).  For clarity, for purposes of determining when a sale of a Product occurs, the sale shall be deemed to occur when a Product is shipped to an independent Third Party.  

            A.3.10    "Operating Profit(s) or Loss(es)" means, as to all Products (or, where applicable, on a product-by-product basis), GenRoche Development's Net Sales less the following items:  Distribution Costs, Cost of Sales, Marketing Costs, Sales Costs, and Other Operating Income/Expense, for a given period.

            A.3.11    "Other Operating Income/Expense" means other operating income or expense from or to third parties which is not part of the primary business activity of GenRoche Development, but is considered and approved by the JFC as income or expense generated from GenRoche Development operations, and limited to the following:

	Gains/Losses on Product Divestments

	Patent and Third Party infringement costs (as defined and to the extent permitted and elected per the Agreement)

	Product liability insurance to the extent the Parties obtain a joint policy

	Third Party Royalties

	Cost of Capital

	other (to be approved by JFC)

            A.3.12    "Period Costs" - shall be comprised of:

	above normal Failures

	write-offs of expired Product

	valuation differences

            Such Period Costs include Failures valued at FBMC, if they are not included in the FBMC. In any case, Failures that go beyond what could be reasonably expected and/or justified in this area of technology shall remain the sole costs of the Responsible Party.

            Such Period Costs include costs associated with the write-off of expired products valued at FBMC to the extent that the actual quantity of material purchased/manufactured is not larger than the amount of the firm orders. The Responsible Party shall consider the worldwide sales and production needs when establishing its manufacturing campaign plans. A supply agreement to be entered between the Parties shall determine which and when forecasts shall become firm orders. 

            Such Period Costs shall include the valuation difference for inventory in stock resulting from any change of standard FBMC at that respective point in time. At least annually, the Responsible party will review and compare its standard FBMC for a Product when that particular material was produced to its new standard FBMC and make a retroactive adjustment to the inventory value, which should be charged to GenRoche Development as a Valuation Difference. 

            A.3.13    "Sales Costs" means as to each Product, Field Force Costs specifically attributable to the sales of such Product to all markets, including the managed care market, approved by the appropriate Party or joint Committee and included in the Annual Budget.  To the extent practicable, Sales Costs will be identified on a product-by-product basis.  Otherwise such Sales Costs shall be attributed between the products in a reasonable manner as determined by the JFC.  Field Force Costs, including Allocable Overhead, shall include costs associated with Sales Representatives, including compensation, benefits, travel, supervision and training of the Sales Representatives, sales meetings, and other sales expenses. Field Force Costs will not include the start-up costs associated with either Party's sales force, including recruiting, relocation and other similar costs.

 

- 31 -

 

            A.3.14    "Third Party" shall mean any individual or entity other than ROCHE, GENENTECH, or their respective Affiliates.

            A.3.15    "Third Party Royalties" shall mean both Parties' allocable intellectual property acquisition, licensing and royalty costs that are payable to Third Parties as a result of licenses for the manufacture, formulation, filling, use or sale of a Product.  Third Party Royalties related to a Product shall be shared between the Parties and charged to Other Operating Income/Expense within GenRoche Development. 

A.4     Audit and Interim Reviews

            A.4.1    The Parties' rights and obligations with respect to audit are set forth in Section 6.8 of the Agreement.  

            A.4.2    In addition, each Party ("Disclosing Party") shall provide the other Party ("Receiving Party"), as reasonably requested, with sharable work product generated by such Disclosing Party or its accountants with respect to the financial operations of the collaboration in preparation for and support of such Receiving Party's obligation to comply with the reporting obligations mandated under the Sarbanes Oxley Act of 2002 (including implemented federal regulations thereunder); provided, such Disclosing Party shall have the right to redact such work product to (i) remove any reference to any projects that are not subject to the Agreement or any molecule, drug candidate or product other than a Molecule, Drug Candidate or Product, and (ii) to preserve any right of confidentiality not otherwise governed by the terms of Article X of the Agreement; provided further, such Receiving Party shall only use such information disclosed hereunder to assist it in complying with the reporting obligations mandated under the Sarbanes Oxley Act of 2002.  All costs incurred by the Disclosing Party in complying with such request shall be reimbursed by the Receiving Party. 

            A.4.3    At either Party's written request, the other Party shall, to the extent commercially reasonable and practicable, commission, facilitate, support, and/or assist the other Party's officially appointed world-wide auditor with the execution of an agreed-upon procedures engagement (and written report thereon), whose scope, frequency and timing will be mutually agreed upon by the Parties (but shall be limited to one review per calendar year), to support the requesting Party's relevant internal control understanding and compliance assertions. Such reviews will be conducted at the expense of the requesting Party.

A.5.     Settlement Payments between the Parties

            A.5.1    General Terms.  Settlement Payments between the Parties will be approved by the applicable Committees, and will be detailed as Operating Profit or Loss, Development Costs and/or royalties (pursuant to Sections 3.8(a)(i), 6.3 or 6.4 of the Agreement).  Settlement Payments will be made quarterly based on actual results within ninety (90) days after the end of each quarter. The JFC will review and agree on the appropriate amount and nature of payments and payees required to achieve each Party's accounting and tax requirements.

            A.5.2    Currency and Taxes

All Settlement Payments under this Agreement shall be in US Dollars.  

Whenever calculation of Net Sales or any of the expenses (Distributions Costs, Period Costs, Marketing Costs, Sales Costs, Development Costs, and Other Operating Expenses, but not the FBMC component of Cost of Sales) or royalties (pursuant to Sections 3.8(a)(i), 6.3 or 6.4 of the Agreement) requires conversion from any foreign currency, ROCHE shall convert the amount in foreign currencies as computed in the ROCHE's central Swiss Francs Sales Statistics for the countries concerned.  ROCHE shall first convert the amount into Swiss Francs and then into US Dollars, using the average year-to-date rate of exchange for such currencies as retrieved from the Reuters' system for the applicable period, in accordance with ROCHE's then current standard practices.  Sales by GENENTECH shall first be calculated in the currency in which sales took place and then converted to United States Dollars using the average year-to-date rate of exchange for such currencies as retrieved from the Reuters' system for the applicable period, in accordance with GENENTECH's then current standard practices.  

 

- 32 -

 

Any payment hereunder not made when due shall bear interest thereon, computed at the LIBOR rate of interest as reported by Data Stream from time to time, plus two percent (2%) calculated on the number of days such Settlement Payment (or portion thereof) is delinquent, unless such payment is disputed through the applicable Committee. A Party shall make all payments hereunder by bank wire transfer in immediately available funds to such account as the other Party shall designate before such payment is due, free and clear of any taxes, duties, levies, fees or charges, except for withholding taxes (to the extent applicable).  

Any taxes, levies or duties paid or required to be withheld under the appropriate local tax laws by one of the Parties ("Withholding Party") on account of monies payable to the other Party ("Other Party") hereunder shall be deducted from the amount of monies otherwise payable to the Other Party. The Withholding Party shall secure and send to the Other Party proof of any such taxes, duties or levies paid or required to be withheld by Withholding Party for the benefit of the Other Party. 

A.6.     Accounting for Development Costs, Marketing Costs and Sales Costs

All Development Costs, Marketing Costs and Sales Costs will be based on the appropriate costs definition stated in Section A.3 of this Appendix.

Each Party shall report Development Costs in a manner consistent with its project cost system.  In general, these project cost systems report actual time spent on specific projects, apply the actual labor costs, capture actual costs of specific projects and allocate other expenses to projects.  For Marketing Costs and Sales Costs, the Parties will report costs based on spending in marketing and sales departments, respectively.  The Parties acknowledge that the methodologies used will be based on systems in place and consistent with Section A.10 of this Appendix.

A.7.     Sharing of Operating Profits and Losses and Development Costs

The Parties agree to share the Operating Profit or Loss and Development Costs resulting from the collaborative arrangement according to the following manner:

            A.7.1    Operating Profits and Losses.  With regard to all Products, for each calendar year or portion thereof, ROCHE and GENENTECH shall obtain the respective percentages outlined in Section 6.2 of the Agreement of any operating profits or losses, calculated on a Product-by-Product basis. 

            A.7.2    Development Costs.  With regard to all Molecules, Drug Candidates, and Products, for each calendar year or portion thereof, ROCHE and GENENTECH shall incur and/or carry the respective percentages outlined in Section 4.2a of the Agreement of any Development Costs, calculated on an individual Molecule, Drug Candidate or Product-by-Product basis. 

A.8.     Supply Price of Product

The total amount due for the supply of Product between the Parties shall be the amount defined below:

            A.8.1    Supply of Clinical and Pre-Clinical Requirements - The sales price of Drug Candidate or Product (including placebos) for clinical or pre-clinical purposes shall be the FBMC for such clinical requirements. Product manufactured as qualification lots and supplied for clinical purposes shall only be charged to the extent not previously included in Development Costs charged to GenRoche Development.

            A.8.2    Supply of Commercial Requirements - The sales price of Product for commercial purposes shall be one hundred twenty percent (120%) of FBMC, invoiced in US Dollars and paid within thirty (30) days after shipment.  Product supplied by a third party manufacturer shall be at cost. Product manufactured as qualification lots and supplied for commercial purposes shall only be charged to the extent not included in Development Costs.

 

- 33 -

 

A.9.     Start of Operations

Operation of GenRoche Development will be deemed to have commenced on the Effective Date.  Costs incurred on development projects or any other form of collaborative effort on any Product which has commenced prior to or is ongoing as of the Effective Date, are not a part of this Agreement and are not chargeable to GenRoche Development.  

A.10.     Guidelines for Charging Costs

The following guidelines shall be used in determining amounts chargeable to GenRoche Development subject to the cost definitions in Section A.3 of this Appendix.  Disputes over the allocation of costs are subject to the tie breaking procedures outlined in Sections 3.3, 4.6a, and 5.7(c) of the Agreement.

	 	
A.10.1
	
If an expense is specifically and exclusively (i.e., for no other product) used for the development or commercialization of a Molecule, Drug Candidate or Product, then one hundred percent (100%) of the expense will be charged to GenRoche Development.

	 	 	 
	 	
A.10.2
	
If an expense is not specifically and exclusively (i.e., for other products in addition to a Molecule, Drug Candidate or Product) used for the development or commercialization of a Molecule, Drug Candidate or Product, then the following shall apply:

	 	 	 
	 	
(a)
	
If the portion of that expense used for the development or commercialization of a Molecule, Drug Candidate or Product can be objectively determined through specific means (e.g., man hours of effort, amounts consumed, etc.), then the amount so used will be charged to GenRoche Development.

	 	 	 
	 	
(b)
	
If the portion of that expense used for the development or commercialization of a Molecule, Drug Candidate or Product cannot be objectively determined through specific means, then only the direct and incremental costs related to the Molecule, Drug Candidate or Product shall be charged to GenRoche Development.

A. 11.     Effective Accounting Date Termination for GenRoche Development

For reporting and accounting purposes with respect to GenRoche Development, the end of GenRoche Development will be the nearest month end to the effective termination date of the Agreement.

 

- 34 -

 

APPENDIX B

PARTIES' RESPONSIBILITIES

	 	 	

Copromotion Roles and Responsibilities
	

Responsible
	
Approval/Decision

Making
	

Comments

	
	
	
	
	
	

	
Marketing (including, not limited to)
	 	
Commercial Budget
	
Lead Party
	
Management 

Committee ("MC")
	
 

	
 
	 	
Commercial Strategy and Brand Plan
	
Lead Party
	
Lead Party
	
Pursuant with the current contract, Lead Party has the responsibility for generating the commercial plan and strategies.  Because the MC has final approval of the budget for the commercial plan, it is expected that every attempt will be made to ensure that both companies agree to the commercial plan and strategies.

	
 
	 	
Promotional Materials
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Journal Advertising
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Promotional Concept Development
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Nurse and Pharmacist Education
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Marketing Message Development
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Disease state education
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Medical Education (CME and non-CME)
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Advisory Boards (National and Regional)
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Speaker Bureau Development and execution
	
Lead Party
	
Lead Party
	
 

	
 
	 	
SympPartnering Partya
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Key Opinion Leader Interactions and Support
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Grant activities
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Speaker Slide Kits
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Trade Show activities
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Publications Planning and execution
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Patient Education
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Internet Marketing
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Product Sampling Plan
	
Lead Party
	
Lead Party
	
 

	
	
	
	
	
	

	
Public Relations (including, not limited to)
	 	
Product and launch related PR
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Spokesperson selection and training
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Press briefings
	
Lead Party/Partnering Party
	
JCC
	
If the JCC fails to decide on items assigned to it, dispute resolution will follow the path outlined in the contract

	
 
	 	
ODAC Preparations
	
Lead Party/Partnering Party
	
JCC
	 
	
 
	 	
PR Surrounding BLA Filing
	
Lead Party/Partnering Party
	
JCC
	
 

	
 
	 	
BR.21 PR announcements
	
Lead Party/Partnering Party
	
JCC
	
 

	
 
	 	
Patient Advocacy Group Relations
	
Lead Party
	
Lead Party
	
 

	
	
	
	
	
	

	
Distribution and Reimbursement (including, not limited to)
	 	
Distribution and Logistics
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Distributor/wholesaler communications
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Reimbursement Support Program
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Reimbursement materials
	
Lead Party
	
Lead Party
	
 

 

- 35 -

 

	
 
	 	
Clinical Trial Transition Plan to Commercial Product (Pre-launch)
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Indigent Patient Program
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Managed Care activities
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Public Payer Planning (Government Affairs)
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Contracting Strategy, Development & Negotiations
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Contract & Government Programs Administration (All Aspects including all calculations & reporting for both Commercial & Government Contracts.
	
Lead Pary
	
Lead Party
	
 

	
 
	 	
Health Economics Acitivities
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Customer Service/Order Management
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Field Managed Care
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Field Managed Care Marketing Programs/Customer Ed
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Formulary support
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Pharmacy activities, education, stocking programs
	
Lead Party
	
Lead Party
	
 

	 	 	
Channel Inventory Management 
	
Lead Party
	
Lead Party
	 
	
 
	 	
Distribution Data Warehousing & Reporting (SIM)
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Product Returns/Wastage Programs
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Report New Product Pricing & Price Increases to Pricing Compendia & Customers
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Quality Complaints & Replacement (QA)
	
Lead Party
	
Lead Party
	
 

	
	
	
	
	
	

	
Medical Communications (including, not limited to)
	 	
Customer Inquiries
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Standard Letters
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Customer FAQs
	
Lead Party
	
Lead Party
	
 

	
 
	 	
AMCP Dossier/Compendia Listing
	
Lead Party
	
Lead Party
	
 

	
	
	
	
	
	

	
Sales (including, not limited to)
	 	
Sales force sizing
	
Lead Party
	
Lead Party
	
Sales force sizing will be reviewed by the JCC as part of the commercial brand plan.  The MC will approve the budget

	
 
	 	
Territory determination and alignment
	
Lead Party
	
Lead Party
	
Partnering Party will review territory alignments at the JCC

	
 
	 	
Customer call targets and call plans
	
Lead Party
	
Lead Party
	
Partnering Party will review call targets at the JCC  Partnering Party may reject call targets, but may not add to the list.

	
 
	 	
Promotional pieces
	
Lead Party
	
Lead Party
	
Partnering Party Regulatory to review and provide comments, final decision making with Lead Party

	
 
	 	
Measuring impact of promotional plans (promotion response)
	 	 	
 

	
 
	 	
Sales product training - content development
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Ongoing product sales training - delivery
	
Lead Party
	
Lead Party
	
Each organization pays their own  travel & entertainment expenses for their own personnel to attend sales training and launch meetings

	
 
	 	
Product Launch / Sales meetings
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Sales communications materials
	
Lead Party
	
Lead Party
	
Lead Party shall develop Product related sales communications materials and provide to Partnering Party for distribution to Partnering Party sales force

	
 
	 	
Quarterly Plan of Action
	
Lead Party
	
Lead Party
	
 

 

- 36 -

 

	
 
	 	
Call reporting systems and execution
	
Lead Party
	
Lead Party
	
Partnering Party shall provide call reporting and CRM information to Lead Party in a format that is compatable with Lead Party systems

	
 
	 	
Lead Party Incentive Plan
	
Lead Party
	
Lead Party
	
Partnering Party and Lead Party shall ensure that the incentive comp plans of the two companies are in alignment

	
 
	 	
Lead Party Territory Budget
	
Lead Party
	
Lead Party
	
Partnering Party and Lead Party shall ensure that the territory budgets of the two companies are in alignment (Product related territory education and T&E budgets)

	
 
	 	
Sales Operations Management
	
Lead Party
	
Lead Party
	
 

	
	
	
	
	
	

	
Market Research (including, not limited to)
	 	
Market research activities
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Promotional Ad concept testing
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Launch metrics development
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Launch metrics tracking
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Competitive Intelligence
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Revenue forecasting
	
Lead Party
	
Lead Party
	
Revenue forcast will be reviewed at the JCC

	
 
	 	
Sales data collection,  valadation, reporting and analysis
	
Lead Party
	
Lead Party
	
 

	
 
	 	
Pricing
	
Lead Party
	
Lead Party
	
Pricing will be reviewed at the JCC

	
	
	
	
	
	

 

- 37 -Exhibit 4.2 to Transport Corporation of America Form 10-Q dated June 30, 2004

EXHIBIT 4.2  

U.S. $30,000,000 

SECOND AMENDED AND RESTATED CREDIT AGREEMENT 

DATED AS OF 

MAY 5, 2004 

AMONG 

TRANSPORT CORPORATION 

OF AMERICA, INC., 

THE BANKS PARTY HERETO, 

LASALLE BANK NATIONAL ASSOCIATION,

as Agent, 

AND 

U.S. BANK, NATIONAL ASSOCIATION,

as Documentation Agent 

-i- 

TABLE OF CONTENTS 

(This Table of Contents is not part of the Agreement) 

			PAGE

	SECTION 1.	 	DEFINITIONS; INTERPRETATION	 	1	 
	 
	      Section 1.1.	 	Definitions	 	1	 
	      Section 1.2. 	 	Interpretation 	 	13 	  
	 
	SECTION 2. 	 	THE REVOLVING CREDIT 	 	13 	 
	 
	      Section 2.1. 	 	The Revolving Loan Commitment 	 	13 
	      Section 2.2. 	 	Swingline Loans 	 	13 
	      Section 2.3. 	 	Letters of Credit 	 	15 
	      Section 2.4. 	 	Applicable Interest Rates 	 	17 
	      Section 2.5. 	 	Minimum Borrowing Amounts 	 	19 
	      Section 2.6. 	 	Manner of Borrowing Loans and Designating Interest Rates 
     Applicable to Loans 	 	
19 
	      Section 2.7. 	 	Interest Periods 	 	21 
	      Section 2.8. 	 	Maturity of Loans  	 	22 
	      Section 2.9. 	 	Prepayments 	 	22 
	      Section 2.10. 	 	Default Rate 	 	23 
	      Section 2.11. 	 	The Notes 	 	23 
	      Section 2.12. 	 	Funding Indemnity 	 	24 
	      Section 2.13. 	 	Commitment Terminations 	 	24 
	      Section 2.14. 	 	Extension of Commitments 	 	25 
	 
	SECTION 3.	 	FEES 	 	25 
	 
	      Section 3.1. 	 	Fees 	 	25 
	 
	SECTION 4. 	 	PLACE AND APPLICATION OF PAYMENTS; GUARANTEES 	 	26 
	 
	      Section 4.1. 	 	Place and Application of Payments 	 	26 
	      Section 4.2. 	 	Guarantees 	 	27 
	      Section 4.3. 	 	Collateral 	 	27 
	      Section 4.4. 	 	Further Assurances 	 	27 
	 
	SECTION 5. 	 	REPRESENTATIONS AND WARRANTIES 	 	27 
	 
	      Section 5.1. 	 	Corporate Organization and Authority 	 	27 
	      Section 5.2. 	 	Subsidiaries 	 	27 
	      Section 5.3. 	 	Corporate Authority and Validity of Obligations 	 	27 
	      Section 5.4. 	 	Financial Statements; No Material Adverse Change 	 	28 
	      Section 5.5. 	 	No Litigation; No Labor Controversies 	 	28 
	      Section 5.6. 	 	Taxes 	 	28 
	      Section 5.7. 	 	Approvals 	 	29 

-i- 

	      Section 5.8. 	 	ERISA 	 	29 	 
	 
	      Section 5.9. 	 	Government Regulation 	 	29 
	      Section 5.10. 	 	Margin Stock; Use of Proceeds 	 	29 
	      Section 5.11. 	 	Licenses and Authorizations; Compliance with Laws 	 	29 
	      Section 5.12. 	 	Ownership of Property 	 	30 
	      Section 5.13. 	 	Compliance with Agreements 	 	30 
	      Section 5.14. 	 	Full Disclosure 	 	30 
	      Section 5.15. 	 	Solvency 	 	30 
	      Section 5.16. 	 	Capitalization 	 	31 
	 
	SECTION 6. 	 	CONDITIONS PRECEDENT 	 	31 
	 
	      Section 6.1. 	 	Initial Credit Event 	 	31 
	      Section 6.2. 	 	All Credit Events 	 	32 
	      Section 6.3. 	 	Determinations Under Section 6.1. 	 	33 
	 
	SECTION 7. 	 	COVENANTS 	 	33 
	 
	      Section 7.1. 	 	Corporate Existence; Subsidiaries 	 	33 
	      Section 7.2. 	 	Maintenance 	 	33 
	      Section 7.3. 	 	Taxes 	 	33 
	      Section 7.4. 	 	ERISA 	 	33 
	      Section 7.5. 	 	Insurance 	 	34 
	      Section 7.6. 	 	Financial Reports and Other Information 	 	34 
	      Section 7.7. 	 	Bank Inspection Rights 	 	36 
	      Section 7.8. 	 	Conduct of Business 	 	36 
	      Section 7.9. 	 	Use of Proceeds; Regulation U 	 	36 
	      Section 7.10. 	 	Mergers, Consolidations and Sales 	 	36 
	      Section 7.11. 	 	Use of Property and Facilities; Environmental and Health and 
     Safety Laws 	 	
37 
	      Section 7.12. 	 	Dividends and Other Shareholder Distributions 	 	37 
	      Section 7.13. 	 	Compliance with Laws 	 	37 
	      Section 7.14. 	 	Net Worth 	 	37 
	      Section 7.15. 	 	Consolidated Funded Indebtedness to Consolidated EBITDAR 	 	37 
	      Section 7.16. 	 	Minimum Cash Flow Coverage 	 	37 
	      Section 7.17. 	 	Indebtedness 	 	38 
	      Section 7.18. 	 	Liens 	 	38 
	      Section 7.19. 	 	Investments, Acquisitions, Loans, Advances and Guaranties 	 	39 
	 
	SECTION 8. 	 	EVENTS OF DEFAULT AND REMEDIES 	 	41 
	 
	      Section 8.1. 	 	Events of Default 	 	41 
	      Section 8.2. 	 	Non-Bankruptcy Defaults 	 	42 
	      Section 8.3. 	 	Bankruptcy Defaults 	 	43 
	      Section 8.4. 	 	Collateral for Undrawn Letters of Credit 	 	43 
	      Section 8.5. 	 	Expenses 	 	44 

-ii- 

	SECTION 9. 	 	CHANGE IN CIRCUMSTANCES 	 	44 	 
	 
	      Section 9.1. 	 	Change of Law 	 	44 
	      Section 9.2. 	 	Unavailability of Deposits or Inability to Ascertain, or 
     Inadequacy of, LIBOR 	 	
44 
	      Section 9.3. 	 	Increased Cost and Reduced Return 	 	45 
	      Section 9.4. 	 	Lending Offices 	 	46 
	      Section 9.5. 	 	Discretion of Bank as to Manner of Funding 	 	46 
	 
	SECTION 10. 	 	THE AGENT 	 	47 
	 
	      Section 10.1. 	 	Appointment and Authorization of Agent 	 	47 
	      Section 10.2. 	 	Agent and its Affiliates 	 	47 
	      Section 10.3. 	 	Action by Agent 	 	47 
	      Section 10.4. 	 	Consultation with Experts 	 	47 
	      Section 10.5. 	 	Liability of Agent; Credit Decision 	 	47 
	      Section 10.6. 	 	Indemnity 	 	48 
	      Section 10.7. 	 	Resignation of Agent and Successor Agent 	 	48 
	      Section 10.8. 	 	Documentation Agent 	 	49 
	 
	SECTION 11. 	 	MISCELLANEOUS 	 	49 
	 
	      Section 11.1. 	 	Withholding Taxes 	 	49 
	      Section 11.2. 	 	No Waiver of Rights 	 	50 
	      Section 11.3. 	 	Non-Business Day 	 	50 
	      Section 11.4. 	 	Documentary Taxes 	 	50 
	      Section 11.5. 	 	Survival of Representations 	 	50 
	      Section 11.6. 	 	Survival of Indemnities 	 	50 
	      Section 11.7. 	 	Set-Off 	 	50 
	      Section 11.8. 	 	Notices 	 	51 
	      Section 11.9. 	 	Counterparts 	 	52 
	      Section 11.10. 	 	Successors and Assigns 	 	52 
	      Section 11.11. 	 	Participants 	 	53 
	      Section 11.12. 	 	Assignment of Commitments by Banks 	 	53 
	      Section 11.13. 	 	Amendments 	 	54 
	      Section 11.14. 	 	Headings 	 	54 
	      Section 11.15. 	 	Legal Fees, Other Costs and Indemnification 	 	54 
	      Section 11.16. 	 	Entire Agreement 	 	54 
	      Section 11.17. 	 	Construction 	 	55 
	      Section 11.18. 	 	Governing Law 	 	55 
	      Section 11.19. 	 	Submission to Jurisdiction; Waiver of Jury Trial 	 	55 
	 
	Signature 	 	  	 	1 

-iii- 

	 	 		 	 	 
	EXHIBITS 	 
	 
	      EXHIBIT A-1 	 	Form of Revolving Note 
	      EXHIBIT A-2 	 	Form of Swingline Note 
	      EXHIBIT B 	 	Assignment and Acceptance Agreement 
	      EXHIBIT C 	 	Form of Borrowing Base Confirmation 
	      EXHIBIT D 	 	Form of Compliance Certificate 
	 
	SCHEDULES	 
	 
	      SCHEDULE 1 	 	Pricing Grid 
	      SCHEDULE 5.2 	 	Existing Subsidiaries 
	      SCHEDULE 5.5 	 	Litigation and Labor Controversies 
	      SCHEDULE 5.12 	 	Liens 
	      SCHEDULE 5.16 	 	Capitalization 
	      SCHEDULE 7.17(c) 	 	Outstanding Secured Revenue Equipment Debt 
	      SCHEDULE 7.17(d) 	 	Existing Indebtedness 

-iv- 

SECOND AMENDED AND RESTATED CREDIT AGREEMENT 

        SECOND AMENDED AND
RESTATED CREDIT AGREEMENT, dated as of May 5, 2004, among Transport Corporation of America, Inc., a Minnesota
corporation (the “Borrower”), the banks from time to time party hereto (each a “Bank,”
and collectively the “Banks”) and LaSalle Bank National Association (“LaSalle”) in
its capacity as agent for the Banks hereunder (in such capacity, the “Agent”) and U.S. Bank, National
Association (formerly known as Firstar Bank, N.A. and Firstar Bank of Minnesota, National Association) (“U.S.
Bank”), in its capacity as documentation agent (the
“Documentation Agent”). 

WITNESSETH THAT: 

        WHEREAS, the
Borrower, LaSalle and U.S. Bank are currently party to that certain Amended and Restated Credit Agreement dated as of
October 5, 2001, as amended by (i) that certain First Amendment to the Amended and Restated Credit Agreement
dated as of March 18, 2002 and (ii) that certain Second Amendment and Consent to Amended and Restated Credit
Agreement dated as of December 9, 2003 (together, the “Prior Credit Agreement”). The Borrower has
requested that the Prior Credit Agreement be amended in certain respects as described below to, inter alia, make
certain additional modifications to the Prior Credit Agreement, and for the sake of clarity and convenience, the
Borrower has requested that the Prior Credit Agreement be restated as so amended. This Agreement shall become effective,
and shall amend and restate the Prior Credit Agreement, on (1) the execution of this Agreement by the Borrower, the
Agent and the Banks and (2) the satisfaction of the conditions precedent contained in Section 6.1 hereof; and
from and after the Effective Date, (i) all references made to the Prior Credit Agreement in the Credit Documents (other
than this Agreement) or in any other instrument or document shall, without more, be deemed to refer to this Agreement
and (ii) the Prior Credit Agreement shall be deemed amended and restated in its entirety hereby. 

        WHEREAS, the
Borrower has requested that the Banks continue to extend credit to the Borrower, and those Banks, upon the occurrence of
the Effective Date and subject to the terms hereof, will continue to lend monies and/or make advances, extensions of
credit or other financial accommodations to, on behalf of or for the benefit of the Borrower pursuant hereto.

        NOW, THEREFORE, in
consideration of the recitals set forth above, which by this reference are incorporated into this Agreement set forth
below, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and
subject to the terms and conditions hereof and on the basis of the representations and warranties herein set forth, the
Borrower, the Agent and the Banks hereby agree to the following: 

SECTION 1.    DEFINITIONS; INTERPRETATION. 

    Section 1.1.       Definitions.   The
following terms when used herein have the following meanings: 

-1- 

        “Account”
is defined in Section 8.4(b) hereof. 

        “Adjusted
LIBOR” is defined in Section 2.4(b) hereof. 

        “Affiliate”means,
as to any Person, any other Person which directly or indirectly controls, or is under common control with, or is
controlled by, such Person. As used in this definition, “control” (including, with their correlative
meanings, “controlled by” and “under common control with”) means possession, directly
or indirectly, of power to direct or cause the direction of management or policies of a Person (whether through
ownership of securities or partnership or other ownership interests, by contract or otherwise), provided that, in
any event for purposes of this definition: (i) any Person which owns directly or indirectly 5% or more of the
securities having ordinary voting power for the election of directors or other governing body of a corporation or 5% or
more of the partnership or other ownership interests of any other Person (other than as a limited partner of such other
Person) will be deemed to control such corporation or other Person; and (ii) each director and executive officer of the
Borrower or any Subsidiary shall be deemed an Affiliate of the Borrower and each Subsidiary. Notwithstanding the
foregoing, none of the Banks shall be deemed to be affiliates of the Borrower or any of its Subsidiaries. 

        “Agent”
is defined in the first paragraph of this Agreement and includes any successor Agent pursuant to Section 10.7
hereof. 

        “Agreement” means
this Second Amended and Restated Credit Agreement, including all Exhibits and Schedules hereto, as it may be amended,
supplemented or otherwise modified from time to time in accordance with the terms hereof. 

        “Applicable
Margin” means, (1) at any time with respect to Eurodollar Loans, the Eurodollar Margin and (2) at any time with
respect to Base Rate Loans, the Base Rate Margin. 

        “Application”
is defined in Section 2.3(b) hereof. 

        “Assignment
and Acceptance Agreement” means an Assignment and Acceptance Agreement in substantially the same form as
Exhibit B attached hereto. 

        “Authorized
Representative” means those persons shown on the list of officers provided by the Borrower pursuant to
Section 6.1(e) hereof, or on any updated such list provided by the Borrower to the Agent, or any further or
different officer of the Borrower so named by any Authorized Representative of the Borrower in a written notice to the
Agent. 

        “Bank” is
defined in the first paragraph of this Agreement. 

        “Base Rate” is
defined in Section 2.4(a) hereof. 

        “Base Rate Margin”
means the percentage set forth in Schedule 1 hereto beside the then applicable leverage ratio. 

-2- 

        “Base Rate
Loan” means a Loan bearing interest prior to maturity at a rate specified in Section 2.4(a) hereof. 

        “Borrower” is
defined in the first paragraph of this Agreement. 

        “Borrowing”
means the total of Loans of a single type advanced, continued for an additional Interest Period, or converted from a different type
into such type by the Banks on a single date and for a single Interest Period. Borrowings of Revolving Loans are made and maintained
ratably from each of the Banks according to their Percentages. Borrowings of Swingline Loans are made by the Swingline Bank in
accordance with Section 2.2. A Borrowing is “advanced” on the day Banks advance funds comprising such
Borrowing to the Borrower, is “continued” on the date a new Interest Period for the same type of Loans commences
for such Borrowing, and is “converted” when such Borrowing is changed from one type of Loan to the other, all as
requested by the Borrower pursuant to Section 2.6(a). 

        “Borrowing
Base” means, as of any time it is to be determined, the sum of: 

		        (a)    85%
of the remainder of the then outstanding unpaid amount of Eligible Accounts less any and all returns, rebates, discounts (which may,
at the Agent’s option, be calculated on the shortest terms), credits, allowances, finance charges and/or taxes of any nature at
any time issued, owing, available to or claimed by account debtors, granted, outstanding or payable in connection with such Eligible
Accounts at such time; plus 

		        (b)   the
lesser of (i) (x) the net book value (computed by the Borrower in accordance with GAAP) of Revenue Equipment owned by the Borrower
and its Subsidiaries in which the Collateral Agent has a perfected, first security interest times 70% and (ii) the Revenue Equipment
Cap; 

provided that the Borrowing Base shall be computed only as against and
on so much of such Property as is included on the certificates to be furnished from time to time by the Borrower pursuant to this
Agreement and, if required by the Agent pursuant to any of the terms hereof, as verified by such other evidence required to be
furnished to the Agent pursuant hereto. 

        “Borrowing
Base Confirmation” means a Borrowing Base Confirmation in the form of
Exhibit C attached hereto. 

        “Business
Day” means any day other than a Saturday or Sunday on which banks are not
authorized or required to close in Chicago, Illinois and, if the applicable Business Day
relates to the Borrowing or payment of a Eurodollar Loan, on which banks are dealing in
U.S. Dollar deposits in the interbank market in London, England. 

        “Capital
Lease” means at any date any lease of Property which, in accordance with GAAP,
would be required to be capitalized on the balance sheet of the lessee. 

-3- 

        “Capitalized
Lease Obligations” means, for any Person, the amount of such Person’s
liabilities under Capital Leases determined at any date in accordance with GAAP. 

        “Cash
Capex” shall equal the dollar amount of those capital expenditures made by the
Borrower that are not externally financed during the applicable Test Period. 

        “Change of
Control” means (i) any “Person” or “group” (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act) is or shall become the “beneficial owner” (as defined in
Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of 20% or more on a fully diluted basis of the
Voting Stock of the Borrower or shall have the right to elect a majority of the directors of the Borrower (provided, that directors
and officers of the Borrower shall not be deemed to beneficially own each other’s Voting Stock of the Borrower solely due to
their status as directors or officers of the Borrower) or (ii) a majority of the Board of Directors of the Borrower shall cease
to consist of Continuing Directors. 

        “CMLTD”
shall mean, for the then applicable Test Period, all scheduled payments of principal
made during the applicable Test Period on indebtedness recorded on the Borrower’s
balance sheet calculated in accordance with GAAP. 

        “Code”
means the Internal Revenue Code of 1986, as amended. 

        “Collateral”
is defined in Section 4.3. 

      “Collateral
Agent” means LaSalle. 

        “Commitment
Fee Rate” means the percentage set forth in Schedule 1 hereto beside the
then applicable ratio of Consolidated Funded Indebtedness to Consolidated EBITDAR. 

        “Commitments”
is defined in Section 2.1 hereof. 

        “Consolidated
EBIT” shall mean, for the then applicable Test Period, Consolidated Net Income of the Borrower and its Subsidiaries, before
total interest expense (whether cash or non-cash) and provisions for taxes based on income, and determined without giving effect to
any extraordinary gains or losses but with giving effect to gains or losses from sales of assets (including, Revenue Equipment) sold
in the ordinary course of business. 

        “Consolidated
EBITDAR” shall mean, for the then applicable Test Period, Consolidated EBIT, adjusted by adding thereto the amount of all
expenses for depreciation, amortization and Lease Rental Expenses that were deducted in determining Consolidated EBIT. In computing
Consolidated EBITDAR, any of the foregoing items realized or accrued for such period and prior to the date of any acquisition
permitted by Section 7.19 by the Person so acquired or attributable to the assets so acquired shall be included in Consolidated
EBITDAR, but only to the extent that such items of such Person or attributable to such assets would have been available to the
Borrower or its Subsidiary had the Borrower or such Subsidiary acquired such Person or such 

-4- 

assets at the beginning of such period, such calculations to be made with such
other adjustments thereto as mutually agreed to by the Borrower and the Agent. 

        “Consolidated
Funded Indebtedness” shall mean, for the then applicable Test Period, the sum of (i) all short term Indebtedness of
the Borrower and its Subsidiaries (including the current maturities of long-term indebtedness), plus (ii) all long term
Indebtedness of the Borrower and its Subsidiaries, including Capitalized Lease Obligations, plus (iii) the present value (using
a discount rate of 10% per annum) of non-cancelable operating leases of the Borrower and its Subsidiaries, plus (iv) the
undrawn amount of all standby letters of credit issued for the account of the Borrower and its Subsidiaries, including any unpaid
reimbursement obligations thereunder. 

        “Consolidated
Interest and Rental Expense” shall mean, for the then applicable Test Period, total interest expense (including amounts
properly attributable to interest with respect to Capital Leases in accordance with GAAP and amortization of debt discount and debt
issuance costs) and Lease Rental Expense of the Borrower and its Subsidiaries on a consolidated basis for such period with respect
to all outstanding Indebtedness of the Borrower and its Subsidiaries, including, without limitation, all commissions, discounts and
other fees and charges owed with respect to letters of credit and bankers’ acceptance financing and net costs or benefits under
interest rate protection agreements. 

        “Consolidated
Net Income” means, for any period, the net income (or net loss) of the Borrower
and its Subsidiaries for such period computed on a consolidated basis in accordance with
GAAP. 

        “Continuing
Directors” means the directors of the Borrower on the Effective Date and each
other director, if such director’s nomination for election to the Board of Directors
of the Borrower is recommended by a majority of the then Continuing Directors. 

        “Contractual
Obligation” means, as to any Person, any provision of any security issued by such
Person or of any agreement, instrument or undertaking to which such Person is a party or
by which it or any of its Property is bound. 

        “Controlled
Group” means all members of a controlled group of corporations and all trades and
businesses (whether or not incorporated) under common control that, together with the
Borrower or any of its Subsidiaries, are treated as a single employer under
Section 414 of the Code. 

        “Credit
Documents” means this Agreement, the Security Agreement, the Guarantees, the
Notes, the Applications and the Letters of Credit. 

        “Credit
Event” means the advancing of any Loan, the continuation of or conversion into a
Eurodollar Loan, or the issuance of, or extension of the expiration date or increase in
the amount of, any Letter of Credit. 

        “Credit
Parties” means the Borrower and each Guarantor. 

-5- 

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

        
“Effective Date” means the date on which the Agent has received signed
counterpart signature pages of this Agreement from each of the signatories (or, in the
case of a Bank, confirmation that such Bank has executed such a counterpart and dispatched
it for delivery to the Agent) and the documents required by Section 6.1 hereof. 

        “Eligible
Accounts” means all accounts receivable of the Borrower; provided that in no
event shall an account receivable be deemed an Eligible Account unless such account
receivable: 

		        (a)    arises
out of the sale by the Borrower of finished goods inventory delivered to and accepted by, or out of the rendition by the Borrower of
services fully performed by the Borrower and accepted by, the account debtor on such account receivable and such account receivable
otherwise represents a final sale; 

		        (b)    the
account debtor on such account receivable is located within the United States of America or Canada or, if such right has arisen out
of the sale of such goods shipped to, or out of the rendition of services to, an account debtor located in any other country, such
right is secured by a valid and irrevocable letter of credit pursuant to which any of the Borrower or its transferee may draw on a
lender reasonably acceptable to the Agent for the full amount thereof; 

		        (c)    is
the valid, binding and legally enforceable obligation of the account debtor obligated thereon and such account debtor is not
(i) a Subsidiary or an Affiliate of the Borrower, (ii) a shareholder (who owns 5% or more of the Voting Stock of the
Borrower or any of its Subsidiaries), director, officer or employee of the Borrower or any Subsidiary, (iii) the United States
of America, or any state or political subdivision thereof, or any department, agency or instrumentality of any of the foregoing,
unless the Borrower has complied with the Assignment of Claims Act or any similar state or local statute, as the case may be, to the
satisfaction of the Agent (iv) a debtor under any proceeding under the United States Bankruptcy Code, as amended, or any other
comparable bankruptcy or insolvency law, or (v) an assignor for the benefit of creditors; 

		        (d)    is
not evidenced by an instrument or chattel paper unless the same has been endorsed and delivered to the Agent; 

		        (e)    is
an asset of the Borrower to which it has good and marketable title, is freely assignable; 

		        (f)    is
not owing from an account debtor who is also a creditor or supplier of the Borrower, is not subject to any offset, counterclaim or
other defense with respect thereto and, with respect to said account receivable or the contract or purchase order out of which the
same arose, no surety bond was required or given in connection therewith; 

		        (g)    is
not unpaid more than 90 days after the original invoice date; and 

-6- 

		        (h)    does
not arise from a sale to an account debtor on a bill-and-hold, guaranteed sale, sale-or-return, sale-on-approval, consignment or any
other repurchase or return basis. 

        “Environmental and
Health Laws” means any and all federal, state and local statutes, laws, regulations, ordinances, judgments, permits and
other governmental rules or regulations relating to human health, safety (including without limitation occupational safety and
health standards), or the environment or to emissions, discharges or releases of pollutants, contaminants, hazardous or toxic
substances, wastes or any other controlled or regulated substance into the environment, including without limitation ambient air,
surface water, ground water or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants, hazardous or toxic substances, wastes or any other controlled or
regulated substance or the clean-up or other remediation thereof. 

        “ERISA”
is defined in Section 5.8 hereof. 

        “Eurodollar
Loan” means a Loan bearing interest prior to maturity at the rate specified in
Section 2.4(b) hereof. 

        “Eurodollar
Margin” means the percentage set forth in Schedule 1 hereto beside the then
applicable leverage ratio. 

        “Eurodollar
Reserve Percentage” is defined in Section 2.4(b) hereof. 

        “Event
of Default” means any of the events or circumstances specified in
Section 8.1 hereof. 

        “Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder. 

        “Federal
Funds Rate” means the fluctuating interest rate per annum described in
part (x) of clause (ii) of the definition of Base Rate set forth in
Section 2.4(a) hereof. 

        “Fee
Letter” means that certain letter between the Agent, the Issuing Agent and the
Borrower dated on or about March 11, 2004 pertaining to fees to be paid by the
Borrower to the Agent and the Issuing Agent for their sole account and benefit. 

        “GAAP” means
generally accepted accounting principles as in effect in the United States from time to time, applied by the Borrower and its
Subsidiaries on a basis consistent with the preparation of the Borrower’s financial statements furnished to the Banks as
described in Section 5.4 hereof. 

        “Guarantor”
shall mean each Subsidiary of the Borrower that is or becomes a party to the Guarantees. 

-7- 

        “Guarantees”
shall mean the guaranty agreements in form satisfactory to the Agent executed by all
Subsidiaries of the Borrower. 

        “Guaranty”
by any Person means all obligations (other than endorsements in the ordinary course of
business of negotiable instruments for deposit or collection) of such Person guaranteeing
or in effect guaranteeing any Indebtedness, dividend or other obligation (including,
without limitation, limited or full recourse obligations in connection with sales of
receivables or any other Property) of any other Person (the “primary
obligor”) in any manner, whether directly or indirectly, including, without
limitation, all obligations incurred through an agreement, contingent or otherwise, by
such Person: (i) to purchase such Indebtedness or obligation or any Property or
assets constituting security therefor, (ii) to advance or supply funds (x) for
the purchase or payment of such Indebtedness or obligation, or (y) to maintain
working capital or other balance sheet condition, or otherwise, of the primary obligor, or
(iii) to lease property or to purchase Securities or other property or services
primarily for the purpose of assuring the owner of such Indebtedness or obligation of the
ability of the primary obligor to make payment of the Indebtedness or obligation, or
(iv) otherwise to assure the owner of the Indebtedness or obligation of the primary
obligor against loss in respect thereof; provided, however, that the term
“Guaranty” shall not include any guarantees by the Borrower of the loans made to
independent truck drivers leasing or contracting for equipment and services with the
Borrower up to a maximum principal amount of $3,000,000 at any one time outstanding. For
the purpose of all computations made under this Agreement, the amount of a Guaranty in
respect of any obligation shall be deemed to be equal to the maximum aggregate amount of
such obligation or, if the Guaranty is limited to less than the full amount of such
obligation, the maximum aggregate potential liability under the terms of the Guaranty. 

        “Hazardous
Material” means any substance or material which is hazardous or toxic, and
includes, without limitation, (a) asbestos, polychlorinated biphenyls, dioxins and
petroleum or its by-products or derivatives (including crude oil or any fraction thereof)
and (b) any other material or substance classified or regulated as “hazardous”
or “toxic” pursuant to any Environmental and Health Law. 

        
“Immaterial Subsidiary” means any Subsidiary of the Borrower which does not
own, individually, assets in excess of 5% of the Net Worth at any time; provided
that Immaterial Subsidiaries owning assets, in the aggregate, in excess of 20% of the Net
Worth at any time shall cease to qualify as Immaterial Subsidiaries. 

        “Indebtedness”
means and includes, for any Person, all obligations of such Person, without duplication, which are required by GAAP to be shown as
liabilities on its balance sheet, and in any event shall include all of the following whether or not so shown as liabilities
(i) obligations of such Person for borrowed money, (ii) obligations of such Person representing the deferred purchase
price of property or services (except trade payables), (iii) obligations of such Person evidenced by bonds, debentures, notes
or other instruments of such Person or noncontingent reimbursement or payment obligations arising out of letters of credit,
acceptances or other surety instrument issued for such Person’s account, (iv) obligations, whether or not assumed, secured
by Liens or payable out of the proceeds or production from Property now or hereafter owned or acquired by such Person,
(v) Capitalized Lease Obligations of such Person, 

-8- 

(vi) a principal portion of synthetic leases to which such Person is a
party as lessee, (vii) obligations for which such Person is obligated pursuant to a Guaranty and (viii) any equity of such
Person or agreement to acquire or redeem such equity that, by the terms of any provision thereof or agreement related thereto, is
upon the happening of any event or passage of time, prior to the Termination Date puttable to, or required to be redeemed by, the
Person. 

        “Interest
Period” is defined in Section 2.7 hereof. 

        “Issuing
Agent” means LaSalle in its capacity as issuing agent, or any other Bank acting
in replacement thereof with the consent of the Agent, the Banks and the Borrower. 

        “L/C
Documents” means the Letters of Credit, any draft or other document presented in
connection with a drawing thereunder, the Applications and this Agreement. 

      “L/C
Facility Limit” means $8,000,000. 

        “L/C
Fee Rate” means, at any time a rate per annum equal to Eurodollar Margin. 

        “L/C Obligations”
means the aggregate undrawn face amounts of all outstanding Letters of Credit and all
unpaid Reimbursement Obligations. 

        “LaSalle”
is defined in the first paragraph hereof. 

        “Lease
Rental Expense” means, for any period, all lease rental payments made by the
Borrower and its Subsidiaries on operating leases which have an original term of more than
one year. 

        “Lending
Office” is defined in Section 9.4 hereof. 

        “Letter
of Credit” is defined in Section 2.3(a) hereof. 

        “LIBOR”
is defined in Section 2.4(b) hereof. 

        “Lien”
means any interest in Property securing an obligation owed to, or a claim by, a Person other than the owner of the Property, whether
such interest is based on the common law, statute or contract, including, but not limited to, the security interest or lien arising
from a mortgage, encumbrance, pledge, conditional sale, security agreement or trust receipt, or a lease, consignment or bailment for
security purposes. The term “Lien” shall also include reservations, exceptions, encroachments, easements, rights of
way, covenants, conditions, restrictions, capital leases and other title exceptions and encumbrances affecting Property. For the
purposes of this definition, a Person shall be deemed to be the owner of any Property which it has acquired or holds subject to a
conditional sale agreement, Capital Lease or other arrangement pursuant to which title to the Property has been retained by or
vested in some other Person for security purposes, and such retention of title shall constitute a “Lien.”

-9- 

        “Loan” means,
unless otherwise provided, each and every loan made by any Bank hereunder and includes Revolving Loans and Swingline Loans.

        “Mandatory
Borrowing” is defined in Section 2.2(b) hereof. 

        “Material
Adverse Effect” means a material adverse change in, or a material adverse effect
upon, the operations, business, Property, or financial or other condition of the Borrower
and its Subsidiaries, taken as whole. 

      “Maximum
Swingline Amount” means $3,000,000. 

        “Net
Proceeds from Asset Sales” shall mean the cash proceeds received from the
trade-in or sale of Revenue Equipment, net of all reasonable out-of-pocket fees,
commissions and other reasonable and customary direct expenses incurred in connection with
such trade-in or sale, in the ordinary course of business during the applicable Test
Period. 

        “Net
Worth” means, as of any time the same is to be determined, the total
shareholders’ equity (including capital stock, additional paid-in-capital and
retained earnings after deducting treasury stock, but excluding minority interests in
Subsidiaries) which would appear on the balance sheet of the Borrower and its Subsidiaries
determined on a consolidated basis in accordance with GAAP. 

        “Note”
means and includes Revolving Notes and Swingline Notes. 

        “Obligations”
means all fees payable hereunder, all obligations of the Borrower to pay principal or
interest on Loans and L/C Obligations, and all other payment obligations of the Borrower
arising under or in relation to any Credit Document. 

        “Participating
Interest” is defined in Section 2.3(d) hereof. 

        “PBGC”
is defined in Section 5.8 hereof. 

        “Percentage”
means, for each Bank, the percentage of the Commitments represented by such Bank’s
Commitment or, if the Commitments have been terminated, the percentage held by such Bank
(including through participation interests in Swingline Loans and L/C Obligations) of the
Obligations on the day such amount is being computed. 

        “Person”
means an individual, partnership, corporation, limited liability company, association,
trust, unincorporated organization or any other entity or organization, including a
government or any agency or political subdivision thereof. 

        “Plan”
means at any time an employee pension benefit plan covered by Title IV of ERISA or subject to the minimum funding standards
under Section 412 of the Code that is either (i) maintained by a member of the Controlled Group or (ii) maintained
pursuant to a collective bargaining agreement or any other arrangement under which more than one employer makes contributions and to
which a member of the Controlled Group is then making or accruing an 

-10- 

obligation to make contributions or has within the preceding five plan years
made contributions. The term “Plan” shall not include any plan maintained or contributed to by North Star
Transport, Inc. prior to July 1, 1998. 

        “Pledged
Revenue Equipment” shall mean (i) that certain Revenue Equipment owned by
the Borrower and its Subsidiaries as of the date hereof in which the Collateral Agent has
a perfected, first security interest and (ii) any future pledge of additional Revenue
Equipment in which the Collateral Agent has a perfected, first security interest, and
excluding such Revenue Equipment from time to time released by the Collateral Agent. 

        “Pricing
Date” is defined in Schedule 1 hereto. 

        “Prior
Credit Agreement” is defined in the recitals hereto. 

        “Property”
means, as to any Person, all types of real, personal, tangible, intangible or mixed
property owned by such Person whether or not included in the most recent balance sheet of
such Person and its subsidiaries under GAAP. 

        “Reference
Bank” means LaSalle. In the event that such Bank ceases to be a
“Bank” hereunder or fails to provide timely quotations of interests rates
to the Agent as and when required by this Agreement, then such Bank shall be replaced by a
new reference bank jointly designated by the Agent and the Borrower. 

        “Refunding
Borrowing” is defined in Section 2.6(d) hereof. 

        “Reimbursement
Obligation” is defined in Section 2.3(c) hereof. 

        “Required
Banks” means, as of the date of determination thereof, (i) at any time there are
two or fewer Banks party hereto, all such Banks and (ii) at any time there are more than
two Banks party hereto (A) prior to the termination of the Commitments, Banks holding at
least 51% of the Percentages and (B) following the termination of the Commitments, Banks
holding at least 51% of the Loans and L/C Obligations. 

        “Revenue
Equipment” means tractors and trailers and associated attachments of all types
used by the Borrower or its Subsidiaries for the transportation of goods for its customers
in the ordinary course of its business. 

      “Revenue
Equipment Cap” means $10,000,000. 

        “Revolving
Loans” is defined in Section 2.1 hereof. 

        “Revolving Note”
is defined in Section 2.11 hereof. 

        “SEC”
means the Securities and Exchange Commission. 

-11- 

        “Security”
has the same meaning as in Section 2(l) of the Securities Act of 1933, as amended. 

        “Security
Agreement” means that certain Security Agreement, dated as of June 7, 2001,
among the Borrower and the Collateral Agent, as the same may be amended, modified,
supplemented or restated from time to time. 

        “Shortfall
Amount” is defined in Section 2.9(c) hereof. 

        “Subsidiary”
means, as to the Borrower, any corporation or other entity of which more than fifty
percent (50%) of the Voting Stock of such corporation or similar governing body in the
case of a non-corporation (irrespective of whether or not, at the time, stock or other
equity interests of any other class or classes of such corporation or other entity shall
have or might have voting power by reason of the happening of any contingency) is at the
time directly or indirectly owned by the Borrower or by one or more of its Subsidiaries. 

        “Swingline
Bank” shall mean U.S. Bank, National Association, in its capacity as swingline
bank, or any other Bank acting in replacement thereof with the consent of the Agent and
the Borrower. 

        “Swingline
Expiry Date” shall mean the date which is two Business Days prior to the
Termination Date. 

        “Swingline
Loans” is defined in Section 2.2(a) hereof. 

        “Swingline Note”
is defined in Section 2.11 hereof. 

        “Telerate
Page 3750” is defined in Section 2.4(b) hereof. 

        “Telerate Service”
means the Dow Jones Telerate Service. 

        “Termination
Date” means May 4, 2007 or such later date to which the same is extended
pursuant to Section 2.14 hereof. 

        “Test
Period” shall mean the four consecutive fiscal quarters of the Borrower then last
ended, in each case taken as one accounting period. 

        “Unfunded
Vested Liabilities” means, with respect to any Plan at any time, the amount (if
any) by which (i) the present value of all vested nonforfeitable accrued benefits
under such Plan exceeds (ii) the fair market value of all Plan assets allocable to
such benefits, all determined as of the then most recent valuation date for such Plan, but
only to the extent that such excess represents a potential liability of a member of the
Controlled Group to the PBGC or the Plan under Title IV of ERISA. 

        “U.S. Bank” is
defined in the first paragraph hereof.  

-12- 

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

        “Voting
Stock” of any Person means capital stock of any class or classes or other equity interests (however designated) having
ordinary voting power for the election of directors or similar governing body of such Person. 

        “Welfare
Plan” means a “welfare plan”, as defined in Section 3(1) of ERISA. 

        “Wholly-Owned”
when used in connection with any Subsidiary of the Borrower means a Subsidiary of which all of the issued and outstanding shares of
stock or other equity interests (other than directors’ qualifying shares as required by law) shall be owned by the Borrower
and/or one or more of its Wholly-Owned Subsidiaries. 

        Section 1.2.   Interpretation.   The
foregoing definitions shall be equally applicable to both the singular and plural forms of the terms defined. All references to
times of day in this Agreement shall be references to Chicago, Illinois time unless otherwise specifically provided. Where the
character or amount of any asset or liability or item of income or expense is required to be determined or any consolidation or
other accounting computation is required to be made for the purposes of this Agreement, the same shall be done in accordance with
GAAP, to the extent applicable, except where such principles are inconsistent with the specific provisions of this Agreement.

SECTION 2.    THE REVOLVING CREDIT. 

        Section 2.1.       The
Revolving Loan Commitment.   Subject to the terms and conditions hereof, each Bank, by its acceptance hereof,
severally agrees to make a loan or loans (individually a “Revolving Loan” and collectively the “Revolving
Loans”) to the Borrower from time to time on a revolving basis in U.S. Dollars in an aggregate outstanding amount up to the
amount of its revolving credit commitment set forth on the applicable signature page hereof (such amount, as reduced pursuant to
Section 2.13 or changed as a result of one or more assignments under Section 11.12, its “Commitment” and,
cumulatively for all the Banks, the “Commitments”) before the Termination Date, provided that the sum of
each Bank’s Percentage of Revolving Loans, Swingline Loans and L/C Obligations at any time outstanding shall not exceed such
Bank’s Commitment, providedfurther that, the sum of the aggregate amount of Revolving Loans, the Swingline Loans
and L/C Obligations at any time outstanding shall not exceed the lesser of (i) the Commitments in effect at such time or
(ii) the Borrowing Base as then determined and computed (subject to Section 2.9(c)). Each Borrowing of Revolving Loans shall be
made ratably from the Banks in proportion to their respective Percentages. As provided in Section 2.6(a) hereof, the Borrower
may elect that each Borrowing of Revolving Loans be either Base Rate Loans or Eurodollar Loans. 

        Section 2.2.       Swingline
Loans.   (a) Subject to and upon the terms and conditions set forth herein, the Swingline Bank agrees to
make, at any time and from time to time on or prior to the Swingline Expiry Date, a loan or loans (each, a “Swingline
Loan” and, collectively, the “Swingline Loans”) to the Borrower, which Swingline Loans (i) shall be
made and maintained as Base Rate Loans, (ii) may be repaid and reborrowed in accordance with the provisions hereof, 

-13- 

(iii) shall not exceed in aggregate principal amount at any time
outstanding that aggregate principal amount which, when added to the sum of (I) the aggregate principal amount of all Loans
then outstanding and (II) the aggregate amount of all L/C Obligations outstanding shall not exceed the lesser of the
Commitments in effect at such time or the Borrowing Base at such time and (iv) shall not exceed the Maximum Swingline Amount.
The Swingline Bank will not make a Swingline Loan after it has received written notice from the Required Banks stating that a
Default or an Event of Default exists and specifically requesting that the Swingline Bank not make any Swingline Loans,
provided that the Swingline Bank may continue making Swingline Loans at such time thereafter as the respective Default or
Event of Default has been cured or waived in accordance with the requirements of this Agreement or the Required Banks have withdrawn
the written notice described above in this sentence. In addition, the Swingline Bank shall not be obligated to make any Swingline
Loan at a time when any Bank shall be in default of any of its obligations hereunder unless the Swingline Bank shall have entered
into arrangements satisfactory to it and the Borrower to eliminate the Swingline Bank’s risk with respect to the defaulting
Bank’s participation in such Swingline Loan, including by cash collateralizing such defaulting Bank’s share of the
outstanding Swingline Loans. 

        (b)    On
any Business Day the Swingline Bank may, in its sole discretion, give notice to the Banks that its outstanding Swingline Loans shall
be repaid from the proceeds of a Borrowing of Revolving Loans under Section 2.1, in which case a Borrowing of Revolving Loans
constituting Base Rate Loans (each such Borrowing, a “Mandatory Borrowing”) shall be made on the immediately
succeeding Business Day by all Banks (without giving effect to any reductions thereto pursuant to the last paragraph of
Section 8.2 or 8.3) pro rata based on each Bank’s Percentage (determined before giving effect to any termination of
the Commitments pursuant to Section 8.2 or 8.3), and the proceeds thereof shall be applied directly to the Swingline Bank to
repay the Swingline Bank for such outstanding Swingline Loans. Each Bank hereby irrevocably agrees to make Base Rate Loans upon one
Business Day’s notice pursuant to each Mandatory Borrowing in the amount and in the manner specified in the preceding sentence
and on the date specified in writing by the Swingline Bank notwithstanding (i) the amount of the Mandatory Borrowing may not
comply with the minimum borrowing amount otherwise required hereunder, (ii) any condition specified in Section 6 may not
then be satisfied, (iii) the existence of any Default or Event of Default, (iv) the date of such Mandatory Borrowing and
(v) the amount of the total Commitments at such time. In the event that any Mandatory Borrowing cannot for any reason be made
on the date otherwise required above (including, without limitation, as a result of the commencement of a proceeding under the
United States Bankruptcy Code, as amended, or any other comparable bankruptcy or insolvency law, with respect to the Borrower), then
each Bank (other than the Swingline Bank) hereby agrees that it shall forthwith purchase (as of the date the Mandatory Borrowing
would otherwise have occurred, but adjusted for any payments received from the Borrower on or after such date and prior to such
purchase from the Swingline Bank) (without recourse or warranty) such participations in the outstanding Swingline Loans as shall be
necessary to cause the Banks to share in such Swingline Loans ratably based upon their respective Percentage (determined before
giving effect to any termination of the Commitments pursuant to Section 8.2 or 8.3), provided that (x) all interest
payable on the Swingline Loans shall be for the account of the Swingline Bank until the date the respective participation is
required to be purchased and, to the extent attributable to the purchased participation, shall be payable to the participant from
and after such date and (y) at the time any 

-14- 

purchase of participations pursuant to this sentence is actually made, the
purchasing Bank shall be required to pay the Swingline Bank interest on the principal amount of participation purchased for each day
from and including the day upon which the Mandatory Borrowing would otherwise have occurred to but excluding the date of payment for
such participation, at the overnight Federal Funds Rate for the first three days and at the rate otherwise applicable to Loans
maintained as Base Rate Loans for each day thereafter. 

        Section 2.3.   Letters of Credit.  

        (a)   General
Terms.   Subject to the terms and conditions hereof the Issuing Agent shall issue standby letters of credit (each
a “Letter of Credit”) for the Borrower’s account in an aggregate undrawn face amount up to the amount of the
L/C Facility Limit, provided that the aggregate L/C Obligations at any time outstanding shall not exceed the difference between the
lesser of (i) the Commitments in effect at such time or (ii) the Borrowing Base as then determined and computed (subject
to Section 2.9(c)), and the aggregate amount of Revolving Loans and Swingline Loans then outstanding. Each Letter of Credit
shall be issued by the Issuing Agent, but each Bank shall be obligated to purchase an undivided percentage participation interest of
such Letter of Credit from the Issuing Agent pursuant to Section 2.3(d) hereof in an amount equal to its Percentage of the
amount of each drawing thereunder and, accordingly, the undrawn face amount of each Letter of Credit shall constitute usage of the
Commitment of each Bank pro rata in accordance with each Bank’s Percentage. 

        (b)   Applications.   At
any time before the Termination Date, the Issuing Agent shall, at the request of the Borrower given at least three (3) Business Days
prior to the requested date of issuance, issue one or more Letters of Credit in a form satisfactory to the Issuing Agent, with
expiration dates no later than the Termination Date in an aggregate face amount as set forth above, upon the receipt of a duly
executed application for the relevant Letter of Credit in the form customarily prescribed by the Issuing Agent for the type of
Letter of Credit requested (each an “Application”). Notwithstanding anything contained in any Application to the
contrary (x) the Borrower’s obligation to pay fees in connection with each Letter of Credit shall be as exclusively set
forth in Section 3 hereof and (y) if the Issuing Agent is not timely reimbursed for the amount of any drawing under a
Letter of Credit on the date such drawing is paid, the Borrower’s obligation to reimburse the Issuing Agent for the amount of
such drawing shall bear interest (which the Borrower hereby promises to pay on demand) from and after the date such drawing is paid
at a rate per annum equal to the sum of 2% plus the Base Rate from time to time in effect. The Issuing Agent will promptly notify
the Agent, who will then promptly notify the Banks, of each issuance by it of a Letter of Credit and any amendment or extension of a
Letter of Credit. Without limiting the generality of the foregoing, the Issuing Agent’s obligation to issue, amend or extend
the expiration date of a Letter of Credit is subject to the conditions set forth herein (including the conditions set forth in
Section 6 and the other terms of this Section 2.3). 

        (c)   The
Reimbursement Obligations.   Subject to Section 2.3(b) hereof, the obligation of the Borrower to reimburse
the Issuing Agent for all drawings under a Letter of Credit (a “Reimbursement Obligation”) shall be governed, to
the extent not inconsistent with this Agreement, by the Application related to such Letter of Credit, except that reimbursement of
each drawing shall be made in immediately available funds at the Agent’s bank account 

-15- 

maintained in Chicago, Illinois (or such other place as specified in writing
from time to time by the Agent) by no later than 12:00 Noon (Chicago time) on the date when such drawing is paid or, if such drawing
was paid after 11:30 a.m. (Chicago time), by the end of such day. If the Borrower does not make any such reimbursement payment
on the date due (whether through a deemed request for a Base Rate Loan pursuant to Section 2.6(c) or otherwise) and the Banks
fund their participations therein in the manner set forth in Section 2.3(d) below, then all payments thereafter received by the
Agent in discharge of any of the relevant Reimbursement Obligations shall be distributed in accordance with Section 2.3(d)
below. 

        (d)   The
Participating Interests.   Each Bank, by its acceptance hereof, severally agrees to purchase from the Issuing
Agent, and the Issuing Agent hereby agrees to sell to each such Bank, an undivided percentage participating interest (a
“Participating Interest”), to the extent of its Percentage, in each Letter of Credit issued by, and each
Reimbursement Obligation owed to, the Issuing Agent. Upon any failure by the Borrower to pay any Reimbursement Obligation at the
time required on the date the related drawing is paid, as set forth in Section 2.3(c) above, or if the Issuing Agent is
required at any time to return to the Borrower or to a trustee, receiver, liquidator, custodian or other Person any portion of any
payment of any Reimbursement Obligation, each Bank shall, not later than the Business Day of a demand from the Issuing Agent to such
effect, if such demand is received before 1:00 p.m. (Chicago time), or not later than the following Business Day, if such demand is
received after such time, pay to the Issuing Agent an amount which was paid out by the Issuing Bank under the relevant Letter of
Credit equal to its Percentage of such unpaid or recaptured Reimbursement Obligation together with interest on such amount accrued
from the date the related payment was made by the Issuing Agent to the date of such payment by such Bank at a rate per annum equal
to (i) from the date the related payment was made by the Issuing Agent to the date two (2) Business Days after payment by
such Bank is due hereunder, the Federal Funds Rate for each such day and (ii) from the date two (2) Business Days after
the date such payment is due from such Bank to the date such payment is made by such Bank, the Base Rate in effect for each such
day. Each such Bank shall thereafter be entitled to receive its Percentage of each payment received in respect of the relevant
Reimbursement Obligation and of interest paid thereon, with the Issuing Agent retaining its Percentage as a Bank hereunder.

        The several obligations of the
Banks to the Issuing Agent under this Section 2.3 shall be absolute, irrevocable and unconditional under any and all
circumstances whatsoever and shall not be subject to any set-off, counterclaim or defense to payment which any Bank may have or have
had against the Borrower, the Agent, the Issuing Agent, any other Bank or any other Person whatsoever. Without limiting the
generality of the foregoing, such obligations shall not be affected by any Default or Event of Default or by any reduction or
termination of any Commitment of any Bank (except as to assignments made in accordance with Section 11.12 hereof), and each
payment by a Bank under this Section 2.3 shall be made without any offset, abatement, withholding or reduction whatsoever. The
Issuing Agent and the Agent shall be entitled to offset amounts received for the account of a Bank under the Credit Documents
against unpaid amounts due from such Bank to the Issuing Agent or the Agent hereunder (whether as fundings of participations,
indemnities or otherwise). The term “Percentage” or “Percentages” as used in this Section 2.3
shall be determined before giving effect to any termination of the Commitments pursuant to Section 8.2 or 8.3. 

-16- 

        (e)       Indemnification.   The
Banks shall, to the extent of their respective Percentages, indemnify the Issuing Agent (to the extent not reimbursed by the
Borrower) against any cost, expense (including reasonable counsel fees and disbursements), claim, demand, action, loss or liability
(except such as result from the Issuing Agent’s gross negligence or willful misconduct) that the Issuing Agent may suffer or
incur in connection with any Letter of Credit. The Issuing Agent shall be entitled to all of the rights and protections afforded the
Agent under Section Ten hereof. The obligations of the Banks under this Section 2.3(e) and all other parts of this
Section 2.3 shall survive termination of this Agreement and of all other L/C Documents. 

        (f)       Issuing
Agent.   Each Bank hereby appoints LaSalle as the Issuing Agent hereunder and hereby authorizes the Issuing Agent
to take such action as Issuing Agent on its behalf and to exercise such powers under the Credit Documents as are delegated to the
Issuing Agent by the terms thereof, together with such powers as are reasonably incidental thereto. The relationship between the
Issuing Agent and the Banks is and shall be that of agent and principal only, and nothing contained in this Agreement or any other
Credit Document shall be construed to constitute the Issuing Agent as a trustee or fiduciary for any Bank or the Borrower. The term
“Bank” as used herein and in all other Credit Documents, unless the context otherwise clearly requires, includes
the Issuing Agent in its individual capacity as a Bank. 

        Section 2.4.   Applicable Interest Rates.  

        (a)   Base
Rate Loans Including Swingline Loans.   Each Base Rate Loan made or maintained by a Bank, including Swingline
Loans made by the Swingline Bank, shall bear interest during each Interest Period it is outstanding (computed on the basis of a year
of 360 days and actual days elapsed) on the unpaid principal amount thereof from the date such Loan is advanced, continued or
created by conversion from a Eurodollar Loan until maturity (whether by acceleration or otherwise) at a rate per annum equal to the
sum of the Applicable Margin plus the Base Rate from time to time in effect, payable on the last day of its Interest Period and at
maturity (whether by acceleration or otherwise). 

        “Base Rate”   means for any day the greater of: 

		        (i)   the
rate of interest announced by LaSalle from time to time as its prime rate, or equivalent, for U.S. Dollar loans as in effect on such
day, with any change in the Base Rate resulting from a change in said prime rate to be effective as of the date of the relevant
change in said prime rate; and 

		        (ii)   the
sum of (x) the rate set forth in the weekly statistical release designated as H.15(519), or any successor publication,
published by the Federal Reserve Bank of New York (including any such successor) on the preceding Business Day opposite the caption
“Federal Funds (Effective)"; or, if for any relevant day such rate is not so published on any such preceding
Business Day, the rate for such day will be the arithmetic mean as determined by the Agent of the rates for the last transaction in
overnight Federal funds arranged prior to 9:00 a.m. (Chicago time) on that day by each of three leading brokers of Federal funds
transactions in Chicago, Illinois selected by the Agent, plus (y) 1% (1.00%). 

-17- 

        (b)   Eurodollar
Loans.   Each Eurodollar Loan made or maintained by a Bank shall bear interest during each Interest Period it is
outstanding (computed on the basis of a year of 360 days and actual days elapsed) on the unpaid principal amount thereof from the
date such Loan is advanced, continued, or created by conversion from a Base Rate Loan until maturity (whether by acceleration or
otherwise) at a rate per annum equal to the sum of the Applicable Margin plus the Adjusted LIBOR applicable for such Interest
Period, payable on the last day of the Interest Period and at maturity (whether by acceleration or otherwise). 

        “Adjusted
LIBOR” means, for any Borrowing of Eurodollar Loans, a rate per annum determined in accordance with the following formula:

	 	Adjusted LIBOR	=	LIBOR	 
	  	

	  	1 – Eurodollar Reserve Percentage

        “LIBOR” means,
for an Interest Period for a Borrowing of Eurodollar Loans, (a) the LIBOR Index Rate for such Interest Period, if such rate is
available, and (b) if the LIBOR Index Rate cannot be determined, the arithmetic average of the rates of interest per annum at
which deposits in U.S. Dollars in immediately available funds are offered to the Reference Bank at 11:00 a.m. (London,
England time) two (2) Business Days before the beginning of such Interest Period by major banks in the interbank eurodollar market
for delivery on the first day of and for a period equal to such Interest Period in an amount equal or comparable to the principal
amount of the Eurodollar Loan scheduled to be made by the Reference Bank as part of such Borrowing. 

        “LIBOR Index
Rate” means, for any Interest Period, the rate per annum for deposits in U.S. Dollars for delivery on the first day of
and for a period equal to such Interest Period in an amount equal or comparable to the principal amount of the Eurodollar Loan
scheduled to be made by the Reference Bank as part of such Borrowing which appears on Telerate Page 3750 as of 11:00 a.m.
(London, England time) on the day two (2) Business Days before the commencement of such Interest Period. 

        “Telerate Page
3750” means the display page designated as “Page 3750” on the Telerate Service (or such other page as may replace
such pages on that service or such other service as may be nominated by the British Bankers’ Association as the information
vendor for the purpose of displaying British Bankers’ Association Interest Settlement Rates for deposits in U.S. Dollars).

        “Eurodollar Reserve
Percentage” means, for any Borrowing of Eurodollar Loans, the daily average for the applicable Interest Period of the
maximum rate, expressed as a decimal, at which reserves (including, without limitation, any supplemental, marginal and emergency
reserves) are actually imposed and applicable to the Banks during such Interest Period by the Board of Governors of the Federal
Reserve System (or any successor) on “eurocurrency liabilities”, as defined in such Board’s Regulation D
(or in respect of any other category of liabilities that includes deposits by reference to which the interest rate on Eurodollar
Loans is determined or any category of extensions of credit or other assets that include loans by non-United States offices of any
Bank to United States residents), subject to any amendments of such reserve requirement by such Board or its successor, taking into
account any transitional adjustments thereto. For purposes of this definition, the Eurodollar Loans shall be deemed to be 

-18- 

“eurocurrency liabilities” as defined in Regulation D
without benefit or credit for any prorations, exemptions or offsets under Regulation D. 

        (c)   Rate
Determinations.   The Agent shall determine each interest rate applicable to Obligations, and a determination
thereof by the Agent shall be conclusive and binding except in the case of manifest error. 

        Section 2.5.   Minimum
Borrowing Amounts. Each Borrowing of Base Rate Loans (other than Swingline Loans) shall be in an amount not less than $500,000
and in integral multiples of $500,000, provided that a Borrowing of Base Rate Loans applied to pay a Mandatory Borrowing
pursuant to Section 2.2(b) hereof or a Reimbursement Obligation pursuant to Section 2.6(c) hereof shall be in an amount
equal to such Mandatory Borrowing or Reimbursement Obligation. Each Borrowing of a Swingline Loan shall be in an amount not less
than $50,000 and in integral multiples of $50,000. Each Borrowing of Eurodollar Loans shall be in an amount not less than $2,000,000
and in integral multiples of $1,000,000. 

        Section 2.6.   Manner
of Borrowing Loans and Designating Interest Rates Applicable to Loans. 

        (a)   Notice
to the Agent.   The Borrower shall give notice to the Agent (and also to the Swingline Bank, in the case of
Swingline Loans) by no later than 12:00 noon (Chicago time) (i) at least three (3) Business Days before the date on which the
Borrower requests the Banks to advance a Borrowing of Eurodollar Loans and (ii) no later than 10:00 a.m. (Chicago time) on
the date the Borrower requests the Banks to advance a Borrowing of Loans comprised of Base Rate Loans or requests the Swingline Bank
to make Swingline Loans. The Revolving Loans included in each such Borrowing shall bear interest initially at the type of rate
specified in such notice of a new Borrowing. Thereafter, the Borrower may from time to time elect to change or continue the type of
interest rate borne by each Borrowing of Revolving Loans or, subject to Section 2.5‘s minimum amount requirement for each
outstanding Borrowing, a portion thereof, as follows: (i) if such Borrowing is of Eurodollar Loans, on the last day of the
Interest Period applicable thereto, the Borrower may continue part or all of such Borrowing as Eurodollar Loans for an Interest
Period or Interest Periods specified by the Borrower or, convert part or all of such Borrowing into Base Rate Loans, (ii) if
such Borrowing is of Base Rate Loans (other than Swingline Loans), on any Business Day, the Borrower may convert all or part of such
Borrowing into Eurodollar Loans for an Interest Period or Interest Periods specified by the Borrower. The Borrower shall give all
such notices requesting the advance, continuation, or conversion of a Borrowing of Loans to the Agent (and also to the Swingline
Bank, in the case of Swingline Loans) by telephone or telecopy (which notice shall be irrevocable once given and, if by telephone,
shall be promptly confirmed in writing). Notices of the continuation of a Borrowing of Loans comprised of Eurodollar Loans for an
additional Interest Period or of the conversion of part or all of a Borrowing of Eurodollar Loans into Base Rate Loans or of Base
Rate Loans into Eurodollar Loans must be given by no later than 12:00 noon (Chicago time) at least three (3) Business Days before
the date of the requested continuation or conversion. All such notices concerning the advance, continuation, or conversion of a
Borrowing of Loans shall specify the date of the requested advance, continuation or conversion of such Borrowing (which shall be a
Business Day), the amount of the requested Borrowing of Loans to be advanced, continued, or 

-19- 

converted, the type of Loans to comprise such new, continued or converted
Borrowing and, if such Borrowing is to be comprised of Eurodollar Loans, the Interest Period applicable thereto. The Borrower agrees
that the Agent (or the Swingline Bank, as the case may be) may rely on any such telephonic or telecopy notice given by any person it
in good faith believes is an Authorized Representative without the necessity of independent investigation, and in the event any such
notice by telephone conflicts with any written confirmation, such telephonic notice shall govern if the Agent (or the Swingline
Bank, as the case may be) has acted in reliance thereon. There may be no more than five (5) different Interest Periods relating to
Eurodollar Loans in effect at any one time. Notwithstanding anything contrary herein, each Swingline Loan shall be made and
maintained as a Base Rate Loan and may not be converted into a Eurodollar Loan. 

        Upon the occurrence and
continuance of an Event of Default, each Eurodollar Loan will automatically, on the last day of the then existing Interest Period
therefor, convert into a Base Rate Loan and (ii) the obligation of the Banks to make or continue, or to convert Loans into,
Eurodollar Loans shall be suspended. 

        (b)   Notice
to the Banks. The Agent shall give prompt telephonic or telecopy notice to each Bank of any notice from the Borrower received
pursuant to Section 2.6(a) above. The Agent shall give notice to the Borrower and each Bank by like means of the interest rate
applicable to each Borrowing of Eurodollar Loans. 

        (c)   Borrower’s
Failure to Notify.   Any outstanding Borrowing of Base Rate Loans shall, subject to Section Six hereof,
automatically be continued for an additional Interest Period on the last day of its then current Interest Period unless the Borrower
has notified the Agent within the period required by Section 2.6(a) that it intends to convert such Borrowing into a Borrowing
of Eurodollar Loans or notifies the Agent within the period required by Section 2.9(a) that it intends to prepay such Borrowing. If
the Borrower fails to give notice pursuant to Section 2.6(a) above of the continuation or conversion of any outstanding
principal amount of a Borrowing of Eurodollar Loans before the last day of its then current Interest Period within the period
required by Section 2.6(a) and has not notified the Agent within the period required by Section 2.9(a) that it intends to
prepay such Borrowing, such Borrowing shall automatically be continued as a Borrowing of Eurodollar Loans with an Interest Period of
one month, subject to Section Six hereof. In the event the Borrower fails to give notice pursuant to Section 2.6(a) above of a
Borrowing equal to the amount of a Reimbursement Obligation and has not notified the Agent by 10:00 a.m. (Chicago time) on the
day such Reimbursement Obligation becomes due that it intends to repay such Reimbursement Obligation through funds not borrowed
under this Agreement, the Borrower shall be deemed to have requested a Borrowing of Base Rate Loans on such day in the amount of the
Reimbursement Obligation then due, subject to Section Six hereof, which Borrowing shall be applied to pay the Reimbursement
Obligation then due. 

        (d)   Disbursement
of Loans.   Not later than 11:00 a.m. (Chicago time) on the date of any requested advance of a new Borrowing of
Loans comprised of Eurodollar Loans, and not later than 12:00 noon (Chicago time) on the date of any requested advance of a new
Borrowing of Base Rate Loans, subject to Section Six hereof, each Bank (or the Swingline Bank, in the case of Swingline Loans)
shall make available its Loan comprising part of such Borrowing in funds immediately available at the bank account of the Agent
maintained in Chicago, Illinois (or such 

-20- 

other place as specified in writing from time to time by the Agent) (or such
bank account of the Borrower maintained in St. Paul, Minnesota as specified by the Borrower in writing to the Swingline Bank in the
case of Swingline Loans), except to the extent such Borrowing is a reborrowing, in whole or in part, of the principal amount of a
maturing Borrowing of Loans (a “Refunding Borrowing”), in which case each Bank (or the Swingline Bank, in the case
of Swingline Loans) shall record the Loan made by it as a part of such Refunding Borrowing on its books and records or on a schedule
to its Note, as provided in Section 2.11, and shall effect the repayment, in whole or in part, as appropriate, of its maturing
Loan through the proceeds of such new Loan. The Agent shall make available to the Borrower Revolving Loans, unless otherwise
specified by the Borrower and agreed to in writing by the Agent, in such bank account of the Borrower in St. Paul, Minnesota as the
Agent has previously agreed in writing to with the Borrower, in each case in the type of funds received by the Agent from the Banks.

        (e)   Agent
Reliance on Bank Funding.   Unless the Agent shall have been notified by a Bank before the date on which such
Bank is scheduled to make payment to the Agent of the proceeds of a Loan (which notice shall be effective upon receipt) that such
Bank does not intend to make such payment, the Agent may assume that such Bank has made such payment when due and the Agent may in
reliance upon such assumption (but shall not be required to) make available to the Borrower the proceeds of the Loan to be made by
such Bank and, if any Bank has not in fact made such payment to the Agent, such Bank shall, on demand, pay to the Agent the amount
made available to the Borrower attributable to such Bank together with interest thereon in respect of each day during the period
commencing on the date such amount was made available to the Borrower and ending on (but excluding) the date such Bank pays such
amount to the Agent at a rate per annum equal to the Federal Funds Rate. If such amount is not received from such Bank by the Agent
immediately upon demand, the Borrower will, on demand, repay to the Agent the proceeds of the Loan attributable to such Bank with
interest thereon at a rate per annum equal to the interest rate applicable to the relevant Loan. 

        Section 2.7.   Interest
Periods.   The term “Interest Period” means the period commencing on the date a Borrowing of
Loans is advanced, continued, or created by conversion and ending: (a) in the case of Base Rate Loans (including Swingline
Loans), on the last Business Day of the calendar quarter in which such Borrowing is advanced, continued, or created by conversion
(or on the last day of the following calendar quarter if such Loan is advanced, continued or created by conversion on the last
Business Day of a calendar quarter) or (b) in the case of Eurodollar Loans, the date selected by the Borrower that is 1, 2 or 3
months thereafter; provided, however, that: 

		        (a)   any
Interest Period for a Borrowing of Base Rate Loans (including Swingline Loans) that otherwise would end after the Termination Date
shall end on the Termination Date; 

		        (b)   for
any Borrowing of Eurodollar Loans, the Borrower may not select an Interest Period that extends beyond the Termination Date;

		        (c)   whenever
the last day of any Interest Period would otherwise be a day that is not a Business Day, the last day of such Interest Period shall
be extended to the next 

-21- 

	  	succeeding Business Day, provided that, if such extension would
cause the last day of an Interest Period for a Borrowing of Eurodollar Loans to occur in the following calendar month, the last day
of such Interest Period shall be the immediately preceding Business Day; and 

		        (d)   for
purposes of determining an Interest Period for a Borrowing of Eurodollar Loans, a month means a period starting on one day in a
calendar month and ending on the numerically corresponding day in the next calendar month; provided, however, that if there is no
numerically corresponding day in the month in which such an Interest Period is to end or if such an Interest Period begins on the
last Business Day of a calendar month, then such Interest Period shall end on the last Business Day of the calendar month in which
such Interest Period is to end. 

        Section 2.8.   Maturity
of Loans.   Unless an earlier maturity is provided for hereunder (whether by acceleration or otherwise), each
Eurodollar Loan shall mature and become due and payable by the Borrower on the last day of the Interest Period applicable thereto
and each Base Rate Loan (including Swingline Loans) shall mature and become due and payable by the Borrower on the Termination Date.

        Section 2.9.       Prepayments.   (a)   The
Borrower may prepay without premium or penalty and in whole or in part (but, if in part, then: (i) if such Borrowing is of Base
Rate Loans (other than Swingline Loans), in an amount not less than $500,000 and integral multiples of $500,000 (in an amount not
less than $50,000 and integral multiples of $50,000, in the case of Swingline Loans), (ii) if such Borrowing is of Eurodollar
Loans, in an amount not less than $2,000,000 and integral multiples of $1,000,000 and (iii) in an amount such that the minimum
amount required for a Borrowing pursuant to Section 2.5 hereof remains outstanding) any Borrowing of Eurodollar Loans upon
three Business Days’prior notice to the Agent or, in the case of a Borrowing of Base Rate Loans (including Swingline Loans),
notice delivered to the Agent (and also to the Swingline Bank, in the case of Swingline Loans) no later than 10:00 a.m.
(Chicago time) on the date of prepayment, such prepayment to be made by the payment of the principal amount to be prepaid and
accrued interest thereon to the date fixed for prepayment. The Agent will promptly advise each Bank of any such prepayment notice it
receives from the Borrower. Any prepayment of Eurodollar Loans shall be subject to Section 2.12. 

        (b)   Reborrowings.   Any
principal amount of Loans paid or prepaid before the Termination Date (or the Swingline Expiry Date, in the case of Swingline Loans)
may, subject to the terms and conditions of this Agreement, be borrowed again. 

        (c)   Mandatory
Repayments.   (i)   The Borrower shall repay the Loans, and, to the extent necessary after giving
effect to such prepayment of Loans, provide cash collateral to be held pursuant to Section 8.4, to the extent the outstanding
amount of Loans (including Swingline Loans) and L/C Obligations exceeds the Commitments then in effect. All such payments shall be
subject to Section 2.12. 

        (ii)   If at any
time the Borrowing Base is less than the aggregate amount of Loans and L/C Obligations then outstanding (such amount being referred
to as the “Shortfall Amount”), 

-22- 

then the Borrower shall, within three Business Days of the occurrence of such
circumstance, repay Loans in an amount equal to the Shortfall Amount (such repayment to be subject to Section 2.12 hereof) and,
to the extent there remains a Shortfall Amount after giving effect to such repayment of Loans, provide cash collateral to be held
pursuant to Section 8.4 such that after giving effect thereto no Shortfall Amount remain. If there exists a Shortfall Amount and (A)
no other Event of Default has then occurred and is continuing and (B) the Borrower does not so repay the Loans or provide cash
collateral in an amount sufficient such that after giving effect thereto no Shortfall Amount remains, the Agent may, and shall at
the request of the Required Banks, terminate the Commitments in whole, declare all Loans and all other Obligations to be immediately
due and payable. 

        Section 2.10.   Default
Rate.   If any payment of principal on any Loan is not made when due (whether by acceleration or otherwise), such
Loan shall bear interest (computed on the basis of a year of 360 days and actual days elapsed) from the date such payment was due
until paid in full, payable on demand, at a rate per annum equal to: 

		        (a)   for
any Base Rate Loan (including Swingline Loans), the sum of two percent (2%) plus the Base Rate from time to time in effect; and

		        (b)   for
any Eurodollar Loan, the sum of two percent (2%) plus the rate of interest in effect thereon at the time of such default until the
end of the Interest Period applicable thereto and, thereafter, at a rate per annum equal to the sum of two percent (2%) plus the
Base Rate from time to time in effect. 

        Section 2.11.   The
Notes. All Revolving Loans made to the Borrower by a Bank shall be evidenced by a single promissory note of the Borrower issued
to such Bank in the form of Exhibit A-1 hereto (each a “Revolving Note” and collectively the
“Revolving Notes”), each such Note to be payable to the order of the applicable Bank in the amount of its
Commitment; provided that Swingline Loans made to the Borrower by the Swingline Bank shall be evidenced by a single
promissory note of the Borrower issued to such Bank in the form of Exhibit A-2 (the “Swingline Note”).

        Each Bank shall record on its
books and records or on a schedule to the appropriate Note the amount of each Loan advanced, continued, or converted by it, all
payments of principal and interest and the principal balance from time to time outstanding thereon, the type of such Loan, and, for
any Eurodollar Loan, the Interest Period and the interest rate applicable thereto. The record thereof, whether shown on such books
and records of a Bank or on a schedule to any Note, shall be prima facie evidence as to all such matters;
provided, however, that the failure of any Bank to record any of the foregoing or
any error in any such record shall not limit or otherwise affect the obligation of the
Borrower to repay all Loans made to it hereunder together with accrued interest thereon.
At the request of any Bank and upon such Bank tendering to the Borrower the Note to be
replaced, the Borrower shall furnish a new Note to such Bank to replace any outstanding
Note, and at such time the first notation appearing on a schedule on the reverse side of,
or attached to, such Note shall set forth the aggregate unpaid principal amount of all
Loans, if any, then outstanding thereon. 

-23- 

        Section 2.12.   Funding
Indemnity.   If any Bank shall incur any loss, cost or expense (including, without limitation, any loss, cost or
expense incurred by reason of the liquidation or re-employment of deposits or other funds acquired by such Bank to fund or maintain
any Eurodollar Loan or the relending or reinvesting of such deposits or amounts paid or prepaid to such Bank but excluding any
Applicable Margin) as a result of: 

		        (a)   any
payment (whether by acceleration or otherwise), prepayment or conversion of a Eurodollar Loan on a date other than the last day of
its Interest Period, 

		        (b)   any
failure (because of a failure to meet the conditions of Section Six or otherwise) by the Borrower to borrow or continue a Eurodollar
Loan, or to convert a Base Rate Loan into a Eurodollar Loan, on the date specified in a notice given pursuant to Section 2.6(a)
or established pursuant to Section 2.6(c) hereof, 

		        (c)   any
failure by the Borrower to make any payment of principal on any Eurodollar Loan when due (whether by acceleration or otherwise), or

		        (d)   any
acceleration of the maturity of a Eurodollar Loan as a result of the occurrence of any Event of Default hereunder, 

then, upon the demand of such Bank, the Borrower shall pay to such Bank such
amount as will reimburse such Bank for such loss, cost or expense. If any Bank makes such a claim for compensation, it shall provide
to the Borrower, with a copy to the Agent, a certificate executed by an officer of such Bank setting forth the amount of such loss,
cost or expense in reasonable detail (including an explanation of the basis for and the computation of such loss, cost or expense)
and the amounts shown on such certificate if reasonably calculated shall be conclusive absent manifest error. 

        Section 2.13.   Commitment
Terminations.   The Borrower shall have the right at any time and from time to time (but up to only once per one
calendar quarter), upon five (5) Business Days’ prior written notice to the Agent, to terminate the Commitments without
premium or penalty, in whole or in part, any partial termination to be (i) in an amount not less than $3,000,000 and integral
multiples of $1,000,000 in excess thereof, and (ii) allocated ratably among the Banks in proportion to their respective
Percentages, provided that the Commitments may not be reduced to an amount less than the sum of the amount of all Loans
(including Swingline Loans) and all L/C Obligations then outstanding. The Borrower shall have the right at any time and from time to
time (but up to only once per one calendar quarter), by notice to the Agent, to terminate the L/C Facility Limit without premium or
penalty, in whole or in part, provided that the L/C Facility Limit may not be reduced to an amount less than the L/C
Obligations then outstanding. Any such termination of the L/C Facility Limit shall not reduce the Commitments unless the Borrower
elects to do so in the manner provided in the preceding sentence. The Agent shall give prompt notice to each Bank of any such
termination of Commitments or of any termination of the L/C Facility Limit. Any termination of Commitments or the L/C Facility Limit
pursuant to this Section 2.13 may not be reinstated. 

-24- 

        Section 2.14.   Extension
of Commitments.   On the first and second anniversary of the Effective Date, the Borrower may request in writing
that the Banks extend the initial Termination Date for up to one additional year and the Banks shall thereupon perform their own
credit analysis of the Borrower and advise the Borrower and the Agent as to whether they are prepared to grant such an extension and
if so on what terms. In the event all of the Banks honor the request for such an extension, they shall so notify the Borrower and
the Borrower shall then execute such instruments and documents as the Agent may reasonably require in order to effect the extension
requested. 

SECTION 3.    FEES. 

        Section 3.1.   Fees.  

        (a)   Commitment
Fee.   For the period from the Effective Date to and including the Termination Date, the Borrower shall pay to
the Agent for the ratable account of the Banks in accordance with their Percentages a commitment fee accruing at a rate per annum
equal to the Commitment Fee Rate on the average daily amount of the unused Commitments. Such commitment fee is payable in arrears on
the last Business Day of each calendar quarter and on the Termination Date, unless the Commitments are terminated in whole on an
earlier date, in which event the fee for the period to but not including the date of such termination shall be paid in whole on the
date of such termination. For the purpose of calculating a commitment fee, outstanding Swingline Loans shall not be deemed a usage
of the Commitments. 

        (b)   Letter
of Credit Fees.   (i)   The Borrower shall pay to the Agent for the ratable account of the Banks
in accordance with their Percentages, letter of credit fees with respect to each Letter of Credit at a rate per annum equal to the
L/C Fee Rate on the maximum undrawn amount of such Letter of Credit on any day on which such Letter of Credit is issued or the
amount thereof is increased (as to the amount so increased) and at the beginning of each quarterly period computed and payable on
such day and, thereafter, on a quarterly basis in advance on the first Business Day of each calendar quarter. 

        (ii)   The
Borrower shall pay to the Issuing Agent, for the account of such Issuing Agent, a letter of credit fronting fee for each Letter of
Credit issued by such Issuing Agent at the rate per annum equal to the rate set forth in the Fee Letter on the maximum undrawn
amount of such Letter of Credit on any day on which such Letter of Credit is issued or the amount thereof is increased (as to the
amount so increased) and at the beginning of each quarterly period computed and payable on such day and, thereafter, on a quarterly
basis in advance on the first Business Day of each calendar quarter. 

        (iii)   The
letter of credit fees payable under Section 3.1(b)(i) and the fronting fees payable under Section 3.1(b)(ii) shall be due
and payable on any day on which each Letter of Credit is issued or the amount thereof is increased (as to the amount so increased)
and, thereafter, quarterly in advance on the first Business Day of each calendar quarter during which such Letter of Credit is
outstanding, commencing on the first such date to occur after the Effective Date. All letter of credit fees and fronting fees are
non-refundable. 

-25- 

        (iv)   The
Borrower shall pay to the Issuing Agent, for the account of the Issuing Agent, from time to time on demand the normal issuance,
presentation, amendment and other processing fees, and other standard costs and charges, of the Issuing Agent relating to letters of
credit as from time to time in effect and evidenced by a reasonably detailed statement. 

        (c)   Other
Fees.   The Borrower shall pay to the Agent and the Documentation Agent, the fees agreed to between the Agent,
the Documentation Agent and the Borrower in the Fee Letter or as otherwise agreed in writing between them. 

        (d)   Fee
Calculations.   All fees payable under this Agreement shall be payable in U.S. Dollars and shall be computed
on the basis of a year of 360 days, for the actual number of days elapsed. All determinations of the amount of fees owing hereunder
(and the components thereof, including without limitation the leverage ratio) shall be made by the Agent and shall be conclusive
absent manifest error. 

SECTION 4.    PLACE AND APPLICATION OF PAYMENTS; GUARANTEES AND COLLATERAL.  

        Section 4.1.   Place
and Application of Payments.   All payments of principal of and interest on the Loans and the Reimbursement
Obligations, and of all other amounts payable by the Borrower under this Agreement, shall be made by the Borrower to the Agent by no
later than 2:00 p.m. (Chicago time) on the due date thereof at the bank account of the Agent maintained in Chicago, Illinois (or
such other location as the Agent may designate to the Borrower) or, if such payment is on a Reimbursement Obligation, no later than
provided by Section 2.3(c) hereof. Any payments received after such time shall be deemed to have been received by the Agent on
the next Business Day. All such payments shall be made free and clear of, and without deduction for, any set-off, counterclaim, levy
or any other deduction of any kind in U.S. Dollars, in immediately available funds at the place of payment. The Agent will
promptly thereafter cause to be distributed like funds relating to the payment of principal or interest on Loans or applicable fees
to the Banks in accordance with their respective Percentages and like funds relating to the payment of any other amount payable to
any Person to such Person, in each case to be applied in accordance with the terms of this Agreement. 

        Section 4.2.   Guarantees.
Payment of the Loans and all other Obligations shall at all times remain guaranteed by each Subsidiary (except Immaterial
Subsidiaries) of the Borrower on the terms and conditions set forth in the Guarantees, by virtue of such Subsidiary’s execution
of the Guarantees. 

        Section 4.3.   Collateral.
The Obligations shall be secured by valid, perfected (subject to the proviso appearing at the end of this sentence) and enforceable
Liens on all of the Borrower’s (and, if requested by the Agent, each Subsidiary’s) (i) Receivables (as defined in the
Security Agreement) and (ii) Pledged Revenue Equipment (collectively, the “Collateral”). The Borrower
acknowledges and agrees that the Liens on the Collateral shall be granted to the Collateral Agent for the benefit of itself, the
Banks, the Issuing Agent and such other parties in connection with Liens permitted pursuant to Sections 7.18(f) and (g)
hereof and shall be valid and perfected first priority Liens subject, however, to the proviso appearing at the end of the
immediately preceding 

-26- 

sentence, in each case pursuant to one or more Collateral Documents from such
Persons, each in form and substance satisfactory to the Agent. 

        Section 4.4.   Further
Assurances.   The Borrower agrees that it shall, and shall cause each Subsidiary to, from time to time at the
request of the Agent or the Required Lenders, execute and deliver such documents and do such acts and things as the Agent or the
Required Lenders may reasonably request in order to provide for or perfect or protect such Liens on the Collateral. In the event the
Borrower or any Subsidiary forms or acquires any other Subsidiary after the date hereof, the Borrower shall within 10 Business Days
of such formation or acquisition cause such newly formed or acquired Subsidiary to execute a Guaranty and such Collateral Documents
as the Agent may then required, and the Borrower shall also deliver to the Agent, or cause such Subsidiary to deliver to the Agent,
at the Borrower’s cost and expense, such other instruments, documents, certificates and opinions reasonably required by the
Agent in connection therewith. 

SECTION 5.    REPRESENTATIONS AND WARRANTIES.

        The Borrower hereby represents
and warrants to each Bank as to itself and, where the following representations and warranties apply to Subsidiaries, as to each of
its Subsidiaries, as follows: 

        Section 5.1.   Corporate
Organization and Authority.   The Borrower is duly organized and existing in good standing under the laws of the
State of Minnesota, has all necessary corporate power to carry on its present business; and is duly licensed or qualified and, in
good standing in each jurisdiction in which the nature of the business transacted by it or the nature of the Property owned or
leased by it makes such licensing, qualification or good standing necessary and in which the failure to be so licensed, qualified or
in good standing would reasonably be expected to have a Material Adverse Effect. The Borrower’s organizational registration
number (if any) is 3T-920. 

        Section 5.2.   Subsidiaries.   Schedule 5.2
(as updated from time to time pursuant to Section 7.1) hereto identifies each Subsidiary, the jurisdiction of its
incorporation, the percentage of issued and outstanding shares of each class of its capital stock owned by the Borrower and the
Subsidiaries and, if such percentage is not 100% (excluding directors’ qualifying shares as required by law), a description of
each class of its authorized capital stock and the number of shares of each class issued and outstanding. Each Subsidiary is duly
incorporated and existing in good standing as a corporation under the laws of the jurisdiction of its incorporation, has all
necessary corporate power to carry on its present business, and is duly licensed or qualified and in good standing in each
jurisdiction in which the nature of the business transacted by it or the nature of the Property owned or leased by it makes such
licensing or qualification necessary and in which the failure to be so licensed or qualified would have a Material Adverse Effect.
All of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and outstanding and fully paid and
nonassessable. As of the Effective Date, such shares owned by the Borrower are owned beneficially, and of record, free of any Lien.

        Section 5.3.   Corporate
Authority and Validity of Obligations.   Each of the Credit Parties has full right and authority to enter into,
and to perform all of its obligations under, each of the 

-27- 

Credit Documents to which it is a party, and in the case of the Borrower to
make the borrowings herein provided for, to issue its Notes in evidence thereof and to apply for the issuance of the Letters of
Credit. Each Credit Document to which it is a party has been duly authorized, executed and delivered by each Credit Party and
constitutes valid and binding obligations of such Credit Party enforceable in accordance with its terms except as may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, or similar laws affecting the enforcement of creditors’ rights
generally or by equitable principles. No Credit Document, nor the performance or observance by the Credit Party thereto of any of
the matters or things therein provided for, contravenes any provision of law or any charter or by-law provision of such Credit Party
or any material Contractual Obligation of or affecting such Credit Party or any of its Properties or results in or requires the
creation or imposition of any Lien on any of the Properties or revenues of the Borrower. 

        Section 5.4.   Financial
Statements; No Material Adverse Change.   All financial statements heretofore delivered to the Banks showing
historical performance of the Borrower for each of the fiscal years ending on or before December 31, 2003, have been prepared
in accordance with generally accepted accounting principles applied on a basis consistent, except as otherwise noted therein, with
that of the previous fiscal year. Each of such financial statements fairly presents on a consolidated basis the financial condition
of the Borrower and its Subsidiaries as of the dates thereof and the results of operations for the periods covered thereby. The
Borrower and its Subsidiaries included in such financial statements have no material contingent liabilities other than those
disclosed in such financial statements referred to in this Section 5.4 or in comments or footnotes thereto, or in any report
supplementary thereto, heretofore furnished to the Banks. Since December 31, 2003, there has been no Material Adverse Effect.

        Section 5.5.   No
Litigation; No Labor Controversies.   (a)   Except as set forth on Schedule 5.5, there is no
litigation or governmental proceeding pending, or to the knowledge of the Borrower, threatened, against the Borrower or any
Subsidiary in which there is a reasonable probability of an adverse determination that would reasonably be expected to have a
Material Adverse Effect. 

        (b)       Except
as set forth on Schedule 5.5, there are no labor controversies pending or, to the best knowledge of the Borrower, threatened
against the Borrower or any Subsidiary which would reasonably be expected to have a Material Adverse Effect. 

        Section 5.6.   Taxes.   The
Borrower and its Subsidiaries have filed all United States federal tax returns, and all other material tax returns, required to be
filed and have paid all taxes due pursuant to such returns or pursuant to any assessment received by the Borrower or any Subsidiary,
except such taxes, if any, as are being contested in good faith and for which adequate reserves have been provided. No notices of
tax liens have been filed and no claims are being asserted concerning any such taxes, which liens or claims are material to the
financial condition of the Borrower and its Subsidiaries taken as a whole. The charges, accruals and reserves on the books of the
Borrower and its Subsidiaries for any taxes or other governmental charges are adequate. 

-28- 

        Section 5.7.   Approvals.   No
authorization, consent, license, exemption, filing or registration with any court or governmental department, agency or
instrumentality, nor any approval or consent of the stockholders of the Borrower or any Subsidiary or from any other Person, is
necessary to the valid execution, delivery or performance by the Credit Parties of any Credit Document to which it is a party.

        Section 5.8.   ERISA.   With
respect to each Plan, the Borrower and each other member of the Controlled Group has fulfilled its obligations under the minimum
funding standards of and is in compliance in all material respects with the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”), and with the Code to the extent applicable to it and has not incurred any material liability to
the Pension Benefit Guaranty Corporation (“PBGC”) or a Plan under Title IV of ERISA other than a liability to
the PBGC for premiums under Section 4007 of ERISA. Neither the Borrower nor any Subsidiary has any material contingent
liabilities for any post-retirement benefits under a Welfare Plan, other than liability for continuation coverage described in
Part 6 of Title I of ERISA or state continuation laws. All current employees of the Borrower or its Subsidiaries who were
covered under any employee pension benefit plan maintained by North Star Transport, Inc. prior to July 1, 1998 are now covered
by a Plan of either the Borrower or one of its Subsidiaries. 

        Section 5.9.   Government
Regulation.   Neither the Borrower nor any Subsidiary is an “investment company” within the
meaning of the Investment Company Act of 1940, as amended, or a “holding company”, or a “Subsidiary
company” of a “holding company”, or an “affiliate” of a “holding
company” or of a “Subsidiary company”of a “holding company”, within the meaning of the
Public Utility Holding Company Act of 1935, as amended. 

        Section 5.10.   Margin
Stock; Use of Proceeds.   Neither the Borrower nor any Subsidiary is engaged principally, or as one of its
primary activities, in the business of extending credit for the purpose of purchasing or carrying margin stock (“margin
stock” to have the same meaning herein as in Regulation U of the Board of Governors of the Federal Reserve System).
The proceeds of the Loans and Letters of Credit are to be used solely for the purposes set forth in and permitted by
Section 7.9. The Borrower will not use the proceeds of any Loan or Letter of Credit in a manner that violates any provision of
Regulation U or X of the Board of Governors of the Federal Reserve System. 

        Section 5.11.   Licenses
and Authorizations; Compliance with Laws.   (a)   The Borrower and each of its Subsidiaries
(i) has all necessary licenses, permits and governmental authorizations to own and operate its Properties and to carry on its
business as currently conducted and contemplated and (ii) is in compliance with all applicable laws, regulations, ordinances
and orders of any governmental or judicial authorities except where the failure to so comply would not reasonably be expected to
have a Material Adverse Effect. 

        (b)   In the
ordinary course of its business, the Borrower and its Subsidiaries conduct an ongoing review of the effect of Environmental and
Health Laws on the Properties and all aspects of the business and operations of the Borrower and its Subsidiaries in the course of
which the Borrower identifies and evaluates associated liabilities and costs (including, without limitation, any capital or
operating expenditures required for clean-up or closure of Properties currently or 

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previously owned, any capital or operating expenditures required to achieve or
maintain compliance with standards imposed by law and any actual or potential liabilities to third parties, including employees or
governmental entities, and any related costs and expenses). On the basis of this review, the Borrower has reasonably concluded that
Environmental and Health Laws are unlikely to have a Material Adverse Effect. 

        (c)   Neither
the Borrower nor any Subsidiary has given, nor is it required to give, nor has it received, any written notice, letter, citation,
order, warning, complaint, inquiry, claim or demand to or from any governmental entity or in connection with any court proceeding
that would reasonably be expected to have a Material Adverse Effect claiming that: (i) the Borrower or any Subsidiary has
violated, or is about to violate, any Environmental and Health Law; (ii) there has been a release, or there is a threat of
release, of Hazardous Materials from the Borrower’s or any Subsidiary’s Property, facilities, equipment or vehicles;
(iii) the Borrower or any Subsidiary may be or is liable, in whole or in part, for the costs of cleaning up, remediating or
responding to a release of Hazardous Materials; or (iv) any of the Borrower’s or any Subsidiary’s Property or assets
are subject to a Lien in favor of any governmental entity for any liability, costs or damages, under any Environmental and Health
Law arising from, or costs incurred by such governmental entity in response to, a release of a Hazardous Materials. 

        Section 5.12.   Ownership
of Property.   The Borrower and each Subsidiary has good title to or valid leasehold interests in all its
Property free and clear of material Liens except as permitted hereby or as set forth in Schedule 5.12. 

        Section 5.13.   Compliance
with Agreements.   To the best knowledge of the Borrower, neither the Borrower nor any Subsidiary is in default
of any Contractual Obligation which could reasonably be expected to cause a Material Adverse Effect. 

        Section 5.14.   Full
Disclosure.   All information (except projections and forecasts provided in good faith and based on reasonable
estimates as to which no representation is made) heretofore furnished by the Borrower to the Agent or any Bank for purposes of or in
connection with the Credit Documents or any transaction contemplated thereby is, and all such information hereafter furnished by the
Borrower to the Agent or any Bank will be, true and accurate in all material respects and not misleading in any material respect on
the date as of which such information is stated or certified, considered as a whole and in light of the circumstances under which it
was furnished. 

        Section 5.15.   Solvency.   On
and as of the Effective Date, (a) the sum of the assets, at a fair valuation, of the Borrower (on a stand-alone basis) and the
Borrower and its Subsidiaries (taken as a whole) will exceed the debts of the Borrower (on a stand-alone basis) or the Borrower and
its Subsidiaries (taken as a whole), as applicable; (b) the Borrower (on a stand-alone basis) and the Borrower and its
Subsidiaries (taken as a whole) have not incurred and do not intend to, or believe that they will, incur debts beyond their ability
to pay such debts as such debts mature; and (c) the Borrower (on a stand-alone basis) and the Borrower and its Subsidiaries
(taken as a whole) will have sufficient capital and assets with which to conduct their businesses. For purposes of this
Section 5.15 “debt” means any liability on a claim, and “claim” means (i) right to
payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, 

-30- 

contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured, or unsecured; or (ii) right to an equitable remedy for breach of performance if such breach gives rise to a payment,
whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured or unsecured. 

        Section 5.16.   Capitalization.   On
the Effective Date, the authorized and issued capital stock of the Borrower and its Subsidiaries shall be as set forth on
Schedule 5.16. All outstanding shares of capital stock of the Borrower have been duly and validly issued, and are fully paid
and nonassessable. The Borrower and its Subsidiaries do not have outstanding any securities convertible into or exchangeable for its
capital stock or outstanding any rights to subscribe for or to purchase, or any options for the purchase of, or any agreements
providing for the issuance (contingent or otherwise) of, or any calls, commitments or claims of any character relating to, its
capital stock, except as set forth on Schedule 5.16. 

SECTION 6.    CONDITIONS PRECEDENT. 

        The obligation of each Bank to
advance, continue, or convert any Loan, or of the Issuing Agent to issue, extend the expiration date (including by not giving notice
of nonrenewal) of or increase the amount of any Letter of Credit or of the Swingline Bank to make any Swingline Loan, shall be
subject to the following conditions precedent: 

        Section 6.1.   Initial
Credit Event.   Before or concurrently with the initial Credit Event:  

		        (a)   The
Agent shall have received for each Bank the favorable written opinion of Robins, Kaplan, Miller & Ciresi LLP, counsel to the
Borrower in form and substance acceptable to the Banks; 

		        (b)   The
Agent shall have received for each Bank copies of (i) the Articles of Incorporation, together with all amendments, and a
certificate of good standing, for each Credit Party, both certified as of a date not earlier than 20 days prior to the date hereof
by the appropriate governmental officer of such Credit Party’s jurisdiction of incorporation and (ii) such Credit
Party’s bylaws (or comparable constituent documents) and any amendments thereto, certified in each instance by its Secretary or
an Assistant Secretary; 

		        (c)   The
Agent shall have received for each Bank copies of resolutions of each Credit Party’s Board of Directors authorizing the
execution and delivery of the Credit Documents to which it is a party and the consummation of the transactions contemplated thereby
together with specimen signatures of the persons authorized to execute such documents on such Credit Party’s behalf, all
certified in each instance by its Secretary or Assistant Secretary; 

		        (d)   The
Agent shall have received (i) sufficient copies for each Bank of duly executed originals of the Credit Documents (other than
the Notes), (ii) for each Bank such Bank’s duly executed Note of the Borrower dated the date hereof and otherwise in
compliance with the provisions of Section 2.11 hereof and (iii) updated financial statement, tax and judgment lien search
results against the Property of the Borrower 

-31- 

	  	evidencing the absence of material Liens on its Property except as
permitted by Section 7.18 hereof and UCC financing statements to be filed against the Borrower, as debtor, in favor of the
Collateral Agent, as secured party; 

		        (e)   The
Agent shall have received for each Bank a list of the Borrower’s Authorized Representatives, a Borrowing Base Confirmation
showing the Borrowing Base as of not earlier than February 29, 2004 and such other documents as any Bank may reasonably
request; and 

		        (f)   All
legal matters incident to the execution and delivery of the Credit Documents shall be satisfactory to the Banks and each of the
Agent, the Documentation Agent and the Banks has received all fees and other amounts due payable by the Borrower on or before the
Effective Date. 

        Section 6.2.   All
Credit Events.   As of the time of each Credit Event:  

		        (a)   In
the case of a Borrowing, the Agent shall have received the notice required by Section 2.6, and in the case of the issuance of
any Letter of Credit the Issuing Agent shall have received the notice required by Section 2.3(b) and a duly completed
Application for a Letter of Credit and, in the case of an extension or increase in the amount of a Letter of Credit, a written
request therefor, in a form acceptable to the Issuing Agent; 

		        (b)   Each
of the representations and warranties set forth in Section 5 hereof shall be and remain true and correct in all material
respects as of said time, except that if any such representation or warranty relates solely to an earlier date it need only remain
true as of such date; 

		        (c)   No
Default or Event of Default shall have occurred and be continuing or would occur as a result of such Credit Event; 

		        (d)   After
giving effect to the Credit Event the aggregate amount of all Loans (including Swingline Loans) and L/C Obligations shall not exceed
the lesser of (i) the Commitments then in effect and (ii) the Borrowing Base as determined by the Agent; and 

		        (e)   Such
Credit Event shall not violate any order, judgment or decree of any court or other authority or any provision of law or regulation
applicable to any Bank (including, without limitation, Regulation U of the Board of Governors of the Federal Reserve System).

        Each request for a Borrowing
hereunder and each request for the issuance of, increase in the amount of, or extension of the expiration date of, a Letter of
Credit shall be deemed to be a representation and warranty by the Borrower on the date of such Credit Event as to the facts
specified in paragraphs (b)-(e) of this Section 6.2. 

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        Section 6.3.   Determinations
Under Section 6.1.   For purposes of determining compliance with the conditions specified in
Section 6.1, 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
Effective Date specifying its objection thereto. 

SECTION 7.    COVENANTS. 

        The Borrower covenants and
agrees that, so long as any Note (including any Swingline Note) or any L/C Obligation is outstanding hereunder, or any Commitment is
available to or in use by the Borrower hereunder, except to the extent compliance in any case is waived in writing by the Required
Banks: 

        Section 7.1.   Corporate
Existence; Subsidiaries.   The Borrower shall, and shall cause each of its Subsidiaries to, preserve and maintain
its corporate existence, subject to the provisions of Section 7.10 hereof. As a condition to establishing or acquiring any
Subsidiary (except Immaterial Subsidiaries) or if any Immaterial Subsidiary fails to continue to qualify as an Immaterial
Subsidiary, unless the Required Banks otherwise agree, the Borrower shall, promptly after the establishment or acquisition (or such
failure) thereof, (i) cause such Subsidiary to execute a Guarantee, (ii) cause such Subsidiary to deliver documentation similar to
that described in Sections 6.1(b) and (c) relating to the authorization for, execution and delivery of, and validity of such
Subsidiary’s obligations as a Guarantor under the Guarantee in form and substance satisfactory to the Agent and (iii) deliver
an updated Schedule 5.2 to reflect the new Subsidiary. The Borrower shall not change its state of organization without the
Agent’s prior written consent. 

        Section 7.2.   Maintenance.   The
Borrower will maintain, preserve and keep its plants, Properties and equipment necessary to the proper conduct of its business in
reasonably good repair, working order and condition and will from time to time make all reasonably necessary repairs, renewals,
replacements, additions and betterments thereto so that at all times such plants, Properties and equipment shall be reasonably
preserved and maintained, and the Borrower will cause each of its Subsidiaries to do so in respect of Property owned or used by it.

        Section 7.3.   Taxes.   The
Borrower will duly pay and discharge, and will cause each of its Subsidiaries duly to pay and discharge, all material taxes, rates,
assessments, fees and governmental charges upon or against it or against its Properties, in each case before the same becomes
delinquent and before penalties accrue thereon, unless and to the extent that the same is being contested in good faith by
appropriate proceedings and reserves in conformity with GAAP have been provided therefor on the books of the Borrower. 

        Section 7.4.   ERISA.   The
Borrower will, and will cause each of its Subsidiaries to, promptly pay and discharge all obligations and liabilities arising under
ERISA of a character which if unpaid or unperformed might result in the imposition of a Lien against any of its 

-33- 

properties or assets and will promptly notify the Agent of (i) the
occurrence of any reportable event (as defined in ERISA) affecting a Plan, other than any such event of which the PBGC has waived
notice by regulation, (ii) receipt of any notice from PBGC of its intention to seek termination of any Plan or appointment of a
trustee therefor, (iii) its or any of its Subsidiaries’ intention to terminate or withdraw from any Plan, and
(iv) the occurrence of any event affecting any Plan which would reasonably be expected to result in the incurrence by the
Borrower or any of its Subsidiaries of any material liability, fine or penalty, or any material increase in the contingent liability
of the Borrower or any of its Subsidiaries under any post-retirement Welfare Plan benefit. 

        Section 7.5.   Insurance.   The
Borrower will insure, and keep insured, and will cause each of its Subsidiaries to insure, and keep insured, with good and
responsible insurance companies, all insurable Property owned by it of a character usually insured by companies similarly situated
and operating like Property. To the extent usually insured (subject to self-insured retentions) by companies similarly situated and
conducting similar businesses, the Borrower will also insure, and cause each of its Subsidiaries to insure, employers’ and
public and product liability risks with good and responsible insurance companies. The Borrower will upon request of any Bank furnish
to such Bank a summary setting forth the nature and extent of the insurance maintained pursuant to this Section 7.5.

        Section 7.6.   Financial
Reports and Other Information.   (a)   The Borrower will maintain a system of accounting in
accordance with GAAP and will provide sufficient copies to the Agent to furnish to the Banks which the Agent shall promptly forward
to the Banks: 

		        (i)   within
90 days after the end of each fiscal year of the Borrower, a copy of the Borrower’s financial statements for such fiscal
year, including the consolidated balance sheet of the Borrower for such year and the related statement of income and statement of
cash flow, as certified by independent public accountants of recognized national standing selected by the Borrower in accordance
with GAAP with such accountants’ opinion (such opinion to be unqualified) to the effect that the financial statements have been
prepared in accordance with GAAP and present fairly in all material respects in accordance with GAAP the consolidated financial
position of the Borrower and its Subsidiaries as of the close of such fiscal year and the results of their operations and cash flows
for the fiscal year then ended and that an examination of such accounts in connection with such financial statements has been made
in accordance with generally accepted auditing standards and, accordingly, such examination included such tests of the accounting
records and such other auditing procedures as were considered necessary in the circumstances; 

		        (ii)   promptly
upon the filing thereof (if any), copies of all registration statements, Form 10-K, Form 10-Q and Form 8-K reports
and proxy statements which the Borrower or any Subsidiary files with the Securities and Exchange Commission or any successor agency;

		        (iii)   on
or before the 20th day of each month (and concurrent with the delivery of the Borrowing Base Confirmation delivered pursuant to
Section 7.6(a)(iv)), a 

-34- 

	  	consolidated unaudited balance sheet of the Borrower, and the
related statement of income and statement of cash flow, as of the close of, and for, each calendar month, all of the foregoing
prepared by the Borrower in reasonable detail in accordance with GAAP and certified by the Borrower’s President, chief
financial officer or treasurer as fairly presenting the financial condition as at the dates thereof and the results of operations
for the periods covered thereby; 

		        (iv)   as
soon and frequently as available, and in any event at least monthly and within 20 days of the end of each calendar month, a
Borrowing Base Confirmation showing the computation of the Borrowing Base in reasonable detail as of the close of business on the
last day of the period covered thereby, together with such other information as is therein required, prepared by the Borrower and
certified to by the President, chief financial officer or treasurer of the Borrower; provided that, during the continuation
of any Default or Event of Default, the Borrower will provide the foregoing Confirmation and information as often and in detail as
requested by the Agent or the Required Banks; 

		        (v)   promptly
after the sending or filing thereof, copies of all other regular, periodic and special reports and all registration statements the
Borrower files with the SEC or any successor thereto, or with any national securities exchanges; and 

		        (vi)   as
soon as available, and in any event within 30 days after the end of each fiscal year of the Borrower, a copy of the
Borrower’s consolidated operating budget for the following fiscal year, such operating budget to show the Borrower’s
projected consolidated revenues, expenses and balance sheet on a month-by-month basis, such operating budget to be in reasonable
detail prepared by the Borrower and in form satisfactory to the Agent (which shall include a summary of all assumptions made in
preparing such operating budget). 

        (b)   Each
financial statement furnished to the Banks pursuant to subsection (i) of this Section 7.6 shall be accompanied by a
written certificate in the form attached hereto as Exhibit D signed by the Borrower’s President, chief financial officer
or treasurer to the effect that no Default or Event of Default has occurred and is continuing during the period covered by such
statements or, if any such Default or Event of Default has occurred and is continuing during such period, setting forth a
description of such Default or Event of Default and specifying the action, if any, taken by the Borrower to remedy the same.

        (c)   The
Borrower will promptly (and in any event within three Business Days after the President, chief executive, operation or financial
officer or treasurer of the Borrower has knowledge thereof) give notice to the Agent and each Bank: 

		        (i)   of
the occurrence of any Default or Event of Default;  

		        (ii)   of
any default or event of default under any Contractual Obligation (which would reasonably be expected to have a Material Adverse
Effect) of the Borrower or any of its Subsidiaries; 

-35- 

		        (iii)    of
a Material Adverse Effect;

		        (iv)   of
the institution of any litigation or governmental proceeding of the type required to be described in Section 5.5 hereof;

		        (v)   of
any material change in the information set forth on the Schedules hereto; and  

		        (vi)   of
any material change in accounting practices and of any change in depreciation methods with respect to Revenue Equipment.

        Section 7.7.   Bank
Inspection Rights.   Upon reasonable notice from the Agent or the Required Banks, the Borrower will, at the
Borrower’s expense, permit the Agent or such Required Banks (and such Persons as the Agent or any such Bank may designate)
during normal business hours to visit and inspect, under the Borrower’s guidance, any of the properties of the Borrower or any
of its Subsidiaries, to examine all of their books of account, records, reports and other papers, to make copies and extracts
therefrom, and to discuss their respective affairs, finances and accounts with their respective officers, all at such reasonable
times and as often as may be reasonably requested. 

        Section 7.8.   Conduct
of Business.   Neither the Borrower nor any Subsidiary will engage in any line of business if, as a result, the
general nature of the business of either the Borrower or the Borrower and its Subsidiaries taken as a whole would be substantially
changed from that conducted on the date hereof. 

        Section 7.9.   Use
of Proceeds; Regulation U.   The proceeds of each Borrowing, and the credit provided by Letters of Credit,
will be used by the Borrower for (i) working capital purposes, (ii) capital expenditures including revenue equipment
financing, and (iii) general corporate purposes, including non-hostile acquisitions. The Borrower will not use any part of the
proceeds of any of the Borrowings or of the Letters of Credit directly or indirectly to purchase or carry any margin stock (as
defined in Section 5.10 hereof) or to extend credit to others for the purpose of purchasing or carrying any such margin stock.

        Section 7.10.   Mergers,
Consolidations and Sales.   The Borrower shall not, nor shall it permit any Subsidiary to, be a party to any
merger or consolidation; or sell, transfer, lease or otherwise dispose of all or any part of its Property, including as a part of a
sale and leaseback transaction, or in any event, sell or discount (with or without recourse) any of its notes or accounts
receivable; provided, however, that this Section shall not apply to nor operate to prevent (i) the Borrower being a
party to any merger where the Borrower is the surviving Person if, after giving effect to such merger, no Default or Event of
Default would then exist, (ii) any Subsidiary (a) merging into another Subsidiary or the Borrower or (b) being a
party to any merger which does not involve the Borrower or another Subsidiary where such Subsidiary is the surviving Person if,
after giving effect to such merger, no Default or Event of Default would then exist, (iii) the Borrower or any Subsidiary from
selling its inventory, rendering its services or trading in its equipment in the ordinary course of its business and
(iv) sales, transfers and dispositions of assets that are not permitted by any other clause of this Section; provided
that the aggregate fair value 

-36- 

of all assets sold, transferred or otherwise disposed of in reliance on this
clause (iv) in any fiscal year of the Borrower shall not exceed an amount equal to 10% of the consolidated assets of the
Borrower as determined at the end of such fiscal year. 

        Section 7.11.   Use
of Property and Facilities; Environmental and Health and Safety Laws.   (a)   The Borrower will,
and will cause each of its Subsidiaries to, comply in all material respects with the requirements of all Environmental and Health
Laws applicable to or pertaining to the Properties or business operations of the Borrower or any Subsidiary of the Borrower, except
where failure to comply would not reasonably be expected to have a Material Adverse Effect. Without limiting the foregoing, the
Borrower will not, and will not permit any Person within its control to, except in accordance with applicable law, dispose of any
Hazardous Material into, onto or upon any real property owned or operated by the Borrower or any of its Subsidiaries. 

        (b)   The
Borrower will promptly provide the Banks with copies of any notice or other instrument of the type described in Section 5.11(c)
hereof, and in no event later than five (5) Business Days after the President, chief executive, operation or financial officer or
treasurer of the Borrower receives such notice or instrument. 

        Section 7.12.   Dividends
and Other Shareholder Distributions.   The Borrower shall not declare or pay any dividends or make a distribution
of any kind (including by redemption or purchase), other than dividends in the form of the Borrower’s stock, on its outstanding
capital stock; provided, that so long as no Default or Event of Default exists prior to or would result after giving effect
such action, the Borrower may declare and pay dividends or make distributions of any kind (including by redemption or purchase) in
an aggregate amount not to exceed $10,000,000 during the time period from and including March 31, 2004 to and including the
Termination Date. 

        Section 7.13.   Compliance
with Laws.   Without limiting any of the other covenants of the Borrower in this Section Seven, the Borrower
will, and will cause each of its Subsidiaries to, conduct its business, and otherwise be, in compliance with all applicable laws,
regulations, ordinances and orders of any governmental or judicial authorities except where the failure to so comply would not
reasonably be expected to have a Material Adverse Effect. 

        Section 7.14.   Net
Worth.   The Borrower shall, at the end of each Test Period, maintain Net Worth at the end of such Test Period at
not less than the sum of (i) $48,000,000 plus (ii) 75% of Consolidated Net Income for the cumulative period
commencing January 1, 2004 and ending at the end of such Test Period (without taking into account any deficit in Consolidated
Net Income). 

        Section 7.15.   Consolidated
Funded Indebtedness to Consolidated EBITDAR.   The Borrower shall at all times maintain a ratio of Consolidated
Funded Indebtedness to Consolidated EBITDAR of not more than 3.0 to 1.0. 

        Section 7.16.   Minimum
Cash Flow Coverage.   The Borrower shall, at the end of such Test Period, maintain a ratio of
(i) Consolidated EBITDAR less all taxes paid in cash during such Test 

-37- 

Period less Cash Capex plus Net Proceeds from Asset Sales to (ii)
Consolidated Interest and Rental Expense plusCMLTD which shall be not less than 1.25 to 1.0. 

        Section 7.17.   Indebtedness.   The
Borrower shall not, nor shall it permit any Subsidiary to, issue, incur, assume, create or have outstanding any Indebtedness;
provided, however, that the foregoing shall not restrict nor operate to prevent: 

		        (a)   the
Obligations of the Borrower and its Subsidiaries from time to time owing to the Banks under this Agreement; 

		        (b)   in
addition to the Indebtedness permitted by Section 7.17(c) below, purchase money indebtedness and Capitalized Lease Obligations
secured by Liens permitted by Section 7.18(c) hereof; 

		        (c)   existing
Indebtedness of the Borrower and its Subsidiaries in respect of outstanding secured revenue equipment debt as set forth on
Schedule 7.17(c) hereto and which shall amortize or be prepaid according to the amortization listed on such Schedule;

		        (d)   other
existing Indebtedness of the Borrower and its Subsidiaries set forth on Schedule 7.17(d); and 

		        (e)   Indebtedness
of the Borrower not to exceed $1,500,000 in connection with liability arising out of the processing of incoming and outgoing
transfer of funds by automatic clearing house transfer, wire transfer, or otherwise pursuant to agreement or overdraft and related
cash management services afforded to Borrower or any of its Subsidiaries by any Bank or affiliate of any Bank. 

        Section 7.18.   Liens.   The
Borrower shall not, nor shall it permit any Subsidiary to, create, incur or permit to exist any Lien of any kind on any Property
owned by the Borrower or any Subsidiary; provided, however, that the foregoing shall not apply to nor operate to prevent:

		        (a)   Liens
arising by statute in connection with worker’s compensation, unemployment insurance, old age benefits, social security
obligations, taxes, assessments, statutory obligations or other similar charges, good faith cash deposits in connection with
tenders, contracts or leases to which the Borrower or any Subsidiary is a party or other cash deposits required to be made in the
ordinary course of business, provided in each case that the obligation is not for borrowed money and that the obligation secured is
not overdue or, if overdue, is being contested in good faith by appropriate proceedings which prevent enforcement of the matter
under contest and adequate reserves have been established therefor; 

		        (b)   mechanics’,
workmen’s, materialmen’s, landlords’, carriers’, or other similar Liens arising in the ordinary course of
business with respect to obligations which are not due or which are being contested in good faith by appropriate proceedings which
prevent enforcement of the matter under contest; 

-38- 

		        (c)   Liens
on property of the Borrower or any of its Subsidiaries created solely for the purpose of securing indebtedness permitted by
Section 7.17(b) hereof, representing or incurred to finance, refinance or refund the purchase price of Property,
provided that no such Lien shall extend to or cover other Property of the Borrower or such Subsidiary other than the
respective Property so acquired, and the principal amount of indebtedness secured by any such Lien shall at no time exceed the
original purchase price of such Property; 

		        (d)   Liens
as set forth in Schedule 5.12; 

		        (e)   Liens
in favor of the Collateral Agent for the Banks under the Security Agreement; and 

		        (f)   Liens
in connection with Indebtedness permitted pursuant to Section 7.17(e) on a pari-passu basis with the liens granted under
the Security Agreement. 

        Section 7.19.   Investments,
Acquisitions, Loans, Advances and Guaranties.   The Borrower shall not, nor shall it permit any Subsidiary to,
directly or indirectly, make, retain or have outstanding any investments (whether through purchase of stock or obligations or
otherwise) in, or loans or advances (other than for travel advances and other similar cash advances made to employees in the
ordinary course of business) to, any other Person, or acquire all or any substantial part of the assets or business of any other
Person or division thereof, or be or become liable as endorser, guarantor, surety or otherwise for any debt, obligation or
undertaking of any other Person, or otherwise agree to provide funds for payment of the obligations of another, or supply funds
thereto or invest therein or otherwise assure a creditor of another against loss, or apply for or become liable to the issuer of a
letter of credit which supports an obligation of another, or subordinate any claim or demand it may have to the claim or demand of
any other Person; provided, however, that the foregoing shall not apply to nor operate to prevent: 

		        (a)   investments
in direct obligations of the United States of America or of any agency or instrumentality thereof whose obligations constitute full
faith and credit obligations of the United States of America, provided that any such obligations shall mature within one year
of the date of issuance thereof; 

		        (b)   investments
in commercial paper rated at least P-1 by Moody’s Investors Services, Inc. and at least A-1 by Standard &
Poor’s Corporation maturing within 270 days of the date of issuance thereof; 

		        (c)   investments
in certificates of deposit, eurodollar deposits, bank notes and bankers acceptances issued or accepted, as the case may be, by any
commercial bank rated at least A3 by Moody’s Investors Services, Inc. and/or at least A by Standard & Poor’s
Corporation and which have a maturity of one year or less; 

		        (d)   investments
in repurchase obligations with a term of not more than 90 days for underlying securities of the types described in
subsection (a) above entered into with any bank meeting the qualifications specified in subsection (c) above, provided 

-39- 

	  	all such agreements require physical delivery of the securities
securing such repurchase agreement, except those delivered through the Federal Reserve Book Entry System; 

		        (e)   investments
in money market funds that invest solely, and which are restricted by their respective charters to invest solely, in investments of
the type described (x) in the immediately preceding subsections (a), (b), (c) and (d) above or (y) in taxable or
tax-exempt securities issued by state or local governments located in the United States; 

		        (f)   investments
in fixed-rate municipal notes, tax-exempt commercial paper, commercial paper mode, variable-rate demand obligations, P-Floats and
R-Floats; provided, that such investment (x) meets the quality and maturity standards for money market purchases set
forth in Rule 2a-7 of the Investment Company Act of 1940 and (y) matures no later than 90 days from the date of issuance
thereof; 

		        (g)   endorsement
of items for deposit or collection of commercial paper received in the ordinary course of business; 

		        (h)   existing
equity investments in Subsidiaries of the Borrower; 

		        (i)   guaranty
by the Subsidiaries pursuant to the Guarantees; 

		        (j)   acquisitions
of all or substantially all of the assets or business of any other Person engaged in the same or similar business as the Borrower or
any of its Subsidiaries, or of a division of a Person engaged in such a business, or of all or substantially all the Voting Stock of
a Person, so long as (i) no Default or Event of Default exists or would exist after giving effect to such acquisition,
(ii) the Board of Directors or other governing body of such Person whose Property or Voting Stock is being so acquired has
approved the terms of such acquisition, (iii) the Borrower can demonstrate that (on a pro forma basis as to
Section 7.15) after giving effect to such acquisition it will continue to comply through the term of this Agreement with all
the terms and conditions of the Credit Documents, (iv) consideration (cash and non-cash) for such acquisition does not exceed
$10,000,000 and (v) the Borrower has provided to the Banks such financial and other information regarding the Person whose
Property or Voting Stock is being so acquired, including historical financial statements, and a description of such Person, as the
Agent or the Required Banks have reasonably requested; and 

		        (k)   guarantees
by the Borrower of loans made to independent truck drivers leasing or contracting for equipment and services with the Borrower up to
a maximum principal amount of $3,000,000 at any one time outstanding. 

In determining the amount of investments, acquisitions, loans, advances and
guarantees permitted under this Section 7.19, investments and acquisitions shall always be taken at the original cost thereof
(regardless of any subsequent appreciation or depreciation therein), loans and advances shall be taken at the principal amount
thereof then remaining unpaid, and guarantees shall be taken at the amount of obligations guaranteed thereby. 

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SECTION 8.    EVENTS OF DEFAULT AND REMEDIES. 

        Section 8.1.   Events
of Default.   Any one or more of the following shall constitute an Event of Default:  

		        (a)   (i)   default
in the payment when due of the principal amount of any Loan or of any Reimbursement Obligation or (ii) default in the payment
when due of fees, interest or of any other Obligation; 

		        (b)   default
by the Borrower in the observance or performance of any covenant set forth in Section 7.10, 7.12, 7.14 through and including
Section 7.19 hereof; 

		        (c)   default
by the Borrower in the observance or performance of any provision hereof or of any other Credit Document not mentioned in (a)
or (b) above, which is not remedied within thirty (30) days after notice thereof shall have been given to the Borrower by
the Agent; 

		        (d)   (i)   failure
to pay when due Indebtedness in an aggregate principal amount of $2,000,000 or more of the Borrower or any Subsidiary or
(ii) default shall occur under one or more indentures, agreements or other instruments under which any Indebtedness of the
Borrower or any Subsidiary in an aggregate principal amount of $2,000,000 or more may be issued or created and such default shall
continue for a period of time sufficient to permit the holder or beneficiary of such Indebtedness or a trustee therefor to cause the
acceleration of the maturity of any such Indebtedness or any mandatory unscheduled prepayment, purchase or funding thereof;

		        (e)   any
representation or warranty made herein or in any other Credit Document by a Credit Party, or in any statement or certificate
furnished pursuant hereto or pursuant to any other Credit Document by a Credit Party, or in connection with any Credit Document,
proves untrue in any material respect as of the date of the issuance or making, or deemed making or issuance, thereof;

		        (f)   the
Borrower or any Subsidiary shall (i) have entered involuntarily against it an order for relief under the United States
Bankruptcy Code, as amended, or any analogous action is taken under any other applicable law relating to bankruptcy or insolvency
not dismissed or fully bonded within 90 days, (ii) fail to pay, or admit in writing its inability to pay, its debts generally
as they become due, (iii) make an assignment for the benefit of creditors, (iv) apply for, seek, consent to, or acquiesce
in, the appointment of a receiver, custodian, trustee, examiner, liquidator or similar official for it or any substantial part of
its Property, (v) institute any proceeding seeking to have entered against it an order for relief under the United States
Bankruptcy Code, as amended, to adjudicate it insolvent, or seeking dissolution, winding up, liquidation, reorganization,
arrangement, adjustment or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors or fail to file an answer or other pleading denying the material allegations of any such proceeding filed against
it, (vi) take any corporate action (such as the passage by the Borrower’s board of 

-41- 

	  	directors of a resolution) in furtherance of any matter described in
parts (i)-(v) above, or (vii) fail to contest in good faith any appointment or proceeding described in Section 8.1(g)
hereof; 

		    (g)       
a custodian, receiver, trustee, examiner, liquidator or similar official shall
be appointed for the Borrower or any material Subsidiary or any substantial part
of any of their Property, or a proceeding described in Section 8.1(f)(v)
shall be instituted against the Borrower or any Subsidiary, and such appointment
continues undischarged or such proceeding continues undismissed or unstayed for
a period of ninety (90) days; 

		        (h)   the
Borrower or any Subsidiary shall fail within forty-five (45) days to pay, bond or otherwise discharge any judgment or order for
the payment of money in excess of $2,000,000, which is not stayed on appeal or otherwise being appropriately contested in good faith
in a manner that stays execution thereon; 

		        (i)   the
Borrower or any other member of the Controlled Group shall fail to pay when due an amount or amounts which it shall have become
liable to pay to the PBGC or to a Plan under Title IV of ERISA; or notice of intent to terminate a Plan or Plans having aggregate
Unfunded Vested Liabilities in excess of $2,000,000 (collectively, a “Material Plan”) shall be filed under
Title IV of ERISA by the Borrower or any Subsidiary or any other member of the Controlled Group, any plan administrator or any
combination of the foregoing; or the PBGC shall institute proceedings under Title IV of ERISA to terminate or to cause a trustee to
be appointed to administer any Material Plan or a proceeding shall be instituted by a fiduciary of any Material Plan against the
Borrower or any other member of the Controlled Group to enforce Section 515 or 4219(c)(5) of ERISA and such proceeding shall
not have been dismissed within thirty (30) days thereafter; or a condition shall exist by reason of which the PBGC would be entitled
to obtain a decree adjudicating that any Material Plan must be terminated; 

		        (j)   Borrower’s
or any Subsidiary’s obligations under any Credit Document ceases to be in full force and effect, any Guarantor or any Person
acting on behalf of such Guarantor shall deny, disaffirm or repudiate such Guarantor’s obligations under the Guarantees, or an
event of default occurs and remains unremedied for 30 days under any of the Credit Documents; 

		        (k)   a
Change of Control shall occur; or 

		        (l)   the
Obligations shall cease to rank at least pari passu in right of payment with all other senior unsecured obligations of the
Borrower. 

        Section 8.2.   Non-Bankruptcy
Defaults.   When any Event of Default other than those described in subsections (f) or (g) of
Section 8.1 hereof has occurred and is continuing, the Agent shall, by written notice to the Borrower, if so directed by the
Required Banks: (a) terminate the remaining Commitments and all other obligations of the Banks hereunder on the date stated in
such notice (which may be the date thereof); (b) declare the principal of and the accrued interest on all outstanding Notes to
be forthwith due and payable and thereupon all outstanding Notes, 

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including both principal and interest thereon, shall be and become immediately
due and payable together with all other amounts payable under the Credit Documents without further demand, presentment, protest or
notice of any kind; and (c) demand that the Borrower immediately pay to the Agent, subject to Section 8.4, the full amount
then available for drawing under each or any Letter of Credit, and the Borrower agrees to immediately make such payment and
acknowledges and agrees that the Banks would not have an adequate remedy at law for failure by the Borrower to honor any such demand
and that the Agent, for the benefit of the Banks, shall have the right to require the Borrower to specifically perform such
undertaking whether or not any drawings or other demands for payment have been made under any Letter of Credit. The Agent, after
giving notice to the Borrower pursuant to Section 8.1(c) or this Section 8.2, shall also promptly send a copy of such
notice to the other Banks, but the failure to do so shall not impair or annul the effect of such notice. 

        Section 8.3.   Bankruptcy
Defaults.   When any Event of Default described in subsections (f) or (g) of Section 8.1 hereof
has occurred and is continuing, then all outstanding Notes shall immediately become due and payable together with all other amounts
payable under the Credit Documents without presentment, demand, protest or notice of any kind, the obligation of the Banks to extend
further credit pursuant to any of the terms hereof shall immediately terminate and the Borrower shall immediately pay to the Agent,
subject to Section 8.4, the full amount then available for drawing under all outstanding Letters of Credit, the Borrower
acknowledging that the Banks would not have an adequate remedy at law for failure by the Borrower to honor any such demand and that
the Banks, and the Agent on their behalf, shall have the right to require the Borrower to specifically perform such undertaking
whether or not any draws or other demands for payment have been made under any of the Letters of Credit. 

        Section 8.4.   Collateral
for Undrawn Letters of Credit.   (a)   If the payment or prepayment of the amount available for
drawing under any or all outstanding Letters of Credit is required under Sections 2.3(b), 2.3(c), 8.2, 8.3 or otherwise, the
Borrower shall forthwith pay the amount required to be so prepaid, to be held by the Agent as provided in subsection (b) below.

        (b)   All
amounts prepaid pursuant to subsection (a) above shall be held by the Agent in a separate collateral account (such account, and
the credit balances, properties and any investments from time to time held therein, and any substitutions for such account, any
certificate of deposit or other instrument evidencing any of the foregoing and all proceeds of and earnings on any of the foregoing
being collectively called the “Account”) as security for, and for application by the Agent (to the extent
available) to, the reimbursement of any payment under any Letter of Credit then or thereafter made by the Issuing Agent, and to the
payment of the unpaid balance of any Loans and all other Obligations. The Account shall be held in the name of and subject to the
exclusive dominion and control of the Agent for the benefit of the Agent, the Issuing Agent and the Banks. If and when requested by
the Borrower, the Agent shall invest funds held in the Account from time to time in direct obligations of, or obligations the
principal of and interest on which are unconditionally guaranteed by, the United States of America with a remaining maturity of one
year or less, provided that the Agent is irrevocably authorized to sell investments held in the Account when and as required
to make payments out of the Account for application to amounts due and owing from the Borrower to the Agent, the Issuing Agent or
Banks; provided, however,that if (i) the Borrower shall have made payment of all such obligations referred to in 

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subsection (a) above, (ii) all relevant preference or other
disgorgement periods relating to the receipt of such payments have passed, and (iii) no Letters of Credit, Commitments, Loans
or other Obligations remain outstanding hereunder, then the Agent shall repay to the Borrower any remaining amounts held in the
Account. 

        Section 8.5.   Expenses.   The
Borrower agrees to pay to the Agent, the Documentation Agent, the Issuing Agent and each Bank, and any other holder of any Note
outstanding hereunder, all costs and expenses incurred or paid by the Agent, the Documentation Agent, the Issuing Agent or such Bank
or any such holder, including attorneys’ fees (including those fees and costs attributable to in-house attorneys) and court
costs, in connection with any Default or Event of Default by the Borrower hereunder or in connection with the enforcement of any of
the Credit Documents. 

SECTION 9.    CHANGE IN CIRCUMSTANCES. 

        Section 9.1.   Change
of Law.   Notwithstanding any other provisions of this Agreement or any Note, if at any time after the date
hereof any change in applicable law or regulation or in the interpretation thereof makes it unlawful for any Bank to make or
continue to maintain Eurodollar Loans or to perform its obligations as contemplated hereby, such Bank shall promptly give notice
thereof to the Borrower and such Bank’s obligations to make or maintain Eurodollar Loans under this Agreement shall terminate
until it is no longer unlawful for such Bank to make or maintain Eurodollar Loans. The Borrower shall prepay on demand the
outstanding principal amount of any such affected Eurodollar Loans, together with all interest accrued thereon at a rate per annum
equal to the interest rate applicable to such Loan; provided, however, subject to all of the terms and conditions of this
Agreement, the Borrower may then elect to borrow the principal amount of the affected Eurodollar Loans from such Bank by means of
Base Rate Loans from such Bank, which Base Rate Loans shall not be made ratably by the Banks but only from such affected Bank.

        Section 9.2.   Unavailability
of Deposits or Inability to Ascertain, or Inadequacy of, LIBOR.   If on or prior to the first day of any Interest
Period for any Borrowing of Eurodollar Loans: 

		        (a)   the
Agent determines that deposits in U.S. Dollars (in the applicable amounts) are not being offered to it in the eurodollar interbank
market for such Interest Period, or that by reason of circumstances affecting the interbank eurodollar market adequate and
reasonable means do not exist for ascertaining the applicable LIBOR, or 

		        (b)   Banks
having at least a majority of the aggregate amount of the Commitments reasonably determine and so advise the Agent that LIBOR as
reasonably determined by the Agent will not adequately and fairly reflect the cost to such Banks or Bank of funding their or its
Eurodollar Loans or Loan for such Interest Period (such cost to be determined as if each such Bank had actually funded each
Eurodollar Loan through the purchase of deposits of U.S. Dollars in the London eurodollar interbank market having a maturity
corresponding to such Loan’s Interest Period and in the amount of such Loan), 

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then the Agent shall forthwith give notice thereof to the Borrower and the
Banks, whereupon until the Agent notifies the Borrower that the circumstances giving rise to such suspension no longer exist, the
obligations of the Banks or of the relevant Bank to make Eurodollar Loans shall be suspended. 

        Section 9.3.   Increased
Cost and Reduced Return.   (a)   If, on or after the date hereof, the adoption of any applicable
law, rule or regulation, or any change therein, or any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Bank
(or its Lending Office) with any request or directive (whether or not having the force of law but, if not having the force of law,
compliance with which is customary in the relevant jurisdiction) of any such authority, central bank or comparable agency:

		        (i)   shall
subject any Bank (or its Lending Office) to any tax, duty or other charge with respect to its Eurodollar Loans, its Note, its
Letter(s) of Credit, or its participation in any thereof, any Reimbursement Obligations owed to it or its obligation to make
Eurodollar Loans, issue a Letter of Credit, or to participate therein, or shall change the basis of taxation of payments to any Bank
(or its Lending Office) of the principal of or interest on its Eurodollar Loans, Letter(s) of Credit, or participations therein or
any other amounts due under this Agreement in respect of its Eurodollar Loans, Letter(s) of Credit, or participations therein, any
Reimbursement Obligations owed to it, or its obligation to make Eurodollar Loans, issue a Letter of Credit, or acquire
participations therein (except for changes in the rate of tax on the overall net income or profits of such Bank or its Lending
Office imposed by the jurisdiction in which such Bank or its Lending Office is incorporated in which such Bank’s principal
executive office or Lending Office is located); or 

		        (ii)   shall
impose, modify or deem applicable any reserve, special deposit or similar requirement (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve System, but excluding with respect to any Eurodollar Loans any
such requirement included in an applicable Eurodollar Reserve Percentage) against assets of, deposits with or for the account of, or
credit extended by, any Bank (or its Lending Office) or shall impose on any Bank (or its Lending Office) or on the interbank market
any other condition affecting its Eurodollar Loans, its Notes, its Letter(s) of Credit, or its participation in any thereof, any
Reimbursement Obligation owed to it, or its obligation to make Eurodollar Loans, to issue a Letter of Credit, or to participate
therein; 

and the result of any of the foregoing is to increase the cost to such Bank (or
its Lending Office) of making or maintaining any Eurodollar Loan, issuing or maintaining a Letter of Credit, or participating
therein, or to reduce the amount of any sum received or receivable by such Bank (or its Lending Office) under this Agreement or
under its Notes with respect thereto, by an amount deemed by such Bank to be material, then, within fifteen (15) days after demand
by such Bank (with a copy to the Agent), the Borrower shall be obligated to pay to such Bank such additional amount or amounts as
will compensate such Bank for such increased cost or reduction. 

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        (b)   If on or
after the date hereof, any Bank or the Agent shall have determined that the adoption of any applicable law, rule or regulation
regarding capital adequacy, or any change therein (including, without limitation, any revision in the Final Risk-Based Capital
Guidelines of the Board of Governors of the Federal Reserve System (12 CFR Part 208, Appendix A; 12 CFR Part 225,
Appendix A) or of the Office of the Comptroller of the Currency (12 CFR Part 3, Appendix A), or in any other
applicable capital rules heretofore adopted and issued by any governmental authority), or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Lending Office) with any request or directive regarding capital adequacy
(whether or not having the force of law but, if not having the force of law, compliance with which is customary in the applicable
jurisdiction) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return
on such Bank’s capital, or on the capital of any corporation controlling such Bank, as a consequence of its obligations
hereunder to a level below that which such Bank could have achieved but for such adoption, change or compliance (taking into
consideration such Bank’s policies with respect to capital adequacy) by an amount deemed by such Bank to be material, then from
time to time, within fifteen (15) days after demand by such Bank (with a copy to the Agent), the Borrower shall pay to such
Bank such additional amount or amounts as will compensate such Bank for such reduction. 

        (c)   Each Bank
that determines to seek compensation under this Section 9.3 shall notify the Borrower and the Agent of the circumstances that
entitle the Bank to such compensation pursuant to this Section 9.3 and will designate a different Lending Office if such
designation will avoid the need for, or reduce the amount of, such compensation and will not, in the sole judgment of such Bank, be
otherwise disadvantageous to such Bank. A certificate of any Bank claiming compensation under this Section 9.3 and setting
forth the additional amount or amounts to be paid to it hereunder shall be conclusive in the absence of manifest error. In
determining such amount, such Bank may use any reasonable averaging and attribution methods. 

        Section 9.4.   Lending
Offices.   Each Bank may, at its option, elect to make its Loans hereunder at the branch, office or affiliate
specified on the appropriate signature page hereof or in the assignment agreement which any assignee bank executes pursuant to
Section 11.12 hereof (each a “Lending Office”) for each type of Loan available hereunder or at such other of
its branches, offices or affiliates as it may from time to time elect and designate in a written notice to the Borrower and the
Agent. 

        Section 9.5.   Discretion
of Bank as to Manner of Funding.   Notwithstanding any other provision of this Agreement, each Bank shall be
entitled to fund and maintain its funding of all or any part of its Loans in any manner it sees fit, it being understood, however,
that for the purposes of this Agreement all determinations hereunder shall be made as if each Bank had actually funded and
maintained each Eurodollar Loan through the purchase of deposits of U.S. Dollars in the London eurodollar interbank market having a
maturity corresponding to such Loan’s Interest Period and bearing an interest rate equal to LIBOR for such Interest Period.

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SECTION 10.    THE AGENT. 

        Section 10.1.   Appointment
and Authorization of Agent.   Each Bank hereby appoints LaSalle as the Agent under the Credit Documents and
hereby authorizes the Agent to take such action as Agent on its behalf and to exercise such powers under the Credit Documents as are
delegated to the Agent by the terms thereof, together with such powers as are reasonably incidental thereto. The relationship
between the Agent and the Banks is and shall be that of agent and principal only, and nothing contained in this Agreement or any
other Credit Document shall be construed to constitute the Agent as a trustee or fiduciary for any Bank or the Borrower. 

        Section 10.2.   Agent
and its Affiliates.   The Agent shall have the same rights and powers under this Agreement and the other Credit
Documents 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, lend money to, and generally engage in any kind of banking, trust, debt, equity or other
business with the Borrower or any affiliate of the Borrower as if it were not the Agent under the Credit Documents. 

        Section 10.3.   Action
by Agent.   If the Agent receives from the Borrower a written notice of an Event of Default pursuant to
Section 7.6(c)(i) hereof, the Agent shall promptly give each of the Banks written notice thereof. The obligations of the Agent
under the Credit Documents are only those expressly set forth therein. Without limiting the generality of the foregoing, the Agent
shall not be required to take any action hereunder with respect to any Default or Event of Default, except as expressly provided in
Sections 8.2 and 8.4. In no event, however, shall the Agent be required to take any action in violation of applicable law or of
any provision of any Credit Document, and the Agent shall in all cases be fully justified in failing or refusing to act hereunder or
under any other Credit Document unless it shall be first indemnified to its reasonable satisfaction by the Banks against any and all
costs, expense, and liability which may be incurred by it by reason of taking or continuing to take any such action. The Agent shall
be entitled to assume that no Default or Event of Default exists unless notified to the contrary by a Bank or the Borrower. In all
cases in which this Agreement and the other Credit Documents do not require the Agent to take certain actions, the Agent shall be
fully justified in using its discretion in failing to take or in taking any action hereunder and thereunder. 

        Section 10.4.   Consultation
with Experts.   The Agent may consult with legal counsel, independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be taken by it in good faith in accordance with the advice
of such counsel, accountants or experts. 

        Section 10.5.   Liability
of Agent; Credit Decision.   Neither the Agent nor any of its directors, officers, agents, or employees shall be
liable for any action taken or not taken by it in connection with the Credit Documents (i) with the consent or at the request
of the Required Banks or (ii) in the absence of its own gross negligence or willful misconduct. Neither the Agent nor any of
its directors, officers, agents or employees shall be responsible for or have any duty to ascertain, inquire into or verify
(i) any statement, warranty or representation made in connection with this Agreement, any other Credit Document or any Credit
Event; (ii) the performance or observance of any of the covenants or agreements of the Borrower or any other party (other than

-47- 

the Agent) contained herein or in any other Credit Document; (iii) the
satisfaction of any condition specified in Section Six hereof, except receipt of items required to be delivered to the Agent;
or (iv) the validity, effectiveness, genuineness, enforceability, perfection, value, worth or collectibility hereof or of any
other Credit Document or of any other documents or writing furnished in connection with any Credit Document; and the Agent makes no
representation of any kind or character with respect to any such matter mentioned in this sentence. The Agent may execute any of its
duties under any of the Credit Documents by or through employees, agents, and attorneys-in-fact and shall not be answerable to the
Banks, the Borrower, or any other Person for the default or misconduct of any such agents or attorneys-in-fact selected with
reasonable care. The Agent shall not incur any liability by acting in reliance upon any notice, consent, certificate, other document
or statement (whether written or oral) believed by it to be genuine or to be sent by the proper party or parties. In particular and
without limiting any of the foregoing, the Agent shall have no responsibility for confirming the accuracy of any Compliance
Certificate or other document or instrument received by it under the Credit Documents. The Agent may treat the payee of any Note as
the holder thereof until written notice of transfer shall have been filed with the Agent signed by such payee in form satisfactory
to the Agent. Each Bank acknowledges that it has independently and without reliance on the Agent or any other Bank, and based upon
such information, investigations and inquiries as it deems appropriate, made its own credit analysis and decision to extend credit
to the Borrower in the manner set forth in the Credit Documents. It shall be the responsibility of each Bank to keep itself informed
as to the creditworthiness of the Borrower and any other relevant Person, and the Agent shall have no liability to any Bank with
respect thereto. 

        Section 10.6.   Indemnity.   The
Banks shall ratably, in accordance with their respective Percentages (determined before giving effect to any termination of the
Commitments pursuant to Section 8.2 or 8.3), indemnify and hold the Agent, and its directors, officers, employees, agents and
representatives harmless from and against any liabilities, losses, costs or expenses suffered or incurred by the Agent acting in its
capacity as Agent under any Credit Document or in connection with the transactions contemplated thereby, regardless of when asserted
or arising, except to the extent they are promptly reimbursed for the same by the Borrower and except to the extent that any event
giving rise to a claim was caused by the gross negligence or willful misconduct of the party seeking to be indemnified. The
obligations of the Banks under this Section 10.6 shall survive termination of this Agreement. 

        Section 10.7.   Resignation
of Agent and Successor Agent.   The Agent may resign at any time by giving written notice thereof to the Banks
and the Borrower. Upon any such resignation of the Agent, the Required Banks shall have the right to appoint a successor Agent with
the consent of the Borrower (except Borrower’s consent is not required during the occurrence and continuance of a Default or
Event of Default). If no successor Agent shall have been so appointed by the Required Banks, and shall have accepted such
appointment, within thirty (30) days after the retiring Agent’s giving of notice of resignation, then the retiring Agent may,
on behalf of the Banks, appoint a successor Agent, with the consent of the Borrower (except upon the occurrence and continuance of a
Default or Event of Default), which shall be any Bank hereunder or any commercial bank organized under the laws of the United States
of America or of any State thereof and having a combined capital and surplus of at least $200,000,000. Upon the acceptance of its
appointment as the Agent hereunder, such successor Agent shall thereupon 

-48- 

succeed to and become vested with all the rights and duties of the retiring or
removed Agent under the Credit Documents, and the retiring Agent shall be discharged from its duties and obligations thereunder.
After any retiring Agent’s resignation hereunder as Agent, the provisions of this Section Ten and all protective
provisions of the other Credit Documents shall inure to its benefit as to any actions taken or omitted to be taken by it while it
was Agent. 

        Section 10.8.   Documentation
Agent.   Nothing in this Agreement shall impose any obligation on U.S. Bank, in its capacity as Documentation
Agent. 

SECTION 11.    MISCELLANEOUS. 

        Section 11.1.   Withholding Taxes.  

        (a)   Payments
Free of Withholding.   Subject to Section 11.1(b) hereof, each payment by the Borrower under this Agreement
or the other Credit Documents shall be made without withholding for or on account of any present or future taxes (other than overall
net income taxes on the recipient). If any such withholding is so required, the Borrower shall make the withholding, pay the amount
withheld to the appropriate governmental authority before penalties attach thereto or interest accrues thereon and forthwith pay
such additional amount as may be necessary to ensure that the net amount actually received by each Bank and the Agent free and clear
of such taxes (including such taxes on such additional amount) is equal to the amount which that Bank or the Agent (as the case may
be) would have received had such withholding not been made. If the Agent or any Bank pays any amount in respect of any such taxes,
penalties or interest the Borrower shall reimburse the Agent or that Bank for that payment on demand. If the Borrower pays any such
taxes, penalties or interest, it shall deliver official tax receipts evidencing that payment or certified copies thereof to the Bank
or Agent on whose account such withholding was made (with a copy to the Agent if not the recipient of the original) on or before the
thirtieth day after payment. 

        (b)   U.S.
Withholding Tax Exemptions.   Each Bank that is not a United States person (as such term is defined in
Section 7701(a)(30) of the Code) shall submit to the Borrower and the Agent on or before the earlier of the date the initial
Borrowing is made hereunder and thirty (30) days after the date hereof, two duly completed and signed copies of either Form
W-8BEN (relating to such Bank and entitling it to a complete exemption from withholding under the Code on all amounts to be received
by such Bank, including fees, pursuant to the Credit Documents and the Loans) or Form W-8ECI (relating to all amounts to be received
by such Bank, including fees, pursuant to the Credit Documents and the Loans) of the United States Internal Revenue Service.
Thereafter and from time to time, each Bank shall submit to the Borrower and the Agent such additional duly completed and signed
copies of one or the other of such Forms (or such successor forms as shall be adopted from time to time by the relevant
United States taxing authorities) as may be (i) requested by the Borrower in a written notice, directly or through the
Agent, to such Bank and (ii) required under then-current United States law or regulations to avoid or reduce United States
withholding taxes on payments in respect of all amounts to be received by such Bank, including fees, pursuant to the Credit
Documents or the Loans.

-49- 

        (c)   Inability
of Bank to Submit Forms.   If any Bank determines, as a result of any change in applicable law, regulation or
treaty, or in any official application or interpretation thereof, that it is unable to submit to the Borrower or Agent any form or
certificate that such Bank is obligated to submit pursuant to subsection (b) of this Section 11.1. or that such Bank is
required to withdraw or cancel any such form or certificate previously submitted or any such form or certificate otherwise becomes
ineffective or inaccurate, such Bank shall promptly notify the Borrower and Agent of such fact and the Bank shall to that extent not
be obligated to provide any such form or certificate and will be entitled to withdraw or cancel any affected form or certificate, as
applicable. 

        Section 11.2.   No
Waiver of Rights.   No delay or failure on the part of the Agent or any Bank or on the part of the holder or
holders of any Note in the exercise of any power or right under any Credit Document shall operate as a waiver thereof, nor as an
acquiescence in any default, nor shall any single or partial exercise thereof preclude any other or further exercise of any other
power or right, and the rights and remedies hereunder of the Agent, the Documentation Agent, the Banks and the holder or holders of
any Notes are cumulative to, and not exclusive of, any rights or remedies which any of them would otherwise have. 

        Section 11.3.   Non-Business
Day.   If any payment of principal or interest on any Loan or of any other Obligation shall fall due on a day
which is not a Business Day, interest or fees (as applicable) at the rate, if any, such Loan or other Obligation bears for the
period prior to maturity shall continue to accrue on such Obligation from the stated due date thereof to and including the next
succeeding Business Day (subject to the definition of Interest Period), on which the same shall be payable. 

        Section 11.4.   Documentary
Taxes.   The Borrower agrees that it will pay any documentary, stamp or similar taxes payable in respect to any
Credit Document, including interest and penalties, in the event any such taxes are assessed, irrespective of when such assessment is
made and whether or not any credit is then in use or available hereunder. 

        Section 11.5.   Survival
of Representations.   All representations and warranties made herein or in certificates given pursuant hereto shall survive the
execution and delivery of this Agreement and the other Credit Documents, and shall continue in full force and effect with respect to
the date as of which they were made as long as any credit is in use or available hereunder. 

        Section 11.6.   Survival
of Indemnities.   All indemnities and all other provisions relative to reimbursement to the Banks of amounts
sufficient to protect the yield of the Banks with respect to the Loans, including, but not limited to, Section 2.12,
Section 9.3 and Section 11.15 hereof, shall survive the termination of this Agreement and the other Credit Documents and
the payment of the Loans and all other Obligations. 

        Section 11.7.   Set-Off.   (a)   In
addition to any rights now or hereafter granted under applicable law and not by way of limitation of any such rights, upon the
occurrence of any Event of Default, each Bank and each subsequent holder of any Note is hereby authorized by the Borrower at any
time or from time to time, without notice to the Borrower or to any other Person, 

-50- 

any such notice being hereby expressly waived, to set off and to appropriate
and to apply any and all deposits (general or special, including, but not limited to, Indebtedness evidenced by certificates of
deposit, whether matured or unmatured, and in whatever currency denominated) and any other Indebtedness at any time held or owing by
that Bank or that subsequent holder to or for the credit or the account of the Borrower, whether or not matured, against and on
account of the obligations and liabilities of the Borrower to that Bank or that subsequent holder under the Credit Documents,
including, but not limited to, all claims of any nature or description arising out of or connected with the Credit Documents,
irrespective of whether or not (a) that Bank or that subsequent holder shall have made any demand hereunder or (b) the
principal of or the interest on the Loans or Notes and other amounts due hereunder shall have become due and payable pursuant to
Section 8 and although said obligations and liabilities, or any of them, may be contingent or unmatured. 

        (b)   Each Bank
agrees with each other Bank a party hereto that if such Bank shall receive and retain any payment, whether by set-off or application
of deposit balances or otherwise, on any of the Loans or Reimbursement Obligations in excess of its ratable share of payments on all
such obligations then outstanding to the Banks, then such Bank shall purchase for cash at face value, but without recourse, ratably
from each of the other Banks such amount of the Loans or Reimbursement Obligations, or participations therein, held by each such
other Banks (or interest therein) as shall be necessary to cause such Bank to share such excess payment ratably with all the other
Banks; provided, however,that if any such purchase is made by any Bank, and if such excess payment or part thereof is
thereafter recovered from such purchasing Bank, the related purchases from the other Banks shall be rescinded ratably and the
purchase price restored as to the portion of such excess payment so recovered, but without interest. For purposes of this
Section 11.7(b), amounts owed to or recovered by, the Issuing Agent in connection with Reimbursement Obligations in which Banks
have been required to fund their participation shall be treated as amounts owed to or recovered by the Issuing Agent as a Bank
hereunder. 

        Section 11.8.   Notices.   Except
as otherwise specified herein, all notices under the Credit Documents shall be in writing (including telecopy or other electronic
communication) and shall be given to a party hereunder at its address or telecopier number set forth below or such other address or
telecopier number as such party may hereafter specify by notice to the Agent and the Borrower, given by courier, by United States
certified or registered mail, or by other telecommunication device capable of creating a written record of such notice and its
receipt. Notices under the Credit Documents to the Banks shall be addressed to their respective addresses, telecopier or telephone
numbers set forth on the signature pages hereof or in the assignment agreement which any assignee bank executes pursuant to
Section 11.12 hereof, and to the Borrower and to the Agent to: 

-51- 

	  	
If to the Borrower:

Transport Corporation of America, Inc.

1715 Yankee Doodle Road

Eagan, Minnesota 55121

Attention:     CFO

Telecopy:      651-686-2562

Telephone:    651-686-2558

If to the Agent:

LaSalle Bank National Association

135 South LaSalle Street, Suite 1425

Chicago, Illinois 60603

Attention:     Renee Marion

Telecopy:      (312) 904-4448

Telephone:    (312) 904-9004

With a copy to:

LaSalle Bank National Association

135 South LaSalle Street

Chicago, Illinois 60674-9135

Attention:     Mr. David J. Thomas

Telecopy:      (312) 904-2903

Telephone:    (312) 904-2506 

        Each such notice, request or
other communication shall be effective (i) if given by telecopier, when such telecopy is transmitted to the telecopier number
specified in this Section 11.8 or on the signature pages hereof and a confirmation of receipt of such telecopy has been
received by the sender, (ii) if given by courier, when delivered, (iii) if given by mail, three business days after
such communication is deposited in the mail, registered with return receipt requested, addressed as aforesaid or (iv) if given
by any other means, when delivered at the addresses specified in this Section 11.8; provided that any notice given
pursuant to Section Two hereof shall be effective only upon receipt. 

        Section 11.9.   Counterparts.   This
Agreement may be executed in any number of counterpart signature pages, and by the different parties on different counterparts, each
of which when executed shall be deemed an original but all such counterparts taken together shall constitute one and the same
instrument. 

        Section 11.10.   Successors
and Assigns.   This Agreement shall be binding upon the Borrower and its successors and assigns, and shall inure
to the benefit of each of the Banks and the benefit of their respective successors and assigns, including any subsequent holder of
any Note. The Borrower may not assign any of its rights or obligations under any Credit Document without the written consent of all
of the Banks. 

-52- 

        Section 11.11.   Participants.   Each
Bank shall have the right at its own cost to grant participations (to be evidenced by one or more agreements or certificates of
participation) in the Loans made, Commitments held and/or participations in Letters of Credit, by such Bank at any time and from
time to time; provided that (i) no such participation shall relieve any Bank of any of its obligations under this Agreement,
(ii) no such participant shall have any rights under this Agreement except as provided in this Section 11.11, and (iii) the
Agent shall have no obligation or responsibility to such participant or assignee. Any party to which such a participation has been
granted shall have the benefits of Section 2.12 and Section 9.3, but shall not be entitled to receive any greater payment
under either such Section than the Bank granting such participation would have been entitled to receive in connection with the
rights transferred. Any agreement pursuant to which any Bank may grant such a participating interest shall provide that such Bank
shall retain the sole right and responsibility to enforce the obligations of the Borrower hereunder, including, without limitation,
the right to approve any amendment, modification or waiver of any provision of this Agreement; provided that such
participation agreement may provide that such Bank will not agree to any modification, amendment or waiver of this Agreement that
would (A) increase any Commitment of such Bank if such increase would also increase the participant’s obligations, (B)
forgive any amount of or postpone the date for payment of any principal of or interest on any Loan or of any fee payable hereunder
in which such participant has an interest or (C) reduce the stated rate at which interest or fees in which such participant has an
interest accrue hereunder. 

        Section 11.12.   Assignment
of Commitments by Banks.   (a)   Each Bank shall have the right at any time, with the written
consent of the Borrower (except Borrower’s consent is not required during the occurrence and continuance of a Default or an
Event of Default) and Agent and Issuing Agent and Swingline Bank (which consent shall not be unreasonably withheld), to assign all
or any part of its Commitment (including the same percentage of its Note, outstanding Loans and participations in Letter of Credit)
to one or more other Persons; provided that such assignment shall be evidenced by an Assignment and Acceptance Agreement and
shall be in an amount of at least $5,000,000 or the entire Commitment of such Bank, and if such assignment is not for such
Bank’s entire Commitment then such Bank’s Commitment after giving effect to such assignment shall not be less than
$5,000,000; and provided further that neither the consent of the Borrower nor of the Agent shall be required for any Bank to
assign all or part of its Commitment to any affiliate of the assigning Bank. Each such assignment shall set forth the
assignee’s address for notices to be given under Section 11.8 hereof hereunder and its designated Lending Office pursuant
to Section 9.4 hereof. Upon any such assignment, delivery to the Agent of an executed copy of such assignment agreement and the
forms referred to in Section 11.1 hereof, if applicable, and the payment of a $2,500 recordation fee to the Agent, the assignee
shall become a Bank hereunder, all Loans, participations in Letters of Credit and the Commitment it thereby holds shall be governed
by all the terms and conditions hereof and the Bank granting such assignment shall have its Commitment, and its obligations and
rights in connection therewith, reduced by the amount of such assignment. 

        (b)   Each Bank
shall have the right to assign its rights hereunder and under the Note evidencing its Loans to a federal reserve bank. 

-53- 

        Section 11.13.   Amendments.   Any
provision of the Credit Documents may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by
(a) the Borrower, (b) the Required Banks, and (c) if the rights or duties of the Agent, the Documentation Agent, the
Issuing Agent or the Swingline Bank are affected thereby, the Agent, the Documentation Agent, the Issuing Agent or the Swingline
Bank, as appropriate; provided that: 

		        (i)   no
amendment or waiver pursuant to this Section 11.13 shall (A) increase or extend any Commitment of any Bank without the
consent of such Bank, (B) reduce the interest rate or Applicable Margin or the amount of or postpone any fixed date for payment
of any principal of or interest on any Loan or Reimbursement Obligation or of any fee payable hereunder without the consent of each
Bank, (C) make less restrictive the definition of Borrowing Base without the consent of each Bank or (D) release all or
substantially all of the Collateral without the consent of each Bank (except as otherwise provided for in the Loan Documents); and

		        (ii)   no
amendment or waiver pursuant to this Section 11.13 shall, unless signed by each Bank, change this Section 11.13, or the
definition of Required Banks, or affect the number of Banks required to take any action under the Credit Documents. 

        Section 11.14.   Headings.   Section
headings used in this Agreement are for reference only and shall not affect the construction of this Agreement. 

        Section 11.15.   Legal
Fees, Other Costs and Indemnification.   The Borrower agrees to pay all reasonable costs and expenses of the
Agent and the Documentation Agent in connection with the preparation and negotiation of the Credit Documents, including without
limitation, the reasonable fees and disbursements of Chapman and Cutler LLP, counsel to the Agent, printing costs, courier, telefax,
telephone, publicity, transportation in connection with the preparation and execution of the Credit Documents, and any amendment,
waiver or consent related hereto, whether or not the transactions contemplated herein are consummated. The Borrower further agrees
to indemnify each Bank, the Agent, the Documentation Agent, the Issuing Agent and their respective directors, agents, officers and
employees, against all losses, claims, damages, penalties, judgments, liabilities and expenses (including, without limitation, all
expenses of litigation or preparation therefor, whether or not the indemnified Person is a party thereto) which any of them may
incur or reasonably pay arising out of or relating to any Credit Document or any of the transactions contemplated thereby or the
direct or indirect application or proposed application of the proceeds of any Loan or Letter of Credit, other than those which arise
from the gross negligence or willful misconduct of the party claiming indemnification or arising from claims made by any Bank
against any other Bank acting in any capacity. The Borrower, upon demand by the Agent, the Documentation Agent, the Issuing Agent or
a Bank at any time, shall reimburse the Agent, the Documentation Agent, the Issuing Agent or Bank for any reasonable legal or other
expenses (including allocable fees and expenses of in-house counsel) incurred in connection with investigating or defending against
any of the foregoing except if the same is directly due to the gross negligence or willful misconduct of the party to be
indemnified. 

        Section 11.16.   Entire
Agreement.   The Credit Documents and the Fee Letter constitute the entire understanding of the parties thereto
with respect to the subject matter thereof and any prior 

-54- 

or contemporaneous agreements, whether written or oral, with respect thereto
are superseded thereby. 

        Section 11.17.   Construction.   The
parties hereto acknowledge and agree that neither this Agreement nor the other Credit Documents shall be construed more favorably in
favor of one than the other based upon which party drafted the same, it being acknowledged that all parties hereto contributed
substantially to the negotiation of this Agreement and the other Credit Documents. 

        Section 11.18.   Governing
Law.   This Agreement and the other Credit Documents, and the rights and duties of the parties hereto, shall be
construed and determined in accordance with the internal laws of the State of Illinois. 

        Section 11.19.   SUBMISSION
TO JURISDICTION; WAIVER OF JURY TRIAL.   THE BORROWER HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS AND OF ANY ILLINOIS STATE COURT FOR PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY. THE BORROWER IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE
TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. THE BORROWER AND EACH BANK HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO ANY CREDIT DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY. 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 

-55- 

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

	 	 	 	 	 	 
	 	 	TRANSPORT CORPORATION OF AMERICA, INC.
	

   		

By:  	 	

/s/   Keith R. Klein 	 
	 	

		Name:   Keith R. Klein
Title:     CFO 
	 	 	

LASALLE BANK NATIONAL ASSOCIATION, as Agent
	

   		

By:  	 	

/s/   David J. Thomas 	 
	 	

		Name:   David J. Thomas
Title:     First Vice President 

-1- 

	Banks:	 	 	 	 	 
	 
	Address and Amount of Commitments: 	 	LASALLE BANK NATIONAL ASSOCIATION, in
    its individual capacity as a Bank and as
    Issuing Agent
	 
	Address:		By:  	 	/s/   David J. Thomas 
	 	

	135 South LaSalle Street
Chicago, Illinois 60674-9135
Attention:       David J. Thomas
Telephone:     (312) 904-2506
Telecopy:       (312) 904-2903
Commitment:  $15,000,000 		  	 	Name:   David J. Thomas
Title:     First Vice President 

Lending Offices: 

Base Rate Loans: 

135 South LaSalle Street

Chicago, Illinois 60674-9135

Attention:   Loan Operations

Telephone:   

Telecopy:   

Eurodollar Loans:

135 South LaSalle Street

Chicago, Illinois 60674-9135

Attention:   Loan Operations

Telephone:   

Telecopy:    

-2- 

	 	 	 	 	 	 
	 
	Address and Amount of Commitments: 	 	U.S. BANK, NATIONAL ASSOCIATION (formerly 
    known as Firstar Bank, N. A. and Firstar 
    Bank of Minnesota, National Association), 
    in its individual capacity as a Bank and as 
    Documentation Agent and Swingline Bank 
	 
	Address:		By:  	 	/s/   Karen S. Paris
	 	

	800 Nicollet Mall
Mail Station:   BC-MN-H03P
Minneapolis, Minnesota 55402
Attention:       Karen S. Paris, Senior Vice President
Telephone:     612-303-3822
Telecopy:       612-303-2264
Commitment:  $15,000,000 		  	 	Name:   Karen S. Paris
Title:     Senior Vice President 

Lending Offices: 

Base Rate Loans:

U.S. Bank, National Association

Oshkosh Center

400 City Center

Mail Station:   OS-WI-CCCL

Oshkosh, Wisconsin 54901

Attention:       Loan Operations – Connie Sweeney

Telephone:     920-237-7604

Telecopy:       920-237-7993

Eurodollar Loans:

U.S. Bank, National Association

Oshkosh Center

400 City Center

Mail Station:   OS-WI-CCCL

Oshkosh, Wisconsin 54901

Attention:       Loan Operations – Connie Sweeney

Telephone:     920-237-7604

Telecopy:       920-237-7993  

-3-

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