Document:

EXHIBIT
10.1

     

    EXPLANATORY
NOTE TO THIS EXHIBIT

    
       

      The
Company’s representations and warranties included in this Loan Agreement were
made to each of the lenders hereunder. These representations and warranties were
made as of specific dates, only for purposes of this Loan Agreement and for the
benefit of the parties thereto. These representations and warranties were
subject to important exceptions and limitations agreed upon by the parties, made
for the purposes of allocating contractual risk between the parties rather than
establishing these matters as facts and were made subject to a contractual
standard of materiality that may be different from the standard generally
applicable under federal securities laws. This Loan Agreement is filed with this
report only to provide investors with information regarding its terms and
conditions, and not to provide any other factual information regarding the
Company or its business. Moreover, information concerning the subject matter of
the representations and warranties may have changed, and may continue to change,
after the date of the Loan Agreement, and such subsequent information may or may
not be fully reflected in the Company’s public reports. Accordingly, investors
should not rely on the representations and warranties contained in this Loan
Agreement or any description thereof as characterizations of the actual state of
facts or condition of the Company or its affiliates. The information in this
Loan Agreement should be considered together with the Company’s public reports
filed with the Securities and Exchange Commission.

    

       

    
      

    

     

    [EXECUTION

    COUNTERPART]

    

    
      
        	
                 

                LOAN
      AGREEMENT

                 

                dated
      as of December 30, 2010,

                 

                among

                 

                SERACARE
      LIFE SCIENCES, INC.,

                as
      Borrower

                 

                The
      Guarantors

                from
      time to time party hereto

                 

                CERTAIN
      LENDERS

                 

                MIDDLESEX
      SAVINGS BANK,

                as
      Administrative Agent

                 

              

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    TABLE
OF CONTENTS

     

    
      
        	 
      	 
      	
                Page

              
	 
      	 
      	 
      
	
                ARTICLE
      I          DEFINITIONS

              	
                1

              
	 
      	 
      	 
      
	
                Section
      1.01

              	
                Definitions

              	
                1

              
	
                Section
      1.02

              	
                Principles
      of Interpretation

              	
                26

              
	
                Section
      1.03

              	
                Accounting
      Terms

              	
                27

              
	
                Section
      1.04

              	
                LC
      Amounts

              	
                28

              
	 
      	 
      
	
                ARTICLE
      II         THE
      CREDITS

              	
                28

              
	 
      	 
      	 
      
	
                Section
      2.01

              	
                The
      Commitments

              	
                28

              
	
                Section
      2.02

              	
                Loans
      and Funding

              	
                29

              
	
                Section
      2.03

              	
                Notice
      of Borrowings

              	
                30

              
	
                Section
      2.04

              	
                Notices
      to Lenders; Funding of Borrowings

              	
                30

              
	
                Section
      2.05

              	
                Several
      Obligations

              	
                30

              
	
                Section
      2.06

              	
                [Reserved]

              	
                30

              
	
                Section
      2.07

              	
                Notes;
      Records

              	
                30

              
	
                Section
      2.08

              	
                Letters
      of Credit

              	
                31

              
	
                Section
      2.09

              	
                Fees

              	
                38

              
	
                 
      

              	 
      
	
                ARTICLE
      III        PAYMENTS AND
      PREPAYMENTS

              	
                39

              
	 
      	 
      	 
      
	
                Section
      3.01

              	
                Repayment
      of Loans

              	
                39

              
	
                Section
      3.02

              	
                Interest

              	
                40

              
	
                Section
      3.03

              	
                Optional
      Prepayments

              	
                41

              
	
                Section
      3.04

              	
                Mandatory
      Prepayments

              	
                42

              
	
                Section
      3.05

              	
                Notice
      of Prepayments

              	
                44

              
	
                Section
      3.06

              	
                [Intentionally
      Omitted]

              	
                44

              
	
                Section
      3.07

              	
                Payments
      Generally

              	
                44

              
	
                Section
      3.08

              	
                Pro
      Rata Treatment

              	
                46

              
	
                Section
      3.09

              	
                Lender
      Protective Advances

              	
                46

              
	 
      	 
      
	
                ARTICLE
      IV        SUBSIDIARY
      GUARANTEE

              	
                47

              
	 
      	 
      	 
      
	
                Section
      4.01

              	
                The
      Guarantee

              	
                47

              
	
                Section
      4.02

              	
                Obligations
      Unconditional

              	
                47

              
	
                Section
      4.03

              	
                Reinstatement

              	
                48

              
	
                Section
      4.04

              	
                Subrogation

              	
                48

              
	
                Section
      4.05

              	
                Remedies

              	
                49

              
	
                Section
      4.06

              	
                Instrument
      for the Payment of Money

              	
                49

              
	
                Section
      4.07

              	
                Continuing
      Guarantee

              	
                49

              
	
                Section
      4.08

              	
                Rights
      of Contribution

              	
                49

              
	
                Section
      4.09

              	
                General
      Limitation on Guarantee Obligations

              	
                50

              
	
                Section
      4.10

              	
                Best
      Interests

              	
                50

              
	
                Section
      4.11

              	
                Amendments
      to Financing Documents

              	
                50

              
	
                Section
      4.12

              	
                Joint
      and Several Obligations of Guarantors

              	
                51

              

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      
        	
                ARTICLE
      V          CONDITIONS

              	
                51

              
	 
      	 
      
	
                Section
      5.01

              	
                Initial
      Loans

              	
                51

              
	
                Section
      5.02

              	
                Conditions
      to Each Loan

              	
                54

              
	 
      	 
      	 
      
	
                ARTICLE
      VI        REPRESENTATIONS AND
      WARRANTIES

              	
                55

              
	 
      	
                 
      

              
	
                Section
      6.01

              	
                Organization;
      Powers

              	
                55

              
	
                Section
      6.02

              	
                Authorization;
      Enforceability

              	
                55

              
	
                Section
      6.03

              	
                Governmental
      Approvals; No Conflicts

              	
                55

              
	
                Section
      6.04

              	
                Financial
      Condition; No Material Adverse Change; Solvency

              	
                56

              
	
                Section
      6.05

              	
                Properties

              	
                56

              
	
                Section
      6.06

              	
                Litigation

              	
                56

              
	
                Section
      6.07

              	
                Environmental
      Matters

              	
                57

              
	
                Section
      6.08

              	
                Compliance
      with Laws and Agreements; No Defaults

              	
                58

              
	
                Section
      6.09

              	
                Investment
      Company Status

              	
                58

              
	
                Section
      6.10

              	
                Taxes

              	
                58

              
	
                Section
      6.11

              	
                ERISA

              	
                59

              
	
                Section
      6.12

              	
                Disclosure

              	
                59

              
	
                Section
      6.13

              	
                Margin
      Stock

              	
                60

              
	
                Section
      6.14

              	
                Capitalization

              	
                60

              
	
                Section
      6.15

              	
                Subsidiaries

              	
                60

              
	
                Section
      6.16

              	
                Investments;
      Deposit Accounts

              	
                60

              
	
                Section
      6.17

              	
                Real
      Property

              	
                60

              
	
                Section
      6.18

              	
                Material
      Indebtedness

              	
                61

              
	
                Section
      6.19

              	
                Material
      Liens

              	
                61

              
	
                Section
      6.20

              	
                Security
      Documents

              	
                61

              
	
                Section
      6.21

              	
                Receivables;
      Inventory; Accounts

              	
                61

              
	
                Section
      6.22

              	
                Anti-Terrorism
      Laws

              	
                62

              
	 
      	 
      	 
      
	
                ARTICLE
      VII        AFFIRMATIVE
      COVENANTS

              	
                63

              
	 
      	 
      
	
                Section
      7.01

              	
                Financial
      Statements and Other Information

              	
                63

              
	
                Section
      7.02

              	
                Notices
      of Material Events

              	
                65

              
	
                Section
      7.03

              	
                Existence:
      Conduct of Business

              	
                66

              
	
                Section
      7.04

              	
                Payment
      of Obligations

              	
                66

              
	
                Section
      7.05

              	
                Maintenance
      of Properties; Inventory

              	
                67

              
	
                Section
      7.06

              	
                Insurance

              	
                67

              
	
                Section
      7.07

              	
                Books
      and Records: Inspection Rights

              	
                68

              
	
                Section
      7.08

              	
                Compliance
      with Laws

              	
                68

              
	
                Section
      7.09

              	
                Use
      of Proceeds

              	
                69

              
	
                Section
      7.10

              	
                Certain
      Obligations Respecting Subsidiaries

              	
                69

              
	
                Section
      7.11

              	
                Notice
      of Lease Defaults

              	
                70

              
	
                Section
      7.12

              	
                Collateral
      Assignment of Key Person Life Insurance

              	
                70

              
	
                Section
      7.13

              	
                Accounts

              	
                71

              
	 
      	 
      	 
      
	
                ARTICLE
      VIII      NEGATIVE COVENANTS

              	
                71

              
	 
      	 
      
	
                Section
      8.01

              	
                Indebtedness

              	
                71

              

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      
        	
                Section
      8.02

              	
                Liens

              	
                72

              
	
                Section
      8.03

              	
                Mergers,
      Consolidations, Etc

              	
                74

              
	
                Section
      8.04

              	
                Dispositions

              	
                74

              
	
                Section
      8.05

              	
                Sale/Leasebacks

              	
                74

              
	
                Section
      8.06

              	
                Lines
      of Business

              	
                75

              
	
                Section
      8.07

              	
                Investments

              	
                75

              
	
                Section
      8.08

              	
                Acquisitions

              	
                76

              
	
                Section
      8.09

              	
                Restricted
      Payments

              	
                78

              
	
                Section
      8.10

              	
                Transactions
      with Affiliates

              	
                79

              
	
                Section
      8.11

              	
                Restrictive
      Agreements

              	
                79

              
	
                Section
      8.12

              	
                Reserved

              	
                80

              
	
                Section
      8.13

              	
                Modifications
      of Certain Documents

              	
                80

              
	
                Section
      8.14

              	
                Certain
      Financial Covenants

              	
                80

              
	 
      	 
      	 
      
	
                ARTICLE
      IX          DEFAULTS

              	
                81

              
	 
      	 
      
	
                Section
      9.01

              	
                Events
      of Default

              	
                81

              
	
                Section
      9.02

              	
                Application
      of Proceeds

              	
                84

              
	 
      	 
      	 
      
	
                ARTICLE
      X           CHANGE
      IN CIRCUMSTANCES

              	
                86

              
	 
      	 
      
	
                Section
      10.01

              	
                Increased
      Costs

              	
                86

              
	
                Section
      10.02

              	
                Payments
      Free and Clear; U.S. Taxes

              	
                87

              
	
                Section
      10.03

              	
                Survival

              	
                89

              
	 
      	 
      	 
      
	
                ARTICLE
      XI           ADMINISTRATIVE
      AGENT

              	
                89

              
	 
      	 
      
	
                ARTICLE
      XII         MISCELLANEOUS

              	
                94

              
	 
      	 
      
	
                Section
      12.01

              	
                Notices

              	
                94

              
	
                Section
      12.02

              	
                Waivers;
      Amendments

              	
                96

              
	
                Section
      12.03

              	
                Expenses:
      Indemnity; Damage Waiver

              	
                97

              
	
                Section
      12.04

              	
                Successors
      and Assigns

              	
                98

              
	
                Section
      12.05

              	
                Survival

              	
                100

              
	
                Section
      12.06

              	
                Counterparts:
      Integration; Effectiveness

              	
                101

              
	
                Section
      12.07

              	
                Severability

              	
                101

              
	
                Section
      12.08

              	
                Right
      of Setoff; Sharing; Payments Set Aside

              	
                101

              
	
                Section
      12.09

              	
                Governing
      Law; Jurisdiction; Service of Process

              	
                103

              
	
                Section
      12.10

              	
                WAIVER
      OF JURY TRIAL

              	
                103

              
	
                Section
      12.11

              	
                Headings

              	
                104

              
	
                Section
      12.12

              	
                Confidentiality

              	
                104

              
	
                Section
      12.13

              	
                USA
      PATRIOT Act Notice

              	
                105

              

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      Schedules

      

      
        	
                Schedule
      A

              	 
      	
                Commitments

              
	
                Schedule
      B

              	 
      	
                Eligible
      Inventory; Business Locations

              
	
                Schedule
      C

              	 
      	
                [intentionally
      omitted]

              
	
                Schedule
      D

              	 
      	
                Certain
      Foreign Account Debtors

              
	
                Schedule
      E

              	 
      	
                Certain
      Accounts

              
	 
      	 
      	 
      
	
                Schedule
      6.06

              	 
      	
                Litigation

              
	
                Schedule
      6.07

              	 
      	
                Environmental
      Matters

              
	
                Schedule
      6.10

              	 
      	
                Taxes

              
	
                Schedule
      6.15

              	 
      	
                Subsidiaries

              
	
                Schedule
      6.16

              	 
      	
                Existing
      Investments/Deposit Accounts

              
	
                Schedule
      6.17

              	 
      	
                Real
      Property

              
	
                Schedule
      6.18

              	 
      	
                Existing
      Indebtedness

              
	
                Schedule
      6.19

              	 
      	
                Existing
      Material Liens

              
	
                Schedule
      6.21(c)

              	 
      	
                Deposit
      Accounts

              
	
                Schedule
      8.01(d)(ii) 

              	 
      	
                ERP
      Equipment

              
	
                Schedule
      8.11

              	 
      	
                Restrictive
      Agreements

              

      

      

      Exhibits

      

      
        	
                Exhibit
      A-1

              	
                Form
      of Revolving Note

              
	
                Exhibit
      A-2

              	
                Form
      of Initial Term Note

              
	
                Exhibit
      A-3

              	
                Form
      of Amended and Restated Term Note

              
	
                Exhibit
      B

              	
                Form
      of Notice of Borrowing

              
	
                Exhibit
      C

              	
                Form
      of Borrowing Base Certificate

              
	
                Exhibit
      D

              	
                Form
      of Compliance Certificate

              

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    LOAN
AGREEMENT

     

    PREAMBLE

     

    AGREEMENT
dated as of December 30, 2010 among SERACARE LIFE SCIENCES, INC., a corporation
duly organized and validly existing under the laws of the State of Delaware (the
“Borrower”); each
Subsidiary of the Borrower that becomes a “Guarantor” after the date hereof
pursuant to Section
7.10 (each, a “Guarantor”, and collectively,
the “Guarantors”); each
of the lenders signatory hereto listed under the caption “LENDERS” on the
signature pages hereto and each lender that becomes a “Lender” after the date
hereof pursuant to Section 12.04 (each, a “Lender” and collectively, the
“Lenders”); and
MIDDLESEX SAVINGS BANK, as LC Bank (defined below) and as administrative agent
for the Lenders (in such capacity, together with its successors in such
capacity, the “Administrative
Agent”).

     

    A.           The
Borrower has requested that the Lenders extend credit to the Borrower in an
aggregate principal amount of up to $20,000,000 (i) for working capital and
general corporate purposes and (ii) to finance certain acquisitions and other
general corporate purposes, including stock repurchases.

     

    B.           The
Lenders are willing to extend the requested credit on and subject to the terms
and conditions hereof.

     

    Accordingly,
the parties hereto agree as follows:

     

    ARTICLE
I

     

    DEFINITIONS

     

    Section
1.01   Definitions.  The
following terms, as used herein, have the following meanings:

     

    “Account Control Agreement”
means an agreement, reasonably satisfactory to the Administrative Agent, among
the Borrower or any other Obligor, the Administrative Agent and a depository
pursuant to which the Administrative Agent is granted “control” (as that term is
used in the UCC) over a deposit account of the Borrower or any other
Obligor.

     

    “Accounts” mean all of the
Borrower’s now owned or hereafter acquired right, title and interest with
respect to “accounts”, as such term is from time to time defined in the
UCC.

     

    “Account Debtor” means any
Person who is or may become obligated under, with respect to, or on account of,
an Account.

     

    “Acquisition” means any
transaction or series of related transactions for the direct or indirect (a)
acquisition by the Borrower or any of its Subsidiaries of all or substantially
all of the Property of any Person, or all or substantially all of a line of
business or division of any Person, (b) acquisition of all or substantially all
of the Equity Interests of any Person, or otherwise causing such Person to
become a Subsidiary of any Borrower, or (c) merger or consolidation or any other
combination with any Person.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    “Acquisition Consideration”
means, with respect to any Acquisition, the total amount of cash and noncash
consideration (as determined under GAAP) paid by or on behalf of the Borrower
and its Subsidiaries for such Acquisition.

     

    “Acquisition Documents” means,
with respect to any Acquisition, collectively, the purchase agreement and all
other material agreements and documents required to be entered into or delivered
pursuant thereto or in connection with any Acquisition permitted under Section
8.08(b), each in the form delivered to the Administrative Agent and as amended
as permitted hereunder.

     

    “Adjusted Acquisition Consideration”
means, with respect to any Acquisition, the total cash and noncash consideration
(including the fair market value of all Equity Interests issued or transferred
to the sellers thereof, and the aggregate amounts paid or to be paid under
noncompete, consulting and other affiliated agreements with, the sellers
thereof) paid by or on behalf of the Borrower and its Subsidiaries for any such
Acquisition.

     

    “Administrative Agent” has the
meaning set forth in the preamble.

     

    “Administrative Agent’s Office”
means the Administrative Agent’s address and, as appropriate, account as set
forth in Section
12.01, or such other address or account as the Administrative Agent may
from time to time notify to the Borrower and the Lenders.

     

    “Administrative Questionnaire”
means, with respect to any Lender, the administrative questionnaire, in the form
provided to such Lender by the Administrative Agent, which is duly completed and
submitted by such Lender to the Administrative Agent.

     

    “Affiliate” of any Person means
any Person directly or indirectly Controlled by, Controlling or under common
Control with such first Person.

     

    “Agent Parties” has the meaning
set forth in Section
12.01(c).

     

    “Agreement” means this Loan
Agreement.

     

    “Amended and Restated Term
Note” has the meaning set forth in Section
2.07(b).

     

    “Anti-Terrorism Laws” means
laws relating to terrorism or money laundering, including the Executive Order
and the Patriot Act.

     

    “Applicable Lending Office”
means, for each Lender, the lending office of such Lender (or an Affiliate
thereof) on such Lender’s Administrative Questionnaire or such other offices of
such Lender (or of an Affiliate thereof) as such Lender may from time to time
specify in writing to the Administrative Agent and the Borrower as the office by
which its Loans are to be made and maintained.

     

    “Applicable
Law” means, in relation to any Person or its Property, statutes and rules
and regulations thereunder and interpretations thereof by any Governmental
Authority charged with the administration or the interpretation thereof, and
orders, requests, directives, instructions and notices of any Governmental
Authority, in each case, applicable to and binding upon such Person or any of
its Property and having the force of law.

     

    
      
         

      

      
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2

        
          

        

      

      
         

      

    

     

    “Applicable Margin” means
one-half of one percent (0.50%) per annum.

     

    “Appraisal Report” means, as of
any date, the most recently completed appraisal received by the Administrative
Agent, in form and scope reasonably satisfactory to the Administrative Agent, of
the Borrower Group’s Accounts and Inventory by a third-party appraiser selected
by the Administrative Agent.

     

    “Approved Fund” means any Fund
that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or
(c) an entity or an Affiliate of an entity that administers or manages a
Lender.

     

    “Assignee Group” means two or
more Eligible Assignees that are Affiliates of one another or two or more
Approved Funds managed by the same investment advisor.

     

    “Assignment and Acceptance”
means an assignment and acceptance entered into by a Lender and an Eligible
Assignee (with the consent of any party that is required under Section 12.04),
and accepted by the Administrative Agent, in a form approved by the
Administrative Agent.

     

    “Availability Reserves” means
the LC Reserves, Inventory Reserves and such other reserves as the Majority
Lenders from time to time determine in their Permitted Discretion as being
appropriate to reflect the impediments to the Lenders’ ability to realize upon
the Collateral, as specified to the Borrower through the Administrative
Agent.  Without limiting the generality of the foregoing, Availability
Reserves may include (but are not limited to) reserves based on the following
(without duplication of exclusions made based on the eligibility criteria
specified in the definitions of “Eligible Accounts Receivable” and “Eligible
Inventory”):  (a) returns, rebates, discounts, allowances and customer
credits, (b) payables (based upon payables which are 120 days or more past due)
and actual recent collection history, (c) customer deposits, (d) taxes and other
governmental charges, including tax Liens, ad valorem, personal property, sales,
and other taxes which may have priority over the security interests of the
Administrative Agent in the Collateral, (e) held or post-dated checks issued by
Borrower, (f) any judgment lien against Borrower or Collateral, (g) Borrower’s
failure to pay when due and payable indebtedness owing to any trade creditor,
(h) sums that the Borrower or any other Obligor is required to pay and has
failed to pay under any Financing Document and (i) other reserves deemed
necessary by the Majority Lenders in their reasonable business judgment, based
on recommendations and/or reports by a third-party (unaffiliated with any
Lender) appraiser selected by the Administrative Agent.

    

      “Base Rate” means, for any day,
a fluctuating rate per annum equal to the rate of interest in effect for such
day as publicly announced from time to time by Middlesex as its “prime
rate.”  The “prime rate” is a rate set by Middlesex based upon various
factors including Middlesex’s costs and desired return, general economic
conditions and other factors, and is used as a reference point for pricing some
loans, which may be priced at, above, or below such announced
rate.  Any change in such rate announced by Middlesex shall take
effect at the opening of business on the day specified in the announcement of
such change.

    

     

    
      
         

      

      
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3

        
          

        

      

      
         

      

    

     

    “Board” means the Board of
Governors of the Federal Reserve System of the United States of
America.

     

    “Borrower” has the meaning set
forth in the preamble.

     

    “Borrower Group” means,
collectively, the Borrower and its Subsidiaries.

     

    “Borrowing” means all Loans of
the same Class made on the same date.

     

    “Borrowing Base” means, as of
any date of determination:  (a) an amount equal to 80% of Eligible
Accounts Receivable, plus (b) an amount
equal to 50% of Governmental Accounts that satisfy all of the criteria (except
for clause (k) of the definition of “Eligible Accounts Receivable”) to be
Eligible Accounts Receivable, plus (c) an amount
equal to the Eligible Inventory Advance Rate of Eligible Inventory, minus (d) the
aggregate amount of the Availability Reserves.

     

    “Borrowing Base Certificate”
means a certificate in the form of Exhibit
C.

     

    “Business Day” means any day
excluding Saturday, Sunday and any other day on which commercial banks are
authorized or required to close in Massachusetts.

     

    “Capital Expenditures” means,
for any period, to the extent capitalized in accordance with GAAP, expenditures
of the Borrower Group for assets that are classified as capital expenditures on
the balance sheet of the Borrower Group in accordance with GAAP including, but
not limited to expenditures to acquire, develop or construct fixed assets,
plant, equipment and software (including renewals, improvements and
replacements, but excluding (i) repairs or replacements using Net Available
Proceeds and (ii) any assets to the extent acquired with the proceeds of capital
contributions) during such period computed in accordance with GAAP.

     

    “Capital Lease Obligations”
means, for any Person, all obligations of such Person to pay rent or other
amounts under a lease of (or other agreement conveying the right to use)
Property to the extent such obligations are required to be classified and
accounted for as a capital lease on a balance sheet of such Person under GAAP,
and, for purposes of this Agreement, the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with GAAP.

     

    “Cash Management Agreement”
means any agreement to provide cash management services, including treasury,
depository, overdraft, credit or debit card, electronic funds transfer and other
cash management arrangements.

     

    “Cash Management Bank” means
any Person that, at the time it enters into a Cash Management Agreement, is a
Lender or an Affiliate of a Lender, in its capacity as a party to such Cash
Management Agreement.

     

    
      
         

      

      
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    “Casualty Event” means, with
respect to any Property of any Person, any loss of or damage to, or any
condemnation or other taking of, such Property for which such Person or any of
its Subsidiaries receives insurance proceeds, or proceeds of a condemnation
award or other compensation.  The term Casualty Event shall also
include payment under any key person life insurance policy.

     

    “Change in Control” means an
event or series of events by which:

     

    (a)           any
“person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, but excluding any employee benefit plan of such
person or its subsidiaries, and any person or entity acting in its capacity as
trustee, agent or other fiduciary or administrator of any such plan), becomes
the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities
Exchange Act of 1934, except that a person or group shall be deemed to have
“beneficial ownership” of all securities that such person or group has the right
to acquire, whether such right is exercisable immediately or only after the
passage of time (such right, an “option right”)), directly or indirectly, of
thirty-five percent (35%) or more of the equity
securities of the Borrower entitled to vote for members of the board of
directors or equivalent governing body of the Borrower on a fully-diluted basis
(and taking into account all such securities that such “person” or “group” has
the right to acquire pursuant to any option right); or

     

    (b)           during
any period of 12 consecutive months, a majority of the members of the board of
directors or other equivalent governing body of the Borrower cease to be
composed of individuals (i) who were members of that board or equivalent
governing body on the first day of such period, (ii) whose election or
nomination to that board or equivalent governing body was approved by
individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body or (iii) whose election or nomination to that board or other equivalent
governing body was approved by individuals referred to in clauses (i) and (ii)
above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body (excluding, in the case of
both clause (ii) and clause (iii), any individual whose initial nomination for,
or assumption of office as, a member of that board or equivalent governing body
occurs as a result of an actual or threatened solicitation of proxies or
consents for the election or removal of one or more directors by any person or
group other than a solicitation for the election of one or more directors by or
on behalf of the board of directors); or

     

    (c)           any
Person or two or more Persons acting in concert shall have acquired by contract
or otherwise, or shall have entered into a contract or arrangement that, upon
consummation thereof, will result in its or their acquisition of the power to
exercise, directly or indirectly, Control over the management or policies of the
Borrower, or Control over the equity securities of the Borrower entitled to vote
for members of the board of directors or equivalent governing body of the
Borrower on a fully-diluted basis (and taking into account all such securities
that such Person or Persons have the right to acquire pursuant to any option
right) representing thirty-five percent (35%) or more of the combined
voting power of such securities; or

     

     (d)          except
as otherwise expressly permitted under this Agreement or with the Majority
Lenders’ prior written consent, the Borrower shall cease, directly or
indirectly, to own legally and beneficially all (other than directors’
qualifying shares and the like) of the Equity Interests in, or otherwise
Control, its Subsidiaries.

     

    
      
         

      

      
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    “Change in Law” means the
occurrence, after the date of this Agreement, of any of the following: (a) the
adoption or taking effect of any law, rule, regulation or treaty, (b) any change
in any law, rule, regulation or treaty or in the administration, interpretation
or application thereof by any Governmental Authority or (c) the making or
issuance of any request, guideline or directive (whether or not having the force
of law) by any Governmental Authority.

     

    “Class”, when used to refer to
any Commitment, Loan or Borrowing, refers to whether the Commitment, Loan or
Borrowing is a Revolving or Term Commitment, Loan or Borrowing,
respectively.

     

    “Closing Date” means the first
date on which all the conditions precedent in Section 5.01 are
satisfied.

     

    “Code” means the Internal
Revenue Code of 1986, as amended.

     

    “Collateral” means all of the
“Collateral” referred to in the Security Documents and all of the other Property
that is or is intended under the terms of the Security Documents to be subject
to Liens in favor of the Administrative Agent for the benefit of the Secured
Parties.

     

    “Collateral Access Agreement”
has the meaning set forth in the Security Agreement.

     

    “Collateral Account” has the
meaning set forth in the Security Agreement.

     

    “Commerce Bank” means Commerce
Bank and Trust Company.

     

    “Commitments” means a Revolving
Commitment or Term Commitment, or any combination thereof, as the context
requires.

     

    “Compliance Certificate” means
a compliance certificate in substantially the form of Exhibit
D.

     

    “Consolidated Debt Service Coverage
Ratio” means, as of any date of determination, the ratio of:

     

    (a)           (1)
Consolidated EBITDA minus (2) taxes paid
in cash minus
(3) Unfinanced Capital Expenditures minus (4) dividends
and distributions actually made in cash minus (5) the amount
of Investments made in cash by (and not repaid in cash to) the Borrower to any
third parties (other than the Borrower’s Wholly Owned Subsidiaries) in
compliance with Section 8.07; to

     

    (b)           cash
Consolidated Interest Expense plus the current
maturity of long-term Indebtedness (including the principal component of any
payments in respect of Capital Lease Obligations) as scheduled, in each
case, of or by the Borrower and its Subsidiaries for the most recently completed
Measurement Period.

     

    
      
        
        

      

      
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    “Consolidated EBITDA” means, at
any date of determination, an amount equal to Consolidated Net Income of the
Borrower and its Subsidiaries on a consolidated basis for the most recently
completed Measurement Period plus (a) the
following to the extent deducted in calculating such Consolidated Net
Income:  (i) Consolidated Interest Expense, (ii) the provision for
Federal, state, local and foreign income taxes payable, (iii) depreciation and
amortization expense, (iv) non-cash adjustments arising by reason of the
application of FASB Statement 142 (or its successor) (relating to changes in
accounting for the amortization of good will and certain other intangibles) and
accounting principles relating to stock based compensation expenses, (v)
extraordinary or non-recurring losses, (vi) with the Administrative Agent’s
prior written consent (in its reasonable discretion), other expenses reducing
such Consolidated Net Income which do not represent a cash item in such period
or any future period and (vii) with the Administrative Agent’s prior written
consent (in its reasonable discretion), cost savings from Acquisitions made in
compliance with Section 8.08 (in each case of or by the Borrower and its
Subsidiaries for such Measurement Period) and minus (b) the
following to the extent included in calculating such Consolidated Net
Income:  (i) Federal, state, local and foreign income tax credits, and
(ii) all non-cash items increasing Consolidated Net Income (in each case of or
by the Borrower and its Subsidiaries for such Measurement Period).

     

    “Consolidated Interest Expense”
means, for any Measurement Period, the sum of (a) all interest, premium
payments, debt discount, fees, charges and related expenses in connection with
borrowed money (including capitalized interest) or in connection with the
deferred purchase price of assets, in each case to the extent treated as
interest in accordance with GAAP, (b) all interest paid or payable with respect
to discontinued operations and (c) the portion of rent expense under Capital
Lease Obligations that is treated as interest in accordance with GAAP, in each
case, of or by the Borrower and its Subsidiaries on a consolidated basis for the
most recently completed Measurement Period.

     

    “Consolidated Net Income”
means, at any date of determination, the net income (or loss) of the Borrower
and its Subsidiaries on a consolidated basis for the most recently completed
Measurement Period; provided that
Consolidated Net Income shall exclude extraordinary gains and extraordinary
losses for such Measurement Period.

     

    “Consolidated Senior Leverage
Ratio” means, as of any date of determination, the ratio of (a) the sum
of (1) the aggregate outstanding principal amount of the Loans as of such date
plus (2) the aggregate
LC Exposures of all Lenders as of such date to (b) Consolidated
EBITDA, in each case of the Borrower and its Subsidiaries on a consolidated
basis for the most recently completed Measurement Period.

     

    “Control” (including, with its
correlative meanings, “Controlled by” and “under common Control with”) means
possession, directly or indirectly, of the power to direct or cause the
direction of management or policies (whether through ownership of securities or
other ownership interests, by contract or otherwise) of any Person.

     

    
      
         

      

      
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    “Critical Default” means any
Default, except for an Event of Default specified in Section 9.01(e) that
with notice or lapse of time or both, in accordance with Article IX, would
become an Event of Default.

     

    “Current Assets” means, at any
time, the consolidated current assets (other than cash and cash equivalents) of
the Borrower Group.

     

    “Current Casualty Event” has
the meaning set forth in Section
3.04(b).

     

    “Current Liabilities” means, at
any time, the consolidated current liabilities (other than the current portion
of the Secured Obligations) of the Borrower Group.

     

     “Default” means an Event of
Default or an event that with notice or lapse of time or both, in accordance
with Article
IX, would, unless cured or waived, become an Event of
Default.

     

    “Disposition” means any sale,
assignment, transfer or other disposition of any Property (whether now owned or
hereafter acquired) by any Obligor or any of its Subsidiaries to any other
Person, excluding any sale, assignment, transfer or other disposition of any
Property sold or disposed of in the ordinary course of business.

     

     “Eligible Accounts Receivable”
means Accounts of the Borrower and its Subsidiaries subject to the Lien of the
Security Documents, the value of which shall be determined by taking into
consideration, among other factors, their book value determined in accordance
with GAAP; provided, however, that none of the following classes of Accounts
shall be deemed to be Eligible Accounts Receivable:

     

    (a)           Accounts
that do not arise out of sales of goods or rendering of services in the ordinary
course of the Borrower’s or the relevant Subsidiary’s business;

     

    (b)           Accounts
payable other than in U.S. dollars;

     

    (c)           Accounts
owing from any Person that is an Affiliate of the Borrower;

     

    (d)           Accounts
(other than Governmental Accounts) more than 90 days past original invoice date;
and Governmental Accounts more than 120 days past original invoice
date;

     

    (e)           Accounts
(other than Governmental Accounts) owing from any Person from which an aggregate
amount of more than 35% of the Accounts owing therefrom is more than 90 days
past original invoice date; and Governmental Accounts owing from any Person from
which an aggregate amount of more than 35% of the Accounts owing therefrom is
more than 120 days past original invoice date;

     

    (f)      
     Accounts owing from any Person that (i) has
disputed liability for any Account owing from such Person or (ii) has otherwise
asserted any claim, demand or liability against the Borrower or any of its
Subsidiaries, whether by action, suit, counterclaim or otherwise; provided that
for purposes of subclauses (f)(i) and (f)(ii), such Accounts shall be excluded
only to the extent of the amounts being disputed, claimed or demanded by such
Person at any date of determination;

    
      
         

      

      
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    (g)           Accounts
owing from any Person that shall take or be the subject of any action or
proceeding of a type described in Sections 9.01(h), (i) or (j);

     

    (h)           Accounts
(i) owing from any Person that is also a supplier to or creditor of the Borrower
or any of its Subsidiaries or (ii) representing any manufacturer’s or supplier’s
credits, discounts, incentive plans or similar arrangements entitling the
Borrower or any of its Subsidiaries to discounts on future purchase therefrom,
in each case in clauses (i) and (ii) to the extent that such Accounts may be
offset or discounted by amounts owing by the Borrower or any of its Subsidiaries
to the relevant account debtor;

     

    (i)      
     Accounts arising out of sales to account debtors
outside the United States, unless (i) such Accounts are fully backed by an
irrevocable letter of credit or credit insurance on terms, and issued by a
financial institution or insurer, acceptable to the Administrative Agent and
such irrevocable letter of credit or insurance policy is in the possession of
the Administrative Agent or (ii) such Accounts arise out of sales to the foreign
account debtors listed on Schedule D or are
otherwise approved by the Administrative Agent at its option;

     

    (j)        
   Accounts arising out of sales on a bill-and-hold, guaranteed
sale, sale-or-return, sale on approval or consignment basis or subject to any
right of return, setoff or charge back;

     

    (k)           Governmental
Accounts (unless the Borrower or its relevant Subsidiary shall have satisfied
the requirements of the Assignment of Claims Act of 1940, and any similar state
legislation, and the Administrative Agent is satisfied as to the absence of
setoffs, counterclaims and other defenses on the part of the account debtor of
such Governmental Accounts), if such Governmental Accounts owing from such
account debtor exceed $100,000;

     

    (l)         
  Accounts with respect to which the representations and warranties
set forth in Section 6.5 of the Security Agreement applicable to Accounts are
not correct;

     

    (m)           Accounts
with respect to which the account debtor is located in any state that requires a
creditor to file a business activity report or similar document in order to
bring suit or otherwise enforce its remedies against such account debtor in the
courts or through any judicial process of such state), unless the Borrower has
qualified to do business in such state, or has filed a business activities
report with the applicable division of taxation, the department of revenue, or
with such other state offices, as appropriate, for the then-current year, or is
exempt from such filing requirement, or such failure to so qualify or file is,
in the Administrative Agent’s Permitted Discretion, capable of being remedied
without any material delay or material cost; and

     

    (n)           Accounts
in respect of which the Security Agreement, after giving effect to the related
filings of financing statements that have then been made, if any, does not or
has ceased to create a valid and perfected first priority lien or security
interest in favor of the Administrative Agent, on behalf of the Secured Parties,
securing the Secured Obligations.

     

    “Eligible Assignee” means (a) a
Lender; (b) an Affiliate of a Lender; (c) an Approved Fund; and (d) any other
Person (other than a natural person) approved by (i) the Administrative Agent
and each other Lender, (ii) unless a Specified Default has occurred, the
Borrower and (iii) unless a Default has occurred and so long as Commerce Bank is
one of only two Lenders and has at least 40% of the sum of the aggregate
outstanding principal amount of the Loans and aggregate Commitments, Commerce
Bank (each such approval not to be unreasonably withheld or delayed); provided
that notwithstanding the foregoing, “Eligible Assignee” shall not include any
Obligor or any Affiliate or Subsidiary thereof.

    
      
         

      

      
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     “Eligible Inventory” means
Inventory consisting of first quality saleable goods (including raw materials
and intermediate Inventory) held for sale in the ordinary course of business of
the Obligors that complies with each of the representations and warranties
respecting Eligible Inventory made by the Obligors in this Agreement and the
Security Agreement, and that is not excluded as ineligible by virtue of the one
or more of the criteria set forth below; provided, that such criteria may be
fixed and revised from time to time by the Majority Lenders (through the
Administrative Agent) in their Permitted Discretion to address the results of
any audit or appraisal performed from time to time after the date
hereof.  An item of Inventory shall not be included in Eligible
Inventory if:

     

    (a)           an
Obligor does not have good, valid, and marketable title thereto;

     

    (b)           it
is not subject to a valid and perfected, first-priority Lien in favor of the
Administrative Agent, subject to no other Liens except Permitted
Liens;

     

    (c)           it
is not located at (1) one of the locations in the United States set forth on
Schedule B or (2) a location subject to a Collateral Access Agreement and it is
segregated or otherwise separately identifiable from goods of others, if any,
stored on the premises, unless it is in transit from one such location directly
to another such location;

     

    (d)           it
is located on real property leased by an Obligor or in a contract warehouse, in
each case, unless it is subject to a Collateral Access Agreement executed by the
lessor, warehouseman, or other third party, as the case may be, and unless it is
segregated or otherwise separately identifiable from goods of others, if any,
stored on the premises;

     

    (e)           it
consists of goods returned or rejected by an Obligor’s customers;

     

    (f)       
    it consists of goods that are obsolete or unusable, or
are slow moving, restrictive or custom items, work-in-process (as distinguished
from intermediate Inventory), or goods that constitute spare parts, supplies
used or consumed in the Obligors’ business, bill and hold goods, defective
goods, “seconds,” or Inventory acquired on consignment;

     

    (g)           it
fails to meet all standards imposed by any Governmental Authority having
regulatory authority over such Inventory or its use or sale;

     

    (h)           it
is subject to any licensing, patent, royalty, trademark, trade name or copyright
agreement with any third party from which the Borrower or any of its
Subsidiaries has received notice of a dispute in respect of any such agreement,
which dispute has a reasonable likelihood of being determined adversely to the
Borrower or any of its Subsidiaries; or

     

    (i)       
    it does not satisfy any other requirements deemed
necessary by the Majority Lenders in their reasonable business judgment and
which are customary either in the commercial finance industry or in the lending
practices of the Majority Lenders, based on reports from a third-party appraiser
satisfactory to the Administrative Agent.

    
      
         

      

      
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    “Eligible Inventory Advance
Rate” means the lower of (a) forty percent (40%) and (b) the “Net
Eligible Inventory Advance Rate” set forth in the Appraisal Report.

     

    “Environmental Claim” means,
with respect to any Person, any written or oral notice, claim, demand or other
communication (collectively, a “claim”) by any other Person alleging or
asserting such Person’s liability for investigatory costs, cleanup costs,
governmental response costs, damages to natural resources or other Property,
personal injuries, fines or penalties arising out of, based on or resulting from
(i) the presence, or Release into the environment, of any Hazardous Material at
any location, whether or not owned by such Person, or (ii) circumstances forming
the basis of any violation, or alleged violation, of any Environmental
Law.  The term “Environmental Claim” shall include, without
limitation, any claim by any governmental authority for enforcement, cleanup,
removal, response, remedial or other actions or damages pursuant to any
applicable Environmental Law, and any claim by any third party seeking damages,
contribution, indemnification, cost recovery, compensation or injunctive relief
resulting from the presence of Hazardous Materials or arising from alleged
injury or threat of injury to health, safety or the environment.

     

    “Environmental Laws” means any
and all present and future Federal, state, local and foreign laws, rules or
regulations, and any orders or decrees, in each case as now or hereafter in
effect, relating to the regulation or protection of human health, safety or the
environment or to emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals or toxic or hazardous substances or wastes
into the indoor or outdoor environment, including, without limitation, ambient
air, soil, surface water, ground water, wetlands, land or subsurface strata, or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of pollutants, contaminants, chemicals
or toxic or hazardous substances or wastes.

     

    “Equipment” has the meaning
specified in Section 1.1 of the Security Agreement.

     

    “Equity Interest” means, as to
any Person, the stock (common, preferred or in any other manner designated),
limited liability company membership or other interest, or any other right or
interest (or right to acquire any such right or interest) however designated,
evidencing ownership interests in such Person.

     

    “Equity Issuance” means (a) any
issuance or sale by the Borrower or any of its Subsidiaries after the Closing
Date of (i) any of its Equity Interests, (ii) any warrants or options
exercisable in respect of its Equity Interests (other than any warrants or
options issued to directors, officers or employees of the Borrower or any of its
Subsidiaries pursuant to employee benefit plans established in the ordinary
course of business or existing on the date hereof and disclosed to the Lenders
in writing and any Equity Interests of the Borrower issued upon the exercise of
such warrants or options) or (iii) any other security or instrument representing
an equity interest (or the right to obtain any equity interest) in the Borrower
or any of its Subsidiaries or (b) the receipt by the Borrower or any of its
Subsidiaries after the Closing Date of any capital contribution (whether or not
evidenced by any equity security issued by the recipient of such contribution);
provided that
Equity Issuance shall not include (x) any such issuance or sale by any
Subsidiary of the Borrower to the Borrower or any Wholly Owned Subsidiary of the
Borrower or (y) any capital contribution by the Borrower or any Wholly Owned
Subsidiary of the Borrower to any Subsidiary of the Borrower.

    
      
         

      

      
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    “Equity Rights” means, with
respect to any Person, any subscriptions, options, warrants, commitments,
preemptive rights or agreements of any kind (including, without limitation, any
shareholders’ or voting trust agreements) for the issuance, sale, registration
or voting of, or securities convertible into, any additional shares of Equity
Interests of any class, or partnership or other ownership interests of any type
in, such Person.

     

    “ERISA” means the Employee
Retirement Income Security Act of 1974, as amended from time to
time.

     

    “ERISA Affiliate” means any
corporation or trade or business that is a member of any group of organizations
(i) described in Section 414(b) or (c) of the Code of which the Borrower is a
member and (ii) solely for purposes of potential liability under Section
302(c)(l1) of ERISA and Section 412(c)(l 1) of the Code and the lien created
under Section 302(f) of ERISA and Section 412(n) of the Code, described in
Section 414(m) or (o) of the Code of which the Borrower is a
member.

     

    “ERISA Event” means any of the
following events or conditions:

     

    (a)           any
reportable event, as defined in Section 4043(b) of ERISA and the regulations
issued thereunder, with respect to a Plan, as to which the PBGC has not by
regulation waived the requirement of Section 4043(a) of ERISA that it be
notified within 30 days of the occurrence of such event (provided that a failure
to meet the minimum funding standard of Section 412 of the Code or Section 302
of ERISA, including, without limitation, the failure to make on or before its
due date a required installment under Section 412(m) of the Code or Section
302(e) of ERISA, shall be a reportable event regardless of the issuance of any
waivers in accordance with Section 412(d) of the Code); and any request for a
waiver under Section 412(d) of the Code for any Plan;

     

    (b)           the
distribution under Section 4041 of ERISA of a notice of intent to terminate any
Plan or any action taken by the Borrower or an ERISA Affiliate to terminate any
Plan;

     

    (c)           the
institution by the PBGC of proceedings under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan, or the
receipt by the Borrower or any ERISA Affiliate of a notice from a Multiemployer
Plan that such action has been taken by the PBGC with respect to such
Multiemployer Plan;

     

    (d)           the
complete or partial withdrawal from a Multiemployer Plan by the Borrower or any
ERISA Affiliate that results in liability under Section 4201 or 4204 of ERISA
(including the obligation to satisfy secondary liability as a result of a
purchaser default) or the receipt by the Borrower or any ERISA Affiliate of
notice from a Multiemployer Plan that it is in reorganization or insolvency
pursuant to Section 4241 or 4245 of ERISA or that it intends to terminate or has
terminated under Section 4041A of ERISA;

    
      
         

      

      
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    (e)           the
institution of a proceeding by a fiduciary of any Multiemployer Plan against the
Borrower or any ERISA Affiliate to enforce Section 515 of ERISA, which
proceeding is not dismissed within 30 days; or

     

    (f)           the
adoption of an amendment to any Plan that, pursuant to Section 401(a) (29) of
the Code or Section 307 of ERISA, would result in the loss of tax-exempt status
of the trust of which such Plan is a part if the Borrower or an ERISA Affiliate
fails to timely provide security to the Plan in accordance with the provisions
of such Sections.

     

    “Event of Default” has the
meaning set forth in Section
9.01.

     

    “Excess Cash Flow” means, for
any fiscal year of the Borrower, the excess (if any) of (a) the sum, without
duplication, of (i) Consolidated EBITDA for such fiscal year and (ii) reductions
to non-cash working capital of the Borrower Group for such fiscal year (i.e.,
the decrease, if any, in Current Assets minus Current Liabilities from the
beginning to the end of such fiscal year) over (b) the sum (for
such fiscal year), without duplication, of (i) Consolidated Interest Expense
actually paid in cash by the Borrower and its Subsidiaries, (ii) scheduled
principal repayments, to the extent actually made, of Term Loans pursuant to
Section 3.01(b), (iii) voluntary prepayments, to the extent actually made, of
Term Loans pursuant to Section 3.03(b), (iv) all income taxes actually paid in
cash by the Borrower and its Subsidiaries,  (v) Capital Expenditures
actually made by the Borrower and its Subsidiaries in such fiscal year and (vi)
additions to non-cash working capital for such fiscal year (i.e., the increase,
if any, in Current Assets minus Current Liabilities from the beginning to the
end of such fiscal year).

     

    “Excess Funding Guarantor” has
the meaning set forth in Section
4.09.

     

    “Excess Payment” has the
meaning set forth in Section
4.09.

     

    “Executive Order” means
Executive Order No. 13224 on Terrorist Financing, effective September 24,
2001.

     

    “Excluded Taxes” has the
meaning set forth in Section 10.02(a).

     

    “Existing LC” means the LC no.
10-112 dated September 22, 2010 issued by the LC Bank to Birchwood
Fortune-SPVEF, LLC, as the beneficiary, for account of the Borrower, in the
stated amount of $46,088.00.

     

    “Federal Funds Rate” means, for
any day, the rate per annum equal to the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published by the Federal
Reserve Bank of New York on the Business Day next succeeding such day; provided
that (a) if such day is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (b) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for such
day shall be the average rate (rounded upward, if necessary, to a whole multiple
of 1/100 of 1%) charged to Middlesex on such day on such transactions as
determined by the Administrative Agent.

    
      
         

      

      
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    “Fee Letter” means the fee
letter agreement dated as of the date hereof among the Obligors and the
Administrative Agent.

     

    “Financing Documents”
means:

     

    (a)           this
Agreement;

     

    (b)          the
Notes;

     

    (c)           the
LC Documents;

     

    (d)          the
Guaranties;

     

    (e)       
   the Security Documents;

     

    (f)           the
Post-Closing Agreement;

     

    (f)           the
Fee Letter; and

     

    (g)          any
other document, instrument or agreement now or hereafter entered into by the
Borrower or any other Obligor in connection with the Loans, the Secured
Obligations or the Collateral.

     

    “Five-Year Reset Rate” means a
rate per annum equal to the higher of (a) the two-year Treasury rate plus 3.50% per annum
and (b) a fixed rate of 5.49% per annum.

     

    “Foreign Lender” means any
Lender that is organized under the laws of a jurisdiction other than that in
which the Borrower is resident for tax purposes (including such a Lender when
acting in the capacity of the LC Bank).  For purposes of this
definition, the United States, each State thereof and the District of Columbia
shall be deemed to constitute a single jurisdiction.

     

    “Fund” means any Person (other
than a natural person) that is (or will be) engaged in making, purchasing,
holding or otherwise investing in commercial loans and similar extensions of
credit in the ordinary course of its business.

     

    “GAAP” means generally accepted
accounting principles in the United States of America, applied on a consistent
basis from prior reporting periods, if applicable.

     

    “Governmental Accounts” means
Accounts owing from an account debtor that is an agency, department or
instrumentality of the United States or any state thereof.

     

    “Governmental Approval” means
any action required to show satisfaction of an applicable Governmental
Requirement including any permission, permit, certificate, license, approval,
waiver, variance or authorization by a Governmental Authority.

     

    “Governmental Authority”
includes the country, the state, county, city and political subdivisions in
which any Person or such Person’s Property is located or which exercises valid
jurisdiction over any such Person or such Person’s Property, and any court,
agency, department, commission, board, bureau or instrumentality of any of them
including monetary authorities which exercises valid jurisdiction over any such
Person or such Person’s Property.

    
      
         

      

      
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    “Governmental Requirement”
means any law, statute, code, ordinance, common law, order, determination, rule,
regulation, judgment, decree, injunction, franchise, permit, certificate,
license, authorization or other directive or requirement (whether or not having
the force of law), including, without limitation, Environmental Laws, energy
regulations and occupational, safety and health standards or controls, of any
Governmental Authority.

     

    “Guarantee” means a guarantee,
an endorsement, a contingent agreement to purchase or to furnish funds for the
payment or maintenance of, or otherwise to be or become contingently liable
under or with respect to, the Indebtedness, other obligations, net worth,
working capital or earnings of any Person, or a guarantee of the payment of
dividends or other distributions upon the stock or equity interests of any
Person, or an agreement to purchase, sell or lease (as lessee or lessor)
Property, products, materials, supplies or services primarily for the purpose of
enabling a debtor to make payment of such debtor’s obligations or an agreement
to assure a creditor against loss, and including, without limitation, causing a
bank or other financial institution to issue a letter of credit or other similar
instrument for the benefit of another Person, (but excluding endorsements for
collection or deposit in the ordinary course of business and product and other
similar warranties given in the ordinary course of business).  The
terms “Guarantee” and “Guaranteed” used as verbs have the correlative
meanings.

     

    “Guarantee Assumption
Agreement” means a Guarantee Assumption Agreement, in form and substance
reasonably satisfactory to the Administrative Agent, by an entity that, pursuant
to Section
7.10, is required to become a “Guarantor” hereunder in favor of the
Administrative Agent, LC Bank and Lenders.

     

    “Guaranteed Obligations” has
the meaning set forth in Section
4.01.

     

    “Guarantors” has the meaning
set forth in the Preamble.

     

    “Guaranties” means,
collectively, (a) the Subsidiary Guarantee and (b) each Guarantee Assumption
Agreement delivered pursuant to Section
7.10.

     

    “Hazardous Material” means,
collectively, (a) any petroleum or petroleum products, flammable materials,
explosives, radioactive materials, asbestos, urea formaldehyde foam insulation,
and transformers or other equipment that contain polychlorinated biphenyls
(“PCB’s”), (b) any
chemicals or other materials or substances that are now or hereafter become
defined as or included in the definition of “hazardous substances”, “hazardous
wastes”, “hazardous materials”, “extremely hazardous wastes”, “restricted
hazardous wastes”, “toxic substances”, ‘toxic pollutants”, “contaminants”,
“pollutants” or words of similar import under any Environmental Law and (c) any
other chemical or other material or substance, exposure to which is now or
hereafter prohibited, limited or regulated under any Environmental
Law.

     

    “Hedge Bank” means any Person
that, at the time it enters into a  Hedging Agreement permitted under
this Agreement, is a Lender or an Affiliate of a Lender, in its capacity as a
party to such Hedging Agreement.

    
      
         

      

      
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     “Hedging Agreement” means any
interest rate protection agreement, foreign currency exchange agreement,
commodity price protection agreement or other interest or currency exchange rate
or commodity price hedging arrangement.

     

    “Included Taxes” has the
meaning set forth in Section
10.02(a).

     

    “Indebtedness” means, without
duplication, for any Person: (a) obligations created, issued or incurred by such
Person for borrowed money (whether by loan, the issuance and sale of debt
securities or the sale of Property to another Person subject to an understanding
or agreement, contingent or otherwise, to repurchase such Property from such
Person); (b) obligations of such Person to pay the deferred purchase or
acquisition price of Property or services, other than (1) earnouts and other
contingent payments in connection with any Acquisition, solely to the extent
that such contingent payments are not deemed to be indebtedness under and in
accordance with GAAP, and only if such contingent payments are unsecured, and
(2) trade accounts payable (other than for borrowed money) arising, and accrued
expenses incurred, in the ordinary course of business so long as such trade
accounts payable are payable within 180 days of the date the respective goods
are delivered or the respective services are rendered, or are being disputed in
good faith by appropriate measures and with adequate reserves in accordance with
GAAP; (c) Indebtedness of others secured by a Lien on the Property of such
Person, whether or not the respective indebtedness so secured has been assumed
by such Person but, if such Indebtedness has not been so assumed, only to the
extent of the value of such Property; (d) the maximum amount of all direct or
contingent obligations of such Person arising under letters of credit, bankers’
acceptances, bank guaranties, surety bonds and similar instruments issued or
accepted by banks and other financial institutions for account of such Person;
(e) Capital Lease Obligations of such Person to the extent classified as a
liability on a balance sheet in conformity with GAAP; (f) Indebtedness of others
Guaranteed by such Person; (g) net obligations of such Person under any Hedging
Agreement.  The amount of any net obligation under any Hedging
Agreement on any date shall be deemed to be the Swap Termination Value thereof
as of such date.

     

    “Indemnitee” has the meaning
set forth in Section
12.03(b).

     

    “Information” has the meaning
set forth in Section
12.12(b).

     

    “Initial Term Note” has the
meaning set forth in Section
2.07(b).

     

    “Intangible Assets” means
assets that are considered to be intangible assets under GAAP, including
customer lists, goodwill, computer software, copyrights, trade names,
trademarks, patents, franchises, licenses, unamortized deferred charges,
unamortized debt discount and capitalized research and development
costs.

     

    “Inventory” means, as to any
Person, all “inventory” (as defined in the UCC) now owned or hereafter acquired
by such Person, and all documents of title or other documents representing any
of the foregoing, but excluding all work-in-process.

    
      
         

      

      
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    “Inventory Reserves” means such
reserves as the Majority Lenders determine from time to time in their Permitted
Discretion as being appropriate to reflect the impediments to the Lenders’
ability to realize upon the Collateral.  Without limiting the
generality of the foregoing, Inventory Reserves may include (but are not limited
to) reserves based on the following (without duplication of exclusions made
based on the eligibility criteria specified in the definition of “Eligible
Inventory”):  (a) the extent to which Inventory consists of goods that
(i) are obsolete, slow-moving, restrictive or custom items, bills and hold
goods, defective, damaged, prepared for return to vendor, not first quality
goods, work-in-process or raw materials or (ii) constitute spare parts,
packaging and shipping materials or supplies; (b) seasonality; (c) shrinkage;
(d) imbalance or change in Inventory character, composition or mix; (e)
markdowns; (f) the estimated costs relating to unpaid freight charges,
warehousing or storage charges, taxes, duties, and other similar unpaid costs
associated with the acquisition of Inventory by any Obligor; and (g) the
estimated reclamation claims of unpaid sellers of Inventory sold to any
Obligor.

     

    “Investment” means, for any
Person, (a) the purchase or other acquisition (whether for cash, Property,
services, securities or otherwise) of Equity Interests, bonds, notes,
debentures, partnership or other ownership interests or other securities of any
other Person or any agreement to make such acquisition, (b) the making of any
deposit with, or advance, loan or other extension of credit to, or capital
contribution to, or Guarantee or assumption of debt of, or purchase or other
acquisition of any other debt of or interest in, another Person (including the
purchase of Property from another Person subject to an understanding or
agreement, contingent or otherwise, to resell such Property to such Person), but
excluding any such advance, loan or extension of credit having a term not
exceeding 180 days arising in connection with the sale of inventory, supplies or
services by such Person in the ordinary course of business, or (c) the purchase
or other acquisition (in one transaction or a series of transactions) of assets
of another Person that constitute a business unit or all or a substantial part
of the business of, such Person.

     

    “LC” means any standby letter
of credit issued pursuant to this Agreement and shall include the Existing
LC.

     

    “LC Advance” means, with
respect to each Lender, such Lender’s funding of its participation in any LC
Borrowing in accordance with its Percentage.

     

    “LC Bank” means Middlesex, in
its capacity as an issuer of LCs hereunder.

     

    “LC Borrowing” means an
extension of credit resulting from a drawing under any LC which has not been
reimbursed on the date when made or refinanced as a Revolving
Borrowing.

     

    “LC Disbursement” means a
payment made by the LC Bank pursuant to an LC.

     

    “LC Documents” means, with
respect to any LC, collectively, any application therefor and any other
agreements, instruments, guarantees or other documents (whether general in
application or applicable only to such LC) governing or providing for (a) the
rights and obligations of the parties concerned or at risk with respect to such
LC or (b) any collateral security for any of such obligations.

     

    “LC Exposure” means, at any
time, the sum of (a) the aggregate undrawn face amount of all outstanding LCs at
such time plus
(b) the aggregate amount of all LC Disbursements that have not yet been
reimbursed by or on behalf of the Borrower at such time, including all LC
Borrowings.  The LC Exposure of any Lender at any time shall be its
Percentage of the total LC Exposure at such time.

    
      
         

      

      
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    “LC Reimbursement Obligations”
means, at any time, the obligations of the Borrower then outstanding, or that
may thereafter arise in respect of all LCs then outstanding, to reimburse
amounts paid by the LC Bank in respect of LC Disbursements.

     

    “LC Reserves” means, at any
time, the aggregate LC Exposure of all Lenders at such time that is not fully
secured by cash collateral.

     

    “Lender” shall have the meaning
set forth in the preamble.

     

    “Lender Protective Advances”
has the meaning assigned thereto in Section 3.09.

     

     “Lien” means, with respect to
any Property, any mortgage, lien, pledge, charge, security interest or similar
encumbrance of any kind in respect of such Property.  For purposes of
the Financing Documents, a Person shall be deemed to own subject to a Lien any
Property that it has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, capital lease or other title
retention agreement (other than an operating lease) relating to such
Property.

     

    “Life Insurance Proceeds” means
the aggregate cash proceeds of any key man life insurance policy received by any
Obligor.

     

    “Loans” means, collectively,
the Revolving Loans and Term Loans.

     

    “Majority Lenders” means, at
any time, subject to Section 12.02(b)(v), (a) if there are fewer than three
Lenders, all Lenders, and (b) if there are three or more Lenders, Lenders having
Revolving Exposures, outstanding Term Loans and unused Commitments representing
more than 66-2/3% of the sum of the aggregate Revolving Exposures, outstanding
Term Loans and unused Commitments of all Lenders.

     

    “Margin Stock” means “margin
stock” within the meaning of Regulations T, U and X of the Board.

     

    “Material Adverse Effect” means
(a) a material adverse change in, or a material adverse effect upon, the
operations, business, properties, liabilities (actual or contingent) or
condition (financial or otherwise) of the Borrower and its Subsidiaries taken as
a whole; (b) a material impairment of the rights and remedies of the
Administrative Agent, LC Bank or any Lender under any Financing Document, or of
the ability of any Obligor to perform its obligations under any Financing
Document to which it is a party; or (c) a material adverse effect upon the
legality, validity, binding effect or enforceability against any Obligor of any
Financing Document to which it is a party.

     

    “Material Contract” means, with
respect to any Obligor, the three largest customer contracts to which such
Obligor is a party.

     

    “Material Indebtedness” means
Indebtedness (other than the Loans and LC Reimbursement Obligations) of any one
or more of the Obligors in an aggregate principal amount exceeding
$500,000.

    
      
         

      

      
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    “Maturity Date” means (a) with
respect to the Revolving Commitments and Revolving Loans, the Revolving
Commitment Termination Date, and (b) with respect to the Term Loans, the Term
Maturity Date; provided that, in
each case, if such date is not a Business Day, the Maturity Date shall be the
immediately preceding Business Day.

     

    “Maximum Revolver Amount” means
the lesser of (a) $5,000,000 (as such amount may be reduced or terminated
pursuant to this Agreement) and (b) the Borrowing Base.

     

    “Measurement Period” means, at
any date of determination, the most recently completed four fiscal quarters of
the Borrower.

     

    “Middlesex” means Middlesex
Savings Bank, a Massachusetts banking corporation.

     

    “Multiemployer Plan” means a
multiemployer plan defined as such in Section 3(37) of ERISA to which
contributions have been made by the Borrower or any ERISA Affiliate and that is
covered by Title IV of ERISA.

     

    “Net Available Proceeds”
means:

     

    (i)    
       in the case of any Disposition, the
amount of Net Cash Payments received in connection with such
Disposition;

     

    (ii)           in
the case of any Casualty Event, the aggregate amount of proceeds of insurance,
condemnation awards and other compensation received by the Borrower or any other
Obligor in respect of such Casualty Event net of (A) reasonable out-of-pocket
expenses incurred by the Borrower or its Subsidiaries in connection therewith
and (B) contractually required repayments of Indebtedness to the extent secured
by a Lien on such Property and any income, transfer or other taxes payable by
the Borrower or any of its Subsidiaries in respect of such Casualty Event;
and

     

    (iii)          in
the case of any Equity Issuance or the incurrence of Indebtedness, the aggregate
amount of all cash received by the Borrower and the other Obligors in respect of
such Equity Issuance or incurrence net of underwriting discounts, commissions,
taxes payable in connection with such issuance or incurrence (whether payable at
such time or thereafter), and other reasonable and customary out-of-pocket fees
and expenses incurred by the Borrower or its Subsidiaries in connection
therewith.

     

    “Net Cash Payments” means, with
respect to any Disposition, the aggregate amount of all cash payments, received
by the Borrower and any other Obligors directly or indirectly in connection with
such Disposition; provided that (a) Net
Cash Payments shall be net of (i) the amount of any legal, title and recording
tax expenses, commissions and other reasonable and customary out-of-pocket fees
and expenses (including reasonable and customary investment banking
out-of-pocket fees and expenses) paid by the Obligors in connection with such
Disposition and (ii) any Federal, state and local income or other taxes
estimated to be payable by the Obligors (including any direct or indirect equity
holders thereof) as a result of such Disposition, and (b) Net Cash Payments
shall be net of any repayments by the Obligors of Indebtedness to the extent
that (i) such Indebtedness is secured by a Lien on the Property that is the
subject of such Disposition or (ii) the transferee of (or holder of a Lien on)
such Property requires that such Indebtedness be repaid as a condition to the
purchase of such Property.

    
      
         

      

      
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    “Notes” means, collectively,
Revolving Notes and Term Notes.

     

    “Notice of Borrowing” has the
meaning set forth in Section
2.03(a).

     

    “Obligors” means, collectively,
the Borrower and the Guarantors.

     

    “Other Taxes” has the meaning
set forth in Section
10.02(b).

     

    “Patent Security Agreement”
means the Patent Security Agreement dated as of the date hereof executed by the
Obligors party thereto in favor of the Administrative Agent.

     

    “Patriot Act” means the USA
Patriot Act, Title III of Pub. L. 107-56 (signed into law October 26,
2001).

     

    “PBGC” means the Pension
Benefit Guaranty Corporation or any entity succeeding to any or all of its
functions under ERISA.

     

    “Pension Plan” means any
employee pension benefit plan (including a Multiple Employer Plan or a
Multiemployer Plan) that is maintained or is contributed to by the Borrower and
any ERISA Affiliate and is either covered by Title IV of ERISA or is subject to
the minimum funding standards under Section 412 of the Code.

     

    “Percentage” means, for any
Lender, the ratio (expressed as a percentage) of (a) such Lender’s Revolving
Commitment to (b) the aggregate amount of all Revolving
Commitments.

     

    “Perfection Certificate” means
a certificate in a form approved by the Administrative Agent.

     

    “Permitted Discretion” means a
determination made in good faith and in the exercise of prudent and reasonable
(from the perspective of a secured lender) business judgment.

     

    “Permitted Investments” means
investments in (a) direct obligations of the United States or any agency
thereof, or obligations guaranteed by the United States or any agency thereof,
in each case maturing within 13 months from the date of acquisition thereof, (b)
commercial paper maturing within 13 months from the date of creation thereof
rated at least Al or the equivalent by S&P or P1 or the equivalent by
Moody’s Investors Service, Inc. (“Moody’s”) at the time of the
acquisition thereof, (c) deposits maturing within 13 months from the date of
creation thereof with, including certificates of deposit and banker’s
acceptances issued by, Middlesex or any office located in the United States of
any other bank or trust company which at the time of the acquisition thereof (i)
is organized under the laws of any OECD country, including the United States or
any state thereof or the District of Columbia, (ii) has capital, surplus and
undivided profits aggregating at least $500,000,000 (as of the date of such
bank’s or trust company’s most recent financial reports) and (iii) has a short
term deposit rating of no lower than A2 or P2, as such rating is set forth from
time to time, by S&P or Moody’s, respectively, (d) fully collateralized
repurchase agreements with a term of not more than 30 days for securities
described in clause (a) above and entered into with a financial institution
satisfying the criteria described in clause (c) above; (e) securities with
maturities of 13 months or less from the date of acquisition issued or fully
guaranteed by any state, commonwealth or territory of the United States of
America, or any political subdivision or taxing authority thereof, and rated at
least A by S&P or Moody’s; and (f) Investments, classified in accordance
with GAAP as current assets of the Borrower or any of its Subsidiaries, in money
market or similar funds registered under the Investment Company Act of 1940, as
amended, investing at least 95% of its assets in investments described in
clauses (a), (b), (c) or (e) above and which are administered by financial
institutions having a rating in the highest investment category granted thereby
by S&P or Moody’s at the time of acquisition.

    
      
         

      

      
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    “Permitted Liens” means Liens
permitted under Section
8.02.

     

    “Person” means any natural
person, corporation, limited liability company, trust, joint venture,
association, company, partnership, Governmental Authority or other
entity.

     

    “Plan” means an employee
benefit or other plan established or maintained by the Borrower or any ERISA
Affiliate and that is covered by Title IV of ERISA, other than a Multiemployer
Plan.

     

    “Platform” has the meaning
specified in Section 7.01.

     

    “Post-Closing Agreement” means
the Compliance and Post-Closing Agreement dated as of the date hereof among the
Borrower and Administrative Agent.

     

    “Post-Default Rate” has the
meaning set forth in Section
3.02(b).

     

    “Principal Payment Date” means
the first Business
Day of each calendar month, commencing with April 1, 2012 (or, if the Term
Commitment Termination Date occurs before February 29, 2012, commencing with the
first such date to occur after the Term Commitment Termination Date), and the
Term Maturity Date.

     

    “Pro Rata Share” has the
meaning set forth in Section
4.08.

     

    “Property” or “Properties” means any interest
in any kind of property or asset, whether real, personal or mixed, or tangible
or intangible.

     

    “Public Lender” has the meaning
specified in Section 7.01.

     

    “Quarterly Date” means the last
Business Day of March, June, September and December in each year, commencing
with the first such day after the Closing Date.

     

    “Receivables” means, as at any
date, the unpaid portion of the obligation, as stated on the respective invoice,
of a customer of any Obligor in respect of goods sold and shipped or services
rendered by such Obligor to such customer, net of any credits, rebates or
offsets owed to such customer and also net of any commissions payable to third
parties (and for purposes hereof, a credit or rebate paid by check or draft of
any Obligor shall be deemed to be outstanding until such check or draft shall
have been debited to the account of such Obligor on which such check or draft
was drawn).

     

    
      
         

      

      
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    “Register” has the meaning set
forth in Section 12.04(c).

     

    “Regulation D, T, U or X” means
Regulation D, T, U or X of the Board.

     

    “Regulatory Change” means, with
respect to any Lender, any change after the date hereof in Federal, state or
foreign law or regulations (including Regulation D) or the adoption or making
after such date of any interpretation, directive or request applying to a class
of banks including such Lender of or under any Federal, state or foreign law or
regulations (whether or not having the force of law and whether or not failure
to comply therewith would be unlawful) by any court or governmental or monetary
authority charged with the interpretation or administration
thereof.

     

    “Related Parties” means, with
respect to any Person, such Person’s Affiliates and the partners, directors,
officers, employees, agents and advisors of such Person and of such Person’s
Affiliates.

     

    “Release” means any release,
spill, emission, leaking, pumping, injection, deposit, disposal, discharge,
dispersal, leaching or migration into the indoor or outdoor environment,
including, without limitation, the movement of Hazardous Materials through
ambient air, soil, surface water, ground water, wetlands, land or subsurface
strata.

     

    “Responsible Officer” means,
with respect to any Obligor, the chief executive officer, president, chief
financial officer, treasurer or assistant treasurer of such
Obligor.  Any document delivered hereunder that is signed by a
Responsible Officer of an Obligor shall be conclusively presumed to have been
authorized by all necessary corporate, partnership, shareholder, director,
limited liability company and/or other action on the part of such Obligor, and
such Responsible Officer shall be conclusively presumed to have acted solely on
behalf of such Obligor in his/her capacity as such Responsible Officer (and not
such Person’s individual capacity).  Unless otherwise specified, all
references to a Responsible Officer herein shall mean a Responsible Officer of
the Borrower.

     

    “Restricted Payment” means (a)
dividends (in cash, Property or obligations) on, or other payments or
distributions on account of, or the setting apart of money for a sinking or
other analogous fund for, or the purchase, redemption, retirement or other
acquisition of, any shares of any class of Equity Interests of the Borrower or
of any warrants, options or other rights to acquire the same (or to make any
payments to any Person, such as “phantom stock” payments, where the amount
thereof is calculated with reference to the fair market or equity value of the
Borrower or any of its Subsidiaries), but excluding dividends or distributions
payable solely in shares of Equity Interests of the Borrower; (b) any payment of
any management fee or expense, investment banking fee or similar amount to any
Affiliate of the Borrower; and (c) any payment to the holders of any
Indebtedness subordinated to the repayment of the Loans.

     

    
      
         

      

      
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    “Revolving Commitment” means,
as to each Lender, the commitment of such Lender to make Revolving Loans and to
acquire participations in LCs hereunder in an aggregate principal or face amount
at any one time outstanding up to but not exceeding the amount set opposite the
name of such Lender on Schedule A under the
caption “Revolving Commitment” or, in the case of a Person that becomes a Lender
pursuant to an assignment permitted under Section 12.04(b), as
specified in the respective Assignment and Acceptance pursuant to which such
assignment is effected (as the same may be reduced at any time pursuant to this
Agreement).

     

    “Revolving Commitment Termination
Date” means the earliest to occur of (a) February 29, 2012, (b) the date
of termination of the Revolving Commitments in accordance with the terms of the
Financing Documents and (c) the first date on which all outstanding principal
of, interest on and all other amounts outstanding in respect of the Revolving
Loans shall have been paid in full.

     

    “Revolving Exposure” means,
with respect to any Lender at any time, the sum of (a) the aggregate outstanding
principal amount of such Lender’s Revolving Loans plus (b) such
Lender’s LC Exposure at such time.

     

    “Revolving Loan” means each
Loan made by a Lender to the Borrower pursuant to Section 2.01(a).

     

    “Revolving Note” has the
meaning set forth in Section 2.07(a).

     

    “Rolling Period” means, at any
date of determination, the period of twelve consecutive calendar months ending
on, or most recently ended prior to, such date.

     

    “S&P” means Standard &
Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and any
successor thereto.

     

    “SEC” means the Securities and
Exchange Commission, or any Governmental Authority succeeding to any of its
principal functions.

     

    “Secured Cash Management
Agreement” means any Cash Management Agreement that is entered into by
and between any Obligor and any Cash Management Bank.

     

    “Secured Hedge Agreement” means
any Swap Contract permitted under this Agreement that is entered into by and
between any Obligor and any Hedge Bank.

     

    “Secured Obligations” means all
advances to, and debts, liabilities, obligations, covenants and duties of, any
Obligor arising under any Financing Document or otherwise with respect to any
Loan, LC, Secured Cash Management Agreement or Secured Hedge Agreement, in each
case whether direct or indirect (including those acquired by assumption),
absolute or contingent, due or to become due, now existing or hereafter arising
and including interest and fees that accrue after the commencement by or against
any Obligor or any Affiliate thereof of any proceeding under any bankruptcy,
insolvency or other debtor relief laws naming such Person as the debtor in such
proceeding, regardless of whether such interest and fees are allowed claims in
such proceeding.

     

    “Secured Parties” means,
collectively, the Administrative Agent, the Lenders, the LC Bank, the Hedge
Banks, the Cash Management Banks, each co-agent or sub-agent appointed by the
Administrative Agent from time to time pursuant to Section 11.05, and the other
Persons the Secured Obligations owing to which are or are purported to be
secured by the Collateral under the terms of the Security
Documents.

     

    
      
         

      

      
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    “Security Agreement” means the
Security Agreement dated as of the date hereof executed by the Borrower and
other Obligors in favor of the Lender.

     

    “Security Documents” means the
Security Agreement, the Account Control Agreements, all Collateral Access
Agreements, the Patent Security Agreement, the Trademark Security Agreement, all
Uniform Commercial Code financing statements required by any of the foregoing to
be filed with respect to the security interests in personal Property and
fixtures created pursuant thereto, and any and all other agreements or
instruments now or hereafter executed and delivered to the Secured Parties by
any Obligor or any other Person as security for the Secured
Obligations.

     

    “Specified Default” means,
collectively, (i) any Event of Default and (ii) any Default described in Section
9.01(a), (b), (h), (i) or (j) that with notice or lapse of time or both, in
accordance with Article IX, would become an Event of Default.

     

    “Solvent” and “Solvency” mean, with respect
to any Person or group of Persons determined on a consolidated basis, on any
date of determination, that on such date (a) the fair value of the property of
such Person or group is greater than the total amount of liabilities, including
contingent liabilities, of such Person or group, (b) the present fair salable
value of the assets of such Person or group is not less than the amount that
will be required to pay the probable liability of such Person or group on its
debts as they become absolute and matured, (c) such Person or group does not
intend to, and does not believe that it will, incur debts or liabilities beyond
such Person’s or group’s ability to pay such debts and liabilities as they
mature, (d) such Person or group is not engaged in business or a transaction,
and is not about to engage in business or a transaction, for which such Person’s
or group’s property would constitute an unreasonably small capital, and (e) such
Person or group is able to pay its debts and liabilities, contingent obligations
and other commitments as they mature in the ordinary course of
business.  The amount of contingent liabilities at any time shall be
computed as the amount that, in the light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.

     

    “Subordinated Debt” means
unsecured Indebtedness (a) for which the Borrower is directly and primarily
liable, (b) in respect of which none of the other Obligors is contingently or
otherwise obligated and (c) that is subordinated to the obligations of the
Borrower to pay the principal of and interest on the Loans and the LC
Reimbursement Obligations hereunder on terms, and pursuant to documentation
containing other terms (including interest, amortization, covenants and events
of default) which are material in the Majority Lenders’ judgment, in form and
substance satisfactory to the Majority Lenders.

     

    
      
         

      

      
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    “Subsidiary” means, with
respect to any Person, any corporation, limited liability company, partnership
or other entity of which at least a majority of the securities or other
ownership interests having by the terms thereof ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
of such corporation, limited liability company, partnership or other entity
(irrespective of whether or not at the time securities or other ownership
interests of any other class or classes of such corporation, limited liability
company, partnership or other entity shall have or might have voting power by
reason of the happening of any contingency) is at the time directly or
indirectly owned or controlled by such Person or one or more Subsidiaries of
such Person or by such Person and one or more Subsidiaries of such
Person.  Unless otherwise specified, “Subsidiary” means a Subsidiary
of the Borrower.

     

    “Subsidiary Guarantee” means the
Subsidiary Guarantee made by the Guarantors under Article IV in favor of the
Secured Parties.

     

    “Swap Termination Value” means,
in respect of any one or more Hedging Agreements, after taking into account the
effect of any legally enforceable netting agreement relating to such Hedging
Agreements, (a) for any date on or after the date such Hedging Agreements have
been closed out and termination value(s) determined in accordance therewith,
such termination value(s), and (b) for any date prior to the date referenced in
clause (a), the amount(s) determined as the mark-to-market value(s) for such
Hedging Agreements, as determined in accordance with the relevant Hedging
Agrement(s).

     

    “Taxes” means all taxes,
charges, fees, levies or other assessments imposed by any federal, state, local
or foreign taxing authority, including, without limitation, income, gross
receipts, excise, real or personal property, sales, occupation, use, service,
leasing, environmental, value added, transfer, payroll, and franchise taxes (and
including any interest, penalties, or additions to tax attributable to or
imposed with respect to any such assessment).

     

    “Term Commitment” means, with
respect to any Lender, the obligation of such Lender to make up to four Term
Loans prior to the Term Commitment Termination Date in an aggregate principal
amount up to but not exceeding the amount set opposite the name of such Lender
on Schedule A
under the caption “Term Commitment” or, in the case of a Person that becomes a
Term Lender pursuant to an assignment permitted under Section 12.04(b), as
specified in the respective instrument of assignment pursuant to which such
assignment is effected (as the same may be reduced any time or from time to time
pursuant to this Agreement).

     

    “Term Commitment Termination
Date” means the earliest to occur of (a) February 29, 2012, (b) the date
of termination of the Term Commitments in accordance with the terms of the
Financing Documents and (c) the first date on which all outstanding principal
of, interest on and all other amounts outstanding in respect of the Term Loans
shall have been paid in full.

     

    “Term Loan” means each Loan
(including each Termed-Out Loan) made by a Lender to the Borrower pursuant to
Section
2.01(b).

     

    “Term Maturity Date” means
February 28, 2019; provided, if such day
is not a Business Day, the Term Maturity Date shall be the immediately preceding
Business Day.

     

    “Term Notes” means,
collectively, Amended and Restated Term Notes and Initial Term
Notes.

     

    “Term-Out” means, with respect
to any Term Loan, the conversion and continuation of such Term Loan as a
Termed-Out Loan in accordance with Section 2.01(b)(ii) on the Term Commitment
Termination Date.  The term “Term-Out” used as a verb shall have a
correlative meaning.

     

    
      
         

      

      
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    “Term-Out Date” means February
29, 2012 (provided, if such day is not a Business Day, the Term-Out Date shall
be the immediately preceding Business Day).

     

    “Termed-Out Loan” has the
meaning set forth in Section
2.01(b)(ii).

     

    “Trademark Security Agreement”
means the Trademark Security Agreement dated as of the date hereof executed by
the Obligor(s) party thereto in favor of the Lender.

     

     “UCC” means the Uniform
Commercial Code as in effect from time to time in The Commonwealth of
Massachusetts; provided that, if
perfection or the effect of perfection or non-perfection or the priority of any
security interest in any Collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than The Commonwealth of Massachusetts,
“UCC” means the Uniform
Commercial Code as in effect from time to time in such other jurisdiction for
purposes of the provisions hereof relating to such perfection, effect of
perfection or non-perfection or priority.

     

    “Unfinanced Capital
Expenditures” means for any period, Capital Expenditures for such period
other than (a) Capital Expenditures funded by proceeds of Indebtedness (other
than Revolving Loans) or equity issuances and (b) Capital Expenditures financed
by Capital Lease Obligations.

     

    “Unfunded Pension Liability”
means the excess of a Pension Plan’s benefit liabilities under Section
4001(a)(16) of ERISA, over the current value of that Pension Plan’s assets,
determined in accordance with the assumptions used for funding the Pension Plan
pursuant to Section 412 of the Code for the applicable plan year.

     

    “Unreimbursed Amount” has the
meaning set forth in Section 2.08(f).

     

    “US Copyright Office” means the
United States Copyright Office.

     

    “US PTO” means the United
States Patent and Trademark Office.

     

    “Wholly Owned Subsidiary”
means, with respect to any Person, any corporation, partnership or other entity
of which all (other than directors’ qualifying shares and the like) of the
equity securities or other ownership interests (other than, in the case of a
corporation, directors’ qualifying shares) are directly or indirectly owned or
controlled by such Person or one or more Wholly Owned Subsidiaries of such
Person or by such Person and one or more Wholly Owned Subsidiaries of such
Person.

     

    Section
1.02    Principles of
Interpretation.  The following rules of usage shall apply to
this Agreement and the other Financing Documents (and each appendix, schedule,
exhibit and annex thereto) unless otherwise required by the context or unless
otherwise specified therein:

     

    (a)    Definitions
set forth herein or in any other Financing Document shall be equally applicable
to the singular and plural forms of the terms defined.

     

    
      
         

      

      
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    (b)    References
to articles, sections, paragraphs, clauses, annexes, appendices, schedules or
exhibits in any Financing Document are references to articles, sections,
paragraphs, clauses, annexes, appendices, schedules or exhibits in or to such
Financing Document (unless expressly provided otherwise in such Financing
Document).

     

    (c)    Reference
to any Financing Document shall include all schedules, annexes, exhibits and
appendices to such Financing Document.

     

    (d)    The
headings, subheadings and table of contents used in any Financing Document are
solely for convenience of reference, shall not constitute a part of such
Financing Document and shall not affect the meaning, construction or effect of
any provision thereof.

     

    (e)     References
to any Person in any Financing Document shall include such Person, its
successors and permitted assigns and transferees.

     

    (f)     Reference
to any agreement (including any Financing Document) or Governmental Approval in
any Financing Document means such agreement as amended, supplemented or
otherwise modified from time to time in accordance with the applicable
provisions thereof or as required by any Governmental Requirement.

     

    (g)    References
to any law in any Financing Document includes any amendment or modification to
such law and any rules or regulations issued thereunder or any law enacted in
substitution or replacement thereof.

     

    (h)    Words
such as “hereunder”, “hereto”, “hereof” and “herein” and other words of like
import used in any Financing Document shall, unless the context clearly
indicates to the contrary, refer to the whole of such Financing Document and not
to any particular article, section, subsection, paragraph or clause
thereof.

     

    (i)  
  References to “including” in any Financing Document means including
without limiting the generality of any description preceding such
term.

     

    (j)     Each
of the parties to one or more Financing Documents and their counsel have
reviewed and revised, or requested revisions to, such Financing Document, and
the usual rule of construction that any ambiguities are to be resolved against
the drafting party shall be inapplicable in the interpretation of such Financing
Document and any amendments or exhibits hereto.

     

    Section
1.03    Accounting
Terms.  For purposes of Section 8.14, GAAP
shall be determined on the basis of such principles in effect on the date hereof
and consistent with those used in the preparation of the most recent audited
financial statements of the Borrower referred to in Section
6.04(a).  In the event that any “Accounting Change” (as defined
below) shall occur and such change results in a change in the method of
calculation of financial covenants, standards or terms, or other covenants
directly affected by such Accounting Changes, in this Agreement, then the
Borrower and the Administrative Agent agree to enter into negotiations in order
to amend such provisions of this Agreement so as to equitably reflect such
Accounting Changes with the desired result that the criteria for evaluating the
Borrower’s financial condition shall be the same after such Accounting Changes
as if such Accounting Changes had not been made.  Until such time as
such an amendment shall have been executed and delivered by the Borrower, the
Administrative Agent and the Majority Lenders, all financial covenants,
standards and terms in this Agreement shall continue to be calculated or
construed as if such Accounting Changes had not occurred.  “Accounting Changes” refers to
changes in accounting principles required by the promulgation of any rule,
regulation, pronouncement or opinion by the Financial Accounting Standards Board
of the American Institute of Certified Public Accountants, the Public Borrower
Accounting Oversight Board or, if applicable, the SEC.

     

    
      
         

      

      
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    Section
1.04    LC
Amounts.     Unless otherwise specified herein,
the amount of an LC at any time shall be deemed to be the stated amount of such
LC in effect at such time; provided, however,
that with respect to any LC that, by its terms or the terms of any LC Document
related thereto, provides for one or more automatic increases in the stated
amount thereof, the amount of such LC shall be deemed to be the maximum stated
amount of such LC after giving effect to all such increases that are in effect
at such time.

     

    ARTICLE
II

     

    THE
CREDITS

     

    Section
2.01    The Commitments.

     

    (a)    Revolving
Loans.  Subject to the terms and conditions of this Agreement,
each Lender severally agrees to make Revolving Loans to the Borrower from time
to time, on any Business Day on or before the Revolving Commitment Termination
Date, in an aggregate principal amount that will not result in (i) the
outstanding amount of such Lender’s Revolving Exposure exceeding such Lender’s
Revolving Commitment or (ii) the aggregate outstanding amount of all Lenders’
Revolving Exposures exceeding the lesser of (A) the Maximum Revolver Amount and
(B) the Borrowing Base then in effect (based on the most recent Borrowing Base
Certificate required to be delivered hereunder).  The Lenders shall
have no obligation to make Revolving Loans hereunder to the extent such
additional Revolving Loans would cause the aggregate Revolving Exposures of all
Lenders to exceed the availability limits described in this
Section.  Within the foregoing limits, and subject to Sections 5.01
and 5.02, the Borrower may borrow, prepay and reborrow Revolving
Loans.

     

    (b)    Term Loans.

     

    (i)       Subject
to the terms and conditions of this Agreement and the other Financing Documents,
each Lender severally agrees to make up to four Term Loans to the Borrower from
time to time, on any Business Day prior to the Term Commitment Termination Date,
in an aggregate principal amount up to but not exceeding such Lender’s Term
Commitment; provided, that (i) the amount of any Term Borrowing applied to
finance an Acquisition permitted under Section 8.08(b) shall not exceed 60% of
the Adjusted Acquisition Consideration for such Acquisition and (ii) the
cumulative, aggregate principal amount of Term Borrowings made to repurchase
stock of the Borrower in compliance with Section 8.09(c) shall not exceed
$10,000,000.  Each Term Borrowing shall consist of Term Loans made
simultaneously by the Lenders in accordance with their respective
Percentages.  Amounts prepaid or repaid in respect of any Term Loan
may not be reborrowed.

     

    
      
         

      

      
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    (ii)      Term-Out.  Each
Lender agrees, on the terms and conditions of this Agreement, to Term-Out its
Term Loans outstanding on the Term-Out Date, and to convert and continue all of
its Term Loans outstanding on the Term-Out Date into a single Term Loan (such
Termed-Out Term Loans and such continued Term Loan made pursuant to this
paragraph, the “Termed-Out
Loan”), to the Borrower on the Term-Out Date in a
principal  amount equal to the aggregate principal amount of such
Lender’s Term Loans outstanding on the Term-Out Date immediately before such
Term-Out.  Each such Term-Out of Term Loans shall be deemed to be a
Term Borrowing for all purposes of this Agreement; provided, that Term Loans
that are Termed-Out shall not be deemed to be repaid or discharged but shall be
deemed to be continued as a Termed-Out Loan as provided
hereby.  Amounts Termed-Out, prepaid or repaid in respect of
Termed-Out Loans may not be reborrowed.

     

    (c)    Termination and Reduction of
Commitments.  Unless previously terminated, (i) the Revolving
Commitments shall automatically terminate on the Revolving Commitment
Termination Date and (ii) the Term Commitments shall automatically terminate on
the Term Commitment Termination Date.  Any termination of the
Commitments shall be permanent.

     

    (d)    Reserves;
Eligibility.  Anything to the contrary in Section 2.01(a)
notwithstanding, the Majority Lenders (through the Administrative Agent) shall
have the right to establish reserves in such amounts, and with respect to such
matters, as the Majority Lenders in their Permitted Discretion shall deem
necessary or appropriate, against the Borrowing Base, including reserves with
respect to (i) sums that the Borrower or any other Obligor is required to pay
(such as taxes, assessments, insurance premiums, or, in the case of leased
assets, rents or other amounts payable under such leases) and has failed to pay
under this Agreement or any other Financing Document, and (ii) amounts owing by
the Borrower or any Subsidiary to any Person to the extent secured by a Lien on,
or trust over, any of the Collateral, which Lien or trust, in the Permitted
Discretion of the Majority Lenders likely would have a priority superior to the
Administrative Agent’s Liens (such as Liens or trusts in favor of landlords,
warehousemen, carriers, mechanics, materialmen, laborers, or suppliers, or Liens
or trusts for ad valorem, excise, sales, or other taxes where given priority
under applicable law) in and to such item of the Collateral.  In
addition to the foregoing, the Majority Lenders shall have the right to have the
Inventory reappraised by a qualified appraisal company selected by the
Administrative Agent (with the approval of the Majority Lenders) from time to
time after the Closing Date for the purpose of redetermining the value of the
Eligible Inventory portion of the Collateral and, as a result, redetermining the
Borrowing Base.

     

    Section
2.02    Loans and
Funding.

     

    (a)    General.  Each Loan
shall be made as part of a Borrowing consisting of Loans of the same Class made
by the Lenders ratably in accordance with their respective Commitments of the
applicable Class.

     

    (b)    Minimum
Amounts.  Each Revolving Borrowing shall be in an amount of
$100,000 or an integral multiple of $100,000 in excess thereof (or, if smaller,
in an amount equal to the entire unused balance of the aggregate Revolving
Commitments).

     

    (c)    [reserved]

     

    
      
         

      

      
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    (d)    The
Loans made by each Lender shall be made and maintained at such Lender’s
Applicable Lending Office.

     

    Section
2.03    Notice of
Borrowings.

     

    (a)    To
request a Borrowing, the Borrower shall notify the Administrative Agent of such
request by telephone not later than 12:00 noon, Boston time, three Business Days
before the date of the proposed Borrowing.  Each such telephonic
Notice of Borrowing shall be irrevocable and shall be confirmed promptly by hand
delivery or facsimile to the Administrative Agent of a written Notice of
Borrowing in substantially the form of Exhibit B and signed by the Borrower
(each such telephonic and written notice, a “Notice of
Borrowing”).

     

    (b)    Such
written Notice of Borrowing shall specify the following information in
compliance with Section
2.02:

     

    (i)       the
aggregate amount and Class of the requested Borrowing;

     

    (ii)      the
date of such Borrowing, which shall be a Business Day; and

     

    (iii)     the
location and number of the Borrower’s account to which funds are to be
disbursed.

     

    Section
2.04    Notice to Lenders; Funding of
Borrowings.

     

    (a)    Promptly
after receipt of a Notice of Borrowing in accordance with Section 2.03, the
Administrative Agent shall advise each Lender of the contents thereof and of the
amount of such Lender’s Loan to be made by such Lender as part of the requested
Borrowing.

     

    (b)    Each
Lender shall make each Loan to be made by it under this Agreement on the
proposed date of such Loan by wire transfer of immediately available funds, by
10:00 a.m. (Boston time), to the account of the Administrative Agent most
recently designated by it for such purpose by notice to the
Lenders.  Unless the Administrative Agent determines that any
applicable condition specified in Article V has not been satisfied, the
Administrative Agent will make the funds so received from the Lenders available
to the Borrower by promptly crediting the amounts so received, in like funds, to
an account of the Borrower designated by the Borrower in the applicable Notice
of Borrowing.

     

    Section
2.05    Several
Obligations.  The amounts payable by the Borrower at any time
hereunder and under the Notes to each Lender shall be a separate and independent
debt.

     

    Section
2.06    [Reserved].

     

    Section
2.07    Notes; Records.

     

    (a)    The
Revolving Loans made by each Lender shall be evidenced by a single promissory
note of the Borrower (each, a “Revolving Note”) substantially
in the form of Exhibit A-1, dated the Closing Date, payable to such Lender in a
principal amount equal to the amount of its Revolving Commitment as originally
in effect and otherwise duly completed.

     

    
      
         

      

      
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    (b)    The
Term Loans made by each Lender pursuant to Section 2.01(b)(i) shall be evidenced
by a promissory note of the Borrower in substantially the form of Exhibit A-2,
dated the Closing Date, payable to such Lender in a principal amount equal to
the amount of such Term Loan and otherwise duly completed (an “Initial Term
Note”).  The Termed-Out Loan of each Lender pursuant to Section
2.01(b)(ii) shall be evidenced by an amended and restated promissory note of the
Borrower in substantially the form of Exhibit A-3, dated the Term-Out Date,
payable to such Lender in a principal amount equal to the amount of such
Termed-Out Loan and otherwise duly completed (an “Amended and Restated Term
Note”), which Amended and Restated Term Note of such Lender shall amend
and restate the Initial Term Notes of such Lender.

     

    (c)    Each
Lender shall maintain in accordance with its usual practice records evidencing
the indebtedness of the Borrower, including the date and amount of each Loan of
each Class made by such Lender to the Borrower, and each payment made on account
of the principal thereof.  The Administrative Agent shall maintain
records in which it shall record the amount of each Loan made hereunder, the
Class thereof, the amount of any principal or interest due and payable, or to
become due and payable, from the Borrower to each Lender under this Agreement,
the amount of any sum received by the Administrative Agent hereunder for account
of the Lenders and each Lender’s share thereof.  The entries made in
any Lender’s or the Administrative Agent’s records pursuant to this Section
2.07(c) shall be conclusive evidence (absent manifest error) of the existence
and amounts of the obligations recorded therein; provided that the failure of
any Lender or the Administrative Agent to maintain such records or any error
therein shall not affect in any manner the obligations of the Borrower or any
other Obligor to repay the Loans in accordance with this Agreement.

     

    Section
2.08    Letters of
Credit.

     

    (a)    Subject
to the terms and conditions set forth herein, in addition to the Loans provided
for in Section 2.01, the Borrower may request the LC Bank to issue, from time to
time from the Closing Date until the Revolving Commitment Termination Date, LCs,
in an aggregate face amount not exceeding the availability limits set forth in
Section 2.01(a) at any time, for the Borrower’s account in such form as is
acceptable to such LC Bank in its sole discretion; provided that after giving
effect to any issuance, extension or increase in the amount, of any LC, (1) the
Revolving Exposure of any Lender shall not exceed such Lender’s Revolving
Commitment and (2) the aggregate Revolving Exposures shall not exceed the lesser
of the Maximum Revolver Amount and the Borrowing Base.  LCs issued
hereunder (including the Existing LC) shall constitute utilization of the
Revolving Commitments.  The Existing LC shall be deemed to have been
issued pursuant hereto, and from and after the Closing Date shall be subject to
and governed by the terms and conditions hereof.

     

    
      
         

      

      
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    (b)    To
request the issuance of an LC (or the amendment, renewal or extension of an
outstanding LC), the Borrower shall deliver by courier or facsimile (or transmit
by electronic communication, if arrangements for doing so have been approved by
the LC Bank) to the LC Bank (reasonably in advance of the requested date of
issuance, amendment, renewal or extension) a notice requesting the issuance of
an LC, or identifying the LC to be amended, renewed or extended, and specifying
the date of issuance, amendment, renewal or extension (which shall be a Business
Day), the date on which such LC is to expire (which shall comply with paragraph
(d) of this Section), the amount of such LC, the name and address of the
beneficiary thereof and such other information as shall be necessary to prepare,
amend, renew or extend such LC; provided, that the Existing LC shall be renewed
or extended in accordance with its terms.  If requested by the LC
Bank, the Borrower also shall submit an LC application on such LC Bank's
standard form in connection with any request for an LC. In the event of any
inconsistency between the terms and conditions of this Agreement and the terms
and conditions of any form of letter of credit application or other agreement
submitted by the Borrower to, or entered into by the Borrower with, the LC Bank
relating to any LC, the terms and conditions of this Agreement shall
control.

     

    (c)    An
LC shall be issued, amended, renewed or extended only if (and upon issuance,
amendment, renewal or extension of each LC the Borrower shall be deemed to
represent and warrant that), after giving effect to such issuance, amendment,
renewal or extension (i) the aggregate LC Exposure of the LC Bank (determined
for these purposes without giving effect to the participations therein of the
Lenders pursuant to paragraph (e) of this Section) shall not exceed the
availability limits specified in Section 2.01(a), and (ii) the total Revolving
Exposures shall not exceed the availability limits specified in Section
2.01(a).

     

    (d)    Each
LC shall expire at or prior to the close of business on the earlier of (i) the
date twelve months after the date of the issuance of such LC (or, in the case of
any renewal or extension thereof, twelve months after the then current
expiration date of such LC, so long as such renewal or extension occurs within
three months of such then-current expiration date) and (ii) the date that is
five Business Days prior to the Revolving Commitment Termination Date; provided,
that the Existing LC shall expire or be renewed in accordance with its
terms.

     

    
      
         

      

      
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    (e)    By
the issuance of an LC (or an amendment to an LC increasing the amount thereof)
by the LC Bank, and without any further action on the part of such LC Bank or
the Lenders, such LC Bank hereby grants to each Lender, and each Lender hereby
acquires from such LC Bank, a participation in such LC equal to such Lender's
Percentage of the aggregate amount available to be drawn under such
LC.  Each Lender acknowledges and agrees that its obligation to
acquire participations pursuant to this paragraph in respect of LCs is absolute
and unconditional and shall not be affected by any circumstance whatsoever,
including any amendment, renewal or extension of any LC or the occurrence and
continuance of a Default or reduction or termination of the
Commitments.

     

    In
consideration and in furtherance of the foregoing, each Lender hereby absolutely
and unconditionally agrees to pay to the Administrative Agent, for account of
the LC Bank, such Lender's Percentage of each LC Disbursement made by the LC
Bank promptly upon the request of such LC Bank at any time from the time of such
LC Disbursement until such LC Disbursement is reimbursed by the Borrower or at
any time after any reimbursement payment is required to be refunded to the
Borrower for any reason.  Such payment shall be made without any
offset, abatement, withholding or reduction whatsoever.  Each such
payment shall be made in the same manner as provided in Section 2.04(b) with
respect to Loans made by such Lender (and Section 2.04(b) shall apply, mutatis mutandis, to the
payment obligations of the Lenders), and the Administrative Agent shall promptly
pay to the LC Bank the amounts so received by it from the Lenders. Promptly
following receipt by the Administrative Agent of any payment from the Borrower
pursuant to the next following paragraph, the Administrative Agent shall
distribute such payment to the LC Bank or, to the extent that the Lenders have
made payments pursuant to this paragraph to reimburse the LC Bank, then to such
Lenders and the LC Bank as their interests may appear.  Any payment
made by a Lender pursuant to this paragraph to reimburse the LC Bank for any LC
Disbursement shall not constitute a Loan and shall not relieve the Borrower of
its obligation to reimburse such LC Disbursement.

     

    (f)     (1)
If the LC Bank shall make any LC Disbursement in respect of an LC, the Borrower
shall reimburse such LC Bank in respect of such LC Disbursement by paying to the
Administrative Agent an amount equal to such LC Disbursement not later than
12:00 noon, Boston time, on (i) the Business Day that the Borrower receives
notice of such LC Disbursement, if such notice is received prior to 10:00 a.m.,
Boston time, or (ii) the Business Day immediately following the day that the
Borrower receives such notice, if such notice is not received prior to such
time.  If the Borrower fails to make such payment when due, the
Administrative Agent shall notify each Lender of the applicable LC Disbursement,
the payment then due from the Borrower in respect thereof (the “Unreimbursed Amount”) and such
Lender's Percentage thereof.  In such event, the Borrower shall be
deemed to have requested a Revolving Borrowing to be disbursed on the date of
any payment by the LC Bank of such LC Disbursement in an amount equal to the
Unreimbursed Amount, without regard to the minimum and multiples specified in
Section 2.02, but subject to the amount of the unutilized Revolving Commitments
and the conditions set forth in Section 5.02 (other than the delivery of a
Notice of Borrowing).  Any notice given by the LC Bank or the
Administrative Agent pursuant to this paragraph may be given by telephone if
immediately confirmed in writing; provided that the lack of such an immediate
confirmation shall not affect the conclusiveness or binding effect of such
notice.

     

    (2)    Each
Lender shall upon any notice pursuant to Section 2.08(f)(1) make funds available
to the Administrative Agent for the account of the LC Bank at the Administrative
Agent’s Office in an amount equal to its Percentage of the Unreimbursed Amount
not later than 1:00 p.m. on the Business Day specified in such notice by the
Administrative Agent, whereupon, subject to the provisions of Section
2.08(f)(3), each Lender that so makes funds available shall be deemed to have
made a Revolving Loan to the Borrower in such amount.  The
Administrative Agent shall remit the funds so received to the LC
Bank.

     

    
      
         

      

      
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    (3)    With
respect to any Unreimbursed Amount that is not fully refinanced by a Revolving
Borrowing of Revolving Loans because the conditions set forth in Section 5.02
cannot be satisfied or for any other reason, the Borrower shall be deemed to
have incurred from the LC Bank an LC Borrowing in the amount of the Unreimbursed
Amount that is not so refinanced, which LC Borrowing shall be due and payable on
demand (together with interest) and shall bear interest at the Post-Default
Rate.  In such event, each Lender’s payment to the Administrative
Agent for the account of the LC Bank pursuant to Section 2.08(f)(2) shall be
deemed payment in respect of its participation in such LC Borrowing and shall
constitute a funding of such Lender’s participation in such LC Borrowing from
such Lender in satisfaction of its participation obligation under this Section
2.08.

     

    (4)    Until
each Lender funds its Revolving Loan or its participation in such LC Borrowing
pursuant to this Section 2.08(f) to reimburse the LC Bank for any amount drawn
under any LC, interest in respect of such Lender’s Percentage of such amount
shall be solely for the account of the LC Bank.

     

    (5)    Each
Lender’s obligation to make Revolving Loans or to fund its participations in LC
Borrowings to reimburse the LC Bank for amounts drawn under LCs, as contemplated
by this Section 2.08(f), shall be absolute and unconditional and shall not be
affected by any circumstance, including (A) any setoff, counterclaim,
recoupment, defense or other right which such Lender may have against the LC
Bank, the Borrower or any other Person for any reason whatsoever; (B) the
occurrence or continuance of a Default, or (C) any other occurrence, event or
condition, whether or not similar to any of the foregoing; provided, that each
Lender’s obligation to make Revolving Loans pursuant to this Section 2.08(f) is
subject to the conditions set forth in Section 5.02 (other than delivery by the
Borrower of a Notice of Borrowing).  No such funding of a
participation in an LC Borrowing shall relieve or otherwise impair the
obligation of the Borrower to reimburse the LC Bank for the amount of any
payment made by the LC Bank under any LC, together with interest as provided
herein.

     

    (6)    If
any Lender fails to make available to the Administrative Agent for the account
of the LC Bank any amount required to be paid by such Lender pursuant to the
foregoing provisions of this Section 2.08(f) by the time specified in Section
2.08(f)(2), the LC Bank shall be entitled to recover from such Lender (acting
through the Administrative Agent), on demand, such amount with interest thereon
for the period from the date such payment is required to the date on which such
payment is immediately available to the LC Bank at a rate per annum equal to the
greater of the Federal Funds Rate and a rate determined by the LC Bank in
accordance with banking industry rules on interbank compensation, plus any
administrative, processing or similar fees customarily charged by the LC Bank in
connection with the foregoing.  If such Lender pays such amount (with
interest and fees as aforesaid), the amount so paid shall constitute such
Lender’s Revolving Loan included in the relevant Revolving Borrowing or funding
of such Lender’s participation in respect of the relevant LC Borrowing, as the
case may be.  A certificate of the LC Bank submitted to any Lender
(through the Administrative Agent) with respect to any amounts owing under this
Section 2.08(f)(6) shall be conclusive absent manifest error.

     

    
      
         

      

      
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    (7)    At
any time after the LC Bank has made a payment under any LC and has received from
any Lender such Lender’s funding of its participation in any related LC
Borrowing in respect thereof in accordance with this Section 2.08(f), if the
Administrative Agent receives for the account of the LC Bank any payment in
respect of the related Unreimbursed Amount or interest thereon (whether directly
from the Borrower or otherwise, including proceeds of cover for LC Exposure
applied thereto by the Administrative Agent), the Administrative Agent will
distribute to such Lender its Percentage thereof in the same funds as those
received by the Administrative Agent.

     

    (8)    If
any payment received by the Administrative Agent for the account of the LC Bank
pursuant to Section 2.08(f)(1) is required to be returned under any of the
circumstances described in Section 12.08(e) (including pursuant to any
settlement entered into by the LC Bank in its discretion), each Lender shall pay
to the Administrative Agent for the account of the LC Bank its Percentage
thereof on demand of the Administrative Agent, plus interest thereon from the
date of such demand to the date such amount is returned by such Lender, at a
rate per annum equal to the Federal Funds Rate from time to time in
effect.  The obligations of the Lenders under this clause shall
survive the payment in full of the Secured Obligations and the termination of
this Agreement.

     

    (g)    The
Borrower's obligation to reimburse LC Disbursements as provided in paragraph (f)
of this Section and to repay each LC Borrowing shall be absolute, unconditional
and irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement under any and all circumstances whatsoever and irrespective of
(i) any lack of validity or enforceability of any LC, or any term or provision
therein, (ii) any draft or other document presented under an LC proving to be
forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect, (iii) payment by the LC Bank under an LC
against presentation of a draft or other document that does not comply strictly
with the terms of such LC, and (iv) any other event or circumstance whatsoever,
whether or not similar to any of the foregoing, that might, but for the
provisions of this Section, constitute a legal or equitable discharge of the
Borrower's obligations hereunder.

     

    Neither
the Administrative Agent, the Lenders nor the LC Bank, nor any of their Related
Parties, shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any LC by the LC Bank or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any LC (including any document required
to make a drawing thereunder), any error in interpretation of technical terms or
any consequence arising from causes beyond the control of the LC Bank; provided that the
foregoing shall not be construed to excuse the LC Bank from liability to the
Borrower to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by the Borrower to the
extent permitted by applicable law) suffered by the Borrower that are caused by
such LC Bank's gross negligence or willful misconduct when determining whether
drafts and other documents presented under an LC comply with the terms
thereof.  The parties hereto expressly agree that:

     

    (i)     the
LC Bank may accept documents that appear on their face to be in substantial
compliance with the terms of an LC without responsibility for further
investigation, regardless of any notice or information to the contrary, and may
make payment upon presentation of documents that appear on their face to be in
substantial compliance with the terms of such LC;

     

    
      
         

      

      
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    (ii)    the
LC Bank shall have the right, in its sole discretion, to decline to accept such
documents and to make such payment if such documents are not in strict
compliance with the terms of such LC; and

     

    (iii)   this
sentence shall establish the standard of care to be exercised by the LC Bank
when determining whether drafts and other documents presented under an LC comply
with the terms thereof (and the parties hereto hereby waive, to the extent
permitted by applicable law, any standard of care inconsistent with the
foregoing).

     

    (h)    The
LC Bank for any LC shall, within a reasonable time following its receipt
thereof, examine all documents purporting to represent a demand for payment
under such LC. Such LC Bank shall promptly after such examination notify the
Administrative Agent and the Borrower by telephone (confirmed by facsimile) of
such demand for payment and whether such LC Bank has made or will make an LC
Disbursement thereunder; provided that any
failure to give or delay in giving such notice shall not relieve the Borrower of
its obligation to reimburse such LC Bank and the Lenders with respect to any
such LC Disbursement.

     

    (i)     If
the LC Bank for any LC shall make any LC Disbursement, then, unless the Borrower
shall reimburse such LC Disbursement in full on the date such LC Disbursement is
made, the unpaid amount thereof shall bear interest, for each day from and
including the date such LC Disbursement is made to but excluding the date that
the Borrower reimburses such LC Disbursement, at the rate per annum then
applicable to Revolving Loans; provided, if the
Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph
(f) of this Section, then Section 3.02(b) shall apply.  Interest
accrued pursuant to this paragraph shall be for account of such LC Bank, except
that interest accrued on and after the date of payment by any Lender pursuant to
paragraph (f) of this Section to reimburse such LC Bank shall be for account of
such Lender to the extent of such payment.

     

    (j)     The
LC Bank may be replaced at any time by written agreement between the Borrower,
the Administrative Agent, the replaced LC Bank and the successor LC Bank, which
shall be a Lender or an Affiliate of a Lender.  The Administrative
Agent shall notify the Lenders of any such replacement of the LC
Bank.  At the time any such replacement shall become effective, the
Borrower shall pay all unpaid fees accrued for account of the replaced LC Bank
pursuant to Section 2.09(a).  From and after the effective date of any
such replacement, (i) the successor LC Bank shall have all the rights and
obligations of the replaced LC Bank under this Agreement with respect to LCs to
be issued by it thereafter and (ii) references herein to the term "LC Bank"
shall be deemed to include such successor or any previous LC Bank, or such
successor and all previous LC Banks, as the context shall
require.  After the replacement of the LC Bank hereunder, the replaced
LC Bank shall remain a party hereto and shall continue to have all the rights
and obligations of the LC Bank under this Agreement with respect to LCs issued
by it prior to such replacement, but shall not be required to issue additional
LCs.

     

    
      
         

      

      
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    (k)    If
either (i) an Event of Default shall occur and be continuing and the Borrower
receives notice from the Administrative Agent or the Majority Lenders (or, if
the maturity of the Loans has been accelerated, Lenders with LC Exposure
representing more than 50% of the total LC Exposure) demanding the deposit of
cash collateral pursuant to this paragraph, or (ii) the Borrower shall be
required to provide cover for LC Exposure pursuant to Section 3.04, the Borrower
shall immediately deposit into the Collateral Account an amount in cash equal
to, in the case of an Event of Default, the LC Exposure as of such date plus any
accrued and unpaid interest thereon and, in the case of cover pursuant to
Section 3.04, the amount required under Section 3.04; provided that the
obligation to deposit such cash collateral shall become effective immediately,
and such deposit shall become immediately due and payable, without demand or
other notice of any kind, upon the occurrence of any Event of Default with
respect to the Borrower described in Section 9.01(h), (i) or
(j).  Such deposit shall be held by the Administrative Agent in the
Collateral Account as collateral in the first instance for the LC Exposure under
this Agreement and thereafter for the payment of the "Secured Obligations" under
and as defined in the Security Agreement, and for these purposes the Borrower
hereby grants a security interest to the Administrative Agent for the benefit of
the Lenders in the Collateral Account and in any financial assets (as defined in
the UCC) or other property held therein.

     

    (l)     Unless
otherwise expressly agreed by the LC Bank and the Borrower when an LC is issued
(including any such agreement applicable to the Existing LC), the rules of the
“International Standby Practices 1998” published by the Institute of
International Banking Law & Practice, Inc. (or such later version thereof as
may be in effect at the time of issuance) shall apply to each standby
LC.

     

    (m)   The
LC Bank shall act on behalf of the Lenders with respect to any LCs issued by it
and the documents associated therewith, and the LC Bank shall have all of the
benefits and immunities (A) provided to the Administrative Agent in Article XI
with respect to any acts taken or omissions suffered by the LC Bank in
connection with LCs of Credit issued by it or proposed to be issued by it and
Issuer Documents pertaining to such LCs as fully as if the term “Administrative
Agent” as used in Article XI included the LC Bank with respect to such acts or
omissions, and (B) as additionally provided herein with respect to the LC
Bank.

     

    
      
         

      

      
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    Section
2.09    Fees.

     

    (a)    LC Fees.  The
Borrower agrees to pay (i) to the Administrative Agent for account of each
Lender a participation fee with respect to its participations in LCs, which
shall accrue at 1.0% per annum on the average daily amount of such Lender's LC
Exposure (excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from and including the Closing Date to but
excluding the later of the date on which such Lender's Revolving Credit
Commitment terminates and the date on which such Lender ceases to have any LC
Exposure, and (ii) to the LC Bank a fronting fee, which shall accrue at the rate
or rates per annum separately agreed upon between the Borrower and the LC Bank
on the average daily amount of the LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Closing Date to but excluding the later of the date of termination
of the Revolving Commitments and the date on which there ceases to be any LC
Exposure, as well as the LC Bank’s standard fees with respect to the issuance,
amendment, renewal or extension of any LC or processing of drawings thereunder.
Participation fees and fronting fees accrued through and including each
Quarterly Date shall be payable on the third Business Day following such
Quarterly Date, commencing on the first such date to occur after the Closing
Date; provided
that all such fees shall be payable on the date on which the Revolving
Commitments terminate and any such fees accruing after the date on which the
Revolving Commitments terminate shall be payable on demand.  Any other
fees payable to the LC Bank pursuant to this paragraph shall be payable within
10 days after demand. All participation fees and fronting fees shall be computed
on the basis of a year of 360 days and shall be payable for the actual number of
days elapsed (including the first day but excluding the last day).

     

    (b)    Early Termination
Fees.

     

    (i)       If
the Borrower prepays the Term Loans in full by refinancing the Term Loans in
full with any lender(s) other than Middlesex or Commerce Bank, prior to the
stated maturity of the Term Loans, in view of the impracticality and extreme
difficulty of ascertaining actual damages and by mutual agreement of the parties
as to a reasonable calculation of such Lenders’ lost profits as a result
thereof, Borrower agrees to pay to the Administrative Agent for account of
Middlesex and/or Commerce Bank, in each case to the extent that Middlesex or
Commerce Bank, respectively, has outstanding Term Loans at the time of such
prepayment and will not be a lender party to such refinancing, upon the
effective date of such prepayment, an early termination fee in the amount set
forth below if such prepayment is effective in the period
indicated:

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  	 
      	 	
                                          Amount

                                        	 	
                                          Period

                                        
	 	 	 	 	 
	
                                          (1)

                                        	 	
                                          3.00%
      of the aggregate outstanding principal amount of the Term Loans held by
      Middlesex or Commerce Bank, as applicable

                                        	 	
                                          From
      the date hereof to and including the first anniversary of the date of this
      Agreement.

                                        
	 	 	 	 	 
	
                                          (2)

                                        	 	
                                          2.00%
      of the aggregate outstanding principal amount of the Term Loans held by
      Middlesex or Commerce Bank, as applicable

                                        	 	
                                          From
      the first anniversary of the date of this Agreement to and including the
      second anniversary of the date of this
  Agreement.

                                        

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
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                (3)

              	 	
                1.00%
      of the aggregate outstanding principal amount of the Term Loans held by
      Middlesex or Commerce Bank, as applicable

              	 	
                From
      the second anniversary of the date of this Agreement to and including the
      third anniversary of the date of this
Agreement.

              

      

    

     

    (ii)      All
such early termination fees shall be presumed to be the amount of damages
sustained by the Lenders as a result of such early prepayment and termination of
the Term Loans and Borrower agrees that it is reasonable under the circumstances
currently existing.  The early termination fees provided for in this
Section shall be deemed included in the Secured Obligations.

     

    (c)    Fee Letter.  The
Borrower hereby agrees to pay the fees in the amounts and in the manner
specified in the Fee Letter.

     

    (d)    Payment;
Computation.  All fees payable under this Agreement shall be
paid on the dates due, in immediately available U.S. dollars, to the
Administrative Agent for distribution to the Lenders entitled
thereto.  Fees paid shall not be refundable under any
circumstances.

     

    ARTICLE
III

     

    PAYMENTS
AND PREPAYMENTS

     

    Section
3.01     Repayment of
Loans.

     

    (a)    Revolving
Loans.  The Borrower hereby unconditionally promises to pay to
the Administrative Agent for account of the Lenders the entire outstanding
principal amount of the Revolving Loans, and all accrued but unpaid interest
thereon, on the Revolving Commitment Termination Date.

     

    (b)    Term Loans.  The
Borrower hereby unconditionally promises to pay to the Administrative Agent for
account of the Lenders the outstanding principal amount of the Term Loans in
eighty-four (84) consecutive installments, one such installment payable on each
Principal Payment Date, in the amounts set forth under the column titled
“Principal” on the schedules to the Amended and Restated Term Notes; provided, that (1)
such amounts may be reduced as set forth in Section 3.01(d), (2)
the entire outstanding principal amount of the Term Loans, and all accrued but
unpaid interest thereon, shall mature and be due and payable in full on the Term
Maturity Date and (3) the final installment shall be in an amount equal to the
then aggregate unpaid principal amount of and accrued but unpaid interest on all
Term Loans.

     

    (c)    Voluntary and Mandatory Prepayments;
Adjustment of Amortization Schedules.  Voluntary and mandatory
prepayments of the Loans shall be applied as set forth in Section
3.04(f).

     

    
      
         

      

      
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    Section
3.02     Interest.

     

    (a)    The
Borrower hereby unconditionally promises to pay to the Administrative Agent for
account of each Lender interest on the unpaid principal amount of each Loan made
by such Lender for the period from and including the date of such Loan to but
excluding the date such Loan shall be paid in full, at the following rates per
annum:

     

    (i)       if
such Loan is a Revolving Loan, the higher of (A) the Base Rate (as in effect
from time to time) plus
the Applicable Margin and (B) three and 49/100 percent (3.49%) per
annum;

     

    (ii)      if
such Loan is a Term Loan, during the period beginning on the date such Term Loan
is made to but excluding the Term Commitment Termination Date, the higher of (A)
the Base Rate (as in effect from time to time) plus the Applicable Margin
and (B) three and 49/100 percent (3.49%) per annum;

     

    (iii)     if
such Loan is a Term Loan, during the period beginning on the Term Commitment
Termination Date to but excluding the fifth anniversary of the Term Commitment
Termination Date, the higher (as determined once on the Term Commitment
Termination Date for the duration of such period) of (A) the five-year Treasury
rate plus three percent (3.00%) per annum and (B) five and 49/100 percent
(5.49%) per annum; and

     

    (iv)     if
such Loan is a Term Loan, from and after the fifth anniversary of the Term
Commitment Termination Date, the Five-Year Reset Rate.

     

    (b)    Notwithstanding
the foregoing, the Borrower acknowledges and agrees that if an Event of Default
shall have occurred and be continuing, then at the option of the Majority
Lenders, the unpaid balance of all Loans shall bear interest, to the fullest
extent permitted by law, at an interest rate (the “Post-Default Rate”) equal to
3% per annum above
the interest rate then applicable to each such Loan in effect on the day such
Event of Default occurs, until such Event of Default is cured or waived; provided, that if an
Event of Default of the kind referred to in Sections 9.01(h),
(i) or (j) occurs and is
continuing, then the unpaid balance of all Loans shall automatically bear such
additional Post-Default Rate interest, without the need for any notice or
election by the Majority Lenders or Administrative Agent.  The
Borrower hereby unconditionally agrees to pay to the Administrative Agent for
account of each Lender interest at the applicable Post-Default Rate as specified
in this paragraph from time to time on demand.

     

    (c)    Accrued
and unpaid interest on each Loan shall be payable (i) monthly in arrears on the
first day of each
calendar month, and on the Revolving Commitment Termination Date, Term
Commitment Termination Date and Maturity Dates, and (ii) upon the payment or
prepayment thereof (as to the principal amount paid or prepaid); provided, that
interest payable at the Post-Default Rate shall be payable on
demand.

     

    (d)    Whenever
any amount of principal of a Loan or of interest on a Loan that is due and
payable hereunder is not paid when due, the Majority Lenders may elect to
charge, and the Borrower shall pay to the Administrative Agent for account of
each Lender, in addition thereto a late charge equal to four percent (4%) of
such past due amount.  The Borrower shall pay the Administrative Agent
for account of each Lender such late charge on demand by Administrative
Agent.

     

    
      
         

      

      
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    (e)    The
Administrative Agent shall notify the Borrower and the Lenders to which such
interest is payable of the determination of any interest rate provided for
herein or any change thereto promptly after such determination or
change.

     

    (f)     Interest
on the Loans shall be computed on the basis of a year of 360 days and actual
days elapsed (including the first day but excluding the last day) occurring in
the period for which payable.

     

    (g)    All
agreements between the Obligors and the Lenders are hereby expressly limited so
that in no contingency or event whatsoever, whether by reason of acceleration of
maturity of the Secured Obligations or otherwise, shall the amount paid or
agreed to be paid to the Lenders for the use or the forbearance of the Secured
Obligations exceed the maximum permissible under applicable law.  As
used herein, the term “applicable law” shall mean the law of The Commonwealth of
Massachusetts in effect as of the date hereof; provided, that in the event there
is a change in the law which results in a higher permissible rate of interest,
then the Financing Documents shall be governed by such new law as of its
effective date.  In this regard, it is expressly agreed that it is the
intent of the Borrower and the Lenders in the execution, delivery and acceptance
of the Financing Documents to contract in strict compliance with the laws of The
Commonwealth of Massachusetts from time to time in effect.  If, under
or from any circumstances whatsoever, fulfillment of any provision of any
Financing Document at the time of performance of such provision shall be due,
shall involve transcending the limit of such validity prescribed by applicable
law, then the obligation to be fulfilled shall automatically be reduced to the
limits of such validity, and if under or from any circumstances whatsoever the
Lenders should ever receive as interest an amount which would exceed the highest
lawful rate, such amount which would be excessive interest shall be applied to
the reduction of the principal balance of the Secured Obligations and to the
payment of interest.  This provision shall control every other
provision of the Financing Documents.

     

    Section
3.03     Optional
Prepayments.

     

    (a)    Subject
to Section
3.05, the Borrower shall have the right to prepay any Revolving Borrowing
in whole or in part, at any time and from time to time, without penalty or
premium, provided
that:

     

    (i)       each
partial, optional prepayment of the Revolving Borrowings shall be in the minimum
amount of $100,000 or an integral multiple of $100,000 in excess thereof or, if
less, the full outstanding balance on the Revolving Borrowings, as applicable,
in each case together with all accrued interest on the amount prepaid through
the date of prepayment; and

     

    (ii)      prepayments
of Revolving Borrowings shall be made upon at least one (1) Business Day’s
notice.

     

    (b)    Subject
to Section
3.05, the Borrower shall have the right to prepay any Term Borrowing in
whole or in part, at any time and from time to time, provided
that:

     

    
      
         

      

      
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    (i)       each
partial, optional prepayment of any Term Borrowing shall be in the minimum
amount of $500,000 or an integral multiple of $250,000 in excess thereof or, if
less, the full outstanding balance on such Term Borrowing, together with all
accrued interest on the amount prepaid through the date of prepayment and, to
the extent applicable, all fees payable under Section 2.08(b); and

     

    (ii)      prepayments
of any Term Borrowing shall be made upon at least one (1) Business Day’s
notice.

     

    Section
3.04    Mandatory
Prepayments.

     

    (a)    Asset
Sales.  Without limiting the obligation of the Borrower to
obtain the consent of the Majority Lenders pursuant to Section 8.04 to any
Disposition not otherwise permitted under this Agreement, not more than three
Business Days following the Borrower’s receipt of Net Cash Payments from any
Disposition not permitted under Section 8.04, the
Borrower will deliver to the Administrative Agent a certificate of a Responsible
Officer, in form and substance reasonably satisfactory to the Administrative
Agent, of the amount of the Net Available Proceeds of such Disposition and
either (x) reinvest such Net Available Proceeds within 180 days or (y) prepay
the Loans and/or provide cover for LC Exposure as specified in Section 2.08(k)
(and/or if an Event of Default has occurred and is continuing and the Majority
Lenders’ so require at their option, the Revolving Commitments shall be subject
to automatic reduction as provided in Section 3.04(f)), in each case in an
aggregate amount equal to 100% of the Net Available Proceeds of such
Disposition.

     

    (b)    Insurance
Proceeds.  In the event that the Net Available Proceeds of any
Casualty Event affecting any property of Borrower or any of its Subsidiaries
(herein, the “Current Casualty
Event”), and of all prior Casualty Events as to which a prepayment has
not yet been made under this paragraph, shall exceed $50,000 then, on or before
the date 180 days after the receipt by Borrower of the proceeds of any
insurance, condemnation award or other compensation in respect of the Current
Casualty Event (or upon such earlier date as such Borrower or such Subsidiary
shall have determined not to repair or replace the property affected by the
Current Casualty Event), the Borrower shall either (x) reinvest such Net
Available Proceeds within said 180 days, or (y) prepay the Loans and/or provide
cover for LC Exposure as specified in Section 2.08(k) (and/or if an Event of
Default has occurred and is continuing and the Majority Lenders’ so require at
their option, the Revolving Commitments shall be subject to automatic reduction
as provided in Section 3.04(f)), in each case in an aggregate amount equal to
100% of the Net Available Proceeds of the Current Casualty Event and prior
Casualty Events as to which such prepayment has not yet been made under this
paragraph, to the extent such Net Available Proceeds of a prior Casualty Event
have not been reinvested under this Section
3.04(b).  Nothing in this paragraph shall be deemed to limit
any obligation of the Borrower or any Subsidiary thereof pursuant to any
Security Document to remit to a collateral or similar account maintained by the
Administrative Agent the proceeds of any insurance, condemnation award or other
compensation in respect of any Casualty Event except as provided for in this
clause (b).  In the event of receipt by any Obligor of key man life
insurance proceeds, if any, promptly after receipt by the relevant insured party
of proceeds of such insurance, if not paid directly to the Administrative Agent,
the Borrower shall prepay the Loans and/or provide cover for LC Exposure as
specified in Section 2.08(k) (and/or if an Event of Default has occurred and is
continuing and the Majority Lenders’ so require at their option, the Revolving
Commitments shall be subject to automatic reduction as provided in Section
3.04(f)), within 180 days after such receipt, in each case in an aggregate
amount equal to 100% (or such lesser percentage as the Majority Lenders may
elect in their sole discretion) of such Life Insurance Proceeds.

     

    
      
         

      

      
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    (c)    Equity
Issuances.  Subject to the last paragraph of Section 9.01, upon
receipt by Borrower or any other Obligor of Net Available Proceeds of any Equity
Issuance during the pendency of an Event of Default, if an Event of Default has
occurred and is continuing, then if the Majority Lenders’ so require at their
option, the Borrower shall prepay the Loans (and/or provide cover for LC
Exposure as specified in Section 2.08(k)) and/or the Revolving Commitments shall
be subject to automatic reduction, in each case in an aggregate amount equal to
100% of the Net Available Proceeds thereof.

     

    (d)    Change in
Control.  Upon the occurrence of a Change in Control, the
Borrower shall prepay all Loans in full.

     

    (e)    Excess Cash Flow;
Acquisitions.  Within five Business Days after the date by
which annual financial statements are required to have been delivered pursuant
to Section 7.01(a), if the Consolidated Senior Leverage Ratio for and as of the
end of the fiscal year covered by such annual financial statements is greater
than 2.0 to 1.0 on a pro
forma basis, after giving effect to any Acquisitions (as if such
Acquisitions had been made on the first day of such fiscal year) and related
outstanding Term Borrowings made during the fiscal year covered by such
financial statements, then the Borrower shall prepay the Term Loans in an
aggregate principal amount equal to the excess (if any) of (1) 25% of Excess
Cash Flow for the fiscal year covered by such financial statements over (2) the
aggregate principal amount of Term Loans prepaid pursuant to Section 3.03(b)
during such fiscal year.

     

    (f)     Application.  Prepayments
and/or reductions of Commitments pursuant to this Section 3.04 shall be
applied as follows:

     

    1)           first, to prepay the Term
Loans and principal repayment installments thereof ratably in inverse order of
maturity;

     

    2)           second, after the payment in
full of the Term Loans, to prepay the outstanding LC Borrowings, and next to
prepay the outstanding Revolving Loans ratably and next, to provide cover for LC
Exposure as specified in Section 2.08(k);

     

    3)           third, after the payment in
full of all Loans, if an Event of Default has occurred and is continuing and if
the Majority Lenders so require at their option, to permanently reduce the
aggregate amount of the Revolving Commitments; and

     

    4)           last, any amount remaining
may be retained by the Borrower for use in the ordinary course of its
business.

     

    
      
         

      

      
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    Upon the
drawing of any LC that has been cash collateralized, the funds held as cash
collateral shall be applied (without any further action by or notice to or from
the Borrower or any other Obligor) to reimburse the LC Bank or the Lenders, as
applicable.

     

    (g)    Mandatory Prepayments of Revolving
Loans.

     

    (i)       If,
at any time or for any reason, the aggregate Revolving Exposure exceeds the
limitations set forth in Section 2.01(a) (an “Overadvance”), the Borrower
will forthwith (i) prepay the Revolving Loans, and (ii) if so requested by the
Majority Lenders, provide cover for LC Exposure as specified in Section 2.08(k),
in an aggregate amount equal to such excess.

     

    (ii)      In
the event of any partial reduction or termination of the Revolving Commitments,
then (x) at or prior to the date of such reduction or termination, the
Administrative Agent shall notify the Borrower of the aggregate Revolving
Exposures of all Lenders after giving effect to such reduction or termination
(as the case may be) and (y) if such sum would exceed the total Revolving
Commitments after giving effect to such reduction or termination, then the
Borrower shall, on the date of such reduction or termination, (1) prepay the
Revolving Loans, and (2) if so requested by the Majority Lenders, provide cover
for LC Exposure as specified in Section 2.08(k), in an amount sufficient to
eliminate such excess.

     

    Section
3.05     Notice of
Prepayments.  The Borrower shall notify the Administrative
Agent by telephone, confirmed by facsimile, of any prepayment under Section 3.04 not
later than 12:00 p.m. (Boston time), on the Business Day of such
prepayment.  Each such notice shall be irrevocable and shall specify
the prepayment date, the principal amount of each Borrowing or part thereof to
be prepaid and (for a mandatory prepayment) a reasonably detailed calculation of
the amount of such prepayment.  Promptly after receipt of any such
prepayment notice, the Administrative Agent shall advise the relevant Lenders of
the substance thereof.  Each prepayment of a Borrowing shall be
applied ratably to the Loans included in the prepaid
Borrowing.  Except as specified in Section 3.04(b), each
prepayment of a Borrowing shall be applied as set forth in Section
3.04(f).  All prepayments shall be made together with accrued
interest on the principal amount prepaid to the extent required by Section 3.02 and
prepayment fees to the extent required by Section
2.09(b).

     

    Section
3.06      [Intentionally Omitted]

     

    Section
3.07      Payments
Generally.

     

    (a)    Payments by the
Obligors.  All payments to be made by any Obligor shall be made
without condition or deduction for any counterclaim, defense, recoupment or
setoff.  Except to the extent otherwise provided herein or in any
other Financing Document, each Obligor shall make all payments of principal,
interest and other amounts to be made by such Obligor under the Financing
Documents in immediately available funds, without deduction, set-off or
counterclaim, to the Administrative Agent at the Administrative Agent’s Account
(except as otherwise expressly provided in this Agreement), prior to 12:00 noon
(Boston time) on the date when due.  Any amounts received after such
time on any date may, in the discretion of the Administrative Agent, be deemed
to have been received on the next succeeding Business Day for purposes of
calculating interest thereon.  The Administrative Agent shall
distribute any such payments received by it for account of any other Person to
the appropriate recipient promptly following receipt thereof.  All
amounts owing under any Financing Document are payable in U.S.
dollars.  Except to the extent otherwise provided herein, if any
payment under any Financing Document shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day and interest thereon shall be payable for the period of such
extension.

     

    
      
         

      

      
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    (b)    Application of Insufficient
Payments.  If at any time the Administrative Agent does not
receive sufficient funds to pay fully all amounts of principal, interest and
fees then due under the Financing Documents, such funds shall be applied (i)
first, to pay interest and fees then due under this Agreement, ratably among the
parties entitled thereto in accordance with the amounts of interest and fees
then due to such parties, and (ii) second, to pay principal and unreimbursed LC
Disbursements then due under this Agreement, ratably among the parties entitled
thereto in accordance with the amounts of principal and unreimbursed LC
Disbursements then due to such parties.

     

    (c)    Deductions by the Administrative
Agent.  If any Lender shall fail to make any payment required
to be made by it pursuant to Section 2.04(b), 2.08(e) or (f), or 3.07(d), then
the Administrative Agent may, in its discretion, apply any amounts thereafter
received by the Administrative Agent for account of such Lender to satisfy such
Lender’s obligations under said Sections until all such obligations are fully
paid.

     

    (d)    Non-Receipt of Funds by
Administrative Agent.  Unless the Administrative Agent shall
have been notified by a Lender or any Obligor prior to the date on which such
notifying party is scheduled to make payment to the Administrative Agent (in the
case of a Lender) of the proceeds of a Loan to be made by it hereunder or (in
the case of such Obligor) a payment to the Administrative Agent for the account
of the Lenders or the LC Bank hereunder (each payment being herein called a
“Required Payment”),
which notice shall be effective upon receipt, that it does not intend to make
the Required Payment to the Administrative Agent, the Administrative Agent may
assume that the Required Payment has been made and may, in reliance upon such
assumption (but shall not be required to), make the amount thereof available to
the intended recipient(s) on such date and, if such Lender or such Obligor (as
the case may be) has not in fact made the Required Payment to the Administrative
Agent, the recipient(s) of such payment shall, on demand, repay to the
Administrative Agent the amount so made available together with interest thereon
in respect of each day during the period commencing on the date such amount was
so made available by the Administrative Agent until but excluding the date the
Administrative Agent recovers such amount at (1) in the case of a payment to be
made by such Lender, the greater of the Federal Funds Rate and a rate determined
by the Administrative Agent in accordance with banking industry rules on
interbank compensation, plus any administrative, processing or similar fees
customarily charged by the Administrative Agent in connection with the
foregoing, and (2) in the case of a payment to be made by such Obligor, the
interest rate applicable to Revolving Loans.  If such Lender pays its
share of the applicable Borrowing to the Administrative Agent, then the amount
so paid shall constitute such Lender’s Loan included in such
Borrowing.  A notice of the Administrative Agent to any Lender or the
Borrower with respect to any amount owing under this paragraph shall be
conclusive, absent manifest error.

     

    
      
         

      

      
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    (e) 
Obligations of Lenders
Several.  The obligations of the Lenders hereunder to make
Loans, to fund participations in LCs and to make payments pursuant to Section
12.03(c) are several and not joint.  The failure of any Lender to make
any Loan, to fund any such participation or to make any payment under Section
12.03 on any date required hereunder shall not relieve any other Lender of its
corresponding obligation to do so on such date, and no Lender shall be
responsible for the failure of any other Lender to so make its Loan, to purchase
its participation or to make its payment under Section 12.03.

     

    Section
3.08          Pro Rata
Treatment.  Except to the extent otherwise provided in this
Agreement:

     

    (a)           each
Borrowing of a particular Class shall be made from the relevant Lenders, each
payment of LC fees under Section 2.09 shall be made for account of the Lenders,
and each termination or reduction of Commitments of a particular Class shall be
applied to the respective Commitments of such Class of the relevant Lenders,
ratably according to the amounts of their respective Commitments of such
Class;

     

    (b)           each
Borrowing of any Class shall be allocated ratably among the relevant Lenders
according to the amounts of their respective Commitments of such Class, or their
respective Loans of such Class that are to be included in such
Borrowing;

     

    (c)           each
payment or prepayment of principal of Loans by the Borrower shall be made for
account of the relevant Lenders ratably in accordance with their respective
unpaid principal amounts of the Loans of such Class held by them;
and

     

    (d)           each
payment of interest on the Loans by the Borrower shall be made for account of
the relevant Lenders ratably in accordance with the amounts of interest on such
Loans then due and payable to the respective Lenders.

     

    Section
3.09          Lender Protective
Advances.  The Borrower hereby authorizes the Lenders, from
time to time in the Lenders’ sole discretion, (i) after the occurrence of a
Default (but without constituting a waiver of such Default), or (ii) at any time
that any of the other applicable conditions precedent set forth in Section 5.02
have not been satisfied, to make Revolving Loans to the Borrower on behalf of
the Lenders which the Lenders, in good faith, determine are necessary (A) to
preserve or protect the Collateral, or any portion thereof, (B) to enhance the
likelihood of repayment of the Secured Obligations, or (C) to pay any other
amount chargeable to the Borrower pursuant to the terms of this Agreement,
including costs, fees, and expenses (any of the Revolving Loans described in
this Section being hereinafter referred to as “Lender Protective
Advances”).  The Lender Protective Advances shall be repayable
on demand and secured by the Collateral, shall constitute Revolving Loans and
Secured Obligations hereunder, and shall bear interest at the same rate as
Revolving Loans.

     

    
      
        
        

      

      
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    ARTICLE
IV

     

    SUBSIDIARY
GUARANTEE

     

    Section
4.01         The Guarantee.  The
Guarantors hereby jointly and severally guarantee (the “Subsidiary Guarantee”), each
as a primary obligor and not merely as a surety, to each Secured Party and its
successors and assigns, the prompt payment in full when due (whether at stated
maturity, by acceleration or otherwise) of the principal of and interest on the
Loans made by the Lenders to, and the Notes held by each Lender of, the
Borrower, and the prompt payment and performance of all other amounts and all
other Secured Obligations from time to time owing to any Lender or the other
Secured Parties by any Obligor under any Financing Document, any Secured Cash
Management Agreement or any Secured Hedge Agreement (including all renewals,
extensions, amendments, refinancings and other modifications thereof and all
costs, attorneys’ fees and expenses incurred by the Secured Parties in
connection with the collection or enforcement thereof, and including all such
amounts which would become due but for the operation of the automatic stay under
Section 362(a) of the United States Bankruptcy Code, 11 USC. §362(a), and the
operation of Sections 502(b) and 506(b) of the United States Bankruptcy Code, 11
USC §502(b) and §506(b) or under similar provisions of applicable bankruptcy or
insolvency laws of other relevant jurisdictions), in each case strictly in
accordance with the terms thereof (such obligations being herein collectively
called the “Guaranteed
Obligations”).  The Guarantors hereby further jointly and
severally agree that if Borrower or any other Guarantor(s) shall fail to pay in
full when due (whether at stated maturity, by acceleration or otherwise) any of
the Guaranteed Obligations, the Guarantors will promptly pay the same in cash
and/or perform the same, without any demand or notice whatsoever, and that in
the case of any extension of time of payment or renewal of any of the Guaranteed
Obligations, the same will be promptly paid in full when due (whether at
extended maturity, by acceleration or otherwise) in accordance with the terms of
such extension or renewal.

     

    Section
4.02         Obligations
Unconditional.  The obligations of the Guarantors under Section 4.01 are
absolute and unconditional, joint and several, irrespective of the value,
genuineness, validity, regularity or enforceability of the obligations of the
Borrower or any other Obligor under this Agreement or any other agreement or
instrument referred to herein, or any substitution, release or exchange of any
other guarantee of or security for any of the Guaranteed Obligations, and, to
the fullest extent permitted by applicable law, irrespective of any other
circumstance whatsoever that might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor, it being the intent of this Section 4.02 that the
obligations of the Guarantors hereunder shall be absolute and unconditional,
joint and several, under any and all circumstances.  Without limiting
the generality of the foregoing, it is agreed that the occurrence of any one or
more of the following shall not alter or impair the liability of the Guarantors
hereunder, which shall remain absolute and unconditional as described
above:

     

    (a) 
at any time or from time to time, without notice to the Guarantors, the time for
any performance of or compliance with any of the Guaranteed Obligations shall be
extended, or such performance or compliance shall be waived;

     

    (b) 
any of the acts mentioned in any of the provisions of this Agreement or any
other agreement or instrument referred to herein shall be done or
omitted;

     

    (c) 
the maturity of any of the Guaranteed Obligations shall be accelerated, or any
term, provision or condition of this Agreement or of the Guaranteed Obligations
shall be modified, supplemented, amended or restated in any respect, or any
right under this Agreement or any other agreement or instrument referred to
herein shall be waived or any other guarantee of any of the Guaranteed
Obligations or any security therefor shall be released or exchanged in whole or
in part or otherwise dealt with; or

     

    
      
        
        

      

      
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    (d) 
any lien or security interest granted to, or in favor of, the Administrative
Agent or any other Secured Party as security for any of the Guaranteed
Obligations shall fail to be perfected.

     

    The
Guarantors hereby expressly waive diligence, presentment, demand of payment,
protest and all notices whatsoever, and any requirement that the Administrative
Agent or any other Secured Party exhaust any right, power or remedy or proceed
against any Obligor under this Loan Agreement or any other agreement or
instrument referred to herein, or against any other Person under any other
guarantee of, or security for, any of the Guaranteed Obligations.

     

    Section
4.03         Reinstatement.  The
obligations of the Guarantors under this Article shall be automatically
reinstated if and to the extent that for any reason any payment by or on behalf
of the Borrower or any other Obligor in respect of the Guaranteed Obligations is
rescinded or must be otherwise restored by any holder of any of the Guaranteed
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and the Guarantors jointly and severally agree that
they will indemnify the Lenders and other Secured Parties on demand for all
costs and expenses (including fees of counsel) incurred by the Lenders or such
other Secured Parties in connection with such rescission or restoration,
including any such costs and expenses incurred in defending against any claim
alleging that such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.

     

    Section
4.04         Subrogation.  Each
Guarantor hereby agrees that until the payment and satisfaction in full in cash
of all Guaranteed Obligations (other than inchoate, unasserted indemnity
obligations that expressly survive termination of the Financing Documents) and
the expiration and termination of the Commitments of the Lenders under this
Agreement, it shall waive any claim and shall not exercise any right or remedy
arising by reason of any performance by it of its guarantee in Section 4.01, whether
by subrogation or otherwise, against any Obligor or any other guarantor of any
of the Guaranteed Obligations or any security for any of the Guaranteed
Obligations.  Any amount paid to any Guarantor on account of any such
subrogation rights prior to such payment, satisfaction, expiration and
termination shall be held in trust for the benefit of the Secured Parties and
shall forthwith be paid and turned over to the Administrative Agent in the exact
form received by such Guarantor (duly endorsed in favor of the Administrative
Agent, if required), to be credited and applied against the Guaranteed
Obligations, whether matured or unmatured.  In furtherance of the
foregoing, at all times prior to such payment, satisfaction, expiration and
termination, each Guarantor shall refrain from taking any action or commencing
any proceeding against any other Obligor (or its successors or assigns, whether
in connection with a bankruptcy proceeding or otherwise) to recover any amounts
in respect of payments made under this Article IV to the
Administrative Agent. Any claims against the Borrower or any other Obligor to
which any Guarantor may be or become entitled (including, without limitation,
claims by subrogation, contribution or otherwise by reason of any payment or
performance by any Guarantor in satisfaction and discharge, in whole or in part,
of the Guaranteed Obligations) shall be and hereby are made subject and
subordinate in full to the prior payment in full, in cash, and performance in
full of the Guaranteed Obligations (other than inchoate, unasserted indemnity
obligations that expressly survive termination of the Financing
Documents).  If, notwithstanding the foregoing, any amount shall be
paid to any Guarantor by the Borrower at any time, except as expressly permitted
under this Agreement, such Guarantor shall hold such amount in trust for the
benefit of the Administrative Agent and shall forthwith deliver to the
Administrative Agent such amounts, with any necessary endorsements, for
application in reduction of the Guaranteed Obligations in accordance with the
terms hereof.

     

    
      
        
        

      

      
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    Section
4.05         Remedies.  The
Guarantors jointly and severally agree that, as between the Guarantors and the
Lenders, the obligations of the Borrower under this Agreement may be declared to
be forthwith due and payable as provided in Article IX (and shall
be deemed to have become automatically due and payable in the circumstances
provided in the penultimate paragraph of Article IX in case of
any event described in Section 9.01(h) or (i)) for purposes of Section 4.01
notwithstanding any stay, injunction or other prohibition preventing such
declaration (or such obligations from becoming automatically due and payable) as
against the Borrower and that, in the event of such declaration (or such
obligations being deemed to have become automatically due and payable), such
obligations (whether or not due and payable by the Borrower) shall forthwith
become due and payable by the Guarantors for purposes of Section
4.01.

     

    Section
4.06          Instrument for the Payment of
Money.  Each Guarantor hereby acknowledges that the guarantee
in this Article constitutes an instrument for the payment of money.

     

    Section
4.07          Continuing
Guarantee.  The guarantee in this Article is a continuing
guarantee, and shall apply to all Guaranteed Obligations whenever
arising.

     

    Section
4.08          Rights of
Contribution.  The Guarantors hereby agree, as among
themselves, that if any Guarantor shall become an Excess Funding Guarantor (as
defined below) by reason of the payment by such Guarantor of any Guaranteed
Obligations, each other Guarantor shall, on demand of such Excess Funding
Guarantor (but subject to the next sentence), pay to such Excess Funding
Guarantor an amount equal to such Guarantor’s Pro Rata Share (as defined below
and determined, for this purpose, without reference to the properties, debts and
liabilities of such Excess Funding Guarantor) of the Excess Payment (as defined
below) in respect of such Guaranteed Obligations.  The payment
obligation of a Guarantor to any Excess Funding Guarantor under this Section
shall be subordinate and subject in right of payment to the prior payment in
full in cash of the obligations of such Guarantor under the other provisions of
this Article and of all other Secured Obligations (other than inchoate,
unasserted indemnity obligations that expressly survive termination of the
Financing Documents), and such Excess Funding Guarantor shall not exercise any
right or remedy with respect to such excess until payment and satisfaction in
full in cash of all of the Secured Obligations (other than inchoate, unasserted
indemnity obligations that expressly survive termination of the Financing
Documents).

     

    
      
        
        

      

      
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    For
purposes of this Section, (i) “Excess Funding Guarantor”
means, in respect of any Guaranteed Obligations, a Guarantor that has paid an
amount in excess of its Pro Rata Share of such Guaranteed Obligations, (ii)
“Excess Payment” means,
in respect of any Guaranteed Obligations, the amount paid by an Excess Funding
Guarantor in excess of its Pro Rata Share of such Guaranteed Obligations and
(iii) “Pro Rata Share”
means, for any Guarantor, the ratio (expressed as a percentage) of (x) the
amount by which the aggregate present fair saleable value of all properties of
such Guarantor (excluding any Equity Interests of any other Guarantor) exceeds
the amount of all the debts and liabilities of such Guarantor (including
contingent, subordinated, unmatured and unliquidated liabilities, but excluding
the obligations of such Guarantor hereunder and any obligations of any other
Guarantor that have been Guaranteed by such Guarantor) to (y) the amount by
which the aggregate fair saleable value of all properties of all of the
Guarantors exceeds the amount of all the debts and liabilities (including
contingent, subordinated, unmatured and unliquidated liabilities, but excluding
the obligations of the Borrower and the Guarantors hereunder and under the other
Financing Documents) of all of the Guarantors, determined (A) with respect to
any Guarantor that is a party hereto on the Closing Date, as of the Closing
Date, and (B) with respect to any other Guarantor, as of the date such Guarantor
becomes a Guarantor hereunder.

     

    Section
4.09         General Limitation on Guarantee
Obligations.  In any action or proceeding involving any state
corporate law, or any state or Federal bankruptcy, insolvency, reorganization or
other law affecting the rights of creditors generally, if the obligations of any
Guarantor under Section 4.01 would
otherwise, taking into account the provisions of Section 4.08, be held
or determined to be void, invalid or unenforceable, or subordinated to the
claims of any other creditors, on account of the amount of its liability under
Section 4.01,
then, notwithstanding any other provision hereof to the contrary, the amount of
such liability shall, without any further action by such Guarantor, any Lender,
the Administrative Agent or any other Person, be automatically limited and
reduced to the highest amount that is valid and enforceable and not subordinated
to the claims of other creditors as determined in such action or
proceeding.

     

    Section
4.10         Best
Interests.  Each Obligor represents and warrants to the Lenders
and Administrative Agent that it is in the best interests of such Obligor to
enter into this Agreement inasmuch as the Obligors will, as a result of proceeds
of the Loans being made available hereunder for working capital and other
financing needs of the Borrower, derive substantial direct and indirect benefits
from the Loans made from time to time to the Borrower by the Lenders pursuant to
this Agreement, and each Obligor agrees that the Lenders are relying on this
representation in agreeing to make Loans to the Borrower.

     

    Section
4.11         Amendments to Financing
Documents.  Without limiting any other term of this Agreement,
each Guarantor acknowledges and agrees with the Secured Parties that the Secured
Parties may, at any time and from time to time, without notice to or consent of
the Guarantors, but with consent of the Borrower to the extent required by the
terms of this Agreement, amend, restate, modify, supplement, waive defaults or
events of default, release collateral or any Guarantor in whole or in part or
take or forbear from taking any other action whatsoever with respect to any
Financing Document, and any such action or inaction shall not impair as in any
manner affect the validity or enforceability of the Subsidiary
Guaranty.

     

    
      
        
        

      

      
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    Section
4.12        Joint and Several Obligations of
Guarantors.  Each of the Guarantors hereby accepts joint and
several liability under the Financing Documents in consideration of the
financial accommodations to be provided to the Borrower by the Lenders under the
Financing Documents, for the mutual benefit, directly and indirectly, of the
Guarantors and in consideration of the undertakings of the other Guarantors to
accept joint and several liability for the Guaranteed
Obligations.  The provisions of Article IV shall
apply, mutatis mutandis, to such joint and
several obligations of the Guarantors, with respect to such obligations of the
Borrower, as if (i) each reference therein to the “Guarantors” or a “Guarantor”
or the like shall be deemed to be a reference to the “Borrower” and (ii) each
reference therein to the “Borrower” shall be deemed to be a reference to the
“other Obligors”.  Each Guarantor represents and warrants to the
Lenders and other Secured Parties that such Guarantor is currently informed of
the financial condition of the Borrower and of all other circumstances which a
diligent inquiry would reveal and which bear upon the risk of nonpayment of the
Guaranteed Obligations.  Each Guarantor further represents and
warrants to the Lenders and other Secured Parties that such Guarantor has read
and fully understands the terms and conditions of the Financing
Documents.  Each Guarantor hereby covenants that such Guarantor will
continue to keep informed of the Borrower’s financial condition, the financial
condition of the other Guarantors, and of all other circumstances which bear
upon the risk of nonpayment or nonperformance of the Guaranteed
Obligations.

     

    ARTICLE
V

     

    CONDITIONS

     

    Section
5.01         Initial Loans.  The
effectiveness of this Agreement, and the obligations of the Lenders and/or the
LC Bank to make the first extension of credit hereunder (whether as a Borrowing
or by the issuance of an LC hereunder (including the deemed issuance of the
Existing LC hereunder)), are subject to satisfaction of the following conditions
precedent:

     

    (a) 
No Material Adverse
Change.  Since September 30, 2010, no material adverse change
in the business, assets, liabilities (actual or contingent), condition
(financial or otherwise), operations, performance or properties of the Obligors,
taken as a whole, or of the Borrower, shall have occurred and be continuing on
the Closing Date.

     

    (b) 
Documents.  The
Administrative Agent shall have received the following documents, each of which
shall be in form and substance reasonably satisfactory to the Administrative
Agent (and to the extent expressly specified below, to each Lender), and each
dated the Closing Date unless indicated otherwise:

     

    (i)           Financing
Documents.  The following Financing Documents, each duly
authorized, executed and delivered by all parties thereto and in full force and
effect.

     

    
      	
               
      

            	
              1.

            	
              Loan
      Agreement

            

    

    
      	
               
      

            	
              2.

            	
              Revolving
      Notes

            

    

    
      	
               
      

            	
              3.

            	
              Initial
      Term Notes

            

    

    
      	
               
      

            	
              4.

            	
              Security
      Agreement

            

    

    
      	
               
      

            	
              5.

            	
              Patent
      Security Agreement

            

    

    
      	
               
      

            	
              6.

            	
              Trademark
      Security Agreement

            

    

    
      	
               
      

            	
              7.

            	
              Fee
      Letter

            

    

    
      	
               
      

            	
              8.

            	
              Post-Closing
      Agreement

            

    

     

    
      
        
        

      

      
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    (ii)         Corporate
Documents.

     

    1)           A
certificate of a Secretary or a Responsible Officer of each Obligor certifying
(A) the names and true signatures of the officers of such Obligor authorized to
sign the Financing Documents and the other documents to be delivered thereunder
to which such Obligor is a party, (B) that attached thereto are true and correct
copies of the Certificate of Incorporation and By-laws, or other constitutive
documents, of such Obligor, and all amendments thereto, in each case as in
effect on the Closing Date, and (C) that attached thereto are true and correct
copies of the duly adopted resolutions of the board of directors (or other
equivalent governing body) of such Obligor approving or ratifying the Financing
Documents to which such Obligor is a party and the transactions contemplated
thereby, and that such resolutions have not been modified, rescinded or amended
and are in full force and effect.

     

    2)           Certificates
for each corporate Obligor with respect to the existence (from the Secretary of
State of its state of organization), foreign qualification and good standing of
each Obligor (where material in the case of states other than an Obligor’s state
of organization).

     

    (iii)        Collateral.

     

    1)           All
documents, including acknowledgment copies of all financing statements under the
UCC, and copies of recent UCC, US PTO, US Copyright Office, tax lien, judgment
and litigation search reports, with respect to each Obligor in each jurisdiction
required by law or reasonably requested by the Administrative Agent to be filed,
registered or recorded in order to create for the benefit of the Secured Parties
a valid, legal and first-priority perfected Lien on the Collateral;

     

    2)           from
any Person holding any Lien (other than any Lien permitted pursuant to the terms
hereof) on any Collateral, such UCC termination statements, mortgage releases or
pay-off letters, releases of Liens on intellectual property, releases of
assignments of leases and rents, and other instruments, each in proper form for
recording, as the Administrative Agent may reasonably request to release and
terminate of record the Liens on any Collateral;

     

    3)           intellectual
property documents in appropriate form for filing with the US PTO and US
Copyright Office;

     

    4)           evidence
that the Security Documents have been duly recorded and filed in all places in
the United States wherein such recording and filing are necessary to perfect the
Lien of the Secured Parties on the Collateral covered thereby under the UCC;
and

     

    5)           evidence
of the taking of all such other action as may be required in order to perfect
the Liens created under the Security Documents.

     

    
      
        
        

      

      
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    (iv)          
Officer’s
Certificate.  A certificate, duly and properly executed by a
Responsible Officer of each Obligor and dated as of the Closing Date and
certifying as to, among other matters reasonably required by the Administrative
Agent, satisfaction of conditions set forth in Sections 5.01(b)(vii),
5.01(c), 5.01(d), 5.02(c) and 5.02(d), and in the
second sentence of Section
5.02(e).

     

    (v)          
 Borrowing Base
Certificate.  A Borrowing Base Certificate, duly and properly
executed by a Responsible Officer of the Borrower, for the most recently
completed calendar month.

     

    (vi)          
Operating
Budget.  An annual operating budget (which shall include,
without limitation, a projected balance sheet, income statement and statement of
cash flows) for the fiscal year ending September 30, 2011 of the Borrower Group
prepared on a monthly basis which shall set forth in reasonable detail the
assumptions underlying such budget.

     

    (vii)         
No Other Material
Indebtedness.  After giving effect to the transactions
contemplated hereby, no Obligor shall have any material Indebtedness outstanding
other than the Loans hereunder, the guarantees thereof and Capital Lease
Obligations acceptable to the Lenders.

     

    (viii)      
  Insurance.  Certificates
as to coverage under the insurance policies required under Section 7.06 and the
Security Documents, which certificates shall name the Administrative Agent, on
behalf of the Secured Parties, as an additional insured or loss payee, as the
case may be, under all insurance policies maintained with respect to the
Properties of the Obligors that constitute Pledged Collateral.

     

    (ix)           Opinion of
Counsel.  Opinion of Foley Hoag LLP, counsel to the Obligors,
addressed to the Lenders and Administrative Agent, as to matters concerning the
Obligors and the Financing Documents to which they are party as the
Administrative Agent may reasonably request.

     

    (x)        
   Payment of
Fees.  Evidence of payment of all fees due and payable to the
Lenders and Administrative Agent on or before the Closing Date, and all
reasonable out-pocket expenses required to be reimbursed or paid by the Borrower
(including the reasonable legal fees and expenses of Choate, Hall & Stewart
LLP, special counsel to the Administrative Agent) under any Financing
Document.

     

    (xi)           Other
Documents.  Such other documents as the Administrative Agent or
special counsel to the Administrative Agent may reasonably request prior to the
date of this Agreement.

     

    (c) 
No
Litigation.  There shall be no litigation, administrative
proceeding, governmental investigation or other legal or regulatory
developments, actual or threatened in writing, that, singly or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect, or could
materially and adversely affect the ability of the Obligors to perform their
respective obligations under the Financing Documents, or the ability of the
parties to consummate the financings contemplated hereby.

     

    
      
        
        

      

      
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    (d) 
Requirements of
Law.  The Lenders shall be satisfied that the Obligors and
their Subsidiaries shall be in full compliance with all material laws, including
Regulations T, U and X of the Board.

     

    (e) 
Governmental
Approvals.  The Borrower shall have received all necessary
approvals from all material Governmental Authorities and from all Persons
required for the Borrower to consummate the borrowing of Loans on the Closing
Date and other transactions contemplated by the Financing Documents, and the
consummation of such transactions shall be in compliance with all Applicable
Laws.

     

    Section
5.02         Conditions to Each
Loan.  The obligation of any Lender to make any Loan (other
than the Term-Out of Term Loans pursuant to Section 2.01(b)(ii)), and of the LC
Bank to issue, amend, renew or extend any LC, is subject to satisfaction of the
following conditions:

     

    (a) 
Notice of Borrowing; Borrowing
Base Certificate.  The Administrative Agent shall have received
a Notice of Borrowing, duly executed and delivered in accordance with Section
2.02, and (with respect to Revolving Loans or any LC) a Borrowing Base
Certificate for the then most recently completed calendar month, duly executed
and delivered in accordance with Section 7.01(e) or 5.01(b)(v), as
applicable.

     

    (b) 
Availability.  The
total Revolving Exposures shall not exceed the availability limits specified in
Section 2.01 or 2.08, based in part on the Borrowing Base reflected on the most
recent Borrowing Base Certificate delivered pursuant to Section
7.01(e).

     

    (c) 
Representations and
Warranties.  The representations and warranties made by each
Obligor in the Financing Documents shall be true and correct in all material
respects (provided, that if any such representation warranty contains any
materiality qualification such as “in all material respects” or by referring to
a “Material Adverse Effect” or similar references, then such representation and
warranty shall be true and correct in all respects) on and as of the date of
such Loan or the date of such issuance, amendment, renewal or extension, as
applicable, with the same force and effect as if made on and as of such date
both before and after giving effect thereto, except to the extent that such
representations and warranties expressly relate to an earlier date.

     

    (d) 
No
Default.  At the time of and immediately after giving effect to
such Loan or the issuance, amendment, renewal or extension of such LC, as
applicable, and the application of the proceeds thereof, no Default shall have
occurred and be continuing.

     

    (e) 
No Legal
Bar.  No order, judgment or decree of any Governmental
Authority shall purport to bar any Lender from making any Loans to be made by it
or the LC Bank from issuing, amending, renewing or extending any LC, as
applicable.  No injunction or other restraining order binding on or
applicable to any Obligor or such Obligor’s Property shall have been issued or
shall be pending with respect to any action, suit or proceeding seeking to
enjoin or otherwise prevent the consummation of, or to recover any damages or
obtain relief as a result of, the transactions contemplated by the Financing
Documents.

     

    
      
        
        

      

      
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    The
delivery of a Notice of Borrowing, the acceptance by the Borrower of the
proceeds of each Loan, and each issuance, amendment, renewal or extension of an
LC, shall constitute a representation and warranty by the Borrower on the date
thereof that the conditions specified in this Section 5.02 (other than the first
sentence of Section 5.02(e)) have been satisfied.

     

    ARTICLE
VI

     

    REPRESENTATIONS
AND WARRANTIES

     

    The
Borrower represents and warrants to the Administrative Agent and the Lenders
that:

     

    Section
6.01         Organization;
Powers.  Each of the Borrower and its Subsidiaries is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, has all requisite power and authority to carry
on its business as now conducted, and is qualified to do business in, and is in
good standing in, every jurisdiction where such qualification is required,
except where the failure to so qualify could not reasonably be expected to have
a Material Adverse Effect.

     

    Section
6.02         Authorization;
Enforceability.  The execution and delivery by each of the
Borrower and its Subsidiaries of, and performance of its obligations under, the
Financing Documents to which such Obligor is party, and the consummation of the
transactions contemplated thereby, are within such Obligor’s corporate or
equivalent powers and have been duly authorized by all necessary corporate,
partner, limited liability company and, if required, by all necessary
shareholder action.  This Agreement has been duly executed and
delivered by such Obligor and constitutes, and each of the other Financing
Documents to which it is a party when executed and delivered by such Obligor
will constitute, a legal, valid and binding obligation of such Obligor,
enforceable against such Obligor in accordance with its terms, except as such
enforceability may be limited by (a) bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or transfer, or similar laws of general
applicability affecting the enforcement of creditors’ rights and (b) the
application of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).

     

    Section
6.03         Governmental Approvals; No
Conflicts.  The execution and delivery by each of the Borrower
and its Subsidiaries of, and performance of such Obligor’s obligations under,
the Financing Documents to which such Obligor is a party, and the consummation
of the transactions contemplated thereby, do not and will not (a) require any
consent or approval of, registration or filing with, or any other action by, any
Governmental Authority or any other Person, except for (i) such as have been
obtained or made and disclosed in writing to the Administrative Agent, and are
in full force and effect, (ii) filing of UCC continuation statements in respect
of the Liens created pursuant to the Security Documents, (iii) filing of
intellectual property security filings outside the United States in respect of
the Liens created pursuant to the Security Documents and (iv) filings with the
SEC in connection with Borrower’s disclosure obligations under federal
securities laws, (b) contravene the
charter, by-laws or other organizational documents of such Obligor, (c) violate
any Applicable Law, (d) contravene, conflict with or result in a default under
(i) any Material Contract or any other indenture, material agreement or other
material instrument binding upon such Obligor or any of its Subsidiaries or
their respective Properties or (ii) any order, injunction, writ or decree of any
Governmental Authority or any arbitral award to which such Person or its
property is subject, or give rise to a right thereunder to require any payment
to be made by any such Person which could reasonably be expected to have a
Material Adverse Effect, and (e) except for the Liens created pursuant to the
Security Documents, result in the creation or imposition of any Lien on any
asset of such Obligor or any of its Subsidiaries.

     

    
      
        
        

      

      
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    Section
6.04          Financial Condition; No Material
Adverse Change; Solvency

     

    (a) 
Financial
Condition.  The Borrower has heretofore furnished to the
Lenders the consolidated balance sheet and statements of income, stockholders’
equity and cash flows of the Borrower and its Subsidiaries as of and for the
period ended September 30, 2010 audited by Mayer Hoffman McCann P.C.,
independent public accountants.  Such financial statements (i) were
prepared in accordance with GAAP consistently applied throughout the period
covered thereby, except as otherwise expressly noted therein; (ii) fairly
present the financial condition of the Borrower and its Subsidiaries as of the
date thereof and their results of operations for the period covered thereby in
accordance with GAAP consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein; and (iii) show all material
indebtedness and other liabilities, direct or contingent, of the Borrower and
its Subsidiaries as of the date thereof, including liabilities for taxes,
material commitments and Indebtedness, as and to the extent required by
GAAP.

     

    (b) 
No Material Adverse
Change.  Since September 30, 2010, there has been no Material
Adverse Effect.

     

    (c) 
Solvency.  The
Borrower is, individually and together with its Subsidiaries on a consolidated
basis, Solvent.

     

    Section
6.05          Properties.

     

    (a) 
Each of the Borrower and its Subsidiaries has good, legal and marketable title
to, or lawfully possesses valid and subsiding leasehold estate in and to, all of
its real and personal property and leasehold interests material to its business,
subject only to Liens permitted by Section 8.02 and
except for minor defects in title that do not interfere with its ability to
conduct its business as currently conducted or to utilize such properties for
their intended purposes.

     

    (b) 
Each of the Borrower and its Subsidiaries owns, or is licensed or otherwise has
the right to use, all trademarks, tradenames, copyrights, patents and other
intellectual property material to and reasonably necessary for their respective
businesses, and to the best of Borrower’s knowledge, the use thereof by the
Borrower and its Subsidiaries does not infringe upon the rights of any other
Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

     

    Section
6.06          Litigation.

     

    (a) 
Except as set forth on Schedule 6.06, there
are no actions, suits or proceedings by or before any arbitrator or Governmental
Authority now pending against or, to the knowledge of the Borrower or any of its
Subsidiaries, threatened in writing against the Borrower or any of its
Subsidiaries which (i) have a reasonable prospect of being determined adversely
against the Borrower or any of its Subsidiaries and, if so adversely determined,
could reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect or (ii) involve in any manner adverse to the Secured
Parties the Financing Documents or the transactions contemplated
thereby.

     

    
      
        
        

      

      
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    (b) 
Since the date of this Agreement, there has been no change in the status of
matters previously disclosed by the Borrower or any of its Subsidiaries to the
Lenders in writing that, individually or in the aggregate, has resulted in, or
could reasonably be expected to result in, a Material Adverse
Effect.

     

    Section
6.07          Environmental
Matters.

     

    (a) 
Each of the Borrower and its Subsidiaries has obtained all environmental, health
and safety permits, licenses and other authorizations required under all
Environmental Laws to carry on its business as now being or as proposed to be
conducted, except to the extent failure to have any such permit, license or
authorization could not reasonably be expected to (either individually or in the
aggregate) have a Material Adverse Effect.  Each of such permits,
licenses and authorizations is in full force and effect and each of the Borrower
and its Subsidiaries is in compliance with the terms and conditions thereof, and
is also in compliance with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and timetables
contained in any applicable Environmental Law or in any regulation, code, plan,
order, decree, judgment, injunction, notice or demand letter issued, entered,
promulgated or approved thereunder, except, in each case, to the extent failure
to comply therewith could not reasonably be expected to (either individually or
in the aggregate) have a Material Adverse Effect.  In addition, except
as set forth in Schedule
6.07:

     

    (i)           None
of the properties currently or formerly owned or operated by any Obligor or any
of its Subsidiaries is listed or proposed for listing on the National Priorities
List (“NPL”) under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended (“CERCLA”), or
on the Comprehensive Environmental Response and Liability Information System, as
provided for by 40 C.F.R. § 300.5 (“CERCLIS”) or any analogous
foreign, state or local list or is adjacent to any such property; there are no
and never have been any underground or above-ground storage tanks or any surface
impoundments, septic tanks, pits, sumps or lagoons in which Hazardous Materials
are being or have been treated, stored or disposed on any property currently
owned or operated by any Obligor or any of its Subsidiaries or, to the best of
the knowledge of the Obligors, on any property formerly owned or operated by any
Obligor or any of its Subsidiaries; there is no asbestos or asbestos-containing
material on any property currently owned or operated by any Obligor or any of
its Subsidiaries; and Hazardous Materials have not been released, discharged or
disposed of on any property currently or formerly owned or operated by any
Obligor or any of its Subsidiaries.

     

    (ii)           Neither
any Obligor nor any of its Subsidiaries is undertaking, and has not completed,
either individually or together with other potentially responsible parties, any
investigation or assessment or remedial or response action relating to any
actual or threatened release, discharge or disposal of Hazardous Materials at
any site, location or operation, either voluntarily or pursuant to the order of
any Governmental Authority or the requirements of any Environmental Law, in each
case that could reasonably be expected, individually or in the aggregate, to
result in a material liability to any Obligor or any of its Subsidiaries; and
all Hazardous Materials generated, used, treated, handled or stored at, or
transported to or from, any property currently or formerly owned or operated by
any Obligor or any of its Subsidiaries have been disposed of in a manner not
reasonably expected to result in material liability to any Obligor or any of its
Subsidiaries.

     

    
      
        
        

      

      
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    (b) 
No Liens have arisen under or pursuant to any Environmental Laws on any site or
facility owned, operated or leased by the Borrower or any of its Subsidiaries,
and, to the best of Borrower’s knowledge, no government action has been taken or
is in process that could subject any such site or facility to such Liens, and
neither the Borrower nor any of its Subsidiaries would be required to place any
notice or restriction relating to the presence of Hazardous Materials at any
site or facility owned by it in any deed to the real property on which such site
or facility is located.

     

    (c) 
All environmental investigations, studies, audits, tests, reviews or other
analyses conducted by or that are in the possession of the Borrower or any of
its Subsidiaries in relation to facts, circumstances or conditions at or
affecting any site or facility now or previously owned, operated or leased by
the Borrower or any of its Subsidiaries and that could reasonably be expected to
result in a Material Adverse Effect have been made available to the
Lenders.

     

    Section
6.08          Compliance with Laws and Agreements;
No Defaults.

     

    (a) 
Each of the Borrower and its Subsidiaries is in compliance in all material
respects with all foreign, federal, state and local statutes, laws, ordinances,
judgments, decrees, orders and governmental rules, regulations, policies and
guidelines applicable to it.  Since September 30, 2010, neither the
Borrower nor any Subsidiary has received any notice from any Governmental
Authority or any other Person of any alleged violation or noncompliance except
where failure to be in compliance could not reasonably be expected to have a
Material Adverse Effect.   Neither the Borrower nor any
Subsidiary thereof is in default under or with respect to, or a party to, any
contractual obligation that could, either individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

     

    (b) 
No Default has occurred and is continuing or would result from the consummation
of the transactions contemplated by this Agreement or any other Financing
Document.

     

    Section
6.09          Investment Company
Status.  Neither the Borrower nor any of its Subsidiaries is an
“investment company” as defined in, or subject to regulation under, the
Investment Company Act of 1940.

     

    Section
6.10          Taxes.  The
Borrower and its Subsidiaries have filed all Federal, state and other material
tax returns and reports required to be filed, and except as disclosed in the
Perfection Certificate on the date hereof (and for which adequate reserves have
been provided in accordance with GAAP), have paid all Federal, state and other
material taxes, assessments, fees and other governmental charges levied or
imposed upon them or their properties, income or assets otherwise due and
payable, except those which are being contested in good faith by appropriate
proceedings diligently conducted and for which adequate reserves have been
provided in accordance with GAAP.  There is no proposed tax assessment
against the Borrower or any Subsidiary that would, if made, have a Material
Adverse Effect.  On the date hereof, neither any Obligor nor any
Subsidiary thereof is party to any tax sharing agreement.  From and
after the date hereof, neither any Obligor nor any Subsidiary thereof is party
to any tax sharing agreement that results in or could reasonably be expected to
result in a Material Adverse Effect.

     

    
      
        
        

      

      
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    Section
6.11          ERISA.

     

    (a) 
Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code and other Federal or state laws.  Each
Plan that is intended to qualify under Section 401(a) of the Code has received a
favorable determination letter from the IRS or an application for such a letter
is currently being processed by the IRS with respect thereto and, to the best
knowledge of the Borrower, nothing has occurred which would prevent, or cause
the loss of, such qualification.  The Borrower and each ERISA
Affiliate have made all required contributions to each Plan subject to Section
412 of the Code, and no application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code has been made with
respect to any Plan.

     

    (b) 
There are no pending or, to the best knowledge of the Borrower, threatened
claims, actions or lawsuits, or action by any Governmental Authority, with
respect to any Plan that could reasonably be expected to have a Material Adverse
Effect.  There has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse
Effect.

     

    (c) 
(i) No ERISA Event has occurred or is reasonably expected to occur; (ii) no
Pension Plan has any Unfunded Pension Liability; (iii) neither the Borrower nor
any ERISA Affiliate has incurred, or reasonably expects to incur, any liability
under Title IV of ERISA with respect to any Pension Plan (other than premiums
due and not delinquent under Section 4007 of ERISA); (iv) neither the Borrower
nor any ERISA Affiliate has incurred, or reasonably expects to incur, any
liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Section 4201 or
4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the Borrower
nor any ERISA Affiliate has engaged in a transaction that could be subject to
Section 4069 or 4212(c) of ERISA.

     

    Section
6.12         Disclosure.  As of
the date hereof, the Borrower has disclosed to the Lenders all written
agreements, instruments and corporate or other restrictions to which it or any
of its Subsidiaries or any other Obligor is subject that, individually or in the
aggregate, would reasonably be expected to result in a Material Adverse
Effect.  None of the reports, financial statements, certificates or
other written information furnished by or on behalf of any Obligor to the
Lenders in connection with the negotiation of this Agreement and the other
Financing Documents or delivered hereunder or thereunder (as modified or
supplemented by other information so furnished), taken as a whole, contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, as of the date on which made, and in the light of
the circumstances under which they were made, not misleading; provided that, with
respect to projected financial information, the Borrower represents only that
such information was prepared in good faith based upon assumptions believed to
be reasonable at the time.

     

    
      
        
        

      

      
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    Section
6.13         Margin
Stock.  Neither the Borrower nor any of its Subsidiaries is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose, whether immediate, incidental or ultimate, of
buying or carrying Margin Stock, and no part of the proceeds of any extension of
credit hereunder will be used to buy or carry any Margin Stock.

     

    Section
6.14          Capitalization.  As
of the date hereof, the Equity Interests of the Borrower and its Subsidiaries
have been duly authorized and validly issued and are fully paid and
non-assessable.

     

    Section
6.15          Subsidiaries.

     

    (a) 
Set forth in Schedule
6.15(a) is a complete and correct list of all of the Subsidiaries of the
Borrower as of the date hereof, together with, for each such Subsidiary, (i) the
jurisdiction of organization of such Subsidiary, (ii) each Person holding
ownership interests in such Subsidiary and (iii) the nature of the ownership
interests held by each such Person and the percentage of ownership of such
Subsidiary represented by such ownership interests.

     

    (b) 
Except as disclosed in Schedule 6.15(b) and
except to the extent expressly permitted under Section 8.03 or 8.04
or as otherwise consented to by the Majority Lenders in writing, (i) each of the
Borrower and its Subsidiaries (if applicable) owns, free and clear of Liens
(other than Liens created pursuant to the Security Documents and other Permitted
Liens), and has the unencumbered right to vote (subject to the terms of the
Security Documents), all outstanding ownership interests in each Person shown to
be held by it in Schedule 6.15(b),
(ii) all of the issued and outstanding Equity Interests of each such Person
(excluding the Borrower) organized as a corporation is validly issued, fully
paid and nonassessable and (iii) there are no outstanding Equity Rights with
respect to such Person (excluding the Borrower) as of the date hereof, except
such as have been disclosed in the Borrower’s filings with the SEC in compliance
with applicable law.

     

    Section
6.16          Investments; Deposit
Accounts.  Set forth in Schedule 6.16 is a
complete and correct list of all Investments (including deposit accounts, demand
deposit accounts or similar accounts) (other than Investments permitted under
Section 8.07(b) through (h)) held by the Borrower or any of its Subsidiaries (or
in which the Borrower or any of its Subsidiaries has any interest) in any Person
on the date hereof and, for each such Investment, (x) the identity of the Person
or Persons holding such Investment and (y) the nature of such
Investment.  Except as disclosed in Schedule 6.16, each
of the Borrower and its Subsidiaries owns, free and clear of all Liens (other
than Liens created pursuant to the Security Documents and Permitted Liens), all
such Investments.

     

    Section
6.17          Real Property.  Set
forth on Schedule
6.17 is a list, as of the date hereof, of all of the real property
(including leasehold) interests held by the Borrower or any of its Subsidiaries,
indicating in each case whether the respective property is owned or leased, the
identity of the owner or lessee and the location of the respective
property.  

     

    
      
        
        

      

      
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    Section
6.18         Material
Indebtedness.  Schedule 6.18 is a
complete and correct list, as of the date hereof, of each credit agreement, loan
agreement, indenture, promissory note, guarantee, letter of credit or other
arrangement providing for or otherwise relating to any Indebtedness or any
extension of credit (or commitment for any extension of credit) to, or guarantee
by, the Borrower or any of its Subsidiaries outstanding on the date hereof the
aggregate principal or face amount of which equals or exceeds $100,000, and the
aggregate principal or face amount outstanding or that may become outstanding
under each such arrangement, in each case as of the date hereof, is correctly
described in Schedule
6.18.

     

    Section
6.19         Material
Liens.  Schedule 6.19 is a
complete and correct list, as of the date hereof, of each Lien securing
Indebtedness of the Borrower or any of its Subsidiaries (other than Liens
created pursuant to the Security Documents and Permitted Liens) outstanding on
the date hereof the aggregate principal or face amount of which equals or
exceeds (or may equal or exceed) $100,000 and covering any property of such
Person, and the aggregate Indebtedness secured (or that may be secured) by each
such Lien and the property covered by each such Lien, in each case as of the
date hereof, is correctly described in Schedule
6.19.

     

    Section
6.20         Security
Documents.  The Security Documents are effective to create in
favor of the Administrative Agent for the benefit of the Secured Parties legal,
valid and enforceable Liens on, and security interests in, all of the Collateral
purported to be covered thereby, and all necessary and appropriate recordings
and filings have been made in all necessary and appropriate public offices, and
all other necessary and appropriate action has been taken, so that each such
Security Document creates, in accordance with the requirements of the Security
Documents, a perfected Lien on and security interest in all right, title, estate
and interest of the Obligors in the Collateral (with respect to Intellectual
Property Collateral (used herein as defined in the Security Agreement) and
Equity Interests of foreign Subsidiaries, to the extent that perfection is
achieved by the filing of UCC financing statements) covered thereby, prior and
superior to all other Liens and subject to no other Liens, in each case other
than Permitted Liens.  When the Security Agreement (or a short form
thereof) is filed in the US PTO, and UCC financing statements are filed in the
applicable filing offices, and, with respect to foreign Intellectual Property
Collateral, appropriate filings are made in the relevant foreign jurisdictions,
the Liens created by the Security Agreement shall constitute fully perfected
Liens on, and security interests in, all right, title and interest of the
grantors thereunder in the Intellectual Property Collateral, subject to no Liens
other than Permitted Liens.

     

    Section
6.21          Receivables; Inventory;
Accounts.

     

    (a)           Each
Receivable reflected in the computations of Eligible Accounts Receivables
included in any Borrowing Base Certificate meets the criteria enumerated in the
definition of Eligible Accounts Receivables, except as disclosed in such
Borrowing Base Certificate or as disclosed in a timely manner in a subsequent
Borrowing Base Certificate or otherwise in writing to the Administrative
Agent.

     

    
      
        
        

      

      
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    (b)           The
Inventory reflected in the computations of Eligible Inventory included in any
Borrowing Base Certificate meets the criteria enumerated in the definition of
Eligible Inventory, except as disclosed in such Borrowing Base Certificate or as
disclosed in a timely manner in a subsequent Borrowing Base Certificate or
otherwise in writing to the Administrative Agent.  Unless otherwise
indicated in writing to the Administrative Agent (including any Borrowing Base
Certificate), (i) each Obligor has at all times maintained correct and accurate
records itemizing and describing the kind, type, quality and quantity of
Inventory in all material respects, such Obligor’s cost therefor and daily
withdrawals therefrom and additions thereto; (ii) each Obligor has not removed
any Eligible Inventory from the locations set forth or permitted in the
Financing Documents, except for sales of Inventory in the ordinary course of
such Obligor’s business and except to move Inventory directly from one location
set forth or permitted herein to another such location; (iii) such Eligible
Inventory has been produced, used, stored, shipped and maintained with all
reasonable care and caution and in accordance with applicable standards of
insurance and in conformity with applicable laws (including the requirements of
the Federal Fair Labor Standards Act of 1938, as amended and all rules,
regulations and orders related thereto); (iv) no Eligible Inventory has been
sold or shipped to any customer on consignment or approval, or any other basis
which entitles the customer to return or may obligate the Borrower or its
Subsidiaries  to repurchase such Inventory; and (v) all Eligible
Inventory consists of first quality saleable goods.

     

    (c)           Schedule
6.21(c) lists all banks and other financial institutions at which any Obligor
maintains deposits and/or other accounts as of the date hereof, and such
Schedule correctly identifies the name, address and telephone number of each
depository, the name in which such account is held, a description of the purpose
of the account and the complete account number of such account, in each case as
of the date hereof.

     

    Section
6.22         Anti-Terrorism
Laws.  None of the Borrower or any of its Subsidiaries is in
violation of any Anti-Terrorism Laws.  No Obligor or, to the best
knowledge of any Obligor, any Affiliate, broker or any other agent of such
Obligor acting or benefiting in any capacity in connection with the Loans or
LCs, is any of the following:

     

    (a) 
a Person that is listed in the annex to, or is otherwise subject to, the
Executive Order;

     

    (b) 
a Person owned or controlled by, or acting for on behalf of, any Person that is
listed in the annex to, or is otherwise subject to, the Executive
Order;

     

    (c) 
a Person with which any Lender is prohibited from dealing or otherwise engaging
in any transaction by any Anti-Terrorism Law;

     

    (d) 
a Person that commits, threatens or conspires to commit or supports “terrorism”
as defined in the Executive Order;

     

    (e) 
a Person that is named as a “specially designated national and blocked person”
on the most current list published by the U.S. Treasury Department Office of
Foreign Assets Control at its official website or any replacement website or
other official replacement publication of such list.

     

    No
Obligor and, to the knowledge of any Obligor, no Affiliate, broker or other
agent of such Obligor acting or benefiting in any capacity in connection with
the Loans or LCs (i) conducts any business or engages in making or receiving any
contribution of funds, goods or services to or for the benefit of any person
described in clauses (a) through (e) above, (ii) engages in any transaction
relating to, any property or interests in property blocked pursuant to the
Executive Order or (iii) engages in or conspires to engage in any transaction
that evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any Anti-Terrorism Law.

     

    
      
        
        

      

      
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    ARTICLE
VII

     

    AFFIRMATIVE
COVENANTS

     

    So long
as any of the Commitments are in effect and until payment in full in cash of all
Loans, all other Secured Obligations, and all other amounts payable by the
Obligors under the Financing Documents (other than inchoate, unasserted
indemnity obligations that expressly survive termination of the Financing
Documents):

     

    Section
7.01          Financial Statements and Other
Information.  The Borrower will furnish to the Administrative
Agent and each Lender:

     

    (a) 
within 120 days after the end of each fiscal year of the Borrower, the audited
consolidated balance sheet and related statements of operations, stockholders
equity and cash flows of the Borrower Group as of the end of and for such year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all reported on by Mayer Hoffman McCann P.C., BDO or other
independent public accountants of recognized national standing (without a “going
concern” or like qualification or exception and without any qualification or
exception as to the scope of such audit) to the effect that such consolidated
financial statements present fairly in all material respects the financial
condition and results of operations of the Borrower Group on a consolidated
basis in accordance with GAAP consistently applied;

     

    (b) 
within 50 days after the end of each of the first three fiscal quarters of each
fiscal year of the Borrower, the consolidated balance sheet and related
statements of operations and cash flows (including income statements) of the
Borrower Group as of the end of and for such fiscal quarter, and the then
elapsed portion of the fiscal year, setting forth in each case in comparative
form the figures for (or, in the case of the balance sheet, as of the end of)
the corresponding period or periods in the Borrower’s actual results of the
previous fiscal year, such consolidated statements to be certified by a
Responsible Officer of the Borrower as presenting fairly in all material
respects the financial condition and results of operations of the Borrower Group
on a consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit and other adjustments and the absence of
footnotes;

     

    (c) 
concurrently with any delivery of financial statements under clause (a) or (b)
of this Section, a Compliance Certificate of a Responsible Officer of the
Borrower, (i) certifying as to whether a Default has occurred and, if a Default
has occurred, specifying the details thereof and any action taken or proposed to
be taken with respect thereto, (ii) setting forth reasonably detailed
calculations demonstrating compliance with Section 8.14 and
(iii) stating whether any change in GAAP or in the application thereof has
occurred since the date of the audited financial statements referred to in Section 6.04 that has
affected such financial statements and, if any such change has occurred,
specifying the effect of such change on such financial statements;

     

    
      
        
        

      

      
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    (d) 
concurrently with any delivery of financial statements under clause (a) of this
Section, a certificate of the accounting firm that reported on such financial
statements stating whether they obtained knowledge during the course of their
examination of such financial statements of any Default under Section 8.14 of this
Agreement (which certificate may be limited or not delivered to the extent
required by accounting rules or guidelines or the policies of the accounting
firm);

     

    (e) 
as soon as available, but in any event within 20 days after the end of each
month, a Borrowing Base Certificate, including detailed accounts receivable
aging, accounts payable aging and inventory summary information, as at the end
of such month, duly certified by the chief executive officer, chief financial
officer, treasurer or controller of the Borrower;

     

    (f) 
within 60 days after the end of each fiscal year of the Borrower, commencing
with the fiscal year ending September 30, 2011, an annual operating budget
(which shall include, without limitation, a projected balance sheet, income
statement and statement of cash flows) for the next succeeding fiscal year of
the Borrower Group prepared on a quarterly basis which shall set forth in
reasonable detail the assumptions underlying such budget;

     

    (g) 
promptly after any request by the Administrative Agent or any Lender, copies of
any detailed audit reports, management letters or recommendations submitted to
the board of directors (or the audit committee of the board of directors) of any
Obligor by independent accountants in connection with the accounts or books of
any Obligor or any of its Subsidiaries, or any audit of any of
them;

     

    (h) 
promptly after the same become publicly available, copies of all periodic and
other reports, proxy statements, registration statements and other materials
filed by any member of the Borrower Group with the SEC, or any material
documents with any national securities exchange;

     

    (i) 
promptly, and in any event within five Business Days after receipt thereof by
any Obligor or any Subsidiary thereof, copies of each notice or other
correspondence received from the SEC (or comparable agency in any applicable
non-U.S. jurisdiction) concerning any investigation or possible investigation or
other inquiry by such agency regarding financial or other operational results of
any Obligor or any Subsidiary thereof; and

     

    (j) 
promptly following any request therefor, such other information regarding the
operations, business affairs and financial condition of any Obligor, or
compliance with the terms of any Financing Document, as the Lender may
reasonably request.

     

    Documents
required to be delivered pursuant to Section 7.01(a), (b) or
(h) (to the extent any such documents are included in materials otherwise
filed with the SEC) may be delivered electronically and if so delivered, shall
be deemed to have been delivered on the date on which the Borrower posts such
documents, or provides a link thereto on the Borrower’s website on the Internet
at the Borrower’s website address provided pursuant to Section 12.01; provided
that:  (i) if such documents are not accessible from such Borrower’s
website, then the Borrower shall deliver paper copies of such documents to the
Administrative Agent or any Lender that requests the Borrower to deliver such
paper copies until a written request to cease delivering paper copies is given
by the Administrative Agent or such Lender, and (ii) the Borrower shall notify
the Administrative Agent and each Lender (by facsimile or electronic mail) of
the posting of the documents required to be delivered pursuant to Section 7.01(a) and
(b) and of any Form 8-Ks and, at the Administrative Agent’s request,
provide to the Administrative Agent by electronic mail electronic versions
(i.e., soft copies) of such documents.  The Administrative Agent shall
have no obligation to request the delivery or to maintain copies of the
documents referred to above, and in any event shall have no responsibility to
monitor compliance by the Borrower with any such request for delivery, and each
Lender shall be solely responsible for requesting delivery to it or maintaining
its copies of such documents.

     

    
      
        
        

      

      
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    The
Borrower hereby acknowledges that (a) the Administrative Agent will make
available to the Lenders and the LC Bank materials and/or information provided
by or on behalf of the Borrower hereunder (collectively, “Borrower Materials”) by
delivering the Borrower Materials electronically using the Administrative
Agent’s customary procedures and (b) certain of the Lenders (each, a “Public Lender”) may have
personnel who do not wish to receive material non-public information with
respect to the Borrower or its Affiliates, or the respective securities of any
of the foregoing, and who may be engaged in investment and other market-related
activities with respect to such Persons’ securities.  The Borrower
hereby agrees that, at the Administrative Agent’s request, the Borrower will use
commercially reasonable efforts to identify that portion of the Borrower
Materials that may be distributed to the Public Lenders and that (w) all such
Borrower Materials shall be clearly and conspicuously marked “PUBLIC” which, at
a minimum, shall mean that the word “PUBLIC” shall appear prominently on the
first page thereof; (x) by marking Borrower Materials “PUBLIC,” the Borrower
shall be deemed to have authorized the Administrative Agent, the LC Bank and the
Lenders to treat such Borrower Materials as not containing any material
non-public information (although it may be sensitive and proprietary) with
respect to the Borrower or its securities for purposes of United States Federal
and state securities laws (provided, however, that to the extent such Borrower
Materials constitute Information, they shall be treated as set forth in Section
12.12); (y) all Borrower Materials marked “PUBLIC” are permitted to be made
available through a portion of the Platform designated “Public Side
Information;” and (z) the Administrative Agent shall be entitled to treat any
Borrower Materials that are not marked “PUBLIC” as being suitable only for
posting on a portion of the Platform not designated “Public Side
Information.”  Notwithstanding the foregoing, the Borrower shall be
under no obligation to mark any Borrower Materials “PUBLIC”.

     

    Section
7.02          Notices of Material
Events.  Each Obligor will furnish to the Administrative Agent
and each Lender, promptly after obtaining knowledge of same, written notice of
the following:

     

    (a) 
the occurrence of any Default;

     

    (b) 
any matter that has resulted or, to a Responsible Officer’s knowledge, could
reasonably be expected to result in a Material Adverse Effect;

     

    (c) 
the occurrence of any ERISA Event that, alone or together with any other ERISA
Events that have occurred, could reasonably be expected to result in liability
of the Borrower Group in an aggregate amount exceeding $500,000;

     

    
      
        
        

      

      
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    (d) 
the assertion of any Environmental Claim by any Person against, or with respect
to the activities of, any Obligor or any Subsidiary thereof and any alleged
violation of or non-compliance with any Environmental Laws or any permits,
licenses or authorizations, other than any Environmental Claim or alleged
violation that could not (either individually or in the aggregate) reasonably be
expected to have a Material Adverse Effect;

     

    (e) 
any Disposition, Casualty Event, Equity Issuance or incurrence of Indebtedness
that would require a mandatory prepayment under Section 3.04 (excluding
Dispositions pursuant to Section
8.04);

     

    (f) 
any material change in accounting policies or financial reporting practices by
the Borrower Group;

     

    (g) 
promptly after the furnishing thereof, copies of any default notices,
amendments, waivers, reservation of rights notices, or other material statements
furnished to or by any holder of Material Indebtedness or Subordinated Debt of
any Obligor or of any of the Borrower’s Subsidiaries pursuant to the terms of
any promissory note, indenture, loan or credit or similar agreement and not
otherwise required to be furnished to the Administrative Agent pursuant to
Section 7.01 or any other clause of this Section 7.02;

     

    (h) 
the receipt of any notice from any Person under any Material Contract alleging
any material default thereunder.

     

    Each
notice delivered under this Section shall be accompanied by a statement of a
Responsible Officer of the Borrower or applicable Obligor setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.

     

    Section
7.03         Existence: Conduct of
Business.  Each Obligor will, and will cause each of its
Subsidiaries to, do or cause to be done all things necessary to preserve, renew
and keep in full force and effect its legal existence and the rights, licenses,
permits, privileges and franchises whose loss would reasonably be expected to
result in a Material Adverse Effect; provided that the
foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section
8.03.

     

    Section
7.04         Payment of
Obligations.  Each Obligor will, and will cause each of its
Subsidiaries to, pay all income and other material taxes, rates, assessments,
fees, and governmental charges upon or against it or its property but excluding
de minimis non-tax
liabilities, before the same shall become delinquent or in default, except where
(a) the validity or amount thereof is being contested in good faith by
appropriate proceedings, (b) the Borrower or such Subsidiary has set aside on
its books adequate reserves with respect thereto in accordance with GAAP and (c)
no proceedings to foreclose any Lien which has attached as security therefore
have commenced.

     

    
      
        
        

      

      
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    Section
7.05          Maintenance of Properties;
Inventory.

     

    (a) 
Each Obligor will, and will cause each of its Subsidiaries to, keep and maintain
all property material to the conduct of its business in working order and
condition, ordinary wear and tear and obsolete property and damage by casualty
excepted.

     

    (b) 
With respect to Inventory, the Borrower will, and will cause its Subsidiaries
to: (i) at all times maintain inventory records reasonably satisfactory to the
Administrative Agent, keeping materially correct and accurate records itemizing
and describing the kind, type, quality and quantity of Inventory, Borrower’s
cost therefor and daily withdrawals therefrom and additions thereto; (ii) not
remove any Eligible Inventory from the locations set forth or permitted in the
Financing Documents, without the prior written consent of the Administrative
Agent, which consent shall not be unreasonably denied or delayed, except (A) for
sales of Inventory in the ordinary course of business of the Borrower and its
Subsidiaries, (B) to move Inventory directly from one location set forth or
permitted herein to another such location and (C) to move Inventory from a
location that is subject to a force majeure event in order to preserve such
Inventory, so long as the Borrower delivers a Collateral Access Agreement to the
Administrative Agent for such new location within 30 days of such move; (iii)
produce, use, store, ship and maintain the Eligible Inventory with all
reasonable care and caution and in accordance with applicable standards of
insurance and in conformity with applicable laws (including the requirements of
the Federal Fair Labor Standards Act of 1938, as amended and all rules,
regulations and orders related thereto); (iv) not sell Eligible Inventory to any
customer on approval, or any other basis which entitles the customer to return
or may obligate the Borrower or any Subsidiary to repurchase such Inventory; (v)
shall keep the Eligible Inventory in first quality, saleable and marketable
condition; and (vi) not, without prior written consent of the Majority Lenders,
acquire or accept any Eligible Inventory on consignment or
approval.

     

    (c) 
On July 1, 2011, and on the first Business Day in each February and July
thereafter, the Borrower will order UCC search results with respect to it and
its Subsidiaries in applicable jurisdictions, and deliver a copy of such search
results, promptly after receipt thereof, to the Administrative
Agent.

     

    Section
7.06          Insurance.

     

    (a) 
Each Obligor will, and will cause each of its Subsidiaries to, maintain, with
financially sound and reputable insurance companies not Affiliates of the
Borrower, insurance in such amounts and against such risks as are customarily
maintained by companies engaged in the same or similar businesses operating in
the same or similar locations.  Such insurance shall be written by
financially responsible companies selected by the Borrower and licensed to do
business in the jurisdiction in which the Collateral is located and having the
highest or second highest rating available from A. M.
Best Company or an equivalent Person, or by other companies otherwise acceptable
to the Administrative Agent, and (other than workers’ compensation) shall name
the Administrative Agent as loss payee (to the extent covering risk of loss or
damage to tangible property other than cargo coverage) and as an additional
named insured as its interests may appear (to the extent covering any other risk
other than cargo coverage and worker’s compensation insurance).  Such
insurance shall provide that it will not be canceled or reduced, or allowed to
lapse without renewal, except after not less than 30 days’ notice to the
Administrative Agent.  The Borrower will advise the Administrative
Agent promptly of any policy cancellation, material reduction or material
amendment.

     

    
      
        
        

      

      
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    (b) 
On or before the Closing Date, the Borrower will deliver to the Administrative
Agent certificates of insurance reasonably satisfactory to the Administrative
Agent evidencing the existence of all insurance required to be maintained by the
Borrower hereunder setting forth the respective coverages, limits of liability,
carrier, policy number and period of coverage and showing that such insurance
will remain in effect through the September 30 next succeeding the date hereof,
subject only to the payment of premiums as they become
due.  Thereafter, (i) within 30 days after each September 30, the
Borrower will deliver to the Administrative Agent certificates of insurance
evidencing that all insurance required to be maintained by the Borrower
hereunder will be in effect through the following year, subject only to the
payment of premiums as they become due, and (ii) the Borrower will use its best
efforts to deliver to the Administrative Agent, within 60 days after each
September 30, copies of the insurance policies covering such following
year.  The Borrower will not obtain or carry separate insurance
concurrent in form or contributing in the event of loss with that required by
this Section unless the Administrative Agent is the named insured thereunder,
with loss payable as provided herein.  The Borrower will promptly
notify the Administrative Agent whenever any such separate insurance is obtained
and shall deliver to the Administrative Agent the certificates evidencing the
same.

     

    (c) 
Without limiting the obligations of the Obligors under the foregoing provisions
of this Section, in the event an Obligor shall fail to maintain in full force
and effect insurance as required by the foregoing provisions of this Section,
then the Administrative Agent may, but shall have no obligation so to do, upon
10 days’ prior written notice to the Borrower, procure insurance covering the
interests of the Secured Parties in such amounts and against such risks as the
Administrative Agent (or the Majority Lenders) shall deem appropriate, and the
Borrower shall reimburse the Administrative Agent in respect of any premiums
paid by the Administrative Agent in respect thereof.

     

    Section
7.07         Books and Records: Inspection
Rights.  Each Obligor will, and will cause each of its
Subsidiaries to, keep adequate books of record and account in which full, true
and correct entries are made of all material dealings and transactions in
relation to its business and activities.  Each Obligor will, and will
cause each of its Subsidiaries to, permit any representatives of or designated
by the Administrative Agent or any Lender, upon reasonable prior notice, to
visit and inspect its properties, to examine and make extracts from its books
and records, and to discuss its affairs, finances and condition with its
officers and independent accountants, all at such reasonable times during normal
business hours and as often as may be reasonably desired, upon reasonable
advance notice to the Borrower; provided, that (a) so long as no Event of
Default exists, the Borrower shall not be required to pay for more than one
appraisal (including a field exam and inventory appraisal) in any period of
twelve consecutive months and (b) when an Event of Default exists the
Administrative Agent or any Lender (or any of its representatives or designees)
may do any of the foregoing at the expense of the Borrower at any time during
normal business hours and without advance notice.

     

    Section
7.08          Compliance with
Laws.  Each Obligor will, and will cause each of its
Subsidiaries to, comply in all material respects with all Applicable
Laws.

     

    
      
        
        

      

      
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    Section
7.09          Use of
Proceeds.  The proceeds of the Revolving Loans will be used
only for working capital and general corporate purposes of the Borrower,
including the payment of fees and expenses incurred in connection with the
Financing Documents.   The proceeds of the Revolving Loans will
not be used to finance any Acquisitions.  The proceeds of the Term
Loans will be used only to finance Acquisitions permitted under Section 8.08,
stock repurchase permitted under Section 8.09 and other general corporate
purposes of the Borrower.  No part of the proceeds of any Loan or LC
credit extension will be used, whether directly or indirectly, for any purpose
that entails a violation of any of the Regulations of the Board, including
Regulations D, T, U and X.

     

    Section
7.10          Certain Obligations Respecting
Subsidiaries.

     

    (a) 
Guarantors.  Each
Obligor will, and will cause each of its Subsidiaries to, take such action from
time to time as shall be necessary to ensure that all United States domestic
Subsidiaries of such Obligor are “Guarantors” hereunder.  Without
limiting the generality of the foregoing, in the event that an Obligor or any of
its Subsidiaries shall form or acquire any new United States domestic Subsidiary
that shall constitute a Subsidiary hereunder, such Obligor will cause such new
domestic Subsidiary to, within 30 days (or such longer period as the
Administrative Agent, in its sole discretion, may designate) after such
formation or acquisition:

     

    (i)           become
a “Guarantor” hereunder pursuant to a Guarantee Assumption Agreement, and
execute joinders to the Security Agreement and other Security Documents thereby
granting the Administrative Agent a first priority lien on all of such
Guarantor’s assets (other than Equity Interests in any foreign Subsidiary of
such Guarantor, which shall be governed by Section 7.10(b)) as collateral
security for the Guaranteed Obligations, in form and substance reasonably
satisfactory to the Administrative Agent;

     

    (ii)           cause
such new United States domestic Subsidiary to take such action (including
delivering such certificates evidencing such Equity Interests, executing and
delivering such UCC financing statements and, if the fair market value of such
real property is equal to or greater than $1,000,000, subject to the following
proviso, executing and delivering mortgages or deeds of trust covering the real
property and fixtures owned or leased by such Subsidiary) as shall be necessary
to create and perfect valid and enforceable first-priority Liens on
substantially all of the property of such new Subsidiary as collateral security
for the obligations of such new Subsidiary under the Financing Documents; provided, that this
clause (ii) shall not apply to real property of such new Subsidiary acquired
pursuant to an Acquisition permitted under Section 8.08(b) if (A) such real
property is encumbered by an existing mortgage that is not refinanced by
Middlesex, (B) such existing mortgage lender’s security interest is restricted
to only the real property of such new Subsidiary and does not, in the Majority
Lenders’ judgment, conflict with the Administrative Agent’s Liens granted under
the Financing Documents and (C) the Borrower delivers such Collateral Access
Agreements and other Security Documents as the Majority Lenders or
Administrative Agent may reasonably request; and

     

    (iii)           deliver
such proof of corporate action, incumbency of officers, opinions of counsel and
other documents as is consistent with those delivered by each Obligor pursuant
to Section 5.01 on the Closing Date or as the Administrative Agent shall have
reasonably requested, all in form and substance reasonably satisfactory to the
Administrative Agent.

     

    
      
        
        

      

      
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    (b) 
Non-US
Subsidiaries.  In the event that any Obligor shall form or
acquire any new, first-tier foreign Subsidiary, such Obligor will, and will
cause such new foreign Subsidiary to, within 30 days (or such longer period as
the Administrative Agent, in its sole discretion, may designate) after such
formation or acquisition, (i) take such action (including delivering applicable
Security Certificates (as such term is defined in the Security Agreement)) as
shall be necessary or, in the Majority Lenders’ discretion, advisable to create
and perfect a valid and enforceable first-priority Lien in favor of the
Administrative Agent on 66-2/3% of the equity interests of such new Subsidiary
as collateral security for the Secured Obligations (provided that (A) so long as
no Event of Default has occurred and is continuing, no foreign law-governed
security and/or pledge agreements shall be required for such equity interests
unless the total assets of such foreign Subsidiaries that are not so subject to
such security and /or pledge agreements exceeds, individually or in the
aggregate, $3,000,000 and (B) if an Event of Default has occurred and is
continuing, then the Administrative Agent may require the Obligors to obtain
such foreign-law governed security and/or pledge agreements for up to 66-2/3% of
the equity interests of such foreign Subsidiaries as the Administrative Agent
may designate) and (ii) deliver such proof of corporate (or similar) action,
incumbency of officers, opinions of counsel and other documents as is consistent
with those delivered by each Obligor pursuant to Section 5.01 on the Closing
Date or as the Administrative Agent shall have requested.

     

    (c) 
Ownership of
Subsidiaries.  Each Obligor will, and will cause each of its
Subsidiaries to, take such action from time to time as shall be necessary to
ensure that each of its Subsidiaries is a Wholly Owned Subsidiary (except as
otherwise permitted in this Agreement).  In the event that any
additional Equity Interests shall be issued by any Subsidiary, subject to
Section 7.10(b), the respective Obligor agrees forthwith to deliver to the
Administrative Agent pursuant to the applicable Financing Document the
certificates evidencing such Equity Interests, accompanied by undated stock
powers executed in blank and to take such other action as the Administrative
Agent shall request to perfect the security interest created therein pursuant to
the Security Agreement.

     

    Section
7.11         Notice of Lease
Defaults.  The Borrower will give prompt notice to the
Administrative Agent of any notice of a material default Borrower or any
Guarantor receives under any material lease of real property to which an Obligor
is party.

     

    Section
7.12         Collateral Assignment of Key Person
Life Insurance.  If any Obligor obtains key person life
insurance in respect of any of its officers or directors, the Borrower will,
within thirty (30) days after obtaining any such insurance, deliver a collateral
assignment relating to such key person life insurance in form and substance
reasonably satisfactory to the Administrative Agent.

     

    
      
        
        

      

      
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    Section
7.13    Accounts.  The
Borrower will maintain, and cause each of the other Obligors to maintain, their
primary operating accounts, deposit accounts, disbursement accounts,
certificates of deposit, money market accounts and savings accounts with
Middlesex, except to the extent expressly permitted under Sections 3.6 and 3.7
of the Security Agreement or the Post-Closing Agreement; provided, that with
respect to the account listed on Schedule E, the
Borrower shall (1) sweep or cause to be swept all balances therein over $50,000
every other Business Day to Borrower’s account at Middlesex and (2) move such
account to Middlesex within 180 days after the date hereof (or such later date
as the Administrative Agent may, in its sole discretion, designate in
writing).  So long as no Event of Default has occurred and is
continuing and Borrower is in compliance with the foregoing proviso, no Account
Control Agreement for the account listed on Schedule E shall be
required.

     

    Section
7.14   Tax Sharing
Agreements.  Borrower will (a) provide the Administrative Agent
with at least five Business Days’ prior written notice of any Obligor entering
into a tax sharing agreement, together with a copy thereof, and (b) deliver to
the Administrative Agent a copy of each tax sharing agreement entered into by
any Obligor after the date of this Agreement, together with a certificate of the
Borrower executed by a Responsible Officer certifying that the making and
performance by such Obligor of such tax sharing agreement does not result in,
and could not reasonably be expected to result in, a Material Adverse
Effect.

     

    ARTICLE
VIII

     

    NEGATIVE
COVENANTS

     

    So long
as any of the Commitments are in effect and until payment in full in cash of all
Loans, all other Secured Obligations, and all other amounts payable by the
Obligors under the Financing Documents (other than inchoate, unasserted
indemnity obligations that expressly survive termination of the Financing
Documents):

     

    Section
8.01    Indebtedness.  The
Obligors will not, nor will they permit any of their respective Subsidiaries to,
create, incur, assume or permit to exist any Indebtedness, except:

     

    (a) 
Indebtedness created under the Financing Documents;

     

    (b) 
Indebtedness outstanding on the date hereof and set forth in Schedule 6.18, and
extensions, renewals and replacements of any such Indebtedness that do not
increase the aggregate outstanding principal amount thereof;

     

    (c) 
Indebtedness of an Obligor owed to any other Obligor, which Indebtedness shall
(i) be otherwise permitted under Section 8.07, (ii) constitute Collateral under
the Security Agreement and (iii) in the case of any Indebtedness of the Borrower
owed to any of its Subsidiaries, be on subordination terms reasonably acceptable
to the Administrative Agent;

     

    (d) 
(i) Indebtedness of the Borrower or any Subsidiary in respect of Capital Lease
Obligations and purchase money indebtedness obligations for fixed or capital
assets, provided that the
aggregate principal amount of Indebtedness permitted by this clause (d)(i) shall
not exceed $1,000,000 at any time outstanding; and (ii) Indebtedness of the
Borrower in respect of Capital Lease Obligations and purchase money indebtedness
obligations for the ERP equipment described in Schedule 8.01(d)(ii),
provided that
the aggregate principal amount of Indebtedness permitted by this clause (d)(ii)
shall not exceed $1,000,000 at any time outstanding;

     

    (e) 
endorsements of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business; and

    
      
         

      

      
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    (f) 
Guarantees of any Obligor in respect of Indebtedness otherwise permitted
hereunder of the Borrower; and Guarantees made by the Borrower of Indebtedness
of its Subsidiaries permitted under Section 8.01(j);

     

    (g) 
Indebtedness of any foreign Subsidiary of the Borrower owed to any Obligor in an
aggregate principal amount not to exceed $1,000,000 outstanding at any
time;

     

    (h) 
obligations (contingent or otherwise) existing or arising under any Hedging
Agreement, provided that (i) such obligations are (or were) entered into by such
Person in the ordinary course of business for the purpose of directly mitigating
risks associated with fluctuations in interest rates or foreign exchange rates
and (ii) such Hedging Agreement does not contain any provision exonerating the
non-defaulting party from its obligation to make payments on outstanding
transactions to the defaulting party; provided that the aggregate Swap
Termination Value thereof shall not exceed $1,000,000 (which amount may be
increased (so long as no Event of Default has occurred and is continuing) at the
Borrower’s request and with the Administrative Agent’s prior written consent,
not to be unreasonably withheld, after consultation with the Majority Lenders)
at any time outstanding;

     

    (i) 
with respect to an Acquisition permitted under Section 8.08, unsecured seller
Subordinated Debt (including any such Subordinated Debt in the form of earnouts
and other contingent payments in connection with any Acquisition that constitute
Indebtedness); and

     

    (j) 
unsecured Indebtedness in an aggregate principal amount not to exceed $500,000
at any time outstanding.

     

    Section
8.02    Liens.  No Obligor
will, nor will it permit any of its Subsidiaries to, create, incur, assume or
permit to exist any Lien on any property or asset now owned or hereafter
acquired by it or its Subsidiaries, or sign or file or suffer to exist under the
Uniform Commercial Code of any jurisdiction a financing statement that names
such Obligor or any of its Subsidiaries as debtor, or assign or sell any income
or revenues (including accounts receivable) or rights in respect of any thereof,
except:

     

    (a) 
Liens created pursuant to the Security Documents;

     

    (b) 
Liens existing on the date hereof and listed on Schedule 6.19 and any
renewals or extensions thereof, provided that (i) the
property covered thereby is not changed, (ii) the amount secured or benefited
thereby is not increased, (iii) the direct or any contingent obligor with
respect thereto is not changed, and (iv) any renewal or extension of the
obligations secured or benefited thereby is permitted by Section
8.01(b);

     

    (c) 
Liens for taxes not yet due or which are being contested in good faith and by
appropriate proceedings diligently conducted, in each case, if adequate reserves
with respect thereto are maintained on the books of the applicable Person in
accordance with GAAP;

     

    (d) 
carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like
Liens arising in the ordinary course of business which are not overdue for a
period of more than 60 days or which are being contested in good faith and by
appropriate proceedings diligently conducted, if adequate reserves with respect
thereto are maintained on the books of the applicable Person;

     

    
      
         

      

      
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    (e) 
pledges or deposits in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other social security
legislation, other than any Lien imposed by ERISA;

     

    (f) 
deposits to secure the performance of bids, trade contracts and leases (other
than Indebtedness), statutory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature incurred in the ordinary course of
business;

     

    (g) 
easements, rights-of-way, restrictions and other similar encumbrances affecting
real property which, in the aggregate, are not substantial in amount, and which
do not in any case materially detract from the value of the property subject
thereto or materially interfere with the ordinary conduct of the business of the
applicable Person;

     

    (h) 
Liens securing judgments for the payment of money not constituting an Event of
Default under Section 9.01(k);

     

    (i) 
Liens securing Indebtedness permitted under Section 8.01(d); provided that (i)
such Liens do not at any time encumber any property other than the property
financed by such Indebtedness and (ii) on the date of acquisition the
Indebtedness secured thereby does not exceed the cost or fair market value,
whichever is lower, of the property being acquired;

     

    (j) 
Liens securing Indebtedness permitted under Section 8.01(h); provided that (i)
at the time any such Lien is created or incurred, no Default has occurred and is
continuing, (ii) such Liens do not at any time encumber any Collateral and (iii)
such Liens do not at any time encumber any property other than cash and
Permitted Investments in an aggregate amount not exceeding $1,000,000 at any
time and the deposit or securities account to which such cash and Permitted
Investments are credited; and

     

    (k) 
Liens consisting of any right of offset, or statutory or other customary
bankers’ liens, existing solely with respect to cash and Permitted Investments
on deposit in or credited to Deposit Accounts or Securities Accounts
(hereinafter, as such terms are defined in the Security Agreement) maintained by
the Borrower or its Subsidiaries, in each case granted in the ordinary course of
business in favor of the bank(s) with which such accounts are maintained, so
long as (1) such Deposit Accounts or Securities Accounts are not established or
maintained for the purpose of providing such right of offset or bankers’ lien,
(2) to the extent required under the Security Agreement and Section 7.13,
Account Control Agreements with respect to such Deposit Accounts or Securities
Accounts are in full force and effect, (3) such Liens do not secure any
Indebtedness and (4) such Liens secure only such account bank’s customary fees
and expenses relating to such Deposit Accounts or Securities
Accounts.

     

    
      
        
        

      

      
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    Section
8.03    Mergers, Consolidations, Etc.;
Subsidiaries.

    (a) 
The Obligors will not, nor will they permit any of their respective Subsidiaries
to, merge into or consolidate with any other Person, or permit any other Person
to merge into or consolidate with any Obligor, or sell, transfer, lease or
otherwise dispose of (in one transaction or in a series of transactions) all or
substantially all of its assets, or all or substantially all of the Equity
Interests of any of its Subsidiaries (in each case, whether now owned or
hereafter acquired), or liquidate or dissolve, except, if at the time thereof
and immediately after giving effect thereto no Default shall have occurred and
be continuing:

     

    (i)           any
Subsidiary may merge with (1) the Borrower, provided that the Borrower shall be
the continuing or surviving Person, or (2) any one or more other Subsidiaries,
provided that when any Guarantor is merging with another Subsidiary that is not
a Guarantor, such Guarantor shall be the continuing or surviving
Person;

     

    (ii)         
any Guarantor may dispose of all or substantially all of its assets (upon
voluntary liquidation or otherwise) to any Obligor;

     

    (iii)      
  any Subsidiary that is not an Obligor may dispose of all or
substantially all its assets (including any Disposition that is in the nature of
a liquidation) to (1) another Subsidiary that is not an Obligor or (2) to an
Obligor;

     

    (b) 
No Obligor will form any Subsidiary without the prior written notice to the
Administrative Agent and without complying with the requirements of Section
7.10.

     

    Section
8.04    Dispositions.  The
Obligors will not, nor will they permit any of their respective Subsidiaries to,
make any Disposition or enter into any agreement to make any Disposition,
except:

     

    (a) 
Dispositions of surplus, obsolete or worn out property;

     

    (b) 
Dispositions of inventory in the ordinary course of business;

     

    (c) 
Dispositions of property by any Subsidiary of an Obligor to such
Obligor;

     

    (d) 
Dispositions permitted by Section 8.03;
and

     

    (e) 
Non-exclusive licenses of trademarks, service marks, trade names, copyrights,
patents, patent rights, franchises, licenses and other intellectual property
rights in the ordinary course of business and substantially consistent with past
practice;

     

    provided, that any
Disposition pursuant to clauses (a) through (e) (except to the extent expressly
permitted under Section 8.10) shall be for fair market value, which may be as
determined by the Board of Directors or equivalent authority of the applicable
Obligor.  Notwithstanding anything to the contrary herein, the
Obligors will not, nor will they permit any of their respective Subsidiaries to,
make any Disposition of (i) notes, accounts receivable or other obligations
owing to an Obligor, with or without recourse, except for collection in the
ordinary course of business, or (ii) any real property interests.

     

    Section
8.05    Sale/Leasebacks.  The
Obligors will not, nor will they permit any of their respective Subsidiaries to,
enter into any arrangement, directly or indirectly, with any Person whereby it
shall sell or transfer any of its Property, and whereby it shall then or
thereafter rent or lease as lessee such Property or any part thereof or other
Property which it intends to use for substantially the same purpose or purposes
as the Property sold or transferred, except Capital Leases permitted under Section
8.01.

    
      
         

      

      
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    Section
8.06    Lines
of Business.  No Obligor will, nor will it permit any of its
Subsidiaries to, engage to any material extent in any business other than
businesses of the type conducted or contemplated to be conducted by such Obligor
and its Subsidiaries on the date of this Agreement and businesses reasonably
related thereto.

     

    Section
8.07    Investments.  The
Obligors will not, nor will they permit any of their respective Subsidiaries to,
make or permit to remain outstanding any Investments except:

     

    (a) 
Investments outstanding on the date hereof and identified in Schedule 6.16 and any
modification, replacement or renewal thereof;

     

    (b) 
Permitted Investments;

     

    (c) 
(i) Investments by the Borrower and its Subsidiaries in their respective
Subsidiaries outstanding on the date hereof, (ii) additional Investments by the
Borrower and its Subsidiaries in Obligors, (iii) additional Investments by
Subsidiaries of the Borrower that are not Obligors in other Subsidiaries that
are not Obligors and (iv) Investments constituting Indebtedness permitted under
Section 8.01(c) or
(g);

     

    (d) 
Without duplication of Section 8.07(c)(iv),
Guarantees or assumptions of debt constituting Indebtedness permitted under
Section
8.01;

     

    (e) 
Advances, loans or extensions of credit by the Borrower or any Subsidiary in
compliance with applicable laws to officers, directors, managers, employees and
agents of the Borrower or any Subsidiary (i) in the ordinary course of business
for travel, entertainment or relocation, out-of-pocket or other business-related
expenses not to exceed $50,000 in the aggregate at any one time outstanding or
(ii) relating to indemnification or reimbursement of such officers, directors,
managers, employees and agents in respect of liabilities relating to their
service in such capacities;

     

    (f) 
Investments consisting of extensions of credit in the nature of accounts
receivable or notes receivable arising from the grant of trade credit in the
ordinary course of business, and Investments received in satisfaction or partial
satisfaction thereof from financially troubled account debtors to the extent
reasonably necessary in order to prevent or limit loss;

     

    (g) 
Investments permitted under Section 8.02(e), 8.02(f),
8.02(j), 8.03 or 8.08;

     

    (h) 
Deposits on deposit in or credited to Deposit Accounts and Securities Accounts
of the Borrower or any Subsidiary, solely to the extent such Deposit Accounts
and Securities Accounts are established and maintained strictly in compliance
with Section 7.13, the Security Agreement and the Post-Closing Agreement;
and

     

    (i) 
other Investments not exceeding $500,000 in the aggregate in any fiscal year of
the Borrower.

    
      
         

      

      
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    Section
8.08    Acquisitions.  No
Obligor will, nor will it permit any of its Subsidiaries to, enter into any
Acquisition without the prior written consent of the Majority Lenders, other
than:

     

    (a) 
transactions permitted by Section 8.03;

     

    (b) 
an Acquisition where, upon the consummation thereof, the acquired Person, line
of business, division or other property will be wholly-owned directly by the
Borrower or one or more of its Wholly Owned Subsidiaries (including as a result
of a merger or consolidation); provided that, with
respect to each purchase or other Acquisition made pursuant to this Section
8.08(b):

     

    (i)           any
such newly-created or acquired Subsidiary shall comply with the requirements of
Section 7.10;

     

    (ii)          the
lines of business of the Person to be (or the property of which is to be) so
purchased or otherwise acquired shall be within the same general industry and
lines of business as one or more of the principal businesses of the Borrower and
its Subsidiaries in the ordinary course; and such Acquisition shall not be a
hostile Acquisition;

     

    (iii)         such
Acquisition shall not include or result in any contingent liabilities that could
reasonably be expected to have a Material Adverse Effect on a pro forma basis,
taking into account such Acquisition;

     

    (iv)        such
Acquisition shall be accretive to Consolidated EBITDA, calculated on a pro forma
basis with add-back items to be mutually and reasonably agreed among the
Borrower and Administrative Agent;

     

    (v)         the
Majority Lenders have given their prior written consent (not to be unreasonably
withheld) to such Acquisition, except that such consent shall not be required
(A) so long as no Default has occurred and is continuing or would result from
such Acquisition and (B) (1) for an Acquisition paid for using all cash and/or
stock of the Borrower (and no proceeds of any Borrowings) or (2) unless the
cumulative, aggregate Acquisition Consideration for all Acquisitions from the
date hereof exceeds $6,500,000;

     

    (vi)         immediately
before and immediately after giving pro forma effect to any such Acquisition, no
Default shall have occurred and be continuing;

     

    (vii)        the
Borrower shall have delivered to the Administrative Agent (for distribution to
the Lenders) a certificate of a Responsible Officer setting forth calculations
in reasonable detail that demonstrate, immediately before and immediately after
giving pro forma effect to any such Acquisition, compliance with all of the
following financial covenants:

    
      
         

      

      
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    1)           the
pro forma historical Consolidated Debt Service Coverage Ratio as of the most
recently completed Rolling Period shall not be less than 1.35 to 1.00, such
compliance to be determined on the basis of the financial information most
recently delivered to the Administrative Agent and the Lenders pursuant to
Section 7.01(a) or (b) as though such Acquisition had been consummated as of the
first day of the fiscal period covered thereby, and based on the historical
financial information of the target of the Acquisition, and including any
proposed Term Borrowing to finance such Acquisition;

     

    2)           the
pro forma prospective Consolidated Debt Service Coverage Ratio as of the next
succeeding twelve-month period shall not be less than 1.35 to 1.00, such
compliance to be determined on the basis of the financial information most
recently delivered to the Administrative Agent and the Lenders pursuant to
Section 7.01(a) or (b) as though such Acquisition had been consummated as of the
first day of the fiscal period covered thereby, and financial projections with
respect to the Acquisition target and the Borrower Group (as determined in good
faith by the board of directors of the Borrower or such Subsidiary in their
reasonable business judgment based on reasonable assumptions), and including any
proposed Term Borrowing to finance such Acquisition;

     

    3)           the
pro forma historical Consolidated Senior Leverage Ratio as of the most recently
completed Rolling Period shall not exceed 2.50 to 1.00, such compliance to be
determined on the basis of the financial information most recently delivered to
the Administrative Agent and the Lenders pursuant to Section 7.01(a) or (b) as
though such Acquisition had been consummated as of the first day of the fiscal
period covered thereby, and based on the historical financial information of the
target of the Acquisition, and including any proposed Term Borrowing to finance
such Acquisition; and

     

    4)           the
pro forma prospective Consolidated Senior Leverage Ratio as of the next
succeeding twelve-month period shall not exceed 2.50 to 1.00, such compliance to
be determined on the basis of the financial information most recently delivered
to the Administrative Agent and the Lenders pursuant to Section 7.01(a) or (b)
as though such Acquisition had been consummated as of the first day of the
fiscal period covered thereby, and financial projections with respect to the
Acquisition target and the Borrower Group (as determined in good faith by the
board of directors of the Borrower or such Subsidiary in their reasonable
business judgment based on reasonable assumptions), and including any proposed
Term Borrowing to finance such Acquisition;

     

    provided that, for each of
the pro forma covenant tests described in the foregoing clauses (1) through (4),
the historical Consolidated EBITDA of the target of such Acquisition may, at the
Borrower’s reasonable request, be further adjusted for cost savings from such
Acquisition, to the extent approved in writing by the Administrative Agent in
the Administrative Agent’s reasonable discretion;

     

    (viii)      if
the Acquisition Consideration for any such Acquisition(s) exceeds $6,500,000,
individually or in the aggregate from the date hereof, the Administrative Agent
may, at its option, require the Borrower to deliver to the Administrative Agent
a bank field examination, in scope and substance, and with results, reasonably
satisfactory to the Administrative Agent, of the target of such
Acquisition;

    
      
         

      

      
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    (ix)         for
any such Acquisition, at least forty percent (40%) of the Adjusted Acquisition
Consideration paid by or on behalf of the Borrower and its Subsidiaries shall be
paid in cash and/or stock of the Borrower; and

     

    (x)          the
Borrower shall have delivered to the Administrative Agent (for distribution to
each Lender), at least five Business Days prior to the date on which any such
Acquisition is to be consummated, a certificate of a Responsible Officer, in
form and substance reasonably satisfactory to the Administrative Agent,
certifying that all of the requirements set forth in this Section 8.08(b) have
been satisfied or will be satisfied on or prior to the consummation of such
Acquisition.

     

    Section
8.09    Restricted
Payments.  No Obligor will, nor will it permit any of its
Subsidiaries to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment except:

     

    (a) 
the Borrower and each Subsidiary may declare and make dividend payments or other
distributions payable solely in the common stock or other common Equity
Interests of such Person;

     

    (b) 
Investments permitted under Sections 8.07(e) and 8.07(f);

     

    (c) 
repurchases of the Borrower’s stock in an aggregate, cumulative amount from the
date hereof not to exceed $20,000,000, so long as (i) no Default shall have
occurred and be continuing or will result therefrom, and (ii) the Borrower shall
have delivered to the Administrative Agent (for distribution to the Lenders) a
certificate of a Responsible Officer setting forth calculations in reasonable
detail that demonstrate, immediately before and (on a pro forma basis)
immediately after giving pro forma effect to such repurchase, compliance with
all of the following financial covenants:

     

    1)           the
pro forma historical Consolidated Debt Service Coverage Ratio as of the most
recently completed Rolling Period shall not be less than 1.35 to 1.00, such
compliance to be determined on the basis of the financial information most
recently delivered to the Administrative Agent and the Lenders pursuant to
Section 7.01(a) or (b) as though such repurchase had been consummated as of the
first day of the fiscal period covered thereby, and including any proposed Term
Borrowing to finance such repurchase;

     

    2)           the
pro forma prospective Consolidated Debt Service Coverage Ratio as of the next
succeeding twelve-month period shall not be less than 1.35 to 1.00, such
compliance to be determined on the basis of financial projections (as determined
in good faith by the board of directors of the Borrower in its reasonable
business judgment based on reasonable assumptions) and the financial information
most recently delivered to the Administrative Agent and the Lenders pursuant to
Section 7.01(a) or (b) as though such repurchase had been consummated as of the
first day of the fiscal period covered thereby, and including any proposed Term
Borrowing to finance such repurchase;

    
      
         

      

      
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    3)           the
pro forma historical Consolidated Senior Leverage Ratio as of the most recently
completed Rolling Period shall not exceed 2.50 to 1.00, such compliance to be
determined on the basis of the financial information most recently delivered to
the Administrative Agent and the Lenders pursuant to Section 7.01(a) or (b) as
though such repurchase had been consummated as of the first day of the fiscal
period covered thereby, and including any proposed Term Borrowing to finance
such repurchase; and

     

    4)           the
pro forma prospective Consolidated Senior Leverage Ratio as of the next
succeeding twelve-month period shall not exceed 2.50 to 1.00, such compliance to
be determined on the basis of financial projections (as determined in good faith
by the board of directors of the Borrower in its reasonable business judgment
based on reasonable assumptions) and the financial information most recently
delivered to the Administrative Agent and the Lenders pursuant to Section
7.01(a) or (b) as though such repurchase had been consummated as of the first
day of the fiscal period covered thereby, and including any proposed Term
Borrowing to finance such repurchase; and

     

    (d) 
so long as no Default (including in respect of Section 8.14) has occurred and is
continuing or would result therefrom, the Borrower may declare and pay cash
dividends with respect to its Equity Interests.

     

    Nothing
herein shall be deemed to prohibit the payment of dividends or distributions by
any Subsidiary to its parent company.

     

    Section
8.10    Transactions with
Affiliates.  No Obligor will, nor will it permit any of its
Subsidiaries to, sell, lease or otherwise transfer any property or assets to, or
purchase, lease or otherwise acquire any property or assets from, or otherwise
engage in any other transactions with, any of their Affiliates, except (i)
transactions in the ordinary course of business at prices and on terms and
conditions not less favorable to such Obligor or such Subsidiary than could be
obtained on an arm’s-length basis from unrelated third parties, (ii)
transactions solely among Obligors and (iii) transactions solely among foreign
Subsidiaries of the Borrower.

     

    Section
8.11    Restrictive
Agreements.  No Obligor will, nor will it permit any of its
Subsidiaries to, directly or indirectly, enter into, incur or permit to exist
any agreement or other arrangement that prohibits, restricts or imposes any
condition upon (i) the ability of such Obligor or any Subsidiary to create,
incur or permit to exist any Lien upon any of its property or assets in favor of
the Lender, or (ii) the ability of any Subsidiary to pay dividends or other
distributions with respect to any shares of its Equity Interests or to make or
repay loans or advances to any Obligor or any other Subsidiary or to Guarantee
Indebtedness of any Obligor or any other Subsidiary; provided that:

     

    (a) 
the foregoing shall not apply to (1) restrictions and conditions imposed by law
or by this Agreement and (2) restrictions and conditions existing on the date
hereof identified on Schedule 8.11 (or any
extension or renewal of, or any amendment or modification of, any such
restriction or condition that does not expand the scope thereof);
and

    
      
         

      

      
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    (b) 
clause (i) of the foregoing shall not apply to (1) restrictions or conditions
imposed by any agreement relating to secured purchase money Indebtedness or
Capital Leases permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such purchase money Indebtedness,
(2) customary provisions in leases and other contracts restricting the
assignment thereof and (3) executory covenants between signing and closing under
an agreement related to sales of property permitted hereunder.

     

    Section
8.12    Reserved.

     

    Section
8.13    Modifications of Certain Documents;
Tax Sharing.  No Obligor will, nor will it permit any of its
Subsidiaries to, without the prior written consent of the Majority Lenders, (i)
consent to any modification, supplement, refinancing or waiver of any
Subordinated Debt or any document evidencing any Subordinated Debt, (ii) amend
any of its or their constitutive documents or (iii) consent to any modification,
supplement or waiver of any Acquisition Documents or any agreement evidencing or
relating to Material Indebtedness, in each case in clauses (ii) and (iii), which
could reasonably be expected to be materially adverse to the
Lenders.  The Borrower will not, and will not permit any Subsidiary
to, prepay, redeem, purchase, defease or otherwise satisfy prior to the
scheduled maturity thereof in any manner, or make any payment in violation of
any subordination terms of, any Subordinated Debt. No Obligor will, nor will it
permit any of its Subsidiaries to, enter into any tax sharing arrangement which
results in, or could reasonably be expected to result in, a Material Adverse
Effect.

     

    Section
8.14    Certain
Financial Covenants.

     

    (a) 
Debt Service Coverage
Ratio.  The Borrower will not permit the Consolidated Debt
Service Coverage Ratio as of the end of any fiscal quarter of the Borrower,
commencing with the fiscal quarter ending on December 31, 2010, to be less than
1.35 to 1.0.

     

    (b) 
Senior Leverage
Ratio.  The Borrower will not permit the Consolidated Senior
Leverage Ratio at any time during any period of four fiscal quarters of the
Borrower (it being understood that the numerator of the Consolidated Senior
Leverage Ratio will be tested as of the applicable fiscal quarter end),
commencing with such period ending on September 30, 2010, to exceed 2.5 to
1.0.

     

    (c) 
To enable the ready and consistent determination of compliance with the
covenants set forth in this Section 8.14, the
Borrower will not change the last day of its fiscal year from September 30, or
the last days of the first three fiscal quarters in each of its fiscal years
from December 31, March 31 and June 30, respectively.

     

    
      
        
        

      

      
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    ARTICLE
IX

     

    DEFAULTS

     

    Section
9.01    Events
of Default.  If any of the following events (“Events of Default”) shall
occur:

     

    (a) 
the Borrower shall fail to pay any principal of any Loan or any LC Reimbursement
Obligation when and as the same shall become due and payable, whether at the due
date thereof or at a date fixed for prepayment thereof or
otherwise;

     

    (b) 
the Borrower shall fail to pay any interest on any Loan or any fee or any other
amount (other than an amount referred to in clause (a) of this Section) payable
under any Financing Document, when and as the same shall become due and payable,
and such failure shall continue unremedied for a period of three or more
Business Days;

     

    (c) 
any representation or warranty made or deemed made by or on behalf of any
Obligor or any Subsidiary thereof in any Financing Document, or in any report,
certificate, financial statement or other document furnished pursuant to or in
connection with any Financing Document, shall prove to have been incorrect in
any material respect when made or deemed made;

     

    (d) 
any Obligor shall fail to observe or perform any covenant, condition or
agreement contained in Section 7.01, 7.02 (other than Section 7.02(a)), 7.03
(with respect to such Obligor’s existence), 7.06, 7.07, 7.09, 7.12 or 7.13, or
in Article IV or VIII (subject, with respect to Section 8.02, to Section
9.01(e)(i) below); or any of the Guarantors fails to perform or observe any
term, covenant or agreement contained in any Guaranty; or any of the Obligors
fails to perform or observe any term, covenant or agreement contained in Section
3.3, 3.4 (subject, with respect to Section 3.4(b) of the Security Agreement, to
Section 9.01(e)(i) below), 3.6, 3.7, 3.8, 3.13 or 3.16, or in Article IV or VI,
of the Security Agreement;

     

    (e) 
(i) any Obligor or any of its Subsidiaries shall sign or file, or shall suffer
to exist, for a period of 30 or more days from when such Obligor or Subsidiary
obtains knowledge thereof, a financing statement in respect of a Lien not in
favor of the Administrative Agent (and not otherwise in respect of any other
Permitted Lien) that is invalid and that has not been created or attached to any
property or asset now owned or hereafter acquired by such Obligor or Subsidiary,
so long as (x) during such 30-day period such Obligor is diligently pursuing
removal of such invalid Lien and related financing statement and (y) such
invalid Lien or related financing statement could not reasonably be expected to
have a Material Adverse Effect; or (ii) any Obligor shall fail to observe or
perform any covenant, condition or agreement contained in this Agreement (other
than those specified in clause (a), (b) or (d) or (e)(i) of this Section 9.01)
or any other Financing Document to which it is party and such failure shall
continue unremedied for a period of 30 or more days after such
failure;

     

    (f) 
any Obligor shall fail to make any payment (whether of principal or interest and
regardless of amount) in respect of any Material Indebtedness, when and as the
same shall become due and payable, after giving effect to any applicable notice
or grace periods;

     

    (g) 
Any Obligor fails to observe or perform any other agreement or condition
relating to any Material Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event occurs,
the effect of which default or other event is to cause, or to permit the holder
or holders of such Material Indebtedness (or a trustee or agent on behalf of
such holder or holders or beneficiary or beneficiaries) to cause, with the
giving of notice if required, such Indebtedness to be demanded or to become due
or to be repurchased, prepaid, defeased or redeemed (automatically or
otherwise), or an offer to repurchase, prepay, defease or redeem such
Indebtedness to be made, prior to its stated maturity;

    
      
         

      

      
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    (h) 
an involuntary proceeding shall be commenced or an involuntary petition shall be
filed seeking (i) liquidation, reorganization or other relief in respect of any
Obligor or any Subsidiary thereof or such Person’s debts, or of a substantial
part of such Person’s assets, under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for any Obligor or any Subsidiary thereof or for a substantial
part of such Person’s assets, and, in any such case, such proceeding or petition
shall continue undismissed for a period of 30 or more days or an order or decree
approving or ordering any of the foregoing shall be entered;

     

    (i) 
any Obligor or any Subsidiary thereof shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or other
relief under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (ii) consent to the institution of,
or fail to contest in a timely and appropriate manner, any proceeding or
petition described in clause (h) of this Article, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for any Obligor or any Subsidiary thereof or for a substantial
part of such Person’s assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a
general assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing;

     

    (j) 
any Obligor or any Subsidiary thereof shall become unable, admit in writing its
inability or fail generally to pay such Person’s debts as they become
due;

     

    (k) 
one or more judgments for the payment of money in an aggregate amount in excess
of $500,000, to the extent not covered by a third-party insurance carrier which
has acknowledged such coverage in writing, shall be rendered against any Obligor
or any Subsidiary thereof or any combination thereof and the same shall remain
undischarged for a period of 30 consecutive days during which execution shall
not be effectively stayed, or any action shall be legally taken by a judgment
creditor to attach or levy upon any assets of any Obligor or any Subsidiary
thereof to enforce any such judgment;

     

    (l) 
an ERISA Event shall have occurred that, in the opinion of the Lender, when
taken together with all other ERISA Events that have occurred, could reasonably
be expected to result in liability of any Obligor in an aggregate amount
exceeding (i) $500,000 in any year or (ii) $500,000 for all
periods;

     

    (m) 
the assertion against any Obligor of an Environmental Claim that the Majority
Lenders determine in good faith will be resolved adversely to any Obligor and
would have a Material Adverse Effect (insofar as such amount is payable by any
Obligor but after deducting (i) any portion thereof that is reasonably expected
to be paid by other creditworthy Persons jointly and severally liable therefor
and (ii) any portion thereof that is covered by independent third-party
insurance as to which the insurer is rated at least “A” by A.M. Best Company,
has been notified of the potential claim and does not dispute
coverage);

    
      
         

      

      
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    (n) 
a Change in Control shall occur;

     

    (o) 
the Liens created by the Security Documents shall at any time not constitute a
valid and perfected Lien on the collateral intended to be covered thereby (to
the extent perfection by filing, registration, recordation or possession is
required herein or therein) in favor of the Administrative Agent, free and clear
of all other Liens (other than Liens permitted under Section 8.02 or under
the respective Security Documents), or, except for expiration in accordance with
its terms, any of the Security Documents shall for whatever reason be terminated
or cease to be in full force and effect, or the enforceability thereof shall be
contested by any Obligor;

     

    (p) 
any provision of any Financing Document, at any time after its execution and
delivery and for any reason other than as expressly permitted hereunder or
thereunder or satisfaction in full and in cash of all the Secured Obligations,
ceases to be in full force and effect; or any Obligor contests in any manner the
validity or enforceability of any provision of any Financing Document; or any
Obligor denies that it has any or further liability or obligation under any
provision of any Financing Document, or purports to revoke, terminate or rescind
any provision of any Financing Document; or any Person (other than an Obligor)
contests in any manner the validity or enforceability of any provision of any
Financing Document, and such contest could reasonably be expected either (i) to
result in a material impairment of the rights and remedies of the Administrative
Agent, LC Bank or any Lender under any Financing Document, or of the ability of
any Obligor to perform its obligations under any Financing Document to which it
is a party, or (ii) to have a material adverse effect upon the legality,
validity, binding effect or enforceability against any Obligor of any Financing
Document to which it is a party; or

     

    (q) 
(i)  The subordination provisions of the documents evidencing or
governing any Subordinated Debt (the “Subordination Provisions”)
shall, in whole or in part, terminate, cease to be effective or cease to be
legally valid, binding and enforceable against any holder of the applicable
Subordinated Debt; or (ii) the Borrower or any other Obligor shall, directly or
indirectly, disavow or contest in any manner (A) the effectiveness, validity or
enforceability of any of the Subordination Provisions, (B) that the
Subordination Provisions exist for the benefit of the Lender, or (C) that all
payments of principal of or premium and interest on the applicable Subordinated
Debt, or realized from the liquidation of any property of any Obligor, shall be
subject to any of the Subordination Provisions.

     

    then, and
in every such event (other than an event with respect to any Obligor described
in clause (h) or (i) of this Section), and at any time thereafter during the
continuance of such event, the Administrative Agent may, and at the request of
the Majority Lenders shall, take either or both of the following actions, at the
same or different times: (i) terminate the Commitments and any obligation of the
LC Bank to extend credit in respect of any LCs, and thereupon the Commitments
and such obligation shall terminate immediately, (ii) require that the Borrower
provide cover for LC Exposure as provided in Section 2.08(k) and (iii) declare
the Loans then outstanding to be due and payable in whole (or in part, in which
case any principal not so declared to be due and payable may thereafter be
declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Obligors accrued under the Financing
Documents, shall become due and payable immediately, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
each Obligor; and in case of any event with respect to any Obligor described in
clause (h) or (i) of this Section, the Commitments and any obligation of the LC
Bank to extend credit in respect of any LCs shall automatically terminate and
the principal of the Loans then outstanding, together with accrued interest
thereon and all fees and all other obligations under the Financing Documents,
shall automatically become due and payable, and the obligation of the Borrower
to provide cover for LC Exposure as aforesaid shall automatically become
effective, without presentment, demand, protest or other notice of any kind, all
of which are hereby waived by each Obligor.

    
      
         

      

      
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    Notwithstanding
the foregoing, if at the end of any fiscal quarter of the Borrower there would
exist any Event of Default with respect to one or more of Sections 8.14(a) or
(b) and the required ratios were less than 15% out of compliance (each, a “Curable Financial Covenant
Default”), such Curable Financial Covenant shall not constitute an Event
of Default until the date that is thirty (30) days after the date the Compliance
Certificate for such fiscal quarter is required to be delivered pursuant to
Section 7.01(b), during which time the Borrower may prevent such Curable
Financial Covenant Default from becoming an Event of Default by receiving equity
contributions and applying the proceeds therefrom to repay the Loans; provided, that, (i)
with respect to Section 8.14(b), the Consolidated Senior Leverage Ratio,
calculated on a pro forma basis after giving effect to such equity contribution
and prepayment as of the date on which such Curable Financial Covenant Default
occurred, does not exceed the ratio set forth in Section 8.14(b); and (ii) with
respect to Section 8.14(a), the Consolidated Debt Service Coverage Ratio,
calculated on a pro forma basis after giving effect to such equity contribution
and prepayment as of the date on which such Curable Financial Covenant Default
occurred but increasing Consolidated EBITDA for the four fiscal quarter period
ending on such date on a dollar-for-dollar basis by the amount of such
prepayment, is not less than the relevant ratio set forth in Section 8.14(a);
provided, further, in each
case, that (x) no Critical Default exists (other than Curable Financial Covenant
Defaults that the Borrower has demonstrated to the reasonable satisfaction of
the Majority Lenders may be cured pursuant to a capital contribution and
prepayment of the Loans pursuant to the foregoing provision), and (y) the
Borrower has received such capital contribution on or before the date that is
thirty (30) days after the date the compliance certificate for such fiscal
quarter is required to be delivered pursuant to Section 7.01(b) and the Borrower
has applied 100% of such capital contribution to repayment of the
Loans.  The provisions of this paragraph may not be utilized in
consecutive quarters, nor more than twice while this Agreement is in
effect.

     

    Section
9.02    Application of
Proceeds.  All proceeds received after maturity of the Secured
Obligations, whether by acceleration or otherwise, shall be applied in the
following order:

     

    (i)           First, to payment of that
portion of the Secured Obligations constituting fees, indemnities, expenses and
other amounts (including fees, charges and disbursements of counsel to the
Administrative Agent and amounts payable under Article X) payable to the
Administrative Agent in its capacity as such;

     

    (ii)          Second, to payment of that
portion of the Secured Obligations constituting fees, indemnities and other
amounts (other than principal, interest and LC fees) payable to the Lenders and
the LC Bank (including fees, charges and disbursements of counsel to the
respective Lenders and the LC Bank arising under the Financing Documents and
amounts payable under Article X), ratably among them in proportion to the
respective amounts described in this clause Second payable to
them;

    
      
         

      

      
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    (iii)         Third, to payment of that
portion of the Secured Obligations constituting accrued and unpaid LC fees and
interest on the Loans, LC Borrowings and other Secured Obligations arising under
the Financing Documents, ratably among the Lenders and the LC Bank in proportion
to the respective amounts described in this clause Third payable to
them;

     

    (iv)         Fourth, to payment of that
portion of the Secured Obligations constituting unpaid principal of the Loans,
LC Borrowings and Secured Obligations then owing under Secured Hedge Agreements
and Secured Cash Management Agreements, ratably among the Lenders, the LC Bank,
the Hedge Banks and the Cash Management Banks in proportion to the respective
amounts described in this clause Fourth held by
them;

     

    (v)          Fifth, to the Administrative
Agent for the account of the LC Bank, to provide cover for LC Exposure as
provided in Section 2.08(k); and

     

    (vi)         Last, the balance, if any,
after all of the Secured Obligations (other than inchoate, unasserted indemnity
obligations that expressly survive termination of the Financing Documents) have
been indefeasibly paid in full in cash, to the Borrower or as otherwise required
by any Governmental Requirement.

     

    Subject
to Section 2.08(c), amounts used to provide cover for LC Exposure pursuant to
clause Fifth above
shall be applied to satisfy drawings under such LCs as they occur.  If
any amount remains on deposit as such cover after all LCs have either been fully
drawn or expired, such remaining amount shall be applied to the other Secured
Obligations, if any, in the order set forth above.

     

    Notwithstanding
the foregoing, Secured Obligations arising under Secured Cash Management
Agreements and Secured Hedge Agreements shall be excluded from the application
described above if the Administrative Agent has not received written notice
thereof, together with such supporting documentation as the Administrative Agent
may request, from the applicable Cash Management Bank or Hedge Bank, as the case
may be.  Each Cash Management Bank or Hedge Bank not a party to the
Credit Agreement that has given the notice contemplated by the preceding
sentence shall, by such notice, be deemed to have acknowledged and accepted the
appointment of the Administrative Agent pursuant to the terms of Article XI
hereof for itself and its Affiliates as if a “Lender” party hereto.

     

    
      
        
        

      

      
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    ARTICLE
X

     

    CHANGE IN
CIRCUMSTANCES

     

    Section
10.01  Increased
Costs.

     

    (a) 
Increased Costs
Generally.  If any Change in Law shall:

     

    (i)           impose,
modify or deem applicable any reserve, special deposit, compulsory loan,
insurance charge or similar requirement against assets of, deposits with or for
the account of, or credit extended or participated in by, any Lender or the LC
Bank;

     

    (ii)          subject
any Lender or the LC Bank to any tax of any kind whatsoever with respect to this
Agreement or any LC or participation therein, or change the basis of taxation of
payments to such Lender or the LC Bank in respect thereof (except for
Indemnified Taxes or Other Taxes covered by Section 10.02 and the
imposition of, or any change in the rate of, any Excluded Tax payable by such
Lender); or

     

    (iii)         impose
on any Lender or the LC Bank any other condition, cost or expense affecting this
Agreement or any LC or participation therein (and not expressly excluded in
clause (ii) above);

     

    and the
result of any of the foregoing shall be to increase the cost to such Lender, or
to increase the cost to such Lender or the LC Bank of participating in, issuing
or maintaining any LC (or of maintaining its obligation to participate in or to
issue any LC), or to reduce the amount of any sum received or receivable by such
Lender or the LC Bank hereunder (whether of principal, interest or any other
amount) then, upon request of such Lender or the LC Bank, the Borrower will pay
to such Lender or the LC Bank, as the case may be, such additional amount or
amounts as will compensate such Lender or the LC Bank, as the case may be, for
such additional costs incurred or reduction suffered.

     

    (b) 
Capital
Requirements.  If any Lender or the LC Bank determines that any
Change in Law affecting such Lender or the LC Bank or any Applicable Lending
Office of such Lender or such Lender’s or the LC Bank’s holding company, if any,
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender’s or the LC Bank’s capital or on the capital of such
Lender’s or the LC Bank’s holding company, if any, as a consequence of this
Agreement, the Commitments of such Lender or the Loans made by, or
participations in LCs held by, such Lender, or the LCs issued by the LC Bank, to
a level below that which such Lender or the LC Bank or such Lender’s or the LC
Bank’s holding company could have achieved but for such Change in Law (taking
into consideration such Lender’s or the LC Bank’s policies and the policies of
such Lender’s or the LC Bank’s holding company with respect to capital
adequacy), then from time to time the Borrower will pay to such Lender or the LC
Bank, as the case may be, such additional amount or amounts as will compensate
such Lender or the LC Bank or such Lender’s or the LC Bank’s holding company for
any such reduction suffered.

     

    (c) 
Certificates for
Reimbursement.  A certificate of a Lender or the LC Bank
setting forth the amount or amounts necessary to compensate such Lender, the LC
Bank or the holding company thereof, as the case may be, as specified in
subsection (a) or (b) of this Section and delivered to the Borrower shall be
conclusive absent manifest error.  The Borrower shall pay such Lender
or the LC Bank, as applicable, the amount shown as due on any such certificate
within 10 days after receipt thereof.

    
      
         

      

      
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    (d) 
Delay in
Requests.  Failure or delay on the part of any Lender or the LC
Bank to demand compensation pursuant to the foregoing provisions of this Section
shall not constitute a waiver of such Lender’s or the LC Bank’s right to demand
such compensation, provided that the Borrower shall not be required to
compensate a Lender or the LC Bank pursuant to the foregoing provisions of this
Section for any increased costs incurred or reductions suffered more than nine
months prior to the date that such Lender or the LC Bank, as the case may be,
notifies the Borrower of the Change in Law giving rise to such increased costs
or reductions and of such Lender’s or the LC Bank’s intention to claim
compensation therefor (except that, if the Change in Law giving rise to such
increased costs or reductions is retroactive, then the nine-month period
referred to above shall be extended to include the period of retroactive effect
thereof).

     

    Section
10.02  Payments Free and
Clear; U.S. Taxes.

     

    (a) 
Payments Free and
Clear.  Any and all payments by the Borrower or any Obligor
under the Financing Documents shall be made, in accordance with Section 3.01, free
and clear of and without deduction for any and all present or future Taxes,
(excluding, in the case of each Lender, the LC Bank and the Administrative
Agent, Taxes imposed on its net income or net profits, and franchise or similar
taxes imposed on it, and any branch profits imposed by the United States or any
similar tax imposed by any other jurisdiction in which the Administrative Agent,
LC Bank or such Lender is located (all such excluded Taxes being referred to
herein as “Excluded
Taxes”)), by (i) any
jurisdiction (or political subdivision thereof) of which the Administrative
Agent, LC Bank or such Lender, as the case may be, is a citizen or resident or
in which such Lender has a permanent establishment (or is otherwise engaged in
the active conduct of its banking business through an office or a branch) which
is such Lender’s Applicable Lending Office, (ii) the jurisdiction (or any
political subdivision thereof) in which the Administrative Agent, LC Bank or
such Lender, as the case may be, is organized, or (iii) any jurisdiction (or
political subdivision thereof) in which Taxes are imposed as a result of the
Administrative Agent, LC Bank or such Lender, as the case may be, doing business
in such jurisdiction (all such nonexcluded Taxes being hereinafter referred to
as “Included
Taxes”).  If the Borrower shall be required by law to deduct
any Included Taxes from or in respect of any sum payable hereunder to any
Lender, the LC Bank or Administrative Agent (i) the sum payable shall be
increased by the amount necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section 10.04), such
Lender, the LC Bank or Administrative Agent, as applicable, shall receive an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions, and (iii) the Borrower shall pay
the full amount deducted to the relevant taxing authority or other Governmental
Authority in accordance with applicable law.

     

    (b) 
Other
Taxes.  In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies that arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement, any Assignment and Acceptance or any other Financing Document
(hereinafter referred to as “Other
Taxes”).

    
      
         

      

      
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    (c) 
Indemnification.  The
Borrower hereby indemnifies each Lender, the LC Bank and the Administrative
Agent for the full amount of Included Taxes and Other Taxes (including any
Included Taxes or Other Taxes imposed by any jurisdiction on amounts payable
under this Section
10.02) paid by such Lender, the LC Bank or the Administrative Agent (on
its own behalf or on behalf of any Lender), as the case may be, and any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not such Included Taxes or Other Taxes were
correctly or legally asserted.  Any payment pursuant to such
indemnification shall be made within 10 days after the date any Lender, the LC
Bank or the Administrative Agent, as the case may be, makes written demand
therefor.

     

    (d) 
Receipts.  Within
10 days after the date of any payment of Taxes or Other Taxes withheld by the
Borrower in respect of any payment to any Lender, the LC Bank or the
Administrative Agent, the Borrower will furnish to the Administrative Agent the
original or a certified copy of a receipt evidencing payment thereof (to the
extent such a receipt is available from the relevant Governmental
Authority).

     

    (e) 
Lender
Representations.  Each Lender represents that it is either (i)
a corporation organized under the laws of the United States of America or any
state thereof or (ii) it is entitled to complete exemption from United States
withholding tax imposed on or with respect to any payments, including fees, to
be made to it pursuant to this Agreement (A) under an applicable provision of a
tax convention to which the United States of America is a party or (B) because
it is acting through a branch agency or office in the United States of America
and any payment to be received by it hereunder is effectively connected with a
trade or business in the United States of America.  Each Lender that
is not a corporation organized under the laws of the United States of America or
any state thereof agrees to provide to the Borrower and the Administrative Agent
on the Closing Date, or on the date of its delivery of the Assignment and
Acceptance pursuant to which it becomes a Lender, and at such other times as
required by United States law or as the Borrower or the Administrative Agent
shall reasonably request, two accurate and complete original signed copies of
either (A) Internal Revenue Service Form W-8ECI (or successor form) certifying
that all payments to be made to it hereunder will be effectively connected to a
United States trade or business (the “W-8ECI Certification”) or (B)
Internal Revenue Service Form W-8BEN (or successor form) certifying that it is
entitled to the benefit of a provision of a tax convention to which the United
States of America is a party which completely exempts from United States
withholding tax all payments to be made to it hereunder (the “W-8BEN
Certification”).  In addition, each Lender agrees that if it
previously filed a W-8ECI Certification it will deliver to the Borrower and the
Administrative Agent a new W-8ECI Certification prior to the first payment date
occurring in each of its subsequent taxable years; and if it previously filed a
W-8BEN Certification, it will deliver to the Borrower and the Administrative
Agent a new certification prior to the first payment date falling in the third
year following the previous filing of such certification.  Each Lender
also agrees to deliver to the Borrower and the Administrative Agent such other
or supplemental forms as may at any time be required as a result of changes in
applicable law or regulation in order to confirm or maintain in effect its
entitlement to exemption from United States withholding tax on any payments
hereunder, provided that the circumstances of the Lender at the relevant time
and applicable laws permit it to do so.  If a Lender determines, as a
result of any change in either (i) applicable law, regulation or treaty, or in
any official application thereof or (ii) its circumstances, that it is unable to
submit any form or certificate that it is obligated to submit pursuant to this
Section, or that it is required to withdraw or cancel any such form or
certificate previously submitted, it shall promptly notify the Borrower and the
Administrative Agent of such fact.  If a Lender is organized under the
laws of a jurisdiction outside the United States of America, unless the Borrower
and the Administrative Agent have received a W-8BEN Certification or W-8ECI
Certification satisfactory to them indicating that all payments to be made to
such Lender hereunder are not subject to United States withholding tax, the
Borrower shall withhold taxes from such payments at the applicable statutory
rate.  Each Lender agrees to indemnify and hold harmless from any
United States taxes, penalties, interest and other expenses, costs and losses
incurred or payable by the Administrative Agent as a result of such Lender’s
failure to submit any form or certificate that it is required to provide
pursuant to this Section or as a result of its reliance on any such form or
certificate which it has provided to it pursuant to this
Section.

    
      
         

      

      
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    (f) 
Failure to Provide
Form.  For any period with respect to which a Lender has failed
to provide the Borrower with the form required pursuant to Section 10.02(e), if
any (other than if such failure is due to a change in treaty, applicable law or
regulation, or in official application thereof, occurring subsequent to the date
on which a form originally was required to be provided by such Lender), such
Lender shall not be entitled to indemnification under Section 10.02(c) with
respect to Taxes imposed by the United States which Taxes would not have been
imposed but for such failure to provide such forms; provided, however, that
should a Lender, which is otherwise exempt from or subject to a reduced rate of
withholding tax become subject to Taxes because of its failure to deliver a form
required hereunder, the Borrower shall take such steps as such Lender shall
reasonably request to assist such Lender to recover such Taxes.

     

    (g) 
Efforts to Avoid or
Reduce.  Any Lender claiming any additional amounts payable
pursuant to this Section 10.02 shall use reasonable efforts (consistent with
legal and regulatory restrictions) to file any certificate or document requested
by the Borrower or the Administrative Agent or to change the jurisdiction of its
Applicable Lending Office or to contest any tax imposed if the making of such a
filing or change or contesting such tax would avoid the need for or reduce the
amount of any such additional amounts that may thereafter accrue and would not,
in the sole determination of such Lender, be otherwise disadvantageous to such
Lender.

     

    Section
10.03  Survival.  All of
the Borrower’s obligations under this Article X shall
survive termination of the Commitments and repayment of all other Secured
Obligations hereunder.

     

    ARTICLE
XI

     

    ADMINISTRATIVE
AGENT

     

    Section
11.01  Appointment and
Authority.  Each of the Lenders and the LC Bank hereby
irrevocably appoints Middlesex to act on its behalf as the Administrative Agent
hereunder and under the other Financing Documents and authorizes the
Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms hereof or
thereof, together with such actions and powers as are reasonably incidental
thereto.  The provisions of this Article are solely for the benefit of
the Administrative Agent, the Lenders and the LC Bank, and no Obligor
shall  have rights as a third party beneficiary of any of such
provisions.

    
      
         

      

      
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    Section
11.02  Rights as a
Lender.  The Person serving as the Administrative Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not the
Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the Person
serving as the Administrative Agent hereunder in its individual
capacity.  Such Person and its Affiliates may accept deposits from,
lend money to, act as the financial advisor or in any other advisory capacity
for and generally engage in any kind of business with any Obligor or any
Subsidiary or other Affiliate thereof as if such Person were not the
Administrative Agent hereunder and without any duty to account therefor to the
Lenders.

     

    Section
11.03  Exculpatory
Provisions.  The Administrative Agent shall not have any duties
or obligations except those expressly set forth in the Financing
Documents.  Without limiting the generality of the foregoing, the
Administrative Agent:

     

    (a) 
shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing;

     

    (b) 
shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Financing Documents that the Administrative
Agent is required to exercise as directed in writing by the Majority Lenders (or
such other number or percentage of the Lenders as shall be expressly provided
for herein or in the other Financing Documents), provided that the
Administrative Agent shall not be required to take any action that, in its
opinion or the opinion of its counsel, may expose the Administrative Agent to
liability or that is contrary to any Financing Document or applicable law;
and

     

    (c) 
shall not, except as expressly set forth in the Financing Documents, have any
duty to disclose, and shall not be liable for the failure to disclose, any
information relating to any Obligor or any of its Affiliates that is
communicated to or obtained by the Person serving as the Administrative Agent or
any of its Affiliates in any capacity.

     

    The
Administrative Agent shall not be liable for any action taken or not taken by it
(i) with the consent or at the request of the Majority Lenders (or such other
number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Section 12.02 and Article IX) or (ii) in the
absence of its own gross negligence or willful misconduct.  The
Administrative Agent shall be deemed not to have knowledge of any Default unless
and until notice describing such Default is given to the Administrative Agent by
the Borrower, a Lender or the LC Bank.

     

    The
Administrative Agent shall not be responsible for or have any duty to ascertain
or inquire into (i) any statement, warranty or representation made in or in
connection with any Financing Document, (ii) the contents of any certificate,
report or other document delivered thereunder or in connection therewith, (iii)
the performance or observance of any of the covenants, agreements or other terms
or conditions set forth therein or the occurrence of any Default, (iv) the
validity, enforceability, effectiveness or genuineness of any Financing Document
or any other agreement, instrument or document or (v) the satisfaction of any
condition set forth in Article V or elsewhere herein, other than to confirm
receipt of items expressly required to be delivered to the Administrative
Agent.

    
      
         

      

      
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    Section
11.04  Reliance by
Administrative Agent.  The Administrative Agent shall be
entitled to rely upon, and shall not incur any liability for relying upon, any
notice, request, certificate, consent, statement, instrument, document or other
writing (including any electronic message, Internet or intranet website posting
or other distribution) believed by it to be genuine and to have been signed,
sent or otherwise authenticated by the proper Person.  The
Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it to have been made by the proper Person, and shall
not incur any liability for relying thereon.  In determining
compliance with any condition hereunder to the making of a Loan, or the issuance
of an LC, that by its terms must be fulfilled to the satisfaction of a Lender or
the LC Bank, the Administrative Agent may presume that such condition is
satisfactory to such Lender or the LC Bank unless the Administrative Agent shall
have received notice to the contrary from such Lender or the LC Bank prior to
the making of such Loan or the issuance of such LC.  The
Administrative Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.  The
Administrative Agent may also consult with the Majority Lenders at any
time.

     

    Section
11.05  Delegation of
Duties.  The Administrative Agent may perform any and all of
its duties and exercise its rights and powers under any Financing Document by or
through any one or more sub-agents appointed by the Administrative
Agent.  The Administrative Agent and any such sub agent may perform
any and all of its duties and exercise its rights and powers by or through their
respective Related Parties.  The exculpatory provisions of this
Article shall apply to any such sub agent and to the Related Parties of the
Administrative Agent and any such sub agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.

     

    
      
        
        

      

      
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    Section
11.06  Resignation of
Administrative Agent.

    (a) 
The Administrative Agent may at any time give notice of its resignation to the
Lenders, the LC Bank and the Borrower.  Upon receipt of any such
notice of resignation, the Majority Lenders shall have the right to appoint as a
successor (1) Commerce Bank or (2) so long as no Default has occurred and is
continuing, with the Borrower’s consent (such consent not to be unreasonably
withheld or delayed), another successor, which shall be a bank with an office in
the United States, or an Affiliate of any such bank with an office in the United
States.  If no such successor shall have been so appointed by the
Majority Lenders and shall have accepted such appointment within 30 days after
the retiring Administrative Agent gives notice of its resignation, then the
retiring Administrative Agent may on behalf of the Lenders and the LC Bank,
appoint a successor Administrative Agent meeting the qualifications set forth
above; provided that if the Administrative Agent shall notify the Borrower and
the Lenders that no qualifying Person has accepted such appointment, then such
resignation shall nonetheless become effective in accordance with such notice
and (1) the retiring Administrative Agent shall be discharged from its duties
and obligations under the Financing Documents (except that in the case of any
collateral security held by the Administrative Agent on behalf of the Lenders or
the LC Bank under any Financing Document, the retiring Administrative Agent
shall continue to hold such collateral security until such time as a successor
Administrative Agent is appointed) and (2) all payments, communications and
determinations provided to be made by, to or through the Administrative Agent
shall instead be made by or to each Lender and the LC Bank directly, until such
time as the Majority Lenders appoint a successor Administrative Agent as
provided for above in this Section.  Upon the acceptance of a
successor’s appointment as Administrative Agent hereunder, such successor shall
succeed to and become vested with all of the rights, powers, privileges and
duties of the retiring (or retired) Administrative Agent, and the retiring
Administrative Agent shall be discharged from all of its duties and obligations
under the Financing Documents (if not already discharged therefrom as provided
above in this Section).  The fees payable by the Borrower to a
successor Administrative Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrower and such
successor.  After the retiring Administrative Agent’s resignation
under the Financing Documents, the provisions of this Article and Section 12.03
shall continue in effect for the benefit of such retiring Administrative Agent,
its sub-agents and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while the retiring Administrative
Agent was acting as Administrative Agent.

     

    (b) 
Any resignation by Middlesex as Administrative Agent pursuant to this Section
shall also constitute its resignation as LC Bank.  Upon the acceptance
of a successor’s appointment as Administrative Agent hereunder, (i) such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring LC Bank, (ii) the retiring LC Bank shall
be discharged from all of its duties and obligations under the Financing
Documents, and (iii) the successor LC Bank shall issue letters of credit in
substitution for the LCs, if any, outstanding at the time of such succession or
make other arrangements satisfactory to the retiring LC Bank to effectively
assume the obligations of the retiring LC Bank with respect to such
LCs.

     

    Section
11.07  Non-Reliance on
Administrative Agent and Other Lenders.  Each Lender and the LC
Bank acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement.  Each
Lender and the LC Bank also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Lender or any of their
Related Parties and based on such documents and information as it shall from
time to time deem appropriate, continue to make its own decisions in taking or
not taking action under or based on any Financing Document or any related
agreement or any document furnished thereunder.

     

    Section
11.08  Administrative
Agent May File Proofs of Claim.  In case of the pendency of any
proceeding under any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Obligor, the Administrative Agent (irrespective of
whether the principal of any Loan or any LC Exposure shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the Administrative Agent shall have made any demand on any Obligor)
shall be entitled and empowered, by intervention in such proceeding or
otherwise:

    
      
         

      

      
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    (a) 
to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans, LC Exposure and all other Secured
Obligations that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of the Lenders, the LC Bank
and the Administrative Agent (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Lenders, the LC Bank
and the Administrative Agent and their respective agents and counsel and all
other amounts due the Lenders, the LC Bank and the Administrative Agent under
Sections 2.08(i) and (j), 2.09 and 12.03) allowed in such judicial proceeding;
and

     

    (b) 
to collect and receive any monies or other property payable or deliverable on
any such claims and to distribute the same;

     

    and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Lender and the LC Bank to make such payments to the Administrative Agent and, in
the event that the Administrative Agent shall consent to the making of such
payments directly to the Lenders and the LC Bank, to pay to the Administrative
Agent any amount due for the reasonable compensation, expenses, disbursements
and advances of the Administrative Agent and its agents and counsel, and any
other amounts due the Administrative Agent under Sections 2.09 and
12.03.

     

    Nothing
contained herein shall be deemed to authorize the Administrative Agent to
authorize or consent to or accept or adopt on behalf of any Lender or the LC
Bank any plan of reorganization, arrangement, adjustment or composition
affecting the Secured Obligations or the rights of any Lender or the LC Bank to
authorize the Administrative Agent to vote in respect of the claim of any Lender
or the LC Bank in any such proceeding.

     

    Section
11.09  Collateral and
Guaranty Matters.  The Lenders and the LC Bank irrevocably
authorize the Administrative Agent, at its option and in its
discretion,

     

    (a) 
to release any Lien on any property granted to or held by the Administrative
Agent under any Financing Document (i) upon termination of all Commitments and
payment in full of all Secured Obligations (other than contingent
indemnification obligations) and the expiration or termination of all LCs (other
than LCs as to which other arrangements satisfactory to the Administrative Agent
and the LC Bank shall have been made), (ii) that is sold or otherwise disposed
of or to be sold or otherwise disposed of as part of or in connection with any
sale or other disposition permitted under any Financing Document, or (iii)
subject to Section 12.02, if approved, authorized or ratified in writing by the
Majority Lenders;

     

    (b) 
to subordinate any Lien on any property granted to or held by the Administrative
Agent under any Financing Document to the holder of any Lien on such property
that is permitted by Section 8.02(i); and

     

    (c) 
to release any Guarantor from its obligations under the Guaranty if such Person
ceases to be a Subsidiary as a result of a transaction permitted
hereunder.

     

    Upon
request by the Administrative Agent at any time, the Majority Lenders will
confirm in writing the Administrative Agent’s authority to release or
subordinate its interest in particular types or items of property, or to release
any Guarantor from its obligations under the Guaranty pursuant to this Section
11.09.

    
      
         

      

      
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    ARTICLE
XII

     

    MISCELLANEOUS

     

    Section
12.01  Notices.

     

    (a) 
General.  Except in
the case of notices and other communications expressly permitted to be given by
telephone, all notices and other communications provided for herein shall be in
writing and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by facsimile, as follows:

     

    (i)           if
to the Borrower or any Guarantor:

     

    SeraCare
Life Sciences, Inc.

    37 Birch
Street

    Milford,
MA 01757

    Attention:  Gregory
A. Gould, Chief Financial Officer

    Facsimile
No.:  508-634-3394

    Email:  ggould@seracare.com

    

    (ii)          if
to the LC Bank:

     

    Middlesex
Savings Bank

    120
Flanders Road

    Westborough,
MA 01581

    Attn:  Tony
Zhang

    Phone
No.:  508-599-5842

    Facsimile
No.:  508-870-0390

    Email:  tony.zhang@middlesexbank.com

    

    (iii)         if
to the Administrative Agent:

     

    Middlesex
Savings Bank

    120
Flanders Road

    Westborough,
MA 01581

    Attn:  Tony
Zhang

    Phone
No.:  508-599-5842

    Facsimile
No.:  508-870-0390

    Email:  tony.zhang@middlesexbank.com

    

    (iv)         if
to a Lender, to it at its address or facsimile number set forth in its
Administrative Questionnaire.

    
      
         

      

      
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    Any party
hereto may change its address or facsimile number for notices and other
communications hereunder by notice to the other parties hereto (or, in the case
of any such change by a Lender, by notice to the Borrower and Administrative
Agent).  All notices and other communications given to any party
hereto in accordance with the provisions of this Agreement shall be deemed to
have been given on the date of receipt.  Notices and other
communications delivered through electronic communications to the extent
provided in subsection (b) below shall be effective as provided in such
subsection (b).

     

    (b) 
Electronic
Communications.  Notices and other communications to the
Lenders and the LC Bank hereunder may be delivered or furnished by electronic
communication (including e-mail and Internet or intranet websites) pursuant to
procedures approved by the Administrative Agent,  provided that the
foregoing shall not apply to notices to any Lender or the LC Bank pursuant to
Article II if such Lender or the LC Bank, as applicable, has notified the
Administrative Agent that it is incapable of receiving notices under such
Article by electronic communication.  The Administrative Agent or the
Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided that approval of such procedures may be
limited to particular notices or communications.  Unless the
Administrative Agent otherwise prescribes, (i) notices and other communications
sent to an e-mail address shall be deemed received upon the sender’s receipt of
an acknowledgement from the intended recipient (such as by the “return receipt
requested” function, as available, return e-mail or other written
acknowledgement), provided that if such notice or other communication is not
sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.

     

    (c) 
THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS
OF THE BORROWER MATERIALS, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR
OMISSIONS FROM THE BORROWER MATERIALS.  NO WARRANTY OF ANY KIND,
EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR
FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN
CONNECTION WITH THE BORROWER MATERIALS.  In no event shall the
Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any
liability to the Borrower, any Lender, the LC Bank or any other Person for
losses, claims, damages, liabilities or expenses of any kind (whether in tort,
contract or otherwise) arising out of the Borrower’s or the Administrative
Agent’s transmission of Borrower Materials through the Internet, except to the
extent that such losses, claims, damages, liabilities or expenses are determined
by a court of competent jurisdiction by a final and nonappealable judgment to
have resulted from the gross negligence or willful misconduct of such Agent
Party; provided, however, that in no event shall any Agent Party have any
liability to the Borrower, any Lender, the LC Bank or any other Person for
indirect, special, incidental, consequential or punitive damages (as opposed to
direct or actual damages).

    
      
         

      

      
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    Section
12.02    Waivers;
Amendments.

     

    (a)    No Deemed Waivers: Remedies
Cumulative.  No failure or delay by the Administrative Agent,
LC Bank or any Lender in exercising any right or power under the Financing
Documents shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power.  The rights and
remedies of the Lenders, LC Bank and Administrative Agent under the Financing
Documents are cumulative and are not exclusive of any rights or remedies that
they would otherwise have.  No waiver of any provision of any
Financing Document or consent to any departure by any Obligor therefrom shall in
any event be effective unless the same shall be permitted by paragraph (b) of
this Section, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given.  Without
limiting the generality of the foregoing, the making of a Loan or issuance of an
LC shall not be construed as a waiver of any Default, regardless of whether any
Lender, the LC Bank or the Administrative Agent may have had notice or knowledge
of such Default at the time.

     

    (b)    Amendments.  Neither
any Financing Document nor any provision thereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by the Obligors party thereto and the Majority Lenders, or by the Obligors party
thereto and the Administrative Agent with the consent of the Majority Lenders;
provided that no such agreement shall (i) increase any Commitment of any Lender,
or extend the date or decrease the amount of any scheduled reduction thereof,
without the written consent of such Lender, (ii) reduce the principal amount of
any Loan or LC Reimbursement Obligation or reduce the rate of interest thereon,
or reduce any fees payable hereunder, without the written consent of each Lender
affected thereby, (iii) postpone the scheduled date of payment (excluding a
change to mandatory prepayments) of the principal amount of any Loan or LC
Reimbursement Obligation, or any interest thereon, or any fees payable
hereunder, or reduce the amount of, waive or excuse any such payment, or
postpone the scheduled date of expiration of any Commitment, without the written
consent of each Lender affected thereby, (iv) alter the manner in which payments
or prepayments of principal, interest or other amounts hereunder shall be
applied as among the Lenders or Types or Classes of Loans, without the written
consent of each Lender, (v) change any of the provisions of this Section or the
definition of the term “Majority Lenders” or any other provision hereof
specifying the number or percentage of Lenders required to waive, amend or
modify any rights hereunder or make any determination or grant any consent
hereunder, without the written consent of each Lender, (vi) release all or
substantially all of the Collateral in any transaction or series of related
transactions, without the written consent of each Lender, or (vii) release any
Obligor from any of such Obligor’s guarantee obligations under Article IV
without the written consent of each Lender; and provided, further, that (x) no
such agreement shall amend, modify or otherwise affect the rights or duties of
the Administrative Agent or LC Bank hereunder without the prior written consent
of the Administrative Agent or LC Bank, respectively, and (y) the Fee Letter may
be amended, or rights or privileges thereunder waived, in a writing executed
only by the parties thereto.

     

    
      
         

      

      
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    Section
12.03    Expenses: Indemnity; Damage
Waiver.

     

    (a)    Expenses.  The
Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates, including the reasonable fees, charges
and disbursements of counsel for the Administrative Agent, in connection with
the preparation and administration of the Financing Documents or any amendments,
modifications or waivers of the provisions thereof (whether or not the
transactions contemplated thereby shall be consummated), (ii) all reasonable
out-of-pocket expenses incurred by the LC Bank in connection with the amendment,
renewal or extension of any LC or any demand for payment thereunder, (iii) all
out-of-pocket expenses incurred by the Administrative Agent, LC Bank and any
Lender, including the fees, charges and disbursements of any counsel for the
Administrative Agent, LC Bank or any Lender, in connection with the enforcement
or protection of its rights in connection with the Financing Documents,
including its rights under this Section or in connection with the Loans made and
LCs issued hereunder, including in connection with any workout, restructuring or
negotiations in respect thereof and (iv) all costs, expenses, taxes, assessments
and other charges incurred in connection with any filing, registration,
recording or perfection of any security interest contemplated by any Security
Document or any other document referred to therein.

     

    (b)    Indemnification by the
Borrower.  The Borrower indemnifies the Administrative Agent
(and any sub-agent thereof), LC Bank and each Lender, and each Related Party of
any of the foregoing Persons (each such Person being called an “Indemnitee”) against, holds
each Indemnitee harmless from, any and all losses, claims, damages, liabilities
and related expenses, including the reasonable fees, charges and disbursements
of any counsel for any Indemnitee, incurred by or asserted against any
Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of the Financing Documents or any agreement or instrument
contemplated thereby, the performance by the parties hereto of their respective
obligations thereunder or the consummation of the transactions contemplated
thereby, (ii) any Loan or LC or the use of the proceeds therefrom, any payments
that the Administrative Agent is required to make under any indemnity issued to
any bank in the Security Agreement or any Account Control Agreement to which
remittances in respect of Accounts, as defined therein, are to be made, (iii)
any actual or alleged presence or release of Hazardous Materials on or from any
property owned or operated by the Borrower or any of its Subsidiaries, or any
Environmental Liability related in any way to the Borrower or any of its
Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory and regardless of whether any Indemnitee is a party thereto;
provided that
such indemnity shall not, as to any Indemnitee, be available to the extent that
such losses, claims, damages, liabilities or related expenses are determined by
a court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such
Indemnitee.

     

    (c)    Reimbursement by
Lenders.  To the extent that the Borrower for any reason fails
to indefeasibly pay any amount required under paragraph (a) or (b) of this
Section to be paid by it to the Administrative Agent (or any sub-agent thereof),
the LC Bank or any Related Party of any of the foregoing, each Lender severally
agrees to pay to the Administrative Agent (or any such sub-agent), the LC Bank
or such Related Party, as the case may be, such Lender’s Percentage (determined
as of the time that the applicable unreimbursed expense or indemnity payment is
sought) of such unpaid amount, provided that the unreimbursed expense or
indemnified loss, claim, damage, liability or related expense, as the case may
be, was incurred by or asserted against the Administrative Agent (or any such
sub-agent) or the LC Bank in its capacity as such, or against any Related Party
of any of the foregoing acting for the Administrative Agent (or any such
sub-agent) or LC Bank in connection with such capacity.

     

    
      
         

      

      
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    (d)    Waiver of Consequential
Damages.  No Obligor shall assert, and each Obligor hereby
waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, the
Financing Documents or any agreement or instrument contemplated thereby, the
transactions contemplated thereby, any Loan or the use of the proceeds
thereof.

     

    (e)    Payments.  All
amounts due under this Section shall be payable within three (3) Business Days
after written demand therefor.

     

    Section
12.04    Successors and
Assigns.

     

    (a)       Assignments.  The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby,
except that no Obligor may assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by any Obligor without such consent shall be
null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent, LC
Bank and the Lenders) any legal or equitable right, remedy or claim under or by
reason of this Agreement.

     

    (b)   
   Assignments
by Lenders.  Any Lender may assign to one or more Eligible
Assignees all or a portion of its rights and obligations under the Financing
Documents (including all or a portion of its Commitments and the Loans at the
time owing to it); provided that (i)
except in the case of an assignment to a Lender, an Affiliate of a Lender or an
Approved Fund with respect to a Lender or an assignment of the entire remaining
amount of the assigning Lender’s Commitment(s), the amount of the Commitment(s)
of the assigning Lender subject to each such assignment (determined as of the
date the Assignment and Acceptance with respect to such assignment is delivered
to the Administrative Agent) shall not be less than $1,000,000 unless the
Borrower and the Administrative Agent (and, in the case of an assignment of any
Lender’s obligations in respect of its LC Exposure, the LC Bank) otherwise
consent (provided that
concurrent assignments to members of an Assignee Group and concurrent
assignments from members of an Assignee Group to a single Eligible Assignee (or
to an Eligible Assignee and members of its Assignee Group) will be treated as a
single assignment for purposes of determining whether such minimum amount has
been met), (ii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender’s rights and obligations under
the Financing Documents, (iii) the parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Acceptance, together with
a processing and recordation fee of $5,000 (for which the Obligors shall have no
liability), and (iv) the assignee, if it shall not be a Lender, shall deliver to
the Administrative Agent an Administrative Questionnaire; provided, further, that any
consent of the Borrower otherwise required under this paragraph shall not be
required if a Specified Default has occurred and is continuing. Upon acceptance
and recording pursuant to paragraph (d) of this Section, from and after the
effective date specified in each Assignment and Acceptance, the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Acceptance, have the rights and obligations of a Lender
under this Agreement and the other Financing Documents, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this Agreement and the other
Financing Documents (and, in the case of an Assignment and Acceptance covering
all of the assigning Lender’s rights and obligations under this Agreement and
the other Financing Documents, such Lender shall cease to be a party hereto but
shall continue to be entitled to the benefits of Sections 10.01, 10.02 and
12.03). Any assignment or transfer by a Lender of rights or obligations under
this Agreement and the other Financing Documents that does not comply with this
paragraph shall be treated for purposes of the Financing Documents as a sale by
such Lender of a participation in such rights and obligations in accordance with
paragraph (e) of this Section.

     

    
      
         

      

      
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    (c)       Maintenance of Register by the
Administrative Agent.  The Administrative Agent, acting for
this purpose as an agent of the Borrower, shall maintain at one of its offices
in Boston a copy of each Assignment and Acceptance delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amount of the Loans and LC Disbursements owing to,
each Lender pursuant to the terms hereof from time to time (the “Register”).  The
entries in the Register shall be conclusive, and the Borrower, Administrative
Agent, LC Bank and Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement and the other Financing Documents, notwithstanding notice to the
contrary.  The Register shall be available for inspection by the
Borrower, LC Bank and any Lender, at any reasonable time and from time to time
upon reasonable prior notice.

     

    (d)      Effectiveness of
Assignments.  Upon its receipt of a duly completed Assignment
and Acceptance executed by an assigning Lender and an assignee, the assignee’s
completed Administrative Questionnaire (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) of this Section and any written consent to such assignment required by
paragraph (b) of this Section, the Administrative Agent shall accept such
Assignment and Acceptance and record the information contained therein in the
Register.  No assignment shall be effective for purposes of this
Agreement and the other Financing Documents, unless it has been recorded in the
Register as provided in this paragraph.

     

    (e)      Participations.  Any
Lender may, without the consent of the Borrower, LC Bank or Administrative
Agent, sell participations to one or more banks or other entities (a “Participant”) in all or a
portion of such Lenders rights and obligations under the Financing Documents
(including all or a portion of its Commitments and the Loans owing to it);
provided that (i) such Lender’s obligations under the Financing Documents shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) the Borrower,
LC Bank, Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights and
obligations under the Financing Documents.  Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce the Financing Documents
and to approve any amendment, modification or waiver of any provision of any
Financing Document; provided that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver described in the first proviso to Section
12.02(b) that affects such Participant.  Subject to paragraph (f) of
this Section, the Obligors agree that each Participant shall be entitled to the
benefits of Sections 10.01 and 10.02 to the same extent as if it were a Lender
and had acquired its interest by assignment pursuant to paragraph (b) of this
Section.

     

    
      
         

      

      
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    (f)       Limitations on Rights of
Participants.  A Participant shall not be entitled to receive
any greater payment under Section 10.01 or 10.02 than the applicable Lender
would have been entitled to receive with respect to the participation sold to
such Participant, unless the sale of the participation to such Participant is
made with the Borrower’s prior written consent.  A Participant that
would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 10.02 unless the Borrower is notified of the participation
sold to such Participant and such Participant agrees, for the benefit of the
Borrower, to comply with Section 10.02(e), 10.02 (f) or 10.02 (g) as though it
were a Lender.

     

    (g)      Certain
Pledges.  Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including any such pledge or assignment to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such assignee for such Lender as a party hereto.

     

    (h)      No Assignments to the Obligors or
Affiliates.  Anything in this Section to the contrary
notwithstanding, no Lender may assign or participate any interest in any Loan or
LC Exposure held by it hereunder to any Obligor or any of its Affiliates or
Subsidiaries without the prior consent of each Lender.

     

    Section
12.05    Survival.  All
covenants, agreements, representations and warranties made by any Obligor in any
Financing Document and in the certificates or other instruments delivered in
connection with or pursuant to the Financing Documents shall be considered to
have been relied upon by the other parties hereto and shall survive the
execution and delivery of this Agreement, the other Financing Documents and the
making of any Loans and the issuance of any LCs, regardless of any investigation
made by any such other party or on its behalf and notwithstanding that the
Administrative Agent, LC Bank or any Lender may have had notice or knowledge of
any Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any fee or any other amount
payable under the Financing Documents is outstanding and unpaid or any LC is
outstanding and so long as the Commitments have not expired or
terminated.  The provisions of Sections 2.09(a)
(with respect to LC issuance fees), 4.03 and 12.03 and Articles X and XI shall survive and
remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the expiration or
termination of the LCs and Commitments or the termination of the Financing
Documents or any provision thereof.

     

    
      
         

      

      
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    Section
12.06   Counterparts: Integration;
Effectiveness.  This Agreement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract.  This Agreement and any separate letter agreements
with respect to fees payable to the Administrative Agent constitute the entire
contract between and among the parties relating to the subject matter hereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof.  This Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.  Delivery of an executed
counterpart of a signature page to this Agreement by facsimile shall be
effective as delivery of a manually executed counterpart of this
Agreement.

     

    Section
12.07   Severability.  Any
provision of this Agreement held to be invalid, illegal or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability without affecting the validity,
legality and enforceability of the remaining provisions hereof; and the
invalidity of a particular provision in a particular jurisdiction shall not
invalidate such provision in any other jurisdiction.

     

    Section
12.08    Right of Setoff; Sharing; Payments
Set Aside.

     

    (a)    Right of
Setoff.  If an Event of Default shall have occurred and be
continuing, each Lender, the LC Bank and each of their respective Affiliates is
hereby authorized at any time and from time to time, after obtaining the prior
written consent of the Administrative Agent, to the fullest extent permitted by
applicable law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final, in whatever currency) at any time held and
other obligations (in whatever currency) at any time owing by such Lender, the
LC Bank or any such Affiliate to or for the credit or the account of any Obligor
against any and all of the obligations of such Obligor now or hereafter existing
under this Agreement or any other Financing Document to such Lender or the LC
Bank, irrespective of whether or not such Lender or the LC Bank shall have made
any demand under any Financing Document and although such obligations of the
Borrower or such other Obligor may be contingent or unmatured or are owed to a
branch or office of such Lender or the LC Bank different from the branch or
office holding such deposit or obligated on such indebtedness.  The
rights of each Lender, the LC Bank and their respective Affiliates under this
Section are in addition to other rights and remedies (including other rights of
setoff) that such Lender, the LC Bank or their respective Affiliates may
have.  Each Lender and the LC Bank agrees to notify the Borrower and
the Administrative Agent promptly after any such setoff and application,
provided that the failure to give such notice shall not affect the validity of
such setoff and application.

     

    
      
         

      

      
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    (b)    Sharing.  If any
Lender shall, by exercising any right of setoff or counterclaim or otherwise,
obtain payment in respect of (1) Secured Obligations due and payable to such
Lender under the Financing Documents at such time in excess of its ratable share
(according to the proportion of (A) the amount of such Secured Obligations due
and payable to such Lender at such time to (B) the aggregate amount of the
Secured Obligations due and payable to all Lenders under the Financing Documents
at such time) of payments on account of the Secured Obligations due and payable
to all Lenders under the Financing Documents at such time obtained by all the
Lenders at such time or (2) Secured Obligations owing (but not due and payable)
to such Lender under the Financing Documents at such time in excess of its
ratable share (according to the proportion of (i) the amount of such Secured
Obligations owing (but not due and payable) to such Lender at such time to (ii)
the aggregate amount of the Secured Obligations owing (but not due and payable)
to all Lenders under the Financing Documents at such time) of payment on account
of the Secured Obligations owing (but not due and payable) to all Lenders under
the Financing Documents at such time obtained by all of the Lenders at such time
then the Lender receiving such greater proportion shall (x) notify the
Administrative Agent of such fact, and (y) purchase (for cash at face value)
participations in the Loans and subparticipations in L/C Obligations of the
other Lenders, or make such other adjustments as shall be equitable, so that the
benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of Secured Obligations then due and payable
to the Lenders or owing (but not due and payable) to the Lenders, as the case
may be, provided
that:

     

    (i)        if
any such participations or subparticipations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations or
subparticipations shall be rescinded and the purchase price restored to the
extent of such recovery, without interest; and

     

    (ii)       the
provisions of this Section shall not be construed to apply to (A) any payment
made by the Borrower pursuant to and in accordance with the express terms of
this Agreement or (B) any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or
subparticipations in L/C Obligations to any assignee or participant, other than
to the Borrower or any Subsidiary thereof (as to which the provisions of this
subsection shall apply).

     

    (c)    Consent of
Obligors.  Each Obligor consents to the foregoing and agrees
that any Lender acquiring a participation pursuant to the foregoing arrangements
may exercise against such Obligor all rights of set-off, banker’s lien,
counterclaim or similar rights with respect to such participation as fully as if
such Lender were a direct creditor of such Obligor in the amount of such
participation.

     

    (d)    Rights of
Lenders.  Nothing contained herein shall require any Lender to
exercise any such right or shall affect the right of any Lender to exercise, and
retain the benefits of exercising, any such right with respect to any other
indebtedness or obligation of any Obligor.

     

    
      
         

      

      
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    (e)    Payments Set
Aside.  To the extent that any payment by or on behalf of the
Borrower is made to the Administrative Agent, the LC Bank or any Lender, or the
Administrative Agent, the LC Bank or any Lender exercises its right of setoff,
and such payment or the proceeds of such setoff or any part thereof is
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required (including pursuant to any settlement entered into by the
Administrative Agent, the LC Bank or such Lender in its discretion) to be repaid
to a trustee, receiver or any other party, in connection with any proceeding
under any insolvency, bankruptcy or similar debtor relief law or otherwise, then
(1) to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such setoff had not occurred, and (2)
each Lender and the LC Bank severally agrees to pay to the Administrative Agent
upon demand its applicable share (without duplication) of any amount so
recovered from or repaid by the Administrative Agent, plus interest thereon from
the date of such demand to the date such payment is made at a rate per annum
equal to the Federal Funds Rate from time to time in effect.  The
obligations of the Lenders and the LC Bank under clause (2) of the preceding
sentence shall survive the payment in full of the Secured Obligations and the
termination of this Agreement.

     

    Section
12.09    Governing Law; Jurisdiction; Service
of Process.

     

    (a)    This
Agreement, the other Financing Documents and any other agreement or documents
relating thereto and the rights and obligations of the parties hereunder and
thereunder shall be construed and interpreted in accordance with the law of the
Commonwealth of Massachusetts.  Each Obligor agrees that the execution
of this Agreement and the other Financing Documents, and the rights and
obligations of the parties hereunder and thereunder shall be deemed to have a
Massachusetts situs and each Obligor shall be subject to the personal
jurisdiction of the courts of the Commonwealth of Massachusetts with respect to
any action the Administrative Agent, LC Bank, any Lender or their respective
successors or assigns may commence hereunder or thereunder. Accordingly, each
Obligor hereby specifically and irrevocably consents to the jurisdiction of the
courts of the Commonwealth of Massachusetts with respect to all matters
concerning this Agreement and the other Financing Documents, the Loans, the LCs
and/or any agreement, instrument or document executed or delivered in connection
with this Agreement and the other Financing Documents or the enforcement of any
of the foregoing.

     

    (b)    Each
Obligor hereby irrevocably and unconditionally waives, to the fullest extent it
may legally and effectively do so, any objection that it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement or the other Financing Documents in any court
referred to in Section
12.09(a).  Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by applicable law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

     

    (c)    The
Borrower and the Guarantors each irrevocably consents to service of process in
the manner provided for notices herein.  Nothing in this Agreement
will affect the right of any party to this Agreement to serve process in any
other manner permitted by law.

     

    Section
12.10    WAIVER
OF JURY TRIAL.   EACH PARTY HERETO
HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT
MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO ANY FINANCING DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.

     

    
      
         

      

      
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    Section
12.11    Headings.  Article
and Section headings and the Table of Contents used herein are for convenience
of reference only, are not part of this Agreement and shall not affect the
construction of, or be taken into consideration in interpreting, this
Agreement.

     

    Section
12.12    Confidentiality.

     

    (a)    Each
Obligor acknowledges that from time to time financial advisory, investment
banking and other services may be offered or provided to such Obligor or one or
more of its Subsidiaries (in connection with this Agreement or otherwise) by a
Lender or by one or more subsidiaries or affiliates of a Lender and each Obligor
hereby authorizes each Lender to share any information delivered to such Lender
by any Obligor and its Subsidiaries pursuant to this Agreement, or in connection
with the decision of such Lender to enter into this Agreement, to any such
subsidiary or affiliate, it being understood that any such subsidiary or
affiliate receiving such information shall be bound by the provisions of
paragraph (b) of this Section as if it were a Lender hereunder.  Such
authorization shall survive the repayment of the Loans, the expiration or
termination of the Commitments or LCs or the termination of this Agreement or
any provision hereof.

     

    (b)    Each
of the Administrative Agent, the Lenders and the LC Bank agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (i) to its and its Affiliates’ directors, officers, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (ii) upon written notice to the Borrower, to the
extent requested by any regulatory authority, (iii) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (iv)
to any other party to this Agreement, (v) in connection with the exercise of any
remedies under any Financing Document or any suit, action or proceeding relating
to any Financing Document or the enforcement of rights thereunder, (vi) subject
to an agreement containing provisions substantially the same as those of this
paragraph, to any assignee of or Participant in, or any prospective assignee of
or Participant in, any of its rights or obligations under this Agreement, (vii)
with the consent of the Borrower or (viii) to the extent such Information (A)
becomes publicly available other than as a result of a breach of this paragraph
or (B) becomes available to the Administrative Agent, any Lender or the LC Bank
on a nonconfidential basis from a source other than an Obligor.  For
the purposes of this paragraph, “Information” means all
information received from any Obligor relating to any Obligor or its business,
other than any such information that is available to the Administrative Agent,
any Lender or the LC Bank on a nonconfidential basis prior to disclosure by an
Obligor.  Any Person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information.

     

    
      
         

      

      
        Page |
104

        
          

        

      

      
         

      

    

    Section
12.13    USA PATRIOT Act
Notice.  Each Lender that is subject to the Patriot Act and the
Administrative Agent (for itself and not on behalf of any Lender) hereby
notifies the Borrower that pursuant to the requirements of the Patriot Act, it
is required to obtain, verify and record information that identifies the
Borrower, which information includes the name and address of the Borrower and
other information that will allow such Lender or the Administrative Agent, as
applicable, to identify the Borrower in accordance with the Patriot
Act.  The Borrower shall, promptly following a request by the
Administrative Agent or any Lender, provide all documentation and other
information that the Administrative Agent or such Lender requests in order to
comply with its ongoing obligations under applicable “know your customer” and
anti-money laundering rules and regulations, including the Patriot
Act.

     

    
      
         

      

      
        Page |
105

        
          

        

      

      
         

      

    

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

     

    
      
        
          
            
              
                
                  
                    	
                            BORROWER

                          
	 
      
	
                            SERACARE
      LIFE SCIENCES, INC.

                          
	 
      
	
                            By:

                          	
                            /s/ Gregory A. Gould

                          
	 
      	
                            Name:  Gregory
      A. Gould

                          
	 
      	
                            Title:  Chief
      Financial Officer,

                          
	 
      	
                                       Treasurer
      and Secretary

                          
	 
      	 
      
	GUARANTORS
	 
      	 
      
	[None
      on the date of this
Agreement.]

                  

                

              

            

          

        

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      
        
          
            	 
      	
                    ADMINISTRATIVE AGENT

                  
	 
      	 
      
	 
      	
                    MIDDLESEX
      SAVINGS BANK, as

                    Administrative
      Agent

                  
	 
      	 
      	 
      
	 
      	
                    By:

                  	
                    /s/ Tony Zhang

                  
	 
      	
                    Name:

                  	
                    Tony Zhang

                  
	 
      	
                    Title:

                  	
                    Vice President

                  
	 
      	 
      	 
      
	 
      	
                    LENDERS AND LC BANK

                  
	 
      	 
      
	 
      	
                    MIDDLESEX
      SAVINGS BANK, as a Lender and

                    as
      LC Bank

                  
	 
      	 
      	 
      
	 
      	
                    By:

                  	
                    /s/ Tony Zhang

                  
	 
      	
                    Name:

                  	
                    Tony Zhang

                  
	 
      	
                    Title:

                  	
                    Vice
President

                  

          

        

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      
        	 
      	
                COMMERCE
      BANK AND TRUST COMPANY

              
	 
      	 
      	 
      
	 
      	
                By:

              	
                /s/ Scott Virzi

              
	 
      	
                Name:

              	
                Scott Virzi

              
	 
      	
                Title:

              	
                Vice
President

              

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SCHEDULE
A

    

    COMMITMENTS

     

    
      
        
          	
                  Lender

                	 	
                  Revolving Commitment

                	 	 	
                  Term Commitment

                	 
	
                  Middlesex
      Savings Bank

                	 	$	3,000,000	 	 	$	9,000,000	 
	
                  Commerce
      Bank and Trust Company

                	 	$	2,000,000	 	 	$	6,000,000	 
	
                  TOTAL

                	 	$	5,000,000	 	 	$	15,000,000	 

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
A-1

    

    FORM OF REVOLVING
NOTE

    

    
      	
              $____________

            	
              December
      30,
2010      

            

    

    

    FOR VALUE
RECEIVED, the undersigned SERACARE LIFE SCIENCES, INC., a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, with a principal place of business located at 37 Birch Street,
Milford, Massachusetts 01757, and a mailing address in Massachusetts at 37 Birch
Street, Milford, Massachusetts 01757 (hereinafter called the "Borrower"), promises to pay to
[insert name of Lender]
or registered assigns (hereinafter called the "Lender"), OR ORDER, ON DEMAND
on the Revolving Commitment Termination Date, the principal sum of ___________
($________) DOLLARS (or such lesser amount as may have been advanced to Borrower
by Lender from time to time hereunder) (each, an "Advance") with interest on the
unpaid balance hereof from the date hereof until paid in full in cash, at the
rate and in the manner hereinafter provided, in lawful money of the United
States of America.  All payments of principal and interest shall be
made to Middlesex Savings Bank (“Middlesex”) as administrative
agent (the “Administrative
Agent”) under the Loan Agreement dated as of December 30, 2010 (as
amended from time to time, the “Loan Agreement”) among the
Borrower, the guarantors party thereto, the lenders (including the Lender) party
thereto, the LC Bank party thereto and the Administrative Agent, for account of
the Lender in U.S. dollars in immediately available funds at the Administrative
Agent’s office at 120 Flanders Road, Westborough, Massachusetts
01581.

    

    Variable Rate;
Payments:  The unpaid principal of this Note from time to time
outstanding shall bear interest, computed on the basis of the actual number of
days elapsed over a year assumed to have 360 days, at an annual rate equal to
the Prime Rate plus one-half of one percent (0.5%) per annum, but in any event
not less than 3.49% per annum ("Interest Rate").

    

    As used
herein, the “Prime Rate”
means the rate from time to time announced and made effective by Middlesex as
its Prime Rate.  The Prime Rate hereunder shall change as Middlesex's
Prime Rate changes and any such change shall be effective on the announcement
date by Middlesex of such change.

    

    Beginning
on February 1, 2011 and on the first day of each and every
month thereafter during the existence of the Note, Borrower shall make payments
of interest monthly in arrears on outstanding Advances.  Principal not
paid when due hereunder shall bear interest at the rate set forth above from the
date due until so paid and shall be due and payable upon demand, whether or not
an Event of Default has occurred. Payments hereunder shall be applied first to
interest then due on the unpaid balance of principal and then to such
principal.

    

    Late
Charge:  Whenever any installment of principal and/or interest
due hereunder shall not be paid when due, if so required by the requisite
percentage of lenders under the Loan Agreement, the Borrower shall pay in
addition thereto as a late charge, four percent (4%) of the amount of any such
past due amount.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Revolving
Credit:  Until such right is terminated by the requisite
percentage of lenders specified in the Loan Agreement by a refusal to make any
further Advances, the Borrower may borrow, repay (without penalty), and reborrow
hereunder from time to time in accordance with the Loan Agreement for working
capital and general corporate purposes of Borrower, provided that the aggregate
principal amount at any time outstanding shall not exceed the face amount of
this Note, as described in the Loan Agreement.

    

    Security:  This Note
is secured by a security interest in all assets of the Borrower and its domestic
subsidiaries, pursuant to a Security Agreement of even date herewith among
Borrower, the other grantors party thereto and the Administrative Agent (as
amended and in effect from time to time, the "Security Agreement"), and the
other Security Documents referred to in the Loan Agreement.  All of
Borrower’s obligations to the Lender however characterized (the "Obligations") are guaranteed
pursuant to a guaranty (as amended and in effect from time to time, the "Guaranty") made by the
Borrower’s domestic subsidiaries (the “Guarantors”), if
any.  Such documents, together with various other instruments securing
this Note (the terms and provisions of all of which are incorporated herein by
reference) are herein referred to as the "Security
Instruments."

    

    Setoff:  Any
deposits or other sums at any time credited by or due from the holder to the
Borrower or any Guarantor and any securities or other property of Borrower or
any Guarantor in the possession or custody of the holder may at all times be
held and treated as collateral security for the payment of this Note and any and
all other liabilities, direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter arising, of said Borrower or Guarantor to
the holder; and the holder on or after default in payment hereof that
constitutes an Event of Default under and as defined in the Loan Agreement may
sell any such securities or other property at broker's board or at public or
private sale without demand, notice or advertisement of any kind, all of which
are hereby expressly waived. The holder may at any time apply or set off such
deposits or other sums against said liabilities of Borrower and
Guarantors.

    

    Demand Rate:  If so
required by the requisite percentage of lenders under the Loan Agreement,
Borrower shall pay an interest rate which is three percent (3%) per annum above
the interest rate otherwise payable hereunder ("Demand Rate”) (a) while any
monetary amount remains unpaid hereunder and such failure to pay is an Event of
Default under the Loan Agreement; and (b) following the occurrence of and during
the continuation of any other Event of Default under the Loan Agreement (or, if
applicable, any of the Security Instruments), unless and until such Event of
Default is cured or waived by the requisite percentage of lenders under the Loan
Agreement.

    

    Collection
Costs:  If this Note shall not be paid in full upon demand as
set forth herein, the Borrower agrees to pay all costs and expenses of
collection, including court costs and reasonable attorneys' fees.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

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

    

    JURY TRIAL
WAIVER:  EACH OF BORROWER, GUARANTORS AND LENDER MUTUALLY
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION BASED ON THIS NOTE, ARISING OUT OF, UNDER OR
IN CONNECTION WITH THE LOAN AGREEMENT OR ANY SECURITY INSTRUMENTS, OR ANY COURSE
OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF ANY PARTY.  THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT
FOR BORROWER, GUARANTORS AND LENDER TO ENTER INTO THE TRANSACTIONS CONTEMPLATED
HEREBY.

    

    The
Borrower and Guarantors have received a copy of this Note.

    

    This Note
shall be the joint and several obligation of the Borrower and all sureties,
guarantors and endorsers, and shall be binding upon them and their respective
successors and assigns and each or any of them.

    

    [remainder of page left intentionally
blank]

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the Borrower has executed this Note as an instrument under
seal, as of the day and year first above written.

    

    
      
        
          
            	 
      	 
      	
                    BORROWER

                  
	 
      	 
      
	
                    Signed
      in the presence of:

                  	 
      	
                    SERACARE
      LIFE SCIENCES,

                    INC.

                  
	 
      	 
      	 
      	 
      
	 
      	 
      	
                    By:

                  	 
      
	
                    Witness

                  	 
      	
                    Name:

                  	 
      
	
                    Title:

                  	
                    ,
      duly authorized

                  	 
      	
                    Title:

                  	 
      

          

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
A-2

    

    FORM OF INITIAL TERM
NOTE

    

    
      	
              $___________

            	
              December
      30,
      2010                

            

    

    

    FOR VALUE
RECEIVED, the undersigned SERACARE LIFE SCIENCES, INC., a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, with a principal place of business located at 37 Birch Street,
Milford, Massachusetts 01757, and a mailing address in Massachusetts at 37 Birch
Street, Milford, Massachusetts 01757 (hereinafter called the "Borrower"), promises to pay to
[insert name of Lender]
or registered assigns (hereinafter called the "Lender"), OR TO ITS ORDER, the
principal sum of ___________ AND 00/100 DOLLARS ($________) (or such lesser
amount of term loans as may have been advanced to Borrower by Lender from time
to time hereunder and pursuant to the Loan Agreement (defined below)) with
interest on the unpaid balance hereof from the date hereof until paid in full in
cash, at the rate and in the manner hereinafter provided, in lawful money of the
United States of America.  All payments of principal and interest
shall be made to Middlesex Savings Bank (“Middlesex”) as administrative
agent (the “Administrative
Agent”) under the Loan Agreement dated as of December 30, 2010 (as
amended from time to time, the “Loan Agreement”) among the
Borrower, the guarantors party thereto, the lenders (including the Lender) party
thereto, the LC Bank party thereto and the Administrative Agent, for account of
the Lender in U.S. dollars in immediately available funds at the Administrative
Agent’s office at 120 Flanders Road, Westborough, Massachusetts
01581.

    

    Variable Rate;
Payments:  From the date of this Note to but excluding February
29, 2012, the unpaid principal of this Note from time to time outstanding shall
bear interest, computed on the basis of the actual number of days elapsed over a
year assumed to have 360 days, at an annual rate equal to the Prime Rate plus
one-half of one percent (0.5%) per annum, but in any event not less than 3.49%
per annum ("Interest
Rate").

    

    As used
herein, the Prime Rate means the rate from time to time announced and made
effective by Middlesex as its Prime Rate.  The Prime Rate hereunder
shall change as Middlesex's Prime Rate changes and any such change shall be
effective on the announcement date by Middlesex of such change.

    

    Fixed Rate;
Payments:  From and including February 29, 2012 to but
excluding February 29, 2017, the unpaid principal of this Note from time to time
outstanding shall bear interest, computed on the basis of the actual number of
days elapsed over a year assumed to have 360 days, at an annual rate equal to
the higher (as determined on February 29, 2012) of (a) the five-year Treasury
rate plus three percent
(3.00%) per annum and (b) a fixed rate of five and 49/100 percent (5.49%) per
annum (the “Interest
Rate”).  From and after February 29, 2017, the unpaid principal
of this Note from time to time outstanding shall bear interest, computed on the
basis of the actual number of days elapsed over a year assumed to have 360 days,
at an annual rate equal to the higher of (a) the two-year Treasury rate plus three and one-half
percent (3.50%) per annum and (b) a fixed rate of five and 49/100 percent
(5.49%) per annum (the “Interest
Rate”).

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Beginning
on February 1, 2011 and on the first day of each and every month thereafter
during the term hereof, Borrower shall make payments of interest monthly in
arrears on the outstanding principal of this Note.  Unless paid in
full in cash on or before the Term-Out Date (defined below), Borrower shall make
monthly payments of principal of this Note, in eighty-four (84) consecutive
installments, one payable on each Principal Payment Date (defined
below).  Principal not paid when due hereunder shall bear interest at
the rate set forth above from the date due until so paid.  Each
payment shall be applied first to interest then due on the unpaid balance of
principal and then to such principal.  “Principal Payment Date” means
the first business day of each calendar month, commencing with April 1, 2012
(or, if the commitments of the lenders party to the Loan Agreement to make term
loans to the Borrower under the Loan Agreement terminate before February 29,
2012, commencing with the first such date to occur after the date such
commitments terminate), and the Maturity Date.

    

    Amortization:  Such
monthly payments shall be made in a seven (7) year, straight-line amortization
schedule to be attached by the Administrative Agent to this Note (or any
amendment and restatement of this Note as provided in the Loan Agreement) by the
Term-Out Date.

    

    This Note
shall termed-out in accordance with the Loan Agreement on February 29, 2012 (the
“Term-Out Date”) and
shall be due and payable on February 28, 2019 (the “Maturity Date”), unless such
date is extended in a written agreement executed by Borrower, the Guarantors
(defined below), the lenders party to the Loan Agreement (including the Lender),
LC Bank party thereto and the Administrative Agent.

    

    Late
Charge:  Whenever any installment of principal and/or interest
due hereunder shall not be paid when due, if so required by the requisite
percentage of lenders under the Loan Agreement, the Borrower shall pay in
addition thereto as a late charge, four percent (4%) of the amount of any such
past due amount.

    

    Security:  This Note
is secured by a security interest in all assets of the Borrower and its domestic
subsidiaries, pursuant to a Security Agreement of even date herewith among
Borrower, the other grantors party thereto and the Administrative Agent (as
amended and in effect from time to time, the "Security Agreement"), and the
other Security Documents referred to in the Loan Agreement.  All of
Borrower’s Guaranteed Obligations (as defined in the Loan Agreement) to the
Lender (the "Obligations") are guaranteed
pursuant to a guaranty (as amended and in effect from time to time, the "Guaranty") made by the
Borrower’s domestic subsidiaries (the “Guarantors”), if
any.  Such documents, together with various other instruments securing
this Note (the terms and provisions of all of which are incorporated herein by
reference) are herein referred to as the "Security
Instruments."

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Default:  An Event
of Default under the Loan Agreement (or, if applicable, any of the Security
Instruments) shall constitute an Event of Default hereunder, and such events of
default include, but are not limited to, the failure of Borrower to make any
payments of principal when due hereunder.  Upon the occurrence of an
Event of Default, the requisite percentage of lenders under the Loan Agreement
may, at their option, without notice or demand, declare the unpaid principal and
all accrued interest under this Note to be immediately due and payable without
presentment, demand, protest, notice of protest or other notice of dishonor of
any kind, all of which are hereby expressly waived by the Borrower for itself,
its successors and assigns.  No course of dealing or delay in
accelerating the maturity of this Note or in taking any other action with
respect to any Event of Default shall affect Lender's or Administrative Agent’s
rights to take action with respect thereto, and no waiver as to any one Event of
Default shall affect any of Lender's or Administrative Agent’s rights as to any
other Event of Default.

    

    Setoff:  Any
deposits or other sums at any time credited by or due from the holder to the
Borrower or any Guarantor and any securities or other property of Borrower or
any Guarantor in the possession or custody of the holder may at all times be
held and treated as collateral security for the payment of this Note and any and
all other liabilities, direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter arising, of said respective Borrower or
any Guarantor to the holder.  The holder hereof on or after default in
payment hereof that constitutes an Event of Default hereunder may apply such
deposits or other sums to said Obligations and sell any such securities or other
property at broker's board or at public or private sale without demand, notice
or advertisement of any kind, all of which are hereby expressly
waived.

    

    Default Rate:  The
requisite percentage of lenders under the Loan Agreement shall have the option
of imposing, and Borrower shall pay upon billing therefor, an interest rate
which is three percent (3%) per annum above the interest rate otherwise payable
hereunder ("Default
Rate"): (a) while any monetary amount remains unpaid hereunder and such
failure to pay is an Event of Default under the Loan Agreement; (b) following
the occurrence of and during the continuance of any other Event of Default under
the Loan Agreement (or, if applicable, any of the Security Instruments), unless
and until the Event of Default is cured or waived by the requisite percentage of
lenders under the Loan Agreement; and (c) after the Maturity Date.

    

    Collection
Costs:  If this Note shall not be paid in full whenever it
shall become due, the Borrower and Guarantors agree to pay all costs and
expenses of collection, including court costs and reasonable attorneys'
fees.

    

    Prepayment:  Borrower
may make partial or a full prepayment of principal due hereunder without
penalty, provided however, that as to full prepayments made with funds provided
by any lender(s) other than Middlesex and Commerce Bank and Trust Company, a
prepayment charge will be applicable for the first three (3) year period of this
Note, on the terms more fully provided in the Loan Agreement.  The
charge will be equal to three (3%) percent of the amount of principal of this
Note prepaid for the first such year, two (2%) percent for the second such year,
and one (1%) percent for the third such year.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

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

    

    JURY TRIAL
WAIVER:  EACH OF BORROWER, GUARANTORS AND LENDER MUTUALLY
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION BASED ON THIS NOTE, ARISING OUT OF, UNDER OR
IN CONNECTION WITH THE LOAN AGREEMENT OR ANY SECURITY INSTRUMENTS, OR ANY COURSE
OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF ANY PARTY.  THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT
FOR BORROWER, GUARANTORS AND LENDER TO ENTER INTO THE TRANSACTIONS CONTEMPLATED
HEREBY.

    

    The
Borrower and Guarantors have received a copy of this Note.

    

    This Note
shall be the joint and several obligation of the Borrower and all sureties,
guarantors and endorsers, and shall be binding upon them and their respective
successors and assigns and each or any of them.

    

    [remainder of page left intentionally
blank]

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the Borrower has executed this Note as an instrument under
seal, as of the day and year first above written.

    

    
      
        
          	 
      	 
      	
                  BORROWER

                
	 
      	 
      
	
                  Signed
      in the presence of:

                	 
      	
                  SERACARE
      LIFE SCIENCES,

                  INC.

                
	 
      	 
      	 
      	 
      
	 
      	 
      	
                  By:

                	 
      
	
                  Witness

                	 
      	
                  Name:

                	 
      
	
                  Title:

                	
                  ,
      duly authorized

                	 
      	
                  Title:

                	 
      

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
A-3

    

    [FORM OF] AMENDED AND
RESTATED TERM
NOTE

    

    
      	
              $___________

            	
              December
      30,
      2010               

            

    

    

    FOR VALUE
RECEIVED, the undersigned SERACARE LIFE SCIENCES, INC., a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, with a principal place of business located at 37 Birch Street,
Milford, Massachusetts 01757, and a mailing address in Massachusetts at 37 Birch
Street, Milford, Massachusetts 01757 (hereinafter called the "Borrower"), promises to pay to
[insert name of Lender]
or registered assigns (hereinafter called the "Lender"), OR TO ITS ORDER, the
principal sum of ___________ AND 00/100 DOLLARS ($________) with interest on the
unpaid balance hereof from the date hereof until paid in full in cash, at the
rate and in the manner hereinafter provided, in lawful money of the United
States of America.  All payments of principal and interest shall be
made to Middlesex Savings Bank (“Middlesex”) as administrative
agent (the “Administrative
Agent”) under the Loan Agreement dated as of December 30, 2010 (as
amended from time to time, the “Loan Agreement”) among the
Borrower, the guarantors party thereto, the lenders (including the Lender) party
thereto, the LC Bank party thereto and the Administrative Agent, for account of
the Lender in U.S. dollars in immediately available funds at the Administrative
Agent’s office at 120 Flanders Road, Westborough, Massachusetts
01581.

    

    Variable Rate;
Payments:  From the date of this Note to but excluding February
29, 2012, the unpaid principal of this Note from time to time outstanding shall
bear interest, computed on the basis of the actual number of days elapsed over a
year assumed to have 360 days, at an annual rate equal to the Prime Rate plus
one-half of one percent (0.5%) per annum, but in any event not less than 3.49%
per annum ("Interest
Rate").

    

    As used
herein, the Prime Rate means the rate from time to time announced and made
effective by Middlesex as its Prime Rate.  The Prime Rate hereunder
shall change as Middlesex's Prime Rate changes and any such change shall be
effective on the announcement date by Middlesex of such change.

    

    Fixed Rate;
Payments:  From and including February 29, 2012 to but
excluding February 29, 2017, the unpaid principal of this Note from time to time
outstanding shall bear interest, computed on the basis of the actual number of
days elapsed over a year assumed to have 360 days, at an annual rate equal to
the higher (as determined on February 29, 2012) of (a) the five-year Treasury
rate plus three percent
(3.00%) per annum and (b) a fixed rate of five and 49/100 percent (5.49%) per
annum (the “Interest
Rate”).  From and after February 29, 2017, the unpaid principal
of this Note from time to time outstanding shall bear interest, computed on the
basis of the actual number of days elapsed over a year assumed to have 360 days,
at an annual rate equal to the higher of (a) the two-year Treasury rate plus three and one-half
percent (3.50%) per annum and (b) a fixed rate of five and 49/100 percent
(5.49%) per annum (the “Interest Rate”).

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Beginning
on February 1, 2011 and on the first day of each and every month thereafter
during the term hereof, Borrower shall make payments of interest monthly in
arrears on the outstanding principal of this Note.  Borrower shall
make monthly payments of principal of this Note, in eighty-four (84) consecutive
installments, one payable on each Principal Payment Date (defined
below).  Principal not paid when due hereunder shall bear interest at
the rate set forth above from the date due until so paid.  Each
payment shall be applied first to interest then due on the unpaid balance of
principal and then to such principal.  “Principal Payment Date” means
the first business day of each calendar month, commencing with April 1, 2012,
and the Maturity Date.

    

    Amortization:  Such
monthly payments shall be made in a seven (7) year, straight-line amortization
schedule attached hereto.

    

    This Note
shall be due and payable on February 28, 2019 (the “Maturity Date”), unless such
date is extended in a written agreement executed by Borrower, the Guarantors
(defined below), the lenders party to the Loan Agreement (including the Lender),
LC Bank party thereto and the Administrative Agent.

    

    Late
Charge:  Whenever any installment of principal and/or interest
due hereunder shall not be paid when due, if so required by the requisite
percentage of lenders under the Loan Agreement, the Borrower shall pay in
addition thereto as a late charge, four percent (4%) of the amount of any such
past due amount.

    

    Security:  This Note
is secured by a security interest in all assets of the Borrower and its domestic
subsidiaries, pursuant to a Security Agreement of even date herewith among
Borrower, the other grantors party thereto and the Administrative Agent (as
amended and in effect from time to time, the "Security Agreement"), and the
other Security Documents referred to in the Loan Agreement.  All of
Borrower’s Guaranteed Obligations (as defined in the Loan Agreement) to the
Lender (the "Obligations") are guaranteed
pursuant to a guaranty (as amended and in effect from time to time, the "Guaranty") made by the
Borrower’s domestic subsidiaries (the “Guarantors”), if
any.  Such documents, together with various other instruments securing
this Note (the terms and provisions of all of which are incorporated herein by
reference) are herein referred to as the "Security
Instruments."

    

    Default:  An Event
of Default under the Loan Agreement (or, if applicable, any of the Security
Instruments) shall constitute an Event of Default hereunder, and such events of
default include, but are not limited to, the failure of Borrower to make any
payments of principal when due hereunder.  Upon the occurrence of an
Event of Default, the requisite percentage of lenders under the Loan Agreement
may, at their option, without notice or demand, declare the unpaid principal and
all accrued interest under this Note to be immediately due and payable without
presentment, demand, protest, notice of protest or other notice of dishonor of
any kind, all of which are hereby expressly waived by the Borrower for itself,
its successors and assigns.  No course of dealing or delay in
accelerating the maturity of this Note or in taking any other action with
respect to any Event of Default shall affect Lender's or Administrative Agent’s
rights to take action with respect thereto, and no waiver as to any one Event of
Default shall affect any of Lender's or Administrative Agent’s rights as to any
other Event of Default.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Setoff:  Any
deposits or other sums at any time credited by or due from the holder to the
Borrower or any Guarantor and any securities or other property of Borrower or
any Guarantor in the possession or custody of the holder may at all times be
held and treated as collateral security for the payment of this Note and any and
all other liabilities, direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter arising, of said respective Borrower or
any Guarantor to the holder.  The holder hereof on or after default in
payment hereof that constitutes an Event of Default may apply such deposits or
other sums to said Obligations and sell any such securities or other property at
broker's board or at public or private sale without demand, notice or
advertisement of any kind, all of which are hereby expressly
waived.

    

    Default Rate:  The
requisite percentage of lenders under the Loan Agreement shall have the option
of imposing, and Borrower shall pay upon billing therefor, an interest rate
which is three percent (3%) per annum above the interest rate otherwise payable
hereunder ("Default
Rate"): (a) while any monetary amount remains unpaid hereunder and such
failure to pay is an Event of Default under the Loan Agreement; (b) following
the occurrence of an during the continuance of any other Event of Default under
the Loan Agreement (or, if applicable, any of the Security Instruments), unless
and until the Event of Default is cured or waived by the requisite percentage of
lenders under the Loan Agreement; and (c) after the Maturity Date.

    

    Collection
Costs:  If this Note shall not be paid in full whenever it
shall become due, the Borrower and Guarantors agree to pay all costs and
expenses of collection, including court costs and reasonable attorneys'
fees.

    

    Prepayment:  Borrower
may make partial or a full prepayment of principal due hereunder without
penalty, provided however, that as to full prepayments made with funds provided
by any lender(s) other than Middlesex and Commerce Bank and Trust Company, a
prepayment charge will be applicable for the first three (3) year period of this
Note, on the terms more fully provided in the Loan Agreement.  The
charge will be equal to three (3%) percent of the amount of principal of this
Note prepaid for the first such year, two (2%) percent for the second such year,
and one (1%) percent for the third such year.

    

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

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    JURY TRIAL
WAIVER:  EACH OF BORROWER, GUARANTORS AND LENDER MUTUALLY
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION BASED ON THIS NOTE, ARISING OUT OF, UNDER OR
IN CONNECTION WITH THE LOAN AGREEMENT OR ANY SECURITY INSTRUMENTS, OR ANY COURSE
OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF ANY PARTY.  THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT
FOR BORROWER, GUARANTORS AND LENDER TO ENTER INTO THE TRANSACTIONS CONTEMPLATED
HEREBY.

    

    The
Borrower and Guarantors have received a copy of this Note.

    

    This Note
shall be the joint and several obligation of the Borrower and all sureties,
guarantors and endorsers, and shall be binding upon them and their respective
successors and assigns and each or any of them.

    

    This Note
amends and restates, and is not a novation of, that certain promissory note of
the Borrower made in favor of the Lender dated December 30, 2010 in the
principal amount of $________ and no/100 U.S. dollars.

    

    [remainder of page left intentionally
blank]

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the Borrower has executed this Note as an instrument under
seal, as of the day and year first above written.

    

    
      
        
          
            
              	 
      	 	BORROWER
	 
      	 	 
      	 
      
	
                      Signed
      in the presence of:

                    	 	SERACARE
      LIFE SCIENCES,
	 
      	 	INC.
	 
      	 	 
      	 
      
	
                        

                    	 	
                      By:

                    	
                        

                    
	
                      Witness

                    	 	 
      	
                      Name:

                    
	
                      Title:           ,
      duly authorized

                    	 	 
      	
                      Title:

                    

            

          

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
B

    

    FORM
OF NOTICE OF BORROWING

    

    [Date]

    

    Middlesex
Savings Bank, as the Administrative

    Agent
under the Loan Agreement referred to below

    

    Ladies
and Gentlemen:

     

    The
undersigned SeraCare Life Sciences, Inc., a Delaware corporation, refers to the
Loan Agreement, dated as of December 30, 2010 (as amended, supplemented or
otherwise modified, the “Loan Agreement”, the
terms defined therein being used herein as therein defined), among the
undersigned, the Guarantors from time to time party thereto, the lenders party
thereto, the LC Bank party thereto and Middlesex Savings Bank, as the
Administrative Agent for such lenders, and hereby gives you notice, irrevocably,
pursuant to Section 2.03 of the Loan Agreement that the undersigned hereby
wishes to borrow under the Loan Agreement, and in that connection sets forth
below the information relating to such Borrowing as required by Section 2.03 of
the Loan Agreement:

     

    1.           The
requested Borrowing is to be (select as applicable):

     

    
      	
               
      

            	
              a.

            	
               ̈
      A [Revolving] [Term]
      Borrowing.

            

    

     

    2.           The
aggregate amount of the requested Borrowing is $[_________].

     

    3.           The
date of the requested Borrowing is ______, _____, which is a Business
Day.

     

    4.           The
location and number of the Borrower’s account to which funds are to be disbursed
is: ____________________________________.

     

    [Signature
Page Follows]

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    The Borrower hereby represents and
warrants that the conditions specified in Section 5.02 of the Loan Agreement
shall be satisfied on and as of the date of the requested
Borrowing.

     

    
      
        
          	 
      	
                  Very
      truly yours,

                
	 
      	 
      
	 
      	
                  SERACARE
      LIFE SCIENCES, INC.

                
	 
      	 
      
	 
      	
                  By:

                	
                    

                
	 
      	
                  Name: 

                	
                    

                
	 
      	
                  Title:

                	
                    

                

        

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
C

    

    FORM
OF BORROWING BASE CERTIFICATE

    

    Date:  ________,
____                            

     

    To:          Middlesex
Savings Bank, as

    Administrative Agent under
the

    Agreement referred to
below

     

    Ladies
and Gentlemen:

     

    Reference
is made to that certain Loan Agreement, dated as of December 30, 2010 (as
amended, restated, extended, supplemented or otherwise modified in writing from
time to time, the “Agreement;” the terms
defined therein being used herein as therein defined), among the undersigned,
the Guarantors from time to time party thereto, the lenders party thereto, the
LC Bank party thereto and Middlesex Savings Bank, as the Administrative Agent
for such lenders.

     

    The
undersigned Responsible Officer1 hereby certifies (on
behalf of the Borrower and not in such person’s individual capacity) as of the
date hereof that he/she is the ___________________________________ of the
Borrower, and that, as such, he/she is authorized to execute and deliver this
Certificate to the Administrative Agent on the behalf of the Borrower, and
that:

     

    
      	
               
      

            	
              1.

            	
              Each
      Receivable reflected in the computations of Eligible Accounts Receivables
      included in this Borrowing Base Certificate meets the criteria enumerated
      in the definition of Eligible Accounts Receivables[, except [describe]].

            

    

     

    
      	
               
      

            	
              2.

            	
              The
      Inventory reflected in the computations of Eligible Inventory included in
      this Borrowing Base Certificate meets the criteria enumerated in the
      definition of Eligible Inventory[, except [describe]].

            

    

     

      
        

    

    
      1           This
certificates should be from the chief executive officer, president, chief
financial officer or treasurer of the Borrower.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, the
undersigned has executed this Certificate as of                                ,                      .

     

    
      
        
          
            	 	
                    SERACARE
      LIFE SCIENCES, INC.

                  
	 	 
      	  
      	 
      
	 	 
      	
                    By:

                  	
                      

                  
	 	 
      	
                    Name:

                  	
                      

                  
	 	 
      	
                    Title:

                  	
                      

                  

          

        

      

    
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SeraCare
Borrowing Base Certificate

    

    
      
        
          
            
              
                	
                        Accounts
      Receivable

                      	 
      	 	
                        Date

                      	 
	
                        Balance
      per Aging: Mass

                      	 
      	 	 	 
	
                        Balance
      per Aging: Maryland

                      	 
      	 	 	 
	
                        Total
      Accounts Receivable Per Aging

                      	
                        A

                      	 	 	0	 
	 
      	 
      	 	 	 	 
	
                        MinusInvoices
      >90 days from invoice date

                      	 
      	 	 	 	 
	
                        Minus
      Taint factor 35%

                      	 
      	 	 	 	 
	
                        Minus
      Contra receivables up to A/P amount

                      	 
      	 	 	 	 
	
                        Minus
      Bill and hold receivables

                      	 
      	 	 	 	 
	
                        Minus
      Aged credits

                      	 
      	 	 	 	 
	
                        Minus
      Government receivables

                      	 
      	 	 	 	 
	
                        Minus
      All Foreign receivables except the top 6 accounts

                      	 
      	 	 	 	 
	
                        Minus
      Other recommended ineligibles

                      	 
      	 	 	 	 
	
                        Eligible
      Accounts Receivables

                      	 
      	 	 	0	 
	
                        Advance
      Rate

                      	 
      	 	 	80	%
	
                        Accounts
      Receivable Availability 1

                      	
                        B

                      	 	 	-	 
	 
      	 
      	 	 	 	 
	
                        Government
      Recievables

                      	 
      	 	 	 	 
	
                          Minus
      Invoices >120 days from invoice date

                      	 
      	 	 	 	 
	
                        Eligible
      Government Receivables

                      	 
      	 	 	0	 
	
                        Advance
      Rate

                      	 
      	 	 	50	%
	
                        Accounts
      Receivable Availability 2

                      	
                        C

                      	 	 	-	 
	 
      	 
      	 	 	 	 
	
                        Total
      Accounts Receivable Availability (B+C)

                      	
                        D

                      	 	 	-	 

              

            

          

        

      

    

    

    
      
        
          
            
              
                
                  
                    	
                            Inventory

                          	 
      	 	
                            Date

                          	 
	
                            Raw
      Material

                          	 
      	 	 	 
	
                              Minus
      2 Year Old Inventory - Raw Material

                          	 
      	 	 	 
	
                              Minus
      Inventory Reserve - Raw Material

                          	 
      	 	 	 
	
                            Eligible
      Raw Material

                          	
                            E

                          	 	 	0	 
	
                            Advance
      Rate

                          	 
      	 	 	34	%
	
                            Raw
      Material Availability

                          	
                            E1

                          	 	 	0	 
	 
      	 
      	 	 	 	 
	
                            Intermediates

                          	 
      	 	 	 	 
	
                              Minus
      2 Year Old Inventory - Intermediates

                          	 
      	 	 	 	 
	
                              Minus
      Inventory Reserve - Intermediates

                          	 
      	 	 	 	 
	
                            Eligible
      Intermediates

                          	
                            F

                          	 	 	0	 
	
                            Advance
      Rate

                          	 
      	 	 	6	%
	
                            Intermediates
      Availability

                          	
                            F1

                          	 	 	0	 
	 
      	 
      	 	 	 	 
	
                            Finished
      Goods - Bulk

                          	 
      	 	 	 	 
	
                              Minus
      2 Year Old Inventory - FG Bulk

                          	 
      	 	 	 	 
	
                              Minus
      Inventory Reserve - FG Bulk

                          	 
      	 	 	 	 
	
                            Eligible
      Finished Goods - Bulk

                          	
                            G

                          	 	 	0	 
	
                            Advance
      Rate

                          	 
      	 	 	81	%
	
                            Finished
      Goods - Bulk Availability

                          	
                            G1

                          	 	 	0	 
	 
      	 
      	 	 	 	 
	
                            Finished
      Goods - Disease State

                          	 
      	 	 	 	 
	
                              Minus
      2 Year Old Inventory - FG Disease

                          	 
      	 	 	 	 
	
                              Minus
      Inventory Reserve - FG Disease

                          	 
      	 	 	 	 
	
                            Eligible
      Finished Goods - Disease

                          	
                            H

                          	 	 	0	 
	
                            Advance
      Rate

                          	 
      	 	 	57	%
	
                            Finished
      Goods - Disease State Availability

                          	
                            H1

                          	 	 	0	 
	 
      	 
      	 	 	 	 
	
                            Gross
      Inventory Availability (E1+F1+G1+H1)

                          	
                            I

                          	 	 	0	 
	 	 	 	 	 	 
	
                              Minus
      Liquidation Expense

                          	 
      	 	 	1,239,303	 
	
                              Minus
      Other Recommended Reserve

                          	 
      	 	 	 	 
	
                            Inventory
      Availability 1

                          	 
      	 	 	(1,239,303	)
	 
      	 
      	 	 	 	 
	
                            Total
      Eligible Inventory (E+F+G+H)

                          	 
      	 	 	-	 
	 	 	 	 	 	 
	
                              Minus
      Liquidation Expense

                          	 
      	 	 	1,239,303	 
	 	 	 	 	 	 
	
                            Net
      Eligible Inventory

                          	 
      	 	 	(1,239,303	)
	
                              Advance
      Rate

                          	 
      	 	 	40	%
	
                            Inventory
      Availability 2

                          	
                            J

                          	 	 	(495,721	)
	 
      	 
      	 	 	 	 
	
                            The
      Smaller of Inventory Availability 1 and 2

                          	
                            K

                          	 	 	(1,239,303	)

                  

                

              

            

          

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        	
                                Accounts
      Receivable and Inventory Borrowing Base

                              	 
      	 	
                                Date

                              	 
	 	 	 	 	 	 
	
                                Total
      Availability (D+K)

                              	
                                L

                              	 	 	(1,239,303	)
	 	 	 	 	 	 
	
                                Maximum
      Availability

                              	
                                M

                              	 	 	5,000,000	 
	
                                Letter
      of Credit Issued

                              	
                                N

                              	 	 	 	 
	
                                Line
      of Credit Outstanding

                              	
                                O

                              	 	 	 	 
	
                                Net
      Availability - Smaller of (L-N-O) and (M-N-O)

                              	 
      	 	 	(1,239,303	)

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
D

    

    FORM
OF COMPLIANCE CERTIFICATE

    

    Financial
Statement Date:  ________,
____                            

     

    To:           Middlesex
Savings Bank, as

    Administrative Agent under
the

    Agreement referred to
below

     

    Ladies
and Gentlemen:

     

    Reference
is made to that certain Loan Agreement, dated as of December 30, 2010 (as
amended, restated, extended, supplemented or otherwise modified in writing from
time to time, the “Agreement;” the terms
defined therein being used herein as therein defined), among the undersigned,
the Guarantors from time to time party thereto, the lenders party thereto, the
LC Bank party thereto and Middlesex Savings Bank, as the Administrative Agent
for such lenders.

     

    The
undersigned Responsible Officer2 hereby certifies (on
behalf of the Borrower and not in such person’s individual capacity) as of the
date hereof that he/she is the ___________________________________ of the
Borrower, and that, as such, he/she is authorized to execute and deliver this
Certificate to the Administrative Agent on the behalf of the Borrower, and
that:

     

    [Use
following paragraph 1 for fiscal year-end financial statements]

     

    1.           The
Borrower has delivered the year-end audited financial statements required by
Section 7.01(a)
of the Agreement for the fiscal year of the Borrower ended as of the above date,
together with the report and opinion of an independent certified public
accountant required by such section.

     

    [Use
following paragraph 1 for fiscal quarter-end financial statements]

     

    1.           The
Borrower has delivered the unaudited financial statements required by Section 7.01(b) of
the Agreement for the fiscal quarter of the Borrower ended as of the above
date.  Such consolidated financial statements fairly present in all
material respects the financial condition and results of operations of the
Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject only to normal year-end and other audit
adjustments and the absence of footnotes.

     

    2.           The
undersigned has reviewed and is familiar with the terms of the Agreement and has
made, or has caused to be made under his/her supervision, a detailed review of
the transactions and condition (financial or otherwise) of the Borrower during
the accounting period covered by such financial statements.

      

      
        

    

    
      2           This
certificates should be from the chief executive officer, president, chief
financial officer or treasurer of the Borrower.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    3.           A
review of the activities of the Borrower during such fiscal period has been made
under the supervision of the undersigned with a view to determining whether
during such fiscal period the Borrower performed and observed all its Secured
Obligations under the Financing Documents, and

     

    [select
one:]

     

    [to the
best knowledge of the undersigned, during such fiscal period the Borrower
performed and observed each covenant and condition of the Financing Documents
applicable to it, and no Default has occurred and is continuing.]

     

    —or—

     

    [to the
best knowledge of the undersigned, the following covenants or conditions have
not been performed or observed and the following is a list of each such Default
and its nature and status:]

     

    4.           To
the best knowledge of the undersigned, the representations and warranties of the
Borrower contained in Article VI of the
Agreement and all representations and warranties of any Obligor that are
contained in any document furnished at any time under or in connection with the
Financing Documents, are true and correct in all material respects (provided,
that if any such representation warranty contains any materiality qualification
such as “in all material respects” or by referring to a “Material Adverse
Effect” or similar references, then such representation and warranty shall be
true and correct in all respects) on and as of the date hereof, except to the
extent that such representations and warranties specifically refer to an earlier
date, in which case they are true and correct as of such earlier date, and
except that for purposes of this Compliance Certificate, the representations and
warranties contained in the second sentence of Section 6.04(a) of
the Agreement shall be deemed to refer to the most recent statements furnished
pursuant to clauses (a) and (b) of Section 7.01 of the
Agreement, including the statements in connection with which this Compliance
Certificate is delivered.

     

    5.           The
financial covenant analyses and information set forth on Schedules 1 and 2 attached hereto are
true and accurate on and as of the date of this Certificate.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN WITNESS WHEREOF, the
undersigned has executed this Certificate as of                                ,                      .

     

    
      
        	 
      	
                SERACARE
      LIFE SCIENCES, INC.

              
	 
      	 
      	 
      	 
      
	 
      	 
      	
                By:

              	
                  

              
	 
      	 
      	
                Name: 

              	
                  

              
	 
      	 
      	
                Title:

              	
                  

              

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    For the
Fiscal Quarter/Year ended ___________________, ____ (“Statement
Date”)

    [Note:  All
financial covenant calculations to be conformed to final
definitions]

     

    SCHEDULE
1

    to the
Compliance Certificate

    ($ in
000’s)

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          
                                                                            
                                                                              
                                                                                
                                                                                  	
                                                                                          I.

                                                                                        	 	
                                                                                          Section
      8.14(a) – Consolidated Debt Service Coverage Ratio.

                                                                                        	 	 	 	 
	 
      	 	 	 	 	 	 
      	 	 	 	 
	 
      	 	
                                                                                          A.

                                                                                        	 	
                                                                                          Consolidated
      EBITDA for Measurement Period ending on above date (“Subject
      Period”):

                                                                                        	 	
                                                                                          $______

                                                                                        	 
	 
      	 	 	 	 	 	 
      	 	 	 	 
	 
      	 	 	 	
                                                                                          1.

                                                                                        	 	
                                                                                          Consolidated
      Net Income for Subject Period:

                                                                                        	 	
                                                                                          $______

                                                                                        	 
	 
      	 	 	 	 	 	 
      	 	 	 	 
	 
      	 	 	 	
                                                                                          2.

                                                                                        	 	
                                                                                          Consolidated
      Interest Expense for Subject Period:

                                                                                        	 	
                                                                                          $______

                                                                                        	 
	 
      	 	 	 	 	 	 
      	 	 	 	 
	 
      	 	 	 	
                                                                                          3.

                                                                                        	 	
                                                                                          Provision
      for income taxes for Subject Period:

                                                                                        	 	
                                                                                          $______

                                                                                        	 
	 
      	 	 	 	 	 	 
      	 	 	 	 
	 
      	 	 	 	
                                                                                          4.

                                                                                        	 	
                                                                                          Depreciation
      expenses for Subject Period:

                                                                                        	 	
                                                                                          $______

                                                                                        	 
	 
      	 	 	 	 	 	 
      	 	 	 	 
	 
      	 	 	 	
                                                                                          5.

                                                                                        	 	
                                                                                          Amortization
      expenses for Subject Period:

                                                                                        	 	
                                                                                          $______

                                                                                        	 
	 
      	 	 	 	 	 	 
      	 	 	 	 
	 
      	 	 	 	
                                                                                          6.

                                                                                        	 	
                                                                                          Non-cash
      adjustments arising from application of FASB Statement 142 (or its
      successor) and accounting principles relating to stock-based compensation
      expense

                                                                                        	 	
                                                                                          $______

                                                                                        	 
	 
      	 	 	 	 	 	 
      	 	 	 	 
	 
      	 	 	 	
                                                                                          7.

                                                                                        	 	
                                                                                          Extraordinary
      or non-recurring losses

                                                                                        	 	
                                                                                          $______

                                                                                        	 
	 
      	 	 	 	 	 	 
      	 	 	 	 
	 
      	 	 	 	
                                                                                          8.

                                                                                        	 	
                                                                                          Other
      non-cash items reducing Consolidated Net Income and consented to by the
      Administrative Agent in its reasonable discretion

                                                                                        	 	
                                                                                          $______

                                                                                        	 
	 
      	 	 	 	 	 	 
      	 	 	 	 
	 
      	 	 	 	
                                                                                          9.

                                                                                        	 	
                                                                                          Cost
      savings from permitted Acquisitions and consented to by the Administrative
      Agent in its reasonable discretion

                                                                                        	 	
                                                                                          $______

                                                                                        	 
	 
      	 	 	 	 	 	 
      	 	 	 	 
	 
      	 	 	 	
                                                                                          10.

                                                                                        	 	
                                                                                          Income
      Tax credits for Subject Period:

                                                                                        	 	
                                                                                          $______

                                                                                        	 
	 
      	 	 	 	 	 	 
      	 	 	 	 
	 
      	 	 	 	
                                                                                          11.

                                                                                        	 	
                                                                                          Non-cash
      increases to Consolidated Net Income for Subject Period:

                                                                                        	 	
                                                                                          $______

                                                                                        	 
	 
      	 	 	 	 	 	 
      	 	 	 	 
	 
      	 	 	 	
                                                                                          12.

                                                                                        	 	
                                                                                          Consolidated
      EBITDA (Lines II.A.1 + 2 + 3 + 4 + 5 + 6 + 7 + 8 +9 - 10 –
      11):

                                                                                        	 	
                                                                                          $______

                                                                                        	 
	 
      	 	 	 	 	 	 
      	 	 	 	 
	 
      	 	
                                                                                          B.

                                                                                        	 	
                                                                                          Cash
      Taxes for Subject Period:

                                                                                        	 	
                                                                                          $______

                                                                                        	 
	 
      	 	 	 	 	 	 
      	 	 	 	 
	 
      	 	
                                                                                          C.

                                                                                        	 	
                                                                                          Unfinanced
      Capital Expenditures for Subject Period:

                                                                                        	 	
                                                                                          $______

                                                                                        	 

                                                                                

                                                                              

                                                                            

                                                                          

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      
        
          
            	 
      	 	
                    D.

                  	 	
                    Dividends
      and distributions made in Subject Period:

                  	 	
                    $______

                  	 
	 
      	 	 	 	 
      	 	 	 
	 
      	 	
                    E.

                  	 	
                    The
      amount of Investments made in cash by (and not repaid in cash to) the
      Borrower to any third parties (other than the Borrower’s Wholly Owned
      Subsidiaries) in compliance with Section 8.07 in Subject
      Period:

                  	 	
                    $______

                  	 
	 
      	 	 	 	 
      	 	 	 
	 
      	 	
                    F.

                  	 	
                    Cash
      Consolidated Interest Expense for Subject Period:

                  	 	
                    $______

                  	 
	 
      	 	 	 	 
      	 	 	 
	 
      	 	
                    G.

                  	 	
                    Current
      maturity of long-term Indebtedness for Subject Period:

                  	 	
                    $______

                  	 
	 
      	 	 	 	 
      	 	 	 
	 
      	 	
                    H.

                  	 	
                    Consolidated
      Interest Coverage Ratio ([Line I.A.12 – Line I.B – Line I.C – Line I.D –
      Line I.E]  ̧
      [Line I.F + Line I.G]):

                  	 	
                    ____
      to 1

                  	 
	 
      	 	 	 	 
      	 	 	 
	 
      	 	 	 	
                    Minimum
      required:  1.35 to 1

                  	 	 	 
	 
      	 	 	 	 
      	 	 	 	 
	
                    II.

                  	 	
                    Section
      8.14(b) – Consolidated Senior Leverage Ratio.

                  	 
	 
      	 	 	 	 
      	 	 	 	 
	 
      	 	
                    A.

                  	 	
                    Aggregate
      outstanding principal amount of the Loans at Statement
Date

                  	 	
                    $______

                  	 
	 
      	 	 	 	 
      	 	 	 	 
	 
      	 	
                    B.

                  	 	
                    Aggregate
      LC Exposures at Statement Date

                  	 	
                    $______

                  	 
	 
      	 	 	 	 
      	 	 	 	 
	 
      	 	
                    C.

                  	 	
                    Consolidated
      EBITDA for Subject Period (Line I.A.12 above):

                  	 	
                    $______

                  	 
	 
      	 	 	 	 
      	 	 	 	 
	 
      	 	
                    D.

                  	 	
                    Consolidated
      Leverage Ratio ([Line II.A + Line II.B]  ̧ Line
      II.C):

                  	 	
                    ____
      to 1

                  	 
	 
      	 	 	 	 
      	 	 	 	 
	 
      	 	 	 	
                    Maximum
      permitted:  2.5 to 1

                  	 	 	 	 

          

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    For the
Fiscal Quarter/Year ended ___________________(“Statement
Date”)

     

    SCHEDULE
2

    to the
Compliance Certificate

    ($ in
000’s)

     

    Consolidated
EBITDA

    (in
accordance with the definition of Consolidated EBITDA

    as set
forth in the Agreement)

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              	
                                                                      Consolidated

                                                                      EBITDA

                                                                    	 	
                                                                      Quarter

                                                                      Ended

                                                                    	 	 	
                                                                      Quarter

                                                                      Ended

                                                                    	 	 	
                                                                      Quarter

                                                                      Ended

                                                                    	 	 	
                                                                      Quarter

                                                                      Ended

                                                                    	 	 	
                                                                      Twelve

                                                                      Months

                                                                      Ended

                                                                    	 
	
                                                                      Consolidated
      Net
      Income

                                                                    	 	 	 
       	 	 	 	 
       	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                      +
      Consolidated Interest Expense

                                                                    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                      +
      income taxes

                                                                    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                      +
      depreciation expense

                                                                    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                      +
      amortization expense

                                                                    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                      +
      non-cash adjustments arising by reason of the application of FASB
      Statement 142 (or its successor) (relating to changes in accounting for
      the amortization of good will and certain other intangibles) and
      accounting principles relating to stock based compensation
      expenses

                                                                    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                      +
      extraordinary or non-recurring losses

                                                                    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                      + with
      the Administrative Agent’s prior written consent (in its reasonable
      discretion), other expenses reducing such Consolidated Net Income which do
      not represent a cash item in such period or any future
    period

                                                                    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                      +
      with the Administrative Agent’s prior written consent (in its reasonable
      discretion), cost savings from Acquisitions made in compliance with
      Section 8.08

                                                                    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                      - 
      income tax credits

                                                                    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                      - 
      non-cash income

                                                                    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                      = Consolidated
      EBITDAEXHIBIT
10.2

       

      EXPLANATORY
NOTE TO THIS EXHIBIT

       

      The
Company’s representations and warranties included in this Security Agreement
were made to the secured party hereunder. These representations and warranties
were made as of specific dates, only for purposes of this Security Agreement and
for the benefit of the parties thereto. These representations and warranties
were subject to important exceptions and limitations agreed upon by the parties,
made for the purposes of allocating contractual risk between the parties rather
than establishing these matters as facts and were made subject to a contractual
standard of materiality that may be different from the standard generally
applicable under federal securities laws. This Security Agreement is filed with
this report only to provide investors with information regarding its terms and
conditions, and not to provide any other factual information regarding the
Company or its business. Moreover, information concerning the subject matter of
the representations and warranties may have changed, and may continue to change,
after the date of the Security Agreement, and such subsequent information may or
may not be fully reflected in the Company’s public reports. Accordingly,
investors should not rely on the representations and warranties contained in
this Security Agreement or any description thereof as characterizations of the
actual state of facts or condition of the Company or its affiliates. The
information in this Security Agreement should be considered together with the
Company’s public reports filed with the Securities and Exchange
Commission.

      
        
          
            
              
                	 
      
	 
      
	
                        [EXECUTION

                      
	
                        COUNTERPART]

                      
	 
      

              

            

          

        

      

       

      SECURITY
AGREEMENT
       

      among

      

      SERACARE
LIFE SCIENCES, INC.

      as
Borrower

      

      THE
GUARANTORS PARTY HERETO

      

      and

      

      MIDDLESEX
SAVINGS BANK

      as
Administrative Agent

      

      Dated as
of December 30, 2010

      

      
        
          
            
              
                
                  	 
      

                

              

            

          

        

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      TABLE OF
CONTENTS

       

      
        
          
            
              
                
                  
                    
                      	 
      	 
      	
                              Page

                            
	Article
      1             
      ARTICLE
      I DEFINITIONS AND INTERPRETATION	
                              1

                            
	 
      	 
      	 
      
	
                              SECTION
      1.1

                            	
                              Definitions

                            	
                              1

                            
	 
      	 
      	 
      
	
                              SECTION
      1.2

                            	
                              Interpretation

                            	
                              9

                            
	 
      	 
      	 
      
	
                              SECTION
      1.3

                            	
                              Resolution
      of Drafting Ambiguities

                            	
                              9

                            
	 
      	 
      	 
      
	
                              SECTION
      1.4

                            	
                              Perfection
      Certificates

                            	
                              9

                            
	 
      	 
      	 
      
	Article
      2             
      GRANT
      OF SECURITY AND FILINGS	
                              9

                            
	 
      	 
      	 
      
	
                              SECTION
      2.1

                            	
                              Grant
      of Security Interest

                            	
                              9

                            
	 
      	 
      	 
      
	
                              SECTION
      2.2

                            	
                              Filing
      Authorizations

                            	
                              10

                            
	 
      	 
      	 
      
	
                              Article
      3             
      REPRESENTATIONS
      AND COVENANTS OF THE GRANTORS; FURTHER ASSURANCES

                            	
                              11

                            
	 
      	 
      	 
      
	
                              SECTION
      3.1

                            	
                              Ownership

                            	
                              11

                            
	 
      	 
      	 
      
	
                              SECTION
      3.2

                            	
                              Chief
      Executive Office: Change of Name: Jurisdiction of
    Organization

                            	
                              11

                            
	 
      	 
      	 
      
	
                              SECTION
      3.3

                            	
                              Validity
      of Security Interest

                            	
                              12

                            
	 
      	 
      	 
      
	
                              SECTION
      3.4

                            	
                              Financing
      Statements and Other Filings: Maintenance of Perfected Security
      Interest

                            	
                              12

                            
	 
      	 
      	 
      
	
                              SECTION
      3.5

                            	
                              Pledged
      Securities; Due Authorization and Issuance

                            	
                              13

                            
	 
      	 
      	 
      
	
                              SECTION
      3.6

                            	
                              Deposit
      Accounts

                            	
                              13

                            
	 
      	 
      	 
      
	
                              SECTION
      3.7

                            	
                              Investment
      Property

                            	
                              14

                            
	 
      	 
      	 
      
	
                              SECTION
      3.8

                            	
                              Instruments
      and Tangible Chattel Paper

                            	
                              16

                            
	 
      	 
      	 
      
	
                              SECTION
      3.9

                            	
                              Electronic
      Chattel Paper and Transferable Records

                            	
                              16

                            
	 
      	 
      	 
      
	
                              SECTION
      3.10

                            	
                              Letter-of-Credit
      Rights

                            	
                              17

                            
	 
      	 
      	 
      
	
                              SECTION
      3.11

                            	
                              Commercial
      Tort Claims

                            	
                              17

                            
	 
      	 
      	 
      
	
                              SECTION 3.12

                            	
                              Intellectual
      Property

                            	
                              17

                            
	 
      	 
      	 
      
	
                              SECTION
      3.12

                            	
                              Collateral
      Access Agreements; Inventory

                            	
                              17

                            

                    

                  

                

              

            

          

        

         

        
          
            
            

          

          
            Page |
i

            
              

            

          

          
            
            

          

        

         

        
          
            
              
                
                  
                    
                      	
                              SECTION
      3.14

                            	
                              Motor
      Vehicles

                            	
                              18

                            
	 
      	 
      	 
      
	
                              SECTION
      3.15

                            	
                              Third-Party
      Agreements

                            	
                              18

                            
	 
      	 
      	 
      
	
                              SECTION
      3.16

                            	
                              Insurance

                            	
                              19

                            
	 
      	 
      	 
      
	
                              SECTION
      3.17

                            	
                              Contesting
      Liens; Claims

                            	
                              19

                            
	 
      	 
      	 
      
	
                              SECTION
      3.18

                            	
                              Joinder
      of Additional Grantors

                            	
                              19

                            
	 
      	 
      	 
      
	
                              SECTION
      3.19

                            	
                              Further
      Assurances

                            	
                              20

                            
	 
      	 
      	 
      
	Article
      4             
      CERTAIN
      PROVISIONS CONCERNING SECURITIES COLLATERAL	
                              20

                            
	 
      	 
      	 
      
	
                              SECTION
      4.1

                            	
                              Pledge
      of Additional Securities Collateral

                            	
                              20

                            
	 
      	 
      	 
      
	
                              SECTION
      4.2

                            	
                              Voting
      Rights; Distributions: etc

                            	
                              20

                            
	 
      	 
      	 
      
	
                              SECTION
      4.3

                            	
                              Defaults,
      etc

                            	
                              21

                            
	 
      	 
      	 
      
	
                              SECTION
      4.4

                            	
                              Certain
      Agreements of Grantors As Issuers and Holders of Equity
      Interests

                            	
                              21

                            
	 
      	 
      	 
      
	
                              Article
      5             
      CERTAIN
      PROVISIONS CONCERNING INTELLECTUAL PROPERTY COLLATERAL

                            	
                              22

                            
	 
      	 
      	 
      
	
                              SECTION
      5.1

                            	
                              Grant
      of License

                            	
                              22

                            
	 
      	 
      	 
      
	
                              SECTION
      5.2

                            	
                              Protection
      of Secured Party’s Security

                            	
                              22

                            
	 
      	 
      	 
      
	
                              SECTION
      5.3

                            	
                              After-Acquired
      Property

                            	
                              23

                            
	 
      	 
      	 
      
	
                              SECTION
      5.4

                            	
                              Litigation

                            	
                              23

                            
	 
      	 
      	 
      
	Article
      6             
      CERTAIN
      PROVISIONS CONCERNING ACCOUNTS	
                              24

                            
	 
      	 
      	 
      
	
                              SECTION
      6.1

                            	
                              Maintenance
      of Records

                            	
                              24

                            
	 
      	 
      	 
      
	
                              SECTION
      6.2

                            	
                              Legend

                            	
                              24

                            
	 
      	 
      	 
      
	
                              SECTION
      6.3

                            	
                              Modification
      of Terms, etc

                            	
                              24

                            
	 
      	 
      	 
      
	
                              SECTION
      6.4

                            	
                              Collection

                            	
                              24

                            
	 
      	 
      	 
      
	Article
      7             
      REMEDIES	
                              25

                            
	 
      	 
      	 
      
	
                              SECTION
      7.1

                            	
                              Remedies

                            	
                              25

                            

                    

                  

                

              

            

          

        

         

        
          
            
            

          

          
            Page |
ii

            
              

            

          

          
            
            

          

        

         

        
          
            
              
                	
                        SECTION
      7.2

                      	
                        Notice
      of Sale

                      	
                        27

                      
	 
      	 
      	 
      
	
                        SECTION
      7.3

                      	
                        Waivers

                      	
                        27

                      
	 
      	 
      	 
      
	
                        SECTION
      7.4

                      	
                        Certain
      Sales of Pledged Collateral

                      	
                        27

                      
	 
      	 
      	 
      
	
                        SECTION
      7.5

                      	
                        No
      Waiver; Cumulative Remedies

                      	
                        28

                      
	 
      	 
      	 
      
	
                        SECTION
      7.6

                      	
                        Intellectual
      Property

                      	
                        28

                      
	 
      	 
      	 
      
	
                        SECTION
      7.7

                      	
                        Application
      of Proceeds

                      	
                        29

                      
	 
      	 
      	 
      
	
                        SECTION
      7.8

                      	
                        Collateral
      Account

                      	
                        29

                      
	 
      	 
      	 
      
	Article
      8             
      MISCELLANEOUS	
                        29

                      
	 
      	 
      	 
      
	
                        SECTION
      8.1

                      	
                        Concerning
      Secured Party

                      	
                        29

                      
	 
      	 
      	 
      
	
                        SECTION
      8.2

                      	
                        Secured
      Party May Perform; Secured Party Appointed
Attorney-in-Fact

                      	
                        29

                      
	 
      	 
      	 
      
	
                        SECTION
      8.3

                      	
                        Continuing
      Security Interest; Assignment

                      	
                        30

                      
	 
      	 
      	 
      
	
                        SECTION
      8.4

                      	
                        Reinstatement;
      Termination

                      	
                        30

                      
	 
      	 
      	 
      
	
                        SECTION
      8.5

                      	
                        Amendments

                      	
                        31

                      
	 
      	 
      	 
      
	
                        SECTION
      8.6

                      	
                        Notices

                      	
                        31

                      
	 
      	 
      	 
      
	
                        SECTION
      8.7

                      	
                        Governing
      Law, Consent to Jurisdiction and Service of Process; WAIVER OF JURY
      TRIAL

                      	
                        31

                      
	 
      	 
      	 
      
	
                        SECTION
      8.8

                      	
                        Severability

                      	
                        32

                      
	 
      	 
      	 
      
	
                        SECTION
      8.9

                      	
                        Counterparts

                      	
                        32

                      
	 
      	 
      	 
      
	
                        SECTION
      8.10

                      	
                        Marshalling

                      	
                        32

                      
	 
      	 
      	 
      
	
                        SECTION
      8.11

                      	
                        No
      Credit for Payment of Taxes or Imposition

                      	
                        32

                      
	 
      	 
      	 
      
	
                        SECTION
      8.12

                      	
                        No
      Claims Against Secured Party

                      	
                        32

                      
	 
      	 
      	 
      
	
                        SECTION
      8.13

                      	
                        Grantors
      Remain Liable

                      	
                        33

                      
	 
      	 
      	 
      
	
                        SECTION
      8.14

                      	
                        Obligations
      Absolute

                      	
                        33

                      
	 
      	 
      	 
      
	
                        SECTION
      8.15

                      	
                        ENTIRE
      AGREEMENT

                      	
                        34

                      

              

            

          

        

      

      
         

        
          
            
            

          

          
            Page |
iii

            
              

            

          

          
            
            

          

        

      

       

      SCHEDULES

      

      
        
          
            
              	
                      Schedule
      3.2

                    	
                      Names;
      Incorporation; Chief Executive Offices, etc.

                    
	
                      Schedule
      3.3

                    	
                      Filing
      Actions

                    
	
                      Schedule
      3.5

                    	
                      Pledged
      Securities

                    
	
                      Schedule
      3.6

                    	
                      Deposit
      Accounts

                    
	
                      Schedule
      3.7(a)

                    	
                      Securities
      Accounts and Commodities Accounts

                    
	
                      Schedule
      3.8

                    	
                      Instruments
      and Tangible Chattel Paper

                    
	
                      Schedule
      3.9

                    	
                      Electronic
      Chattel Paper

                    
	
                      Schedule
      3.11

                    	
                      Commercial
      Tort Claims

                    
	
                      Schedule
      3.12

                    	
                      Intellectual
      Property

                    
	
                      Schedule
      3.15

                    	
                      Third-Party
      Agreements

                    

            

          

        

      

       

      EXHIBITS

      

      
        
          
            	
                    Exhibit
      A

                  	
                    Form
      of Copyright Security Agreement

                  
	
                    Exhibit
      B

                  	
                    Form
      of Patent Security Agreement

                  
	
                    Exhibit
      C

                  	
                    Form
      of Trademark Security Agreement

                  
	
                    Exhibit
      D

                  	
                    Form
      of Pledge Supplement

                  

          

        

      

       

      
        
           

        

        
          Page |
iv

          
            

          

        

        
           

        

      

      SECURITY
AGREEMENT

       

      SECURITY
AGREEMENT dated as of December 30, 2010 (as modified, supplemented and in effect
from time to time, the “Agreement”)
among SERACARE LIFE SCIENCES, INC., a Delaware corporation (the “Borrower”);
each of the Subsidiaries of the Borrowers listed under the caption “GUARANTORS”
on the signature pages hereto and each Subsidiary of any Borrower that becomes a
“Guarantor” after the date hereof pursuant to Section 3.18 hereof
(each, a “Guarantor”,
and collectively, the “Guarantors”,
and together with the Borrowers, the “Grantors,”
and each, a “Grantor”);
and MIDDLESEX SAVINGS BANK, as Administrative Agent (the “Administrative
Agent”), for the benefit of itself and the other Secured Parties (as such
term is defined in the Loan Agreement referred to below) (in such capacity, and
together with its successors in such capacity, the “Secured
Party”).

       

      RECITALS:

       

      A.           The
Borrower, Guarantors, Lenders, LC Bank and Administrative Agent are parties to a
Loan Agreement, dated as of the date hereof (as modified, supplemented and in
effect from time to time, the “Loan
Agreement”), providing, subject to the terms and conditions thereof, for
extensions of credit to be made by the Lenders to the
Borrower.  Capitalized terms used herein are defined as provided in
Section 1.1 hereof.

       

      B.           Each
Guarantor has, pursuant to the Loan Agreement, unconditionally guaranteed the
Secured Obligations.  The Grantors will receive substantial benefits
from the execution, delivery and performance of the obligations under the Loan
Agreement and the other Financing Documents and therefore, each Grantor is
willing to enter into this Agreement.

       

      D.           It
is a condition to the obligations of the Lenders to make Loans under the Loan
Agreement that each Grantor execute and deliver this Agreement in favor of the
Secured Party for the benefit of the Secured Parties.

       

      AGREEMENT:

       

      NOW
THEREFORE, to induce the Lender to enter into the Loan Agreement and to extend
credit thereunder, and in consideration of the foregoing premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each Grantor and the Secured Party hereby agree as
follows:

       

      ARTICLE
1

       

      ARTICLE I
DEFINITIONS AND INTERPRETATION

       

      SECTION
1.1         Definitions.  Terms
defined in the Loan Agreement are used herein as defined in the Loan
Agreement.  Unless otherwise defined herein or in the Loan Agreement,
capitalized terms used herein that are defined in the UCC shall have the
meanings assigned to them in the UCC.  The following terms shall have
the following meanings:

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      “Additional Pledged
Interests” means, collectively, with respect to each Grantor, (i) all
Equity Interests of whatever class of any issuer of Initial Pledged Interests or
any interest in any such issuer, together with all rights, privileges, authority
and powers of such Grantor relating to such Equity Interests in each such issuer
or under any Constitutive document of any such issuer, and the certificates,
instruments and agreements representing such Equity Interests and any and all
interest of such Grantor in the entries on the books of any financial
intermediary pertaining to such Equity Interests from time to time acquired by
such Grantor in any manner and (ii) all Equity Interests of each limited
liability company, partnership or other entity (other than a corporation)
hereafter acquired or formed by such Grantor (including all successor Equity
Interests thereto) and all options, warrants, rights, agreements, additional
Equity Interests of whatever class of such limited liability company,
partnership or other entity, together with all rights, privileges, authority and
powers of such Grantor relating to such Equity Interests or under any
constitutive document of any such issuer, and the certificates, instruments and
agreements representing such Equity Interests and any and all interest of such
Grantor in the entries on the books of any financial intermediary pertaining to
such Equity Interests, from time to time acquired by such Grantor in any
manner.

       

      “Additional Pledged
Shares” means, collectively, with respect to each Grantor, (i) all Equity
Interests of whatever class of any issuer of the Initial Pledged Shares or any
other Equity Interests in any such issuer, together with all rights, privileges,
authority and powers of such Grantor relating to such Equity Interests issued by
any such issuer under any constitutive document of any such issuer, and the
certificates, instruments and agreements representing such interests and any and
all interest of such Grantor in the entries on the books of any financial
intermediary pertaining to such interests, from time to time acquired by such
Grantor in any manner and (ii) all the issued and outstanding shares of capital
stock of each corporation hereafter acquired or formed by such Grantor
(including all successor Equity Interests thereto) and all options, warrants,
rights, agreements or additional shares of capital stock of whatever class of
such corporation, together with all rights, privileges, authority and powers of
such Grantor relating to such shares or under any constitutive document of such
corporation, and the certificates, instruments and agreements representing such
shares and any and all interest of such Grantor in the entries on the books of
any financial intermediary pertaining to such shares, from time to time acquired
by such Grantor in any manner.

       

      “Agreement” has the
meaning assigned to such term in the Preamble hereof.

       

      “Borrower” has the
meaning assigned to such term in the Preamble hereof.

       

      “CFC” means a Person
that is a controlled foreign corporation under Section 957 of the
Code.

       

      “Claims” means any and
all property and other taxes, assessments and special assessments, levies, fees
and all governmental charges imposed upon or assessed against, and landlords’,
carriers’, mechanics’, workmen’s, repairmen’s, laborers’, materialmen’s,
suppliers’, warehousemen’s and other similar Liens and other claims arising by
operation of law against, all or any portion of the Pledged
Collateral.

       

      
        
           

        

        
          Page |
2

          
            

          

        

        
           

        

      

      “Collateral Account”
has the meaning assigned to such term in Section
7.8.

       

      “Collateral Access
Agreement” means a landlord waiver, bailee letter, or acknowledgement
agreement of any lessor, warehouseman, processor, consignee, or other Person in
possession of, having a Lien upon, or having rights or interests in the
equipment, inventory or other Property of a Loan Party, in each case, in form
and substance reasonably satisfactory to the Secured Party.

       

      “Contested Liens”
means, collectively, any Liens incurred in respect of any Claims to the extent
that the amounts owing in respect thereof are not yet delinquent or are being
contested in accordance and otherwise comply with the Loan Agreement and Section 3.17; provided, that such
Liens shall in all respects be subject and subordinate in priority to the Lien
created by this Agreement, except if and to the extent that the law or
regulation creating, permitting or authorizing such Lien mandates that such Lien
must be superior to the Lien created and evidenced hereby.

       

      “Contracts” means,
collectively, with respect to each Grantor, all sale, service, performance,
equipment or property lease contracts, licenses, agreements and grants and all
other contracts, agreements or grants (in each case, whether written or oral, or
third party or intercompany), between such Grantor and third parties, and all
assignments, amendments, restatements, supplements, extensions, renewals,
replacements or modifications thereof.

       

      “Control” means (i) in
the case of each Deposit Account, “control,” as such term is defined in Section
9-104 of the UCC, and (ii) in the case of any Security Entitlement, “control,”
as such term is defined in Section 8-106 of the UCC and (iii) in the case of any
Commodity Contract, “control,” as such term is defined in Section 9-106 of the
UCC.

       

      “Copyrights” means,
collectively, all copyrights (whether statutory or common law, whether
established or registered in the United States or any other country or any
political subdivision thereof, whether registered or unregistered and whether
published or unpublished) and all copyright registrations and applications,
together with any and all (i) rights and privileges arising under applicable law
with respect to the use of such copyrights, (ii) renewals and extensions thereof
and reversionary interests and terminations rights with respect thereto, (iii)
income, fees, royalties, damages, claims and payments now or hereafter due
and/or payable with respect thereto, including damages and payments for past,
present or future infringements thereof, (iv) rights corresponding thereto
throughout the world and (v) rights to sue for past, present or future
infringements thereof and accountings with respect thereto.

       

      “Copyright Security
Agreement” means an agreement substantially in the form annexed hereto as
Exhibit
A.

       

      “Deposit Accounts”
means, collectively, with respect to each Grantor, (i) all “deposit accounts” as
such term is defined in the UCC and in any event shall include the Collateral
Account and all accounts and sub-accounts relating to any of the foregoing
accounts and (ii) all cash, funds, checks, notes and instruments from time to
time on deposit in any of the accounts or sub-accounts described in clause (i)
of this definition.

       

      
        
           

        

        
          Page |
3

          
            

          

        

        
           

        

      

      “Discharge of
Obligations” means satisfaction of each of the following:

       

      (a)          the
indefeasible payment in full in cash of all principal of and interest (including
interest accruing on or after the commencement of any bankruptcy or insolvency
proceeding, whether or not such interest would be allowed in such proceeding) on
all Loans outstanding;

       

      (b)
         the indefeasible payment
in full in cash of all other Secured Obligations (other than inchoate,
unasserted indemnity obligations that expressly survive termination of the
Financing Documents); and

       

      (c)          the
permanent termination or expiration of all Commitments.

       

      “Distributions” means,
collectively and with respect to each Grantor, all dividends, cash, options,
warrants, rights, instruments, distributions, returns of capital or principal,
income, interest, profits and other property, interests (debt or equity) or
proceeds, including as a result of a split, revision, reclassification or other
like change of the Pledged Securities, from time to time received, receivable or
otherwise distributed to such Grantor in respect of or in exchange for any or
all of the Pledged Securities or Intercompany Notes.

       

      “Excluded Property”
means:

       

      (a)          Any
lease, license, contract, property right or agreement to which any Grantor is a
party, or any license, consent, permit, variance, certification, authorization
or approval of any Governmental Authority (or any person acting on behalf of a
Governmental Authority) of which any Grantor is the owner or beneficiary, or any
of its rights or interest thereunder, if and for so long as the grant of such
security interest shall constitute or result in (i) the abandonment,
invalidation or unenforceability of any right, title or interest of any Grantor
therein or (ii) a breach or termination pursuant to the terms of, or a default
under, any such lease, license, contract, property right or agreement or such
license, consent, permit, variance, certification, authorization or approval
(other than to the extent that any such term would be rendered ineffective
pursuant to Sections 9-407, 9-408 or 9-409 of the UCC of any relevant
jurisdiction or any other applicable law or principles of equity);

       

      (b)          Equipment
owned by any Grantor on the date hereof or hereafter acquired that is subject to
a Lien securing a purchase money obligation or a Capital Lease Obligation
permitted to be incurred pursuant to Section 8.01(d) of the Loan Agreement if
the contract or other agreement in which such Lien is granted (or the
documentation providing for such purchase money obligation or Capital Lease
Obligation) validly prohibits the creation of any other Lien on such
Equipment;

       

      
        
           

        

        
          Page |
4

          
            

          

        

        
           

        

      

       

      (c)          Any
Investment Property or Pledged Securities consisting of Equity Interests in any
foreign Subsidiary that is a CFC; provided that this exception shall not apply
to (1) voting Equity Interests of any Subsidiary which is a first-tier CFC
representing up to 66-2/3% of the total voting power of all outstanding voting
Equity Interests of such Subsidiary and (2) any portion of the Equity Interests
not constituting voting Equity Interests of any such Subsidiary, except that any
such Equity Interests constituting “stock entitled to vote” within the meaning
of Treasury Regulation Section 1.956-2(c)(2) shall be treated as voting Equity
Interests for purposes of this clause (c);

       

      (d)          Solely
to the extent permitted under Section 8.02(j) of the Loan Agreement to secure
Indebtedness permitted under Section 8.01(h) of the Loan Agreement, cash and
Permitted Investments in an aggregate amount not exceeding $1,000,000 at any
time and the Deposit Account and/or Securities Account to which such cash and
Permitted Investments are credited, so long as such Deposit and/or Securities
Account do not have any Property on deposit therein or credited thereto in
excess of $1,000,000 in the aggregate at any time;

       

      (e)          Cash
security deposits, solely to the extent such deposits are permitted under
Section 8.02(f) of the Loan Agreement, up to but not exceeding $500,000 in the
aggregate at any time; and

       

      (f)          Intent-to-use
trademark applications;

       

      provided, that the
Property described in the foregoing clauses (a), (b) and (c) shall cease to
constitute Excluded Property immediately at such time as the condition causing
such abandonment, invalidation or unenforceability, or breach or termination,
shall be remedied and, to the extent severable, any portion of such lease,
license, contract, property right, agreement, Equipment, Investment Property or
Pledged Securities that does not result in any of the consequences specified in
clause (a), (b) or (c) shall not constitute Excluded Property including, without
limitation, any Proceeds of such lease, license, contract, property right,
agreement, Equipment, Investment Property or Pledged Securities; and provided, further, that any and
all Proceeds of any of the foregoing shall not constitute Excluded Property but
shall constitute Collateral.

       

      “General Intangibles”
means, collectively, with respect to each Grantor, all “general intangibles,” as
such term is defined in the UCC, of such Grantor and, in any event, shall
include (i) all of such Grantor’s rights, title and interest in, to and under
all insurance policies and Contracts, (ii) all know-how and warranties relating
to any Pledged Collateral or any other Collateral, (iii) any and all other
rights, claims, choses-in-action and causes of action of such Grantor against
any other person and the benefits of any and all collateral or other security
given by any other person in connection therewith, (iv) all guarantees,
endorsements and indemnifications on, or of, any Pledged Collateral or any other
Collateral, (v) all lists, books, records, correspondence, ledgers, printouts,
files (whether in printed form or stored electronically), tapes and other papers
or materials containing information relating to any Pledged Collateral or any
other Collateral, including all customer or tenant lists, identification of
suppliers, data, plans, blueprints, specifications, designs, drawings,
appraisals, recorded knowledge, surveys, studies, reports, manuals, standards,
catalogs, research data, computer and automatic machinery software and programs
and the like, accounting information pertaining to such Grantor’s operations or
any Pledged Collateral or any other Collateral and all media in which or on
which any of the information or knowledge or data or records may be recorded or
stored and all computer programs used for the compilation or printout of such
information, knowledge, records or data, (vi) all licenses, consents, permits,
variances, certifications, authorizations and approvals, however characterized,
of any Governmental Authority (or any person acting on behalf of a Governmental
Authority) now or hereafter acquired or held by such Grantor and (vii) all
rights to reserves, deferred payments, deposits, refunds, indemnification of
claims to the extent the foregoing relate to any Pledged Collateral or other
Collateral and claims for tax or other refunds against any Governmental
Authority relating to any Pledged Collateral or any other
Collateral.

       

      
        
           

        

        
          Page |
5

          
            

          

        

        
           

        

      

      “Goodwill” means,
collectively, with respect to each Grantor, the goodwill connected with such
Grantor’s business including all goodwill connected with the use of and
symbolized by (i) any Trademark or Trademark License in which such Grantor has
any interest and (ii) all lines of such Grantor’s business.

       

      “Grantor” has the
meaning assigned to such term in the Preamble hereof.

       

      “Guarantors” has the
meaning assigned to such term in the Preamble hereof.

       

      “Initial Pledged
Interests” means, with respect to each Grantor, all Equity Interests
(other than in a corporation), as applicable, of each issuer described in Schedule 3.5,
together with all rights, privileges, authority and powers of such Grantor
relating thereto in and to each such issuer or under any Constitutive document
of each such issuer, and the certificates, instruments and agreements
representing such Equity Interests and any and all interest of such Grantor in
the entries on the books of any financial intermediary pertaining to such Equity
Interests.

       

      “Initial Pledged
Shares” means, collectively, with respect to each Grantor, the issued and
outstanding shares of capital stock of each issuer described in Schedule 3.5 together
with all rights, privileges, authority and powers of such Grantor relating to
such interests in each such issuer or under any Constitutive document of each
such issuer, and the certificates, instruments and agreements representing such
shares of capital stock and any and all interest of such Grantor in the entries
on the books of any financial intermediary pertaining to the Initial Pledged
Shares.

       

      “Instruments” means,
collectively, with respect to each Grantor, all “instruments,” as such term is
defined in Article 9, rather than Article 3, of the UCC, and shall include all
promissory notes, drafts, bills of exchange or acceptances.

       

      “Intellectual
Property” means, collectively, all patents, patent applications, rights
and interests in patents, trademarks, trade names, service marks, names and
likenesses, copyrights and rights under copyright, technology, trade secrets,
proprietary information, confidential information, domain names, data, software,
know-how and processes, including, without limitation, all Patents, Trade
Secrets, Trademarks, Copyrights, Licenses and Goodwill.

      
        
           

        

        
          Page |
6

          
            

          

        

        
           

        

      

      “Intellectual Property
Collateral” means all Intellectual Property that constitutes Pledged
Collateral.

       

      “Intercompany Notes”
means, with respect to each Grantor, all intercompany notes owned or acquired by
such Grantor and all certificates, instruments or agreements evidencing such
intercompany notes, and all assignments, amendments, restatements, supplements,
extensions, renewals, replacements or modifications thereof.

       

      “Investment Property”
means a security, whether certificated or uncertificated, Security Entitlement,
Securities Account, Commodity Contract or Commodity Account.

       

      “IP Security Agreement
Supplement” means each supplement to a Copyright Security Agreement,
Patent Security Agreement or Trademark Security Agreement executed and delivered
by any Grantor in favor of the Secured Party, in form and substance reasonably
satisfactory to the Secured Party.

       

      “Lender” has the
meaning assigned to such term in the recitals hereto.

       

      “Licenses” means,
collectively, all license and distribution agreements with, and covenants not to
sue, any other party with respect to any Patent, Trade Secret, Trademark or
Copyright or any other patent, trade secret, trademark or copyright, whether a
Grantor is a licensor or licensee, distributor or distributee under any such
license or distribution agreement, together with any and all (i) renewals,
extensions, supplements and continuations thereof, (ii) income, fees, royalties,
damages, claims and payments now and hereafter due and/or payable thereunder and
with respect thereto including damages and payments for past, present or future
infringements or violations thereof, (iii) rights to sue for past, present and
future infringements or violations thereof and (iv) other rights to use, exploit
or practice any or all of the Patents, Trade Secrets, Trademarks or Copyrights
or any other patent, trade secret, trademark or copyright.

       

      “Loan Agreement” has
the meaning assigned to such term in the recitals hereto.

       

      “Patents” means,
collectively, all patents issued or assigned to and all patent applications and
registrations (whether established or registered or recorded in the United
States or any other country or any political subdivision thereof), together with
any and all (i) rights and privileges arising under applicable law with respect
to the use of any patents, (ii) inventions and improvements described and
claimed therein, (iii) reissues, divisions, continuations, renewals, extensions
and continuations-in-part thereof, (iv) income, fees, royalties, damages, claims
and payments now or hereafter due and/or payable thereunder and with respect
thereto including damages and payments for past, present or future infringements
thereof, (v) rights corresponding thereto throughout the world and (vi) rights
to sue for past, present or future infringements thereof

       

      “Patent Security
Agreement” means an agreement substantially in the form annexed hereto as
Exhibit B.

      
        
           

        

        
          Page |
7

          
            

          

        

        
           

        

      

      “Perfection
Certificate” means, with respect to any Grantor, that certain perfection
certificate dated the date hereof executed and delivered by such Grantor to
Secured Party, and each other Perfection Certificate (which shall be in form and
substance reasonably acceptable to the Secured Party) executed and delivered by
such Grantor to the Secured Party pursuant Section
3.18.

       

      “Permitted Collateral
Liens” means Liens permitted under Sections 8.02(a) through (k) of the
Loan Agreement.

       

      “Pledge Supplement”
has the meaning assigned to such term in Section
4.1.

       

      “Pledged Collateral”
has the meaning assigned to such term in Section
2.1.

       

      “Pledged Interests”
means, collectively, the Initial Pledged Interests and the Additional Pledged
Interests.

       

      “Pledged Securities”
means, collectively, the Pledged Interests and the Pledged Shares.

       

      “Pledged Shares”
means, collectively, the Initial Pledged Shares and the Additional Pledged
Shares.

       

      “Secured Party” has
the meaning assigned to such term in the Preamble hereof.

       

      “Securities
Collateral” means, collectively, the Pledged Securities, the Intercompany
Notes and the Distributions.

       

      “Trade Secrets” means,
collectively, with respect to each Grantor, all know-how, trade secrets,
customer and supplier lists, proprietary information, inventions, methods,
procedures, formulae, descriptions, compositions, technical data, drawings,
specifications, name plates, catalogs, confidential information and the right to
limit the use or disclosure thereof by any person, pricing and cost information,
business and marketing plans and proposals, consulting agreements, engineering
contracts and such other assets which relate to the goodwill connected with such
Grantor’s business.

       

      “Trademarks” means,
collectively, with respect to each Grantor, all trademarks (including service
marks), slogans, logos, certification marks, trade dress, uniform resource
locations (URL’s), domain names, corporate names and trade names, whether
registered or unregistered, owned by or assigned and all registrations and
applications for the foregoing (whether statutory or common law and whether
established or registered in the United States or any other country or any
political subdivision thereof), together with any and all (i) rights and
privileges arising under applicable law with respect to the use of any
trademarks, (ii) reinstatements, revivals, reissues, continuations, extensions
and renewals thereof and oppositions with respect thereto, (iii) income, fees,
royalties, damages and payments now and hereafter due and/or payable thereunder
and with respect thereto, including damages, claims and payments for past,
present or future infringements, misappropriation or dilution thereof, (iv)
rights corresponding thereto throughout the world and (v) rights to sue for
past, present and future infringements, misappropriation or dilution
thereof.

       

      
        
           

        

        
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      “Trademark Security
Agreement” means an agreement substantially in the form annexed hereto as
Exhibit
C.

       

      “Voting Stock” means,
with respect to any Person, any class of Equity Interests pursuant to which the
holders thereof have the general voting power under ordinary circumstances to
elect at least a majority of the board of directors (or equivalent governing
body) of such Person.

       

      SECTION
1.2         Interpretation.  The
rules of interpretation specified in the Loan Agreement (including Section 1.02 thereof)
shall be applicable to this Agreement.  All references in this
Agreement to “Grantors” shall mean the Grantors jointly and
severally.

       

      SECTION
1.3         Resolution of Drafting
Ambiguities.  Each Grantor acknowledges and agrees that it was
represented by counsel in connection with the execution and delivery hereof,
that it and its counsel reviewed and participated in the preparation and
negotiation hereof and that any rule of construction to the effect that
ambiguities are to be resolved against the drafting party (i.e., the Secured
Party) shall not be employed in the interpretation hereof.

       

      SECTION
1.4         Perfection
Certificates.  The Secured Party and each Secured Party agree
that the Perfection Certificates and all schedules, amendments and supplements
thereto are and shall at all times remain a part of this Agreement.

       

      ARTICLE
2

       

      GRANT OF
SECURITY AND FILINGS

       

      SECTION
2.1         Grant of Security
Interest.  As collateral security for the prompt payment and
performance in full when due (whether at stated maturity, by acceleration or
otherwise) of all the Secured Obligations, each Grantor hereby pledges and
grants to the Secured Party, for the benefit of the Secured Parties, a lien on
and security interest in all of such Grantor’s right, title and interest in, to
and under the following property, wherever located, whether now owned by such
Grantor or hereafter acquired and whether now existing or hereafter coming into
existence (collectively, the “Pledged
Collateral”):

       

      
        	
              	
                (i) 

              	
                all
      Accounts;

              

      

       

      
        	
              	
                (ii) 

              	
                all
      Equipment, Goods, Inventory and
Fixtures;

              

      

       

      
        	
              	
                (iii) 

              	
                all
      Documents, Instruments and Chattel
Paper;

              

      

       

      
        	
              	
                (iv) 

              	
                all
      Letters of Credit and Letter-of-Credit
Rights;

              

      

       

      
        	
              	
                (v) 

              	
                 all
      Securities Collateral;

              

      

       

      
        	
              	
                (vi) 

              	
                all
      Collateral Accounts;

              

      

       

      
        	
              	
                (vii)

              	
                all
      Investment Property;

              

      

       

      
        
           

        

        
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                (viii) 

              	
                all
      Intellectual Property;

              

      

       

      
        	
                 
      

              	
                (ix)

              	
                the
      Commercial Tort Claims described on Schedule 3.11
      hereto;

              

      

       

      
        	
              	
                (x) 

              	
                all
      General Intangibles;

              

      

       

      
        	
              	
                (xi) 

              	
                all
      Deposit Accounts;

              

      

       

      
        	
              	
                (xii) 

              	
                all
      Supporting Obligations;

              

      

       

      
        	
              	
                (xiii) 

              	
                all
      books and records relating to the Pledged Collateral;
  and

              

      

       

      
        	
                 
      

              	
                (xiv)

              	
                to
      the extent not covered by clauses (i) through (xiii) of this sentence, all
      other personal property of such Grantor, whether tangible or intangible,
      and all Proceeds and products of each of the foregoing and all accessions
      to, substitutions and replacements for, and rents, profits and products
      of, each of the foregoing, and any and all Proceeds of any insurance,
      indemnity, warranty or guaranty payable to such Grantor from time to time
      with respect to any of the
foregoing.

              

      

       

      Notwithstanding
anything to the contrary contained in clauses (i) through (xiv) above, the
security interest created by this Agreement shall not extend to, and the term
“Pledged Collateral” shall not include, any Excluded Property and (i) the
Grantors shall from time to time, at the reasonable request of the
Administrative Agent, give written notice to the Administrative Agent
identifying in reasonable detail the Excluded Property and shall provide to the
Administrative Agent such other information regarding the Excluded Property as
the Administrative Agent may reasonably request and (ii) from and after the
Closing Date, no Grantor shall permit to become effective in any document
creating, governing or providing for any contract, permit, lease or license, a
provision that would prohibit the creation of a Lien on such permit, lease or
license in favor of the Administrative Agent unless such Grantor believes, in
its reasonable judgment, that such prohibition is usual and customary in
transactions of such type.

      

      SECTION
2.2         Filing
Authorizations.

       

      (a)           Each
Grantor hereby irrevocably authorizes the Secured Party at any time to file in
any relevant jurisdiction any financing statements (including fixture filings)
and amendments thereto relating to the Pledged Collateral, including (i) any
financing or continuation statements or other documents without the signature of
such Grantor where permitted by law, (ii) financing statements describing the
Pledged Collateral as “all assets in which the Grantor now owns or hereafter
acquires rights” or similar descriptions and (iii) in the case of a financing
statement filed as a fixture filing, a sufficient description of the real
property to which such Pledged Collateral relates.

       

      (b)           Each
Grantor hereby ratifies its authorization for the Secured Party to file in any
relevant jurisdiction any initial financing statements or amendments thereto
relating to the Pledged Collateral if filed prior to the date
hereof.

      
        
           

        

        
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10

          
            

          

        

        
           

        

      

      (c)           Each
Grantor hereby further authorizes the Secured Party to file filings with the US
PTO or US Copyright Office (or any successor office or, if a Default has
occurred and is continuing, any similar office in any other country), including
this Agreement and any IP Security Agreement Supplements; or other documents for
the purpose of creating, perfecting, confirming, continuing, enforcing,
protecting or putting third parties on notice of the security interest granted
by such Grantor hereunder, without the signature of such Grantor, and naming
such Grantor, as debtor, and the Secured Party, as secured party.

       

      ARTICLE
3

       

      REPRESENTATIONS
AND COVENANTS OF THE GRANTORS; FURTHER ASSURANCES

       

      Each
Grantor represents, warrants and covenants to and with the Secured Party for the
benefit of the Secured Parties as follows:

       

      SECTION
3.1         Ownership.  Such
Grantor is and, as to Pledged Collateral acquired by it after the date hereof,
will be, the sole beneficial owner of, and has and will have good and marketable
title to, the Pledged Collateral in which it purports to grant a security
interest pursuant to Section 2.1, and no
Lien exists or will exist upon such Pledged Collateral at any time, except for
Liens in favor of the Secured Party and other Permitted Collateral
Liens.  No Person other than the Secured Party has control or
possession of all or any part of the Pledged Collateral, except as permitted by
the Loan Agreement or this Agreement.

       

      SECTION
3.2         Chief Executive Office:
Change of Name: Jurisdiction of Organization.

       

      (a)           Schedule 3.2 hereto
sets forth, as of the date hereof, (i) such Grantor’s exact legal name, (ii) its
state of incorporation or organization and (iii) the addresses of the chief
executive offices, principal places of business and any other place of business
of such Grantor and the locations of any Pledged Collateral (including Pledged
Collateral located at warehouses and the like) and of all records concerning
that portion of Pledged Collateral consisting of accounts receivable and other
general intangibles.  Except as set forth in Section 1(g) of the
Perfection Certificate, from May 17, 2007 to the date hereof, neither the
Borrower nor any of its predecessors-in-interest has conducted any business or
sold any goods under any name (including any fictitious business or trade name)
other than its legal name.

      
        
           

        

        
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      (b)           Until
termination of this Agreement: (i) such Grantor will not change the jurisdiction
of its incorporation or organization or move its chief executive office,
principal place of business or principal office at which is kept its books and
records (including computer printouts and programs) from the locations existing
on the date hereof and listed on Schedule 3.2 hereto;
(ii) such Grantor will not establish any offices or other places of business at
any other location, except in compliance with and to the extent permitted by
Articles VII and VIII of the Loan Agreement; (iii) such Grantor will not move
any of the tangible Pledged Collateral (other than Pledged Collateral in-transit
or out for repair) to any location other than those locations existing on the
date hereof and listed on Schedule 3.2 hereto
and other locations established in compliance with this paragraph (b), except in
compliance with and to the extent permitted by Articles VII and VIII of the Loan
Agreement; (iv) such Grantor will not change its name or do business under any
other fictitious business names or trade names; unless, in each case of clauses
(i), (ii), (iii) and (iv)  above, (x) such Grantor shall have given
the Secured Party at least thirty (30) days’ prior written notice of its
intention to do so, identifying the new location and providing such other
information as the Secured Party deems necessary or reasonably advisable, and
(y) such Grantor shall have delivered to the Secured Party such documentation
(including Collateral Access Agreements), in form and substance reasonably
satisfactory to the Secured Party and as required by the Secured Party, to
preserve the perfection and priority of Secured Party’s security interest in the
Pledged Collateral.

       

      SECTION
3.3         Validity of Security
Interest.  Such Grantor confirms that value has been given to
it by the Secured Party, and that it has rights in the Pledged
Collateral.  The security interest in and Lien on the Pledged
Collateral granted to the Secured Party hereunder constitutes and will
constitute (i) a legal and valid security interest in all the Pledged Collateral
securing the payment and performance of the Secured Obligations, and (ii)
subject to the filings and other actions described in Schedule 3.3 hereto,
a first-priority, perfected security interest in and Lien on the Pledged
Collateral, subject only to Permitted Collateral Liens.

       

      SECTION
3.4         Financing Statements and
Other Filings: Maintenance of Perfected Security Interest.

       

      (a)           All
filings in the United States under the UCC and in the USPTO and US Copyright
Office, and all other filings in the United States to the extent required under
the Financing Documents (and, to the extent required under Section 7.10(b) of
the Loan Agreement, outside the United States), necessary to perfect the
security interest granted by such Grantor to the Secured Party in respect of the
Pledged Collateral have been delivered to the Secured Party in completed and, to
the extent necessary or appropriate, duly executed form for filing in each
governmental or other office specified in Schedule 3.3
hereto.

       

      (b)           Without
the prior written consent of the Secured Party, no Grantor shall file or suffer
to be on file, or authorize or permit to be filed or to be on file, in any
jurisdiction, any financing statement or like instrument with respect to the
Pledged Collateral in which the Secured Party is not named as the sole secured
party for the benefit of the Secured Parties, except to the extent expressly
permitted under Section 8.02 of the Loan Agreement.

       

      (c)           At
the sole cost and expense of the Grantors, (i) such Grantor will maintain the
security interest created by this Agreement in the Pledged Collateral as a
perfected, first-priority security interest in favor of the Secured Party,
subject only to Permitted Collateral Liens, and (ii) such Grantor shall furnish
to the Secured Party from time to time statements and schedules further
identifying and describing the Pledged Collateral and such other reports in
connection with the Pledged Collateral as the Secured Party may reasonably
request, all in reasonable detail.

      
        
           

        

        
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      SECTION
3.5         Pledged Securities; Due
Authorization and Issuance.  All of the Initial Pledged Shares
have been, and to the extent any Pledged Shares are hereafter issued, such
Pledged Shares will be, duly authorized, validly issued and fully paid and
non-assessable.  All of the Initial Pledged Interests have been fully
paid for, and such Grantor does not owe any amount or other obligation to any
issuer of the Initial Pledged Interests in exchange for or in connection with
the issuance of the Initial Pledged Interests or such Grantor’s status as a
partner or a member of any issuer of the Initial Pledged Interests. All
Additional Pledged Interests when issued or acquired will be fully paid for, and
such Grantor will not owe any amount or other obligation to any issuer of such
Additional Pledged Interests in exchange for or in connection with the issuance
of such Additional Pledged Interests or such Grantor’s status as a partner or a
member of any issuer of such Additional Pledged Interests.

       

      SECTION
3.6        Deposit
Accounts.  Such Grantor does not maintain any Deposit Accounts
other than (a) as of the date hereof, the accounts listed in Schedule 3.6 and (b)
from and after the date hereof, accounts in compliance with this Section 3.6 and
Section 7.13 of the Loan Agreement and the Post-Closing
Agreement.  The Secured Party has a perfected, first-priority security
interest in each Deposit Account listed in Schedule 3.6 by
Control, other than those designated therein as “Not Subject to an Account
Control Agreement as of the Closing Date”.  The Grantors shall
maintain their primary Deposit Accounts with Middlesex, except to the extent
expressly permitted under Section 7.13 of the Loan Agreement and the
Post-Closing Agreement; provided that the
Borrower may maintain up to but not exceeding at any time $1,000,000 in the
aggregate on deposit in or credited to Deposit Accounts and Securities Accounts
that are not at Middlesex, so long as (except as provided in the following
further proviso) such non-Middlesex accounts are subject to an Account Control
Agreement; provided, further, that the
aggregate amount on deposit in or credited to Deposit Accounts that are not
subject to an Account Control Agreement shall not exceed (i) $50,000 for any single Deposit
Account at any time or (ii) $200,000 in the aggregate for all Deposit Accounts
at any time.  No Grantor shall hereafter establish or maintain any
Deposit Account except in compliance with the Loan Agreement and this Agreement
and unless the applicable Grantor shall have given the Secured Party at least
five Business Days’ (or such shorter period as the Administrative Agent may
approve in its sole discretion) prior written notice of its intention to
establish such new Deposit Account with a bank.  The Secured Party
agrees with each Grantor that the Secured Party shall not give any instructions
directing the disposition of funds from time to time credited to any Deposit
Account or withhold any withdrawal rights from such Grantor with respect to
funds from time to time credited to any Deposit Account unless an Event of
Default has occurred and is continuing.  No Grantor shall grant
Control of any Deposit Account to any Person other than the Secured Party,
except for control arising by operation of law to the account banks for
non-Middlesex Deposit Accounts and Securities Accounts of the Borrower
established and maintained in compliance with the third sentence of this
paragraph and for which Account Control Agreements are not required under such
third sentence and the sentence immediately preceding it.

       

      
        
           

        

        
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      SECTION
3.7         Investment
Property.

       

      (a)           Such
Grantor (1) has no Securities Accounts or Commodity Accounts as of the date
hereof other than those listed in Schedule 3.7(a)
hereto and the Secured Party has a perfected, first-priority security interest
in such Securities Accounts and Commodity Accounts by Control; (2) as of the
date hereof, does not hold, own or have any interest in any certificated
securities or uncertificated securities other than those constituting Pledged
Securities and those maintained in Securities Accounts or Commodity Accounts
listed in Schedule
3.7(a) hereto and (3) as of the date hereof, has entered into a duly
authorized, executed and delivered Account Control Agreement with respect to
each Securities Account or Commodity Account listed in Schedule 3.7(a)
hereto, as applicable.

       

      (b)           Such
Grantor shall not hereafter establish or maintain any Securities Account or
Commodity Account with any Securities Intermediary or Commodity Intermediary
unless (1) the applicable Grantor shall have given the Secured Party at least
five Business Days’ (or such shorter period as the Administrative Agent may
approve in its sole discretion) prior written notice of its intention to
establish such new Securities Account or Commodity Account, (2) the applicable
Grantor shall have offered the Secured Party a right of first refusal with
respect to such new Securities Account or Commodity Account, (3) such Securities
Intermediary or Commodity Intermediary shall be reasonably acceptable to the
Secured Party and (4) such Securities Intermediary or Commodity Intermediary, as
the case may be, and such Grantor shall have duly executed and delivered an
Account Control Agreement with respect to such Securities Account or Commodity
Account, as the case may be.  Such Grantor shall accept any cash and
Investment Property in trust for the benefit of the Secured Party and promptly
after actual receipt thereof, deposit any cash or such Investment Property and
any new securities, instruments, documents or other property by reason of
ownership of such Investment Property which constitute Pledged Collateral (other
than payments of a kind described in Section 6.4, and
except to the extent an Account Control Agreement is expressly not required
under Section
3.6) received by it into an account over which the Secured Party has
Control.  The Secured Party agrees with each Grantor that the Secured
Party shall not give any Entitlement Orders or instructions or directions to any
issuer of uncertificated securities, Securities Intermediary or Commodity
Intermediary unless an Event of Default has occurred and is
continuing.  No Grantor shall grant control over any Investment
Property to any Person other than the Secured Party.

      
        
           

        

        
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      (c)           All
certificates, agreements or instruments representing or evidencing the
Securities Collateral owned by such Grantor and in existence on the date hereof
have been delivered to the Secured Party in suitable form for transfer by
delivery or accompanied by duly executed instruments of transfer or assignment
in blank, and the Secured Party has a perfected, first-priority security
interest therein, subject to no other Liens.  If such Grantor shall at
any time hold or acquire any certificated securities constituting Investment
Property, such Grantor shall promptly (a) endorse, assign and deliver the same
to the Secured Party, accompanied by such instruments of transfer or assignment
duly executed in blank, all in form and substance reasonably satisfactory to the
Secured Party, or (b) deliver such securities into a Securities Account with
respect to which an Account Control Agreement is in effect in favor of the
Secured Party.  The Secured Party may, at any time upon the occurrence
and during the continuance of any Event of Default, endorse, assign or otherwise
transfer to or register in the name of the Secured Party or any of its nominees
or endorse for negotiation any or all of the Securities Collateral, without any
indication that such Securities Collateral is subject to the security interest
hereunder.  In addition, upon the occurrence and during the
continuance of an Event of Default, the Secured Party may at any time exchange
certificates representing or evidencing Securities Collateral for certificates
of smaller or larger denominations.

       

      (d)           The
Secured Party has a perfected, first-priority security interest in all
uncertificated Pledged Securities pledged by such Grantor hereunder that are in
existence on the date hereof, subject to no other Liens.  If any
securities (as defined in Article 8 of the UCC) now or hereafter acquired by
such Grantor constituting Investment Property are uncertificated and are issued
to such Grantor or its nominee directly by the issuer thereof, such Grantor
shall promptly notify the Secured Party thereof and pursuant to an agreement in
form and substance reasonably satisfactory to the Secured Party, either (i)
cause the issuer to agree to comply with instructions from the Secured Party as
to such securities, without further consent of any Grantor or such nominee, (ii)
cause a Security Entitlement with respect to such uncertificated security to be
held in a Securities Account with respect to which the Secured Party has
Control, (iii) arrange for the Secured Party to become the registered owner of
the securities or (iv) at the Secured Party’s request, cause such Pledged
Securities to become certificated and delivered to the Secured Party in
accordance with Section 3.7(c).

       

      (e)           As
between the Secured Party and the Grantors, the Grantors shall bear the
investment risk with respect to the Investment Property and Pledged Securities,
and the risk of loss of, damage to, or the destruction of the Investment
Property and Pledged Securities, whether in the possession of, or maintained as
a security entitlement or deposit by, or subject to the control of, the Secured
Party, a Securities Intermediary, Commodity Intermediary, any Grantor or any
other Person; provided, that
nothing contained in this paragraph shall release or relieve any Securities
Intermediary or Commodity Intermediary of its duties and obligations to the
Grantors or any other person under any Account Control Agreement or under
applicable law.  Each Grantor shall promptly pay all Claims and fees
with respect to the Investment Property and Pledged Securities pledged by it
under this Agreement.  In the event any Grantor shall fail to make
such payment contemplated in the immediately preceding sentence, the Secured
Party may do so for the account of such Grantor, and the Grantors shall promptly
reimburse and indemnify the Secured Party from all costs and expenses incurred
by the Secured Party under this paragraph in accordance with the Loan
Agreement.

      
        
           

        

        
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      SECTION
3.8        Instruments and Tangible
Chattel Paper.  (i) No amounts payable in excess of $100,000,
individually or in the aggregate, under or in connection with any of the Pledged
Collateral are evidenced by any Instrument or Tangible Chattel Paper, other than
such Instruments and Tangible Chattel Paper listed in Schedule 3.8 hereto
or which have been endorsed, assigned and delivered to the Secured Party
(accompanied by instruments of transfer or assignment duly executed in blank),
and (ii) each Instrument and each item of Tangible Chattel Paper listed in Schedule 3.8 hereto
has been properly endorsed, assigned and delivered to the Secured Party,
accompanied by instruments of transfer or assignment duly executed in
blank.  If any amount payable under or in connection with any of the
Pledged Collateral shall be evidenced by any Instrument or Tangible Chattel
Paper, and such amount, together with all amounts payable evidenced by any
Instrument or Tangible Chattel Paper not previously delivered to the Secured
Party, exceeds $100,000 in the aggregate for all
Grantors, the Grantor acquiring such Instrument or Tangible Chattel Paper shall
forthwith endorse, assign and deliver the same to the Secured Party, accompanied
by such instruments of transfer or assignment duly executed in blank as the
Secured Party may from time to time specify.

       

      SECTION
3.9         Electronic Chattel Paper and
Transferable Records.  No amount in excess of $100,000,
individually or in the aggregate, under or in connection with any of the Pledged
Collateral is evidenced by any Electronic Chattel Paper or any “transferable
record” (as that term is defined in Section 201 of the Federal Electronic
Signatures in Global and National Commerce Act, or in Section 16 of the Uniform
Electronic Transactions Act as in effect in any relevant jurisdiction), other
than such Electronic Chattel Paper and transferable records listed in Schedule 3.9 or as to
which the Grantors have complied with the following provisions of this Section
3.9.  If any amount payable under or in connection with any of the
Pledged Collateral shall be evidenced by any Electronic Chattel Paper or any
transferable record, the Grantor acquiring such Electronic Chattel Paper or
transferable record shall promptly notify the Secured Party thereof and shall
take such action as the Secured Party may reasonably request to vest in the
Secured Party control under UCC Section 9-105 of such Electronic Chattel Paper
or control under Section 201 of the Federal Electronic Signatures in Global and
National Commerce Act or, as the case may be, Section 16 of the Uniform
Electronic Transactions Act, as so in effect in such jurisdiction, of such
transferable record.  The requirement in the preceding sentence shall
apply to the extent that such amount, together with all amounts payable
evidenced by Electronic Chattel Paper or any transferable record in which the
Secured Party has not been vested control within the meaning of the statutes
described in this sentence exceeds $100,000 in the aggregate for all
Grantors.  The Secured Party agrees with such Grantor that the Secured
Party will arrange, pursuant to procedures satisfactory to the Secured Party and
so long as such procedures will not result in the Secured Party’s loss of
control, for the Grantor to make alterations to the Electronic Chattel Paper or
transferable record permitted under UCC Section 9-105 or, as the case may be,
Section 201 of the Federal Electronic Signatures in Global and National Commerce
Act or Section 16 of the Uniform Electronic Transactions Act for a party in
control to allow without loss of control, unless an Event of Default has
occurred and is continuing or would occur after taking into account any action
by such Grantor with respect to such Electronic Chattel Paper or transferable
record.

       

      
        
           

        

        
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      SECTION
3.10       Letter-of-Credit
Rights.  If such Grantor is at any time a beneficiary under a
letter of credit now or hereafter issued in favor of such Grantor, such Grantor
shall promptly notify the Secured Party thereof and such Grantor shall, at the
request of the Secured Party, pursuant to an agreement in form and substance
reasonably satisfactory to the Secured Party, either (i) arrange for the issuer
and any confirmer of such letter of credit to consent to an assignment to the
Secured Party of the proceeds of any drawing under the letter of credit or (ii)
arrange for the Secured Party to become the transferee beneficiary of such
letter of credit, with the Secured Party agreeing, in each case, that the
proceeds of any drawing under the letter of credit are to be applied as provided
in the Loan Agreement.  The actions in the preceding sentence shall be
taken to the extent that the amount under such letter of credit, together with
all amounts under letters of credit for which the actions described above in
clause (i) and (ii) have not been taken, exceeds $50,000 in the aggregate for
all Grantors.

       

      SECTION
3.11       Commercial Tort
Claims.  As of the date hereof, such Grantor hereby represents
and warrants that it holds no Commercial Tort Claims other than those listed in
Schedule
3.11.  If any Grantor shall at any time hold or acquire a
Commercial Tort Claim having a value, together with all other Commercial Tort
Claims of all Grantors in which the Secured Party does not have a security
interest, in excess of $50,000 in the aggregate, such Grantor shall immediately
notify the Secured Party in writing signed by such Grantor of the brief details
thereof and grant to the Secured Party in such writing a security interest
therein and in the Proceeds thereof, all upon the terms of this Agreement, with
such writing to be in form and substance reasonably satisfactory to the Secured
Party.

       

      SECTION
3.12       Intellectual
Property.  As of the Closing Date, annexed as Schedule 3.12 is a
complete list of all of such Grantor’s trade names, trade name rights, issued
patents and applications therefor, domain names, registered trademarks,
registered copyrights and applications therefor.  To the best
knowledge of such Grantor, there are no assertions or claims challenging the
validity of any of the Intellectual Property Collateral that could reasonably be
expected to have a Material Adverse Effect.  To the best knowledge of
such Grantor, the business of such Grantor as now conducted and proposed to be
conducted does not conflict with any issued patents, patent rights, licenses,
registered trademarks, trademark rights, trade names, trade name rights or
registered copyrights of others, and there is no infringement of any
Intellectual Property Collateral of such Grantor, in each case, which could
reasonably be expected to have a Material Adverse Effect.

       

      SECTION
3.13        Collateral Access
Agreements; Inventory .

       

      (a)           It
is the intention of the parties hereto that none of the Pledged Collateral shall
become fixtures and such Grantor shall take all reasonable action or actions as
may be necessary to prevent any of the Pledged Collateral from becoming
fixtures.  Each  Grantor shall use its best efforts not to
affix any of the Pledged Collateral to real property in any manner which would
change its nature from that of personal property to real property or to a
fixture.  If, notwithstanding the foregoing, any Pledged Collateral
shall become a fixture or real property, the Grantors shall take such actions as
the Administrative Agent may deem necessary or reasonably advisable to perfect
its security interest in such Pledged Collateral.

       

      
        
           

        

        
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      (b)           Such
Grantor will obtain a Collateral Access Agreement from all bailees and
landlords, as applicable, who from time to time have possession of tangible
Pledged Collateral in the ordinary course of such Grantor’s business, as the
Secured Party may reasonably request; provided that the
foregoing shall not be required if the value of the Pledged Collateral held by
such bailee or landlord is less than $250,000; provided, further, that the
aggregate value of the Pledged Collateral held by all such bailees and landlords
who have not delivered a Collateral Access Agreement is less than
$500,000.

       

      (c)           As
of the date hereof, such Grantor’s inventory with an aggregate value in excess
of $50,000 is not
maintained with any bailee that issues negotiable warehouse receipts or other
negotiable instruments therefor.  From and after the date hereof, such
Grantor will use its reasonable efforts to not maintain its inventory with an
aggregate value in excess of $50,000 with any bailee that
issues negotiable warehouse receipts or other negotiable instruments
therefor.  Such Grantor agrees that if, notwithstanding the foregoing,
any warehouse receipt or receipt in the nature of a warehouse receipt is issued
with respect to any of its inventory (or any other Pledged Collateral), such
receipt shall not be “negotiable” (as such term is used in the UCC or under
other relevant law).  If, notwithstanding the foregoing, any
negotiable warehouse receipts or other negotiable documents are issued with
respect to any of the inventory (or other Pledged Collateral) with an aggregate
value in excess of $100,000, all such instruments
shall be held for the benefit of the Secured Party and shall be immediately
endorsed to the order of the Secured Party and delivered by Grantor to the
Secured Party to be held by the Secured Party as Pledged Collateral
hereunder.  In addition, at the request of the Secured Party (and each
Grantor hereby acknowledges and agrees that such request shall be deemed to be
made in respect of any Grantor’s inventory with a value in excess of the dollar
thresholds for individual locations and locations in the aggregate specified in
clause (b) above), such Grantor will notify all warehousemen, bailees, agents,
processors and other similar Persons of the Lien created pursuant to the
Security Documents.

       

      SECTION
3.14       Motor
Vehicles.  At the request of the Secured Party, such Grantor
shall deliver to the Secured Party originals of the certificates of title or
ownership for the motor vehicles (and any other Equipment covered by
certificates of title or ownership) owned by it with the Secured Party listed as
lienholder therein.

       

      SECTION
3.15       Third-Party
Agreements.

       

      (a)           Except
as set forth on Schedule 3.15,
neither the granting of the Liens on the Pledged Collateral in favor of the
Secured Party hereunder nor the exercise of remedies in respect thereof will
constitute or result in the abandonment, invalidation or unenforceability of any
right, title or interest of any Grantor under, or constitute or result in a
default, breach or termination pursuant to the terms of, or otherwise permit the
termination of, any Material Contract or any other indenture, material agreement
or other material instrument or property right in respect of which such Grantor
has granted a Lien on the Pledged Collateral hereunder or that provides that the
collateral assignment of or granting of a Lien on any Material Contract or any
such other indenture, material agreement or other material instrument or
property right is prohibited or would be null and void without the consent of
the applicable counterparty thereto (other than to the extent that any such
limitation or restriction would be rendered ineffective pursuant to Sections
9-406, 9-407, 9-408 or 9-409 of the UCC).

      
        
           

        

        
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      (b)           Such
Grantor will, to the extent permitted by applicable law, and at the request of
the Secured Party, if an Event of Default shall have occurred and be continuing,
specifically assign to the Secured Party all federal government contracts and
will (upon request of the Secured Party) cooperate with the Secured Party in
giving notice of such assignment pursuant to the Federal Assignment of Claims
Act.  Such Grantor will cooperate with the Secured Party in providing
such further information with respect to contracts with any governmental
authority as the Secured Party may reasonably request and will provide such
instruments of further assurance with respect to such contracts as the Secured
Party may reasonably request.

       

      SECTION
3.16       Insurance.  In
the event that the proceeds of any insurance claim are paid after the Secured
Party has exercised its right to foreclose during the continuance of an Event of
Default, such Net Cash Proceeds shall be paid to the Secured Party to satisfy
any deficiency remaining after such foreclosure.

       

      SECTION
3.17       Contesting Liens;
Claims.  All Claims imposed upon or assessed against the
Pledged Collateral have been paid and discharged except to the extent such
Claims constitute a Lien which is a Permitted Collateral
Lien.  Notwithstanding the foregoing provisions of this Section 3.17, (i) no
contest of any such obligation may be pursued by such Grantor if such contest
would expose the Secured Party or any other Secured Party to (A) any possible
criminal liability or (B) any additional civil liability for failure to comply
with such obligations unless such Grantor shall have furnished a bond or other
security therefor satisfactory to the Secured Party or such Secured Party, and
(ii) if at any time payment or performance of any obligation contested by such
Grantor pursuant to this Section 3.17 shall
become necessary to prevent the imposition of remedies because of non-payment,
such Grantor shall pay or perform the same in sufficient time to prevent the
imposition of remedies in respect of such default or prospective
default.  Each Grantor shall, at its own cost and expense, defend
title to the Pledged Collateral pledged by it hereunder and defend the Lien
thereon granted to the Secured Party and the priority thereof against all claims
and demands of all Persons at any time claiming any interest therein adverse to
the Secured Party or any other Secured Party, other than Permitted Collateral
Liens (other than Contested Liens).

       

      SECTION
3.18       Joinder of Additional
Grantors.  The Grantors shall cause each Subsidiary of the
Borrower which, from time to time, after the date hereof shall be required to
pledge any property to the Secured Party pursuant to Section 7.10 of the Loan
Agreement, (a) to execute and deliver to the Secured Party (i) any applicable
supplements to the Security Documents and (ii) a Perfection Certificate, in each
case, within thirty (30) days of the date on which such Subsidiary was acquired
or created and (b) in the case of a Subsidiary organized outside of the United
States whose Equity Interests are to be pledged in accordance with Section 7.10
of the Loan Agreement, to execute and deliver such documentation as the Secured
Party may reasonably request (consistent with such Section
7.10).

      
        
           

        

        
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      SECTION
3.19       Further
Assurances.  Subject to the specific exceptions, thresholds and
time schedules expressly set forth in this Agreement, each Grantor shall take
such further actions, provide such information, and execute and deliver to the
Secured Party such additional documents as the Secured Party deems necessary or
reasonably advisable to perfect, preserve and protect its security interest in
the Pledged Collateral and the rights and interests granted to the Secured Party
hereunder, to fully effect the purposes hereof or permit the Secured Party to
exercise and enforce its rights, powers and remedies with respect to any Pledged
Collateral.  In the event that the Secured Party desires to exercise
any remedies, voting or consensual rights or attorney-in-fact powers set forth
in this Agreement and determines it necessary to obtain any approvals or
consents of any Governmental Authority or any other Person therefor, then, upon
the reasonable request of the Secured Party, such Grantor agrees to use its best
efforts to assist and aid the Secured Party to obtain as soon as practicable any
necessary approvals or consents for the exercise of any such remedies, rights
and powers.  If an Event of Default has occurred and is continuing,
the Secured Party may institute and maintain, in its own name or in the name of
any Grantor, such suits and proceedings as the Secured Party may be advised by
counsel are necessary or expedient to prevent any impairment of the security
interest in (or the perfection thereof) the Pledged Collateral.  All
of the foregoing shall be at the sole cost and expense of the
Grantors.

       

      ARTICLE
4

       

      CERTAIN
PROVISIONS CONCERNING SECURITIES COLLATERAL

       

      SECTION
4.1         Pledge of Additional
Securities Collateral.  Each Grantor shall, upon obtaining any
Pledged Securities or Intercompany Notes of any Person, accept the same in trust
for the benefit of the Secured Party and forthwith deliver to the Secured Party
a Pledge Supplement, duly executed by such Grantor, in substantially the form of
Exhibit D
hereto (each, a “Pledge Supplement”),
and the certificates and other documents required under Section 3.7 in
respect of the additional Pledged Securities or Intercompany Notes which are to
be pledged pursuant to this Agreement, and confirming the attachment of the Lien
hereby created on and in respect of such additional Pledged Securities or
Intercompany Notes.  Each Grantor hereby authorizes the Secured Party
to attach each Pledge Supplement to this Agreement and agrees that all Pledged
Securities or Intercompany Notes listed on any Pledge Supplement shall
constitute Pledged Collateral for all purposes of the Financing
Documents.

       

      SECTION
4.2         Voting Rights;
Distributions: etc.

       

      (a)           So
long as no Event of Default shall have occurred and be continuing, each Grantor
may exercise any and all voting and other consensual rights pertaining to the
Securities Collateral or any part thereof for any purpose not inconsistent with
the terms or purposes hereof, the Loan Agreement or any other Financing
Document; provided, that no
Grantor shall in any event exercise such rights in any manner that is
inconsistent with the terms of any Financing Document or which could reasonably
be expected to have a Material Adverse Effect.  Unless and until an
Event of Default has occurred and is continuing, the Grantors shall be entitled
to receive and retain any cash Distributions on the Pledged Securities in
accordance with applicable law.  For avoidance of doubt, any and all
Distributions on the Pledged Securities in the form of securities, and all
Distributions which are received or retained by any Grantor contrary to the
immediately preceding sentence, shall be forthwith delivered to the Secured
Party to hold as Pledged Collateral and shall, if received by any Grantor, be
received in trust for the benefit of the Secured Party, be segregated from the
other property or funds of such Grantor and be forthwith delivered to the
Secured Party as Pledged Collateral in the same form as so received (with any
necessary endorsement).

      
        
           

        

        
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      (b)           If
any Event of Default shall have occurred, then so long as such Event of Default
shall continue, and whether or not the Secured Party or any other Secured Party
exercises any available right to declare any Obligations due and payable or
seeks or pursues any other relief or remedy available to it under applicable law
or any Financing Document, (i) all rights of each Grantor to exercise the voting
and other consensual rights it would otherwise be entitled to exercise pursuant
to Section
4.2(a) shall cease, and all such rights shall thereupon become vested in
the Secured Party, which shall thereupon have the sole right to exercise such
voting and other consensual rights, (ii) all rights of each Grantor to receive
Distributions which it would otherwise be authorized to receive and retain
pursuant to the Loan Agreement shall cease, and all dividends and other
Distributions shall be paid directly to the Secured Party and retained by the
Secured Party in the Collateral Account as part of the Pledged Collateral, and
(iii) if the Secured Party shall so request in writing, the Grantors jointly and
severally agree to execute and deliver to the Secured Party appropriate
additional instruments, dividend, distribution and other orders and documents to
that end.

       

      SECTION
4.3         Defaults,
etc.  Each Grantor represents and warrants to the Secured Party
for the benefit of the Secured Parties that:  (i) such Grantor is not
in default in the payment of any portion of any mandatory capital contribution,
if any, required to be made under any agreement to which such Grantor is a party
relating to the Pledged Securities pledged by such Grantor, (ii) such Grantor is
not in violation of any other provisions of any such agreement to which such
Grantor is a party, or otherwise in default or violation thereunder, (iii) no
Securities Collateral pledged by such Grantor is subject to any defense, offset
or counterclaim, nor have any of the foregoing been asserted or alleged against
such Grantor by any Person with respect thereto, and (iv) as of the date hereof,
there are no certificates, instruments, documents or other writings (other than
the Constitutive documents and certificates, if any, delivered to the Secured
Party) which evidence any Pledged Securities of such Grantor.

       

      SECTION
4.4         Certain Agreements of
Grantors As Issuers and Holders of Equity Interests.  In the
case of each Grantor which is an issuer of Securities Collateral, such Grantor
agrees to be bound by the terms of this Agreement relating to the Securities
Collateral issued by it and will comply with such terms insofar as such terms
are applicable to it.  In the case of each Grantor which is a partner
in a partnership, limited liability company or other entity, such Grantor hereby
consents, to the extent required by the applicable Constitutive document, to the
pledge by each other Grantor, pursuant to the terms hereof, of the Pledged
Interests in such partnership, limited liability company or other entity and,
upon the occurrence and during the continuance of an Event of Default, to the
transfer of such Pledged Interests to the Secured Party or its nominee and to
the substitution of the Secured Party or its nominee as a substituted partner or
member in such partnership, limited liability company or other entity with all
the rights, powers and duties of a general partner or a limited partner or
member, as the case may be.

       

      
        
           

        

        
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      ARTICLE
5

       

      CERTAIN
PROVISIONS CONCERNING INTELLECTUAL

      PROPERTY
COLLATERAL

       

      SECTION
5.1         Grant of
License.  Each Grantor hereby grants to the Secured Party an
irrevocable, non-exclusive license (exercisable without payment of royalty or
other compensation to such Grantor) to use, assign, license or sublicense any
and all of the Intellectual Property Collateral now owned or licensed or
hereafter acquired or licensed by such Grantor, wherever the same may be
located, in each case, for the purpose of enabling the Secured Party, during the
continuance of an Event of Default, to exercise rights and remedies under Article 7 hereof at
such time as the Secured Party shall be lawfully entitled to exercise such
rights and remedies, and for no other purpose.  Such license shall
include access to all media in which any of the licensed items may be recorded
or stored and to all computer programs used for the compilation or printout
thereof.

       

      SECTION
5.2         Protection of Secured
Party’s Security.  On a continuing basis, each Grantor shall,
at such Grantor’s cost and expense, (i) promptly following its becoming aware
thereof, notify the Secured Party of (A) any materially adverse determination in
any proceeding in the United States Patent and Trademark Office or the United
States Copyright Office (or equivalent foreign office) with respect to any
material Intellectual Property Collateral or (B) the institution of any
proceeding or any materially adverse determination in any federal, state, local
or foreign court or administrative body regarding such Grantor’s claim of
ownership in or right to use any material Intellectual Property Collateral, its
right to register such Intellectual Property Collateral or its right to keep and
maintain such registration in full force and effect, (ii) maintain and protect
material Intellectual Property Collateral in compliance with the Loan Agreement,
(iii) not permit to lapse or become abandoned any material Intellectual Property
Collateral, and not settle or compromise any pending or future litigation or
administrative proceeding with respect to such Intellectual Property Collateral,
in each case except as determined by such Grantor in its commercially reasonable
business judgment, (iv) upon such Grantor obtaining knowledge thereof, promptly
notify the Secured Party in writing of any event in respect of any Intellectual
Property Collateral which could reasonably be expected to have a Material
Adverse Effect, (v) not license any material Intellectual Property Collateral
other than licenses entered into by such Grantor in, or incidental to, the
ordinary course of business, or amend or permit the amendment of any of the
licenses in a manner that could reasonably be expected to have a Material
Adverse Effect, (vi) diligently keep adequate records respecting the
Intellectual Property Collateral and (vii) furnish to the Secured Party from
time to time at the Secured Party’s request reasonably detailed statements and
amended schedules further identifying and describing the Intellectual Property
Collateral and such other materials evidencing or reports pertaining to the
Intellectual Property Collateral as the Secured Party may from time to time
reasonably request.

       

      
        
           

        

        
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      SECTION
5.3         After-Acquired
Property.  If any Grantor shall (i) obtain any rights to any
additional Intellectual Property or (ii) become entitled to the benefit of any
additional Intellectual Property or any renewal or extension thereof, including
any reissue, division, continuation, or continuation-in-part of any Intellectual
Property, or any improvement on any Intellectual Property, the provisions hereof
shall automatically apply thereto and any such item enumerated in clause (i) or
(ii) of this Section
5.3 with respect to such Grantor shall automatically constitute
Intellectual Property Collateral and be subject to the Lien and security
interest created by this Agreement without further action by any
party.  Each Grantor shall promptly (and in any event (A) by June 30
and December 31 of each year if no Event of Default has occurred and is
continuing and (B) more frequently as the Administrative Agent may request if an
Event of Default has occurred is continuing) provide to the Secured Party
written notice of any of the foregoing and confirm the attachment of the Lien
and security interest created by this Agreement to any rights described in
clauses (i) and (ii) of the immediately preceding sentence of this Section 5.3 by
delivering and filing such IP Security Agreement Supplements, instruments or
other documents as the Secured Party may request to preserve, protect or perfect
the Secured Party’s security interest in such Intellectual
Property.  Further, each Grantor authorizes the Secured Party to
modify this Agreement by amending Schedule 3.12 to
include any Intellectual Property of such Grantor acquired or arising after the
date hereof.

       

      SECTION
5.4         Litigation.  Each
Grantor may commence and prosecute in its own name, as the party in interest,
for its own benefit and at the sole cost and expense of the Grantors, such
applications for protection of the Intellectual Property Collateral and suits,
proceedings or other actions to prevent the infringement, misappropriation,
invalidation, abandonment, counterfeiting, unfair competition, dilution,
diminution in value or other damage as are necessary to preserve and protect the
Intellectual Property Collateral; provided, that if an Event of Default has
occurred and is continuing, and at the Administrative Agent’s request, such
Grantor may only take such actions with the Administrative Agent’s prior written
consent.  Upon the occurrence and during the continuance of any Event
of Default, the Secured Party may, but shall in no way be obligated to, file
applications for preservation and protection of the Intellectual Property
Collateral and/or bring suit in the name of any Grantor or any Secured Party to
enforce the Intellectual Property Collateral.  In the event of such
suit, each Grantor shall, at the reasonable request of the Secured Party, do any
and all lawful acts and execute any and all documents requested by the Secured
Party in aid of such enforcement and the Grantors shall promptly reimburse and
indemnify the Secured Party for all costs and expenses incurred by the Secured
Party in the exercise of its rights under this Section 5.4 in
accordance with the Loan Agreement.

      
        
           

        

        
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    ARTICLE
6

     

    CERTAIN
PROVISIONS CONCERNING ACCOUNTS

     

    SECTION
6.1    Maintenance of
Records.  Each Grantor shall keep and maintain at its own cost
and expense complete records of each Account, in a manner consistent with
prudent business practice, including records of all payments received, all
credits granted thereon, all merchandise returned and all other documentation
relating thereto.  Each Grantor shall, at such Grantor’s cost and
expense, upon the Secured Party’s demand made at any time after the occurrence
and during the continuance of any Critical Default, deliver all tangible
evidence of Accounts, including all documents evidencing Accounts and any books
and records relating thereto to the Secured Party or to its representatives
(copies of which evidence and books and records may be retained by such
Grantor).  Upon the occurrence and during the continuance of any Event
of Default, the Secured Party may transfer a full and complete copy of any
Grantor’s books, records, credit information, reports, memoranda and all other
writings relating to the Accounts to and for the use by any person that has
acquired or is contemplating acquisition of an interest in the Accounts or the
Secured Party’s security interest therein without the consent of any
Grantor.

     

    SECTION
6.2    Legend.  Each
Grantor shall legend, at the request of the Secured Party and in form and manner
reasonably satisfactory to the Secured Party, the Accounts and the other books,
records and documents of such Grantor evidencing or pertaining to the Accounts
with an appropriate reference to the fact that the Accounts have been
collaterally assigned to the Secured Party and that the Secured Party has a
security interest therein.

     

    SECTION
6.3    Modification of Terms,
etc.  No Grantor shall (i) rescind or cancel any obligations
evidenced by any Account, (ii) modify any term thereof or make any adjustment
with respect thereto, (iii) extend or renew any such obligations, (iv)
compromise or settle any dispute, claim, suit or legal proceeding relating
thereto or (v) sell any Account or interest therein, except, in each case, in
the ordinary course of business consistent with prudent business
practice.

     

    SECTION
6.4    Collection.  Each
Grantor shall cause to be collected from the account debtor of each of the
Accounts, as and when due in the ordinary course of business and consistent with
prudent business practice, any and all amounts owing under or on account of such
Account, and apply forthwith upon receipt thereof all such amounts as are so
collected to the outstanding balance of such Account, except that any Grantor
may, with respect to an Account, allow in the ordinary course of business (i) a
refund or credit due as a result of returned or damaged or defective merchandise
and (ii) such extensions of time to pay amounts due in respect of Accounts and
such other modifications of payment terms or settlements in respect of Accounts
as are commercially reasonable in the circumstances, all in accordance with such
Grantor’s ordinary course of business consistent with its collection practices
as in effect from time to time.  The costs and expenses (including
attorneys’ fees) of collection, in any case, whether incurred by any Grantor or
any Secured Party, shall be paid by the Grantors.

     

    
      
         

      

      
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    SECTION
6.5    Eligible
Accounts.  Borrower represents and warrants to the Secured
Party for the benefit of the Secured Parties that (i) each Account listed on a
Borrowing Base Certificate is an Eligible Account Receivable and (ii) the
Eligible Accounts are bona fide, existing obligations of the Account
Debtors.

     

    ARTICLE
7

     

    REMEDIES

     

    SECTION
7.1    Remedies.  Upon
the occurrence and during the continuance of any Event of Default the Secured
Party may (but shall not be obligated to) from time to time exercise in respect
of the Pledged Collateral, in addition to the other rights and remedies provided
for herein or otherwise available to it, the following remedies, in accordance
with applicable law:

     

    (a)           personally,
or by agents or attorneys, immediately take possession of the Pledged Collateral
or any part thereof, from any Grantor or any other person who then has
possession of any part thereof with or without notice or process of law, and for
that purpose may enter upon any Grantor’s premises where any of the Pledged
Collateral is located, remove such Pledged Collateral, remain present at such
premises to receive copies of all communications and remittances relating to the
Pledged Collateral and use in connection with such removal and possession any
and all services, supplies, aids and other facilities of any
Grantor;

     

    (b)           demand,
sue for, collect or receive any money or property at any time payable or
receivable in respect of the Pledged Collateral, including instructing the
account debtors or obligors on any Account, agreement, instrument or other
obligation constituting part of the Pledged Collateral to make any payment
required by the terms of such Account, agreement, instrument or other obligation
directly to the Secured Party, and in connection with any of the foregoing,
compromise, settle, extend the time for payment and make other modifications
with respect thereto; provided, that if any
such payments are made directly to any Grantor, prior to receipt by any such
account debtor or obligor of such instruction, such Grantor shall segregate all
amounts received pursuant thereto in trust for the benefit of the Secured Party
and shall promptly (but in no event later than one (1) Business Day after
receipt thereof) pay such amounts to the Secured Party;

     

    (c)           sell,
assign, grant a license to use or otherwise liquidate, or direct any Grantor to
sell, assign, grant a license to use or otherwise liquidate, any and all
investments made in whole or in part with the Pledged Collateral or any part
thereof, and take possession of the proceeds of any such sale, assignment,
license or liquidation;
 

    
      
         

      

      
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    (d)           take
possession of the Pledged Collateral or any part thereof, by directing any
Grantor in writing to deliver the same to the Secured Party at any place or
places so designated by the Secured Party, in which event such Grantor shall at
its own expense: (i) forthwith cause the same to be moved to the place or places
designated by the Secured Party and therewith delivered to the Secured Party,
(ii) store and keep any Pledged Collateral so delivered to the Secured Party at
such place or places pending further action by the Secured Party and (iii) while
the Pledged Collateral shall be so stored and kept, provide such security and
maintenance services as shall be necessary to protect the same and to preserve
and maintain them in good condition.  Each Grantor’s obligation to
deliver the Pledged Collateral as contemplated in this Section 7.1(d) is of
the essence hereof.  Upon application to a court of equity having
jurisdiction, the Secured Party shall be entitled to a decree requiring specific
performance by any Grantor of such obligation;

     

    (e)           withdraw
all moneys, instruments, securities and other property in any bank, financial
securities, deposit or other account of any Grantor constituting Pledged
Collateral for application to the Obligations as provided in Section 7.7
hereof;

     

    (f)        
   retain and apply the Distributions to the Obligations as
provided in Section
7.7 hereof;

     

    (g)           exercise
any and all rights as beneficial and legal owner of the Pledged Collateral,
including perfecting assignment of and exercising any and all voting, consensual
and other rights and powers with respect to any Pledged Collateral;
and

     

    (h)           exercise
any and all rights and remedies of a secured party under the UCC and under all
applicable laws, and the Secured Party may also in its sole discretion, without
notice except as specified in Section 7.2 hereof,
sell, assign or grant a license to use the Pledged Collateral or any part
thereof in one or more parcels at public or private sale, at any exchange,
broker’s board or at any of the Secured Party’s offices or elsewhere, for cash,
on credit or for future delivery, and at such price or prices and upon such
other terms as the Secured Party may deem commercially
reasonable.  The Secured Party or any other Secured Party or any of
their respective Affiliates may be the purchaser, licensee, assignee or
recipient of any or all of the Pledged Collateral at any such sale and shall be
entitled, for the purpose of bidding and making settlement or payment of the
purchase price for all or any portion of the Pledged Collateral sold, assigned
or licensed at such sale, to use and apply any of the Obligations owed to such
person as a credit on account of the purchase price of any Pledged Collateral
payable by such person at such sale.  Each purchaser, assignee,
licensee or recipient at any such sale shall acquire the property sold, assigned
or licensed absolutely free from any claim or right on the part of any Grantor,
and each Grantor hereby waives, to the fullest extent permitted by law, all
rights of redemption, stay and/or appraisal which it now has or may at any time
in the future have under any rule of law or statute now existing or hereafter
enacted.  The Secured Party shall not be obligated to make any sale of
Pledged Collateral regardless of notice of sale having been
given.  The Secured Party may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was so
adjourned.  Each Grantor hereby waives any claims against the Secured
Party arising by reason of the fact that the price at which any Pledged
Collateral may have been sold, assigned or licensed at such a private sale was
less than the price which might have been obtained at a public sale, even if the
Secured Party accepts the first offer received and does not offer such Pledged
Collateral to more than one offeree.
 

    
      
         

      

      
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    SECTION
7.2    Notice of
Sale.  Each Grantor acknowledges and agrees that, to the extent
notice of sale or other disposition of Pledged Collateral shall be required by
law, ten (10) days’ prior notice to such Grantor of the time and place of any
public sale or of the time after which any private sale or other intended
disposition is to take place shall be commercially reasonable notification of
such matters.  No notification need be given to any Grantor if it has
signed, in accordance with applicable law, after the occurrence of an Event of
Default, a statement renouncing or modifying any right to notification of sale
or other intended disposition.

     

    SECTION
7.3    Waivers.  Each
Grantor hereby waives, to the fullest extent permitted by applicable law, notice
or judicial hearing in connection with the Secured Party’s taking possession or
the Secured Party’s disposition of any of the Pledged Collateral, including any
and all prior notice and hearing for any prejudgment remedy or remedies and any
such right which such Grantor would otherwise have under law, and each Grantor
hereby further waives, to the fullest extent permitted by applicable law: (i)
all damages occasioned by such taking of possession, (ii) all other requirements
as to the time, place and terms of sale or other requirements with respect to
the enforcement of the Secured Party’s rights hereunder and (iii) all rights of
redemption, appraisal, valuation, stay, extension or moratorium now or hereafter
in force under any applicable law.  Any sale of, or the grant of
options to purchase, or any other realization upon, any Pledged Collateral shall
operate to divest all right, title, interest, claim and demand, either at law or
in equity, of the applicable Grantor therein and thereto, and shall be a
perpetual bar both at law and in equity against such Grantor and against any and
all persons claiming or attempting to claim the Pledged Collateral so sold,
optioned or realized upon, or any part thereof, from, through or under such
Grantor.

     

    SECTION
7.4    Certain Sales of Pledged
Collateral.

     

    (a)           Each
Grantor recognizes that, by reason of certain prohibitions contained in law,
rules, regulations or orders of any Governmental Authority, the Secured Party
maybe compelled, with respect to any sale of all or any part of the Pledged
Collateral, to limit purchasers to those who meet the requirements of such
Governmental Authority.  Each Grantor acknowledges that any such sales
may be at prices and on terms less favorable to the Secured Party than those
obtainable through a public sale without such restrictions, and, notwithstanding
such circumstances, agrees that any such restricted sale shall be deemed to have
been made in a commercially reasonable manner and that, except as may be
required by applicable law, the Secured Party shall have no obligation to engage
in public sales in respect of such Pledged Collateral.

     

    (b)           Each
Grantor recognizes that, by reason of certain prohibitions contained in the
Securities Act of 1933, as amended (the “Securities Act”), and
applicable state securities laws, the Secured Party may be compelled, with
respect to any sale of all or any part of the Securities Collateral and
Investment Property, to limit purchasers to persons who will agree, among other
things, to acquire such Securities Collateral or Investment Property for their
own account, for investment and not with a view to the distribution or resale
thereof.  Each Grantor acknowledges that any such private sales may be
at prices and on terms less favorable to the Secured Party than those obtainable
through a public sale without such restrictions (including a public offering
made pursuant to a registration statement under the Securities Act) and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner and that the
Secured Party shall have no obligation to engage in public sales and no
obligation to delay the sale of any Pledged Collateral for the period of time
necessary to permit the issuer thereof to register it for public
sale.

     

    
      
         

      

      
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    (c)           If
the Secured Party determines to exercise its right to sell any or all of the
Securities Collateral or Investment Property, upon written request, the
applicable Grantor shall from time to time furnish to the Secured Party all such
information as the Secured Party may reasonably request in order to determine
the number of securities included in the Securities Collateral or Investment
Property which may be sold by the Secured Party as exempt transactions under the
Securities Act and the rules of the SEC thereunder.

     

    (d)           Each
Grantor further agrees that a breach of any of the covenants contained in this
Section 7.4
will cause irreparable injury to the Secured Parties, that the Secured Parties
have no adequate remedy at law in respect of such breach and, as a consequence,
that each and every covenant contained in this Section 7.4 shall be
specifically enforceable against such Grantor, and such Grantor hereby waives
and agrees not to assert any defenses against an action for specific performance
of such covenants except for a defense that no Event of Default has occurred and
is continuing.

     

    SECTION
7.5    No Waiver; Cumulative
Remedies.

     

    (a)           No
failure on the part of the Secured Party to exercise, no course of dealing with
respect to, and no delay on the part of the Secured Party in exercising, any
right, power or remedy hereunder shall operate as a waiver thereof; nor shall
any single or partial exercise of any such right, power or remedy hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy; nor shall the Secured Party be required to look first
to, enforce or exhaust any other security, collateral or
guaranties.  The remedies herein provided are cumulative and are not
exclusive, of any remedies provided by law.

     

    (b)           In
the event that the Secured Party shall have instituted any proceeding to enforce
any right, power or remedy under this Agreement by foreclosure, sale, entry or
otherwise, and such proceeding shall have been discontinued or abandoned for any
reason or shall have been determined adversely to the Secured Party, then and in
every such case, the Grantors, each Secured Party shall be restored to their
respective former positions and rights hereunder with respect to the Pledged
Collateral, and all rights, remedies and powers of the Secured Parties shall
continue as if no such proceeding had been instituted.

     

    SECTION
7.6    Intellectual
Property.  If any Event of Default shall have occurred and be
continuing, upon the written demand of the Secured Party, each Grantor shall
execute and deliver to the Secured Party an assignment or further license of the
Intellectual Property Collateral, in whole or in part as the Secured Party
determines, and such other documents as are necessary or appropriate to carry
out the intent and purposes hereof.

     

    
      
         

      

      
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    SECTION
7.7    Application of
Proceeds.  The proceeds received by the Secured Party in
respect of any sale of, collection from or other realization upon all or any
part of the Collateral pursuant to the exercise by the Secured Party of its
remedies shall be applied, together with any other sums then held by the Secured
Party pursuant to this Agreement, in accordance with Section 9.02 of the Loan
Agreement.  In the event that the proceeds of any sale, collection or
other realization of the Pledged Collateral are insufficient to effect the
Discharge of Obligations, the Grantors shall remain jointly and severally liable
for any deficiency.

     

    SECTION
7.8    Collateral
Account.  The Secured Party may in its discretion cause to be
established at a banking institution to be selected by the Secured Party a cash
collateral account (the “Collateral Account”)
in the name and under the sole dominion and Control of the Secured Party, into
which there shall be deposited from time to time the cash proceeds of any
Pledged Collateral and other Collateral (including insurance proceeds) required
to be delivered to the Secured Party pursuant to the Financing
Documents.  The balance from time to time in any such Collateral
Account shall constitute part of the Pledged Collateral hereunder and shall not
constitute payment of the Secured Obligations until applied as specified in the
Loan Agreement.

     

    ARTICLE
8

     

    MISCELLANEOUS

     

    SECTION
8.1    Concerning Secured
Party.  The Secured Party shall be deemed to have exercised
reasonable care in the custody and preservation of the Pledged Collateral in its
possession if such Pledged Collateral is accorded treatment substantially
equivalent to that which the Secured Party, in its individual capacity, accords
its own property consisting of similar instruments or interests, it being
understood that none of the Secured Parties shall have responsibility for (i)
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relating to any Securities Collateral or
(ii) taking any necessary steps to preserve rights against any person with
respect to any Pledged Collateral.

     

    SECTION
8.2    Secured Party May Perform;
Secured Party Appointed Attorney-in-Fact.

     

    (a)           If
any Grantor shall fail to perform any covenants contained in this Agreement
(including such Grantor’s covenants to (i) pay the premiums in respect of all
required insurance policies hereunder, (ii) pay Claims, (iii) make repairs, (iv)
discharge Liens or (v) pay or perform any obligations of such Grantor under any
Pledged Collateral) or if any representation or warranty on the part of any
Grantor contained herein shall be breached, the Secured Party may (but shall not
be obligated to) do the same or cause it to be done or remedy any such breach,
and may expend funds for such purpose; provided, that the
Secured Party shall in no event be bound to inquire into the validity of any
tax, lien, imposition or other obligation which such Grantor fails to pay or
perform as and when required hereby and which such Grantor does not contest in
accordance with Section
3.17.  Any and all amounts so expended by the Secured Party
shall be paid by the Grantors in accordance with Section 11.03 of the
Loan Agreement.  Neither this Section 8.2 nor any
action taken by the Secured Party pursuant to this Section 8.2 shall
prevent any such failure to observe any covenant contained in this Agreement nor
any breach of any representation or warranty from constituting a
Default.

     

    
      
         

      

      
        Page |
29

        
          

        

      

      
         

      

    

     

    (b)           Each
Grantor hereby irrevocably appoints the Secured Party and any officer or agent
thereof, with full power of substitution, as its true and lawful
attorneys-in-fact, with full authority in the place and stead of such Grantor
and in the name of such Grantor, or otherwise, from time to time in the Secured
Party’s discretion to take any action and to execute any instrument consistent
with the terms of the Loan Agreement, this Agreement and the other Financing
Documents which the Secured Party may deem necessary or advisable to accomplish
the purposes hereof, and, without limiting the generality of the foregoing,
hereby gives said attorney the power and right, on behalf of such Grantor,
without notice to or assent by such Grantor, (i) upon the occurrence and
continuance of an Event of Default, to endorse the names of such Grantor on any
checks, notes, drafts or other forms of payment or security that may come into
the possession of the Secured Party or any Affiliate of the Secured Party, to
sign such Grantor’s name on invoices or bills-of-lading, drafts against
customers, notices of assignment, verifications and schedules, and (ii) upon the
occurrence and continuance of an Event of Default, to sell, transfer, pledge,
make any arrangement with respect to or otherwise dispose of or deal with any of
the Pledged Collateral in accordance with the UCC.  The foregoing
grant of authority is a power of attorney coupled with an interest and such
appointment shall be irrevocable for the term hereof.  Each Grantor
hereby ratifies all that such attorney shall lawfully do or cause to be done by
virtue hereof.

     

    SECTION
8.3    Continuing Security
Interest; Assignment.  This Agreement shall create a continuing
security interest in the Pledged Collateral and shall (i) be binding upon the
Grantors, their respective successors and assigns and (ii) inure, together with
the rights and remedies of the Secured Party hereunder, to the benefit of the
Secured Party and the other Secured Parties and each of their respective
successors, transferees and assigns.  No other persons (including any
other creditor of any Grantor) shall have any interest herein or any right or
benefit with respect hereto.

     

    SECTION
8.4    Reinstatement;
Termination.

     

    (a)           Notwithstanding
any provision to the contrary contained herein, this Agreement shall continue to
be effective or be reinstated, as the case may be, if at any time any amount
received by the Secured Party in respect of the Pledged Collateral, any other
Collateral or the Secured Obligations is rescinded, or must otherwise be
restored or returned by the Secured Party upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of any Grantor or any of its
Affiliates or any guarantor of all or any part of the Secured Obligations, or
upon the appointment of any intervenor, receiver or conservator of, or trustee
or similar official for, any Grantor or any such Affiliate or guarantor, or any
substantial part of their respective properties or assets, or otherwise, all as
though such payment had not been made.

     

    
      
         

      

      
        Page |
30

        
          

        

      

      
         

      

    

     

    (b)           Subject
to reinstatement as provided in Section 8.4(a), after
the Discharge of Obligations has occurred, this Agreement shall terminate, and
the Secured Party shall, upon the request and at the sole cost and expense of
the Grantors, (i) cause to be assigned, transferred and delivered to the
applicable Grantors, against receipt and without recourse to or warranty or
representation by the Secured Party, any remaining Pledged Collateral, to or on
the order of the respective Grantor, and (ii) execute and deliver such UCC-3
termination statements, certificates for terminating the Liens on motor vehicles
and such other documents as are necessary to terminate (or reflect or record the
termination of) the Secured Party’s Lien on the Pledged Collateral.

     

    SECTION
8.5    Amendments.  No
amendment, modification, supplement, termination or waiver of or to any
provision hereof, nor consent to any departure by any Grantor therefrom, shall
be effective unless the same shall be made in accordance with the Loan Agreement
and unless in writing and signed by the Secured Party.  Any amendment,
modification or supplement of or to any provision hereof, any waiver of any
provision hereof and any consent to any departure by any Grantor from the terms
of any provision hereof shall be effective only in the specific instance and for
the specific purpose for which made or given.  Except where notice is
specifically required by this Agreement or any other document evidencing the
Secured Obligations, no notice to or demand on any Grantor in any case shall
entitle any Grantor to any other or further notice or demand in similar or other
circumstances.

     

    SECTION
8.6    Notices.  Unless
otherwise provided herein or in the Loan Agreement, any notice or other
communication herein required or permitted to be given shall be given in the
manner (and at the address) and become effective as provided in the Loan
Agreement.

     

    SECTION
8.7    Governing Law, Consent to
Jurisdiction and Service of Process; WAIVER OF
JURY TRIAL.

     

    (a)           Section 11.09 of the
Loan Agreement is incorporated herein by reference, as if set forth herein in
full, mutatis mutandis;
provided that,
as incorporated herein, each reference therein to “this Agreement” or the like
shall be deemed to be a reference to this Agreement.

     

    (b)           WAIVER OF
JURY TRIAL.  EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT
OR ANY OTHER THEORY).  EACH PARTY HERETO (1) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (2) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER
FINANCING DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.

     

    
      
         

      

      
        Page |
31

        
          

        

      

      
         

      

    

     

    SECTION
8.8    Severability.  Any
provision hereof which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.

     

    SECTION
8.9    Counterparts.  This
Agreement and any amendments, waivers, consents or supplements hereto may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original, but all such counterparts together shall constitute
one and the same agreement.  Delivery of an executed counterpart of a
signature page of this Agreement by telecopy shall be effective as delivery of a
manually executed counterpart of this Agreement.

     

    SECTION
8.10   Marshalling.  The
Secured Party shall not be required to marshal any present or future collateral
security (including, but not limited to, this Agreement and the Pledged
Collateral) for, or other assurances of payment of, the Obligations or any of
them or to resort to such collateral security or other assurances of payment in
any particular order, and all of the rights of the Secured Party hereunder or in
respect of such collateral security and other assurances of payment shall be
cumulative and in addition to all other rights, however existing or
arising.  Each Grantor hereby agrees that it will not invoke any
applicable law relating to the marshalling of collateral which might cause delay
in or impede the enforcement of the Secured Party’s rights under this Agreement
or under any other Instrument creating or evidencing any of the Secured
Obligations or under which any of the Secured Obligations is outstanding or by
which any of the Secured Obligations is secured or payment thereof is otherwise
assured, and each Grantor hereby irrevocably waives the benefits of all such
laws.

     

    SECTION
8.11   No Credit for Payment of
Taxes or Imposition.  No Grantor shall be entitled to any
credit against the principal, premium, if any, or interest payable under the
Loan Agreement, and no Grantor shall be entitled to any credit against any other
sums which may become payable under the terms thereof or hereof, by reason of
the payment of any Tax on the Pledged Collateral or any part
thereof.

     

    SECTION
8.12   No Claims Against Secured
Party.  Nothing contained in this Agreement shall constitute
any consent or request by the Secured Party, express or implied, for the
performance of any labor or services or the furnishing of any materials or other
property in respect of the Pledged Collateral or any part thereof, nor as giving
any Grantor any right, power or authority to contract for or permit the
performance of any labor or services or the furnishing of any materials or other
property in such fashion as would permit the making of any claim against the
Secured Party in respect thereof or any claim that any Lien based on the
performance of such labor or services or the furnishing of any such materials or
other property is prior to the Lien hereof.

     

    
      
         

      

      
        Page |
32

        
          

        

      

      
         

      

    

     

    SECTION
8.13   Grantors Remain
Liable.  Nothing set forth in this Agreement shall relieve any
Grantor from the performance of any term, covenant, condition or agreement on
such Grantor’s part to be performed or observed under or in respect of any
agreements or Instruments included in the Pledged Collateral, or any other
Pledged Collateral, at any time prior to the sale, assignment or transfer of
such agreements, Instruments or other Pledged Collateral in accordance with this
Agreement or from any liability to any person under or in respect of any of such
agreements, Instruments or other Pledged Collateral or shall impose any
obligation on any Secured Party to perform or observe any such term, covenant,
condition or agreement on such Grantor’s part to be so performed or observed or
shall impose any liability on any Secured Party for any act or omission on the
part of such Grantor relating thereto or for any breach of any representation or
warranty on the part of such Grantor contained in this Agreement, the Loan
Agreement or the other Financing Documents, or under or in respect of the
Pledged Collateral or made in connection herewith or therewith.  The
obligations of each Grantor contained in this Section 8.13 shall
survive the termination hereof and the discharge of such Grantor’s other
obligations under this Agreement, the Loan Agreement and the other Financing
Documents.

     

    SECTION
8.14   Obligations
Absolute.  All obligations of each Grantor hereunder shall be
absolute and unconditional irrespective of:

     

    (i)           
any bankruptcy, insolvency, reorganization, arrangement, readjustment,
composition, liquidation or the like of any Grantor,

     

    (ii)           
any lack of validity or enforceability of the Loan Agreement or any other
Financing Document, or any other agreement or instrument relating
thereto;

     

    (iii)           any
change in the time, manner or place of payment of, or in any other term of, all
or any of the any Secured Obligations, or any other amendment or waiver of or
any consent to any departure from the Loan Agreement or any other Financing
Document or any other agreement or instrument relating thereto;

     

    (iv)           any
pledge, exchange, release or non-perfection of any other collateral, or any
release or amendment or waiver of or consent to any departure from any
guarantee, for all or any of the Secured Obligations;

     

    (v)           
any exercise, non-exercise or waiver of any right, remedy, power or privilege
under or in respect hereof, the Loan Agreement or any other Financing Document
except as specifically set forth in a waiver granted pursuant to Section 8.5;
or

     

    (vi)           any
other circumstances which might otherwise constitute a defense available to, or
a discharge of, any Grantor.

     

    
      
         

      

      
        Page |
33

        
          

        

      

      
         

      

    

     

    SECTION
8.15    ENTIRE
AGREEMENT.  THIS AGREEMENT AND THE
OTHER FINANCING DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL
AGREEMENTS AMONG THE PARTIES.

     

    [REMAINDER
OF THIS PAGE INTENTIONALLY LEFT BLANK.]

     

    
      
         

      

      
        Page |
34

        
          

        

      

      
         

      

    

     

    IN
WITNESS WHEREOF, the Grantors and the Secured Party have caused this Agreement
to be duly executed and delivered by their duly authorized officers as of the
date first above written.

     

    
      
        
          
            	 
      	
                    BORROWER

                  
	 
      	 
      
	 
      	
                    SERACARE
      LIFE SCIENCES, INC.

                  
	 
      	 
      	 
      
	 
      	
                    By:

                  	
                    /s/ Gregory A. Gould

                  
	 
      	
                    Name: 

                  	
                     
      Gregory A. Gould

                  
	 
      	
                    Title:

                  	
                    Chief
      Financial Officer,

                  
	 
      	 
      	
                    Treasurer
      and Secretary

                  
	 
      	 
      
	 
      	
                    GUARANTORS

                  
	 
      	 
      
	 
      	
                    [None
      on the date
hereof.]

                  

          

        

      

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    
 

    
      
        
          	 
      	
                  SECURED PARTY

                
	 
      	 
      
	 
      	
                  MIDDLESEX
      SAVINGS BANK,

                
	 
      	
                  as
      Secured Party

                
	 
      	 
      	 
      
	 
      	
                  By:

                	
                  /s/ Tony Zhang

                
	 
      	
                  Name: 

                	
                  Tony Zhang

                
	 
      	
                  Title:

                	
                  Vice
President

                

        

      

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    
 

    EXHIBIT
A

     

    [Form
of] COPYRIGHT SECURITY AGREEMENT

     

    This
Copyright Security Agreement (this “Agreement”),
is entered into as of December 30, 2010 by SERACARE LIFE SCIENCES, INC., a
Delaware corporation (the “Borrower”)
and each Guarantor listed on Schedule II hereto
(collectively, the “Guarantors,”
and together with the Borrowers, the “Grantors”),
in favor of MIDDLESEX SAVINGS BANK as Administrative Agent (the “Administrative
Agent”), for the benefit of itself and the other Secured Parties (as such
term is defined in the Security Agreement referred to below) (in such capacity,
and together with its successors in such capacity, the “Secured
Party”).

     

    WITNESSETH:

     

    WHEREAS,
the Grantors are party to a Security Agreement dated as of
December 30, 2010 (as amended from time to time, the “Security
Agreement”) in favor of the Secured Party pursuant to which the Grantors
are required to execute and deliver this Agreement;

     

    NOW,
THEREFORE, in consideration of the foregoing premises and to induce the Secured
Party, for the benefit of the Secured Parties, to enter into Loan Agreement, the
Grantors hereby agree with the Secured Party as follows:

     

    SECTION
1.     Defined
Terms.  Unless otherwise defined herein, terms defined in the
Security Agreement and used herein have the meaning given to them in the
Security Agreement.

     

    SECTION
2.     Grant of Security Interest
in Copyright Collateral.  Each Grantor hereby pledges and
grants to the Secured Party for the benefit of the Secured Parties a lien on and
security interest in and to all of its right, title and interest in, to and
under all:

     

    (a)           Copyrights
for which registrations or applications for registration are listed on Schedule I attached
hereto; and

     

    (b)           Proceeds
of any and all of the foregoing.

     

    SECTION
3.     Security
Agreement.  The security interest granted pursuant to this
Copyright Security Agreement is granted in conjunction with the security
interest granted to the Secured Party pursuant to the Security Agreement, and
Grantors hereby acknowledge and affirm that the rights and remedies of the
Secured Party with respect to the security interest in the Copyrights made and
granted hereby are more fully set forth in the Security Agreement, the terms and
provisions of which are incorporated by reference herein as if fully set forth
herein.  In the event that any provision of this Copyright Security
Agreement is deemed to conflict with the Security Agreement, the provisions of
the Security Agreement shall control unless the Secured Party shall otherwise
determine.

     

    [Signature
Page Follows]

    
      
         

      

      
        
          A-37

          
            Form of
Copyright Security Agreement

          

        

        
          

        

      

      
         

      

    

    
 

    IN
WITNESS WHEREOF, each Grantor has caused this Agreement to be executed and
delivered by its duly authorized offer as of the date first set forth
above.

     

    
      
        
          
            
              	 
      	
                      GRANTORS

                    
	 
      	 
      
	 
      	
                      SERACARE
      LIFE SCIENCES, INC.

                    
	 
      	 
      	 
      
	 
      	
                      By:

                    	 
      
	 
      	 
      	
                      Name:

                    
	 
      	 
      	
                      Title:

                    
	 
      	 
      	 
      
	 
      	
                      [LIST
      GUARANTORS]

                    
	 
      	 
      	 
      
	 
      	
                      By:

                    	 
      
	 
      	 
      	
                      Name:

                    
	 
      	 
      	
                      Title:

                    

            

          

        

      

    

    

    [Signature
Page to Copyright Security Agreement]

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    Schedule
I

     

    
      
         

      

      
        
          A-39

          
            Form of
Copyright Security Agreement

          

        

        
          

        

      

      
         

      

    

    Schedule
II

     

    [LIST
GUARANTORS]

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    EXHIBIT
B

     

    [Form
of] PATENT SECURITY AGREEMENT

     

    This
Patent Security Agreement (this “Agreement”),
is entered into as of December 30, 2010 by SERACARE LIFE SCIENCES,
INC., a Delaware corporation (the “Borrower”)
and each Guarantor listed on Schedule II hereto
(collectively, the “Guarantors,”
and together with the Borrowers, the “Grantors”),
in favor of MIDDLESEX SAVINGS BANK as Administrative Agent (the “Administrative
Agent”), for the benefit of itself and the other Secured Parties (as such
term is defined in the Security Agreement referred to below) (in such capacity,
and together with its successors in such capacity, the “Secured
Party”).

     

    WITNESSETH:

    

    WHEREAS,
the Grantors are party to a Security Agreement dated as of
December 30, 2010 (as amended from time to time, the “Security
Agreement”) in favor of the Secured Party pursuant to which the Grantors
are required to execute and deliver this Agreement;

     

    NOW,
THEREFORE, in consideration of the foregoing premises and to induce the Secured
Party, for the benefit of the Secured Parties, to enter into Loan Agreement, the
Grantors hereby agree with the Secured Party as follows:

     

    SECTION
1.   Defined
Terms.  Unless otherwise defined herein, terms defined in the
Security Agreement and used herein have the meaning given to them in the
Security Agreement.

     

    SECTION
2.   Grant of Security Interest
in Patent Collateral.  Each Grantor hereby pledges and grants
to the Secured Party for the benefit of the Lenders a lien on and a security
interest in and to all of its right, title and interest in, to and under
all:

     

    (a)           Patents
for which registrations or applications for registration are listed on Schedule I attached
hereto;

     

    (b)           Goodwill
associated with such Patents; and

     

    (c)           Proceeds
of any and all of the foregoing.

     

    SECTION
3.   Security
Agreement.  The security interest granted pursuant to this
Agreement is granted in conjunction with the security interest granted to the
Secured Party pursuant to the Security Agreement, and the Grantors hereby
acknowledge and affirm that the rights and remedies of the Secured Party with
respect to the security interest in the Patents made and granted hereby are more
fully set forth in the Security Agreement, the terms and provisions of which are
incorporated by reference herein as if fully set forth herein.  In the
event that any provision of this Agreement is deemed to conflict with the
Security Agreement, the provisions of the Security Agreement shall
control.

     

    [Signature
Page Follows]

     

    
      
         

      

      
        
          B-1

          
            Form of
Patent Security Agreement

          

        

        
          

        

      

      
         

      

    

     

    IN
WITNESS WHEREOF, each Grantor has caused this Agreement to be executed and
delivered by its duly authorized offer as of the date first set forth
above.

     

    
      
        
          
            	 
      	
                    GRANTORS

                  
	 
      	 
      
	 
      	
                    SERACARE
      LIFE SCIENCES, INC.

                  
	 
      	 
      	 
      
	 
      	
                    By:

                  	 
      
	 
      	 
      	
                    Name:

                  
	 
      	 
      	
                    Title:

                  
	 
      	 
      	 
      
	 
      	
                    [LIST
      GUARANTORS]

                  
	 
      	 
      	 
      
	 
      	
                    By:

                  	 
      
	 
      	 
      	
                    Name:

                  
	 
      	 
      	
                    Title:

                  

          

        

      

    

    

    [Signature
Page to Patent Security Agreement]

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    
 

    Schedule
I

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    Schedule
II

     

    [LIST
GUARANTORS]

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    EXHIBIT
C

     

    [Form
of] TRADEMARK SECURITY AGREEMENT

     

    This
Trademark Security Agreement (this “Agreement”),
is entered into as of December 30, 2010 by SERACARE LIFE SCIENCES,
INC., a Delaware corporation (the “Borrower”)
and each Guarantor listed on Schedule II hereto
(collectively, the “Guarantors,”
and together with the Borrowers, the “Grantors”),
in favor of MIDDLESEX SAVINGS BANK as Administrative Agent (the “Administrative
Agent”), for the benefit of itself and the other Secured Parties (as such
term is defined in the Security Agreement referred to below) (in such capacity,
and together with its successors in such capacity, the “Secured
Party”).

     

    WITNESSETH:

    

    WHEREAS,
the Grantors are party to a Security Agreement dated as of
December 30, 2010 (as amended from time to time, the “Security
Agreement”) in favor of the Secured Party pursuant to which the Grantors
are required to execute and deliver this Agreement;

     

    NOW,
THEREFORE, in consideration of the premises and to induce the Secured Party, for
the benefit of the Secured Parties, to enter into Loan Agreement, the Grantors
hereby agree with the Secured Party as follows:

     

    SECTION
1.       Defined
Terms.  Unless otherwise defined herein, terms defined in the
Security Agreement and used herein have the meaning given to them in the
Security Agreement.

     

    SECTION
2.       Grant of Security Interest
in Trademark Collateral.  Each Grantor hereby pledges and
grants to the Secured Party for the benefit of the Lenders a lien on and a
security interest in and to all of its right, title and interest in, to and
under all:

     

    (a)        Trademarks
for which registrations or applications for registration are listed on Schedule I attached
hereto;

     

    (b)        Goodwill
associated with such Trademarks; and

     

    (c)        Proceeds
of any and all of the foregoing.

     

    SECTION
3.       Security
Agreement.  The security interest granted pursuant to this
Agreement is granted in conjunction with the security interest granted to the
Secured Party pursuant to the Security Agreement and the Grantors hereby
acknowledge and affirm that the rights and remedies of the Secured Party with
respect to the security interest in the Trademarks made and granted hereby are
more fully set forth in the Security Agreement, the terms and provisions of
which are incorporated by reference herein as if fully set forth
herein.  In the event that any provision of this Agreement is deemed
to conflict with the Security Agreement, the provisions of the Security
Agreement shall control.

     

    [Signature
Page Follows]

     

    
      
         

      

      
        
          C-1

          
            Form of
Trademark Security Agreement

          

        

        
          

        

      

      
         

      

    

     

    IN
WITNESS WHEREOF, each Grantor has caused this Agreement to be executed and
delivered by its duly authorized offer as of the date first set forth
above.

     

    
      
        
          
            	 
      	
                    GRANTORS

                  
	 
      	 
      
	 
      	
                    SERACARE
      LIFE SCIENCES, INC.

                  
	 
      	 
      	 
      
	 
      	
                    By:

                  	 
      
	 
      	 
      	
                    Name:

                  
	 
      	 
      	
                    Title:

                  
	 
      	 
      	 
      
	 
      	
                    [LIST
      GUARANTORS]

                  
	 
      	 
      
	 
      	
                    By:

                  	 
      
	 
      	 
      	
                    Name:

                  
	 
      	 
      	
                    Title:

                  

          

        

      

    

     

    
      [Signature
Page to Trademark Security Agreement]

        

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    
 

    Schedule
I

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    Schedule
II

     

    [LIST
GUARANTORS]
 

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    EXHIBIT
D

     

    [Form
of] PLEDGE SUPPLEMENT

     

    This
Pledge Supplement, dated as of
[                   ],
is delivered pursuant to Section 4.1 of that certain security agreement (as
amended, supplemented or otherwise modified from time to time, the “Security Agreement;”
capitalized terms used but not otherwise defined herein shall have the meanings
assigned to such terms in the Security Agreement), dated as of
December 30, 2010, made by SERACARE LIFE SCIENCES, INC., a Delaware
corporation (the “Borrower”), the other
Grantors party thereto and Middlesex Savings Bank, as Secured Party (as such
term is defined in the Security Agreement).  The undersigned hereby
agrees that this Pledge Supplement may be attached to the Security Agreement and
that the Pledged Securities and/or Intercompany Notes listed on this Pledge
Supplement shall be deemed to be and shall become part of the Pledged Collateral
and shall secure all Secured Obligations.

     

    

    PLEDGED
SECURITIES

    

    
      
        
          	
                  ISSUER

                	 
      	
                  CLASS OF

                  STOCK OR

                  INTERESTS

                	 
      	
                  PAR VALUE

                	 
      	
                  CERTIFICATE

                  NO(S).

                	 
      	
                  NUMBER OF

                  SHARES OR

                  INTERESTS

                	 
      	
                  PERCENTAGE OF ALL

                  ISSUED CAPITAL OR

                  OTHER EQUITY

                  INTERESTS OF

                  ISSUER

                
	 
      	
                    

                	 
      	
                    

                	 
      	
                    

                	 
      	
                    

                	 
      	
                    

                	 
      

        

      

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    
 

    INTERCOMPANY
NOTES

    

    
      
        
          	
                  ISSUER

                	 
      	
                  PRINCIPAL

                  AMOUNT

                	 
      	
                  DATE OF

                  ISSUANCE

                	 
      	
                  INTEREST

                  RATE

                	 
      	
                  MATURITY

                  DATE

                
	 	
                    

                	 
      	
                    

                	 
      	
                    

                	 
      	
                    

                	 
      

        

      

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    
 

    
      
        
          
            
              
                
                  	 
      	 	
                          [                           
      ]

                        
	 
      	 	
                          as
      Grantor

                        
	 
      	 	 
      
	 
      	 	
                          By:

                        	 
      
	 
      	 	 
      	
                          Name:

                        
	 
      	 	 
      	
                          Title:

                        

                

              

            

          

        

      

    

    

    
      
        
          
            
              	
                      AGREED TO AND ACCEPTED:

                    	 	 
      
	 
      	 	 
      
	
                      MIDDLESEX
      SAVINGS BANK,

                    	 	 
      
	
                      as
      Secured Party

                    	 	 
      
	 
      	 
      	 	 
      
	
                      By:

                    	 
      	 	 
      
	 
      	
                      Name:

                    	 	 
      
	 
      	
                      Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00182-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00182-of-00352.parquet"}]]