TD BANK REVOLVING CREDIT AND TERM LOAN AGREEMENT

This REVOLVING CREDIT AND TERM LOAN AGREEMENT is made as of the 19th day of December, 2008, by and among CYALUME TECHNOLOGIES, INC., a Delaware corporation (the “Borrower”), CYALUME TECHNOLOGIES HOLDINGS, INC., formerly known as VECTOR INTERSECT SECURITY ACQUISITION CORP., a Delaware corporation (the “Holding Company”), the Lenders and the other financial institutions or other entities from time to time parties hereto identified on the signature pages hereto and TD Bank, N.A., a national banking association, as Agent and as Lender.

Section 1.1          Definitions.   The following terms shall have the meanings set forth in this Article 1 or elsewhere in the provisions of this Credit Agreement referred to below:

Account(s) .  As applied to any Person all now owned or hereafter acquired right, title, and interest with respect to “accounts” (as such term is defined from time to time in the Uniform Commercial Code), and any and all supporting obligations in respect thereof.

Acquired EBITDA .  With respect to the twelve (12) month period following the closing of a Permitted Acquisition, the maximum, stipulated, pro forma amount approved by the Agent and the Lenders which can be added to actual trailing twelve (12) month EBITDA.

Acquisition .  The acquisition by a Subsidiary of the Holding Company on the Acquisition Closing Date of substantially all of the assets of the Borrower.

Acquisition Closing Date .  The date on which the conditions set forth in the Purchase Agreement have been satisfied and the Acquisition has been consummated.

Acquisition Documents .  Collectively, the Purchase Agreement and all other agreements and documents required to be entered into or delivered pursuant thereto or in connection with the Acquisition, each in the form delivered to the Agent on the Acquisition Closing Date and as amended as permitted hereunder.

Adjusted EBITDA .  With respect to any period, an amount equal to EBITDA for such period plus to the extent accounted for in EBITDA and without duplication, the sum of (i) Management Fees (not to exceed $500,000 per fiscal year), (ii) Acquired EBITDA and (iii) legal and professional fees related to Permitted Acquisitions to the extent included in Consolidated Net Income.  For purposes of calculating trailing twelve (12) month Adjusted EBITDA for a portion of the first twelve months following Closing, the following shall apply:  $1,193,000 of restructuring expenses for the quarter ending March 31, 2008 are added, $700,000 of the Holding Company transaction expenses, and $443,000 of one time Acquisition expenses are added, and $2,751,000 of gains on settlement of lawsuit are subtracted.

Affiliate .  As applied to any Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common control with, such Person.  For purposes of this definition, “control” means the possession, directly or indirectly, of the power to direct the management and policies of a Person, whether through the ownership of Shares, by contract, or otherwise; provided that, for purposes of Section 11.11 hereof:  (a) any Person which owns directly or indirectly 10% or more of the securities having ordinary voting power for the election of directors or other members of the governing body of a Person or 10% or more of the partnership or other ownership interests of a Person (other than as a limited partner of such Person) shall be deemed to control such Person; (b) each director (or comparable manager) of a Person shall be deemed to be an Affiliate of such Person; and (c) each partnership or joint venture in which a Person is a partner or joint venturer shall be deemed to be an Affiliate of such Person.

Agent .  TD Bank, N.A., solely in its capacity as agent and collateral agent for the Lenders hereunder and any other holder of Obligations, and any successor thereto.

Agent Approved Subordination Agreement .  A subordination agreement in form and substance satisfactory to the Agent, in its sole discretion, which contains such payment, remedy blockages and standstill provisions and other such terms as the Agent may require or may deem acceptable.

Agent’s Head Office .  The Agent’s office located at 370 Main Street, Worcester, MA 01608 or such other location as the Agent may designate from time to time.

Agent’s Special Counsel .  Choate, Hall & Stewart LLP or such other counsel as may be approved by the Agent.

Anti-Terrorism Laws .  Any Laws relating to terrorism or money laundering, including Executive Order No. 13224 (effective September 24, 2001), the USA PATRIOT Act, the Laws comprising or implementing the Bank Secrecy Act, and the Laws administered by OFAC.

Applicable Margin .  For the period commencing on the Closing Date and ending on the fifth (5 ^th ) Business Day after the Agent’s receipt, pursuant to Section 10.4, of the officer’s certificate for the Borrower’s fiscal quarter ending March 31, 2009, a per annum percentage equal to that specified for Level II below, and thereafter as of any date, so long as no Event of Default exists and subject to the terms of this definition, the applicable per annum percentage set forth below; provided , that if any Event of Default exists the applicable per annum percentage shall be that specified for Level II.

Any change in the Applicable Margin required pursuant to the foregoing shall become effective on the fifth (5 ^th ) Business Day after the Agent receives the Borrower’s officer’s certificate under Section 10.4 for the Borrower’s fiscal quarter or year-end, as the case may be, in question; provided that interest rate reductions shall become final only on the basis of Borrower’s annual audited financial statements and (a) in the event that such annual audited financial statements establish that the Borrower was not entitled to a rate reduction which was previously granted, the Borrower shall, upon written demand by the Agent, repay to the Agent an amount equal to the excess of (i) interest at the rate which should have been charged based on such annual audited financial statement(s) to (ii) the rate actually charged on the basis of the Borrower’s quarterly financial statement(s) and (b) in the event that such annual audited financial statements establish the Borrower was entitled to a rate reduction which was previously not granted, the Agent shall, upon written demand by the Borrower, apply the excess of (i) the rate actually charged on the basis of the Borrower’s quarterly financial statement(s) to (ii) interest at the rate which should have been charged based on such annual audited financial statement(s), to the payment of principal outstanding under the Term A Note and if no amounts are outstanding thereunder, under the Term B Note, in inverse order of maturity without the payment of any premium of penalty and if not amounts are outstanding thereunder to the payments of the Revolving Credit Loans and if no Revolving Credit Loans are outstanding such excess shall be remitted to the Borrower; provided , that in the event of a dispute as to the appropriate fiscal quarter as to which any adjustment should be allocated, the decision of the independent accountants of the Borrower shall be made in accordance with GAAP and shall be binding upon the Agent and the Borrower absent manifest error; and, provided further , that in the event that the Borrower fails to provide any financial statements or officer’s certificate on a timely basis in accordance with Section 10.4, any interest rate increase payable as a result thereof shall be retroactively effective to the date on which the financial statements or officer’s certificate, as the case may be, should have been received by the Agent in accordance with Section 10.4 and the Borrower shall pay any amount due as a result thereof upon written demand from the Agent .  The Agent shall send the Borrower a written acknowledgement of each change in the Applicable Margin in accordance with the Agent’s customary procedures as in effect from time to time, but the failure to send such acknowledgement shall have no effect on the effectiveness or applicability of the foregoing provisions of this definition or the Borrower’s obligations with respect to payment and calculation of interest on the Loans.

Availability .  As of any date of determination, if such date is a Business Day, and determined at the close of business on the immediately preceding Business Day, if such date of determination is not a Business Day, the amount that the Borrower is entitled to borrow as Revolving Credit Loans under Section 2.1, after giving effect to all then outstanding Obligations  and all sublimits applicable hereunder.

Balance Sheet Date .  December 31, 2007.

Bankruptcy Code .  The provisions of Title 11 of the United States Code, 11 U.S.C., §§101 et seq., as now and hereafter in effect, any successors to such statute and any other applicable insolvency or similar law of any jurisdiction including, without limitation, any law of any jurisdiction permitting a debtor to obtain a stay or a compromise of the claims of its creditors against it.

Base Rate .  The term “Base Rate” shall mean the sum of (x) the greater of: (A) variable annual rate of interest designated from time to time by the Wall Street Journal in the so-called “Money Rates Section” as being the “Prime Rate” of interest or, if the “Prime Rate” ceases to be so published, the rate which is in replacement thereof or substitution therefor, such interest rate to be adjusted on the effective date of any change thereof and (B) three percent (3%) per annum, plus (y) three percent (3%).  The Agent shall not be required to notify the Borrower of adjustments in said interest rate.  The Base Rate is only available for Revolving Credit Loans.

Base Rate Loan(s) .  Any Revolving Credit Loans bearing interest determined with reference to the Base Rate.

Blocked Person .  Any Person:  (i) listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224; (ii) a Person owned or controlled by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224; (iii) a Person with which any Lender is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law; (iv) a Person that commits, threatens or conspires to commit or supports “terrorism” as defined in Executive Order No. 13224; or (v) a Person that is named a “specially designated national” or “blocked person” on the most current list published by OFAC or other similar list.

Borrower .  See the preamble hereto.

Borrower’s Key Officers .  Derek Dunaway, Thomas McCarthy, Earl Cranor and Michael Bielonko.

Borrowing Base .  At the relevant time of reference thereto, an amount determined by the Agent by reference to the most recent Borrowing Base Report delivered to the Agent pursuant to §10.4(h), as adjusted pursuant to the provisions below, which is equal to the sum of:  80% of Eligible Accounts Receivable plus the lesser of (i) $2,500,000 or (ii) 50% of Eligible Raw Material  and Finished Goods Inventory.

The Required Lenders may, in their reasonable discretion, from time to time, in accordance with §2.7:  (x) reduce the lending formula with respect to any Eligible Accounts Receivable to the extent that the Required Lenders reasonably determine that:  (i) the dilution with respect of the Accounts Receivable for any period has increased in any material respect or may be reasonably anticipated to increase in any material respect above historical levels, or (ii) the general creditworthiness of account debtors or other obligors of the Borrower has declined materially or (y) reduce the lending formula with respect to any Eligible Raw Material and Finished Goods Inventory to the extent that the Required Lenders determine that:  (i) the number of days of the turnover of the inventory owned by Borrower for any period has changed in any material adverse respect, (ii) the liquidation value of any Eligible Raw Material and Finished Goods Inventory, or any category thereof, has materially decreased, or (iii) the nature and quality of the inventory has changed materially and adversely.  In determining whether to reduce the lending formula(s), the Required Lenders may consider events, conditions, contingencies or risks which are also considered in determining Eligible Accounts Receivable and Eligible Raw Material and Finished Goods Inventory.

Borrowing Base Report .  A Borrowing Base Report signed by the Chief Financial Officer and in substantially the form of Exhibit C hereto.

Business Day .  Any day (other than Saturday, Sunday or holiday) on which the Agent is open and conducting its customary banking transactions in The Commonwealth of Massachusetts.

Capital Assets .  Fixed assets, both tangible (such as land, buildings, fixtures, machinery and equipment) and intangible (such as patents, copyrights, trademarks, franchises and goodwill).

Capital Expenditures .  For any date of determination, the aggregate amount of payments made by the Borrower or any of its Subsidiaries for the rental, lease, purchase, construction, or use of any property, the value or cost of which under GAAP would appear on the Borrower’s balance sheet in the category of property, plant or equipment or intangibles, minus the sum of:  (i) expenditures made in Permitted Acquisitions, including, without limitation, reasonable capitalized transaction costs related thereto and approved by the Required Lenders and (ii) capitalized transaction costs related to the obtaining and closing of the Loans approved by the Required Lenders.

Capitalization Documents .  The Charter Documents of the Holding Company.

Capitalized Lease(s) .  Leases under which the Borrower or any of its Subsidiaries is the lessee or obligor, the discounted future rental payment obligations under which are required to be capitalized on the balance sheet of the lessee or obligor in accordance with generally accepted accounting principles.

CERCLA .  See Section 9.18(a).

Change of Control .  The occurrence of any one of the following events:  (i) the common stock of Holding Company is no longer publicly traded or held under the Securities and Exchange Act of 1934; (ii) the Holding Company shall cease to own 100% of the Shares of the Borrower; (iii) there is a sale of all or substantially all of the assets of the Borrower or (iv) any “person” or “group” (as such terms are used in Sections 15(d) and 14(d) of the Securities Exchange Act of 1934 becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire (such right, an “option right” whether such right is exercisable immediately or only after the passage of time)) directly or indirectly, of 40% or more of the equity interests of the Holding Company on a fully diluted basis, provided that notwithstanding the foregoing, until March 19, 2009, GMS Acquisition Partners Holdings LLC, a Delaware limited liability company, may hold up to fifty-five percent (55%) of the equity interests of the Holding Company on a fully-diluted basis.

Charter Documents .  With respect to a Person which is a corporation, its Certificate of Incorporation as amended with the consent of the Required Lenders and in effect from time to time.

Chattel Paper .  All now owned or hereafter acquired right, title and interest with respect to “chattel paper” including, without limitation, “tangible chattel paper” and “electronic chattel paper”, as such terms are defined from time to time in the UCC and any and all supporting obligations in respect thereof.

Closing Date .  The first date on which the conditions set forth in Article 13 have been satisfied and any Revolving Credit Loans and/or any Term Loans are to be made or any Letter of Credit issued or Foreign Exchange Contract entered into.

Code .  The Internal Revenue Code of 1986, as amended.

Collateral .  All of the property, rights and interests of the Borrower and each Guarantor that are or are intended to be subject to the security interests and mortgages created by the Security Documents.

Collateral Access Agreements .   A waiver or consent in form and substance satisfactory to the Agent executed by any lessor of Real Estate leased by Borrower or any of its Subsidiaries at which Real Estate any Collateral is located.

Collateral Assignment of Acquisition Documents .  The Collateral Assignment of Acquisition Documents dated or to be dated on or prior to the Closing Date, between the Borrower and the Agent, in form and substance satisfactory to the Agent, as may be amended, modified or supplemented from time to time.

Commitment Fee .  See Section 2.2.

Consolidated or consolidated or Consolidating or consolidating .  With reference to any term defined herein, shall mean that term as applied to the financial statements of the Holding Company and its Subsidiaries, consolidated or consolidating in accordance with generally accepted accounting principles.

Consolidated Net Income (or Deficit) .  For any period the gross revenues of the Borrower and its Subsidiaries on a consolidated basis during such period, less all expenses and other proper charges (including taxes on income), all determined in accordance with generally accepted accounting principles, but in any event, excluding:  (i) any gain arising from any write down or write-up of assets, except to the extent inclusion thereof shall be approved in writing by the Required Lenders; (ii) earnings of any Subsidiary accrued prior to the date it became a Subsidiary; (iii) the net earnings of any business entity (other than a Subsidiary) in which the Borrower or any Subsidiary has an ownership interest, except to the extent such net earnings shall have actually been received by the Borrower or such Subsidiary in the form of cash distributions; (iv) the proceeds of any life insurance policy; (v) any deferred or other credit representing any excess of the equity of any Subsidiary at the date of acquisition thereof over the amount invested in such Subsidiary; and (vi) any reversal of any contingency reserve, except to the extent that provision for such contingency reserve shall be made from income arising during such period.

Consolidated Total Debt Service .  For any period, the sum of:  (i) Consolidated Total Interest Expense but excluding deferred interest not paid in the applicable period plus (ii) all scheduled installments of principal (which shall not include the annual mandatory prepayment of Excess Cash Flow required in Section 5.3(e)) or other like sums payable during such period on all Indebtedness of the Borrower and its Subsidiaries outstanding during all or any part of such period.

Consolidated Total Interest Expense .  For any period, the aggregate amount of cash interest required to be paid or accrued by the Borrower and its Subsidiaries during such period on all Indebtedness of the Borrower and its Subsidiaries outstanding during all or any part of such period, whether such interest was or is required to be reflected as an item of expense or capitalized and including commitment fees, agency fees, facility fees, and similar recurring fees in connection with the borrowing of money.

Credit Agreement .  This Revolving Credit and Term Loan Agreement, including the Schedules and Exhibits hereto, as the same may be amended, modified or supplemented from time to time.

CTSA .  Cyalume Technologies, S.A., a corporation organized under the laws of France and which is a Subsidiary of the Borrower.

Current Assets .   As of any date of determination, all assets of the Holding Company and its Subsidiaries which would, in accordance with generally accepted accounting principles, be classified as current assets at such date.

Current Liabilities .  As of any date of determination, all liabilities of the Holding Company and its Subsidiaries which would, in accordance with generally accepted accounting principles, be classified as current liabilities at such date but excluding therefrom the current maturities of long term debt but including the outstanding Revolving Credit Loans.

Current Ratio .   As of any date of determination, the ratio of:  (i) Current Assets to (ii) Current Liabilities.

Default .  See Section 15.1.

Defaulting Lender .  Any Lender that fails to make any Revolving Credit Loan (or other extension of credit) that it is required to make hereunder on the date that it is required to do so hereunder.

Defaulting Lender Rate . The interest rate then applicable to Revolving Credit Loans that are either LIBOR Rate Loans (inclusive of the LIBOR Rate Margin applicable thereto) or Base Rate Loans plus two percent per annum.

Default Rate .  See Section 6.8.

Derivative Contract .  A forward contract, futures contract, swap, option or other financing agreement or arrangement (including, without limitation, caps, floors, collars and similar agreements), the value of which is dependent upon interest rates, currency exchange rates, commodities or other indices and the ISDA Master Agreement dated as of December 19, 2008 by and between TD Bank and the Borrower and all schedules thereto.

Derivative Termination Value .   In respect of any one or more Derivative Contracts, after taking into account the effect of any legally enforceable netting arrangement relating to such Derivative Contracts, for any date of determination, such calculation shall be made as if such Derivative Contracts have been closed out on such date and termination value(s) determined in accordance therewith as if terminated on such date.

Distribution .  As to any Person, any of the following:  (i) the declaration or payment of any dividend on or in respect of any Shares of the Borrower, (ii) the purchase, redemption, or other retirement of any Shares of the Borrower, directly or indirectly, through a Subsidiary of the Borrower or otherwise, (iii) the return of capital by the Borrower to its owners as such; or (iv) any other distribution on or in respect of any ownership interests of the Borrower.

Dollars or $ .  Dollars in lawful currency of the United States of America.

Domestic Subsidiaries .  A Subsidiary that is organized under the laws of any state of the United States of America.

Drawdown Date .  The date on which any Revolving Credit Loan or any Term Loan is made or is to be made.

EBITDA .  With respect to any period, an amount equal to the Consolidated Net Income of the Holding Company and its Subsidiaries for such period, plus to the extent accounted for in Consolidated Net Income during such period and without duplication the sum of:  (i) depreciation and amortization, (ii) Consolidated Total Interest Expense for such period, (iii) non-cash expenses, (iv) income tax expense and (v) extraordinary losses (net of tax effects) approved by the Agent in writing, all as determined in accordance with GAAP minus the sum of:  (a) interest and dividend income during such period, (b) gain on the sale of assets other than the sale of inventory in the ordinary course of business during such period, (c) extraordinary gains during such period, and (d) any non-cash components of income during such period.

Eligible Accounts Receivable .  The aggregate of the unpaid portions of Accounts (net of any credits, rebates, offsets, holdbacks or other adjustments or commissions payable to third parties that are adjustments to such Accounts) (i) that the Borrower reasonably and in good faith determines to be collectible; (ii) that are with account debtors or other obligors that (a) are not Affiliates of the Borrower; (b) purchased the goods or services giving rise to the relevant Account in an arm’s length transaction, (c) are not insolvent or involved in any case or proceeding, whether voluntary or involuntary, under any bankruptcy, reorganization, arrangement, insolvency, adjustment of debt, dissolution, liquidation or similar law of any jurisdiction and (d) are, in the Required Lenders’ reasonable judgment, creditworthy; (iii) that are in payment of obligations that have been fully performed, do not consist of progress billings to any Person bill-and-hold guaranteed sale, sale-and-return, sale on approval, consignment or any other repurchase or return basis or is evidenced by Chattel Paper; (iv) that are not subject to any pledge, restriction, security interest or other lien or encumbrance other than those created by the Loan Documents; (v) in which the Agent has a valid and perfected first priority security interest; (vi) that are not outstanding for more than sixty (60) days from the due date; (vii) that are not due from an account debtor or other obligor located in New Jersey or Minnesota unless the Borrower (a) has received a certificate of authority to do business and is in good standing in such state or (b) has filed a notice of business activities report with the appropriate office or agency of such state for the current year; (viii) that are not due from any single account debtor or other obligor if more than twenty-five percent (25%) of the aggregate amount of all Accounts owing from such account debtor or other obligor would otherwise not be Eligible Accounts Receivable; (ix) that are payable in Dollars; (x) that are not payable from an office outside of the United States (including Puerto Rico) and Canada; (xi) that are not secured by a letter of credit unless the Agent has a prior, perfected security interest in such letter of credit; (xii) that are accounts of the Federal Government; provided , however , that such accounts shall not be Eligible Accounts Receivable after February 19, 2009 unless the Borrower has been compliance with the Federal Assignment of Claims Act of 1940, as amended (31 U.S.C. Sub-Section 3727 et seq. and 41 U.S.C. Sub-Section 15 et. seq.); (xiii) the account debtor has not asserted a right of set off, has disputed liability or made any claim regarding its obligation to repay and is not a contra account and (xiv) the Account is not otherwise satisfactory to the Agent in its reasonable discretion.  The general criteria for Eligible Accounts Receivable may be established and revised from time to time by the Agent upon notice to the Borrower pursuant to §2.7.

Eligible Assignee .  Any of:  (i) a commercial bank or finance company or similar institutional lender organized under the laws of the United States, or any State thereof or the District of Columbia, and having total assets in excess of $250,000,000; (ii) a savings and loan association or savings bank organized under the laws of the United States, or any State thereof or the District of Columbia, and having a net worth of at least $250,000,000; (iii) a commercial bank organized under the laws of any other country which is a member of the Organization for Economic Cooperation and Development (the “OECD”), or a political subdivision of any such country, and having total assets in excess of $250,000,000, provided that such bank is acting through a branch or agency located in the country in which it is organized or another country which is also a member of the OECD; and (iv) if, no Default or Event of Default has occurred and is continuing, any other bank, insurance company, commercial finance company or other financial institution or other Person approved by the Borrower, such approval not to be unreasonably withheld, conditioned or delayed.

Eligible Raw Material and Finished Goods Inventory .  Inventory valued at the lower of cost or market value, determined in accordance with the first-in, first-out method of inventory accounting, as reflected on the Borrower’s books in accordance with generally accepted accounting principles consistently applied, of (i) finished goods held for sale and (ii) raw materials used to produce the Borrower’s Inventory, and excluding any work in process and any slow-moving or unmerchantable goods, as to which the Borrower has acquired title and the Agent has a valid and perfected first priority security interest under all applicable law and as to which the Borrower has furnished reasonably detailed information to the Agent in a Borrowing Base Report, determined after taking into account all charges and liens (other than those of the Agent) of all kinds against finished goods and reductions in the market value thereof, all as determined by the Required Lenders in their reasonable discretion, which, absent manifest error, shall be final and binding upon the Borrower.  Inventory shall not constitute Eligible Raw Material and Finished Goods Inventory if it (i) does not conform to all standards imposed by any Governmental Authority which has regulatory authority over such goods or the use or sale thereof; (ii) is located outside the United States of America; (ii) is consigned; (iv) is the subject of any dispute; (v) is subject to a license agreement or other agreement that limits, conditions or restricts the Borrower or Agent’s right to sell or otherwise dispose of such Inventory; (vi) is situated at a location not owned by Borrower unless the owner or occupier of such location has executed in favor of Agent a Collateral Access Agreement or (vii) in transit.  Such finished goods inventory and raw materials immediately loses the status of Eligible Raw Material and Finished Goods Inventory if and when Borrower sells it, otherwise passes title thereto, or consumes it or the Agent releases or transfers its security interest therein, or if and when an Eligible Accounts Receivable arises by virtue of constituting proceeds of such inventory.  Notwithstanding the foregoing, but without duplication, Eligible Raw Material and Finished Goods Inventory shall be reduced by the amount of any specific reserve with respect to any Eligible Raw Material and Finished Goods Inventory, including, without limitation, the reserve account for excess and obsolete stock and stock not readily saleable in the U.S. domestic market or no longer saleable in any market in which such stock was customarily sold, established by the Borrower in accordance with generally accepted accounting principles and any reserve account for inventory adjustment, the amounts thereof being subject to verification and adjustment from time to time based upon periodic reviews conducted at the expense of the Borrowers by the Required Lenders’ examiners.  General criteria for Eligible Raw Material and Finished Goods Inventory may be established and revised from time to time by the Required Lenders upon notice to the Borrower pursuant to §2.7.

Employee Benefit Plan .  Any employee benefit plan within the meaning of Section (3) of ERISA maintained or contributed to by the Borrower or any ERISA Affiliate, other than a Multiemployer Plan.

Environmental Laws .  See Section 9.18(a).

ERISA .  The Employee Retirement Income Security Act of 1974, as amended.

ERISA Affiliate .  Any Person which is treated as a single employer with the Borrower under §414 of the Code.

ERISA Reportable Event .  A reportable event with respect to a Guaranteed Pension Plan within the meaning of §4043 of ERISA and the regulations promulgated thereunder as to which the requirement of notice has not been waived.

Event of Default .  See Section 15.1.

Excess Cash Flow .   With respect to the Borrower and its Subsidiaries, for any fiscal year of the Borrower, an amount equal to EBITDA for such fiscal year minus Fixed Charges during such fiscal year.

Extraordinary Receipts .  Any proceeds that the Borrower or any of its Subsidiaries receives not in the ordinary course of their respective businesses, including without limitation, from (i) any casualty insurance policies maintained by the  Borrower and/or any Subsidiary which the Agent is permitted hereunder to apply to the repayment of the Obligations; (ii) tax refunds of the Borrower and its Domestic Subsidiaries, (iii) pension plan reversions, (iv) condemnation awards (and payments in lieu thereof), (v) indemnity payments or (vi) any extraordinary gains realized by the Borrower and/or any Subsidiary.

Following Business Day Convention .   The convention for adjusting any relevant date that would otherwise fall on a day that is not a Business Day so that the date will be the first following day that is a Business Day.

Fixed Charge Coverage Ratio .  As of any date of determination, the ratio of:  (i) EBITDA for the period of the four (4) fiscal quarters then ending to (ii) Fixed Charges for such period.

Fixed Charges .  For any applicable period, the sum, without duplication, of:  (i) Consolidated Total Debt Service plus (ii) all income tax expenses for such period (excluding deferred income taxes)  plus (iii) all Capital Expenditures made during such period plus (iv) the amount of all Management Fees which are distributed in a Distribution for such period.

Foreign Exchange Contracts .  See Section 7.7.1.

Foreign Exchange Limit .  At the time of any determination, an amount equal to the lesser of (x) the Revolving Loan Commitment minus the sum of (i) the outstanding Revolving Credit Loans plus (ii) the Foreign Exchange Reserve plus (iii) the Maximum Drawing Amount and Unreimbursed Obligations; (y) the Borrowing Base and (z) $500,000.

Foreign Exchange Reserve .  At the time of any determination, an amount which equals ten percent (10%) of the aggregate notional amount of all outstanding Foreign Exchange Contracts.

Foreign Lender Complete Exemption Certificate .  See Section 6.12(c).

Foreign Subsidiary .  Any Subsidiary of the Borrower which is not a Domestic Subsidiary.

General Intangible .   As applied to any Person, all now owned or hereafter acquired right, title, and interest with respect to “general intangibles” (as such term is defined from time to time in the UCC), and any and all supporting obligations in respect thereof.

GAAP or generally accepted accounting principles .  (i) When used in this Credit Agreement, whether directly or indirectly through reference to a capitalized term used therein, means (x) principles that are consistent with the principles promulgated or adopted by the Financial Accounting Standards Board and its predecessors, in effect for the fiscal year ended on the Balance Sheet Date, and (y) to the extent consistent with such principles, the accounting practice of the Borrower reflected in its financial statements for the year ended on the Balance Sheet Date, and (ii) when used in general, other than as provided above, means principles that are (x) consistent with the principles promulgated or adopted by the Financial Accounting Standards Board and its predecessors, as in effect from time to time, and (y) consistently applied with past financial statements of the Borrower adopting the same principles; provided , that in each case referred to in this definition of “generally accepted accounting principles” a certified public accountant would, insofar as the use of such accounting principles is pertinent, be in a position to deliver an unqualified opinion (other than a qualification regarding changes in generally accepted accounting principles) as to financial statements in which such principles have been properly applied.

Governmental Authority .   The government of the United States of America or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

Guaranteed Pension Plan .  Any employee pension benefit plan within the meaning of §3(2) of ERISA maintained or contributed to by the Borrower or any ERISA Affiliate the benefits of which are guaranteed on termination in full or in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer Plan.

Guarantor .  The Holding Company and each Domestic Subsidiary of the Borrower now or hereafter existing.

Guaranty .   The guaranty of any Guarantor in form and substance satisfactory to the Lenders, as amended, modified or supplemented from time to time.

Hazardous Substances .  See Section 9.18(b).

Holding Company .   See the preamble hereto.

Indebtedness .  As to any Person and whether recourse is secured by or is otherwise available against all or only a portion of the assets of such Person and whether or not contingent, but without duplication:

(i)           every obligation of such Person for money borrowed;

(ii)          every obligation of such Person evidenced by bonds, debentures, notes or other similar instruments, including obligations incurred in connection with the acquisition of property, assets or businesses or secured by a lien or other encumbrance on any property of such Person;

(iii)         every reimbursement obligation of such Person with respect to letters of credit, bankers’ acceptances or similar facilities issued for the account of such Person;

(iv)         every obligation of such Person issued or assumed as the deferred purchase price of property or services (including securities repurchase agreements but excluding trade accounts payable or accrued liabilities arising in the ordinary course of business which are not overdue or which are being contested in good faith);

(v)          every obligation of such Person under any Capitalized Lease;

(vi)         every obligation of such Person under any lease (a “synthetic lease”) treated as an operating lease under generally accepted accounting principles and as a loan or financing for U.S. income tax purposes;

(vii)       all sales by such Person of:  (x) accounts or general intangibles for money due or to become due, (y) chattel paper, instruments or documents creating or evidencing a right to payment of money or (z) other receivables (collectively “receivables”), whether pursuant to a purchase facility or otherwise, other than in connection with the disposition of the business operations of such Person relating thereto or a disposition of defaulted receivables for collection and not as a financing arrangement, and together with any obligation of such Person to pay any discount, interest, fees, indemnities, penalties, recourse, expenses or other amounts in connection therewith;

(viii)      every obligation of such Person (an “equity related purchase obligation”) to purchase, redeem, retire or otherwise acquire for value any shares of capital stock or membership interests or membership units of any class issued by such Person, any warrants, options or other rights to acquire any such shares, or any rights measured by the value of such shares, warrants or other similar right;

(ix)         every obligation of such Person under a Derivative Contract;

(x)          every obligation in respect of Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent that 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 that the terms of such Indebtedness provide that such Person is not liable therefor and such terms are enforceable under applicable law; and

(xi)         every obligation, contingent or otherwise, of such Person guaranteeing, or having the economic effect of guarantying or otherwise acting as surety for, any obligation of a type described in any of clauses (i) through (x) (the “primary obligation”) of another Person (the “primary obligor”), in any manner, whether directly or indirectly, and including, without limitation, any obligation of such Person (A) to purchase or pay (or advance or supply funds for the purchase of) any security for the payment of such primary obligation, (B) to purchase property, securities or services for the purpose of assuring the payment of such primary obligation, or (C) to maintain working capital, equity capital or other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such primary obligation.

The “amount” or “principal amount” of any Indebtedness at any time of determination represented by:  (u) any Indebtedness, issued at a price that is less than the principal amount at maturity thereof, shall be the amount of the liability in respect thereof determined in accordance with generally accepted accounting principles, (v) any Capitalized Lease shall be the principal component of the aggregate of the rentals obligation under such Capitalized Lease payable over the term thereof that is not subject to termination by the lessee, (w) any sale of receivables shall be the amount of unrecovered capital or principal investment of the purchaser (other than the Borrower or any of its wholly-owned Subsidiaries) thereof, excluding amounts representative of yield or interest earned on such investment, (x) any synthetic lease shall be the stipulated loss value, termination value or other equivalent amount, (y) any Derivative Contract shall be the maximum amount of any termination or loss payment required to be paid by such Person if such Derivative Contract were, at the time of determination, to be terminated by reason of any event of default or early termination event thereunder, whether or not such event of default or early termination event has in fact occurred and (z) any equity related purchase obligation shall be the maximum fixed redemption or purchase price thereof inclusive of any accrued and unpaid dividends to be comprised in such redemption or purchase price.

Insolvency Proceeding .   Any proceeding commenced by or against any Person under any provision of the Bankruptcy Code or under any other state or federal bankruptcy or insolvency law, assignments for the benefit of creditors, formal or informal moratoria, compositions, extensions generally with creditors, or proceedings seeking reorganization, arrangement, or other similar relief.

Intercompany Agreement .  That certain Intercompany Agreement between the Borrower and CTSA, dated as of February 26, 2007, as the same may be amended, modified or supplemented from time to time with the prior written consent of the Agent.

Interest Period .  With respect to each LIBOR Rate Loan, a period of one, two or three months selected by the Borrower (commencing on the date of such borrowing and ending on the numerically corresponding day, or if there is no numerically corresponding day, on the last day).  No Interest Period may end beyond the Maturity Date of the applicable Note.  The term Interest Period with respect to each Base Rate Loan shall mean consecutive periods of one (1) day each.

Inventory .  As applied to any Person, all now owned or hereafter acquired right, title, and interest with respect to inventory, including goods held for sale or lease or to be furnished under a contract of service, goods that are leased by such Person as lessor, goods that are furnished by such Person under a contract of service, and raw materials, work in process, or materials used or consumed in the business of such Person and as such term is defined in the UCC.

Investments .  All expenditures made and all liabilities incurred (contingently or otherwise) for the acquisition of stock, membership interests or membership units, or Indebtedness of, or for loans, advances, capital contributions or transfers of property to, or in respect of any guaranties (or other commitments as described under Indebtedness), or obligations of, any Person.  In determining the aggregate amount of Investments outstanding at any particular time: (i) the amount of any Investment represented by a guaranty shall be taken at not less than the principal amount of the obligations guaranteed and still outstanding; (ii) there shall be included as an Investment all interest accrued with respect to Indebtedness constituting an Investment unless and until such interest is paid; (iii) there shall be deducted in respect of each such Investment any amount received as a return of capital (but only by repurchase, redemption, retirement, repayment, liquidating dividend or liquidating distribution); (iv) there shall not be deducted in respect of any Investment any amounts received as earnings on such Investment, whether as dividends, interest or otherwise, except that accrued interest included as provided in the foregoing clause (ii) may be deducted when paid; and (v) there shall not be deducted from the aggregate amount of Investments any decrease in the value thereof.

Lender .   Each of:  (i) TD Bank, (ii) each other Person party hereto in its capacity as a lender, (iii) each other Eligible Assignee that becomes a party hereto and (iv) the respective successors of all of the foregoing, and “Lenders” means all of the foregoing.

Letter of Credit .  See §7.1.1.

Letter of Credit Application .  See §7.1.1.

Letter of Credit Sublimit .  An amount equal to $500,000.  The Letter of Credit Sublimit is part of, and not in addition to, the Revolving Credit Loan Commitment.

LIBO Rate or LIBOR .  The term “LIBO Rate” or “LIBOR” shall mean:  the greater of (x) with respect to each Interest Period, the rate per annum (rounded upward, if necessary, to the nearest 1/32 of one percent) as determined on the basis of the offered rates for deposits in Dollars, for a period of time comparable to such Interest Period which appears on the Telerate Page 3750 as of 11:00 A.M. (London time) on the day that is two (2) Business Days prior to the beginning of such Interest Period; provided , however , that if the rate described above does not appear on the Telerate System on any date of determination, the LIBO Rate shall for such date will be the arithmetic mean of the rates quoted by major banks in London, selected by the Agent, (rounded upwards as described above, if necessary) for deposits in Dollars for a period substantially equal to the Interest Period, as of 11:00 A.M. (London time) on the day that is two (2) Business Days prior to the beginning of such Interest Period and (y) three percent (3%) per annum, provided , however , for purposes of a LIBOR Rate Loan associated with a Derivative Contract, the three percent (3%) referred to in (y) immediately preceding shall be disregarded.

LIBOR Rate Loan .  Any portion of the Loans bearing interest determined with reference to LIBOR.

Loan Documents .  This Credit Agreement, the Notes, the Guaranty, the Letters of Credit, the Foreign Exchange Contracts, the Derivative Contracts, the Letter of Credit Applications, and the Security Documents and each of the other documents, instruments and agreements executed in connection therewith in favor of the Agent and/or the Lenders, as each may be amended, modified or supplemented from time to time.

Loans .  Collectively, the Revolving Credit Loans and the Term Loans.

London Banking Day .  Any day on which dealings in deposits in Dollars are transacted in the London interbank market.

Management Agreement .  A management agreement between Selway or an Affiliate thereof and the Holding Company   in form and substance reasonably satisfactory to the Required Lenders, as may be amended, modified or supplemented from time to time in accordance with the terms of this Credit Agreement, which agreement and the Management Fees payable thereunder have been subordinated pursuant to the Management Fee Subordination Letter.

Management Fees .  All fees or other compensation to be paid to Selway pursuant to the Management Agreement.

Management Fee Subordination Letter .  The letter agreement among the Holding Company, Selway or such Affiliate and the Agent substantially in the form attached hereto as Exhibit F , or such other form as is reasonably satisfactory to the Required Lenders with respect to the payment of Management Fees or any other subordination agreement entered into with respect to Management Fees, each as may be amended, modified or supplemented from time to time.

Mandatory Prepayments .  See Section 5.3.

Material Adverse Effect .  A material adverse effect on:  (a) the business condition (financial or otherwise), operations, performance or properties, of the Holding Company, the Borrower and the Borrower’s Subsidiaries, taken as a whole, or the Collateral, (b) the rights and remedies of the Agent under any Loan Document, or (c) the ability of the Holding Company or any Subsidiary to perform its or their obligations under the Loan Documents.

Maximum Drawing Amount .  The maximum aggregate amount from time to time that the beneficiaries may draw under outstanding Letters of Credit, as such aggregate amounts may be reduced from time to time pursuant to the terms of the Letters of Credit.

Mortgage .  The mortgage dated or to be dated on the Closing Date between the Borrower and Agent, pursuant to which the Borrower grants a mortgage in all of the Borrower’s right, title and interest in that certain real estate more commonly known as 96 Windsor Street, West Springfield, Massachusetts, together with the improvements thereon.

Multiemployer Plan .  Any multiemployer plan within the meaning of §3(37) of ERISA maintained or contributed to by the Borrower or any ERISA Affiliate.

Net Proceeds .  With respect to any proceeds of insurance or the sale, transfer or other disposition by any Person of any group of Capital Assets (other than Inventory in the ordinary course of business) means the amount of cash in Dollars received by such Person from such insurance proceeds or sale or other disposition after (i) provision for all income or other taxes of such Person measured by or resulting from the receipt of such insurance proceeds or as a result of such sale or other disposition, (ii) payment of all reasonable brokerage commissions, reasonable attorney fees and other reasonable fees and expenses related to such insurance proceeds, sale or other disposition including the tax benefit resulting from a loss on such sale or other disposition as and when such tax benefit is realized, (iii) deduction of such appropriate amount to be provided by such Person as a reserve, in accordance with GAAP, against any liabilities associated with such sale, transfer, or other disposition and retained by such Person after such sale or other disposition, (iv) transfer taxes, and (v) amounts payable to holders of Permitted Liens to obtain a release of the Lien on the asset sold.

Notes .  The Revolving Credit Note and the Term Notes.

Notice of Borrowing .  A Notice of Revolving Credit Loan Borrowing or Notice of Term Loan Borrowing, as applicable.

Notice of Revolving Credit Loan Borrowing .  See Section 2.5(a).

Notice of Term Loan Borrowing .   See Section 4.3.

OFAC .   The U.S. Department of Treasury Office of Foreign Assets Control.

OFAC Lists .   Collectively, the Specially Designated Nationals and Blocked Persons List maintained by OFAC pursuant to Executive Order No. 13224, 66 Fed. Reg. 49079 (Sept. 25, 2001) and/or any other list of terrorists or other restricted Persons maintained pursuant to any of the rules and regulations of OFAC or pursuant to any other applicable Executive Orders.

Obligations .  All indebtedness, obligations and liabilities of the Holding Company, the Borrower and the Borrower’s Subsidiaries to the Lenders, individually or collectively, existing on the date of this Credit Agreement or arising thereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law or otherwise, arising or incurred under this Credit Agreement or any of the other Loan Documents or in respect of any of the Loans made or Reimbursement Obligations incurred or any of the Notes, Letters of Credit, Letter of Credit Applications, Foreign Exchange Contracts, the Derivative Contracts, or other instruments at any time evidencing any thereof.

Operating Account .  A demand deposit account of the Borrower and its Subsidiaries maintained by the Borrower and its Subsidiaries at TD Bank and designated by the Borrower and its Subsidiaries as their primary operating account.

Origination Fee .  See Section 6.1.

Outstanding .  With respect to the Loans, the aggregate unpaid principal thereof as of any date of determination.

PBGC .  The Pension Benefit Guaranty Corporation created by §4002 of ERISA and any successor entity or entities having similar responsibilities.

Perfection Certificate .  The Perfection Questionnaire as defined in the Security Agreement.

Permitted Acquisitions .  Acquisitions of a business in the national security or homeland security industries approved by the Required Lenders in writing.

Permitted Acquisition Indebtedness .  Indebtedness incurred (other than hereunder) or assumed in connection with a Permitted Acquisition approved by the Required Lenders in writing and all of the documents, instruments or agreements evidencing or with respect to the payment of any Permitted Acquisition Indebtedness are subject to an Agent Approved Subordination Agreement; and (iv) no Default or Event of Default has occurred and is continuing at the time such Permitted Acquisition Indebtedness is incurred or assumed.

Permitted Liens .  Liens, security interests and other encumbrances permitted by Section 11.2.

Person .  Any individual, corporation, partnership, trust, unincorporated association, business, limited liability company or other legal entity, and any government or any governmental agency or political subdivision thereof.

Pledge Agreement .  The Pledge Agreement dated or to be dated on or prior to the Closing Date, between the Holding Company and the Agent, pursuant to which the Holding Company pledges to the Agent all of the Shares of the Borrower, in form and substance satisfactory to the Lenders, as may be amended, modified or supplemented from time to time.

Pro Rata Share .  (i) with respect to a Term A Lender’s right to receive payments of principal and interest with respect to Term Loan A, the Term Loan A Commitment Percentage of such Term A Lender, (ii) with respect to a Term B Lender’s right to receive payments of principal and interest with respect to Term Loan B, the Term Loan B Commitment Percentage of such Term B Lender, (iii) with respect to a Revolving Credit Lender’s right to receive payments of principal and interest with respect thereto, the right to receive the Commitment Fee and its obligation to make Revolving Credit Loans, the Revolving Credit Loan Commitment Percentage of such Revolving Credit Lender.

Purchase Agreement .   That certain Stock Purchase Agreement dated February 14, 2008, as amended, among the Holding Company, the Borrower, Cyalume Acquisition Corp. and GMS Acquisition Partners Holdings, LLC.

Real Estate .  All real property owned or leased (as lessee or sublessee) by the Borrower or any of its Subsidiaries.

Record .  The grid attached to a Note, or the continuation of such grid, or any other similar record, including computer records, maintained by the Agent with respect to any Loan referred to in such Note.

Reemployment Period .  See Section 6.11.

Reimbursement Obligation .  The Borrower’s obligation to reimburse the Bank on account of any drawing under any Letter of Credit as provided in §7.2.

Rental Obligations .  All present or future obligations of the Borrower or any of its Subsidiaries under any rental agreements or leases of real or personal property, other than:  (a) obligations that can be terminated by the giving of notice without liability to the Borrower or such Subsidiary in excess of the liability for rent due as of the date on which such notice is given and under which no penalty or premium is paid as a result of any such termination, and (b) obligations in respect of Capitalized Leases.

Required Lenders .  Lenders holding an aggregate Pro Rata Share of the outstanding principal balance of the Loans in an amount equal to or in excess of 51% of the total outstanding principal balance of the Loans and if there is no outstanding principal balance of the Loans, Lenders having at least 51% of the Revolving Credit Loan Commitments.

Reserve Adjusted LIBOR .  As applied to any Interest Period, shall mean a rate per annum determined pursuant to the following formula:

Where:

RAL  = Reserved Adjusted LIBOR

LIBOR  = as defined herein

RP  = Reserve Percentage

The amount in brackets shall be rounded upwards, if necessary, to the next higher 1/100 of 1%.  Reserve Adjusted LIBOR shall be adjusted automatically as of the effective date of any change in the Reserve Percentage.

Reserve Percentage .  As applied to any Interest Period, the rate (expressed as a decimal rounded upward to the nearest 1/32 of 1%) applicable to any Lender during such Interest Period under regulations issued from time to time by the Board of Governors of the Federal Reserve System for determining the maximum reserve requirement (including, without limitation, any basic, supplemental, emergency or marginal reserve requirement) of such Lender with respect to “Eurocurrency Liabilities” as that term is defined under such regulations.

Restricted Payment .  As to the Borrower and its Subsidiaries, each of the following: (i) any Distribution, (ii) any loan, advance or other payment to the holders of any Shares of the Borrower (which payments shall not include salaries or reasonable compensation paid to any such holder other than to a Borrower Key Officer pursuant to such holder’s employment arrangement with the Borrower, such employment arrangement to be approved by the board of directors of the Borrower) or to any Affiliate of Borrower, or to any Guarantor, (iii) any payment of any compensation, management fee or expense, investment banking fee or similar amount to any Affiliate of the Borrower, (iv) any payment under the Purchase Agreement after the Closing Date, or (v) any payment to the holders of any Subordinated Debt except in accordance with the Agent Approved Subordination Agreement applicable thereto.

Revolving Credit Lender .   All Lenders committed to make, subject to the terms and conditions herein contained, Revolving Credit Loans hereunder.

Revolving Credit Loan(s) .  Revolving credit loans made or to be made by the Revolving Credit Lenders to the Borrower pursuant to Article 2.

Revolving Credit Loan Commitment .  The Revolving Credit Lenders’ several commitments to make Revolving Credit Loans to the Borrower subject to the terms and conditions hereof, in the maximum outstanding principal amount of $5,000,000, subject to the limitations herein contained, as the same may be reduced from time to time, or if such commitment is terminated pursuant to the provisions hereof, zero.

Revolving Credit Loan Commitment Percentage .  As to any Revolving Credit Lender:  (i) on the Closing Date, the percentage set forth opposite such Lender’s name on Schedule 1 of the Commitment Annex under the column “Revolving Credit Loan Commitment Percentage” (if such Lender’s name is not so set forth thereon, then, on the Closing Date, such percentage for such Lender shall be deemed to be zero) and (ii) on any date following the Closing Date, the percentage equal to the Revolving Credit Loan Commitment Amount of such Revolving Credit Lender on such date divided by the Revolving Credit Loan Commitment on such date.

Revolving Credit Loan Maturity Date .  December 19, 2011, unless sooner occurring following acceleration.

Revolving Credit Note .  See Section 2.4.

Revolving Credit Note Record .  A Record with respect to a Revolving Credit Note.

SCP Holders .  Each of Winston J. Churchill, Yaron Eitan, Thomas J. Rebar and Wayne B. Weisman, as holders of the SCP Subordinated Notes, their successors, assigns, heirs, executors and administrators.

SCP Partners .  A general partnership consisting of, inter alia , Winston J. Churchill, Yaron Eitan, Thomas J. Rebar and Wayne B. Weisman.

SCP Subordinated Notes .  Those unsecured subordinated promissory notes each dated December 19, 2008, in the original principal amounts and held by the respective SCP Holder as follows:  $650,000 held by Winston J. Churchill, $150,000 held by Yaron Eitan, $100,000 held by Thomas J. Rebar and $100,000 held by Wayne B. Weisman, each in form and substance satisfactory to the Agent.

Selway .  Selway Management, Inc., a Delaware corporation which is an Affiliate of SCP Partners.

Security Agreement(s) .  The Pledge and Security Agreement(s), dated or to be dated on or prior to the Closing Date, between the Borrower and each of its Subsidiaries and each Guarantor and the Agent, pursuant to which the Borrower and each of its Subsidiaries and each Guarantor grants a security interest in all of its tangible and intangible personal property, in form and substance satisfactory to the Lenders, as may be amended, modified or supplemented from time to time.

Security Documents .  The Security Agreements, the Collateral Assignment of Acquisition Documents, the Pledge Agreement, the Collateral Access Agreements, the Mortgage, the Collateral Assignment of Leases and all other security agreements between the Agent and any Subsidiary of the Holding Company and any Guarantor entered into on or after the Closing Date.

Seller .  GMS Acquisition Partners Holdings, LLC, a Delaware limited liability company.

Seller Notes .  Those certain subordinate promissory notes payable to a seller in a Permitted Acquisition executed in connection with a Permitted Acquisition, which are in form and substance satisfactory to the Agent, which are subject to and the holder of such notes shall have executed and delivered, an Agent Approved Subordination Agreement.

Senior Funded Debt .  Shall mean all of:

(i)           Indebtedness in respect of borrowed money other than the Subordinated Debt;

(ii)          Indebtedness in respect of Capitalized Lease Obligations;

(iii)         Indebtedness in respect of the deferred purchase price of assets (other than normal trade accounts payable in the ordinary cause of business);

(iv)         Indebtedness in respect of unfunded pension liabilities;

(v)         Any guaranties or any agreement having the economic affect of guarantying or otherwise acting as a surety for any of the foregoing (i) through (iv) in any manner, whether directly or indirectly, and including, without limitation, any obligation (A) to purchase or pay (or advance or supply funds for the purchase of) any security for the payment of such primary obligation, (B) to purchase property, securities or services for the purpose of assuring the payment of such primary obligation, or (C) to maintain working capital, equity capital or other financial statement condition or liquidity of the primary obligor to pay such primary obligation;

(vi)        For purposes of calculating the financial covenants in Article 12,   Indebtedness in the amount of the aggregate Derivative Termination Value of all Derivative Contracts under which the Agent is not the counterparty; and

(vii)       Indebtedness (other than the Loans) incurred at the time of, or within 20 days after, the acquisition of fixed assets for the purpose of financing all or any part of the acquisition cost thereof.

Senior Leverage Ratio .  As of any date of determination, the ratio of:  (i) Senior Funded Debt of the Borrower and its Subsidiaries on a consolidated basis as of any date of determination to (ii) Adjusted EBITDA of the Borrower and its Subsidiaries on a consolidated basis for the period of the four (4) consecutive quarters then ended.

Services Agreement .  That certain Services Agreement between the Borrower and CTSA, dated as of January 1, 2007, as the same may be amended, modified or supplemented from time to time with the prior written approval of the Agent.

Settlement Date .  See Section 2.7.

Shares .  With respect to the Borrower, the Holding Company or any other Person, any and all shares of capital stock or other shares, interests, participations or other equivalents (however designated of any class) in the capital of or other ownership interests therein.

Subordinated Debt .  The unsecured Indebtedness of the Borrower that is expressly subordinated and made junior to the payment and performance in full of all of the Obligations, and is either (x) evidenced by any Seller Notes, (y) Permitted Acquisition Indebtedness or any other indebtedness approved by the Agent and the Lenders in their sole and absolute discretion subordinated to the obligations pursuant to an Agent Approved Subordination Agreement or (z) is evidenced by the SCP Subordinated Notes.

Subordinated Debt Documents .  Collectively: any Seller Notes, any notes evidencing any other Subordinated Debt, and the Agent Approved Subordination Agreements relating thereto.

Subsidiary .  Any corporation, limited liability company, association, trust or other business entity of which the Holding Company shall at any time own directly or indirectly through a subsidiary or subsidiaries at least a majority (by number of votes) of the outstanding Voting Stock.

TD Bank.   TD Bank, N.A., a national banking association organized under the laws of the United States in its capacity as a Lender hereunder.

Telerate Page 3750 .  The display designated as “Page 3750” on the Dow Jones Telerate Service (or such other page as may replace Page 3750 on that service or such other service as may be nominated by the British Bankers’ Association as the information vendor for the purpose of displaying British Bankers’ Association Interest Settlement Rates for U.S. Dollar Deposits).

Term A Note .  See Section 4.2(a).

Term B Note .  See Section 4.2(b).

Term Loan A .  The term loan in the original aggregate principal amount of up to $25,500,000 made severally by the Term A Lenders to the Borrower pursuant to Section 4.1(a) and subject to the limitations contained herein.

Term Loan A Commitment Percentage .  As to any Term Loan A Lender, the percentage set forth opposite such Term Loan A Lender’s name on the Commitment Annex under the column “Term Loan A Commitment Percentage” (if such Lender’s name is not so set forth thereon, then, on the Closing Date, such percentage for such Term Loan A Lender shall be deemed to be zero).

Term Loan A Lenders .  All Lenders committed to make, subject to the terms and conditions herein contained, Term Loan A advances hereunder.

Term Loan A Maturity Date .  December 19, 2013, unless sooner occurring following acceleration.

Term Loan B .  The commercial real estate mortgage term loan in the original aggregate amount of up to $2,500,000 made severally by the Term B Lenders to the Borrower pursuant to Section 4.1(b) and subject to the limitations contained herein.

Term Loan B Commitment Percentage .  As to any Term Loan B Lender, the percentage set forth opposite such Term Loan B Lender’s name on the Commitment Annex under the column “Term Loan B Commitment Percentage” (if such Lender’s name is not so set forth thereon, then, on the Closing Date, such percentage for such Term Loan B Lender shall be deemed to be zero).

Term Loan B Lenders .  All Lenders committed to make, subject to the terms and conditions herein contained, Term Loan B advances hereunder.

Term Loan B Maturity Date .  December 19, 2013, unless sooner occurring following acceleration.

Term Loans .  Collectively, the Term Loan A and Term Loan B in the original aggregate principal amount of up to $28,000,000 made severally by the applicable Lenders to the Borrower on the Closing Date pursuant to Section 4.1 and subject to the limitations contained herein.

Term Notes .  Collectively, the Term A Note(s) and the Term B Note(s).

Total Debt Service Coverage Ratio .  As of any date of determination, the ratio of:  (i) Adjusted EBITDA for the period of the two (2) fiscal quarters then ending to (ii) Consolidated Total Debt Service for such period.

Uniform Commercial Code .  The Uniform Commercial Code as in effect on the date hereof in the Commonwealth of Massachusetts at Massachusetts General Laws Chapter 106 §1-101 et. seq., as may be amended from time to time.

Uniform Customs .  With respect to any Letter of Credit, the Uniform Customs and Practice for Documentary Credits (1993 Revision), International Chamber of Commerce Publication No. 500 or any successor version thereto adopted by TD Bank in the ordinary course of its business as a letter of credit issuer and in effect at the time of issuance of such Letter of Credit.

Unpaid Reimbursement Obligation .  Any Reimbursement Obligation for which the Borrower does not reimburse the TD Bank on the date specified in, and in accordance with, §7.2.

Voting Stock .  Shares or similar interests, of any class or classes (however designated), the holders of which are at the time entitled, as such holders, to vote for the election of a majority of the directors (or persons performing similar functions) of the corporation, association, trust or other business entity involved, whether or not the right so to vote exists by reason of the happening of a contingency.

Wholly Owned Subsidiary .  With respect to any Subsidiary, one hundred percent (100%) of the Shares of such Subsidiary are owned directly by the Holding Company.

Section 1.2       Rules of Interpretation.

(a)        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 Credit Agreement.

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

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

(d)        A reference to any Person includes its permitted successors and permitted assigns.

(e)        Accounting terms not otherwise defined herein have the meanings assigned to them by generally accepted accounting principles applied on a consistent basis by the accounting entity to which they refer.

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

(g)        All terms not specifically defined herein or by generally accepted accounting principles, which terms are defined in the Uniform Commercial Code as in effect in the Commonwealth of Massachusetts, have the meanings assigned to them therein, with the term “instrument” being that defined under Article 9 of the Uniform Commercial Code.

(h)        Reference to a particular “Section” refers to that section of this Credit Agreement unless otherwise indicated.

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

(j)         Unless otherwise expressly indicated, in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including,” the words “to” and “until” each mean “to but excluding,” and the word “through” means “to and including.”

(k)        This Credit Agreement and the other Loan Documents may use several different limitations, tests or measurements to regulate the same or similar matters.  All such limitations, tests and measurements are, however, cumulative and are to be performed in accordance with the terms thereof.

(l)         This Credit Agreement and the other Loan Documents are the result of negotiation among, and have been reviewed by counsel to, among others, the Lenders and the Borrower and are the product of discussions and negotiations among all parties.  Accordingly, this Credit Agreement and the other Loan Documents are not intended to be construed against the Lenders merely on account of the Agent’s involvement in the preparation of such documents.

(m)       Reference to a “schedule” in Article 9 hereof shall be deemed to include updates of such schedule or the information disclosed thereon which update may be provided in writing from the Borrower to the Agent in accordance with Article 22 hereof.

(n)        Reference to a statute or regulation in this Credit Agreement shall mean such statute or regulation and any statute or regulation which is enacted in replacement or substitution thereof or as a successor thereto.

ARTICLE 2.  THE REVOLVING CREDIT FACILITY.

Section 2.1         Commitment to Lend.   Subject to the terms and conditions set forth in this Credit Agreement, each Revolving Credit Lender severally agrees to lend to the Borrower and the Borrower may borrow, repay, and reborrow from time to time between the Closing Date and the Revolving Credit Loan Maturity Date upon notice by the Borrower to the Agent given in accordance with Section 2.5, (each a “Revolving Loan” and collectively “Revolving Credit Loans”) such sums equal to such Revolving Credit Lender’s Revolving Credit Loan Commitment Percentage requested by Borrower hereunder; provided , that the sum of the outstanding amount of the Revolving Credit Loans (after giving effect to all amounts requested)  plus the Foreign Exchange Reserve plus the Maximum Drawing Amount and Unpaid Reimbursement Obligations, shall not at any time exceed the lesser of (a) the Revolving Credit Loan Commitment and (b) the Borrowing Base.  Each request for a Revolving Credit Loan or the entering into a Foreign Exchange Contract or the submission of an application for the issuance of a Letter of Credit hereunder shall constitute a representation and warranty by the Borrower that the conditions set forth in Article 13, in the case of the initial Revolving Credit Loans to be made on the Closing Date, and Article 14, in the case of all others have been satisfied on the date of such request.

Section 2.2         Revolving Loan Commitment Fee.   The Borrower shall pay to the Agent for the benefit of all Revolving Credit Lenders, in accordance with their respective Pro Rata Share of the Revolving Credit Loan Commitment, a commitment fee (the “Commitment Fee”) in the amount calculated by multiplying:  (i) one half of one percent (0.50%) per annum and (ii) the average daily amount during each calendar quarter or portion thereof from the Closing Date to the Revolving Credit Loan Maturity Date by which the Revolving Credit Loan Commitment exceeds the outstanding amount of Revolving Credit Loans during such calendar quarter or portion thereof.  The Commitment Fee shall be payable quarterly in arrears on the last day of each calendar quarter or portion thereof for the immediately preceding calendar quarter such payment commencing on December 31, 2008, with a final payment on the Revolving Credit Loan Maturity Date or any earlier date on which the Revolving Credit Loan Commitment shall terminate.

Section 2.3         Reduction of Revolving Credit Loan Commitment.   Subject to the payment of any fees, indemnities, costs and expenses for prepaying any LIBOR Rate Loans as required hereunder, the Borrower shall have the right at any time and from time to time upon five (5) Business Days’ prior written notice to the Agent to reduce by $100,000 or an integral multiple thereof or terminate entirely the Revolving Credit Loan Commitment, whereupon the Revolving Credit Loan Commitment shall be reduced pro rata in accordance with the Revolving Credit Commitments of the Revolving Credit Lenders by the amount specified in such notice or, as the case may be, terminated; provided , that the Borrower shall not reduce the Revolving Credit Loan Commitment more than twice prior to the Revolving Credit Maturity Date and provided , further , that the Revolving Credit Loan Commitment shall not be reduced to an amount less than the Foreign Exchange Reserve.  Upon the effective date of any such reduction or termination, the Borrower shall pay to the Agent for the benefit of the Revolving Credit Lenders the full amount of any commitment fee then accrued on the amount of such reduction.  No reduction or termination of the Revolving Credit Loan Commitment may be reinstated.

Section 2.4         The Revolving Credit Note.   The Revolving Credit Loans made by each Revolving Credit Lender shall be evidenced by a promissory note of the Borrower in favor of such Revolving Credit Lenders in substantially the form of Exhibit A-1 hereto (the “Revolving Credit Note”), in the amount of such Revolving Credit Lender’s Pro Rata Share of the Revolving Credit Loan Commitment dated as of the Closing Date and completed with appropriate insertions.  The Revolving Credit Note shall be payable to the order of each Revolving Credit Lender in the principal amount of their Pro Rata Share of the Revolving Credit Loan Commitment.  The Borrower irrevocably authorizes the Agent to make or cause to be made, at or about the time of the Drawdown Date of any Revolving Credit Loan or at the time of receipt of any payment of principal, an appropriate notation on each Lender’s Revolving Credit Note Record reflecting the making of such Revolving Credit Loan or (as the case may be) the receipt of such payment.  The outstanding amount of the Revolving Credit Loans set forth on each Revolving Credit Lender’s Revolving Credit Note Record or other records of each Revolving Credit Lender shall be, absent manifest error, prima facie evidence of the principal amount thereof owing and unpaid to such Revolving Credit Lender, but the failure to record, or any error in so recording, any such amount on such Revolving Credit Lender’s Revolving Credit Note Record shall not limit or otherwise affect the obligations of the Borrower hereunder or under any Revolving Credit Note to make payments of principal of, or interest on, any Revolving Credit Note when due.

Section 2.5       Requests for Revolving Loans; Continuation and Conversion.

(a)        Whenever the Borrower desires to obtain or to continue a Revolving Credit Loan hereunder or convert an outstanding Revolving Credit Loan into a Revolving Credit Loan of another type, the Borrower shall notify (“Notice of Revolving Credit Loan Borrowing) in the form annexed hereto as Exhibit B as of the date of the Notice of Revolving Credit Loan Borrowing, the Agent by written notice (which notice shall be irrevocable and may be provided by telecopy) received no later than 1:00 p.m. Boston time on the Business Day on which the requested Revolving Credit Loan is to be made or continued as or converted to a Base Rate Loan and in the case of a LIBOR Rate Loan received no later than 11:00 p.m. Boston time on the date two (2) Business Days before the day on which the requested Revolving Credit Loan is to be made or continued as or converted to a LIBOR Rate Loan.  For purposes of the Notice of Revolving Credit Loan Borrowing for a LIBOR Rate Loan, such notice must specify:  the minimum of the outstanding principal the Borrower wishes the LIBOR Rate to apply to, provided such borrowing shall be in the minimum amount of $500,000 and in integrals of $125,000 above such amount.  All LIBOR Rate Loans hereunder shall be limited to not more than four (4) different maturities at any time.  If the Agent does not receive a Notice of Revolving Credit Loan Borrowing containing an Interest Period for a LIBOR Rate Loan within the applicable time limits set forth herein, or if when a Notice of Revolving Credit Loan Borrowing must be given, a Default exists or an Event of Default has occurred and is continuing, the Borrower shall be deemed to have elected to borrow or to convert such Revolving Credit Loan, in whole, into a Base Rate Loan on the last day of the then current Interest Period.  Each Notice of Revolving Credit Loan Borrowing shall be irrevocable and binding on the Borrower and shall obligate the Borrower to accept the Revolving Credit Loan requested from the Lenders on the applicable Drawdown Date.  Each Revolving Credit Loan will be made at the Agent’s Head Office by depositing the amount thereof into the Operating Account.

(b)        Promptly after receipt of a Notice of Revolving Credit Loan Borrowing, the Agent shall notify each Revolving Credit Lender by telephone, telex or telecopy of the proposed borrowing.  Each Revolving Credit Lender agrees that after its receipt of notification from the Agent of the Agent’s receipt of a Notice of Revolving Credit Loan Borrowing, such Revolving Credit Lender shall send its Pro Rata Share (or such portion thereof as may be necessary to provide the Agent with such Pro Rata Share in Dollars and in immediately available funds, without consideration or use of any contra accounts of any Revolving Credit Lender) of the requested Revolving Credit Loan by wire transfer to the Agent so that the Agent receives such Pro Rata Share in Dollars and in immediately available funds not later than 12:00 p.m. (Boston, Massachusetts time) on the Business Day for such Revolving Credit Loan set forth in the Notice of Revolving Credit Loan Borrowing.  The Agent shall advance funds to the Borrower’s by depositing such funds in the Operating Account upon the Agent’s receipt of such Pro Rata Shares in the amount of the Pro Rata Shares of such Revolving Credit Loan in the Agent’s possession.  Unless the Agent shall have been notified by any Revolving Credit Lender (which notice may be telephonic if confirmed promptly in writing) in respect of any Revolving Credit Loan which such Revolving Credit Lender is obligated to make under this Credit Agreement, that such Revolving Credit Lender does not intend to make available to the Agent such Revolving Credit Lender’s Pro Rata Share of such Revolving Credit Loan on such date, the Agent may assume that such Revolving Credit Lender has made such amount available to the Agent on such date and the Agent, in its sole discretion may, but shall not be obligated to, make available to the Borrower a corresponding amount on such date.  If such corresponding amount is not in fact made available to the Agent by such Revolving Credit Lender, the Agent shall be entitled to recover such corresponding amount from such Revolving Credit Lender promptly upon demand by the Agent together with interest thereon, for each day from such date until the date such amount is paid to the Agent, at the Defaulting Lender Rate.  If such Revolving Credit Lender does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower and the Borrower shall promptly pay such corresponding amount to the Agent.  Nothing contained in this Section 2.5(b) shall be deemed to relieve any Revolving Credit Lender from its obligation to fulfill its obligations hereunder or to prejudice any rights which the Borrower may have against any Revolving Credit Lender as a result of any default by such Revolving Credit Lender hereunder.

(c)        Within ten (10) days after any Revolving Credit Lender notifies the Agent that such Revolving Credit Lender does not intend to make available such Revolving Credit Lender’s Pro Rata Share (which notice Agent shall promptly (but in no event more than one (1) day after receipt) provide to the Borrower), the Borrower may, at its option, so long as no Default or no Event of Default has occurred and is continuing, notify such Defaulting Lender and Agent of its intention to obtain, at Defaulting Lender’s expense, a replacement lender (“Replacement Lender”) for such Revolving Credit Lender, which Replacement Lender must be reasonably satisfactory to the Agent.  In the event the Borrower obtains a Replacement Lender within ninety (90) days following notice of its intention to do so, Defaulting Lender shall sell, at par, Defaulting Lender’s interest in the Revolving Credit Loans, the Obligations related thereto and its rights hereunder as a Revolving Credit Lender arising from and after the date of such sale (but not its rights and liabilities in respect thereof or under this Credit Agreement and the other Loan Documents for obligations, indemnities and other matters arising or matters occurring before the date of such sale) shall terminate on the date of such sale, and Defaulting Lender shall promptly execute all documents reasonably requested to surrender and transfer such interest.  Upon any such sale and payment, such replaced Defaulting Lender shall no longer constitute a “Lender” for purposes hereof (except to the extent that such Lender is also a Term Loan A Lender or a Term Loan B Lender), other than with respect to such rights and obligations that survive termination as set forth herein.  Without in any manner limiting the remedies of Lenders, the obligations of a Defaulting Lender to sell and assign its Pro Rata Share under this Section 2.5(c) shall be specifically enforceable by the Borrower, Agent and/or the other Lenders, by an action brought in any court of competent jurisdiction for such purpose, it being acknowledged and agreed that, in light of the disruption in the administration of the Loans and the other terms of the Loan Documents that a Defaulting Lender may cause, damages and other remedies at law are not adequate.

Section 2.6         Payment and Sharing of Payment .

(a)        On a Business Day of each week as selected from time to time by the Agent, or more frequently (including daily), if the Agent so elects (each such day being a “Settlement Date”), the Agent will advise each Revolving Credit Lender by telephone, facsimile or e-mail of the amount of each such Revolving Credit Lender’s Pro Rata Share of the Revolving Credit Loan balance as of the close of business of the Business Day immediately preceding the Settlement Date.  In the event that payments are necessary to adjust the amount of such Revolving Credit Lender’s actual Pro Rata Share of the Revolving Credit Loan balance to such Revolving Credit Lender’s required Pro Rata Share of the Revolving Credit Loan balance as of any Settlement Date, the party from which such payment is due shall pay the Agent, without setoff or discount, not later than noon (Boston time) on the Business Day following the Settlement Date the full amount necessary to make such adjustment.  Any obligation arising pursuant to the immediately preceding sentence shall be absolute and unconditional and shall not be affected by any circumstance whatsoever.  In the event settlement shall not have occurred by the date and time specified in the second preceding sentence, interest shall accrue on the unsettled amount at the Defaulting Lender Rate, until paid.

(b)        On each Settlement Date, the Agent shall advise each Revolving Credit Lender by telephone, facsimile or e-mail of the amount of such Revolving Credit Lender’s Pro Rata Share of principal, interest and fees paid for the benefit of Revolving Credit Lenders with respect to each applicable Revolving Credit Loan, to the extent of such Revolving Credit Lender’s credit exposure with respect thereto, and shall make payment to such Revolving Credit Lender not later than noon (Boston time) on the Business Day following the Settlement Date of such amounts in accordance with wire instructions delivered by such Revolving Credit Lender to the Agent, as the same may be modified from time to time by written notice to the Agent; provided, that, in the case such Revolving Credit Lender is a Defaulting Lender, the Agent shall be entitled to set off the funding short-fall against that Defaulting Lender’s respective share of all payments received from the Borrower.

(c)        The provisions of this Section 2.6 shall be deemed to be binding upon the Agent and the Revolving Credit Lenders notwithstanding the occurrence of any Default or Event of Default, or any Insolvency Proceeding pertaining to Borrower or any of its Subsidiaries.

Section 2.7         Change in Borrowing Base.   The Borrowing Base shall be determined monthly (or at such other interval as may be specified pursuant to Section 10.4(h) by the Agent by reference to the Borrowing Base Report delivered to the Agent pursuant to Section 10.4(h).  The Agent shall give written notice to the Borrower of any change in the Borrowing Base as determined by the Required Lenders.  In the case of a reduction in the lending formula with respect to Eligible Accounts Receivable or Eligible Raw Material and Finished Goods Inventory, such notice shall be effective two (2) days after its receipt by the Borrower, and in the case of any change in the general criteria for Eligible Accounts Receivable or Eligible Raw Material and Finished Goods Inventory, such notice shall be effective upon its receipt by the Borrower.  Prior to the time that such notice becomes effective, the Borrowing Base shall be computed as it would have been computed in the absence of such notice.

ARTICLE 3.  REPAYMENT OF THE REVOLVING CREDIT LOANS.

Section 3.1         Maturity.   The Borrower promises to pay on the Revolving Credit Loan Maturity Date, and there shall become absolutely due and payable on the Revolving Credit Loan Maturity Date, all of the Revolving Credit Loans outstanding on such date, together with any and all accrued and unpaid interest thereon.

Section 3.2         Mandatory Repayments of Revolving Credit Loans .  If at any time, the sum of the outstanding amount of the Revolving Credit Loans plus the Maximum Drawing Amount and all Unpaid Reimbursement Obligations plus the Foreign Exchange Reserve exceeds the lesser of (i) the Revolving Credit Loan Commitment and (ii) the Borrowing Base, then the Borrower shall immediately pay the amount of such excess to the Agent for application:  first, to any Unpaid Reimbursement Obligations, second to the Revolving Credit Loans for the accounts of the Revolving Credit Lenders for application to their Pro Rata Share; and third, to provide TD Bank cash collateral for Reimbursement Obligations as contemplated by Section 7.2(b) and (c).  Notwithstanding the foregoing, in the event that the sum of the outstanding amount of the Revolving Credit Loans plus the Maximum Drawing Amount and all Unpaid Reimbursement Obligations plus the Foreign Exchange Reserve exceeds the lesser of (i) the Revolving Credit Loan Commitment and (ii) the Borrowing Base as a result of a change in the Borrowing Base pursuant to Section 2.7 hereof, the Borrower shall not be required to make such mandatory repayment until the date that any Borrowing Base Report immediately following the date of such change in the Borrowing Base is required to be delivered.

Section 3.3         Optional Repayments of Revolving Credit Loans.   The Borrower may, at any time or from time to time, prepay the outstanding amount of the Revolving Credit Loans, as a whole or in part, at any time without penalty or premium.  The Borrower shall give the Agent, no later than 11:00 a.m. (Boston time) at least one (1) Business Day’s prior written notice, by facsimile or otherwise (confirmed in writing), of any proposed prepayment pursuant to this Section 3.3 of any Revolving Credit Loans specifying the proposed date of prepayment of Revolving Credit Loans and the principal amount to be prepaid.  Partial prepayments of the Revolving Credit Loans shall be in an integral multiple of $50,000 or any multiple of $10,000 in excess thereof.

ARTICLE 4.  TERM LOANS.

Section 4.1        Term Loan A; Term Loan B; Commitment to Lend.

(a)        Subject to the terms and conditions set forth in this Credit Agreement, each of the Term Loan A Lenders severally agrees to lend its Term Loan A Commitment Percentage in one  advance on the Closing Date, in an aggregate principle amount for all Term Loan A Lenders not to exceed $25,500,000.  The proceeds of Term Loan A shall be used exclusively for the Acquisition.

(b)        Subject to the terms and conditions set forth in this Credit Agreement, each of the Term Loan B Lenders severally agrees to lend its Term Loan B Commitment Percentage in one advance on the Closing Date, in an aggregate principle amount for all Term Loan B Lenders not to exceed $2,500,000.  The proceeds of Term Loan B shall be used exclusively for the Acquisition, fees and expenses with respect to the Acquisition and fees and expenses with respect to the Loans.

(c)        Once repaid, none of the Term Loans may be reborrowed.

Section 4.2        The Term Notes.

(a)        The Term Loan A made by each Term Loan A Lender shall be evidenced by a promissory note of the Borrower in favor of such Term Loan A Lender, in substantially the form of Exhibit A-2 hereto (the “Term A Note”) in the amount of such Term Loan A Lender’s Term Loan A Commitment Percentage dated as of the Closing Date and completed with appropriate insertions.

(b)        The Term Loan B made by each Term Loan B Lender shall be evidenced by a promissory note of the Borrower in favor of such Term Loan B Lender, in substantially the form of Exhibit A-3 hereto (the “Term B Note”) in the amount of such Term Loan B Lender’s Term Loan B Commitment Percentage dated as of the Closing Date and completed with appropriate insertions.

Section 4.3         Term Loans Continuation.   Whenever the Borrower desires to continue a Term Loan hereunder, the Borrower shall notify (“Notice of Term Loan Borrowing) in the form annexed hereto as Exhibit C as of the date of the Notice of Term Loan Borrowing, the Agent by written notice (which notice shall be irrevocable and may be provided by telecopy) received no later than 11:00 p.m. Boston time on the date two (2) Business Days before the day on which the requested Term Loan is to be continued.  For purposes of the Notice of Term Loan Borrowing for a LIBOR Rate Loan, such notice must specify:  the minimum of the outstanding principal the Borrower wishes the LIBOR Rate to apply to, provided such borrowing shall be in the minimum amount of $500,000 and in integrals of $125,000 above such amount.  All LIBOR Rate Loans hereunder shall be limited to not more than five (5) different maturities at any time.  If the Agent does not receive a Notice of Term Loan Borrowing containing an Interest Period for a LIBOR Rate Loan within the applicable time limits set forth herein, or if when a Notice of Term Loan Borrowing must be given, a Default exists or an Event of Default has occurred and is continuing, the Borrower shall be deemed to continue such Term Loan, in whole with the same Interest Period, on the last day of the then current Interest Period.

ARTICLE 5.  REPAYMENT OF TERM LOAN.

Section 5.1        Scheduled Principal Amortization.

(a)          Term Loan A Note .  The Borrower promises to make, in addition to interest thereon, principal payments to the Term Loan A Lenders, monthly as follows commencing with the payment on February 1, 2009 and on the first day of each month thereafter through and including the Term Loan A Maturity Date:

(b)         Term Loan B Note .  The Borrower promises to make, in addition to interest thereon, principal payments to the Term Loan B Lenders monthly commencing with the payment o on February 1, 2009 and on the first day of each month thereafter through and including the Term Loan B Maturity Date, in equal principal amounts of $10,416.67 with all remaining outstanding principal thereunder due and payable on the Term Loan B Maturity Date.

Section 5.2         Optional Prepayments.   The Borrower may, at any time or from time to time, subject to also making the payments required under this Section 5.2, upon not less than three (3) Business Days irrevocable written notice to the Agent in respect of LIBOR Rate Loans, prepay any Term Loan in whole or in part, in the minimum amount of $100,000 (or the remainder if less), and all other charges provided in this Section 5.2.  Such notice of prepayment shall specify the date and amount of such prepayment and the portion of the Term Loan being prepaid.  If such notice is given by the Borrower, the Borrower shall make such prepayment and the prepayment amount specified in such notice shall be due and payable on the date specified therein, together, with accrued interest to each such date on the amount prepaid and, in the case of LIBOR Rate Loans any amounts required to be paid under Article 6 hereof for prepayment of any LIBOR Rate Loans other than on the last day of an Interest Period.  Optional prepayments of the Term Loan shall be applied to principal payment installments in their inverse order of maturity.

Section 5.3        Mandatory Prepayments.

The Borrower shall be required to make prepayments of the Term Loans as set forth below (each a “Mandatory Prepayment”), such payments being due and payable on the date on which any amount described below is received by the Borrower or the Borrower is entitled to receive cash payments therefor to be applied first to the repayment of the Term Loan A and when the Term Loan A has been repaid in full then to the repayment of the Term Loan B:

(a)        an amount equal to 100% of the Net Proceeds received by the Borrower or any of its Subsidiaries from the sale or other disposition of any of its Capital Assets, except for (i) sales of inventory in the ordinary course of business or (ii) sales of any assets no longer used or useful in the conduct of such business, provided , with respect to clause (ii) immediately preceding, that no Default or Event of Default then exists or would exist after giving effect to such use of Net Proceeds, the value of such assets does not exceed $500,000 in any fiscal year, the Borrower or such Subsidiary uses the cash proceeds of any such sale to purchase replacement or other equipment within 120 days of such sale, and such sales are at fair market value;

(b)        subject to Section 11.1, an amount equal to 100% of the proceeds received by the Borrower or any of its Subsidiaries from (i) the incurrence of any Indebtedness for borrowed money (other than borrowings hereunder) or (ii) the issuance of any Shares of the Borrower other than (A) with respect to a Permitted Acquisition and all of the proceeds of such issuance are used in such Permitted Acquisition, or (B) with respect to issuance of shares of the Borrower for an aggregate consideration of up to $500,000, to the holder of any Permitted Indebtedness as consideration for the issuance, refinancing or restructuring of such Permitted Indebtedness, or (C) if no Default or Event of Default has occurred and is continuing, the issuance of shares of the Holding Company so long as no Change of Control results after giving effect to such issuance or series of related issuances, in each case, excluding reasonable fees and expenses incurred by such Person relating to the incurrence of such Indebtedness or issuance of Shares.

(c)        an amount equal to 100% of the Net Proceeds received by the Borrower or any of its Subsidiaries as insurance proceeds or condemnation awards, other than insurance proceeds or condemnation awards not in excess of an aggregate amount of $500,000 in respect of loss or damage to equipment, Inventory, fixed assets or real property to the extent such cash proceeds are applied to replace or repair the equipment, Inventory, fixed assets or real property in respect of which such proceeds were received, so long as such application is made within one hundred and twenty (120) days after the occurrence of such loss, damage, or condemnation;

(d)        an amount equal to 100% of all Extraordinary Receipts received by the Holding Company or any of its Subsidiaries; and

(e)        commencing with a payment on May 1, 2010 and on each May 1 thereafter, an amount equal to 75% of Excess Cash Flow for the immediately preceding fiscal year of the Borrower, for application to the prepayment of the Term Loan A and thereafter to the Term Loan B as provided above.  The payment of such Excess Cash Flow shall be in addition to, and not in lieu of, any monthly amortization payment required hereunder.

(f)         the proceeds derived under (a) – (d) above shall be applied first, to the extent possible, to prepay any Base Rate Loans and then to prepay LIBOR Rate Loans ( provided , that upon Borrower’s written request, so long as no Default or no Event of Default has occurred and is continuing, the Agent shall use commercially reasonable efforts to hold such proceeds as cash collateral, so long as such proceeds are in a segregated account to which the Borrower and its Subsidiaries have no access or withdrawal rights, to be used to prepay LIBOR Rate Loans to minimize breakage costs).

Section 5.4         Term Loan Payments Settlement .   (a)  Payments of principal, interest and fees in respect of the Term Loans will be settled on the date of receipt if received by Agent on the first Business Day of a month or on the Business Day immediately following the date of receipt if received on any day other than the first Business Day of a month.

(a)        Any amounts required to be paid under Section 5.3 shall be applied to the prepayment of the Term Loan pro rata in accordance with each Lender’s Pro Rata Share of the Term Loan and if the Term Loan shall have been repaid, then such payments shall be applied pro rata in accordance with each Lender’s Pro Rata Share of the Revolving Credit Loan Commitment.

Section 5.5         Late Fee.   The Borrower will pay on demand a late charge for payments of interest and principal which are not made when due and payable assessed at five percent (5%) of the overdue payment.  Such late charge payments are made for the purpose of compensating the Lenders for their administrative costs and expenses in handling late payments, losses in connection therewith and increased risk.  If Lender elects to charge such late fee, then the outstanding Loans shall not accrue interest at the Default Rate.

ARTICLE 6.  CERTAIN GENERAL PROVISIONS.

Section 6.1         Origination Fee.   The Borrower will pay to the Agent for the benefit of the Lenders on the Closing Date an origination fee (the “Origination Fee”) in the amount of Four Hundred Fifteen Thousand Dollars ($415,000).  The Origination Fee shall be deemed fully earned on the Closing Date and shall not be subject to rebate or return, in whole or in part under any circumstances.

Section 6.2        Interest on Loans.

(a)        Unless an Event of Default shall have occurred and the Default Rate applies, the outstanding principal of the Term Loans shall bear interest at the Reserve Adjusted LIBOR plus the Applicable Margin for the LIBOR Rate Loans.

(b)        Unless an Event of Default shall have occurred and the Default Rate applies, the outstanding principal of the Revolving Credit Loans shall bear interest at a rate per annum selected by the Borrower equal to:

(i)            the Base Rate; or

(ii)            Reserve Adjusted LIBOR plus the Applicable Margin for the LIBOR Rate Loans.

(c)        The Borrower promises to pay interest on the outstanding amount of each Revolving Credit Loan, in arrears, on the first day of each calendar month commencing with the payment to be made on February 1, 2009 (subject to the Following Business Day Convention).

(d)        The Borrower promises to pay interest on the outstanding amount of each of the Term Loans, in arrears, on the first day of each calendar month commencing with the payment to be made on February 1, 2009 (subject to the Following Business Day Convention).

Section 6.3        Funds for Payments.

(a)        All payments of principal, interest, commitment fees, facility fees and any other amounts due hereunder or under any of the other Loan Documents shall be made to the Agent at the Agent’s Head Office, in each case in immediately available funds.

(b)        All payments by the Borrower hereunder and under any of the other Loan Documents to or for the account of any Lender or the Agent hereunder or under any of the other Loan Documents shall be made without setoff or counterclaim and free and clear of and without deduction for any taxes, levies, imposts, duties, charges, fees, deductions, withholdings, compulsory loans, restrictions or conditions of any nature now or hereafter imposed or levied by any jurisdiction or any political subdivision thereof or taxing or other authority therein unless the Borrower is compelled by law to make such deduction or withholding.  If any such obligation is imposed upon the Borrower with respect to any amount payable by it hereunder or under any of the other Loan Documents, the Borrower will pay to the Agent for the benefit of the Lenders on the date on which such amount is due and payable hereunder or under such other Loan Document, such additional amount in Dollars as shall be necessary to enable each Lender to receive the same net amount which such Lender would have received on such due date had no such obligation been imposed upon the Borrower.

Section 6.4         Computations.   All computations of interest on the Loans and of other fees to the extent applicable shall be based on a 360-day year and paid for the actual number of days elapsed for LIBOR Rate Loans.  Whenever a payment hereunder or under any of the other Loan Documents becomes due on a day that is not a Business Day, the due date for such payment shall, except as otherwise provided in the case of a LIBOR Rate Loan, be extended to the next succeeding Business Day, and interest shall accrue during such extension.

Section 6.5         Additional Costs, Etc.   If any present or future applicable law, which expression, as used herein, includes statutes, rules and regulations thereunder and interpretations thereof by any competent court or by any governmental or other regulatory body or official charged with the administration or the interpretation thereof and requests, directives, instructions and notices at any time or from time to time hereafter made upon or otherwise issued to any Lender by any central bank or other fiscal, monetary or other authority (whether or not having the force of law), shall:

(a)        subject any Lender to any tax, levy, impost, duty, charge, fee, deduction or withholding of any nature with respect to this Credit Agreement, the other Loan Documents, the Revolving Credit Loan Commitment or the Loans, any Letters of Credit or any Foreign Exchange Contracts (other than taxes based upon or measured by the income or profits of a Lender or taxes in lieu thereof), or

(b)        materially change the basis of taxation (except for changes in taxes on income or profits) of payments to any Lender of the principal of or the interest on any Loans or any other amounts payable to any Lender under this Credit Agreement or the other Loan Documents, or

(c)        impose or increase or render applicable (other than to the extent specifically provided for elsewhere in this Credit Agreement) any special deposit, reserve, assessment, liquidity, capital adequacy or other similar requirements (whether or not having the force of law) against assets held by, or deposits in or for the account of, or loans, Letters of Credit or Foreign Exchange Contracts by, or commitments of an office of a Lender, or

(d)        impose on any Lender any other conditions or requirements with respect to this Credit Agreement, the other Loan Documents, the Loans, the Revolving Credit Loan Commitment, or any class of loans or commitments of which any of the Loans or the Revolving Credit Loan Commitment forms a part;

and the result of any of the foregoing is:

(i)            to increase the cost to such Lender of making, funding, issuing, renewing, extending or maintaining any of the Loans or the Revolving Credit Loan Commitment issuing the Letter of Credit or enter into the Foreign Exchange Contract, or

(ii)          to reduce the amount of principal, interest or other amount payable to such Lender hereunder on account of the Revolving Credit Loan Commitment or any of the Loans, or

(iii)         to require such Lender to make any payment or to forego any interest or other sum payable hereunder, the amount of which payment or foregone interest or other sum is calculated by reference to the gross amount of any sum receivable or deemed received by such Lender from the Borrower hereunder,

then, and in each such case, the Borrower will, upon demand made by such Lender   at any time and from time to time and as often as the occasion therefor may arise, pay to such Lender such additional amounts as will be sufficient to compensate such Lender for such additional cost, reduction, payment or foregone interest or Reimbursement Obligation or other sum.  Such Lender shall allocate such cost increases among its customers in good faith and on an equitable basis.

Section 6.6        Capital Adequacy.   If any present or future law, governmental rule, regulation, policy, guideline or directive (whether or not having the force of law) or the interpretation thereof by a court or Governmental Authority with appropriate jurisdiction affects the amount of capital required or expected to be maintained by any Lender or any corporation controlling any Lender determines that the amount of capital required to be maintained by it is increased by or based upon the existence of such Loans made or deemed to be made pursuant hereto (or any issuance of any Letter of Credit or entering into any Foreign Exchange Contract), then such Lender   may notify the Borrower of such fact, and the Borrower shall pay to such Lender from time to time on demand, as an additional fee payable hereunder, such amount as such Lender shall determine in good faith and certify in a notice to the Borrower to be an amount that will adequately compensate such Lender in light of these circumstances for its increased costs of maintaining such capital.  Such Lender shall allocate such cost increases among its customers in good faith and on an equitable basis.

Section 6.7         Certificate.   A certificate setting forth any additional amounts payable pursuant to Sections 6.5 or 6.6 and a brief explanation of such amounts which are due, submitted by such Lender to the Borrower, shall be prima facie evidence that such amounts are due and owing.

Section 6.8         Interest Following Event of Default; Late Charge.   At the option of the Lenders, overdue principal and (to the extent permitted by applicable law) interest on the Loans and all other overdue amounts payable hereunder or under any of the other Loan Documents and all amounts outstanding after the occurrence of any Event of Default which is continuing, shall bear interest payable on demand at a rate (“Default Rate”) per annum equal to two percent (2%) above the highest rate then otherwise applicable on the Loans until such amount shall be paid in full (after as well as before judgment) or the Borrower shall pay on demand therefor by the Agent, to the Agent for the benefit of the Lenders, a late fee of five percent (5%) of the amount which is overdue which late fee is not a penalty but is a liquidated damages payment to compensate the Lenders for such late payments.  The imposition of the Default Rate or the charge of such late fee shall not cure any Event of Default which was caused by the failure to make such timely payment.

Section 6.9         Inability to Determine LIBOR.   In the event, prior to the commencement of any Interest Period relating to any LIBOR Rate Loan, the Agent shall determine that adequate and reasonable methods do not exist for ascertaining the LIBOR Rate that would otherwise determine the rate of interest to be applicable to any LIBOR Rate Loan during any Interest Period, the Agent shall forthwith give notice of such determination (which shall be conclusive and binding on the Borrower and the Lenders) to the Borrower and the Lenders.  In such event:  (a) any Notice of Borrowing with respect to LIBOR Rate Loans shall be automatically withdrawn and the LIBOR Rate Loan shall be converted into a Base Rate Loan, (b) each LIBOR Rate Loan will automatically, on the last day of the then current Interest Period thereof, be converted into a Base Rate Loan, and (c) the obligations of the Lenders to make LIBOR Rate Loans shall be suspended until the Agent determines that the circumstances giving rise to such suspension no longer exist, whereupon the Agent shall so notify the Borrower and the Lenders.

Section 6.10       Illegality .   Notwithstanding any other provisions herein, if any present or future law, regula