Document:

Exhibit 10.2

    Exhibit
      10.2

    

    

    

    

    TRUST
      AGREEMENT

    

    Between

    

    _____________________________________

    

    Cree,
      Inc.

    

    And

    

    FIDELITY
      MANAGEMENT TRUST COMPANY

    

    ______________________________________

    

    Cree,
      Inc. Directors’ Deferred Compensation Plan

    

    

    

    TRUST

    

    

    

    

    Dated
      as
      of February 1, 2006

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    TABLE
      OF CONTENTS

    

    
      	
              Section

            	
              Page

            
	
              1

            	 	
              Definitions

            	
              1

            
	
              2

            	 	
              Trust

            	
              3

            
	 	
              (a)

            	 	
              Establishment

            	
              3

            
	 	
              (b)

            	 	
              Grantor
                Trust

            	
              3

            
	 	
              (c)

            	 	
              Trust
                Assets

            	
              3

            
	 	
              (d)

            	 	
              Non-Assignment

            	
              4

            
	
              3

            	 	
              Payments
                to Sponsor

            	
              4

            
	
              4

            	 	
              Disbursements

            	
              4

            
	 	
              (a)

            	 	
              Directions
                from Administrator

            	
              4

            
	 	
              (b)

            	 	
              Limitations

            	
              4

            
	
              5

            	 	
              Investment
                of Trust

            	
              5

            
	 	
              (a)

            	 	
              Selection
                of Investment Options

            	
              5

            
	 	
              (b)

            	 	
              Available
                Investment Options

            	
              5

            
	 	
              (c)

            	 	
              Investment
                Directions

            	
              5

            
	 	
              (d)

            	 	
              Funding
                Mechanism

            	
              5

            
	 	
              (e)

            	 	
              Mutual
                Funds

            	
              5

            
	 	
              (f)

            	 	
              Trustee
                Powers

            	
              6

            
	
              6

            	 	
              Recordkeeping
                and Administrative Services to Be Performed

            	
              7

            
	 	
              (a)

            	 	
              General

            	
              7

            
	 	
              (b)

            	 	
              Accounts

            	
              8

            
	 	
              (c)

            	 	
              Inspection
                and Audit

            	
              8

            
	 	
              (d)

            	 	
              Effect
                of Plan Amendment

            	
              8

            
	 	
              (e)

            	 	
              Returns,
                Reports and Information

            	
              8

            
	
              7

            	 	
              Compensation
                and Expenses

            	
              9

            
	
              8

            	 	
              Directions
                and Indemnification

            	
              9

            
	 	
              (a)

            	 	
              Identity
                of Administrator

            	
              9

            
	 	
              (b)

            	 	
              Directions
                from Administrator

            	
              9

            
	 	
              (c)

            	 	
              Directions
                from Participants

            	
              9

            
	 	
              (d)

            	 	
              Indemnification

            	
              10

            
	 	
              (e)

            	 	
              Survival

            	
              10

            
	
              9

            	 	
              Resignation
                or Removal of Trustee

            	
              10

            
	 	
              (a)

            	 	
              Resignation
                and Removal

            	
              10

            
	 	
              (b)

            	 	
              Termination

            	
              10

            
	 	
              (c)

            	 	
              Notice
                Period

            	
              10

            
	 	
              (d)

            	 	
              Transition
                Assistance

            	
              10

            
	 	
              (e)

            	 	
              Failure
                to Appoint Successor

            	
              11

            
	
              10

            	 	
              Successor
                Trustee

            	
              11

            
	 	
              (a)

            	 	
              Appointment

            	
              11

            
	 	
              (b)

            	 	
              Acceptance

            	
              11

            
	 	
              (c)

            	 	
              Corporate
                Action

            	
              11

            
	
              11

            	 	
              Resignation,
                Removal, and Termination Notices

            	
              11

            
	
              12

            	 	
              Duration

            	
              12

            
	
              13

            	 	
              Insolvency
                of Sponsor

            	
              12

            
	
              14

            	 	
              Amendment
                or Modification

            	
              13

            
	
              15

            	 	
              Electronic
                Services

            	
              13

            
	
              16

            	 	
              General

            	
              14

            
	 	
              (a)

            	 	
              Performance
                by Trustee, its Agents or Affiliates

            	
              14

            
	 	
              (b)

            	 	
              Entire
                Agreement

            	
              14

            
	 	
              (c)

            	 	
              Waiver

            	
              14

            
	 	
              (d)

            	 	
              Successors
                and Assigns

            	
              14

            
	 	
              (e)

            	 	
              Partial
                Invalidity

            	
              14

            
	 	
              (f)

            	 	
              Section
                Headings

            	
              15

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
              17

            	 	
              Assignment

            	
              15

            
	
              18

            	 	
              Force
                Majeure

            	
              15

            
	
              19

            	 	
              Confidentiality

            	
              15

            
	
              20

            	 	
              Governing
                Law

            	
              16

            
	 	
              (a)

            	 	
              Massachusetts
                Law Controls

            	
              16

            
	 	
              (b)

            	 	
              Trust
                Agreement Controls

            	
              16

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    TRUST
      AGREEMENT, dated as of February 1, 2006 , between Cree, Inc., a North
      Carolina corporation, having an office at 4600 Silicon Drive, Durham, NC
      27703-8475 (the “Sponsor”), and FIDELITY MANAGEMENT TRUST
      COMPANY, a Massachusetts trust company, having an office at 82
      Devonshire Street, Boston, Massachusetts 02109 (the “Trustee”).

    

    WITNESSETH:

    

    WHEREAS,
      the Sponsor is the sponsor of the Cree, Inc. Directors’ Deferred Compensation
      Plan (the “Plan”); and

    

    WHEREAS,
      the Sponsor wishes to establish an irrevocable trust and to contribute to the
      trust assets that shall be held therein, subject to the claims of Sponsor’s
      creditors in the event of Sponsor’s Insolvency, as herein defined, until paid to
      Participants and their beneficiaries in such manner and at such times as
      specified in the Plan; and

    

    WHEREAS,
      it is the intention of the parties that this Trust shall constitute an unfunded
      arrangement and shall not affect the status, of the Plan as an unfunded plan
      maintained for the purpose of providing deferred compensation for a select
      group
      of management or highly compensated employees for purposes of Title I of the
      Employee Retirement Income Security Act of 1974 (“ERISA”); and

    

    WHEREAS,
      it is the intention of the Sponsor to make contributions to the trust to provide
      itself with a source of funds to assist it in the meeting of its liabilities
      under the Plan; and

    

    WHEREAS,
      the Trustee is willing to hold and invest the aforesaid plan assets in trust
      among several investment options selected by the Sponsor; and

    

    WHEREAS,
      the Sponsor wishes to have the Trustee perform certain ministerial recordkeeping
      and administrative functions under the Plan; and

    

    WHEREAS,
      Cree, Inc. (the “Administrator”) is the administrator of the Plan;
      and

    

    WHEREAS,
      the Trustee is willing to perform recordkeeping and administrative services
      for
      the Plan if the services are purely ministerial in nature and are provided
      within a framework of plan provisions, guidelines and interpretations conveyed
      in writing to the Trustee by the Administrator.

    

    NOW,
      THEREFORE, in consideration of the foregoing premises and the mutual
      covenants and agreements set forth below, the Sponsor and the Trustee agree
      as
      follows:

     

    
      	
              1 Definitions

            

    

    

    The
      following terms as used in this Trust Agreement have the meaning indicated
      unless the context clearly requires otherwise:

    
      
        
        

      

      
        -
          1
          -

        
          

        

      

      
        
        

      

    

    (a) “Administrator”
      shall mean, with respect to the Plan, the person or entity which is the
“administrator” of such Plan.

    

    (b) ‘‘Agreement”
      shall mean this Trust Agreement, as the same may be amended and in effect from
      time to time.

    

    (c) “Business
      Day” shall mean any day on which the New York Stock Exchange (NYSE) is
      open.

    

    (d) “Code”
      shall mean the Internal Revenue Code of 1986, as it has been or may be amended
      from time to time.

    

    (e) “ERISA”
      shall mean the Employee Retirement Income Security Act of 1974, as it has been
      or may be amended from time to time.

    

    (f) “Fidelity
      Mutual Fund” shall mean any investment company advised by Fidelity
      Management & Research Company or any of its affiliates.

    

    (g) “Mutual
      Fund” shall refer both to Fidelity Mutual Funds and Non-Fidelity Mutual
      Funds.

    

    (h) “Non-Fidelity
      Mutual Fund” shall mean certain investment companies not advised by Fidelity
      Management &. Research Company or any of its affiliates.

    

    (i) “Participant”
      shall mean, with respect to the Plan, any employee (or former employee) with
      an
      account under the Plan, which has not yet been fully distributed and/or
      forfeited, and shall include the designated beneficiary(ies) with respect to
      the
      account of any deceased employee (or deceased former employee) until such
      account has been fully distributed and/or forfeited.

    

    (j) “Permissible
      Investment” shall mean the investments specified by the Employer as
      available for investment of assets of the Trust and agreed to by the Trustee
      and
      the Prototype Sponsor. The Permissible Investments under the Plan shall be
      listed in the Service Agreement.

    

    (k) “Plan”
      shall mean the Cree, Inc. Directors’ Deferred Compensation Plan.

    

    (1) “Reconciliation
      Period” shall mean the period beginning on the date of the initial transfer
      of assets to the Trust and ending on the date of the completion of the
      reconciliation of Participant records.

    

    (m) “Reporting
      Date” shall mean the last day of each calendar quarter, the date as of which
      the Trustee resigns or is removed pursuant to this Agreement and the date as
      of
      which this Agreement terminates pursuant to Section 9 hereof.

    

    (n) “Service
      Agreement” shall mean the agreement between the Trustee aid the Sponsor for
      the Trustee, through certain affiliates and related companies, to provide
      administrative and recordkeeping services for the Plan.

    
      
        
        

      

      
        -
          2
          -

        
          

        

      

      
        
        

      

    

    (o) “Sponsor”
      shall mean Cree, Inc., a North Caroline corporation, or any successor to all
      or
      substantially all of its businesses which, by agreement, operation of law or
      otherwise, assumes the responsibility of the Sponsor under this
      Agreement.

    

    (p) “Trust”
      shall mean the Cree, Inc. Directors’ Deferred Compensation Plan Trust, being the
      trust established by the Sponsor and the Trustee pursuant to the provisions
      of
      this Agreement.

    

    (q) “Trustee”
      shall mean Fidelity Management Trust Company, a Massachusetts trust company
      and
      any successor to all or substantially all of its trust business. The term
      Trustee shall also include any successor trustee appointed pursuant to this,
      agreement to the extent such successor agrees to serve as Trustee under this
      Agreement.

     

    
      	
              2 Trust

            

    

    

    (a) Establishment

    

    The
      Sponsor hereby establishes the Trust, with the Trustee. The Trust shall consist
      of an initial contribution of money or other property acceptable to the Trustee
      in its sole discretion, made by the Sponsor or transferred from a previous
      trustee under the Plan, such additional sums of money as shall from time to
      time
      be delivered to the Trustee under the Plan, all investments made therewith
      and
      proceeds thereof, and all earnings and profits thereon, less the payments that
      are made by the Trustee as provided herein, without distinction between
      principal and income. The Trustee hereby accepts the Trust on the terms and
      conditions set forth in this Agreement. In accepting this Trust, the Trustee
      shall be accountable for the assets received by it, subject to the terms and
      conditions of this Agreement

    

    (b) Grantor
      Trust

    

    The
      Trust
      is intended to be a grantor trust, of which the Sponsor is the grantor, within
      the meaning of subpart E, part I, subchapter J, chapter 1, subtitle A of the
      Code, as amended, and shall be construed accordingly,

    

    (c) Trust
      Assets

    

    The
      principal of the Trust, and any earnings thereon shall be held separate and
      apart from other funds of the Sponsor and shall be used exclusively for the
      uses
      and purposes of Participants and general creditors as herein set forth.
      Participants and their beneficiaries shall have no preferred claim on, or any
      beneficial ownership interest in, any assets of the Trust. Any rights created
      under the Plan and this Trust Agreement shall be mere unsecured contractual
      rights of Participants and their beneficiaries against the Sponsor. Any assets
      held by the Trust will be subject to the claims of the Sponsor’s general
      creditors under federal and state law in the event of Insolvency, as defined
      in
      this Agreement.

    

    
      
        
        

      

      
        -
          3
          -

        
          

        

      

      
        
        

      

    

    (d) Non-Assignment

    

    Benefit
      payments to Participants and their beneficiaries funded under this Trust may
      not
      be anticipated, assigned (either at law or in equity), alienated, pledged,
      encumbered, or subjected to attachment, garnishment, levy, execution, or other
      legal or equitable process.

    

    
      	
              3 Payments
                to Sponsor

            

    

    

    Except
      as
      provided under this Agreement, the Sponsor shall have no right to retain or
      divert to others any of the Trust assets before all payment of benefits have
      been made to the Participants and their beneficiaries pursuant to the terms
      of
      the Plan.

    

    
      	
              4 Disbursements

            

    

    

    (a)
      Directions from Administrator

    

    (i) If
      it is indicated in the Service Agreement that the Trustee will make
      distributions of Plan benefits directly to Participants and beneficiaries,
      the
      Trustee shall disburse monies to Participants and their beneficiaries for
      benefit payments in the amounts that the Administrator directs from time to
      time
      in writing. The Trustee shall have no responsibility to ascertain whether the
      Administrator’s direction complies with the terms of the Plan or of any
      applicable law. The Trustee shall be responsible for Federal or State income
      tax
      reporting or withholding with respect to such Plan benefits. The Trustee shall
      not be responsible for FICA (Social Security and Medicare), any Federal or
      State
      unemployment or local tax with respect to Plan distributions.

    

    (ii) If
      it is indicated in the Service Agreement that the Sponsor shall be responsible
      for making distributions of benefits to Participants and beneficiaries, then
      the
      Trustee shall disburse monies to the Administrator for benefit payments in
      the
      amounts that the Administrator directs from time to time in writing. The Trustee
      shall have no responsibility to ascertain whether the Administrator’s direction
      complies with the terms of the Plan or any applicable law. The Trustee shall
      not
      be responsible for: (1) making benefit payments to Participants under the Plan,
      (2) any federal, State or local income tax reporting or withholding with respect
      to such Plan benefits, and (3) FICA (Social Security and Medicare) or any
      Federal or State unemployment tax with respect to Plan
      distributions.

    

    (b) Limitations

    

    The
      Trustee shall not be required to make any disbursement in excess of the net
      realizable value of the assets of the Trust at the time of the disbursement.
      The
      Trustee shall not be required to make any disbursement in cash unless the
      Administrator has provided a written direction as to the assets to be converted
      to cash for the purpose of making the disbursement.

    
      
        
        

      

      
        -
          4
          -

        
          

        

      

      
        
        

      

    

    

    
      	
              5 Investment
                of Trust

            

    

    

    (a) Selection
      of Investment Options

    

    The
      Trustee shall have no responsibility for the selection of investment options
      under the Trust and shall not render investment advice to any person in
      connection with the selection of such options.

    

    (b) Available
      Investment Options

    

    The
      Sponsor shall direct the Trustee as to what investment options the Trust shall
      be invested in (i) during the Reconciliation Period, and (ii) following the
      Reconciliation Period, subject to the following limitations. The Sponsor may
      determine to offer as investment options only Permissible Investments as
      described in the Service Agreement; provided, however, that the Trustee shall
      not be considered a fiduciary with investment discretion. The Sponsor may add
      or
      remove investment options with the consent of the Trustee and upon mutual
      amendment of the Service Agreement to reflect such additions.

    

    (c) Investment
      Directions

    

    In
      order
      to provide for an accumulation of assets comparable to the contractual
      liabilities accruing under the Plan, the Sponsor may direct the Trustee in
      writing to invest the assets held in the Trust to correspond to the hypothetical
      investments made for Participants in accordance with their direction under
      the
      Plan.

    

    (d) Funding
      Mechanism

    

    The
      Sponsor’s designation of available investment options uinder paragraphs (a) and
      (b) above, the maintenance of accounts for each Plan Participant and the
      crediting of investments to such accounts, and the exercise by Participants
      of
      any powers relating to investments under this Section 5 are solely for the
      purpose of providing a mechanism for measuring the obligation of the Sponsor
      to
      any particular Participant under the applicable Plan. As further provided in
      this Agreement, no Participant or beneficiary will have any preferential claim
      to or beneficial ownership interest in any asset or investment held in the
      Trust, and the rights of any Participant and his or her beneficiaries under
      the
      applicable Plan and this Agreement are solely those of an unsecured general
      creditor of the Sponsor with respect to the benefits of the Participant under
      the Plan.

     

    (e) Mutual
      Funds

    

    The
      Sponsor hereby acknowledges that it has received from the Trustee a copy of
      the
      prospectus for each Mutual Fund selected by the Sponsor as a Plan investment
      option. Trust investments in Mutual Funds shall be subject to the following
      limitations:

    

    
      
        
        

      

      
        -
          5
          -

        
          

        

      

      
        
        

      

    

    (i) Execution
      of Purchases and Sales

    

    Purchases
      and sales of Permissible Investments (other than for Exchanges) shall be made
      on
      the date on which the Trustee receives from the Sponsor in good order all
      information and documentation necessary to accurately effect such purchases
      and
      sales (or in the case of a purchase, the subsequent date on which the Trustee
      has received a wire transfer of funds necessary to make such purchase).
      Exchanges of Permissible Investments shall be made on the same Business Day
      that
      the Trustee receives a proper direction if received before market close
      (generally 4:00 p.m. eastern time); if the direction is received after market
      close (generally 4:00 p.m. eastern time), the exchange shall be made the
      following Business Day.

    

    (ii) Voting

    

    At
      the
      time of mailing of notice of each annual or special stockholder’s meeting of any
      Mutual Fund, the Trustee shall send a copy of the notice and all proxy
      solicitation materials to the Sponsor, together with a voting direction form
      for
      return to the Trustee or its designee. The Trustee shall vote the shares held
      in
      the Trust in the manner as directed by the Sponsor. The Trustee shall not vote
      shares for which it has received no corresponding directions from the Sponsor.
      The Sponsor shall also have the right to direct the Trustee as to the manner
      in
      which all shareholder rights, other than the right to vote, shall be exercised.
      The Trustee shall have no duty to solicit directions from the
      Sponsor.

    

    (f) Trustee
      Powers

    

    The
      Trustee shall have the following powers and authority:

    

    (i) Subject
      to paragraphs (b), (c) and (d) of this Section 5, to sell, exchange, convey,
      transfer, or otherwise dispose of any property held in the Trust, by private
      contract or at public auction. No person dealing with the Trustee shall be
      bound
      to see to the application of the purchase money or other property delivered
      to
      the Trustee or to inquire into the validity, expediency, or propriety of any
      such sale or other disposition.

    

    (ii) To
      cause any securities or other property held as part of the Trust to be
      registered in the Trustee’s own name, in the name of one or more of its
      nominees, or in the Trustee’s account with the Depository Trust Company of New
      York and to hold any investments in bearer form, but the books and records
      of
      the Trustee shall at all times show that all such investments are part of the
      Trust.

    

    (iii) To
      keep that portion of the Trust in cash or cash balances as the Sponsor or
      Administrator may, from time to time, deem to be in the best interest of the
      Trust.

    

    (iv) To
      make, execute, acknowledge, and deliver any and all documents of transfer or
      conveyance and to carry out the powers herein granted.

    
      
        
        

      

      
        -
          6
          -

        
          

        

      

      
        
        

      

    

    (v) To
      borrow funds from a bank or other financial institution not affiliated with
      the
      Trustee in order to provide sufficient liquidity to process Plan transactions
      in
      a timely fashion, provided that the cost of borrowing shall be allocated in
      a
      reasonable fashion to the investment fund(s) in need of liquidity.

    

    (vi) To
      settle, compromise, or submit to arbitration any claims, debts, or damages
      due
      to or arising from the Trust; to commence or defend suits or legal or
      administrative proceedings; to represent the Trust in all suits and legal and
      administrative hearings; and to pay all reasonable expenses arising from any
      such action, from the Trust if not paid by these Sponsor.

    

    (vii) To
      employ legal, accounting, clerical, and other assistance as may be required
      in
      carrying out the provisions of this Agreement and to pay their reasonable
      expenses and compensation from the Trust if not paid by the
      Sponsor.

     

    (viii) To
      do all other acts although not specifically mentioned herein, as the Trustee
      may
      deem necessary to carry out any of the foregoing powers and the purposes of
      the
      Trust.

    

    Notwithstanding
      any powers granted to Trustee pursuant to this Trust Agreement or to applicable
      law, Trustee shall not have any power that could give this Trust the objective
      of carrying on a business and dividing the gains therefrom, within the meaning
      of Section 301.7701-2 of the Procedure and Administrative Regulations
      promulgated pursuant to the Internal Revenue Code.

    

    
      	
              6 Recordkeeping
                and Administrative Services to Be
                Performed

            

    

    

    (a) General

    

    The
      Trustee shall perform those recordkeeping and administrative functions described
      in the Service Agreement attached hereto. These recordkeeping and administrative
      functions shall be performed within the framework of the Administrator’s written
      directions regarding the Plan’s provisions, guidelines and
      interpretations.

    

    
      
        
        

      

      
        -
          7
          -

        
          

        

      

      
        
        

      

    

    (b) Accounts

    

    The
      Trustee shall keep accurate accounts of all investments, receipts,
      disbursements, and other transactions hereunder, and shall report the value
      of
      the assets held in the Trust as of the last day of each fiscal quarter of the
      Plan and, if not on the last day of a fiscal quarter, the date on which the
      Trustee resigns or is removed as provided in this Agreement or is terminated
      as
      provided in this Agreement, Within thirty (30) days following each Reporting
      Date or within sixty (60) days in the case of a Reporting Date caused by the
      resignation or removal of the Trustee, or the termination of this Agreement,
      the
      Trustee shall file with the Administrator a written account setting forth all
      investments, receipts, disbursements, and other transactions effected by the
      Trustee between the Reporting Date and the prior Reporting Date, and setting
      forth the value of the Trust as of the Reporting Date. Except as otherwise
      required under applicable law, upon the expiration of six (6) months from the
      date of filing such account with the Administrator, the Trustee shall have
      no
      liability or further accountability to anyone with respect to the propriety
      of
      its acts or transactions shown in such account, except with respect to such
      acts
      or transactions as to which the Sponsor shall within such six (6) month period
      file with the Trustee written objections.

    

    (c) Inspection
      and Audit

    

    All
      records generated by the Trustee in accordance with paragraphs (a) and (b)
      shall
      be open to inspection and audit, during the Trustee’s regular business hours
      prior to the termination of this Agreement, by the Administrator or any person
      designated by the Administrator. Upon the resignation or removal of the Trustee
      or the termination of this Agreement, the Trustee shall provide to the
      Administrator, at no expense to the Sponsor, in the format regularly provided
      to
      the Administrator, a statement of each Participant’s accounts as of the
      resignation, removal, or termination, and the Trustee shall provide to the
      Administrator or the Plan’s new recordkeeper such further records as are
      reasonable, at the Sponsor’s expense.

    

    (d) Effect
      of Plan Amendment

    

    The
      Trustee’s provision of the recordkeeping and administrative services set forth
      in this Section shall be conditioned on the Sponsor delivering to the Trustee
      a
      copy of any amendment to the Plan as soon as administratively feasible following
      the amendment’s adoption, and on the Administrator providing the Trustee on a
      timely basis with all the information the Administrator deems necessary for
      the
      Trustee to perform the recordkeeping and administrative services and such other
      information as the Trustee may reasonably request.

     

    (e) Returns,
      Reports and Information

    

    Except
      as
      set forth in the Service Agreement, the Administrator shall be responsible
      for
      the preparation and filing of all returns, reports, and information required
      of
      the Trust or Plan by law. The Trustee shall provide the Administrator with
      such
      information as the Administrator may reasonably request to make these filings.
      The Administrator shall also be responsible for making any disclosures to
      Participants required by law.

    
      
        
        

      

      
        -
          8
          -

        
          

        

      

      
        
        

      

    

    

    
      	
              7 Compensation
                and Expenses

            

    

    

    Sponsor
      shall pay to Trustee, within thirty (30) days of receipt of the Trustee’s bill,
      the fees for services in accordance with the Service Agreement. All fees for
      services are specifically outlined in the Service Agreement and are based on
      any
      assumptions identified therein.

    

    All
      reasonable expenses of plan administration as shown on the Service Agreement,
      as
      amended from time to time, shall be a charge against and paid from the
      appropriate plan Participants’ accounts, except to the extent such amounts are
      paid by the Plan Sponsor in a timely manner.

    

    All
      expenses of the Trustee relating directly to the acquisition and disposition
      of
      investments constituting part of the Trust, and all taxes of any kind whatsoever
      that may be levied or assessed under existing or future laws upon or in respect
      of the Trust or the income thereof, shall be a charge against and paid from
      the
      appropriate Participants’ accounts.

    

    
      	
              8 Directions
                and Indemnification

            

    

    

    (a) Identity
      of Administrator

    

    The
      Trustee shall be fully protected in relying on the fact that the Administrator
      under the Plan is the individual or persons named as such above or such other
      individuals or persons as the Sponsor may notify the Trustee in
      writing.

    

    (b) Directions
      from Administrator

    

    Whenever
      the Administrator provides a direction to the Trustee, the Trustee shall not
      be
      liable for any loss, or by reason of any breach, arising from the direction
      if
      the direction is contained in a writing (or is oral and immediately confirmed
      in
      a writing) signed by any individual whose name and signature have been submitted
      (and not withdrawn) in writing to the Trustee by the Administrator in the manner
      described in the Service Agreement, provided the Trustee reasonably believes
      the
      signature of the individual to be genuine. Such direction may be made via
      electronic data transfer (“EDT”) in accordance with procedures agreed to by the
      Administrator and the Trustee; provided, however, that the Trustee shall be
      fully protected in relying on such direction as if it were a direction made
      in
      writing by the Administrator. The Trustee shall have no responsibility to
      ascertain any direction’s (i) accuracy, (ii) compliance with the terms of the
      Plan or any applicable law, or (iii) effect for tax purposes or
      otherwise.

    

    (c) Directions
      from Participants

    

    The
      Trustee shall not be liable for any loss, which arises, from any Participant’s
      exercise or non-exercise of rights under this Agreement over the hypothetical
      assets in the Participant’s accounts.

     

    
      
        
        

      

      
        -
          9
          -

        
          

        

      

      
        
        

      

    

    (d) Indemnification

    

    The
      Sponsor shall indemnify the Trustee against, and hold the Trustee harmless
      from,
      any and all loss, damage, penalty, liability, cost, and expense, including
      without limitation, reasonable attorneys’ fees and disbursements, that may be
      incurred by, imposed upon, or asserted against the Trustee by reason of any
      claim, regulatory proceeding, or litigation arising from any act done or omitted
      to be done by any individual or person with respect to the Plan or Trust,
      excepting only any and all loss, etc., arising solely from the Trustee’s
      negligence or bad faith.

    

    (e) Survival

    

    The
      provisions of this Section 8 shall survive the termination of this
      Agreement.

    

    
      	
              9 Resignation
                or Removal of Trustee

            

    

    

    (a) Resignation
      and Removal

    

    (i) The
      Trustee may resign at any time in accordance with the notice provisions set
      forth below.

    

    (ii) The
      Sponsor may remove the Trustee at any time in accordance with the notice
      provisions set forth below.

    

    (b) Termination

    

    This
      Agreement may be terminated at any time by the Sponsor upon prior written notice
      to the Trustee in accordance with the notice provisions set forth
      below.

    

    (c) Notice
      Period

    

    In
      the
      event either party desires to terminate this Agreement or any Services
      hereunder, the party shall provide at least sixty-(60) days prior written notice
      of the termination date to the other party; provided, however, that the
      receiving party may agree, in writing, to a shorter notice period.

    

    (d) Transition
      Assistance

    

    In
      the
      event of termination of this Agreement, if requested by Sponsor, Fidelity shall
      assist Sponsor in developing a plan for the orderly transition of the Plan
      Data,
      cash and assets then constituting the Trustee and Services provided by Fidelity
      hereunder to Sponsor or its designee. Fidelity shall provide such assistance
      for
      a period not extending beyond sixty (60) days from the termination date of
      this
      Agreement, Fidelity shall provide to Sponsor, or to any person designated by
      Sponsor, at a mutually agreeable time, one file of the Plan Data prepared and
      maintained by Fidelity in the ordinary course of business, in Fidelity’s format.
      Fidelity may provide other or additional transition assistance as mutually
      determined for additional fees, which shall be due and payable by the Sponsor
      prior to any termination of this Agreement.

    
      
        
        

      

      
        -
          10
          -

        
          

        

      

      
        
        

      

    

    (e) Failure
      to Appoint Successor

    

    If,
      by
      the termination date, the Sponsor has not notified the Trustee in writing as
      to
      the individual or entity to which the assets and cash are to be transferred
      and
      delivered, the Trustee may bring an appropriate action or proceeding for leave
      to deposit the assets and cash in a court of competent jurisdiction. The Trustee
      shall be reimbursed by the Sponsor for all costs and expenses of the action
      or
      proceeding including, without limitation, reasonable attorneys’ fees and
      disbursements.

     

    
      	
              10 Successor
                Trustee

            

    

    

    (a) Appointment

    

    If
      the
      office of Trustee becomes vacant for any reason, the Sponsor may in writing
      appoint a successor trustee under this Agreement. The successor trustee shall
      have all of the rights, powers, privileges, obligations, duties, liabilities,
      and immunities granted to the Trustee under this Agreement. The successor
      trustee and predecessor trustee shall not be liable for the acts or omissions
      of
      the other with respect to the Trust.

    

    (b) Acceptance

    

    When
      the
      successor trustee accepts its appointment under this Agreement, title to and
      possession of the Trust assets shall immediately vest in the successor trustee
      without any further action on the part of the predecessor trustee. The
      predecessor trustee shall execute all instruments and do all acts that
      reasonably may be necessary or reasonably may be requested in writing by the
      Sponsor or the successor trustee to vest title to all Trust assets in the
      successor trustee or to deliver all Trust assets to the successor
      trustee.

    

    (c) Corporate
      Action

    

    Any
      successor of the Trustee or successor trustee, through sale or transfer of
      the
      business or trust department of the Trustee or successor trustee, or through
      reorganization, consolidation, or merger, or any similar transaction, shall,
      upon consummation of the transaction, become the successor trustee under this
      Agreement.

    

    
      	
              11 Resignation,
                Removal, and Termination
                Notices

            

    

    

    All
      notices of resignation, removal, or termination under this Agreement must be
      in
      writing and mailed to the party to which the notice is being given by certified
      or registered mail, return receipt requested, to the Sponsor at the address
      designated in the Service Agreement, and to the Trustee c/o John M. Kimpel,
      Fidelity Investments, 82 Devonshire Street, F7A. Boston, Massachusetts 02109,
      or
      to such other addresses as the parties have notified each other of in the
      foregoing manner.

    
      
        
        

      

      
        -
          11
          -

        
          

        

      

      
        
        

      

    

    

    
      	
              12 Duration

            

    

    

    This
      Trust shall continue in effect without limit as to time, subject, however,
      to
      the provisions of this Agreement relating to amendment, modification, and
      termination thereof.

    

    
      	
              13 Insolvency
                of Sponsor

            

    

    

    (a) Trustee
      shall cease disbursement of funds for payment of benefits to Participants and
      their beneficiaries if the Sponsor is Insolvent. Sponsor shall be considered
      “Insolvent” for purposes of this Trust Agreement if (i) Sponsor is unable to pay
      its debts as they become due, or (ii) Sponsor is subject to a pending proceeding
      as a debtor under the United States Bankruptcy Code.

    

    (b) All
      times during the continuance of this Trust, the principal and income of the
      Trust shall be subject to claims of general creditors of the Sponsor under
      federal and state law as set forth below.

     

    (i) The
      Board of Directors and the Chief Executive Officer of the Sponsor shall have
      the
      duty to inform Trustee in writing of Sponsor’s Insolvency. If a person claiming
      to be a creditor of the Sponsor alleges in writing to Trustee that Sponsor
      has
      become Insolvent, Trustee shall determine whether Sponsor is Insolvent and,
      pending such determination, Trustee shall discontinue disbursements for payment
      of benefits to Participants or their beneficiaries.

    

    (ii) Unless
      Trustee has actual knowledge of Sponsor’s Insolvency, or has received notice
      from Sponsor or a person claiming to be a creditor alleging that Sponsor is
      Insolvent, Trustee shall have no duty to inquire whether Sponsor is Insolvent.
      Trustee may in all events rely on such evidence concerning Sponsor’s solvency as
      may be furnished to Trustee and that provides Trustee with a reasonable basis
      for making a determination concerning Sponsor’s solvency.

    

    (iii) If
      at any time Trustee has determined that Sponsor is Insolvent, Trustee shall
      discontinue disbursements for payments to Participants or their beneficiaries
      and shall hold the assets of the Trust for the benefit of Sponsor’s general
      creditors. Nothing In this Trust Agreement shall in any way diminish any rights
      of Participants or their beneficiaries to pursue their rights as general
      creditors of Sponsor with respect to benefits due under the Plan or
      otherwise.

    

    (iv) Trustee
      shall resume disbursement for the payment of benefits to Plan Participants
      or
      their beneficiaries in accordance with this Agreement only after Trustee has
      determined that Sponsor is not Insolvent (or is no longer
      Insolvent).

    

    
      
        
        

      

      
        -
          12
          -

        
          

        

      

      
        
        

      

    

    (c) Provided
      that there are sufficient assets, if Trustee discontinues the payment of
      benefits from the Trust pursuant to (a) hereof and subsequently resumes such
      payments, the first payment following such discontinuance shall include the
      aggregate amount of all payments due to Participants or their beneficiaries
      under the terms of the Plan for the period of such discontinuance, less the
      aggregate amount of any payments made to Participants or their beneficiaries
      by
      Sponsor in lieu of the payments provided for hereunder during any such period
      of
      discontinuance.

    

    
      	
              14 Amendment
                or Modification

            

    

    

    This
      Agreement may be amended or modified at any time and from time to time only
      by
      an instrument executed by both the Sponsor and the Trustee.

    

    
      	
              15 Electronic
                Services

            

    

    

    (a) The
      ‘Trustee may provide communications and services (“Electronic Services”) and/or
      software products (“Electronic Products”) via electronic media, including, but
      not limited to Fidelity Plan Sponsor WebStation. The Sponsor and its agents
      agree to use such Electronic Services and Electronic Products only in the course
      of reasonable administration of or participation in the Plan and to keep
      confidential and not publish, copy, broadcast, retransmit, reproduce,
      commercially exploit or otherwise re disseminate the Electronic Products or
      Electronic Services or any portion thereof without the Trustee’s written
      consent, except, in cases where Trustee has specifically notified the Sponsor
      that the Electronic Products or Services are suitable for delivery to Sponsor’s
      Participants, for non-commercial personal use by Participants or beneficiaries
      with respect to their participation in the Plan or for their other retirement
      planning purposes.

    

    (b) The
      Sponsor shall be responsible for installing and maintaining all Electronic
      Products, (including any programming required to accomplish the installation)
      and for displaying any and all content associated with Electronic Services
      on
      its computer network and/or intranet so that such content will appear exactly
      as
      it appears when delivered to Sponsor. All Electronic Products and Services
      shall
      be clearly identified as originating from the Trustee or its affiliate. The
      Sponsor shall promptly remove Electronic Products or Services from its computer
      network and/or intranet, or replace the Electronic Products or Services with
      updated products or services provided by the Trustee, upon written notification
      (including written notification via facsimile) by the Trustee.

    

    (c) All
      Electronic Products shall be provided to the Sponsor without any express or
      implied legal warranties or acceptance of legal liability by the Trustee, and
      all Electronic Services shall be provided to the Sponsor without acceptance
      of
      legal liability related to or arising out of the electronic nature of the
      delivery’ or provision of such Services. Except as otherwise stated in this
      Agreement, no rights are conveyed to any property, intellectual or tangible,
      associated with the contents of the Electronic Products or Services and related
      material. The Trustee hereby grants to the Sponsor a non-exclusive,
      non-transferable revocable right and license to use the Electronic Products
      and
      Services in accordance with the terms and conditions of this
      Agreement

    
      
        
        

      

      
        -
          13
          -

        
          

        

      

      
        
        

      

    

    (d) To
      the extent that any Electronic Products or Services utilize Internet services
      to
      transport data or communications, the Trustee will take, and Sponsor agrees
      to
      follow, reasonable security precautions, however, the Trustee disclaims any
      liability for interception of any such data or communications. The Trustee
      reserves the right not to accept data or communications transmitted via
      electronic media by the Sponsor or a third party if it determines that the
      media
      does not provide adequate data security, or if it is not administratively
      feasible for the Trustee to use the data security provided. The Trustee shall
      not be responsible for, and makes no warranties regarding access, speed or
      availability of Internet or network services, or any other service required
      for
      electronic communication. The Trustee shall not be responsible for any loss
      or
      damage related to or resulting from any changes or modifications to the
      Electronic Products or Services after delivering it to the Sponsor.

    

    
      	
              16 General

            

    

    

    (a) Performance
      by Trustee, its Agents or Affiliates

    

    The
      Sponsor acknowledges and authorizes that the services to be provided under
      this
      Agreement shall be provided by the Trustee, its agents or affiliates, including
      but not limited to Fidelity Investments Institutional Operations Company, Inc.
      or its successor, and that certain of such services may be provided pursuant
      to
      one or more other contractual agreements or relationships

    

    (b) Entire
      Agreement

    

    This
      Agreement contains all of the terms agreed upon between the parties with respect
      to the subject matter hereof.

    

    (c) Waiver

    

    No
      waiver
      by either party of any failure or refusal to comply with an obligation hereunder
      shall be deemed a waiver of any other or subsequent failure or refusal to so
      comply.

    

    (d) Successors
      and Assigns

    

    The
      stipulations in this Agreement shall inure to the benefit of, and shall bind,
      the successors and assigns of the respective parties.

    

    (e) Partial
      Invalidity

    

    If
      any
      term or provision of this Agreement or the application thereof to any person
      or
      circumstances shall, to any extent, be invalid or unenforceable, the remainder
      of this Agreement, or the application of such term or provision to persons
      or
      circumstances other than those as to which it is held invalid or unenforceable,
      shall not be affected thereby, and each term and provision of this Agreement
      shall be valid and enforceable to the fullest extent permitted by
      law.

    

    
      
        
        

      

      
        -
          14
          -

        
          

        

      

      
        
        

      

    

    (f) Section
      Headings

    

    The
      headings of the various sections and subsections of this Agreement have been
      inserted only for the purposes of convenience and are not part of this Agreement
      and shall not be deemed in any manner to modify, explain, expand or restrict
      any
      of the provisions of this Agreement.

    

    
      	
              17 Assignment

            

    

    

    This
      Agreement, and any of its rights and obligations hereunder, may not be assigned
      by any party without the prior written consent of the other party(ies), and
      such
      consent may be withheld in any party’s sole discretion. Notwithstanding the
      foregoing, Trustee may assign this Agreement in whole or in part, and any of
      its
      rights and obligations hereunder, to a subsidiary or affiliate of Trustee
      without consent of the Sponsor. All provisions in this Agreement shall extend
      to
      and be binding upon the parties hereto and their respective successors and
      permitted assigns.

    

    
      	
              18 Force
                Majeure

            

    

    

    No
      party
      shall be deemed in default of this Agreement to the extent that any delay or
      failure in performance of its obligation(s) results, without its fault or
      negligence, from any cause beyond its reasonable control, such as acts of God,
      acts of civil or military authority, embargoes, epidemics, war, riots,
      insurrections, fires, explosions, earthquakes, floods, unusually severe weather
      conditions, power outages or strikes. This clause shall not excuse any of the
      parties to the Agreement from any liability which results from failure to have
      in place reasonable disaster recovery and safeguarding plans adequate for
      protection of all data each of the parties to the Agreement are responsible
      for
      maintaining for the Plan.

    

    
      	
              19 Confidentiality

            

    

    

    Both
      parties to this Agreement recognize that in the course of implementing and
      providing the services described herein, each party may disclose to the other
      confidential information. All such confidential information, individually and
      collectively, and other proprietary information disclosed by either party shall
      remain the sole property of the party disclosing the same, and the receiving
      party shall have no interest or rights with respect thereto if so designated
      by
      the disclosing party to the receiving party. Each party agrees to maintain
      all
      such confidential information in trust and confidence to the same extent that
      it
      protects its own proprietary information, and not to disclose such confidential
      information to any third party without the written consent of the other party.
      Each party further agrees to take all reasonable precautions to prevent any
      unauthorized disclosure of confidential information. In addition, each party
      agrees not to disclose or make public to anyone, in any manner, the terms of
      this Agreement, except as required by law, without the prior written consent
      of
      the other party.

    
      
        
        

      

      
        -
          15
          -

        
          

        

      

      
        
        

      

    

     

    
      	
              20 Governing
                Law

            

    

    

    (a) Massachusetts
      Law Controls

    

    This
      Agreement is being made in the Commonwealth of Massachusetts, and the Trust
      shall be administered as a Massachusetts trust. The validity, construction,
      effect, and administration of this Agreement shall be governed by and
      interpreted in accordance with the laws of the Commonwealth of Massachusetts,
      except to the extent those laws are superseded under Section 514 of
      ERISA.

    

    (b) Trust
      Agreement Controls

    

    The
      Trustee is not a party to the Plan, and in the event of any conflict between
      the
      provisions of the Plan and the provisions of this Agreement, the provisions
      of
      this Agreement shall control.

     

    
      
        
        

      

      
        -
          16
          -

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be
      executed by their duly authorized officers as of the day and year first above
      written.

    

     

    
      	 Plan
              Sponsor Name:	 Cree,
              Inc.	 
	 	 	 
	 	
              By:

            	
              /s/
                Adam H. Broome

            
	 	 	 
	 	
              Name:

            	
              Adam
                H. Broome

            
	 	 	 
	 	
              Title:

            	
              Vice
                President, Legal

            
	 	 	 
	 	
              Date:

            	
              December
                8, 2005

            

    

    

     

     

    

    
      	 FIDELITY
              MANAGEMENT TRUST COMPANY
	 	 	 
	 	
              By:

            	
              /s/
                Jean A. Sturgeon

            
	 	 	 
	 	
              Name:

            	
              Jean
                A. Sturgeon

            
	 	 	 
	 	
              Title:

            	
              Authorized
                Signatory

            
	 	 	 
	 	
              Date:

            	
              12/12/2005

            

    

    

    

    
      
        
        

      

      
        -
          17
          -

        
          

        

      

      
        
        

      

    

    AMENDMENT
      TO

    TRUST
      AGREEMENT

    Between

    CREE,
      INC.

    And

    FIDELITY
      MANAGEMENT TRUST COMPANY

    

    THIS
      AMENDMENT, effective the
      1st day of February, 2006, by CREE, INC. (the “Sponsor”) and FIDELITY
      MANAGEMENT TRUST COMPANY (the “Trustee”);

     

    WITNESSETH:

    

    WHEREAS,
      the Sponsor and the Trustee
      entered into a certain Trust Agreement dated February 1, 2006 (the “Trust
      Agreement”); and

    

    WHEREAS,
      the Sponsor and the Trustee
      desire to amend the Trust Agreement to modify the indemnification provisions
      thereof.

    

    NOW,
      THEREFORE, in consideration of the
      premises herein contained, the Sponsor and the Trustee agree to amend the Trust
      Agreement by deleting subparagraph (d) of Section 8 of the Trust Agreement
      and
      substituting in lieu thereof the following:

    

    (d) Indemnification.
      Except
      as provided below, Sponsor shall defend and indemnify Trustee, its affiliates
      and their respective directors, officers, employees and agents and hold them
      harmless against that portion of any and all liabilities, losses, costs or
      expenses (including reasonable legal fees and expenses) of whatsoever kind
      and
      nature which may be imposed on, incurred by or asserted against Trustee at
      any
      time if such liability, loss, cost or expense results from the Sponsor’s
      negligence, or willful misconduct relating to or arising out of the Sponsor’s
      obligations under this Agreement or the Sponsor’s breach of this Agreement.
      Notwithstanding the foregoing, Trustee shall be entitled to no indemnification
      hereunder to the extent its liabilities, losses, costs or expenses are
      attributed to its own gross negligence or willful misconduct.

    

    Trustee
      shall defend and indemnify the Sponsor, its affiliates and their respective
      directors, officers, employees and agents and hold them harmless against that
      portion of any and all liabilities, losses, costs or expenses (including
      reasonable legal fees and expenses) of whatsoever kind and nature which may
      be
      imposed on, incurred by or asserted against the Sponsor at any time if such
      liability, loss, cost or expense results from Trustee’s negligence, bad faith,
      or willful misconduct relating to or arising out of the Trustee’s obligations
      under this Agreement or Trustee’s breach of this Agreement. Notwithstanding the
      foregoing, the Sponsor shall be entitled to no indemnification hereunder to
      the
      extent its liabilities, losses, costs or expenses are attributed to its own
      gross negligence or willful misconduct.

    
      
        
        

      

      
        
          

        

      

      
        
        

      

    

    

    The
      party
      seeking indemnification above must notify the indemnifying party within 30
      days
      in writing of any actual or threatened action, suit or proceeding to which
      it
      claims such indemnification applies. Failure to so notify the indemnifying
      party
      shall not be deemed a waiver of the right to seek indemnification, unless the
      actions of the indemnifying party have been prejudiced by the failure of the
      other party to provide notice within the required time period. The indemnifying
      party may then take steps to be joined as a party to such proceeding, and the
      party seeking indemnification shall not oppose any such joinder. Whether or
      not
      such joinder takes place, the indemnifying party shall provide the defense
      with
      respect to claims to which this section applies and in doing so shall have
      the
      right to control the defense and settlement with respect to such claims. The
      party seeking indemnification may assume responsibility for the direction of
      its
      own defense at any time, including the right to settle or compromise any claim
      against it without the consent of the indemnifying party, provided that in
      doing
      so it shall be deemed to have waived its right to indemnification except in
      cases where the indemnifying party has declined to defend against the
      claim.

    

    IN
      WITNESS WHEREOF, the Sponsor and the
      Trustee have caused this instrument to be executed by their duly authorized
      officers as of the day and year first above written.

    

    

    
      	 CREE,
              INC.
	 	 	 
	 	
              By:

            	
              /s/
                Adam H. Broome

            
	 	 	 
	 	
              Name:

            	
              Adam
                H. Broome

            
	 	 	 
	 	
              Title:

            	
              Vice
                President, Legal

            
	 	 	 
	 	
              Date:

            	
              December
                8, 2005

            

    

    

     

     

    

    
      	 FIDELITY
              MANAGEMENT TRUST COMPANY
	 	 	 
	 	
              By:

            	
              /s/
                Jean A. Sturgeon

            
	 	 	 
	 	
              Name:

            	
              Jean
                A. Sturgeon

            
	 	 	 
	 	
              Title:

            	
              Authorized
                Signatory

            
	 	 	 
	 	
              Date:

            	
              12/12/2005Exhibit 10.14 to Vascular Solutions, Inc. Form 10-K dated December 31, 2005

Exhibit 10.14  

Silicon Valley Bank

Amendment to Loan Agreement

Borrower:  VASCULAR SOLUTIONS, INC. 

Date:           December 29, 2005 

        THIS AMENDMENT TO LOAN
AGREEMENT (“Amendment”) is entered into between Silicon Valley Bank (“Silicon”) and the borrower named
above (“Borrower”), with reference to the following facts: 

        A.
       Silicon and Borrower are parties to that certain Loan and Security Agreement, with an
Effective Date of December 31, 2003 (as amended, the “Loan Agreement”). (The Loan Agreement and all other present
and future documents, instruments and agreements relating thereto are referred to herein collectively as the “Loan
Documents”. Capitalized terms used in this Agreement which are not defined herein shall have the meanings set forth in the
Loan Agreement.) 

        B.
       The parties desire to amend the Loan Agreement as set forth in this Amendment.

        The parties agree as follows:

        1.
       Revolving
Maturity Date.  The definition of “Revolving Maturity Date,” which
is contained in Section 13.1 of the Loan Agreement, is hereby amended from
“December 29, 2005” to “December 28, 2006”.

        2.
       Equipment
Advances.  The following new Section is added to the Loan Agreement following
existing Section 2.1.1. 

      
            2.1.2.
Equipment Advances. 

	  	
(a)    Availability.  Subject to the terms and conditions of this Agreement, and
provided that no Default or Event of Default then exists, during the Draw
Period, Bank shall make advances (each, an “Equipment Advance” and,
collectively, “Equipment Advances”) not exceeding the Equipment Line.
Equipment Advances may only be used to finance Eligible Equipment purchased
within ninety (90) days (determined based upon the applicable invoice date of
such Eligible Equipment) before the date of the Equipment Advance, except that
the Initial Equipment Advance (as defined below) may be used to finance Eligible
Equipment purchased on or after January 1, 2005. No Equipment Advance may exceed
100% of the total invoice for Eligible Equipment, excluding software, leasehold
improvements, taxes, shipping, warranty charges, freight, and installation
expenses, and other soft costs, except that up to 30% of an Equipment Advance
may relate to transferable software licenses, leasehold improvements and other
soft costs, including sales tax, shipping, freight and installation expenses
relating to such Eligible Equipment. Each Equipment Advance, other than the
final Equipment Advance, must be in an amount equal to at least $50,000.
Borrower agrees to borrow at least $1,000,000 of Equipment Advances in
accordance with this Agreement on or before January 6, 2006 (the “Initial
Equipment Advance”). The provisions of Section 2.1.1(d) apply, without
limitation, to Bank’s obligation to make any Equipment Advance.

	  	
(b)    Payment.  Interest accrues from the date of each Equipment Advance at the
rate in Section 2.3(a) and is payable monthly beginning on the first day of the
month following such Equipment Advance and continuing on the first day of each
month thereafter. Each Equipment Advance shall be repaid by the Borrower to Bank
in 30 equal monthly payments of principal, commencing on the first day of the
sixth month following the date the Equipment Advance was made and continuing on
the first day of each month thereafter until the Equipment Maturity Date, on
which date the entire unpaid principal balance of the Equipment Advance, plus
all accrued and unpaid interest thereon, shall be due and payable. Borrower may
prepay the principal of Equipment Advances at its option, such prepayments to be
applied to principal payments in the inverse order of maturity. Equipment
Advances may not be repaid and re-borrowed. Financed Equipment shall not be
subject to any Liens in favor of any other Person (including without limitation
Liens which would fall within the definition of “Permitted Liens”).

	  	
(c)    Prepayment Upon an Event of Loss.  Borrower shall bear the risk of any loss,
theft, destruction, or damage of or to the Financed Equipment. If, during the
term of this Agreement, any item of Financed Equipment becomes obsolete or is
lost, stolen, destroyed, damaged beyond repair, rendered permanently unfit for
use, or seized by a governmental authority for any reason for a period equal to
at least the remainder of the term of this Agreement (an “Event of
Loss”), then, within ten (10) days following such Event of Loss, at
Borrower’s option, Borrower shall (i) pay to Bank on account of the
Obligations all accrued interest to the date of the prepayment, plus all
outstanding principal owing with respect to the Financed Equipment subject to
the Event of Loss; or (ii) repair or replace the Financed Equipment subject to
an Event of Loss provided the repaired or replaced Financed Equipment is of
equal or like value to the Financed Equipment subject to an Event of Loss and
provided further that Bank has a first priority perfected security interest in
such repaired or replaced Financed Equipment. 

	  	
(d)    Equipment Advance Request.  To obtain an Equipment Advance, Borrower must
notify Bank (the notice is irrevocable) by facsimile no later than 12:00 p.m.
Pacific time 1 Business Day before the day on which the Equipment Advance is to
be made. The notice in the form of Exhibit B (Payment/Advance Form) must be
signed by a Responsible Officer or designee and include a copy of the invoice(s)
for the Equipment being financed. Borrower represents, warrants and covenants
that it will only request Equipment Advances for purposes of financing the
purchase of new (as opposed to “used”) Eligible Equipment.

-2-  

	  	
(e)    Borrower shall not remove any Financed Equipment from the Eligible Equipment
Location unless the Equipment Advance that financed such Financed Equipment has
been repaid to Bank in full. 

        3.
       Interest Rate.  The first
full sentence of Section 2.3(a) of the Loan Agreement – Interest
Rate – reads as follows: 

	  	
Revolving
Advances accrue interest on the outstanding principal balance at a per annum  rate
equal to one-half of one percentage point (0.50%) above the Prime Rate. 

Said sentence is hereby amended to
read as follows: 

	  	
Revolving
Advances accrue interest on the outstanding principal balance at a per annum rate equal
to one-half of one percentage point (0.50%) above the Prime Rate, and Equipment
Advances accrue interest on the outstanding principal balance at a per annum rate equal to
one and one-half of one percentage point (1.50%) above the Prime Rate. 

        4.
       Payments.  The first full
sentence of Section 2.3(b) of the Loan Agreement—Payments—reads as
follows: 

	  	
Interest due on the Committed Revolving Line is payable on the 25th
day of each month for the period ending at the end of the day preceding such
25th day. 

Said sentence is hereby amended to
read as follows: 

	  	
Interest due on the Committed Revolving Line is payable on the 25th
day of each month for the period ending at the end of the day preceding such
25th day, and interest due on Equipment Advances is payable as set
forth in Section 2.12(b). 

        5.
       Insurance.  The following
sentence is hereby added to the end of Section 6.5 of the Loan Agreement:
“Without limiting the generality of the foregoing, the Borrower shall
insure the Financed Equipment for not less than the replacement value thereof.

        6.
       Tangible
Net Worth.  Section 6.7 of the Loan Agreement reads as follows:  

	  	
Borrower
will maintain at all times:  

	  	  	(i) 	  	Tangible
Net Worth. A Tangible Net Worth of more than $11,000,000.  

-3-  

	  	  	(ii)  	  	Liquidity
Coverage. A ratio of (A) unrestricted domestic cash (and equivalents)
plus the amount of Eligible Accounts, divided by (B) the aggregate amount
of Obligations outstanding hereunder, of not less than 1.25 to 1.00.

Said Section 6.7 is hereby amended to
read as follows: 

	  	
Borrower
will maintain at all times:  

	  	  	(i)  	  	Tangible
Net Worth. A Tangible Net Worth of not less than (i) $11,000,000 through and
including August 31, 2006, (ii) $12,000,000 from September 1, 2006 through and
including November 30, 2006, and (iii) $13,000,000 from December 1, 2006 and at
all times thereafter. 

	  	  	(ii)  	  	Liquidity
Coverage. A ratio of (A) unrestricted domestic cash (and equivalents)
plus the amount of Eligible Accounts, divided by (B) the aggregate amount
of Obligations outstanding hereunder (excluding outstanding Equipment Advances),
of not less than 1.25 to 1.00. 

        7.
       Dispositions.  Clause (iii)
of Section 7.1 of the Loan Agreement reads as follows: “(iii) of worn-out
or obsolete Equipment”. Said clause “iii” is hereby amended to
read as follows: “(iii) of worn-out or obsolete Equipment that does not
constitute Financed Equipment”. 

        8.
       New Definitions.  The
following definitions are hereby added to Section 13.1 of the Loan Agreement, in
the appropriate alphabetical order: 

	  	
“Draw
Period” is the period of time beginning December 29, 2005 and continuing through
the earlier of December 28, 2006 or the occurrence of an Event of Default. 

	  	
“Eligible
Equipment” is general purpose computer equipment, office equipment, test and
laboratory equipment, and furnishings that are located at the Eligible Equipment Location
and that comply with all of Borrower’s representations and warranties to Bank and
against which Bank has a first priority Lien. 

	  	
“Eligible
Equipment Location” is Borrower’s corporate headquarters at 6464 Sycamore
Court, Minneapolis, Minnesota 55369, provided that up to an aggregate of $400,000 of
Financed Equipment (valued at cost) may be located at Sigma Aldrich’s premises at
3500 DeKalb Street, St. Louis, Missouri 63118 and 3506 S. Broadway, St. Louis, Missouri
63118 if before February 1, 2006 (i) Sigma Aldrich has provided Bank with a bailee
agreement acceptable to Bank concerning Bank’s interest in such Financed Equipment or
(ii) Bank has waived such bailee agreement in writing. 

	  	
“Equipment
Advance” is defined in Section 2.1.2.  

	  	
“Equipment
Line” is an Equipment Advance or Equipment Advances in an aggregate amount of up
to $2,000,000. 

-4-  

	  	
“Equipment
Maturity Date” is, for each Equipment Advance, the earliest of (a) the first day
of the 36th month following such Equipment Advance, or (b) the occurrence of an
Event of Default. 

	  	
“Financed
Equipment” is all present and future Eligible Equipment and other Collateral in
which Borrower has any interest, the purchase of which is financed by an Equipment
Advance. 

        9.
       Amended
Definition.  The definition of the following term set forth in Section 13.1
of the Loan Agreement is hereby amended to read as follows: 

	  	
“Credit
Extension” is each Revolving Advance, Equipment Advance and other extension of
credit or credit accommodation by Bank for Borrower’s benefit. 

        10.
     New
Facility Fee.  Borrower shall pay to Silicon a fee of $25,000 concurrently
herewith, which shall be in addition to interest and to all other amounts
payable hereunder and under the Loan Documents and which shall not be
refundable. Silicon is authorized to charge said fee to Borrower’s loan
account or any of Borrower’s deposit accounts maintained with Silicon.

        11.
     Amendment
Regarding Existing Fees.  Subsection 2.4(a) of the Loan Agreement –
Facility Fee – is hereby amended to read in its entirety as follows:
“(a) [Omitted]”. Subsect 2.4(c) – Unused Line Fee – of the
Loan Agreement is hereby amended to read in its entirety as follows: “(c)
[Omitted]”. 

        12.
     Borrowing Base.  The
definition of “Borrowing Base” contained in Section 13.1 of the Loan
Agreement reads as follows: 

	  	
“Borrowing
Base” shall mean:  

	  	
(A)    up to 75% of Eligible Accounts as determined and confirmed by Bank from
Borrower’s most recent Borrowing Base Certificate; provided,
however, that Bank may lower the percentage of the Borrowing Base after
performing an audit of Borrower’s Collateral in Bank’s good faith
business judgment; and 

	  	
(B)    up
to 25% of Eligible Inventory, provided that Advances hereunder based on Eligible
Inventory shall at no time exceed the lesser of (i) $1,500,000 or (ii) 33% of
the amount of Eligible Accounts, as applicable from time to time.  

Said definition is hereby amended to
read as follows: 

	  	
“Borrowing
Base” shall mean:  

	  	
(A)    up to 75% of Eligible Accounts; provided, however, that Bank
may lower the percentage of the Borrowing Base after performing an audit of
Borrower’s Collateral in Bank’s good faith business judgment; plus

-5-  

	  	
(B)    up
to 25% of Eligible Inventory, provided that Advances hereunder based on Eligible
Inventory shall at no time exceed the lesser of (i) $1,500,000 or (ii) 33% of
the amount of Eligible Accounts, as applicable from time to time; plus  

	  	
(C)    up to 50% of Borrower’s unrestricted cash which is held at Bank and is
subject to Bank’s first-priority perfected security interest; 

	  	
as the foregoing are determined and confirmed by Bank from Borrower’s most
recent Borrowing Base Certificate. 

        13.
     Representations True.  Borrower
represents and warrants to Silicon that all representations and
warranties set forth in the Loan Agreement, as amended hereby, are true and
correct. 

        14.
     General Provisions.  This
Amendment, the Loan Agreement, any prior written amendments to the Loan
Agreement signed by Silicon and Borrower, and the other Loan Documents set forth
in full all of the representations and agreements of the parties with respect to
the subject matter hereof and supersede all prior discussions, representations,
agreements and understandings between the parties with respect to the subject
hereof. Except as herein expressly amended, all of the terms and provisions of
the Loan Agreement, and all other Loan Documents shall continue in full force
and effect and the same are hereby ratified and confirmed. This Amendment is
part of the Loan Agreement and its terms are incorporated herein. 

	Borrower:		Silicon:
	 
	VASCULAR SOLUTIONS, INC.		SILICON VALLEY BANK
	 
	 
	By 	 
		By 	 

		  President or Vice President	 	Title 	 

-6-  

EXHIBIT B 

LOAN PAYMENT/ADVANCE
REQUEST FORM  

                DEADLINE
FOR SAME DAY PROCESSING IS 12:00 P.S.T. 

	Fax To: 952-475-8471 	Date:  	 

		o LOAN PAYMENT:		
	 
		
                
                         __________________ (Borrower)

        		
	 
		From Account #  ________________________________		To Account #  ________________________________
		
             
                (Deposit Account #)		                
         (Loan Account #)
	 
	 
		Principal $ ________________________________ and/or Interest $ ______________________________________
				

All Borrower’s representation
and warranties in the Loan and Security Agreement are true, correct and complete in all
material respects up to and including the date of the transfer request for a loan payment,
but those representations and warranties expressly referring to another date shall be
true, correct and complete in all material respects as of that date: 

		
		

Authorized Signature:________________________________  Phone Number:______________________________  

		o LOAN ADVANCE:		
	 
		
        
Complete Outgoing Wire Request section below if all or a portion of the funds from this loan

advance are for an outgoing wire.

	 
	 
		From Account #  new
                    
              
                    		To Account #  ________________________________
		
             
                (Loan Account #)		                
         (Deposit Account #)
	 
	 
		 Amount of Advance $ _______________________
				

All
Borrower’s representation and warranties in the Loan and Security Agreement are true,
correct and complete in all material respects up to and including the date of the transfer
request for an advance, but those representations and warranties expressly referring to
another date shall be true, correct and complete in all material respects as of that date: 

		
		

Authorized Signature:________________________________  Phone Number:______________________________  

-7- 

		OUTGOING WIRE REQUEST:		
	 
		
                
Complete only if all or a portion of funds from the loan advance above are to be wired. 

        
	 
		Deadline for same day processing is 12:00pm, P.S.T.
	 
	 
		Beneficiary Name:  ________________________________		Amount of Wire: $  ________________________________
	 
		Beneficiary Bank:  _________________________________		Account Number:  _________________________________
	 
	 	City and State:  ____________________________________
	 
	 	Beneficiary Bank Transit (ABA) #: __ __ __ __ __ __ __ __
	 
		
Beneficiary Bank Code (Swift, Sort, Chip, etc.): _______________________________________________________________
				(For International Wire Only)

		Intermediary Bank:  ________________________________		Transit (ABA) #:  ________________________________
	 
		For Further Credit to: 
__________________________________________________________________________________________________________
	 
		Special Instruction:
____________________________________________________________________________________________________________

        By
signing below, I (we) acknowledge and agree that my (our) funds transfer request shall be
processed in accordance with and subject to the terms and conditions set forth in the
agreements(s) covering funds transfer service(s), which agreements(s) were previously
received and executed by me (us). 

		Authorized Signature: _____________________________		2nd Signature (If Required): _____________________________
	 
		Print Name/Title: ___________________________________		Print Name/Title: 
_________________________________________
	 
		Telephone #  
_______________________________________		Telephone #  
_____________________________________________

-8-

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