Document:

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                           SWITCHBOARD INCORPORATED

                                   AMENDMENT

                                       TO

                           1999 STOCK INCENTIVE PLAN

     The 1999 Stock Incentive Plan, as amended (the "Plan"), of Switchboard
Incorporated, a Delaware corporation, is hereby amended as follows:

     1.  Section 8(c)(2) of the Plan is amended and restated as set forth below:

          (2) Consequences of Acquisition Event on Options. Upon the occurrence
     of an Acquisition Event, or the execution by the Company of any agreement
     with respect to an Acquisition Event, the Board shall provide that all
     outstanding Options shall be assumed, or equivalent options shall be
     substituted, by the acquiring or succeeding corporation (or an affiliate
     thereof). For purposes hereof, an Option shall be considered to be assumed
     if, following consummation of the Acquisition Event, the Option confers the
     right to purchase, for each share of Common Stock subject to the Option
     immediately prior to the consummation of the Acquisition Event, the
     consideration (whether cash, securities or other property) received as a
     result of the Acquisition Event by holders of Common Stock for each share
     of Common Stock held immediately prior to the consummation of the
     Acquisition Event (and if holders were offered a choice of consideration,
     the type of consideration chosen by the holders of a majority of the
     outstanding shares of Common Stock); provided, however, that if the
     consideration received as a result of the Acquisition Event is not solely
     common stock of the acquiring or succeeding corporation (or an affiliate
     thereof), the Company may, with the consent of the acquiring or succeeding
     corporation, provide for the consideration to be received upon the exercise
     of Options to consist solely of common stock of the acquiring or succeeding
     corporation (or an affiliate thereof) equivalent in Fair Market Value to
     the per share consideration received by holders of outstanding shares of
     Common Stock as a result of the Acquisition Event.

          Notwithstanding the foregoing, if the acquiring or succeeding
     corporation (or an affiliate thereof) does not agree to assume, or
     substitute for, such Options, then the Board shall, upon written notice to
     the Participants, provide that all then outstanding Options will become
     exercisable in full as of a specified time prior to the Acquisition Event
     and will terminate immediately prior to the consummation of such
     Acquisition Event, except to the extent exercised by the Participants
     before the consummation of such Acquisition Event; provided, however, that
     in the event of an Acquisition Event under the terms of which holders of
     Common Stock will receive upon consummation thereof a cash payment for each
     share of Common Stock surrendered pursuant to such Acquisition Event (the
     "Acquisition Price"), then the Board may instead provide that all
     outstanding

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     Options shall terminate upon consummation of such Acquisition Event and
     that each Participant shall receive, in exchange therefor, a cash payment
     equal to the amount (if any) by which (A) the Acquisition Price multiplied
     by the number of shares of Common Stock with respect to which such
     outstanding Options are then exercisable, exceeds (B) the aggregate
     exercise price of such Options. To the extent all or any portion of an
     Option becomes exercisable solely as a result of the first sentence of this
     paragraph, upon exercise of such Option the Participant shall receive
     shares subject to a right of repurchase by the Company or its successor at
     the Option exercise price. Such repurchase right (1) shall not apply to (y)
     any shares subject to the Option that were exercisable under its terms
     without regard to the first sentence of this paragraph and (z) up to an
     additional 25% of the shares (applied pro rata over all vesting periods
     accelerated pursuant to the first sentence of this paragraph) subject to
     the Option that were not exercisable under its terms without regard to the
     first sentence of this paragraph and (2) shall lapse at the same rate as
     the Option would have become exercisable under its terms (with respect to
     the shares that are subject to the repurchase right).

          If any Option provides that it may be exercised for shares of Common
     Stock which remain subject to a repurchase right in favor of the company,
     upon the occurrence of an Acquisition Event, any shares of restricted stock
     received upon exercise of such Option shall be treated in accordance with
     Section 8(c)(3) as if they were a Restricted Stock Award.

     2.  Section 9(e) of the Plan is hereby amended and restated as set forth
     below:

          (e) Each Participant shall pay to the Company, or make provision
     satisfactory to the Board for payment of, any taxes required by law to be
     withheld in connection with Awards to such Participant no later than the
     date of the event creating the tax liability. Except as the Board may
     otherwise provide in an Award, when the Common Stock is registered under
     the Exchange Act, Participants may satisfy such tax obligations in whole or
     in part by delivery of shares of Common Stock, including shares retained
     from the Award creating the tax obligation, valued at their Fair Market
     Value, such that the total tax withholding cannot exceed the Company's
     minimum statutory withholding (based on minimum statutory withholding rates
     for federal and state tax purposes, including payroll taxes, that are
     applicable to such supplemental taxable income). The Company may, to the
     extent permitted by law, deduct any such tax obligations from any payment
     of any kind otherwise due to a Participant.

     Except to the extent amended hereby, the Plan is in all respects hereby
ratified and confirmed and shall continue in full force and effect.

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                                                                   EXHIBIT 10.24

                          LOAN AND SECURITY AGREEMENT

     This LOAN AND SECURITY AGREEMENT is entered into as of May 14, 1999, by and
between SILICON VALLEY BANK, a California-chartered bank, with its principal
place of business at 3003 Tasman Drive, Santa Clara, California 95054 and with a
loan production office located at Wellesley Office Park, 40 William Street,
Suite 350, Wellesley, Massachusetts 02481, doing business under the name
"Silicon Valley East" ("Bank") and NATURAL MICROSYSTEMS CORPORATION, a Delaware
corporation with its chief executive office located at 100 Crossing Boulevard,
Framingham, Massachusetts ("Borrower").

                                    RECITALS
                                    --------

     Borrower wishes to obtain credit from time to time from Bank, and Bank
desires to extend credit to Borrower.  This Agreement sets forth the terms on
which Bank will advance credit to Borrower, and Borrower will repay the amounts
owing to Bank.

                                   AGREEMENT
                                   ---------

     The parties agree as follows:

1.   DEFINITIONS AND CONSTRUCTION

     1.1   Definitions.  As used in this Agreement, the following terms shall
have the following definitions:

           "Accounts" means all presently existing and hereafter arising
     accounts, contract rights, and all other forms of obligations owing to
     Borrower arising out of the sale or lease of goods (including, without
     limitation, the licensing of software and other technology) or the
     rendering of services by Borrower, whether or not earned by performance,
     and any and all credit insurance, guaranties, and other security therefor,
     as well as all merchandise returned to or reclaimed by Borrower and
     Borrower's Books relating to any of the foregoing.

           "Advance" or "Advances" means a loan advance under the Committed
     Revolving Line.

           "Affiliate" means, with respect to any Person, any Person that owns
     or controls directly or indirectly such Person, any Person that controls or
     is controlled by or is under common control with such Person, and each of
     such Person's senior executive officers, directors, partners and, for any
     Person that is a limited liability company, such Person's managers and
     members.

           "Agreement" means this Loan and Security Agreement.

           "Bank Expenses" means all reasonable costs or expenses (including
     reasonable attorneys' fees and expenses) incurred in connection with the
     preparation, negotiation, administration, and enforcement of the Loan
     Documents; and Bank's reasonable attorneys' fees and expenses incurred in
     amending, enforcing or defending the Loan Documents, (including fees and
     expenses of appeal or review, or those incurred in any Insolvency
     Proceeding) whether or not suit is brought.

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          "Borrower's Books" means all of Borrower's books and records
     including, without limitation:  ledgers; records concerning Borrower's
     assets or liabilities, the Collateral, business operations or financial
     condition; and all computer programs, or tape files, and the equipment,
     containing such information.

          "Borrowing Base" means an amount equal to seventy-five percent (75.0%)
     of Eligible Accounts, as determined by Bank with reference to the most
     recent Borrowing Base Certificate delivered by Borrower.

          "Business Day" means any day that is not a Saturday, Sunday, or other
     day on which banks in the States of California or Massachusetts are
     authorized or required to close.

          "Closing Date" means the date of this Agreement.

          "Code" means the Massachusetts Uniform Commercial Code.

          "Collateral" means the property described on Exhibit A attached
     hereto.

          "Committed Revolving Line" means a credit extension of up to Seven
     Million Five Hundred Thousand Dollars ($7,500,000.00).

          "Contingent Obligation" means, as applied to any Person, any direct or
     indirect liability, contingent or otherwise, of that Person with respect to
     (i) any indebtedness, lease, dividend, letter of credit or other obligation
     of another, including, without limitation, any such obligation directly or
     indirectly guaranteed, endorsed, co-made or discounted or sold with
     recourse by that Person, or in respect of which that Person is otherwise
     directly or indirectly liable; (ii) any obligations with respect to undrawn
     letters of credit issued for the account of that Person; and (iii) all
     obligations arising under any interest rate, currency or commodity swap
     agreement, interest rate cap agreement, interest rate collar agreement, or
     other agreement or arrangement designated to protect a Person against
     fluctuation in interest rates, currency exchange rates or commodity prices;
     provided, however, that the term "Contingent Obligation" shall not include
     endorsements for collection or deposit in the ordinary course of business.
     The amount of any Contingent Obligation shall be deemed to be an amount
     equal to the stated or determined amount of the primary obligation in
     respect of which such Contingent Obligation is made or, if not stated or
     determinable, the maximum reasonably anticipated liability in respect
     thereof as determined by such Person in good faith; provided, however, that
     such amount shall not in any event exceed the maximum amount of the
     obligations under the guarantee or other support arrangement.

          "Credit Extension" means each Advance, or any other extension of
     credit by Bank for the benefit of Borrower hereunder.

          "Current Liabilities" means, as of any applicable date, all amounts
     that should, in accordance with GAAP, be included as current liabilities on
     the consolidated balance sheet of Borrower and its Subsidiaries, as at such
     date, plus, to the extent not already included therein, all outstanding
     Credit Extensions made under this Agreement, including all Indebtedness
     that is payable upon demand or within one year from the date of
     determination thereof unless such Indebtedness is renewable or extendable
     at the option of Borrower or any Subsidiary to a date more than one year
     from the date of determination, but excluding Subordinated Debt.

          "Eligible Accounts" means those Accounts that arise in the ordinary
     course of Borrower's business that comply with all of Borrower's
     representations and warranties to Bank set forth in Section 5.4; provided,
     that standards of eligibility may be fixed and revised from time to time by
     Bank in Bank's reasonable judgment and upon notification thereof to
     Borrower in accordance with the provisions hereof.  Unless otherwise agreed
     to by Bank in writing, Eligible Accounts shall not include the following:

               (a) Accounts that the account debtor has failed to pay within
          ninety (90) days of invoice date;

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               (b) Accounts with respect to an account debtor, fifty percent
          (50%) or more of whose Accounts the account debtor has failed to pay
          within ninety (90) days of invoice date;

               (c) Accounts with respect to an account debtor, including
          Affiliates, whose total obligations to Borrower exceed twenty-five
          percent (25%) of all Accounts, to the extent such obligations exceed
          the aforementioned percentage, except as approved in writing by Bank;

               (d) Accounts with respect to which the account debtor does not
          have its principal place of business in the United States;

               (e) Accounts with respect to which the account debtor is a
          federal, state, or local governmental entity or any department,
          agency, or instrumentality thereof, except for those Accounts of the
          United States or any department, agency or instrumentality thereof as
          to which the payee has assigned its rights to payment thereof to Bank
          and the assignment has been acknowledged, pursuant to the Assignment
          of Claims Act of 1940, as amended (31 U.S.C. 3727);

               (f) Accounts with respect to which Borrower is liable to the
          account debtor for goods sold or services rendered by the account
          debtor to Borrower, but only to the extent of any amounts owing to the
          account debtor (sometimes referred to as "contra" accounts, e.g.
          accounts payable, customer deposits, credit accounts etc.) against
          amounts owed to Borrower;

               (g) Accounts generated by demonstration or promotional equipment,
          or with respect to which goods are placed on consignment, guaranteed
          sale, sale or return, sale on approval, bill and hold, or other terms
          by reason of which the payment by the account debtor may be
          conditional;

               (h) Accounts with respect to which the account debtor is an
          Affiliate, officer, employee, or agent of Borrower;

               (i) Accounts with respect to which the account debtor disputes
          liability or makes any claim with respect thereto as to which Bank
          believes, in its sole discretion, that there may be a basis for
          dispute (but only to the extent of the amount subject to such dispute
          or claim), or is subject to any Insolvency Proceeding, or becomes
          insolvent, or goes out of business; and

               (j) Accounts the collection of which Bank reasonably determines
          after reasonable inquiry and reasonable consultation with Borrower to
          be doubtful by reason of the account debtor's financial condition.

          "Equipment" means all present and future machinery, equipment, tenant
     improvements, furniture, fixtures, vehicles, tools, parts and attachments
     in which Borrower has any interest.

          "ERISA" means the Employee Retirement Income Security Act of 1974, as
     amended, and the regulations thereunder.

          "GAAP" means generally accepted accounting principles as in effect in
     the United States from time to time.

          "Guarantor" means any present or future guarantor of the Obligations,
     including, without limitation, Natural MicroSystems Securities Corporation.

                                      -3-
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          "Indebtedness" means (a) all indebtedness for borrowed money or the
     deferred purchase price of property or services, including without
     limitation reimbursement and other obligations with respect to surety bonds
     and letters of credit, (b) all obligations evidenced by notes, bonds,
     debentures or similar instruments, (c) all capital lease obligations and
     (d) all Contingent Obligations.

          "Insolvency Proceeding" means any proceeding commenced by or against
     any person or entity under any provision of the United States Bankruptcy
     Code, as amended, or under any other bankruptcy or insolvency law,
     including assignments for the benefit of creditors, formal or informal
     moratoria, compositions, extension generally with its creditors, or
     proceedings seeking reorganization, arrangement, or other relief.

          "Inventory" means all present and future inventory in which Borrower
     has any interest, including merchandise, raw materials, parts, supplies,
     packing and shipping materials, work in process and finished products
     intended for sale or lease or to be furnished under a contract of service,
     of every kind and description now or at any time hereafter owned by or in
     the custody or possession, actual or constructive, of Borrower, including
     such inventory as is temporarily out of its custody or possession or in
     transit and including any returns upon any accounts or other proceeds,
     including insurance proceeds, resulting from the sale or disposition of any
     of the foregoing and any documents of title representing any of the above.

          "Investment" means any beneficial ownership of (including stock,
     partnership interest or other securities) any Person, or any loan, advance
     or capital contribution to any Person.

          "IRC" means the Internal Revenue Code of 1986, as amended, and the
     regulations thereunder.

          "Lien" means any mortgage, lien, deed of trust, charge, pledge,
     security interest or other encumbrance.

          "Loan Documents" means, collectively, this Agreement, any note or
     notes executed by Borrower, and any other present or future agreement
     entered into between Borrower and/or for the benefit of Bank in connection
     with this Agreement, all as amended, extended or restated from time to
     time.

          "Material Adverse Effect" means a material adverse effect on (i) the
     business operations or condition (financial or otherwise) of Borrower and
     its Subsidiaries taken as a whole or (ii) the ability of Borrower to repay
     the Obligations or otherwise perform its obligations under the Loan
     Documents.

          "Maturity Date" means one day prior to one year from the Closing Date.

          "Negotiable Collateral" means all of Borrower's present and future
     letters of credit of which it is a beneficiary, and any notes, drafts,
     instruments, securities, documents of title, or chattel paper, owned by or
     payable to Borrower.

          "Obligations" means all debt, principal, interest, Bank Expenses and
     other amounts owed to Bank by Borrower pursuant to this Agreement or any
     other agreement, whether absolute or contingent, due or to become due, now
     existing or hereafter arising, including any interest that accrues after
     the commencement of an Insolvency Proceeding and including any debt,
     liability, or obligation owing from Borrower to others that Bank may have
     obtained by assignment or otherwise.

          "Other Assets" means any asset represented by shares of stock in
     another Person, including, without limitation, in the Borrower's
     Subsidiaries or Affiliates, or any instrument evidencing any indebtedness
     owing by any Person to the Borrower (other than trade payables to the
     Borrower).

          "Payment Date" means the first calendar day of each month commencing
     on the first such date after the Closing Date and ending on the Maturity
     Date.

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          "Permitted Indebtedness" means:

               (a) Indebtedness of Borrower in favor of Bank arising under this
          Agreement or any other Loan Document;

               (b) Indebtedness existing on the Closing Date and disclosed in
          the Schedule;

               (c)  Subordinated Debt;

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

               (e) Indebtedness secured by Permitted Liens.

          "Permitted Investment" means:

               (a) Investments existing on the Closing Date disclosed in the
          Schedule; and

               (b)  (i)  marketable direct obligations issued or unconditionally
          guaranteed by the United States of America or any agency or any State
          thereof maturing within one (1) year from the date of acquisition
          thereof, (ii) commercial paper maturing no more than one (1) year from
          the date of creation thereof and currently having the highest rating
          obtainable from either Standard & Poor's Corporation or Moody's
          Investors Service, Inc., and (iii) certificates of deposit maturing no
          more than one (1) year from the date of investment therein issued by
          Bank.

          "Permitted Liens" means the following:

               (a) Any Liens existing on the Closing Date and disclosed in the
          Schedule or arising under this Agreement or the other Loan Documents;

               (b) Liens for taxes, fees, assessments or other governmental
          charges or levies, either not delinquent or being contested in good
          faith by appropriate proceedings and as to which adequate reserves are
          maintained on Borrower's Books in accordance with GAAP, provided the
          same have no priority over any of Bank's security interests;

               (c) Liens (i) upon or in any Equipment acquired or held by
          Borrower or any of its Subsidiaries to secure the purchase price of
          such Equipment or indebtedness incurred solely for the purpose of
          financing the acquisition of such Equipment, or (ii) existing on such
          Equipment at the time of its acquisition, provided that the Lien is
          confined solely to the property so acquired and improvements thereon,
          and the proceeds of such Equipment;

               (d) Leases or subleases and licenses or sublicenses granted to
          others in the ordinary course of Borrower's business not interfering
          in any material respect with the business of Borrower and its
          Subsidiaries taken as a whole, and any interest or title of a lessor,
          licensor, sublicensor or under any lease or license or sublicense
          provided that such leases, subleases, licenses and sublicenses do not
          prohibit the grant of the security interest granted hereunder; and

               (e) Liens incurred in connection with the extension, renewal or
          refinancing of the indebtedness secured by Liens of the type described
          in clauses (a) through (c) above, provided that any extension, renewal
          or replacement Lien shall be limited to the property encumbered by the
          existing Lien and the principal amount of the indebtedness being
          extended, renewed or refinanced does not increase.

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          "Person" means any individual, sole proprietorship, partnership,
     limited liability company, joint venture, trust, unincorporated
     organization, association, corporation, institution, public benefit
     corporation, firm, joint stock company, estate, entity or governmental
     agency.

          "Prime Rate" means the variable rate of interest, per annum, most
     recently announced by Bank, as its "prime rate," whether or not such
     announced rate is the lowest rate available from Bank.

          "Quick Assets" means, as of any applicable date, the consolidated
     cash, cash equivalents, accounts receivable and investments with maturities
     of fewer than 90 days of Borrower determined in accordance with GAAP.

          "Responsible Officer" means each of the Chief Executive Officer, the
     President, the Chief Financial Officer and the Controller of Borrower.

          "Schedule" means the schedule of exceptions attached hereto, if any.

          "Subordinated Debt" means any debt incurred by Borrower that is
     subordinated to the debt owing by Borrower to Bank on terms acceptable to
     Bank (and identified as being such by Borrower and Bank).

          "Subsidiary" means with respect to any Person, corporation,
     partnership, company association, joint venture, or any other business
     entity of which more than fifty percent (50%) of the voting stock or other
     equity interests is owned or controlled, directly or indirectly, by such
     Person or one or more Affiliates of such Person.

          "Tangible Net Worth" means as of any applicable date, the consolidated
     total assets of Borrower and its Subsidiaries minus, without duplication,
     (i) the sum of any amounts attributable to (a) goodwill, (b) intangible
     items such as unamortized debt discount and expense, patents, trade and
     service marks and names, copyrights and research and development expenses
     except prepaid expenses, and (c) all reserves not already deducted from
     assets, and (ii) Total Liabilities; and (iii) Other Assets.

          "Total Liabilities" means as of any applicable date, all obligations
     that should, in accordance with GAAP be classified as liabilities on the
     consolidated balance sheet of Borrower, including in any event all
     Indebtedness, but specifically excluding Subordinated Debt.

          "Unused Committed Revolving Line Facility Fee" is defined in Section
     2.5(a).

     1.2  Accounting and Other Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP and all calculations
and determinations made hereunder shall be made in accordance with GAAP. When
used herein, the term "financial statements" shall include the notes and
schedules thereto. The terms "including" or "includes" shall always be read as
meaning "including (or includes) without limitation", when used herein or in any
other Loan Document.

2.   LOAN AND TERMS OF PAYMENT

     2.1  Credit Extensions. Borrower promises to pay to the order of Bank, in
lawful money of the United States of America, the aggregate unpaid principal
amount of all Credit Extensions made by Bank to Borrower hereunder. Borrower
shall also pay interest on the unpaid principal amount of such Credit Extensions
at rates in accordance with the terms hereof.

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     2.1.1  (a)  Subject to and upon the terms and conditions of this Agreement,
Bank agrees to make Advances to Borrower in an aggregate outstanding amount not
to exceed the Committed Revolving Line or the Borrowing Base, whichever is less.
Subject to the terms and conditions of this Agreement, amounts borrowed pursuant
to this Section 2.1 may be repaid and reborrowed at any time during the term of
this Agreement.

          (b) Whenever Borrower desires an Advance, Borrower will notify Bank by
     facsimile transmission or telephone no later than 3:00 p.m. Eastern time,
     on the Business Day that the Advance is to be made. Each such notification
     shall be promptly confirmed by a Payment/Advance Form in substantially the
     form of Exhibit B hereto. Bank is authorized to make Advances under this
     Agreement, based upon instructions received from a Responsible Officer or a
     designee of a Responsible Officer, or without instructions if in Bank's
     discretion such Advances are necessary to meet Obligations which have
     become due and remain unpaid. Bank shall be entitled to rely on any
     telephonic notice given by a person who Bank reasonably believes to be a
     Responsible Officer or a designee thereof, and Borrower shall indemnify and
     hold Bank harmless for any damages or loss suffered by Bank as a result of
     such reliance. Bank will credit the amount of Advances made under this
     Section 2.1 to Borrower's deposit account.

          (c) The Committed Revolving Line shall terminate on the Maturity Date,
     at which time all Advances under this Section 2.1 and other amounts due
     under this Agreement (except as otherwise expressly specified herein) shall
     be immediately due and payable.

     2.2  Overadvances.  If, at any time or for any reason, the amount of
Obligations owed by Borrower to Bank pursuant to Section 2.1.1 of this Agreement
is greater than the lesser of (i) the Committed Revolving Line or (ii) the
Borrowing Base, Borrower shall immediately pay to Bank, in cash, the amount of
such excess.

     2.3  Interest Rates, Payments, and Calculations.

          (a)  Interest Rate. Except as set forth in Section 2.3(b), any
     Advances shall bear interest, on the average daily balance thereof, at a
     per annum rate equal to the aggregate of the Bank's Prime Rate plus one
     percent (1.0%) per annum.

          (b)  Default Rate.  All Obligations shall bear interest, from and
     after the occurrence of an Event of Default, at a rate equal to five (5)
     percentage points above the interest rate applicable immediately prior to
     the occurrence of the Event of Default.

          (c)  Payments.  Interest hereunder shall be due and payable on each
     Payment Date. Borrower hereby authorizes Bank to debit any accounts with
     Bank, including, without limitation, Account Number _____________________
     for payments of principal and interest due on the Obligations and any other
     amounts owing by Borrower to Bank. Bank will notify Borrower of all debits
     which Bank has made against Borrower's accounts. Any such debits against
     Borrower's accounts in no way shall be deemed a set-off. Any interest not
     paid when due shall be compounded by becoming a part of the Obligations,
     and such interest shall thereafter accrue interest at the rate then
     applicable hereunder.

          (d)  Computation.  In the event the Prime Rate is changed from time to
     time hereafter, the applicable rate of interest hereunder shall be
     increased or decreased effective as of 12:01 a.m. on the day the Prime Rate
     is changed, by an amount equal to such change in the Prime Rate. All
     interest chargeable under the Loan Documents shall be computed on the basis
     of a three hundred sixty (360) day year for the actual number of days
     elapsed.

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     2.4  Crediting Payments.  Prior to the occurrence of an Event of Default,
Bank shall credit a wire transfer of funds, check or other item of payment to
such deposit account or Obligation as Borrower specifies. After the occurrence
of an Event of Default, the receipt by Bank of any wire transfer of funds,
check, or other item of payment, whether directed to Borrower's deposit account
with Bank or to the Obligations or otherwise, shall be immediately applied to
conditionally reduce Obligations, but shall not be considered a payment in
respect of the Obligations unless such payment is of immediately available
federal funds or unless and until such check or other item of payment is honored
when presented for payment. Notwithstanding anything to the contrary contained
herein, any wire transfer or payment received by Bank after 12:00 noon Eastern
time shall be deemed to have been received by Bank as of the opening of business
on the immediately following Business Day. Whenever any payment to Bank under
the Loan Documents would otherwise be due (except by reason of acceleration) on
a date that is not a Business Day, such payment shall instead be due on the next
Business Day, and additional fees or interest, as the case may be, shall accrue
and be payable for the period of such extension.

     2.5  Fees.  Borrower shall pay to Bank the following:

          (a)  Facility Fees.  (1) A Facility Fee equal to Thirty-Seven Thousand
     Five Hundred Dollars ($37,500.00), which fee shall be due on the Closing
     Date and shall be fully earned and non-refundable; and

               (2) In addition to the foregoing, as compensation for the Bank's
     maintenance of sufficient funds available for such purpose, the Bank shall
     have earned a Unused Committed Revolving Line Facility Fee (so referred to
     herein), which fee shall be paid quarterly, in arrears, on a calendar year
     basis, in an amount equal to One Quarter of One percent (0.25%) of the
     average unused portion of the Committed Revolving Line, as determined by
     the Bank. The Borrower shall not be entitled to any credit, rebate or
     repayment of any Facility Fee previously earned by the Bank pursuant to
     this Section notwithstanding any termination of the within Agreement, or
     suspension or termination of the Bank's obligation to make loans and
     advances hereunder;

          (b)  Financial Examination and Appraisal Fees. Bank's customary fees
     and out-of-pocket expenses for Bank's audits of Borrower's Accounts, and
     for each appraisal of Collateral and financial analysis and examination of
     Borrower performed from time to time by Bank or its agents;

          (c)  Bank Expenses. Upon demand from Bank, including, without
     limitation, upon the date hereof, all Bank Expenses incurred through the
     date hereof, including reasonable attorneys' fees and expenses, and, after
     the date hereof, all Bank Expenses, including reasonable attorneys' fees
     and expenses, as and when they become due.

     2.6  Additional Costs.  In case any law, regulation, treaty or official
directive or the interpretation or application thereof by any court or any
governmental authority charged with the administration thereof or the compliance
with any guideline or request of any central bank or other governmental
authority (whether or not having the force of law):

          (a)  subjects Bank to any tax with respect to payments of principal or
     interest or any other amounts payable hereunder by Borrower or otherwise
     with respect to the transactions contemplated hereby (except for taxes on
     the overall net income of Bank imposed by the United States of America or
     any political subdivision thereof);

          (b)  imposes, modifies or deems applicable any deposit insurance,
     reserve, special deposit or similar requirement against assets held by, or
     deposits in or for the account of, or loans by, Bank; or

          (c)  imposes upon Bank any other condition with respect to its
     performance under this Agreement,

and the result of any of the foregoing is to increase the cost to Bank, reduce
the income receivable by Bank or impose any expense upon Bank with respect to
any loans, Bank shall notify Borrower thereof. Borrower agrees to pay to Bank
the amount of such increase in cost, reduction in income or additional expense
as and when such cost, reduction or expense is incurred or determined, upon
presentation by Bank of a statement of the amount and setting forth Bank's
calculation thereof, all in reasonable detail, which statement shall be deemed
true and correct absent manifest error.

                                      -8-
<PAGE>

     2.7  Term.  Except as otherwise set forth herein, this Agreement shall
become effective on the Closing Date and, subject to Section 12.7, shall
continue in full force and effect for a term ending on the Maturity Date.
Notwithstanding the foregoing, Bank shall have the right to terminate its
obligation to make Credit Extensions under this Agreement immediately and
without notice upon the occurrence and during the continuance of an Event of
Default. Notwithstanding termination of this Agreement, Bank's lien on the
Collateral shall remain in effect for so long as any Obligations are
outstanding.

3.   CONDITIONS OF LOANS

     3.1  Conditions Precedent to Initial Credit Extension. The obligation of
Bank to make the initial Credit Extension is subject to the condition precedent
that Bank shall have received, in form and substance satisfactory to Bank, the
following:

          (a)  this Agreement;

          (b)  a certificate of the Secretary of Borrower with respect to
     articles, bylaws, incumbency and resolutions authorizing the execution and
     delivery of this Agreement;

          (c)  a negative pledge agreement covering intellectual property;

          (d)  an opinion of Borrower's counsel;

          (e)  guaranty and security agreement by the Guarantor;

          (f)  financing statements (Forms UCC-1);

          (g)  insurance certificate;

          (h)  payment of the fees and Bank Expenses then due specified in
     Section 2.5 hereof;

          (i)  Certificates of Good Standing and Foreign Qualification (if
     applicable); and

          (j)  such other documents, and completion of such other matters, as
     Bank may reasonably deem necessary or appropriate.

     3.2  Conditions Precedent to all Credit Extensions. The obligation of Bank
to make each Credit Extension, including the initial Credit Extension, is
further subject to the following conditions:

          (a)  timely receipt by Bank of the Payment/Advance Form as provided in
     Section 2.1; and

          (b)  the representations and warranties contained in Section 5 shall
     be true and correct in all material respects on and as of the date of such
     Payment/Advance Form and on the effective date of each Credit Extension as
     though made at and as of each such date, and no Event of Default shall have
     occurred and be continuing, or would result from such Credit Extension. The
     making of each Credit Extension shall be deemed to be a representation and
     warranty by Borrower on the date of such Credit Extension as to the
     accuracy of the facts referred to in this Section 3.2(b).

                                      -9-
<PAGE>

4.   CREATION OF SECURITY INTEREST

     4.1  Grant of Security Interest. Borrower grants and pledges to Bank a
continuing security interest in all presently existing and hereafter acquired or
arising Collateral in order to secure prompt payment of any and all Obligations
and in order to secure prompt performance by Borrower of each of its covenants
and duties under the Loan Documents. Except as set forth in the Schedule, such
security interest constitutes a valid, first priority security interest in the
presently existing Collateral, and will constitute a valid, first priority
security interest in Collateral acquired after the date hereof. Borrower
acknowledges that Bank may place a "hold" on any Deposit Account pledged as
Collateral to secure the Obligations. Notwithstanding termination of this
Agreement, Bank's Lien on the Collateral shall remain in effect for so long as
any Obligations are outstanding.

     4.2  Delivery of Additional Documentation Required. Borrower shall from
time to time execute and deliver to Bank, at the request of Bank, all Negotiable
Collateral, all financing statements and other documents that Bank may
reasonably request, in form satisfactory to Bank, to perfect and continue
perfected Bank's security interests in the Collateral and in order to fully
consummate all of the transactions contemplated under the Loan Documents.

     4.3  Right to Inspect. Bank (through any of its officers, employees, or
agents) shall have the right, upon reasonable prior notice, from time to time
during Borrower's usual business hours, to inspect Borrower's Books and to make
copies thereof and to check, test, and appraise the Collateral in order to
verify Borrower's financial condition or the amount, condition of, or any other
matter relating to, the Collateral.

5.   REPRESENTATIONS AND WARRANTIES

     Borrower represents and warrants as follows:

     5.1  Due Organization and Qualification. Borrower and each Subsidiary is a
corporation duly existing and in good standing under the laws of its state of
incorporation and qualified and licensed to do business in, and is in good
standing in, any state in which the conduct of its business or its ownership of
property requires that it be so qualified.

     5.2  Due Authorization; No Conflict. The execution, delivery, and
performance of the Loan Documents are within Borrower's powers, have been duly
authorized, and are not in conflict with nor constitute a breach of any
provision contained in Borrower's Articles/Certificate of Incorporation or
Bylaws, nor will they constitute an event of default under any material
agreement to which Borrower is a party or by which Borrower is bound Borrower is
not in default under any agreement to which it is a party or by which it is
bound, which default could have a Material Adverse Effect.

     5.3  No Prior Encumbrances. Borrower has good and indefeasible title to the
Collateral, free and clear of Liens, except for Permitted Liens.

     5.4  Bona Fide Eligible Accounts. The Eligible Accounts are bona fide
existing obligations. The service or property giving rise to such Eligible
Accounts has been performed or delivered to the account debtor or to the account
debtor's agent for immediate shipment to and unconditional acceptance by the
account debtor. Borrower has not received notice of actual or imminent
Insolvency Proceeding of any account debtor whose accounts are included in any
Borrowing Base Certificate as an Eligible Account.

     5.5  Name; Location of Chief Executive Office. Except as disclosed in the
Schedule, Borrower has not done business and will not without at least thirty
(30) days prior written notice to Bank do business under any name other than
that specified on the signature page hereof. The chief executive office of
Borrower is located at the address indicated in Section 10 hereof.

     5.6  Litigation. There are no actions or proceedings pending, or, to
Borrower's knowledge, threatened by or against Borrower or any Subsidiary before
any court or administrative agency in which an adverse decision could have a
Material Adverse Effect or a material adverse effect on Borrower's interest or
Bank's security interest in the Collateral.

                                      -10-
<PAGE>

     5.7  No Material Adverse Change in Financial Statements. All consolidated
financial statements related to Borrower and any Subsidiary that have been
delivered by Borrower to Bank fairly present in all material respects Borrower's
consolidated financial condition as of the date thereof and Borrower's
consolidated results of operations for the period then ended. There has not been
a material adverse change in the consolidated financial condition of Borrower
since the date of the most recent of such financial statements submitted to Bank
on or about the Closing Date.

     5.8  Solvency. Borrower is able to pay its debts (including trade debts) as
they mature.

     5.9  Regulatory Compliance. Borrower and each Subsidiary has met the
minimum funding requirements of ERISA with respect to any employee benefit plans
subject to ERISA. No event has occurred resulting from Borrower's failure to
comply with ERISA that is reasonably likely to result in Borrower's incurring
any liability that could have a Material Adverse Effect. Borrower is not an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940. Borrower is not engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulations T and U of the Board of Governors of the Federal Reserve
System). Borrower has complied with all the provisions of the Federal Fair Labor
Standards Act. Borrower has not violated any statutes, laws, ordinances or rules
applicable to it, violation of which could have a Material Adverse Effect.

     5.10  Environmental Condition. None of Borrower's or any Subsidiary's
properties or assets has ever been used by Borrower or any Subsidiary or, to the
best of Borrower's knowledge, by previous owners or operators, in the disposal
of, or to produce, store, handle, treat, release, or transport, any hazardous
waste or hazardous substance other than in accordance with applicable law; to
the best of Borrower's knowledge, none of Borrower's properties or assets has
ever been designated or identified in any manner pursuant to any environmental
protection statute as a hazardous waste or hazardous substance disposal site, or
a candidate for closure pursuant to any environmental protection statute; no
lien arising under any environmental protection statute has attached to any
revenues or to any real or personal property owned by Borrower or any
Subsidiary; and neither Borrower nor any Subsidiary has received a summons,
citation, notice, or directive from the Environmental Protection Agency or any
other federal, state or other governmental agency concerning any action or
omission by Borrower or any Subsidiary resulting in the release, or other
disposition of hazardous waste or hazardous substances into the environment.

     5.11  Taxes.  Borrower and each Subsidiary has filed or caused to be filed
all tax returns required to be filed on a timely basis, and has paid, or has
made adequate provision for the payment of, all taxes reflected therein, except
those being contested in good faith by proper proceedings with adequate reserves
under GAAP.

     5.12  Subsidiaries. Borrower does not own any stock, partnership interest
or other equity securities of any Person, except for Permitted Investments.

     5.13  Government Consents. Borrower and each Subsidiary has obtained all
consents, approvals and authorizations of, made all declarations or filings
with, and given all notices to, all governmental authorities that are necessary
for the continued operation of Borrower's business as currently conducted.

     5.14  Full Disclosure. No representation, warranty or other statement made
by Borrower in any certificate or written statement furnished to Bank contains
any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements contained in such certificates or
statements not misleading.

6.   AFFIRMATIVE COVENANTS

     Borrower covenants and agrees that, until payment in full of all
outstanding Obligations, and for so long as Bank may have any commitment to make
a Credit Extension hereunder, Borrower shall do all of the following:

                                      -11-
<PAGE>

     6.1  Good Standing. Borrower shall maintain its and each of its
Subsidiaries' corporate existence and good standing in its jurisdiction of
incorporation and maintain qualification in each jurisdiction in which the
failure to so qualify could have a Material Adverse Effect. Borrower shall
maintain, and shall cause each of its Subsidiaries to maintain, to the extent
consistent with prudent management of Borrower's business, in force all
licenses, approvals and agreements, the loss of which could have a Material
Adverse Effect.

     6.2  Government Compliance. Borrower shall meet, and shall cause each
Subsidiary to meet, the minimum funding requirements of ERISA with respect to
any employee benefit plans subject to ERISA. Borrower shall comply, and shall
cause each Subsidiary to comply, with all statutes, laws, ordinances and
government rules and regulations to which it is subject, noncompliance with
which could have a Material Adverse Effect or a material adverse effect on the
Collateral or the priority of Bank's Lien on the Collateral.

     6.3  Financial Statements, Reports, Certificates. Borrower shall deliver to
Bank: (a) as soon as available, but in any event within thirty (30) days after
the end of each month, a company prepared consolidated balance sheet and income
statement covering Borrower's consolidated operations during such period, in a
form and certified by an officer of Borrower reasonably acceptable to Bank; (b)
as soon as available, but in any event within ninety (90) days after the end of
Borrower's fiscal year, audited consolidated financial statements of Borrower
prepared in accordance with GAAP, consistently applied, together with an
unqualified opinion on such financial statements of an independent certified
public accounting firm reasonably acceptable to Bank; (c) within five (5) days
of filing, copies of all statements, reports and notices sent or made available
generally by Borrower to its security holders or to any holders of Subordinated
Debt and all reports on Form 10-K, 10-Q and 8-K filed with the Securities and
Exchange Commission; (d) promptly upon receipt of notice thereof, a report of
any legal actions pending or threatened against Borrower or any Subsidiary that
could result in damages or costs to Borrower or any Subsidiary of One Hundred
Thousand Dollars ($100,000) or more; (e) within thirty (30) days of the approval
thereof, any budgets or forecasts or revisions thereto; and (f) such budgets,
sales projections, operating plans or other financial information as Bank may
reasonably request from time to time.

     Within fifteen (15) days after the last day of each month during which
Credit Extensions are requested or outstanding, and in connection with any
Advance (unless a Borrowing Base Certificate has been provided within the last
thirty (30) days), Borrower shall deliver to Bank a Borrowing Base Certificate
signed by a Responsible Officer in substantially the form of Exhibit C hereto,
together with an aged listing of accounts receivable.

    Within thirty (30) days after the last day of each month, Borrower shall
deliver to Bank with the monthly financial statements a Compliance Certificate
signed by a Responsible Officer in substantially the form of Exhibit D hereto.

     Bank shall have a right from time to time hereafter to audit Borrower's
Accounts at Borrower's expense, provided that such audits will be conducted no
more often than every twelve (12) months unless an Event of Default has occurred
and is continuing.

     6.4  Inventory; Returns. Borrower shall keep all Inventory in good and
marketable condition, free from all material defects. Returns and allowances, if
any, as between Borrower and its account debtors shall be on the same basis and
in accordance with the usual customary practices of Borrower, as they exist at
the time of the execution and delivery of this Agreement. Borrower shall
promptly notify Bank of all returns and recoveries and of all disputes and
claims, where the return, recovery, dispute or claim involves more than Fifty
Thousand Dollars ($50,000).

                                      -12-
<PAGE>

     6.5  Taxes.  Borrower shall make, and shall cause each Subsidiary to make,
due and timely payment or deposit of all material federal, state, and local
taxes, assessments, or contributions required of it by law, and will execute and
deliver to Bank, on demand, appropriate certificates attesting to the payment or
deposit thereof; and Borrower will make, and will cause each Subsidiary to make,
timely payment or deposit of all material tax payments and withholding taxes
required of it by applicable laws, including, but not limited to, those laws
concerning F.I.C.A., F.U.T.A., state disability, and local, state, and federal
income taxes, and will, upon request, furnish Bank with proof satisfactory to
Bank indicating that Borrower or a Subsidiary has made such payments or
deposits; provided that Borrower or a Subsidiary need not make any payment if
(i) the amount or validity of such payment is contested in good faith by
appropriate proceedings, (ii) Borrower or Subsidiary, as the case may be, has
established proper reserves (to the extent required by GAAP) and (iii) no lien
other than a Permitted Lien results.

     6.6  Insurance.

          (a)  Borrower, at its expense, shall keep the Collateral insured
     against loss or damage by fire, theft, explosion, sprinklers, and all other
     hazards and risks, and in such amounts, as ordinarily insured against by
     other owners in similar businesses conducted in the locations where
     Borrower's business is conducted on the date hereof. Borrower shall also
     maintain insurance relating to Borrower's ownership and use of the
     Collateral in amounts and of a type that are customary to businesses
     similar to Borrower's.

          (b)  All such policies of insurance shall be in such form, with such
     companies, and in such amounts as are reasonably satisfactory to Bank. All
     such policies of property insurance shall contain a lender's loss payable
     endorsement, in a form satisfactory to Bank, showing Bank as an additional
     loss payee thereof and all liability insurance policies shall show the Bank
     as an additional insured, and shall specify that the insurer must give at
     least twenty (20) days notice to Bank before canceling its policy for any
     reason. At Bank's request, Borrower shall deliver to Bank certified copies
     of such policies of insurance and evidence of the payments of all premiums
     therefor. All proceeds payable under any such policy shall, at the option
     of Bank, be payable to Bank to be applied on account of the Obligations.

     6.7  Principal Depository. Borrower shall maintain its principal depository
and operating accounts with Bank.

     6.8  Quick Ratio. Borrower shall maintain, as of the last day of each
calendar month, a ratio of Quick Assets to Current Liabilities of at least
2.0 to 1.0.

     6.9  Tangible Net Worth. Borrower shall maintain, as of the last day of
each calendar quarter, a Tangible Net Worth of not less than Forty-Five Million
Dollars ($45,000,000.00).

     6.10  Profitability. Borrower shall have a minimum net profit/maximum net
loss of the following amounts for the corresponding periods:

          Second Quarter of 1999       ($3,500,000.00)
          Third Quarter of 1999        ($2,500,000.00)
          Fourth Quarter of 1999       ($1,000,000.00)
          First Quarter of 2000        ($  500,000.00)
          Second Quarter of 2000,
           and each quarter thereafter  $1.00

     6.11 Further Assurances. At any time and from time to time Borrower shall
execute and deliver such further instruments and take such further action as may
reasonably be requested by Bank to effect the purposes of this Agreement.

7.   NEGATIVE COVENANTS

     Borrower covenants and agrees that, so long as any Credit Extension
hereunder shall be available and until payment in full of the outstanding
Obligations or for so long as Bank may have any commitment to make any Advances,
Borrower will not do any of the following:

                                      -13-
<PAGE>

     7.1  Dispositions.  Convey, sell, lease, transfer or otherwise dispose of
(collectively, a "Transfer"), or permit any of its Subsidiaries to Transfer, all
or any part of its business or property, other than Transfers: (i)  of inventory
in the ordinary course of business, (ii) of non-exclusive licenses and similar
arrangements for the use of the property of Borrower or its Subsidiaries in the
ordinary course of business; (iii) that constitute payment of normal and usual
operating expenses in the ordinary course of business; or (iv) of worn-out or
obsolete Equipment.

     7.2  Changes in Business, Ownership, or Management, Business Locations.
Engage in any business, or permit any of its Subsidiaries to engage in any
business, other than the businesses currently engaged in by Borrower and any
business substantially similar or related thereto (or incidental thereto), or
suffer a material change in Borrower's ownership or management. Borrower will
not, without at least thirty (30) days prior written notification to Bank,
relocate its chief executive office or add any new offices or business
locations.

     7.3  Mergers or Acquisitions.  Merge or consolidate, or permit any of its
Subsidiaries to merge or consolidate, with or into any other business
organization, or acquire, or permit any of its Subsidiaries to acquire, all or
substantially all of the capital stock or property of another Person.

     7.4  Indebtedness. Create, incur, assume or be or remain liable with
respect to any Indebtedness, or permit any Subsidiary so to do, other than
Permitted Indebtedness.

     7.5  Encumbrances. Create, incur, assume or suffer to exist any Lien with
respect to any of its property, or assign or otherwise convey any right to
receive income, including the sale of any Accounts, or permit any of its
Subsidiaries so to do, except for Permitted Liens.

     7.6  Distributions. Pay any dividends or make any other distribution or
payment on account of or in redemption, retirement or purchase of any capital
stock.

     7.7  Investments. Directly or indirectly acquire or own, or make any
Investment in or to any Person, or permit any of its Subsidiaries so to do,
other than Permitted Investments.

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

     7.9  Subordinated Debt. Make any payment in respect of any Subordinated
Debt, or permit any of its Subsidiaries to make any such payment, except in
compliance with the terms of such Subordinated Debt, or amend any provision
contained in any documentation relating to the Subordinated Debt without Bank's
prior written consent.

     7.10  Inventory. Store the Inventory with a bailee, warehouseman, or
similar party unless Bank has received a pledge of any warehouse receipt
covering such Inventory. Except for Inventory sold in the ordinary course of
business and except for such other locations as Bank may approve in writing,
Borrower shall keep the Inventory only at the location set forth in Section 10
hereof and such other locations of which Borrower gives Bank prior written
notice and as to which Borrower signs and files a financing statement where
needed to perfect Bank's security interest.

     7.11  Compliance. Become an "investment company" or a company controlled by
an "investment company," within the meaning of the Investment Company Act of
1940, or become principally engaged in, or undertake as one of its important
activities, the business of extending credit for the purpose of purchasing or
carrying margin stock, or use the proceeds of any Advance for such purpose; fail
to meet the minimum funding requirements of ERISA; permit a Reportable Event or
Prohibited Transaction, as defined in ERISA, to occur; fail to comply with the
Federal Fair Labor Standards Act or violate any other law or regulation, which
violation could have a Material Adverse Effect or a material adverse effect on
the Collateral or the priority of Bank's Lien on the Collateral; or permit any
of its Subsidiaries to do any of the foregoing.

                                      -14-
<PAGE>

8.  EVENTS OF DEFAULT

     Any one or more of the following events shall constitute an Event of
Default by Borrower under this Agreement:

     8.1  Payment Default.  If Borrower fails to pay, when due, any of the
Obligations.

     8.2  Covenant Default.

          (a)  If Borrower fails to perform any obligation under Sections 6.3,
     6.6, 6.7, 6.8, 6.9, or 6.10 or violates any of the covenants contained in
     Article 7 of this Agreement; or

          (b)  If Borrower fails or neglects to perform, keep, or observe any
     other material term, provision, condition, covenant, or agreement contained
     in this Agreement, in any of the Loan Documents, or in any other present or
     future agreement between Borrower and Bank and as to any default under such
     other term, provision, condition, covenant or agreement that can be cured,
     has failed to cure such default within ten (10) days after the occurrence
     thereof; provided, however, that if the default cannot by its nature be
     cured within the ten (10) day period or cannot after diligent attempts by
     Borrower be cured within such ten (10) day period, and such default is
     likely to be cured within a reasonable time, then Borrower shall have an
     additional reasonable period (which shall not in any case exceed thirty
     (30) days) to attempt to cure such default, and within such reasonable time
     period the failure to have cured such default shall not be deemed an Event
     of Default (provided that no Advances will be required to be made during
     such cure period);

     8.3  Material Adverse Change. If there (i) occurs a Material Adverse
Effect, or (ii) is a material impairment of the prospect of repayment of any
portion of the Obligations or (iii) is a material impairment of the value or
priority of Bank's security interests in the Collateral;

     8.4  Attachment. If any material portion of Borrower's assets is attached,
seized, subjected to a writ or distress warrant, or is levied upon, or comes
into the possession of any trustee, receiver or person acting in a similar
capacity and such attachment, seizure, writ or distress warrant or levy has not
been removed, discharged or rescinded within thirty (30) days, or if Borrower is
enjoined, restrained, or in any way prevented by court order from continuing to
conduct all or any material part of its business affairs, or if a judgment or
other claim becomes a lien or encumbrance upon any material portion of
Borrower's assets, or if a notice of lien, levy, or assessment is filed of
record with respect to any of Borrower's assets by the United States Government,
or any department, agency, or instrumentality thereof, or by any state, county,
municipal, or governmental agency, and the same is not paid within thirty (30)
days after Borrower receives notice thereof, provided that none of the foregoing
shall constitute an Event of Default where such action or event is stayed or an
adequate bond has been posted pending a good faith contest by Borrower (provided
that no Credit Extensions will be required to be made during such cure period);

     8.5  Insolvency. If Borrower becomes insolvent, or if an Insolvency
Proceeding is commenced by Borrower, or if an Insolvency Proceeding is commenced
against Borrower and is not dismissed or stayed within 30 days (provided that no
Advances will be made prior to the dismissal of such Insolvency Proceeding);

     8.6  Other Agreements. If there is a default in any agreement to which
Borrower is a party with a third party or parties resulting in a right by such
third party or parties, whether or not exercised, to accelerate the maturity of
any Indebtedness in an amount in excess of One Hundred Thousand Dollars
($100,000) or that could have a Material Adverse Effect;

                                      -15-
<PAGE>

     8.7  Subordinated Debt.  If Borrower makes any payment on account of
Subordinated Debt, except to the extent such payment is allowed under any
subordination agreement entered into with Bank;

     8.8  Judgments.  If a judgment or judgments for the payment of money in an
amount, individually or in the aggregate, of at least Fifty Thousand Dollars
($50,000) shall be rendered against Borrower and shall remain unsatisfied and
unstayed for a period of thirty (30) days (provided that no Credit Extensions
will be made prior to the satisfaction or stay of such judgment); or

     8.9  Misrepresentations.  If any material misrepresentation or material
misstatement exists now or hereafter in any warranty or representation set forth
herein or in any certificate or writing delivered to Bank by Borrower or any
Person acting on Borrower's behalf pursuant to this Agreement or to induce Bank
to enter into this Agreement or any other Loan Document.

     8.10  Guaranty. Any guaranty of all or a portion of the Obligations ceases
for any reason to be in full force and effect, or any Guarantor fails to perform
any obligation under any guaranty of all or a portion of the Obligations, or any
material misrepresentation or material misstatement exists now or hereafter in
any warranty or representation set forth in any guaranty of all or a portion of
the Obligations or in any certificate delivered to Bank in connection with such
guaranty, or any of the circumstances described in Sections 8.4, 8.5 or 8.8
occur with respect to any Guarantor.

9.   BANK'S RIGHTS AND REMEDIES

     9.1  Rights and Remedies. Upon the occurrence and during the continuance of
an Event of Default, Bank may, at its election, without notice of its election
and without demand, do any one or more of the following, all of which are
authorized by Borrower:

          (a)  Declare all Obligations, whether evidenced by this Agreement, by
     any of the other Loan Documents, or otherwise, immediately due and payable
     (provided that upon the occurrence of an Event of Default described in
     Section 8.5 all Obligations shall become immediately due and payable
     without any action by Bank);

          (b)  Cease advancing money or extending credit to or for the benefit
     of Borrower under this Agreement or under any other agreement between
     Borrower and Bank;

          (c)  Settle or adjust disputes and claims directly with account
     debtors for amounts, upon terms and in whatever order that Bank reasonably
     considers advisable;

          (d)  Without notice to or demand upon Borrower, make such payments and
     do such acts as Bank considers necessary or reasonable to protect its
     security interest in the Collateral. Borrower agrees to assemble the
     Collateral if Bank so requires, and to make the Collateral available to
     Bank as Bank may designate. Borrower authorizes Bank to enter the premises
     where the Collateral is located, to take and maintain possession of the
     Collateral, or any part of it, and to pay, purchase, contest, or compromise
     any encumbrance, charge, or lien which in Bank's determination appears to
     be prior or superior to its security interest and to pay all expenses
     incurred in connection therewith. With respect to any of Borrower's
     premises, Borrower hereby grants Bank a license to enter such premises and
     to occupy the same, without charge in order to exercise any of Bank's
     rights or remedies provided herein, at law, in equity, or otherwise;

          (e)  Without notice to Borrower set off and apply to the Obligations
     any and all (i) balances and deposits of Borrower held by Bank, or (ii)
     indebtedness at any time owing to or for the credit or the account of
     Borrower held by Bank;

                                      -16-
<PAGE>

          (f)  Ship, reclaim, recover, store, finish, maintain, repair, prepare
     for sale, advertise for sale, and sell (in the manner provided for herein)
     the Collateral. Bank is hereby granted a non-exclusive, royalty-free
     license or other right, solely pursuant to the provisions of this Section
     9.1, to use, without charge, Borrower's labels, patents, copyrights, mask
     works, rights of use of any name, trade secrets, trade names, trademarks,
     service marks, and advertising matter, or any property of a similar nature,
     as it pertains to the Collateral, in completing production of, advertising
     for sale, and selling any Collateral and, in connection with Bank's
     exercise of its rights under this Section 9.1, Borrower's rights under all
     licenses and all franchise agreements shall inure to Bank's benefit;

          (g)  Sell the Collateral at either a public or private sale, or both,
     by way of one or more contracts or transactions, for cash or on terms, in
     such manner and at such places (including Borrower's premises) as Bank
     determines is commercially reasonable, and apply the proceeds thereof to
     the Obligations in whatever manner or order it deems appropriate;

          (h)  Bank may credit bid and purchase any Collateral at any public
     sale, or at any private sale as permitted by law; and

          (i)  Any deficiency that exists after disposition of the Collateral as
     provided above will be paid immediately by Borrower.

     9.2  Power of Attorney.  Effective only upon the occurrence and during the
continuance of an Event of Default, Borrower hereby irrevocably appoints Bank
(and any of Bank's designated officers, or employees) as Borrower's true and
lawful attorney to:  (a) send requests for verification of Accounts or notify
account debtors of Bank's security interest in the Accounts; (b) endorse
Borrower's name on any checks or other forms of payment or security that may
come into Bank's possession; (c) sign Borrower's name on any invoice or bill of
lading relating to any Account, drafts against account debtors, schedules and
assignments of Accounts, verifications of Accounts, and notices to account
debtors; (d) make, settle, and adjust all claims under and decisions with
respect to Borrower's policies of insurance; and (e) settle and adjust disputes
and claims respecting the accounts directly with account debtors, for amounts
and upon terms which Bank determines to be reasonable; and (f) to file, in its
sole discretion, one or more financing or continuation statements and amendments
thereto, relative to any of the Collateral without the signature of Borrower
where permitted by law, provided Bank may exercise such power of attorney to
sign the name of Borrower on any of the documents described in Section 4.2
regardless of whether an Event of Default has occurred.  The appointment of Bank
as Borrower's attorney in fact, and each and every one of Bank's rights and
powers, being coupled with an interest, is irrevocable until all of the
Obligations have been fully repaid and performed and Bank's obligation to
provide advances hereunder is terminated.

     9.3  Accounts Collection. Upon the occurrence and during the continuance of
an Event of Default, Bank may notify any Person owing funds to Borrower of
Bank's security interest in such funds and verify the amount of such Account.
Borrower shall collect all amounts owing to Borrower for Bank, receive in trust
all payments as Bank's trustee, and if requested or required by Bank,
immediately deliver such payments to Bank in their original form as received
from the account debtor, with proper endorsements for deposit.

     9.4  Bank Expenses.  If Borrower fails to pay any amounts or furnish any
required proof of payment due to third persons or entities, as required under
the terms of this Agreement, then Bank may do any or all of the following:  (a)
make payment of the same or any part thereof; (b) set up such reserves under the
Committed Revolving Line as Bank deems necessary to protect Bank from the
exposure created by such failure; or (c) obtain and maintain insurance policies
of the type discussed in Section 6.6 of this Agreement, and take any action with
respect to such policies as Bank deems prudent.  Any amounts so paid or
deposited by Bank shall constitute Bank Expenses, shall be immediately due and
payable, and shall bear interest at the then applicable rate hereinabove
provided, and shall be secured by the Collateral.  Any payments made by Bank
shall not constitute an agreement by Bank to make similar payments in the future
or a waiver by Bank of any Event of Default under this Agreement.

                                      -17-
<PAGE>

     9.5  Bank's Liability for Collateral. So long as Bank complies with
reasonable banking practices, Bank shall not in any way or manner be liable or
responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage
thereto occurring or arising in any manner or fashion from any cause; (c) any
diminution in the value thereof; or (d) any act or default of any carrier,
warehouseman, bailee, forwarding agency, or other person whomsoever. All risk of
loss, damage or destruction of the Collateral shall be borne by Borrower.

     9.6  Remedies Cumulative. Bank's rights and remedies under this Agreement,
the Loan Documents, and all other agreements shall be cumulative. Bank shall
have all other rights and remedies not expressly set forth herein as provided
under the Code, by law, or in equity. No exercise by Bank of one right or remedy
shall be deemed an election, and no waiver by Bank of any Event of Default on
Borrower's part shall be deemed a continuing waiver. No delay by Bank shall
constitute a waiver, election, or acquiescence by it. No waiver by Bank shall be
effective unless made in a written document signed on behalf of Bank and then
shall be effective only in the specific instance and for the specific purpose
for which it was given.

     9.7  Demand; Protest.  Borrower waives demand, protest, notice of protest,
notice of default or dishonor, notice of payment and nonpayment, notice of any
default, nonpayment at maturity, release, compromise, settlement, extension, or
renewal of accounts, documents, instruments, chattel paper, and guarantees at
any time held by Bank on which Borrower may in any way be liable.

10.  NOTICES

     Unless otherwise provided in this Agreement, all notices or demands by any
party relating to this Agreement or any other agreement entered into in
connection herewith 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 a recognized overnight
delivery service, by certified mail, postage prepaid, return receipt requested,
or by telefacsimile to Borrower or to Bank, as the case may be, at its addresses
set forth below:

          If to Borrower  Natural MicroSystems Corporation
                          100 Crossing Boulevard
                          Framingham, Massachusetts 01702
                          Attn: Mr. Robert E. Hult, Chief Financial Officer
                          FAX: (508) 271-1351

          If to Bank      Silicon Valley Bank
                          40 William Street - Suite 350
                          Wellesley, Massachusetts 02481
                          Attn: Ms. Jane A. Braun, Senior Vice President
                          FAX: (781) 431-9906

          with a copy to: Riemer & Braunstein
                          Three Center Plaza
                          Boston, Massachusetts 02108
                          Attn: David A. Ephraim, Esquire
                          FAX: (617) 723-6831

     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.

                                      -18-
<PAGE>

11.  CHOICE OF LAW AND VENUE; JURY WAIVER

     The laws of the Commonwealth of Massachusetts shall apply to this
Agreement.  BORROWER ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN THE COMMONWEALTH OF MASSACHUSETTS IN ANY ACTION, SUIT,
OR PROCEEDING OF ANY KIND, AGAINST IT WHICH ARISES OUT OF OR BY REASON OF THIS
AGREEMENT; PROVIDED, HOWEVER, THAT IF FOR ANY REASON BANK CANNOT AVAIL ITSELF OF
THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS, BORROWER ACCEPTS JURISDICTION
OF THE COURTS AND VENUE IN SANTA CLARA COUNTY, CALIFORNIA.

     BORROWER AND BANK EACH HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN
DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS.  EACH PARTY RECOGNIZES AND AGREES THAT THE FOREGOING WAIVER
CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT.  EACH
PARTY REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL
COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

12.  GENERAL PROVISIONS

     12.1  Successors and Assigns.  This Agreement shall bind and inure to the
benefit of the respective successors and permitted assigns of each of the
parties; provided, however, that neither this Agreement nor any rights hereunder
may be assigned by Borrower without Bank's prior written consent, which consent
may be granted or withheld in Bank's sole discretion.  Bank shall have the right
without the consent of or notice to Borrower to sell, transfer, negotiate, or
grant participation in all or any part of, or any interest in, Bank's
obligations, rights and benefits hereunder.

     12.2  Indemnification.  Borrower shall, indemnify, defend, protect and hold
harmless Bank and its officers, employees, and agents against:  (a) all
obligations, demands, claims, and liabilities claimed or asserted by any other
party in connection with the transactions contemplated by the Loan Documents;
and (b) all losses or Bank Expenses in any way suffered, incurred, or paid by
Bank as a result of or in any way arising out of, following, or consequential to
transactions between Bank and Borrower whether under the Loan Documents, or
otherwise (including without limitation reasonable attorneys fees and expenses),
except for losses caused by Bank's gross negligence or willful misconduct.

     12.3  Time of Essence.  Time is of the essence for the performance of all
obligations set forth in this Agreement.

     12.4  Severability of Provisions. 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.

     12.5  Amendments in Writing, Integration. This Agreement cannot be amended
or terminated except by a writing signed by Borrower and Bank. All prior
agreements, understandings, representations, warranties, and negotiations
between the parties hereto with respect to the subject matter of this Agreement,
if any, are merged into this Agreement and the Loan Documents.

     12.6  Counterparts.  This Agreement may be executed in any number of
counterparts and by different parties on separate counterparts, each of which,
when executed and delivered, shall be deemed to be an original, and all of
which, when taken together, shall constitute but one and the same Agreement.

                                      -19-
<PAGE>

     12.7  Survival.  All covenants, representations and warranties made in this
Agreement shall continue in full force and effect so long as any Obligations
remain outstanding.  The obligations of Borrower to indemnify Bank with respect
to the expenses, damages, losses, costs and liabilities described in Section
12.2 shall survive until all applicable statute of limitations periods with
respect to actions that may be brought against Bank have run; provided that so
long as the obligations referred to in the first sentence of this Section 12.7
have been satisfied, and Bank has no commitment to make any Credit Extensions or
to make any other loans to Borrower, Bank shall release all security interests
granted hereunder and redeliver all Collateral held by it in accordance with
applicable law.

     12.8  Confidentiality. In handling any confidential information Bank shall
exercise the same degree of care that it exercises with respect to its own
proprietary information of the same types to maintain the confidentiality of any
non-public information thereby received or received pursuant to this Agreement
except that disclosure of such information may be made (i) to the subsidiaries
or affiliates of Bank in connection with their present or prospective business
relations with Borrower, (ii) to prospective transferees or purchasers of any
interest in the Loans, provided that they have entered into a comparable
confidentiality agreement in favor of Borrower and have delivered a copy to
Borrower, (iii) as required by law, regulations, rule or order, subpoena,
judicial order or similar order, (iv) as may be required in connection with the
examination, audit or similar investigation of Bank, and (v) as Bank may deem
appropriate in connection with the exercise of any remedies hereunder.
Confidential information hereunder shall not include information that either:
(a) is in the public domain or in the knowledge or possession of Bank when
disclosed to Bank, or becomes part of the public domain after disclosure to Bank
through no fault of Bank; or (b) is disclosed to Bank by a third party, provided
Bank does not have actual knowledge that such third party is prohibited from
disclosing such information.

     12.9  Countersignature.  This Agreement shall become effective only when it
shall have been executed by Borrower and Bank (provided, however, in no event
shall this Agreement become effective until signed by an officer of Bank in
California).

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as a sealed instrument under the laws of the Commonwealth of
Massachusetts as of the date first above written.

                                    NATURAL MICROSYSTEMS CORPORATION

                                    By:
                                       --------------------------------

                                    Title:
                                          -----------------------------

                                    By:
                                       --------------------------------

                                    Title:
                                          -----------------------------

                                      -20-
<PAGE>

                                    SILICON VALLEY BANK,
                                    d/b/a SILICON VALLEY EAST

                                    By:
                                       --------------------------------

                                    Name:
                                         ------------------------------

                                    Title:
                                          -----------------------------

                                    SILICON VALLEY BANK

                                    By:
                                       --------------------------------

                                    Name:
                                         ------------------------------

                                    Title:
                                          -----------------------------

                                          (Signed in Santa Clara County,
                                           California)

                                      -21-

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