Document:

Exhibit 10.41

 

LATTICE SEMICONDUCTOR CORPORATION

 

INDEMNIFICATION AGREEMENT

This Indemnification Agreement (“Agreement”) is made as of May 6, 2003 by
and between Lattice Semiconductor Corporation, a Delaware corporation (the “Company”), and
                                                        (“Indemnitee”).

 

Recitals

 

A.            The Company desires to attract and retain qualified
directors, officers, employees and other agents, and to provide them with
protection against liability and expenses incurred while acting in that
capacity;

 

B.            The Certificate of Incorporation and Bylaws of the
Company contain provisions for indemnifying directors and officers of the
Company, and the Bylaws and Delaware law contemplate that separate contracts
may be entered into between the Company and its directors and officers,
employees and other agents with respect to their indemnification by the
Company, which contracts may provide greater protection than is afforded by the
Certificate of Incorporation and Bylaws;

 

C.            The Company understands that Indemnitee has reservations
about serving or continuing to serve the Company without adequate protection
against personal liability arising from such service, and that it is also of
critical importance to Indemnitee that adequate provision be made for advancing
costs and expenses of legal defense; and

 

D.            The Board of Directors has approved as being in the best
interests of the Company indemnity contracts substantially in the form of this
Agreement for directors and officers of the Company and its subsidiaries and
for certain other employees and agents of the Company designated by the Board
of Directors.

 

NOW, THEREFORE, in order to induce Indemnitee
to serve or to continue to serve as a director, officer, employee or agent of
the Company, and in consideration of Indemnitee's service to the Company, the
parties agree as follows:

 

1.     Contractual Indemnity. 
In addition to the indemnification provisions of the Certificate of
Incorporation and Bylaws of the Company, the Company hereby agrees, subject to
the limitations of Sections 2 and 5 hereof:

 

(a)  To indemnify, defend and hold
Indemnitee harmless to the greatest extent possible under applicable law from
and against any and all judgments, fines, penalties, amounts paid in settlement
and any other amounts reasonably incurred or suffered by Indemnitee (including
attorneys' fees) if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe Indemnitee's conduct was unlawful, in connection
with any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, including an action by or in
the right of the Company, to which Indemnitee is, was or at any time becomes a
party, or is threatened to be made a

 

1

 

party, by reason
of the fact that Indemnitee is, was or at any time becomes a director, officer,
employee or agent of the Company or is or was serving or at any time serves at
the request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise (collectively
referred to hereafter as a “Claim”), whether or not arising prior to the date
of this Agreement.

 

(b)  To pay any and all expenses reasonably
incurred by Indemnitee in defending any Claim or Claims (including reasonable
attorneys' fees and expenses and other reasonable costs of investigation and
defense), as the same are incurred and in advance of a final judicial
determination (as to which all rights of appeal therefrom have been exhausted
or lapsed) (the “Final Judicial Determination”) of any such Claim or Claims,
upon receipt of a written undertaking by or on behalf of Indemnitee (which
shall be unsecured and shall not bear interest) to reimburse such amounts if a
Final Judicial Determination determines that Indemnitee (i) is not entitled to
be indemnified by the Company under this Agreement, and (ii) is not entitled to
be indemnified by the Company under the Certificate of Incorporation or the
Bylaws of the Company.

 

(c)  The termination of any action or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption
that (i) Indemnitee did not act in good faith and in a manner which Indemnitee
reasonably believed to be in the best interests of the Company, or (ii) with
respect to any criminal action or proceeding, Indemnitee had reasonable cause
to believe that Indemnitee's conduct was unlawful.

 

2.     Limitations on Contractual Indemnity.  Indemnitee shall not be entitled to
indemnification or advancement of expenses under Section 1:

 

(a)  if a court of competent jurisdiction,
by a Final Judicial Determination, shall determine that (i) the Claim or Claims
in respect of which indemnity is sought arise from Indemnitee's fraudulent,
dishonest or willful misconduct, or (ii) such indemnity is not permitted under
applicable law; or

 

(b)  on account of any suit in which
judgment is rendered for an accounting of profits made from the purchase or
sale by Indemnitee of securities of the Company in violation of the provisions
of Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto
or similar provisions of any federal, state or local statutory law; or

 

(c)  for any acts or omissions or
transactions from which Indemnitee may not be relieved of liability under the
Delaware General Corporation Law; or

 

(d)  with respect to proceedings or claims
initiated or brought voluntarily by Indemnitee and not by way of defense,
except (i) with respect to proceedings brought in good faith to establish or
enforce a right to indemnification under this Agreement or any other statute or
law, or (ii) at the Company's discretion, in specific cases if the Board of
Directors of the Company has approved the initiation or bringing of such suit;
or

 

(e)  for expenses or liabilities of any type
whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes
or penalties, and amounts paid in

 

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settlement) which
have been paid directly to Indemnitee by an insurance carrier under a policy of
liability insurance maintained by the Company; or

 

(f)  for any expenses incurred by the
Indemnitee with respect to any proceeding instituted by Indemnitee to enforce
or interpret this Agreement, if a court of competent jurisdiction determines
that each of the material assertions made by the Indemnitee in such proceeding
was not made in good faith or was frivolous.

 

Notwithstanding any
limitations set forth in this Section 2, regarding the Company's obligation to
provide indemnification, Indemnitee shall be entitled under Section 4 to
receive expense advances hereunder with respect to any such Claim unless and
until a court having jurisdiction over the Claim shall have made a Final
Judicial Determination that Indemnitee has engaged in acts, omissions or
transactions for which Indemnitee is prohibited from receiving indemnification
under this Section 2.

 

3.     Continuation of Contractual Indemnity.  Subject to the termination provisions of
Section 11, all agreements and obligations of the Company contained herein
shall continue for so long as Indemnitee shall be subject to any possible
action, suit, proceeding or other assertion of a Claim or Claims.

 

4.     Expenses; Indemnification Procedure.  The Company shall advance all expenses
incurred by Indemnitee in connection with the investigation, defense,
settlement or appeal of any civil or criminal action or proceeding referenced
in Section 1 hereof (but not amounts actually paid in settlement of any such
action or proceeding).  Indemnitee
hereby undertakes to repay such amounts advanced if, and to the extent that, a
Final Judicial Determination determines that Indemnitee is not entitled to be
indemnified by the Company as authorized hereby.  The advances to be made hereunder shall be paid by the Company to
Indemnitee within twenty (20) days following delivery of a written request
therefor by Indemnitee to the Company.

 

5.     Notification and Defense of Claim.  If any action, suit, proceeding or other
Claim is brought against Indemnitee in respect of which indemnity may be sought
under this Agreement:

 

(a)  Indemnitee will promptly notify the
Company in writing of the commencement thereof, and the Company and any other
indemnifying party similarly notified will be entitled to participate therein
at its own expense or to assume the defense thereof and to employ counsel
reasonably satisfactory to Indemnitee provided however, that failure to provide
such notice in accordance with this Section 2(b) shall not affect Indemnitee's
rights to receive any expenses or expense advances hereunder unless and except
to the extent that the Company did not otherwise learn of such Claim and such
failure of Indemnitee to provide such notice results in the forfeiture by the
Company of substantial rights and defenses. 
Notice to the Company shall be directed to the Chief Executive Officer
of the Company at the address shown on the signature page of this  Agreement (or such other address as the
Company shall designate in writing to Indemnitee).  Notice shall be deemed received three (3) business days after the
date postmarked if sent by domestic certified or registered mail, properly
addressed; otherwise

 

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notice shall be
deemed received when such notice shall actually be received by the
Company.  If the Company does not assume
the defense of a Claim or the Indemnitee reasonably determines that there may
be a conflict between the positions of the Company in conducting the defense or
a Claim, the counsel to Indemnitee shall be entitled to conduct the defense as
reasonably determined by such counsel to be necessary or desirable to protect
the interests of the Indemnitee and the Company shall not have the right to
assume the defense of such Claim and the reasonable fees and expenses of such
counsel to the Indemnitee shall be borne by the Company upon delivery to the
Company of the undertaking referred to in subparagraph (b) of Section 1.  However, in no event will the Company be
obligated to pay the fees or expenses of more than one firm of attorneys
representing Indemnitee and any other agents of the Company in connection with
any one Claim or separate but substantially similar or related Claims in the
same jurisdiction arising out of the same general allegations or circumstances,
unless Indemnitee reasonably determines that representation of Indemnitee and
other agents of the Company by the same firm of attorneys would present a
conflict of interest that materially prejudices the interests of Indemnitee.

 

(b)  The Company shall not be liable to
indemnify Indemnitee for any amounts paid in settlement of any Claim effected
without the Company's written consent, and the Company shall not settle any
Claim in a manner which would impose any penalty or limitation on Indemnitee or
require the admission of guilt or responsibility without Indemnitee's written
consent; provided, however, that neither the Company nor Indemnitee will
unreasonably withhold its consent to any proposed settlement and, provided
further, that if a claim is settled by the Indemnitee with the Company's
written consent, or if there is a Final Judicial Determination for the
plaintiff in connection with the Claim by a court of competent jurisdiction,
the Company shall indemnify and hold harmless Indemnitee from and against any and
all losses, costs, expenses and liabilities incurred by reason of such
settlement or judgment.

 

(c)  Indemnitee shall give the Company such
information in the possession of, or reasonably obtainable by, Indemnitee, and
cooperation as it may reasonably require and as shall be within Indemnitee's
power and control.

 

(d)  Any indemnification provided for in
Section 1 shall be made no later than forty-five (45) days after receipt of the
written request of Indemnitee.  If a
Claim under this Agreement, under any statute, or under any provision of the
Company's Certificate of Incorporation or Bylaws providing for indemnification,
is not paid in full by the Company within forty-five (45) days after a written
request for payment thereof has first been received by the Company, Indemnitee
may, but need not, at any time thereafter bring an action against the Company
to recover the unpaid amount of the claim and, subject to Section 13 of this
Agreement, Indemnitee shall also be entitled to be reimbursed for the expenses
(including attorneys' fees) of bringing such action.  It shall be a defense to any such action (other than an action
brought to enforce a claim for expenses incurred in connection with any action
or proceeding in advance of its final disposition) that Indemnitee has not met
the standards of conduct which make it permissible under applicable law for the
Company to indemnify Indemnitee for the amount claimed but the burden of
proving such defense shall be on the Company, and

 

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Indemnitee shall
be entitled to receive interim payments of expenses pursuant to Subsection 4
unless and until there is a Final Judicial Determination for such defense.  It is the parties' intention that if the
Company contests Indemnitee's right to indemnification, the question of
Indemnitee's right to indemnification shall be for the court to decide, and
neither the failure of the Company (including its Board of Directors, any
committee or subgroup of the Board of Directors, independent legal counsel, or
its stockholders) to have made a determination that indemnification of
Indemnitee is proper in the circumstances because Indemnitee has met the
applicable standard of conduct required by applicable law, nor an actual
determination by the Company (including its Board of Directors, any committee
or subgroup of the Board of Directors, independent legal counsel, or its
stockholders) that Indemnitee has not met such applicable standard of conduct,
shall create a presumption that Indemnitee has or has not met the applicable
standard of conduct.

 

(e)  If, at the time of the receipt of a
notice of a Claim, the Company has director and officer liability insurance in
effect, the Company shall give prompt notice of the commencement of such
proceeding to the insurers in accordance with the procedures set forth in the
respective policies.  The Company shall
thereafter take all necessary or desirable action to cause such insurers to
pay, on behalf of the Indemnitee, all amounts payable as a result of such
proceeding in accordance with the terms of such policies, provided however,
that nothing contained in this Section 5(e) shall excuse the Company from its
obligations to pay expenses or expense advances to Indemnitee as provided
herein.

 

6.     Scope.  Notwithstanding
any other provision of this Agreement, the Company hereby agrees to indemnify
the Indemnitee against any Claim to the fullest extent permitted by law,
notwithstanding that such indemnification is not specifically authorized by the
other provisions of this Agreement, the Company's Certificate of Incorporation,
the Company's Bylaws or by statute.  In
the event of any change, after the date of this Agreement, in any applicable
law, statute or rule which expands the right of a Delaware corporation to
indemnify a member of its board of directors, an officer or other corporate
agent, such changes shall be, ipso facto, within the purview of Indemnitee's
rights and Company's obligations, under this Agreement.  In the event of any change in any applicable
law, statute, or rule which narrows the right of a Delaware corporation to
indemnify a member of its Board of Directors, an officer, or other corporate
agent, such changes, to the extent not otherwise required by applicable law  to be applied to this Agreement, shall have
no effect on this Agreement or the parties' rights and obligations hereunder.

 

7.     Partial Indemnification. 
If Indemnitee is entitled under any provision of this Agreement to
indemnification by the Company for some or a portion of the expenses,
judgments, fines or penalties actually or reasonably incurred by him in the
investigation, defense, appeal or settlement of any civil or criminal action or
proceeding, but not, however, for the total amount thereof, the Company shall
nevertheless indemnify Indemnitee for the portion of such expenses, judgments,
fines or penalties to which Indemnitee is entitled.

 

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8.     Public Policy. 
Both the Company and Indemnitee acknowledge that in certain instances,
Federal law or applicable public policy may prohibit the Company from
indemnifying its directors and officers under this Agreement or otherwise.  Indemnitee understands and acknowledges that
the Company has undertaken or may be required in the future to undertake with
the Securities and Exchange Commission to submit the question of
indemnification to a court in certain circumstances for a determination of the
Company's right under public policy to indemnify Indemnitee.

 

9.     Insurance. 
Although the Company may from time to time maintain insurance for the
purpose of indemnifying Indemnitee and other agents of the Company against
personal liability, including costs of legal defense, nothing in this Agreement
shall obligate the Company to do so.

 

10.   No Restrictions.  The rights and remedies of Indemnitee under
this Agreement shall not be deemed to exclude or impair any other rights or
remedies to which Indemnitee may be entitled under the Certificate of
Incorporation or Bylaws of the Company, or under any other agreement, provision
of law or otherwise, nor shall anything contained herein restrict the right of
the Company to indemnify Indemnitee in any proper case even though not
specifically provided for in this Agreement, nor shall anything contained herein
restrict Indemnitee's right to contribution as may be available under
applicable law.  The indemnification
provided under this Agreement shall continue as to Indemnitee for any action
Indemnitee took or did not take while serving in an indemnified capacity even
though Indemnitee may have ceased to serve in such capacity.

 

11.   Termination.  The Company may terminate this Agreement at any time upon ninety
(90) days written notice, but any such termination will not affect Claims
relating to events occurring prior to the effective date of termination.

 

12.   Severability.  Each of the provisions of this Agreement is
a separate and distinct agreement and independent of the others, so that if any
provision hereof shall be held to be invalid or unenforceable for any reason,
such invalidity or unenforceability shall not affect the validity or
enforceability of the other provisions hereof. 
Furthermore, to the fullest extent possible, the provisions of this
Agreement (including, without limitations, each portion of this Agreement
containing any provision held to be invalid, void or otherwise unenforceable,
that is not itself invalid, void or unenforceable) shall be construed so as to
give effect to the intent manifested by the provision held invalid, illegal or
unenforceable.

 

13.   Attorneys' Fees.  In the event of any litigation or other
action or proceeding to enforce or interpret this Agreement, the prevailing
party as determined by the court shall be entitled to an award of its
reasonable attorneys' fees and other costs, in addition to such relief as may
be awarded by a court or other tribunal.

 

14.   Further Assurances.  The parties will do, execute and deliver, or
will cause to be done, executed and delivered, all such further acts, documents
and things as may be reasonably required for the purpose of giving effect to
this Agreement and the transactions contemplated hereby.

 

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15.   Acknowledgment.  The Company expressly acknowledges that it
has entered into this Agreement and assumed the obligations imposed on the
Company hereunder in order to induce Indemnitee to serve or to continue to
serve as an agent of the Company, and acknowledges that Indemnitee is relying
on this Agreement in serving or continuing to serve in such capacity.

 

16.   Construction of Certain Phrases.

 

(a)  “Company”.  For purposes of this Agreement, references
to the “Company” shall also include, in addition to the resulting corporation
in any consolidation or merger to which the Company is a party, any constituent
corporation (including any constituent of a constituent) absorbed in
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, employees or
agents, so that if Indemnitee is or was a director, officer, employee or agent
of such constituent corporation, or is or was serving at the request of such
constituent corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, Indemnitee
shall stand in the same position under the provisions of this Agreement with
respect to the resulting or surviving corporation as Indemnitee would have with
respect to such constituent corporation if its separate existence had
continued.

 

(b)  Benefit
Plans.  References to “fines”
contained in this Agreement shall include any excise taxes assessed on
Indemnitee with respect to an employee benefit plan; and references to “serving
at the request of the Company” shall include any service as a director,
officer, employee or agent of the Company which imposes duties on, or involves
services by, such director, officer, employee or agent with respect to an
employee benefit plan, its participants, or beneficiaries.

 

17.   Counterparts.  This Agreement may be executed (including by
facsimile) in one or more counterparts, each of which shall constitute an
original and together shall constitute one instrument.

 

18.   Notice.  All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and receipted for by the party addressee, on the date of such
receipt, or (ii) if mailed by domestic certified or registered mail with
postage prepaid, on the third business day after the date postmarked.  Addresses for notice to either party are as
shown on the signature page of this Agreement, or as subsequently modified by
written notice.

 

19.   Subrogation.  In the event of payment under this Agreement, the Company shall
be subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee, who shall execute all documents required and shall do all acts that
may be necessary to secure such rights and to enable the Company effectively to
bring suit to enforce such rights.

 

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20.   Governing Law; Binding Effect; Amendment.

 

(a)  This
Agreement shall be interpreted and enforced in accordance with the laws of the
State of Delaware applicable to contracts entered into in Delaware.

 

(b)  This
Agreement shall be binding upon Indemnitee and the Company, their successors
and assigns, and shall inure to the benefit of Indemnitee, his heirs, personal
representatives and assigns and to the benefit of the Company, its successors
and assigns.

 

(c)  No
amendment, modification, termination or cancellation of this Agreement shall be
effective unless in writing signed by both parties hereto.

 

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

 

	
   

  	
  LATTICE
  SEMICONDUCTOR CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
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  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  AGREED TO AND ACCEPTED:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
						

 

8Exhibit 10.1  

CITIZENS BANK OF MASSACHUSETTS

LOAN AGREEMENT  

January 14,
2004 

        THIS
LOAN AGREEMENT ("Agreement") is entered into as of January 14, 2004 by and between Charles River Associates Incorporated, a Massachusetts corporation, with its principal
place of business at the John Hancock Tower, 200 Clarendon Street, T-33, Boston, Massachusetts 02116-5092 (the  "Borrower"), and Citizens Bank of Massachusetts, a bank with a principal place of
business at 28 State Street, Boston, Massachusetts 02109 (the  "Bank"). 

1.    LOANS AND OTHER FINANCIAL ACCOMMODATIONS.

        (a)   Subject
to the terms and provisions of this Agreement, the Bank hereby establishes a revolving line of credit (the "Line of
Credit") in Borrower's favor in the amount of the Credit Limit (as defined below), and from time to time during the term of this Agreement Bank shall make such loans and other
extensions of credit under the Line of Credit contemplated hereby as the Borrower may request, provided that there has not occurred and is not then continuing an Event of Default or an event which,
with notice or the lapse of time or both, would constitute an Event of Default. The Borrower shall use the proceeds of the Line of Credit for working capital, general corporate purposes, acquisitions,
letters of credit, and foreign exchange contracts. Subject to the terms and provisions of this Agreement, loans and other extensions of credit under the Line of Credit may be repaid at any time and,
once repaid, may be reborrowed. 

        (b)   All
loans shall bear interest and at the option of the Bank shall be evidenced by and be repayable in accordance with a revolving note drawn to the order of Bank
substantially the form of Exhibit 1 hereto (the "Note"), as the same may hereafter be amended, supplemented or restated from time to time and any
note or notes issued in substitution therefor, but in the absence of the Note shall be conclusively evidenced by Bank's records of loans and repayments. 

        Interest,
at the Borrower's option as provided herein, will be charged to Borrower at a rate equal to: (i) the Prime Rate (as
defined below), or (ii) the aggregate of (x) the Applicable Margin (as defined below) plus (y) either the  LIBOR Lending Rate (as defined
below)or the LIBOR Advantage Rate (as defined below), or
(iii) such other rate agreed on from time to time by the parties, upon any balance owing to Bank at the close of each day. Accrued interest shall be payable (i) on the first day of each
month in arrears with respect to a Prime Rate Loan (as defined below) or on each relevant Interest Payment
Date (as defined below) for either a LIBOR Rate Loan (as defined below) or LIBOR Advantage
Loan (as defined below); (ii) on termination of this Agreement pursuant to Section 14 hereof; (iii) on acceleration of the time for payment of the
Obligations pursuant to Section 11 hereof; and (iv) on the date the Obligations are paid in full. Interest shall be computed on the basis of the actual number of days elapsed over a year
of three hundred sixty (360) days. Interest shall be payable in lawful money of the United States of America to Bank, or to such other person as Bank shall direct, without set-off,
deduction or counterclaim. 

        (c)   Borrower
hereby authorizes and directs Bank, in Bank's sole discretion (provided, however, Bank shall have no obligation to do so): (i) unless previously paid by
Borrower, to pay accrued interest as the same becomes due and payable pursuant to this Agreement or pursuant to any note or other Loan Document (as defined below), and to treat the same as a loan to
Borrower, which shall be added to Borrower's loan balance pursuant to this Agreement; or (ii) to charge any of Borrower's accounts under the control of Bank to pay accrued interest as the same
becomes due and payable pursuant to 

1

 

this
Agreement or any other Loan Document. Bank shall promptly notify Borrower of all such charges or applications. 

        (d)   The
making of loans, advances, and credits by Bank to the Borrower in excess of the Credit Limit is for the benefit of the Borrower and does not affect the obligations
of Borrower hereunder; all such loans constitute Obligations and must be repaid by Borrower in accordance with the terms of this Agreement. 

        (e)   At
the request of the Borrower, and upon the execution of letter of credit and foreign exchange documentation reasonably satisfactory to Bank, Bank, within the limits of
the Credit Limit as then computed, shall issue letters of credit (or similar guarantees, bonds or undertakings) (collectively "Letters of Credit") and
foreign exchange contracts from time to time by Bank for the account of the Borrower. The Letters of Credit shall be on terms reasonably acceptable to Bank, and no Letter of Credit shall have an
expiration date later than the sooner to occur of (i) twelve (12) months from the date of issuance of the subject Letter of Credit, or (ii) the Termination Date. A loan in an
amount equal to any amount paid by Bank under a Letter of Credit shall be deemed made to Borrower, without request therefor, immediately upon any payment by Bank on such Letter of Credit. In
connection with the issuance of any Letter of Credit, Borrower shall pay to Bank a one-time issuance fee for such Letter of Credit equal to one (1%) percent per annum of the face amount of
such Letter of Credit, plus transaction fees and other normal and customary fees (without duplication of the issuance fee described above) charged by
Bank according to the letter of credit fee schedule then generally in effect at Bank. Borrower hereby authorizes and directs Bank, in Bank's sole discretion (provided, however, Bank shall have no
obligation to do so) to pay all such fees and costs as the same become due and payable and to treat the same as a loan to Borrower, which shall be added to Borrower's loan balance pursuant to this
Agreement. For purposes of computing the availability under the Line of Credit, (i) the undrawn amounts of all outstanding Letters of Credit issued pursuant to this Agreement shall be deemed to
be outstanding loans, (ii) foreign exchange contract obligations shall not be deemed to constitute outstanding loans (and shall not accrue interest), and (iii) availability under the
Line of Credit will at all times be reduced by $225,000.00, which amount equals fifteen (15%) percent of Borrower's $1,500,000.00 line sublimit with the Bank for foreign exchange contract obligations
or such lesser or greater amount based upon such fifteen (15%) percent reserve in the event that the Borrower's line sublimit for foreign exchange contract obligations changes by mutual agreement of
the Borrower and the Bank. 

        (f)    Borrower
shall pay to Bank the principal amount of all loans as follows: 

        (i)    Credit Limit Exceeded. Whenever the aggregate outstanding principal balance of all loans exceeds the Credit Limit,
Borrower shall immediately pay to Bank the excess of the aggregate outstanding principal balance of the loans over the Credit Limit. 

        (ii)   Payment in Full on Termination. On termination of this Agreement, pursuant to Section 14 or acceleration of the
Obligations pursuant to Section 11, Borrower shall pay to Bank the entire outstanding principal balance of all loans and shall deliver to Bank cash collateral in an amount equal to the
aggregate of (A) amounts then undrawn on all outstanding Letters of Credit issued pursuant to this Agreement for the account of the Borrower, and (B) the amount of all outstanding
acceptances issued pursuant to this Agreement. Bank shall hold such cash collateral in an interest bearing account and, except to the extent applied to the Borrower's reimbursement or other
Obligations with respect to any such Letter of Credit that is drawn upon, shall return such cash collateral (or the relevant portion thereof), together with accrued interest, to the Borrower promptly
upon the expiration of such Letter of Credit. 

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        (g)   As
used in this Agreement, the following terms shall have the following meanings: 

"Applicable Margin" shall mean at any time (i) 1.50% per annum if the Total Debt Ratio (as defined in Section 10 hereof) at such time is
greater than or equal to 2.0x as of such time, (ii) 1.25% per annum if the Total Debt Ratio at such time is greater than 1.5x but less than 2.0x as of such time, (iii) 1.0% per annum if
the Total Debt Ratio at such time is greater than 1.0x but less than or equal to 1.5x as of such time, or (iv) .75% per annum if the Total Debt Ratio at such time is less than or equal to 1.0x
as of such time. For purposes of the foregoing, (i) the Total Debt Ratio at any time shall be the Total Debt Ratio as reported in the Compliance Certificate most recently delivered (or updated)
by the Borrower to Bank pursuant to Section 8(d) hereof, and (ii) each change in the Applicable Margin pursuant to the foregoing provisions shall take effect from the date of Borrower's
delivery of its most recent Compliance Certificate (or update thereof) pursuant to Section 8(d) hereof. 

"Borrowing Date" shall mean any day upon which a LIBOR Rate Loan or LIBOR Advantage Loan is made. 

"Business Day" shall mean: 

        (i)    any
day which is neither a Saturday or Sunday nor a legal holiday on which commercial banks are authorized or required to be closed in Boston, Massachusetts; 

        (ii)   when
such term is used to describe a day on which a borrowing, payment, prepayment, or repayment is to be made in respect of any LIBOR Rate Loan or LIBOR Advantage
Loan, any day which is: (A) neither a Saturday or Sunday nor a legal holiday on which commercial banks are authorized or required to be closed in New York City; and (B) a London Banking
Day; and 

        (iii)  when
such term is used to describe a day on which an interest rate determination is to be made in respect of any LIBOR Rate Loan or LIBOR Advantage Loan, any day which
is a London Banking Day. 

"Credit Limit" shall mean an amount equal to Forty Million ($40,000,000.00) Dollars. 

"Dollars" or "$" shall mean currency of the United States of America. 

"Eurodollars" shall mean Dollars acquired by Bank through the purchase or other acquisition of deposits denominated in Dollars and made with any bank or
branch of a bank (including any branch of the Bank) located outside the United States of America. 

"Hedging Contracts" shall mean interest rate or currency swap agreements, cap agreements and collar agreements, or any other agreements or arrangements
entered into between Borrower and Bank designed to protect the Borrower against fluctuations in interest rates or currency exchange rates. 

"Hedging Obligations" means, with respect to Borrower, all liabilities of Borrower to Bank under Hedging Contracts. 

"Interbank Market" shall mean, with respect to any LIBOR Rate Loan or LIBOR Advantage Loan, any recognized interbank Eurodollar market chosen in good
faith by Bank. 

"Interest Payment Date" shall mean, relative to any LIBOR Rate Loan or LIBOR Advantage Loan, having an Interest Period of three months or less, the last
Business Day of such Interest Period, and as to any LIBOR Rate Loan having an Interest Period longer than three months, each Business Day which is three months, or a whole multiple thereof, after the
first day of such Interest Period and the last day of such Interest Period. 

"Interest Period" shall mean: (a) relative to any LIBOR Rate Loans: 

        (i)    initially,
the period beginning on (and including) the date on which such LIBOR Rate Loan is made or continued as, or converted into, a LIBOR Rate Loan pursuant to this
Agreement 

3

 

and
ending on (but excluding) the day which numerically corresponds to such date one, two, three, or six months thereafter (or, if such month has no numerically corresponding day, on the last Business
Day of such month), in each case as the Borrower may select in its notice pursuant to this Agreement; and 

        (ii)   thereafter,
each period commencing on the last day of the next preceding Interest Period applicable to such LIBOR Rate Loan and ending one, two, three, or six months
thereafter (or, if such month has no numerically corresponding day, on the last Business Day of such month), as selected by the Borrower by irrevocable notice to the Bank not less than two Business
Days prior to the last day of the then current Interest Period with respect thereto; 

provided,
however, that 

        (i)    the
Borrower shall not be permitted to select Interest Periods to be in effect at any one time which have expiration dates occurring on more than eight
(8) different dates; 

        (ii)   Interest
Periods commencing on the same date for LIBOR Rate Loans comprising part of the same advance under this Agreement shall be of the same duration; 

        (iii)  Interest
Periods for LIBOR Rate Loans in connection with which Borrower has or may incur Hedging Obligations with the Bank shall be of the same duration as the
relevant periods set under the applicable Hedging Contracts; 

        (iv)  if
such Interest Period would otherwise end on a day which is not a Business Day, such Interest Period shall end on the next following Business Day unless such day
falls in the next calendar month, in which case such Interest Period shall end on the first preceding Business Day; and 

        (v)   no
Interest Period may end later than the Termination Date. 

        (b)   relative
to any LIBOR Advantage Loans means each one (1) month period ending on the day of such month that numerically corresponds to the commencement date of a
LIBOR Advantage Loan. If an Interest Period is to end in a month for which there is no day which numerically corresponds to the commencement date of a LIBOR Advantage Loan, the Interest Period will
end on the last day of such month. 

"LIBOR Advantage Loan" shall mean, any loan or advance the rate of interest applicable to which is based upon the LIBOR Advantage Rate. 

"LIBOR Advantage Rate" shall mean, relative to any Interest Period for LIBOR Advantage Loans, the offered rate for delivery in two London Banking Days
(as defined below) of deposits of U.S. Dollars which the British Bankers' Association fixes as its LIBOR rate and which appears on the Telerate Page 3750 as of 11:00 a.m. London time on the day
on which the Interest Period commences, and for a period approximately equal to such Interest Period. If the first day of any Interest Period is not a day which is both a (i) Business Day, and
(ii) a day on which US dollar deposits are transacted in the London Interbank Market (a "London Banking Date"), the LIBOR Advantage Rate shall be determined in reference to the next preceding
day which is both a Business Day and a London Banking Day. If for any reason the LIBOR Advantage Rate is unavailable and/or the Bank is unable to determine the LIBOR Advantage Rate for any Interest
Period, the LIBOR Advantage Rate shall be deemed to be equal to the Prime Rate. 

4

 

"LIBOR Lending Rate" shall mean, relative to any LIBOR Rate Loan to be made, continued or maintained as, or converted into, a LIBOR Rate Loan for any
Interest Period, a rate per annum determined pursuant to the following formula: 

	LIBOR Lending Rate	 	=	 	LIBOR Rate
 (1.00 - LIBOR Reserve Percentage)

"LIBOR Rate" means relative to any Interest Period for LIBOR Rate Loans, the offered rate for deposits of U.S. Dollars in an amount approximately equal
to the amount of the requested LIBOR Rate Loan for a term coextensive with the designated Interest Period which the British Bankers' Association fixes as its LIBOR rate and which appears on the
Telerate Page 3750 as of 11:00 a.m. London time on the day which is two London Banking Days prior to the beginning of such Interest Period. If the first day of any Interest Period is not a day which
is both a (i) Business Day, and (ii) a day on which US dollar deposits are transacted in the London Interbank Market (a "London Banking Date"), the LIBOR Rate shall be determined in
reference to the next preceding day which is both a Business Day and a London Banking Day. If for any reason the LIBOR Rate is unavailable and/or the Bank is unable to determine the LIBOR Rate for any
Interest Period, the LIBOR Rate shall be deemed to be equal to the Prime Rate. 

"LIBOR Rate Loan" shall mean, any loan or advance the rate of interest applicable to which is based upon the LIBOR Rate. 

"LIBOR Reserve Percentage" shall mean, relative to any day of any Interest Period for LIBOR Rate Loans or LIBOR Advantage Loans, the maximum aggregate
(without duplication) of the rates (expressed as a decimal fraction) of reserve requirements (including all basic, emergency, supplemental, marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve requirements) under any regulations of the Board of Governors of the Federal Reserve System (the  "Board") or other governmental authority
having jurisdiction with respect thereto as issued from time to time and then applicable to assets or
liabilities consisting of "Eurocurrency Liabilities", as currently defined in Regulation D of the Board, having a term approximately equal or comparable to such Interest Period. 

"Loan Documents" shall mean this Agreement, the Note, the Stock Pledge Agreement (as defined in Section 3(a) hereof) and any other note or notes
executed by the Borrower in connection with this Agreement and payable to the Bank, any Letters of Credit, any certificates from time to time delivered by the Borrower to the Bank pursuant to this
Agreement, any Notices of Borrowing, and any other agreement entered into, now or in the future, by the Borrower and the Bank in connection with this Agreement (excluding any Hedging Contract or
foreign exchange contract). 

"London Banking Day" shall mean a day on which dealings in US dollar deposits are transacted in the London Interbank Market. 

"Material Adverse Effect" shall mean a material adverse effect on (i) the financial condition, business, operations or assets of the Borrower and
its subsidiaries taken as a whole or (ii) the validity or enforceability of any of the Loan Documents. 

"Obligations" shall mean all debts, liabilities and obligations of Borrower to Bank hereunder or under any other Loan Document of every kind and
description, direct or indirect, absolute or contingent, primary or secondary, due or to become due, now existing or hereafter arising, whether or not contemplated by the parties at the time of the
execution of this Agreement, regardless of how they arise or by what Loan Document they may be evidenced, and includes obligations to perform acts and refrain from taking action as well as obligations
to pay money owing by Borrower to Bank under the Loan Documents, including, without limitation, all interest, fees, charges, expenses and overdrafts, and also includes, without limitation, all
obligations and liabilities which Bank may incur or become liable 

5

 

for,
on account of, or as a result of, any Letter of Credit, or similar instrument or obligation issued or caused to be issued pursuant to this Agreement 

"Prime Rate" shall mean the per annum rate of interest announced from time to time by Bank at its offices in Boston, Massachusetts, as its Prime Rate
(or if Bank ceases to announce a rate so designated, any similar successor rate designated by Bank), it being understood that such rate is a reference rate and not necessarily the lowest rate of
interest charged by Bank. The rate of interest payable by Borrower shall be changed effective as of that date in which a change in the Prime Rate becomes effective. 

"Prime Rate Loan(s)" shall mean, when used in the singular, any loans on which the interest rate is calculated by reference to the Prime Rate and, when
used in the plural, shall mean all such loans. 

        (h)   Bank
shall not be required to make a LIBOR Rate Loan, LIBOR Advantage Loan, or a Prime Rate Loan unless Bank shall have received from the Borrower a request for such
LIBOR Rate Loan, LIBOR Advantage Loan, or Prime Rate Loan in the form of Exhibit 2 annexed hereto (herein a "Notice of Borrowing"). By delivering
a borrowing request (i.e., Notice of Borrowing) to the Bank on or before 10:00 a.m., New York time, on a Business Day, the Borrower may from time to time irrevocably request, (1) on not
less than two nor more than five Business Days' notice, that a LIBOR Rate Loan be made in a minimum amount $500,000.00 and integral multiples of $100,000.00 in excess thereof, or that a LIBOR
Advantage Loan be made, or (2) on not less than one (1) Business Day's notice that a Prime Rate Loan be made. There shall not be any required minimum amount or multiples for LIBOR
Advantage Loans or for Prime Rate Loans. On the terms and subject to the conditions of this Agreement, each LIBOR Rate Loan, LIBOR Advantage Loan, or Prime Rate Loan shall be made available to the
Borrower no later than 11:00 a.m. New York time on (1) in the case of a LIBOR Rate Loan or a LIBOR Advantage Loan, the first day of the applicable Interest Period, or (2) in the
case of a Prime Rate Loan, on the requested date of such loan, in each case by deposit to the account of the Borrower as shall have been specified in its borrowing request. 

        (i)    After
receipt from the Borrower of any Notice of Borrowing or Notice of Continuation/Conversion (as defined below) which requests a LIBOR Rate Loan or LIBOR Advantage
Loan, Bank shall determine if it is able to make such LIBOR Rate Loan or LIBOR Advantage Loan (or if it is unable to do so for reasons described in this section only) and will notify the Borrower upon
confirmation of its ability to do so. If Bank determines in good faith that, by reason of circumstances affecting the London Interbank Market, adequate and reasonable methods do not exist for
ascertaining the LIBOR Rate or LIBOR Advantage Rate which would otherwise be applicable to such LIBOR Rate Loan or LIBOR Advantage Loan, then Bank shall so notify the Borrower on or before
4:00 p.m. on the Business Day prior to the Borrowing Date or continuation/conversion date specified in the Notice of Borrowing or Notice of Continuation /Conversion, and in such event, Bank
shall not be obligated to make, continue or convert, as applicable such LIBOR Rate Loan or LIBOR Advantage Loan and the Notice of Borrowing shall be deemed to have been withdrawn by the Borrower with
Bank's consent and substituted with a request for a Prime Rate Loan in an amount equal to the requested LIBOR Rate Loan or LIBOR Advantage Loan. 

        (j)    By
delivering a request for continuation/conversion in the form of Exhibit 2 annexed hereto (herein a "Notice of
Continuation/Conversion") to the Bank on or before 10:00 a.m., New York time, on a Business Day, the Borrower may from time to time irrevocably elect, on not less than
two nor more than five Business Days' notice, that (1) all, or any portion in an aggregate minimum amount of $500,000.00 and integral multiples of $100,000.00 in excess thereof, of any LIBOR
Rate Loan or LIBOR Advantage Loan be converted on the last day of an Interest Period into a LIBOR Rate Loan or LIBOR Advantage Loan with a different Interest Period, or continued on the last day of an
Interest Period as a LIBOR Rate Loan or LIBOR Advantage Loan with a similar Interest Period, or (2) that all, or any portion in an aggregate minimum amount of $500,000.00 and integral multiples
of 

6

 

$100,000.00
in excess thereof, of any Prime Rate Loan be converted into a LIBOR Rate Loan or LIBOR Advantage Loan with the requested Interest Period; provided,
however, that no portion of the outstanding principal amount of any Prime Rate Loan, LIBOR Rate Loans, or LIBOR Advantage Loans may be converted to, or continued as, LIBOR Rate
Loans or LIBOR Advantage Loans when any Event of Default has occurred and is continuing, and no portion of the outstanding principal amount of any LIBOR Rate Loans or LIBOR Advantage Loans may be
converted to, LIBOR Rate Loans or LIBOR Advantage Loans of a different duration if such LIBOR Rate Loans or LIBOR Advantage Loans relate to any Hedging Obligations. In the absence of delivery of a
Continuation/Conversion Notice with respect to any LIBOR Rate Loan or LIBOR Advantage Loans at least two Business Days before the last day of the then current Interest Period with respect thereto,
such LIBOR Rate Loan or LIBOR Advantage Loan shall, on such last day, automatically convert into a Prime Rate Loan. 

        (k)   Except
as otherwise provided herein, any Notice of Borrowing or Notice of Continuation/Conversion which requests a LIBOR Rate Loan or LIBOR Advantage Loan (or the
continuation or conversion thereof or of a Prime Rate Loan) shall be irrevocable and binding upon the Borrower. In the event the Borrower fails to borrow, continue or convert the LIBOR Rate Loan or
LIBOR Advantage Loan requested on the Borrowing Date or continuation/conversion date specified in such Notice of Borrowing or Notice of Continuation/Conversion, the Borrower shall indemnify Bank
against any and all losses and expenses incurred by Bank by reason of such failure including, without limiting the generality of the foregoing, all losses and expenses incurred by reason of the
liquidation, disposition or reemployment of deposits or other funds acquired by Bank to fund such LIBOR Rate Loan or LIBOR Advantage Loan (or the continuation or conversion thereof or of a Prime Rate
Loan). 

        (l)    Interest
on the outstanding principal amount of each LIBOR Rate Loan shall accrue during the Interest Period applicable thereto at a rate equal to the sum of the LIBOR
Lending Rate for such Interest Period plus the Applicable Margin thereto and be payable on each Interest Payment Date for such LIBOR Rate Loan. Interest on the outstanding principal amount of each
LIBOR Advantage Loan shall accrue at a rate equal to the LIBOR Advantage Rate plus the Applicable Margin thereto and be payable on each Interest Payment Date for such LIBOR Advantage Loan. 

        (m)  LIBOR
Rate Loans or LIBOR Advantage Loans may be prepaid at any time on the terms and conditions set forth herein. For LIBOR Rate Loans or LIBOR Advantage Loans in
connection with which the Borrower has or may incur Hedging Obligations, additional obligations may be associated with prepayment in accordance with the terms and conditions of the applicable Hedging
Contracts. The Borrower shall give the Bank, no later than 10:00 a.m., New York City time, at least four (4) Business Days notice of any proposed prepayment of any LIBOR Rate Loans,
specifying the proposed date of payment of such LIBOR Rate Loans, and the principal amount to be paid. Each partial prepayment of the principal amount of LIBOR Rate Loans or LIBOR Advantage Loans
shall be in an integral multiple of $100,000.00 and accompanied by the payment of all charges outstanding on such LIBOR Rate Loans or LIBOR Advantage Loans and of all accrued interest on the principal
repaid to the date of payment. Borrower acknowledges that prepayment or acceleration of a LIBOR Rate Loan during an Interest Period may result in the Bank incurring additional costs, expenses and/or
liabilities and that it is extremely difficult and impractical to ascertain the extent of such costs, expenses and/or liabilities. Therefore, all full or partial prepayments of LIBOR Rate Loans shall
be accompanied by, and the Borrower hereby promises to pay, on each date a LIBOR Rate Loan is prepaid or the date all sums payable hereunder become due and payable, by acceleration or otherwise, in
addition to all other sums then owing, an amount ("LIBOR Rate Loan Prepayment Fee") determined by the Bank pursuant to the following formula: 

        (i)    the
then 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 end
of the Interest Period as to which prepayment is made, subtracted from

7

 

        (ii)   the
applicable LIBOR Lending Rate applicable to the LIBOR Rate Loan being prepaid. 

        If
the result of this calculation is zero or a negative number, then there shall be no LIBOR Rate Loan Prepayment Fee. If the result of this calculation is a positive number, then the
resulting percentage shall be multiplied by: 

        (iii)  the
amount of the LIBOR Rate Loan being prepaid. 

        The
resulting amount shall be divided by: 

        (iv)  360 

and
multiplied by: 

        (v)   the
number of days remaining in the Interest Period as to which the prepayment is being made. 

        Said
amount shall be reduced to present value calculated by using the referenced United States Treasury securities rate and the number of days remaining on the Interest Period for the
LIBOR Rate Loan being prepaid. 

        The
resulting amount of these calculations shall be the LIBOR Rate Loan Prepayment Fee. 

        (n)   If
the Bank shall determine (which determination shall, upon notice thereof to the Borrower be conclusive and binding on the Borrower) that the introduction of or any
change in or in the interpretation of any law, rule, regulation or guideline (whether or not having the force of law), makes it unlawful, or any central bank or other governmental authority asserts
that it is unlawful, for the Bank to make, continue or maintain any LIBOR Rate Loan or LIBOR Advantage Loan as, or to convert any loan into, a LIBOR Rate Loan or LIBOR Advantage Loan of a certain
duration, the obligations of the Bank to make, continue, maintain or convert into any such LIBOR Rate Loans or LIBOR Advantage Loans shall, upon such determination, forthwith be suspended until the
Bank shall notify the Borrower that the circumstances causing such suspension no longer exist, and all LIBOR Rate Loans or LIBOR Advantage Loans of such type shall automatically convert into Prime
Rate Loans at the end of the then current Interest Periods with respect thereto or sooner, if required by such law or assertion. 

8

   
        (o)   Without duplication of any applicable LIBOR Rate Loan Prepayment Fee, if due to payments made by the Borrower pursuant to this Agreement or due to the acceleration of
the Obligations or due to any other reason, Bank receives payments of principal of any LIBOR Rate Loan prior to the last day of the then current Interest Period for such LIBOR Rate Loan, the Borrower
shall, upon demand by Bank, pay to Bank any amounts required to compensate Bank for any additional losses, costs or expenses which it may reasonably incur as a result of such payment, including,
without limitation, any loss, costs or expenses incurred by reason of the liquidation or reemployment of deposits or other funds acquired by Bank to fund or maintain such LIBOR Rate Loans. 

        (q)   If
the Bank shall have determined that 

        (i)    US
dollar deposits in the relevant amount and for the relevant Interest Period are not available to the Bank in the London Interbank Market, 

        (ii)   by
reason of circumstances affecting the Bank in the London Interbank Market, adequate means do not exist for ascertaining the LIBOR Rate applicable hereunder to LIBOR
Rate Loans of any duration or the LIBOR Advantage Rate applicable to LIBOR Advantage Loans, or 

        (iii)  the
LIBOR Rate no longer adequately reflects the Bank's cost of funding LIBOR Rate Loans, 

then,
upon notice from the Bank to the Borrower, the obligations of the Bank to make or continue any loans as, or to convert any loans into, LIBOR Rate Loans or LIBOR Advantage Loans of such duration
shall forthwith be suspended until the Bank shall notify the Borrower that the circumstances causing such suspension no longer exist. 

        (q)   Without
duplication of any LIBOR Rate Loan Prepayment Fee or any amount payable under clause (k) above or clause (o) above, the Borrower agrees to
reimburse the Bank for any increase in the cost to the Bank, or reduction in the amount of any sum receivable by the Bank, in respect, or as a result, of: 

        (i)    any
conversion or repayment or prepayment of the principal amount of any LIBOR Rate Loans on a date other than the scheduled last day of the Interest Period applicable
thereto; 

        (ii)   any
loans not being made as LIBOR Rate Loans in accordance with the borrowing request thereof; 

        (iii)  any
LIBOR Rate Loans not being continued as, or converted into, LIBOR Rate Loans in accordance with the continuation/conversion notice thereof; or 

        (iv)  any
costs associated with marking to market any Hedging Obligations that (in the reasonable determination of the Bank) are required to be terminated as a result of any
conversion, repayment or prepayment of the principal amount of any LIBOR Rate Loan on a date other than the scheduled last day of the Interest Period applicable thereto. 

        The
Bank shall promptly notify the Borrower in writing of the occurrence of any such event, such notice to state, in reasonable detail, the reasons therefor and the additional amount
required fully to compensate the Bank for such increased cost or reduced amount. Such additional amounts shall be payable by the Borrower to the Bank within five days of its receipt of such notice,
and such notice shall, in the absence of manifest or demonstrable error, be conclusive and binding on the Borrower. The Borrower understands, agrees and acknowledges the following: (a) the Bank
does not have any obligation to purchase, sell and/or match funds in connection with the use of the LIBOR Rate as a basis for calculating the rate of interest on a LIBOR Rate Loan, (b) the
LIBOR Rate may be used merely as a reference in determining such rate, and (c) the Borrower has accepted the LIBOR Rate as a reasonable and fair basis for calculating such rate, the LIBOR Rate
Prepayment Fee, and other 

9

 

funding
losses incurred by the Bank. Borrower further agrees to pay the LIBOR Rate Prepayment Fee and other funding losses, if any, whether or not the Bank elects to purchase, sell and/or match funds. 

        (r)   If
on or after the date hereof the adoption of any applicable law, rule or regulation or guideline (whether or not having the force of law), or any change therein, or
any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by
the Bank with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency: 

        (i)    shall
subject the Bank to any tax, duty or other charge with respect to its LIBOR Rate Loans or LIBOR Advantage Loans or its obligation to make LIBOR Rate Loans or LIBOR
Advantage Loans, or shall change the basis of taxation of payments to the Bank of the principal of or interest on its LIBOR Rate Loans or LIBOR Advantage Loans or any other amounts due under this
Agreement in respect of its LIBOR Rate Loans or LIBOR Advantage Loans or its obligation to make LIBOR Rate Loans or LIBOR Advantage Loans (except for the application or introduction of, or change in
the rate of, any Excluded Withholding Tax (as defined in Section 1(s) below), imposed by the jurisdiction (or any political subdivision or taxing authority thereof) under the laws of which the
Bank is organized or in
which the Bank's principal executive office is located, or to whose taxing authority the Bank is subject); or 

        (ii)   shall
impose, modify or deem applicable any reserve, special deposit or similar requirement (including, without limitation, any such requirement imposed by the Board of
Governors of the Federal Reserve System of the United States) against assets of, deposits with or for the account of, or credit extended by, the Bank or shall impose on the Bank or on the London
Interbank Market any other condition affecting its LIBOR Rate Loans or LIBOR Advantage Loans or its obligation to make LIBOR Rate Loans or LIBOR Advantage Loans; 

and
the result of any of the foregoing is to increase the cost to the Bank of making or maintaining any LIBOR Rate Loan or LIBOR Advantage Loan, or to reduce the amount of any sum received or
receivable by the Bank under this Agreement with respect thereto, by an amount deemed by the Bank to be material, then, within fifteen (15) days after Borrower's receipt of written notice by
the Bank (such notice to state, in reasonable detail, the relevant additional amount or amounts and the reasons therefor), the Borrower shall pay to the Bank such additional amount or amounts as will
compensate the Bank for such increased cost or reduction. 

        (s)   All
payments by the Borrower of principal of, and interest on, the LIBOR Rate Loans or LIBOR Advantage Loans and all other amounts payable hereunder shall be made free
and clear of and without deduction for any present or future income, excise or stamp taxes and other taxes, fees, duties, withholdings or other charges of any nature whatsoever imposed by any
jurisdiction or taxing authority thereof (such items being called "Withholding Taxes"), unless the deduction or withholding is required by law. In the
event that any withholding or deduction from any payment to be made by the Borrower hereunder is required in respect of any Withholding Taxes pursuant to any applicable law, rule or regulation, then
the Borrower will 

        (i)    pay
directly to the relevant authority the full amount of Withholding Taxes required to be so withheld or deducted; 

        (ii)   promptly
forward to the Bank documentation reasonably satisfactory to the Bank evidencing such payment to such authority; and 

        (iii)  in
the case of Withholding Taxes other than (i) franchise taxes, (ii) taxes imposed on or measured by the Bank's net income or receipts, or profits or
gains, (iii) taxes imposed on or measured by the Bank's net worth or capital, and (iv) taxes creditable by the Bank against its liability for taxes described in clause (i),
(ii) or (iii) above (such other taxes being referred to as 

10

 

 "Excluded Withholding Taxes"), pay to the Bank such additional amount or amounts as may be necessary to ensure that the net amount actually received by the Bank will equal the
full amount the Bank would have received had no such withholding or deduction been required. 

        Moreover,
if any Withholding Taxes other than Excluded Withholding Taxes are directly asserted against the Bank with respect to any payment received by the Bank hereunder, the Bank may
pay such Withholding Taxes and the Borrower will promptly pay such additional amount (including any penalties, interest or expenses) as is necessary in order that the net amount received by the Bank
after the payment of such Withholding Taxes (including any Withholding Taxes on such additional amount) shall equal the amount the Bank would have received had not such Withholding Taxes been
asserted. 

        If
the Borrower fails to pay any Withholding Taxes when due to the appropriate taxing authority or fails to remit to the Bank the required receipts or other required documentary
evidence, the Borrower shall indemnify the Bank for any incremental Withholding Taxes, interest or penalties that may become payable by the Bank as a result of any such failure. 

        (t)    Notwithstanding
anything to the contrary contained herein, Bank and Borrower agree that after the occurrence of an Event of Default which is continuing, Borrower shall
not request and Bank will not make LIBOR Rate Loans or LIBOR Advantage Loans. 

        (u)   In
addition to all other sums payable hereunder, the Borrower shall pay the Lender a fee equal to eighteen one-hundredths of one percent (0.18%) of the
difference between: (i) the Credit Limit (as it may be reduced under clause (w) below) and (ii) the average daily balance of (x) the aggregate outstanding principal amount
of loans and other extensions of credit hereunder plus (without duplication) (y) the undrawn amounts and other obligations under outstanding Letters of Credit, for each quarterly period this
Agreement is in effect. Such fee shall be payable quarterly in arrears and, unless previously paid by the Borrower, shall be treated as a loan to Borrower, which shall be added to Borrower's loan
balance pursuant to this Agreement. 

        (v)   Upon
the initial advance hereunder (excluding any foreign exchange contract obligation), the Borrower shall pay the Bank a one time usage fee of Forty Thousand
($40,000.00) Dollars and, if not already paid to the Bank, upon receipt of an invoice from the Bank, a commitment fee of Ten Thousand ($10,000.00) Dollars. 

        (w)  The
Borrower may terminate the Line of Credit at any time, or reduce the Credit Limit under the Line of Credit in part from time to time, prior to the Termination Date
without premium or penalty, except as provided in the next sentence, on five (5) Business Days prior written notice to Bank. In addition to any other fees required hereunder, the Borrower shall
pay the Bank a prepayment fee of one-eighth of one percent (.125%) of the Credit Limit if the Line of Credit is terminated prior to the Termination Date and replaced by debt financing with
another financial institution, payable on the date of such termination. The Bank shall not impose this prepayment fee if the Borrower repays, refinances or replaces the Line of Credit, directly or
indirectly, as a result of or through the issuance of new debt convertible into capital stock or other equity interests of the Borrower (which convertible debt need not equal or exceed the Credit
Limit in aggregate amount). 

        2.     BANK'S REPORTS. After the end of each month, Bank will render to Borrower a statement of Borrower's loan account with Bank
hereunder, showing all applicable credits and debits. Each statement shall be considered correct and to have been accepted by Borrower and shall be conclusively binding upon Borrower (in the absence
of demonstrable or manifest error) in respect of all charges, debits and credits of whatsoever nature contained therein under or pursuant to this Agreement, and the closing balance shown therein,
unless Borrower notifies Bank in writing of any discrepancy within thirty (30) days after receipt by Borrower of such monthly statement. 

11

 

3.    CONDITIONS OF LENDING.

        (a)   The
obligation of Bank to make the initial extension of credit, whether by making a loan or issuing or causing to be issued a Letter of Credit hereunder shall be subject
to the condition precedent that Bank shall have received all of the following: 

        (i)    This
Agreement, properly executed on behalf of Borrower. 

        (ii)   The
Note drawn to the order of Bank in the face amount of the Credit Limit. 

        (iii)  A
Stock Pledge Agreement, properly executed by the Borrower, substantially in the form of Exhibit 3 annexed hereto. 

        (iv)  Current
searches of appropriate filing offices showing that (A) no state or federal tax liens have been filed and remain in effect against Borrower, and
(B) no financing statements have been filed and remain in effect against Borrower, except those financing statements relating to liens set forth on Schedule "B", the liens of any secured lender
to be paid with the proceeds of the initial loan and those financing statements filed by the Bank. 

        (v)   A
certificate of the Clerk/Secretary or an Assistant Clerk/Secretary of the Borrower, certifying as to (A) the resolutions of the directors and, if required, the
shareholders of Borrower, authorizing the execution, delivery and performance of this Agreement and related documents, (B) the Articles of Organization and By-Laws of Borrower, and
(C) the signatures of the officers or agents of Borrower authorized to execute and deliver this Agreement and other instruments, agreements and certificates, including loan requests, on behalf
of Borrower. 

        (vi)  A
current certificate issued by the Secretary of State of the Commonwealth of Massachusetts, certifying that Borrower validly exists and is in good standing as a
corporation under the laws of Massachusetts. 

        (vii) An
opinion of counsel to the Borrower, addressed to Bank, substantially in the form of Exhibit 4 annexed hereto. 

        (viii) Certificates
of the insurance required under Section 9(a) hereof. 

        (ix)  Evidence
reasonably satisfactory to the Bank that no material adverse change in the financial condition, business, operations or assets of the Borrower and its
subsidiaries taken as a whole shall have occurred since September 5, 2003. 

        (b)   The
obligation of Bank to make each extension of credit, whether by making a loan or issuing or causing to be issued a Letter of Credit, hereunder shall be subject to
the further conditions precedent on such date: 

        (i)    the
representations and warranties contained in Sections 4 and 5 hereof are correct on and as of the date of such loan or the issuance of such Letter of Credit, as the
case may be, as though made on and as of such date, except to the extent that such representations and warranties relate solely to an earlier date; and 

        (ii)   no
event has occurred and is continuing, or would result from such loan or issuance of such Letter of Credit, as the case may be, which constitutes an Event of Default
or which, with notice or the passage of time or both, would constitute an Event of Default. 

        4.     BORROWER'S PLACES OF BUSINESS. Borrower warrants that, as of the date of this Agreement, Borrower has no places of
business other than those shown at the end of this Agreement, unless other places of business are listed on Schedule "A", annexed hereto, in which event Borrower represents that as of the date hereof
it has additional places of business at those locations set forth on Schedule "A". 

12

 

        Borrower's
principal executive office and the office where Borrower keeps its records concerning its accounts, contract rights and other property, in each case as of the date hereof, is
that shown at the end of this Agreement. As of the date hereof, all material Inventory owned by Borrower is stored at the locations set forth on Schedule "A". 

        Borrower
will promptly notify Bank in writing of any change in the location of its headquarters. 

        5.     BORROWER'S ADDITIONAL REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants that: 

        (a)   Borrower
is a corporation duly organized, validly existing and in good standing under the laws of The Commonwealth of Massachusetts and shall hereafter remain in good
standing as a corporation in that state, and is duly qualified and in good standing in every other state (other than California) in which the failure to qualify or become licensed could have a
Material Adverse Effect; Borrower is diligently taking such action as is necessary to return it to good standing in California. 

        (b)   Borrower's
exact legal name is as set forth in this Agreement. 

        (c)   The
organizational identification number of the Borrower is as set forth on Schedule "A" annexed hereto. 

        (d)   The
execution, delivery and performance of this Agreement, and any other document executed in connection herewith, are within the Borrower's corporate powers, have been
duly authorized, are not in contravention of law or the terms of the Borrower's charter, by-laws or other incorporation papers, or of any indenture, agreement or undertaking to which the
Borrower is a party or by which it or any of its properties may be bound. 

        (e)   All
Articles of Organization and all amendments thereto of Borrower have been duly filed and are in proper order. All capital stock issued by Borrower and outstanding
was and is properly issued and all books and records of Borrower, including but not limited to its minute books, by-laws and books of account, are accurate and up to date in all material
respects and will be so maintained. 

        (f)    Borrower
owns or has valid leasehold interests in all of the assets reflected in the most recent of Borrower's financial statements provided to Bank, except assets sold
or otherwise disposed of in the ordinary course of business since the date thereof, and such assets together with any assets acquired since such date, are free and clear of any lien, pledge, security
interest, charge, mortgage or encumbrance of any nature whatsoever, except (i) the security interests and other encumbrances (if any) listed on Schedule "B" annexed hereto, (ii) leases
of personal property not prohibited by this Agreement, or (iii) those liens permitted pursuant to Section 10(d) of this Agreement. Schedule "D" annexed hereto sets forth, as of the date
of this Agreement, each of Borrower's subsidiaries and the percentage equity ownership that Borrower holds in each such subsidiary. 

        (g)   Except
where the failure to do so could not reasonably be expected to have a Material Adverse Effect, (i) the Borrower has made or filed all tax returns, reports
and declarations relating to any material tax liability required by any jurisdiction to which it is subject; (ii) has paid all taxes shown or determined to be due thereon (giving effect to any
applicable extensions), except those being contested in good faith by appropriate proceedings; and (iii) has made adequate provision on the books of the Borrower for the payment of all taxes so
contested, so that no lien will encumber any assets of the Borrower (excluding a Permitted Lien described in Section 10(d)(iv)). 

        (h)   Borrower
(i) is subject to no charter, corporate or other legal restriction, or any judgment, award, decree, order, governmental rule or regulation or contractual
restriction which could have a Material Adverse Effect, and (ii) is in compliance with its charter documents and by-laws, all contractual requirements by which it or any of its
properties may be bound and all applicable laws, rules and regulations (including without limitation those relating to environmental protection but excluding those the validity or applicability of
which it is contesting in good faith), other than provisions 

13

 

of
any of the foregoing described in this clause, (ii) the failure to comply with which could not reasonably be expected to have a Material Adverse Effect. 

        (i)    There
is no action, suit, proceeding or investigation pending or, to Borrower's knowledge, threatened against it or any of its assets before or by any court or other
governmental authority as to which there is a reasonable possibility of a determination adverse to Borrower and that, if determined adversely to Borrower, would have a Material Adverse Effect. 

        (j)    Borrower
is in compliance with ERISA in all material respects; no Reportable Event has occurred and is continuing with respect to any Plan which could reasonably be
expected to have a Material Adverse Effect; and it has no unfunded vested liability under any Plan. The word "Plan" as used in this Agreement means any
employee plan subject to Title IV of the Employee Retirement Income Security Act of 1974 ("ERISA") maintained for employees of Borrower, any subsidiary
of Borrower or any other trade or business under common control with Borrower within the meaning of Section 414(c) of the Internal Revenue Code of 1986 or any regulations thereunder. 

        (k)   Neither
Borrower nor any of its affiliates is a party to or bound by any agreement, indenture, or other instrument (excluding the Loan Documents) which prohibits the
creation, incurrence or allowance to exist of any mortgage, deed of trust, pledge, lien, security interest or other encumbrance or conveyance upon any of such Borrower's property in favor of the Bank. 

        (l)    Borrower
will, promptly upon either its chief executive officer or chief financial officer obtaining knowledge thereof, give notice to Bank of (i) any default or
Event of Default; (ii) any material casualty, loss, other force majeure event or depreciation to any inventory or other property of Borrower, or any litigation, investigation or other
proceeding against or involving Borrower, the result of any of which described in this clause (ii) could reasonably be expected to have a Material Adverse Effect; (iii) any litigation,
investigation, other proceeding or dispute affecting Borrower which relates, in whole or in part, to any of the transactions contemplated by any of the Loan Documents, or which could reasonably be
expected to have a Material Adverse Effect; (iv) any Reportable Event in respect of any Plan or any other event or change in a Plan which could reasonably be expected to have a Material Adverse
Effect; or (v) any release of any hazardous materials or hazardous waste or hazardous or toxic substances at any location owned or leased by any Borrower, which release is in violation of any
applicable environmental laws, or any investigation or proceeding by any governmental body alleging or relating to the violation by Borrower of any law or regulation, excluding any such matter
described in this clause (v) that could not reasonably be expected to have a Material Adverse Effect. Borrower will furnish to Bank from time to time all information which Bank shall reasonably
request with respect to the status of any litigation, investigation, other proceeding or dispute to which Borrower is a party. 

6.    CAPITAL ADEQUACY.

        If
any change in, or the introduction, adoption, effectiveness, interpretation, reinterpretation or phase-in of, any law or regulation, directive, guideline, decision or
request (whether or not having the force of law) of any court, central bank, regulator or other governmental authority affects or would affect the amount of capital required or expected to be
maintained by the Bank, or person controlling the Bank, with respect to the loans made by the Bank hereunder and the Bank determines (in its sole and absolute discretion) that the rate of return on
its or such controlling person's capital as a consequence of its commitments hereunder or the loans made by the Bank hereunder is reduced to a level below that which the Bank or such controlling
person could have achieved but for the occurrence of any such circumstance, then, in any such case upon notice from time to time by the Bank to the Borrower, the Borrower shall immediately pay
directly to the Bank additional amounts sufficient to compensate the Bank or such controlling person for such reduction in rate of return. A statement of the Bank as to any such additional amount or
amounts (including calculations thereof in reasonable 

14

 

detail)
shall, in the absence of manifest or demonstrable error, be conclusive and binding on the Borrower. In determining such amount, the Bank may use any method of averaging and attribution that it
(in its sole and absolute discretion) shall deem applicable. 

7.    SET OFF; DEPOSIT ACCOUNTS; EXPENSES.

        (a)   Borrower
or any guarantor of the Obligations hereby grant to Bank a lien and right of setoff as security for the Obligations, whether now existing or hereafter arising,
upon and against all deposits, credits, collateral and property, now or hereafter in the possession, custody, safekeeping or control of Bank or any entity in the control of Citizens Financial
Group, Inc., or in transit to any of them. At any time after the occurrence and during the continuation of an Event of Default, without demand or notice, Bank may set off the same or any part
thereof and apply the same to any Obligation even though unmatured and regardless of the adequacy of any other collateral securing the Obligations. ANY AND ALL RIGHTS TO REQUIRE BANK TO EXERCISE ITS
RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER OR
ANY GUARANTOR, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED. 

        (b)   Bank
shall be Borrower's main bank of deposit. 

        (c)   Borrower
shall pay to Bank on demand any and all reasonable counsel fees and other expenses incurred by Bank in connection with the preparation, interpretation,
enforcement, administration or amendment of this Agreement, or of any documents relating thereto, and any and all expenses which may be expended by Bank concerning any matter growing out of or
connected with the subject matter of this Agreement, the Obligations or any of Bank's rights or interests therein or thereto, including, without limiting the generality of the foregoing, any counsel
fees or expenses incurred in any bankruptcy or insolvency proceedings and all costs and expenses incurred by Bank in connection with the defense, settlement or satisfaction of any action, claim or
demand asserted against Bank in connection therewith. At its option, and without limiting any other rights or remedies, Bank may at any time pay or discharge any taxes, liens, security interests or
other encumbrances at any time levied against or placed on any of the assets of the Borrower, and may procure and pay any premiums on any insurance required hereunder to be carried by Borrower, and
provide for the maintenance and preservation of any of the assets of the Borrower, and otherwise take any action reasonably deemed necessary by Bank to protect its security, and all amounts expended
by Bank in connection with any of the foregoing matters, including reasonable attorneys' fees, shall be considered Obligations of Borrower. 

8.    BORROWER'S REPORTS.

        (a)   Borrower
will furnish Bank as soon as available, and in any event within sixty (60) days after the close of each of the first three quarterly periods of its
fiscal year (commencing with the quarter ended February 20, 2004), its Quarterly Report on Form 10-Q for such period, as filed with the United States Securities and Exchange
Commission (the "SEC"), which shall include the financial statements required by Form 10-Q for such period and the comparisons to the
figures for prior periods as required by Form 10-Q, all prepared in accordance with generally accepted accounting principles consistently applied (subject to year end adjustments),
and including any certifications as to such financial statements by any officers of the Borrower as required by the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations promulgated by the SEC thereunder, as amended. 

        (b)   Borrower
will furnish Bank, annually, as soon as available, and in any event within one hundred twenty (120) days after the end of each fiscal year of Borrower
(commencing with the year 

15

 

ended
November 29, 2003), its Annual Report of Form 10-K for such year, as filed with the SEC, which shall include the financial statements required by
Form 10-K for such year and the comparisons to the figures for prior periods as required by Form 10-K, all prepared in accordance with generally accepted
accounting principles consistently applied, accompanied by an unqualified audit report thereon by Ernst & Young LLP or any other independent public accountants of recognized national standing
selected by the Borrower. 

        (c)   Borrower
will promptly, upon receipt thereof, deliver to Bank, copies of any material reports submitted to the Borrower by Borrower's independent public accountants in
connection with the examination of the financial statements of the Borrower made by such accountants (the so-called "Management Letter"). 

        (d)   Borrower
will deliver to Bank, concurrently with or before its delivery of any Quarterly Report on Form 10-Q under clause (a) above or Annual
Report on Form 10-K under clause (b) above, a Compliance Certificate in the form of Exhibit 5 annexed hereto (herein a "Compliance
Certificate") with respect to Borrower's compliance with the financial covenants set forth in Sections 10(a) and (b) hereof as of the end of the fiscal period covered by
such report and for the period of four consecutive fiscal quarters then ended, as applicable. At the time of each request by the Borrower for a loan or advance hereunder, the Borrower shall update the
then-effective Compliance Certificate (or if none has yet been delivered, deliver its first Compliance Certificate) to report (i) its Senior Debt Ratio and Total Debt Ratio at such
time and (ii) if such loan or advance will be used to finance all or part of the acquisition cost of a Permitted Acquisition, its consolidated working capital at such time, in each case based
on its consolidated senior funded debt and consolidated total funded debt (giving effect to such loan or advance) at such time and, if applicable, giving effect to such acquisition (including for
purposes of determining Borrower EBITDA and adjusted acquisition EBITDA (each as defined in Section 10 hereof)). 

        (e)   In
addition to the foregoing, the Borrower promptly shall provide Bank with such other and additional information concerning the Borrower, the operation of the
Borrower's business, and the Borrower's financial condition, including financial reports and statements, as Bank may from time to time reasonably request from the Borrower. All financial statements
provided Bank by the Borrower shall be prepared in accordance with generally accepted accounting principles (except, with respect to interim unaudited financial statements, for the omission of
footnotes and subject to year-end audit adjustments) applied consistently in the preparation thereof and with prior periods to fairly reflect the financial conditions of the Borrower at
the close of, and its results of operations for, the periods in question. 

9.    GENERAL AGREEMENTS OF BORROWER.

        (a)   Borrower
agrees to keep its assets insured with coverage and in amounts not less than that usually carried by one engaged in a like business. 

        (b)   Bank
or its agents have the right, on reasonable prior notice to the Borrower (except when an Event of Default shall have occurred and be continuing, when no prior
notice shall be required) and during normal business hours, to inspect the assets of the Borrower and all records pertaining thereto at intervals to be determined by Bank and without hindrance or
delay. 

        (c)   Borrower
will at all times keep books and records that are accurate and complete in all material respects and Bank, or any of its agents, shall have the right, on
reasonable prior notice to the Borrower (except when an Event of Default shall have occurred and is continuing, when no prior notice shall be required) and during normal business hours, to call at
Borrower's place or places of business at intervals to be determined by Bank, and without hindrance or delay, to inspect, audit, check, and make extracts from any copies of the books, records,
journals, orders, receipts, and correspondence which relate to Borrower's business and the general financial condition of Borrower. 

16

 

        (d)   Borrower
will maintain a standard and modern system of accounting which enables Borrower to produce financial statements in accordance with generally accepted accounting
principles and maintain records pertaining to the assets of the Borrower that contain information as from time to time may be reasonably requested by Bank. 

        (e)   Borrower
will maintain its corporate existence in good standing in the jurisdiction of its incorporation and in the other jurisdictions in which it conducts business and
comply with all laws and regulations of the United States or of any state or states thereof or of any political subdivision thereof, or of any governmental authority which may be applicable to it or
to its business except where any failure to so maintain or comply could not reasonably be expected to have a Material Adverse Effect. 

        (f)    Borrower
will pay all real and personal property taxes, assessments and charges and all franchises, income, unemployment, old age benefits, withholding, sales and other
taxes assessed against it, or payable by it at such times and in such manner as to prevent any penalty from accruing or any lien or charge from attaching to its property, except where any of the same
are being contested in good faith by appropriate proceedings and adequate reserves therefor have been taken in accordance with generally accepted accounting principles. 

        (g)   Borrower
will promptly pay when due (giving effect to any applicable extensions) all taxes and assessments upon its assets or for its use or operation thereof or upon
this Agreement, or upon any note or notes evidencing the Obligations, and will, at the request of Bank, promptly furnish Bank the receipted bills therefor. At its option, Bank may discharge taxes,
liens or security interests or other encumbrances at any time levied or placed on any assets of the Borrower, may pay for insurance as required to be maintained by the Borrower by this Agreement on
any such assets of the Borrower and may pay for the maintenance and preservation of any such assets of the Borrower. Borrower agrees to reimburse Bank on demand for any payments made, or any expenses
incurred by Bank pursuant to the foregoing authorization, and upon failure of the Borrower so to reimburse Bank, any such sums paid or advanced by Bank shall be deemed part of the Obligations. 

        (h)   Borrower
will promptly notify Bank upon receipt of notification of any potential or known release or threat of release, in violation of any applicable environmental
laws, of hazardous materials, hazardous waste, hazardous or toxic substance or oil from any site operated by Borrower or of the incurrence of any material expense or loss in connection therewith or
with the Borrower's obtaining knowledge of any investigation, action or the incurrence of any material expense or loss by any governmental authority in connection with the assessment, containment or
removal of any hazardous material or oil for which expense or loss the Borrower may be liable. As used herein, the terms "hazardous waste," "hazardous or toxic substance," "hazardous material" or
"oil" shall have the same meanings as defined and used in any of the following (the "Acts"): the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 USC Sections 9601-9657, as amended by the Superfund Accounts and Reauthorization Act of 1986; the Federal Resource Conservation and Recovery Act, 42 USC Sections
6901 et seq.; the Hazardous Materials Transportation Act, 49 USC Sections 1801 et seq.; the Toxic
Substances Control Act, 15 USC Sections 2601 et seq.; the Federal Water Pollution Control Act, 33 USC Sections 1251 et
seq.; the Clean Air Act, 42 USC Sections 741 et seq.; the Clean Water Act, 33 USC Section 701; the Safe Drinking Water
Act, 42 USC Sections 300(f)-300(j); M.G.L.A. c. 21E (Massachusetts Oil and Hazardous Material Release Prevention Act); M.G.L.A. c. 21C (Massachusetts Hazardous Waste Management Act);
and/or the regulations adopted and publications promulgated pursuant to any of the Acts, as the same may be amended from time to time. 

        (i)    Except
for Bank's gross negligence or willful misconduct, Borrower will indemnify and save Bank harmless from all loss, costs, damage, liability or expenses (including,
without limitation, court costs and reasonable attorneys' fees) that Bank may sustain or incur by reason of enforcing the Obligations, or in the prosecution or defense of any action or proceeding
(other than the unsuccessful 

17

 

defense
of any action or claim by Borrower against Bank or any of its affiliates) concerning any matter growing out of or in connection with this Agreement and/or any other documents now or hereafter
executed in connection with this Agreement and/or the Obligations. This indemnity shall survive the repayment of the Obligations and the termination of Bank's agreement to make loans available to
Borrower and the termination of this Agreement. 

        (j)    At
the reasonable request of Bank, Borrower will furnish to Bank, from time to time, within ten (10) Business Days after the accrual in accordance with applicable
law of Borrower's obligation to make deposits for F.I.C.A. and withholding taxes and/or sales taxes, proof reasonably satisfactory to Bank that such deposits have been made as required. Should
Borrower fail to furnish such proof to Bank within ten (10) Business Days after a request by Bank, then Bank may, in its reasonable discretion, (a) make any of such deposits or any part
thereof, (b) pay such taxes, or any part thereof, or (c) set-up such reserves as Bank, in its reasonable judgment, shall deem necessary to satisfy the liability for such
taxes. Each amount so deposited or paid shall constitute an advance under the terms hereof, repayable on demand with interest, as provided herein. Nothing herein shall be deemed to obligate Bank to
make any such deposit or payment or set-up such reserve and the making of one or more of such deposits or payments or the setting-up of such reserve shall not constitute
(i) an agreement on Bank's part to take any further or similar action, or (ii) a waiver of any default by Borrower under the terms hereof. 

        (k)   The
Borrower will deliver to the Bank within thirty (30) days of the date of this Agreement a list of the leases of personal property to which the Borrower is a
party. 

        (l)    Borrower
will, at its expense, upon the reasonable request of Bank promptly and duly execute and deliver such documents and assurances and take such actions as may be
necessary or desirable or as Bank may reasonably request in order to correct any defect, error or omission which may at any time be discovered or to more effectively carry out the intent and purpose
of this Agreement and to establish, perfect and protect Bank's rights and remedies created or intended to be created hereunder. 

        10.   BORROWER'S NEGATIVE COVENANTS. Borrower will not at any time: 

        (a)   (Consolidated Working Capital) permit its consolidated working capital to be less than Twenty Five Million
($25,000,000.00) Dollars as of the end of any fiscal quarter of the Borrower (commencing with the fiscal quarter ended February 20, 2004); 

        (b)   (Debt Ratios) (i) permit the Senior Debt Ratio measured as of the end of each fiscal quarter (commencing with the
fiscal quarter ended February 20, 2004) to be more than 2.0x, or (ii) permit the Total Debt Ratio measured as of the end of each fiscal quarter (commencing with the fiscal quarter ended
February 20, 2004) to be more than 3.5x; 

        (c)   (Disposition of Assets) sell, assign, exchange or otherwise dispose of any of its assets, other than (i) inventory
consisting of scrap, waste, defective or damaged goods and the like; (ii) obsolete goods; (iii) inventory or other assets sold in the ordinary course of business; (iv) equipment
which is no longer required or deemed necessary for the conduct of Borrower's business, so long as Borrower receives therefor a sum substantially equal to such equipment's fair value or replaces such
equipment with other equipment of similar value; (v) the licensing by Borrower of intellectual property rights in the ordinary course of business; (vi) leases or subleases of real
property that do not interfere with Borrower's business; (vii) sales or other dispositions of any assets of Borrower (including, but not limited to, the stock or other equity interests of any
subsidiary) to any subsidiary of the Borrower that has at least 65% of its stock pledged to the Bank (or at least 65% of the stock of whose direct or indirect parent company has been pledged to the
Bank); (viii) the use or transfer of money, cash equivalents or similar investments in a manner that is not prohibited by the terms of this Agreement; and (ix) provided that no Event of
Default has occurred and is then continuing, any Permitted Disposition. 

18

 

        As
used in this Agreement, a "Permitted Disposition" shall mean a disposition of any assets or business of the Borrower or any of its
subsidiaries in an aggregate amount for all such dispositions during the term of this Agreement not exceeding $5,000,000.00. 

        (d)   (Liens) create, permit to be created or suffer to exist any lien, encumbrance or security interest of any kind
("Lien") upon any of the property of Borrower, now owned or hereafter acquired, except (the following, "Permitted
Liens"): (i) landlords', carriers', warehousemen's, mechanics' and other similar liens arising by operation of law in the ordinary course of Borrower's business;
(ii) arising out of pledges or deposits under worker's compensation, unemployment insurance, old age pension, social security, retirement benefits or other similar legislation;
(iii) purchase money Liens arising in the ordinary course of business securing indebtedness of other obligations (including, but not limited to, capital leases) incurred to finance the purchase
of equipment or other assets (so long as such Liens extend to no other property); (iv) Liens for unpaid taxes that are either (x) not yet due and payable, or (y) are the subject
of permitted protests; (v) Liens which are the subject of permitted protests; (vi) those Liens and encumbrances set forth on Schedule "B" annexed hereto; (vii) the interests of
lessors and lessees under leases of equipment or real property (including customary contractual landlords' liens under leases entered into in the ordinary course of business); (viii) the
interests of licensors and licensees under licenses of intellectual property rights in the ordinary course of business; (ix) Liens consisting of bankers liens and rights of set-off
arising by operation of law; (x) Liens on real or personal property acquired in a Permitted Acquisition or other acquisition not prohibited under clause (h) below, provided that such
Liens were not created in contemplation of such acquisition and do not apply to any other property of Borrower and, to the extent they secure any indebtedness, secure only indebtedness permitted under
this Agreement; (xi) encroachments, easements, rights-of-way, covenants, zoning restrictions and other title exceptions, encumbrances and restrictions on the use of real
property that do not materially interfere with the ordinary conduct of Borrower's business; (xii) deposits securing liabilities to insurance carriers under insurance arrangements;
(xiii) pledges and deposits to secure the performance of bid, trade contracts (other than for borrowed money), leases, surety and appeal bonds, performance bonds and other like obligations
incurred in the ordinary course of business; and (xiv) in favor of Bank; the term "permitted protests" as used herein means the right of the Borrower to protest any Lien (other than a Lien that
secures the Obligations), tax (other than payroll taxes or taxes that are the subject of a federal or state tax lien) or rental payment, provided that (x) an adequate reserve with respect to
such liability is established on the books of the Borrower in accordance with generally accepted accounting principles and (y) any such protest is instituted and diligently prosecuted by the
Borrower in good faith; 

        (e)   (Dividends) pay any dividends on or make any distribution on account of any class of Borrower's capital stock in cash or
in property (other than in the form of shares of Borrower's capital stock or other equity interests), or redeem, purchase or otherwise acquire for cash or property (other than shares of Borrower's
capital stock or other equity interests), directly or indirectly, any of such stock, excluding repurchases of restricted stock from current or former directors, officers, employees or consultants, or
family members of any of the foregoing, or trusts (or other estate planning vehicles) for the benefit of any of the foregoing; 

        (f)    (Loans) make any loans or advances to any individual, partnership, trust or other corporation, except (A) loans
and advances to officers, employees or consultants, (B) as long as no Event of Default exists, loans and advances to wholly-owned subsidiaries whose stock is pledged to the Bank in accordance
with the Stock Pledge Agreement, (C) as long as no Event of Default exists, loans and advances to its NeuCo, Inc. subsidiary, provided that the aggregate outstanding amount of all such
loans and advances, together with the aggregate amount of all capital contributions permitted under clause (i)(ii)(C) below, made after the date hereof shall not exceed Two Million
($2,000,000.00) Dollars, (D) advances made in connection with purchases and sales of goods and services in the 

19

 

ordinary
course of business, (E) investments permitted under clause (h) below, and (F) loans and advances listed on Schedule "E" annexed hereto; 

        (g)   (Guarantees) assume, guaranty, endorse or otherwise become directly or contingently liable in respect of (including
without limitation by way of agreement, contingent or otherwise, to purchase, provide funds to or otherwise invest in a debtor or otherwise to assure a creditor against loss), any indebtedness of any
individual, partnership, trust or other corporation, except (i) guarantees by endorsement of instruments for deposit or collection in the ordinary course of business, (ii) guarantees in
favor of Bank, (iii) surety bonds, performance bonds and similar obligations incurred in the ordinary course of business, (iv) customary indemnities in connection with sales of assets or
services under contracts entered into in the ordinary course of business or in connection with dispositions of assets permitted hereunder, (v) customary indemnities of officers and/or directors
(or comparable managers) in connection with their services as such), (vi) guarantees of the obligations of subsidiaries, (vii) reimbursement and similar obligations with respect to the
letters of credit listed on Schedule "F" annexed hereto and any replacements or extensions thereof, and any other obligations listed on Schedule "F" annexed hereto and (viii) any indebtedness
permitted under clause (h) below; 

        (h)   (Indebtedness) incur any indebtedness for borrowed money (including obligations under capital leases), except
(i) indebtedness described on Schedule "G" annexed hereto, and any refinancings or renewals thereof that do not increase the principal amount thereof, (ii) deferred purchase price
payment obligations or other indebtedness incurred to current or former directors, officers, employees or consultants, or family members of any of the foregoing, or trusts (or other estate planning
vehicles) for the benefit of any of the foregoing, in respect of repurchases by the Borrower of restricted stock from any such persons; (iii) to the extent constituting indebtedness, guarantees
and other obligations permitted under clause (g) above and investments permitted under clause (i) below, (iv) trade debt incurred and payable in the ordinary course of business
(v) Purchase Money Indebtedness in an aggregate amount outstanding at any time not exceeding One Million ($1,000,000.00) Dollars, (vi) unsecured indebtedness owed to any wholly-owned
subsidiary, (vii) subordinated indebtedness, and (viii) up to Five Million ($5,000,000.00) Dollars in aggregate principal amount of other unsecured indebtedness outstanding at any time. 

        As
used in this Agreement, "Purchase Money Indebtedness" shall mean indebtedness (including obligations under capital leases) incurred to
finance the acquisition cost of any fixed assets, including equipment or other personal property and, if secured, secured solely by such assets. 

        (i)    (Investments, Acquisitions) (i) use any loan proceeds to purchase or carry any "margin stock" (as defined in
Regulation U of the Board of Governors of the Federal Reserve System), (ii) invest in or purchase any stock or securities of any individual, partnership, trust or other corporation
except (A) investments in and ownership of capital stock or other ownership interests in subsidiaries whose stock is pledged to the Bank in accordance with the Stock Pledge Agreement,
(B) Permitted Acquisitions (as defined below), (C) as long as no Event of Default exists, capital contributions to wholly-owned subsidiaries, (D) as long as no Event of Default
exists, capital contributions to its NeuCo, Inc. subsidiary, provided that the aggregate outstanding amount of all such capital contributions, together with the aggregate amount of all loans
and advances permitted under clause (f)(C) above, made after the date hereof shall not exceed Two Million ($2,000,000.00) Dollars, (E) investments in cash equivalents,
(F) investments in accordance with the Borrower's "Investment Policy" as approved (or revised) by its Board of Directors from time to time (a copy of which Investment Policy as in effect on the
date hereof is attached hereto as Exhibit 6; and the Borrower covenants to notify the Bank of any such revision before such revision by the Borrower's Board of Directors), and (G) loans
and advances permitted under clause (f) above, or (iii) except for Permitted Acquisitions, make any acquisitions of all or substantially all of the business or assets of any individual,
partnership, trust or other corporation. 

20

   
        As used in this Agreement, a "Permitted Acquisition" shall mean (i) any acquisition described on Schedule "C" annexed hereto or
(ii) any other acquisition, whether by merger, stock purchase, asset purchase or otherwise, (A) that is of a business or assets in a line or lines of business similar to the business of
the Borrower; (B) that is acquisition EBITDA accretive on a consolidated historical basis for the period of four (4) consecutive fiscal quarters of the target business most recently
ended, determined as of the time of the acquisition and without regard to any financing for such acquisition or the Borrower's outstanding equity securities (or any issuance of or change therein in
connection with such acquisition); (C) that on a pro forma basis would not cause Borrower to violate any of its covenants herein; and (D) the due diligence materials and reports received
or compiled by the Borrower for which the Bank has reviewed (or had a reasonable opportunity to review). 

        (i)    (Subsidiaries) sell, transfer or otherwise dispose of any stock of any subsidiary of Borrower, other than pursuant to a
Permitted Disposition or other disposition permitted under Section 10(c) hereof or the liquidation or winding up of any immaterial, non-operating subsidiary; 

        (j)    (Mergers, Consolidations or Joint Ventures) except for Permitted Acquisitions and Permitted Dispositions,
(i) merge or consolidate with or into any corporation; or (ii) enter into any joint venture or partnership with any person, firm or corporation; 

        (k)   (Change in Legal Status) change its type of organization, jurisdiction of organization or other legal structure. If the
Borrower does not have an organizational identification number and later obtains one, the Borrower shall promptly notify the Lender of such organizational identification number. 

        (l)    (Negative Pledge) directly or indirectly, enter into any agreement, indenture, or other instrument with any person other
than the Bank which prohibits the creation, incurrence or allowance to exist of any mortgage, deed of trust, pledge, lien, security interest or other encumbrance or conveyance upon the Borrower's
property in favor of the Bank. 

        For
purposes of this section and the other provisions of this Agreement: 

        "acquisition EBITDA" shall mean, with respect to any Permitted Acquisition, the actual historical EBITDA of the target business in such
Permitted Acquisition for the period of the four consecutive fiscal quarters of such target business most recently ended before such acquisition, including any pro forma savings of
non-recurring costs or expenses that the Borrower expects to realize
from such acquisition and that have been approved by the Bank (such approval not to be unreasonably withheld) at the time of acquisition. 

        "adjusted acquisition EBITDA" shall mean, with respect to any Permitted Acquisition, acquisition EBITDA for such Permitted Acquisition
divided by 12 multiplied by the difference between 12 and the number of completed months between the date of the completion of such Permitted Acquisition and the last day of any period of four
consecutive fiscal quarters of the Borrower then being tested under the Senior Debt Ratio and/or the Total Debt Ratio. 

        "affiliate" shall mean any person or entity (i) which directly or indirectly controls, or is controlled by or is under common
control with the Borrower or a subsidiary, (ii) which directly or indirectly beneficially holds or owns ten (10%) percent or more of any class of voting stock of the Borrower or any subsidiary,
or (iii) ten (10%) percent or more of the voting stock of which is directly or indirectly beneficially owned or held by the Borrower or a subsidiary; 

        "Borrower EBITDA" shall mean, for the applicable period, the consolidated net income (or loss) of the Borrower and its subsidiaries for
such period before the payment of interest and taxes, plus depreciation and amortization, plus expenses, costs and fees (including expenses, costs,
commissions and fees of attorneys, consultants, investment banks, brokers, accountants and other advisors) incurred or paid in respect of any acquisition of any business or assets of any person or
entity the addition of which herein is approved by the Bank (such approval not to be unreasonably withheld), plus (without 

21

 

duplication)
all non-cash write -downs, losses and charges (including impairment of goodwill, write-downs of intangibles, and amortization of stock-based compensation), all determined in
accordance with generally accepted accounting principles; 

        "capital assets" shall mean assets that, in accordance with generally accepted accounting principles, are required or permitted to be
depreciated or amortized on the Borrower's balance sheet; 

        "capital leases" shall mean capital leases, conditional sales contracts and other title retention agreements relating to the purchase or
acquisition of capital assets, in each case that are required to be capitalized for financial reporting purposes in accordance with generally accepted accounting principles; 

        "cash equivalents" shall mean (i) marketable direct obligations issued by the United States or any agency thereof or
unconditionally guaranteed by the United States, in each case maturing within 2 years from the date of the acquisition thereof, (ii) marketable direct obligations issued by any state of
the United States or any political subdivision or public instrumentality thereof maturing within 2 years from
the date of acquisition thereof and, at the time of acquisition, having the highest rating obtainable from S&P or Moody's or Fitch, (iii) commercial paper maturing not more than 270 days
from the date of acquisition and having a rating of A-1 or better from S&P or P-1 or better from Moody's or F-1 or better from Fitch, (iv) certificates of
deposit and bankers' acceptances maturing not more than 18 months after the date of issue issued by, and money market or demand deposit accounts maintained at, commercial banking institutions
organized or licensed under the laws of the United States or any state thereof and having combined capital and surplus and undivided profits of not less than $250,000,000.00, (v) repurchase
agreements which are entered into with major money center banks included in the commercial banking institutions described in clause (iv) above and which are secured by readily marketable direct
obligations of the government of the United States or any agency thereof, (vi) money market accounts maintained with mutual funds having assets in excess of $250,000,000.00, (vii) tax
exempt securities rated A or better by Moody's or A+ or better by S&P or the equivalent rating or better by Fitch, and (viii) foreign currency investments of credit quality substantially
similar to the investments described above made in the ordinary course of business; 

        "consolidated senior funded debt" shall mean the consolidated total funded debt minus all subordinated debt; 

        "consolidated total funded debt" shall mean the following for the Borrower and its subsidiaries on a consolidated basis: (i) all
liabilities for borrowed money, for the deferred purchase price of property or services (other than trade indebtedness incurred in the ordinary course of business), and under leases which are or
should be, under generally accepted accounting principles, recorded as capital leases, in respect of which a person or entity is directly or indirectly, absolutely or contingently liable as obligor,
guarantor, endorser or otherwise, or in respect of which such person or entity otherwise assures a creditor against loss, and (ii) all liabilities of the type described in (i) above
which are secured by (or for which the holder has an existing right, contingent or otherwise, to be secured by) any lien upon property owned by such person or entity, whether or not such person or
entity has assumed or become liable for the payment thereof; 

        "consolidated working capital" shall mean current assets minus current liabilities; 

        "control" shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies
of any person or entity, whether through the ownership of voting securities, by contract or otherwise; 

        "current assets" shall mean the total of all assets of Borrower and its subsidiaries on a consolidated basis which properly may be
classified as current in accordance with generally accepted accounting principles; 

22

 

        "current liabilities" shall mean the total of all liabilities of the Borrower and its subsidiaries on a consolidated basis which properly
may be classified as current in accordance with generally accepted accounting principles, excluding any such liability in respect of the principal amount of loans and other extensions of credit
outstanding under the Loan Documents. 

        "distributions" shall mean all payments or distributions to shareholders in cash or in property on account of any class of Borrower's
capital stock; 

        "EBITDA" shall mean, for the applicable period, net income (or loss) before the payment of interest and taxes, plus depreciation and
amortization. 

        "interest" shall mean for the applicable period, all interest paid or payable, including, but not limited to, interest paid or payable on
indebtedness and on capital leases, determined in accordance with generally accepted accounting principles; 

        "Senior Debt Ratio" shall mean, at any date, the ratio of (x) consolidated senior funded debt (inclusive of any borrowing requested
but not yet funded hereunder but exclusive of subordinated debt) at such date to (y) the sum of Borrower EBITDA for the period of four consecutive fiscal quarters ending on or most recently
before such date plus adjusted acquisition EBITDA. 

        "subordinated debt" shall mean (i) any indebtedness of Borrower (A) the principal of which matures in its entirety at least
one year after the Termination Date, (B) the principal of which is not redeemable, payable or able to be required to be purchased or otherwise retired or extinguished by the holder or holders
thereof or the Borrower before one year after the Termination Date (other than pursuant to any redemption, conversion, exchange, call or similar event solely for equity securities of the Borrower or
solely with the proceeds of any issuance of equity securities by the Borrower), (C) interest or premium on which is consistent with market rates for indebtedness of such type and may be payable
in cash or other property of the Borrower during the term of this Agreement, and (D) which is otherwise subordinated to the Obligations on terms and conditions reasonably satisfactory to Bank,
and (ii) any other indebtedness of the Borrower that is subordinated to the Obligations on terms and conditions satisfactory to the Bank. 

        "subsidiary" of any person or entity shall mean a corporation, partnership, limited liability company or other entity in which that person
or entity directly or indirectly beneficially holds or owns capital stock or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons
performing similar functions; 

        "Total Debt Ratio" shall mean, at any date, the ratio of (x) consolidated total funded debt (inclusive of any borrowing requested
but not yet funded hereunder and inclusive of subordinated debt) at such date
to (y) the sum of Borrower EBITDA for the period of four consecutive fiscal quarters ending on or most recently before such date plus adjusted acquisition EBITDA; 

        "wholly-owned subsidiary" of any person or entity shall mean a subsidiary of such person or entity all of the capital stock or other
ownership interests of which (exclusive of any share holdings by directors, officers or other persons as required by applicable local law) are beneficially held or owned by such person or entity
directly or indirectly. 

11.    DEFAULT; RIGHTS AND REMEDIES UPON DEFAULT.

        (a)   Upon
the occurrence and during the continuation of any one or more of the following events (herein, "Events of Default"),
Bank may decline to make any or all further loans or issue Letters of Credit hereunder or under any other agreements with Borrower, and Bank may declare all Obligations immediately due and payable, at
the option of Bank and without notice or demand, namely: 

        (i)    The
failure by the Borrower to pay when due any principal (other than principal due on the Termination Date for which there shall be no grace period), interest, fees,
costs, expenses or 

23

 

other
Obligations due pursuant to this Agreement or any other Loan Document, and such failure continues for a period of more than five (5) days. 

        (ii)   Default
by the Borrower in any material respect in the observance or performance of any of the covenants or agreements of the Borrower contained in Section 9(e)
(insofar as such provision requires maintenance of the Borrower's corporate existence) or any provision of Section 10 of this Agreement. 

        (iii)  The
failure by the Borrower to promptly, punctually and faithfully perform or observe, in all material respects, any term, covenant or agreement (other than any term,
covenant or agreement a default in the performance or observance of which is elsewhere in this Section specifically dealt with) on its part to be performed or observed pursuant to any of the
provisions of this Agreement or any other Loan Document which is not remedied within the earlier of fifteen (15) days after notice thereof by Bank to Borrower. 

        (iv)  Any
representation or warranty made by the Borrower to Bank in this Agreement or any other Loan Document or any certificate or other document delivered in connection
herewith or therewith was not true or accurate in any material respect when given. 

        (v)   The
occurrence of any event such that (after giving effect to any applicable grace period) any indebtedness for borrowed money by the Borrower from any lender other than
Bank in an outstanding principal amount of $5,000,000 could be accelerated by the lender, notwithstanding that such acceleration has not taken place. 

        (vi)  Any
action or proceeding by, against, or relating to the Borrower, or its property or assets, which action or proceeding constitutes the application for, consent to, or
sufferance of the appointment of a receiver, trustee or similar person, pursuant to court action or otherwise, over all or any material part of the Borrower's property, and, if such action or
proceeding is involuntary against the Borrower, such action or proceeding shall continue undismissed for sixty (60) days. 

        (vii) The
granting of any trust mortgage or execution of a general assignment for the benefit of the creditors of the Borrower, or the occurrence of any other voluntary or
involuntary liquidation of the Borrower; the failure by the Borrower to generally pay the debts of the Borrower as they mature; adjudication of bankruptcy or insolvency relative to the Borrower; the
entry of an order for relief or similar order with respect to the Borrower in any proceeding pursuant to Title 11 of the United States Code entitled "Bankruptcy" (hereinafter the "Bankruptcy Code") or
any other federal Bankruptcy law; the filing of any complaint, application, or petition by or against the Borrower initiating any matter in which the Borrower is or may be granted any relief from the
debts of the Borrower pursuant to the Bankruptcy Code or any other insolvency statute or procedure; the calling or sufferance, by the Borrower of a general meeting of creditors of the Borrower; the
meeting by the Borrower of a formal or informal creditors' committee; the offering by or entering into by the Borrower of any composition, extension or any other arrangement seeking relief or
extension for the debts of the Borrower, or the initiation of any other judicial or non-judicial proceeding or agreement by, against or including the Borrower which seeks or intends to
accomplish a reorganization or arrangement with creditors; provided, however, that the filing or initiation of any complaint, application, petition, agreement or other action or proceeding described
in this clause (vi) against the Borrower that is being diligently contested by the Borrower shall not constitute an Event of Default hereunder until the earlier of: (i) sixty
(60) days from the filing or initiation thereof without dismissal thereof or (ii) an order or decree is entered approving or ordering the relief sought with respect thereto. 

        (viii) The
entry of any judgment(s) against Borrower, for the payment of money exceeding $5,000,000.00 in aggregate amount, and such judgment(s) is (or are) not satisfied or
appealed from (with execution or similar process stayed) within thirty (30) days of entry. 

24

 

        (ix)  The
entry of any court order which enjoins, restrains or in any way prevents the Borrower from conducting all or any part of its business affairs in the ordinary course
of business for more than thirty (30) days, and such event of circumstance could reasonably be expected to have a Material Adverse Effect. 

        (x)   The
service of any process upon Bank seeking to attach by trustee process any funds of the Borrower in excess of Two Million Five Hundred Thousand ($2,500,000.00)
Dollars on deposit with Bank, and such attachment has not been removed, discharged or rescinded, or stayed or adequately bonded pending a good faith contest by the Borrower, within fifteen
(15) days of service. 

        (xi)  The
occurrence of any uninsured loss, theft, damage or destruction to any material asset(s) of the Borrower and such event of circumstance could reasonably be expected
to have a Material Adverse Effect. 

        (xii) Any
act by or against, or relating to the Borrower or its assets pursuant to which any creditor of the Borrower seeks to reclaim or repossess or reclaims or
repossesses all or a material portion of the Borrower's assets, which action remains unstayed from more than thirty (30) days. 

        (xiii) The
termination of existence, dissolution, or liquidation of the Borrower. 

        (xiv) This
Agreement shall, at any time after its execution and delivery and for any reason, cease to be in full force and effect or shall be declared null and void, or the
validity or enforceability hereof shall be contested by the Borrower or any guarantor of the Borrower denies it has any further liability or obligation hereunder. 

        (xv) Any
of the following events occur or exist with respect to the Borrower or any ERISA affiliate: (A) any "prohibited transaction" (as defined in
Section 406 of ERISA or Section 4975 of the Internal Revenue Code) involving any Plan; (B) any "reportable event" (as defined in Section 4043 of ERISA and the regulations
issued under such Section) shall occur with respect to any Plan; (C) the filing under Section 4041 of ERISA of a notice of intent to terminate any Plan or the termination of any Plan;
(D) any event or circumstance exists which might constitute grounds entitling the Pension Benefit Guaranty Corporation (PBGC) to institute proceedings under Section 4042 of ERISA for the
termination of, or for the appointment of a trustee to administer, any Plan, or the institution by the PBGC of any such proceedings; or (E) partial withdrawal under Section 4201 or 4204
of ERISA from a Multiemployer Plan or the reorganization, insolvency, or termination of any Multiemployer Plan; and in each case above, such event or condition, together with all other such events or
conditions, if any, would subject the Borrower to any tax, penalty, or other liability to a Plan, a Multiemployer Plan, the PBGC, or otherwise, in an aggregate amount of $5,000,000.00 or more. 

        Upon
the occurrence and during the continuation of an Event of Default, Bank may declare any obligation Bank may have hereunder to be cancelled, declare all Obligations of Borrower to be
due and payable and proceed to enforce payment of the Obligations and to exercise any and all of the rights and remedies afforded to Bank. In addition, upon the occurrence and during the continuation
of an Event of Default, if Bank proceeds to enforce payment of the Obligations, Borrower shall be obligated to deliver to Bank cash collateral in an amount equal to the aggregate amounts then undrawn
on all outstanding Letters of Credit or acceptances issued or guaranteed by Bank for the account of Borrower, and Bank may proceed to enforce payment of the same and to exercise all rights and
remedies afforded to Bank. Upon the occurrence of, and during the continuance of, an Event of Default, the Borrower, as additional compensation to the Bank for its increased credit risk, promises to
pay interest on all Obligations constituting principal, whether or not past due, past due interest and any other amounts past due under this Agreement at a per 

25

 

annum
rate of two (2%) percent greater than the rate of interest then specified in Section 1 of this Agreement. 

        (b)   Upon
the filing of any complaint, application, or petition by or against the Borrower initiating any matter in which the Borrower is or may be granted any relief from
the debts of the Borrower pursuant to the Bankruptcy Code, Bank's obligation hereunder shall be canceled immediately, automatically, and without notice, and all Obligations of the Borrower then
outstanding shall become immediately due and payable without presentation, demand, or notice of any kind to the Borrower. 

        12.    WAIVER OF JURY TRIAL. BORROWER AND BANK EACH HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE
OR HEREAFTER HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT. Borrower hereby certifies that neither Bank nor any of its
representatives, agents or counsel has represented, expressly or otherwise, that Bank would not, in the event of any such suit, action or proceeding, seek to enforce this waiver of right to trial by
jury. Borrower acknowledges that Bank has been induced to enter into this Agreement by, among other things, this waiver. Borrower acknowledges that it has read the provisions of this Agreement and in
particular, this section; has consulted legal counsel; understands the right it is granting in this Agreement and is waiving in this section in particular; and makes the above waiver knowingly,
voluntarily and intentionally. 

        13.    CONSENT TO JURISDICTION. Borrower and Bank agree that any action or proceeding to enforce or arising out of this
Agreement may be commenced in any court of the Commonwealth of Massachusetts sitting in the counties of Suffolk or Middlesex, or in the District Court of the United States for the District of
Massachusetts, and Borrower waives personal service of process and agrees that a summons and complaint commencing an action or proceeding in any such court shall be properly served and confer personal
jurisdiction if served by registered or certified mail to Borrower, or as otherwise provided by the laws of the Commonwealth of Massachusetts or the United States of America. 

14.    TERMINATION.

        (a)   Unless
renewed in writing, this Agreement shall terminate on January 14, 2006 (the "Termination Date"), and all
outstanding Obligations shall be due and payable in full without presentation, demand, or further notice of any kind, whether or not all or any part of the Obligations is otherwise due and payable
pursuant to the agreement or instrument evidencing same. Bank may terminate this Agreement immediately and without notice upon the occurrence of an Event of Default. Notwithstanding the foregoing or
anything in this Agreement or elsewhere to the contrary, the Bank's rights and remedies hereunder and Borrower's obligations and liabilities hereunder shall survive any termination of this Agreement
and shall remain in full force and effect until all of the Obligations outstanding, or contracted or committed for (whether or not outstanding), shall be finally and irrevocably paid in full. 

        (b)   In
the event that Bank continues to make loans hereunder after the Termination Date without a written extension of such Termination Date or after the occurrence of an
Event of Default, all such loans: (i) shall be made in the sole and absolute discretion of Bank; and (ii) shall, together with all other Obligations, be payable thereafter  ON DEMAND.

15.    MISCELLANEOUS.

        (a)   No
delay or omission on the part of Bank in exercising any rights shall operate as a waiver of such right or any other right. Waiver on any one occasion shall not be
construed as a bar to or waiver of any right or remedy on any future occasion. All Bank's rights and remedies, whether evidenced 

26

 

hereby
or by any other agreement, instrument or paper, shall be cumulative and may be exercised singularly or concurrently. 

        (b)   Bank
is authorized to make loans under the terms of this Agreement upon the request, either written or oral, in the name of Borrower or any authorized person whose name
appears at the end of this Agreement or of any of the following named person, or persons, from time to time, holding the following offices of Borrower, Chief Executive Officer, President, Chief
Financial Officer, Treasurer, Vice President—Finance, Controller and such other officers and authorized signatories as may from time to time be set forth in separate resolutions. Any
request for a loan which is not accompanied by a Notice of Borrowing shall be deemed a request for a Prime Rate Loan. 

        (c)   This
Agreement shall bind and inure to the benefit of the respective successors and assigns of each of the parties hereto;  provided, however, that Borrower may
not assign this Agreement or any rights or duties hereunder without
Bank's prior written consent and any prohibited assignment shall be absolutely void. No consent to an assignment by Bank shall release Borrower from its Obligations. Bank may assign this Agreement and
its rights and duties hereunder only with Borrower's prior written consent while an Event of Default does not exist, which consent shall not be unreasonably withheld, conditioned, or delayed, and
without consent of Borrower while an Event of Default exists. Bank reserves the right to grant participations in all or any part of, or any interest in Bank's rights and benefits hereunder without
Borrower's consent. If Bank grants any such participation, Bank shall remain responsible for the performance of its obligations hereunder, and Borrower shall continue to deal solely and directly with
Bank in connection with Banks rights and obligations under this Agreement. In connection with any assignment or participation, Bank may disclose all documents and information which Bank now or
hereafter may have relating to Borrower or Borrower's business, provided that the assignee or participant shall have agreed in writing with Borrower to maintain the confidentiality of information
relating to Borrower and its subsidiaries on terms substantially equivalent to the provisions of Section 16 hereof. To the extent that Bank assigns its rights and obligations hereunder to
another party, Bank thereafter shall be released from such assigned obligations to Borrower and such assignment shall effect a novation between Borrower and such other party. 

        (d)   Borrower
agrees that any and all loans made by Bank to Borrower or for its account under this Agreement shall be conclusively deemed to have been authorized by Borrower
and to have been made pursuant to duly authorized requests therefor on its behalf. 

        (e)   Unless
otherwise defined in this Agreement, capitalized words shall have the meanings set forth in the Uniform Commercial Code as in effect in the Commonwealth of
Massachusetts as of the date of this Agreement. 

        (f)    Paragraph
and section headings used in this Agreement are for convenience only, and shall not effect the construction of this Agreement. If one or more provisions of
this Agreement (or the application thereof) shall be invalid, illegal or unenforceable in any respect in any jurisdiction, the same shall not, invalidate or render illegal or unenforceable such
provision (or its application) in any other jurisdiction or any other provision of this Agreement (or its application). This Agreement is the entire agreement of the parties with respect to the
subject matter hereof and supersedes any prior written or verbal communications or instruments relating thereto. 

        (g)   Unless
otherwise provided in this Agreement, all notices or demands by any party relating to this Agreement or any other loan document shall be in writing and (except
for financial statements and other informational documents which may be sent by first-class mail, postage prepaid) shall be personally delivered or sent by registered or certified mail (postage
prepaid, return receipt requested), 

27

 

overnight
courier, or telefacsimile to Borrower or to Bank, as the case may be, at its address set forth below: 

	If to Bank:	 	Citizens Bank of Massachusetts

28 State Street

Boston, Massachusetts 02109

Attn: Mr. Michael G. McAuliffe

            Senior Vice President

Telephone:    (617) 994-7158

Telecopier:    (617) 723-9431
	

With a copy to:	
 	

Goulston & Storrs, P.C.

400 Atlantic Avenue

Boston, Massachusetts 02110

Attn: James H. Lerner, Esquire

Telephone:    (617) 574-3525

Telecopier:    (617) 574-7607
	

If to Borrower:	
 	

Charles River Associates Incorporated

John Hancock Tower

200 Clarendon Street, T-33

Boston, Massachusetts 02119-5092

Attn: Mr. J. Phillip Cooper

            Executive Vice President,

            Chief Financial Officer

Telephone:    (617) 425-3000

Telecopier:    (617) 425-3132
	

 	
 	

and
	

 	
 	

Attn: Mr. James Spelfogel

            Vice President—Finance

Telephone:    (617) 425-3000

Telecopier:    (617) 425-3148
	

With a copy to:	
 	

Foley Hoag LLP

155 Seaport Boulevard

Boston, Massachusetts 02210

Attn: Peter M. Rosenblum, Esquire

Telephone:    (617) 832-1151

Telecopier:    (617) 832-7000

        The
parties hereto may change the address at which they are to receive notices hereunder, by notice in writing in the foregoing manner given to the other. All notices or demand sent in
accordance with this section shall be deemed received on the earlier of the date of actual receipt or three (3) days after the deposit thereof in the mail. 

        (h)   Bank
shall have no obligation to maintain any electronic records or any documents, schedules, invoices, agings or any other paper delivered to Bank by Borrower in
connection with this Agreement or any other agreement for more than four (4) months after receipt of the same by Bank. 

        (i)    No
uncertainty or ambiguity in this Agreement shall be construed or resolved against Bank or Borrower, whether under any rule of construction or otherwise. On the
contrary, this Agreement has been reviewed by all parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to fairly accomplish the purposes and
intentions of all parties hereto. 

28

 

        (j)    Each
provision of this Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific
provision. 

        (k)   This
Agreement, together with the other documents and instruments executed concurrently herewith represent the entire and final understanding of the parties with respect
to the transactions contemplated hereby and shall not be contradicted or qualified by evidence of any prior, contemporaneous or subsequent other agreement, oral or written, before the date hereof. 

        (l)    This
Agreement can only be amended by a writing signed by both Bank and Borrower. 

        (m)  The
laws of Massachusetts shall govern the construction of this Agreement and the rights and duties of the parties hereto. This Agreement shall take effect as a sealed
instrument. 

	16.
	CONFIDENTIALITY. Bank agrees to keep any information delivered or made available by the Borrower or any of its affiliates pursuant to
or in connection with this Agreement confidential from anyone other than persons employed or retained by Bank (including legal counsel) who are engaged in evaluating, approving, structuring or
administering the credit facility contemplated hereby; provided that nothing herein shall prevent Bank from disclosing such information (a) upon the order of any court or administrative agency,
(b) upon the request or demand of any regulatory agency or authority, (c) which had been publicly disclosed other than as a result of a disclosure by Bank prohibited by this Agreement,
(d) in connection with any litigation to which Bank or its subsidiaries or parent may be a party, (e) to the extent necessary in connection with the exercise of any remedy hereunder,
(f) to its independent auditors and (g) to any actual or proposed assignee or participant of Bank under Section 15(c) that has agreed in writing with Borrower to maintain the
confidentiality of such information on terms substantially equivalent to those contained in this Section. 

        [Remainder
of Page Intentionally Left Blank] 

29

 

	

 	
 	

 	

 
	

Witnessed by:	
 	

CHARLES RIVER ASSOCIATES INCORPORATED
	

/s/ James Spelfogel
	
 	

By:	

/s/ J. Phillip Cooper

	

 	
 	

Name:	

J. Phillip Cooper

	

 	
 	

Title:	

EVP, CFO

	

 	
 	

Address:	

John Hancock Tower

200 Clarendon Street, T-33

Boston, Massachusetts 02116-5092
	

 	
 	

CITIZENS BANK OF MASSACHUSETTS
	

 	
 	

By:	

/s/ Michael G. McAuliffe
 Michael G. McAuliffe, Senior Vice President
	

 	
 	

Address:	

28 State Street

Boston, Massachusetts 02109

30

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