REVOLVING CREDIT AGREEMENT

Revolving Credit Agreement

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PANERA BREAD CO | PANERA, LLC, | BANK OF AMERICA, N.A.,

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Title: REVOLVING CREDIT AGREEMENT
Governing Law: Georgia Date: 3/11/2004
Industry: Restaurants Sector: Services

REVOLVING CREDIT AGREEMENT, Parties: panera bread co , panera llc , bank of america n.a.

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EXHIBIT 4.1.1

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REVOLVING CREDIT AGREEMENT

DATED AS OF DECEMBER 19, 2003

BY AND BETWEEN

PANERA, LLC,

AS BORROWER,

AND

BANK OF AMERICA, N.A.,

AS LENDER

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TABLE OF CONTENTS

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REVOLVING CREDIT AGREEMENT............................................................................ 1

ARTICLE I. DEFINITIONS................................................................................ 1

ARTICLE II. THE ADVANCES.............................................................................. 13

2.1 Advances............................................................................ 13

2.2 Advances by Borrower................................................................ 16

2.3 Increased Costs; Capital Adequacy................................................... 17

2.4 Liquidation Fee..................................................................... 18

2.5 Basis for Determining LIBOR Rate Inadequate or Unfair............................... 18

2.6 Payments............................................................................ 19

2.7 Setoff; etc......................................................................... 19

2.8 Revolving Credit Commitment Fee..................................................... 19

2.9 Other Fees.......................................................................... 20

2.10 Application of Payments and Collections............................................. 20

2.11 Letters of Credit................................................................... 21

ARTICLE III. CONDITIONS PRECEDENT..................................................................... 23

3.1 Conditions Precedent to Effectiveness............................................... 23

3.2 Conditions Precedent to All Advances, and Issuances of Letters of Credit............ 25

3.3 Conditions Subsequent............................................................... 26

ARTICLE IV. REPRESENTATIONS AND WARRANTIES............................................................ 26

4.1 Organization; etc................................................................... 26

4.2 Due Authorization................................................................... 26

4.3 Subsidiaries........................................................................ 27

4.4 Validity of the Agreement........................................................... 27

4.5 Financial Statements................................................................ 27

4.6 Business............................................................................ 27

4.7 Litigation; etc..................................................................... 27

4.8 Compliance with Law................................................................. 27

4.9 ERISA Compliance.................................................................... 28

4.10 Indebtedness and Liabilities........................................................ 28

4.11 No Investments...................................................................... 28

4.12 Use of Proceeds..................................................................... 28

4.13 Governmental Regulation............................................................. 28

4.14 Margin Stock........................................................................ 29

4.15 Investment Company Act.............................................................. 29

4.16 Accuracy of Information............................................................. 29

4.17 Tax Returns; Audits................................................................. 29

4.18 Environmental and Safety Regulations................................................ 29

4.19 Payment of Wages.................................................................... 30

4.20 Intellectual Property............................................................... 30

4.21 Forecasts........................................................................... 30

4.22 Solvency............................................................................ 30

4.23 No Default.......................................................................... 30

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4.24 No Material Adverse Occurrence...................................................... 31

4.25 Material Contracts.................................................................. 31

ARTICLE V. CERTAIN AFFIRMATIVE COVENANTS.............................................................. 31

5.1 Financial Information; etc.......................................................... 31

5.2 Maintenance of Existence; etc....................................................... 33

5.3 Maintenance of Properties and Material Contracts.................................... 33

5.4 Payment of Taxes; etc............................................................... 33

5.5 Compliance with Laws................................................................ 34

5.6 Books and Records; etc.............................................................. 34

5.7 Insurance........................................................................... 34

5.8 Maintain Business and Fiscal Year End............................................... 35

5.9 ERISA............................................................................... 35

5.10 Changes to GAAP..................................................................... 35

5.11 Use of Proceeds..................................................................... 35

5.12 Payment of Indebtedness; Loans...................................................... 36

5.13 Subsidiary Guaranty................................................................. 36

5.14 Survival of Warranties and Representations.......................................... 36

ARTICLE VI. CERTAIN FINANCIAL COVENANTS AND NEGATIVE COVENANTS........................................ 36

6.1 Fixed Charge Coverage Ratio......................................................... 36

6.2 Maximum Adjusted Total ; Leverage Ratio............................................. 36

6.3 Limitations on Indebtedness......................................................... 36

6.4 Liens............................................................................... 37

6.5 Dividends, Stock Purchase and Distributions......................................... 38

6.6 Sales of Assets..................................................................... 38

6.7 Liquidations, Mergers and Consolidations............................................ 38

6.8 Disposition of Securities of a Subsidiary........................................... 38

6.9 Investments......................................................................... 39

6.10 Transactions with Affiliates........................................................ 39

6.11 Acquisitions........................................................................ 39

6.12 Rate Hedging Obligations............................................................ 39

6.13 Amendment and Waiver................................................................ 39

6.14 Limitation on Guarantees............................................................ 39

6.15 ERISA Liabilities................................................................... 39

6.16 Material Contracts.................................................................. 39

ARTICLE VII. EVENTS OF DEFAULT........................................................................ 40

7.1 Events of Default................................................................... 40

7.2 Action if Event of Default.......................................................... 42

7.3 Remedies............................................................................ 42

ARTICLE VIII. MISCELLANEOUS........................................................................... 43

8.1 Waivers, Amendments; etc............................................................ 43

8.2 Payment Dates....................................................................... 43

8.3 Notices............................................................................. 43

8.4 Costs and Expenses.................................................................. 43

8.5 Indemnification..................................................................... 44

8.6 Severability........................................................................ 45

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8.7 Governing Law....................................................................... 45

8.8 Successors and Assigns.............................................................. 45

8.9 Execution in Counterparts; Facsimile................................................ 46

8.10 Financial Information............................................................... 46

8.11 Entire Agreement.................................................................... 47

8.12 Other Relationships................................................................. 47

8.13 Directly or Indirectly.............................................................. 47

8.14 Arbitration......................................................................... 47

8.15 Consent to Jurisdiction............................................................. 48

8.16 Waiver of Jury Trial................................................................ 49

8.17 Rules of Construction............................................................... 49

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ANNEX I - List of Jurisdictions in which the Borrower is Qualified to Do

Business

ANNEX II - List of Subsidiaries; Jurisdictions of Incorporation and

Qualification to do Business and Stock Ownership

ANNEX III - Indebtedness; Liens

ANNEX IV - Approved Acquisitions

EXHIBIT A - Form of Notice of Borrowing

EXHIBIT B - Form of Revolving Credit Note

EXHIBIT C - Form of Legal Opinion of Counsel to Borrower and their

Subsidiaries

EXHIBIT D - Form of Loan Certificate

EXHIBIT E - Form of Compliance Certificate

EXHIBIT F - Form of Application and Agreement for Standby Letter of Credit

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REVOLVING CREDIT AGREEMENT

This Revolving Credit Agreement dated as of December 19, 2003 by and

between Panera, LLC, a Delaware limited liability company (the "Borrower"), and

Bank of America, N.A., a national banking association (the "Lender).

WHEREAS, the Borrower has requested and the Lender has agreed to

provide, subject to the terms and conditions hereof, certain extensions of

credit to the Borrower.

NOW, THEREFORE, in consideration of the terms and conditions contained

herein, and of any loans or extensions of credit heretofore, now or hereafter

made to or for the benefit of the Borrower by the Lender, the parties hereto

agree as follows:

ARTICLE I.

DEFINITIONS

The following capitalized terms when used in this Agreement shall have

the following meanings:

"Acquisition" means (whether by purchase, exchange, issuance or

contribution of stock, debt or other securities, merger, reorganization, joint

venture or otherwise) any transaction, or any series of related transactions by

which any Borrower and/or its Subsidiaries directly or indirectly (i) acquires

any Person, which Person shall then become consolidated with any Borrower or any

Subsidiary in accordance with GAAP, (ii) acquires all or any substantial amount

of the assets of any Person or division thereof or (iii) acquires (in one

transaction or as the most recent transaction in a series of transactions) fifty

percent (50%) or more (by percentage of voting power or by percentage of equity

interests or both) of the outstanding Voting Stock or other interests of a

corporation, partnership, limited partnership or other entity. For purposes of

this definition, the amount of assets shall be deemed "substantial" if such

assets have a fair market value in excess of $2,500,000.

"Adjusted LIBOR Rate" shall mean a rate per annum determined pursuant

to the following formula:

Adjusted LIBOR Rate = LIBOR Rate

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1 - Reserve Requirement

"Adjusted Total Leverage Ratio" shall mean the ratio of (i) (a) total

Funded Debt of the Borrower for the immediately preceding 12 months, plus (b)

eight (8) multiplied by the Rent Expense for the same period to (ii) EBITDAR.

"Advance" shall have the meaning set forth in Section 2.1(a).

"Affiliate" shall mean and include, with respect to any Person, any

Person which directly or indirectly controls, is controlled by, or is under

common control with such Person and in addition, in the case of the Borrower,

includes each officer, director, joint venturer and partner, and each

stockholder or member deemed to have control pursuant to the next sentence of

this definition, of each of the Borrower. For purposes of this definition, a

Person shall be deemed to

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control another Person if the controlling Person owns or controls, directly or

indirectly, ten percent (10%) or more of the shares of stock, other equity

interests or voting power of the controlled Person or possesses, directly or

indirectly, the power to direct or cause the direction of the management and

policies of the controlled Person, whether through ownership of stock, by

contract or otherwise.

"Agreement" shall mean this Revolving Credit Agreement as originally

executed and as amended, modified or supplemented from time to time.

"Agreement Date" shall mean December 19, 2003.

"Applicable Fee Percentage" shall have the meaning set forth in Section

2.8(b).

"Applicable Margin" shall mean the interest rate margin applicable to

Advances hereunder as determined in accordance with Section 2.1(j).

"Base Rate" shall mean, at any time, a fluctuating rate of interest per

annum equal to the higher of (i) the Prime Rate for such date, and (ii) the

Federal Funds Rate in effect at such time plus one-half of one percent (0.50%).

"Base Rate Loan" shall mean, as of any date, an Advance designated or

maintained as a "Base Rate Loan" pursuant to Section 2.1.

"Board of Directors" shall mean the Board of Directors of the Borrower.

"Borrower" shall mean, Panera, LLC, a Delaware limited liability

company.

"Business Day" shall mean any day, other than a Saturday or Sunday, on

which commercial banks and foreign exchange markets are open for business in New

York, New York and Atlanta, Georgia and, if such day relates to an event, a

transaction or a notice with respect to a LIBOR Base Loan, a day which is also a

day on which dealings in Dollar deposits are carried out in the London interbank

market.

"Capital Lease" shall mean a lease of (or other agreement conveying the

right to use) real and /or personal property, which obligation is, or in

accordance with GAAP (including Statement of Financial Accounting Standards No.

13 of the Financial Accounting Standards Board) is required to be, classified

and accounted for as a capital lease on a balance sheet of such Person.

"Capital Lease Obligations" shall mean, with respect to any Person, any

obligation of such Person to pay rent or other amounts under a Capital Lease and

for purposes of this Agreement the amount of each Capital Lease Obligation shall

be the capitalized amount thereof determined in accordance with GAAP.

"Cash Account" shall have the meaning set forth in Section 2.11.

"Change of Control" shall mean (i) the acquisition of ownership, or the

execution or making of any agreement to acquire ownership, directly or

indirectly, in one or more transactions, through purchase, merger, joint

venture, reorganization or otherwise (including the

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agreement to act in concert without anything more), by any Person or group of

Persons acting in concert, of (A) beneficial ownership or control of securities

representing 50% or more of the voting power of the Voting Stock of the Borrower

or (B) all or any substantial portion of the assets of the Borrower. For

purposes of this definition, the terms "Person" and "group" shall include the

meanings for such terms as used for purposes of Sections 13(d) and 14(d) of the

Securities Exchange Act of 1934, as amended (the "Exchange Act"), whether or not

applicable, and "beneficial ownership" shall include the meaning of "beneficial

owner" as that term is used in Rules 13d-3 and 13d-5 under the Exchange Act,

whether or not applicable, and a Person shall be deemed to have "beneficial

ownership" of all shares that such Person has the right to acquire (whether such

right is exercisable immediately or with the passage of time or the occurrence

of a contingency).

"Code" shall mean the Internal Revenue Code of 1986, as amended from

time to time.

"Commitment or Commitment(s)" shall mean and refer to the Revolving

Loan Commitment.

"Compliance Certificate" shall have the meaning set forth in Section

5.1(c).

"Credit Parties" shall mean, collectively, each of the Borrower and the

Guarantor.

"Default" shall mean any event which, regardless of whether there shall

have occurred any giving of notice or lapse of time, or both, would be necessary

to constitute an Event of Default.

"Default Rate" shall mean a simple interest rate per annum equal to the

higher of (i) the Base Rate plus two percent (2%) and (ii) the Adjusted LIBOR

Rate plus the Applicable Margin with respect to LIBOR Base Loans plus two

percent (2%).

"Dollars" or "$" shall mean the basic unit of the lawful currency of

the United States of America.

"EBITDA" of any Person shall mean, for any period for which the amount

thereof is to be determined, Net Income (or loss) of such Person for such

period, plus (to the extent deducted in determining Net Income and without

duplication to adjustments to net income of such Person (determined in

accordance with GAAP) made in the determination of Net Income) the sum of (i)

Federal, state or local income taxes of such Person during such period, (ii)

Interest Expense of such Person during such period, (iii) depreciation and

amortization of such Person during such period (net of amortization of deferred

rent incentives) and (iv) non-cash charges related to stock incentive plans.

"EBITDAR" shall mean, for any period for which the amount thereof is to

be determined, the sum of (without duplication) (i) the EBITDA of the Borrower

for such period, and (ii) the Rent Expense during such period.

"Effective Date" shall mean the date on which all conditions set forth

in Article III (other than conditions subsequent set forth in Section 3.3, if

any, not yet required to be satisfied) are satisfied.

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"ERISA" shall mean the Employee Retirement Income Security Act of 1974,

as amended, and any successor statute of similar import, together with the

regulations thereunder and under the Code, in each case as in effect from time

to time. References to sections of ERISA shall be construed to also refer to any

successor sections.

"ERISA Affiliate" shall mean any Person, including Affiliates or

Subsidiaries of the Borrower, that is a member of any group of organizations or

a controlled group of trades or businesses, as described in Sections 414(b),

414(c), 414(m) or 414(o) of the Code or Section 4001 of ERISA, of which any

Borrower is a member.

"Event of Default" shall mean any Event of Default described in Article

VII.

"Exchange Act" shall have the meaning set forth in the definition of

Change of Control in Article I.

"Federal Funds Rate" means a fluctuating interest rate per annum equal

for each day to the weighted average of the rates on overnight Federal funds

transactions with members of the Federal Reserve System arranged by Federal

funds brokers, as published for such day (or, if such day is not a Business Day,

for the next preceding Business Day) by the Federal Reserve Bank of New York,

or, if such rate is not so published for any day which is a Business Day, the

average of the quotations for such day on such transactions received by the

Lender from three Federal funds brokers of recognized standing selected by it.

"Fixed Charges" shall mean, for any period for which the amount thereof

is to be determined, the sum of the following (without duplication) (i) Interest

Expense of the Borrower for such period, plus (ii) Rent Expense for such period,

plus (iii) Capital Lease Obligations paid or required to be paid by the Borrower

during such period, plus (iv) all payments of principal made or required to be

made by the Borrower during such period on Indebtedness for borrowed money

(other than Capital Leases), excluding principal amounts paid prior to the

Effective Date with respect to any outstanding credit facility or similar

Indebtedness of the Borrower that was completely and permanently repaid and

retired on or prior to the Effective Date.

"Funded Debt" of any Person shall mean all Indebtedness owed or

Guaranteed by such Person.

"GAAP" shall mean generally accepted accounting principles in the

United States consistently applied.

"Guarantee(s) or Guaranty" shall mean all direct and indirect

guarantees, sales with recourse, endorsements (other than for collection or

deposit in the ordinary course of business) and other obligations (contingent or

otherwise) of any Person to pay, purchase, repurchase or otherwise acquire or

become liable upon or in respect of any Indebtedness of any other Person, and,

without limiting the generality of the foregoing, all obligations (contingent or

otherwise) by any Person to purchase products, supplies or other Property or

services for any Person under agreements requiring payment therefor regardless

of the non-delivery or non-furnishing thereof (except for agreements for the

purchase of commodities used in the Borrower' business entered into in the

ordinary course of such business consistent with past practice), or to make

investments in any other Person, or to maintain the capital, working capital,

solvency or general

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financial conditions of any other Person, or to indemnify any other Person

against and hold him harmless from damages, losses and liabilities, all under

circumstances intended to enable such other Person or Persons to discharge any

Indebtedness or to comply with agreements relating to such Indebtedness or

otherwise to assure or protect creditors against loss in respect of such

Indebtedness. The amount of any Guarantee shall be deemed to be the amount of

the Indebtedness of, or damages, losses or liabilities of, the other Person or

Persons in connection with which the Guarantee is made or to which it is related

unless the obligations under the Guarantee are limited to a maximum determinable

amount, in which case the amount of such Guarantee shall be deemed to be such

maximum determinable amount.

"Guarantor" shall mean the Parent.

"Indebtedness" of any Person shall mean and include, as of any date as

of which the amount thereof is to be determined, and without duplication (i) all

obligations of such Person for borrowed money or which has been incurred in

connection with the acquisition of Property or which is represented or evidenced

by notes, drafts, bonds, debentures or other similar instruments, (ii) all

Guarantees of such Person, (iii) all indebtedness, liabilities and other

obligations secured by any Lien on or with respect to Property of such Person,

whether or not liability has been assumed by such Person for the payment of such

obligations, (iv) all obligations of such Person as an account party in respect

of letters of credit and bankers acceptances, (v) all net obligations of such

Person in respect of Rate Hedging Obligations, (vi) Capital Lease Obligations of

such Person, and (vii) all items which in accordance with GAAP would be included

in determining total liabilities as shown on the balance sheet of such Person.

"Indemnified Liabilities" shall have the meaning set forth in Section

8.5.

"Indemnified Parties" shall have the meaning set forth in Section 8.5.

"Interest Expense" shall mean, for any period for which the amount

thereof is to be determined, the consolidated interest expense of the Borrower,

including all interest on Indebtedness (including imputed interest related to

Capital Leases), all amortization of loan commitment, origination and unused

facility fees and expenses and Rate Hedging Obligations of the Borrower, to the

extent required to be reflected on the income statement of the Borrower in

accordance with GAAP.

"Interest Period" shall mean, with respect to any LIBOR Base Loan, the

period for the computation of interest commencing on the date the relevant

Advance is made and ending on the date which is one (1), two (2), three (3) or

six (6) months thereafter. For purposes of determining an Interest Period, a

month means a period starting on one day in a calendar month and ending on a

numerically corresponding date in the next calendar month. Notwithstanding the

foregoing, however (x) any applicable Interest Period which would otherwise end

on a day which is not a Business Day shall be extended to the next succeeding

Business Day unless, with respect to any LIBOR Base Loan only, such Business Day

falls in another calendar month, in which case such Interest Period shall end on

the next preceding Business Day, (y) any applicable Interest Period, with

respect to LIBOR Base Loans only, which begins on a day for which there is no

numerically corresponding day in the calendar month during which such Interest

Period is

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to end shall (subject to clause (x) above) end on the last day of such calendar

month, and (z) no Interest Period shall extend beyond the Maturity Date, or such

earlier date as would interfere with the Borrower's repayment obligations

hereunder.

"Investment" shall mean, with respect to any Person, any loan, advance

or extension of credit (other than to customers or employees, in their capacity

as customer or employee, in the ordinary course of business) by such Person to,

or any Guarantee or other contingent liability with respect to the capital

stock, Indebtedness or other obligations of, or any contributions to the capital

of, any other Person, or any ownership, purchase or other acquisition by such

Person of any interest in any capital stock, limited partnership interest,

general partnership interest, or other securities of any such other Person,

other than an Acquisition; and "Invest," "Investing" or "Invested" shall mean

the making of an Investment. "Investment" shall also include the maximum

possible total cost of any future commitment or other obligation binding on any

Person to make an Investment or any subsequent Investment (whether or not

subject to contingencies).

"L/C Outstandings" shall mean, at any time, the sum of (i) the stated

amount available to be drawn under all Letters of Credit outstanding and (ii)

the aggregate amount of all drawings in respect of all Letters of Credit

remaining unpaid by the Borrower.

"Lender" shall mean Bank of America, N.A.

"Letters of Credit" shall have the meaning set forth in Section

2.11(a).

"LIBOR Base Loan" shall mean, for any Interest Period, any borrowing

designated, continued or maintained as a "LIBOR Base Loan" pursuant to Section

2.2.

"LIBOR Rate" shall mean for each Interest Period the rate of interest

per annum as determined by the Lender (rounded upward, if necessary, to the

nearest whole multiple of one-sixteenth of one percent (1/16th of 1%)) at which

deposits of Dollars in immediately available and freely transferable funds are

offered at 11:00 A.M. London time two (2) Business Days prior to the

commencement of such Interest Period to the Lender or its agent in the London

interbank market for a term comparable to such Interest Period and in an amount

comparable to the principal amount of the LIBOR Base Loan to be outstanding

during such Interest Period.

"Lien" shall mean, with respect to any interest in Property (whether

real, personal or mixed and whether tangible or intangible) (i) any interest or

right which secures the payment of indebtedness or an obligation owed to, or a

claim by, a Person other than the owner of such Property, whether such interest

is based on common law, statute or contract, and whether or not choate, vested

or perfected, including, without limitation, any such interest or right arising

from a mortgage, charge, pledge, negative pledge or other agreement not to lien

or pledge, assignments, security interest, conditional sale, levy, execution,

seizure, attachment, garnishment, Capital Lease or trust receipt, or arising

from a lease, consignment or bailment given for security purposes, excluding

landlord liens created by statute and excluding liens granted a landlord in an

existing lease, and (ii) any exception to or defect in the title to or ownership

interest in such Property, including, without limitation, reservations, rights

of entry, possibilities of reverter, encroachments, easements, rights of way,

restrictive covenants, leases and licenses. For

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purposes of this Agreement, the Borrower shall be deemed to be the owner of any

Property which it has acquired or holds subject to a conditional sale agreement,

Capital Lease or other arrangement pursuant to which title to the Property has

been retained by or vested in some other Person for security purposes.

"Loan" shall mean, individually or collectively, a LIBOR Base Loan, a

Base Rate Loan and any other loans made by Lender to Borrower pursuant to the

terms hereof.

"Loan Documents" shall mean, collectively, this Agreement, the Notes,

the Guaranty, each Notice of Borrowing, all agreements and documents referenced

in Article III, and all other documents, agreements, opinions and certificates

executed or delivered by or on behalf of the Borrower to the Lender, in

connection with or contemplated by this Agreement or any other document

contemplated hereby.

"Maintenance Capital Expenditures" shall mean the greater of (i) actual

maintenance capital expenditures incurred by Borrower as determined in

accordance with GAAP and recorded on the Borrower's financial statements, or

(ii) an assumed amount per restaurant unit of $15,000.

"Material Adverse Occurrence" shall mean any fact, circumstance,

development or occurrence of any nature whatsoever (including, without

limitation, any adverse determination in any litigation, arbitration,

governmental investigation or proceeding) which taken alone or in combination

with any other fact, circumstance or occurrence or which, with notice or passage

of time (i) materially adversely affects or is reasonably likely to have a

material adverse effect on the business, properties, assets, liabilities,

prospects, operations or condition, financial or otherwise, of the Borrower

taken as a whole, (ii) materially impairs or is reasonably likely to materially

impair the binding nature, validity or enforceability of this Agreement or any

of the other Loan Documents, the ability of any Borrower to perform their

obligations under this Agreement or any of the other Loan Documents or the

rights of the Lender hereunder and thereunder, or (iii) materially adversely

affects or is reasonably likely to have a material adverse effect on the Loans.

"Material Contract" shall mean, as to the Borrower, any supply, lease,

franchise, purchase, service, employment, management, tax, indemnity, option,

shareholder or other agreement, plan or contract which provides for aggregate

payments, performance of services or transfers of funds or other Property to or

from any Person pursuant to such agreement or contract (to which such Person is

a party or by which any such Person or any of its Properties is otherwise bound)

in excess of $2,000,000 during any fiscal year or which is otherwise material to

the Borrower's business.

"Maturity Date" shall mean the earlier of (i) December 19, 2006 and

(ii) such earlier date on which payment in full of all outstanding Obligations

shall be due (whether by acceleration or otherwise).

"Minimum Fixed Charge Coverage Ratio" shall mean the ratio of EBITDAR

less cash taxes paid, less Maintenance Capital Expenditures, less distributions,

less dividends and less advances or loans to third parties, divided by the sum

of Interest Expense plus principal payments plus Rent Expense.

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"Monthly Payment Date" shall mean the first Business Day of each

calendar month, commencing on the first of such dates to occur after the

Effective Date.

"Moody's" shall mean Moody's Investors Service, Inc., or any successor

to the rating agency business thereof.

"Multiemployer Plan" shall mean any multiemployer plan as defined in

Sections 3(37) or 4001(a)(3) of ERISA of, or contributed to by Borrower, or any

ERISA Affiliate.

"Net Income" shall mean, for any period for which the amount thereof is

to be determined, the net income (or net losses) of the Borrower as determined

in accordance with GAAP, but excluding extraordinary gains or losses and related

tax effects thereon.

"Net Proceeds" shall mean, with respect to any sale, lease, transfer or

other disposition of assets or securities, all proceeds of such sale or other

transaction net of (i) direct, reasonable and customary out-of-pocket costs and

expenses of such sale or other transaction paid by the Borrower to a Person

other than Borrower or any Affiliate of Borrower, (ii) Federal, state and local

income taxes, sales taxes, transfer taxes or similar taxes imposed on the

Borrower on account of such sale or other transaction, and (iii) amounts, if

any, paid with respect to Indebtedness secured by any Lien on such assets which

is senior in priority to the Lien of the Lender, if any, on such assets.

"Note(s)" shall mean, individually or collectively, as the case may be,

the Revolving Credit Note, and any other promissory notes accepted by the Lender

in exchange for or in substitution of any such Revolving Credit Notes.

"Notice of Borrowing" shall mean the notice in the form of EXHIBIT A

attached hereto to be delivered to the Lender pursuant to Section 2.1(c).

"Obligations" shall mean (i) all Loans, Advances, L/C Outstandings,

debts, liabilities, payment and performance obligations, covenants and duties of

every kind, nature and description owing by the Borrower to the Lender or any

Affiliate thereof, of any kind or nature, present or future, arising under this

Agreement or any other Loan Document, whether evidenced by any note, guarantee

or other instrument, whether for the payment of money or in kind, whether

arising by reason of any extension of credit, issuing, guaranteeing or

confirming of a letter of credit, guaranty, indemnification, contract, tort,

operation of law or in any other manner, whether direct or indirect (including

those acquired by assignment or purchase), absolute or contingent, liquidated or

unliquidated, due or to become due, now existing or hereafter arising and

however acquired, (ii) all Rate Hedging Obligations owing at any time or from

time to time by the Borrower to the Lender or any Affiliate thereof, and (iii)

the obligation to pay an amount equal to the amount of any and all damages which

the Lender (or its Affiliates in the case of Rate Hedging Obligations), may

suffer by reason of a breach by Borrower, or any other obligor, of any

obligation, covenant or undertaking with respect to this Agreement or any other

Loan Document. The term "Obligations" includes, without limitation, all

principal, interest, fees, charges, expenses, reasonable attorneys' fees, and

any other sum chargeable to the Borrower, whether now existing or hereafter

arising, under this Agreement or any other Loan Document or in connection with

any Rate Hedging Obligation.

<PAGE>

"Operating Lease" shall mean a lease (excluding Capital Leases) of

Property to which the Borrower is a party as lessee having an unexpired term

(including any periods of renewal or extension which may be exercised at the

option of the lessor or lessee) in excess of one year.

"Parent" shall mean Panera Bread Company, a Delaware corporation.

"Parent Guaranty" shall mean that certain Parent Guaranty of even date

herewith executed by the Parent in favor of the Lender with respect to the

Obligations.

"PBGC" shall mean the Pension Benefit Guaranty Corporation and any

entity succeeding to any or all of its functions under ERISA.

"Permitted Investment" shall mean any of the following Investments made

by the Borrower in any Person: (i) obligations, with a maturity of less than

three (3) years from the date of acquisition thereof, issued by or

unconditionally guaranteed by the United States of America or an agency or

instrumentality thereof backed by the full faith and credit of the United States

of America; (ii) direct obligations of any state of the United States, any

subdivision or agency thereof or any municipality therein which are rated by S&P

or Moody's in one of the top three (3) rating classifications and maturing

within three (3) years of the date of acquisition thereof; (iii) certificates of

deposit or banker's acceptances, maturing within three (3) years of the date of

acquisition thereof, issued by commercial banks organized under the laws of the

United States or any state thereof, having capital, surplus and undivided

profits aggregating not less than $100 million and whose unsecured long-term

debt is rated in one of the top two rating classifications by S&P or Moody's;

(iv) commercial paper of any corporation organized under the laws of the United

States or any state thereof, rated in one of the top three (3) rating

classifications by S&P or Moody's and with a maturity of less than 366 days from

the date of acquisition thereof; and (v) Investments existing as of the date of

this Agreement, and disclosed in the financial statements of the Borrower as

contemplated in Section 4.11.

"Permitted Liens" shall have the meaning set forth in Section 6.4.

"Person" shall mean any natural person, corporation, firm, joint

venture, partnership, limited partnership, limited liability company,

association, trust or other entity or organization, whether acting in an

individual, fiduciary or other capacity, or any government or political

subdivision thereof or any agency, department or instrumentality thereof.

"Plan" shall mean each employee benefit plan (as defined in Section

3(3) of ERISA), whether now in existence or hereafter instituted, of, or

contributed to by, the Borrower or any ERISA Affiliate.

"Post Closing Agreement" shall mean that certain Post Closing Agreement

of even date herewith executed by the Borrower and the Parent for the benefit of

the Lender.

"Prime Rate" shall mean the rate announced by the Lender from time to

time as its prime rate, changing as and when such prime rate changes; the Lender

may lend to its customers at rates that are at, above or below the Prime Rate.

<PAGE>

"Property" shall mean any interest in any kind of property or asset,

whether real, personal or mixed, or tangible or intangible, and any right in

respect of any of the foregoing.

"Rate Hedging Obligations" shall mean any and all obligations of a

Person, whether absolute or contingent and howsoever and whensoever created,

arising, evidenced or acquired (including all renewals, extensions and

modifications thereof and substitutions therefor) under (i) any and all

agreements, devices or arrangements designed to protect at least one of the

parties thereto from the fluctuations of interest rates applicable to such

party's assets or liabilities, including but not limited to interest rate swaps,

basis swaps, interest rate floors, collars, caps, options, forward agreements or

other similar rate protection transactions, or any combination of or options

with respect to any of the foregoing, and (ii) any and all cancellations, buy

backs, reversals, terminations, assignments, modifications, supplements and

amendments of any of the foregoing.

"Regulation D," "Regulation T," "Regulation U" and "Regulation X" shall

mean Regulation D, Regulation T, Regulation U and Regulation X, respectively, of

the Board of Governors of the Federal Reserve System as from time to time in

effect and any successor to all or a portion thereof establishing margin

requirements.

"Regulatory Change" shall mean any change after the date hereof in any

(or the adoption after the date hereof of any new):

(i) Federal, state or foreign law applying to a class of

financial institutions to which the Lender or one or more of the

Lenders belongs; or

(ii) regulation, interpretation, directive or request

(whether or not having the force of law) applying to a class of

financial institutions to which the Lender or one or more of the

Lenders belongs of any court, central bank, governmental authority or

comparable agency charged with the interpretation or administration of

any law referred to in clause (i) of this definition or of any fiscal,

monetary or other authority having jurisdiction or authority over the

Lender.

"Rent Expense" shall mean, for any period for which the amount thereof

is to be determined, the sum of all rents (exclusive of property taxes, property

and liability insurance premiums, advertising, maintenance costs and

extraordinary costs and expenses) which are included in calculating Net Income

of the Borrower during such period under Operating Leases in respect of which

the Borrower is obligated as a lessee or user or as a guarantor of the

obligations of a lessee or user.

"Reserve Requirement" shall mean, for any Interest Period applicable to

any LIBOR Base Loan, the sum (expressed as a decimal) of (i) the average maximum

rate at which reserves (including any marginal, supplemental or emergency

reserves) are required to be maintained during such Interest Period under

Regulation D by member banks of the Federal Reserve System against "Eurocurrency

liabilities" and (ii) any other reserves required to be maintained by such

member banks by reason of any Regulatory Change against (x) any category of

liabilities which includes deposits by reference to which the LIBOR Rate is to

be determined or (y) any category of extensions of credit or other assets which

includes a LIBOR Base Loan.

<PAGE>

"Revolving Credit Commitment" shall mean the original principal amount

of up to $10,000,000, as the same may be modified in accordance herewith.

"Revolving Credit Commitment Fee" shall have the meaning set forth in

Section 2.8.

"Revolving Credit Loan" shall mean, individually or collectively, the

Loans made pursuant to Section 2.1.

"Revolving Credit Note" shall mean each of the promissory notes,

substantially in the form of EXHIBIT B attached hereto, made by the Borrower

payable to the order of the Lender to evidence the Advances made by Lender.

"SEC" shall mean the United States Securities and Exchange Commission,

and any successor entity thereto.

"S&P" shall mean Standard & Poor's Ratings Services, a division of the

McGraw Hill Companies, Inc., or any successor to the rating agency business

thereof.

"Subsidiary" of any Person shall mean (i) any corporation of which more

than 50% of the outstanding shares of capital stock of any class or classes

having ordinary voting power for the election of directors (irrespective of

whether or not at the time stock of any class or classes of such corporation

shall have or might have voting power by reason of the happening of any

contingency) is now or hereafter owned directly or indirectly by such Person, by

such Person and one or more of its Subsidiaries, or by one or more of such

Person's other Subsidiaries, (ii) any partnership, association, limited

liability company, joint venture or other entity in which such Person, such

Person and one or more of its Subsidiaries, or one or more of its Subsidiaries,

is either a general partner or has an equity or voting interest of more than 50%

at the time, and (iii) any other entity which is directly or indirectly

controlled or capable of being controlled by such Person or one or more

Subsidiaries of such Person or both.

"Subsidiary Stock" shall have the meaning set forth in Section 6.8.

"Termination Date" shall mean the date which is the earlier of (i) the

Maturity Date or (ii) the date upon which the obligation of the Lender to make

Advances is terminated pursuant to Section 2.1(b).

"Unfunded Obligations" shall mean at any time the obligations of the

Borrower to the Lender in respect of undrawn amounts of Letters of Credit. Each

Unfunded Obligation will be deemed to be in an amount equal to the undrawn

amount of the relevant Letter of Credit.

"Unused Portion" shall mean, as of any date, the aggregate Revolving

Credit Commitment on such date, minus the sum of (i) the average daily

outstanding principal amount of the Advances during the fiscal quarter ended

immediately prior to such date, plus (ii) the aggregate stated amount of the

outstanding Letters of Credit on such date.

"Voting Stock" shall mean stock or similar interests of any class or

classes (however designated), the holders of which are generally and ordinarily,

in the absence of contingencies,

<PAGE>

entitled to vote for the election of the directors (or Persons performing

similar functions) of a corporation or other business entity.

Other terms defined herein shall have the meanings ascribed to them

herein. Each definition of an agreement or instrument in this Article I or

elsewhere in this Agreement shall include such agreement or instrument, together

with all schedules, exhibits, annexes and attachments thereto, all as may be

amended, modified, supplemented, renewed, replaced or restated from time to time

in accordance herewith. Except where the context otherwise requires, definitions

imparting the singular shall include the plural and vice versa. Whenever any

accounting term is used herein which is not otherwise defined, it shall be

interpreted in accordance with GAAP. Except where otherwise specifically

restricted, reference to a party to a Loan Document includes that party and its

successors and assigns. Except where the context otherwise requires, each

reference herein to an Article, Section, Exhibit, Annex or Schedule shall be to

an Article, Section, Exhibit, Annex or Schedule hereto. The headings to the

Articles and Sections are for convenience of reference and shall not affect the

meaning or interpretation of this Agreement. Unless the context clearly

indicates otherwise, the word "including" when used in this Agreement means

"including but not limited to," the word "include" means "include, without

limitation," the words "hereof," "herein," "hereto" and "hereunder" and words of

similar import when used in this Agreement refer to this Agreement as a whole

and not to any particular provision of this Agreement and examples set forth in

this Agreement are for illustration purposes only and shall not be deemed to

limit the provision that the example is illustrating. Any non-monetary Event of

Default, if not cured within an applicable cure period hereunder shall "exist,"

"continue" or be "continuing" until such non-monetary Event of Default has been

waived in writing in accordance with Section 8.1. This Agreement and the Loan

Documents shall not be construed or interpreted against any Person due to such

Person being deemed to have drafted it.

<PAGE>

ARTICLE II.

THE ADVANCES

2.1 Advances.

(a) Revolving Credit Commitment. Subject to the terms and

conditions set forth in this Agreement, Lender agrees to make one or more

advances (each an "Advance") to the Borrower from time to time on any Business

Day during the period from the Agreement Date and ending on the Termination

Date; provided, however, that Lender shall not be required to make any Advance

if, after giving effect to such Advance, (1) the sum of the aggregate

outstanding principal amount of all Advances made by Lender, plus the L/C

Outstandings, would exceed the Revolving Credit Commitment, (2) an Event of

Default exists or is continuing or (3) a Default or Material Adverse Occurrence

exists (provided, however, that if (A) such Default or Material Adverse

Occurrence has not become or given rise to an Event of Default and is completely

cured or remedied, and (B) no other Default or Material Adverse Occurrence then

exists, the obligation of the Lender to make Advances under this Section 2.1(a)

shall resume). Each borrowing under this Section 2.1(a) shall consist of

Advances made on the same day by the Lender. Within the limits set forth above,

the Borrower may borrow, repay and reborrow funds pursuant to this Section

2.1(a).

(b) Termination. The obligation of the Lender to make Advances,

and to issue Letters of Credit shall terminate on the earliest to occur of:

(1) The Maturity Date;

(2) Upon written notice by the Borrower to the Lender at any

time when no amount is outstanding on the Notes, no Letters of Credit

are outstanding hereunder and all drawings under Letters of Credit have

been reimbursed in accordance with Section 2.11(b) hereof;

(3) Immediately and without notice or further action upon the

occurrence of an Event of Default described in clauses (f) or (g) of

Section 7.1; or

(4) Immediately if any Event of Default (other than of the

nature specified in clauses (f) or (g) of Section 7.1) shall have

occurred and be continuing and either: (A) the Lender shall have

demanded payment of the Notes or (B) the Lender shall so elect by

giving written notice to the Borrower for purposes of this clause.

(1) The Borrower may request an Advance by delivering

to the Lender in respect of each requested Advance a written

Notice of Borrowing (which may be transmitted by telecopier)

or by oral notice to the Lender confirmed by a written Notice

of Borrowing (which may be transmitted by telecopier),

indicating thereon the aggregate principal amount of the

Advance requested and the date on which such Advance is

requested to be made (which shall be a Business Day), by not

later than 12:00 noon (New York, New York time) on the third

Business Day preceding the Business Day on which an Advance

<PAGE>

is to be made. Any such Notice of Borrowing given by the

Borrower shall be irrevocable.

(2) Upon receipt of the Notice and upon satisfaction

of the applicable conditions set forth in Article III, the

Lender shall make such Advance available to the Borrower by

transferring the amount thereof in immediately available funds

for credit to an account (other than a payroll account)

maintained by the Borrower at the Lender, or otherwise as

directed by the Borrower.

(3) Advances shall be made in aggregate minimum

amounts of $250,000 and in integral multiples of $50,000

thereafter.

(4) Each request for an Advance shall be deemed a

representation and warranty by the Borrower, binding upon the

Borrower, that all conditions precedent to such Advance under

Article III are satisfied as of the date of such request and

as of the date of such Advance.

(d) Revolving Credit Note. The Advances made by Lender shall be

evidenced by, and be payable in accordance with the terms of, the Revolving

Credit Note made by the Borrower payable to the order of Lender in a principal

amount equal to the Revolving Credit Commitment.

(e) Promise to Pay. The Borrower hereby promises to pay in full to

the Lender the amount of all Obligations, including the principal amount of all

Loans, together with accrued interest, fees and other amounts due thereon, all

in accordance with the terms of this Agreement and the Notes. All Obligations,

including the principal amount of all Loans, together with accrued interest,

fees and other amounts due thereon, shall be due and payable in full on the

Maturity Date.

(f) Interest on Loans. The Borrower agrees to pay interest on the

aggregate outstanding principal amount of the Loans until paid in full as

follows:

(1) with respect to any LIBOR Base Loan, at a rate per annum

equal at all times during the Interest Period relating to such LIBOR

Base Loan to the sum of the Adjusted LIBOR Rate plus the Applicable

Margin; and

(2) with respect to any Base Rate Loan, at a fluctuating rate

per annum equal to the Base Rate plus the Applicable Margin (each such

Loan being a "Base Rate Loan").

(g) Calculation of Interest; Payment of Interest.

(1) Other than calculations of Interest at the Prime Rate

(which shall be computed on the basis of a year of 365/366 days for the

actual number of days elapsed), all calculations of Interest and

Interest at the Default Rate shall be computed on the basis of a 360

day year for the actual number of days elapsed.

(2) Interest on Advances under the Revolving Credit Loan

shall be payable as follows:

<PAGE>

(i) Interest on each Base Rate Advance shall be

payable monthly in arrears on the first day of each month for

the prior month commencing on the first day of the first month

from there date hereof.

(ii) Interest on each LIBOR Base Advance shall be

payable on the last day of the applicable Interest Period and, with respect to

LIBOR Base Advances for which the applicable Interest Period exceeds 3 months,

also on the last day of each fiscal quarter occurring during such Interest

Period.

(iii) Interest at the Default Rate shall be

payable on demand.

(iv) Interest on all Loans then outstanding shall

also be due and payable on the Termination Date.

(h) Interest if No Notice of Selection of Interest Rate Basis.

With respect to any Advance, if the Borrower fails to give the Lender timely

notice of a LIBOR Base Loan, or if for any reason a determination of a LIBOR

Base Loan for any Advance is not timely concluded, the interest rate applicable

to such Advance shall be the Base Rate plus the Applicable Margin.

(i) Interest Upon Default. Immediately upon the occurrence of an

Event of Default hereunder, the outstanding principal balance of the Loans,

together with accrued and unpaid interest and other unpaid sums, shall bear

interest at the Default Rate. Such interest shall be payable on demand and shall

accrue until the earliest of (1) waiver or cure (to the satisfaction of the

Lender required under Section 8.1 to waive or cure) of the applicable Event of

Default, or (2) agreement by the Lender to rescind the charging of interest at

the Default Rate, or (3) payment in full of the Obligations.

(j) Determination of Applicable Margin.

(1) The Applicable Margin in respect of any Base Rate Loan or

LIBOR Base Loan, as applicable, shall be determined as of the last day

of the immediately preceding fiscal quarter by reference to the table

set forth below on the basis of the type of Loan and the Adjusted Total

Leverage Ratio determined by reference to the most recent financial

statements delivered pursuant to Section 5.1(a) or 5.1(b).

<TABLE>

APPLICABLE BASE

APPLICABLE RATE LOAN

ADJUSTED TOTAL LEVERAGE RATIO LIBOR MARGIN MARGIN

------------------------------------------------ ------------ ---------------

Greater than or equal to 2.50:1.00 1.50% 0.0%

Greater than or equal to 2.25:1.00 but less than

2.50:1.00 1.25% 0.00%

Greater than or equal to 2.00:1.00 but less than

2.25:1.00 1.00% 0.0%

Less than 2.00:1.00 0.75% 0.0%

</TABLE>

(2) The Applicable Margin shall be adjusted quarterly, based

on the financial performance of Borrower for the immediately preceding

fiscal quarter. Upon receipt of

<PAGE>

the financial statements delivered pursuant to Section 5.1(a) or

Section 5.1(b), as applicable, the Applicable Margin shall be adjusted,

such adjustment being effective on the tenth Business Day after receipt

of such financial statements and the Compliance Certificate to be

delivered in connection therewith; provided, however, if the Borrower

shall not have timely delivered such financial statements in accordance

with Section 5.1(a) or Section 5.1(b), as applicable, beginning with

the date upon which such financial statements should have been

delivered and continuing until three (3) Business Days after such

financial statements are delivered, the Applicable Margin shall equal

0.00% with respect to Base Rate Loans and 1.50% with respect to LIBOR

Rate Loans.

(k) Prepayment.

(1) The Borrower shall have the right, by giving written

notice to the Lender by not later than 12:00 noon (New York, New York

time) on the second Business Day preceding the date of such prepayment,

to prepay all or any portion of an Advance, without premium or penalty;

provided, however, that any LIBOR Base Loan may be prepaid in whole or

in part only on the last day of the Interest Period applicable thereto;

and provided further, that each partial prepayment shall be in an

aggregate principal amount of not less than $100,000 and shall be

accompanied by accrued interest to the date of prepayment on the amount

prepaid. The Borrower shall reimburse the Lender on demand for any loss

or out of pocket expenses incurred in connection with any prepayment

made, including any costs or expenses described in Section 2.4.

(2) At any time that the sum of the aggregate outstanding

principal balance of the Loans plus the aggregate stated amount of L/C

Outstandings exceeds the Revolving Loan Commitment, the Borrower shall

immediately prepay the outstanding principal amount of the Loans in an

amount equal to such excess.

(l) Maximum Aggregate Commitment; Adjustment of Commitments. The

original principal amount of the Revolving Loan Commitment shall not exceed

$10,000,000. Borrower may elect, subject to the terms and conditions hereof, to

obtain Revolving Credit Loans in the maximum total aggregate amount outstanding

at any time of $10,000,000 (or such lower amount as the maximum Commitment may

be reduced to in accordance with the terms hereof). Subject to Lender's consent,

which consent Lender may withhold in its sole discretion, Borrower may request

increases in the Revolving Loan Commitment in the amount of $5,000,000 per

increase up to a maximum aggregate Commitment amount of $25,000,000.

2.2 Advances by Borrower.

(a) Interest Rate for Advances. The Borrower may obtain and

maintain all or any portion of an Advance that is in a minimum amount of

$250,000 and in an integral multiple of $50,000 thereafter as a LIBOR Base Loan.

In the event that for any reason LIBOR Base Loans are not available, Advances

shall be made or continued as Base Rate Loans.

(b) Lender's Records. The Borrower hereby irrevocably authorizes

the Lender to make, or cause to be made, an appropriate notation on the records

of Lender, reflecting the date and original principal amount of each Advance

made by Lender, the dates for each period when

<PAGE>

such Advance is being maintained, the interest rate for each such period and the

dates of principal and interest payments on such Advance. Lender will, prior to

any transfer of a Note, endorse on the reverse side thereof the outstanding

principal amount of the Advances evidenced thereby. The records of the Lender

shall be prima facie evidence of the status of the Lender's Advances, absent

manifest error. Failure to make any such notation shall not affect the

Borrower's Obligations in respect of such Advances or otherwise.

2.3 Increased Costs; Capital Adequacy.

(a) Increased Costs. If (1) as a result of any Regulatory Change,

any reserve, special deposit or similar requirements relating to any extension

of credit or other assets of or any deposits with or other liabilities of,

Lender which affects the making or maintaining by Lender of any loans (including

the Loans) or letters of credit (including the Letters of Credit) are imposed,

modified or deemed applicable, (2) any other condition affecting this Agreement

or the making or maintaining by Lender of any loans (including the Loans) or

letters of credit (including the Letters of Credit) is imposed on s Lender or

(3) other circumstances arise affecting Lender or the position of Lender in the

relevant market, and Lender in good faith determines that, by reason thereof,

the cost to Lender of making or maintaining any loans (including the Loans) or

letters of credit (including the Letters of Credit) is increased as a result of

such change in circumstances, or any amount receivable hereunder in respect of

any Loan or Letter of Credit is reduced (and Lender shall not have been

compensated for such increase or reduction by an increase in interest or

otherwise by Regulatory Change), then Lender shall promptly notify the Borrower

in writing and the Borrower shall pay upon request such additional amount or

amounts (which shall be specified in such request) as will (in the good faith

determination of such Lender) compensate such Lender for such additional cost or

reduction; provided, however, that the Borrower's liability for additional

amounts computed in accordance with this Section 2.3(a) shall be neither changed

nor waived by any failure to give such notice.

(b) Capital Adequacy. If any Regulatory Change imposes, modifies

or deems applicable any capital adequacy, capital maintenance or similar

requirement (including a request or requirement which affects the manner in

which Lender allocates capital resources to its commitments, including the

Revolving Loan Commitment hereunder) and as a result thereof, the rate of return

on Lender's capital as a consequence of the Commitment hereunder or the making

or maintaining of any Loans or Letters of Credit hereunder is reduced to a level

below that which Lender could reasonably have achieved but for such

circumstances, then and in each such case upon notice from time to time by a

Lender to the Borrower, the Borrower shall pay to Lender such additional amount

or amounts as shall compensate Lender for such reduction in rate of return;

provided, however, that the Borrower's liability for additional amounts computed

in accordance with this Section 2.3(b) shall be neither changed nor waived by

any failure to give such notice.

Loan or Letter of Credit to any tax (including, without limitation, any United

States interest equalization tax or similar tax however named applicable to the

acquisition or holding of debt obligations and any interest or penalties with

respect thereto), duty, charge, stamp tax, fee, deduction or withholding in

respect of this Agreement or any Loan or Letter of Credit, except such taxes as

may be measured by the overall net income of such Lender and imposed by the

jurisdiction, or any

<PAGE>

political subdivision or taxing authority thereof, in which Lender's principal

executive office or its lending branch is located and Lender in good faith

determines that the result thereof is to increase the cost (whether by incurring

a cost or adding to a cost) to Lender of making or maintaining any Loan or

Letter of Credit hereunder or to reduce the amount of principal or interest

received by Lender (without benefit of, or credit for, any prorations,

exemptions, credits or other offsets available under any such laws, treaties,

regulations, guidelines or interpretations thereof), then such Lender shall

promptly notify in writing the Borrower and the Borrower shall pay, upon

request, such additional amount or amounts as will (in the good faith

determination of Lender) compensate Lender for such additional cost or

reduction; provided, however, that the Borrower's liability for additional

amounts computed in accordance with this Section 2.3(c) shall be neither changed

nor waived by any failure to give such notice.

(d) Conclusive and Binding; Survival. With respect to any

additional amount or amounts owing by the Borrower pursuant to this Section 2.3,

a statement of Lender as to any such additional amount or amounts shall, in the

absence of bad faith, be conclusive and binding on the Borrower. In determining

such amount, Lender may use any method of averaging and attribution that it (in

its sole and absolute discretion) shall deem applicable. The obligations of the

Borrower under this Section 2.3 shall survive any termination or expiration of

this Agreement.

2.4 Liquidation Fee. The Borrower understands that in connection

with the request for a LIBOR Base Loan for an Interest Period, Lender may enter

into funding arrangements with third parties on terms and conditions which could

result in substantial losses to Lender if such LIBOR Base Loan is not made or

does not remain outstanding for the entire Interest Period. Therefore, if either

(i) after Borrower requests a LIBOR Base Loan, the LIBOR Base Loan is not made

on the first day of the specified Interest Period for any reason (including, but

not limited to, the failure of the Borrower to comply with one or more of the

conditions precedent to any Advance under this Agreement) other than an

intentional and wrongful failure by Lender to make the LIBOR Base Loan, or (ii)

any LIBOR Base Loan is repaid in whole or in part prior to the last day of its

Interest Period (whether as a result of acceleration, operation of law or

otherwise), the Borrower agrees to indemnify Lender for any loss, cost and

expense incurred by it resulting therefrom, including without limitation any

loss of profit and any loss or cost in liquidating or employing deposits

acquired to fund or maintain the LIBOR Base Loan.

2.5 Basis for Determining LIBOR Rate Inadequate or Unfair. If with

respect to any Advance or any Interest Period:

(i) Lender is advised that deposits in lawful money of

the United States of America (in the applicable amounts) are not being

offered to such Lender in the LIBOR market for the relevant Advance or

Interest Period, or Lender otherwise determines (which determination

shall be binding and conclusive on all parties) that by reason of

circumstances affecting the relevant market or the position of Lender

in such market adequate and reasonable means do not exist for

ascertaining the Adjusted LIBOR Rate;

(ii) Lender determines that the Adjusted LIBOR Rate will

not adequately and fairly reflect the cost to such Lender of

maintaining or funding a LIBOR Base Loan for the relevant Advance or

Interest Period, or that the making or funding of a LIBOR Base

<PAGE>

Loan has become impracticable as a result of an event which in the

opinion of such Lender adversely affects such LIBOR Base Loan; or

(iii) Lender determines that any Regulatory Change makes it

unlawful or impracticable for Lender to make or continue to maintain

any LIBOR Base Loan;

then Lender shall promptly notify the Borrower of such circumstances and then so

long as such circumstances shall continue: (1) the obligation of Lender to make

a LIBOR Base Loan shall be terminated and (2) all LIBOR Base Loans then

outstanding shall automatically be converted into Base Rate Loans.

2.6 Payments. Any other provision of this Agreement to the

contrary notwithstanding, the Borrower shall make each payment of interest on

and principal of the Revolving Credit Notes, and fees and other payments due

under this Agreement (except as otherwise expressly provided herein), in

immediately available funds to the Lender at its office referred to in Section

8.3 hereof not later than 1:00 p.m. (New York, New York time) on the date when

due. The Borrower hereby authorizes and directs the Lender and agrees that on

the Business Day on which any payment of principal, interest and/or fees are

due, the Lender may automatically charge one or more demand deposit accounts of

the Borrower maintained with the Lender or with any other Person pursuant to any

agreement or instructions of the Borrower permitting the Lender to automatically

debit any such account(s) for all or any portion of amounts then due. All

payments by the Borrower under this Agreement shall be made without offset,

counterclaim or other deduction and in such amounts as may be necessary in order

that all such payments shall not be less than the amounts otherwise specified to

be paid under this Agreement and the Notes.

2.7 Setoff; etc. Upon the occurrence and during the continuance of

an Event of Default, Lender is hereby authorized at any time and from time to

time, without notice to Borrower (any such notice being expressly waived by the

Borrower), to set off and apply any and all deposits (general or special, time

or demand, provisional or final) at any time held, and other indebtedness at any

time owing, by Lender to or for the credit or the account of the Borrower,

including specifically any amounts held in any account maintained at Lender,

against any and all amounts which may be owed to the Lender by the Borrower in

connection with this Agreement or any Loan Document. The rights of the Lender

under this Section 2.7 are in addition to other rights and remedies (including,

without limitation, other rights of set-off) which the Lender may have. The

Borrower agrees that any holder of a Note or of any participation in a Note may,

to the fullest extent permitted by law, exercise all its rights of payment

(including set-off) with respect to such participation as fully as if such

holder were the direct creditor of the Borrower in the amount of such

participation. Lender agrees to use reasonable efforts to notify the Borrower of

any exercise of its rights pursuant to this Section 2.7, provided, however, that

failure to provide such notice shall not affect Lender's rights under this

Section 2.7 or the effectiveness of any action taken pursuant hereto.

2.8 Revolving Credit Commitment Fee.

(a) Payment of Fee. The Borrower agrees to pay a commitment fee

(the "Revolving Credit Commitment Fee") for the period (including, without

limitation, any portion thereof when

<PAGE>

the Lenders' obligations to lend shall be suspended by reason of the Borrower'

inability to satisfy the conditions of Article III) commencing on the Agreement

Date and continuing through the Termination Date, computed on the average daily

amount of the Unused Portion during the period for which payment is made at the

rate per annum equal to the Applicable Fee Percentage (as determined in

accordance with Section 2.8(b)). Such Revolving Credit Commitment Fee shall be

payable to the Lender in arrears on the first day of each calendar quarter

occurring after the Agreement Date.

(b) Adjustment of Fee. The applicable fee percentage for the

Revolving Credit Commitment Fee (the "Applicable Fee Percentage") shall be

determined by reference to the table set forth below on the basis of the

Adjusted Leverage Ratio determined by reference to the most recent financial

statements delivered pursuant to Section 5.1(a) or 5.1(b).

<TABLE>

APPLICABLE FEE

ADJUSTED TOTAL LEVERAGE RATIO PERCENTAGE

--------------------------------------- --------------

<S> <C>

Greater than or equal to 2.50:1.00 0.35%

Greater than or equal to 2.25:1.00 but

less than 2.50:1.00 0.30%

Greater than or equal to 2.00:1.00 but

less than 2.25:1.00 0.25%

Less than 2.00:1.00 0.20%

</TABLE>

Upon receipt by the Lender of the financial statements delivered pursuant to

Section 5.1(a) or 5.1(b), as applicable, the Applicable Fee Percentage shall be

adjusted, such adjustment being effective on the first day of the next calendar

quarter commencing after the receipt of such financial statements and the

Compliance Certificate to be delivered in connection therewith; provided,

however, if the Borrower shall not have timely delivered such financial

statements in accordance with Section 5.1(a) or 5.1(b), as applicable, and the

Compliance Certificate to be delivered in connection therewith beginning with

the date upon which such financial statements and Compliance Certificate should

have been delivered and continuing until such financial statements and

Compliance Certificate are delivered, the Applicable Fee Percentage shall equal

0.35%; provided further, however, that if upon delivery of such financial

statements and Compliance Certificate, the Applicable Fee Percentage is adjusted

upwards, the adjustment of the Applicable Fee Percentage shall be retroactive to

the date upon which such financial statements and Compliance Certificate should

have been delivered.

Sections 2.8(a) and 2.8(b) above, Borrower may deposit the sum of $1,000,000

(10% of the Revolving Loan Commitment) with Lender to be held in a non-interest

bearing demand deposit account.

2.9 Other Fees. In addition to the fees required to be paid by the

Borrower pursuant to other provisions hereof, the Borrower agrees to pay a

non-refundable fee to the Lender on the Agreement Date in the amount of

one-quarter of one percent (.25%) multiplied by the aggregate Revolving Loan

Commitment.

2.10 Application of Payments and Collections.

<PAGE>

(a) Order of Application of Payments. Subject to the provisions of

Section 2.10(b) below or any agreement of the Lender to the contrary, all

payments and prepayments and any other amounts received by the Lender from or

for the benefit of the Borrower shall be applied, first to pay all other

Obligations in respect of fees, expenses, reimbursements or indemnities then due

and payable, second to pay interest then due in respect of the Revolving Credit

Loans, and third to pay the principal of the Revolving Credit Loans then due and

payable.

(b) Application of Payments After an Event of Default. After the

occurrence of an Event of Default and while the same is continuing, the Lender

may apply all payments and prepayments in respect of any Obligations hereunder

in any order whatsoever, in Lender's sole discretion.

2.11 Letters of Credit.

(a) Issuance by the Lender. Subject to all of the terms and

conditions hereof (including Section 2.1(a) hereof), at the written request of

the Borrower, the Lender will on or after the Effective Date issue standby

letters of credit in form and substance satisfactory to the Lender ("Letters of

Credit") for the account or benefit of the Borrower expiring on or before the

fifth Business Day preceding the Termination Date; provided, however, the Lender

shall not be required to issue a Letter of Credit if, after giving effect

thereto, (1) the aggregate stated amount of all outstanding Letters of Credit,

plus unreimbursed reimbursement obligations, would exceed $3,000,000, (2) the

sum of the aggregate outstanding principal amount of all Revolving Credit Loans

and the L/C Outstandings would exceed the aggregate amount of the Revolving

Credit Commitment, or (3) any other condition set forth in Section 2.1(a) is not

satisfied. The aggregate stated amount of any and all Letters of Credit shall

count against and reduce the available Revolving Credit Commitment hereunder on

a pro rata basis.

(b) Reimbursement by Borrower. If and to the extent a drawing is

at any time made under a Letter of Credit, the Borrower agrees to pay to the

Lender, for the account of the Lender, immediately and unconditionally upon

demand in lawful money of the United States, an amount equal to each amount

which shall be so drawn. Interest shall be payable on any and all amounts

remaining unpaid by the Borrower under this subsection from the date such

amounts become payable (whether at stated maturity, by acceleration or

otherwise) until paid in full at the Default Rate. The Lender shall have the

right to convert the reimbursement obligation of the Borrower arising out of any

such drawing into an Advance made under this Agreement (the Borrower hereby

irrevocably authorizes the Lender to refinance without notice to the Borrower

the reimbursement obligation of the Borrower arising out of any such drawing

into such an Advance and to take all action on behalf of the Borrower required

pursuant to Section 2.1(d) hereof to request such Advance), and such Advance to

be evidenced by the Revolving Credit Note and for all purposes of this

Agreement, without regard to the conditions precedent to making any such Advance

and any requirement of this Agreement that each Advance under this Agreement be

in a minimum amount. Such Advance shall be at the Base Rate plus the Applicable

Margin. If and to the extent any such Letter of Credit expires or otherwise

terminates in a manner satisfactory to the Lender without having been drawn

upon, the available Revolving Credit Commitment shall to such extent be

reinstated.

<PAGE>

day of each calendar quarter following the Agreement Date, in arrears, to the

Lender, a letter of credit fee, computed at an annual rate equal to the

Applicable Margin with respect to LIBOR Rate Loans in effect from time to time

applied to the aggregate face amount of the Letters of Credit issued for the

account of the Borrower from the date of issuance of each Letter of Credit until

the expiration thereof, and (2) to the Lender directly for its benefit as

issuing bank, all customary fees and other issuance, amendment, document

examination, negotiation and presentment expenses and related charges in

connection with the amendment, presentation of drafts, and the like customarily

charged by the Lender with respect to standby letters of credit, payable at the

time of invoice of such amounts.

(d) Indemnification.

(1) In addition to amounts payable as elsewhere provided in

this Agreement, Borrower hereby agrees to protect, indemnify, defend,

pay and save harmless the Lender, from and against any and all

liabilities, expenses, losses, damages and costs which the Lender may

incur or be subject to as a consequence, direct or indirect, of (A) the

issuance of any Letter of Credit and any drawing thereunder other than,

in the case of the Lender, as a result of its gross negligence or

willful misconduct in violation of the applicable Letter of Credit

agreements, as determined by the final judgment of a court of competent

jurisdiction, in determining whether documents presented under any

Letter of Credit comply with the terms thereof, or (B) the failure of

the Lender to honor a drawing under such Letter of Credit as a result

of any act or omission, whether rightful or wrongful, of any present or

future de jure or de facto governmental authority.

(2) As between the Borrower and the Lender, the Borrower

assumes all risks of the acts and omissions of, or misuse of such

Letter of Credit by, the beneficiary of any Letter of Credit. In

furtherance and not in limitation of the foregoing, subject to the

provisions of the Letter of Credit applications and Letter of Credit

reimbursement agreements executed by the Borrower at the time of

request for any Letter of Credit, the form and substance of which is

attached hereto as Exhibit "F", the Lender shall not be responsible

for: (A) the form, validity, sufficiency, accuracy, genuineness or

legal effect of any document submitted by any party in connection with

the application for and issuance of the Letters of Credit, even if it

should in fact prove to be in any or all respects invalid,

insufficient, inaccurate, fraudulent or forged; (B) the validity or

sufficiency of any instrument transferring or assigning or purporting

to transfer or assign a Letter of Credit or the rights or benefits

thereunder or proceeds thereof, in whole or in part, which may prove to

be invalid or ineffective for any reason; (C) failure of the

beneficiary of a Letter of Credit to comply with conditions required in

order to draw upon such Letter of Credit; (D) errors, omissions,

interruptions or delays in transmission or delivery of any messages, by

mail, cable, telegraph, telex, or other similar form of

teletransmission or otherwise; (E) errors in interpretation of

technical trade terms; (F) any loss or delay in the transmission or

otherwise of any document required in order to make a drawing under any

Letter of Credit or of the proceeds thereof; (G) the misapplication by

the beneficiary of a Letter of Credit of the proceeds of any drawing

under such Letter of Credit; and (H) any consequences arising from

causes beyond the control of the Lender.

<PAGE>

(3) In furtherance and extension and not in limitation of the

specific provisions set forth above, any action taken or omitted by the

Lender under or in connection with Letters of Credit issued on behalf

of the Borrower or any related certificates shall not, in the absence

of gross negligence of the Lender, as determined by the final judgment

of a court of competent jurisdiction, in determining whether documents

presented under any Letter of Credit comply with the terms thereof, put

the Lender, the Lender or any Lender under any resulting liability to

the Borrower, and in no event shall the Borrower be relieved of any of

its obligations, including the Obligations, hereunder or under any

AGREEMENTS / CONTRACTS

CLAUSES

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