Document:

Exhibit 4.13

 

WARRANT AGREEMENT

 

Agreement
made as of
                          ,
2010 between Mission Community Bancorp, a California corporation, with offices
at 3380 South Higuera Street, San Luis Obispo, California 93401 (“Company”),
and Computershare Inc., a Delaware corporation and its wholly-owned subsidiary
Computershare Trust Company, N.A., a federally chartered, limited purpose trust
company (collectively, the “Warrant Agent” or individually, “Computershare”
and the “Trust Company,” respectively).

 

WHEREAS,
the Company is offering up to 15,184,020 shares of its common stock (“Common
Stock”) at the price of $5.00 per share, and, for each such share of Common
Stock purchased, a warrant to purchase one additional share of Common Stock at
$5.00 (“Warrant”) for a period of five years following the issuance of the
Warrants; and

 

WHEREAS,
the Company is offering subscription rights to its shareholders of record as of
5:00 p.m. Eastern time, on October 8, 2010, each Right consisting of
one share of Common Stock of the Company and one attached Warrant to purchase
one share of Common Stock at $5.00 per share for a period of five years
commencing on the issuance of the Warrants, subject to adjustment as described
herein; and

 

WHEREAS,
the Company has filed with the Securities and Exchange Commission a
Registration Statement on Form S-1, No. 333-169120 for the
registration, under the Securities Act of 1933, of the Rights, the Common Stock
issuable upon exercise of the Rights, the Warrants and the Common Stock issuable
upon exercise of the Warrants; and

 

WHEREAS,
following the closing of the rights offering, the Warrants will be transferable
separately from the Common Stock, although it is not anticipated that there
will initially be any trading market for the Warrants; and

 

WHEREAS,
the Company desires the Warrant Agent to act on behalf of the Company, and the
Warrant Agent is willing to so act, in connection with the issuance,
registration, transfer, exchange and exercise of the Warrants; and

 

WHEREAS,
the Company desires to provide for the form and provisions of the Warrants, the
terms upon which they shall be issued and exercised, and the respective rights,
limitation of rights, and immunities of the Company, the Warrant Agent, and the
holders of the Warrants; and

 

WHEREAS,
all acts and things have been done and performed which are necessary to make
the Warrants, when executed on behalf of the Company and countersigned by or on
behalf of the Warrant Agent, as provided herein, the valid, binding and legal
obligations of the Company, and to authorize the execution and delivery of this
Agreement.

 

NOW,
THEREFORE, in consideration of the mutual agreements herein contained, the
parties hereto agree as follows:

 

1.                                      Appointment of
Warrant Agent.  The Company
hereby appoints the Warrant Agent to act as agent for the Company for the
Warrants, and the Warrant Agent hereby accepts such appointment and agrees to
perform the same in accordance with the terms and conditions set forth in this
Agreement.

 

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2.                                      Warrants.

 

2.1                               Form of
Warrant.  Each Warrant shall be issued
in substantially the form of Exhibit A hereto, the provisions of
which are incorporated herein and shall be signed by or bear the facsimile
signature of the Chief Executive Officer or President of the Company and of the
Secretary or Assistant Secretary of the Company.  In the event the person whose facsimile
signature has been placed upon any Warrant shall have ceased to serve in the
capacity in which such person signed the Warrant before such Warrant is issued,
it may be issued with the same effect as if he or she had not ceased to be such
at the date of issuance.

 

2.2                               Effect of
Countersignature.  Unless and
until countersigned by the manual or facsimile signature of the Warrant Agent
pursuant to this Agreement, a Warrant shall be invalid and of no effect and may
not be exercised by the holder thereof.

 

2.3                               Registration.

 

2.3.1                     Warrant
Register.  The Warrant
Agent shall maintain books (“Warrant Register”), for the registration of
original issuance and the registration of transfer of the Warrants.  Upon the initial issuance of the Warrants,
the Warrant Agent shall issue and register the Warrants in the names of the
respective holders thereof in such denominations and otherwise in accordance
with instructions delivered to the Warrant Agent by the Company.

 

2.3.2                     Registered
Holder.  Prior to due presentment for
registration of transfer of any Warrant, the Company and the Warrant Agent may
deem and treat the person in whose name such Warrant shall be registered upon
the Warrant Register (“registered holder”), as the absolute owner of such
Warrant and of each Warrant represented thereby (notwithstanding any notation
of ownership or other writing on the Warrant Certificate made by anyone other
than the Company or the Warrant Agent), for the purpose of any exercise
thereof, and for all other purposes, and neither the Company nor the Warrant
Agent shall be affected by any notice to the contrary.

 

3.                                      Terms and
Exercise of Warrants.

 

3.1                               Warrant Price.  Each Warrant shall, when countersigned by the
Warrant Agent, entitle the registered holder thereof, subject to the provisions
of such Warrant and of this Warrant Agreement, to purchase from the Company the
number of shares of Common Stock stated therein, at the price of $5.00 per
whole share, subject to the adjustments provided in Section 4 hereof.  The term “Warrant Price” as used in this
Warrant Agreement refers to the price per share at which Common Stock may be
purchased at the time a Warrant is exercised.

 

3.2                               Duration of
Warrants.  A Warrant
may be exercised only during the period (“Exercise Period”) commencing on
9:00 a.m., Eastern time on the date of issuance of the Warrant and
terminating at 5:00 p.m., Eastern time on the five-year anniversary of the
date of issuance of the Warrant (“Expiration Date”).  Each Warrant not exercised on or before the
Expiration Date shall become void, and all rights thereunder and all rights in
respect thereof under this Agreement shall cease at the close of business on
the Expiration Date.

 

3.3                               Exercise of
Warrants.

 

3.3.1                     Payment.  Subject to the provisions of the Warrant and
this Warrant Agreement, a Warrant, when countersigned by the Warrant Agent, may
be exercised by the registered holder thereof by surrendering it, at the office
of the Warrant Agent, or at the office of any successor 

 

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Warrant
Agent, with the subscription form, as set forth in the Warrant, duly executed,
and by paying in full the Warrant Price for each full share of Common Stock as
to which the Warrant is exercised and any and all applicable taxes due in
connection with the exercise of the Warrant by certified check or bank draft
payable to the order of the Company (or as otherwise agreed to by the Company).

 

3.3.2                     Issuance of
Certificates.  As soon as
practicable after the exercise of any Warrant and the clearance of the funds in
payment of the Warrant Price, the Warrant Agent shall deliver to the registered
holder of such Warrant a certificate or certificates for the number of full
shares of Common Stock to which such registered holder is entitled, registered
in such name or names as may be directed by him, her or it, and if such Warrant
shall not have been exercised in full, a new countersigned Warrant for the
number of shares as to which such Warrant shall not have been exercised.  In no event will the Company be required to
net cash settle the warrant exercise.

 

3.3.3                                             Valid Issuance. 
All shares of Common Stock issued upon the proper exercise of a Warrant
in conformity with this Agreement shall be validly issued, fully paid and
non-assessable. The Company shall provide an opinion of counsel prior to the
issuance of securities hereunder, including, inter alia, the
Warrants and the Common Stock.  The
opinion shall state that all such securities, or the transactions in which they
are being offered or issued, as applicable, are:

 

(1) Registered, or subject to a valid exemption from registration,
under the Securities Act of 1933, as amended, and all appropriate state
securities law filings have been made with respect to such securities; and

 

(2) Validly
issued, fully paid and non-assessable.

 

3.3.4                     Date of
Issuance.  Each person
in whose name any such certificate for shares of Common Stock is issued shall
for all purposes be deemed to have become the holder of record of such shares
on the date on which the Warrant was surrendered and payment of the Warrant
Price was made, irrespective of the date of delivery of such certificate, except
that, if the date of such surrender and payment is a date when the stock
transfer books of the Company are closed, such person shall be deemed to have
become the holder of such shares at the close of business on the next
succeeding date on which the stock transfer books are open.

 

3.3.5
Bank Accounts. The Company acknowledges that the bank accounts
maintained by Computershare in connection with the services provided under this
Agreement will be in its name and that Computershare may receive investment
earnings in connection with the investment at Computershare’s risk and for its
benefit of funds held in those accounts from time to time.  Neither the Company nor the Holders will
receive interest on any deposits or funds tendered in payment of the Warrant
Price.

 

4.                                      Adjustments.

 

4.1                               Stock Dividends
— Split-Ups.  If, after
the date hereof, and subject to the provisions of Section 4.7, the number
of outstanding shares of Common Stock is increased by a stock dividend payable
in shares of Common Stock, or by a split-up of shares of Common Stock, or other
similar event, then, on the effective date of such stock dividend, split-up or
similar event, the number of shares of Common Stock issuable on exercise of
each Warrant shall be increased in proportion to such increase in shares of
Common Stock.

 

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4.2                               Aggregation of
Shares.  If, after the date hereof, and
subject to the provisions of Section 4.7, the number of outstanding shares
of Common Stock is decreased by a consolidation, combination, reverse stock
split or reclassification of shares of Common Stock or other similar event,
then, on the effective date of such consolidation, combination, reverse stock
split, reclassification or similar event, the number of shares of Common Stock
issuable on exercise of each Warrant shall be decreased in proportion to such
decrease in outstanding shares of Common Stock.

 

4.3                               Adjustments in
Exercise Price.  Whenever
the number of shares of Common Stock purchasable upon the exercise of the
Warrants is adjusted, as provided in Section 4.1 and 4.2 above, the
Warrant Price shall be adjusted (to the nearest cent) by multiplying such
Warrant Price immediately prior to such adjustment by a fraction (x) the
numerator of which shall be the number of shares of Common Stock purchasable
upon the exercise of the Warrants immediately prior to such adjustment, and (y) the
denominator of which shall be the number of shares of Common Stock so
purchasable immediately thereafter.

 

4.4                               Replacement of
Securities upon Reorganization, etc.  In case of any reclassification or
reorganization of the outstanding shares of Common Stock (other than a change
covered by Section 4.1 or 4.2 hereof or that solely affects the par value
of such shares of Common Stock), or in the case of any merger or consolidation
of the Company with or into another corporation (other than a consolidation or
merger in which the Company is the continuing corporation and that does not
result in any reclassification or reorganization of the outstanding shares of
Common Stock), or in the case of any sale or conveyance to another corporation
or entity of the assets or other property of the Company as an entirety or
substantially as an entirety, the Warrant holders shall thereafter have the
right to purchase and receive, upon the basis and upon the terms and conditions
specified in the Warrants and in lieu of the shares of Common Stock of the
Company immediately theretofore purchasable and receivable upon the exercise of
the rights represented thereby, the kind and amount of shares of stock or other
securities or property (including cash) receivable upon such reclassification,
reorganization, merger or consolidation, or upon a dissolution following any
such sale or transfer, that the Warrant holder would have received if such
Warrant holder had exercised his, her or its Warrant(s) immediately prior
to such event; and if any reclassification also results in a change in shares
of Common Stock covered by Section 4.1 or 4.2, then such adjustment shall
be made pursuant to Sections 4.1, 4.2, 4.3 and this Section 4.4.  The provisions of this Section 4.4 shall
similarly apply to successive reclassifications, reorganizations, mergers or
consolidations, sales or other transfers.

 

4.5                               Requirement to
Exercise Warrants. 
Notwithstanding Section 4.4 hereof, and in lieu thereof, the
Company may elect by written notice to the registered holder of the Warrant, to
require such registered holder to exercise all of the Warrants remaining
unexercised prior to any such reorganization, reclassification, consolidation,
merger or sale.  If the registered holder
of the Warrant shall not exercise all or any part of the Warrants remaining
unexercised prior to such event, such unexercised Warrants shall automatically
become null and void upon the occurrence of any such event, and of no further
force and effect.  The Common Stock
issued pursuant to any such exercise shall be deemed to be issued and
outstanding immediately prior to any such event, and shall be entitled to be
treated as any other issued and outstanding share of Common Stock in connection
with such event.  If an election is not
made by the Company pursuant to this subsection 4.5 in connection with any
such event, then the provisions of subsection 4.4 shall apply to such event.

 

4.6                               Notices of
Changes in Warrant.  Upon every
adjustment of the Warrant Price or the number of shares issuable upon exercise
of a Warrant, the Company shall give written notice thereof to the Warrant
Agent, which notice shall state the Warrant Price resulting from such
adjustment and the increase or decrease, if any, in the number of shares
purchasable at such price upon the exercise of a Warrant, setting forth in
reasonable detail the method of calculation and the facts upon which such 

 

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calculation
is based.  Upon the occurrence of any
event specified in Sections 4.1, 4.2, 4.3, 4.4, or 4.5, then, in any such
event, the Company shall give written notice to each Warrant holder, at the
last address set forth for such holder in the warrant register, of the record
date or the effective date of the event. 
Failure to give such notice, or any defect therein, shall not affect the
legality or validity of such event.

 

4.7                               No Fractional
Shares.  Notwithstanding any provision
contained in this Agreement to the contrary, the Company shall not issue
fractional shares upon exercise of Warrants. 
If, by reason of any adjustment made pursuant to this Section 4,
the holder of any Warrant would be entitled, upon the exercise of such Warrant,
to receive a fractional interest in a share, the Company shall, upon such
exercise, round up or down to the nearest whole number the number of shares of
Common Stock to be issued to the Warrant holder.

 

4.8                               Form of
Warrant.  The form of Warrant need not
be changed because of any adjustment pursuant to this Section 4, and
Warrants issued after such adjustment may state the same Warrant Price and the
same number of shares as is stated in the Warrants initially issued pursuant to
this Agreement.  However, the Company may
at any time in its sole discretion make any change in the form of Warrant that
the Company may deem appropriate and that does not affect the substance
thereof, and any Warrant thereafter issued or countersigned, whether in
exchange or substitution for an outstanding Warrant or otherwise, may be in the
form as so changed.

 

4.9                               Notice of
Certain Transactions.  In the
event that the Company shall propose to (a) offer the holders of its
Common Stock rights to subscribe for or to purchase any securities convertible
into shares of Common Stock or shares of stock of any class or any other
securities, rights or options, (b) issue any rights, options or warrants
entitling the holders of Common Stock to subscribe for shares of Common Stock
or (c) make a tender offer, redemption offer or exchange offer with
respect to the Common Stock, the Company shall send to the Warrant holders a
notice of such proposed action or offer. 
Such notice shall be mailed to the registered holders at their addresses
as they appear in the Warrant Register, which shall specify the record date for
the purposes of such dividend, distribution or rights, or the date such
issuance or event is to take place and the date of participation therein by the
holders of Common Stock, if any such date is to be fixed, and shall briefly
indicate the effect of such action on the Common Stock and on the number and
kind of any other shares of stock and on other property, if any, and the number
of shares of Common Stock and other property, if any, issuable upon exercise of
each Warrant and the Warrant Price after giving effect to any adjustment
pursuant to this Article 4 which would be required as a result of such
action.  Such notice shall be given as
promptly as practicable after the Board of Directors of the Company has
determined to take any such action and (x) in the case of any action
covered by clause (a) or (b) above at least 10 days prior to the
record date for determining the holders of the Common Stock for purposes of such
action or (y) in the case of any other such action at least 20 days
prior to the date of the taking of such proposed action or the date of
participation therein by the holders of Common Stock, whichever shall be the
earlier.

 

4.10                        Other Events.  If any event occurs as to which the foregoing
provisions of this Article 4 are not strictly applicable or, if strictly
applicable, would not, in the good faith judgment of the Board, fairly and
adequately protect the purchase rights of the registered holders of the
Warrants in accordance with the essential intent and principles of such
provisions, then the Board shall make such adjustments in the application of
such provisions, in accordance with such essential intent and principles, as
shall be reasonably necessary, in the good faith opinion of the Board, to
protect such purchase rights as aforesaid.

 

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5.                                      Transfer and
Exchange of Warrants.

 

5.1                               Registration of
Transfer.  The Warrant
Agent shall register the transfer, from time to time, of any outstanding
Warrant upon the Warrant Register, upon surrender of such Warrant for transfer.
The requirements for such transfer or for exchanges to be issued in a name
other than the registered holder shall include, inter alia,
a signature guarantee from an eligible guarantor institution participating in a
signature guarantee program approved by the Securities Transfer Association as
indicated in Section 6(i)(v) below, and any other reasonable evidence
of authority that may be required by the Warrant Agent.  Upon any such transfer, a new Warrant
representing an equal aggregate number of Warrants shall be issued and the old
Warrant shall be cancelled by the Warrant Agent.  The Warrants so cancelled shall be delivered
by the Warrant Agent to the Company from time to time upon request.

 

5.2                               Procedure for
Surrender of Warrants. 
Warrants may be surrendered to the Warrant Agent, together with a
written request for exchange or transfer, and thereupon the Warrant Agent shall
issue in exchange therefor one or more new Warrants as requested by the
registered holder of the Warrants so surrendered, representing an equal
aggregate number of Warrants.

 

5.3                               Fractional
Warrants.  The Warrant
Agent shall not be required to effect any registration of transfer or exchange
which will result in the issuance of a warrant certificate for a fraction of a
Warrant.

 

5.4                               Service Charges.  No service charge shall be made for any
exchange or registration of transfer of Warrants.

 

5.5                               Warrant
Execution and Countersignature.  The Warrant Agent is hereby authorized to
countersign and to deliver, in accordance with the terms of this Agreement, the
Warrants required to be issued pursuant to the provisions of this
Section 5, and the Company, whenever required by the Warrant Agent, will
supply the Warrant Agent with Warrants duly executed on behalf of the Company
for such purpose.

 

6.                                      Other
Provisions Relating to Rights of Holders of Warrants.

 

6.1                               No Rights as
Shareholder.  A Warrant
does not entitle the registered holder thereof to any of the rights of a
shareholder of the Company, including, without limitation, the right to receive
dividends, or other distributions, exercise any preemptive rights to vote or to
consent or to receive notice as shareholders in respect of the meetings of
shareholders or the election of directors of the Company or any other matter.

 

6.2                               Mutilated or
Missing Warrants. If any of the Warrants shall be mutilated, lost,
stolen or destroyed, the Company shall issue, and the Warrant Agent shall countersign
and deliver, in exchange and substitution for and upon cancellation of the
mutilated Warrant, or in lieu of and substitution for the Warrants lost, stolen
or destroyed, new Warrants of like tenor and representing an equivalent number
of Warrants, but only upon receipt of evidence reasonably satisfactory to the
Company and the Warrant Agent of the loss, theft or destruction of such
Warrants and an affidavit or the posting of an indemnity or bond, if requested
by either the Company or the Warrant Agent, also satisfactory to them.
Applicants for such substitute Warrants shall also comply with such other
reasonable regulations and pay such other reasonable charges as the Company or
the Warrant Agent may prescribe and as required by Section 8-405 of the
Uniform Commercial Code as in effect in the State of New York.

 

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6.3                               Reservation of
Common Stock.  The Company
shall at all times reserve and keep available a number of its authorized but
unissued shares of Common Stock that will be sufficient to permit the exercise
in full of all outstanding Warrants issued pursuant to this Agreement.

 

7.                                      Concerning the
Warrant Agent and Other Matters.

 

7.1                               Payment of
Taxes.  The Company will from time to
time promptly pay all taxes and charges that may be imposed upon the Company or
the Warrant Agent in respect of the issuance or delivery of shares of Common
Stock upon the exercise of Warrants, but the Company shall not be obligated to
pay any transfer taxes in respect of the Warrants or such shares.

 

7.2                               Resignation,
Consolidation, or Merger of Warrant Agent.

 

7.2.1                     Appointment of
Successor Warrant Agent.  The
Warrant Agent, or any successor to it hereafter appointed, may resign its
duties and be discharged from all further duties and liabilities hereunder
after giving sixty (60) days’ notice in writing to the Company.  If the office of the Warrant Agent becomes
vacant by resignation or incapacity to act or otherwise, the Company shall
appoint in writing a successor Warrant Agent in place of the Warrant Agent
before the expiration of such sixty (60) day notice.  Any successor Warrant Agent shall be a
corporation in good standing and authorized under the laws of its jurisdiction
of incorporation to exercise corporate trust powers and subject to supervision
or examination by federal or state authority. 
After appointment, any successor Warrant Agent shall be vested with all
the authority, powers, rights, immunities, duties, and obligations of its
predecessor Warrant Agent with like effect as if originally named as Warrant
Agent hereunder, without any further act or deed; but if for any reason it
becomes necessary or appropriate, the predecessor Warrant Agent shall execute
and deliver, at the expense of the Company, an instrument transferring to such
successor Warrant Agent all the authority, powers, and rights of such
predecessor Warrant Agent hereunder; and upon request of any successor Warrant
Agent the Company shall make, execute, acknowledge, and deliver any and all
instruments in writing for more fully and effectually vesting in and confirming
to such successor Warrant Agent all such authority, powers, rights, immunities,
duties, and obligations.

 

7.2.2                     Notice of
Successor Warrant Agent.  In
the event a successor Warrant Agent shall be appointed, the Company shall give
notice thereof to the predecessor Warrant Agent and the transfer agent for the
Common Stock not later than the effective date of any such appointment.

 

7.2.3                     Merger or
Consolidation of Warrant Agent.  Any corporation into which the Warrant Agent
may be merged or with which it may be consolidated or any corporation resulting
from any merger or consolidation to which the Warrant Agent shall be a party
shall be the successor Warrant Agent under this Agreement without any further
act.

 

7.3                               Fees and
Expenses of Warrant Agent.

 

7.3.1                     Remuneration.  The Company agrees to pay the Warrant Agent
reasonable remuneration for its services as such Warrant Agent hereunder and
will reimburse the Warrant Agent upon demand for all expenditures that the
Warrant Agent may reasonably incur in the execution of its duties hereunder.

 

7.3.2                     Further
Assurances.  The Company
agrees to perform, execute, acknowledge, and deliver or cause to be performed,
executed, acknowledged, and delivered all such further and other acts,
instruments, and assurances as may reasonably be required by the Warrant Agent
for the carrying out or performing of the provisions of this Agreement.

 

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7.4                                 Liability of
Warrant Agent.

 

7.4.1                        Reliance on
Company Statement.  Whenever in
the performance of its duties under this Warrant Agreement, the Warrant Agent
shall deem it necessary or desirable that any fact or matter be proved or
established by the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and
established by a statement signed by the Chief Executive Officer or President
of the Company and delivered to the Warrant Agent.  The Warrant Agent may rely upon such
statement for any action taken or suffered in good faith by it pursuant to the
provisions of this Agreement.

 

7.4.2                        Indemnity.  The Warrant Agent shall be liable hereunder
only for its own negligence, willful misconduct or bad faith.  Notwithstanding anything contained herein to
the contrary, the Warrant Agent’s aggregate liability during any term of this
Agreement with respect to, arising from, or arising in connection with this
Agreement, or from all services provided or omitted to be provided under this
Agreement, whether in contract, or in tort, or otherwise, is limited to, and
shall not exceed, the amounts paid hereunder by the Company to Warrant Agent as
fees and charges, but not including reimbursable expenses. The Company agrees
to indemnify the Warrant Agent and save it harmless against any and all
liabilities, including judgments, costs and reasonable counsel fees, for
anything done or omitted by the Warrant Agent in the execution of this
Agreement, including, but not by way of limitation, any action taken or omitted
to be taken by the Warrant Agent hereunder in reliance on instructions from the
Company, except as a result of the Warrant Agent’s negligence, willful
misconduct, or bad faith.

 

7.4.3                        Exclusions.  The Warrant Agent shall have no
responsibility with respect to the validity of this Agreement or with respect
to the validity or execution of any Warrant (except its countersignature thereof);
nor shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Warrant; nor shall it be
responsible to make any adjustments required under the provisions of
Section 4 hereof or responsible for the manner, method, or amount of any
such adjustment or the ascertaining of the existence of facts that would
require any such adjustment; nor shall it by any act hereunder be deemed to
make any representation or warranty as to the authorization or reservation of
any shares of Common Stock to be issued pursuant to this Agreement or any
Warrant or as to whether any shares of Common Stock will, when issued, be valid
and fully paid and non-assessable.

 

7.5                                 Acceptance of
Agency.  The Warrant Agent hereby accepts
the agency established by this Agreement and agrees to perform the same upon
the terms and conditions herein set forth and among other things, shall account
promptly to the Company with respect to Warrants exercised and concurrently
account for, and pay to the Company, all moneys received by the Warrant Agent
for the purchase of shares of Common Stock through the exercise of Warrants.

 

8.                                       Miscellaneous
Provisions.

 

8.1                                 Successors.  All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Warrant Agent shall bind
and inure to the benefit of their respective successors and assigns.

 

8.2                                 Notices.  Any notice, statement or demand authorized by
this Agreement to be given or made by the Warrant Agent or by the holder of any
Warrant to or on the Company shall be sufficiently given when so delivered, if
by hand or overnight delivery or if sent by certified mail or private courier
service, within three days after deposit of such notice, postage prepaid,
addressed (until another address is filed in writing by the Company with the
Warrant Agent), as follows:

 

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Mission
Community Bancorp

3380
South Higuera Street

San Luis Obispo, CA 93401

Attn:  Chief Executive Officer

 

Any
notice, statement or demand authorized by this Agreement to be given or made by
the holder of any Warrant or by the Company to or on the Warrant Agent shall be
sufficiently given when so delivered, if by hand or overnight delivery or if
sent by certified mail or private courier service, within three days after
deposit of such notice, postage prepaid, addressed (until another address is
filed in writing by the Warrant Agent with the Company), as follows:

 

Computershare
Trust Company, N.A.

Attn:  Corporate Actions

250
Royall Street

Canton,
MA 02021

 

8.3                                 Applicable law.  The validity, interpretation, and performance
of this Agreement and of the Warrants shall be governed in all respects by the
laws of the State of New York, without giving effect to conflicts of law
principles that would result in the application of the substantive laws of
another jurisdiction.  The Company hereby
agrees that any action, proceeding or claim against it arising out of or
relating in any way to this Agreement shall be brought and enforced in the
courts of the State of New York or a United States District Court located in
New York, and irrevocably submits to such jurisdiction, which jurisdiction
shall be exclusive.  The Company hereby
waives any objection to such exclusive jurisdiction and that such courts
represent an inconvenient forum.  Any
such process or summons to be served upon the Company may be served by
transmitting a copy thereof by registered or certified mail, return receipt
requested, postage prepaid, addressed to it at the address set forth in
Section 8.2 hereof.  Such mailing
shall be deemed personal service and shall be legal and binding upon the
Company in any action, proceeding or claim.

 

8.4                                 Persons Having
Rights under this Agreement.  Nothing in this Agreement expressed and
nothing that may be implied from any of the provisions hereof is intended, or
shall be construed, to confer upon, or give to, any person or corporation other
than the parties hereto of the Warrants any right, remedy, or claim under or by
reason of this Agreement or of any covenant, condition, stipulation, promise,
or agreement hereof.  All covenants,
conditions, stipulations, promises, and agreements contained in this Agreement
shall be for the sole and exclusive benefit of the parties hereto and their
successors and assigns and of the registered holders of the Warrants.

 

8.5                                 Examination of
the Warrant Agreement.  A
copy of this Agreement shall be available at all reasonable times at the
principal office of the Warrant Agent for inspection by the registered holder
of any Warrant.  The Warrant Agent may
require any such holder to submit his Warrant for inspection by it.

 

8.6                                 Counterparts.  This Agreement may be executed in any number
of original or facsimile counterparts and each of such counterparts shall for
all purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.

 

8.7                                 Effect of
Headings.  The Section headings
herein are for convenience only and are not part of this Agreement and shall
not affect the interpretation thereof.

 

9

 

8.8                                 Amendments.  This Agreement may be amended by the parties
hereto without the consent of any registered holder for the purpose of curing
any ambiguity, or of curing, correcting or supplementing any defective
provision contained herein or adding or changing any other provisions with
respect to matters or questions arising under this Agreement as the parties may
deem necessary or desirable and that the parties deem shall not adversely
affect the interest of the registered holders. 
All other modifications or amendments, including any amendment to
increase the Warrant Price or shorten the Exercise Period, shall require the written
consent of the registered holders of the then outstanding Warrants exercisable
for a majority of the shares of Common Stock issuable upon exercise of the
Warrants.

 

8.9                                 Severability . This
Agreement shall be deemed severable, and the invalidity or unenforceability of
any term or provision hereof shall not affect the validity or enforceability of
this Agreement or of any other term or provision hereof.  Furthermore, in lieu of any such invalid or
unenforceable term or provision, the parties hereto intend that there shall be
added as a part of this Agreement a provision as similar in terms to such
invalid or unenforceable provision as may be possible and be valid and
enforceable.

 

8.10                           Survival. All provisions
regarding indemnification, warranty, liability and limits thereon, and
confidentiality and protection of proprietary rights and trade secrets shall
survive the termination or expiration of this Agreement.

 

8.11                           Confidentiality. The Warrant
Agent and the Company agree that all books, records, information and data
pertaining to the business of the other party which are exchanged or received
pursuant to the negotiation or the carrying out of this Agreement including the
fees for services set forth in the attached schedule shall remain confidential,
and shall not be voluntarily disclosed to any other person, except as may be
required by law.

 

10

 

IN
WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as
of the day and year first above written.

 

	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  MISSION
  COMMUNITY BANCORP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Anita
  M. Robinson

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WARRANT
  AGENT:

  
	
   

  	
   

  
	
   

  	
  COMPUTERSHARE
  TRUST COMPANY, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Thomas
  Borbely

  
	
   

  	
  Title:

  	
  Manager,
  Corporate Actions

  
					

 

11

 

	
  Exhibit A

  	
   

  
	
  NUMBER

  	
  WARRANTS

  

 

(SEE REVERSE SIDE FOR LEGEND)

THIS WARRANT WILL BE VOID IF NOT EXERCISED PRIOR TO 5:00 P.M.

EASTERN TIME,
                                    ,
2015

 

CUSIP

 

MISSION COMMUNITY BANCORP

 

WARRANT

 

THIS
CERTIFIES THAT, for value received
                                                                      
is the registered holder of a Warrant or Warrants expiring                                 ,
2015 (the “Warrant”) to purchase one fully paid and non-assessable share of
Common Stock, no par value (“Shares”), of Mission Community Bancorp, a
California corporation (the “Company”), for each Warrant evidenced by this
Warrant Certificate.  The Warrant
entitles the holder thereof to purchase from the Company, commencing
                              ,
2010, such number of Shares of the Company at the price of $5.00 per share,
upon surrender of this Warrant Certificate and payment of the Warrant Price at
the office or agency of the Warrant Agent, Computershare Trust Company, N.A.,
but subject to any conditions set forth herein and in the Warrant Agreement
between the Company and Computershare Trust Company, N.A. (as such agreement
may be amended from time to time, the “Warrant Agreement”).    In no event will the Company be required to
net cash settle the warrant exercise. 
The Warrant Agreement provides that upon the occurrence of certain
events the Warrant Price and the number of Warrant Shares purchasable
hereunder, set forth on the face hereof, may, subject to certain conditions, be
adjusted.  The term Warrant Price as used
in this Warrant Certificate refers to the price per Share at which Shares may
be purchased at the time the Warrant is exercised.

 

No
fraction of a Share will be issued upon any exercise of a Warrant.  If the holder of a Warrant would be entitled
to receive a fraction of a Share upon any exercise of a Warrant, the Company
shall, upon such exercise, round up or down to the nearest whole number the
number of Shares to be issued to such holder. 
Upon any exercise of the Warrant for less than the total number of full
Shares provided for herein, there shall be issued to the registered holder
hereof or the registered holder’s assignee a new Warrant Certificate covering
the number of Shares for which the Warrant has not been exercised.

 

Warrant
Certificates, when surrendered at the office or agency of the Warrant Agent by
the registered holder hereof in person or by attorney duly authorized in
writing, may be exchanged in the manner and subject to the limitations provided
in the Warrant Agreement, but without payment of any service charge, for
another Warrant Certificate or Warrant Certificates of like tenor and
evidencing in the aggregate a like number of Warrants.  Upon due presentment for registration of
transfer of the Warrant Certificate at the office or agency of the Warrant
Agent, a new Warrant Certificate or Warrant Certificates of like tenor and
evidencing in the aggregate a like number of Warrants shall be issued to the
transferee in exchange for this Warrant Certificate, subject to the limitations
provided in the Warrant Agreement, without charge except for any applicable tax
or other governmental charge.

 

The
Company and the Warrant Agent may deem and treat the registered holder as the
absolute owner of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, of any distribution to the registered holder, and for all
other purposes, and neither the Company nor the Warrant Agent shall be affected
by any notice to the contrary.  This
Warrant does not entitle the registered holder to any of the rights of a
shareholder of the Company.

 

	
   

  	
   

  	
  MISSION
  COMMUNITY BANCORP

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
  Secretary

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Chief
  Executive Officer

  

 

12

 

SUBSCRIPTION FORM

 

To Be Executed by the Registered Holder in Order to Exercise Warrants

 

The
undersigned Registered Holder irrevocably elects to exercise
                          
Warrants represented by this Warrant Certificate, and to purchase the shares of
Common Stock issuable upon the exercise of such Warrants, and requests that
Certificates for such shares shall be issued in the name of

 

 

	
  (PLEASE TYPE OR PRINT NAME AND ADDRESS)

  
	
   

  
	
   

  
	
  (SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER)

  
	
   

  
	
  and
  be delivered to

  	
   

  
	
  (PLEASE PRINT OR TYPE NAME AND ADDRESS

  

 

and,
if such number of Warrants shall not be all the Warrants evidenced by this
Warrant Certificate, that a new Warrant Certificate for the balance of such
Warrants be registered in the name of, and delivered to, the Registered Holder
at the address stated below:

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (SIGNATURE)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ADDRESS)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (SOCIAL
  SECURITY OR TAX IDENTIFICATION NUMBER)

  

 

ASSIGNMENT

To Be Executed by the Registered Holder in Order to Assign Warrants

 

For
Value Received,
                                                  
hereby sells, assigns, and transfers unto

 

 

	
  (PLEASE TYPE OR PRINT NAME AND ADDRESS)

  
	
   

  
	
   

  
	
  (SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER)

  
	
   

  
	
  and
  be delivered to

  	
   

  
	
  (PLEASE PRINT OR TYPE NAME AND ADDRESS

  

 

of
the Warrants represented by this Warrant Certificate, and hereby irrevocably
constitutes and appoints
                                                      
Attorney to transfer this Warrant Certificate on the books of the Company, with
full power of substitution in the premises.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (SIGNATURE)

  

 

THE
SIGNATURE TO THE ASSIGNMENT OF THIS WARRANT MUST CORRESPOND TO THE NAME WRITTEN
UPON THE FACE OF THIS WARRANT IN EVERY PARTICULAR, WITHOUT ALTERATION OR ANY
CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A COMMERCIAL BANK OR TRUST

 

13

 

COMPANY
OR A MEMBER FIRM OF THE AMERICAN STOCK EXCHANGE, NEW YORK STOCK EXCHANGE,
PACIFIC STOCK EXCHANGE OR CHICAGO STOCK EXCHANGE.

 

14Exhibit
10.1

 

	
   

  

 

 

CREDIT AGREEMENT

 

among

 

CINTAS CORPORATION NO. 2,

as Borrower,

 

THE LENDERS NAMED HEREIN,

as Lenders,

 

and

 

KEYBANK NATIONAL ASSOCIATION,

as Joint Lead Arranger and Administrative Agent,

 

BANC ONE CAPITAL MARKETS, INC.,

as Joint Lead Arranger,

 

BANK ONE, NA,

as Syndication Agent,

 

and

 

FIFTH THIRD BANK,

US BANK NATIONAL ASSOCIATION,

and

THE BANK OF TOKYO-MITSUBISHI, LTD.,

as Co-Documentation Agents

 

 

dated as of

May 28, 2004

 

 

 

	
   

  

 

 

TABLE OF
CONTENTS

 

	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE I.  DEFINITIONS

  	
  1

  
	
  Section 1.1. Definitions

  	
  1

  
	
  Section 1.2. Accounting
  Terms

  	
  18

  
	
  Section 1.3. Terms Generally

  	
  18

  
	
   

  	
   

  
	
  ARTICLE II. AMOUNT AND TERMS OF CREDIT

  	
  18

  
	
  Section 2.1. Amount and
  Nature of Credit

  	
  18

  
	
  Section 2.2. Revolving
  Credit

  	
  19

  
	
  Section 2.3. Interest

  	
  24

  
	
  Section 2.4. Evidence of
  Indebtedness

  	
  25

  
	
  Section 2.5. Notice of
  Credit Event; Funding of Loans

  	
  25

  
	
  Section 2.6. Payment on
  Loans and Other Obligations

  	
  26

  
	
  Section 2.7. Prepayment

  	
  27

  
	
  Section 2.8. Facility and
  Other Fees

  	
  27

  
	
  Section 2.9. Modification of
  Commitment

  	
  28

  
	
  Section 2.10. Computation of
  Interest and Fees

  	
  29

  
	
  Section 2.11. Mandatory
  Payment

  	
  29

  
	
  Section 2.12. Extension of
  Commitment

  	
  29

  
	
   

  	
   

  
	
  ARTICLE III. ADDITIONAL PROVISIONS RELATING TO
  EURODOLLAR LOANS; INCREASED CAPITAL; TAXES

  	
  30

  
	
  Section 3.1. Requirements of
  Law

  	
  30

  
	
  Section 3.2. Taxes

  	
  31

  
	
  Section 3.3. Funding Losses

  	
  32

  
	
  Section 3.4. Eurodollar Rate
  Lending Unlawful; Inability to Determine Rate

  	
  33

  
	
   

  	
   

  
	
  ARTICLE IV. CONDITIONS PRECEDENT

  	
  34

  
	
  Section 4.1. Conditions to
  Each Credit Event

  	
  34

  
	
  Section 4.2. Conditions to
  the First Credit Event

  	
  34

  
	
   

  	
   

  
	
  ARTICLE V. COVENANTS

  	
  36

  
	
  Section 5.1. Insurance

  	
  36

  
	
  Section 5.2. Money
  Obligations

  	
  36

  
	
  Section 5.3. Financial
  Statements and Information

  	
  36

  
	
  Section 5.4. Financial
  Records

  	
  37

  
	
  Section 5.5. Franchises;
  Change in Business

  	
  37

  
	
  Section 5.6.
  ERISA Compliance

  	
  37

  
	
  Section 5.7. Financial
  Covenants

  	
  38

  
	
  Section 5.8. Borrowing

  	
  38

  
	
  Section 5.9. Liens

  	
  38

  
	
  Section 5.10. Regulations T,
  U and X

  	
  39

  
	
  Section 5.11. Investments
  and Loans

  	
  39

  
	
  Section 5.12. Merger and
  Sale of Assets

  	
  40

  
	
  Section 5.13. Acquisitions

  	
  40

  
	
  Section 5.14. Notice

  	
  40

  
	
  Section 5.15.
  Environmental Compliance

  	
  41

  
	
  Section 5.16.
  Affiliate Transactions

  	
  41

  

 

i

 

TABLE OF
CONTENTS

 

	
   

  	
  Page

  
	
   

  	
   

  
	
  Section 5.17. Use of
  Proceeds

  	
  41

  
	
  Section 5.18. Subsidiary
  Guaranties

  	
  41

  
	
  Section 5.19. Restrictive
  Agreements

  	
  43

  
	
  Section 5.20.
  Pari Passu Ranking

  	
  43

  
	
  Section 5.21. Amendment of
  Organizational Documents

  	
  43

  
	
   

  	
   

  
	
  ARTICLE VI. REPRESENTATIONS AND WARRANTIES

  	
  43

  
	
  Section 6.1. Corporate
  Existence; Subsidiaries; Foreign Qualification

  	
  43

  
	
  Section 6.2. Corporate
  Authority

  	
  43

  
	
  Section 6.3. Compliance with
  Laws and Contracts

  	
  44

  
	
  Section 6.4. Litigation and
  Administrative Proceedings

  	
  44

  
	
  Section 6.5. Title to Assets

  	
  44

  
	
  Section 6.7. Tax Returns

  	
  44

  
	
  Section 6.8. Environmental
  Matters

  	
  45

  
	
  Section 6.9. Continued
  Business

  	
  45

  
	
  Section 6.10. Employee
  Benefits Plans

  	
  45

  
	
  Section 6.11. Consents or
  Approvals

  	
  46

  
	
  Section 6.12. Solvency

  	
  46

  
	
  Section 6.13. Financial
  Statements

  	
  46

  
	
  Section 6.14. Regulations T,
  U and X

  	
  46

  
	
  Section 6.15. Material
  Agreements

  	
  47

  
	
  Section 6.16. Intellectual
  Property

  	
  47

  
	
  Section 6.17. Insurance

  	
  47

  
	
  Section 6.18. Accurate and
  Complete Statements

  	
  47

  
	
  Section 6.19. Investment
  Company; Holding Company

  	
  47

  
	
  Section 6.20. Defaults

  	
  47

  
	
   

  	
   

  
	
  ARTICLE VII. EVENTS OF DEFAULT

  	
  47

  
	
  Section 7.1. Payments

  	
  47

  
	
  Section 7.2. Special
  Covenants

  	
  47

  
	
  Section 7.3. Other Covenants

  	
  48

  
	
  Section 7.4. Representations
  and Warranties

  	
  48

  
	
  Section 7.5. Cross Default

  	
  48

  
	
  Section 7.6. ERISA Default

  	
  48

  
	
  Section 7.7. Change in
  Control

  	
  48

  
	
  Section 7.8. Money Judgment

  	
  48

  
	
  Section 7.9. Validity of
  Loan Documents

  	
  48

  
	
  Section 7.10. Solvency

  	
  48

  
	
   

  	
   

  
	
  ARTICLE VIII. REMEDIES UPON DEFAULT

  	
  49

  
	
  Section 8.1. Optional
  Defaults

  	
  49

  
	
  Section 8.2. Automatic
  Defaults

  	
  49

  
	
  Section 8.3. Letters of
  Credit

  	
  50

  
	
  Section 8.4. Offsets

  	
  50

  
	
  Section 8.5. Equalization
  Provision

  	
  50

  
	
  Section 8.6. Other Remedies

  	
  51

  

 

ii

 

TABLE OF
CONTENTS

 

	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE IX. THE AGENT

  	
  51

  
	
  Section 9.1. Appointment and
  Authorization

  	
  51

  
	
  Section 9.2. Note Holders

  	
  51

  
	
  Section 9.3. Consultation
  With Counsel

  	
  51

  
	
  Section 9.4. Documents

  	
  51

  
	
  Section 9.5. Agent and
  Affiliates

  	
  52

  
	
  Section 9.6. Knowledge of
  Default

  	
  52

  
	
  Section 9.7. Action by Agent

  	
  52

  
	
  Section 9.8. Notice of
  Default

  	
  52

  
	
  Section 9.9. Indemnification
  of Agent

  	
  52

  
	
  Section 9.10. Successor
  Agent

  	
  53

  
	
  Section 9.11. Other Agents

  	
  53

  
	
   

  	
   

  
	
  ARTICLE X. MISCELLANEOUS

  	
  53

  
	
  Section 10.1. Lenders’
  Independent Investigation

  	
  53

  
	
  Section 10.2. No Waiver;
  Cumulative Remedies

  	
  53

  
	
  Section 10.3. Amendments,
  Consents

  	
  54

  
	
  Section 10.4. Notices

  	
  54

  
	
  Section 10.5. Costs,
  Expenses and Taxes

  	
  54

  
	
  Section 10.6.
  Indemnification

  	
  55

  
	
  Section 10.7. Obligations
  Several; No Fiduciary Obligations

  	
  55

  
	
  Section 10.8. Execution in
  Counterparts

  	
  55

  
	
  Section 10.9. Binding
  Effect; Borrower’s Assignment

  	
  55

  
	
  Section 10.10. Lender
  Assignments

  	
  56

  
	
  Section 10.11. Sale of
  Participations

  	
  57

  
	
  Section 10.12. Severability
  of Provisions; Captions; Attachments

  	
  58

  
	
  Section 10.13. Investment
  Purpose

  	
  58

  
	
  Section 10.14. Entire
  Agreement

  	
  58

  
	
  Section 10.15. Legal
  Representation of Parties

  	
  59

  
	
  Section 10.16. Governing
  Law; Submission to Jurisdiction

  	
  59

  
	
  Section 10.17. Jury Trial
  Waiver

  	
  1

  
	
   

  	
   

  
	
  Exhibit A

  	
  Form of
  Revolving Credit Note

  	
   

  
	
  Exhibit B

  	
  Form of
  Swing Line Note

  	
   

  
	
  Exhibit C

  	
  Form of
  Notice of Loan

  	
   

  
	
  Exhibit D

  	
  Form of
  Compliance Certificate

  	
   

  
	
  Exhibit E

  	
  Form of
  Assignment and Acceptance Agreement

  	
   

  
	
  Exhibit F

  	
  Form of
  Request for Extension

  	
   

  
	
  Exhibit G

  	
  Form of
  Parent Guaranty of Payment

  	
   

  
	
  Exhibit H

  	
  Form of
  Subsidiary Guaranty of Payment

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule
  1

  	
  Commitments
  of Lenders

  	
   

  
	
  Schedule
  2

  	
  Guarantors
  of Payment

  	
   

  
	
  Schedule
  2.2

  	
  Existing
  Letters of Credit

  	
   

  
	
  Schedule
  5.8

  	
  Indebtedness

  	
   

  
	
  Schedule
  5.9

  	
  Liens

  	
   

  

 

iii

 

TABLE OF
CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Schedule
  6.1

  	
  Corporate
  Existence; Subsidiaries; Foreign Qualification

  	
   

  
	
  Schedule
  6.4

  	
  Litigation
  and Administrative Proceedings

  	
   

  

 

iv

 

This
CREDIT AGREEMENT (as the same may from time to time be amended, restated or
otherwise modified, this “Agreement”) is made effective as of the 28th day of May, 2004, among:

 

(a)                                  CINTAS
CORPORATION NO. 2, a Nevada corporation (“Borrower”);

 

(b)                                 the lenders
listed on Schedule 1 hereto and each other Eligible Transferee, as
hereinafter defined, that becomes a party hereto pursuant to Section 10.10
hereof (collectively, the “Lenders” and, individually, each a “Lender”);

 

(c)                                  KEYBANK
NATIONAL ASSOCIATION, as joint lead arranger and administrative agent for the
Lenders under this Agreement (“Agent”);

 

(d)                                 BANC ONE
CAPITAL MARKETS, INC., as joint lead arranger under this Agreement (“Joint
Lead Arranger”);

 

(e)                                  BANK ONE, NA,
as syndication agent under this Agreement (“Syndication Agent”);

 

(f)                                    FIFTH THIRD
BANK, as co-documentation agent under this Agreement (“Co-Documentation Agent”);

 

(g)                                 US BANK
NATIONAL ASSOCIATION, as co-documentation agent under this Agreement (“Co-Documentation
Agent”); and

 

(f)                                    THE BANK OF TOKYO-MITSUBISHI, LTD., as
co-documentation agent under this Agreement (“Co-Documentation Agent”).

 

WITNESSETH:

 

WHEREAS,
Borrower, Agent and the Lenders desire to contract for the establishment of
credits in the aggregate principal amounts hereinafter set forth, to be made
available to Borrower upon the terms and subject to the conditions hereinafter
set forth;

 

NOW,
THEREFORE, it is mutually agreed as follows:

 

ARTICLE I. 
DEFINITIONS

 

Section 1.1.  Definitions.  As used in this Agreement, the following
terms shall have the following meanings:

 

“Acquisition”
shall mean any transaction or series of related transactions for the purpose of
or resulting, directly or indirectly, in (a) the acquisition of all or
substantially all of the assets of any Person (other than a Company), or any
business or division of any Person (other than a

 

 

Company),
(b) the acquisition of in excess of fifty percent (50%) of the stock (or
other equity interest) of any Person (other than a Company), or (c) the
acquisition of another Person (other than a Company) by a merger, amalgamation
or consolidation or any other combination with such Person.

 

“Additional
Commitment” shall mean that term as defined in Section 2.9(b) hereof.

 

“Additional
Lender” shall mean an Eligible Transferee that shall become a Lender during the
Commitment Increase Period pursuant to Section 2.9(b) hereof.

 

“Additional
Lender Assumption Agreement” shall mean an additional lender assumption
agreement, in form and substance satisfactory to Agent, wherein an Additional
Lender shall become a Lender.

 

“Additional
Lender Assumption Effective Date” shall mean that term as defined in Section 2.9(b) hereof.

 

“Advantage”
shall mean any payment (whether made voluntarily or involuntarily, by offset of
any deposit or other indebtedness or otherwise) received by any Lender in
respect of the Obligations, if such payment results in that Lender having less
than its pro rata share of the Obligations then outstanding, than was the case
immediately before such payment.

 

“Affiliate”
shall mean any Person, directly or indirectly, controlling, controlled by or
under common control with a Company and “control” (including the correlative
meanings, the terms “controlling”, “controlled by” and “under common control
with”) shall mean the power, directly or indirectly, to direct or cause the
direction of the management and policies of a Company, whether through the
ownership of voting securities, by contract or otherwise.

 

“Agent
Fee Letter” shall mean the Agent Fee Letter between Borrower and Agent, dated
as of the Closing Date, as the same may from time to time be amended, restated
or otherwise modified.

 

“Applicable
Facility Fee Rate” shall mean:

 

(a)                                  for the period
from the Closing Date until the first Margin Adjustment Date after the Closing
Date, eight basis points; and

 

(b)                                 commencing on
the first Margin Adjustment Date after the Closing Date and on each Margin
Adjustment Date thereafter, the number of basis points set forth in the
following matrix, based upon the S&P Rating or the Moody’s Rating in effect
at such time:

 

	
  Level

  	
   

  	
  S&P Rating

  	
   

  	
  Moody’s Rating

  	
   

  	
  Applicable Basis Points for

  the Facility Fee

  
	
  1

  	
   

  	
  A+ or higher

  	
   

  	
  A1 or higher

  	
   

  	
  7.00

  
	
  2

  	
   

  	
  A

  	
   

  	
  A2

  	
   

  	
  8.00

  
	
  3

  	
   

  	
  A-

  	
   

  	
  A3

  	
   

  	
  10.00

  
	
  4

  	
   

  	
  BBB+

  	
   

  	
  Baa1

  	
   

  	
  12.50

  
	
  5

  	
   

  	
  less than BBB+

  	
   

  	
  less than Baa1

  	
   

  	
  15.00

  

 

2

 

provided
that, notwithstanding anything above to the contrary, (i) if the S&P
Rating and the Moody’s Rating shall at any time be at different Levels in the
above chart, and the difference in Levels is only one Level, then the
Applicable Facility Fee Rate shall be based upon the higher of the applicable
S&P Rating and Moody’s Rating, (ii) if the S&P Rating and the
Moody’s Rating shall at any time be at different Levels in the above chart, and
such difference is two Levels or more, then the Applicable Facility Fee Rate
shall be based upon the Level immediately below the Level determined based on
the higher of the S&P Rating and the Moody’s Rating, (iii) if only one
of the two ratings (S&P Rating or Moody’s Rating) shall exist, then the
existing rating shall determine the Level of the Applicable Facility Fee Rate, and
(iv) if neither the S&P Rating nor the Moody’s Rating shall exist,
then the Applicable Facility Fee Rate shall be set at Level 5.  Changes to the Applicable Facility Fee Rate
shall be immediately effective on each Margin Adjustment Date.  The above matrix does not modify or waive, in
any respect, the rights of Agent and the Lenders to charge the Default Rate, or
the rights and remedies of Agent and the Lenders pursuant to Articles VII and
VIII hereof.

 

“Applicable
Margin” shall mean:

 

(a)                                  for the period
from the Closing Date until the first Margin Adjustment Date after the Closing
Date, twenty-seven (27) basis points for Eurodollar Loans; and

 

(b)                                 commencing on
the first Margin Adjustment Date after the Closing Date and on each Margin
Adjustment Date thereafter, the number of basis points set forth in the
following matrix, based upon the S&P Rating or the Moody’s Rating in effect
at such time:

 

	
  Level

  	
   

  	
  S&P Rating

  	
   

  	
  Moody’s Rating

  	
   

  	
  Applicable Basis Points for

  Eurodollar Loans

  
	
  1

  	
   

  	
  A+ or higher

  	
   

  	
  A1 or higher

  	
   

  	
  23.00

  
	
  2

  	
   

  	
  A

  	
   

  	
  A2

  	
   

  	
  27.00

  
	
  3

  	
   

  	
  A-

  	
   

  	
  A3

  	
   

  	
  30.00

  
	
  4

  	
   

  	
  BBB+

  	
   

  	
  Baa1

  	
   

  	
  37.50

  
	
  5

  	
   

  	
  less than BBB+

  	
   

  	
  less than Baa1

  	
   

  	
  60.00

  

 

provided
that, notwithstanding anything above to the contrary, (i) if the S&P
Rating and the Moody’s Rating shall at any time be at different Levels in the
above chart, and the difference in Levels is only one Level, then the
Applicable Margin shall be based upon the higher of the applicable S&P
Rating and Moody’s Rating, (ii) if the S&P Rating and the Moody’s
Rating shall at any time be at different Levels in the above chart, and such
difference is two Levels or more, then the Applicable Margin shall be based
upon the Level immediately below the Level 

 

3

 

determined
based on the higher of the S&P Rating and the Moody’s Rating, (iii) if
only one of the two ratings (S&P Rating or Moody’s Rating) shall exist,
then the existing rating shall determine the Level of the Applicable Margin,
and (iv) if neither the S&P Rating nor the Moody’s Rating shall exist,
then the Applicable Margin shall be set at Level 5.  Changes to the Applicable Margin shall be
immediately effective on each Margin Adjustment Date.  The above matrix does not modify or waive, in
any respect, the rights of Agent and the Lenders to charge the Default Rate, or
the rights and remedies of Agent and the Lenders pursuant to Articles VII and
VIII hereof.

 

“Applicable
Utilization Fee Rate” shall mean:

 

(a)                                  for the period
from the Closing Date until the first Margin Adjustment Date after the Closing
Date, five basis points; and

 

(b)                                 commencing on
the first Margin Adjustment Date after the Closing Date and on each Margin
Adjustment Date thereafter, the number of basis points set forth in the
following matrix, based upon the S&P Rating or the Moody’s Rating in effect
at such time:

 

	
  Level

  	
   

  	
  S&P Rating

  	
   

  	
  Moody’s Rating

  	
   

  	
  Applicable Basis Points for

  the Utilization Fee

  
	
  1

  	
   

  	
  A or higher

  	
   

  	
  A2 or higher

  	
   

  	
  5.00

  
	
  2

  	
   

  	
  A-

  	
   

  	
  A3

  	
   

  	
  10.00

  
	
  3

  	
   

  	
  less than A-

  	
   

  	
  less than A3

  	
   

  	
  12.50

  

 

provided
that, notwithstanding anything above to the contrary, (i) if the S&P
Rating and the Moody’s Rating shall at any time be at different Levels in the
above chart, and the difference in Levels is only one Level, then the
Applicable Utilization Fee Rate shall be based upon the higher of the
applicable S&P Rating and Moody’s Rating, (ii) if the S&P Rating
and the Moody’s Rating shall at any time be at different Levels in the above
charts, and such difference is two Levels or more, then the Applicable
Utilization Fee Rate shall be based upon the Level immediately below the Level
determined based on the higher of the S&P Rating and the Moody’s Rating, (iii) if
only one of the two ratings (S&P Rating or Moody’s Rating) shall exist,
then the existing rating shall determine the Level of the Applicable Utilization
Fee Rate, and (iv) if neither the S&P Rating nor the Moody’s Rating
shall exist, then the Applicable Utilization Fee Rate shall be set at Level
3.  Changes to the Applicable Utilization
Fee Rate shall be immediately effective on each Margin Adjustment Date.  The above matrix does not modify or waive, in
any respect, the rights of Agent and the Lenders to charge the Default Rate, or
the rights and remedies of Agent and the Lenders pursuant to Articles VII and
VIII hereof.

 

“Assignment
Agreement” shall mean an Assignment and Acceptance Agreement in the form of the
attached Exhibit E.

 

“Authorized
Officer” shall mean a Financial Officer or any other individual authorized by a
Financial Officer in writing (with a copy to Agent) to handle certain
administrative matters in connection with this Agreement.

 

4

 

“Base
Rate” shall mean a rate per annum equal to the greater of (a) the Prime
Rate or (b) one-half of one percent (.50%) in excess of the Federal Funds
Effective Rate.  Any change in the Base
Rate shall be effective immediately from and after such change in the Base
Rate.

 

“Base
Rate Loan” shall mean a Revolving Loan described in Section 2.2(a) hereof
on which Borrower shall pay interest at a rate based on the Base Rate.

 

“BOCM
Fee Letter” shall mean the BOCM Fee Letter between Borrower and BOCM, dated as
of the Closing Date.

 

“Business
Day” shall mean any day that is not a Saturday, Sunday or other day on which
national banks are authorized or required to close, and, if the applicable
Business Day shall relate to a Eurodollar Loan, a day of the year on which
dealings in deposits are carried on in the London interbank Eurodollar market.

 

“Capital
Distribution” shall mean a payment made, liability incurred or other
consideration given by a Company to any Person that is not a Company, for the
purchase, acquisition, redemption, repurchase or retirement of any capital
stock or other equity interest of such Company or as a dividend, return of
capital or other distribution (other than any stock dividend, stock split or
other equity distribution payable only in capital stock or other equity of such
Company) in respect of such Company’s capital stock or other equity interest.

 

“Capitalization
Ratio” shall mean, as determined for the most recently completed fiscal quarter
of Parent, on a Consolidated basis and in accordance with GAAP, the ratio of
(a) Consolidated Net Funded Indebtedness to (b) Consolidated Total
Capitalization.

 

“Capitalized
Lease” of a Person shall mean any lease of assets by such Person as lessee that
would be capitalized on a balance sheet of such Person prepared in accordance
with GAAP.

 

“Capitalized
Lease Obligations” of a Person shall mean the amount of the obligations of such
Person under Capitalized Leases that would be shown as a liability on a balance
sheet of such Person prepared in accordance with GAAP.

 

“Cash
Equivalents” shall mean (a) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or instrumentality
thereof (provided that the full faith and credit of the United States of
America is pledged in support thereof) having maturities of not more than one
year from the date of acquisition; (b) U.S. dollar denominated time
deposits, certificates of deposit and bankers’ acceptances of any bank whose
short-term commercial paper rating from Standard & Poor’s is at least
A-2, or the equivalent thereof, or from Moody’s is at least P-2, or the
equivalent thereof (any such bank, an “Approved Depository”); (c) commercial
paper issued by any Approved Depository or by the parent company of any
Approved Depository and commercial paper issued by, or guaranteed by, any
company with a short-term commercial paper rating of at least A-2 or the
equivalent thereof by Standard & Poor’s or at least P-2 or the
equivalent thereof by Moody’s; (d) bonds and preferred stock of investment
grade companies or issuers including, without limitation, municipal bonds,

 

5

 

corporate
bonds and treasury bonds; (e) investments in money market funds
substantially all the assets of which are comprised of securities of the types
described in subparts (a) through (d) above; and (f) investments
in money market funds access to which is provided as part of “sweep” accounts
maintained with an Approved Depository.

 

“Change
in Control” shall mean (a) the acquisition of, or, if earlier, the
shareholder or director approval of the acquisition of, ownership or voting
control, directly or indirectly, beneficially or of record, on or after the
Closing Date, by any Person (other than members of the Current Holder Group) or
group (within the meaning of Rule 13d-3 of the SEC under the Securities
Exchange Act of 1934, as then in effect), of shares representing more than
thirty percent (30%) of the aggregate ordinary Voting Power represented by the
issued and outstanding capital stock of Parent; 
(b) the occupation of a majority of the seats (other than vacant
seats) on the board of directors or other governing body of Parent by Persons
who were neither (i) nominated by the board of directors or other
governing body of Borrower nor (ii) appointed by directors so nominated;
or (c) the failure of Parent to own one hundred percent (100%), directly
or indirectly, of the outstanding common stock of Borrower.

 

“Closing Commitment Amount” shall mean Three Hundred Million Dollars
($300,000,000).

 

“Closing
Date” shall mean the effective date of this Agreement as set forth in the first
paragraph of this Agreement.

 

“Closing
Fee Letter” shall mean the Closing Fee Letter between Borrower and Agent, dated
as of the Closing Date.

 

“Code”
shall mean the Internal Revenue Code of 1986, as amended, together with the rules and
regulations promulgated thereunder.

 

“Commitment”
shall mean the obligation hereunder of the Lenders, during the Commitment
Period, to make Loans, to issue Letters of Credit and to participate in Swing
Loans and Letters of Credit pursuant to the Revolving Credit Commitments, up to
the Total Commitment Amount.

 

“Commitment Increase Period” shall mean the period from the Closing
Date to the date that is thirty (30) days prior to the last day of the
Commitment Period, or such later date as shall be agreed to in writing by
Agent.

 

“Commitment
Percentage” shall mean, for each Lender, the percentage set forth opposite such
Lender’s name under the column headed “Commitment Percentage”, as listed in Schedule
1 hereto.

 

“Commitment
Period” shall mean the period from the Closing Date to May 27, 2009, or
such earlier date on which the Commitment shall have been terminated pursuant
to Article VIII hereof.

 

6

 

“Companies”
shall mean Parent, Borrower and all Subsidiaries of Parent.

 

“Company”
shall mean Parent, Borrower or a Subsidiary of Parent.

 

“Compliance
Certificate” shall mean a certificate, substantially in the form of the
attached Exhibit D.

 

“Consideration”
shall mean, in connection with an Acquisition, the aggregate consideration
paid, including cash, securities or notes, the assumption or incurring of
liabilities (direct or contingent) valued on a GAAP basis, the payment of fees
for a covenant not to compete and any other consideration paid for such
Acquisition.

 

“Consolidated”
shall mean the resultant consolidation of the financial statements of Parent
and its Subsidiaries in accordance with GAAP, including principles of
consolidation specified by GAAP.

 

“Consolidated
EBIT” shall mean, for any period, on a Consolidated basis and in accordance
with GAAP, Consolidated Net Earnings for such period plus the aggregate amounts
deducted in determining such Consolidated Net Earnings in respect of (a) Consolidated
Interest Expense, (b) Consolidated Income Tax Expense, and (c) extraordinary
and non-recurring losses and non-cash charges and related tax effects in
accordance with GAAP, minus the aggregate amounts added in determining such
Consolidated Net Earnings in respect of extraordinary and non-recurring gains
and related tax effects in accordance with GAAP.

 

“Consolidated
Funded Indebtedness” shall mean, at any date, all Indebtedness (including, but
not limited to, current, long-term and Subordinated Indebtedness, if any) of
Parent, as determined on a Consolidated basis and in accordance with GAAP.

 

“Consolidated
Income Tax Expense” shall mean, for any period, all provisions for taxes based
on the gross or net income of Parent (including, without limitation, any
additions to such taxes, and any penalties and interest with respect thereto),
and all franchise taxes of Parent, as determined on a Consolidated basis and in
accordance with GAAP.

 

“Consolidated
Interest Expense” shall mean, for any period, the interest expense of Parent
for such period, as determined on a Consolidated basis and in accordance with
GAAP.

 

“Consolidated
Net Earnings” shall mean, for any period, the net income (loss) of Parent for
such period, as determined on a Consolidated basis and in accordance with GAAP.

 

“Consolidated
Net Funded Indebtedness” shall mean, at any date, (a) Consolidated Funded
Indebtedness, minus (b) cash and Cash Equivalents of the Companies, as
determined on a Consolidated basis and in accordance with GAAP.

 

“Consolidated
Net Worth” shall mean, at any date, the stockholders’ equity of Parent, as
determined on a Consolidated basis and in accordance with GAAP.

 

7

 

“Consolidated
Total Capitalization” shall mean, at any date, as determined on a Consolidated
basis and in accordance with GAAP, Consolidated Net Worth plus Consolidated Funded
Indebtedness.

 

“Controlled
Group” shall mean a Company and each Person required to be aggregated with a
Company under Code Section 414(b), (c), (m) or (o).

 

“Credit
Event” shall mean the making by the Lenders of a Loan, the conversion by the
Lenders of a Base Rate Loan to a Eurodollar Loan, the continuation by the
Lenders of a Eurodollar Loan after the end of the applicable Interest Period,
the making by the Swing Line Lender of a Swing Loan, or the issuance by the
Fronting Lender of a Letter of Credit.

 

“Credit
Party” shall mean Borrower, Parent and any Subsidiary that is a Guarantor of
Payment.

 

“Current
Holder Group” shall mean (a) Richard T. Farmer and Joyce E. Farmer and the
lineal descendants of Richard T. Farmer, and (b) James J. Gardner and Joan
A. Gardner and the lineal descendants of James J. Gardner.

 

“Default”
shall mean an event or condition that constitutes, or with the lapse of any
applicable grace period or the giving of notice or both would constitute, an
Event of Default, and that has not been waived by the Required Lenders in
writing.

 

“Default
Rate” shall mean (a) with respect to any Loan, a rate per annum equal to
two percent (2%) in excess of the rate otherwise applicable thereto, and (b) with
respect to any other amount, if no rate is specified or available, a rate per
annum equal to two percent (2%) in excess of the Base Rate from time to time in
effect.

 

“Derived
Eurodollar Rate” shall mean a rate per annum equal to the sum of the Applicable
Margin (from time to time in effect) plus the Eurodollar Rate.

 

“Dollar”
or the sign $ shall mean lawful money of the United States of America.

 

“Domestic
Subsidiary” shall mean a Subsidiary that is not a Foreign Subsidiary.

 

“Dormant
Subsidiary” shall mean a Company that (a) is not a Credit Party, (b) has
aggregate assets of less than Five Hundred Thousand Dollars ($500,000), and (c) has
no direct or indirect Subsidiaries with aggregate assets for all such
Subsidiaries of more than Five Hundred Thousand Dollars ($500,000).

 

“Eligible
Transferee” shall mean a commercial bank or financial institution that is not
Borrower, a Subsidiary or an Affiliate; provided, however, that (a) in the
case of a commercial bank, such bank (i) has a combined capital and
surplus of not less than One Hundred Million Dollars ($100,000,000), and (ii) either
is organized under the laws of the United States or any state thereof or the
District of Columbia or is organized under the laws of a country that is a
member of the Organization for Economic Co-Operation and Development (OECD) or
a 

 

8

 

political
subdivision of such country and is acting through a branch or agency located in
the United States, and (b) in the case of any other financial institution,
such financial institution is engaged in the making and purchasing of
commercial loans in the ordinary course of its business and has a total net
worth of not less than One Hundred Million Dollars ($100,000,000) (or its
obligations are guaranteed by an entity with such a net worth).

 

“Environmental
Laws” shall mean all provisions of law, statutes, ordinances, rules,
regulations, permits, licenses, judgments, writs, injunctions, decrees, orders,
awards and standards promulgated by the government of the United States of
America or by any state or municipality thereof or any foreign jurisdiction, or
by any court, agency, instrumentality, regulatory authority or commission of
any of the foregoing concerning health, safety and protection of, or regulation
of the discharge of substances into, the environment.

 

“ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as amended from
time to time, and the regulations promulgated pursuant thereto.

 

“ERISA
Event” shall mean (a) the engagement by a Controlled Group member in a
non-exempt “prohibited transaction” (as defined under ERISA Section 406 or
Code Section 4975); (b) the application by a Controlled Group member
for a waiver from the minimum funding requirements of Code Section 412 or
ERISA Section 302 or a Controlled Group member is required to provide
security under Code Section 401(a)(29) or ERISA Section 307; (c) the
occurrence of a Reportable Event with respect to any Pension Plan as to which
notice is required to be provided to the PBGC; (d) the withdrawal by a
Controlled Group member from a Multiemployer Plan in a “complete withdrawal” or
a “partial withdrawal” (as such terms are defined in ERISA Sections 4203 and
4205, respectively); (e) the involvement of, or occurrence or existence of
any event or condition that makes likely the involvement of, a Multiemployer
Plan in any reorganization under ERISA Section 4241; (f) the failure
of an ERISA Plan (and any related trust) that is intended to be qualified under
Code Sections 401 and 501 to be so qualified or the failure of any “cash or
deferred arrangement” under any such ERISA Plan to meet the requirements of
Code Section 401(k); (g) the taking by the PBGC of any steps to
terminate a Pension Plan or appoint a trustee to administer a Pension Plan; (h) the
commencement or existence of a claim, action, suit, audit or investigation with
respect to an ERISA Plan, other than a routine claim for benefits; or (i) any
incurrence by or any expectation of the incurrence by a Controlled Group member
of any liability for post-retirement benefits under any Welfare Plan, other
than as required by ERISA Section 601, et.  seq. or Code Section 4980B.

 

“ERISA
Plan” shall mean an “employee benefit plan” (within the meaning of ERISA Section 3(3))
that a Controlled Group member at any time sponsors, maintains, contributes to,
has liability with respect to or has an obligation to contribute to such plan.

 

“Eurocurrency
Liabilities” shall have the meaning assigned to that term in Regulation D of
the Board of Governors of the Federal Reserve System, as in effect from time to
time.

 

“Eurodollar”
shall mean a Dollar denominated deposit in a bank or branch outside of the
United States.

 

9

 

“Eurodollar
Loan” shall mean a Revolving Loan described in Section 2.2(a) hereof
that shall be denominated in Dollars and on which Borrower shall pay interest
at a rate based upon the Derived Eurodollar Rate.

 

“Eurodollar
Rate” shall mean, with respect to a Eurodollar Loan, for any Interest Period, a
rate per annum equal to the quotient obtained by dividing (a) the rate of
interest, determined by Agent in accordance with its usual procedures (which
determination shall be conclusive absent manifest error) as of approximately
11:00 A.M. (London time) two Business Days prior to the beginning of such
Interest Period pertaining to such Eurodollar Loan, as listed on British
Bankers Association Interest Rate LIBOR 01 or 02 as provided by Reuters (or, if
for any reason such rate is unavailable from Reuters, from any other similar
company or service that provides rate quotations comparable to those currently
provided by Reuters) as the rate in the London interbank market for Dollar
deposits in immediately available funds with a maturity comparable to such
Interest Period, provided that, in the event that such rate quotation is not
available for any reason, then the Eurodollar Rate shall be the average of the
per annum rates at which deposits in immediately available funds in Dollars for
the relevant Interest Period and in the amount of the Eurodollar Loan to be
disbursed or to remain outstanding during such Interest Period, as the case may
be, are offered to Agent (or an affiliate of Agent, in Agent’s discretion) by
at least three prime banks in any Eurodollar market reasonably selected by
Agent, determined as of 11:00 A.M. (London time) (or as soon thereafter as
practicable), two Business Days prior to the beginning of the relevant Interest
Period pertaining to such Eurodollar Loan hereunder; by (b) 1.00 minus the
Reserve Percentage.

 

“Event
of Default” shall mean an event or condition that shall constitute an event of
default as defined in Article VII hereof.

 

“Excluded
Taxes” shall mean net income taxes (and franchise taxes imposed in lieu of net
income taxes) imposed on Agent or any Lender by the Governmental Authority
located in any jurisdiction, as a result of Agent or Lender, as applicable,
having been a citizen or resident of the jurisdiction of such taxing authority
or being or having been engaged in a trade or business in such jurisdiction
(but excluding any connection arising solely from Agent’s or any Lender’s
execution or enforcement of, or performance of, its obligations hereunder or
under any of the other Loan Documents).

 

“Existing
Letter of Credit” shall mean that term as defined in Section 2.2(b)(vii) hereof.

 

“Federal
Funds Effective Rate” shall mean, for any day, the rate per annum (rounded
upward (if necessary) to the nearest one one-hundredth of one percent (1/100 of
1%)) announced by the Federal Reserve Bank of New York (or any successor) on
such day as being the weighted average of the rates on overnight federal funds
transactions arranged by federal funds brokers on the previous trading day, as
computed and announced by such Federal Reserve Bank (or any successor) in
substantially the same manner as such Federal Reserve Bank computes and
announces the weighted average it refers to as the “Federal Funds Effective
Rate” as of the Closing Date.

 

10

 

“Financial
Officer” shall mean any of the following officers: chief executive officer,
president, chief financial officer, treasurer or controller.  Unless otherwise qualified, all references to
a Financial Officer in this Agreement shall refer to a Financial Officer of
Parent.

 

“Foreign
Subsidiary” shall mean a Subsidiary that is organized under the laws of a
jurisdiction located outside of the United States.

 

“Fronting
Lender” shall mean, (a) as to any Letter of Credit transaction hereunder,
KeyBank National Association as issuer of the Letter of Credit, or, with the
prior consent of Borrower, in the event that KeyBank National Association
either shall be unable to issue or shall agree that another Lender may issue a
Letter of Credit, such other Lender as shall agree to issue the Letter of
Credit in its own name, but on behalf of the Lenders hereunder; or (b) as
to any Existing Letter of Credit, Bank One, NA.

 

“GAAP”
shall mean generally accepted accounting principles in the United States as
then in effect, which shall include the official interpretations thereof by the
Financial Accounting Standards Board.

 

“Governmental
Authority” shall mean any nation or government, any state, province or
territory or other political subdivision thereof, any governmental agency,
authority, instrumentality, regulatory body, court, central bank or other
governmental entity exercising executive, legislative, judicial, taxing,
regulatory or administrative functions of or pertaining to government, any
securities exchange and any self-regulatory organization.

 

“Guarantor”
shall mean a Person that shall have pledged its credit or property in any
manner for the payment or other performance of the indebtedness, contract or
other obligation of another and includes (without limitation) any guarantor
(whether of payment or of collection), surety, co-maker, endorser or Person
that shall have agreed conditionally or otherwise to make any purchase, loan or
investment in order thereby to enable another to prevent or correct a default
of any kind.

 

“Guarantor
of Payment” shall mean Parent and each of the Companies set forth on Schedule
2 hereto, that are each executing and delivering a Guaranty of Payment, or
any other Person that shall deliver a Guaranty of Payment to Agent subsequent
to the Closing Date.

 

“Guaranty
of Payment” shall mean the Parent Guaranty of Payment and each other Guaranty
of Payment executed and delivered on or after the Closing Date in connection
with this Agreement by the Guarantors of Payment, as the same may from time to
time be amended, restated or otherwise modified.

 

“Hedge
Agreement” shall mean any (a) hedge agreement, interest rate swap, cap,
collar or floor agreement, or other interest rate management device entered
into by a Company with any Person, or (b) currency swap agreement, forward
currency purchase agreement or similar arrangement or agreement designed to
protect against fluctuations in currency exchange rates entered into by a
Company with any Person.

 

11

 

“Indebtedness”
shall mean, for any Company (excluding in all cases trade payables payable in
the ordinary course of business by such Company), without duplication, (a) all
obligations to repay borrowed money, direct or indirect, incurred, assumed, or
guaranteed, (b) all obligations for the deferred purchase price of capital
assets, (c) all obligations under conditional sales or other title
retention agreements, (d) all obligations (contingent or otherwise) under
any letter of credit or banker’s acceptance, (e) all net obligations under
any currency swap agreement, interest rate swap, cap, collar or floor agreement
or other interest rate management device or any Hedge Agreement, (f) all
Off-Balance Sheet Liabilities, (g) all Capitalized Lease Obligations, (h) all
obligations of such Company with respect to asset securitization financing
programs to the extent required to be capitalized on the books of such Company
in accordance with GAAP, (i) all obligations to advance funds to, or to
purchase assets, property or services from, any other Person in order to
maintain the financial condition of such Person, and (j) any guarantee of
any obligation described in subpart (a) through (i) hereof.

 

“Interest
Adjustment Date” shall mean the last day of each Interest Period.

 

“Interest
Coverage Ratio” shall mean, for the most recently completed four fiscal
quarters of Parent, as determined on a Consolidated basis and in accordance
with GAAP, the ratio of (a) Consolidated EBIT to (b) Consolidated
Interest Expense.

 

“Interest
Period” shall mean, with respect to Eurodollar Loan, the period commencing on
the date such Eurodollar Loan is made and ending on the last day of such
period, as selected by Borrower pursuant to the provisions hereof, and,
thereafter (unless such Eurodollar Loan is converted to a Base Rate Loan), each
subsequent period commencing on the last day of the immediately preceding
Interest Period and ending on the last day of such period, as selected by
Borrower pursuant to the provisions hereof. 
The duration of each Interest Period for a Eurodollar Loan shall be one
month, two months, three months or six months, in each case as Borrower may
select upon notice, as set forth in Section 2.5 hereof; provided that, if
Borrower shall fail to so select the duration of any Interest Period at least
three Business Days prior to the Interest Adjustment Date applicable to such
Eurodollar Loan, Borrower shall be deemed to have converted such Eurodollar
Loan to a Base Rate Loan at the end of the then current Interest Period.

 

“Letter
of Credit” shall mean a commercial documentary letter of credit or standby
letter of credit that shall be issued by the Fronting Lender for the account of
Borrower or a Guarantor of Payment, including amendments thereto, if any, and
shall have an expiration date no later than the earlier of (a) two years
after its date of issuance or (b) five Business Days prior to the last day
of the Commitment Period.

 

“Letter
of Credit Commitment” shall mean the commitment of the Fronting Lender, on
behalf of the Lenders, to issue Letters of Credit in an aggregate face amount
of up to One Hundred Million Dollars ($100,000,000).

 

“Letter
of Credit Exposure” shall mean, at any time, the sum of (a) the aggregate
undrawn face amount of all issued and outstanding Letters of Credit, and (b) the
aggregate of the 

 

12

 

draws
made on Letters of Credit that have not been reimbursed by Borrower or
converted to a Revolving Loan pursuant to Section 2.2(b)(v) hereof.

 

“Lien”
shall mean any mortgage, deed of trust, security interest, lien (statutory or
other), charge, encumbrance on, pledge or deposit of, or conditional sale,
leasing, sale with a right of redemption or other title retention agreement and
any capitalized lease with respect to any property (real or personal) or asset.

 

“Loan”
shall mean a Revolving Loan or a Swing Loan granted to Borrower by the Lenders
in accordance with Section 2.2(a) or 2.2(c) hereof.

 

“Loan
Documents” shall mean, collectively, this Agreement, each Note, each Guaranty
of Payment, each Letter of Credit and any letter of credit agreement between
Borrower and the Fronting Lender, the Agent Fee Letter, the BOCM Fee Letter and
the Closing Fee Letter, as any of the foregoing may from time to time be
amended, restated or otherwise modified or replaced, and any other document
delivered pursuant thereto.

 

“Margin
Adjustment Date” shall mean any date when a new Moody’s Rating or S&P
Rating is issued, by either announcement or publication.

 

“Material
Adverse Effect” shall mean a material adverse effect on (a) the business,
operations, property, condition (financial or otherwise) or prospects of
Borrower, (b) the business, operations, property, condition (financial or
otherwise) or prospects of the Companies taken as a whole, or (c) the
validity or enforceability of this Agreement or any of the other Loan Documents
or the rights and remedies of Agent or the Lenders hereunder or thereunder.

 

“Material
Indebtedness Agreement” shall mean any debt instrument, lease (capital,
operating or otherwise), guaranty, contract, commitment, agreement or other
arrangement evidencing any Indebtedness of a Company (or the Companies) then in
excess of the amount of Fifteen Million Dollars ($15,000,000).

 

“Maximum
Amount” shall mean, for each Lender, the amount set forth opposite such Lender’s
name under the column headed “Maximum Amount” as set forth on Schedule 1
hereto, subject to decreases determined pursuant to Section 2.9(a) hereof,
increases pursuant to Section 2.9(b) hereof and assignments of
interests pursuant to Section 10.10 hereof; provided, however, that the
Maximum Amount for the Swing Line Lender shall exclude the Swing Line
Commitment (other than its pro rata share), and the Maximum Amount of the
Fronting Lender shall exclude the Letter of Credit Commitment (other than its
pro rata share).

 

“Maximum
Commitment Amount” shall mean Four Hundred Million Dollars ($400,000,000).

 

“Moody’s”
shall mean Moody’s Investors Service, Inc., or any successor to such
company.

 

13

 

“Moody’s
Rating” shall mean the rating assigned by Moody’s to the senior unsecured
long-term indebtedness of Parent or of Borrower with a Parent guaranty.

 

“Multiemployer
Plan” shall mean a Pension Plan that is subject to the requirements of Subtitle
E of Title IV of ERISA.

 

“Note”
shall mean a Revolving Credit Note or the Swing Line Note, or any other
promissory note delivered pursuant to this Agreement.

 

“Notice
of Loan” shall mean a Notice of Loan in the form of the attached Exhibit C.

 

“Obligations”
shall mean, collectively, (a) all Indebtedness and other obligations
incurred by Borrower or any Guarantor of Payment to Agent, the Fronting Lender,
the Swing Line Lender or any Lender pursuant to this Agreement, and includes
the principal of and interest on all Loans and all obligations pursuant to
Letters of Credit, (b) each extension, renewal or refinancing thereof in
whole or in part, and (c) the facility fees, utilization fees, the other
fees and any prepayment fees payable hereunder, and all fees and charges in
connection with the Letters of Credit.

 

“Off-Balance
Sheet Liability” of a Person shall mean (a) any repurchase obligation or
liability of such Person with respect to accounts or notes receivable sold by
such Person, (b) any liability under any sale and leaseback transaction
which is not a Capitalized Lease, or (c) any obligation arising with
respect to any other transaction which is the functional equivalent of or takes
the place of borrowing but which does not constitute a liability on the balance
sheets of such Person, but excluding from this subpart (c) Operating
Leases.

 

“Operating
Lease” of a Person shall mean any lease of assets (other than a Capitalized
Lease) by such Person as lessee that has an original term (including any
required renewals and any renewals effective at the option of the lessor) of
one year or more.

 

“Organizational
Documents” shall mean, with respect to any Person (other than an individual),
such Person’s Articles (Certificate) of Incorporation, operating agreement or
equivalent formation documents, and Regulations (Bylaws), or equivalent
governing documents, and any amendments to any of the foregoing.

 

“Other
Taxes” shall mean any and all present or future stamp or documentary taxes or
any other excise or property taxes, goods and services taxes, harmonized sales
taxes and other sales taxes, charges or similar levies (other than Excluded
Taxes) arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document.

 

“Parent”
shall mean Cintas Corporation, a Washington corporation, and its successors.

 

“Parent
Guaranty of Payment” shall mean a Guaranty of Payment, substantially in the
form of the attached Exhibit G, executed and delivered by Parent
with respect to the Obligations, as the same may from time to time be amended,
restated or otherwise modified.

 

14

 

“PBGC”
shall mean the Pension Benefit Guaranty Corporation, or its successor.

 

“Pension
Plan” shall mean an ERISA Plan that is a “pension plan” (within the meaning of
ERISA Section 3(2)).

 

“Person”
shall mean any individual, sole proprietorship, partnership, joint venture,
unincorporated organization, corporation, limited liability company,
institution, trust, estate, government or other agency or political subdivision
thereof or any other entity.

 

“Prime
Rate” shall mean the interest rate established from time to time by Agent as
Agent’s prime rate, whether or not such rate shall be publicly announced; the
Prime Rate may not be the lowest interest rate charged by Agent for commercial
or other extensions of credit. Each change in the Prime Rate shall be effective
immediately from and after such change.

 

“Regularly
Scheduled Payment Date” shall mean the last day of each February, May, August and
November of each year.

 

“Related
Writing” shall mean each Loan Document and any other guaranty agreement,
subordination agreement, financial statement, audit report or other writing
furnished by any Credit Party, or any of its officers, to Agent or the Lenders
pursuant to or otherwise in connection with this Agreement.

 

“Reportable
Event” shall mean any of the events described in Section 4043 of ERISA
except where notice is waived by the PBGC.

 

“Request
for Extension” shall mean a notice, substantially in the form of the attached Exhibit F.

 

“Required
Lenders” shall mean the holders of at least fifty-one percent (51%) of the
Total Commitment Amount, or, if there is any borrowing hereunder, the holders
of at least fifty-one percent (51%) of the Revolving Credit Exposure.

 

“Requirement
of Law” shall mean, as to any Person, any law, treaty, rule or regulation
or determination or policy statement or interpretation of an arbitrator or a
court or other Governmental Authority, in each case applicable to or binding
upon such Person or any of its property or to which such Person or any of its
property is subject.

 

“Reserve
Percentage” shall mean for any day that percentage (expressed as a decimal)
that is in effect on such day, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor) for determining the maximum reserve
requirement (including, without limitation, all basic, supplemental, marginal
and other reserves and taking into account any transitional adjustments or
other scheduled changes in reserve requirements) for a member bank of the
Federal Reserve System in Cleveland, Ohio, in respect of Eurocurrency
Liabilities.  The Derived Eurodollar Rate
shall be adjusted automatically on and as of the effective date of any change
in the Reserve Percentage.

 

15

 

“Revolving
Credit Commitment” shall mean the obligation hereunder, during the Commitment
Period, of (a) each Lender to make Revolving Loans and participate in
Swing Loans and Letters of Credit up to the Maximum Amount for such Lender,
(b) the Fronting Lender to issue Letters of Credit pursuant to the Letter
of Credit Commitment, and (c) the Swing Line Lender to make Swing Loans
pursuant to the Swing Line Commitment.

 

“Revolving
Credit Exposure” shall mean, at any time, the sum of (a) the aggregate
principal amount of all Revolving Loans outstanding, (b) the Swing Line
Exposure, and (c) the Letter of Credit Exposure.

 

“Revolving
Credit Note” shall mean a Revolving Credit Note executed and delivered pursuant
to Section 2.4(a) hereof.

 

“Revolving
Loan” shall mean a Loan granted to Borrower by the Lenders in accordance with Section 2.2(a) hereof.

 

“SEC”
shall mean the United States Securities and Exchange Commission, or any
governmental body or agency succeeding to any of its principle functions.

 

“Senior
Note Indebtedness” shall mean the Indebtedness evidenced by the 5 1/8% Senior
Notes due 2007 and the 6% Senior Notes due 2012, in each case issued by
Borrower, or any replacement or refinancing of such Indebtedness.

 

“Significant
Subsidiary” shall mean a Domestic Subsidiary of Parent that, at any time of
determination, (a) accounts for more than fifteen percent (15%) of the
consolidated revenues (calculated for the most recent fiscal quarter of Parent)
of Parent and its Subsidiaries, or (b) is the owner of more than
twenty-five percent (25%) of the consolidated assets (calculated as of the end
of the most recent fiscal quarter of Parent) of Parent and its Subsidiaries.

 

“Standard &
Poor’s” shall mean Standard & Poor’s Ratings Group, a division of
McGraw-Hill, Inc., or any successor to such company.

 

“S&P
Rating” shall mean the rating assigned by Standard & Poor’s to the
senior unsecured long-term indebtedness of Parent or of Borrower with a Parent
guaranty.

 

“Subordinated”
shall mean, as applied to Indebtedness, Indebtedness that shall have been
subordinated (by written terms or written agreement being, in either case, in
form and substance satisfactory to Agent and the Required Lenders) in favor of
the prior payment in full of the Obligations.

 

“Subsidiary”
of a Company shall mean (a) a corporation more than fifty percent (50%) of
the Voting Power of which is owned, directly or indirectly, by such Company or
by one or more other subsidiaries of such Company or by such Company and one or
more subsidiaries of such Company, (b) a partnership or limited liability
company of which such Company, one or more other subsidiaries of such Company
or such Company and one or more subsidiaries of such 

 

16

 

Company,
directly or indirectly, is a general partner or managing member, as the case
may be, or otherwise has an ownership interest greater than fifty percent (50%)
of all of the ownership interests in such partnership or limited liability
company, or (c) any other Person (other than a corporation, partnership or
limited liability company) in which such Company, one or more other
subsidiaries of such Company or such Company and one or more subsidiaries of
such Company, directly or indirectly, has at least a majority interest in the
Voting Power or the power to elect or direct the election of a majority of
directors or other governing body of such Person.

 

“Substantial
Portion” shall mean, with respect to any assets of Parent and its Subsidiaries,
assets which (a) represent more than twenty-five percent (25%) of the
Consolidated assets of Parent and its Subsidiaries as would be shown in the
Consolidated financial statements of Parent and its Subsidiaries at the
beginning of the twelve (12) month period ending with the month in which such
determination is made; (b) are responsible for more than twenty-five
percent (25%) of the Consolidated net sales or the Consolidated net income of
Parent and its Subsidiaries as reflected in the financial statements referred
to in subpart (a) above; (c) represent more than thirty percent (30%)
of the Consolidated assets of Parent and its Subsidiaries as would be shown in
the most recent Consolidated financial statements of Parent and its
Subsidiaries delivered to Agent under Section 5.3(a) or (b) hereof;
or (d) are responsible for more than thirty percent (30%) of the
Consolidated net sales or of the consolidated Net financial statements referred
to in subpart (c) above.  For
purposes of determining Consolidated assets and net sales under this definition,
any Acquisition consummated after the date of the relevant financial statement
but before the relevant determination date shall be deemed to have occurred on
the first day of the relevant period for which such Consolidated assets and net
sales were calculated on a pro rata basis acceptable to Agent.

 

“Swing
Line” shall mean the credit facility established by the Swing Line Lender for
Borrower in accordance with Section 2.2(c) hereof.

 

“Swing
Line Commitment” shall mean the commitment of the Swing Line Lender to make
Swing Loans to Borrower up to the aggregate amount at any time outstanding of
Twenty Five Million Dollars ($25,000,000).

 

“Swing
Line Exposure” shall mean, at any time, the aggregate principal amount of all
Swing Loans outstanding.

 

“Swing
Line Lender” shall mean KeyBank National Association, as holder of the Swing
Line Commitment and each other Eligible Transferee to which all of the Swing
Line Commitment is assigned pursuant to Section 10.10 hereof.

 

“Swing
Line Note” shall mean the Swing Line Note executed and delivered pursuant to Section 2.4(b) hereof.

 

“Swing
Loan” shall mean a loan granted to Borrower by the Swing Line Lender under the
Swing Line.

 

17

 

“Swing
Loan Maturity Date” shall mean, with respect to any Swing Loan, the earlier of (a) fifteen
(15) days after the date such Swing Loan is made, or (b) the last day of
the Commitment Period.

 

“Taxes”
shall mean any present or future taxes, levies, imposts, duties, charges, fees,
deductions or withholdings now or hereafter imposed, levied, collected,
withheld or assessed by any Governmental Authority (together with any interest,
penalties or similar liabilities with respect thereto) other than Excluded
Taxes.

 

“Total
Commitment Amount” shall mean the Closing Commitment Amount, as such amount may
be increased up to the Maximum Commitment Amount pursuant to Section 2.9(b) hereof,
or decreased pursuant to Section 2.9(a) hereof.

 

“Voting
Power” shall mean, with respect to any Person, the exclusive ability to
control, through the ownership of shares of capital stock, partnership
interests, membership interests or otherwise, the election of members of the
board of directors or other similar governing body of such Person.  The holding of a designated percentage of
Voting Power of a Person means the ownership of shares of capital stock,
partnership interests, membership interests or other interests of such Person
sufficient to control exclusively the election of that percentage of the
members of the board of directors or similar governing body of such Person.

 

“Welfare
Plan” shall mean an ERISA Plan that is a “welfare plan” within the meaning of
ERISA Section 3(l).

 

Section 1.2.  Accounting Terms.  Any accounting term not specifically defined
in this Article I shall have the meaning ascribed thereto by GAAP.

 

Section 1.3.  Terms Generally.  The foregoing definitions shall be applicable
to the singular and plurals of the foregoing defined terms.

 

ARTICLE II.  AMOUNT AND
TERMS OF CREDIT

 

Section 2.1.  Amount and Nature of Credit.

 

(a)                                  Subject to the
terms and conditions of this Agreement, the Lenders, during the Commitment
Period and to the extent hereinafter provided, shall make Loans to Borrower,
participate in Swing Loans made by the Swing Line Lender to Borrower, and issue
or participate in Letters of Credit at the request of Borrower, in such
aggregate amount as Borrower shall request pursuant to the Commitment;
provided, however, that in no event shall the Revolving Credit Exposure be in
excess of the Total Commitment Amount.

 

(b)                                 Each Lender,
for itself and not one for any other, agrees to make Loans, participate in
Swing Loans, and issue or participate in Letters of Credit, during the
Commitment Period, on such basis that, immediately after the completion of any
borrowing by Borrower or the issuance of a Letter of Credit:

 

18

 

(i)                                     the aggregate
outstanding principal amount of Loans made by such Lender (other than Swing
Loans made by the Swing Line Lender), when combined with such Lender’s pro rata
share, if any, of the Letter of Credit Exposure and the Swing Line Exposure,
shall not be in excess of the Maximum Amount for such Lender; and

 

(ii)                                  the aggregate
outstanding principal amount of Loans (other than Swing Loans) made by such
Lender shall represent that percentage of the aggregate principal amount then
outstanding on all Loans (other than Swing Loans) together with such Lender’s
interest in the Letter of Credit Exposure and the Swing Line Exposure that
shall be such Lender’s Commitment Percentage.

 

Each
borrowing (other than Swing Loans) from the Lenders hereunder shall be made pro
rata according to the respective Commitment Percentages of the Lenders.

 

(c)                                  The Loans may
be made as Revolving Loans as described in Section 2.2(a) hereof and
Swing Loans as described in Section 2.2(c) hereof, and Letters of
Credit may be issued in accordance with Section 2.2(b) hereof.

 

Section 2.2.  Revolving Credit.

 

(a)                                  Revolving Loans.  Subject to the terms and conditions of this
Agreement, during the Commitment Period, the Lenders shall make a Revolving
Loan or Revolving Loans to Borrower in such amount or amounts as Borrower may
from time to time request, but not exceeding in aggregate principal amount at
any time outstanding hereunder the Total Commitment Amount, when such Revolving
Loans are combined with the Letter of Credit Exposure and the Swing Line
Exposure.  Borrower shall have the
option, subject to the terms and conditions set forth herein, to borrow
Revolving Loans, maturing on the last day of the Commitment Period, by means of
any combination of Base Rate Loans or Eurodollar Loans.  Subject to the provisions of this Agreement,
Borrower shall be entitled under this Section 2.2(a) to borrow funds,
repay the same in whole or in part and re-borrow hereunder at any time and from
time to time during the Commitment Period.

 

(b)                                 Letters of
Credit.

 

(i)                                     Generally.  Subject to the terms and conditions of this
Agreement, during the Commitment Period, the Fronting Lender shall, in its own
name, on behalf of the Lenders, issue such Letters of Credit for the account of
a Credit Party, as Borrower may from time to time request.  Borrower shall not request any Letter of
Credit (and the Fronting Lender shall not be obligated to issue any Letter of
Credit) if, after giving effect thereto, (A) the Letter of Credit Exposure
would exceed the Letter of Credit Commitment or (B) the Revolving Credit
Exposure would exceed the Total Commitment Amount.  The issuance of each Letter of Credit shall
confer upon each Lender the benefits and liabilities of a participation
consisting of an undivided pro rata interest in the Letter of Credit to the
extent of such Lender’s Commitment Percentage.

 

19

 

(ii)                                  Request for
Letter of Credit.  Each
request for a Letter of Credit shall be delivered to Agent (and to the Fronting
Lender, if the Fronting Lender is a Lender other than Agent) by an Authorized
Officer not later than 11:00 A.M. (Eastern time) three Business Days prior
to the day upon which the Letter of Credit is to be issued.  Each such request shall be in a form
acceptable to Agent (and the Fronting Lender, if the Fronting Lender is a
Lender other than Agent) and shall specify the face amount thereof, whether
such Letter of Credit shall be a commercial documentary or a standby Letter of
Credit, the account party, the beneficiary, the intended date of issuance, the
expiry date thereof, and the nature of the transaction to be supported thereby.  Concurrently with each such request,
Borrower, and any Credit Party for whose account the Letter of Credit is to be
issued, shall execute and deliver to the Fronting Lender an appropriate
application and agreement, being in the standard form of the Fronting Lender
for such letters of credit, as amended to conform to the provisions of this
Agreement if required by Agent; provided, however, that, in the event Fronting
Lender’s usual and customary practices for issuing Letters of Credit, or the
terms and conditions of any agreement relating to any such Letter of Credit
between Borrower and the Fronting Lender, conflict with the terms and
conditions of this Agreement, the terms of this Agreement shall control.  Agent shall give the Fronting Lender and each
Lender notice of each such request for a Letter of Credit.

 

(iii)                               Commercial
Documentary Letters of Credit.  With respect to each Letter of Credit that
shall be a commercial documentary letter of credit and the drafts thereunder,
whether issued for the account of Borrower or any other Credit Party, Borrower
agrees to (A) pay to Agent, for the pro rata benefit of the Lenders, a
non-refundable commission based upon the face amount of the Letter of Credit,
which shall be paid quarterly in arrears, on each Regularly Scheduled Payment
Date, at the rate of (1) the Applicable Margin (as in effect from time to
time) multiplied by (2) the face amount of such Letter of Credit; (B) pay
to Agent, for the sole benefit of the Fronting Lender, an additional Letter of
Credit fee, which shall be paid on the date that any draw shall be made on such
Letter of Credit, at the rate of one-tenth percent (1/10%) of the amount drawn
under such Letter of Credit; and (C) pay to Agent, for the sole benefit of
the Fronting Lender, such other issuance, amendment, negotiation, draw,
acceptance, telex, courier, postage and similar transactional fees as are
generally charged by the Fronting Lender under its fee schedule as in effect
from time to time.

 

(iv)                              Standby Letters
of Credit.  With
respect to each Letter of Credit that shall be a standby letter of credit and
the drafts thereunder, if any, whether issued for the account of Borrower or
any other Credit Party, Borrower agrees to (A) pay to Agent, for the pro
rata benefit of the Lenders, a non-refundable commission based upon the face
amount of such Letter of Credit, which shall be paid quarterly in arrears, on
each Regularly Scheduled Payment Date, at the rate of (1) the Applicable
Margin (as in effect from time to time) multiplied by (2) the face amount
of such Letter of Credit; (B) pay to Agent, for the sole benefit of the
Fronting Lender, an additional Letter of Credit fee, which shall be paid on
each date that such Letter of Credit shall be issued, amended or renewed at the
rate of one-tenth percent (1/10%) of the face amount of such Letter of Credit;
and (C) pay to Agent, for the sole benefit of the Fronting Lender, such
other issuance, amendment, negotiation, draw, acceptance, telex, courier,
postage and similar 

 

20

 

transactional
fees as are generally charged by the Fronting Lender under its fee schedule as
in effect from time to time.

 

(v)                                 Refunding of
Letters of Credit with Revolving Loans.  Whenever a Letter of Credit shall be drawn,
Borrower shall, within one Business Day, reimburse the Fronting Lender for the
amount drawn.  In the event that the
amount drawn shall not have been reimbursed by Borrower on the date of the
drawing of such Letter of Credit, at the sole option of Agent (and the Fronting
Lender, if the Fronting Lender is a Lender other than Agent), Borrower shall be
deemed to have requested a Revolving Loan, subject to the provisions of
Sections 2.2(a) and 2.5 hereof (other than the requirement set forth in Section 2.5(d) hereof),
in the amount drawn.  Such Revolving Loan
shall be evidenced by the Revolving Credit Notes (or, if a Lender has not
requested a Revolving Credit Note, by the records of Agent and such Lender).  Each Lender agrees to make a Revolving Loan
on the date of such notice, subject to no conditions precedent whatsoever.  Each Lender acknowledges and agrees that its
obligation to make a Revolving Loan pursuant to Section 2.2(a) hereof
when required by this subsection (v) shall be absolute and unconditional
and shall not be affected by any circumstance whatsoever, including, without
limitation, the occurrence and continuance of a Default or Event of Default,
and that its payment to Agent, for the account of the Fronting Lender, of the
proceeds of such Revolving Loan shall be made without any offset, abatement,
recoupment, counterclaim, withholding or reduction whatsoever and whether or
not such Lender’s Revolving Credit Commitment shall have been reduced or
terminated.  Borrower irrevocably
authorizes and instructs Agent to apply the proceeds of any borrowing pursuant
to this subsection to reimburse, in full, the Fronting Lender for the amount
drawn on such Letter of Credit.  Each
such Revolving Loan shall be deemed to be a Base Rate Loan unless otherwise
requested by and available to Borrower hereunder.  Each Lender is hereby authorized to record on
its records relating to its Revolving Credit Note (or, if such Lender has not
requested a Revolving Credit Note, its records relating to Revolving Loans)
such Lender’s pro rata share of the amounts paid and not reimbursed on the
Letters of Credit.

 

(vi)                              Participation
in Letters of Credit.  If, for any
reason, Agent (or the Fronting Lender if the Fronting Lender shall be a Lender
other than Agent) shall be unable to or, in the opinion of Agent, it shall be
impracticable to, convert any Letter of Credit to a Revolving Loan pursuant to
the preceding subsection, Agent (or the Fronting Lender if the Fronting Lender
is a Lender other than Agent) shall have the right to request that each Lender
purchase a participation in the amount due with respect to such Letter of
Credit, and Agent shall promptly notify each Lender thereof (by facsimile or
telephone, confirmed in writing).  Upon
such notice, but without further action, the Fronting Lender hereby agrees to
grant to each Lender, and each Lender hereby agrees to acquire from the
Fronting Lender, an undivided participation interest in the amount due with
respect to such Letter of Credit in an amount equal to such Lender’s Commitment
Percentage of the principal amount due with respect to such Letter of
Credit.  In consideration and in
furtherance of the foregoing, each Lender hereby absolutely and unconditionally
agrees, upon receipt of notice as provided above, to pay to Agent, for the
account of the Fronting Lender, such Lender’s ratable share of the amount due
with respect to such Letter of Credit (determined in accordance with such
Lender’s Commitment Percentage).  Each 

 

21

 

Lender
acknowledges and agrees that its obligation to acquire participations in the
amount due under any Letter of Credit that is drawn but not reimbursed by
Borrower pursuant to this subsection (vi) shall be absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including, without limitation, the occurrence and continuance of a Default or
Event of Default, and that each such payment shall be made without any offset,
abatement, recoupment, counterclaim, withholding or reduction whatsoever and whether
or not such Lender’s Revolving Credit Commitment shall have been reduced or
terminated.  Each Lender shall comply
with its obligation under this subsection (vi) by wire transfer of
immediately available funds, in the same manner as provided in Section 2.5
hereof with respect to Revolving Loans. 
Each Lender is hereby authorized to record on its records such Lender’s
pro rata share of the amounts paid and not reimbursed on the Letters of
Credit.  In addition, each Lender agrees
to risk participate in the Existing Letters of Credit as provided in subsection
(vii) below.

 

(vii)                           Existing
Letters of Credit.  Schedule
2.2 hereto contains a description of all letters of credit outstanding on,
and to continue in effect after, the Closing Date. Each such letter of credit
issued by a bank that is or becomes a Lender under this Agreement on the
Closing Date (each an “Existing Letter of Credit”) shall constitute a “Letter
of Credit” for all purposes of this Agreement, issued, for purposes of
subsection (vi) above, on the Closing Date.  Borrower, Agent and the Lenders hereby agree
that, from and after such date, the terms of this Agreement shall apply to the
Existing Letters of Credit, superseding any other agreement theretofore
applicable to them to the extent inconsistent with the terms hereof.  Notwithstanding anything to the contrary in
any reimbursement or other agreement applicable to the Existing Letters of
Credit, the fees payable in connection with each Existing Letter of Credit to
be shared with the Lenders, or paid to the Fronting Lender for its own account,
shall accrue from the Closing Date at the rate provided in this Section 2.2(b).

 

(c)                                  Swing Loans.

 

(i)                                     Generally.  Subject to the terms and conditions of this
Agreement, during the Commitment Period, the Swing Line Lender shall make a
Swing Loan or Swing Loans to Borrower in such amount or amounts as Borrower,
through an Authorized Officer, may from time to time request; provided that
Borrower shall not request any Swing Loan if, after giving effect thereto, (A) the
Revolving Credit Exposure would exceed the Total Commitment Amount, or (B) the
Swing Line Exposure would exceed the Swing Line Commitment.  Each Swing Loan shall be due and payable on
the Swing Loan Maturity Date applicable thereto.

 

(ii)                                  Refunding of
Swing Loans.  If the
Swing Line Lender so elects, by giving notice to Borrower and the Lenders,
Borrower agrees that the Swing Line Lender shall have the right, in its sole
discretion, to require that any Swing Loan be refinanced as a Revolving Loan.  Such Revolving Loan shall be a Base Rate Loan
unless otherwise requested by and available to Borrower hereunder.  Upon receipt of such notice by Borrower and
the Lenders, Borrower shall be deemed, on such day, to have requested a
Revolving Loan in the principal amount of the Swing Loan in accordance with
Sections 

 

22

 

2.2(a) and
2.5 hereof (other than the requirement set forth in Section 2.5(d) hereof).  Such Revolving Loan shall be evidenced by the
Revolving Credit Notes (or, if a Lender has not requested a Revolving Credit
Note, by the records of Agent and such Lender). 
Each Lender agrees to make a Revolving Loan on the date of such notice,
subject to no conditions precedent whatsoever. 
Each Lender acknowledges and agrees that such Lender’s obligation to
make a Revolving Loan pursuant to Section 2.2(a) hereof when required
by this subsection (ii) is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including, without limitation, the
occurrence and continuance of a Default or Event of Default, and that its
payment to Agent, for the account of the Swing Line Lender, of the proceeds of
such Revolving Loan shall be made without any offset, abatement, recoupment,
counterclaim, withholding or reduction whatsoever and whether or not such
Lender’s Revolving Credit Commitment shall have been reduced or
terminated.  Borrower irrevocably
authorizes and instructs Agent to apply the proceeds of any borrowing pursuant
to this subsection (ii) to repay in full such Swing Loan.  Each Lender is hereby authorized to record on
its records relating to its Revolving Credit Note (or, if such Lender has not
requested a Revolving Credit Note, its records relating to Revolving Loans)
such Lender’s pro rata share of the amounts paid to refund such Swing Loan.

 

(iii)                               Participation
in Swing Loans.  If, for any
reason, Agent is unable to or, in the opinion of Agent, it is impracticable to,
convert any Swing Loan to a Revolving Loan pursuant to the preceding subsection
(ii), then on any day that a Swing Loan is outstanding (whether before or after
the maturity thereof), Agent shall have the right to request that each Lender
purchase a participation in such Swing Loan, and Agent shall promptly notify each
Lender thereof (by facsimile or telephone, confirmed in writing).  Upon such notice, but without further action,
the Swing Line Lender hereby agrees to grant to each Lender, and each Lender
hereby agrees to acquire from the Swing Line Lender, an undivided participation
interest in such Swing Loan in an amount equal to such Lender’s Commitment
Percentage of the principal amount of such Swing Loan.  In consideration and in furtherance of the
foregoing, each Lender hereby absolutely and unconditionally agrees, upon
receipt of notice as provided above, to pay to Agent, for the benefit of the
Swing Line Lender, such Lender’s ratable share of such Swing Loan (determined
in accordance with such Lender’s Commitment Percentage).  Each Lender acknowledges and agrees that its
obligation to acquire participations in Swing Loans pursuant to this subsection
(iii) is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including, without limitation, the occurrence and
continuance of a Default or an Event of Default, and that each such payment
shall be made without any offset, abatement, recoupment, counterclaim,
withholding or reduction whatsoever and whether or not such Lender’s Revolving
Credit Commitment shall have been reduced or terminated.  Each Lender shall comply with its obligation
under this subsection (iii) by wire transfer of immediately available
funds, in the same manner as provided in Section 2.5 hereof with respect
to Revolving Loans to be made by such Lender.

 

23

 

Section 2.3.  Interest.

 

(a)                                  Revolving Loans.

 

(i)                                     Base Rate Loan.  Borrower shall pay interest on the unpaid
principal amount of a Base Rate Loan outstanding from time to time from the
date thereof until paid at the Base Rate from time to time in effect.  Interest on such Base Rate Loan shall be
payable, commencing August 31, 2004, and on each Regularly Scheduled
Payment Date thereafter and at the maturity thereof.

 

(ii)                                  Eurodollar
Loans.  Borrower shall pay interest on
the unpaid principal amount of each Eurodollar Loan outstanding from time to
time, fixed in advance on the first day of the Interest Period applicable
thereto through the last day of the Interest Period applicable thereto (but
subject to changes in the Applicable Margin), at the Derived Eurodollar
Rate.  Interest on such Eurodollar Loan
shall be payable on each Interest Adjustment Date with respect to an Interest
Period (provided that if an Interest Period shall exceed three months, the
interest must be paid every three months, commencing three months from the
beginning of such Interest Period).

 

(b)                                 Swing Loans.  Borrower shall pay interest to Agent, for the
sole benefit of the Swing Line Lender (and any Lender that shall have purchased
a participation in such Swing Loan), on the unpaid principal amount of each
Swing Loan outstanding from time to time from the date thereof until paid at
the Base Rate.  Interest on each Swing
Loan shall be payable on the Swing Loan Maturity Date applicable thereto.  Each Swing Loan shall bear interest for a
minimum of one day.

 

(c)                                  Default Rate.  Anything herein to the contrary
notwithstanding, if an Event of Default shall occur, (i) the principal of
each Loan and the unpaid interest thereon shall bear interest, until paid, at
the Default Rate, and (ii) in the case of any other amount due from
Borrower hereunder or under any other Loan Document, such amount shall bear
interest at the Default Rate.

 

(d)                                 Limitation on
Interest.  In no event
shall the rate of interest hereunder exceed the maximum rate allowable by
law.  Notwithstanding anything to the
contrary contained in any Loan Document, the interest paid or agreed to be paid
under the Loan Documents shall not exceed the maximum rate of non-usurious
interest permitted by applicable Law (the “Maximum Rate”).  If Agent or any Lender shall receive interest
in an amount that exceeds the Maximum Rate, the excess interest shall be
applied to the principal of the Loans or, if it exceeds such unpaid principal,
refunded to Borrower.  In determining
whether the interest contracted for, charged, or received by Agent or a Lender
exceeds the Maximum Rate, such Person may, to the extent permitted by
applicable law, (i) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (ii) exclude voluntary
prepayments and the effects thereof, and (iii) amortize, prorate,
allocate, and spread in equal or unequal parts the total amount of interest
throughout the contemplated term of the Obligations.

 

24

 

Section 2.4.  Evidence of Indebtedness.

 

(a)                                  Revolving Loans.  To evidence the obligation of Borrower to a
Lender, upon the request of such Lender to Agent and Agent to Borrower,
Borrower shall execute a Revolving Credit Note in the form of the attached Exhibit A,
payable to the order of such Lender in the principal amount of its Revolving
Credit Commitment, or, if less, the aggregate unpaid principal amount of
Revolving Loans made by such Lender; provided, however, that the provision of a
Revolving Credit Note shall be at the option of each Lender and the failure of
a Lender to request a Revolving Credit Note shall in no way detract from
Borrower’s obligations to such Lender hereunder.

 

(b)                                 Swing Loan.  The obligation of Borrower to repay the Swing
Loans and to pay interest thereon shall be evidenced by a Swing Line Note of
Borrower in the form of the attached Exhibit B, and payable to the
order of the Swing Line Lender in the principal amount of the Swing Line Commitment,
or, if less, the aggregate unpaid principal amount of Swing Loans made by the
Swing Line Lender.

 

Section 2.5.  Notice of Credit Event; Funding of Loans.

 

(a)                                  Notice of
Credit Event.  Borrower,
through an Authorized Officer, shall provide to Agent a Notice of Loan prior to
(i) 11:00 A.M. (Eastern time) on the proposed date of borrowing or
conversion of any Base Rate Loan, (ii) 11:00 A.M. (Eastern time)
three Business Days prior to the proposed date of borrowing, conversion or
continuation of any Eurodollar Loan, and (iii) 2:00 P.M. (Eastern
time) on the proposed date of borrowing of any Swing Loan.  Borrower shall comply with the notice
provisions set forth in Section 2.2(b) hereof with respect to Letters
of Credit.

 

(b)                                 Funding of
Loans.  Agent shall notify each Lender
of the date, amount and Interest Period (if applicable) promptly upon the
receipt of a Notice of Loan, and, in any event, by 2:00 P.M. (Eastern
time) on the date such notice is received. 
On the date that the Credit Event set forth in such notice is to occur,
each such Lender shall provide to Agent, not later than 3:00 P.M. (Eastern
time), the amount in Dollars, in federal or other immediately available funds,
required of it.  If Agent receives the
funds from the Lenders by 3:00 P.M. (Eastern time), then Agent shall make
the Loan to Borrower on or before 4:00 P.M. (Eastern time).  If Agent shall elect to advance the proceeds
of such Loan prior to receiving funds from such Lender, Agent shall have the
right, upon prior notice to Borrower, to debit any account of Borrower or
otherwise receive such amount from Borrower, on demand, in the event that such
Lender shall fail to reimburse Agent in accordance with this subsection.  Agent shall also have the right to receive
interest from such Lender at the Federal Funds Effective Rate in the event that
such Lender shall fail to provide its portion of the Loan on the date requested
and Agent shall elect to provide such funds.

 

(c)                                  Conversion of
Loans.  At the request of Borrower to
Agent, subject to the notice and other provisions of this Section 2.5, the
Lenders shall convert a Base Rate Loan to one or more Eurodollar Loans at any
time and shall convert a Eurodollar Loan to a Base Rate Loan on any Interest
Adjustment Date applicable thereto. 
Swing Loans may be converted by the Swing Line Lender to Revolving Loans
in accordance with Section 2.2(c)(ii) hereof.

 

25

 

(d)                                 Minimum Amount.  Each request for:

 

(i)                                     a Base Rate
Loan shall be in an amount of not less than One Million Dollars ($1,000,000),
increased by increments of Five Hundred Thousand Dollars ($500,000) (provided,
however, that a Base Rate Loan may be in an amount equal to the Total
Commitment Amount minus the Revolving Credit Exposure);

 

(ii)                                  a Eurodollar
Loan shall be in an amount of not less than Five Million Dollars ($5,000,000),
increased by increments of One Million Dollars ($1,000,000); and

 

(iii)                               a Swing Loan
shall be in an amount not less than Five Hundred Thousand Dollars ($500,000).

 

Section 2.6.  Payment on Loans and Other Obligations.

 

(a)                                  Payments
Generally.  Each
payment made hereunder by a Credit Party shall be made without any offset,
abatement, recoupment, counterclaim, withholding or reduction whatsoever.

 

(b)                                 Payments from
Borrower.  All
payments (including prepayments) of the principal of or interest on any Loan or
other payment, including but not limited to principal, interest or fees, or any
other amount owed by Borrower under this Agreement, shall be made to Agent and
shall be made in Dollars.  All payments
described in this subsection (b) shall be remitted to Agent at the address
of Agent for notices referred to in Section 10.4 hereof, for the account
of the Lenders (or the Fronting Lender or the Swing Line Lender, as
appropriate) not later than 1:00 P.M. (Eastern time) on the due date
thereof in immediately available funds. 
Any such payments received by Agent after 1:00 P.M. (Eastern time)
shall be deemed to have been made and received on the next Business Day.

 

(c)                                  Payments to
Lenders.  Upon Agent’s receipt of
payments hereunder, Agent shall immediately distribute to each Lender (except
with respect to Swing Loans, which shall be paid to the Swing Line Lender) its
ratable share, if any, of the amount of principal, interest, and facility,
utilization and other fees received by Agent for the account of such
Lender.  Each Lender shall record any principal,
interest or other payment, the principal amounts of Base Rate Loans, Eurodollar
Loans and Swing Loans, prepayments, and the applicable dates, including
Interest Periods, with respect to the Loans made, and payments received by such
Lender, by such method as such Lender may generally employ; provided, however,
that failure to make any such entry shall in no way detract from the
obligations of Borrower under this Agreement or any Note.  The aggregate unpaid amount of Loans, types
of Loans, Interest Periods and similar information with respect to the
Loans and Letters of Credit set forth on the records of Agent shall be
rebuttably presumptive evidence with respect to such information, including the
amounts of principal and interest owing to each Lender.

 

(d)                                 Timing of
Payments.  Whenever
any payment to be made hereunder, including, without limitation, any payment to
be made on any Loan, shall be stated to be due on a day that is not a Business
Day, such payment shall be made on the next Business Day and such extension 

 

26

 

of
time shall in each case be included in the computation of the interest payable
on such Loan; provided, however, that, with respect to any Eurodollar Loan, if
the next Business Day shall fall in the succeeding calendar month, such payment
shall be made on the preceding Business Day and the relevant Interest Period
shall be adjusted accordingly.

 

Section 2.7.  Prepayment.

 

(a)                                  Right to Prepay.  Borrower shall have the right at any time or
from time to time to prepay, on a pro rata basis for all of the Lenders (except
with respect to Swing Loans, which shall be paid to the Swing Line Lender), all
or any part of the principal amount of the Loans, as designated by
Borrower.  Such payment shall include
interest accrued on the amount so prepaid to the date of such prepayment and
any amount payable under Article III hereof with respect to the amount
being prepaid.    Borrower shall have the
right, at any time or from time to time, to prepay, for the benefit of the
Swing Line Lender (and any Lender that has purchased a participation in such
Swing Loan), all or any part of the principal amount of the Swing Loans then
outstanding, as designated by Borrower, plus interest accrued on the amount so
prepaid to the date of such prepayment.

 

(b)                                 Notice of
Prepayment.  Borrower
shall give Agent notice of prepayment of a Base Rate Loan or Swing Loan by not
later than 1:00 P.M. (Eastern time) one Business Day before the Business
Day on which such prepayment is to be made and written notice of the prepayment
of any Eurodollar Loan not later than 1:00 P.M. (Eastern time) three
Business Days before the Business Day on which such prepayment is to be made.

 

(c)                                  Minimum Amount.  Each prepayment of a Eurodollar Loan by
Borrower shall be in the aggregate principal amount of not less than Five
Million Dollars ($5,000,000), except in the case of a mandatory prepayment in
connection with Section 2.11 or Article III hereof.

 

Section 2.8.  Facility and Other Fees.

 

(a)                                  Facility Fee.  Borrower shall pay to Agent, for the ratable
account of the Lenders, as a consideration for the Commitment, a facility fee
from the Closing Date to and including the last day of the Commitment Period,
payable quarterly, at a rate per annum equal to (i) the Applicable Facility
Fee Rate as in effect from time to time, times (ii) the average daily
Total Commitment Amount in effect during such quarter.  The facility fee shall be payable in arrears,
on August 31, 2004 and on each Regularly Scheduled Payment Date
thereafter, and on the last day of the Commitment Period.

 

(b)                                 Utilization Fee.  For each day that the Revolving Credit
Exposure exceeds an amount equal to fifty percent (50%) of the Total Commitment
Amount in effect on that day, Borrower shall pay to Agent, for the ratable
account of the Lenders, a utilization fee at the rate per annum equal to (i) the
Applicable Utilization Fee Rate as in effect from time to time, times (ii) the
Revolving Credit Exposure on that day. 
The utilization fee shall be payable in arrears for any fiscal quarter
for which a utilization fee is payable, commencing August 31, 2004, and on
each Regularly Scheduled Payment Date thereafter, and on the last day of the
Commitment Period.

 

27

 

(c)                                  Agent Fee.  Borrower shall pay to Agent, for its sole
benefit, the fees set forth in the Agent Fee Letter.

 

Section 2.9.  Modification of Commitment.

 

(a)                                  Optional
Reduction of Commitment. 
Borrower may at any time and from time to time permanently reduce in
whole or ratably in part the Total Commitment Amount to an amount not less than
the then existing Revolving Credit Exposure, by giving Agent not fewer than
three Business Days’ written notice of such reduction, provided that any such
partial reduction shall be in an aggregate amount, for all of the Lenders, of
not less than Five Million Dollars ($5,000,000), increased by increments of One
Million Dollars ($1,000,000).  Agent
shall promptly notify each Lender of the date of each such reduction and such
Lender’s proportionate share thereof. 
After each such reduction, the facility fees payable hereunder shall be
calculated upon the Total Commitment Amount as so reduced.  If Borrower reduces in whole the Commitment,
on the effective date of such reduction (Borrower having prepaid in full the
unpaid principal balance, if any, of the Loans, together with all interest and
facility, utilization and other fees accrued and unpaid, and provided that no
Letter of Credit Exposure or Swing Line Exposure shall exist), all of the Notes
shall be delivered to Agent marked “Canceled” and Agent shall redeliver such
Notes to Borrower.  Any partial reduction
in the Total Commitment Amount shall be effective during the remainder of the
Commitment Period.

 

(b)                                 Increase in
Commitment.  At any time
during the Commitment Increase Period, Borrower may request that Agent increase
the Total Commitment Amount from the Closing Commitment Amount up to an amount
that shall not exceed the Maximum Commitment Amount.  Each such increase shall be in an amount of at
least Ten Million Dollars ($10,000,000), increased by increments of One Million
Dollars ($1,000,000), and may be made by either (i) proportionally
increasing, for one or more Lenders, with their prior written consent, their
respective Revolving Credit Commitments, or (ii) including one or more
Additional Lenders, each with a new Revolving Credit Commitment, as a party to
this Agreement (collectively, the “Additional Commitment”).  During the Commitment Increase Period, the
Lenders agree that Agent, in its sole discretion, may permit one or more
Additional Commitments upon satisfaction of the following requirements: (A) each
Additional Lender, if any, shall be an Eligible Transferee and shall execute an
Additional Lender Assumption Agreement, (B) Agent shall provide to
Borrower and each Lender a revised Schedule 1 to this Agreement,
including revised Commitment Percentages for each of the Lenders, if
appropriate, at least three Business Days prior to the effectiveness of such
Additional Commitments (each an “Additional Lender Assumption Effective Date”),
and (C) Borrower shall execute and deliver to Agent and the Lenders such
replacement or additional Revolving Credit Notes as shall be required by Agent
(and requested by the Lenders).  The
Lenders hereby authorize Agent to execute each Additional Lender Assumption
Agreement on behalf of the Lenders.  On
each Additional Lender Assumption Effective Date, the Lenders shall make
adjustments among themselves with respect to the Revolving Loans then
outstanding and amounts of principal, interest, facility fees, utilization fees
and other amounts paid or payable with respect thereto as shall be necessary,
in the opinion of Agent, in order to reallocate among such Lenders such
outstanding amounts, based on the revised Commitment Percentages and to
otherwise carry out fully the intent and 

 

28

 

terms
of this Section 2.9(b).  Borrower
shall not request any increase in the Commitment pursuant to this Section 2.9(b) if
a Default or an Event of Default shall then exist, or immediately after giving
effect to any such increase would exist.

 

Section 2.10.  Computation of Interest and Fees.  With the exception of Base Rate Loans,
interest on Loans and facility, utilization and other fees and charges
hereunder shall be computed on the basis of a year having three hundred sixty
(360) days and calculated for the actual number of days elapsed.  With respect to Base Rate Loans, interest
shall be computed on the basis of a year having three hundred sixty-five (365)
days or three hundred sixty-six (366) days, as the case may be, and calculated
for the actual number of days elapsed.

 

Section 2.11.  Mandatory Payment.

 

(a)                                  If, at any
time, the Revolving Credit Exposure shall exceed the Total Commitment Amount as
then in effect, Borrower shall, as promptly as practicable, but in no event
later than the next Business Day, prepay an aggregate principal amount of the
Revolving Loans sufficient to bring the Revolving Credit Exposure within the Total
Commitment Amount.

 

(b)                                 If, at any
time, the Swing Line Exposure shall exceed the Swing Line Commitment, Borrower
shall, as promptly as practicable, but in no event later than the next Business
Day, prepay an aggregate principal amount of the Swing Loans sufficient to
bring the Swing Line Exposure within the Swing Line Commitment.

 

(c)                                  Unless
otherwise designated by Borrower, each prepayment pursuant to Section 2.11(a) hereof
shall be applied in the following order (i) first, on a pro rata basis
among the outstanding Base Rate Loans, and (ii) second, among the
outstanding Eurodollar Loans in such manner as Borrower may specify (but pro
rata among the Lenders), provided that, if the outstanding principal amount of
any Eurodollar Loan shall be reduced to an amount less than the minimum amount
set forth in Section 2.5(d) hereof as a result of such prepayment,
then such Eurodollar Loan shall be converted into a Base Rate Loan on the date
of such prepayment.  Any prepayment of a
Eurodollar Loan pursuant to this Section 2.11 shall be subject to the
prepayment provisions set forth in Article III hereof.

 

Section 2.12.  Extension of Commitment.  Contemporaneously with the delivery of the
financial statements required pursuant to Section 5.3(b) hereof
(beginning with the financial statements for the fiscal year of Borrower ending
May 31, 2005), Borrower may deliver a Request for Extension, requesting
that the Lenders extend the maturity of the Revolving Credit Commitments for
one additional year.  Each such extension
shall require the unanimous written consent of all of the Lenders and shall be
upon such terms and conditions as may be agreed to by Agent, Borrower and the
Lenders.  Borrower shall pay any
attorneys’ fees or other expenses of Agent in connection with the documentation
of any such extension, as well as such other fees as may be agreed upon between
Borrower and Agent.

 

29

 

ARTICLE III.  ADDITIONAL
PROVISIONS RELATING TO

EURODOLLAR LOANS; INCREASED CAPITAL; TAXES

 

Section 3.1.  Requirements of Law.

 

(a)                                  If, after the
Closing Date (i) the adoption of or any change in any Requirement of Law
or in the interpretation or application thereof or (ii) the compliance by
any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority:

 

(A)                              shall subject
any Lender to any tax of any kind whatsoever with respect to this Agreement,
any Letter of Credit or any Eurodollar Loan made by it, or change the basis of
taxation of payments to such Lender in respect thereof (except for Taxes and
Excluded Taxes which are governed by Section 3.2 hereof);

 

(B)                                shall impose,
modify or hold applicable any reserve, special deposit, compulsory loan or
similar requirement against assets held by, deposits or other liabilities in or
for the account of, advances, loans or other extensions of credit by, or any
other acquisition of funds by, any office of such Lender that is not otherwise
included in the determination of the Eurodollar Rate; or

 

(C)                                shall impose on
such Lender any other condition;

 

and
the result of any of the foregoing is to increase the cost to such Lender of
making, converting into, continuing or maintaining Eurodollar Loans or issuing
or participating in Letters of Credit, or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, Borrower shall pay to
such Lender, promptly after receipt of a written request therefor, any
additional amounts necessary to compensate such Lender for such increased cost
or reduced amount receivable.  If any
Lender becomes entitled to claim any additional amounts pursuant to this
subsection (a), such Lender shall promptly notify Borrower (with a copy to
Agent) of the event by reason of which it has become so entitled.

 

(b)                                 If any Lender
shall have determined that, after the Closing Date, the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any corporation
controlling such Lender with any request or directive regarding capital
adequacy (whether or not having the force of law) from any Governmental
Authority shall have the effect of reducing the rate of return on such Lender’s
or such corporation’s capital as a consequence of its obligations hereunder, or
under or in respect of any Letter of Credit, to a level below that which such
Lender or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration the policies of such Lender or
corporation with respect to capital adequacy), then from time to time, upon
submission by such Lender to Borrower (with a copy to Agent) of a written
request therefor (which shall include the method for calculating such amount),
Borrower shall promptly pay or cause to be paid to such Lender such additional
amount or amounts as will compensate such Lender for such reduction.

 

30

 

(c)                                  A certificate
as to any additional amounts payable pursuant to this Section 3.1
submitted by any Lender to Borrower (with a copy to Agent) shall be conclusive
absent manifest error.  In determining
any such additional amounts, such Lender may use any reasonable method of
averaging and attribution that it shall deem applicable.  The obligations of Borrower pursuant to this Section 3.1
shall survive the termination of this Agreement and the payment of the Loans
and all other amounts payable hereunder.

 

(d)                                 No Lender shall
demand compensation pursuant to this Section 3.1 unless such Lender is
seeking similar compensation under comparable provisions of the documents and
agreements governing its loans for similarly situated borrowers.

 

Section 3.2.  Taxes.

 

(a)                                  All payments
made by any Credit Party under any Loan Document shall be made free and clear
of, and without deduction or withholding for or on account of any Taxes or
Other Taxes.  If any Taxes or Other Taxes
are required to be withheld from any amounts payable to Agent or any Lender
thereunder, the amounts so payable to Agent or such Lender shall be increased
to the extent necessary to yield to Agent or such Lender (after payment of all
Taxes and Other Taxes) interest or any such other amounts payable hereunder at
the rates or in the amounts specified in the Loan Documents.

 

(b)                                 In addition,
the Credit Parties shall pay Other Taxes to the relevant Governmental Authority
in accordance with applicable law.

 

(c)                                  Whenever any
Taxes or Other Taxes are required to be withheld and paid by a Credit Party,
such Credit Party shall timely withhold and pay such taxes to the relevant
Governmental Authorities.  As promptly as
possible thereafter, Borrower shall send to Agent for its own account or for
the account of the relevant Lender, as the case may be, a certified copy of an
original official receipt received by such Credit Party showing payment
thereof.  If such Credit Party shall fail
to pay any Taxes or Other Taxes when due to the appropriate taxing authority or
fails to remit to Agent the required receipts or other required documentary
evidence, Borrower shall indemnify Agent and the appropriate Lenders on demand
for any incremental taxes, interest or penalties that may become payable by
Agent or such Lender as a result of any such failure.

 

(d)                                 If any Lender
shall be so indemnified by a Credit Party, such Lender shall use reasonable
efforts to obtain the benefits of any refund, deduction or credit for any taxes
or other amounts with respect to the amount paid by such Credit Party and shall
reimburse such Credit Party to the extent, but only to the extent, that such
Lender shall receive a refund with respect to the amount paid by such Credit
Party or an effective net reduction in taxes or other governmental charges
(including any taxes imposed on or measured by the total net income of such
Lender) of the United States or any state or subdivision or any other
Governmental Authority thereof by virtue of any such deduction or credit, after
first giving effect to all other deductions and credits otherwise available to
such Lender.  If, at the time any audit
of such Lender’s income tax return is completed, such Lender determines, based
on such audit, that it shall not have been entitled to the full amount of any
refund reimbursed to such Credit Party as aforesaid or that its net income 

 

31

 

taxes
shall not have been reduced by a credit or deduction for the full amount
reimbursed to such Credit Party as aforesaid, such Credit Party, upon request
of such Lender, shall promptly pay to such Lender the amount so refunded to
which such Lender shall not have been so entitled, or the amount by which the
net income taxes of such Lender shall not have been so reduced, as the case may
be.

 

(e)                                  Each Lender
that is not (i) a citizen or resident of the United States of America, (ii) a
corporation, partnership or other entity created or organized in or under the
laws of the United States of America (or any jurisdiction thereof), or (iii) an
estate or trust that is subject to federal income taxation regardless of the
source of its income (any such Person, a “Non-U.S. Lender”) shall deliver to
Borrower and Agent two copies of either U.S. Internal Revenue Service Form W-8BEN
or Form W-8ECI, or, in the case of a Non-U.S. Lender claiming exemption
from U.S. federal withholding tax under Section 871(h) or 881(c) of
the Code with respect to payments of “portfolio interest”, a statement with
respect to such interest and a Form W-8BEN, or any subsequent versions
thereof or successors thereto, properly completed and duly executed by such
Non-U.S. Lender claiming complete exemption from, or a reduced rate of, U.S.
federal withholding tax on all payments by Credit Parties under this Agreement
and the other Loan Documents.  Such forms
shall be delivered by each Non-U.S. Lender on or before the date it becomes a
party to this Agreement or such other Loan Document.  In addition, each Non-U.S. Lender shall
deliver such forms or appropriate replacements promptly upon the obsolescence
or invalidity of any form previously delivered by such Non-U.S. Lender.  Each Non-U.S. Lender shall promptly notify
Borrower at any time it determines that such Lender is no longer in a position
to provide any previously delivered certificate to Borrower (or any other form
of certification adopted by the U.S. taxing authorities for such purpose).  Notwithstanding any other provision of this
subsection (e), a Non-U.S. Lender shall not be required to deliver any form
pursuant to this subsection (e) that such Non-U.S. Lender is not legally
able to deliver.

 

(f)                                    The agreements
in this Section 3.2 shall survive the termination of the Loan Documents
and the payment of the Loans and all other amounts payable hereunder.

 

(g)                                 For any period
with respect to which a Non-U.S. Lender has failed to provide Borrower with the
appropriate form, statement or other document described in subsection (e) above
(other than if such failure is due to a change in law, or in the interpretation
or application thereof, occuring subsequent to the date on which a form, certificate
or other document originally was required to be provided, or if such form
otherwise is not required under subsection (e) above), such Non-U.S.
Lender shall not be entitled to indemnification under Section 3.2(a), (b) or
(c) with respect to any additional Taxes imposed by the United States by
reason of such failure.

 

Section 3.3.  Funding Losses.  Borrower agrees to indemnify each Lender,
promptly after receipt of a written request therefor, and to hold each Lender
harmless from, any loss or expense that such Lender may sustain or incur as a
consequence of (a) default by Borrower in making a borrowing of,
conversion into or continuation of Eurodollar Loans after Borrower has given a
notice requesting the same in accordance with the provisions of this Agreement,
(b) default by Borrower in making any prepayment of or conversion from
Eurodollar Loans after Borrower has given a notice thereof in accordance with
the provisions of this Agreement, (c) the making of a 

 

32

 

prepayment
of a Eurodollar Loan on a day that is not the last day of an Interest Period
applicable thereto, or (d) any conversion of a Eurodollar Loan to a Base
Rate Loan pursuant to Section 3.4 hereof on a day that is not the last day
of an Interest Period applicable thereto. 
Such indemnification shall be in an amount equal to the excess, if any,
of (i) the amount of interest that would have accrued on the amounts so
prepaid, or not so borrowed, converted or continued, for the period from the
date of such prepayment or of such failure to borrow, convert or continue to
the last day of such Interest Period (or, in the case of a failure to borrow,
convert or continue, the Interest Period that would have commenced on the date
of such failure) at the applicable rate of interest for such Loans provided for
herein (excluding, however, the Applicable Margin included therein, if any)
over (ii) the amount of interest (as reasonably determined by such Lender)
that would have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the appropriate London
interbank market.  A certificate as to
any amounts payable pursuant to this Section 3.3 submitted to Borrower
(with a copy to Agent) by any Lender shall be conclusive absent manifest
error.  The obligations of Borrower
pursuant to this Section 3.3 shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.

 

Section 3.4.  Eurodollar Rate Lending Unlawful;
Inability to Determine Rate.

 

(a)                                  If any Lender
shall determine that, after the Closing Date, (i) the introduction of or
any change in or in the interpretation of any law makes it unlawful, or (ii) any
Governmental Authority asserts that it is unlawful, for such Lender to make or
continue any Loan as, or to convert (if permitted pursuant to this Agreement)
any Loan into, a Eurodollar Loan, the obligations of such Lender to make,
continue or convert any such Eurodollar Loan shall, upon such determination, be
suspended until such Lender shall notify Agent that the circumstances causing
such suspension no longer exist, and all outstanding Eurodollar Loans payable
to such Lender shall automatically convert (if conversion is permitted under
this Agreement) into a Base Rate Loan, or be repaid (if no conversion is
permitted) at the end of the then current Interest Periods with respect thereto
or sooner, if required by law or such assertion.

 

(b)                                 If Agent or the
Required Lenders determine that for any reason adequate and reasonable means do
not exist for determining the Eurodollar Rate for any requested Interest Period
with respect to a proposed Eurodollar Loan, or that the Eurodollar Rate for any
requested Interest Period with respect to a proposed Eurodollar Loan does not
adequately and fairly reflect the cost to the Lenders of funding such Loan,
Agent will promptly so notify Borrower and each Lender.  Thereafter, the obligation of the Lenders to
make or maintain such Eurodollar Loan shall be suspended until Agent (upon the
instruction of the Required Lenders) revokes such notice.  Upon receipt of such notice, Borrower may
revoke any pending request for a borrowing of, conversion to or continuation of
such Eurodollar Loan or, failing that, will be deemed to have converted such
request into a request for a borrowing of a Base Rate Loan in the amount
specified therein.

 

33

 

ARTICLE IV.  CONDITIONS
PRECEDENT

 

Section 4.1.  Conditions to Each Credit Event.  The obligation of the Lenders, the Fronting
Lender and the Swing Line Lender to participate in any Credit Event (other than
(a) the conversion of a Base Rate Loan to a Eurodollar Loan, (b) the
conversion of a Eurodollar Loan to a Base Rate Loan, (c) the continuation
of a Eurodollar Loan on any Interest Adjustment Date, (d) the prepayment
of a Eurodollar Loan prior to the end of an Interest Period (subject to any
amount payable under Article III hereof) and the borrowing on the same day
of a Base Rate Loan for the same amount, and (e) the payment of a Swing
Loan and the borrowing on the same day of a Base Rate Loan or Eurodollar Loan
for the same amount) shall be conditioned, in the case of each such Credit
Event, upon the following:

 

(i)                                     Borrower shall
have submitted a Notice of Loan (or with respect to a Letter of Credit,
complied with the provisions of Section 2.2(b) hereof) and otherwise
complied with Section 2.5 hereof;

 

(ii)                                  no Default or
Event of Default shall then exist or immediately after such Credit Event would
exist; and

 

(iii)                               each of the
representations and warranties contained in Article VI hereof shall be
true in all material respects as if made on and as of the date of such Credit
Event, except to the extent that any thereof expressly relate to an earlier
date.

 

Each
request by Borrower for a Credit Event shall be deemed to be a representation
and warranty by Borrower as of the date of such request as to the satisfaction
of the conditions precedent specified in subsections (ii) and
(iii) above.

 

Section 4.2.  Conditions to the First Credit Event.  The obligation of the Lenders, the Fronting
Lender and the Swing Line Lender to participate in the first Credit Event is
subject to Borrower satisfying each of the following conditions prior to or
concurrently with such Credit Event:

 

(a)                                  Notes.  Borrower shall have executed and delivered to
each Lender requesting a Revolving Credit Note its Revolving Credit Note and
shall have executed and delivered to the Swing Line Lender the Swing Line Note.

 

(b)                                 Guaranties of
Payment.  Each Guarantor of Payment
shall have executed and delivered to Agent a Guaranty of Payment.

 

(c)                                  Officer’s
Certificate, Resolutions, Organizational Documents.  Each Credit Party shall have delivered to
Agent an officer’s certificate (or comparable domestic or foreign documents)
certifying the names of the officers of such Credit Party authorized to sign
the Loan Documents, together with the true signatures of such officers and
certified copies of (i) the resolutions of the board of directors (or
comparable domestic or foreign documents) of such Credit Party evidencing
approval of the execution and delivery of the Loan Documents and the 

 

34

 

execution
of other Related Writings to which such Credit Party is a party, and (ii) the
Organizational Documents of such Credit Party.

 

(d)                                 Good Standing
and Full Force and Effect Certificates.  Borrower shall have delivered to Agent a good
standing certificate or full force and effect certificate, as the case may be,
for each Credit Party, issued on or about the Closing Date by the Secretary of
State in the state or states where such Credit Party is incorporated or formed.

 

(e)                                  Legal Opinion.  Borrower shall have delivered to Agent an
opinion of counsel for Parent, Borrower and each Significant Subsidiary, in
form and substance satisfactory to Agent and the Lenders.

 

(f)                                    Agent Fee
Letter, Closing Fee Letter and Other Fees.  Borrower shall have (i) executed and
delivered to Agent the Agent Fee Letter and paid the fees stated therein, (ii) executed
and delivered to Agent, for delivery to BOCM, the BOCM Fee Letter and paid the
fees stated therein, (iii) executed and delivered to Agent the
Closing Fee Letter and paid to Agent, for the benefit of the Lenders, the fees
stated therein, and (iv) paid all legal fees and expenses of Agent for
which Borrower has been invoiced in connection with the preparation and
negotiation of the Loan Documents.

 

(g)                                 Existing Credit
Agreement.  Borrower
shall have terminated (i) the Three-Year Credit Agreement among Borrower,
Parent, the lenders party thereto, and Bank One, NA, as agent, dated as of January 31,
2002, as amended, and (ii) the Twenty-One Month Credit Agreement among
Borrower, Parent, the lenders party thereto, and Bank One, NA, as agent, dated
as of April 30, 2003, as amended, which terminations shall be deemed to
have occurred upon payment in full of all of the Indebtedness outstanding
thereunder (other than Existing Letters of Credit or letters of credit
thereunder that are collateralized in a manner acceptable to Agent) and
termination of the commitments established therein.

 

(h)                                 Closing
Certificate.  Borrower
shall have delivered to Agent and the Lenders an officer’s certificate
certifying that, as of the Closing Date, (i) no Default or Event of
Default exists nor immediately after the making of the first Loan or the
issuance of the first Letter of Credit will exist, and (ii) each of the
representations and warranties contained in Article VI hereof are true and
correct as of the Closing Date.

 

(i)                                     Letter of
Direction.  To the
extent a Loan is requested on the Closing Date, Borrower shall have delivered
to Agent a letter of direction authorizing Agent, on behalf of the Lenders, to
disburse the proceeds of the Loans, which includes the transfer of funds under
this Agreement and wire instructions setting forth the locations to which such
funds shall be sent.

 

(j)                                     No Material
Adverse Change.  No material
adverse change, in the opinion of Agent, shall have occurred in the financial
condition or operations of the Companies taken as a whole since February 29,
2004.

 

35

 

(k)                                  Miscellaneous.  Borrower shall have provided to Agent and the
Lenders such other items and shall have satisfied such other conditions as may
be reasonably required by Agent or the Lenders.

 

ARTICLE V. 
COVENANTS

 

Section 5.1.  Insurance.  Each Company shall (a) maintain with
financially sound and reputable insurers insurance with coverage and limits as
required by law and as is customary with Persons engaged in the same businesses
as the Companies; and (b) within ten days of any Lender’s written request,
furnish to such Lender such information about such Company’s insurance as that
Lender may from time to time reasonably request, which information shall be
prepared in form and detail satisfactory to such Lender and certified by a
Financial Officer of such Company, as appropriate.

 

Section 5.2.  Money Obligations.  Each Company shall pay in full (a) prior
in each case to the date when penalties would attach, all taxes, assessments
and governmental charges and levies (except only those so long as and to the
extent that the same shall be contested in good faith by appropriate and timely
proceedings and for which adequate provisions have been established in
accordance with GAAP) for which it may be or become liable or to which any or
all of its properties may be or become subject; and (b) all of its wage
obligations to its employees in compliance with the Fair Labor Standards Act
(29 U.S.C. §§ 206-207) or any comparable provisions.

 

Section 5.3.  Financial Statements and Information.

 

(a)                                  Quarterly
Financials.  Borrower
shall deliver to Agent, within forty-five (45) days after the end of each of
the first three quarter-annual periods of each fiscal year of Parent, balance
sheets of the Companies as of the end of such period and statements of income
(loss), stockholders’ equity and cash flow for the quarter and fiscal year to
date periods, all prepared on a Consolidated basis, in accordance with GAAP,
and in form and detail satisfactory to Agent and the Lenders and certified by a
Financial Officer of Parent.

 

(b)                                 Annual Audit
Report.  Borrower shall deliver to
Agent, within ninety (90) days after the end of each fiscal year of Parent, an
annual audit report of the Companies for that year prepared on a Consolidated
and condensed consolidating basis (provided that consolidating statements need
not be certified by an independent public accountant), in accordance with GAAP,
and in form and detail satisfactory to Agent and the Lenders and certified by
an independent public accountant satisfactory to Agent, which report shall
include balance sheets and statements of income (loss), stockholders’ equity
and cash-flow for that period.

 

(c)                                  Compliance Certificate.  Borrower shall deliver to
Agent and the Lenders, concurrently with the delivery of the financial
statements set forth in subsections (a) and (b) above, a Compliance
Certificate.

 

36

 

(d)                                 Shareholder and
SEC Documents.  Borrower
shall deliver to Agent, as soon as available, copies of all registration
statements and annual and quarterly reports sent by Parent (in final form) to
the SEC.

 

(f)                                    Financial
Information of Companies. 
Borrower shall deliver to Agent and the Lenders, within ten days of the
written request of Agent or any Lender, such other information about the
financial condition, properties and operations of any Company as Agent or such
Lender may from time to time reasonably request, which information shall be
submitted in form and detail satisfactory to Agent or such Lender and certified
by a Financial Officer of the Company in question, as appropriate.

 

Section 5.4.  Financial Records.  Each Company shall at all times maintain true
and complete records and books of account, including, without limiting the
generality of the foregoing, appropriate provisions for possible losses and
liabilities, all in accordance with GAAP, and at all reasonable times (during
normal business hours and upon notice to such Company) permit Agent, or any
representative of Agent, to examine the books and records of such Company, as
requested, and to make excerpts therefrom and transcripts thereof.

 

Section 5.5.  Franchises; Change in Business.  Except as otherwise permitted pursuant to Section 5.12
hereof, each Credit Party shall preserve and maintain at all times its
existence, and its rights and franchises necessary for its business.

 

Section 5.6. 
ERISA Compliance.  No Company
shall incur any material accumulated funding deficiency within the meaning of
ERISA, or any material liability to the PBGC, established thereunder in connection
with any ERISA Plan.  Borrower shall
furnish to the Lenders (a) as soon as possible and in any event within
thirty (30) days after any Company knows or has reason to know that any
Reportable Event with respect to any ERISA Plan has occurred, a statement of a
Financial Officer of such Company, setting forth details as to such Reportable
Event and the action that such Company proposes to take with respect thereto,
together with a copy of the notice of such Reportable Event given to the PBGC
if a copy of such notice is available to such Company, and (b) promptly
after receipt thereof a copy of any notice such Company, or any member of the
Controlled Group may receive from the PBGC or the Internal Revenue Service with
respect to any ERISA Plan administered by such Company; provided, that this
latter clause shall not apply to notices of general application promulgated by
the PBGC or the Internal Revenue Service. 
Borrower shall promptly notify the Lenders of any material taxes
assessed, proposed to be assessed or that Borrower has reason to believe may be
assessed against a Company by the Internal Revenue Service with respect to any
ERISA Plan.  As used in this Section 5.6,
“material” means the measure of a matter of significance that shall be
determined as being an amount equal to five percent (5%) of Consolidated Net
Worth.  As soon as practicable, and in
any event within thirty (30) days, after any Company shall become aware that an
ERISA Event shall have occurred, such Company shall provide Agent with notice
of such ERISA Event with a certificate by a Financial Officer of such Company
setting forth the details of the event and the action such Company or another
Controlled Group member proposes to take with respect thereto.  Borrower shall, at the request of Agent or
any Lender after the occurrence and during the continuance of an Event of
Default, deliver or cause to be delivered to 

 

37

 

Agent
or such Lender, as the case may be, true and correct copies of any documents
relating to the ERISA Plan of any Company.

 

Section 5.7.  Financial Covenants.

 

(a)                                  Capitalization
Ratio.  The Companies shall not suffer
or permit at any time the Capitalization Ratio to exceed 0.40 to 1.00.

 

(b)                                 Interest
Coverage Ratio.  The Companies
shall not suffer or permit at any time the Interest Coverage Ratio to be less
than 3.00 to 1.00.

 

Section 5.8.  Borrowing.  No Company (other than Parent, Borrower or a
Guarantor of Payment) shall create, incur or have outstanding any Indebtedness
of any kind; provided that this Section 5.8 shall not apply to the
following:

 

(a)                                  the Loans, the
Letters of Credit or any other Indebtedness under this Agreement;

 

(b)                                 in addition to
other Indebtedness permitted to be incurred pursuant to this Section 5.8,
the Indebtedness existing on the Closing Date as set forth in Schedule 5.8
hereto (and any extension, renewal or refinancing thereof so long as the
principal amount thereof shall not be increased after the Closing Date);

 

(c)                                  Indebtedness
incurred or assumed in connection with an Acquisition permitted pursuant to Section 5.13
hereof, so long as such Indebtedness existed at the time such Acquisition was
consummated and was not created in contemplation of, in connection with, or in
the consummation of such Acquisition (and any extension, renewal or refinancing
thereof so long as the principal amount thereof shall not be increased);

 

(d)                                 Indebtedness
arising from (i) the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business, or (ii) the
honoring of a bank or other financial institution of a check, draft or similar
instrument inadvertently (except in the case of daylight overdrafts) drawn
against insufficient funds in the ordinary course of business; or

 

(e)                                  other
Indebtedness not in excess of the aggregate amount at any time outstanding, for
all of the Companies, of twenty-five percent (25%) of Consolidated Net Worth.

 

Section 5.9.  Liens. 
No Company shall create, assume or suffer to exist any Lien upon any of
its property or assets, whether now owned or hereafter acquired; provided that
this Section shall not apply to the following:

 

(a)                                  Liens for taxes
not yet due or that are being actively contested in good faith by appropriate
proceedings and for which adequate reserves shall have been established in
accordance with GAAP;

 

38

 

(b)                                 other statutory
Liens incidental to the conduct of its business or the ownership of its
property and assets that (i) were not incurred in connection with the
borrowing of money or the obtaining of advances or credit, and (ii) do not
in the aggregate materially detract from the value of its property or assets or
materially impair the use thereof in the operation of its business;

 

(c)                                  easements or
other minor defects or irregularities in title of real property not interfering
in any material respect with the use of such property in the business of any
Company;

 

(d)                                 any Lien
granted to Agent, for the benefit of the Lenders;

 

(e)                                  the Liens
existing on the Closing Date as set forth in Schedule 5.9 hereto and
replacements, extensions, renewals, refundings or refinancings thereof, but
only to the extent that the amount of debt secured thereby shall not be
increased; or

 

(f)                                    any other Liens
securing Indebtedness of the Companies not in excess of, for all of the
Companies, twenty-five percent (25%) of Consolidated Net Worth.

 

Section 5.10.  Regulations T, U and X.  No Company shall take any action that would
result in any non-compliance of the Loans or Letters of Credit with Regulations
T, U or X, or any other applicable regulation, of the Board of Governors of the
Federal Reserve System.

 

Section 5.11.  Investments and Loans.  No Company shall, without the prior written
consent of the Required Lenders, (a) create, acquire or hold any
Subsidiary, (b) make or hold any investment in any stocks, bonds or
securities of any kind, (c) be or become a party to any joint venture or
other partnership, or (d) make or keep outstanding any advance or loan to
any Person; provided that this Section 5.11 shall not apply to the
following:

 

(i)                                     any endorsement
of a check or other medium of payment for deposit or collection through normal
banking channels or similar transaction in the normal course of business;

 

(ii)                                  any investment
in Cash Equivalents;

 

(iii)                               the holding of
each of the Subsidiaries listed on Schedule 6.1 hereto and investments
therein, and the creation, acquisition and holding of and the making of
investments in any new Subsidiary after the Closing Date so long as such new
Subsidiary shall have been created, acquired or held in accordance with the
terms and conditions of this Agreement;

 

(iv)                              any other
investments or loans in an aggregate amount not to exceed, for all of the
Companies in any fiscal year, twenty-five percent (25%) of Consolidated Net
Worth as of the beginning of such fiscal year; or

 

(v)                                 Acquisitions
may be effected in accordance with the provisions of Section 5.13 hereof.

 

39

 

Section 5.12.  Merger and Sale of Assets.  No Company shall merge, amalgamate or
consolidate with any other Person, or sell, lease or transfer or otherwise
dispose of any assets to any Person (other than Borrower or any other Credit
Party) other than in the ordinary course of business, except that, if no
Default or Event of Default shall then exist or immediately thereafter shall
begin to exist:

 

(a)                                  any Subsidiary
of Parent (other than Borrower or a Guarantor of Payment) may merge with or
sell, lease, transfer or otherwise dispose of any of its assets to any Company;

 

(b)                                 any Subsidiary
of Borrower may merge with or sell, lease, transfer or otherwise dispose of any
of its assets to any other Subsidiary of Borrower;

 

(c)                                  any Company may
sell, lease, transfer or otherwise dispose of any assets that are obsolete or
no longer useful in such Company’s business;

 

(d)                                 any Company may
sell, lease, transfer or otherwise dispose (whether in one transaction or a
series of related transactions) of any of its assets to any other Person, so
long as the aggregate fair market value of the assets being sold, leased,
transferred or otherwise disposed of, in the aggregate for all Companies, shall
not constitute (i) during the twelve (12) month period ending with the
month prior to the month in which any such sale, lease, transfer or
disposition, a Substantial Portion as determined under subparts (a) and (b) of
the definition of Substantial Portion, or (ii) on or after the date of
this Agreement, a Substantial Portion as determined under subparts (c) and
(d) of the definition of Substantial Portion; and

 

(e)                                  Acquisitions
may be effected in accordance with the provisions of Section 5.13 hereof.

 

Notwithstanding
anything in this Section 5.12 to the contrary, (A) no sale, lease, transfer
or other disposition of assets by a Company may be effectuated (other than in
the ordinary course or pursuant to subsections (a) or (b) above) if
any Default or Event of Default has occurred and is continuing, and (B) all
sales, leases, transfers and other dispositions of assets at any time shall be
for not materially less than the fair market value of such assets as determined
in good faith by Parent.

 

Section 5.13.  Acquisitions.  No Company shall effect an Acquisition if the
aggregate Consideration paid for such Acquisition exceeds twenty-five percent
(25%) of Consolidated Net Worth, as determined for the most recently completed
fiscal quarter of Parent, unless, prior to consummation of such Acquisition,
Borrower shall have provided to Agent a certificate of a Financial Officer
showing pro forma compliance with Section 5.7 hereof after giving effect
to the proposed Acquisition.

 

Section 5.14.  Notice.  Borrower shall cause a Financial Officer to
promptly notify Agent whenever any Default or Event of Default may occur
hereunder or any representation or warranty made in Article VI hereof or
elsewhere in this Agreement or in any other Loan Document may for any reason
cease in any material respect to be true and complete.

 

40

 

Section 5.15. 
Environmental Compliance.  Each Company
shall comply in all material respects with any and all Environmental Laws
including, without limitation, all Environmental Laws in jurisdictions in which
such Company owns or operates a facility or site, arranges for disposal or
treatment of hazardous substances, solid waste or other wastes, accepts for
transport any hazardous substances, solid waste or other wastes or holds any
interest in real property or otherwise. 
Borrower shall furnish to the Lenders, promptly after receipt thereof, a
copy of any notice such Company may receive from any Governmental Authority,
private Person or otherwise that any material litigation or proceeding
pertaining to any environmental, health or safety matter has been filed or is
threatened against such Company, any real property in which such Company holds
any interest or any past or present operation of such Company.  No Company shall allow the release or disposal
of hazardous waste, solid waste or other wastes on, under or to any real
property in which any Company holds any interest or performs any of its
operations, in violation of any Environmental Law except to the extent such
release or disposal does not or is not reasonably expected to have a Material
Adverse Effect.  As used in this Section,
“litigation or proceeding” means any demand, claim, notice, suit, suit in
equity action, administrative action, investigation or inquiry whether brought
by any Governmental Authority, private Person or otherwise.  Borrower shall defend, indemnify and hold
Agent and the Lenders harmless against all costs, expenses, claims, damages,
penalties and liabilities of every kind or nature whatsoever (including
attorneys’ fees) arising out of or resulting from the noncompliance of any
Company with any Environmental Law.  Such
indemnification shall survive any termination of this Agreement.

 

Section 5.16. 
Affiliate Transactions.  No Company
shall, directly or indirectly, enter into or permit to exist any transaction (including,
without limitation, the purchase, sale, lease or exchange of any property or
the rendering of any service) with any Affiliate (other than a Company that is
a Credit Party) on terms that shall be less favorable to such Company than
those that might be obtained at the time in a transaction with a non-Affiliate;
provided, however, that the foregoing shall not prohibit the payment of
customary and reasonable directors’ fees to directors who are not employees of
a Company or an Affiliate.

 

Section 5.17.  Use of Proceeds.  Borrower’s use of the proceeds of the
Commitment shall be solely for working capital and other general corporate
purposes of Parent and its Subsidiaries and for Acquisitions and the repayment
of existing Indebtedness.

 

Section 5.18.  Subsidiary Guaranties.

 

(a)                                  Provision of
Subsidiary Guaranties.  Each
Significant Subsidiary created, acquired or held subsequent to the Closing
Date, shall promptly execute and deliver to Agent, for the benefit of the
Lenders, a Guaranty of Payment of all of the Obligations, such agreement to be
in the form of Exhibit H hereto, along with any such other
supporting documentation, corporate governance and authorization documents, and
an opinion of counsel as may be deemed reasonably necessary or advisable by Agent.

 

(b)                                 Release of
Non-Significant Subsidiary Guaranties.  Borrower may from time to time request that
certain Guarantors of Payment (other than Parent) be released from their
respective Guaranties of Payment (and Agent is authorized by the Lenders to release
such 

 

41

 

Guarantors
of Payment from their Guaranty of Payment); provided that, as of the date of
such release, such Subsidiary does not constitute a Significant Subsidiary and
no Default or Event of Default shall exist or be caused thereby.  In connection with granting any such release,
Agent shall be entitled to rely on a representation by Borrower that the
conditions to such release are satisfied.

 

(c)                                  Release of
Guarantor Upon Sale or Disposition.  Upon the sale or disposition permitted under
this Agreement of a Guarantor of Payment other than Parent (by merger or
otherwise) to a Person that is not an Affiliate, and which sale or disposition
is otherwise in compliance with the terms of this Agreement, Agent shall
release such Guarantor of Payment from its Guaranty of Payment upon the written
request of Borrower and, if required by Agent, a certificate of a Financial
Officer and an opinion of counsel to the effect that the transaction giving
rise to the release of such Guaranty of Payment was made in accordance with the
provisions of this Agreement.

 

(d)                                 Guarantor of
Senior Note Indebtedness. 
Notwithstanding anything herein to the contrary, Borrower shall cause to
be executed and delivered to Agent and the Lenders, Guaranties of Payment of
each Subsidiary of Parent (other than Borrower or an existing Guarantor of
Payment) that is liable at any time, whether as a direct borrower, a Guarantor
or otherwise, under the Senior Note Indebtedness, with such Guaranties of
Payment to be delivered simultaneously with such Subsidiary becoming so liable
under the Senior Note Indebtedness; provided, however, that (a) in the
event that any such Subsidiary is only liable for a portion of the Senior Note
Indebtedness, the Guaranty of Payment delivered by such Subsidiary shall be
limited to an undivided percentage of the Indebtedness created under this
Agreement equal to the proportion that the liability of such Subsidiary in
respect of the Senior Note Indebtedness bears to the entire amount of the
Senior Note Indebtedness; and (b) the foregoing provisions shall not limit
the right of Parent to request a release from any such Guaranty of Payment in
the event that such Subsidiary ceases to be obligated in respect of the Senior
Note Indebtedness or the obligations of the Lenders to grant such a release, in
each case in accordance with the terms hereof.

 

(e)                                  Additions to
Guarantors.  Borrower
may, in its sole and absolute discretion, designate any Subsidiary of Parent
(that is not already a Guarantor or Payment) to become a Guarantor of Payment
hereunder by executing and delivering a Guaranty of Payment to Agent.

 

(f)                                    Deliveries.  In connection with the delivery of any
Guaranty of Payment under this Section 5.18, Borrower shall provide such
other documentation to Agent, including, without limitation, one or more
opinions of counsel satisfactory to Agent, corporate documents and resolutions,
which, in the reasonable opinion of Agent, is necessary or advisable in
connection therewith.

 

(g)                                 Effectiveness
of Release.  No release
of a Guarantor of Payment under this Section 5.18 shall be effective until
such release has been given in writing by Agent.  Any Guarantor of Payment not so released in
writing shall remain liable for the full amount of the Obligations.

 

42

 

Section 5.19.  Restrictive Agreements.  Except as set forth in this Agreement, the
Companies shall not directly or indirectly, create or otherwise cause or suffer
to exist or become effective any encumbrance or restriction on the ability of
any Subsidiary to (a) make, directly or indirectly, any Capital
Distribution to Borrower, (b) make, directly or indirectly, loans or
advances or capital contributions to Borrower or (c) transfer, directly or
indirectly, any of the properties or assets of such Subsidiary to Borrower;
except for such encumbrances or restrictions existing under or by reason of (i) applicable
law, (ii) customary non-assignment provisions in leases or other agreements
entered in the ordinary course of business and consistent with past practices, (iii) customary
restrictions in security agreements or mortgages securing Indebtedness or
capital leases, of a Company to the extent such restrictions shall only
restrict the transfer of the property subject to such security agreement,
mortgage or lease, (iv) restrictions with respect to a Subsidiary imposed
pursuant to an agreement which has been entered into in connection with the
disposition of all or substantially all of the assets or capital stock of such
Subsidiary, or (v) any restrictions with respect to any assets subject to
a Lien permitted under Section 5.9 hereof.

 

Section 5.20. 
Pari Passu Ranking.  The Obligations
shall, and Borrower shall take all necessary action to ensure that the
Obligations shall, at all times, rank at least pari passu in right of payment
with all other senior unsecured Indebtedness of Parent and Borrower.

 

Section 5.21.  Amendment of Organizational Documents.  No Company shall amend its Organizational
Documents to amend its Organizational Documents in any manner which is
reasonably expected to have a Material Adverse Effect, without prior notice to
Agent and the Lenders.

 

ARTICLE VI.  REPRESENTATIONS
AND WARRANTIES

 

Section 6.1.  Corporate Existence; Subsidiaries; Foreign
Qualification.  Each Company is duly
organized, validly existing, and in good standing under the laws of its state
or jurisdiction of incorporation or organization and is duly qualified and
authorized to do business and is in good standing as a foreign entity in each
jurisdiction where the character of its property or business activities makes
such qualification necessary, except where a failure to qualify will not result
in a Material Adverse Effect.  Each
Foreign Subsidiary is validly existing under the laws of its jurisdiction of
organization.  Schedule 6.1 hereto
sets forth, as of the Closing Date, each Subsidiary of Parent (and whether such
Subsidiary is a Dormant Subsidiary or a Significant Subsidiary), its state of
formation, its relationship to Parent, including the percentage of each class
of stock owned by a Company, each Person that owns the stock or other equity
interest of each Company.

 

Section 6.2.  Corporate Authority.  Each Credit Party has the right and power and
is duly authorized and empowered to enter into, execute and deliver the Loan
Documents to which it is a party and to perform and observe the provisions of
the Loan Documents.  The Loan Documents
to which each Credit Party is a party have been duly authorized and approved by
such Credit Party’s board of directors or other governing body, as applicable,
and are the valid and binding obligations of such Credit Party, enforceable
against such Credit Party in accordance with their 

 

43

 

respective
terms, except as enforcement may be limited by bankruptcy or insolvency laws or
similar laws affecting the rights of creditors generally or by general
principles of equity.  The execution,
delivery and performance of the Loan Documents will not conflict with nor
result in any breach in any of the provisions of, or constitute a default
under, or result in the creation of any Lien (other than Liens permitted under Section 5.9
hereof) upon any assets or property of any Credit Party under the provisions
of, such Credit Party’s Organizational Documents or any agreement to which a
Credit Party is a party or by which such Credit Party or its property is bound.

 

Section 6.3.  Compliance with Laws and Contracts.  Each Company:

 

(a)                                  holds permits,
certificates, licenses, orders, registrations, franchises, authorizations, and
other approvals from any Governmental Authority necessary for the conduct of
its business and is in compliance with all applicable laws relating thereto;

 

(b)                                 is in
compliance with all federal, state, local, or foreign applicable statutes,
rules, regulations, and orders including, without limitation, those relating to
environmental protection, occupational safety and health, and equal employment
practices; and

 

(c)                                  is not in
violation of or in default under any agreement to which it is a party or by
which its assets are subject or bound;

 

except
where the failure to hold such permits, certificates, licenses, orders,
registrations, franchises, authorizations or approvals, or where any such
non-compliance or violation, would not reasonably be expected to have a
Material Adverse Effect.

 

Section 6.4.  Litigation and Administrative Proceedings.  As of the Closing Date, except as disclosed
on Schedule 6.4 hereto, there are (a) no lawsuits, actions,
investigations, or other proceedings pending or threatened against any Company,
or in respect of which any Company may have any liability, in any court or
before any Governmental Authority, arbitration board, or other tribunal,
(b) no orders, writs, injunctions, judgments, or decrees of any court or
government agency or instrumentality to which any Company is a party or by
which the property or assets of any Company are bound, and (c) no
grievances, disputes, or controversies outstanding with any union or other
organization of the employees of any Company, or threats of work stoppage,
strike, or pending demands for collective bargaining, in each case, which would
be expected to have a Material Adverse Effect.

 

Section 6.5.  Title to Assets.  Each Company has good title to and ownership
of all property it purports to own, which property is free and clear of all
Liens, except those permitted under Section 5.9 hereof.

 

Section 6.6.  Tax Returns.  All federal, state and local tax returns and
other reports required by law to be filed in respect of the income, business,
properties and employees of each Company have been filed and all taxes,
assessments, fees and other governmental charges that are due and payable have
been paid, except as otherwise permitted herein or where the failure to do so
could not reasonably be expected to cause or result in a Material Adverse
Effect.  The 

 

44

 

provision
for taxes on the books of each Company is adequate for all years not closed by
applicable statutes and for the current fiscal year.

 

Section 6.7.  Environmental Matters.  As of the Closing Date, based upon a review
of the effect of Environmental Laws on the business of Parent and its
Subsidiaries Parent has concluded that there have been no violations of
Environmental Laws, and there are no reasonably foreseeable violations of
Environmental Laws, that could reasonably be expected to have a Material
Adverse Effect.  As of the Closing Date,
neither Parent nor any Subsidiary has received any notice to the effect that
its operations are not in material compliance with any of the requirements of
applicable Environmental Laws or are the subject of any federal or state
investigation evaluating whether any remedial action is needed to respond to a
release of any toxic or hazardous waste or substance into the environment,
which non-compliance or remedial action could reasonably be expected to have a
Material Adverse Effect.

 

Section 6.8.  Continued Business.  There exists no actual, pending, or, to
Borrower’s knowledge, any threatened termination, cancellation or limitation
of, or any modification or change in the business relationship of any Company
and any customer or supplier, or any group of customers or suppliers, whose
purchases or supplies, individually or in the aggregate, are material to the
business of any Company, and there exists no present condition or state of
facts or circumstances that would have a Material Adverse Effect or prevent a
Company from conducting such business or the transactions contemplated by this
Agreement in substantially the same manner in which it was previously
conducted.

 

Section 6.9.  Employee Benefits Plans.  No ERISA Event is expected to occur with
respect to an ERISA Plan.  Full payment
has been made of all amounts that a Controlled Group member is required, under
applicable law or under the governing documents, to have paid as a contribution
to or a benefit under each ERISA Plan. 
The liability of each Controlled Group member with respect to each ERISA
Plan has been funded based upon reasonable and proper actuarial assumptions,
has been insured, or has been fully reserved for on its financial statements
other than any failure to fund or failure to insure or reserve which is not
material.  No changes have occurred or
are expected to occur that would cause a material increase in the cost of
providing benefits under the ERISA Plan. 
With respect to each ERISA Plan that is intended to be qualified under
Code Section 401(a), (a) the ERISA Plan and any associated trust
operationally comply in all material respects with the applicable requirements
of Code Section 401(a); (b) the ERISA Plan and any associated trust
have been amended to comply in all material respects with all such requirements
as currently in effect, other than those requirements for which a retroactive
amendment can be made within the “remedial amendment period” available under
Code Section 401(b) (as extended under Treasury Regulations and other
Treasury pronouncements upon which taxpayers may rely); (c) the ERISA Plan
and any associated trust have received a favorable determination letter from
the Internal Revenue Service stating that the ERISA Plan qualifies under Code Section 401(a),
that the associated trust qualifies under Code Section 501(a) and, if
applicable, that any cash or deferred arrangement under the ERISA Plan
qualifies under Code Section 401(k), unless the ERISA Plan was first
adopted at a time for which the above-described “remedial amendment period” has
not yet expired or an application for a favorable determination is pending; (d) the
ERISA Plan currently satisfies the requirements of Code Section 410(b),
subject to any retroactive amendment that may be made within the

 

45

 

above-described
“remedial amendment period”; and (e) no contribution made to the ERISA
Plan is subject to an excise tax under Code Section 4972.  With respect to any Pension Plan, the “accumulated
benefit obligation” of Controlled Group members with respect to the Pension
Plan (as determined in accordance with Statement of Accounting Standards No. 87,
“Employers’ Accounting for Pensions”) does not exceed the fair market value of
Pension Plan assets by any amount which would be material.  As used in this Section 6.9 “material”
shall have the meaning ascribed thereto in Section 5.6 hereof.

 

Section 6.10.  Consents or Approvals.  No consent, approval or authorization of, or
filing, registration or qualification with, any Governmental Authority or any
other Person is required to be obtained or completed by any Company in
connection with the execution, delivery or performance of any of the Loan
Documents, that has not already been obtained or completed.

 

Section 6.11.  Solvency.  Borrower has received consideration that is
the reasonable equivalent value of the obligations and liabilities that
Borrower has incurred to Agent and the Lenders. 
Borrower is not insolvent as defined in any applicable state, federal or
relevant foreign statute, nor will Borrower be rendered insolvent by the
execution and delivery of the Loan Documents to Agent and the Lenders.  Borrower is not engaged or about to engage in
any business or transaction for which the assets retained by it are or will be
an unreasonably small amount of capital, taking into consideration the
obligations to Agent and the Lenders incurred hereunder.  Borrower does not intend to, nor does it
believe that it will, incur debts beyond its ability to pay such debts as they
mature.

 

Section 6.12.  Financial Statements.  The audited Consolidated financial statements
of Parent for the fiscal year ended May 31, 2003, and the unaudited
Consolidated financial statements of Parent for the fiscal quarter ended February 29,
2004, furnished to Agent and the Lenders, are true and complete in all material
respects, have been prepared in accordance with GAAP, and fairly present the
financial condition of the Companies as of the dates of such financial
statements and the results of their operations for the periods then ending.  As of the Closing Date, since the dates of
such statements, there has been no material adverse change in the financial
condition, properties or business of any Company or any change in accounting
procedures of any Company except as required by GAAP.

 

Section 6.13.  Regulations T, U and X.  Neither Parent nor any of its Subsidiaries
extends or maintains, in the ordinary course of business, credit for the
purpose, whether immediate, incidental, or ultimate, of buying or carrying
margin stock, and no part of the proceeds of any Loan will be used for the
purpose, whether immediate, incidental, or ultimate, of buying or carrying any
such margin stock or maintaining or extending credit to others for such purpose
in any way that would violate Regulation T, U or X.  After applying the proceeds of each Loan,
margin stock will not constitute more than twenty-five percent (25%) of the
value of the assets (either of Borrower alone or of Parent and its Subsidiaries
on a Consolidated basis) that are subject to any provisions of any Loan
Document that may cause the Loans to be deemed secured, directly or indirectly,
by margin stock.  Parent and its
Subsidiaries are in compliance with Section 5.17 hereof.

 

46

 

Section 6.14.  Material Agreements.  Neither Parent nor any Subsidiary is a party
to any agreement or instrument or subject to any charter or other corporate
restriction that could reasonably be expected to have a Material Adverse
Effect.  Neither Parent nor any
Subsidiary is in default in the performance, observance or fulfillment of any
of the obligations, covenants or conditions contained in (a) any agreement
to which it is a party, which default could reasonably be expected to have a
Material Adverse Effect or (b) any Material Indebtedness Agreement.

 

Section 6.15.  Intellectual Property.  Each Company owns or has the right to use all
of the patents, patent applications, industrial designs, trademarks, service
marks, copyrights, licenses, and rights with respect to the foregoing necessary
for the conduct of its business without any known conflict with the rights of
others, except to the extent any such conflict would not have a Material
Adverse Effect.

 

Section 6.16.  Insurance.  Each Company maintains with financially sound
and reputable insurers insurance with coverage and limits as required by law
and as is customary with Persons engaged in the same businesses as the
Companies.

 

Section 6.17.  Accurate and Complete Statements.  Neither the Loan Documents nor any written statement
made by any Company in connection with any of the Loan Documents contains any
untrue statement of a material fact or omits a material fact necessary to make
the statements contained therein or in the Loan Documents not misleading in
light of the context in which such statements are made.  After due inquiry by Borrower, there is no
known fact that any Company has not disclosed to Agent and the Lenders that has
or is likely to have a Material Adverse Effect.

 

Section 6.18.  Investment Company; Holding Company.  No Company is (a) an “investment company”
or a company “controlled” by an “investment company” within the meaning of the
Investment Company Act of 1940, as amended, or (b) subject to regulation
under the Public Utility Holding Company Act of 1935 or the Federal Power Act,
each as amended, or any foreign, federal, state or local statute or regulation
limiting its ability to incur Indebtedness.

 

Section 6.19.  Defaults.  No Default or Event of Default exists
hereunder, nor will any begin to exist immediately after the execution and
delivery hereof.

 

ARTICLE VII.  EVENTS OF
DEFAULT

 

Each
of the following shall constitute an Event of Default hereunder:

 

Section 7.1.  Payments.  If (a) the interest on any Loan or any
facility, utilization or other fee shall not be paid in full punctually when
due and payable or within five Business Days thereafter, or (b) the
principal of any Loan or any obligation under any Letter of Credit shall not be
paid in full when due and payable.

 

Section 7.2.  Special Covenants.  If any Company shall fail or omit to perform
and observe Section 5.7, 5.8, 5.9, 5.11, 5.12 or 5.13 hereof.

 

47

 

Section 7.3.  Other Covenants.  If any Company shall fail or omit to perform
and observe any agreement or other provision (other than those referred to in Section 7.1
or 7.2 hereof) contained or referred to in this Agreement or any other Loan
Document that is on the part of such Company to be complied with, and that
Default shall not have been fully corrected within thirty (30) days after the
earlier of (a) any Financial Officer of such Company becomes aware of the
occurrence thereof, or (b) the giving of written notice thereof to
Borrower by Agent or the Required Lenders that the specified Default is to be
remedied.

 

Section 7.4.  Representations and Warranties.  If any representation, warranty or statement
made in or pursuant to this Agreement or any other Loan Document shall be false
or erroneous in any material respect when made.

 

Section 7.5.  Cross Default.  If any Company shall default in the payment
of principal or interest due and owing under any Material Indebtedness
Agreement beyond any period of grace provided with respect thereto or in the
performance or observance of any other provision, term or condition contained
in such Material Indebtedness Agreement under which such obligation is created,
if the effect of such default is to allow the acceleration of the maturity of
such Indebtedness or to permit the holder thereof to cause such Indebtedness to
become due prior to its stated maturity.

 

Section 7.6.  ERISA Default.  The occurrence of one or more ERISA Events
that (a) the Required Lenders determine could have a Material Adverse
Effect, or (b) results in a Lien on any of the material portion of the
assets of any Company (as defined in Section 5.6 hereof).

 

Section 7.7.  Change in Control.  If any Change in Control shall occur.

 

Section 7.8.  Money Judgment.  A final judgment or order for the payment of
money shall be rendered against any Company by a court of competent
jurisdiction, that remains unpaid or unstayed and undischarged for a period
(during which execution shall not be effectively stayed) of ninety (90) days
after the date on which the right to appeal has expired, provided that the
aggregate of all such judgments for all such Companies shall exceed Fifteen
Million Dollars ($15,000,000).

 

Section 7.9.  Validity of Loan Documents.  (a) the validity, binding effect or
enforceability of any Material Loan Document against any Credit Party shall be
contested by any Credit Party; (b) any Credit Party shall deny that it has
any or further liability or obligation under any Loan Document; or (c) any
Material Loan Document shall be terminated, invalidated or set aside, or be
declared ineffective or inoperative or in any way cease to give or provide to
Agent and the Lenders the benefits purported to be created thereby.  As used herein “Material Loan Documents”
shall mean this Agreement, each Note and each Guaranty of Payment.

 

Section 7.10.  Solvency.  If any Company (other than a Dormant
Subsidiary) shall (a) except as permitted pursuant to Section 5.12
hereof, discontinue business, (b) generally not pay its debts as such
debts become due, (c) make a general assignment for the benefit of creditors,
(d) apply for or consent to the appointment of a receiver, a custodian, a
trustee, an

 

48

 

interim
trustee or liquidator of all or a substantial part of its assets, (e) be
adjudicated a debtor or insolvent or have entered against it an order for
relief under Title 11 of the United States Code, or under any other bankruptcy
insolvency, liquidation, winding-up, corporate or similar statute or law,
foreign, federal state or provincial, in any applicable jurisdiction, now or
hereafter existing, as any of the foregoing may be amended from time to time,
or other applicable statute for jurisdictions outside of the United States, as
the case may be, (f) file a voluntary petition in bankruptcy, or have an
involuntary proceeding filed against it and the same shall continue undismissed
for a period of sixty (60) consecutive days from commencement of such
proceeding or case, or file a petition or an answer seeking reorganization or
an arrangement with creditors or seeking to take advantage of any other law
(whether federal or state, or, if applicable, other jurisdiction) relating to
relief of debtors, or admit (by answer, by default or otherwise) the material
allegations of a petition filed against it in any bankruptcy, reorganization,
insolvency or other proceeding (whether federal or state, or, if applicable,
other jurisdiction) relating to relief of debtors, (g) suffer or permit to
continue unstayed and in effect for sixty (60) consecutive days any judgment,
decree or order entered by a court of competent jurisdiction, that approves a
petition seeking its reorganization or appoints a receiver, custodian, trustee,
interim trustee or liquidator of all or a substantial part of its assets, (h) have
an administrative receiver appointed over the whole or substantially the whole
of its assets, or (i) take any action in order thereby to effect any of
the foregoing.

 

ARTICLE VIII.  REMEDIES UPON
DEFAULT

 

Notwithstanding
any contrary provision or inference herein or elsewhere:

 

Section 8.1.  Optional Defaults.  If any Event of Default referred to in Section 7.1,
7.2, 7.3, 7.4, 7.5, 7.6, 7.7, 7.8, or 7.9 hereof shall occur, Agent may, with
the consent of the Required Lenders, and shall, at the request of the Required
Lenders, give written notice to Borrower, to:

 

(a)           terminate the Commitment, if not
previously terminated, and, immediately upon such election, the obligations of
the Lenders, and each thereof, to make any further Loan and the obligation of
the Fronting Lender to issue any Letter of Credit immediately shall be
terminated; and/or

 

(b)           accelerate the maturity of all of the
Obligations (if the Obligations are not already due and payable), whereupon all
of the Obligations shall become and thereafter be immediately due and payable
in full without any presentment or demand and without any further or other
notice of any kind, all of which are hereby waived by Borrower.

 

Section 8.2.  Automatic Defaults.  If any Event of Default referred to in Section 7.10
hereof shall occur:

 

(a)           all of the Commitment shall
automatically and immediately terminate, if not previously terminated, and no
Lender thereafter shall be under any obligation to grant any further Loan, nor
shall the Fronting Lender be obligated to issue any Letter of Credit; and

 

49

 

(b)           the principal of and interest then
outstanding on all of the Loans, and all of the other Obligations, shall
thereupon become and thereafter be immediately due and payable in full (if the
Obligations are not already due and payable), all without any presentment,
demand or notice of any kind, which are hereby waived by Borrower.

 

Section 8.3.  Letters of Credit.  If the maturity of the Obligations shall be
accelerated pursuant to Section 8.1 or 8.2 hereof, Borrower shall
immediately deposit with Agent, as security for the obligations of Borrower and
any Guarantor of Payment to reimburse Agent and the Lenders for any then
outstanding Letters of Credit, cash equal to the sum of the aggregate undrawn
balance of any then outstanding Letters of Credit.  Agent and the Lenders are hereby authorized,
at their option, to deduct any and all such amounts from any deposit balances
then owing by any Lender (or any affiliate of such Lender) to or for the credit
or account of any Company, as security for the obligations of Borrower and any
Guarantor of Payment to reimburse Agent and the Lenders for any then
outstanding Letters of Credit.

 

Section 8.4.  Offsets.  If there shall occur or exist any Event of
Default referred to in Section 7.10 hereof or if the maturity of the
Obligations is accelerated pursuant to Section 8.1 or 8.2 hereof, each
Lender shall have the right at any time to set off against, and to appropriate
and apply toward the payment of, any and all of the Obligations then owing by
Borrower to such Lender (including, without limitation, any participation
purchased or to be purchased pursuant to Section 2.2(b), 2.2(c) or
8.5 hereof), whether or not the same shall then have matured, any and all
deposit (general or special) balances and all other indebtedness then held or
owing by such Lender (including, without limitation, by branches and agencies
or any affiliate of such Lender, wherever located) to or for the credit or
account of Borrower or any Guarantor of Payment, all without notice to or
demand upon Borrower or any other Person, all such notices and demands being
hereby expressly waived by Borrower.

 

Section 8.5.  Equalization Provision.  Each Lender agrees with the other Lenders
that if it, at any time, shall obtain any Advantage over the other Lenders or
any thereof in respect of the Obligations (except as to Swing Loans and Letters
of Credit prior to Agent’s giving of notice to participate and except under Article III
hereof), it shall purchase from the other Lenders, for cash and at par, such
additional participation in the Obligations as shall be necessary to nullify
the Advantage.  If any such Advantage
resulting in the purchase of an additional participation as aforesaid shall be
recovered in whole or in part from the Lender receiving the Advantage, each
such purchase shall be rescinded, and the purchase price restored (but without
interest unless the Lender receiving the Advantage is required to pay interest
on the Advantage to the Person recovering the Advantage from such Lender)
ratably to the extent of the recovery. 
Each Lender further agrees with the other Lenders that if it at any time
shall receive any payment for or on behalf of Borrower on any indebtedness
owing by Borrower to that Lender (whether by realization upon security, by
reason of offset of any deposit or other indebtedness, by counterclaim or
cross-action or by the enforcement of any right under any Loan Document), it
will apply such payment first to any and all Obligations owing by Borrower to
that Lender (including, without limitation, any participation purchased or to
be purchased pursuant to this Section or any other Section of this
Agreement).  Borrower agrees that any
Lender so purchasing a participation from the other Lenders or any thereof
pursuant to this Section may exercise all of

 

50

 

its
rights of payment (including the right of set-off) with respect to such
participation as fully as if such Lender was a direct creditor of Borrower in
the amount of such participation.

 

Section 8.6.  Other Remedies.  The remedies in this Article VIII are in
addition to, not in limitation of, any other right, power, privilege, or
remedy, either in law, in equity, or otherwise, to which the Lenders may be
entitled.  Agent shall exercise the
rights under this Article VIII and all other collection efforts on behalf
of the Lenders and no Lender shall act independently with respect thereto,
except as otherwise specifically set forth in this Agreement.

 

ARTICLE IX.  THE AGENT

 

The
Lenders authorize KeyBank National Association and KeyBank National Association
hereby agrees to act as agent for the Lenders in respect of this Agreement upon
the terms and conditions set forth elsewhere in this Agreement, and upon the
following terms and conditions:

 

Section 9.1.  Appointment and Authorization.  Each Lender hereby irrevocably appoints and
authorizes Agent to take such action as agent on its behalf and to exercise
such powers hereunder as are delegated to Agent by the terms hereof, together
with such powers as are reasonably incidental thereto.  Neither Agent nor any of its affiliates,
directors, officers, attorneys or employees shall (a) be liable for any action
taken or omitted to be taken by it or them hereunder or in connection herewith,
except for its or their own gross negligence or willful misconduct (as
determined by a court of competent jurisdiction), or be responsible in any
manner to any of the Lenders for the effectiveness, enforceability, genuineness,
validity or due execution of this Agreement or any other Loan Documents, (b) be
under any obligation to any Lender to ascertain or to inquire as to the
performance or observance or any of the terms, covenants or conditions hereof
or thereof on the part of Borrower or any other Company, or the financial
condition of Borrower or any other Company, or (c) be liable to any of the
Companies for consequential damages resulting from any breach of contract, tort
or other wrong in connection with the negotiation, documentation,
administration or collection of the Loans or Letters of Credit or any of the
Loan Documents.

 

Section 9.2.  Note Holders.  Agent may treat the payee of any Note as the
holder thereof (or, if there is no Note, the holder of the interest as
reflected on the books and records of Agent) until written notice of transfer
shall have been filed with it, signed by such payee and in form satisfactory to
Agent.

 

Section 9.3.  Consultation With Counsel.  Agent may consult with legal counsel selected
by it and shall not be liable for any action taken or suffered in good faith by
it in accordance with the opinion of such counsel.

 

Section 9.4.  Documents.  Agent shall not be under any duty to examine
into or pass upon the validity, effectiveness, genuineness or value of any Loan
Document or any other Related Writing furnished pursuant hereto or in
connection herewith or the value of any collateral

 

51

 

obtained
hereunder, and Agent shall be entitled to assume that the same are valid,
effective and genuine and what they purport to be.

 

Section 9.5.  Agent and Affiliates.  With respect to the Loans, Agent shall have
the same rights and powers hereunder as any other Lender and may exercise the
same as though it were not Agent, and Agent and its affiliates may accept
deposits from, lend money to and generally engage in any kind of business with
any Company or any Affiliate.

 

Section 9.6.  Knowledge of Default.  It is expressly understood and agreed that
Agent shall be entitled to assume that no Default or Event of Default has
occurred, unless Agent has been notified by a Lender in writing that such
Lender believes that a Default or Event of Default has occurred and is
continuing and specifying the nature thereof or has been notified by Borrower
pursuant to Section 5.14 hereof.

 

Section 9.7.  Action by Agent.  Subject to the other terms and conditions
hereof, so long as Agent shall be entitled, pursuant to Section 9.6
hereof, to assume that no Default or Event of Default shall have occurred and
be continuing, Agent shall be entitled to use its discretion with respect to
exercising or refraining from exercising any rights that may be vested in it
by, or with respect to taking or refraining from taking any action or actions
that it may be able to take under or in respect of, this Agreement.  Agent shall incur no liability under or in
respect of this Agreement by acting upon any notice, certificate, warranty or
other paper or instrument believed by it to be genuine or authentic or to be
signed by the proper party or parties, or with respect to anything that it may
do or refrain from doing in the reasonable exercise of its judgment, or that
may seem to it to be necessary or desirable in the premises.

 

Section 9.8.  Notice of Default.  In the event that Agent shall have acquired
actual knowledge of any Default or Event of Default, Agent shall promptly
notify the Lenders and shall take such action and assert such rights under this
Agreement as the Required Lenders shall direct and Agent shall inform the other
Lenders in writing of the action taken. 
Agent may take such action and assert such rights as it deems to be
advisable, in its discretion, for the protection of the interests of the
holders of the Obligations.

 

Section 9.9.  Indemnification of Agent.  The Lenders agree to indemnify Agent (to the
extent not reimbursed by Borrower) ratably, according to their respective
Commitment Percentages, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including attorneys’ fees) or disbursements of any kind or nature whatsoever
that may be imposed on, incurred by or asserted against Agent in its capacity
as agent in any way relating to or arising out of this Agreement or any Loan
Document or any action taken or omitted by Agent with respect to this Agreement
or any Loan Document, provided that no Lender shall be liable for any portion
of such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses (including attorneys’ fees) or disbursements resulting
from Agent’s gross negligence or willful misconduct as determined by a court of
competent jurisdiction, or from any action taken or omitted by Agent in any
capacity other than as agent under this Agreement or any other Loan Document.

 

52

 

Section 9.10.  Successor Agent.  Agent may resign as agent hereunder by giving
not fewer than thirty (30) days prior written notice to Borrower and the
Lenders.  If Agent shall resign under
this Agreement, then either (a) the Required Lenders shall appoint from
among the Lenders a successor agent for the Lenders (with the consent of
Borrower so long as an Event of Default has not occurred and which consent
shall not be unreasonably withheld), or (b) if a successor agent shall not
be so appointed and approved within the thirty (30) day period following Agent’s
notice to the Lenders of its resignation, then Agent shall appoint a successor
agent that shall serve as agent until such time as the Required Lenders appoint
a successor agent; provided that, notwithstanding the foregoing, any successor
Agent shall be a commercial bank organized under the laws of the United States
or any state thereof having capital and surplus of at least One Hundred Million
Dollars ($100,000,000).  Upon its
appointment, such successor agent shall succeed to the rights, powers and
duties as agent, and the term “Agent” shall mean such successor effective upon
its appointment, and the former agent’s rights, powers and duties as agent
shall be terminated without any other or further act or deed on the part of
such former agent or any of the parties to this Agreement.

 

Section 9.11.  Other Agents.  As used in this Agreement, the term “Agent”
shall only include Agent.  Neither the
Joint Lead Arranger nor any Syndication Agent, Co-Documentation Agent or any
other agent (other than Agent) shall have any rights, obligations or
responsibilities hereunder in such capacity; provided that the Joint Lead
Arranger, when acting in its capacity as joint lead arranger, shall have the
right to be indemnified by Borrower and the Lenders in the same manner as Agent
has the right to be indemnified.

 

ARTICLE X.  MISCELLANEOUS

 

Section 10.1.  Lenders’ Independent Investigation.  Each Lender, by its signature to this
Agreement, acknowledges and agrees that Agent has made no representation or
warranty, express or implied, with respect to the creditworthiness, financial
condition, or any other condition of any Company or with respect to the
statements contained in any information memorandum furnished in connection
herewith or in any other oral or written communication between Agent and such
Lender.  Each Lender represents that it
has made and shall continue to make its own independent investigation of the
creditworthiness, financial condition and affairs of the Companies in
connection with the extension of credit hereunder, and agrees that Agent has no
duty or responsibility, either initially or on a continuing basis, to provide
any Lender with any credit or other information with respect thereto (other
than such notices as may be expressly required to be given by Agent to the
Lenders hereunder), whether coming into its possession before the first Credit
Event hereunder or at any time or times thereafter.  Each Lender further represents that it has
reviewed each of the Loan Documents.

 

Section 10.2.  No Waiver; Cumulative Remedies.  No omission or course of dealing on the part
of Agent, any Lender or the holder of any Note in exercising any right, power
or remedy hereunder or under any of the Loan Documents shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy hereunder or under any of

 

53

 

the
Loan Documents.  The remedies herein
provided are cumulative and in addition to any other rights, powers or privileges
held by operation of law, by contract or otherwise.

 

Section 10.3.  Amendments, Consents.  No amendment, modification, termination, or
waiver of any provision of any Loan Document nor consent to any variance
therefrom, shall be effective unless the same shall be in writing and signed by
the Required Lenders and, in the case of amendments or modifications, Borrower,
and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.  Anything herein to the contrary
notwithstanding, unanimous consent of the Lenders shall be required with
respect to (a) any increase in the Commitment hereunder (except as
specified in Section 2.9(b) hereof), (b) the extension of maturity of the
Loans, the payment date of interest or principal thereunder, or the payment
date of facility, utilization or other fees or amounts payable hereunder,
(c) any reduction in the rate of interest on the Loans (provided that the
institution of the Default Rate and a subsequent removal of the Default Rate
shall not constitute a decrease in interest rate of this Section), or in any
amount of principal or interest due on any Loan, or the payment of facility,
utilization or other fees hereunder or any change in the manner of pro rata application
of any payments made by Borrower to the Lenders hereunder, (d) any change
in any percentage voting requirement, voting rights, or the Required Lenders
definition in this Agreement, (e) the release of any Guarantor of Payment
other than any release permitted by the terms hereof, or (f) any amendment
to this Section 10.3 or Section 8.5 hereof.  Notice of amendments or consents ratified by
the Lenders hereunder shall be forwarded by Agent to all of the Lenders.  Each Lender or other holder of a Note (or
interest in any Loan) shall be bound by any amendment, waiver or consent
obtained as authorized by this Section, regardless of its failure to agree
thereto.

 

Section 10.4.  Notices.  All notices, requests, demands and other
communications provided for hereunder shall be in writing and, if to Borrower,
mailed or delivered to it, addressed to it at the address specified on the
signature pages of this Agreement, if to a Lender, mailed or delivered to
it, addressed to the address of such Lender specified on the signature pages of
this Agreement, or, as to each party, at such other address as shall be
designated by such party in a written notice to each of the other parties.  All notices, statements, requests, demands
and other communications provided for hereunder shall be given by overnight
delivery or first class mail with postage prepaid by registered or certified
mail, addressed as aforesaid, or sent by facsimile with telephonic confirmation
of receipt, except that all notices hereunder shall not be effective until
received.

 

Section 10.5.  Costs, Expenses and Taxes.  Borrower agrees to pay on demand all costs
and expenses of Agent, including, but not limited to, (a) syndication,
administration, travel and out-of-pocket expenses, including but not limited to
attorneys’ fees and expenses, of Agent in connection with the preparation,
negotiation and closing of the Loan Documents and the administration of the
Loan Documents, the collection and disbursement of all funds hereunder and the
other instruments and documents to be delivered hereunder, (b) extraordinary
expenses of Agent in connection with the administration of the Loan Documents
and the other instruments and documents to be delivered hereunder, and
(c) the reasonable fees and out-of-pocket expenses of special counsel for
Agent, with respect to the foregoing, and of local counsel, if any, who may be
retained by said special counsel with respect thereto.  Borrower also agrees to pay on demand all
costs and expenses of Agent and the Lenders, including reasonable attorneys’
fees, in

 

54

 

connection
with the restructuring or enforcement of the Obligations, this Agreement or any
Related Writing.  In addition, Borrower
shall pay any and all stamp and other taxes and fees payable or determined to
be payable in connection with the execution and delivery of the Loan Documents,
and the other instruments and documents to be delivered hereunder, and agrees
to hold Agent and each Lender harmless from and against any and all liabilities
with respect to or resulting from any delay in paying or failure to pay such
taxes or fees.

 

Section 10.6.  Indemnification.  Borrower agrees to defend, indemnify and hold
harmless Agent and the Lenders (and their respective affiliates, officers, directors,
attorneys, agents and employees) from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including attorneys’ fees) or disbursements of any kind or nature
whatsoever that may be imposed on, incurred by or asserted against Agent or any
Lender in connection with any investigative, administrative or judicial
proceeding (whether or not such Lender or Agent shall be designated a party
thereto) or any other claim by any Person relating to or arising out of any
Loan Document or any actual or proposed use of proceeds of the Loans or any of
the Obligations, or any activities of any Company or its Affiliates; provided
that no Lender nor Agent shall have the right to be indemnified under this Section for
its own gross negligence or willful misconduct as determined by a court of
competent jurisdiction.  All obligations
provided for in this Section 10.6 shall survive any termination of this
Agreement.

 

Section 10.7.  Obligations Several; No Fiduciary
Obligations.  The obligations of the
Lenders hereunder are several and not joint. 
Nothing contained in this Agreement and no action taken by Agent or the
Lenders pursuant hereto shall be deemed to constitute Agent or the Lenders a
partnership, association, joint venture or other entity.  No default by any Lender hereunder shall
excuse the other Lenders from any obligation under this Agreement; but no
Lender shall have or acquire any additional obligation of any kind by reason of
such default.  The relationship between
Borrower and the Lenders with respect to the Loan Documents and the Related
Writings is and shall be solely that of debtor and creditors, respectively, and
neither Agent nor any Lender shall have any fiduciary obligation toward any
Credit Party with respect to any such documents or the transactions
contemplated thereby.

 

Section 10.8.  Execution in Counterparts.  This Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts and by
facsimile signature, each of which counterparts when so executed and delivered
shall be deemed to be an original and all of which taken together shall
constitute but one and the same agreement.

 

Section 10.9.  Binding Effect; Borrower’s Assignment.  This Agreement shall become effective when it
shall have been executed by Borrower, Agent and each Lender and thereafter
shall be binding upon and inure to the benefit of Borrower, Agent and each of
the Lenders and their respective successors and assigns, except that Borrower
shall not have the right to assign its rights hereunder or any interest herein
without the prior written consent of Agent and all of the Lenders.

 

55

 

Section 10.10.  Lender Assignments.

 

(a)           Assignments of Commitments.  Each Lender shall have the right at any time
or times to assign to an Eligible Transferee (other than to a Lender that shall
not be in compliance with this Agreement), without recourse, all or a
percentage of all of the following: (i) such Lender’s Commitment,
(ii) all Loans made by that Lender, (iii) such Lender’s Notes, if
any, and (iv) such Lender’s interest in any Letter of Credit or Swing
Loan, and any participation purchased pursuant to Section 2.2(b), 2.2(c) or
8.5 hereof.

 

(b)           Prior Consent.  No assignment may be consummated pursuant to
this Section 10.10 without the prior written consent of Borrower and Agent
(other than an assignment by any Lender to another Lender or to any affiliate
of such Lender which affiliate is an Eligible Transferee and either
wholly-owned by a Lender or is wholly-owned by a Person that wholly owns,
either directly or indirectly, such Lender), which consent of Borrower and
Agent shall not be unreasonably withheld; provided, however, that Borrower’s
consent shall not be required if, at the time of the proposed assignment, any
Default or Event of Default shall then exist. 
Anything herein to the contrary notwithstanding, any Lender may at any
time make a collateral assignment of all or any portion of its rights under the
Loan Documents to a Federal Reserve Bank, and no such assignment shall release
such assigning Lender from its obligations hereunder.

 

(c)           Minimum Amount.  Each such assignment shall be in a minimum
amount of the lesser of Five Million Dollars ($5,000,000) of the assignor’s
Commitment and interest herein or the entire amount of the assignor’s
Commitment and interest herein.

 

(d)           Assignment Fee.  Unless the assignment shall be to an
affiliate of the assignor or the assignment shall be due to merger of the
assignor or for regulatory purposes, either the assignor or the assignee shall
remit to Agent, for its own account, an administrative fee of Three Thousand
Five Hundred Dollars ($3,500).

 

(e)           Assignment Agreement.  Unless the assignment shall be due to merger
of the assignor or a collateral assignment for regulatory purposes, the
assignor shall (i) cause the assignee to execute and deliver to Borrower
and Agent an Assignment Agreement, and (ii) execute and deliver, or cause
the assignee to execute and deliver, as the case may be, to Agent such
additional amendments, assurances and other writings as Agent may reasonably
require.

 

(f)            Non-U.S. Assignee.  If the assignment is to be made to an assignee
that is organized under the laws of any jurisdiction other than the United
States or any state thereof, the assignor Lender shall cause such assignee, at
least five Business Days prior to the effective date of such assignment, (i) to
represent to the assignor Lender (for the benefit of the assignor Lender, Agent
and Borrower) that under applicable law and treaties no taxes will be required
to be withheld by Agent, Borrower or the assignor with respect to any payments
to be made to such assignee in respect of the Loans hereunder, (ii) to
furnish to the assignor Lender (and, in the case of any assignee registered in
the Register (as defined below), Agent and Borrower) either (A) U.S.
Internal Revenue Service Form W-8ECI or U.S. Internal Revenue Service Form W-8BEN
or (B) United States Internal Revenue Service Form W-8 or W-9, as
applicable (wherein such assignee claims entitlement to complete exemption from
U.S. federal withholding tax on all interest payments hereunder), and (iii) to
agree (for the benefit of the assignor, Agent and Borrower) to provide to the
assignor Lender (and, in the case of any assignee registered in the

 

56

 

Register,
to Agent and Borrower) a new Form W-8ECI or Form W-8BEN or Form W-8
or W-9, as applicable, upon the expiration or obsolescence of any previously
delivered form and comparable statements in accordance with applicable U.S.
laws and regulations and amendments duly executed and completed by such
assignee, and to comply from time to time with all applicable U.S. laws and
regulations with regard to such withholding tax exemption.

 

(g)           Deliveries by Borrower.  Upon satisfaction of all applicable
requirements specified in subsections (a) through (f) above, Borrower
shall execute and deliver (i) to Agent, the assignor and the assignee, any
consent or release (of all or a portion of the obligations of the assignor)
required to be delivered by Borrower in connection with the Assignment
Agreement, and (ii) to the assignee and the assignor, if applicable, an
appropriate Note or Notes.  After
delivery of the new Note or Notes, the assignor’s Note or Notes being replaced
shall be returned to Borrower marked “replaced”.

 

(h)           Effect of Assignment.  Upon satisfaction of all applicable requirements
of set forth in subsections (a) through (g) above, and any other condition
contained in this Section 10.10, (i) the assignee shall become and
thereafter be deemed to be a “Lender” for the purposes of this Agreement, (ii) the
assignor shall be released from its obligations hereunder to the extent that
its interest has been assigned, (iii) in the event that the assignor’s
entire interest has been assigned, the assignor shall cease to be and
thereafter shall no longer be deemed to be a “Lender” and (iv) the
signature pages hereto and Schedule 1 hereto shall be automatically
amended, without further action, to reflect the result of any such assignment.

 

(i)            Agent to Maintain Register.  Agent shall maintain at the address for
notices referred to in Section 10.4 hereof a copy of each Assignment
Agreement delivered to it and a register (the “Register”) for the recordation
of the names and addresses of the Lenders and the Commitment of, and principal
amount of the Loans owing to, each Lender from time to time.  The entries in the Register shall be
conclusive, in the absence of manifest error, and Borrower, Agent and the
Lenders may treat each Person whose name is recorded in the Register as the
owner of the Loan recorded therein for all purposes of this Agreement.  The Register shall be available for
inspection by Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice.

 

Section 10.11.  Sale of Participations.  Any Lender may, in the ordinary course of its
commercial banking business and in accordance with applicable law, at any time
sell participations to one or more Eligible Transferees (each a “Participant”)
in all or a portion of its rights or obligations under this Agreement and the
other Loan Documents (including, without limitation, all or a portion of the
Commitment and the Loans and participations owing to it and the Note held by
it); provided, that:

 

(a)           any such Lender’s obligations under
this Agreement and the other Loan Documents shall remain unchanged;

 

(b)           such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations;

 

57

 

(c)           the parties hereto shall continue to
deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Agreement and each of the other Loan
Documents;

 

(d)           such Participant shall be bound by
the provisions of Section 8.5 hereof, and the Lender selling such
participation shall obtain from such Participant a written confirmation of its
agreement to be so bound; and

 

(e)           no Participant (unless such
Participant is itself a Lender) shall be entitled to require such Lender to
take or refrain from taking action under this Agreement or under any other Loan
Document, except that such Lender may agree with such Participant that such
Lender will not, without such Participant’s consent, take action of the type
described as follows:

 

(i)            increase the
portion of the participation amount of any Participant over the amount thereof
then in effect, or extend the Commitment Period, without the written consent of
each Participant affected thereby; or

 

(ii)           reduce the
principal amount of or extend the time for any payment of principal of any
Loan, or reduce the rate of interest or extend the time for payment of interest
on any Loan, or reduce the facility fee or the utilization fee, without the
written consent of each Participant affected thereby.

 

Borrower
agrees that any Lender that sells participations pursuant to this Section shall
still be entitled to the benefits of Article III hereof, notwithstanding
any such transfer; provided, however, that the obligations of Borrower shall
not increase as a result of such transfer and Borrower shall have no obligation
to any Participant.

 

Section 10.12.  Severability of Provisions; Captions;
Attachments.  Any provision of this
Agreement that shall be prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.  The several captions to
Sections and subsections herein are inserted for convenience only and shall be
ignored in interpreting the provisions of this Agreement.  Each schedule or exhibit attached to this
Agreement shall be incorporated herein and shall be deemed to be a part hereof.

 

Section 10.13.  Investment Purpose.  Each of the Lenders represents and warrants
to Borrower that it is entering into this Agreement with the present intention
of acquiring any Note issued pursuant hereto for investment purposes only and
not for the purpose of distribution or resale, it being understood, however,
that each Lender shall at all times retain full control over the disposition of
its assets.

 

Section 10.14.  Entire Agreement.  This Agreement, any Note and any other Loan
Document or other agreement, document or instrument attached hereto or executed
on or as of the Closing Date integrate all of the terms and conditions mentioned
herein or incidental hereto

 

58

 

and
supersede all oral representations and negotiations and prior writings with
respect to the subject matter hereof.

 

Section 10.15.  Legal Representation of Parties.  The Loan Documents were negotiated by the
parties with the benefit of legal representation and any rule of
construction or interpretation otherwise requiring this Agreement or any other
Loan Document to be construed or interpreted against any party shall not apply
to any construction or interpretation hereof or thereof.

 

Section 10.16.  Governing Law; Submission to Jurisdiction.  This Agreement, each of the Notes and any
Related Writing shall be governed by and construed in accordance with the laws
of the State of Ohio and the respective rights and obligations of Borrower,
Agent, and the Lenders shall be governed by Ohio law, without regard to
principles of conflict of laws which would result in the application of the law
of any other state.  Borrower hereby
irrevocably submits to the non-exclusive jurisdiction of any Ohio state or
federal court sitting in Cleveland, Ohio, over any action or proceeding arising
out of or relating to this Agreement, the Obligations or any Related Writing,
and Borrower hereby irrevocably agrees that all claims in respect of such
action or proceeding may be heard and determined in such Ohio state or federal
court.  Borrower, on behalf of itself and
its Subsidiaries, hereby irrevocably waives, to the fullest extent permitted by
law, any objection it may now or hereafter have to the laying of venue in any
action or proceeding in any such court as well as any right it may now or
hereafter have to remove such action or proceeding, once commenced, to another
court on the grounds of FORUM NON CONVENIENS or otherwise.  Borrower agrees that a final, nonappealable
judgment in any such action or proceeding in state or federal court shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law.

 

[Remainder of page left intentionally blank]

 

59

 

Section 10.17.  Jury Trial Waiver.  TO THE EXTENT PERMITTED BY LAW, BORROWER,
AGENT AND EACH LENDER WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING
ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG BORROWER,
AGENT AND THE LENDERS, OR ANY THEREOF, ARISING OUT OF, IN CONNECTION WITH,
RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH THIS AGREEMENT OR ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS
RELATED THERETO.

 

IN
WITNESS WHEREOF, the parties have executed and delivered this Credit Agreement
as of the date first set forth above.

 

	
  Address:

  	
  6800
  Cintas Boulevard

  	
  CINTAS
  CORPORATION NO. 2

  
	
   

  	
  Mason,
  Ohio 45040

  	
   

  	
   

  
	
   

  	
  Attn:  President

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Scott
  D. Farmer

  
	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  	
   

  
	
  Address:

  	
  Key
  Center

  	
  KEYBANK NATIONAL ASSOCIATION,

  
	
   

  	
  127
  Public Square

  	
  as Agent and as a Lender

  
	
   

  	
  Cleveland,
  Ohio  44114-1306

  	
   

  	
   

  
	
   

  	
  Attn:
  Institutional Banking

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Francis
  W. Lutz

  
	
   

  	
   

  	
   

  	
  Vice
  President

  
	
   

  	
   

  	
   

  	
   

  
	
  Address:

  	
  One
  Bank One Plaza

  	
  BANC
  ONE CAPITAL MARKETS, INC.,

  
	
   

  	
  Mail Code IL1-0429

  	
  as Joint Lead Arranger

  
	
   

  	
  Chicago, Illinois
  60670

  	
   

  
	
   

  	
  Attn:  Francis Henkel

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Francis
  Henkel

  
	
   

  	
   

  	
   

  	
  Managing
  Director

  
	
   

  	
   

  	
   

  	
   

  
	
  Address:

  	
  One
  Bank One Plaza

  	
  BANK
  ONE, NA, as Syndication Agent and as

  
	
   

  	
  Mail Code IL1-0364

  	
  a Lender

  
	
   

  	
  Chicago, Illinois
  60670

  	
   

  	
   

  
	
   

  	
  Attn:
   Megan E. Marquardt

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Megan
  E. Marquardt

  
	
   

  	
   

  	
   

  	
  Associate
  Director

  
	
   

  	
   

  	
   

  	
   

  
	
  Address:

  	
  Fifth
  Third Center

  	
  FIFTH
  THIRD BANK, as Co-Documentation

  
	
   

  	
  38
  Fountain Square Plaza

  	
  Agent and as a Lender

  
	
   

  	
  MD
  109046

  	
   

  	
   

  
	
   

  	
  Cincinnati,
  Ohio  45202

  	
  By:

  	
   

  
	
   

  	
  Attn:  David C. Melin

  	
   

  	
  David
  C. Melin

  
	
   

  	
   

  	
   

  	
  Vice
  President

  

 

Signature
Page

 

1

 

	
  Address:

  	
  425
  Walnut Street

  	
  US
  BANK NATIONAL ASSOCIATION, as

  
	
   

  	
  ML
  CN-OH-W8

  	
  Co-Documentation Agent and as a Lender

  
	
   

  	
  Cincinnati,
  Ohio  45202

  	
   

  
	
   

  	
  Attn:  Michael P. Dickman

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Michael
  P. Dickman

  
	
   

  	
   

  	
   

  	
  Assistant
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
  Address:

  	
  Chicago
  Branch

  	
  THE
  BANK OF TOKYO-MITSUBISHI,

  
	
   

  	
  Suite 2300

  	
  LTD., as Co-Documentation Agent and as a

  
	
   

  	
  227
  West Monroe Street

  	
  Lender

  
	
   

  	
  Chicago, Illinois  60606

  	
   

  
	
   

  	
  Attn:  William Murray

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Kazuya
  Matsushita

  
	
   

  	
   

  	
   

  	
  General
  Manager

  
	
   

  	
   

  	
   

  	
   

  
	
  Address:

  	
  201
  East Fifth Street

  	
  PNC
  BANK, NATIONAL ASSOCIATION

  
	
   

  	
  Cincinnati,
  Ohio  45202

  	
   

  	
   

  
	
   

  	
  Attn:  Jeffrey L. Stein

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Jeffrey
  L. Stein

  
	
   

  	
   

  	
   

  	
  Vice
  President

  
	
   

  	
   

  	
   

  	
   

  
	
  Address:

  	
  50
  South LaSalle Street

  	
  THE
  NORTHERN TRUST COMPANY

  
	
   

  	
  Chicago, Illinois  60675

  	
   

  	
   

  
	
   

  	
  Attn:  Thomas E. Bernhardt

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Thomas
  E. Bernhardt

  
	
   

  	
   

  	
   

  	
  Senior
  Banker

  
	
   

  	
   

  	
   

  	
   

  
	
  Address:

  	
  Suite 2900

  	
  WELLS
  FARGO BANK NATIONAL

  
	
   

  	
  230
  West Monroe Street

  	
  ASSOCIATION

  
	
   

  	
  Chicago, Illinois  60606

  	
   

  
	
   

  	
  Attn:  Steven Buehler

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Scott
  Miller

  
	
   

  	
   

  	
   

  	
  Vice
  President

  
	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
					

 

Signature Page

 

2

 

SCHEDULE 1

 

	
  LENDERS

  	
   

  	
  COMMITMENT

  PERCENTAGE

  	
   

  	
  REVOLVING

  CREDIT

  COMMITMENT

  AMOUNT

  	
   

  	
  MAXIMUM AMOUNT

  	
   

  
	
  KeyBank National Association

  	
   

  	
  20.00000000

  	
  %

  	
  $

  	
  60,000,000

  	
   

  	
  $

  	
  60,000,000

  	
   

  
	
  Bank One, NA

  	
   

  	
  20.00000000

  	
  %

  	
  $

  	
  60,000,000

  	
   

  	
  $

  	
  60,000,000

  	
   

  
	
  Fifth Third Bank

  	
   

  	
  13.33333333

  	
  %

  	
  $

  	
  40,000,000

  	
   

  	
  $

  	
  40,000,000

  	
   

  
	
  US Bank National Association

  	
   

  	
  13.33333333

  	
  %

  	
  $

  	
  40,000,000

  	
   

  	
  $

  	
  40,000,000

  	
   

  
	
  The Bank of Tokyo-Mitsubishi, Ltd.

  	
   

  	
  13.33333333

  	
  %

  	
  $

  	
  40,000,000

  	
   

  	
  $

  	
  40,000,000

  	
   

  
	
  PNC Bank, National Association

  	
   

  	
  6.66666667

  	
  %

  	
  $

  	
  20,000,000

  	
   

  	
  $

  	
  20,000,000

  	
   

  
	
  The Northern Trust Company

  	
   

  	
  6.66666667

  	
  %

  	
  $

  	
  20,000,000

  	
   

  	
  $

  	
  20,000,000

  	
   

  
	
  Wells Fargo Bank National Association

  	
   

  	
  6.66666667

  	
  %

  	
  $

  	
  20,000,000

  	
   

  	
  $

  	
  20,000,000

  	
   

  
	
  Total Commitment Amount

  	
   

  	
  100

  	
  %

  	
  $

  	
  300,000,000

  	
   

  	
  $

  	
  300,000,000

  	
   

  

 

S-1

 

SCHEDULE 2

 

GUARANTORS OF PAYMENT

 

Cintas
Corporation

 

Cintas
Corporation No. 3

 

Cintas
Corp. No. 8, Inc.

 

Cintas
— RUS, L.P.

 

Cintas
Corp. No. 15, Inc.

 

Xpect
First Aid Corporation

 

Cintas
First Aid Holdings Corporation

 

American
First Aid Company

 

Respond
Industries, Incorporated

 

Affirmed
Medical, Inc.

 

LLT, Inc.

 

S-2

 

SCHEDULE 2.2

 

EXISTING LETTERS OF CREDIT

 

None.

 

S-3

 

EXHIBIT A

FORM OF

REVOLVING CREDIT NOTE

 

	
  $

  	
   

  	
  May 28, 2004

  

 

FOR
VALUE RECEIVED, the undersigned, CINTAS CORPORATION NO. 2, a Nevada corporation
(“Borrower”), promises to pay, on the last day of the Commitment Period, as
defined in the Credit Agreement (as hereinafter defined), to the order of
                  
(“Lender”) at the main office of KEYBANK NATIONAL ASSOCIATION, as Agent, as
hereinafter defined, 127 Public Square, Cleveland, Ohio 44114-1306, the
principal sum of 

 

DOLLARS

 

or
the aggregate unpaid principal amount of all Revolving Loans, as defined in the
Credit Agreement made by Lender to Borrower pursuant to Section 2.2(a) of
the Credit Agreement, whichever is less, in lawful money of the United States
of America.

 

As
used herein, “Credit Agreement” means the Credit Agreement dated as of May 28,
2004, among Borrower, the Lenders, as defined therein, KeyBank National
Association, as joint lead arranger and administrative agent for the Lenders
(“Agent”), Banc One Capital Markets, Inc., as joint lead arranger, Bank
One, NA, as syndication agent, Fifth Third Bank, as co-documentation agent, US
Bank National Association, as co-documentation agent, and The Bank of
Tokyo-Mitsubishi, Ltd., as co-documentation agent, as the same may from
time to time be amended, restated or otherwise modified.  Each capitalized term used herein that is
defined in the Credit Agreement and not otherwise defined herein shall have the
meaning ascribed to it in the Credit Agreement.

 

Borrower
also promises to pay interest on the unpaid principal amount of each Revolving
Loan from time to time outstanding, from the date of such Revolving Loan until
the payment in full thereof, at the rates per annum that shall be determined in
accordance with the provisions of Section 2.3(a) of the Credit
Agreement.  Such interest shall be
payable on each date provided for in such Section 2.3(a); provided,
however, that interest on any principal portion that is not paid when due shall
be payable on demand.

 

The
portions of the principal sum hereof from time to time representing Base Rate
Loans and Eurodollar Loans, and payments of principal of any thereof, shall be
shown on the records of Lender by such method as Lender may generally employ;
provided, however, that failure to make any such entry shall in no way detract
from the obligations of Borrower under this Note.

 

If
this Note shall not be paid at maturity, whether such maturity occurs by reason
of lapse of time or by operation of any provision for acceleration of maturity
contained in the Credit Agreement, the principal hereof and the unpaid interest
thereon shall bear interest, until paid, at a rate per annum equal to the
Default Rate.  All payments of principal
of and interest on this Note shall be made in immediately available funds.

 

E-1

 

This
Note is one of the Revolving Credit Notes referred to in the Credit
Agreement.  Reference is made to the
Credit Agreement for a description of the right of the undersigned to
anticipate payments hereof, the right of the holder hereof to declare this Note
due prior to its stated maturity, and other terms and conditions upon which
this Note is issued.

 

Except
as expressly provided in the Credit Agreement, Borrower expressly waives
presentment, demand, protest and notice of any kind.    This Note shall be governed by and
construed in accordance with the laws of the State of Ohio, without regard to
conflicts of laws provisions.

 

JURY
TRIAL WAIVER.  BORROWER,
TO THE EXTENT PERMITTED BY LAW, HEREBY WAIVES ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE, AMONG BORROWER, AGENT AND THE LENDERS, OR ANY THEREOF, ARISING OUT
OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR ANY NOTE OR OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH
OR THE TRANSACTIONS RELATED THERETO.

 

	
   

  	
  CINTAS
  CORPORATION NO. 2

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

E-2

 

EXHIBIT B

FORM OF

SWING LINE NOTE

 

	
  $

  	
   

  	
  May 28, 2004

  

 

FOR
VALUE RECEIVED, the undersigned, CINTAS CORPORATION NO. 2, a Nevada corporation
(“Borrower”), promises to pay to the order of KEYBANK NATIONAL ASSOCIATION
(“Lender”) at the main office of KEYBANK NATIONAL ASSOCIATION, as Agent, as
hereinafter defined, 127 Public Square, Cleveland, Ohio 44114-1306, the
principal sum of

 

DOLLARS

 

or,
if less, the aggregate unpaid principal amount of all Swing Loans, as defined
in the Credit Agreement (as hereinafter defined) made by Lender to Borrower
pursuant to Section 2.2(c) of the Credit Agreement, in lawful money
of the United States of America on the earlier of the last day of the
applicable Commitment Period, as defined in the Credit Agreement, or, with
respect to each Swing Loan, the Swing Loan Maturity Date applicable thereto.

 

As
used herein, “Credit Agreement” means the Credit Agreement dated as of May 28,
2004, among Borrower, the Lenders, as defined therein, KeyBank National
Association, as joint lead arranger and administrative agent for the Lenders
(“Agent”), Banc One Capital Markets, Inc., as joint lead arranger, Bank
One, NA, as syndication agent, Fifth Third Bank, as co-documentation agent, US
Bank National Association, as co-documentation agent, and The Bank of
Tokyo-Mitsubishi, Ltd., as co-documentation agent, as the same may from
time to time be amended, restated or otherwise modified.  Each capitalized term used herein that is
defined in the Credit Agreement and not otherwise defined herein shall have the
meaning ascribed to it in the Credit Agreement.

 

Borrower
also promises to pay interest on the unpaid principal amount of each Swing Loan
from time to time outstanding, from the date of such Swing Loan until the
payment in full thereof, at the rates per annum that shall be determined in
accordance with the provisions of Section 2.3(b) of the Credit
Agreement.  Such interest shall be
payable on each date provided for in such Section 2.3(b); provided,
however, that interest on any principal portion which is not paid when due
shall be payable on demand.

 

The
principal sum hereof from time to time and the payments of principal and
interest thereon, shall be shown on the records of Lender by such method as
Lender may generally employ; provided, however, that failure to make any such
entry shall in no way detract from the obligation of Borrower under this Note.

 

If
this Note shall not be paid at maturity, whether such maturity occurs by reason
of lapse of time or by operation of any provision for acceleration of maturity
contained in the Credit Agreement, the principal hereof and the unpaid interest
thereon shall bear interest, until paid, at a

 

E-3

 

rate per annum equal to the Default Rate.  All payments of principal of and interest on
this Note shall be made in immediately available funds.

 

This Note is the Swing Line Note referred to in the Credit
Agreement.  Reference is made to the
Credit Agreement for a description of the right of the undersigned to anticipate
payments hereof, the right of the holder hereof to declare this Note due prior
to its stated maturity, and other terms and conditions upon which this Note is
issued.

 

Except as expressly provided in the Credit Agreement, Borrower
expressly waives presentment, demand, protest and notice of any kind.  This Note shall be governed by and construed
in accordance with the laws of the State of Ohio, without regard to conflicts
of laws provisions.

 

JURY TRIAL WAIVER.  BORROWER, TO
THE EXTENT PERMITTED BY LAW, HEREBY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE
IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE,
AMONG BORROWER, AGENT AND THE LENDERS, OR ANY THEREOF, ARISING OUT OF, IN
CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
AMONG THEM IN CONNECTION WITH THIS NOTE OR ANY OTHER NOTE OR OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE
TRANSACTIONS RELATED THERETO.

 

	
   

  	
  CINTAS
  CORPORATION NO. 2

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

E-4

 

EXHIBIT C

FORM OF

NOTICE OF LOAN

 

	
   

  	
  [Date]                                              ,
  20     

  

 

KeyBank
National Association, as Agent

127
Public Square

Cleveland,
Ohio 44114-0616

Attention:  Institutional Banking

 

Ladies
and Gentlemen:

 

The
undersigned, Cintas Corporation No. 2, refers to the Credit Agreement,
dated as of May 28, 2004 (the “Credit Agreement”, the terms defined
therein being used herein as therein defined), among the undersigned, the
Lenders, as defined in the Credit Agreement, KeyBank National Association, as
joint lead arranger and administrative agent for the Lenders (“Agent”), Banc
One Capital Markets, Inc., as joint lead arranger, Bank One, NA, as
syndication agent, Fifth Third Bank, as co-documentation agent, US Bank
National Association, as co-documentation agent, and The Bank of
Tokyo-Mitsubishi, Ltd., as co-documentation agent, and hereby gives you
notice, pursuant to Section 2.5 of the Credit Agreement that the
undersigned hereby requests a Loan under the Credit Agreement, and in
connection therewith sets forth below the information relating to the Loan (the
“Proposed Loan”) as required by Section 2.5 of the Credit Agreement:

 

(a)           The Business
Day of the Proposed Loan is                     ,
20    .

 

(b)           The amount of
the Proposed Loan is
$                              .

 

(c)           The Proposed
Loan is to be a Base Rate Loan o / Eurodollar Loan o / Swing Loan o.

(Check one.)

 

(d)           If the Proposed
Loan is a Eurodollar Loan, the Interest Period requested is one month o, two months o, three months o, six months o.

(Check one.)

 

The
undersigned hereby certifies on behalf of Borrower that the following
statements are true on the date hereof, and will be true on the date of the
Proposed Loan:

 

(i)            the
representations and warranties contained in each Loan Document are correct,
before and after giving effect to the Proposed Loan and the application of the
proceeds therefrom, as though made on and as of such date (except to the extent
such representation or warranty expressly relates to an earlier date); and

 

E-5

 

(ii)           no event has
occurred and is continuing, or would result from such Proposed Loan, or the
application of proceeds therefrom, that constitutes a Default or Event of
Default.

 

	
   

  	
  CINTAS
  CORPORATION NO. 2

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

E-6

 

EXHIBIT D

FORM OF

COMPLIANCE CERTIFICATE

 

	
   

  	
  For Fiscal Quarter ended                      

  

 

THE
UNDERSIGNED HEREBY CERTIFIES THAT:

 

(1)           I am the duly elected
[President or Chief Financial Officer or Treasurer] of CINTAS CORPORATION NO.
2, a Nevada corporation (“Borrower”);

 

(2)           I am familiar with the terms
of that certain Credit Agreement, dated as of May 28, 2004, among
Borrower, the Lenders, as defined therein, KeyBank National Association, as
joint lead arranger and administrative agent for the Lenders (“Agent”), Banc
One Capital Markets, Inc., as joint lead arranger, Bank One, NA, as
syndication agent, Fifth Third Bank, as co-documentation agent, US Bank
National Association, as co-documentation agent, and The Bank of
Tokyo-Mitsubishi, Ltd., as co-documentation agent (as the same may from
time to time be amended, restated or otherwise modified, the “Credit
Agreement”, the terms defined therein being used herein as therein defined),
and the terms of the other Loan Documents, and I have made, or have caused to
be made under my supervision, a review in reasonable detail of the transactions
and condition of Borrower and its Subsidiaries during the accounting period
covered by the attached financial statements;

 

(3)           The review described in
paragraph (2) above did not disclose, and I have no knowledge of, the
existence of any condition or event that constitutes or constituted a Default
or Event of Default, at the end of the accounting period covered by the
attached financial statements or as of the date of this Certificate; and

 

(4)           Set forth on Attachment I
hereto are calculations of the financial covenants set forth in Section 5.7
of the Credit Agreement, which calculations show compliance with the terms
thereof.

 

IN
WITNESS WHEREOF, I have signed this certificate the
       day of
                  ,
20      .

 

	
   

  	
  CINTAS
  CORPORATION NO. 2

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

E-7

 

EXHIBIT E

FORM OF

ASSIGNMENT AND ACCEPTANCE AGREEMENT

 

This Assignment and Acceptance Agreement (this “Assignment Agreement”)
between
                                            
(the “Assignor”) and
                                            
(the “Assignee”) is dated as of
                ,
20  .  The parties hereto agree
as follows:

 

1.             Preliminary
Statement.  Assignor is a party to a
Credit Agreement, dated as of May 28, 2004, among Cintas Corporation No. 2
(“Borrower”), the Lenders, as defined therein, KeyBank National Association, as
joint lead arranger and administrative agent for the Lenders (“Agent”), Banc
One Capital Markets, Inc., as joint lead arranger, Bank One, NA, as
syndication agent, Fifth Third Bank, as co-documentation agent, US Bank National
Association, as co-documentation agent, and The Bank of Tokyo-Mitsubishi, Ltd.,
as co-documentation agent (as the same may from time to time be amended,
restated or otherwise modified, the “Credit Agreement”). Capitalized terms used
herein and not otherwise defined herein shall have the meanings attributed to
them in the Credit Agreement.

 

2.             Assignment and
Assumption.  Assignor hereby sells
and assigns to Assignee, and Assignee hereby purchases and assumes from
Assignor, an interest in and to Assignor’s rights and obligations under the
Credit Agreement, effective as of the Assignment Effective Date (as hereinafter
defined), equal to the percentage interest specified on Annex 1 hereto
(hereinafter, “Assignee’s Percentage”) of Assignor’s right, title and interest
in and to (a) the Commitment of Assignor as set forth on Annex 1
hereto (hereinafter, the “Assigned Amount”), (b) any Loan made by Assignor
that is outstanding on the Assignment Effective Date, (c) Assignor’s
interest in any Letter of Credit outstanding on the Assignment Effective Date, (d) any
Note delivered to Assignor pursuant to the Credit Agreement, and (e) the
Credit Agreement and the other Related Writings.  After giving effect to such sale and
assignment and on and after the Assignment Effective Date, Assignee shall be
deemed to have a “Commitment Percentage” under the Credit Agreement equal to
the Commitment Percentage set forth in subpart II.A on Annex 1 hereto.

 

3.             Assignment
Effective Date.  The Assignment
Effective Date (the “Assignment Effective Date”) shall be
[                    
    ,         ] (or
such other date agreed to by Agent).  On
or prior to the Assignment Effective Date, Assignor shall satisfy the following
conditions:

 

(a)           receipt by Agent
of  this Assignment Agreement, including Annex
1 hereto, properly executed by Assignor and Assignee and accepted and
consented to by Agent and, if necessary pursuant to the provisions of Section 10.10(a) of
the Credit Agreement, by Borrower;

 

(b)           receipt by Agent
from Assignor of a fee of Three Thousand Five Hundred Dollars ($3,500), if
required by Section 10.10 of the Credit Agreement;

 

(c)           receipt by Agent
from Assignee of an administrative questionnaire, or other similar document,
which shall include (i) the address for notices under the Credit
Agreement, (ii) the address of its Lending Office, (iii) wire
transfer instructions for delivery of funds by Agent, (iv) and such other
information as Agent shall request; and

 

E-8

 

(d)           receipt by Agent
from Assignor or Assignee of any other information required pursuant to Section 10.10
of the Credit Agreement or otherwise necessary to complete the transaction
contemplated hereby.

 

4.             Payment
Obligations.  In consideration for
the sale and assignment of Loans hereunder, Assignee shall pay to Assignor, on
the Assignment Effective Date, the amount agreed to by Assignee and
Assignor.  Any interest, fees and other
payments accrued prior to the Assignment Effective Date with respect to the
Assigned Amount shall be for the account of Assignor.  Any interest, fees and other payments accrued
on and after the Assignment Effective Date with respect to the Assigned Amount
shall be for the account of Assignee. 
Each of Assignor and Assignee agrees that it will hold in trust for the
other part any interest, fees or other amounts which it may receive to which
the other party is entitled pursuant to the preceding sentence and to pay the
other party any such amounts which it may receive promptly upon receipt thereof.

 

5.             Credit
Determination; Limitations on Assignor’s Liability.  Assignee represents and warrants to Assignor,
Borrower, Agent and the Lenders (a) that it is capable of making and has
made and shall continue to make its own credit determinations and analysis
based upon such information as Assignee deemed sufficient to enter into the
transaction contemplated hereby and not based on any statements or
representations by Assignor, (b) Assignee confirms that it meets the
requirements to be an assignee as set forth in Section 10.10 of the Credit
Agreement; (c) Assignee confirms that it is able to fund the Loans and the
Letters of Credit as required by the Credit Agreement; (d) Assignee agrees
that it will perform in accordance with their terms all of the obligations
which by the terms of the Credit Agreement and the Related Writings are
required to be performed by it as a Lender thereunder; and (e) Assignee
represents that it has reviewed each of the Loan Documents.  It is understood and agreed that the assignment
and assumption hereunder are made without recourse to Assignor and that
Assignor makes no representation or warranty of any kind to Assignee and shall
not be responsible for (i) the due execution, legality, validity,
enforceability, genuineness, sufficiency or collectability of the Credit
Agreement or any Related Writings, (ii) any representation, warranty or
statement made in or in connection with the Credit Agreement or any of the
Related Writings, (iii) the financial condition or creditworthiness of Borrower
or Guarantor of Payment, (iv) the performance of or compliance with any of
the terms or provisions of the Credit Agreement or any of the Related Writings,
(v) the inspection of any of the property, books or records of Borrower,
or (vi) the validity, enforceability, perfection, priority, condition,
value or sufficiency of any collateral securing or purporting to secure the
Loans or Letters of Credit.  Neither
Assignor nor any of its officers, directors, employees, agents or attorneys
shall be liable for any mistake, error of judgment, or action taken or omitted
to be taken in connection with the Loans, the Letters of Credit, the Credit
Agreement or the Related Writings, except for its or their own bad faith or
willful misconduct.  Assignee appoints Agent
to take such action as agent on its behalf and to exercise such powers under
the Credit Agreement as are delegated to Agent by the terms thereof.

 

6.             Indemnity.  Assignee agrees to indemnify and hold
Assignor harmless against any and all losses, cost and expenses (including,
without limitation, attorneys’ fees) and liabilities 

 

E-9

 

incurred by Assignor in connection with or arising in any manner from
Assignee’s performance or non-performance of obligations assumed under this
Assignment Agreement.

 

7.             Subsequent
Assignments.  After the Assignment
Effective Date, Assignee shall have the right pursuant to Section 10.10 of
the Credit Agreement to assign the rights which are assigned to Assignee
hereunder, provided that (a) any such subsequent assignment does not
violate any of the terms and conditions of the Credit Agreement, any of the
Related Writings, or any law, rule, regulation, order, writ, judgment,
injunction or decree and that any consent required under the terms of the
Credit Agreement or any of the Related Writings has been obtained, (b) the
assignee under such assignment from Assignee shall agree to assume all of
Assignee’s obligations hereunder in a manner satisfactory to Assignor and
(c) Assignee is not thereby released from any of its obligations to
Assignor hereunder.

 

8.             Reductions of
Aggregate Amount of Commitments.  If
any reduction in the Total Commitment Amount occurs between the date of this
Assignment Agreement and the Assignment Effective Date, the percentage of the
Total Commitment Amount assigned to Assignee shall remain the percentage
specified in Section 1 hereof and the dollar amount of the Commitment of
Assignee shall be recalculated based on the reduced Total Commitment Amount.

 

9.             Acceptance of
Agent; Notice by Assignor.  This
Assignment Agreement is conditioned upon the acceptance and consent of Agent
and, if necessary pursuant to Section 10.10 of the Credit Agreement, upon
the acceptance and consent of Borrower; provided, that the execution of this
Assignment Agreement by Agent and, if necessary, by Borrower is evidence of
such acceptance and consent.

 

10.           Entire Agreement.  This Assignment Agreement embodies the entire
agreement and understanding between the parties hereto and supersedes all prior
agreements and understandings between the parties hereto relating to the
subject matter hereof.

 

11.           Governing Law.  This Assignment Agreement shall be governed
by the laws of the State of Ohio, without regard to conflicts of laws.

 

12.           Notices.  Notices shall be given under this Assignment
Agreement in the manner set forth in the Credit Agreement.  For the purpose hereof, the addresses of the
parties hereto (until notice of a change is delivered) shall be the address set
forth under each party’s name on the signature pages hereof.

 

[Remainder of page intentionally left blank.]

 

E-10

 

13.           JURY TRIAL
WAIVER.  EACH OF THE UNDERSIGNED, TO THE
EXTENT PERMITTED BY LAW, WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, AMONG
AGENT, ANY OF THE LENDERS, AND BORROWER, OR ANY THEREOF, ARISING OUT OF, IN
CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
AMONG THEM IN CONNECTION WITH THIS INSTRUMENT OR ANY NOTE OR OTHER AGREEMENT, INSTRUMENT
OR DOCUMENT EXECUTED OR DELIVERED IN CONNECTION THEREWITH OR THE TRANSACTIONS
RELATED HERETO.

 

IN
WITNESS WHEREOF, the parties hereto have executed this Assignment Agreement by
their duly authorized officers as of the date first above written.

 

	
  Address:

  	
   

  	
   

  	
  ASSIGNOR:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Attn:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  	
  ASSIGNEE:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Attn:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Accepted and Consented to this       day
  of        , 200 :

  	
   

  	
  Accepted
  and Consented to this     day of                ,
  200 :

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  KEYBANK NATIONAL ASSOCIATION, as Agent

  	
   

  	
  CINTAS
  CORPORATION NO. 2

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  
							

 

E-11

 

ANNEX 1 

TO 

ASSIGNMENT AND ACCEPTANCE AGREEMENT

 

On and after the Assignment Effective Date, the Commitment of Assignee,
and, if this is less than an assignment of all of Assignor’s interest,
Assignor, shall be as follows:

 

I.          INTEREST OF
ASSIGNOR BEING ASSIGNED TO ASSIGNEE

 

	
  A.

  	
  Assignee’s Percentage

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
  Assigned Amount

  	
   

  	
  $

  	
   

  	
   

  
						

 

II.        ASSIGNEE’S
COMMITMENT (as of the Assignment Effective Date)

 

	
  A.

  	
  Assignee’s Commitment Percentage under the Credit
  Agreement

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
  Assignee’s Commitment Amount under the Credit
  Agreement

  	
   

  	
  $

  	
   

  	
   

  
						

 

III.       ASSIGNOR’S
COMMITMENT (as of the Assignment Effective Date)

 

	
  A.

  	
  Assignor’s Commitment Percentage under the Credit
  Agreement

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
  Assignor’s Commitment Amount under the Credit Agreement

  	
   

  	
  $

  	
   

  	
   

  
						

 

E-12

 

EXHIBIT F

FORM OF

REQUEST FOR EXTENSION

 

[                                ,
20    ]

 

KeyBank
National Association, as Agent

127
Public Square

Cleveland,
Ohio 44114-0616

Attention:  Institutional Banking

 

Ladies
and Gentlemen:

 

The
undersigned, Cintas Corporation No. 2 (“Borrower”), refers to the Credit
Agreement, dated as of May 28, 2004 (the “Credit Agreement”, the terms
defined therein being used herein as therein defined), among the undersigned,
the Lenders, as defined in the Credit Agreement, KeyBank National Association,
as joint lead arranger and administrative agent for the Lenders (“Agent”), Banc
One Capital Markets, Inc., as joint lead arranger, Bank One, NA, as
syndication agent, Fifth Third Bank, as co-documentation agent, US Bank
National Association, as co-documentation agent, and The Bank of
Tokyo-Mitsubishi, Ltd., as co-documentation agent, and hereby gives you
notice, pursuant to Section 2.12 of the Credit Agreement that the undersigned
hereby requests an extension as set forth below (the “Extension”) under the
Credit Agreement, and in connection with the Extension sets forth below the
information relating to the Extension as required by Section 2.12 of the
Credit Agreement.

 

The
undersigned hereby requests Agent and the Lenders to extend the Commitment
Period from
                            
          , 200  to
                                
          , 200 .

 

The
undersigned hereby certifies that the following statements are true on the date
hereof, and will be true on the date of the Extension: (a) the
representations and warranties contained in each Loan Document are correct,
before and after giving effect to the Extension and the application of the
proceeds therefrom, as though made on and as of such date (except to the extent
such representation or warranty expressly relates to an earlier date); and (b) no
event has occurred and is continuing, or would result from such Extension, or
the application of proceeds therefrom, which constitutes a Default or an Event
of Default.

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  CINTAS
  CORPORATION NO. 2

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

E-13

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