EXHIBIT 10.1
 
 
 
 
 
 
 
 
 
 
ADEPT TECHNOLOGY, INC.
 
LOAN AND SECURITY AGREEMENT
 
 
 
 
 
 
 
 
 
 
 
 
 

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This LOAN AND SECURITY AGREEMENT (this “Agreement”) is entered into as of June
9, 2014, by and between Comerica Bank (“Bank”) and Adept Technology, Inc., a
Delaware corporation (“Borrower”).
 
 
RECITALS
 
Borrower wishes to obtain credit from time to time from Bank, and Bank desires
to extend credit to Borrower.  This Agreement sets forth the terms on which Bank
will advance credit to Borrower, and Borrower will repay the amounts owing to
Bank.
 
AGREEMENT
 
The parties agree as follows:
 
1.
DEFINITIONS AND CONSTRUCTION.

 
1.1 Definitions.  As used in this Agreement, all capitalized terms shall have
the definitions set forth on Exhibit A.  Any term used in the Code and not
defined herein shall have the meaning given to the term in the Code.
 
1.2 Accounting Terms.  Any accounting term not specifically defined on Exhibit A
shall be construed in accordance with GAAP and all calculations shall be made in
accordance with GAAP.  The term “financial statements” shall include the
accompanying notes and schedules, if any.
 
2.  
LOAN AND TERMS OF PAYMENT.

 
2.1 Credit Extensions.
 
(a) Promise to Pay.  Borrower promises to pay to Bank, in lawful money of the
United States of America, the aggregate unpaid principal amount of all Credit
Extensions made by Bank to Borrower, together with interest on the unpaid
principal amount of such Credit Extensions at rates in accordance with the terms
hereof.
 
(b) Advances Under Revolving Line.
 
(i) Amount.  Subject to and upon the terms and conditions of this Agreement
Borrower may request Advances in an aggregate outstanding amount not to exceed
the lesser of (A) the Revolving Line or (B) the Borrowing Base, less the
aggregate face amount of Letters of Credit issued under the Letter of Credit
Sublimit, the aggregate limits of the corporate credit cards issued to Borrower
and merchant credit card processing reserves under the Credit Card Services
Sublimit, and any amounts outstanding under the Foreign Exchange Sublimit, plus
the Non-Formula Amount.  Amounts borrowed pursuant to this Section 2.1(b) may be
repaid and reborrowed at any time without penalty or premium prior to the
Revolving Maturity Date, at which time all Advances under this Section 2.1(b)
shall be immediately due and payable. The aggregate maximum amount outstanding
under the Letter of Credit Sublimit, the aggregate limits of the corporate
credit cards issued to Borrower and merchant credit card processing reserves
under the Credit Card Services Sublimit, and any amounts outstanding under the
Foreign Exchange Sublimit shall not collectively exceed Five Hundred Thousand
Dollars ($500,000) (the “Maximum Sublimit Amount”).
 
(ii) Form of Request.  Whenever Borrower desires an Advance, Borrower will
notify Bank by facsimile transmission or telephone no later than 3:00 p.m.
Pacific time (12:00 p.m. Pacific time for wire transfers), on the Business Day
that the Advance is to be made.  Each such notification shall be promptly
confirmed by a Payment/Advance Form in substantially the form of Exhibit
C.  Bank is authorized to make Advances under this Agreement, based upon
instructions received from a Responsible Officer or a designee of a Responsible
Officer, or without instructions if in Bank’s discretion such Advances are
necessary to meet Obligations which have become due and remain unpaid.  Bank
shall be entitled to rely on any facsimile or telephonic notice given by a
person who Bank reasonably believes to be a Responsible Officer or a designee
thereof, and Borrower shall indemnify and hold Bank harmless for any damages or
loss suffered by Bank as a result of such reliance.  Bank will credit the amount
of Advances made under this Section 2.1(b) to Borrower’s deposit account.
 
 
 

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(iii) Letter of Credit Sublimit. Subject to the availability under the Revolving
Line, and in reliance on the representations and warranties of Borrower set
forth herein, at any time and from time to time from the date hereof through the
Business Day immediately prior to the Revolving Maturity Date, Bank shall issue
for the account of Borrower such Letters of Credit as Borrower may request by
delivering to Bank a duly executed letter of credit application on Bank’s
standard form; provided, however, that the outstanding and undrawn amounts under
all such Letters of Credit (i) shall not at any time exceed the Letter of Credit
Sublimit (One Hundred Thousand Dollars ($100,000)), and (ii) shall be deemed to
constitute Advances for the purpose of calculating availability under the
Revolving Line.  Notwithstanding the foregoing, the aggregate credit limit of
Credit Card Services, the aggregate outstanding amount of Letters of Credit and
the FX Amount shall not exceed the Maximum Sublimit Amount at any time.  Any
drawn but unreimbursed amounts under any Letters of Credit shall be charged as
Advances against the Revolving Line. All Letters of Credit shall be in form and
substance acceptable to Bank in its sole discretion and shall be subject to the
terms and conditions of Bank’s form application and letter of credit
agreement.  Borrower will pay any standard issuance and other fees that Bank
notifies Borrower it will charge for issuing and processing Letters of Credit.
 
(iv) Credit Card Services Sublimit.  Subject to the terms and conditions of this
Agreement, Borrower may request corporate credit cards and standard and
e-commerce merchant account services from Bank (collectively, the “Credit Card
Services”).  The aggregate limit of the corporate credit cards and merchant
credit card processing reserves shall not exceed the Credit Card Services
Sublimit, provided that availability under the Revolving Line shall be reduced
by the aggregate limits of the corporate credit cards issued to Borrower and
merchant credit card processing reserves.  Notwithstanding the foregoing, the
aggregate credit limit of Credit Card Services, the aggregate outstanding amount
of Letters of Credit and the FX Amount shall not exceed the Maximum Sublimit
Amount at any time.  In addition, Bank may, in its sole discretion, charge as
Advances any amounts that become due or owing to Bank in connection with the
Credit Card Services.  The terms and conditions (including repayment and fees)
of such Credit Card Services shall be subject to the terms and conditions of the
Bank’s standard forms of application and agreement for the Credit Card Services,
which Borrower hereby agrees to execute.
 
(v) Foreign Exchange Sublimit.  Subject to and upon the terms and conditions of
this Agreement and any other agreement that Borrower may enter into with the
Bank in connection with foreign exchange transactions (“FX Contracts”), Borrower
may request Bank to enter into FX Contracts with Borrower due not later than the
Revolving Maturity Date.  Borrower shall pay any standard issuance and other
fees that Bank notifies Borrower will be charged for issuing and processing FX
Contracts for Borrower.  The FX Amount shall at all times be equal to or less
than Five Hundred Thousand Dollars ($500,000).  Notwithstanding the foregoing,
the aggregate credit limit of Credit Card Services, the aggregate outstanding
amount of Letters of Credit and the FX Amount shall not exceed the Maximum
Sublimit Amount at any time.  The “FX Amount” shall equal the amount determined
by multiplying (i) the aggregate amount, in United States Dollars, of FX
Contracts between Borrower and Bank remaining outstanding as of any date of
determination by (ii) the applicable Foreign Exchange Reserve Percentage as of
such date.  The “Foreign Exchange Reserve Percentage” shall be a percentage as
determined by Bank, in its sole discretion from time to time.  The initial
Foreign Exchange Reserve Percentage shall be ten percent (10%).
 
(vi) Collateralization of Obligations Extending Beyond Maturity.  If any Letters
of Credit, Credit Card Services or Foreign Exchange Contracts extend beyond the
Revolving Maturity Date, then, effective as of the Revolving Maturity Date, the
balance in any deposit accounts held by Bank and the certificates of deposit or
time deposit accounts issued by Bank in Borrower’s name (and any interest paid
thereon or proceeds thereof, including any amounts payable upon the maturity or
liquidation of such certificates or accounts), shall automatically secure such
obligations to the extent of the then continuing or outstanding and undrawn
Letters of Credit, Credit Card Services or Foreign Exchange Contracts; provided,
however, that if there are insufficient balances in such accounts to secure such
obligations, Borrower shall immediately deposit such additional funds as are
necessary to fully secure such obligations.  Borrower authorizes Bank to hold
such balances in pledge and to decline to honor any drafts thereon or any
requests by Borrower or any other Person to pay or otherwise transfer any part
of such balances for so long as the Letters of Credit, Credit Card Services, or
Foreign Exchange Contracts are outstanding or continue.
 
 
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2.2 Overadvances.  If the aggregate amount of the outstanding Advances, plus the
aggregate face amount of Letters of Credit issued under the Letter of Credit
Sublimit, the aggregate limits of the corporate credit cards issued to Borrower
and merchant credit card processing reserves under the Credit Card Services
Sublimit, and any amounts outstanding under the Foreign Exchange Sublimit,
exceeds the lesser of the Revolving Line or the Borrowing Base plus the
Non-Formula Amount, at any time, Borrower shall immediately pay to Bank, in
cash, the amount of such excess.
 
2.3 Interest Rates, Payments, and Calculations.
 
(a) Interest Rates.  The Advances shall bear interest, on the outstanding daily
balance thereof, on the terms set forth in the Pricing Addendum.
 
(b) Payments.  Bank shall, at its option, charge such interest, all Bank
Expenses, and all Periodic Payments against any of Borrower’s deposit accounts
or against the Revolving Line (and in the case of the Revolving Line, those
amounts shall thereafter accrue interest at the rate then applicable
hereunder).  Any interest not paid when due shall be compounded by becoming a
part of the Obligations, and such interest shall thereafter accrue interest at
the rate then applicable hereunder.
 
2.4 Crediting Payments.  Prior to the occurrence of an Event of Default, Bank
shall credit a wire transfer of funds, check or other item of payment to such
deposit account or Obligation as Borrower specifies.  After the occurrence and
during the continuance of an Event of Default, Bank shall have the right, in its
sole discretion, to immediately apply any wire transfer of funds, check, or
other item of payment Bank may receive to conditionally reduce Obligations, but
such applications of funds shall not be considered a payment on account of such
Obligations unless such payment is of immediately available federal funds or
unless and until such check or other item of payment is honored when presented
for payment.  Notwithstanding anything to the contrary contained herein, any
wire transfer or payment received by Bank after 12:00 noon Pacific time shall be
deemed to have been received by Bank as of the opening of business on the
immediately following Business Day.  Whenever any payment to Bank under the Loan
Documents would otherwise be due (except by reason of acceleration) on a date
that is not a Business Day, such payment shall instead be due on the next
Business Day, and additional fees or interest, as the case may be, shall accrue
and be payable for the period of such extension.
 
2.5 Fees.  Borrower shall pay to Bank the following:
 
(a) Facility Fee.  On the Closing Date, and on each annual anniversary of the
Closing Date, a nonrefundable fee equal to Twelve Thousand Five Hundred Dollars
($12,500); and
 
(b) Bank Expenses.  On the Closing Date, all Bank Expenses incurred through the
Closing Date, and, after the Closing Date, all Bank Expenses, as and when they
become due.
 
2.6 Term.  This Agreement shall become effective on the Closing Date and,
subject to Section 13.8, shall continue in full force and effect for so long as
any Obligations remain outstanding (other than inchoate indemnity obligations)
or Bank has any obligation to make Credit Extensions under this
Agreement.  Notwithstanding the foregoing, Bank shall have the right to
terminate its obligation to make Credit Extensions under this Agreement
immediately and without notice upon the occurrence and during the continuance of
an Event of Default.
 
3.  
CONDITIONS OF LOANS.

 
3.1 Conditions Precedent to Initial Credit Extension.  The obligation of Bank to
make the initial Credit Extension is subject to the condition precedent that
Bank shall have received, in form and substance satisfactory to Bank, the
following:
 
(a) this Agreement;
 
 
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(b) an officer’s certificate of Borrower with respect to incumbency and
resolutions authorizing the execution and delivery of this Agreement and the
Loan Documents;
 
(c) the Pricing Addendum;
 
(d) financing statements (Form UCC-1) listing Borrower and each Material
Domestic Subsidiary as debtor;
 
(e) an agreement to furnish insurance from Borrower and each Material Domestic
Subsidiary;
 
(f) the certificate(s) for the Shares, together with two (2) original
instruments of assignment with respect to  each certificate evidencing the
Shares, duly executed in blank by Borrower;
 
(g) a guaranty from each Material Domestic Subsidiary;
 
(h) a security agreement from each Material Domestic Subsidiary;
 
(i) a judicial reference letter from each Material Domestic Subsidiary;
 
(j) an officer’s certificate of each Material Domestic Subsidiary with respect
to incumbency and resolutions authorizing the execution and delivery of the Loan
Documents executed by such Material Domestic Subsidiary;
 
(k) payment of the fees and Bank Expenses then due specified in Section 2.5;
 
(l) current SOS Reports indicating that except for Permitted Liens, there are no
other security interests or Liens of record in the Collateral;
 
(m) an audit of the Collateral, the results of which shall be satisfactory to
Bank (the “Initial Audit”);
 
(n) a payoff letter from Silicon Valley Bank;
 
(o) current financial statements, including company prepared consolidated and
consolidating balance sheets and income statements for the most recently ended
month in accordance with Section 6.2, and such other updated financial
information as Bank may reasonably request;
 
(p) current Compliance Certificate in accordance with Section 6.2;
 
(q) a Collateral Information Certificate;
 
(r) an Automatic Loan Payment Authorization;
 
(s) a subordination agreement executed by Adept Technology Holdings, Inc.; and
 
(t) such other documents or certificates, and completion of such other matters,
as Bank may reasonably deem necessary or appropriate.
 
3.2 Conditions Precedent to all Credit Extensions.  The obligation of Bank to
make each Credit Extension, including the initial Credit Extension, is further
subject to the following conditions:
 
(a) timely receipt by Bank of the Payment/Advance Form as provided in Section
2.1; and
 
 
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(b) the representations and warranties contained in Article 5 shall be true and
correct in all material respects on and as of the date of such Payment/Advance
Form and on the effective date of each Credit Extension as though made at and as
of each such date, and no Event of Default shall have occurred and be
continuing, or would exist after giving effect to such Credit Extension
(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).  The making of each Credit Extension shall be deemed
to be a representation and warranty by Borrower on the date of such Credit
Extension as to the accuracy of the facts referred to in this Section 3.2.
 
4.  
CREATION OF SECURITY INTEREST.

 
4.1 Grant of Security Interest.  Borrower grants and pledges to Bank a
continuing security interest in the Collateral to secure prompt repayment of any
and all Obligations and to secure prompt performance by Borrower of each of its
covenants and duties under the Loan Documents.  Except as set forth in the
Schedule, such security interest constitutes a valid, first priority security
interest in the presently existing Collateral, and will constitute a valid,
first priority security interest in later-acquired Collateral.  Borrower also
hereby agrees not to sell, transfer, assign, mortgage, pledge, lease, grant a
security interest in, or encumber any of its Intellectual Property, except in
connection with Permitted Liens and Permitted Transfers.  Notwithstanding any
termination of this Agreement, Bank’s Lien on the Collateral shall remain in
effect for so long as any Obligations are outstanding (other than inchoate
indemnity obligations).
 
4.2 Perfection of Security Interest.  Borrower authorizes Bank to file at any
time financing statements, continuation statements, and amendments thereto that
(i) either specifically describe the Collateral or describe the Collateral as
all assets of Borrower of the kind pledged hereunder, and (ii) contain any other
information required by the Code for the sufficiency of filing office acceptance
of any financing statement, continuation statement, or amendment, including
whether Borrower is an organization, the type of organization and any
organizational identification number issued to Borrower, if applicable.  Any
such financing statements may be filed by Bank at any time in any jurisdiction
whether or not Division 9 of the Code is then in effect in that
jurisdiction.  Borrower shall from time to time endorse and deliver to Bank, at
the request of Bank, all Negotiable Collateral with a value of over Two Hundred
Fifty Thousand Dollars ($250,000) and other documents that Bank may reasonably
request, in form satisfactory to Bank, to perfect and continue perfection of
Bank’s security interests in the Collateral and in order to fully consummate all
of the transactions contemplated under the Loan Documents.  Borrower shall have
possession of the Collateral, except where expressly otherwise provided in this
Agreement or where Bank chooses to perfect its security interest by possession
in addition to the filing of a financing statement; provided, however, Bank
shall not elect to perfect its security interests by possession unless (A) Bank
shall deem, in its sole but reasonable discretion, that possession is necessary
to maintain its first priority perfected security interest in such Collateral,
or (B) an Event of Default has occurred and is continuing.  Where Collateral
located in the United States or Canada is in possession of a third party bailee,
Borrower shall take such steps as Bank reasonably requests for Bank to (i) to
obtain an acknowledgment, in form and substance reasonably satisfactory to Bank,
of the bailee of any Collateral with an aggregate book value in excess of
$250,000 per location, that the bailee holds such Collateral for the benefit of
Bank; provided, however, the aggregate book value of all Collateral not covered
by such an acknowledgment shall not exceed $500,000 at any time, and (ii) obtain
“control” of any Collateral consisting of (a) investment property, deposit
accounts, securities accounts, and (b) letter-of-credit rights or electronic
chattel paper with a value of over Two Hundred Fifty Thousand Dollars ($250,000)
(as such items and the term “control” are defined in Division 9 of the Code) by
causing the securities intermediary or depositary institution or issuing bank to
execute a control agreement in form and substance satisfactory to
Bank.  Borrower will not create any chattel paper without placing a legend on
the chattel paper acceptable to Bank indicating that Bank has a security
interest in the chattel paper.  Borrower from time to time may deposit with Bank
specific cash collateral to secure specific Obligations; Borrower authorizes
Bank to hold such specific balances in pledge and to decline to honor any drafts
thereon or any request by Borrower or any other Person to pay or otherwise
transfer any part of such balances for so long as the specific Obligations
(other than inchoate indemnity obligations) are outstanding.
 
4.3 Right to Inspect.  Bank (through any of its officers, employees, or agents)
shall have the right, upon reasonable prior notice, from time to time during
Borrower’s usual business hours but no more than twice a year, unless an Event
of Default has occurred and is continuing, to inspect Borrower’s Books and to
make copies thereof and to check, test, and appraise the Collateral in order to
verify Borrower’s financial condition or the amount, condition of, or any other
matter relating to, the Collateral.
 
 
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4.4 Shares. Borrower hereby pledges, assigns and grants to Bank a security
interest in all the Shares, together with all proceeds and substitutions
thereof, all cash, stock and other moneys and property paid thereon, all rights
to subscribe for securities declared or granted in connection therewith, and all
other cash and noncash proceeds of the foregoing, as security for the
performance of the Obligations.  The certificate or certificates for the Shares,
as applicable, will be delivered to Bank within fourteen (14) days after the
Closing Date, accompanied by an instrument of assignment duly executed in blank
by Borrower.  Notwithstanding the foregoing, Borrower shall not be required to
deliver to Bank certificates for the Shares of Adept Technology Canada Holding
Co. or Adept Technology Canada Co., provided that such companies are dissolved
within one year after the Closing Date. If Adept Technology Canada Holding Co.
or Adept Technology Canada Co. are not dissolved within one year after the
Closing Date, Borrower shall deliver to Bank the original certificates for the
Shares of the existing company(ies) within one week after the one year
anniversary of the Closing Date. To the extent required by the terms and
conditions governing the Shares, Borrower shall cause the books of each entity
whose Shares are part of the Collateral and any transfer agent to reflect the
pledge of the Shares.  Upon the occurrence and during the continuance of an
Event of Default hereunder, Bank may effect the transfer of any securities
included in the Collateral into the name of Bank and cause new certificates
representing such securities to be issued in the name of Bank or its
transferee.  Borrower will, from time to time upon Bank’s request, execute and
deliver such documents, and take or cause to be taken such actions, as Bank may
reasonably request to perfect or continue the perfection of Bank’s security
interest in the Shares and securities constituting Collateral.  Unless an Event
of Default shall have occurred and be continuing, and Bank elects to exercise
such rights, Borrower shall be entitled to exercise any voting rights with
respect to the Shares or other securities and to give consents, waivers and
ratifications in respect thereof, provided that no vote shall be cast or
consent, waiver or ratification given or action taken which would be
inconsistent with any of the terms of this Agreement or which would constitute
or create any violation of any of such terms.  All such rights to vote and give
consents, waivers and ratifications shall terminate upon the occurrence and
continuance of an Event of Default.
 
5.  
REPRESENTATIONS AND WARRANTIES.

 
Borrower represents and warrants as follows:
 
5.1 Due Organization and Qualification.  Borrower and each Subsidiary is an
entity duly existing under the laws of the jurisdiction in which it is organized
and qualified and licensed to do business in any state in which the conduct of
its business or its ownership of property requires that it be so qualified,
except where the failure to do so could not reasonably be expected to cause a
Material Adverse Effect.
 
5.2 Due Authorization; No Conflict.  The execution, delivery, and performance of
the Loan Documents are within Borrower’s powers, have been duly authorized, and
are not in conflict with nor constitute a breach of any provision contained in
Borrower’s organizational documents, nor will they constitute an event of
default under any material agreement by which Borrower is bound.  Borrower is
not in default under any agreement by which it is bound, except to the extent
such default would not reasonably be expected to cause a Material Adverse
Effect.
 
5.3 Collateral.  Borrower has rights in or the power to transfer the Collateral,
and its title to the Collateral is free and clear of Liens, adverse claims, and
restrictions on transfer or pledge except for Permitted Liens.  All Collateral
is located solely in the Collateral States.  The Eligible Accounts and Eligible
Foreign Subsidiary Accounts are bona fide existing obligations.  The property or
services giving rise to such Eligible Accounts and Eligible Foreign Subsidiary
Accounts has been delivered or rendered to the account debtor or its agent for
immediate shipment to and unconditional acceptance by the account
debtor.  Borrower has not received notice of actual or imminent Insolvency
Proceeding of any account debtor whose accounts are included in any Borrowing
Base Certificate as an Eligible Account or Eligible Foreign Subsidiary Accounts.
No licenses or agreements giving rise to such Eligible Accounts or Eligible
Foreign Subsidiary Accounts is with any Prohibited Territory or with any Person
organized under or doing business in a Prohibited Territory.  All Inventory is
in all material respects of good and merchantable quality, free from all
material defects, except for Inventory for which adequate reserves have been
made.  Except as set forth in the Schedule, none of the Collateral consisting of
Cash, deposit accounts, investment accounts, certificated securities, documents,
instruments, chattel paper, investment property or Letter-of-Credit Rights is
maintained or invested with a Person other than Bank or Bank’s Affiliates.
 
 
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5.4 Intellectual Property.  Borrower is the sole owner of the Intellectual
Property, except for licenses granted by Borrower to its customers in the
ordinary course of business.  To Borrower’s knowledge, each of the Copyrights,
Trademarks and Patents is valid and enforceable, and no part of the Intellectual
Property has been judged invalid or unenforceable, in whole or in part, and no
claim has been made to Borrower that any part of the Intellectual Property
violates the rights of any third party except to the extent such invalidity,
unenforceability or claim could not reasonably be expected to cause a Material
Adverse Effect.
 
5.5 Name; Location of Chief Executive Office; Location of Inventory and
Equipment.  Except as disclosed in the Schedule, Borrower has not done business
under any name other than that specified on the signature page hereof, and its
exact legal name is as set forth in the first paragraph of this Agreement.  The
chief executive office of Borrower is located in the Chief Executive Office
State at the address indicated in Section 10 hereof.  All inventory and
Equipment of Borrower, other than demo inventory and Equipment of Borrower with
an aggregate value of not more than Five Hundred Thousand Dollars ($500,000) is
located (a) in the United States of America or Canada at the addresses indicated
in Section 10 hereof, as set forth in the Schedule or at such locations
communicated by Borrower to Bank in writing per Section 7.10 or (b) in the
foreign jurisdictions set forth in the Schedule.
 
5.6 Actions, Suits, Litigation, or Proceedings.  Except as set forth in the
Schedule, there are no actions, suits, litigation or proceedings, at law or in
equity, pending by or against Borrower or any Subsidiary before any court,
administrative agency, or arbitrator in which a likely adverse decision could
reasonably be expected to have a Material Adverse Effect.
 
5.7 No Material Adverse Change in Financial Statements.  All consolidated and
consolidating financial statements related to Borrower and any Subsidiary that
are delivered by Borrower to Bank fairly present in all material respects
Borrower’s consolidated and consolidating financial condition as of the date
thereof and Borrower’s consolidated and consolidating results of operations for
the period then ended.  There has not been a material adverse change in the
consolidated or in the consolidating financial condition of Borrower since the
date of the most recent of such financial statements submitted to Bank.
 
5.8 Solvency, Payment of Debts.  Borrower is able to pay its debts (including
trade debts) as they mature; the fair saleable value of Borrower’s assets
exceeds the fair value of its liabilities; and Borrower is not left with
unreasonably small capital after the transactions contemplated by this
Agreement.
 
5.9 Compliance with Laws and Regulations.  To the extent applicable, Borrower
and each Subsidiary have met the minimum funding requirements of ERISA with
respect to any employee benefit plans subject to ERISA.  No event has occurred
resulting from Borrower’s failure to comply with ERISA that is reasonably likely
to result in Borrower’s incurring any liability that could reasonably be
expected to have a Material Adverse Effect.  Borrower is not an “investment
company” or a company “controlled” by an “investment company” within the meaning
of the Investment Company Act of 1940.  Borrower is not engaged principally, or
as one of the important activities, in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of
Regulations T, U, and X of the Board of Governors of the Federal Reserve
System).  Borrower has complied in all material respects with all the provisions
of the Federal Fair Labor Standards Act.  Borrower is in compliance with all
environmental laws, regulations and ordinances except where the failure to
comply is not reasonably likely to have a Material Adverse Effect.  Borrower has
not violated any statutes, laws, ordinances or rules applicable to it, the
violation of which could reasonably be expected to have a Material Adverse
Effect.  Borrower and each Subsidiary have filed or caused to be filed all tax
returns required to be filed, and have paid, or have made adequate provision for
the payment of, all taxes reflected therein except those being contested in good
faith with adequate reserves under GAAP or where the failure to file such
returns or pay such taxes could not reasonably be expected to have a Material
Adverse Effect.
 
5.10 Subsidiaries.  Borrower does not own any stock, partnership interest or
other equity securities of any Person, except for Permitted Investments and
except as set forth on the Schedule.
 
5.11 Government Consents.  Borrower and each Subsidiary have obtained all
consents, approvals and authorizations of, made all declarations or filings
with, and given all notices to, all governmental authorities that are necessary
for the continued operation of Borrower’s business as currently conducted,
except where the failure to do so would not reasonably be expected to cause a
Material Adverse Effect.
 
 
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5.12 Inbound Licenses.  Except as disclosed on the Schedule, Borrower is not a
party to, nor is bound by, any material inbound license agreement (other than
licenses of open source, off-the-shelf or over-the-counter software that is
commercially available or available to the public), the failure, breach, or
termination of which could reasonably be expected to cause a Material Adverse
Effect, or that prohibits or otherwise restricts Borrower from granting a
security interest in Borrower’s interest in such license agreement or any other
property.
 
5.13 Full Disclosure.  No representation, warranty or other statement made by
Borrower in any certificate or written statement furnished to Bank taken
together with all such certificates and written statements furnished to Bank
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained in such certificates or
statements not misleading, it being recognized by Bank that the projections and
forecasts provided by Borrower in good faith and based upon reasonable
assumptions are not to be viewed as facts and that actual results during the
period or periods covered by any such projections and forecasts may differ from
the projected or forecasted results.
 
5.14 Shares.  Borrower has full power and authority to create a first priority
lien on the Shares and no disability or contractual obligation exists that would
prohibit Borrower from pledging the Shares pursuant to this Agreement.  There
are no subscriptions, warrants, rights of first refusal or other restrictions
on, or options exercisable with respect to the Shares.  The Shares have been and
will be duly authorized and validly issued, and are fully paid and
non-assessable.  To Borrower’s knowledge, the Shares are not the subject of any
present or threatened suit, action, arbitration, administrative or other
proceeding, and Borrower knows of no reasonable grounds for the institution of
any such proceedings.
 
6.  
AFFIRMATIVE COVENANTS.

 
Borrower covenants that, until payment in full of all outstanding Obligations
(other than inchoate indemnity obligations), and for so long as Bank may have
any commitment to make a Credit Extension hereunder, Borrower shall do all of
the following:
 
6.1 Good Standing and Government Compliance.  Borrower shall maintain its
organizational existence and good standing in the Borrower State, shall maintain
its and each of its Subsidiaries’ qualification and good standing in each other
jurisdiction in which the failure to so qualify could reasonably be expected to
have a Material Adverse Effect, and shall furnish to Bank the organizational
identification number issued to Borrower by the authorities of the jurisdiction
in which Borrower is organized, if applicable.  To the extent applicable,
Borrower shall meet, and shall cause each Subsidiary to meet, the minimum
funding requirements of ERISA with respect to any employee benefit plans subject
to ERISA.  Borrower shall comply with all applicable Environmental Laws, and
maintain all material permits, licenses and approvals required thereunder,
except where the failure to comply with which or the loss of which could not
reasonably be expected to have a Material Adverse Effect.  Borrower shall
comply, and shall cause each Subsidiary to comply, with all statutes, laws,
ordinances and government rules and regulations to which it is subject, and
shall maintain, and shall cause each of its Subsidiaries to maintain, in force
all licenses, approvals and agreements, the loss of which or failure to comply
with which would reasonably be expected to have a Material Adverse Effect.
 
6.2 Financial Statements, Reports, Certificates.  Borrower shall deliver to
Bank:  (i) as soon as available, but in any event within thirty (30) days after
the end of each calendar month, a company prepared consolidated balance sheet
and income statement covering Borrower’s and its consolidated Subsidiaries’
operations during such period, prepared in accordance with GAAP (subject to
normal year-end adjustments and without all required footnotes), and in a form
reasonably acceptable to Bank and certified by a Responsible Officer; (ii) as
soon as available, but in any event within forty five (45) days after the end of
each fiscal quarter, a company prepared consolidated and consolidating balance
sheet and income statement covering Borrower’s and its consolidated
Subsidiaries’ operations during such period, prepared in accordance with GAAP
(subject to normal year-end adjustments and without all required footnotes), in
the same form as the most recent financial statements with respect to Borrower
and its consolidated Subsidiaries delivered to Bank and certified by a
Responsible Officer; (iii) as soon as available, but in any event within ninety
(90) days after the end of Borrower’s fiscal year, audited consolidated and
unaudited consolidating financial statements of Borrower prepared in accordance
with GAAP, consistently applied, and in the same form as the most recent
financial statements with respect to Borrower and its consolidated Subsidiaries
delivered to Bank, together with, for the audited consolidated financial
statements only, an opinion which is unqualified (including no going concern
comment or qualification) or otherwise consented to in writing by Bank on such
financial statements of an independent certified public accounting firm
reasonably acceptable to Bank, which includes, as of the Closing Date, the
accounting firm of Armanino LLP; provided, however, that Bank may, in its
reasonable business judgment, deem such firm unacceptable after the Closing
Date; (iii) if applicable, copies of all statements, reports and notices sent or
made available generally by Borrower to its security holders or to any holders
of Subordinated Debt and all reports on Forms 10-K and 10-Q filed with the
Securities and Exchange Commission; (iv) promptly upon receipt of notice
thereof, a report of any legal actions pending or threatened in writing against
Borrower or any Subsidiary that could result in damages or costs to Borrower or
any Subsidiary of Five Hundred Thousand Dollars ($500,000) or more; (v) promptly
upon receipt, each management letter prepared by Borrower’s independent
certified public accounting firm regarding Borrower’s management control
systems; (vi) as soon as available, but in any event not later than July 31 of
each year, Borrower’s financial and business projections and budget for the then
current or immediately following year, as applicable, with evidence of approval
thereof by Borrower’s board of directors; (vii) such other budgets, sales
projections, operating plans, financial exhibits or other information generally
prepared by Borrower in the ordinary course of business as Bank may reasonably
request from time to time; and (viii) (A) simultaneously with the delivery of
the financial statements required under clause (iii) (unless an Event of Default
has occurred and is continuing, in which case, upon demand by Bank), a report
signed by Borrower, in form reasonably acceptable to Bank, listing any
applications or registrations that Borrower has made or filed in respect of any
Patents, Copyrights or Trademarks and the status of any outstanding applications
or registrations, as well as any material change in Borrower’s Intellectual
Property.
 
 
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(a) Within thirty (30) days after the last day of each month, Borrower shall
deliver to Bank a Borrowing Base Certificate signed by a Responsible Officer in
substantially the form of Exhibit D hereto, together with aged listings by
invoice date of accounts receivable and accounts payable.
 
(b) Within thirty (30) days after the last day of each month, Borrower shall
deliver to Bank with the monthly financial statements a Compliance Certificate
certified as of the last day of the applicable month and signed by a Responsible
Officer in substantially the form of Exhibit E hereto.
 
(c) Promptly, and in any event within three (3) Business Days after, becoming
aware of the occurrence or existence of an Event of Default hereunder, a written
statement of a Responsible Officer setting forth details of the Event of
Default, and the action which Borrower has taken or proposes to take with
respect thereto.
 
(d) Bank shall have a right from time to time hereafter to audit Borrower’s
Accounts and appraise Collateral at Borrower’s expense, provided that (i) such
audits will be conducted no more often than every six (6) months unless an Event
of Default has occurred and is continuing, and (ii) Borrower shall not be
required to reimburse Bank for any Collateral appraisals unless an Event of
Default has occurred and is continuing.
 
Borrower may deliver to Bank on an electronic basis any certificates, reports or
information required pursuant to this Section 6.2, and Bank shall be entitled to
rely on the information contained in the electronic files, provided that Bank in
good faith believes that the files were delivered by a Responsible Officer.  If
Borrower delivers this information electronically, it shall also deliver to Bank
by U.S. Mail, reputable overnight courier service, hand delivery, facsimile or
.pdf file within five (5) Business Days of submission of the unsigned electronic
copy the certification of monthly financial statements, the intellectual
property report, the Borrowing Base Certificate and the Compliance Certificate,
each bearing the physical signature of the Responsible Officer.
 
6.3 Inventory; Returns.  Borrower shall keep all Inventory in good and
merchantable condition, free from all material defects except for Inventory for
which adequate reserves have been made.  Returns and allowances, if any, as
between Borrower and its account debtors shall be on the same basis and in
accordance with the customary practices of Borrower, as determined from time to
time in Borrower’s reasonable business judgment based on customary industry
practices.  Borrower shall promptly notify Bank of all returns (including
without limit, recoveries initiated by Borrower) and of all customer disputes
and claims involving more than Five Hundred Thousand Dollars ($500,000).
 
 
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6.4 Taxes.  Borrower shall make, and cause each Subsidiary to make, due and
timely payment or deposit of all material federal, state, and local taxes,
assessments, or contributions required of it by law, including, but not limited
to, those laws concerning income taxes, F.I.C.A., F.U.T.A. and state disability,
and will execute and deliver to Bank, promptly upon demand, and in any event
within three (3) Business Days of demand, proof reasonably satisfactory to Bank
indicating that Borrower or a Subsidiary has made such payments or deposits and
any appropriate certificates attesting to the payment or deposit thereof;
provided that Borrower or a Subsidiary need not make any payment if the amount
or validity of such payment is contested in good faith by appropriate
proceedings and is reserved against (to the extent required by GAAP) by
Borrower.
 
6.5 Insurance.
 
(a) Borrower, at its expense, shall keep the Collateral insured against loss or
damage by fire, theft, explosion, sprinklers, and all other hazards and risks,
and in such amounts, as ordinarily insured against by other owners in similar
businesses conducted in the locations where Borrower’s business is conducted on
the date hereof.  Borrower shall also maintain liability and other insurance in
amounts and of a type that are customary to businesses similar to Borrower’s.
 
(b) All such policies of insurance shall be in such form, with such companies,
and in such amounts as reasonably satisfactory to Bank.  All policies of
property insurance shall contain a lender’s loss payable endorsement, in a form
satisfactory to Bank, showing Bank as an additional loss payee, and all
liability insurance policies shall show Bank as an additional insured and
specify that the insurer must give at least twenty (20) days notice to Bank
before canceling its policy for any reason.  Upon Bank’s request, Borrower shall
deliver to Bank certified copies of the policies of insurance and evidence of
all premium payments.  If no Event of Default has occurred and is continuing,
proceeds payable under any casualty policy will, at Borrower’s option, be
payable to Borrower to replace the property subject to the claim, provided that
any such replacement property shall be deemed Collateral in which Bank has been
granted a first priority security interest.  If an Event of Default has occurred
and is continuing, all proceeds payable under any such policy shall, at Bank’s
option, be payable to Bank to be applied on account of the Obligations.
 
6.6 Accounts.  Except as set forth below, Borrower shall maintain, and cause its
Domestic Subsidiaries to maintain, all of their respective depository, operating
and primary investment accounts with Bank.  Borrower shall maintain a balance of
Cash at Bank of not less One Million Dollars ($1,000,000) at all times.
Notwithstanding the foregoing, (a) Borrower and its Subsidiaries shall be
permitted to maintain foreign depository, operating and investment accounts
outside of Bank with aggregate balances not  to exceed Two Million Dollars
($2,000,000) at the end of each month, (b) Borrower’s Domestic Subsidiaries
shall be permitted to maintain accounts with financial institutions other than
Bank in states where such Domestic Subsidiaries have operations and where Bank
does not have a physical office, provided that the aggregate balance of all such
accounts shall not exceed Two Hundred Fifty Thousand Dollars ($250,000) at any
time (c) Borrower may maintain the SVB Cash Collateral Account, the balance of
which shall not exceed One Hundred Thousand Dollars ($100,000) at any time,
until December 9, 2014, at which time the SVB Cash Collateral Account shall be
closed and the balance transferred to Borrower’s account at Bank, and (d) until
January 3, 2015 (“Account Closing Date”), Borrower and its Domestic Subsidiaries
shall be permitted to maintain accounts with Silicon Valley Bank (“SVB”) and
Wells Fargo Bank (“WFB”), provided that (1) prior to the initial Advance
executed control agreements (in form and substance reasonably acceptable to
Bank) covering Borrower’s accounts at SVB and WFB have been delivered to Bank
and (2) every first and third Friday of each month, the balance of such accounts
in excess of Five Hundred Dollars ($500) shall be transferred to Borrower’s
account at Bank.  Except as otherwise permitted under clauses (b) and (c) above
and subject to the terms of clause (b), on the Account Closing Date, all of
Borrower’s accounts at SVB and WFB shall be closed and the balances of such
accounts transferred to Borrower’s account at Bank.
 
6.7 Financial Covenants.  Borrower shall maintain the following financial
ratio(s) and covenant(s):
 
(a) EBITDA Loss.  An EBITDA loss of not greater than (a) ($500,000) for any
fiscal quarter of Borrower, and (b) ($1,000,000) for the twelve-month periods
ending June 30, 2014 and June 30, 2015.
 
6.8 Registration of Intellectual Property Rights.
 
 
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(a) Borrower shall register or cause to be registered (to the extent not already
registered) with the United States Patent and Trademark Office or the United
States Copyright Office, as the case may be, those registrable intellectual
property rights now owned or hereafter developed or acquired by Borrower, to the
extent that Borrower, in its reasonable business judgment, deems it appropriate
to so protect such intellectual property rights.
 
(b) On a monthly basis, Borrower shall give Bank written notice of any
applications or registrations of intellectual property rights filed with the
United States Patent and Trademark Office and United States Copyright Office,
including the date of such filing and the registration or application numbers,
if any.
 
(c) On a monthly basis, Borrower shall give Bank written notice of the filing of
any applications or registrations with the United States Copyright Office,
including the title of such intellectual property rights to be registered, as
such title will appear on such applications or registrations, and the date such
applications or registrations will be filed.
 
(d) Borrower shall (i) subject to Borrower’s reasonable business judgment or
upon the request of Bank, protect, defend and maintain the validity and
enforceability of any material Trademarks, Patents, Copyrights, and trade
secrets, (ii) use commercially reasonable efforts to detect infringements of any
material Trademarks, Patents and Copyrights and promptly advise Bank in writing
of material infringements of any material Trademarks, Patents and Copyrights
detected by Borrower, and (iii) subject to Borrower’s reasonable business
judgment, not allow any material Trademarks, Patents or Copyrights to be
abandoned, forfeited or dedicated to the public without the written consent of
Bank, which consent shall not be unreasonably withheld.
 
6.9 Inbound License Agreements. Within thirty (30) days after the end of each
fiscal quarter of Borrower, with respect to any material inbound license
agreement (other than licenses of open source, off-the-shelf or over-the-counter
software that is commercially available or available to the public) entered into
during the immediately preceding quarter, Borrower shall provide to Bank a list
of the material terms of each such license agreement.
 
6.10 Further Assurances.  At any time and from time to time Borrower shall
execute and deliver such further instruments and take such further action as may
reasonably be requested by Bank to effect the purposes of this Agreement.
 
6.11 Creation/Acquisition of Subsidiaries. In the event Borrower or any of its
Subsidiaries creates or acquires any Subsidiary after the Closing Date, Borrower
shall, and shall cause each such Subsidiary to (a) promptly notify Bank of the
creation or acquisition of such new Subsidiary, (b) if such new Subsidiary is,
or at any time becomes, a Material Domestic Subsidiary, take all such action as
may be reasonably required by Bank to cause such Material Domestic Subsidiary to
(i) guaranty the Obligations and (ii) grant Bank a first priority perfected
security interest in all of its assets to secure the Obligations, and (c) grant
and pledge to Bank a perfected security interest in the stock, units or other
evidence of ownership of each such new Subsidiary (not to exceed 65% of the
equity securities of any Material Foreign Subsidiary).
 
6.12 Post-Closing Items.  Using commercially reasonable efforts, within sixty
(60) days after the Closing Date, Borrower shall deliver, or cause to be
delivered to Bank, for (a) each collateral location or warehouse location of
Borrower located in the United States of America, or (b) any Collateral location
not owned by Borrower and located in the United States of America, where
Collateral with a book value in excess of $250,000 is located, a landlord
subordination agreement, collateral access agreement or bailment waiver,
executed by the landlord, warehouseman or bailee of such location, as
applicable, together with a copy of the lease, warehouse or bailment agreement
for each such location, as applicable.  Notwithstanding the foregoing, and
subject to Borrower using commercially reasonable efforts, the aggregate book
value of Collateral at all locations not covered by a landlord agreement, lien
subordination agreement, collateral access agreement or bailment agreement, as
applicable, shall not exceed $500,000.
 
7.  
NEGATIVE COVENANTS.

 
Borrower covenants and agrees that, so long as any credit hereunder shall be
available and until the outstanding Obligations (other than inchoate indemnity
obligations) are paid in full or for so long as Bank may have any commitment to
make any Credit Extensions, Borrower will not do any of the following without
Bank’s prior written consent:
 
 
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7.1 Dispositions.  Convey, sell, lease, license, transfer or otherwise dispose
of (collectively, to “Transfer”), or permit any of its Subsidiaries to Transfer,
all or any part of its business or property, or subject to Section 6.6 of the
Agreement, move cash balances on deposit with Bank to accounts opened at another
financial institution, other than Permitted Transfers.
 
7.2 Change in Name, Location, Executive Office, or Executive Management; Change
in Business; Change in Fiscal Year; Change in Control.  Change its name or the
Borrower State without thirty (30) days prior written notice to Bank; relocate
its chief executive office without fifteen (15) days prior written notice to
Bank; replace its chief executive officer or chief financial officer without
written notification to Bank as soon as possible, but in any event, within three
(3) Business Days after such replacement; engage in any business, or permit any
of its Subsidiaries to engage in any business, other than or reasonably related
or incidental to the businesses currently engaged in by Borrower; change its
fiscal year end; or have a Change in Control that results in the directors that
constitute the Board of Directors of Borrower as of the Closing Date to hold
less than a majority of the seats of the Board of Directors of Borrower.
 
7.3 Mergers or Acquisitions.  Merge or consolidate, or permit any of its
Subsidiaries to merge or consolidate, with or into any other business
organization (other than mergers or consolidations of a Subsidiary into another
Subsidiary or into Borrower), or acquire, or permit any of its Subsidiaries to
acquire, all or substantially all of the capital stock or property of another
Person, or enter into any agreement to do any of the same, except where (i) the
consideration for such transaction shall consist of stock, or other equity
interests of Borrower, (ii) such transaction does not result in a Change in
Control, (iii) the Person being acquired is in the same or complimentary line of
business as Borrower, (iv) after giving effect to such transaction, Borrower is
in pro forma compliance with the financial covenants set forth in this
Agreement, (v) no Event of Default has occurred, is continuing or would exist
after giving effect to such transaction, and (vi) if a merger, Borrower is the
surviving entity, and if an equity interest acquisition, the Person so acquired
shall become a wholly-owned direct Subsidiary of Borrower and Borrower shall
cause such acquired Person to comply with Section 6.11 hereof.
 
7.4 Indebtedness.  Create, incur, assume, guarantee or be or remain liable with
respect to any Indebtedness, or permit any Subsidiary so to do, other than
Permitted Indebtedness, or prepay any Indebtedness or take any actions which
impose on Borrower an obligation to prepay any Indebtedness, except Indebtedness
to Bank.
 
7.5 Encumbrances.  Create, incur, assume or allow any Lien with respect to any
of its property, or assign or otherwise convey any right to receive income,
including the sale of any Accounts, or permit any of its Subsidiaries so to do,
except for Permitted Liens, or covenant to any other Person that Borrower in the
future will refrain from creating, incurring, assuming or allowing any Lien with
respect to any of Borrower’s property.
 
7.6 Distributions.  Pay any dividends or make any other distribution or payment
on account of or in redemption, retirement or purchase of any capital stock,
except that Borrower may (i) repurchase the stock of current or former employees
and directors (including their heirs and estates) pursuant to stock repurchase
agreements as long as an Event of Default does not exist prior to such
repurchase or would not exist after giving effect to such repurchase, (ii)
repurchase the stock of current or former employees pursuant to stock repurchase
agreements by the cancellation of indebtedness owed by such current or former
employees to Borrower regardless of whether an Event of Default exists, (iii)
pay dividends solely in common stock provided that such payment shall not result
in a Change in Control, (iv) convert any of its convertible securities into
other securities pursuant to the terms of such convertible securities or
otherwise in exchange thereof, provided that such conversion shall not result in
a Change in Control, or (v) pay income taxes for restricted stock awards
surrendered to satisfy tax obligations of current or former employees of
Borrower in an aggregate amount not to exceed Two Hundred Fifty Thousand Dollars
($250,000) per year.
 
7.7 Investments.  Directly or indirectly acquire or own, or make any Investment
in or to any Person, or permit any of its Subsidiaries to do so, other than
Permitted Investments, or, except as expressly permitted under Section 6.6 of
this Agreement, maintain or invest any of its property with a Person other than
Bank or Bank’s Affiliates or permit any Subsidiary to do so unless such Person
has entered into a control agreement with Bank, in form and substance
satisfactory to Bank, or suffer or permit any Subsidiary to be a party to, or be
bound by, an agreement that restricts such Subsidiary from paying dividends or
otherwise distributing property to Borrower other than restrictions (a) set
forth in any Loan Document, (b) by reason of customary provisions restricting
assignments, subletting or other transfers contained in leases, licenses, joint
venture agreements and similar agreements entered into in the ordinary course of
business, (c) by reason of customary provisions restricting assignments of other
contracts, (d) that are or were created by virtue of any transfer or agreement
to transfer or option or right with respect to any property, assets or capital
stock not otherwise prohibited under this Agreement, (e) restrictions existing
in any agreement in effect at the time such Subsidiary becomes a Subsidiary of
Borrower, so long as such agreement was not entered into in contemplation of
such person becoming a Subsidiary, (f) customary provisions in partnership
agreements, limited liability company organizational governance documents, or
similar agreements entered into in the ordinary course of business that restrict
the transfer of ownership interests in such partnership, limited liability
company or similar Person, and (g) restrictions on cash or other deposits or net
worth imposed by suppliers or landlords under contracts entered into in the
ordinary course of business, except in favor of Bank. Further, Borrower shall
not enter into any license or agreement with any Prohibited Territory or with
any Person organized under or doing business in a Prohibited Territory.
 
 
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7.8 Transactions with Affiliates.  Directly or indirectly enter into or permit
to exist any material transaction with any Affiliate of Borrower except for (a)
transactions that are in the ordinary course of Borrower’s business, upon fair
and reasonable terms that are no less favorable to Borrower than would be
obtained in an arm’s length transaction with a non-affiliated Person, or (b)
transactions between Borrower and any of its Subsidiaries, pursuant to which
Borrower performs certain services for such Subsidiary, or such Subsidiary
performs certain services for Borrower, in consideration of a fee equal to the
actual operational cost plus a mark-up.  Notwithstanding the foregoing, the
following shall not be prohibited under this Section: (i) Permitted Investments,
dividends, distributions and stock redemptions, purchases and retirements, in
each case that are expressly permitted under the terms of this Agreement, (ii)
Permitted Transfers, (iii) the offer and sale or issuance of capital stock or
other securities (including debt securities, but only to the extent that such
Indebtedness constitutes Permitted Indebtedness) to Affiliates, provided that no
Change of Control would occur as a result of such offer, sale or issuance, (iv)
customary fees paid to non-officer directors of Borrower or any Subsidiary, (v)
customary indemnities provided to directors of Borrower or any Subsidiary, (vi)
customary compensation paid to officers of Borrower or any Subsidiary, and (vii)
transactions disclosed on the Schedule.
 
7.9 Subordinated Debt.  Make any payment in respect of any Subordinated Debt, or
permit any of its Subsidiaries to make any such payment, except in compliance
with the terms of such Subordinated Debt and the terms of the subordination
agreement with Bank relating to such Subordinated Debt, or amend any provision
of any document evidencing such Subordinated Debt, except in compliance with the
terms of the subordination agreement relating to such Subordinated Debt, or
amend any provision affecting Bank’s rights contained in any documentation
relating to the Subordinated Debt without Bank’s prior written consent.
 
7.10 Inventory and Equipment.  Store the Inventory or the Equipment having an
aggregate book value in excess of $250,000 with a bailee, warehouseman, or
similar third party unless the third party has been notified of Bank’s security
interest and, if the Inventory or Equipment is located in the United States of
America, Bank (a) has received an acknowledgment from the third party that it is
holding or will hold the Inventory or Equipment for Bank’s benefit or (b) is in
possession of the warehouse receipt, where negotiable, covering such Inventory
or Equipment; provided, however, that the aggregate book value of all Equipment
and Inventory store with a bailee, warehouseman, or similar third party and
located in the United States of America not subject to the foregoing
requirements shall not exceed Five Hundred Thousand Dollars ($500,000) at any
time.  Except for Inventory sold in the ordinary course of business and except
for such other locations as Bank may approve in writing, Borrower shall keep the
Inventory and Equipment, other than Equipment and Inventory in transit between
locations expressly permitted under this Section 7.10, only at the location set
forth in Section 10, the current Schedule, and such other locations of which
Borrower gives Bank prior written notice.
 
7.11 No Investment Company; Margin Regulation.  Become or be controlled by an
“investment company,” within the meaning of the Investment Company Act of 1940,
or become principally engaged in, or undertake as one of its important
activities, the business of extending credit for the purpose of purchasing or
carrying margin stock, or use the proceeds of any Credit Extension for such
purpose.
 
7.12 Capital Expenditures.  Make or incur Capital Expenditures in excess of One
Million Dollars ($1,000,000), in aggregate, in any fiscal year.
 
 
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8.  
EVENTS OF DEFAULT.

 
Any one or more of the following events shall constitute an Event of Default by
Borrower under this Agreement:
 
8.1 Payment Default.  If Borrower fails to pay any of the Obligations when due;
 
8.2 Covenant Default.
 
(a) If Borrower fails to perform any obligation under Section 6.2, 6.4, 6.5,
6.6, 6.7, 6.10, 6.11 or 6.12, or violates any of the covenants contained in
Article 7 of this Agreement;
 
(b) If Borrower fails or neglects to perform any obligation under Section 6.1,
6.3, 6.8 or 6.9 and has failed to cure such default within ten (10) days after
the earlier to occur of (i) Borrower’s receipt of notice thereof or (ii) the
date any officer of Borrower becomes aware thereof; however during such cure
period no Credit Extensions will be made; or
 
(c) If Borrower fails or neglects to perform or observe any other material term,
provision, condition, covenant contained in this Agreement, in any of the Loan
Documents, or in any other present or future agreement between Borrower and Bank
and as to any default under such other term, provision, condition or covenant
that can be cured, has failed to cure such default within fifteen (15) days
after Borrower receives notice thereof or any officer of Borrower becomes aware
thereof; provided, however, that if the default cannot by its nature be cured
within the fifteen (15) day period or cannot after diligent attempts by Borrower
be cured within such fifteen (15) day period, and such default is likely to be
cured within a reasonable time, then Borrower shall have an additional
reasonable period (which shall not in any case exceed thirty (30) days) to
attempt to cure such default, so long as Borrower continues to diligently
attempt to cure such default, and within such reasonable time period the failure
to have cured such default shall not be deemed an Event of Default but no Credit
Extensions will be made;
 
8.3 Material Adverse Change.  If there occurs any circumstance or circumstances
that could reasonably be expected to have a Material Adverse Effect;
 
8.4 Attachment.  If any material portion of Borrower’s and/or any of its
Subsidiaries’ assets is attached, seized, subjected to a writ or distress
warrant, or is levied upon, or comes into the possession of any trustee,
receiver or person acting in a similar capacity and such attachment, seizure,
writ or distress warrant or levy has not been removed, discharged or rescinded
within five (5) days, or if Borrower and/or any of its Subsidiaries is enjoined,
restrained, or in any way prevented by court order from continuing to conduct
all or any material part of its business affairs, or if a judgment or other
claim becomes a lien or encumbrance upon any material portion of Borrower’s
and/or any of its Subsidiaries’ assets, or if a notice of lien, levy, or
assessment is filed of record with respect to any of Borrower’s and/or any of
its Subsidiaries’ assets by the United States Government, or any department,
agency, or instrumentality thereof, or by any state, county, municipal, or
governmental agency, and the same is not paid within five (5) days after
Borrower and/or any of its Subsidiaries  receives notice thereof, provided that
none of the foregoing shall constitute an Event of Default where such action or
event is stayed or an adequate bond has been posted pending a good faith contest
by Borrower and/or any of its Subsidiaries (provided that no Credit Extensions
will be made during such cure period);
 
8.5 Insolvency.  If Borrower and/or any of its Subsidiaries becomes insolvent,
or if an Insolvency Proceeding is commenced by Borrower and/or any of its
Subsidiaries, or if an Insolvency Proceeding is commenced against Borrower
and/or any of its Subsidiaries and is not dismissed or stayed within thirty (30)
days (provided that no Credit Extensions will be made prior to the dismissal of
such Insolvency Proceeding);
 
8.6 Other Agreements.  If there is a default or other failure to perform in any
agreement to which Borrower and/or any of its Subsidiaries is a party with a
third party or parties resulting in a right by such third party or parties,
whether or not exercised, to accelerate the maturity of any Indebtedness in an
amount in excess of Five Hundred Thousand Dollars ($500,000) or that would
reasonably be expected to have a Material Adverse Effect;
 
 
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8.7 Subordinated Debt.  If Borrower and/or any of its Subsidiaries makes any
payment on account of Subordinated Debt, except to the extent the payment is
allowed under any subordination agreement entered into with Bank;
 
8.8 Judgments; Settlements.  If one or more (a) judgments, orders, decrees or
arbitration awards requiring the Borrower and/or its Subsidiaries to pay an
aggregate amount of Seven Hundred Fifty Thousand Dollars ($750,000) or greater
(not covered by a solvent independent third party insurance carrier as to which
liability has been unconditionally accepted by such insurance carrier) shall be
rendered against Borrower and/or any of its Subsidiaries  and the same shall not
have been vacated or stayed within ten (10) days thereafter (provided that no
Credit Extensions will be made prior to such matter being vacated or stayed); or
(b) settlements is agreed upon by Borrower and/or its Subsidiaries for the
payment by Borrower and/or its Subsidiaries of an aggregate amount of Seven
Hundred Fifty Thousand Dollars ($750,000) or greater or that could reasonably be
expected to have a Material Adverse Effect; or
 
8.9 Misrepresentations.  If any material misrepresentation or material
misstatement exists now or hereafter in any warranty or representation set forth
herein or in any certificate delivered to Bank by any Responsible Officer
pursuant to this Agreement or to induce Bank to enter into this Agreement or any
other Loan Document.
 
8.10 Guaranty.  If any guaranty of all or a portion of the Obligations (a
“Guaranty) ceases for any reason to be in full force and effect, or any
guarantor fails to perform any obligation under any Guaranty or a security
agreement securing any Guaranty (collectively, the “Guaranty Documents”), or any
event of default occurs under any Guaranty Document or any guarantor revokes or
purports to revoke a Guaranty, or any material misrepresentation or material
misstatement exists now or hereafter in any warranty or representation set forth
in any Guaranty Document or in any certificate delivered to Bank in connection
with any Guaranty Document, or if any of the circumstances described in Sections
8.3 through 8.9 occur with respect to any guarantor.
 
9.  
BANK’S RIGHTS AND REMEDIES.

 
9.1 Rights and Remedies.  Upon the occurrence and during the continuance of an
Event of Default, Bank may, at its election, without notice of its election and
without demand, do any one or more of the following, all of which are authorized
by Borrower:
 
(a) Declare all Obligations, whether evidenced by this Agreement, by any of the
other Loan Documents, or otherwise, immediately due and payable (provided that
upon the occurrence of an Event of Default described in Section 8.5
(insolvency), all Obligations shall become immediately due and payable without
any action by Bank);
 
(b) Demand that Borrower  (i) deposit cash with Bank in an amount equal to the
amount of any Letters of Credit remaining undrawn, outstanding Credit Card
Services and/or outstanding  Foreign Exchange Contracts, as collateral security
for the repayment of any future drawings under such Letters of Credit,
outstanding Credit Card Services and/or outstanding  Foreign Exchange Contracts,
and (ii) pay in advance all Letter of Credit fees scheduled to be paid or
payable over the remaining term of the Letters of Credit, Credit Card Services
fees and/or Foreign Exchange Contracts fees, and Borrower shall promptly deposit
and pay such amounts;
 
(c) Cease advancing money or extending credit to or for the benefit of Borrower
under this Agreement or under any other agreement between Borrower and Bank;
 
(d) Settle or adjust disputes and claims directly with account debtors for
amounts, upon terms and in whatever order that Bank reasonably considers
advisable;
 
(e) Make such payments and do such acts as Bank considers necessary or
reasonable to protect its security interest in the Collateral.  Borrower agrees
to assemble the Collateral if Bank so requires, and to make the Collateral
available to Bank as Bank may designate.  Following the occurrence of an Event
of Default, Bank may engage foreign counsel, at Borrower’s expense, and Borrower
shall take all actions that Bank shall require, to perfect Bank’s security
interests in the Shares of Foreign Subsidiaries.  Borrower authorizes Bank to
enter the premises where the Collateral is located, to take and maintain
possession of the Collateral, or any part of it, and to pay, purchase, contest,
or compromise any encumbrance, charge, or lien which in Bank’s determination
appears to be prior or superior to its security interest and to pay all expenses
incurred in connection therewith.  With respect to any of Borrower’s owned
premises, Borrower hereby grants Bank a license to enter into possession of such
premises and to occupy the same, without charge, in order to exercise any of
Bank’s rights or remedies provided herein, at law, in equity, or otherwise;
 
 
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(f) Set off and apply to the Obligations any and all (i) balances and deposits
of Borrower held by Bank, and (ii) indebtedness at any time owing to or for the
credit or the account of Borrower held by Bank;
 
(g) Ship, reclaim, recover, store, finish, maintain, repair, prepare for sale,
advertise for sale, and sell (in the manner provided for herein) the
Collateral.  Bank is hereby granted a license or other right, solely pursuant to
the provisions of this Section 9.1, to use, without charge, Borrower’s labels,
patents, copyrights, rights of use of any name, trade secrets, trade names,
trademarks, service marks, and advertising matter, or any property of a similar
nature, as it pertains to the Collateral, in completing production of,
advertising for sale, and selling any Collateral and, in connection with Bank’s
exercise of its rights under this Section 9.1, Borrower’s rights under all
licenses and all franchise agreements shall inure to Bank’s benefit;
 
(h) Sell the Collateral at either a public or private sale, or both, by way of
one or more contracts or transactions, for cash or on terms, in such manner and
at such places (including Borrower’s premises) as Bank determines is
commercially reasonable, and apply any proceeds to the Obligations in whatever
manner or order Bank deems appropriate.  Bank may sell the Collateral without
giving any warranties as to the Collateral.  Bank may specifically disclaim any
warranties of title or the like.  This procedure will not be considered
adversely to affect the commercial reasonableness of any sale of the
Collateral.  If Bank sells any of the Collateral upon credit, Borrower will be
credited only with payments actually made by the purchaser, received by Bank,
and applied to the indebtedness of the purchaser.  If the purchaser fails to pay
for the Collateral, Bank may resell the Collateral and Borrower shall be
credited with the proceeds of the sale;
 
(i) Bank may credit bid and purchase at any public sale;
 
(j) Apply for the appointment of a receiver, trustee, liquidator or conservator
of the Collateral, without notice and without regard to the adequacy of the
security for the Obligations and without regard to the solvency of Borrower, any
guarantor or any other Person liable for any of the Obligations; and
 
(k) Any deficiency that exists after disposition of the Collateral as provided
above will be paid immediately by Borrower.
 
Bank may comply with any applicable state or federal law requirements in
connection with a disposition of the Collateral and compliance will not be
considered adversely to affect the commercial reasonableness of any sale of the
Collateral.
 
9.2 Power of Attorney.  Effective only upon the occurrence and during the
continuance of an Event of Default, Borrower hereby irrevocably appoints Bank
(and any of Bank’s designated officers, or employees) as Borrower’s true and
lawful attorney to:  (a) send requests for verification of Accounts or notify
account debtors of Bank’s security interest in the Accounts; (b) endorse
Borrower’s name on any checks or other forms of payment or security that may
come into Bank’s possession; (c) sign Borrower’s name on any invoice or bill of
lading relating to any Account, drafts against account debtors, schedules and
assignments of Accounts, verifications of Accounts, and notices to account
debtors; (d) dispose of any Collateral; (e) make, settle, and adjust all claims
under and decisions with respect to Borrower’s policies of insurance; (f) settle
and adjust disputes and claims respecting the accounts directly with account
debtors, for amounts and upon terms which Bank determines to be reasonable; and
(g) file, in its sole discretion, one or more financing or continuation
statements and amendments thereto, relative to any of the Collateral without the
signature of Borrower where permitted by law; provided Bank may exercise such
power of attorney to sign the name of Borrower on any of the documents described
in clause (g) above, regardless of whether an Event of Default has
occurred.  The appointment of Bank as Borrower’s attorney in fact, and each and
every one of Bank’s rights and powers, being coupled with an interest, is
irrevocable until all of the Obligations (other than inchoate indemnity
obligations) have been fully repaid and performed and Bank’s obligation to
provide advances hereunder is terminated.
 
 
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9.3 Accounts Collection.  At any time after the occurrence and during the
continuation of an Event of Default, Bank may notify any Person owing funds to
Borrower of Bank’s security interest in such funds and verify the amount of such
Account.  Borrower shall collect all amounts owing to Borrower for Bank, receive
in trust all payments as Bank’s trustee, and immediately deliver such payments
to Bank in their original form as received from the account debtor, with proper
endorsements for deposit.
 
9.4 Bank Expenses.  If Borrower fails to pay any amounts or furnish any required
proof of payment due to third persons or entities, as required under the terms
of this Agreement, then Bank may do any or all of the following after reasonable
notice to Borrower:  (a) make payment of the same or any part thereof; (b) set
up such reserves under the Revolving Line as Bank deems necessary to protect
Bank from the exposure created by such failure; or (c) obtain and maintain
insurance policies of the type discussed in Section 6.5 of this Agreement, and
take any action with respect to such policies as Bank deems prudent.  Any
amounts so paid or deposited by Bank shall constitute Bank Expenses, shall be
immediately due and payable, and shall bear interest at the then applicable rate
hereinabove provided, and shall be secured by the Collateral.  Any payments made
by Bank shall not constitute an agreement by Bank to make similar payments in
the future or a waiver by Bank of any Event of Default under this Agreement.
 
9.5 Bank’s Liability for Collateral.  Bank has no obligation to clean up or
otherwise prepare the Collateral for sale.  All risk of loss, damage or
destruction of the Collateral shall be borne by Borrower.
 
9.6 No Obligation to Pursue Others.  Bank has no obligation to attempt to
satisfy the Obligations by collecting them from any other Person liable for them
and Bank may release, modify or waive any collateral provided by any other
Person to secure any of the Obligations, all without affecting Bank’s rights
against Borrower.  Borrower waives any right it may have to require Bank to
pursue any other Person for any of the Obligations.
 
9.7 Remedies Cumulative.  Bank’s rights and remedies under this Agreement, the
Loan Documents, and all other agreements shall be cumulative.  Bank shall have
all other rights and remedies not inconsistent herewith as provided under the
Code, by law, or in equity.  No exercise by Bank of one right or remedy shall be
deemed an election, and no waiver by Bank of any Event of Default on Borrower’s
part shall be deemed a continuing waiver.  No delay by Bank shall constitute a
waiver, election, or acquiescence by it.  No waiver by Bank shall be effective
unless made in a written document signed on behalf of Bank and then shall be
effective only in the specific instance and for the specific purpose for which
it was given.  Borrower expressly agrees that this Section 9.7 may not be waived
or modified by Bank by course of performance, conduct, estoppel or otherwise.
 
9.8 Demand; Protest.  Except as otherwise provided in this Agreement, Borrower
waives demand, protest, notice of protest, notice of default or dishonor, notice
of payment and nonpayment and any other notices relating to the Obligations.
 
10.  
NOTICES.

 
Unless otherwise provided in this Agreement, all notices or demands by any party
relating to this Agreement or any other agreement entered into in connection
herewith shall be in writing and (except for financial statements and other
informational documents which may be sent by first-class mail, postage prepaid)
shall be personally delivered or sent by a recognized overnight delivery
service, certified mail, postage prepaid, return receipt requested, email or by
telefacsimile to Borrower or to Bank, as the case may be, at its addresses set
forth below:
 

  If to Borrower:
Adept Technology, Inc.
5960 Inglewood Drive
Pleasanton, CA 94588
Attn: _______________
FAX: (____) _______________

 
 
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  If to Bank:
Comerica Bank
M/C 7578
39200 Six Mile Rd.
Livonia, MI 48152
Attn: National Documentation Services
        with a copy to:
Comerica Bank
226 Airport Parkway
Suite 100
San Jose, CA 95110
Attn: Sharon Shelton Feigelson

 
The parties hereto may change the address at which they are to receive notices
hereunder, by notice in writing in the foregoing manner given to the other.
 
11.  
CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

 
This Agreement shall be governed by, and construed in accordance with, the
internal laws of the State of California, without regard to principles of
conflicts of law.  Each of Borrower and Bank hereby submits to the exclusive
jurisdiction of the State and Federal courts located in the State of
California.  THE UNDERSIGNED ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED UNDER CERTAIN CIRCUMSTANCES.  TO
THE EXTENT PERMITTED BY LAW, EACH PARTY, AFTER CONSULTING (OR HAVING HAD THE
OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS, HIS OR HER CHOICE, KNOWINGLY AND
VOLUNTARILY, AND FOR THE MUTUAL BENEFIT OF ALL PARTIES, WAIVES ANY RIGHT TO
TRIAL BY JURY IN THE EVENT OF LITIGATION ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR ANY OTHER DOCUMENT, INSTRUMENT OR AGREEMENT BETWEEN THE UNDERSIGNED
PARTIES.
 
12.  
REFERENCE PROVISION.

 
12.1 In the event the Jury Trial Waiver set forth above is not enforceable, the
parties elect to proceed under this Judicial Reference Provision.
 
12.2 With the exception of the items specified in Section 12.3, below, any
controversy, dispute or claim (each, a “Claim”) between the parties arising out
of or relating to this Agreement or any other document, instrument or agreement
between the undersigned parties (collectively in this Section, the “Comerica
Documents”), will be resolved by a reference proceeding in California in
accordance with the provisions of Sections 638 et seq. of the California Code of
Civil Procedure (“CCP”), or their successor sections, which shall constitute the
exclusive remedy for the resolution of any Claim, including whether the Claim is
subject to the reference proceeding. Except as otherwise provided in the
Comerica Documents, venue for the reference proceeding will be in the Superior
Court in the County where the real property involved in the action, if any, is
located or in a County where venue is otherwise appropriate under applicable law
(the “Court”).
 
12.3 The matters that shall not be subject to a reference are the following: (i)
foreclosure of any security interests in real or personal property, (ii)
exercise of self-help remedies (including, without limitation, set-off), (iii)
appointment of a receiver and (iv) temporary, provisional or ancillary remedies
(including, without limitation, writs of attachment, writs of possession,
temporary restraining orders or preliminary injunctions). This Agreement does
not limit the right of any party to exercise or oppose any of the rights and
remedies described in clauses (i) and (ii) or to seek or oppose from a court of
competent jurisdiction any of the items described in clauses (iii) and (iv). The
exercise of, or opposition to, any of those items does not waive the right of
any party to a reference pursuant to this Agreement.
 
12.4 The referee shall be a retired Judge or Justice selected by mutual written
agreement of the parties. If the parties do not agree within ten (10) days of a
written request to do so by any party, then, upon request of any party, the
referee shall be selected by the Presiding Judge of the Court (or his or her
representative). A request for appointment of a referee may be heard on an ex
parte or expedited basis, and the parties agree that irreparable harm would
result if ex parte relief is not granted.
 
 
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12.5 The parties agree that time is of the essence in conducting the reference
proceedings. Accordingly, the referee shall be requested, subject to change in
the time periods specified herein for good cause shown, to (i) set the matter
for a status and trial-setting conference within fifteen (15) days after the
date of selection of the referee, (ii) if practicable, try all issues of law or
fact within one hundred twenty (120) days after the date of the conference and
(iii) report a statement of decision within twenty (20) days after the matter
has been submitted for decision.
 
12.6 The referee will have power to expand or limit the amount and duration of
discovery.  The referee may set or extend discovery deadlines or cutoffs for
good cause, including a party’s failure to provide requested discovery for any
reason whatsoever. Unless otherwise ordered based upon good cause shown, no
party shall be entitled to “priority” in conducting discovery, depositions may
be taken by either party upon seven (7) days written notice, and all other
discovery shall be responded to within fifteen (15) days after service. All
disputes relating to discovery which cannot be resolved by the parties shall be
submitted to the referee whose decision shall be final and binding.
 
12.7 Except as expressly set forth in this Agreement, the referee shall
determine the manner in which the reference proceeding is conducted including
the time and place of hearings, the order of presentation of evidence, and all
other questions that arise with respect to the course of the reference
proceeding. All proceedings and hearings conducted before the referee, except
for trial, shall be conducted without a court reporter, except that when any
party so requests, a court reporter will be used at any hearing conducted before
the referee, and the referee will be provided a courtesy copy of the transcript.
The party making such a request shall have the obligation to arrange for and pay
the court reporter. Subject to the referee’s power to award costs to the
prevailing party, the parties will equally share the cost of the referee and the
court reporter at trial.
 
12.8 The referee shall be required to determine all issues in accordance with
existing case law and the statutory laws of the State of California. The rules
of evidence applicable to proceedings at law in the State of California will be
applicable to the reference proceeding. The referee shall be empowered to enter
equitable as well as legal relief, enter equitable orders that will be binding
on the parties and rule on any motion which would be authorized in a court
proceeding, including without limitation motions for summary judgment or summary
adjudication. The referee shall issue a decision at the close of the reference
proceeding which disposes of all claims of the parties that are the subject of
the reference.  Pursuant to CCP § 644, such decision shall be entered by the
Court as a judgment or an order in the same manner as if the action had been
tried by the Court and any such decision will be final, binding and
conclusive.  The parties reserve the right to appeal from the final judgment or
order or from any appealable decision or order entered by the referee.  The
parties reserve the right to findings of fact, conclusions of laws, a written
statement of decision, and the right to move for a new trial or a different
judgment, which new trial, if granted, is also to be a reference proceeding
under this provision.
 
12.9 If the enabling legislation which provides for appointment of a referee is
repealed (and no successor statute is enacted), any dispute between the parties
that would otherwise be determined by reference procedure will be resolved and
determined by arbitration.   The arbitration will be conducted by a retired
judge or Justice, in accordance with the California Arbitration Act §1280
through §1294.2 of the CCP as amended from time to time. The limitations with
respect to discovery set forth above shall apply to any such arbitration
proceeding.
 
12.10 THE PARTIES RECOGNIZE AND AGREE THAT ALL CONTROVERSIES, DISPUTES AND
CLAIMS RESOLVED UNDER THIS REFERENCE PROVISION WILL BE DECIDED BY A REFEREE AND
NOT BY A JURY. AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH
COUNSEL OF ITS, HIS OR HER OWN CHOICE, EACH PARTY KNOWINGLY AND VOLUNTARILY, AND
FOR THE MUTUAL BENEFIT OF ALL PARTIES, AGREES THAT THIS REFERENCE PROVISION WILL
APPLY TO ANY CONTROVERSY, DISPUTE OR CLAIM BETWEEN OR AMONG THEM ARISING OUT OF
OR IN ANY WAY RELATED TO, THIS AGREEMENT OR THE OTHER COMERICA DOCUMENTS.
 
13.  
GENERAL PROVISIONS.

 
 
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13.1 Successors and Assigns.  This Agreement shall bind and inure to the benefit
of the respective successors and permitted assigns of each of the parties and
shall bind all persons who become bound as a debtor to this Agreement; provided,
however, that neither this Agreement nor any rights hereunder may be assigned by
Borrower without Bank’s prior written consent, which consent may be granted or
withheld in Bank’s sole discretion.  Bank shall have the right without the
consent of or notice to Borrower to sell, transfer, negotiate, or grant
participation in all or any part of, or any interest in, Bank’s obligations,
rights and benefits hereunder.
 
13.2 Indemnification.  Borrower shall defend, indemnify and hold harmless Bank
and its officers, employees, and agents against:  (a) all obligations, demands,
claims, and liabilities claimed or asserted by any other party in connection
with the transactions contemplated by this Agreement and/or the Loan Documents;
and (b) all losses or Bank Expenses in any way suffered, incurred, or paid by
Bank, its officers, employees and agents as a result of or in any way arising
out of, following, or consequential to transactions between Bank and Borrower
whether under this Agreement, or otherwise (including without limitation
reasonable attorneys fees and expenses), except for losses caused by Bank’s
gross negligence or willful misconduct.
 
13.3 Time of Essence.  Time is of the essence for the performance of all
obligations set forth in this Agreement.
 
13.4 Severability of Provisions.  Each provision of this Agreement shall be
severable from every other provision of this Agreement for the purpose of
determining the legal enforceability of any specific provision.
 
13.5 Correction of Loan Documents.  Bank may correct patent errors and fill in
any blanks in this Agreement and the other Loan Documents consistent with the
agreement of the parties.
 
13.6 Amendments in Writing, Integration.  All amendments to or terminations of
this Agreement or the other Loan Documents must be in writing signed by the
parties.  All prior agreements, understandings, representations, warranties, and
negotiations between the parties hereto with respect to the subject matter of
this Agreement and the other Loan Documents, if any, are merged into this
Agreement and the Loan Documents.
 
13.7 Counterparts.  This Agreement may be executed in any number of counterparts
and by different parties on separate counterparts, each of which, when executed
and delivered, shall be deemed to be an original, and all of which, when taken
together, shall constitute but one and the same Agreement.
 
13.8 Survival.  All covenants, representations and warranties made in this
Agreement shall continue in full force and effect so long as any Obligations
(other than inchoate indemnity obligations) remain outstanding or Bank has any
obligation to make any Credit Extension to Borrower.  The obligations of
Borrower to indemnify Bank with respect to the expenses, damages, losses, costs
and liabilities described in Section 13.2 shall survive until all applicable
statute of limitations periods with respect to actions that may be brought
against Bank have run.
 
13.9 Confidentiality.  In handling any confidential information, Bank and all
employees and agents of Bank shall exercise the same degree of care that Bank
exercises with respect to its own proprietary information of the same types to
maintain the confidentiality of any non-public information thereby received or
received pursuant to this Agreement except that disclosure of such information
may be made (i) to the parent, subsidiaries, or Affiliates and service providers
of Bank, (ii) to prospective transferees, participants, or purchasers of any
interest in the Obligations, (iii) as required by law, regulations, rule or
order, subpoena, judicial order or similar order, (iv) as may be required in
connection with the examination, audit or similar investigation of Bank, (v) to
Bank’s accountants, auditors and regulators, and (vi) as Bank may determine in
connection with the enforcement of any remedies hereunder.  Confidential
information hereunder shall not include information that either:  (a) is in the
public domain or in the knowledge or possession of Bank when disclosed to Bank,
or becomes part of the public domain after disclosure to Bank through no fault
of Bank; or (b) is disclosed to Bank by a third party, provided Bank does not
have actual knowledge that such third party is prohibited from disclosing such
information.
 
[signatures on following page]
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first above written.
 

  ADEPT TECHNOLOGY, INC.               By:           Name:           Title:    
            COMERICA BANK               By:           Name:           Title:  

 

 
 
 
[Signature Page to Loan and Security Agreement (3417523)]
 
 

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EXHIBIT A
 
DEFINITIONS
 
“Accounts” means all presently existing and hereafter arising accounts, contract
rights, payment intangibles and all other forms of obligations owing to Borrower
arising out of the sale or lease of goods (including, without limitation, the
licensing of software and other technology) or the rendering of services by
Borrower and any and all credit insurance, guaranties, and other security
therefor, as well as all merchandise returned to or reclaimed by Borrower and
Borrower’s Books relating to any of the foregoing.
 
“Advance” or “Advances” means a cash advance or cash advances under the
Revolving Line.
 
“Affiliate” means, with respect to any Person, any Person that owns or controls
directly or indirectly such Person, any Person that controls or is controlled by
or is under common control with such Person, and each of such Person’s senior
executive officers, directors, and partners.
 
“Bank Expenses” means all costs or expenses of Bank, or any other holder or
owner of the Loan Documents (including, without limit, documented court costs,
legal expenses and reasonable attorneys’ fees and expenses, whether generated
in-house or by outside counsel, whether or not suit is instituted, and, if suit
is instituted, whether at trial court level, appellate court level, in a
bankruptcy, probate or administrative proceeding or otherwise) incurred in
connection with the preparation, negotiation, execution, delivery, amendment,
administration, and performance, or incurred in collecting, attempting to
collect under the Loan Documents or the Obligations, or incurred in defending
the Loan Documents, or incurred in any other matter or proceeding relating to
the Loan Documents or the Obligations;  and reasonable Collateral audit fees.
 
“Borrower State” means Delaware, the state under whose laws Borrower is
organized.
 
“Borrower’s Books” means all of Borrower’s books and records
including:  ledgers; records concerning Borrower’s assets or liabilities, the
Collateral, business operations or financial condition; and all computer
programs, or tape files, and the equipment, containing such information.
 
“Borrowing Base” means an amount equal to the sum of eighty percent (80%) of
Eligible Accounts, plus, eighty percent (80%) of Eligible Foreign Subsidiary
Accounts, as determined by Bank with reference to the most recent Borrowing Base
Certificate delivered by Borrower.  Notwithstanding the foregoing, Bank reserves
the right, to adjust the advance percentages set forth above based on
information received from field audits (including without limit the Initial
Audit) or other information received by Bank that could negatively impact (with
such negative impact to be determined by Bank in good faith and using its
reasonable business judgment) the value or collectability of any Eligible
Account or Eligible Foreign Subsidiary Account.
 
“Business Day” means any day that is not a Saturday, Sunday, or other day on
which banks in the State of California are authorized or required to close.
 
“Capital Expenditures” means current period cash expenditures that are amortized
over a period of time greater than one year in accordance with GAAP.
 
“Cash” means unrestricted cash and cash equivalents.
 
“Change in Control” shall mean any transaction or series of related transactions
in which any “person” or “group” (within the meaning of Section 13(d) and
14(d)(2) of the Securities Exchange Act of 1934) becomes the “beneficial owner”
(as defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly
or indirectly, on a fully diluted basis, of a sufficient number of shares of all
classes of stock then outstanding of Borrower ordinarily entitled to vote in the
election of directors, empowering such “person” or “group” to elect a majority
of the Board of Directors of Borrower, who did not have such power before such
transaction.
 
“Chief Executive Office State” means California, where Borrower’s chief
executive office is located.
 
 
Exhibit A - Page 1

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“Closing Date” means the date of this Agreement.
 
“Code” means the California Uniform Commercial Code as amended or supplemented
from time to time.
 
“Collateral” means the property described on Exhibit B attached hereto and all
Negotiable Collateral to the extent not described on Exhibit B, except to the
extent any such property (i) is nonassignable by its terms without the consent
of the licensor thereof or another party (but only to the extent such
prohibition on transfer is enforceable under applicable law, including, without
limitation, Sections 9406 and 9408 of the Code), (ii) the granting of a security
interest therein is contrary to applicable law, provided that upon the cessation
of any such restriction or prohibition, such property shall automatically become
part of the Collateral, or (iii) constitutes the capital stock of a controlled
foreign corporation (as defined in the IRC), in excess of sixty five percent
(65%) of the voting power of all classes of capital stock of such controlled
foreign corporations entitled to vote.
 
“Collateral State” means the state or states where the Collateral is located,
which is California, New Hampshire, Vermont and the United Kingdom, France,
Germany, Italy, Singapore and China.
 
“Consolidated Net Income (or Deficit)” means the consolidated net income (or
deficit) of any Person and its Subsidiaries, after deduction of all expenses,
taxes, and other proper charges, determined in accordance with GAAP, after
eliminating therefrom all extraordinary nonrecurring items of income.
 
“Consolidated Total Interest Expense” means with respect to any Person for any
period, the aggregate amount of interest required to be paid or accrued by a
Person and its Subsidiaries during such period on all Indebtedness of such
Person and its Subsidiaries outstanding during all or any part of such period,
whether such interest was or is required to be reflected as an item of expense
or capitalized, including payments consisting of interest in respect of any
capitalized lease or any synthetic lease, and including commitment fees, agency
fees, facility fees, balance deficiency fees and similar fees or expenses in
connection with the borrowing of money.
 
“Contingent Obligation” means, as applied to any Person, any direct or indirect
liability, contingent or otherwise, of that Person with respect to (i) any
indebtedness, lease, dividend, letter of credit or other obligation of another,
including, without limitation, any such obligation directly or indirectly
guaranteed, endorsed, co-made or discounted or sold with recourse by that
Person, or in respect of which that Person is otherwise directly or indirectly
liable; (ii) any obligations with respect to undrawn letters of credit,
corporate credit cards or merchant services issued for the account of that
Person; and (iii) all obligations arising under any interest rate, currency or
commodity swap agreement, interest rate cap agreement, interest rate collar
agreement, or other agreement or arrangement designed to protect a Person
against fluctuation in interest rates, currency exchange rates or commodity
prices; provided, however, that the term “Contingent Obligation” shall not
include endorsements for collection or deposit in the ordinary course of
business.  The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determined amount of the primary obligation in
respect of which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof as
determined by such Person in good faith; provided, however, that such amount
shall not in any event exceed the maximum amount of the obligations under the
guarantee or other support arrangement.
 
“Copyrights” means any and all copyright rights, copyright applications,
copyright registrations and like protections in each work or authorship and
derivative work thereof, whether published or unpublished and whether or not the
same also constitutes a trade secret, now or hereafter existing, created,
acquired or held.
 
“Credit Card Services Sublimit” means a sublimit for corporate credit cards and
e-commerce or merchant account services under the Revolving Line not to exceed
Five Hundred Thousand Dollars ($500,000).
 
“Credit Extension” means each Advance or any other extension of credit by Bank
to or for the benefit of Borrower hereunder.
 
“Domestic Subsidiary” means any Subsidiary incorporated or organized under the
laws of the United States of America, or any state or other political
subdivision thereof or which is considered to be a “disregarded entity” for
United States federal income tax purposes and which is not a “controlled foreign
corporation” as defined under Section 957 of the Internal Revenue Code, in each
case provided such Subsidiary is owned by Borrower, a Domestic Subsidiary of
Borrower or a guarantor incorporated or organized under the laws of the United
States of America, or any state or other political subdivision thereof.
 
 
Exhibit A - Page 2

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“EBITDA” means with respect to any fiscal period an amount equal to the sum of
(a) Consolidated Net Income of the Borrower and its Subsidiaries for such fiscal
period, plus (b) in each case to the extent deducted in the calculation of the
Borrower’s Consolidated Net Income and without duplication, (i) depreciation and
amortization for such period, plus (ii) income tax expense for such period, plus
(iii) Consolidated Total Interest Expense paid or accrued during such period,
plus (iv) non-cash expense associated with granting stock options, plus, (v) all
non-cash adjustments for goodwill and intangible impairment for such period, all
as determined in accordance with GAAP.
 
“Eligible Accounts” means those Accounts that arise in the ordinary course of
Borrower’s business that comply with all of Borrower’s representations and
warranties to Bank set forth in Section 5.3; provided, that Bank may change the
standards of eligibility based on information received by Bank that could
negatively impact (with such negative impact to be determined by Bank in good
faith and using its reasonable business judgment) the value or collectability of
any Eligible Account. Unless otherwise agreed to by Bank, Eligible Accounts
shall not include the following:
 
(a) Accounts that the account debtor has failed to pay in full within one
hundred twenty (120) days of invoice date;
 
(b) Credit balances over one hundred twenty (120) days;
 
(c) Accounts with respect to an account debtor, twenty-five percent (25%) of
whose Accounts the account debtor has failed to pay within one hundred twenty
(120) days of invoice date;
 
(d) Accounts with respect to an account debtor, including Subsidiaries and
Affiliates, whose total obligations to Borrower and all Foreign Subsidiaries, or
any of them, exceed twenty percent (20%) of all Accounts and Foreign Subsidiary
Accounts, to the extent such obligations exceed the aforementioned percentage,
except as approved in writing by Bank;
 
(e) Accounts with respect to which the account debtor does not have its
principal place of business in the United States, except for Eligible Foreign
Accounts;
 
(f) Accounts with respect to which the account debtor is the United States or
any department, agency, or instrumentality of the United States, except for
Accounts of the United States if the payee has assigned its payment rights to
Bank and the assignment has been acknowledged under the Assignment of Claims Act
of 1940 (31 U.S.C. 3727);
 
(g) Accounts with respect to which Borrower is liable to the account debtor for
goods sold or services rendered by the account debtor to Borrower, but only to
the extent of any amounts owing to the account debtor against amounts owed to
Borrower;
 
(h) Accounts with respect to which goods are placed on consignment, guaranteed
sale, sale or return, sale on approval, bill and hold, demo or promotional, or
other terms by reason of which the payment by the account debtor may be
conditional;
 
(i) Accounts with respect to which the account debtor is an individual, officer,
employee, agent or Affiliate of Borrower or any Foreign Subsidiary;
 
(j) Accounts that have not yet been billed to the account debtor or that relate
to deposits (such as good faith deposits) or other property of the account
debtor held by Borrower for the performance of services or delivery of goods
which Borrower has not yet performed or delivered;
 
 
Exhibit A - Page 3

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(k) Accounts with respect to which the account debtor disputes liability or
makes any claim with respect thereto as to which Bank believes, in its sole
discretion, that there may be a basis for dispute (but only to the extent of the
amount subject to such dispute or claim), or is subject to any Insolvency
Proceeding, or becomes insolvent, or goes out of business;
 
(l) Accounts the collection of which Bank reasonably determines after inquiry
and consultation with Borrower to be doubtful; and
 
(m) Retentions and hold-backs.
 
“Eligible Foreign Accounts” means Accounts owing to Borrower or any of its
Domestic Subsidiaries with respect to which the account debtor does not have its
principal place of business in the United States and is not located in an OFAC
sanctioned country, and that is insured under a credit insurance policy
acceptable to Bank from an insurer acceptable to Bank, and which policy names
Bank as a loss payee and beneficiary.  An Account which is at any time an
Eligible Foreign Account, but which subsequently fails to meet any of the
foregoing requirements, shall forthwith cease to be an Eligible Foreign
Account.  For purposes of calculating the Borrowing Base Certificate, all
Eligible Foreign Accounts must be calculated in U.S. Dollars or Euros.
 
“Eligible Foreign Subsidiary Accounts” means those Foreign Subsidiary Accounts
that arise in the ordinary course of a Foreign Subsidiary’s business that comply
with all of Borrower’s representations and warranties to Bank set forth in
Section 5.3; provided, that Bank may change the standards of eligibility based
on information received by Bank that could negatively impact (with such negative
impact to be determined by Bank in good faith and using its reasonable business
judgment) the value or collectability of any Eligible Foreign Subsidiary
Account. For purposes of calculating the Borrowing Base Certificate, all
Eligible Foreign Subsidiary Accounts must be calculated in U.S. Dollars
or Euros. Unless otherwise agreed to by Bank, Eligible Foreign Subsidiary
Accounts shall not include the following:
 
(a) Foreign Subsidiary Accounts that the account debtor has failed to pay in
full within one hundred twenty (120) days of invoice date;
 
(b) Credit balances over one hundred twenty (120) days;
 
(c) Foreign Subsidiary Accounts with respect to an account debtor, twenty-five
percent (25%) of whose Foreign Subsidiary Accounts the account debtor has failed
to pay within one hundred twenty (120) days of invoice date;
 
(d) Foreign Subsidiary Accounts with respect to an account debtor, including
Subsidiaries and Affiliates, whose total obligations to Borrower and all Foreign
Subsidiaries, or any of them, exceed twenty percent (20%) of all Accounts and
Foreign Subsidiary Accounts, to the extent such obligations exceed the
aforementioned percentage, except as approved in writing by Bank;
 
(e) Foreign Subsidiary Accounts that are not insured under a credit insurance
policy acceptable to Bank from an insurer acceptable to Bank, and which policy
names Bank as a loss payee and beneficiary;
 
(f) Foreign Subsidiary Accounts with respect to which the account debtor is the
United States or any department, agency, or instrumentality of the United
States, except for Accounts of the United States if the payee has assigned its
payment rights to Bank and the assignment has been acknowledged under the
Assignment of Claims Act of 1940 (31 U.S.C. 3727);
 
(g) Foreign Subsidiary Accounts with respect to which the applicable Foreign
Subsidiary is liable to the account debtor for goods sold or services rendered
by the account debtor to such Foreign Subsidiary, but only to the extent of any
amounts owing to the account debtor against amounts owed to such Foreign
Subsidiary;
 
 
Exhibit A - Page 4

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(h) Foreign Subsidiary Accounts with respect to which goods are placed on
consignment, guaranteed sale, sale or return, sale on approval, bill and hold,
demo or promotional, or other terms by reason of which the payment by the
account debtor may be conditional;
 
(i) Foreign Subsidiary Accounts with respect to which the account debtor is an
individual, officer, employee, agent or Affiliate of Borrower or any Foreign
Subsidiary;
 
(j) Foreign Subsidiary Accounts that have not yet been billed to the account
debtor or that relate to deposits (such as good faith deposits) or other
property of the account debtor held by the applicable Foreign Subsidiary for the
performance of services or delivery of goods which such Foreign Subsidiary has
not yet performed or delivered;
 
(k) Foreign Subsidiary Accounts with respect to which the account debtor
disputes liability or makes any claim with respect thereto as to which Bank
believes, in its sole discretion, that there may be a basis for dispute (but
only to the extent of the amount subject to such dispute or claim), or is
subject to any Insolvency Proceeding, or becomes insolvent, or goes out of
business;
 
(l) Foreign Subsidiary Accounts the collection of which Bank reasonably
determines after inquiry and consultation with Borrower to be doubtful; and
 
(m) Retentions and hold-backs.
 
“Environmental Laws” means all laws, rules, regulations, orders and the like
issued by any federal, state, local foreign or other governmental or
quasi-governmental authority or any agency pertaining to the environment or to
any hazardous materials or wastes, toxic substances, flammable, explosive or
radioactive materials, asbestos or other similar materials.
 
“Equipment” means all present and future machinery, equipment, tenant
improvements, furniture, fixtures, vehicles, tools, parts and attachments in
which Borrower has any interest.
 
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and the regulations thereunder.
 
“Event of Default” has the meaning assigned in Article 8.
 
“Foreign Exchange Sublimit” means a sublimit for foreign exchange contracts
under the Revolving Line not to exceed Five Hundred Thousand Dollars ($500,000).
 
“Foreign Subsidiary” means a Subsidiary that is not a Domestic Subsidiary.
 
“Foreign Subsidiary Accounts” means all presently existing and hereafter arising
accounts, contract rights, payment intangibles and all other forms of
obligations owing to a Foreign Subsidiary arising out of the sale or lease of
goods (including, without limitation, the licensing of software and other
technology) or the rendering of services by a Foreign Subsidiary and any and all
credit insurance, guaranties, and other security therefor, as well as all
merchandise returned to or reclaimed by a Foreign Subsidiary and each Foreign
Subsidiary’s books relating to any of the foregoing.
 
“GAAP” means generally accepted accounting principles, consistently applied, as
in effect from time to time in the United States of America.
 
“Indebtedness” means (a) all indebtedness for borrowed money or the deferred
purchase price of property or services, including without limitation
reimbursement and other obligations with respect to surety bonds and letters of
credit, (b) all obligations evidenced by notes, bonds, debentures or similar
instruments, (c) all capital lease obligations, (d) all Contingent Obligations,
and (e) all obligations arising under the Credit Card Services Sublimit and the
Foreign Exchange Sublimit, if any.
 
 
Exhibit A - Page 5

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“Insolvency Proceeding” means any proceeding commenced by or against any Person
or entity under any provision of the United States Bankruptcy Code, as amended,
or under any other bankruptcy or insolvency law, including assignments for the
benefit of creditors, formal or informal moratoria, compositions, extension
generally with its creditors, or proceedings seeking reorganization,
arrangement, or other relief.
 
“Intellectual Property” means any Copyrights, Patents, Trademarks, servicemarks
and applications therefor, now owned or hereafter acquired, or any claims for
damages by way of any past, present and future infringement of any of the
foregoing.
 
“Inventory” means all present and future inventory in which Borrower has any
interest.
 
“Investment” means any beneficial ownership of (including stock, partnership or
limited liability company interest or other securities) any Person, or any loan,
advance or capital contribution to any Person.
 
“IRC” means the Internal Revenue Code of 1986, as amended, and the regulations
thereunder.
 
“Letter of Credit” means a commercial or standby letter of credit or similar
undertaking issued by Bank at Borrower’s request in accordance with Section
2.1(b)(iii).
 
“Letter of Credit Sublimit” means a sublimit for Letters of Credit under the
Revolving Line not to exceed One Hundred Thousand Dollars ($100,000).
 
“Lien” means any mortgage, lien, deed of trust, charge, pledge, security
interest or other encumbrance.
 
“Loan Documents” means, collectively, this Agreement, any note or notes executed
by Borrower, and any other document, instrument or agreement entered into in
connection with this Agreement, all as amended or extended from time to time.
 
“Material Adverse Effect” means (i) a material adverse change in Borrower’s
business or financial condition, (ii) a material impairment in the prospect of
repayment of all or any portion of the Obligations or in otherwise performing
Borrower’s obligations under the Loan Documents, or (iii) a material impairment
in the perfection, value or priority of Bank’s security interests in the
Collateral.
 
“Material Domestic Subsidiary” means, at any date of determination, any (a)
Domestic Subsidiary of the Borrower that individually has or (b) Domestic
Subsidiary of the Borrower that, when taken together with all other Domestic
Subsidiaries that are not Material Domestic Subsidiaries, in the aggregate has,
in either case, revenues, assets or earnings in an amount equal to at least 10%
of (i) the consolidated revenues of Borrower and its Subsidiaries for the most
recently completed fiscal quarter for which Bank has received financial
statements of the Borrower and its Subsidiaries pursuant to Section 6.2, (ii)
the consolidated assets of Borrower and its Subsidiaries as of the last day of
the most recently completed fiscal quarter for which Bank has received financial
statements of Borrower and its Subsidiaries pursuant to Section 6.2, or (iii)
the consolidated net earnings of the Borrower and its Subsidiaries for the most
recently completed fiscal quarter for which Bank has received financial
statements of the Borrower and its Subsidiaries pursuant to Section 6.2, in each
case determined in accordance with GAAP for such period.
 
“Material Foreign Subsidiary” means, at any date of determination, any (a)
Foreign Subsidiary of the Borrower that individually has or (b) Foreign
Subsidiary of the Borrower that, when taken together with all other Foreign
Subsidiaries that are not Material Foreign Subsidiaries, in the aggregate has,
in either case, revenues, assets or earnings in an amount equal to at least 10%
of (i) the consolidated revenues of Borrower and its Subsidiaries for the most
recently completed fiscal quarter for which Bank has received financial
statements of the Borrower and its Subsidiaries pursuant to Section 6.2, (ii)
the consolidated assets of Borrower and its Subsidiaries as of the last day of
the most recently completed fiscal quarter for which Bank has received financial
statements of Borrower and its Subsidiaries pursuant to Section 6.2, or (iii)
the consolidated net earnings of the Borrower and its Subsidiaries for the most
recently completed fiscal quarter for which Bank has received financial
statements of the Borrower and its Subsidiaries pursuant to Section 6.2, in each
case determined in accordance with GAAP for such period.
 
 
Exhibit A - Page 6

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“Maximum Sublimit Amount” has the meaning assigned in Section 2.1(b)(i)
 
“Negotiable Collateral” means all of Borrower’s present and future letters of
credit of which it is a beneficiary, drafts, instruments (including promissory
notes), securities, documents of title, and chattel paper, and Borrower’s Books
relating to any of the foregoing.
 
“Non-Formula Amount” means Two Million Five Hundred Thousand Dollars
($2,500,000).
 
“Obligations” means all debt, principal, interest, Bank Expenses and other
amounts owed to Bank by Borrower pursuant to this Agreement or any other
agreement, whether absolute or contingent, due or to become due, now existing or
hereafter arising, including any interest that accrues after the commencement of
an Insolvency Proceeding and including any debt, liability, or obligation owing
from Borrower to others that Bank may have obtained by assignment or otherwise.
 
“Patents” means all patents, patent applications and like protections including
without limitation improvements, divisions, continuations, renewals, reissues,
extensions and continuations-in-part of the same.
 
“Periodic Payments” means all installments or similar recurring payments that
Borrower may now or hereafter become obligated to pay to Bank pursuant to the
terms and provisions of any instrument, or agreement now or hereafter in
existence between Borrower and Bank.
 
“Permitted Indebtedness” means:
 
(n) Indebtedness of Borrower in favor of Bank arising under this Agreement or
any other Loan Document;
 
(o) Indebtedness existing on the Closing Date and disclosed in the Schedule;
 
(p) Indebtedness not to exceed One Hundred Thousand Dollars ($100,000) in the
aggregate in any fiscal year of Borrower secured by a lien described in clause
(c) of the defined term “Permitted Liens,” provided such Indebtedness does not
exceed the lesser of the cost or fair market value of the equipment financed
with such Indebtedness;
 
(q) Subordinated Debt;
 
(r) Indebtedness to trade creditors incurred in the ordinary course of business;
 
(s) Indebtedness not to exceed One Hundred Thousand Dollars ($100,000) which may
be deemed to exist pursuant to any surety and appeal bonds, or other similar
obligations in the ordinary course of business in accordance with customary
industry practices;
 
(t) (i) Indebtedness of any Subsidiary owing to Borrower as of April 25, 2014,
(ii) Indebtedness of a Subsidiary described in clause (e) of the definition of
Permitted Investments, and (iii) Indebtedness of a Foreign Subsidiary to a third
party not to exceed Five Hundred Thousand Dollars ($500,000) in aggregate for
all Foreign Subsidiaries at any time;
 
(u) Contingent Obligations in respect of operating leases and other performance
obligations (other than in respect of Indebtedness of the types described in
clauses (a) through (c) of the definition of Indebtedness);
 
(v) Extensions, refinancings and renewals of any items of Permitted
Indebtedness, provided that the principal amount is not increased or the terms
modified to impose more burdensome terms upon Borrower or its Subsidiary, as the
case may be;
 
 
Exhibit A - Page 7

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(w) Unsecured credit card debt incurred in the ordinary course of business not
to exceed One Hundred Thousand Dollars ($100,000) at any time; and
 
(x) Until December 9, 2014, cash secured credit cards issued by Silicon Valley
Bank to Borrower, provided that such cards are secured only the SVB Cash
Collateral Account;
 
(y) Other unsecured Indebtedness of Borrower not to exceed Two Hundred Thousand
Dollars ($200,000) at any time.
 
“Permitted Investment” means:
 
(z) Investments (i) existing on the Closing Date and disclosed in the Schedule
and (ii) made in Subsidiaries prior to April 25, 2014;
 
(aa) (i) Marketable direct obligations issued or unconditionally guaranteed by
the United States of America or any agency or any State thereof maturing within
one (1) year from the date of acquisition thereof, (ii) commercial paper
maturing no more than one (1) year from the date of creation thereof and
currently having rating of at least A-2 or P-2 from either Standard & Poor’s
Ratings Services or Moody’s Investors Service, Inc., (iii) Bank’s certificates
of deposit maturing no more than one (1) year from the date of investment
therein, and (iv) Bank’s money market accounts;
 
(bb) repurchases of stock from current or former employees or directors of
Borrower (including their heirs and estates) under the terms of applicable
repurchase agreements (i) in an aggregate amount not to exceed One Hundred
Thousand Dollars ($100,000) in any fiscal year, provided that no Event of
Default has occurred, is continuing or would exist after giving effect to the
repurchases, or (ii) in any amount where the consideration for the repurchase is
the cancellation of indebtedness owed by such employees or directors to Borrower
regardless of whether an Event of Default exists;
 
(cc) Investments accepted in connection with Permitted Transfers;
 
(dd) Investments of Subsidiaries (i) in or to Borrower or other Subsidiaries
that are secured Guarantors, or (ii) in or to other Subsidiaries that are not
secured Guarantors not to exceed Five Hundred Thousand Dollars ($500,000), in
the aggregate in any fiscal year.
 
(ee)  Investments by Borrower in Subsidiaries not to exceed One Million Dollars
($1,000,000), in the aggregate, during the term of this Agreement;
 
(ff) Investments not to exceed (i) Two Hundred Thousand Dollars ($200,000) in
the aggregate in any fiscal year consisting of travel advances in the ordinary
course of business, and (ii) One Hundred Thousand Dollars ($100,000) in the
aggregate in any fiscal year consisting of (A) employee relocation loans and
other employee loans and advances in the ordinary course of business, and (B)
loans to employees, officers or directors relating to the purchase of equity
securities of Borrower or its Subsidiaries pursuant to employee stock purchase
plan agreements approved by Borrower’s Board of Directors;
 
(gg) Investments (including debt obligations) received in connection with the
bankruptcy or reorganization of customers or suppliers and in settlement of
delinquent obligations of, and other disputes with, customers or suppliers
arising in the ordinary course of Borrower’s business;
 
(hh) Investments consisting of notes receivable of, or prepaid royalties and
other credit extensions, to customers and suppliers who are not Affiliates, in
the ordinary course of business, provided that this subparagraph (h) shall not
apply to Investments of Borrower in any Subsidiary;
 
(ii) Investments consisting of acquisitions expressly permitted under Section
7.3 of this Agreement; and
 
 
Exhibit A - Page 8

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(jj) Joint ventures or strategic alliances in the ordinary course of Borrower’s
business consisting of the non-exclusive licensing of technology, the
development of technology or the providing of technical support, provided that
any cash Investments by Borrower do not exceed One Hundred Thousand Dollars
($100,000) in the aggregate in any fiscal year.
 
“Permitted Liens” means the following:
 
(kk) Any Liens existing on the Closing Date and disclosed in the Schedule
(excluding Liens to be satisfied with the proceeds of the Advances) or arising
under this Agreement or the other Loan Documents;
 
(ll) Liens for taxes, fees, assessments or other governmental charges or levies,
either not delinquent or being contested in good faith by appropriate
proceedings and for which Borrower maintains adequate reserves, provided the
same have no priority over any of Bank’s security interests;
 
(mm) Liens securing Indebtedness not to exceed One Hundred Thousand Dollars
($100,000) in the aggregate (i) upon or in any Equipment (other than Equipment
financed by an Advance) acquired or held by Borrower or any of its Subsidiaries
to secure the purchase price of such Equipment or indebtedness incurred solely
for the purpose of financing the acquisition or lease of such Equipment, or (ii)
existing on such Equipment at the time of its acquisition, provided that the
Lien is confined solely to the property so acquired and improvements thereon,
and the proceeds of such Equipment;
 
(nn) Liens incurred in connection with the extension, renewal or refinancing of
the indebtedness secured by Liens of the type described in clauses (a) through
(c) above, provided that any extension, renewal or replacement Lien shall be
limited to the property encumbered by the existing Lien and the principal amount
of the indebtedness being extended, renewed or refinanced does not increase;
 
(oo) Liens arising from judgments, decrees or attachments in circumstances not
constituting an Event of Default under Sections 8.4 (attachment) or 8.8
(judgments/settlements);
 
(pp) Liens incurred in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other types of social
security;
 
(qq) Liens on the SVB Cash Collateral Account;
 
(rr) (i) Non-exclusive licenses or sublicenses and (ii) exclusive licenses set
forth on the Schedule granted in the ordinary course of Borrower’s business and,
with respect to any licenses where Borrower is the licensee, any interest or
title of a licensor or under any such license or sublicense;
 
(ss) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other
like Liens arising in the ordinary course of business which are not overdue for
a period of more than 30 days or which are being contested in good faith and by
appropriate proceedings if adequate reserves with respect thereto are maintained
on the books of the applicable Person;
 
(tt) Easements, rights-of-way, restrictions and other similar encumbrances
affecting real property which do not in any case materially detract from the
value of the property subject thereto or materially interfere with the ordinary
conduct of the business of the applicable Person; and
 
(uu) deposits to secure the performance of bids, trade contracts (other than for
borrowed money), contracts for the purchase of property, leases, statutory
obligations, surety and appeal bonds, performance bonds and other obligations of
a like nature, in each case, incurred in the ordinary course of business and not
representing an obligation for borrowed money.
 
“Permitted Transfer” means the conveyance, sale, lease, transfer or disposition
by Borrower or any Subsidiary of:
 
(vv) Inventory or Cash in the ordinary course of business;
 
 
Exhibit A - Page 9

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(ww) Non-exclusive licenses and similar arrangements for the use of the property
of Borrower or its Subsidiaries in the ordinary course of business;
 
(xx) Property in connection with Permitted Liens or Permitted Investments;
 
(yy) Leases or subleases of interest in real property entered into in the
ordinary course of business;
 
(zz) Worn-out or obsolete Equipment or Equipment no longer used or useful in the
business of Borrower or any Subsidiary, provided that such Equipment was not
financed with the proceeds of any Credit Extension;
 
(aaa) Dispositions, by means of trade-in, of Equipment used in the ordinary
course of business so long as such Equipment is replaced, substantially
concurrently, by like-kind Equipment;
 
(bbb) Property in the ordinary course of business between or among (i) Borrower
and any Subsidiary Guarantor(s) or (ii) Borrower or any Subsidiary Guarantor and
any Subsidiary that is not a Subsidiary Guarantor not to exceed Five Hundred
Thousand Dollars ($500,000) during the term of this Agreement; or
 
(ccc) Other assets of Borrower or its Subsidiaries that were not financed with
the proceeds of any Credit Extension, not to exceed One Hundred Thousand Dollars
($100,000) in the aggregate during any fiscal year.
 
“Person” means any individual, sole proprietorship, partnership, limited
liability company, joint venture, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint
stock company, estate, entity or governmental agency.
 
“Pricing Addendum” means that certain Prime Referenced Rate Addendum attached
hereto as Exhibit F.
 
“Prohibited Territory” means any person or country listed by the Office of
Foreign Assets Control of the United States Department of Treasury as to which
transactions between a United States Person and that territory are prohibited.
 
“Responsible Officer” means each of the Chief Executive Officer, the Chief
Operating Officer, the Chief Financial Officer and the Controller of Borrower.
 
“Revolving Line” means a Credit Extension of up to Ten Million Dollars
($10,000,000) (inclusive of the aggregate face amount of Letters of Credit
issued under the Letter of Credit Sublimit, the aggregate limits of the
corporate credit cards issued to Borrower and merchant credit card processing
reserves under the Credit Card Services Sublimit, and any amounts outstanding
under the Foreign Exchange Sublimit).
 
“Revolving Maturity Date” means June 9, 2016.
 
“Schedule” means the schedule of exceptions attached hereto and approved by
Bank, if any.
 
“Shares” means (i) sixty-five percent (65%) of the issued and outstanding
capital stock, membership units, partnership interests or other securities owned
or held of record by Borrower in any Material Foreign Subsidiary, and (ii) one
hundred percent (100%) of the issued and outstanding capital stock, membership
units, partnership interest or other securities owned or held of record by
Borrower in any Domestic Subsidiary of Borrower.
 
“SOS Reports” means the official reports from the Secretaries of State of each
Collateral State, Chief Executive Office State and the Borrower State and other
applicable federal, state or local government offices identifying all current
security interests filed in the Collateral and Liens of record as of the date of
such report.
 
 
Exhibit A - Page 10

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

 
“Subordinated Debt” means any debt incurred by Borrower that is subordinated in
writing to the debt owing by Borrower to Bank on terms reasonably acceptable to
Bank (and identified as being such by Borrower and Bank).
 
“Subsidiary” means any corporation, partnership or limited liability company or
joint venture in which (i) any general partnership interest or (ii) more than
fifty percent (50%) of the stock, limited liability company interest or joint
venture of which by the terms thereof ordinary voting power to elect the Board
of Directors, managers or trustees of the entity, at the time as of which any
determination is being made, is owned by Borrower, either directly or through an
Affiliate.
 
“Subsidiary Guarantor” means any Subsidiary that has granted a secured guaranty
in favor of Bank with respect to the Obligations.
 
“SVB Cash Collateral Account” means that certain account maintained by Borrower
at Silicon Valley Bank, with an aggregate balance not to exceed One Hundred
Thousand Dollars ($100,000) at any time, that serves as collateral for corporate
credit cards issued by Silicon Valley Bank to Borrower.
 
“Trademarks” means any trademark and servicemark rights, whether registered or
not, applications to register and registrations of the same and like
protections, and the entire goodwill of the business of Borrower connected with
and symbolized by such trademarks.
 
 
Exhibit A - Page 11

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

 

DEBTOR: ADEPT TECHNOLOGY, INC.     SECURED PARTY: COMERICA BANK

 
                                         
 EXHIBIT B
 
COLLATERAL DESCRIPTION ATTACHMENT TO LOAN AND SECURITY AGREEMENT
 
All personal property of Debtor of every kind, whether presently existing or
hereafter created or acquired, and wherever located, including but not limited
to: (a) all accounts (including health-care-insurance receivables), chattel
paper (including tangible and electronic chattel paper), deposit accounts,
documents (including negotiable documents), equipment (including all accessions
and additions thereto), general intangibles (including payment intangibles and
software), goods (including fixtures), instruments (including promissory notes),
inventory (including all goods held for sale or lease or to be furnished under a
contract of service, and including returns and repossessions), investment
property (including securities and securities entitlements), letter of credit
rights, money, and all of Debtor’s books and records with respect to any of the
foregoing, and the computers and equipment containing said books and records;
and (b) any and all cash proceeds and/or noncash proceeds thereof, including,
without limitation, insurance proceeds, and all supporting obligations and the
security therefor or for any right to payment.  All terms above have the
meanings given to them in the California Uniform Commercial Code, as amended or
supplemented from time to time.
 
Notwithstanding the foregoing, the Collateral shall not include (i) property
that is nonassignable by its terms without the consent of the licensor thereof
or another party (but only to the extent such prohibition on transfer is
enforceable under applicable law, including, without limitation, Sections 9406
and 9408 of the Code), (ii) any property for which the granting of a security
interest therein is contrary to applicable law, provided that upon the cessation
of any such restriction or prohibition, such property shall automatically become
part of the Collateral, (iii) any property that constitutes the capital stock of
a controlled foreign corporation (as defined in the IRC), in excess of sixty
five percent (65%) of the voting power of all classes of capital stock of such
controlled foreign corporations entitled to vote, and (iv) the Intellectual
Property; provided, however, that the Collateral shall include all accounts and
general intangibles that consist of rights to payment from the sale, licensing
or disposition of all or any part of, or rights in, the Intellectual Property
(the “Rights to Payment”).  Notwithstanding the foregoing, if a judicial
authority (including a U.S. Bankruptcy Court) holds that a security interest in
the underlying Intellectual Property is necessary to have a security interest in
the Rights to Payment, then the Collateral shall automatically, and effective as
of June 9, 2014, include the Intellectual Property to the extent necessary to
permit perfection of Bank’s security interest in the Rights to Payment.
 
 
 
 
Exhibit B - Page 1

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

 
EXHIBIT C

TECHNOLOGY & LIFE SCIENCES DIVISION
LOAN ANALYSIS
LOAN ADVANCE/PAYDOWN REQUEST FORM
DEADLINE FOR SAME DAY PROCESSING IS 3:00* P.M, P.S.T.
DEADLINE FOR CREDIT EXTENSIONS IS 3:00 P.M., P.S.T.**
DEADLINE FOR WIRE TRANSFERS IS 1.30 P.M, P.S.T.

*At month end and the day before a holiday, the cut off time is 1:30 P.M.,
P.S.T.
**Subject to 3 day advance notice.
 

TO: Loan Analysis DATE:     TIME:     FAX #: (650) 462-6061          

 

                  FROM: Adept Technology, Inc.     TELEPHONE REQUEST (For Bank
Use Only):       Borrower’s Name                     The following person is
authorized to request the loan payment   FROM:       transfer/loan advance on
the designated account and is known to me.     Authorized Signer’s Name        
                    FROM:                 Authorized Signature (Borrower)      
Authorized Requester & Phone #                   PHONE #                        
Received by (Bank ) & Phone #     FROM ACCOUNT#:               (please include
Note number, if applicable)                      
Authorized Signature (Bank)
    TO ACCOUNT#:               (please include Note number, if applicable)      
                   

 
 

  REQUESTED TRANSACTION TYPE REQUESTED DOLLAR AMOUNT     For Bank Use Only      
              PRINCIPAL INCREASE* (ADVANCE) $       Date Rec’d:       PRINCIPAL
PAYMENT (ONLY) $       Time: YES NO             Comp. Status:       OTHER
INSTRUCTIONS:         Status Date:             Time:             Approval:      
                             

 
All representations and warranties of Borrower stated in the Loan and Security
Agreement are true, correct and complete in all material respects as of the date
of the telephone request for an advance confirmed by this Borrowing Certificate,
including without limitation the representation that Borrower has paid for and
owns the equipment financed by Bank; 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.

*IS THERE A WIRE REQUEST TIED TO THIS LOAN ADVANCE? (PLEASE CIRCLE ONE) YES NO
If YES, the Outgoing Wire Transfer Instructions must be completed below.
 

  OUTGOING WIRE TRANSFER INSTRUCTIONS Fed Reference Number   Bank Transfer
Number                                          
The items marked with an asterisk (*) are required to be completed.
   
*Beneficiary Name
               
*Beneficiary Account Number
               
*Beneficiary Address
               
Currency Type
 
US DOLLARS ONLY
       
*ABA Routing Number (9 Digits)
               
*Receiving Institution Name
               
*Receiving Institution Address
               
*Wire Amount
  $                            

 
 
Exhibit C - Page 1

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EXHIBIT D

FORM OF BORROWING BASE CERTIFICATE

(See Attached)

 
 
 
 
 
 
Exhibit D
 
 

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

 
EXHIBIT D

 
 
GENERAL INSTRUCTIONS FOR THE "BORROWING BASE REPORT OF ACCOUNTS RECEIVABLE AND
INVENTORY"
 

 
This report was created using Excel 97.
 

There are number of cells that must be completed for the report to provide an
accurate number of your company's eligible collateral and availability.
 
The " Blue Tinted cells " indicate the fields to which you must provide the
numbers and information.
 
 
The " Black Tinted cells " indicate the presents of formulas and should only be
changed, as necessary, to fit your specific line of credit.
 
This brief guide will provide the user with information on how to complete each
report.
 
 
Detailed step by step instructions and definitions for your general information
are contained under separate tabs in this program for Accounts Receivable,
Ineligibles and Inventory .
 

Accounts Receivable
 
This section requires the user to input specific information to the accounts
receivable borrowing base certificate. The user will find that there are a
number of cells that need to be changed with specific numbers from your line of
credit. Once completed the numbers will be calculated automatically.
Specifically, we will tell you the cells in the formulas that must be changed
and how the formulas will look after the change.
 

Ineligibles
 
This page of the Report of Accounts Receivable worksheet contains the Bank's
categories of ineligible accounts receivable, as defined in the Loan and
Security Agreement. Input the information in the " Blue Tinted " numbered cells
within the section. The report will automatically add the numbers in the
ineligible section and transfer the result to the accounts receivable report
page. If you require more detail to support your
ineligibles calculations use the Ineligible Worksheet.
 

Inventory
 
Your Inventory sub feature of your line has its own report "Report of Inventory"
on a separate sheet in the same workbook. Open the worksheet and input the
appropriate information, detailing various types of eligible inventory (e.g. Raw
Materials, Finished Goods).

Loan
 
This Section requires the user to input specific information regarding the
status of its Line of Credit. As with the previous section the user has to
complete the " Blue Tinted " numbered cells within the section. Upon completion
of the information, the report will automatically generate the Net Loan
Availability.
 

General
 
Once you have completed inputting all the necessary information, all that is
required is to make sure you have typed in the company name, your name as the
preparer and have input the appropriate dates. Once you have done this, just
click on the print icon for both worksheets (Accts Rec & Inventory) and your
report(s) will be ready for submission to Comerica Bank-California, along with
your Accounts Receivable Agings. Or, you may
E-Mail the contents of your file directly to your Assigned Analyst using our
contact list with internet addresses.
 

Borrowing Base Report Modifications
If modifications to this Borrowing Base Report become necessary, please contact
our department and let us assist you with the modification.
 

Electronic Customer Agings
 
We are now accepting your Accounts Receivable and Accounts Payable agings and
Inventory Listings Electronically, on diskette or via the Internet. Please give
us a call if you want to begin transmitting your information to us in this
manner or if you have questions about the process.

Contacts
 
Douglas W. Anderson, VP/Manager, 408-556-5037
 
Maria Jimenez, First Level Officer/Supervisor, 408-556-5035
Christine Stock, Operations Supervisor, 310-417-5436
 
 
 

 

Exhibit D
 
 

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

 
[comerica.gif]
 Comerica Bank
 

REPORT OF ACCOUNTS RECEIVABLE AND INVENTORY (Note: Company should retain a copy
of this report for its records.)

We submit the following information in connection with the Loan and Security
Agreement(s) heretofore executed by the undersigned in favor of Comerica Bank.
This report is dated:     This reports sequential transmittal number is: 0  

 

  ACCOUNTS RECEIVABLE AND INVENTORY          
1.
Accounts Receivable Balance as of
    $ 0.00                
2.
Charges Billed This Period to Date (Dr to A/R)
    + 0.00                
3.
Credits Period to Date (Cr to A/R)
            A. Payments ( - ) 0           B.
Adjustments ( +/- )                                          
0   - 0.00                
4.
New Accounts Receivable Balance as of
    $ 0.00                
5.
Ineligible Accounts (see detailed Worksheets)
    - 0.00                
6.
Net Eligible Accounts Receivable (Line 4 less Line 5)
    $ 0.00                
7.
Accounts Receivable Loan Formula:
80%   $ 0.00                
8.
Non Formula of $2,500,000 (Line 8, Non Formula)
    $ 2,500,000.00                  
9.
A.
Total Collateral Loan Formula ( Line 7 + Line 8) or
    $ 0.00     B.
Maximum Loan Amount
      0.00                                    
LOAN
         
10.
Loan Balance Per Last Report dated:
    $ 0.00                  
11.
Less Loan Payments
    - 0.00    
( If submitting manually, attach tape to illustrate calculation of payments
total - since LAST REPORT)
                         
12.
Sub Total
    $ 0.00                  
13.
Plus Advances and Other Obligations
 
( If sending manually, attach tape to illustrate calculation )
        A. Advances Since Last Report 0           B.
This Advance
0           C.
Other Obligations (e.g., LC's, ACH Limits, 
0   + 0.00      
Credit Card Accounts, F/X Sublimit/Usage)
                         
14.
Current Loan Balance
    $ 0.00                  
15.
Net Loan Availability (The lesser of Lines 9 A or 8 B, less Line 14)
    $ 0.00  

 
AS SECURITY  FOR ALL OBLIGATIONS OF THE  UNDERSIGNED, DIRECT  OR CONTI
NGENT,  WHICH  ARE  NOW OWING  OR WHICH  HEREAFTER MAY  BE OWING  TO
COMERICA  BANK,   THE COMPANY  HEREBY ASSIGNS  AND GRANTS TO COMERICA   BANK A
SECURITY  INTEREST  I N THE ACCO UNTS LISTED I N THE ABOVE SCHEDULE,  MONIES DUE
UPON THE SAME AND ALL MERCHANDISE RETURNED  OR REJECTED. THE COMPANY  REPRESENTS
THAT THE ABOVE  SCHEDULE  CORRECTLY SETS FORTH THE ACCO UNTS  NOW OWING  THE
UNDERSIG NED FOR BO NA FIDE SALES AND DELIVERIES  OF MERCHANDISE; THAT THERE ARE
NO OFFSETS  OR COUNTER-CLAIMS OF ANY NATURE WHATSOEVER AGAINST  ANY OF THE
ACCOUNTS; THAT NONE OF THE SAID ACCO UNTS ARE PAST DUE (EXCEPT  AS NOTED O N
LINE 7); THAT PROPER  ENTRIES  HAVE  BEEN  MADE  ON
THE  BOOKS  OF  THE  COMPANY   DISCLOSING THE  ASSIGNMENT OF  SUCH  ACCOUNTS
TO  SAID  BANK;  THAT  NO NE  OF  SAID  ACCOUNTS HAVE  BEEN  SOLD  OR
ASSIGNED  TO ANY OTHER PARTY;  THAT SAID ACCOUNTS ARE ASSIGNED  PURSUANT  TO AND
IN ACCORDANCE WITH ALL THE TERMS  AND PROVISIONS OF THE LOAN AND
SECURITY  AGREEMENT AND ANY OTHER AGREEMENT EXECUTED  BY THE COMPANY  AND
COMERICA  BANK RELATING  TO ADVANCES  TO BE MADE BY SAID BANK O N SUCH ACCOUNTS
AND THE ASSIGNMENT THEREOF;  AND THAT ALL SUCH ACCOUNTS ARE ELIGIBLE ACCOUNTS
(EXCEPT  AS NOTED ON LINE 8); AS DEFINED  IN SAID SECURITY  AGREEMENTS.
 

      Company Name   Authorized Signature

 

BANK USE ONLY               Received by:   Transmittal:   Obligation #:   Date
Reviewed:   Customer:   Reviewer Initials:          

Form # AR-32381-5 (06/2001)

Exhibit D
 
 

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

 
Instructions for the Borrowing  Base Report of Accounts  Receivable  and
Inventory
 

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

Customers  reporting on a daily, weekly, monthly or quarterly basis (DOF/NDOF)
must complete a Report of Accounts Receivable  and Inventory.  Listed below is a
line by line instruction  on how to complete the Report of Accounts
Receivable  and Inventory.
 
The " Blue Tinted cells " indicate the fields to which you must provide the
numbers and information.
 
The " Black Tinted cells " indicate the presents of formulas and should only be
changed, as necessary, to fit your specific line of credit.

 

Line 1
Accounts Receivable  Balance:
The amount entered on this line should be the ending balance of the accounts
receivable as reported on the prior period's aging and tie to the New Accounts
Receivable  Balance on the prior period's Report of Accounts Receivable and
Inventory.

 
Line 2
Charges Billed This Period to Date (Debit to A/R):
The amount entered on this line is the cumulative  amount of invoices issued for
this period's reporting.

 
Line 3
Credits Period to Date (CR to A/R):
A) Payments: The input to this line is the cumulative amount of collections
received for this period's reporting. The amount should reflect the original
total amount of the Invoices being paid.
B) Adjustments: The input to this line is the cumulative amount of any
adjustments to the Invoices paid for this period's reporting.
This amount is the aggregate of the difference between the original invoice
amounts and collected amounts for the period.

 
Line 4
New Accounts Receivable  Balance:
The amount listed on this line must balance to the General Ledger amount on the
Balance Sheet for the date listed on the right side column.

 
Line 5
Ineligible Accounts:
The line automatically populates from the Ineligible AR Summary. These amounts
will be verified by the Bank.

 
Line 6
Net Eligible Accounts Receivable: The amount on this line is automatically
calculated.

 
Line 7
Accounts Receivable  Loan Formula :
The amount of net eligible accounts receivable  times the loan formula advance
rate. Enter the advance rate and the Formula automatically calculates.

 
Line 8
Inventory Loan Formula:
This line automatically populates from the Inventory BBC

 
Line 9
Total Collateral Loan Formula and Maximum Loan Amount:
A) Total Loan Formula (A/R + Inventory). This amount represents the combination
of the Accounts Receivable Loan Formula plus the Inventory Loan Formula. The
combined total cannot exceed the Maximum Loan Amount. B) Enter the Maximum Loan
Amount of the Line of Credit.

 
Line 10
Loan Balance
The amount on this line is based on the last report. Enter the date and bring
the last balance forward.

Line 11
Loan Payments : Enter the total loan payments made since the last report on this
line.

 
Line 12
Sub Total : Enter the result of Line 10, Less Line 11, on this Line or allow
calculation by formula.

 
Line 13
Advances and Other Obligations:
A. Enter a summary of all advances since the last report, on this line.
B. If you are requesting a current Advance enter it on this line.
C. Enter Other Obligations (Letters of Credit, Bankers Acceptances, FX
Sublimits/Usage, ACH Limits, Credit Cards Issued, Etc.) on this line.

Line 14
Current Loan Balance : Enter your Current Loan Balance on this line or allow
calculation by formula.

Line 15
Net Loan Availability : Enter the lesser of sum of Line 8 A or 8 B, less Line
14, on this Line.

 
Exhibit D
 
 

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

 
INELIGIBLE BREAKDOWN (NOTE: Company should retain a copy of this report for
its records)
 
 
 
Customer Name: ___________________________________
Aging Date: ______________________

 
LIST TOTAL LESS THAN 90 DAYS FOR EACH CATEGORY(S) AND THE GRAND TOTAL OF OVER
 
90 DAY ACCOUNTS.  USE INELIGIBLE WORKSHEET TO ITEMIZE LISTED CATEGORY(S) AS
NEEDED.

 

 
PER CUSTOMER
   
BANK USE ONLY
 
 
FEDERAL GOVERNMENT A/R
 
 
$0
   
 
$0
FOREIGN ACCOUNTS
 
$0
   
$0
CONTRA ACCOUNTS
 
$0
   
$0
AFFILIATE ACCOUNTS
 
$0
   
$0
25% RULE
 
$0
   
$0
CONCENTRATIONS
 
$0
   
$0
OLD CREDITS (Add Back as a +)
 
$0
   
$0
PRE-BILLED/ADVANCED BILLED
 
$0
   
$0
PROGRESS BILLED
 
$0
   
$0
OVER  120 + DAYS FROM INVOICE
 
$0
   
$0
OTHER (SPECIFY)
 
$0
   
$0
           
INELIGIBLE GRAND TOTAL
 
$0
   
$0

Line five (5) of the Report of AR and Inventory contains a formula to transfer
the Ineligible Grand Total.

The " Blue Tinted cells " indicate the fields to which you must provide the
numbers and information. The " Black Tinted cells " indicate the presents
of formulas and should only be changed, if necessary.
 
To the best of my knowledge and belief, this information is correct and may be
relied upon by you as a basis for advancing any credit to us.
 
___________________________________________
Authorized Signature ( Please type name above )
 
Exhibit D
 
 

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

 
     INELIGIBLE AR COLLATERAL
WORKSHEET                                                                                                           
 
Aging Date:

 
Foreign Accounts
     
Federal Government
 
 
 
1
 
Customer Name
 
Amount
 
 
$0
 
 
1
 
Customer Name
 
Amount
 
 
$0
2
   
$0
2
   
$0
3
   
$0
3
   
$0
4
   
$0
4
   
$0
5
   
$0
5
   
$0
6
   
$0
6
   
$0
7
   
$0
7
   
$0
8
   
$0
8
   
$0
9
   
$0
9
   
$0
10
   
$0
10
   
$0
 
Totals
 
$0
 
Totals
 
$0

 

  Contra Account      
Affiliate Account
                   
 
1
Customer Name
Amount
 
$0
 
1
Customer Name
Amount
 
$0
2
   
$0
2
   
$0
3
   
$0
3
   
$0
4
   
$0
4
   
$0
5
   
$0
5
   
$0
6
   
$0
6
   
$0
7
   
$0
7
   
$0
8
   
$0
8
   
$0
9
   
$0
9
   
$0
10
   
$0
10
   
$0
 
Totals
 
$0
 
Totals
 
$0

 

 
Ineligible Category (Define)
     
Ineligible Category (Define)
                   
 
1
Customer Name
Amount
 
$0
 
1
Customer Name
Amount
 
$0
2
   
$0
2
   
$0
3
   
$0
3
   
$0
4
   
$0
4
   
$0
5
   
$0
5
   
$0
6
   
$0
6
   
$0
7
   
$0
7
   
$0
8
   
$0
8
   
$0
9
   
$0
9
   
$0
10
   
$0
10
   
$0
 
Totals
 
$0
 
Totals
 
$0

 
( Note: Company should retain a copy of this report for its records )
 
Ineligible Calculations: Multiple calculations should be prepared on this
worksheet and the balances will be transferred to the Ineligibles sheet via
formulas.  Additional categories above can be redefined as needed.

The " Blue Tinted cells " indicate the fields to which you must provide the numbers and information.
The " Black Tinted cells " indicate the presents of formulas and should only be changed, if necessary.
 
Exhibit D
 
 

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

 
Accounts Receivable Aging Ineligibles: How the Ineligible Number is Calculated

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

 
The ineligible number is calculated by identifying certain type of receivables
that either prevent us from obtaining a secure position or leaves some doubt in
their ability to be collected.
Each of the items discussed below are detailed in the Loan and Security
Agreement.
 
Federal Government
Any Department or Agency of the Federal Government.  Assignments of claim
 
must be filed to include receivables as eligible collateral, if they exceed
$1,000.
 
Reason: The U.S. Government will pay not third parties without a specific
 
assignment, signed by the appropriate agency/department.
   
Foreign Government
Any account with a billing address outside the United States of America.   This
 
includes foreign affiliates or divisions of domestic corporations.  The
originating locations
 
of obligor purchase orders and payments remitted by them are the determining
factors,
 
when labeling the obligor as a foreign account.  Such A/R is not eligible unless
backed by a
 
confirmed L/C or by appropriate insurance with documentation acceptable to
 
Comerica Bank.
 
Reason:  Unable to enforce our UCC filing outside the jurisdiction of the USA.
   
Contra Account
Contras exist when there is a liability owing to a vendor that is also a
customer on your
 
accounts receivable aging.
 
Reason: The company in question is allowed the right to offset.
   
Affiliate Account
Any company that our customer has any material interest in (i.e. parent company,
 
Co-Ownership, etc.).   Employee accounts, salesman accounts, and related company
 
accounts are all examples of affiliate accounts.
 
Reason:  Bankruptcy filing of the company could affect our collateral value.
   
25% Rule
Any account with 25% or more of the total A/R balance in the prior column.  If
over 25%
 
of the total for this customer is over 90 days, this will eliminate the customer
entirely.
 
 Look down the priors column (90 day) for outstanding dollars, when you reach a
figure,
 
mentally quadruple it.  Compare to total outstanding for that customer.  If
greater than total,
 
the account would be eliminated.  Continue this process throughout  the aging.
 
Reason: Collection of the account is in doubt if 25% or more of the total is
+120 days.
   
Concentration
There is a concentration clause in every loan and security agreement.
 
Based upon your concentration allowance (usually 20% of total A/R) determine
what
 
would be ineligible by multiplying the total A/R by 20% or whatever is
allowed.  If any
 
customer exceeds this amount, the  excess is ineligible ( less any portion in
the priors or
 
retention column) unless approved by  Comerica Bank - California.
 
Reason: Too much reliance on one customer for the borrowing base.  Limits the
Bank's
 
risk to individual obligor's receivables.
   
Pre-Billed/Advanced
These relate to invoices generated in advance of the work to be performed or
goods to be
Billed
produced.  Payment in advance provides the working funds to start or complete
the project.
 
Advance billings are therefore ineligible because the work most likely has not
been performed.
 
Reason: The account debtor may be under no legal obligation to pay and may well
cancel the
 
order and demand the return of any payments made in advance.
   
Progress Billed
Progress billings relate to accounts receivable or contract rights generated at
certain stages
 
of completion of a project, usually subject to some form of approval for payment
on the part
 
of the owner.  If the project is not completed according to the owner's
satisfaction, any
 
outstanding receivables relating to that job are unlikely to be paid.  This
could include the
 
inability of the borrower to perform for whatever reason and often leads to
litigation. When
 
lending to companies whose primary line of business is machine tool building,
special tool
 
building, tool and die manufacturing or mold making, progress billing accounts
receivable may
 
be considered eligible, if approved.
 
Reason: May not be paid depending on customer's satisfaction with completed
work.
   
Other
Represents commissions, non-trade receivables.  Chapter 11 receivables, any
invoices
 
( e.g. COD, cash account and miscellaneous ) for which customer signed
documentation
 
is not available (verifying that shipment was received or services were
provided).
 
Reason: Very little or no collateral value.

 
Exhibit D
 
 

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Old Credits
Any credit total over 120 days past due must be added back as a positive number.
 
Credits over 120 days past due delude the true balance of the past due invoices.
 
The credit may also represent a source of repayment or adjustment other than
 
cash or any aged trade accounts receivable.
 
Reason: Credits in the prior column delude the true balance.
   
Aged Accounts
As many days past the invoice date deemed not collectable, usually 120+ days.
 
Reason: Ability to collect is in question.
   
Foreign Accounts
Eligible foreign billed accounts invoiced by either US Parent to a foreign
entity or by foreign subsidiaries to either a domestic or foreign entity must be
covered by credit insurance with Comerica Bank named as loss payee and
beneficiary on policy. Insurance carrier and policy must be acceptable to Bank.
       

Exhibit D
 
 

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EXHIBIT E

COMPLIANCE CERTIFICATE

Please send all Required Reporting
to:                                          Comerica Bank
Technology & Life Sciences Division
Loan Analysis Department
250 Lytton Avenue
3rd Floor, MC 4240
Palo Alto CA 94301
Phone: (650) 462-6060
Fax: (650) 462-6061

FROM: Adept Technology, Inc.

The undersigned authorized Officer of Adept Technology, Inc. (“Borrower”),
hereby certifies that in accordance with the terms and conditions of the Loan
and Security Agreement between Borrower and Bank (the “Agreement”), (i) Borrower
is in complete compliance for the period ending , 201___ with all required
covenants, including without limitation the ongoing registration of intellectual
property rights in accordance with Section 6.8, except as noted below and (ii)
all representations and warranties of Borrower stated in the Agreement are true
and correct in all material respects as of the date hereof; 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.
Attached herewith are the required documents supporting the above certification
(“Supporting Documents”). The Officer further certifies the Supporting Documents
are prepared in accordance with Generally Accepted Accounting Principles (GAAP)
and are consistently applied form one period to the next except as explained in
an accompanying letter or footnotes.

Please indicate compliance status by circling Yes/No under “Complies” or
“Applicable” column,

REPORTING COVENANTS
REQUIRED
COMPLIES
 
Company Prepared Monthly F/S
Monthly, within 30 days
YES
NO
Company Prepared Quarterly F/S
Quarterly, within 45 days
YES
NO
Compliance Certificate
Monthly, within 30 days
YES
NO
CPA Audited. Unqualified F/S
Annually, within 90 days of FYE
YES
NO
Borrowing Base Cert, A/R & A/P Agings
Monthly, within 30 days
YES
NO
Annual Business Plan
Annually, on or before July 31
YES
NO
Intellectual Property Report
Annually, within 90 days of FYE
YES
NO
Audit
Semi-annual
YES
NO
       
If Public:
     
10-Q
Quarterly, within 5 days of SEC filing (50 days)
YES
NO
10-K
Annually, within 5 days of SEC filing (95 days)
YES
NO
       
Total amount of Borrower’s cash and investments
Amount: $____________________________
YES
NO
Total amount of Borrower’s cash and investments maintained with Bank
Amount: $____________________________
YES
NO

 
DESCRIPTION
APPLICABLE
 
Legal Action > $500,000 (Sect. 6.2(iv))
Notify promptly upon notice _____________________
YES
NO
Inventory Disputes> $500,000 (Sect. 6.3)
Notify promptly upon notice _____________________
YES
NO
Mergers & Acquisitions (Sect. 7.3)
Notify promptly upon notice _____________________
YES
NO
Cross default with other agreements >$500,000 (Sect. 8.6)
Notify promptly upon notice _____________________
YES
NO
Judgments/Settlements >  $750,000 (Sect. 8.8)
Notify promptly upon notice _____________________
YES
NO
Capital Expenditures > $1,000,000 (Sect. 7.12)
Notify promptly upon notice _____________________
YES
NO
Borrower’s and Subsidiaries’ aggregate foreign account balance >  $2,000,000
(Sect. 6.6)
Notify promptly upon notice _____________________
YES
NO
Transfers to foreign accounts >  $500,000 (Sect. 6.6)
Notify promptly upon notice _____________________
YES
NO

FINANCIAL COVENANTS
REQUIRED
ACTUAL
COMPLIES
 
TO BE TESTED MONTHLY, UNLESS OTHERWISE NOTED
             
Maximum Quarterly EBITDA Loss
($500,000)
$________________________
YES
NO
Maximum Annual EBITDA Loss
($1,000,000)
$________________________
YES
NO
Minimum Cash at Bank
$1,000,000
$________________________
YES
NO

 
Exhibit E - Page 1

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FINANCIAL COVENANTS
REQUIRED
ACTUAL
COMPLIES
 
Permitted Indebtedness for equipment leases
<$100,000
$________________________
YES
NO
Permitted Investments for stock repurchase
<$100,000
$________________________
YES
NO
Permitted Investments for subsidiaries by Borrower
<$1,000,000 (total prior to termination of the Agreement)
$________________________
YES
NO
Permitted Investments to subs. that are not guarantors by subs.
<$500,000
$________________________
YES
NO
Permitted Investments for employee loans
<$100,000
$________________________
YES
NO
Permitted Investments for employee travel advances
<$200,000
$________________________
YES
NO
Permitted Investments for joint ventures
<$100,000
$________________________
YES
NO
Permitted Liens for equipment leases
<$100,000
$________________________
YES
NO
Permitted Transfers
<$100,000
$________________________
YES
NO
Permitted Unsecured Credit Cards
<$100,000
$________________________
YES
NO
Permitted Other Unsecured Indebtedness
<$200,000
$________________________
YES
NO

Please Enter Below Comments Regarding Violations:

 
Exhibit E - Page 2

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The undersigned further acknowledges that at any time Borrower is not in
compliance with all the terms set forth in the Agreement, including, without
limitation, the financial covenants, no Credit Extensions will be made.

Very truly yours,

ADEPT TECHNOLOGY, INC.

______________________________
Authorized Signer
 
______________________________
Name
 
______________________________
Title
 
 
Exhibit E - Page 3

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EXHIBIT F

PRICING ADDENDUM

(See Attached)
 
 
 
 
 
 
 
 
 
 
 
 
 

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Prime Referenced Rate Addendum
 
To Loan and Security Agreement
 
This Prime Referenced Rate Addendum to Loan and Security Agreement (this
“Addendum”) is entered into as of June 9, 2014, by and between Comerica Bank
(“Bank”) and Adept Technology, Inc., a Delaware corporation (“Borrower”).  This
Addendum supplements the terms of the Loan and Security Agreement dated as of
the date hereof between Borrower and Bank (as the same may be amended, modified,
supplemented, extended or restated from time to time, the “Agreement”).
 
1. Definitions.  As used in this Addendum, the following terms shall have the
following meanings.  Initially capitalized terms used and not defined in this
Addendum shall have the meanings ascribed thereto in the Agreement.
 
a.  
“Applicable Margin” means three quarters of one percent (0.75%) per annum.

 
b.  
 “Business Day” means any day, other than a Saturday, Sunday or any other day
designated as a holiday under Federal or applicable State statute or regulation,
on which Bank is open for all or substantially all of its domestic and
international business (including dealings in foreign exchange) in San Jose,
California, and, in respect of notices and determinations relating the Daily
Adjusting LIBOR Rate, also a day on which dealings in dollar deposits are also
carried on in the London interbank market and on which banks are open for
business in London, England.

 
c.  
“Change in Law” means the occurrence, after the date hereof, of any of the
following: (i) the adoption or introduction of, or any change in any applicable
law, treaty, rule or regulation (whether domestic or foreign) now or hereafter
in effect and whether or not applicable to Bank on such date, or (ii) any change
in interpretation, administration or implementation thereof of any such law,
treaty, rule or regulation by any Governmental Authority, or (iii) the issuance,
making or implementation by any Governmental Authority of any interpretation,
administration, request, regulation, guideline, or directive (whether or not
having the force of law), including any risk-based capital guidelines.  For
purposes of this definition, (x) a change in law, treaty, rule, regulation,
interpretation, administration or implementation shall include, without
limitation, any change made or which becomes effective on the basis of a law,
treaty, rule, regulation, interpretation administration or implementation then
in force, the effective date of which change is delayed by the terms of such
law, treaty, rule, regulation, interpretation, administration or implementation,
and (y) the Dodd-Frank Wall Street Reform and Consumer Protection Act (Pub. L.
111-203, H.R. 4173) and all requests, rules, regulations, guidelines,
interpretations or directives promulgated thereunder or issued in connection
therewith shall be deemed to be a “Change in Law”, regardless of the date
enacted, adopted, issued or promulgated, whether before or after the date
hereof, and (z) all requests, rules, guidelines or directives promulgated by the
Bank for International Settlements, the Basel Committee on Banking Supervision
(or any successor or similar authority) or the United States regulatory
authorities, in each case pursuant to Basel III, shall each be deemed to be a
"Change in Law", regardless of the date enacted, adopted, issued or implemented.

 
d.  
“Daily Adjusting LIBOR Rate” means, for any day, a per annum interest rate which
is equal to the quotient of the following:

 
 
(1)
for any day, the per annum rate of interest determined on the basis of the rate
for deposits in United States Dollars for a period equal to one (1) month
appearing on Page BBAM of the Bloomberg Financial Markets Information Service as
of 8:00 a.m. (California time) (or as soon thereafter as practical) on such day,
or if such day is not a Business Day, on the immediately preceding Business
Day.  In the event that such rate does not appear on Page BBAM of the Bloomberg
Financial Markets Information Service (or otherwise on such Service) on any day,
the “Daily Adjusting LIBOR Rate” for such day shall be determined by reference
to such other publicly available service for displaying eurodollar rates as may
be reasonably selected by Bank, or in the absence of such other service, the
“Daily Adjusting LIBOR Rate” for such day shall, instead, be determined based
upon the average of the rates at which Bank is offered dollar deposits at or
about 8:00 a.m. (California time) (or as soon thereafter as practical), on such
day, or if such day is not a Business Day, on the immediately preceding Business
Day, in the interbank eurodollar market in an amount comparable to the
outstanding principal amount of the Obligations and for a period equal to one
(1) month;

 
 
2

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

 
divided by
 
 
(2)
1.00 minus the maximum rate (expressed as a decimal) on such day at which Bank
is required to maintain reserves on "Euro-currency Liabilities" as defined in
and pursuant to Regulation D of the Board of Governors of the Federal Reserve
System or, if such regulation or definition is modified, and as long as Bank is
required to maintain reserves against a category of liabilities which includes
eurodollar deposits or includes a category of assets which includes eurodollar
loans, the rate at which such reserves are required to be maintained on such
category.

 
e.  
“Governmental Authority” means the government of the United States of America or
any other nation, or of any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government (including, without limitation, any supranational bodies such as the
European Union or the European Central Bank).

 
f.  
“LIBOR Lending Office” means Bank’s office located in the Cayman Islands,
British West Indies, or such other branch of Bank, domestic or foreign, as it
may hereafter designate as its LIBOR Lending Office by notice to Borrower.

 
g.  
"Prime Rate" means the per annum interest rate established by Bank as its prime
rate for its borrowers, as such rate may vary from time to time, which rate is
not necessarily the lowest rate on loans made by Bank at any such time.

 
h.  
"Prime Referenced Rate" means, for any day, a per annum interest rate which is
equal to the Prime Rate in effect on such day, but in no event and at no time
shall the Prime Referenced Rate be less than the sum of the Daily Adjusting
LIBOR Rate for such day plus two and one-half percent (2.50%) per annum.  If, at
any time, Bank determines that it is unable to determine or ascertain the Daily
Adjusting LIBOR Rate for any day, the Prime Referenced Rate for each such day
shall be the Prime Rate in effect at such time, but not less than two and
one-half percent (2.50%) per annum.

 
2. Interest Rate Options.  Subject to the terms and conditions of this Addendum,
the Obligations under the Agreement shall bear interest at the Prime Referenced
Rate plus the Applicable Margin.
 
3. Payment of Interest.  Accrued and unpaid interest on the unpaid balance of
the Obligations outstanding under the Agreement shall be payable monthly, in
arrears, on the first (1st) day of each month, until maturity (whether as stated
herein, by acceleration, or otherwise).  In the event that any payment under
this Addendum becomes due and payable on any day which is not a Business Day,
the due date thereof shall be extended to the next succeeding Business Day, and,
to the extent applicable, interest shall continue to accrue and be payable
thereon during such extension at the rates set forth in this Addendum.  Interest
accruing hereunder shall be computed on the basis of a year of 360 days, and
shall be assessed for the actual number of days elapsed, and in such
computation, effect shall be given to any change in the applicable interest rate
as a result of any change in the Prime Referenced Rate on the date of each such
change.
 
4. Bank’s Records.  The amount and date of each advance under the Agreement, its
applicable interest rate, and the amount and date of any repayment shall be
noted on Bank's records, which records shall be conclusive evidence thereof,
absent manifest error; provided, however, any failure by Bank to make any such
notation, or any error in any such notation, shall not relieve Borrower of its
obligations to repay Bank all amounts payable by Borrower to Bank under or
pursuant to this Addendum and the Agreement, when due in accordance with the
terms hereof.
 
 
3

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

 
5. Default Interest Rate.  From and after the occurrence of any Event of
Default, and so long as any such Event of Default remains unremedied or uncured
thereafter, the Obligations outstanding under the Agreement shall bear interest
at a per annum rate of four percent (4%) above the otherwise applicable interest
rate hereunder, which interest shall be payable upon demand.  In addition to the
foregoing, a late payment charge equal to four percent (4%) of each late payment
hereunder may be charged on any payment not received by Bank within ten (10)
calendar days after the payment due date therefor, but acceptance of payment of
any such charge shall not constitute a waiver of any Event of Default under the
Agreement.  In no event shall the interest payable under this Addendum and the
Agreement at any time exceed the maximum rate permitted by law.
 
6. Prepayment.   Borrower may prepay all or part of the outstanding balance of
any Obligations at any time without premium or penalty.  Any prepayment
hereunder shall also be accompanied by the payment of all accrued and unpaid
interest on the amount so prepaid.  Borrower hereby acknowledges and agrees that
the foregoing shall not, in any way whatsoever, limit, restrict, or otherwise
affect Bank’s right to make demand for payment of all or any part of the
Obligations under the Agreement due on a demand basis in Bank’s sole and
absolute discretion.
 
7. Regulatory Developments or Other Circumstances Relating to the Daily
Adjusting LIBOR Rate.
 
a.  
If any Change in Law shall: (a) subject Bank to any tax, duty or other charge
with respect to this Addendum or any Obligations under the Agreement, or shall
change the basis of taxation of payments to Bank of the principal of or interest
under this Addendum or any other amounts due under this Addendum in respect
thereof (except for changes in the rate of tax on the overall net income of Bank
or its LIBOR Lending Office imposed by the jurisdiction in which Bank's
principal executive office or LIBOR Lending Office is located); or (b) impose,
modify or deem applicable any reserve (including, without limitation, any
imposed by the Board of Governors of the Federal Reserve System), special
deposit or similar requirement against assets of, deposits with or for the
account of, or credit extended by Bank, or shall impose on Bank or the foreign
exchange and interbank markets any other condition affecting this Addendum or
the Obligations; and the result of any of the foregoing is to increase the cost
to Bank of maintaining any part of the Obligations or to reduce the amount of
any sum received or receivable by Bank under this Addendum by an amount deemed
by Bank to be material, then Borrower shall pay to Bank, within fifteen (15)
days of Borrower’s receipt of written notice from Bank demanding such
compensation, such additional amount or amounts as will compensate Bank for such
increased cost or reduction.  A certificate of Bank, prepared in good faith and
in reasonable detail by Bank and submitted by Bank to Borrower, setting forth
the basis for determining such additional amount or amounts necessary to
compensate Bank shall be conclusive and binding for all purposes, absent
manifest error.

 
b.  
In the event that any Change in Law affects or would affect the amount of
capital required or expected to be maintained by Bank (or any corporation
controlling Bank), and Bank determines that the amount of such capital is
increased by or based upon the existence of any obligations of Bank hereunder or
the maintaining of any Obligations, and such increase has the effect of reducing
the rate of return on Bank's (or such controlling corporation's) capital as a
consequence of such obligations or the maintaining of such Obligations to a
level below that which Bank (or such controlling corporation) could have
achieved but for such circumstances (taking into consideration its policies with
respect to capital adequacy), then Borrower shall pay to Bank, within fifteen
(15) days of Borrower's receipt of written notice from Bank demanding such
compensation, additional amounts as are sufficient to compensate Bank (or such
controlling corporation) for any increase in the amount of capital and reduced
rate of return which Bank reasonably determines to be allocable to the existence
of any obligations of Bank hereunder or to maintaining any Obligations.  A
certificate of Bank as to the amount of such compensation, prepared in good
faith and in reasonable detail by Bank and submitted by Bank to Borrower, shall
be conclusive and binding for all purposes absent manifest error.

 
8. Legal Effect.  Except as specifically modified hereby, all of the terms and
conditions of the Agreement remain in full force and effect.
 
9. Conflicts.  As to the matters specifically the subject of this Addendum, in
the event of any conflict between this Addendum and the Agreement, the terms of
this Addendum shall control.

 
 
4

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[Remainder of Page Intentionally Left Blank]
 
 
 
 
 
 
 
5

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

 
IN WITNESS WHEREOF, the parties have agreed to the foregoing as of the date
first set forth above.
 
COMERICA BANK 
ADEPT TECHNOLOGY, INC.

 

By: ___________________________
By: ______________________________

Name: _________________________
Name: ____________________________

Title: __________________________
Its: ______________________________