Other Expenses of Issuance and Distribution

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

          12.6      Amendments in Writing; Integration. All amendments to this Agreement must be in writing signed by both Bank and Borrower. This Agreement and the Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements. All prior agreements, understandings, representations, warranties, and negotiations between the parties about the subject matter of this Agreement and the Loan Documents merge into this Agreement and the Loan Documents.

          12.7      Counterparts. 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 taken together, constitute one Agreement.

          12.8      Survival. All covenants, representations and warranties made in this Agreement continue in full force until this Agreement has terminated pursuant to its terms and all Obligations (other than inchoate indemnity obligations and any other obligations which, by their terms, are to survive the termination of this Agreement) have been satisfied. The obligation of Borrower in Section 12.2 to indemnify Bank shall survive until the statute of limitations with respect to such claim or cause of action shall have run.

          12.9      Confidentiality. In handling any confidential information, Bank shall exercise the same degree of care that it exercises for its own proprietary information, but disclosure of information may be made: (a) to Bank’s Subsidiaries or Affiliates; (b) to prospective transferees or purchasers of any interest in the Credit Extensions (provided, however, Bank shall use commercially reasonable efforts to obtain such prospective transferee’s or purchaser’s agreement to the terms of this provision); (c) as required by law, regulation, subpoena, or other order; (d) to Bank’s regulators or as otherwise required in connection with Bank’s examination or audit; and (e) 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.

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

13.     DEFINITIONS

          13.1     Definitions. As used in this Agreement, the following terms have the following meanings:

                       “Account” is any “account” as defined in the Code with such additions to such term as may hereafter be made, and includes, without limitation, all accounts receivable and other sums owing to Borrower.

                       “Account Debtor” is any “account debtor” as defined in the Code with such additions to such term as may hereafter be made.

                       “Advance” or “Advances” means an advance (or advances) under the Revolving Line.

                       “Affiliate” of any Person is a Person that owns or controls directly or indirectly 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.

                       “Agreement” is defined in the preamble hereof.

                       “Bank” is defined in the preamble hereof.

                       “Bank Expenses” are all audit fees and expenses, costs, and expenses (including reasonable attorneys’ fees and expenses) for preparing, negotiating, administering, defending and enforcing the Loan Documents (including, without limitation, those incurred in connection with appeals or Insolvency Proceedings) or otherwise incurred with respect to Borrower.

                       “Bankruptcy-Related Defaults” is defined in Section 9.1.

                       “Borrower” is defined in the preamble hereof.

                       “Borrower’s Books” are all Borrower’s books and records including ledgers, federal and state tax returns, records regarding Borrower’s assets or liabilities, the Collateral, business operations or financial condition, and all computer programs or storage or any equipment containing such information.

                       “Borrowing Base” is 80% of standard Eligible Accounts receivable as determined by Bank from Borrower’s most recent Borrowing Base Certificate; provided, however, that Bank may decrease the foregoing percentages in its good faith business judgment based on events, conditions, contingencies, or risks which, as determined by Bank, may adversely affect Collateral.

                       “Borrowing Base Certificate” is that certain certificate in the form attached hereto as Exhibit C.

                       “Borrowing Resolutions” are, with respect to any Person, those resolutions substantially in the form attached hereto as Exhibit F.

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

                       “Cash Equivalents” means (a) marketable direct obligations issued or unconditionally guaranteed by the United States or any agency or any State thereof having maturities of not more than one (1) year from the date of acquisition; (b) commercial paper

maturing no more than one (1) year after its creation and having the highest rating from either Standard & Poor’s Ratings Group or Moody’s Investors Service, Inc., (c) Bank’s certificates of deposit issued maturing no more than one (1) year after issue; and (d) money market funds at least ninety-five percent (95%) of the assets of which constitute Cash Equivalents of the kinds described in clauses (a) through (c) of this definition.

                       “Code” is the Uniform Commercial Code, as the same may, from time to time, be enacted and in effect in the State of California; provided, that, to the extent that the Code is used to define any term herein or in any Loan Document and such term is defined differently in different Articles or Divisions of the Code, the definition of such term contained in Article or Division 9 shall govern; provided further, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, or priority of, or remedies with respect to, Bank’s Lien on any Collateral is governed by the Uniform Commercial Code in effect in a jurisdiction other than the State of California, the term “Code” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes on the provisions thereof relating to such attachment, perfection, priority, or remedies and for purposes of definitions relating to such provisions.

                       “Collateral” is any and all properties, rights and assets of Borrower described on Exhibit A.

                       “Collateral Account” is any Deposit Account, Securities Account, or Commodity Account.

                       “Commodity Account” is any “commodity account” as defined in the Code with such additions to such term as may hereafter be made.

                       “Communication” is defined in Section 10.

                       “Compliance Certificate” is that certain certificate in the form attached hereto as Exhibit D.

                       “Contingent Obligation” is, for any Person, any direct or indirect liability, contingent or not, of that Person for (a) 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; (b) any obligations for undrawn letters of credit for the account of that Person; and (c) 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 any guarantee or other support arrangement.

                       “Control Agreement” is any control agreement entered into among the depository institution at which Borrower maintains a Deposit Account or the securities intermediary or commodity intermediary at which Borrower maintains a Securities Account or a Commodity account, Borrower, and Bank pursuant to which Bank obtains control (within the meaning of the Code) over such Deposit Account, Securities Account, or Commodity Account.

                       “Copyright” means any of the following now owned or hereafter acquired or created (as a work for hire for the benefit of Borrower) by Borrower or in which Borrower now holds or hereafter acquires or receives any right or interest, in whole or in part: (a) any copyright, whether registered or unregistered, held pursuant to the laws of the United States or of any other country or foreign jurisdiction, (b) registration, application or recording in the United States Copyright Office or in any similar office or agency of the United States or any other country or foreign jurisdiction, (c) any continuation, renewal or extension thereof, and (d) any registration to be issued in any pending application, and shall include any right or interest in and to work protectable by any of the foregoing which are presently or in the future owned, created or authorized (as a work for hire for the benefit of Borrower) or acquired by Borrower, in whole or in part.

                       “Default” means any event which with notice or passage of time or both, would constitute an Event of Default.

                       “Default Rate” is defined in Section 2.3(b).

                       “Deferred Revenue” is all amounts received or invoiced in advance of performance under contracts and not yet recognized as revenue.

                       “Deposit Account” is any “deposit account” as defined in the Code with such additions to such term as may hereafter be made.

                       “Designated Deposit Account” is Borrower’s deposit account, account number 3300421466, maintained with Bank.

                       “Dollars,” “dollars” and “$” each mean lawful money of the United States.

                       “Effective Date” is the date Bank executes this Agreement and as indicated on the signature page hereof.

                       “Eligible Accounts” are Accounts which arise in the ordinary course of Borrower’s business that meet all Borrower’s representations and warranties in Section 5.3. Bank reserves the right at any time and from time to time after the Effective Date, to adjust any of the criteria set forth below and to establish new criteria in its good faith business judgment. Unless Bank agrees otherwise in writing, Eligible Accounts shall not include:

                                 (a)     Accounts that the Account Debtor has not paid within ninety (90) days of invoice date;

                                 (b)      Accounts owing from an Account Debtor, fifty percent (50%) or more of whose Accounts have not been paid within ninety (90) days of invoice date;

                                 (c)      Credit balances over ninety (90) days from invoice date;

                                 (d)     Accounts owing from an Account Debtor, including Affiliates, whose total obligations to Borrower exceed twenty-five (25%) of all Accounts to the extent such amounts owed by such Account Debtor exceed twenty-five percent (25%) of Accounts of such Debtor that would otherwise be Eligible Accounts, unless Bank approves in writing;

                                 (e)     Accounts owing from an Account Debtor which does not have its principal place of business in the United States, except for Eligible Foreign Accounts.

                                 (f)     Accounts owing from an Account Debtor which is a federal, state or local government entity or any department, agency, or instrumentality thereof except for Accounts of the United States if Borrower has assigned its payment rights to Bank and the assignment has been acknowledged under the Federal Assignment of Claims Act of 1940, as amended;

                                 (g)     Accounts owing from an Account Debtor to the extent that Borrower is indebted or obligated in any manner to the Account Debtor (as creditor, lessor, supplier or otherwise — sometimes called “contra” accounts, accounts payable, customer deposits or credit accounts), with the exception of customary credits, adjustments and/or discounts given to an Account Debtor by Borrower in the ordinary course of its business;

                                 (h)     Accounts for demonstration or promotional equipment, or in which goods are consigned, or sold on a “sale guaranteed”, “sale or return”, “sale on approval”, “bill and hold”, or other terms if Account Debtor’s payment may be conditional;

                                 (i)      Accounts for which the Account Debtor is Borrower’s Affiliate, officer, employee, or agent;

                                 (j)      Accounts in which the Account Debtor disputes liability or makes any claim (but only up to the disputed or claimed amount), or if the Account Debtor is subject to an Insolvency Proceeding, or becomes insolvent, or goes out of business;

                                 (k)      Accounts owing from an Account Debtor with respect to which Borrower has received Deferred Revenue (but only to the extent of such Deferred Revenue);

                                 (l)      Accounts for which Bank in its good faith business judgment determines collection to be doubtful; and

                                 (m)      other Accounts Bank deems ineligible in the exercise of its good faith business judgment.

                       “Eligible Foreign Accounts” are accounts owing from an Account Debtor with its principal place of business outside the United States, owed to Borrower, not in excess of $500,000 in the aggregate.

                       “Equipment” is all “equipment” as defined in the Code with such additions to such term as may hereafter be made, and includes without limitation all machinery, fixtures, goods, vehicles (including motor vehicles and trailers), and any interest in any of the foregoing.

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

                       “Event of Default” is defined in Section 8.

                       “Foreign Currency” means lawful money of a country other than the United States.

                       “Funding Date” is any date on which a Credit Extension is made to or on account of Borrower which shall be a Business Day.

                       “GAAP” is generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other Person as may be approved by a significant segment of the accounting profession, which are applicable to the circumstances as of the date of determination.

                       “General Intangibles” is all “general intangibles” as defined in the Code in effect on the date hereof with such additions to such term as may hereafter be made, and includes without limitation, all copyright rights, copyright applications, copyright registrations and like protections in each work of authorship and derivative work, whether published or unpublished, any patents, trademarks, service marks and, to the extent permitted under applicable law, any applications therefor, whether registered or not, any trade secret rights, including any rights to unpatented inventions, payment intangibles, royalties, contract rights, goodwill, franchise agreements, purchase orders, customer lists, route lists, telephone numbers, domain names, claims, income and other tax refunds, security and other deposits, options to purchase or sell real or personal property, rights in all litigation presently or hereafter pending (whether in contract, tort or otherwise), insurance policies (including without limitation key man, property damage, and business interruption insurance), payments of insurance and rights to payment of any kind.

                       “Guarantor” is any present or future guarantor of the Obligations.

                       “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 Proceeding” is any proceeding 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.

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

                       “Intellectual Property” means any intellectual property, in any medium, of any kind or nature whatsoever, now or hereafter owned or acquired or received by Borrower or in which Borrower now holds or hereafter acquires or receives any right or interest, and shall include, in any event, any Copyright, Trademark, Patent, trade secret, customer list, Internet domain name (including any right related to the registration thereof), proprietary or confidential information, mask work, source, object or other programming code, invention (whether or not patented or patentable), technical information, procedure, design, knowledge, know-how, software, data base, data, skill, expertise, recipe, experience, process, model, drawing, material or record, all claims for damages by way of past, present and future infringement of any of the rights included above and all licenses or other rights to use any property or rights of a type described above.

                       “IP Agreement” is that certain Intellectual Property Security Agreement executed and delivered by Borrower to Bank dated as of February 2, 2007.

                       “Key Person” is the Borrower’s Chief Executive Officer, who is, as of the Effective Date, Greg Ballard.

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

                       “Loan Documents” are, collectively, this Agreement, the Perfection Certificate, the IP Agreement, any note, or notes or guaranties executed by Borrower or any Guarantor, and any other present or future agreement between Borrower any Guarantor and/or for the benefit of Bank in connection with this Agreement, all as amended, restated, or otherwise modified.

                       “Material Adverse Change” is (a) a material impairment in the perfection or priority of Bank’s Lien in the Collateral or in the value of such Collateral; (b) a material adverse change in the business, operations, or condition (financial or otherwise) of Borrower; or (c) a material impairment of the prospect of repayment of any portion of the Obligations.

                       “Net Cash” means Borrower’s cash at Bank less amounts outstanding under the Revolving Line.

                       “Net Income” means, as calculated on a consolidated basis for Borrower and its Subsidiaries for any period as at any date of determination, the net profit (or loss), after provision for taxes, of Borrower and its Subsidiaries for such period taken as a single accounting period.

                       “Obligations” are Borrower’s obligation to pay when due any debts, principal, interest, Bank Expenses and other amounts Borrower owes Bank now or later, whether under this Agreement, the Loan Documents, or otherwise, including, without limitation, all obligations relating to letters of credit, cash management services, and foreign exchange

contracts, if any, and including interest accruing after Insolvency Proceedings begin and debts, liabilities, or obligations of Borrower assigned to Bank.

     “Operating Documents” are, for any Person, such Person’s formation documents, as certified with the Secretary of State of such Person’s state of formation on a date that is no earlier than 30 days prior to the Effective Date, and, (a) if such Person is a corporation, its bylaws in current form, (b) if such Person is a limited liability company, its limited liability company agreement (or similar agreement), and (c) if such Person is a partnership, its partnership agreement (or similar agreement), each of the foregoing with all current amendments or modifications thereto.

     “Patent” means any of the following now hereafter owned or acquired or received by Borrower or in which Borrower now holds or hereafter acquires or receives any right or interest: (a) letters patent and right corresponding thereto, of the United States or any other country or other foreign jurisdiction, any registration and recording thereof, and any application for letters patent, and rights corresponding thereto, of the United States or any other country or other foreign jurisdiction, including, without limitation, registrations, recordings and applications in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or other foreign jurisdiction; (b) any reissue, continuation, continuation-in-part or extension thereof; (c) any petty patent, divisional, and patent of addition; and (d) any patent to issue in any such application.

     “Payment/Advance Form” is that certain form attached hereto as Exhibit B.

     “Perfection Certificate” is defined in Section 5.1.

     “Permitted Indebtedness” is:

                                 (a)     Borrower’s Indebtedness to Bank under this Agreement and the other Loan Documents;

                                 (b)      Indebtedness existing on the Effective Date and shown on the Perfection Certificate;

                                 (c)      Subordinated Debt;

                                 (d)      unsecured Indebtedness to trade creditors and with respect to surety bonds and similar obligations incurred in the ordinary course of business;

                                 (e)      Indebtedness incurred as a result of endorsing negotiable instruments received in the ordinary course of business;

                                 (f)      Indebtedness in an aggregate principal amount not to exceed $1,000,000 secured by Permitted Liens;

                                 (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 Borrower

or 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);

                                 (h)     Borrower guaranties of Subsidiaries’ obligations under real property leases;

                                 (i)      other Indebtedness not otherwise permitted by Section 7.4 not exceeding $50,000 in the aggregate outstanding at any time; and

                                 (j)      extensions, refinancings, modifications, amendments and restatements of any items of Permitted Indebtedness (a) through (h) above, 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 Subsidiary, as the case may be.

                       “Permitted Investments” are:

                                 (a)      Investments shown on the Perfection Certificate and existing on the Effective Date;

                                 (b)      (i) Cash Equivalents, and (ii) any Investments permitted by Borrower’s investment policy, as amended from time to time, provided that such investment policy (and any such amendment thereto) has been approved by Bank;

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

                                 (d)      Investments consisting of deposit accounts in which Bank has a perfected security interest;

                                 (e)      Investments accepted in connection with Transfers permitted by Section 7.1;

                                 (f)      Investments of Subsidiaries in or to other Subsidiaries or Borrower and Investments by Borrower in Subsidiaries not to exceed $2,000,000 in the aggregate in any fiscal year;

                                 (g)      Investments consisting of (i) travel advances and employee relocation loans and other employee loans and advances in the ordinary course of business, and (ii) loans to employees, officers or directors relating to the purchase of equity securities of Borrower or its Subsidiaries pursuant to employee stock purchase plans or agreements approved by Borrower’s Board of Directors;

                                 (h)      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;

                                 (i)      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 (i) shall not apply to Investments of Borrower in any Subsidiary; and

                                 (k)      other Investments not otherwise permitted by Section 7.7 not exceeding $1,000,000 in the aggregate outstanding at any time.

                       “Permitted Liens” are:

                                 (a)      Liens existing on the Effective Date and shown on the Perfection Certificate or arising under this Agreement and the 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 Liens;

                                 (c)      purchase money Liens (i) on Equipment acquired or held by Borrower incurred for financing the acquisition of the Equipment securing no more than $1,000,000 in the aggregate amount outstanding, or (ii) existing on Equipment when acquired, if the Lien is confined to the property and improvements and the proceeds of the Equipment;

                                 (d)      statutory Liens securing claims or demands of materialmen, mechanics, carriers, warehousemen, landlords and other Persons imposed without action of such parties, provided, they have no priority over any of Bank’s Lien and the aggregate amount of such Liens does not at any time exceed $350,000;

                                 (e)      Liens to secure payment of workers’ compensation, employment insurance, old-age pensions, social security and other like obligations incurred in the ordinary course of business, provided, they have no priority over any of Bank’s Liens and the aggregate amount of the Indebtedness secured by such Liens does not at any time exceed $350,000;

                                 (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 may not increase;

                                 (g)      leases or subleases of real property granted in the ordinary course of business, and leases, subleases, non-exclusive licenses or sublicenses of property (other than real property or intellectual property) granted in the ordinary course of Borrower’s business, if the leases, subleases, licenses and sublicenses do not prohibit granting Bank a security interest;

                                 (h)      non-exclusive license of intellectual property granted to third parties in the ordinary course of business and licenses of intellectual property that could not result in a legal transfer of title of the licensed property that may be exclusive in respects other than territory and that may be exclusive as to territory only as to discreet geographical areas outside of the United States;

                                 (i)      Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default under Section 8.4 or 8.7;

                                 (j)      Liens in favor of other financial institutions arising in connection with Borrower’s deposit and/or securities accounts held at such institutions, provided that Bank has a perfected security interest in the amounts held in such deposit and/or securities accounts;

                                 (k)      deposits with landlords to secure real property lease obligations; and

                                 (l)      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 and not having any priority over the Lien in favor of Bank.

                       “Person” is any individual, sole proprietorship, partnership, limited liability company, joint venture, company, 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 Bank’s lowest rate.

                       “Registered Organization” is any “registered organization” as defined in the Code with such additions to such term as may hereafter be made

                       “Responsible Officer” is any of the Chief Executive Officer, President, Chief Financial Officer and Controller of Borrower.

                       “Revolving Line” is an Advance or Advances in an aggregate amount of up to $8,000,000 outstanding at any time.

                       “Revolving Line Maturity Date” February 1, 2009.

                       “Securities Account” is any “securities account” as defined in the Code with such additions to such term as may hereafter be made.

                       “Subordinated Debt” is indebtedness incurred by Borrower subordinated to all of Borrower’s now or hereafter indebtedness to Bank (pursuant to a subordination, intercreditor, or other similar agreement in form and substance satisfactory to Bank entered into between Bank and the other creditor), on terms acceptable to Bank.

                       “Subsidiary” means, with respect to any Person, any Person of which more than 50% of the voting stock or other equity interests is owned or controlled, directly or indirectly, by such Person or one or more Affiliates of such Person.

                       “Tangible Net Worth” is, on any date, the consolidated total assets of Borrower and its Subsidiaries minus (a) any amounts attributable to (i) goodwill, (ii) intangible items

including unamortized debt discount and expense, patents, trade and service marks and names, copyrights and research and development expenses except prepaid expenses, (iii) notes, accounts receivable and other obligations owing to Borrower from its officers or other Affiliates, and (iv) reserves not already deducted from assets, minus (b) Total Liabilities.

                       “Total Liabilities” is on any day, obligations that should, under GAAP, be classified as liabilities on Borrower’s consolidated balance sheet, including all Indebtedness, and current portion of Subordinated Debt permitted by Bank to be paid by Borrower, but excluding (a) all other Subordinated Debt, (b) redeemable preferred stock to the extent classified as a liability under GAAP, and (c) liabilities arising from revaluation of warrants due to the application of FAS 150-5.

                       “Trademark” means any of the following now or hereafter owned or acquired or received by Borrower or in which Borrower now holds or hereafter acquires or receives any right or interest: (a) any trademark, trade name, corporate name, business name, trade style, service mark, logo, other source or business identifier, print or label on which any of the foregoing have appeared or appear, design or other general intangibles of like nature, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and any applications in connection therewith, including registration, recording and application in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or other foreign jurisdiction and (b) any reissue, extension or renewal of any of the foregoing.

                       “Transfer” is defined in Section 7.1.

[Signature page follows.]

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the Effective Date.

BORROWER:

GLU MOBILE INC.

By:		/s/ Albert Pimentel
Name:		Albert Pimentel
Title:		EVP and CFO

BANK:

SILICON VALLEY BANK

By:		/s/ Tim Walsh
Name:		Tim Walsh
Title:		Senior Relationship Mgr

Effective Date: February 14, 2007

EXHIBIT A

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

     All goods, Accounts (including health-care receivables), Equipment, Inventory, contract rights or rights to payment of money, leases, license agreements, franchise agreements, General Intangibles, commercial tort claims, documents, instruments (including any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts, fixtures, letters of credit rights (whether or not the letter of credit is evidenced by a writing), securities, and all other investment property, supporting obligations, and financial assets, whether now owned or hereafter acquired, wherever located; and

     all 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, attachments, accessories, accessions and improvements to and replacements, products, proceeds and insurance proceeds of any or all of the foregoing.

City and State:

Beneficiary Bank Transit (ABA) #:

For Further Credit to:

Special Instruction:

Authorized Signature:                                                               2 ^nd Signature (if required):

EXHIBIT C

BORROWING BASE CERTIFICATE

Borrower: Glu Mobile Inc.
Lender: Silicon Valley Bank
Commitment Amount: $8,000,000

ACCOUNTS RECEIVABLE
Accounts Receivable Book Value as of		$
Additions (please explain on reverse)		$
TOTAL ACCOUNTS RECEIVABLE		$
ACCOUNTS RECEIVABLE DEDUCTIONS (without duplication)
Amounts over 90 days due		$
Balance of 50% over 90 day accounts		$
Credit balances over 90 days		$
Concentration Limits		$
Foreign Accounts (other than Eligible Foreign Accounts)		$
Governmental Accounts		$
Contra Accounts		$
Promotion or Demo Accounts		$
Intercompany/Employee Accounts		$
Disputed Accounts		$
Deferred Revenue		$
Other (please explain on reverse)		$
TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS		$
Eligible Accounts (#3 minus #16)		$
ELIGIBLE AMOUNT OF ACCOUNTS ( ___% of #17)		$
BALANCES
Maximum Loan Amount		$
Total Funds Available [Lesser of #21 or (#18 plus #20)]		$
Present balance owing on Line of Credit		$
Outstanding under Sublimits		$
RESERVE POSITION (#22 minus #23 and #24)		$

		BANK USE ONLY
		Received by:
		AUTHORIZED SIGNER
		Date:
COMMENTS:		Verified:
By:		AUTHORIZED SIGNER
AUTHORIZED SIGNER		Date:
Date:

EXECUTION COPY

EXHIBIT D

COMPLIANCE CERTIFICATE

TO:  SILICON VALLEY BANK		Date: ______________________________

FROM:   Glu Mobile Inc.

     The undersigned authorized officer of Glu Mobile Inc. (“Borrower”) certifies that under the terms and conditions of the Loan and Security Agreement between Borrower and Bank (the “Agreement”), (1) Borrower is in complete compliance for the period ending ___with all required covenants except as noted below, (2) there are no Events of Default, (3) all representations and warranties in the Agreement are true and correct in all material respects on this date except as noted below; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date, (4) Borrower, and each of its Subsidiaries, has timely filed all required tax returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower except as otherwise permitted pursuant to the terms of Section 5.9 of the Agreement, and (5) no Liens have been levied or claims made against Borrower or any of its Subsidiaries relating to unpaid employee payroll or benefits of which Borrower has not previously provided written notification to Bank. Attached are the required documents supporting the certification. The undersigned certifies that these are prepared in accordance with generally GAAP consistently applied from one period to the next except as explained in an accompanying letter or footnotes. The undersigned 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. Capitalized terms used but not otherwise defined herein shall have the meanings given them in the Agreement.

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

	Reporting Covenant			Required			Complies
	Monthly financial statements with Compliance Certificate (Consolidating Financials)			Monthly within 30 days			Yes No
	Annual financial statement (CPA Audited) + CC			FYE within 210 days			Yes No
	10-Q, 10-K and 8-K			Within 5 days after filing with SEC			Yes No
	Borrowing Base Certificate, A/R & A/P Agings			Monthly within 30 days			Yes No
	Operating Budgets and Forecasts			30 days prior to FYE			Yes No
	The following Intellectual Property was registered after the Effective Date (if no registrations, state “None”) ____________________________________________________________________________________________

Financial Covenant

Required

Actual

Complies

Maintain on a Monthly Basis:

Minimum Tangible Net Worth

$3,000,000 increasing by 50% of new equity

$___

Yes

No

     The following financial covenant analysis and information set forth in Schedule 1 attached hereto are true and accurate as of the date of this Certificate.

     The following are the exceptions with respect to the certification above: (If no exceptions exist, state “No exceptions to note.”)

     

     

     

     

Glu Mobile Inc.				BANK USE ONLY
				Received by:
						authorized signer
				Date:
				Verified:
By:						authorized signer
Name:				Date:
Title:
				Compliance Status: Yes No

     EXECUTION COPY

Schedule 1 to Compliance Certificate

Financial Covenants of Borrower

Dated:____________________

VII.     Tangible Net Worth (Section 6.9)

Required:          $3,000,000 plus 50% of new equity

Actual:

A.

Tangible Assets

$

B.

Liabilities

$

C.

Proceeds of New Equity since Effective Date ($___) x .50

$

D.

Line A less Line B plus Line C.

$

Is line D equal to or greater than $3,000,000 plus Line C?

___ No, not in compliance		___ Yes, in compliance

EXECUTION COPY

Exhibit E

Transaction Report

[EXCEL spreadsheet to be provided separately from lending officer.]

FIRST AMENDMENT
TO
LOAN AND SECURITY AGREEMENT

     THIS FIRST AMENDMENT to Loan and Security Agreement (this “Amendment”) is entered into this 1st day of March, 2007, by and between SILICON VALLEY BANK (“Bank”) and GLU MOBILE INC., a California corporation (“Borrower”).

Recitals

     A. Bank and Borrower are entering into that certain Loan and Security Agreement dated as of February 14, 2007 (as the same may from time to time be further amended, modified, supplemented or restated, the “Loan Agreement”).

     B. Pursuant to the Agreement and Plan of Merger, dated as of March 1, 2007, Borrower and Glu Mobile Inc., a Delaware corporation (“Glu Mobile Delaware”) are merging with the surviving entity being Glu Mobile Delaware.

     C. Pursuant to Section 12.6 of the Loan Agreement, the Loan Agreement may be amended by execution of an instrument in writing signed by Bank and Borrower.

Agreement

     Now, Therefore, in consideration of the foregoing recitals and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:

     1. Definitions. Capitalized terms used but not defined in this Amendment shall have the meanings given to them in the Loan Agreement.

     2. Amendments to Loan Agreement. Effective as of the date hereof, all references to “Glu Mobile Inc.” or to “Borrower” in the Loan Agreement shall be deemed to be references to Glu Mobile Inc., a Delaware corporation.

     3. References to Loan Agreement in Loan Agreements. References to the Loan Agreement in each of the Loan Documents shall be deemed to include a reference to this Amendment and the terms and provisions contained herein.

     4. No Other Amendments. Except as expressly provided in this Amendment, all of the terms and conditions of the Loan Agreement remain unchanged, and the terms and conditions of the Loan Agreement hereby remain in full force and effect.

     5. Representations and Warranties. Glu Mobile Delaware represents and warrants that:

               (a) immediately upon giving effect to this Amendment (i) the representations and warranties contained in the Loan Documents are true, accurate and

complete in all material respects as of the date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as of such date), and (ii) no Event of Default has occurred and is continuing;

               (b) Glu Mobile Delaware has the corporate power and authority to execute and deliver this Amendment and to perform its obligations under the Loan Agreement, as amended by this Amendment;

               (c) the certificate of incorporation, bylaws and other organizational documents of Glu Mobile Delaware delivered to Bank on the date hereof remain true, accurate and complete and have not been amended, supplemented or restated and are and continue to be in full force and effect;

               (d) the execution and delivery by Glu Mobile Delaware of this Amendment and the performance by Glu Mobile Delaware of its obligations under the Loan Agreement, as amended by this Amendment, have been duly authorized by all necessary corporate action on the part of Glu Mobile Delaware; and

               (e) this Amendment has been duly executed and delivered by the Glu Mobile Delaware and is the binding obligation of Glu Mobile Delaware, enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar laws of general application and equitable principles relating to or affecting creditors’ rights.

     6. Affirmative Covenants. Glu Mobile Delaware covenants that it shall succeed to and shall possess all the assets, properties, rights, privileges, powers, franchises, immunities, and purposes, and be subject to all the debts, liabilities, obligations, restrictions and duties of Borrower, all without further act or deed.

     7. Execution in Counterparts. This Amendment may be executed in any number of counterparts and by each party on a separate counterpart, each of which when so executed and delivered shall be an original, but all of which together shall constitute one instrument. In proving this Amendment, it shall not be necessary to produce or account for more than one such counterpart signed by the party against whom enforcement is sought.

     8. Miscellaneous. This Amendment shall be construed in accordance with, and governed in all respects by, the internal laws of the State of California. The captions in this Amendment are for convenience of reference only and shall not define or limit the provisions hereof.

[Signature page follows.]

     In Witness Whereof, the parties hereto have caused this Amendment to be duly executed and delivered as of the date first written above.

BANK:				BORROWER:
SILICON VALLEY BANK				GLU MOBILE INC., a California Corporation.
By:		/s/ Tim Walsh		By:		/s/ Albert A. Pimentel
Name:		Tim Walsh		Name:		Albert A. Pimentel
Title:		SVP		Title:		Exec. VP & CFO
				GLU MOBILE INC., a Delaware Corporation
				By:		/s/ Albert A. Pimentel
				Name:		Albert A. Pimentel
				Title:		Exec. VP & CFO