Document:

exv10w1

 

Exhibit 10.1

LOAN AGREEMENT

THIS LOAN AGREEMENT dated as of July 26, 2007, is by and between IPG PHOTONICS CORPORATION, a
Delaware corporation with a principal place of business at 50 Old Webster Road, Oxford,
Massachusetts 01540 (the “Borrower”) and BANK OF AMERICA, N.A., a national banking
association with an office at 100 Front Street, Worcester, Massachusetts 01608 (the
“Bank”).

W I T N E S S E T H:

BACKGROUND. The Borrower has requested the Bank to lend it up to the sum of $25,000,000.00 on a
revolving line of credit basis, and the Bank is willing to do so upon the terms and conditions
hereinafter set forth.

NOW, THEREFORE, in consideration of the premises herein contained, and each intending to be legally
bound hereby, the parties agree as follows:

ARTICLE 1.0 DEFINITIONS

As used herein:

“Affiliate” means, as to any Person, each other Person that directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or under common control with, such
Person.

“Agreement” means this Loan Agreement (together with any and all schedules and exhibits
attached from time to time hereto), as the same may from time to time be amended or supplemented in
a writing signed by the parties hereto.

“Automatic Payments Deposit Account” means the Borrower’s checking account established with
the Bank as designated in writing from the Borrower, from which Automatic Payments may be deducted
by the Bank.

“Automatic Payments” means any and all interest or principal and interest installment
payments due under the Note.

“Bank” has the meaning ascribed to such term in the preamble of this Agreement.

“Beneficiary” means a beneficiary of a Commercial Letter of Credit issued pursuant to
Section 2.04 hereof.

“Borrower” has the meaning ascribed to such term in the preamble of this Agreement.

“Business Day” means any day other than a Saturday, Sunday or day which shall be in The
Commonwealth of Massachusetts a legal holiday or day on which banking institutions are

 

 

required or
authorized to close. If the Note or any payment thereunder or under this Agreement becomes due on
a day which is not a Business Day, the due date of the Note or payment shall be extended to the
next succeeding Business Day, and such extension of time shall be included in computing interest
and fees in connection with such payment.

“Cash Flow” means, for any applicable fiscal period, net income after income taxes,
less income or plus loss from discontinued operations and extraordinary items,
plus depreciation, depletion, amortization and other non-cash charges, plus
Interest on all Obligations, less dividends, withdrawals and other distributions,
less unfinanced capital expenditures in excess of $15,000,000.00 per year during each of
the first two years beginning with the date of this Agreement and in excess of $0 thereafter,
provided that if the Borrower shall raise additional equity from capital markets after the date of
this Agreement, an amount equal to the quotient of 60% of the net proceeds of the primary shares
offered by the Borrower divided by the remaining fiscal periods shall be excluded from the total of
unfinanced capital expenditures. For the purposes of this definition, the terms “depreciation” and
“amortization” shall have the meanings ascribed to them in accordance with GAAP.

“Closing” has the meaning ascribed such term in Section 3.01.

“Commercial Letter of Credit Fee” has the meaning ascribed to such term in Section
2.04(A)(3).

“Commercial Letters of Credit” means any and all commercial or standby letters of credit or
bank guarantees that may be issued by the Bank from time to time to third parties for the benefit
of the Borrower pursuant to Section 2.04 of this Agreement.

“Debt Service Coverage Ratio” means, for any applicable fiscal period, the ratio,
calculated on a consolidated basis, of (A) Cash Flow divided by (B) required principal payments on
long term debt, plus partial payments of Subordinated Indebtedness that are not required or
scheduled to be made, plus Interest paid or to be paid for such period less
payments made to fully retire Subordinated Indebtedness if paid in cash on the Borrower’s balance
sheet at such time or raised through capital market transactions or financing furnished by the
Bank.

“EBITDA” means, for any applicable fiscal period, calculated on a consolidated basis, net
income less income or plus loss from discontinued operations and extraordinary
items, plus income taxes, plus Interest plus depreciation, depletion,
amortization and other non-cash charges, all as determined in accordance with GAAP.

“Event of Default” has the meaning provided in Section 6.01.

“Facility Fee” has the meaning ascribed to such term in Section 2.07.

“Financial Statements” means the financial statements described on Exhibit 1.0(A)
attached to this Agreement.

“Foreign Borrowers” means each and every of IPG Japan, IPG India, IPG Italy, IPG Korea and
IPG China.

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“Foreign Commitments” means $12,000,000.00 of credit under each and every credit facility
established or to be established by the Bank or its affiliates for the benefit of the Foreign
Borrowers.

“Funded Debt” means the sum of all Indebtedness for borrowed money of the Borrower on a
consolidated basis (including, without limitation, all Obligations) net of inter-company
indebtedness.

“GAAP” means, generally accepted accounting principles applied consistently, with such
changes or modifications thereto as may be approved in writing by the Bank.

“Guaranty” means a Continuing Guaranty in the form of Exhibit 1.0(B) attached
hereto with respect to each of the Foreign Borrowers or a Subsidiary on whose behalf the Bank is
issuing a Commercial Letter of Credit, such Continuing Guaranty to be executed by the Borrower and
delivered to the Bank contemporaneously with the establishment of each credit facility constituting
a part of the Foreign Commitments or issuance of the applicable Commercial Letter of Credit.

“Indebtedness” means, as to the Borrower or any Subsidiary, all items of indebtedness,
obligation or liability whether joint or several, matured or unmatured, liquidated or unliquidated,
direct or contingent, including without limitation:

     (A) All indebtedness guarantied, directly or indirectly, in any manner, or endorsed (other
than for collection or deposit in the ordinary course of business) or discounted with recourse;

     (B) All indebtedness in effect guarantied, directly or indirectly, through agreements,
contingent or otherwise: (1) To purchase such indebtedness; or (2) to purchase, sell or lease (as
lessee or lessor) property, products, materials, or supplies or to purchase or sell services,
primarily for the purpose of enabling the debtor to make payment of such indebtedness or to insure
the owner of the indebtedness against loss; or (3) to supply funds to, or in any other manner
invest in, the debtor;

     (C) All indebtedness secured by (or for which the holder of such indebtedness has a right,
contingent or otherwise, to be secured by) any mortgage, deed of trust, pledge, lien, security
interest or other charge or encumbrance upon property owned or acquired subject thereto, whether or
not the liabilities secured thereby have been assumed; and

     (D) All indebtedness incurred as the lessee of goods or services under leases that, in
accordance with GAAP, should not be reflected on the lessee’s balance sheet.

“Intellectual Property” means trademarks, service marks, trade names, trade styles, logos,
goodwill, trade secrets, patents, and licenses acquired under any statutory, common law or
registration process in any state or nation at any time, or under any agreement executed with any
person or entity at any time. The term “license” refers not only to rights granted by
agreement

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from the owner of patents, trade marks, service marks and the like, but also to rights
granted by a franchiser under a franchise or similar agreement. The foregoing enumeration is not
intended as a limitation of the meaning of the word “license.”

“IPG China” shall mean IPG (BEIJING) FIBER LASER TECHNOLOGY CO., LTD., a Chinese
corporation with a principal place of business at A10 Long Qing St. No. 2 Building, Beijing Eco. &
Tech. Zone, Beijing, China.

“IPG Germany” shall mean IPG LASER GmbH, a German company with a principal place of
business at Siemensstrasse 7, D-57299 Burbach, Germany.

“IPG India” shall mean IPG PHOTONICS (INDIA) PVT. LTD., an Indian corporation with a
principal place of business at Tirumala Tech Park, No. 27, 1st Cross, 2nd
Phase, Doddanekundi Industrial Area, Mahadevapura Post, Bangalore 560 048, India.

“IPG Italy” shall mean IPG FIBERTECH S.r.l., an Italian corporation with a principal place
of business at Via Pisacone, 46, 20025 Legnano (MI), Italy.

“IPG Japan” shall mean IPG PHOTONICS JAPAN LIMITED, a Japanese corporation with a principal
place of business at 7-16, Shirokane 2-Chome, Minato-ku, Tokyo 108-0072, Japan.

“IPG Korea” shall mean IPG PHOTONICS (KOREA) LTD., a Korean corporation with a principal
place of business at Daega Bld. 3rd Floor, 641-11 Bongmyung-Dong, Yuseong-Gu, Daejon,
Korea.

“IPG Russia” shall mean IRE – POLUS CO., a Russian company with a principal place of
business at Vvedenskogo Square 1, Fryazina, Moscow 1411190, Russia.

“Interest” means all interest expense and letter of credit fees due during any fiscal
period of the Borrower, calculated in accordance with GAAP.

“Laws” means all ordinances, statutes, rules, regulations, orders, injunctions, writs or
decrees of any government or political subdivision or agency thereof, or of any court or similar
entity established by any thereof.

“Loan” means the revolving credit loan facility evidenced by the Note.

“Loan Documents” means each and every of this Agreement and the Note and each other
document executed or delivered to the Bank in connection with the Loan.

“Note” means the Revolving Credit Note referred to in Section 2.03, as supplemented,
amended or replaced (whether pursuant to Section 2.02(B)(3) or otherwise).

“Obligations” is intended to be used in its most comprehensive sense and means each and
every obligation of the Borrower to the Bank of every kind and description, whether direct or
indirect, absolute or contingent, primary or secondary, joint or several, due or to be come due,
now

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existing or hereafter arising or acquired and whether by way of loan, guaranty, discount,
letter of credit, lease or otherwise, including without limitation, the following obligations:

     (A) To pay the principal of, and interest on, the Note in accordance with the terms thereof
and to satisfy all other liabilities to the Bank, whether hereunder or otherwise, whether now
existing or hereafter incurred, matured or unmatured, direct or contingent, joint or several,
including any extensions, modifications, renewals thereof and substitutions therefor.

     (B) To repay to the Bank all amounts advanced by the Bank hereunder or otherwise on behalf of
the Borrower, including, but without limitation, advances for principal or interest payments to
prior secured parties, mortgagees, or lienors, or for taxes, levies, insurance, rent, or repairs
to, or maintenance or storage of, any collateral;

     (C) To perform and observe all covenants, agreements and undertakings of the Borrower pursuant
to the terms and conditions of this Agreement and the Note or any other agreement or instrument now
or hereafter delivered to the Bank by the Borrower;

     (D) All obligations under any interest rate swap agreement, foreign exchange contract, any
cap, floor or hedging agreement or other similar agreement, or other financial agreement or
arrangement designed to protect the Borrower against fluctuations in any interest rate charged by
the Bank under the Note or otherwise, including any obligations of the Borrower arising out of or
in connection with any Automated Clearing House (“ACH”) Agreement relating to the
processing of ACH transactions, together with all fees, expenses, charges and other amounts owing
by or chargeable to the Borrower under any ACH Agreement;

     (E) All obligations to reimburse the Bank, on demand, in connection with overdrafts and other
amounts due to the Bank under any existing or future agreements relating to cash management
services; and

     (F) All obligations to reimburse the Bank, on demand, for all of the Bank’s expenses and
costs, including without limitation the reasonable fees and expenses of its counsel, in connection
with the preparation, administration, amendment, modification, or enforcement of this Agreement and
the documents required hereunder or related hereto, including, without limitation, any proceeding
brought, or threatened, to enforce payment of any of the obligations referred to in the foregoing
Paragraphs (A) through (E).

“Permitted International Borrowings” means up to $15,000,000.00 of credit to be extended to
IPG Germany and IPG Russia under loans made outside the United States of America by foreign banking
institutions.

“Permitted Liens” means:

     (A) Liens for taxes, assessments or similar charges, incurred in the ordinary course of
business, that are not yet due and payable;

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     (B) Pledges or deposits made in the ordinary course of business to secure payment of worker’s
compensation, or to participate in any fund in connection with worker’s compensation, unemployment
insurance, old-age pensions or other social security programs;

     (C) Liens of mechanics, materialmen, repairmen, warehousemen, carriers or other like liens,
securing obligations incurred in the ordinary course of business that are not yet due and payable;

     (D) Good faith pledges or deposits not exceeding an aggregate amount of $500,000.00 made in
the ordinary course of business to secure performance of bids, tenders, contracts (other than for
the repayment of borrowed money) or leases, not in excess of thirty percent (30%) of the aggregate
amount due thereunder, or to secure statutory obligations, or surety, appeal, indemnity,
performance or other similar bonds required in the ordinary course of business;

     (E) Encumbrances consisting of zoning restrictions, easements or other restrictions on the use
of real property, none of which materially impairs the use of such property by the Borrowers in the
operation of their business, and none of which is violated in any material respect by existing or
proposed structures or land use;

     (F) Liens in favor of the Bank;

     (G) Existing liens set forth or described on Exhibit 4.01(I), attached hereto and made
a part hereof;

     (H) Purchase money security interests granted to secure the purchase price of assets, the
purchase of which does not violate this Agreement or any instrument required hereunder; and

     (I) Liens securing Indebtedness permitted by this Agreement; and

     (J) The following, if the validity or amount thereof is being contested in good faith by
appropriate and lawful proceedings, so long as levy and execution thereon have been stayed and
continue to be stayed and they do not, in the aggregate, materially detract from the value of the
property of the Borrower or any Subsidiary, or materially impair the use thereof in the operation
of its business:

     (1) Claims or liens for taxes, assessments or charges due and payable and subject to
interest or penalty;

     (2) Claims, liens and encumbrances upon, and defects of title to, real or personal
property, including any attachment of personal or real property or other legal process prior
to adjudication of a dispute on the merits;

     (3) Claims or liens of mechanics, materialmen, warehousemen, carriers or other like
liens; and

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     (4) Adverse judgments on appeal.

“Person” means any individual, corporation, partnership, association, joint-stock company,
trust, unincorporated organization, joint venture, court or government, or political subdivision or
agency thereof.

“Records” means correspondence, memoranda, tapes, discs, papers, books and other documents,
or transcribed information of any type, whether expressed in ordinary or machine readable language.

“Revolving Credit Loan Commitment” means a revolving line of credit facility up to
$20,000,000.00, less the Foreign Commitments, subject to increase in accordance with the provisions
of and as more fully set forth in Section 2.02 of this Agreement.

“Revolving Credit Outstandings” means, at any time, the sum of (i) the aggregate
outstanding principal balance of the Loan at such time plus (ii) the aggregate maximum amount that
Beneficiaries may draw on Commercial Letters of Credit at such time.

“Revolving Credit Termination Date” means June 30, 2010 or such other date as is agreed to
by the Bank in a written instrument executed by a duly authorized officer of the Bank, provided
that the Borrower may elect to terminate this Agreement upon at least fifteen (15) days prior
written notice to the Bank and full, final and indefeasible payment of all the then outstanding
Obligations.

“Subordinated Indebtedness” means all Indebtedness incurred at any time by the Borrower or
any Subsidiary, the repayment of which is subordinated to the Loan in form and manner satisfactory
to the Bank. All existing Subordinated Indebtedness is so specified in Exhibit 1.0(C).

“Subordinated Notes” means each and every of the notes aggregating $20,000,000.00 issued to
the noteholders set forth on Exhibit 1.0(C).

“Subsidiary” means any Affiliate that is directly, or indirectly through one or more
intermediaries, controlled by the Borrower or not less than 50% of the voting capital stock of
which is owned, directly or through one or more intermediaries, by the Borrower.

“$” or “dollars” denotes lawful currency of the United States of America.

Accounting. Accounting terms used and not otherwise defined in this Agreement have the meanings
determined by, and all calculations with respect to accounting or financial matters unless
otherwise provided herein shall be computed in accordance with, GAAP.

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ARTICLE 2.0 THE CREDIT FACILITIES

2.01 Advances on the Loan.

All advances to or for the benefit of the Borrower will be charged to loan accounts established in
the name of the Borrower on the Bank’s books.

2.02 General Terms of the Loan.

     (A) Subject to the terms hereof, the Bank will lend the Borrower, from time to time until the
Revolving Credit Termination Date, such sums as the Borrower may request (but in the case of LIBOR
Rate Loans, at least $100,000.00) by reasonable same day notice to the Bank, received by the Bank
not later than 11:00 A.M. of such day. The Borrower may borrow, repay without penalty or premium
and reborrow hereunder, from the date of this Agreement until the Revolving Credit Termination
Date, either the full amount of the Revolving Credit Loan Commitment or any lesser sum which is at
least $100,000.00. The Revolving Credit Outstandings shall at no time exceed the Revolving Credit
Loan Commitment, and if, at any time, an excess shall for any reason exist, the full amount of such
excess, together with accrued and unpaid interest thereon as herein provided, shall be immediately
due and payable in full.

     (B) The Borrower may elect to increase availability under the Revolving Credit Loan Commitment
to $25,000,000.00 in increments of $2,500,000.00 each, upon thirty (30) days prior written notice
by the Borrower to the Bank, such increase to be subject to and conditioned upon the following:

     (1) no Event of Default shall have occurred, or with the passage of time would occur,
as of the date of the Borrower’s notice to the Bank pursuant to this Section 2.02(B) or as
of the effective date of such increase;

     (2) the Borrower shall have provided the Bank with a compliance certificate in form and
content satisfactory to the Bank; and

     (3) the Borrower shall have executed and delivered to the Bank a Revolving Credit Note
in the form of Exhibit 2.03 attached hereto but in the applicable face amount in
substitution for the original Note.

2.03 The Note.

The Revolving Credit Loan Commitment shall be evidenced by a Revolving Credit Note due and payable
on the Revolving Credit Termination Date, in the form attached hereto as Exhibit 2.03.

2.04 Commercial Letters of Credit

     (A) From time to time prior to the Revolving Credit Termination Date, the Bank shall issue
Commercial Letters of Credit on account of the Borrower or a Subsidiary subject to the following
conditions:

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     (1) Any such Commercial Letters of Credit shall be issued as a trade letter of credit,
standby letter of credit or bank guarantee only to (i) a supplier or to a seller of goods
which purchased goods will become a part of the Inventory or other assets of the Borrower,
(ii) governmental authorities or bonding companies to secure statutory obligations of the
Borrower, including, without limitation, worker’s compensation, disability, unemployment
compensation or environmental Laws, or (iii) a customer who is purchasing goods or services
from the Borrower or a Subsidiary;

     (2) No Beneficiary shall be an Affiliate (excluding a Subsidiary);

     (3) The Borrower agrees to pay to the Bank a quarterly fee with respect to each
Commercial Letter of Credit payable at the end of each calendar quarter (in each case, a
“Commercial Letter of Credit Fee”) in accordance with Exhibit 2.04(A)(3)
attached hereto. Whenever an Event of Default exists and is outstanding, the Commercial
Letter of Credit Fee hereunder shall, at the option of the Bank, be increased to a per annum
fee which is two percent (2%) per annum greater that that fee which would otherwise be
applicable hereunder;

     (4) No such Commercial Letter of Credit shall have an expiration date that is later
than the Revolving Credit Termination Date unless otherwise agreed to by the Bank, excepting
only Commercial Letters of Credit in amounts acceptable to the Bank, which may have
expiration date(s) no later than one (1) year beyond the Revolving Credit Termination Date;

     (5) Each such Commercial Letter of Credit shall be issued pursuant to such agreements
and upon such terms and conditions as shall be required by the Bank;

     (6) No Event of Default shall have occurred hereunder at the time of issuance of such
Commercial Letter of Credit;

     (7) The aggregate face amount of all Commercial Letters of Credit at any time
outstanding shall not exceed the amount available under the Revolving Credit Loan Commitment
at such time; and

     (8) In the case of a Commercial Letter of Credit issued on behalf of a Subsidiary, the
Borrower has first executed and delivered to the Bank a Guaranty with respect to such
Subsidiary.

     (B) The aggregate face amount of all Commercial Letters of Credit at any time outstanding
shall be included in the amount of the Revolving Credit Outstandings.

2.05 Interest.

     (A) Indebtedness due under the Note shall bear interest at the rates and calculated in the
manner set forth in the Note.

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     (B) All agreements between Borrower and the Bank are hereby expressly limited so that in no
contingency or event whatsoever, whether by reason of acceleration of maturity of the indebtedness
evidenced hereby or otherwise, shall the amount paid or agreed to be paid to the Bank for the use
or the forbearance of the indebtedness evidenced hereby exceed the maximum permissible under
applicable law. As used herein, the term “applicable law” means the law in effect as of
the date hereof provided, however that in the event there is a change in the law which results in a
higher permissible rate of interest, then the Note shall be governed by such new law as of its
effective date. In this regard, it is expressly agreed that it is the intent of Borrower and Bank
in the execution, delivery and acceptance of the Note to contract in strict compliance with the
laws of The Commonwealth of Massachusetts from time to time in effect. If, under or from any
circumstances whatsoever, fulfillment of any provision hereof, of the Note or of any of the other
Loan Documents at the time of performance of such provision shall be due, shall involve
transcending the limit of such validity prescribed by applicable law, then the obligation to be
fulfilled shall automatically be reduced to the limits of such validity, and if under or from any
circumstances whatsoever the Bank should ever receive as interest an amount which would exceed the
highest lawful rate, such amount which would be excessive interest shall be applied to the
reduction of the principal balance evidenced hereby and not to the payment of interest. This
provision shall control every other provision of all agreements between the Borrower and the Bank.

2.06 Payment to the Bank.

The Bank shall periodically send the Borrower statements of all amounts due on the Loan, which
statements shall be considered correct and conclusively binding on the Borrower unless the Borrower
notifies the Bank to the contrary within thirty (30) days of its receipt of any statement that it
deems to be incorrect. Notwithstanding the foregoing, any errors made by the Bank shall be
corrected if brought to the attention of the Bank no later than ninety (90) days after termination
of the Loan. At its sole discretion, the Bank may charge against any deposit or other account of
the Borrower all or any part of any amount due with respect to the Obligations.

2.07 Facility Fee.

The Borrower shall pay to the Bank, quarterly in arrears, as of the last day of each and every
calendar quarter, a fee calculated at an annual rate based upon a 360-day year for the actual
number of days outstanding, for each quarter, based on a percentage of the average unused portion
of the Revolving Credit Loan Commitment (the “Facility Fee”). Notwithstanding the
foregoing, the percentage to be used in calculation of the Facility Fee shall increase or decrease
based upon the ratio of Funded Debt to EBITDA, as follows:

	 	 	 	 	 
	Ratio of Funded Debt to EBITDA	 	Unused Facility Fee
	less than 1.0 to 1.0
	 	 	.15	%
	 
	 	 	 	 
	equal
to or greater than 1.0 to 1.0,
but less than 1.5 to 1.0
	 	 	.20	%
	 
	 	 	 	 
	equal to or greater than 1.5 to 1.0,
but less than 2.0 to 1.0
	 	 	.25	%

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ARTICLE 3.0 CONDITIONS PRECEDENT

The obligation of the Bank to make the Loan is subject to the following conditions precedent:
3.01 Documents Required for the Closing.

The Borrower shall have delivered to the Bank, prior to the initial disbursement of the Loan (the
“Closing”), the following:

     (A) The Note, duly executed by the Borrower, in the form attached hereto as Exhibit
2.03;

     (B) A certificate (dated the date of the Closing) of the corporate secretary or assistant
secretary, as the case may be, of the Borrower, certifying as to:

     (1) the incumbency and signatures of the officer(s) signing this Agreement, the Note,
the other Loan Documents and each other document to be delivered pursuant hereto,

     (2) the resolutions of the board of directors authorizing the execution, delivery and
performance of this Agreement, the Note, the other Loan Documents, and each other document
to be delivered pursuant hereto,

     (3) the By-Laws;

     (C) With respect to the Borrower, certificates of tax good standing and corporate good
standing and legal existence, dated as of the most recent date practicable, issued by the Delaware
Department of Revenue and Secretary of State of Delaware as to the tax good standing and the legal
existence and corporate good standing of the Borrower and a certificate of registration as a
foreign corporation with The Commonwealth of Massachusetts;

     (D) A copy, certified as of the most recent date practicable by the Secretary of the
applicable state or nation of incorporation, of the charter documents of the Borrower and all
amendments thereto, together with a certificate (dated the date of the Closing) of the corporate
secretary or assistant secretary, as the case may be, of the Borrower to the effect that such
charter documents have not been further amended since the date of the aforesaid certification of
the Secretary of the State of Delaware;

     (E) A written opinion or opinions of legal counsel for the Borrower, dated the date of the
Closing and addressed to the Bank, in form satisfactory to the Bank and its counsel;

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     (F) A certificate, dated the date of the Closing, signed by the president, a vice president,
the treasurer or an assistant treasurer, the chief executive officer or the chief financial
officer, of the Borrower and to the effect that:

     (1) The representations and warranties set forth in Section 4.01 are true as of the
date of the Closing; and

     (2) No Event of Default hereunder, and no event which, with the giving of notice or
passage of time or both, would become such an Event of Default, has occurred as of such
date; and

     (G) Copies of all documents evidencing the terms and conditions of any debt specified as
Subordinated Indebtedness on Exhibit 1.0(C).

3.02 Documents Required for Subsequent Disbursements.

At the time of, and as a condition to, any disbursement of any part of the Loan to be made by the
Bank subsequent to the Closing, the Bank may require the Borrower to deliver to the Bank a
certificate, dated the date on which any such disbursement is to be made, signed by the president,
a vice president, treasurer, chief executive officer, chief financial officer, or other duly
authorized officer of the Borrower, or by a vice president, treasurer or other duly authorized
officer of the Borrower, and to the effect that:

     (A) As of the date thereof, no Event of Default has occurred and is continuing, and no event
has occurred and is continuing that, but for the giving of notice or passage of time or both, would
be an Event of Default; and

     (B) Each of the representations and warranties contained in Section 4.01 is true and correct
in all material respects as if made on and as of the date of such disbursement (except for such
representations and warranties made as of a particular date).

3.03 Certain Events.

At the time of, and as a condition to, the Closing and each disbursement of any part of the Loan to
be made by the Bank at or subsequent to the Closing:

     (A) No Event of Default shall have occurred and be continuing, and no event shall have
occurred and be continuing that, with the giving of notice or passage of time or both, would be an
Event of Default; and

     (B) All of the Loan Documents shall have remained in full force and effect.

3.04 Legal Matters.

At the time of the Closing, all legal matters incidental thereto shall be satisfactory to Bowditch
& Dewey, LLP, legal counsel to the Bank.

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ARTICLE 4.0 REPRESENTATIONS AND WARRANTIES

4.01 Original.

To induce the Bank to enter into this Agreement, the Borrower represents and warrants to the Bank
as follows:

     (A) The Borrower is a corporation duly organized, validly existing, and in good standing under
the laws of the State of Delaware; the Borrower has no Subsidiaries other than the Subsidiaries
named in Exhibit 4.01(A); each Subsidiary is a corporation duly organized, validly existing
and in good standing under the laws of its state or nation of incorporation, all as set forth in
Exhibit 4.01(A); the Borrower and the Subsidiaries have the lawful power to own their
properties and to engage in the businesses they conduct, and each is duly qualified and in good
standing as a foreign corporation in the jurisdictions wherein the nature of the business
transacted by it or property owned by it makes such qualification necessary (except where failure
to so qualify would not have a material adverse effect on the business, assets or financial
condition of the Borrower and its Subsidiaries taken as a whole);

     (B) Neither the Borrower nor any Subsidiary is directly or indirectly controlled by, or acting
on behalf of, any Person which is an “Investment Company,” within the meaning of the
Investment Company Act of 1940, as amended;

     (C) Except as disclosed in Exhibit 4.01(C) attached hereto, neither the Borrower nor
any Subsidiary is in default with respect to any of its existing Indebtedness in any material
respect, and the making and performance of this Agreement, the Note and the other Loan Documents
will not (immediately or with the passage of time, the giving of notice, or both):

     (1) Violate charter documents, or the By-Laws of the Borrower or any Subsidiary, or
violate any Laws or result in a default, in any material respect, under any contract,
agreement or instrument to which the Borrower or any Subsidiary is a party or by which the
Borrower or any Subsidiary or its property is bound; or

     (2) Result in the creation or imposition of any security interest in, or lien or
encumbrance upon, any of the assets of the Borrower or any Subsidiary except in favor of the
Bank;

     (D) The Borrower has the power and authority to enter into and perform this Agreement, the
Note and the other Loan Documents, and to incur the obligations herein and therein provided for,
and has taken all actions necessary to authorize the execution, delivery and performance of this
Agreement, the Note and the other Loan Documents;

     (E) This Agreement, the Note and the other Loan Documents are, or when delivered will be,
valid, binding and enforceable under applicable law in accordance with their respective terms,
except as may be limited by applicable bankruptcy, insolvency, reorganization or similar

13

 

laws
affecting creditors’ rights generally and by general equitable principles (regardless of whether
considered in a proceeding at law or in equity);

     (F) Except as disclosed in Exhibit 4.01(F) hereto, there is no pending order, notice,
claim, litigation, proceeding or investigation known to the Borrower against or affecting the
Borrower or any Subsidiary, whether or not covered by insurance, that would in the aggregate
involve the payment of $100,000.00 or more or would otherwise materially or adversely affect the
financial condition or business prospects of the Borrower or any Subsidiary, considered as a whole,
if adversely determined;

     (G) The Borrower and each Subsidiary has good and marketable title to all of its material
assets, none of which is subject to any security interest, encumbrance or lien, or claim of any
third Person except for Permitted Liens;

     (H) The Financial Statements, including any schedules and notes pertaining thereto, and the
management prepared financial statements for the fiscal period ending March 31, 2007 have been
prepared in accordance with GAAP, and fairly present the financial condition of the Borrower and
the Subsidiaries at the dates thereof and the results of operations for the periods covered
thereby, and there have been no material adverse changes in the financial condition or business of
the Borrower and the Subsidiaries, considered as a whole, from March 31, 2007 to the date hereof;

     (I) As of the date hereof, neither the Borrower nor any of the Subsidiaries has any material
Indebtedness of any nature, including, but without limitation, liabilities for taxes and any
interest or penalties relating thereto except to the extent reflected (in a footnote or otherwise)
and reserved against in the consolidated balance sheet dated March 31, 2007, included in the
Financial Statements or as disclosed in, or permitted by, this Agreement; and the Borrower does not
know or have reasonable ground to know of any basis for the assertion against any of the Borrower
or any Subsidiary of any such claim or litigation based upon such Indebtedness as of the date of
the Closing except as disclosed on Exhibit 4.01(I) or otherwise disclosed to the Bank in
writing;

     (J) Except as otherwise permitted herein or as would not materially interfere with the conduct
of the business of the Borrower and its Subsidiaries, considered as a whole, the Borrower has filed
all tax returns or extensions to file tax returns in applicable jurisdictions, and other reports
required by any applicable Laws to have been filed prior to the date hereof, have paid or caused to
be paid all taxes, assessments and other governmental charges that are due and payable prior to the
date hereof, and have made adequate provision for the payment of such taxes, assessments or other
charges accruing but not yet payable; the Borrower has no knowledge of any deficiency or additional
assessment in a materially important amount in connection with any taxes, assessments or charges
not provided for on its books;

     (K) Except to the extent that the failure to comply would not materially interfere with the
conduct of the business of the Borrower and its Subsidiaries, considered as a whole, each of the
Borrower and the Subsidiaries have complied with all applicable Laws with respect to (1) any
restrictions, specifications or other requirements pertaining to products that it manufactures

14

 

or
sells or to the services it performs; (2) the conduct of its business; and (3) the use, maintenance
and operation of the real and personal properties owned or leased by it in the conduct of its
business;

     (L) No representation or warranty by or with respect to the Borrower or any Subsidiary
contained herein or in any certificate or other document furnished by the Borrower or any
Subsidiary pursuant hereto contains any untrue statement of a material fact or omits to state a
material fact necessary to make such representation or warranty not misleading in light of the
circumstances under which it was made;

     (M) Each consent, approval or authorization of, or filing, registration or qualification with,
any Person required to be obtained or effected by the Borrower or any Subsidiary in connection with
the execution and delivery of this Agreement, the Note and the other Loan Documents or the
undertaking or performance of any obligation hereunder or thereunder, has been duly obtained or
effected;

     (N) Except as set forth in Exhibit 4.01(N) and except to the extent that the failure
to comply would not materially interfere with the conduct of the business of the Borrower or any
Subsidiary, considered as a whole, to the best knowledge of the Borrower, neither the Borrower, nor
any Person for whose conduct the Borrower is responsible, owns, occupies or operates, or has,
within the fifteen (15) year period immediately preceding the date of this Agreement, owned,
occupied or operated a site or vessel on which has been stored any hazardous material or oil,
without compliance with all statues, regulations, ordinances, directives, and orders of every
federal, state, municipal and other governmental authority which has or claims jurisdiction
relative thereto (the terms “site,” “vessel” and “hazardous material,”
respectively, as used herein include the definitions of those terms in Massachusetts General Laws,
Ch. 21E); neither the Borrower, nor any Person for whose conduct the Borrower is responsible, has
ever disposed of, transported or arranged for the transport of any hazardous material or oil
without compliance with all such statutes, regulations, ordinances, directives and orders in all
material respects; and neither the Borrower, nor any Person for whose conduct the Borrower is
responsible, has ever been legally responsible for any releases or threat of release of any
hazardous material or oil;
received notification of any potential or known release or threat of release of any hazardous
material or oil from any site or vessel owned, occupied or operated by the Borrower, or any Person
for whose conduct the Borrower is responsible, or of the incurrence of any expense or loss in
connection with the assessment, containment or removal of any release or threat of release of any
hazardous material or oil from any such site or vessel;

     (O) The Borrower has not made any agreement or taken any action which may cause anyone to
become entitled to a commission or finder’s fee as a result of or in connection with the making of
the Loan;

     (P) The federal tax returns of the Borrower and all Subsidiaries for all years of operation,
including the tax years of the Borrower and all Subsidiaries most recently ended prior to the date
of this Agreement, have been filed with the Internal Revenue Service and have not been challenged
or an extension for filing has been obtained; and

15

 

     (Q) Any Employee Pension Benefit Plans, as defined in the Employee Retirement Income Security
Act of 1974, as amended (“ERISA”), of the Borrower and each Subsidiary meet, as of the date
hereof, the minimum funding standards of 29 U.S.C.A. 1082 (Section 302 of ERISA), and no Reportable
Event or Prohibited Transaction, as defined in ERISA, has occurred with respect to any Employee
Benefit Plans, as defined in ERISA, of the Borrower or any Subsidiary.

4.02 Survival.

All of the representations and warranties set forth in Section 4.01 shall survive until all
Obligations are satisfied in full and there remain no outstanding commitments hereunder.

ARTICLE 5.0 COVENANTS OF THE BORROWER

5.01 Affirmative Covenants.

The Borrower does hereby covenant and agree with the Bank that, so long as any of the Obligations
remain unsatisfied or any commitments hereunder remain outstanding, it will comply, or if
appropriate cause the Subsidiaries to comply, at all times with the following affirmative
covenants:

     (A) The Borrower will use the proceeds of the Loan only for the purposes set forth in
Exhibit 5.01(A), and will furnish the Bank such evidence as it may reasonably require with
respect to such use;

     (B) The Borrower will furnish or otherwise make available to the Bank:

     (1) As soon as available, but in any event within forty-five (45) days after the close
of each quarterly accounting period in each fiscal year: (a) a consolidated statement of
cash flows of the Borrower and the Subsidiaries for such quarter; (b) a consolidated
income statement of the Borrower and the Subsidiaries for such quarters; and (c) a
consolidated balance sheet of the Borrower and the Subsidiaries as of the end of such
quarter-all in reasonable detail, subject to normal year-end audit adjustments and certified
by the president or principal financial officer of the Borrower to have been prepared in
accordance with GAAP;

     (2) As soon as available, but in any event within one hundred twenty (120) days after
the close of each fiscal year: (a) a consolidated statement of stockholders’ equity; (b) a
consolidated statement of changes of cash flows of the Borrower and the Subsidiaries for
such fiscal year; (c) a consolidated income statement of the Borrower and the Subsidiaries
for such fiscal year; and (d) a consolidated balance sheet of the Borrower and the
Subsidiaries as of the end of such fiscal year-all such statements to be in reasonable
detail, including all supporting schedules and comments; the consolidated statements and
balance sheets to be audited by an independent registered public accountant selected by
Borrower and acceptable to the Bank, and certified by such accountants to have been prepared
in accordance with GAAP and to present fairly the

16

 

financial position and results of
operations of the Borrower and the Subsidiaries; the Bank shall have the right, from time to
time, to discuss the affairs of the Borrower directly with such independent registered
public accountants after notice to the Borrower and opportunity of the Borrower to be
represented at any such discussions;

     (3) Contemporaneously with each quarterly and year-end financial report required by the
foregoing paragraphs (1) and (2), a certificate of the president or principal financial
officer of the Borrower stating that he has individually reviewed the provisions of this
Agreement and that a review of the activities of the Borrower during such year or quarterly
period, as the case may be, has been made by him or under his supervision, with a view to
determining whether the Borrower has fulfilled all obligations under this Agreement, and
that, to the best of his knowledge, the Borrower has observed and performed each undertaking
contained in this Agreement and is not in default in the observance or performance of any of
the provisions hereof or, if the Borrower shall be in default, specifying all such defaults
and events of which he may have knowledge;

     (4) Promptly after the sending or making available or filing of the same, copies of all
reports, proxy statements, and financial statements that the Borrower sends or make
available to its stockholders and all registration statements and reports that the Borrower
files with the Securities and Exchange Commission or any successor Person;

     (5) Upon the Bank’s reasonable request, copies of any and all material documents
relating to the business of the Borrower;

     (C) The Borrower will maintain its material operating physical assets in good condition and
repair (normal wear and tear excepted);

     (D) The Borrower and the Subsidiaries will maintain, or cause to be maintained, public
liability, fire and casualty insurance that are of a character usually insured by corporations
engaged in the same or similar businesses;

     (E) The Borrower and the Subsidiaries will pay or cause to be paid when due, all taxes,
assessments, charges or levies imposed upon them or on any of their property or with respect to
which any of them is required to withhold and pay except where contested in good faith by
appropriate proceedings with adequate reserves therefor having been set aside on its books;
provided, however, that the Borrower and each Subsidiary shall pay or cause to be paid all such
taxes, assessments, charges or levies forthwith whenever foreclosure on any lien that may have
attached (or security therefor) appears imminent;

     (F) The Borrower will maintain:

     (1) A Debt Service Coverage Ratio of at least 1.50:1.00, to be tested on a rolling four
quarters basis at the end of each fiscal quarter, commencing with the fiscal quarter ending
September 30, 2007; and

17

 

     (2) A ratio of Funded Debt to EBITDA not exceeding 2.00:1.00, to be tested on a rolling
four quarters basis at the end of each fiscal quarter, commencing with the fiscal quarter
ending September 30, 2007;

     (G) The Borrower and the Subsidiaries will each, when requested to do so, make available for
inspection during normal business hours by duly authorized representatives of the Bank any of its
books and records and will furnish the Bank any information regarding its business affairs and
financial condition within a reasonable time after written request thereof;

     (H) The Borrower and the Subsidiaries will each take all necessary steps to preserve its
corporate existence and franchises and comply in all material respects with all present and future
Laws applicable to it in the operation of its business, and all material agreements to which it is
subject;

     (I) The Borrower and the Subsidiaries will each take all necessary steps to preserve
Intellectual Property, and will keep accurate and complete Records of royalties, patents and
trademarks in connection therewith, consistent with sound business practices;

     (J) The Borrower and the Subsidiaries will keep accurate and complete business Records
consistent with sound business practices;

     (K) The Borrower and the Subsidiaries will give immediate notice to the Bank of (1) any
litigation or proceeding in which any of them is a party if an adverse decision therein would
require any of them to pay more than $200,000.00 or deliver assets the value of which exceeds such
sum (except where the claim is covered by insurance and the insurer has acknowledged coverage); and
(2) the institution of any other suit or proceeding involving any of them that could
be reasonably likely to materially and adversely affect the operations, financial condition,
property or business of the Borrower or any Subsidiary, considered as a whole;

     (L) Upon written request by the Bank, the Borrower will furnish the Bank with true, correct
and complete copies of federal income tax returns filed by the Borrower, together with all
schedules thereto;

     (M) The Borrower and the Subsidiaries will pay when due (or within applicable grace periods
(or in the case of trade indebtedness, no later than ninety (90) days from the date incurred)) all
of their other Indebtedness due third Persons except when the amount thereof is being contested in
good faith by appropriate proceedings and with adequate reserves therefor being set aside on their
books;

     (N) The Borrower and the Subsidiaries will each notify the Bank immediately if any of them
becomes aware of the occurrence of any Event of Default or of any fact, condition or event that
only with the giving of notice or passage of time or both, could become an Event of Default, or if
any of them becomes aware of any material adverse change in financial condition (including, without
limitation, proceedings in bankruptcy, insolvency, reorganization or the appointment of a receiver
or trustee), or results of operations of the Borrower or a Subsidiary, or

18

 

of the failure of the
Borrower or any Subsidiary to observe any of their respective undertakings hereunder or under the
other Loan Documents;

     (O) The Borrower and the Subsidiaries will notify the Bank thirty (30) days in advance of any
change in the location of the Borrower’s headquarters currently located in Oxford, Massachusetts;

     (P) The Borrower and the Subsidiaries will (1) fund any Employee Pension Benefit Plans in
accordance with no less than the minimum funding standards of 29 U.S.C.A. 1082 (Section 302 of
ERISA); (2) furnish the Bank, upon the Bank’s written request, with copies of any reports or other
statements filed with the United States Department of Labor or the Internal Revenue Service with
respect to any such Plan; and (3) promptly advise the Bank of the occurrence of any Reportable
Event or Prohibited Transaction with respect to any Employee Benefit Plan; and

     (Q) The Borrower will maintain its primary depository and operating accounts with the Bank at
all times while any Obligations to the Bank are outstanding, it being understood that this
provision shall not require the Borrower to maintain its investment account with the Bank.

5.02 Negative Covenants.

The Borrower does hereby covenant and agree with the Bank that, so long as any of the Obligations
remain unsatisfied or any commitments hereunder remain outstanding, it will comply, or if
appropriate cause the Subsidiaries to comply, at all times with the following negative covenants,
unless the Bank shall otherwise have agreed in writing:

     (A) Neither the Borrower nor any Subsidiary will mortgage, assign as collateral security,
pledge or encumber any of its assets now owned or hereafter acquired, or permit any of its assets
to be encumbered in any way without the prior express written consent of the Bank, except for
Permitted Liens and any lien in favor of the Bank or its affiliates;

     (B) Neither the Borrower nor any Subsidiary will change its name or enter into any merger or
consolidation (other than mergers or consolidations between wholly owned subsidiaries resulting in
no change in the beneficial ownership of such subsidiaries);

     (C) Neither the Borrower nor any Subsidiary will sell or otherwise dispose of, or for any
reason cease operating, any of its divisions, franchises, or lines of business, in each case,
comprising more than twenty percent (20%) of the assets of the Borrower and its Subsidiaries,
considered as a whole, without first providing the Bank with thirty (30) days advance written
notice of its intention to do so;

     (D) Neither the Borrower nor any Subsidiary will become liable, directly or indirectly, as
guarantor or otherwise for any obligation of any other Person exceeding $15,000,000.00 in the
aggregate at any time outstanding, without notifying the Bank in writing in advance, except for (i)
the endorsement of commercial paper for deposit or collection in the

19

 

ordinary course of business,
and (ii) unsecured guarantees of obligations of foreign Subsidiaries of the Borrower;

     (E) Neither the Borrower nor any Subsidiary will incur, create, assume, or permit to exist any
Indebtedness except: (1) the Loan; (2) existing Indebtedness listed on Exhibit 4.01(I)
permitted to exist after the date of this Agreement; (3) trade indebtedness incurred in the
ordinary course of business, (4) contingent Indebtedness permitted by Section 5.02(D); (5)
Indebtedness secured by Permitted Liens; (6) Subordinated Indebtedness; (7) Permitted International
Indebtedness; (8) capital leases or purchase money Indebtedness permitted by this Agreement; and
(9) other Indebtedness exceeding $15,000,000.00 in the aggregate at any time outstanding;

     (F) Neither the Borrower nor any Subsidiary (other than a wholly owned Subsidiary of the
Borrower) will declare or pay any dividends, or make any other payment or distribution on account
of its capital stock (other than shares of stock of, or other instruments issued by, the Borrower
convertible into stock of the Borrower);

     (G) Neither the Borrower nor any Subsidiary will form any subsidiary, make any investment in
(including any assignment of Inventory or other property), or make any loan in the nature of an
investment to, any Person, other than investments of the Borrower in the Subsidiaries listed on
Exhibit 4.01(A) without first providing the Bank within fifteen (15) days advance written
notice of its intention to do so;

     (H) Neither the Borrower nor any Subsidiary will make any loan or advance to any officer,
shareholder, director, or employee of the Borrower or any Subsidiary, except for (i) business
travel, educational or relocation and similar temporary advances in the ordinary course of
business, or (ii) loans not exceeding $100,000.00 to any one such individual up to $400,000.00 in
the aggregate at any one time outstanding;

     (I) The Borrower will not make any payments on the Subordinated Notes or any other
Subordinated Indebtedness, except as permitted by the subordination provisions applicable thereto;

     (J) Neither the Borrower nor any Subsidiary will acquire or agree to acquire any stock in, or
all or substantially all of the assets of, any Person for a cost in excess of $5,000,000.00 without
first providing the Bank with fifteen (15) days advance written notice of its intention to do so;

     (K) Neither the Borrower nor any Subsidiary will furnish the Bank any certificate or other
document that will contain any untrue statement of material fact or that will omit to state a
material fact necessary to make it not misleading in light of the circumstances under which it was
furnished; and

     (L) Neither the Borrower nor any Subsidiary will directly or indirectly apply any part of the
proceeds of the Loan to the purchasing or carrying of any “margin stock” within the

20

 

meaning
of Regulation U of the Board of Governors of the Federal Reserve System, or any regulations,
interpretations, or rulings thereunder.

ARTICLE 6.0 DEFAULT

6.01 Events of Default.

The occurrence of any one or more of the following events shall constitute an Event of Default
hereunder:

     (A) The Borrower or the Subsidiaries shall fail to pay when due any Obligations to the Bank
within ten (10) days of an applicable due date;

     (B) The Borrower or the Subsidiaries shall fail to observe or perform any other obligation to
be observed or performed by it hereunder or under any of the other Loan Documents, and such failure
shall continue for thirty (30) days after (1) notice of such failure from the Bank; or (2) the Bank
is notified of such failure or should have been so notified pursuant to the provisions of Section
5.01(O), whichever is earlier;

     (C) The Borrower or the Subsidiaries shall fail to pay any Indebtedness other than the
Obligations exceeding $250,000.00, and such failure shall continue beyond any applicable grace
period (or, with respect to trade Indebtedness which is not subject to a grace period, within
ninety (90) days of the date such trade Indebtedness is incurred);

     (D) Any financial statement, representation, warranty or certificate made or furnished by or
with respect to the Borrower or any of the Subsidiaries to the Bank in connection with this
Agreement, or as an inducement to the Bank to enter into this Agreement, or in any separate
statement or document to be delivered to the Bank hereunder, shall be materially false,
incorrect or incomplete when made;

     (E) The Borrower shall admit its inability to pay its debts as they mature or shall make an
assignment for the benefit of itself or any of its creditors;

     (F) Proceedings in bankruptcy, or for reorganization of the Borrower or any of the
Subsidiaries, or for the readjustment of any of their respective debts under the United States
Bankruptcy Code, as amended, or any part thereof, or under any other Laws, whether state or
federal, for the relief of debtors, now or hereafter existing, shall be commenced against or by the
Borrower or any of the Subsidiaries and, except with respect to any such proceedings instituted by
the Borrower or any of the Subsidiaries, shall not be discharged within sixty (60) days of said
commencement;

     (G) A receiver or trustee shall be appointed for the Borrower or any of the Subsidiaries or
for any substantial part of their respective assets, or any proceedings shall be instituted for the
dissolution or the full or partial liquidation of the Borrower or any of the Subsidiaries, and
except with respect to any such appointments requested or instituted by the Borrower or any of the
Subsidiaries, such receiver or trustee shall not be discharged within sixty

21

 

(60) days of his
appointment, and except with respect to any such proceedings instituted by the Borrower or any of
the Subsidiaries, such proceedings shall not be discharged within sixty (60) days of commencement,
or the Borrower shall discontinue business or materially change the nature of its business;

     (H) The Borrower or any of the Subsidiaries shall suffer final judgments (which are not
covered by insurance where the insurer has acknowledged coverage) for payment of money aggregating
in excess of $250,000.00 and shall not discharge the same within a period of forty-five (45) days
unless, pending further proceedings, execution has not been commenced or, if commenced, has been
effectively stayed; or

     (I) Failure by the Borrower to pay any amount of money or to observe exceeding $250,00.00 or
perform any other material covenant, condition or agreement which is the obligation of the Borrower
to the Bank under any other existing or future note, mortgage or other document or instrument.

6.02 Acceleration.

At its option, and at any time, whether immediately or otherwise, the Bank may, upon the occurrence
of any Event of Default, declare all Obligations of the Borrower to the Bank immediately due and
payable without further action of any kind including, without limitation, notice, demand or
presentment.

ARTICLE 7.0 THE BANK’S RIGHTS AND REMEDIES

7.01 The Bank’s Rights Upon Default

Upon the occurrence of an Event of Default and at any time thereafter, the Bank, without
presentment, demand, notice, protest or advertisement of any kind, will have the rights set forth
in this Agreement and under applicable law.

7.02 Right of Set-Off.

The Borrower hereby grants to the Bank a continuing lien, security interest and right of set-off as
security for all liabilities and obligations to the 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 the Bank or any entity under the control of Bank of
America Corporation and its successors and assigns, or in transit to any of them. At any time,
upon notice of an Event of Default, the Bank may set off the same or any part thereof and apply the
same to any liability or obligation of Borrower even though unmatured.

7.03 Cumulative Rights and Remedies

All rights and remedies of the Bank, whether provided for herein or in other agreements,
instruments or documents or conferred by law, are cumulative and may be exercised alone or
simultaneously.

22

 

7.04 Additional Rights and Remedies

     (A) Upon the occurrence of an Event of Default, all obligations on the part of the Bank to
make advances under the Note, if the Bank so elects upon written notice to the Borrower, shall
cease and terminate, and, at the option of the Bank, the Note shall become immediately due and
payable, but the Bank may make any advances or portions of advances under the Note, after the
occurrence of any such Event of Default, without thereby waiving its right to demand payment of the
Obligations and without becoming liable to make any other or further advances as hereinabove
contemplated by this Agreement.

     (B) Upon the occurrence of an Event of Default, the rights, powers and privileges provided in
this Section 7.04, and all other remedies available to the Bank under this Agreement or at law or
in equity, may be exercised by the Bank at any time and from time to time, whether or not the
Obligations shall be due and payable, and whether or not the Bank shall have instituted any
foreclosure proceedings or other action for the enforcement of its rights hereunder or under the
Note or any of the other Loan Documents.

ARTICLE 8.0 MISCELLANEOUS

8.01 Construction.

The provisions of this Agreement shall be in addition to those of any pledge or security agreement,
note or other evidence of liability now or hereafter held by the Bank, all of which shall be
construed as complementary to each other. Nothing herein contained shall prevent the
Bank from enforcing any or all other pledge or security agreements, notes or other evidences of
liability in accordance with their respective terms.

8.02 Further Assurance.

From time to time, the Borrower will execute and deliver to the Bank such additional documents and
will provide such additional information as the Bank may reasonably require to carry out the terms
of this Agreement and be informed of the status and affairs of the Borrower.

8.03 Enforcement and Waiver by the Bank.

The Bank shall have the right at all times to enforce the provisions of this Agreement and the
other Loan Documents in strict accordance with the terms hereof and thereof, notwithstanding any
conduct or custom on the part of the Bank in refraining from so doing at any time or times. The
failure of the Bank at any time or times to enforce its rights under such provisions, strictly in
accordance with the same, shall not be construed as having created a custom in any way or manner
contrary to specific provisions of this Agreement or as having in any way or manner modified or
waived the same. All rights and remedies of the Bank are cumulative and concurrent and the
exercise of one right or remedy shall not be deemed a waiver or release of any other right or
remedy.

23

 

8.04 Expenses of the Bank.

The Borrower shall pay on demand all expenses of the Bank in connection with the preparation,
administration, default, collection, waiver or amendment of loan terms, or in connection with the
Bank’s exercise, preservation or enforcement of any of its rights, remedies or options hereunder,
including, without limitation, reasonable fees of outside legal counsel, accounting, consulting,
brokerage or other similar professional fees or expenses, and any fees or expenses associated with
travel or other costs relating to any appraisals or examinations conducted in connection with this
Agreement, the Note, the other Loan Documents or any other collateral therefor, and the amount of
all such expenses shall, until paid, bear interest at the rate applicable to principal under the
Note (including any default rate) and be an Obligation.

8.05 Notices.

Any notices or consents required or permitted by this Agreement shall be in writing and shall be
deemed delivered if delivered in person or if sent by certified mail, postage prepaid, return
receipt requested, facsimile or telegraph, as follows, unless such address is changed by written
notice hereunder:

	 	 	 	 	 
	(A)

	 	If to the Borrower:
	 	IPG Photonics Corporation
	 

	 	 	 	50 Old Webster Road
	 

	 	 	 	Oxford, MA 01540
	 

	 	 	 	Attention: Chief Financial Officer
	 
	 	 	 	 
	 

	 	With a copy to:
	 	IPG Photonics Corporation
	 

	 	 	 	50 Old Webster Road
	 

	 	 	 	Oxford, MA 01540
	 

	 	 	 	Attention: General Counsel
	 
	 	 	 	 
	(B)

	 	If to the Bank:
	 	Bank of America, N.A.
	 

	 	 	 	100 Front Street
	 

	 	 	 	Worcester, MA 01608
	 

	 	 	 	Attention: Credit Products Officer
	 
	 	 	 	 
	 

	 	With a copy to:
	 	George W. Tetler III, Esquire
	 

	 	 	 	Bowditch & Dewey, LLP
	 

	 	 	 	P.O. Box 15156
	 

	 	 	 	311 Main Street
	 

	 	 	 	Worcester, MA 01615-0156

Any party may change the address to which notices are to be sent to it by giving written notice of
such change of address to the other party in the manner herein provided for giving notice. Any
such notice, demand, request or other communication shall be deemed given when mailed as aforesaid.

8.06 Waiver and Indemnification by the Borrower.

24

 

To the maximum extent permitted by applicable Laws, the Borrower:

     (A) Waives (1) protest of all commercial paper at any time held by the Bank for which the
Borrower is in any way liable; (2) except as the same may herein be specifically granted, notice of
acceleration and of intention to accelerate; and (3) notice and opportunity to be heard, after
acceleration in the manner provided in Section 6.02, before exercise by the Bank of the remedies of
self-help, set-off or of other summary procedures permitted by any applicable Laws or by any
agreement with the Borrower, and, except where required hereby or by any applicable Laws, notice of
any other action taken by the Bank; and

     (B) Indemnifies the Bank and its officers, attorneys, agents and employees from all claims for
loss or damage caused by any act or omission on the part of any of them except willful misconduct
or gross negligence.

8.07 Participation; Right to Sell and/or Assign.

The Bank shall have the unrestricted right at any time and from time to time, and without the
consent of the Borrower, to grant to one or more banks or other financial institutions (each, a
“Participant”) participating interests, in minimum amounts of $1,000,000.00 each, in the
Bank’s obligation to lend hereunder and any or all of the loans held by the Bank hereunder. In the
event of any such grant by the Bank of a participating interest to a Participant, whether or not
upon notice to the Borrower, the Bank shall remain responsible for the performance of its
obligations
hereunder and the Borrower shall continue to deal solely and directly with the Bank in connection
with the Bank’s rights and obligations hereunder. The Bank may furnish any information concerning
the Borrower in its possession from time to time to prospective Participants, provided that the
Bank shall require any such prospective Participant to agree in writing to maintain the
confidentiality of such information.

The Bank shall have the unrestricted right at any time or from time to time, upon Borrower’s
consent, which consent shall not be unreasonably withheld, to assign all or any portion of its
rights and obligations hereunder to one or more banks or other financial institutions (each, an
“Assignee”), and the Borrower agrees that it shall execute, or cause to be executed, such
documents, including without limitation amendments to this Agreement and to any other documents,
instruments and agreements executed in connection herewith as the Bank shall deem reasonably
necessary to effect the foregoing. In addition, at the request of the Bank and any such Assignee,
the Borrower shall issue one or more new promissory note(s), as applicable, to any such Assignee
and, if the Bank has retained any of its rights and obligations hereunder following such
assignment, to the Bank, which new promissory note(s) shall be issued in replacement of, but not in
discharge of, the liability evidenced by the promissory note held by the Bank prior to such
assignment and shall reflect the amount of the respective commitments and loans held by such
Assignee and the Bank after giving effect to such assignment. Upon the execution and delivery of
appropriate assignment documentation, amendments and any other documentation required by the Bank
in connection with such assignment, and the payment by Assignee of the purchase price agreed to by
the Bank and such Assignee, such Assignee shall be a party to this Agreement and shall have all of
the rights and obligations of the Bank hereunder

25

 

(and under any and all other documents,
instruments and agreements executed in connection herewith) to the extent that such rights and
obligations have been assigned by the Bank pursuant to the assignment documentation between the
Bank and such Assignee, and the Bank shall be released from its obligations hereunder and
thereunder to a corresponding extent. The Bank may furnish any information concerning the Borrower
in its possession from time to time to prospective Assignees, provided that the Bank shall require
any such prospective Assignees to agree in writing to maintain the confidentiality of such
information.

8.08 WAIVER OF JURY TRIAL.

THE BORROWER AND THE BANK MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT
TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS AGREEMENT, THE NOTE OR ANY OTHER LOAN DOCUMENTS EXECUTED OR CONTEMPLATED TO BE EXECUTED
IN CONNECTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING, WITHOUT LIMITATION, ANY COURSE OF CONDUCT, COURSE OF
DEALINGS, STATEMENTS OR ACTIONS OF THE BANK RELATING TO THE ADMINISTRATION OF THE LOAN OR ANY OTHER
OBLIGATIONS OR ENFORCEMENT OF THE LOAN DOCUMENTS, AND AGREE THAT NEITHER PARTY WILL SEEK TO
CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER
ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. EXCEPT AS PROHIBITED BY LAW, THE
BORROWER HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL
DAMAGES. THE BORROWER CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE BANK HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE BANK WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVER. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR THE BANK TO ENTER
INTO THIS AGREEMENT AND MAKE THE LOAN EVIDENCED BY THE NOTE.

8.09 Applicable Law.

This Agreement, and the rights and obligations of the parties hereunder shall be construed and
interpreted in accordance with the laws of The Commonwealth of Massachusetts (excluding the laws
applicable to conflicts or choice of law).

8.10 Binding Effect, Assignment, and Entire Agreement.

This Agreement shall inure to the benefit of, and shall be binding upon, the respective successors
and permitted assigns of the parties hereto. The Borrower has no right to assign any of its rights
or obligations hereunder without the prior written consent of the Bank. This Agreement, including
the Exhibits hereto, all of which are hereby incorporated herein by reference, and the

26

 

documents
executed and delivered pursuant hereto, are intended by the parties as the final, complete and
exclusive statement of the transaction evidenced by this Agreement. All prior or contemporaneous
promises, agreements and understandings, whether oral or written, are deemed to be superceded by
this Agreement, and no party is relying on any promise, agreement or understanding not set forth in
this Agreement. This Agreement may not be amended or modified except by a written instrument
describing such amendment or modification executed by the Borrower and the Bank.

8.11 Severability.

If any provision of this Agreement shall be held invalid under any applicable Laws, such invalidity
shall not affect any other provision of this Agreement that can be given effect without the invalid
provision, and, to this end, the provisions hereof are severable.

8.12 Counterparts.

This Agreement may be executed in any number of counterparts, each of which shall be deemed to be
an original, but all of which together shall constitute but one and the same instrument.

8.13 Replacement Note.

     Upon receipt of (i) an affidavit of an officer of the Bank as to the loss, theft, destruction
or mutilation of the Note or any other Loan Document which is not of public record, and (ii) an
indemnity by the Bank in favor of the Borrower with respect to losses, claims or damage resulting
therefrom and, in the case of any such loss, theft, destruction or mutilation, upon cancellation of
such Note or other Loan Document, the Borrower will issue, in lieu thereof, a replacement Note or
other Loan Document in the same principal amount thereof and otherwise of like tenor.

8.14 Use of Proceeds

No portion of the proceeds of the Loan shall be used, in whole or in part, for the purpose of
purchasing or carrying any “margin stock” as such term is defined in Regulation U of the
Board of Governors of the Federal Reserve System.

8.15 Integration

This Agreement is intended by the parties as the final, complete and exclusive statement of the
transactions evidenced by this Agreement. All prior or contemporaneous promises, agreements and
understandings, whether oral or written, are deemed to be superceded by this Agreement, and no
party is relying on any promise, agreement or understanding not set forth in this Agreement. This
Agreement may not be amended or modified except by a written instrument describing such amendment
or modification executed by the Borrower and the Bank.

27

 

THIS SPACE INTENTIONALLY LEFT BLANK;

SIGNATURES APPEAR ON THE FOLLOWING PAGE

28

 

     IN WITNESS WHEREOF, each of the parties hereto have duly caused this Agreement to be executed
by its duly authorized representative as a sealed instrument as of the day and year first above
written.

	 	 	 	 	 	 	 
	 	 	IPG PHOTONICS CORPORATION	 	 
	 
	 	 	 	 	 	 
	/s/ Angelo P. Lopresti

	 	By:
	 	/s/ Timothy P.V. Mammen	 	 
	 

	 	 	 	 	 	 
	Witness

	 	 	 	Timothy P.V. Mammen,	 	 
	 

	 	 	 	Vice President and Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	BANK OF AMERICA, N. A.	 	 
	 
	 	 	 	 	 	 
	/s/ Linda M. Berthiaume

	 	By:
	 	/s/ Thomas P. McGregor	 	 
	 

	 	 	 	 	 	 
	Witness

	 	 	 	Thomas P. McGregor, Senior Vice President
	 	 

29exv10w2

 

Exhibit 10.2

REVOLVING CREDIT NOTE

			
	 	 	 
	$20,000,000.00	 	 
	Worcester, Massachusetts
	 	July 26, 2007

     FOR VALUE RECEIVED, the undersigned, IPG PHOTONICS CORPORATION, a Delaware corporation with a
principal place of business at 50 Old Webster Road, Oxford, Massachusetts 01540 (the
“Borrower”) hereby promises to pay to

BANK OF AMERICA, N.A.,

a national banking association organized and existing under the laws of the United States of
America (the “Bank”), OR ORDER, at its office at 100 Federal Street, Boston, Massachusetts
02110, or such other place as the Bank may from time to time specify in writing, the principal sum
of

TWENTY MILLION AND NO/100 DOLLARS ($20,000,000.00)

(or so much as may be outstanding from time to time) with interest on the unpaid principal until
paid at the rates and in the manner hereinafter provided in lawful money of the United States of
America in immediately available funds, without counterclaim or set-off and free and clear of, and
without any deduction or withholding for, any taxes or other payments.

     This Revolving Credit Note is issued in conjunction with a Loan Agreement by and between the
Borrower and the Bank dated as of even date herewith (as amended from time to time, the
“Agreement”), all the terms and conditions of which are incorporated herein by reference.
No reference to the Agreement or to any provision thereof shall affect or impair the absolute and
unconditional obligation of the Borrower to pay the principal of and interest on this Revolving
Credit Note as herein provided. An Event of Default under the Agreement shall also constitute an
Event of Default hereunder. The occurrence of an Event of Default shall constitute a default
(beyond any applicable grace or cure periods) under each of the other obligations of the Borrower
to the Bank. Capitalized terms used and not otherwise defined herein shall have the meanings
ascribed to such terms in the Agreement. “$” or “dollars” denotes lawful currency
of the United States of America.

     Interest shall be calculated on the daily unpaid principal balance of the indebtedness
evidenced by this Revolving Credit Note computed on the basis of the actual number of days elapsed
over a year assumed to have three hundred sixty (360) days, provided that interest shall be due for
the actual number of days elapsed during each period for which interest is being charged.

 

 

     The unpaid principal of this Revolving Credit Note from time to time outstanding shall bear
interest at the applicable rate per annum, at the Borrower’s written election from time to time and
in accordance with the provisions of this Revolving Credit Note, as follows:

     (a) LIBOR Rate plus the Applicable Margin (calculated as set forth below) (a “LIBOR Rate
Loan”); or

     (b) the Bank’s Base Rate plus the Applicable Margin (calculated as set forth below), fully
floating (a “Base Rate Loan”).

     The Applicable Margin will be based upon calculation by the Bank of the Funded Debt to EBITDA
Ratio, as follows:

	 	 	 	 	 	 	 	 	 
	Funded Debt to	 	Applicable Margin -	 	Applicable Margin
	EBITDA Ratio	 	LIBOR Rate	 	Base Rate
	less than 1.0 to 1.0
	 	 	.80	%	 	 	-0.50	%
	 
	 	 	 	 	 	 	 	 
	equal to or greater than
1.0 to 1.0, but less than
1.5 to 1.0
	 	 	1.00	%	 	 	-0.25	%
	 
	 	 	 	 	 	 	 	 
	equal to or greater than
1.5 to 1.0, but less than
2.0 to 1.0
	 	 	1.20	%	 	 	0	 

     As used herein, the terms “Funded Debt” and “EBITDA” shall have the meanings
ascribed to such term in the Agreement. The Funded Debt to EBITDA Ratio shall be measured as of
the end of each fiscal quarter of the Borrower over a period comprised of the previous four (4)
fiscal quarters of the Borrower.

     The Base Rate and the LIBOR Rate shall be adjusted as of fifteen (15) Business Days after the
earlier of (x) receipt and review by the Bank of Borrower’s compliance certificate as required
under Section 5.01(B)(3) of the Agreement or (y) the date on which the financial covenants set
forth in Section 5.01(F) of the Agreement are tested by the Bank. Such adjustments shall apply to
Base Rate Loans effective immediately and to LIBOR Rate Loans made on or after the applicable date
of the adjustment.

     If the Borrower fails to select an interest rate for all or any portion of the unpaid
principal balance of this Revolving Credit Note or if the applicable LIBOR Rate becomes
unavailable, then the interest rate will be the Base Rate plus the Applicable Margin.

     The term “Base Rate” means the higher of (a) the Bank’s Prime Rate established from
time to time by the Bank or (b) the Federal Funds Rate, fully floating. The “Prime

2

 

Rate”
means that variable per annum rate of interest so designated from time to time by the Bank as its
Prime Rate The Prime Rate is a reference rate and does not necessarily represent the lowest or best
rate being charged to any customer. The “Federal Funds Rate” means, for any period, a
fluctuating interest rate equal for each day during such period to the weighted average of the
rates on overnight Federal Funds transactions with members of the Federal Reserve System arranged
by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the
next preceding Business Day) by the Federal Reserve Bank of New York or, if such rate is not so
published for any day which is a Business Day, the average of the quotations for such day on such
transactions received by the Bank from three (3) Federal Funds brokers of recognized standing
selected by the Bank.

     The term “LIBOR Rate” means, as applicable to any LIBOR Rate Loan, the rate per annum
as determined on the basis of the offered rates for deposits in U.S. Dollars, for a period of time
comparable to such LIBOR Rate Loan which appears on the Reuters Screen LIBOR01 page (or any
successor page) as of 11:00 a.m. London time on the day that is two (2) Business Days preceding the
first day of such LIBOR Rate Loan (the “LIBOR Interest Period”); provided, however, if the
rate described above does not appear on the Reuters Screen LIBOR01 page (or any successor page) on
any applicable interest determination date, the LIBOR Rate shall be the rate (rounded upward, if
necessary, to the nearest one hundred-thousandth of a percentage point), determined on the basis of
the offered rates for deposits in U.S. dollars for a period of time comparable to such LIBOR Rate
Loan which are offered by four major banks in the London interbank market at approximately 11:00
a.m. London time, on the day that is two (2) Business Days preceding the first day of such LIBOR
Rate Loan as selected by the Bank. The principal London office of each of the four major London
banks will be requested to provide a quotation of its U.S. Dollar deposit offered rate. If at
least two such quotations are provided, the rate for that date will be the arithmetic mean of the
quotations. If fewer than two quotations are provided as requested, the rate for that date will be
determined on the basis of the rates quoted for loans in U.S. dollars to leading European banks for
a period of time comparable to such LIBOR Rate Loan offered by major banks in New York City at
approximately 11:00 a.m. New York City time, on the day that is two (2) Business Days preceding the
first day of such LIBOR Rate Loan. In the event that the Bank is unable to obtain any such
quotation as provided above, it will be deemed that the LIBOR Rate pursuant to a LIBOR Rate Loan
cannot be determined. In the event that the Board of Governors of the Federal Reserve System shall
impose a Reserve Percentage with respect to LIBOR Rate deposits of the Bank, then for any period
during which such Reserve Percentage shall apply, the LIBOR Rate shall be equal to the amount
determined above divided by an amount equal to one (1) minus the Reserve Percentage. “Reserve
Percentage” shall mean the maximum aggregate reserve requirement (including all basic,
supplemental, marginal and other reserves) which is imposed on member banks of the Federal Reserve
System against “Euro-currency Liabilities” as defined in Regulation D. Each LIBOR Rate
Loan shall be in an amount of integral multiples of $100,000.00. The LIBOR Interest Period must be
fixed, upon request by the Borrower for a LIBOR Rate Loan, for periods of one (1) month, two (2)
months, three (3), six (6), nine (9) and twelve (12) months.

3

 

     The Following Business Day Convention shall be used to adjust any relevant date if that date
would otherwise fall on a day that is not a Business Day. For the purposes herein, the term
“Following Business Day Convention” shall mean that an adjustment will be made if any
relevant date would otherwise fall on a day that is not a Business Day so that the date will
be the first following day that is a Business Day. “Business Day” means, in respect of any
date that is specified in this Revolving Credit Note to be subject to adjustment in accordance with
the Following Business Day Convention, a day on which commercial banks settle payments in (i)
London, if the payment obligation is calculated by reference to LIBOR, or (ii) New York, if the
payment obligation is calculated by reference to the Base Rate. All payments hereunder shall be
adjusted in accordance with the Following Business Day Convention.

     Interest on the Base Rate Loans shall be payable monthly in arrears on the first day of each
calendar month, the first such installment of interest to be due and payable on July 1, 2007.
Interest on LIBOR Rate Loans shall be payable in full at the end of the applicable LIBOR Interest
Period. All principal, interest and other indebtedness due hereunder if not sooner paid, shall be
due and payable on June 30, 2010 (the “Revolving Credit Termination Date”).

     The Borrower may prepay Base Rate Loans in whole or in part without penalty or premium. The
Borrower may prepay a LIBOR Loan only upon at least three (3) Business Days prior written notice to
the Bank (which notice shall be irrevocable). The Borrower shall pay to the Bank, upon request of
the Bank, such amount or amounts as shall be sufficient (in the reasonable opinion of the Bank) to
compensate it for any loss, cost, or expense incurred as a result of: (i) any payment of a LIBOR
Loan on a date other than the last day of the LIBOR Interest Period for such LIBOR Loan; (ii) any
failure by the Borrower to borrow a LIBOR Loan on the date specified by Borrower’s written notice;
(iii) any failure by the Borrower to pay a LIBOR Loan on the date for payment specified in the
Borrower’s written notice. Without limiting the foregoing, the Borrower shall pay to the Bank a
“yield maintenance fee” in an amount computed as follows: The current rate for United
States Treasury securities (bills on a discounted basis shall be converted to a bond equivalent)
with a maturity date closest to the term chosen pursuant to the LIBOR Rate Election as to which the
prepayment is made, shall be subtracted from the LIBOR Rate in effect at the time of prepayment.
If the result is zero or a negative number, there shall be no yield maintenance fee. If the result
is a positive number, then the resulting percentage shall be multiplied by the amount of the
principal balance being prepaid. The resulting amount shall be divided by 360 and multiplied by
the number of days remaining the term chosen pursuant to the LIBOR Rate Election as to which the
prepayment is made. Said amount shall be reduced to present value calculated by using the above
referenced United States Treasury securities rate and the number of days remaining in the term
chosen pursuant to the LIBOR Rate Election as to which prepayment is made. The resulting amount
shall be the yield maintenance fee due to the Bank upon the payment of a LIBOR Loan. Each
reference in this paragraph to “LIBOR Rate Election” shall mean the election by the
Borrower of LIBOR Rate. If by reason of an Event of Default, the Bank elects to declare this
Revolving Credit Note immediately due and payable, then any

4

 

yield maintenance fee with respect to a
LIBOR Loan shall become due and payable in the same manner as though the Borrower had exercised
such right of prepayment.

     If the entire amount of any required principal and/or interest is not paid in full within
fifteen (15) days after the same is due, the Borrower shall pay to the Bank a late fee equal to two
percent (2%) of the required payment. Such late charge payments are made for the purpose of
compensating the Bank for its administrative, costs and expenses in handling late payments and
losses in connection therewith. This provision is not intended to provide a grace period for any
payment otherwise due and payable and shall not constitute a waiver by the Bank to insist upon the
strict performance of any of the Borrower’s covenants or agreements with, or obligations to, the
Bank or to declare any event of default for any payment not made when it was due and payable.

     All payments shall be applied first to the payment of all fees, expenses and other amounts due
to the Bank (excluding principal and interest), then to accrued interest, and the balance on
account of outstanding principal; provided, however, that after an Event of Default, payments will
be applied to the obligations of the Borrower to the Bank as the Bank shall determine in its sole
discretion.

     Until the earlier of the Revolving Credit Termination Date or the occurrence of an Event of
Default, the Borrower may borrow, repay and reborrow hereunder from time to time, provided that the
aggregate principal amount at any time outstanding shall not exceed the face amount of this
Revolving Credit Note.

     Upon the occurrence of an Event of Default (whether or not the Bank has accelerated payment of
this Revolving Credit Note), or after the Revolving Credit Termination Date or after judgment has
been rendered on this Revolving Credit Note or any other Obligations under the Agreement, the
Borrower’s right to select pricing options shall cease and the unpaid principal of this Revolving
Credit Note, including interest, fees or costs which are not paid when due, will, at the option of
the Bank, bear interest at a rate which is three percent (3%) per annum greater than the rate of
interest which would otherwise be applicable hereunder (the “Default Rate”). This may
result in compounding of interest. This will not constitute a waiver of any Event of Default.

     At its option, and at any time, whether immediately or otherwise, upon the occurrence of an
Event of Default, the Bank may declare this Revolving Credit Note immediately due and payable
without further action of any kind including notice, further demand or presentment.

     The Borrower hereby authorizes the Bank, without liability on the Bank’s part, to debit from
time to time from the Automatic Payments Deposit Account the Automatic Payments. If the funds in
the Automatic Payments Deposit Account are insufficient to cover any payment, the Bank shall not be
obligated to advance funds to cover the payment. At any time for any reason, the Bank may
voluntarily terminate Automatic Payments. The Bank shall provide the Borrower timely notice of any
debit made from the Automatic Payments Deposit Account or termination of Automatic Payments.

5

 

     The Borrower hereby grants to the Bank a continuing lien, security interest and right of
set-off as security for all liabilities and obligations to the 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 the Bank or any entity under the control of
Bank of America Corporation and its successors and assigns, or in transit to any of them. Upon
notice of an Event of Default, the Bank may set off the same or any part thereof and apply the same
to any liability or obligation of the Borrower even though unmatured and regardless of the adequacy
of any other collateral securing the loan evidenced hereby.

     The Borrower shall pay on demand all expenses of the Bank in connection with the preparation,
administration, default, collection, waiver or amendment of loan terms, or in connection with the
Bank’s exercise, preservation or enforcement of any of its rights, remedies or options hereunder,
including, without limitation, reasonable fees of outside legal counsel, accounting, consulting,
brokerage or other similar professional fees or expenses, and any fees or expenses associated with
travel or other costs relating to any appraisals or examinations conducted in connection with the
Loan or any collateral therefor, and the amount of all such expenses shall, until paid, bear
interest at the rate applicable to principal hereunder (including any Default Rate) and be an
obligation secured by any collateral.

     The Borrower and each endorser or other person now or hereafter liable for the payment of any
of the indebtedness evidenced by this Revolving Credit Note, severally, agrees, by making or
endorsing this Revolving Credit Note or by making any agreement to pay any of the indebtedness
evidenced by this Revolving Credit Note, to waive presentment for payment, protest and demand,
notice of protest, demand and of dishonor and non-payment of this Revolving Credit Note, and
consents without notice or further assent: (a) to the substitution, exchange, or release of any
collateral securing this Revolving Credit Note or any part thereof at any time; (b) to the
acceptance by the holder or holders at any time of any additional collateral or security of this
Revolving Credit Note, (c) to the modification or amendment at any time, and from time to time, of
this Revolving Credit Note, the Agreement and any instrument securing this Revolving Credit Note,
at the request of any person liable hereon; (d) to the granting by the holder hereof of any
extension of the time for payment of this Revolving Credit Note or for the performance of the
agreements, covenants and conditions contained in this Revolving Credit Note, the Agreement or any
instrument securing this Revolving Credit Note, at the request of any other person liable hereon;
and (e) to any and all forbearances and indulgences whatsoever; and such consent shall not alter or
diminish the liability of any person.

     This Revolving Credit Note shall be governed by, and the rights and obligations of the parties
hereunder shall be construed and interpreted in accordance with, the laws of The Commonwealth of
Massachusetts (excluding the laws applicable to conflicts or choice of law). The Borrower agrees
that any suit for the enforcement of this Revolving Credit Note or any of the other Loan Documents
may be brought in the courts of The

6

 

Commonwealth of Massachusetts or any Federal Court sitting
therein and consents to the non-exclusive jurisdiction of such court and to service of process in
any such suit being made upon the Borrower by mail at the address specified herein. The Borrower
hereby waives any objection that it may now or hereafter have to the venue of any such suit or any
such court or that such suit was brought in an inconvenient court.

     THE BORROWER AND THE BANK (BY ACCEPTANCE OF THIS REVOLVING CREDIT NOTE) MUTUALLY HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM
BASED HEREON, ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS REVOLVING CREDIT NOTE OR ANY OTHER LOAN DOCUMENTS EXECUTED OR
CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY RELATED HERETO, INCLUDING, WITHOUT
LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF THE BANK RELATING
TO THE ADMINISTRATION OF THE LOAN OR ENFORCEMENT OF THE LOAN DOCUMENTS, AND AGREE THAT NEITHER
PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT
BE OR HAS NOT BEEN WAIVED. EXCEPT AS PROHIBITED BY LAW, THE BORROWER HEREBY WAIVES ANY RIGHT IT
MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. THE BORROWER CERTIFIES THAT
NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE BANK HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE
BANK WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER. THIS WAIVER
CONSTITUTES A MATERIAL INDUCEMENT FOR THE BANK TO ACCEPT THIS REVOLVING CREDIT NOTE AND MAKE THE
LOAN EVIDENCED BY THIS REVOLVING CREDIT NOTE.

     This Revolving Credit Note is intended by the parties as the final, complete and exclusive
statement of the transactions evidenced by this Revolving Credit Note. All prior or
contemporaneous promises, agreements and understandings, whether oral or written, are deemed to be
superceded by this Revolving Credit Note, and no party is relying on any promise, agreement or
understanding not set forth in this Revolving Credit Note. This Revolving Credit Note may not be
amended or modified except by a written instrument describing such amendment or modification
executed by the Borrower and the Bank.

     No portion of the proceeds of the Loan shall be used, in whole or in part, for the purpose of
purchasing or carrying any “margin stock” as such term is defined in Regulation U of the
Board of Governors of the Federal Reserve System.

7

 

     The Bank may at any time pledge or assign all or any portion of its rights under this
Revolving Credit Note or the Agreement (including any portion of the Note) to any of the twelve
(12) Federal Reserve Banks organized under Section 4 of the Federal Reserve Act, 12 U.S.C. Section
341. No such pledge or assignment or enforcement thereof shall release the Bank from its
obligations under the Note, the Agreement or any loan documents related thereto.

     Upon receipt of (i) an affidavit of an officer of the Bank as to the loss, theft, destruction
or mutilation of this Revolving Credit Note or any other loan document which is not of public
record, and (ii) an indemnity by the Bank in favor of the Borrower with respect to losses, claims
or damages resulting therefrom, and, in the case of any such loss, theft, destruction or
mutilation, upon cancellation of this Revolving Credit Note or other loan document, the Borrower
will issue, in lieu thereof, a replacement Revolving Credit Note or other loan document in the same principal
amount thereof and otherwise of like tenor.

     IN WITNESS WHEREOF, the Borrower has caused this Revolving Credit Note to be executed by its
duly authorized representative as an instrument under seal as of the day and year first above
written.

	 	 	 	 	 	 	 
	 	 	IPG PHOTONICS CORPORATION	 	 
	 
	 	 	 	 	 	 
	/s/ Angelo P. Lopresti

	 	By:
	 	/s/ Timothy P.V. Mammen	 	 
	 

	 	 	 	 	 	 
	Witness

	 	 	 	Timothy P.V. Mammen,	 	 
	 

	 	 	 	Vice President and Chief Financial Officer

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}]]