{"id":41137,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/loan-and-security-agreement-silicon-valley-bank-and-invision4.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"loan-and-security-agreement-silicon-valley-bank-and-invision4","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/finance\/loan-and-security-agreement-silicon-valley-bank-and-invision4.html","title":{"rendered":"Loan and Security Agreement &#8211; Silicon Valley Bank and InVision Technologies Inc."},"content":{"rendered":"<pre>\n\n                AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT\n                           INVISION TECHNOLOGIES, INC.\n\n\n\n                                TABLE OF CONTENTS\n\n\n\n                                                                                            Page\n                                                                                      \n\n1     ACCOUNTING AND OTHER TERMS...............................................................4\n\n2     LOAN AND TERMS OF PAYMENT................................................................4\n      2.1      Credit Extensions...............................................................4\n      2.2      Interest Rate, Payments.........................................................6\n      2.3      Fees............................................................................6\n      2.4      Additional Costs................................................................6\n\n3     CONDITIONS OF LOANS......................................................................6\n      3.1      Conditions Precedent to Initial Credit Extension................................6\n      3.2      Conditions Precedent to all Credit Extensions...................................6\n\n4     CREATION OF SECURITY INTEREST............................................................7\n      4.1      Grant of Security Interest......................................................7\n\n5     REPRESENTATIONS AND WARRANTIES...........................................................7\n      5.1      Due Organization and Authorization..............................................7\n      5.2      Collateral......................................................................7\n      5.3      Litigation......................................................................7\n      5.4      No Material Adverse Change in Financial Statements..............................7\n      5.5      Solvency........................................................................7\n      5.6      Regulatory Compliance...........................................................7\n      5.7      Subsidiaries....................................................................8\n      5.8      Full Disclosure.................................................................8\n\n6     AFFIRMATIVE COVENANTS....................................................................8\n      6.1      Clean-Up Period.................................................................8\n      6.2      Government Compliance...........................................................8\n      6.3      Financial Statements, Reports, Certificates.....................................8\n      6.4      Inventory; Returns..............................................................9\n      6.5      Taxes...........................................................................9\n      6.6      Insurance.......................................................................9\n      6.7      Primary Accounts................................................................9\n      6.8      Financial Covenants.............................................................9\n      6.9      Further Assurances..............................................................9\n\n7     NEGATIVE COVENANTS......................................................................10\n      7.1      Dispositions...................................................................10\n      7.2      Changes in Business, Ownership, Management or Business Locations...............10\n      7.3      Mergers or Acquisitions........................................................10\n      7.4      Indebtedness...................................................................10\n      7.5      Encumbrance....................................................................10\n      7.6      Distributions; Investments.....................................................10\n      7.7      Transactions with Affiliates...................................................10\n      7.8      Subordinated Debt..............................................................10\n      7.9      Compliance.....................................................................11\n\n8     EVENTS OF DEFAULT.......................................................................11\n      8.1      Payment Default................................................................11\n      8.2      Covenant Default...............................................................11\n      8.3      Material Adverse Change........................................................11\n\n\n\n                                    2\n\n\n<font size=\"2\">\n                                                                                            Page\n                                                                                      \n\n      8.4      Attachment.....................................................................11\n      8.5      Insolvency.....................................................................11\n      8.6      Other Agreements...............................................................12\n      8.7      Judgments......................................................................12\n      8.8      Misrepresentations.............................................................12\n\n9     BANK'S RIGHTS AND REMEDIES..............................................................12\n      9.1      Rights and Remedies............................................................12\n      9.2      Power of Attorney..............................................................12\n      9.3      Accounts Collection............................................................13\n      9.4      Bank Expenses..................................................................13\n      9.5      Bank's Liability for Collateral................................................13\n      9.6      Remedies Cumulative............................................................13\n      9.7      Demand Waiver..................................................................13\n\n10    NOTICES.................................................................................13\n\n11    CHOICE OF LAW , VENUE AND JURY TRIAL WAIVER.............................................14\n\n12    GENERAL PROVISIONS......................................................................14\n      12.1     Successors and Assigns.........................................................14\n      12.2     Indemnification................................................................14\n      12.3     Time of Essence................................................................14\n      12.4     Severability of Provision......................................................14\n      12.5     Amendments in Writing, Integration.............................................14\n      12.6     Counterparts...................................................................14\n      12.7     Survival.......................................................................15\n      12.8     Confidentiality................................................................15\n      12.9     Effect of Amendment and Restatement............................................15\n      12.10    Attorneys' Fees, Costs and Expenses............................................15\n\n13    DEFINITIONS.............................................................................15\n      13.1     Definitions....................................................................15\n\n<\/font>\n                                      3\n\n\n         THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT is dated May 4,\n1999, between SILICON VALLEY BANK ('Bank'), whose address is 3003 Tasman Drive,\nSanta Clara, California 95054 and INVISION TECHNOLOGIES, INC. ('Borrower'),\nwhose address is 7151 Gateway Boulevard, Newark, California 94560.\n\n                                    RECITALS\n\n         A.       Bank and Borrower are parties to that certain Loan and\nSecurity Agreement dated February 20, 1997, as amended (collectively, the\n'Original Agreement').\n\n         B.       Borrower and Bank desire in this Agreement to set forth their\nagreement with respect to continue amortizing the Term Loans and a working\ncapital and equipment line and to amend and restate in its entirety without\nnovation the Original Agreement in accordance with the provisions herein.\n\n                                    AGREEMENT\n\n         The parties agree as follows:\n\n1        ACCOUNTING AND OTHER TERMS\n\n         Accounting terms not defined in this Agreement will be construed\nfollowing GAAP. Calculations and determinations must be made following GAAP. The\nterm 'financial statements' includes the notes and schedules. The terms\n'including' and 'includes' always mean 'including (or includes) without\nlimitation,' in this or any Loan Document. THIS AGREEMENT SHALL BE CONSTRUED TO\nIMPART UPON BANK A DUTY TO ACT REASONABLY AT ALL TIMES.\n\n2        LOAN AND TERMS OF PAYMENT\n\n2.1      CREDIT EXTENSIONS.\n\n         Borrower will pay Bank the unpaid principal amount of all Credit\nExtensions and interest on the unpaid principal amount of the Credit Extensions.\n\n2.1.1    REVOLVING ADVANCES.\n\n         (a) Bank will make Advances not exceeding (i) the Committed Revolving\nLine, minus (ii) the amount of all outstanding Letters of Credit (including\ndrawn but unreimbursed Letters of Credit), and minus (iii) the Foreign Exchange\nReserve. Amounts borrowed under this Section may be repaid and reborrowed during\nthe term of this Agreement.\n\n         (b) To obtain an Advance, Borrower must notify Bank by facsimile or\ntelephone by 3:00 p.m. Pacific time on the Business Day the Advance is to be\nmade. Borrower must promptly confirm the notification by delivering to Bank the\nPayment\/Advance Form attached as Exhibit B. Bank will credit Advances to\nBorrower's deposit account. Bank may make Advances under this Agreement based on\ninstructions from a Responsible Officer or his or her designee or without\ninstructions if the Advances are necessary to meet Obligations which have become\ndue. Bank may rely on any telephone notice given by a person whom Bank believes\nis a Responsible Officer or designee. Borrower will indemnify Bank for any loss\nBank suffers due to reliance.\n\n         (c) The Committed Revolving Line terminates on the Revolving Maturity\nDate, when all Advances and other amounts due under this Agreement are\nimmediately payable.\n\n2.1.2    LETTERS OF CREDIT.\n\n         Bank will issue or have issued Letters of Credit for Borrower's account\nnot exceeding (i) the Committed Revolving Line minus (ii) the outstanding\nprincipal balance of the Advances minus the Foreign Exchange Reserve; however,\nthe face amount of outstanding Letters of Credit (including drawn but\n\n\n                                      4\n\n\nunreimbursed Letters of Credit and any Letter of Credit Reserve) may not exceed\n$4,000,000. Each Letter of Credit will have an expiry date of no later than 180\ndays after the Revolving Maturity Date, but Borrower's reimbursement obligation\nwill be secured by cash on terms acceptable to Bank at any time after the\nRevolving Maturity Date if the term of this Agreement is not extended by Bank.\n\n2.1.3    FOREIGN EXCHANGE SUBLIMIT.\n\n         If there is availability under the Committed Revolving Line and the\nBorrowing Base, then Borrower may enter in foreign exchange forward contracts\nwith the Bank under which Borrower commits to purchase from or sell to Bank a\nset amount of foreign currency more than one business day after the contract\ndate (the 'FX Forward Contract'). Bank will subtract 10% of each outstanding FX\nForward Contract from the foreign exchange sublimit which is a maximum of\n$3,000,000 (the 'FX Sublimit'). The total FX Forward Contracts at any one time\nmay not exceed 10 times the amount of the FX Sublimit. Bank may terminate the FX\nForward Contracts if an Event of Default occurs.\n\n2.1.4    EQUIPMENT ADVANCES.\n\n         (a) Through April 20, 2000 (the 'Equipment Availability End Date'),\nBank will make advances ('Equipment Advance' and, collectively, 'Equipment\nAdvances') not exceeding the Committed Equipment Line. The Equipment Advances\nmay only be used to finance or refinance Equipment and may not exceed 100% of\nthe invoice. Softcosts (consisting of taxes, shipping, warranty charges, freight\ndiscounts and installation expense) may constitute up to 20% of the aggregate\nEquipment Advances.\n\n         (b) Interest accrues from the date of each Equipment Advance at the\nrate in Section 2.2(a) and is payable monthly until the Equipment Availability\nEnd Date occurs. Equipment Advances outstanding on the Equipment Availability\nEnd Date are payable in 36 equal monthly installments of principal, plus accrued\ninterest, beginning on the 20th of each month following the Equipment\nAvailability End Date and ending on April 20, 2003 (the 'Equipment Maturity\nDate'). Equipment Advances when repaid may not be reborrowed.\n\n         (c) To obtain an Equipment Advance, Borrower must notify Bank (the\nnotice is irrevocable) by facsimile no later than 3:00 p.m. Pacific time 1\nBusiness Day before the day on which the Equipment Advance is to be made. The\nnotice in the form of Exhibit B (Payment\/Advance Form) must be signed by a\nResponsible Officer or designee and include a copy of the invoice for the\nEquipment being financed.\n\n2.1.5    TERM LOAN #1.\n\n         (a) The outstanding amount under the Term Loan #1 will continue to\namortize and be payable as follows:\n\n         (b) Borrower will pay 50 equal installments of principal plus Interest\nof $11,041.72 (the 'Term Loan #1 Payment'). Each Term Loan #1 Payment is payable\non the 29th of each month during the term of the loan. Borrower's final Term\nLoan #1 Payment, due on June 29, 2003, includes all outstanding Term Loan #1\nprincipal and accrued interest.\n\n2.1.6    TERM LOAN #2.\n\n         (a) The outstanding amount under the Term Loan # 2 will continue to \namortize and be payable as follows:\n\n         (b) Borrower will pay 31 equal installments of principal plus Interest\nof $17,846.62 (the 'Term Loan #2 Payment'). Each Term Loan #2 Payment is payable\non the 29th of each month during the term of the loan. Borrower's final Term\nLoan # 2 Payment, due on November 29, 2001, includes all outstanding Term Loan\n#2 principal and accrued interest.\n\n\n                                      5\n\n\n2.2      INTEREST RATE, PAYMENTS.\n\n         (a) Interest Rate. (i) Advances accrue interest on the outstanding\nprincipal balance at a per annum rate equal to the Prime Rate; (ii) Prior to the\nEquipment Availability End Date, Equipment Advances accrue interest on the\noutstanding principal balance at a per annum rate of 0.25 percentage points\nabove the Prime Rate. Following the Equipment Availability End Date, Borrower\nshall have the option of electing either variable rate equal to 0.25 percentage\npoints above the Prime Rate or a fixed rate equal to the Treasury Rate plus 350\nbasis points; (iii) the Term Loan # 1 accrues interest at a per annum rate fixed\nat 8.99 percent; and (iv) the Term Loan #2 accrues interest at a per annum rate\nfixed at 9.03 percent. For all fixed rate Obligations, any prepayment must\ninclude a Prepayment Fee. After an Event of Default, Obligations accrue interest\nat 5 percent above the rate effective immediately before the Event of Default.\nThe interest rate increases or decreases when the Prime Rate changes. Interest\nis computed on a 360 day year for the actual number of days elapsed.\n\n         (b) Payments. Interest due on the Committed Revolving Line is payable\non the 20th of each month. Interest due on the Equipment Advances is payable on\nthe 20th of each month. Bank may debit any of Borrower's deposit accounts\nincluding Account Number _____________________________ for principal and\ninterest payments or any amounts Borrower owes Bank. Bank will notify Borrower\nwhen it debits Borrower's accounts. These debits are not a set-off. Payments\nreceived after 12:00 noon Pacific time are considered received at the opening of\nbusiness on the next Business Day. When a payment is due on a day that is not a\nBusiness Day, the payment is due the next Business Day and additional fees or\ninterest accrue.\n\n2.3      FEES.\n\n         Borrower will pay:\n\n         (a) Facility Fee.  A fully earned, non-refundable Facility Fee of \n$12,500 for the Committed Revolving Line due on the Closing Date; and\n\n         (b) Bank Expenses. All Bank Expenses (including reasonable attorneys'\nfees and expenses) incurred through and after the date of this Agreement, are\npayable when due.\n\n2.4      ADDITIONAL COSTS.\n\n         If any law or regulation increases Bank's costs or reduces its income\nfor any loan, Borrower will pay the increase in cost or reduction in income or\nadditional expense.\n\n3        CONDITIONS OF LOANS\n\n3.1      CONDITIONS PRECEDENT TO INITIAL CREDIT EXTENSION.\n\n         Bank's obligation to make the initial Credit Extension is subject to\nthe condition precedent that it receive the agreements, documents and fees it\nrequires.\n\n3.2      CONDITIONS PRECEDENT TO ALL CREDIT EXTENSIONS.\n\n         Bank's obligations to make each Credit Extension, including the initial\nCredit Extension, is subject to the following:\n\n         (a) timely receipt of any Payment\/Advance Form; and\n\n         (b) the representations and warranties in Section 5 must be materially\ntrue on the date of the Payment\/Advance Form and on the effective date of each\nCredit Extension and no Event of Default may have occurred and be continuing, or\nresult from the Credit Extension. Each Credit Extension is Borrower's\nrepresentation and warranty on that date that the representations and warranties\nof Section 5 remain true.\n\n\n                                      6\n\n\n4        CREATION OF SECURITY INTEREST\n\n4.1      GRANT OF SECURITY INTEREST.\n\n         Borrower grants Bank a continuing security interest in all presently\nexisting and later acquired Collateral to secure all Obligations and performance\nof each of Borrower's duties under the Loan Documents. Except for Permitted\nLiens, any security interest will be a first priority security interest in the\nCollateral. Bank may place a 'hold' on any deposit account pledged as\nCollateral. If this Agreement is terminated, Bank's lien and security interest\nin the Collateral will continue until Borrower fully satisfies its Obligations.\nAdditionally, Borrower agrees that for all Accounts from the Federal Aviation\nAdministration ('FAA'), Borrower will cause the payee to assign its payment\nrights to Bank and have the assignment acknowledged under the Assignment of\nClaims Act of 1940 (31 U.S.C. 3727).\n\n5        REPRESENTATIONS AND WARRANTIES\n\n         Borrower represents and warrants as follows:\n\n5.1      DUE ORGANIZATION AND AUTHORIZATION.\n\n         Borrower and each Subsidiary is duly existing and in good standing in\nits state of formation and qualified and licensed to do business in, and in good\nstanding in, any state in which the conduct of its business or its ownership of\nproperty requires that it be qualified.\n\n         The execution, delivery and performance of the Loan Documents have been\nduly authorized, and do not conflict with Borrower's formation documents, nor\nconstitute an event of default under any material agreement by which Borrower is\nbound. Borrower is not in default under any agreement to which or by which it is\nbound in which the default could cause a Material Adverse Change.\n\n5.2      COLLATERAL.\n\n         Borrower has good title to the Collateral, free of Liens except\nPermitted Liens. All Inventory is in all material respects of good and\nmarketable quality, free from material defects.\n\n5.3      LITIGATION.\n\n         Except as shown in the Schedule, there are no actions or proceedings\npending or, to Borrower's knowledge, threatened by or against Borrower or any\nSubsidiary in which an adverse decision could cause a Material Adverse Change.\n\n5.4      NO MATERIAL ADVERSE CHANGE IN FINANCIAL STATEMENTS.\n\n         All consolidated financial statements for Borrower, and any Subsidiary,\ndelivered to Bank fairly present in all material respects Borrower's\nconsolidated financial condition and Borrower's consolidated results of\noperations. There has not been any material deterioration in Borrower's\nconsolidated financial condition since the date of the most recent financial\nstatements submitted to Bank.\n\n5.5      SOLVENCY.\n\n         The fair salable value of Borrower's assets (including goodwill minus\ndisposition costs) exceeds the fair value of its liabilities; the Borrower is\nnot left with unreasonably small capital after the transactions in this\nAgreement; and Borrower is able to pay its debts (including trade debts) as they\nmature.\n\n5.6      REGULATORY COMPLIANCE.\n\n         Borrower is not an 'investment company' or a company 'controlled' by an\n'investment company' under the Investment Company Act. Borrower is not engaged\nas one of its important activities in \n\n\n                                      7\n\n\nextending credit for margin stock (under Regulations G, T and U of the \nFederal Reserve Board of Governors). Borrower has complied with the Federal \nFair Labor Standards Act. Borrower has not violated any laws, ordinances or \nrules, the violation of which could cause a Material Adverse Change. None of \nBorrower's or any Subsidiary's properties or assets has been used by Borrower \nor any Subsidiary or, to the best of Borrower's knowledge, by previous \nPersons, in disposing, producing, storing, treating, or transporting any \nhazardous substance other than legally. Borrower and each Subsidiary has \ntimely filed all required tax returns and paid, or made adequate provision to \npay, all taxes, except those being contested in good faith with adequate \nreserves under GAAP. Borrower and each Subsidiary has obtained all consents, \napprovals and authorizations of, made all declarations or filings with, and \ngiven all notices to, all government authorities that are necessary to \ncontinue its business as currently conducted.\n\n5.7      SUBSIDIARIES.\n\n         Borrower does not own any stock, partnership interest or other equity\nsecurities except for Permitted Investments.\n\n5.8      FULL DISCLOSURE.\n\n         No representation, warranty or other statement of Borrower in any\ncertificate or written statement given to Bank contains any untrue statement of\na material fact or omits to state a material fact necessary to make the\nstatements contained in the certificates or statements not misleading.\n\n6        AFFIRMATIVE COVENANTS\n\n         Borrower will do all of the following:\n\n6.1      CLEAN-UP PERIOD.\n\n         Borrower will maintain a zero balance on the Committed Revolving Line\n(exclusive of Letters of Credit Obligations) for a period of thirty (30)\nconsecutive days during the term of the Committed Revolving Line.\n\n6.2      GOVERNMENT COMPLIANCE.\n\n         Borrower will maintain its and all Subsidiaries' legal existence and\ngood standing in its jurisdiction of formation and maintain qualification in\neach jurisdiction in which the failure to so qualify could have a material\nadverse effect on Borrower's business or operations. Borrower will comply, and\nhave each Subsidiary comply, with all laws, ordinances and regulations to which\nit is subject, noncompliance with which could have a material adverse effect on\nBorrower's business or operations or cause a Material Adverse Change.\n\n6.3      FINANCIAL STATEMENTS, REPORTS, CERTIFICATES.\n\n         (a) Borrower will deliver to Bank: (i) as soon as available, but no\nlater than 20 days after the last day of each month, a company prepared\nconsolidated balance sheet and income statement covering Borrower's consolidated\noperations during the period, in a form and certified by a Responsible Officer\nacceptable to Bank; (ii) as soon as available, but no later than 120 days after\nthe last day of Borrower's fiscal year, audited consolidated financial\nstatements prepared under GAAP, consistently applied, together with an\nunqualified opinion on the financial statements from an independent certified\npublic accounting firm acceptable to Bank; (iii) within 5 days of filing, copies\nof all statements, reports and notices made available to Borrower's security\nholders or to any holders of Subordinated Debt and all reports on Form 10-K,\n10-Q and 8-K filed with the Securities and Exchange Commission; (iv) a prompt\nreport of any legal actions pending or threatened against Borrower or any\nSubsidiary that could result in damages or costs to Borrower or any Subsidiary\nof $100,000 or more; and (v) budgets, sales projections, operating plans or\nother financial information Bank requests.\n\n\n                                      8\n\n\n         (b) Within 20 days after the last day of each month, Borrower will\ndeliver to Bank with the monthly financial statements a Compliance Certificate\nsigned by a Responsible Officer in the form of Exhibit C.\n\n         (c) Bank has the right to audit Borrower's Collateral at Borrower's\nexpense, but the audits will be conducted no more often than annually unless (i)\nthere are no borrowings under the Committed Revolving Line and (ii) an Event of\nDefault has occurred and is continuing.\n\n6.4      INVENTORY; RETURNS.\n\n         Borrower will keep all Inventory in good and marketable condition, free\nfrom material defects. Returns and allowances between Borrower and its account\ndebtors will follow Borrower's customary practices as they exist at execution of\nthis Agreement. Borrower must promptly notify Bank of all returns, recoveries,\ndisputes and claims, that involve more than $50,000.\n\n6.5      TAXES.\n\n         Borrower will make, and cause each Subsidiary to make, timely payment\nof all material federal, state, and local taxes or assessments and will deliver\nto Bank, on demand, appropriate certificates attesting to the payment.\n\n6.6      INSURANCE.\n\n         Borrower will keep its business and the Collateral insured for risks\nand in amounts, as Bank requests. Insurance policies will be in a form, with\ncompanies, and in amounts that are satisfactory to Bank. All property policies\nwill have a lender's loss payable endorsement showing Bank as an additional loss\npayee and all liability policies will show the Bank as an additional insured and\nprovide that the insurer must give Bank at least 20 days notice before canceling\nits policy. At Bank's request, Borrower will deliver certified copies of\npolicies and evidence of all premium payments. Proceeds payable under any policy\nwill, at Bank's option, be payable to Bank on account of the Obligations.\n\n6.7      PRIMARY ACCOUNTS.\n\n         Borrower will maintain its primary depository and operating accounts\nwith Bank.\n\n6.8      FINANCIAL COVENANTS.\n\n         Borrower will maintain, at such times there are outstanding Credit\nExtensions, as of the last day of each month, otherwise as of the last day of\neach quarter:\n\n               (i)    QUICK RATIO (ADJUSTED).  A ratio of Quick Assets to \nCurrent Liabilities minus Deferred Maintenance Revenue of at least 1.25 to \n1.00.\n\n               (ii)   DEBT\/TANGIBLE NET WORTH RATIO.  A ratio of Total\nLiabilities less Subordinated Debt to Tangible Net Worth plus Subordinated Debt\nof not more than 1.00 to 1.00.\n\n               (iii)  PROFITABILITY.  Borrower will have a minimum net profit of\n$1 for each quarter and fiscal year end.\n\n6.9      FURTHER ASSURANCES.\n\n         Borrower will execute any further instruments and take further action\nas Bank requests to perfect or continue Bank's security interest in the\nCollateral or to effect the purposes of this Agreement.\n\n\n                                      9\n\n\n7        NEGATIVE COVENANTS\n\n         Borrower will not do any of the following:\n\n7.1      DISPOSITIONS.\n\n         Convey, sell, lease, transfer or otherwise dispose of (collectively\n'Transfer'), or permit any of its Subsidiaries to Transfer, all or any part of\nits business or property, other than Transfers (i) of Inventory in the ordinary\ncourse of business; (ii) of non-exclusive licenses and similar arrangements for\nthe use of the property of Borrower or its Subsidiaries in the ordinary course\nof business; or (iii) of worn-out or obsolete Equipment.\n\n7.2      CHANGES IN BUSINESS, OWNERSHIP, MANAGEMENT OR BUSINESS LOCATIONS.\n\n         Engage in or permit any of its Subsidiaries to engage in any business\nother than the businesses currently engaged in by Borrower or have a material\nchange in its ownership of greater than 25%. Borrower will not, without at least\n30 days prior written notice, relocate its chief executive office or add any new\noffices or business locations.\n\n7.3      MERGERS OR ACQUISITIONS.\n\n         Merge or consolidate, or permit any of its Subsidiaries to merge or\nconsolidate, with any other Person, or acquire, or permit any of its\nSubsidiaries to acquire, all or substantially all of the capital stock or\nproperty of another Person, except where (i) no Event of Default has occurred\nand is continuing or would result from such action during the term of this\nAgreement or result in a decrease of more than 25% of Tangible Net Worth; or\n(ii) the merger or consolidation is (a) a Subsidiary into another Subsidiary or\n(b) a Subsidiary into Borrower.\n\n7.4      INDEBTEDNESS.\n\n         Create, incur, assume, or be liable for any Indebtedness, or permit any\nSubsidiary to do so, other than Permitted Indebtedness.\n\n7.5      ENCUMBRANCE.\n\n         Create, incur, or allow any Lien on any of its property, or assign or\nconvey any right to receive income, including the sale of any Accounts, or\npermit any of its Subsidiaries to do so, except for Permitted Liens, or permit\nany Collateral not to be subject to the first priority security interest granted\nhere.\n\n7.6      DISTRIBUTIONS; INVESTMENTS.\n\n         Directly or indirectly acquire or own any Person, or make any\nInvestment in any Person, other than Permitted Investments, or permit any of its\nSubsidiaries to do so. Pay any dividends or make any distribution or payment or\nredeem, retire or purchase any capital stock.\n\n7.7      TRANSACTIONS WITH AFFILIATES.\n\n         Directly or indirectly enter or permit any material transaction with\nany Affiliate except transactions that are in the ordinary course of Borrower's\nbusiness, on terms no less favorable to Borrower than would be obtained in an\narm's length transaction with a non-affiliated Person.\n\n7.8      SUBORDINATED DEBT.\n\n         Make or permit any payment on any Subordinated Debt, except under the\nterms of the Subordinated Debt, or amend any provision in any document relating\nto the Subordinated Debt without Bank's prior written consent.\n\n\n                                      10\n\n\n7.9      COMPLIANCE.\n\n         Become an 'investment company' or a company controlled by an\n'investment company,' under the Investment Company Act of 1940 or undertake as\none of its important activities extending credit to purchase or carry margin\nstock, or use the proceeds of any Credit Extension for that purpose; fail to\nmeet the minimum funding requirements of ERISA, permit a Reportable Event or\nProhibited Transaction, as defined in ERISA, to occur; fail to comply with the\nFederal Fair Labor Standards Act or violate any other law or regulation, if the\nviolation could have a material adverse effect on Borrower's business or\noperations or cause a Material Adverse Change, or permit any of its Subsidiaries\nto do so.\n\n8        EVENTS OF DEFAULT\n\n         Any one of the following is an Event of Default:\n\n8.1      PAYMENT DEFAULT.\n\n         If Borrower fails to pay any of the Obligations when due;\n\n8.2      COVENANT DEFAULT.\n\n         If Borrower does not perform any obligation in Section 6 or violates\nany covenant in Section 7 or does not perform or observe any other material\nterm, condition or covenant in this Agreement, Exim Loan Documents, any Loan\nDocuments, or in any agreement between Borrower and Bank and as to any default\nunder a term, condition or covenant that can be cured, has not cured the default\nwithin 10 days after it occurs, or if the default cannot be cured within 10 days\nor cannot be cured after Borrower's attempts within 10 day period, and the\ndefault may be cured within a reasonable time, then Borrower has an additional\nperiod (of not more than 30 days) to attempt to cure the default. During the\nadditional time, the failure to cure the default is not an Event of Default (but\nno Credit Extensions will be made during the cure period);\n\n8.3      MATERIAL ADVERSE CHANGE.\n\n         (i) If there occurs a material impairment in the perfection or priority\nof the Bank's security interest in the Collateral or in the value of such\nCollateral which is not covered by adequate insurance or (ii) if the Bank\ndetermines, based upon information available to it and in its reasonable\njudgment, that there is a reasonable likelihood that Borrower will fail to\ncomply with one or more of the financial covenants in Section 6 during the next\nsucceeding financial reporting period.\n\n8.4      ATTACHMENT.\n\n         If any material portion of Borrower's assets is attached, seized,\nlevied on, or comes into possession of a trustee or receiver and the attachment,\nseizure or levy is not removed in 10 days, or if Borrower is enjoined,\nrestrained, or prevented by court order from conducting a material part of its\nbusiness or if a judgment or other claim becomes a Lien on a material portion of\nBorrower's assets, or if a notice of lien, levy, or assessment is filed against\nany of Borrower's assets by any government agency and not paid within 10 days\nafter Borrower receives notice. These are not Events of Default if stayed or if\na bond is posted pending contest by Borrower (but no Credit Extensions will be\nmade during the cure period);\n\n8.5      INSOLVENCY.\n\n         If Borrower becomes insolvent or if Borrower begins an Insolvency\nProceeding or an Insolvency Proceeding is begun against Borrower and not\ndismissed or stayed within 30 days (but no Credit Extensions will be made before\nany Insolvency Proceeding is dismissed);\n\n\n                                      11\n\n\n8.6      OTHER AGREEMENTS.\n\n         If there is a default in any agreement between Borrower and a third\nparty that gives the third party the right to accelerate any Indebtedness\nexceeding $100,000 or that could cause a Material Adverse Change;\n\n8.7      JUDGMENTS.\n\n         If a money judgment(s) in the aggregate of at least $50,000 is rendered\nagainst Borrower and is unsatisfied and unstayed for 10 days (but no Credit\nExtensions will be made before the judgment is stayed or satisfied); or\n\n8.8      MISREPRESENTATIONS.\n\n         If Borrower or any Person acting for Borrower makes any material\nmisrepresentation or material misstatement now or later in any warranty or\nrepresentation in this Agreement or in any writing delivered to Bank or to\ninduce Bank to enter this Agreement or any Loan Document.\n\n9        BANK'S RIGHTS AND REMEDIES\n\n9.1      RIGHTS AND REMEDIES.\n\n         When an Event of Default occurs and continues Bank may, without notice\nor demand, do any or all of the following:\n\n         (a) Declare all Obligations immediately due and payable (but if an\nEvent of Default described in Section 8.5 occurs all Obligations are immediately\ndue and payable without any action by Bank);\n\n         (b) Stop advancing money or extending credit for Borrower's benefit\nunder this Agreement or under any other agreement between Borrower and Bank;\n\n         (c) Settle or adjust disputes and claims directly with account debtors\nfor amounts, on terms and in any order that Bank considers advisable;\n\n         (d) Make any payments and do any acts it considers necessary or\nreasonable to protect its security interest in the Collateral. Borrower will\nassemble the Collateral if Bank requires and make it available as Bank\ndesignates. Bank may enter premises where the Collateral is located, take and\nmaintain possession of any part of the Collateral, and pay, purchase, contest,\nor compromise any Lien which appears to be prior or superior to its security\ninterest and pay all expenses incurred. Borrower grants Bank a license to enter\nand occupy any of its premises, without charge, to exercise any of Bank's rights\nor remedies;\n\n         (e) Apply to the Obligations any (i) balances and deposits of Borrower\nit holds, or (ii) any amount held by Bank owing to or for the credit or the\naccount of Borrower;\n\n         (f) Ship, reclaim, recover, store, finish, maintain, repair, prepare\nfor sale, advertise for sale, and sell the Collateral; and\n\n         (g) Dispose of the Collateral according to the Code.\n\n9.2      POWER OF ATTORNEY.\n\n         Effective only when an Event of Default occurs and continues, Borrower\nirrevocably appoints Bank as its lawful attorney to: (i) endorse Borrower's name\non any checks or other forms of payment or security; (ii) sign Borrower's name\non any invoice or bill of lading for any Account or drafts against account\ndebtors, (iii) make, settle, and adjust all claims under Borrower's insurance\npolicies; (iv) settle and adjust disputes and claims about the Accounts directly\nwith account debtors, for amounts and on \n\n\n                                      12\n\n\nterms Bank determines reasonable; and (v) transfer the Collateral into the \nname of Bank or a third party as the Code permits. Bank may exercise the \npower of attorney to sign Borrower's name on any documents necessary to \nperfect or continue the perfection of any security interest regardless of \nwhether an Event of Default has occurred. Bank's appointment as Borrower's \nattorney in fact, and all of Bank's rights and powers, coupled with an \ninterest, are irrevocable until all Obligations have been fully repaid and \nperformed and Bank's obligation to provide Credit Extensions terminates.\n\n9.3      ACCOUNTS COLLECTION.\n\n         When an Event of Default occurs and continues, Bank may notify any\nPerson owing Borrower money of Bank's security interest in the funds and verify\nthe amount of the Account. Borrower must collect all payments in trust for Bank\nand, if requested by Bank, immediately deliver the payments to Bank in the form\nreceived from the account debtor, with proper endorsements for deposit.\n\n9.4      BANK EXPENSES.\n\n         If Borrower fails to pay any amount or furnish any required proof of\npayment to third persons Bank may make all or part of the payment or obtain\ninsurance policies required in Section 6.6, and take any action under the\npolicies Bank deems prudent. Any amounts paid by Bank are Bank Expenses and\nimmediately due and payable, bearing interest at the then applicable rate and\nsecured by the Collateral. No payments by Bank are deemed an agreement to make\nsimilar payments in the future or Bank's waiver of any Event of Default.\n\n9.5      BANK'S LIABILITY FOR COLLATERAL.\n\n         If Bank complies with reasonable banking practices it is not liable\nfor: (a) the safekeeping of the Collateral; (b) any loss or damage to the\nCollateral; (c) any diminution in the value of the Collateral; or (d) any act or\ndefault of any carrier, warehouseman, bailee, or other person. Borrower bears\nall risk of loss, damage or destruction of the Collateral.\n\n9.6      REMEDIES CUMULATIVE.\n\n         Bank's rights and remedies under this Agreement, the Loan Documents,\nand all other agreements are cumulative. Bank has all rights and remedies\nprovided under the Code, by law, or in equity. Bank's exercise of one right or\nremedy is not an election, and Bank's waiver of any Event of Default is not a\ncontinuing waiver. Bank's delay is not a waiver, election, or acquiescence. No\nwaiver is effective unless signed by Bank and then is only effective for the\nspecific instance and purpose for which it was given.\n\n9.7      DEMAND WAIVER.\n\n         Borrower waives demand, notice of default or dishonor, notice of\npayment and nonpayment, notice of any default, nonpayment at maturity, release,\ncompromise, settlement, extension, or renewal of accounts, documents,\ninstruments, chattel paper, and guarantees held by Bank on which Borrower is\nliable.\n\n10       NOTICES\n\n         All notices or demands by any party about this Agreement or any other\nrelated agreement must be in writing and be personally delivered or sent by an\novernight delivery service, by certified mail, postage prepaid, return receipt\nrequested, or by telefacsimile to the addresses set forth at the beginning of\nthis Agreement. A party may change its notice address by giving the other party\nwritten notice.\n\n\n                                      13\n\n\n11       CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER\n\n         California law governs the Loan Documents without regard to principles\nof conflicts of law. Borrower and Bank each submit to the exclusive jurisdiction\nof the State and Federal courts in Santa Clara County, California.\n\nBORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE\nOF ACTION ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY CONTEMPLATED\nTRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS\nWAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT.\nEACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.\n\n12       GENERAL PROVISIONS\n\n12.1     SUCCESSORS AND ASSIGNS.\n\n         This Agreement binds and is for the benefit of the successors and\npermitted assigns of each party. Borrower may not assign this Agreement or any\nrights under it without Bank's prior written consent which may be granted or\nwithheld in Bank's discretion. Bank has the right, without the consent of or\nnotice to Borrower, to sell, transfer, negotiate, or grant participation in all\nor any part of, or any interest in, Bank's obligations, rights and benefits\nunder this Agreement.\n\n12.2     INDEMNIFICATION.\n\n         Borrower will indemnify, defend and hold harmless Bank and its\nofficers, employees, and agents against: (a) all obligations, demands, claims,\nand liabilities asserted by any other party in connection with the transactions\ncontemplated by the Loan Documents; and (b) all losses or Bank Expenses\nincurred, or paid by Bank from, following, or consequential to transactions\nbetween Bank and Borrower (including reasonable attorneys fees and expenses),\nexcept for losses caused by Bank's gross negligence or willful misconduct.\n\n12.3     TIME OF ESSENCE.\n\n         Time is of the essence for the performance of all obligations in this\nAgreement.\n\n12.4     SEVERABILITY OF PROVISION.\n\n         Each provision of this Agreement is severable from every other\nprovision in determining the enforceability of any provision.\n\n12.5     AMENDMENTS IN WRITING, INTEGRATION.\n\n         All amendments to this Agreement must be in writing and signed by\nBorrower and Bank. This Agreement represents the entire agreement about this\nsubject matter, and supersedes prior negotiations or agreements. All prior\nagreements, understandings, representations, warranties, and negotiations\nbetween the parties about the subject matter of this Agreement merge into this\nAgreement and the Loan Documents.\n\n12.6     COUNTERPARTS.\n\n         This Agreement may be executed in any number of counterparts and by\ndifferent parties on separate counterparts, each of which, when executed and\ndelivered, are an original, and all taken together, constitute one Agreement.\n\n\n                                      14\n\n\n12.7     SURVIVAL.\n\n         All covenants, representations and warranties made in this Agreement\ncontinue in full force while any Obligations remain outstanding. The obligations\nof Borrower in Section 12.2 to indemnify Bank will survive until all statutes of\nlimitations for actions that may be brought against Bank have run.\n\n12.8     CONFIDENTIALITY.\n\n         In handling any confidential information, Bank will exercise the same\ndegree of care that it exercises for its own proprietary information, but\ndisclosure of information may be made (i) to Bank's subsidiaries or affiliates\nin connection with their business with Borrower, (ii) to prospective transferees\nor purchasers of any interest in the loans, (iii) as required by law,\nregulation, subpoena, or other order, (iv) as required in connection with Bank's\nexamination or audit and (v) as Bank considers appropriate exercising remedies\nunder this Agreement. Confidential information does not include information that\neither: (a) is in the public domain or in Bank's possession when disclosed to\nBank, or becomes part of the public domain after disclosure to Bank; or (b) is\ndisclosed to Bank by a third party, if Bank does not know that the third party\nis prohibited from disclosing the information.\n\n12.9     EFFECT OF AMENDMENT AND RESTATEMENT.\n\n         This Agreement is intended to and does completely amend and restate,\nwithout novation, the Original Agreement. All credit extensions or loans\noutstanding under the Original Agreement are and shall continue to be\noutstanding under this Agreement. All security interests granted under the\nOriginal Agreement are hereby confirmed and ratified and shall continue to\nsecure all Obligations under this Agreement.\n\n12.10    ATTORNEYS' FEES, COSTS AND EXPENSES.\n\n         In any action or proceeding between Borrower and Bank arising out of\nthe Loan Documents, the prevailing party will be entitled to recover its\nreasonable attorneys' fees and other costs and expenses incurred, in addition to\nany other relief to which it may be entitled.\n\n13       DEFINITIONS\n\n13.1     DEFINITIONS.\n\n         In this Agreement:\n\n         'ACCOUNTS' are all existing and later arising accounts, contract\nrights, and other obligations owed Borrower in connection with its sale or lease\nof goods (including licensing software and other technology) or provision of\nservices, all credit insurance, guaranties, other security and all merchandise\nreturned or reclaimed by Borrower and Borrower's Books relating to any of the\nforegoing.\n\n         'ADVANCE' or 'ADVANCES' is a loan advance (or advances) under the \nCommitted Revolving Line.\n\n         'AFFILIATE' of a Person is a Person that owns or controls directly or\nindirectly the Person, any Person that controls or is controlled by or is under\ncommon control with the Person, and each of that Person's senior executive\nofficers, directors, partners and, for any Person that is a limited liability\ncompany, that Person's managers and members.\n\n         'BANK EXPENSES' are all audit fees and expenses and reasonable costs\nand expenses (including reasonable attorneys' fees and expenses) for preparing,\nnegotiating, administering, defending and enforcing the Loan Documents\n(including appeals or Insolvency Proceedings).\n\n         'BORROWER'S BOOKS' are all Borrower's books and records including\nledgers, records regarding Borrower's assets or liabilities, the Collateral,\nbusiness operations or financial condition and all computer programs or discs or\nany equipment containing the information.\n\n\n                                      15\n\n\n         'BUSINESS DAY' is any day that is not a Saturday, Sunday or a day on \nwhich the Bank is closed.\n\n         'CLOSING DATE' is the date of this Agreement.\n\n         'CODE' is the California Uniform Commercial Code.\n\n         'COLLATERAL' is the property described on Exhibit A.\n\n         'COMMITTED EQUIPMENT LINE' is a Credit Extension of up to $500,000.\n\n         'COMMITTED REVOLVING LINE' is an Advance of up to $5,000,000.\n\n         'CONTINGENT OBLIGATION' is, for any Person, any direct or indirect\nliability, contingent or not, of that Person for (i) any indebtedness, lease,\ndividend, letter of credit or other obligation of another such as an obligation\ndirectly or indirectly guaranteed, endorsed, co-made, discounted or sold with\nrecourse by that Person, or for which that Person is directly or indirectly\nliable; (ii) any obligations for undrawn letters of credit for the account of\nthat Person; and (iii) all obligations from any interest rate, currency or\ncommodity swap agreement, interest rate cap or collar agreement, or other\nagreement or arrangement designated to protect a Person against fluctuation in\ninterest rates, currency exchange rates or commodity prices; but 'Contingent\nObligation' does not include endorsements in the ordinary course of business.\nThe amount of a Contingent Obligation is the stated or determined amount of the\nprimary obligation for which the Contingent Obligation is made or, if not\ndeterminable, the maximum reasonably anticipated liability for it determined by\nthe Person in good faith; but the amount may not exceed the maximum of the\nobligations under the guarantee or other support arrangement.\n\n         'CREDIT EXTENSION' is each Advance under the Committed Revolving Line\nof the Committed Exim Line, Equipment Advance, Letter of Credit, Term Loan,\nExchange Contract, or any other extension of credit by Bank for Borrower's\nbenefit.\n\n         'CURRENT LIABILITIES' are the aggregate amount of Borrower's Total\nLiabilities which mature within one (1) year.\n\n         'DEFERRED MAINTENANCE REVENUE' is all amounts received in advance of\nperformance under maintenance contract and not yet recognized as revenue.\n\n         'ELIGIBLE ACCOUNTS' are Accounts in the ordinary course of Borrower's\nbusiness that meet all Borrower's representations and warranties in Section 5;\nbut Bank may change eligibility standards by giving Borrower notice. Unless Bank\nagrees otherwise in writing, Eligible Accounts will not include:\n\n         (a) Accounts that the account debtor has not paid within 90 days of\n         invoice date;\n\n         (b) Accounts for an account debtor, 50% or more of whose Accounts have\n         not been paid within 90 days of invoice date;\n\n         (c) Credit balances over 90 days from invoice date;\n\n         (d) Accounts for an account debtor, including Affiliates, whose total\n         obligations to Borrower exceed 25% of all Accounts, for the amounts\n         that exceed that percentage, unless the Bank approves in writing;\n\n         (e) Accounts for which the account debtor does not have its principal\n         place of business in the United States;\n\n         (f) Accounts for which the account debtor is a federal, state or local\n         government entity or any department, agency, or instrumentality, except\n         for those accounts of the United States or any department, agency or\n         instrumentality thereto as to which the payee has assigned its rights\n         to \n\n\n                                      16\n\n\n         payment thereto to Bank and the assignment has been acknowledged,\n         pursuant to the Assignment of Claims Act of 1940, as amended;\n\n         (g) Accounts for which Borrower owes the account debtor, but only up to\n         the amount owed (sometimes called 'contra' accounts, accounts payable,\n         customer deposits or credit accounts);\n\n         (h) Accounts for demonstration or promotional equipment, or in which\n         goods are consigned, sales guaranteed, sale or return, sale on\n         approval, bill and hold, or other terms if account debtor's payment may\n         be conditional;\n\n         (i) Accounts for which the account debtor is Borrower's Affiliate,\n         officer, employee, or agent;\n\n         (j) Accounts in which the account debtor disputes liability or makes\n         any claim and Bank believes there may be a basis for dispute (but only\n         up to the disputed or claimed amount), or if the Account Debtor is\n         subject to an Insolvency Proceeding, or becomes insolvent, or goes out\n         of business;\n\n         (k) Accounts for which Bank reasonably determines collection to be\n         doubtful.\n\n         'EQUIPMENT' is all present and future machinery, equipment, tenant\nimprovements, furniture, fixtures, vehicles, tools, parts and attachments in\nwhich Borrower has any interest.\n\n         'EQUIPMENT ADVANCE' is defined in Section 2.1.4.\n\n         'EQUIPMENT AVAILABILITY END DATE' is defined in Section 2.1.4.\n\n         'EQUIPMENT MATURITY DATE' is defined in Section 2.1.4.\n\n         'ERISA' is the Employment Retirement Income Security Act of 1974, and\nits regulations.\n\n         'EXCHANGE CONTRACT' is defined in Section 2.1.3.\n\n         'EXIM LOAN DOCUMENTS' means the Amended and Restated Export-Import Bank\nLoan and Security Agreement of even date and other related the related\ndocuments, including the Borrower Agreement, between Borrower and Bank.\n\n         'GAAP' is generally accepted accounting principles.\n\n         'INDEBTEDNESS' is (a) indebtedness for borrowed money or the deferred\nprice of property or services, such as reimbursement and other obligations for\nsurety bonds and letters of credit, (b) obligations evidenced by notes, bonds,\ndebentures or similar instruments, (c) capital lease obligations and (d)\nContingent Obligations.\n\n         'INSOLVENCY PROCEEDING' are proceedings by or against any Person under\nthe United States Bankruptcy Code, or any other bankruptcy or insolvency law,\nincluding assignments for the benefit of creditors, compositions, extensions\ngenerally with its creditors, or proceedings seeking reorganization,\narrangement, or other relief.\n\n         'INVENTORY' is present and future inventory in which Borrower has any\ninterest, including merchandise, raw materials, parts, supplies, packing and\nshipping materials, work in process and finished products intended for sale or\nlease or to be furnished under a contract of service, of every kind and\ndescription now or later owned by or in the custody or possession, actual or\nconstructive, of Borrower, including inventory temporarily out of its custody or\npossession or in transit and including returns on any accounts or other proceeds\n(including insurance proceeds) from the sale or disposition of any of the\nforegoing and any documents of title.\n\n         'INVESTMENT' is any beneficial ownership of (including stock,\npartnership interest or other securities) any Person, or any loan, advance or\ncapital contribution to any Person.\n\n\n                                      17\n\n\n         'LETTER OF CREDIT' is defined in Section 2.1.2.\n\n         'LIEN' is a mortgage, lien, deed of trust, charge, pledge, security\ninterest or other encumbrance.\n\n         'LOAN DOCUMENTS' are, collectively, this Agreement, any note, or notes\nor guaranties executed by Borrower or Guarantor, and any other present or future\nagreement between Borrower and\/or for the benefit of Bank in connection with\nthis Agreement, all as amended, extended or restated.\n\n         'MATERIAL ADVERSE CHANGE' is defined in Section 8.3.\n\n         'OBLIGATIONS' are debts, principal, interest, Bank Expenses and other\namounts Borrower owes Bank now or later, including Exim Loan Documents, Letters\nof Credit and Exchange Contracts and including interest accruing after\nInsolvency Proceedings begin and debts, liabilities, or obligations of Borrower\nassigned to Bank.\n\n         'ORIGINAL AGREEMENT' has the meaning set forth in recital paragraph A.\n\n         'PERMITTED INDEBTEDNESS' is:\n\n         (a) Borrower's indebtedness to Bank under this Agreement or any other\n         Loan Document;\n\n         (b) Indebtedness existing on the Closing Date and shown on the\n         Schedule;\n\n         (c)  Subordinated Debt;\n\n         (d) Indebtedness to trade creditors incurred in the ordinary course of\n         business; and\n\n         (e) Indebtedness secured by Permitted Liens.\n\n         'PERMITTED INVESTMENTS' are:\n\n         (a) Investments shown on the Schedule and existing on the Closing Date;\nand\n\n         (b) (i) marketable direct obligations issued or unconditionally\nguaranteed by the United States or its agency or any State maturing within 1\nyear from its acquisition, (ii) commercial paper maturing no more than 1 year\nafter its creation and having the highest rating from either Standard &amp; Poor's\nCorporation or Moody's Investors Service, Inc., and (iii) Bank's certificates of\ndeposit issued maturing no more than 1 year after issue.\n\n         'PERMITTED LIENS' are:\n\n         (a) Liens existing on the Closing Date and shown on the Schedule or\narising under this Agreement or other Loan Documents;\n\n         (b) Liens for taxes, fees, assessments or other government charges or\nlevies, either not delinquent or being contested in good faith and for which\nBorrower maintains adequate reserves on its Books, IF they have no priority over\nany of Bank's security interests;\n\n         (c) Purchase money Liens (i) on Equipment acquired or held by Borrower\nor its Subsidiaries incurred for financing the acquisition of the Equipment, or\n(ii) existing on equipment when acquired, IF the Lien is confined to the\nproperty and improvements and the proceeds of the equipment;\n\n         (d) Leases or subleases and licenses or sublicenses granted in the\nordinary course of Borrower's business and any interest or title of a lessor,\nlicensor or under any lease or license, IF the leases, subleases, licenses and\nsublicenses permit granting Bank a security interest;\n\n\n                                      18\n\n\n         (e) Liens incurred in the extension, renewal or refinancing of the\nindebtedness secured by Liens described in (a) through (c), BUT any extension,\nrenewal or replacement Lien must be limited to the property encumbered by the\nexisting Lien and the principal amount of the indebtedness may not increase.\n\n         'PERSON' is any individual, sole proprietorship, partnership, limited\nliability company, joint venture, company association, trust, unincorporated\norganization, association, corporation, institution, public benefit corporation,\nfirm, joint stock company, estate, entity or government agency.\n\n         'PREPAYMENT FEE' is a fee on any portion of the Obligations with a\nfixed interest rate (the 'Fixed Obligations') paid before the payment due date.\n'Base Interest Rate' means Bank's initial cost of funding the Fixed Obligations.\nThe Prepayment Fee is calculated as follows: First, Bank determines a 'Current\nMarket Rate' based on what the Bank would receive if it loaned the amount on the\nprepayment date in a wholesale funding market matching maturity, principal\namount and principal and interest payment dates (the aggregate payments received\nare the 'Current Market Rate Amount'). Bank may select any wholesale funding\nmarket rate as the Current Market Rate. Second, Bank will take the prepayment\namount and calculate the present value of each principal and interest payment\nwhich, without prepayment, the Bank would have received during the term of the\nFixed Obligations using the Base Interest Rate. The sum of the present value\ncalculations is the 'Mark to Market Amount.' Third, the Bank will subtract the\nMark to Market Amount from the Current Market Rate Amount. Any amount greater\nthan zero is the Prepayment Fee.\n\n         'PRIME RATE' is Bank's most recently announced 'prime rate,' even if it\nis not Bank's lowest rate.\n\n         'QUICK ASSETS' is, on any date, the Borrower's consolidated,\nunrestricted cash, cash equivalents, net billed accounts receivable and\ninvestments with maturities of fewer than 12 months determined according to\nGAAP.\n\n         'RESPONSIBLE OFFICER' is each of the Chief Executive Officer, the\nPresident, the Chief Financial Officer and the Controller of Borrower.\n\n         'REVOLVING MATURITY DATE' is April 20, 2000.\n\n         'SCHEDULE' is any attached schedule of exceptions.\n\n         'SUBORDINATED DEBT' is debt incurred by Borrower subordinated to\nBorrower's debt to Bank (and identified as subordinated by Borrower and Bank).\n\n         'SUBSIDIARY' is for any Person, or any other business entity of which\nmore than 50% of the voting stock or other equity interests is owned or\ncontrolled, directly or indirectly, by the Person or one or more Affiliates of\nthe Person.\n\n         'TANGIBLE NET WORTH' is, on any date, the consolidated total assets of\nBorrower and its Subsidiaries MINUS, (i) any amounts attributable to (a)\ngoodwill, (b) intangible items such as unamortized debt discount and expense,\nPatents, trade and service marks and names, Copyrights and research and\ndevelopment expenses except prepaid expenses, and (c) reserves not already\ndeducted from assets, and (ii) Total Liabilities.\n\n         'TERM LOAN #1' is a loan of $563,128.12\n\n         'TERM LOAN #2' is a loan of $571,092.15\n\n         'TERM LOAN #1 MATURITY DATE' is June 29, 2003.\n\n         'TERM LOAN #2 MATURITY DATE' is November 29, 2001.\n\n\n                                      19\n\n\n         'TOTAL LIABILITIES' is on any day, obligations that should, under GAAP,\nbe classified as liabilities on Borrower's consolidated balance sheet, including\nall Indebtedness, and current portion Subordinated Debt allowed to be paid, but\nexcluding all other Subordinated Debt.\n\n         'TREASURY RATE'. Treasury Rate is the Treasury Yield Percentage based\non the average weekly yield (of the week ending figures) in the most recent\nFederal Reserve Statistical Release on actively traded U.S. Treasury obligations\nof similar maturity to the principal being repaid or if a Statistical Release is\nnot published, the arithmetic average (to the nearest .01%) of the per annum\nyields to maturity for each Business Day during the week (ending at least two\nBusiness Days before the determination is made) of all actively traded\nmarketable United States Treasury fixed interest rate securities with a constant\nmaturity of, or not more than 30 days longer or shorter than the average life of\nthe principal and interest payments that are being prepaid (excluding securities\nthat can be surrendered at face value to pay Federal estate tax, or which\nprovide for tax benefits to the holder).\n\n\nBORROWER:\n\nInvision Technologies, Inc.\n\nBy: \/s\/ Tim Black\n   ---------------------------------------------------------------\nTitle: Chief Operating Officer\n      ------------------------------------------------------------\n\n\nBANK:\n\nSILICON VALLEY BANK\n\nBy: \/s\/ Pamela S. Doyle\n   ---------------------------------------------------------------\nTitle: Senior Vice President, Corporate Services Division\n      ------------------------------------------------------------\n\n\n\n                                      20\n\n\n                                    EXHIBIT A\n\n\n         The Collateral consists of all of Borrower's right, title and interest\nin and to the following:\n\n         All goods and equipment now owned or hereafter acquired, including,\nwithout limitation, all machinery, fixtures, vehicles (including motor vehicles\nand trailers), and any interest in any of the foregoing, and all attachments,\naccessories, accessions, replacements, substitutions, additions, and\nimprovements to any of the foregoing, wherever located;\n\n         All inventory, now owned or hereafter acquired, including, without \nlimitation, all merchandise, raw materials, parts, supplies, packing and \nshipping materials, work in process and finished products including such \ninventory as is temporarily out of Borrower's custody or possession or in \ntransit and including any returns upon any accounts or other proceeds, \nincluding insurance proceeds, resulting from the sale or disposition of any \nof the foregoing and any documents of title representing any of the above;\n\n         All contract rights and general intangibles now owned or hereafter \nacquired, including, without limitation, goodwill, servicemarks, leases, \nlicense agreements, franchise agreements, blueprints, drawings, purchase \norders, customer lists, route lists, infringements, claims, computer \nprograms, computer discs, computer tapes, literature, reports, catalogs, \ndesign rights, income tax refunds, payments of insurance and rights to \npayment of any kind;\n\n         All now existing and hereafter arising accounts, contract rights, \nroyalties, license rights and all other forms of obligations owing to \nBorrower arising out of the sale or lease of goods, the licensing of \ntechnology or the rendering of services by Borrower, whether or not earned by \nperformance, and any and all credit insurance, guaranties, and other security \ntherefor, as well as all merchandise returned to or reclaimed by Borrower;\n\n         All documents, cash, deposit accounts, securities, securities\nentitlements, securities accounts, investment property, financial assets,\nletters of credit, certificates of deposit, instruments and chattel paper now\nowned or hereafter acquired and Borrower's Books relating to the foregoing;\n\n         All Borrower's Books relating to the foregoing and any and all claims,\nrights and interests in any of the above and all substitutions for, additions\nand accessions to and proceeds thereof.\n\n         The Collateral shall specifically exclude: copyrights, trademarks, \npatents, and mask works including amendments, renewals, extensions, and all \nlicenses or other rights to use and all license fees and royalties from the \nuse; Any trade secrets and any intellectual property rights in computer \nsoftware and computer software products now or later existing, created, \nacquired or held; All design rights which may be available to Borrower now \nor later created, acquired or held; Any claims for damages (past, present or \nfuture) for infringement of any of the rights above, with the right, but not \nthe obligation, to sue and collect damages for use or infringement of the \nintellectual property rights above; all proceeds and products of the \nforegoing, including all insurance, indemnity or warranty payments.\n\n\n\n                                    EXHIBIT B\n\n                   LOAN PAYMENT\/ADVANCE TELEPHONE REQUEST FORM\n\n              DEADLINE FOR SAME DAY PROCESSING IS 3:00 P.M., P.S.T.\n\n\nTO: CENTRAL CLIENT SERVICE DIVISION               DATE:\n                                                       -----------------------\nFAX#:  (408) 496-2426                             TIME:\n                                                       -----------------------\n\nFROM:  Invision Technologies, Inc.\n       -----------------------------------------------------------------------\n                             CLIENT NAME (BORROWER)\n\nREQUESTED BY:\n               ---------------------------------------------------------------\n                            AUTHORIZED SIGNER'S NAME\n\nAUTHORIZED SIGNATURE:\n                       -------------------------------------------------------\n\nPHONE NUMBER:\n               ---------------------------------------------------------------\n\n<font size=\"2\">FROM ACCOUNT #                    TO ACCOUNT #\n                ----------------                ------------------------------\n\nREQUESTED TRANSACTION TYPE                  REQUESTED DOLLAR AMOUNT\n--------------------------                  -----------------------\n\nPRINCIPAL INCREASE (ADVANCE)                $\n                                             ---------------------------------\nPRINCIPAL PAYMENT (ONLY)                    $\n                                             ---------------------------------\nINTEREST PAYMENT (ONLY)                     $\n                                             ---------------------------------\nPRINCIPAL AND INTEREST (PAYMENT)            $\n                                             ---------------------------------\n\nOTHER INSTRUCTIONS:\n                     ---------------------------------------------------------\n\n------------------------------------------------------------------------------\n\n<\/font>All Borrower's representations and warranties in the Amended and Restated Loan\nand Security Agreement are true, correct and complete in all material respects\non the date of the telephone request for and Advance confirmed by this Borrowing\nCertificate; but those representations and warranties expressly referring to\nanother date shall be true, correct and complete in all material respects as of\nthat date.\n\n                                  BANK USE ONLY\n\nTELEPHONE REQUEST:\n\nThe following person is authorized to request the loan payment transfer\/loan\nadvance on the advance designated account and is known to me.\n\n\n-------------------------------------              ---------------------------\n            Authorized Requester                            Phone #\n\n\n-------------------------------------              ---------------------------\n            Received By (Bank)                              Phone #\n\n\n                      -------------------------------------\n                           Authorized Signature (Bank)\n\n\n\n                                    EXHIBIT C\n                             COMPLIANCE CERTIFICATE\n\n\nTO:        SILICON VALLEY BANK\n           3003 Tasman Drive\n           Santa Clara, CA 95054\n\nFROM:      INVISION TECHNOLOGIES, INC.\n\n\n         The undersigned authorized officer of Invision Technologies, Inc.\n('Borrower') certifies that under the terms and conditions of the Amended and\nRestated Loan and Security Agreement between Borrower and Bank (the\n'Agreement'), (i) Borrower is in complete compliance for the period ending\n_______________ with all required covenants except as noted below and (ii) all\nrepresentations and warranties in the Agreement are true and correct in all\nmaterial respects on this date. Attached are the required documents supporting\nthe certification. The Officer certifies that these are prepared in accordance\nwith Generally Accepted Accounting Principles (GAAP) consistently applied from\none period to the next except as explained in an accompanying letter or\nfootnotes. The Officer acknowledges that no borrowings may be requested at any\ntime or date of determination that Borrower is not in compliance with any of the\nterms of the Agreement, and that compliance is determined not just at the date\nthis certificate is delivered.\n\n              PLEASE INDICATE COMPLIANCE STATUS BY CIRCLING YES\/NO\n                            UNDER 'COMPLIES' COLUMN.\n\n\n\n         REPORTING COVENANT                           REQUIRED                                   COMPLIES\n                                                                                                 \n         Monthly financial statements + CC            Monthly within 20 days                     Yes      No\n         Annual (Audited)                             FYE within 120 days                        Yes      No\n         10-Q, 10-K and 8-K                           Within 5 days after filing with SEC        Yes      No\n\n\n\n         FINANCIAL COVENANT                           REQUIRED             ACTUAL                 COMPLIES\n                                                                                                  \n         Maintain on a Quarterly Basis*:\n           Minimum Quick Ratio (Adjusted)             1.25:1.00            _____:1.00            Yes      No\n           Maximum Debt\/Tangible Net Worth            1.00:1.00            _____:1.00            Yes      No\n\n         Profitability:                               Quarterly &amp; Annually             $_________            Yes      No\n\n\n*if no outstanding Credit Extensions including issued letters of credit,\notherwise on a monthly basis.\n\n\nCOMMENTS REGARDING EXCEPTIONS:  See Attached.\n\n\nSincerely,\n\n\n\nInvision Technologies, Inc.\n\n---------------------------------------\nSIGNATURE\n\n---------------------------------------\nTITLE\n\n---------------------------------------\nDATE\n\n\n\n\n\n                    BANK USE ONLY\n\nReceived by:                                        \n             ---------------------------------------\n                       AUTHORIZED SIGNER\nDate:                                               \n      ----------------------------------------------\n\nVerified:                                           \n          ------------------------------------------\n                       AUTHORIZED SIGNER\n\nDate:                                               \n      ----------------------------------------------\n\nCompliance Status:                        Yes     No\n\n\n\n\n\nSchedule of permitted investments:\n\n\nImatron Federal Systems, Inc.\n\nInVision Foreign Sales, Inc.\n\nInVision International, Inc.\n\nQuantum Magnetics, Inc.\n\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7912,8832],"corporate_contracts_industries":[9415,9454],"corporate_contracts_types":[9560,9567],"class_list":["post-41137","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-invision-technologies-inc","corporate_contracts_companies-silicon-valley-bancshares","corporate_contracts_industries-financial__banks","corporate_contracts_industries-manufacturing__industrial","corporate_contracts_types-finance","corporate_contracts_types-finance__loan"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/41137","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=41137"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=41137"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=41137"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=41137"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}