Exhibit 10.18

LOAN AND SECURITY AGREEMENT

by and between

OMNIVISION TECHNOLOGIES, INC.

a Delaware corporation

and

CITIBANK, N.A., a national banking association

Dated as of March 16, 2007

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Loan and Security Agreement

Borrower:

OmniVision Technologies, Inc.,

 

 

a Delaware corporation

 

 

 

 

 

 

 

Address:

1341 Orleans Drive

 

 

Sunnyvale, California 94089

 

 

Attention: General Counsel

 

Date:                    March 16, 2007

THIS LOAN AND SECURITY AGREEMENT (“Agreement”) is entered into as of the above
date between Citibank N.A., a national banking association (“Lender”), with
offices at 201 West Lexington Drive, 6th Floor, Glendale, California 91203, and
the borrower named above (“Borrower”), whose chief executive office is located
at the above address (“Borrower’s Address”).

1.                         DEFINITIONS AND INTERPRETATIONS

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

“Additional Costs” has the meaning set forth in Section 3.3(a).

“Borrower” has the meaning set forth in the introduction to this Agreement.

“Borrower’s Address” has the meaning set forth in the introduction to this
Agreement.

“Business Day” means (i) a day on which Lender is open for business in the State
of California, and (ii) a day on which banks are open for dealings in dollar
deposits in the London interbank market.

“Change of Control” shall be deemed to have occurred at such time as a “person”
or “group” (within the meaning of Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934) (other than the current holders of the ownership interests
in any Borrower) becomes the “beneficial owner” (as defined in Rule 13d-3 under
the Securities Exchange Act of 1934), directly or indirectly, as a result of any
single transaction, of more than fifty percent (50%) of the total voting power
of all classes of stock or other ownership interests then outstanding of any
Borrower normally entitled to vote in the election of directors or analogous
governing body.

“Conversion Date” means September 30, 2008 or such earlier date as elected by
Borrower in writing on at least five (5) Business Days’ notice to Lender.

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

“Dollars or $” means United States dollars.

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“EBITDA” means, in any fiscal period, Borrower’s consolidated net income or net
loss as determined by Lender, plus (i) the amount of all interest expense,
income tax expense, depreciation expense and amortization expense of Borrower
for such period, [on a consolidated basis], and plus or minus (as the case may
be) (ii) any other non-cash charges which have been added or subtracted
(including non-cash stock options), as the case may be, in calculating
Borrower’s consolidated net income for such period.

“Event of Default” means any of the events set forth in Section 9.1.

“GAAP” means generally accepted accounting principles as in effect from time to
time in the United States, consistently applied.

“Indebtedness” of any Person shall mean, without duplication, (a) all items
which, in accordance with GAAP, would be included in determining total
liabilities as shown on the liability side of the balance sheet of such Person
as of the date as of which Indebtedness is to be determined, including any lease
which, in accordance with GAAP would constitute Indebtedness, (b) all
indebtedness secured by any mortgage, pledge, security, Lien or conditional sale
or other title retention agreement to which any property or asset owned or held
by such Person is subject, whether or not the indebtedness secured thereby shall
have been assumed, (c) all indebtedness of others which such Person has directly
or indirectly guaranteed, endorsed (otherwise than for collection or deposit in
the ordinary course of business), discounted or sold with recourse or agreed
(contingently or otherwise) to purchase or repurchase or otherwise acquire, or
in respect of which such Person has agreed to supply or advance funds (whether
by way of loan, stock, equity or other ownership interest purchase, capital
contribution or otherwise) or otherwise to become directly or indirectly liable.

“Interest Expense” shall mean, for any period, total interest expense (including
attributable to capital leases in accordance with GAAP) fees with respect to all
outstanding indebtedness including capitalized interest but excluding
commissions, discounts and other fees owed with respect to letters of credit and
bankers’ acceptance financing and net costs under Interest Rate Agreements.

“Interest Period” means for (a) for the first Interest Period hereunder, from
the date of initial funding of either of the Loans through and including March
31, 2007, and (b) for each Interest Period thereafter commencing April 1, 2007,
one calendar month (i.e., periods ending on the last day of each calendar year).

“Interest Rate Agreement” means any interest rate swap, cap or collar agreement
or other similar agreement or arrangement designed to hedge the position with
respect to interest rates.

“Interest Rate Swap Agreement (Long Form Trade Confirmation)” means an Interest
Rate Agreement (Long Form Trade Confirmation) with Lender or another party
designated by Borrower that will swap the interest rate hereunder for a fixed
interest rate, which agreement must be in form and substance acceptable to
Lender.

“Lender” has the meaning set forth in the introduction to this Agreement.

“LIBOR Base Rate (Term Loan)” means the rate per annum for United States dollar
deposits quoted by Lender in accordance with its customary procedures and
utilizing such electronic or other quotation sources as it considers appropriate
in its sole discretion as the London interbank offered rate for a period of
thirty (30), sixty (60) or ninety (90) days with the understanding that such
rate is quoted by Lender for the purpose of calculating effective rates of
interest for the loans making reference thereto. Borrower may designate in
writing the election of whether the period shall be thirty (30), sixty (60) or
ninety (90) days, but such period may only change on the first day of each month
(and Borrower must have provided at least five Business Days advance written
request for any change); provided, however, that such period shall be thirty
(30) days from and after the Conversion Date. The LIBOR Base Rate (Term Loan)
shall be adjusted on the first day of each Interest Period based on the LIBOR
Base Rate (Term Loan) on the applicable LIBOR Determination Date.

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“LIBOR Base Rate (Mortgage Loan)” means the rate per annum for United States
dollar deposits quoted by Lender in accordance with its customary procedures and
utilizing such electronic or other quotation sources as it considers appropriate
in its sole discretion as the London interbank offered rate for a period of
thirty (30) days, with the understanding that such rate is quoted by Lender for
the purpose of calculating effective rates of interest for the loans making
reference thereto. The LIBOR Base Rate (Mortgage Loan) shall be adjusted on the
first day of each Interest Period based on the LIBOR Base Rate (Mortgage Loan)
on the applicable LIBOR Determination Date.

“LIBOR Determination Date” means, with respect to each Interest Period, the date
that is two (2) Business Days prior to the first day upon which such Interest
Period commences; provided, however, that in connection with a securitization of
the Loan, Lender may, upon prior written notice to Borrower, change the LIBOR
Determination Date to a date selected by Lender in its sole discretion
(whereupon such newly selected LIBOR Determination Date shall thereafter be
effective) and, if requested by Lender, Borrower shall promptly execute an
amendment to this Loan Agreement to evidence such change.

“LIBOR Rate (Term Loan)” means, for each Interest Period, the rate per annum
(rounded upwards, if necessary, to the next 1/16%) determined by Lender as the
sum of (a) the quotient of (i) the LIBOR Base Rate (Term Loan) for such Interest
Period, divided by (ii) 100% minus the Reserve Percentage, plus (b) one and
one-quarter percent (1.25%). The LIBOR Rate shall be adjusted on and as of the
effective day of any change in the Reserve Percentage.

“LIBOR Rate (Mortgage Loan)” means, for each Interest Period, the rate per annum
(rounded upwards, if necessary, to the next 1/16%) determined by Lender as the
sum of (a) the quotient of (i) the LIBOR Base Rate (Mortgage Loan) for such
Interest Period, divided by (ii) 100% minus the Reserve Percentage, plus (b)
nine-tenths percent (0.90%). The LIBOR Rate (Mortgage Loan) shall be adjusted on
and as of the effective day of any change in the Reserve Percentage.

“Loan Account” has the meaning provided to such term in Section 2.2 hereof.

“Loan Borrowing Certificate” means an irrevocable request from Borrower to
Lender, in the form set forth on Exhibit “A” attached hereto, duly executed by
Borrower, specifying the date an advance under the Term Loan is to be made
(which shall be a Business Day.

“Loan Documents” means this Agreement, the agreements and documents listed in
Section 6.1, and any other agreement, instrument or document executed in
connection herewith or therewith.

“Material Adverse Effect” means a material adverse effect on (i) the business,
assets, condition (financial or otherwise) or results of operations of Borrower
of any of the obligations secured by the Deed of Trust (as defined below), (ii)
the ability of Borrower to perform its obligations under this Agreement
(including, without limitation, repayment of the Loans and all amounts secured
by the Deed of Trust as they come due), or (iii) the validity or enforceability
of this Agreement or any other agreement or document entered into by any party
in connection herewith, or the rights or remedies of Lender hereunder or
thereunder.

“Maturity Date (Term Loan)” means September 30, 2012 or such earlier date as the
Term Loan is accelerated by Lender.

“Maturity Date (Mortgage Loan)” means March 31, 2017 or such earlier date as the
Mortgage Loan is accelerated by Lender.

“Net Income” means the net income (or loss) determined in conformity with GAAP,
provided that there shall be excluded (i) the income (or loss) of any Person in
which any other Person (other than Borrower) has a joint interest, except to the
extent of the amount of dividends or other distributions actually paid to a
Borrower by such Person, (ii) the income (or loss) of any Person accrued prior
to the date it becomes a Borrower or is merged into or consolidated with a
Borrower or that Person’s assets are acquired by a Borrower, (iii) the income of
any subsidiary of Borrower to the extent that the declaration or payment of

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dividends or similar distributions of that income by that subsidiary is not at
the time permitted by operation of the terms of the charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that subsidiary, (iv) compensation expense resulting from the
issuance of capital stock, stock options or stock appreciation rights issued to
former or current employees, including officers, of a Borrower, or the exercise
of such options or rights, in each case to the extent the obligation (if any)
associated therewith is not expected to be settled by the payment of cash by a
Borrower or any affiliate thereof, and (v) compensation expense resulting from
the repurchase of capital stock, options and rights described in clause (iv) of
this definition of Net Income.

“Obligations” means all present and future advances, debts, liabilities,
obligations, guaranties, covenants, duties and indebtedness at any time owing by
Borrower to Lender, whether evidenced by this Agreement or any note or other
instrument or document, whether arising from an extension of credit, opening of
a letter of credit, banker’s acceptance, loan, guaranty, indemnification or
otherwise, whether direct or indirect (including, without limitation, those
acquired by assignment and any participation by Lender in Borrower’s debts owing
to others), absolute or contingent, due or to become due, including, without
limitation, all interest, charges, expenses, fees, attorneys’ fees (including
attorneys’ fees and expenses incurred in bankruptcy), expert witness fees and
expenses, fees and expenses of consultants, audit fees, letter of credit fees,
collateral monitoring fees, closing fees, facility fees, termination fees, and
any other sums chargeable to Borrower under this Agreement or under any other
present or future instrument or agreement between Borrower and Lender, including
under any Interest Rate Agreement.

“Permitted Liens” means the following:

(a)                       purchase money security interests in specific items of
equipment that are not fixtures to the Property;

(b)                      leases of specific items of equipment that are not
fixtures to the Property;

(c)                       liens for taxes not yet payable;

(d)                      security interests being terminated substantially
concurrently with this Agreement;

(e)                       liens of materialmen, mechanics, warehousemen,
carriers, or other similar liens arising in the ordinary course of business and
securing obligations which are not delinquent;

(f)                         liens incurred in connection with the extension,
renewal or refinancing of the indebtedness secured by liens of the type
described above in clauses (a) or (b) above, provided that any extension,
renewal or replacement lien is limited to the property encumbered by the
existing lien and the principal amount of the indebtedness being extended,
renewed or refinanced does not increase; or

(g)                      liens in favor of customs and revenue authorities which
secure payment of customs duties in connection with the importation of goods.

“Person” means any individual, sole proprietorship, general partnership, limited
partnership, limited liability partnership, limited liability company, joint
venture, trust, unincorporated organization, association, corporation,
government, or any agency or political division thereof, or any other entity.

“Property” shall have the meaning provided in the Deed of Trust.

“Regulatory Change” means, with respect to Lender, any change on or after the
date of this Agreement in United States federal, state or foreign laws or
regulations, including Regulation D, or the adoption or making on or after such
date of any interpretations, directives or requests applying to a class of
lenders including Lender of or under any United States federal or state, or any
foreign, laws or regulations (whether or not having the force of law) by any
court or governmental or monetary authority charged with the interpretation or
administration thereof.

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“Reserve Percentage” means, on any day, the maximum percentage prescribed by the
Board of Governors of the Federal Reserve System (or any successor governmental
authority) for determining the reserve requirements (including any basic,
supplemental, marginal, or emergency reserves) that are in effect on such date
with respect to eurocurrency funding (currently referred to as “eurocurrency
liabilities”) of Lender, but so long as Lender is not required or directed under
applicable regulations to maintain such reserves, the Reserve Percentage shall
be zero.

“Solvent” means, with respect to any Person on a particular date, that on such
date (a) at fair valuations, all of the properties and assets of such Person are
greater than the sum of the debts, including contingent liabilities, of such
Person, (b) the present fair salable value of the properties and assets of such
Person is not less than the amount that will be required to pay the probable
liability of such Person on its debts as they become absolute and matured, (c)
such Person is able to realize upon its properties and assets and pay its debts
and other liabilities, contingent obligations and other commitments as they
mature in the normal course of business.

“Subordinated Debt” shall mean any Indebtedness and liabilities of Borrower
which have been subordinated by written agreement to Indebtedness owed by
Borrower to Lender in a form and substance acceptable to Lender.

“Tangible Net Worth” means, as of the date of determination, all of Borrower’s
assets, plus Subordinated Debt (excluding all assets of a Person that would be
treated as intangible assets on such Person’s balance sheet prepared in
accordance with GAAP, i.e., goodwill, patents, trademarks, trade names,
copyrights, franchises, formulas, leasehold interests, leasehold improvements,
non-compete agreements, engineering plans, deferred tax benefits, organization
costs, prepaid items and monies due Affiliates, employees and officers), less
Total Debt.

“Total Debt” shall mean the total of all items of Indebtedness, obligations or
liability as shown on a consolidated balance sheet of Borrower as of the date as
of which Total Debt is to be determined, excluding, however, Subordinated Debt.

1.2                       Accounting Terms and Determinations Unless otherwise
specified herein, all accounting terms used in this Agreement, unless otherwise
indicated, shall have the meanings given to such terms in accordance with GAAP.
In addition, unless otherwise specified herein all accounting terms used herein
shall be interpreted, all accounting determinations hereunder shall be made, and
all financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP.

1.3                       Construction. Unless the context of this Agreement
clearly requires otherwise, references to the plural include the singular and
references to the singular include the plural; references to any gender include
any other gender; the part includes the whole; the term “including” is not
limiting, and the term “or” has, except where otherwise indicated, the inclusive
meaning represented by the phrase “and/or”. The words, “hereof,” “herein,”
“hereby,” “hereunder,” and similar terms in this Agreement refer to this
Agreement as a whole and not to any particular provision of this Agreement.
Article, section, subsection, clause, exhibit and schedule references are to
this Agreement, unless otherwise specified. Any reference in this Agreement or
any of the Loan Documents to this Agreement or any of the Loan Documents
includes any and all permitted alterations, amendments, changes, extensions,
modifications, renewals, or supplements thereto or thereof, as applicable.

1.4                       Exhibits and Schedules. All of the exhibits and
schedules attached hereto shall be deemed incorporated herein by reference.

1.5                       No Presumption Against Any Party. Neither this
Agreement, any of the Loan Documents, any other documents, agreement, or
instrument entered into in connection herewith, nor any uncertainty or ambiguity
herein or therein shall be construed or resolved using any presumption against
any party hereto, whether under any rule of construction or otherwise. On the
contrary, this Agreement, the Loan Documents, and the other documents,
instruments, and agreements entered into in connection herewith have been
reviewed by each of the parties and their counsel and shall be construed and
interpreted according to

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the ordinary meanings of the words used so as to accomplish fairly the purposes
and intentions of all parties hereto.

1.6                       Independence of Provisions. All agreements and
covenants hereunder, under the Loan Documents and the other documents,
instruments, and agreements entered into in connection herewith shall be given
independent effect such that if a particular action or condition is prohibited
by the terms of any such agreement or covenant, the fact that such action or
condition would be permitted within the limitations of another agreement or
covenant shall not be construed as allowing such action to be taken or condition
to exist.

2.                                      CREDIT FACILITIES

2.1                       Loans.

(a)                                  Mortgage Loan. Lender will make a loan to
Borrower (the “Mortgage Loan”) in an amount not to exceed Twenty-Seven Million
Nine Hundred Twenty-Seven Thousand Forty-Five and No/100 Dollars
($27,927,045.00) on the terms and conditions contained herein. The Mortgage Loan
shall be made in one advance. Borrower may not reborrow any amounts advanced
under the Mortgage Loan.

(b)                                 Term Loan. Provided no Default or Event of
Default has occurred and is continuing, Lender will make additional advances to
Borrower (collectively, the “Term Loan”; the Term Loan together with the
Mortgage Loan may be referred to herein, collectively, as the “Loans”) from time
to time from the date hereof to and including the Conversion Date in minimum
advances of One Million Dollars ($1,000,000) for the first advance and Two
Hundred Fifty Thousand Dollars ($250,000) for subsequent advances in a total
aggregate amount not to exceed Twelve Million Dollars ($12,000,000). Borrower
may not reborrow any amounts advanced under the Term Loan.

2.2                       Loan Account. Lender shall maintain on its books a
record of account (“Loan Account”) in which Lender shall make entries for each
of the Loans and such other debits and credits as shall be appropriate in
connection with the credit facility set forth in this Agreement. Each of the
Loans made by Lender shall be deposited in Borrower’s account number DDA
#600956767 at Lender, or such other account with Lender as designated in writing
by Borrower.

3.                                      TERMS OF PAYMENT

3.1                       Interest.

(a)                                  Mortgage Loan. The outstanding principal
balance of the Mortgage Loan shall accrue interest at the LIBOR Rate (Mortgage
Loan).

(b)                                 Term Loan. The outstanding principal balance
of the Term Loan shall accrue interest at the LIBOR Rate (Term Loan). Borrower
shall request additional advances from the Term Loan by delivering to Lender a
Loan Borrowing Certificate with respect thereto. The Loan Borrowing Certificate
shall be received by Lender no later than 11:00 a.m. (California time) at least
two (2) Business Days prior to the Business Day such advance shall occur. Any
Loan Borrowing Certificate received by Lender after 11:00 a.m. (California time)
shall not be considered by Lender until the next Business Day.

3.2                       Payments.

(a)                                  Mortgage Loan.

(i)                            Commencing with the date of the initial
disbursement of funds through the end of the calendar month in which such
disbursement occurs, interest only shall be payable in advance on the Mortgage
Loan at the LIBOR Rate (Mortgage Loan). Interest for such partial month shall be
computed on

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the basis of a 360-day year and shall be equal to the sum of a per diem interest
charge (for each day the principal balance hereof is outstanding during such
partial month) equal to the product of (a) 1/360 and (b) the Contract Rate and
(c) the outstanding principal balance hereunder for the day in question.

(ii)                               Commencing on May 1, 2007, and continuing on
the first day of each calendar month thereafter, Borrower shall make monthly
payments to Lender of principal and interest (in arrears) in an amount necessary
to fully amortize the Mortgage Loan over an amortization period ending on April
30, 2032.

(iii)                            The entire balance of principal and accrued
interest and other amounts then outstanding on the Mortgage Loan are due and
payable on the Maturity Date (Mortgage Loan). Borrower acknowledges that such
balance will not equal the monthly payments specified in Section 3.2(a)(i) and
Section 3.2(a)(ii).

(b)                            Term Loan.

(i)                                  Commencing on April 1, 2007, and continuing
on the first day of each calendar month thereafter, Borrower shall make monthly
payments to Lender of all accrued interest under the Term Loan.

(ii)                               Commencing on the Conversion Date if such
date is the first date of a calendar month and otherwise on the first date of
the next calendar month, and continuing on the first day of each calendar month
thereafter, in addition to interest payable under the Term Loan, the Term Loan
will be repayable in forty-eight (48) additional equal monthly installments of
principal, in an amount sufficient to cause the Term Loan to be repaid on the
Maturity Date (Term Loan).

(iii)                            Unless otherwise repaid, the entire balance of
principal and accrued interest and other amounts then outstanding on the Term
Loan are due and payable on the Maturity Date (Term Loan). Borrower acknowledges
that such balance may not equal the regular monthly payment specified in Section
3.2(b)(i) and Section 3.2(b)(ii).

(c)                                  Deduction of Amounts Payable. Borrower
agrees that interest and principal payments, and any fees, will be deducted
automatically on the due date from Borrower’s account with Lender, account
number DDA #600956767 or such other of the Borrower’s accounts with Lender as
designated in writing by the Borrower. Borrower will maintain sufficient funds
in the account on the dates the Lender enters debits authorized by the ACH (as
defined below).

3.3                       Additional Costs and Other Terms.

(a)                                  Borrower shall pay to Lender, upon demand
by Lender, from time to time such amounts as Lender may determine to be
necessary to compensate it for any costs incurred by Lender that Lender
determines are attributable to its making or maintaining of any amount
receivable by Lender hereunder in respect of the Mortgage Loan or Term Loan
relating thereto (such increases in costs and reductions in amounts receivable
being herein called “Additional Costs”), in each case resulting from any
Regulatory Change which:

(i)                                  changes the basis of taxation of any
amounts payable to Lender under this Agreement with respect of the Mortgage Loan
or Term Loan (other than changes which affect taxes measured by or imposed on
the overall net income of Lender by the jurisdiction in which Lender has its
principal office); or

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(ii)                               imposes or modifies any reserve, special
deposit or similar requirements relating to any extensions of credit or other
assets of, or any deposits with or other liabilities of Lender (including the
Mortgage Loan or Term Loan or any deposits referred to in the definition of
“LIBOR Base Rate (Mortgage Loan)” or “LIBOR Base Rate (Term Loan); or

(iii)                            imposes any other condition affecting the
Mortgage Loan or Term Loan.

Lender will notify Borrower of any event occurring after the date of this
Agreement which will entitle Lender to compensation pursuant to this Section as
promptly as practicable after it obtains knowledge thereof and determines to
request such compensation. Lender will furnish Borrower with a statement setting
forth the basis and amount of each request by Lender for compensation under this
Section 3.3. Determinations and allocations by Lender for purposes of this
Section 3.3 of the effect of any Regulatory Change on its costs of maintaining
its obligations to make the Mortgage Loan or Term Loan or of making or
maintaining the Mortgage Loan or Term Loan or on amounts receivable by it in
respect of the Mortgage Loan or Term Loan, and of the additional amounts
required to compensate Lender in respect of any Additional Costs, shall be
conclusive absent manifest error.

(b)                                 If Borrower requests additional advances, in
addition to all other amounts payable hereunder, Borrower shall pay to Lender,
upon the request of Lender, such amount or amounts as shall be sufficient (in
the sole good faith opinion of such Lender) to compensate it for any loss, costs
or expense incurred by it as a result of any failure by Borrower to borrow any
amounts on the date for such borrowing specified in the relevant notice of
borrowing hereunder; provided, however, that Lender acknowledges that there is
no unused line fee in connection with the Mortgage Loan or the Term Loan.

(c)                                  If Lender shall determine that the adoption
or implementation of any applicable law, rule, regulation or treaty regarding
capital adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by Lender in any respect, with any directive regarding capital adequacy (whether
or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on capital of Lender or any person or entity controlling Lender (a “Parent”) as
a consequence of its obligations hereunder to a level below that which Lender
(or its Parent) could have achieved but for such adoption, change or compliance
(taking into consideration its policies with respect to capital adequacy) by an
amount deemed by Lender to be material, then from time to time, within fifteen
(15) days after demand by Lender, Borrower shall pay to Lender such additional
amount or amounts as will compensate Lender for such reduction. A statement of
Lender claiming compensation under this Section and setting forth the additional
amount or amounts to be paid to it hereunder shall be conclusive, absent
manifest error.

(d)                                 If at any time Lender, in its sole and
absolute discretion, determines that either the LIBOR Rate (Mortgage Loan) or
LIBOR Rate (Term Loan) does not accurately reflect the cost to Lender of lending
the Loan, then Lender shall promptly give notice thereof to Borrower, and upon
the giving of such notice, Lender’s obligation to make additional advances the
Loans shall terminate, unless Lender and Borrower agree in writing to a
different interest rate applicable to Loans. If it shall become unlawful for
Lender to continue to fund or maintain any Loans, or to perform its obligations
hereunder, upon demand by Lender, Borrower shall prepay the Loans in full with
accrued interest thereon and all other amounts payable by Borrower hereunder
(including, without limitation, any amount payable in connection with such
prepayment pursuant to Section 4.3).

4.                                      PAYMENT OF OBLIGATIONS

4.1                       Maturity Date. On the Maturity Date, Borrower shall
pay and perform in full all outstanding Loans and Obligations, whether for
principal, interest, costs, fees or otherwise, and whether or not all or any
part of such Loans and Obligations are otherwise then due and payable. Such
payment of the outstanding Obligations shall be withdrawn from Borrower’s Loan
Account, or such other account with Lender as designated in writing by Borrower.

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4.2                       Default Rate of Interest. Upon the occurrence and
during the continuation of an Event of Default, the rate(s) of interest that
would otherwise be applicable at such time with respect to each of the Loans
shall be increased by five (5) percentage points (the “Past Due Rate”). In
addition, any amount not paid within ten (10) days when due hereunder shall
include a past due charge equal to the greater of (a) five percent (5%) of such
delinquent amount and (b) Fifty Dollars ($50) (but in no event more than the
maximum amount allowed by law) (the “Past Due Charge”). In addition, Borrower
shall pay a fee to Lender equal to Twenty Dollars ($20) if Borrower makes any
payment hereunder the check or pre-authorized charge with which Borrower pays is
later dishonored.

4.3                       Early Payment. If for any reason (including voluntary
or mandatory prepayment or acceleration), Lender receives all or part of the
principal amount of any of the Loans prior to the last day of the then
applicable Interest Period, Borrower shall, on demand by Lender, pay Lender the
amount (if any) by which (i) the additional interest which would have been
payable on the amount so received had it not been received until the last day of
such Interest Period exceeds (ii) the interest which would have been recoverable
by Lender by placing the amount so received on deposit in the certificate of
deposit markets or the offshore currency interbank markets or United States
Treasury investment products, as the case may be, for a period starting on the
date on which it was so received and ending on the last day of such Interest
Period at the interest rate determined by Lender in its reasonable discretion.
Lender’s determination as to such amount shall be conclusive absent manifest
error.

4.4                       Prepayment. So long as no Default or Event of Default
exists, Borrower shall have the privilege to prepay the principal of the
Mortgage Loan and/or the Term Loan (in whole only but not in part) upon and
subject to the following terms and conditions:

(a)                                  Concurrently with such prepayment, Borrower
shall pay all accrued and unpaid interest under the applicable Loan (whether or
not then due), all other amounts then due under this Loan Agreement, the
applicable Note and the Deed of Trust.

(b)                                 Any prepayment shall be made only after not
less than forty-five (45) days’ advance written notice to Lender, which notice
in each instance shall specify Borrower’s election to make such prepayment and
the amount of the same and the date of repayment; provided, however, that such
advance written notice period shall be not less than five (5) Business Days
(rather than not less than forty-five (45) days) for prepayments, if any,
required by Lender pursuant to Section 3.3(a)-(d) hereof or for prepayments if
made by Borrower within thirty (30) days of notice by Lender of the imposition
of any additional charges under such sections.

(c)                                  Included within payment shall be any
breakage fees, if any, in connection with any Interest Rate Agreement (but such
amounts shall only be payable if required under the Interest Rate Agreement and,
then, only on the terms and conditions provided therein).

5.                                      SECURITY INTEREST. The Loan and all
obligations hereunder shall be secured by that certain Deed of Trust, Assignment
of Rents and Leases, Security Agreement and Fixture Filing, dated as of the date
hereof (the “Deed of Trust”) and that certain Stock Pledge Agreement dated as of
even date herewith (the “Stock Pledge Agreement”).

6.                                      CONDITIONS PRECEDENT. The obligation of
Lender to make the Loans is subject to the satisfaction, in the sole discretion
of Lender, at or prior to the first advance of funds hereunder, of each, every
and all of the following conditions:

6.1                       Documents and Agreements. Borrower shall deliver to
Lender the following documents, in form and substance satisfactory to Lender in
its sole and absolute discretion: this Agreement; and

(a)                                  the Deed of Trust;

(b)                                 an Environmental Indemnity by Borrower in
favor of Lender;

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(c)                                  a Promissory Note by Borrower evidencing
the Mortgage Loan and the Term Loan made hereunder (each, a “Note”);

(d)                                 the Authorization Agreement for
Pre-Authorized Payments (Debits) (the “ACH”);

(e)                                  the Stock Pledge Agreement;

(f)                                    Interest Rate Swap Agreement (Long Form
Trade Confirmation);

(g)                                 Authorized Signatories and MIFT Agreement;
and

(h)                                 Alternative Dispute Resolution Agreement.

6.2                       Organizational Documents. Lender shall have received
copies of Borrower’s articles certificate of incorporation and all amendments
thereto, and a certificate of good standing, each certified by the Secretary of
State of the state of Borrower’s organization, and dated a recent date prior to
the date of the initial funding of the Loan. Lender shall have received evidence
as to the due authorization, execution and delivery of this Agreement and the
other documents contemplated hereby, and the transactions contemplated
hereunder.

6.3                       Certified Resolutions. Lender shall have received
copies of Borrower’s By-laws and all amendments thereto, and Lender shall have
received copies of the resolutions of the board of directors of Borrower,
authorizing the execution and delivery of this Agreement and the other documents
contemplated hereby, and authorizing the transactions contemplated hereunder and
thereunder, and authorizing specific officers of Borrower to execute the same on
behalf of Borrower, in each case certified by the Secretary or other acceptable
officer of Borrower as of the Closing Date.

6.4                       Due Diligence. Lender shall have completed its due
diligence with respect to Borrower and the Property.

6.5                       Other Documents and Agreements. Lender shall have
received such other agreements, instruments and documents as Lender may require
in connection with the transactions contemplated hereby, all in form and
substance satisfactory to Lender in Lender’s sole and absolute discretion
(including a title insurance policy in form, with such endorsements and such
exceptions as are acceptable to Lender).

6.6                       Opinion of Borrower’s Counsel. Lender shall have
received an opinion of Borrower’s counsel, in form and substance satisfactory to
Lender in its sole and absolute discretion.

6.7                       Default. No Default or Event of Default shall exist
hereunder.

6.8                       Commitment Fee. Borrower shall have paid to Lender a
nonrefundable commitment fee in the amount of forty-one hundreths percent (.40%)
of the maximum possible amount that may be advanced under the Mortgage Loan and
the Term Loan.

7.                                      REPRESENTATIONS, WARRANTIES AND
COVENANTS OF BORROWER. In order to induce Lender to enter into this Agreement
and to make the Loan, Borrower represents and warrants to Lender as follows, and
Borrower covenants that the following representations will continue to be true,
and that Borrower will at all times comply with all of the following covenants:

7.1                       State of Organization, Existence and Authority.
Borrower is and will continue to be, duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization which is
accurately set forth in the heading to this Agreement. Borrower is and will
continue to be qualified and licensed to do business in all jurisdictions in
which any failure to do so would have a Material Adverse Effect. The execution,
delivery and performance by Borrower of this Agreement, and all other documents
contemplated hereby (a) have been duly and validly authorized, (b) are
enforceable against Borrower in

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accordance with their terms (except as enforcement may be limited by equitable
principles and by bankruptcy, insolvency, reorganization, moratorium or similar
laws relating to creditors’ rights generally), and (c) do not violate Borrower’s
operating agreement, or any law or any material agreement or instrument which is
binding upon Borrower or the Property, and (d) do not constitute grounds for
acceleration of any material indebtedness or obligation under any material
agreement or instrument that is binding upon Borrower or the Property.

7.2                       Validity of Loan Documents. The execution, delivery
and performance by Borrower of the Loan Documents: (1) are duly authorized and
do not require the consent or approval of any other party or governmental
authority which has not been obtained; and (2) will not violate any law of the
United States, including federal state or local laws (and to Borrower’s
knowledge any foreign laws) or result in the imposition of any lien, charge or
encumbrance upon the assets of any such party, except as contemplated by the
Loan Documents. The Loan Documents constitute the legal, valid and binding
obligations of Borrower, enforceable in accordance with their respective terms,
subject to applicable bankruptcy, insolvency, or similar laws generally
affecting the enforcement of creditors’ rights.

7.3                       Name; Trade Names and Styles. The name of Borrower set
forth in the heading to this Agreement is its correct name. Borrower has
complied, and will in the future comply, with all laws relating to the conduct
of business under a fictitious business name.

7.4                       Place of Business. Borrower’s Address set forth in the
heading to this Agreement is the address and location of Borrower’s chief
executive office.

7.5                       Books and Records. Borrower has maintained and will
maintain at Borrower’s Address complete and accurate books and records,
comprising an accounting system in accordance with GAAP.

7.6                       Financial Condition, Statements and Reports. All
financial statements now or in the future delivered to Lender have been, and
will be, prepared in conformity with GAAP (except, in the case of unaudited
financial statements, for the absence of footnotes and subject to normal
year-end adjustments) and now and in the future will fairly reflect the
financial condition of Borrower, at the times and for the periods therein
stated. Between the last date covered by any such statement provided to Lender
and the date hereof, there has been no Material Adverse Effect. Borrower is now
and will continue to be Solvent.

7.7                       Tax Returns and Payments; Pension Contributions.
Borrower has timely filed, and will timely file, all tax returns and reports
required by foreign, federal, state and local law, and Borrower and each
Essential Additional Party has timely paid, and will timely pay, all foreign,
federal, state and local taxes, assessments, deposits and contributions now or
in the future owed by Borrower. Borrower may, however, defer payment of any
contested taxes, provided that Borrower (a) in good faith contests Borrower’s
obligation to pay the taxes by appropriate proceedings promptly and diligently
instituted and conducted, and (b) posts bonds or takes any other steps required
to keep the contested taxes from becoming a lien upon any of the property of
Borrower. As of the date hereof, Borrower is unaware of any claims or
adjustments proposed for any of Borrower’s prior tax years which could result in
additional taxes becoming due and payable by Borrower. Borrower has paid, and
shall continue to pay all amounts necessary to fund all present and future
pension, profit sharing and deferred compensation plans in accordance with their
terms, and Borrower has not and will not withdraw from participation in, permit
partial or complete termination of, or permit the occurrence of any other event
with respect to, any such plan which could result in any liability of Borrower,
including any liability to the Pension Benefit Guaranty Corporation or its
successors or any other governmental agency.

7.8                       Taxes and Assessments. To Borrower’s knowledge, the
Property is comprised of one or more parcels, each of which constitutes a
separate legal parcel and a separate tax lot and none of which constitutes a
portion of any other tax lot. There are no pending or, to Borrower’s best
knowledge, proposed, special or other assessments for public improvements or
otherwise affecting the Property, nor are there any contemplated improvements to
the Property that may result in such special or other assessments.

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7.9                       Compliance with Law.

(a)                                  Borrower represents and warrants that any
current noncompliance, if any, with any foreign, federal, state and local laws
and regulations relating to Borrower (including, but not limited to, the Fair
Labor Standards Act, and those relating to Borrower’s ownership of real or
personal property, the conduct and licensing of Borrower’s business, and
environmental matters), shall not have a Material Adverse Effect. Borrower
agrees that Borrower shall comply, in all material respects, with all foreign,
federal, state and local laws and regulations relating to Borrower or the
Property, including, but not limited to, the Fair Labor Standards Act, and those
relating to Borrower’s ownership of real or personal property, the conduct and
licensing of Borrower’s business, and environmental matters.

(b)                                 To Borrower’s knowledge, Borrower has all
requisite licenses, permits, franchises, qualifications, certificates of
occupancy or other governmental authorizations to own, lease and operate the
Property and carry on its business, the Property is in compliance with all
applicable legal requirements and is free of structural defects, and all
building systems contained therein are in good working order, subject to
ordinary wear and tear. Borrower shall cause (i) Borrower to have all requisite
licenses, permits, franchises, qualifications, certificates of occupancy or
other governmental authorizations to own, lease and operate the Property and
carry on its business, and (ii) the Property at all times to be in compliance
with all applicable legal requirements and to be free of structural defects, and
shall cause all building systems contained therein to be in good working order,
subject to ordinary wear and tear. To Borrowers knowledge, the Property does not
constitute, in whole or in part, a legally nonconforming use under applicable
legal requirements;

(c)                                  To Borrower’s knowledge, no condemnation
has been commenced or, is contemplated with respect to all or any portion of the
Property or for the relocation of roadways providing access to the Property; and

(d)                                 To Borrower’s knowledge, (i) the Property
has adequate rights of access to public ways and is served by adequate water,
sewer, sanitary sewer and storm drain facilities; (ii) all public utilities
necessary or convenient to the full use and enjoyment of the Property are
located in the public right-of-way abutting the Property, and all such utilities
are connected so as to serve the Property without passing over other property,
except to the extent such other property is subject to a perpetual easement for
such utility benefiting the Property; and (iii) all roads necessary for the full
utilization of the Property for its current purpose have been completed and
dedicated to public use and accepted by all governmental authorities. Borrower
shall cause (i) the Property to have adequate rights of access to public ways
and is served by adequate water, sewer, sanitary sewer and storm drain
facilities; (ii) all public utilities necessary or convenient to the full use
and enjoyment of the Property to be located in the public right-of-way abutting
the Property, and all such utilities to be connected so as to serve the Property
without passing over other property, except to the extent such other property is
subject to a perpetual easement for such utility benefiting the Property; and
(iii) all roads necessary for the full utilization of the Property for its
current purpose to be completed and dedicated to public use and accepted by all
governmental authorities.

7.10                Liabilities; Litigation.

(a)                                  There is no claim, suit, litigation,
proceeding or investigation pending, or to the best of Borrower’s knowledge,
threatened by or against or affecting Borrower in any court or before any
governmental agency (or any basis therefore known to Borrower) which may result,
either separately or in the aggregate, in a Material Adverse Effect. Borrower
will promptly inform Lender in writing of any proceeding, litigation or
investigation in the future or instituted by or against Borrower involving any
single claim of $10,000,000 or more, or involving $25,000,000 or more in the
aggregate.

(b)                                 Borrower is not contemplating either the
filing of a petition by it under state or federal bankruptcy or insolvency laws
or the liquidation of all or a major portion of its assets or property, and
Borrower has no knowledge of any Person contemplating the filing of any such
petition against it.

7.11                Use of Proceeds. All proceeds of the Mortgage Loan or Term
Loan shall be used solely for lawful business purposes.

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8.                                      ADDITIONAL DUTIES OF THE BORROWER

8.1                       Insurance. Borrower shall, at all times insure all of
the property of Borrower as required in the Deed of Trust.

8.2                       Reports. Borrower shall cause to be delivered to
Lender copies of the following reports:

(a)                                  Annual Form 10K Report of Borrower (and its
subsidiaries on a consolidated basis), which will be delivered within ninety
(90) days of fiscal year end of Borrower;

(b)                                 Quarterly Form 10Q Report of Borrower (and
its subsidiaries on a consolidated basis), which will be delivered within
forty-five (45) days after the end of each calendar quarter;

(c)                                  Covenant Compliance Certificate in the form
of Exhibit “B” hereto, which will be delivered within forty-five days after the
end of each calendar quarter;

(d)                                 Covenant Compliance Certificate in the form
of Exhibit “C” hereto, which will be delivered within ninety (90) days after the
end of each calendar year;

(e)                                  Annual company-prepared consolidating
balance sheet and consolidating income statement showing key entities of the
Borrower (as a minimum, needs to show OmniVision International Holdings Ltd. and
OmniVision Technologies (Hong Kong) Company Limited); and

(f)                                    Quarterly company-prepared consolidating
balance sheet and consolidating income statement showing key entities of the
Borrower (as a minimum, needs to show OmniVision International Holdings Ltd. and
OmniVision Technologies (Hong Kong) Company Limited).

The financial and operating statements shall be prepared in accordance with
GAAP, and shall be certified as correct by Borrower. Borrower shall keep books
and records of account of all income and expenses of the Property and of its own
financial affairs sufficient to permit the preparation of the financial and
operating statements in accordance with the standards herein contained. Lender
and its designated agents and representatives shall have the absolute right at
all times upon reasonable prior notice to Borrower (unless an Event of Default
exists) to examine, copy, and audit any such books and records. Borrower shall
also furnish to Lender promptly upon request such documents and instruments as
Lender may request in order to verify the accuracy of any of the information
contained in any statement submitted hereunder. All books and records pertaining
to the income, expenses, management or operation of the Property shall be kept
at the Property unless otherwise approved by Lender; and all books and records
pertaining to Borrower’s financial condition shall be kept at Borrower’s
principal place of business or the office of Borrower’s accountants.

8.3                       Negative Covenants. Borrower shall not, without
Lender’s prior written consent, which shall not be unreasonably withheld, do any
of the following:

(a)                                  Except in cases involving one or more
Affiliates of the Borrower, merge or consolidate with another entity, except in
a transaction in which (i) the owners of Borrower hold at least fifty percent
(50%) of the ownership interest in the surviving entity immediately after such
merger or consolidation, and (ii) Borrower is the surviving entity;

(b)                                 [omitted];

(c)                                  sell, lease (except as expressly permitted
by this Agreement or by any other of the Loan Documents) or license the Property
or grant any other security interest in any of the property of Borrower other
than for Permitted Liens (provided, however, that in no event may the aggregate
amount outstanding under Permitted Liens exceed Fifty Million Dollars
($50,000,000));

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(d)                                 make any change in Borrower’s capital
structure which would have a Material Adverse Effect;

(e)                                  dissolve or elect to dissolve;

(f)                                    change the state of its organization; or

(g)                                 change its legal name without advance notice
to Lender.

Transactions permitted by the foregoing provisions of this Section are only
permitted if no Default or Event of Default is continuing or would occur as a
result of such transaction.

8.4                       Litigation Cooperation.  Should any third-party suit
or proceeding be instituted by or against Lender with respect to the Property or
relating to Borrower, Borrower shall, without expense to Lender, make available
Borrower and its officers, employees and agents and Borrower’s books and
records, to the extent that Lender may deem them reasonably necessary in order
to prosecute or defend any such suit or proceeding.

8.5                       Further Assurances. Borrower agrees, at its expense,
on request by Lender, to execute all documents and take all actions, as Lender,
may deem reasonably necessary or useful in order to fully consummate the
transactions contemplated by this Agreement.

9.                                      EVENTS OF DEFAULT AND REMEDIES

9.1                       Events of Default. The occurrence of any of the
following events shall constitute an “Event of Default” under this Agreement,
and Borrower shall give Lender immediate written notice thereof:

(a)                                  Any warranty, representation, statement,
report or certificate made or delivered to Lender by Borrower or any of
Borrower’s officers, employees or agents, now or in the future, shall be untrue
or misleading and results in a Material Adverse Effect; or

(b)                                 Borrower shall fail to pay when due any
amounts under the Loans or any interest thereon or any other monetary
Obligation; or

(c)                                  Borrower shall breach any negative covenant
set forth in Section 8.3 above; or

(d)                                 Borrower shall fail to comply with the
financial covenants (if any) set forth in Section 10 or shall fail to perform
any other non-monetary Obligation which by its nature cannot be cured; or

(e)                                  Borrower shall fail to perform any other
non-monetary Obligation, which failure is not cured within five (5) Business
Days after the date due or breaches any other terms under any of the other
Obligations (including under any of the other Loan Documents) not otherwise
mentioned in this definition of Event of Default and such failure is not cured
within thirty (30) days after prior written notice thereof; or

(f)                                    Any levy, assessment, attachment,
seizure, lien or encumbrance is made on all or any part of the Property which is
not cured within ten (10) days after the occurrence of the same; or

(g)                                 any default or event of default occurs under
any obligation secured by a Permitted Lien, which is not cured within any
applicable cure period or waived in writing by the holder of the Permitted Lien;
or

(h)                                 any default or event of default occurs under
any unsecured obligation of Borrower in excess of One Million Dollars
($1,000,000);

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(i)                                     Borrower breaches any material contract
or obligation, which has or may reasonably be expected to have a Material
Adverse Effect; or

(j)                                     Dissolution, termination of existence,
insolvency or business failure of Borrower; or appointment of a receiver,
trustee or custodian, for all or any part of the property of, assignment for the
benefit of creditors by, or the commencement of any proceeding by Borrower under
any reorganization, bankruptcy, insolvency, arrangement, readjustment of debt,
dissolution or liquidation law or statute of any jurisdiction, now or in the
future in effect; or

(k)                                  the commencement of any proceeding against
Borrower under any reorganization, bankruptcy, insolvency, arrangement,
readjustment of debt, dissolution or liquidation law or statute of any
jurisdiction, now or in the future in effect, which is (i) not timely
controverted, or (ii) not cured by the dismissal thereof within thirty (30) days
after the date commenced; or

(l)                                     revocation or termination of, or
limitation or denial of liability upon, any guaranty of the Obligations or any
attempt to do any of the foregoing, or commencement of proceedings by any
guarantor of any of the Obligations under any bankruptcy or insolvency law; or

(m)                               revocation or termination of, or limitation or
denial of liability upon, any pledge of any certificate of deposit, securities
or other property or asset of any kind pledged by any third party to secure any
or all of the Obligations, or any attempt to do any of the foregoing, or
commencement of proceedings by or against any such third party under any
bankruptcy or insolvency law; or

(n)                                 Borrower makes any payment on account of any
indebtedness or obligation which has been subordinated to the Obligations, other
than as permitted in the applicable subordination agreement, or if any Person
who has subordinated such indebtedness or obligations terminates or in any way
limits his subordination agreement; or

(o)                                 Borrower shall suffer or experience any
Change of Control without Lender’s prior written consent, which consent shall be
in the discretion of Lender in the exercise of its reasonable business judgment;

(p)                                 Borrower shall generally not pay its debts
as they become due, or Borrower shall conceal, remove or transfer any part of
its property, with intent to hinder, delay or defraud its creditors, or make or
suffer any transfer of any of its property which may be fraudulent under any
bankruptcy, fraudulent conveyance or similar law; or

(q)                                 Borrower shall fail to comply with the terms
and conditions of any Interest Rate Agreement with Lender or any other party
(including the Interest Rate Swap Agreement (Long Form Trade Confirmation)) or
shall amend, modify, or terminate any such agreement or waive any rights
thereunder; or

(r)                                    Failure of Borrower to occupy the
buildings located at 4275 and 4295 Burton Drive, Santa Clara, California; or

(s)                                  There shall be any Material Adverse Effect;

(t)                                    An “Event of Default” shall occur under
that certain Stock Pledge Agreement of even date herewith by Borrower in favor
of Lender; or

(u)                                 A breach occurs under Section 6.16.1 of the
Deed of Trust.

Lender may cease making any advances or extending any credit hereunder during
any of the above-specified cure periods.

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9.2                       Remedies.

(a)                                  Upon the occurrence and during the
continuance of any Event of Default, Lender, at its option, and without notice
or demand of any kind (all of which are hereby expressly waived by Borrower),
may do any one or more of the following:

(i)                                     Cease making additional advances under
the Term Loan or otherwise extending credit to Borrower under this Agreement or
any other document or agreement; or

(ii)                                  Accelerate and declare all or any part of
the Obligations to be immediately due, payable and performable, notwithstanding
any deferred or installment payments allowed by any instrument evidencing or
relating to any Obligation; or

(b)                                 All attorneys’ fees, expenses, costs,
liabilities and obligations incurred by Lender (including attorneys’ fees and
expenses incurred in connection with bankruptcy) with respect to the foregoing
shall be due from Borrower to Lender on demand; or

(c)                                  Exercise any other remedies available at
law or equity

9.3                       Remedies Cumulative. In addition to the rights and
remedies set forth in this Agreement, Lender shall have all the other rights and
remedies accorded a creditor at law or in equity, and under any other instrument
or agreement now or in the future entered into between Lender and Borrower, and
all of such rights and remedies are cumulative and none is exclusive. Exercise
or partial exercise by Lender of one or more of its rights or remedies shall not
be deemed an election, nor bar Lender from subsequent exercise or partial
exercise of any other rights or remedies. The failure or delay of Lender to
exercise any rights or remedies shall not operate as a waiver thereof, but all
rights and remedies shall continue in full force and effect until all of the
Obligations (as defined in the Note) have been indefeasibly paid and performed.

10.                               FINANCIAL COVENANTS

10.1                Tangible Net Worth. Borrower will maintain a minimum
Tangible Net Worth, calculated as of the end of each fiscal quarter of Borrower
(i.e., the calendar quarters ending April 30, July 31, October 31, and January
31) of (i) at least Four Hundred Million Dollars ($400,000,000) for each
calendar quarter ending on or before April 30, 2007, and (ii) for each calendar
quarter ending on or after July 31, 2008, at least the sum of Four Hundred
Million Dollars ($400,000,000) plus, to the extent greater than zero, fifty
percent (50%) of any Net Income incurred in any prior calendar years (commencing
with the calendar year ending April 30, 2007); provided, however, that the
required Tangible Net Worth shall decrease by the amount of Net Profits used to
repurchase stock of Borrower (but such decrease shall not be in excess of an
aggregate amount of One Hundred Million Dollars ($100,000,000)).

10.2                Debt Service Coverage Ratio. Borrower will maintain a Debt
Service Coverage Ratio of no less than 2.00 to 1.00 for each calendar quarter
commencing with the calendar quarter ending on March 31, 2007. As used in this
Section 10.2, “Debt Service Coverage Ratio” means the ratio of (a) EBITDA for
the previous twelve (12) calendar months over (b) the sum of (i) Interest
Expenses incurred over the previous twelve (12) calendar months, plus (ii)
principal amounts payable hereunder and the current portion of any other
long-term debt of Borrower due over the next twelve (12) calendar months (under
GAAP).

11.                               GENERAL PROVISIONS

11.1                Application of Payments. All payments with respect to the
Obligations shall be applied as provided in each [Note].

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11.2                Charges to Accounts. Lender may, in its discretion, require
that Borrower pay monetary Obligations in cash to Lender, or charge them to
Borrower’s Loan Account, in which event they will bear interest from the date
due to the date paid at the same rate applicable to the Loan.

11.3                Notices. All notices to be given under this Agreement shall
be in writing and shall be given either personally or by reputable private
delivery service or by regular first-class mail, facsimile or certified mail
return receipt requested. All notices to Borrower shall be addressed to Borrower
at the address shown in the heading to this Agreement, or at any other address
designated in writing by Borrower to Lender. All notices to Lender shall be
addressed to Lender at the address set forth in the introductory paragraph of
this Agreement, to the attention of the Commercial Banking Division, Manager,
Note Department, or at any other address designated in writing by Lender to
Borrower. All notices shall be deemed to have been given upon delivery in the
case of notices personally delivered, faxed (at time of confirmation of
transmission), or at the expiration of one (1) Business Day following delivery
to a private delivery service, or two (2) Business Days following the deposit
thereof in the United States mail, with postage prepaid.

11.4                Severability. Should any provision of this Agreement be held
by any court of competent jurisdiction to be void or unenforceable, such defect
shall not affect the remainder of this Agreement, which shall continue in full
force and effect.

11.5                Integration. This Agreement and such other written
agreements, documents and instruments as may be executed in connection herewith
are the final, entire and complete agreement between Borrower and Lender and
supersede all prior and contemporaneous negotiations and oral representations
and agreements, all of which are merged and integrated in this Agreement. There
are no oral understandings, representations or agreements between the parties
which are not set forth in this Agreement or in other written agreements signed
by the parties in connection herewith.

11.6                Waivers. The failure of Lender at any time or times to
require Borrower to strictly comply with any of the provisions of this Agreement
or any other present or future agreement between Borrower and Lender shall not
waive or diminish any right of Lender later to demand and receive strict
compliance therewith. Any waiver of any Default shall not waive or affect any
other Default, whether prior or subsequent, and whether or not similar. None of
the provisions of this Agreement or any other agreement now or in the future
executed by Borrower and delivered to Lender shall be deemed to have been waived
by any act or knowledge of Lender or its agents or employees, but only by a
specific written waiver signed by an authorized officer of Lender and delivered
to Borrower. Borrower waives demand, protest, notice of protest and notice of
default or dishonor, notice of payment and nonpayment, release, compromise,
settlement, extension or renewal of any commercial paper, instrument, account,
general intangible (as defined in the California Uniform Commercial Code),
document or guaranty at any time held by Lender on which Borrower is or may in
any way be liable, and notice of any action taken by Lender, unless expressly
required by this Agreement.

11.7                No Liability for Ordinary Negligence. Neither Lender, nor
any of its directors, officers, employees, agents, attorneys or any other Person
affiliated with or representing Lender shall be liable for any claims, demands,
losses or damages, of any kind whatsoever, made, claimed, incurred or suffered
by Borrower or any other party through the ordinary negligence of Lender, or any
of its directors, officers, employees, agents, attorneys or any other Person
affiliated with or representing Lender, but nothing herein shall relieve Lender
from liability for its own gross negligence or willful misconduct; provided,
however, that this Section 11.7 shall not relieve Lender of any obligation of
returning excess amounts that may have been negligently charged to Borrower
under the Term Loan or the Mortgage Loan.

11.8                Amendment. The terms and provisions of this Agreement may
not be waived or amended, except in a writing executed by Borrower and a duly
authorized officer of Lender.

11.9                Time of Essence. Time is of the essence in the performance
by either party of each and every of their obligations under this Agreement.

11.10         Attorneys’ Fees, Costs and Charges. Borrower shall reimburse
Lender for all attorneys’ fees (including attorneys’ fees and expenses incurred
pursuant to bankruptcy) and all filing, recording, search,

17

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title insurance, appraisal, audit, and other costs incurred by Lender, pursuant
to, or in connection with, or relating to this Agreement (whether or not a
lawsuit is filed), including, but not limited to, any attorneys’ fees and costs
(including attorneys’ fees and expenses incurred pursuant to Borrower’s
bankruptcy) Lender incurs in order to do the following: prepare and negotiate
this Agreement and the documents relating to this Agreement, obtain legal advice
in connection with this Agreement or Borrower; enforce, or seek to enforce, any
of its rights; commence, intervene in, or defend any action or proceeding;
initiate any complaint to be relieved of the automatic stay in bankruptcy; file
or prosecute any probate claim, bankruptcy claim, third-party claim, or other
claim; examine, audit, copy, and inspect or audit any of Borrower’s books and
records; protect, obtain possession of, lease, dispose of, or otherwise enforce
Lender’s security interest in the Property; and otherwise represent Lender in
any litigation relating to Borrower. If either Lender or Borrower files any
lawsuit against the other predicated on a breach of this Agreement, the
prevailing party in such action shall be entitled to recover its costs and
attorneys’ fees (including attorneys’ fees and expenses incurred pursuant to
bankruptcy), including (but not limited to) attorneys’ fees and costs incurred
in the enforcement of, execution upon or defense of any order, decree, award or
judgment. Borrower shall also pay Lender’s standard charges for returned checks
and for wire transfers, in effect from time to time. All attorney’s fees, costs
and charges (including attorneys’ fees and expenses incurred pursuant to
bankruptcy) and other fees, costs and charges to which Lender may be entitled
pursuant to this Agreement may be charged by Lender to Borrower’s Loan Account
and shall thereafter bear interest at the same rate as the Mortgage Loan.

11.11                          Benefit of Agreement. The provisions of this
Agreement shall be binding upon and inure to the benefit of the respective
successors, assigns, heirs, beneficiaries and representatives of Borrower and
Lender; provided, however, that Borrower may not assign or transfer any of its
rights under this Agreement, except as permitted pursuant to the terms and
conditions of the Deed of Trust, without the prior written consent of Lender,
and any prohibited assignment shall be void. No consent by Lender to any
assignment shall release Borrower from its liability for the Obligations. Lender
may assign its rights and delegate its duties hereunder without the consent of
Borrower. Lender reserves the right to syndicate all or a portion of the
transaction created herein or sell, assign, transfer, negotiate, or grant
participations in all or any part of, or any interest in Lender’s rights and
benefits hereunder. In connection with any such syndication, assignment or
participation, Lender may disclose all documents and information which Lender
now or hereafter may have relating to Borrower or Borrower’s business. To the
extent that Lender assigns its rights and obligations hereunder to a third
Person, Lender thereafter shall be released from such assigned obligations to
Borrower.

11.12                          Publicity. Lender is hereby authorized, at its
expense and in its sole discretion, to issue appropriate press releases and to
cause a tombstone to be published announcing the consummation of this
transaction and the aggregate amount thereof.

11.13                          Governing Law; Jurisdiction; Venue. This
Agreement and all acts and transactions hereunder and all rights and obligations
of Lender and Borrower shall be governed by the internal laws of the State of
California, without regard to its conflicts of law principles. As a material
part of the consideration to Lender to enter into this Agreement, Borrower (a)
agrees that all actions and proceedings relating directly or indirectly to this
Agreement shall, at Lender’s option, be litigated in courts located within
California, and that the exclusive venue therefor shall be in the City and
County of San Francisco; (b) consents to the jurisdiction and venue of any such
court and consents to service of process in any such action or proceeding by
personal delivery or any other method permitted by law; and (c) waives any and
all rights Borrower may have to object to the jurisdiction of any such court, or
to transfer or change the venue of any such action or proceeding.

11.14                          Mutual Waiver of Jury Trial. TO THE FULLEST
EXTENT PERMITTED BY LAW, BORROWER AND LENDER EACH HEREBY WAIVE THE RIGHT TO
TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY
WAY RELATING TO, THIS AGREEMENT OR ANY OTHER PRESENT OR FUTURE INSTRUMENT OR
AGREEMENT BETWEEN LENDER AND BORROWER, OR ANY CONDUCT, ACTS OR OMISSIONS OF
LENDER OR BORROWER OR ANY OF THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS,
ATTORNEYS OR ANY OTHER PERSONS AFFILIATED WITH LENDER OR BORROWER, IN ALL OF THE
FOREGOING CASES, WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE.
NOTWITHSTANDING THE FOREGOING, ANY CONTROVERSY HEREUNDER SHALL BE GOVERNED BY
THE TERMS AND CONDITIONS OF THAT

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CERTAIN ALTERNATIVE DISPUTE RESOLUTION AGREEMENT, DATED AS OF THE DATE HEREOF,
BY AND AMONG BORROWER AND LENDER.

19

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date set forth in the heading to this Agreement.

BORROWER:

 

 

 

 

OMNIVISION TECHNOLOGIES,INC.,

 

 

a Delaware corporation

 

 

 

 

 

 

 

 

By:

 

/s/ James He

 

 

 

 

 

Name:

James He

 

 

 

 

 

Title:

COO

 

 

LENDER:

 

CITIBANK, N.A., a national banking association

 

 

By:

/s/ Ada Lei Man Wong

 

Name:

Ada Lei Man Wong

 

Title:

VICE PRESIDENT

 

 

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EXHIBIT A

LOAN BORROWING CERTIFICATE

The undersigned hereby certifies as follows:

I, ____________________________, am the duly elected and acting
________________________ of OMNIVISION TECHNOLOGIES, INC (“Borrower”).

This Loan Borrowing Certificate is delivered pursuant to Section 3.1 f that
certain Loan and Security Agreement (the “Loan Agreement”) dated as of March
     , 2007 by and between Borrower and CITIBANK, N.A., a national banking
association (“Lender”). The terms used in this Loan Borrowing Certificate which
are defined in the Loan Agreement have the same meaning herein as ascribed to
them therein.

Borrower hereby requests an additional Advance of the Term Loan as follows:

(a)       The date on which the Term Loan is to be made is_____________ 20
_____.

(b)       The amount of the Term Loan is to be ___________________ Dollars ($
____________________).

All representations and warranties of Borrower set forth in the Loan Agreement
are true, correct and complete in all material respects as of the date of this
request for an advance of the Term Loan Loan; provided, however, that those
representations and warranties expressly referring to another date shall be
true, correct and complete in all material respects as of such date. No Default
or Event of Default exists

IN WITNESS WHEREOF, this Loan Borrowing Certificate is executed by the
undersigned as of this             day of ____________________, 20______ .

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

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EXHIBIT B

Quarterly Covenant Compliance Certificate

Borrower: OMNIVISION TECHNOLOGIES, INC.,

 

As of:

 

 

Date

 

 

 

Financial Reporting to be delivered within 45 days of the end of each fiscal
quarter of Borrower
(i.e., the calendar quarters ending April 30, July 31, October 31, and January
31):

 

1)   Quarterly Form 10Q Report of Borrower (and its subsidiaries on a
consolidated basis);

 

 

 

 

 

 

 

 

 

 

In Compliance

 

 

 

(Yes/No)

 

 

 

 

 

 

 

 

 

 

2)   Quarterly company-prepared consolidating balance sheet and consolidating
income statement showing key entities of the Borrower (as a minimum, needs to
show OmniVision International Holdings Ltd. and OmniVision Technologies (Hong
Kong) Company Limited).

 

 

 

 

 

 

 

 

 

 

In Compliance

 

 

 

(Yes/No)

 

 

 

Financial Covenants: (Measured Quarterly—calculated as of the end of each fiscal
quarter of Borrower
(i.e., the calendar quarters ending April 30, July 31, October 31, and January
31))

1)   Tangible Net Worth of (i) at least Four Hundred Million Dollars
($400,000,000) for each fiscal quarter ending on or before April 30, 2007, and
(ii) for each fiscal quarter ending on or after July 31, 2008, at least the sum
of Four Hundred Million Dollars ($400,000,000) plus, to the extent greater than
zero, fifty percent (50%) of any Net Income incurred in any prior fiscal years
(commencing with the fiscal year ending April 30, 2007); provided, however, that
the required Tangible Net Worth shall decrease by the amount of Net Profits used
to repurchase stock of

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The undersigned certifies that the foregoing (including any attachments) is
true, complete and correct, and that the information reflected in this
Compliance certificate complies with the provisions set forth in the Loan and
Security Agreement between Borrower and Citibank N.A., dated March      , 2007
(the “Loan Agreement”). The undersigned further certifies that, as of the date
hereof, no Default or Event of Default (each as defined in the Loan Agreement)
has occurred.

 

OMNIVISION TECHNOLOGIES, INC.,

 

 

a Delaware corporation

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

 

 

Title:

 

 

 

 

 

 

 

 

 

Date:

 

 

 

--------------------------------------------------------------------------------

EXHIBIT C

Annual Covenant Compliance Certificate

Borrower:                  OMNIVISION TECHNOLOGIES, INC.,

 

As of:

 

 

 

Date

 

 

 

Financial Reporting to be delivered within 90 days of the end of fiscal year end
Borrower
(i.e., the fiscal year ending April 30):

1)

Annual Form 10K Report of Borrower (and its subsidiaries on a consolidated
basis),

 

 

 

 

 

 

 

 

 

 

In Compliance

 

 

 

(Yes/No)

 

2)          (Annual company-prepared consolidating balance sheet and
consolidating income statement showing

 

key entities of the Borrower (as a minimum, needs to show OmniVision
International Holdings Ltd. and OmniVision

 

Technologies (Hong Kong) Company Limited

 

 

 

 

 

 

 

 

 

In Compliance

 

 

 

(Yes/No)

Financial Covenants: (Measured Quarterly—calculated as of the end of each fiscal
quarter of Borrower
(i.e., the fiscal quarters ending April 30, July 31, October 31, and January
31))

1) Tangible Net Worth of (i) at least Four Hundred Million Dollars
($400,000,000) for each fiscal quarter ending on or before April 30, 2007, and
(ii) for each fiscal quarter ending on or after July 31, 2008, at least the sum
of Four Hundred Million Dollars ($400,000,000) plus, to the extent greater than
zero, fifty percent (50%) of any Net Income incurred in any prior fiscal years
(commencing with the fiscal year ending April 30, 2007); provided, however, that
the required Tangible Net Worth shall decrease by the amount of Net Profits used
to repurchase stock of Borrower (but such decrease shall not be in excess of an
aggregate amount of One Hundred Million Dollars ($100,000,000)).

2) Minimum Debt Service Coverage Ratio of
2.0:1.0                                                  

--------------------------------------------------------------------------------

The undersigned certifies that the foregoing (including any attachments) is
true, complete and correct, and that the information reflected in this
Compliance certificate complies with the provisions set forth in the Loan and
Security Agreement between Borrower and Citibank N.A., dated March       , 2007
(the “Loan Agreement”). The undersigned further certifies that, as of the date
hereof, no Default or Event of Default (each as defined in the Loan Agreement)
has occurred.

 

OMNIVISION TECHNOLOGIES, INC.,

 

 

a Delaware corporation

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

 

 

Title:

 

 

 

 

 

 

 

 

 

Date:

 

 

 

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