CREDIT AGREEMENT

Exhibit 10.1

CREDIT AGREEMENT

by and between

SURMODICS., INC.

and

WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Sole Lead Arranger and Administrative Agent

and the Lenders party hereto

Dated as of February 27, 2009

TABLE OF CONTENTS

CREDIT AGREEMENT

      This Credit Agreement, together with all exhibits and schedules attached hereto and hereby made a part hereof (“ Agreement ”) , is made as of February 27, 2009, by and among SurModics, Inc. , a Minnesota corporation (the “ Borrower ”), the financial institutions from time to time party hereto (the “ Lenders ”) and Wells Fargo Bank, National Association , a national banking association (in its individual capacity, “ Wells Fargo ”), and Wells Fargo as sole lead arranger and as administrative agent for the Lenders (in such administrative agent capacity, the “ Agent ”).

RECITALS

     A. Borrower and Guarantors have requested that Wells Fargo and Lenders make available to Borrower the extensions of credit and certain other financial accommodations referenced herein.

     B. Wells Fargo and the Lenders have agreed severally to make available to Borrower the extensions of credit and other financial accommodations referenced herein on the terms and conditions contained herein.

     NOW THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein and for other good and valuable consideration, the parties agree as follows:

ARTICLE 1.
DEFINITIONS AND ACCOUNTING TERMS

      Section 1.1 Defined Terms . In addition to the terms defined elsewhere in this Agreement, the following terms shall have the following respective meanings (and such meanings shall be equally applicable to both the singular and plural form of the terms defined, as the context may require):

     “ Advance ” means either a LIBOR Advance or a Floating Rate Advance.

     “ Acquisition ” means any transaction, or any series of related transactions, consummated on or after the date of this Agreement, by which the Borrower or any of its Subsidiaries (i) acquires any going business or all or substantially all of the assets of any Person, or division thereof, whether through purchase of assets, merger or otherwise; or (ii) directly or indirectly acquires (in one transaction or as the most recent transaction in a series of transactions) all of the securities of a corporation or of the outstanding ownership interests of a partnership or limited liability company or other business entity.

     “ Acquisition Limit ” means the lesser of (a) $30,000,000 or (b) the aggregate EBITDA for the immediately preceding twelve month period.

     “ Advance Date ” means the date of the making of any Advance hereunder.

     “ Affiliate” or “ Affiliates ” means with respect to any Person (a) each Person that is directly or indirectly controlling, controlled by, or under common control with such Person; (b) each Person that, directly or indirectly owns or holds ten percent (10%) or more of any equity interest in such Person; or (c) ten percent (10%) or more of whose voting stock or other equity interest is directly or indirectly owned or held by such Person. For purposes of this definition, “control” (including with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”) means the possession directly or indirectly of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities or by contract or otherwise. Notwithstanding the foregoing, none of Agent, any Lender nor any of their respective Affiliates shall be considered an Affiliate of any Borrower or any of its Subsidiaries.

     “ Agreement ” means this Credit Agreement, as it may be amended, modified, supplemented, restated or replaced from time to time.

     “ Approved New Lender Offerees ” has the meaning given in Section 2.1(a)(iii)A.

     “ Assignment Certificate ” has the meaning given in Section 2.1(a).

     “ Business Day ” means any day (other than a Saturday, Sunday or legal holiday in the State of Minnesota) on which national banks are permitted to be open in Minneapolis, Minnesota.

     “ Change of Control ” means any event or series of events whereby any Person or “group” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that any such Person, entity or group will be deemed to have “beneficial ownership” of all securities that such Person, entity or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than twenty-five percent (25%) of the voting power of all classes of ownership of Borrower.

     “ Code ” means The Internal Revenue Code of 1986, as amended, or any successor statute, together with regulations thereunder.

     “ Commitment ” means with respect to any Lender, the obligation of such Lender, if any, to make Revolving Loans and participate in and Letter of Credit Obligations in an aggregate principal and/or face amount not to exceed the amount set forth under the heading “Commitment” opposite such Lender’s name on Schedule 1.1A or in the Assignment and Assumption or New Lender Supplement pursuant to which such Lender became a party hereto, as the same may be changed from time to time pursuant to the terms hereof.

     “ Commitment Increase Notice ” has the meaning given in Section 2.1(a)(iii)A.

     “ Commitment Increase Supplement ” shall have the meaning given in Section 2.1(a)(iii)C.

     “ Contingent Debt ” means all contingent liabilities, including but not limited to guaranties.

     “ Current Liabilities ” means all Debt of the Borrower and its Subsidiaries due on demand or within one year from the date of determination thereof, all borrowings under the Revolving Loan Commitment and any Letter of Credit Obligations and all other items (including taxes accrued as estimated), which in accordance with GAAP, may be properly classified as current liabilities.

     “ Debt ” of any Person means (i) all items of indebtedness or liability which in accordance with GAAP would be included in determining total liabilities as shown on the liabilities side of a balance sheet (except that derivative liabilities will be excluded to the extent of corresponding derivative assets provided that no credit shall be given to the extent that derivative assets exceed derivative liabilities) of that Person as at the date as of which Debt is to be determined and (ii) if not included in items (i) or (iii), indebtedness secured by any mortgage, pledge, lien or security interest existing on property owned by such Person, whether or not the indebtedness secured thereby shall have been assumed, and (iii) if not included in items (i) or (ii), guaranties and endorsements (other than for purposes of collection in the ordinary course of business) by such Person and other contingent obligations of such Person in respect of, or to purchase or otherwise acquire, indebtedness of others.

     “ Default ” means any event which, with the giving of notice to the Borrower or lapse of time, or both, would constitute an Event of Default.

     “ Defaulting Lender ” a Lender that (a) has failed to fund its portion of any Loan or any participations in Letters of Credit that it is required to fund under this Agreement and has continued in such failure for three Business Days after written notice from the Agent, (b) has otherwise failed to pay over to the Agent or any other Lender any other amount required to be paid by it hereunder within three Business Days of the date when due, unless the subject of a good faith dispute, or (c) has been deemed insolvent or become the subject of a receivership, bankruptcy or insolvency proceeding.

     “ Default Rate ” shall have the meaning given to it in Section 2.5(e).

     “ Dollars ” and “ $ ” means dollars in lawful currency of the United States.

     “ EBITDA ” means, with reference to any period, the Net Income (or loss) of the Borrower and its Subsidiaries for such period, plus , to the extent deducted in determining such Net Income, (i) consolidated interest expense (net of capitalized interest), (ii) expense for income taxes paid or accrued, (iii) depreciation, and (iv) amortization, all calculated for the Borrower and its Subsidiaries on a consolidated basis, in accordance with GAAP.

     “ ERISA ” means The Employee Retirement Income Security Act of 1974, as amended, and any successor statute, together with regulations thereunder.

     “ ERISA Affiliate ” means any trade or business (whether or not incorporated) that is a member of a group of which the Borrower is a member and which is treated as a single employer under Section 414 of the Code.

     “ Event of Default ” means any event described in Section 7.1.

     “ Floating Rate ” means with respect to any Floating Rate Advances: (i) from the date hereof, until Borrower receives written notice from the Agent, the LIBOR Base Rate applicable to a 90-day Interest Period plus the applicable Margin pursuant to Subsection 2.5(c) below, which LIBOR Base Rate shall, in each case, change when and as the LIBOR Base Rate applicable to a 90-day Interest Period changes; and (ii) from the date the Borrower receives written notice from the Agent, the Prime Rate, which interest rate shall, in each case, change when and as the Prime Rate changes.

     “ Floating Rate Advance ” means an Advance specified as such in a notice of borrowing under Section 2.2 or a notice of continuation or conversion under Section 2.1(a)(ii).

     “ Funded Debt ” means the sum of all Debt of the Borrower and its Subsidiaries, determined on a consolidated basis, of any maturity, on which such entity customarily pays interest, including, but not limited to: (i) all rental payments under capitalized leases, (ii) all subordinated debt (whether or not such entity pays interest thereon), and (iii) all Letter of Credit Obligations.

     “ GAAP ” means generally accepted accounting principles as applied in the preparation of the audited financial statement of the Borrower referred to in Section 4.5.

     “ Guarantors ” means, collectively, each Subsidiary that shall become a Guarantor as required by Section 5.11 hereof and any other Person who becomes a Guarantor of the Obligations.

     “ Guaranties ” means, collectively, each and every Guaranty executed by a Guarantor in favor of the Agent for the benefit of the Lenders, in form and substance acceptable to Agent, as such Guaranty may hereafter be amended, modified, or replaced from time to time.

     “ Interest Period ” means, for any LIBOR Advance, the period commencing on the borrowing date of such LIBOR Advance or the date LIBOR Advance is converted into such LIBOR Advance, or the last day of the preceding Interest Period for any outstanding LIBOR Advance being continued into a subsequent Interest Period, as the case may be, and ending on the numerically corresponding day one, two, three, six or twelve months thereafter, as selected by the Borrower pursuant to Article 2 hereof; provided , that:

     (a) any Interest Period which would otherwise end on a day which is not a Business Day shall end on the next succeeding LIBOR Business Day unless such next succeeding LIBOR Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding LIBOR Business Day;

     (b) any Interest Period which begins on the last LIBOR Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last LIBOR Business Day of the calendar month at the end of such Interest Period; and

     (c) no Interest Period shall extend beyond the Termination Date.

     “ Lenders ” has the meaning set forth in the first paragraph of page one (1) of this Agreement.

     “ Letter of Credit ” means any letter of credit issued by the Agent on the application of the Borrower.

     “ Letter of Credit Application ” means an application by the Borrower, in a form and containing terms and provisions acceptable to the Agent, for the issuance by the Agent of a Letter of Credit.

     “ Letter of Credit Obligations ” means, as of any date of determination, the sum of (a) the amount available to be drawn or which may become available to be drawn under Letters of Credit outstanding on such date, (b) the aggregate amount of Unpaid Drawings on such date, and (c) to the extent not included in the foregoing, all accrued and unpaid interest, fees and expenses with respect thereto.

     “ LIBOR Advance ” means an Advance specified as such in a notice of borrowing under Section 2.1(a)(i), or a notice of continuation or conversion under Section 2.1(a)(ii).

     “ LIBOR Base Rate ” with respect to each Interest Period pertaining to a LIBOR Advance, the rate per annum determined on the basis of the rate for deposits in Dollars for a period equal to such Interest Period commencing on the first day of such Interest Period appearing on Page 3750 of the Telerate screen as of 11:00 A.M., London time, two (2) Business Days prior to the beginning of such Interest Period, such rate to remain fixed for such Interest Period. In the event that such rate does not appear on Page 3750 of the Telerate screen (or otherwise on such screen), the “LIBOR Base Rate” shall be determined by reference to such other comparable publicly available service for displaying LIBOR rates as may be selected by the Agent or, in the absence of such availability, by reference to the rate at which the Agent is offered Dollar deposits at or about 10:00 A.M. two Business Days prior to the beginning of such Interest Period in the London interbank market where its foreign currency and exchange operations are then being conducted for delivery on the first day of such Interest Period for the number of days comprised therein. Notwithstanding the foregoing, with respect to any Interest Period less than or equal to 90 days, the “LIBOR Base Rate” shall be the rate per annum determined on the basis of the rate for deposits in Dollars for a period equal to 90 days, as such rate is determined above.

     “ LIBOR Business Day ” means a day on which banks are open for business in the State of Minnesota and on which dealings in U.S. dollar deposits are carried on in the London interbank market.

     “ LIBOR Rate ” means the rate per annum (rounded upward, if necessary, to the nearest whole 1/8 of 1%) and determined pursuant to the following formula:

     “ LIBOR Reserve Percentage ” of any Lender for any Interest Period as applied to a LIBOR Advance, the reserve percentage applicable during such Interest Period (or if more than

one such percentage shall be so applicable, the daily average of such percentages for those days in such Interest Period during any such percentage shall be so applicable) under any regulations of the Board or other Governmental Authority having jurisdiction with respect to determining the maximum reserve requirement (including basic, supplemental and emergency reserves) for such Lender with respect to liabilities or assets consisting of or including “Eurocurrency Liabilities” (as defined in Regulation D of the Federal Reserve Board, as amended) having a term equal to such Interest Period.

     “ Lien ” means any security interest, mortgage, pledge, lien, hypothecation, judgment lien or similar legal process, charge, encumbrance, title retention agreement or analogous instrument or device (including, without limitation, the interest of the lessors under capital leases and the interest of a vendor under any conditional sale or other title retention agreement).

     “ Loan Documents ” means this Agreement, the Note, the Negative Pledge Agreement, and each other instrument, document, guaranty, security agreement, mortgage, or other agreement executed and delivered by the Borrower or any party in connection with this Agreement, the Loans or the Letters of Credit, or any collateral for the Loans or Letter of Credit Obligations, in each case, including any amendment, waiver, supplement or other modification to any of the foregoing.

     “ Loans ” means the Revolving Loan and all Advances thereunder.

     “ Marketable Securities ” means any of the following:

     (a) Direct obligations of, or obligations the principal and interest on which are unconditionally guaranteed by, the United States of America or obligations of any agency of the United States of America to the extent such obligations are backed by the full faith and credit of the United States of America, in each case maturing within one year from the date of acquisition thereof;

     (b) Certificates of deposit, time or demand deposit accounts or bankers acceptances maturing within one year from the date of acquisition thereof issued by a commercial bank or trust company organized under the laws of the United States of America or a state thereof or that is a Lender, provided that (i) such deposits or bankers acceptances are denominated in Dollars, (ii) such bank or trust company has capital, surplus and undivided profits of not less than $100,000,000 and (iii) such bank or trust company has certificates of deposit or other debt obligations rated at least A-1 (or its equivalent) by S&P or P-1 (or its equivalent) by Moody’s;

     (c) Open market commercial paper maturing within 360 days from the date of acquisition thereof issued by a corporation organized under the laws of the United States of America or a state thereof, provided such commercial paper is rated at least A-1 (or its equivalent) by S&P or P-1 (or its equivalent) by Moody’s;

     (d) Any repurchase agreement entered into with a commercial bank or trust company organized under the laws of the United States of America or a state thereof or that is a Lender, provided that (i) such bank or trust company has capital, surplus and

undivided profits of not less than $100,000,000, (ii) such bank or trust company has certificates of deposit or other debt obligations rated at least A-1 (or its equivalent) by S&P or P-1 (or its equivalent) by Moody’s, (iii) the repurchase obligations of such bank or trust company under such repurchase agreement are fully secured by a perfected security interest in a security or instrument of the type described in clause (a), (b) or (c) above and (iv) such security or instrument so securing the repurchase obligations has a fair market value at the time such repurchase agreement is entered into of not less than 100% of such repurchase obligations;

     (e) shares of any money market mutual or similar fund that has all or at least 95% of its assets invested continuously in investments satisfying the requirements of clauses (a) through (d) of this definition;

     (f) securities with maturities of one year or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may be) are rated at least A by S&P or A2 by Moody’s; and

     (g) to the extent not included in items (a) through (f) above, any securities purchased in accordance with the Borrower’s Investment Policy adopted by its board of directors on January 30, 2006 and attached hereto as Schedule 4.17 , provided that such securities maintain a rating of A or higher at the time of purchase.

     “ Margin ” has the meaning given to it in Section 2.5(c).

     “ Margin Adjustment Date ” has the meaning given to it in Section 2.5(c).

     “ Material Adverse Effect ” means (a) a material adverse effect upon the business, operations, properties, assets or condition (financial or otherwise) of any Borrower, or (b) the impairment of the ability of any party to perform its obligations under any Loan Document to which it is a party or of Agent or any Lender to enforce any Loan Document or collect any of the Obligations. In determining whether any individual event would result in a Material Adverse Effect, notwithstanding that such event does not of itself have such effect, a Material Adverse Effect shall be deemed to have occurred if the cumulative effect of such event and all other then existing events would result in a Material Adverse Effect.

     “ Multiemployer Plan ” means a multiemployer plan (as defined in Section 4001(a)(3) of ERISA) to which the Borrower or any ERISA Affiliate contributes or is obligated to contribute.

     “ Negative Pledge Agreement ” means that certain Negative Pledge Agreement of even date herewith and executed by the Borrower and each Subsidiary in favor of the Lender.

     “ Net Income ” means, with reference to any period, the net income (or loss) of the Borrower and its Subsidiaries for such period plus , to the extent deducted in calculating such net income, (i) Purchased In-Process Research and Development Expense, (ii) non-recurring costs or

expense incurred with a merger, acquisition or restructuring (financial or operational) (acceptable to Agent) and (iii) extraordinary non-cash losses incurred other than in the ordinary course of business, minus , to the extent included in such net income, extraordinary gains realized other than in the ordinary course of business, all calculated for the Borrower and its Subsidiaries on a consolidated basis, in accordance with GAAP.

     “ New Lender Supplement ” as defined in Section 2.1(a)(iii)B.

     “ New Revolving Credit Lender ” as defined in Section 2.1(a)(iii)B.

     “ Notes ” means any or all of the Revolving Notes.

     “ Obligations ” means all of Borrower’s and each Guarantor’s liabilities, obligations, and other Debt to Agent and Lenders of any and every kind and nature under or with respect to the all Loan Documents, whether heretofore, now or hereafter owing, arising, due or payable and howsoever evidenced, created, incurred, acquired, or owing, whether individually or collectively, direct or indirect, joint or several, absolute or contingent, primary or secondary, fixed or otherwise (including obligations of performance) and whether arising or existing under written agreement, oral agreement or operation of law, including, without limitation, all of Borrower’s reimbursement obligations, whether contingent or liquidated, with respect to any Letter of Credit and all of Borrower’s and each Guarantor’s other Debt and obligations to Agent and Lenders under or in respect of this Agreement, the other Loan Documents and any Rate Contract between Borrower and Agent or an Affiliate of Agent.

     “ PBGC ” means the Pension Benefit Guaranty Corporation, established pursuant to Subtitle A of Title IV of ERISA, and any successor thereto or to the functions thereof.

     “ Permitted Acquisition ” means any proposed Acquisition by the Borrower of any capital stock or other equity interests in another business entity, or of any amount of the assets of another business entity that complies with the following terms and conditions:

     (a) if acquiring a business entity, such business entity (together with any of its direct and indirect Subsidiaries) must be (i) in the same general line of business as the Borrower, and (ii) a corporation, limited liability company or partnership organized under the laws of any one of the United States of America;

     (b) the aggregate purchase price for such Acquisition, including assumed debt earn-outs (including any contingent milestone payments) and any non-cash purchase price consideration, together with the aggregate consideration paid in connection with all Acquisitions and the aggregate of all investments in Related Entities occurring during the twelve (12) months immediately preceding such Acquisition, for which consent was not required, does not in the aggregate exceed the Acquisition Limit;

     (c) after giving effect to such Acquisition and the incurrence of any Debt in connection therewith, (i) no Default or Event of Default shall exist, (ii) the Borrower shall be in compliance on a pro-forma basis with the financial covenants set forth in Section 5.2 hereof recomputed for the most recently ended month for which information is available regarding the business being acquired, and for all periods following the consummation of the proposed Acquisition for which projections have been prepared,

based on the projected combined operating results of the targeted business and of the Borrower and its then-existing Subsidiaries, each on a consolidated basis, and (iii) the Borrower shall be in compliance with all other terms and conditions contained in this Agreement;

     (d) for any Acquisition of capital stock or other equity interests of a Person, Borrower shall cause such Person (together with, if applicable, any Subsidiary of Borrower used to acquire such equity interest) to become a Guarantor hereunder by executing and delivering a Guaranty, a Negative Pledge Agreement, and documents of the nature of those described in Section 3.1(a)(iii) through (vii) for such Person, each in form and substance acceptable to the Agent;

     (e) the acquired entity and or the assets acquired shall be acquired on a non-hostile basis;

     (f) Borrower shall purchase, or purchase through a Subsidiary, the acquired assets of a Person or with respect to the Acquisition of any equity interests, 100% of the outstanding ownership interests of such acquired entity; and

     (g) as soon as available, but in any event not less than ten (10) Business Days prior to the consummation of such proposed Acquisition, the Borrower shall have provided prior written notice of such Acquisition to the Agent and upon request, shall promptly provide Agent with true, correct and complete copies of all acquisition-related documents, historical financial statements of any acquired entity, together with such other documents, reports, searches, instruments and information as any Lender may request.

     “ Permitted Liens ” has the meaning given in Section 6.4 hereto.

     “ Person ” means any natural person, corporation, partnership, joint venture, firm, association, trust, unincorporated organization, government or governmental agency or political subdivision or any other entity, whether acting in an individual, fiduciary or other capacity.

     “ Plan ” means an employee benefit plan or other plan, including a Multiple Employer Plan, maintained for employees of the Borrower or of any ERISA Affiliate, and subject to Title IV of ERISA or Section 412 of the Code.

     “ Prime Rate ” means the prime rate announced by the Agent from time to time.

     “ Pro Rata Share ” means as to any Lender, the fraction (expressed as a percentage) the numerator of which is such Lender’s Commitment, each as set forth on Schedule 1.1A hereto or an executed Assignment Certificate, and the denominator of which is the sum of the aggregate Revolving Loan Commitment, provided that if the Revolving Loan Commitment has been terminated, the numerator shall be the unpaid amount of such Lender’s Loans plus the aggregate amount of all participations purchased by such Lender in the outstanding Letter of Credit Obligations, and the denominator shall be the aggregate amount of all unpaid Loans, plus the aggregate amount of all Letters of Credit Obligations.

     “ Purchased In-Process Research and Development Expense ” means the cost of research and development activities, that when acquired through a merger, acquisition or other business combination do not have an alternative future use (as determined under GAAP) and in accordance with GAAP must therefore be expensed at the time of the consummation of the business combination.

     “ Quick Ratio ” means for any period the aggregate of unrestricted cash, unrestricted Marketable Securities (including any “available for sale” Marketable Securities classified as long term for balance sheet purposes and the fair market value of any Marketable Securities classified as “held to maturity” for balance sheet purposes) and net accounts receivable divided by total current liabilities (including any non-current portion of revolving debt and any outstanding letters of credit), as determined in accordance with GAAP.

     “ Rate Contracts ” means any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions.

     “ Related Entity ” means any Person in which the Borrower or a Subsidiary has directly or indirectly made an investment and such Person is not a Subsidiary.

     “ Reportable Event ” means, as to Borrower and each ERISA Affiliate, (i) a reportable event as defined in Section 4043 of ERISA and the regulations issued under such Section, with respect to a Plan, excluding, however, such events as to which the PBGC by regulation has waived the requirement of Section 4043(a) of ERISA that it be notified within 30 days of the occurrence of such event, provided that a failure to meet the minimum funding standard of Section 412 of the Code and Section 302 of ERISA shall be a reportable event regardless of the issuance of any such waivers in accordance with Section 412(d) of the Code, (ii) the withdrawal of Borrower or any ERISA Affiliate from a Plan in which it was a “substantial employer” as defined in Section 4001(a)(2) of ERISA or was deemed to be a “substantial employer” under Section 4062(e) of ERISA, (iii) the termination of a Plan, the filing of notice of intent to terminate a Plan or the treatment of a Plan amendment as a termination under Section 4041 of ERISA, (iv) the institution of proceedings to terminate a Plan by the PBGC, (v) the partial or complete withdrawal from a Plan by Borrower or any ERISA Affiliate, (vi) the imposition of a Lien on any property of Borrower or any ERISA Affiliate, pursuant to IRC Section 412 or Section 302 of ERISA, (vi) any event or condition which results in the reorganization or insolvency of a Plan, and (vii) any event or condition which results in the termination of a Plan, or the institution by the PBGC of proceedings to terminate a Plan.

     “ Required Lenders ” means, (a) the Agent in its capacity as a Lender if, and only if, it is the sole Lender under this Agreement, or (b) if there are two or more Lenders under this Agreement, any two (2) or more unaffiliated Lenders holding: (i) more than fifty-one percent (51%) of the Revolving Loan Commitment or (ii) if the Revolving Loan Commitment has been terminated, more than fifty one percent (51%) of the sum of: (x) the aggregate outstanding principal of the Loans, plus (y) the then aggregate undrawn face amount of all the then outstanding Letters of Credit. In each case, at any time any Lender is a Defaulting Lender, all Defaulting Lenders shall be excluded in determining “Required Lenders” and “Required Lenders” shall mean non-Defaulting Lenders otherwise meeting the criteria set forth in this definition.

     “ Revolving Credit Offered Increase Amount ” has the meaning given in Section 2.1(a)(iii)A.

     “ Revolving Credit Re-Allocation Date ” has the meaning given in Section 2.1(a)(iii)D.

     “ Revolving Loan Commitment ” has the meaning given in Section 2.1(a).

     “ Revolving Loan ” has the meaning given in Section 2.1(a).

     “ Revolving Note ” or “ Revolving Notes ” has the meanings given in Section 2.4(a).

     “ Stock ” means any shares of capital stock (whether denominated as common stock or preferred stock), equity interests, beneficial, partnership or membership interests, joint venture interests, participations or other ownership or profit interests in or equivalents (regardless of how designated) of or in a Person, whether voting or non-voting.

     “ Subsidiary” means any Person of which or in which the Borrower and its other Subsidiaries own directly or indirectly 50% or more of: (a) the combined voting power of all classes of Stock having general voting power under ordinary circumstances to elect a majority of the board of directors of such Person, if it is a corporation, (b) the capital interest or profit interest of such Person, if it is a partnership, joint venture or similar entity, or (c) the beneficial interest of such Person, if it is a trust, association or other unincorporated organization.

     “ Termination Date ” means the earliest of (a) March 1, 2011, (b) the date on which the Revolving Loan Commitment is terminated by Borrower pursuant to Section 2.11 hereof, or (c) the date on which the Revolving Loan Commitment is terminated by the Lender pursuant to Section 7.2 hereof.

     “ Total Outstandings ” means as of any date of determination, the sum of (a) the aggregate unpaid principal balance of Advances outstanding on such date and (b) the Letter of Credit Obligations.

     “ Unpaid Drawing ” means any amount by which the Borrower has failed to reimburse the Agent for the full amount of any drawing on a Letter of Credit by 11:30 a.m. on the date on which the Agent in its notice indicated that it would pay such drawing, until reimbursed from the proceeds of an Advance pursuant to Section 2.1(b)(ii).

     “ Unused Amount ” means for any period, the Revolving Loan Commitment reduced by the average Total Outstandings for such period.

     “ Unused Commitment Fee Percentage ” has the meaning given to it in Section 2.5(c).

     “ Working Capital ” means the excess of the Current Assets over the Current Liabilities of the Borrower.

      Section 1.2 Accounting Terms and Calculations . Except as may be expressly provided to the contrary herein, all accounting terms used herein shall be interpreted and all accounting determinations hereunder (including, without limitation, determination of compliance with financial ratios and restrictions in Article 5 and Article 6 hereof) shall be made in accordance with GAAP consistently applied. Any reference to “consolidated”, “consolidating” and/or “combined” financial terms shall be deemed to refer to those financial terms as applied to the Borrower and respective Subsidiaries in accordance with GAAP.

      Section 1.3 Computation of Time Periods . In this Agreement, in the computation of a period of time from a specified date to a later specified date, unless otherwise stated the word “from” means “from and including” and the word “to” or “until” each means “to but excluding.”

      Section 1.4 Other Definitional Terms . The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. References to Sections, Exhibits, schedules and like references are to this Agreement unless otherwise expressly provided.

ARTICLE 2.
AMOUNT AND TERMS OF CREDIT FACILITIES

      Section 2.1 Revolving Loan and Letter of Credit Facilities .

          (a) Revolving Loan Facility . On the terms and subject to conditions hereof, each Lender severally agrees to make revolving credit loans (“ Revolving Loans ”) to the Borrower from time to time from the date hereof to the Termination Date in an aggregate principal amount at any one time outstanding which, when added to such Lender’s Pro Rata Share of the Letter of Credit Obligations then outstanding, does not exceed the amount of such Lender’s Commitment; provided, however , that no Advance will be made in any amount and no Letter of Credit will be issued which, after giving effect thereto, would cause the Total Outstandings to exceed an aggregate maximum for all Lenders of Twenty-Five Million Dollars ($25,000,000) (as the same may be increased or reduced from time to time under the terms of this Agreement, the “ Revolving Loan Commitment ”). During such period, the Borrower may use the Commitments by borrowing, prepaying the Revolving Loans in whole or in part, and reborrowing, all in accordance with the terms and conditions hereof.

               (i)  Advance Options . The Revolving Loan shall be comprised of LIBOR Advances and Floating Rate Advances as shall be specified by the Borrower in a borrowing request pursuant to Section 2.2 except as otherwise provided herein. Once given, a LIBOR Advance request shall be irrevocable and Borrower shall be bound thereby. During the continuance of a Default or Event of Default, the Borrower shall not be permitted to obtain, continue or convert to a LIBOR Advance unless such Default or Event of Default has first been cured. Both LIBOR Advances and Floating Rate Advances may be outstanding under the Revolving Note at the same time. Each LIBOR Advance and Floating Rate Advance shall be in a minimum amount of $500,000 or in an integral multiple of $250,000 above such amount. The Borrower shall not have more than six (6) LIBOR Advances outstanding at any time.

               (ii)  Continuation or Conversion of Advances . The Borrower may elect to continue any outstanding LIBOR Advance from one Interest Period into a subsequent Interest Period to begin on the last day of the earlier Interest Period, or convert any outstanding Advance into any other type of Advance provided for in Section 2.1(a)(i) above (on the last day of an Interest Period only, in the instance of a LIBOR Advance), by giving the Agent notice in writing, or by telephone promptly confirmed in writing, given so as to be received by the Agent not later than 1:00 P.M., Minneapolis time, on the date of the requested continuation or conversion; provided, however , if the continuing or converting Advance shall be a LIBOR Advance, Borrower shall give such notice to the Agent at least three (3) Business Days prior to such continuation or conversion. Each notice of continuation or conversion of an Advance shall specify (A) the effective date of the continuation or conversion date (which shall be a Business Day), (B) the amount and the type or types of Advances following such continuation or conversion, and (C) for continuation as, or conversion into LIBOR Advances, the Interest Periods for such Advances. Absent timely notice of continuation or conversion, each LIBOR Advance shall automatically convert into a Floating Rate Advance on the last day of an applicable Interest Period for LIBOR Advances. No Advance shall be continued as, or converted into, a LIBOR Advance if the shortest Interest Period for such Advance may not transpire prior to the Termination Date of the Note or if a Default or Event of Default shall exist. Once given, a LIBOR Advance request shall be irrevocable and Borrower shall be bound thereby.

               (iii)  Increase to Revolving Loan Commitment .

               A. In the event that the Borrower wishes to increase the Revolving Loan Commitment at any time when no Default or Event of Default has occurred and is continuing (or would result from such increase), it shall notify the Agent in writing of the amount (the “ Revolving Credit Offered Increase Amount ”) of such proposed increase (such notice, a “ Commitment Increase Notice ”) in a minimum amount equal to $5,000,000 or a whole multiple of $5,000,000 in excess thereof. The Borrower may offer the Revolving Credit Offered Increase Amount to (i) any Lender and/or (ii) other banks, financial institutions or other entities with the consent of the Agent, such consent not to be unreasonably withheld (“ Approved New Lender Offerees ”). The Commitment Increase Notice shall (A) specify the Lenders and/or Approved New Lender Offerees that will be requested to provide such Revolving Credit Offered Increase Amount, (B) specify the proposed effective date and (C) be accompanied by a certificate executed by one or more duly authorized officers of the Borrower stating that no Default or Event of Default has occurred and is continuing (or would result from such increase). The Borrower or, if requested by the Borrower, the Agent will notify such Lenders, and/or Approved New Lender Offerees of such offer.

               B. Any Approved New Lender Offerees which the Borrower selects to offer a portion of the increased Revolving Loan Commitment and which elects to become a party to this Agreement and obtain a Commitment in an amount so offered and accepted by it pursuant to Section 2.1(a)(iii)A shall execute a new lender supplement (the “ New Lender Supplement ”) with the Borrower and the Agent, substantially in the form of Exhibit C , whereupon such Approved New Lender Offerees (herein called a “ New Revolving Credit Lender ”) shall become a Lender for all purposes and to the same extent as if originally a party hereto and shall be bound by and entitled to the benefits of this Agreement, provided that the Commitment of any such New Revolving Credit Lender shall be in an amount not less than $5,000,000 except with the prior written consent of Agent.

               C. Any Lender which accepts an offer to it by the Borrower to increase its Commitment pursuant to Section 2.1(a)(iii)A shall, in each case, execute a Commitment Increase Supplement (each a “ Commitment Increase Supplement ”) with the Borrower and the Agent, substantially in the form of Exhibit D , whereupon such Lender shall be bound by and entitled to the benefits of this Agreement with respect to the full amount of its Commitment as so increased. No Lender shall have any obligation, expressed or implied, to offer to increase the amount of its Commitment. Only the consent of each Lender increasing its Commitment shall be required for an increase in the amount of the Commitments pursuant to this Section 2.1(a)(iii). No Lender which elects not to increase the amount of its Commitment may be replaced in respect of its existing Commitment as a result thereof without such Lender’s consent. Subject to the limitations set forth above, the Borrower and the Agent shall have discretion jointly to adjust the allocation of the increased aggregate principal amount of the Commitments among Lenders increasing their Commitments and New Revolving Credit Lenders.

               D. If any Approved New Lender Offeree becomes a New Revolving Credit Lender pursuant to Section 2.1(a)(iii)B or any Lender’s Commitment is increased pursuant to Section 2.1(a)(iii)C, additional Revolving Loans made on or after the effectiveness thereof (the “ Revolving Credit Re-Allocation Date ”) shall be made pro rata based on the Pro Rata Shares in effect on and after such Revolving Credit Re-Allocation Date (except to the extent that any such pro rata borrowings would result in any Lender making an aggregate principal amount of Revolving Loans in excess of its Commitment, in which case such excess amount will be allocated to, and made by, such New Revolving Credit Lenders and/or Lenders with such increased Commitments to the extent of, and pro rata based on, their respective Commitments otherwise available for Revolving Loans), and continuations of LIBOR Advances outstanding on such Revolving Credit Re-Allocation Date shall be effected by repayment of such LIBOR Advances on the last day of the Interest Period applicable thereto and the making of new LIBOR Advances pro rata based on such new Pro Rata Shares. In the event that on any such Revolving Credit Re-Allocation Date there is an unpaid principal amount of Floating Rate Advances, the Borrower shall make prepayments thereof and borrowings of Floating Rate Advances so that, after giving effect thereto, the Floating Rate Advances outstanding are held pro rata based on such new Pro Rata Shares. In the event that on any such Revolving Credit Re-Allocation Date there is an unpaid principal amount of LIBOR Advances, such LIBOR Advances shall remain outstanding with the respective holders thereof until the expiration of their respective Interest Periods (unless the Borrower elects to prepay any thereof in accordance with the applicable provisions of this Agreement), and interest on and repayments of such LIBOR Advances will be paid thereon to the respective Lenders holding such LIBOR Advances pro rata based on the respective principal amounts thereof outstanding.

               E. Notwithstanding anything to the contrary in this Section 2.1(a)(iii), (1) no Lender shall have any obligation to increase its Commitment unless it agrees to do so in its sole discretion and (2) in no event shall any transaction effected pursuant to this Section 2.1(a)(iii) cause the Revolving Loan Commitment to exceed Fifty Million Dollars ($50,000,000).

               F. The Agent shall have received on or prior to the Revolving Credit Re-Allocation Date, for the benefit of the Lenders, (1) certified copies of resolutions of the board of directors of the Borrower authorizing the Borrower to borrow the Revolving Credit Offered Increase Amount and (2) any other documents or instruments as may be requested by the Agent.

               G. Upon the Borrower’s compliance with the foregoing, Agent shall (1) record the information related to such increase in the Register (as defined in Section 10.1(b) hereof) and replace Schedule 1.1A ; and (2) give prompt notice thereof to Borrower and Lenders.

          (b) Letter of Credit Facility.

               (i)  Issuance Mechanics . In addition to Advances made pursuant to Section 2.1(a), the Revolving Loan Commitment may be utilized, upon the request of Borrower, for the issuance of Letters of Credit for the account of Borrower. The Agent may, upon receipt of duly executed Letter of Credit Applications and such other documents, instruments and/or agreements as the Agent may require, issue Letters of Credit on such terms as are satisfactory to the Agent; provided, however , that no Letter of Credit will be issued if, before or after taking such Letter of Credit into account, the Letter of Credit Obligations exceed the lesser of: (A) the Revolving Loan Commitment minus the total Advances outstanding; or (B) Ten Million Dollars ($10,000,000) (the “ Letter of Credit Facility ”). The Letter of Credit Facility is a sublimit of the Revolving Loan Commitment. Immediately upon the issuance by Agent of a Letter of Credit, and without further action on the part of Agent or any of the Lenders, each Lender shall be deemed to have purchased from Agent a participation in such Letter of Credit (or in its obligation under a risk participation agreement with respect thereto) equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit. Each request for a Letter of Credit shall be made by the Borrower in writing, by telefacsimile transmission or electronic conveyance received by the Agent by 1:00 P.M., Minneapolis time, on. a Business Day which is not less than one Business Day preceding the requested date of issuance (which shall also be a Business Day). Each request for a Letter of Credit shall be deemed a representation by the Borrower that on the date of issuance of such Letter of Credit and after giving effect thereto the applicable conditions specified in Article 3 have been and will be satisfied. The Agent may require that such request be made on such letter of credit application and reimbursement agreement form as the Agent may from time to time specify, along with satisfactory evidence of the authority and incumbency of the officers of the Borrower making such request.

               (ii)  Expiration Dates of Letters of Credit . Each Letter of Credit shall expire no later than the earlier of (x) the first anniversary of its date of issuance and (y) the date (the “ Collateralization Date ”) which is fifteen (15) Business Days prior to the Termination Date; provided that any Letter of Credit with a one-year term may provide for the renewal thereof for additional one-year periods and may extend beyond the Collateralization Date provided further that upon the occurrence of the Collateralization Date, the Borrower shall have deposited cash with the Agent in the face amount of such Letter of Credit as additional security therefor. The Agent may elect not to renew any such Letter of Credit and, upon direction by the Required Lenders, shall not renew any such Letter of Credit, at any time during the continuance

of an Event of Default, provided that, in the case of a direction by the Required Lenders, the Agent receives such directions prior to the date notice of non-renewal is required to be given by the Agent and the Agent has had a reasonable period of time to act on such notice.

               (iii)  Reimbursement Obligation . The Borrower agrees to reimburse the Lenders on demand by Agent for each Unpaid Drawing. Whenever any Unpaid Drawing exists, each Lender is authorized (and the Borrower does so authorize the Lenders) to, and may in their sole discretion (but shall not be obligated to), make an Advance to the Borrower in the amount equal to the amount of the Unpaid Drawing, even if the applicable conditions precedent specified in Article 3 shall not have been satisfied. The Borrower further agrees to pay interest on any Unpaid Drawing or any Advance made to pay an Unpaid Drawing at the same rate as is applicable to Floating Rate Advances. If at such time as the Agent makes an Advance pursuant to the provisions of this Section, the applicable conditions precedent specified in Article 3 shall not have been satisfied, or if an Unpaid Drawing remains outstanding at a time when a Default or Event of Default exists, the Borrower shall pay the Agent interest on the funds so advanced or outstanding at the Default Rate applicable to Floating Rate Advances.

               (iv)  Collateral . Notwithstanding anything to the contrary herein or in any Letter of Credit Application of the Borrower, upon the occurrence of an Event of Default or upon the Termination Date, an amount equal to the aggregate amount of Letter of Credit Obligations shall, upon the Agent’s demand, be delivered to the Agent in cash or other collateral of a type satisfactory to the Agent having a value, as determined by the Agent, equal to the aggregate amount of the Letter of Credit Obligations. Any such collateral and/or cash received by the Agent pursuant to this paragraph (d) shall be held by the Agent in a separate account appropriately designated as a collateral account in relation to this Agreement and the Letters of Credit and retained by the Agent as collateral security for the Letter of Credit Obligations. Such amounts shall not be used by the Agent to pay any amounts drawn or paid under or pursuant to any Letter of Credit but may be applied to reimburse the Agent or the Lenders, as applicable, for drawings or payments under or pursuant to Letters of Credit which the Agent or Lenders have paid or, if no such reimbursement is required, to payment of such other obligations as the Agent shall determine. Following payment in full of all Obligations, any amounts remaining in any cash collateral account established pursuant to this paragraph (d) which are not (as determined by the Agent) to be applied to reimburse the Agent and/or the Lenders for amounts actually paid by Agent in respect of a Letter of Credit shall be returned to the Borrower (after deduction of the Agent’s expenses).

               (v)  Obligations Absolute . The obligation of the Borrower to repay the Agent for any amount drawn on any Letter of Credit and to repay the Agent and Lenders for any Advances made to cover Unpaid Drawings shall be absolute, unconditional and irrevocable, shall continue for so long as any Letter of Credit is outstanding notwithstanding any termination of this Agreement, and shall be paid strictly in accordance with the terms of this Agreement, under all circumstances whatsoever, including without limitation the following circumstances:

                    A. Any lack of validity or enforceability of any Letter of Credit;

                    B. The existence of any claim, setoff, defense or other right which the Borrower may have or claim at any time against any beneficiary, transferee or holder of any Letter of Credit (or any Person for whom any such beneficiary, transferee or holder may be acting), the Agent or any other Person, whether in connection with a Letter of Credit, this Agreement, the transactions contemplated hereby, or any unrelated transaction; or

                    C. Any statement or any other document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect whatsoever.

Neither the Agent nor its officers, directors or employees shall be liable or responsible for, and the obligations of the Borrower to the Agent and Lenders shall not be impaired by:

      Section 2.2 Procedure for Advances . Any request by the Borrower for an Advance hereunder shall be in writing, or by telephone promptly confirmed in writing, and must be given so as to be received by the Agent not later than 1:00 P.M. (Minneapolis time) on the requested Advance Date provided, however , if the requested Advance shall be a LIBOR Advance, Borrower shall give such notice to the Agent at least three (3) Business Days prior to such continuation or conversion. Each request for an Advance hereunder shall be irrevocable and shall be deemed a representation by the Borrower that on the requested Advance Date and after giving effect to the requested Advance the applicable conditions specified in Article 3 have been and will be satisfied. Each request for an Advance hereunder shall specify (a) the requested Advance Date, and (b) the amount and type of the Advance. Without in any way limiting the Borrower’s obligation to confirm in writing any telephone request for an Advance hereunder, the Agent and each Lender may rely on any such request which it believes in good faith to be genuine; and the Borrower hereby waives the right to dispute the Agent’s record of the terms of such telephone request. Unless the Agent or any Lender determines that any applicable condition specified in Article 3 has not been satisfied, the Agent and each Lender will make available to the Borrower at the Agent’s principal office in Minneapolis, Minnesota in immediately available funds not later than 3:00 P.M. (Minneapolis time) on the requested Advance Date its Pro Rata Share of the amount of the requested Advance.

      Section 2.3 Payments and Prepayments .

          (a) Payments . Payments and prepayments of principal of, and interest on, the Loans and all fees, expenses and other Obligations under Loan Documents shall be made without setoff or counterclaim in immediately available funds and shall be made in same day funds and delivered to Agent at its main office in Minneapolis, Minnesota, for the benefit of Agent and Lenders, as applicable, not later than 1:00 P.M. (Minneapolis time) on the dates called for under this Agreement and the Loan Documents. Funds received after such time shall be deemed to have been received on the next Business Day. Whenever any payment to be made hereunder or on the Notes shall be stated to be due on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day and such extension of time, in the case of a payment of principal, shall be included in the computation of any interest on such principal payment. Borrower hereby authorizes Lenders to make Revolving Loans, on the basis of their Pro Rata Shares, for the payment of interest, costs, facility fees, Letter of Credit fees, funding losses or indemnification obligations under Section 2.7 and Section 2.8 hereof, and Letter of Credit reimbursement obligations. Prior to an Event of Default, other fees, costs and expenses (including those of attorneys) reimbursable to Agent pursuant to Section 11.2 or elsewhere in any Loan Document may be debited to the Revolving Loan after fifteen (15) days notice to Borrower. After the occurrence of an Event of Default, no notice will be required.

               (i)  Revolving Loan . The unpaid principal of the Revolving Notes, together with all accrued and unpaid interest thereon and all other Obligations shall be due and payable on the Termination Date.

               (ii)  Mandatory Prepayments . The Borrower agrees that the Obligations shall be subject to mandatory prepayment if (A) on any day the Total Outstandings exceeds the Revolving Loan Commitment, and (B) on any day a Lender’s Pro Rata Share of the Total Outstandings exceeds its Commitment. Borrower agrees that on any such day, the Borrower shall make a prepayment to the extent of such excess.

               (iii)  Optional Prepayments . The Borrower may prepay Advances, in whole or in part, at any time, without premium or penalty, but subject to the payment of any funding losses payable by Borrower under Section 2.7 hereof and provided further that with respect to the prepayment of any LIBOR Advance during an Interest Period on two (2) Business Days’ advance written notice. Any such prepayment must be accompanied by accrued and unpaid interest on the amount prepaid. Each partial prepayment shall be in a minimum amount of $500,000 or in an integral multiple of $250,000 above such amount. Amounts paid (unless following an acceleration or upon termination of the Revolving Loan Commitment in whole) or prepaid on Advances under this Section 2.3 may be re-borrowed upon the terms and subject to the conditions and limitations of this Agreement.

               (iv)  Application of Payments . With respect to the prepayments described in Section 2.3(a)(ii) and (iii), such prepayments shall first be applied to the payment of all outstanding fees, costs and expenses payable by Borrower, then such prepayments shall be applied, pro rata, to reduce the outstanding principal balance of the Revolving Loans. Considering each type of Loan being prepaid separately, any such prepayment shall be applied first to Floating Rate Advances of the type required to be prepaid before application to LIBOR

Advances, in each case in a manner which minimizes any resulting funding losses under Section 2.7. During the continuance of an Event of Default, Borrower irrevocably waives the right to direct the application of any and all payments and Borrower hereby irrevocably agrees that each Lender shall have the continuing exclusive right to thereafter apply payments in any manner it deems appropriate.

               (v)  No Deductions . Any and all payments or reimbursements made hereunder or under the Notes shall be made free and clear of and without deduction for any and all taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto of any nature whatsoever imposed by any taxing authority, excluding such taxes to the extent imposed on Agent’s or a Lender’s net income by the jurisdiction in which Agent or such Lender is organized. If Borrower shall be required by law to deduct any such amounts from or in respect of any sum payable hereunder to any Lender or Agent, then the sum payable hereunder shall be increased as may be necessary so that, after making all required deductions, such Lender or Agent receives an amount equal to the sum it would have received had no such deductions been made.

      Section 2.4 Notes.

          (a) Revolving Notes . The Borrower agrees that, upon the request to the Agent by any Lender, the Borrower will promptly execute and deliver to such Lender a revolving promissory note (as such promissory note may be amended, modified or supplemented from time to time, and including any substitutions for, or renewals of, such promissory note, individually, a “ Revolving Note ” and collectively for all Lenders, the “ Revolving Notes ”) of the Borrower evidencing any Revolving Loans of such Lender, substantially in the form of Exhibit A , with appropriate insertions as to date and principal amount. Each Note shall bear interest at an annual rate determined pursuant to Section 2.5.

      Section 2.5 Interest . Borrower shall pay to Agent interest on the outstanding principal balance of each Note at one or more of the rates specified below. Unless the Borrower specifies otherwise, the principal balance of each Advance outstanding under the Revolving Notes shall bear interest at the Floating Rate.

          (a) LIBOR Advances . The unpaid principal amount of each LIBOR Advance shall bear interest prior to maturity at a rate per annum equal to the LIBOR Rate in effect for each Interest Period for such LIBOR Advances plus the applicable Margin pursuant to Section 2.5(c) below.

          (b) Floating Rate Advances . The unpaid principal amount of each Floating Rate Advance shall bear interest prior to maturity at a rate per annum equal to the Floating Rate.

          (c) Margins/Letter of Credit Fee/Unused Commitment Fee Percentage . The “ Margins, ” “ Letter of Credit Fee ” and " Unused Commitment Fee Percentage ” through and including the first adjustment occurring as specified below shall be 1.50% for Floating Rate Advances, LIBOR Advances, and Letters of Credit and 0.250% for the Unused Commitment Fee Percentage. Commencing on the third Business Day after the Borrower delivers financial statements pursuant to Section 5.1, for each fiscal quarter (each a “ Margin/Fee Adjustment

Date ”), the Margins, the Letter of Credit Fee and Unused Commitment Fee Percentage shall be adjusted, on the basis of the ratio of Borrower’s Funded Debt to EBITDA (as calculated at the end of the previous calendar quarter in accordance with Section 5.2(a)), in accordance with the following table, provided however that the Margin accruing on then existing LIBOR Advances shall not be adjusted.

Notwithstanding the foregoing, no reduction in the Margins will be made if a Default or an Event of Default exists at the time that such reduction would otherwise be made. If Borrower fails to deliver its financial statements in accordance with Section 5.1, the Margins and fees due under this Section 2.5(c) shall adjust to the highest ratio set forth in the table above beginning on the date that delivery of such financial statement was due under Section 5.1 below.

          (d) Computation and Payment of Interest . All interest provided for under this Agreement shall be computed on the basis of actual days elapsed and a year of 360 days. The date of funding a Floating Rate Advance and the first day of an Interest Period with respect to a LIBOR Advance shall be included in the calculation of interest. The date of payment of a Floating Rate Advance and the last day of an Interest Period with respect to a LIBOR Advance shall be excluded from the calculation of interest. If a Loan is repaid on the same day that it is made, one (1) days’ interest shall be charged. Interest on all Floating Rate Advances is payable in arrears on the first day of each month and on the maturity of such Loans, whether by acceleration or otherwise. Interest on LIBOR Advances shall be payable on the last day of the applicable Interest Period, unless the Interest Period is greater than three (3) months, in which case interest will be payable on the last day of each three (3) month interval. In addition, interest on LIBOR Advances is due on the maturity of such Loans, whether by acceleration or otherwise.

          (e) Default Rate . Upon the occurrence of any Event of Default, each Advance shall, at the option of the Agent (or, in the case of an Event of Default under Section 7.1(f), (g) or (h), automatically upon the occurrence of such Event of Default), bear interest until paid in full at the rate otherwise applicable thereto plus 2.0% (the “ Default Rate ”).

          (f) Inability to Determine LIBOR . In the event, prior to commencement of any Interest Period relating to a LIBOR Advance or outstanding Floating Rate Advances are based on a LIBOR Base Rate, Agent shall determine or be notified in writing by Required Lenders that adequate and reasonable methods do not exist for ascertaining LIBOR Base Rate, Agent shall promptly provide notice of such determination to Borrower and Lenders (which shall be conclusive and binding on Borrower and Lenders). In such event, (1) any request for a LIBOR Advance or for a conversion to or continuation of a LIBOR Advance shall be automatically withdrawn and shall be deemed a request for a Floating Rate Advance, (2) each LIBOR Advance will automatically, on the last day of the then current Interest Period relating

thereto, become a Floating Rate Advance, (3) all outstanding Floating Rate Advances (including Advances converted under (1) and (2) above, shall automatically become Floating Rate Advances based upon the Prime Rate, and (4) the obligations of Lenders to make LIBOR Advances (or Floating Rate Advances based upon a LIBOR Base Rate) shall be suspended until Agent or Required Lenders determine that the circumstances giving rise to such suspension no longer exist, in which event Agent upon the instructions of Required Lenders, shall so notify Borrower and Lenders.

          (g) Illegality . Notwithstanding any other provisions hereof, if any law, rule, regulation, treaty or directive or interpretation or application thereof shall make it unlawful for any Lender to make, fund or maintain LIBOR Advances, or make Floating Rate Advances based upon the LIBOR Base Rate such Lender shall promptly give notice of such circumstances to Agent, Borrower and the other Lenders. In such an event, (1) the commitment of such Lender to make LIBOR Advances, make Floating Rate Advances based upon the LIBOR Base Rate, or convert Floating Rate Advances to LIBOR Advances shall be immediately suspended and (2) such Lender’s outstanding LIBOR Advances and Floating Rate Advances based upon the LIBOR Base Rate shall be converted automatically to Floating Rate Advances based upon the Prime Rate on the last day of the Interest Period thereof or at such earlier time as may be required by law.

      Section 2.6 Fees and Expenses .

          (a) Unused Commitment Fee . The Borrower agrees to pay to the Lender a Unused Commitment Fee equal to the Unused Amount multiplied by the applicable Unused Commitment Fee Percentage set forth in Section 2.5(c) above, from the date of this Agreement to and including the Termination Date, due and payable quarterly in arrears on the last day of each quarter, commencing March 31, 2009 and on the Termination Date; such fee shall be prorated for any partial period.

          (b) Agent Fees . Borrower shall pay to Agent, for Agent’s own account, such Agent’s fee as may be required in any Agent’s Fee Letter as may be agreed to by Borrower and Agent from time to time.

          (c) Letter of Credit Fee . For each Letter of Credit issued, the Borrower shall pay to the Agent an issuance fee equal to the Agent’s then current rate, payable on the date of issuance of the Letter of Credit. The Borrower shall further pay to the Agent, for the account of the Lenders, a fee in an amount determined by applying a per annum rate equal to the Letter of Credit Fee Percentage set forth in Section 2.5(c) to the original face amount of the Letter of Credit for each month that such Letter of Credit is outstanding, which fee shall be due and payable monthly in arrears on the last day of each month, and on the Termination Date. In addition to the foregoing fees, the Borrower shall pay to the Agent, on demand, all issuance, amendment, drawing and other fees regularly charged by the Agent to its letter of credit customers and all out-of-pocket expenses incurred by the Agent in connection with the issuance, amendment, administration or payment of any Letter of Credit.

          (d) Expenses and Attorneys Fees . Borrower agrees to promptly pay all fees, costs and expenses (including reasonable fees, charges and disbursements of legal counsel for Agent) incurred by Agent in connection with any matters contemplated by or arising out of the Loan Documents, in connection with the examination, review, due diligence investigation, documentation, negotiation, closing and syndication of the transactions contemplated herein and in connection with the continued administration of the Loan Documents including any amendments, modifications, consents and waivers. Borrower agrees to promptly pay all fees, costs and expenses (including reasonable fees, charges and disbursements of legal counsel for Agent and Lenders) incurred by Agent and Lenders in connection with any action to enforce any Loan Document or to collect any payments due from Borrower or any other Loan Party. All fees, costs and expenses for which Borrower is responsible under this Section 2.6(d) shall be deemed part of the Obligations when incurred. Agent agrees to limit the fees of legal counsel to be paid by Borrower in conjunction with the initial preparation of this Agreement and the other Loan Documents at an amount not to exceed $25,000, plus out-of-pocket expenses if, and only if, the transactions contemplated herein close by February 27, 2009. Borrower understands that all costs incurred on or after March 1, 2009 shall not be subject to the foregoing limitation.

      Section 2.7 Funding Losses . The Borrower will indemnify Agent and each Lender upon written request of such party (which request shall set forth the basis for requesting such amounts) against any loss or expense which the Agent or Lender may sustain or incur (including, wit