Loan Agreement

Term Loan Agreement between Business or Corporate Borrower and Bank

Loan Agreement, made , between , a Banking corporation organized and existing under the laws of the state of , with its principal office located at , referred to herein as Bank, and , a corporation organized and existing under the laws of the state of , with its principal office located at , referred to herein as Borrower,

Whereas, Borrower has requested Bank to lend it up to $ on a term Loan basis (the Loan); and

Whereas, Bank is willing to lend Borrower up to $ on the terms and the conditions set forth below;

Now, therefore, for and in consideration of the mutual covenants contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1. Definitions

As used in this Agreement, the following terms have the following definitions:

A. Accounts, chattel paper, contracts, contract rights, documents, equipment, fixtures, general intangibles, goods, instruments, and inventory shall have the same respective meanings as are given to those terms in the Uniform Commercial Code as enacted in .

B. Collateral documents means all those documents specified in Section 3, Subparagraph A of this Agreement.

C. Consolidated cash flow means, as to Borrower, the aggregate of (i) net income after taxes; (ii) amortization of intangible assets; (iii) depreciation and depletion; and (iv) deferred taxes and expenses, all as shown by the consolidated income statement of Borrower and its subsidiaries, calculated in accordance with generally accepted accounting principles.

D. Consolidated current assets and consolidated current liabilities mean, at any time, all assets or liabilities, respectively, that, in accordance with generally accepted accounting principles consistently applied, should be classified as current assets or current liabilities, respectively, on a consolidated balance sheet of Borrower and its subsidiaries.

E. Consolidated fixed assets means, at any time, all assets (other than consolidated current assets) that, in accordance with generally accepted accounting principles consistently applied, should be classified as assets on a consolidated balance sheet of Borrower and its subsidiaries.

F. Consolidated liabilities means all indebtedness that, in accordance with generally accepted accounting principles consistently applied, should be classified as liabilities on a consolidated balance sheet of Borrower and its subsidiaries.

G. Consolidated long-term liabilities means consolidated liabilities less the portion that constitutes consolidated current liabilities.

H. Consolidated Net Working Capital means, at any time, the amount by which consolidated current assets exceed consolidated current liabilities.

I. Consolidated tangible net worth means, at any time, stockholders' equity, less the sum of:

1. Any surplus resulting from any write-up of assets subsequent to ;

2. Good will, including any amounts, however designated on a consolidated balance sheet of Borrower and its subsidiaries, representing the excess of the purchase price paid for assets or stock acquired over the value assigned to them on the books of Borrower;

3. Patents, trademarks, trade names, and copyrights;

4. Any amount at which shares of capital stock of Borrower appear as an asset on Borrower's balance sheet;

5. Loans and advances to stockholders, directors, officers, or employees; and

6. Deferred expenses.

J. Financial statements means the consolidated balance sheets of Borrower and its subsidiaries as of , , , and , and consolidated statements of income and retained earnings of Borrower and its subsidiaries for the years or months ended on those dates.

K. Indebtedness means, as to Borrower or any subsidiary, all items of indebtedness, obligation, or liability, whether matured or unmatured, liquidated or unliquidated, direct or contingent, joint or several, including, but not limited to:

1. All indebtedness guaranteed, directly or indirectly, in any manner, or endorsed (other than for collection or deposit in the ordinary course of business) or discounted with recourse;

2. All indebtedness in effect guaranteed, directly or indirectly, through Agreements, contingent or otherwise:

a. To purchase such indebtedness;

b. To purchase, sell, or lease (as lessee or lessor) property, products, materials, or supplies, or to purchase or sell services, primarily for the purpose of enabling Borrower to make payment of such indebtedness or to assure the owner of the indebtedness against loss; or

c. to supply funds to or in any other manner invest in the debtor;

3. All indebtedness secured by (or for which the holder of the indebtedness has a right, contingent or otherwise, to be secured by) any mortgage, deed of trust, pledge, lien, security interest, or other charge or encumbrance on property owned or acquired subject to the same, whether or not the liabilities secured by the same have been assumed; and

4. All indebtedness incurred as the lessee of goods or services under leases that, in accordance with generally accepted accounting principles, should not be reflected on the lessee's balance sheet.

L. Laws means all ordinances, statutes, rules, regulations, orders, injunctions, writs, or decrees of any government or political subdivision or agency, or any court or similar entity.

M. Obligations means the obligation of Borrower:

1. To pay the principal of any interest on the Note in accordance with its terms and to satisfy all of its other liabilities to Bank, whether under this Agreement or otherwise, whether now existing or later incurred, matured or unmatured, direct or contingent, joint or several, including any extensions, modifications, renewals, and substitutions;

2. To repay to Bank all amounts advanced by Bank under this Agreement or otherwise on behalf of Borrower, including, but not limited to, advances for principal or interest payments to prior secured parties, mortgagees, or lienors, or for taxes, levies, insurance, rent, repairs to or maintenance or storage of any of the collateral; and

3. To reimburse Bank, on demand, for all of Bank's expenses and costs, including reasonable fees and expenses of its counsel, in connection with the preparation, administration, amendment, modification, or enforcement of this Agreement and the documents required under this Agreement, including, but not limited to, any proceeding brought or threatened to enforce payment of any of the obligations referred to in subparagraphs M-1 and M-2 of this Section.

N. Permitted liens means:

1. Liens for taxes, assessments, or similar charges, incurred in the ordinary course of business, that are not yet due and payable;

2. Pledges or deposits made in the ordinary course of business to secure payment of workers' compensation, or to participate in any fund in connection with workers' compensation, unemployment insurance, old-age pensions, or other social security programs;

3. Liens of mechanics, materialmen, warehousemen, carriers, or other like liens, securing obligations incurred in the ordinary course of business, that are not yet due and payable;

4. Good faith pledges or deposits made in the ordinary course of business to secure performance of bids, tenders, contracts (other than for the repayment of borrowed money), or leases, not in excess of % of the aggregate amount due under the same, or to secure statutory obligations, or surety, appeal, indemnity, performance, or other similar bonds required in the ordinary course of business;

5. Encumbrances consisting of zoning restrictions, easements, or other restrictions on the use of real property, none of which materially impairs the use of such property by Borrower or any subsidiary in the operation of its business, and none of which is violated in any material respect by existing or proposed structures or land use;

6. Liens in favor of Bank;

7. Existing liens set forth or described on Exhibit A, attached and made a part of this Agreement;

8. Purchase money security interests granted to secure not more than % of the purchase price of assets, the purchase of which is permitted by Section 6;

9. The following, if the validity or amount is being contested in good faith by appropriate and lawful proceedings, so long as levy and execution on them have been stayed and continued to be stayed and they do not, in the aggregate, materially detract from the value of the property of Borrower or in any subsidiary, or materially impair its use in the operation of the business:

a. Claims or liens for taxes, assessments, or charges due and payable and subject to interest or penalty;

b. Claims, liens, and encumbrances on, and defects of title to, real or personal property, including any attachment of real or personal property or other legal process prior to adjudication of a dispute on the merits;

c. Claims or liens of mechanics, materialmen, warehousemen, carriers, or other like liens; and

d. Adverse judgments on appeal.

O. Person means any individual, corporation, partnership, association, joint-stock company, trust, unincorporated organization, joint venture, court, or government or political subdivision or agency.

P. Records means correspondence, memoranda, tapes, disks, papers, books, and other documents, or transcribed information of any type, whether expressed in ordinary or machine-readable language.

Q. Shareholders' Equity means, at any time, the aggregate of subordinated indebtedness plus some of the following accounts set forth in a consolidated balance sheet of the Borrower and its subsidiaries, prepared in accordance with generally accepted accounting principles consistently applied:

1. The par or stated value of all outstanding capital stock;

2. Capital surplus; and

3. Retained earnings.

R. Subordinated indebtedness means all indebtedness incurred at any time by Borrower or any subsidiary, repayment of which is subordinated to the obligations in form and manner satisfactory to Bank. All existing subordinated indebtedness is so specified in Exhibit B.

S. Subsidiary means any corporation of which more than % of the outstanding voting securities, at the time of determination, shall be owned directly or indirectly through one or more intermediaries by Borrower.

2. The Loan

A. Disbursement of the Loan. Bank will credit the proceeds of the Loan to Borrower's deposit account with Bank.

B. General terms. Subject to the terms of this Agreement, Bank will lend Borrower the principal sum of $ on a term basis (the Loan).

C. The Note. At the time of the making of the Loan, Borrower will execute and deliver a Note to Bank, in the form of Exhibit C (the Note).

D. Payments of principal. The principal of the Loan will be repaid in equal, consecutive, installments, payable on the last day of each month.

E. Prepayment. Borrower, without penalty or premium, may prepay the principal of the Loan in whole or, from time to time, in part, any partial payment to be made in the sum of $ or an integral multiple of such sum.

F. Interest rate and payments of interest.

1. Interest shall be paid as follows:

a. Subject to the provisions of Subparagraph F of this Section, interest on the principal balance of the Loan, from time to time outstanding, will be payable at the rate (the rate) of % above the prime rate in effect from time to time prior to maturity or % above the prime rate in effect from time to time after maturity, whether maturity is brought about by acceleration in the event of default or otherwise. For these purposes, prime rate shall mean the prime commercial rate announced by the Bank from time to time as its prime rate.

b. Each time the prime rate shall change, the rate shall change contemporaneously with such change. Interest shall be calculated on the basis of a 360-day year, counting the actual number of days elapsed, and shall be payable on the last day of each month, commencing on . After maturity, whether by acceleration or otherwise, accrued interest shall be payable on demand.

2. The rate is predicated on the condition that Borrower will maintain aggregate demand deposit balances with Bank in which (i) the average free balances will equal % of the unpaid principal amount of the term Loan; and (ii) in addition, in which the average free balances will equal % of the undisbursed portion of any revolving Loan commitment.

3. It is the intention of the parties to conform strictly to applicable usury laws in effect from time to time during the term of the Loan. Accordingly, if any transaction or transactions contemplated would be usurious under applicable law, then, in that event, notwithstanding anything to the contrary in this Agreement, or any other Agreement entered into in connection with this Agreement, it is agreed as follows:

a. The provisions of this Subparagraph F shall govern and control;

b. The aggregate of all interest under applicable law that is contracted for, charged, or received under this Agreement, or under any of the other above-mentioned Agreements or otherwise in connection with this Agreement, shall under no circumstances exceed the maximum amount of interest allowed by applicable law, and any excess shall be promptly credited to Borrower by Bank (or, if the consideration shall have been paid in full, the excess shall be promptly refunded to Borrower by Bank);

c. Neither the Borrower nor any person or entity now or later liable in connection with this Agreement shall be obligated to pay the amount of such interest to the extent that it is in excess of the maximum interest permitted by the applicable usury laws; and

d. The effective rate of interest shall be ipso facto reduced to the highest lawful rate defined below.

4. All sums paid, or agreed to be paid, to Bank for the use, forbearance, and detention of the indebtedness of Borrower to Bank, to the extent permitted by applicable law, shall be amortized, prorated, allocated, and spread throughout the full term of the Note until payment is made in full so that the actual rate of interest does not exceed the highest lawful rate in effect in any particular time during the full term.

G. Payment to Bank. All sums payable to Bank shall be paid directly to Bank in immediately available funds. Bank shall send Borrower statements of all amounts due, which statements shall be considered correct and conclusively binding on Borrower unless Borrower notifies Bank to the contrary within days of its receipt of any statement that it deems to be incorrect. Alternatively, at its sole discretion, Bank may charge against any deposit account of Borrower all or any part of any amount due.

3. Conditions Precedent

The obligation of Bank to make the Loan is subject to the following conditions precedent:

A. Documents required for closing. Borrower shall have delivered to Bank, prior to the disbursement of the Loan (the Closing), the following:

1. The Note;

2. A Pledge Agreement in the form attached as Exhibit D executed by , together with certificates representing the shares pledged, endorsed in blank;

3. A duly executed Guaranty Agreement of , in the form attached as Exhibit E;

4. Financing statements and lessors' and mortgagees' waivers required by Section 4;

5. A certified (as of the date of the closing) copy of resolutions of Borrower's Board of Directors authorizing the execution, delivery, and performance of this Agreement, the Note, the collateral documents, and each other document to be delivered pursuant to this Agreement;

6. A certified (as of the date of the closing) copy of Borrower's Bylaws;

7. A certificate (as of the date of the closing) of Borrower's corporate secretary as to the incumbency and signatures of the officers of Borrower signing this Agreement, the Note, the collateral documents, and each other document to be delivered pursuant to this Agreement;

8. A copy, certified as of the most recent date practicable, by the Secretary of State of , of Borrower's Certificate of Incorporation, together with a certificate (as of the date of the closing) of Borrower's corporate secretary to the effect that the Certificate of Incorporation has not been amended since the date of the certification;

9. Certificates, as of the most recent dates practicable, of the Secretary of State of , each state in which the Borrower is qualified as a foreign corporation, and the department of revenue or taxation of each such state, as to the good standing of Borrower;

10. A written opinion of , the Borrower's counsel, as of the date of the closing and addressed to the Bank, in form satisfactory to the Bank, to the effect that:

a. Borrower and its subsidiaries are corporations organized, existing, and in good standing under the laws of their respective states of incorporation (naming such states) and are qualified to transact business and are in good standing in those states where the nature of business or property owned by them requires qualification, as set forth in Exhibit F, attached and made a part of this Agreement, and, to the knowledge of such counsel, are not required to be qualified as foreign corporations in any other jurisdiction;

b. Borrower has the power to execute and deliver this Agreement, to borrow money under this Agreement, to grant the collateral required under it, to execute and deliver the Note and the collateral documents, and to perform such obligations;

c. All corporate action by Borrower, all consents and approvals of any persons, necessary to the validity of this Agreement, the Note, the collateral documents, and each other document to be delivered, has been obtained, and this Agreement, the Note, the collateral documents, and such other documents do not conflict with any provision of the charter or bylaws of Borrower, or of any applicable laws or any other Agreement binding Borrower or its property of which such counsel has knowledge;

d. This Agreement, the Note, the collateral documents, and all other Agreements to be delivered have been executed by, and each is a valid and binding obligation of, Borrower, enforceable in accordance with its terms;

e. The pledged stock constitutes all of the issued and outstanding capital stock of the respective issuers, and all pledged stock is fully paid and non-assessable; and

f. Such counsel is without any knowledge of any matters contrary to the representations and warranties contained in Section 5;

11. A certificate, as of the date of the closing, signed by the President or a vice president of Borrower, to the effect that:

a. The representations and warranties set forth within Section 5, are true as of the date of the closing; and

b. No event of default, and no event that with the giving of notice or passage of time, or both, would become such an event of default, has occurred as of such date;

12. Copies of all documents evidencing the terms and conditions of any debt specified as subordinated indebtedness on Exhibit B;

13. A Federal Reserve Form (e.g., U-1) , completed and executed by Borrower.

B. Certain Events. At the time of the closing:

1. No event of default shall have occurred and be continuing, and no event shall have occurred and be continuing that, with the giving of notice or passage of time, or both, would be an Event of Default;

2. No material adverse change shall have occurred in the financial condition of Borrower or any subsidiary since the date of this Agreement or the closing, as applicable; and

3. All of the collateral documents shall have remained in full force and effect.

C. Legal matters. At the time of the closing, all incidental legal matters shall be satisfactory to , counsel to Bank.

4. Collateral Security

A. Composition of the collateral. The property in which a security interest is granted pursuant to the provisions of Paragraphs B and C of this Section is collectively called the collateral. The collateral, together with all of Borrower's other property of any kind held by Bank, shall stand as one general, continuing, collateral security for all obligations and may be retained by Bank until all obligations have been satisfied in full.

B. Rights in property held by Bank. As security for the prompt satisfaction of all obligations, Borrower assigns, transfers, and sets over to Bank all of its right, title, and interest in and to, and grants Bank a lien on and a security interest in, all amounts that may be owing from time to time by Bank to Borrower in any capacity, including, but not limited to, any balance or share belonging to Borrower, or any deposit or other account with Bank, which lien and security interest shall be independent of any right of setoff that Bank may have.

C. Rights in property held by Borrower. As further security for the prompt satisfaction of all obligations arising under this Agreement, Borrower assigns to Bank all of its right, title, and interest in and to, and grants Bank the lien on and a security interest in, all of the following, wherever located, whether now owned or later acquired, together with all replacements and proceeds (including, but not limited to, insurance proceeds):

Accounts;

Chattel paper;

Contracts;

Contract rights;

Documents;

Equipment;

Fixtures;

General intangibles;

Instruments;

Inventory;

The realty described in Exhibit G;

The pledged stock;

Rights as seller of goods and rights to return or repossessed goods; and

All records pertaining to any other collateral.

D. Priority of liens. The above-stated liens shall be first and prior liens except for permitted liens.

E. Financing statements.

1. Borrower will:

a. Join with Bank in executing such financing statements (including amendments and continuation statements) in form satisfactory to Bank, as Bank may from time to time specify;

b. Pay to or reimburse Bank for all costs and taxes of filing or recording the statements in such public offices as Bank may designate; and

c. Take such other steps as Bank may direct, including the noting of Bank's lien on the collateral and on any certificates of title, to perfect Bank's interest in the collateral.

2. In addition to the foregoing, and not in limitation:

a. A carbon, photographic, or other reproduction of this Agreement shall be sufficient as a financing statement and may be filed in any appropriate office in lieu of a financing statement; and

b. To the extent lawful, Borrower appoints Bank as its attorney-in-fact (without requiring Bank to act as such) to execute any financing statement in the name of Borrower, and to perform all other acts that Bank deems appropriate to preserve and continue its security interest in, and to protect and preserve, the collateral.

F. Mortgagees' and Lessors' Waivers. Borrower will cause each mortgagee of all real estate owned by Borrower and each lessor of premises leased by Borrower to execute and deliver to Bank instruments, in form and substance satisfactory to Bank, by which such mortgagee or lessor waives its rights, if any, to all goods composing a part of the collateral.

5. Representations and Warranties

A. Original. To induce Bank to enter into this Agreement, Borrower represents and warrants to Bank as follows:

1. Borrower is a corporation organized, validly existing, and in good standing under the laws of ; each subsidiary of Borrower is a corporation organized, validly existing, and in good standing under the laws of its state of incorporation, all as set forth in Exhibit F; Borrower and its subsidiaries have the lawful power to own their properties and to engage in the business they conduct, and each is qualified and in good standing as a foreign corporation in the jurisdictions in which the nature of the business transacted by it or property owned by it makes such qualification necessary; the states in which Borrower and each subsidiary are qualified to do business are set forth in Exhibit F; the percentage of Borrower's ownership of the outstanding stock of each subsidiary is as listed in Exhibit H; the addresses of all places of business of Borrower and each subsidiary are as set forth in Exhibit I; and neither Borrower nor any subsidiary has changed its name, been the surviving corporation in a merger, acquired any business, or changed its principal executive office within years prior to the effective date of this Agreement, except as set forth in Exhibit J;

2. Neither Borrower nor any subsidiary is in default with respect to any of its existing indebtedness, and the making and performance of this Agreement, the Note, and the collateral documents will not immediately or with the passage of time, or the giving of notice, or both:

a. Violate the Charter or Bylaw provisions of Borrower, or violate any laws or result in a default under any contract, Agreement, or Agreement to which Borrower or any subsidiary is a party or by which Borrower or any subsidiary or its property is bound; or

b. result in the creation or imposition of any security interest in, or lien or encumbrance on, any of the assets of Borrower or any subsidiary, except in favor of Bank;

3. Borrower has the power and authority to enter into and perform this Agreement, the Note, and the collateral documents, and to incur such obligations, and has taken all corporate action necessary to authorize the execution, delivery, and performance of this Agreement, the Note, and the collateral documents;

4. This Agreement and the collateral documents are, and the Note when delivered will be, valid, binding, and enforceable in accordance with their respective terms;

5. Except as disclosed in Exhibit K, there is no pending order, notice, claim, litigation, proceeding, or investigation against or affecting Borrower or any subsidiary, whether or not covered by insurance, that would involve the payment of $ or more or materially and adversely affect the business or prospects of Borrower or any subsidiary if adversely determined;

6. Borrower and its subsidiaries have good and marketable title to all of their assets, which are not subject to any security interest, encumbrance, lien, or claim of any third person, except for permitted liens;

7. The financial statements, including any schedules and notes pertaining to the statements, have been prepared in accordance with generally accepted accounting principles consistently applied, and fully and fairly present the financial condition of Borrower and its subsidiaries at the dates of the financial statements and the results of operations for the periods covered by the same, and there have been no material adverse changes in the consolidated financial condition or business of Borrower and its subsidiaries from to the date of this Agreement;

8. As of , Borrower and its subsidiaries had no material indebtedness of any nature, including, but not limited to, liabilities for taxes and any interest or penalties relating to the same, except to the extent reflected (in a footnote or otherwise) and reserved against in the financial statements, or any material indebtedness of any nature not fully reflected and reserved against in the financial statements;

9. Except as otherwise permitted in this Agreement, Borrower and its subsidiaries have filed all federal, state, and local tax returns and other reports they are required by law to file prior to the effective date of this Agreement and that are material to the conduct of their respective businesses; have paid or caused to be paid all taxes, assessments, and other governmental charges that are due and payable prior to the effective date of the same; and have made adequate provision for the payment of such taxes, assessments, or other charges accruing but not yet payable; and Borrower has no knowledge of any deficiency or additional assessment in a materially important amount in connection with any taxes, assessments, or charges, not provided for on its books;

10. Except as otherwise disclosed in Exhibit L, or except to the extent that the failure to comply would not materially interfere with the conduct of the business of Borrower or any subsidiary, Borrower and its subsidiaries have complied with all applicable laws with respect to:

a. Any restrictions, specifications, or other requirements pertaining to products that Borrower or any subsidiary manufactures or sells or to the services each performs;

b. The conduct of their respective businesses; and

c. The use, maintenance, and operation of the real and personal properties owned or leased by them in the conduct of their respective businesses;

11. No representation or warranty by Borrower contained in this Agreement or in any certificate or other document furnished by Borrower pursuant to this Agreement contains any untrue statement of material fact or omits to state a material fact necessary to make such representations or warranty not misleading in light of the circumstances under which it was made;

12. Each consent, approval, or authorization of, or filing, registration, or qualification with, any person required to be obtained or effected by Borrower or any subsidiary in connection with the execution and delivery of this Agreement, the Note, and the collateral documents, or the undertaking or performance of such obligations, has been obtained or effected;

13. All existing indebtedness of Borrower:

a. For money borrowed; or

b. Under any security Agreement, mortgage, or Agreement covering the lease by Borrower as lessee or real or personal property, is described in Exhibit M;

14. Except as described in Exhibit N, Borrower and its subsidiaries have no material lease, contract, or commitment of any kind (such as employment Agreements; collective bargaining Agreements; powers of attorney; distribution arrangements; patent license Agreements; contracts for future purchase or delivery of goods or rendering of services; bonus, pension, and retirement plans; or accrued vacation pay, insurance, and welfare Agreements); all parties to all such material leases, contracts, and other commitments to which Borrower or any subsidiary is a party have complied with provisions of such leases, contracts, and other commitments; no party is in default under any such leases, contracts, and other commitments, and no event has occurred that, but for the giving of notice or the passage of time, or both, would constitute a default;

15. Neither Borrower nor any subsidiary has made any Agreement or has taken any action that may cause anyone to become entitled to a commission or finder's fee as a result of the making of the Loan;

16. Borrower's consolidated federal tax return for the year ended (year) has been audited and accepted as filed by the United States Internal Revenue Service;

17. All defined benefit pension plans, as defined in the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended, of Borrower and each subsidiary meet, as of this date, the minimum funding standards of Section 302 of ERISA, and, with respect to all employee benefit plans, as defined in ERISA, of Borrower and each subsidiary, no reportable event or prohibited transaction, as defined in ERISA, has occurred.

B. Survival. All of the representations and warranties set forth in Paragraph A of this Section shall survive until all obligations are satisfied in full.

6. Borrower’s Covenant

Borrower covenants and agrees with Bank that, so long as any of its obligations arising under this Agreement remain unsatisfied, Borrower will comply, and will cause its subsidiaries to comply, with the following covenants:

A. Affirmative covenants.

1. Borrower will use the proceeds of the Loan only for the purposes set forth in Exhibit O, and will furnish Bank such evidence as it may reasonably require with respect to such use.

2. Borrower will furnish Bank:

a. Within days after the close of each quarterly accounting period in each fiscal year (i) a consolidated statement of shareholders' equity and a consolidated statement of changes in financial position of Borrower and its subsidiaries for the quarterly period; (ii) consolidated and consolidating income statements of Borrower and subsidiaries for the quarterly period; and (iii) consolidated and consolidating balance sheets of Borrower and subsidiaries as of the end of the quarterly period -- all in reasonable detail, subject to year-end audit adjustments, and certified by Borrower's president or principal financial officer to have been prepared in accordance with generally accepted accounting principles consistently applied;

b. Within days after the close of each fiscal year (i) a consolidated statement of shareholders' equity and a consolidated statement of changes in financial position of Borrower and its subsidiaries for the fiscal year; (ii) consolidated and consolidating income statements of Borrower and subsidiaries for the fiscal year; and (iii) consolidated and consolidating balance sheets of Borrower and subsidiaries as of the end of the fiscal year -- all in reasonable detail, including all supporting schedules and comments -- the consolidated statement and balance sheet to be audited by or another independent certified public accountant selected by Borrower and acceptable to Bank, and certified by the accountants to have been prepared in accordance with generally accepted accounting principles consistently applied by Borrower and subsidiaries, except for any inconsistencies explained in the certificate. In addition, Borrower will obtain from the independent certified public accountants and deliver to Bank, within days after the close of each fiscal year, the accountants' written statement that, in making the examination necessary to their certification, they have obtained no knowledge of any event of default by Borrower, or disclosing all events of default of which they have obtained knowledge;

c. Contemporaneously with each quarterly and year-end financial report required by Subparagraph A, a certificate of the president or principal financial officer of Borrower stating that he or she has individually reviewed the provisions of this Agreement and that a review of the activities of Borrower and its subsidiaries during such year or quarterly period, as the case may be, has been made by or under the supervision of the signer of the certificate with a view to determine whether Borrower has kept, observed, performed, and fulfilled all its obligations under this Agreement, and that, to the best of his or her knowledge, Borrower has observed and performed every undertaking contained in this Agreement and is not at the time in default in the observance or performance of any of its terms and conditions or, if Borrower shall be so in default, specifying all such defaults and events of which he or she may have knowledge; and

d. Promptly after the sending or making available or filing of the same, copies of all reports, proxy statements, and financial statements that Borrower sends or makes available to its shareholders and all registration statements and reports that Borrower files with the Securities and Exchange Commission or any successor.

3. Borrower and its subsidiaries will maintain their inventory, equipment, real estate, and other properties in good condition and repair (normal wear and tear excepted); will pay and discharge or will cause to be paid and discharged when due the cost of repairs to or maintenance of the same; and will pay or cause to be paid all rental or mortgage payments due on the real estate. Borrower agrees that, if it or any subsidiary fails to pay or cause to be paid any such payment, Bank may do so and on demand be reimbursed by Borrower.

4. Borrower and its subsidiaries will maintain, or cause to be maintained, public liability insurance and fire and extended coverage insurance on all assets owned by them, all in such form and amounts as are consistent with industry practices and with such insurers as may be satisfactory to Bank. The policies shall contain a provision by which they cannot be canceled except after days' written notice to the Bank.

5. Borrower and its subsidiaries will pay or cause to be paid when due all taxes, assessments, and charges or levies imposed on them or on any of their property or that any of them is required to withhold and pay over, except when contested in good faith by appropriate proceedings, with adequate reserves for the same having been set aside on their books.

6. Borrower will maintain:

a. Consolidated net working capital in the following minimum amounts:

• During , $;

• During , $;

• During , $.

b. Consolidated tangible net worth in the following minimum amounts:

• During , $;

• During , $;

• During , $.

c. A ratio of consolidated liabilities to consolidated tangible net worth of not more than ; and

d. A ratio of consolidated current assets to consolidated current liabilities of not less than .

7. Borrower and its subsidiaries, within a reasonable time after written request, will make available for inspection by authorized representatives of Bank any of their books and records, and will furnish Bank any information regarding their business affairs and financial condition.

8. Borrower and its subsidiaries will take all necessary steps to preserve their corporate existence and franchises and comply with all present and future laws applicable to them in the operation of their respective businesses and all material Agreements to which they are subject.

9. Borrower and its subsidiaries will collect their accounts and sell their inventory only in the ordinary course of business.

10. Borrower and its subsidiary will keep accurate and complete records of their accounts, inventory, and equipment, consistent with sound business practices.

11. Borrower and its subsidiaries will give immediate notice to the Bank of:

a. Any litigation or proceeding in which any of them is a party, if an adverse decision in the litigation or proceeding would require them to pay over more than $ or deliver assets, the value of which exceeds such sum (whether or not the claim is considered to be covered by insurance); and

b. The institution of any other suit or proceeding involving any of them that might materially and adversely affect their operations, financial condition, property, or business.

12. Within days after Bank's request, Borrower will furnish Bank with copies of federal income tax returns filed by Borrower.

13. Borrower and its subsidiaries will pay when due (or within applicable grace periods) all indebtedness due third persons, except when the amount is being contested in good faith by appropriate proceedings and with adequate reserves for the same being set aside on the books of Borrower and its subsidiaries.

14. Borrower and its subsidiaries will notify Bank immediately if any of them becomes aware of the occurrence of any event of default or of any fact, condition, or event that, with the giving of notice or passage of time, or both, could become an event of default, or of the failure of Borrower or a subsidiary to observe any of their respective undertakings under this Agreement.

15. Borrower and its subsidiaries will notify Bank days in advance of any change in the location of any of their places of business or of the establishment of any new, or the discontinuance of any existing, place of business.

16. Borrower and its subsidiaries will:

a. Fund all their defined benefit pension plans in accordance with no less than the minimum funding standards required under ERISA;

b. Furnish Bank, promptly after the filing of the same, with copies of all reports or other statements filed with the United States Department of Labor or the Internal Revenue Service with respect to all employee benefit plans; and

c. Promptly advise Bank of any reportable event or prohibited transaction, as defined in ERISA, with respect to any employee benefit plan.

B. Negative covenants.

1. Neither Borrower nor any subsidiary will change its name, enter into any merger, consolidation, reorganization or recapitalization, or reclassify its capital stock.

2. Neither Borrower nor any subsidiary will sell, transfer, lease, or otherwise dispose of all, or (except in the ordinary course of business) any material part of, its assets.

3. Neither Borrower nor any subsidiary will mortgage, pledge, grant, or promote to exist a security interest in or lien on any of its assets of any kind, now owned or later acquired, except for permitted liens.

4. Neither Borrower nor any subsidiary will become liable, directly or indirectly, as guarantor or otherwise, for any obligation of any other person, except for the endorsement of commercial paper for deposit or collection in the ordinary course of business.

5. Neither Borrower nor any subsidiary will incur, create, assume, or permit to exist any indebtedness except:

a. The Loan;

b. Existing indebtedness as set forth in Exhibit B;

c. Trade indebtedness incurred in the ordinary course of business;

d. Contingent indebtedness permitted by Subparagraph B of this Section;

e. Indebtedness secured by permitted liens;

f. Lease obligation permitted by Subparagraph B of this Section.

6. Neither Borrower nor any subsidiary will declare or pay any dividends, or make any other payment or distribution on account of its capital stock.

7. Neither Borrower nor any subsidiary will form any subsidiary or make any investment in, or make any Loan in the nature of an investment to, a person.

8. Neither Borrower nor any subsidiary will make any Loan or advance to any officer, shareholder, director, or employee of Borrower or a subsidiary, except temporary advances in the ordinary course of business, nor pay salary to executive and management personnel aggregating more than $ per year.

9. Neither Borrower nor any subsidiary will make payments on account of the purchase or lease of consolidated fixed assets that, in the aggregate, in any fiscal year, commencing with the current fiscal year, will exceed the depreciation taken or to be taken with respect to consolidated fixed assets during that year.

10. Neither Borrower nor any subsidiary will pay, in an aggregate amount in any fiscal year, commencing with the current fiscal year, lease obligations in excess of $.

11. Neither Borrower nor any subsidiary will purchase, or otherwise invest in or hold, securities, non-operating real estate, or other non-operating assets, except:

a. Direct obligations of the United States of America;

b. The present investment in any such asset; and

c. Operating assets that subsequently become non-operating assets.

12. Neither Borrower nor any subsidiary will issue, redeem, purchase, or retire any of its capital stock or grant or issue any warrant, right, or option pertaining to its capital stock, or other security convertible into any of the foregoing.

13. Neither Borrower nor any subsidiary will prepay any subordinated indebtedness, indebtedness for borrowed money, or indebtedness secured by any of its assets (except the obligations) or enter into or modify any Agreement as a result of which the terms of payment of any of the foregoing indebtedness are waived or modified.

14. Neither Borrower nor any subsidiary will enter into any sale-leaseback transaction.

15. Neither Borrower nor any subsidiary will acquire any stock in, or all or substantially all of the asset of, any person.

16. Neither Borrower nor any subsidiary will furnish Bank with any certificate or other document that will contain any untrue statement of material fact or that will omit to state a material fact necessary to make it not misleading in light of the circumstances under which it was furnished.

17. Neither Borrower nor any subsidiary will directly or indirectly apply any part of the proceeds of the Loans to the purchasing or carrying of any "margin stock" within the meaning of Regulation U of the Board of Governors of the Federal Reserve System, or any regulations, interpretations, or rulings under the same.

7. Default

A. Events of default. The occurrence of any one or more of the following events shall constitute an event of default under this Agreement:

1. Borrower shall fail to pay when due any installment of principal or interest, or any fee or charge payable under this Agreement, and such failure shall continue for a period of days.

2. Borrower or any subsidiary shall fail to observe or perform any other obligation to be observed or performed by them under this Agreement or under any of the collateral documents, and this failure shall continue for days after notice of the failure from the Bank or the Bank is notified of the failure or should have been so notified pursuant to the provisions of this Agreement, whichever is earlier.

3. Borrower or any subsidiary shall fail to pay any indebtedness due to any third persons, and this failure shall continue beyond any applicable grace period, or Borrower or any subsidiary shall suffer to exist any other event of default under Agreement binding Borrower or any subsidiary.

4. Any financial statement, representation, warranty, or certificate made or furnished by Borrower or any subsidiary to Bank in connection with this Agreement, or as inducement to Bank to enter into this Agreement, or in any separate statement or document to be delivered under this Agreement to Bank, shall be materially false, incorrect, or incomplete when made.

5. Borrower or a subsidiary shall admit its inability to pay its debts as they mature, or shall make an assignment for the benefit of its or any of its creditors.

6. Proceedings in Bankruptcy, or for reorganization of Borrower or any subsidiary, or for the readjustment of any of their respective debts, under the Bankruptcy Code, as amended, or any part of the same, or under any other laws, whether state or federal, for the relief of debtors, now or later existing, shall be commenced against Borrower or any subsidiary and shall not be discharged within days of their commencement, or any such proceeding shall be commenced by Borrower or a subsidiary.

7. A receiver or trustee shall be appointed for Borrower or any subsidiary or for any substantial part of their respective assets, or any proceedings shall be instituted for the dissolution or the full or partial liquidation of Borrower or any subsidiary, and the receiver or trustee shall not be discharged within days of his or her appointment, or the proceedings shall not be discharged within days of their commencement, or Borrower or any subsidiary shall discontinue business or materially change the nature of its business.

8. Borrower or any subsidiary shall suffer final judgments for payment of money aggregating in excess of $ and shall not discharge the same within a period of days, unless, pending further proceedings, execution has not been commenced or, if commenced, has been effectively stayed.

9. A judgment creditor of Borrower or any subsidiary shall obtain possession of any of the collateral by any means, including, but not limited to, levy, distraint, replevin, or self-help.

10. Any obligee of subordinated indebtedness shall fail to comply with the subordination provisions of the instruments evidencing the subordinated indebtedness.

B. Acceleration. Immediately, and without notice, on the occurrence of an event of default specified in Subparagraph A of this Section, or at the option of Bank, but only on written notice to Borrower, or on the occurrence of any other event of default, all obligations, whether under this Agreement or otherwise, shall immediately become due and payable without further action of any kind.

C. Remedies. After any acceleration, as provided in Paragraph B of this Section, Bank shall have, in addition to the rights and remedies given to it by this Agreement, the Note, and the collateral documents, all those rights and remedies allowed by all applicable laws, including, but not limited to, the Uniform Commercial Code as enacted in any jurisdiction in which any collateral may be located.

8. Construction of Agreement

The provisions of this Agreement shall be in addition to those of any guaranty, pledge, security Agreement, Note, or other evidence of liability held by Bank, all of which shall be construed as complementary to each other.

9. Further Assurance

From time to time, Borrower shall execute and deliver to Bank such additional documents and will provide such additional information as Bank may reasonably require to carry out the terms of this Agreement and be informed of Borrower's status and affairs.

10. Enforcement and Waiver by Bank

Bank shall have the right at all times to enforce the provisions of this Agreement and the collateral documents in strict accordance with their terms, notwithstanding any conduct or custom on the part of Bank in refraining from so doing at any time or times.

11. Expenses of Bank

Borrower, on demand, will reimburse Bank for all expenses, including the reasonable fees and expenses of legal counsel for Bank, incurred by Bank in connection with the preparation, administration, amendment, modification, or enforcement of this Agreement and the collateral documents, and the collection or attempted collection of the Note.

12. Notices

Unless provided herein to the contrary, any notice provided for or concerning this Agreement shall be in writing and shall be deemed sufficiently given when sent by certified or registered mail if sent to the respective address of each party as set forth at the beginning of this Agreement.

13. Waiver and Release by Borrower

To the maximum extent permitted by applicable laws, Borrower and each subsidiary of Borrower:

A. Waive (i) protest of all commercial paper at any time held by Bank on which Borrower or any subsidiary is in any way liable; and (ii) notice of acceleration and of intention to accelerate, and notice and opportunity to be heard, after acceleration in the manner provided in Section 7, before exercise by Bank of the remedies of self-help, set off, or of other summary procedures committed by any applicable laws or by any Agreement with Borrower or any subsidiary, and, except when required by this Agreement or by any applicable laws, notice of any other action taken by Bank; and

B. Release Bank and its officers, attorneys, agents, and employees from all claims for loss or damage caused by any act or omission on the part of any of them, except willful misconduct.

14. Severability

The invalidity of any portion of this Agreement will not and shall not be deemed to affect the validity of any other provision. If any provision of this Agreement is held to be invalid, the parties agree that the remaining provisions shall be deemed to be in full force and effect as if they had been executed by both parties subsequent to the expungement of the invalid provision.

15. Governing Law

This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of .

16. Entire Agreement

This Agreement shall constitute the entire agreement between the parties and any prior understanding or representation of any kind preceding the date of this Agreement shall not be binding upon either party except to the extent incorporated in this Agreement.

17. Modification of Agreement

Any modification of this Agreement or additional obligation assumed by either party in connection with this Agreement shall be binding only if placed in writing and signed by each party or an authorized representative of each party.

18. Assignment of Rights

The rights of each party under this Agreement are personal to that party and may not be assigned or transferred to any other person, firm, corporation, or other entity without the prior, express, and written consent of the other party.

19. Counterparts

This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one and the same instrument.

20. Compliance with Laws

In performing under this Agreement, all applicable governmental laws, regulations, orders, and other rules of duly-constituted authority will be followed and complied with in all respects by both parties.

21. Necessary Acts and Further Assurances

The parties shall at their own cost and expense execute and deliver such further documents and instruments and shall take such other actions as may be reasonably required or appropriate to evidence or carry out the intent and purposes of this Agreement or to show the ability to carry out the intent and purposes of this Agreement.

22. In this Agreement, any reference to a party includes that party's heirs, executors, administrators, successors and assigns, singular includes plural and masculine includes feminine.

WITNESS our signatures as of the day and date first above stated.