AMENDED AND RESTATED

1. ACCOUNTING AND OTHER TERMS.

2. LOAN AND TERMS OF PAYMENT.

3. CONDITIONS OF LOANS.

4. CREATION OF SECURITY INTEREST.

5. REPRESENTATIONS AND WARRANTIES.

2.1 Promise to Pay.

2.2 Overadvances.

2.3 Interest Rate, Payments.

2.4 Fees.

3.1 Conditions Precedent to Initial Credit Extension.

3.2 Conditions Precedent to all Credit Extensions.

5.1 Due Organization and Authorization.

5.2 Collateral.

5.3 Litigation.

5.4 No Material Adverse Change in Financial Statements.

5.5 Solvency.

5.6 Regulatory Compliance.

5.7 Investments.

5.8 Full Disclosure.

6. AFFIRMATIVE COVENANTS.

6.1 Government Compliance.

6.2 Financial Statements, Reports, Certificates.

6.3 Inventory; Returns.

6.4 Taxes.

6.5 Insurance.

6.6 Deposits.

6.7 Financial Covenant.

6.8 Registration of Intellectual Property Rights.

6.9 Further Assurances.

7. NEGATIVE COVENANTS.

7.1 Dispositions.

7.2 Changes in Business, Ownership, Management or Business Locations.

7.3 Mergers or Acquisitions.

7.4 Indebtedness.

7.5 Encumbrances.

7.6 Distributions; Investments.

7.7 Transactions with Affiliates.

7.8 Subordinated Debt.

7.9 Compliance.

8. EVENTS OF DEFAULT.

8.1 Payment Default.

8.2 Covenant Default.

8.3 Material Adverse Change.

8.4 Attachment.

8.5 Insolvency.

8.6 Other Agreements.

8.7 Judgments.

8.8 Misrepresentations.

9. BANK’S RIGHTS AND REMEDIES.

9.1 Rights and Remedies.

9.2 Power of Attorney.

9.3 Accounts Collection.

9.4 Bank Expenses.

9.5 Bank’s Liability for Collateral.

9.6 Remedies Cumulative.

9.7 Demand Waiver.

10. NOTICES.

11. CHOICE OF LAW , VENUE AND JURY TRIAL WAIVER.

12. GENERAL PROVISIONS

12.1 Successors and Assigns.

12.2 Indemnification.

12.3 Time of Essence.

12.4 Severability of Provision.

12.5 Amendments in Writing, Integration.

12.6 Counterparts.

12.7 Survival.

12.8 Confidentiality.

12.9 Attorneys’ Fees, Costs and Expenses.

13. DEFINITIONS.

13.1 Definitions.

2.1.1 Revolving Advances.

2.1.2 Cash Management Services Sublimit.

2.1.3 Foreign Exchange Sublimit.

2.1.4 Letters of Credit Sublimit.

2.1.5 Term Loans.

2.3.1 Debit of Borrower’s Accounts.

(a) Bank will make Revolving Advances not exceeding at any time the Committed Revolving Line minus the sum of (A) the Cash Management Services Sublimit, (B) the then-outstanding principal balance of all Revolving Advances, (C) the FX Sublimit, and (D) the amount of all outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit). Amounts borrowed under this Section 2.1.1 may be repaid and reborrowed through the Revolving Maturity Date.

(b) To obtain a Revolving Advance, Borrower must notify Bank by facsimile or telephone by 12:00 p.m., Pacific Time, one Business Day prior to the day on which the Revolving Advance is to be made. Borrower must promptly confirm the notification by delivering to Bank a completed Loan

Payment/Advance Request Form in the form attached as Exhibit B. Bank will credit Revolving Advances to Borrower’s deposit account. Bank may make Revolving Advances under this Agreement based on instructions from a Responsible Officer or his or her designee, or without instructions if the Revolving Advances are necessary to meet Obligations which have become due. Bank may rely on any telephone notice given by a person whom Bank reasonably believes is a Responsible Officer or designee. Borrower will indemnify Bank for any loss Bank suffers due to such reliance.

(c) The Committed Revolving Line terminates on the Revolving Maturity Date, when all Revolving Advances, and all accrued and unpaid interest thereon, are immediately due and payable, provided, however, that Borrower may elect to amortize up to $5,000,000 of the Committed Revolving Line (the “Deferred Amount”) over the thirty-six (36) month period beginning on the Revolving Maturity Date (the “Deferral Period”) by providing Bank written notice of such election at least 10 days prior to the Revolving Maturity Date. The Deferred Amount, if any, shall be payable on the first Business Day of each month during the Deferral Period until the last day of such period (the “Deferral Maturity Date”) in thirty-six (36) equal installments of principal plus interest.

(d) Bank’s obligation to lend the undisbursed portion of the Committed Revolving Line or any other credit available hereunder to Borrower will terminate if, in Bank’s sole discretion, there has been a Material Adverse Change or there has occurred any material adverse deviation from the most recent business plan of Borrower presented to and accepted by Bank prior to the execution of this Agreement.

Borrower may use up to $25,000,000 of the amounts available under Section 2.1.1(a) (the “Cash Management Services Sublimit”) for Bank’s Cash Management Services, which may include merchant services, direct deposit of payroll, automated clearing house transactions, controlled disbursement accounts, business credit card and check cashing services identified in various cash management services agreements related to such services (the “Cash Management Services”). The Cash Management Services Sublimit will reduce, on a dollar-for-dollar basis, the amount otherwise available to be borrowed under the Committed Revolving Line. Any amounts Bank pays on behalf of Borrower, and any amounts that are not paid by Borrower, for any Cash Management Services will be treated as Revolving Advances under the Committed Revolving Line and will accrue interest at the rate for Revolving Advances. Borrower agrees to execute any further documentation in connection with the Cash Management Services as Bank may request.

Bank will issue Letters of Credit for Borrower’s account in an aggregate face amount not exceeding the Committed Revolving Line minus (i) the outstanding principal balance of the Revolving Advances, (ii) the Cash Management Sublimit, and (iii) the FX Sublimit; provided, however, that the face amount of outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit) may at no

time exceed the Committed Revolving Line. Each Letter of Credit will have an expiry date of not later than 180 days after the Revolving Maturity Date, but Borrower’s reimbursement obligation will be secured by cash on terms acceptable to Bank at any time after the Revolving Maturity Date if the term of this Agreement is not extended by Bank. Borrower agrees to execute any further documentation in connection with the Letters of Credit as Bank may reasonably request.

(a) Borrower acknowledges and agrees that, as of the Closing Date, Borrower owes Bank the outstanding principal sum of $1,690,300 under a leasehold facility (hereinafter “Term Loan #1”), under which Borrower must pay to Bank installments of principal plus interest on the first Business Day of each month until the Term Loan #1 Maturity Date. Borrower’s final payment on the Term Loan #1 Maturity Date shall include all outstanding Term Loan #1 principal and accrued interest.

(a) Bank shall have received the agreements, documents and fees that it requires.

(b) An audit of the Collateral shall have been completed, and Bank shall have determined, in its sole discretion, that the results thereof are acceptable to Bank.

(c) Bank shall have received from Borrower signed control agreements, in form and substance acceptable to Bank, from all holders of investment properties or deposit accounts in which Borrower has an interest.

(d) Bank shall have received a copy of Borrower’s board-approved 2002 forecasts.

(e) Bank shall have received from Borrower evidence reasonably satisfactory to Bank showing Bank as loss payee on all of Borrower’s insurance policies pursuant to Section 6.5.

(f) Borrower shall have an aggregate balance of $20,000,000 in all of its accounts with the Bank.

(a) timely receipt of any Loan Payment/Advance Request Form; and

(b) the representations and warranties in Section 5 must be true in all material respects on the date of the Loan Payment/Advance Request Form and the Loan Supplement, and on the effective date of each Credit Extension, and no Event of Default may have occurred and be continuing, or result from the

Credit Extension. Each Credit Extension is Borrower’s representation and warranty on that date that the representations and warranties of Section 5 remain true in all material respects.

(a) Borrower will deliver to Bank: (i) as soon as available, but no later than 45 days after the last day of each calendar quarter, company-prepared unaudited balance sheets and income statements covering the operations of Borrower and its Subsidiaries during the period, certified by a Responsible Officer and in a form acceptable to Bank; (ii) as soon as available but no later than 90 days after the last day of Borrower’s fiscal year, audited financial statements for Borrower, and its Subsidiaries prepared under GAAP, consistently applied, together with an unqualified opinion on the financial statements from an independent certified public accounting firm reasonably acceptable to Bank; (iii) a prompt report of any legal actions pending or threatened against Borrower or any Subsidiary that could result in damages or costs to Borrower or any Subsidiary of $250,000 or more; (iv) annual financial projections of the Borrower, within 45 days after the end of each fiscal year of Borrower; and (v) prompt notice of any material change in the composition of the Intellectual Property, including any subsequent ownership right of Borrower or any Subsidiary in or to any Copyright, Patent or Trademark not shown in any intellectual property security agreement between Borrower and Bank or knowledge of an event that could reasonably be expected to materially adversely affect the value of the Intellectual Property.

(b) Within 45 days after the last day of each calendar quarter and concurrently with the delivery of the audited annual financial statements, Borrower will deliver to Bank with the quarterly financial statements and the annual financial statements a Compliance Certificate in the form of Exhibit C, signed by a Responsible Officer.

(c) Borrower will allow Bank to audit the Collateral at Borrower’s expense. The first such audit shall be completed on or before the Closing Date, and subsequent audits will be conducted no more often than every six months unless an Event of Default has occurred and is continuing (in which case the foregoing limitation on frequency will not apply).

EX-10.27 3 j3615_ex10d27.htm EX-10.27 Loan & Security Agreement

Exhibit 10.27

AMENDED AND RESTATED

LOAN AND SECURITY AGREEMENT

Broadvision, Inc.

AMENDED AND RESTATED

LOAN AND SECURITY AGREEMENT

TABLE OF CONTENTS

Heading

1.	ACCOUNTING AND OTHER TERMS.

2.	LOAN AND TERMS OF PAYMENT.
	2.1	Promise to Pay.
		2.1.1	Revolving Advances.
		2.1.2	Cash Management Services Sublimit.
		2.1.3	Foreign Exchange Sublimit.
		2.1.4	Letters of Credit Sublimit.
		2.1.5	Term Loans.
	2.2	Overadvances.
	2.3	Interest Rate, Payments.
		2.3.1	Debit of Borrower’s Accounts.
	2.4	Fees.

3.	CONDITIONS OF LOANS.
	3.1	Conditions Precedent to Initial Credit Extension.
	3.2	Conditions Precedent to all Credit Extensions.

4.	CREATION OF SECURITY INTEREST.

5.	REPRESENTATIONS AND WARRANTIES.
	5.1	Due Organization and Authorization.
	5.2	Collateral.
	5.3	Litigation.
	5.4	No Material Adverse Change in Financial Statements.
	5.5	Solvency.
	5.6	Regulatory Compliance.
	5.7	Investments.
	5.8	Full Disclosure.

6.	AFFIRMATIVE COVENANTS.
	6.1	Government Compliance.
	6.2	Financial Statements, Reports, Certificates.
	6.3	Inventory; Returns.
	6.4	Taxes.
	6.5	Insurance.
	6.6	Deposits.
	6.7	Financial Covenant.
	6.8	Registration of Intellectual Property Rights.
	6.9	Further Assurances.

7.	NEGATIVE COVENANTS.
	7.1	Dispositions.
	7.2	Changes in Business, Ownership, Management or Business Locations.
	7.3	Mergers or Acquisitions.
	7.4	Indebtedness.

	7.5	Encumbrances.
	7.6	Distributions; Investments.
	7.7	Transactions with Affiliates.
	7.8	Subordinated Debt.
	7.9	Compliance.

8.	EVENTS OF DEFAULT.
	8.1	Payment Default.
	8.2	Covenant Default.
	8.3	Material Adverse Change.
	8.4	Attachment.
	8.5	Insolvency.
	8.6	Other Agreements.
	8.7	Judgments.
	8.8	Misrepresentations.

9.	BANK’S RIGHTS AND REMEDIES.
	9.1	Rights and Remedies.
	9.2	Power of Attorney.
	9.3	Accounts Collection.
	9.4	Bank Expenses.
	9.5	Bank’s Liability for Collateral.
	9.6	Remedies Cumulative.
	9.7	Demand Waiver.

10.	NOTICES.

11.	CHOICE OF LAW , VENUE AND JURY TRIAL WAIVER.

12.	GENERAL PROVISIONS
	12.1	Successors and Assigns.
	12.2	Indemnification.
	12.3	Time of Essence.
	12.4	Severability of Provision.
	12.5	Amendments in Writing, Integration.
	12.6	Counterparts.
	12.7	Survival.
	12.8	Confidentiality.
	12.9	Attorneys’ Fees, Costs and Expenses.

13.	DEFINITIONS.
	13.1	Definitions.

EXHIBITS

Exhibit A — Description of Collateral

Exhibit B — Payment/Advance Request Form

Exhibit C — Form of Compliance Certificate

AMENDED AND RESTATED

LOAN AND SECURITY AGREEMENT

This AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (the “Agreement”) dated as of March 31, 2002, between SILICON VALLEY BANK, a California-chartered bank (“Bank”) whose address is 3003 Tasman Drive, Santa Clara, California 95054, and BROADVISION, INC., a Delaware corporation (“Borrower”) whose address is 585 Broadway, Redwood City, California 94063, provides the terms on which Bank will lend to Borrower and Borrower will borrow from Bank.

RECITALS

A. Borrower and Bank are parties to that certain Loan and Security Agreement dated as of July 2, 1997 (the “Original Agreement”), as amended and modified from time to time, including, without limitation, by that certain First Amendment to Loan and Security Agreement dated as of February 5, 1998, that certain Second Amendment to Loan and Security Agreement dated as of April 7, 1998, that certain Amendment to Loan and Security Agreement dated as of May 4, 1999, that certain Loan Modification Agreement dated as of August 30, 1999, that certain Second Loan Modification Agreement dated as of May 3, 2000, that certain Third Loan Modification Agreement dated as of May 11, 2001, that certain Fourth Loan Modification Agreement dated as of August 3, 2001, and that certain Loan Modification Agreement dated as of November 1, 2001 (collectively, the “Amendments and Modifications”).

B. Bank and Borrower desire to replace and supplant in full the Original Agreement, as amended and modified from time to time (including, without limitation, by the Amendments and Modifications), with this Agreement.

NOW, THEREFORE, the parties agree as follows:

Accounting terms not defined in this Agreement will be construed in accordance with GAAP. Calculations and determinations must be made in accordance with GAAP. The term “financial statements” includes the notes and schedules. The terms “including” and “includes” always mean “including (or includes) without limitation,” in this or any Loan Document.

Borrower promises to pay Bank the unpaid principal amount of all Credit Extensions and interest on the unpaid principal amount of all Credit Extensions.

To the extent that the FX Sublimit (as defined herein) is not exceeded, then Borrower may enter into foreign exchange forward contracts with the Bank under which Borrower commits to purchase from or sell to Bank a set amount of foreign currency more than one Business Day after the contract date (the “FX Forward Contract”). The FX Sublimit (“FX Sublimit “) shall be an amount equal to 10% of the face amount of all outstanding FX Forward Contracts; provided, however, that at no time shall the FX Sublimit exceed the maximum amount available under the Committed Revolving Line (as adjusted from time to time pursuant to paragraph (a) of Section 2.1.1). The aggregate amount of the FX Sublimit shall at all times reduce, on a dollar-for-dollar basis, the amount available under the Committed Revolving Line. Bank may terminate the FX Forward Contracts if an Event of Default occurs.

(b) Borrower acknowledges and agrees that, as of the Closing Date, Borrower owes Bank the outstanding principal sum of $1,964,200 under another leasehold facility (hereinafter “Term Loan #2”), under which Borrower must pay to Bank installments of principal plus interest on the first Business Day of each month until the Term Loan #2 Maturity Date. Borrower’s final payment on the Term Loan #2 Maturity Date shall include all outstanding Term Loan #2 principal and accrued interest.

If the amount of principal of all Obligations under Sections 2.1.1, 2.1.2, 2.1.3 and 2.1.4 at any time exceed the Committed Revolving Line, then Borrower will be in an Overadvance to the extent of such excess principal amount. If Borrower is in an Overadvance, then Borrower shall immediately repay to Bank the amount by which the sum of all outstanding principal exceeds the Committed Revolving Line and Borrower shall also repay accrued interest on such amounts.

(a) Revolving Advances shall accrue interest on the aggregate principal balance thereof from time to time outstanding at a per annum rate equal to the Prime Rate. Term Loan #1 shall accrue interest on the aggregate principal balance thereof from time to time outstanding at a per annum rate equal to the Prime Rate. Term Loan #2 shall accrue interest on the aggregate principal balance thereof from time to time outstanding at a per annum rate equal to the Prime Rate plus one and one-quarter percent (1.25%). The Deferred Amount, if any, shall accrue interest on the aggregate principal balance thereof from time to time outstanding at a per annum rate equal to the Prime Rate plus one-half percent (0.50%). After an Event of Default, Obligations shall accrue interest at a rate equal to three percent (3.00%) above the rate effective immediately before the Event of Default. The interest rate increases or decreases when the Prime Rate changes. Interest is computed on a 360-day year for the actual number of days elapsed.

(b) Payments. Interest on outstanding Revolving Advances shall be due and payable on the 1^st Business Day of each month. Interest on amounts outstanding under Term Loan #1 shall be due and payable on the 1st Business Day of each month. Interest on amounts outstanding under Term Loan #2 shall be due and payable on the 1st day of each month. Payments received after 12:00 noon, Pacific Time, are considered received at the opening of business on the next Business Day. When a payment is due on a day that is not a Business Day, the payment is due on the next Business Day and additional fees and interest shall accrue from the initial due date.

Bank may debit any of Borrower’s deposit accounts, including Account Number ###-###-####, for principal and interest payments, and any other amounts Borrower owes Bank when due. Bank will notify Borrower when it debits Borrower’s accounts. These debits are not a set-off.

(a) Borrower will pay all Bank Expenses (including reasonable attorneys’ fees and reasonable expenses) incurred through and after the date of this Agreement. All Bank Expenses are due and payable upon demand from Bank.

(b) Borrower will pay the Commitment Fee on or before the Closing Date.

(c) Borrower will pay an annual fee for Letters of Credit (the “Letter of Credit Fee”) equal to one-half percent (0.50%) of the face amount of each Letter of Credit, including without limitation Letters of Credit outstanding as of the Closing Date. Such Letter of Credit Fee will be due and payable on the date of issuance of each Letter of Credit and on each yearly anniversary thereof, and is not refundable in the event that a Letter of Credit is prematurely cancelled or otherwise terminated.

Bank’s obligation to make the initial Credit Extension is subject to the following conditions precedent:

Bank’s obligations to make each Credit Extension, including the initial Credit Extension, is subject to the following:

Borrower grants Bank a continuing security interest in all presently existing and later acquired Collateral to secure all Obligations and the performance of each of Borrower’s duties under the Loan Documents. Except for Permitted Liens, any security interest will be a first priority security interest in the Collateral. Bank may place a “hold” on any deposit account pledged as Collateral. If this Agreement is terminated, Bank’s lien and security interest in the Collateral will continue until Borrower fully satisfies its Obligations.

Borrower represents and warrants as follows:

Borrower and each Subsidiary is duly existing and in good standing in its jurisdiction of formation and is qualified and licensed to do business in, and in good standing in, each jurisdiction in which the conduct of its business or its ownership of property requires that it be qualified, except where the failure to do so could not reasonably be expected to cause a Material Adverse Change. Borrower is a Delaware corporation.

The execution, delivery and performance by Borrower of the Loan Documents have been duly authorized, and do not conflict with Borrower’s formation documents, nor constitute an event of default under any material agreement by which Borrower is bound. Borrower is not in default under any agreement to which or by which it is bound in which the default could reasonably be expected to cause a Material Adverse Change.

Borrower has good title to its Collateral, free of Liens except Permitted Liens. The Accounts are bona fide, existing obligations, and the service or property that is the subject of each Account has been performed or delivered to the account debtor or its agent for immediate shipment to and unconditional acceptance by the account debtor. Borrower has no notice of any actual or imminent Insolvency Proceeding of any account. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower owns or possesses adequate rights to use all of its respective Intellectual Property, except for non-exclusive licenses granted to its respective customers in the ordinary course of business. To the best of Borrower’s knowledge, each Patent is valid and enforceable, no part of the Intellectual Property has been judged invalid or unenforceable (in whole or in part), and Borrower has no knowledge that any claim has been made that any part of the Intellectual Property violates the rights of any third party, except to the extent such claim, if the subject of an unfavorable decision, ruling or finding, could not reasonably be expected to cause a Material Adverse Change.

Except as shown in the Schedules, there are no actions or proceedings pending or, to the knowledge of Borrower’s Responsible Officers, threatened by or against Borrower or any Subsidiary in which an adverse decision could reasonably be expected to cause a Material Adverse Change.

All separate or consolidated financial statements for Borrower and any Subsidiary delivered to Bank fairly present in all material respects such entity’s separate and consolidated financial condition and separate and consolidated results of operations. There has not been any material deterioration in Borrower’s consolidated financial condition since the date of the most recent financial statements submitted to Bank.

The fair salable value of Borrower’s assets (including goodwill minus disposition costs) exceeds the fair value of its liabilities. Borrower is not left with unreasonably small capital after the transactions contemplated in this Agreement, and Borrower is able to pay its debts (including trade debts) as they mature.

Neither Borrower nor any Subsidiary, is an “investment company” or a company “controlled” by an “investment company” under the Investment Company Act. Neither Borrower nor any Subsidiary, is engaged, as one of its material activities, in extending credit for margin stock (under Regulations T and U promulgated by the Board of Governors of the Federal Reserve System). Borrower has complied in all material respects with the Federal Fair Labor Standards Act. Borrower has not violated any laws, ordinances or rules, the violation of which could reasonably be expected to cause a Material Adverse Change. None of Borrower’s or any Subsidiary’s properties or assets has been used by Borrower, or any Subsidiary or, to the best of Borrower’s knowledge, by previous Persons, in disposing, producing, storing, treating or transporting any hazardous substance other than in a legal manner in compliance with all environmental laws and regulations. Each of Borrower and each Subsidiary has timely filed all required tax returns and paid, or made adequate provision to pay, all material taxes, except those being contested in good faith with adequate reserves under GAAP. Each of Borrower and each Subsidiary has obtained all consents, approvals and authorizations of, made all declarations or filings with, and given all notices to, all government authorities that are necessary to continue its business as currently conducted, except where the failure to do so could not reasonably be expected to cause a Material Adverse Change.

Borrower owns no stock, partnership interest or other equity securities except for Permitted Investments.

No written representation, warranty or other statement of Borrower in any certificate or written statement given to Bank (taken together with all such written certificates and written statements to Bank) contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained in the certificates or statements not misleading, it being recognized by Bank that the projections and forecasts provided by Borrower in good faith and based upon reasonable assumptions are not viewed as facts and that actual results during the period or periods covered by such projections and forecasts may differ from the projected and forecasted results.

Borrower will do all of the following for so long as Bank has an obligation to lend, or there are outstanding Obligations:

Borrower will maintain its and all Subsidiaries’ legal existence and good standing in its respective jurisdictions of formation and maintain qualification in each jurisdiction in which the failure to so qualify could reasonably be expected to result in a Material Adverse Change. Borrower will comply, and cause each Subsidiary to comply, with all laws, ordinances and regulations to which it is subject, noncompliance with which would reasonably be expected to have a material adverse effect on Borrower’s business or operations or could reasonably be expected to cause a Material Adverse Change.

Borrower will keep all Inventory in good and marketable condition, free from material defects. Returns and allowances between Borrower and its account debtors will follow Borrower’s customary practices as they exist at execution of this Agreement. Borrower must promptly notify Bank when the aggregate value of all returns, recoveries, disputes and claims with respect to a single customer involves more than $50,000.

Borrower will make, and cause each Subsidiary to make, timely payment of all material federal, state, and local taxes or assessments (other than taxes and assessments which Borrower is contesting in

good faith, with adequate reserves maintained in accordance with GAAP) and will deliver to Bank, on demand, appropriate certificates attesting to the payment.

Borrower will keep its business and the Collateral insured for risks and in amounts as Bank may reasonably request. Insurance policies will be in forms, with companies, and in amounts that are reasonably satisfactory to Bank. All property policies will have a lender’s loss payable endorsement showing Bank as an additional loss payee, all liability policies will show the Bank as an additional insured, and all policies will provide that the insurer must give Bank at least 20 days notice before canceling its policy. At Bank’s reasonable request, Borrower will deliver certificates of insurance and evidence of all premium payments. Proceeds payable under any policy will, at Bank’s option, be payable to Bank on account of the Obligations. So long as no Event of Default has occurred and is continuing, Borrower shall have the option of applying the proceeds of any casualty policy to the replacement or repair of destroyed or damaged property; provided that, at the occurrence and during the continuance of an Event of Default, all proceeds payable under any such casualty policy shall, at the option of Bank, be payable to Bank on account of the Obligations.

Borrower will at all times, beginning on the first day following the thirty day period immediately following the Closing Date and ending on the later of the Revolving Maturity Date and the Deferral Maturity Date (if applicable), maintain, in the aggregate, a minimum of Thirty Million Dollars ($30,000,000) in accounts with Bank and its Affiliates; provided, however, beginning on the Closing Date the minimum shall be $20,000,000 to increase to $30,000,000 within thirty (30) days of the Closing Date. In addition, Borrower will at all times maintain an operating account with Bank.

Borrower will at all times until the later of the Revolving Maturity Date and the Deferral Maturity Date (if applicable) maintain a minimum of Eighty Million Dollars ($80,000,000) on Borrower’s balance sheet as Unrestricted Cash, cash equivalents and long-term investments (exclusive of equities holdings).

Within 30 days of the Closing Date, Borrower will register with the United States Patent and Trademark Office or the United States Copyright Office (as the case may be) its Intellectual Property and additional Intellectual Property rights developed or acquired, including revisions or additions with any product before the sale or licensing of the product to any third party, unless Borrower reasonably determines that such registration would not be commercially reasonable. Borrower will: (i) protect, defend and maintain the validity and enforceability of its Intellectual Property when commercially reasonable; (ii) promptly advise Bank in writing of material infringements of its Intellectual Property of which Borrower becomes aware; and (iii) not allow any Intellectual Property material to Borrower’s business to be abandoned, forfeited or dedicated to the public without Bank’s written consent, which consent will not be unreasonably withheld.

Borrower will execute all further instruments and take all further actions as Bank reasonably requests to perfect or continue Bank’s security interest in the Collateral and to effect the purposes of this Agreement, including without limitation providing Bank with control agreements, in form and substance acceptable to Bank, for any and all deposit and securities accounts maintained by Borrower.

For so long as Bank has an obligation to lend or there are any outstanding Obligations, Borrower will not do any of the following without Bank’s prior written consent, which will not be unreasonably withheld:

Borrower will not convey, sell, lease, transfer or otherwise dispose of (collectively “Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of its business or property, except for Transfers (i) of Inventory in the ordinary course of business, (ii) of non-exclusive licenses and similar arrangements for the use of the property of Borrower or its Subsidiaries in the ordinary course of business, or (iii) of worn–out or obsolete Equipment.

Borrower will not engage in, or permit any of its Subsidiaries to engage in, any business other than the businesses currently engaged in by Borrower or businesses reasonably related thereto. There shall not be a material change in Borrower’s ownership of greater than 35%. Borrower will not, without at least 30 days prior written notice, relocate its chief executive office or add any new offices or business locations in which Borrower maintains or stores over $20,000 in Borrower’s assets or property.

Borrower will not merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with any other Person, or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital stock or property of another Person except where such transactions do not exceed ten percent (10%) of Borrower’s then-current market capitalization and no Event of Default has occurred and is continuing or would exist after giving effect to the transaction. A Subsidiary may merge or consolidate into another Subsidiary or into Borrower, so long as Borrower remains the obligor of all Obligations.

Borrower will not create, incur, assume or be liable for any Indebtedness, or permit any Subsidiary to do so, other than Permitted Indebtedness.

Borrower will not create, incur or allow to exist any Lien on any of its properties, or assign or convey any right to receive income (including the sale of any Accounts), or permit any of its Subsidiaries to do so, except for Permitted Liens, or permit any Collateral not to be subject to the first priority security interest herein granted to Bank, subject to Permitted Liens.

Except as provided in Section 7.3, Borrower will not directly or indirectly acquire or own any Person, or make any Investment in any Person (other than Permitted Investments) or permit any of its Subsidiaries to do so, or pay any dividends or make any distribution or payment related to, or redeem, retire or purchase any of, its capital stock, except for repurchases of stock from former employees and directors of Borrower under the terms of applicable repurchase agreements in an aggregate amount not to exceed $2,000,000 in the aggregate in any fiscal year, provided that no Event of Default has occurred, is continuing or would exist after giving effect to the repurchases.

Borrower will not directly or indirectly enter into or permit any material transaction with any Affiliate, except transactions that are in the ordinary course of Borrower’s business, on terms less favorable to Borrower or equally favorable to Borrower than would be obtained in an arm’s length transaction with a non-affiliated Person.

Borrower will not make or permit any payment on any Subordinated Debt except under the express terms of the Subordinated Debt, or amend any provision in any document relating to the Subordinated Debt, without Bank’s prior written consent.

Borrower will not become an “investment company” or a company controlled by an “investment company,” under the Investment Company Act of 1940, or undertake as one of its material activities extending credit to purchase or carry margin stock, or use the proceeds of any Credit Extension for that purpose; fail to meet the minimum funding requirements of ERISA, permit a Reportable Event or Prohibited Transaction (as defined in ERISA) to occur; fail to comply with the Federal Fair Labor Standards Act or violate any other law or regulation, if the violation could reasonably be expected to have a material adverse effect on Borrower’s business or operations or would reasonably be expected to cause a Material Adverse Change, or permit any of its Subsidiaries to do so.

Borrower fails to pay any of the Obligations within three Business Days after their due date. During the three-day period, the failure to cure the default is not itself an Event of Default (but Bank shall have no obligation to make a Credit Extension during the three-day period).

(a) Borrower fails to perform any obligation under Section 6.6 or Section 6.7, or violates any of the covenants in Article 7 of this Agreement, or

(b) Borrower fails or neglects to perform, keep or observe any other material term, provision, condition, covenant or agreement in this Agreement, in any other Loan Documents or in any other present or future agreement between Borrower and Bank and, as to any default under such other term, provision, condition, agreement or covenant that can be cured, has failed to cure the default within ten (10) days after the occurrence thereof; provided, however, that if the default cannot by its nature be cured within the ten-day period, and such default is likely to be cured within a reasonable time thereafter, then Borrower shall have an additional reasonable time period (which shall not in any case exceed ten additional days) to cure such default. During the ten-day period and (if applicable) the additional ten-day period, the failure to cure the default is not itself an Event of Default (but Bank shall have no obligation to make a Credit Extension during such periods).

There occurs (i) a material adverse change in the business, operations or condition (financial or otherwise) of the Borrower, (ii) a material impairment of the prospect of repayment of any portion of the

Obligations, or (iii) a material impairment to the value or priority of Bank’s security interest in the Collateral (or any material portion thereof), all as determined by Bank in good faith.

Any material portion of Borrower’s assets is attached, seized or levied on, or comes into possession of a trustee or receiver, and the attachment, seizure or levy is not removed, or the possession by a trustee or receiver is not terminated, in ten days; or Borrower is enjoined, restrained or prevented by court order from conducting a material part of its respective businesses; or a judgment or other claim becomes a Lien on a material portion of Borrower’s assets; or a notice of lien, levy or assessment is filed against a material portion of Borrower’s assets by any government agency and not paid within ten days after Borrower receives notice thereof. None of the foregoing is an Event of Default if stayed or if a bond is posted pending contest by Borrower (but Bank shall have no obligation to make a Credit Extension during such stay period or pending contest).

Borrower becomes insolvent or begins an Insolvency Proceeding, or an Insolvency Proceeding is begun against Borrower and is not dismissed or stayed within 30 days (but Bank shall have no obligation to make a Credit Extension before any Insolvency Proceeding is dismissed).

There is a default in any agreement between Borrower and a third party that gives the third party the right to accelerate any Indebtedness exceeding $100,000 or that could reasonably be expected to cause a Material Adverse Change.

A money judgment(s) in the aggregate of at least $250,000 is rendered against Borrower and is unsatisfied and unstayed for ten days (but Bank shall have no obligation to make a Credit Extension before the judgment is stayed or satisfied).

Borrower or any Person acting for Borrower, makes any material misrepresentation or material misstatement now or later in any warranty or representation in this Agreement or in any writing delivered to Bank or in order to induce Bank to enter this Agreement or any Loan Document.

When an Event of Default occurs and any period for cure has expired Bank may, without notice or demand, do any or all of the following:

(a) Declare all Obligations immediately due and payable (but if an Event of Default described in Section 8.5 occurs all Obligations are immediately due and payable without any action by Bank);

(b) Stop advancing money or extending credit for Borrower’s benefit under this Agreement or under any other agreement between Borrower and Bank;

(c) Settle or adjust disputes and claims directly with account debtors for amounts, on terms and in any order that Bank considers advisable;

(d) Make any payments and do any acts that Bank considers necessary or reasonable to protect its security interest in the Collateral; and in furtherance thereof, (i) Borrower will assemble the Collateral if Bank requires and make it available as Bank designates; (ii) Bank may enter premises where the Collateral is located, take and maintain possession of any part of the Collateral, and pay, purchase, contest or compromise any Lien which appears to be prior or superior to its security interest and pay all expenses incurred; and (iii) Borrower grants Bank a license to enter and occupy any of its premises, without charge, to exercise any of Bank’s rights or remedies;

(e) Apply to the Obligations any (i) balances and deposits of Borrower that Bank holds, and (ii) amounts held by Bank owing to or for the credit or the account of Borrower;

(f) Ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and sell the Collateral; and in furtherance thereof, (i) Bank is granted a non-exclusive, royalty-free license or other right to use, without charge, Borrower’s labels, Patents, Copyrights, Mask Works, rights of use of any name, trade secrets, trade names, Trademarks, service marks and advertising matter, or any similar property as it pertains to the Collateral, in completing production of, advertising for sale and selling any Collateral; and (ii) Borrower’s rights under all licenses and all franchise agreements inure to Bank’s benefit in connection with the foregoing; and

(g) Dispose of the Collateral according to the Code.

Borrower irrevocably appoints and constitutes Bank as its lawful attorney-in-fact, with full power and in the name of Borrower, to do all of the following upon the occurrence and continuation of an Event of Default: (i) endorse Borrower’s name on any checks or other forms of payment or security; (ii) sign Borrower’s name on any invoice or bill of lading for any Account or drafts against account debtors, (iii) make, settle and adjust all claims under Borrower’s insurance policies; (iv) settle and adjust disputes and claims about the Accounts directly with account debtors, for amounts and on terms Bank determines reasonable; and (v) transfer the Collateral into the name of Bank or a third party as the Code permits. Notwithstanding the foregoing, Bank may exercise the power of attorney to sign Borrower’s name on any documents necessary to perfect or continue the perfection of any security interest regardless of whether an Event of Default has occurred. Bank’s appointment as Borrower’s attorney-in-fact, and all of Bank’s rights and powers, are coupled with an interest and irrevocable until all Obligations have been fully repaid and performed and Bank’s obligation to provide Credit Extensions terminates.

When an Event of Default occurs and continues, Bank may notify any Person owing Borrower money of Bank’s security interest in the funds and verify the amount of the Account. Borrower must collect all payments in trust for Bank and, if requested by Bank, immediately deliver the payments to Bank in the form received from the account debtor, with proper endorsements for deposit.

If Borrower fails to pay any amount or furnish any required proof of payment to third persons, Bank may make all or part of the payment or obtain insurance policies required in Section 6.5, and take any action under the policies that Bank deems prudent. Any amounts paid by Bank are Bank Expenses and immediately due and payable, bearing interest at the then-applicable rate and secured by the

Collateral. No payments by Bank are deemed an agreement to make similar payments in the future or constitute Bank’s waiver of any Event of Default.

If Bank complies with reasonable banking practices and the Code, except as required by applicable law, it shall not be liable for: (i) the safekeeping of the Collateral; (ii) any loss or damage to the Collateral; (iii) any diminution in the value of the Collateral; or (iv) any act or default of any carrier, warehouseman, bailee, or other person. Borrower bears all risk of loss, damage or destruction of the Collateral.

Bank’s rights and remedies under this Agreement, the other Loan Documents and all other agreements are cumulative. Bank has all rights and remedies provided under the Code, by law and in equity. Bank’s exercise of one right or remedy is not an election, and Bank’s waiver of any Event of Default is not a continuing waiver. Bank’s delay is not a waiver, election or acquiescence. No waiver is effective unless signed by Bank, and then is only effective for the specific instance and purpose for which it was given.

Borrower waives demand, notice of default or dishonor, notice of payment and nonpayment, notice of any default, nonpayment at maturity, release, compromise, settlement, extension or renewal of accounts, documents, instruments, chattel paper and guaranties held by Bank on which Borrower is liable.

All notices or demands by any party about this Agreement or any other related agreement must be in writing and be personally delivered or sent by an overnight delivery service, by certified mail, (postage prepaid, return receipt requested) or by telefacsimile to the addresses set forth at the beginning of this Agreement. A party may change its notice address by giving the other party written notice thereof.

California law governs the Loan Documents without regard to principles of conflicts of law. Borrower and Bank each submit to the exclusive jurisdiction of the State and Federal courts in Santa Clara County, California.

BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

This Agreement binds and is for the benefit of the successors and permitted assigns of each party. Borrower may not assign this Agreement or any rights under it without Bank’s prior written consent, which may be granted or withheld in Bank’s discretion. Bank has the right, without the consent of or

notice to Borrower, to sell, transfer, negotiate or grant participations in all or any part of, or any interest in, Bank’s obligations, rights and benefits under this Agreement.

Borrower will indemnify, defend and hold harmless Bank and its officers, employees, and agents against: (i) all obligations, demands, claims, and liabilities asserted by any other party in connection with the transactions contemplated by the Loan Documents; and (ii) all losses and Bank Expenses incurred or paid by Bank from, following or consequential to transactions between Bank and Borrower (including reasonable attorneys fees and expenses), except for losses caused by Bank’s gross negligence or willful misconduct.

Time is of the essence for the performance of all obligations in this Agreement.

Each provision of this Agreement is severable from every other provision in determining the enforceability of any provision.

All amendments to this Agreement must be in writing and signed by Borrower and Bank. This Agreement represents the entire agreement about this subject matter, and supersedes prior negotiations or agreements, including, without limitation, the Original Agreement and the Amendments and Modifications. All prior agreements, understandings, representations, warranties and negotiations between the parties about the subject matter of this Agreement, including, without limitation, the Original Agreement and the Amendments and Modifications, merge into this Agreement and the other Loan Documents.

This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, are an original, and all of which, taken together, constitute one Agreement.

All covenants, representations and warranties made in this Agreement continue in full force while any Obligations remain outstanding. The obligations of Borrower in Section 12.2 to indemnify Bank will survive until all statutes of limitations for actions that may be brought against Bank have run.

In handling any confidential information, Bank will exercise the same degree of care that it exercises for its own proprietary information, and disclosure of information may be made by Bank: (i) to Bank’s subsidiaries or affiliates in connection with their business with Borrower; (ii) to prospective transferees or purchasers of any interest in the Loan Documents; (iii) as required by law, regulation, subpoena or other order; (iv) as required in connection with Bank’s examination or audit; and (v) as Bank considers appropriate in exercising remedies under this Agreement. Confidential information does not include information that either: (i) is in the public domain or in Bank’s possession when disclosed to

Bank, or becomes part of the public domain after disclosure to Bank; or (ii) is disclosed to Bank by a third party, if Bank does not know that the third party is prohibited from disclosing the information.

In any action or proceeding between Borrower and Bank arising out of the Loan Documents, the prevailing party will be entitled to recover its reasonable attorneys’ fees and other reasonable costs and expenses incurred, in addition to any other relief to which it may be entitled.

Beneficiary Name:

Amount of Wire: $

Beneficiary Bank:

Account Number:

City and Sate:

Beneficiary Bank Transit (ABA) #:

__ __ __ __ __ __ __

Beneficiary Bank Code (Swift, Sort, Chip, etc.):

In this Agreement:

“Accounts” are all existing and later arising accounts, contract rights and other obligations owed to Borrower in connection with its sale or lease of goods (including the licensing of software and other technology) or provision of services,all credit insurance, guaranties, other security and all merchandise returned or reclaimed by Borrower, and Borrower’s Books relating to any of the foregoing.

“Advances” are the aggregate of (i) all amounts utilized under the Cash Management Services Sublimit, (ii) the then-outstanding principal balance of all Revolving Advances, (iii) all amounts utilized under the FX Sublimit, and (iv) Letters of Credit.

“Affiliate” of a Person is a Person that owns or directly or indirectly controls the Person, any Person that controls or is controlled by or is under common control with the Person, and each of that Person’s senior executive officers, directors, partners and, for any Person that is a limited liability company, that Person’s managers and members.

“Amendments and Modifications” is defined in the recital section hereto.

“Bank Expenses” are all audit fees and expenses and reasonable costs and expenses (including reasonable attorneys’ fees and expenses) for preparing, negotiating, administering, defending and enforcing the Loan Documents (including appeals and Insolvency Proceedings).

“Borrower’s Books” are all of Borrower’s books and records, including ledgers, records regarding Borrower’s assets or liabilities, the Collateral, business operations or financial condition and all computer programs or discs or any equipment containing the information.

“Business Day” is any day that is not a Saturday, Sunday or other day on which the Bank is closed.

“Cash Management Services” are defined in Section 2.1.2.

“Cash Management Services Sublimit” is defined in Section 2.1.2.

“Closing Date” is the date of this Agreement.

“Code” is the Uniform Commercial Code, as applicable.

“Collateral” is the property described on Exhibit A.

“Committed Revolving Line” is $25,000,000.

“Commitment Fee” is $50,000.

“Contingent Obligation” is, for any Person, any direct or indirect liability, contingent or not, of that Person for (i) any indebtedness, lease, dividend, letter of credit or other obligation of another such as an obligation directly or indirectly guaranteed, endorsed, co–made, discounted or sold with recourse by that Person, or for which that Person is directly or indirectly liable; (ii) any obligations for undrawn letters of credit for the account of that Person; and (iii) all obligations from any interest rate, currency or commodity swap agreement, interest rate cap or collar agreement, or other agreement or arrangement designated to protect a Person against fluctuation in interest rates, currency exchange rates or commodity prices; but “Contingent Obligation” does not include endorsements in the ordinary course of business. The amount of a Contingent Obligation is the stated or determined amount of the primary obligation for which the Contingent Obligation is made or, if not determinable, the maximum reasonably anticipated liability for it determined by the Person in good faith; but the amount may not exceed the maximum of the obligations under the guarantee or other support arrangement.

“Copyrights” are all copyright rights, applications or registrations and like protections in each work or authorship or derivative work, whether published or not (whether or not it is a trade secret) now or later existing, created, acquired or held.

“Credit Extension” is each Revolving Advance, Cash Management Service, FX Forward Contract, Letter of Credit, term loan or any other extension of credit made by Bank to Borrower or for Borrower’s benefit.

“Dollars” and “$” is United States dollars.

“Equipment” is all present and future machinery, equipment, tenant improvements, furniture, fixtures, vehicles, tools, parts and attachments in which Borrower has any interest.

“ERISA” is the Employment Retirement Income Security Act of 1974, and its regulations.

“Event of Default” is the occurrence of any event described in Article 8 but does not include any cure period provided therein.

“FX Forward Contract” is defined in Section 2.1.3.

“FX Sublimit” is defined in Section 2.1.3.

“GAAP” is generally accepted accounting principles, consistently applied over the period(s) in question.

“Indebtedness” is (a) indebtedness for borrowed money or the deferred price of property or services, such as reimbursement and other obligations for surety bonds and letters of credit, (b) obligations evidenced by notes, bonds, debentures or similar instruments, (c) capital lease obligations and (d) Contingent Obligations.

“Insolvency Proceedings” are proceedings by or against any Person under the United States Bankruptcy Code or any other bankruptcy or insolvency law, including assignments for the benefit of creditors, compositions, extensions generally with its creditors, or proceedings seeking reorganization, arrangement or other relief.

“Intellectual Property” is:

(a) Copyrights, Trademarks, Patents and Mask Works, including all amendments, renewals, extensions and licenses or other rights to use same, and all license fees and royalties from the use of same;

(b) Any trade secrets and any intellectual property rights in computer software and computer software products now or later existing, created, acquired or held;

(d) Any claims for damages (past, present or future) for infringement of any of the rights above, with the right, but not the obligation, to sue and collect damages for use or infringement of the intellectual property rights above; and

(e) All proceeds and products of the foregoing, including all insurance, indemnity and warranty payments.

“Inventory” is present and future inventory in which Borrower has any interest, including merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and finished products intended for sale or lease or to be furnished under a contract of service, of every kind and description now or later owned by or in the custody or possession, actual or constructive, of Borrower, including inventory temporarily out of its custody or possession or in transit and including returns on any accounts or other proceeds (including insurance proceeds) from the sale or disposition of any of the foregoing and any documents of title.

“Investment” is any beneficial ownership (including stock, partnership interest or other securities) of any Person, or any loan, advance or capital contribution to any Person.

“Letter of Credit” is described in Section 2.1.4.

“Lien” is a mortgage, lien, deed of trust, charge, pledge, security interest or other encumbrance.

“Loan Documents” are, collectively, this Agreement, any note or notes and any other present or future agreement between Borrower to or for the benefit of Bank in connection with this Agreement, all as amended, extended or restated.

“Mask Works” are all mask works or similar rights available for the protection of semiconductor chips, now owned or later acquired.

“Material Adverse Change” is described in Section 8.3.

“Obligations” are debts, principal, interest, Bank Expenses and other amounts that Borrower owes to Bank now or later, including cash management services, letters of credit and foreign exchange contracts (if any) and including interest accruing after Insolvency Proceedings begin, and debts, liabilities or obligations of Borrower assigned to Bank.

“Original Agreement” is defined in the recital section hereto.

“Overadvance” is described in Section 2.2.

“Patents” are patents, patent applications and like protections, including improvements, divisions, continuations, renewals, reissues, extensions and continuations–in–part of the same.

“Permitted Indebtedness” is:

(a) Borrower’s indebtedness to Bank under this Agreement or any other Loan Document;

(b) Indebtedness existing on the Closing Date that is acceptable to Bank and shown on the Schedules;

(d) Indebtedness to trade creditors incurred in the ordinary course of business;

(e) Indebtedness secured by Permitted Liens;

(f) Extensions, refinancings, modifications, amendments and restatements of any items of Permitted Indebtedness, provided that the principal amount thereof is not increased or the terms thereof are not modified to impose more burdensome terms upon Borrower or its Subsidiaries, as the case may be;

(g) Indebtedness of Borrower to any Subsidiary and Contingent Obligations of any Subsidiary with respect to obligations of Borrower (provided that the primary obligations are not prohibited hereby), and Indebtedness of any Subsidiary to any other Subsidiary and Contingent Obligations of any Subsidiary with respect to obligations of any other Subsidiary (provided that the primary obligations are not prohibited hereby), provided that the aggregate of all such amounts does not exceed $1,000,000; and

(h) Other Indebtedness not exceeding $1,000,000 in the aggregate outstanding at any one time.

“Permitted Investments” are:

(a) Investments existing on the Closing Date that are acceptable to Bank and shown on the Schedules;

(b) (i) marketable direct obligations issued or unconditionally guaranteed by the United States or its agency or any State maturing within two years from its acquisition, (ii) commercial paper maturing no more than 1 year after its creation and having the highest rating from either Standard & Poor’s Corporation or Moody’s Investors Service, Inc., and (iii) Bank’s certificates of deposit issued maturing no more than 1 year after issue;

(c) individual Investments not exceeding $300,000 which, in the aggregate for such year, do not exceed $1,000,000 provided, however, that Borrower must notify Bank before making any such Investment and such Investment must not result in the occurrence of an Event of Default; and

(d) checking, savings, money market and investment accounts with Bank or an Affiliate of Bank.

(e) Investments consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers who are not Affiliates, in the ordinary course of business; provided that this paragraph shall not apply to Investments of Borrower in any Subsidiary;

(f) Investments of Subsidiaries in or other Subsidiaries to Borrower and Investments by Borrower in Subsidiaries not to exceed $1,000,000 in the aggregate in any fiscal year;

(g) Investments, in the aggregate not to exceed $1,000,000, consisting of loans to employees, officers or directors relating to (i) the purchase of equity securities of Borrower or its Subsidiaries pursuant

to Borrower’s employee stock purchase plans or agreements or (ii) Borrower’s compensation or relocation plans or agreements, each as approved in good faith by Borrower’s board of directors;

(h) Investments consisting of the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of Borrower’s business;

(i) Joint venture or strategic alliances in the ordinary course of Borrower’s business consisting of the licensing of technology, the development of technology or the providing of technical support, provided that any cash investments by Borrower do not exceed $1,000,000 in the aggregate in any fiscal year; and

(j) Investments (including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course of business.

“Permitted Liens” are:

(a) Liens existing on the Closing Date that are acceptable to Bank and shown on the Schedules or arising under this Agreement or other Loan Documents;

(b) Liens for taxes, fees, assessments or other government charges or levies, either not delinquent or being contested in good faith and for which Borrower maintains adequate reserves on its Books, if they have no priority over any of Bank’s security interests;

(c) Purchase money Liens (i) on Equipment acquired or held by Borrower or its Subsidiaries, or (ii) existing on equipment when acquired, if the Lien is confined to the property and improvements and the proceeds of the equipment;

(d) Licenses or sublicenses granted in the ordinary course of Borrower’s business and any interest or title of a licensor or under any license or sublicense, if the licenses and sublicenses permit granting Bank a security interest;

(e) Leases or subleases granted in the ordinary course of Borrower’s business, including in connection with Borrower’s leased premises or leased property;

(f) Liens incurred in the extension, renewal or refinancing of the indebtedness secured by Liens described in (a) through (c), but any extension, renewal or replacement Lien must be limited to the property encumbered by the existing Lien and the principal amount of the indebtedness so secured may not increase.

(g) Liens arising from judgments, decrees and attachments not constituting an Event of Default;

(h) Liens in connection with equipment leases;

(i) Liens securing claims or demands of materialmen, mechanics, carriers, warehousemen, landlords and other like persons or entities imposed without action of such parties, provided that the payment thereof is not yet required;

(j) Liens incurred or deposits made in the ordinary course of Borrower’s business in connection with worker’s compensation, unemployment insurance, social security and other like laws;

(k) Easements, reservations, rights-of-way, restrictions, minor defects or irregularities in title and other similar charges or encumbrances affecting real property not interfering in any material respect with the ordinary conduct of Borrower’s business;

(l) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;

(m) Liens in connection with Subordinated Debt; and

(n) Other Liens not described above arising in the ordinary course of business and not having or not reasonably likely to have a material adverse effect on Borrower and its Subsidiaries taken as a whole.

“Person” is any individual, sole proprietorship, partnership, limited liability company, joint venture, company association, trust, unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or government agency.

“Prime Rate” is Bank’s most recently announced “prime rate,” even if it is not the lowest rate at which Bank makes loans or otherwise extends credit.

“Responsible Officer” is each of the Chief Executive Officer and the Chief Financial Officer of Borrower.

“Revolving Advance” or “Revolving Advances” is a principal advance (or advances) of funds under the Committed Revolving Line.

“Revolving Maturity Date” is March 2, 2003.

“Schedules” are the attached schedules of exceptions.

“Subordinated Debt” is debt incurred by Borrower that is subordinated to Borrower’s Indebtedness owed to Bank and that is reflected in a written agreement in a manner and form acceptable to Bank and approved by Bank in writing.

“Subsidiary” is, for Borrower, any business entity of which more than 20% of the voting stock or other equity interests is owned or controlled, directly or indirectly, by Borrower or one or more Affiliates of Borrower.

“Term Loan #1” is defined in Section 2.1.5(a).

“Term Loan #2” is defined in Section 2.1.5(b).

“Term Loan #1 Maturity Date” is March 31, 2005.

“Term Loan #2 Maturity Date” is September 30, 2006.

“Trademarks” are trademark and servicemark rights, registered or not, applications to register and registrations and like protections, and the entire goodwill of the business of Borrower connected with the trademarks.

“Unrestricted Cash” is all cash that (i) is not subject to any Lien or (ii) does not otherwise fall within the definition of “restricted cash” as determined under GAAP.

IN WITNESS WHEREOF, each of the parties hereto has caused its duly authorized representative to execute and deliver this Agreement on the date first set forth above.

BANK:		BORROWER:

SILICON VALLEY BANK,		BROADVISION, INC.
a California-chartered bank		a Delaware corporation




By:	/s/ Heather Hamilton	By:	/s/ Terence A. Davis

Name:		Name:

Title:	Senior Vice President	Title:	V.P. Finance, Treasurer

EXHIBIT A

The Collateral consists of all of Borrower’s right, title and interest in and to the following:

All goods and equipment now owned or hereafter acquired, including without limitation all machinery, fixtures, vehicles (including motor vehicles and trailers), and any interest in any of the foregoing, and all attachments, accessories, accessions, replacements, substitutions, additions, and improvements to any of the foregoing, wherever located;

All inventory, now owned or hereafter acquired, including without limitation all merchandise, raw materials, parts, supplies, packing and shipping materials, work-in-process and finished products, including such inventory as is temporarily out of Borrower’s custody or possession or in transit and also including any returns upon any accounts or other proceeds (including insurance proceeds) resulting from the sale or disposition of any of the foregoing, and any documents of title representing any of the above;

All contract rights and general intangibles now owned or hereafter acquired, including without limitation goodwill, trademarks, servicemarks, trade styles, trade names, patents, patent applications, leases, license agreements, franchise agreements, blueprints, drawings, purchase orders, customer lists, route lists, infringements, claims, computer programs, computer discs, computer tapes, literature, reports, catalogs, design rights, income tax refunds, payments of insurance and rights to payment of any kind;

All now existing and hereafter arising accounts, contract rights, royalties, license rights and all other forms of obligations owing to Borrower arising out of the sale or lease of goods, the licensing of technology or the rendering of services by Borrower, whether or not earned by performance, and any and all credit insurance, guaranties and other security therefor, as well as all merchandise returned to or reclaimed by Borrower;

All documents, cash, deposit accounts, securities, securities entitlements, securities accounts, investment property, financial assets, letters of credit, certificates of deposit, instruments and chattel paper now owned or hereafter acquired, and Borrower’s Books relating to the foregoing;

All copyright rights, copyright applications, copyright registrations and like protections in each work of authorship and derivative work thereof, whether published or unpublished, now owned or hereafter acquired; all trade secret rights, including all rights to unpatented inventions, know–how, operating manuals, license rights and agreements and confidential information, now owned or hereafter acquired; all mask work or similar rights available for the protection of semiconductor chips, now owned or hereafter acquired; all claims for damages by way of any past, present and future infringement of any of the foregoing;

All of Borrower’s Intellectual Property; and

All of Borrower’s Books relating to the foregoing and any and all claims, rights and interests in any of the above and all substitutions for, additions and accessions to and proceeds thereof.

EXHIBIT B

Loan Payment/Advance Request Form

Fax To:

Date:

o Loan Payment:

BROADVISION, INC.

From Account #			To Account #
	(Deposit Account #)			(Loan Account #)

Principal $

and/or Interest $

All Borrower’s representation and warranties in the Loan and Security Agreement are true, correct and complete in all material respects to on the date of the telephone transfer request for and advance, but those representations and warranties expressly referring to another date shall be true, correct and complete in all material respects as of the date:

Authorized Signature:

Phone Number:

o Loan Advance:

Complete Outgoing Wire Request section below if all or a portion of the funds from this loan advance are for an outgoing wire.

From Account #			To Account #
	(Loan Account #)			(Deposit Account #)

Amount of Revolving Advance $

Authorized Signature:

Phone Number:

Outgoing Wire Request

Complete only if all or a portion of funds from the loan advance above are to be wired.

Deadline for same day processing is 12:00 p.m., P.T.

(For International Wire Only)

Intermediary Bank:				Transit (ABA) #:
For Further Credit to:
Special Instruction:

By signing below, I (we) acknowledge and agree that my (our) funds transfer request shall be processed in accordance with and subject to the terms and conditions set forth in the agreements(s) covering funds transfer service(s), which agreements(s) were previously received and executed by me (us).

Authorized Signature:					2^nd Signature (If Required):
Print Name/Title:					Print Name/Title:
Telephone #					Telephone #

EXHIBIT C

COMPLIANCE CERTIFICATE

TO:		SILICON VALLEY BANK
FROM:		BROADVISION, INC.
DATED:

The undersigned authorized officer of Broadvision, Inc. (“Borrower”) certifies that under the terms and conditions of the Amended and Restated Loan and Security Agreement dated as of March , 2002 between Borrower and Bank (the “Agreement”), (i) Borrower is in complete compliance for the period ending on the date first set forth above with all required covenants except as noted below and (ii) all representations and warranties in the Agreement are true and correct in all material respects on this date. Attached are the required documents supporting the certification. The Officer certifies that these are prepared in accordance with Generally Accepted Accounting Principles (GAAP) consistently applied from one period to the next except as explained in an accompanying letter or footnotes. The Officer acknowledges that no borrowings may be requested at any time or date of determination that Borrower is not in compliance with any of the terms of the Agreement, and that compliance is determined not just at the date this certificate is delivered.

Please indicate compliance status by circling Yes/No under “Complies” column.

Reporting Covenants	Required	Complies

Interim financial statements + CC	Quarterly within 45 days	Yes	No
Annual audited financial statements + CC	Within 90 days of FYE	Yes	No
Annual financial projections	Within 45 days of FYE	Yes	No

Financial Covenants	Required	Complies

Minimum balance of Unrestricted Cash and cash equivalents	$80,000,000	Yes	No

Have there been updates to Borrower’s intellectual property?		Yes	No

Comments Regarding Exceptions: See Attached.	BANK USE ONLY

Sincerely,	Received by:
			authorized signer
Broadvision, Inc.,
a Delaware corporation	Date:

	Verified:
		authorized signer
SIGNATURE
	Date:

TITLE	Compliance Status:			Yes	No


DATE