Document:

Amended and Restated Credit Agreement

 Exhibit 10.39 
  
 AMENDED AND RESTATED CREDIT AGREEMENT

  
 between 
  
 SRI/SURGICAL EXPRESS, INC. 
  
 “Borrower” 
  
 and 
  
 WACHOVIA BANK, NATIONAL ASSOCIATION 
  
 “Bank” 
  
 Dated: December 19, 2003 

 TABLE OF CONTENTS 
  

							
	 	 	 	 	 	  	Page

	 1.
	 	 Definitions
	  	1
	 	 	 1.1.
	 	 Defined Terms
	  	1
	 	 	 1.2.
	 	 Financial Terms
	  	6
			
	 2.
	 	 The Letter of Credit Facility
	  	6
	 	 	 2.1.
	 	 Letter of Credit
	  	6
	 	 	 2.2.
	 	 Reimbursement and Other Payments
	  	6
	 	 	 2.3.
	 	 Tender Advances
	  	6
	 	 	 2.4.
	 	 Letter of Credit Commission and Fees
	  	7
	 	 	 2.5.
	 	 Overdue Amounts; Lay Payment Fees
	  	8
	 	 	 2.6.
	 	 Computation
	  	8
	 	 	 2.7.
	 	 Payment Procedure
	  	8
	 	 	 2.8.
	 	 Business Days
	  	8
	 	 	 2.9.
	 	 Extension of Stated Expiration Date
	  	8
	 	 	 2.10.
	 	 Statement of Account
	  	8
	 	 	 2.11.
	 	 Increased Costs; Reduced Returns
	  	8
	 	 	 2.12.
	 	 Obligations Absolute
	  	9
			
	 3.
	 	 Conditions Precedent to Issuance; Disbursement of Bond Proceeds; Change of Interest Rate Modes
	  	10
	 	 	 3.1.
	 	 Conditions Precedent to Issuance
	  	10
	 	 	 3.2.
	 	 Conditions Precedent to Each Tender Advance
	  	10
	 	 	 	 	 (a)    No Default
	  	10
	 	 	 	 	 (b)    Correctness of Representations
	  	10
	 	 	 	 	 (c)    No Adverse Change
	  	11
	 	 	 	 	 (d)    Further Assurances
	  	11
	 	 	 3.3.
	 	 Changes in Interest Rate Modes
	  	11
			
	 4.
	 	 Representations and Warranties
	  	11
	 	 	 4.1.
	 	 Valid Existence and Power
	  	11
	 	 	 4.2.
	 	 Authority
	  	11
	 	 	 4.3.
	 	 Financial Condition
	  	11
	 	 	 4.4.
	 	 Litigation
	  	12
	 	 	 4.5.
	 	 Agreements, Etc.
	  	12
	 	 	 4.6.
	 	 Authorizations
	  	12
	 	 	 4.7.
	 	 Title
	  	12
	 	 	 4.8.
	 	 Taxes
	  	12
	 	 	 4.9.
	 	 Labor Law Matters
	  	13
	 	 	 4.10.
	 	 Judgment Liens
	  	13
	 	 	 4.11.
	 	 Subsidiaries
	  	13
	 	 	 4.12.
	 	 Environmental
	  	13
	 	 	 4.13.
	 	 ERISA
	  	13
	 	 	 4.14.
	 	 Investment Company Act
	  	13
	 	 	 4.15.
	 	 Names
	  	13

  

 -i- 

							
	 	 	4.16.	 	 Intellectual Property
	  	13
	 	 	4.17.	 	 Insider
	  	14
	 	 	4.18.	 	 Compliance with Covenants; No Default
	  	14
	 	 	4.19.	 	 Full Disclosure
	  	14
			
	 5.
	 	 Affirmative Covenants of Borrower
	  	14
	 	 	5.1.	 	 Incorporation of Affirmative Covenants
	  	14
	 	 	5.2.	 	 Partial Redemption Payments
	  	14
			
	 6.
	 	 Negative Covenants of Borrower
	  	15
	 	 	6.1.	 	 Incorporation of Negative and Other Covenants
	  	15
			
	 7.
	 	 [RESERVED]
	  	15
			
	 8.
	 	 Default
	  	15
	 	 	8.1.	 	 Events of Default
	  	15
	 	 	8.2.	 	 Remedies
	  	16
	 	 	8.3.	 	 Receiver
	  	17
	 	 	8.4.	 	 Deposits; Insurance
	  	17
			
	 9.
	 	 [RESERVED]
	  	17
			
	 10.
	 	 Miscellaneous
	  	17
	 	 	10.1.	 	 No Waiver, Remedies Cumulative
	  	17
	 	 	10.2.	 	 Survival of Representations
	  	18
	 	 	10.3.	 	 Indemnification
	  	18
	 	 	10.4.	 	 Transfer of Letter of Credit
	  	18
	 	 	10.5.	 	 Reduction of Letter of Credit
	  	18
	 	 	10.6.	 	 Liability of the Bank
	  	18
	 	 	10.7.	 	 Notices
	  	19
	 	 	10.8.	 	 Governing Law
	  	20
	 	 	10.9.	 	 Successors and Assigns
	  	20
	 	 	10.10.	 	 Counterparts
	  	20
	 	 	10.11.	 	 No Usury
	  	20
	 	 	10.12.	 	 Powers
	  	20
	 	 	10.13.	 	 Approvals
	  	20
	 	 	10.14.	 	 Binding Arbitration; Preservation of Remedies
	  	20
	 	 	 	 	 (a)    Binding Arbitration
	  	20
	 	 	 	 	 (b)    Special Rules
	  	21
	 	 	 	 	 (c)    Preservation and Limitation of Remedies
	  	21
	 	 	 	 	 (d)    No Punitive Damages
	  	21
	 	 	 	 	 (e)    Waiver of Jury Trial
	  	21
	 	 	10.15.	 	 Participations
	  	21
	 	 	10.16.	 	 Waiver of Certain Defenses
	  	22
	 	 	10.17.	 	 Indirect Means
	  	22

  

 -ii- 

 AMENDED AND RESTATED CREDIT
AGREEMENT 
  
 THIS AGREEMENT (the
“Agreement”), dated as of December 19, 2003, between SRI/SURGICAL EXPRESS, INC. (“Borrower”), and WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association (“Bank”); 
  
 W I T N E S S E T H : 
  
 In consideration of the premises and of the mutual covenants herein contained
and to induce Bank to extend credit to Borrower, the parties agree as follows: 
  
 1. Definitions. 
  
 1.1 Defined Terms. Capitalized terms that are not otherwise defined herein shall have the meanings set forth below. If not so defined below or herein, such capitalized terms shall have the meanings assigned to them in the Indenture.

  
 “Affiliate” of a Person means (a) any Person
directly or indirectly owning 5% or more of the voting stock or rights of such named Person or of which the named Person owns 5% or more of such voting stock or rights; (b) any Person controlling, controlled by or under common control with such
named Person; (c) any officer, director or employee of such named Person or any Affiliate of the named Person; and (d) any family member of the named Person or any Affiliate of such named Person. 
  
 “Arbitration Rules” has the meaning set forth in Section 10.15.

  
 “Assignment and Assumption Agreement” means the
Assignment and Assumption Agreement, dated the date hereof, between WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, a national banking association, not individually, except as expressly stated herein, but solely as the Owner Trustee under the SRI
Realty Trust 1998-1, as assignor and the Borrower, as assignee. 
  
 “Authority” shall mean any governmental authority, central bank or comparable agency charged with the interpretation or administration of any applicable law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof. 
  
 “Bond
Documents” means, collectively, the agreements listed on Exhibit B attached hereto, as the same may be amended, modified or supplemented from time to time in accordance with their respective terms. 
  
 “Bonds” shall mean collectively, (i) Industrial Development Board
of the County of Hamilton, Tennessee Industrial Development Revenue Bonds (Sterile Recoveries, Inc. Project), Taxable Series 1999 issued in original aggregate principal amount of $4,500,000 and (ii) SRI Realty Trust 1998-1 Taxable Variable Rate
Demand Bonds, Series 1999 issued in the original aggregate principal amount of $5,200,000. 

 “Business Day” shall mean any day not a Saturday, Sunday or legal holiday, on which commercial
banks in Tampa, Florida and Charlotte, North Carolina are open for business. 
  
 “Change of Law” shall mean the adoption of any applicable law, rule or regulation, or any change therein, or any change in the interpretation or administration thereof by any Authority. 
  
 “Debt” means all liabilities of a Person as determined under GAAP
and all obligations which such Person has guaranteed or endorsed or is otherwise secondarily or jointly liable for, and shall include, without limitation (a) all obligations for borrowed money or purchased assets, (b) obligations secured by assets
whether or not any personal liability exists, (c) the capitalized amount of any capital or finance lease obligations, (d) the unfunded portion of pension or benefit plans or other similar liabilities, and any operating lease or rental obligations,
whether on or off-balance sheet, (e) obligations as a general partner, (f) contingent obligations pursuant to guaranties, endorsements, letters of credit and other secondary liabilities, and (g) obligations for deposits. 
  
 “Default” or “default” means any of the events specified
in Section 8.1, whether or not any requirement in such Section for the giving of notice or the lapse of time or the happening of any further condition, event or act shall have been satisfied. 
  
 “Default Rate” means the “default rate” of interest per
annum equal to the Prime Rate plus 4% per annum. 
  
 “Disputes” has the meaning set forth in Section 10.15. 
  
 “Environmental Laws” means, collectively the following acts and laws, as amended: the Comprehensive Environmental Response, Compensation and Liability Act of 1980; the Superfund Amendments and
Reauthorization Act of 1986; the Resource Conservation and Recovery Act; the Toxic Substances Act; the Clean Water Act; the Clean Air Act; the Oil Pollution and Hazardous Substances Control Act of 1978; and any other “Superfund” or
“Superlien” law or any other federal, state or local statute, law, ordinance, code, rule, regulation, order or decree relating to, or imposing liability or standards of conduct concerning, any hazardous, toxic or dangerous waste, substance
or material, as now or at any time hereafter in effect. 
  
 “Event of Default” means any event specified as such in Section 8.1 hereof, provided that there shall have been satisfied any requirement in connection with such event for the giving of notice or the lapse of time, or both.

  
 “GAAP” means generally accepted accounting
principles as in effect in the United States from time to time. 
  

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 “Guarantor” means any Person now or hereafter guaranteeing, endorsing or otherwise becoming
liable for any Obligations. 
  
 “Guaranty Agreement”
means any guaranty instrument now or hereafter executed and delivered by any Guarantor to Bank, as it may be modified. 
  
 “Indenture” means (i) Trust Indenture, dated as of February 1, 1999, between The Industrial Development Board of the County of Hamilton,
Tennessee and Wachovia Bank, National Association, as Trustee and (ii) the Trust Indenture, dated as of June 1, 1999 by and between Borrower and the Trustee, both, as amended, modified, supplemented or restated from time to time. 
  
 “Interest Rate Agreement” means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or arrangement designed to protect a Person against fluctuations in interest rates or to hedge such Person’s interest rate
risk exposure, including any swap agreements as defined in 11 U.S.C. §101, as amended. 
  
 “Issuer” means The Industrial Development Board of the County of Hamilton, Tennessee. 
  
 “Lien” means any mortgage, pledge, statutory lien or other lien arising by operation of law, security interest, trust arrangement, security
deed, financing lease, collateral assignment or other encumbrance, conditional sale or title retention agreement, or any other interest in property designed to secure the repayment of Obligations, whether arising by agreement or under any statute or
law or otherwise. 
  
 “Loan Documents” means this
Agreement, each Guaranty Agreement, the Pledge Agreement, any Interest Rate Agreement, all documents listed on the Assignment and Assumption Agreement, and all other documents and instruments now or hereafter evidencing, describing, guaranteeing or
securing the Obligations contemplated hereby or delivered in connection herewith, as they may be modified. 
  
 “Material Adverse Effect” means any (i) material adverse effect upon the validity, performance or enforceability of any of the Loan Documents or
the Bond Documents or any of the transactions contemplated hereby or thereby, (ii) material adverse effect upon the properties, business, prospects or condition (financial or otherwise) of Borrower, any Subsidiary and/or any other Person obligated
under any of the Loan Documents or the Bond Documents, or (iii) material adverse effect upon the ability of Borrower, any Subsidiary or any other Person to fulfill any obligation under any of the Loan Documents or the Bond Documents. 
  
 “Obligations” means all obligations now or hereafter owed to Bank
by Borrower, whether related or unrelated to each Letter of Credit and Borrower’s reimbursement obligations hereunder, including, without limitation, amounts owed or to be owed under the terms of the Loan Documents and the Bond Documents, or
arising out of the transactions described therein, including, without limitation, sums advanced to pay overdrafts on any account maintained by 
  

 3 

 Borrower with Bank, reimbursement obligations for other outstanding letters of credit or banker’s acceptances issued
for the account of Borrower or its Subsidiaries, amounts paid by Bank under letters of credit or drafts accepted by Bank for the account of Borrower or its Subsidiaries, together with all interest accruing thereon, all obligations, whether now
existing or hereafter arising, under any Interest Rate Agreement, including any swap agreements as defined in 11 U.S.C. §101, as amended, between Bank and Borrower whenever executed, all fees, all costs of collection, attorneys’ fees and
expenses of or advances by Bank which Bank pays or incurs in discharge of obligations of Borrower, whether such amounts are now due or hereafter become due, direct or indirect and whether such amounts due are from time to time reduced or entirely
extinguished and thereafter re-incurred. 
  
 “Permitted
Debt” means (a) the Obligations; (b) Debt representing hedging liabilities owed to any Bank, if any; (c) Debt payable to suppliers and other trade creditors in the ordinary course of business on ordinary and customary trade terms and which is
not past due; (d) Debt of any Subsidiary to Borrower or another Subsidiary; (e) endorsement of checks for collection in the ordinary course of business; (f) existing Debt incurred solely for the purpose of financing the acquisition or lease of
equipment or real property, provided that such Debt is not for more than the purchase price of such equipment or real property and does not encumber property other than the purchased property; (g) Revolving Credit Agreement; and (h) existing Debt
for Capital Lease (Corporate Office facility Racetrack Road). 
  
 “Permitted Liens” means (a) Liens securing the Obligations; (b) Deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance, social security and similar laws; (c)
attachment, judgment and other similar non-tax Liens arising in connection with court proceedings but only if and for so long as (i) the execution or enforcement of such Liens is and continues to be effectively stayed and bonded on appeal, (ii) the
validity and/or amount of the claims secured thereby are being actively contested in good faith by appropriate legal proceedings and (iii) such Liens do not, in the aggregate, materially detract from the value of the assets of the Person whose
assets are subject to such Lien or materially impair the use thereof in the operation of such Person’s business; (d) Liens securing the Revolving Credit Agreement; and (e) Liens securing Permitted Debt incurred solely for the purpose of
financing the acquisition or lease of equipment or real property, provided that such Lien does not secure more than the purchase price of such equipment or real property and does not encumber property other than the purchased property. 

 
 “Person” means any natural person, corporation, unincorporated
organization, trust, joint-stock company, joint venture, association, company, limited or general partnership, limited liability company, any government or any agency or political subdivision of any government, or any other entity or organization.

  
 “Pledge Agreement” means any Pledge Agreement
relating to the respective Bonds from Borrower to the Bank, as amended, restated or supplemented from time to time. 
  
 “Prime Rate” means that rate announced by Bank from time to time as its prime rate and is one of several interest rate bases used by Bank. Bank
lends at rates both above and below Bank’s Prime Rate, and Borrower acknowledges that Bank’s Prime Rate is not represented or 
  

 4 

 intended to be the lowest or most favorable rate of interest offered by Bank. The rate of Bank’s Prime Rate as that
rate may change from time to time with changes to occur on the date Bank’s Prime Rate changes. 
  
 “Regulated Materials” means any hazardous, toxic or dangerous waste, substance or material, the generation, handling, storage, disposal,
treatment or emission of which is subject to any Environmental Law. 
  
 “Revolving Credit Agreement” means the Amended and Restated Revolving Credit and Security Agreement, dated as of June 26, 2003, as amended and modified on August 7, 2003, by and among the Borrower, Bank and SouthTrust Bank, as
further amended and modified from time to time. 
  
 “Solvent” means, as to any Person, that such Person has capital sufficient to carry on its business and transactions in which it is currently engaged and all business and transactions in which it is about to engage, is able to pay
its debts as they mature, and has assets having a fair valuation greater than its liabilities, at fair valuation. 
  
 “Stated Expiration Date” means (i) February 15, 2004, the expiration date of the Letter of Credit relating to the Industrial Development Board
of the County of Hamilton, Tennessee Industrial Development Revenue Bonds (Sterile Recoveries, Inc. Project), Taxable Series 1999, as such date may be extended pursuant to the terms of Section 2.9 hereof and (ii) February 15, 2004, the expiration
date of the Letter of Credit relating to the SRI Realty Trust 1998-1 Taxable Variable Rate Demand Bonds, Series 1999, as such date may be extended pursuant to the terms of Section 2.9 hereof. 
  
 “Subsidiary” means any corporation, partnership or other entity in
which Borrower, directly or indirectly, owns more than fifty percent (50%) of the stock, capital or income interests, or other beneficial interests, or which is effectively controlled by such Person. 
  
 “Tender Advance” has the meaning assigned to that term in Section
2.3 of this Agreement. 
  
 “Tender Draft” has the
meaning assigned to that term in the Letter of Credit. 
  
 “Termination Date” means the last day a drawing is available under any Letter of Credit. 
  
 “Trustee” means any Person or group of Persons at the time serving as trustee under the Indenture. 
  
 1.2. Financial Terms. All financial terms used herein shall
have the meanings assigned to them under GAAP unless another meaning shall be specified. 
  

 5 

 2. The Letter of Credit Facility. 
  
 2.1. Letter of Credit. Bank agreed to issue and deliver each Letter
of Credit in favor of the Trustee in substantially the form of Exhibit A-1 and A-2 attached hereto. Bank agrees that any and all payments under each Letter of Credit will be made with Bank’s own funds. 
  
 2.2. Reimbursement and Other Payments. Except as otherwise provided in
Section 3.3 below, Borrower shall pay to Bank: 
  
 (a) on or before 3:00 p.m. on the date that any amount is drawn under any Letter of Credit, a sum (together with interest on such sum from the date such amount is drawn until the same is paid, at the rate per annum provided in clause (b) of
this Section 2.2) equal to such amount so drawn under any Letter of Credit; 
  
 (b) on demand, interest on any and all amounts remaining unpaid by Borrower when due hereunder from the date such amounts become due until payment thereof in full, at a fluctuating interest rate per annum equal at all
times to the lesser of the Prime Rate plus two percent (2%) or the highest lawful rate permitted by applicable law, provided, after an Event of Default, interest shall accrue at the Default Rate; 
  
 (c) within 10 days of demand by Bank, any and all reasonable
expenses actually incurred by Bank in enforcing any rights under this Agreement and the other Loan Documents; and 
  
 (d) within 10 days of demand by Bank all charges, commissions, costs and expenses set forth in Sections 2.4, 2.11 and 10.3 hereof.

  
 2.3. Tender Advances. 
  
 (a) If Bank shall make any payment of that portion of the purchase price
corresponding to principal and interest of the Bonds drawn under any Letter of Credit pursuant to a Tender Draft and the conditions set forth in Section 3.3 shall have been fulfilled, such payment shall constitute a tender advance made by Bank to
Borrower on the date and in the amount of such payment (a “Tender Advance”); provided that if the conditions of said Section 3.3 have not been fulfilled, the amount so drawn pursuant to the Tender Draft shall be payable in
accordance with the terms of Section 2.2(a) above. Notwithstanding any other provision hereof, Borrower shall repay the unpaid amount of each Tender Advance, together with all unpaid interest thereon, on the earlier to occur of: (i) such date as any
Bonds purchased pursuant to a Tender Draft are resold as provided in paragraph 2.3(d) hereof; (ii) on the date one year following the date of such Tender Advance; or (iii) the Termination Date. Borrower may prepay the outstanding amount of any
Tender Advance in whole or in part, together with accrued interest to the date of such prepayment on the amount prepaid. 
  
 (b) Borrower shall pay interest on the unpaid amount of each Tender Advance from the date of such Tender Advance until such amount is paid in full,
payable monthly, in arrears, on the first day of each month during the term of each Tender Advance and on the date 
  

 6 

 such amount is paid in full, at a fluctuating interest rate per annum in effect from time to time equal to the Prime
Rate, provided that the unpaid amount of any Tender Advance which is not paid when due shall bear interest at the Default Rate, payable on demand and on the date such amount is paid in full. 
  
 (c) Pursuant to each Pledge Agreement, Borrower has agreed that, in
accordance with the terms of each Indenture, Bonds purchased with proceeds of any Tender Draft shall be delivered by the Tender Agent to Bank or its designee to be held by Bank or its designee in pledge as collateral securing Borrower’s payment
obligations to Bank hereunder. Bonds so delivered to Bank or its designee shall be registered in the name of Borrower, as provided for in Section 3 of the respective Pledge Agreement. 
  
 (d) Prior to or simultaneously with the resale of Pledged Bonds, Borrower shall prepay the then outstanding Tender Advances
(in the order in which they were made) by paying to Bank an amount equal to the sum of (A) the amounts advanced by Bank pursuant to the corresponding Tender Drafts relating to such Bonds, plus (B) the aggregate amount of accrued and unpaid interest
on such Tender Advances. Such payment shall be applied by Bank in reimbursement of such drawings (and as prepayment of Tender Advances resulting from such drawings in the manner described above), and, upon receipt by Bank of a certificate completed
and signed by the Trustee in substantially the form of Annex F to the Letter of Credit, Borrower irrevocably authorizes Bank to rely on such certificate and to reinstate the Letter of Credit in accordance therewith. Funds held by the Tender Agent as
a result of sales of the Pledged Bonds by the Remarketing Agent shall be paid to Bank by the Tender Agent to be applied to the amounts owing by Borrower to Bank pursuant to this paragraph (d). Upon payment to Bank of the amount of such Tender
Advance to be prepaid, together with accrued interest on such Tender Advance to the date of such prepayment on the amount to be prepaid, the principal amount outstanding of Tender Advances shall be reduced by the amount of such prepayment and
interest shall cease to accrue on the amount prepaid. 
  
 (e)
Nothing herein shall affect any of Borrower’s obligations under any Interest Rate Agreement, including Borrower’s obligation to pay breakage fees, if any, as described therein. 
  
 2.4. Letter of Credit Commission and Fees. 
  
 (a) Borrower shall pay to Bank a fee or commission at the rate of 1.25% per annum on the amount available to be drawn under
the Letter of Credit (computed on the date that such commission is payable) from and including the date of issuance of the Letter of Credit until the Termination Date, payable annually in advance on the date of issuance of the Bonds and thereafter
on February 16 of each year commencing February 16, 2004; provided, the unearned portion of such fee shall be subject to rebate by Bank if the Letter of Credit ceases to be outstanding other than as a result of an Event of Default or Default,
payment of the Bonds or any other action of Borrower which causes the Letter of Credit to be terminated. 
  
 (b) Borrower shall pay to Bank, upon transfer of any Letter of Credit in accordance with its terms, a transfer fee of $1,000. 
  

 7 

 2.5. Overdue Amounts; Late Payment Fees. 
  
 (a) Any payments not made as and when due shall bear interest from the date
due until paid at the Default Rate, in Bank’s discretion. 
  
 (b) In addition to the Default Rate, if any payments are not timely made, Borrower shall also pay to Bank a late charge equal to 5% of each payment past due for 15 or more days. Borrower acknowledges that the late charge imposed herein
represents a reasonable estimate of the expenses of Bank incurred because of such lateness. Acceptance by Bank of any late payment without an accompanying late charge shall not be deemed a waiver of Bank’s right to collect such late charge or
to collect a late charge for any subsequent late payment received. 
  
 2.6. Computation. All payments of interest, commission and other charges under this Agreement shall be computed on the per annum basis of a year of 360 days and calculated for the actual number of days elapsed. 
  
 2.7. Payment Procedure. All payments made by Borrower under this
Agreement shall be made to Bank in lawful currency of the United States of America and in immediately available funds at Bank’s office in Tampa, Florida before 2:00 p.m. (Eastern time) on the date when due, except for payments made pursuant to
Section 2.2(a). 
  
 2.8. Business Days. If the date for any
payment hereunder falls on a day which is not a Business Day, then for all purposes of this Agreement and the other Loan Documents, the same shall be deemed to have fallen on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payments of interest or commission, as the case may be. 
  
 2.9. Extension of Stated Expiration Date. Bank may, in its sole and absolute discretion, agree that the Stated Expiration Date may be extended for successive one-year terms which shall terminate on the
anniversary of the then effective expiration date of each Letter of Credit unless it provides written notice at least 90 days prior to the then effective expiration date of its election not to renew. 
  
 2.10. Statement of Account. If Bank provides Borrower with a statement
of account on a periodic basis, such statement will be presumed complete and accurate and will be definitive and binding on Borrower, unless objected to with specificity by Borrower in writing within forty-five (45) days after receipt. 

 
 2.11. Increased Costs; Reduced Returns. 
  
 (a) If after the date hereof, a Change of Law or compliance by Bank with any
request or directive (whether or not having the force of law) of any Authority either: (i) shall subject Bank to any tax, duty or other charge with respect to any Letter of Credit or its obligations hereunder, or shall change the basis of taxation
of payments to Bank of the principal of or interest on any Letter of Credit or its obligations hereunder or any other amounts due under 
  

 8 

 this Agreement or the other Loan Documents in respect of each Letter of Credit or the obligations hereunder (except for
changes in the rate of tax on the overall net income of Bank imposed by the jurisdiction in which Bank’s principal executive office is located); or (ii) shall impose, modify or deem applicable any reserve, special deposit insurance or similar
requirement (including, without limitation, any such requirements imposed by the Board of Governors of the Federal Reserve System) against assets of, deposits with or for the account of, or credit extended by, Bank; or (iii) shall impose on Bank any
other similar condition affecting such Letter of Credit or its obligations hereunder; and the result of any of the foregoing is to increase the cost to Bank of making or maintaining such Letter of Credit or its obligations hereunder, or to reduce
the amount received or receivable by Bank under this Agreement, under such Letter of Credit or hereunder or under the other Loan Documents with respect thereto, by an amount deemed by Bank to be material, then, within fifteen (15) days after demand
by Bank, Borrower shall pay to Bank such additional amount or amounts as will compensate Bank for such increased cost or reduction. 
  
 (b) If Bank shall have determined that after the date hereof the adoption of any applicable law, rule or regulation regarding capital adequacy, or any
change therein, or any change in the interpretation or administration thereof, or compliance by Bank with any request or directive regarding capital adequacy (whether or not having the force of law) of any Authority, has or would have the effect of
reducing the rate of return on Bank’s capital as a consequence of its obligations with respect to such adoption, change or compliance (taking into consideration Bank’s policies with respect to capital adequacy), by an amount deemed by Bank
to be material, then from time to time, within fifteen (15) days after demand by Bank, Borrower shall pay to Bank such additional amount or amounts as will compensate Bank for such reduction. 
  
 (c) Bank will promptly notify Borrower of any event of which it has
knowledge, occurring after the date hereof, which will entitle Bank to compensation pursuant to this Section. A certificate of Bank claiming compensation under this Section and setting forth the additional amount or amounts to be paid to it
hereunder shall be conclusive in the absence of manifest error. In determining such amount, Bank may use any reasonable averaging and attribution methods. 
  
 2.12. Obligations Absolute. The obligations of Borrower under this Agreement shall be absolute, unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement, under all circumstances whatsoever, including, without limitation, the following circumstances: 
  
 (a) any lack of validity or enforceability of any Letter of Credit, the Bonds, any of the other Bond Documents, any of the Loan Documents or any other
agreement or instrument related thereto; 
  
 (b) any amendment or
waiver of or any consent to departure from the terms of any Letter of Credit, the Bonds, any of the other Bond Documents, any of the Loan Documents or any other agreement or instrument related thereto; 
  

 9 

 (c) the existence of any claim, setoff, defense or other right which Borrower may have at any time
against the Trustee, any beneficiary or any transferee of any Letter of Credit (or any Person for whom the Trustee, any such beneficiary or any such transferee may be acting), Bank or any other Person, whether in connection with this Agreement, the
Loan Documents, each Letter of Credit, the Bond Documents or any unrelated transaction; 
  
 (d) any statement, draft or other document presented under each Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect, or any statement therein being untrue or inaccurate in any
respect whatsoever, provided the Company shall be under no obligation to make any payment hereunder resulting from Bank’s gross negligence in accepting any such forged or fraudulent draft or document; or 
  
 (e) the surrender or impairment of any security for the performance or
observance of any of the terms of this Agreement, or any of the other Loan Documents. 
  
 3. Conditions Precedent to Issuance; Disbursement of Bond Proceeds; Change of Interest Rate Modes. 
  
 3.1. Conditions Precedent to Issuance. The Borrower has previously complied with conditions precedent, and Bank has issued its Letters of Credit in
the form attached hereto on Exhibits A-1 and A-2. 
  
 3.2.
Conditions Precedent to Each Tender Advance. Each payment made by Bank under any Letter of Credit pursuant to a Tender Draft shall constitute a Tender Advance hereunder only if on the date of such payment the following
statements shall be true: 
  
 (a) No Default. No Default
or Event of Default then exists or would be caused by the making of such Tender Advance, and Bank shall have received a certificate signed by an authorized officer of Borrower, dated the date of the Tender Advance, to that effect; 
  
 (b) Correctness of Representations. The representations and warranties
contained in Article 4 of this Agreement, the Bond Documents and in the Loan Documents are correct in all material respects on and as of the date of such Tender Advance as though made on and as of such date, and Bank shall have received a
certificate signed by an authorized officer of Borrower, dated the date of the Tender Advance, to that effect; 
  
 (c) No Adverse Change. There shall have been no change which could have a Material Adverse Effect on the condition, financial or otherwise, of
Borrower or any Subsidiary from such condition as it existed on the date of the most recent financial statements of such Person delivered prior to date hereof, and Bank shall have received a certificate signed by an authorized officer of Borrower,
dated the date of the Tender Advance, to that effect; and 
  
 (d)
Further Assurances. Borrower shall have delivered such further documentation or assurances as Bank may reasonably require. Unless Borrower shall have previously advised Bank in writing or Bank has actual knowledge that one or more of the
above statements is no longer true (in which case Borrower shall not be entitled to a Tender Advance), 
  

 10 

 Borrower shall be deemed to have represented and warranted, on the date of payment by Bank under each Letter of Credit
pursuant to a Tender Draft, that on the date of such payment the above statements are true and correct. 
  
 3.3. Changes in Interest Rate Modes. Borrower shall not convert the interest rate mode on the Bonds to a different interest rate mode without the
written consent of Bank, which may be granted or withheld in its sole discretion. 
  
 4. Representations and Warranties. In order to induce Bank to enter into this Agreement, Borrower hereby represents and warrants (all of which shall survive the execution and delivery of the Loan
Documents and all of which shall be deemed made as of the date hereof and as of the date of each Tender Advance), on behalf of it and each of its Subsidiaries, that: 
  
 4.1. Valid Existence and Power. It and each Subsidiary is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization and is duly qualified or licensed to transact business in all places where the failure to be so qualified could reasonably be expected to have a Material Adverse Effect on it; and it
and each other Person which is a party to any Loan Document or Bond Document (other than Bank) has the power to make and perform the Loan Documents and Bond Documents executed by it, and all such instruments will constitute the legal, valid and
binding obligations of such Person, enforceable in accordance with their respective terms, subject only to bankruptcy and similar laws affecting creditors’ rights generally. 
  
 4.2. Authority. The execution, delivery and performance thereof by it and each other Person (other than Bank)
executing any Loan Document or Bond Document have been duly authorized by all necessary action of such Person, and do not and will not violate any provision of law or regulation, or any writ, order or decree of any court or Authority or any
provision of the governing instruments of such Person, and do not and will not, with the passage of time or the giving of notice, result in a breach of, or constitute a default or require any consent under, or result in the creation of any Lien upon
any property or assets of such Person pursuant to, any law, regulation, instrument or agreement to which any such Person is a party or by which any such Person or its respective properties may be subject, bound or affected. 
  
 4.3. Financial Condition. Other than as disclosed in financial
statements delivered on or prior to the date hereof to Bank, neither it nor any Subsidiary nor (to its knowledge) any Guarantor has any direct or contingent obligations or liabilities (including any guarantees or leases) or any unrealized or
anticipated losses from any commitments of such Person which could reasonably be expected to have a Material Adverse Effect; all such financial statements have been prepared in accordance with GAAP and fairly present the financial condition of
Borrower, Subsidiary or Guarantor, as the case may be, as of the date thereof; and it is not aware of any adverse fact (other than facts which are generally available to the public and not particular to it, such as general economic or industry
trends) concerning its financial or business condition or future prospects or any Subsidiary or any Guarantor which could reasonably be expected to have a Material Adverse Effect and which has not been fully disclosed to Bank, including any adverse
change in the operations or financial condition of such Person since the date of the most recent financial statements delivered to Bank; and it is Solvent, and after consummation of the transactions set forth in this Agreement and the other Loan
Documents and Bond Documents, it will be Solvent. 
  

 11 

 4.4. Litigation. There are no suits or proceedings pending, or to its knowledge threatened, before
any court or by or before any governmental or regulatory authority, commission, bureau or agency or public regulatory body against or affecting it, any Subsidiary or (to its knowledge) any Guarantor, or their assets, which if adversely determined
could reasonably be expected to have a Material Adverse Effect. 
  
 4.5. Agreements, Etc. Neither it nor any Subsidiary is a party to any agreement or instrument or subject to any court order, governmental decree or any charter or other corporate restriction, adversely affecting its business, assets,
operations or condition (financial or otherwise), nor is any such Person in default in the performance, observance or fulfillment of any of the material obligations, covenants or conditions contained in any agreement or instrument to which it is a
party, or any law, regulation, decree, order or the like. 
  
 4.6.
Authorizations. All authorizations, consents, approvals and licenses required under applicable law or regulation for the ownership or operation of the property owned or operated by it or any Subsidiary or for the conduct of any business in
which it is engaged have been duly issued and are in full force and effect, and it is not in default, nor has any event occurred which with the passage of time or the giving of notice, or both, would constitute a default, under any of the terms or
provisions of any part thereof, or under any order, decree, ruling, regulation, closing agreement or other decision or instrument of any Authority having jurisdiction over such Person, which default could reasonably be expected to have a Material
Adverse Effect. Except as noted herein, no approval, consent or authorization of, or filing or registration with, any Authority or agency is required with respect to the execution, delivery or performance of any Loan Document or Bond Document.

  
 4.7. Title. It and each Subsidiary has good title to
all of the assets shown in its financial statements free and clear of all Liens, except Permitted Liens. 
  
 4.8. Taxes. It and each Subsidiary have filed all federal and state income and other tax returns which are required to be filed, and have paid all
taxes as shown on said returns and all taxes, including withholding, FICA and ad valorem taxes, shown on all assessments received by it to the extent that such taxes have become due; and neither it nor any Subsidiary is subject to any federal, state
or local tax Liens nor has such Person received any notice of deficiency or other official notice to pay any taxes; and it and each Subsidiary have paid all sales and excise taxes payable by it. 
  
 4.9. Labor Law Matters. No goods or services have been or will be
produced by it or any Subsidiary in violation of any applicable labor laws or regulations or any collective bargaining agreement or other labor agreements or in violation of any minimum wage, wage-and-hour or other similar laws or regulations.

  

 12 

 4.10. Judgment Liens. Neither it nor any Subsidiary, nor any of their assets, are subject to any
unpaid judgments (whether or not stayed) or any judgment liens in any jurisdiction. 
  
 4.11. Subsidiaries. If it has any Subsidiaries, a list has been provided to the Bank in writing. 
  
 4.12. Environmental. Except as disclosed to Bank in writing, and except for ordinary and customary amounts of solvents, cleaners and similar
materials used in the ordinary course of its business and in strict compliance with all Environmental Laws, neither it, nor to its best knowledge any other previous owner or operator of any real property currently owned or operated by it, has
generated, stored or disposed of any Regulated Material on any portion of such property, or transferred any Regulated Material from such property to any other location in violation of any applicable Environmental Laws; no Regulated Material has been
generated, stored or disposed of on any portion of the real property currently owned or operated by Borrower by any other Person, or is now located on such property; and it is in full compliance with all applicable Environmental Laws and it has not
been notified of any action, suit, proceeding or investigation which calls into question compliance by it with any Environmental Laws or which seeks to suspend, revoke or terminate any license, permit or approval necessary for the generation,
handling, storage, treatment or disposal of any Regulated Material. 
  
 4.13. ERISA. Neither it nor any Subsidiary has any unfunded liabilities with respect to any pension, profit-sharing or other benefit plan subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).

  
 4.14. Investment Company Act. Neither it nor any
Subsidiary is an “investment company” as defined in the Investment Company Act of 1940, as amended. 
  
 4.15. Names. It currently conducts all business only under its legal name as set forth above in the introductory section of this Agreement; during
the preceding five (5) years it has not (i) been known as or used any other corporate, fictitious or trade name, (ii) been the surviving entity of a merger or consolidation or (iii) acquired all or substantially all of the assets of any Person.

  
 4.16. Intellectual Property. It and its Subsidiaries
possess all licenses, certificates, franchises, permits and other authorizations from governmental and political subdivisions or regulatory authorities, and all patents, trademarks, service marks, trade names, copyrights, franchises, licenses and
other rights that are necessary for ownership, maintenance and operation of any of their respective material Properties and assets, and neither it nor any of its Subsidiaries is in violation of any thereof, which, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect. Without limiting the generality of the foregoing, and, in any event, Borrower and its Subsidiaries possess all intellectual property rights necessary for the ownership, operation and
development of its (or their) business as conducted, or contemplated to be conducted, by Borrower and such Subsidiaries. 
  

 13 

 4.17. Insider. It is not, and no Person having “control” (as that term is defined in 12
U.S.C. § 375(b)(5) or in regulations promulgated pursuant thereto) of it is, an “executive officer,” “director,” or “principal shareholder” (as those terms are defined in 12 U.S.C. § 375(b) or in regulations
promulgated pursuant thereto) of Bank, of a bank holding company of which Bank is a subsidiary, or of any subsidiary of a bank holding company of which Bank is a subsidiary. 
  
 4.18. Compliance with Covenants; No Default. It is, and upon issuance of the Letter of Credit will be, in compliance
with all of the covenants hereof; and no Default or Event of Default has occurred, and the execution, delivery and performance of the Loan Documents and Bond Documents and the issuance of the Letter of Credit will not cause a Default or Event of
Default. 
  
 4.19. Full Disclosure. There is no material
fact which is known or which should be known by it that it has not disclosed to Bank which could have a Material Adverse Effect; and no Loan Document, nor any agreement, document, certificate or statement delivered by it to Bank, contains any untrue
statement of a material fact or omits to state any material fact which is known or which should be known by it necessary to keep the other statements from being misleading. 
  
 5. Affirmative Covenants of Borrower. Borrower covenants and agrees that from the date hereof and until
payment in full of the Obligations and the formal termination of this Agreement, Borrower and each Subsidiary: 
  
 5.1 Incorporation of Affirmative Covenants. The affirmative covenants of the Revolving Credit Agreement provided in Section 5 (subsections 5.1 to
5.13 inclusive) are incorporated herein by reference. If said Sections are amended, such amendments shall be also be incorporated herein by reference. In the event the Revolving Credit Agreement shall terminate prior to the termination of this
Agreement, the affirmative covenants contained in the Revolving Credit Agreement in existence at the time of such termination shall be incorporated herein verbatim and be effective hereunder. 
  
 5.2 Partial Redemption Payments. The Borrower shall make payments as
set forth in Schedule A-1 of Exhibit C attached hereto and as set forth in Schedule A-2 of Exhibit D attached hereto into an escrow account established at the Bank (the “Escrow Account”) for the benefit of the Borrower. As security for the
payment and performance of any and all of the Obligations hereunder, the Borrower hereby pledges to Bank and gives Bank a continuing security interest in and general lien upon and right of set-off against, all of its right, title and interest in and
to the Escrow Account. The Bank shall approve any investments of amounts in the Escrow Account. Investment earnings in the Escrow Account shall accrue to the benefit of the Borrower and may be utilized as a setoff against the next payment by
Borrower. The Borrower shall direct the Trustee on or before each date set forth in Schedule A of Exhibit C and Schedule A of Exhibit D (each a “Redemption Date”), to give notice that there will be an optional redemption of a principal
amount set forth in such applicable schedule on such Redemption Date. The Borrower will satisfy the notice requirements under the applicable Indenture by providing a continuing notice in the form attached hereto as Exhibit C or Exhibit D, as
applicable, to the applicable Bond Trustee. 
  

 14 

 6. Negative Covenants of Borrower. Borrower covenants and agrees that from the date hereof
and until payment in full of the Obligations and the formal termination of this Agreement, neither Borrower nor any Subsidiary: 
  
 6.1. Incorporation of Negative and Other Covenants. The negative and other covenants of the Revolving Credit Agreement provided in Sections 6 and 7
(subsections 6.1 to 6.14 inclusive and subsection 7.1) are incorporated herein by reference. If said Sections are amended, such amendments shall be also be incorporated herein by reference. In the event the Revolving Credit Agreement shall terminate
prior to the termination of this Agreement, the negative and other covenants contained in the Revolving Credit Agreement in existence at the time of such termination shall be incorporated herein verbatim and be effective hereunder. . 
  
 7. [RESERVED].  
  
 8. Default. 
  
 8.1. Events of Default. Each of the following shall constitute an
Event of Default: 
  
 (a) There shall occur any default by
Borrower in the payment, when due, of any principal of or interest on the Bonds, any amounts due hereunder or any other Loan Document or Bond Documents, or any other Obligations, including under any Interest Rate Agreement, and such default shall
continue for more than three (3) days; or 
  
 (b) There shall
occur any default by Borrower or any other party to any Loan Document or Bond Document (other than Bank) in the performance of any agreement, covenant or obligation contained in this Agreement or such Loan Document or such Bond Document or in any
Interest Rate Agreement not provided for elsewhere in this Section 8; or 
  
 (c) Any representation or warranty made by Borrower or any other party to any Loan Document or Bond Document (other than Bank) herein or therein or in any certificate or report furnished in connection herewith or
therewith shall prove to have been untrue or incorrect in any material respect when made; or 
  
 (d) Any other obligation now or hereafter owed by Borrower or any other party to any Loan Document or Bond Document to Bank shall be in default and not cured within the grace period, if any, provided therein, or
Borrower or any Subsidiary shall be in default under any obligation in excess of $500,000 owed to any other obligee, which default entitles the obligee to accelerate any such obligations or exercise other remedies with respect thereto; or

  
 (e) Borrower or any Subsidiary or any other party to any Loan
Document or Bond Document shall voluntarily dissolve, liquidate or terminate operations or apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or 
  

 15 

 liquidator of such Person or of all or of a substantial part of its assets, admit in writing its inability, or be
generally unable, to pay its debts as the debts become due, make a general assignment for the benefit of its creditors, commence a voluntary case under the federal Bankruptcy Code (as now or hereafter in effect), file a petition seeking to take
advantage of any other law relating to bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment of debts, fail to controvert in a timely and appropriate manner, or acquiesce in writing to, any petition filed against it in an
involuntary case under Bankruptcy Code, or take any corporate action for the purpose of effecting any of the foregoing; or 
  
 (f) An involuntary petition or complaint shall be filed against Borrower or any Subsidiary or any other party to any Loan Document or Bond Document
seeking bankruptcy relief or reorganization or the appointment of a receiver, custodian, trustee, intervenor or liquidator of Borrower or any Subsidiary or any other party to any Loan Document, of all or substantially all of its assets, and such
petition or complaint shall not have been dismissed within sixty (60) days of the filing thereof; or an order, order for relief, judgment or decree shall be entered by any court of competent jurisdiction or other competent authority approving or
ordering any of the foregoing actions; 
  
 (g) A judgment in
excess of $500,000 shall be rendered against Borrower or any Subsidiary or any other party to any Loan Document or Bond Document and shall remain undischarged, undismissed and unstayed for more than thirty days (except judgments validly covered by
insurance with a deductible of not more than $500,000) or there shall occur any levy upon, or attachment, garnishment or other seizure of, any material portion of the assets of Borrower or any Subsidiary or any other party to any Loan Document or
Bond Document by reason of the issuance of any tax levy, judicial attachment or garnishment or levy of execution; or 
  
 (h) Loss, theft, damage or destruction of any material portion of the tangible assets of Borrower or any of its Subsidiaries for which there is either no
insurance coverage or for which, in the reasonable opinion of Bank, there is insufficient insurance coverage.r 
  
 8.2. Remedies. Without in any way limiting the right of Bank to demand payment of any portion of the Obligations payable on demand in accordance
with this Agreement or any of the other Loan Documents, upon or at any time after the occurrence of an Event of Default, all of the Obligations then outstanding (whether under this Agreement, any of the other Loan Documents or otherwise) shall, at
the option of Bank and without notice or demand by Bank, become at once due and payable and Borrower shall forthwith pay to Bank, in addition to any and all sums and charges due, the entire principal of and interest accrued on the Obligations plus
reasonable attorneys’ fees, if the same are collected by or through an attorney at law. From and after the date of such acceleration of the maturity of the Obligations, the unpaid principal amount of the Obligations shall bear interest at the
Default Rate until paid in full. Furthermore, upon the occurrence of an Event of Default and at any time thereafter, Bank may (A) pursuant to the applicable Indenture, advise the applicable Trustee that an Event of Default has occurred and instruct
the Trustee to declare the principal of all Bonds then outstanding and interest thereon to be immediately due and payable, and (B) proceed hereunder, and under any of the Loan Documents and, to the extent therein provided, under the Bond Documents,
in such 
  

 16 

 order as it may elect and Bank shall have no obligation to proceed against any Person or exhaust any other remedy or
remedies which it may have and without resorting to any other security, whether held by or available to Bank. Without limiting the generality of the foregoing, upon or at any time after the occurrence of an Event of Default: 
  
 (a) Bank may declare any or all Obligations (other than in respect of any
Interest Rate Agreement) to be immediately due and payable (if not earlier demanded), bring suit against Borrower to collect the Obligations, exercise any remedy available to Bank hereunder or at law and take any action or exercise any remedy
provided herein or in any other Loan Document or under applicable law. No remedy shall be exclusive of other remedies or impair the right of Bank to exercise any other remedies. 
  
 (b) Terminate any Interest Rate Agreement in accordance with the documentation therefore, and exercise any or all rights
under such documentation relating to any such Interest Rate Agreement, including accelerating any such Interest Rate Agreement Obligations or unwinding such transactions in accordance with the terms thereof. 
  
 8.3. Receiver. In addition to any other remedy available to it, Bank
shall have the absolute right, upon the occurrence of an Event of Default, to seek and obtain the appointment of a receiver to take possession of and operate and/or dispose of the business and assets of Borrower and any costs and expenses incurred
by Bank in connection with such receivership shall bear interest at the Default Rate, at Bank’s option. 
  
 8.4. Deposits; Insurance. After the occurrence of an Event of Default, Borrower authorizes Bank to collect and apply against the Obligations when
due any cash or deposit accounts in its possession, and irrevocably appoints Bank as its attorney-in-fact to endorse any check or draft or take other action necessary to obtain such funds. 
  
 9. [RESERVED]. 
  
 10. Miscellaneous. 
  
 10.1. No Waiver, Remedies Cumulative. No failure on the part of Bank
to exercise, and no delay in exercising, any right hereunder or under any other Loan Document or Bond Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are cumulative and are in addition to any other remedies provided by law, any Loan Document, any Bond Document or otherwise. 
  
 10.2. Survival of Representations. All representations and warranties
made herein shall survive the issuance of the Letter of Credit, and shall continue in full force and effect so long as any Obligations is outstanding, there exists any commitment by Bank to Borrower, and until this Agreement is formally terminated
in writing. 
  
 10.3. Indemnification. Borrower hereby
indemnifies and holds Bank harmless from and against any and all claims, damages, losses, liabilities, costs or expenses whatsoever 
  

 17 

 which Bank may incur (or which may be claimed against Bank by any Person): (i) by reason of or in connection with the
execution and delivery or transfer of, or payment or failure to pay under, the Letter of Credit, provided that Borrower shall not be required to indemnify Bank for any claims, damages, losses, liabilities, costs or expenses to the extent, but only
to the extent, caused by (A) the willful misconduct or gross negligence of Bank in connection with paying drafts presented under the Letter of Credit or (B) Bank’s willful or negligent failure to pay under the Letter of Credit (other than in
connection with a court order) after the presentation to it by the Trustee or a successor corporate fiduciary under the Indenture of a sight draft and certificate strictly complying with the terms and conditions of the Letter of Credit; or (ii) by
reason of or in connection with the execution, delivery or performance of any of the Bond Documents or Loan Documents or any transaction contemplated by any thereof. In addition, if Borrower has generated, stored, or disposed of any hazardous
substances on any applicable property, Borrower agrees to indemnify Bank against any liability, cost and expense, including reasonable attorneys’ fees actually incurred, arising out of or resulting from any such generation, storage, disposal or
location. Anything herein to the contrary notwithstanding, nothing in this Section 10.3 is intended or shall be construed to limit Borrower’s reimbursement obligation contained in Article III hereof. Without prejudice to the survival of any
other obligation of Borrower, the indemnities and obligations of Borrower contained in this Section 10.3 shall survive the payment in full of amounts payable pursuant to Article III and the Termination Date. Borrower’s obligation for
indemnification for all of the foregoing losses, damages, liabilities, obligations, penalties, fees, costs and expenses of Bank shall be part of the Obligations, chargeable against Borrower’s loan account, and shall survive termination of this
Agreement. 
  
 10.4. Transfer of Letter of Credit. The
Letter of Credit may be transferred and assigned in accordance with the terms of the Letter of Credit. 
  
 10.5. Reduction of Letter of Credit. The Letter of Credit is subject to reduction pursuant to its terms. If the amount available to be drawn under
the Letter of Credit shall be permanently reduced in accordance with the terms thereof, then Bank shall have the right to require the Trustee to surrender the Letter of Credit to Bank and to issue on such date, in substitution for such outstanding
Letter of Credit, a substitute irrevocable letter of credit, substantially in the form of the Letter of Credit but with such changes therein as shall be appropriate to give effect to such reduction, dated such date, for the amount to which the
amount available to be drawn under the Letter of Credit shall have been reduced. 
  
 10.6. Liability of Bank. Borrower, to the extent permitted by applicable law, assumes all risks of the acts or omissions of the Trustee and any beneficiary or transferee of the Letter of Credit with respect to
its use of the Letter of Credit. Neither Bank nor any of its officers, directors, employees, agents or consultants shall be liable or responsible for: 
  
 (a) the use which may be made of the Letter of Credit or for any acts or omissions of the Trustee or any beneficiary or transferee in connection
therewith; 
  
 (b) the validity, sufficiency or genuineness of
documents, or of any endorsement(s) thereon, even if such documents should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; 
  

 18 

 (c) payment by Bank against presentation of documents which do not comply with the terms of the Letter of
Credit, including failure of any documents to bear any reference or adequate reference to the Letter of Credit; or 
  
 (d) any other circumstances whatsoever in any way related to the making or failure to make payment under the Letter of Credit; 
  
 except only that Borrower shall have a claim against Bank, and Bank shall be liable to
Borrower, to the extent but only to the extent, of any direct, as opposed to consequential damages suffered by Borrower which Borrower proves were caused by (i) willful misconduct or gross negligence of Bank in determining whether documents
presented under the Letter of Credit complied with the terms of the Letter of Credit or (ii) willful failure or gross negligence of Bank to pay under the Letter of Credit after the presentation to it by the Trustee or a successor trustee or credit
facility trustee under the Indenture of a sight draft and certificate strictly complying with the terms and conditions of the Letter of Credit. In furtherance and not in limitation of the foregoing, Bank may accept documents that appear on their
face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary. 
  
 10.7. Notices. Any notice or other communication hereunder to any party hereto or thereto shall be by hand delivery, overnight delivery, facsimile,
telegram, telex or registered or certified mail and unless otherwise provided herein shall be deemed to have been given or made when delivered, telegraphed, telexed, faxed or three (3) Business Days after having been deposited in the mails, postage
prepaid, addressed to the party at its address specified below (or at any other address that the party may hereafter specify to the other parties in writing): 
  

			
	 Bank:
	 	 WACHOVIA BANK, NATIONAL ASSOCIATION

	 	 	 100 S. Ashley Drive, Suite 1000

	 	 	 Tampa, FL 33602

	 	 	 Attn: Portfolio Management

		
	 	 	 and for Letter of Credit drawings

		
	 	 	 WACHOVIA BANK, NATIONAL ASSOCIATION

	 	 	 301 South Tryon Street

	 	 	 Charlotte, North Carolina 28288-0742

	 	 	 Attn: International Operations

		
	 Borrower:
	 	 SRI/Surgical Express, Inc.

	 	 	 12425 Race Track Road

	 	 	 Tampa, FL 33626

	 	 	 Attn: Chief Financial Officer

  
 10.8. Governing
Law. This Agreement and the Loan Documents shall be deemed contracts made under the laws of the State of Georgia and shall be governed by and 
  

 19 

 construed in accordance with the laws of said state (excluding its conflict of laws provisions if such provisions would
require application of the laws of another jurisdiction). Borrower hereby acknowledges that the Letter of Credit shall be governed by and construed in accordance with International Standby Practices (1998) of the Institute of International Banking
Law & Practice, International Chamber of Commerce Publication No. 590 (“ISP98”). 
  
 10.9. Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of Borrower and Bank, and their respective successors and assigns; provided, that Borrower may not assign any of
its rights hereunder without the prior written consent of Bank, and any such assignment made without such consent will be void. 
  
 10.10. Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original and all of which when taken together shall constitute but one and the same instrument. 
  
 10.11. No Usury. Regardless of any other provision of this Agreement, the Bond Documents or in any other Loan Document, if for any reason the
effective interest should exceed the maximum lawful interest, the effective interest shall be deemed reduced to, and shall be, such maximum lawful interest, and (i) the amount which would be excessive interest shall be deemed applied to the
reduction of the principal balance of Borrower’s obligations hereunder and under the Bond Documents and Loan Documents and not to the payment of interest, and (ii) if Borrower’s obligations hereunder and under the Bond Documents and Loan
Documents have been or is thereby paid in full, the excess shall be returned to the party paying same, such application to the principal balance of such obligations or the refunding of excess to be a complete settlement and acquittance thereof.

  
 10.12. Powers. All powers of attorney granted to Bank
are coupled with an interest and are irrevocable. 
  
 10.13.
Approvals. If this Agreement calls for the approval or consent of Bank, such approval or consent may be given or withheld in the discretion of Bank unless otherwise specified herein. 
  
 10.14. Binding Arbitration; Preservation of Remedies. 
  
 (a) Binding Arbitration. Upon demand of any party hereto, whether
made before or after institution of any judicial proceeding, any claim or controversy arising out of, or relating to the Loan Documents between the parties (a “Dispute”) shall be resolved by binding arbitration conducted under and governed
by the Commercial Financial Disputes Arbitration Rules (the “Arbitration Rules”) of the American Arbitration Association (the “AAA”) and the Federal Arbitration Act. Disputes may include, without limitation, tort claims,
counterclaims, disputes as to whether a matter is subject to arbitration, claims brought as class actions, or claims arising from documents executed in the future. A judgment upon the award may be entered in any court having jurisdiction.
Notwithstanding the foregoing, this arbitration provision does not apply to disputes under or related to swap agreements. 
  

 20 

 (b) Special Rules. All arbitration hearings shall be conducted in the city in which the office of
Bank first stated above is located. A hearing shall begin within 90 days of demand for arbitration and all hearings shall be concluded within 120 days of demand for arbitration. These time limitations may not be extended unless a party shows cause
for extension and then for no more than a total of 60 days. The expedited procedures set forth in Rule 51 et seq. of the Arbitration Rules shall be applicable to claims of less than $1,000,000. Arbitrators shall be licensed attorneys selected from
the Commercial Financial Dispute Arbitration Panel of the AAA. The parties do not waive applicable Federal or state substantive law except as provided herein. 
  

(c) Preservation and Limitation of Remedies. Notwithstanding the preceding binding arbitration provisions, the parties agree to preserve,
without diminution, certain remedies that any party may exercise before or after an arbitration proceeding is brought. The parties shall have the right to proceed in any court of proper jurisdiction or by self-help to exercise or prosecute the
following remedies, as applicable: (i) all rights to foreclose against any real or personal property or other security by exercising a power of sale or under applicable law by judicial foreclosure including a proceeding to confirm the sale; (ii) all
rights of self-help including peaceful occupation of real property and collection of rents, set-off, and peaceful possession of personal property; (iii) obtaining provisional or ancillary remedies including injunctive relief, sequestration,
garnishment, attachment, appointment of receiver and filing an involuntary bankruptcy proceeding; and (iv) when applicable, a judgment by confession of judgment. Any claim or controversy with regard to the parties’ entitlement to such remedies
is a Dispute. 
  
 (d) No Punitive Damages. Each party
agrees that it shall not have a remedy of punitive or exemplary damages against the other in any Dispute and hereby waives any right or claim to punitive or exemplary damages it may have now or which may arise in the future in connection with any
Dispute, whether the Dispute is resolved by arbitration or judicially. 
  
 (e) Waiver of Jury Trial. The parties acknowledge that by agreeing to binding arbitration they have irrevocably waived any right they may have to a jury trial with regard to a Dispute. 
  
 10.15. Participations. Bank shall have the right to enter into one or
more participation with other lenders with respect to the Obligations. Upon prior notice to Borrower of such participation, Borrower shall thereafter furnish to such participant any information furnished by Borrower to Bank pursuant to the terms of
the Loan Documents. Nothing in this Agreement or any other Loan Document shall prohibit Bank from pledging or assigning this Agreement and Bank’s rights under any of the other Loan Documents, including collateral therefor, to any Federal
Reserve Bank in accordance with applicable law. 
  
 10.16.
Waiver of Certain Defenses. To the fullest extent permitted by applicable law, upon the occurrence of any Event of Default, neither Borrower nor anyone claiming by or under Borrower will claim or seek to take advantage of any law requiring
Bank to attempt to realize upon any collateral or collateral of any surety or guarantor, or any appraisement, 
  

 21 

 evaluation, stay, extension, homestead, redemption or exemption laws now or hereafter in force in order to prevent or
hinder the enforcement of this Agreement. Borrower, for itself and all who may at any time claim through or under Borrower, hereby expressly waives to the fullest extent permitted by law the benefit of all such laws. All rights of Bank and all
obligations of Borrower hereunder shall be absolute and unconditional irrespective of (i) any change in the time, manner or place of payment of, or any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent
to any departure from any provision of the Loan Documents or the Bond Documents, (ii) any exchange, release or non-perfection of any other collateral given as security for the Obligations, or any release or amendment or waiver of or consent to
departure from any guaranty for all or any of the Obligations, or (iii) any other circumstance which might otherwise constitute a defense available to, or a discharge of, Borrower or any third party, other than payment and performance in full of the
Obligations. 
  
 10.17. Indirect Means. Any act which
Borrower is prohibited from doing shall not be done indirectly through a Subsidiary or by any other indirect means. 
  

 22 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the
day and year first above written. 
  

			
	BANK:
	
	WACHOVIA BANK, NATIONAL ASSOCIATION
		
	 By:
	 	  

	 Title:
	 	  

	
	BORROWER:
	
	SRI/SURGICAL EXPRESS, INC.
		
	 By:
	 	  

	 Title:
	 	  

		
	 Attest:
	 	  

	 Title:
	 	  

	
	[SEAL]

  

 23 

 EXHIBIT A-1 
 FORM OF LETTER OF CREDIT 
  
  

 -i- 

 EXHIBIT A-2 
 FORM OF LETTER OF CREDIT 
  
  

 -i- 

 EXHIBIT B 
  

	1.	Trust Indenture, dated as of February 1, 1999, between The Industrial Development Board of the County of Hamilton, Tennessee (the “Issuer”) and Wachovia Bank, National
Association, as Trustee (the “Trustee); 

  

	2.	Lease Agreement, dated as of February 1, 1999, between the Issuer and the Borrower; 

  

	3.	Tender Agency Agreement, dated as of February 1, 1999 by and between the Borrower and the Trustee; 

  

	4.	Placement Agent Agreement, dated as of February 24, 1999 by and among Industrial Development Board of the County of Hamilton, Tennessee, Borrower and Wachovia Capital Markets, LLC
(formerly First Union Capital Markets Corp.); 

  

	5.	Remarketing Agreement, dated as of February 1, 1999, between the Borrower and Wachovia Capital Markets, LLC; 

  

	6.	Trust Indenture, dated as of June 1, 1999 by and between Borrower and the Trustee; 

  

	7.	Placement Agent Agreement, dated as of July 1, 1999 between the Borrower and Wachovia Capital Markets, LLC; 

  

	8.	Remarketing Agreement, dated as of June 1, 1999 between the Borrower and Wachovia Capital Markets, LLC; and 

  

	9.	Tender Agency Agreement, dated as of June 1, 1999 between the Borrower and the Trustee. 

  

 -i- 

 EXHIBIT “C” 
  
 FORM OF REDEMPTION NOTICE 
  
 The undersigned hereby certifies, represents and warrants that he is an officer of SRI/Surgical Express, Inc. (the “Company”). 
  
 Reference is made to that certain Trust Indenture dated as of February 1,
1999 (the “Indenture”), between Industrial Development Board of the County of Hamilton, Tennessee (the “Issuer”) and WACHOVIA BANK, NATIONAL ASSOCIATION, as trustee (the “Trustee”), relating to the below designated
issue of bonds (the “Bonds”): 
  
 Industrial Development
Board of the County of Hamilton, Tennessee 
 Industrial Development Revenue Bonds 
 (Sterile Recoveries, Inc. Project), Taxable Series 1999 
  
 Capitalized terms used herein are defined terms in the Indenture, and shall have the same meaning herein as set forth in the Indenture. 
  
 Pursuant to Section 7.1(a) of the Indenture, the Company (as successor by
assignment to the Lessee) hereby notifies the Trustee of the election to optionally redeem the Bonds on the dates and in the amounts set forth in the schedule hereto. The final redemption shall be payment on the maturity date of the Bonds. The final
redemption shall be payment on the maturity date of the Bonds. 
  
 This notice shall serve as a continuing notice of the election to optionally redeem Bonds in accordance with the above paragraph, unless otherwise notified by the Company. The Company requests that the Trustee provide the notices as
required under the Indenture to the holders of the Bonds in the manner provided in the Indenture. 
  
 Dated:                      
  

			
	 SRI/SURGICAL EXPRESS, INC.

		
	 By:
	 	  

	 Title:
	 	 

  

 -ii- 

 REDEMPTION SCHEDULE A-1 
  

							
	 DATE

	 	PAYMENT

	  	BALANCE

	 	 	 	—  	  	$	4,500,000.00
	 February 1, 2004
	 	$	75,000.00	  	 	4,425,000.00
	 May 1, 2004
	 	 	75,000.00	  	 	4,350,000.00
	 August 1, 2004
	 	 	75,000.00	  	 	4,275,000.00
	 November 1, 2004
	 	 	75,000.00	  	 	4,200,000.00
	 February 1, 2005
	 	 	75,000.00	  	 	4,125,000.00
	 May 1, 2005
	 	 	75,000.00	  	 	4,050,000.00
	 August 1, 2005
	 	 	75,000.00	  	 	3,975,000.00
	 November 1, 2005
	 	 	75,000.00	  	 	3,900,000.00
	 February 1, 2006
	 	 	75,000.00	  	 	3,825,000.00
	 May 1, 2006
	 	 	75,000.00	  	 	3,750,000.00
	 August 1, 2006
	 	 	75,000.00	  	 	3,675,000.00
	 November 1, 2006
	 	 	75,000.00	  	 	3,600,000.00
	 February 1, 2007
	 	 	75,000.00	  	 	3,525,000.00
	 May 1, 2007
	 	 	75,000.00	  	 	3,450,000.00
	 August 1, 2007
	 	 	75,000.00	  	 	3,375,000.00
	 November 1, 2007
	 	 	75,000.00	  	 	3,300,000.00
	 February 1, 2008
	 	 	75,000.00	  	 	3,225,000.00
	 May 1, 2008
	 	 	75,000.00	  	 	3,150,000.00
	 August 1, 2008
	 	 	75,000.00	  	 	3,075,000.00
	 November 1, 2008
	 	 	75,000.00	  	 	3,000,000.00
	 February 1, 2009
	 	 	75,000.00	  	 	2,925,000.00
	 May 1, 2009
	 	 	75,000.00	  	 	2,850,000.00
	 August 1, 2009
	 	 	75,000.00	  	 	2,775,000.00
	 November 1, 2009
	 	 	75,000.00	  	 	2,700,000.00
	 February 1, 2010
	 	 	75,000.00	  	 	2,625,000.00
	 May 1, 2010
	 	 	75,000.00	  	 	2,550,000.00
	 August 1, 2010
	 	 	75,000.00	  	 	2,475,000.00
	 November 1, 2010
	 	 	75,000.00	  	 	2,400,000.00
	 February 1, 2011
	 	 	75,000.00	  	 	2,325,000.00
	 May 1, 2011
	 	 	75,000.00	  	 	2,250,000.00
	 August 1, 2011
	 	 	75,000.00	  	 	2,175,000.00
	 November 1, 2011
	 	 	75,000.00	  	 	2,100,000.00
	 February 1, 2012
	 	 	75,000.00	  	 	2,025,000.00
	 May 1, 2012
	 	 	75,000.00	  	 	1,950,000.00
	 August 1, 2012
	 	 	75,000.00	  	 	1,875,000.00
	 November 1, 2012
	 	 	75,000.00	  	 	1,800,000.00
	 February 1, 2013
	 	 	75,000.00	  	 	1,725,000.00
	 May 1, 2013
	 	 	75,000.00	  	 	1,650,000.00
	 August 1, 2013
	 	 	75,000.00	  	 	1,575,000.00
	 November 1, 2013
	 	 	75,000.00	  	 	1,500,000.00
	 February 1, 2014
	 	 	1,500,000.00	  	 	 

  

 -iii- 

 EXHIBIT “D” 
  
 FORM OF REDEMPTION NOTICE 
  
 NOTICE FROM COMPANY OF ELECTION TO OPTIONALLY 
 REDEEM BONDS 
  
 The undersigned hereby certifies,
represents and warrants that he is an officer of SRI/SURGICAL EXPRESS, INC., successor by assignment to SRI Realty Trust 1998-1 (the “Issuer”). 
  
 Reference is made to that certain Trust Indenture dated as of June 1, 1998 (the “Indenture”), between the Issuer and WACHOVIA BANK, NATIONAL
ASSOCIATION, as trustee (the “Trustee”), relating to the below designated issue of bonds (the “Bonds”): 
  
 SRI Realty Trust 1998-1 
 Taxable Variable Rate
Demand Bonds, Series 1999 
  
 Capitalized terms used herein are
defined terms in the Indenture, and shall have the same meaning herein as set forth in the Indenture. 
  
 Pursuant to Section 7.1 of the Indenture, the Issuer hereby notifies the Trustee of the election to optionally redeem the Bonds on the dates and in the
amounts set forth in the schedule hereto. The final redemption shall be payment on the maturity date of the Bonds. The final redemption shall be payment on the maturity date of the Bonds. 
  
 This notice shall serve as a continuing notice of the election to optionally redeem Bonds in accordance with the above
paragraph, unless otherwise notified by the Issuer. The Issuer requests that the Trustee provide the notices as required under the Indenture to the holders of the Bonds in the manner provided in the Indenture. 
  
 Dated:
                     
  

			
	 SRI/SURGICAL EXPRESS, INC.

		
	 By:
	 	  

	 Title:
	 	 

  

 -iv- 

 REDEMPTION SCHEDULE A-2 
  

							
	 DATE

	 	PAYMENT

	  	BALANCE

	 	 	 	 	  	$	5,200,000.00
	 February 1, 2004
	 	$	90,000.00	  	 	5,110,000.00
	 May 1, 2004
	 	 	90,000.00	  	 	5,020,000.00
	 August 1, 2004
	 	 	90,000.00	  	 	4,930,000.00
	 November 1, 2004
	 	 	90,000.00	  	 	4,840,000.00
	 February 1, 2005
	 	 	90,000.00	  	 	4,750,000.00
	 May 1, 2005
	 	 	90,000.00	  	 	4,660,000.00
	 August 1, 2005
	 	 	90,000.00	  	 	4,570,000.00
	 November 1, 2005
	 	 	90,000.00	  	 	4,480,000.00
	 February 1, 2006
	 	 	90,000.00	  	 	4,390,000.00
	 May 1, 2006
	 	 	90,000.00	  	 	4,300,000.00
	 August 1, 2006
	 	 	90,000.00	  	 	4,210,000.00
	 November 1, 2006
	 	 	90,000.00	  	 	4,120,000.00
	 February 1, 2007
	 	 	90,000.00	  	 	4,030,000.00
	 May 1, 2007
	 	 	90,000.00	  	 	3,940,000.00
	 August 1, 2007
	 	 	90,000.00	  	 	3,850,000.00
	 November 1, 2007
	 	 	90,000.00	  	 	3,760,000.00
	 February 1, 2008
	 	 	90,000.00	  	 	3,670,000.00
	 May 1, 2008
	 	 	90,000.00	  	 	3,580,000.00
	 August 1, 2008
	 	 	90,000.00	  	 	3,490,000.00
	 November 1, 2008
	 	 	90,000.00	  	 	3,400,000.00
	 February 1, 2009
	 	 	90,000.00	  	 	3,310,000.00
	 May 1, 2009
	 	 	90,000.00	  	 	3,220,000.00
	 August 1, 2009
	 	 	90,000.00	  	 	3,130,000.00
	 November 1, 2009
	 	 	90,000.00	  	 	3,040,000.00
	 February 1, 2010
	 	 	90,000.00	  	 	2,950,000.00
	 May 1, 2010
	 	 	90,000.00	  	 	2,860,000.00
	 August 1, 2010
	 	 	90,000.00	  	 	2,770,000.00
	 November 1, 2010
	 	 	90,000.00	  	 	2,680,000.00
	 February 1, 2011
	 	 	90,000.00	  	 	2,590,000.00
	 May 1, 2011
	 	 	90,000.00	  	 	2,500,000.00
	 August 1, 2011
	 	 	90,000.00	  	 	2,410,000.00
	 November 1, 2011
	 	 	90,000.00	  	 	2,320,000.00
	 February 1, 2012
	 	 	90,000.00	  	 	2,230,000.00
	 May 1, 2012
	 	 	90,000.00	  	 	2,140,000.00
	 August 1, 2012
	 	 	90,000.00	  	 	2,050,000.00
	 November 1, 2012
	 	 	90,000.00	  	 	1,960,000.00
	 February 1, 2013
	 	 	90,000.00	  	 	1,870,000.00
	 May 1, 2013
	 	 	90,000.00	  	 	1,780,000.00
	 August 1, 2013
	 	 	90,000.00	  	 	1,690,000.00
	 November 1, 2013
	 	 	90,000.00	  	 	1,600,000.00
	 February 1, 2014
	 	 	1,700,000.00	  	 	 

  

 -v-Assignment and Assumption Agreement

 Exhibit 10.40 
  
 THIS INSTRUMENT PREPARED BY AND 
 AFTER RECORDING RETURN TO: 
 Han C.
Choi, Esq. 
 Nelson Mullins Riley & Scarborough, L.L.P. 
 999
Peachtree Street, N.E., Suite 1400 
 Atlanta, Georgia 30309 
  
 CROSS REFERENCE: 
  
 Leasehold Deed of Trust, Assignment of Leases, Security Agreement and Financing Statement from First Security Bank, National Association, a national banking association,
not individually but solely as Owner Trustee under the SRI Realty Trust 1998-1 and Sterile Recoveries, Inc., a Florida corporation, to Pioneer Title Agency, Inc. as trustee for the benefit of First Union National Bank, dated February 24, 1999,
recorded at Deed Book 5295, page 93, Hamilton County, Tennessee records. 
  
 ASSIGNMENT AND ASSUMPTION AGREEMENT 
  
 STATE OF TENNESSEE 
  
 COUNTY OF
HAMILTON 
  
 This instrument assigns the interest and obligations of Wells Fargo
Bank Northwest, National Association, not individually but solely as Owner Trustee under the SRI Realty Trust 1998-1 (formerly known as First Security Bank, National Association) under that certain Leasehold Deed of Trust, Assignment of Leases,
Security Agreement and Financing Statement dated as of February 24, 1999 to SRI/Surgical Express, Inc. Wells Fargo Bank Northwest, National Association will not be released of liability; therefore, maximum principal indebtedness for Tennessee
recording tax purposes is $0.00. 

 THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (the “Assumption Agreement”) is entered into as of the
19th day of December, 2003, by and among WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, a national banking association, not individually, except as expressly stated herein, but solely as the Owner Trustee under the SRI Realty Trust 1998-1 (the
“Assignor”) and SRI/SURGICAL EXPRESS, INC., a Florida corporation (the “Assignee”); 
  
 WITNESSETH: 
  
 WHEREAS, the Industrial Development Board of the County of Hamilton, Tennessee (the “Issuer”) has previously issued its $4,500,000 in original aggregate principal amount of Industrial Development Revenue Bonds (Sterile Recoveries,
Inc. Project), Taxable Series 1999 (the “$4,500,000 Bonds”) pursuant to a Trust Indenture, dated as of February 1, 1999, between the Issuer and Wachovia Bank, National Association (formerly First Union National Bank) (the
“Trustee”) for the purpose of financing the acquisition, construction, installation and equipping of an industrial facility located in Hamilton County, Tennessee (the “Tennessee Project”); and 
  
 WHEREAS, the Issuer lent the proceeds of the $4,500,000 Bonds to Assignor
(formerly First Security Bank, National Association) pursuant to a Lease Agreement, dated as of February 1, 1999 (the “Lease Agreement”), between the Issuer and the Assignor; and 
  
 WHEREAS, Assignor in turn leased the Tennessee Project to the Assignee
(formerly known as Sterile Recoveries, Inc.) pursuant to a Lease Agreement, dated as of February 1, 1999 (the “SRI Sublease Agreement”); and 
  
 WHEREAS, the Assignor has previously issued its $5,200,000 in original aggregate principal amount of SRI Realty Trust 1998-1 Taxable Variable Rate Demand
Bonds, Series 1999 (the “$5,200,000 Bonds”, together with the $4,500,000 Bonds, the “Bonds”) pursuant to a Trust Indenture, dated as of June 1, 1999, between the Assignor and the Trustee for the purpose of financing the
acquisition, construction, installation and equipping of a manufacturing facility located in Stockton, California on property located at the property described in the legal description attached hereto as Exhibit “A” (the “California
Project”); and 
  
 WHEREAS, the Assignor lent the proceeds of
the $5,200,000 Bonds to Assignee pursuant to a Lease Agreement, dated as of February 1, 1999 (the “SRI Lease Agreement”), between the Assignor and the Assignee; and 
  
 WHEREAS, pursuant to a Credit Agreement, dated as of February 1, 1999, by and between the Assignor and Wachovia Bank,
National Association (formerly First Union National Bank) (the “Bank”), the Bank issued its irrevocable letter of credit dated February 24, 1999 in the amount of $4,725,000 as security for the $4,500,000 Bonds and its irrevocable letter of
credit dated July 1, 1999 in the amount of $5,460,000 as security for the $5,200,000 Bonds (the “Letters of Credit”); and 
  

 2 

 WHEREAS, in connection with the issuance of the Bonds and the Letter of Credits, the Assignor entered
into and executed the documents listed on the attached Schedule “A” (such documents are hereinafter referred to collectively as the “Bond Documents”); and 
  
 WHEREAS, the Assignor desires to assign all of its rights and liabilities to the Assignee, including without limitation, all
right, title, interest, duties and obligations of the Assignor in, to and under the Bond Documents; and 
  
 WHEREAS, notwithstanding such assignment by the Assignor and assumption by the Assignee, the Assignor will remain primarily liable for its obligations
under the Lease Agreement; 
  
 NOW, THEREFORE, in consideration of
the premises, the mutual agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 
  
 1. The Assignor hereby assigns, transfers and delegates all its right,
title, interest, duties and obligations in, to and under the Bond Documents to the Assignee; provided, however, that the Assignor hereby acknowledges that it will remain primarily liable for its obligations under the Lease Agreement and the
Leasehold Deed of Trust, Assignment of Leases, Security Agreement and Financing Statement, dated as of February 24, 1999 (the “Security Deed”), from the Assignor and Assignee to Pioneer Title Agency, Inc. for the benefit of the Bank, which
Security Deed is secured by the property described in Exhibit “B” attached hereto. 
  
 2. The Assignee hereby assumes all of the Assignor’s right, title, interest, duties and obligations in, to and under the Bond Documents and covenants to perform all of the Assignor’s agreements, obligations
and covenants thereunder. 
  
 3. The Assignee hereby acknowledges
that the Bank, the Issuer and the Trustee may have and exercise, as against Assignee, all right, title, interest, powers and privileges of the Bank, the Issuer and Trustee under the Bond Documents, until all of the payments and other obligations
required of the Assignor and the Assignee thereunder have been paid or otherwise satisfied in full. 
  
 4. The Bank hereby acknowledges and consents to the foregoing assignment and assumption, subject to the express understanding that all duties, obligations
and liabilities of the Assignor under the Bond Documents shall, from and after the date hereof, become the duties, obligations and liabilities of the Assignee under each such Bond Document. 
  
 5. The Assignor hereby represents and warrants, on the date hereof, as
follows: 
  
 (a) The Bond Documents executed and delivered on the
date of issuance and delivery of the Bonds, copies of which have been furnished to the Assignee, constitute true, complete and accurate copies of the Bond Documents, and there have been no supplements, amendments and modifications thereto; and there
are no amendments and modifications to the Bond Documents or to any other instruments or agreements to which the Assignor is a party or by which it is bound and which relate to the Bond Documents. 
  

 3 

 (b) The Bond Documents are in full force and effect as of the date hereof, and no breaches, defaults or
defenses are in existence or have been asserted under the Bond Documents by the Trustee or the Bank (as applicable), and no facts or circumstances exist which, with the giving of notice or the passage of time, or both, would constitute a breach or
default under the Bond Documents. 
  
 (c) The aggregate
outstanding principal balance under the $4,500,000 Bonds on the date hereof is $4,500,000, and the aggregate outstanding principal balance under the $5,200,000 Bonds on the date hereof is $5,200,000. 
  
 6. The Assignee represents and warrants, on the date hereof, as follows:

  
 (a) The Assignee is a corporation duly organized, validly
existing and in good standing under the laws of the of the State of Florida and is qualified to do business in the States of Tennessee and California and has all requisite power and authority and all necessary licenses and permits to own and operate
its properties and to carry on its business as now being conducted and as presently proposed to be conducted. 
  
 (b) There are no proceedings pending, or to the knowledge of the Assignee threatened against or affecting the Assignee in any court or before any
governmental authority or arbitration board or tribunal which involve the possibility of materially and adversely affecting the properties, business, prospects, profits or condition (financial or otherwise) of the Assignee, or the ability of the
Assignee to perform its obligations under this Assumption Agreement or the Bond Documents. The Assignee is not in default with respect to an order of any court, governmental authority or arbitration board or tribunal. 
  
 (c) The execution and delivery by the Assignee of this Assumption Agreement,
and the compliance by the Assignee with all of the provisions hereof and of the Bond Documents (i) are within the corporate power of the Assignee, (ii) will not conflict with or result in any breach of any of the provisions of, or constitute a
default under, or result in the creation of any lien, charge or encumbrance upon any property of the Assignee under the provisions of, any agreement, charter document, by-law or other instrument to which the Assignee is a party or by which it may be
bound, or any license, judgment, decree, law, statute, order, rule or regulation of any court or governmental agency or body having jurisdiction over the Assignee or any of its activities or properties, and (iii) have been duly authorized by all
necessary corporate action on the part of the Assignee. 
  
 (d)
Neither the Assignee nor any of its business or properties, nor any relationship between the Assignee and any other person, nor any circumstances in connection with the execution, delivery and performance by the Assignee of this Assumption Agreement
and the Bond Documents is such as to require the consent, approval or authorization of, or the filing, registration or qualification with, any governmental authority on the part of the Assignee other than those already obtained. 
  

 4 

 (e) No event has occurred and no condition exists with respect to the Assignee that would constitute an
“event of default” under the Bond Documents or which, with the lapse of time or with the giving of notice or both, would become an “event of default” under the Bond Documents. The Assignee is not in violation in any material
respect of any agreement, charter document, by-law or other instrument to which it is party or by which it may be bound. 
  
 (f) The Assignee is not in violation of any laws, ordinances, governmental rules or regulations to which it is subject and has not failed to obtain any
licenses, permits, franchises or other governmental authorizations necessary to the ownership of its properties or to the conduct of its business, which violation or failure to obtain might materially and adversely affect the properties, business,
prospects, profits or condition (financial or otherwise) of the Assignee. 
  
 (g) The Assignee is not a party of any contract or agreement, or subject to any charter or other corporate restriction, that materially and adversely affects the business of the Assignee. The Assignee is not a party
to any contract or agreement that restricts the right or ability of the Assignee to incur or guarantee indebtedness for borrowed money. 
  
 (h) Neither the representations of the Assignee contained in this Assumption Agreement, nor any written statement furnished by or on behalf of the
Assignee to the Bank in connection with the transactions contemplated hereby, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained herein or herein not misleading. There is no
fact that the Assignee has not disclosed to the Bank or the Trustee in writing that materially and adversely affects or in the future may (so far as the Assignee can now reasonably foresee) materially and adversely affect the properties, business,
prospects, profits or condition (financial or otherwise) of the Assignee, or the ability of the Assignee to perform its obligations under this Assumption Agreement or the Bond Documents. 
  
 7. The address of the Assignee for the purpose of notice under the Bond Documents is as follows: 
  
 SRI/Surgical Express, Inc. 
 12425 Race Track Road 
 Tampa, FL 33626 
 Attn: Chief Financial Officer 
  

 5 

 IN WITNESS WHEREOF, the Assignor and Assignee have caused this Assumption Agreement to be duly executed
and delivered by their duly authorized officers, all as of the date first above written. 
  

					
	 Signed, sealed and delivered
 in the presence of:
	 	WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION (successor to First Security Bank, National Association), not individually, except as expressly stated herein, but solely
as the Owner Trustee under the SRI Realty Trust 1998-1
	  

	 
	 Unofficial Witness
	 
	 	 
	  

	 	 	 	 
	 Notary Public
	 	 	 	 
			
	 My Commission Expires:
	 	 By:
	 	  

	 	 	 Name:
	 	 
	 	 	 Title:
	 	 
	 	 	 Address:

		
	 Signed, sealed and delivered
 in the presence of:
	 	 SRI/SURGICAL EXPRESS, INC.

	  

	 	 
	 Unofficial Witness
	 	 By:
	 	  

	 	 	 Name:
	 	 
	
	 	 Title:
	 	 
	 Notary Public
	 	 Address:

			
	 My Commission Expires:
	 	 	 	 

  

 6 

			
	 CONSENTED:

	
	 WACHOVIA BANK, NATIONAL ASSOCIATION,
As credit facility provider

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 
	
	 WACHOVIA BANK, NATIONAL ASSOCIATION,
As Trustee and Tender Agent

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 
	
	 THE INDUSTRIAL DEVELOPMENT BOARD

	 OF THE COUNTY OF HAMILTON, TENNESSEE

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 

  

 7 

 SCHEDULE “A” 
  

	1.	Credit Agreement, dated as of February 1, 1999 by and between the Assignor and the Bank; 

  

	2.	Participation Agreement, dated as of February 1, 1999, among the Assignor, Assignee and the Bank; 

  

	3.	Pledge and Security Agreement, dated as of February 1, 1999 from the Assignor to the Bank; 

  

	4.	Security Agreement, dated as of February 1, 1999, made by the Assignor for the benefit of the Bank; 

  

	5.	Lease Agreement, dated as of February 1, 1999 by and between the Issuer and the Assignor; 

  

	6.	SRI Sublease Agreement, dated as of February 1, 1999 by and between the Assignor and the Assignee; 

  

	7.	Tender Agency Agreement, dated as of February 1, 1999 by and between the Assignor and the Trustee, acting as trustee and tender agent; 

  

	8.	Placement Agent Agreement, dated as of February 24, 1999 by and among the Issuer, Assignor, the Assignee and Wachovia Capital Markets, LLC (formerly First Union Capital Markets
Corp.); 

  

	9.	Remarketing Agreement, dated as of February 1, 1999 by and among the Assignor, the Assignee and Wachovia Capital Markets, LLC; 

  

	10.	Quitclaim Deed and Bill of Sale dated February 24, 1999 from the Issuer to the Assignor; 

  

	11.	Quitclaim Deed dated February 24, 1999 from the Assignor to the Issuer; 

  

	12.	Leasehold Deed of Trust, Assignment of Leases, Security Agreement and Financing Statement, dated as of February 24, 1999, from the Assignor and Assignee to Pioneer Title Agency,
Inc. for the benefit of the Bank; 

  

	13.	Trust Indenture, dated as of June 1, 1999 by and between the Assignor and the Trustee; 

  

	14.	SRI Lease Agreement, dated as of February 1, 1999, by and between the Assignor and the Assignee; 

	15.	Placement Agent Agreement, dated as of July 1, 1999 by and among the Assignor, the Assignee and Wachovia Capital Markets, LLC; 

  

	16.	Remarketing Agreement, dated as of June 1, 1999 by and among the Assignor, the Assignee and Wachovia Capital Markets, LLC; 

  

	17.	Tender Agency Agreement, dated as of June 1, 1999 by and among the Assignor, the Assignee and the Trustee, acting as trustee and the tender agent; 

  

	18.	Leasehold Deed of Trust, Absolute Assignment of Leases and Rents, Security Agreement and Fixture Filing, dated as of June 30, 1999 from Assignor to First American Title Company for
the benefit of the Bank; 

  

	19.	Pledge Agreement, dated as of June 1, 1999 from Assignor to Bank; 

  

	20.	Ground Sublease Agreement, dated as of June 30, 1999 by and between the Assignee and the Assignor; and 

  

	21.	Grant Deed, dated as of July 1, 1999 from Assignee to Assignor, Instrument No. 99087147, San Joaquin County, California Records. 

 EXHIBIT “A” 
 (Description of Premises) 
  
 San Joaquin County 
 Real Property Description 
  
 AREA NO. 1A: 
  
 All that real property situated in the County of San Joaquin, State of California, lying in Sections 37 and 38 of C.M. Weber’s Grant, El Rancho Del Campo de los
Franceses, and being a portion of that certain 13.333 acre parcel of land shown on the Record of Survey filed in Book 33 of Surveys, at Page 152, San Joaquin County Records, also being a portion of the 78.598 acre parcel of land shown on that
certain Map of Survey filed for record in Book 27 of Surveys, at Page 197, San Joaquin County Records, and being more particularly described as follows: 
  
 Commencing at City of Stockton control monument 6S-15, as referenced on that certain Record of Survey filed in Book 33 of Surveys, at Page 20, San Joaquin County Records;
thence North l5°57’36” West 2667.21 feet to City of Stockton control monument 6S-14, as referenced on said Record of Survey filed in Book 33 of Surveys, at Page 20; thence South 82°52’29” East 121.01 feet to a 3/4 inch
iron pin tagged R.C.E. 8189 set at an angle point at a northwesterly corner of aforesaid 78.598 acre parcel of land, said point also being on the southerly line of a 100-foot wide private right-of-way known as C.E. Dixon Street, as shown on said
Record of Survey filed in Book 33 of Surveys, at Page 152, San Joaquin County Records, said point also being the TRUE POINT OF BEGINNING of this description; thence leaving said point of beginning, along the southerly right-of-way line of said C.E.
Dixon Street, North 72°44’16” East 268.31 feet to the beginning of a curve to the right, having a radius of 35.00 feet, a central angle of 90°12’02”, and a chord bearing and distance of South 62°09’44” East
49.58 feet; thence southeasterly, along the arc of said curve, 55.10 feet to a point on the westerly right-of-way line of a 84-foot wide private right-of-way known as Longe Street; thence along said westerly right-of-way line South
17°03’43” East 448.98 feet; thence South 72°56’17” West 356.75 feet to a point on the easterly right-of-way line of present 110-foot wide Airport Way, as shown on said Record of Survey filed in Book 33 of Surveys, at Page
152, San Joaquin County Records; thence along said easterly right-of-way line the following two (2) courses: 
  

	1)	North 17°15’34” West 242.87 feet; 

  

	2)	North 13°48’28” West 200.36 feet; thence North 29°45’55” East 58.66 feet to the point of beginning. 

  
 containing 3.904 acres of land, more or less.

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