Document:

Exhibit 10.1

    EXHIBIT
      10.1

      CONFIDENTIAL
        

      

      May
        24,
        2006

      

      

      
        	
                Mr.
                  [***]

                [***]

                [***]

                Sumitomo
                  Corporation

                [***]

                Tokyo
                  104-8610, Japan

              	
                Mr.
                  [***]

                [***]

                [***]

                Sumitomo
                  Corporation of America 

                [***]

                [***]

              

      

      

      Re: Annual
        Purchase Commitment for Cree Products

      

      

      Dear
        Messrs. [***] and [***]:

      

      This
        letter will serve to document the following agreements and understandings
        reached between Sumitomo Corporation ("Sumitomo"), Sumitomo Corporation of
        America (“SCOA”) and Cree, Inc. (“Cree”) in connection with the purchase and
        distribution by Sumitomo and SCOA of LED Products, [***] Products and Wafer
        Products pursuant to the terms of the Amended and Restated Distributorship
        Agreement dated May 25, 2005 between Sumitomo, SCOA and Cree (the
“Distributorship Agreement”):

       

      1. The
        agreements and understandings set forth in this letter agreement ("Letter
        Agreement") will be subject to the terms and conditions of the Distributorship
        Agreement, as modified by this Letter Agreement. Capitalized terms used herein
        without definition shall have the meanings provided in the Distributorship
        Agreement. The term “Agreement” as used in the Distributorship Agreement shall
        refer to the Distributorship Agreement as modified by this Letter Agreement.
        Notwithstanding any language to the contrary in the Distributorship Agreement,
        in the event of a conflict between the terms and conditions of this Letter
        Agreement and those contained in the Distributorship Agreement, the terms
        and
        conditions of this Letter Agreement shall prevail. 

      

      2. Pursuant
        to Section 3.3 of the Distributorship Agreement, the parties have reviewed
        and
        discussed in good faith [***] and agree to extend the term of Distributor’s
        appointment as a distributor of GaN Wafer Products in the Territory
        [***].

       

             
        3.  Pursuant
        to Section 7.2(e) of the Distributorship Agreement, the parties have reviewed
        and discussed in good faith the [***]-month warranty period for LED Products
        provided in the Distributorship Agreement and agree that no change shall
        be made
        at this time to the LED Product warranty period set forth in Section 7.2(d)
        of
        the Distributorship Agreement. 

      

      4. Pursuant
        to Section 8.3(c) of the Distributorship Agreement, the parties have reviewed
        and discussed in good faith the [***] for earning bonuses for FY07 as well
        as
        the bonus rate for FY07. The parties agree that Distributor will be entitled
        to
        a bonus at the [***] of FY07 equal to [***]. Any such bonus is subject to
        the
        provisions in Section 8.3(c) of the Distributorship Agreement. 

      

      5. Pursuant
        to Section 8.7(a) of the Distributorship Agreement, the parties have reviewed
        and discussed in good faith the [***] Reserve percentage for [***] and agree
        that no change shall be made at this time to the [***] percentage set forth
        in
        Section 8.7(a) of the Distributorship Agreement for [***]. 

      

      6. Pursuant
        to Section 9.2 of the Distributorship Agreement, the parties have reached
        agreement on the Annual MPC for FY07. The parties agree that the Distributorship
        Agreement is hereby amended by adding the following provision immediately
        following the first sentence in Section 9.1:

      

      “Subject
        to Sections 9.3 and 9.4 below and Section 7 of the Letter Agreement dated
        May
        24, 2006 between the parties, Distributor shall purchase during FY07 LED
        Products having an aggregate purchase price of at least at $180,000,000 (US)
        (the “Annual MPC” for FY07), of which not less than (a) [***] (US) will be
        purchased in the fiscal quarter of [***] ending [***], (b) [***] (US) will
        be
        purchased in the fiscal quarter of [***] ending [***], (c) [***] (US) will
        be
        purchased in the fiscal quarter of [***] ending [***], and (d) [***] (US)
        will
        be purchased in the fiscal quarter of Manufacturer ending [***]. “ 

      

      7. Notwithstanding
        any language to the contrary in Section 9.1 of the Distributorship Agreement,
        as
        amended by this Letter Agreement, Distributor’s Quarterly MPC for the [***]
        fiscal quarter of [***] will be reduced by the aggregate purchase price of
        Wafer
        Products purchased and shipped pursuant to the Distributorship Agreement
        during
        [***] as provided more fully in this Section 7. At the end of [***] the
        [***]fiscal quarter[***] of [***], Distributor’s Quarterly MPC for the [***]
        fiscal quarter of [***] will be reduced by the aggregate purchase price of
        Wafer
        Products shipped during [***] fiscal quarter, net of any discounts or credit
        memoranda applied toward such purchases. As of the end of business on [***],
        Distributor’s Quarterly MPC for the [***] fiscal quarter of [***] shall be
        reduced by: (i) the aggregate purchase price of Wafer Products shipped between
        [***] and [***] (inclusive of such dates), net of any discounts or credit
        memoranda applied toward such purchases; and (ii) the aggregate purchase
        price
        of Wafer Products confirmed by Manufacturer in a Material Schedule issued
        on or
        before [***] for shipment after [***] but before [***] as provided in Section
        7.1(b) of the Distributorship Agreement, net of any discounts or credit
        memoranda applied toward such purchases. Distributor’s Quarterly MPC for the
        [***] fiscal quarter of [***] will not be reduced for Wafer Products that
        Manufacturer confirms for shipment during the remainder of the [***] fiscal
        quarter in a Material Schedule issued after [***]. Distributor may take all
        such
        reductions in its [***] quarter Quarterly MPC into consideration in calculating
        its Weekly MPC for the [***] quarter as provided in Section 7.3 of the
        Distributorship Agreement. 

      

      8. Notwithstanding
        any language in Section 9.3 of the Distributorship Agreement to the contrary,
        the parties agree that the Inventory Cap for [***] shall be [***]. Further,
        the
        parties agree that the second sentence in Section 9.4 of the Distributorship
        Agreement is hereby amended to read as follows with respect to performance
        of
        the Distributorship Agreement [***]:

      

      “If,
        as a
        result of the above Inventory Cap provisions, Distributor has not purchased
        during any fiscal quarter of [***] an amount of [***] Products equal to at
        least
        [***], then Manufacturer may at its option terminate this Agreement by providing
        Distributor with [***] prior written notice, in which case Distributor shall
        not
        have any further purchase obligations for Products under Section 9.1 hereof
        [***]. If [***] Products ordered by Distributor are not shipped [***], the
        delayed Products or the substitute LED Products, as applicable, will be deemed
        purchased by Distributor [***] solely for the purpose of determining whether
        the
        foregoing minimum amount has been met, provided that shipment of such Products
        is not delayed due to any cause attributable to Distributor.” 

      

      9. The
        parties agree that Addendum
        A
        and
Addendum
        B
        of the
        Distributorship Agreement are hereby amended and restated as set forth more
        fully in the versions of Addendum
        A
        and
Addendum
        B
        attached
        hereto, respectfully. 

      

      10. This
        Letter Agreement sets forth the entire agreement between the parties as to
        the
        subject matter hereof and supersedes any and all prior agreements,
        understanding, arrangements, promises, representations, warranties, and/or
        any
        contracts of any form or nature whatsoever, whether oral or in writing and
        whether explicit or implicit, that may have been entered into prior to the
        execution of this Letter Agreement between the parties, their officers,
        directors, or employees as to the subject matter hereof. None of the parties
        hereto have relied upon any oral representation of the other party(ies).
        Except
        as expressly modified by this Letter Agreement, all other terms and conditions
        of the Distributorship Agreement shall remain unchanged and in full force
        and
        effect.

      

      If
        you
        and SCOA are in agreement with the foregoing, please sign below on behalf
        of
        Sumitomo and arrange for an authorized representative of SCOA to sign on
        its
        behalf. When fully executed, please return a copy of the signed letter to
        [***]
        attention at [***]. When fully executed, this letter will serve as a binding
        agreement between Cree, Sumitomo and SCOA with respect to the matters set
        forth
        above.

      

      
        
          

          [***]
            Confidential treatment requested pursuant to a request for confidential
            treatment filed with the Securities and Exchange Commission. Omitted
            portions
            have been filed separately with the Commission.

          

          
          

        

        
          
          

          
            

          

        

        
          
          

           

          

        

      

      Very
        truly yours,

      

      CREE,
        INC.

      

      

      /s/
        Charles M.
        Swoboda                       
  

      Charles
        M. Swoboda, Chairman of the 

      Board,
        CEO & President

      

      

      ACKNOWLEDGED
        AND AGREED:   

                         

        
          	 SUMITOMO
                  CORPORATION	 	 	  SUMITOMO
                  CORPORATION OF AMERICA
                   

                
	By: [***]	 	 	 By: [***]     
	
                  

                	 	 	
                  

                
	[***]  
[***]
Electronics
                  Division	 	 	[***] 
[***] 
[***]

        

      

           

      
        	 Date: May
                24, 2006	 Date: May
                30, 2006 

      

      

      

      CGS-B505-6A

      

      
        
          
            [***]
              Confidential treatment requested pursuant to a request for confidential
              treatment filed with the Securities and Exchange Commission. Omitted
              portions
              have been filed separately with the Commission.

            

            

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
            
               

          

        

      

      ADDENDUM
        A

      

      Licensed
        Marks

      

      
        	
                 

                Mark

              	
                Registered
                  in US (Priority Country)

              	
                Registration
                  No. 

              	
                Goods

              
	
                CREE

              	
                Yes

              	
                2,440,530
                  (US); 4,471,239 (JP); 0505534 (KR); 980988 (TW); Pending in
                  [***]

              	
                All

              
	
                CREE
                  LOGO

              	
                Yes

              	
                2,452,761
                  (US); 4,484,784 (JP); 0514036 (KR); and 978876 (TW); Pending in
                  [***]

              	
                All

              
	
                CREE
                  LED LIGHT LOGO

              	
                No

              	
                Pending
                  in [***]

              	
                LEDs

              
	
                CI

              	
                No

              	 	
                Wafers

              
	
                GSIC

              	
                Yes
                  

              	
                2,012,686
                  (US)

              	
                LEDs

              
	
                EZBRIGHT

              	
                No

              	
                Pending
                  in [***]

              	
                LEDs

              
	
                EZBRIGHT290

              	
                No

              	 	
                LEDs

              
	
                EZ290

              	
                No

              	 	
                LEDs

              
	
                EZ

              	
                No

              	 	
                LEDs

              
	
                EZ-7

              	
                No

              	 	
                LEDs

              
	
                EZ-8.5

              	
                No

              	 	
                LEDs

              
	
                EZ-12

              	
                No

              	 	
                LEDs

              
	
                EZ-16

              	
                No

              	 	
                LEDs

              
	
                EZ-18

              	
                No

              	 	
                LEDs

              
	
                EZ-21

              	
                No

              	 	
                LEDs

              
	
                EZ-24

              	
                No

              	 	
                LEDs

              
	
                EZR

              	
                No

              	 	
                LEDs

              
	
                EZR260

              	
                No

              	 	
                LEDs

              
	
                EZR-21

              	
                No

              	 	
                LEDs

              
	
                EZR-24

              	
                No

              	 	
                LEDs

              
	
                EZR-27

              	
                No

              	 	
                LEDs

              
	
                EZR-30

              	
                No

              	 	
                LEDs

              
	
                MEGABRIGHT

              	
                Yes

              	
                2,650,523
                  (US); 4,572,117 (JP); 0563873 (KR); 1022690 (TW)

              	
                LEDs

              
	
                MEGABRIGHT
                  MAX

              	
                No

              	 	
                LEDs

              
	
                MEGABRIGHT
                  PLUS

              	
                No

              	 	
                LEDs

              
	
                MB

              	
                No

              	 	
                LEDs

              
	
                MB
                  MAX

              	
                No

              	 	
                LEDs

              
	
                MB
                  PLUS

              	
                No

              	 	
                LEDs

              
	
                RAZERTHIN

              	
                Yes
                  

              	
                2,861,793
                  (US); 0600614 (KR); 1121336 (TW); Pending in [***] 

              	
                LEDs

              
	
                RT230

              	
                No

              	 	
                LEDs

              
	
                RT290

              	
                No

              	 	
                LEDs

              
	
                SUPERBRIGHT

              	
                No

              	 	
                LEDs

              
	
                ULTRABRIGHT

              	
                Yes
                  

              	
                2,860,183
                  (US); 4,797,922 (JP)

              	
                LEDs

              
	
                UB

              	
                No

              	 	
                LEDs

              
	
                ULTRATHIN

              	
                No
                  

              	 	
                LEDs

              
	
                UT

              	
                No

              	
                Pending
                  in [***]

              	
                LEDs

              
	
                UT230

              	
                No

              	
                Pending
                  in [***]

              	
                LEDs

              
	
                XBRIGHT

              	
                Yes

              	
                2,644,422
                  (US); 4,666,211 (JP); 0572312 (KR); 1029877 (TW)

              	
                LEDs

              
	
                XBRIGHT
                  PLUS

              	
                No

              	 	
                LEDs

              

      

      

      
        
          
             

            Distributorship
              Agreement Page
              32

            Amended
              and Restated as of May 25, 2005

            

            [***]
              Confidential treatment requested pursuant to a request for confidential
              treatment filed with the Securities and Exchange Commission. Omitted
              portions
              have been filed separately with the Commission.

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
            
               

          

        

      

      
        	
                XB

              	
                No

              	 	
                LEDs

              
	
                XB500

              	
                No

              	 	
                LEDs

              
	
                XB900

              	
                No

              	 	
                LEDs

              
	
                XB
                  PLUS

              	
                No

              	 	
                LEDs

              
	
                XLAMP

              	
                Yes

              	
                3,014,910
                  (US); 4,810,789 (JP); 0615714 (KR); 04004596 (MY); T04/05899G (SG);
                  01136401 (TW); Pending in [***] 

              	
                LEDs
                  (packaged)

              
	
                XTHIN

              	
                Yes
                  

              	
                2,861,792
                  (US); 4,790,510 (JP); 0600615 (KR); 1121335 (TW)

              	
                LEDs

              
	
                XT

              	
                 

                1  No

              	 	
                LEDs

              
	
                XT-12

              	
                 

                2  No

              	 	
                LEDs

              
	
                XT-16

              	
                 

                3  No

              	 	
                LEDs

              
	
                XT-18

              	
                 

                4  No

              	 	
                LEDs

              
	
                XT-21

              	
                 

                5  No

              	 	
                LEDs

              
	
                XT-24

              	
                 

                6  No

              	 	
                LEDs

              
	
                XT-27

              	
                 

                7  No

              	 	
                LEDs

              

      

      

      

      Key

      
        	
                US
                  = United States

              	
                TW
                  = Taiwan

              
	
                JP
                  = Japan

              	
                CN
                  = China

              
	
                KR
                  = Korea

              	
                MY
                  = Malaysia 

              

      

      [***] 

      

      

      This
        Addendum
        A
        may be
        amended from time to time by Cree in its sole discretion.

      

      

      
        
          
             

            Distributorship
              Agreement Page
              33

            Amended
              and Restated as of May 25, 2005

            

            [***]
              Confidential treatment requested pursuant to a request for confidential
              treatment filed with the Securities and Exchange Commission. Omitted
              portions
              have been filed separately with the Commission.

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
            
               

          

        

      

      ADDENDUM
        B

      

      CREE
        TRADEMARK USAGE GUIDELINES

      

      
        	
                A.
                  

              	
                General
                  Rules for Trademark Use and
                  Presentation

              

      

      

      	1.  	
              Use
                the correct trademark symbol with trademarks. When using a registered
                trademark, the ® symbol should be used adjacent the first prominent
                appearance of the term. Unregistered trademarks should include the
                designation "TM" instead of the ® symbol. Subsequent appearances of a mark
                do not necessarily need to include a trademark
                symbol.

            

      

      	2.  	
              Include
                an attribution statement (which may appear in small but still legible
                print) in any written material (such as advertising copy, brochures,
                etc.)
                on which a Cree trademark appears. For example, the following statement
                would be appropriate:

            

      

      “Cree
        and
        the Cree Logo are registered trademarks of Cree, Inc. in the United States
        and/or other countries.“

      

      	3.  	
              Do
                not vary the spelling, add or delete hyphens (even for normal hyphenation
                at the end of a line of text), make one word two, or use a plural
                form of
                a Cree trademark. 

            

      

      	4.  	
              Trademarks
                should always be used as adjectives (e.g. "Zero Recovery® rectifiers have
                exceptional reverse recovery
                properties.")

            

      

      	5.  	
              Trademarks
                should always be capitalized.

            

      

      	6.  	
              Never
                combine a Cree trademark with your company
                name.

            

      

      	7.  	
              Do
                not use a Cree trademark in a possessive
                form.

            

      

      	8.  	
              Do
                not shorten or make acronyms out of a Cree
                trademark.

            

      

      	9.  	
              On
                materials that include both a Cree trademark and your company name,
                you
                must display your company name more prominently than any Cree trademark.
                You may not use a Cree trademark in such a manner that it appears
                that
                Cree is legally associated with your company, other than the fact
                that
                your company is authorized to sell or distribute Cree
                products.

            

      

      	10.  	
              Do
                not display a Cree trademark in a manner that is illegible or difficult
                to
                read.

            

      

      	11.  	
              Do
                not use a Cree trademark in a manner such that it appears to be associated
                with products of other manufacturers.

            

      

      
        	
                B.
                  

              	
                Presentation
                  of the Cree Logo

              

      

       

      1. The
        Cree
        Logo may refer to Cree or to Cree's products. When using the word "Cree"
        to
        refer to Cree products, the trademark should be used as an adjective, followed
        by the generic name of the product. For example, a brochure may refer to
        "Cree®
Microwave Transistors."

      

      2. Graphic
        Presentation

      

      The
        Cree
        Logo comprises the word “Cree” in stylized lettering followed by a stylized cube
        symbol as shown below:

      

      
        
          
             

            Distributorship
              Agreement Page
              34

            Amended
              and Restated as of May 25, 2005

            

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
            
               

          

        

      

      

      

      The
        lettering in the Cree Logo and the diamond-shaped surface of the stylized
        cube
        are divided into five equal-sized horizontal regions including upper, middle
        and
        lower solid regions, and two horizontally striped regions interposed between
        the
        upper and lower solid regions, respectively, and the middle solid region.
        The
        horizontally striped regions comprise nine equally sized stripes, which
        alternate in color between background and foreground colors. The sides of
        the
        stylized cube are solid in color.

      

      Some
        variation in line width and spacing in the horizontally striped regions is
        permissable where required by the medium, so long as the overall shape and
        impression of the mark is not substantially changed. For example, for
        embroidered items, it may not be possible to stitch nine stripes in the
        horizontally striped regions without making the logo excessively
        large.

       

      Computer
        graphic files and camera-ready artwork of the Cree Logo and other Cree
        trademarks may be obtained from Cree. Do not generate the Cree Logo on your
        own.
        Do not modify any computer files or artwork obtained from Cree without Cree's
        express written consent. 

      

      3.    
        Color Specifications

      

      a.
        The
        following term is used in this specification:

      

      “Cree
        Blue” means blue no. PMS 294.

      

      

      b.    
        The
        Cree
        Logo may be presented only using the following color combinations:

       

      ·  Black
        lettering on a white or light, uniform background.

      ·  White
        lettering on a dark, uniform background.

      ·  Cree
        Blue
        lettering on a white or light, uniform background.

      

      

      4.    
        Spacing
        

       

            
        a.     The
        Cree
        Logo should be surrounded by a region of background color at least as wide
        as
        the lettering height, as shown below:

      

      

      b.   
         The Cree Logo should never be presented such that it could be viewed as a
        compound mark. For example, the Cree Logo should never be shown physically
        touching or adjacent another mark such that the two marks appear to be part
        of
        the same overall trademark.

      

      
        
          
             

            Distributorship
              Agreement Page
              35

            Amended
              and Restated as of May 25, 2005

            

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
            
               

          

        

      

      c.
            With the express written consent of an authorized
        representative of Cree, the spacing recommendations may be relaxed on items
        where the available physical space or graphic resolution is limited, such
        as
        letterhead, business cards and certain promotional items.

      

      

      
        	
                C.
                  

              	
                Presentation
                  of the Cree LED Light Logo

              

      

      

      	1.  	
              The
                Cree LED Light Logo may be used in lieu of the Cree Logo when referring
                to
                products and/or services provided by Cree’s LED business units (i.e., LED
                chips, lighting LEDs, and LED
                backlighting).

            

      

      	2.  	
              Graphic
                Presentation

            

      

      The
        Cree
        LED Light Logo consists of the Cree Logo, as defined above, and the phrase
“LED
        Light” presented directly beneath said logo. The phrase “LED Light” is preceded
        by a straight, horizontal line that is aligned with the left edge of the
        Cree
        Logo and the top edge of the lettering in “LED Light.” The phrase “LED Light” is
        presented in Interstate font, with the letters “LED” and “L”
capitalized.

      

      As
        defined in Section B Part 2 above, some variation in line width and spacing
        in
        the horizontally striped regions of the Cree Logo as contained in the Cree
        LED
        Light Logo is permissable where required by the medium, so long as the overall
        shape and impression of the mark is not substantially changed. The proportions
        of the horizontal line and wording “LED Light” shall be determined by the
        presentation of the Cree Logo.

      

      As
        with
        the Cree Logo and other Cree trademarks, computer graphic files and camera-ready
        artwork of the Cree LED Light Logo may be obtained from Cree. Do not generate
        the Cree LED Light Logo on your own. Do not modify any computer files or
        artwork
        obtained from Cree without Cree's express written consent. 

      

      	3.  	
              Color
                Specifications

            

      

      The
        Cree
        LED Light Logo may be presented only using the following color
        combinations:

      

      	·  	
              Cree
                Blue lettering on a white or light, uniform
                background.

            

      	·  	
              White
                lettering on a dark, uniform background.

            

      	·  	
              Black
                lettering on a white or light, uniform
                background.

            

      

      	4.  	
              Spacing

            

      

      a. The
        Cree
        LED Light Logo should be surrounded by a region of background color at least
        as
        wide as the lettering height, as shown below:

      

      

      

      
        
          
             

            Distributorship
              Agreement Page
              36

            Amended
              and Restated as of May 25, 2005

            

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
            
               

          

        

      

            

      	b.  	
              The
                Cree LED Light Logo should never be presented such that it could
                be viewed
                as a compound mark. For example, the Cree LED Light Logo should never
                be
                shown physically touching or adjacent another mark such that the
                two marks
                appear to be part of the same overall
                trademark.

            

      

        
          c. With
            the
            express written consent of an authorized representative of Cree, the
            spacing
            recommendations may be relaxed on items where the available physical
            space
            or graphic resolution is limited, such as certain promotional
            items.

        

      

    

    
      

      

      D.       
PRESENTATION OF LED
        TRADEMARKS

      

      	1.  	
              Typed
                Form

            

          

            a.    
        As with any Cree trademark, the first letter of an LED trademark (also referred
        to as the first letter of the LED trademark’s prefix) should always be
        capitalized when it appears in text. Likewise, always capitalize the first
        letter of the secondary word in the mark (e.g., MegaBright, XBright, XLamp,
        etc.). There are two exceptions to this rule:

      

      	·  	
              The
                mark EZBRIGHT is presented in text as “EZBrightTM”, with both letters of
                the mark’s prefix and the first letter of the secondary word of the mark
                capitalized.

            

      	·  	
              The
                mark COLORWAVE is presented in text as “ColorwaveTM”, with only the first
                letter of the mark capitalized.

            

       

          b.  With
        the
        exception of the GSIC trademark, do not hyphenate or place a space between
        the
        LED trademark’s prefix and the secondary word of the trademark. (e.g., XBright
        should never be X Bright or X-Bright.) The GSIC trademark should always be
        presented with a raised dot separating the “G” and the “SiC” as
        follows:

      

      G
        .
        SiC®

      

      

      

       
        c. As
        stated
        in Section B, Part 2 above, computer graphic files and camera-ready artwork
        of
        any of the Cree trademarks may be obtained from Cree. You may not generate
        any
        logos on your own or modify any graphic files or artwork provided by Cree
        without Cree’s express written consent.Exhibit 4.1 

		
	[GRAPHIC OMITTED]	

REVOLVING CREDIT
AGREEMENT 

This Revolving Credit Agreement (the
“Agreement”) is made and entered into by and between the undersigned
borrower (the “Borrower)’ and the undersigned bank (the
“Bank”) as of the date set forth on the last page of this Agreement. 

ARTICLE I. LOANS 

1.1 Revolving Credit Loans.
 From time to time prior to   JULY 31, 2007   (the “Maturity Date”)
or the earlier termination hereof, the Borrower may borrow from the Bank for working
capital purposes up to the aggregate principal amount outstanding at any one time of the
lesser of (i) $ 3, 500, 000. 00 (the “Loan Amount”), less letters
of credit issued by the Bank, or (ii) if applicable, the Borrowing Base (defined
below). All revolving loans hereunder will be evidenced by a single promissory note of the
Borrower payable to the order of the Bank in the principal amount of the Loan Amount (the
“Note”). Although the Note will be expressed to be payable in the full Loan
Amount, the Borrower will be obligated to pay only the amounts actually disbursed
hereunder, together with accrued interest on the outstanding balance at the rates and on
the dates specified therein and such other charges provided for herein. In the event that
the principal amount outstanding under the Note exceeds the Borrowing Base at any time,
the Borrower will immediately, without request, prepay an amount sufficient to eliminate
such excess. 

1.2 Borrowing Base.  The
Borrowing Base, if any, will be as set forth in an addendum to this Agreement. 

1.3 Advances After Maturity or In
Excess of Maximum Loan Amount. The Bank shall have no obligation whatsoever, and the
Bank has no present intention, to make any advance after the Maturity Date or which would
cause the principal amount outstanding under this Agreement to exceed the maximum loan
amount or any other limitations on advances stated in this Agreement. Notwithstanding the
foregoing, the Bank may from time to time, in its sole and absolute discretion, agree to
make an advance after the Maturity Date or which would cause the principal amount of
advances outstanding under this Agreement to exceed the maximum loan amount or any of the
other limitations on advances. The Borrower is and shall be and remain unconditionally
liable to the Bank for the amount of all advances, including, without limitation, advances
in excess of the maximum loan amount or any other limitation on advances and advances made
after the Maturity Date. Immediately upon the Bank’s demand, the Borrower shall pay
to the Bank the amount of any advances made after the Maturity Date or in excess of the
maximum loan amount or any other limitation on advances contained in this Agreement,
together with interest on the principal amount of such excess advances, for so long as
such advances are outstanding, at the highest interest rate from time to time in effect
for such advances. Any such advances shall not be deemed an extension of this Agreement
nor an increase in the maximum loan amount available for borrowing under this Agreement. 

1.4 Advances and Paying Procedure.
The Bank is authorized and directed to credit any of the Borrower’s accounts with
the Bank (or to the account the Borrower designates in writing) for all loans made
hereunder, and the Bank is authorized to debit such account or any other account of the
Borrower with the Bank for the amount of any principal, interest or expenses due under the
Note or other amount due hereunder on the due date with respect thereto. If, upon any
request by the Borrower to the Bank to issue a wire transfer, there is an inconsistency
between the name of the recipient of the wire and its identification number as specified
by the Borrower, the Bank may, without liability, transmit the payment via wire based
solely upon the identification number. 

1.5 Closing Fee. The Borrower
will pay the Bank a one-time closing fee of $  n/a   contemporaneously with execution
of this Agreement. This fee is in addition to all other fees, expenses and other amounts
due hereunder. 

1.6 Loan Facility Fee. The
Borrower will pay a loan facility fee equal to: 

	 	
$    n/a        per annum, payable annually in advance; (or) 

	 	
    n/a    % per annum of the Loan Amount, payable annually in advance; (or) 

	 	
    n/a    % per annum
of the difference between the Loan Amount and the actual daily unpaid
principal amount of the Note outstanding from time to time, payable quarterly, in
arrears, on the last business day of each third calendar month, and at maturity; (or) 

	 	
    n/a    
% per annum of the actual daily unpaid principal amount of the Note outstanding from
time to time, payable quarterly, in arrears, on the last business day of each third
calendar month, and at maturity. 

The loan facility fee is payable for
the entire period that this Agreement is in effect, regardless of whether any amounts are
outstanding hereunder at any given time. 

1.7 Expenses and Attorneys’
Fees.  Upon demand, the Borrower will immediately reimburse the Bank and any
participant in the Obligations (defined below) (“Participant”) for all
attorneys’ fees and all other costs, fees and out-of-pocket disbursements incurred by
the Bank or any Participant in connection with the preparation, execution, delivery,
administration, defense and enforcement of this Agreement or any of the other Loan
Documents (defined below), including attorneys’ fees and all other costs and fees (a)
incurred before or after commencement of litigation or at trial, on appeal or in any other
proceeding, (b) incurred in any bankruptcy proceeding and (c) related to any waivers or
amendments with respect thereto (examples of costs and fees include but are not limited to
fees and costs for: filing, perfecting or confirming the priority of the Bank’s lien,
title searches or insurance, appraisals, environmental audits and other reviews related to
the Borrower, any collateral or the loans, if requested by the Bank). The Borrower will
also reimburse the Bank and any Participant for all costs of collection, including all
attorneys’ fees, before and after judgment, and the costs of preservation and/or
liquidation of any collateral. 

1.8 Compensating Balances. The
Borrower will maintain on deposit with the Bank in non-interest bearing accounts average
daily collected balances, in excess of that required to support account activity and other
credit facilities extended to the Borrower by the Bank, an amount at least equal to the
sum of (i) $  n/a   and (ii)   n/a  % of the Loan Amount as computed on a monthly basis. If the Borrower fails to keep and maintain such balances, it will
pay a deficiency fee, payable within five days after receipt of a statement therefore
calculated on the amount by which the Borrower’s average daily balances are less than
the requirements set forth above, computed at a rate equal to the rate set forth in the
Note.

			
	1125A  us bancorp 2001	Page 1 of 6	4f06

1.9 Conditions to Borrowing.
The Bank will not be obligated to make (or continue to make) advances hereunder unless (i)
the Bank has received executed originals of the Note and all other documents or agreements
applicable to the loans described herein, including but not limited to the documents
specified in Article III (collectively with this Agreement the “Loan
Documents”), in form and content satisfactory to the Bank; (ii) if the loan is
secured, the Bank has received confirmation satisfactory to it that the Bank has a
properly perfected security interest, mortgage or lien, with the proper priority; (iii)
the Bank has received certified copies of the Borrower’s governance documents and
certification of entity status satisfactory to the Bank and all other relevant documents;
(iv) the Bank has received a certified copy of a resolution or authorization in form and
content satisfactory to the Bank authorizing the loan and all acts contemplated by this
Agreement and all related documents, and confirmation of proper authorization of all
guaranties and other acts of third parties contemplated hereunder; (v) if required by the
Bank, the Bank has been provided with an Opinion of the Borrower’s counsel in form
and content satisfactory to the Bank confirming the matters outlined in Section 2.2 and
such other matters as the Bank requests; (vi) no default exists under this Agreement or
under any other Loan Documents, or under any other agreements by and between the Borrower
and the Bank; and (vii) all proceedings taken in connection with the transactions
contemplated by this Agreement (including any required environmental assessments), and all
instruments, authorizations and other documents applicable thereto, are satisfactory to
the Bank and its counsel. 

ARTICLE II. WARRANTIES
AND COVENANTS 

While any part of the credit granted
to the Borrower under this Agreement or the other Loan Documents is available or any
obligations under any of the Loan Documents are unpaid or outstanding, the Borrower
continuously warrants and agrees as follows: 

2.1 Accuracy of Information.
To Borrower’s knowledge, all information, certificates or statements given to the
Bank pursuant to this Agreement and the other Loan Documents will be true and complete in
all material respects when given. 

2.2 Organization and Authority;
Litigation. This Agreement and the other Loan Documents are the legal, valid and
binding obligations of the Borrower, enforceable against the Borrower in accordance with
their terms. The execution, delivery and performance of this Agreement and all other Loan
Documents to which the Borrower is a party (i) are within the borrower’s power; (ii)
have been duly authorized by all appropriate entity action; (III) do not require the
approval of any applicable governmental agency; and (iv) will not violate any law,
agreement or restriction by which the Borrower is bound in any material respect. If the
Borrower is not an individual, the Borrower is validly existing and in good standing under
the laws of its state of organization, has all requisite power and authority and possesses
all licenses necessary to conduct its business and own its properties. To Borrower’s
knowledge, there is no litigation or administrative proceeding threatened or pending
against the Borrower which would, if adversely determined, have a material adverse effect
on the Borrower’s financial condition or its property. 

2.3 Existence; Business
Activities; Assets; Change of Control. The Borrower will (i) preserve its existence,
rights and franchises; (ii) not make any material change in the nature or manner of its
business activities; (III) not liquidate, dissolve, acquire another entity or merge or
consolidate with or into another entity or change its form of organization; (iv) not amend
its organizational documents in any manner that may materially conflict with any term or
condition of the Loan Documents; and (v) not sell, lease, transfer or otherwise dispose of
all or substantially all of its assets. Other than the transfer to a trust beneficially
controlled by the transferor, no event shall occur which causes or results in a transfer
of majority ownership of the Borrower while any Obligations are outstanding or while the
Bank has any obligation to provide funding to the Borrower. 

2.4 Use of Proceeds; Margin Stock;
Speculation.  Advances by the Bank hereunder will be used exclusively by the Borrower
for working capital and other regular and valid purposes. Subject to the Bank’s
concessions set forth in a letter from Bank to Borrower dated May 26,2006, a true and
correct copy of which is attached hereto, the Borrower will not, without the prior written
consent of the Bank, redeem, purchase, or retire any of the capital stock or declare or
pay any dividends, or make any other payments or distributions of a similar type or nature
including withdrawal distributions. The Borrower will not use any of the loan proceeds to
purchase or carry “margin” stock (as defined in Regulation U of the Board of
Governors of the Federal Reserve System). No part of any of the proceeds will be used for
speculative investment purposes, including, without limitation, speculating or hedging in
the commodities and/or futures market. 

2.5 Environmental Matters.
 Except as disclosed in a written schedule attached to this Agreement (if no schedule
is attached, there are no exceptions), to Borrower’s knowledge there exists no
uncorrected violation by the Borrower of any applicable federal, state or local laws
(including statutes, regulations, ordinances or other governmental restrictions and
requirements) relating to the discharge of air pollutants, water pollutants or process
wastewater or otherwise relating to the environment or Hazardous Substances as hereinafter
defined, whether such laws currently exist or are enacted in the future (collectively
“Environmental Laws”). The term “Hazardous Substances” will
mean any hazardous or toxic wastes, chemicals or other substances, the generation,
possession or existence of which is prohibited or governed by any Environmental Laws. The
Borrower is not subject to any judgment, decree, order or citation, or a party to (or to
its knowledge threatened with) any litigation or administrative proceeding, which asserts
that the Borrower (i) has violated any Environmental Laws; (ii) is required to clean up,
remove or take remedial or other action with respect to any Hazardous Substances
(collectively “Remedial Action “);or (III) is required to pay all or a portion
of the cost of any Remedial Action, as a potentially responsible party. Except as
disclosed on the Borrower’s environmental questionnaire provided to the Bank, there
are not now, nor to the Borrower’s knowledge after reasonable investigation have
there ever been, any Hazardous Substances (or tanks or other facilities for the storage of
Hazardous Substances) stored, deposited, recycled or disposed of on, under or at any real
estate owned or occupied by the Borrower during the periods that the Borrower owned or
occupied such real estate, which if present on the real estate or in soils or ground
water, could require Remedial Action. To the Borrower’s knowledge, there are no
proposed or pending changes in Environmental Laws which would adversely affect the
Borrower or its business, and there are no conditions existing currently or likely to
exist while the Loan Documents are in effect which would subject the Borrower to Remedial
Action or other liability. The Borrower currently complies with and will continue to
timely comply with all applicable Environmental Laws in all material respects; and will
provide the Bank, immediately upon receipt, copies of any correspondence, notice,
complaint, order or other document from any source asserting or alleging any circumstance
or condition which requires or may require a financial contribution by the Borrower or
Remedial Action or other response by or on the part of the Borrower under Environmental
Laws, or which seeks damages or civil, criminal or punitive penalties from the Borrower
for an alleged violation of Environmental Laws. 

		
	1125A	Page 2 of 6

2.6 Compliance with Laws. To
Borrower’s knowledge, the Borrower has complied with all laws applicable to its
business and its properties, and has all permits, licenses and approvals required by such
laws, copies of which will be provided to the Bank upon request. 

2.7 Restriction on Indebtedness.
 The Borrower will not create, incur, assume or have outstanding any indebtedness for
borrowed money (including capitalized leases) except (i) any indebtedness owing to the
Bank and its affiliates, and (ii) any other indebtedness outstanding on the date hereof,
and shown on the Borrower’s financial statements delivered to the Bank prior to the
date hereof, provided that such other indebtedness will not be increased. 

2.8 Restriction on Liens.  The
Borrower will not create, incur, assume or permit to exist any mortgage, pledge,
encumbrance or other lien or levy upon or security interest in any of the Borrower’s
property now owned or hereafter acquired, except (i) taxes and assessments which are
either not delinquent or which are being contested in good faith with adequate reserves
provided; (ii) easements, restrictions and minor title irregularities which do not, as a
practical matter, have an adverse effect upon the ownership and use of the affected
property; (iii) liens in favor of the Bank and its affiliates; and (iv) other liens
disclosed in writing to the Bank prior to the date hereof. 

2.9 Restriction on Contingent
Liabilities.  The Borrower will not guarantee or become a surety or otherwise
contingently liable for any obligations of others, except pursuant to the deposit and
collection of checks and similar matters in the ordinary course of business. 

2.10 Insurance. The Borrower
will maintain insurance to such extent, covering such risks and with such insurers as is
usual and customary for businesses operating similar properties, and as is satisfactory to
the Bank, including insurance for fire and other risks insured against by extended
coverage, public liability insurance and workers’ compensation insurance; and will
designate the Bank as loss payee with a “Lender’s Loss Payable” endorsement
on any casualty policies and take such other action as the Bank may reasonably request to
ensure that the Bank will receive (subject to no other interests) the insurance proceeds
on the Bank’s collateral. 

2.11 Taxes and Other Liabilities.
 The Borrower will pay and discharge, when due, all of its taxes, assessments and other
material liabilities, except when the payment thereof is being contested in good faith by
appropriate procedures which will avoid foreclosure of liens securing such items, and with
adequate reserves provided therefor. 

2.12 Financial Statements and
Reporting. The financial statements and other information previously provided to the
Bank or provided to the Bank in the future are or will be complete and accurate and
prepared in accordance with generally accepted accounting principles. There has been no
material adverse change in the Borrower’s financial condition since such information
was provided to the Bank. The Borrower will (i) maintain accounting records in accordance
with generally recognized and accepted principles of accounting consistently applied
throughout the accounting periods involved; (ii) provide the Bank with such information
concerning its business affairs and financial condition (including insurance coverage) as
the Bank may request; and (iii) without request, provide the Bank with such specific
financial statements, certifications and/or information as may be set forth in an addendum
to this Agreement. 

2.13 Inspection of Properties and
Records; Fiscal Year.  The Borrower will permit representatives of the Bank to visit
and inspect any of the properties and examine any of the books and records of the Borrower
at any reasonable time and as often as the Bank may reasonably desire. The Borrower will
not change its fiscal year. 

2.14 Financial Status.
Financial Covenants, if any, will be as set forth in an addendum to this Agreement. 

2.15 Paid-In-Full Period.  If
checked here, all revolving loans under this Agreement and the Note must be paid in full
for a period of at least  n/a  consecutive days during each fiscal year. 

ARTICLE III.
COLLATERAL AND GUARANTIES 

3.1 Collateral.  This Agreement
and the Note are secured by any and all security interests, pledges, mortgages/deeds of
trust (except any mortgage/deed of trust expressly limited by its terms to a specific
obligation of Borrower to Bank) or liens now or hereafter in existence granted to the Bank
to secure indebtedness of the Borrower to the Bank, including without limitation as
described in the following documents: 

	 	
Real
Estate Mortgage(s)/Deed(s) of Trust dated   05/26/06           
                 
                 
                  
                  

covering real estate located at       1245 0 St      
Lincoln    Lancaster County    NE 68508                  
                   
                 

                   
                   
                 
                 
                 
                  
                  
                   
                   
                  

	 	
Security
Agreement(s) dated       05/26/06                   
                   
                 
                 
                 
                      

	 	
Possessory
Collateral Pledge Agreement(s) dated ____________________________________________________  

	 	
Other _____________________________________________________________________________________
          
_____________________________________________________________________________________ 

3.2 Guaranties. This Agreement
and the Note are guarantied by each and every guaranty now or hereafter in existence
guarantying the indebtedness of the Borrower to the Bank (except for any guaranty
expressly limited by its terms to a specific separate obligation of Borrower to the Bank)
including, without limitation, the following: ______________________________________________________ 

		
	N/A

	

	

		
	

1125A	Page 3 of 6

        3.3
Credit Balances; Setoff. As additional security for the payment of the obligations
described in this Note or any document securing or related to the loan evidenced by this
Note (collectively the “Loan Documents’) and any other obligations of the
Borrower to the Bank of any nature whatsoever (collectively the
“Obligations)', the Borrower hereby grants to the Bank a security interest in,
a lien on and an express contractual right to set off against all depository account
balances, cash and any other property of the Borrower now or hereafter in the possession
of the Bank and the right to refuse to allow withdrawals from any account (collectively
“Setoff”). The Bank may, at any time upon the occurrence of a default
hereunder and after expiration of any applicable cure period, Setoff against the
Obligations whether or not the Obligations (including future installments) are then due or
have been accelerated, all without any advance or contemporaneous notice or demand of any
kind to the Borrower, such notice and demand being expressly waived. 

The omission of any reference to an
agreement in Sections 3.1 and 3.2 above will not affect the validity or enforceability
thereof. The rights and remedies of the Bank outlined in this Agreement and the documents
identified above are intended to be cumulative. 

ARTICLE IV. DEFAULTS 

        4.1
Defaults. Notwithstanding any cure periods described below, the Borrower will
immediately notify the Bank in writing when the Borrower obtains knowledge of the
occurrence of any default specified below. Regardless of whether the Borrower has
given the required notice, the occurrence of one or more of the following will constitute
a default: 

	      (a) 	Nonpayment. The
Borrower shall fail to pay (i) any interest due on this                     Note or any
fees, charges, costs or expenses under the Loan Documents when due;
                    or (ii) any principal amount of this Note when due, except principal
amount due                     at maturity, and such nonpayment shall remain unremedied
for a period of ten                     (10) days.  

	      (b) 	Nonperformance.
The Borrower or any guarantor of Borrower’s                     Obligations to
the Bank (“Guarantor”) shall fail to perform or
                    observe any agreement, term, provision, condition, or covenant (other
than a                     default occurring under (a), (c), (d), (e), (f) or (g) of this
Section 4.1)                     required to be performed or observed by the Borrower or
any Guarantor hereunder                     or under any other Loan Document or other
agreement with or in favor of the                     Bank.  

	      (c) 	Misrepresentation. Any
financial information, statement, certificate,                     representation or
warranty given to the Bank by the Borrower or any Guarantor                     (or any
of their representatives) in connection with entering into this
                    Agreement or the other Loan Documents and/or any borrowing
thereunder, or                     required to be furnished under the terms thereof,
shall prove untrue or                     misleading in any material respect (as
determined by the Bank in the exercise of                     its judgment) as of the
time when given.  

	      (d)	Default
on Other Obligations. The Borrower or any Guarantor shall be in
                    default under the terms of any loan agreement, promissory note,
lease,                     conditional sale contract or other agreement, document or
instrument evidencing,                     governing or securing any indebtedness owing
by the Borrower or any Guarantor to                     the Bank or any indebtedness in
excess of $100,000 owing by the Borrower to any                     third party, and the
period of grace, if any, to cure said default shall have                     passed.  

	      (e)	Judgments. Any
judgment shall be obtained against the Borrower or any                     Guarantor
which, together with all other outstanding unsatisfied judgments
                    against the Borrower (or such Guarantor), shall exceed the sum of
$100,000 and                     shall remain unvacated, unbonded or unstayed for a
period of 30 days following                     the date of entry thereof.  

	      (f)	Inability
to Perform; Bankruptcy/Insolvency. (i) The Borrower or any
                    Guarantor shall die or cease to exist; or (ii) any Guarantor shall
attempt to                     revoke any guaranty of the Obligations described herein,
or any guaranty becomes                     unenforceable in whole or in part for any
reason; or (iii) any bankruptcy,                     insolvency or receivership
proceedings, or an assignment for the benefit of                     creditors, shall be
commenced under any Federal or state law by or against the                     Borrower
or any Guarantor; or (iv) the Borrower or any Guarantor shall become
                    the subject of any out-of-court settlement with its creditors; or (v)
the                     Borrower or any Guarantor is unable or admits in writing its
inability to pay                     its debts as they mature; or (vi) if the Borrower is
a limited liability                     company, any member thereof shall withdraw or
otherwise become disassociated                     from the Borrower.  

	      (g) 	Adverse
Change; Insecurity. (i) There is a material adverse change in the
                    business, properties, financial condition or affairs of the Borrower
or any                     Guarantor, or in any collateral securing the Obligations; or
(ii) the Bank in                     good faith deems itself insecure.  

4.2 Termination of Loans;
Additional Bank Rights. Upon the Maturity Date or the occurrence of any of the events
identified in Section 4.1, the Bank may at any time (subject to any notice requirements or
grace/cure periods and the Bank’s right to cease making additional advances to
Borrower, all pursuant to section 5.2 below) (i) immediately terminate its obligation, if
any, to make additional loans to the Borrower; (ii) Setoff; and/or (iii) take such other
steps to protect or preserve the Bank’s interest in any collateral, including without
limitation, notifying account debtors to make payments directly to the Bank, advancing
funds to protect any collateral and insuring collateral at the Borrower’s expense;
all without demand or notice of any kind, all of which are hereby waived. 

4.3 Acceleration of
Obligations. Upon the Maturity Date or the occurrence of any of the events identified
in Sections 4.1(a) through 4.1(e) and 4.1(g), and the passage of any applicable cure
periods, the Bank may at any time thereafter, by written notice to the Borrower, declare
the unpaid principal balance of any Obligations, together with the interest accrued
thereon and other amounts accrued hereunder and under the other Loan Documents, to be
immediately due and payable; and the unpaid balance will thereupon be due and payable, all
without presentation, demand, protest or further notice of any kind, all of which are
hereby waived, and notwithstanding anything to the contrary contained herein or in any of
the other Loan Documents. Upon the occurrence of any event under Section 4.1(f), the
unpaid principal balance of any Obligations, together with all interest accrued thereon
and other amounts accrued hereunder and under the other Loan Documents, will thereupon be
immediately due and payable, all without presentation, demand, protest or notice of any
kind, all of which are hereby waived, and notwithstanding anything to the contrary
contained herein or in any of the other Loan Documents. Nothing contained in Section
4.1, Section 4.2 or this section will limit the Bank’s right to Setoff as provided in
Section 3.3 or otherwise in this Agreement. 

		
	
1125A	Page 4 of 6

4.4 Other Remedies. Nothing in
this Article IV is intended to restrict the Bank’s rights under any of the Loan
Documents or at law, and the Bank may exercise all such rights and remedies as and when
they are available. 

ARTICLE V. OTHER TERMS 

5.1 Additional Terms;
Addendum/Supplements. The warranties, covenants, conditions and other terms described
in this Section and/or in the Addendum and/or other attached document(s) referenced in
this Section are incorporated into this Agreement: 

		
	            ADDENDUM TO AGREEMENT

	

	

	

5.2 Notice/Cure Period. In the
event default shall be made by the Borrower in the due observance or performance of any
covenant, condition or agreement contained herein (other than those specified in section
2.10, 2.11, 4.1(a), 4.1(c) and 4.1(f) above), the Borrower shall have a period of thirty
(30) days following the earlier to occur of (i) Borrower’s actual knowledge of such
default or (ii) written notice provided by the Bank to Borrower which shall specify the
claimed default and shall be provided in accordance with section 6.7 below in which to
cure such default. During such cure period, the Bank shall have the right to cease making
additional advances to Borrower pursuant to the Note. 

ARTICLE VI.
MISCELLANEOUS 

6.1 Delay; Cumulative
Remedies. No delay on the part of the Bank in exercising any right, power or privilege
hereunder or under any of the other Loan Documents will operate as a waiver thereof, nor
will any single or partial exercise of any right, power or privilege hereunder preclude
other or further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein specified are cumulative and are not exclusive of any
rights or remedies which the Bank would otherwise have. 

6.2 Relationship to Other
Documents.  The warranties, covenants and other obligations of the Borrower (and the
rights and remedies of the Bank) that are outlined in this Agreement and the other Loan
Documents are intended to supplement each other. In the event of any inconsistencies in
any of the terms in the Loan Documents, all terms will be cumulative so as to give the
Bank the most favorable rights set forth in the conflicting documents, except that if
there is a direct conflict between any preprinted terms and specifically negotiated terms
(whether included in an addendum or otherwise), the specifically negotiated terms will
control. 

6.3 Successors. The rights,
options, powers and remedies granted in this Agreement and the other Loan Documents shall
be binding upon the Borrower and the Bank and their respective successors and assigns, and
shall inure to the benefit of the Borrower and the Bank and the successors and assigns of
the Bank, including without limitation any purchaser of any or all of the rights and
obligations of the Bank under the Note and the other Loan Documents. The Borrower may not
assign its rights or obligations under this Agreement or any other Loan Documents without
the prior written consent of the Bank. 

6.4 Disclosure. The Bank may,
in connection with any sale or potential sale of all or any interest in the Note and other
Loan Documents, disclose any financial information the Bank may have concerning the
Borrower to any purchaser or potential purchaser. From time to time, the Bank may, in its
discretion and without obligation to the Borrower, any Guarantor or any other third party,
disclose information about the Borrower and this loan to any Guarantor, surety or other
accommodation party. This provision does not obligate the Bank to supply any information
or release the Borrower from its obligation to provide such information, and the Borrower
agrees to keep all Guarantors, sureties or other accommodation parties advised of its
financial condition and other matters which may be relevant to their obligations to the
Bank. 

6.5 Indemnification. Except
for harm arising from the Bank’s willful misconduct, the Borrower hereby indemnifies
and agrees to defend and hold the Bank harmless from any and all losses, costs, damages,
claims and expenses of any kind suffered by or asserted against the Bank relating to
claims by third parties arising out of the financing provided under the Loan Documents or
related to any collateral (including, without limitation, the Borrower’s failure to
perform its obligations relating to Environmental Matters described in Section 2.5 above).
This indemnification and hold harmless provision will survive the termination of the Loan
Documents and the satisfaction of the Obligations due the Bank. 

6.6 Notice of Claims Against Bank;
Limitation of Certain Damages.  In order to allow the Bank to mitigate any damages to
the Borrower from the Bank’s alleged breach of its duties under the Loan Documents or
any other duty, if any, to the Borrower, the Borrower agrees to give the Bank immediate
written notice of any claim or defense it has against the Bank, whether in tort or
contract, relating to any action or inaction by the Bank under the Loan Documents, or the
transactions related thereto, or of any defense to payment of the Obligations for any
reason. The requirement of providing timely notice to the Bank represents the
parties’ agreed-to standard of performance regarding claims against the Bank.
Notwithstanding any claim that the Borrower may have against the Bank, and regardless of
any notice the Borrower may have given the Bank, the Bank will not be liable to
the Borrower for consequential and/or special damages arising therefrom, except those
damages arising from the Bank’s willful misconduct. 

6.7 Notices. Notice of any
record shall be deemed delivered when the record has been (a) deposited in the United
States Mail, postage pre-paid, (b) received by overnight delivery service, (c) received by
telex, (d) received by telecopy, (e) received through the internet, or (f) when personally
delivered. 

6.8 Payments. Payments due
under the Note and other Loan Documents will be made in lawful money of the United States.
All payments may be applied by the Bank to principal, interest and other amounts due under
the Loan Documents in any order which the Bank elects. 

		
	
1125A	Page 5 of 6

6.9 Applicable Law and
Jurisdiction; Interpretation; Joint Liability; Severability  This Agreement and all
other Loan Documents will be governed by and interpreted in accordance with the internal
laws of the State of Nebraska, except to the extent superseded by Federal law. THE
BORROWER HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL
COURT SITUATED IN THE COUNTY OR FEDERAL JURISDICTION OF THE BANK’S BRANCH WHERE THE
LOAN WAS ORIGINATED, AND WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, WITH
REGARD TO ANY ACTIONS, CLAIMS, DISPUTES OR PROCEEDINGS RELATING TO THIS AGREEMENT, THE
NOTE, THE COLLATERAL, ANY OTHER LOAN DOCUMENT, OR ANY TRANSACTIONS ARISING THEREFROM, OR
ENFORCEMENT AND/OR INTERPRETATION OF ANY OF THE FOREGOING. Nothing herein will affect the
Bank’s rights to serve process in any manner permitted by law, or limit the
Bank’s right to bring proceedings against the Borrower in the competent courts of any
other jurisdiction or jurisdictions. This Agreement, the other Loan Documents and any
amendments hereto (regardless of when executed) will be deemed effective and accepted only
upon the Bank’s receipt of the executed originals thereof. If there is more than one
Borrower, the liability of the Borrowers will be joint and several, and the reference to
“Borrower” will be deemed to refer to all Borrowers. Invalidity of any provision
of this Agreement shall not affect the validity of any other provision. 

6.10 Copies; Entire Agreement;
Modification.  The Borrower hereby acknowledges the receipt of a copy of this Agreement
and all other Loan Documents. This Agreement is a “transferable record” as
defined in applicable law relating to electronic transactions. Therefore, the holder of
this Agreement may, on behalf of Borrower, create a microfilm or optical disk or other
electronic image of this Agreement that is an authoritative copy as defined in such law.
The holder of this Agreement may store the authoritative copy of such Agreement in its
electronic form and then destroy the paper original as part of the holder’s normal
business practices. The holder, on its own behalf, may control and transfer such
authoritative copy as permitted by such law. 

IMPORTANT: READ BEFORE SIGNING.
THE TERMS OF THIS AGREEMENT SHOULD BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING,
EXPRESSING CONSIDERATION AND SIGNED BY THE PARTIES ARE ENFORCEABLE. NO OTHER TERMS OR ORAL
PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED. THE TERMS OF THIS
AGREEMENT MAY ONLY BE CHANGED 8Y ANOTHER WRITTEN AGREEMENT. THIS NOTICE SHALL ALSO BE
EFFECTIVE WITH RESPECT TO ALL OTHER CREDIT AGREEMENTS NOW IN EFFECT BETWEEN BORROWER AND
THE BANK. A MODIFICATION OF ANY OTHER CREDIT AGREEMENTS NOW IN EFFECT BETWEEN BORROWER AND
THE BANK, WHICH OCCURS AFTER RECEIPT BY BORROWER OF THIS NOTICE, MAY BE MADE ONLY BY
ANOTHER WRITTEN INSTRUMENT. ORAL OR IMPLIED MODIFICATIONS TO SUCH CREDIT AGREEMENTS ARE
NOT ENFORCEABLE AND SHOULD NOT BE RELIED UPON. 

6.11 Waiver of Jury Trial. TO THE
EXTENT PERMITTED BY LAW, THE BORROWER AND THE BANK HEREBY JOINTLY AND SEVERALLY WAIVE ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING RELATING TO ANY OF THE LOAN
DOCUMENTS, THE OBLIGATIONS THEREUNDER, ANY COLLATERAL SECURING THE OBLIGATIONS, OR ANY
TRANSACTION ARISING THEREFROM OR CONNECTED THERETO. THE BORROWER AND THE BANK EACH
REPRESENTS TO THE OTHER THAT THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY GIVEN. 

6.12 Attachments. All documents
attached hereto, including any appendices, schedules, riders, and exhibits to this
Agreement, are hereby expressly incorporated by reference. 

IN WITNESS WHEREOF, the
undersigned have executed this REVOLVING CREDIT AGREEMENT as of     MAY 26. 2006    . 

		
	(Individual Borrower)	National Research Corporation       
                 
                   
		Borrower Name (Organization)
	
________________________________________	A   Wisconsin Corporation        
                    
              
	
Borrower Name           N/A      
                        
               	By /s/ Patrick E. Beans
                  
                    
                   
		
Name and Title Patrick E. Beans, CFO
                
                
	
________________________________________	By ________________________________________
		
	
Borrower Name           N/A      
                        
               	Name and Title _______________________________
		
U.S. Bank N.A.       
                 
                   
                (Bank)
		
By /s/ Beth Morgan
                   
                  
                  
      
		
Name and Title   Elizabeth A. Morgan, Vice President      

Borrower Address: 1245 Q Street    
Lincoln, NE 68508        

Borrower Telephone No.: _______________________ 

		
	
1125A	Page 6 of 6

[GRAPHIC OMITTED] 

U.S. Bank National
Association 
Main Office
233 South 13th Street
Lincoln, NE 68508  

May 26, 2006 

Patrick E. Beans
Chief Financial
Officer
National Research Corporation
1245 Q Street
Lincoln, NE 68508 

Dear Pat: 

In regard to Section 2.4 of the
Revolving Credit Agreement dated May 26, 2006, we acknowledge that you are currently
authorized by your Board of Directors to purchase up to and including 750,000 shares of
National Research Corporation stock. Only action on additional authorizations will require
prior Bank approval. 

We also acknowledge and have included
in our credit process the payment of dividends to which we acquiesce as long as the
covenants remain in compliance. 

In regard to the third page of the
Addendum to Revolving Credit Agreement and Note, KPMG LLP is a certified public
accounting firm acceptable to the Bank. 

Thank you again for the opportunity
to assist you with this acquisition. 

Best regards,

/s/ Beth Morgan

Beth Morgan
Vice President 

ADDENDUM TO REVOLVING
CREDIT AGREEMENT AND NOTE 

This Addendum is made part of the
Revolving Credit Agreement and Note (the “Agreement”) made and entered into by
and between the undersigned borrower (the “Borrower”) and the undersigned bank
(the “Bank”) as of the date identified below. The warranties, covenants and
other terms described below are hereby added to the Agreement. 

Borrowing Base Provision and
Definitions. This provision replaces in its entirety the section of the Agreement
titled “Borrowing Base”. The Borrowing Base will be an amount equal to (A) the
sum of (i) 75% of the face amount of Eligible Accounts, and (ii) the lesser of $N/A or
N/A% of Borrower’s cost (determined on a lower of cost or market basis or on such
other basis as may be designated by Bank from time to time) of Eligible Inventory, as such
cost may be diminished as a result of any event causing loss or depreciation in value of
Eligible Inventory, but in no event shall this component exceed 75% of the Borrowing Base,
less (B) the sum of (i) the then-current outstanding loan balance on note(s) in the
original amount(s) of $3,500,000.00, and (ii) undrawn amounts of outstanding letters of
credit issued by Bank or any affiliate thereof. Borrower will provide Bank with
information regarding the Borrowing Base in such form and at such times as Bank may
request but not less than 30 days after each month end. Capitalized terms used in this
provision will have the meanings set forth below. Financial terms used herein which are
not specifically defined herein shall have the meanings ascribed to them under generally
accepted accounting principles. 

“Eligible Account”
shall mean an account owing to Borrower which meets all of the following requirements at
the time it comes into existence and continues to meet the same until it is collected in
full: 

	(i) 	Sale
of Goods or Services Rendered. It arose from the performance of           services by
Borrower, or from a bona fide sale or lease of goods on terms in           effect as of
the date of the Agreement as disclosed by Borrower to Bank; which           services have
been fully performed for or which goods have been delivered or           shipped to an
account debtor residing in the United States or a foreign account           debtor
acceptable to Bank and supported by a letter of credit acceptable to           Bank; and
for which Borrower has genuine and complete invoices, shipping           documents or
receipts.  

	(ii) 	Age
and Due Date. It is payable within 60 days of the date of invoice, and           in
each instance is not more than 90 days past due.  

	(iii) 	Ownership.
It is owned and assignable by Borrower free of all claims,           encumbrances and
security interests (except Bank’s paramount security           interest).  

	(iv) 	No
Defenses; Exclusions. It is enforceable by Borrower and Bank against           the
account debtor for the amount shown as owing in the statements furnished by
          Borrower to Bank; it and the transaction out of which it arose comply with all
          applicable laws and regulations; it is not subject to any setoff, retainage,
          contra, counterclaim, credit allowance or adjustment except discount for prompt
          payment, nor has the account debtor returned the goods or disputed liability;
it           does not include any service charges; and it did not arise from a
conditional           sale, guaranteed sale, sale on approval, cash sale, cash on
delivery           (“COD”) sale, sale or return or sale on consignment; and it
is           otherwise deemed satisfactory to Bank in its sole discretion.  

	(v) 	Financial
Condition of Account Debtor. Neither Borrower nor Bank has any           notice or
knowledge or anything which might impair the credit standing of the           account
debtor or the prospect of payment of the account, and the account debtor           is
otherwise deemed satisfactory to Bank in its sole discretion.  

	(vi) 	Affiliates.
It is not due from an affiliate of Borrower, including,           without limitation, (a)
a parent entity; (b) a subsidiary entity; (c) an entity           controlled by any
controlling owner of Borrower ((a), (b) and (c) collectively “Affiliates”);
or (d) any officer, director, shareholder,           employee, agent, partner, manager,
member or owner of Borrower or of any           Affiliate.  

	(vii) 	Government
Receivables. If the account debtor is the United States or any           agency or
department thereof, the accounts of such account debtor will have been           assigned
to Bank under the Federal Assignment of Claims Act only if and to the           extent
that Bank has specifically requested such assignment.  

	(viii) 	Receivables
Concentration. “Eligible Accounts” shall not           include that portion
of the account(s) due from any single account debtor which           exceeds 30% of
Borrower’s aggregate accounts.  

	(ix) 	Cross-Age.
If the dollar amount of accounts of an account debtor which           are not Eligible
Accounts under subparagraph (ii) above exceeds _20%_ of the           total dollar amount
due from such account debtor (which percentage limitation           may change from time
to time at Bank’s discretion), all of such account           debtor’s accounts
shall be excluded from Eligible Accounts.  

“Eligible Inventory”
shall mean inventory (as defined under the Uniform Commercial Code in the state where
Bank’s main office is located) of Borrower which meets all of the following
requirements and continues to meet the same until it is sold or otherwise disposed of: 

	(i) 	Ownership.
It is owned and assignable by Borrower free of all claims,           liens, encumbrances
and security interests (except Bank’s paramount           security interest); it is
located in the United States; it is not held by           Borrower nor put in the field
by Borrower as a conditional sale, guaranteed           sale, sale on approval, cash on
delivery (“COD”) sale, sale or return           or sale on consignment.  

	(ii) 	Condition.
It is undamaged, free of defects and in good condition; it has           not materially
declined in value; it is not obsolete; its production has not           been
discontinued; it is not work-in-process; it is of an age, type and quantity
          acceptable to Bank; and, in the case of goods held for sale, it is new and
          unused (except as Bank may otherwise consent in writing); and it is otherwise
          deemed satisfactory to Bank in its sole discretion.  

Financial Covenants. Financial
terms used herein which are not specifically defined herein shall have the meanings
ascribed to them under generally accepted accounting principles. For any Borrower who does
not have a separate fiscal year end for tax reporting purposes, the fiscal year will be
deemed to be the calendar year. Borrower (herein referred to as the “Subject
Party”) will maintain the following: 

Fixed Charge Coverage Ratio as
of the end of each quarter for the four (4) fiscal quarters then ended of at least 1.30 to
1. 

“Fixed Charge Coverage
Ratio” shall mean (a) EBITDAR minus cash taxes, cash dividends and Maintenance
Capital Expenditures divided by (b) the sum of all required principal payments (on short
and long term debt and capital leases), interest and rental or lease expense. 

“EBITDAR” shall mean
net income, plus interest expense, plus income tax expense, plus depreciation expense plus
amortization expense plus rent or lease expense. 

“Maintenance Capital
Expenditures” shall mean the dollar amount of Capital Expenditures that are
necessary to maintain the current level of revenues. For the purposes of the covenant
calculation, at no time shall the amount of the Capital Expenditures used be less than
$2,000,000.00 per fiscal year, prorated evenly for the measurement periods required above. 

“Capital
Expenditures” shall mean the aggregate amount of all purchases or acquisitions of
fixed assets, including real estate, motor vehicles, equipment, fixtures, leases and any
other items that would be capitalized on the books of the Subject Party under generally
accepted accounting principles. The term “Capital Expenditures” will not include
expenditures or charges for the usual and customary maintenance, repair and retooling of
any fixed asset or the acquisition of new tooling in the ordinary course of business. 

Senior Funded Debt to EBITDA
Ratio as of the end of each quarter for the four (4) fiscal quarters then ended of not
more than 2.50 to 1. 

“Senior Funded Debt to EDITDA
Ratio” shall mean the ratio of Senior Funded Debt to EBITDA. 

“Senior Funded Debt” shall
mean indebtedness for borrowed money, for the deferred purchase price of property not
purchased on ordinary trade terms, for capitalized leases and for other liabilities
evidenced by promissory notes or other instruments, but not including any indebtedness
that has been subordinated to the indebtedness evidenced by the Note pursuant to a writing
that has been accepted by Bank. 

“EBITDA” shall mean
net income, plus interest expense, plus income tax expense, plus depreciation expense plus
amortization expense. 

Financial Information and
Reporting. This provision replaces in its entirety the provision of the Agreement
titled “Financial Information and Reporting”. Financial terms used herein which
are not specifically defined herein shall have the meanings ascribed to them under
generally accepted accounting principles. For any Borrower who does not have a separate
fiscal year end for tax reporting purposes, the fiscal year will be deemed to be the
calendar year. The financial statements and other information previously provided to Bank
or provided to Bank in the future are or will be complete and accurate and prepared in
accordance with generally accepted accounting principles. There has been no material
adverse change in Borrower’s financial condition since such information was provided
to Bank. Borrower will (i) maintain accounting records in accordance with generally
recognized and accepted principles of accounting consistently applied throughout the
accounting periods involved; (ii) provide Bank with such information concerning its
business affairs and financial condition (including insurance coverage) as Bank may
request; and (iii) without request, provide to Bank the following financial information,
in form and content acceptable to Bank, pertaining to Borrower: 

Annual Financial Statements:
Not later than 120 days after the end of each fiscal year, annual financial statements,
audited by a certified public accounting firm acceptable to Bank, as identified in Beth
Morgan’s letter to Patrick E. Beans dated May 26, 2006. 

Interim Financial Statements:
Not later than 60 days after the end of each fiscal quarter, interim financial statements,
reviewed by a certified public accounting firm acceptable to Bank, as identified in Beth
Morgan’s letter to Patrick E. Beans dated May 26, 2006. 

Dated as of May 26, 2006 

		
	(Individual)	(Non-Individual)
	
_____________________________________	National Research Corporation
	Borrower Name N/A	a/an Wisconsin Corporation
	
_____________________________________	By:/s/ Patrick E. Beans
                 
                  
                  
	Borrower Name N/A	Name and Title Patrick E. Beans, CFO
		
By:______________________________________
		Name and Title
		
Agreed to:
		U.S. BANK N.A.
		
By:/s/ Beth Morgan
                  
                  
                   
		Name and Title Elizabeth A. Morgan, Vice President

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