Resignation Agreement – Bitstream Inc.

RESIGNATION AGREEMENT

This Resignation Agreement (this “Agreement“) is entered
into between Bitstream Inc. (“Employer“) and Anna Chagnon
(“Executive“), on this 1st day of May 2011.

WHEREAS, the parties agree that Executive will resign and settle their rights
and obligations;

NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth below and other good and valuable consideration, the sufficiency of which
is hereby acknowledged, Executive and Employer agree as follows:

1. Resignation Date. Effective May 1, 2011 (the “Resignation
Date“), Executive hereby resigns as President and Chief Executive
Officer and a director of Employer and as an employee of Employer.

2. Payments and Other Benefits. No later than May 9, 2011, Employer
shall pay Executive a lump sum cash payment of $600,000 (representing an amount
equal to two years of Executive153s salary), subject to applicable withholding
obligations. If Executive dies before receiving the payment stated herein, the
remainder will be paid to her husband, and if he is not alive at the time, to
her estate. Employer shall also reimburse Executive for any reasonable business
expenses she has incurred on behalf of Employer within 10 days after Executive
submits adequate documentation that such expenses were properly incurred.
Employer shall also pay Executive, at her current base salary rate, for 10 days
of vacation time that she has accrued but not used as of the Resignation Date.

Any vested restricted stock and/or vested stock options held by Executive as
of the Resignation Date or which otherwise become vested as provided in this
Section 2 shall continue to be subject to the terms and conditions of the
Bitstream, Inc. 2006 Incentive Compensation Plan or Bitstream, Inc. 2000 Stock
Plan, as applicable, and the related award agreements (collectively, the
“Award Documents“). The restricted stock shares that
would have become vested in May 2011 had Executive153s employment continued until
the end of May 2011 shall become vested and exercisable on their regular vesting
date in May 2011 and shall, for purposes of this Section 2, be considered vested
as of such date. Notwithstanding anything in the Award Documents to the
contrary, any unvested options and/or restricted stock held by Executive as of
the Resignation Date shall continue to be held by Executive and shall not be
forfeited upon the Resignation Date, but shall not become vested (except to the
limited extent provided in the preceding sentence) unless a “Change in Control”
is consummated on or before November 1, 2011. In the event a Change in Control
is consummated on or before November 1, 2011, all unvested restricted stock and
stock options held by Executive shall become vested immediately prior to the
Change in Control and shall continue to be subject to the terms and conditions
related to a Change in Control as provided in the Award Documents. If a Change
in Control is not consummated on or before November 1, 2011, such unvested
restricted stock and stock options shall be forfeited at the close of business
on such date. For such purposes, a “Change in Control” shall mean a Change in
Control as defined in the Severance Agreement, dated April 15, 2010, between
Employer and Executive (the “Severance Agreement“) and shall
include any sale of both of Employer153s OEM Fonts business and Employer153s MyFonts
business. Notwithstanding anything in the foregoing to the contrary, in no event
shall any stock options held by Executive remain outstanding beyond the
expiration date of their original terms.

In addition, Employer shall pay up to $15,000 of Executive153s reasonable
attorneys fees in connection with the preparation of this Agreement. Payment
will be made no later than May 20, 2011. Payment will be made to Shilepsky
Hartley Robb Casey Michon LLP.

Employer agrees that it shall not contest any application for benefits that
Executive may make to the Massachusetts Division of Unemployment Assistance, it
being understood that it shall not be a violation of this provision for Employer
to respond truthfully to requests for information made by the Massachusetts
Division of Unemployment Assistance.

Executive agrees and acknowledges that the benefits and compensation conveyed
by this Section 2 exceed the benefits and compensation to which Executive would
otherwise be entitled.

3. Nondisparagement. Executive agrees that she will not make any
statement, directly or indirectly, oral or written, which criticizes or is
disparaging of or which is intended to or could reasonably be expected to damage
the business or reputation of Employer, or any of its directors, officers,
shareholders, employees, counsel or agents, or its products, technical
abilities, research, services, organizational structure or business and
operational methods. This paragraph does not prohibit accurate and truthful
statements to the extent required to be made in connection with compulsory legal
process or testimony in legal proceedings. Executive will notify Employer
promptly if served with any legal process calling for disclosure of information
regarding Employer, the business or operations of Employer or its directors,
officers, shareholders, employees, counsel or agents.

Employer and its executive officers and the members of its Board of Directors
agree that they will not make (and that they shall instruct Employer153s
investment banker not to make) any statement, directly or indirectly, oral or
written, which criticizes or is disparaging of or which is intended to or could
reasonably be expected to damage the business or reputation of Executive. This
paragraph does not prohibit accurate and truthful statements to the extent
required to be made in connection with compulsory legal process or testimony in
legal proceedings. Employer will notify Executive promptly if served with any
legal process calling for disclosure of information regarding Executive.
Potential new Employers will be told that Executive resigned.

The parties agree to the following: Employer will send on behalf of Executive
an email (provided by Executive to Employer) to all employees of the Employer on
the morning of May 2, 2011 announcing her departure and thanking them for their
hard work. The parties agree that this email will be the first announcement of
her departure.

The parties agree that the Employer shall issue a press release in the form
attached as Exhibit A hereto announcing Executive153s departure.

4. General Release by Executive. Except as stated herein, Executive
completely releases Employer, its affiliates, and each of their present and
former directors, officers, shareholders, employees, counsel or agents
(collectively, the “Released Parties“) from all claims of any
kind, known and unknown, that Executive had in the past or now has against the
Released Parties through the date of execution of this Agreement. This full
waiver and release includes all claims arising from Executive153s employment or
association with Employer, this Agreement, the termination of Executive153s
employment with Employer, and/or the events leading up to the termination of
Executive153s employment (collectively, the “Released Claims“);
provided that the

Released Claims expressly do not include the separation benefits specified in
Section 2 hereof, claims for breach of this Agreement, any accrued wages and
vacation pay that as of the date hereof remain unpaid, any right to vested
benefits under any Employer benefit plan, rights to indemnification and
disability benefits, claims for unemployment benefits, rights to COBRA. By way
of example and not in limitation, the Released Claims shall include any claims
for severance and any claims arising under Title VII of the Civil Rights Act of
1964, the Americans with Disabilities Act, and the Age Discrimination in
Employment Act. Notwithstanding anything in this Agreement to the contrary,
Executive is not releasing any claims to challenge the validity of this release
under the Age Discrimination in Employment Act, any claims that arise after
Executive signs this Agreement, or any claims that Executive cannot waive by
operation of law.

Nothing in this Agreement shall limit Executive153s right to file a charge or
complaint with any state or federal agency or to participate or cooperate in
such a matter; however, Executive waives the right to monetary damages resulting
from any actions brought by federal or state agencies. Nothing in this Agreement
shall limit Executive153s right to join any shareholder claims against Employer.

Except as stated herein, Executive understands that this release is intended
to include all claims of any kind, including unknown losses or claims and claims
or losses that Executive may have underestimated in extent or value. Executive
expressly assumes the risk of such unknown or underestimated losses or claims
and acknowledges that the benefits to be provided to Executive pursuant to this
Agreement fully compensate Executive for such risks.

Executive acknowledges that:

a)

she has read and fully understands the legal effect of this Agreement, and understands that by signing this Agreement she is giving up the Released Claims;

b)

she has been advised of her right to take up to 21 days within which to consider whether to sign this Agreement, and, to the extent she signs this Agreement prior to such 21st day, she knowingly and voluntarily waives her right to consider for the remainder of such period;

c)

she has been advised to consult with her own attorney prior to signing this Agreement, and that she has had an adequate opportunity to seek such counsel;

d)

she has chosen to enter into this Agreement freely, without coercion and based upon her own judgment and not in reliance upon any promises made by Employer other than those contained in this Agreement; and

e)

she may revoke this Agreement by delivering a written notice of revocation to Employer, no later than the seventh day after she signs this Agreement.

5. General Release by the Employer. Employer completely releases
Executive, her heirs, successors, assigns and attorneys (collectively, the
“Released Parties“) from all claims of any kind, known and
unknown, that Employer had in the past or now has against the Released Parties
through the date of execution of this Agreement; provided that the claims
released in this Section 5 expressly do not include any claims arising from any
fraudulent or criminal conduct of Executive not known to Employer as of the
Resignation Date. Employer represents it knows of no claims against Executive at
the time of execution.

6. Governing Law. The validity, performance, construction and effect
of this Agreement shall be governed by the substantive laws of the Commonwealth
of Massachusetts, without regard to the provisions for choice of law thereunder.

7. Entire Agreement. This Agreement, along with any and all Stock
Agreements referenced herein, the confidentiality agreement signed by Executive
on July 14, 1997 and the Bitstream Code of Business Conduct and Ethics to which
Executive agreed to be bound, supersedes all other prior undertakings and
agreements, written or oral, as may have existed prior to the date of execution
of this Agreement with regard to the Released Claims. By the execution of this
Agreement, Executive acknowledges that any such superseded understandings and
agreements are terminated, and Executive disclaims any and all rights or
interest that may have existed with respect thereto. Further, any
representations, promises, agreements or understandings, written or oral, with
regard to the terms addressed in this Agreement that are not contained in this
Agreement shall be of no force or effect.

8. Effective Date. This Agreement shall become effective on the eighth
day after Executive signs it, provided she has not revoked the Agreement as
provided above. If Executive shall timely revoke this Agreement, it shall be
rendered void and without effect, and notwithstanding any other provision hereof
neither party shall have any obligation to the other hereunder.

9. 409A. The parties hereby state their joint belief that all payments and
benefits provided for under this Agreement are either exempt from Section 409A
of the Internal Revenue Code or comply with the requirements of such Section so
as not to cause an acceleration of taxation, or imposition of interest or
penalties, under Section 409A or any other provision of the Internal Revenue
Code and may be paid without application of the 6-month delay provisions of IRC
§409A(a)(2)(B)(i). Accordingly, the parties agree that all tax reporting and
withholding will be consistent with this understanding.

10. This Agreement may be executed in counterparts, in which case each such
counterpart shall be an original, and all counterparts together shall constitute
one and the same instrument. True and correct copies, including facsimile or PDF
copies of signed counterparts, may be used in place of originals for any
purpose.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
dates indicated below.

				ANNA CHAGNON
Date: May 1, 2011				/s/Anna M. Chagnon
				BITSTREAM, INC.
Date: May 1, 2011				/s/ Melvin L. Keating
				Melvin L. Keating, On behalf of the Board of Directors
				of Bitstream Inc.

Exhibit A

Anna Chagnon Resigns as President and CEO

MARLBOROUGH, Mass.:May, 2, 2011: Bitstream Inc. (NASDAQ:BITS) announced today
that its CEO and President, Anna Chagnon, has resigned. Amos Kaminski, the
Chairman of the Board, has agreed to take over as Executive Chairman and interim
CEO. Ms. Chagnon has also resigned as a director of the Company.

The Company is grateful to Ms. Chagnon for her years of service and wishes
her well in her future endeavors.

About Bitstream

Bitstream Inc. develops software technologies and applications for the
graphic art and mobile communications industries. Bitstream153s award-winning
fonts and font technologies enable device manufacturers and application
developers to render the highest quality text in any language, on any device, at
any resolution. The company153s MyFonts brand is the world153s leading provider of
fonts to consumers. Bitstream153s Pageflex brand enables marketers to easily
produce customized communications in print, email and online. The company153s
latest offering is the BOLT mobile browser, which has been installed by millions
of users worldwide since its release in February 2009. For more information
visit www.bitstream.com.