Demand for repayment of advances. 1. Parties. The parties to this Agreement are _________ Products Company ("Products") and _________, Inc. ("KMJ"). 2. Purpose. KMJ has reached an agreement in principle with _________ Corporation ("LNS") pursuant to which KMJ or some person or entity designated by KMJ (a "Manager") will manage certain aspects of LNS's business for up to 36 months, during which time KMJ may elect to purchase (or, in certain circumstances, may be required to purchase) all of the common stock of LNS. By a Continuing Unconditional Guaranty dated _________(the "Guarantee Agreement"), Products agreed to guarantee payment of certain indebtedness incurred by LNS in connection with a _________[date] "Loan Agreement" between LNS and _________ Bank of _________, N.A. ("Bank"); specifically, Products agreed to guarantee payment of advances made by Bank to LNS in connection with a $_____ line of credit made available to LNS in order to provide working capital support for LNS's (or its subsidiaries') ongoing operations. As of the date of this Agreement, LNS has obtained advances under the Loan Agreement totaling $_____. KMJ anticipates that it or an agent acting on its behalf will find it desirable to cause LNS to obtain further advances ("Future Advances") under the Loan Agreement in order to fund working capital shortfalls and other financial obligations of LNS or its subsidiaries while under KMJ's or its agent's management. Accordingly, KMJ has asked that Products continue to guarantee Future Advances by Bank to LNS and, pursuant to the terms and subject to the conditions set forth below, Products is willing to do so. 3. Indemnity. If KMJ fails to purchase all of LNS's common stock within approximately 36 months of the effective date of the first definitive agreement between KMJ and LNS describing the principal terms pursuant to which such a transaction might be accomplished, or if Bank at any time demands payment pursuant to the Guarantee Agreement of LNS's indebtedness to Bank, KMJ will indemnify Products, on demand by Products, against such a demand by Bank to the extent of the aggregate amount of the Future Advances together with any accrued but unpaid interest. The terms of this paragraph 3 shall survive termination or expiration of this Agreement. 4. Other Terms. (a). KMJ shall not request any advance under the Loan Agreement for the benefit of LNS or its subsidiaries unless such request is made to Bank in writing signed by a designated representative of LNS or KMJ or the Manager, and by a designated representative of Products. For purposes of this subparagraph (a), Products designates _________ to be its representative. Products may decline to join in a request if, in Products' judgment, either LNS or KMJ has suffered a material, adverse change in financial condition since the date of this Agreement; in such a case, no advance will be requested. (b). KMJ shall manage (or shall cause the Manager to manage) the business of LNS in accordance with the terms of the _________[date] "Management Agreement" between LNS and KMJ. (c). This Agreement shall not affect or modify the terms of any agreement between Products and LNS or its subsidiaries, except that while this Agreement is in effect, Products will waive the requirements of section _________ of the _________[date] Agreement among Products, LNS, and LNS's subsidiaries. KMJ will cause (or direct the Manager to cause) LNS and its subsidiaries to satisfy their undertakings to Products in connection with that Agreement. 5. Financial Representation. KMJ represents and warrants to Products that there has been no material, adverse change in KMJ's financial condition since _________[date]. 6. Expiration. This Agreement shall expire upon KMJ's acquisition of all of LNS' common stock or upon the expiration or termination of any agreement pursuant to which KMJ or a Manager may manage
LNS' business. 7. Effective Date. This Agreement shall be effective as of _________[date]. _________ By _________ Title _________ _________ By _________ Title _________