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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=5><B>SECURITIES AND EXCHANGE
COMMISSION </B></FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4><B>WASHINGTON, D.C. 20549</B> </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4><BR><B>FORM 8-K</B></FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4><BR><B>CURRENT REPORT</B></FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>PURSUANT TO SECTION 13
OR 15(d) OF THE</B></FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>SECURITIES EXCHANGE ACT
OF 1934</B></FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Date of Report (Date of earliest
event reported) July 17, 2003 </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4><BR><B>KVH Industries, Inc.</B></font><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>(Exact Name of
Registrant as Specified in Charter)</FONT></P>

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<B>Delaware</B>
<BR>
(State or Other Jurisdiction of Incorporation)
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<B>0-28082</B>
<BR>
(Commission File Number)
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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>05-0420589</B><BR>(IRS Employer
Identification No.)</FONT></P>

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<TD width=50>&nbsp;</TD>
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<FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;50 Enterprise Center</B>
<BR>
<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Middletown, RI</B>
<BR>
&nbsp;(Address of Principal Executive Offices)
</font>
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<B>02842</B>
<BR>
(Zip Code)
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Registrant&#146;s
telephone number, including area code: <B>(401) 847- 3327</B>
<BR><BR>
N/A
<BR><BR>
(Former Name or Former
Address, if Changed Since Last Report)
<BR><BR><BR><BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Item 5.&nbsp;&nbsp;&nbsp;&nbsp;Other Events.</B></FONT><BR><BR>
<FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
report is being filed by KVH Industries, Inc. (&#147;KVH&#148;) to announce that, KVH entered into a Line of Credit with its bank, Fleet Capital Corporation. The line of credit agreement entered
into by KVH is filed as Exhibit 99.1 to this report.
</FONT>
<BR><BR>
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exhibits:</FONT></P>
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following exhibit is filed with this report on Form 8-K:</FONT></P>
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exhibit No.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Description</FONT></P>
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;99.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Line of Credit Agreement.</FONT></P>

<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>SIGNATURES</b> </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly authorized.
<BR><BR><BR>
<B>KVH Industries, Inc.</B>
</FONT></P>

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<TD WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Date:</B>  July 17, 2003</FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
BY: /S/ Patrick J. Spratt
<BR>
&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;
<BR>
Patrick J. Spratt
<BR>
Chief Accounting &amp; Financial Officer
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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4>AMENDED AND RESTATED </FONT></H1>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4>CREDIT AND SECURITY
AGREEMENT </FONT></H1>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>dated as of </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>July 17, 2003 </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>among </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>KVH INDUSTRIES, INC., </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>as borrower, </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>and </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>FLEET CAPITAL
CORPORATION, </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>as Lender </FONT></P>

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<BR>
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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SCHEDULES &amp; EXHIBITS </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Schedule 1.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Designated Financial Officers
<BR>
Schedule 4.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Websites and Domain Names
<BR>
Schedule 5.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Governmental Approvals; No Conflicts
<BR>
Schedule 5.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financial Condition; No Material Adverse Changes
<BR>
Schedule 5.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Properties; Proprietary Rights; Real Property Assets
<BR>
Schedule 5.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Litigation and Environmental Matters
<BR>
Schedule 5.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Compliance with Laws and Agreements
<BR>
Schedule 5.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Taxes
<BR>
Schedule 5.10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pension Plans
<BR>
Schedule 5.12&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capitalization
<BR>
Schedule 5.13&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subsidiaries
<BR>
Schedule 5.14&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Material Indebtedness, Liens and Agreements
<BR>
Schedule 5.19&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Labor and Employment Matters
<BR>
Schedule 5.20&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bank Accounts
<BR>
Schedule 8.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Existing Indebtedness
<BR>
Schedule 8.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Transactions with Affiliates
<BR>
Schedule 8.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restrictive Agreements
</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Exhibit A&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Form of Amended and Restated Revolving Credit Note
<BR>
Exhibit B-1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Form of Borrowing Base Certificate
<BR>
Exhibit B-2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Form of Collateral Update Certificate
<BR>
Exhibit B-3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Form of Accounts Receivable/Loan Reconciliation Report
<BR>
Exhibit B-4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Form of Eurodollar Request
<BR>
Exhibit B-5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Form of Advance Request
<BR>
Exhibit C&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Form of Perfection Certificate
<BR>
Exhibit D&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Form of Compliance Certificate
<BR>
Exhibit E&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Form of Opinion of Counsel to the Borrower</FONT></P>


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     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Article 1</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Definitions</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1</FONT></TD>
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     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1.1</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Defined Terms</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1</FONT></TD>
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     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1.2</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Accounting Terms; GAAP</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">21</FONT></TD>
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     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1.4</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Designated Financial Officers</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">22</FONT></TD>
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     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Article 2</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">The Credits</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">22</FONT></TD>
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     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2.1</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Revolving Loans</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">22</FONT></TD>
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     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2.2</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Eurodollar Borrowings</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">23</FONT></TD>
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     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2.3</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Letters of Credit</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">23</FONT></TD>
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     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2.4</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Expiration, Termination or Reduction of Revolving Credit Commitment</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">28</FONT></TD>
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     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2.5</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Payments</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">28</FONT></TD>
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     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2.6</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Prepayment of Loans</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">29</FONT></TD>
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     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2.7</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Fees</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">31</FONT></TD>
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     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2.8</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Increased Costs</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">32</FONT></TD>
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     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2.9</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Taxes</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">33</FONT></TD>
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     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Article 3</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">INTENTIONALLY OMITTED</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">34</FONT></TD>
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     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Article 4</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">The Collateral</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">34</FONT></TD>
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     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">4.1</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Grant of Security Interest</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">34</FONT></TD>
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     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">4.2</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Special Warranties and Covenants of the Borrower</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">35</FONT></TD>
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     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">4.3</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Collection of Proceeds of Accounts Receivable</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">39</FONT></TD>
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     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">4.4</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Fixtures, etc.</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">41</FONT></TD>
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     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">4.5</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Right of Lender to Dispose of Collateral, etc.</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">41</FONT></TD>
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     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">4.6</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Right of Lender to Use and Operate Collateral, etc.</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">41</FONT></TD>
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     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">4.7</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Proceeds of Collateral</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">42</FONT></TD>
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     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Article 5</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Representations and Warranties</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">42</FONT></TD>
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     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5.1</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Organization; Powers</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">42</FONT></TD>
</TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5.2</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Authorization; Enforceability</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">42</FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5.3</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Governmental Approvals; No Conflicts</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">43</FONT></TD>
</TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5.4</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Financial Condition; No Material Adverse Change</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">43</FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5.5</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Properties</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">44</FONT></TD>
</TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5.6</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Litigation and Environmental Matters</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">44</FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5.7</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Compliance with Laws and Agreements</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">45</FONT></TD>
</TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5.8</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Investment and Holding Company Status</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">45</FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5.9</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Taxes</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">45</FONT></TD>
</TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5.10</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">ERISA</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">45</FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5.11</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Disclosure</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">46</FONT></TD>
</TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5.12</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Capitalization</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">46</FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5.13</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Subsidiaries</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">46</FONT></TD>
</TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5.14</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Material Indebtedness, Liens and Agreements</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">47</FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5.15</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Federal Reserve Regulations</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">47</FONT></TD>
</TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5.16</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Solvency</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">48</FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5.17</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Force Majeure</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">48</FONT></TD>
</TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5.18</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Accounts Receivable</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">48</FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5.19</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Labor and Employment Matters</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">49</FONT></TD>
</TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5.20</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Bank Accounts</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">50</FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Article 6</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Conditions</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">50</FONT></TD>
</TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">6.1</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Effective Time</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">50</FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">6.2</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Each Extension of Credit</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">52</FONT></TD>
</TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Article 7</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Affirmative Covenants</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">53</FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">7.1</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Financial Statements and Other Information</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">53</FONT></TD>
</TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">7.2</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Notices of Material Events</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">55</FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">7.3</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Existence; Conduct of Business</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">55</FONT></TD>
</TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">7.4</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Payment of Obligations</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">55</FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">7.5</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Maintenance of Properties; Insurance</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">55</FONT></TD>
</TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">7.6</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Books and Records; Inspection Rights</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">56</FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">7.7</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Fiscal Year</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">56</FONT></TD>
</TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">7.8</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Compliance with Laws</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">57</FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">7.9</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Use of Proceeds</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">57</FONT></TD>
</TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">7.10</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Certain Obligations Respecting Subsidiaries</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">57</FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">7.11</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">ERISA</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">57</FONT></TD>
</TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">7.12</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Environmental Matters; Reporting</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">57</FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">7.13</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Matters Relating to Additional Real Property Collateral</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">58</FONT></TD>
</TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">7.14</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Cash Deposits/Bank Accounts</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">58</FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">7.15</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Collateral in the Possession of a Bailee</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">58</FONT></TD>
</TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Article 8</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Negative Covenants</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">59</FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">8.1</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Indebtedness</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">59</FONT></TD>
</TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">8.2</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Liens</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">59</FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">8.3</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Contingent Liabilities</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">61</FONT></TD>
</TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">8.4</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Fundamental Changes; Asset Sales</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">61</FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">8.5</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Investments; Hedging Agreements</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">61</FONT></TD>
</TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">8.6</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Restricted Junior Payments</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">62</FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">8.7</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Transactions with Affiliates</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">62</FONT></TD>
</TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">8.8</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Restrictive Agreements</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">62</FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">8.9</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Sale-Leaseback Transactions</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">63</FONT></TD>
</TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">8.10</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Lines of Business</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">63</FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">8.11</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Modifications of Certain Documents</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">63</FONT></TD>
</TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Article 9</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Events of Default</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">63</FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">9.1</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Events of Default</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">63</FONT></TD>
</TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">9.2</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Receivership</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">66</FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Article 10</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Miscellaneous</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">67</FONT></TD>
</TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">10.1</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Notices</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">67</FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">10.2</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Waivers; Amendments</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">67</FONT></TD>
</TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">10.3</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Expenses; Indemnity: Damage Waiver</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">68</FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">10.4</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Successors and Assigns</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">69</FONT></TD>
</TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">10.5</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Survival</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">70</FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">10.6</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Counterparts; Integration; References to Agreement; Effectiveness</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">70</FONT></TD>
</TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">10.7</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Severability</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">71</FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">10.8</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Right of Setoff</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">71</FONT></TD>
</TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">10.9</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Subordination by Credit Parties</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">71</FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">10.10</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Governing Law; Jurisdiction; Consent to Service of Process</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">72</FONT></TD>
</TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">10.11</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">WAIVER OF JURY TRIAL</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">72</FONT></TD>
</TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">10.12</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Headings</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">73</FONT></TD>
</TR>
<TR VALIGN="TOP" BGCOLOR="#CCEEFF">
     <TD align="right"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">10.13</FONT></TD>
     <TD width="20"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Confidentiality</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">73</FONT></TD>
</TR>
</TABLE>


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<A NAME=A014></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4>AMENDED AND RESTATED
CREDIT AND SECURITY AGREEMENT </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIS
AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT dated as of July 17, 2003 (this
&#147;Agreement&#148;) is by and among KVH INDUSTRIES, INC., a Delaware corporation (the
&#147;Borrower&#148;), FLEET CAPITAL CORPORATION, as Lender, FLEET NATIONAL BANK, as
Issuing Lender and Cash Management Bank. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>WHEREAS</B>,
the Borrower and the Lender entered into that certain Loan and Security Agreement, dated
as of March 27, 2000 (the &#147;Existing Agreement&#148;), pursuant to which the Lender
extended to the Borrower a revolving line of credit in the principal amount of
$5,000,000.00; </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>WHEREAS</B>,
the Borrower has requested that the Lender increase the principal amount of the revolving
line of credit to $15,000,000.00, and the Lender has agreed to make such an increase on
the condition that the Borrower agree to amend and restate the terms of the Existing
Agreement in their entirety pursuant to the terms hereof; </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>NOW,
THEREFORE, </B>the parties hereto agree as follows: </FONT></P>

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<A NAME=A015></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>ARTICLE 1......... </FONT></H1>

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<A NAME=A016></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Definitions </FONT></H1>

1.1      Defined Terms.  As used in this Agreement, the following terms have the meanings specified below:

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Accounts
Receivable/Loan Reconciliation Report</U>&#148; means a certificate signed by a Designated
Financial Officer in substantially the form of <U>Exhibit B-3</U> hereto. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>ACH
Reserve</U>&#148; means, as of the Closing Date, $45,000.00, as such amount may be
adjusted from time to time in the Lender&#146;s sole discretion. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Adjusted
Base Rate</U>&#148; means, for any day, a rate per annum equal to the greater of (a) the
Prime Rate in effect on such day, and (b) the Federal Funds Effective Rate in effect on
such day <U>plus</U> 1/2 of 1%. Any change in the Adjusted Base Rate due to a change in
the Prime Rate or the Federal Funds Effective Rate shall be effective from and including
the effective date of such change in the Prime Rate or the Federal Funds Effective Rate,
respectively. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Advance
Request</U>&#148; means a written request signed by a Designated Financial Officer for a
Borrowing in accordance with subsection&nbsp;2.1(b), in substantially the form of
<U>Exhibit B-5</U> annexed hereto. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Affiliate</U>&#148;
means, with respect to a specified Person, another Person that Controls or is Controlled
by or is under common Control with the Person specified. The term &#147;Affiliate&#148;
shall exclude any Foreign Subsidiary. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Applicable
Margin</U>&#148; and &#147;<U>Applicable Unused Fee Rate</U>&#148; means, for any Type of
Loans (a) for the Initial Payment Period (as defined below) the following percentages per
annum: </FONT></P>

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<A NAME=A017></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Applicable
Unused&nbsp;Fee&nbsp;Rate </FONT></H1>

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<A NAME=A018></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Applicable Margin (%
per annum) (% per annum) </FONT></H1>

<FONT FACE="Times New Roman, Times, Serif" SIZE=2>
         Revolving Loans                    0.00%                  2.00%                     0.25%
</font>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Assignment
Regarding Federal Contracts</U>&#148; means that certain Assignment, dated as of
March&nbsp;27, 2000, by the Borrower in favor of the Lender, regarding certain federal
contracts to which the Borrower is a party, together with each Notice of Assignment
executed in connection therewith. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Available
Funds</U>&#148; means all deposits in the Controlled Accounts which have been made by 2:00
p.m., Boston, Massachusetts time, on a Business Day, or such later time as the Lender and
the Cash Management Bank shall have expressly consented to. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Base
Rate</U>&#148; when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by
reference to the Adjusted Base Rate. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Board</U>&#148;
means the Board of Governors of the Federal Reserve System of the United States of
America. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Borrower</U>&#148;
means KVH Industries, Inc., a Delaware corporation. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Borrowing</U>&#148;
means Loans of the same Type, made, converted or continued on the same date and, in the
case of Eurodollar Loans, as to which a single Eurodollar Interest Period is in effect. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Borrowing
Base</U>&#148; means, at the relevant time of reference thereto, an amount determined by
the Lender by reference to the most recent Borrowing Base Certificate delivered to the
Lender pursuant to Section&nbsp;2.1(b) which is equal to the sum of: </FONT></P>

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<A NAME=A020></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
85% of Eligible Accounts, plus</I> </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(b)&nbsp;&nbsp;&nbsp;&nbsp;
          the lesser of 20% of Eligible Raw Materials Inventory and $2,000,000.00; <U>plus</U> </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(c)&nbsp;&nbsp;&nbsp;&nbsp;
          the lesser of 50% of Eligible Finished Goods Inventory and $3,000,000.00;
          <U>minus</U> </FONT></P>
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                    <TD ALIGN=RIGHT WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(d) </FONT></TD>
                    <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
                    <TD WIDTH=91%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
                    the Merchant Service Line of Credit Reserve, the FX Daily Delivery Reserve, the
                    FX Pre-settlement Reserve, the ACH Reserve, the Permanent Availability Reserve,
                    and such other reserves as the Lender in its sole discretion shall deem
                    appropriate from time to time; </FONT></P></TD>
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                    <BR>
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                    <TD>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In determining the Borrowing Base
from time to time, the Lender may, but shall not be required to, rely upon reports or
analyses generated by the Credit Parties (including, without limitation, Borrowing Base
Certificates/Collateral Update Certificates) and reports or analyses generated by or on
behalf of the Lender. Notwithstanding anything to the contrary set forth herein, the
Lender may in its reasonable discretion at any time and from time to time, adjust the
percentages of Eligible Accounts, Eligible Raw Materials Inventory, Eligible Finished
Goods Inventory included within the Borrowing Base. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Borrowing
Base Certificate</U>&#148; means a certificate signed by a Designated Financial Officer
certifying the amount of the Borrowing Base as of the date set forth therein, in
substantially the form of <U>Exhibit B-1</U> hereto. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Business
Day</U>&#148; means any day that is not a Saturday, Sunday or other day on which
commercial banks in Boston, Massachusetts are authorized or required by law to remain
closed; <I>provided</I> that, when used in connection with a Eurodollar Loan, the term
&#147;<U>Business Day</U>&#148; shall also exclude any day on which banks are not open for
dealings in U.S. dollar deposits in the London interbank market. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Capital
Expenditures</U>&#148; means, for any period, the sum for the Borrower and its
Subsidiaries (determined in accordance with GAAP) of the aggregate amount of expenditures
made or liabilities incurred during such period (including the aggregate amount of Capital
Lease Obligations incurred during such period) to acquire or construct fixed assets, plant
and equipment (including renewals, improvements and replacements, but excluding repairs)
computed in accordance with GAAP; <I>provided</I> that such term shall not include any
such expenditures in connection with any replacement or repair of Property affected by a
Casualty Event. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Capital
Lease Obligations</U>&#148; of any Person means the obligations of such Person to pay rent
or other amounts under any lease of (or other arrangement conveying the right to use) real
or personal property, or a combination thereof, which obligations are required to be
classified and accounted for as capital leases on a balance sheet of such Person under
GAAP, and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Cash
Management Bank</U>&#148; means Fleet National Bank, in its capacity as the provider of
cash management services to the Borrower. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Casualty
Event</U>&#148; 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. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Change
in Law</U>&#148; means (a) the adoption of any law, rule or regulation after the Closing
Date, (b) any change after the Closing Date in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority or (c) compliance by
the Lender or the Issuing Lender (or, for purposes of subsection&nbsp;2.9(b), by any
lending office of the Lender or by the Lender&#146;s or the Issuing Lender&#146;s holding
company, if any) with any request, guideline or directive (whether or not having the force
of law), other than a request or directive to comply with any law, rule or regulation in
effect on the Closing Date, of any Governmental Authority made or issued after the Closing
Date. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Change
of Control</U>&#148; means (a) any Person or &#147;group&#148; (within the meaning of
Section 13(d) of the Securities Exchange Act of 1934, as amended) of Persons acting in
concert as a partnership or other group shall, as a result of a tender or exchange offer,
open market purchases, privately negotiated purchases or otherwise, have become, after the
date hereof, the &#147;beneficial owner&#148; (within the meaning of such term under Rule
13d-3 under the Exchange Act) of securities of the Borrower representing 50% or more of
the combined voting power of the then outstanding securities of the Borrower ordinarily
(and apart from rights accruing under special circumstances) having the right to vote in
the election of directors; or (b) any event, transaction or occurrence as a result of
which a majority of the seats (other than vacant seats) on the board of directors of the
Borrower shall be occupied by Persons who were neither (i) nominated by the board of
directors of the Borrower nor (ii) appointed by directors so nominated; or (c) the sale of
all or substantially all of the business or assets of the Borrower. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Closing
Date</U>&#148; means the date during which the Effective Time shall occur. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Code</U>&#148;
means the Internal Revenue Code of 1986, as amended from time to time. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Collateral</U>&#148;
means, collectively, all of the Property in which Liens are purported to be granted
hereunder and under the other Loan Documents as security for the Obligations of the Credit
Parties hereunder. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Collateral
Update Certificate</U>&#148; means a certificate signed by a Designated Financial Officer,
in substantially the form of <U>Exhibit B-2</U> annexed hereto. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Compliance
Certificate</U>&#148; means a certificate signed by a Designated Financial Officer, in
substantially the form of <U>Exhibit </U>D annexed hereto, (a) 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, and (b) 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&nbsp;5.4 and, if any such change has occurred,
specifying the effect of such change on the financial statements accompanying such
certificate. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Control</U>&#148;
means the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the ability to
exercise voting power, by contract or otherwise. &#147;<U>Controlling</U>&#148; and
&#147;<U>Controlled</U>&#148; have meanings correlative thereto. A Person who owns or
holds capital stock, beneficial interests or other securities representing five percent
(5%) or more of the Total Voting Power of another Person shall be deemed, for purposes of
this Agreement, to &#147;control&#148; such other Person. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Control
Agreement</U>&#148; means with respect to any Controlled Account, an agreement in
accordance with Section 4.3(b), in form and substance satisfactory to the Lender, executed
and delivered by the Credit Parties, the depository institution at which such Controlled
Account is maintained and the Lender at the Effective Time and thereafter in accordance
with Section&nbsp;7.14, as such agreement may be amended, supplemented or otherwise
modified from time to time, including, without limitation, the Dominion Account Agreement. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Controlled
Account </U>&#148; has the meaning assigned to such term in Section&nbsp;4.3(a). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Copyrights</U>&#148;
means all copyrights, whether statutory or common law, owned by or assigned to the Credit
Parties, and all exclusive and nonexclusive licenses to the Credit Parties from third
parties or rights to use copyrights owned by such third parties, including, without
limitation, the registrations, applications and licenses listed on <U>Schedule 5.5</U>
hereto, along with any and all (a) renewals and extensions thereof, (b) income, royalties,
damages, claims and payments now and hereafter due and/or payable with respect thereto,
including, without limitation, damages and payments for past, present or future
infringements thereof, (c) rights to sue for past, present and future infringements
thereof, and (d) foreign copyrights and any other rights corresponding thereto throughout
the world. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Credit
Parties</U>&#148; (i) until such time as any acquired or newly created Subsidiary of the
Borrower shall become a Subsidiary Guarantor of the Obligations of the Borrower hereunder,
the Borrower; and (ii) from and after such time as any acquired or newly created
Subsidiary of the Borrower shall become a Subsidiary Guarantor of the Obligations of the
Borrower hereunder, the Borrower and all Subsidiary Guarantors. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Default</U>&#148;
means any event or condition which constitutes an Event of Default or which upon notice,
lapse of time or both would, unless cured or waived, become an Event of Default. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Designated
Financial Officer</U>&#148; means an individual holding one or more of the following
offices with each of the Credit Parties or otherwise having executive responsibilities for
financial matters and listed in <U>Schedule 1.4</U> hereto: chief financial officer,
principal accounting officer, treasurer, assistant treasurer or controller. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Disclosed
Matters</U>&#148; means the actions, suits and proceedings and the environmental matters
disclosed in <U>Schedule&nbsp;5.6</U>. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Disposition</U>&#148;
means any sale, assignment, transfer or other disposition of any property (whether now
owned or hereafter acquired) by any Credit Party to any Person other than to another
Credit Party or any Subsidiary of the Borrower excluding (a) the granting of Liens
permitted hereunder and (b) any sale, assignment, transfer or other disposition of (i) any
property sold or disposed of in the ordinary course of business and on ordinary business
terms, (ii) any property no longer used or useful in the business of the Credit Parties
and (iii) any Collateral pursuant to an exercise of remedies by the Lender hereunder or
under any other Loan Document. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Dominion
Account Agreement</U>&#148; means that certain Three-Party Blocked Account Service
Agreement , dated as of October&nbsp;19, 2001, by and among the Borrower, the Lender and
the Cash Management Bank, as amended and restated in its entirety by that certain Amended
and Restated Blocked Account Agreement, dated as of July 17, 2003, as the same may be
amended, restated, modified or supplemented from time to time. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Effective
Time</U>&#148; means the time specified in a written notice from the Lender when the
conditions specified in Section&nbsp;6.1 are satisfied (or waived in accordance with
Section&nbsp;10.2). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Eligible
Accounts</U>&#148; means (a) the aggregate face amount of the accounts receivable
outstanding and owed to the Borrower as determined in accordance with GAAP consistently
applied and as entered on the books and records of the Borrower in the ordinary course of
the business operations of the Borrower which satisfy each of the requirements set forth
below, <U>minus</U> (b) without duplication, the aggregate amount of any returns,
discounts (which may, at the Lender&#146;s option, be calculated on the shortest term),
claims, credits, chargebacks, contra accounts, allowances or excise taxes of any nature
(whether issued, owing, granted or outstanding): </FONT></P>

</TD>
               </TR>
               </TABLE>
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          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%></TD>
               <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               the subject goods have been sold and/or services have been rendered on an
               absolute sale basis and on an open account basis to an account debtor which is
               not (A) the United States government or any agency thereof or other Person such
               that the Assignment of Claims Act would apply to the pledge of receivables of
               such account debtor, unless the Assignment of Claims Act has been complied with
               to the satisfaction of the Lender or (B) an Affiliate or a Subsidiary of any
               Credit Party; </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%></TD>
               <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               an invoice (in form and substance acceptable to the Lender) has been sent to the
               applicable account debtor and bears an invoice date contemporaneous with or
               later than the date of sale of such goods or rendering of such service; </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%></TD>
               <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               the account receivable does not arise from a sale to the account debtor on a
               bill-and-hold, guaranteed sale, sale-or-return, sale-on-assignment,
               sale-on-appraisal, consignment or any other repurchase or return basis;
               (provided, however, that goods sold to an account debtor pursuant to a purchase
               order or other contract that specifies delivery of goods &#147;ex-works&#148; or
               &#147;free carrier&#148;, as such terms are defined by Incoterms 2000, shall not
               be deemed a &#147;bill and hold&#148; sale; </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%></TD>
               <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               the account is not evidenced by chattel paper or an instrument of any kind, and
               has not been reduced to judgment; </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%></TD>
               <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               the account debtor is not insolvent or the subject of any bankruptcy or
               insolvency proceedings of any kind; </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%></TD>
               <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(vi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               the account debtor is credit worthy and not experiencing financial difficulties
               that could affect the collectability of the account; </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%></TD>
               <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(vii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               the account debtor is an entity organized under the laws of one of the United
               States or one of the provinces of Canada, whose main office is also located
               within the United States (including Puerto Rico as within the United States) or
               Canada, or, if the account debtor is not such an entity organized and located
               within the United States or Canada, the account is insured by a letter of credit
               issued or confirmed by a bank acceptable to the Lender or by other credit
               enhancements, in each case in form and substance satisfactory to the Lender; </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%></TD>
               <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(viii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               the account receivable is a valid and legally enforceable obligation of the
               account debtor thereunder, it is not subject to recoupment, offset (other than
               discount for prompt payment) or other defense on the part of such account debtor
               or to any claim on the part of such account debtor denying liability thereunder; </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%></TD>
               <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(ix)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               the account receivable is not subject to any Lien of any kind except for the
               Lien of the Lender securing the obligations of the Credit Parties under this
               Agreement; </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%></TD>
               <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(x)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               the account receivable has not remained outstanding in whole or in part for more
               than (A) ninety (90) days after the invoice date or (B) sixty (60) days after
               the due date; </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%></TD>
               <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(xi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               the account receivable does not arise out of a transaction (direct or indirect)
               with an employee, officer, agent, director or stockholder of any Credit Party; </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%></TD>
               <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(xii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               the account receivable is not owing from an account debtor from whom fifty
               percent (50%) or more of the dollar amount of all accounts receivable are deemed
               ineligible under clause (x) above; </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%></TD>
               <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(xiii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               the total unpaid accounts receivable owing from such account debtor do not
               exceed twenty percent (20%) of all Eligible Accounts; </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%></TD>
               <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(xiv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               the account receivable constitutes Collateral in which the Lender has a First
               Priority Lien securing the Obligations of the Credit Parties under this
               Agreement; </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%></TD>
               <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(xv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               the Credit Parties have not made an agreement with the account debtor to extend
               the time of payment of the subject account receivable; </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%></TD>
               <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(xvi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               the account debtor is not located in Minnesota (or any other jurisdiction which
               adopts a statute or other requirement with respect to which any Person that
               obtains business from within such jurisdiction or is otherwise subject to such
               jurisdiction&#146;s tax law must file a &#147;Business Activity Report&#148; (or
               other applicable report) or make any other required filings in a timely manner
               in order to enforce its claims in such jurisdiction&#146;s courts or arising
               under such jurisdiction&#146;s laws); provided, that accounts receivable which
               would be Eligible Accounts but for the terms of this clause (xvi) shall
               nonetheless be deemed to be Eligible Accounts if the Credit Parties have filed a
               &#147;Business Activity Report&#148; (or other applicable report) with the
               applicable state office or are qualified to do business in such jurisdiction
               and, at the time the account receivable was created, was qualified to do
               business in such jurisdiction or had on file with the applicable state office a
               current &#147;Business Activity Report&#148; (or other applicable report); and </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Level 1" FSL="Default" -->
          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%></TD>
               <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(xvii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               the account receivable is denominated in U.S. Dollars; </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>
 <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD>
<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>provided, however</I>, that (A)
the Lender may, in its reasonable discretion, upon ten (10) calendar days notice to the
Borrower, exclude particular accounts from the definition of Eligible Accounts and impose
additional and/or more restrictive eligibility or valuation criteria than those set forth
above as preconditions for any account to be deemed to be an Eligible Account hereunder. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Eligible
Inventory</U>&#148; means inventory of the Borrower recorded on the books and records of
the Borrower in the ordinary course of the business operations of the Borrower valued on a
first in first out basis at the lower of (a) the fair market value of such inventory, or
(b) the cost charged by suppliers which are not Affiliates or Subsidiaries of the
Borrower, which inventory satisfies each of the following requirements: </FONT></P>
</TD>
               </TR>
               </TABLE>
<!-- MARKER FORMAT-SHEET="Para (List) Indent Level 1" FSL="Default" -->
          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%></TD>
               <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               is in good and merchantable condition or, as respects work in process, is
               incorporated in customer products being produced or provided by the Borrower; </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%></TD>
               <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               meets all standards imposed by any government agency having regulatory authority
               over such goods and/or their use, manufacture and/or sale; </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%></TD>
               <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               has been physically received in the continental United States by the Borrower
               and is located at a facility owned or leased by the Borrower; provided that no
               inventory located at a leased facility shall be deemed to be &#147;Eligible
               Inventory&#148; hereunder unless the landlord of such facility shall have
               entered into an agreement satisfactory in form and substance to the Lender
               acknowledging the Liens of the Lender and granting the Lender unrestricted
               access to such inventory; </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%></TD>
               <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               is currently useable or currently salable in the normal course of the business
               operations, or, as respects raw materials and work in process, is incorporated
               or is being held to be incorporated in customer products being produced or
               provided by the Borrower; </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%></TD>
               <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               does not constitute excess, obsolete, unsaleable, shopworn, seconds, damaged or
               unfit inventory; </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Level 1" FSL="Default" -->
          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%></TD>
               <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(vi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               has not remained in the possession of the Borrower for more than 365 days or has
               not otherwise been determined by the Lender in its sole discretion to constitute
               slow-moving inventory; </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%></TD>
               <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(vii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               does not arise from a sale to an account debtor on a bill-and-hold, guaranteed
               sale, sale-or-return, sale-on-approval, consignment or any other repurchase or
               return basis; </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Level 1" FSL="Default" -->
          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%></TD>
               <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(viii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               is not subject to any Lien of any kind except for the Lien of the Lender
               securing Obligations under this Agreement; </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%></TD>
               <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(ix)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               has not been sold to any Person; and </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%></TD>
               <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(x)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               constitutes Collateral in which the Lender has a First Priority Lien securing
               the obligations of the Credit Parties under this Agreement; </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD>
<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>provided, however</I>, that (A)
the aggregate amount of Eligible Inventory shall be computed net of such reserves for slow
moving and other ineligible inventory as the Lender shall reasonably deem appropriate, (B)
the Lender may in its reasonable discretion, upon ten (10) calendar days notice to the
Borrower, exclude particular items of inventory from the definition of Eligible Inventory
and may impose additional and/or more restrictive eligibility or valuation criteria than
those set forth above as preconditions for any item of inventory to be deemed to be
Eligible Inventory hereunder, and (C) inventory deemed to be Eligible Inventory at any one
point in time may be excluded by the Lender in its reasonable discretion, upon ten (10)
calendar days notice to the Borrower, at a future point in time. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Eligible
Finished Goods Inventory</U>&#148; means that portion of Eligible Inventory consisting of
finished goods. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Eligible
Raw Materials Inventory</U>&#148; means that portion of Eligible Inventory consisting of
raw materials. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Environmental
Laws</U>&#148; means all applicable laws, rules, regulations, codes, ordinances, orders,
decrees, judgments, injunctions, notices or binding agreements issued, promulgated or
entered into by any Governmental Authority, relating in any way to the environment,
preservation or reclamation of natural resources, the management, release or threatened
release of any Hazardous Material or to health and safety matters. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Environmental
Liability</U>&#148; means any liability, contingent or otherwise (including any liability
for damages, costs of environmental remediation, fines, penalties or indemnities), of any
Credit Party directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage, treatment
or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the
release or threatened release of any Hazardous Materials into the environment or (e) any
contract, agreement or other consensual arrangement pursuant to which liability is assumed
or imposed with respect to any of the foregoing. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Equity
Rights</U>&#148; means, with respect to any Person, any subscriptions, options, warrants,
commitments, preemptive rights or agreements of any kind (including any stockholders&#146;
or voting trust agreements) for the issuance or sale of, or securities convertible into,
any additional shares of capital stock of any class, or partnership or other ownership
interests of any type in, such Person. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>ERISA</U>&#148;
means the Employee Retirement Income Security Act of 1974, as amended from time to time. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>ERISA
Affiliate</U>&#148; means any trade or business (whether or not incorporated) that,
together with the Credit Parties, is treated as a single employer within the meaning of
Section&nbsp;414(b), (c), (m) or (o) of the Code. Notwithstanding the foregoing, for
purposes of any liability related to a Multiemployer Plan under Title IV of ERISA, the
term &#147;ERISA Affiliate&#148; means any trade or business that, together with the
Credit Parties, is treated as a single employer within the meaning of Section 4001(b) of
ERISA. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>ERISA
Event</U>&#148; means (a) a &#147;reportable event&#148;, as defined in Section&nbsp;4043
of ERISA or the regulations issued thereunder for which the notice requirement has not
been waived with respect to any Pension Plan, (b) the existence with respect to any
Pension Plan of an &#147;accumulated funding deficiency&#148; (as defined in
Section&nbsp;412 of the Code or Section&nbsp;302 of ERISA), whether or not waived, (c) the
filing pursuant to Section&nbsp;412(d) of the Code or Section&nbsp;303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any Pension Plan,
(d) the incurrence by any Credit Party or any ERISA Affiliate of any liability under Title
IV of ERISA with respect to the termination of any Pension Plan, (e) the receipt by any
Credit Party or any ERISA Affiliate from the PBGC or plan administrator of any notice
relating to an intention to terminate any Pension Plan or Pension Plans or to appoint a
trustee to administer any Pension Plan, or (f) the receipt by any Credit Party or any
ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from any Credit
Party or any ERISA Affiliate of any notice of Withdrawal Liability or a determination that
a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the
meaning of Title IV of ERISA. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Eurodollar</U>&#148;
when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans
comprising such Borrowing, are bearing interest at a rate determined by reference to the
Eurodollar Rate. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Eurodollar
Interest Period</U>&#148; means with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically corresponding day
in the calendar month that is one, two, three or six months thereafter, as the Borrower
may elect; <I>provided</I>, that (i) if any Eurodollar Interest Period would end on a day
other than a Business Day, such Eurodollar Interest Period shall be extended to the next
succeeding Business Day unless such next succeeding Business Day would fall in the next
calendar month, in which case such Eurodollar Interest Period shall end on the next
preceding Business Day and (ii) any Eurodollar Interest Period that commences on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the last calendar month of such Eurodollar Interest Period) shall end
on the last Business Day of the last calendar month of such Eurodollar Interest Period.
For purposes hereof, the date of a Borrowing initially shall be the date on which such
Borrowing is made and thereafter shall be the effective date of the most recent conversion
or continuation of such Borrowing. Notwithstanding the foregoing, if any Eurodollar
Interest Period for any Revolving Credit Borrowing would otherwise end after the Revolving
Credit Maturity Date, such Eurodollar Interest Period shall end on the Revolving Credit
Maturity Date. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Eurodollar
Rate</U>&#148; means, with respect to any Eurodollar Borrowing for any Eurodollar Interest
Period, the rate appearing on Dow Jones Markets Page 3750 (or on any successor or
substitute page of such Service, or any successor to or substitute for such Service,
providing rate quotations comparable to those currently provided on such page of such
Service, as determined by the Lender from time to time for purposes of providing
quotations of interest rates applicable to U.S. dollar deposits in the London interbank
market) at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Eurodollar Interest Period, as the rate for U.S. dollar deposits with
a maturity comparable to such Eurodollar Interest Period. In the event that such rate is
not available at such time for any reason, then the &#147;<U>Eurodollar Rate</U>&#148;
with respect to such Eurodollar Borrowing for such Eurodollar Interest Period shall be the
average of the rates at which U.S. dollar deposits of $5,000,000, and for a maturity
comparable to such Eurodollar Interest Period, are offered by four major banks in the
London interbank market as selected by the Lender in immediately available funds in the
London interbank market at approximately 11:00&nbsp;a.m., London time, two Business Days
prior to the commencement of such Eurodollar Interest Period. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Eurodollar
Request</U>&#148; means a written request signed by a Designated Financial Officer for the
conversion of Base Rate Loans into Eurodollar Loans or for the continuation of an existing
Eurodollar Loan for an additional Eurodollar Interest Period in accordance with
Section&nbsp;2.3, in substantially the form of <U>Exhibit B-4</U> annexed hereto. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Event
of Default</U>&#148; has the meaning assigned to such term in Section&nbsp;9.1. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Excess
Availability</U>&#148; means, as of any date of determination thereof, the difference
between (a) the lesser of (i) the Revolving Credit Commitment at such time and (ii) the
Borrowing Base at such time, and (b) the Revolving Credit Exposure at such time. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Excluded
Taxes</U>&#148; means, with respect to the Lender, the Issuing Lender or any other
recipient of any payment to be made by or on account of any Obligation hereunder, (a)
income, net worth or franchise taxes imposed on (or measured by) its net income or net
worth by the United States of America, or by the jurisdiction under the laws of which such
recipient is organized or in which its principal office is located or, in the case of the
Lender, in which its lending office is located or in which it is taxable solely on account
of some connection other than the execution, delivery or performance of this Agreement or
the receipt of income hereunder, and (b) any branch profits taxes imposed by the United
States of America or any similar tax imposed by any other jurisdiction in which the
Borrower is located. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Existing
Debt</U>&#148; means (i) Indebtedness of the Credit Parties existing as of the Effective
Time which is being repaid in full with the proceeds of the Loans made by the Lender at
the Effective Time and (ii) Indebtedness of the Credit Parties and the Foreign Subsidiary
existing as of the Effective Time which is permitted to remain outstanding after the
Effective Time under Section 8.1 and is listed on <U>Schedule 8.1</U> hereto. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Federal
Funds Effective Rate</U>&#148; means, for any day, the weighted average (rounded upwards,
if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal funds brokers,
as published on the next succeeding Business Day by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day that is a Business Day, the average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day
for such transactions received by the Lender from three Federal funds brokers of
recognized standing selected by it. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>First
Priority</U>&#148; means, with respect to any Lien purported to be created in any
Collateral pursuant to any Collateral Document, that such Lien is the most senior Lien
(other than Permitted Liens) to which such Collateral is subject. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Foreign
Subsidiary</U>&#148; shall mean KVH Europe A/S, a Danish corporation. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>FX
Daily Delivery Reserve</U>&#148; means, as of the Closing Date, $100,000.00, as such
amount may be adjusted from time to time in the Lender&#146;s sole discretion. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>FX
Pre-settlement Reserve</U>&#148; means, as of the Closing Date, $400,000.00, as such
amount may be adjusted from time to time in the Lender&#146;s sole discretion. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>GAAP</U>&#148;
means generally accepted accounting principles in the United States of America. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Governmental
Authority</U>&#148; means the government of the United States of America, any other nation
or any political subdivision thereof, whether state or local, and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Guarantee</U>&#148;
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&#146;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. The terms &#147;<U>Guarantee</U>&#148; and
&#147;<U>Guaranteed</U>&#148; used as a verb shall have a correlative meaning. The amount
of any Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligations in respect of which such Guarantee is made or, if not
stated or determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Guarantor</U>&#148;
means any Person, which becomes a guarantor hereunder after the Effective Time. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Hazardous
Materials</U>&#148; means all explosive or radioactive substances or wastes and all
hazardous or toxic substances, wastes or other pollutants, including petroleum or
petroleum distillates, asbestos or asbestos containing materials, polychlorinated
biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of
any nature, in each case regulated or subject to regulation pursuant to any Environmental
Law. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Hedging
Agreement</U>&#148; 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. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Indebtedness</U>&#148;
means, for any Person, without duplication: (a) obligations created, issued or incurred by
such Person for borrowed money (whether by loan, advance, 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 trade accounts payable (other than for borrowed money) arising,
and accrued expenses and deferred taxes incurred and paid, in the ordinary course of
business; (c) Capital Lease Obligations of such Person; (d) obligations of such Person in
respect of Hedging Agreements; and (e) obligations of such Person in respect of letters of
credit or similar instruments issued or accepted by banks and other financial institutions
for the account of such Person. The Indebtedness of any Person shall include the
Indebtedness of any other entity (including any partnership in which such Person is a
general partner) to the extent such Person is liable therefor as a result of such
Person&#146;s ownership interest in or other relationship with such entity, except to the
extent the terms of such Indebtedness provide that such Person is not liable therefor. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Indemnified
Taxes</U>&#148; means all Taxes other than (a) Excluded Taxes and Other Taxes and (b)
amounts constituting penalties or interest imposed with respect to Excluded Taxes or Other
Taxes. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Intercompany
Indebtedness</U>&#148; has the meaning assigned to such term in Section 10.9. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Investment</U>&#148;
means, for any Person: (a) the acquisition (whether for cash, Property, services or
securities or otherwise) of capital stock, bonds, notes, debentures, partnership, limited
liability company or other ownership interests or other securities of any other Person or
any agreement to make any such acquisition (including, without limitation, any &#147;short
sale&#148; or any sale of any securities at a time when such securities are not owned by
the Person entering into such short sale); (b) the making of any deposit with, or advance,
loan or other extension of credit to, any other 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 representing the purchase price of inventory or supplies sold by such Person in the
ordinary course of business provided that in no event shall the term of any such inventory
or supply advance, loan or extension of credit exceed 180 days); or (c) the entering into
of any Guarantee of, or other contingent obligation with respect to, Indebtedness or other
liability of any other Person and (without duplication) any amount committed to be
advanced, lent or extended to such Person. Notwithstanding the foregoing, Capital
Expenditures shall not be deemed &#147;<U>Investments</U>&#148; for purposes hereof. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Issuing
Lender</U>&#148; means Fleet National Bank, an affiliate of the Lender, in its capacity as
an issuer of Letters of Credit hereunder. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Landlord&#146;s
Waiver and Consent</U>&#148; means, with respect to any Leasehold Property, a letter,
certificate or other instrument in writing from the lessor under the related lease, in
form approved by the Lender in its sole discretion, including, without limitation, the
Landlord Waiver and Consent entered into as of July, 2003, with respect to each of the
Tinley Park, Illinois property and the St. Petersburg, Florida property. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>LC
Disbursement</U>&#148; means a payment made by the Issuing Lender pursuant to a Letter of
Credit. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>LC
Sublimit</U>&#148; means a sublimit of the Revolving Credit Commitment available for the
issuance of Letters of Credit for the account of the Borrower in an aggregate maximum
amount available to be drawn equal to $1,000,000. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Leasehold
Property</U>&#148; means any leasehold interest of any Credit Party as lessee under any
lease of real property, other than any such leasehold interest designated from time to
time by the Lender in its sole discretion as not being required to be included in the
Collateral and not being of material importance to the business or operations of the
Credit Parties. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Lender</U>&#148;
means Fleet Capital Corporation or any other party which becomes a lender hereunder. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Letter
of Credit</U>&#148; means any letter of credit issued on a standby basis or in support of
trade obligations of the Borrower pursuant to this Agreement. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Lien</U>&#148;
means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge,
hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the
interest of a vendor or a lessor under any conditional sale agreement, capital lease or
title retention agreement (or any financing lease having substantially the same economic
effect as any of the foregoing), other than an operating lease, relating to such asset and
(c) in the case of securities, any purchase option, call or similar right of a third party
with respect to such securities. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Loan
Documents</U>&#148; means this Agreement, the Revolving Credit Note, the Omnibus
Amendment, the Negative Pledge Agreements, Mortgagee Waiver and Consent, Landlord&#146;s
Waivers and Consents, the Assignment Regarding Federal Contracts, the UCC Financing
Statements, the Dominion Account Agreement, the Letters of Credit and any other
instruments or documents executed and delivered or to be delivered to the Lender from time
to time pursuant to this Agreement, as the same may be supplemented and amended from time
to time in accordance with their respective terms. </FONT></P>

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<A NAME=A021></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Loans&#148;
means the Revolving Loans.</I> </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Material
Adverse Effect</U>&#148; means, any event, circumstance, happening or condition, which, in
the Lender&#146;s reasonable discretion, has resulted or could reasonably result in a
material adverse effect on (a) the business, assets, financial condition or prospects of
the Credit Parties taken as a whole, (b) the ability of any Credit Party to pay or perform
any of its obligations under this Agreement or the other Loan Documents or (c) any of the
rights of or benefits available to the Lender under this Agreement and the other Loan
Documents. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Material
Indebtedness</U>&#148; means Indebtedness (other than the Loans or Letters of Credit),
including, without limitation, obligations in respect of one or more Hedging Agreements,
in an aggregate principal amount exceeding $500,000. For purposes of determining Material
Indebtedness, the &#147;principal amount&#148; of the obligations of any Person in respect
of a Hedging Agreement at any time shall be the maximum aggregate amount (giving effect to
any netting agreements) that such Person would be required to pay if such Hedging
Agreement were terminated at such time. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Material
Leasehold Property</U>&#148; means a Leasehold Property reasonably determined by the
Lender to be of material value as Collateral or of material importance to the operations
of the Credit Parties. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Material
Owned Property</U>&#148; means any real property owned by any Credit Party that is
reasonably determined by the Lender to be of material value as Collateral or of material
importance to the operations of the Credit Parties following the Closing Date. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Material
Rental Obligations</U>&#148; means obligations of the Credit Parties to pay rent under any
one or more operating leases with respect to any real or personal property that is
material to the business of the Credit Parties. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Merchant
Service Line of Credit Reserve</U>&#148; means, as of the Closing Date, $100,000.00, as
such amount may be adjusted from time to time in the Lender&#146;s sole discretion. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Mortgage</U>&#148;
means a security instrument (whether designated as a deed of trust or a mortgage,
leasehold mortgage, assignment of leases and rents or by any similar title) executed and
delivered by any Credit Party in such form as may be approved by the Lender in its sole
and reasonable discretion, in each case with such changes thereto as may be recommended by
the Lender&#146;s local counsel based on local laws or customary local practices, as such
security instrument or amendment may be amended, supplemented or otherwise modified from
time to time. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Mortgaged
Property</U>&#148; means any Real Property Asset that is now owned or leased, or acquired
after the date hereof, by any Credit Party with respect to which the Lender requires such
Credit Party to grant a Mortgage in favor of the Lender following the Closing Date. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Mortgagee
Waiver and Consent</U>&#148; means that certain Mortgagee Waiver and Consent for 50
Enterprise Center, Middletown, Rhode Island, by IDS Life Insurance Company in favor of the
Lender and acknowledged by the Borrower, dated as of July, 2003. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Multiemployer
Plan</U>&#148; means a multiemployer plan as defined in Section&nbsp;4001(a)(3) of ERISA. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Negative
Pledge Agreements</U>&#148; means those certain Negative Pledge Agreement &#150; Patents
and Negative Pledge Agreement &#150; Trademarks, each dated as of March 27, 2000, by and
between the Borrower and the Lender, as amended by that certain first amendment dated as
of July 17, 2003, as each may be amended, restated, modified or supplemented from time to
time. </FONT></P>

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<A NAME=A022></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Net
Cash Payments&#148; means,</I> </FONT></P>
</TD>
               </TR>
               </TABLE>
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          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%></TD>
               <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               with respect to any Casualty Event, the aggregate amount of cash proceeds of
               insurance, condemnation awards and other compensation received by the Credit
               Parties in respect of such Casualty Event net of (i) reasonable expenses
               incurred by the Credit Parties in connection therewith and (ii) contractually
               required repayments of Indebtedness to the extent secured by a Lien on such
               property and (iii) any income and transfer taxes payable by the Credit Parties
               in respect of such Casualty Event; </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%></TD>
               <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               with respect to any Disposition, the aggregate amount of all cash payments
               received by the Credit Parties directly or indirectly in connection with such
               Disposition, whether at the time of such Disposition or after such Disposition
               under deferred payment arrangements or Investments entered into or received in
               connection with such Disposition, net of (i) the amount of any legal, title,
               transfer and recording tax expenses, commissions and other fees and expenses
               payable by the Credit Parties in connection therewith, (ii) any Federal, state
               and local income or other Taxes estimated to be payable by the Credit Parties as
               a result thereof, (iii) any repayments by the Credit Parties of Indebtedness to
               the extent that such Indebtedness is secured by a Lien on the property that is
               the subject of such Disposition and 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, and (iv) any repayments by the Credit Parties to
               minority stockholders if and to the extent permitted hereby; and </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%></TD>
               <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               with respect to any incurrence of Indebtedness or offering of equity securities,
               the aggregate amount of all cash proceeds received by the Credit Parties
               therefrom less all legal, underwriting and similar fees and expenses incurred in
               connection therewith. </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Obligations</U>&#148;
means (a) the aggregate outstanding principal balance of and all interest on the Loans
made by the Lender to the Borrower (including any interest accruing after the commencement
of any proceeding by or against the Borrower under the federal bankruptcy laws, as now or
hereafter constituted, or any other applicable federal or state bankruptcy, insolvency or
other similar law, and any other interest that would have accrued but for the commencement
of such proceeding, whether or not any such interest is allowed as a claim enforceable
against the Borrower in any such proceeding), and (b) all LC Disbursements, overdraft
obligations, fees, costs, charges, expenses and other obligations from time to time owing
to the Lender, the Issuing Lender, the Cash Management Bank, or any other Affiliate of the
Lender by the Credit Parties hereunder or under any other Loan Document or in respect of
any Hedging Agreement, cash management agreement, operating or deposit account, or other
banking product from time to time made available to the Credit Parties by the Lender, the
Issuing Lender, the Cash Management Bank or any other Affiliate of the Lender. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Omnibus
Amendment</U>&#148; shall mean that certain Amendment Regarding the Negative Pledge
Agreements, Assignments Regarding Federal Contracts, Dominion Account Agreement, the
Letters of Credit, this Agreement, the UCC Financing Statements and any other agreements
and instruments referred to therein. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Other
Taxes</U>&#148; means any and all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any payment made
hereunder or from the execution, delivery or enforcement of, or otherwise with respect to,
this Agreement and the other Loan Documents, <I>provided</I> that there shall be excluded
from &#147;Other Taxes&#148; all Excluded Taxes. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Participant</U>&#148;
shall have the meaning ascribed to it in Section 10.4(b) hereof. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Patents</U>&#148;
means all patents issued or assigned to and all patent applications made by the Credit
Parties and, to the extent that the grant of a security interest does not cause a breach
or termination thereof, all exclusive and nonexclusive licenses to the Credit Parties from
third parties or rights to use patents owned by such third parties, including, without
limitation, the patents, patent applications and licenses listed on <U>Schedule 5.5</U>
hereto, along with any and all (a) inventions and improvements described and claimed
therein, (b) reissues, divisions, continuations, extensions and continuations-in-part
thereof, (c) income, royalties, damages, claims and payments now and hereafter due and/or
payable under and with respect thereto, including, without limitation, damages and
payments for past or future infringements thereof, (d) rights to sue for past, present and
future infringements thereof, and (e) any other rights corresponding thereto throughout
the world. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Pension
Plan</U>&#148; means any Plan that is a defined benefit pension plan subject to the
provisions of Title IV of ERISA or Section&nbsp;412 of the Code or Section&nbsp;302 of
ERISA, and in respect of which any Credit Party or any ERISA Affiliate is (or, if such
plan were terminated, would under Section&nbsp;4069 of ERISA be deemed to be) an
&#147;employer&#148; as defined in Section&nbsp;3(5) of ERISA. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Permanent
Availability Reserve</U>&#148; means, as of the Closing Date, Excess Availability in the
amount of $500,000.00, as such amount may be adjusted from time to time in the
Lender&#146;s sole discretion. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Permitted
Acquisitions</U>&#148; means any acquisition by any Credit Party of assets or outstanding
equity interests of any Person (other than another Credit Party), if all the following
conditions are met: </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)......no
Default or Event of Default then exists or would result therefrom (including giving
<U>pro</U> <U>forma</U> effect to such acquisition and any additional Indebtedness
resulting therefrom or incurred or assumed in connection therewith as if such acquisition
had occurred and such Indebtedness had been incurred as of the first day of the most
recently completed fiscal quarter of the Credit Parties (including any other Permitted
Acquisition that occurred, and related Indebtedness that was incurred, during such fiscal
quarter)); </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)......such
Person (or the assets so acquired) was, immediately prior to such acquisition, engaged (or
used) primarily in the business permitted pursuant to Section 8.10; </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)......if
such acquisition is structured as a stock or other equity acquisition, then either (i) the
Person so acquired becomes (x) a Subsidiary of a Credit Party and (y) a Guarantor or (ii)
such Person is merged with and into a Credit Party (with such Credit Party being the
surviving corporation of such merger) and, in any event, all of the assets of such Person
shall become Collateral; </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)......any
Liens or Indebtedness assumed or issued in connection with such acquisition is otherwise
permitted under Section 8.1 or 8.2, as the case may be; </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)......the
Lender shall have a valid, perfected, First Priority security interest in all of the
properties and assets being acquired by such Credit Party, subject to Permitted Liens
pursuant to Section 8.2 hereof; </FONT></P>

         (f)......after giving effect thereto, Excess Availability would be at least $2,500,000;

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)......any
such Permitted Acquisition (or series of related Permitted Acquisitions) involving total
consideration (including, without limitation, any earn-out, non-compete or deferred
compensation arrangements, the value of any securities issued by any Credit Party and any
cash) by the Credit Parties in excess of $20,000,000 in the aggregate in any fiscal year
shall not be consummated without the prior written consent of the Lender; </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)......all
transactions related thereto are consummated in compliance, in all material respects, with
applicable laws and regulations; </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)......the
Borrowers shall have delivered to the Agent a certificate of a Designated Financial
Officer of the Borrowers showing compliance (in reasonable detail as to <U>pro</U>
<U>forma</U> calculations) with all of the provisions of this definition; and </FONT></P>

         (j)......the acquisition is not a hostile acquisition.

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<A NAME=A023></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Permitted
Investments&#148; means:</I> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)......direct
obligations of, or obligations the principal of and interest on which are unconditionally
guaranteed by, the United States of America (or by any agency thereof to the extent such
obligations are backed by the full faith and credit of the United States of America), in
each case maturing within one year from the date of acquisition thereof; </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)......investments
in commercial paper maturing within 270 days from the date of acquisition thereof and
having, at such date of acquisition, the highest credit rating obtainable from Standard
and Poor&#146;s Ratings Service or from Moody&#146;s Investors Service, Inc.; </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)......investments
in certificates of deposit, banker&#146;s acceptances and time deposits maturing within
210 days from the date of acquisition thereof issued or guaranteed by or placed with, and
money market deposit accounts issued or offered by, any domestic office of any commercial
bank organized under the laws of the United States of America or any State thereof which
has a combined capital and surplus and undivided profits of not less than $250,000,000; </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)......fully
collateralized repurchase agreements with a term of not more than thirty (30) days for
securities described in clause (a) above and entered into with a financial institution
satisfying the criteria described in clause (c) above; </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)......advances,
loans and extensions of credit to any director, officer or employee of the Credit Parties,
if the aggregate outstanding amount of all such advances, loans and extensions of credit
(excluding travel advances in the ordinary course of business) does not at any time exceed
$100,000.00; and </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)......investments
in money market mutual funds that are rated AAA by Standard &amp; Poor&#146;s Rating
Service. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Permitted
Liens</U>&#148; has the meaning set forth in Section 8.2. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Person</U>&#148;
means any natural person, corporation, limited liability company, trust, joint venture,
association, company, partnership, Governmental Authority or other entity. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Plan</U>&#148;
means any employee benefit plan within the meaning of Section&nbsp;3(3) of ERISA in which
any Credit Party or any ERISA Affiliate is an &#147;employer&#148; as defined in
Section&nbsp;3(5) of ERISA, including, but not limited to, any Pension Plan or
Multiemployer Plan. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Post-Default
Rate</U>&#148; means, a rate per annum equal to the Adjusted Base Rate <U>plus</U> the
Applicable Margin <U>plus</U> three percent (3%). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Prime
Rate</U>&#148; means the rate of interest per annum publicly announced from time to time
by Fleet National Bank, as its prime rate for commercial loans in effect at its principal
office in Boston, Massachusetts, which rate is not necessarily the lowest rate charged by
Fleet National Bank to its most preferred customers; each change in the Prime Rate shall
be effective from and including the date such change is publicly announced as being
effective. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Property</U>&#148;
means any interest of any kind in property or assets, whether real, personal or mixed, and
whether tangible or intangible. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Proprietary
Rights</U>&#148; has the meaning assigned to such term in Section 5.5(b). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>PTO</U>&#148;
means the United States Patent and Trademark Office or any successor or substitute office
in which filings are necessary or, in the opinion of the Lender, desirable in order to
create or perfect Liens on any intellectual property, as applicable. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Real
Property Asset</U>&#148; means, at any time of determination, any and all real property
owned or leased by the Credit Parties. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Registered
Proprietary Rights</U>&#148; has the meaning assigned to such term in Section 5.5(c). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Reimbursement
Obligation</U>&#148; has the meaning assigned to such term in Section 2.3(d). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Related
Parties</U>&#148; means, with respect to any specified Person, such Person&#146;s
Affiliates and the respective directors, officers, employees, agents and advisors of such
Person and such Person&#146;s Affiliates. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Restricted
Junior Payment</U>&#148; means (i) any dividend or other distribution, direct or indirect,
on account of any shares of any class of stock of, or other equity interest in, any Credit
Party or any Subsidiary now or hereafter outstanding, except a dividend payable solely in
shares of stock or other equity interests, (ii) any redemption, retirement, sinking fund
or similar payment, purchase or other acquisition for value, direct or indirect, of any
shares of any class of stock of, or other equity interest in, any Credit Party or any
Subsidiary now or hereafter outstanding, except shares of the Borrower surrendered by
holders in connection with the exercise by the holders of stock options, (iii) any payment
made to retire, or to obtain the surrender of, any outstanding warrants, options or other
rights to acquire shares of any class of stock of, or other equity interest in, any Credit
Party or any Subsidiary, (iv) any payment or prepayment of principal of, premium, if any,
or interest on, or redemption purchase, retirement, defeasance (including economic or
legal defeasance), sinking fund or similar payment with respect to, any Subordinated
Indebtedness, and (v) any payment made to any Affiliates, any Credit Party or any
Subsidiary in respect of management, consulting or other similar services provided to any
Credit Party or any Subsidiary. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Restrictive
Agreements</U>&#148; has the meaning assigned to such term in Section&nbsp;5.13(b). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Revolving
Credit Availability Period</U>&#148; means the period from and including the Effective
Time to but excluding the earlier of (a) the Revolving Credit Maturity Date and (b) the
date of termination of the Revolving Credit Commitment, as terminated by the Borrower
pursuant to Section 2.7 or by the Lender pursuant to Section 9.1. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Revolving
Credit Commitment</U>&#148; means the commitment of the Lender to make Revolving Loans as
such commitment may be reduced from time to time pursuant to Section 2.5. The original
maximum amount of the Revolving Credit Commitment is equal to $15,000,000.00. Solely for
the purpose of computing the Unused Fee pursuant to Section 2.7 hereof, the
&#147;Revolving Credit Commitment&#148; shall be deemed to be $10,000,000.00. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Revolving
Credit Exposure</U>&#148; means at any time the sum of (a) the outstanding principal
amount of Revolving Loans at such time and (b) the Total LC Exposure at such time. </FONT></P>

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<A NAME=A024></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Revolving
Credit Maturity Date&#148; means July 17, 2006.</I> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Revolving
Credit Note</U>&#148; means the promissory note, substantially in the form of <U>Exhibit
A</U> annexed hereto, issued by the Borrower in favor of the Lender. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Revolving
Loan</U>&#148; means a Loan made pursuant to Section&nbsp;2.1(a) that utilizes the
Revolving Credit Commitment. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Special
Counsel</U>&#148; means Goulston &amp; Storrs, P.C., in its capacity as special counsel to
Fleet Capital Corporation, as Lender of the credit facilities contemplated hereby. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Subsidiary</U>&#148;
means, with respect to any Person (the &#147;<U>parent</U>&#148;) at any date, any
corporation, limited liability company, partnership, association or other entity the
accounts of which would be consolidated with those of the parent in the parent&#146;s
consolidated financial statements if such financial statements were prepared in accordance
with GAAP as of such date, as well as any other corporation, limited liability company,
partnership, association or other entity (a) of which securities or other ownership
interests representing more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such date,
owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the
parent and/or one or more subsidiaries of the parent. References herein to
&#147;<U>Subsidiaries</U>&#148; shall, unless the context requires otherwise, be deemed to
be references to Subsidiaries of the Borrower. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Taxes</U>&#148;
means any and all present or future taxes, levies, imposts, duties, deductions, charges or
withholdings imposed by any Governmental Authority. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Total
Gross Availability</U>&#148; means, at any time, the lesser of (i) the Borrowing Base at
such time and (ii) the Revolving Credit Commitment at such time. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Total
LC Exposure</U>&#148; means, at any time, the sum of (a) 100% of the aggregate undrawn
amount of all outstanding standby and documentary Letters of Credit at such time
<U>plus</U> (b) the aggregate amount of all LC Disbursements that have not yet been
reimbursed by or on behalf of the Borrower at such time. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Total
Voting Power</U>&#148; means, with respect to any Person, the total number of votes which
holders of securities having the ordinary power to vote, in the absence of contingencies,
are entitled to cast in the election of directors of such Person. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Trademarks</U>&#148;
means all trademarks (including service marks), federal and state trademark registrations
and applications made by the Credit Parties, common law trademarks and trade names owned
by or assigned to the Credit Parties, all registrations and applications for the foregoing
and all exclusive and nonexclusive licenses from third parties of the right to use
trademarks of such third parties, including, without limitation, the registrations,
applications, unregistered trademarks, service marks and licenses listed on <U>Schedule
5.5</U> hereto, along with any and all (a) renewals thereof, (b) income, royalties,
damages and payments now and hereafter due and/or payable with respect thereto, including,
without limitation, damages, claims and payments for past or future infringements thereof,
(c) rights to sue for past, present and future infringements thereof, and (d) foreign
trademarks, trademark registrations, and trade name applications for any thereof and any
other rights corresponding thereto throughout the world. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Type</U>&#148;
when used in reference to any Loan or Borrowing, refers to whether the rate of interest on
such Loan, or on the Loans comprising such Borrowing, is determined by reference to the
Eurodollar Rate or the Adjusted Base Rate. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>UCC</U>&#148;
means the Uniform Commercial Code (or any similar or equivalent legislation) as in effect
in any applicable jurisdiction. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>UCC
Financing Statements</U>&#148; means any of the UCC financing statements filed by the
Lender as secured party against any Credit Party as debtor in connection with this
Agreement and the Existing Agreement. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>U.S.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Dollars</U>&#148; or &#147;<U>$</U>&#148; refers to lawful money of the United
          States of America. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Wholly
Owned Subsidiary</U>&#148; means, with respect to any Person at any date, any corporation,
limited liability company, partnership, association or other entity of which securities or
other ownership interests representing 100% of the equity or ordinary voting power (other
than directors&#146; qualifying shares) or, in the case of a partnership, 100% of the
general partnership interests are, as of such date, directly or indirectly owned,
controlled or held 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. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Withdrawal
Liability</U>&#148; means liability to a Multiemployer Plan as a result of a complete or
partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of
Subtitle E of Title IV of ERISA. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.2 <B>Terms Generally</B>. The
definitions of terms herein shall apply equally to the singular and plural forms of the
terms defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words &#147;include&#148;,
&#147;includes&#148; and &#147;including&#148; shall be deemed to be followed by the
phrase &#147;without limitation&#148;. The word &#147;will&#148; shall be construed to
have the same meaning and effect as the word &#147;shall&#148;. Unless the context
requires otherwise (a) any definition of or reference to any agreement, instrument or
other document herein shall be construed as referring to such agreement, instrument or
other document as from time to time amended, supplemented or otherwise modified (subject
to any restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such Person&#146;s
successors and assigns, (c) the words &#147;herein&#148;, &#147;hereof&#148; and
&#147;hereunder&#148;, and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all references
herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
&#147;asset&#148; and &#147;property&#148; shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.3 <B>Accounting Terms; GAAP</B>.
Except as otherwise expressly provided herein, all terms of an accounting or financial
nature shall be construed in accordance with GAAP, as in effect from time to time;
<I>provided</I> that, if the Borrower notifies the Lender that the Borrower requests an
amendment to any provision hereof to eliminate the effect of any change occurring after
the date hereof in GAAP or in the application thereof on the operation of such provision
(or if the Lender notifies the Borrower that the Lender requests an amendment to any
provision hereof for such purpose), regardless of whether any such notice is given before
or after such change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before such change
shall have become effective until such notice shall have been withdrawn or such provision
shall have been amended in accordance herewith. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.4 <B>Designated Financial
Officers</B>.&nbsp;&nbsp;Each Credit Party hereby authorizes each of the Designated
Financial Officers listed in <U>Schedule 1.4</U> hereto to act as agent for each Credit
Party and to execute and deliver on behalf of each Credit Party such notices, requests,
waivers, consents, certificates and other documents, and to take any and all actions
required or permitted to be delivered or taken by any Credit Party hereunder. The Borrower
may replace any of the Designated Financial Officers listed in <U>Schedule 1.4 </U>hereto
or add any additional Designated Financial Officers by delivering written notice to the
Lender specifying the names of each new Designated Financial Officer and the offices held
by each such Person. Each Credit Party hereby agrees that any such notices, requests,
waivers, consents, certificates and other documents executed, delivered or sent by any
Designated Financial Officer and any such actions taken by any Designated Financial
Officer shall bind each Credit Party. </FONT></P>

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<A NAME=A025></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>ARTICLE 2......... </FONT></H1>

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<A NAME=A026></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>The Credits </FONT></H1>

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<A NAME=A027></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>2.1 Revolving Loans. </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)......<U>Revolving
Credit Commitment</U>. Subject to the terms and conditions set forth herein, the Lender
agrees to make Revolving Loans to the Borrower from time to time during the Revolving
Credit Availability Period in an aggregate principal amount that will not result in the
Revolving Credit Exposure exceeding the lesser of (i) the Revolving Credit Commitment at
such time and (ii) the Borrowing Base at such time. Within the foregoing limits and
subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and
reborrow Revolving Loans. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)......<U>Funding
of Revolving Loans</U>. To request the funding of any Revolving Loan hereunder, the
Borrower shall deliver to the Lender not later than 1:00 p.m., Boston, Massachusetts time,
by facsimile or electronic mail transmission, an Advance Request in substantially the form
of Exhibit B-5 hereto, and setting forth all of the information required to be set forth
therein including, without limitation, the Total Gross Availability as set forth in the
most recent Collateral Update Certificate/Borrowing Base Certificate delivered to Lender,
and the amount of the Advance requested. Upon receipt of such Advance Request and provided
that no Default or Event of Default shall have occurred and be continuing or shall result
therefrom, not later than 3:30 p.m. Boston, Massachusetts time on the date such Advance
Request is delivered to the Lender, the Lender shall make a Revolving Loan to the Borrower
in an amount equal to the amount set forth in such Advance Request by crediting such
amount to one or more accounts of the Borrower maintained with the Lender; provided that
Revolving Loans made to finance the reimbursement of an LC Disbursement under any Letter
of Credit as provided in Section&nbsp;2.3(e) shall be remitted by the Lender to the
Issuing Lender. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)......<U>Interest
on Revolving Loans</U>. Subject to Section 2.2 hereof, each Revolving Loan made to the
Borrower by Lender hereunder shall bear interest at a rate per annum equal to the Adjusted
Base Rate plus the Applicable Margin. Notwithstanding the foregoing, (i) all Revolving
Loans which are not paid when due shall automatically bear interest until paid in full at
the Post-Default Rate, (ii) during the period when any Event of Default of the type
described in clauses&nbsp;(g), (h) or (i) of Section&nbsp;9.1 shall have occurred and be
continuing, the principal of all Revolving Loans hereunder shall automatically bear
interest, after as well as before judgment, at the Post-Default Rate, (iii)&nbsp;if there
shall occur and be continuing any Event of Default (other than an Event of Default of the
type described in clauses&nbsp;(g), (h) or (i) of Section&nbsp;9.1), following written
notice delivered to the Borrower from the Lender, the principal of all Revolving Loans
hereunder shall bear interest, after as well as before judgment, at the Post-Default Rate
during the period beginning on the date such Event of Default first occurred, and ending
on the date such Event of Default is cured or waived. Accrued interest on each Revolving
Loan shall be payable in arrears on the first day of each month; <I>provided</I> that
interest accrued at the Post-Default Rate shall be payable on demand, and all accrued
interest on Revolving Loans shall be payable upon expiration of the Revolving Credit
Availability Period. All interest hereunder shall be computed on the basis of a year of
360 days, and in each case shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)......<U>Repayment
of Revolving Loans</U>. The Borrower unconditionally promises to pay to the Lender the
then unpaid principal amount of the Revolving Loans on the Revolving Credit Maturity Date.
In addition, if following any reduction in the Revolving Credit Commitment or at any other
time the Revolving Credit Exposure shall exceed the lesser of (i) the Revolving Credit
Commitment at such time, or (ii) the Borrowing Base at such time, the Borrower shall
first, repay Revolving Loans in an aggregate amount equal to such excess, and second,
provide cash collateral for Total LC Exposure as specified in Section&nbsp;2.3(g) in an
aggregate amount equal to such excess. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)......<U>Loan
Account</U>. The Lender shall maintain in accordance with its usual practice an account
evidencing the indebtedness of the Borrower to the Lender resulting from each Revolving
Loan made by the Lender, including the amounts of principal and interest payable and paid
to the Lender from time to time hereunder. The entries made in the account maintained
pursuant to this subsection 2.1(e) shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; <I>provided</I> that the failure of the
Lender to maintain such account or any error therein shall not in any manner affect the
obligation of the Borrower to repay the Revolving Loans in accordance with the terms of
this Agreement. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)......<U>Revolving
Credit Note</U>. Prior to the Closing Date, the Borrower shall prepare, execute and
deliver to the Lender the Amended and Restated Revolving Credit Note in the principal
amount of the Revolving Credit Commitment. </FONT></P>

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<A NAME=A028></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>2.2 Eurodollar
Borrowings. </FONT></H1>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)......<U>General</U>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Each Revolving Loan initially shall be a Base Rate Loan. Thereafter, the
          Borrower may elect to convert any portion of the outstanding Revolving Loans to
          a Eurodollar Borrowing. The Borrower may elect different options for
          continuations and conversions with respect to different portions of the affected
          Borrowing, in which case the Loans comprising each such portion shall be
          considered a separate Borrowing. The Borrower shall not be permitted to select
          any Eurodollar Interest Period for any Eurodollar Borrowing that ends after the
          Revolving Credit Maturity Date. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)......<U>Interest
on Eurodollar Borrowings</U>. Each Eurodollar Borrowing shall bear interest during the
applicable Eurodollar Interest Period at a rate per annum equal to the Eurodollar Rate
plus the Applicable Margin. Notwithstanding the foregoing, (i) all Eurodollar Borrowings
which are not paid when due shall automatically be converted into Base Rate Borrowings and
shall bear interest until paid in full at the Post-Default Rate, (ii) during the period
when any Event of Default of the type described in clauses&nbsp;(g), (h) or (i) of
Section&nbsp;9.1 shall have occurred and be continuing, all Eurodollar Borrowings shall
automatically be converted into Base Rate Borrowings and shall bear interest, after as
well as before judgment, at the Post-Default Rate, (iii)&nbsp;if there shall occur and be
continuing any Event of Default (other than an Event of Default of the type described in
clauses&nbsp;(g), (h) or (i) of Section&nbsp;9.1), following written notice delivered to
the Borrower from the Lender, all Eurodollar Borrowings shall automatically be converted
into Base Rate Borrowings and shall bear interest, after as well as before judgment, at
the Post-Default Rate during the period beginning on the date such Event of Default first
occurred, and ending on the date such Event of Default is cured or waived. Accrued
interest on each Eurodollar Borrowing shall be payable in arrears on the first day of each
month and on the last Business Day of the Eurodollar Interest Period applicable to such
Eurodollar Borrowing; <I>provided</I> that interest accrued at the Post-Default Rate shall
be payable on demand. All interest hereunder shall be computed on the basis of a year of
360 days, and in each case shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)......<U>Procedure
for Requesting Eurodollar Borrowings</U>. To request that any portion of the outstanding
Revolving Loans be converted into a Eurodollar Borrowing, or, to request that any
Eurodollar Borrowing continue as a Eurodollar Borrowing for an additional Eurodollar
Interest Period, the Borrower shall submit to the Lender a Eurodollar Request, in
substantially the form of <U>Exhibit B-4</U> hereto and setting forth all of the
information required to be set forth therein, by electronic mail or facsimile
transmission, not later than 1:00 p.m., Boston, Massachusetts time, three Business Days
before the date of the proposed conversion or continuation of such Borrowing. Each such
Eurodollar Request made by the Borrower shall be irrevocable. Subject to the provisions of
subsection 2.2(f) and provided that no Default or Event of Default shall have occurred and
be continuing, upon receipt of a Eurodollar Request, the Lender shall on the requested
date of conversion or continuation (i) convert the Base Rate Loan requested to be
converted into a Eurodollar Loan for the Eurodollar Interest Period set forth in such
Eurodollar Request and/or (ii) continue the Eurodollar Loan requested to be continued as a
Eurodollar Loan for the additional Eurodollar Interest Period set forth in such Eurodollar
Request. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)......<U>Incomplete
Eurodollar Requests</U>. If any Eurodollar Request is incomplete in any respect, then such
Eurodollar Request shall be void and the Borrowing which was the subject matter of such
Eurodollar Request shall continue as a Base Rate Borrowing. If, with respect to any
existing Eurodollar Borrowing, the Borrower fails to deliver a Eurodollar Request to
continue such Eurodollar Borrowing at least three Business Days prior to the expiration of
the Eurodollar Interest Period for such existing Eurodollar Borrowing, such Eurodollar
Borrowing shall automatically convert to a Base Rate Borrowing at the expiration of such
Eurodollar Interest Period. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)......<U>Limit
on Eurodollar Borrowings</U>. At the commencement of each Eurodollar Interest Period for a
Eurodollar Borrowing, such Borrowing shall be in an aggregate amount at least equal to
$500,000 or any greater multiple of $100,000. Borrowings of more than one Type may be
outstanding at the same time; <I>provided</I> that there shall not at any time be more
than a total of four (4) Eurodollar Borrowings outstanding. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)......<U>Alternate
Rate of Interest</U>. If prior to the commencement of any Eurodollar Interest Period for a
Eurodollar Borrowing, the Lender determines that (i) adequate and reasonable means do not
exist for ascertaining the Eurodollar Rate for such Eurodollar Interest Period, (ii) the
Eurodollar Rate for such Eurodollar Interest Period will not adequately and fairly reflect
the cost to the Lender of making or maintaining Eurodollar Borrowings, or (iii) as a
result of any Change in Law it is unlawful or impossible for the Lender to make or
maintain any Eurodollar Borrowing; then in each case the Lender shall give notice thereof
to the Borrower as promptly as practicable thereafter and, until the Lender notifies the
Borrower that the circumstances giving rise to such notice no longer exist, any Eurodollar
Request submitted by the Borrower shall be ineffective; <I>provided</I> that if as a
result of a Change in Law the Lender is prohibited from maintaining any outstanding
Eurodollar Borrowing, upon notice from the Lender, the Borrower shall immediately (A)
convert such Eurodollar Borrowing to a Base Rate Loan, or (B) repay such Eurodollar
Borrowing in full, together with all interest accrued thereon and all fees and other
amounts payable to the Lender hereunder (in either case, subject to the provisions of
subsection 2.2(g) of this Agreement with respect to redeployment costs). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)......<U>Break
Funding Payments</U>. In the event of (i) the payment of any principal of any Eurodollar
Loan other than on the last day of the Eurodollar Interest Period applicable thereto
(including as a result of an Event of Default), (ii) the conversion of any Eurodollar Loan
other than on the last day of the Eurodollar Interest Period applicable thereto, or (iii)
the failure to borrow, convert, continue or prepay any Eurodollar Loan on the date
specified in any notice delivered pursuant hereto (regardless of whether such notice is
permitted to be revocable and is revoked in accordance herewith), then, in any such event,
the Borrower shall compensate the Lender for the loss, cost and expense attributable to
such event, as determined by the Lender in a manner consistent with its customs and
practices. In the event that the Lender is entitled to receive compensation pursuant to
this subsection 2.2(g), the Lender shall deliver a certificate to the Borrower setting
forth the amount or amounts that the Lender is entitled to receive, which certificate
shall be deemed true and correct absent manifest error, and the Borrower shall pay such
amount or amounts within three (3) days after receipt of such certificate. </FONT></P>

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<A NAME=A029></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>2.3 Letters of Credit. </FONT></H1>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)......<U>General</U>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Subject to the terms and conditions set forth herein, in addition to the
          Revolving Loans provided for in Section&nbsp;2.1, the Borrower may request the
          issuance of Letters of Credit for its own account by the Issuing Lender, in a
          form reasonably acceptable to the Issuing Lender, at any time and from time to
          time during the Revolving Credit Availability Period. Letters of Credit issued
          hereunder shall constitute utilization of the Revolving Credit Commitment. 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 Issuing Lender relating to any Letter of Credit, the
          terms and conditions of this Agreement shall control. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)......<U>Notice
of Issuance, Amendment, Renewal, Extension; Certain Conditions</U>. To request the
issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding
Letter of Credit), the Borrower shall deliver to the Issuing Lender and the Lender by
electronic or facsimile transmission (reasonably in advance of the requested date of
issuance, amendment, renewal or extension) a letter of credit application in the form
required by the Issuing Lender. A Letter of Credit shall be issued, amended, renewed or
extended only if (and upon issuance, amendment, renewal or extension of each Letter of
Credit, the Borrower shall be deemed to represent and warrant that), after giving effect
to such issuance, amendment, renewal or extension (i) the Total LC Exposure at such time
shall not exceed the LC Sublimit, and (ii)&nbsp;the Revolving Credit Exposure at such time
shall not exceed the lesser of (A) the Revolving Credit Commitment at such time, and (B)
the Borrowing Base at such time. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)......<U>Expiration
Date</U>. Each Letter of Credit shall expire (without giving effect to any extension
thereof by reason of an interruption of business) at or prior to the close of business on
the earlier of (i) the date 365 days, in the case of standby Letters of Credit, or 180
days, in the case of documentary Letters of Credit, after the date of the issuance of such
Letter of Credit (or, in the case of any renewal or extension thereof, 365 days or 180
days, as applicable, after such renewal or extension) <I>provided </I>that any such
standby Letter of Credit may provide for automatic extensions thereof to a date not later
than 365 days beyond its current expiration date, and (ii) the date that is five Business
Days prior to the Revolving Credit Maturity Date. No Letter of Credit may be extended
beyond the date that is five Business Days prior to the Revolving Credit Maturity Date. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)......<U>Reimbursement</U>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          If the Issuing Lender shall make any LC Disbursement in respect of a Letter of
          Credit, the Borrower shall reimburse (each, a &#147;<U>Reimbursement
          Obligation</U>&#148;) the Issuing Lender in respect of such LC Disbursement by
          paying to the Lender for the account of the Issuing Bank an amount equal to such
          LC Disbursement not later than 1:00 p.m., Boston, Massachusetts time, on (i) the
          Business Day that the Borrower receives notice of such LC Disbursement, if such
          notice is received prior to 11:00 a.m., Boston, Massachusetts 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, <I>provided</I> that,
          subject to the conditions to borrowing set forth herein, payment of each such
          Reimbursement Obligation shall be made through the automatic funding of a Base
          Rate Borrowing in an amount equal to the amount of such Reimbursement
          Obligation, and the Borrower hereby irrevocably authorizes and directs the
          Lender to take such actions as may be necessary to effectuate such automatic
          funding of such Base Rate Borrowings. To the extent that any such Reimbursement
          Obligation is paid through the automatic funding of a Base Rate Borrowing, the
          Borrower&#146;s obligation to make such payment shall be discharged and replaced
          by the resulting Base Rate Borrowing. If the Borrower cannot satisfy the
          conditions to borrowing set forth herein such that the payment of any
          Reimbursement Obligation cannot be made through the automatic funding of a Base
          Rate Borrowing and the Borrower shall fail to make such payment when due, the
          Lender shall promptly pay to the Issuing Lender the unreimbursed portion of the
          LC Disbursement. Promptly following receipt by the Lender of any payment from
          the Borrower pursuant to this paragraph, the Lender shall distribute such
          payment to the Issuing Lender. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)......<U>Obligations
Absolute</U>. The Borrower&#146;s obligation to reimburse LC Disbursements as provided in
subsection 2.3(d) 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 Letter of
Credit, or any term or provision therein, (ii) any draft or other document presented under
a Letter of Credit 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 Issuing
Lender to the beneficiary under a Letter of Credit against presentation of a draft or
other document that does not comply strictly with the terms of such Letter of Credit and
(iv) any other event or circumstance whatsoever (other than gross negligence or willful
misconduct of the Issuing Lender), whether or not similar to any of the foregoing, that
might, but for the provisions of this Section&nbsp;2.3, constitute a legal or equitable
discharge of the Borrower&#146;s obligations hereunder. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)......<U>Interim
Interest</U>. If the Issuing Lender shall make any LC Disbursement in respect of any
Letter of Credit, and if the Borrower cannot satisfy the conditions to borrowing set forth
herein such that payment of the Reimbursement Obligation resulting from such LC
Disbursement cannot be made through the automatic funding of a Base Rate Borrowing, 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 Base
Rate Loans; <I>provided</I> that, if the Borrower fails to reimburse such LC Disbursement
when due pursuant to subsection 2.3(d), then interest calculated at the Post-Default Rate
shall accrue on the unpaid amount thereof. Interest accrued pursuant to this paragraph
shall be for the account of the Issuing Lender, except that interest accrued on and after
the date of payment by the Lender pursuant to subsection 2.3(d) shall be for the account
of the Lender to the extent of the payment. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)......<U>Cash
Collateralization</U>. If either (i) an Event of Default shall occur and be continuing and
the Borrower receives notice from the Lender demanding the deposit of cash collateral
pursuant to this paragraph, or (ii) the Borrower shall be required to provide cash
collateral for Total LC Exposure pursuant to subsections &nbsp;2.1(d) or 2.6(b), the
Borrower shall immediately deposit with the Lender an amount in cash equal to, in the case
of an Event of Default, the Total LC Exposure as of such date plus any accrued and unpaid
interest thereon and, in the case of any cash collateral required to be provided pursuant
to subsections&nbsp;2.1(d) or 2.6(b), the amount required under subsections&nbsp;2.1(d) or
2.6(b), as the case may be; <I>provided</I> 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 described in clause (g) or (h) of Section&nbsp;9.1. Such deposit shall be
held by the Lender as collateral in the first instance for the Total LC Exposure under
this Agreement and thereafter for the payment of any other obligations of the Credit
Parties hereunder. </FONT></P>

2.4      Expiration, Termination or Reduction of Revolving Credit Commitment.

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)......<U>Expiration
of Revolving Credit Commitment</U>. Unless previously terminated, the Revolving Credit
Commitment shall expire at the close of business on the Revolving Credit Maturity Date. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)......<U>Reduction
of Revolving Credit Commitment</U>. The Borrower may at any time and from time to time
reduce the Revolving Credit Commitment; <I>provided</I> that (i) each reduction of the
Revolving Credit Commitment shall be in an amount that is at least equal to $500,000 or
any greater multiple of $100,000, and (ii) the Borrower shall not reduce the Revolving
Credit Commitment if, after giving effect to any concurrent repayment, the total Revolving
Credit Exposure would exceed the total Revolving Credit Commitment. The Borrower shall
notify the Lender of any election to reduce the Revolving Credit Commitment at least three
Business Days prior to the effective date of such reduction, specifying the effective date
thereof. Each notice of reduction of the Revolving Credit Commitment shall be irrevocable.
Each reduction of the Revolving Credit Commitment shall be permanent. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)......<U>Optional
Termination of Revolving Credit Commitment</U>. The Borrower shall have the right at any
time to terminate the Revolving Credit Commitment. The Borrower shall notify the Lender of
any election to terminate the Revolving Credit Commitment under this subsection 2.4(c) in
writing at least thirty (30) days prior to the effective date of such termination,
specifying the effective date thereof. Each notice of termination of the Revolving Credit
Commitment shall be irrevocable. Any termination of the Revolving Credit Commitment shall
be permanent. </FONT></P>

2.5      Payments.

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)......<U>Payments
Generally</U>. The Borrower shall be obligated to make each payment required to be made by
the Borrower hereunder (whether of principal, interest, fees or reimbursement of LC
Disbursements, or otherwise) to Lender at its offices in Boston, Massachusetts, prior to
3:00 p.m., Boston, Massachusetts time, on the date when due (except that if any payment
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, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension). All payments shall be
made in immediately available funds, in U.S. dollars without set-off or counterclaim. Any
amounts received after such time on any date may, in the discretion of the Lender, be
deemed to have been received on the next succeeding Business Day for purposes of
calculating interest thereon. Notwithstanding anything to the contrary set forth herein,
subject to the conditions to the funding of Revolving Loans set forth herein, all payments
of interest, fees and any other amounts due to be paid by the Borrower hereunder shall be
made through the automatic funding of Base Rate Revolving Loans in amounts equal to the
amounts of such interest, fees or other amounts due to be paid by the Borrower hereunder,
and the Borrower hereby irrevocably authorizes and directs the Lender to take such actions
as may be necessary to effectuate such automatic funding of Base Rate Revolving Loans,
and, upon funding of any such Base Rate Revolving Loan, the Borrower&#146;s obligation to
make such payment shall be discharged and replaced by the resulting Base Rate Revolving
Loan. The Borrower expressly acknowledges and agrees that (i) the Lender may, in its sole
discretion, effectuate the automatic funding of a Revolving Loan pursuant to this
subsection 2.5(a) even though at the time of, or after giving effect to, the funding of
such Revolving Loans the Revolving Credit Exposure exceeds the lesser of (x) the Revolving
Credit Commitment and (y) the Borrowing Base, and (ii) if any one or more of the
conditions to the funding of Revolving Loans cannot be satisfied and the Lender, in its
sole discretion, refuses to fund a Base Rate Revolving Loan in an amount sufficient to
satisfy the amount of any interest, fees or other amounts due hereunder, the Borrower
shall remain obligated to pay the full amount of such interest, fees or other amounts as
and when the same shall become due. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)......<U>Application
of Payments</U>. If at any time insufficient funds are received by and available to the
Lender to pay fully all amounts of principal, unreimbursed LC Disbursements, interest and
fees then due hereunder under any circumstances, including, without limitation during, or
as a result of the exercise by the Lender of remedies hereunder or under any other Loan
Document and applicable law, such funds shall be applied (i) first, to pay interest, fees,
costs and expenses then due hereunder, (ii)&nbsp;second, to pay principal and unreimbursed
LC Disbursements then due hereunder, and (iii) third, to any other Obligations then due
from the Credit Parties to the Lender, the Issuing Lender, the Cash Management Bank or any
other Affiliate of the Lender. </FONT></P>

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<A NAME=A030></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>2.6 Prepayment of Loans. </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)......<U>Optional
Prepayments of Loans</U>. The Borrower shall have the right at any time and from time to
time to prepay the Revolving Loans in whole or in part, subject to the payment of any
amounts due under subsection 2.2(g). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)......<U>Mandatory
Prepayments</U>. The Borrower shall be obligated to, and shall, make prepayments of the
Loans hereunder (and reduce the Revolving Credit Commitment hereunder) as follows: </FONT></P>
</TD>
          </TR>
          </TABLE>
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     <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
          <TR VALIGN=TOP>
          <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(i) </FONT></TD>
          <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          <U>Incurrence of Debt</U>. Without limiting the obligation of the Borrower to
          obtain the consent of the Lender to any incurrence of Indebtedness not otherwise
          permitted hereunder, the Borrower agrees, on the closing of any incurrence of
          Indebtedness by any Credit Party (other than Indebtedness permitted pursuant to
          Section&nbsp;8.1) to prepay the Loans hereunder (and provide cash collateral for
          Total LC Exposure as specified in subsection&nbsp;2.3(g)), and the Revolving
          Credit Commitment hereunder shall be subject to automatic reduction, upon the
          date of such incurrence of Indebtedness, in an aggregate amount equal to 100% of
          the amount of the Net Cash Payments from such incurrence of Indebtedness
          received by any Credit Party, such prepayment and reduction to be effected in
          each case in the manner and to the extent specified in subsection&nbsp;2.6(c)
          below. </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>

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     <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
          <TR VALIGN=TOP>
          <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(ii) </FONT></TD>
          <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          <U>Sale or Offering of Securities</U>. Unless otherwise agreed to in advance in
          writing by the Lender, the Borrower agrees on the closing of any offering or
          sale of equity securities by any Credit Party, to prepay the Loans hereunder
          (and provide cash collateral for Total LC Exposure as specified in subsection
          2.3(g)), upon the date of such sale or offering of securities, in an aggregate
          amount equal to 100% of the amount of Net Cash Payments from such offering of
          securities received by any such Credit Party such prepayment to be effected in
          each case in the manner and to the extent specified in subsection&nbsp;2.6(c)
          below. Notwithstanding the foregoing, this section shall not apply to equity
          offerings (x) in connection with employee stock purchase plans and stock option
          plans of the Borrower or (y) in an amount with a total aggregate value of less
          than $50,000,000.00. </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>

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     <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
          <TR VALIGN=TOP>
          <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(iii) </FONT></TD>
          <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          <U>Sale of Assets</U>. Without limiting the obligation of the Borrower to obtain
          the consent of the Lender to any Disposition not otherwise permitted hereunder,
          the Borrower agrees, on the date of any Disposition by any Credit Party, to
          prepay the Loans hereunder (and provide cash collateral for Total LC Exposure as
          specified in subsection&nbsp;2.3(g)), and the Revolving Credit Commitment
          hereunder shall be subject to automatic reduction, upon the date of such
          Disposition, in an aggregate amount equal to 100% of the amount of such Net Cash
          Payments from such Disposition received by the Borrower on the date of such
          Disposition, such payment and reduction to be effected in each case and in the
          manner and to the extent specified in subsection 2.6(c) below. Notwithstanding
          the forgoing, the Borrower shall not be required to make any prepayment of the
          Loans under this subsection 2.7(b)(iii) with respect to the first $500,000 of
          aggregate Net Cash Payments received by the Credit Parties from Dispositions
          after the Effective Time to the extent 100% of such Net Cash Payments are
          utilized (as evidenced by a binding contractual agreement) to replace the assets
          disposed of by the Credit Parties in the Disposition within 90 days of each such
          Disposition. </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>

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     <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
          <TR VALIGN=TOP>
          <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(iv) </FONT></TD>
          <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          <U>Proceeds of Casualty Events</U>. Upon the receipt by the Lender or the Credit
          Parties of the proceeds of insurance, condemnation award or other compensation
          in respect of any Casualty Event affecting any property of the Credit Parties,
          the Borrower shall prepay the Loans (and provide cash collateral for Total LC
          Exposure as specified in subsection&nbsp;2.4(g)), and the Revolving Credit
          Commitment shall be subject to automatic reduction, in an aggregate amount equal
          to 100% of the Net Cash Payments from such Casualty Event, such prepayment and
          reduction to be effected in each case in the manner and to the extent specified
          in subsection 2.7(c) below; <I>provided</I> that if there shall occur a Casualty
          Event and the aggregate market value of all property affected by such Casualty
          Event shall be less than $500,000, and if, at the time proceeds of insurance in
          respect of such Casualty Event are received, no Event of Default shall have
          occurred and be continuing, the Borrower shall be entitled to utilize such
          insurance proceeds (in an amount not in excess of $500,000) to repair or replace
          the property affected by such Casualty Event within 90 days (it being understood
          that if proceeds of insurance intended to be applied to repair or replace
          property are not in fact applied within 90 days after receipt thereof, then such
          proceeds shall be applied to the prepayment of Loans, cover for Total LC
          Exposure and reduction of the Revolving Credit Commitment as provided in this
          clause (iv) at the expiration of such 90 day period). </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
          <TR VALIGN=TOP>
          <TD>
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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Application</U>. In the event of any mandatory prepayment of Loans pursuant
          to subsections&nbsp;(b)(i), (b)(ii), (b)(iii) and (b)(iv) of this Section 2.6,
          the proceeds shall be applied as follows: </FONT></P></TD>
          </TR>
          </TABLE>

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          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%></TD>
               <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               first, to the extent that Revolving Credit Exposure shall at such time exceed
               the lesser of (A) the Revolving Credit Commitment at such time or (B) the
               Borrowing Base at such time, such prepayment shall be applied to the repayment
               of Revolving Loans; </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%></TD>
               <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               second, the amount of any mandatory prepayment shall be applied to repay
               Revolving Loans, and, second, to provide cash collateral for Total LC Exposure
               as specified in Section&nbsp;2.3(g), with a corresponding permanent reduction in
               the Revolving Credit Commitment (except that no such corresponding permanent
               reduction in the total Revolving Credit Commitment shall be required in
               connection with any prepayment pursuant to subsection 2.6(b)(ii) above). </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD>
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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Notification of Certain Prepayments</U>. The Borrower shall notify the Lender
          by telephone (confirmed by telecopy) of any voluntary prepayment of any
          Eurodollar Loan not later than 1:00 p.m., Boston, Massachusetts time, three
          Business Days before the date of such prepayment. The Borrower shall notify the
          Lender of any mandatory prepayment of the Loans pursuant to subsection 2.6(b)
          hereunder as soon as practicable. Each such notice shall be irrevocable and
          shall specify the prepayment date and the principal amount of each Borrowing or
          portion thereof to be prepaid. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Prepayments Accompanied by Interest</U>. All prepayments of the Loan shall be
          accompanied by accrued interest through the date of prepayment. </FONT></P>

2.7      Fees.

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Unused Fee</U>. The Borrower shall pay to the Lender unused fees in respect
          of the Revolving Credit Commitment, in an aggregate amount equal to the product
          of (x) the Applicable Unused Fee Rate, <U>multiplied by</U> (y) the daily
          average unused amounts of the Revolving Credit Commitment during the period from
          and including the date on which the Effective Time shall occur to but excluding
          the date on which the Revolving Credit Commitment terminates. Accrued unused
          fees shall be payable monthly in arrears on the first day of each month and on
          the date on which the Revolving Credit Commitment terminates. All unused 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). </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Letter of Credit Fees</U>. The Borrower shall pay with respect to Letters of
          Credit issued hereunder the following fees: </FONT></P>
</TD>
          </TR>
          </TABLE>
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     <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
          <TR VALIGN=TOP>
          <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(i) </FONT></TD>
          <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          with respect to each standby or documentary Letter of Credit issued hereunder, a
          fee to the Lender which shall accrue at a rate per annum equal to (x) 2.00%
          <U>multiplied by</U> (y) the average daily amount of outstanding Letters of
          Credit during the period from and including the Closing Date to but excluding
          the date on which there shall no longer be any Letters of Credit outstanding
          hereunder, and </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>

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     <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
          <TR VALIGN=TOP>
          <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(ii) </FONT></TD>
          <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          with respect to each documentary or standby Letter of Credit issued hereunder,
          the Issuing Lender&#146;s standard fees with respect to the issuance, amendment,
          renewal or extension of any Letter of Credit or processing of drawings
          thereunder. </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>

<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
          <TR VALIGN=TOP>
          <TD>
<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Accrued fees for Letters of Credit
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), and shall be
payable monthly in arrears on the first day of each month and on the date the Revolving
Credit Commitment terminates, commencing on the first such date to occur after the date
hereof, <I>provided</I> that any such fees accruing after the date on which the Revolving
Credit Commitment terminates shall be payable on demand. </FONT></P>


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<A NAME=A031></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>2.8 Increased Costs. </FONT></H1>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          If any Change in Law shall: </FONT></P>
</TD>
          </TR>
          </TABLE>

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     <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
          <TR VALIGN=TOP>
          <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(i) </FONT></TD>
          <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          impose, modify or deem applicable any reserve, special deposit or similar
          requirement against assets of, deposits with or for the account of, or credit
          extended by, the Lender or the Issuing Lender; or </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>

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     <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
          <TR VALIGN=TOP>
          <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(ii) </FONT></TD>
          <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          impose on the Lender or the Issuing Lender or the London interbank market any
          other condition affecting this Agreement or Eurodollar Loans made by the Lender
          or any Letter of Credit; </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
          <TR VALIGN=TOP>
          <TD>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>and the result of any of the
foregoing shall be to increase the cost to the Lender of making or maintaining any
Eurodollar Loan (or of maintaining its obligation to make any such Loan) or to increase
the cost to the Issuing Lender of issuing or maintaining any Letter of Credit or to reduce
the amount of any sum received or receivable by the Lender or the Issuing Lender hereunder
(whether of principal, interest or otherwise), then the Borrower will pay to the Lender or
the Issuing Lender, as the case may be, such additional amount or amounts as will
compensate the Lender or the Issuing Lender, as the case may be, for such additional costs
incurred or reduction suffered. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          If the Lender or the Issuing Lender reasonably determines that any Change in Law
          regarding capital requirements has or would have the effect of reducing the rate
          of return on the Lender&#146;s or the Issuing Lender&#146;s capital or on the
          capital of the Lender&#146;s or the Issuing Lender&#146;s holding company, if
          any, as a consequence of this Agreement or the Loans made by the Lender, or the
          Letters of Credit issued by the Issuing Lender, to a level below that which the
          Lender or the Issuing Lender or the Lender&#146;s or the Issuing Lender&#146;s
          holding company could have achieved but for such Change in Law (taking into
          consideration the Lender&#146;s or the Issuing Lender&#146;s policies and the
          policies of the Lender&#146;s or the Issuing Lender&#146;s holding company with
          respect to capital adequacy), then from time to time the Borrower will pay to
          the Lender or the Issuing Lender, as the case may be, such additional amount or
          amounts as will compensate the Lender or the Issuing Lender, or the
          Lender&#146;s or the Issuing Lender&#146;s holding company, for any such
          reduction suffered. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          A certificate of the Lender or the Issuing Lender setting forth the amount or
          amounts necessary to compensate the Lender or the Issuing Lender or its holding
          company, as the case may be, as specified in subsections 2.8(a) or 2.8(b) above
          shall be delivered to the Borrower and shall be conclusive so long as it
          reflects a reasonable basis for the calculation of the amounts set forth therein
          and does not contain any manifest error. The Borrower shall pay the Lender or
          the Issuing Lender the amount shown as due on any such certificate within 10
          days after receipt thereof. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Failure or delay on the part of the Lender or the Issuing Lender to demand
          compensation pursuant to this Section&nbsp;2.8 shall not constitute a waiver of
          the Lender&#146;s or the Issuing Lender&#146;s right to demand such
          compensation; <I>provided</I> that the Borrower shall not be required to
          compensate the Lender or the Issuing Lender pursuant to this Section&nbsp;2.8
          for any increased costs or reductions incurred more than six months prior to the
          date that Lender or the Issuing Lender, as the case may be, notifies the
          Borrower of the Change in Law giving rise to such increased costs or reductions
          and of Lender&#146;s or the Issuing Lender&#146;s intention to claim
          compensation therefor; <I>provided</I> <I>further</I> that, if the Change in Law
          giving rise to such increased costs or reductions is (i) retroactive and (ii)
          occurred within such six-month period, then the six-month period referred to
          above may be extended to include the period of retroactive effect thereof, but
          in no event any period prior to the Closing Date. </FONT></P>

2.9      Taxes.

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Any and all payments by or on account of any Obligations of the Borrower
          hereunder shall be made free and clear of and without deduction for any
          Indemnified Taxes or Other Taxes; <I>provided</I> that if the Borrower shall be
          required to deduct any Indemnified Taxes or Other Taxes from such payments, then
          (i) the sum payable shall be increased as necessary so that after making all
          required deductions (including deductions applicable to additional sums payable
          under this Section&nbsp;2.10) the Lender or the Issuing Lender (as the case may
          be) receives 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 Governmental
          Authority in accordance with applicable law. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          In addition, the Borrower shall pay all Other Taxes to the relevant Governmental
          Authority in accordance with applicable law. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          The Borrower shall indemnify the Lender and the Issuing Lender, within 10 days
          after written demand therefor, for the full amount of any Indemnified Taxes or
          Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on
          or attributable to amounts payable under this Section&nbsp;2.9) paid by the
          Lender or the Issuing Lender, as the case may be (and any penalties, interest
          and reasonable expenses arising therefrom or with respect thereto during the
          period prior to the Borrower making the payment demanded under this paragraph
          (c)), whether or not such Indemnified Taxes or Other Taxes were correctly or
          legally imposed or asserted by the relevant Governmental Authority. A
          certificate as to the amount of such payment or liability delivered to the
          Borrower by the Lender or the Issuing Lender, shall be conclusive absent
          manifest error. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          As soon as practicable after any payment of Indemnified Taxes or Other Taxes by
          the Borrower to a Governmental Authority, the Borrower shall deliver to the
          Lender the original or a certified copy of a receipt issued by such Governmental
          Authority evidencing such payment, a copy of the return reporting such payment
          or other evidence of such payment reasonably satisfactory to the Lender. </FONT></P>

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<A NAME=A032></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>ARTICLE 3 </FONT></H1>

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<A NAME=A033></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Intentionally omitted </FONT></H1>

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<A NAME=A034></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>ARTICLE 4 </FONT></H1>

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<A NAME=A035></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>The Collateral </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.1 <B>Grant of Security Interest.
</B>As security for due and punctual payment and performance of the Obligations, each
Credit Party hereby grants to the Lender (for the ratable benefit of the Lender, the
Issuing Lender and the Cash Management Bank) a continuing security interest in and lien on
all tangible and intangible property and assets of such Credit Party, whether now owned or
existing or hereafter acquired or arising, wherever located, together with any and all
additions thereto and replacements therefor and proceeds and products thereof
(collectively referred to for purposes of this Article&nbsp;4 as
&#147;<U>Collateral</U>&#148;), including without limitation the property described below: </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          all tangible personal property, including without limitation all present and
          future goods, inventory (including, without limitation, all merchandise, raw
          materials, work in process, finished goods and supplies), machinery, equipment,
          motor vehicles, rolling stock, tools, furniture, fixtures, office supplies,
          computers, computer software and associated equipment, whether now owned or
          hereafter acquired, including, without limitation, all tangible personal
          property used in the operation of the business of such Credit Party; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          all rights under all present and future authorizations, permits, licenses and
          franchises issued, granted or licensed to such Credit Party for the operation of
          its business; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          all Patents of such Credit Party; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          all Trademarks of such Credit Party; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          all Copyrights of such Credit Party; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          the entire goodwill of business of such Credit Party and all other general
          intangibles (including know-how, trade secrets, customer lists, proprietary
          information, inventions, domain names, methods, procedures and formulae)
          connected with the use of and symbolized by any Patents, Trademarks or
          Copyrights of such Credit Party; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          all rights under all present and future vendor or customer contracts and all
          franchise, distribution, design, consulting, construction, engineering,
          management and advertising and related agreements; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          all rights under all present and future leases of real and personal property;
          and </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>all other personal property,
including, without limitation, all present and future accounts, accounts receivable, cash,
cash equivalents, deposits, deposit accounts, loss carry back, tax refunds, insurance
claims and proceeds, premiums, rebates and refunds, choses in action, investment property,
securities, partnership interests, limited liability company interests, contracts,
contract rights, rights to payments of money, general intangibles (including without
limitation, payment intangibles, all customer and advertiser mailing lists, intellectual
property, patents, copyrights, trademarks, trade secrets, trade names, domain names,
goodwill, customer lists, advertiser lists, catalogs and other printed materials,
publications, indexes, lists, data and other documents and papers relating thereto,
blueprints, designs, charts, and research and development, whether on paper, recorded
electronically or otherwise), commercial tort claims, all websites (including without
limitation, all content, HTML documents, audiovisual material, software, data, hardware,
access lines, connections, copyrights, trademarks, patents, and trade secrets relating to
such websites) and domain names, any information stored on any medium, including
electronic medium, related to any of the personal property of such Credit Party, all
financial books and records and other books and records relating, in any manner, to the
business of such Credit Party, all proposals and cost estimates and rights to performance,
all instruments and promissory notes, documents and chattel paper, and all debts,
obligations and liabilities in whatever form owing to such Credit Party from any person,
firm or corporation or any other legal entity, whether now existing or hereafter arising,
now or hereafter received by or belonging or owing to such Credit Party; and all
guaranties and security therefor, and all letters of credit and other supporting
obligations in respect of such debts, obligations and liabilities. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Any of the foregoing terms which are
defined in the Uniform Commercial Code shall have the meaning provided in the Uniform
Commercial Code, as amended and in effect from time to time, as supplemented and expanded
by the foregoing. </FONT></P>

4.2      Special Warranties and Covenants of the Credit Parties.  Each Credit Party hereby warrants and covenants to the Lender that:

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Such Credit Party has delivered to the Lender a Perfection Certificate in
          substantially the form of <U>Exhibit C </U>hereto. All information set forth in
          such Perfection Certificate is true and correct in all material respects and the
          facts contained in such Perfection Certificate are accurate in all material
          respects as of the date of this Agreement. Each Credit Party agrees to
          supplement its Perfection Certificate promptly after obtaining information which
          would require a correction or addition to such Perfection Certificate. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          No Credit Party will change its jurisdiction of organization, type of
          organization, or other legal structure, principal or any other place of
          business, including its chief executive office, its mailing address, or the
          location of any Collateral from the locations set forth in the Perfection
          Certificate delivered by such Credit Party, or make any change in its name, its
          organizational identification number if it has one, or if such Credit Party does
          not have an organizational identification number and later obtains one, such
          Credit Party will notify the Lender of such organizational identification
          number, or conduct its business operations under any fictitious business name or
          trade name, without, in any such case, at least thirty (30) days&#146; prior
          written notice to the Lender; provided that the inventory of such Credit Party
          may be in the possession of manufacturers or processors in any jurisdiction in
          which all necessary UCC financing statements have been filed by the Lender and
          with respect to which the Lender has received waiver letters from all landlords,
          warehousemen and processors in form and substance acceptable to Lender. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Except for Collateral that is obsolete or no longer used in their business, the
          Credit Parties will keep the Collateral in good order and repair (normal wear
          excepted) and adequately insured at all times in accordance with the provisions
          of Section 7.5. The Credit Parties will pay promptly when due all taxes and
          assessments on the Collateral or for its use or operation, except for taxes and
          assessments permitted to be contested as provided in Section 7.4. Following the
          occurrence and during the continuance of an Event of Default, the Lender may at
          its option discharge any taxes or Liens to which any Collateral is at any time
          subject (other than Permitted Liens), and may, upon the failure of the Credit
          Parties to do so in accordance with this Agreement, purchase insurance on any
          Collateral and pay for the repair, maintenance or preservation thereof, and each
          Credit Party agrees to reimburse the Lender on demand for any payments or
          expenses incurred by the Lender pursuant to the foregoing authorization and any
          unreimbursed amounts shall constitute Obligations for all purposes hereof. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          The Lender may from time to time request and each Credit Party shall deliver
          copies of all customer lists and vendor lists. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          To the extent, if any, that such Credit Party&#146;s signature is required
          therefor, each Credit Party will promptly execute and deliver to the Lender such
          financing statements and amendments thereto, certificates and other documents or
          instruments as may be necessary to enable the Lender to perfect or from time to
          time renew the security interest granted hereby, including, without limitation,
          such financing statements and amendments thereto, certificates and other
          documents as may be necessary to perfect a security interest in any additional
          Collateral hereafter acquired by such Credit Party or in any replacements or
          proceeds thereof. Each Credit Party authorizes and appoints the Lender, in case
          of need, to execute such financing statements, certificates and other documents
          pertaining to the Lender&#146;s security interest in the Collateral in its stead
          if such Credit Party&#146;s signature is required therefor and such Credit Party
          fails to so execute such documents, with full power of substitution, as such
          Debtor&#146;s attorney in fact. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Each Credit Party hereby irrevocably authorizes the Lender, at any time and from
          time to time, to file in any jurisdiction financing statements and amendments
          thereto that (i) indicate the Collateral (x) as all assets of such Credit Party
          or words of similar effect (excepting Patents, Trademarks and Copyrights until
          such time as an Event of Default shall occur hereunder, at which time the Lender
          shall be authorized to file financing statements indicating the Collateral as
          all assets of such Credit Party or words of similar effect), regardless of
          whether any particular asset falls within the scope of Article 9 of the Uniform
          Commercial Code of the Commonwealth of Massachusetts or such jurisdiction or (y)
          as being of an equal or lesser scope or with greater detail and (ii) which
          contain any other information required by Article 9 of the Uniform Commercial
          Code (including Part 5 thereof) for the sufficiency or filing office acceptance
          of any financing statement or amendment, including whether (A) any Credit Party
          is an organization, the type of organization and any organization identification
          number issued to such Credit Party and (B) in the case of a financing statement
          filed as a fixture filing or indicating Collateral as as-extracted collateral or
          timber to be cut, a sufficient description of the real property to which the
          Collateral relates. The Credit Parties agree to furnish any such information to
          the Lender promptly upon request. Each Credit Party also ratifies its
          authorization for the Lender to have filed in any Uniform Commercial Code
          jurisdiction any like initial financing statements or amendments thereto if
          filed prior to the date hereof. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Notwithstanding anything to the contrary contained herein, the Lender agrees not
          to perfect its security interest in the Patents, Trademarks and Copyrights until
          such time as an Event of Default shall occur hereunder. At any time after an
          Event of Default has occurred, at which time the Negative Pledge Agreements
          shall be deemed to have terminated, each Credit Party agrees that it will join
          with the Lender in executing and, at its own expense, will file and refile, or
          permit the Lender to file and refile such other documents (including, without
          limitation, amendments to the UCC Financing Statements, this Agreement and
          licenses to use software and other property protected by copyright), in such
          offices (including, without limitation, the PTO, the United States Copyright
          Office, appropriate state patent, trademark and copyright offices and
          appropriate UCC filing offices), as the Lender may reasonably deem necessary or
          appropriate, wherever required or permitted by law in order to perfect and
          preserve the rights and interests granted to the Lender in Patents, Trademarks
          and Copyrights hereunder. Each Credit Party will give the Lender notice of each
          office at which records of such Credit Party pertaining to all intangible items
          of Collateral are kept. Except as may be provided in such notice, the records
          concerning all intangible Collateral are and will be kept at the address shown
          in the respective Perfection Certificate for such Credit Party as the principal
          place of business of such Credit Party. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          The Credit Parties are the sole and exclusive owners of the websites and domain
          names listed on <U>Schedule 4.2</U> hereto and have registered such domain names
          with the applicable authority for registration of the same which provides for
          the exclusive use by the Credit Parties of such domain names. The websites do
          not contain any material, the publication of which may result in (a) the
          violation of rights of any person or (b) a right of any person against the
          publisher or distributor of such material. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          The Credit Parties shall, annually by the end of the first calendar quarter
          following the previous calendar year, provide written notice to the Lender of
          all applications for registration of Patents, Trademarks or Copyrights, to the
          extent such applications exist, made during the preceding calendar year. The
          Credit Parties shall file and prosecute to the extent deemed reasonably
          appropriate by the Credit Parties all applications for registration of Patents,
          Trademarks or Copyrights now or hereafter pending that, in their reasonable
          discretion, would be necessary to the business of the Credit Parties to which
          any such applications pertain, and to do all acts, in any such instance,
          reasonably necessary to preserve and maintain all rights in such registered
          Patents, Trademarks or Copyrights unless such Patents, Trademarks or Copyrights
          are not material to the business of the Credit Parties, as reasonably determined
          by the Credit Parties consistent with prudent and commercially reasonable
          business practices. Any and all costs and expenses incurred in connection with
          any such actions shall be borne by the Credit Parties. All such Patents,
          Trademarks and Copyrights shall become subject to the terms and provisions of
          the Negative Pledge Agreements. Except in accordance with prudent and
          commercially reasonable business practices, the Credit Parties shall not abandon
          any right to file a Patent, Trademark or Copyright application or any pending
          Patent, Trademark or Copyright application or any registered Patent, Trademark
          or Copyright, in each case material to its business, without the consent of the
          Lender. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          The domain name servers used in connection with the domain names of the Credit
          Parties and all other relevant information pertaining to such domain names, and
          the administrative contacts used in connection with the registration of such
          domain names are identified on <U>Schedule 4.2</U> hereof. No Credit Party will
          change such domain name servers without 10 days&#146; prior notice to the
          Lender. No Credit Party will cause a change in the identity of any domain name
          administrative contact without 10 days&#146; prior notice to the Lender. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          If any Credit Party is, now or at any time hereafter, a beneficiary under a
          letter of credit now or hereafter, such Credit Party will promptly notify the
          Lender thereof and, at the request and option of the Lender, such Credit Party
          shall, pursuant to an agreement in form and substance satisfactory to the
          Lender, either (i) arrange for the issuer and any confirmer or other nominated
          person of such letter of credit to consent to an assignment to the Lender of the
          proceeds of the letter of credit or (ii) arrange for the Lender to become the
          transferee beneficiary of the letter of credit, with the Lender agreeing, in
          each case, that the proceeds of the letter of credit are to be applied by the
          Lender against the Obligations as provided in this Agreement. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          To the extent any Credit Party shall, now or at any time hereafter, hold or
          acquire any promissory note or other instrument or tangible chattel paper, such
          Credit Party will promptly notify the Lender thereof and, at the request and
          option of the Lender, such Debtor will deliver such promissory note or other
          instrument or tangible chattel paper to the Lender to be held as Collateral
          hereunder, together with an endorsement thereof reasonably satisfactory in form
          and substance to the Lender. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          If, now or at any time hereafter, any Credit Party shall obtain or hold any
          investment property or electronic chattel paper, such Credit Party will promptly
          notify the Lender thereof and, at the request and option of the Lender, such
          Credit Party will take or cause to be taken such steps as the Lender may
          reasonably request for the Lender to obtain &#147;control&#148; (as provided in
          Sections 9-105 and 9-106 of the Uniform Commercial Code of the Commonwealth of
          Massachusetts, as amended and in effect from time to time) of such Collateral. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(n)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          No Credit Party holds any commercial tort claims, as defined in Article 9 of the
          Uniform Commercial Code, except as indicated in the Perfection Certificate
          attached hereto as <U>Exhibit C</U>. If any of Credit Parties shall at any time
          acquire a commercial tort claim, such Credit Party shall immediately notify the
          Lender in a writing signed by such Credit Party of the brief details thereof and
          grant to the Lender 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 Lender. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(o)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          If any Credit Party has accounts receivable in respect of which the account
          debtor is located in Minnesota, the Credit Parties represent and warrant that
          the applicable Credit Party has filed and shall file all legally-required Notice
          of Business Activities Reports and comparable reports with the appropriate
          government authorities. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(p)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          The Borrower shall, at the request and option of the Lender, and if there shall
          be any Loans outstanding under this Agreement, notify account debtors and other
          persons obligated on any of the Collateral of the security interest of the
          Lender in any account, chattel paper, general intangible, instrument or other
          Collateral and that payment thereof is to be made directly to the Lender or to
          any financial institution designated by the Lender as the Lender&#146;s agent
          therefore. The Lender may itself, if a Default or an Event of Default shall have
          occurred and be continuing, without notice to or demand upon the Borrower, so
          notify account debtors and other persons obligated on Collateral. After the
          making of such a request or the giving of any such notification, the Borrower
          shall hold any proceeds of collection of accounts, chattel paper, general
          intangibles, instruments and other Collateral received by the Borrower as
          trustee for the Lender without commingling the same with other funds of the
          Borrower and shall turn the same over to the Lender in the identical form
          received, together with any necessary endorsements or assignments. The Lender
          shall apply the proceeds of collection of accounts, chattel paper, general
          intangibles, instruments and other Collateral received by the Lender to the
          Obligations, such proceeds to be immediately credited after final payment in
          cash or other immediately available funds of the items giving rise to them. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(q)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          The Credit Parties further agree, upon request of the Lender and at the
          Lender&#146;s option, to take any and all other actions as the Lender may
          reasonably request with respect to the attachment, perfection and First Priority
          (subject to Permitted Liens) of, and the ability of the Lender to enforce, the
          Lender&#146;s security interest in any and all of the Collateral. </FONT></P>

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<A NAME=A036></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>4.3 Collection of
Proceeds of Accounts Receivable. </FONT></H1>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          On or before the Closing Date, the Credit Parties shall (i) establish accounts,
          including, without limitation, the Blocked Account (as defined in the Dominion
          Account Agreement) (each a &#147;Controlled Account &#148; and collectively the
          &#147;Controlled Accounts&#148;) in the Lender&#146;s name for the benefit of
          the Borrower with the Cash Management Bank, into which the Credit Parties will
          immediately deposit all payments made for inventory or services sold or rendered
          by the Credit Parties and received by the Credit Parties in the identical form
          in which such payments were made, whether by cash or check, (ii) direct all of
          their account debtors to make all payments on accounts receivable of the Credit
          Parties directly to the Controlled Account under the control of the Cash
          Management Bank, and (iii) cause each Subsidiary and Affiliate, and any other
          Person acting for or in concert with the Credit Parties that receives any
          monies, checks, notes, drafts or other payments relating to or as proceeds of
          accounts receivable or other Collateral, to receive and hold such items in trust
          for, and as the sole and exclusive property of, the Lender and, immediately upon
          receipt thereof, shall remit the same (or cause the same to be remitted) in hand
          to the Controlled Accounts; <I>provided</I> that, for purposes of administrative
          convenience, the Lender may in its reasonable discretion, permit the Credit
          Parties from time to time to maintain one or more accounts with one or more
          financial institutions other than the Cash Management Bank and with such maximum
          cash balances as the Lender deems appropriate, and for which the Credit Parties
          may, at the discretion of the Lender, be permitted to have direct access. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Each Credit Party acknowledges that the Cash Management Bank is an affiliate of
          the Lender and that the Cash Management Bank and the Lender are parties to cash
          management agreements that confirm that the Lender has dominion and control over
          all accounts of the Credit Parties or the Lender maintained by the Cash
          Management Bank, and all funds from time to time held in such accounts. The
          Borrower, the Lender and the Cash Management Bank hereby agree that the Cash
          Management Bank shall comply with any instructions originated by the Lender
          directing disposition of funds in such accounts without further consent of the
          Borrower. Each Credit Party agrees to enter into such Control Agreements with
          the Cash Management Bank and the Lender as the Lender may reasonably request.
          Each Credit Party also agrees to cause each financial institution other than the
          Cash Management Bank with which a Controlled Account has been established to,
          enter into a Control Agreement confirming that the amounts on deposit in such
          Controlled Account are the property of and are under the control of the Lender,
          that such financial institution has no right to setoff against such Controlled
          Account or against any other account maintained by such financial institution
          into which the contents of such Controlled Account are transferred, and that
          upon written notice from the Lender, such financial institution shall wire, or
          otherwise transfer in immediately available funds in a manner satisfactory to
          the Lender, funds deposited in the Controlled Account on a daily basis as such
          funds are collected. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          The Credit Parties agree to pay all reasonable fees, costs and expenses which
          the Credit Parties incur in connection with opening and maintaining a Controlled
          Account. All of such fees, costs and expenses which remain unpaid pursuant to
          any Controlled Account or Control Agreement with the Credit Parties, to the
          extent same shall have been paid by the Lender hereunder, shall constitute Loans
          hereunder, shall be payable to the Lender by the Credit Parties upon demand,
          and, until paid, shall bear interest at the highest rate then applicable to
          Loans hereunder. All checks, drafts, instruments and other items of payment or
          proceeds of Collateral delivered to the Lender or the Cash Management Bank in
          kind shall be endorsed by the Credit Parties, to the Lender, and, if that
          endorsement of any such item shall not be made for any reason, the Lender and
          the Cash Management Bank are each hereby irrevocably authorized to endorse the
          same on behalf of the Credit Parties. For the purpose of this subsection 4.3(c),
          each Credit Party irrevocably hereby makes, constitutes and appoints the Lender
          (and all Persons designated by the Lender for that purpose, including, without
          limitation, the Cash Management Bank) as such Credit Party&#146;s true and
          lawful attorney and agent-in-fact (i) to endorse the name of the such Credit
          Party upon said items of payment and/or proceeds of Collateral of the Credit
          Parties and upon any chattel paper, document, instrument, invoice or similar
          document or agreement relating to any account receivable of the Credit Parties
          or goods pertaining thereto; (ii) to take control in any manner of any item of
          payment or proceeds thereof; (iii) to have access to any lock box or postal box
          into which any mail of the Credit Parties is deposited; and (iv) open and
          process all mail addressed to the Credit Parties and deposited therein. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          The Lender (and all Persons designated by the Lender for such purpose,
          including, without limitation, the Cash Management Bank) may, at any time and
          from time to time after the occurrence and during the continuance of an Event of
          Default, whether before or after notification to any account debtor and whether
          before or after the maturity of any of the Obligations,<B> </B>(i) enforce
          collection of any accounts receivable or contract rights of the Credit Parties
          by suit or otherwise; (ii) exercise all of the rights and remedies of the Credit
          Parties with respect to proceedings brought to collect any accounts receivable;
          (iii) surrender, release or exchange all or any part of any accounts receivable
          of the Credit Parties, or compromise or extend or renew for any period (whether
          or not longer than the original period) any indebtedness thereunder; (iv) sell
          or assign any account receivable of the Credit Parties upon such terms, for such
          amount and at such time or times as the Lender deems advisable;<B> </B>(v)
          prepare, file and sign the names of the Credit Parties on any proof of claim in
          bankruptcy or other similar document against any account debtor indebted on an
          account receivable of the Credit Parties; and (vi) do all other acts and things
          which are necessary, in the Lender&#146;s sole discretion, to fulfill the
          Obligations of the Credit Parties under this Agreement and to allow the Lender
          to collect the accounts receivable. In addition to any other provision hereof or
          in any of the other Loan Documents, the Lender may at any time on or after the
          occurrence of an Event of Default, at the sole expense of the Credit Parties,
          notify any parties obligated on any of the accounts receivable of the Credit
          Parties to make payment directly to the Lender of any amounts due or to become
          due thereunder. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.4 <B>Fixtures, etc.</B> It is the
intention of the parties hereto that (except for Collateral located on any Mortgaged
Property) none of the Collateral shall become fixtures and each Credit Party will take all
such reasonable action or actions as may be necessary to prevent any of the Collateral
from becoming fixtures. Without limiting the generality of the foregoing, each Credit
Party will, if requested by the Lender, use commercially reasonable efforts to obtain
waivers of Liens, in form satisfactory to the Lender, from each lessor of real property on
which any of the Collateral is or is to be located to the extent requested by the Lender. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.5 <B>Right of Lender to Dispose of
Collateral, etc.</B> Upon the occurrence of any Event of Default, such Event of Default
not having previously been waived, remedied or cured, but subject to the provisions of the
Uniform Commercial Code or other applicable law, in addition to all other rights under
applicable law and under the Loan Documents, the Lender shall have the right to take
possession of the Collateral and, in addition thereto, the right to enter upon any
premises on which the Collateral or any part thereof may be situated and remove the same
therefrom. The Lender may require the Credit Parties to make the Collateral (to the extent
the same is moveable) available to the Lender at a place to be designated by the Lender or
transfer any information related to the Collateral to the Lender by electronic medium.
Unless the Collateral is perishable or threatens to decline speedily in value or is of a
type customarily sold on a recognized market, the Lender will give the Credit Parties at
least ten (10) days&#146; prior written notice of the time and place of any public sale
thereof or of the time after which any private sale or any other intended disposition
thereof is to be made. Any such notice shall be deemed to meet any requirement hereunder
or under any applicable law (including the Uniform Commercial Code) that reasonable
notification be given of the time and place of such sale or other disposition. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.6 <B>Right of Lender to Use and
Operate Collateral, etc.</B> Upon the occurrence and during the continuance of any Event
of Default, subject to the provisions of the Uniform Commercial Code or other applicable
law, the Lender shall have the right and power (a) to take possession of all or any part
of the Collateral, and to exclude the Credit Parties and all persons claiming under the
Credit Parties wholly or partly therefrom, and thereafter to hold, store, and/or use,
operate, manage and control the same, and (b) to grant a license to use, or cause to be
granted a license to use, any or all of the Patents, Trademarks and Copyrights (in the
case of Trademarks, along with the goodwill associated therewith), but subject to the
terms of any licenses. Upon any such taking of possession, the Lender may, from time to
time, at the expense of the Credit Parties, make all such repairs, replacements,
alterations, additions and improvements to and of the Collateral as the Lender may deem
proper. In any such case the Lender shall have the right to manage and control the
Collateral and to carry on the business and to exercise all rights and powers of the
Credit Parties in respect thereto as the Lender shall deem best, including the right to
enter into any and all such agreements with respect to the operation of the Collateral or
any part thereof as the Lender may see fit; and the Lender shall be entitled to collect
and receive all rents, issues, profits, fees, revenues and other income of the same and
every part thereof. Such rents, issues, profits, fees, revenues and other income shall be
applied to pay the expenses of holding and operating the Collateral and of conducting the
business thereof, and of all maintenance, repairs, replacements, alterations, additions
and improvements, and to make all payments which the Lender may be required or may elect
to make, if any, for taxes, assessments, insurance and other charges upon the Collateral
or any part thereof, and all other payments which the Lender may be required or authorized
to make under any provision of this Agreement (including legal costs and reasonable
attorneys&#146; fees). The Lender shall apply the remainder of such rents, issues,
profits, fees, revenues and other income as provided in<B> </B>Section 4.7.
Notwithstanding anything contained herein to the contrary, the Borrower shall have the
right to sell, transfer, license, exchange, assign or otherwise dispose of the Patents and
Trademarks to the extent permitted by each of the Negative Pledge Agreements and subject
to section 2.6(b)(iii) hereof. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.7 <B>Proceeds of Collateral</B>.
After deducting all reasonable costs and expenses of collection, storage, custody, sale or
other disposition and delivery (including reasonable legal costs and attorneys&#146; fees)
and all other charges against the Collateral, the Lender shall apply the residue of the
proceeds of any such sale or disposition to the Obligations in accordance with the terms
hereof and any surplus shall be returned to the Credit Parties or to any Person or party
lawfully entitled thereto (including, if applicable, any holders of Subordinated
Indebtedness). In the event the proceeds of any sale, lease or other disposition of the
Collateral are insufficient to pay all of the Obligations in full, the Credit Parties will
be liable for the deficiency, together with interest thereon at the Post-Default Rate, and
the cost and expenses of collection of such deficiency, including (to the extent permitted
by law), without limitation, reasonable attorneys&#146; fees, expenses and disbursements. </FONT></P>

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<A NAME=A037></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>ARTICLE 5 </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold 1" FSL="Default" -->
<A NAME=A038></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Representations and
Warranties </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
Credit Party represents and warrants to the Lender and the Issuing Lender as to itself and
each other Credit Party, that: </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.1 <B>Organization; Powers</B>. Each
Credit Party has been duly formed or organized and is validly existing and in good
standing under the laws of its jurisdiction of organization. Each Credit Party 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 have such power or authority or to be so
qualified or in good standing, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.2 <B>Authorization;
Enforceability</B>. The borrowing of the Loans and the grant of security interests
pursuant to the Loan Documents are within the power and authority of the Credit Parties
and have been duly authorized by all necessary action on the part of the Credit Parties.
This Agreement and the other Loan Documents have been duly authorized, executed and
delivered by the Credit Parties and constitute legal, valid and binding obligations of the
Credit Parties, enforceable in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors&#146; rights generally and subject to general principles of equity, regardless
of whether considered in a proceeding in equity or at law. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.3 <B>Governmental Approvals; No
Conflicts</B>. The borrowing of the Loans and the grant of the security interests pursuant
to the Loan Documents (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority which has not been
obtained, except as disclosed on <U>Schedule 5.3</U>, (b) will not violate any applicable
law, policy or regulation or the organizational documents of the Credit Parties or any
order of any Governmental Authority, (c) will not violate or result in a default under any
indenture, agreement or other instrument binding upon the Credit Parties, or any assets,
or give rise to a right thereunder to require any payment to be made by the Credit
Parties, and such violation or default or right to payment would have a Material Adverse
Effect, and (d) except for the Liens created by the Loan Documents, will not result in the
creation or imposition of any Lien on any asset of the Credit Parties. </FONT></P>

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<A NAME=A039></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>5.4 Financial Condition;
No Material Adverse Change. </FONT></H1>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          The Credit Parties have heretofore delivered to the Lender the following
          financial statements: </FONT></P>
</TD>
          </TR>
          </TABLE>
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     <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
          <TR VALIGN=TOP>
          <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(i) </FONT></TD>
          <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the consolidated balance sheets and statements of operations, shareholders&#146;
          equity and cash flows of the Borrower and all Subsidiaries, as of and for the
          fiscal years ended December 31, 2000, and December 31, 2001, and December 31,
          2002, audited and accompanied by an opinion of the Borrower&#146;s independent
          public accountants; </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>

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     <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
          <TR VALIGN=TOP>
          <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(ii) </FONT></TD>
          <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the unaudited consolidated balance sheet and statements of operations,
          shareholder&#146;s equity and cash flows of the Borrower and all Subsidiaries,
          as of and for the fiscal quarter-to-date period ended March 30, 2003, certified
          by a Designated Financial Officer that such financial statements fairly present
          the financial condition of the Borrower and all Subsidiaries as at such date and
          the results of the operations of the Borrower and all Subsidiaries for the
          period ended on such date and that all such financial statements, including the
          related schedules and notes thereto have been prepared in all material respects
          in accordance with GAAP applied consistently throughout the periods involved,
          except as disclosed on <U>Schedule&nbsp;5.4</U>; and </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>

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     <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
          <TR VALIGN=TOP>
          <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(iii) </FONT></TD>
          <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the projected statements of operations for the Borrower and all Subsidiaries on
          a monthly basis for fiscal year 2003 and on an annual basis for 2004 . </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
          <TR VALIGN=TOP>
          <TD>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except
as disclosed on <U>Schedule&nbsp;5.4</U>, such financial statements described in clauses
(a)(i) and (a)(ii) above present fairly, in all material respects, the respective
consolidated financial position and results of operations and cash flows of the respective
entities as of such respective dates and for such periods in accordance with GAAP, subject
to year-end audit adjustments and the absence of footnotes in the case of such unaudited
or <I>pro forma</I> statements. The projections were prepared by the Borrower in good
faith and were based on assumptions that were reasonable when made. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Except as disclosed on <U>Schedule&nbsp;5.4</U>, since December 31, 2002, there
          has been no material adverse change in the business, assets, operations or
          condition, financial or otherwise, of the Credit Parties from that set forth in
          the December 31, 2002 financial statements referred to in clause (ii) of
          paragraph (a) above. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          None of the Credit Parties has on the date hereof any contingent liabilities,
          liabilities for taxes, unusual forward or long-term commitments or unrealized or
          anticipated losses from any unfavorable commitments in each case that are
          material, except as referred to or reflected or provided for in the balance
          sheets as at the end of their respective fiscal years ended in 2000, 2001 and
          2002, referred to above, as provided for in <U>Schedule&nbsp;5.4</U> annexed
          hereto, or as otherwise permitted pursuant to this Agreement, or as referred to
          or reflected or provided for in the financial statements described in this
          Section&nbsp;5.4. </FONT></P>

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<A NAME=A040></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>5.5 Properties. </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Each Credit Party has good and marketable title to, or valid, subsisting and
          enforceable leasehold interests in, all its Property (including the Collateral)
          material to its business. All machinery and equipment of the Credit Parties is
          in good operating condition and repair, and all necessary replacements of and
          repairs thereto have be made so as to preserve and maintain the value and
          operating efficiency of such machinery and equipment. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Set forth on <U>Schedule 5.5</U> hereto is a complete list of all Patents,
          Trademarks and Copyrights. Each Credit Party owns, or is licensed to use, all
          Patents, Trademarks and Copyrights and other intellectual property material to
          its business <U>(&#147;Proprietary Rights</U>&#148;), and to the knowledge of
          the Borrower, the use thereof by the Credit Parties 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. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Schedule 5.5</U> clearly identifies all Patents, Trademarks and Copyrights
          that have been duly registered in, filed in or issued by the PTO or the United
          States Register of Copyrights (collectively, the &#147;<U>Registered Proprietary
          Rights</U>&#148;). The Registered Proprietary Rights have been properly
          maintained and renewed in accordance with all applicable provisions of law and
          administrative regulations in the United States, as applicable. The Credit
          Parties have taken commercially reasonable steps to protect their Registered
          Proprietary Rights and to maintain the confidentiality of all Proprietary Rights
          that are not generally in the public domain. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          As of the date hereof, <U>Schedule&nbsp;5.5</U> annexed hereto contains a true,
          accurate and complete list of (i) all Real Property Assets, whether owned or
          leased, and (ii) all leases, subleases or assignments of leases (together with
          all amendments, modifications, supplements, renewals or extensions of any
          thereof) affecting each Leasehold Property, regardless of whether such Credit
          Party is the landlord or tenant (whether directly or as an assignee or successor
          in interest) under such lease, sublease or assignment. Except as specified in
          <U>Schedule&nbsp;5.5</U>, each agreement listed in clause (ii) of the
          immediately preceding sentence is in full force and effect and the Borrower has
          no knowledge of any default that has occurred and is continuing thereunder, and
          each such agreement constitutes the legal, valid and binding obligation of each
          applicable Credit Party, enforceable against such Credit Party in accordance
          with its terms, except as enforcement may be limited by bankruptcy, insolvency,
          reorganization, moratorium or similar laws relating to or limiting
          creditors&#146; rights generally or by equitable principles. </FONT></P>

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<A NAME=A041></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>5.6 Litigation and
Environmental Matters. </FONT></H1>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          There are no actions, suits or proceedings by or before any arbitrator or
          Governmental Authority pending against or, to the knowledge of the Credit
          Parties, threatened against or affecting any Credit Party as to which there is a
          reasonable possibility of an adverse determination and that, if adversely
          determined, could reasonably be expected, individually or in the aggregate, to
          result in a Material Adverse Effect (other than the Disclosed Matters set forth
          in part (a) of <U>Schedule 5.6</U>). </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Except for the Disclosed Matters set forth in <U>Schedule 5.6</U> and except
          with respect to any other matters that, individually or in the aggregate, could
          not reasonably be expected to result in a Material Adverse Effect, the Credit
          Parties (i) have not failed to comply with any Environmental Law or to obtain,
          maintain or comply with any permit, license or other approval required in
          connection with the operation of the Credit Parties&#146; business to be in
          compliance with all applicable Environmental Laws, (ii) have not become subject
          to any Environmental Liability; (iii) have not received notice of any claim with
          respect to any Environmental Liability or any inquiry, allegation, notice or
          other communication from any Governmental Authority which is currently
          outstanding or pending concerning its compliance with any Environmental Law or
          (iv) do not know of any basis for any Environmental Liability. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Since the date of this Agreement, there has been no change in the status of the
          Disclosed Matters that, individually or in the aggregate, has resulted in, or
          materially increased the likelihood of, a Material Adverse Effect. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.7 <B>Compliance with Laws and
Agreements</B>. Except as set forth on <U>Schedule&nbsp;5.7</U>, each Credit Party is in
compliance with all laws, regulations, policies and orders of any Governmental Authority
applicable to it or its property and all indentures, agreements and other instruments
binding upon it or its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse Effect. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.8 <B>Investment and Holding Company
Status</B>. No Credit Party is (a) an &#147;investment company&#148; as defined in, or
subject to regulation under, the Investment Company Act of 1940, as amended, (b) a
&#147;holding company&#148; as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935, as amended or (c) a &#147;bank holding company&#148;
as defined in, or subject to regulation under, the Bank Holding Company Act of 1956, as
amended. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.9 <B>Taxes</B>. Except as set forth
on <U>Schedule&nbsp;5.9</U>, each Credit Party has timely filed or caused to be filed all
Tax returns and reports required to have been filed and has paid or caused to be paid all
Taxes required to have been paid by it, except (a) Taxes that are being contested in good
faith by appropriate proceedings and for which such Credit Party has set aside on its
books adequate reserves with respect thereto in accordance with GAAP, which reserves shall
be acceptable to Lender, or (b) to the extent that the failure to do so could not
reasonably be expected to result in a Material Adverse Effect. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.10 <B>ERISA</B>. Except as set
forth on <U>Schedule 5.10</U>, no Credit Party has any Pension Plans. No ERISA Event has
occurred or is reasonably expected to occur that, when taken together with all other such
ERISA Events for which liability is reasonably expected to occur, could reasonably be
expected to result in a Material Adverse Effect. No Credit Party has a present intention
to terminate any Pension Plan with respect to which any Credit Party would incur a cost of
more than $100,000 to terminate such Plan, including amounts required to be contributed to
fund such Plan on Plan termination and all costs and expenses associated therewith,
including without limitation attorneys&#146; and actuaries&#146; fees and expenses in
connection with such termination and a reasonable estimate of expenses and settlement or
judgment costs and attorneys&#146; fees and expenses in connection with litigation related
to such termination. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.11 <B>Disclosure</B>. As of the
Effective Time, the Credit Parties have disclosed to the Lender all material agreements,
instruments and corporate or other restrictions to which any Credit Party is subject after
the Effective Time, and all other matters known to the Credit Parties, that, individually
or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.
The organizational structure of the Credit Parties is as set forth on <U>Schedule 5.12</U>
annexed hereto. To the knowledge of the Borrower, the information, reports, financial
statements, exhibits and schedules furnished at or prior to the Effective Time in writing
by or on behalf of the Credit Parties to the Lender in connection with the negotiation,
preparation or delivery of this Agreement and the other Loan Documents or included herein
or therein or delivered pursuant hereto or thereto, at the Effective Time, when taken as a
whole do not contain any untrue statement of material fact or omit to state any material
fact necessary to make the statements herein or therein, in light of the circumstances
under which they were made, not materially misleading. To the knowledge of the Borrower,
all written information furnished after the Effective Time by the Credit Parties to the
Lender in connection with this Agreement and the other Loan Documents and the transactions
contemplated hereby and thereby will be true, complete and accurate in every material
respect, or (in the case of pro-forma information and projections) prepared in good faith
based on reasonable assumptions, on the date as of which such information is stated or
certified. There is no fact known to the Credit Parties that could reasonably be expected
to have a Material Adverse Effect that has not been disclosed herein, in the other Loan
Documents or in a report, financial statement, exhibit, schedule, disclosure letter or
other writing furnished to the Lender for use in connection with the transactions
contemplated hereby or thereby. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.12 <B>Capitalization</B>. As of the
Effective Time, the capital structure and ownership of the Credit Parties are correctly
described on <U>Schedule&nbsp;5.12</U>. As of the Effective Time, the authorized, issued
and outstanding capital stock of the Credit Parties consists of the capital stock
described on <U>Schedule&nbsp;5.12</U>, all of which is duly and validly issued and
outstanding, fully paid and nonassessable. Except as set forth on
<U>Schedule&nbsp;5.12</U>, as of the date hereof, (x) there are no outstanding Equity
Rights with respect to any Credit Party and, (y) there are no outstanding obligations of
any Credit Party to repurchase, redeem, or otherwise acquire any shares of capital stock
of or other interest in any Credit Party, nor are there any outstanding obligations of any
Credit Party to make payments to any Person, such as &#147;phantom stock&#148; payments,
where the amount thereof is calculated with reference to the fair market value or equity
value of any Credit Party. </FONT></P>

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<A NAME=A042></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>5.13 Subsidiaries. </FONT></H1>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Set forth on <U>Schedule&nbsp;5.13</U> is a complete and correct list of all
          Subsidiaries of the Credit Parties 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. Except as
          disclosed in <U>Schedule&nbsp;5.13</U>, (x) each Credit Party and its respective
          Subsidiaries owns, free and clear of Liens (other than Liens permitted
          hereunder), and has the unencumbered right to vote, all outstanding ownership
          interests in each Person shown to be held by it in <U>Schedule&nbsp;5.13</U>,
          (y) all of the issued and outstanding capital stock of each such Person
          organized as a corporation is validly issued, fully paid and nonassessable and
          (z) there are no outstanding Equity Rights with respect to such Person. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Except as set forth on <U>Schedule&nbsp;8.8</U>, as of the date of this
          Agreement none of the Credit Parties is subject to any indenture, agreement,
          instrument or other arrangement containing any provision of the type described
          in Section&nbsp;8.8 (&#147;<U>Restrictive Agreements</U>&#148;), other than any
          such provision the effect of which has been unconditionally, irrevocably and
          permanently waived. </FONT></P>

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<A NAME=A043></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>5.14 Material
Indebtedness, Liens and Agreements. </FONT></H1>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Schedule&nbsp;5.14</U> hereto contains a complete and correct list, as of the
          date of this Agreement, of all Material Indebtedness or any extension of credit
          (or commitment for any extension of credit) to, or guarantee by, any Credit
          Party the aggregate principal or face amount of which equals or exceeds (or may
          equal or exceed) $500,000, and the aggregate principal or face amount
          outstanding or that may become outstanding with respect thereto is correctly
          described on <U>Schedule&nbsp;5.14</U>. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Schedule&nbsp;5.14</U> hereto is a complete and correct list, as of the date
          of this Agreement, of each Lien (other than the Liens in favor of the Lender)
          securing Indebtedness of any Person and covering any property of the Credit
          Parties, and the aggregate Indebtedness secured (or which may be secured) by
          each such Lien and the Property covered by each such Lien is correctly described
          in the appropriate part of <U>Schedule&nbsp;5.14</U>. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Schedule&nbsp;5.14</U> hereto is a complete and correct list, as of the date
          of this Agreement, of each contract and arrangement to which any Credit Party is
          a party for which breach, nonperformance, cancellation or failure to renew would
          have a Material Adverse Effect other than purchase orders made in the ordinary
          course of business and subject to customary terms. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          To the extent requested by Lender, true and complete copies of each agreement
          listed on the appropriate part of <U>Schedule&nbsp;5.14</U> have been delivered
          to the Lender, together with all amendments, waivers and other modifications
          thereto. All such agreements are valid, subsisting, in full force and effect,
          are currently binding and will continue to be binding upon each Credit Party
          that is a party thereto and, to the best knowledge of the Credit Parties,
          binding upon the other parties thereto in accordance with their terms. The
          Credit Parties are not in default under any such agreements, which default could
          have a Material Adverse Effect. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.15 <B>Federal Reserve
Regulations</B>. No Credit Party is engaged principally or as one of its important
activities in the business of extending credit for the purpose of purchasing or carrying
margin stock (as defined in Regulation&nbsp;U of the Board). The making of the Loans
hereunder, the use of the proceeds thereof as contemplated hereby, and the security
arrangements contemplated by the Loan Documents, will not violate or be inconsistent with
any of the provisions of Regulations T, U, or X of the Board of Governors of the Federal
Reserve System. </FONT></P>

5.16     Solvency.  As of the Effective Time and after giving effect to the initial Loans hereunder:

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          the aggregate value of all properties of the Credit Parties at their present
          fair saleable value on a going concern basis (<I>i.e.</I>, the amount that may
          be realized within a reasonable time, considered to be six months to one year,
          either through collection or sale at the regular market value, conceiving the
          latter as the amount that could be obtained for such properties within such
          period by a capable and diligent businessman from an interested buyer who is
          willing to purchase under ordinary selling conditions), exceed the amount of all
          the debts and liabilities (including contingent, subordinated, unmatured and
          unliquidated liabilities) of the Credit Parties; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          the Credit Parties will not, on a consolidated basis, have an unreasonably small
          capital with which to conduct their business operations as heretofore conducted;
          and </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          the Credit Parties will have, on a consolidated basis, sufficient cash flow to
          enable them to pay their debts as they mature. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.17 <B>Force Majeure</B>. Since
March 31, 2003, the business, properties and other assets of the Credit Parties have not
been materially and adversely affected in any way as the result of any fire or other
casualty, strike, lockout or other labor trouble, embargo, sabotage, confiscation,
contamination, riot, civil disturbance, activity of armed forces or act of God. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.18 <B>Accounts Receivable</B>. The
Lender may rely, in determining which accounts receivable are Eligible Accounts, on all
statements and representations made by the Credit Parties with respect to such accounts
receivable. Unless otherwise indicated to the Lender in writing: </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Each account receivable is genuine and in all respects what it purports to be,
          and it is not evidenced by a judgment; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Each account receivable arises out of a completed, bona fide sale and delivery
          of goods or rendition of services by a Credit Party in the ordinary course of
          its business and in accordance with the terms and conditions of all purchase
          orders, contracts or other documents relating thereto and forming a part of the
          contract between such Credit Party and the account debtor, and, in the case of
          goods, title to the goods has passed from the Credit Party to the account
          debtor; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Each account receivable is for a liquidated amount maturing as stated in the
          duplicate invoice covering such sale or rendition of services, a copy of which
          has been furnished or is available to the Lender; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Each account receivable, and the Lender&#146;s security interest therein, is
          not, and will not (by voluntary act or omission of the Credit Parties) be in the
          future, subject to any offset, Lien, deduction, defense, dispute, counterclaim
          or any other adverse condition except for disputes resulting in returned goods
          where the amount in controversy is deemed by the Lender to be immaterial, and
          each such account receivable is absolutely owing to one of the Credit Parties
          and is not contingent in any respect or for any reason; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          No Credit Party has made any agreement with any account debtor for any
          extension, compromise, settlement or modification of any account receivable or
          any deduction therefrom, except discounts or allowances which are granted by the
          Credit Parties in the ordinary course of their businesses for prompt payment and
          which are reflected in the calculation of the net amount of each respective
          invoice related thereto and are reflected in the Borrowing Base Certificates and
          Collateral Update Certificates furnished to the Lender hereunder; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          To the best knowledge of the Credit Parties, the account debtor under each
          account receivable had the capacity to contract at the time any contract or
          other document giving rise to an account receivable was executed and such
          account debtor is not insolvent; and </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          To the best knowledge of the Credit Parties, there are no proceedings or actions
          which are threatened or pending against any account debtor which might result in
          any material adverse change in such account debtor&#146;s financial condition or
          the collectability of any account receivable. </FONT></P>

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<A NAME=A044></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>5.19 Labor and
Employment Matters. </FONT></H1>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Except as set forth on <U>Schedule&nbsp;5.19</U> as of the Effective Time, and
          thereafter with respect to which such would have a Material Adverse Effect, (A)
          no employee of the Credit Parties is represented by a labor union, no labor
          union has been certified or recognized as a representative of any such employee,
          and the Credit Parties do not have any obligation under any collective
          bargaining agreement or other agreement with any labor union or any obligation
          to recognize or deal with any labor union, and there are no such contracts or
          other agreements pertaining to or which determine the terms or conditions of
          employment of any employee of the Credit Parties; (B) there are no pending or
          threatened representation campaigns, elections or proceedings; (C) the Credit
          Parties do not have knowledge of any strikes, slowdowns or work stoppages of any
          kind, or threats thereof, and no such activities occurred during the 24-month
          period preceding the date hereof; (D) no Credit Party has engaged in, admitted
          committing or been held to have committed any unfair labor practice; and (E)
          there are no controversies or grievances between any Credit Party and any of its
          employees or representatives thereof. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Except as set forth on <U>Schedule&nbsp;5.19</U>, the Credit Parties have at all
          times complied in all material respects, and are in material compliance with,
          all applicable laws, rules and regulations respecting employment, wages, hours,
          compensation, benefits, and payment and withholding of taxes in connection with
          employment. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Except as set forth on <U>Schedule&nbsp;5.19</U>, except as could not reasonably
          be expected to have, individually or in the aggregate, a Material Adverse
          Effect, the Credit Parties have at all times complied with, and are in
          compliance with, all applicable laws, rules and regulations respecting
          occupational health and safety, whether now existing or subsequently amended or
          enacted, including, without limitation, the Occupational Safety &amp; Health Act
          of 1970, 29 U.S.C. Section&nbsp;651 et seq. and the state analogies thereto, all
          as amended or superseded from time to time, and any common law doctrine relating
          to worker health and safety. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.20 <B>Bank Accounts</B>.
<U>Schedule 5.20</U> lists all banks and other financial institutions at which any Credit
Party maintains deposits and/or other accounts as of the Closing Date, and such Schedule
correctly identifies the name and address of each depository, the name in which the
account is held, a description of the purpose of the account, and the complete account
number. </FONT></P>

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<A NAME=A045></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>ARTICLE 6 </FONT></H1>

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<A NAME=A046></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Conditions </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>6.1 <B>Effective Time</B>. The
obligations of the Lender to make Revolving Loans, and of the Issuing Lender to issue
Letters of Credit hereunder shall not become effective until the date on which each of the
following conditions is satisfied (or waived in accordance with Section&nbsp;10.2): </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Counterparts of Agreement</U>. The Lender shall have received from each party
          hereto either (i) an original counterpart of each of the Loan Documents signed
          on behalf of such party or (ii) written evidence satisfactory to the Lender
          (which may include telecopy transmission of a signed signature page of each of
          the Loan Documents) that such party has signed a counterpart of each of the Loan
          Documents. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Note</U>. The Lender shall have received a duly completed and executed
          Amended and Restated Revolving Credit Note. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Organizational Structure</U>. The corporate organizational structure,
          capitalization and ownership of the Credit Parties, shall be as set forth on
          <U>Schedules 5.12</U> and <U>5.13</U> annexed hereto. The Lender shall have had
          the opportunity to review, and shall be satisfied with, the Credit Parties&#146;
          state and federal tax assumptions, and the ownership, capital, organization and
          structure of the Credit Parties. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Existence and Good Standing</U>. The Lender shall have received such
          documents and certificates as the Lender or Special Counsel may reasonably
          request relating to the organization, existence and good standing of each Credit
          Party, the authorization of the transactions contemplated hereby and any other
          legal matters relating to the Credit Parties, this Agreement or the other Loan
          Documents, all in form and substance reasonably satisfactory to the Lender and
          Special Counsel. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Security Interests in Personal and Mixed Property</U>. The Lender shall have
          received evidence satisfactory to it that the Credit Parties shall have taken or
          caused to be taken all such actions, executed and delivered or caused to be
          executed and delivered all such agreements, documents and instruments and made
          or caused to be made all such filings and recordings (other than filings or
          recordings to be made by the Lender on or after the Closing Date) that may be
          necessary or, in the opinion of the Lender, desirable in order to create in
          favor of the Lender, valid and (upon such filing and recording) perfected First
          Priority security interests in the entire personal and mixed property Collateral
          other than such property and assets which are the subject of Permitted Liens
          pursuant to Section&nbsp;8 hereof. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Leases; Landlord&#146;s Waivers and Consents</U>. In the case of each
          Material Leasehold Property existing as of the Closing Date, copies of the
          lease, and all amendments thereto, between the Credit Party and the landlord or
          tenant party thereto, together with a Landlord&#146;s Waiver and Consent with
          respect thereto and where required by the terms of any lease, the consent of the
          mortgagee, ground lessor or other party. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Evidence of Insurance</U>. The Lender shall have received certificates from
          the Credit Parties&#146; insurance brokers that all insurance required to be
          maintained pursuant to Section&nbsp;7.5 is in full force and effect and that the
          Lender has been named as additional insured or loss payee thereunder to the
          extent required under Section&nbsp;7.5. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Necessary Governmental Permits, Licenses and Authorizations and Consents;
          Etc</U>. The Credit Parties shall have obtained all other permits, licenses,
          authorizations and consents from all other Governmental Authorities and all
          consents of other Persons with respect to Material Indebtedness, Liens and
          material agreements listed on <U>Schedule&nbsp;5.14</U> (and so identified
          thereon) annexed hereto, in each case that are necessary or advisable in
          connection with the transactions contemplated by the Loan Documents, and each of
          the foregoing shall be in full force and effect, in each case other than those
          the failure to obtain or maintain which, either individually or in the
          aggregate, would not reasonably be expected to have a Material Adverse Effect.
          No action, request for stay, petition for review or rehearing, reconsideration
          or appeal with respect to any of the foregoing shall be pending, and the time
          for any applicable Governmental Authority to take action to set aside its
          consent on its own motion shall have expired. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Existing Debt; Liens</U>. The Lender shall have received evidence that all
          principal, interest, and other amounts owing in respect of all Existing Debt of
          the Credit Parties (other than Indebtedness permitted to remain outstanding in
          accordance with Section&nbsp;8.1 hereof) will be repaid in full as of the
          Effective Time, and that with respect to all Indebtedness permitted to remain
          outstanding in accordance with Section 8.1 hereof, any defaults or events of
          default existing as of the Closing Date with respect to such Indebtedness will
          be cured or waived immediately following the funding of the initial Loans. The
          Lender shall have received evidence that as of the Effective Time, the Property
          of the Credit Parties is not subject to any Liens (other than Liens permitted to
          remain outstanding in accordance with Section 8.2 hereof). </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Financial Statements; Projections</U>. The Lender shall have received the
          certified financial statements and projections referred to in Section&nbsp;5.4
          hereof and the same shall not be inconsistent with the information previously
          provided to the Lender. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Financial Officer Certificate</U>. The Lender shall have received a
          certificate, dated the Closing Date and signed by a Designated Financial
          Officer, confirming compliance with the conditions set forth in paragraphs (a)
          and (b) of Section&nbsp;6.2 at the Effective Time. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>No Material Adverse Change</U>. There shall have occurred no material adverse
          change (in the reasonable opinion of the Lender) in the businesses, operations,
          properties (including tangible properties), or conditions (financial or
          otherwise), assets, liabilities or income of the Credit Parties and the Other
          Obligors. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Opinion of Counsel to Credit Parties</U>. The Lender shall have received a
          favorable written opinion (addressed to the Lender and dated the Closing Date)
          of Foley Hoag LLP, special counsel to the Credit Parties, substantially in the
          form of <U>Exhibit I </U>annexed hereto and covering such matters relating to
          the Credit Parties, this Agreement, the other Loan Documents or the transactions
          contemplated hereby as the Lender shall reasonably request. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(n)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Borrowing Base and Collateral Update Certificates</U>. A Designated Financial
          Officer shall have executed and delivered to the Lender a Borrowing Base
          Certificate substantially in the form of <U>Exhibit B-1</U> annexed hereto,
          which Borrowing Base Certificate shall show Excess Availability under the
          Revolving Credit Commitment of not less than $500,000.00 (after giving effect to
          the payment of all sums and expenses, the issuance of all Letters of Credit and
          the funding of all Loans to be paid, issued or funded at the Effective Time),
          and a Collateral Update Certificate substantially in the form of <U>Exhibit
          B-2</U> annexed hereto. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(o)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Controlled Accounts</U>. The Credit Parties shall have established such
          Controlled Accounts with the Cash Management Bank as required in accordance with
          Section 4.3 hereof, and shall have entered into all Control Agreements as shall
          be required by the Lender. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(p)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Fees and Expenses</U>. The Lender and the Issuing Lender shall have received
          all fees and other amounts due and payable to such Person and Special Counsel at
          or prior to the Effective Time, including, to the extent invoiced, reimbursement
          or payment of all out-of-pocket expenses required to be reimbursed or paid by
          the Borrower hereunder. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(q)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Other Documents</U>. The Lender shall have received all material contracts,
          instruments, opinions, certificates, assurances and other documents as the
          Lender or Special Counsel shall have reasonably requested and the same shall be
          reasonably satisfactory to each of them. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>6.2 <B>Each Extension of Credit</B>.
The obligation of the Lender to make a Loan on the occasion of any Borrowing, and of the
Issuing Lender to issue, amend, renew or extend any Letter of Credit, is subject to the
satisfaction of the following conditions: </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Representations and Warranties</U>. The representations and warranties of
          each Credit Party set forth in this Agreement and the other Loan Documents shall
          be true and correct in all material respects on and as of the date of such
          Borrowing, or (as applicable) the date of issuance, amendment, renewal or
          extension of such Letter of Credit, both before and after giving effect thereto
          and to the use of the proceeds thereof (or, if any such representation or
          warranty is expressly stated to have been made as of a specific date, such
          representation or warranty shall be or have been true and correct as of such
          specific date and provided that, to the extent any change in circumstances
          expressly permitted by this Agreement causes any representation and warranty set
          forth herein to no longer be true, such representation and warranty shall be
          deemed modified to reflect such change in circumstances). </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>No Defaults</U>. At the time of, and immediately after giving effect to, such
          Borrowing, or (as applicable) the date of issuance, amendment, renewal or
          extension of such Letter of Credit, no Default shall have occurred and be
          continuing and the Borrower shall be in compliance with all applicable legal
          requirements. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Borrowing Base Certificate</U>. A Designated Financial Officer shall have
          executed and delivered to the Lender a Borrowing Base Certificate substantially
          in the form of <U>Exhibit B-1</U> annexed hereto, which Borrowing Base
          Certificate shall show Excess Availability as of the close of business on the
          immediately preceding Business Day of not less than $500,000.00 (after giving
          effect to the funding of such requested Loan or the issuance of such requested
          Letter of Credit). </FONT></P>

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<A NAME=A047></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>ARTICLE 7 </FONT></H1>

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<A NAME=A048></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Affirmative Covenants </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Until
the Revolving Credit Commitment has expired or been terminated and the principal of and
interest on each Loan and all fees payable hereunder shall have been paid in full and all
Letters of Credit shall have expired or terminated and all LC Disbursements shall have
been reimbursed, each Credit Party covenants and agrees with the Lender that: </FONT></P>

7.1      Financial Statements and Other Information.  The Credit Parties will furnish to the Lender:

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          as soon as available and in any event within 120 days after the end of each
          fiscal year of the Credit Parties: </FONT></P>
</TD>
          </TR>
          </TABLE>

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     <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
          <TR VALIGN=TOP>
          <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(i) </FONT></TD>
          <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          consolidated statements of operations, shareholders&#146; equity and cash flows
          of the Credit Parties and their Subsidiaries for such fiscal year and the
          related consolidated balance sheets of the Credit Parties and their Subsidiaries
          as at the end of such fiscal year, setting forth in each case in comparative
          form the corresponding consolidated figures for the preceding fiscal year, </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>

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     <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
          <TR VALIGN=TOP>
          <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(ii) </FONT></TD>
          <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          an opinion of independent certified public accountants of recognized national
          standing (without a &#147;going concern&#148; or like qualification or exception
          and without any qualification or exception as to the scope of such audit)
          stating that the consolidated financial statements referred to in the preceding
          clause (i) fairly present in all material respects the consolidated financial
          condition and results of operations of the Credit Parties and their Subsidiaries
          as at the end of, and for, such fiscal year in accordance with GAAP; and </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
          <TR VALIGN=TOP>
          <TD>
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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          a Compliance Certificate duly executed by a Designated Financial Officer. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          as soon as available and in any event within 30 days after the end of each
          month: </FONT></P>
</TD>
               </TR>
               </TABLE>
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          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%></TD>
               <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               consolidated statements of operations, shareholders&#146; equity and cash flows
               of the Credit Parties and their Subsidiaries for such month and for the period
               from the beginning of the respective fiscal year to the end of such month, and
               the related consolidated balance sheets of the Credit Parties and their
               Subsidiaries as at the end of such period, setting forth in each case in
               comparative form the corresponding consolidated figures for the corresponding
               period in the preceding fiscal year, and the corresponding figures for the
               forecasts most recently delivered to the Lender for such period, and </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD>
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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          a Compliance Certificate duly executed by a Designated Financial Officer; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          as soon as available and in any event within forty-five (45) days after the end
          of each fiscal quarter: </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(i)&nbsp;&nbsp;&nbsp;&nbsp;
          consolidated statements of operations of the Credit Parties and their
          Subsidiaries for such quarter and for the period from the beginning of the
          respective fiscal year to the end of such quarter, and the related balance
          sheets, shareholders&#146; equity and cash flows, on an unconsolidated basis, of
          the Credit Parties and their Subsidiaries as at the end of such period, setting
          forth in each case in comparative form the corresponding consolidated figures
          for the corresponding period in the preceding fiscal year, and </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(ii)&nbsp;&nbsp;&nbsp;&nbsp;
          a Compliance Certificate duly executed by a Designated Financial Officer; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          if any Loan is outstanding under this Agreement, as soon as available and in any
          event within twenty (20) days after the end of each month with respect to such
          month (or more frequently if requested by the Lender), (i) a Collateral Update
          Certificate in the form attached hereto as <U>Exhibit B-2</U>, (ii) an Accounts
          Receivable/Loan Reconciliation Report in the form attached hereto as <U>Exhibit
          B-3</U>, (iii) a summary of inventory by type and location, (iv)&nbsp;an
          accounts receivable aging report, and (v) such other information relating to the
          Collateral as the Lender shall reasonably request, in each case, accompanied by
          such supporting detail and documentation as the Lender shall reasonably request; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          if any Loan is outstanding under this Agreement, as soon as available and in any
          event no later than fifteen (15) days after the last Business Day of each month
          (or with such greater frequency as the Lender may request), a Borrowing Base
          Certificate in the form attached hereto as <U>Exhibit B-1</U>, with respect to
          the Collateral of the Borrower as of the close of business on such last Business
          Day, together with such information relating to the Collateral as the Lender
          shall reasonably request, and accompanied by such supporting detail and
          documentation as the Lender shall reasonably request; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          if any Loan is outstanding under this Agreement, as soon as available and in any
          event no later than 1:00 p.m. (Boston time) on each day that the Borrower makes
          any request for any Borrowing hereunder, an Advance Request in the form attached
          hereto as <U>Exhibit B-5</U>; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          as soon as available and in any event within 30 days after the beginning of the
          fiscal year of the Credit Parties, statements of forecasted consolidated income
          and cash flows for the Credit Parties for each fiscal month in such fiscal year
          and a forecasted consolidated balance sheet of the Credit Parties as of the last
          day of each fiscal month in such fiscal year, and a comparison of the projected
          Excess Availability as of the last day of each fiscal month in such fiscal year,
          together with supporting assumptions which were reasonable when made, all
          prepared in good faith in reasonable detail and consistent with the Credit
          Parties&#146; past practices in preparing projections and otherwise reasonably
          satisfactory in scope to the Lender; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          promptly upon receipt thereof, copies of all management letters and
          accountants&#146; letters received by the Credit Parties; and </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          promptly following any request therefor, such other information regarding the
          operations, business affairs and financial condition of the Credit Parties, or
          compliance with the terms of this Agreement, as the Lender may reasonably
          request. </FONT></P>

7.2      Notices of Material Events.  The Credit Parties will furnish to the Lender prompt written notice of the following:

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          the occurrence of any Default; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          the filing or commencement of any action, suit or proceeding by or before any
          arbitrator or Governmental Authority against or affecting any Credit Party,
          Subsidiary or Affiliate that could reasonably be expected to result in a
          Material Adverse Effect; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          the occurrence of any ERISA Event related to the Plan of any Credit Party or
          knowledge after due inquiry of any ERISA Event related to a Plan of any other
          ERISA Affiliate that, alone or together with any other ERISA Events that have
          occurred, could reasonably be expected to result in liability of the Credit
          Party in an aggregate amount exceeding $500,000; and </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          any other development that results in, or could reasonably be expected to result
          in, a Material Adverse Effect. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Each notice delivered under this
Section&nbsp;7.2 shall be accompanied by a statement of a Designated Financial Officer
setting forth the details of the event or development requiring such notice and any action
taken or proposed to be taken with respect thereto. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7.3 <B>Existence; Conduct of
Business</B>. Each Credit Party shall 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 material to the conduct of its business;
<I>provided</I> that the foregoing shall not prohibit any merger, consolidation,
liquidation, dissolution or any discontinuance or sale of such business permitted under
Section&nbsp;8.4. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7.4 <B>Payment of Obligations</B>.
Each Credit Party shall pay its obligations, including Tax liabilities, that, if not paid,
could result in a Material Adverse Effect 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) such Credit Party has set aside on its books adequate
reserves with respect thereto in accordance with GAAP, which reserves shall be acceptable
to Lender, and (c) the failure to make payment pending such contest could not reasonably
be expected to result in a Material Adverse Effect. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7.5 <B>Maintenance of Properties;
Insurance</B>. Each Credit Party shall (a) keep and maintain all property material to the
conduct of its business in good working order and condition, ordinary wear and tear
excepted, and (b) maintain insurance, with financially sound and reputable insurance
companies, as may be required by law and such other 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, including, without limitation,
business interruption and product liability insurance. Without limiting the generality of
the foregoing, the Credit Parties will maintain or cause to be maintained replacement
value casualty insurance on the Collateral under such policies of insurance, in each case
with such insurance companies, in such amounts, with such deductibles, and covering such
terms and risks as are at all times satisfactory to the Lender in its commercially
reasonable judgment. All general liability and other liability policies with respect to
the Credit Parties shall name the Lender as an additional insured thereunder as its
interests may appear, and all business interruption and casualty insurance policy shall
contain a loss payable clause or endorsement, satisfactory in form and substance to the
Lender that names the Lender as the loss payee thereunder. All policies of insurance shall
provide for at least 30 days prior written notice to the Lender of any modifications or
cancellation of such policy. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7.6 <B>Books and Inspection
Rights</B>. Each Credit Party shall keep proper books of record and account in which
entries are made of all dealings and transactions in relation to its business and
activities which fairly record such transactions and activities. Each Credit Party shall
permit any representatives designated by the Lender 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 as frequently as the
Lender deems appropriate <I>provided</I> that, so long as no Default has occurred and is
continuing, all such visits shall be on reasonable prior notice, at reasonable times
during regular business hours of such Credit Party, and <I>provided further </I>that after
the occurrence and during the continuance of any Default, the Lender may visit at any
reasonable times. The Borrower shall reimburse the Lender for all reasonable examination
and inspections costs, plus all out-of-pocket expenses incurred in connection with such
inspections. The Credit Parties will permit independent appraisers and environmental
consultants selected by the Lender to visit the properties of the Credit Parties and
perform appraisals and examinations of the inventory, equipment and Real Property Assets
of the Credit Parties at such times and with such frequencies as the Lender shall
reasonably request; <I>provided</I> that, so long as no Default has occurred and is
continuing, the Lender shall not request that the inventory, equipment or Real Property
Assets of the Credit Parties be appraised or examined by independent appraisers or
environmental consultants more frequently than once each year. Notwithstanding the
foregoing, the Lender may perform field examinations at least once annually if the
Borrower has not made a Borrowing under the Revolving Credit Commitment, and thereafter,
at least once in every one hundred eighty (180) day period. The Borrower shall reimburse
the Lender for all reasonable fees, costs and expenses charged by such independent
appraisers and environmental consultants for each such appraisal and examination. The
Credit Parties hereby acknowledge the Lender&#146;s right to contact the customers of the
Credit Parties at any time for the purpose of verifying the account balances of the
accounts receivable of the Credit Parties. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7.7 <B>Fiscal Year</B>. To enable the
ready and consistent determination of compliance with the covenants set forth in
Section&nbsp;8.10 hereof, the Credit Parties shall maintain their current fiscal year and
current method of determining the last day of the first three fiscal quarters in each
fiscal year. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7.8 <B>Compliance with Laws</B>. Each
Credit Party shall comply with (i) all permits, licenses and authorizations, including,
without limitation, environmental permits, licenses and authorizations, issued by a
Governmental Authority, (ii) all laws, rules, regulations and orders including, without
limitation, Environmental Laws, of any Governmental Authority and (iii) all contractual
obligations, in each case applicable to it or its property, except where the failure to do
so, individually or in the aggregate, could not reasonably be expected to result in a
Material Adverse Effect. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7.9 <B>Use of Proceeds</B>. The
proceeds of the Loans will be used only for (i) the refinancing of existing indebtedness,
(ii) fees and expenses incurred in connection with the transactions contemplated by this
Agreement, and (iii) for general corporate and working capital purposes of the Credit
Parties. No part of the proceeds of any Loan will be used, whether directly or indirectly,
for any purpose that entails a violation of any of the Regulations of the Board, including
Regulations T, U and X. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7.10 <B>Certain Obligations
Respecting Subsidiaries</B>. Each Credit Party will, and will cause each of its
Subsidiaries to, take such action from time to time as shall be necessary to ensure that
the percentage of the issued and outstanding shares of capital stock of any class or
character owned by it in any Subsidiary on the date hereof is not at any time decreased,
other than by reason of transfers to another Credit Party. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7.11 <B>ERISA</B>. Except where a
failure to comply with any of the following, individually or in the aggregate, would not
or could not reasonably be expected to result in a Material Adverse Effect, (i) the Credit
Parties will maintain, and cause each ERISA Affiliate to maintain, each Plan in compliance
with all applicable requirements of ERISA and of the Code and with all applicable rulings
and regulations issued under the provisions of ERISA and of the Code and (ii) the Credit
Parties will not and, to the extent authorized, will not permit any of the ERISA
Affiliates to (a) engage in any transaction with respect to any Plan which would subject
any Credit Party to either a civil penalty assessed pursuant to Section&nbsp;502(i) of
ERISA or a tax imposed by Section&nbsp;4975 of the Code, (b) fail to make full payment
when due of all amounts which, under the provisions of any Plan, any Credit Party or any
ERISA Affiliate is required to pay as contributions thereto, or permit to exist any
accumulated funding deficiency (as such term is defined in Section&nbsp;302 of ERISA and
Section&nbsp;412 of the Code), whether or not waived, with respect to any Pension Plan or
(c) fail to make any payments to any Multiemployer Plan that any Credit Party or any of
the ERISA Affiliates may be required to make under any agreement relating to such
Multiemployer Plan or any law pertaining thereto. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7.12 <B>Environmental Matters;
Reporting</B>. The Credit Parties will observe and comply with, and cause each Subsidiary
to observe and comply with all Environmental Laws to the extent non-compliance could
reasonably be expected to have a Material Adverse Effect. The Credit Parties will give the
Lender prompt written notice of any violation as to any Environmental Law by any Credit
Party and of the commencement of any judicial or administrative proceeding relating to
Environmental Laws (a) in which an adverse result would have a material adverse effect on
any operating permits, air emission permits, water discharge permits, hazardous waste
permits or other environmental permits held by any Credit Party, or (b) which will, or is
likely to, have a Material Adverse Effect on such Credit Party or which will require a
material expenditure by such Credit Party to cure any alleged problem or violation. </FONT></P>
<FONT FACE="Times New Roman, Times, Serif" SIZE=2>
7.13     Matters Relating to Additional Real Property Collateral.
</font>
<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          From and after the Effective Time, in the event that any Credit Party acquires
          any Material Owned Property that the Lender determines is a Mortgaged Property
          or in the event that the Lender determines that any Real Property Asset has
          become a Mortgaged Property, the Borrower shall deliver, to the Lender, as soon
          as practicable after the Lender has notified the Borrower that a Real Property
          Asset is a Mortgaged Property, fully executed and notarized Mortgages, in proper
          form for recording in all appropriate places in all applicable jurisdictions,
          encumbering the interest of the applicable Credit Party in such Mortgaged
          Property, together with mortgagee title insurance policies or commitments
          therefor, and copies of all surveys, deeds, title exception documents, flood
          hazard certificates and other documents as the Lender may reasonably require
          copies of all deeds with respect to such Mortgaged Property. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          From and after the Effective Time, in the event that any Credit Party enters
          into any lease with respect to any Material Leasehold Property, the Borrower
          shall deliver to the Lender copies of the lease, and all amendments thereto,
          between the Credit Party and the landlord or tenant, together with a
          Landlord&#146;s Waiver and Consent with respect thereto and where required by
          the terms of any lease, the consent of the mortgagee, ground lessor or other
          party. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          If requested by the Lender, the Credit Parties shall permit an independent real
          estate appraiser satisfactory to the Lender, upon reasonable notice, to visit
          and inspect any Mortgaged Property for the purpose of preparing an appraisal of
          such Mortgaged Property satisfying the requirements of all applicable laws and
          regulations (in each case to the extent required under such laws and regulations
          as determined by the Lender in its sole discretion). </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7.14 <B>Cash Deposits/Bank
Accounts</B>. The Credit Parties shall take all actions necessary to maintain, preserve
and protect the rights and interests of the Lender with respect to all cash deposits of
the Credit Parties and all other proceeds of Collateral and shall not, without the
Lender&#146;s prior written consent, open any deposit or other bank account, or instruct
any account debtor to make payment to any account other than to an established dominion
account, or other Controlled Account under the Lender&#146;s control; <I>provided</I> that
so long as no Default or Event of Default shall have occurred and be continuing, the
Credit Parties shall be permitted to maintain (i) payroll and accounts not subject to the
Lender&#146;s control so long as the aggregate amount of funds on deposit in all such
payroll accounts does not materially exceed estimated payroll for the next payroll period,
and (ii) local bank accounts not subject to the Lender&#146;s control so long as (x) the
aggregate amount of funds on deposit in all such local bank accounts does not exceed
$25,000 during any period of more than 72 consecutive hours, and (y) the aggregate amount
of funds on deposit in any such local bank account does not exceed $2,500 during any
period of more than 72 consecutive hours. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.15
<B>Collateral in the Possession of a Bailee. </B>If any Collateral is, now or at any time
hereafter, in the possession of a bailee, the Credit Parties shall promptly notify the
Lender thereof and, at the Lender&#146;s request and option, shall promptly obtain an
acknowledgement from the bailee, in form and substance satisfactory to the Lender, that
the bailee holds such Collateral for the benefit of the Lender and such bailee&#146;s
agreement to comply without further consent of the Credit Parties, at any time with
instructions of the Lender as to such Collateral. It is hereby understood that until such
acknowledgement from such bailee is received by the Lender, any Collateral in the
possession of such bailee shall be excluded from Eligible Inventory under the Borrowing
Base. </FONT></P>

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<A NAME=A049></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>ARTICLE 8 </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold 1" FSL="Default" -->
<A NAME=A050></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Negative Covenants </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Until
the Revolving Credit Commitment has expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full and all
Letters of Credit shall have expired or terminated and all LC Disbursements shall have
been reimbursed, each Credit Party covenants and agrees with the Lender that: </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8.1 <B>Indebtedness</B>. The Credit
Parties will not, and will not permit any Subsidiary to, create, incur, assume or permit
to exist any Indebtedness, except: </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Indebtedness created hereunder; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Existing Debt on the Closing Date which is set forth in <U>Schedule&nbsp;8.1</U>
          and has been designated on such schedule as Indebtedness that will remain
          outstanding following the funding of the initial Loans, and any extension,
          renewal, refunding or replacement of any such Indebtedness that does not
          increase the principal amount thereof; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          other Indebtedness incurred after the Closing Date (determined on a consolidated
          basis without duplication in accordance with GAAP) consisting of: </FONT></P>
</TD>
               </TR>
               </TABLE>
<!-- MARKER FORMAT-SHEET="Para (List) Indent Level 1" FSL="Default" -->
          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%></TD>
               <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               Capital Lease Obligations and/or secured by Liens permitted under
               Section&nbsp;8.2(h), in an aggregate principal amount at any time outstanding
               not in excess of $500,000; and </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD>
<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          up to $1,000,000.00 of Indebtedness incurred by a Foreign Subsidiary pursuant to
          Hedging Agreements; </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Guarantees permitted under section 8.3; and </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          up to $5,000,000.00 of Indebtedness secured by a first mortgage on 50 Enterprise
          Center, Middletown, Rhode Island. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8.2 <B>Liens</B>. The Credit Parties
will not, and will not permit any Subsidiary to, create, incur, assume or permit to exist
any Lien on any Property or asset now owned or hereafter acquired by it, or assign or sell
any income or revenues (including accounts receivable) or rights in respect of any
thereof, except (the following being called &#147;<U>Permitted Liens</U>&#148;): </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Liens created hereunder or under the other Loan Documents; </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          any Lien on any property or asset of any Credit Party existing on the date
          hereof and set forth in <U>Schedule&nbsp;8.1 </U>(excluding, however, following
          the making of the initial Loans hereunder, the Liens in favor of any Person
          other than the Lender securing Indebtedness not designated on said schedule as
          Indebtedness to remain outstanding following the funding of the initial Loans),
          <I>provided</I> that (i) such Lien shall not apply to any other property or
          asset of any Credit Party and (ii) such Lien shall secure only those obligations
          which it secures on the date hereof and extensions, renewals and replacements
          thereof that do not increase the outstanding principal amount thereof; </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Liens imposed by any Governmental Authority for taxes, assessments or charges
          not yet delinquent or (in the case of property taxes and assessments not
          exceeding $250,000 in the aggregate more than 90 days overdue) which are being
          contested in good faith and by appropriate proceedings if adequate reserves with
          respect thereto are maintained on the books of the applicable Credit Party in
          accordance with GAAP and which reserves shall be acceptable to the Lender; </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          landlords&#146;, carriers&#146;, warehousemen&#146;s, mechanics&#146;,
          materialmen&#146;s, repairmen&#146;s or other like Liens, and vendors&#146;
          Liens imposed by statute or common law not securing the repayment of
          Indebtedness, 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 and Liens securing judgments (including, without
          limitation, pre-judgment attachments) but only to the extent for an amount and
          for a period not resulting in an Event of Default under Section&nbsp;9.1(j)
          hereof; </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          pledges or deposits under worker&#146;s compensation, unemployment insurance and
          other social security legislation and pledges or deposits to secure the
          performance of bids, tenders, trade contracts (other than for borrowed money),
          leases (other than capital leases), utility purchase obligations, statutory
          obligations, surety and appeal bonds, performance bonds and other obligations of
          a like nature incurred in the ordinary course of business; </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          easements, rights-of-way, restrictions and other similar encumbrances incurred
          in the ordinary course of business and encumbrances consisting of zoning
          restrictions, easements, licenses, restrictions on the use of Property or minor
          imperfections in title thereto which, in the aggregate, are not material in
          amount, and which do not, in the aggregate, materially detract from the value of
          the Property of any Credit Party or materially interfere with the ordinary
          conduct of the business of any Credit Party; </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Liens consisting of bankers&#146; liens and rights of setoff, in each case,
          arising by operation of law, and Liens on documents presented in letter of
          credit drawings; and </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Liens on fixed or capital assets, including real or personal property, acquired,
          constructed or improved by any Credit Party, <I>provided</I> that (A) such Liens
          secure Indebtedness (including Capital Lease Obligations) permitted by
          Section&nbsp;8.1(d), (B)&nbsp;such Liens and the Indebtedness secured thereby
          are incurred prior to or within 90 days after such acquisition or the completion
          of such construction or improvement or were in effect at the time the Credit
          Parties acquired the assets or stock, (C) the Indebtedness secured thereby does
          not exceed the cost of acquiring, constructing or improving such fixed or
          capital assets, and (D) such security interests shall not apply to any other
          property or assets of the Credit Parties. </FONT></P>

     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8.3     <b> Contingent  Liabilities.</b>  The Credit  Parties will not Guarantee  the  Indebtedness  or other  obligations  of any Person,  or
Guarantee the payment of dividends or other distributions upon the stock of, or the earnings of, any Person, except:</FONT>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          endorsements of negotiable instruments for deposit or collection or similar
          transactions in the ordinary course of business; </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Guarantees and letters of credit in effect on the date hereof which are
          disclosed in <U>Schedule&nbsp;8.1</U>, and any replacements thereof in amounts
          not exceeding such Guarantees; and </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          obligations in respect of Letters of Credit. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A051></A>
<FONT FACE="Times New Roman, Times, Serif" SIZE=2>8.4 <b>Fundamental Changes;
Asset Sales.</b> </FONT>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          The Credit Parties will not enter into any transaction of merger or
          consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
          suffer any liquidation or dissolution). The Credit Parties will not acquire any
          business or property from, or capital stock of, or other equity interests in, or
          be a party to any acquisition of, any Person except for purchases of property to
          be used in the ordinary course of business, Investments permitted under
          Section&nbsp;8.5, Capital Expenditures. The Credit Parties will not form or
          acquire any Subsidiary without the express prior written consent of the Lender. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          The Credit Parties will not convey, sell, lease, transfer or otherwise dispose
          (including any Disposition) of, in one transaction or a series of transactions,
          any part of their business or property, whether now owned or hereafter acquired
          (including, without limitation, receivables and leasehold interests, but
          excluding (x) obsolete or worn-out property (including leasehold interests), or
          tools, equipment or other property no longer used or useful in their business
          and (y) any inventory or other property sold, leased, licensed, transferred or
          disposed of in the ordinary course of business and on ordinary business terms,
          or to the extent such sale, lease, license or transfer does not interfere with
          the operation of the business of the Credit Parties, provided that the Credit
          Parties may sublease real property to the extent such sublease would not
          interfere with the operation of the business of the Credit Parties. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Notwithstanding the foregoing provisions of this Section&nbsp;8.4: </FONT></P>
</TD>
          </TR>
          </TABLE>
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     <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
          <TR VALIGN=TOP>
          <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(i) </FONT></TD>
          <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          any Credit Party may be merged or combined with or into any other Credit Party
          (provided that if such merger involves the Borrower, (x) the Borrower shall be
          the surviving entity and (y) no Change of Control shall occur); </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>

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     <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
          <TR VALIGN=TOP>
          <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(ii) </FONT></TD>
          <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          any Credit Party may sell, lease, transfer or otherwise dispose of any or all of
          its property (upon voluntary liquidation or otherwise) to any other Credit
          Party; and </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>

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          <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%></TD>
               <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               the Credit Parties may consummate Permitted Acquisitions, provided that the
               Borrower shall give the Lender at least ten (10) days prior written notice of
               each such Permitted Acquisition. </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD>
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<A NAME=A052></A>
<FONT FACE="Times New Roman, Times, Serif" SIZE=2>8.5 <b>Investments; Hedging
Agreements.</b> </FONT>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          The Credit Parties will not make or permit to remain outstanding any Investment,
          except: </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(i)&nbsp;&nbsp;&nbsp;&nbsp;
          Investments consisting of Guarantees permitted by Section&nbsp;8.3(b) and
          Indebtedness permitted by Section 8.1; </FONT></P>

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<A NAME=A053></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(ii) Permitted
Investments; and </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(iii)&nbsp;&nbsp;&nbsp;&nbsp;
          Checking and deposit accounts with banks used in the ordinary course of
          business. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          The Credit Parties will not enter into any Hedging Agreement, other than Hedging
          Agreements entered into in the ordinary course of business with the prior
          written consent of the Lender to hedge or mitigate risks to which the Credit
          Parties are exposed in the conduct of their business or the management of their
          liabilities. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8.6 <B>Restricted Junior
Payments</B>. Except as set forth in Section 8.7, the Credit Parties will not declare or
make any Restricted Junior Payment at any time; <I>provided</I>, <I>however</I>, that any
Credit Party that is a Subsidiary of another Credit Party may pay dividends to such Credit
Party. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8.7 <B>Transactions with
Affiliates</B>. Except as expressly permitted by this Agreement, the Credit Parties will
not directly or indirectly (a)&nbsp;make any Investment in an Affiliate or a Subsidiary;
(b) transfer, sell, lease, assign or otherwise dispose of any property to an Affiliate or
to a Subsidiary; (c) merge into or consolidate with an Affiliate or a Subsidiary, or
purchase or acquire property from an Affiliate; or (d) enter into any other transaction
directly or indirectly with or for the benefit of an Affiliate or a Subsidiary (including,
without limitation, guarantees and assumptions of obligations of an Affiliate);
<I>provided</I> that: </FONT></P>
</TD>
          </TR>
          </TABLE>
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     <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
          <TR VALIGN=TOP>
          <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(i) </FONT></TD>
          <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          any Affiliate who is an individual may serve as a director, officer, employee or
          consultant of any Credit Party, receive reasonable compensation for his or her
          services in such capacity and benefit from Permitted Investments to the extent
          specified in clause (e) of the definition thereof; </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>

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     <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
          <TR VALIGN=TOP>
          <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(ii) </FONT></TD>
          <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the Credit Parties may engage in and continue the transactions with or for the
          benefit of Affiliates which are described in <U>Schedule&nbsp;8.7</U> or are
          referred to in Section&nbsp;8.6 (but only to the extent specified in such
          section); and </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>

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     <TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
          <TR VALIGN=TOP>
          <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(iii) </FONT></TD>
          <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the Credit Parties may engage in transactions with Affiliates and Subsidiaries
          in the ordinary course of business on terms which are no less favorable to the
          Credit Parties than those likely to be obtained in an arms&#146; length
          transaction between a Credit Party and a non-affiliated third party. </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
          <TR VALIGN=TOP>
          <TD>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8.8 <B>Restrictive Agreements</B>.
The Credit Parties will not directly or indirectly, enter into, incur or permit to exist
any agreement or other arrangement (other than this Agreement) that prohibits, restricts
or imposes any condition upon (a) the ability of any Credit Party to create, incur or
permit to exist any Lien upon any of its property or assets, or (b) the ability of any
Credit Party that is a Subsidiary of another Credit Party to pay dividends or other
distributions with respect to any shares of its capital stock or other equity interests or
to make or repay loans or advances to any other Credit Party or to Guarantee Indebtedness
of any other Credit Party; <I>provided</I> that (i) the foregoing shall not apply to
restrictions and conditions imposed by law or by this Agreement, (ii) the foregoing shall
not apply to restrictions and conditions existing on the date hereof identified on
<U>Schedule&nbsp;8.8 </U>(but shall apply to any extension or renewal of, or any amendment
or modification expanding the scope of, any such restriction or condition), (iii) the
foregoing shall not apply to customary restrictions and conditions contained in agreements
relating to the sale of stock or assets of a Subsidiary of a Credit Party pending such
sale, <I>provided</I> such restrictions and conditions apply only to the Subsidiary that
is to be sold and such sale is permitted hereunder, (iv) clause (a) of the foregoing shall
not apply to restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions apply only to
the property or assets securing such Indebtedness, and (v) clause (a) of the foregoing
shall not apply to customary provisions in leases and other contracts (excluding license
agreements) restricting the assignment thereof. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8.9 <B>Sale-Leaseback Transactions.
</B>No Credit Party will directly or indirectly, enter into any arrangements with any
Person whereby such Credit Party shall sell or transfer (or request another Person to
purchase) any property, real, personal or mixed, used or useful in its business, whether
now owned or hereafter acquired, and thereafter rent or lease such property from any
Person. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8.10 <B>Lines of Business</B>. The
Credit Parties will not engage to any substantial extent in any line or lines of business
activity other than (i) the types of businesses engaged in by the Credit Parties as of the
Effective Time and businesses substantially related thereto, and (ii) such other lines of
business as may be consented to by the Lender. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8.11 <B>Modifications of Certain
Documents</B>. The Credit Parties will not consent to any modification, supplement or
waiver of any of the provisions of any documents or agreements evidencing or governing any
Existing Debt. </FONT></P>

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<A NAME=A054></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>ARTICLE 9 </FONT></H1>

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<A NAME=A055></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Events of Default </FONT></H1>

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<A NAME=A056></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9.1 Events of Default.
The occurrence of any of the following events shall be deemed to constitute an
&#147;Event of Default&#148;hereunder: </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          the Credit Parties or the Other Obligors shall fail to pay to the Lender, the
          Issuing Lender, the Cash Management Bank or any other Affiliate of the Lender,
          any principal of or interest on any Loan or any Reimbursement Obligation in
          respect of any LC Disbursement or any other Obligation of the Credit Parties or
          any Other Obligor to the Lender, the Issuing Lender, the Cash Management Bank or
          any other Affiliate of the Lender when the same shall become due and payable,
          whether at the due date thereof or at a date fixed for prepayment thereof, by
          acceleration of such due or prepayment date, or otherwise, and, in the case of
          interest only, such failure to make any interest payment shall continue
          unremedied for a period of five (5) calendar days; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          any representation or warranty made or deemed made by or on behalf of any Credit
          Party, any Subsidiary or any Other Obligor in or in connection with this
          Agreement, any of the other Loan Documents or any amendment or modification
          hereof or thereof, or in any report, certificate, financial statement or other
          document furnished pursuant to or in connection with this Agreement, any of the
          other Loan Documents or any amendment or modification hereof or thereof, shall
          prove to have been incorrect in any material respect when made or deemed made; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          the Credit Parties (i) shall fail to observe or perform any covenant, condition
          or agreement contained in Sections&nbsp;7.1, 7.2, 7.5, 7.6, 7.9, 7.10, 7.12,
          7.14, 7.15 or in Article&nbsp;8 or (ii) shall fail to observe or perform any
          other covenant, condition or agreement contained in Sections 7.3, 7.4, 7.7, 7.8,
          7.11, or 7.13 and such failure described in this clause (ii) shall continue
          unremedied for a period of 30 days after the earlier of (x) actual knowledge by
          an officer of the Credit Parties or (y) notice thereof from the Lender to any
          Credit Party; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          the Credit Parties or any Other Obligor shall fail to observe or perform any
          covenant, condition or agreement contained in this Agreement (other than those
          specified in clauses (a), (b) or (c) of this Section 9.1) or any other Loan
          Document, and such failure shall continue unremedied for a period of 30 days
          after notice thereof from the Lender to the Credit Parties; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          the Credit Parties or any Other Obligor shall fail to make any payment (whether
          of principal, interest or otherwise and regardless of amount) in respect of any
          Material Indebtedness or any Material Rental Obligation, when and as the same
          shall become due and payable, after giving effect to any grace period with
          respect thereto; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          any event or condition occurs that results in (i) any Material Indebtedness of
          any Credit Party or any Other Obligor becoming due prior to its scheduled
          maturity or that enables or permits (with or without the giving of notice, the
          lapse of time or both) the holder or holders of any Material Indebtedness or any
          trustee or agent on its or their behalf to cause such Material Indebtedness to
          become due, or to require the prepayment, repurchase, redemption or defeasance
          thereof, prior to its scheduled maturity, or (ii) the lease with respect to any
          Material Rental Obligation of any Credit Party or any Other Obligor being
          terminated prior to its scheduled expiration date or that enables or permits
          (with or without the giving of notice, the lapse of time or both) the
          counterparty to such lease to cause such lease to be terminated prior to its
          scheduled expiration date; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          an involuntary proceeding shall be commenced or an involuntary petition shall be
          filed seeking (i) liquidation, reorganization or other relief in respect of any
          Credit Party or any Other Obligor or its debts, or of a substantial part of its
          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 Credit
          Party or any Other Obligor or for a substantial part of its assets, and, in any
          such case, such proceeding or petition shall continue undismissed for 60 days or
          an order or decree approving or ordering any of the foregoing shall be entered; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          any Credit Party or any Other Obligor 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 (g) of this Article, (iii) apply for or consent to
          the appointment of a receiver, trustee, custodian, sequestrator, conservator or
          similar official for any Credit Party or any Other Obligor or for a substantial
          part of its 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; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          any Credit Party or any Other Obligor shall become unable, admit in writing or
          fail generally to pay its debts as they become due; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          a final judgment or judgments for the payment of money (x) in excess of $100,000
          in the aggregate (exclusive of judgment amounts fully covered by insurance where
          the insurer has admitted liability in respect of such judgment) or (y) in excess
          of $250,000 in the aggregate (regardless of insurance coverage), shall be
          rendered by one or more courts, administrative tribunals or other bodies having
          jurisdiction against any Credit Party or any Other Obligor and the same shall
          not be discharged (or provision shall not be made for such discharge), bonded,
          or a stay of execution thereof shall not be procured, within 60 days from the
          date of entry thereof and the relevant Credit Party or Other Obligor shall not,
          within said period of 60 days, or such longer period during which execution of
          the same shall have been stayed, appeal therefrom and cause the execution
          thereof to be stayed during such appeal; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          an ERISA Event shall have occurred that, in the reasonable opinion of the
          Lender, when taken together with all other ERISA Events that have occurred,
          could reasonably be expected to result in a Material Adverse Effect; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          there shall occur any Change of Control; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          any of the following shall occur: (i) the Liens created hereunder or under the
          other Loan Documents shall at any time (other than by reason of the Lender
          relinquishing such Lien) cease in any material respect to constitute valid and
          perfected Liens on the Collateral intended to be covered thereby; (ii) except
          for expiration in accordance with its respective terms, any Loan Document shall
          for whatever reason be terminated, or shall cease to be in full force and
          effect; or (iii) the enforceability of any Loan Document shall be contested by
          any Credit Party or any Other Obligor; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(n)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          there shall occur any material loss theft, damage or destruction of any
          Collateral not fully covered (subject to such reasonable deductibles as the
          Lender shall have approved) by insurance; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(o)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          there shall occur any material adverse change (in the reasonable opinion of the
          Lender) on the businesses, operations, properties, conditions (financial or
          otherwise), assets, liabilities, income or prospects of the Credit Parties or
          any Other Obligor; </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>then, and in every such event (other
than an event described in clause (g) or (h) of this Section&nbsp;9.1), and at any time
thereafter during the continuance of such event, the Lender may, by notice to the
Borrower, take any or all of the following actions, at the same or different times: (i)
terminate the Revolving Credit Commitment, and thereupon the Revolving Credit Commitment
shall terminate immediately, (ii) notify the Borrower that the outstanding principal of
the Loans shall bear interest at the Post-Default Rate, and thereupon the outstanding
principal of the Loans shall bear interest at the Post-Default Rate, (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, shall become
due and payable immediately, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Credit Parties and the Other Obligors, and
(iv) the Lender, the Issuing Lender, the Cash Management Bank and any other Affiliate of
the Lender may exercise all of the rights as secured party and mortgagee hereunder or
under the other Loan Documents; and in case of any event with respect to the Credit
Parties or any Subsidiary described in clause (g) or (h) of this Section&nbsp;9.1, the
Revolving Credit Commitment shall automatically terminate, the principal of the Loans then
outstanding shall automatically bear interest at the Post-Default Rate, the principal of
the Loans then outstanding, together with accrued interest thereon and all fees and other
Obligations shall automatically become due and payable, and the Borrower shall provide
cash collateral in accordance with Section&nbsp;2.3(g) without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the Credit Parties
and the Other Obligors, and the Lender, the Issuing Lender, the Cash Management Bank and
all other Affiliates of the Lender shall be permitted to exercise such rights as secured
party and mortgagee hereunder or under the other Loan Documents to the extent permitted by
applicable law. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9.2 <B>Receivership</B>. Without
limiting the generality of the foregoing or limiting in any way the rights of the Lender
hereunder or under the other Loan Documents or otherwise under applicable law, at any time
after (i) the entire principal balance of any Loan shall have become due and payable
(whether at maturity, by acceleration or otherwise) and (ii) the Lender shall have
provided to the Borrower not less than ten (10) days&#146; prior written notice of its
intention to apply for a receiver, the Lender shall be entitled to apply for and have a
receiver appointed under state or federal law by a court of competent jurisdiction in any
action taken by the Lender to enforce its rights and remedies hereunder and under the
other Loan Documents in order to manage, protect, preserve, sell and otherwise dispose of
all or any portion of the Collateral and continue the operation of the business of the
Credit Parties, and to collect all revenues and profits thereof and apply the same to the
payment of all expenses and other charges of such receivership, including the compensation
of the receiver, and to the payment of the Loans and other fees and expenses due hereunder
and under the Loan Documents as aforesaid until a sale or other disposition of such
Collateral shall be finally made and consummated. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, EACH CREDIT PARTY HEREBY IRREVOCABLY CONSENTS TO AND WAIVES ANY RIGHT TO OBJECT TO OR
OTHERWISE CONTEST THE APPOINTMENT OF A RECEIVER AS PROVIDED ABOVE. EACH CREDIT PARTY (I)
GRANTS SUCH WAIVER AND CONSENT KNOWINGLY AFTER HAVING DISCUSSED THE IMPLICATIONS THEREOF
WITH COUNSEL, (II) ACKNOWLEDGES THAT (A) THE UNCONTESTED RIGHT TO HAVE A RECEIVER
APPOINTED FOR THE FOREGOING PURPOSES IS CONSIDERED ESSENTIAL BY THE LENDER IN CONNECTION
WITH THE ENFORCEMENT OF ITS RIGHTS AND REMEDIES HEREUNDER AND UNDER THE OTHER LOAN
DOCUMENTS, AND (B) THE AVAILABILITY OF SUCH APPOINTMENT AS A REMEDY UNDER THE FOREGOING
CIRCUMSTANCES WAS A MATERIAL FACTOR IN INDUCING THE LENDER TO MAKE THE LOANS TO THE
BORROWER; AND (III) AGREES TO ENTER INTO ANY AND ALL STIPULATIONS IN ANY LEGAL ACTIONS, OR
AGREEMENTS OR OTHER INSTRUMENTS IN CONNECTION WITH THE FOREGOING AND TO COOPERATE FULLY
WITH THE LENDER IN CONNECTION WITH THE ASSUMPTION AND EXERCISE OF CONTROL BY THE RECEIVER
OVER ALL OR ANY PORTION OF THE COLLATERAL. THE LENDER ACKNOWLEDGES AND AGREES THAT NOTHING
IN THIS SECTION&nbsp;9.2 SHALL BE DEEMED TO CONSTITUTE A WAIVER OF THE RIGHT OF CREDIT
PARTIES TO FILE FOR PROTECTION UNDER TITLE 11 OF THE UNITED STATES CODE AT ANY TIME. </FONT></P>

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<A NAME=A057></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>ARTICLE 10 </FONT></H1>

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<A NAME=A058></A>
<FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>Miscellaneous</b></FONT>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.1 <B>Notices</B>. 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 telephonic facsimile (fax), as follows: </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          if to the Credit Parties or any Other Obligor, to KVH Industries, Inc.,
          Attention: Patrick Spatt, Chief Financial Officer (Fax no. (401-849-0045) with a
          copy to Foley Hoag LLP, Attention: Adam Sonnenschein, Esq. (Fax no.
          (617-832-7000); and </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          if to the Lender, to Fleet Capital Corporation, One Federal Street, Mail Stop MA
          DE 10307X, Boston, Massachusetts 02110, Attention: Mark B. Schafer, Vice
          President (Fax no.: (617-654-1167), with a copy to Goulston &amp; Storrs, P.C.,
          Attention: Philip A. Herman, Esq. (Fax no. (617-574-7592). </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Any party hereto may change its
address or fax number for notices and other communications hereunder by notice to the
other parties hereto. 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. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A059></A>
<FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.2 <b>Waivers; Amendments.</b> </FONT>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          No failure or delay by the Lender, the Issuing Lender, the Cash Management Bank
          or any Affiliate of the Lender in exercising any right or power hereunder 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 Lender, the
          Issuing Lender, the Cash Management Bank and all Affiliates of the Lender
          hereunder and under the other Loan Documents are cumulative and are not
          exclusive of any rights or remedies that they would otherwise have. No waiver of
          any provision of this Agreement or consent to any departure by any Credit Party
          or Subsidiary therefrom shall in any event be effective unless the same shall be
          permitted by paragraph (b) of this Section&nbsp;10.2, 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 a Letter of Credit shall not be construed as a waiver of any
          Default, regardless of whether the Lender or the Issuing Lender may have had
          notice or knowledge of such Default at the time. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Neither this Agreement nor any other Loan Document nor any provision hereof or
          thereof may be waived, amended or modified except pursuant to an agreement or
          agreements in writing entered into by the Borrower and the Lender. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A060></A>
<FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.3 <b>Expenses;
Indemnity: Damage Waiver.</b> </FONT>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          The Credit Parties and the Other Obligors jointly and severally agree to pay, or
          reimburse the Lender for paying, (i) all reasonable out-of-pocket expenses
          incurred by the Lender and its Affiliates, including the reasonable fees,
          charges and disbursements of Special Counsel, in connection with the preparation
          of this Agreement and the other Loan Documents or any amendments, modifications
          or waivers of the provisions hereof or thereof (whether or not the transactions
          contemplated hereby or thereby shall be consummated), (ii) all reasonable
          out-of-pocket expenses incurred by the Issuing Lender in connection with the
          issuance, amendment, renewal or extension of any Letter of Credit or any demand
          for payment thereunder, (iii) all out-of-pocket expenses incurred by the Lender,
          the Issuing Lender, the Cash Management Bank or any Affiliate of the Lender,
          including the fees, charges and disbursements of any counsel for the Lender, the
          Issuing Lender, the Cash Management Bank or any Affiliate of the Lender, in
          connection with the enforcement or protection of their rights in connection with
          this Agreement and the other Loan Documents, including their rights under this
          Section&nbsp;10.3, or in connection with the Loans made or Letters of Credit
          issued hereunder, including in connection with any workout, restructuring or
          negotiations in respect thereof, and (iv) all Other Taxes levied by any
          Governmental Authority in respect of this Agreement or any of the other Loan
          Documents or any other document referred to herein or therein and 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 Loan Document or any other document referred to therein. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          The Credit Parties and the Other Obligors jointly and severally agree to
          indemnify the Lender, the Issuing Lender, the Cash Management Bank, each
          Affiliate of the Lender and each Related Party of any of the foregoing Persons
          (each such Person being called an &#147;Indemnitee&#148;) against, and hold each
          Indemnitee harmless from, any and all losses, claims, damages, liabilities and
          related expenses, including the fees, charges and disbursements of any counsel
          for any Indemnitee and settlement costs, incurred by or asserted against any
          Indemnitee arising out of, in connection with, or as a result of (i) the
          execution or delivery of this Agreement, the other Loan Documents or any
          agreement or instrument contemplated hereby, the performance by the parties
          hereto and thereto of their respective obligations hereunder or thereunder or
          the consummation of the transactions contemplated hereby or any other
          transactions contemplated hereby or thereby, (ii) any Loan or Letter of Credit
          or the use of the proceeds therefrom (including any refusal by the Issuing
          Lender to honor a demand for payment under a Letter of Credit if the documents
          presented in connection with such demand do not strictly comply with the terms
          of such Letter of Credit), (iii) any actual or alleged presence or release of
          Hazardous Materials on or from any property owned, leased or operated by any
          Credit Party or any Subsidiary, or any Environmental Liability related in any
          way to any Credit Party or any Subsidiary, 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; <I>provided</I> 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. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          To the extent permitted by applicable law, none of the Credit Parties or Other
          Obligors shall assert, and each Credit Party and Other 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, this Agreement,
          the other Loan Documents or any agreement or instrument contemplated hereby or
          thereby, the transactions contemplated hereby, any Loan or Letter of Credit or
          the use of the proceeds thereof. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          All amounts due under this Section&nbsp;10.3 shall be payable promptly after
          written demand therefor. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<A NAME=A061></A>
<FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.4 <b>Successors and Assigns.</b></FONT>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          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 Credit Party or Other Obligor may assign or otherwise
          transfer any of its rights or obligations hereunder without the prior written
          consent of the Lender (and any attempted assignment or transfer 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 the Lender, the
          Issuing Lender and the Cash Management Bank) any legal or equitable right,
          remedy or claim under or by reason of this Agreement. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          The Lender may at any time and from time to time assign to one or more assignees
          all or a portion of its rights and obligations under this Agreement (including
          all or a portion of the Revolving Credit Commitment and the Loans at the time
          owing to it). </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          The Lender may at any time and from time to time, sell participations to one or
          more banks or other entities (a &#147;Participant&#148;) in all or a portion of
          the Lender&#146;s rights and obligations under this Agreement (including all or
          a portion of the Revolving Credit Commitment and the Loans owing to it);
          <I>provided</I> that (i) the Lender&#146;s obligations under this Agreement
          shall remain unchanged, (ii) the Lender shall remain solely responsible to the
          other parties hereto for the performance of such obligations and (iii) the
          Borrower shall continue to deal solely and directly with the Lender in
          connection with the Lender&#146;s rights and obligations under this Agreement.
          The Borrower agrees that each Participant shall be entitled to the benefits of
          this Agreement to the same extent as if it were a Lender and had acquired its
          interest by assignment pursuant to paragraph (b) of this Section&nbsp;10.4;
          <I>provided </I>that a Participant shall not be entitled to receive any greater
          payment under this Agreement than the 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&#146;s prior
          written consent. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          The 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 the Lender,
          including any such pledge or assignment to a Federal Reserve Bank, and this
          Section&nbsp;shall not apply to any such pledge or assignment of a security
          interest; <I>provided</I> that no such pledge or assignment of a security
          interest shall release the Lender from any of its obligations hereunder or
          substitute any such assignee for the Lender as a party hereto. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          The Lender may furnish any information concerning any Credit Party, any
          Subsidiary or any Other Obligor in the possession of the Lender from time to
          time to assignees and participants (including prospective assignees and
          participants) subject, however, to and so long as the recipient agrees in
          writing to be bound by, the provisions of Section&nbsp;10.13. In addition, the
          Lender may furnish any information concerning any Credit Party, any Subsidiary,
          or any Affiliate in the Lender&#146;s possession to any Affiliate of the Lender,
          subject, however, to the provisions of Section&nbsp;10.13. The Credit Parties
          shall assist the Lender in effectuating any assignment or participation pursuant
          to this Section&nbsp;10.4 in whatever manner the Lender reasonably deems
          necessary, including participation in meetings with prospective transferees. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.5 <B>Survival</B>. All covenants,
agreements, representations and warranties made by the Credit Parties, Subsidiaries and
Other Obligors herein and in the other Loan Documents, and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement and the other Loan
Documents, shall be considered to have been relied upon by the other parties hereto and
shall survive the execution and delivery of this Agreement and the other Loan Documents
and the making of any Loans and issuance of any Letters of Credit, regardless of any
investigation made by any such other party or on its behalf and notwithstanding that the
Lender or the Issuing 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 so long as the principal of or any accrued interest on
any Loan or any fee or any other Obligation payable under this Agreement or the other Loan
Documents is outstanding and unpaid or any Letter of Credit is outstanding and so long as
the Revolving Credit Commitment has not expired or terminated. The provisions of Sections
2.9, 2.10 and 10.3 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 Letters of Credit and the Revolving Credit Commitment or
the termination of this Agreement or any other Loan Document or any provision hereof or
thereof. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.6 <B>Counterparts; Integration;
References to Agreement; Effectiveness</B>. 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 Lender or its counsel constitute the entire contract 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. Whenever there is
a reference in any Loan Document or UCC Financing Statement to the &#147;Credit
Agreement&#148; to which the Lender and the Credit Parties are parties, such reference
shall be deemed to be made to this Agreement among the parties hereto. Except as provided
in Section&nbsp;6.1, this Agreement shall become effective when it shall have been
executed by the Lender and when the Lender 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
of this Agreement by telecopy shall be effective as delivery of a manually executed
counterpart of this Agreement. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.7 <B>Severability</B>. 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. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.8 <B>Right of Setoff</B>. Each
Credit Party and Other Obligor hereby grants to the Lender, the Cash Management Bank and
each Affiliate of the Lender that from time to time maintains any deposit accounts, holds
any funds or otherwise becomes indebted to the Credit Parties or any Other Obligor a
security interest in all deposits (general or special, time or demand, provisional or
final) and funds at any time held and other indebtedness at any time owing by the Lender,
the Cash Management Bank or any such Affiliate of the Lender to or for the credit or the
account of any Credit Party or any Other Obligor as security for the Obligations, and the
Credit Parties hereby agree that if an Event of Default shall have occurred and be
continuing, the Lender, the Cash Management Bank and each Affiliate of the Lender are
hereby authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or demand,
provisional or final) or other funds at any time held and other indebtedness at any time
owing by the Lender, the Cash Management Bank or any Affiliate of the Lender to or for the
credit or the account of any Credit Party or any Other Obligor against any and all of the
Obligations, irrespective of whether or not the Lender shall have made any demand under
this Agreement and although any of the Obligations may be unmatured. The rights of the
Lender, the Cash Management Bank and each Affiliate of the Lender under this
Section&nbsp;10.8 are in addition to any other rights and remedies (including other rights
of setoff) which the Lender, the Cash Management Bank or any Affiliate of the Lender may
have. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.9 <B>Subordination by Credit
Parties</B>. The Credit Parties hereby agree that all present and future Indebtedness of
any Credit Party to another Credit Party (&#147;<U>Intercompany Indebtedness</U>&#148;),
if any, shall be subordinate and junior in right of payment and priority to the
Obligations, and each Credit Party agrees not to make, demand, accept or receive any
payment in respect of any present or future Intercompany Indebtedness, including, without
limitation, any payment received through the exercise of any right of setoff, counterclaim
or cross claim, or any collateral therefor, unless and until such time as the Obligations
shall have been indefeasibly paid in full; <I>provided</I> that, so long as no Default
shall have occurred and be continuing and no Default shall be caused thereby, the Credit
Parties may make and receive such payments as shall be customary in the ordinary course of
the Credit Parties&#146; business. Without in any way limiting the foregoing, in the event
of any insolvency or bankruptcy proceedings, or any receivership, liquidation,
reorganization, dissolution or other similar proceedings relative to any Credit Party or
to its businesses, properties or assets, the Lender shall be entitled to receive payment
in full of all of the Obligations before any Credit Party shall be entitled to receive any
payment in respect of any present or future Intercompany Indebtedness. </FONT></P>

10.10    Governing Law; Jurisdiction; Consent to Service of Process.

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          This Agreement shall be construed in accordance with and governed by the law of
          The Commonwealth of Massachusetts. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Each party hereto hereby irrevocably and unconditionally submits, for itself and
          its property, to the nonexclusive jurisdiction of the courts of The Commonwealth
          of Massachusetts and of the United States District Court for the District of
          Massachusetts, and any appellate court from any thereof, in any action or
          proceeding arising out of or relating to this Agreement or the other Loan
          Documents, or for recognition or enforcement of any judgment, and each of the
          parties hereto hereby irrevocably and unconditionally agrees that all claims in
          respect of any such action or proceeding may be heard and determined in such
          Massachusetts court (or, to the extent permitted by law, in such Federal court).
          Each of the parties hereto agrees that a final judgment in any such action or
          proceeding shall be conclusive and may be enforced in other jurisdictions by
          suit on the judgment or in any other manner provided by law. Nothing in this
          Agreement shall affect any right that the Lender, the Issuing Lender or the Cash
          Management Bank may otherwise have to bring any action or proceeding relating to
          this Agreement against any Credit Party, any Subsidiary or any Other Obligor or
          its properties in the courts of any jurisdiction. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Each party hereto hereby irrevocably and unconditionally waives, to the fullest
          extent it may legally and effectively do so, any objection which 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 Loan Documents in any court
          referred to in paragraph (b) of this Section&nbsp;10.10. Each of the parties
          hereto hereby irrevocably waives, to the fullest extent permitted by law, the
          defense of an inconvenient forum to the maintenance of such action or proceeding
          in any such court. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Each party to this Agreement irrevocably consents to service of process in the
          manner provided for notices in Section&nbsp;10.1. Nothing in this Agreement will
          affect the right of any party to this Agreement to serve process in any other
          manner permitted by law. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.11 <B>WAIVER OF JURY TRIAL</B>.
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 THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY
(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&nbsp;10.11. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.12 <B>Headings</B>. Article and
Section&nbsp;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. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.13 <B>Confidentiality</B>. The
Lender agrees to keep confidential information obtained by it pursuant hereto and the
other Loan Documents confidential in accordance with the Lender&#146;s customary practices
and agrees that it will only use such information in connection with the transactions
contemplated by this Agreement and not disclose any of such information other than (a) to
the Lender&#146;s employees, representatives, directors, attorneys, auditors, agents,
professional advisors, trustees or Affiliates who are advised of the confidential nature
of such information or to any direct or indirect contractual counterparty in swap
agreements or such contractual counterparty&#146;s professional advisor (so long as such
contractual counterparty or professional advisor to such contractual counterparty agrees
to be bound by the provisions of this Section&nbsp;10.13), (b) to the extent such
information presently is or hereafter becomes available to the Lender on a
non-confidential basis from any source of such information that is in the public domain at
the time of disclosure, (c) to the extent disclosure is required by law (including
applicable securities law), regulation, subpoena or judicial order or process
(<I>provided</I> that notice of such requirement or order shall be promptly furnished to
the Borrower unless such notice is legally prohibited) or requested or required by bank,
securities, insurance or investment company regulators or auditors or any administrative
body or commission to whose jurisdiction the Lender may be subject, (d) to any rating
agency to the extent required in connection with any rating to be assigned to the Lender,
(e) to assignees or participants or prospective assignees or participants who agree to be
bound by the provisions of this Section&nbsp;10.13, (f) to the extent required in
connection with any litigation between any Credit Party or any Other Obligor and the
Lender with respect to the Loans or this Agreement and the other Loan Documents or (g)
with the Borrower&#146;s prior written consent. </FONT></P>


<!-- MARKER PAGE="sheet: 4; page: 4" -->
<HR SIZE=5 COLOR=GRAY NOSHADE>


<!-- MARKER FORMAT-SHEET="Para Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN
WITNESS WHEREOF, the parties hereto have caused this Credit Agreement to be duly executed
by their respective authorized officers as of the day and year first above written. </FONT></P>


<FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<U>BORROWER</U> <BR>

                                            KVH INDUSTRIES, INC.

<BR>
                                            By: /s/ Patrick J. Spratt
                                           <BR> Name: Patrick J. Spratt
                                           <BR> Title: Chief Financial Officer

<BR><BR>
<U>LENDER</U>
<BR>
                                            FLEET CAPITAL CORPORATION,
                                             as Lender<BR>


                                            By: /s/ Mark B. Schafer
                                            <BR>Name: Mark B. Schafer
                                            <BR>Title: V.P. Fleet Capital Corporation

<BR><BR>
<U>ISSUING LENDER</U> <BR>
FLEET
NATIONAL BANK,

                                             as Issuing Lender<BR>


                                            By: /s/ Mark B. Schafer
                                           <BR> Name: Mark B. Schafer
                                           <BR> Title: Authorized Officer

<BR><BR>
<U>CASH MANAGEMENT BANK</U><BR>
FLEET NATIONAL
BANK,

                                             as Cash Management Bank<BR>


                                            By: /s/ Mark B. Schafer
                                           <BR> Name: Mark B. Schafer
                                           <BR> Title: Authorized Officer


</FONT>

</TD>
</TR>
</TABLE>

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SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13
OR 15(d) OF THE
SECURITIES EXCHANGE ACT
OF 1934
Date of Report (Date of earliest
event reported) July 17, 2003
KVH Industries, Inc.
(Exact Name of
Registrant as Specified in Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
0-28082
(Commission File Number)
05-0420589
(IRS Employer
Identification No.)
50 Enterprise Center
Middletown, RI
(Address of Principal Executive Offices)
02842
(Zip Code)
Registrant's
telephone number, including area code:
(401) 847- 3327
N/A
(Former Name or Former
Address, if Changed Since Last Report)
Item 5.    Other Events.
This
report is being filed by KVH Industries, Inc. ("KVH") to announce that, KVH entered into a Line of Credit with its bank, Fleet Capital Corporation. The line of credit agreement entered
into by KVH is filed as Exhibit 99.1 to this report.
Exhibits:
The following exhibit is filed with this report on Form 8-K:
Exhibit No.     Description
99.1     Line of Credit Agreement.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly authorized.
KVH Industries, Inc.
Date:
July 17, 2003
BY: /S/ Patrick J. Spratt
——————————————
Patrick J. Spratt
Chief Accounting & Financial Officer
AMENDED AND RESTATED
CREDIT AND SECURITY
AGREEMENT
dated as of
July 17, 2003
among
KVH INDUSTRIES, INC.,
as borrower,
and
FLEET CAPITAL
CORPORATION,
as Lender
SCHEDULES & EXHIBITS
Schedule 1.4        Designated Financial Officers
Schedule 4.2        Websites and Domain Names
Schedule 5.3        Governmental Approvals; No Conflicts
Schedule 5.4        Financial Condition; No Material Adverse Changes
Schedule 5.5        Properties; Proprietary Rights; Real Property Assets
Schedule 5.6        Litigation and Environmental Matters
Schedule 5.7        Compliance with Laws and Agreements
Schedule 5.9        Taxes
Schedule 5.10      Pension Plans
Schedule 5.12      Capitalization
Schedule 5.13      Subsidiaries
Schedule 5.14      Material Indebtedness, Liens and Agreements
Schedule 5.19      Labor and Employment Matters
Schedule 5.20      Bank Accounts
Schedule 8.1        Existing Indebtedness
Schedule 8.7        Transactions with Affiliates
Schedule 8.8        Restrictive Agreements
Exhibit A         Form of Amended and Restated Revolving Credit Note
Exhibit B-1      Form of Borrowing Base Certificate
Exhibit B-2      Form of Collateral Update Certificate
Exhibit B-3      Form of Accounts Receivable/Loan Reconciliation Report
Exhibit B-4      Form of Eurodollar Request
Exhibit B-5      Form of Advance Request
Exhibit C         Form of Perfection Certificate
Exhibit D         Form of Compliance Certificate
Exhibit E         Form of Opinion of Counsel to the Borrower
Article 1
Definitions
1
1.1
Defined Terms
1
1.2
Accounting Terms; GAAP
21
1.4
Designated Financial Officers
22
Article 2
The Credits
22
2.1
Revolving Loans
22
2.2
Eurodollar Borrowings
23
2.3
Letters of Credit
23
2.4
Expiration, Termination or Reduction of Revolving Credit Commitment
28
2.5
Payments
28
2.6
Prepayment of Loans
29
2.7
Fees
31
2.8
Increased Costs
32
2.9
Taxes
33
Article 3
INTENTIONALLY OMITTED
34
Article 4
The Collateral
34
4.1
Grant of Security Interest
34
4.2
Special Warranties and Covenants of the Borrower
35
4.3
Collection of Proceeds of Accounts Receivable
39
4.4
Fixtures, etc.
41
4.5
Right of Lender to Dispose of Collateral, etc.
41
4.6
Right of Lender to Use and Operate Collateral, etc.
41
4.7
Proceeds of Collateral
42
Article 5
Representations and Warranties
42
5.1
Organization; Powers
42
5.2
Authorization; Enforceability
42
5.3
Governmental Approvals; No Conflicts
43
5.4
Financial Condition; No Material Adverse Change
43
5.5
Properties
44
5.6
Litigation and Environmental Matters
44
5.7
Compliance with Laws and Agreements
45
5.8
Investment and Holding Company Status
45
5.9
Taxes
45
5.10
ERISA
45
5.11
Disclosure
46
5.12
Capitalization
46
5.13
Subsidiaries
46
5.14
Material Indebtedness, Liens and Agreements
47
5.15
Federal Reserve Regulations
47
5.16
Solvency
48
5.17
Force Majeure
48
5.18
Accounts Receivable
48
5.19
Labor and Employment Matters
49
5.20
Bank Accounts
50
Article 6
Conditions
50
6.1
Effective Time
50
6.2
Each Extension of Credit
52
Article 7
Affirmative Covenants
53
7.1
Financial Statements and Other Information
53
7.2
Notices of Material Events
55
7.3
Existence; Conduct of Business
55
7.4
Payment of Obligations
55
7.5
Maintenance of Properties; Insurance
55
7.6
Books and Records; Inspection Rights
56
7.7
Fiscal Year
56
7.8
Compliance with Laws
57
7.9
Use of Proceeds
57
7.10
Certain Obligations Respecting Subsidiaries
57
7.11
ERISA
57
7.12
Environmental Matters; Reporting
57
7.13
Matters Relating to Additional Real Property Collateral
58
7.14
Cash Deposits/Bank Accounts
58
7.15
Collateral in the Possession of a Bailee
58
Article 8
Negative Covenants
59
8.1
Indebtedness
59
8.2
Liens
59
8.3
Contingent Liabilities
61
8.4
Fundamental Changes; Asset Sales
61
8.5
Investments; Hedging Agreements
61
8.6
Restricted Junior Payments
62
8.7
Transactions with Affiliates
62
8.8
Restrictive Agreements
62
8.9
Sale-Leaseback Transactions
63
8.10
Lines of Business
63
8.11
Modifications of Certain Documents
63
Article 9
Events of Default
63
9.1
Events of Default
63
9.2
Receivership
66
Article 10
Miscellaneous
67
10.1
Notices
67
10.2
Waivers; Amendments
67
10.3
Expenses; Indemnity: Damage Waiver
68
10.4
Successors and Assigns
69
10.5
Survival
70
10.6
Counterparts; Integration; References to Agreement; Effectiveness
70
10.7
Severability
71
10.8
Right of Setoff
71
10.9
Subordination by Credit Parties
71
10.10
Governing Law; Jurisdiction; Consent to Service of Process
72
10.11
WAIVER OF JURY TRIAL
72
10.12
Headings
73
10.13
Confidentiality
73
AMENDED AND RESTATED
CREDIT AND SECURITY AGREEMENT
THIS
AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT dated as of July 17, 2003 (this
"Agreement") is by and among KVH INDUSTRIES, INC., a Delaware corporation (the
"Borrower"), FLEET CAPITAL CORPORATION, as Lender, FLEET NATIONAL BANK, as
Issuing Lender and Cash Management Bank.
WHEREAS
,
the Borrower and the Lender entered into that certain Loan and Security Agreement, dated
as of March 27, 2000 (the "Existing Agreement"), pursuant to which the Lender
extended to the Borrower a revolving line of credit in the principal amount of
$5,000,000.00;
WHEREAS
,
the Borrower has requested that the Lender increase the principal amount of the revolving
line of credit to $15,000,000.00, and the Lender has agreed to make such an increase on
the condition that the Borrower agree to amend and restate the terms of the Existing
Agreement in their entirety pursuant to the terms hereof;
NOW,
THEREFORE,
the parties hereto agree as follows:
ARTICLE 1.........
Definitions
1.1      Defined Terms.  As used in this Agreement, the following terms have the meanings specified below:
"
Accounts
Receivable/Loan Reconciliation Report
" means a certificate signed by a Designated
Financial Officer in substantially the form of
Exhibit B-3
hereto.
"
ACH
Reserve
" means, as of the Closing Date, $45,000.00, as such amount may be
adjusted from time to time in the Lender's sole discretion.
"
Adjusted
Base Rate
" means, for any day, a rate per annum equal to the greater of (a) the
Prime Rate in effect on such day, and (b) the Federal Funds Effective Rate in effect on
such day
plus
1/2 of 1%. Any change in the Adjusted Base Rate due to a change in
the Prime Rate or the Federal Funds Effective Rate shall be effective from and including
the effective date of such change in the Prime Rate or the Federal Funds Effective Rate,
respectively.
"
Advance
Request
" means a written request signed by a Designated Financial Officer for a
Borrowing in accordance with subsection 2.1(b), in substantially the form of
Exhibit B-5
annexed hereto.
"
Affiliate
"
means, with respect to a specified Person, another Person that Controls or is Controlled
by or is under common Control with the Person specified. The term "Affiliate"
shall exclude any Foreign Subsidiary.
"
Applicable
Margin
" and "
Applicable Unused Fee Rate
" means, for any Type of
Loans (a) for the Initial Payment Period (as defined below) the following percentages per
annum:
Applicable
Unused Fee Rate
Applicable Margin (%
per annum) (% per annum)
Revolving Loans                    0.00%                  2.00%                     0.25%
"
Assignment
Regarding Federal Contracts
" means that certain Assignment, dated as of
March 27, 2000, by the Borrower in favor of the Lender, regarding certain federal
contracts to which the Borrower is a party, together with each Notice of Assignment
executed in connection therewith.
"
Available
Funds
" means all deposits in the Controlled Accounts which have been made by 2:00
p.m., Boston, Massachusetts time, on a Business Day, or such later time as the Lender and
the Cash Management Bank shall have expressly consented to.
"
Base
Rate
" when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by
reference to the Adjusted Base Rate.
"
Board
"
means the Board of Governors of the Federal Reserve System of the United States of
America.
"
Borrower
"
means KVH Industries, Inc., a Delaware corporation.
"
Borrowing
"
means Loans of the same Type, made, converted or continued on the same date and, in the
case of Eurodollar Loans, as to which a single Eurodollar Interest Period is in effect.
"
Borrowing
Base
" means, at the relevant time of reference thereto, an amount determined by
the Lender by reference to the most recent Borrowing Base Certificate delivered to the
Lender pursuant to Section 2.1(b) which is equal to the sum of:
(a)
85% of Eligible Accounts, plus
(b)    
          the lesser of 20% of Eligible Raw Materials Inventory and $2,000,000.00;
plus
(c)    
          the lesser of 50% of Eligible Finished Goods Inventory and $3,000,000.00;
minus
(d)
the Merchant Service Line of Credit Reserve, the FX Daily Delivery Reserve, the
                    FX Pre-settlement Reserve, the ACH Reserve, the Permanent Availability Reserve,
                    and such other reserves as the Lender in its sole discretion shall deem
                    appropriate from time to time;
In determining the Borrowing Base
from time to time, the Lender may, but shall not be required to, rely upon reports or
analyses generated by the Credit Parties (including, without limitation, Borrowing Base
Certificates/Collateral Update Certificates) and reports or analyses generated by or on
behalf of the Lender. Notwithstanding anything to the contrary set forth herein, the
Lender may in its reasonable discretion at any time and from time to time, adjust the
percentages of Eligible Accounts, Eligible Raw Materials Inventory, Eligible Finished
Goods Inventory included within the Borrowing Base.
"
Borrowing
Base Certificate
" means a certificate signed by a Designated Financial Officer
certifying the amount of the Borrowing Base as of the date set forth therein, in
substantially the form of
Exhibit B-1
hereto.
"
Business
Day
" means any day that is not a Saturday, Sunday or other day on which
commercial banks in Boston, Massachusetts are authorized or required by law to remain
closed;
provided
that, when used in connection with a Eurodollar Loan, the term
"
Business Day
" shall also exclude any day on which banks are not open for
dealings in U.S. dollar deposits in the London interbank market.
"
Capital
Expenditures
" means, for any period, the sum for the Borrower and its
Subsidiaries (determined in accordance with GAAP) of the aggregate amount of expenditures
made or liabilities incurred during such period (including the aggregate amount of Capital
Lease Obligations incurred during such period) to acquire or construct fixed assets, plant
and equipment (including renewals, improvements and replacements, but excluding repairs)
computed in accordance with GAAP;
provided
that such term shall not include any
such expenditures in connection with any replacement or repair of Property affected by a
Casualty Event.
"
Capital
Lease Obligations
" of any Person means the obligations of such Person to pay rent
or other amounts under any lease of (or other arrangement conveying the right to use) real
or personal property, or a combination thereof, which obligations are required to be
classified and accounted for as capital leases on a balance sheet of such Person under
GAAP, and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"
Cash
Management Bank
" means Fleet National Bank, in its capacity as the provider of
cash management services to the Borrower.
"
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.
"
Change
in Law
" means (a) the adoption of any law, rule or regulation after the Closing
Date, (b) any change after the Closing Date in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority or (c) compliance by
the Lender or the Issuing Lender (or, for purposes of subsection 2.9(b), by any
lending office of the Lender or by the Lender's or the Issuing Lender's holding
company, if any) with any request, guideline or directive (whether or not having the force
of law), other than a request or directive to comply with any law, rule or regulation in
effect on the Closing Date, of any Governmental Authority made or issued after the Closing
Date.
"
Change
of Control
" means (a) any Person or "group" (within the meaning of
Section 13(d) of the Securities Exchange Act of 1934, as amended) of Persons acting in
concert as a partnership or other group shall, as a result of a tender or exchange offer,
open market purchases, privately negotiated purchases or otherwise, have become, after the
date hereof, the "beneficial owner" (within the meaning of such term under Rule
13d-3 under the Exchange Act) of securities of the Borrower representing 50% or more of
the combined voting power of the then outstanding securities of the Borrower ordinarily
(and apart from rights accruing under special circumstances) having the right to vote in
the election of directors; or (b) any event, transaction or occurrence as a result of
which a majority of the seats (other than vacant seats) on the board of directors of the
Borrower shall be occupied by Persons who were neither (i) nominated by the board of
directors of the Borrower nor (ii) appointed by directors so nominated; or (c) the sale of
all or substantially all of the business or assets of the Borrower.
"
Closing
Date
" means the date during which the Effective Time shall occur.
"
Code
"
means the Internal Revenue Code of 1986, as amended from time to time.
"
Collateral
"
means, collectively, all of the Property in which Liens are purported to be granted
hereunder and under the other Loan Documents as security for the Obligations of the Credit
Parties hereunder.
"
Collateral
Update Certificate
" means a certificate signed by a Designated Financial Officer,
in substantially the form of
Exhibit B-2
annexed hereto.
"
Compliance
Certificate
" means a certificate signed by a Designated Financial Officer, in
substantially the form of
Exhibit
D annexed hereto, (a) 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, and (b) 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 5.4 and, if any such change has occurred,
specifying the effect of such change on the financial statements accompanying such
certificate.
"
Control
"
means the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the ability to
exercise voting power, by contract or otherwise. "
Controlling
" and
"
Controlled
" have meanings correlative thereto. A Person who owns or
holds capital stock, beneficial interests or other securities representing five percent
(5%) or more of the Total Voting Power of another Person shall be deemed, for purposes of
this Agreement, to "control" such other Person.
"
Control
Agreement
" means with respect to any Controlled Account, an agreement in
accordance with Section 4.3(b), in form and substance satisfactory to the Lender, executed
and delivered by the Credit Parties, the depository institution at which such Controlled
Account is maintained and the Lender at the Effective Time and thereafter in accordance
with Section 7.14, as such agreement may be amended, supplemented or otherwise
modified from time to time, including, without limitation, the Dominion Account Agreement.
"
Controlled
Account
" has the meaning assigned to such term in Section 4.3(a).
"
Copyrights
"
means all copyrights, whether statutory or common law, owned by or assigned to the Credit
Parties, and all exclusive and nonexclusive licenses to the Credit Parties from third
parties or rights to use copyrights owned by such third parties, including, without
limitation, the registrations, applications and licenses listed on
Schedule 5.5
hereto, along with any and all (a) renewals and extensions thereof, (b) income, royalties,
damages, claims and payments now and hereafter due and/or payable with respect thereto,
including, without limitation, damages and payments for past, present or future
infringements thereof, (c) rights to sue for past, present and future infringements
thereof, and (d) foreign copyrights and any other rights corresponding thereto throughout
the world.
"
Credit
Parties
" (i) until such time as any acquired or newly created Subsidiary of the
Borrower shall become a Subsidiary Guarantor of the Obligations of the Borrower hereunder,
the Borrower; and (ii) from and after such time as any acquired or newly created
Subsidiary of the Borrower shall become a Subsidiary Guarantor of the Obligations of the
Borrower hereunder, the Borrower and all Subsidiary Guarantors.
"
Default
"
means any event or condition which constitutes an Event of Default or which upon notice,
lapse of time or both would, unless cured or waived, become an Event of Default.
"
Designated
Financial Officer
" means an individual holding one or more of the following
offices with each of the Credit Parties or otherwise having executive responsibilities for
financial matters and listed in
Schedule 1.4
hereto: chief financial officer,
principal accounting officer, treasurer, assistant treasurer or controller.
"
Disclosed
Matters
" means the actions, suits and proceedings and the environmental matters
disclosed in
Schedule 5.6
.
"
Disposition
"
means any sale, assignment, transfer or other disposition of any property (whether now
owned or hereafter acquired) by any Credit Party to any Person other than to another
Credit Party or any Subsidiary of the Borrower excluding (a) the granting of Liens
permitted hereunder and (b) any sale, assignment, transfer or other disposition of (i) any
property sold or disposed of in the ordinary course of business and on ordinary business
terms, (ii) any property no longer used or useful in the business of the Credit Parties
and (iii) any Collateral pursuant to an exercise of remedies by the Lender hereunder or
under any other Loan Document.
"
Dominion
Account Agreement
" means that certain Three-Party Blocked Account Service
Agreement , dated as of October 19, 2001, by and among the Borrower, the Lender and
the Cash Management Bank, as amended and restated in its entirety by that certain Amended
and Restated Blocked Account Agreement, dated as of July 17, 2003, as the same may be
amended, restated, modified or supplemented from time to time.
"
Effective
Time
" means the time specified in a written notice from the Lender when the
conditions specified in Section 6.1 are satisfied (or waived in accordance with
Section 10.2).
"
Eligible
Accounts
" means (a) the aggregate face amount of the accounts receivable
outstanding and owed to the Borrower as determined in accordance with GAAP consistently
applied and as entered on the books and records of the Borrower in the ordinary course of
the business operations of the Borrower which satisfy each of the requirements set forth
below,
minus
(b) without duplication, the aggregate amount of any returns,
discounts (which may, at the Lender's option, be calculated on the shortest term),
claims, credits, chargebacks, contra accounts, allowances or excise taxes of any nature
(whether issued, owing, granted or outstanding):
(i)       
               the subject goods have been sold and/or services have been rendered on an
               absolute sale basis and on an open account basis to an account debtor which is
               not (A) the United States government or any agency thereof or other Person such
               that the Assignment of Claims Act would apply to the pledge of receivables of
               such account debtor, unless the Assignment of Claims Act has been complied with
               to the satisfaction of the Lender or (B) an Affiliate or a Subsidiary of any
               Credit Party;
(ii)       
               an invoice (in form and substance acceptable to the Lender) has been sent to the
               applicable account debtor and bears an invoice date contemporaneous with or
               later than the date of sale of such goods or rendering of such service;
(iii)       
               the account receivable does not arise from a sale to the account debtor on a
               bill-and-hold, guaranteed sale, sale-or-return, sale-on-assignment,
               sale-on-appraisal, consignment or any other repurchase or return basis;
               (provided, however, that goods sold to an account debtor pursuant to a purchase
               order or other contract that specifies delivery of goods "ex-works" or
               "free carrier", as such terms are defined by Incoterms 2000, shall not
               be deemed a "bill and hold" sale;
(iv)       
               the account is not evidenced by chattel paper or an instrument of any kind, and
               has not been reduced to judgment;
(v)       
               the account debtor is not insolvent or the subject of any bankruptcy or
               insolvency proceedings of any kind;
(vi)       
               the account debtor is credit worthy and not experiencing financial difficulties
               that could affect the collectability of the account;
(vii)       
               the account debtor is an entity organized under the laws of one of the United
               States or one of the provinces of Canada, whose main office is also located
               within the United States (including Puerto Rico as within the United States) or
               Canada, or, if the account debtor is not such an entity organized and located
               within the United States or Canada, the account is insured by a letter of credit
               issued or confirmed by a bank acceptable to the Lender or by other credit
               enhancements, in each case in form and substance satisfactory to the Lender;
(viii)       
               the account receivable is a valid and legally enforceable obligation of the
               account debtor thereunder, it is not subject to recoupment, offset (other than
               discount for prompt payment) or other defense on the part of such account debtor
               or to any claim on the part of such account debtor denying liability thereunder;
(ix)       
               the account receivable is not subject to any Lien of any kind except for the
               Lien of the Lender securing the obligations of the Credit Parties under this
               Agreement;
(x)       
               the account receivable has not remained outstanding in whole or in part for more
               than (A) ninety (90) days after the invoice date or (B) sixty (60) days after
               the due date;
(xi)       
               the account receivable does not arise out of a transaction (direct or indirect)
               with an employee, officer, agent, director or stockholder of any Credit Party;
(xii)       
               the account receivable is not owing from an account debtor from whom fifty
               percent (50%) or more of the dollar amount of all accounts receivable are deemed
               ineligible under clause (x) above;
(xiii)       
               the total unpaid accounts receivable owing from such account debtor do not
               exceed twenty percent (20%) of all Eligible Accounts;
(xiv)       
               the account receivable constitutes Collateral in which the Lender has a First
               Priority Lien securing the Obligations of the Credit Parties under this
               Agreement;
(xv)       
               the Credit Parties have not made an agreement with the account debtor to extend
               the time of payment of the subject account receivable;
(xvi)       
               the account debtor is not located in Minnesota (or any other jurisdiction which
               adopts a statute or other requirement with respect to which any Person that
               obtains business from within such jurisdiction or is otherwise subject to such
               jurisdiction's tax law must file a "Business Activity Report" (or
               other applicable report) or make any other required filings in a timely manner
               in order to enforce its claims in such jurisdiction's courts or arising
               under such jurisdiction's laws); provided, that accounts receivable which
               would be Eligible Accounts but for the terms of this clause (xvi) shall
               nonetheless be deemed to be Eligible Accounts if the Credit Parties have filed a
               "Business Activity Report" (or other applicable report) with the
               applicable state office or are qualified to do business in such jurisdiction
               and, at the time the account receivable was created, was qualified to do
               business in such jurisdiction or had on file with the applicable state office a
               current "Business Activity Report" (or other applicable report); and
(xvii)       
               the account receivable is denominated in U.S. Dollars;
provided, however
, that (A)
the Lender may, in its reasonable discretion, upon ten (10) calendar days notice to the
Borrower, exclude particular accounts from the definition of Eligible Accounts and impose
additional and/or more restrictive eligibility or valuation criteria than those set forth
above as preconditions for any account to be deemed to be an Eligible Account hereunder.
"
Eligible
Inventory
" means inventory of the Borrower recorded on the books and records of
the Borrower in the ordinary course of the business operations of the Borrower valued on a
first in first out basis at the lower of (a) the fair market value of such inventory, or
(b) the cost charged by suppliers which are not Affiliates or Subsidiaries of the
Borrower, which inventory satisfies each of the following requirements:
(i)       
               is in good and merchantable condition or, as respects work in process, is
               incorporated in customer products being produced or provided by the Borrower;
(ii)       
               meets all standards imposed by any government agency having regulatory authority
               over such goods and/or their use, manufacture and/or sale;
(iii)       
               has been physically received in the continental United States by the Borrower
               and is located at a facility owned or leased by the Borrower; provided that no
               inventory located at a leased facility shall be deemed to be "Eligible
               Inventory" hereunder unless the landlord of such facility shall have
               entered into an agreement satisfactory in form and substance to the Lender
               acknowledging the Liens of the Lender and granting the Lender unrestricted
               access to such inventory;
(iv)       
               is currently useable or currently salable in the normal course of the business
               operations, or, as respects raw materials and work in process, is incorporated
               or is being held to be incorporated in customer products being produced or
               provided by the Borrower;
(v)       
               does not constitute excess, obsolete, unsaleable, shopworn, seconds, damaged or
               unfit inventory;
(vi)       
               has not remained in the possession of the Borrower for more than 365 days or has
               not otherwise been determined by the Lender in its sole discretion to constitute
               slow-moving inventory;
(vii)       
               does not arise from a sale to an account debtor on a bill-and-hold, guaranteed
               sale, sale-or-return, sale-on-approval, consignment or any other repurchase or
               return basis;
(viii)       
               is not subject to any Lien of any kind except for the Lien of the Lender
               securing Obligations under this Agreement;
(ix)       
               has not been sold to any Person; and
(x)       
               constitutes Collateral in which the Lender has a First Priority Lien securing
               the obligations of the Credit Parties under this Agreement;
provided, however
, that (A)
the aggregate amount of Eligible Inventory shall be computed net of such reserves for slow
moving and other ineligible inventory as the Lender shall reasonably deem appropriate, (B)
the Lender may in its reasonable discretion, upon ten (10) calendar days notice to the
Borrower, exclude particular items of inventory from the definition of Eligible Inventory
and may impose additional and/or more restrictive eligibility or valuation criteria than
those set forth above as preconditions for any item of inventory to be deemed to be
Eligible Inventory hereunder, and (C) inventory deemed to be Eligible Inventory at any one
point in time may be excluded by the Lender in its reasonable discretion, upon ten (10)
calendar days notice to the Borrower, at a future point in time.
"
Eligible
Finished Goods Inventory
" means that portion of Eligible Inventory consisting of
finished goods.
"
Eligible
Raw Materials Inventory
" means that portion of Eligible Inventory consisting of
raw materials.
"
Environmental
Laws
" means all applicable laws, rules, regulations, codes, ordinances, orders,
decrees, judgments, injunctions, notices or binding agreements issued, promulgated or
entered into by any Governmental Authority, relating in any way to the environment,
preservation or reclamation of natural resources, the management, release or threatened
release of any Hazardous Material or to health and safety matters.
"
Environmental
Liability
" means any liability, contingent or otherwise (including any liability
for damages, costs of environmental remediation, fines, penalties or indemnities), of any
Credit Party directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage, treatment
or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the
release or threatened release of any Hazardous Materials into the environment or (e) any
contract, agreement or other consensual arrangement pursuant to which liability is assumed
or imposed with respect to any of the foregoing.
"
Equity
Rights
" means, with respect to any Person, any subscriptions, options, warrants,
commitments, preemptive rights or agreements of any kind (including any stockholders'
or voting trust agreements) for the issuance or sale of, or securities convertible into,
any additional shares of capital stock 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 trade or business (whether or not incorporated) that,
together with the Credit Parties, is treated as a single employer within the meaning of
Section 414(b), (c), (m) or (o) of the Code. Notwithstanding the foregoing, for
purposes of any liability related to a Multiemployer Plan under Title IV of ERISA, the
term "ERISA Affiliate" means any trade or business that, together with the
Credit Parties, is treated as a single employer within the meaning of Section 4001(b) of
ERISA.
"
ERISA
Event
" means (a) a "reportable event", as defined in Section 4043
of ERISA or the regulations issued thereunder for which the notice requirement has not
been waived with respect to any Pension Plan, (b) the existence with respect to any
Pension Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived, (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any Pension Plan,
(d) the incurrence by any Credit Party or any ERISA Affiliate of any liability under Title
IV of ERISA with respect to the termination of any Pension Plan, (e) the receipt by any
Credit Party or any ERISA Affiliate from the PBGC or plan administrator of any notice
relating to an intention to terminate any Pension Plan or Pension Plans or to appoint a
trustee to administer any Pension Plan, or (f) the receipt by any Credit Party or any
ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from any Credit
Party or any ERISA Affiliate of any notice of Withdrawal Liability or a determination that
a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the
meaning of Title IV of ERISA.
"
Eurodollar
"
when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans
comprising such Borrowing, are bearing interest at a rate determined by reference to the
Eurodollar Rate.
"
Eurodollar
Interest Period
" means with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically corresponding day
in the calendar month that is one, two, three or six months thereafter, as the Borrower
may elect;
provided
, that (i) if any Eurodollar Interest Period would end on a day
other than a Business Day, such Eurodollar Interest Period shall be extended to the next
succeeding Business Day unless such next succeeding Business Day would fall in the next
calendar month, in which case such Eurodollar Interest Period shall end on the next
preceding Business Day and (ii) any Eurodollar Interest Period that commences on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the last calendar month of such Eurodollar Interest Period) shall end
on the last Business Day of the last calendar month of such Eurodollar Interest Period.
For purposes hereof, the date of a Borrowing initially shall be the date on which such
Borrowing is made and thereafter shall be the effective date of the most recent conversion
or continuation of such Borrowing. Notwithstanding the foregoing, if any Eurodollar
Interest Period for any Revolving Credit Borrowing would otherwise end after the Revolving
Credit Maturity Date, such Eurodollar Interest Period shall end on the Revolving Credit
Maturity Date.
"
Eurodollar
Rate
" means, with respect to any Eurodollar Borrowing for any Eurodollar Interest
Period, the rate appearing on Dow Jones Markets Page 3750 (or on any successor or
substitute page of such Service, or any successor to or substitute for such Service,
providing rate quotations comparable to those currently provided on such page of such
Service, as determined by the Lender from time to time for purposes of providing
quotations of interest rates applicable to U.S. dollar deposits in the London interbank
market) at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Eurodollar Interest Period, as the rate for U.S. dollar deposits with
a maturity comparable to such Eurodollar Interest Period. In the event that such rate is
not available at such time for any reason, then the "
Eurodollar Rate
"
with respect to such Eurodollar Borrowing for such Eurodollar Interest Period shall be the
average of the rates at which U.S. dollar deposits of $5,000,000, and for a maturity
comparable to such Eurodollar Interest Period, are offered by four major banks in the
London interbank market as selected by the Lender in immediately available funds in the
London interbank market at approximately 11:00 a.m., London time, two Business Days
prior to the commencement of such Eurodollar Interest Period.
"
Eurodollar
Request
" means a written request signed by a Designated Financial Officer for the
conversion of Base Rate Loans into Eurodollar Loans or for the continuation of an existing
Eurodollar Loan for an additional Eurodollar Interest Period in accordance with
Section 2.3, in substantially the form of
Exhibit B-4
annexed hereto.
"
Event
of Default
" has the meaning assigned to such term in Section 9.1.
"
Excess
Availability
" means, as of any date of determination thereof, the difference
between (a) the lesser of (i) the Revolving Credit Commitment at such time and (ii) the
Borrowing Base at such time, and (b) the Revolving Credit Exposure at such time.
"
Excluded
Taxes
" means, with respect to the Lender, the Issuing Lender or any other
recipient of any payment to be made by or on account of any Obligation hereunder, (a)
income, net worth or franchise taxes imposed on (or measured by) its net income or net
worth by the United States of America, or by the jurisdiction under the laws of which such
recipient is organized or in which its principal office is located or, in the case of the
Lender, in which its lending office is located or in which it is taxable solely on account
of some connection other than the execution, delivery or performance of this Agreement or
the receipt of income hereunder, and (b) any branch profits taxes imposed by the United
States of America or any similar tax imposed by any other jurisdiction in which the
Borrower is located.
"
Existing
Debt
" means (i) Indebtedness of the Credit Parties existing as of the Effective
Time which is being repaid in full with the proceeds of the Loans made by the Lender at
the Effective Time and (ii) Indebtedness of the Credit Parties and the Foreign Subsidiary
existing as of the Effective Time which is permitted to remain outstanding after the
Effective Time under Section 8.1 and is listed on
Schedule 8.1
hereto.
"
Federal
Funds Effective Rate
" means, for any day, the weighted average (rounded upwards,
if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal funds brokers,
as published on the next succeeding Business Day by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day that is a Business Day, the average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day
for such transactions received by the Lender from three Federal funds brokers of
recognized standing selected by it.
"
First
Priority
" means, with respect to any Lien purported to be created in any
Collateral pursuant to any Collateral Document, that such Lien is the most senior Lien
(other than Permitted Liens) to which such Collateral is subject.
"
Foreign
Subsidiary
" shall mean KVH Europe A/S, a Danish corporation.
"
FX
Daily Delivery Reserve
" means, as of the Closing Date, $100,000.00, as such
amount may be adjusted from time to time in the Lender's sole discretion.
"
FX
Pre-settlement Reserve
" means, as of the Closing Date, $400,000.00, as such
amount may be adjusted from time to time in the Lender's sole discretion.
"
GAAP
"
means generally accepted accounting principles in the United States of America.
"
Governmental
Authority
" means the government of the United States of America, any other nation
or any political subdivision thereof, whether state or local, and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government.
"
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. The terms "
Guarantee
" and
"
Guaranteed
" used as a verb shall have a correlative meaning. The amount
of any Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligations in respect of which such Guarantee is made or, if not
stated or determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder).
"
Guarantor
"
means any Person, which becomes a guarantor hereunder after the Effective Time.
"
Hazardous
Materials
" means all explosive or radioactive substances or wastes and all
hazardous or toxic substances, wastes or other pollutants, including petroleum or
petroleum distillates, asbestos or asbestos containing materials, polychlorinated
biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of
any nature, in each case regulated or subject to regulation pursuant to any Environmental
Law.
"
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.
"
Indebtedness
"
means, for any Person, without duplication: (a) obligations created, issued or incurred by
such Person for borrowed money (whether by loan, advance, 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 trade accounts payable (other than for borrowed money) arising,
and accrued expenses and deferred taxes incurred and paid, in the ordinary course of
business; (c) Capital Lease Obligations of such Person; (d) obligations of such Person in
respect of Hedging Agreements; and (e) obligations of such Person in respect of letters of
credit or similar instruments issued or accepted by banks and other financial institutions
for the account of such Person. The Indebtedness of any Person shall include the
Indebtedness of any other entity (including any partnership in which such Person is a
general partner) to the extent such Person is liable therefor as a result of such
Person's ownership interest in or other relationship with such entity, except to the
extent the terms of such Indebtedness provide that such Person is not liable therefor.
"
Indemnified
Taxes
" means all Taxes other than (a) Excluded Taxes and Other Taxes and (b)
amounts constituting penalties or interest imposed with respect to Excluded Taxes or Other
Taxes.
"
Intercompany
Indebtedness
" has the meaning assigned to such term in Section 10.9.
"
Investment
"
means, for any Person: (a) the acquisition (whether for cash, Property, services or
securities or otherwise) of capital stock, bonds, notes, debentures, partnership, limited
liability company or other ownership interests or other securities of any other Person or
any agreement to make any such acquisition (including, without limitation, any "short
sale" or any sale of any securities at a time when such securities are not owned by
the Person entering into such short sale); (b) the making of any deposit with, or advance,
loan or other extension of credit to, any other 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 representing the purchase price of inventory or supplies sold by such Person in the
ordinary course of business provided that in no event shall the term of any such inventory
or supply advance, loan or extension of credit exceed 180 days); or (c) the entering into
of any Guarantee of, or other contingent obligation with respect to, Indebtedness or other
liability of any other Person and (without duplication) any amount committed to be
advanced, lent or extended to such Person. Notwithstanding the foregoing, Capital
Expenditures shall not be deemed "
Investments
" for purposes hereof.
"
Issuing
Lender
" means Fleet National Bank, an affiliate of the Lender, in its capacity as
an issuer of Letters of Credit hereunder.
"
Landlord's
Waiver and Consent
" means, with respect to any Leasehold Property, a letter,
certificate or other instrument in writing from the lessor under the related lease, in
form approved by the Lender in its sole discretion, including, without limitation, the
Landlord Waiver and Consent entered into as of July, 2003, with respect to each of the
Tinley Park, Illinois property and the St. Petersburg, Florida property.
"
LC
Disbursement
" means a payment made by the Issuing Lender pursuant to a Letter of
Credit.
"
LC
Sublimit
" means a sublimit of the Revolving Credit Commitment available for the
issuance of Letters of Credit for the account of the Borrower in an aggregate maximum
amount available to be drawn equal to $1,000,000.
"
Leasehold
Property
" means any leasehold interest of any Credit Party as lessee under any
lease of real property, other than any such leasehold interest designated from time to
time by the Lender in its sole discretion as not being required to be included in the
Collateral and not being of material importance to the business or operations of the
Credit Parties.
"
Lender
"
means Fleet Capital Corporation or any other party which becomes a lender hereunder.
"
Letter
of Credit
" means any letter of credit issued on a standby basis or in support of
trade obligations of the Borrower pursuant to this Agreement.
"
Lien
"
means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge,
hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the
interest of a vendor or a lessor under any conditional sale agreement, capital lease or
title retention agreement (or any financing lease having substantially the same economic
effect as any of the foregoing), other than an operating lease, relating to such asset and
(c) in the case of securities, any purchase option, call or similar right of a third party
with respect to such securities.
"
Loan
Documents
" means this Agreement, the Revolving Credit Note, the Omnibus
Amendment, the Negative Pledge Agreements, Mortgagee Waiver and Consent, Landlord's
Waivers and Consents, the Assignment Regarding Federal Contracts, the UCC Financing
Statements, the Dominion Account Agreement, the Letters of Credit and any other
instruments or documents executed and delivered or to be delivered to the Lender from time
to time pursuant to this Agreement, as the same may be supplemented and amended from time
to time in accordance with their respective terms.
"Loans"
means the Revolving Loans.
"
Material
Adverse Effect
" means, any event, circumstance, happening or condition, which, in
the Lender's reasonable discretion, has resulted or could reasonably result in a
material adverse effect on (a) the business, assets, financial condition or prospects of
the Credit Parties taken as a whole, (b) the ability of any Credit Party to pay or perform
any of its obligations under this Agreement or the other Loan Documents or (c) any of the
rights of or benefits available to the Lender under this Agreement and the other Loan
Documents.
"
Material
Indebtedness
" means Indebtedness (other than the Loans or Letters of Credit),
including, without limitation, obligations in respect of one or more Hedging Agreements,
in an aggregate principal amount exceeding $500,000. For purposes of determining Material
Indebtedness, the "principal amount" of the obligations of any Person in respect
of a Hedging Agreement at any time shall be the maximum aggregate amount (giving effect to
any netting agreements) that such Person would be required to pay if such Hedging
Agreement were terminated at such time.
"
Material
Leasehold Property
" means a Leasehold Property reasonably determined by the
Lender to be of material value as Collateral or of material importance to the operations
of the Credit Parties.
"
Material
Owned Property
" means any real property owned by any Credit Party that is
reasonably determined by the Lender to be of material value as Collateral or of material
importance to the operations of the Credit Parties following the Closing Date.
"
Material
Rental Obligations
" means obligations of the Credit Parties to pay rent under any
one or more operating leases with respect to any real or personal property that is
material to the business of the Credit Parties.
"
Merchant
Service Line of Credit Reserve
" means, as of the Closing Date, $100,000.00, as
such amount may be adjusted from time to time in the Lender's sole discretion.
"
Mortgage
"
means a security instrument (whether designated as a deed of trust or a mortgage,
leasehold mortgage, assignment of leases and rents or by any similar title) executed and
delivered by any Credit Party in such form as may be approved by the Lender in its sole
and reasonable discretion, in each case with such changes thereto as may be recommended by
the Lender's local counsel based on local laws or customary local practices, as such
security instrument or amendment may be amended, supplemented or otherwise modified from
time to time.
"
Mortgaged
Property
" means any Real Property Asset that is now owned or leased, or acquired
after the date hereof, by any Credit Party with respect to which the Lender requires such
Credit Party to grant a Mortgage in favor of the Lender following the Closing Date.
"
Mortgagee
Waiver and Consent
" means that certain Mortgagee Waiver and Consent for 50
Enterprise Center, Middletown, Rhode Island, by IDS Life Insurance Company in favor of the
Lender and acknowledged by the Borrower, dated as of July, 2003.
"
Multiemployer
Plan
" means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.
"
Negative
Pledge Agreements
" means those certain Negative Pledge Agreement – Patents
and Negative Pledge Agreement – Trademarks, each dated as of March 27, 2000, by and
between the Borrower and the Lender, as amended by that certain first amendment dated as
of July 17, 2003, as each may be amended, restated, modified or supplemented from time to
time.
"Net
Cash Payments" means,
(a)       
               with respect to any Casualty Event, the aggregate amount of cash proceeds of
               insurance, condemnation awards and other compensation received by the Credit
               Parties in respect of such Casualty Event net of (i) reasonable expenses
               incurred by the Credit Parties in connection therewith and (ii) contractually
               required repayments of Indebtedness to the extent secured by a Lien on such
               property and (iii) any income and transfer taxes payable by the Credit Parties
               in respect of such Casualty Event;
(b)       
               with respect to any Disposition, the aggregate amount of all cash payments
               received by the Credit Parties directly or indirectly in connection with such
               Disposition, whether at the time of such Disposition or after such Disposition
               under deferred payment arrangements or Investments entered into or received in
               connection with such Disposition, net of (i) the amount of any legal, title,
               transfer and recording tax expenses, commissions and other fees and expenses
               payable by the Credit Parties in connection therewith, (ii) any Federal, state
               and local income or other Taxes estimated to be payable by the Credit Parties as
               a result thereof, (iii) any repayments by the Credit Parties of Indebtedness to
               the extent that such Indebtedness is secured by a Lien on the property that is
               the subject of such Disposition and 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, and (iv) any repayments by the Credit Parties to
               minority stockholders if and to the extent permitted hereby; and
(c)       
               with respect to any incurrence of Indebtedness or offering of equity securities,
               the aggregate amount of all cash proceeds received by the Credit Parties
               therefrom less all legal, underwriting and similar fees and expenses incurred in
               connection therewith.
"
Obligations
"
means (a) the aggregate outstanding principal balance of and all interest on the Loans
made by the Lender to the Borrower (including any interest accruing after the commencement
of any proceeding by or against the Borrower under the federal bankruptcy laws, as now or
hereafter constituted, or any other applicable federal or state bankruptcy, insolvency or
other similar law, and any other interest that would have accrued but for the commencement
of such proceeding, whether or not any such interest is allowed as a claim enforceable
against the Borrower in any such proceeding), and (b) all LC Disbursements, overdraft
obligations, fees, costs, charges, expenses and other obligations from time to time owing
to the Lender, the Issuing Lender, the Cash Management Bank, or any other Affiliate of the
Lender by the Credit Parties hereunder or under any other Loan Document or in respect of
any Hedging Agreement, cash management agreement, operating or deposit account, or other
banking product from time to time made available to the Credit Parties by the Lender, the
Issuing Lender, the Cash Management Bank or any other Affiliate of the Lender.
"
Omnibus
Amendment
" shall mean that certain Amendment Regarding the Negative Pledge
Agreements, Assignments Regarding Federal Contracts, Dominion Account Agreement, the
Letters of Credit, this Agreement, the UCC Financing Statements and any other agreements
and instruments referred to therein.
"
Other
Taxes
" means any and all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any payment made
hereunder or from the execution, delivery or enforcement of, or otherwise with respect to,
this Agreement and the other Loan Documents,
provided
that there shall be excluded
from "Other Taxes" all Excluded Taxes.
"
Participant
"
shall have the meaning ascribed to it in Section 10.4(b) hereof.
"
Patents
"
means all patents issued or assigned to and all patent applications made by the Credit
Parties and, to the extent that the grant of a security interest does not cause a breach
or termination thereof, all exclusive and nonexclusive licenses to the Credit Parties from
third parties or rights to use patents owned by such third parties, including, without
limitation, the patents, patent applications and licenses listed on
Schedule 5.5
hereto, along with any and all (a) inventions and improvements described and claimed
therein, (b) reissues, divisions, continuations, extensions and continuations-in-part
thereof, (c) income, royalties, damages, claims and payments now and hereafter due and/or
payable under and with respect thereto, including, without limitation, damages and
payments for past or future infringements thereof, (d) rights to sue for past, present and
future infringements thereof, and (e) any other rights corresponding thereto throughout
the world.
"
Pension
Plan
" means any Plan that is a defined benefit pension plan subject to the
provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of
ERISA, and in respect of which any Credit Party or any ERISA Affiliate is (or, if such
plan were terminated, would under Section 4069 of ERISA be deemed to be) an
"employer" as defined in Section 3(5) of ERISA.
"
Permanent
Availability Reserve
" means, as of the Closing Date, Excess Availability in the
amount of $500,000.00, as such amount may be adjusted from time to time in the
Lender's sole discretion.
"
Permitted
Acquisitions
" means any acquisition by any Credit Party of assets or outstanding
equity interests of any Person (other than another Credit Party), if all the following
conditions are met:
(a)......no
Default or Event of Default then exists or would result therefrom (including giving
pro
forma
effect to such acquisition and any additional Indebtedness
resulting therefrom or incurred or assumed in connection therewith as if such acquisition
had occurred and such Indebtedness had been incurred as of the first day of the most
recently completed fiscal quarter of the Credit Parties (including any other Permitted
Acquisition that occurred, and related Indebtedness that was incurred, during such fiscal
quarter));
(b)......such
Person (or the assets so acquired) was, immediately prior to such acquisition, engaged (or
used) primarily in the business permitted pursuant to Section 8.10;
(c)......if
such acquisition is structured as a stock or other equity acquisition, then either (i) the
Person so acquired becomes (x) a Subsidiary of a Credit Party and (y) a Guarantor or (ii)
such Person is merged with and into a Credit Party (with such Credit Party being the
surviving corporation of such merger) and, in any event, all of the assets of such Person
shall become Collateral;
(d)......any
Liens or Indebtedness assumed or issued in connection with such acquisition is otherwise
permitted under Section 8.1 or 8.2, as the case may be;
(e)......the
Lender shall have a valid, perfected, First Priority security interest in all of the
properties and assets being acquired by such Credit Party, subject to Permitted Liens
pursuant to Section 8.2 hereof;
(f)......after giving effect thereto, Excess Availability would be at least $2,500,000;
(g)......any
such Permitted Acquisition (or series of related Permitted Acquisitions) involving total
consideration (including, without limitation, any earn-out, non-compete or deferred
compensation arrangements, the value of any securities issued by any Credit Party and any
cash) by the Credit Parties in excess of $20,000,000 in the aggregate in any fiscal year
shall not be consummated without the prior written consent of the Lender;
(h)......all
transactions related thereto are consummated in compliance, in all material respects, with
applicable laws and regulations;
(i)......the
Borrowers shall have delivered to the Agent a certificate of a Designated Financial
Officer of the Borrowers showing compliance (in reasonable detail as to
pro
forma
calculations) with all of the provisions of this definition; and
(j)......the acquisition is not a hostile acquisition.
"Permitted
Investments" means:
(a)......direct
obligations of, or obligations the principal of and interest on which are unconditionally
guaranteed by, the United States of America (or by any agency thereof to the extent such
obligations are backed by the full faith and credit of the United States of America), in
each case maturing within one year from the date of acquisition thereof;
(b)......investments
in commercial paper maturing within 270 days from the date of acquisition thereof and
having, at such date of acquisition, the highest credit rating obtainable from Standard
and Poor's Ratings Service or from Moody's Investors Service, Inc.;
(c)......investments
in certificates of deposit, banker's acceptances and time deposits maturing within
210 days from the date of acquisition thereof issued or guaranteed by or placed with, and
money market deposit accounts issued or offered by, any domestic office of any commercial
bank organized under the laws of the United States of America or any State thereof which
has a combined capital and surplus and undivided profits of not less than $250,000,000;
(d)......fully
collateralized repurchase agreements with a term of not more than thirty (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)......advances,
loans and extensions of credit to any director, officer or employee of the Credit Parties,
if the aggregate outstanding amount of all such advances, loans and extensions of credit
(excluding travel advances in the ordinary course of business) does not at any time exceed
$100,000.00; and
(f)......investments
in money market mutual funds that are rated AAA by Standard & Poor's Rating
Service.
"
Permitted
Liens
" has the meaning set forth in Section 8.2.
"
Person
"
means any natural person, corporation, limited liability company, trust, joint venture,
association, company, partnership, Governmental Authority or other entity.
"
Plan
"
means any employee benefit plan within the meaning of Section 3(3) of ERISA in which
any Credit Party or any ERISA Affiliate is an "employer" as defined in
Section 3(5) of ERISA, including, but not limited to, any Pension Plan or
Multiemployer Plan.
"
Post-Default
Rate
" means, a rate per annum equal to the Adjusted Base Rate
plus
the
Applicable Margin
plus
three percent (3%).
"
Prime
Rate
" means the rate of interest per annum publicly announced from time to time
by Fleet National Bank, as its prime rate for commercial loans in effect at its principal
office in Boston, Massachusetts, which rate is not necessarily the lowest rate charged by
Fleet National Bank to its most preferred customers; each change in the Prime Rate shall
be effective from and including the date such change is publicly announced as being
effective.
"
Property
"
means any interest of any kind in property or assets, whether real, personal or mixed, and
whether tangible or intangible.
"
Proprietary
Rights
" has the meaning assigned to such term in Section 5.5(b).
"
PTO
"
means the United States Patent and Trademark Office or any successor or substitute office
in which filings are necessary or, in the opinion of the Lender, desirable in order to
create or perfect Liens on any intellectual property, as applicable.
"
Real
Property Asset
" means, at any time of determination, any and all real property
owned or leased by the Credit Parties.
"
Registered
Proprietary Rights
" has the meaning assigned to such term in Section 5.5(c).
"
Reimbursement
Obligation
" has the meaning assigned to such term in Section 2.3(d).
"
Related
Parties
" means, with respect to any specified Person, such Person's
Affiliates and the respective directors, officers, employees, agents and advisors of such
Person and such Person's Affiliates.
"
Restricted
Junior Payment
" means (i) any dividend or other distribution, direct or indirect,
on account of any shares of any class of stock of, or other equity interest in, any Credit
Party or any Subsidiary now or hereafter outstanding, except a dividend payable solely in
shares of stock or other equity interests, (ii) any redemption, retirement, sinking fund
or similar payment, purchase or other acquisition for value, direct or indirect, of any
shares of any class of stock of, or other equity interest in, any Credit Party or any
Subsidiary now or hereafter outstanding, except shares of the Borrower surrendered by
holders in connection with the exercise by the holders of stock options, (iii) any payment
made to retire, or to obtain the surrender of, any outstanding warrants, options or other
rights to acquire shares of any class of stock of, or other equity interest in, any Credit
Party or any Subsidiary, (iv) any payment or prepayment of principal of, premium, if any,
or interest on, or redemption purchase, retirement, defeasance (including economic or
legal defeasance), sinking fund or similar payment with respect to, any Subordinated
Indebtedness, and (v) any payment made to any Affiliates, any Credit Party or any
Subsidiary in respect of management, consulting or other similar services provided to any
Credit Party or any Subsidiary.
"
Restrictive
Agreements
" has the meaning assigned to such term in Section 5.13(b).
"
Revolving
Credit Availability Period
" means the period from and including the Effective
Time to but excluding the earlier of (a) the Revolving Credit Maturity Date and (b) the
date of termination of the Revolving Credit Commitment, as terminated by the Borrower
pursuant to Section 2.7 or by the Lender pursuant to Section 9.1.
"
Revolving
Credit Commitment
" means the commitment of the Lender to make Revolving Loans as
such commitment may be reduced from time to time pursuant to Section 2.5. The original
maximum amount of the Revolving Credit Commitment is equal to $15,000,000.00. Solely for
the purpose of computing the Unused Fee pursuant to Section 2.7 hereof, the
"Revolving Credit Commitment" shall be deemed to be $10,000,000.00.
"
Revolving
Credit Exposure
" means at any time the sum of (a) the outstanding principal
amount of Revolving Loans at such time and (b) the Total LC Exposure at such time.
"Revolving
Credit Maturity Date" means July 17, 2006.
"
Revolving
Credit Note
" means the promissory note, substantially in the form of
Exhibit
A
annexed hereto, issued by the Borrower in favor of the Lender.
"
Revolving
Loan
" means a Loan made pursuant to Section 2.1(a) that utilizes the
Revolving Credit Commitment.
"
Special
Counsel
" means Goulston & Storrs, P.C., in its capacity as special counsel to
Fleet Capital Corporation, as Lender of the credit facilities contemplated hereby.
"
Subsidiary
"
means, with respect to any Person (the "
parent
") at any date, any
corporation, limited liability company, partnership, association or other entity the
accounts of which would be consolidated with those of the parent in the parent's
consolidated financial statements if such financial statements were prepared in accordance
with GAAP as of such date, as well as any other corporation, limited liability company,
partnership, association or other entity (a) of which securities or other ownership
interests representing more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such date,
owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the
parent and/or one or more subsidiaries of the parent. References herein to
"
Subsidiaries
" shall, unless the context requires otherwise, be deemed to
be references to Subsidiaries of the Borrower.
"
Taxes
"
means any and all present or future taxes, levies, imposts, duties, deductions, charges or
withholdings imposed by any Governmental Authority.
"
Total
Gross Availability
" means, at any time, the lesser of (i) the Borrowing Base at
such time and (ii) the Revolving Credit Commitment at such time.
"
Total
LC Exposure
" means, at any time, the sum of (a) 100% of the aggregate undrawn
amount of all outstanding standby and documentary Letters of Credit 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.
"
Total
Voting Power
" means, with respect to any Person, the total number of votes which
holders of securities having the ordinary power to vote, in the absence of contingencies,
are entitled to cast in the election of directors of such Person.
"
Trademarks
"
means all trademarks (including service marks), federal and state trademark registrations
and applications made by the Credit Parties, common law trademarks and trade names owned
by or assigned to the Credit Parties, all registrations and applications for the foregoing
and all exclusive and nonexclusive licenses from third parties of the right to use
trademarks of such third parties, including, without limitation, the registrations,
applications, unregistered trademarks, service marks and licenses listed on
Schedule
5.5
hereto, along with any and all (a) renewals thereof, (b) income, royalties,
damages and payments now and hereafter due and/or payable with respect thereto, including,
without limitation, damages, claims and payments for past or future infringements thereof,
(c) rights to sue for past, present and future infringements thereof, and (d) foreign
trademarks, trademark registrations, and trade name applications for any thereof and any
other rights corresponding thereto throughout the world.
"
Type
"
when used in reference to any Loan or Borrowing, refers to whether the rate of interest on
such Loan, or on the Loans comprising such Borrowing, is determined by reference to the
Eurodollar Rate or the Adjusted Base Rate.
"
UCC
"
means the Uniform Commercial Code (or any similar or equivalent legislation) as in effect
in any applicable jurisdiction.
"
UCC
Financing Statements
" means any of the UCC financing statements filed by the
Lender as secured party against any Credit Party as debtor in connection with this
Agreement and the Existing Agreement.
"
U.S.       
          Dollars
" or "
$
" refers to lawful money of the United
          States of America.
"
Wholly
Owned Subsidiary
" means, with respect to any Person at any date, any corporation,
limited liability company, partnership, association or other entity of which securities or
other ownership interests representing 100% of the equity or ordinary voting power (other
than directors' qualifying shares) or, in the case of a partnership, 100% of the
general partnership interests are, as of such date, directly or indirectly owned,
controlled or held 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.
"
Withdrawal
Liability
" means liability to a Multiemployer Plan as a result of a complete or
partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of
Subtitle E of Title IV of ERISA.
1.2
Terms Generally
. The
definitions of terms herein shall apply equally to the singular and plural forms of the
terms defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words "include",
"includes" and "including" shall be deemed to be followed by the
phrase "without limitation". The word "will" shall be construed to
have the same meaning and effect as the word "shall". Unless the context
requires otherwise (a) any definition of or reference to any agreement, instrument or
other document herein shall be construed as referring to such agreement, instrument or
other document as from time to time amended, supplemented or otherwise modified (subject
to any restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such Person's
successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all references
herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
1.3
Accounting Terms; GAAP
.
Except as otherwise expressly provided herein, all terms of an accounting or financial
nature shall be construed in accordance with GAAP, as in effect from time to time;
provided
that, if the Borrower notifies the Lender that the Borrower requests an
amendment to any provision hereof to eliminate the effect of any change occurring after
the date hereof in GAAP or in the application thereof on the operation of such provision
(or if the Lender notifies the Borrower that the Lender requests an amendment to any
provision hereof for such purpose), regardless of whether any such notice is given before
or after such change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before such change
shall have become effective until such notice shall have been withdrawn or such provision
shall have been amended in accordance herewith.
1.4
Designated Financial
Officers
.  Each Credit Party hereby authorizes each of the Designated
Financial Officers listed in
Schedule 1.4
hereto to act as agent for each Credit
Party and to execute and deliver on behalf of each Credit Party such notices, requests,
waivers, consents, certificates and other documents, and to take any and all actions
required or permitted to be delivered or taken by any Credit Party hereunder. The Borrower
may replace any of the Designated Financial Officers listed in
Schedule 1.4
hereto
or add any additional Designated Financial Officers by delivering written notice to the
Lender specifying the names of each new Designated Financial Officer and the offices held
by each such Person. Each Credit Party hereby agrees that any such notices, requests,
waivers, consents, certificates and other documents executed, delivered or sent by any
Designated Financial Officer and any such actions taken by any Designated Financial
Officer shall bind each Credit Party.
ARTICLE 2.........
The Credits
2.1 Revolving Loans.
(a)......
Revolving
Credit Commitment
. Subject to the terms and conditions set forth herein, the Lender
agrees to make Revolving Loans to the Borrower from time to time during the Revolving
Credit Availability Period in an aggregate principal amount that will not result in the
Revolving Credit Exposure exceeding the lesser of (i) the Revolving Credit Commitment at
such time and (ii) the Borrowing Base at such time. Within the foregoing limits and
subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and
reborrow Revolving Loans.
(b)......
Funding
of Revolving Loans
. To request the funding of any Revolving Loan hereunder, the
Borrower shall deliver to the Lender not later than 1:00 p.m., Boston, Massachusetts time,
by facsimile or electronic mail transmission, an Advance Request in substantially the form
of Exhibit B-5 hereto, and setting forth all of the information required to be set forth
therein including, without limitation, the Total Gross Availability as set forth in the
most recent Collateral Update Certificate/Borrowing Base Certificate delivered to Lender,
and the amount of the Advance requested. Upon receipt of such Advance Request and provided
that no Default or Event of Default shall have occurred and be continuing or shall result
therefrom, not later than 3:30 p.m. Boston, Massachusetts time on the date such Advance
Request is delivered to the Lender, the Lender shall make a Revolving Loan to the Borrower
in an amount equal to the amount set forth in such Advance Request by crediting such
amount to one or more accounts of the Borrower maintained with the Lender; provided that
Revolving Loans made to finance the reimbursement of an LC Disbursement under any Letter
of Credit as provided in Section 2.3(e) shall be remitted by the Lender to the
Issuing Lender.
(c)......
Interest
on Revolving Loans
. Subject to Section 2.2 hereof, each Revolving Loan made to the
Borrower by Lender hereunder shall bear interest at a rate per annum equal to the Adjusted
Base Rate plus the Applicable Margin. Notwithstanding the foregoing, (i) all Revolving
Loans which are not paid when due shall automatically bear interest until paid in full at
the Post-Default Rate, (ii) during the period when any Event of Default of the type
described in clauses (g), (h) or (i) of Section 9.1 shall have occurred and be
continuing, the principal of all Revolving Loans hereunder shall automatically bear
interest, after as well as before judgment, at the Post-Default Rate, (iii) if there
shall occur and be continuing any Event of Default (other than an Event of Default of the
type described in clauses (g), (h) or (i) of Section 9.1), following written
notice delivered to the Borrower from the Lender, the principal of all Revolving Loans
hereunder shall bear interest, after as well as before judgment, at the Post-Default Rate
during the period beginning on the date such Event of Default first occurred, and ending
on the date such Event of Default is cured or waived. Accrued interest on each Revolving
Loan shall be payable in arrears on the first day of each month;
provided
that
interest accrued at the Post-Default Rate shall be payable on demand, and all accrued
interest on Revolving Loans shall be payable upon expiration of the Revolving Credit
Availability Period. All interest hereunder shall be computed on the basis of a year of
360 days, and in each case shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).
(d)......
Repayment
of Revolving Loans
. The Borrower unconditionally promises to pay to the Lender the
then unpaid principal amount of the Revolving Loans on the Revolving Credit Maturity Date.
In addition, if following any reduction in the Revolving Credit Commitment or at any other
time the Revolving Credit Exposure shall exceed the lesser of (i) the Revolving Credit
Commitment at such time, or (ii) the Borrowing Base at such time, the Borrower shall
first, repay Revolving Loans in an aggregate amount equal to such excess, and second,
provide cash collateral for Total LC Exposure as specified in Section 2.3(g) in an
aggregate amount equal to such excess.
(e)......
Loan
Account
. The Lender shall maintain in accordance with its usual practice an account
evidencing the indebtedness of the Borrower to the Lender resulting from each Revolving
Loan made by the Lender, including the amounts of principal and interest payable and paid
to the Lender from time to time hereunder. The entries made in the account maintained
pursuant to this subsection 2.1(e) shall be prima facie evidence of the existence and
amounts of the obligations recorded therein;
provided
that the failure of the
Lender to maintain such account or any error therein shall not in any manner affect the
obligation of the Borrower to repay the Revolving Loans in accordance with the terms of
this Agreement.
(f)......
Revolving
Credit Note
. Prior to the Closing Date, the Borrower shall prepare, execute and
deliver to the Lender the Amended and Restated Revolving Credit Note in the principal
amount of the Revolving Credit Commitment.
2.2 Eurodollar
Borrowings.
(a)......
General
.       
          Each Revolving Loan initially shall be a Base Rate Loan. Thereafter, the
          Borrower may elect to convert any portion of the outstanding Revolving Loans to
          a Eurodollar Borrowing. The Borrower may elect different options for
          continuations and conversions with respect to different portions of the affected
          Borrowing, in which case the Loans comprising each such portion shall be
          considered a separate Borrowing. The Borrower shall not be permitted to select
          any Eurodollar Interest Period for any Eurodollar Borrowing that ends after the
          Revolving Credit Maturity Date.
(b)......
Interest
on Eurodollar Borrowings
. Each Eurodollar Borrowing shall bear interest during the
applicable Eurodollar Interest Period at a rate per annum equal to the Eurodollar Rate
plus the Applicable Margin. Notwithstanding the foregoing, (i) all Eurodollar Borrowings
which are not paid when due shall automatically be converted into Base Rate Borrowings and
shall bear interest until paid in full at the Post-Default Rate, (ii) during the period
when any Event of Default of the type described in clauses (g), (h) or (i) of
Section 9.1 shall have occurred and be continuing, all Eurodollar Borrowings shall
automatically be converted into Base Rate Borrowings and shall bear interest, after as
well as before judgment, at the Post-Default Rate, (iii) if there shall occur and be
continuing any Event of Default (other than an Event of Default of the type described in
clauses (g), (h) or (i) of Section 9.1), following written notice delivered to
the Borrower from the Lender, all Eurodollar Borrowings shall automatically be converted
into Base Rate Borrowings and shall bear interest, after as well as before judgment, at
the Post-Default Rate during the period beginning on the date such Event of Default first
occurred, and ending on the date such Event of Default is cured or waived. Accrued
interest on each Eurodollar Borrowing shall be payable in arrears on the first day of each
month and on the last Business Day of the Eurodollar Interest Period applicable to such
Eurodollar Borrowing;
provided
that interest accrued at the Post-Default Rate shall
be payable on demand. All interest hereunder shall be computed on the basis of a year of
360 days, and in each case shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).
(c)......
Procedure
for Requesting Eurodollar Borrowings
. To request that any portion of the outstanding
Revolving Loans be converted into a Eurodollar Borrowing, or, to request that any
Eurodollar Borrowing continue as a Eurodollar Borrowing for an additional Eurodollar
Interest Period, the Borrower shall submit to the Lender a Eurodollar Request, in
substantially the form of
Exhibit B-4
hereto and setting forth all of the
information required to be set forth therein, by electronic mail or facsimile
transmission, not later than 1:00 p.m., Boston, Massachusetts time, three Business Days
before the date of the proposed conversion or continuation of such Borrowing. Each such
Eurodollar Request made by the Borrower shall be irrevocable. Subject to the provisions of
subsection 2.2(f) and provided that no Default or Event of Default shall have occurred and
be continuing, upon receipt of a Eurodollar Request, the Lender shall on the requested
date of conversion or continuation (i) convert the Base Rate Loan requested to be
converted into a Eurodollar Loan for the Eurodollar Interest Period set forth in such
Eurodollar Request and/or (ii) continue the Eurodollar Loan requested to be continued as a
Eurodollar Loan for the additional Eurodollar Interest Period set forth in such Eurodollar
Request.
(d)......
Incomplete
Eurodollar Requests
. If any Eurodollar Request is incomplete in any respect, then such
Eurodollar Request shall be void and the Borrowing which was the subject matter of such
Eurodollar Request shall continue as a Base Rate Borrowing. If, with respect to any
existing Eurodollar Borrowing, the Borrower fails to deliver a Eurodollar Request to
continue such Eurodollar Borrowing at least three Business Days prior to the expiration of
the Eurodollar Interest Period for such existing Eurodollar Borrowing, such Eurodollar
Borrowing shall automatically convert to a Base Rate Borrowing at the expiration of such
Eurodollar Interest Period.
(e)......
Limit
on Eurodollar Borrowings
. At the commencement of each Eurodollar Interest Period for a
Eurodollar Borrowing, such Borrowing shall be in an aggregate amount at least equal to
$500,000 or any greater multiple of $100,000. Borrowings of more than one Type may be
outstanding at the same time;
provided
that there shall not at any time be more
than a total of four (4) Eurodollar Borrowings outstanding.
(f)......
Alternate
Rate of Interest
. If prior to the commencement of any Eurodollar Interest Period for a
Eurodollar Borrowing, the Lender determines that (i) adequate and reasonable means do not
exist for ascertaining the Eurodollar Rate for such Eurodollar Interest Period, (ii) the
Eurodollar Rate for such Eurodollar Interest Period will not adequately and fairly reflect
the cost to the Lender of making or maintaining Eurodollar Borrowings, or (iii) as a
result of any Change in Law it is unlawful or impossible for the Lender to make or
maintain any Eurodollar Borrowing; then in each case the Lender shall give notice thereof
to the Borrower as promptly as practicable thereafter and, until the Lender notifies the
Borrower that the circumstances giving rise to such notice no longer exist, any Eurodollar
Request submitted by the Borrower shall be ineffective;
provided
that if as a
result of a Change in Law the Lender is prohibited from maintaining any outstanding
Eurodollar Borrowing, upon notice from the Lender, the Borrower shall immediately (A)
convert such Eurodollar Borrowing to a Base Rate Loan, or (B) repay such Eurodollar
Borrowing in full, together with all interest accrued thereon and all fees and other
amounts payable to the Lender hereunder (in either case, subject to the provisions of
subsection 2.2(g) of this Agreement with respect to redeployment costs).
(g)......
Break
Funding Payments
. In the event of (i) the payment of any principal of any Eurodollar
Loan other than on the last day of the Eurodollar Interest Period applicable thereto
(including as a result of an Event of Default), (ii) the conversion of any Eurodollar Loan
other than on the last day of the Eurodollar Interest Period applicable thereto, or (iii)
the failure to borrow, convert, continue or prepay any Eurodollar Loan on the date
specified in any notice delivered pursuant hereto (regardless of whether such notice is
permitted to be revocable and is revoked in accordance herewith), then, in any such event,
the Borrower shall compensate the Lender for the loss, cost and expense attributable to
such event, as determined by the Lender in a manner consistent with its customs and
practices. In the event that the Lender is entitled to receive compensation pursuant to
this subsection 2.2(g), the Lender shall deliver a certificate to the Borrower setting
forth the amount or amounts that the Lender is entitled to receive, which certificate
shall be deemed true and correct absent manifest error, and the Borrower shall pay such
amount or amounts within three (3) days after receipt of such certificate.
2.3 Letters of Credit.
(a)......
General
.       
          Subject to the terms and conditions set forth herein, in addition to the
          Revolving Loans provided for in Section 2.1, the Borrower may request the
          issuance of Letters of Credit for its own account by the Issuing Lender, in a
          form reasonably acceptable to the Issuing Lender, at any time and from time to
          time during the Revolving Credit Availability Period. Letters of Credit issued
          hereunder shall constitute utilization of the Revolving Credit Commitment. 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 Issuing Lender relating to any Letter of Credit, the
          terms and conditions of this Agreement shall control.
(b)......
Notice
of Issuance, Amendment, Renewal, Extension; Certain Conditions
. To request the
issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding
Letter of Credit), the Borrower shall deliver to the Issuing Lender and the Lender by
electronic or facsimile transmission (reasonably in advance of the requested date of
issuance, amendment, renewal or extension) a letter of credit application in the form
required by the Issuing Lender. A Letter of Credit shall be issued, amended, renewed or
extended only if (and upon issuance, amendment, renewal or extension of each Letter of
Credit, the Borrower shall be deemed to represent and warrant that), after giving effect
to such issuance, amendment, renewal or extension (i) the Total LC Exposure at such time
shall not exceed the LC Sublimit, and (ii) the Revolving Credit Exposure at such time
shall not exceed the lesser of (A) the Revolving Credit Commitment at such time, and (B)
the Borrowing Base at such time.
(c)......
Expiration
Date
. Each Letter of Credit shall expire (without giving effect to any extension
thereof by reason of an interruption of business) at or prior to the close of business on
the earlier of (i) the date 365 days, in the case of standby Letters of Credit, or 180
days, in the case of documentary Letters of Credit, after the date of the issuance of such
Letter of Credit (or, in the case of any renewal or extension thereof, 365 days or 180
days, as applicable, after such renewal or extension)
provided
that any such
standby Letter of Credit may provide for automatic extensions thereof to a date not later
than 365 days beyond its current expiration date, and (ii) the date that is five Business
Days prior to the Revolving Credit Maturity Date. No Letter of Credit may be extended
beyond the date that is five Business Days prior to the Revolving Credit Maturity Date.
(d)......
Reimbursement
.       
          If the Issuing Lender shall make any LC Disbursement in respect of a Letter of
          Credit, the Borrower shall reimburse (each, a "
Reimbursement
          Obligation
") the Issuing Lender in respect of such LC Disbursement by
          paying to the Lender for the account of the Issuing Bank an amount equal to such
          LC Disbursement not later than 1:00 p.m., Boston, Massachusetts time, on (i) the
          Business Day that the Borrower receives notice of such LC Disbursement, if such
          notice is received prior to 11:00 a.m., Boston, Massachusetts 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,
provided
that,
          subject to the conditions to borrowing set forth herein, payment of each such
          Reimbursement Obligation shall be made through the automatic funding of a Base
          Rate Borrowing in an amount equal to the amount of such Reimbursement
          Obligation, and the Borrower hereby irrevocably authorizes and directs the
          Lender to take such actions as may be necessary to effectuate such automatic
          funding of such Base Rate Borrowings. To the extent that any such Reimbursement
          Obligation is paid through the automatic funding of a Base Rate Borrowing, the
          Borrower's obligation to make such payment shall be discharged and replaced
          by the resulting Base Rate Borrowing. If the Borrower cannot satisfy the
          conditions to borrowing set forth herein such that the payment of any
          Reimbursement Obligation cannot be made through the automatic funding of a Base
          Rate Borrowing and the Borrower shall fail to make such payment when due, the
          Lender shall promptly pay to the Issuing Lender the unreimbursed portion of the
          LC Disbursement. Promptly following receipt by the Lender of any payment from
          the Borrower pursuant to this paragraph, the Lender shall distribute such
          payment to the Issuing Lender.
(e)......
Obligations
Absolute
. The Borrower's obligation to reimburse LC Disbursements as provided in
subsection 2.3(d) 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 Letter of
Credit, or any term or provision therein, (ii) any draft or other document presented under
a Letter of Credit 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 Issuing
Lender to the beneficiary under a Letter of Credit against presentation of a draft or
other document that does not comply strictly with the terms of such Letter of Credit and
(iv) any other event or circumstance whatsoever (other than gross negligence or willful
misconduct of the Issuing Lender), whether or not similar to any of the foregoing, that
might, but for the provisions of this Section 2.3, constitute a legal or equitable
discharge of the Borrower's obligations hereunder.
(f)......
Interim
Interest
. If the Issuing Lender shall make any LC Disbursement in respect of any
Letter of Credit, and if the Borrower cannot satisfy the conditions to borrowing set forth
herein such that payment of the Reimbursement Obligation resulting from such LC
Disbursement cannot be made through the automatic funding of a Base Rate Borrowing, 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 Base
Rate Loans;
provided
that, if the Borrower fails to reimburse such LC Disbursement
when due pursuant to subsection 2.3(d), then interest calculated at the Post-Default Rate
shall accrue on the unpaid amount thereof. Interest accrued pursuant to this paragraph
shall be for the account of the Issuing Lender, except that interest accrued on and after
the date of payment by the Lender pursuant to subsection 2.3(d) shall be for the account
of the Lender to the extent of the payment.
(g)......
Cash
Collateralization
. If either (i) an Event of Default shall occur and be continuing and
the Borrower receives notice from the Lender demanding the deposit of cash collateral
pursuant to this paragraph, or (ii) the Borrower shall be required to provide cash
collateral for Total LC Exposure pursuant to subsections  2.1(d) or 2.6(b), the
Borrower shall immediately deposit with the Lender an amount in cash equal to, in the case
of an Event of Default, the Total LC Exposure as of such date plus any accrued and unpaid
interest thereon and, in the case of any cash collateral required to be provided pursuant
to subsections 2.1(d) or 2.6(b), the amount required under subsections 2.1(d) or
2.6(b), as the case may be;
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 described in clause (g) or (h) of Section 9.1. Such deposit shall be
held by the Lender as collateral in the first instance for the Total LC Exposure under
this Agreement and thereafter for the payment of any other obligations of the Credit
Parties hereunder.
2.4      Expiration, Termination or Reduction of Revolving Credit Commitment.
(a)......
Expiration
of Revolving Credit Commitment
. Unless previously terminated, the Revolving Credit
Commitment shall expire at the close of business on the Revolving Credit Maturity Date.
(b)......
Reduction
of Revolving Credit Commitment
. The Borrower may at any time and from time to time
reduce the Revolving Credit Commitment;
provided
that (i) each reduction of the
Revolving Credit Commitment shall be in an amount that is at least equal to $500,000 or
any greater multiple of $100,000, and (ii) the Borrower shall not reduce the Revolving
Credit Commitment if, after giving effect to any concurrent repayment, the total Revolving
Credit Exposure would exceed the total Revolving Credit Commitment. The Borrower shall
notify the Lender of any election to reduce the Revolving Credit Commitment at least three
Business Days prior to the effective date of such reduction, specifying the effective date
thereof. Each notice of reduction of the Revolving Credit Commitment shall be irrevocable.
Each reduction of the Revolving Credit Commitment shall be permanent.
(c)......
Optional
Termination of Revolving Credit Commitment
. The Borrower shall have the right at any
time to terminate the Revolving Credit Commitment. The Borrower shall notify the Lender of
any election to terminate the Revolving Credit Commitment under this subsection 2.4(c) in
writing at least thirty (30) days prior to the effective date of such termination,
specifying the effective date thereof. Each notice of termination of the Revolving Credit
Commitment shall be irrevocable. Any termination of the Revolving Credit Commitment shall
be permanent.
2.5      Payments.
(a)......
Payments
Generally
. The Borrower shall be obligated to make each payment required to be made by
the Borrower hereunder (whether of principal, interest, fees or reimbursement of LC
Disbursements, or otherwise) to Lender at its offices in Boston, Massachusetts, prior to
3:00 p.m., Boston, Massachusetts time, on the date when due (except that if any payment
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, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension). All payments shall be
made in immediately available funds, in U.S. dollars without set-off or counterclaim. Any
amounts received after such time on any date may, in the discretion of the Lender, be
deemed to have been received on the next succeeding Business Day for purposes of
calculating interest thereon. Notwithstanding anything to the contrary set forth herein,
subject to the conditions to the funding of Revolving Loans set forth herein, all payments
of interest, fees and any other amounts due to be paid by the Borrower hereunder shall be
made through the automatic funding of Base Rate Revolving Loans in amounts equal to the
amounts of such interest, fees or other amounts due to be paid by the Borrower hereunder,
and the Borrower hereby irrevocably authorizes and directs the Lender to take such actions
as may be necessary to effectuate such automatic funding of Base Rate Revolving Loans,
and, upon funding of any such Base Rate Revolving Loan, the Borrower's obligation to
make such payment shall be discharged and replaced by the resulting Base Rate Revolving
Loan. The Borrower expressly acknowledges and agrees that (i) the Lender may, in its sole
discretion, effectuate the automatic funding of a Revolving Loan pursuant to this
subsection 2.5(a) even though at the time of, or after giving effect to, the funding of
such Revolving Loans the Revolving Credit Exposure exceeds the lesser of (x) the Revolving
Credit Commitment and (y) the Borrowing Base, and (ii) if any one or more of the
conditions to the funding of Revolving Loans cannot be satisfied and the Lender, in its
sole discretion, refuses to fund a Base Rate Revolving Loan in an amount sufficient to
satisfy the amount of any interest, fees or other amounts due hereunder, the Borrower
shall remain obligated to pay the full amount of such interest, fees or other amounts as
and when the same shall become due.
(b)......
Application
of Payments
. If at any time insufficient funds are received by and available to the
Lender to pay fully all amounts of principal, unreimbursed LC Disbursements, interest and
fees then due hereunder under any circumstances, including, without limitation during, or
as a result of the exercise by the Lender of remedies hereunder or under any other Loan
Document and applicable law, such funds shall be applied (i) first, to pay interest, fees,
costs and expenses then due hereunder, (ii) second, to pay principal and unreimbursed
LC Disbursements then due hereunder, and (iii) third, to any other Obligations then due
from the Credit Parties to the Lender, the Issuing Lender, the Cash Management Bank or any
other Affiliate of the Lender.
2.6 Prepayment of Loans.
(a)......
Optional
Prepayments of Loans
. The Borrower shall have the right at any time and from time to
time to prepay the Revolving Loans in whole or in part, subject to the payment of any
amounts due under subsection 2.2(g).
(b)......
Mandatory
Prepayments
. The Borrower shall be obligated to, and shall, make prepayments of the
Loans hereunder (and reduce the Revolving Credit Commitment hereunder) as follows:
(i)
Incurrence of Debt
. Without limiting the obligation of the Borrower to
          obtain the consent of the Lender to any incurrence of Indebtedness not otherwise
          permitted hereunder, the Borrower agrees, on the closing of any incurrence of
          Indebtedness by any Credit Party (other than Indebtedness permitted pursuant to
          Section 8.1) to prepay the Loans hereunder (and provide cash collateral for
          Total LC Exposure as specified in subsection 2.3(g)), and the Revolving
          Credit Commitment hereunder shall be subject to automatic reduction, upon the
          date of such incurrence of Indebtedness, in an aggregate amount equal to 100% of
          the amount of the Net Cash Payments from such incurrence of Indebtedness
          received by any Credit Party, such prepayment and reduction to be effected in
          each case in the manner and to the extent specified in subsection 2.6(c)
          below.
(ii)
Sale or Offering of Securities
. Unless otherwise agreed to in advance in
          writing by the Lender, the Borrower agrees on the closing of any offering or
          sale of equity securities by any Credit Party, to prepay the Loans hereunder
          (and provide cash collateral for Total LC Exposure as specified in subsection
          2.3(g)), upon the date of such sale or offering of securities, in an aggregate
          amount equal to 100% of the amount of Net Cash Payments from such offering of
          securities received by any such Credit Party such prepayment to be effected in
          each case in the manner and to the extent specified in subsection 2.6(c)
          below. Notwithstanding the foregoing, this section shall not apply to equity
          offerings (x) in connection with employee stock purchase plans and stock option
          plans of the Borrower or (y) in an amount with a total aggregate value of less
          than $50,000,000.00.
(iii)
Sale of Assets
. Without limiting the obligation of the Borrower to obtain
          the consent of the Lender to any Disposition not otherwise permitted hereunder,
          the Borrower agrees, on the date of any Disposition by any Credit Party, to
          prepay the Loans hereunder (and provide cash collateral for Total LC Exposure as
          specified in subsection 2.3(g)), and the Revolving Credit Commitment
          hereunder shall be subject to automatic reduction, upon the date of such
          Disposition, in an aggregate amount equal to 100% of the amount of such Net Cash
          Payments from such Disposition received by the Borrower on the date of such
          Disposition, such payment and reduction to be effected in each case and in the
          manner and to the extent specified in subsection 2.6(c) below. Notwithstanding
          the forgoing, the Borrower shall not be required to make any prepayment of the
          Loans under this subsection 2.7(b)(iii) with respect to the first $500,000 of
          aggregate Net Cash Payments received by the Credit Parties from Dispositions
          after the Effective Time to the extent 100% of such Net Cash Payments are
          utilized (as evidenced by a binding contractual agreement) to replace the assets
          disposed of by the Credit Parties in the Disposition within 90 days of each such
          Disposition.
(iv)
Proceeds of Casualty Events
. Upon the receipt by the Lender or the Credit
          Parties of the proceeds of insurance, condemnation award or other compensation
          in respect of any Casualty Event affecting any property of the Credit Parties,
          the Borrower shall prepay the Loans (and provide cash collateral for Total LC
          Exposure as specified in subsection 2.4(g)), and the Revolving Credit
          Commitment shall be subject to automatic reduction, in an aggregate amount equal
          to 100% of the Net Cash Payments from such Casualty Event, such prepayment and
          reduction to be effected in each case in the manner and to the extent specified
          in subsection 2.7(c) below;
provided
that if there shall occur a Casualty
          Event and the aggregate market value of all property affected by such Casualty
          Event shall be less than $500,000, and if, at the time proceeds of insurance in
          respect of such Casualty Event are received, no Event of Default shall have
          occurred and be continuing, the Borrower shall be entitled to utilize such
          insurance proceeds (in an amount not in excess of $500,000) to repair or replace
          the property affected by such Casualty Event within 90 days (it being understood
          that if proceeds of insurance intended to be applied to repair or replace
          property are not in fact applied within 90 days after receipt thereof, then such
          proceeds shall be applied to the prepayment of Loans, cover for Total LC
          Exposure and reduction of the Revolving Credit Commitment as provided in this
          clause (iv) at the expiration of such 90 day period).
(c)
Application
. In the event of any mandatory prepayment of Loans pursuant
          to subsections (b)(i), (b)(ii), (b)(iii) and (b)(iv) of this Section 2.6,
          the proceeds shall be applied as follows:
(i)       
               first, to the extent that Revolving Credit Exposure shall at such time exceed
               the lesser of (A) the Revolving Credit Commitment at such time or (B) the
               Borrowing Base at such time, such prepayment shall be applied to the repayment
               of Revolving Loans;
(ii)       
               second, the amount of any mandatory prepayment shall be applied to repay
               Revolving Loans, and, second, to provide cash collateral for Total LC Exposure
               as specified in Section 2.3(g), with a corresponding permanent reduction in
               the Revolving Credit Commitment (except that no such corresponding permanent
               reduction in the total Revolving Credit Commitment shall be required in
               connection with any prepayment pursuant to subsection 2.6(b)(ii) above).
(d)
Notification of Certain Prepayments
. The Borrower shall notify the Lender
          by telephone (confirmed by telecopy) of any voluntary prepayment of any
          Eurodollar Loan not later than 1:00 p.m., Boston, Massachusetts time, three
          Business Days before the date of such prepayment. The Borrower shall notify the
          Lender of any mandatory prepayment of the Loans pursuant to subsection 2.6(b)
          hereunder as soon as practicable. Each such notice shall be irrevocable and
          shall specify the prepayment date and the principal amount of each Borrowing or
          portion thereof to be prepaid.
(e)
Prepayments Accompanied by Interest
. All prepayments of the Loan shall be
          accompanied by accrued interest through the date of prepayment.
2.7      Fees.
(a)
Unused Fee
. The Borrower shall pay to the Lender unused fees in respect
          of the Revolving Credit Commitment, in an aggregate amount equal to the product
          of (x) the Applicable Unused Fee Rate,
multiplied by
(y) the daily
          average unused amounts of the Revolving Credit Commitment during the period from
          and including the date on which the Effective Time shall occur to but excluding
          the date on which the Revolving Credit Commitment terminates. Accrued unused
          fees shall be payable monthly in arrears on the first day of each month and on
          the date on which the Revolving Credit Commitment terminates. All unused 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)
Letter of Credit Fees
. The Borrower shall pay with respect to Letters of
          Credit issued hereunder the following fees:
(i)
with respect to each standby or documentary Letter of Credit issued hereunder, a
          fee to the Lender which shall accrue at a rate per annum equal to (x) 2.00%
multiplied by
(y) the average daily amount of outstanding Letters of
          Credit during the period from and including the Closing Date to but excluding
          the date on which there shall no longer be any Letters of Credit outstanding
          hereunder, and
(ii)
with respect to each documentary or standby Letter of Credit issued hereunder,
          the Issuing Lender's standard fees with respect to the issuance, amendment,
          renewal or extension of any Letter of Credit or processing of drawings
          thereunder.
Accrued fees for Letters of Credit
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), and shall be
payable monthly in arrears on the first day of each month and on the date the Revolving
Credit Commitment terminates, commencing on the first such date to occur after the date
hereof,
provided
that any such fees accruing after the date on which the Revolving
Credit Commitment terminates shall be payable on demand.
2.8 Increased Costs.
(a)       
          If any Change in Law shall:
(i)
impose, modify or deem applicable any reserve, special deposit or similar
          requirement against assets of, deposits with or for the account of, or credit
          extended by, the Lender or the Issuing Lender; or
(ii)
impose on the Lender or the Issuing Lender or the London interbank market any
          other condition affecting this Agreement or Eurodollar Loans made by the Lender
          or any Letter of Credit;
and the result of any of the
foregoing shall be to increase the cost to the Lender of making or maintaining any
Eurodollar Loan (or of maintaining its obligation to make any such Loan) or to increase
the cost to the Issuing Lender of issuing or maintaining any Letter of Credit or to reduce
the amount of any sum received or receivable by the Lender or the Issuing Lender hereunder
(whether of principal, interest or otherwise), then the Borrower will pay to the Lender or
the Issuing Lender, as the case may be, such additional amount or amounts as will
compensate the Lender or the Issuing Lender, as the case may be, for such additional costs
incurred or reduction suffered.
(b)       
          If the Lender or the Issuing Lender reasonably determines that any Change in Law
          regarding capital requirements has or would have the effect of reducing the rate
          of return on the Lender's or the Issuing Lender's capital or on the
          capital of the Lender's or the Issuing Lender's holding company, if
          any, as a consequence of this Agreement or the Loans made by the Lender, or the
          Letters of Credit issued by the Issuing Lender, to a level below that which the
          Lender or the Issuing Lender or the Lender's or the Issuing Lender's
          holding company could have achieved but for such Change in Law (taking into
          consideration the Lender's or the Issuing Lender's policies and the
          policies of the Lender's or the Issuing Lender's holding company with
          respect to capital adequacy), then from time to time the Borrower will pay to
          the Lender or the Issuing Lender, as the case may be, such additional amount or
          amounts as will compensate the Lender or the Issuing Lender, or the
          Lender's or the Issuing Lender's holding company, for any such
          reduction suffered.
(c)       
          A certificate of the Lender or the Issuing Lender setting forth the amount or
          amounts necessary to compensate the Lender or the Issuing Lender or its holding
          company, as the case may be, as specified in subsections 2.8(a) or 2.8(b) above
          shall be delivered to the Borrower and shall be conclusive so long as it
          reflects a reasonable basis for the calculation of the amounts set forth therein
          and does not contain any manifest error. The Borrower shall pay the Lender or
          the Issuing Lender the amount shown as due on any such certificate within 10
          days after receipt thereof.
(d)       
          Failure or delay on the part of the Lender or the Issuing Lender to demand
          compensation pursuant to this Section 2.8 shall not constitute a waiver of
          the Lender's or the Issuing Lender's right to demand such
          compensation;
provided
that the Borrower shall not be required to
          compensate the Lender or the Issuing Lender pursuant to this Section 2.8
          for any increased costs or reductions incurred more than six months prior to the
          date that Lender or the Issuing Lender, as the case may be, notifies the
          Borrower of the Change in Law giving rise to such increased costs or reductions
          and of Lender's or the Issuing Lender's intention to claim
          compensation therefor;
provided
further
that, if the Change in Law
          giving rise to such increased costs or reductions is (i) retroactive and (ii)
          occurred within such six-month period, then the six-month period referred to
          above may be extended to include the period of retroactive effect thereof, but
          in no event any period prior to the Closing Date.
2.9      Taxes.
(a)       
          Any and all payments by or on account of any Obligations of the Borrower
          hereunder shall be made free and clear of and without deduction for any
          Indemnified Taxes or Other Taxes;
provided
that if the Borrower shall be
          required to deduct any Indemnified Taxes or Other Taxes from such payments, then
          (i) the sum payable shall be increased as necessary so that after making all
          required deductions (including deductions applicable to additional sums payable
          under this Section 2.10) the Lender or the Issuing Lender (as the case may
          be) receives 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 Governmental
          Authority in accordance with applicable law.
(b)       
          In addition, the Borrower shall pay all Other Taxes to the relevant Governmental
          Authority in accordance with applicable law.
(c)       
          The Borrower shall indemnify the Lender and the Issuing Lender, within 10 days
          after written demand therefor, for the full amount of any Indemnified Taxes or
          Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on
          or attributable to amounts payable under this Section 2.9) paid by the
          Lender or the Issuing Lender, as the case may be (and any penalties, interest
          and reasonable expenses arising therefrom or with respect thereto during the
          period prior to the Borrower making the payment demanded under this paragraph
          (c)), whether or not such Indemnified Taxes or Other Taxes were correctly or
          legally imposed or asserted by the relevant Governmental Authority. A
          certificate as to the amount of such payment or liability delivered to the
          Borrower by the Lender or the Issuing Lender, shall be conclusive absent
          manifest error.
(d)       
          As soon as practicable after any payment of Indemnified Taxes or Other Taxes by
          the Borrower to a Governmental Authority, the Borrower shall deliver to the
          Lender the original or a certified copy of a receipt issued by such Governmental
          Authority evidencing such payment, a copy of the return reporting such payment
          or other evidence of such payment reasonably satisfactory to the Lender.
ARTICLE 3
Intentionally omitted
ARTICLE 4
The Collateral
4.1
Grant of Security Interest.
As security for due and punctual payment and performance of the Obligations, each
Credit Party hereby grants to the Lender (for the ratable benefit of the Lender, the
Issuing Lender and the Cash Management Bank) a continuing security interest in and lien on
all tangible and intangible property and assets of such Credit Party, whether now owned or
existing or hereafter acquired or arising, wherever located, together with any and all
additions thereto and replacements therefor and proceeds and products thereof
(collectively referred to for purposes of this Article 4 as
"
Collateral
"), including without limitation the property described below:
(a)       
          all tangible personal property, including without limitation all present and
          future goods, inventory (including, without limitation, all merchandise, raw
          materials, work in process, finished goods and supplies), machinery, equipment,
          motor vehicles, rolling stock, tools, furniture, fixtures, office supplies,
          computers, computer software and associated equipment, whether now owned or
          hereafter acquired, including, without limitation, all tangible personal
          property used in the operation of the business of such Credit Party;
(b)       
          all rights under all present and future authorizations, permits, licenses and
          franchises issued, granted or licensed to such Credit Party for the operation of
          its business;
(c)       
          all Patents of such Credit Party;
(d)       
          all Trademarks of such Credit Party;
(e)       
          all Copyrights of such Credit Party;
(f)       
          the entire goodwill of business of such Credit Party and all other general
          intangibles (including know-how, trade secrets, customer lists, proprietary
          information, inventions, domain names, methods, procedures and formulae)
          connected with the use of and symbolized by any Patents, Trademarks or
          Copyrights of such Credit Party;
(g)       
          all rights under all present and future vendor or customer contracts and all
          franchise, distribution, design, consulting, construction, engineering,
          management and advertising and related agreements;
(h)       
          all rights under all present and future leases of real and personal property;
          and
all other personal property,
including, without limitation, all present and future accounts, accounts receivable, cash,
cash equivalents, deposits, deposit accounts, loss carry back, tax refunds, insurance
claims and proceeds, premiums, rebates and refunds, choses in action, investment property,
securities, partnership interests, limited liability company interests, contracts,
contract rights, rights to payments of money, general intangibles (including without
limitation, payment intangibles, all customer and advertiser mailing lists, intellectual
property, patents, copyrights, trademarks, trade secrets, trade names, domain names,
goodwill, customer lists, advertiser lists, catalogs and other printed materials,
publications, indexes, lists, data and other documents and papers relating thereto,
blueprints, designs, charts, and research and development, whether on paper, recorded
electronically or otherwise), commercial tort claims, all websites (including without
limitation, all content, HTML documents, audiovisual material, software, data, hardware,
access lines, connections, copyrights, trademarks, patents, and trade secrets relating to
such websites) and domain names, any information stored on any medium, including
electronic medium, related to any of the personal property of such Credit Party, all
financial books and records and other books and records relating, in any manner, to the
business of such Credit Party, all proposals and cost estimates and rights to performance,
all instruments and promissory notes, documents and chattel paper, and all debts,
obligations and liabilities in whatever form owing to such Credit Party from any person,
firm or corporation or any other legal entity, whether now existing or hereafter arising,
now or hereafter received by or belonging or owing to such Credit Party; and all
guaranties and security therefor, and all letters of credit and other supporting
obligations in respect of such debts, obligations and liabilities.
Any of the foregoing terms which are
defined in the Uniform Commercial Code shall have the meaning provided in the Uniform
Commercial Code, as amended and in effect from time to time, as supplemented and expanded
by the foregoing.
4.2      Special Warranties and Covenants of the Credit Parties.  Each Credit Party hereby warrants and covenants to the Lender that:
(a)       
          Such Credit Party has delivered to the Lender a Perfection Certificate in
          substantially the form of
Exhibit C
hereto. All information set forth in
          such Perfection Certificate is true and correct in all material respects and the
          facts contained in such Perfection Certificate are accurate in all material
          respects as of the date of this Agreement. Each Credit Party agrees to
          supplement its Perfection Certificate promptly after obtaining information which
          would require a correction or addition to such Perfection Certificate.
(b)       
          No Credit Party will change its jurisdiction of organization, type of
          organization, or other legal structure, principal or any other place of
          business, including its chief executive office, its mailing address, or the
          location of any Collateral from the locations set forth in the Perfection
          Certificate delivered by such Credit Party, or make any change in its name, its
          organizational identification number if it has one, or if such Credit Party does
          not have an organizational identification number and later obtains one, such
          Credit Party will notify the Lender of such organizational identification
          number, or conduct its business operations under any fictitious business name or
          trade name, without, in any such case, at least thirty (30) days' prior
          written notice to the Lender; provided that the inventory of such Credit Party
          may be in the possession of manufacturers or processors in any jurisdiction in
          which all necessary UCC financing statements have been filed by the Lender and
          with respect to which the Lender has received waiver letters from all landlords,
          warehousemen and processors in form and substance acceptable to Lender.
(c)       
          Except for Collateral that is obsolete or no longer used in their business, the
          Credit Parties will keep the Collateral in good order and repair (normal wear
          excepted) and adequately insured at all times in accordance with the provisions
          of Section 7.5. The Credit Parties will pay promptly when due all taxes and
          assessments on the Collateral or for its use or operation, except for taxes and
          assessments permitted to be contested as provided in Section 7.4. Following the
          occurrence and during the continuance of an Event of Default, the Lender may at
          its option discharge any taxes or Liens to which any Collateral is at any time
          subject (other than Permitted Liens), and may, upon the failure of the Credit
          Parties to do so in accordance with this Agreement, purchase insurance on any
          Collateral and pay for the repair, maintenance or preservation thereof, and each
          Credit Party agrees to reimburse the Lender on demand for any payments or
          expenses incurred by the Lender pursuant to the foregoing authorization and any
          unreimbursed amounts shall constitute Obligations for all purposes hereof.
(d)       
          The Lender may from time to time request and each Credit Party shall deliver
          copies of all customer lists and vendor lists.
(e)       
          To the extent, if any, that such Credit Party's signature is required
          therefor, each Credit Party will promptly execute and deliver to the Lender such
          financing statements and amendments thereto, certificates and other documents or
          instruments as may be necessary to enable the Lender to perfect or from time to
          time renew the security interest granted hereby, including, without limitation,
          such financing statements and amendments thereto, certificates and other
          documents as may be necessary to perfect a security interest in any additional
          Collateral hereafter acquired by such Credit Party or in any replacements or
          proceeds thereof. Each Credit Party authorizes and appoints the Lender, in case
          of need, to execute such financing statements, certificates and other documents
          pertaining to the Lender's security interest in the Collateral in its stead
          if such Credit Party's signature is required therefor and such Credit Party
          fails to so execute such documents, with full power of substitution, as such
          Debtor's attorney in fact.
(f)       
          Each Credit Party hereby irrevocably authorizes the Lender, at any time and from
          time to time, to file in any jurisdiction financing statements and amendments
          thereto that (i) indicate the Collateral (x) as all assets of such Credit Party
          or words of similar effect (excepting Patents, Trademarks and Copyrights until
          such time as an Event of Default shall occur hereunder, at which time the Lender
          shall be authorized to file financing statements indicating the Collateral as
          all assets of such Credit Party or words of similar effect), regardless of
          whether any particular asset falls within the scope of Article 9 of the Uniform
          Commercial Code of the Commonwealth of Massachusetts or such jurisdiction or (y)
          as being of an equal or lesser scope or with greater detail and (ii) which
          contain any other information required by Article 9 of the Uniform Commercial
          Code (including Part 5 thereof) for the sufficiency or filing office acceptance
          of any financing statement or amendment, including whether (A) any Credit Party
          is an organization, the type of organization and any organization identification
          number issued to such Credit Party and (B) in the case of a financing statement
          filed as a fixture filing or indicating Collateral as as-extracted collateral or
          timber to be cut, a sufficient description of the real property to which the
          Collateral relates. The Credit Parties agree to furnish any such information to
          the Lender promptly upon request. Each Credit Party also ratifies its
          authorization for the Lender to have filed in any Uniform Commercial Code
          jurisdiction any like initial financing statements or amendments thereto if
          filed prior to the date hereof.
(g)       
          Notwithstanding anything to the contrary contained herein, the Lender agrees not
          to perfect its security interest in the Patents, Trademarks and Copyrights until
          such time as an Event of Default shall occur hereunder. At any time after an
          Event of Default has occurred, at which time the Negative Pledge Agreements
          shall be deemed to have terminated, each Credit Party agrees that it will join
          with the Lender in executing and, at its own expense, will file and refile, or
          permit the Lender to file and refile such other documents (including, without
          limitation, amendments to the UCC Financing Statements, this Agreement and
          licenses to use software and other property protected by copyright), in such
          offices (including, without limitation, the PTO, the United States Copyright
          Office, appropriate state patent, trademark and copyright offices and
          appropriate UCC filing offices), as the Lender may reasonably deem necessary or
          appropriate, wherever required or permitted by law in order to perfect and
          preserve the rights and interests granted to the Lender in Patents, Trademarks
          and Copyrights hereunder. Each Credit Party will give the Lender notice of each
          office at which records of such Credit Party pertaining to all intangible items
          of Collateral are kept. Except as may be provided in such notice, the records
          concerning all intangible Collateral are and will be kept at the address shown
          in the respective Perfection Certificate for such Credit Party as the principal
          place of business of such Credit Party.
(h)       
          The Credit Parties are the sole and exclusive owners of the websites and domain
          names listed on
Schedule 4.2
hereto and have registered such domain names
          with the applicable authority for registration of the same which provides for
          the exclusive use by the Credit Parties of such domain names. The websites do
          not contain any material, the publication of which may result in (a) the
          violation of rights of any person or (b) a right of any person against the
          publisher or distributor of such material.
(i)       
          The Credit Parties shall, annually by the end of the first calendar quarter
          following the previous calendar year, provide written notice to the Lender of
          all applications for registration of Patents, Trademarks or Copyrights, to the
          extent such applications exist, made during the preceding calendar year. The
          Credit Parties shall file and prosecute to the extent deemed reasonably
          appropriate by the Credit Parties all applications for registration of Patents,
          Trademarks or Copyrights now or hereafter pending that, in their reasonable
          discretion, would be necessary to the business of the Credit Parties to which
          any such applications pertain, and to do all acts, in any such instance,
          reasonably necessary to preserve and maintain all rights in such registered
          Patents, Trademarks or Copyrights unless such Patents, Trademarks or Copyrights
          are not material to the business of the Credit Parties, as reasonably determined
          by the Credit Parties consistent with prudent and commercially reasonable
          business practices. Any and all costs and expenses incurred in connection with
          any such actions shall be borne by the Credit Parties. All such Patents,
          Trademarks and Copyrights shall become subject to the terms and provisions of
          the Negative Pledge Agreements. Except in accordance with prudent and
          commercially reasonable business practices, the Credit Parties shall not abandon
          any right to file a Patent, Trademark or Copyright application or any pending
          Patent, Trademark or Copyright application or any registered Patent, Trademark
          or Copyright, in each case material to its business, without the consent of the
          Lender.
(j)       
          The domain name servers used in connection with the domain names of the Credit
          Parties and all other relevant information pertaining to such domain names, and
          the administrative contacts used in connection with the registration of such
          domain names are identified on
Schedule 4.2
hereof. No Credit Party will
          change such domain name servers without 10 days' prior notice to the
          Lender. No Credit Party will cause a change in the identity of any domain name
          administrative contact without 10 days' prior notice to the Lender.
(k)       
          If any Credit Party is, now or at any time hereafter, a beneficiary under a
          letter of credit now or hereafter, such Credit Party will promptly notify the
          Lender thereof and, at the request and option of the Lender, such Credit Party
          shall, pursuant to an agreement in form and substance satisfactory to the
          Lender, either (i) arrange for the issuer and any confirmer or other nominated
          person of such letter of credit to consent to an assignment to the Lender of the
          proceeds of the letter of credit or (ii) arrange for the Lender to become the
          transferee beneficiary of the letter of credit, with the Lender agreeing, in
          each case, that the proceeds of the letter of credit are to be applied by the
          Lender against the Obligations as provided in this Agreement.
(l)       
          To the extent any Credit Party shall, now or at any time hereafter, hold or
          acquire any promissory note or other instrument or tangible chattel paper, such
          Credit Party will promptly notify the Lender thereof and, at the request and
          option of the Lender, such Debtor will deliver such promissory note or other
          instrument or tangible chattel paper to the Lender to be held as Collateral
          hereunder, together with an endorsement thereof reasonably satisfactory in form
          and substance to the Lender.
(m)       
          If, now or at any time hereafter, any Credit Party shall obtain or hold any
          investment property or electronic chattel paper, such Credit Party will promptly
          notify the Lender thereof and, at the request and option of the Lender, such
          Credit Party will take or cause to be taken such steps as the Lender may
          reasonably request for the Lender to obtain "control" (as provided in
          Sections 9-105 and 9-106 of the Uniform Commercial Code of the Commonwealth of
          Massachusetts, as amended and in effect from time to time) of such Collateral.
(n)       
          No Credit Party holds any commercial tort claims, as defined in Article 9 of the
          Uniform Commercial Code, except as indicated in the Perfection Certificate
          attached hereto as
Exhibit C
. If any of Credit Parties shall at any time
          acquire a commercial tort claim, such Credit Party shall immediately notify the
          Lender in a writing signed by such Credit Party of the brief details thereof and
          grant to the Lender 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 Lender.
(o)       
          If any Credit Party has accounts receivable in respect of which the account
          debtor is located in Minnesota, the Credit Parties represent and warrant that
          the applicable Credit Party has filed and shall file all legally-required Notice
          of Business Activities Reports and comparable reports with the appropriate
          government authorities.
(p)       
          The Borrower shall, at the request and option of the Lender, and if there shall
          be any Loans outstanding under this Agreement, notify account debtors and other
          persons obligated on any of the Collateral of the security interest of the
          Lender in any account, chattel paper, general intangible, instrument or other
          Collateral and that payment thereof is to be made directly to the Lender or to
          any financial institution designated by the Lender as the Lender's agent
          therefore. The Lender may itself, if a Default or an Event of Default shall have
          occurred and be continuing, without notice to or demand upon the Borrower, so
          notify account debtors and other persons obligated on Collateral. After the
          making of such a request or the giving of any such notification, the Borrower
          shall hold any proceeds of collection of accounts, chattel paper, general
          intangibles, instruments and other Collateral received by the Borrower as
          trustee for the Lender without commingling the same with other funds of the
          Borrower and shall turn the same over to the Lender in the identical form
          received, together with any necessary endorsements or assignments. The Lender
          shall apply the proceeds of collection of accounts, chattel paper, general
          intangibles, instruments and other Collateral received by the Lender to the
          Obligations, such proceeds to be immediately credited after final payment in
          cash or other immediately available funds of the items giving rise to them.
(q)       
          The Credit Parties further agree, upon request of the Lender and at the
          Lender's option, to take any and all other actions as the Lender may
          reasonably request with respect to the attachment, perfection and First Priority
          (subject to Permitted Liens) of, and the ability of the Lender to enforce, the
          Lender's security interest in any and all of the Collateral.
4.3 Collection of
Proceeds of Accounts Receivable.
(a)       
          On or before the Closing Date, the Credit Parties shall (i) establish accounts,
          including, without limitation, the Blocked Account (as defined in the Dominion
          Account Agreement) (each a "Controlled Account " and collectively the
          "Controlled Accounts") in the Lender's name for the benefit of
          the Borrower with the Cash Management Bank, into which the Credit Parties will
          immediately deposit all payments made for inventory or services sold or rendered
          by the Credit Parties and received by the Credit Parties in the identical form
          in which such payments were made, whether by cash or check, (ii) direct all of
          their account debtors to make all payments on accounts receivable of the Credit
          Parties directly to the Controlled Account under the control of the Cash
          Management Bank, and (iii) cause each Subsidiary and Affiliate, and any other
          Person acting for or in concert with the Credit Parties that receives any
          monies, checks, notes, drafts or other payments relating to or as proceeds of
          accounts receivable or other Collateral, to receive and hold such items in trust
          for, and as the sole and exclusive property of, the Lender and, immediately upon
          receipt thereof, shall remit the same (or cause the same to be remitted) in hand
          to the Controlled Accounts;
provided
that, for purposes of administrative
          convenience, the Lender may in its reasonable discretion, permit the Credit
          Parties from time to time to maintain one or more accounts with one or more
          financial institutions other than the Cash Management Bank and with such maximum
          cash balances as the Lender deems appropriate, and for which the Credit Parties
          may, at the discretion of the Lender, be permitted to have direct access.
(b)       
          Each Credit Party acknowledges that the Cash Management Bank is an affiliate of
          the Lender and that the Cash Management Bank and the Lender are parties to cash
          management agreements that confirm that the Lender has dominion and control over
          all accounts of the Credit Parties or the Lender maintained by the Cash
          Management Bank, and all funds from time to time held in such accounts. The
          Borrower, the Lender and the Cash Management Bank hereby agree that the Cash
          Management Bank shall comply with any instructions originated by the Lender
          directing disposition of funds in such accounts without further consent of the
          Borrower. Each Credit Party agrees to enter into such Control Agreements with
          the Cash Management Bank and the Lender as the Lender may reasonably request.
          Each Credit Party also agrees to cause each financial institution other than the
          Cash Management Bank with which a Controlled Account has been established to,
          enter into a Control Agreement confirming that the amounts on deposit in such
          Controlled Account are the property of and are under the control of the Lender,
          that such financial institution has no right to setoff against such Controlled
          Account or against any other account maintained by such financial institution
          into which the contents of such Controlled Account are transferred, and that
          upon written notice from the Lender, such financial institution shall wire, or
          otherwise transfer in immediately available funds in a manner satisfactory to
          the Lender, funds deposited in the Controlled Account on a daily basis as such
          funds are collected.
(c)       
          The Credit Parties agree to pay all reasonable fees, costs and expenses which
          the Credit Parties incur in connection with opening and maintaining a Controlled
          Account. All of such fees, costs and expenses which remain unpaid pursuant to
          any Controlled Account or Control Agreement with the Credit Parties, to the
          extent same shall have been paid by the Lender hereunder, shall constitute Loans
          hereunder, shall be payable to the Lender by the Credit Parties upon demand,
          and, until paid, shall bear interest at the highest rate then applicable to
          Loans hereunder. All checks, drafts, instruments and other items of payment or
          proceeds of Collateral delivered to the Lender or the Cash Management Bank in
          kind shall be endorsed by the Credit Parties, to the Lender, and, if that
          endorsement of any such item shall not be made for any reason, the Lender and
          the Cash Management Bank are each hereby irrevocably authorized to endorse the
          same on behalf of the Credit Parties. For the purpose of this subsection 4.3(c),
          each Credit Party irrevocably hereby makes, constitutes and appoints the Lender
          (and all Persons designated by the Lender for that purpose, including, without
          limitation, the Cash Management Bank) as such Credit Party's true and
          lawful attorney and agent-in-fact (i) to endorse the name of the such Credit
          Party upon said items of payment and/or proceeds of Collateral of the Credit
          Parties and upon any chattel paper, document, instrument, invoice or similar
          document or agreement relating to any account receivable of the Credit Parties
          or goods pertaining thereto; (ii) to take control in any manner of any item of
          payment or proceeds thereof; (iii) to have access to any lock box or postal box
          into which any mail of the Credit Parties is deposited; and (iv) open and
          process all mail addressed to the Credit Parties and deposited therein.
(d)       
          The Lender (and all Persons designated by the Lender for such purpose,
          including, without limitation, the Cash Management Bank) may, at any time and
          from time to time after the occurrence and during the continuance of an Event of
          Default, whether before or after notification to any account debtor and whether
          before or after the maturity of any of the Obligations,
(i) enforce
          collection of any accounts receivable or contract rights of the Credit Parties
          by suit or otherwise; (ii) exercise all of the rights and remedies of the Credit
          Parties with respect to proceedings brought to collect any accounts receivable;
          (iii) surrender, release or exchange all or any part of any accounts receivable
          of the Credit Parties, or compromise or extend or renew for any period (whether
          or not longer than the original period) any indebtedness thereunder; (iv) sell
          or assign any account receivable of the Credit Parties upon such terms, for such
          amount and at such time or times as the Lender deems advisable;
(v)
          prepare, file and sign the names of the Credit Parties on any proof of claim in
          bankruptcy or other similar document against any account debtor indebted on an
          account receivable of the Credit Parties; and (vi) do all other acts and things
          which are necessary, in the Lender's sole discretion, to fulfill the
          Obligations of the Credit Parties under this Agreement and to allow the Lender
          to collect the accounts receivable. In addition to any other provision hereof or
          in any of the other Loan Documents, the Lender may at any time on or after the
          occurrence of an Event of Default, at the sole expense of the Credit Parties,
          notify any parties obligated on any of the accounts receivable of the Credit
          Parties to make payment directly to the Lender of any amounts due or to become
          due thereunder.
4.4
Fixtures, etc.
It is the
intention of the parties hereto that (except for Collateral located on any Mortgaged
Property) none of the Collateral shall become fixtures and each Credit Party will take all
such reasonable action or actions as may be necessary to prevent any of the Collateral
from becoming fixtures. Without limiting the generality of the foregoing, each Credit
Party will, if requested by the Lender, use commercially reasonable efforts to obtain
waivers of Liens, in form satisfactory to the Lender, from each lessor of real property on
which any of the Collateral is or is to be located to the extent requested by the Lender.
4.5
Right of Lender to Dispose of
Collateral, etc.
Upon the occurrence of any Event of Default, such Event of Default
not having previously been waived, remedied or cured, but subject to the provisions of the
Uniform Commercial Code or other applicable law, in addition to all other rights under
applicable law and under the Loan Documents, the Lender shall have the right to take
possession of the Collateral and, in addition thereto, the right to enter upon any
premises on which the Collateral or any part thereof may be situated and remove the same
therefrom. The Lender may require the Credit Parties to make the Collateral (to the extent
the same is moveable) available to the Lender at a place to be designated by the Lender or
transfer any information related to the Collateral to the Lender by electronic medium.
Unless the Collateral is perishable or threatens to decline speedily in value or is of a
type customarily sold on a recognized market, the Lender will give the Credit Parties at
least ten (10) days' prior written notice of the time and place of any public sale
thereof or of the time after which any private sale or any other intended disposition
thereof is to be made. Any such notice shall be deemed to meet any requirement hereunder
or under any applicable law (including the Uniform Commercial Code) that reasonable
notification be given of the time and place of such sale or other disposition.
4.6
Right of Lender to Use and
Operate Collateral, etc.
Upon the occurrence and during the continuance of any Event
of Default, subject to the provisions of the Uniform Commercial Code or other applicable
law, the Lender shall have the right and power (a) to take possession of all or any part
of the Collateral, and to exclude the Credit Parties and all persons claiming under the
Credit Parties wholly or partly therefrom, and thereafter to hold, store, and/or use,
operate, manage and control the same, and (b) to grant a license to use, or cause to be
granted a license to use, any or all of the Patents, Trademarks and Copyrights (in the
case of Trademarks, along with the goodwill associated therewith), but subject to the
terms of any licenses. Upon any such taking of possession, the Lender may, from time to
time, at the expense of the Credit Parties, make all such repairs, replacements,
alterations, additions and improvements to and of the Collateral as the Lender may deem
proper. In any such case the Lender shall have the right to manage and control the
Collateral and to carry on the business and to exercise all rights and powers of the
Credit Parties in respect thereto as the Lender shall deem best, including the right to
enter into any and all such agreements with respect to the operation of the Collateral or
any part thereof as the Lender may see fit; and the Lender shall be entitled to collect
and receive all rents, issues, profits, fees, revenues and other income of the same and
every part thereof. Such rents, issues, profits, fees, revenues and other income shall be
applied to pay the expenses of holding and operating the Collateral and of conducting the
business thereof, and of all maintenance, repairs, replacements, alterations, additions
and improvements, and to make all payments which the Lender may be required or may elect
to make, if any, for taxes, assessments, insurance and other charges upon the Collateral
or any part thereof, and all other payments which the Lender may be required or authorized
to make under any provision of this Agreement (including legal costs and reasonable
attorneys' fees). The Lender shall apply the remainder of such rents, issues,
profits, fees, revenues and other income as provided in
Section 4.7.
Notwithstanding anything contained herein to the contrary, the Borrower shall have the
right to sell, transfer, license, exchange, assign or otherwise dispose of the Patents and
Trademarks to the extent permitted by each of the Negative Pledge Agreements and subject
to section 2.6(b)(iii) hereof.
4.7
Proceeds of Collateral
.
After deducting all reasonable costs and expenses of collection, storage, custody, sale or
other disposition and delivery (including reasonable legal costs and attorneys' fees)
and all other charges against the Collateral, the Lender shall apply the residue of the
proceeds of any such sale or disposition to the Obligations in accordance with the terms
hereof and any surplus shall be returned to the Credit Parties or to any Person or party
lawfully entitled thereto (including, if applicable, any holders of Subordinated
Indebtedness). In the event the proceeds of any sale, lease or other disposition of the
Collateral are insufficient to pay all of the Obligations in full, the Credit Parties will
be liable for the deficiency, together with interest thereon at the Post-Default Rate, and
the cost and expenses of collection of such deficiency, including (to the extent permitted
by law), without limitation, reasonable attorneys' fees, expenses and disbursements.
ARTICLE 5
Representations and
Warranties
Each
Credit Party represents and warrants to the Lender and the Issuing Lender as to itself and
each other Credit Party, that:
5.1
Organization; Powers
. Each
Credit Party has been duly formed or organized and is validly existing and in good
standing under the laws of its jurisdiction of organization. Each Credit Party 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 have such power or authority or to be so
qualified or in good standing, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
5.2
Authorization;
Enforceability
. The borrowing of the Loans and the grant of security interests
pursuant to the Loan Documents are within the power and authority of the Credit Parties
and have been duly authorized by all necessary action on the part of the Credit Parties.
This Agreement and the other Loan Documents have been duly authorized, executed and
delivered by the Credit Parties and constitute legal, valid and binding obligations of the
Credit Parties, enforceable in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally and subject to general principles of equity, regardless
of whether considered in a proceeding in equity or at law.
5.3
Governmental Approvals; No
Conflicts
. The borrowing of the Loans and the grant of the security interests pursuant
to the Loan Documents (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority which has not been
obtained, except as disclosed on
Schedule 5.3
, (b) will not violate any applicable
law, policy or regulation or the organizational documents of the Credit Parties or any
order of any Governmental Authority, (c) will not violate or result in a default under any
indenture, agreement or other instrument binding upon the Credit Parties, or any assets,
or give rise to a right thereunder to require any payment to be made by the Credit
Parties, and such violation or default or right to payment would have a Material Adverse
Effect, and (d) except for the Liens created by the Loan Documents, will not result in the
creation or imposition of any Lien on any asset of the Credit Parties.
5.4 Financial Condition;
No Material Adverse Change.
(a)       
          The Credit Parties have heretofore delivered to the Lender the following
          financial statements:
(i)
the consolidated balance sheets and statements of operations, shareholders'
          equity and cash flows of the Borrower and all Subsidiaries, as of and for the
          fiscal years ended December 31, 2000, and December 31, 2001, and December 31,
          2002, audited and accompanied by an opinion of the Borrower's independent
          public accountants;
(ii)
the unaudited consolidated balance sheet and statements of operations,
          shareholder's equity and cash flows of the Borrower and all Subsidiaries,
          as of and for the fiscal quarter-to-date period ended March 30, 2003, certified
          by a Designated Financial Officer that such financial statements fairly present
          the financial condition of the Borrower and all Subsidiaries as at such date and
          the results of the operations of the Borrower and all Subsidiaries for the
          period ended on such date and that all such financial statements, including the
          related schedules and notes thereto have been prepared in all material respects
          in accordance with GAAP applied consistently throughout the periods involved,
          except as disclosed on
Schedule 5.4
; and
(iii)
the projected statements of operations for the Borrower and all Subsidiaries on
          a monthly basis for fiscal year 2003 and on an annual basis for 2004 .
Except
as disclosed on
Schedule 5.4
, such financial statements described in clauses
(a)(i) and (a)(ii) above present fairly, in all material respects, the respective
consolidated financial position and results of operations and cash flows of the respective
entities as of such respective dates and for such periods in accordance with GAAP, subject
to year-end audit adjustments and the absence of footnotes in the case of such unaudited
or
pro forma
statements. The projections were prepared by the Borrower in good
faith and were based on assumptions that were reasonable when made.
(b)       
          Except as disclosed on
Schedule 5.4
, since December 31, 2002, there
          has been no material adverse change in the business, assets, operations or
          condition, financial or otherwise, of the Credit Parties from that set forth in
          the December 31, 2002 financial statements referred to in clause (ii) of
          paragraph (a) above.
(c)       
          None of the Credit Parties has on the date hereof any contingent liabilities,
          liabilities for taxes, unusual forward or long-term commitments or unrealized or
          anticipated losses from any unfavorable commitments in each case that are
          material, except as referred to or reflected or provided for in the balance
          sheets as at the end of their respective fiscal years ended in 2000, 2001 and
          2002, referred to above, as provided for in
Schedule 5.4
annexed
          hereto, or as otherwise permitted pursuant to this Agreement, or as referred to
          or reflected or provided for in the financial statements described in this
          Section 5.4.
5.5 Properties.
(a)       
          Each Credit Party has good and marketable title to, or valid, subsisting and
          enforceable leasehold interests in, all its Property (including the Collateral)
          material to its business. All machinery and equipment of the Credit Parties is
          in good operating condition and repair, and all necessary replacements of and
          repairs thereto have be made so as to preserve and maintain the value and
          operating efficiency of such machinery and equipment.
(b)       
          Set forth on
Schedule 5.5
hereto is a complete list of all Patents,
          Trademarks and Copyrights. Each Credit Party owns, or is licensed to use, all
          Patents, Trademarks and Copyrights and other intellectual property material to
          its business
("Proprietary Rights
"), and to the knowledge of
          the Borrower, the use thereof by the Credit Parties 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.
(c)
Schedule 5.5
clearly identifies all Patents, Trademarks and Copyrights
          that have been duly registered in, filed in or issued by the PTO or the United
          States Register of Copyrights (collectively, the "
Registered Proprietary
          Rights
"). The Registered Proprietary Rights have been properly
          maintained and renewed in accordance with all applicable provisions of law and
          administrative regulations in the United States, as applicable. The Credit
          Parties have taken commercially reasonable steps to protect their Registered
          Proprietary Rights and to maintain the confidentiality of all Proprietary Rights
          that are not generally in the public domain.
(d)       
          As of the date hereof,
Schedule 5.5
annexed hereto contains a true,
          accurate and complete list of (i) all Real Property Assets, whether owned or
          leased, and (ii) all leases, subleases or assignments of leases (together with
          all amendments, modifications, supplements, renewals or extensions of any
          thereof) affecting each Leasehold Property, regardless of whether such Credit
          Party is the landlord or tenant (whether directly or as an assignee or successor
          in interest) under such lease, sublease or assignment. Except as specified in
Schedule 5.5
, each agreement listed in clause (ii) of the
          immediately preceding sentence is in full force and effect and the Borrower has
          no knowledge of any default that has occurred and is continuing thereunder, and
          each such agreement constitutes the legal, valid and binding obligation of each
          applicable Credit Party, enforceable against such Credit Party in accordance
          with its terms, except as enforcement may be limited by bankruptcy, insolvency,
          reorganization, moratorium or similar laws relating to or limiting
          creditors' rights generally or by equitable principles.
5.6 Litigation and
Environmental Matters.
(a)       
          There are no actions, suits or proceedings by or before any arbitrator or
          Governmental Authority pending against or, to the knowledge of the Credit
          Parties, threatened against or affecting any Credit Party as to which there is a
          reasonable possibility of an adverse determination and that, if adversely
          determined, could reasonably be expected, individually or in the aggregate, to
          result in a Material Adverse Effect (other than the Disclosed Matters set forth
          in part (a) of
Schedule 5.6
).
(b)       
          Except for the Disclosed Matters set forth in
Schedule 5.6
and except
          with respect to any other matters that, individually or in the aggregate, could
          not reasonably be expected to result in a Material Adverse Effect, the Credit
          Parties (i) have not failed to comply with any Environmental Law or to obtain,
          maintain or comply with any permit, license or other approval required in
          connection with the operation of the Credit Parties' business to be in
          compliance with all applicable Environmental Laws, (ii) have not become subject
          to any Environmental Liability; (iii) have not received notice of any claim with
          respect to any Environmental Liability or any inquiry, allegation, notice or
          other communication from any Governmental Authority which is currently
          outstanding or pending concerning its compliance with any Environmental Law or
          (iv) do not know of any basis for any Environmental Liability.
(c)       
          Since the date of this Agreement, there has been no change in the status of the
          Disclosed Matters that, individually or in the aggregate, has resulted in, or
          materially increased the likelihood of, a Material Adverse Effect.
5.7
Compliance with Laws and
Agreements
. Except as set forth on
Schedule 5.7
, each Credit Party is in
compliance with all laws, regulations, policies and orders of any Governmental Authority
applicable to it or its property and all indentures, agreements and other instruments
binding upon it or its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse Effect.
5.8
Investment and Holding Company
Status
. No Credit Party is (a) an "investment company" as defined in, or
subject to regulation under, the Investment Company Act of 1940, as amended, (b) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935, as amended or (c) a "bank holding company"
as defined in, or subject to regulation under, the Bank Holding Company Act of 1956, as
amended.
5.9
Taxes
. Except as set forth
on
Schedule 5.9
, each Credit Party has timely filed or caused to be filed all
Tax returns and reports required to have been filed and has paid or caused to be paid all
Taxes required to have been paid by it, except (a) Taxes that are being contested in good
faith by appropriate proceedings and for which such Credit Party has set aside on its
books adequate reserves with respect thereto in accordance with GAAP, which reserves shall
be acceptable to Lender, or (b) to the extent that the failure to do so could not
reasonably be expected to result in a Material Adverse Effect.
5.10
ERISA
. Except as set
forth on
Schedule 5.10
, no Credit Party has any Pension Plans. No ERISA Event has
occurred or is reasonably expected to occur that, when taken together with all other such
ERISA Events for which liability is reasonably expected to occur, could reasonably be
expected to result in a Material Adverse Effect. No Credit Party has a present intention
to terminate any Pension Plan with respect to which any Credit Party would incur a cost of
more than $100,000 to terminate such Plan, including amounts required to be contributed to
fund such Plan on Plan termination and all costs and expenses associated therewith,
including without limitation attorneys' and actuaries' fees and expenses in
connection with such termination and a reasonable estimate of expenses and settlement or
judgment costs and attorneys' fees and expenses in connection with litigation related
to such termination.
5.11
Disclosure
. As of the
Effective Time, the Credit Parties have disclosed to the Lender all material agreements,
instruments and corporate or other restrictions to which any Credit Party is subject after
the Effective Time, and all other matters known to the Credit Parties, that, individually
or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.
The organizational structure of the Credit Parties is as set forth on
Schedule 5.12
annexed hereto. To the knowledge of the Borrower, the information, reports, financial
statements, exhibits and schedules furnished at or prior to the Effective Time in writing
by or on behalf of the Credit Parties to the Lender in connection with the negotiation,
preparation or delivery of this Agreement and the other Loan Documents or included herein
or therein or delivered pursuant hereto or thereto, at the Effective Time, when taken as a
whole do not contain any untrue statement of material fact or omit to state any material
fact necessary to make the statements herein or therein, in light of the circumstances
under which they were made, not materially misleading. To the knowledge of the Borrower,
all written information furnished after the Effective Time by the Credit Parties to the
Lender in connection with this Agreement and the other Loan Documents and the transactions
contemplated hereby and thereby will be true, complete and accurate in every material
respect, or (in the case of pro-forma information and projections) prepared in good faith
based on reasonable assumptions, on the date as of which such information is stated or
certified. There is no fact known to the Credit Parties that could reasonably be expected
to have a Material Adverse Effect that has not been disclosed herein, in the other Loan
Documents or in a report, financial statement, exhibit, schedule, disclosure letter or
other writing furnished to the Lender for use in connection with the transactions
contemplated hereby or thereby.
5.12
Capitalization
. As of the
Effective Time, the capital structure and ownership of the Credit Parties are correctly
described on
Schedule 5.12
. As of the Effective Time, the authorized, issued
and outstanding capital stock of the Credit Parties consists of the capital stock
described on
Schedule 5.12
, all of which is duly and validly issued and
outstanding, fully paid and nonassessable. Except as set forth on
Schedule 5.12
, as of the date hereof, (x) there are no outstanding Equity
Rights with respect to any Credit Party and, (y) there are no outstanding obligations of
any Credit Party to repurchase, redeem, or otherwise acquire any shares of capital stock
of or other interest in any Credit Party, nor are there any outstanding obligations of any
Credit Party to make payments to any Person, such as "phantom stock" payments,
where the amount thereof is calculated with reference to the fair market value or equity
value of any Credit Party.
5.13 Subsidiaries.
(a)       
          Set forth on
Schedule 5.13
is a complete and correct list of all
          Subsidiaries of the Credit Parties 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. Except as
          disclosed in
Schedule 5.13
, (x) each Credit Party and its respective
          Subsidiaries owns, free and clear of Liens (other than Liens permitted
          hereunder), and has the unencumbered right to vote, all outstanding ownership
          interests in each Person shown to be held by it in
Schedule 5.13
,
          (y) all of the issued and outstanding capital stock of each such Person
          organized as a corporation is validly issued, fully paid and nonassessable and
          (z) there are no outstanding Equity Rights with respect to such Person.
(b)       
          Except as set forth on
Schedule 8.8
, as of the date of this
          Agreement none of the Credit Parties is subject to any indenture, agreement,
          instrument or other arrangement containing any provision of the type described
          in Section 8.8 ("
Restrictive Agreements
"), other than any
          such provision the effect of which has been unconditionally, irrevocably and
          permanently waived.
5.14 Material
Indebtedness, Liens and Agreements.
(a)
Schedule 5.14
hereto contains a complete and correct list, as of the
          date of this Agreement, of all Material Indebtedness or any extension of credit
          (or commitment for any extension of credit) to, or guarantee by, any Credit
          Party the aggregate principal or face amount of which equals or exceeds (or may
          equal or exceed) $500,000, and the aggregate principal or face amount
          outstanding or that may become outstanding with respect thereto is correctly
          described on
Schedule 5.14
.
(b)
Schedule 5.14
hereto is a complete and correct list, as of the date
          of this Agreement, of each Lien (other than the Liens in favor of the Lender)
          securing Indebtedness of any Person and covering any property of the Credit
          Parties, and the aggregate Indebtedness secured (or which may be secured) by
          each such Lien and the Property covered by each such Lien is correctly described
          in the appropriate part of
Schedule 5.14
.
(c)
Schedule 5.14
hereto is a complete and correct list, as of the date
          of this Agreement, of each contract and arrangement to which any Credit Party is
          a party for which breach, nonperformance, cancellation or failure to renew would
          have a Material Adverse Effect other than purchase orders made in the ordinary
          course of business and subject to customary terms.
(d)       
          To the extent requested by Lender, true and complete copies of each agreement
          listed on the appropriate part of
Schedule 5.14
have been delivered
          to the Lender, together with all amendments, waivers and other modifications
          thereto. All such agreements are valid, subsisting, in full force and effect,
          are currently binding and will continue to be binding upon each Credit Party
          that is a party thereto and, to the best knowledge of the Credit Parties,
          binding upon the other parties thereto in accordance with their terms. The
          Credit Parties are not in default under any such agreements, which default could
          have a Material Adverse Effect.
5.15
Federal Reserve
Regulations
. No Credit Party is engaged principally or as one of its important
activities in the business of extending credit for the purpose of purchasing or carrying
margin stock (as defined in Regulation U of the Board). The making of the Loans
hereunder, the use of the proceeds thereof as contemplated hereby, and the security
arrangements contemplated by the Loan Documents, will not violate or be inconsistent with
any of the provisions of Regulations T, U, or X of the Board of Governors of the Federal
Reserve System.
5.16     Solvency.  As of the Effective Time and after giving effect to the initial Loans hereunder:
(a)       
          the aggregate value of all properties of the Credit Parties at their present
          fair saleable value on a going concern basis (
i.e.
, the amount that may
          be realized within a reasonable time, considered to be six months to one year,
          either through collection or sale at the regular market value, conceiving the
          latter as the amount that could be obtained for such properties within such
          period by a capable and diligent businessman from an interested buyer who is
          willing to purchase under ordinary selling conditions), exceed the amount of all
          the debts and liabilities (including contingent, subordinated, unmatured and
          unliquidated liabilities) of the Credit Parties;
(b)       
          the Credit Parties will not, on a consolidated basis, have an unreasonably small
          capital with which to conduct their business operations as heretofore conducted;
          and
(c)       
          the Credit Parties will have, on a consolidated basis, sufficient cash flow to
          enable them to pay their debts as they mature.
5.17
Force Majeure
. Since
March 31, 2003, the business, properties and other assets of the Credit Parties have not
been materially and adversely affected in any way as the result of any fire or other
casualty, strike, lockout or other labor trouble, embargo, sabotage, confiscation,
contamination, riot, civil disturbance, activity of armed forces or act of God.
5.18
Accounts Receivable
. The
Lender may rely, in determining which accounts receivable are Eligible Accounts, on all
statements and representations made by the Credit Parties with respect to such accounts
receivable. Unless otherwise indicated to the Lender in writing:
(a)       
          Each account receivable is genuine and in all respects what it purports to be,
          and it is not evidenced by a judgment;
(b)       
          Each account receivable arises out of a completed, bona fide sale and delivery
          of goods or rendition of services by a Credit Party in the ordinary course of
          its business and in accordance with the terms and conditions of all purchase
          orders, contracts or other documents relating thereto and forming a part of the
          contract between such Credit Party and the account debtor, and, in the case of
          goods, title to the goods has passed from the Credit Party to the account
          debtor;
(c)       
          Each account receivable is for a liquidated amount maturing as stated in the
          duplicate invoice covering such sale or rendition of services, a copy of which
          has been furnished or is available to the Lender;
(d)       
          Each account receivable, and the Lender's security interest therein, is
          not, and will not (by voluntary act or omission of the Credit Parties) be in the
          future, subject to any offset, Lien, deduction, defense, dispute, counterclaim
          or any other adverse condition except for disputes resulting in returned goods
          where the amount in controversy is deemed by the Lender to be immaterial, and
          each such account receivable is absolutely owing to one of the Credit Parties
          and is not contingent in any respect or for any reason;
(e)       
          No Credit Party has made any agreement with any account debtor for any
          extension, compromise, settlement or modification of any account receivable or
          any deduction therefrom, except discounts or allowances which are granted by the
          Credit Parties in the ordinary course of their businesses for prompt payment and
          which are reflected in the calculation of the net amount of each respective
          invoice related thereto and are reflected in the Borrowing Base Certificates and
          Collateral Update Certificates furnished to the Lender hereunder;
(f)       
          To the best knowledge of the Credit Parties, the account debtor under each
          account receivable had the capacity to contract at the time any contract or
          other document giving rise to an account receivable was executed and such
          account debtor is not insolvent; and
(g)       
          To the best knowledge of the Credit Parties, there are no proceedings or actions
          which are threatened or pending against any account debtor which might result in
          any material adverse change in such account debtor's financial condition or
          the collectability of any account receivable.
5.19 Labor and
Employment Matters.
(a)       
          Except as set forth on
Schedule 5.19
as of the Effective Time, and
          thereafter with respect to which such would have a Material Adverse Effect, (A)
          no employee of the Credit Parties is represented by a labor union, no labor
          union has been certified or recognized as a representative of any such employee,
          and the Credit Parties do not have any obligation under any collective
          bargaining agreement or other agreement with any labor union or any obligation
          to recognize or deal with any labor union, and there are no such contracts or
          other agreements pertaining to or which determine the terms or conditions of
          employment of any employee of the Credit Parties; (B) there are no pending or
          threatened representation campaigns, elections or proceedings; (C) the Credit
          Parties do not have knowledge of any strikes, slowdowns or work stoppages of any
          kind, or threats thereof, and no such activities occurred during the 24-month
          period preceding the date hereof; (D) no Credit Party has engaged in, admitted
          committing or been held to have committed any unfair labor practice; and (E)
          there are no controversies or grievances between any Credit Party and any of its
          employees or representatives thereof.
(b)       
          Except as set forth on
Schedule 5.19
, the Credit Parties have at all
          times complied in all material respects, and are in material compliance with,
          all applicable laws, rules and regulations respecting employment, wages, hours,
          compensation, benefits, and payment and withholding of taxes in connection with
          employment.
(c)       
          Except as set forth on
Schedule 5.19
, except as could not reasonably
          be expected to have, individually or in the aggregate, a Material Adverse
          Effect, the Credit Parties have at all times complied with, and are in
          compliance with, all applicable laws, rules and regulations respecting
          occupational health and safety, whether now existing or subsequently amended or
          enacted, including, without limitation, the Occupational Safety & Health Act
          of 1970, 29 U.S.C. Section 651 et seq. and the state analogies thereto, all
          as amended or superseded from time to time, and any common law doctrine relating
          to worker health and safety.
5.20
Bank Accounts
.
Schedule 5.20
lists all banks and other financial institutions at which any Credit
Party maintains deposits and/or other accounts as of the Closing Date, and such Schedule
correctly identifies the name and address of each depository, the name in which the
account is held, a description of the purpose of the account, and the complete account
number.
ARTICLE 6
Conditions
6.1
Effective Time
. The
obligations of the Lender to make Revolving Loans, and of the Issuing Lender to issue
Letters of Credit hereunder shall not become effective until the date on which each of the
following conditions is satisfied (or waived in accordance with Section 10.2):
(a)
Counterparts of Agreement
. The Lender shall have received from each party
          hereto either (i) an original counterpart of each of the Loan Documents signed
          on behalf of such party or (ii) written evidence satisfactory to the Lender
          (which may include telecopy transmission of a signed signature page of each of
          the Loan Documents) that such party has signed a counterpart of each of the Loan
          Documents.
(b)
Note
. The Lender shall have received a duly completed and executed
          Amended and Restated Revolving Credit Note.
(c)
Organizational Structure
. The corporate organizational structure,
          capitalization and ownership of the Credit Parties, shall be as set forth on
Schedules 5.12
and
5.13
annexed hereto. The Lender shall have had
          the opportunity to review, and shall be satisfied with, the Credit Parties'
          state and federal tax assumptions, and the ownership, capital, organization and
          structure of the Credit Parties.
(d)
Existence and Good Standing
. The Lender shall have received such
          documents and certificates as the Lender or Special Counsel may reasonably
          request relating to the organization, existence and good standing of each Credit
          Party, the authorization of the transactions contemplated hereby and any other
          legal matters relating to the Credit Parties, this Agreement or the other Loan
          Documents, all in form and substance reasonably satisfactory to the Lender and
          Special Counsel.
(e)
Security Interests in Personal and Mixed Property
. The Lender shall have
          received evidence satisfactory to it that the Credit Parties shall have taken or
          caused to be taken all such actions, executed and delivered or caused to be
          executed and delivered all such agreements, documents and instruments and made
          or caused to be made all such filings and recordings (other than filings or
          recordings to be made by the Lender on or after the Closing Date) that may be
          necessary or, in the opinion of the Lender, desirable in order to create in
          favor of the Lender, valid and (upon such filing and recording) perfected First
          Priority security interests in the entire personal and mixed property Collateral
          other than such property and assets which are the subject of Permitted Liens
          pursuant to Section 8 hereof.
(f)
Leases; Landlord's Waivers and Consents
. In the case of each
          Material Leasehold Property existing as of the Closing Date, copies of the
          lease, and all amendments thereto, between the Credit Party and the landlord or
          tenant party thereto, together with a Landlord's Waiver and Consent with
          respect thereto and where required by the terms of any lease, the consent of the
          mortgagee, ground lessor or other party.
(g)
Evidence of Insurance
. The Lender shall have received certificates from
          the Credit Parties' insurance brokers that all insurance required to be
          maintained pursuant to Section 7.5 is in full force and effect and that the
          Lender has been named as additional insured or loss payee thereunder to the
          extent required under Section 7.5.
(h)
Necessary Governmental Permits, Licenses and Authorizations and Consents;
          Etc
. The Credit Parties shall have obtained all other permits, licenses,
          authorizations and consents from all other Governmental Authorities and all
          consents of other Persons with respect to Material Indebtedness, Liens and
          material agreements listed on
Schedule 5.14
(and so identified
          thereon) annexed hereto, in each case that are necessary or advisable in
          connection with the transactions contemplated by the Loan Documents, and each of
          the foregoing shall be in full force and effect, in each case other than those
          the failure to obtain or maintain which, either individually or in the
          aggregate, would not reasonably be expected to have a Material Adverse Effect.
          No action, request for stay, petition for review or rehearing, reconsideration
          or appeal with respect to any of the foregoing shall be pending, and the time
          for any applicable Governmental Authority to take action to set aside its
          consent on its own motion shall have expired.
(i)
Existing Debt; Liens
. The Lender shall have received evidence that all
          principal, interest, and other amounts owing in respect of all Existing Debt of
          the Credit Parties (other than Indebtedness permitted to remain outstanding in
          accordance with Section 8.1 hereof) will be repaid in full as of the
          Effective Time, and that with respect to all Indebtedness permitted to remain
          outstanding in accordance with Section 8.1 hereof, any defaults or events of
          default existing as of the Closing Date with respect to such Indebtedness will
          be cured or waived immediately following the funding of the initial Loans. The
          Lender shall have received evidence that as of the Effective Time, the Property
          of the Credit Parties is not subject to any Liens (other than Liens permitted to
          remain outstanding in accordance with Section 8.2 hereof).
(j)
Financial Statements; Projections
. The Lender shall have received the
          certified financial statements and projections referred to in Section 5.4
          hereof and the same shall not be inconsistent with the information previously
          provided to the Lender.
(k)
Financial Officer Certificate
. The Lender shall have received a
          certificate, dated the Closing Date and signed by a Designated Financial
          Officer, confirming compliance with the conditions set forth in paragraphs (a)
          and (b) of Section 6.2 at the Effective Time.
(l)
No Material Adverse Change
. There shall have occurred no material adverse
          change (in the reasonable opinion of the Lender) in the businesses, operations,
          properties (including tangible properties), or conditions (financial or
          otherwise), assets, liabilities or income of the Credit Parties and the Other
          Obligors.
(m)
Opinion of Counsel to Credit Parties
. The Lender shall have received a
          favorable written opinion (addressed to the Lender and dated the Closing Date)
          of Foley Hoag LLP, special counsel to the Credit Parties, substantially in the
          form of
Exhibit I
annexed hereto and covering such matters relating to
          the Credit Parties, this Agreement, the other Loan Documents or the transactions
          contemplated hereby as the Lender shall reasonably request.
(n)
Borrowing Base and Collateral Update Certificates
. A Designated Financial
          Officer shall have executed and delivered to the Lender a Borrowing Base
          Certificate substantially in the form of
Exhibit B-1
annexed hereto,
          which Borrowing Base Certificate shall show Excess Availability under the
          Revolving Credit Commitment of not less than $500,000.00 (after giving effect to
          the payment of all sums and expenses, the issuance of all Letters of Credit and
          the funding of all Loans to be paid, issued or funded at the Effective Time),
          and a Collateral Update Certificate substantially in the form of
Exhibit
          B-2
annexed hereto.
(o)
Controlled Accounts
. The Credit Parties shall have established such
          Controlled Accounts with the Cash Management Bank as required in accordance with
          Section 4.3 hereof, and shall have entered into all Control Agreements as shall
          be required by the Lender.
(p)
Fees and Expenses
. The Lender and the Issuing Lender shall have received
          all fees and other amounts due and payable to such Person and Special Counsel at
          or prior to the Effective Time, including, to the extent invoiced, reimbursement
          or payment of all out-of-pocket expenses required to be reimbursed or paid by
          the Borrower hereunder.
(q)
Other Documents
. The Lender shall have received all material contracts,
          instruments, opinions, certificates, assurances and other documents as the
          Lender or Special Counsel shall have reasonably requested and the same shall be
          reasonably satisfactory to each of them.
6.2
Each Extension of Credit
.
The obligation of the Lender to make a Loan on the occasion of any Borrowing, and of the
Issuing Lender to issue, amend, renew or extend any Letter of Credit, is subject to the
satisfaction of the following conditions:
(a)
Representations and Warranties
. The representations and warranties of
          each Credit Party set forth in this Agreement and the other Loan Documents shall
          be true and correct in all material respects on and as of the date of such
          Borrowing, or (as applicable) the date of issuance, amendment, renewal or
          extension of such Letter of Credit, both before and after giving effect thereto
          and to the use of the proceeds thereof (or, if any such representation or
          warranty is expressly stated to have been made as of a specific date, such
          representation or warranty shall be or have been true and correct as of such
          specific date and provided that, to the extent any change in circumstances
          expressly permitted by this Agreement causes any representation and warranty set
          forth herein to no longer be true, such representation and warranty shall be
          deemed modified to reflect such change in circumstances).
(b)
No Defaults
. At the time of, and immediately after giving effect to, such
          Borrowing, or (as applicable) the date of issuance, amendment, renewal or
          extension of such Letter of Credit, no Default shall have occurred and be
          continuing and the Borrower shall be in compliance with all applicable legal
          requirements.
(c)
Borrowing Base Certificate
. A Designated Financial Officer shall have
          executed and delivered to the Lender a Borrowing Base Certificate substantially
          in the form of
Exhibit B-1
annexed hereto, which Borrowing Base
          Certificate shall show Excess Availability as of the close of business on the
          immediately preceding Business Day of not less than $500,000.00 (after giving
          effect to the funding of such requested Loan or the issuance of such requested
          Letter of Credit).
ARTICLE 7
Affirmative Covenants
Until
the Revolving Credit Commitment has expired or been terminated and the principal of and
interest on each Loan and all fees payable hereunder shall have been paid in full and all
Letters of Credit shall have expired or terminated and all LC Disbursements shall have
been reimbursed, each Credit Party covenants and agrees with the Lender that:
7.1      Financial Statements and Other Information.  The Credit Parties will furnish to the Lender:
(a)       
          as soon as available and in any event within 120 days after the end of each
          fiscal year of the Credit Parties:
(i)
consolidated statements of operations, shareholders' equity and cash flows
          of the Credit Parties and their Subsidiaries for such fiscal year and the
          related consolidated balance sheets of the Credit Parties and their Subsidiaries
          as at the end of such fiscal year, setting forth in each case in comparative
          form the corresponding consolidated figures for the preceding fiscal year,
(ii)
an opinion of independent certified 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)
          stating that the consolidated financial statements referred to in the preceding
          clause (i) fairly present in all material respects the consolidated financial
          condition and results of operations of the Credit Parties and their Subsidiaries
          as at the end of, and for, such fiscal year in accordance with GAAP; and
(iii)       
          a Compliance Certificate duly executed by a Designated Financial Officer.
(b)       
          as soon as available and in any event within 30 days after the end of each
          month:
(i)       
               consolidated statements of operations, shareholders' equity and cash flows
               of the Credit Parties and their Subsidiaries for such month and for the period
               from the beginning of the respective fiscal year to the end of such month, and
               the related consolidated balance sheets of the Credit Parties and their
               Subsidiaries as at the end of such period, setting forth in each case in
               comparative form the corresponding consolidated figures for the corresponding
               period in the preceding fiscal year, and the corresponding figures for the
               forecasts most recently delivered to the Lender for such period, and
(ii)       
          a Compliance Certificate duly executed by a Designated Financial Officer;
(c)       
          as soon as available and in any event within forty-five (45) days after the end
          of each fiscal quarter:
(i)    
          consolidated statements of operations of the Credit Parties and their
          Subsidiaries for such quarter and for the period from the beginning of the
          respective fiscal year to the end of such quarter, and the related balance
          sheets, shareholders' equity and cash flows, on an unconsolidated basis, of
          the Credit Parties and their Subsidiaries as at the end of such period, setting
          forth in each case in comparative form the corresponding consolidated figures
          for the corresponding period in the preceding fiscal year, and
(ii)    
          a Compliance Certificate duly executed by a Designated Financial Officer;
(d)       
          if any Loan is outstanding under this Agreement, as soon as available and in any
          event within twenty (20) days after the end of each month with respect to such
          month (or more frequently if requested by the Lender), (i) a Collateral Update
          Certificate in the form attached hereto as
Exhibit B-2
, (ii) an Accounts
          Receivable/Loan Reconciliation Report in the form attached hereto as
Exhibit
          B-3
, (iii) a summary of inventory by type and location, (iv) an
          accounts receivable aging report, and (v) such other information relating to the
          Collateral as the Lender shall reasonably request, in each case, accompanied by
          such supporting detail and documentation as the Lender shall reasonably request;
(e)       
          if any Loan is outstanding under this Agreement, as soon as available and in any
          event no later than fifteen (15) days after the last Business Day of each month
          (or with such greater frequency as the Lender may request), a Borrowing Base
          Certificate in the form attached hereto as
Exhibit B-1
, with respect to
          the Collateral of the Borrower as of the close of business on such last Business
          Day, together with such information relating to the Collateral as the Lender
          shall reasonably request, and accompanied by such supporting detail and
          documentation as the Lender shall reasonably request;
(f)       
          if any Loan is outstanding under this Agreement, as soon as available and in any
          event no later than 1:00 p.m. (Boston time) on each day that the Borrower makes
          any request for any Borrowing hereunder, an Advance Request in the form attached
          hereto as
Exhibit B-5
;
(g)       
          as soon as available and in any event within 30 days after the beginning of the
          fiscal year of the Credit Parties, statements of forecasted consolidated income
          and cash flows for the Credit Parties for each fiscal month in such fiscal year
          and a forecasted consolidated balance sheet of the Credit Parties as of the last
          day of each fiscal month in such fiscal year, and a comparison of the projected
          Excess Availability as of the last day of each fiscal month in such fiscal year,
          together with supporting assumptions which were reasonable when made, all
          prepared in good faith in reasonable detail and consistent with the Credit
          Parties' past practices in preparing projections and otherwise reasonably
          satisfactory in scope to the Lender;
(h)       
          promptly upon receipt thereof, copies of all management letters and
          accountants' letters received by the Credit Parties; and
(i)       
          promptly following any request therefor, such other information regarding the
          operations, business affairs and financial condition of the Credit Parties, or
          compliance with the terms of this Agreement, as the Lender may reasonably
          request.
7.2      Notices of Material Events.  The Credit Parties will furnish to the Lender prompt written notice of the following:
(a)       
          the occurrence of any Default;
(b)       
          the filing or commencement of any action, suit or proceeding by or before any
          arbitrator or Governmental Authority against or affecting any Credit Party,
          Subsidiary or Affiliate that could reasonably be expected to result in a
          Material Adverse Effect;
(c)       
          the occurrence of any ERISA Event related to the Plan of any Credit Party or
          knowledge after due inquiry of any ERISA Event related to a Plan of any other
          ERISA Affiliate that, alone or together with any other ERISA Events that have
          occurred, could reasonably be expected to result in liability of the Credit
          Party in an aggregate amount exceeding $500,000; and
(d)       
          any other development that results in, or could reasonably be expected to result
          in, a Material Adverse Effect.
Each notice delivered under this
Section 7.2 shall be accompanied by a statement of a Designated Financial Officer
setting forth the details of the event or development requiring such notice and any action
taken or proposed to be taken with respect thereto.
7.3
Existence; Conduct of
Business
. Each Credit Party shall 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 material to the conduct of its business;
provided
that the foregoing shall not prohibit any merger, consolidation,
liquidation, dissolution or any discontinuance or sale of such business permitted under
Section 8.4.
7.4
Payment of Obligations
.
Each Credit Party shall pay its obligations, including Tax liabilities, that, if not paid,
could result in a Material Adverse Effect 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) such Credit Party has set aside on its books adequate
reserves with respect thereto in accordance with GAAP, which reserves shall be acceptable
to Lender, and (c) the failure to make payment pending such contest could not reasonably
be expected to result in a Material Adverse Effect.
7.5
Maintenance of Properties;
Insurance
. Each Credit Party shall (a) keep and maintain all property material to the
conduct of its business in good working order and condition, ordinary wear and tear
excepted, and (b) maintain insurance, with financially sound and reputable insurance
companies, as may be required by law and such other 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, including, without limitation,
business interruption and product liability insurance. Without limiting the generality of
the foregoing, the Credit Parties will maintain or cause to be maintained replacement
value casualty insurance on the Collateral under such policies of insurance, in each case
with such insurance companies, in such amounts, with such deductibles, and covering such
terms and risks as are at all times satisfactory to the Lender in its commercially
reasonable judgment. All general liability and other liability policies with respect to
the Credit Parties shall name the Lender as an additional insured thereunder as its
interests may appear, and all business interruption and casualty insurance policy shall
contain a loss payable clause or endorsement, satisfactory in form and substance to the
Lender that names the Lender as the loss payee thereunder. All policies of insurance shall
provide for at least 30 days prior written notice to the Lender of any modifications or
cancellation of such policy.
7.6
Books and Inspection
Rights
. Each Credit Party shall keep proper books of record and account in which
entries are made of all dealings and transactions in relation to its business and
activities which fairly record such transactions and activities. Each Credit Party shall
permit any representatives designated by the Lender 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 as frequently as the
Lender deems appropriate
provided
that, so long as no Default has occurred and is
continuing, all such visits shall be on reasonable prior notice, at reasonable times
during regular business hours of such Credit Party, and
provided further
that after
the occurrence and during the continuance of any Default, the Lender may visit at any
reasonable times. The Borrower shall reimburse the Lender for all reasonable examination
and inspections costs, plus all out-of-pocket expenses incurred in connection with such
inspections. The Credit Parties will permit independent appraisers and environmental
consultants selected by the Lender to visit the properties of the Credit Parties and
perform appraisals and examinations of the inventory, equipment and Real Property Assets
of the Credit Parties at such times and with such frequencies as the Lender shall
reasonably request;
provided
that, so long as no Default has occurred and is
continuing, the Lender shall not request that the inventory, equipment or Real Property
Assets of the Credit Parties be appraised or examined by independent appraisers or
environmental consultants more frequently than once each year. Notwithstanding the
foregoing, the Lender may perform field examinations at least once annually if the
Borrower has not made a Borrowing under the Revolving Credit Commitment, and thereafter,
at least once in every one hundred eighty (180) day period. The Borrower shall reimburse
the Lender for all reasonable fees, costs and expenses charged by such independent
appraisers and environmental consultants for each such appraisal and examination. The
Credit Parties hereby acknowledge the Lender's right to contact the customers of the
Credit Parties at any time for the purpose of verifying the account balances of the
accounts receivable of the Credit Parties.
7.7
Fiscal Year
. To enable the
ready and consistent determination of compliance with the covenants set forth in
Section 8.10 hereof, the Credit Parties shall maintain their current fiscal year and
current method of determining the last day of the first three fiscal quarters in each
fiscal year.
7.8
Compliance with Laws
. Each
Credit Party shall comply with (i) all permits, licenses and authorizations, including,
without limitation, environmental permits, licenses and authorizations, issued by a
Governmental Authority, (ii) all laws, rules, regulations and orders including, without
limitation, Environmental Laws, of any Governmental Authority and (iii) all contractual
obligations, in each case applicable to it or its property, except where the failure to do
so, individually or in the aggregate, could not reasonably be expected to result in a
Material Adverse Effect.
7.9
Use of Proceeds
. The
proceeds of the Loans will be used only for (i) the refinancing of existing indebtedness,
(ii) fees and expenses incurred in connection with the transactions contemplated by this
Agreement, and (iii) for general corporate and working capital purposes of the Credit
Parties. No part of the proceeds of any Loan will be used, whether directly or indirectly,
for any purpose that entails a violation of any of the Regulations of the Board, including
Regulations T, U and X.
7.10
Certain Obligations
Respecting Subsidiaries
. Each Credit Party will, and will cause each of its
Subsidiaries to, take such action from time to time as shall be necessary to ensure that
the percentage of the issued and outstanding shares of capital stock of any class or
character owned by it in any Subsidiary on the date hereof is not at any time decreased,
other than by reason of transfers to another Credit Party.
7.11
ERISA
. Except where a
failure to comply with any of the following, individually or in the aggregate, would not
or could not reasonably be expected to result in a Material Adverse Effect, (i) the Credit
Parties will maintain, and cause each ERISA Affiliate to maintain, each Plan in compliance
with all applicable requirements of ERISA and of the Code and with all applicable rulings
and regulations issued under the provisions of ERISA and of the Code and (ii) the Credit
Parties will not and, to the extent authorized, will not permit any of the ERISA
Affiliates to (a) engage in any transaction with respect to any Plan which would subject
any Credit Party to either a civil penalty assessed pursuant to Section 502(i) of
ERISA or a tax imposed by Section 4975 of the Code, (b) fail to make full payment
when due of all amounts which, under the provisions of any Plan, any Credit Party or any
ERISA Affiliate is required to pay as contributions thereto, or permit to exist any
accumulated funding deficiency (as such term is defined in Section 302 of ERISA and
Section 412 of the Code), whether or not waived, with respect to any Pension Plan or
(c) fail to make any payments to any Multiemployer Plan that any Credit Party or any of
the ERISA Affiliates may be required to make under any agreement relating to such
Multiemployer Plan or any law pertaining thereto.
7.12
Environmental Matters;
Reporting
. The Credit Parties will observe and comply with, and cause each Subsidiary
to observe and comply with all Environmental Laws to the extent non-compliance could
reasonably be expected to have a Material Adverse Effect. The Credit Parties will give the
Lender prompt written notice of any violation as to any Environmental Law by any Credit
Party and of the commencement of any judicial or administrative proceeding relating to
Environmental Laws (a) in which an adverse result would have a material adverse effect on
any operating permits, air emission permits, water discharge permits, hazardous waste
permits or other environmental permits held by any Credit Party, or (b) which will, or is
likely to, have a Material Adverse Effect on such Credit Party or which will require a
material expenditure by such Credit Party to cure any alleged problem or violation.
7.13     Matters Relating to Additional Real Property Collateral.
(a)       
          From and after the Effective Time, in the event that any Credit Party acquires
          any Material Owned Property that the Lender determines is a Mortgaged Property
          or in the event that the Lender determines that any Real Property Asset has
          become a Mortgaged Property, the Borrower shall deliver, to the Lender, as soon
          as practicable after the Lender has notified the Borrower that a Real Property
          Asset is a Mortgaged Property, fully executed and notarized Mortgages, in proper
          form for recording in all appropriate places in all applicable jurisdictions,
          encumbering the interest of the applicable Credit Party in such Mortgaged
          Property, together with mortgagee title insurance policies or commitments
          therefor, and copies of all surveys, deeds, title exception documents, flood
          hazard certificates and other documents as the Lender may reasonably require
          copies of all deeds with respect to such Mortgaged Property.
(b)       
          From and after the Effective Time, in the event that any Credit Party enters
          into any lease with respect to any Material Leasehold Property, the Borrower
          shall deliver to the Lender copies of the lease, and all amendments thereto,
          between the Credit Party and the landlord or tenant, together with a
          Landlord's Waiver and Consent with respect thereto and where required by
          the terms of any lease, the consent of the mortgagee, ground lessor or other
          party.
(c)       
          If requested by the Lender, the Credit Parties shall permit an independent real
          estate appraiser satisfactory to the Lender, upon reasonable notice, to visit
          and inspect any Mortgaged Property for the purpose of preparing an appraisal of
          such Mortgaged Property satisfying the requirements of all applicable laws and
          regulations (in each case to the extent required under such laws and regulations
          as determined by the Lender in its sole discretion).
7.14
Cash Deposits/Bank
Accounts
. The Credit Parties shall take all actions necessary to maintain, preserve
and protect the rights and interests of the Lender with respect to all cash deposits of
the Credit Parties and all other proceeds of Collateral and shall not, without the
Lender's prior written consent, open any deposit or other bank account, or instruct
any account debtor to make payment to any account other than to an established dominion
account, or other Controlled Account under the Lender's control;
provided
that
so long as no Default or Event of Default shall have occurred and be continuing, the
Credit Parties shall be permitted to maintain (i) payroll and accounts not subject to the
Lender's control so long as the aggregate amount of funds on deposit in all such
payroll accounts does not materially exceed estimated payroll for the next payroll period,
and (ii) local bank accounts not subject to the Lender's control so long as (x) the
aggregate amount of funds on deposit in all such local bank accounts does not exceed
$25,000 during any period of more than 72 consecutive hours, and (y) the aggregate amount
of funds on deposit in any such local bank account does not exceed $2,500 during any
period of more than 72 consecutive hours.
7.15
Collateral in the Possession of a Bailee.
If any Collateral is, now or at any time
hereafter, in the possession of a bailee, the Credit Parties shall promptly notify the
Lender thereof and, at the Lender's request and option, shall promptly obtain an
acknowledgement from the bailee, in form and substance satisfactory to the Lender, that
the bailee holds such Collateral for the benefit of the Lender and such bailee's
agreement to comply without further consent of the Credit Parties, at any time with
instructions of the Lender as to such Collateral. It is hereby understood that until such
acknowledgement from such bailee is received by the Lender, any Collateral in the
possession of such bailee shall be excluded from Eligible Inventory under the Borrowing
Base.
ARTICLE 8
Negative Covenants
Until
the Revolving Credit Commitment has expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full and all
Letters of Credit shall have expired or terminated and all LC Disbursements shall have
been reimbursed, each Credit Party covenants and agrees with the Lender that:
8.1
Indebtedness
. The Credit
Parties will not, and will not permit any Subsidiary to, create, incur, assume or permit
to exist any Indebtedness, except:
(a)       
          Indebtedness created hereunder;
(b)       
          Existing Debt on the Closing Date which is set forth in
Schedule 8.1
and has been designated on such schedule as Indebtedness that will remain
          outstanding following the funding of the initial Loans, and any extension,
          renewal, refunding or replacement of any such Indebtedness that does not
          increase the principal amount thereof;
(c)       
          other Indebtedness incurred after the Closing Date (determined on a consolidated
          basis without duplication in accordance with GAAP) consisting of:
(i)       
               Capital Lease Obligations and/or secured by Liens permitted under
               Section 8.2(h), in an aggregate principal amount at any time outstanding
               not in excess of $500,000; and
(ii)       
          up to $1,000,000.00 of Indebtedness incurred by a Foreign Subsidiary pursuant to
          Hedging Agreements;
(d)       
          Guarantees permitted under section 8.3; and
(e)       
          up to $5,000,000.00 of Indebtedness secured by a first mortgage on 50 Enterprise
          Center, Middletown, Rhode Island.
8.2
Liens
. The Credit Parties
will not, and will not permit any Subsidiary to, create, incur, assume or permit to exist
any Lien on any Property or asset now owned or hereafter acquired by it, or assign or sell
any income or revenues (including accounts receivable) or rights in respect of any
thereof, except (the following being called "
Permitted Liens
"):
(a)       
          Liens created hereunder or under the other Loan Documents;
(b)       
          any Lien on any property or asset of any Credit Party existing on the date
          hereof and set forth in
Schedule 8.1
(excluding, however, following
          the making of the initial Loans hereunder, the Liens in favor of any Person
          other than the Lender securing Indebtedness not designated on said schedule as
          Indebtedness to remain outstanding following the funding of the initial Loans),
provided
that (i) such Lien shall not apply to any other property or
          asset of any Credit Party and (ii) such Lien shall secure only those obligations
          which it secures on the date hereof and extensions, renewals and replacements
          thereof that do not increase the outstanding principal amount thereof;
(c)       
          Liens imposed by any Governmental Authority for taxes, assessments or charges
          not yet delinquent or (in the case of property taxes and assessments not
          exceeding $250,000 in the aggregate more than 90 days overdue) which are being
          contested in good faith and by appropriate proceedings if adequate reserves with
          respect thereto are maintained on the books of the applicable Credit Party in
          accordance with GAAP and which reserves shall be acceptable to the Lender;
(d)       
          landlords', carriers', warehousemen's, mechanics',
          materialmen's, repairmen's or other like Liens, and vendors'
          Liens imposed by statute or common law not securing the repayment of
          Indebtedness, 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 and Liens securing judgments (including, without
          limitation, pre-judgment attachments) but only to the extent for an amount and
          for a period not resulting in an Event of Default under Section 9.1(j)
          hereof;
(e)       
          pledges or deposits under worker's compensation, unemployment insurance and
          other social security legislation and pledges or deposits to secure the
          performance of bids, tenders, trade contracts (other than for borrowed money),
          leases (other than capital leases), utility purchase obligations, statutory
          obligations, surety and appeal bonds, performance bonds and other obligations of
          a like nature incurred in the ordinary course of business;
(f)       
          easements, rights-of-way, restrictions and other similar encumbrances incurred
          in the ordinary course of business and encumbrances consisting of zoning
          restrictions, easements, licenses, restrictions on the use of Property or minor
          imperfections in title thereto which, in the aggregate, are not material in
          amount, and which do not, in the aggregate, materially detract from the value of
          the Property of any Credit Party or materially interfere with the ordinary
          conduct of the business of any Credit Party;
(g)       
          Liens consisting of bankers' liens and rights of setoff, in each case,
          arising by operation of law, and Liens on documents presented in letter of
          credit drawings; and
(h)       
          Liens on fixed or capital assets, including real or personal property, acquired,
          constructed or improved by any Credit Party,
provided
that (A) such Liens
          secure Indebtedness (including Capital Lease Obligations) permitted by
          Section 8.1(d), (B) such Liens and the Indebtedness secured thereby
          are incurred prior to or within 90 days after such acquisition or the completion
          of such construction or improvement or were in effect at the time the Credit
          Parties acquired the assets or stock, (C) the Indebtedness secured thereby does
          not exceed the cost of acquiring, constructing or improving such fixed or
          capital assets, and (D) such security interests shall not apply to any other
          property or assets of the Credit Parties.
8.3
Contingent  Liabilities.
The Credit  Parties will not Guarantee  the  Indebtedness  or other  obligations  of any Person,  or
Guarantee the payment of dividends or other distributions upon the stock of, or the earnings of, any Person, except:
(a)       
          endorsements of negotiable instruments for deposit or collection or similar
          transactions in the ordinary course of business;
(b)       
          Guarantees and letters of credit in effect on the date hereof which are
          disclosed in
Schedule 8.1
, and any replacements thereof in amounts
          not exceeding such Guarantees; and
(c)       
          obligations in respect of Letters of Credit.
8.4
Fundamental Changes;
Asset Sales.
(a)       
          The Credit Parties will not enter into any transaction of merger or
          consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
          suffer any liquidation or dissolution). The Credit Parties will not acquire any
          business or property from, or capital stock of, or other equity interests in, or
          be a party to any acquisition of, any Person except for purchases of property to
          be used in the ordinary course of business, Investments permitted under
          Section 8.5, Capital Expenditures. The Credit Parties will not form or
          acquire any Subsidiary without the express prior written consent of the Lender.
(b)       
          The Credit Parties will not convey, sell, lease, transfer or otherwise dispose
          (including any Disposition) of, in one transaction or a series of transactions,
          any part of their business or property, whether now owned or hereafter acquired
          (including, without limitation, receivables and leasehold interests, but
          excluding (x) obsolete or worn-out property (including leasehold interests), or
          tools, equipment or other property no longer used or useful in their business
          and (y) any inventory or other property sold, leased, licensed, transferred or
          disposed of in the ordinary course of business and on ordinary business terms,
          or to the extent such sale, lease, license or transfer does not interfere with
          the operation of the business of the Credit Parties, provided that the Credit
          Parties may sublease real property to the extent such sublease would not
          interfere with the operation of the business of the Credit Parties.
(c)       
          Notwithstanding the foregoing provisions of this Section 8.4:
(i)
any Credit Party may be merged or combined with or into any other Credit Party
          (provided that if such merger involves the Borrower, (x) the Borrower shall be
          the surviving entity and (y) no Change of Control shall occur);
(ii)
any Credit Party may sell, lease, transfer or otherwise dispose of any or all of
          its property (upon voluntary liquidation or otherwise) to any other Credit
          Party; and
(iii)       
               the Credit Parties may consummate Permitted Acquisitions, provided that the
               Borrower shall give the Lender at least ten (10) days prior written notice of
               each such Permitted Acquisition.
8.5
Investments; Hedging
Agreements.
(a)       
          The Credit Parties will not make or permit to remain outstanding any Investment,
          except:
(i)    
          Investments consisting of Guarantees permitted by Section 8.3(b) and
          Indebtedness permitted by Section 8.1;
(ii) Permitted
Investments; and
(iii)    
          Checking and deposit accounts with banks used in the ordinary course of
          business.
(b)       
          The Credit Parties will not enter into any Hedging Agreement, other than Hedging
          Agreements entered into in the ordinary course of business with the prior
          written consent of the Lender to hedge or mitigate risks to which the Credit
          Parties are exposed in the conduct of their business or the management of their
          liabilities.
8.6
Restricted Junior
Payments
. Except as set forth in Section 8.7, the Credit Parties will not declare or
make any Restricted Junior Payment at any time;
provided
,
however
, that any
Credit Party that is a Subsidiary of another Credit Party may pay dividends to such Credit
Party.
8.7
Transactions with
Affiliates
. Except as expressly permitted by this Agreement, the Credit Parties will
not directly or indirectly (a) make any Investment in an Affiliate or a Subsidiary;
(b) transfer, sell, lease, assign or otherwise dispose of any property to an Affiliate or
to a Subsidiary; (c) merge into or consolidate with an Affiliate or a Subsidiary, or
purchase or acquire property from an Affiliate; or (d) enter into any other transaction
directly or indirectly with or for the benefit of an Affiliate or a Subsidiary (including,
without limitation, guarantees and assumptions of obligations of an Affiliate);
provided
that:
(i)
any Affiliate who is an individual may serve as a director, officer, employee or
          consultant of any Credit Party, receive reasonable compensation for his or her
          services in such capacity and benefit from Permitted Investments to the extent
          specified in clause (e) of the definition thereof;
(ii)
the Credit Parties may engage in and continue the transactions with or for the
          benefit of Affiliates which are described in
Schedule 8.7
or are
          referred to in Section 8.6 (but only to the extent specified in such
          section); and
(iii)
the Credit Parties may engage in transactions with Affiliates and Subsidiaries
          in the ordinary course of business on terms which are no less favorable to the
          Credit Parties than those likely to be obtained in an arms' length
          transaction between a Credit Party and a non-affiliated third party.
8.8
Restrictive Agreements
.
The Credit Parties will not directly or indirectly, enter into, incur or permit to exist
any agreement or other arrangement (other than this Agreement) that prohibits, restricts
or imposes any condition upon (a) the ability of any Credit Party to create, incur or
permit to exist any Lien upon any of its property or assets, or (b) the ability of any
Credit Party that is a Subsidiary of another Credit Party to pay dividends or other
distributions with respect to any shares of its capital stock or other equity interests or
to make or repay loans or advances to any other Credit Party or to Guarantee Indebtedness
of any other Credit Party;
provided
that (i) the foregoing shall not apply to
restrictions and conditions imposed by law or by this Agreement, (ii) the foregoing shall
not apply to restrictions and conditions existing on the date hereof identified on
Schedule 8.8
(but shall apply to any extension or renewal of, or any amendment
or modification expanding the scope of, any such restriction or condition), (iii) the
foregoing shall not apply to customary restrictions and conditions contained in agreements
relating to the sale of stock or assets of a Subsidiary of a Credit Party pending such
sale,
provided
such restrictions and conditions apply only to the Subsidiary that
is to be sold and such sale is permitted hereunder, (iv) clause (a) of the foregoing shall
not apply to restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions apply only to
the property or assets securing such Indebtedness, and (v) clause (a) of the foregoing
shall not apply to customary provisions in leases and other contracts (excluding license
agreements) restricting the assignment thereof.
8.9
Sale-Leaseback Transactions.
No Credit Party will directly or indirectly, enter into any arrangements with any
Person whereby such Credit Party shall sell or transfer (or request another Person to
purchase) any property, real, personal or mixed, used or useful in its business, whether
now owned or hereafter acquired, and thereafter rent or lease such property from any
Person.
8.10
Lines of Business
. The
Credit Parties will not engage to any substantial extent in any line or lines of business
activity other than (i) the types of businesses engaged in by the Credit Parties as of the
Effective Time and businesses substantially related thereto, and (ii) such other lines of
business as may be consented to by the Lender.
8.11
Modifications of Certain
Documents
. The Credit Parties will not consent to any modification, supplement or
waiver of any of the provisions of any documents or agreements evidencing or governing any
Existing Debt.
ARTICLE 9
Events of Default
9.1 Events of Default.
The occurrence of any of the following events shall be deemed to constitute an
"Event of Default"hereunder:
(a)       
          the Credit Parties or the Other Obligors shall fail to pay to the Lender, the
          Issuing Lender, the Cash Management Bank or any other Affiliate of the Lender,
          any principal of or interest on any Loan or any Reimbursement Obligation in
          respect of any LC Disbursement or any other Obligation of the Credit Parties or
          any Other Obligor to the Lender, the Issuing Lender, the Cash Management Bank or
          any other Affiliate of the Lender when the same shall become due and payable,
          whether at the due date thereof or at a date fixed for prepayment thereof, by
          acceleration of such due or prepayment date, or otherwise, and, in the case of
          interest only, such failure to make any interest payment shall continue
          unremedied for a period of five (5) calendar days;
(b)       
          any representation or warranty made or deemed made by or on behalf of any Credit
          Party, any Subsidiary or any Other Obligor in or in connection with this
          Agreement, any of the other Loan Documents or any amendment or modification
          hereof or thereof, or in any report, certificate, financial statement or other
          document furnished pursuant to or in connection with this Agreement, any of the
          other Loan Documents or any amendment or modification hereof or thereof, shall
          prove to have been incorrect in any material respect when made or deemed made;
(c)       
          the Credit Parties (i) shall fail to observe or perform any covenant, condition
          or agreement contained in Sections 7.1, 7.2, 7.5, 7.6, 7.9, 7.10, 7.12,
          7.14, 7.15 or in Article 8 or (ii) shall fail to observe or perform any
          other covenant, condition or agreement contained in Sections 7.3, 7.4, 7.7, 7.8,
          7.11, or 7.13 and such failure described in this clause (ii) shall continue
          unremedied for a period of 30 days after the earlier of (x) actual knowledge by
          an officer of the Credit Parties or (y) notice thereof from the Lender to any
          Credit Party;
(d)       
          the Credit Parties or any Other Obligor shall fail to observe or perform any
          covenant, condition or agreement contained in this Agreement (other than those
          specified in clauses (a), (b) or (c) of this Section 9.1) or any other Loan
          Document, and such failure shall continue unremedied for a period of 30 days
          after notice thereof from the Lender to the Credit Parties;
(e)       
          the Credit Parties or any Other Obligor shall fail to make any payment (whether
          of principal, interest or otherwise and regardless of amount) in respect of any
          Material Indebtedness or any Material Rental Obligation, when and as the same
          shall become due and payable, after giving effect to any grace period with
          respect thereto;
(f)       
          any event or condition occurs that results in (i) any Material Indebtedness of
          any Credit Party or any Other Obligor becoming due prior to its scheduled
          maturity or that enables or permits (with or without the giving of notice, the
          lapse of time or both) the holder or holders of any Material Indebtedness or any
          trustee or agent on its or their behalf to cause such Material Indebtedness to
          become due, or to require the prepayment, repurchase, redemption or defeasance
          thereof, prior to its scheduled maturity, or (ii) the lease with respect to any
          Material Rental Obligation of any Credit Party or any Other Obligor being
          terminated prior to its scheduled expiration date or that enables or permits
          (with or without the giving of notice, the lapse of time or both) the
          counterparty to such lease to cause such lease to be terminated prior to its
          scheduled expiration date;
(g)       
          an involuntary proceeding shall be commenced or an involuntary petition shall be
          filed seeking (i) liquidation, reorganization or other relief in respect of any
          Credit Party or any Other Obligor or its debts, or of a substantial part of its
          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 Credit
          Party or any Other Obligor or for a substantial part of its assets, and, in any
          such case, such proceeding or petition shall continue undismissed for 60 days or
          an order or decree approving or ordering any of the foregoing shall be entered;
(h)       
          any Credit Party or any Other Obligor 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 (g) of this Article, (iii) apply for or consent to
          the appointment of a receiver, trustee, custodian, sequestrator, conservator or
          similar official for any Credit Party or any Other Obligor or for a substantial
          part of its 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;
(i)       
          any Credit Party or any Other Obligor shall become unable, admit in writing or
          fail generally to pay its debts as they become due;
(j)       
          a final judgment or judgments for the payment of money (x) in excess of $100,000
          in the aggregate (exclusive of judgment amounts fully covered by insurance where
          the insurer has admitted liability in respect of such judgment) or (y) in excess
          of $250,000 in the aggregate (regardless of insurance coverage), shall be
          rendered by one or more courts, administrative tribunals or other bodies having
          jurisdiction against any Credit Party or any Other Obligor and the same shall
          not be discharged (or provision shall not be made for such discharge), bonded,
          or a stay of execution thereof shall not be procured, within 60 days from the
          date of entry thereof and the relevant Credit Party or Other Obligor shall not,
          within said period of 60 days, or such longer period during which execution of
          the same shall have been stayed, appeal therefrom and cause the execution
          thereof to be stayed during such appeal;
(k)       
          an ERISA Event shall have occurred that, in the reasonable opinion of the
          Lender, when taken together with all other ERISA Events that have occurred,
          could reasonably be expected to result in a Material Adverse Effect;
(l)       
          there shall occur any Change of Control;
(m)       
          any of the following shall occur: (i) the Liens created hereunder or under the
          other Loan Documents shall at any time (other than by reason of the Lender
          relinquishing such Lien) cease in any material respect to constitute valid and
          perfected Liens on the Collateral intended to be covered thereby; (ii) except
          for expiration in accordance with its respective terms, any Loan Document shall
          for whatever reason be terminated, or shall cease to be in full force and
          effect; or (iii) the enforceability of any Loan Document shall be contested by
          any Credit Party or any Other Obligor;
(n)       
          there shall occur any material loss theft, damage or destruction of any
          Collateral not fully covered (subject to such reasonable deductibles as the
          Lender shall have approved) by insurance;
(o)       
          there shall occur any material adverse change (in the reasonable opinion of the
          Lender) on the businesses, operations, properties, conditions (financial or
          otherwise), assets, liabilities, income or prospects of the Credit Parties or
          any Other Obligor;
then, and in every such event (other
than an event described in clause (g) or (h) of this Section 9.1), and at any time
thereafter during the continuance of such event, the Lender may, by notice to the
Borrower, take any or all of the following actions, at the same or different times: (i)
terminate the Revolving Credit Commitment, and thereupon the Revolving Credit Commitment
shall terminate immediately, (ii) notify the Borrower that the outstanding principal of
the Loans shall bear interest at the Post-Default Rate, and thereupon the outstanding
principal of the Loans shall bear interest at the Post-Default Rate, (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, shall become
due and payable immediately, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Credit Parties and the Other Obligors, and
(iv) the Lender, the Issuing Lender, the Cash Management Bank and any other Affiliate of
the Lender may exercise all of the rights as secured party and mortgagee hereunder or
under the other Loan Documents; and in case of any event with respect to the Credit
Parties or any Subsidiary described in clause (g) or (h) of this Section 9.1, the
Revolving Credit Commitment shall automatically terminate, the principal of the Loans then
outstanding shall automatically bear interest at the Post-Default Rate, the principal of
the Loans then outstanding, together with accrued interest thereon and all fees and other
Obligations shall automatically become due and payable, and the Borrower shall provide
cash collateral in accordance with Section 2.3(g) without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the Credit Parties
and the Other Obligors, and the Lender, the Issuing Lender, the Cash Management Bank and
all other Affiliates of the Lender shall be permitted to exercise such rights as secured
party and mortgagee hereunder or under the other Loan Documents to the extent permitted by
applicable law.
9.2
Receivership
. Without
limiting the generality of the foregoing or limiting in any way the rights of the Lender
hereunder or under the other Loan Documents or otherwise under applicable law, at any time
after (i) the entire principal balance of any Loan shall have become due and payable
(whether at maturity, by acceleration or otherwise) and (ii) the Lender shall have
provided to the Borrower not less than ten (10) days' prior written notice of its
intention to apply for a receiver, the Lender shall be entitled to apply for and have a
receiver appointed under state or federal law by a court of competent jurisdiction in any
action taken by the Lender to enforce its rights and remedies hereunder and under the
other Loan Documents in order to manage, protect, preserve, sell and otherwise dispose of
all or any portion of the Collateral and continue the operation of the business of the
Credit Parties, and to collect all revenues and profits thereof and apply the same to the
payment of all expenses and other charges of such receivership, including the compensation
of the receiver, and to the payment of the Loans and other fees and expenses due hereunder
and under the Loan Documents as aforesaid until a sale or other disposition of such
Collateral shall be finally made and consummated. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, EACH CREDIT PARTY HEREBY IRREVOCABLY CONSENTS TO AND WAIVES ANY RIGHT TO OBJECT TO OR
OTHERWISE CONTEST THE APPOINTMENT OF A RECEIVER AS PROVIDED ABOVE. EACH CREDIT PARTY (I)
GRANTS SUCH WAIVER AND CONSENT KNOWINGLY AFTER HAVING DISCUSSED THE IMPLICATIONS THEREOF
WITH COUNSEL, (II) ACKNOWLEDGES THAT (A) THE UNCONTESTED RIGHT TO HAVE A RECEIVER
APPOINTED FOR THE FOREGOING PURPOSES IS CONSIDERED ESSENTIAL BY THE LENDER IN CONNECTION
WITH THE ENFORCEMENT OF ITS RIGHTS AND REMEDIES HEREUNDER AND UNDER THE OTHER LOAN
DOCUMENTS, AND (B) THE AVAILABILITY OF SUCH APPOINTMENT AS A REMEDY UNDER THE FOREGOING
CIRCUMSTANCES WAS A MATERIAL FACTOR IN INDUCING THE LENDER TO MAKE THE LOANS TO THE
BORROWER; AND (III) AGREES TO ENTER INTO ANY AND ALL STIPULATIONS IN ANY LEGAL ACTIONS, OR
AGREEMENTS OR OTHER INSTRUMENTS IN CONNECTION WITH THE FOREGOING AND TO COOPERATE FULLY
WITH THE LENDER IN CONNECTION WITH THE ASSUMPTION AND EXERCISE OF CONTROL BY THE RECEIVER
OVER ALL OR ANY PORTION OF THE COLLATERAL. THE LENDER ACKNOWLEDGES AND AGREES THAT NOTHING
IN THIS SECTION 9.2 SHALL BE DEEMED TO CONSTITUTE A WAIVER OF THE RIGHT OF CREDIT
PARTIES TO FILE FOR PROTECTION UNDER TITLE 11 OF THE UNITED STATES CODE AT ANY TIME.
ARTICLE 10
Miscellaneous
10.1
Notices
. 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 telephonic facsimile (fax), as follows:
(a)       
          if to the Credit Parties or any Other Obligor, to KVH Industries, Inc.,
          Attention: Patrick Spatt, Chief Financial Officer (Fax no. (401-849-0045) with a
          copy to Foley Hoag LLP, Attention: Adam Sonnenschein, Esq. (Fax no.
          (617-832-7000); and
(b)       
          if to the Lender, to Fleet Capital Corporation, One Federal Street, Mail Stop MA
          DE 10307X, Boston, Massachusetts 02110, Attention: Mark B. Schafer, Vice
          President (Fax no.: (617-654-1167), with a copy to Goulston & Storrs, P.C.,
          Attention: Philip A. Herman, Esq. (Fax no. (617-574-7592).
Any party hereto may change its
address or fax number for notices and other communications hereunder by notice to the
other parties hereto. 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.
10.2
Waivers; Amendments.
(a)       
          No failure or delay by the Lender, the Issuing Lender, the Cash Management Bank
          or any Affiliate of the Lender in exercising any right or power hereunder 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 Lender, the
          Issuing Lender, the Cash Management Bank and all Affiliates of the Lender
          hereunder and under the other Loan Documents are cumulative and are not
          exclusive of any rights or remedies that they would otherwise have. No waiver of
          any provision of this Agreement or consent to any departure by any Credit Party
          or Subsidiary therefrom shall in any event be effective unless the same shall be
          permitted by paragraph (b) of this Section 10.2, 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 a Letter of Credit shall not be construed as a waiver of any
          Default, regardless of whether the Lender or the Issuing Lender may have had
          notice or knowledge of such Default at the time.
(b)       
          Neither this Agreement nor any other Loan Document nor any provision hereof or
          thereof may be waived, amended or modified except pursuant to an agreement or
          agreements in writing entered into by the Borrower and the Lender.
10.3
Expenses;
Indemnity: Damage Waiver.
(a)       
          The Credit Parties and the Other Obligors jointly and severally agree to pay, or
          reimburse the Lender for paying, (i) all reasonable out-of-pocket expenses
          incurred by the Lender and its Affiliates, including the reasonable fees,
          charges and disbursements of Special Counsel, in connection with the preparation
          of this Agreement and the other Loan Documents or any amendments, modifications
          or waivers of the provisions hereof or thereof (whether or not the transactions
          contemplated hereby or thereby shall be consummated), (ii) all reasonable
          out-of-pocket expenses incurred by the Issuing Lender in connection with the
          issuance, amendment, renewal or extension of any Letter of Credit or any demand
          for payment thereunder, (iii) all out-of-pocket expenses incurred by the Lender,
          the Issuing Lender, the Cash Management Bank or any Affiliate of the Lender,
          including the fees, charges and disbursements of any counsel for the Lender, the
          Issuing Lender, the Cash Management Bank or any Affiliate of the Lender, in
          connection with the enforcement or protection of their rights in connection with
          this Agreement and the other Loan Documents, including their rights under this
          Section 10.3, or in connection with the Loans made or Letters of Credit
          issued hereunder, including in connection with any workout, restructuring or
          negotiations in respect thereof, and (iv) all Other Taxes levied by any
          Governmental Authority in respect of this Agreement or any of the other Loan
          Documents or any other document referred to herein or therein and 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 Loan Document or any other document referred to therein.
(b)       
          The Credit Parties and the Other Obligors jointly and severally agree to
          indemnify the Lender, the Issuing Lender, the Cash Management Bank, each
          Affiliate of the Lender and each Related Party of any of the foregoing Persons
          (each such Person being called an "Indemnitee") against, and hold each
          Indemnitee harmless from, any and all losses, claims, damages, liabilities and
          related expenses, including the fees, charges and disbursements of any counsel
          for any Indemnitee and settlement costs, incurred by or asserted against any
          Indemnitee arising out of, in connection with, or as a result of (i) the
          execution or delivery of this Agreement, the other Loan Documents or any
          agreement or instrument contemplated hereby, the performance by the parties
          hereto and thereto of their respective obligations hereunder or thereunder or
          the consummation of the transactions contemplated hereby or any other
          transactions contemplated hereby or thereby, (ii) any Loan or Letter of Credit
          or the use of the proceeds therefrom (including any refusal by the Issuing
          Lender to honor a demand for payment under a Letter of Credit if the documents
          presented in connection with such demand do not strictly comply with the terms
          of such Letter of Credit), (iii) any actual or alleged presence or release of
          Hazardous Materials on or from any property owned, leased or operated by any
          Credit Party or any Subsidiary, or any Environmental Liability related in any
          way to any Credit Party or any Subsidiary, 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)       
          To the extent permitted by applicable law, none of the Credit Parties or Other
          Obligors shall assert, and each Credit Party and Other 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, this Agreement,
          the other Loan Documents or any agreement or instrument contemplated hereby or
          thereby, the transactions contemplated hereby, any Loan or Letter of Credit or
          the use of the proceeds thereof.
(d)       
          All amounts due under this Section 10.3 shall be payable promptly after
          written demand therefor.
10.4
Successors and Assigns.
(a)       
          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 Credit Party or Other Obligor may assign or otherwise
          transfer any of its rights or obligations hereunder without the prior written
          consent of the Lender (and any attempted assignment or transfer 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 the Lender, the
          Issuing Lender and the Cash Management Bank) any legal or equitable right,
          remedy or claim under or by reason of this Agreement.
(b)       
          The Lender may at any time and from time to time assign to one or more assignees
          all or a portion of its rights and obligations under this Agreement (including
          all or a portion of the Revolving Credit Commitment and the Loans at the time
          owing to it).
(c)       
          The Lender may at any time and from time to time, sell participations to one or
          more banks or other entities (a "Participant") in all or a portion of
          the Lender's rights and obligations under this Agreement (including all or
          a portion of the Revolving Credit Commitment and the Loans owing to it);
provided
that (i) the Lender's obligations under this Agreement
          shall remain unchanged, (ii) the Lender shall remain solely responsible to the
          other parties hereto for the performance of such obligations and (iii) the
          Borrower shall continue to deal solely and directly with the Lender in
          connection with the Lender's rights and obligations under this Agreement.
          The Borrower agrees that each Participant shall be entitled to the benefits of
          this Agreement to the same extent as if it were a Lender and had acquired its
          interest by assignment pursuant to paragraph (b) of this Section 10.4;
provided
that a Participant shall not be entitled to receive any greater
          payment under this Agreement than the 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.
(d)       
          The 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 the 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 the Lender from any of its obligations hereunder or
          substitute any such assignee for the Lender as a party hereto.
(e)       
          The Lender may furnish any information concerning any Credit Party, any
          Subsidiary or any Other Obligor in the possession of the Lender from time to
          time to assignees and participants (including prospective assignees and
          participants) subject, however, to and so long as the recipient agrees in
          writing to be bound by, the provisions of Section 10.13. In addition, the
          Lender may furnish any information concerning any Credit Party, any Subsidiary,
          or any Affiliate in the Lender's possession to any Affiliate of the Lender,
          subject, however, to the provisions of Section 10.13. The Credit Parties
          shall assist the Lender in effectuating any assignment or participation pursuant
          to this Section 10.4 in whatever manner the Lender reasonably deems
          necessary, including participation in meetings with prospective transferees.
10.5
Survival
. All covenants,
agreements, representations and warranties made by the Credit Parties, Subsidiaries and
Other Obligors herein and in the other Loan Documents, and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement and the other Loan
Documents, shall be considered to have been relied upon by the other parties hereto and
shall survive the execution and delivery of this Agreement and the other Loan Documents
and the making of any Loans and issuance of any Letters of Credit, regardless of any
investigation made by any such other party or on its behalf and notwithstanding that the
Lender or the Issuing 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 so long as the principal of or any accrued interest on
any Loan or any fee or any other Obligation payable under this Agreement or the other Loan
Documents is outstanding and unpaid or any Letter of Credit is outstanding and so long as
the Revolving Credit Commitment has not expired or terminated. The provisions of Sections
2.9, 2.10 and 10.3 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 Letters of Credit and the Revolving Credit Commitment or
the termination of this Agreement or any other Loan Document or any provision hereof or
thereof.
10.6
Counterparts; Integration;
References to Agreement; 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 Lender or its counsel constitute the entire contract 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. Whenever there is
a reference in any Loan Document or UCC Financing Statement to the "Credit
Agreement" to which the Lender and the Credit Parties are parties, such reference
shall be deemed to be made to this Agreement among the parties hereto. Except as provided
in Section 6.1, this Agreement shall become effective when it shall have been
executed by the Lender and when the Lender 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
of this Agreement by telecopy shall be effective as delivery of a manually executed
counterpart of this Agreement.
10.7
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.
10.8
Right of Setoff
. Each
Credit Party and Other Obligor hereby grants to the Lender, the Cash Management Bank and
each Affiliate of the Lender that from time to time maintains any deposit accounts, holds
any funds or otherwise becomes indebted to the Credit Parties or any Other Obligor a
security interest in all deposits (general or special, time or demand, provisional or
final) and funds at any time held and other indebtedness at any time owing by the Lender,
the Cash Management Bank or any such Affiliate of the Lender to or for the credit or the
account of any Credit Party or any Other Obligor as security for the Obligations, and the
Credit Parties hereby agree that if an Event of Default shall have occurred and be
continuing, the Lender, the Cash Management Bank and each Affiliate of the Lender are
hereby authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or demand,
provisional or final) or other funds at any time held and other indebtedness at any time
owing by the Lender, the Cash Management Bank or any Affiliate of the Lender to or for the
credit or the account of any Credit Party or any Other Obligor against any and all of the
Obligations, irrespective of whether or not the Lender shall have made any demand under
this Agreement and although any of the Obligations may be unmatured. The rights of the
Lender, the Cash Management Bank and each Affiliate of the Lender under this
Section 10.8 are in addition to any other rights and remedies (including other rights
of setoff) which the Lender, the Cash Management Bank or any Affiliate of the Lender may
have.
10.9
Subordination by Credit
Parties
. The Credit Parties hereby agree that all present and future Indebtedness of
any Credit Party to another Credit Party ("
Intercompany Indebtedness
"),
if any, shall be subordinate and junior in right of payment and priority to the
Obligations, and each Credit Party agrees not to make, demand, accept or receive any
payment in respect of any present or future Intercompany Indebtedness, including, without
limitation, any payment received through the exercise of any right of setoff, counterclaim
or cross claim, or any collateral therefor, unless and until such time as the Obligations
shall have been indefeasibly paid in full;
provided
that, so long as no Default
shall have occurred and be continuing and no Default shall be caused thereby, the Credit
Parties may make and receive such payments as shall be customary in the ordinary course of
the Credit Parties' business. Without in any way limiting the foregoing, in the event
of any insolvency or bankruptcy proceedings, or any receivership, liquidation,
reorganization, dissolution or other similar proceedings relative to any Credit Party or
to its businesses, properties or assets, the Lender shall be entitled to receive payment
in full of all of the Obligations before any Credit Party shall be entitled to receive any
payment in respect of any present or future Intercompany Indebtedness.
10.10    Governing Law; Jurisdiction; Consent to Service of Process.
(a)       
          This Agreement shall be construed in accordance with and governed by the law of
          The Commonwealth of Massachusetts.
(b)       
          Each party hereto hereby irrevocably and unconditionally submits, for itself and
          its property, to the nonexclusive jurisdiction of the courts of The Commonwealth
          of Massachusetts and of the United States District Court for the District of
          Massachusetts, and any appellate court from any thereof, in any action or
          proceeding arising out of or relating to this Agreement or the other Loan
          Documents, or for recognition or enforcement of any judgment, and each of the
          parties hereto hereby irrevocably and unconditionally agrees that all claims in
          respect of any such action or proceeding may be heard and determined in such
          Massachusetts court (or, to the extent permitted by law, in such Federal court).
          Each of the parties hereto agrees that a final judgment in any such action or
          proceeding shall be conclusive and may be enforced in other jurisdictions by
          suit on the judgment or in any other manner provided by law. Nothing in this
          Agreement shall affect any right that the Lender, the Issuing Lender or the Cash
          Management Bank may otherwise have to bring any action or proceeding relating to
          this Agreement against any Credit Party, any Subsidiary or any Other Obligor or
          its properties in the courts of any jurisdiction.
(c)       
          Each party hereto hereby irrevocably and unconditionally waives, to the fullest
          extent it may legally and effectively do so, any objection which 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 Loan Documents in any court
          referred to in paragraph (b) of this Section 10.10. Each of the parties
          hereto hereby irrevocably waives, to the fullest extent permitted by law, the
          defense of an inconvenient forum to the maintenance of such action or proceeding
          in any such court.
(d)       
          Each party to this Agreement irrevocably consents to service of process in the
          manner provided for notices in Section 10.1. Nothing in this Agreement will
          affect the right of any party to this Agreement to serve process in any other
          manner permitted by law.
10.11
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 THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY
(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 10.11.
10.12
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.
10.13
Confidentiality
. The
Lender agrees to keep confidential information obtained by it pursuant hereto and the
other Loan Documents confidential in accordance with the Lender's customary practices
and agrees that it will only use such information in connection with the transactions
contemplated by this Agreement and not disclose any of such information other than (a) to
the Lender's employees, representatives, directors, attorneys, auditors, agents,
professional advisors, trustees or Affiliates who are advised of the confidential nature
of such information or to any direct or indirect contractual counterparty in swap
agreements or such contractual counterparty's professional advisor (so long as such
contractual counterparty or professional advisor to such contractual counterparty agrees
to be bound by the provisions of this Section 10.13), (b) to the extent such
information presently is or hereafter becomes available to the Lender on a
non-confidential basis from any source of such information that is in the public domain at
the time of disclosure, (c) to the extent disclosure is required by law (including
applicable securities law), regulation, subpoena or judicial order or process
(
provided
that notice of such requirement or order shall be promptly furnished to
the Borrower unless such notice is legally prohibited) or requested or required by bank,
securities, insurance or investment company regulators or auditors or any administrative
body or commission to whose jurisdiction the Lender may be subject, (d) to any rating
agency to the extent required in connection with any rating to be assigned to the Lender,
(e) to assignees or participants or prospective assignees or participants who agree to be
bound by the provisions of this Section 10.13, (f) to the extent required in
connection with any litigation between any Credit Party or any Other Obligor and the
Lender with respect to the Loans or this Agreement and the other Loan Documents or (g)
with the Borrower's prior written consent.
IN
WITNESS WHEREOF, the parties hereto have caused this Credit Agreement to be duly executed
by their respective authorized officers as of the day and year first above written.
BORROWER
KVH INDUSTRIES, INC.
By: /s/ Patrick J. Spratt
Name: Patrick J. Spratt
Title: Chief Financial Officer
LENDER
FLEET CAPITAL CORPORATION,
                                             as Lender
By: /s/ Mark B. Schafer
Name: Mark B. Schafer
Title: V.P. Fleet Capital Corporation
ISSUING LENDER
FLEET
NATIONAL BANK,

                                             as Issuing Lender
By: /s/ Mark B. Schafer
Name: Mark B. Schafer
Title: Authorized Officer
CASH MANAGEMENT BANK
FLEET NATIONAL
BANK,

                                             as Cash Management Bank
By: /s/ Mark B. Schafer
Name: Mark B. Schafer
Title: Authorized Officer