**Exhibit 10(t)**

**LOAN AND SECURITY AGREEMENT**

**THIS LOAN AND SECURITY AGREEMENT** (this“**Agreement**”) dated as of the Effective Date between **SILICON VALLEY BANK**, a California corporation and with a loan production office located at One Newton Executive Park, Suite 200, 2221 Washington Street, Newton,Massachusetts 02462 (“**Bank**”), and **INTERNATIONAL ELECTRONICS, INC.**, a Massachusetts corporation (“**Borrower**”), provides the terms on which Bank shall lend to Borrower and Borrower shall repay Bank. The partiesagree as follows: 

**1 ACCOUNTING AND OTHER TERMS**

Accounting terms not defined in this Agreement shall be construed following GAAP. Calculations and determinations must be made following GAAP. Capitalized terms not otherwise defined in this Agreement shall have themeanings set forth in Section 13. All other terms contained in this Agreement, unless otherwise indicated, shall have the meaning provided by the Code to the extent such terms are defined therein. 

**2 LOAN AND TERMS OF PAYMENT**

**2.1 Promise to Pay**. Borrower hereby unconditionally promises to pay Bank the outstanding principal amount of all Credit Extensions and accrued and unpaid interest thereon as and when due in accordance with this Agreement. 

**2.1.1 Revolving Advances.**

(a)Availability. Subject to the terms and conditions of this Agreement and to deduction of Reserves, Bank will make Advances to Borrower up to the Availability Amount. Amounts borrowed under the Revolving Line may be repaid, and prior to theRevolving Line Maturity Date, reborrowed, subject to the applicable terms and conditions precedent herein. 

(b) Streamline Period.Borrower may, at its option, elect not to have any Advances outstanding during specified periods of time (each, a “**Streamline Period**”). At least 10 days prior to requesting that a Streamline Period be put into effect, Borrower shallgive Bank written notice thereof, specifying the date the Streamline Period is to begin. On or prior to the Business Day immediately preceding the commencement of the Streamline Period, Borrower will pay to Bank, by wire transfer, an amountsufficient to repay in full all outstanding Advances, all accrued interest thereon, and all other outstanding monetary Obligations. A Streamline Period may not be put into effect if (i) there are outstanding Obligations in connection with CashManagement Services in excess of $50,000, or (ii) there are any issued (even if undrawn) Letters of Credit. During a Streamline Period, Borrower will not be permitted to incur Obligations in connection with Cash Management Services (as definedbelow) in an amount more than $50,000 in the aggregate at any time outstanding, and no Letters of Credit will be issued. During a Streamline Period, Borrower may not request any Advances, and Bank shall have no obligation to make any Advances. Toterminate a Streamline Period, Borrower shall provide Bank at least 30 days prior written notice thereof together with such information relating to the Eligible Accounts and other Collateral as Bank may specify. 

(c) Termination; Repayment. The Revolving Line terminates on the Revolving Line Maturity Date, when the principal amount of all Advances, theunpaid interest thereon, and all other Obligations relating to the Revolving Line shall be immediately due and payable. 

**2.1.2 Lettersof Credit Sublimit.**

(a) As part of the Revolving Line and subject to deduction of Reserves, Bank shall issue or have issued Letters ofCredit for Borrower’s account. The face amount of outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit and any Letter of Credit Reserve) may not exceed $500,000 inclusive of Credit Extensions relating to Sections2.1.3 and 2.1.4. Such aggregate amounts utilized hereunder shall at all times reduce the amount otherwise available for Advances under the Revolving Line. If, on the Revolving Line Maturity Date, there are any outstanding Letters of Credit, then onsuch date Borrower shall provide to Bank cash collateral in an amount equal to 105% of the face amount of all such Letters of Credit plus all interest, fees, and costs due or to 

become due in connection therewith (as estimated by Bank in its good faith business judgment), to secure all of the Obligations relating to said Letters ofCredit. All Letters of Credit shall be in form and substance acceptable to Bank in its sole discretion and shall be subject to the terms and conditions of Bank’s standard Application and Letter of Credit Agreement (the “**Letter of CreditApplication**”). Borrower agrees to execute any further documentation in connection with the Letters of Credit as Bank may reasonably request. Borrower further agrees to be bound by the regulations and interpretations of the issuer of anyLetters of Credit guarantied by Bank and opened for Borrower’s account or by Bank’s interpretations of any Letter of Credit issued by Bank for Borrower’s account, and Borrower understands and agrees that Bank shall not be liable forany error, negligence, or mistake, whether of omission or commission, in following Borrower’s instructions or those contained in the Letters of Credit or any modifications, amendments, or supplements thereto. 

(b) The obligation of Borrower to immediately reimburse Bank for drawings made under Letters of Credit shall be absolute, unconditional, and irrevocable,and shall be performed strictly in accordance with the terms of this Agreement, such Letters of Credit, and the Letter of Credit Application. 

(c) Borrower may request that Bank issue a Letter of Credit payable in a Foreign Currency. If a demand for payment is made under any such Letter of Credit, Bank shall treat such demand as an Advance to Borrower of the equivalent of theamount thereof (plus fees and charges in connection therewith such as wire, cable, SWIFT or similar charges) in Dollars at the then-prevailing rate of exchange in San Francisco, California, for sales of the Foreign Currency for transfer to thecountry issuing such Foreign Currency. 

(d) To guard against fluctuations in currency exchange rates, upon the issuance of any Letter ofCredit payable in a Foreign Currency, Bank shall create a reserve (the “**Letter of Credit Reserve**”) under the Revolving Line in an amount equal to ten percent (10%) of the face amount of such Letter of Credit. The amount of theLetter of Credit Reserve may be adjusted by Bank from time to time to account for fluctuations in the exchange rate. The availability of funds under the Revolving Line shall be reduced by the amount of such Letter of Credit Reserve for as long assuch Letter of Credit remains outstanding. 

**2.1.3 Foreign Exchange Sublimit**. As part of the Revolving Line and subject to deductionof Reserves, Borrower may enter into foreign exchange contracts with Bank under which Borrower commits to purchase from or sell to Bank a specific amount of Foreign Currency (each, a “**FX Forward Contract**”) on a specified date (the“**Settlement Date**”). FX Forward Contracts shall have a Settlement Date of at least one (1) FX Business Day after the contract date and shall be subject to a reserve of ten percent (10%) of each outstanding FX ForwardContract in a maximum aggregate amount equal to $50,000 (the “**FX Reserve**”) inclusive of Credit Extensions relating to Sections 2.1.2 and 2.1.4. The aggregate amount of FX Forward Contracts at any one time may not exceed ten(10) times the amount of the FX Reserve. The Obligations of Borrower relating to this section may not exceed $500,000 inclusive of Credit Extensions relating to Sections 2.1.2 and 2.1.4. 

**2.1.4 Cash Management Services Sublimit**. Borrower may use up to $500,000 (the “**Cash Management Services Sublimit**”) inclusive ofCredit Extensions relating to Sections 2.1.2 and 2.1.3 of the Revolving Line for Bank’s cash management services which may include merchant services, direct deposit of payroll, business credit card, and check cashing services identified inBank’s various cash management services agreements (collectively, the “**Cash Management Services**”). Any amounts Bank pays on behalf of Borrower or any amounts that are not paid by Borrower for any Cash Management Services willbe treated as Advances under the Revolving Line and will accrue interest at the interest rate applicable to Advances. 

**2.1.5 Term Loan.**

(a) Availability. Bank shall make one (1) term loan available to Borrower in an amount up to the Term Loan Amount on theEffective Date subject to the satisfaction of the terms and conditions of this Agreement. 

(b) Repayment. Borrower shall repay theTerm Loan in (i) monthly principal installments of $8,333.33, plus (ii) monthly payments of accrued interest (the “**Term Loan Payment**”). Each Term Loan Payment shall be payable on the last day of each month beginning onApril 30, 2006 and continuing on the last day of the month thereafter. Borrower’s final Term Loan Payment, due on the Term Loan Maturity Date, shall include all outstanding principal and accrued and unpaid interest under the Term Loan.

 

-2- 

(c) Interest. The Term Loan shall accrue interest at a floating per annum rate equal to theaggregate of the Bank’s Prime Rate and two and one-half percent (2.50%). 

**2.2 Overadvances**. If at any time or for any reasonthe total of all outstanding Advances and all other monetary Obligations exceeds the Availability Amount (an “**Overadvance**”), Borrower shall immediately pay the amount of the excess to Bank, without notice or demand. Without limitingBorrower’s obligation to repay to Bank the amount of any Overadvance, Borrower agrees to pay Bank interest on the outstanding amount of any Overadvance, on demand, at the Default Rate. 

**2.3 Payment of Interest on the Credit Extensions.**

(a) Interest Rate; Advances. Subject to Section 2.3(b), the principal amount outstanding under the Revolving Line shall accrue interest at a floating per annum rate equal to the aggregate of thePrime Rate plus two percentage points (2%), which interest shall be payable monthly. 

(b) Default Rate. Immediately upon theoccurrence and during the continuance of an Event of Default, Obligations shall bear interest at a rate per annum which is three percentage points above the rate effective immediately before the Event of Default (the “**DefaultRate**”). Payment or acceptance of the increased interest rate provided in this Section 2.3(b) is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit anyrights or remedies of Bank. 

(c) Adjustment to Interest Rate. Changes to the interest rate of any Credit Extension based on changesto the Prime Rate shall be effective on the effective date of any change to the Prime Rate and to the extent of any such change. 

(d)360-Day Year. Interest shall be computed on the basis of a 360-day year for the actual number of days elapsed. 

(e) Debit ofAccounts. Bank may debit any of Borrower’s deposit accounts, including the Designated Deposit Account, for principal and interest payments or any other amounts Borrower owes Bank when due. These debits shall not constitute a set-off.

(f) Minimum Monthly Interest. In the event the aggregate amount of interest earned by Bank in any month (exclusive of anycollateral monitoring fees, unused line fees, or any other fees and charges hereunder) is less than $4,000.00 (the “**Minimum Monthly Interest**”), Borrower shall pay Bank an amount, payable on the last day of such month, in an amountequal to the (i) Minimum Monthly Interest minus (ii) the aggregate amount of all interest earned by Bank (exclusive of any collateral monitoring fees, unused line fees, or any other fees and charges hereunder) in such month. 

(g) Payment; Interest Computation; Float Charge. Interest is payable monthly on the last calendar day of each month. In computing interest on theObligations, all Payments received after 12:00 p.m. Pacific time on any day shall be deemed received on the next Business Day. In addition, Bank shall be entitled to charge Borrower a “float” charge in an amount equal to three(3) Business Days interest, at the interest rate applicable to the Advances, on all Payments received by Bank. Said float charge is not included in interest for purposes of computing Minimum Monthly Interest (if any) under this Agreement. Thefloat charge for each month shall be payable on the last day of the month. Bank shall not, however, be required to credit Borrower’s account for the amount of any item of payment which is unsatisfactory to Bank in its good faith businessjudgment, and Bank may charge Borrower’s Designated Deposit Account for the amount of any item of payment which is returned to Bank unpaid. 

**2.4 Fees**. Borrower shall pay to Bank: 

(a) Commitment Fee. A fully earned, non-refundable commitment fee of$13,500.00, on the Effective Date; 

(b) Letter of Credit Fee. Bank’s customary fees and expenses for the issuance or renewal ofLetters of Credit, upon the issuance or renewal of such Letter of Credit by Bank; 

(c) Termination Fee. Subject to the terms ofSection 4.1, a termination fee; 

 

-3- 

(d) Collateral Monitoring Fee. A monthly collateral monitoring fee of $500.00, payable in arrearson the last day of each month (prorated for any partial month) at the beginning and upon termination of this Agreement; and 

(f) BankExpenses. All Bank Expenses (including reasonable attorneys’ fees and expenses for documentation and negotiation of this Agreement) incurred through and after the Effective Date, when due. 

**3 CONDITIONS OF LOANS**

**3.1Conditions Precedent to Initial Credit Extension**. Bank’s obligation to make the initial Credit Extension is subject to the condition precedent that Bank shall have received, in form and substance satisfactory to Bank, such documents, andcompletion of such other matters, as Bank may reasonably deem necessary or appropriate, including, without limitation: 

(a) Borrower shallhave delivered duly executed original signatures to the Loan Documents to which it is a party; 

(b) Borrower shall have delivered dulyexecuted original signatures to the Securities Account Control Agreement; 

(c) Borrower shall have delivered its Operating Documents and agood standing certificate of Borrower certified by the Secretary of State of the Commonwealth of Massachusetts as of a date no earlier than thirty (30) days prior to the Effective Date; 

(d) Borrower shall have delivered duly executed original signatures to the completed Borrowing Resolutions for Borrower; 

(e) Borrower shall have delivered a payoff letter from Eastern Bank; 

(f) Borrower shall have delivered evidence that (i) the Liens securing Indebtedness owed by Borrower to Eastern Bank will be terminated and (ii) the documents and/or filings evidencing the perfection of suchLiens, including without limitation any financing statements and/or control agreements, have or will, concurrently with the initial Credit Extension, be terminated. 

(g) Bank shall have received certified copies, dated as of a recent date, of financing statement searches, as Bank shall request, accompanied by written evidence (including any UCC termination statements) that theLiens indicated in any such financing statements either constitute Permitted Liens or have been or, in connection with the initial Credit Extension, will be terminated or released; 

(h) Borrower shall have delivered the Perfection Certificate executed by Borrower; 

(i) Borrower shall have delivered a landlord’s consent executed by                     in favor of Bank; 

(j) Borrower shall have delivered a legal opinion of Borrower’s counsel dated as of the Effective Date together with the duly executed original signatures thereto; 

(k) Borrower shall have delivered evidence satisfactory to Bank that the insurance policies required by Section 6.7 hereof are in full force andeffect, together with appropriate evidence showing loss payable and/or additional insured clauses or endorsements in favor of Bank; and 

(l) Borrower shall have paid the fees and Bank Expenses then due as specified in Section 2.4 hereof. 

**3.2 ConditionsPrecedent to all Credit Extensions**. Bank’s obligations to make each Credit Extension, including the initial Credit Extension, is subject to the following: 

(a) timely receipt of an executed Transaction Report; 

 

-4- 

(b) the representations and warranties in Section 5 shall be true in all material respects on thedate of the Transaction Report and on the Funding Date of each Credit Extension; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materialityin the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date, and no Default or Event of Default shall haveoccurred and be continuing or result from the Credit Extension. Each Credit Extension is Borrower’s representation and warranty on that date that the representations and warranties in Section 5 remain true in all material respects;provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations andwarranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date; and 

(c)in Bank’s sole discretion, there has not been a Material Adverse Change. 

**3.3 Covenant to Deliver.**

Borrower agrees to deliver to Bank each item required to be delivered to Bank under this Agreement as a condition to any Credit Extension. Borrowerexpressly agrees that the extension of a Credit Extension prior to the receipt by Bank of any such item shall not constitute a waiver by Bank of Borrower’s obligation to deliver such item, and any such extension in the absence of a requireditem shall be in Bank’s sole discretion. 

**3.4 Procedures for Borrowing**. Subject to the prior satisfaction of all otherapplicable conditions to the making of an Advance set forth in this Agreement, to obtain an Advance (other than Advances under Sections 2.1.2 or 2.1.4), Borrower shall notify Bank (which notice shall be irrevocable) by electronic mail, facsimile, ortelephone by 12:00 p.m. Pacific time on the Funding Date of the Advance. Together with such notification, Borrower must promptly deliver to Bank by electronic mail or facsimile a completed Transaction Report executed by a Responsible Officer or hisor her designee. Bank shall credit Advances to the Designated Deposit Account. Bank may make Advances under this Agreement based on instructions from a Responsible Officer or his or her designee or without instructions if the Advances are necessaryto meet Obligations which have become due. Bank may rely on any telephone notice given by a person whom Bank believes is a Responsible Officer or designee. 

**4 CREATION OF SECURITY INTEREST**

**4.1 Grant of Security Interest**. Borrower hereby grantsBank, to secure the payment and performance in full of all of the Obligations, a continuing security interest in, and pledges to Bank, the Collateral, wherever located, whether now owned or hereafter acquired or arising, and all proceeds andproducts thereof. Borrower represents, warrants, and covenants that the security interest granted herein is and shall at all times continue to be a first priority perfected security interest in the Collateral (subject only to Permitted Liens thatmay have superior priority to Bank’s Lien under this Agreement). If Borrower shall acquire a commercial tort claim, Borrower shall promptly notify Bank in a writing signed by Borrower of the general details thereof and grant to Bank in suchwriting a security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance reasonably satisfactory to Bank. 

This Agreement may be terminated prior to the Revolving Line Maturity Date by Borrower, effective three (3) Business Days after written notice oftermination is given to Bank or if Bank’s obligation to fund Credit Extensions terminates pursuant to the terms of Section 2.1.1(c). Notwithstanding any such termination, Bank’s lien and security interest in the Collateral shallcontinue until Borrower fully satisfies its Obligations. If such termination is at Borrower’s election or at Bank’s election due to the occurrence and continuance of an Event of Default, Borrower shall pay to Bank, in addition to thepayment of any other expenses or fees then-owing, a termination fee in an amount equal to one percent (1%) of the Revolving Line provided that no termination fee shall be charged if the credit facility hereunder is replaced with a new facilityfrom another division of Silicon Valley Bank. Upon payment in full of the Obligations and at such time as Bank’s obligation to make Credit Extensions has terminated, Bank shall release its liens and security interests in the Collateral and allrights therein shall revert to Borrower. 

**4.2 Authorization to File Financing Statements**. Borrower hereby authorizes Bank to filefinancing statements, without notice to Borrower, with all appropriate jurisdictions to perfect or protect Bank’s interest or rights hereunder, including a notice that any disposition of the Collateral, by either Borrower or any other Person,shall be deemed to violate the rights of Bank under the Code. 

 

-5- 

**5 REPRESENTATIONS AND WARRANTIES**

Borrower represents and warrants as follows: 

**5.1 Due Organization and Authorization**. Borrower and each of its Subsidiaries, if any, are duly existing and in good standing as Registered Organizations in their respective jurisdictions of formation and are qualified and licensedto do business and are in good standing in any jurisdiction in which the conduct of their business or their ownership of property requires that they be qualified except where the failure to do so could not reasonably be expected to have a materialadverse effect on Borrower’s business. In connection with this Agreement, Borrower has delivered to Bank a completed certificate substantially in the form attached hereto as Exhibit C signed by Borrower, entitled “PerfectionCertificate”. Borrower represents and warrants to Bank that (a) Borrower’s exact legal name is that indicated on the Perfection Certificate and on the signature page hereof; (b) Borrower is an organization of the type and isorganized in the jurisdiction set forth in the Perfection Certificate; (c) the Perfection Certificate accurately sets forth Borrower’s organizational identification number or accurately states that Borrower has none; (d) thePerfection Certificate accurately sets forth Borrower’s place of business, or, if more than one, its chief executive office as well as Borrower’s mailing address (if different than its chief executive office); (e) Borrower (and eachof its predecessors) has not, in the past five (5) years, changed its jurisdiction of formation, organizational structure or type, or any organizational number assigned by its jurisdiction; and (f) all other information set forth on thePerfection Certificate pertaining to Borrower and each of its Subsidiaries is accurate and complete. If Borrower is not now a Registered Organization but later becomes one, Borrower shall promptly notify Bank of such occurrence and provide Bank withBorrower’s organizational identification number. 

The execution, delivery and performance of the Loan Documents have been dulyauthorized, and do not conflict with Borrower’s organizational documents, nor constitute an event of default under any material agreement by which Borrower is bound. Borrower is not in default under any agreement to which it is a party or bywhich it is bound in which the default could have a material adverse effect on Borrower’s business. 

**5.2 Collateral**. Borrowerhas good title to, has rights in, and the power to transfer each item of Collateral upon which it purports to grant a Lien hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the depositaccounts with Bank. 

The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise providedin the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate. In the event that Borrower, after the date hereof, intends to store or otherwise deliverany portion of the Collateral to a bailee, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. 

All Inventory (net of reserves for obsolescence) is in all material respects of good and marketable quality, free from material defects. 

Borrower is the sole owner of its intellectual property, except for non-exclusive licenses granted to its customers in the ordinary course of business.Each patent is valid and enforceable and no part of the intellectual property has been judged invalid or unenforceable, in whole or in part, and to the best of Borrower’s knowledge, no claim has been made that any part of the IntellectualProperty violates the rights of any third party. 

Borrower is not a party to, nor is bound by, any license or other agreement with respectto which Borrower is the licensee that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property. Borrower shall provide written notice to Bank withinten (10) days of entering or becoming bound by any such license or agreement which is reasonably likely to have a material impact on Borrower’s business or financial condition (other than over-the-counter software that is commerciallyavailable to the public). Borrower shall take such steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for all such licenses or contract rights to be deemed “Collateral” and forBank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement (such consent or authorization may include a licensor’s agreement to a contingent assignment of thelicense to Bank if Bank determines that is necessary in its good faith judgment), whether now existing or entered into in the future. 

 

-6- 

**5.3 Accounts Receivable.**

(a) For each Account with respect to which Advances are requested, on the date each Advance is requested and made, such Account shall meet the MinimumEligibility Requirements set forth in Section 13 below. 

(b) All statements made and all unpaid balances appearing in all invoices,instruments and other documents evidencing the Accounts are and shall be true and correct and all such invoices, instruments and other documents, and all of Borrower’s Books are genuine and in all respects what they purport to be. All sales andother transactions underlying or giving rise to each Account shall comply in all material respects with all applicable laws and governmental rules and regulations. Borrower has no knowledge of any actual or imminent Insolvency Proceeding of anyAccount Debtor whose accounts are an Eligible Account in any Borrowing Base Certificate. To the best of Borrower’s knowledge, all signatures and endorsements on all documents, instruments, and agreements relating to all Accounts are genuine,and all such documents, instruments and agreements are legally enforceable in accordance with their terms. 

**5.4 Litigation**. Thereare no actions or proceedings pending or, to the knowledge of the Responsible Officers, threatened in writing by or against Borrower or any of its Subsidiaries involving more than $50,000. 

**5.5 No Material Deviation in Financial Statements**. All consolidated financial statements for Borrower and any of its Subsidiaries delivered toBank fairly present in all material respects Borrower’s consolidated financial condition and Borrower’s consolidated results of operations. There has not been any material deterioration in Borrower’s consolidated financial conditionsince the date of the most recent financial statements submitted to Bank. 

**5.6 Solvency**. The fair salable value of Borrower’sassets (including goodwill minus disposition costs) exceeds the fair value of its liabilities; Borrower is not left with unreasonably small capital after the transactions in this Agreement; and Borrower is able to pay its debts (including tradedebts) as they mature. 

**5.7 Regulatory Compliance**. Borrower is not an “investment company” or a company“controlled” by an “investment company” under the Investment Company Act. Borrower is not engaged as one of its important activities in extending credit for margin stock (under Regulations T and U of the Federal Reserve Board ofGovernors). Borrower has complied in all material respects with the Federal Fair Labor Standards Act. Borrower has not violated any laws, ordinances or rules, the violation of which could reasonably be expected to have a material adverse effect onits business. None of Borrower’s or any of its Subsidiaries’ properties or assets has been used by Borrower or any Subsidiary or, to the best of Borrower’s knowledge, by previous Persons, in disposing, producing, storing, treating, ortransporting any hazardous substance other than legally. Borrower and each of its Subsidiaries have obtained all consents, approvals and authorizations of, made all declarations or filings with, and given all notices to, all government authoritiesthat are necessary to continue its business as currently conducted. 

**5.8 Subsidiaries; Investments**. Borrower does not own any stock,partnership interest or other equity securities except for Permitted Investments. 

**5.9 Tax Returns and Payments; PensionContributions**. Borrower has timely filed all required tax returns and reports, and Borrower and its Subsidiaries, if any, have timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower.Borrower may defer payment of any contested taxes, provided that Borrower (a) in good faith contests its obligation to pay the taxes by appropriate proceedings promptly and diligently instituted and conducted, (b) notifies Bank in writingof the commencement of, and any material development in, the proceedings, (c) posts bonds or takes any other steps required to prevent the governmental authority levying such contested taxes from obtaining a Lien upon any of the Collateral thatis other than a “Permitted Lien”. Borrower is unaware of any claims or adjustments proposed for any of Borrower’s prior tax years which could result in additional taxes becoming due and payable by Borrower. Borrower has paid allamounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with their terms, and Borrower has not withdrawn from participation in, and has not permitted partial or complete termination of, orpermitted the occurrence of any other event with respect to, any such plan which could reasonably be expected to result in any liability of Borrower, including any liability to the Pension Benefit Guaranty Corporation or its successors or any othergovernmental agency. 

**5.10 Use of Proceeds**. Borrower shall use the proceeds of the Credit Extensions solely as working capital andto fund its general business requirements and not for personal, family, household or agricultural purposes. 

 

-7- 

**5.11 Full Disclosure**. No written representation, warranty or other statement of Borrower in anycertificate or written statement given to Bank, as of the date such representations, warranties, or other statements were made, taken together with all such written certificates and written statements given to Bank, contains any untrue statement ofa material fact or omits to state a material fact necessary to make the statements contained in the certificates or statements not misleading (it being recognized by Bank that the projections and forecasts provided by Borrower in good faith andbased upon reasonable assumptions are not viewed as facts and that actual results during the period or periods covered by such projections and forecasts may differ from the projected or forecasted results). 

**6 AFFIRMATIVE COVENANTS**

Borrower shall do all of the following: 

**6.1 Government Compliance**. Maintain its and all its Subsidiaries’ legalexistence and good standing in their respective jurisdictions of formation and maintain qualification in each jurisdiction in which the failure to so qualify would reasonably be expected to have a material adverse effect on Borrower’s businessor operations. Borrower shall comply, and have each Subsidiary comply, with all laws, ordinances and regulations to which it is subject, the noncompliance with which could have a material adverse effect on Borrower’s business. 

**6.2 Financial Statements, Reports, Certificates.**

(a) Borrower shall provide Bank with the following: 

(i) weekly, and upon each request for a CreditExtension, a Transaction Report; 

(ii) within fifteen (15) days after the end of each month, (A) monthly accounts receivableagings, aged by invoice date, (B) monthly accounts payable agings, aged by invoice date, and outstanding or held check registers, if any, and (C) monthly reconciliations of accounts receivable agings (aged by invoice date), transactionreports, deferred revenue report and general ledger; 

(iii) as soon as available, and in any event within thirty (30) days afterthe end of each month, monthly unaudited financial statements; 

(iv) within thirty (30) days after the end of each month amonthly Compliance Certificate signed by a Responsible Officer, certifying that as of the end of such month, Borrower was in full compliance with all of the terms and conditions of this Agreement, and setting forth calculations showing compliancewith the financial covenants set forth in this Agreement and such other information as Bank shall reasonably request, including, without limitation, a statement that at the end of such month there were no held checks; 

(v) within thirty (30) days prior to the end of each fiscal year of Borrower, annual operating budgets (including income statements, balance sheetsand cash flow statements, by month) for the upcoming fiscal year of Borrower; 

(vi) within thirty (30) days after the end of eachfiscal year of Borrower, annual financial projections for the following fiscal year (on a quarterly basis) as approved by Borrower’s board of directors, together with any related business forecasts used in the preparation of such annualfinancial projections; and 

(vii) as soon as available, and in any event within one hundred twenty (120) days following the endof Borrower’s fiscal year, annual financial statements certified by, and with an unqualified opinion of, independent certified public accountants acceptable to Bank. 

(b) In the event that Borrower is or becomes subject to the reporting requirements under the Securities Exchange Act of 1934, as amended, within five (5) days after filing, all reports on Form 10-K, 10-Q and 8-Kfiled with the Securities and Exchange Commission or a link thereto on Borrower’s or another website on the Internet. 

(c) Promptwritten notice of (i) any material change in the composition of the Intellectual Property, (ii) the registration of any Copyright, including any subsequent ownership right of Borrower in or to any Copyright, Patent or Trademark notpreviously disclosed to Bank, or (iii) Borrower’s knowledge of an event that materially adversely affects the value of the Intellectual Property. 

 

-8- 

**6.3 Accounts Receivable.**

(a) Schedules and Documents Relating to Accounts**. Borrower shall deliver to Bank transaction reports and schedules of collections, asprovided in Section 6.2, on Bank’s standard forms; provided, however, that Borrower’s failure to execute and deliver the same shall not affect or limit Bank’s Lien and other rights in all of Borrower’s Accounts, nor shallBank’s failure to advance or lend against a specific Account affect or limit Bank’s Lien and other rights therein. If requested by Bank, Borrower shall furnish Bank with copies (or, at Bank’s request, originals) of all contracts,orders, invoices, and other similar documents, and all shipping instructions, delivery receipts, bills of lading, and other evidence of delivery, for any goods the sale or disposition of which gave rise to such Accounts. In addition, Borrower shalldeliver to Bank, on its request, the originals of all instruments, chattel paper, security agreements, guarantees and other documents and property evidencing or securing any Accounts, in the same form as received, with all necessary indorsements,and copies of all credit memos. 

(b) Disputes. Borrower shall promptly notify Bank of all disputes or claims outside of the ordinarycourse of business relating to Accounts. Borrower may forgive (completely or partially), compromise, or settle any Account for less than payment in full, or agree to do any of the foregoing so long as (i) Borrower does so in good faith, in acommercially reasonable manner, in the ordinary course of business, in arm’s-length transactions, and reports the same to Bank in the regular reports provided to Bank; (ii) no Default or Event of Default has occurred and is continuing; and(iii) after taking into account all such discounts, settlements and forgiveness, the total outstanding Advances will not exceed the Availability Amount. 

(c) Collection of Accounts. Borrower shall have the right to collect all Accounts, unless and until a Default or an Event of Default has occurred and is continuing. Whether or not an Event of Default hasoccurred and is continuing, Borrower shall hold all Payments on, and proceeds of, Accounts in trust for Bank, and Borrower shall immediately deliver all such payments and proceeds to Bank in their original form, duly endorsed, to be applied to theObligations pursuant to the terms of Section 9.4 hereof. Accounts shall be deposited by Borrower into a lockbox account, or such other “blocked account” as Bank may specify, pursuant to a blocked account agreement in such form as Bankmay specify in its good faith business judgment. Notwithstanding the foregoing, in the event no Default or Event of Default has occurred and is continuing and Borrower maintains unrestricted cash on deposit with Bank plus unused availability underthis Agreement, as determined by Bank with reference to the Availability Amount set forth herein, of at least $1,300,000 (increasing to $1,500,000 on August 31, 2006 and at all times thereafter), payments on, and proceeds of, Accounts receivedby Bank in the lockbox account shall be applied to the Obligations only in the event the outstanding principal amount of the Obligations then exceeds $500,000 (and only to the extent the Obligations then exceed $500,000) and will otherwise bepromptly transferred by Bank to an operating account of Borrower maintained at Bank. 

(d) Returns**. Provided no Event ofDefault has occurred and is continuing, if any Account Debtor returns any Inventory to Borrower, Borrower shall promptly (i) determine the reason for such return, (ii) issue a credit memorandum to the Account Debtor in the appropriateamount, and (iii) provide a copy of such credit memorandum to Bank, upon request from Bank. In the event any attempted return occurs after the occurrence and during the continuance of any Event of Default, Borrower shall hold the returnedInventory in trust for Bank, and immediately notify Bank of the return of the Inventory. 

(e) Verification**. Bank may,from time to time, verify directly with the respective Account Debtors the validity, amount and other matters relating to the Accounts, either in the name of Borrower or Bank or such other name as Bank may choose. 

(f) No Liability**. Bank shall not be responsible or liable for any shortage or discrepancy in, damage to, or loss or destruction of, anygoods, the sale or other disposition of which gives rise to an Account, or for any error, act, omission, or delay of any kind occurring in the settlement, failure to settle, collection or failure to collect any Account, or for settling any Accountin good faith for less than the full amount thereof, nor shall Bank be deemed to be responsible for any of Borrower’s obligations under any contract or agreement giving rise to an Account. Nothing herein shall, however, relieve Bank fromliability for its own gross negligence or willful misconduct. 

**6.4 Remittance of Proceeds**. Except as otherwise provided inSection 6.3(c), deliver, in kind, all proceeds arising from the disposition of any Collateral to Bank in the original form in which received by Borrower not later than the following Business Day after receipt by Borrower, to be applied to theObligations pursuant to the terms of Section 9.4 hereof; provided that, if no Default or Event of Default has occurred and is continuing, Borrower shall not be obligated to remit to Bank the proceeds of the sale of worn out or obsoleteEquipment disposed of by Borrower in good faith in an arm’s length transaction for an aggregate purchase price of $25,000 or less (for all such transactions in any fiscal year). Borrower agrees that it will not commingle proceeds of Collateral

 

-9- 

with any of Borrower’s other funds or property, but will hold such proceeds separate and apart from such other funds and property and in an expresstrust for Bank. Nothing in this Section limits the restrictions on disposition of Collateral set forth elsewhere in this Agreement. 

**6.5Taxes; Pensions**. Make, and cause each of its Subsidiaries, if any, to make, timely payment of all foreign, federal, state and local taxes or assessments (other than taxes and assessment which Borrower is contesting pursuant to the terms ofSection 5. 9 hereof, and shall deliver to Bank, on demand, appropriate certificates attesting to such payments, and pay all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with theirterms. 

**6.6 Access to Collateral; Books and Records**. At reasonable times, on one (1) Business Day’s notice (provided nonotice is required if an Event of Default has occurred and is continuing), Bank, or its agents, shall have the right to inspect the Collateral and the right to audit and copy Borrower’s Books. The foregoing inspections and audits shall be atBorrower’s expense, and the charge therefor shall be $750 per person per day (or such higher amount as shall represent Bank’s then-current standard charge for the same), plus reasonable out-of-pocket expenses. In the event Borrower andBank schedule an audit more than ten (10) days in advance, and Borrower cancels or seeks to reschedules the audit with less than ten (10) days written notice to Bank, then (without limiting any of Bank’s rights or remedies), Borrowershall pay Bank a fee of $1,000 plus any out-of-pocket expenses incurred by Bank to compensate Bank for the anticipated costs and expenses of the cancellation or rescheduling. 

**6.7 Insurance**. Keep its business and the Collateral insured for risks and in amounts standard for companies in Borrower’s industry andlocation and as Bank may reasonably request. Insurance policies shall be in a form, with companies, and in amounts that are satisfactory to Bank. All property policies shall have a lender’s loss payable endorsement showing Bank as the solelender loss payee and waive subrogation against Bank, and all liability policies shall show, or have endorsements showing, Bank as an additional insured. All policies (or the loss payable and additional insured endorsements) shall provide that theinsurer must give Bank at least twenty (20) days notice before canceling, amending, or declining to renew its policy. At Bank’s request, Borrower shall deliver certified copies of policies and evidence of all premium payments. Proceedspayable under any policy shall, at Bank’s option, be payable to Bank on account of the Obligations. Notwithstanding the foregoing, (a) so long as no Event of Default has occurred and is continuing, Borrower shall have the option ofapplying the proceeds of any casualty policy up to $50,000, in the aggregate, toward the replacement or repair of destroyed or damaged property; provided that any such replaced or repaired property (i) shall be of equal or like value as thereplaced or repaired Collateral and (ii) shall be deemed Collateral in which Bank has been granted a first priority security interest, and (b) after the occurrence and during the continuance of an Event of Default, all proceeds payableunder such casualty policy shall, at the option of Bank, be payable to Bank on account of the Obligations. If Borrower fails to obtain insurance as required under this Section 6.7 or to pay any amount or furnish any required proof of payment tothird persons and Bank, Bank may make all or part of such payment or obtain such insurance policies required in this Section 6.7, and take any action under the policies Bank deems prudent. 

**6.8 Operating Accounts.**

(a) Maintainits and its Subsidiaries’, if any, primary depository, operating accounts and securities accounts with Bank and Bank’s affiliates***.***

(b) Provide Bank five (5) days prior written notice before establishing any Collateral Account at or with any bank or financial institution other than Bank or its Affiliates. In addition, for each CollateralAccount that Borrower at any time maintains, Borrower shall cause the applicable bank or financial institution (other than Bank and Eastern Ban in connection with Borrower’s payroll account) at or with which any Collateral Account is maintainedto execute and deliver a Control Agreement or other appropriate instrument with respect to such Collateral Account to perfect Bank’s Lien in such Collateral Account in accordance with the terms hereunder. The provisions of the previous sentenceshall not apply to deposit accounts exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of Borrower’s employees and identified to Bank by Borrower as such. 

**6.9 Financial Covenants.**

Borrowershall maintain at all times, to be tested as of the last day of each month, unless otherwise noted, on a consolidated basis with respect to Borrower and its Subsidiaries: 

 

-10- 

(a) **Minimum Cash/Excess Availability**. Borrower shall maintain unrestricted cash on depositwith Bank plus unused availability under this Agreement, as determined by Bank with reference to the Availability Amount set forth herein, of at least (i) $800,000 from the Effective Date through August 30, 2006, and (ii) $1,000,000from August 31, 2006 and thereafter. For the purposes of calculations pursuant to this subsection (a), the Availability Amount shall not be capped by the Revolving Line amount. 

(b) **Maximum Loss/Profitability.**Borrower shall not permit its Net Income in any three month period to be less than (i) ($200,000) fromthe Effective Date through April 30, 2006, (ii) ($50,000) from May 1, 2006 though July 31, 2006, and (iii) $1.00 from August 1, 2006 and thereafter, tested monthly as of the last day of each month on a trailing threemonth basis. 

**6.10 Protection and Registration of Intellectual Property Rights**. Borrower shall: (a) protect, defend andmaintain the validity and enforceability of its intellectual property; (b) promptly advise Bank in writing of material infringements of its intellectual property; and (c) not allow any intellectual property material to Borrower’sbusiness to be abandoned, forfeited or dedicated to the public without Bank’s written consent. If Borrower decides to register any copyrights or mask works in the United States Copyright Office, Borrower shall: (x) provide Bank with atleast fifteen (15) days prior written notice of its intent to register such copyrights or mask works together with a copy of the application it intends to file with the United States Copyright Office (excluding exhibits thereto);(y) execute an intellectual property security agreement or such other documents as Bank may reasonably request to maintain the perfection and priority of Bank’s security interest in the copyrights or mask works intended to be registeredwith the United States Copyright Office; and (z) record such intellectual property security agreement with the United States Copyright Office contemporaneously with filing the copyright or mask work application(s) with the United StatesCopyright Office. Borrower shall promptly provide to Bank a copy of the application(s) filed with the United States Copyright Office together with evidence of the recording of the intellectual property security agreement necessary for Bank tomaintain the perfection and priority of its security interest in such copyrights or mask works. Borrower shall provide written notice to Bank of any application filed by Borrower in the United States Patent and Trademark Office for a patent or toregister a trademark or service mark within 30 days after any such filing. 

**6.11 Litigation Cooperation**. From the date hereof andcontinuing through the termination of this Agreement, make available to Bank, without expense to Bank, Borrower and its officers, employees and agents and Borrower’s books and records, to the extent that Bank may deem them reasonably necessaryto prosecute or defend any third-party suit or proceeding instituted by or against Bank with respect to any Collateral or relating to Borrower. 

**6.12 Further Assurances**. Borrower shall execute any further instruments and take further action as Bank reasonably requests to perfect or continue Bank’s Lien in the Collateral or to effect the purposes of this Agreement.

**7 NEGATIVE COVENANTS**

Borrower shall not do any of the following without Bank’s prior written consent: 

**7.1 Dispositions**. Convey, sell,lease, transfer or otherwise dispose of (collectively, “**Transfer**”), or permit any of its Subsidiaries to Transfer, all or any part of its business or property, except for Transfers of (a) of Inventory in the ordinary course ofbusiness; (b) of worn-out or obsolete Equipment; and (c) in connection with Permitted Liens and Permitted Investments; and (d) of non-exclusive licenses for the use of the property of Borrower or its Subsidiaries in the ordinarycourse of business. Borrower shall not enter into an agreement with any Person other than Bank which restricts the subsequent granting of a security interest in Borrower’s intellectual property. 

**7.2 Changes in Business, Management, Ownership, Control, or Business Locations**. (a) Engage in or permit any of its Subsidiaries, if any, toengage in any business other than the businesses currently engaged in by Borrower and such Subsidiary, as applicable, or reasonably related thereto; (b) liquidate or dissolve; or (c) (i) have a change in management or if the KeyPerson ceases to hold such office with Borrower and a replacement satisfactory to Bank is not made within sixty days after his departure from Borrower or (ii) permit or suffer any Change in Control. Borrower shall not, without at least thirty(30) days prior written notice to Bank: (1) add any new offices or business locations, including warehouses (unless such new offices or business locations contain less than Ten Thousand Dollars ($10,000) in Borrower’s assets orproperty), (2) change its jurisdiction of organization, (3) change its organizational structure or type, (4) change its legal name, or (5) change any organizational number (if any) assigned by its jurisdiction of organization.

 

-11- 

**7.3 Mergers or Acquisitions**. Merge or consolidate, or permit any of its Subsidiaries to merge orconsolidate, with any other Person, or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital stock or property of another Person. A Subsidiary may merge or consolidate into another Subsidiary or intoBorrower. 

**7.4 Indebtedness**. Create, incur, assume, or be liable for any Indebtedness, or permit any Subsidiary to do so, other thanPermitted Indebtedness. 

**7.5 Encumbrance**. Create, incur, or allow any Lien on any of its property, or assign or convey any right toreceive income, including the sale of any Accounts, or permit any of its Subsidiaries to do so, except for Permitted Liens, permit any Collateral not to be subject to the first priority security interest granted herein, or enter into any agreement,document, instrument or other arrangement (except with or in favor of Bank) with any Person which directly or indirectly prohibits or has the effect of prohibiting Borrower or any Subsidiary from assigning, mortgaging, pledging, granting a securityinterest in or upon, or encumbering any of Borrower’s or any Subsidiary’s intellectual property, except as is otherwise permitted in Section 7.1 hereof and the definition of “Permitted Lien” herein. 

**7.6 Maintenance of Collateral Accounts**. Maintain any Collateral Account except pursuant to the terms of Section 6.8.(b) hereof. 

7.7 **Investments; Distributions**. (a) Directly or indirectly make any Investment other than Permitted Investments, or permit any of itsSubsidiaries to do so; or (b) pay any dividends or make any distribution or payment or redeem, retire or purchase any capital stock provided that (i) Borrower may convert any of its convertible securities into other securities pursuant tothe terms of such convertible securities or otherwise in exchange thereof, (ii) Borrower may pay dividends solely in common stock; and (iii) Borrower may repurchase the stock of former employees or consultants pursuant to stock repurchaseagreements so long as an Event of Default does not exist at the time of such repurchase and would not exist after giving effect to such repurchase, provided such repurchase does not exceed in the aggregate of $50,000 per fiscal year. 

**7.8 Transactions with Affiliates**. Directly or indirectly enter into or permit to exist any material transaction with any Affiliate of Borrower,except for transactions that are in the ordinary course of Borrower’s business, upon fair and reasonable terms that are no less favorable to Borrower than would be obtained in an arm’s length transaction with a non-affiliated Person.

**7.9 Subordinated Debt**. (a) Make or permit any payment on any Subordinated Debt, except under the terms of the subordination,intercreditor, or other similar agreement to which such Subordinated Debt is subject, or (b) amend any provision in any document relating to the Subordinated Debt which would increase the amount thereof or adversely affect the subordinationthereof to Obligations owed to Bank. 

**7.10 Compliance**. Become an “investment company” or a company controlled by an“investment company”, under the Investment Company Act of 1940 or undertake as one of its important activities extending credit to purchase or carry margin stock (as defined in Regulation U of the Board of Governors of the Federal ReserveSystem), or use the proceeds of any Credit Extension for that purpose; fail to meet the minimum funding requirements of ERISA, permit a Reportable Event or Prohibited Transaction, as defined in ERISA, to occur; fail to comply with the Federal FairLabor Standards Act or violate any other law or regulation, if the violation could reasonably be expected to have a material adverse effect on Borrower’s business, or permit any of its Subsidiaries to do so; withdraw or permit any Subsidiary towithdraw from participation in, permit partial or complete termination of, or permit the occurrence of any other event with respect to, any present pension, profit sharing and deferred compensation plan which could reasonably be expected to resultin any liability of Borrower, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other governmental agency. 

**8 EVENTS OF DEFAULT**

Any one of the following shall constitute an event of default (an“**Event of Default**”) under this Agreement: 

 

-12- 

**8.1 Payment Default**. Borrower fails to (a) make any payment of principal or interest on anyCredit Extension on its due date, or (b) pay any other Obligations within three (3) Business Days after such Obligations are due and payable. During the cure period, the failure to cure the payment default is not an Event of Default (butno Credit Extension will be made during the cure period); 

**8.2 Covenant Default.**

(a) Borrower fails or neglects to perform any obligation in Sections 6.2, 6.8, or 6.9 or violates any covenant in Section 7; or 

(b) Borrower fails or neglects to perform, keep, or observe any other term, provision, condition, covenant or agreement contained in this Agreement, anyLoan Documents, and as to any default (other than those specified in this Section 8) under such other term, provision, condition, covenant or agreement that can be cured, has failed to cure the default within ten (10) days after theoccurrence thereof; provided, however, that if the default cannot by its nature be cured within the ten (10) day period or cannot after diligent attempts by Borrower be cured within such ten (10) day period, and such default is likely tobe cured within a reasonable time, then Borrower shall have an additional period (which shall not in any case exceed thirty (30) days) to attempt to cure such default, and within such reasonable time period the failure to cure the default shallnot be deemed an Event of Default (but no Credit Extensions shall be made during such cure period). Grace periods provided under this section shall not apply, among other things, to financial covenants or any other covenants set forth in subsection(a) above; 

**8.3 Material Adverse Change**. A Material Adverse Change occurs; 

**8.4 Attachment**. (a) Any material portion of Borrower’s assets is attached, seized, levied on, or comes into possession of a trustee orreceiver and the attachment, seizure or levy is not removed in ten (10) days; (b) the service of process upon Bank (or Bank’s Affiliate) seeking to attach, by trustee or similar process, any funds of Borrower, or of any entity undercontrol of Borrower (including a Subsidiary) on deposit with Bank; (c) Borrower is enjoined, restrained, or prevented by court order from conducting a material part of its business; (d) a judgment or other claim in excess of $50,000becomes a Lien on any of Borrower’s assets; or (e) a notice of lien, levy, or assessment is filed against any of Borrower’s assets by any government agency and not paid within ten (10) days after Borrower receives notice. Theseare not Events of Default if stayed or if a bond is posted pending contest by Borrower (but no Credit Extensions shall be made during the cure period); 

**8.5 Insolvency**. Borrower is unable to pay its debts (including trade debts) as they become due or otherwise becomes insolvent; (b) Borrower begins an Insolvency Proceeding; or (c) an InsolvencyProceeding is begun against Borrower and not dismissed or stayed within thirty (30) days (but no Credit Extensions shall be made while of any of the conditions described in clause (a) exist and/or until any Insolvency Proceeding isdismissed); 

**8.6 Other Agreements**. There is a default in any agreement to which Borrower or any Guarantor is a party with a thirdparty or parties resulting in a right by such third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness in an amount in excess of $50,000 or that could have a material adverse effect on Borrower’s or anyGuarantor’s business; 

**8.7 Judgments**. A judgment or judgments for the payment of money in an amount, individually or in theaggregate, of at least $50,000 (not covered by independent third-party insurance) shall be rendered against Borrower and shall remain unsatisfied and unstayed for a period of ten (10) days after the entry thereof (provided that no CreditExtensions will be made prior to the satisfaction or stay of such judgment); 

**8.8 Misrepresentations**. Borrower or any Person actingfor Borrower makes any representation, warranty, or other statement now or later in this Agreement, any Loan Document or in any writing delivered to Bank or to induce Bank to enter this Agreement or any Loan Document, and such representation,warranty, or other statement is incorrect in any material respect when made; 

**8.9 Subordinated Debt**. A default or breach occursunder any agreement between Borrower and any creditor of Borrower that signed a subordination, intercreditor, or other similar agreement with Bank, or any creditor that has signed such an agreement with Bank breaches any terms of such agreement; or

 

-13- 

**9 BANK’S RIGHTS AND REMEDIES**

**9.1 Rights and Remedies**. While an Event of Default occurs and continues Bank may, without notice or demand, do any or all of the following:

(a) declare all Obligations immediately due and payable (but if an Event of Default described in Section 8.5 occurs all Obligationsare immediately due and payable without any action by Bank); 

(b) stop advancing money or extending credit for Borrower’s benefitunder this Agreement or under any other agreement between Borrower and Bank; 

(c) demand that Borrower (i) deposits cash with Bank inan amount equal to the aggregate amount of any Letters of Credit remaining undrawn, as collateral security for the repayment of any future drawings under such Letters of Credit, and Borrower shall forthwith deposit and pay such amounts, and(ii) pay in advance all Letter of Credit fees scheduled to be paid or payable over the remaining term of any Letters of Credit; 

(d)terminate any FX Contracts; 

(e) settle or adjust disputes and claims directly with Account Debtors for amounts on terms and in any orderthat Bank considers advisable, notify any Person owing Borrower money of Bank’s security interest in such funds, and verify the amount of such account; 

(f) make any payments and do any acts it considers necessary or reasonable to protect the Collateral and/or its security interest in the Collateral. Borrower shall assemble the Collateral if Bank requests and make itavailable as Bank designates. Bank may enter premises where the Collateral is located, take and maintain possession of any part of the Collateral, and pay, purchase, contest, or compromise any Lien which appears to be prior or superior to itssecurity interest and pay all expenses incurred. Borrower grants Bank a license to enter and occupy any of its premises, without charge, to exercise any of Bank’s rights or remedies; 

(g) apply to the Obligations any (i) balances and deposits of Borrower it holds, or (ii) any amount held by Bank owing to or for the credit orthe account of Borrower; 

(h) ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and sell theCollateral. Bank is hereby granted a non-exclusive, royalty-free license or other right to use, without charge, Borrower’s labels, patents, copyrights, mask works, rights of use of any name, trade secrets, trade names, trademarks, servicemarks, and advertising matter, or any similar property as it pertains to the Collateral, in completing production of, advertising for sale, and selling any Collateral and, in connection with Bank’s exercise of its rights under this Section,Borrower’s rights under all licenses and all franchise agreements inure to Bank’s benefit; 

(i) place a “hold” on anyaccount maintained with Bank and/or deliver a notice of exclusive control, any entitlement order, or other directions or instructions pursuant to any Control Agreement or similar agreements providing control of any Collateral; 

(j) demand and receive possession of Borrower’s Books; and 

(k) exercise all rights and remedies available to Bank under the Loan Documents or at law or equity, including all remedies provided under the Code (including disposal of the Collateral pursuant to the terms thereof).

**9.2 Power of Attorney**. Borrower hereby irrevocably appoints Bank as its lawful attorney-in-fact, exercisable upon the occurrenceand during the continuance of an Event of Default, to: (a) endorse Borrower’s name on any checks or other forms of payment or security; (b) sign Borrower’s name on any invoice or bill of lading for any Account or drafts againstAccount Debtors; (c) settle and adjust disputes and claims about the Accounts directly with Account Debtors, for amounts and on terms Bank determines reasonable; (d) make, settle, and adjust all claims under Borrower’s insurancepolicies; (e) pay, contest or settle any Lien, charge, encumbrance, security interest, and adverse claim in or to the Collateral, or any judgment based thereon, or otherwise take any action to terminate or discharge the same; and(f) transfer the Collateral into the name of Bank or a third party as the Code permits. Borrower hereby appoints Bank as its lawful attorney-in-fact to sign Borrower’s name on any documents necessary to perfect or continue the perfectionof any security interest regardless of whether an Event of Default has occurred until all Obligations have been satisfied in full and Bank is under no further obligation to make Credit 

 

-14- 

Extensions hereunder. Bank’s foregoing appointment as Borrower’s attorney in fact, and all of Bank’s rights and powers, coupled with aninterest, are irrevocable until all Obligations have been fully repaid and performed and Bank’s obligation to provide Credit Extensions terminates. 

**9.3 Protective Payments**. If Borrower fails to obtain the insurance called for by Section 6.7 or fails to pay any premium thereon or fails to pay any other amount which Borrower is obligated to pay underthis Agreement or any other Loan Document, Bank may obtain such insurance or make such payment, and all amounts so paid by Bank are Bank Expenses and immediately due and payable, bearing interest at the then highest applicable rate, and secured bythe Collateral. Bank will make reasonable efforts to provide Borrower with notice of Bank obtaining such insurance at the time it is obtained or within a reasonable time thereafter. No payments by Bank are deemed an agreement to make similarpayments in the future or Bank’s waiver of any Event of Default. 

**9.4 Application of Payments and Proceeds**. Unless an Event ofDefault has occurred and is continuing, Bank shall apply any funds in its possession, whether from Borrower account balances, payments, or proceeds realized as the result of any collection of Accounts or other disposition of the Collateral, first,to Bank Expenses, including without limitation, the reasonable costs, expenses, liabilities, obligations and attorneys’ fees incurred by Bank in the exercise of its rights under this Agreement; second, to the interest due upon any of theObligations; and third, to the principal of the Obligations and any applicable fees and other charges, in such order as Bank shall determine in its sole discretion. Any surplus shall be paid to Borrower or other Persons legally entitled thereto;Borrower shall remain liable to Bank for any deficiency. If an Event of Default has occurred and is continuing, Bank may apply any funds in its possession, whether from Borrower account balances, payments, proceeds realized as the result of anycollection of Accounts or other disposition of the Collateral, or otherwise, to the Obligations in such order as Bank shall determine in its sole discretion. Any surplus shall be paid to Borrower or to other Persons legally entitled thereto;Borrower shall remain liable to Bank for any deficiency. If Bank, in its good faith business judgment, directly or indirectly enters into a deferred payment or other credit transaction with any purchaser at any sale of Collateral, Bank shall havethe option, exercisable at any time, of either reducing the Obligations by the principal amount of the purchase price or deferring the reduction of the Obligations until the actual receipt by Bank of cash therefor. 

**9.5 Bank’s Liability for Collateral**. So long as Bank complies with reasonable banking practices regarding the safekeeping of the Collateralin the possession or under the control of Bank, Bank shall not be liable or responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage to the Collateral; (c) any diminution in the value of the Collateral; or(d) any act or default of any carrier, warehouseman, bailee, or other Person. Borrower bears all risk of loss, damage or destruction of the Collateral. 

**9.6 No Waiver; Remedies Cumulative**. Bank’s failure, at any time or times, to require strict performance by Borrower of any provision of this Agreement or any other Loan Document shall not waive, affect, ordiminish any right of Bank thereafter to demand strict performance and compliance herewith or therewith. No waiver hereunder shall be effective unless signed by Bank and then is only effective for the specific instance and purpose for which it isgiven. Bank’s rights and remedies under this Agreement and the other Loan Documents are cumulative. Bank has all rights and remedies provided under the Code, by law, or in equity. Bank’s exercise of one right or remedy is not an election,and Bank’s waiver of any Event of Default is not a continuing waiver. Bank’s delay in exercising any remedy is not a waiver, election, or acquiescence. 

**9.7 Demand Waiver**. Borrower waives demand, notice of default or dishonor, notice of payment and nonpayment, notice of any default, nonpayment at maturity, release, compromise, settlement, extension, or renewalof accounts, documents, instruments, chattel paper, and guarantees held by Bank on which Borrower is liable. 

**10 NOTICES**

All notices, consents, requests, approvals, demands, or other communication (collectively, “**Communication**”), otherthan Advance requests made pursuant to Section 3.4, by any party to this Agreement or any other Loan Document must be in writing and be delivered or sent by facsimile at the addresses or facsimile numbers listed below. Bank or Borrower maychange its notice address by giving the other party written notice thereof. Each such Communication shall be deemed to have been validly served, given, or delivered: (a) upon the earlier of actual receipt and three (3) Business Days afterdeposit in the U.S. mail, registered or certified mail, return receipt requested, with proper postage prepaid; (b) upon transmission, when sent by facsimile transmission (with such facsimile promptly confirmed by delivery of a copy by personaldelivery or United States mail as otherwise provided in this Section 10); (c) one (1) Business Day after deposit with a reputable overnight courier with all 

 

-15- 

charges prepaid; or (d) when delivered, if hand-delivered by messenger, all of which shall be addressed to the party to be notified and sent to theaddress or facsimile number indicated below. Advance requests made pursuant to Section 3.4 must be in writing and may be in the form of electronic mail, delivered to Bank by Borrower at the e-mail address of Bank provided below and shall bedeemed to have been validly served, given, or delivered when sent (with such electronic mail promptly confirmed by delivery of a copy by personal delivery or United States mail as otherwise provided in this Section 10). Bank or Borrower maychange its address, facsimile number, or electronic mail address by giving the other party written notice thereof in accordance with the terms of this Section 10. 

 
If to Borrower:  International Electronics, Incorporated  427 Turnpike Street  Canton, Massachusetts 02021  Attn: __John Walsdstein,  Chief Executive Officer                                          Fax: ___781-821-4443                                                                          Email: j_waldstein@ieib.comWith a copy to:  Cohan Rasnick Myerson LLP  427 Turnpike Street  Boston, Massachusetts 02109  Attn: _Peter Myerson, Esquire                                                                                  Fax: _617- 227-1780                                                      Email: ppmyerson@aol.comIf to Bank:  Silicon Valley Bank  One Newton Executive Park, Suite 200  2221 Washington Street, Newton, MA 02462  Attn: Jay T. Tracy  Fax: 617-527-0177  Email: jtracy@svbank.comwith a copy to:  Riemer & Braunstein LLP  Three Center Plaza  Boston, Massachusetts 02108  Attn: Charles W. Stavros, Esquire  Fax: (617) 880-3456  Email: CStavros@riemerlaw.com
**11 CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER AND JUDICIAL REFERENCE**

Massachusetts law governs the Loan Documents without regard to principles of conflicts of law. Borrower and Bank each submit to the exclusive jurisdictionof the State and Federal courts in Massachusetts; provided, however, that nothing in this Agreement shall be deemed to operate to preclude Bank from bringing suit or taking other legal action in any other jurisdiction to realize on the Collateral orany other security for the Obligations, or to enforce a judgment or other court order in favor of Bank. Borrower expressly submits and consents in advance to such jurisdiction in any action or suit commenced in any such court, and Borrower herebywaives any objection that it may have based upon lack of personal jurisdiction, improper venue, or forum non conveniens and hereby consents to the granting of such legal or equitable relief as is deemed appropriate by such court. Borrower herebywaives personal service of the summons, complaints, and other process issued in such action or suit and agrees that service of such summons, complaints, and other process may be made by registered or certified mail addressed to Borrower at theaddress set forth in Section 10 of this Agreement and that service so made shall be deemed completed upon the earlier to occur of Borrower’s actual receipt thereof or three (3) days after deposit in the U.S. mails, proper postageprepaid. NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH HEREINABOVE, BANK SHALL SPECIFICALLY HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST 

 

-16- 

BORROWER OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION WHICH BANK DEEMS NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR TOOTHERWISE ENFORCE BANK’S RIGHTS AGAINST BORROWER OR ITS PROPERTY. 

**TO THE EXTENT PERMITTED BY APPLICABLE LAW, BORROWER AND BANK EACH WAIVE THEIRRIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIALINDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL**. 

**12 GENERALPROVISIONS**

**12.1 Successors and Assigns**. This Agreement binds and is for the benefit of the successors and permitted assignsof each party. Borrower may not assign this Agreement or any rights or obligations under it without Bank’s prior written consent (which may be granted or withheld in Bank’s discretion). Bank has the right, without the consent of or noticeto Borrower, to sell, transfer, negotiate, or grant participation in all or any part of, or any interest in, Bank’s obligations, rights, and benefits under this Agreement and the other Loan Documents. 

**12.2 Indemnification**. Borrower agrees to indemnify, defend and hold Bank and its directors, officers, employees, agents, attorneys, or any otherPerson affiliated with or representing Bank harmless against: (a) all obligations, demands, claims, and liabilities (collectively, “Claims”) asserted by any other party in connection with the transactions contemplated by the LoanDocuments; and (b) all losses or Bank Expenses incurred, or paid by Bank from, following, or arising from transactions between Bank and Borrower (including reasonable attorneys’ fees and expenses), except for Claims and/or losses directlycaused by Bank’s gross negligence or willful misconduct. 

**12.3 Limitation of Actions**.**Any claim or cause of action byBorrower against Bank, its directors, officers, employees, agents, accountants, attorneys, or any other Person affiliated with or representing Bank based upon, arising from, or relating to this Loan Agreement or any other Loan Document, or any othertransaction contemplated hereby or thereby or relating hereto or thereto, or any other matter, cause or thing whatsoever, occurred, done, omitted or suffered to be done by Bank, its directors, officers, employees, agents, accountants or attorneys,shall be barred unless asserted by Borrower by the commencement of an action or proceeding in a court of competent jurisdiction by (a) the filing of a complaint within one year from the earlier of (i) the date any of Borrower’sofficers or directors had knowledge of the first act, the occurrence or omission upon which such claim or cause of action, or any part thereof, is based, or (ii) the date this Agreement is terminated, and (b) the service of a summons andcomplaint on an officer of Bank, or on any other person authorized to accept service on behalf of Bank, within thirty (30) days thereafter. Borrower agrees that such one-year period is a reasonable and sufficient time for Borrower toinvestigate and act upon any such claim or cause of action. The one-year period provided herein shall not be waived, tolled, or extended except by the written consent of Bank in its sole discretion. This provision shall survive any termination ofthis Loan Agreement or any other Loan Document. 

**12.4 Time of Essence**. Time is of the essence for the performance of all Obligationsin this Agreement. 

**12.5 Severability of Provisions**. Each provision of this Agreement is severable from every other provision indetermining the enforceability of any provision. 

**12.6 Amendments in Writing; Integration**. All amendments to this Agreement must bein writing signed by both Bank and Borrower. This Agreement and the Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements. All prior agreements, understandings, representations,warranties, and negotiations between the parties about the subject matter of this Agreement and the Loan Documents merge into this Agreement and the Loan Documents. 

**12.7 Counterparts**. This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, are an original, and all takentogether, constitute one Agreement. 

 

-17- 

**12.8 Survival**. All covenants, representations and warranties made in this Agreement continue infull force until this Agreement has terminated pursuant to its terms and all Obligations (other than inchoate indemnity obligations and any other obligations which, by their terms, are to survive the termination of this Agreement) have beensatisfied. The obligation of Borrower in Section 12.2 to indemnify Bank shall survive until the statute of limitations with respect to such claim or cause of action shall have run. 

**12.9 Confidentiality**. In handling any confidential information, Bank shall exercise the same degree of care that it exercises for its ownproprietary information, but disclosure of information may be made: (a) to Bank’s Subsidiaries or Affiliates; (b) to prospective transferees or purchasers of any interest in the Credit Extensions (provided, however, Bank shall usecommercially reasonable efforts to obtain such prospective transferee’s or purchaser’s agreement to the terms of this provision); (c) as required by law, regulation, subpoena, or other order; (d) to Bank’s regulators or asotherwise required in connection with Bank’s examination or audit; and (e) as Bank considers appropriate in exercising remedies under this Agreement. Confidential information does not include information that either: (i) is in thepublic domain or in Bank’s possession when disclosed to Bank, or becomes part of the public domain after disclosure to Bank; or (ii) is disclosed to Bank by a third party, if Bank does not know that the third party is prohibited fromdisclosing the information. 

**12.11 Right of Set Off**. Borrower hereby grants to Bank, a lien, security interest and right of set offas security for all Obligations to Bank, whether now existing or hereafter arising upon and against all deposits, credits, collateral and property, now or hereafter in the possession, custody, safekeeping or control of Bank or any entity under thecontrol of Bank (including a Bank subsidiary) or in transit to any of them. At any time after the occurrence and during the continuance of an Event of Default, without demand or notice, Bank may set off the same or any part thereof and apply thesame to any liability or obligation of Borrower even though unmatured and regardless of the adequacy of any other collateral securing the Obligations. ANY AND ALL RIGHTS TO REQUIRE BANK TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHERCOLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED 

**13 DEFINITIONS**

**13.1Definitions**. As used in this Agreement, the following terms have the following meanings: 

“**Account**” is any“account” as defined in the Code with such additions to such term as may hereafter be made, and includes, without limitation, all accounts receivable and other sums owing to Borrower. 

“**Account Debtor**” is any “account debtor” as defined in the Code with such additions to such term as may hereafter be made.

“**Advance**” or “**Advances**” means an advance (or advances) under the Revolving Line. 

“**Affiliate**” of any Person is a Person that owns or controls directly or indirectly the Person, any Person that controls or is controlledby or is under common control with the Person, and each of that Person’s senior executive officers, directors, partners and, for any Person that is a limited liability company, that Person’s managers and members. 

“**Agreement**” is defined in the preamble hereof. 

“**Availability Amount**” is (a) the lesser of (i) the Revolving Line or (ii) the Borrowing Base minus (b) the amount of all outstanding Letters of Credit (including drawn butunreimbursed Letters of Credit) plus an amount equal to the Letter of Credit Reserves, minus (c) the FX Reserve, and minus (d) the outstanding principal balance of any Advances (including any amounts used for Cash Management Services).

“**Bank**” is defined in the preamble hereof. 

“**Bank Expenses**” are all audit fees and expenses, costs, and expenses (including reasonable attorneys’ fees and expenses) for preparing, negotiating, administering, defending and enforcing theLoan Documents (including, without limitation, those incurred in connection with appeals or Insolvency Proceedings) or otherwise incurred with respect to Borrower. 

 

-18- 

“**Borrower**” is defined in the preamble hereof 

“**Borrower’s Books**” are all Borrower’s books and records including ledgers, federal and state tax returns, records regardingBorrower’s assets or liabilities, the Collateral, business operations or financial condition, and all computer programs or storage or any equipment containing such information. 

“**Borrowing Base**” is 80% of Eligible Accounts, as determined by Bank from Borrower’s most recent Borrowing Base Certificate,provided, however, that Bank may decrease the foregoing percentage in its good faith business judgment based on events, conditions, contingencies, or risks which, as determined by Bank, may adversely affect Collateral. 

“**Borrowing Base Certificate**” is that certain certificate included within each Transaction Report. 

“**Borrowing Resolutions**” are, with respect to any Person, those resolutions adopted by such Person’s Board of Directors or otherappropriate body and delivered by such Person to Bank approving the Loan Documents to which such Person is a party and the transactions contemplated thereby, together with a certificate executed by its secretary on behalf of such Person certifyingthat (a) such Person has the authority to execute, deliver, and perform its obligations under each of the Loan Documents to which it is a party, (b) that attached as Exhibit A to such certificate is a true, correct, and complete copy ofthe resolutions then in full force and effect authorizing and ratifying the execution, delivery, and performance by such Person of the Loan Documents to which it is a party, (c) the name(s) of the Person(s) authorized to execute the LoanDocuments on behalf of such Person, together with a sample of the true signature(s) of such Person(s), and (d) that Bank may conclusively rely on such certificate unless and until such Person shall have delivered to Bank a further certificatecanceling or amending such prior certificate. 

“**Business Day**” is any day that is not a Saturday, Sunday or a day on whichBank is closed. 

**“Cash Equivalents”**means (a) marketable direct obligations issued or unconditionally guaranteed bythe United States or any agency or any State thereof having maturities of not more than one (1) year from the date of acquisition; (b) commercial paper maturing no more than one (1) year after its creation and having the highestrating from either Standard & Poor’s Ratings Group or Moody’s Investors Service, Inc., (c) Bank’s certificates of deposit issued maturing no more than one (1) year after issue; and (d) money market funds atleast ninety-five percent (95%) of the assets of which constitute Cash Equivalents of the kinds described in clauses (a) through (c) of this definition. 

“**Cash Management Services**” is defined in Section 2.1.4. 

“**Cash Management ServicesSublimit**” is defined in Section 2.1.4. 

“**Change in Control**” means any event, transaction, or occurrence as aresult of which (a) any “person” (as such term is defined in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934, as an amended (the “**Exchange Act**”)), other than a trustee or other fiduciary holdingsecurities under an employee benefit plan of Borrower, is or becomes a beneficial owner (within the meaning Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of Borrower, representing twenty-five percent(25%) or more of the combined voting power of Borrower’s then outstanding securities; or (b) during any period of twelve consecutive calendar months, individuals who at the beginning of such period constituted the Board of Directorsof Borrower (together with any new directors whose election by the Board of Directors of Borrower was approved by a vote of at least two-thirds of the directors then still in office who either were directions at the beginning of such period or whoseelection or nomination for election was previously so approved) cease for any reason other than death or disability to constitute a majority of the directors then in office. 

“**Code**” is the Uniform Commercial Code, as the same may, from time to time, be enacted and in effect in the Commonwealth ofMassachusetts; provided, that, to the extent that the Code is used to define any term herein or in any Loan Document and such term is defined differently in different Articles or Divisions of the Code, the definition of such term contained inArticle or Division 9 shall govern; provided further, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, or priority of, or remedies with respect to, Bank’s Lien on any Collateral isgoverned by the Uniform Commercial Code in effect in a jurisdiction other than the Commonwealth of Massachusetts, the term “**Code**” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely forpurposes on the provisions thereof relating to such attachment, perfection, priority, or remedies and for purposes of definitions relating to such provisions. 

 

-19- 

“**Collateral**” is any and all properties, rights and assets of Borrower described onExhibit A. 

“**Collateral Account**” is any Deposit Account, Securities Account, or Commodity Account. 

“**Commodity Account**” is any “commodity account” as defined in the Code with such additions to such term as may hereafter bemade. 

“**Communication**” is defined in Section 10. 

“**Compliance Certificate**” is that certain certificate in the form attached hereto as Exhibit D. 

“**Contingent Obligation**” is, for any Person, any direct or indirect liability, contingent or not, of that Person for (a) anyindebtedness, lease, dividend, letter of credit or other obligation of another such as an obligation directly or indirectly guaranteed, endorsed, co-made, discounted or sold with recourse by that Person, or for which that Person is directly orindirectly liable; (b) any obligations for undrawn letters of credit for the account of that Person; and (c) all obligations from any interest rate, currency or commodity swap agreement, interest rate cap or collar agreement, or otheragreement or arrangement designated to protect a Person against fluctuation in interest rates, currency exchange rates or commodity prices; but “Contingent Obligation” does not include endorsements in the ordinary course of business. Theamount of a Contingent Obligation is the stated or determined amount of the primary obligation for which the Contingent Obligation is made or, if not determinable, the maximum reasonably anticipated liability for it determined by the Person in goodfaith; but the amount may not exceed the maximum of the obligations under any guarantee or other support arrangement. 

“**ControlAgreement**” is any control agreement entered into among the depository institution at which Borrower maintains a Deposit Account or the securities intermediary or commodity intermediary at which Borrower maintains a Securities Account or aCommodity Account, Borrower, and Bank pursuant to which Bank obtains control (within the meaning of the Code) over such Deposit Account, Securities Account, or Commodity Account. 

“**Credit Extension**” is any Advance, Letter of Credit, Term Loan, FX Forward Contract, amount utilized for Cash Management Services, orany other extension of credit by Bank for Borrower’s benefit. 

“**Default**” means any event which with notice or passageof time or both, would constitute an Event of Default. 

“**Default Rate**” is defined in Section 2.3(b). 

“**Deferred Revenue**” is all amounts received or invoiced in advance of performance under contracts and not yet recognized as revenue.

“**Deposit Account**” is any “deposit account” as defined in the Code with such additions to such term as mayhereafter be made. 

“**Designated Deposit Account**” is Borrower’s deposit account, account number                    , maintained with Bank. 

“**Dollars***,*” “**dollars**” and “**$**” each mean lawful money of the United States. 

“**Domestic Subsidiary**” means a Subsidiary organized under the laws of the United States or any state or territory thereof or the District of Columbia. 

“**Effective Date**” is the date Bank executes this Agreement and as indicated on the signature page hereof. 

“**Eligible Accounts**” are Accounts which arise in the ordinary course of Borrower’s business that meet all Borrower’srepresentations and warranties in Section 5.3. Bank reserves the right at any time and from time to time after the Effective Date, to adjust any of the criteria set forth below and to establish new criteria in its good faith business judgment.Without limiting the fact that the determination of which Accounts are eligible for borrowing is a matter of Bank’s good faith judgment, the following (“**Minimum Eligibility Requirements**”) are the minimum requirements for anAccount to be an Eligible Account. Unless Bank agrees otherwise in writing, Eligible Accounts shall not include: 

(a) Accounts for which theAccount Debtor has not been invoiced; 

 

-20- 

(b) Accounts that the Account Debtor has not paid within ninety (90) days of invoice date;

(c) Accounts owing from an Account Debtor, fifty percent (50%) or more of whose Accounts have not been paid within ninety(90) days of invoice date; 

(d) Credit balances over ninety (90) days from invoice date; 

(e) Accounts owing from an Account Debtor, including Affiliates, whose total obligations to Borrower exceed twenty-five (25%) of all Accounts, forthe amounts that exceed that percentage, unless Bank approves in writing; 

(f) Represent progress billings, or be due under a fulfillmentor requirements contract; 

(g) Accounts owing from an Account Debtor which does not have its principal place of business in the UnitedStates except for Eligible Foreign Accounts; 

(h) Accounts owing from the United States or any department, agency, or instrumentalitythereof except for Accounts of the United States if Borrower has assigned its payment rights to Bank and the assignment has been acknowledged under the Federal Assignment of Claims Act of 1940, as amended; 

(i) Accounts owing from an Account Debtor to the extent that Borrower is indebted or obligated in any manner to the Account Debtor (as creditor, lessor,supplier or otherwise - sometimes called “contra” accounts, accounts payable, customer deposits or credit accounts), with the exception of customary credits, adjustments and/or discounts given to an Account Debtor by Borrower in theordinary course of its business; 

(j) Accounts for demonstration or promotional equipment, or in which goods are consigned, or sold on a“sale guaranteed”, “sale or return”, “sale on approval”, “bill and hold”, or other terms if Account Debtor’s payment may be conditional; 

(k) Accounts for which the Account Debtor is Borrower’s Affiliate, officer, employee, or agent; 

(l) Accounts in which the Account Debtor disputes liability or makes any claim (but only up to the disputed or claimed amount), or if the Account Debtoris subject to an Insolvency Proceeding, or becomes insolvent, or goes out of business; 

(m) Accounts owing from an Account Debtor withrespect to which Borrower has received deferred revenue (but only to the extent of such deferred revenue); 

(n) Accounts for which Bank inits good faith business judgment determines collection to be doubtful; and 

(o) other Accounts Bank deems ineligible in the exercise of itsgood faith business judgment. 

“**Eligible Foreign Accounts**” are Accounts for which the Account Debtor does not have itsprincipal place of business in the United States but are otherwise Eligible Accounts that are (a) covered by credit insurance satisfactory to Bank, less any deductible; (b) supported by letter(s) of credit acceptable to Bank; or(c) that Bank approves in writing. 

“**Equipment**” is all “equipment” as defined in the Code with suchadditions to such term as may hereafter be made, and includes without limitation all machinery, fixtures, goods, vehicles (including motor vehicles and trailers), and any interest in any of the foregoing. 

“**ERISA**” is the Employment Retirement Income Security Act of 1974, and its regulations. 

“**Event of Default**” is defined in Section 8. 

“**Foreign Currency**” means lawful money of a country other than the United States. 

 

-21- 

“**Funding Date**” is any date on which a Credit Extension is made to or on account ofBorrower which shall be a Business Day. 

“**FX Business Day**” is any day when (a) Bank’s Foreign ExchangeDepartment is conducting its normal business and (b) the Foreign Currency being purchased or sold by Borrower is available to Bank from the entity from which Bank shall buy or sell such Foreign Currency. 

“**FX Forward Contract**” is defined in Section 2.1.3. 

“**FX****Reserve**” is defined in Section 2.1.3. 

“**GAAP**” isgenerally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial AccountingStandards Board or in such other statements by such other Person as may be approved by a significant segment of the accounting profession, which are applicable to the circumstances as of the date of determination. 

“**General Intangibles**” is all “general intangibles” as defined in the Code in effect on the date hereof with such additions tosuch term as may hereafter be made, and includes without limitation, all copyright rights, copyright applications, copyright registrations and like protections in each work of authorship and derivative work, whether published or unpublished, anypatents, trademarks, service marks and, to the extent permitted under applicable law, any applications therefor, whether registered or not, any trade secret rights, including any rights to unpatented inventions, payment intangibles, royalties,contract rights, goodwill, franchise agreements, purchase orders, customer lists, route lists, telephone numbers, domain names, claims, income and other tax refunds, security and other deposits, options to purchase or sell real or personal property,rights in all litigation presently or hereafter pending (whether in contract, tort or otherwise), insurance policies (including without limitation key man, property damage, and business interruption insurance), payments of insurance and rights topayment of any kind. 

“**Guarantor**” is any present or future guarantor of the Obligations. 

“**Indebtedness**” is (a) indebtedness for borrowed money or the deferred price of property or services, such as reimbursement andother obligations for surety bonds and letters of credit, (b) obligations evidenced by notes, bonds, debentures or similar instruments, (c) capital lease obligations, and (d) Contingent Obligations. 

“**Insolvency Proceeding**” is any proceeding by or against any Person under the United States Bankruptcy Code, or any other bankruptcy orinsolvency law, including assignments for the benefit of creditors, compositions, extensions generally with its creditors, or proceedings seeking reorganization, arrangement, or other relief. 

“**Interest Expense**” means for any fiscal period, interest expense (whether cash or non-cash) determined in accordance with GAAP for therelevant period ending on such date, including, in any event, interest expense with respect to any Credit Extension and other Indebtedness of Borrower and its Subsidiaries, if any, including, without limitation or duplication, all commissions,discounts, or related amortization and other fees and charges with respect to letters of credit and bankers’ acceptance financing and the net costs associated with interest rate swap, cap, and similar arrangements, and the interest portion ofany deferred payment obligation (including leases of all types). 

“**Inventory**” is all “inventory” as defined inthe Code in effect on the date hereof with such additions to such term as may hereafter be made, and includes without limitation all merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and finished products,including without limitation such inventory as is temporarily out of Borrower’s custody or possession or in transit and including any returned goods and any documents of title representing any of the above. 

“**Investment**” is any beneficial ownership interest in any Person (including stock, partnership interest or other securities), and anyloan, advance or capital contribution to any Person. 

**“Key Person”**is Borrower’s Chief Executive Officer who is, asof the Effective Date, John Waldstein. 

“**Letter of Credit”** means a standby letter of credit issued by Bank or anotherinstitution based upon an application, guarantee, indemnity or similar agreement on the part of Bank as set forth in Section 2.1.2. 

 

-22- 

“**Letter of Credit Application**” is defined in Section 2.1.2(a). 

“**Letter of Credit Reserve**” has the meaning set forth in Section 2.1.2(d). 

“**Lien**” is a mortgage, lien, deed of trust, charge, pledge, security interest or other encumbrance. 

“**Loan Documents**” are, collectively, this Agreement, the Perfection Certificate, the negative pledge agreement granted by Borrower toBank, any note, or notes or guaranties executed by Borrower or any Guarantor, and any other present or future agreement between Borrower any Guarantor and/or for the benefit of Bank in connection with this Agreement, all as amended, restated, orotherwise modified. 

**“Material Adverse Change”** is (a) a material impairment in the perfection or priority ofBank’s Lien in the Collateral or in the value of such Collateral; (b) a material adverse change in the business, operations, or condition (financial or otherwise) of Borrower; (c) a material impairment of the prospect of repayment ofany portion of the Obligations or (d) Bank determines, based upon information available to it and in its reasonable judgment, that there is a reasonable likelihood that Borrower shall fail to comply with one or more of the financial covenantsin Section 6 during the next succeeding financial reporting period.****

**“Minimum Eligibility Requirements”** isdefined in the defined term “Eligible Accounts”. 

**“Net Income”**means, as calculated on a consolidated basis forBorrower and its Subsidiaries, if any, for any period as at any date of determination, the net profit (or loss), after provision for taxes, of Borrower and its Subsidiaries for such period taken as a single accounting period.****

“**Obligations**” are Borrower’s obligation to pay when due any debts, principal, interest, Bank Expenses and other amounts Borrowerowes Bank now or later, whether under this Agreement, the Loan Documents, or otherwise, including, without limitation, all obligations relating to letters of credit, cash management services, and foreign exchange contracts, if any, and includinginterest accruing after Insolvency Proceedings begin and debts, liabilities, or obligations of Borrower assigned to Bank, and the performance of Borrower’s duties under the Loan Documents. 

**“Operating Documents”** are, for any Person, such Person’s formation documents, as certified with the Secretary of State of suchPerson’s state of formation on a date that is no earlier than 30 days prior to the Effective Date, and, (a) if such Person is a corporation, its bylaws in current form, (b) if such Person is a limited liability company, its limitedliability company agreement (or similar agreement), and (c) if such Person is a partnership, its partnership agreement (or similar agreement), each of the foregoing with all current amendments or modifications thereto. 

**“Payment”** means all checks, wire transfers and other items of payment received by Bank (including proceeds of Accounts and payment ofall the Obligations in full) for credit to Borrower’s outstanding Credit Extensions or, if the balance of the Credit Extensions has been reduced to zero, for credit to its Deposit Accounts. 

“**Perfection Certificate**” is defined in Section 5.1. 

“**Permitted Indebtedness**” is: 

(a) Borrower’s Indebtedness to Bank under this Agreementand the other Loan Documents; 

(b) Indebtedness existing on the Effective Date and shown on the Perfection Certificate; 

(c) Subordinated Debt; 

(d) unsecuredIndebtedness to trade creditors incurred in the ordinary course of business; 

(e) Indebtedness incurred as a result of endorsing negotiableinstruments received in the ordinary course of business; 

(f) Indebtedness in an aggregate principal amount not to exceed $150,000 securedby Permitted Liens; 

 

-23- 

(g) other Indebtedness not otherwise permitted by Section 7.4 not exceeding $50,000 in the aggregateoutstanding at any time; and 

(h) extensions, refinancings, modifications, amendments and restatements of any items of PermittedIndebtedness (a) through (g) above, provided that the principal amount thereof is not increased or the terms thereof are not modified to impose more burdensome terms upon Borrower or its Subsidiary, as the case may be. 

“**Permitted Investments**” are: 

(a) Investments shown on the Perfection Certificate and existing on the Effective Date; 

(b)(i) Cash Equivalents; 

(c) Investments consisting of the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course ofBorrower; 

(d) Investments consisting of deposit accounts in which Bank has a perfected security interest; 

(e) Investments accepted in connection with Transfers permitted by Section 7.1; 

(f) Investments consisting of (i) travel advances and employee relocation loans and other employee loans and advances in the ordinary course ofbusiness, and (ii) loans to employees, officers or directors relating to the purchase of equity securities of Borrower or its Subsidiaries pursuant to employee stock purchase plans or agreements approved by Borrower’s Board of Directors;

(g) Investments (including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and insettlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course of business; 

(h)Investments consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers who are not Affiliates, in the ordinary course of business; provided that this paragraph (i) shall not apply toInvestments of Borrower in any Subsidiary; and 

(i) Other Investments not otherwise permitted by Section 7.7 not exceeding $50,000 inthe aggregate outstanding at any time. 

“**Permitted Liens**” are: 

(a) Liens existing on the Effective Date and shown on the Perfection Certificate or arising under this Agreement and the other Loan Documents; 

(b) Liens for taxes, fees, assessments or other government charges or levies, either not delinquent or being contested in good faith and for whichBorrower maintains adequate reserves on its Books, if they have no priority over any of Bank’s Liens; 

(c) purchase money Liens(i) on Equipment acquired or held by Borrower incurred for financing the acquisition of the Equipment securing no more than $50,000 in the aggregate amount outstanding, or (ii) existing on Equipment when acquired, if the Lien isconfined to the property and improvements and the proceeds of the Equipment; 

(d) statutory Liens securing claims or demands ofmaterialmen, mechanics, carriers, warehousemen, landlords and other Persons imposed without action of such parties, provided, they have no priority over any of Bank’s Lien and the aggregate amount of such Liens does not at any time exceed$50,000; 

(e) Liens to secure payment of workers’ compensation, employment insurance, old-age pensions, social security and other likeobligations incurred in the ordinary course of business, provided, they have no priority over any of Bank’s Liens and the aggregate amount of the Indebtedness secured by such Liens does not at any time exceed $50,000; 

 

-24- 

(f) Liens incurred in the extension, renewal or refinancing of the indebtedness secured by Liensdescribed in (a) through (c), but any extension, renewal or replacement Lien must be limited to the property encumbered by the existing Lien and the principal amount of the indebtedness may not increase; 

(g) leases or subleases of real property granted in the ordinary course of business, and leases, subleases, non-exclusive licenses or sublicenses ofproperty (other than real property or intellectual property) granted in the ordinary course of Borrower’s business, if the leases, subleases, licenses and sublicenses do not prohibit granting Bank a security interest; 

(h) non-exclusive license of intellectual property granted to third parties in the ordinary course of business; 

(i) Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default under Section 8.4 or 8.7. 

“**Person**” is any individual, sole proprietorship, partnership, limited liability company, joint venture, company, trust,unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or government agency. 

“**Prime Rate**” is Bank’s most recently announced “prime rate,” even if it is not Bank’s lowest rate. 

“**Registered Organization**” is any “registered organization” as defined in the Code with such additions to such term as may hereafter be made 

**“Reserves”** means, as of any date of determination, such amounts as Bank may from time to time establish and revise in good faithreducing the amount of Advances, Letters of Credit and other financial accommodations which would otherwise be available to Borrower under the lending formulas: (a) to reflect events, conditions, contingencies or risks which, as determined byBank in good faith, do or may affect (i) the Collateral or any other property which is security for the Obligations or its value (including without limitation any increase in delinquencies of Accounts), (ii) the assets or business ofBorrower or any guarantor, or (iii) the security interests and other rights of Bank in the Collateral (including the enforceability, perfection and priority thereof); or (b) to reflect Bank’s good faith belief that any collateralreport or financial information furnished by or on behalf of Borrower or any guarantor to Bank is or may have been incomplete, inaccurate or misleading in any material respect; or (c) in respect of any state of facts which Bank determines ingood faith constitutes an Event of Default or may, with notice or passage of time or both, constitute an Event of Default. 

“**Responsible Officer**” is any of the Chief Executive Officer, President, Chief Financial Officer and Controller of Borrower. 

“**Revolving Line**” is an Advance or Advances in an aggregate amount of up to $1,500,000 outstanding at any time. 

**“Revolving Line Maturity Date”**is 364 days from the Effective Date. 

“**SecuritiesAccount**” is any “securities account” as defined in the Code with such additions to such term as may hereafter be made. 

“**Settlement Date**” is defined in Section 2.1.3. 

“**Subordinated Debt**” is indebtednessincurred by Borrower subordinated to all of Borrower’s now or hereafter indebtedness to Bank (pursuant to a subordination, intercreditor, or other similar agreement in form and substance satisfactory to Bank entered into between Bank and theother creditor), on terms acceptable to Bank. 

“**Subsidiary**” means, with respect to any Person, any Person of which morethan 50% of the voting stock or other equity interests is owned or controlled, directly or indirectly, by such Person or one or more Affiliates of such Person. 

**“Term Loan”**is a loan made by Bank pursuant to the terms of Section 2.1.5 hereof. 

 

-25- 

**“Term Loan Amount”**is an aggregate amount equal to $300,000 outstanding at any time.

**“Term Loan Maturity Date”**is the earliest of (a) the Revolving Line Maturity Date or (b) the occurrence of anEvent of Default. 

**“Term Loan Payment”**is defined in Section 2.1.5(b). 

“**Transfer**” is defined in Section 7.1. 

[Signature page follows.**]**

 

-26- 

**IN WITNESS WHEREOF**, the parties hereto have caused this Agreement to be executed as a sealedinstrument under the laws of the Commonwealth of Massachusetts as of the Effective Date. 

 
BORROWER:INTERNATIONAL ELECTRONICS, INC.By 
/s/ John Waldstein
Name: John WaldsteinTitle: CEOBANK: SILICON VALLEY BANKBy 
/s/ Jay T Tracy
Name: Jay T TracyTitle: Vice PresidentEffective Date: April 12, 2006
[Signature page to Loan and Security Agreement] 

**EXHIBIT A**

The Collateral consists of all of Borrower’s right, title and interest in and to the following personal property: 

All goods, Accounts (including health-care receivables), Equipment, Inventory, contract rights or rights to payment of money, leases, license agreements,franchise agreements, General Intangibles (except as provided below), commercial tort claims, documents, instruments (including any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts, fixtures, letters ofcredit rights (whether or not the letter of credit is evidenced by a writing), securities, and all other investment property, supporting obligations, and financial assets, whether now owned or hereafter acquired, wherever located; and 

all Borrower’s Books relating to the foregoing, and any and all claims, rights and interests in any of the above and all substitutions for,additions, attachments, accessories, accessions and improvements to and replacements, products, proceeds and insurance proceeds of any or all of the foregoing. 

Notwithstanding the foregoing, the Collateral does not include any of the following, whether now owned or hereafter acquired; any copyright rights, copyright applications, copyright registrations and like protectionsin each work of authorship and derivative work, whether published or unpublished, any patents, patent applications and like protections, including improvements, divisions, continuations, renewals, reissues, extensions, and continuations-in-part ofthe same, trademarks, service marks and, to the extent permitted under applicable law, any applications therefor, whether registered or not, and the goodwill of the business of Borrower connected with and symbolized thereby, know-how, operatingmanuals, trade secret rights, rights to unpatented inventions, and any claims for damage by way of any past, present, or future infringement of any of the foregoing; provided, however, the Collateral shall include all Accounts, license and royaltyfees and other revenues, proceeds, or income arising out of or relating to any of the foregoing. 

Pursuant to the terms of a certainnegative pledge arrangement with Bank, Borrower has agreed not to encumber any of its copyright rights, copyright applications, copyright registrations and like protections in each work of authorship and derivative work, whether published orunpublished, any patents, patent applications and like protections, including improvements, divisions, continuations, renewals, reissues, extensions, and continuations-in-part of the same, trademarks, service marks and, to the extent permitted underapplicable law, any applications therefor, whether registered or not, and the goodwill of the business of Borrower connected with and symbolized thereby, know-how, operating manuals, trade secret rights, rights to unpatented inventions, and anyclaims for damage by way of any past, present, or future infringement of any of the foregoing, without Bank’s prior written consent. 

 

1 

**EXHIBIT B**

**Transaction Report**

[EXCEL spreadsheet to be provided separately from lending officer.]

 

1 

**EXHIBIT C**

**PERFECTION CERTIFICATE**

 

2 

**EXHIBIT D**

**COMPLIANCE CERTIFICATE**

 

TO:
 
SILICON VALLEY BANK
  Date:                     
FROM:
 
INTERNATIONAL ELECTRONICS, INC.
  
 

The undersigned authorizedofficer of International Electronics, Inc. (“Borrower”) certifies that under the terms and conditions of the Loan and Security Agreement between Borrower and Bank (the “Agreement”), (1) Borrower is in complete compliance forthe period ending                      with all required covenants except as noted below, (2) there are no Events of Default,(3) all representations and warranties in the Agreement are true and correct in all material respects on this date except as noted below; provided, however, that such materiality qualifier shall not be applicable to any representations andwarranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all materialrespects as of such date, (4) Borrower, and each of its Subsidiaries, has timely filed all required tax returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owedby Borrower except as otherwise permitted pursuant to the terms of Section 5.9 of the Agreement, and (5) no Liens have been levied or claims made against Borrower or any of its Subsidiaries, if any, relating to unpaid employee payroll orbenefits of which Borrower has not previously provided written notification to Bank. Attached are the required documents supporting the certification. The undersigned certifies that these are prepared in accordance with generally GAAP consistentlyapplied from one period to the next except as explained in an accompanying letter or footnotes. The undersigned acknowledges that no borrowings may be requested at any time or date of determination that Borrower is not in compliance with any of theterms of the Agreement, and that compliance is determined not just at the date this certificate is delivered. Capitalized terms used but not otherwise defined herein shall have the meanings given them in the Agreement. 

**Please indicate compliance status by circling Yes/No under “Complies” column.**

 

**Reporting Covenant**
  
**Required**
  
**Complies**

Monthly financial statements with Compliance Certificate
  
Monthly within 30 days
  
Yes No

Annual financial statement (CPA Audited) + CC
  
FYE within 120 days
  
Yes No

10-Q, 10-K and 8-K
  
Within 5 days after filing with SEC
  
Yes No

A/R & A/P Agings
  
Monthly within 15 days
  
Yes No

 
]
The following Intellectual Property was registered after the Effective Date (if no registrations, state“None”)

 

 

**Financial Covenant**
  
**Required**
  **Actual**  **Complies**
**Maintain on a Monthly Basis:**
      
**Cash/Excess Availability**
  **$800,000 ($1,000,000 on and after August 31, 2006)**  **$****            **  **Yes No**
**Maximum Loss/Profitability: Trailing Three Month Period - tested monthly**
  **$                **  **$****            **  **Yes No**
 

3 

The following financial covenant analyses and information set forth in Schedule 1 attached hereto aretrue and accurate as of the date of this Certificate. 

The following are the exceptions with respect to the certification above: (If noexceptions exist, state “No exceptions to note.”) 

 

 

 

 

International Electronics, Inc.
 **BANK USE ONLY**
By:
 
 
 
Received by:
 
 

Name:
 
 
  
AUTHORIZED SIGNER

Title:
 
 
 
Date:
 
 
 
Verified:
 
 
  
AUTHORIZED SIGNER
 
Date:
 
 
  
Compliance Status:            Yes No

 

4 

**Schedule 1 to Compliance Certificate**

**Financial Covenants of Borrower**

Dated:                     

 
I.Cash/ Excess Availability (Section 6.9(a)) 
Required: $            

Actual: 

 

A.
  Aggregate value of the unrestricted cash and cash equivalents of Borrower  $            
B.
  Availability  $            
C.
  Total (line A plus line B)               
Is line C equal to or greater than$                    ? 

 

             No, not in compliance
              Yes, incompliance                
II. **Profitability** (Section 6.9(b)) 

Required: $            

Actual: 

 

A.
  Net Income/Loss  $            
Is line A equal to or greater than$                    ? 

 

             No, not in compliance
             Yes, incompliance                
 

5