SENIOR SECURED BRIDGE NOTE PURCHASE AGREEMENT
 
This Senior Secured Bridge Note Purchase Agreement, dated as of July 8, 2005
(the “Agreement”), by and among Axeda Systems, Inc., a Delaware corporation (the
“Company”), Axeda Systems Operating Company, Inc., a Massachusetts corporation
and an indirect wholly owned subsidiary of the Company (the “Guarantor”), and
the persons listed on Schedule 1 hereto (the “Purchasers”).
 
The Company, the Guarantor and the Purchasers hereby agree as follows:
 
1.    The Notes and the Guaranty.
 
(a)    The Company has authorized the issuance and sale, in accordance with the
terms hereof, of the Company’s 7% Senior Secured Bridge Notes in the original
aggregate principal amount of up to $600,000 (individually, a “Note” and
collectively, the “Notes”). Each Note will be substantially in the form set
forth in Exhibit A hereto.
 
(b)    The Company’s obligations under the Notes shall be guarantied by the
Guarantor. The Guarantor shall execute and deliver to the Purchasers the
Guaranty (the “Guaranty”) in substantially the form set forth in Exhibit B
hereto.
 
2.    Purchase and Sale of Notes. At the Closing (as defined below), the Company
shall issue and sell to the Purchasers, and, subject to and in reliance upon the
representations, warranties, terms and conditions contained herein, each
Purchaser, severally and not jointly, shall purchase from the Company, a Note in
up to the aggregate principal amount set forth opposite such Purchaser’s name on
Schedule 1 hereto under the heading “Maximum Principal Amount.” Subject to the
terms and conditions hereof, the Maximum Principal Amount for each Purchaser
shall be payable in separate installments by each Purchaser in the amounts set
forth opposite such Purchaser’s name on Schedule 1 hereto under the headings
“First Installment Amount” and “Subsequent Installment Amount,” respectively
(collectively for each Purchaser, the “Installment Amounts”). The Installment
Amounts shall be payable in accordance with the terms of Sections 3 and 4
hereof.
 
3.    Closing.
 
(a)    The consummation of the purchase and sale of the Notes (the “Closing”)
shall be held at 10:00 a.m. on July 8, 2005 (the “Closing Date”), or such other
date and time as shall be mutually agreed upon. At the Closing, (i) the Company
shall issue the Notes, dated as of the Closing Date, payable to the order of
each Purchaser in the aggregate principal amount set forth opposite such
Purchaser’s name on Schedule 1 hereto under the heading “Maximum Principal
Amount,” and (ii) the Guarantor shall execute and deliver to the Purchasers the
Guaranty. At the Closing, in exchange for the issuance of the Notes and the
Guaranty, each Purchaser shall deliver to the Company, by way of wire transfer
of immediately available United States funds, the amount set forth opposite such
Purchaser’s name on Schedule 1 hereto under the heading “First Installment
Amount” (the “First Installment”).
 

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

Senior Secured Bridge Note Purchase Agreement - Page 2
 
(b)    The obligations of the Purchasers to purchase the Notes and pay the First
Installment Amount at the Closing are subject to the following conditions:
 
(i)  The representations and warranties of the Company set forth in this
Agreement shall be true and correct on and as of the date hereof and on and as
of the Closing Date with the same effect as though such representations and
warranties had been made on and as of such date, and the President of the
Company shall have certified to the Purchasers in writing to such effect;
 
(ii)  The Company shall have performed and complied with all agreements
contained in this Agreement required to be performed or complied with by it
prior to or at the date of such Closing, and the President of the Company shall
have certified to the Purchasers in writing to such effect;
 
(iii)  The Company and the Guarantor shall have duly executed and delivered to
the Purchasers a Security Agreement substantially in the form attached as
Exhibit C (the “Security Agreement”);
 
(iv)  The Guarantor shall have duly executed and delivered to the Purchasers the
Guaranty;
 
(v)  The Purchasers shall have received evidence in form and substance
reasonably satisfactory to them that all filings, recordings and registrations,
including, without limitation, the filing of duly executed financing statements
on form UCC-1 and the requisite filings with the U.S. Patent & Trademark Office,
necessary or desirable to perfect the liens created by the Security Agreement
shall have been completed;
 
(vi)  The Company shall have obtained and delivered to the Purchasers, in form
satisfactory to the Purchasers, all necessary consents of governmental agencies
and third parties (including Laurus Master Fund, Ltd. (“Laurus”)) to permit the
Company to enter into and perform its obligations under this Agreement and the
Security Agreement;
 
(vii)  All corporate and other proceedings to be taken by the Company in
connection with the transactions contemplated hereby and all documents incident
thereto shall be satisfactory in form and substance to the Purchasers, and the
Purchasers shall have received all such counterpart originals or certified or
other copies of such documents as they reasonably may request; and
 
(viii)  The Company and Laurus shall have duly executed and delivered to the
Purchasers a Subordination Agreement substantially in the form attached as
Exhibit D (the “Subordination Agreement”).
 

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

Senior Secured Bridge Note Purchase Agreement - Page 3
 
4.    Subsequent Installments. Each of the Purchasers shall, subject to the
terms and conditions hereof, make one or more additional advances to the Company
in the aggregate amount up to (and not to exceed) the amount set forth opposite
such Purchaser’s name on Schedule 1 hereto under the heading “Subsequent
Installment Amount,” in one or more fundings from time to time from the Closing
Date through July 31, 2005 (each such advance, a “Subsequent Installment” and,
collectively, the “Subsequent Installments”). If the Company desires the
Purchasers to make a Subsequent Installment, it shall deliver a written request
to the Purchasers, which request shall specify the amount of such Subsequent
Installment, the intended use of such Subsequent Installment funds and shall
certify that the none of the events specified in clauses (i) through (iii) in
the subsequent sentence shall have occurred (the “Funding Request Notice”). No
Purchaser shall be obligated to fund any Subsequent Installment if (i) any
representation or warranty by the Company contained herein shall be untrue or
incorrect in any way on the date of such Subsequent Installment, (ii) that
certain letter of intent dated June 29, 2005 between an affiliate of the
Purchasers and the Company (the “Letter of Intent”) shall have been terminated
or the conditions to the payment of the termination fee contemplated by
paragraph 5(c) of the Letter of Intent shall have occurred (the date any
termination fee becomes due being deemed a termination thereof even if no formal
written termination notice has been given), or (iii) any breach or default
(including an Event of Default (defined below)) shall have occurred and be
continuing under this Agreement, any Note, the Guaranty, the Security Agreement,
the Subordination Agreement or the Letter of Intent (collectively, the “Bridge
Loan Documents”). The funding of any Subsequent Installment shall occur within
five business days after the receipt of the applicable Funding Request Notice by
delivery by Purchasers to the Company via wire transfer of immediately available
United States funds, the amount listed in the Funding Request Notice delivered
to such Purchaser. All Installment Amounts and all payments of principal and
interest under each Note (or any portion, installment or drawdown thereon) shall
be recorded by the applicable Purchaser and endorsed on the grid which is part
of such Purchaser’s Note. The entries on the grid which is part of such Note
shall be prima facie evidence of amounts outstanding thereunder. The failure to
make any such endorsement or any error in any such endorsement shall not affect
the obligations of the Company or the Guarantor in respect of the First
Installment or any Subsequent Installment. In no event shall the aggregate
amount of all Subsequent Installments advanced by any Purchaser exceed the
amount set forth opposite such Purchaser’s name on Schedule 1 hereto under the
heading “Subsequent Installment Amount.” On or before the date of any Subsequent
Installment, the Company shall deliver to the Purchasers such documents as may
be requested by them.
 
5.    Terms of the Notes.
 
(a)    Maturity. The aggregate principal amount of the Notes, together with all
accrued interest thereon, shall be due and payable in full (without notice,
demand or presentment) on the earliest to occur of the following (the earliest
of such events, the “Maturity Date”): (i) the date on which the Letter of Intent
or the Definitive Documents (as such term is defined in the Letter of Intent)
for the Proposed Transaction (as such term is defined in the Letter of Intent)
shall have been terminated or the conditions to the payment of the termination
fee contemplated by paragraph 5(c) of the Letter of Intent shall have occurred
(the date any termination fee becomes due being deemed a termination thereof
even if no formal written termination notice has been given) (the payment in
full of the Notes shall be a condition precedent to such termination of the
Letter of Intent); (ii) the date any termination fee becomes due under the
Letter of Intent or the definitive acquisition agreement for the Proposed
Transaction; (iii) the date on which the Company or any of its subsidiaries or
affiliates enters into a letter of intent, written understanding or definitive
agreement relating to an Alternative Transaction (as such term is defined in the
Letter of Intent) or the Company otherwise takes any action adverse to the
Proposed Transaction; (iv) the date on which the Proposed Transaction is
consummated; (v) the occurrence of an Event of Default (as defined below) and
(vi) October 31, 2005.
 

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

Senior Secured Bridge Note Purchase Agreement - Page 4
 
(b)    Interest. The aggregate principal amount of the Notes, from time to time
outstanding, shall bear interest at a rate per annum equal to seven percent
(7%). All accrued interest on the Notes shall be due and payable on the Maturity
Date. All interest shall be computed for the actual number of days elapsed on
the basis of a 360-day year and shall compound annually. From and after the
occurrence of an Event of Default, the unpaid principal balance of the Notes
and, to the extent permitted by law, the overdue interest thereon, shall bear
interest at a rate per annum equal to ten percent (10%).
 
(c)    Payment; Usury.
 
(i)  All payments by the Company under this Agreement shall be made in United
States dollars without set-off or counterclaim and be free and clear and without
any deduction or withholding for any taxes or fees of any nature whatever,
unless the obligation to make such deduction or withholding is imposed by law.
The Company, to the extent permitted by applicable law, waives presentment for
payment, protest and demand, and notice of protest, demand and/or dishonor and
nonpayment of the Notes, notice of any Event of Default, and all other notices
or demands otherwise required by law that the Company may lawfully waive. If any
day on which a payment is due pursuant to the terms of this Note is not a day on
which banks in the Commonwealth of Massachusetts are generally open (a “Business
Day”), such payment shall be due on the next Business Day following, and such
extension of time shall in such case be included in the computation of payment
of interest due.
 
(ii)  For so long as any of the Notes remain outstanding, the Company covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of any stay, extension or usury law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the performance of this
Agreement; and the Company (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law and covenants that it
will not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Purchasers, but will suffer and permit the
execution of every such power as though no such law has been enacted.
 
(iii)  Notwithstanding anything herein or in the Notes which may be to the
contrary, in no event, contingency, or circumstances whatsoever shall the
interest or any amount deemed to be interest payable by the Company hereunder
with respect to the Notes exceed the maximum amount permitted by applicable law
and, to the extent that any payments in excess of such permitted amount are
finally determined to have been received by the Purchasers, such excess shall be
considered payments in respect of the principal of the Notes and, if the
principal of the Notes has been paid in full, shall be refunded to the Company.
 

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

Senior Secured Bridge Note Purchase Agreement - Page 5
 
(d)   Security. The Notes shall be secured by and entitled to the benefits of
the Security Agreement.
 
6.    Use of Proceeds. The Company shall use (and shall cause it subsidiaries
(including the Guarantor) to use) the proceeds from the sale of the Notes solely
to fund expenditures of the Company directly attributable to the operation of
the Business (as defined in the Letter of Intent) in the ordinary course.
 
7.    Priority. The Notes shall be senior in all respects (including the right
of payment) to all other indebtedness of the Company and the Guarantor, now
existing or hereafter incurred. All other indebtedness for borrowed money of the
Company or the Guarantor, now existing or hereafter incurred, shall be unsecured
(other than the Laurus Debt (defined below)) and shall be subordinated to the
Notes pursuant to the Subordination Agreement.
 
8.    No Prepayment. The Notes may not be prepaid by the Company.
 
9.    Representations and Warranties of the Company. The Company hereby
represents and warrants to the Purchasers that as of the Closing Date and the
date of each Subsequent Installment (a “Subsequent Installment Date”):
 
(a)    The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. The Guarantor is a corporation
duly organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts. Each of the Company and the Guarantor is duly
licensed or qualified to transact business as a foreign corporation and is in
good standing in each jurisdiction in which the nature of the business
transacted by it or the character of the properties owned or leased by it
requires such licensing or qualification.
 
(b)    The Bridge Loan Documents have been duly authorized, executed and
delivered by each of the Company and the Guarantor (to the extent a party
thereto) and constitute the legal, valid and binding obligations of the Company
and the Guarantor (to the extent a party thereto), enforceable in accordance
with their respective terms.
 
(c)    Neither the execution and delivery of the Bridge Loan Documents nor the
performance thereof has constituted or resulted in, nor will constitute or
result in, a default or violation in any respect of any law or regulation
applicable to the Company or the Guarantor or any term or provision of the
organizational documents (including charter and by-laws) of the Company or the
Guarantor, or any agreement or instrument by which either the Company or the
Guarantor is bound or to which their properties or assets are subject.
 
(d)    No authorization, consent, approval, license, exemption of, or filing or
registration with, any court or governmental department, commission, board,
bureau, agency or instrumentality, is or will be necessary for, or in connection
with, the offer, issuance, sale, execution or delivery by the Company or the
Guarantor of, or for the performance by the Company and the Guarantor of their
obligations under, the Bridge Loan Documents.
 

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

Senior Secured Bridge Note Purchase Agreement - Page 6
 
(e)    There is no litigation or governmental proceeding or investigation
pending or, to the knowledge of the Company, threatened against the Company or
the Guarantor or affecting any of their properties or assets, nor has there
occurred any event or does there exist any condition on the basis of which any
litigation, proceeding or investigation might properly be instituted, that would
prevent, restrict or impair the transactions contemplated by the Bridge Loan
Documents or the performance by the Company and the Guarantor of their
obligations under the Bridge Loan Documents.
 
(f)    No person has or will have, as a result of the transactions contemplated
by this Bridge Loan Documents, any right, interest or valid claim against or
upon the Company for any commission, fee or other compensation as a finder or
broker because of any act or omission by the Company or any agent of the
Company.
 
(g)    Other than indebtedness for borrowed money of the Company payable to
Laurus pursuant to that certain Securities Purchase Agreement, dated as of
October 4, 2004, between the Company and Laurus (the “Laurus Debt”), there is no
other indebtedness for borrowed money of the Company or the Guarantor.
 
10.   Covenants of the Company. Each of the Company and the Guarantor hereby
covenants and agrees that, as long as any of the Notes are outstanding, it will
comply with and observe the following covenants and provisions, and will cause
each of its direct and indirect subsidiaries (if any) to comply with and observe
such of the following covenants and provisions as are applicable to such
subsidiary, and will not:
 
(a)    (i) Incur any additional indebtedness other than the additional $900,000
of bridge loans referenced in the Letter of Intent or (ii) repay any outstanding
indebtedness for borrowed money other than payments on the Laurus Debt in the
form of equity permitted under Section 3 of the Subordination Agreement;
 
(b)    Create, incur, assume or suffer to exist, or permit any subsidiary to
create, incur, assume or suffer to exist, any mortgage, deed of trust, pledge,
lien, security interest or other charge or encumbrance (including the lien or
retained security title of a conditional vendor) of any nature, upon or with
respect to any of its properties, now owned or hereinafter acquired, or assign
or otherwise convey any right to receive income, except that the foregoing
restrictions shall not apply to liens, security interests or other charges or
encumbrances (i) granted to the Purchasers pursuant to the Notes, (ii) granted
in connection with the incurrence of the Laurus Debt, (iii) for taxes,
assessments or governmental charges or levies on property of the Company or any
subsidiary if the same shall not at the time be delinquent or thereafter can be
paid without penalty, or are being contested in good faith and by appropriate
proceedings or (iv) imposed by law, such as carriers’, warehousemen’s and
mechanics’ liens and other similar liens arising in the ordinary course of
business;
 
(c)    Merge or consolidate with, or sell, assign, lease or otherwise dispose of
or voluntarily part with the control of (whether in one transaction or in a
series of transactions) any portion of its assets associated with the Business
(whether now owned or hereinafter acquired) or sell, assign or otherwise dispose
of (whether in one transaction or in a series of transactions) any of its
accounts receivable associated with the Business (whether now in existence or
hereinafter created), to, any person, or permit any subsidiary to do any of the
foregoing;
 

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

Senior Secured Bridge Note Purchase Agreement - Page 7
 
(d)    Declare or pay any dividends, purchase, redeem, retire, or otherwise
acquire for value any of its capital stock (or rights, options or warrants to
purchase such shares) now or hereafter outstanding, return any capital to its
stockholders as such, or make any distribution of assets to its stockholders as
such, or permit any subsidiary to do any of the foregoing;
 
(e)    Enter or permit any subsidiary to enter into any transaction with any
holder of 5% or more of any class of capital stock of the Company, or any member
of their families or any corporation or other entity in which any one or more of
such stockholders or members of their immediate families directly or indirectly
holds five percent (5%) or more of any class of capital stock except in the
ordinary course of business and on terms not less favorable to the Company or
the subsidiary than it would obtain in a transaction between unrelated parties;
or
 
(f)    Amend or modify any of the terms of any of the agreements or instruments
relating to any indebtedness for money borrowed; provided, however, that the
terms of the agreements and instruments relating to the Laurus Debt may be
amended and modified solely in accordance with Section 6(c) of the Subordination
Agreement.
 
11.   Event of Default. If, while any part of the principal of or interest on
the Notes remains unpaid, any one of the following “Events of Default” shall
occur:
 
(a)    the failure by the Company to pay the principal of or interest and
expenses on the Notes when such payment is due;
 
(b)    the Company’s breach of its obligations under the Letter of Intent or any
of the Definitive Documents;
 
(c)    the Company shall (i) have a receiver, trustee or liquidator appointed
for it or for all or a substantial part of its assets; (ii) from this date
forward, admit in writing to its inability to pay its debts as they mature;
(iii) make a general assignment for the benefit of creditors; (iv) be
adjudicated bankrupt or insolvent; (v) file a voluntary petition in bankruptcy
or a petition or an answer seeking reorganization or an arrangement with
creditors to take advantage of any insolvency law; (vi) file any answer
admitting the material allegations of a petition filed against it in any
bankruptcy, reorganization or insolvency proceeding or fail to dismiss such
petition within sixty (60) days after the filing thereof; or (vii) take any
action for the purpose of effecting any of the foregoing;
 
(d)    a payment default by the Company with respect to indebtedness that
results in the acceleration of such indebtedness;
 
(e)    any representation or warranty made by the Company in any of the Bridge
Loan Documents or in any certificate, instrument or written statement
contemplated by or made or delivered pursuant to or in connection with the
Security Agreement, shall prove to have been incorrect when made in any material
respect;
 

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

Senior Secured Bridge Note Purchase Agreement - Page 8
 
(f)    except as set forth in Section 11(a), the failure by the Company to
observe and perform any material covenant, condition and agreement under this
Agreement or the Bridge Loan Documents which failure is not cured within fifteen
(15) days after written notice from any Purchaser or discovery by the Company;
or
 
(g)   an order, judgment or decree shall be entered by any court of competent
jurisdiction, approving a petition seeking reorganization or liquidation of the
Company, or appointing a receiver, trustee or liquidator of the Company of all
or a substantial part of its assets, which such order, judgment or decree has
not been effectively stayed within fifteen (15) days after entry;
 
then and in every such event, any Purchaser may, without notice to the Company,
declare the Notes to be forthwith due and payable, whereupon the Notes shall
forthwith become due and payable without presentment, demand, protest or further
notice of any kind, all of which are expressly waived by the Company; provided,
however, that upon the happening of any event under subsections (c) or (g) of
this Section 11, then the Notes shall, without the taking of any action by the
Purchasers, immediately become due and payable.
 
12.   Amendments, Waivers, Etc. Any provision in this Agreement and the Notes to
the contrary notwithstanding, changes in or additions to this Agreement or the
Notes may be made, and compliance with any covenant or provision herein or
therein set forth may be omitted or waived, if the Company shall obtain consent
thereto in writing from the holder or holders of at least a majority in
principal amount of all Notes then outstanding.
 
13.   Choice of Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Massachusetts, without giving
effect to the principles of conflicts of law thereof.
 
14.   Expenses. Any expense incurred by the Purchasers (including, without
limitation, reasonable attorneys’ fees and disbursements) in connection with the
exercise of any right or remedy upon the occurrence of an Event of Default, or
the enforcement of any rights under any of the Bridge Loan Documents, including
costs of collection and reasonable attorneys’ fees and expenses, shall be paid
by the Company within five days of receiving written notice thereof from a
Purchaser.
 
15.   Notices. All notices, requests, demands and other communications provided
for hereunder shall be in writing (including telecopy communication) and
telecopied or delivered:
 
If to a Purchaser, at the address set forth in the signature pages hereto or at
such other address as to which such Purchaser may inform the other parties in
writing in compliance with the terms of this Section 15, with a copy to Goodwin
Procter LLP, Exchange Place, 53 State Street, Boston, MA 02109, Attn: Mark H.
Burnett, Fax. No.: (617) 523-1231.

If to the Company or the Guarantor, at 21 Oxford Road, Mansfield, Massachusetts
02048, Fax No. (508) 337-9201or at such other address as shall be designated by
the Company in a written notice to the other parties complying as to delivery
with the terms of this Section 15, with a copy to Arent Fox PLLC, 1675 Broadway,
New York, NY 10019-5820, Attn: Steven D. Dreyer, Fax No. (212) 484-3990.
 

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

Senior Secured Bridge Note Purchase Agreement - Page 9
 
All such notices, requests, demands and other communications shall be in writing
and shall be deemed to have been given (i) on the date of delivery, if
personally delivered or telecopied to the party to whom notice is to be given,
(ii) upon confirmed receipt after being deposited with a nationally recognized
overnight delivery service for next business day delivery or (iii) on the third
Business Day after mailing, if mailed to the party to whom notice is to be
given, by certified mail, return receipt requested, postage prepaid, and
addressed to the addressee at the address of the addressee set forth herein, or
to the most recent address, specified by written notice, given to the sender
pursuant to this paragraph.
 
16.   Waiver of Jury Trial. THE COMPANY HEREBY WAIVES ITS RIGHT TO A JURY TRIAL
WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION
WITH THIS AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF
SUCH RIGHTS AND OBLIGATIONS. EXCEPT AS PROHIBITED BY LAW, THE COMPANY HEREBY
WAIVES ANY RIGHT WHICH IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION
REFERRED TO IN THE PRECEDING SENTENCE ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL
DAMAGES. THE COMPANY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF
THE PURCHASERS HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE PURCHASERS
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND
(B) ACKNOWLEDGES THAT THE PURCHASERS HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED
HEREIN.
 
17.   Prior Agreements; Survivability. This Agreement, together with the other
Bridge Loan Documents, constitute the entire agreement between the parties and
supercedes any other prior understandings or agreements concerning the subject
matter hereof. All representations and warranties made in this Agreement and the
Bridge Loan Documents or any other instrument or document delivered in
connection herewith or therewith, shall survive the execution and delivery
hereof or thereof.
 
18.   Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and permitted
assigns. This Agreement, and the rights and obligations of each Purchaser
hereunder, may be assigned by such Purchaser to any person or entity to which
the Notes are transferred by such Purchaser, and such transferee shall be deemed
a “Purchaser” for purposes of this Agreement; provided that the transferee
provides written notice of such assignment to the Company. The Company may not
assign its rights under this Agreement.
 
19.   Counterparts. This Agreement may be executed in any number of counterparts
and by different parties hereto in separate counterparts, with the same effect
as if all parties had signed the same document. All such counterparts shall be
deemed an original, shall be construed together and shall constitute one and the
same instrument. This Agreement shall become effective when each party hereto
shall have received a counterpart, or facsimile of a counterpart, of this
Agreement, signed by the other parties hereto.
 

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

Senior Secured Bridge Note Purchase Agreement - Page 10
 
20.   No Waiver; Cumulative Remedies. No failure or delay on the part of any of
the Purchasers, or any other holder of the Notes in exercising any right, power
or remedy hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy
hereunder. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
 
21.   Severability. The invalidity or unenforceability of any provision hereof
shall in no way affect the validity or enforceability of any other provision.
 
22.   Further Assurances. From and after the date of this Agreement, upon the
request of a Purchaser, the Company and the Guarantor each shall execute and
deliver such instruments, documents and other writings as may be necessary or
desirable to confirm and carry out and to effectuate fully the intent and
purposes of this Agreement and the other Bridge Loan Documents.
 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
 

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

Senior Secured Bridge Note Purchase Agreement - Signature Page
 

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first above written.
 

        COMPANY:       AXEDA SYSTEMS, INC.  
   
   
    By:   /s/ Karen Kupferberg  

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

Name: Karen Kupferberg   Title: Chief Financial Officer

 

        GUARANTOR:       AXEDA SYSTEMS OPERATING COMPANY, INC.  
   
   
    By:   /s/ Karen Kupferberg  

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

Name: Karen Kupferberg
  Title: Chief Financial Officer

        PURCHASERS:      
JMI EQUITY FUND V, L.P.
By: JMI Associates V, L.L.C.
its General Partner
 
   
   
    By:   /s/ Bradford D. Woloson  

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

Bradford D. Woloson  
Managing Member

 
Address:    1119 St. Paul Street
Baltimore, MD 21202

       
JMI EQUITY FUND V (AI), L.P.
By: JMI Associates V, L.L.C.
its General Partner
 
   
   
    By:   /s/ Bradford D. Woloson  

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

Bradford D. Woloson  
Managing Member
 
Address:   1119 St. Paul Street
Baltimore, MD 21202

 

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

Senior Secured Bridge Note Purchase Agreement - Schedule 1
 

Schedule 1

 
Name of Purchaser
 
Maximum Principal Amount
 
First Installment Amount
 
Subsequent
Installment Amount
 
JMI Equity Fund V, L.P 
 
$
567,151
 
$
236,313
 
$
330,838
 
JMI Equity Fund V (AI), L.P 
 
$
32,849
 
$
13,687
 
$
19,162
                       
Total:
 
$
600,000
 
$
250,000
 
$
350,000
 

 

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

EXHIBIT A

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR APPLICABLE
STATE SECURITIES LAWS. THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS
NOTE UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.

7% SENIOR SECURED BRIDGE NOTE

[$______]
July __, 2005 

         

FOR VALUE RECEIVED, Axeda Systems, Inc., a Delaware corporation, with its
principal executive offices located at 21 Oxford Road, Mansfield, Massachusetts
02048 (“Company”), hereby promises to pay to the order of [___________]
(“Holder”), at [______________] or at such other place as may be designated from
time to time in writing by Holder, up to a maximum principal amount of
_______ Dollars ($____) or, if less, the aggregate unpaid principal amount of
the loans advanced by the Holder pursuant to the terms of the Senior Secured
Bridge Note Purchase Agreement, dated as of July 8, 2005, among the Company,
Axeda Systems Operating Company, Inc., a Massachusetts corporation and an
indirect wholly owned subsidiary of the Company (the “Guarantor”), and the
purchasers named therein (as may be amended, restated or modified from time to
time, the “Agreement”), on the dates and terms set forth in the Agreement,
together with interest thereon on the dates and at the rates set forth in the
Agreement. All payments received by Holder hereunder will be applied first to
costs of collection, if any, then to interest and the balance to principal. All
principal and interest outstanding on this Note shall be payable in lawful money
of the United States of America.

This 7% Senior Secured Bridge Note is one of a duly authorized series of 7%
Senior Secured Bridge Notes (each, a “Note,” and collectively, the “Notes”) with
an original aggregate principal amount of $600,000 issued pursuant to, and
entitled to the benefits of, the Agreement, which Agreement sets forth certain
terms and conditions of, and certain rights, limitations, duties and obligations
relating to, the Notes. In the event any term of this Note conflicts with the
terms of the Agreement, the terms of the Agreement shall govern. Capitalized
terms used herein but not otherwise defined herein have the meanings given to
them in the Agreement. This Note is entitled to the benefits of the Guaranty,
the Security Agreement and the Subordination Agreement.

The Notes will be senior in all respects (including the right of payment) to all
other indebtedness of the Company, now existing or hereafter incurred.

The Holder is authorized to endorse on the schedules annexed hereto and made a
part hereof the date and amount of the First Installment and each Subsequent
Installment made pursuant to the Agreement and the date and amount of each
payment or prepayment (if permitted) of principal or interest thereon. Each such
endorsement shall constitute prima facie evidence of the accuracy of the
information endorsed. The failure to make any such endorsement or any error in
any such endorsement shall not affect the obligations of the Company in respect
of the First Installment or any Subsequent Installment.

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

7% Senior Secured Bridge Note - Page 2
 
If this Note is not paid in accordance with its terms, Company shall pay to
Holder, in addition to principal and accrued interest thereon, all costs of
collection of the principal and accrued interest, including, but not limited to,
reasonable attorneys’ fees, court costs and other costs for the enforcement of
payment of this Note.

This Note is delivered in and shall be enforceable in accordance with the laws
of the Commonwealth of Massachusetts, without giving effect to the principles of
conflicts of laws thereof, and shall be construed in accordance therewith, and
shall have the effect of a sealed instrument.

The Company hereby expressly waives presentment, demand, and protest, notice of
demand, dishonor and nonpayment of this Note, and all other notices or demands
of any kind in connection with the delivery, acceptance, performance, default or
enforcement hereof, and hereby consents to any delays, extensions of time,
renewals, waivers or modifications that may be granted or consented to by the
holder hereof with respect to the time of payment or any other provision hereof
or of the Agreement.

In the event any one or more of the provisions of this Note shall for any reason
be held to be invalid, illegal or unenforceable, in whole or in part or in any
respect, or in the event that any one or more of the provisions of this Note
operate or would prospectively operate to invalidate this Note, then and in any
such event, such provision(s) only shall be deemed null and void and shall not
affect any other provision of this Note and the remaining provisions of this
Note shall remain operative and in full force and effect and in no way shall be
affected, prejudiced, or disturbed thereby. This Note is assignable pursuant to
the terms of the Agreement.

IN WITNESS WHEREOF, Company has caused this Note to be executed and delivered as
of the date first above written.

AXEDA SYSTEMS, INC.

By:__________________________
Name:
Title:
 

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

Date
Installment
Amount
Amount of
Principal
Paid
Amount of
Interest
Paid
Outstanding
Principal
Balance
Notation
Made By
                                                           

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

Exhibit B

GUARANTY

 

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

Exhibit C

SECURITY AGREEMENT
 
 

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

Exhibit D

SUBORDINATION AGREEMENT
 

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