CREDIT AGREEMENT

EXHIBIT 10.1

 

This Credit Agreement is made this 2 ^nd day of July, 2008, by and between the following parties:

RBS Citizens, National Association (the “ Bank ”), a national banking association having a principal place of business at 28 State Street, Boston, Massachusetts 02109; and

Cybex International, Inc. (the “ Borrower ”), a New York corporation duly organized and having a principal place of business at 10 Trotter Drive, Medway, Massachusetts 02053;

in consideration of the mutual covenants and benefits to be derived herefrom.

W I T N E S S E T H :

SECTION 1. DEFINITIONS AND RULES OF INTERPRETATION

1.1 Definitions . All capitalized terms used in this Agreement, any Related Agreement (as hereinafter defined) or in any certificate, report or other document made or delivered pursuant to this Agreement (unless otherwise defined therein) shall have the meanings assigned to them below.

Account means account #1303352505 maintained by the Bank in the name of the Borrower.

Accounts and Accounts Receivable include, without limitation, “accounts” and “accounts receivable” as such terms are defined in the Uniform Commercial Code.

Advance and Advances means the loans made by the Bank to the Borrower pursuant to the Revolving Credit Facility.

Affiliate means any person, corporation or other entity which directly or indirectly controls, or is controlled by, or is under common control with the Borrower or any Subsidiary.

Agreement means this Credit Agreement, as it may be amended, modified, supplemented or restated from time to time.

Applicable Margin means (i) with respect to the Revolving Credit Facility, for any LIBOR Rate Loans and any LIBOR Advantage Rate Loans, plus one and one-quarter (1.25%) percent per annum, and for any Prime Rate Loans, less one (1.00%) percent per annum, and (ii) with respect to the Unused Fee, one quarter of one (.25%) percent per annum.

Bank shall have the meaning given such term in the Preamble of this Agreement.

Borrower shall have the meaning given such term in the Preamble of this Agreement.

Business Day means:

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

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

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

Capital Assets means assets that in accordance with GAAP are required or permitted to be depreciated on a balance sheet.

Capital Expenditures means, for any period, the aggregate amount of all expenditures for the acquisition, construction, improvement, replacement or purchase of Capital Assets and Intangible Assets, including, but not limited to, expenditures under Capital Leases.

Capital Leases means capital leases, conditional sales contracts and other title retention agreements relating to the purchase or acquisition of Capital Assets.

Cash Taxes means all Income Tax liabilities incurred and paid by the Borrower during the applicable period.

Collateral shall have the meaning ascribed thereto in the Security Agreement.

Control shall be deemed to exist if any person, entity or corporation, or combination thereof shall have possession, directly or indirectly, of the power to direct the management or policies of the Borrower and shall be deemed to include UM Holdings Ltd. and its Affiliates, and any person or group which acquires, directly or indirectly, a greater percentage of the voting stock of the Borrower than UM Holdings Ltd. and its Affiliates hold at such time.

Current Maturity of Long-Term Debt (“ CMLTD ”) means the current maturity of long-term Indebtedness paid during the applicable period, including, but not limited to, amounts required to be paid during such period under Capital Leases.

Cybex UK means Cybex International UK Limited, a United Kingdom corporation, with a principal place of business at Oak Tree House, Atherstone Road, Measham, Derbyshire, DE12 7EL England.

Debt Service Coverage Ratio means, during the applicable period, that quotient equal to (A) the aggregate of (i) EBITDA, minus (ii) Dividends or S-distributions, minus (iii) unfinanced Capital Expenditures; divided by (B) the sum of (i) Interest and (ii) Current Maturity of Long-Term Debt and (iii) Cash Taxes; that is,

 

Default shall have the meaning given such term in Section 9 of this Agreement.

Default Rate shall have the meaning given such term in Section 3.4 hereof.

Dividends means, for the applicable period, the aggregate of all amounts paid (without duplication) as dividends, distributions or owner withdrawals, and includes any purchase, redemption or other retirement of any shares or other ownership interest directly or indirectly through a Subsidiary or otherwise and includes return of capital to shareholders, partners or members.

Domestic Eligible Receivables means such of the Borrower’s Eligible Receivables which are owed by account debtors whose principal place of business is in the United States.

EBITDA (“ EBITDA ”) means, for the applicable period, for the Borrower and its Subsidiaries on a consolidated basis, an amount equal to Net Income for such period

plus : (a) the following to the extent deducted in calculating such Net Income:

(i) consolidated interest charges for such period,

(ii) the provision for federal, state, provincial, local and foreign income taxes payable by the Borrower and its Subsidiaries for such period,

(iii) the amount of depreciation and amortization expense deducted in determining such Net Income,

(iv) non-cash charges for stock based compensation, and

(v) non-cash extraordinary and unusual or non-recurring writedowns or writeoffs

minus (b) any extraordinary , unusual, non-recurring or non-operating gains;

all calculated for the Borrower and its Subsidiaries in accordance with GAAP on a consolidated basis.

Eligible Inventory means that portion of Borrower’s Inventory comprised of raw materials and finished goods and products (excluding work in process) valued at the lower of cost or market value, excluding (i) the Borrower’s Inventory located at: (a) any location outside of the United States or any public warehouse for which the Bank has not been furnished an inventory agreement in a form reasonably acceptable to the Bank, (b) any fulfillment house or (c) with any co-packers or (ii) Inventory comprised of manuals, packaging materials or promotional items, and less any amounts reserved for by the Borrower (excluding reserves relating to excluded inventory categories) on its most recent financial statements.

Eligible Receivables means such of the Borrower’s Accounts and Accounts Receivable as arise in the ordinary course of the Borrower’s business for goods sold and/or services rendered by the Borrower, which Accounts and Accounts Receivable have been determined by the Bank to be satisfactory and have been earned by performance and are owed to the Borrower by such of the

Borrower’s trade customers as the Bank determines to be satisfactory, in the Bank’s sole reasonable discretion in each instance. Eligible Receivable shall not include the following Accounts and Accounts Receivable:

(a) any which is evidenced by promissory notes or chattel paper (unless otherwise agreed to by the Bank in its sole and absolute discretion);

(b) any which is owed by employees or Affiliates of the Borrower;

(c) any which is more than sixty (60) days old as measured from due date;

(d) [Intentionally Omitted.];

(e) any which arises out of any sale made on a “bill and hold,” dating, bonded, or delayed shipping basis;

(f) any as to which the account debtor holds or is entitled to any claim, counterclaim, set off, or chargeback, or which constitutes retainage;

(g) any which is subject to a lien in favor of any person or entity other than the Bank;

(h) any amount which in the aggregate exceeds $300,000 which is owed by the United States federal government unless properly perfected with an assignment of claims in accordance with applicable law;

(i) any on which the Bank does not have a properly perfected first security interest;

(j) any which are due from any single account debtor if more than fifty percent (50%) of the aggregate amount of all Accounts Receivable owing from such account debtor is more than sixty (60) days old as measured from due date; and

(k) any which the Bank in its reasonable discretion considers unacceptable for any reason.

Events of Default shall have the meaning given such term in Section 9 of this Agreement.

Foreign Eligible Receivables means such of the Borrower’s Eligible Receivables which are owed by account debtors whose principal place of business is not in the United States.

Funding Date means the      day of July, 2008.

Generally Accepted Accounting Principles (“ GAAP ”) means generally accepted accounting principles in the United States of America, as from time to time in effect; provided, however, that for purposes of compliance with this Agreement and the related definitions, GAAP means such principles as in effect on the date of the preparation and delivery of the financial statements described in Section 6.1 and consistently followed, without giving effect to any subsequent changes other than changes consented to in writing by the Bank.

Guarantor means Cybex UK and any other Person who may become a Guarantor of the Borrower’s obligations to the Bank.

Guaranty shall have the meaning given such term in Section 3.9 of this Agreement.

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

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

Indebtedness means all obligations that in accordance with GAAP should be classified as liabilities upon a balance sheet or to which reference should be made by the footnotes thereto.

Indemnified Person shall have the meaning given that term in Section 10.6 of this Agreement.

Intangible Assets means the sum of Indebtedness due from Affiliates, Subsidiaries, officers, directors, employees or shareholders and related parties, plus assets that in accordance with GAAP are properly classifiable as intangible assets, including, but not limited to, goodwill, franchises, licenses, patents, trademarks, trade names and copyrights.

Interest Payment Date means: (a) as to any Prime Rate Loan, the first Business Day of the calendar month which follows the date such Prime Rate Loan, as applicable, was advanced by the Bank and on the like day of each calendar month thereafter; (b) as to any LIBOR Advantage Rate Loan, initially, the 2 ^nd day of August, 2008, and thereafter the numerically corresponding date of each month, provided that if a month does not contain a day that numerically corresponds to the date of the Interest Payment Date, the Interest Payment Day shall be last day of such month; and (c) as to any LIBOR Rate Loan with an Interest Period of three months or less, the last Business Day of such Interest Period, and as to any LIBOR Rate Loan having an Interest Period longer than three months, each Business Day which is three months (or a whole multiple thereof) after the first day of such Interest Period, and the last day of such Interest Period, provided that if a month does not contain a day that numerically corresponds to the date of the Interest Payment Date, the Interest Payment Date shall be the last Business Day of such month.

Interest Period means:

for any Prime Rate Loan, consecutive periods of one (1) day each;

for any LIBOR Advantage Rate Loan (Interest Periods for which may also be referred to as “ LA Interest Periods ”), initially, the period commencing as of the date of this Agreement (the “ Start Date ”) and ending on the numerically corresponding date one month later and thereafter each corresponding period ending on the day of such month that numerically corresponds to the Start Date, and if an Interest Period is to end in a month for which there is no day which numerically corresponds to the Start Date, the Interest Period will end on the last Business Day of such month; notwithstanding the date of commencement of any LA Interest Period, interest shall only begin to accrue as of the date the initial LIBOR Advantage Rate Loan was made;

for any LIBOR Rate Loan (Interest Periods for which may also be referred to as “ LIBOR Interest Periods ”),

(i) initially, the period beginning on (and including) the date on which such LIBOR Rate Loan is made or continued as, or converted into, a LIBOR Rate Loan pursuant to Section 3.1 and ending on (but excluding) the day which numerically corresponds to such date one, two, three, six or twelve months thereafter (or, if such month has no numerically corresponding day, on the last Business Day of such month), in each case as the Borrower may select in its notice pursuant to Section 3.1; and

(ii) thereafter, each period commencing on the last day of the next preceding Interest Period applicable to such LIBOR Rate Loan and ending one, two, three, six, nine or twelve months thereafter as selected by the Borrower by irrevocable notice to the Bank pursuant to Section 3.1;

provided, however, that:

(a) the Borrower shall not be permitted to select Interest Periods for Advances made pursuant to the Revolving Credit Facility to be in effect at any one time which have expiration dates occurring on more than three (3) different dates;

(b) Interest Periods commencing on the same date for LIBOR Rate Loans or LIBOR Advantage Rate Loans comprising part of the same Advance under this Agreement shall be of the same duration;

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

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

(e) no Interest Period may end later than the Revolving Credit Termination Date.

Internal Revenue Code means the Internal Revenue Code of 1986, as amended from time to time.

Inventory means all goods now owned or hereinafter acquired and intended for sale, including raw materials, work-in-process and finished goods, which would, in accordance with GAAP, be classified as inventory.

L/C Notice shall have the meaning assigned to it in Section 2.8(a).

Letters of Credit shall mean Letters of Credit issued for the account of the Borrower in accordance with the provisions of Section 2.8.

Leverage Ratio means, as of the applicable measurement date, the ratio of Total Funded Debt to EBITDA.

LIBOR Advantage Rate means relative to any LA Interest Period, the offered rate for delivery in two London Banking Days of deposits of U.S. Dollars which the British Bankers’ Association fixes as its LIBOR rate as of 11:00 a.m. London time on the day on which the LA Interest Period commences. If the first day of any LA Interest Period is not a day which is both a (i) Business Day, and (ii) a London Banking Day, the LIBOR Advantage Rate shall be determined in reference to the next preceding day which is both a Business Day and a London Banking Day. If for any reason the LIBOR Advantage Rate is unavailable and/or the Bank is unable to determine the LIBOR Advantage Rate for any LA Interest Period, the Bank may, at its discretion, either: (a) select a replacement index based on the authentic means of quotations, if any, of the interbank offered rate by first class banks in London or New York with comparable maturities or (b) accrue interest at a rate equal to the Bank’s Prime Rate as of the first day of any LA Interest Period for which the LIBOR Advantage Rate is unavailable or can not be determined.

LIBOR Advantage Rate Loan means any loan or Advance the rate of interest applicable to which is based upon the LIBOR Advantage Rate.

LIBOR Breakage Fee shall have the meaning given such term in Section 3.7(b) of this Agreement.

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

 

LIBOR Rate means relative to any Interest Period for LIBOR Rate Loans, the offered rate for deposits of U.S. Dollars in an amount approximately equal to the amount of the requested LIBOR Rate Loan for a term coextensive with the designated Interest Period which the British Bankers’ Association fixes as its LIBOR rate as of 11:00 a.m. London time on the day which is two (2) London Banking Days prior to the beginning of such Interest Period.

LIBOR Rate Loan means any loan or Advance the rate of interest applicable to which is based upon the LIBOR Rate.

LIBOR-Reference Banks Lending Rate means, relative to a LIBOR-Reference Banks Rate Loan for any Interest Period, a rate per annum determined pursuant to the following formula:

 

LIBOR-Reference Banks Loan means the Loan for any period(s) when the rate of interest applicable to the Loan is calculated by reference to the LIBOR-Reference Banks Rate.

LIBOR-Reference Banks Rate means relative to any Interest Period for LIBOR-Reference Banks Loans, the rate for which deposits in U.S. Dollars are offered by the Reference Banks to prime banks in the London interbank market in an amount approximately equal to the amount requested LIBOR-Reference Banks Loan at approximately 11:00 a.m., London time on the day that is two London Banking Days prior to the beginning of such Interest Period. The Bank will request the principal London office of each of the Reference Banks to provide a quotation of its rate. If at least two such quotations are provided, the rate for such date will be the arithmetic mean of the quotations. If fewer than two quotations are provided as requested, the rate for such date will be the arithmetic mean of the rates quoted by major banks in New York City selected by the Bank, at approximately 11:00 a.m. New York City time for loans in U.S. Dollars to leading European banks for such Interest Period and in an amount approximately equal to the amount requested LIBOR-Reference Banks Loan.

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

Loan or Loans means any Advances made pursuant to the Revolving Credit Facility.

Loan Request shall have the meaning given that term in Section 3.1(a) of this Agreement.

London Banking Day means a day on which dealings in US dollar deposits are transacted in the London interbank market.

Material Adverse Effect means any event or occurrence which has a material adverse effect on the business, assets, financial condition, operations or prospects of the Borrower and its Subsidiaries, taken as a whole.

Maximum Availability shall have the meaning given such term in Section 2.1(b) hereof.

Net Income means net income as determined in accordance with GAAP.

Note means the Revolving Credit Note.

Notice of Rate Selection shall have the meaning given that term in Section 3.1(b) of this Agreement.

Permitted Liens shall have the meaning given that term in Section 4.11 of this Agreement.

Person shall mean any individual, partnership, joint venture, firm, corporation, limited liability company, association, trust or other entity or enterprise (whether or not incorporated).

Prime Rate means a fluctuating rate of interest per annum equal to that rate per annum announced by RBS Citizens, National Association or any successor, from time to time, as being its corporate base rate, base rate or prime rate of interest, with a change in the Prime Rate to take effect simultaneously with each change in such announced rate. It is understood that such announced corporate base rate, base rate or prime rate is merely a reference rate, not necessarily the lowest rate, which serves as the basis upon which effective rates of interest are calculated for obligations making reference thereto.

Prime Rate Loan means any loan or Advance the rate of interest applicable to which is based upon the Prime Rate.

Reference Banks means four major banks in the London interbank market.

Release shall have the meaning given that term in Section 10.6 of this Agreement.

Related Agreements means the various documents, instruments and agreements delivered by the Borrower to the Bank in connection with the establishment of the Loan.

Revolving Credit Facility shall have the meaning given that term in Section 2.1(a) of this Agreement.

Revolving Credit Facility Limit shall mean Fifteen Million Dollars ($15,000,000.00).

Revolving Credit Loans means revolving credit Advances made or to be made by the Bank to the Borrower pursuant to Section 2 hereof.

Revolving Credit Note means the promissory Revolving Credit Note executed and delivered by the Borrower, which evidences the Revolving Credit Facility as provided in Section 2.1 of this Agreement.

Revolving Credit Termination Date means July 2, 2011.

Security Agreement shall have the meaning given such term in Section 3.9 of this Agreement.

Solvent means (a) the fair value of the property of the subject person or entity, exceeds its/their total liabilities (including probable liability in respect of contingent liabilities), (b) the present fair saleable value of the assets of such person or entity is not less than the amount that will be required to pay its probable liability on its debts as they become absolute and matured, (c) such person or entity does not intend to, and does not believe that it will, incur debts or liabilities beyond its ability to pay as such debts and liabilities mature, and (d) such person or entity is not engaged, and is not about to engage, in business or a transaction for which its property would constitute an unreasonably small capital.

Start Date shall have the meaning given such term in the text of the definition “Interest Period” in Section 1.1 of this Agreement.

Subordinated Debt means Indebtedness of Borrower subordinated in writing in a manner approved by the Bank to the prior payment, in full, of the Note.

Subsidiary means any corporation, person or entity, a majority of whose outstanding shares or other ownership interests having ordinary voting powers, shall at any time be owned or Controlled by the Borrower or one or more of its Subsidiaries.

Taxes means all taxes, charges, fees, duties, levies or other assessments, including income, gross receipts, net proceeds, ad valorem, turnover, real and personal property (tangible and intangible), sales, use, franchise, excise, value added, stamp, leasing, lease, user, transfer, fuel, excess profits, occupational, interest equalization, windfall profits, severance, employee’s income withholding, unemployment and social security taxes, which are imposed by any governmental authority, and such item shall include any interest, penalties or additions to tax attributable thereto, but excluding taxes imposed on or measured by the Bank’s net income or receipts.

Total Assets means total assets determined in accordance with GAAP.

Total Funded Debt shall mean the aggregate of all amounts outstanding under any Capital Leases, the Revolving Credit Facility, and any other bank debt.

Total Liabilities means total Indebtedness determined in accordance with GAAP.

Unfinanced Capital Expenditures means Capital Expenditures minus long term Indebtedness incurred in connection with such Capital Expenditures.

Uniform Commercial Code (“ UCC ”) means the Uniform Commercial Code as in effect in Massachusetts (Massachusetts General Laws, Chapter 106, §§1-101, et seq.).

1.2 Accounting Terms . All terms of an accounting character shall have the meanings assigned thereto by GAAP applied on a basis consistent with the financial statements referred to in Section 6.1 of this Agreement, modified to the extent, but only to the extent, that such meanings are specifically modified herein.

1.3 Rules of Interpretation . The following rules of interpretation shall govern this Agreement:

(i) A reference to any document or agreement shall include such document or agreement as amended, modified or supplemented from time to time in accordance with its terms and the terms of this Agreement.

(ii) The singular includes the plural and the plural includes the singular.

(iii) A reference to any law includes any amendment or modification to such law.

(iv) A reference to any person includes its permitted successors and permitted assigns.

(v) The words “include”, “includes” and “including” are not limiting.

(vi) All terms not specifically defined herein or by GAAP, which terms are defined in the Uniform Commercial Code as in effect in the Commonwealth of Massachusetts, have the meanings assigned to them therein.

(vii) The words “herein”, “hereof”, “hereunder” and words of like import shall refer to this Agreement as a whole and not to any particular section or subdivision of this Agreement.

SECTION 2. THE REVOLVING CREDIT FACILITY

2.1 The Revolving Credit Facility .

(a) Pursuant to the terms of this Agreement and upon the satisfaction of the conditions precedent and referred to in Section 5 hereof, the Bank hereby establishes a revolving line of credit (the “ Revolving Credit Facility ”) in the Borrower’s favor pursuant to which the Borrower may borrow from the Bank advances for working capital purposes, letters of credit and general corporate purposes as set forth herein not to exceed the Revolving Credit Facility Limit, less in each instance the aggregate amount of any Letters of Credit issued for the benefit of the Borrower. The Borrower may request Advances in an aggregate amount not to exceed the lesser of the Revolving Credit Facility Limit and the Maximum Availability (as defined below). All Loans made by the Bank under this Agreement, and all of the Borrower’s other liabilities to the Bank under or pursuant to this Agreement, are payable on the Revolving Credit Termination Date. If any Advances are made during the period from the date hereof through the Revolving Credit Termination Date, unless an Event of Default occurs, the Borrower may borrow, repay and reborrow in accordance with this Agreement. All loans made by the Bank under this Agreement, and all of the Borrower’s other liabilities to the Bank under or pursuant to this Agreement, are payable on the Revolving Credit Termination Date.

(b) As used herein, the term “ Maximum Availability ” refers at any time to the lesser of (i) or (ii), below:

 

(i)

up to (A) Fifteen Million Dollars ($15,000,000.00); minus (B) the sum of the aggregate amounts then undrawn on all outstanding letters of credit, acceptances, or any other accommodations issued or incurred by the Bank for the account and/or the benefit of the Borrower.

 

(ii)

up to (A) eighty five percent (85%) of Domestic Eligible Receivables; plus (B) fifty percent (50%) of Foreign Eligible Receivables; plus (C) fifty percent (50%) of the value of Borrower’s Eligible Inventory; minus (D) the sum of the aggregate amounts then undrawn on all outstanding letters of credit, acceptances, or any other accommodations issued or incurred by the Bank for the account and/or the benefit of the Borrower.

(c) The Revolving Credit Facility is established for the purpose of financing the Borrower’s working capital, letters of credit and general business needs, and Advances under the Revolving Credit Facility shall be evidenced by the Revolving Credit Note, which shall be in substantially the form of Exhibit A annexed hereto.

2.2 Advances . The Revolving Credit Facility shall be evidenced by, among other things, the Revolving Credit Note, and interest on each Advance made pursuant to the Revolving Credit Facility shall be paid in arrears. Interest on each Advance made pursuant to the Revolving Credit Facility shall accrue as set forth in Section 2.3 below and shall be paid in arrears. All unpaid principal amounts due under all Advances, plus accrued interest and costs thereon, shall be paid in full and satisfied on the Revolving Credit Termination Date. Requests for Advances shall be made pursuant to Section 3.1 of this Agreement.

2.3 Interest on Advances . Except as otherwise provided in Section 3.4, the outstanding principal balance of each Advance made pursuant to the Revolving Credit Facility shall bear interest based upon either the Prime Rate, the LIBOR Rate or the LIBOR Advantage Rate at a per annum rate during each Interest Period at the rate selected by the Borrower from the interest rate options provided below:

(a) To the extent that all or any portion of an Advance bears interest during an Interest Period by reference to the Prime Rate, as may be selected by the Borrower in accordance with Section 3.1 hereof, such Advance shall bear interest during such Interest Period at a per annum rate equal to the Prime Rate less the Applicable Margin.

(b) To the extent that all or any portion of an Advance bears interest during a LIBOR Interest Period by reference to the LIBOR Rate, as may be selected by the Borrower in accordance with Section 3.1 hereof, such Advance shall bear interest during such LIBOR Interest Period at a per annum rate equal to the aggregate of the LIBOR Rate as then in effect, plus the Applicable Margin.

(c) To the extent that all or any portion of an Advance bears interest during an LA Interest Period by reference to the LIBOR Advantage Rate, as may be selected by the Borrower in accordance with Section 3.1 hereof, such Advance shall bear interest during such LA Interest Period at a per annum rate equal to the aggregate of the LIBOR Advantage Rate as then in effect, plus the Applicable Margin.

2.4 Payments of Principal and Interest . Interest accruing on Advances made under the Revolving Credit Note shall be payable in arrears on each Interest Payment Date. If not sooner paid, all principal and all accrued and unpaid interest shall be due and payable on the Revolving Credit Termination Date.

2.5 Mandatory Prepayment . If, at any time, the aggregate principal amount of all Advances made and outstanding under the Revolving Credit Facility shall exceed the Maximum Availability, the Borrower shall immediately prepay so much of the outstanding principal balance, together with accrued interest on the portion of principal so prepaid, as shall be necessary in order that the unpaid principal balance of all Revolving Credit Loans outstanding under the Revolving Credit Facility, after giving effect to such prepayments, shall not be in excess of the Maximum Availability. Any such prepayment will, at the option of the Bank, be applied first to the payment of all costs and expenses incurred by the Bank and arising out of this Agreement, the Revolving Credit Note or any Related Agreement and which has not been paid or reimbursed to the Bank, second to accrued interest to the date of the

prepayment, and third to the outstanding principal under the Revolving Credit Facility. The making of loans, Advances and credits by the Bank in excess of availability is for the benefit of the Borrower and does not affect the obligations of the Borrower hereunder. The making of any such loans, Advances, and credits in excess of the Revolving Credit Facility Limit, on any one occasion shall not obligate the Bank to make any such loans, credits, or Advances on any other occasion nor to permit such loans, credits, or Advances to remain outstanding.

2.6 Advances in Excess of Availability . The making of loans, advances and credits by the Bank in excess of availability is for the benefit of the Borrower and does not affect the obligations of the Borrower hereunder; such loans constitute Indebtedness. The making of any such loans, advances, and credits in excess of the Maximum Availability on any one occasion shall not obligate the Bank to make any such loans, credits, or advances on any other occasion nor to permit such loans, credits, or advances to remain outstanding.

2.7 Risks of Value of Accounts and of Inventory . The Bank’s reference to a given asset of the Borrower for monitoring concerning the Bank’s making of loans, credits, and advances under the Revolving Credit Facility shall not be deemed a determination by the Bank relative to the actual value of the asset in question. All risks concerning the creditworthiness of all Accounts and Inventory of the Borrower are and remain upon the Borrower. Reference by the Bank to a particular Account for monitoring purposes shall not obligate the Bank to rely upon any other Accounts owed by the same account debtor to be acceptable for borrowing nor to continue to rely upon that Account.

2.8 Letters of Credit .

(a) Subject to the terms of this Agreement, so long as there has not theretofore occurred and be continuing an Event of Default, the Borrower may request that the Bank issue Letters of Credit on the Borrower’s account for purposes reasonably acceptable to the Bank, provided that the sum of the outstanding Letters of Credit and the aggregate principal amount of all Advances outstanding under the Revolving Credit Facility shall not exceed the Maximum Availability. Any and all Letters of Credit issued by the Bank in favor of the Borrower and outstanding on the date of this Agreement shall be deemed to be Letters of Credit issued and outstanding under this Agreement. The Borrower may request that the Bank issue a Letter of Credit by written notice (the “ L/C Notice ”) given to the Bank not less than two (2) Business Days prior to the proposed date of issuance of such Letter of Credit. The L/C Notice shall specify the proposed date of issuance and the beneficiary and amount of such Letter of Credit, and shall be accompanied by a letter of credit application completed to the satisfaction of, and with such amendments and modifications as may be deemed necessary by, the Bank.

(b) The Borrower hereby agrees to reimburse the Bank for all draws made under such Letters of Credit, plus interest and costs including attorneys’ fees. Each Letter of Credit request shall be accompanied by an application completed by the Borrower to the satisfaction of the Bank whereby the Borrower will agree, among other things, to reimburse the Bank for any draws made with respect to such Letters of Credit, plus all interest and costs. Any unpaid reimbursement obligations may, at the Bank’s discretion, be repaid by an Advance under the Revolving Credit Facility hereunder.

(c) Each such Letter of Credit issued by the Bank shall expire no later than thirty (30) days prior to the Revolving Credit Termination Date and shall be subject to the Uniform Customs Practice for Documentary Credits ICC Pub. No. 500 and International Standby Practices (ISP 98) promulgated by the Institute of International Banking Law & Practice. Upon the occurrence and continuance of an Event of Default or in the event that any Letters of Credit are outstanding within thirty (30) days of the Revolving Credit Termination Date, the Borrower shall, at the Bank’s request, provide the Bank with cash collateral to secure the Borrower’s reimbursement obligations in an amount equal to the face amount of all such outstanding Letters of Credit, plus ten percent (10.0%).

(d) In connection with the issuance of any Letter of Credit, the Borrower shall pay to the Bank at the time of issuance, in full and for the entire term of the Letter of Credit, a “ Letter of Credit Fee ” equal to one percent (1.00%) of the maximum drawing amount of such Letter of Credit, as well as all other normal and customary fees charged by Bank generally in connection with the issuance, amendment, extension and transfer of letters of credit. The Borrower hereby authorizes and directs the Bank, in Bank’s sole discretion (provided, however, Bank shall have no obligation to do so) to pay all such fees and costs as the same become due and payable and to treat the same as an Advance pursuant to this Agreement.

(e) The Bank shall be entitled to rely on any letter of credit, draft, writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex, or teletype message, statement or order or other document believed by it to be genuine and correct and to have been signed, sent or made by the proper person or persons and upon the advice and statements of legal counsel, independent accountants and other experts as selected by the Bank. It is understood and agreed that the Bank shall not have any liability for, and that the Borrower assume all responsibility for: (a) the genuineness of any signature; (b) the form, correctness, validity, sufficiency, genuineness, falsification and legal effect of any draft, certification or other document required by a Letter of Credit or the authority of the person signing the same; (c) the failure of any instrument to bear any reference or adequate reference to a Letter of Credit or the failure of any persons to note the amount of any instrument on the reverse of a Letter of Credit or to surrender a Letter of Credit or otherwise to comply with the terms and conditions of a Letter of Credit; (d) the good faith or acts of any person other than the Bank and its agents and employees; (e) the existence, form, sufficiency or breach of or default under any agreement or instrument of any nature whatsoever; (f) any delay in giving or failure to give any notice, demand or protest; and (g) any error, omission, delay in or non-delivery of any notice or other communication, however sent. The determination as to whether the required documents are presented prior to the expiration of a Letter of Credit and whether such other documents are in proper and sufficient form for compliance with a Letter of Credit shall be made by the Bank in its sole discretion, which determination shall be conclusive and binding upon the Borrower. It is agreed that the Bank may honor, as complying with the terms of the Letters of Credit and this Agreement, any documents otherwise in order and signed or issued by the beneficiary thereof. Any action, inaction or omission on the part of the Bank under or in connection with the Letters of Credit or any related instruments or documents, if in good faith and in conformity with such laws, regulations or commercial or banking customs as the Bank may reasonably deem to be applicable, shall be binding upon the Borrower, shall not place the Bank under any liability to the Borrower, and shall not affect, impair or prevent the vesting of any of the Bank’s rights or powers hereunder or the Borrower’ obligation to make full reimbursement. The Borrower’s

obligations for all Letters of Credit issued on its account shall be absolute and unconditional under any and all circumstances irrespective of the occurrence of any Event of Default or any condition precedent whatsoever or any setoff, counterclaim or defense to payment which the Borrower may have or have had against the Bank or any beneficiary under a Letter of Credit issued by the Bank on the Borrower’s account. The Borrower further agrees that any action taken or omitted by the Bank under or in connection with any letter of credit issued on account of the Borrower and any related drafts and documents shall, absent the Bank’s gross negligence or willful misconduct, be binding upon the Borrower and shall not result in any liability on the part of the Bank.

2.9 Unused Fee . The Borrower shall pay to the Bank a fee (the “ Unused Fee ”) on all unused amounts on the Revolving Credit Facility. The Unused Fee shall be computed by multiplying (x) the Applicable Margin (determined as set forth for computation of the Unused Fee set forth in Section 1.1 hereof) by (y) the Revolving Credit Facility Limit, less the aggregate of the: (i) average daily balance of Advances outstanding on the Revolving Credit Facility during the preceding quarter, plus (ii) the average of all outstanding Letters of Credit for such quarter. The Unused Fee shall be payable quarterly in arrears commencing on October 1, 2008 and on the first day of each successive quarter thereafter and upon the Revolving Credit Termination Date, with the Unused Fee being in consideration of the Advances made hereunder and being deemed earned as incurred.

2.10 Master SWAP Agreements . At any time and from time to time after the date of this Agreement, absent the occurrence of an Event of Default, the Borrower may enter into one or more Hedging Contracts and incur Hedging Obligations by, in each such instance, executing and delivering to the Bank an International SWAP Dealers Association, Inc. Master Agreement (each, a “ Master Swap Agreement ”), thereby fixing the interest rate payable on portions the proceeds of the Revolving Credit Facility. Provided that a Master Swap Agreement contains language permitting termination of the same by either party, the maturity date of such Master Swap Agreement may be later than the Revolving Credit Termination Date, otherwise, such Master Swap Agreement must mature on or before the Revolving Credit Termination Date.

SECTION 3. GENERAL PROVISIONS RELATING TO THE LOANS

3.1 Loan Requests, Selection of Interest Rates, and Rate Conversions .

(a) The Borrower shall give the Bank written notice of a request for an Advance (each a “ Loan Request ”) under the Revolving Credit Facility on any Business Day, such notice being in the form of Exhibit B annexed hereto (or telephonic notice immediately confirmed in a writing in the form of Exhibit B hereto). The Loan Request for each Advance requested hereunder shall be given (a) no later than 10:00 a.m. (Boston time) on the proposed Advance date for any Prime Rate Loan, and (b) no later than 10:00 a.m. (New York time) at least two (2) Business Days prior to the proposed Advance (nor more than five (5) Business Days before the proposed Advance) for any LIBOR Rate Loan or LIBOR Advantage Rate Loan. Each such Loan Request shall specify (i) the principal amount of the Advance requested, (ii) the proposed interest rate applicable to such Advance, and (iii) if any such Advance is a LIBOR Rate Loan, the LIBOR Interest Period applicable for such Advance. LIBOR Rate Loans shall be made in a minimum amount of $100,000.00 and integral multiples of $10,000.00. Each Loan Request shall be irrevocable and binding on the Borrower and shall obligate the Borrower to accept the Advance requested from the Bank, on the terms and subject to the conditions of this

Agreement. Each Advance shall be made available to the Borrower no later than 11:00 a.m. (Boston time) on the first day of the applicable Interest Period by deposit to the account of the Borrower as shall have been specified in its Loan Request. If any Advance is made, the Bank may, at its option, record on the books and records of the Bank or endorse on a schedule attached to the Revolving Credit Note, an appropriate notation evidencing any Advance, each repayment on account of the principal thereof and the amount of interest paid; and the Borrower authorizes the Bank to maintain such records or make such notations and agrees that the amount shown on the books and records or on said schedule, as applicable, as outstanding from time to time shall constitute the amount owing to the Bank pursuant to this Agreement, absent manifest error. In the event the amount shown on the schedule conflicts with the amount as due pursuant to the books and records of the Bank, the books and records of the Bank shall control the disposition of the conflict.

(b) In the case of an Advance of any Loan already made, the Borrower shall give the Bank written notice of an interest rate selection (each a “ Notice of Rate Selection ”) in the form of Exhibit C annexed hereto) (or telephonic notice immediately confirmed in a writing in the form of Exhibit C annexed hereto) as follows: (i) for any Prime Rate Loan, no later than 10:00 a.m. (Boston time) on the day prior to the last day of the Interest Period; and (ii) for any LIBOR Rate Loan or LIBOR Advantage Rate Loan, no later than 10:00 a.m. (New York time) two (2) Business Days prior to the last day of the Interest Period. Each such notice shall specify the duration of the selected Interest Period. Each interest rate selection shall be irrevocable and binding on the Borrower.

(c) LIBOR Advantage Rate Loans and LIBOR Rate Loans shall mature and become payable in full on the last day of the Interest Period relating to such LIBOR Advantage Rate Loans or LIBOR Rate Loans, as applicable. Upon maturity, a LIBOR Advantage Rate Loan and/or a LIBOR Rate Loan may be continued for an additional Interest Period or may be converted to a Prime Rate Loan or other interest rate as may be selected by the Borrower from the options and in accordance with the terms of this Agreement.

(d) By delivering a continuation/conversion notice to the Bank on or before 10:00 a.m., New York time, on a Business Day, the Borrower may from time to time irrevocably elect, on not less than two (2) nor more than five (5) Business Days’ notice, that all, or any portion of any LIBOR Advantage Rate Loan or any LIBOR Rate Loan, in an aggregate minimum amount of $100,000.00 and integral multiples of $10,000.00, be converted on the last day of an Interest Period into a LIBOR Advantage Rate Loan or LIBOR Rate Loan with a different Interest Period, or converted to a Prime Rate Loan, or continued on the last day of an Interest Period as a LIBOR Advantage Rate Loan or LIBOR Rate Loan with a similar Interest Period, provided, however , that no portion of the outstanding principal amount of any LIBOR Rate Loans may be converted to LIBOR Rate Loans of a different duration if such LIBOR Rate Loans relate to any Hedging Obligations or when any default or Event of Default has occurred and is continuing, and further provided that all accrued interest on the principal amount of any LIBOR Advantage Rate Loan to be converted hereunder shall be paid in full. In the absence of delivery of a continuation/conversion notice with respect to any LIBOR Advantage Rate Loans or LIBOR Rate Loan at least two (2) Business Days before the last day of the then current Interest Period with respect thereto, such LIBOR Advantage Rate Loan or LIBOR Rate Loan shall, on such last day, automatically convert to a loan that accrues interest by reference to the Prime Rate.

(e) Without in any way limiting the Borrower’s obligation to confirm in writing any telephonic notice, the Bank may act without liability upon the basis of telephonic notice believed by the Bank in good faith to be from the Borrower prior to receipt of written confirmation. In each case, the Borrower waives the right to dispute the Bank’s record of the terms of such telephonic notice of rate selection in the absence of manifest error.

3.2 Prepayments .

(a) The Borrower may prepay any Prime Rate Loan or any LIBOR Advantage Rate Loan , in whole or in part, at any time, without penalty or premium. LIBOR Rate Loans may be prepaid subject to the terms and conditions of Section 3.7 below.

(b) After the occurrence of an Event of Default, any fees with respect to such Loan(s) shall become due and payable in the same manner as though the Borrower had exercised such right of prepayment in connection with Section 3.2 of this Agreement. Any prepayment hereunder will be applied first to the payment of all accrued interest to the date of the prepayment and the remainder to the outstanding principal. Further, in the case of any prepayments of a Loan which do not simply represent the conversion of a LIBOR Rate Loan or LIBOR Advantage Rate Loan to a Prime Rate Loan, any amounts applied against principal shall be applied against scheduled installments of principal due thereon in the inverse order of maturity.

3.3 Late Charge . The Bank may collect a late charge not to exceed five percent (5.0%) of any installment of principal or interest on any Loan, or of any other amount due to the Bank which is not paid or reimbursed by the Borrower within ten (10) days of the due date thereof to defray the cost and extra expense involved in handling such delinquent payment and the increased risk of non-collection. In all events, the minimum late charge shall be $35.00.

3.4 Default Interest Rate . In the event the payment of interest is not made within ten (10) days of any Interest Payment Date, or in the event all principal amounts due under the Revolving Credit Note have not been paid within ten (10) days of when due (including, without limitation, the Revolving Credit Termination Date) the unpaid principal shall bear interest at a rate which is equal to two (2) percentage points per annum greater than the rate which would otherwise be in effect (the “ Default Rate ”). If, at any time, the rate of interest, together with all amounts which constitute interest and which are reserved, charged or taken by Bank as compensation for fees, services or expenses incidental to the making, negotiating or collection of any advance evidenced hereby, shall be deemed by any competent court of law, governmental agency or tribunal to exceed the maximum rate of interest permitted to be